MULTINATIONAL RWANDA/BURUNDI

Transcription

1 AFRICAN DEVELOPMENT FUND Language: English Original: French MULTINATIONAL RWANDA/BURUNDI KICUKIRO-KIRUNDO ROAD PROJECT APPRAISAL REPORT INFRASTRUCTURE DEPARTMENT OINF JULY 2006 SCCD: G.G.

2 TABLE OF CONTENTS Page PROJECT INFORMATION SHEET, CURRENCY EQUIVALENTS, ACRONYMS AND ABBREVIATIONS, LISTS OF ANNEXES AND TABLES, BASIC DATA, PROJECT LOGICAL FRAMEWORK, EXECUTIVE SUMMARY... i - x 1 ORIGIN AND BACKGROUND OF THE PROJECT 1 2. TRANSPORT SECTOR General Context Overview of Sector Transport Policy, Planning and Coordination 5 3. ROAD SUB-SECTOR Road Network Number of Motor Vehicles and Traffic Road Transport Industry Road Construction Industry Road Network Management and Staff Training Road Maintenance Financing of Road Investments and Maintenance THE PROJECT Project Design and Rationale Project Area and Beneficiaries Strategic Context Project Objectives Project Description Environmental Impact Project Cost Estimates Sources of Finance and Expenditure Schedule PROJECT IMPLEMENTATION Executing Agency Institutional Arrangements Implementation and Supervision Schedules Procurement Arrangements Disbursement Arrangements Monitoring and Evaluation Financial Reporting and Auditing Aid Coordination PROJECT SUSTAINABILITY AND RISKS Recurrent Costs Project Sustainability Critical Risks and Mitigation Measures PROJECT BENEFITS Economic Analysis Social Impact Analysis Sensitivity Analysis CONCLUSIONS AND RECOMMENDATIONS Conclusions Recommendations 50

3 LIST OF ANNEXES Title 1. Map of Road Network and Project Area 2. Organization Chart of Project Executing Agencies (summary) 3. Provisional List of Project Goods and Services 4. Implementation Schedule (Text and Time Chart) 5. Summary of Economic Analysis 6. List of Project Implementation Documents 7. Summary of Terms of Reference of Technical Assistance to the OdR (Burundi) 8. OdR Staff Training Programme 9 Summary of Bank Group Ongoing Operations in Rwanda and Burundi LIST OF TABLES Title Page 3.1 Rwanda s Classified Road Network Burundi s Classified Road Network Summary of Estimated Cost by Component of the Entire Project Summary of Estimated Project Cost by Compoent Financed by the ADF Summary of Cost by Category of Expenditure of the Entire Project Summary of Cost by Category of Expenditure Financed by the ADF Sources of Finance of the Entire Project Sources of Finance by Category of Expenditure Financed by the ADF Expenditure Schedule by Source of Finance of the Entire Project Expenditure Schedule by Source of Finance of Components Financed by the ADF Summary of Provisional Implementation Schedule of ADF Components Provisional Supervision Schedule Arrangements for Procurement of Works and Services Financed by the ADF 40 This report was prepared by Mrs N. SENOU, Transport Economist (Head of Mission), OINF.2 (Extension 2632), Mr L. JOOTTUN, Environmentalist, OCIN.0 (Extension 2256), Mrs A. ABOU-ZEID, Socioeconomist, ORPC.3 (Extension 3023) and Mr B.M.L. ASKOFARE, Civil Engineer (Consultant), OINF.1, following an appraisal mission to Rwanda and Burundi from 13 March to 1 April Mr H. KANE, Socioeconomist (Consultant), OINF.1 also contributed to the preparation of the report. Mr G. MBESHERUBUSA (Extension 2034) is the Director of the OINF Department and Mr A. KIES (OCIN.1 Extension 2282) is the Manager of the Division in charge of the report.

4 i AFRICAN DEVELOPMENT FUND TRA-TUNIS B.P. 323 TUNIS-BELVEDERE 1002 Tel.: (216) Fax : (216) PROJECT INFORMATION SHEET Date : July 2006 The information given hereunder is intended to provide guidance to prospective suppliers, contractors, consultants and all persons interested in the procurement of goods and services for projects approved by the Boards of Directors of the Bank Group. More detailed information can be obtained from the Executing Agencies of the recipients. 1. COUNTRY : MULTINATIONAL: RWANDA / BURUNDI 2. PROJECT TITLE : Kicukiro Kirundo Road Project 3. PROJECT LOCATION : Rwanda and Burundi 4. RECIPIENTS : Republics of Rwanda and Burundi 5. EXECUTING AGENCIES : (i) In Rwanda: Ministry of Infrastructure, through the Planning, Policy and Capacity- Building Unit B.P.24 Kigali (RWANDA) Fax : (250) Telephone: (257) mininfrast@rwandal.com 6. PROJECT DESCRIPTION The four (4) components of the project are: A. ROAD WORKS: (ii) In Burundi: Ministry of Public Works and Equipment, through the Road Board B.P Bujumbura (BURUNDI) Fax: (257) Telephone: (257) / odr@usan-bu.net (a.1) Lot No. 1: Asphalting of the Kicukiro - Mayange (40 km) road segment, including environmental and social protection works ; (a.2) Lot No. 2 : Asphalting of the Mayange - Nemba - Burundian Border (20 km) road segment, including environmental and social protection works ; (a.3) Lot No. 3 : Asphalting of the Rwandan Border - Gasenyi - Kirundo (37 km) road segment, including environmental and social protection works ; (a.4) Improvement of 149 km of feeder roads (69 km in Rwanda and 80 km in Burundi) ; (a.5) Control and supervision of works for Lot 1; (a.6) Control and supervision of works for Lot 2 and feeder roads ;

5 (a.7) Control and supervision of works for Lot 3 and feeder roads ; ii

6 iii (a.8) Sensitization, in Rwanda and in Burundi, of the population of the project area of impact to: (i) road safety; (ii) environmental protection, and (iii) control of sexually transmitted infections (STIs) including HIV/AIDS and other pandemics. B- Transport and Transit Facilitation Actions : (b.1) Construction and equipping of a common border crossing, including environmental and social protection works; (b.2) Control and supervision of works, including the sensitization of the staff of border services and users to the management and operation of the crossing. C- Institutional Support to Burundi s Road Board (OdR): This component comprises technical assistance to: (i) support the OdR in monitoring the implementation of the project components devolving upon Burundi (technical, administrative, environmental, accounting and financial monitoring) and in road management; (ii) assist the OdR in the training and retraining of its staff in engineering technology, project control and supervision, road works contract award, maintenance, environmental protection and cost accounting; and (iii) conduct the monitoring-evaluation of the project including the socioeconomic impact assessment of the entire project.. D- Project Management: (d.1) (d.2) Monitoring and coordination of the entire project; and Auditing of project accounts. 7. TOTAL COST Project cost (exclusive of taxes, levies and custom duties (HTTD) and expropriations) : UA million (i) Foreign exchange (F.E.) cost : UA million (ii) Local currency (L.C.) cost : UA million 8. ADF GRANT ADF grant : UA million 9. OTHER SOURCES OF FINANCE ABEDA (US$ 7.5 million) : UA 5.23 million OPEC Fund (US$ 6.5 million) : UA 4.53 million Saudi Fund for Development : (US$ 13 million) : UA 9.06 million Government of Rwanda : UA 2.38 million Government of Burundi : UA 1.66 million 10. DATE OF GRANT APPROVAL : September DATE OF PROJECT START-UP AND DURATION : May 2006/28 months 12. PROBABLE DATE OF START-UP OF PROJECT COMPONENTS FINANCED BY THE ADF AND DURATION : November 2006/21 months

7 iv 13. PROCUREMENT OF WORKS AND SERVICES Procurement of Works : A Works on road segments and the border crossing were anticipated and action taken for procurement (Advance Procurement Action- APA). They will be procured through international competitive bidding ; B Works on feeder roads will be procured through international competitive bidding. Consultancy services required and selection stage : I Consultancy services for «the control of road, feeder road and common border crossing works, including sensitization were anticipated and action taken for procurement (Advance Procurement Action-APA). In each country, they will be procured, through bidding, on the basis of a short list of consultants; II Consultancy services for technical assistance to the Road Authority will be procured, through bidding, on the basis of a short list of consultants ; III Consultancy services for auditing project accounts will be procured through bidding on the basis of a single short list of auditing firms. 14. ENVIRONMENTAL CATEGORY OF THE PROJECT : I

8 v CURRENCY EQUIVALENTS (March 2006) UA 1 = FRW UA 1 = FBU UA 1 = US$ FISCAL YEAR 1 January - 31 December WEIGHTS AND MEASURES Metric System ACRONYMS AND ABBREVIATIONS ALM : Equipment Rental Agency (Burundi) ABEDA : Arab Bank for Economic Development in Africa ADF : African Development Fund ASECNA : Agency for the Safety of Air Navigation in Africa and Madagascar BET : Engineering firm CAFER : FER Board of Directors (Rwanda) CEPGL : Economic Comunity of Countries of the Great Lakes COMESA : Common Market of East and Southern African States CSP : Country Strategy Paper CTM : Rwanda Burundi Joint Technical Committee CTMP : Consensus Transport Master Plan DGR : General Directorate of Roads (Burundi) DHS : Demographic and Health Survey DRC : Democratic Republic of Congo DRTN : Rehabilitation and New Works Division (Rwanda) DTR : Directorate of Road Works (Burundi) EAC : East African Community EATTFP : East Africa Trade and Transport Facilitation Project ECCAS : Economic Community of Central African States EDF : European Development Fund EDPRS : Economic Development and Poverty Reduction Strategy EPB : Bujumbura Port Management Company (Burundi) ERR : Economic Rate of Return ESIA : Environmental and Social Impact Assessment ESMP : Environmental and Social Management Plan FAO : Food and Agriculture Organization of the United Nations Fbu : Burundi Franc FER : Road Maintenance Fund (Rwanda) FFLS : Full Family Living Study FRN : National Road Fund (Burundi) FRW : Rwandan Franc GDP : Gross Domestic Product HTTD : Exclusive of taxes, levies and custom duties ICB : International Competitive Bidding IDA : International Development Association KfD : Kuwait Fund für Development KfW : Kreditanstalt für Wiederaufbau

9 vi LNBTP : Laboratoire national du bâtiment et des travaux publics (National Building and Public Works Laboratory) MINAGRI : Ministry of Agriculture and Animal Resources (Rwanda) MINALOC : Ministry of Local Government, Good Governance, Community Development and Social Affairs (Rwanda) MININFRA : Ministry of Infrastructure (Rwanda) MTPE : Ministry of Public Works and Equipment (Burundi) MTPT : Ministry of Transport, Posts and Telecommunications (Burundi) MUSD : Million United States dollars NACC : National AIDS Control Committee NEPAD : New Partnership for Africa s Development NGO : Non-Governmental Organization NR : National Road NTB : National Tenders Board (Rwanda) OdR : Road Board (Burundi) ONATRACOM : National Public Transport Authority (Rwanda) OPEC : Organization of Petroleum Exporting Countries OTRACO : Public Transport Authority (Burundi) PIA : Project Impact Area PIC : Public Information Centre PIMU : Project Implementation Monitoring Unit PNEAR : National Rural Water and Sanitation Programme PR : Provincial Road PRSP : Poverty Reduction Strategy Paper RRA : Rwanda Revenue Authority (Rwanda) SFD : Saudi Fund for Development SME : Small-and Medium-Scale Enterprise SSATP : Sub-Saharan Africa Transport Program Policy STI : Sexually transmitted infection UA : Unit of Account UNICEF : United Nations Children s Fund Veh/d : Vehicles per day HIV/AIDS : Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome WHO : World Health Organization WFP : World Food Programme

10 vi MULTINATIONAL / RWANDA - BURUNDI Kicukiro Kirundo Road Project Project Logical Framework Date of start-up of ADF components : November 2006 Completion date : August 2008 Design team : Mrs N. SENOU, OCIN.2 ; Mr L. JOOTTUN, OCIN.0 ; Mrs A. ABOU-ZEID, ORPC,3 ; Mr H. KANE and Mr B.M..L ASKOFARE, Consultants, OCIN.1 HIERARCHY OF OBJECTIVES SECTOR GOAL 1.1. Contribute to the strengthening of subregional integration and facilitate trade between the two countries and with foreign countries PROJECT OBJECTIVES 1. Create an all-weather permanent road link between Rwanda and Burundi in order to open up the regions through which the road runs and reduce travel time and general transport costs 2. Contribute to the improvement of the living conditions of the people of the project impact area and to poverty reduction 3. Build technical and operational capacities of the OdR and of border services EXPECTED OUTPUTS by Sector and Corresponding Theme 1.1 (i) The ECCAS road link improved; (ii) inter-state and intracommunity trade increased; and (iii) trade channels are diversified 1. (i) The Kigali- Bujumbura road link is improved and maintained, technical staff at the border are efficient and formalities at the border are reduced 2. Socioeconomic infrastructure of the project impact area, (PIA) is rehabilitated and/or improved; regions of the east of Rwanda and north of Burundi are opened up 3. Technical road staff and staff of border services are trained and sensitized SCOPE 1.1. Rwanda and Burundi ECCAS -EAC Rwanda and Burundi PERFORMANCE INDICATORS, Source and Method 1.1. (i) The ECCAS stretch of tarred roads is in a good state ; (ii) rate of inter-state and intracommunity trade, and reduced transit time through the main corridors Source : Rwanda and Burundi national statistics, and intra-community trade Methods : Statistics prepared by both countries and ECCAS 1. (i) Proportion of the stretch of tarred roads between the capital cities of Kigali (Rwanda) and Bujumbura (Burundi) and (ii) travel and transit time 2. Rate of access to socioeconomic infrastructure (production and marketing zones, schools and health centres) 3. (i) Time frame for the preparation of OdR technical files and (ii) time taken to pass through the border crossing Sources : MININFRA in Rwanda and MTPE in Burundi, Rwandan and Burundian Customs, Local Councils and Authorities in Rwanda and Burundi, NGOs, Regional Economic Community (REC): ECCAS, EAC, etc. Methods : Prepared statistics, socioeconomic surveys OBJECTIVE INDICATORS AND SCHEDULE 1.1 (i) ECCAS stretch of tarred roads in a good state increases from about km to km by 2010, or an increase of 7.5%; (ii) rate of inter-state trade rises from 10% in 2005 to about 15% by 2010; (iii) rate of intra-community trade increased by 10% by 2010 and transit time reduced by about 10% Source : Statistics of Rwanda and Burundi Methods: Statistics prepared by both countries 1. By 2008 : (i) the unpaved section of the Kigali- Bujumbura road link drops from 34.4% to 0%, that is 100% of the road is paved, (ii) the average travel time on the road drops from 6 hours in 2006 to 2 hours in 2008 between Kicukiro and Kirundo (iii) an increase of about 15% in the supply of transport beginning from 2008 and improved access to production and marketing centres, for about inhabitants 2. 10% increase in the rate of access to socioeconomic infrastructure from (i) Improvement of OdR interventions (time of production of the route plan, road maps and BD reduced from 6 to 2 months) from 2008, (ii) time taken to pass and transit through the border crossing reduced by one half from 2008 Sources : MININFRA in Rwanda and MTPE in Burundi, Rwandan and Burundian Customs, Local Councils and Authorities ASSUMPTIONS/RISKS 1.1 Strengthening of peace in the region 1.1. Continuation of the sub-regional integration policy, in particular at the levels of ECCAS and EAC and harmonization of texts relating to transit facilitation and management of common border crossings Resources of the Road Maintenance Fund in Rwanda and the National Road Fund in Burundi increased in proportion to needs Methods : Prepared statistics, and surveys on the corridor

11 vii HIERARCHY OF OBJECTIVES EXPECTED OUTPUTS by Sector and Corresponding Theme SCOPE PERFORMANCE INDICATORS, Source and Method OBJECTIVE INDICATORS AND SCHEDULE ASSUMPTIONS/RISKS ACTIVITIES AND INPUTS 1. Asphalting of the remaining section of the Kigali-Bujumbura main road and common border development; definition of conditions for the management of the border crossing (UA million) 2. Development/rehabilitation of socioeconomic infrastructure (UA 8.82 million) 3. Project management : institutional support (technical assistance and training of OdR staff; project monitoring and coordination; project auditing (UA 2.12 million) 1. Rwanda and Burundi have: (i) a good quality paved road link between Kicukiro and Kirundo; and (ii) a built and equipped common border crossing 2. Socioeconomic infrastructure (feeder roads and school, health and market facilities) are developed rehabilitated 3. Technical and operational capacities of road services in Burundi and border services are built; the people of the project impact area and users of the road are sensitized to the management and operation of the common border crossing, to road safety, to environmental protection and to STIs and other pandemics Project impact area (Districts of Kicukiro and Bugesera in Rwanda and Province of Kirundo in Burundi) 1. (i) Stretch of roads paved; (ii) common border crossing developed 2. Number of socioeconomic infrastructure developed and/or rehabilitatated 3. (i) Number of persons trained and equipment placed at the disposal of the OdR by technical assistance for project monitoring and road management; (ii) number of persons sensitized to the management and operation of the common border crossing; (iii) number of persons sensitized to road safety, environmental protection and STIs and other pandemics; (iv) number of socioeonomic surveys conducted; (v) number of audit reports produced; (vi) PIMU and CTM established and their members appointed. Sources : MININFRA in Rwanda and MTPE in Burundi, Rwandan and Burundian Customs. Local Councils and Authorities, UPPR/MININFRA and OdR/MTPE Methods : monthly and periodic reports of central and decentralized services 1. (i) 97 km of paved road between Kicukiro in Rwanda and Kirundo in Burundi of which 60 km in Rwanda (Kicukiro-Nemba) and 37 km in Burundi (Kirundo- Gasenyi); (ii) one common check point built and equipped with data processing equipment for the rapid processing of travel documents 2. (i) 149 km of feeder roads developed of which 69 km in Rwanda and 80 km in Burundi; opening up of some thirty villages by feeder roads, thirty socioeconomic facilities (schools, health centres and markets) protected, range closet at the border crossing built, rest areas developed along the road, small shelters built for sensitization teams, etc. 3 (i) 55 employees of Burundi s OdR trained and a set of data processing and office automation equipment provided to the OdR; (ii) about ten employees of border services and some 500 users of the border crossing sensitized; (iii) about persons sensitized; (iv) two project monitoringevaluation surveys conducted; (v) three audit reports produced; (vi) two PIMU (one per country) set up to monitor the implementation of the project, with 8 appointed members (4 per country); one 8-member CTM set up to coordinate the entire project Sources : MININFRA in Rwanda and MTPE in Burundi, Rwandan and Burundian Customs, Local Councils and Authorities Counterpart funds provided Methods : monthly and periodic reports of central and decentralized services.

