Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 3678-TA

STAFF APPRAISAL REPORT

TANZANIA

DAR ES SALAAM SEWERAGE AND SANITATION PROJECT

November 29, 1982

Water Supply and Urban Development DivisionEastern Africa Regional Office

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

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CURRENCY EQUIVALENTS

Currency Unit = Tanzania Shilling (TSh)TSh 1.0 = US$0.11

US$1.0 = TSh 9.40

MEASUREMENT EQUIVALENTS

1 meter (m) = 39 inches = 3.28 feet

1 kilometer (km) = 0.62 miles1 square kilometer (km2) = 0.386 square mile1 hectare (ha) = 0.01 km2 = 2.25 acre

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

1 liter (1) = 0.22 Imperial gallonslcd = liters per capita per day1 Ig = 1 Imperial gallon = 4.545 1

ABBREVIATIONS AND ACRONYMS

AFYA = Ministry of HealthARDHI = Ministry of Lands, Housing and Urban DevelopmentCIDA - Canadian International Development AgencyCN - choo nzuri (ventilated improved pit latrine)DCC - Dar es Salaam City CouncilDCS = Dar es Salaam Water Corporation SoleDSSD = Dar es Salaam Sewerage and Sanitation DepartmentGovernment = Government of the United Republic of TanzaniaHHP = Howard Humphreys and Partners, Consulting

EngineersICB = International Competitive BiddingJTS = John Taylor & Sons, Consulting EngineersKfW = Kreditanstalt fur Wiederaufbau,

Federal Rebublic of GermanyLCSE = Low-Cost Sanitation EngineerMMM = Marshall Macklin Monaghan Limited,

Consulting EngineersMWE = Ministry of Water and Energy (formerly

Ministry of Water, Energy and Minerals)NUWA = National Urban Water AuthorityODA - Overseas Development Authority, U.K.PMM = Peat, Marwick, Mitchell and CompanyPMO = Prime Minister's OfficePPF = Project Preparation FacilitySIDA = Swedish International Development AuthorityTAG = Technology Advisory Group, UNDP P'roject

GLO/78/006TANESCO = Tanzania Electric Supply Co. Ltd.UNDP = United Nations Development PrograLmmeWHO = World Health Organization

FISCAL YEARJuly 1 - June 30

FOR OFFICIAL USE ONLYTANZANIA

DAR ES SALAAM SEWERAGE AND SANITATION PROJECT

STAFF APPRAISAL REPORT

TABLE OF CONTENTS

Page No.

I. THE WATER SUPPLY, SEWERAGE AND SANITATION SECTOR

Country Background. ..... . .... .. *. . .1.............

Water Supply Sector.... ...... ................... .*.. 2Sewerage and Sanitation Sector Organizations...... 3Present Service Levels ........................ .. 3Government's Service Level Goals .................. 3Sector Constraints ......... . ..... o...... .. ...... . 4

Previous Bank Group Involvement............... 0...... 4

II. POPULATION, WATER SUPPLY, SEWERAGE AND SANITATIONIN THE PROJECT AREA (DAR ES SALAAM)

Location and Special Featuresoo.ooo.. ... o ....... 5Regional Development Prospects ... o............... 7Sector Agencies .... ..... . .... 0 .... . . . 0 ..... .. . . 7Existing Water Supply System.....oo.ooo .......... 8Existing Sewerage and Sanitation Systems......o.... 8Population Served and Standards of Service ...... oo 9Water Supply and Sanitation Services for the

Urban Poor ....................................... o 11Population Projections and Demand for Sewerage andSanitation Serviceso............................ 11

III. THE PROJECT

Genesis ........................ oo ...... o ... o.. 12Objectives ............... ......................... 13Technological Alternatives .. o...ooo.............. 14Description of Project Components ................. 15Cost Estimateso... ......... ... . ...... ..... ....... 16Project Financing............ ........ o....... ....... . 18Implementationoo ...... .o..................... o..o.o ...... o.. 18Resources Aspects..o. .. o .... o ...... ooo ....... 20Procurement ................................ . 20Disbursements .o.o... ..o............................ ... o...... 21

This report was prepared by Messrs. P. Callejas (Senior Engineer, EAPEW)and J. Sneddon (Senior Financial Analyst, EAPEW) and is based uponinformation obtained during an appraisal mission to Tanzania byMessrs. Callejas and Sneddon in June and July 1981. The mission wasassisted by UNDP/IBRD Technology Advisory Group Consultants, Dr. MarilynTonon and Mr. Peter Hawkins.

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

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Page No.

IV. FINANCIAL ANALYSIS

Past Performance.....".. ......................... . 21Future Financial Performance ........ .. ........... 22Financing Plan ............................................. 25Project Monitoring Indicators ..................... 27

V. BORROWER AND IMPLEMENTING AGENCIES

Lending Arrangements ............. . .................. . 27Organizations ... .. ................... ..... . 27Dar es Salaam Sewerage and SanitationDepartment (DSSD) ...................... .... 28

Management and Staff.... ... ........ .... * . 28Management Development and Training ......nso. 28

Management Systems ................................ 29Audit and Insurance .................. ................ . 30

VI. ECONOMIC AND SOCIAL ANALYSIS

Project Benefits .................................. 31Least Cost Solution ............................. .. 32Rate of Return and Pricing ................. ....... 32Impact on Poverty Group........................... 33Project Merit and Risks ... ......................... 33

VII. AGREEMENTS TO BE REACHED AND RECOMMENDATIONS

Agreements Reached ............................... 34Recommendation ... .. ...... .. ....... .......... . . . . . 35

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LIST OF ANNEXES

1. Existing Water Supply, Sewerage and Sanitation Systems.2. Project Description.3. Project Costs and Program of Expenditures.4. Implementation Schedule.5. Proposed Allocation of Credit Proceeds.6. Estimated Schedule of Disbursements from Credit.7. Financial Forecasts - DSSD Low-Cost Sanitation: 1983-1987.8. Financial Forecasts - DSSD Sewerage: 1983-1987.9. Sewerage Sector Consolidated Financial Forecasts - 1983-1987.10. Notes and Assumptions for the Financial Forecasts.11. Project Monitoring Indicators.12. Organization Chart.13. Annual Economic Cost of Pit Latrines.14. Return on Investment and Sensitivity Analysis.15. Selected Documents and Data Available in Project File.

MAPS

IBRD 16132: Dar es Salaam Sewerage and Sanitation Project.

TANZANIA

DAR ES SALAAM SEWERAGE AND SANITATION PROJECT

STAFF APPRAISAL REPORT

I. THE WATER SUPPLY, SEWERAGE AND SANITATION SECTOR

Country Background

1.01 Tanzania (Map IBRD 16132) is bordered by the Indian Ocean on theeast, Kenya and Uganda in the north, Rwanda, Burundi and Zaire in the west,and Mozambique, Malawi and Zambia in the south and southwest. Tanzania isabout 0.94 million km2 in area (almost twice the size of France). Theclimate is generally tropical with monsoon rains. It is hot and humid inthe low coastal plains which rise gradually to the cooler and drier centralplateau. Except for the narrow coastal belt, most of the country is at analtitude above 200 m and a large part is at about 1000 m.

1.02 The mid-1980 population was estimated at 19 millionl/ andincreasing at an annual rate of 3.4%; about 16.7 million were in the ruralareas including about 8000 villages; 2.3 million were in the urban areas,including some 55 towns with populations greater than 5000 and the City ofDar es Salaam. The urban population has been growing at about 8.7% onaverage annually, increasing the proportion of the urban population from 5%in 1967 to about 12% in 1980.

1.03 Mainland Tanzania is divided into 20 administrative regions eachheaded by a Regional Commissioner assisted by a Regional DevelopmentDirector. Civil servants in the regions are responsible to the RegionalDevelopment Director who has a rank equivalent to a ministerial PrincipalSecretary and who is linked to Government through the Prime Minister'sOffice (PMO). Town councils, including the Dar es Salaam City Council,DCC, (paragraphs 2.05 and 2.06), were abolished in 1974 and brought intothe District/Regional system. However, the councils were re-established inJuly 1978.

1.04 Average per capita GNP was estimated at $280 for 1980.Agriculture contributed 54%, industry 13% and services 33%, to total GDP inthat year. Tanzania is facing its worst economic crisis sinceindependence; oil price increases (130%) over the past two years and thenecessity to import food, coupled with stagnating exports, have causedsevere economic problems and a chronic shortage of foreign exchange.The Government is facing difficulties in making the adjustments which mayput the economy back on course and recovery is likely to be a lengthyprocess.

1/ World Development Report, 1982

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Water Supply Sector

1.05 Tanzania is generally dry with limited surface and, groundwaterresources. Three river basins exist which respectively drain into: (i) theIndian Ocean; (ii) Lake Tanganyika and the Zaire river; and (iii) LakeVictoria and the Nile. Drier regions are in the center of the country andin the Rift Valley where there are no perennial rivers and groundwater isscarce. The central plateau receives less than 1 m of annual rainfall butthe areas around Kilimanjaro and north of Lake Nyasa have an annualrainfall exceeding 1.5 m. Salinity and a high fluoride content in someaquifers limit the use of groundwater.

1.06 The Ministry of Water and Energy (MWE) has responsibility formanagement and development of all water resources. Regiona]. developmentplans are submitted to the Ministry of Planning through the PMO whichensures that MWE comments on the plans. Dar es Salaam's water supply isthe responsibility of the Dar es Salaam Water Corporation Sole (DCS), aparastatal organization which reports to the PMO but also is under thetechnical control of MWE.

1.07 A National Urban Water Authority (NUWA) was estab:Lished byParliament in April, 1981. Its establishment followed five years of studyand deliberation. NUWA is in the early stages of formation and willinitially take over the water supply facilities in Dar es Salaam, Morogoro,Iringa, Mwanza, Moshi and Arusha, and DCS will be dissolved. NUWA isintended to operate urban water supplies as a reasonably aul:onomousnational entity and particularly to be responsible for its own finance5 asthe Treasury has been unable to allocate sufficient funds to MWE foradequate operations and maintenance. NUWA should be in a position to avoidmany of the problems encountered by DCS (paragraph 2.17) and, operate on acommercial basis, as in the case of the Tanzania Electric Supply CompanyLimited (TANESCO), its counterpart in the power sector which is alsoaccountable to MWE. Technical assistance to NUWA would be a component ofthe proposed sewerage and sanitation project.

1.08 Every major urban center in Tanzania has a piped water supplysystem. An estimated 85% of the 1978 urban population had access to pipedwater; the remaining population, usually in the poorer parts of the towns,obtained water from ponds, streams or shallow wells which often arepolluted. Statistics published by the World Health Organization (WHO) for1975 indicated that about 17% of urban consumers were suppl:Led throughhouse connections and the balance, through public standpipes. Duringrecent years, because of inadequate funds, expansion of urban water systemshas fallen behind the growth of demand and operation and ma[ntenancestandards have suffered.

1.09 WHO has estimated that in 1980 about 26% of the nrral populationobtained water from village systems operated by Regional Water Departmentsunder the technical direction of MWE. A further 12% drew water fromprivate and community supplies and protected traditional sources.

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Sewerage and Sanitation Sector Organizations

1.10 Sewerage and Sanitation in the urban areas is under the overallcontrol and responsibility of the Ministry of Lands, Housing and UrbanDevelopment (ARDHI). Towns2 / are responsible for operation and maintenanceand ARDHI plans or approves plans for expansion and is responsible forimplementation. Rural sanitation is the responsibility of the Ministry ofHealth (AFYA). ARDHI assumed responsibility for sewerage and sanitationin 1978 following the 1977 cholera epidemic when the sewerage problem inDar es Salaam became a major concern. ARDHI is still in the process ofdeveloping its Sewerage and Drainage Division.

Present Service Levels

1.11 Twenty of Tanzania's 55 towns with populations over 5000 areregional headquarters, but only six are partially served by waterbornesewerage - Arusha, Dar es Salaam, Moshi, Mwanza, Tabora and Tanga. Thepopulation served totals about 200,000, 10% to 20% of their residents. Theremainder of the country's population is served by septic tanks and pitlatrines. Efforts have been made since 1977 to improve sanitation andARDHI estimates that about 90% of all households in the country have someform of excreta disposal facility, although many are unsanitary.

1.12 Shortage of funds precludes the rural sanitation problem frombeing addressed in a substantial way, although some projects for pitlatrines are being undertaken by UNDP, bilateral and other agencies as partof rural development.

1.13 The disestablishment of town councils (paragraph 1.03) led to theneglect of city and town infrastructure including underfinancing ofoperations and maintenance and, in the case of Dar es Salaam, dispersal ofexperienced staff. Sewerage and sanitation operations and pit latrineemptying services suffered and virtually ceased during this period.The existing staff have been endeavoring to improve service sincereintroduction of the councils, but with little success due to the lack offunds and equipment and because of a severe shortage of qualified staff.

Government's Service Level Goals

1.14 The Government has not established specific sector service levelgoals. However, ARDHI has drafted a sector policy paper which is beingreviewed by concerned ministries and which ARDHI hopes to submit forcabinet approval in the near future. The proposed policy would includeupgrading the low-cost on-plot sanitation facilities in urban areas tosatisfactory hygienic levels. These are the facilities used by 70% to 90%of the urban population, for whom it would be prohibitively expensive toprovide waterborne sewerage. The policy also would be to expand andimprove waterborne sewerage services for the remainder of theurban population. Toward this end, ARDHI has engaged consultants toprepare master plans for sewerage and sanitation for Dar es Salaam, Moshi,Arusha, Morogoro and Mwanza, including studies of the financial andinstitutional implications of such schemes.

2/ Includes the City of Dar es Salaam.

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Sector Constraints

1.15 Three major factors constrain the effort to improve sewerage andsanitation in Tanzania. The prime constraint is the lack of adequateorganization structures, both in ARDHI and in the town councils, toimplement projects and operate the systems, whether sewerage or low-costsanitation.

1.16 The second constraint is the lack of qualified staff,particularly administrators, engineers, financial managers, accountants andtechnicians. Consultants have estimated that about 300 such personnelwould be required for Dar es Salaam alone by 1990. Perhaps 600 would berequired to meet the needs of all the communities for which master plansare being prepared (paragraph 1.14). At present there are very fewgraduate sanitary engineers in Tanzania and Dar es Salaam University doesnot have a sanitary engineering program. ARDHI has recently established aDepartment of Public Health Engineering at the ARDHI Training Institutewith a three year diploma course and a first year class of 25, aninadequate number in view of the requirements. A more subst:antial trainingprogram is required. Until indigenous staff are trained, many of thesector managers will need to be found outside Tanzania.

1.17 The third constraint is finance. Although the availableresources for sewerage and sanitation dictate that low-cost methods areused, the resources needed are large. Theoretical estimates indicate thatif the population served by sewerage were increased by 50% by the year2000, the financial requirements would be about TSh 2.5 bilLion (aboutUS$270 million) at 1981 prices. To improve on-plot sanitation facilitiesto adequate standards for the remainder of the urban populal:ion could costup to TSh 15 billion (about US$1.6 billion) at 1981 prices, based on pricestypical for Dar es Salaam. Raising the local contribution to investmentsof such magnitude would require major adjustments to charging andcollection policies for sewerage and latrine emptying services and for thecapital cost of new latrines, but even this would not be enough. Thesearch for less costly, but equally efficient, methods of providingsanitation needs to be pursued constantly.

Previous Bank Group Involvement

1.18 The proposed project would be the second Bank Group operation inTanzania's water supply, sewerage and sanitation sector. Tlhe firstproject,financed by Loan 1354-TA in 1977, was for the expansion of watersupplies to Morogoro. Implementation of that project is about two yearsbehind schedule because of poor performance by the civil works contractorfor the major project component. There also have been difficulties inestablishing NUWA, a separate entity responsible for urban iwater supply(paragraph 1.07). Following resolution of these difficulties, five keypersonnel are being selected from within the Government or private sectorto fill senior management posts. Once these appointments are made,consultants will be engaged to assist with recruitment of additional NUWAstaff, train such staff to provide interim advice pending the recruitmentof Tanzanian nationals for key posts. These consulting services would befinanced partially from the proposed credit for the sewerage and sanitationproject.

1.19 In addition to the Urban Water Supply Project at Morogoro, ruraldevelopment, agriculture and urban projects financed by IDA have containedwater supply and sanitation components.3 /

1.20 There are no major lessons to be learned from the contractorproblems on the Morogoro project; failure in performance could not havebeen foreseen or prevented by appropriate remedial measures.

1.21 One lesson to be learned from the Morogoro project is to ensurethe enactment of necessary legislation in the course of projectimplementation. In the proposed sewerage and sanitation project for Dar esSalaam a separate department of DCC (paragraph 5.03) would be responsiblefor project operation and ARDHI will be responsible for implementation. Nonew legislation will be required, and the administrative steps required toestablish the department have been taken already.

II. POPULATION, WATER SUPPLY, SEWERAGE AND SANITATIONIN THE PROJECT AREA (DAR ES SALAAM)

Location and Special Features

2.01 The proposed sewerage and sanitation project would be within themunicipal boundaries of Dar es Salaam (Map IBRD 16132). However, the studyarea for which a Master Plan for Sewerage and Sanitation has been developedextends beyond the municipality to the boundary of the Dar es SalaamRegion. The total area of the municipality is about 45,000 ha, andof the region, about 112,000 ha.4/ As of 1978/79, about 10,400 ha of themunicipal area were developed and about 4,500 ha were designated as quarryareas or for military purposes. Parts of the municipal area andsubstantially all of the region outside are rural in character.

2.02 Dar es Salaam is the major port of Tanzania and has a goodnatural harbour and port facilities. Over the past 100 years it has grownfrom a small coastal town to a major city with a large university and isthe principal center of commerce and industry in Tanzania. AlthoughDar es Salaam is the present capital of Tanzania, the Government plans tomove eventually to Dodoma.

3/ The First and Second National Sites and Services Projects (Credits495-TA and 732-TA); Kigoma Rural Development Project (Credit 508-TA):Tabora Rural Development Project (Credit 703-TA); and theMwanza/Shinyanga Rural Development Project (Credit 803-TA).

4/ Urban Development Master Plan of the City of Dar es Salaam,Marshall Macklin Monaghan Limited (MMM), 1979.

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2.03 The population of Dar es Salaam municipality increased from about69,000 in 1948 to an estimated 782,000 in 1978 at an average rate of 8.5%per annum. 5/ Surveys carried out in 1979 in the course ofpreparing an urban development master plan6/ indicated that the mid-1981population of the Region could be to be about 1,060,000 comprising:

Residential 908,000Institutional7/ 68,000

976,000Rural 84,000

1,060,000

At least 60% of the city population resides in squatter or unplannedhousing areas occupying approximately 40% of all residential land area.

2.04 The city is divided into three districts, 10 sub-districts and 52wards. Five wards in Temeke District (southern part of the city) have beenselected tentatively as the site of the low-cost sanitation component ofthe project and have a total population (1978) of about 200,000.

2.05 Councillors of DCC are elected from the city electoral wards.DCC has a City Director (City Manager) who is the chief executiveresponsible to the council for city operations. He has under him the CityEngineer, Medical Officer of Health, City Treasurer and other officers tohead the various city departments.

2.06 Although DCC is theoretically autonomous, all funds required arereceived from the Government as though it were a Government department.The funds are restricted, as are all central budget funds, and DCC receivesinsufficient funds to discharge its responsibilities in infrastructuremaintenance and the provision of services.

2.07 The characteristics of the project area which affect the designand operation of sewerage and sanitation are subsoil conditions,groundwater elevations, topography, climate and stormwater floodingconditions . In general, subsoil conditions for sewerage construction arenot particularly difficult; however, there are areas of high groundwater,coral limestone or loose sand which increase excavation costs. Seweragedesign is complicated by the generally flat terrain and a number of streamvalleys which dissect the project area. High temperatures encourage septicsewage conditions, requiring more expensive design standards for sewers and

5/ 1978 Census, Preliminary Report, Ministry of Finance and Planning.Equivalent data on past growth of the Dar es Salaam Region are notavailable.

6/ Urban Development Master Plan of the City of Dar es Salaam,Marshall Macklin Monaghan Limited (MMM), 1979.

7/ Resident populations at military, police, university and hospitalcompounds.

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better than average operation and maintenance of the systems to achieveadequate treatment and to reduce the hazards and corrosive effects ofseptic conditions. Most areas are suitable for pit latrines and septictank systems. In some areas, however, low soil permeability, highgroundwater or occasional flooding require special designs and operatingand maintenance procedures for on-plot sanitation - such as larger septictanks and leaching fields, mounded pit latrines and good emptying services- and which increase cost.

2.08 Health information for Dar es Salaam is limited but adequate todemonstrate that major causes of mortality and morbidity - as they arethroughout Tanzania - are diseases associated with poor sanitation, poornutrition and lack of health knowledge. In Dar es Salaam reported cases ofmalaria, schistomiasis, diarrhea and hookworm, to name a few, aredangerously high for a city of about one million people. (See paragraphs 1and 2 of Annex 1).

Regional Development Prospects

2.09 As the main industrial and commercial center of Tanzania, much ofthe future growth of economic activity in Tanzania should be reflected inDar es Salaam's development. Therefore, the city is likely to continueattracting people in search of work.

2.10 The population studies prepared for the urban development masterplan (paragraph 2.03) projected Dar es Salaam's 1999 population at from2.0 million to 4.4 million with the most reasonable forecast for that yearconsidered to be about 2.4 million. This takes into account the potentialeffects of moving the capital to Dodoma and is based on the assumption thatthe Government's decentralization policy will prevent net in-migration fromexceeding about 50,000 annually, the average level of the 1969-1978 decade.

Sector Agencies

2.11 Water supply in the Dar es Salaam Region is presently theresponsibility of DCS, a parastatal organization (paragraph 1.06).However, NUWA, also a parastatal, is being established and will graduallyassume responsibility for urban water supply systems, including Dar esSalaam, as soon as it becomes operational (paragraphs 1.06 and 1.07).

2.12 The principal responsibility for sewerage and sanitation in Dares Salaam is with DCC, although ARDHI has an important role in policymaking and in project planning and implementation (paragraph 1.10). Theformal relationship between the two agencies is not clearly defined but hasbeen established adequately for the planning and implementation of theproposed sewerage and sanitation project. (See paragraphs 3.25-3.31).