12 viii EXECUTIVE SUMMARY 1. ORIGIN AND HISTORY OF THE PROJECT 1.1 Rwanda and Burundi, which are landlocked countries far away from seaports, are emerging from a long period of political instability that led to the destruction and deterioration as well as long years of neglect of transport infrastructure. This situation is a major obstacle to the opening up of the hinterland and to regional integration. The Governments of the Republics of Rwanda and Burundi give pride of place to the rehabilitation/development of main transport roads in their medium-term investment programmes ( ). To this end, the technical departments in charge of this sector have undertaken to progressivively restore the quality of service and the functionality of national road networks. The restoration and development of the main highways of their road networks are underway and will be pursued with the assistance of development partners. At the same time, and in order to ensure the sustainable development of the transport sector, the investment programmes are backed by institutional and organizational reforms. 1.2 The proposed road project is in keeping with government policies aimed at improving the level of service of road networks to serve as a support to other sectors of the economy, notably agriculture. Successive studies have been conducted on this project in 1987, 1999, 2001, 2004 and These studies, funded by the World Bank, ABEDA, and the Governments of Rwanda and Burundi, cover technical, economic, environmental and social aspects of the project. The studies have established the viability of the project and recommended the asphalting of the road, with an asphaltic concrete coating on the Rwandan section and a double-layer coating on the Burundian section. The development of feeders connected to the road will enable the rural populations in the project impact area to transport, their agricultural produce to the main road and the major commercial centres under good conditions,. 1.3 The project was requested by both Governments. An appraisal mission was fielded in both countries in March and April Discussions with the various development partners, local elected representatives, civil society, the private sector and the population in the project impact area, within the framework of a participatory approach, helped establish the rationale of the project and the commitment of the authorities and population to ensure its implementation and sustainability. The preparation of this report is based on project studies and on data and information collected during the project appraisal. 2. GRANT PROPOSAL The ADF grant amounting to UA million represents 56.9% of the total project cost exclusive of taxes, levies and customs duties (HTTD) and expropriations. The grant for the components of the project co-financed by the ADF and the Governments of Rwanda and Burundi amounting to UA million represents 90.0% of their total cost exclusive of taxes, levies and customs duties and expropriations. It will be used to finance 100% of the cost in foreign exchange and 69.6% of the cost in local currency of the project.

13 ix 3. SECTOR AND SPECIFIC OBJECTIVES OF THE PROJECT The sector goal of the project is to contribute towards the strengthening of subregional integration and to facilitate trade between the two countries and with the outside world. Specifically, the project aims to: (i) create an all-weather permanent road link between Rwanda and Burundi in order to open up the regions through which the road runs and reduce travel time and general transport costs; (ii) contribute to the improvement of the living conditions of the people of the project impact area and to poverty reduction ; (iii) build technical and operational capacities of the OdR and of border services. 4. PROJECT OUTPUTS outputs: To achieve the above-mentioned objectives, the following are the expected - 97 km of paved road in a good state (60 km in Rwanda and 37 km in Burundi); km of developed feeder roads connected to the road (69 km in Rwanda and 80 km in Burundi); and 30 protected socioeconomic facilities along the road (schools, health centres, markets, etc.) of which 20 in Rwanda and 10 in Burundi; - constructing and equipping of a common border crossing (weighbridge and communication equipment) ; - technical and operational capacities built through : (A) the training of 55 employees of the Road Board (OdR) and provision to the Project Implementation Monitoring Unit, by technical assistance, of data processing and office automation equipment for its operation; (B) the sensitization of about ten employees of border services and 500 users to the management and operation of the common border crossing; and the sensitization of about persons in the project impact area to : (i) road safety, (ii) environmental protection, (iii) control of STIs including HIV/AIDS and other pandemics. 5. PROJECT COST ESTIMATES The estimated cost exclusive of taxes, levies, customs duties and expropriations of the entire project is UA million of which UA million in foreign exchange and UA million in local currency. The estimated cost, exclusive of taxes, levies, customs duties and expropriations, of components jointly funded by the ADF and the Governments of Rwanda and Burundi is UA million of which UA million in foreign exchange and UA million in local currency. The amount of compensation for expropriation is estimated at the equivalent of UA 0.25 million.

14 x 6. SOURCES OF FINANCE The project will be financed by the ADF, ABEDA, OPEC Fund, SFD and the Governments of Rwanda and Burundi. The ADF will finance the project through a grant, to the tune of UA million of which UA million in foreign exchange and UA 7.69 million in local currency. ADF s share in of the components it is co-financing with the two Governments represents 90% of the total cost exclusive of taxes, levies, customs duties and expropriations. Thus, the local counterpart funds will represent 10% of the cost of the said components (of which 5.1% and 4.9.% respectively to be borne by the Governments of Rwanda and Burundi). 7. PROJECT IMPLEMENTATION Implementation of the project will run from May 2006 to August 2008, that is 28 months. Implementation of the project components financed by the ADF will run from November 2006 to August 2008, or 21 months. 8. CONCLUSIONS AND RECOMMENDATIONS 8.1 CONCLUSIONS Implementation of the project will contribute to strengthening regional economic integration, opening up rural areas with a high agro-pastoral potential in Rwanda and Burundi and improving the living conditions of people in the project impact area. The project will thus contribute to poverty reduction. The formulation of the project drew from lessons learnt from Bank interventions in both countries as well as from those of other donors in the road subsector, particularly as concerns the involvement of beneficiaries in project design, inclusion of socioeconomic infrastructure for the benefit of the riparian population, contract award, mobilization of counterpart funds, efficient management of the project by the executing agencies and sustainability of investments The project has been well studied technically and its design addresses its objectives. The project is classified in environmental category I. Its negative impacts on the environment were identified and assessed and the cost of mitigation measures was included in the project cost. The project is economically viable, and it generates an economic rate of return of 15.7%. Sustainability of investments will be ensured through the technical reinforcement solutions retained and the maintenance of structures RECOMMENDATIONS In the light of the foregoing, it is recommended that an ADF grant of not more than UA million be awarded to the Republic of Rwanda and the Republic of Burundi. The ADF grant will be shared out as follows: UA million to the Government of the Republic of Rwanda and UA million to the Government of the Republmic of Burundi. It will be used to implement the project as designed and described in this report, and will be subject to the conditions set out in the Protocol of Agreement.

15 1. ORIGIN AND HISTORY OF THE PROJECT 1.1 Rwanda and Burundi are two landlocked countries which are more than 1000 km away from any seaport. They are gradually emerging from a decade of political instability which led to the deterioration of transport infrastructure and impeded its maintenance. Regarding the socio-political situations, peace is gradually returning to both countries, since the signing of the different peace accords consolidated by democratic elections. These accords constitute a consensus framework for national reconciliation and restoration of a sustainable peace in both Rwanda and Burundi. In addition, the reconstruction effort undertaken in both countries and the improvement of their economic situation depend to a large extent on the level of the quality of their trade with the outside world, considering the impact of costs and transport conditions on imports and exports. 1.2 Geographically, Rwanda and Burundi are situated in the Economic Community of Central African States (ECCAS) and East African Community (EAC) zones. They are members of ECCAS within which intra-community trade is still very weak (less than 3% of imports and about 5% of exports), because of inadequate relevant infrastructure and cumbersome administrative procedures relating to goods transit, and the administrative and regulatory framework of the different transport and transit corridors. Hence, ECCAS has drawn up a Consensus Transport Master Plan (CTMP) for Central Africa, the strategic orientations of which are, among other things, to : (i) make the best use of all modes of transportation and foster intermodalism to open up landlocked countries (including Rwanda and Burundi), by placing special emphasis on actions to improve the efficacy of modes of transportation; (ii) examine in detail the issues of facilitation of transit (simplification of procedures, interconnection of customs systems, etc.), by preparing a transit system inspired by that of other sub-regional organizations and ensuring its effective application; and (iii) develop mechanisms enabling the effective implemenation of harmonized regulatory frameworks adopted at community level. 1.3 In addition, Rwanda and Burundi are about to join the East African Community (EAC). However, most of their foreign trade is channelled through EAC member countries and through the North and Central Corridors which link them respectively to the ports of Mombasa in Kenya and Dar-es-Salaam in Tanzania. Within this framework, Rwanda and Burundi carry out such trade in compliance with the existing general facilitation arrangements between coastal countries and landlocked countries, notably the North Corridor Transit Agreement, the key objectives of which are to: (i) promote the use of this corridor and reduce transit time; (ii) streamline and harmonize documentation and procedures; and (iii) reduce the incidence of fraud and tax evasion. Hence, Rwanda has become involved in following-up the management of the Gatuna-Katuna (Rwanda-Uganda) and Malaba (Uganda-Kenya) border crossings. However, many physical and non-physical barriers still exist and most of them are due to the non-implementation of some provisions of this Agreement. Specific measures are being prepared and updated for better use of transport corridors, in particular within the framework of the East Africa Trade and Transport Facilitation Project (EATTFP) funded by the World Bank. The ADF has also been requested to participate in the funding of this operation which concerns not only the EAC countries (Kenya, Tanzania and Uganda) but also Rwanda, Burundi and the Democratic Republic of Congo (DRC). The overall objective is to promote trade and the economic integration of the countries concerned.

16 2 1.4 The lead donors, which intervened in both countries before the 1990s have resumed their activities there after more than a dozen years of absence. Many investment programmes are currently being implemented in the countries with financing from notably the ADF, the European Development Fund (EDF), the World Bank, ABEDA, the Kuwait Fund for Development (KFD), the Saudi Fund for Development (SFD) and the OPEC Fund. The objectives of these programmes are to reduce poverty, speed up economic growth on an equitable basis, improve governance and strengthen institutions. 1.5 This project is in keeping with the transport sector policy guidelines and national programmes of Rwanda and Burundi. It is in line with the priorities set out in the Transport Sector Policy Papers and the Poverty Reduction Strategy Papers (PRSP) of these two countries which place emphasis on the development of road infrastructure which contributes to opening up agricultural zones, improving access to basic social services, and to regional integration. The project is equally in keeping with the ECCAS Consensus Transport Master Plan (CTMP) which provides for the establishment of an integrated road network and the streamlining of transport and transit procedures in member countries. It is consistent with the Bank s Country Strategy Papers (CSP) for Rwanda and Burundi for the period which also place special emphasis on multinational poverty reduction projects through the development of regional infrastructure and regional cooperation between regional member countries. The CSPs of both countries also provide, in accordance with NEPAD objectives, for the funding of regional development projects in the transport sector. 1.6 Studies funded successively by the World Bank, ABEDA and the Governments of Rwanda and Burundi were carried out on the project. The last of these were conducted in The institutional support to the Road Board envisaged in the project will be provided in conformity with the training plan of the Board, drawn up following institutional reforms carried out in the road sub-sector in Burundi. Such institutional support falls within the framework of the capacity-building programme of the Ministry of Public Works and Equipment of Burundi. The project appraisal was carried out in March and April The project studies and the outcome of the appraisal mission served as a basis for the preparation of this report. 2. TRANSPORT SECTOR 2.1 General Context Rwanda and Burundi, which are landlocked countries far away from the sea, have undiversified transport systems with three modes of transport: road, lakeside and air. Currently, rail transport does not exist in these countries which, for their foreign trade, use the sea lanes, railway lines and roads of neighbouring countries such as Kenya, Tanzania and Uganda. In fact, to access the sea, these two countries use the North and Central Corridors on which multimodal transport is conducted, namely : (i) Lake-rail: Bujumbura Kigoma Port of Dar-es-Salaam; (ii) Road-rail : Bujumbura Kigali Kampala Port of Mombasa; and (iii) Road or road-rail : Kigali-Isaka-Dar-es-Salaam. Domestically, transport plays a key role in the economy of Rwanda and of Burundi because it accounts for nearly 5% and 3% respectively of their GDP.

17 In Rwanda, the transport system is currently changing dramatically, under the impetus of a resumption and strengthening of socioeonconomic activities as well as the consolidation of peace. The operation of the transport system has improved significantly following the successive implementation of transport infrastructure rehabilitation and reconstruction programmes. In the case of Burundi, which emerged later on from instability, steps to revamp the transport system are less advanced. However, a strategy being implemented in that regard. Furthermore, there are still constraints, due to the difficulties encountered in recent years in the sub-region. These constraints are the result of the dilapidated state of transport infrastructure, notably roads, leading to its low level of service, inadequacy of road maintenance resources and weak investment planning and programming capacities. 2.2 Overview of Sector Road transport In Rwanda and Burundi, road transport is the principal mode for moving goods and persons and it plays a part upstream and downstream of agricultural and industrial production. About 90% of domestic passenger and goods transport services are carried out by road, which amply makes it the dominant mode of transportation. The road transport network is made up of km of road in Rwanda and km in Burundi. Demand for transport in both countries concerns mainly foodstuffs (cassava, sorghum, rice, banana, beans, sweet potatoes, etc.), agro-industrial products (cofee, tea, common sunflower and tobacco), products of the brewing and cement industries and imported products (final consumer products, capital goods and petroleum products) distributed across the countries. The main roads link: (i) in Rwanda, from the capital, Kigali, to the different provinces and to the borders of neighbouring countries, namely Gatuma and Kagitumba (towards Uganda in the North), Rusumo (towards Tanzania in the East), Akanyaru, Nemba and Bugarama (towards Burundi and DRC in the South), Gisenyi (towards DRC in the West and North-West); and (ii) in Burundi, from the capital, Bujumbura, to the different provinces and to the borders of Tanzania, Rwanda and DRC In general, transportation in urban, peri-urban and inter-urban areas in Burundi and Rwanda is ensured by individual operators who have minibuses, motorcycle-taxis (motortaxis) and bicycle-taxis (vélos-taxis). Concerning regional trade, road transport covers more than three-quarters of demand for the transportation of goods. One of the major constraints of road transport lies in the shortage of supply in relation to demand and the poor organization of the sector. The limited road transport service undermines economic activity, particularly agricultural activity, because of the high cost of and difficulties in the transporation of agricultural produce and the resulting crop losses. River and lakeside transport Rwanda has many lakes and rivers, but only Lake Kiva is used for passenger and goods transport. About 120 km of this lake are navigable throughout the year and help provide transport services to three main localitions, namely: Gisenyi in the North, Kibuye in the Centre and Cyangugu in the South of the country. However, the limited supply of lakeside transport services was worsened by the crisis experienced by the country and which caused damage to property and infrastructure; only a few traditionally-made small crafts still exist. The Government

18 4 intends to revive lakeside transport activities. An emergency programme has been put in place. Its priority objectives are: (i) revamping docking and weighing infrastructure and installations; (ii) reconstituting the fleet; (iii) organizing existing transport services on the lakes and rivers; and (iv) strengthening the private sector s role in the operation and management of this mode of transport In Burundi, lakeside transport is operated on Lake Tanganyika which has a huge transport service potential because it now carries more than 80% of the country s import-export flows. The merchant marine has a capacity of about tonnes. Burundi generally operates three routes : Bujumbura-Kigoma (in Tanzania), Bujumbura-Mpunlungu (in Zambia) and Bujumbura-Kalémie and Kalundu (in DRC). The last route is not used because of the crisis in the East of DRC. To operate lakeside transport, Burundi has, as support infrastructure, the lake port of Bujumbura with a relatively high accommodation capacity (about tonnes in 2005). This port is essentially characterized by : (i) docking structures of 920 metres of row; (ii) an initial draught varying between 4m and 8m a few years ago and today only between 1m and 4m; and (iii) storage areas of m². The State assigned the operation of the port of Bujumbura to the company Exploitation du Port de Bujumbura (EPB), which is a semi-public company governed by private law and whose infrastructure is owned by the State, on the basis of an agreement signed in 1989 and renewed in 1992 and The operation of the port of Bujumbura is plagued, in particular, by the decay of its equipment and silting up of its basin and access channel. The Government s strategy is to: (i) identify the causes of and sustainable solutions to this phenomenon; and (ii) strengthen access channel and port basin dredging operations. The Government has just obtained financing from Belgian Cooperation for the study on the dredging of the port of Bujumbura. Air transport In Rwanda and Burundi, air transport plays the dual role of opening up these countries to the outside world and promoting tourism. In this regard, Rwanda has an international aiport in Kigali-Kanombé and six aerodromes, three of which are operational. Passenger traffic at this airport recorded an annual increase of 3.2%, from passengers in 1999 to passengers in The increase in the number of passengers is due particularly to the establishment and improvement of an atmosphere of security in the country. Freight traffic almost trippled, from tonnes in 1999 to about tonnes in Airport management, which is on the whole satisfactory, is under the responsibility of the Rwanda Airports Authority. Moreover, the Kanombé airport was rehabilitated, in order to enhance its technical and operational performance. An autonomous Civil Aviation Authority was also set up as part of the implementation of the State s divestiture policy. Given the impossibility of extending the present Kigali airport, Rwanda intends to build a new international airport in the natural region of Bugesera through which the road runs Burundi has only one international airport, namely Bujumbura airport, and several secondary aerodromes, notably those of Ngozi, Gitega and Kirundo, used essentially for domestic services. Current traffic at the Bujumbura airport is about passengers and tonnes of freight. Bujumbura airport is managed by the Aeronautic Services Board (Régie des services aéronautiques) which is a State corporation. In addition, air navigation safety is ensured by the Agency for the Safety of Air Navigation in Africa and Madagascar (ASECNA). This airport s infrastructure and equipment are in a relatively good state, owing to an appropriate airport facility maintenance and replacement policy. The secondary aerodromes have laterite landing strips. They are poorly maintained and handle a quite limited number of passengers.