2.13 The only substantial relationship between the water supply andthe sewerage and sanitation agencies in Dar es Salaam at present is thatbills for sewer service are based on water consumption figures which DCCobtains from DCS (paragraph 4.02).

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Existing Water Supply System

2.14 The urban area of Dar es Salaam is served by a piped systemsupplying treated water from three major river sources (Annex 1). Waterfrom these sources is pumped to distribution reservoirs beforereticulation.

2.15 Water production from these sources at present averages between120,000 to 180,000 m3/d according to various estimates; accurate figures donot exist because flow meters do not function at any of the treatmentplants. According to MWE officials, the existing water sources areadequate for Dar es Salaam until 1987 or 1988 without additional riverregulation. After then, lack of river regulation could cause watershortages during two or three months of the year.

2.16 Groundwater is of limited availability and is not extensivelyused for community or agricultural purposes in the Dar es Salaam Region.However, in some areas industries and institutions use private tubewells tosupplement water supplies from the public system. Domestic water suppliesin rural areas in the region often are taken from shallow wells or localsurface water sources.

2.17 The existing public water supply system does not providesatisfactory service, in spite of the fact that the installed capacity oftreatment and transmission facilities appears ample (Annex 1).Unaccounted-for water, due to leaks in the transmission and distributionsystems and to unrecorded water use, may be 50% of water production. Thereare frequent service interruptions, and in some areas water seldom issupplied on a continuous basis. On a number of recent occasions,substantially untreated water has been distributed because of shortages ofchemicals. The underlying causes of unsatisfactory service are the lack ofa proper organization and adequate staff for operation and maintenance,poor inventory management, undersized distribution mains (especially in thecity center) and faulty interconnections between pressure zones. Meteringof water production (paragraph 2.15) and of water use is totallyinadequate. Only 25% of service connections have functioning meters.

Existing Sewerage and Sanitation Systems

2.18 The sanitation requirements of about 90% of Dar es Salaam'spopulation are met with on-plot facilities, namely pit latrines and septictank systems. The existing system (Annex 1), serving the balance of thepopulation, is of the separate type; i.e. designed for sanitary sewageonly. The city center system (IBRD Map 16132), dating back to 1948,discharges through an ocean outfall just north of the harbor entrance.Sewage either gravitates or is pumped to the outfall. In addition, nineisolated systems have been installed for residential, instltutional andindustrial developments in outlying areas. In each one, treatment is bywaste stabilization ponds with the effluent discharging to localwatercourses.

2.19 The condition of the existing sewerage system is exceptionallybad (Annex 1). The ocean outfall is broken near the shore. Only one ofthe waste stabilization ponds is operating with some degree of

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effectiveness. Of the 17 existing pumping stations, only one can beoperated. A number of the major sewers are blocked completely. Septicconditions, causing serious corrosion of sewers and dangerousconcentrations of gases, can be observed at a number of locations.

2.20 The existing conditions cause surcharge of sewers and overflowsto storm drains, streams, the harbor and beaches. The result is seriouspollution and a major risk to health. Until sewers are cleared, fewmeaningful examinations can be made to determine flow rates, capacities,structural conditions and the extent of rehabilitation required.Similarly, little can be done to measure flows and characteristics of thesewage.

2.21 The basic cause of the existing sewerage situation is pooroperation and an almost complete lack of maintenance, particularly since1974 when the City Council was abolished (paragraphs 1.03 and 1.13). Evensince the Council was reestablished in 1978, practically nothing has beendone to improve the situation, except planning. Deficiencies in theoriginal designs of some existing facilities also may be a contributingfactor.

2.22 As noted above (paragraph 2.20), it is not possible to measureexisting sewage flows. However, the probable average daily flow from theproperties believed to be served in 1979 is estimated to total about 22,000m3/day with peak flows of about 56,000 m3/day. Engineering studies alsoindicate that most, if not all, of the elements of the existing seweragesystems have excess capacity for the population that could be served by theexisting system, provided that these elements are in reasonably goodcondition.

2.23 Industrial and trade wastes in Dar es Salaam are substantiallyuncontrolled and untreated. Of about 700 industries in the area, about 30should be considered serious sources of pollution. The Msimbazi River,north of the city center, is highly polluted with industrial wastewater.Existing legislation covering the discharge of pollutants to watercoursesis not enforced at present. New effluent standards drafted by the TanzaniaEffluent Standards Committee are under consideration. There also are waterpollution problems caused by unsanitary disposal of municipal solid wastesand by periodic surface water flooding in some areas.

Population Served and Standards of Service

2.24 Water Supply. Substantially all of the population of the urbansections of the Dar es Salaam region obtain their water in one way oranother from the public water system. In some cases this may besupplemented from other sources (paragraph 2.16).

2.25 In 1980 there were about 35,000 registered individual waterservice connections - either to plots with external taps only or tobuildings with full internal plumbing including flush toilets - and about550 public standpipes. The actual number of direct water serviceconnections may be much higher since illegal connections are a majorproblem. An estimated 40,000 people (1979) live in residential areas

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served entirely by public standpipes. DCS has a plan to phase out publicstandposts by 1984, but this appears impractical because of costs andlimited demand for a change in the type of service (Annex 1, paragraph 8).

2.26 Water demand figures developed for use on the sewerage studies(paragraph 3.02) are 24 to 30 lcd for population using pubLic standpipes,up to 60 lcd for plots with individual connections but without flushtoilets, and 120 lcd to 240 lcd for middle and high income housing withfull plumbing. Actual service provided often may be less than this becauseit is not reliable either as to continuity or the quality of the water(paragraph 2.17).

2.27 Sewerage and Sanitation. Sewerage studies (paragraph 3.02)showed that of the total population of the Dar es Salaam Region in 1979(932,000) about 12% had sewer service, 10% had septic tanks and 76% had pitlatrines of some type. Altogether there were about 8,400 septic tanks and60,000 latrines. Of the approximately 109,000 people served by sewerage,about 30% resided in institutions (army, police, university andhospitals). Within the urban area the population without access tosanitary facilities is estimated to be 2%, and in the rural area, 5%.

2.28 There are about 5,800 connections to the Dar es Salaam seweragesystems, according to DCC. However, DCC's records are poor and it isbelieved that numerous unregistered connections exist. The rate of makingnew registered connections has been low because of the inefficiency of thesewerage agency, the cost of the connections and reluctance to connectbecause of the malfunction of the systems.

2.29 The quality of the sewer service is poor (paragraphs 2.19 and2.20 and Annex 1). Low-cost sanitation facilities are described in detailin Annex 1. The standards of construction and maintenance of most pitlatrines inspected during the sewerage studies was good. Most of the pitswere lined and had impervious concrete slabs which were kept clean.However, the design of these structures is usually not satisfactory interms of controlling odors and breeding of mosquitoes and flies.

2.30 Emptying of the latrine pits and disposal of the contents ispoorly done by the municipal authorities. There is a considerable delayof several months in providing the emptying service after it is requested.Then the emptying usually is done incorrectly because only the liquids areremoved; there are both labor and equipment-deficiencies in this respect.The pit emptying vehicles (vacuum tankers) often discharge their loads atnumerous illegal sites within the city boundary because there are no properdumping stations in operation, causing serious pollution problems.

2.31 The sewerage studies disclosed that the commonly used design forseptic tanks in Dar es Salaam is faulty in a number of respects whichreduce the effectiveness and often increase the costs of construction andmaintenance. The emptying of septic tanks is carried out by the same laborand vehicles which deal with pit latrine emptying and the inefficiency ofthe emptying service applies to septic tanks as well. Consequently in somehigh income areas there is a demand for connection to the sewerage system.This demand would propably disappear if emptying service :Eor septic tankswere substantially better.

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Water Supply and Sanitation Services for the Urban Poor

2.32 The absolute poverty income level for urban population inTanzania is TSh 1220 (US$147) per capita per year or TSh 102 per capita permonth. There is no specific data for Dar es Salaam but it is estimatedthat nationwide 10% of the urban population have incomes below this level.In Dar es Salaam, most urban poor are located to the south and west of thecity center in unplanned (squatter) areas (Map IBRD 16132).

2.33 There is little factual information on the standards of watersupply and sanitation services available to the poor. However, it is safeto assume that substantially all the population who depend on publicstandpipes (paragraph 2.25) for water supply are poor, plus a large numberof the people who have on-plot water service connections with only externaltaps. Since most water billing is not based on metered water use, manyurban poor obtain their water from neighbors who have service connections.The urban poor are among the large proportion of the total population whouse pit latrines. The results of a sample survey of sanitation inlow-income areas of the city are given in paragraphs 14-21 of Annex 1.

2.34 The city wards tentatively selected for the low-cost sanitationcomponent of the project (paragraph 2.04) are representative of the urbanpoverty areas in the city. With a total population of about 200,000, thesewards include several small industries, one dispensary and 18 primaryschools. A mix of planned and unplanned settlements, the wards have amongthe poorest sanitary facilities in the city. Most residents draw waterfrom public standpipes, or buy from vendors, and use pit latrines. Many ofthe latrines are in an unsanitary condition, probably because most of thepits have never been emptied and they are overused. A recent trial byARDHI to introduce into the area improved latrines on demonstration basiswas well received by local householders, teachers and party leaders.

Population Projections and Demand for Sewerage and Sanitation Services

2.35 The sewerage and sanitation studies for this project (paragraph3.02) resulted in recommendations for long-term phased development ofsewerage and sanitation based on projected needs and conclusions as to thesuitability and economics of meeting those needs. The recommendedrequirements for sewerage and on-plot sanitation are as follows:

TotalNo. of Units

Total Population Percentage Served (thousands)of Region Septic Pit Septic Pit

Year (thousands) Sewers Tanks Latrines Tanks Latrines

1979 932 12 10 78 8.4 59.01984 1,269 19 12 69 12.3 76.71989 1,642 25 10 65 14.0 93.01999 2,461 36 9 55 18.3 116.0

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2.36 According to the above, about 57,000 new pit latrines and about10,000 new septic tank installations would be required by the end of thecentury. In addition, many existing on-plot units should be upgraded toacceptable standards. Since it is unlikely that new sewerage constructionwould proceed according to the above schedule, the demand for new pitlatrines and septic tanks until 1999 could be 50% higher t'han predicted.Pilot demonstrations of improved pit latrine designs during projectpreparation have indicated adequate interest in these units.

III. THE PROJECT

Genesis

3.01 Faced with outbreaks of cholera and the prevalence of otherdiseases related to sanitation in Dar es Salaam, the Government, early in1978, requested IDA assistance with the preparation of a project to improveand extend the city's sewerage system (paragraphs 2.19 and 2.20 andAnnex 1). Investigations by IDA staff revealed that existing seweragedevelopment plans were inadequate. This led to assistance by IDA throughthe Project Preparation Facility (CR. P074-TA) in July 1979 and May 1980totaling US$1.0 million for the preparation of a master plan, feasibilitystudies and preliminary designs for sewerage and sanitation in Dar esSalaam and other technical assistance.

3.02 A consulting firm8 / was engaged by ARDHI in June 1979 to carryout the studies. The Sewerage and Sanitation Master Plan to meet the needsof the metropolitan area until about 2010 was completed in. December1979.9/ The feasibility studies and preliminary designs f'or Stage I ofthe least-cost development program, covering the period through about 1986,were substantially completed in December 1980. The studies included theinstitutional and cost recovery aspects of sewerage and sanitation andrecommendations for changes required to achieve efficiently operated andmaintained and financially viable services.

3.03 Originally the Government intended to concentrate upon sewerage -the conventional water-borne waste disposal system - which now, and formany years to come, would serve a small proportion of the city's population(paragraph 2.18 and Annex 1). However, late in 1978, Tan2zania was chosenfor priority attention in a UNDP financed demonstration project(GLO/78/006), for which the Bank is the executing agency. The UNDP projectassists governments in developing water supply and sanitation projectswhich are responsive to the needs of low-income urban and rural areas andwhich the beneficiaries can afford. On the advice of the UNDP projectteam, the Technology Advisory Group (TAG), the sewerage studies wereexpanded to include low-cost sanitation, which now is a major element in

8/ Howard Humphreys & Partners (UK) in association with E'eat, Marwick,Mitchell and Company (UK).

9/ The Sewerage and Sanitation Master Plan is based on an UrbanDevelopment Master Plan prepared by Marshall Macklin Monaghan Limited(Canada) in 1979 and financed by SIDA.

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the proposed sewerage and sanitation project. TAG members have continuedto advise the Government and IDA on the preparation of the project and areexpected to continue assistance during the implementation stage.

3.04 Preparation of the project has involved several missions by IDAstaff (July 1978, April 1979, January and November 1980 and March 1981).The appraisal mission was in June/July 1981 and a brief post-appraisalmission, in March 1982. TAG members visited Tanzania several times inconnection with low-cost sanitation studies in Dar es Salaam and a numberof other towns and also assisted ARDHI, DCC and IDA at the time ofappraisal.

3.05 Financing of a Low-Cost Sanitation Engineer (LCSE) Advisor postin ARDHI and some equipment and demonstration work on low-cost sanitation(110 improved pit latrines) - all important in project preparation - wasprovided from IDA Credit 732-TA for the Second National Sites and ServicesProject. IDA also assisted in arranging a UNDP grant to continue financingthe LCSE post for two years beginning in August 1981. A manager forproject implementation has been engaged by ARDHI with financing from IDA'sPPF (paragraph 3.01).

3.06 IDA involvement in the water supply, sewerage and sanitationsector stems from interest in assisting with the improvement ofinstitutions, infrastructure and the supply of basic needs. This sectorinvolvement has continued for a number of years, both directly, throughlending for water supply, and indirectly, through lending for urban andrural development projects (paragraphs 1.18 and 1.19). Immediate goals ofthese activities are strengthening of sector institutions, rehabilitationof past investments in infrastructure, improved maintenance and utilizationof existing capacity, improvement of the efficiency, quality and extent ofessential sector services and reduction of the financial burden of theseservices on Government through acceptable cost recovery systems. Thesewerage and sanitation master plan and proposed Stage 1 project areconsistent with these goals and with statements of policy by theGovernment.

Objectives

3.07 The project would be a modest first stage in a long range programto develop basic sanitation in Dar es Salaam to meet acceptable standardsof public health and adequate levels of efficiency. In addition torehabilitation of the defunct existing sewerage system, the project wouldfocus particularly on low-cost on-plot sanitation of types which will servethe majority of the population for many years and on the development of theservices, institutions, management and financial practices required forsewerage and sanitation facilities to be properly planned, constructed,operated, and maintained in future.

3.08 More specifically, the project would substantially improve thepit emptying service for about 70,000 existing low-cost sanitation units.The project would promote public acceptance and adoption of betterstandards of low-cost sanitation and hygienic practices and provideimproved latrines for about 40,000 people. Sewer service to about 6,000

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properties would be restored and this service would be provided to about600 additional properties (paragraph 4.07) which have access but are notconnected to the existing sewerage system.

3.09 Managers would be engaged to initiate proper operation andmaintenance of the sewerage and sanitation services, to installsatisfactory financial management and cost recovery systems and to traincounterparts to take over. About 12 professional staff, 10 accountants and40 technicians would be trained.

Technological Alternatives

3.10 During project planning, alternative waste disposal systems wereevaluated, particularly conventional water-borne systems (sewerage) versuslow-cost on-plot sanitation. Then a decision was made by AIWHI, inconsultation with IDA that, for cost reasons, sewerage would be a lastalternative in Dar es Salaam, restricted to areas where populationdensities or physical conditions prohibit use of on-plot facilities. Theon-plot alternatives provide the same health benefits and a:Lmost the sameconvenience as sewerage at a fraction of the construction and operatingproblems and costs, provided, however, that the institution and facilitiesrequired to service the on-plot installations (mainly pit emptying andsludge disposal) are adequate and that the people are educai:ed in basicpersonal hygiene.

3.11 Acceptance by the local authorities of the reality that seweragewill not be widely available in the foreseeable future has an importantadditional benefit. Potential future increases in water demand and theneed for future expansion of water production, transmission and storagefacilities will be reduced substantially.

3.12 In areas where sewerage will be used in Dar es Salaam, includingthose presently sewered, alternative means of sewage treatment and disposalwere evaluated. The conclusion is that from cost, public health andenvironmental standpoints the best solution is to continue with the presentsea outfall for the central sewerage system and with the use of wastestabilization ponds discharging to local streams for the other systems.Consequently the existing outfall and stabilization ponds will berehabilitated. However, it has been agreed that once the existing systemsare back in operation, the quality of the receiving waters will bemonitored as the bases for changing operating procedures and for futuredesign. By that time DSSD staff should be capable of performing therequired monitoring.

3.13 The on-plot sanitation units to be installed or improved, and thesupporting services, would be technologically appropriate with dueconsideration for financial and socio-cultural constraints. Planning anddesign has had the advantage of considerable recent research worldwide,including by the UNDP demonstration project (paragraph 3.03),investigations of local conditions (soil, water and climate), localpractices (building and toilet) and acceptability. More than 100demonstration units have been constructed (paragraph 3.05), surveys havebeen made, experiments with health education have been carried out and

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workshops have been held involving government officials representinghealth, education, municipal and urban development interests. In spite ofthis advance work, however, changes in design of the sanitation units areexpected to occur as the result of experience gained during implementationof the project, particularly changes which would reduce costs.

Description of Project Components

3.14 Project objectives are given in paragraphs 3.07 - 3.09 and theproject is detailed in Annex 2. The principal components are as follows:

(a) rehabilitation and improvement of existing sewerage facilities(Annex 2, paragraph 1A);

(b) construction of pit latrines and replacement or conversion ofinadequate existing on-plot sanitation units (Annex 2, paragraphslB and 6-10);

(c) improvement of DCC's pit emptying service (Annex 2, paragraphs1B and 11);

(d) establishment and development of a Sewerage and SanitationDepartment (DSSD) in DCC (paragraphs 5.03 and 5.04);

(e) provision of offices, workshops, equipment and spare partsrequired for the management, operation and maintenance ofsewerage facilities and sanitation services;

(f) technical assistance to ARDHI and to DCC with development ofDSSD, with health education and extension services and foradditional studies of sanitation related problems including solidwastes management;

(g) training for professional and technical staff(paragraphs 3.09 and 5.07-5.09);

(h) provision of consulting engineering services for detailed designand supervision of construction of this project and for detaileddesign of a Stage II project;

(i) technical assistance to help NUWA become operational(paragraphs 1.07 and 5.10);

(j) technical assistance to TANESCO (paragraph 5.08); and

(k) aerial survey and photogrammetric mapping of Dar es Salaam(paragraph 5.14).

3.15 There is no provision in the project for construction ofextensions to the existing sewerage systems. However, it is expected thatsome new sewerage facilities will be required in Stage II and the projectincludes consulting services for detailed design of these facilities.Also, the project does provide for new sewer service connections toexisting sewers (paragraph 3.08).

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3.16 Sewerage rehabilitation is a major component of the project.However, the nature of much of the work is such (Annex 2) that detailedrequirements will be revealed gradually as the work progresses. Therefore,the extent and cost of the rehabilitation as a whole is uncertain andestimates are less reliable than normally considered acceptable when acredit is made. Consequently, a physical contingency allowance of 20% hasbeen made for the most uncertain parts of the work. In this respect itshould be noted that the most critical components (repair of the seaoutfall, replacement of pumping and electrical equipment and reconstructionof stabilization ponds), which form about 65% of the rehabiLitation work,are self evident and have been studied in sufficient detail to permitdevelopment of reasonably reliable implementation timetables and costestimates. The principal uncertainty is the amount of repairs andreplacements required for submerged sewers, manholes and pumping mains (35%of the rehabilitation or about 10% of the base cost of the total project).To avoid cost overruns in the event that this part of the work proves to besubstantially more costly than estimated, some repairs would be made on atemporary basis and the permanent work deferred to Stage II.

Cost Estimates

3.17 The total project cost is estimated at about TSh 273.5 million(US$ 29.1 million) including foreign exchange costs equivalent to aboutTSh 124.5 (US$13.2) million. The estimates are summarized below and shownin detail in Annex 3 along with an estimated program of annualexpenditures.

PRQJECI ODST SUEtAY

TSH Million US$ Million% Foreign % of Tctal

Local Foreign Total local Foreign Total Exchange Base Costs

A. Sewerage 68.7 61.2 129.9 7.3 6.5 13.I 47.1 62.5B. Sanitation 35.5 29.7 65.2 3.8 3.2 7.C 45.5 30.6

C. Otber TechnicalAssistance

TANES(OC 1.3 2.3 3.6 0.1 0.2 0.4 64.7 1.7NLMA 5.2 9.1 14.3 0.5 1.0 1.' 63.9 6.7

Sub-Total Other TechnicalAssistance 6.4 11.4 17.9 0.7 1.2 1.9 64.0 8.4

Total Baseline Costs 110.6 102.4 213.0 11.8 10.9 22.7 48.1 100.0Physical Contingencies 9.0 8.6 17.6 1.0 0.9 1.9 48.8 8.3Price Cortingencies 29.4 13.6 43.0 3.1 1.4 4.5 31.6 20.2

TOTAL PRaJECT coSrs 149.0 124.5 273.5 15.9 13.2 29.1 45.5 128.4

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3.18 The bases for the cost estimates are described in Annex 3. Thebase costs are at July 1982 prices. Unit prices are from the costs ofrecent works, quotations from suppliers and review of market prices by HHPand ARDHI. The costs of low-cost sanitation components are based ondetailed quantity take-offs and equipment lists and a pilot constructionprogram for pit latrines. As noted in paragraph 3.16, however, there is adegree of uncertainty about part of the sewerage rehabilitation componentof the project (representing about 10% of the total base costs) because ofthe nature of the work. This is not considered to be a serious problem.

3.19 Local costs include local duties and taxes on direct imports andconsulting services which are estimated at about TSh 31.5 (US$3.4) million(12% of total project costs).

3.20 Base costs include allowances for spares for rehabilitation andmaintenance equipment of 15% and for vehicles, 10%. Allowances forphysical contingencies have been added to base costs at Various rates: 5%for vehicles and technical assistance; 10% for equipment, land, newconstruction, about half of the rehabilitation work, training andengineering; and 20% for the balance of the sewerage rehabilitation. Nophysical contingency allowances have been included for service connections,low-cost sanitation units and miscellaneous vehicles since these areclassed as program items. The total allowance for physical contingencies,is about 8.6% of all base costs except refunding of the project preparationadvance.

3.21 Price contingencies have been applied to the July 1982 basecosts, plus physical contingencies, assuming price increases as follows:

Fiscal Year ending June 30 1983 1984 1985 1986Local 15.0% 16.0% 13.0% 12.0%Foreign 8.0% 8.0% 7.5% 7.0%

The total allowance for price contingencies amounts to about 21.1% of thetotal of base costs except refunding of the project preparation advance.

3.22 The base costs for consulting engineering services and expatriateadvisors is about TSh 61.3 million. Of this, TSh 49.3 million is directlyrelated to sewerage and sanitation; the balance is for technical assistanceto NUWA and TANESCO. The costs of the consulting engineering contract forsewerage rehabilitation (paragraph 3.30) is for 83 man months of expatriatestaff and 119 man months of local support staff. The average base costs ofthe expatriate staff under that contract is equivalent to about US$7,350per man month. The average total cost of 12 expatriate advisors to DSSDand ARDHI for sewerage and sanitation (368 man months), under two or threeyear contracts, is estimated at US$7,000 per man month equivalent.

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3.23 The estimates are based on the assumption that most constructionwork, including rehabilitation, will be carried out by locally basedcontractors. The estimated foreign exchange cost of the physicalcomponents are for imported materials, equipment and some specializedtechnicians that would be required. It is assumed that all vehicles,mechanical and electrical equipment and most pipe would be imported.

Project Financing

3.24 The proposed IDA Credit (US$22.5 million), would finance about87% of the total cost of the sewerage and sanitation component of theproject excluding taxes, or 76% of costs including taxes. US$2.0 millionwould be utilized for financing 85% of the technical assistance for NUWA

(paragraph 3.32)and TANESCO. The balance of the project funds required(about TSh 62.0 (US$6.6) million, including about TSh 31.5 (US$3.4) millionto cover taxes) would come from internal cash generation and Governmentcontributions. The proposed IDA financing of the sewerage and sanitationcomponent is equivalent to 100% of the foreign exchange cost and about 74%of the local cost component, before taxes.

Implementation

3.25 The project would be carried out jointly by ARDHI and DCC, withAARDHI having prime responsibility. Policy matters would be dealt with by aProject Management Committee which has been established. The Committee ischaired by ARDHI's Director of Sewerage and Drainage and includesdesignated key staff from DCC. In addition, a Project Implementation Unit(PIU), headed by a Project Manager, has been established in the Sewerageand Drainage Division of ARDHI with responsibility for procurement,administration of contracts with contractors and consulting engineers,project accounts and other project matters. The Project Manager is beingfinanced from the PPF. Eventually his contract would be financed from theproposed credit. The PIU includes an ARDHI low-cost sanitation engineer, aproject accountant and support staff. In addition, ARDHI would engage asocial scientist to assist with the Project and with sanitation activitiesin other parts of Tanzania. It has been agreed that the ManagementCommittee and the PIU will be maintained until completion cf the projectand that the posts of Project Manager, low-cost sanitation engineer andproject accountant will be filled with qualified and experienced personnelat all times.

3.26 The Chairman of the Project Management Committee and the ProjectManager have played major roles on behalf of the Government in thepreparation of the project since the middle of 1978. They are consideredcompetent to continue their roles through the implementation phaseprovided, however, that the PIU is properly staffed.

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3.27 DCC has played a minor part in project preparation due toinstitutional problems, including severe staff constraints (Chapter V),although DCC staff did take some part in preparation of the ProjectProposal dated April 1981. DCC activity during project implementationwould be devoted to: development of the new DSSD (paragraph 5.10) for whichtechnical assistance would be included in the proposed project; an advisoryrole, mainly through the Project Management Committee; decisions about thelocation of new low-cost sanitation units; and health education of thepublic and promotion of the low-cost sanitation program. Contract stafffor DSSD would be engaged by ARDHI and assigned to DCC.

3.28 ARDHI will enter into contracts for all major project supplies,equipment and construction. There will be about six contracts for seweragerehabilitation. Low-cost sanitation units also will be constructed undercontract with ARDHI in groups of 100 to 500 units. However, ARDHI intendsto transfer responsibility for the construction contracts for low-costsanitation units to DCC as soon as DSSD is competent to handle these.

3.29 Detailed design and the preparation of tender documents forconstruction of low-cost sanitation units would be completed by ARDHI,based on preliminary designs and recommendations by TAG (paragraph 3.03)and a pilot construction program completed in 1982 (paragraph 3.18).

3.30 Sewerage rehabilitation would be designed and constructionsupervised by consulting engineers. A contract between ARDHI and HowardHumphreys (Tanzania) Limited was signed on December 7, 1981 and workcommenced early in January 1982. The consultants and the terms andconditions of the contract are acceptable to IDA.

3.31 New office buildings for DSSD and its Mechanical and ElectricalDivision, plus improvements to three existing depots, would be designedand supervised by locally based consulting firms, yet to be selected, undercontract to ARDHI. It has been agreed that firms acceptable to IDA wouldbe engaged under terms and conditions acceptable to IDA. Until the officebuildings are ready, DCC would provide temporary space for DSSD.

3.32 MWE would appoint a firm of management consultants to assist NUWAto become operational (Annex 2, paragraph 23). The decision is expectedshortly. The terms and conditions of the contract would be submitted toIDA for approval. It is expected that the initial stages of the consultingassignment would be financed from an existing IDA advance from PPF(CR. PO 93) for preparation of a Second Urban Water Supply Project,but that the balance of the assignment and other technical assistancerequired for NUWA would be financed from the proposed credit for theSewerage and Sanitation Project. The consultant may also assist inadapting the TANESCO management information system to NUWA and DSSD needs.

3.33 Establishment of DSSD in the proposed form (Chapter V) wasapproved by the City Council, the Office of the Prime Minister and theTreasury in May 1982.

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3.34 Land use rights would be acquired for the new DSSD buildings,dumping points for pit emptying vehicles and possibly for expansion of thethree sewerage depots. It has been agreed that any required land andrights in respect of land shall be acquired as and when needed, or by June30, 1983 whichever is earlier.

3.35 The implementation schedule for the project is given in Annex4 and is realistic. Detailed design and preparation of tender documentsfor sewerage rehabilitation began in January 1982. The first contractawards are expected about April 1983. Design and procurement for aninitial trial contract for 100 low-cost sanitation has begun with thecontract award scheduled for April 1983. The sewerage rehabilitationshould be completed by February 1985 and all other construction, by October1985. Training will continue unitl June 1987.

Resources Aspects

3.36 Rehabilitation of the existing sewerage systems is intended toimprove significantly the quality of local streams and of the sea in theimmediate vicinity of Dar es Salaam. The quality of the effluent from therestored stabilization ponds (paragraph 3.12) should be satisfactory forsome types of irrigation. However, the quantities of effluent would besmall, by irrigation standards, and investigations during the preparationof the Sewerage and Sanitation Master Plan (paragraph 3.02) did not produceany evidence of a-market for effluent near the points of discharge.

Procurement

3.37 Works: The contracts for rehabilitation of sewerage structuresand for the construction of DSSD's headquarters building, have an estimatedtotal cost of about TSh 78 (US$8.3) million including contingencies, andwould be procured by international competitive bidding (ICB) in accordancewith IDA guidelines. Eligible domestic bidders would be afforded apreference of 7J% under ICB procurement. The balance of construction forthe project, totaling about TSh 37 (US$4.0) million includingcontingencies, consists of minor works and buildings of estimated contractsize less than US$1.0 million scattered throughout the city and not likelyto interest foreign bidders. These works would be procured through localcompetitive bidding procedures, which were found at appraisal to besatisfactory to IDA, and in which foreign bidders would have theOpportunity to participate.

3.38 Goods: Equipment and vehicles, totaling about TSh 45 (US$4.8)million including contingencies, would be grouped in appropriate biddingpackages and procured by ICB in accordance with IDA guidelines. Qualifyingdomestic manufacturers would receive a preference in bid evaluation of 15%or the import duty, whichever is lower. Miscellaneous items of equipmentand furniture, in packages less than US$50,000 and totaling US$0.5 millionapproximately, would be procured under local competitive bidding procedureswhich were found at appraisal to be satisfactory to IDA.

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3.39 Contract Review: All bidding packages for works estimated tocost over US$0.7 million equivalent and bidding packages for goodscontracts over US$150,000 equivalent would be subject to IDA's priorreview of procurement documentation resulting in a coverage of about 80% ofthe total estimated value of works contracts, and about 90% of goodscontracts. In addition, the initial bidding packages of any type,regardless of size, would be subject to prior review by IDA . The balanceof the contracts would be subject to selected ex-post review by IDA aftercontract award.

Disbursements

3.40 The proposed allocation of proceeds of the proposed credit isgiven in Annex 5. In general, 100% of all foreign exchange expenditureswould be financed from the credit. Local currency costs would be financedto the extent of 80% for consulting engineering and other technicalassistance and civil works, and 50% for equipment, furnishings andvehicles. Local currency financing by IDA would exclude financing of localimport duties and taxes.

3.41 Forecasts of annual project expenditures are shown in Annex 3.Actual payments and credit disbursements may occur much later as indicatedby the estimated schedule of disbursements shown in Annex 6. The scheduleof disbursements is based on the country-wide disbursement profile forTanzania; the region-wide disbursement profile for the sector is consideredto have an insufficient sample size. The profile was adjusted to eliminatetime required after 95% disbursement and to account for an implementationperiod 18 months less than average. The proposed closing date would beDecember 31, 1987.

3.42 The PPF advance for preparation of the project would berefinanced from the proposed credit. Retroactive financing of up to US$0.5million for the early stages of the consulting engineering contract forsewerage rehabilitation (paragraph 3.30) and for mapping Dar es Salaam isrecommended. This would cover the estimated costs of those contractsthrough about March 1983.

IV. FINANCIAL ANALYSIS

Past Performance

4.01 Records of operating costs for both the piped sewerage and pitlatrine emptying services are very poor owing to inadequately designed andunevenly kept records, particularly during the period 1974-1978 (paragraph1.13). Therefore, the recurrent costs of these services cannot beascertained. Asset values also are not available as records weredisrupted during the 1974-78 period. Efforts are being made by the CityTreasurer and his staff to update and reconstruct these records butsuccess is unlikely since the task is enormous and qualified staff arescarce.

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4.02 Monthly billing for sewerage services is currently based on the5,800 connections that were known at end-1973. Connections are known tohave been made since then but have not been recorded. During 1980 TSh614,000 (US$65,000) were billed in total and TSh 271,000 (IJS$29,000) werecollected, but portions of both the sums billed and collected may have beenfor previous years as DCC is billing arrears from 1974. Billing is basedon water consumption estimates, obtained from DCS (paragraph 2.13), of3,333 gallons monthly per connection at TSh 3.65 (UScts.39)/1000 Ig. Onthis basis the annual billing should be a minimum of TSh 850,000(US$90,000). However, there is no control over the billing, either toensure that all known connections are billed or to pursue collection of thebills rendered.

4.03 Charges for pit latrine and septic tank emptying servicescurrently average about TSh 20 (US$2.13) (paragraph 4.10). An additionalcharge of TSh 240 (US$25.53) per pit is made if sludge has to be removedmanually; and for certain institutions TShs 75 (US$8.00) per load ischarged. Private customers are required to pay estimated charges in cashbefore service is rendered but Local Purchase Orders (LPO's) are acceptedfrom Government agencies. Apart from despatching the bills and recordingeach bill, no monitoring or control systems exist. Outstanding accounts forGovernment departments which obtain service on credit (LPO's) are notpursued.

Future Financial Performance

4.04 The appraisal mission has made financial forecasts for DSSD forthe financial years 1983-87, separated into Low-Cost Sanitation (Annex 7)and Sewerage Operations (Annex 8). These two forecasts have then beenconsolidated (Annex 9) to show the potential future financial position ofDSSD as a whole. The assumptions used in the forecasts are given in Annex10.

4.05 Charges/Revenues for Sewerage Operations. Revenue estimationfrom billing data is inaccurate because some institutions and majorindustries are not currently billed. For FY84, the maximum revenue thatcan be hoped for is estimated at about TSh 4.0 million or about 11% of therevenue target for FY85.

4.06 The sewerage system is scheduled to resume operation during FY85when it is anticipated that the new financial management and accountingunit of DSSD will bring a new accounting system into operation. In FY85and subsequent years revenues are therefore based on internal cashgeneration of 20% of capital investment expenditures (paragraph 4.09).Construction expenditures for Phase II and subsequent phases of the Dar esSalaam sewerage development are not yet known, therefore the notionalconstruction expenditures (Annex 8) shown for FY86 and FY87 are about thelevels that could be sustained on the basis of a 20% capital contribution,using the FY85 charge per connection to calculate revenues from seweragecharges for each of these years.

4.07 The estimated average monthly charge per sewer service connectionon the above basis for FY85 is TSh 455 (US$48), or TSh 338 (US$36) at 1982price levels. However, charges are on a base of 5,800 corLnections

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(paragraph 4.02) assumed to increase at about 300 per annum beginning inFY84. The actual number of existing connections may be much higher -estimates of 10,000 and 24,000 have been made - and the average servicecharge could prove to be 50% or more below the above estimate. Theexisting number of connections and the potential rate of increase will notbe known until a house-to-house survey (paragraph 5.13) is carried out.

4.08 Although sewerage charges made currently are based on waterconsumption (paragraph 4.02), only about 25% of water consumers haveoperatinig meters and most water consumption is estimated for both domesticand industrial consumers. Furthermore, some industries and majorinstitutions are not even billed for services. Therefore the presentbasis for sewer service charges is not satisfactory. During negotiationsagreement was reached that a study to determine the appropriate structureand levels of sewer service charges would be carried out andrecommendations resulting from the studies, as agreed by Government andIDA, would be implemented during 1985.

4.09 The proposed proportion of 20% investment expenditures to begenerated from sewerage revenues is justified because sewerage is highlycapital intensive. Revaluation of the existing sewerage system yields agross value of TSh 216 (US$23) million, or TSh 34,000 (US$3,600) perproperty served (for 10,000 properties) including TSh 12,000 (US$1,300) forthe service connection, all at 1982 prices. By comparison, the cost of apit latrine at 1982 prices is estimated at TSh 3,800 (US$404) (para.4.04). The capital intensity of sewerage used to benefit institutions,commercial areas and a relatively small proportion of the populationjustifies the operations contributing to future expansion,especially inview of limited Government budget capacity to provide local costs.Agreement was reached during negotiations that beginning with FY85, DCCwould fix the charges for sewerage services for each year at levels thatwould produce funds from internal sources equivalent to a minimum of 20% ofthe average sewerage capital expenditures for that year, the previous yearand the next following year on the understanding that the percentage wouldbe reviewed following the survey of connections (para. 5.13) and thesewerage charges study (para. 4.08)

4.10 Charges/Revenues for Low-Cost Sanitation. Currently the averagecharge for pit emptying is Tsh 20 (US$2.13) per load (trip of a vacuumtanker from the pit latrine or septic tank to the dumping point).This average is based on charges of Tsh 16 (US$1.70) for domestic and othersmall premises, Tsh 75 (US$7.98) for industry and commerce and Tshs 240(US$25.53) for major institutions. For FY83, forecast revenues are basedon an estimated10 / average load charge of TSh 75 (US$8.00) derived from acharge of TSh 60 (US$6.38) per load for domestic and other small premisesand TSh 260 (US$27.66) for industry and major institutions. These chargesare currently under consideration by DCC.

4.11 For FY84 and subsequent years, assumed revenues are thoserequired to cover operating costs including interest and the greater ofdepreciation or debt repayment. The average charge per load arising onthis basis in FY84, is TSh 180 (US$19.15), equivalent to TSh 149 (US$15.85)

10/ Mission estimates

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at 1982 price levels. Although these charges may appear high, currentlymany pit latrines and septic tanks are emptied by private contractors at acharge of TSh 500-600 (US$53.19 - 63.83) each. Furthermore, pit emptyingfor latrines is required only about once every five years. Agreementwas reached during negotiations that for FY84 and each year thereafter,charges for pit latrine and septic tank emptying would be fixed to earnrevenues adequate to cover operating costs, interest, plus the greater ofdepreciation or repayment of debt.

4.12 In addition to the latrine emptying charges, interest would beearned on the loans to be made to householders for the upgrading andconstruction of pit latrines. The individual loan would average TSh 3800(US$404) at 1982 price levels for each latrine, for 15 years at 10%interest annually. The borrower would sign a loan agreement. Equivalentarrangements should be made for financing sewer service connections. Duringnegotiations agreement was reached that lending for pit laLrine upgradingand construction, and for sewer service connections, would be made on theseterms.

4.13 Collections. Currently little or no effort is made to collectoutstanding accounts either for pit emptying or sewerage charges

(paragraphs 4.02 and 4.03). Because of the difficulties experienced inobtaining payment for credit, many parastatal and private organizations nowrequire Government departments and other entities to make advance paymentfor goods and services. DSSD would follow this practice fDr pit emptying.During negotiations it was agreed that no credit will be given for pitemptying services, all payments being required in advance.

4.14 The proposed DSSD finance/accounting unit (paragraphs 5.10 and

5.11) is expected to be operational using computerized billing methodsbefore December 31, 1983. Billing would be carried out on TANESCO'scomputer with parallel bills being produced for electricity, water,sewerage charges and debt service for latrine loans. Initial steps havebeen taken to form a committee - the financial directors of TANESCO and ofNUWA and DSSD, as soon as they are appointed - to implement the systems.Agreement was reached during negotiations that Government will arrange thatauthority be given to TANESCO, NUWA and DSSD for parallel billing and thatoutstanding accounts for sewerage charges and debt service would not exceedthe equivalent of the previous three months billings. After a trial periodof two years the system would be reviewed by the three agencies inconsultation with IDA.

4.15 DSSD Future Operations. Based on the foregoing and assumingescalation of operating costs at 11%, 10%, and 9% for 1982, 1983, 1984 andthereafter respectively, consolidated DSSD revenues will increase in stepsfrom TSh 3.6 million (US$0.38 million) for FY83 to TSh 61.5 million (US$6.5million) in FY87, or at an annual average rate of increase of 103%.Consolidated operating costs over the same period will increase from TSh13.4 million (US$1.4 million) to TSh 41.1 million (US$4.4 million) or at anannual average rate of 32%. The operating ratio will be transformed from369% in FY83, producing an operating loss of TSh 9.8 million (US$1.0million) for that year, to 67% with an operating income of TSh 20.5million (US$2.2 million) for FY87.

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4.16 Current Assets/Liabilities. Based on tighter control ofcollections, and on continuation of the current DCC practice of payingbefore receipt of goods and services, and provided that inventories aremaintained at acceptable levels, the current ratios will increase rapidlyfrom 1.9 in FY83 to 3.9 by FY87. Cash available in FY86 and FY87 is highdue to the assumption that there would be no capital expenditures for lowcost sanitation in addition to the project. However, there could be somecapital expenditures for vehicle replacements and additional lending forpit latrines during these years.

Financing Plan

4.17 DCC is expected to invest TShs 251.5 million (US$26.7 million)for project purposes during the period FY83-87; in addition TShs 10.5million (US$1.1 million) would be expended for sewer connections in FY86and FY87 and TSh 133.7 million (US$14.2 million) for Phase II costs. Thetotal capital investment of TSh 395.7 million (US$42.1 million) would befinanced by Government onlending and grants, towards the cost of theproject. The balance of DCC project financing would be met from internalcash generation. Government would also provide subsidies of TSh 14.0million (US$1.5 million) for FY83 and FY84 operations and TSh 111.6 million(US$11.9 million) towards assumed Phase II expenditures in FY86 and FY87,DSSD's balance of these costs would come from internal cash generation. Onthis basis the financing plan is as follows:

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MILL ION STSh TSh US$

1983 1984 1985 1986 1987 Total 'rotal %

Internal Cash Ge(ration -3.6 3.1 34.9 38.4 39.7 112.5 l2.0 28.4Contributions for Sewer

Connecttorr - 4.1 4.5 5.0 5.5 19.1 2.0 4.8Grcss Internal Cash Gen. -3.6 7.2 39.4 43.4 45.2 131.6 14.0 33.2Less: Debt Service aid

Workng Capital 3.9 9.6 23.1 20.6 27.3 84.5 9.0 21.3

Available for Investment -7.5 -2.4 16.3 22.8 17.9 47.1 5.0 11.9

Goverrunt Equity- Subsidies 7.5 6.5 - - - 14.0 1.5 3.5- Project 20.9 26.0 13.4 7.1 - 67.4 7.2 17.0- Phase II 55.9 55.7 111.6 11.8 28.2

Total Equity 28.4 32.5 13.4 63.0 55.7 193.0 20.5 48.7

Goviernmert lending ir-cluding IDACredit 27.9 79.0 56.3 0.5 - 163.7 17.4 41.4

Deduct Surplus Cash - - - -4.1 -4.0 -8.1 -0.9 -2.0

Total Sources 48.8 109.1 86.0 82.2 69.6 395.7 42.0 100.0

Capital Ex4enditure- Project 48.6 103.8 76.4 7.1 - 235.9 25.1 59.6- Loans mae 0.2 5.3 9.6 0.5 - 15.6 1.6 3.9

Total for Project 48.8 109.1 86.0 7.6 - 251.5 26.7 63.5

Sewer Conmections 5.0 5.5 10.5 1.1 2.7

Phase II Construction 69.6 64.1 133.7 14.2 33.8

Total Investme:nt Expenditures 48.8 109.1 86.0 82.2 69.6 395.7 42.0 100.0

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4.18 Future Financial Position. The financial position should improveas soon as the facilities and institutional improvements provided under theproposed project become operational. DSSD should be able to coveroperation and maintenance costs and generate contributions of 7% to capitalexpenditures in FY83-FY87, an improvement over the present situation.