19 5 Access roads to the sea Rwanda and Burundi use mainly two access roads to the sea for their foreign trade, namely: (i) the North Corridor which links Kigali (Rwanda) and Bujumbura (Burundi) to the port of Mombasa (Kenya) over respective distances of about km and km; and (ii) the Central Corridor which links Kigali and Bujumbura to the port of Dar-es-Salaam in Tanzania over respective distances of about km and km. Rwanda s interest in the second corridor has increased in recent years after the establishment of a container terminal at the port of Dar-es-Salaam, the improvement of the Tanzanian railways and the provision of an inland port for Rwanda, at Isaka which is the terminal of the railway of the Central Cooridor. The impact of the isolation of Rwanda and Burundi on their foreign trade remains strong, irrespective of the corridor used. The competitiveness of these transport corridors is impeded by: (i) the costs and turnaround time for the ports in the transit countries; (ii) the high cost of transportation, which represents about 40% of the selling price of products; and (iii) the bad state of roads and considerable road travel time. The World Bank s effort to facilitate transport and transit on the corridors of East Africa through the East Africa Trade and Transport Facilitation Project and that of the Bank through the Institutional Support for East Africa Trade and Transport Facilitation Project will greatly contribute to the improvement of trade in the region. 2.3 Transport Policy, Planning and Coordination One of the major concerns of the Governments of Rwanda and Burundi is the rapid creation of conditions conducive to sustainable economic growth and, consequently, to poverty reduction. The transport sector s decisive role in the pursuit of these two fundamental objectives was reaffirmed and set out in the Transport Sector Policy Papers of Rwanda and Burundi adopted by the Governments in 2002 and 2005 respectively. Rwanda s paper is currently being reviewed with World Bank funding. These papers set out common transport sector objectives which can be summarized as follows : (i) open up the country internally and to the external world by safeguarding existing infrastructure, diversifying foreign trade channels and developing the transport network; (ii) control transport costs at the domestic and international trade levels; (iii) strengthen the liberalization of the sector s activities and its modernization; and (iv) support the policy of decentralization and improvement of the living conditions of the people through the development of transport infrastructure in rural areas. These objectives are in line with the Poverty Reduction Strategy Papers (PRSP) of both countries. They are also in keeping with Vision 2020 which serves as Rwanda s long-term socioeconomic development plan The Ministry of Infrastructure of Rwanda (in charge of transport) and the Ministry of Transport, Posts and Telecommunications of Burundi are primarily responsible for the planning, coordination and implementation of these policies. These ministries rely on the national agencies in charge of: (i) planning, formulation of sector strategies and the investment programme; (ii) implementation of transport regulatory instruments; and (iii) planning, programming and monitoring of the execution of road operations (studies, new road works and road maintenance). The ministries in charge of planning and finance play the respective roles of programming investment budget estimates, including those of transport infrastructure, and mobilizing and managing the financial resources of the sector. Regional and local authorities bear part of the financing of feeder roads.

20 6 3. ROAD SUB-SECTOR 3.1 Road Network Rwanda s road network The road networks of Rwanda and Burundi are relatively well integrated, because of the common past history of both countries. Indeed, most of the highways of either country lead on to the other country. Furthermore, they experience the same problems relating to the high cost of transportation, because of their remoteness from the sea Rwanda has a total road network of km including km of classified roads and km of unclassified roads. The classified road network is under the responsibility of the Ministry of Infrastructure (MININFRA). It comprises km of primary roads (1 022 km surfaced and km unsurfaced) for international transport; and km of unsurfaced secondary roads for domestic transportation. About 33% of the stretch of classified road network is in a good state, whereas unsurfaced classified roads have fallen into more serious disrepair, with only 4% of the stretch in a good state The unclassified road network is under the responsibility of local governments. Most of this network (about 85%) is made up of feeder roads created as part of development projects or community works to open up localities and districts and to sell foodstuffs. Their maintenance is generally not good enough, because of the paucity of financial resources earmarked for this purpose The situation of the classified network is summarized in the table below. Category of Roads Table 3.1 Rwanda s Classified Road Network Primary Secondary Total Surfaced Earth Earth Surfaced Earth National roads of international interest (RNII) National roads of domestic interest (RNIN) National roads of Community interest (RNIC) Sub-total Total network (Source : MININFRA : Rwanda s Draft Transport Policy March 2006) The major problems facing the Rwandan road network are due notably to: (i) difficult climatic and topographical conditions, and remoteness from seaports, which result in very high construction and maintenance costs; and (ii) insufficient resources for road maintenance. In its policy letter signed in 2002, the Rwandan Government pledged to take corrective measures for the recovery of the transport sector in general and the road sub-sector in particular. In this connection, the strategy being implemented progressively consists in prioritizing the maintenance of a priority network which will receive sufficient financing through the Road Maintenance Fund whose resources are still inadequate to meet the needs of the classified road network. Furthermore, instituationally, plans have been made to set up an autonomous Road Agency which will replace, by the end of 2006, the defunct Directorate of Public Works. The decree to set up this agency was issued in April The goal of this change is to enhance the performance of the road sub-sector, thanks to the autonomy and management flexibility of this

21 7 body. Furhermore, an appropriate road maintenance strategy is being formulated, in conjunction with Rwanda s development partners. Burundi s road network Burundi s road network totals km, broken down into two categories : (i) the main network dubbed classified, of km, with civil engineering and crossing structures made up essentially of : national roads (NR) covering km, 1121 km of which are surfaced, and provincial roads (PR) covering km of dirt roads; and (iii) the unclassified network make up of community roads and urban highways (3 049 km), as well as agricultural feeder roads (4 059 km). Furthermore, the road network is shared between four operation regions each covering three or four provinces. It helps open up the country internally and to the outside world, by facilitating trade. Table 3.2 Burundi s Classified Road Network Class Length (km) Earth Paved National roads Provincial roads Community roads Urban roads Total Source : OdR The road network has greatly suffered from lack of maintenance due both to the paucity of resources and to the long-drawn-out war from which the country is emerging. The restoration of this network is a major concern of the Government as well as its development partners. Hence, an extensive restoration programme is under implementation since 2004, with World Bank financing. Other donors, notably the EDF, Canadian Cooperation and Luxembourg Cooperation intervene in the sector, with the construction of feeder roads. Also, institutionally, the Government has embarked on a series of reforms backed by the World Bank and the European Union. The purpose of all these actions is to improve the functioning of the road sub-sector in order to open up the country and develop inter-provincial and regional trade and create a conducive framework for private sector development. The operation to divest the State of road maintenance works under state control is already operational since 2001, with the setting up of the OdR. In addition, a study on the sustainable financing of road maintenance, funded by the World Bank, has resulted in the definition of resources necessary for road maintenance and those which will be allocated for the maintenance of the urban road network of Bujumbura.

22 8 3.2 Number of Motor Vehicles and Traffic Number of vehicles With vehicles (excluding motorcycles) the number of motor vehicles in Rwanda was at its lowest in 1995, just after the internal conflict of Since then the number has grown steadily thanks to the implementation of the trade liberalization policy. According to an inventory made by the Rwanda Revenue Authority (RRA) and the transport services of the Ministry of Infrastructure, the number of vehicles rose from in 1997 to in 2003, that is an average annual growth rate of about 5%. Heavy vehicles accounted for 11.5% of the national annual average daily traffic (AADT). This heavy road vehicle incidence is much higher for border counting stations : (i) 63% for the station situated at the northern border towards Uganda and Kenya; (ii) 61% for the station situated at the southern border towards Burundi, (iii) 50% for the south-western border station towards Burundi. It should be noted that heavy vehicles heading for Congo also cross this station; and (iv) 49% for the Rusumo station at the border with Tanzania. As regards Burundi, there are only partial statistics for the number of vehicles. According to statistics from Burundi taxation services, there are about vehicles on the road, about 20% of which are heavy vehicles. In both countries, there is a substantial number (more than 50%) of informal sector vehicles which are more than 10 years old, with a relatively low rate of availability, not exceeding 60% These second-hand vehicles often cause many road accidents and the cost of running them is high. In Rwanda, the number of accidents increased from in 1999 to in 2003 (with about 10% of cases involving death). In Burundi, the number rose from 580 cases in 2000 to in 2004 (with about 10% of cases involving death). Moreover, given the constant increase in demand, carriers in Rwanda and Burundi often import secondhand vehicles from left-hand drive countries with the passenger doors opening onto the traffic side. As such, in Rwanda and Burundi with right-hand driving, passengers are often exposed to road accidents. The Governments are aware of this situation and intend to take the following measures to improve road safety: (i) organize campaigns to raise awareness to the need to respect the highway code and for people to be self-disciplined when travelling; and (ii) conduct a systematic technical inspection of vehicles. Such technical inspection will be conducted in Rwanda by a private operator to whom the contract is being awarded, while in Burundi, the task devolves upon a state corporation, the Public Transport Authority (OTRACO). Moreover, the Government of Rwanda has, since 19 May 2006, forbidden the importation of vehicles with the steering wheel on the right; existing ones have four years to be removed from circulation. The Government of Burundi intends to take similar measures. Traffic In Rwanda, traffic data on the road network is collected, but not in a regular manner. Traffic varies according to the state of roads and their distance from the capital. It is heavier on the asphalt road network than on the unasphalted network. The results of the last count made in 2003 show that traffic is heavier on asphalt roads and near Kigali, with an AADT of 200 to vehicles per day. The heaviest traffic is concentrated on the inter-state roads, the major ones being: Kigali-Gatuna (about vehicles per day), Kigali-Kayonza (about vehicles per day), Kigali- Gitarama (about vehicles per day) and Kigali- Ruhengeri (about 900 vehicles per day). Unasphalted, highly deteriorated roads carry the

23 9 least traffic, with less than 100 vehicles per day In Burundi, there has been no systematic collection of road traffic data for more than 10 years. Partial traffic counting is done during ad hoc surveys, and shows average daily traffic variations between 100 and 1500 vehicles per day. Surfaced roads and inter-state roads carry the heaviest traffic, exceeding 1000 vehicles per day. Conversely, unsurfaced roads and highly deteriorated roads carry the least traffic, with less than 100 vehicles per day. 3.3 Road Transport Industry The road transport industry is liberalized in both Rwanda and Burundi, where it is managed by private carriers operating as individuals or as companies, as well as by public transport state corporations. There are no major administrative constraints on access to the profession of road carrier, and operators can freely choose their routes. Three categories of operators share the public passenger transport market: (i) minibus operators; (ii) the National Public Transport Authority (ONATRACOM) in Rwanda and the Public Transport Authority (OTRACO) in Burundi; and (iii) township taxi proprietors. In Rwanda, ONATRACOM, which operates as a public utility, currently has a transport capacity of seats, which is about 7% of that of private operators. There are plans to raise this capacity to seats in As concerns OTRACO in Burundi, it has a transport capacity of about 1000 seats. These two authorities offer the advantage of providing regular service to the provinces and provincial markets as well as to poorly accessible areas. Because most private vehicles are in a very poor state, the domestic transport service is still limited In both countries, taxis generally operate only in major urban areas, particularly (i) Kigali, Gitarama, Kibuye, Ruhengeri, Cyangugu and Gisenyi in Rwanda; and (ii) Bujumbura Gitega, Muyinga, Ngozi and Kirundo in Burundi. All the same, given the rising cost of living and easier access to the various areas of activities, these taxis are increasingly facing keen competition from cycles (motorcycle and bicycle taxis). There is also keen competition on the international freight transport market, especially between Rwandan and Burundian carriers and those of transit countries (Uganda, Kenya and Tanzania). With several operators on the market leading to lower fares, passengers stand to benefit. 3.4 Road Construction Industry The road construction industry is poorly developed in both Rwanda and Burundi because of not only their as yet limited economic development and restricted domestic markets, but also poor integration of regional markets. Both countries are far from ports and ought to develop their road construction industry, based on local materials, in order to limit the importation of materials, especially heavy equipment whose high costs weigh heavily on road construction and infrastructure maintenance costs There are no major national road construction companies in Rwanda and the country therefore has to resort to foreign companies through national or international competitive bidding. Over the last years, only three international companies have executed most of the important road infrastructure contracts. Some forty small- and medium-scale national enterprises (SME) are currently involved in road maintenance. Their performance is gradually improving, although they are still grappling with many difficulties, particularly with respect to their administrative and financial management, equipment and the lack of experience by personnel. Accordingly, they cannot be awarded any major contracts and they are often blamed for delays and frequent failures in contract execution.

24 With regard to studies and control of works, there has been significant growth in the number of local engineering firms set up within the last few years in Rwanda; some ten engineering firms have been registered, with four working on projects and road maintenance. However, most of them are facing difficulties arising from their low technical capacity, poor financial situation and weak administrative set-up. As a result, most often, the majority of road study projects, the control and the supervision of works are carried out by foreign engineering firms. All the same, a few local engineering firms have started making headway in studies and the control of average-size road projects, either alone or in partnership with foreign firms Capacity building for local SME is one of the major concerns of the construction industry. As part of the project to lend institutional support to the Ministry of Infrastructure (MININFRA), the Government intends to organize training seminars for SME in the preparation of bids (fixing of unit prices, preparation and presentation of bids, field trips, financial management, etc.) The aim is to foster the emergence of SME specialized in road construction that can soundly manage not only road works but also their own finances. In this respect, support to SME will be boosted thanks to EDF funding Generally, there is no problem in the supply of natural road construction materials in Rwanda which has abundant reserves that are easy to quarry. Deposits of movable materials (alluvium, sand; rough gravel, volcanic scoria, puzzolan, mine trailings and quartzite), firm or slightly altered rock are found at average distances not exceeding 15 km. However, these high quality materials are not exploited industrially since quarries are opened only for nearby construction works Burundi s road construction industry is also still under-developed as regards extraction, the manufacture of materials as well as the conduct of studies and execution of works. Yet there are substantial deposits of natural road construction materials (sand-gravel aggregate, sand, gravel, rock) throughout the country. Manufactured materials have to be imported from far off and this seriously raises their prices. Few national enterprises can fulfil the qualification criteria for major road projects on account of the long period of crisis. Consequently, foreign enterprises are called in through international competitive bidding. Because of the long distances, there are generally few bidders, which also accounts for their relatively high bids Through various facilitation measures and the training of SME staff and managers, particularly in roadworks management, the Government of Burundi has taken intitiatives to encourage the establishment and development of SME (enterprises and engineering firms) in this sector. The total privatization of road maintenance has become a reality in recent years, and should also lead to the strengthening of the SME fabric in the road construction industry. 3.5 Road Network Management and Staff Training Rwanda s road network is managed by the Ministry of Infrastructure (MININFRA) through the Planning, Policy and Capacity-Building Unit (UPPR), which replaced all the central directorates previously in charge of roads, energy, transport and housing. Due mainly to the shortage of human and financial resources, the Unit is currently facing major difficulties in performing its duty of maintaining the road network. MININFRA also comprises two other entities, namely the ICT Unit which is in charge of communications

25 11 and the Administrative and Financial Resources Management Unit. Other bodies involved in the management of the road network include (i) the National Tenders Board (NTB) which is responsible for awarding all goods, works and services contracts; (ii) the Road Maintenance Fund (FER) responsible for financing routine and periodic road maintenance works; and (iii) the regional and local authorities in charge of managing their own rural road networks The management and implementation of investment programmes in the road subsector should really improve once the Road Agency set up by a decree issued in April 2006 is put in place. This is planned to take place before the end of The autonomous Agency will be managed as a commercial entity. An EDF-funded study will determine the modalities of its functioning. Bidding for the recruitment of experts is near finalization All donors in the sector are currently concerned about strengthening the institutional capacity for road management. In this respect, ABEDA is providing assistance to Rwanda s UPPR, which is responsible for roads, for the management and setting up of a database on civil engineering structures. Under an agreement signed in 2002 with the Government, relating to institutional support to MININFRA, the EDF is financing the monitoring and management of FER as well as the training of workers of public works SME and engineering firms in the preparation of tenders (preparation of bidding documents, fixing of unit prices, costing of works, presentation of bids, monitoring and management of contracts, etc.). The World Bank s ongoing investment programme will include a reform support component to finance several studies, notably the updating of the transport sector policy and transport strategy, updating of the classification of the road network, and the training of grassroots communities in the domain of maintenance of national roads. World Bank funded equipment and training (in road engineering and maintenance) under the road infrastructure and the Gitarama-Ngororero-Mukamira road projects will supplement the interventions of other donors and enable operational and technical capacity-building for UPPR. These training programmes are just starting, and as such this project does not include capacity building for Rwanda In Burundi, with the reform started in 2002, the Ministry of Public Works and Equipment (MTPE) is responsible for the road sub-sector. The main aim of the reform is to boost efficiency in the sector through capacity building for the Ministry and the setting up of autonomous entities. The Ministry s role will be limited to policy formulation, overall coordination of the sector and strategic planning. The entities set up are: (i) the Road Board (OdR), which oversees the planning and supervision of roadworks; it is both the principal contractor and project owner delegate for construction and maintenance works; (ii) the Equipment Rental Agency (ALM) which has taken over the equipment pool of the former General Directorate of Roads and leases equipment to private operators; (iii) the National Road Fund (FRN) which is responsible for mobilizing and managing road maintenance resources. The reform sanctions the total privatization of all activities relating to works, studies and control of new and road maintenance projects, excluding the National Building and Public Works Laboratory (LNBPT) which is being prepared for privatization The years of warfare also affected the training of professionals and workers of the road sub-sector. Project financing was interrupted, thus leading to a halt in training. Moreover, many of these officers and workers have left the sub-sector in search of better jobs either in the private sector or even outside the country. Therefore, OdR s technical and operational capacities are inadequate to enable it to perform its duties efficiently. The current project includes capacity building to boost its performance and supplement the actions of other donors involved in the sector.

26 Road Maintenance In Rwanda, MININFRA is responsible, through the roads service, for the road maintenance policy. The roads service plans, programmes and monitors maintenance works on the classified road network. It draws up a programme which is examined by the Board of Directors of the Road Maintenance Fund (CAFER), and validated by the Council of Ministers prior to implementation. Periodic road maintenance works devolve totally upon SME, following invitations to tender administered by the National Tenders Board (NTB). For routine maintenance works, the Ministry of Infrastructure signs contracts with SME and the districts which are supported in the case of feeder roads, by village communities (which clear the roadside and gutters once a week on a voluntary basis) and roadmenders. On account of the constraints mentioned in paragraph above and which will be solved soon with the imminent establishment of the Road Agency, the UPPR is facing difficulties in efficiently carrying out these activities As part of the ongoing decentralization process, the decentralized services have been entrusted with the planning, programming and monitoring of maintenance work on provincial and council roads, including feeder roads. These services will be empowered to take decisions in respect of road maintenance, and accordingly will be able to directly inform CAFER of their maintenance programmes. However, pending the effective setting up of the decentralized maintenance services, UPPR continues to oversee the provincial and district road network At the institutional level, the Government, together with Rwanda s development partners, is preparing a Road Maintenance Strategy Paper. The paper will describe the state of the road network and engineering structures as well as of road traffic, and establish, by category, maintenance standards and frequency. The donor contributions mentioned in paragraph will further make it possible to curb the above-mentioned constraints The Ministry of Public Works and Equipment (MTPE) oversees the road subsector in Burundi. Now, it also has oversight over rural roads, which were previously under the Ministry of Rural Development. Municipal authorities are responsible for the management of urban roads in Bujumbura and Gitega, except for roads leading onto national roads In Burundi, both the OdR and the National Road Fund (FRN) are responsible for road maintenance. The OdR is in charge of programming and monitoring maintenance works which are carried out by private operators only. The FRN, for its part, is in charge of raising road maintenance funds. Since the road sub-sector was restructured in 2002, road maintenance works devolve mainly on private enterprises, generally SME which carry out routine maintenance, mostly mending. Periodic maintenance, which for now is externally financed, is entrusted to enterprises through competitive bidding which is subject to the demands of the funding bodies A new policy is being envisaged; it will consist in separating mechanized maintenance, which will still be entrusted to SME and other large enterprises, from mending, which could be reserved solely for organized village communities. The main aim of this policy is to get village communities involved, and to provide jobs to the demobilized and the unemployed in rural areas. This could be an interesting approach, especially for low traffic and feeder roads, since it offers the possibility of carrying out labour-intensive works.

27 Financing of Road Investment and Maintenance In both Rwanda and Burundi, road investments are financed through external resources obtained from bilateral and multilateral donors. Such financing concerns both new works (reconstruction, rehabilitation) and periodic maintenance works which were delayed by the crisis experienced by the two countries. Road maintenance covers both routine and periodic maintenance. Although both countries have relatively small road networks, they are not yet able, through their autonomous road funds, to mobilize enough domestic financial resources to adequately cover their road maintenance needs. The needs are immense, and far exceed the amounts that can be mobilized through ordinary savings; this explains why development partners come in, even for maintenance. This financing had been suspended for several years before being resumed, first for Rwanda, and then recently for Burundi. Financing of road investments In Rwanda, operations currently underway or nearing completion are financed by several donors. The ADF is co-financing the road infrastructure project and the Gitarama- Ngororero-Mukarima road project, to the tune of UA 15 million and UA 15.2 million respectively. EDF financing of 82 million euros covers the rehabilitation of the Kigali- Kayonza, Gitarama-Butare-Akanyaru and Ruhengeri-Gisenyi roads. ABEDA and the OPEC Fund are contributing US$ 7.5 million and US$ 6.5 million respectively to finance the asphalting of the Kicukiro-Kirundo road. ABEDA is further financing the feasibility study for 300 km of road in Kigali, and the asphalting of the Ngororero-Mukamira road, to the amount of US$ 0.33 million and US$ 10 million respectively. The KFD and the OPEC Fund are each contributing US$ 10 million to the financing of the Ngororero-Mukamira road. For its part, the World Bank is, through an IDA credit, co-financing, with Japan, a preliminary study on a major investment programme in the transport sector, including the road sub-sector, and the updating of several instruments regulating the transport sector (transport policy, road safety, and classification of the road network). The World Bank is also financing the rehabilitation of the Kigali-Ruhengeri road and the infrastructure and urban management project, to the tune of US$ 37 million and US$ 20 million respectively. The People s Republic of China is financing the asphalting of the Utexrwa-Kinyinya road for an amount of 12.3 million Yuan (US$ 1.49 million); The Government of Rwanda is contributing to the financing of these operations through counterpart funds whose amount varies according to the funding partners. The Government has already obtained the equivalent of US$ 27 million from ABEDA, the OPEC Fund and the SFD for this project It is only recently that donors resumed their interventions in Burundi. IDA, the EDF and the ADF are the main development partners. Since 2001, the EDF and IDA have financed several construction, rehabilitation and periodic maintenance operations (studies and projects). These include: (i) the construction of the Gitega-Karuzi-Muyinga road for an amount of FBU 24 billion; (ii) the development of NR 13 and 19 for an amount of FBU 25.8 billion; rehabilitation and periodic maintenance works on NR 3, 4 and 10 for more than FBU 13.4 billion; and the rehabilitation of engineering structures for FBU 5.4 billion. An amount of FBU 1.5 billion was spent on road studies. These operations also include institutional support such as capacity building for the OdR and the National Road Fund and studies to reorganize the sub-sector. Bilateral partners and international NGOs also provided funding, especially for agricultural feeder roads.

28 14 Financing of road maintenance In Rwanda, the UPPR is responsible for preparing maintenance programmes for classified roads, while regional and local authorities are responsible for unclassified roads. Road maintenance is financed by the Road Maintenance Fund (FER) which was set up in 1998 and became truly functional in This second generation Fund has the status of a public establishment endowed with legal personality and administrative and financial autonomy. Its main duty is to finance road maintenance (works, control, technical and financial auditing). It derives its resources from the road use levies on petroleum products, toll royalties paid by foreign vehicles, the axle tax, overload fines paid by transport vehicles, fines for damage to roads, possible state contributions, and gifts and contributions from bilateral or multilateral aid bodies. FER is managed by a general manager under the supervision and guidance of a Board of Directors (CAFER) whose duties include: (i) examination and adoption of the annual road maintenance budget prepared by the UPPR; (ii) definition of modalities for the collection of FER resources; (iii) establishment of criteria for allocating resources to various maintenance works; and (iv) initiation and supervision of the audit of FER accounts. Such audits are conducted annually by the Auditor General of the Ministry of Finance and an independent auditor About FRW 3.2 billion is needed annually for the routine maintenance of Rwanda s road network, while about FRW 7 billion is needed for periodic maintenance. The following table shows trends in FER s financial situation. Year Requirements (FRW billion) Income (FRW billion) Source: Road Maintenance Fund In Rwanda, FER s income covers 63% to 85% of its financial requirements. However, FER is already able to cover the routine maintenance requirements of the classified network, which are estimated at FRW 3.2 billion. The Government still seeks the assistance of development partners to meet periodic maintenance needs. To this end, the EDF plans to provide institutional and financial support to FER to boost its operational capacity and contribute to the financing of the maintenance of the road network. In addition, a new FER Board of Directors was appointed in 2006 in a bid to revitalize the establishment Options envisaged by the Rwandan Government to improve FER s financial situation include notably: (i) raising the tax on petroleum products from US$ 0.05 to US$ 0.1/litre; (ii) levying a tax on vehicle registration. These options should enable FER to raise additional resources estimated at FRW 4 billion. The ongoing EDF-sponsored study will determine the modalities for putting these resources in place. These various measures should help to improve road maintenance. As already stated in paragraph 3.5.3, the EDF intends to provide significant assistance to FER. Financing of road maintenance in Burundi In Burundi, road maintenance is financed from the resources of the second generation National Road Fund (FRN) set up in 2001 to provide sustainable investments. The FRN became operational in 2003, although external funding is still required during this transitional period for the rehabilitation of the road network. Besides external funding, the

29 15 FRN derives its resources from taxes on petroleum products, vehicle taxes, taxes on driving licences and vehicle registration papers, and toll gate proceeds. Income for 2006 is estimated at FRW 3 billion, as against about FRW 7 billion needed. The following table shows trends in the FRN s financial situation. Year Estimates (FBU billion) Expenditure (FBU billion) The FRN s income covers about 60% of routine maintenance needs for the classified network. Income estimated for 2006 sis FBU 3.47 billion as against about FBU 7 billion needed. The Government will continue to depend on external assistance from development partners to meet periodic maintenance needs Measures envisaged by the Government of Burundi to overcome the FRN s financial difficulties include notably: (i) defining a classified priority network of 1500 km for maintenance; this task is nearing finalization under the Road Sector Development Project (PDST) funded by IDA; (ii) a substantial increase in the levy on petroleum products, earmarked for the FRN; in this respect, the Government will need to meet the conditions of the IDA credit relating to the PDST. Under these conditions, the levy on petroleum products will be raised by FBU 20/L in 2004, FBU 30/L in 2005, FBU 40/L in 2006, FBU 60/L in 2007 and FBU 80/L in These new rates are already applicable; (iii) direct involvement of rural communities which should lead to a substantial reduction in the cost of secondary road works and ease the FRN s financial burden. Moreover, within the context of debt relief for heavily indebted poor countries, the FRN will be allocated the sum of FBU 2.6 billion for the rehabilitation of earth roads. 4. THE PROJECT 4.1 Project Design and Rationale The Kicukiro-Kirundo road is part of national highway No. 14 (RN14) in both countries. It comprises three sections, two of which are in Rwanda: Kicukiro-Mayange and Mayange-Nemba-Burundian border, and the third in Burundi: Rwandan border-gasenyi- Kirundo. At present it is an ordinary earth road, hardly developed, with few structures to drain rain water; it is winding, with sharp bends. On the Rwandan side, it is built on a hilly landscape, with gentle slopes apart from two difficult areas with sharp slopes. The surface course is made of natural earth, filled with laterite at some points. On the Burundian side, the road is totally situated in a shelf area, with some low lying marshy areas; there are hardly any drainage structures, with the result that the road is exposed to serious rain erosion. The project road leads to the capital Bujumbura through an already asphalted section, with a double-layer coating, in relatively good state The regions through which the project road runs, particularly Kicukiro and Bugesera districts in Rwanda and Kirundo Province in Burundi, despite their foodstuffs and agro-industries, feature among the most enclaved and poorest areas. Hence, improving the state of the project road is a requisite for poverty alleviation in these regions. Moreover, the road is a link of the North Corridor connecting Rwanda and Burundi to the port of Mombasa (Kenya), through Uganda. In this respect, the Kicukiro-Kirundo road to be asphalted will constitute a safer route to Bujumbura for drivers from Kigali. The landscape is

30 16 gentler than that of the second currently asphalted road also linking Kigali to Bujumbura through Butare and Akanyaru (Rwanda/Burundi border) Studies (technical, economic, environmental and social) have been conducted on the Rwandan and Burundian sections of the road by international engineering firms. For project appraisal purposes, the studies, including construction costs, were systematically updated. The design retained takes into account the topography, rainfall, hydrography and land use in areas crossed. It also takes account of the volume of traffic and availability of road construction materials. Various development options were examined, and the optimum solution for each section has been considered under this project. The speed limit adopted in the studies for both the Rwandan and Burundian sections is 80 km/hr in normal areas and 60 km/hr in difficult (hilly) areas The Rwandan section of the road is designed with a 9m large platform having a 6m roadway and 2 (two) shoulders of 1.5m on each side. In urban areas the shoulders are replaced by a 2m sidewalk and 20m long public parking areas. The road also has a rain water drainage system consisting of stonework gutters situated behind the sidewalks. There is only one major bridge on the Rwandan section. It is a mixed bridge (steel/mortar) situated in Lot No. 1, 100m long to be built over the Nyabarongo river. The Practical Guide for determining road dimensions for tropical countries (Guide pratique de dimensionnement des chaussées pour les pays tropicaux (CEBTP 1980) was used to determine the structure of the roadway. The roadway and surface coatings were calculated on the basis of a 13 tonne axle load and total traffic for the service life of the road. The surface course retained comprises: (i) an improved subgrade in natural sand-gravel aggregate with a thickness of 15 cm to 30 cm depending on the foundation soil, (ii) a foundation coating in natural sand-gravel aggregate 15 cm thick and a base course of 15 cm thick crushed sand-gravel aggregate. The road surface is coated with asphaltic concrete 5 cm thick The section in Burundi has a standard cross-section comprised of a 9m large platform with a 6 m roadway and two shoulders of 1.5m each. The road has drainage facilities (scuppers and culverts), but no major engineering structure. The dimensions of the roadway were determined according to the type of platform soil and volume of traffic, in accordance with the standards laid down by the Guide pratique de dimensionnement des chaussées pour les pays tropicaux (CEBTP 1980). The roadway and surface coatings were calculated on the basis of a 13 tonne axle load and total traffic throughout the service life of the road. The structure uses the previous platform, and further comprises: (i) a foundation coating of natural sand-gravel aggregate 15 cm thick and a base course of stabilized sand-gravel aggregate 15 cm thick. The road surface has a double-layer coating Identical geometric features have been retained for the road sections in Rwanda and Burundi. The findings of the road studies determined the final choices of the types of roadway. The following factors dictated these choices: (A) climatic and relief conditions. The roadway of the Rwandan section (base course in crushed sand-gravel aggregate and asphaltic concrete) is necessitated by the harsh (hilly) relief and heavy rainfall in the area. The Burundi section is situated in a shelf area with average rainfall; (B) economic factors (heavier traffic on the Rwandan section). The choices of the type of roadway are further determined by the need for harmony in sections following each other, and to respect continuity in technical design. Indeed, on the Rwandan side, the road section (Mayange- Kicukiro) financed by ABEDA, the SFD, the OPEC Fund and the Government of Rwanda

31 17 has the same design for the roadway (asphalted concrete surface). Similarly, in Burundi, the section linking Kicukiro (end of the project road) to Bujumbura has a double-coated surface which is more than 10 years old but is still in good state In keeping with the integrative goal of the project, there are plans to construct a common border crossing which will help to facilitate the transport and transit of goods through the imminent harmonization of procedures and the creation of joint bureaux and technical facilities. The crossing will be located in an extra-territorial area commonly agreed upon by the two countries, located across their physical border. It will comprise administrative buildings and premises for users and operators. Its design is modular, so that it can be adapted to growth in the volume of activities At the request of the beneficiary population, a feeder road component was included to enable optimum use of the road to which all the feeder roads retained are linked. The choice of these roads was also made together with the beneficiary population, on the basis of socioeconomic criteria, with the aim of providing access to a maximum number of persons and socio-collective infrastructure (schools, health facilities, markets). Their standard of development was determined in accordance with the programmes adopted in the two countries, and taking into account the low number of vehicles plying of these feeders Concerning institutional capacity, the project took into consideration the special case of Burundi, which is just emerging from a long period of crisis during which the road sub-sector was virtually inactive, losing a substantial part of its staff and levels of performance. Considering the present institutional weaknesses of the OdR, which is in charge of road management, the project includes plans to strengthen the OdR s technical and operational capacities in a bid to boost its performance. The project also took account of ongoing or planned efforts in Rwanda to build the institutional capacities of MININPRA. These efforts are financed by the ADF, ABEDA, the World Bank and the EDF The final design of the project also took account of the outcomes of consultations organized within the context of the participatory approach. Through consultations with the population and other stakeholders in the project area (NGOs, civil society, carriers, the private sector, farmers, industrialists and craftsmen), their various concerns were taken into account, especially to minimize the demolition and expropriation and make sure that urban or production areas are either serviced or avoided. Other concerns included the protection of socioeconomic facilities (schools, health centres and markets) and the construction of shelters and information centres along the road Also taken into account are: (i) the Bank s operations in the two countries, as well as those of the World Bank in the transport sector, particularly operations aimed at transport and transit facilitation in the EAC region. These operations seek to harmonize customs and transit practices as well as improve the functioning of transport corridors by reducing nontariff barriers and introducing various facilitation measures; (ii) Bank interventions planned for Rwanda s agricultural sector, in Bugesera district, with the aim of boosting food security, and reviving and increasing agricultural output; (iii) agricultural and access road projects under way in Bugesera, financed by Luxembourg Cooperation; and (iv) the water supply project underway in Bugesera (Rwanda), financed by the EDF, and in Kirundo (Burundi) financed by KfW.

32 The project was designed specially with the following lessons in mind: (i) the need to place emphasis on capacity building for roads services, in a bid, not only to efficiently execute the project, but also to implement future projects in the two countries; (ii) the need for the countries concerned to get totally involved in economic integration multinational projects, considering the difficulties in collaboration, especially as concerns common border crossings Moreover, this project is just a supplement to actions undertaken by various donors to boost the efficiency of the two main corridors, the North and Central Corridors, starting from the seaports of Mombasa and Dar-es-Salaam. These operations funded by the World Bank, USAID and the Bank notably comprise physical actions to rehabilitate and improve infrastructure, and studies on the formulation of transport and facilitation policies aimed at eliminating non-tariff barriers, and setting up and managing common border crossings equipped with weighbridges and scanners. At the same time, assistance will be provided to strengthen the institutional capacities of North Corridor bodies, and to effectively set up those of the Central Corridor, which should thus become true development Corridors The project objectives are in keeping with the PRSP of both Governments. They are in line with the Bank s vision and conform to the CSP guidelines for Rwanda and Burundi for the period relating to the development and rehabilitation of regional integration road infrastructure. The project will therefore contribute to poverty reduction, environmental protection and improvement in the living environment and conditions of the population. It is a significant element in the advancement of rural women. Meetings between the project appraisal mission and donors represented in Rwanda and Burundi made it possible to coordinate the various interventions in the sector and in the project impact area (particularly in Bugesera in Rwanda and Kirundo in Burundi). The design of the project was also inspired by lessons learnt from our past and ongoing interventions in Rwanda and Burundi as well as those of other donors, particularly with respect to public procurement, project management, and mobilization of counterpart funds, sustainability of investments and the inclusion of socioeconomic infrastructure benefiting riparian populations. The project also draws on the recent experiences of the Bank and the World Bank in facilitation at common border crossings in the West African Economic and Monetary Union (WAEMU) zone. 4.2 Project Area and Beneficiaries Delimitation and features of the area The project road passes through: (i) in Rwanda, Kicukiro District (which is part of Kigali City) and Bugesera District, situated in the East Region; and (ii) in Burundi, Kirundo Province. Because local roads form a whole network with the project road, the population and socioeconomic facilities of these districts and province will directly benefit from the impacts of the project. These districts and province therefore make up the direct impact area (PIA). The extended impact area of the project covers all the two countries. The PIA is characterized by an average temperature of 20.7 C and annual rainfall ranging from 700 mm to mm. The river system in Rwanda and Burundi is divided into two versants situated on both sides of the Congo-Nile Crest, the Congo basin and the Nile basin.