4.19 The debt/equity ratio will be 33/67 in FY87 and the current ratiowill be 3.9, largely due to the inclusion in current assets of surplus cashof TSh 38 (US$4.04) million that will be available for investment fornew pit emptying vehicles or lending for additional pit latrines. On theassumption that future capital expenditures will be made prudently, thefinancial position would remain sound. However, to safeguard DSSD'sfinancial situation, it was agreed at negotiations that DCC would not incurfuture long term debt on behalf of DSSD without prior consultation with IDAunless cash generation of DSSD for the preceding fiscal year is at least1.5 times future debt service, including on the proposed new borrowings.

Project Monitoring Indicators

4.20 The recommended project monitoring indicators are listed inAnnex 11. A completion report would be prepared by ARDHI and DCC.

V. BORROWER AND IMPLEMENTING AGENCIES

Lending Arrangements

5.01 The Borrower would be the Government of Tanzania. About TSh119.7 million (US$12.8) million of the credit would be onlent to DCC for 25years, including five years grace, at 11% p.a. interest. About TSh 72.4(US$7.7) million would be passed on as a grant. TSh 4.4 (US$0.5) millionand TSh 15.0 (US$1.6) million would be passed by Government to TANESCO andNUWA respectively on a grant basis, covering the technical assistancecomponents included in the project for these two organizations. Completionof the onlending agreement between Government and DCC would be required asa condition of effectiveness.

Organizations

5.02 ARDHI (paragraph 2.12) would have prime responsibility forimplementation of the physical components of the project (paragraphs3.25-3.31). Assets provided by the project (except private low-costsanitation units) would become the property of DCC and rehabilitated assetswould remain the property of DCC. DCC, through the new DSSD (paragraph3.14), will play a role in the implementation of the low-cost sanitationaspects of the project and will have responsibility for operation of thesewerage and sanitation systems. DCC will also be responsible forestablishing DSSD and, in coordination with its parent ministry, the PMO,recruit the permanent staff required to operate DSSD.

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Dar es Salaam Sewerage and Sanitation Department (DSSD)

5.03 Both the Master Plan for Dar es Salaam sewerage and the ProjectFeasibility Report recommended that sewerage and sanitation services remainthe responsibility of DCC until such time as a national parastatal would beready to assume this responsibility (at least 5 years). Currently,responsibility for sewerage and sanitation within DCC is divided among theCity Treasurer, City Engineer, Chief Health Officer and the Chief WorkshopMechanic. In order to bring commercial management attitudes to thephysical and financial operations and to train the personnel in parastataltype organizations, it was agreed at negotiations that DCC will form aseparate department to discharge DCC's statutory responsibilities.

5.04 The department, called the Dar es Salaam Sewerage and SanitationDepartment (DSSD), would operate on semi-commercial lines. It would be aself-contained, semi-autonomous department reporting to the City Director,incorporating all the services and functions including administration,personnel, finance and accounting, necessary to carry on the sewerage andsanitation operations. A draft organization chart is given in Annex 12.

Management and Staff

5.05 The General Manager, Finance Manager, Transportation andEquipment Manager, Sewerage Manager, Sanitation Manager, Mechanical andElectrical Engineer, Health Educator, Legal Advisor and the TrainingAdviser would be expatriates financed from the proceeds of the Credit forthe first two or three years of DSSD operations (Annex 2). The appointmentof the key officers would be a condition of effectiveness.

5.06 Although a draft organization chart is given in Annex 12, theGeneral Manager would be required to devise the most appropriateorganization for DSSD, which should follow that of TANESCC as closely aspossible to ensure the maximum benefit from adopting TANESCO's managementoperating and information systems (paragraph 5.10).

5.07 Staff for other positions would be found from among the existingstaff in DCC or from outside. One of the major tasks of the departmentalmanagement would be the job definitions for staff positions within DSSDfrom which a manpower demand forecast can be prepared. Preferably,counterparts for the expatriate position holders should be identifiedquickly but not at the expense of quality as demonstrated by bothqualifications and experience. The quality, volume and time span oftraining and experience required to qualify Tanzanians for the staffpositions would be derived from the manpower forecast, and after takingaccount of people available to fill the positions.

Management Development and Training

5.08 Staff recruited for technical positions are most: likely to comefrom DCC and be conversant with some aspects of sewerage and sanitationoperations. Administrative and accounting staff will be new andinexperienced in the office procedures that they will be required toundertake. They will be trained in the operations of TANESCO's management

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information system (paragraph 5.10) as adapted to sewerage and sanitationoperations . Management consultants are being provided from project funds(paragraph 5.11) to adapt the TANESCO systems for DSSD use and they willassist DSSD management in specifying the type of training, numbers requiredto undergo the training and the curricula to be followed. Training wouldbe at TANESCO's training school in Dar es Salaam and the project fundsinclude an allowance for the cost of training - including a TANESCOexpatriate commercial training officer - for TANESCO, DSSD and NUWA staff.

5.09 Instruction to be given in the operations, administrative, andaccounting systems will be job specific in the use of the various inputforms for, and output reports from, the computer based system (paragraph5.11). Clerks will be trained in the new procedures. Accountants will betaught how to interpret and use the monthly and annual reports. The schoolis expected to use experienced staff for such tuition under the supervisionof the TANESCO commercial training officer (para. 5.08).

Management Systems

5.10 The proposed DSSD will be a new organization intended to operateas a semi-autonomous department of DCC responsible for arranging its own

financing through the auspices of DCC and Government, in its early years.NUWA is also a new organization operating in the same public utilityenvironment as DSSD. If DSSD is to be merged into NUWA in the future andbuild an effective sewerage and sanitation organization country wide, bothorganizations should have the same operating, administrative and managementinformation systems from the beginning. TANESCO, the major public utilityin Tanzania already operates nation wide and has the basic operating andmanagement information systems that both DSSD and NUWA can adopt to operateeffectively. The TANESCO system covers project control and monitoring,contract and capital works job costing, personnel records and payroll,billing and consumers accounting, inventory control and management, fleetoperation accounting and all the records and periodic reports necessary forefficient public utility operation and management.

5.11 The system is based on data processing by a computer alreadyoperated by a long established and effective computer department. TANESCOhas acquired a new computer, the configuration of which can be expanded tomeet NUWA and DSSD needs. Some systems analysis assistance would berequired to adapt the existing programs to DSSD and NUWA use; provision isincluded in the project to provide technical assistance for this purpose.A major objective in adapting the existing computer programs for consumers'billing would be to prepare parallel bills to consumers for electricity,water, and sewerage and sanitation each month. Coupled with appropriatesanctions for non-payment, parallel billing of all public utility chargesshould improve consumers administration, reduce costs, improve collectionfor water, sewerage and sanitation services and impose billing disciplinescurrently absent from those operations. However, recourse in the event ofnon-payment of sewer service charges and loan installments for latrineconstruction is difficult and there is the risk that reaching satisfactorycollection levels could take longer than planned.

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5.12 TANESC0 would be paid by NUWA and DSSD both for the cost of anytraining and a monthly charge based on the number of transactions processedfor each organization, covering the services provided. These would covercontrol of transactions for computer processing, processing and delivery ofreports at terminals and printers located in the offices of eachorganization.

5.13 An essential part of the management systems improvement includedin the project would be a door-to-door survey in Dar es Salaam to ascertainthe premises connected to sewerage, water and electricity systems(Annex 2, paragraph 18). DSSD and DCS consumer records are incomplete(paragraph 4.02) and require updating before effective billing can beachieved. TANESCO records are generally good except for some consumeraccount/plot number relationships in squatter areas. When the computersystem is ready to record the data, the survey would be carried out bystudents under the supervision of representatives of DCC/ARDHI, DCS/NUWAand TANESCO and under the general direction of an advisor who would designthe survey. The survey should require about 270 man months at a totalestimated cost of about TSh 160,000 (US$17,000) which is included in theestimated project costs.

5.14 Up-to-date maps of the city would be required for the abovesurvey. The project would include an aerial survey and photogrammetricmapping (paragraph 3.14-k), already in progress, at a cost of aboutUS$250,000 equivalent.

Audit and Insurance

5.15 The audit of DCC is carried out by the Auditor-General ofTanzania who is acceptable to the Bank as auditor for other projectsimplemented by Government departments.

5.16 Annual accounts had been prepared by the City Treasurer to theend of FY79 but neither the accounts for FY78 or FY79 had been issuedpending the settlement of auditors' comments and queries. City accountingis in a poor condition as the City Treasurer does not have an adequatenumber of qualified staff.

5.17 DCC currently self insures all its assets with the exception ofvehicles for which it carries third-party cover. Assurances were obtainedduring negotiations that project equipment and materials will be covered bymarine and transit insurance to site including the necessary foreignexchange needed to replace equipment and materials lost or damaged.

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VI. ECONOMIC AND SOCIAL ANALYSIS

Project Benefits

6.01 Project objectives are described in paragraphs 3.07-3.09.Justifications for the sewerage component of the project are institutionaldevelopment (paragraph 6.05) and that it would rehabilitate the existingsewerage infrastructure in Dar es Salaam, improve maintenance andutilization of its existing capacity and prepare for future extensions tothe sewerage systems to areas where low cost sanitation would not beappropriate because of population density or soil and water conditions.The rehabilitation will improve the sanitary conditions by preventing thedirect discharge of untreated raw sewerage to storm drains, streams, theharbor and beaches (paragraph 2.20). Public health would be improved andthe frequency of occurrence of sanitation related diseases would bereduced.

6.02 The sewerage systems when rehabilitated, will serve only about10% of Dar es Salaam's population of about one million. Therefore, theproject would focus particularly on low-cost sanitation which would servethe remainder of the city's population, and whose present on-plot excretadisposal systems and hygiene practices contribute heavily to the mortalityana morbidity profiles of the city. In thus addressing the basicsanitation needs of the whole population of a major city, rather than justthe minority served by sewerage, the project would be the first of its typeto be financed by IDA .

6.03 Although only 3,700 of the improved pit latrines are included,out of an estimated total requirement of about 18,000 by 1984 (paragraphs2.35 and 2.36), the project would be a first step in introducing improveddesigns and systematic methods of project implementation. It is expectedthat the project would encourage adoption of the improved units byhouseholds and communities in other areas, both within Dar es Salaam and inother parts of the country .

6.04 Substantially all of the population of Dar es Salaam shouldbenefit from the project. The most direct beneficiaries would be theapproximately 60,000 people with an improved sewerage service and at least40,000 people with new or reconstructed pit latrines (paragraph 3.08).Nearly equal benefits would accrue to the balance of the city's populationthrough improved pit emptying services and the reduction of pollution andhealth hazards now existing because of defunct or inadequate sewerage andsanitation facilities. The health and personal hygiene education andpromotion component of the project (Annex 2, paragraph 24) also shouldbenefit people not directly served by the project.

6.05 A major project benefit will be the establishment of aninstitution (DSSD) and the development of the services required forsewerage and sanitation facilities to be properly operated, maintained andexpanded in future.. The institution is expected to be the core of afuture Tanzanian national institution for sewerage and sanitation.

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6.06 The implementation of an effective cost recovery system would bea critical part of the institutional development. Maintenance andexpansion of sewerage and sanitation facilities have been hampered partlyby poor cost recovery in the past, depriving DCC of the funds necessary tooperate and maintain the sewerage system and provide adequateemptying services for pit latrines and septic tanks. In the prevailingsituation in Tanzania in which budget funds are scarce, full cost recoveryfor both sewerage and low cost sanitation is necessary and is a projectobjective (paragraphs 4.07-4.16).

Least Cost Solution

6.07 Project studies - and experience in the world generally - haveestablished that properly designed and maintained on-plot sanitationfacilities are the least costly means of satisfactory excreta disposal,costing perhaps 20% of the cost of the sewerage alternative per householdserved. In Dar es Salaam the waste disposal program would concentrate uponon-plot units, limiting the waterborne sewerage system to areas wherepopulation densities or physical conditions prohibit the use of on-plotfacilities (paragraph 3.10 and paragraphs 6 and 7 of Annex 2).

6.08 The project studies also demonstrated that the most economicsolution for the existing sewered areas would be to refurbish and improvethe existing sewerage systems (paragraph 3.12 and Annex 2, paragraphs 14and 15). The consultants' economic analyses indicated that, over the30-year master plan period, the proposed sewerage and sanitation plan (withstabilization pond-strategy) would be less expensive than any of thealternatives considered at all discount rates below 25%.

Rate of Return and Pricing

6.09 Monthly sewer service charges per connection are estimated toaverage between TSh 338 (US$36) and TSh 100 (US$11) depending on whetherthere are 5,800 connections or 24,000 connections to the existing systems(paragraph 4.07). The internal rate of return of the seweragerehabilitation component of project would be about 6.9%, taking account ofall capital and operating costs, excluding duties and taxes and shadowpricing foreign exchange at a factor of 2.13 and local labor at 0.9. A 10%increase in costs would reduce the return to about 5.2%. A decrease inrevenues of 10% would reduce the return to about 5.1% (Annex 14).

6.10 For the low-cost sanitation component of the project, thehouseholders will borrow the cost of the latrine and pay for emptying itabout once every five years. The pit latrine emptying service to beprovided will enable the backlog in latrine emptying to be met by about1984 when the service becomes fully operational. The cost per load foremptying is estimated at 1982 price levels at TSh 180 (US$1.9) (paragraph4.11) based on 69,000 loads annually when the vehicle fleet; is fullyoperational. Using revenues derived from these charges and thehouseholders contributions for improved latrines as the benefit streams,and the capital and operating costs of the low cost sanitat:ion unit,excluding taxes and shadow priced for foreign exchange and local labor at

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factors of 2.13 and 0.9 respectively, the internal rate of return of theLCS component of the project is estimated at 5.9%, which is acceptablebecause of the benefits which cannot be quantified. An increase incapital costs of 10% has no effect on the return. A 10% decrease inbenefits would reduce the return to about 3.2%. Details of the returncalculations are given in Annex 14.

Impact on Poverty Group

6.11 The existing housing and sanitary conditions in the poor areas ofDar es Salaam (paragraphs 2.32 through 2.34 and in paragraphs 14-21 ofAnnex 1) indicate that substantially all of the population benefiting fromthe low-cost sanitation component of the project would be within thepoverty group. Low income squatter areas where malfunctioning of theexisting sewerage system and pit emptying practices create gross pollutionand serious health hazards would benefit most from the sewerage componentof the project.

6.12 The fact that the most low income houses are owned by landlordsimplies that the project would have a large impact on low income peoplerenting rooms with the costs of the improved latrines and emptying chargesbeing recovered in the monthly rents. The annual economic cost per houseis estimated at TSh 394.00 (US$42) and the annual per capita cost at TSh39.00 (US$4), or TSh 33.00 (US$3) and TSh 3.00 (US$0.32) per monthrespectively (Annex 13). About 85% of the families in Dar es Salaam wereestimated in 1980 to have monthly expenditures exceeding TSh 188(US$22.70).11/ Since about 3.1 families on an average occupy each housethey should each be able to afford the monthly charge of TSh 33.00(US$3.00) per family for an improved pit latrine.

Project Merit and Risks

6.13 The project will have an appreciable impact on the environmental,sewerage and sanitation situation in Dar es Salaam and hopefully lead intime to the continuing improvement of the sector situation throughoutTanzania.

6.14 Project risks are the possible failure of DSSD to develop as theefficiently operating organization envisaged so that it fails to maintainthe rehabilitated sewerage system and expand on the low-cost sanitationpioneering effort. The project includes training and experiencedexpatriate assistance initially, in an effort to mitigate this risk andfuture projects should continue the institution building endeavor. Thereare risks of failure to achieve financial targets, including adequatecollection of charges (paragraph 5.11), and to avoid delays.

6.15 Another major risk is that foreign exchange may not be availablein the future to pay for imported spare parts for the equipment andvehicles being provided under the project. Lending for a second phaseproject would help to obviate such a situation. Close monitoring by IDAshould take place to assure timely availability of funds for thesepurposes.

11/ Bureau of Statistics, Household Budget Survey 1976-77, updated tomid-1980 at 4% compounded p.a.

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VII. AGREEMENTS REACHED AND RECOMMENDATIONS

Agreements Reached

7.01 During negotiations, assurances were obtained from the Governmenton the following:

(a) the quality of the receiving waters to which stabilization pondsdischarge treated wastes and of the sea in the vicinity of theocean outfall would be monitored (paragraph 3.12);

(b) the Management Committee and the Project Implementation Unitwould be maintained until completion of the the Project, and theposts of of project manager, low-cost sanitation engineer andproject accountant would be filled with qualified and experiencedpersonnel at all times (paragraph 3.25);

(c) to assist in carrying out the project, experts would be employed,whose selection, qualifications and terms and conditions ofemployment would be satisfactory to IDA (paragraphs 3.15,3.30-3.32 and 5.05);

(d) acquisition of any required land or land rights would becompleted as and when needed but not later than June 30,1983; (paragraph 3.34);

(e) by June 30, 1984 a study comparing the costs involved in servingdifferent categories of customers would be completed; by December31, 1984, proposals for a new tariff structure would be prepared;and, promptly thereafter, the Government would take stepsnecessary to implement the tariff structure proposals taking IDAcomments into account;

(f) beginning in FY85 sewerage tariffs would be adjusted from time totime to generate funds from internal sources equivalent to aminimum of 20% of average sewerage capital expenditures for thatyear, the previous year and the next year. (paragraph 4.09);

(g) beginning in FY84, charges for pit emptying services would befixed to earn revenues adequate to cover operating costs, plusdepreciation or repayment of debt, whichever is greater, andinterest charges (paragraph 4.11);

(h) arrangements, satisfactory to IDA, would be made to enablehouseholders to borrow funds, under terms and conditionsacceptable to IDA, for the construction or upgrading of pitlatrines and for sewer service connections (paragraph 4.12);

(i) payment for all pit emptying services would be made inadvance(paragraph 4.13);

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(j) charges for electricity, water and sewer service and for debtservice on loans for pit latrines or sewer service connectionswould be billed on a parallel basis and outstanding accounts forsewerage charges and debt service would not be allowed to exceedthe equivalent of the previous three months billings (paragraph4.14);

(k) DCC would not incur additional long-term debt on behalf of DSSDwithout prior consultation with IDA unless cash generation forthe preceding fiscal year is at least 1.5 times future debtservice, including on the proposed new borrowings (paragraph4.19);

(1) the proceeds of the credit allocated for acquisition,construction or rehabilitation of sewerage and sanitationfacilities would be onlent to DCC on terms and conditionssatisfactory to IDA (paragraph 5.01);

(m) the proceeds of the credit allocated for technical assistancewould be passed on as grants (paragraph 5.01);

(n) a survey of service connections for sewerage, water supply andelectricity would be made by December 31, 1983 (paragraph 5.13);

(o) the Auditor-General of Tanzania would audit DCC beginning withFY83 (paragraph 5.15); and

(p) adequate provision would be made for the insurance of importedgoods to be financed out of the proceeds of the Credit (paragraph5.17).

7.02 The following would be conditions of effectiveness:

(a) execution of the subsidiary loan agreement between the Governmentand DCC (paragraph 5.01).

(b) the appointment of key officers of DSSD (paragraph 5.05);

Recommendation

7.03 With the above agreements, the proposed project is suitable foran IDA Credit of US$22.5 million equivalent including retroactive financingof consulting services in an amount not exceeding US$500,000 equivalent(paragraph 3.42).

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ANNEX 1Page 1 of 5

TANZANIA

DAR ES SALAAM SEWERAGE AND SANITATION PROJECr

Existing Water Supply, Sewerage and Sanitation Systems

Health Information

1. The major causes of mortality and morbidity in Tanzania arediseases associated with poor sanitation, poor nutrition and lack of healthknowledge.l/ High rates of various water borne, water washed and vectorcarried infectious diseases, a consequence of poor sanitatiDn, include:malaria, the largest source of mortality and mobidity; schistosomiasis,with a prevalance estimated at twenty percent nationwide; gastroenteritisand other diarrheas, which ranked fourth in percentage of hospitaladmissions and among the five most common causes of deaths in hospitals.2 /Tanzania has suffered five outbreaks of cholera since 1974; the 1977-78epidemic killed over 1,500 people.

2. For decades municipal administrations in Tanzania maintained andpublished periodic reports including vital statistics. Owing to thechanges in municipal administration since.1974 (paragraphs1.03 and 2.21), this practice has not been continued in the immediate pastin Dar es Salaam. However, DCC medical officials compiled a partial reporton the incidence of some of the common communicable diseases in Dar esSalaam for the period January through September 1979 and which showsdangerously high levels for a city with a population of nearly one million:

Diseases Reported cases

Malaria 166,000Schistosomiasis 19,000Diarrhoea (excluding cholera) 47,000Hookworm 7,400

Existing Water Supply System and Standard of Service

3. Two of the three major water supply sources for Dar es Salaam areon the Ruvu River. The upper Ruvu Treatment Plant, constructed in 1959 andexpanded five times since then, has a capacity of 85,000 m3 /d. The lowerRuvu Treatment Plant, constructed in 1976, has a capacity of 180,000 m3/dwhich can be expanded to 270,000 m3/d. Water from these two sources ispumped to the Kimara and University Reservoirs respectively before

1/ Health In Tanzania, USAID, 1979.

2/ In addition, ankylostomiasis, amolbiasis, giardiasis, hepititis,filariasis, tinea, and scabies are common.

- 37 -

ANNEX 1Page 2 of 5

distribution by gravity to the high zones. The third source of water isthe Mtoni Treatment Plant (capacity 5,000 m3/day) located to the south ofthe urban area and which draws water from the Buza Reservoir on the MzingaRiver and from the Mtoni River for treatment and pumping into thedistribution system. The high and low zones of the distribution system areinterconnected.

4. According to MWE officials, the existing water sources areadequate for Dar es Salaam until 1987 or 1988 without control on the RuvuRiver. After then, when the upper Ruvu Treatment Plant is expanded, lackof river regulation could cause water shortages during two or three monthsof the year. Water production from these sources at present averagesbetween 120,000 to 180,000 m3 /d according to various estimates; accuratefigures do not exist because flow meters do not function at any of theplants.