33 19 Population and poverty profile in the area The direct beneficiaries of the project comprise the inhabitiants of Kicukiro and Bugesera districts in Rwanda and Kirundo Province in Burundi. The total population is estimated at million, 44.3% in Rwanda and 55.7% in Burundi. Since Kicukiro forms part of Kigali urban area, its population structure is predominantly urban (about 80% of the total population) with an average density of 1700 hts/km². Bugesera district, for its part, has a density corresponding to the national average (336 hts/km² in 2002), with an essentially rural population, thus reflecting the low rate of urbanization of the country (hardly 17% in 2002). Kirundo s population is equally rural and large, with a density of about 351 hts/km², which is above the national average of about 262 hts/km². Kirundo s high population density is accounted for by the flow of returning migrants as result not only of the consolidation of peace but also of an annual natural growth rate of about 2%. The population is young (about 66.5% in the under-25 age bracket), corresponding to that of the whole of Burundi. Life expectancy dropped from 51 years to 48 years between 1998 and According to the findings of the integrated Full Family Living Study in Rwanda (2000/2001), the monetary poverty line was estimated at Rwandan francs (FRW) per capita per year, and extreme poverty at FRW , that is, the equivalent of 140 and 100 American dollars. According to these data, 60.3% of Rwandans are poor, and 41.6% extremely poor. The direct consequences of the 1994 crisis considerably heightened the degree of poverty, such that in 1997 the number of poor people peaked at 70% of the population. As a result of this situation, social infrastructure in the domains of health, education and transport was seriously affected, and the quality of services rendered, which was already inadequate before the crisis, deteriorated on account of the shortage of human and financial resources The structure of Rwanda s population has been permanently affected by the sociopolitical crisis. Indeed, women make up about 52% of the population, and the number of households headed by women is particularly high (40% in 2000 as against an average of about 20% for Africa). Some 78% of these women heading households are widowed. It is worth noting that there are also a significant number of minors heading households (about nationwide). In rural areas where 80% of the population live, besides the tendency for female dominance, the population is relatively young and the average size of households is five persons. Urban areas are remarkable for their male domination, which is accounted for by the often selective migration in favour of men who come to town in search of jobs Generally, social infrastructure and public utility indicators reveal problems mainly relating to: (i) access to drinking water which, at a rate of 49.8%, is still low in Bugesera; (ii) the low level of sanitation; (iii) the inadequate availability of basic health facilities in the PIA, and (iv) the still low school enrolment rate (60% as against 70% at national level). This profile of social indicators explains the extreme and deepening poverty. Malaria is the leading cause of morbidity and mortality in Rwanda, accounting for more than 50% of consultations in health facilities and about 34% of all deaths. Furthermore, the issue of HIV/AIDS is of primary importance in an area noted for its considerable migratory flows especially as concerns men, and the development of trade with border countries. In 2002, the AIDS prevalence rate was 6.9% and 3% in urban and rural areas respectively. It should however be noted that the Rwandan section of the road project is covered by the Bugesera- South DWS and Karenge Water and Sanitation Reinforcement project which is under

34 20 implementation and funded by the EDF. This intervention, like those of other donors (some ten projects), is carried out within a concerted framework known as the National Rural Water and Sanitation Programme (PNEAR) which addresses various problems in the sector It is not easy to precisely assess the scope and structure of poverty in Burundi, given the scarcity of reliable, disaggregated data. The only household survey through which the scope of poverty was directly measured dates back to That survey revealed that poverty indicators deteriorated over the last ten years. The incidence of poverty almost doubled between 1992 and 1998, rising from 35% to 66%. Both urban and rural areas were affected by this phenomenon. The survey revealed that households headed by women (divorced or widowed) are more vulnerable to poverty. According to an opinion poll conducted in 2004 by the World Bank on the perception of poverty by the people of Burundi, 40% of respondents consider themselves poor, 80% believe that poverty has remained constant or even increased during the last five years, while 50% even state that it has increased sharply. In the case of Burundi, which was confronted with rather latent, and most often open, civil war during the decade , the state of poverty does not seem to have improved. In 2003, the United Nations system estimated that there were about 1.2 million internally displaced persons in the country, including those who had taken refuge in other countries, of whom in Tanzania. With respect to access to drinking water, the gross rate of access in Kirundo Province is only 52.9% compared with about 70% at national level. This is because of the high number of water supply infrastructure in disrepair. A KfWfunded project however covers the province The health infrastructure and services of the Kirundo Province, like those of most regions of the country, are hardly functional. As a matter of fact, insecurity and poor working conditions have exacerbated the paralysis of health services in rural areas and the instability of health personnel, who desert rural areas to concentrate in chief-towns. In 2003, Kirundo Province had one physician per persons. Growing pauperization is compounded by problems relating to geographical accessibility and quality of service delivery, thus creating an eminently complex situation with respect to the treatment of diseases, including malaria and the AIDS pandemic. The AIDS prevalence rate, which tends to be higher among females (56%), is 2.5% in rural areas and 9.4% in urban areas. Apart from these two ills, the overall health situation in the province is clinically characterized by the presence especially of diarrhoeal diseases and respiratory tract infections Concerning education, in Burundi, efforts made before the crisis had raised the gross primary enrolment ratio to 70% in , as against 64% in For Kirundo Province, the rate was 22% in 2003/2004. Furthermore, the repeater and drop-out rates are very high. The province is suffering from a shortage of teachers at the primary and secondary school levels, lack of teaching aids, and the poor state of school premises. Lastly, with regard to transport, the Poverty Reduction Strategy Paper establishes a direct link between limited access to transport services and the deterioration of socioeconomic indicators. Economic activities of the area In both countries, the economy of the project impact area (PIA) is based on agriculture and stockbreeding. Agriculture employs more than 90% of the population who are engaged mostly in food crop and cash crop production and, to a lesser extent, in market

35 21 gardening and fruit growing. This farming population is dominated by women who grow food crops and are responsible for transporting the harvests.men engage mostly in cash crop production, banana beer production and stockbreeding.the production system is based on a multitude of small family holdings (national average of 40 ares per farmer). Concerning stockbreeding in the PIA, the extensive system is the principal method of stock production, but semi-intensive systems are being developed under the effect of population pressure and the need to associate stockbreeding with agriculture in order to restore and maintain soil fertility. The development of stockbreeding is still dependent on the following factors: (i) existence of problems of livestock feeding and watering due to lack of access to some water points, (ii) problems of animal health, and (iii) the low level of professionalization of stockbreeders organizations. Given the features of both countries, the production systems of the PIA are undergoing a slow but irreversible evolution, because of population pressure and the fragmenting of farm units, which lead to an integration of agriculture, forestry and animal husbandry In Rwanda, the PIA has diverse characteristics. Economic activities in the district of Kicukiro are dominated by the tertiary and secondary sectors, as a result of its urban nature. Farming is relatively less developed here. However, cropping is essentially food crop production, mostly market gardening crops, maize and banana. In the district of Bugesera, 93% of the active population are engaged in agro-pastoral activities. The main crops grown are sweet potatoes, cassava, banana, green beans and sorghum. In terms of volume of production, tubers and banana rank first and second respectively, with an average production for of more than tonnes for tubers and tonnes for banana. It should be noted that the project area is a major source of supply of food and market gardening crops to the town of Kigali, even though such supply is hampered by the exorbitant cost of transportation caused by the poor state of the road network. Stockbreeding is relatively well developed, with the rearing of mostly cattle, goats and poultry. Stockbreeding and agriculture provide most of the jobs in rural areas In Burundi, a variety of food crops are produced in the PIA, the most prominent of which are, by virtue of the quantities produced and their destination (consumption/marketing): banana, sweet potatoes and cassava, which are the people s staple food. In 2005, these crops accounted for 92% of the total food production of Kirundo Province. Although coffee is the most marketed crop on the domestic market, Kirundo Province and the other northern regions produce mainly coffee fruits (67% of national production). Tobacco and common sunflower are also grown in the project area. Concerning stockbreeding, 20% of farmers have cattle, 45% rear small ruminants (sheep and goats), and the rest engage in pig rearing (5%) and mixed stockbreeding (30%) dominated by poultry and rabbits. The socio-political crisis which erupted in October 1993 greatly affected the stockbreeding sub-sector, because from the beginning of the crisis, cattle and stockbreeding facilities were the principal targets Despite constraints relating to the state of roads and food security, trade is an important activity in the economy of the PIA. It mobilizes a major part of the population, especially women and the youth, and generates income. The population of the PIA engage in constant trade on weekly markets, the most prominent of which are: (i) in Burundi, Bugabira and Busoni markets, and (ii) in Rwanda, the markets of Nyamata and Ruhuha (which is currently being rehabilitated and which extends to the provinces bordering Burundi), as well as those of Kabukuba, Rugarama, Batima, Rilima, Ruhuha, Nyakayaga and Shyira. These

36 22 markets are closely linked to the towns situated on the Bujumbura-Kigali corridor, as well as to Tanzania and Kenya, thus providing both countries access to the sea. However, the opening up of the production zones remains one of the major conditions for their greater integration into the sub-regional barter economy, and hence the improvement of the standard of living of their people. 4.3 Strategic Context Rwanda and Burundi have to seek more economical solutions, in terms of overhead costs and time, for their foreign trade given that they are landlocked countries far away from seaports. Opening up the countries is an even more crucial problem compounded by their rugged landform and heavy rainfall. Given their geographical position, the North and Central transport corridors are the preferred routes from the ports of Mombasa and Dar-es- Salaam, for Rwanda and Burundi foreign trade. For some years now, there have been successive investments in and studies on both corridors, with a view to improving their operation. Rwanda and Burundi are also making great efforts to revive the Economic Community of Countries of the Great Lakes (CEPGL) and to integrate the East African Community (EAC) which is a regional economic community comprising Kenya, Uganda and Tanzania The Kicukiro Kirundo road link offers a twofold advantage. It helps to open up simultaneously the district of Bugesera and the Kirundo Province, which are cut off because of the poor state of the road whose improvement will contribute to their development, considering their huge agricultural potential. To this end, the construction of feeder roads will enhance the opening up of these rural agricultural areas and the mobility of people settled far away from the road In addition, this road will constitute an alternative for trade between the two countries and in the direction of the North and Central corridors. It has fewer landform constraints and risks for motor vehicle drivers than the existing road. The decision taken by both countries to set up a common border crossing on the road shows their commitment to ensure their economic integration This road project is in keeping with the PRSP of the two countries whose main objectives are to develop the major transport roads in order to revive the economy of the countries, to improve the living conditions of the people and alleviate poverty in Rwanda and Burundi. The project will also contribute towards the achievement of the Millennium Development Goals through: (i) the reduction of poverty and food gap thanks to a more regular supply of foodstuffs and an increase in the incomes of the most vulnerable groups, notably women and the youth; (ii) control of diseases such as sexually transmitted infections (STIs) including HIV/AIDS by raising the awareness of the population; (iii) environmental protection, by cleaning up the areas crossed by the project road. The project will equally ease mobility of factors of production by improving the traffic flow and will improve the living conditions of the population in the PIA In the road sub-sector, this project will be the first multinational intervention between Rwanda and Burundi, since the resumption of Bank cooperation with the two countries. The project reflects the will of their Governments to build economic development infrastructure likely to buttress the creation of wealth and efficiently combat poverty.

37 23 Furthermore, the project is in line with ongoing and programmed interventions of donors, notably ABEDA, the OPEC Fund and the SFD. Lastly, it should be recalled that the project is part of the priority investments recognized at the level of both ECCAS and NEPAD. As such, it is in line with the Bank s vision which lays emphasis on regional integration and facilitation of inter-state trade and trade between landlocked countries and those with access to the sea. 4.4 Project Objectives The sector goal of the project is to contribute to the strengthening of sub-regional integration and to facilitate trade between the two countries and with the outside world. The specific objectives of the project are: (i) to create an all-weather road link between Rwanda and Burundi, in order to open up the regions through which the road runs and reduce travel time and general transport costs; (ii) to contribute to the improvement of the living conditions of the people of the project impact area, and to poverty reduction; and (iii) to build the technical and operational capacities of the Road Board and border services. 4.5 Project Description Project outputs To achieve the above-mentioned objectives, the following are the expected outputs: Project components - 97 km of paved roads in a good state (60 km in Rwanda and 37 km in Burundi); km of developed feeder roads connected to the road (69 km in Rwanda and 80 km in Burundi); and 30 protected socioeconomic facilities along the road (schools, health centres, markets, etc.) of which 20 in Rwanda and 10 in Burundi; - construction and equipping of a common border crossing (a weighbridge, communication equipment); - technical and operational capacities built through: (A) the training/retraining of 55 workers (civil engineers, technicians, accountants, environmentalists, etc.) of the Road Board and provision, by technical assistance, of data-processing and office automation equipment to the Project Implementation Monitoring Unit, for its operation; (B) the sensitization of about ten workers of border services and 500 border crossing users to the management and operation of the common border crossing; the sensitization of about persons in the project impact area to (i) road safety, (ii) environmental protection, (iii) control of STIs including HIV/AIDS and other pandemics The project comprises the following four (4) components:

38 24 A - Road works: (a.1) (a.2) (a.3) (a.4) Lot No.1: Asphalting of the Kicukiro-Mayange road segment (40 km); Lot No.2: Asphalting of the Mayange - Nemba - Burundian Border (20 km) road segment, including environmental and social protection works; Lot No.3: Asphalting of the Rwandan Border Kirundo - Gasenyi (37 km) road segment, including environmental and social protection works; Improvement of 149 km of feeder roads (69 km in Rwanda and 80 km in Burundi); (a.5) Control and supervision of works for Lot 1; (a.6) (a.7) (a.8) (a.9) Control and supervision of works for Lot 2 and feeder roads in Rwanda; Control and supervision of works for Lot 3 and feeder roads in Burundi; In Rwanda, sensitization of people in the project impact area to: (i) road safety, (ii) environmental protection, (iii) control of STIs including HIV/AIDS and other pandemics; In Burundi, sensitization of people in the project impact area to: (i) road safety, (ii) environmental protection, (iii) control of STIs including HIV/AIDS and other pandemics. B- Transport and transit facilitation actions: (b.1) Construction and equipping of a common border crossing, including environmental and social protection works; (b.2) Control and supervision of works, including the sensitization of border services and users to the management and operation of the common border crossing. C- Institutional support to Burundi s Road Board: Technical assistance to: (i) support the OdR in monitoring the implementation of the project components devolving upon Burundi (technical, administrative, environmental, accounting and financial monitoring) and in road management, (ii) assist the OdR in training and retraining its technical staff (road engineers and technicians, transport economists and environmentalists), and (iii) ensure the monitoring and evaluation of the project.

39 25 D- Project management: (d.1) (d.2) Monitoring and coordination of the entire project; and Auditing of project accounts The works are subdivided into three (3) lots including two (2) in Rwanda and one (1) in Burundi. They are: (a) in Rwanda: Lot No.1 - Kicukiro-Mayange road segment (40 km); and Lot No.2 Mayange - Nemba Burundian Border road segment, covering a distance of 20 km in Rwanda; and (b) in Burundi: Lot No.3 - Rwandan Border Gasenyi - Kirundo road segment (37 km). Detailed description of project components Road works Kicukiro - Mayange - Nemba - Burundian Border road segment Works in this segment are subdivided into two lots (1 and 2) of 40 km and 20 km respectively. They include earthwork, construction and asphalting of the roadway, sanitation and drainage structures, signposting and safety. The roadway will be made up of a natural sand-gravel subgrade course (about 30 cm), a crushed sand-gravel aggregate base course (15 cm) and an asphaltic concrete surface course (5 cm). Some specific works recommended by the environmental and social impact assessment will also be carried out, like the adornment of the entry of urban centres, development of parking lots along the road at the level of villages for public transport, cattle crossings, safety infrastructure at the level of schools, markets and other public places along the road. Rwandan Border Gasenyi - Kirundo road segment This 37 km segment will be executed as a single lot. It will comprise earthworks, construction and asphalting of the roadway, sanitation and drainage facilities, signposting and safety. The roadway will be made up of a natural gravel sub-base course (about 30 cm), a natural stabilized sand-gravel aggregate base course (20 cm) and a double-layer surface course. Some specific works recommended by the environmental and social impact assessment will also be carried out, for instance embellishing the entry of urban centres, development of parking lots along the road at the level of villages for public transport, cattle crossings, safety infrastructure for schools, markets and other public places along the road. Related development This concerns the improvement of existing feeder roads connected to the project road and the rehabilitation of the socioeconomic infrastructure requested by the riparian population, during discussions held with them within the framework of the participatory approach. The improvement of feeder roads will cover 149 km (69 in Rwanda and 80 in Burundi), including environmental and social protection works. The works will entail mainly the opening of a 9m to 10 m slab, rectification of the alignments, placement of a 10 cm laterite roof-like cross-section surface course and construction of longitudinal road ditches. The building of drainage structures and treatment of break-points will be carried out in accordance with generally accepted engineering practices in order to enhance pavement-

40 26 holding quality. Control firms will ensure that contractors comply with contract specifications (technical control, verification of survey statements and the daily statements of work carried out and expenses incurred, acceptance of work) Thirty (30) socioeconomic facilities (school, health and market structures) along the road (including twenty in Rwanda and ten in Burundi) will be fenced as a security measure, and improved as required. A range closet will be constructed at the common border crossing. Rest areas will be constructed along the road for road users (carriers) as well as shelters for sensitization teams. In like manner, domestic sites will be used at the end of the construction work for social infrastructure needs. Road transport and transit facilitation actions As part of project studies, a master plan for the construction of the common border crossing between Rwanda and Burundi was drawn up. It comprises a whole set of road networks (main road equipped with a weighbridge, supervisory channels, parking lots) and service buildings (customs offices, immigration office), warehouses, toilets and rest areas, restaurant facilities for road users (drivers, passengers, and other workers). All this will be constructed on a 6 hectares piece of land, at the physical border between the two countries, at PK It will be developed gradually, depending on the progress of activities at the border. Within the context of this project, only the main road equipped with a weighbridge, buildings equipped with communication facilities and housing the offices of the various border services, and part of the road user restaurant/toilet facilities will be constructed. Works control and supervision The control and supervision of works will be carried out, in each country, by a consultancy firm. Each firm chosen shall be appropriately staffed to perform technical and administrative duties, and will be headed by a head of mission. In addition to supervising works, each consultancy firm shall also carry out awareness campaigns. For environmental monitoring, each consultancy firm shall have an environmental expert who will intervene throughout the implementation of the project. In conjunction with the environmentalist of the Project Monitoring Unit, each consultancy firm shall monitor the implementation of the Environmental and Social Management Plan (ESMP), manage the worksites, perform specific environmental and social tasks and seek solutions to selective environmental and social problems. Sensitization seminars Sensitization seminars will target the people of the PIA and will involve about persons. They will cover the following areas: road safety, environmental protection and the control of STIs including HIV/AIDS and other pandemics. These seminars with wide media coverage will be systematically coordinated with the activities planned within the context of national programmes, and the HIV/AIDS control programme support project recently approved by the Bank. The sensitization campaign will be conducted every six (6) months following project start-up, through panel-forums organized in public places such as markets, schools, health centres and districts and through various mediums (radio, television, billboards, banners, placards, etc.). The sensitization seminars will also target some ten workers of border services and about 500 users of border facilities and will concern the

41 27 management and operation of the common border crossing. Institutional support to Burundi s Road Board In order to contribute to the technical and operational capacity building of the Road Board, the project will finance an institutional support programme that will cover technical assistance to the Board and the training of its technical staff Technical assistance. A consultancy firm will be recruited and will place at the disposal of the Road Board two experts (a Road Engineer and a Road Projects Management Expert). Both experts will work within the Road Board, and will provide support to the Project Implementation Monitoring Unit throughout the implementation of the project. They will reinforce the OdR by contributing their expertise/experience in project management (technical, administrative, financial and accounting management of the project components in Burundi), road management and programming of road investments, and monitoring of road works and studies contracts. In addition, the two experts will assist the Road Board in coordinating the training programme, and in selecting cadres and technicians to be trained in various technical fields. Technical assistance will provide the Burundi Project Implementation Monitoring Unit with data-processing (two computers) and office automation equipment (two photocopy machines, a bookbinding apparatus, a scanner, a plan plotter, topography software, and a photofinisher) to assist in its functioning. It will also carry out project monitoring and evaluation which consists in assessing the socioeconomic impacts of the entire project. A summary of the terms of reference of the technical assistance is provided in Annex Training. This component is based on the findings of the capacity building study conducted by the Ministry of Public Works and Equipment (MTPE). It will cover: (1) in Burundi, technical training of 41 technical experts and technicians of the OdR in the following areas: worksite monitoring and environmental management techniques (environmental auditing and drafting of environmental status reports) data processing and office automation, - use of the computer-aided design program (AutoCAD), - contractorship (new and maintenance works), and infrastructure projects cost accounting; (2) training abroad of 14 experts officers of the OdR in the following fields: road project management/design, - road investments planning/programming system, organization and method, - geotechnical design of civil engineering structures and roads, - traffic management and operation, - road safety, - environmental management, - and economic design of road projects. A summary of the training programme and areas of training is contained in Annex 8. Project management In each country, the project will be monitored by the Project Implementation Monitoring Unit (PIMU) which will be under the Planning, Policy and Capacity-Building Unit (UPPR) of Rwanda and the Directorate of Road Works of Burundi. The management of project activities comprises the preparation of bidding documents, drafting of bid examination reports, monitoring of the progress of project components, participation in worksite meetings, preparation of quarterly project progress reports and preparation of payment requests. The auditing of project accounts will be aimed at verifying that procurements are in accordance with Bank rules and that expenses are properly carried out.

42 In order to ensure coordination of the entire project, a Rwanda-Burundi Joint Technical Committee (CTM) will be set up to handle common issues and coordinate activities concerning both countries and which cover, in particular, problems like the establishment, construction and operation of the common border crossing, customs issues, immigration, police and security. 4.6 Environment Impacts Environmentally, the project is classified under category 1, considering the nature of works to be carried out (asphalting of an earth road), its scope and the direct and indirect potential impacts it may generate. In accordance with the Bank s Environmental Policy requirements and those of Rwanda and Burundi, an environmental and social impact assessment (ESIA) was carried out by an engineering firm in Rwanda and environmental experts in Burundi, following the procedures of the two countries and those of the Bank on matters relating to environmental and social impact assessment. The said study was made available to the public by the environmental authorities of both countries for comments and remarks. Furthermore, a summary of the ESIA was published at the Bank s Public Information Centre (PIC) on 2 May 2006 and distributed to the Bank s Board of Directors on 4 May In addition, the plan to resettle the people of Rwanda and Burundi who will be displaced for work purposes was posted on 17 July 2006 at the PIC. Positive impacts On the whole, impacts generated by the project will be positive. Indeed, the implementation of the project will contribute to better open up the areas concerned, with easier access, communication, trade and free movement of goods and persons. The project will contribute to reducing travel costs and time, thanks to the transport and transit facilitation measures which will be put in place. Greater details on the impacts, mitigation and improvement measures and the monitoring programme are included in the summary of the ESIA. Negative impacts During the construction phase, negative impacts on the natural and biological environment are: noise and vibrations caused by machines, worksite vehicles, explosions in quarries, crushers, percussion drills, etc. These impacts may affect the peace and tranquillity of wildlife and cause their migration to other calmer sites. Gas and dust emissions from the movement of machines on roads under construction and on bypass roads, appliances and asphaltic mix plants are also sources of impacts on the natural environment. Furthermore, risks of accidental spills of dangerous products, and seepage of hydrocarbons, oils or grease from worksite machines, could also be sources of soil and water resource pollution The opening of the right-of-way, the operation of materials sites and quarries may, to an extent, entail clearing. Such impacts will be particularly strong on the Kicukiro- Mayange and Gasenyi-Kirundo road segments and will, to a lesser extent, affect the Kirundo- Cohoha feeder road. The construction of civil engineering structures, in particular the Nyabarongo structure, could cause environmental problems such as industrial accidents, and water pollution from the discharge of waste from site works. Another impact during the construction phase is the disturbance of normal traffic. Increased traffic on the bypass roads could also cause accidents and worsen the phenomena of nuisances among the riparian

43 29 population, especially in centres such as Kicukiro, Nyamata, Mayange, Nemba, Gasenyi and Kirundo In Rwanda, in Kagarama and Gahanga, the project will entail the demolition of 17 low-cost housing units. In Burundi, the expropriation of property concerns 27 houses; 1.4 ha of land and 1.6 ha of crops will be expropriated for purposes of adjusting the road alignment. Compensation earmarked will be paid before the start of works. The persons affected will be moved only a few dozen metres away and will be resettled on their native lands. Moreover, six ha of land at the border between the two countries are available for the construction of the border crossing. Mitigation measures During the construction phase, mitigation measures will concern the aspects below. Before and during the execution of works, the contractor will organize information and sensitization campaigns targeting technical services, the population (village heads, road users, transporters unions, local communities and economic groups) on issues relating to safety, health (prevention against STIs including HIV/AIDS) and the conservation of natural resources, sites and cultural monuments. Before setting up the domestic sites, the contractors will submit for prior approval by the control mission, a worksite installation and environmental impact mitigation plan, in accordance with the environmental guidelines and the legislation in force in the two countries. In addition, the domestic sites will be set up near major centres so as to enable these localities to benefit from the infrastructure after construction works. Mitigation measures also concern: (1) collection of oils, greases and lubricants into containers and handing them over to local communities for their day-to-day activities (treatment of wood against rodents, mixing with clay for house maintenance, treating of lumber, etc.); (ii) putting in place of road signs in conglomerations, bypass roads and dangerous areas and speed limits Impact mitigation measures during the operation phase will concern essentially the application of legislative and safety measures. An Environmental and Social Management Plan (ESMP) has been prepared. It outlines the actions to be implemented to mitigate or eliminate the identified potential negative impacts. These actions concern both control and environmental monitoring measures and the necessary support measures (sensitization and capacity building). The major objectively verifiable indicators for monitoring environmental and social impacts were identified and are mentioned in the plan. The negative impact mitigation measures that are aimed at maximizing environmental protection (socioeconomic environment, conservation of fauna and flora, water resources and sensitive zones in the project area) will be included in the contract specifications of the contractors. Support measures have been provided for the improvement of the living environment and conditions of the riparian population. They concern notably the embellishment of the entry of towns, the development of stop points, especially for public transport, along the road in villages, the development of parking lots, cattle crossings at specific areas, safety infrastructure at the level of schools, health centres and markets Environmental experts of the works control and supervision missions will oversee the implementation of the ESMP, the management of worksites, the execution of specific environmental and social works and the search for solutions to selective environmental problems. They will provide on-the-job training to cadres of services in charge of roads, who are responsible for the implementation of the project, in environmental management. The

44 30 quarterly work progress reports will specify the environmental aspects, including the efficiency of environmental and social measures. The experts will be backed by national authorities in charge of the environment. The PIMUs will also monitor the implementation of environmental and social protection measures Within the context of the implementation of the project, plans have been made for: (i) the demolition of 44 houses (17 in Rwanda and 27 in Burundi) leading to the displacement of 220 persons (85 in Rwanda and 135 in Burundi); and (ii) the expropriation of 1.4 hectares of land and 1.6 hectares of crops. Environmental and social protection costs have been estimated as follows: (i) protection of the environment and the living environment of the riparian population: UA ; sensitization of the population to road safety, environmental protection and STIs including HIV/AIDS and other pandemics: UA ; training: UA ; expropriation: FRW 176 million (equivalent to UA 0.2 million) in Rwanda and FBU 75 million (equivalent to UA 0.05 million) in Burundi. The costs of monitoring environmental measures are included in the project cost. Other costs related to the rehabilitation of the borrow pits, protection of earth banks, signposting, construction of parking lots and drainage facilities are included in the cost of works. Compensation for expropriations will be paid by both Governments to the displaced persons, before the start of works. This is a grant condition. 4.7 Project Cost Estimates The estimated project cost, exclusives of taxes, levies, customs duties (HTTD) and expropriations, is UA million, of which UA million in foreign exchange and UA million in local currency. The estimated cost of components proposed for financing by the ADF is UA million, of which UA million in foreign exchange and UA million in local currency. A physical contingencies rate of 10% is applied to the basic cost. The price contingency represents 7.40% of the basic cost and physical contingencies. The project cost was fixed following the complete study on the Kicukiro-Kirundo road and the layout of feeder roads. The unit prices of works were fixed taking into account the findings of the studies and the recent competitive biddings for works funded by the ADF and other donors in The amount of compensations for expropriations, entirely borne by the Governments, is the equivalent of UA 0.25 million (of which UA 0.20 million for Rwanda and UA 0.05 million for Burundi) The estimated project cost exclusive of taxes, levies and custom duties, including compensations for expropriations, amounts to UA million. The estimated cost, exclusive of taxes, levies and customs duties, of components funded by the ADF, including compensations for expropriations, amounts to UA million. Tables 4.1 and 4.2 below give a summary of the estimated cost by component of the entire project and the cost by component financed by the ADF.

45 31 Table 4.1 Summary of Estimated Cost by Component of the Entire Project (UA Million HTTD) Component US$ Million UA Million F.E. L.C. Total F.E. L.C. Total A. Road works a.1) Kicukiro-Mayange road section (Lot 1 / 40 km) , a.2) Mayange - Nemba Burundian Border road section (Lot 2 / 20 km) , a.3 Rwandan Border Gasenyi Kirundo road section (Lot 3/37 km) , a..4) Feeder roads in Rwanda / 69 km , a..5) Feeder roads in Burundi / 80 km , a.6) Control and supervision of Lot 1 works , a.7) Control and supervision of Lot 2 and feeder roads works , a.8) Control and supervision of Lot 3 and feeder roads works , a.9) Sensitization of the population in Rwanda , a.10) Sensitization of the population in Burundi , B. Transport and transit facilitation actions b.1) Construction and equipment of a common border crossing , b.2) Control and supervision of border crossing works and , sensitization C. Institutional support to Burundi s OdR c.1) Technical assitance , c.2) Staff training , D. Project management d.1) Monitoring of implementation of the project in Rwanda , (Rwanda s PIMU) d.2) Monitoring of implementation of the project in Burundi , (Burundi s PIMU) d.3) Project coordination (members of Rwandan CTM) , d.4) Auditing of project accounts , , Basic cost Physical contingencies , Price contingency , Grand total exclusive of taxes, levies, customs duties and expropriations , Compensation for expropriations Total exclusive of taxes, levies and custom duties, including expropriations , It should be noted that the unit costs of the project road, on the Rwandan and Burundian sections, are UA /km and UA respectively. This difference in the unit price is at the level of roadway and drainage works. In fact, on the Rwandan section, the roadway is made of a base course composed of crushed sand-gravel aggregates with a 5 cm thick surface course composed of asphaltic concrete and built in an area with more rugged landform and abundant rainfall. On the Burundian section, the roadway is composed of a stabilized laterite base course with a double-layer surface coating. It will be constructed in a shelf area with less rainfall.

46 32 Table 4.2 Summary of Estimated Project Cost by Component Financed by the ADF Component US$ Million UA Million P.E.. L.C. Total P.E. L.C. Total A. Road works a.1) Mayange Nemba road section (Lot 2 / 20 km) a.2) Gasenyi Kirundo road section (Lot 3 / 37 km) a.3) Feeder roads in Rwanda / 69 km a.4) Feeder roads in Burundi / 80 km a.5) Control and supervision of Lot 2 and feeder roads works a.6) Control and supervision of Lot 3 and feeder roads works a.7).sensitization of the population in Rwanda a.8) Sensitization of the population in Burundi B. Transport and transit facilitation actions b.1)construction and equipment of the common border crossing b.2) Control and supervision of works including senstitization of workers of border services and road users C. Institutional support c.1) Technical assistance c.2) Training of the road staff of Burundi s OdR D. Project management d.1) Monitoring of implementation of the project (Rwanda s PIMU) d.2) Monitoring of implementation of the project (Burundi s PIMU) d.3) Project coordination ( Rwanda-Burundi CTM) d.4 Auditing of project accounts Basic cost Physical contingencies Price contingency Grand total exclusive of taxes, levies and custom duties Compensations for expropriations 0 0, Grand total, exclusive of taxes, levies and custom duties, including expropriations Tables 4.3 and 4.4 below give the summaries of the cost by category of expenditure of the entire project and by category of expenditure financed by the ADF. Table 4.3 Summary of Cost by Category of Expenditure of the Entire Project (HTTD) Category of Expenditure US$ Million UA Million F.E. L.C. Total F.E. L.C. Total A. Works B Consultancy services C. Miscellaneous Basic Costs Physical contingencies Price contingency Grand total

47 33 Table 4.4 Summary of Cost by Category of Expenditure Financed by the ADF (HTTD) Category of Expenditure US$ Million UA Million F.E. L.C. Total F.E. L.C. Total A. Works B. Consultancy services C Miscellaneous Basic Costs Physical contingencies Price contingency Grand total Sources of Finance and Expenditure Schedule The project will be financed by the ADF, ABEDA, the SFD, the OPEC Fund and the Governments of Rwanda and Burundi. The Loan Agreements with ABEDA, the OPEC Fund and the Saudi Fund for Development have already been signed. Entire project The ABEDA, SFD and OPEC Fund loans will be used as contributions to the financing of Lot 1 works (Kicukiro Mayange road section) and their control. These works started in May 2006, for a period of 14 months, and are co-financed by the Rwandan Government. The other project components, as described in paragraph above, will be co-financed by the ADF and the Governemtns of Rwanda and Burundi. The ADF s share of UA million represents 56.92% of the cost of the entire project. The contribution of the Government of Rwanda to the financing of the entire project is UA 2.28 million and covers Lots 1 and 2 works (Mayange-Nemba road section) as well as the operating expenses of the Project Implementation Monitoring Unit (PIMU) of Rwanda. The contribution of the Government of Burundi is UA 1.66 million and covers Lot 3 works (Gasenyi-Kirundo road section) and the operating expenses of Burundi s PIMU. In addition, both Governments will finance compensation for expropriations estimated at US$ 0.28 million (or UA 0.20 million) for Rwanda, and US$ 0.07 million (or UA 0.05 million) for Burundi. The sources of finance for the entire project are shown in Table 4.5 below. Table 4.5 Sources of Finance of the Entire Project (UA million) Source of Finance UA million % ADF % ABEDA % SFD % OPEC Fund % Government of Rwanda % Government of Burundi % Total HTTD and exclusive of expropriations %

48 34 Components co-financed by the ADF ADF financing: The ADF s grant will cover : A. For Rwanda : (i) part of the cost of asphalting works of Lot 2 (Mayange- Nemba road section); (ii) the total cost of feeder roads development works; and (iii) the total cost of the control and supervision of works including sensitization ; B. For Burundi : (i) part of the asphalting works of Lot 3 (Gasenyi-Kirundo road section); (ii) the total cost of feeder roads development works; and (iii) the total cost of the control and supervision of works including sensitization, and institutional support to the OdR; and C. For both countries (to the tune of 50% per country) : (i) the total cost of construction works on an equipped common border crossing: (ii) the total cost of controlling works on the border crossing including the sensitization of the staff of border services and users of the crossing; and (iii) the total cost of auditing the project accounts, and the operating expenses of the Rwanda-Burundi Joint Technical Committee (CTM) in charge of coordinating the entire project Local counterpart funds : The Government of Rwanda will finance : (i) partially, the asphalting works of Lot 2; and (ii) entirely, the operating expenses of Rwanda s Project Implementation Monitoring Unit (PIMU). The Government of Burundi will finance: (a) partially, the asphalting works of Lot 3; and (b) entirely, the operating expenses of Burundi s PIMU. The overall contribution of both Governments to the financing of the ADF s components amounts to UA 3.36 million, of which UA 1.70 million for Rwanda and UA 1.66 million for Burundi. This overall contribution of UA 3.36 million represents, on the whole, 10% of the combined financing of the ADF and the Governments, that is 5.1% for Rwanda and 4.9% for Burundi. In addition, both Governments will finance the compensations for expropriations estimated at US$ 0.28 million (or UA 0.20 million) for Rwanda, and US$ 0.07 million (or UA 0.05 million) for Burundi. The sources of finance by component financed by the ADF are shown in Table 4.6 below The sources of finance by category of expenditure financed by the ADF are shown in Table 4.6 below.