5. The existing public water supply system does not providesatisfactory service, in spite of the fact that the installed capacity oftreatment and transmission facilities appears ample. Estimates of lossesdue to leaks in the transmission and distribution systems range from 25% to50% of water production. There are frequent interruptions of supplyand in some parts of the system, particularly in the high zones, waterseldom is supplied on a continuous basis. On a number of recent occasions,substantially untreated water has been distributed because of shortages ofchemicals. Distribution mains are undersized, expecially in the citycenter and the interconnections between pressure zones are defective.Pumps often are broken down and because of poor maintenance their usefullife in Dar es Salaam is only about 10 years. There is no measurement ofwater production and metering of water use is totally inadequate. Althoughall service connections are supposed to be metered (except publicstandpipes), it is estimated that only 25% have functioning meters.

6. There is no reliable information on the population served by thepublic water supply system or of the numbers of people provided with theavailable levels of service. However, it is reasonable to assume thatnearly 100% of the population of the urban sections of the Dar es Salaamregion obtain their water in one way or another from this system. In somecases this may be supplemented from other sources (Chapter II, paragraph2.16).

7. Three general levels of water supply service are provided asfollows:

(a) individual full service connections to residences, andpractically all industries, institutions and commercialestablishments, which have fully or partially plumbedinternal systems, including flush toilets;

- 38 -

ANNEX 1Page 3 of 5

(b) individual plot connections with only an external tap orpartial internal plumbing, but not including flush toilets;and

(c) public standpipes where water is obtained by householders orby vendors who sell to households.

8. According to WCS, there were about 35,000 individual waterservice connections in 1980 and about 550 public standpipes. The actualnumber of direct water service connections could have been much higher than35,000 in 1980 since illegal connections are a major problem. From datadeveloped for the Sewerage and Sanitation Master Plan it is estimated thatthere are about 40,000 people (1979) in residential areas served basicalyby public standposts. WCS has a plan to phase out public standpipes by1984 but this appears impractical because of the magnitude of the task andthe cost of water service connections (about Tsh 2000 each). In fact, thenumber of public standposts has increased since 1980. The difficulty ofachieving 100% individual connections is illustrated by a survey in twolow-income areas of Dar es Salaam where water mains run clkse to mosthouses but less than 50% of the households have connections and less thanhalf of the balance have intentions of getting them.

9. Water demand figures developed for use on the sewerage studiesare 24 to 30 lcd for population using public standpipes, up to 60 lcd forplots with individual connections but without flush toilets, and 120 lcd to240 lcd for middle and high income housing with full plumbing. Actualservice provided often may be less than this because of constraints in thesystems (paragraph 5).

Existing Sewerage and Sanitation System and Standards of Service

10. The existing sewerage system serves about 12% of the populationof the Dar es Salaam Region and is of the separate type; i.e. designed forsanitary sewage only. The city center sewerage system (IBRD Map 16132),constructed between 1948 and 1952, discharges through an ocean outfall justnorth of the harbor entrance. Sewage either gravitates or is pumped to theoutfall. Between 1956 and 1959, the city center system was extendedsomewhat to the west and south. In addition, various isolated seweragesystems have been installed for residential, institutional and industrialdevelopments in outlying area, and in each one sewage treatment is by wastestabilization ponds which discharge to local watercourses. There are nineof these separate systems as follows:

(1) Mikocheni, Regent Estate and Kijito Nyama(2) University(3) Ubungo Industrial Area(4) Dar es Salaam Airport and TPDF Airwing(5) Pugu Road Industrial Area (Part) and Tazara. Schemes(6) Mgulani/Kurasini(7) Buguruni(8) Lugalo Military Barracks(9) Ukonga Prison

- 39 -

ANNEX 1Page 4 of 5

11. The condition of the existing sewerage system is exceptionallybad. The ocean outfall has been broken near the shore for years. Only oneof the waste stabilization ponds - at the University of Dar es Salaam - isoperating with some degree of effectiveness. Of the 17 existing pumpingstations, only one can be operated. Some of the defunct stations,including an important one in the city center, have been out of commissionfor several years. A number of the major sewers are blocked completely.Septic conditions, causing serious corrosion of sewers and dangerousconcentrations of gases, can be observed at a number of locations on thesewerage systems. Many manhole covers have been removed and others buriedunder road surfaces so they have not been located and opened. Thesituation is such that until sewers are cleared, few meaningfulexaminations can be made to determine their capacities, structuralconditions and the extent of rehabilitation required. Similarly, littlecan be done to measure flows and characteristics of the sewage.

12. . As noted above, it is not possible to measure existing sewageflows. However the probable average daily sewage flow from the propertiesbelieved to be served in 1979 totaled about 22,000 m3/day with peak flowsof about 56,000 m:$Iday. There were estimated during the engineeringstudies for the proposed project using emphirical methods because of thedata limitations. However, the procedures used were sound and the resultsappear realistic. The engineering studies also indicate that most, if notall, of the elements of the existing sewerage system have excess capacityfor the population that could be served by the existing system, providedthat these elements are in reasonably good conditions.

13. Of the total population of the Dar es Salaam Region in 1979(932,000), about 10% had septic tanks and 78% had pit latrines of sometype. Altogether there were about 8,400 septic tanks and 60,000 latrines.

14. Data regarding housing and sanitation conditions and practiceswithin the city are generally unavailable, particularly in urban fringe andsquatter settlements where the population is increasing rapidly due tomigration. Given the lack of available information, in 1980 anon-probability cluster sample of 278 houses in 10 low-income planned andunplanned areas of the city were surveyed by ARDHI and HHP. This surveyprovides the most comprehensive analysis of housing and sanitation relatedconditions and practices amongst low income groups in Dar es Salaam andstrongly supports the need for a low cost sanitation improvement in thecity.

15. Based on the 1980 survey, housing is scarce and considerablecrowding exists. There is an average of 10.9 persons per house, 2.2persons per room, and average of 3.1 families per house in low incomeareas. The most common arrangement is the rental of rooms by the homeownerwho also lives on the property, although a significant proportion of houses

- 40 -

ANNEX 1Page 5 of 5

(17%) have absentee landlords. More than half of the rooms are rented ator below 50 TSh per month (for 1981, rental prices would have to beadjusted upward). Housing shortages result in a mix of ethnic andreligious groups, and family structures. It is not uncommon for familiesto rent rooms to strangers.

16. Sixty-four percent of household heads were regularly employed.Income is low although no reliable information was availab]Le on incomelevels. Most of the population had some education and 38% of familyhousehold heads had 10 or more years of schooling. Only 11L% of householdheads (including both men and women) had no formal education.

17. Pit latrine slabs are of the squatting type, usually made ofconcrete (79%), with a smooth finish, and kept clean. Only 3% of slabswere observed to be fouled upon inspection. Just over 20% of the slabswere constructed of mud and temporary materials such as corrugated iron.Pits are often lined with cement/sand blocks, although the percentage isnot available. The majority of pits have never been emptied (74%), andmany have excreta levels of 0.5 m or less below the slab. Twenty-fourpercent report that excreta rises near or over the slab during the rainyseason. Covers for the squat plate are used by only 23% of the housessurveyed.

18. The superstructure is frequently made of cement/sand blockwork(44%); other common materials are mud (15%) and corrugated iron (24%). Themajority of superstructures have no roofs and no door. In fact, the mostfrequent complaint about existing facilities is the lack of privacy. Othercommon complaints are bad odors (21%), and abundance of fiLies andmosquitos (31%).

19. In many houses, particularly those with many members, twolatrines are provided. In some houses owners and tenants have separatelatrines and in other cases, traditions dictate provision ofseparate facilities for men and women. Where customs demand separatefacilities, it is unlikely that education will change this preference.

20. At the present time, construction of the latrine sub-structure isusually carried out by a local contractor (fundi) who is paid for his labotand supplied with the needed materials.

21. Sixty-one percent of those surveyed bathe in the pit latrinesuperstructure. Others tend to use a separate enclosure on the ground(27%). Water from bathing either flows into the pit, or is channeledoutside of the latrine onto the ground. Sullage from cooking and clotheswashing is disposed of on the ground in more than three-quarters of allhouseholds surveyed. Pools of water are frequently observed in the patioand areas surrounding the home creating breeding places for mosquitos andother disease carrying insects. Only 23% of the low-income houses surveyedhad the traditional clothes washing/cooking facility (karo) which providesullage soakaways.

- 41 -

ANNEX 2Page 1 of 10

TANZANIA

DAR ES SALAAII SEWERAGE AND SANITATION PROJECT

Project Description

1. Physic&l Co~iaponents

(A) Sewerage kehabilitation and keplacerient:

(i) clear, clean, inspect and repair about 130 km of sewersand pumping mains, including replacement of up tO about2% of the sewers ana about 8 km of pumping mains;

(ii) repair sea outfall (1000 mm diameter, about 1.0 km long)arid construct new screenhouse bypass and intakestructure;

(iii) rehabilitate 17 pumping stations includingreplacing of most mechanical and electrical equipmentand repair of structures;

(iv) repair and improve 9 waste stabilization pond systemswith a total area of about 27 ha;

(v) purchase equipment, tools and vehicles required forrehabilitation, operation and maintenance of sewerage,including spares;

(vi) construct about 600 new sewer service connections toexisting sewerage system (see also item 2-A-ii).

(B) Low Cost Sanitation

(i) construct and upgrade about 3600 pit latrines atresidences and about 100 at schools;

(ii) reconstruct one existing ana construct about five newdumping stations for pit emptying vehicles;

(iii) rehabilitate about 14 pit emptying vehicles and purchaseabout 16 new ones, including spare parts; and

(iv) purchase vehicles required for administration of the lowcost sanitation program, including spare parts.

- 42 - INNEX 2

E'age 2 of 10

(C) Buildings and Related Furnishings and Equipment

(i) construct a new headquarter building for DSSD includingbasic laboratory facilities;

(ii) construct a building for the Mechanical and ElectricalDivision (M & E) of DSSD including shop and storagespace for sewerage maintenance equipment(item I-A-v);

(iii) purchase equipment for central workshop and M & EDivision of DSSD (in addition to I-A-v);

(iv) improve and extend three sewerage vehicle maintenancedepots; and

(v) construct a field office for the low-cost sanitationprogram.

(D) Purchase of Vehicles and Equipment for Project ImplementationTean in ARDHI

2. Technical Assistance

(A) hIplementation, Operation anu Liaintenance

(i) consulting services to designi anid manage seweragerehabilitation contract work (item I-A) and providetraining on sewerage maintenance;

(ii) assistance with surveying and recording of existingservice connections for sewerage, water supply andelectricity;

(iii) advisors and equipment for the public bealth educationand extension services relating to sanitation;

(iv) outside experts to staff.key posts in DSSD and to assistwith the training of local counterparts; for these posts;

(v) specilized training of professional and. technical staffin schools and universities;

(vi) detailed design and construction supervision of newdumping stations (iten I-B-ii), builoings(items 1-C-i and 1-C-ii) and extensions to depots(item1-C-iv); and

-43- ANNLX 2

Page 3 of 10

(vii) studies and implementation assistance with respect tocharges for sewerage and sanitation services, billing,collections, and record and information systems,

including assistance to TANESCO in adapting itsbilling/collection/accounting programs for sewerage andwater supply needs.

(viii) aerial survey and photogrammetric mapping of Dar esSalac6m;

(B) Planning for Future Development

(i) aetailed design of new sewerage for a SLage IISewerage/Sanitation Project;

(ii) additional studies on sewerage, sanitation and pollutionrelated matters, including solid wastes management and

review and recommendations with respect to legislationand bylaws.

(C) Technical Assistance with Establishment of the National UrbanWater Authority (NUWA)

3. More details on the proposed content of the various projectelements may be found in Project Documents.

Duration and Scope of Project

4. The implementation period and scale of the project have beenchanged considerably during project planning. As proposed originally in theSewerage and Sanitation haster Plan Report, (paragraphs 3.01 and 3.02)Stage I was to be carried out over a five-year period (1980-1984). Inaddition to sewerage rehabilitation, it would have included a substantialamount of new sewerage and the construction or rehabilitation of about22,000 pit latrines and about 4000 septic tank installations. The (ost ofthe project, after allowing for items which the consultants did not priceand allowing for physical anG price contingencies, was estimaated at aboutTSh 600 miliion (USb72 million equivalent). This project proposal wasclearly way beyond the financial resources and implemenitation andoperational capacities available to the agencies responsible for carryingout the project and operating the Dar es Salaam sewerage and sanitationsystems.

" 5. During the later planning stages, ARDHI and DCC agreed to an IDArecommendation to scale the project back to a three year program and a moremanageable size. In addition to the resource constraints, there were otherjustifications for the changes. The project would include a number of

-44- ANNEX 2Page 4 of 10

innovations which should be tried out before embarking on a larger scaleoperation. A considerable amount of the sewerage rehabilitation shoulu becompleted before-much expansion is undertaken. Preparation of a Stage IIproject shoula be based in part on experience with Stage I. And finally,much institution building is required just to manage the existing systems.

Low-Cost Sanitation

6. A key decision in project planning was that new sewerage wouldhave low priority in Dar es Salaam, restricted to areas where population

densities or physical conditions would prohibit use of on-plot sanitationfacilities. It is a well established fact that pit latrines usually havemuch lower construction and operating problems and costs than sewerage.In the case of Dar es Salaam, the initial cost of a properly designed andconstructed pit latrine is estimated to be 60% of a sewer serviceconnection required to serve an equivalent number of people. When the fullcapital and operating expenses of both systems are taken into account,including the costs of interior plumbing, the spread in the comparativecosts widens considerably.

7. The on-plot sanitation alternatives provide the same healthbenefits as sewerage - although pit latrines usually are less convenient -provided, however, that they are properly designed and constructed, thatthe institutions and facilities required to serve them (mainly pit emptyingand sludge disposal) are adequate and that the people are aware of properpersonial use and care to ensure the health benefits. The designs andplanning for low-cost sanitation in Dar es Salaam has benefited from muchrecent research worldwide, including the UNDP demotnstration project(paragraph 3.03). In addition, during preparation of the Master Plan,existing sanitation facilities as well as conditions and practices onnon-sewered properties were surveyed, improvements were recommended andforecasts were made as to the extent of these types of sanitation units infuture. These recommendations and forecasts have been made afterconsideration of soil and groundwater conditionts, income levels, housilngstandards and population densities in all parts of the study area. Morerecently there has been considerable field work in Dar es Salaam by ARDHIinvolving demonstration units, more surveys and experiments to test boththe physical and socio-cultural aspects of the low-cost sanitationproposals (paragraph 3.13).

8. The improved pit latrine proposed for adoption as the keycomponent of the low-cost sanitation program is a ventilated, screened,emptyable type referred to locally as the "choo nzuri" (CN). Other designsare proposed for use under adverse subsoil and. groundwater conditions whichmay preclude the CN. The CN is said to provide for excreta disposal withless nuisance and public health risk than many of the present sanitationmethods because, in addition to screened ventilation, designed to reducemosquito and fly breeding, the contents can be hygienically removed fromthe pit. Emptying would be required about once every five years. The

- 45 -

ANNEX 2Page 5 of 10

estimated total number of new and replacement units through the master planperiod (to 2010) would average about 3,800 per year. However, the averageduring the Stage I project would be only about 1,200 per year while theprogram is being established. While the CN is not an experimental unit, itis being introduced in Dar es Salaam on a trial basis and changes in designshould be expected as the work progresses, particularly any that couldreduce costs. One possible option is to use a "pour flush" cover. Anotheris to provide a larger floor area to allow for the common practice ofbathing in the latrine superstructure. Applied research into mosquitocontrol is being planned and may be funded by WHO.

9. The low-cost sanitation units to be constructed by contractorsunder the project would be concentrated in five wards (Makurani, Kurasini,Mtoni, Keko and Temeke) located in the southern district in the city(paragraphs 2.04 and 2.31). Provisions also will be included forhouseholds within the district who which to make their own arrangements toupgrade suitable existing latrines or build new ones. For such cases, thecontractors would supply kits comprising vent pipe and mosquito gauze,squat slab and cover and standard construction drawings. The kits would bestockpiled by the contractors and sold and delivered to the householders byDSSD.

10. The project would include the construction of about 100demonstration low-cost sanitation units at schools in the project areawhere toilet facilities are inadequate. This is considered essential forthe education and promotion aspects of the project (paragraph 25).Additional demonstrations of separate bathing units, double units and karos(for the disposal of sullage water) would be undertaken at selected placesas part of the promotional campaign.

11. The proposed project would include substantial improvement inDCC's pit emptying services which presently is poor (paragraph 2.30 andAnnex 1). This would include the provision of additional discharge points(dumping points) for the pit emptying vehicles, changes in vehicle controland emptying procedures, an increase in the number and adequacy of thevehicles and improved maintenance. Assistance with improvements in thedesign of pit emptying vehicles and operating procedures to suit conditionsin Dar es Salaam is being obtained through the UNDP demonstration projectand additional technical assistance and some equipment is expected to beobtained from SIDA.

-46- INNEX 2Eage 6 of 10

Sewerage

12. The critical decision with respect to sewerage is the type oftreatment and disposal to be used. In Dar es Salaam, sewage either has toreceive complete (primary and secondary) treatment to produce a highstandard effluent for discharge into local streams, or it may be collectedby interceptors and discharged to the ocean through sea outfaLls afterminimum treatment.l/

13. Several methods of complete treatment were considered but most couldbe quickly excluded because of comparatively high costs and operatingcomplexity required to achieve the required effluent standELrds. The finalrecommendation is for waste stabilization ponds. Such treatment is anaccepted method in Dar es Salaam and it should be efficient; prior problemshave been due entirely to design, operation and maintenance deficiences.

14. The consultants also established that the most economic solution forthe existing sewered area would be to refurbish and improve the existingstabilization ponds, pumping stations and the sea outfall. In new areas tobe sewered, stabilization pond treatment with effluent discharge to localstreams would be used. However, it is possible that in ful:ure, asdevelopment proceeds in some areas, detailed analyses could establish thata mixture of pond and sea outfall systems would be best in the long run.Another possible change in the existing plan is that future comprehensiveoceanographic studies could establish that the pretreatment: of sewage or,extension to deeper waters would be required for the existing sea outfallto preserve the ocean environment as sewage flows from the city centerincrease. However, ncither of these possibilities would influence thedesign of works to be carried out in the proposed project.

15. The consultants economic analyses in the master plan study showed thatthe proposed sewerage plan with the pond strategy, in present value terms(mid-1979 prices), would be between TSh 190 million (at 10% discount rate)and TSh 110 million (at 15% discount rate) less expensive t:han constructionand operation of interceptors and sea outfalls to meet Seweragerequirements over the next thirty years. In fact, the results - althoughnot carried out to this extent - indicated that the pona sl:rategy would beless at all discount rates below about 25%. The analyses were made using

1/ Consideration has been given also to the degree of treatment requiredfor the re-use of wastewater for irrigation purposes. While effluentssuitable for discharge to streams would be satisfactory for irrigation ofmany types of crops, no market for such water has yet been identified inthe near vicinity of Dar es Salaam.

~ 47 - ANNEX 2

Page 7 of 10

shadow prices for direct imports (1.50 ratio of shadow price to par rate)and for unskilled labor (30% of market value). While some of theassumptions made in the economic comparisons may be weighted in favor ofthe pond strategy, it\appears unlikely more detailed analyses wouldsignificantly reduce the large gap in present value between the twosystems.

16. The capital costs of the stabilization pond option for new sewerageconstruction over the master plan period was estimated at about 20% lessthan the outfall option at mid-1979 prices. However, over the first fiveyears of a program to construct new sewerage the construction costs wouldbe about equal for the two options since the more expensive trunk sewer andoutfall construction would not begin until about the sixth year.

Service Connections

17. Records of existing sewer service connections (estimated at 5,000 to6,000) are sparse and unreliable (paragraphs 2.28, 4.02 and 4.07). TheinforShtion on water supply service connections in Dar es Salaam, whichwill become the responsibility of NUWA, also is poor, and TANESCO isexperiencing difficulties with unregistered connectioIs. The proposedproject woulci include a field survey of properties to detect and registerexisting sewer service connections and to recora properties adjacent tosewers which could be connected. It is proposed to expand this survey toobtain equivalent information on water supply and electric power servicesas well, particularly since it is intended that these three types ofservice would be billed through a joint computer system. The survey wouldbe carried out by university and high school students (about 270man-months) during school holidays under the supervision of representativesof DCC/ARDHI, DCS/NUWA and TANESCO and under the general direction of anadvisor who would design the survey. An aerial survey and mapping,included in the project, would be used as a base for the assessment ofservice connections.

Vehicle and Equipment Maintenance

18. The buildings and depots to be constructed or improved for DSSD underthe project would include provisions for only minimum routine maintenanceof vehicles and equipment. Heavy maintenance and repairs would be carriedout under contract with suppliers. This option is considered to be morepractical and economic than heaving DSSD establish the shops and staffnecessary for most maintenance and repair activities because of theexisting difficulties and costs of trairning and retaining capable mechanicsfor DSSD (and DCC as a whole) and spare parts problems which could leaveexpensive plant and staff idle sauch of the time.

-48- ANNEX 2

Page 8 of 10

Technical Assistance and Training

19. The technical assistance component of the project would includeengagemient by DCC and ARDHI of the following advisors/consultants to staffkey positions required to manage the project, operate the sewerage andsanitation services of DSSD and assist with training of permllanent localstaff to undertake management and operations:

(a) For ARIHI:

(i) Project Manager (paragraph 3.25) for three yearsFY83-b5) and about 8 months in FY86;

(ii) Low-Cost Sanitation Engineer (paragraphs 3.05 and 3.25)for three years (mid-FY83 through mid-FY86) afterfinancing of the post by UNDP is completed; and

(iii) Social Scientist (paragraph 3.25) for three yearsbeginning about March 1983.

(b) For DSSD:

(i) General Manager for three years beginning about March1983;

(ii) Finance Manager for three years beginnirLg about March1983;

(iii) Sewerage Manager for two and one-half years beginningabout July 1983;

(iv) Low-Cost Sanitation Manager for three years beginningabout March 1983;

(v) Transportation/Equipment Manager for two years beginningabout March 1983;

(vi) Mechanical/Electrical Enginieer for two years beginningabout March 1983;

(vii) Training Officer for three years beginn:ing about March1983;

(viii) Legal Advisor expected to be the legal officer of DCCwho would be sent abroad for a total of about six monthsto gain practical experience with sewerage agencies; and

(ix) Health Education and Extension Specialist for two years

beginning about March 1983.

_ 49 _ ANNEX 2.Page 9 of 10

20. The periods of the above assignments are based on various assumptionsincluding: the time when the services would initially be required andfunds from the proposed IDA credit would be available; the implementationtimetable and duration of the project; and the length of time required toestablish in-house capabilities of permanent staff.

21. It is assumed that all of the above advisors, except the legaladvisor, would be expatriate contract staff and the cost estimates areprepared accordingly. However, it is possible that some positions would befilled on a contract basis by Tanzanians in which case costs could besomewhat lower.

22. The proposed technical assistance to be provided to TANESCO under theproject would be to adapt its billing, collecting and accounting programsto accommodate water supply, sewerage and sanitation services (item 2-A-viiand paragraph 5.08). This assistance would comprise an estimated sixmonths each by an accounting consultant and a systems analyst. Inaddition, funds are provided for TANESCO to engage a commercial trainingofficer for three years to handle the increased load of trainingaccountants at its school (paragraph 27).

23. Assistance to NUhA to help it become opeiational is expected toinvolve the engagement of a management consultanting firm to assist NUWA'smanagement in such iaatters as tne selection of personnel, introduction ofnew management systems and initial management training. Part of the costsmay be financed from a PPE advaiice by IDA to assist with preparation of aSecond Urban Water Supply Project. l1owever, additional financing woult berequired and it is proposed that it be obtained through the proposed IDAcredit for the Dar es Salaam Sewerage and Sanitation Project.

24. The education and promotion element of the low-cost sanitationcomponent of the project would be carried out by staff of ARDhI's Low-CostSanitation Section (paragraph 3.09) and DSSD under the general direction ofDSSD's Health Education and Extension Specialist (item ix of paragraph 20

above). The objective would be to encourage acceptances, proper hygienicuse, good care and maintenance of properly designed and constructedlow-cost units, whether or not they are constructed as part of the proposedproject. DSSD's four field prograsm officers would play considerable rolesin organizing community activities. They would be responsible forworkshops at ward levels, household promotion and community education

activities. Households expressing interest would be visited by the fieldprogram officers and assisted in making arrangments for the construction ofnew units or upgrading existing ones. (See Project Documents).

25. In the initial stages of the low-cost sanitation program, additionalresearch and development of promotional and educational techniques wouid be

required. It is expected that the Institute of Adult Education (Ministryof Education) withi the assistance of the Health Education Unit of AiYA and

- 50 - ANNEX 2Page 10 of 10

TAG would undertake the development and implementation of the promotioncampaign. Evaluation and monitoring of coverage would be integralcomponents of the campaign.

26. The project planning anticipates the value of field trips as follows:(i) by officials of DSSD, NUPjA and TANESCO to visit two or three reasonablysuccessful water and sewerage or water and power organizations indeveloping countries, particularly where there is a good joint billinigoperation; and (ii) for DSSD and ARDI officials to visit successfullow-cost sanitation prograums outside Tanzania. Project cost estirmatesinclude an allowance of TSh 175,000 (base prices) for such visits.

27. The education and training component of the project woulci includespecializedc training of professional and technical staff of DSSD (anaARDhl) in schools and universities approximately as follows:

(a) Civil Engineers - five for four years each abroad;

(b) Mechanical/Electrical Engineers - two for four years eachabroad;

(c) LCS Engineer - one for one year abroad;

(d) DSSD health educators - two for one year each abroad;

(e) ARDHI social scientist or health officer (for use in othercommunities) - one year abroad;

(f) DSSD Principal Accountant - one for six months abroad;

(g) Accountants - ten for three years each in Tanzania; and

(h) Technicians (various) - total of 40 for six months each inTanzania.

28. In addition to ti-e abKve, the counterpart staff of DSSD wouldreceive a total of about 30 months of experience working with agenciesresponsible tor sewerage and sanitation outside Tanzania and a total ofabout 6 months of short courses both inside and outside of Tanzaniia.

- 51 -

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T.b. 1. 88EiAZEDetalied Cst Tsble

(T81 '1000)

Qoatity BEse Costs Pthy. Da.Coat. Duty Tax S-Y

OrAdt 82/83 83/84 84/85 85/86 Tota UTit Cost 82/83 83/84 84/85 85/86 Total Rate Rate Rate A.anot

1. 1nEsPMl1 CD;BA. 9083A08 81A011S0ACLaI

1. RElBLns'1N8 ANI)I SERI VacE&fCi

(G01* 0185B ND. 1 1 - - 2 787.5 787.5 787.5 - - 1,575.0 0.05 0.2 0.25 VH7 TEN UIPTSCKX NO. 2 1 - - 3 315 630.0 315.0 - - 945.0 0.05 0.2 0.25 V81 TCN PIQ21P 110CX ND. 3 - - - 3 94.5 293.5 - - - 283.5 0.05 0.2 0.5 V80.5 TI VAN ND. 4 - - - 4 94.5 378.0 - - - 378.0 0.05 0.2 0.5 VH8000R ND. 1 1 - - 2 315 315.0 315.0 - - 630.0 0.05 0.2 0.25 VH

Rob-Total 8E11;1BILrkTICN ANDBINraWE VEHICII0 3 2,394.0 1,417.5 - - 3,811.5

2. RH401LTAOA08 0AID1BBBABILON AND

N CE BOUIP Al!IID5T - _ _ _ _ 7,862.4 - - - 7,852.4 0.05 0.2 0.3 HQNEW llrAKE AND lUErAR

SFA O57AIL AM - - -- -5,187.6 576.4 - 5,764.0 0.2 0.2 0 cIABILI2ATOaN POD3 A05 - - - --0577.8 4,622.4 577.8 - 5,778.0 0.1 0.2 0 01W WAT8 M1UNT - - - - - 4,625.0 9,250.0 4,625.0 - 18,500.0 0.2 0.2 0 c

8EPIA E BR M4I2 MMi T -…- 3,724.8 1,241.6 4,466.4 0.1 0.44 0 C0(11ACE 105l350 188 - - _ _…- 2,311.1 2,311.1 - 4,622.2 0.1 0.44 0 0QEa5 N5D 1EPAIR

P13 tIAI2 AND 1E183 S511-T - -- 5,232.0 5,232.0 - 10,464.0 0.1 0.2 0 c

Rob-Toto1 RE010B1LITATIN AND 6N191N1 13,065.2 30,327.9 14,563.9 - 57,957.0

RobTotal 8EiG5 8RE8BILXA1TID 15,439.2 31,745.4 14,563.9 - 61,768.5B. 01M OaONYIPION

1s0D1BEA0151E la AltllhT … … … … … 1,191.8 4,171.3 595.9 - 5,959.0 0.1 0.2 0 0MERaVECr 8HDPa AMa0 - - - - … … - 1,149.5 1,149.5 - 2,299.0 0.1 0.2 0 cVE00C0B IEPC08 /E EAlllh - - - - - 649.5 649.5 - 1,299.0 0.1 0.2 0 CSEBVICE 10DN) NS NO. - 290 290 - 58D 11.88 - 3,445.2 3,445.2 - 6,890.4 0 0.44 0 a

Rob-Total pmS a rIaCE1I 1,191.8 9,415.5 5,840.1 - 16,447.4C. Oll EWIIlTm

EXQUP ANqD FUlRNr1UW FOR

HEEDYR8 AND810001830 6HDP 13 A- - …247.5 495.0 247.5 - 990.0 0.1 0.2 0.5 BO

IAHF1/a Affl25T - - - - -…- 352.5 1,057.5 - 1,410.0 0.1 0.2 0.5 HQCOMPUTER TEL /o A10 - - …195.0 195.0 - - 39D.0 0.10.2 0 BO

Rob-Total a0E0 11E0 1 442.5 1,042.5 1,305.0 - 2,790.0D. 01086V1110LES /b

00 V8HA ND. 2 - _ - 2 95.4 198.8 - - - 190.8 0.05 0.2 0.3 V8D1E4E CAB PICISIP ND. 2 2 - - 4 94.5 1890. 189,0 - - 378.0 0.05 0.2 0.5 V8

1828ND1 ND. 1 1 - - 2 233.5 253 5 25335 - - 507.0 0.05 0.2 0.5 V1:-DPEDS ND: 2 2 - - 4 18.9 37.8 37.8 - - 75.6 0.05 0.2 0.5 V8

SRb-Total OT3ER V8ICIES /b 671 1 480.3 1 _ 1,151.4E. 0AND 1a 62 1,6C0 400 - - 2,010 1.5 2,40050 605.0 - - 3,000 0 5 0 0 1A

F. 81101EE3811801DT0N AH183 - - - _…3,425.8 4,276.0 855.2 - 8,552.0 0.1 0.2 0 E0

Oi1 8mNIEUC11N Aa1/ - - _ _ _378.4 473.0 94.6 - 946.0 0.1 0.2 0 E2813T111 l/ AMOUNT -…60.0 90.0 - - 150.0 0.10.2 0 08EG

8ESla8D SING2 Al= - - … -3,172.5 3,172.5 - 6,345.0 0.1 0.2 0 EROIER 0011130 A8 - -_0…- - 5,50C.0 - 5,500.0 0.1 0.2 0 CR

Rob-Total E1100IN81 3,859.2 8,011.5 9,622.3 - 21,493.0

Total I86 T mET8 24,023.8 51,295.2 31,331.3 - 106,650.3

IL. aT EC AS.87L511ZNCA. 10N1087 STAFF AND A1 ISCR

1. A8E/

PFDaE81T M}/ l10101 12 12 12 8 44 41.4 496.8 446.8 496.8 331.2 1,821.6 0.05 0.2 0 TA2. 1DSS

G ISR l/a IQ5T1 4 12 12 8 36 41.98 167.9 503.8 503,8 335.8 1,511 3 0.05 0.2 0 TAP00NC81 M1(8 /a 10101 4 12 12 8 36 37.52 150.1 450.2 650.2 300.2 1,350.7 0.05 0.2 0 TA83831/6811M32 KIAT811 - 15 12 6 25 72.6 - 871.9 871.9 436.0 2,1798. 0.05 0.2 0 TA

=FORT/E/IIIP 08/a 1 4 12 8 - 24 21.14 84.6 253.7 169.1 - 507.4 0.05 0.2 0 TAmM&8Bc1iCCAL E0/ /e ICT 4 12 8 - 24- 56.16 224.6 673.9 449.3 - 1,347,8 0.05 0.2 0 TATRAININ CFET(Fi2 1/ 10801 4 12 12 8 36 31.6 126.4 379.2 379.2 252.8 1,137.6 0.05 0.2 0 TAIEI:5L ADVISCa /1001 2 2 2 - 6 21 42.0 42.0 42.0 - 126.0 0,05002 0 TA

8T13 FEB/a YNNH 4 12 12 8 36 29.76 119.0 357.1 357.1 238.1 1,071.4 0.05 0.2 0 TA

ob-Total D888 914.6 3,531.8 3,222.6 1,562.8 9,232.0

Rob-Total m)N0180T ErAEF AND AV800 1,411.4 4,028.6 3,719.4 1,894.0 11,053.6B. TRAI6D1

FIELD TRP8 Aa - - - - 26.7 - - - 26.7 0.1 0 0 11NRWB A.PORO 01FF/a AM18 - - … 338.7 1,016.3 - - 1,355.0 0.1 0 0 TRNR(111L PE831011O1L DBTICN/K AM8U1T -…362.0 362.0 362.0 362.0 1,448.0 0.1 0 0 10N

AClWTAlNSa 1 88301067.3 157. 157.5 67.5 450.0 0.1 0 0 TEN140ICIAN8110 A/T -88310…- 914.0 925,0 - 1,850.0 0.1 0 0 TRNsa N1ta A1a - - - - - - 250.0 250.0 - 54.0 0.1 0 0 TEN

ob-Total 102N10L 795.0 2,710.8 1,694,5 429.5 5,629.7C. 115NZO PFF ta A8 - -1-6,580.0 - - - 6,580.0 0 0 0 PPR

Total TE1INCAL A5151ANC8 8,786.4 6,739.4 5,413.9 2,323.5 23,263.3

Total B1SE0INB 0)0 32,810.2 53,034.6 36,745.2 2,323.5 129,913.6

Evbear 20, 1952

- 52 -

TW191A AMEX 3DTR ES 881f 8DR3 8 AND 08t8 A4 8P P.W 2 oc 10

Tal 2, 0.8106N86tdl51 Qoso Th8,le

(TSI '100)Ou"ty b O uts Phy. D.

Gont. IDtY Ta S8i7Ikdt 82383 83/84 84/8585/86 Total llolt Cot 82/83 83/84 84/85 85/86 Tota Rat 8te BatR Accwtn

1. C1D 6

A. 02E93rN

Btu52C NO. 15 245 420 20 7D0 3.4 51.0 833.0 1,428.0 680 2,380.0 00.2 0 86anuWrm ND. 30 550 970 50 1,6C0 3.8 114.0 2,030.0 3,686.0 190.0 6,030.0 0 0.2 0 8208411 841BC NO. 4 70 120 6 2D0 5.8 23.2 406.0 696.0 34.8 1,160.0 00.2 0 00D1O1E 01589WllION NO. 2 35 60 3 100 6.4 12.8 224.0538.0 19.2 640.0 00..2 0 Co

m 8Fw8 ND. - 35 65 - 110 3.9 - 136.5 253.5 - 390.0 0 .2 0 cODD8I S KM 1N. - 10 550 50 900 0.6 - 184.0 33.0 30.0 540.0 0 .2 0 co5E80081tT10N4YAWS lu 19080 - - - - 6.2 7D.2 4.7 3 1,0 00.2 0 829360 iN. - 100 - -182 5.8 - 0.0 - - 38D.0 0 .2 0 CD

S6b-Tota 1A5M 287.2 4,269.7 6,782.2 342.0 11,601.0

2. 1184IN S1145 ND. - 3 3 - 6 214.16 - 642.5 642.5 - 1,285.0 0.1 0.2 0 82

3. 0m81 OC IN010DS5D 8083U A1 A113 -a - - - - 112.1 392.3 56.0 - 560.4 0.1 0.2 0 CDII2C2RIC8 6L /a 1… ma 0286.0 238.0 576.0 0.1 0.2 0 8O7EC1111IERIL5 /e A5- _ _- 1,512.0 1,512.0 - 3,024.0 0.1 0.2 0 82I FELD CFFICE AM - - - … 720.1 - - - 720.1 0.1 0.2 0 82

Sub-Total 11 CN661511320N 832.1 2,192.3 1,856.0 - 4,820.5

Sob tal 00611106N 1,059.3 7,104.4 9,280.7 342.0 17,766.5 1B. ET

BF5T181 AND 2 R.5 E;RF3AD1W2 198D

.1/E18C 91P /. A*821… -27.3 54.6 27.3 - 109.2 0.1 0.2 0.5 8D1al Bl }M2t /a A0 - -1…- 36.8 110.3 - 147.1 0.1 0.2 0.5 8D

CCtfUI 6 T 8i/aL 8AM8 - - …195.0 195.0 - 390.0 0.1 0.2 0 EO

&6-5'ta1 37u082 222.3 2B6.4 137.6 - 646.3

C. V811CLES /b1. PIT 8YI15113

4IITON 1O. 7 7 - 14 109.78 765.7 765.7 - - 1,531.3 0.05 0.2 0.5 V50N47 NO. - 8 8 - 16 1,095 91.3 8,760.0 8,760.0 - 17,611.3 0. 0.2 0.25 VH

6-utal PIT 5fTlND 856.9 9,525.7 8,760.0 - 19,142.6

2. a7181)888 84. 1 - - - 1 95.4 95.4 - - - 95.4 0.05 D.2 0.5 V3U119811 NO 2 1 - 3 253.5 507.0 2 5 - - 7605 0.05 0.2 0.5 V8I 82401358P 10. 2 1 - - 3 94.5 189.0 94.5 - - 203.5 0.85D22404 86INo= ND. 3 3 - - 6 18.9 56.7 56.7 - - 113.4 0.05 0.2 0.5 VEBIC0188 10. 6 6 - - 12 2.556 15.3 15.3 - - 3.7 0.05 .2 0.5 V8

S6WT.t01 am1 863.4 420.0 - - 1,283.5

Sub-T<tal VE8D58 /b 1,720.3 9,945.7 8,760.0 - 20,426.0

D. 1.410/ .2 88D 220 - - 1,100 1.5 1,320.0 330.0 - - 1,650.0 0.1 0 0 1*

e. 8EN019N18183 0OIN90 AYIT - - - - -522 65.2 13.1 - 130.5 0.1 0.2 0 Er

0 C N 10008118 AM/ - - - -a 202.5 253.1 50.6 - 56.2 0.1 0.2 0 10ElplFIF5T AY0-8 - - - -4!…6.5 9.8 - - 16.4 0.1 0.2 0 10VIEICIIS A* - - - - -…482.0 328.0 - - 870.0 0D.2 0 10R

8bTotal EN2LEERlli 741.2 648.2 63.7 1,453.1

Totl 7 T0 OE05 5,043.2 18,314.7 18,242.0 342.0 41,941.9

II. TINCSL ASSl£YiCEA. O11R45T 67! AM Ibt FSl

A.nlP12 Ka1s moml8 12 12 12 8 44 4.6 55.2 55.2 55.2 36.8 202.4 0.5 0.2 0 TAus REM8 1t8a 6 12 12 6 36 46 276.0 552.0 552.0 26.0 1,656.00.05 0.2 0 28mL8J1 bS YIT 4 12 12 8 36 46 184.0 552.0 552.0 368.0 1,656.0 0.05 0.2 0 TA

8&-Tot AlM 515.2 1,1592 1,19.2 684.8 3,514.4

2. DMB_ MR Him -13 4 12 12 8 36- 41.98 167.9 503.8 503.8 335.8 1,511.3 0.2 0.2 0 TA

FII aL tUI/. JIIIY 4 12 12 8 36 37.52 150.1 450.2 450.2 3D0.2 1,50.7 0.05 0.2 0 TA84DX1IION MR "M 4 12 12 8 36 66.1 264. 793.2 793.2 527.8 2,379.6 0.05 0.2 0 TAT8 hp/lqY11 /a JIIIE 4 12 8 - 24 49.12 196.5 589A 393.0 - 1,178.9 0.05 0.2 0 TAMW8ELEMUL EX /. 1Him 4 12 8 - 2 14.1 56.4 169.2 112.8 - 330.4 0.05 042 0 TAH8N1 CE1893 ION 2181.8 11M1 4 12 8 - 24 70.28 2B1.0 843.1 562.1 - 1.686.2 0.05 0.2 0 2kTRANI1 (EnceR /. IMnE 4 12 12 8 36 31.6 126.4 379.2 37942 252.8 1,137.6 0.05 0.2 0 TAlI41 tttl/ ISTII1 2 2 2 - 6 21 42.0 42.0 42.0 - 126.0 0.05 0.2 0 18

Sbl-Totl D1BD 1,284.7 3,77D.2 3,236.2 1,417.6 9,708.7

81-Tta CWI1T SW7 AND 1 BD1B 1,799S9 4,929.4 4,395.4 2,098.4 13,223.1

B. 01058248N82184 I 881.1108 0a -w 78D.3 78D.3 - - 1,560.6 0.1 0.2 0.5 TEN

C. TMDG80P08880/ 1*--- 26.7 - - - -2.7 0.1 0 0 TM888I80RI EbYS/s A - --…- … 338.7 1,016.3 - - 1,355.0 0.1 0 0 5EN4O41L PF41WL EY13DN /. *8- -- 362.0 362.0 362.0 362.0 1,448.0 0.1 0 0 U8NttD SI / A - - …67.5 157. 157.5 67.5 450.0 0.1 0 0 0T838008 A/8 - -- - - 925.0 925.0 -1,850.0 0.1 0 0 D8N18N A mm - _ _ _ _ 250.0 250.0 - 5D.0 0.1 0 0 0 8

856-Total 28P254110 795.0 2,710.8 1,694.5 429.5 5,629.7

D. P?8YFISW C/. R - - - - 2,820.0 - - -2,828.0 0 0 0 PB8

Total THI:AL A80112N8E 6,195.2 8,42D.4 6,089.9 2,527.9 23,233.4

Total B 8E 1101 11,238.4 26,755.1 24,3531.9 2,869.9 65,175.3

lb Additioa,l eh,3 1r to6 880"93 oR40nN14d I17N8514T

S ita 20, 1982

- 53 -

TANZANIA ANNEX 3DAR ES SAIAAM SEI*RACE AND SANITATION PaJE Page 3 of 10

Table 3. (Y1ER TRWICAL ASSIS)IKZDetailed Cost Table

(TSH '000)

Quantity Base Ccsts Phy. IDo.Unit Cont. Duty Tax Stmmxy

Unit 82/83 83/84 84/85 85/86 Total Ccst 82/83 83/84 84/85 85/86 Total Rate Rate Rate Accunt

I. lNVESIMT cMSA. TANESOD

aFE TIET44 AM3JNT - - - -…360.0 360.0 - - 720.0 0.1 0.2 0 EQB. N1WA

vi E TEREMIS AMI - - - - - 360.0 360.0 - - 720.0 0.1 0.2 0 HQ

Total INVESTHfU (SrS 720.0 720.0 - - 1,440.0

II. TRiNICAL ASSISrANCEA. TANESOD

1. FIE TRIPS AMUINr - - - - 60.5 - - - 60.5 0.1 0 0 TRN2. W¶JLiXANS

ACONrIM 1M= 3 3 - - 6 60 180.0 180.0 - - 360.0 0.1 0 0 TASYSTTh ANALYSIS NEtDNE 3 3 - - 6 60 180.0 180.0 - - 360.0 0.1 0 0 TA

Sub-Total (XNRLTANrS 360.0 360.0 - - 720.03. aAMERC&L TRAINI10 CFFIXER MaNm 4 12 12 8 36 56.6 226.4 679.2 679.2 452.8 2,037.6 0.05 0 0 TM