49 35 Table 4.6 Sources of Finance by Category of Expenditure Financed by the ADF Category of Expenditure TOTAL UA million ADF UA million Rwand Burundi a F.E. L.C. Total F.E. L.C. Total L.C. L.C. A. WORKS a.1 Works on Mayange-Nemba road section and border crossing (Rwanda) a.2 Work on Gasenyi-Kirundo road section (Burundi) a.3 Works on feeder roads (FR) in Rwanda a.4 Works on feeder roads (FR) in Burundi B. SERVICES b.1 Road, crossing and FR control and supervision, and sensitization (Rwanda) b.2 Road, crossing and FR control and supervision, and sensitization (Burundi) b.3 Institutional support to the OdR b.4 Auditing of project accounts C.MISCELLANEOUS d.1) Monitoring of implementation of the project (Rwanda s PIMU) d.2) Monitoring of implementation of the project (Burundi s PIMU) c.3) Project coordination (Rwanda-Burundi CTM) Basic cost Physical contingencies Price contingency GRAND TOTAL The expenditure schedule by source of finance of the entire project as well as the schedule for components financed by the ADF are shown in Tables 4.7 and 4.8 below. Table 4.7 Expenditure Schedule by Source of Finance of the Entire Project (UA million) Source of Finance Total ADB grant ABEDA loan Opec Fund loan SFD loan Government of Rwanda Government of Burundi Grand total % of total 39.63% 39.79% 20.61% %

50 36 Table 4.8 Expenditure Sechedule by Source of Finance of Components Financed by the ADF (UA milion) Source of Finance Total % ADF grant % Government of Rwanda % Government of Burundi % Total % % of total 17% 54% 29% 100% 5. PROJECT IMPLEMENTATION 5.1 Executing Agencies The project executing agencies are the Ministry of Infrastucture of Rwanda through the UPPR which is in charge of roads, and the Ministry of Public Works and Equipment of Burundi through the OdR. However, for the day-to-day monitoring of project activities, both Goverments agreed to set up a Project Implementation Monitoring Unit (PIMU) in each country. The PIMU, which is placed under the control of the UPPER of MININFRA in Rwanda and the Directorate of Road Works of the OdR in Burundi, comprises a Project Officer (road engineer), an Environmentalist, an expert from the National AIDS Control Committee (for the sensitization to STIs and other pandemics component), and an Account Manager (for keeping project accounts). Each PIMU will ensure the technical, administrative, accounting and financial management of project activities carried out in each country. Their members shall be empowered to perform these tasks only in their respective countries. PIMU members shall be appointed by the respective Governments A PIMU has already been set up in Rwanda. It is located within the UPPR and responsible for managing road projects financed by the ADF. It will also monitor the implementation of the activities of this project. Since 1997, this PIMU s team has satisfactorily monitored and managed road operations (nearly 90% of which have already been implemented) funded notably by the Bank, the World Bank, the EDF, ABEDA and the KFD. It will be reinforced by a technical experts from the NACC for this project component relating to sensitization to STIs (including HIV/AIDS) and other pandemics. In Burundi, a PIMU will be set up within the Directorate of Public Works of the OdR. However, given the OdR s weak operational capacities, Burundi s PIMU will be strengthened by technical assistance. The Bank will oversee the services of these PIMUs. In fact, a performance contract will be signed, in each country, between MININFRA in Rwanda, the MTPE in Burundi and each team of the PIMUs Plans have been made to set up a Rwanda-Burundi Joint Technical Committee (CTM) responsible for coordinating the entire project. The two Governments have agreed that the CTM will comprise eight (8) persons, that is 4 per country, as follows : (a) in Rwanda:- a representative of the General Directorate for Immigation and Emigration, - a representative of transport from the Ministry of Infrastructure, - a representative of the Ministry of Finance and Economic Planning, - a representative of the Ministry in charge of Trade; and (b) in Burundi:- a representative of the Road Board, - a representative of the Ministry of the Interior and Public Security (Directorate of Immigration), - a representative of the Ministry of Finance (General Directorate for Revenue), and a representative of the Ministry of Transport, Posts and Telecommunications. The members of the CTM will be jointly appointed by the two Governments.

51 The main duties of the CTM will be to coordinate and ensure, with the assistance of the two Project Officers a harmonious implementation of the entire project in both countries. It shall also define the terms and conditions of the establishment and functioning of a Rwanda-Burundi Joint Board which will be responsible, on a transitional basis, for the management of the common border crossing. The CTM will meet once a quarter, and as and when necessary, alternatively in each of the countries. The members of the CTM will reside in their respective countries. Furthermore, for reasons of efficiency in the steering of the entire project, the two Governments have agreed that Rwanda will be the lead manage of the entire project. It will ensure its coordination and manage procurements relating to the common border crossing and to the auditing of project accounts. An Agreement will be signed between both Governments to designate Rwanda as Lead Manager and Coordinator of the project. 5.2 Institutional Arrangements To build its technical and operational capacities, the OdR will be supported by two experts (a road engineer and a road projects planning and management expert). These experts will be provided by a consultancy firm to be recruited. Such technical assistance will work in collaboration with: (i) Burundi s PIMU, for the management of project activities in Burundi, and (ii) with the two PIMU of Rwanda and Burundi, for the monitoring-assessment of the socioeconomic impacts of the project. It will also support the OdR in coordinating its staff socioeconomic impacts of the project. It will also support the OdR in coordinating its staff training programme. In addition, the project executing agencies will appoint, from among officials of services in charge of roads, four (4) counterparts (Road Engineers or Environmentalists), that is two per country, to work on a permanent basis with the firms responsible for controlling works and sensitizing the population, with a view to transferring knowledge. These firms will train them, on the ground, in the areas of control, project supervision and sensitization. These counterparts will submit to Rwanda s UPPR and Burundi s OdR quarterly training progress reports Two (2) consultancy firms will be recruited by each country to control and supervise road, feeder road and common border crossing works and to sensitize the population of the project area, staff of border services and users of the border crossing in the areas of : (i) management and operation of a common border crossing; (ii) road safety; (iii) environmental protection; and (iv) control of STIs including HIV/AIDS and other pandemics. Concerning works control, the firms will follow up, on the ground, the conduct of works, control technical quality and certify certificates for payment on sight of daily statements of work carried out and expenses incurred. Concerning seminars, in order to ensure that the Bank s intervention is consistent with ongoing national programmes, the firms will work in close collaboration with the national technical services concerned (MININFRA, national environmental services, and AIDS Control Committee). They will draw up works progress reports and reports on sensitization seminars The Bank s country office in Rwanda (RWCO), which started its activities in November 2005, will also take part in monitoring the implementation of the project. RWCO s objective is to improve the implementation of the Bank s projects and programmes in Rwanda and to participate in the dialogue of Rwanda s development partners. RWCO will therefore provide support to the executing agencies in monitoring the implementation of the project. It will

52 38 advise the executing agencies on the technical aspects of the project, on the procurement procedure and on financial management. Such support will be provided in consultation with the Bank s units in Tunis The definition of the method of management of common border crossings in the EAC and ECCAS, which have common objectives, is included in the ongoing studies funded by the World Bank and the Bank as concerns the facilitation of transport and transit on transport corridors in the areas covered by these bodies. The management method that will be retained at the end of these studies will apply to the management of the border crossing of this project. Meanwihile, however, the common border crossing envisaged in this project will be managed, on a transitional basis, by a Rwanda-Burundi Joint Board composed of staff of both countries who will be appointed by the two Governments. The effective establishment of this board and appointment of the said staff constitute a grant condition. 5.3 Implementation and Supervision Schedules Implementation of the entire project will run from May 2006 (date of start-up of Lot 1 works in Rwanda) to August 2008, or about 28 months. However, the estimated duration of implementation of components financed by the ADF is 21 months, from November 2006 (date of start-up of works on Lot 2 in Rwanda and Lot 3 in Burundi, considering the implementation of anticipated actions for the procurement of works) to August The summary of the provisional implementation schedule of project components financed by the ADF, details of which are shown in Annex 4, is provided below.

53 39 Table 5.1 Summary of Provisional Implementation Schedule of ADF Components Activity Responsibility Deadline 1- Preliminary activities Grant approval ADF September-2006 Publication of General Procurement Notice ADF / Government (Rwanda and Burundi) October-2006 Signature and entry into force of Protocol of Agreement ADF./ Government (Rwanda and Burundi) November WORKS ON ROADS AND COMMON BORDER CROSSING Approval and signature of Lots 2 and 3 contracts ADF/Government (Rwanda and Burundi) October 2006 Start-up of road works of Lot 2, common border crossing and Lot 3 Contractor November-2006 End of road works of Lot 2 and common border crossing Contractor April End of road works of Lot 3 Contractor March FEEDER ROAD WORKS Submission and approval of BD Government (Rwanda and Burundi) / ADF November Issuance of bid solicitation Submission and examination of bids and contract award Government (Rwanda and Burundi) / ADF May 07 Start-up of feeder road works Contractors June 07 End of feeder road works Contractors June 08 4-CONTROL AND SUPERVISION OF ROAD, FEEDER ROAD AND BORDER CROSSING WORKS AND SENSITIZATION Approval and signature of contracts ADF/Governments (Rwanda and Burundi) October 2006 Start-up of service provision Consultants November 2006 End of service provision Consultants July INSTITUTIONAL SUPPORT TO OdR Submission and approval of BD Government (Burundi) / ADF October 06 Announcement of bidding, submission and examination of bids and contract award Government (Burundi) /ADF December 06 Start-up of service provision Consultant January -07 End of service provision Consultant July PROJECT AUDIT Submission and approval of BD Government (Rwanda) / ADF September 06 Announcement of bidding, submission and examination of bids and contract award Government (Rwanda) / ADF February 07 Start-up of service provision Consultant March -07 End of service provision Consultant August -08 End of project monitoring Rwanda/Burundi/ADF August As soon as the ADF grants are approved, a launching mission and then supervision missions of the project will be fielded, in accordance with the provisional supervision schedule hereunder. Table 5.2 Provisional Supervision Schedule Approximate Date Activity Composition of Mission Menweeks ADF (Project Officer, 1 disbursement officer and 1 November 2006 Launching procurement officer) 3 April 2007 Project Officers (1 transport economist, 2 civil engineers and Joint donor supervison 1 environmentalist) 15 Project Officers (1 transport economist, 1 civil engineer and 1 November 2007 Supervision environmentalist) 9 March 2008 Project Officers (1 transport economist, 1 civil engineer and 1 Supervision environmentalist) 9 January transport economist, 1 civil engineer and 1 Bank s completion report environmentalist 9 Total 45

54 Procurement Arrangements Lot 1 works funded at the same time by ABEDA, the SFD, the OPEC Fund and the Rwandan Government started in May 2006, for a duration of 14 months. The project components financed by the ADF will be implemented from November 2006 to August To speed up the construction and handing over of the entire road, the Governments of Rwanda and Burundi submitted a request for Anticipated Procurement Actions (APA) to be carried out within the framework of ADF financing. The Board of Directors was informed on 8 May 2006 of the approval of this request by Management. Table 5.3 Arrangements for the Procurement of Works and Services Financed by the ADF (UA million) Expenditure Category ICB (i) Short List Others (ii) Other than ADF A Works Total - Lot 2 road and common border crossing works - Lot 3 road works 3 - Feeder road works - Feeder road works B - Consultancy services (10.24) (8.08) 9,36 (3,97) 3.97 (4.18) 4.18 (10.24) (8.08) 9.36 (3.97) 3.97 (4.18) Control of works for Lot 2, feeder roads, border crossing and sensitization - Control of works for Lot 3, feeder roads and sensitization - Technical assistance to the OdR and staff training - Auditing of project accounts (1,40) 1,40 (0,97) 0,97 (1,14) 1,14 (0,12) 0,12 (1.40) 1.40 (0.97) 0.97 (1.14) 1.14 (0.12) C Miscellaneous - Functioning of Rwanda s PIMU - Functioning of Burundi s PIMU - Coordination of the entire project (Rwanda-Burundi CTM) (0,09) 0,09 0,41 0, Total (26.48) (3.63) 3.63 (0.09) (30.20) ( ) = Financing by the ADF ; - (i ) ICB = International competitive bidding ; (ii) Others = Operating costs of the Joint Project Coordination Technical Committee ; (iii) = Other than ADF (Governments) ; N.B. The amounts mentioned in the above table cover the basic cost, physical contingencies and price contingency All procurement of works and services financed by the ADF will be in accordance with the Bank s Rules of Procedure for Procurement of Goods and Works or, as appropriate, the Bank s Rules of Procedure for the Use of Consultants, using the appropriate Bank standard bidding documents. Procurement arrangements under this project are summarized in the table above. Works Following approval by the Bank of their requests, the Governments of Rwanda and Burundi carried out anticipated procurement actions (APA) for: (i) works for Lots 2 and 3 and the border crossing common to both countries; and (ii) the control and supervision of works on roads, feeder roads and the common border crossing, as well as the sensitization of the population. The Governments requests are justified by the need to implement the project

55 41 as soon as possible. These APA will help to shorten the time of implementation of works and avoid the disruption of works caused by the rainy season during which it is impossible to carry out any earthworks, and to complete the road eight months ahead of schedule, compared with the conventional procedure of procurement of works. Both Governments have agreed to entrust Rwanda (lead manager of the project) with the responsibility for the entire procedure of procurement of works relating to the common border crossing. The procurement of works for asphalting Lot 2 (Mayange-Nemba road section in Rwanda) and construction of the common border crossing of a total amount, including physical contingencies and price contingency, of UA million (of which UA 9.43 million for Lot 2 and UA 0.81 million for the common border crossing) co-financed by the ADF, will be by a single international tendering. The procurement of asphalting works for Lot 3 (Gasenyi-Kirundo road section in Burundi) for an amount of UA 9.36 million, co-financed by the ADF, will be by international competitive bidding. The procurement of feeder road development works in each country, financed with ADF resources (of an amount of UA 3.97 million for Rwanda and UA 4.18 million for Burundi) will be by separate international competitive bidding for each country. Consultancy services The procurement of works control and supervision services including sensitization seminars will be in a single lot by country, namely : (i) By Rwanda: the control and supervision of works on the Mayange-Nemba road section, feeder roads, the common border crossing including sensitization of the population as well as workers of the common border crossing (for a total amount of UA 1.40 million; and (ii) By Burundi : the control and supervision of works on the Gasenyi-Kirundo road section, feeder roads as well as the sensitization of the population (for an amount of UA 0.97 million). These two procurements will be by bidding on the basis of two (2) short lists of consultancy firms. The grouping of these procurements is justified by the need for efficiency The procurement of technical assistance services for the OdR including the training of its staff (for an amount of UA 1.14 million) will be by bidding on the basis of a short list of consultancy firms. The training structures will be defined in consultation with the OdR. Procurement of services for auditing the accounts of the project (for an amount of UA 0.12 million) will be by bidding on the basis of a single short list of auditing firms. This procurement will be managed by Rwanda, the lead manager of the project The procedure for selecting consultants for the control and supervision of works including the sensitization of the population and for technical assistance will be based on the combined evaluation of design proposals and the amount of bids (price is a factor of selection). For the auditing of project accounts, the selection procedure will be based on the method of the lowest price for comparable services. Miscellaneous The operating expenses of the Joint Technical Committee for the coordination of the entire project (for a total amount of UA 0.08 million) financed entirely in foreign exchange by the ADF, will be settled on the basis of supporting documents provided by the executing agencies of the project.

56 42 National laws and regulations National procurement laws and regulations of Rwanda and Burundi were examined and considered acceptable. The only peculiarity concerns the decision of Rwanda s National Tenders Board (NTB) which requires that all bidding documents be in two languages (English and French). On this issue, the Bank only approves the version described as original by the Government. General Procurement Notice The text of a General Procurement Notice will be agreed with the different parties during negotiations and will be issued for publication in Development Business upon approval by the ADF Board of Directors of the grant proposal. Bid examination procedures Tender notices for works and calls for expression of interest for services which are the subject of anticipated procurement actions were submitted for the prior non-objection of the Bank before publication. The following documents will be submitted for review and approval by the ADF before publication: (i) bidding documents, terms of reference and letters of invitation of consultants proposals; (ii) bid evaluation reports for works including recommendations for contract award; (iii) reports on evaluation of consultants proposals after analysis of design and financial bids, including recommendations for contract award. And of course, all bids by firms which have not met the minimum standard required will not be opened and will only be returned to the bidders concerned after the non-objection notice on the choice of the consultant; and (iv) draft contracts, where these have been amended from the drafts included in the bidding documents. 5.5 Disbursement Arrangements ADF disbursement. Disbursements for works, consultants services for the control and supervision of works including sensitization, institutional support and auditing of accounts will be by the direct disbursement method to the various contractors. Regarding the operating costs of the CTM, which are part of the project cost, both Governments have agreed to open a single special foreign exchange account at the Banque Nationale du Rwanda (National Bank of Rwanda) in the name of the project into which the share of grant resources relating to the functioning of the CTM will be deposited. The initial advance will be granted on the basis of a work programme approved before hand by the ADF. The special account will be replenished upon presentation by Rwanda, the Lead Manager and Coordinator of the project, of expenditure supporting documents of at least 50% of the previous transfer and all of the preceding payments. Both Governments have agreed that: (i) this account shall be managed by Rwanda, Lead Manager of the project, and (ii) the management terms and conditions of the account shall be spelt out in the agreement which will be signed between Rwanda and Burundi Local counterparts. To guarantee the regular payment of local counterparts, the Governments of Rwanda and Burundi have agreed to open, in each country, two special accounts in national banks into which counterpart funds will be deposited. These special accounts will be replenished every six months, as needed and in accordance with the annual