Sub-Total TANES' 646.9 1,039.2 679.2 452.8 2,818.1B. NDUR

FELf) TRIPS AMT - - - - - 60.5 - - - 60.5 0.1 0 0 TRNTLTANS MNT… - - - - - 6,720.0 6,720.0 - - 13,440.0 0.1 0 0 TA

Sub-Total NU1A 6,780.5 6,720.0 - - 13,500.5

Total TEC1,ICAL ASSISTANCE 7,427.4 7,759.2 679.2 452.8 16,318.6

Total BASINE COSrS 8,207.4 8,539.2 679.2 452.8 17,878.6

September 20, 1982

- 54 -

TANZANIA ANNEX 3DAR ES SAIAAM SEERtACE AND SANITATION PFLaJECT Page 4 of 10

Stmnary Acouxnt by Time(TSH Million)

BaseCosts +Price

Cont. onBase

Base Costs Ccsts Foreign Emxchage

82/83 83/84 84/85 85/86 Total Million) % AMDunt

I. S[MAY AOOOLNT

LAND 3.7 0.9 - - 4.7 0.5 0.0 0.0ODNSnUCIN 7.4 46.8 29.7 0.3 84.3 11.1 32.4 27.3

EWRTPIXNM 9.3 2.1 1.4 - 12.9 1.5 61.5 7.9VEHICLES 4.8 11.8 8.8 - 25.4 3.1 62.2 15.8¶RXAINfLN 2.7 6.9 4.1 1.3 15.0 L.9 57.9 8.7PPF REFINANGII 9.4 - - - 9.4 [.0 100.0 9.4TEQINICAL ASSISTANCE 10.3 16.0 8.1 4.0 38.4 4.8 59.9 23.0EWGINEERlM 4.6 8.7 9.7 - 22.9 2.9 44.6 10.2

Total BASELINE CWSTS 52.3 93.3 61.8 5.6 213.0 26.9 48.1 102.4Physical Contingencias 3.6 8.8 4.8 0.3 17.6 - 48.8 8.6Price Contirgencia 2.4 17.8 20.4 2.3 43.0 - 31.6 13.6

Total D1UhJDING ONrINENCIES 58.3 120.0 87.0 8.3 273.5 26.9 45.5 124.5

Taxmes 7.4 13.4 10.1 0.6 31.5 - 0.0 0.0Foreign Exdiange 34.1 52.2 33.7 4.6 124.5 - 0.0 0.0

- 55 -

ANNEX 3Page 5 of 10

TANZANIADAR ES SAIAAM SEARA(E AND SANTlATION PRDJ=CT

Project Ccxponernt by Tfri(TSH Million)

TotalBase Cests

(US$82/83 83/84 84/85 85/86 TSH Milix)

A. SE1EA4E 32.8 58.0 36.7 2.3 129.9 13.8B. SANITATION 11.2 26.7 24.3 2.9 65.2 6.9C. OTMER TEMNICAL ASSISTANCE

TANESWD 1.0 1.4 0.7 0.5 3.6 0.4NUWA 7.2 7.1 - - 14.3 1.5

Sub-Total OlER aII CAL ASSISrANCE 8.2 8.5 0.7 0.5 17.9 1.9

Total BASELINE COSTS 52.3 93.3 61.8 5.6 213.0 22.7Physical Contingncies 3.6 8.8 4.8 0.3 17.6 1.9Price Contirgencies 2.4 17.8 20.4 2.3 43.0 4.6

Total PR= CODSrS 58.3 120.0 87.0 8.3 273.5 29.1

Taxes 7.4 13.4 10.1 0.6 31.5 3.4Foreign ExchanF 34.1 52.2 33.7 4.6 124.5 13.2

Septenber 20, 1982

- 56 -

ANNEX 3Page 6 of 10

TANZAMADAR ES SAIAAM SEIERAIE AND SANITAION PROE31CT

Summry Account by Project Ccuponent(TSH Million)

(IHER TECHNCAL PhysicalASSISTANCE Contirgencies

SEWERAGE SANTATICON TANESX NUIA Total % Anount

I. SEMAR ACOLUNT

LAID 3.0 1.7 - - 4.7 3.5 0.2OJNSJCIWN 66.5 17.8 - - 84.3 10.7 9.0EqTRIPM 10.7 0.6 0.8 0.8 12.9 6.9 0.9VEHICLES 5.0 20.4 - - 25.4 5.0 1.3TRAINIWh 5.6 7.2 2.1 0.1 15.0 9.3 1.4PPFREFIN iN311 6.6 2.8 - - 9.4 0.0 0.0TE1HNICAL ASSISTANE 11.1 13.2 0.7 13.4 38.4 6.8 2.6EW&INEMW, 21.5 1.5 - - 22.9 9.7 2.2

Total BASELINE (OSTS 129.9 65.2 3.6 14.3 213.0 8.3 17.6Physical Contingencies 12.6 3.3 0.3 1.4 17.6 0.0 0.0Price Contirgencies 26.3 14.3 0.7 1.7 43.0 7.6 3.2

Total INaWDIN CONTNEINMS 168.8 82.7 4.6 17.4 273.5 7.6 20.8.~~~ _

Taxes 19.4 11.8 0.1 0.1 31.5 7.2 2.3Foreign Excwg 75.2 35.6 2.8 10.8 124.5 7.8 9.7

57 - ANNEX 3Page 7 of 10

TANZANIA

DAR ES SALAAM SEWERAGE AND SANITATION PROJECT

Cost Estimates

Assumptions & Procedures

1. Exchange Rate: US$ = TSh 9.40

2. Base Date for Estimates: July 1, 1982

3. Base Cost Estimates:

(i) Except at noted otherwise, unit prices are from costs ofrecent works, quotations from suppliers and review ofmarket prices by HHP as of July 1980 and subsequentlyreviewed, and in some cases revised, by ARDHI and theappraisal team. These have been increased to July 1, 1982prices by price contingency factors of 44% (25% in 1980/81 and15% in 1981/82) for local currency costs and 18.8% (10% in1980/81 and 8% in 1981/82) for foreign exchange costs.

(ii) The costs of low-cost sanitation components are based ondetailed quantity take-offs and equipment lists prepared byARDHI and a pilot construction program for pit latrines carriedout in 1982.

(iii) The costs of clearing, cleaning and repair of existing sewersand pumping mains was not estimated by HHP. These costs wereestimated by ARDHI, in consultation with the appraisal team,using an approximate inventory of existing sewers and mains,the lengths requiring various types of work (from merecleaning to total replacement) and the unit cost of suchwork as a percentage of the cost of new sewers and mains (fromabout 7.5% for only cleaning to 150% for replacements).Because of the nature of this part of the rehabilitation work,the estimated costs can not be made more reliable until thework actually begins. On the other hand, costs of rehabi-litating visible parts of the sewerage system (pumpingstations, stabilization ponds, sea outfall, et cetera) arebased on fairly detailed replacement equipment lists andquantity take-offs.

- 58 -ANNEX 3Page 8 of 10

(iv) The costs of buildings and related equipment an-d furnishingsfor DSSD are based on ARDHI estimates of space requirements.Land compensation costs are similarly based. The requirementsfor pit eraptying vehicles were determined by HIP. Therequirements for other vehicles for DSSD operations and for useby ARDHI for project management have been estimated by ARDHI.The unit prices for vehicles are based on July 1982 quotationsby local dealers.

(v) The staff months and unit costs of engineering for seweragerehabilitation are based on a firm current consultingcontract for this work. Engineering costs for design andconstruction supervision of buildings and dumping stations areestimated at 10% of the base costs of those structures (4% fordesign and 6% for supervision). Engineering assistance withthe repair of existing and the purchase of new pit emptyingvehicles has been assumed to be 5% of the base costs.The base costs of detailed design of a Stage II project havebeen calculated at 4% of a Tsh 160 million project (at baseJuly 1, 1982 prices). Except for sewerage rehabilitationengineering (existing contract) engineering expenditures havebeen assumed to be divided equally between local currency andforeign exchange. It has been assumed there would be noadditional engineering costs for low-cost sanitation units,'ordinary vehicles or sewer service connections since design,procurement and supervision would be done by technical staff ofARDHI and DSSD whose costs are included in the estimates undertechnical assistance.

(vi) The estimated costs of technical assistance for ARDHI and forthe development of DSSD are based on the numbers and grades ofexpatriate staff required to fill key posts through the projectperiod and unit costs derived from a firm contract proposal toprovide the staff and on existing contracts AKDHI has withexpatriate staff. Training costs are based on a review ofcurrent overseas training costs of professionals sponsored byWHO and UNDP and on local training costs for accountants andtechnicians (TANESCO School and ARDHI Institute).

4. Import Duties and Local Taxes

(i) It is assumed that import duties and other local taxes will bepayable for all goods and used in the project. Customs dutiesand sales taxes used in the cost estimates are those reportedfor July, 1982.

- 59 -

ANNEX 3Page 9 of 10

Import Duty(a) Passenger vehicles with engines over 2250 cc. 120%(b) Pipe and materials 15%(c) All other vehicles, equipment, appliances,

furnishings and spare parts 20%

Sales Tax (on CIF + duty + domestic value added)(a) Construction contracts on value added none(b) trucks and other heavy rolling equipment 25%(c) light trucks, vans, passenger vehicles, mopeds

and bicycles 50%(d) spare parts for above 50%(e) pumping euqipment and spares none(f) general equipment 30%(g) air conditioners 75%(h) other appliances and office equipment 50%(i) pipe 25%

(ii) Local taxes on salaries of consultants and expatriate contractstaff of ARDHI and DSSD are based on the tax regulations asapplied in July, 1982; the foreign component of salaries andfees are taxed at 20%.

5. Physical Contingencies

(i) The following allowances for physical contingencies have beenused:

(a) program items (latrines and sewer service connections): none(b) vehicles, rehabilitation and maintenance equipment

and contract staff and advisors: 5%(c) construction (including half of rehabilitation work),

equipment and furnishings not included above,land, engineering and training: 10%

(d) half of rehabilitation work: 20%

6. Price Contingencies

(i) All expenditures are assumed to be made at mid fiscal year(January 1).

(ii) Price contingencies are applied to the total of all other costs(base + physical contingencies).

(iii) The price contingency allowances are also applied toall components classified as "Technical Assistance" exceptrefinancing of the PPF.

-60- ANNEX 3Page 10 of 10

(iv) For local currency and foreign exchange costs t:he contingencyallowances are:

Fiscal Year 82/83 83/84 84/85 85/86

local % 15.0 16.0 13.0 12.0foreign % 8.0 8.0 7.5 7.0

(v) Local duties and taxes on imports are escalated at the samerate as foreign exchange costs.

(vi) Cumulative escalation factors from July 1, 1982:

FY82/83 FY83/84 FY84/85 FY35/86(1/1/83) (1/1/84) (1/1/85) (1,/1/86)

Local: 0.075 0.242 0.421 0.598Foreign: 0.040 0.123 0.210 0.298

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_ _ _ I I I L - ~~~I 1 - L--7a

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-62 - ANNEX 5

TANZANIA

DAR ES SALAAM SEWERAGE AND SANITATION PROJECT

Proposed Allocation of Credit Proceeds

Amount of theCredit Allocated Plercent of(Expressed in Expenditures

Category Dollar Equivalents) to be Financed

(1) Equipment, Furnishingsand Vehicles except ].00% of foreignfor NUWA 3,500,000 expenditures and

'50% of localexpenditures.

(2) Civil Works 8,600,000 1.00% of foreignexpenditures and80% of localexpenditures

(3) Consulting Services, 1L00% of foreignTechnical Assistance and expenditures andTraining except for NUWA 6,000,000 80% of local

expenditures

(4) Technical Assistance ]L00% of foreignand Equipment for NUWA 1,600,000 expenditures and

80% of localexpenditures

(5) Refunding of Project 1,000,000Preparation Advance

(6) Unallocated 1,800,000

22,500,000

- 63 - ANNEX 6

TANZANIA

DAR ES SALAAM SEWERAGE AND SANITATION PROJECT

Estimated Schedule of Disbursements from Credit

IDA Fiscal Year Disbursement Accumulated Cumulative

and Quarter Ending During Quarter Disbursements Percent Disbursed

1983December 31, 1982 0.0 0.0 0March 31, 1983 1.0 1.0 4June 30, 1983 0.7 1.7 8

1984September 30, 1983 1.0 2.7 12December 31, 1983 1.1 3.8 17March 31, 1984 1.3 5.1 23June 30, 1984 1.5 6.6 29

1985

September 30, 1984 1.5 8.1 36

December 31, 1984 1.6 9.7 43March 31, 1985 1.7 11.4 51

June 30, 1985 1.6 13.0 58

1986

September 30,'1985 1.6 14.6 65December 31, 1985 1.3 15.9 71

March 31, 1986 1.3 17.2 76June 30, 1986 1.1 18.3 81

1987

September 30, 1986 1.0 19.3 86December 31, 1986 0.9 20.2 90March 31, 1987 0.8 21.0 93June 30, 1987 0.6 21.6 96

1988

September 30, 1987 0.5 22.1 98December 31, 1987 0.4 22.5 100

22.5

Assumptions: PPA advance repaid in quarter ending March 31, 1983. Initial

disbursements for project implementation during secondquarter following approval. Closing date is December 31,

1987.

- 64 ANNEX 7Page 1 of 3

TANZANIA

DSSD LOW COST SANITATION SERVICES

FINANCIAL FORECASTS 1983 - 1987

INCOME STATEMENT( TSHS,THOUSANDS)

1983 1984 1985 1986 1987

INCREASE IN LOADS % 0.00 66.67 12.00 0.00 0.00NUMBER OF LOADS 36990 61650 69048 69048 69048AVE PRICE/LOAD 74.9932 180.5515 244.0187 297.2425 318.6479

REVENUE 2774 11131 16849 20524 22002INTEREST 11 287 973 1463 1484

TOTAL REVENUES 2785 11418 17822 21987 23486

OPERATING EXPENSES

VEHICLE FUEL 511 995 1382 1506 1642FUEL/BULK POWER 511 995 1382 1506 1642

VEHICLE MAINT 476 583 1891 2772 3021PERSONNEL COST 2125 3823 4168 4543 4952ADMINSTRATION 313 540 744 882 962OPERATIONS 2914 4946 6803 8197 8935DEPRECIATION 1727 3746 5353 6608 7203

TOTAL EXPENSES 5152 9687 13538 16311 17780

OPERATING INCOME -2367 1731 4284 5676 5706

NET INCOME BEFORE- INTEREST -2367 1731 4284 5676 5706

INTEREST 269 1731 4284 5676 5706

- CHRGD OPERATIONS 269 1731 4284 5676 5706

NET INCOME -2636 0 0 0 0

RETAINED EARNINGS -2636 0 0 0 0

RATE BASE 13307 29087 50156 65204 69559RATE OF RETURN % -17.8 6.0 8.5 8.7 8.2OPERATING RATIO % 185.0 84.8 76.0 74.2 75.7

-65- ANNEX 7Page 2 of 3

TANZANIA

DSSD LOW COST SANITATION SERVICES

FINANCIAL FORECASTS 1983 - 1987

FUNDS FLOW STATEMENT( TSHS,THOUSANDS)

1983 1984 1985 1986 1987 TOTALINTERNAL SOURCES

- OF FUNDSOPERATING INCOME -2367 1731 4284 5676 5706 15030

DEPRECIATION 1727 3746 5353 6608 7203 24637OTHER SOURCES 1 3 87 373 566 559 1588

TOTAL INTERNAL- FUNDS -637 5564 10010 12850 13468 41255

OPERATIONAL- REQUIREMENTS

INCREASE/DECREASE- WORKING CAPITAL 905 819 598 463 371 3156

INTEREST CHARGED- OPERATIONS 269 1731 4284 5676 5706 17666

DEBT REPAYMENT 0 0 0 0 2075 2075OTHER PAYMENTS 223 5303 9636 547 0 15709

TOTAL OPERATIONAL- REQUIREMENTS 1397 7853 14518 6686 8152 38606

INTERNAL FUNDS- AVAILABLE FOR- INVESTMENT -2034 -2289 -4508 6164 5316 2649

CAPlTAL INVESTMENT__________________

TOTAL CONSTRUCTION 12104 27632 236U7 3b98 0 67041

TOTAL CAPITAL- INVESTMENT 12104 27632 23607 3698 0 67041

BALANCE TO BE- FINANCED 14138 29921 28115 -2466 -5316 64392

FINANCED BY__________

BORROWINGS 4906 21662 24755 547 0 51870EQUITY 9800 11273 3590 0 0 24663

TOTAL CAPITAL- SOURCES 14706 32935 28345 547 0 76533

CASH INCREASE/- DECREASE 568 3014 230 3013 5316 12141

CASH AT BEGINNING- OF YEAR 0 568 3582 3812 6825 0

CASH AT YEAR END 568 3582 3812 6825 12141 12141

ANNUAL DEBT SERVICE- COVERAGE -2.4 3.2 Z.2 2.2 1.7 2.0ANNUAL CONTBN- TO CONSTRUCTION -16.8 -8.3 -19.1 166.7 0.0 4.0

-66 - ANNEX 7Page 3 of 3

TANZANIA

DSSD LOW COST SANITATION SERVICES

FINANCIAL FORECASTS 1983 - 1987

BALANCE SHEETS( TSHS,THOUSANDS)

1983 1984 1985 1986 1987ASSETS

FIXED ASSETS -____________

PLANT IN SERVICE 22285 48088 74662 92165 100460LESS: DEPRECIATION 4025 8174 14263 22155 31352

OPERATING PLANT 18260 39914 60399 70010 69108

WORK IN PROGRESS 1306 5364 6725 -360 -360

CURRENT ASSETS______________

CASH 568 3582 3812 6825 12141INVENTORIES 1114 2404 3733 4608 5023

TOTAL 1682 5986 7545 11433 17164OTHER ASSETS 220 5436 14699 14680 14121

TOTAL ASSETS 21468 56700 89368 95763 100033

EQUITY AND- LIABILITIES______________

EQUITY

PAID IN CAPITAL 18154 29427 33017 33017 33017RETAINED EARNINGS -2636 -2636 -2636 -2636 -2636

REVALUATION RESRVE 835 2661 6253 11689 17990

TOTAL EQUITY 16353 29452 36634 42070 48371

LONG TERM DEBT

DEBT DUE 4906 26568 51323 51870 49795

CURRENT- LIABILITIESAAB_29811_818

PAYABLES 209 680 1411 1823 1867

TOTAL 209 680 1411 1823 1867

TOTAL EQUITY AND- LIABILITIES 21468 56700 89368 95763 100033

DEBT % OF- DEBT + EQUITY 23.1 47.4 58.4 55.2 50.7

CURRENT RATIO 8.0 8.8 5.3 6.3 9.2

- 67 -

ANNEX 8Page 1 of 3

TANZANIA

DSSD SEWERAGE

FINANCIAL FORECASTS 1983 - 1987

INCOME STATEMENT( TSHS,THOUSANDS)

1983 1984 1985 1986 1987

CONNECTIONS INCREASE % 0.00 5.00 4.76 4.55 4.35NUMBER OF CONNECTIONS 5800 6090 6380 6670 6960AVE PRICE/YEAR (TSH) 146 656 5464 5464 5464REVENUE 847 4000 34863 36447 38032

TOTAt REVENUES 847 4000 34863 36447 38032

OPERATING EXPENSES

PERSONNEL COST 3045 4466 4868 5307 5784PLANT MAINT 0 0 2076 2263 2466FUEL 160 517 643 704 765TRANSPORT MAINT. 170 476 633 690 752ELECTRICITY 0 346 754 822 896ADMINISTRATION 390 660 984 1073 1169OPERATIONS 3765 6465 9958 10859 11832DEPRECIATION 4478 5357 9161 10300 11451

TOTAL EXPENSES 8243 11822 19119 21159 23283

OPERATING INCOME -7396 -7822 15744 15288 14749

NET INCOME BEFORE- INTEREST -7396 -7822 15744 15288 14749

INTEREST 1262 5677 10565 12300 12300

- CHRGD OPERATIONS 1262 5677 10565 12300 12300

NET INCOME -8658 -13499 5179 2988 2449

RETAINED EARNINGS -8658 -13499 5179 2988 2449

RATE BASE 63824 72497 139546 209321 222712RATE OF RETURN % -11.6 -10.8 11.3 7.3 6.6OPERATING RATIO % 973.2 295.6 54.8 58.1 61.2

-68- ANNEX 8Page 2 of 3

TANZANIA

DSSD SEWERAGE

FINANCIAL FORECASTS 1983 - 1987

FUNDS FLOW STATEMENT( TSHS,THOUSANDS)

1983 1984 1985 1986 1987 TOTALINTERNAL SOURCES- OF FUNDSOPERATING INCOME -7396 -7822 15744 15288 14749 30563DEPRECIATION 4478 5357 9161 10300 11451 40747CONSUMERS CONTBNS 0 4056 4500 5000 5550 19106

TOTAL INTERNAL- FUNDS -2918 1591 29405 30588 31750 90416

OPERATIONAL- REQUIREMENTS______________

INCREASE/DECREASE- WORKING CAPITAL 586 -2208 7196 -788 1-127 6113INTEREST CHARGED- OPERATIONS 1262 5677 10565 12300 12300 42104DEBT REPAYMENT 0 0 0 0 4473 4473

TOTAL OPERATIONAL- REQUIREMENTS 1848 3469 17761 11512 18].00 52690

INTERNAL FUNDS- AVAILABLE FOR-- INVESTMENT -4766 -1878 11644 19076 13650 37726

CAPITAL INVESTMENT

TOTAL CONSTRUCTION 36500 76120 52791 77980 69630 313021

TOTAL CAPITAL- INVESTMENT 36500 76120 52791 77980 69630 313021

BALANCE TO BE- FINANCED 41266 77998 41147 58904 55980 275295

FINANCED BY

BORROWINGS 22954 57321 31544 0 0 111819EQUITY 18618 21300 9808 62384 55704 167814

TOTAL CAPITAL- SOURCES 41572 78621 41352 62384 55704 279633

CASH INCREASE/- DECREASE 306 623 205 3480 -276 4338

CASH AT BEGINNING- OF YEAR 0 306 929 1134 4614 0CASH AT YEAR END 306 929 1134 4614 4338 4338

ANNUAL DEBT SERVICE- COVERAGE -2.3 -0.4 2.4 2.1 ..6 1.5ANNUAL CONTBN- TO CONSTRUCTION -13.1 -2.5 22.1 24.5 19.6 12.1

- 69 -

ANNEX 8Page 3 of 3

TANZANIA

DSSD SEWERAGE

FINANCIAL FORECASTS 1983 - 1987

BALANCE SHEETS( TSHS,THOUSANDS)

1983 1984 1985 1986 1987ASSETS

FIXED ASSETS

PLANT IN SERVICE 182856 Z13671 363819 409037 454783LESS: DEPRECIATION 115295 132182 153239 177331 204742

OPERATING PLANT 67561 81489 210580 231706 250041

WORK IN PROGRESS 30557 94148 16021 81527 142224

CURRENT ASSETS

CASH 306 929 1134 4614 4338INVENTORIES 2743 3205 5457 6136 6822RECEIVABLES 141 667 5812 6076 6340

TOTAL 3190 4801 12403 16826 17500

TOTAL ASSETS 101308 180438 239004 330059 409765

EQUITY AND- LIABILITIES

EQUITY

PAID IN CAPITAL 78705 100005 109813 172197 227901RETAINED EARNINGS -8658 -22157 -16978 -13990 -11541REVALUATION RESRVE 6009 12765 19734 37883 57411

TOTAL EQUITY 76056 90613 112569 196090 273771

LONG TERM DEBT______________

DEBT DUE 22954 80275 111819 111819 107346

CURRENT- LIABILITIESPAE_284465460

PAYABLES 2298 5494 5695 7426 7049

TOTAL 2298 5494 5695 7426 7049

CONSUMERS CONTBNS 0 4056 8921 14724 21599

TOTAL EQUITY AND- LIABILITIES 101308 180438 239004 330059 409765

DEBT % OF- DEBT + EQUITY 23.2 47.0 49.8 36.3 28.2CURRENT RATIO 1.4 0.9 2.2 2.3' 2.5

- 70 -ANNEX 9

Page 1 of 3

TANZANIA

SEWERAGE SECTOR CONSOLIDATION

FINANCIAL FORECASTS 1983 - 1987

INCOME STATEMENT( TSHS,THOUSANDS)

1983 1984 1985 1986 1987

REVENUE 3621 15131 51712 56971 60034INTEREST RECEIVABLE 11 287 973 1463 1484

TOTAL REVENUES 3632 15418 52685 58434 61518

OPERATING EXPENSESTRANSPORT FUEL 511 995 1382 1506 1642OPERATIONS 6679 11411 16761 19056 20767DEPRECIATION 6205 9103 14514 16908 18654

TOTAL EXPENSES 13395 21509 32657 37470 41063

OPERATING INCOME -9763 -6091 20028 20964 20455

NET INCOME BEFORE- INTEREST -9763 -6091 20028 20964 20455

INTEREST 1531 7408 14849 17976 18006

- CHRGD OPERATIONS 1531 7408 14849 17976 18006

NET INCOME -11294 -13499 5179 2988 2449

RETAINED EARNINGS -11294 -13499 5179 2988 2449

RATE BASE 77131 101584 189702 274525 292271RATE OF RETURN % -12.7 -6.0 10.6 7.6 7.0OPERATING RATIO % 368.8 139.5 61.9 64.1 66.7

-71- ANNEX 9

Page 2 of 3TANZANIA

SEWERAGE SECTOR CONSOLIDATION

FINANCIAL FORECASTS 1983 - 1987

FUNDS FLOW STATEMENT( TSHS,THOUSANDS)

1983 1984 1985 1986 1987 TOTALINTERNAL SOURCES- OF FUNDS

OPERATING INCOME -9763 -6091 20028 20964 20455 45593DEPRECIATION 6205 9103 14514 16908 18654 65384CONSUMERS CONTBNS 0 4056 4500 5000 5550 19106REPAYMENTS RECEIVABLE 3 87 373 566 559 1588

TOTAL INTERNAL- FUNDS -3555 7155 39415 43438 45218 131671

OPERATIONAL- REQUIREMENTS

INCREASE/DECREASE- WORKING CAPITAL 1491 -1389 7794 -325 1698 9269INTEREST CHARGED- OPERATIONS 1531 7408 14849 17976 18006 59770DEBT REPAYMENT 0 0 0 0 6548 6548

TOTAL OPERATIONAL- REQUIREMENTS 3022 6019 22643 17651 26252 75587

INTERNAL FUNDS- AVAILABLE FOR-- INVESTMENT -6577 1163 16772 25787 18966 56084

CAPITAL INVESTMENT

TOTAL CONSTRUCTION 48604 103752 76398 81678 69630 380062LOANS MADE 223 5303 9636 547 0 15709

TOTAL CAPITAL- INVESTMENT 48827 109055 86034 82225 69630 395771

BALANCE TO BE- FINANCED 55404 107919 69262 56438 50664 339687

FINANCED BY__________

BORROWINGS 27860 78983 56299 547 0 163689EQUITY 28418 32573 13398 62384 55704 192477

TOTAL CAPITAL- SOURCES 56278 111556 69697 62931 55704 356166

CASH INCREASE/- DECREASE 874 3637 435 6493 5040 16479

CASH AT BEGINNING- OF YEAR 0 874 4511 4946 11439 0CASH AT YEAR END 874 4511 4946 11439 16479 16479

ANNUAL DEBT SERVICE- COVERAGE -2.3 0.4 2.3 2.1 1.6 1.7ANNUAL CONTBN- TO CONSTRUCTION -13.4 1.0 19.5 31.4 27.2 14.1

-72 - ANNEX 9

Page 3 of 3

TANZANIA

SEWERAGE SECTOR CONSOLIDATION

FINANCIAL FORECASTS 1983 - 1987

BALANCE SHEETS( TSHS,THOUSANDS)

1983 1984 1985 1986 1987

ASSETS

FIXED ASSETS

PLANT IN SERVICE 205141 261759 438481 501202 555243LESS: DEPRECIATION 119320 140356 167502 199486 236094

OPERATING PLANT 85821 121403 270979 301716 319149

WORK IN PROGRESS 31863 99512 22746 81167 141864

CURRENT ASSETS______________

CASH 874 4511 4946 11439 16479INVENTORIES 3857 5609 9190 10744 11845RECEIVABLES 141 667 5812 6076 6340

TOTAL 4872 10787 19948 28259 34664OTHER ASSETS 220 5436 14699 14680 14121

TOTAL ASSETS 122776 237138 328372 425822 509798

EQUITY AND- LIABILITIES_____________

EQUITY

PAID IN CAPITAL 96859 129432 142830 205214 260918RETAINED EARNINGS -11294 -24793 -19614 -16626 -14177REVALUATION RESRVE 6844 15426 25987 49572 75401

TOTAL EQUITY 92409 20065 149203 238160 322142

LONG TERM DEBT

DEBT DUE 27860 106843 163142 163689 157141

CURRENT- LIABILITIES

PAYABLES 2507 6174 7106 9249 8916

TOTAL 2507 6174 7106 9249 8916

CONSUMERS CONTBNS 0 4056 8921 14724 21599

TOTAL EQUITY AND- LIABILITIES 122776 237138 328372 425822 509798

DEBT % OF- DEBT + EQUITY 23.2 47.1 52.2 40.7 32.8CURRENT RATIO 1.9 1.7 2.8 3.1 3.9

-73 - ANNEX 10Page 1 of 5

TANZANIA

Dar es Salaam Sewerage and Sanitation Rehabilitation Project

Notes and Assumptions for the Financial Forecasts

Low Cost Sanitation

Income Statement

1. Revenue

(a) Revenues are based on the annual load carrying capacities of thevacuum tanker fleet at an average of nine loads daily per tanker for 274working days each year, and on charges per load as follow:

Estimated

No of Operating No of Loads Charge per Load (TSh) Average Charge/

Year Tankers per year Domestic Industry Institutions Load TShs

1981 15 36990 16.00 375.00 20.0001982 15 36990 60.00 160.00 75.001983 15 36990 60.00 160.00 75.001984 22 (see (b) below)

(for 1st half) 168.341984 28 61650 (see (b) below)

(for 2nd half)1985-1987 28 69048 (see (b) below) 182.90, 196.20,

205.80

(b) For 1984 through 1987, revenues are based on coverage ofoperating costs including depreciation, and interest on debt.

Interest

3. Interest is that receivable from loans made to householders forthe construction of latrines, at 10% p.a.

Operating Costs

4. Escalation: All operating cost are based on 1981 prices escalatedat 11%, 10%, and 9% for 1982, 1983-84, and 1985 and after respectively. Inaddition, personnel costs have been increased by 20% for 1982 only, tocover the wage increase awarded for that year.

- 74 - ANNEX 10Page 2 of 5

5. Euel: Cost estiuates are basea on current diesel consumaption of30 liters daily for the 274 operating days annually for the tanker fleet,20000 kms annually for other vehicles at varying consumption rates ofgasoline according to the type of vehicle, both applied to the 1981 costper liter of diesel and gasoline of TShs 3.04 (US$0.366) and TShs 6.20(US$0.75), respectively.

Transport

6. Maintenance: Costs cover the vehicle fleet for the low costsanitation unit at an annual rate of 5% of the original capital cost foreach type of vehicle.

7. Personnel Cost: Costs are based on 1981 wage and salary gradesfor vacuum tanker crews, depot crews, clerical staff, supervisors and 50%of the administrative cadre of the Low Cost Sanitation Unit:. The other 50%of administration for the Low Cost Sanitation Unit being regarded as healthand education services to be provided from the Government/D)CC budget (TShs667,000 annually at mid-1981 price levels).

8. AdmAinistration: Adrministration expenses have been estimated at10% of all expenses excluding depreciation.

9. Depreciation: Depreciation has been estimated at the annualweighted averages of the following rates:

Asset Category Rate X

Dumping Points 2.0

Tankers 10.0VIP Latrines 5.0Buildings and Equipment 4.0Technical Assistance 5.0Land Compensation 2.0PPF 2.0

Funds Flow Statement

10. Capital Investment: Capital expenditures are as detailed in Annex9. Capital expenditures have been escalated at the following rates.

Year %F L

1982 5.0 10.01983-87 10.0 20.0

-75 - ANNEX 10Page 3 of 5

11. Borrowings: Borrowings are the Low Cost Sanitation share of theIDA credit assumed onlent to DSSD by Government for 20 years including 3years grace at a 12% interest rate.

Balance Sheet

12. Plant in Service: Plant comprises the 14 currently operatingvacuum tankers that are to be rehabilitated less their repair costsincluded in project expenditures, valued at 1980 prices, plus projectadditions as they occur. Net fixed assets are revalued annually at 11%,10% and 9% for 1982, 1983-84 and 1985-87, respectively.

13. Receivables: Receivables are estimated at zero in line with thecovenant in paragraph 7.02 (j) that charges will be received in cash.

14. Inventories: Spare parts and other stores have been estimated at5% of gross revalued fixed assets.

15. Current Liabilities: Payables are based on two weeks cashoperating expenses, 5% of construction expenditures and three monthsaccrued interest.

Sewerage

Income Statement

16. Revenue: Annual revenues are based on the currently known 5,800connections to the piped sewerage system. For 1981-82, rough estimates ofTSh 400,000 (US$42,600) have been made for revenue based on the amountcollected of TSh 300,000 (US$32,000) for 1980. By the end of calendar 1984about 50% of the piped sewerage system should be again operational and thenew finance section will be increasing DSSD's accounting efficiency;revenue of TSh 4 million (US$0.42 million) is assumed to be billed forFY83. Connections are assumed to increase at about 300 annually for 1984and after; revenues for FY85 and subsequently are based on the covenanted20% contribution to construction from internal cash generation.

Operating Costs

17. Escalation: Rates for escalation are those given in para. 4,above. Personnel costs have also be increased by 20% for the 1981 wageaward.

18. Personnel Cost: Costs are based on the 1981 wage and salary-levels of the personnel estimated by the consultants to be required tooperate the piped sewerage system when fully operational and the middle andtop management for DSSD. Manning and costs for the existing operationswere not ascertainable as they overlap DCC's other operations.

- 76 - ANNEX 10Page 4 of 5

19. Maintenance: Annual costs are based on 0.25% of the 1980 grossasset revaluation of sewers, manholes, etc., and 5% of the 1980 revaluationof electrical and mechanical equipment. No maintenance is assumed to beperformed for 1981-84 as the system is inoperative.

20. Fuel: For 1981 and 1982, figures are rough estimates. Costs for1983 and after are based on estimated diesel and gasoline ,zonsumption ofthe vehicles to be provided under the project, as given in para. 6 above.

21. Transport Maintenance: Costs are estimated annually at 5% of theoriginal capital cost of vehicles. (Are all project vehicLes foroperations?)

22. Electricity: Power used for pumping is based on consultants'estimates at 1981 price levels.

23. Administration: Costs are estimated at 10% of other directoperating expenditures above.

24. Depreciation: Depreciation has been estimated at the annualeighted averages of the following rates:

Asset Category Rate %

Sewers 2.0Sea Outfall 2.0Pumping Stations 5.0Pumping Mains 2.0Waste Stabilization Ponds 2.0Buildings and Equipment 4.0Vehicles 20.0Connections 2.0Technical Assistance 5.0

Funds Flow Satement

25. Consumers Contributions: Contributions received are forconnections from premises to main sewers, payable by owners. Thecontributions are equal to the capital expenditure for connections shown inAnnex 3.

26. Capital Investment: Capital expenditures are detailed in Annex 3,and have been escalated at the rates given in paragraph 10, of this Annex.

27. Borrowings: Borrowings are the Sewerage share of the IDA credit,assumed onlent as in para 11, of this Annex.

- 77 - ANNEX 10Page 5 of 5

Balance Sheet

28. Operating Plant: Net fixed assets comprise the end-1980 grossvalue of the existing sewerage system using the unit prices for newconstruction and plant given in the feasibility report, less the 1980 pricelevels of the Rehabilitation and other capital expenditures included in theproject. Accumulated depreciation is for 20 years on the foregoing grossasset value at 2.332% p.a. straight line (the weighted average of the grossassets using the para. 24., depreciation rates). Net fixed assets havebeen revalued annually as in para. 12 above.

29. Inventories: Stores of spares and maintenance materials areestinLated at 1.5% of revalued gruss fixed assets.

30. Rteceivables: Accounts receivabie are estimated at two monthsbilling outstanding or 16.666% of annual revenue.

31. Payables: Accounts payable are calculated as in paragraph 15above.32. Consumers Contributions: Contributions have been revaluedannually at the same rates as operating plant.

- 78 - ANNEX 11

TANZANIA

Dar es Salaam Sewerage and Sanitation Project

Project Monitoring Indicators

The indices and information given below would be used to monitorthe implementation of the project and the operational development of DSSD.The information detailed would be incooperated in the appropriate periodicreports to IDA:

Project Implementation

Quarterly reports on the physical progress of the project andforecasts of expenditure showing projects expenditures made and forecastsof future expenditure based on revised cost estimates to completion of theproject.

Staffing and Training

Numbers of employees by categories to be reportesd quarterly

showing progress in recruitment, training and in operational positions tobe compared with a recruitment, training and operational staffing plan forDSSD as devised by management advisors

System Operations

Annual reports on operations giving the following data:

- number of connections to date for sewerage compared to theprevious year and the increase in number during the year;

- number of loads transported annually compared to targets;

- income statements, funds flow statements and balance sheets foreach of the Piped Sewerage and Low Cost Sanitation units of DSSD,showing detailed operating revenues and expenditures, operatingexpenditures, rate of return, contribution to construction,investment and working capital expenditures;

- number of days billings outstanding compared to agreed targets;

- forecast income statements, funds flow statements and balancesheets for following ten years;

- details of major plant and equipment acquired during the year;

- 79 -

TANZANIA ANNEK 12

BAR ES SAAA'M

S3EEAM AND SANrTI(IN DEPARIMW

ORGANITON CHAR

PRIME MINIS=E'S OFFICE

CITY DIRI=(R |

GER~~L: I

Sewerage LOW Cc6t S Aiain 3dmnistration M.

PIannir1 & ; OFeratioca Planirg OFeratioca Education & Suppor | PersonrEl & Control TreaPy v|Colstraction [ i | |Constraction | i i | Prc.tion | } Servioes | | Training ||

Trarsport, Equipmentand Madhinery

-80- ANNEX 13

TANZANIA

Dar es Salaam Sewerage and Sanitation Project

Annual Ecoriomic Cost of Pit Latrines

Total Life Shadow Adjusted AnnualCost (years) Factor Cost (000)TSh TSh US$(000)

Materials- Local 3480 15 - 457.00 48.00

Labor- Unskilled 8121 15 0.9 961.00 103.00- Emptying 188 38.00 4.00

TOTAL COST 1456.00 155.00

- per pit latrine (TSh &US$) 394.00 42.00

- per capita (TShs & US$) 39.00 4.00

Assumptions:a. Cost of capital @ 10%.b. The total cost includes 30% for material costs and 70%. for labor.c. Number of pit latrines (improved and new) = 3,700d. Number of houses = 3,700.e. Household size = 10.

- 81- -NxANNEX 14Page 1 of 2

TANZANIA

Dar es Salaari Sewerage anC Sanitation Project

Return on Irivestrient and Sensitivity Analysis

1. The internal tinancial rate of return (IRR) of the project hasbeeni calculated using inicremental revenues arising from projectexpenditures for the benefits, as it is not possible to quantify the healthana other ,enefits to the population of Dar es balaam arising from improveasewerage and sanitation. The IFRR is the discount rate at which thepresent worth estimated capital and operating cost streamls excluding taxesof the proposed sewerage rehabilitation and low cost sanitationsub-projects equal the present values of the direct revenues earnea.

2. Capital investment costs for the sewerage rehabilitationcomponent are the rehabilitation and the piped sewerage share of office andother equipment expenditures included in the project. Operating costs arethe personnel, vehicle fuel and maintenance, spares and administrationcosts attributable to sewerage operations, inlcuding personnel and otheroverhead costs of the new head office of DSSD. Benefits are the monthlycharges for sewerage services at the levels required in 1985, discounted to1981 price levels. Foreign costs have been shadow priced at a factor of2.13 and labor at 0.9.

3. Capital investment costs for the low cost sanitation componentare the cost of rehabilitating existing and the purchase of new vacuumtankers, equipment costs ann the low cost sanitation share of the newoffices and depots for DSSD. Operating costs are the personnel, vehiclefuel and uiaintenance, -spares and administration costs of thle low costsanitation operations, including attributable share of DSSD costs and 50%of ti,e TSh 1.112 Llillioni annual personnel cost of the LCS promotion andeducation unit. The other 5OX Leing regarded as a Government/City socialservice to be met from general budget funas. 'oreign ccsts have beenshadow priced at a factor of 2.13 and iabor at 0.9.

- 82 - ANNEX 14Page 2 of 2

4. Cost and benefit streams are as follow in millions of Tanzanianshillings.

A. Low Cost Sanitation

…--------- CAPITAL ------------ ------- BENE:FITS ------Foreign Local Emptying

Periods Costs Costs Operating Charges Contributions1 14.20 3.40 - - -2 27.40 9.90 - - 0.203 21.30 11.00 6.20 12.90 4.304 3.60 1.00 6.80 15.50 6.805 - - 6.80 15.20 0.306-10 - - 6.80 15.20 -11-12 15.10 0.20 6.80 15.20 -

13 - - 6.80 15.20 -

14-15 15.10 0.20 6.80 15.20 -

16-30 - - 6.80 15.20 -

B. Sewerage

---------- CAPITAL ------------ ------- BENEFI'ITS -------Foreign Local Monthly

Periods Costs Costs Operating Charges Contributions1 43. . 8.70 -

2 58.50 28.60 - -3 37.00 17.60 7.60 26.6u 3.454 6.40 2.00 7.60 25.70 3.455 3.00 1.50 7.60 24.50 3.456 - 24.50 -7-10 - - 7.60 24.50 -

11 15.30 0.70 7.60 24.50 -12 5.30 0.30 7.60 24.50 -13-20 - - 7.60 24.50 -21 15.30 0.70 7.60 24.50 -22 5.30 0.30 7.60 24.50 -23-30 - - 7.60 24.50 -

5. The rates of returns derived from the foregoing cost and benefitstreams are:

Low Cost Sanitation IFRR % Sewerage IFRR %

At given costs 5.87 At given costs 6.85Costs + 10% 5.48 Cost + 10% 5.23

Costs - 10% 8.67 Costs - 10% 8.72Benefits + 10% 8.39 benetits + 1M% 8.54Benefits - 10% 3.23 Benefits - 10% 5.07

- 83 - ANNEX 15

TANZANIA

DAR ES SALAAM SEWERAGE AND SANITATION PROJECT

Selected Documents and Data Available in Project File

A. Sector Reports and Stucies by Others

A.1 health in Tanzania, USAID, 1979

B. Project Related Reports ana Studies by Others

B.1 Dar es Salaam blaster Plan, harshall Mlacklin Moriaghan Limited,October 22, 1979.

B.2 Dar es Salaam Sewerage and Sanitation Study: Master Plan, HowardHumphreys and Partners and Peat, Marwick, Mitchell and Company,October 1980.

B.3 Dar es Salaam Sewerage and Sanitation Study: Draft PreliminaryEngineering Design and Feasibility Study - Stage I, HowardHumphreys and Partners and Peat, Marwick Mitchell and Company,October 1980.

B.4 Dar es Salaam Sewerage and Sanitation Project - Phase III-Implenentation of Stage I - Proposals for IDA Financing, ARDHI andDar City Council, April 1981.

B.5 Low Cost Sanitation Planning Workshop for Dar es Salaam Sewerageand Sanitation Project, Marilyn Tonon, Technology Advisory Group(TAG), UNDP Global Project GLO/78/006, July 1981.

B.6 Denlonstration Projects in Low-Cost Sanitati(un. Draft keport of ATenth Mission to the United Republic of Tanzania, Marilyn Tonon,June 23 to July 14, 1961.

B.7 Training Proposal, ARDhl, July 19b2.

C. DoAumentation Prepared by Bank Staff or Consultants.

C.1 Chronological record of project missions.

C.2 Basis for Project Cost Estimates.

C.3 Rate of Return Methodology and Calculations.

C.4 Long run Marginal Costs.

C.5 Retails of Risk Analysis and Sensitivity Tests.

IBRD 16132DECEMEFR 19i

TANZANIA

DAR ES SALAAMSEWERAGE AND SANITATION PROJECT

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