57 43 expenditure schedule. The half-yearly replenishment of these two special accounts is a grant condition. 5.6 Monitoring and Evaluation Monitoring and evaluation will comprise internal and external monitoring, launching and supervision missions of the Bank and other co-financiers, a final evaluation including end-ofworks and completion reports of the recipients as well as the report of the Bank. The following reports will be drawn up on the implementation of the project : (i) monthly, quarterly and final reports prepared by the consultants responsible for the control and supervision of works including the sensitization of the population. These consultants will submit these reports for validation to the executing agencies and will assist them in the provisional and final acceptance of works; (ii) quarterly reports of the firm providing technical assistance to the OdR; (iii) the monitoring and evaluation report prepared by this technical assistance firm which will be responsible for defining, in Rwanda and Burundi, socioeconomic impact and trend assessment indicators, together with the project executing agencies. Furthermore, project launching and supervision missions will be conducted by the Bank and the other co-financiers. The Bank s supervision missions will, in particular, strive to prevent possible project implementation problems The PIMUs of both countries will submit to the Bank, on a quarterly basis and in accordance with the format in force, reports on the implementation, in each country, of project activities including environmental and social aspects. The accountants of these PIMUs will keep accounts on project activities on their territory. In addition, Rwanda (Lead Manager of the project) will keep accounts on border development. The CTM will ensure the coordination of activities of the entire project including transport and transit facilitation actions, interventions of the project donors as well as the organization of joint supervision missions, in cooperation with both countries. On the basis of the reports of the PIMUs, the CTM will draw up a quarterly summary report on the entire project. The Bank will oversee activities carried out by the PIMUs. In fact, a performance contract will be concluded, in each country, between MININFRA, the MTPE and the respective PIMU teams Furthermore, technical assistance to the OdR will, together with the two executing agencies, monitor and evaluate annually the indicators defined in the CSPs and those defined in this project They will pay special attention to the following criteria : (i) increase by 7.5% of the ECCAS stretch of paved roads in a good state by 2010; (ii) reduction of the average travel time between Kicukiro and Kirundo of about 6 hours to 2 hours from 2008; (iii) increase of about 15% in the supply of transport on the road from 2008 and improved access to production and marketing centres for about inhabitants; (iv) reduction of the cost of passing and transit through the border by nearly one half from 2008; and (v) change in the share of transport in the selling price of products which is about 40% At the end of the project, the executing agencies will prepare, on behalf of the recipients, reports on the completion of project activities on their respective territories, according to the prescribed format and within the three (3) months following the end of the project. The CTM will use these reports to prepare the comprehensive completion report of the entire project. In addition, the executing agencies will organize, on the project road and within the six months following completion of works, traffic audit campaigns in order to verify the traffic assumptions The project accounts will be audited annually and the audit reports forwarded to the

58 44 Bank. These reports will enable the two Governments and the Bank, as part of the monitoring of project implementation, to ensure that: (i) the grant resources are used to finance the project; (ii) the grant accounts are properly kept; and (iii) Bank grant administration procedures are properly followed. 5.7 Financial Reporting and Auditing The entire project accounts will be kept by the accountants of the unit in charge of roads in Rwanda and of the Road Board in Burundi, using a private accounting plan. Accounts will be kept for each contract, in accordance with internationally accepted accounting standards. The accounting system should help to monitor project expenditure on the basis of expenditure forecasts, by source of finance, by category of expenditure and by project component. A computerized accounting system, using an operational accounting software, already exists in road services in Rwanda and at the Road Board in Burundi. Project accounts will be audited annually, jointly by an external auditing firm during the implementation period. The Governments shall regularly transmit to the Bank reports on such audit. Given the projected duration of the project ( ), plans have been made to conduct three audits of the project accounts, one (1) of which will be carried out at the end of the project. 5.8 Aid Coordination Aid coordination in the transport sector is carried out: (a) in Rwanda, by the Ministry of Finance and Economic Planning of Rwanda and the Ministry of Finance of Burundi. Such coordination is also carried out by MININFRA of Rwanda through the UPPR; and (b) in Burundi, by the MTPT and MTPE through the Directorate of Transport and the Road Board. It is also carried out through roundtables organized by the Government of Rwanda and periodically by the Government of Burundi which attach paramount importance to the coordination of aid for the implementation of their road investment programmes. Consultations on these programmes are held between donors in the sector and the Governments. Outside this framework, the various partners maintain a sustained dialogue in which the Bank participates or about which it is informed. These meetings have helped to establish a synergy of co-financing and complementarity between donors In November 2002, the Government of Rwanda put in place a framework for coordination of external aid to Rwanda, thus establishing the system of sectoral groups or Clusters, including the Infrastructure Cluster, whose facilitators are MININFRA and the European Union. Considering the scope of infrastructure, a Transport sub-group was set up within the Infrastructure Cluster. The duty of the Transport sub-group is notably to : (i) organize regular consultations with all interested parties (ministries, donors, decentralized entities, private sector, civil society, NGOs, etc.) for the formulation and implementation of a transport sector policy; (ii) support the planning of the transport sector, including dialogue on the budget preparation process; and (iii) support and advise the Government in the mobilization of resources to be allocated to the transport sector. In Burundi, a National Aid Coordination Unit, under the chair of the Office of the Vice-President, was set up and is functional In the specific context of this project, the various Bank missions held working and consultation meetings with donors represented in Rwanda and Burundi all of whom underscored the strong complementarity of actions planned by the Bank and expressed their

59 45 support to the project. Lastly, supervision missions are envisaged during the implementation phase of the project. During these missions, meetings coordinated by MININFRA in Rwanda and the MTPE in Burundi will be held with these institutions. 6. PROJECT SUSTAINABILITY AND RISKS 6.1 Recurrent Costs The recurrent costs of the project comprise those of the road, feeder roads and border crossing. Concerning the road and feeder roads, these are annual and periodic routine maintenance expenses financed with resources of the FER in Rwanda and the FRN in Burundi. Periodic maintenance will be carried out every ten years on the asphaltic concrete road section in Rwanda and every seven years on the double-layer road section in Burundi. In Rwanda, annual routine maintenance costs of the 20 km road section are estimated at US$ per year; periodic maintenance costs are estimated at US$ 2.72 million. In Burundi, annual routine maintenance costs of the 37 km Gasenyi-Kirundo road section amount to US$ ; periodic maintenance costs are estimated at US$ 2.37 million. The annual rountine maintenance cost of feeder roads is estimated at US$ and US$ in Rwanda and Burundi respectively. The periodic maintenance (every 3 years) cost of feeder roads is estimated at US$ and US$ in Rwanda and Burundi respectively. These second generation Road Funds were put in place many years ago in both countries. They have always been inadequately funded, but significant efforts are being made to increase their resources and improve their organization and functioning. 6.2 Project Sustainability The project s sustainability depends on the quality of works, conditions of use of the road and feeder roads and their appropriate maintenance. Engineering studies have identified, in the project impact area, quality materials to be used. The infrastructure structure is in conformity with technical standards and technical road design and execution solutions are adequate to ensure a normal service life, in view of the projected traffic and topographical and climatological conditions. Under normal conditions of use (utilization of vehicles corresponding to standards in force in the countries and which are not overloaded) and appropriate maintenance, the road should offer users good traffic conditions over its twenty (20) years service life. These requirements will be enforced on this inter-state road which is part of the main road network of both countries. Its maintenance will be incorporated into the annual maintenance programmes of both countries and of the EAC North Corridor. Furthermore, the putting in place of a weighbridge at the common border crossing and the existence of this equipment on many road points in each country is a guarantee of an adequate control of the load of vehicles on the network Road works will be controlled by skilled consultants who will ensure the quality of structures to be built. Upon completion of the project, the road will be taken over by the UPPR which is responsible for roads in Rwanda and the OdR in Burundi. These bodies will ensure its maintenance through financing from the FER and the FRN whose resources will be increased by the provisions of paragraphs and Measures to build the capacities of local SMEs will also help to improve the quality of their interventions in road maintenance works.

60 With the establishment of road agencies in both countries as outlined in Chapter 3.5, the expectation is that there will be a remarkable improvement in the functioning of services in charge of the road network. Their shortage of human resources will be reduced gradually, thanks to institutional support and to the ongoing or envisaged capacity building in both countries by donors including the ADF, the World Bank, the EDF and ABEDA. This is addressed by the following projects : (i) Road Sector Reinforcement Project in Burundi (financed with an IDA credit); (ii) Road Maintenance Support Programme in Rwanda (financed by the EDF); and (iii) Road Infrastructure Project and Gitarama-Ngororero-Mukamira Road Project in Rwanda (financed by the ADF) The final method of management of the common border crossing will draw from the findings of studies on border crossings, notably on the North Corridor of which the project road is a link. These studies are under way, with World Bank financing. The ADF is also planning to contribute to the financing of the studies. In addition, ECCAS is examining the issues of transport and transit facilitation at border crossings. All these series of actions are part of the measures envisaged for the effective facilitation of transport and transit on the transport corridors. The results of these studies will help to define the final method of management of the common border crossings of the EAC and ECCAS zones which will contribute to sustaining the infrastructure and its operation. 6.3 Critical Risks and Mitigation Measures The first identified potential risk which could disrupt the implementation of the project is related to the current disturbance of the security situation in both countries, particularly in the project impact area. However, the national reconciliation and territorial security policy being conducted in both countries will be pursued and will help mitigate this risk. The second risk relates to inadequate resources for road maintenance, in particular the maintenance of the planned road. To mitigate this risk, both Governments have taken steps to substantially increase the resources of their Road Funds. Furthermore, in Rwanda, the EDF is planning to finance institutional support for the monitoring and management of Rwanda s FER. The third risk concerns the non-mobilization of counterpart funds. In this connection, counterpart funds are already included in the three-year public expenditure programme. In addition, both Governments have already mobilized counterpart funds for For the coming years, they will pursue the mobilization of their contribution in accordance with the planned expenditure schedule. The fourth risk concerns failure to pursue the policy to ensure regional integration and the harmonization of transit facilitation and common border crossing management texts. The current and planned implementation of operations relating to this policy, funded with an IDA credit and by the ADF, will contribute to mitigating this risk. 7. PROJECT BENEFITS 7.1 Economic Analysis The economic benefits expected from implementation of the project are related to the effects of opening up of a predominantly agricultural rural area, increased mobility on the interstate and regional road link and development of trade in the region and the project impact area. The implementation of the project will thus result in a reduction in transport and transit cost and time and in increased agricultural production generated by the facilitation of the sale of such production. These effects were measured by the economic rate of return (ERR) and discounted

61 47 income (DI) resulting from the comparison, from a community perspective, of economic costs and benefits in the without project and with project situations over a period of 20 years following the commissioning of structures. A discount rate of 12% and a residual value of 25% were used for the calculation of the economic benefits. The economic analysis was carried out using the HDM.4 model. The elements used in carrying out this economic analysis concern: data on the state of the road and on vehicles (light-and heavy-duty vehicles of more than 3 tonnes); present and future traffic, maintenance policies and strategies, and the different corresponding economic and financial unit costs collected during the appraisal mission (fuel, lubricant, price of vehicles, maintenance tasks, etc). Investment costs related to feeder roads and to transport and transit facilitation (equipped common border crossing) and the related benefits are taken into consideration as exogenous costs and benefits in the model The annual average daily traffic (AADT) of the project road comprises international and domestic traffic. The various origin-destination studies and surveys established normal traffic volumes that vary considerably, depending on the different project road sections, from 88 vehicles/day to vehicles/day. This high maximum level of AADT underscores the urban nature of the road section situated at the exit of the capital city Kigali which accounts for 80% of the transport flow on the project road. The overall AADT of the project road (all road sections), road stretch-weighted, stands at 601 vehicles/day about 15% of which is international traffic. The volume of heavy vehicles plying the project road varies from 10% to 25% depending on the road section The traffic forecast took into consideration two categories of traffic : normal and induced. For normal traffic, the following annual growth rates were retained: (i) for passenger transport vehicles : 3% prior to the commissioning of the road, 5% during the first five years of use of the road, and 4% beyond that period; and (ii) for goods transport vehicles : 4% prior to the commissioning of the road, 6% during the first five years of use of the road and 5% per annum beyond that period. These modest forecast rates are justified in view of the historical traffic trends (of 8% on average in Rwanda and 6% in Burundi), economic indicators such as the average economic growth rate of the last five years ( ) of about 5% in Rwanda and 3% in Burundi, and the projected economic growth rate of about 4.5% and 5.5% respectively in Rwanda and Burundi. Traffic induced by improvement of the technical features of the road is about 30% and will increase at the same rate as normal traffic Benefits related to the protection of socioeconomic infrastructure, which are difficult to monetize, were not incorporated into the economic design, but they are qualitative benefits which reinforce the project objectives. Furthermore, it should be pointed out that the construction of a new airport, envisaged in the region of Bugesera by the Government of Rwanda and which will generate traffic, was not also taken into consideration in the economic design, considering that no study is yet available. However, the operation of the new airport will generate additional traffic on the project road, which will reinforce the objectives and viability of the project during its service life The economic analysis established a 15.7% economic rate of return (ERR) of the project. This ERR shows that the investment is economically viable. 7.2 Social Impact Analysis Implementation of the project will further strengthen regional economic integration and contribute towards the reduction of transport costs. Indeed, the opening up of the area by a paved road and all-weather feeder roads will contribute to reducing transport

62 48 costs. It will also have a direct positive impact on the living conditions of the population of the project impact area. In the face of serious public health problems, the improvement of transport conditions will facilitate access to health infrastructure and the evacuation of patients which is very difficult during the rainy season. Given that a part of the agricultural potential is intended for export, in particular cash crops (notably coffee, tobacco and common sunflower), the construction of the road will facilitate the regular supply of food to the population and, hence, better marketing of products. The improvement of the road will enable the mobility of about one million people per annum. The rapid movements of vehicles, savings on fuel and the cost effectiveness offered by public transport will have a dampening effect on fares which could fall by about 15%. Another direct impact is the enhanced comfort and security of passengers, particularly for night traffic which will be safer with the putting in place of appropriate road signs and various road safety devices. Impact on employment Because of the various actions and measures, the project will have a significant impact on poverty reduction. In fact, during the asphalting of the road, development of feeder roads and construction of the common border crossing, a labour force made up of road operations technicians and unskilled workers will be recruited for a period of two years. It is expected that local temporary jobs will be created for about person-hours during works in both countries. It is therefore expected that nearly US$ 0.8 million will be distributed in the form of wages to home labourers (men-women) who will be employed during the execution of works In addition, the project will help provide new opportunities for the creation of sole proprietorships particularly in the areas of equipment maintenance, auto automatic parking, tire curing, masonry and joinery. Other positive impacts will result from the requirements of routine and periodic maintenance of the road and feeder roads which will procure the youth more stable and more lucrative jobs. After implementation of the project, the experience acquired by workers could be used for manual routine maintenance (road-mending) which will be financed by the road funds set up in Rwanda and Burundi. These maintenance works which will be carried out twice a year, before and after the rainy season, will contribute to the creation of additional permanent jobs of about person months per annum. These permanent jobs will thus procure the workers additional resources of about US$ 0.02 million. Impact on gender Implementation of the project will also have an appreciable positive impact on the activities of the population in general and, in particular, on women who account for more than half of the population in the project impact area and who carry out more than 70% of economic activities of the project area. Works requiring only a low level of qualification offer an employment opportunity for women. In road construction works, women account for about 25% of the employed labour force in Rwanda and Burundi. Regarding road maintenance works, they represent, in Rwanda, about 40% and in Burundi about 70% of the labour force. In addition, small businesses will surely be developed near the worksites. Domestic sites are attractive sites for the development of catering activities, in particular, for women. The jobs thus offered to women will help distribute incomes to supplement those from the sale of agricultural products whose demand will increase. These additional resources will help increase the incomes of women who engage in food cultivation and market gardening (off-season crops) and who sell their products on the local, district and provincial markets. The cost of transport, induced by the level of service of the road, will give new impetus to agriculture in the project area. Women will

63 49 also benefit from the implementation of the project through the transport facilities which will lighten the load of their work and improve the well-being of their families. Related improvements For the poor, who represent more than half of the population of the project impact area, and, in particular, women, to benefit from these new opportunities offered by the construction of the road, related developments will have a major impact on poverty reduction. They include: (i) improvement of feeder roads; (ii) enclosing and protection of social infrastructure situated along the road (protection of schools, health centres and markets); and (iii) construction of a range closet at the border crossing, rest areas for users of the road and shelters for the sensitization teams. 7.3 Sensitivity Analysis The sensitivity tests conducted concern three scenarios: (i) 10% increase in the investment cost; (ii) 10% reduction in economic benefits; and (iii) the combination of two scenarios, namely the 10% increase in the investment cost and the 10% reduction in economic benefits. The result of these tests is that the overall ERR of the project is, in the most unfavourable case (scenario iii), 14.1%. The project is therefore economically viable. 8. CONCLUSIONS AND RECOMMENDATIONS 8.1 Conclusions The project comprises road and socioeconomic infrastructure development works to address the needs of the riparian population, as well as measures regarding transport and transit facilitation on the road. Hence, implementation of the project, in tandem with the transport and transit facilitation operations of the World Bank and the ADF, will contribute to strengthening regional economic integration as well as economic cooperation between the two countries, through the improvement of trade and reduction of transport costs and non-tariff barriers. It will also lead to the development of agricultural production activities and trade. In this respect, the project is in line with the objectives of the PRSP and CSP of Rwanda and Burundi and of NEPAD which aim at ensuring the development of regional infrastructure and regional cooperation between regional member countries The project thus contributes to poverty reduction. By facilitating the movement of goods and persons and improving the living conditions of the riparian population, it also contributes towards the achievement of the Millennium Development Goals. The formulation of the project also drew on lessons learnt from our interventions in the two countries as well as those of other donors The project is technically well designed and is in keeping with the set objectives. Its potential negative impacts on the environment were identified and appropriate mitigation measures incorporated in the project. The project is economically viable and generates an average economic rate of return of 15.70%. The sustainability of investments is ensured, thanks to measures envisaged by both Governments to strengthen road maintenance as well as to manage and operate the common border crossing.

64 Recommendations In the light of the foregoining, it is recommended that an ADF grant of not more than UA million be awarded to the Republic of Rwanda and the Republic of Burundi. The ADF grant will be shared out as follows: UA million to the Government of the Republic of Rwanda and UA million to the Government of the Republic of Burundi. The grant will be used to implement the project as designed and described in this report. It will be subject to the conditions set out in the Protocol of Agreement. A. Conditions precedent to grant effectiveness The entry into force of this Protocol of Agreement shall be subject to its signature by the recipients and the ADF. B. Conditions precedent to the first disbursement The first disbursement of the grant funds shall be subject to the entry into force of the Protocol of Agreement and to fulfilment by the recipients, to the satisfaction of the Fund, of the following conditions: C. Other conditions Provide to the ADF evidence of the effective payment of compensations for expropriations of houses and lands (Para 4.6.9) In addition to the above-mentioned conditions, the Governments shall: (i) (ii) provide to the Fund, in June 2007 at the latest, evidence of the setting up of the Rwanda-Burundi Joint Board, on a transitional basis, for the management of the common border crossing (Para 5.2.4) ; and provide, each year, to the Fund, evidence of the half-yearly replenishment of the special accounts into which the counterpart funds are to be deposited (Para 5.5.2)..

65 Annex 1 Multinational / Rwanda Burundi : Kicukiro Kirundo Road Project Map of Road Network and Project Area This map has been provided by the staff of the African Development Bank exclusively for the use of the readers of the report to which it is attached. The names used and the borders shown do not imply on the part of the Bank Group and its members any judgment concerning the legal status of the territory nor any approval or acceptance of these borders.