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LANGUAGE: ENGLISH

Original: English

PROJECT: LUNGI – PORT LOKO ROAD UPGRADING

COUNTRY: SIERRA LEONE PROJECT APPRAISAL REPORT

DATE: APRIL 2009

Appraisal Team

Team Leader : Mr. BENARD Manuel, Transport Economist OINF.1 Ext. 2302 Team Members : Mr. WA-KYENDO Mumina, Transport Engineer OINF.2 Ext. 3478 Mr. SHALABY Hany, Environmentalist OSAN.3 Ext. 3006 Mrs. MUNTU Julia, Gender Expert /Socio-Economist OINF.0 Ext. 2652

Mr. BANGURA Abdul, Infrastructure Officer SLFO Ext. 6262

Sector Director : Mr. G. MBESHERUBUSA OINF Ext. 2034 Country Director : Mr. F. PERRAULT ORWB Ext. 2036 Division Manager : Mr. A KIES OINF.1 Ext. 2282

Peer Review

Mr. BANDA NGENGE ORPF Ext. 2564 Ms. LYDIE EHOUMAN OINF.1 Ext. 3442 Mr. PATRICK RUGUMIRE OINF.1 Ext. 3442 Mrs MARIEHELLEN M. KAPINGA OINF.1 Ext. 3561 Mr. CECIL NARTEY SLFO Ext. 6262

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TABLE OF CONTENTS

Pages

I STRATEGIC THRUST AND OBJECTIVES................................................................1 1.1 Project Linkage with Country Strategy and Objectives ............................................ 1 1.2 Rationale for Bank’s involvement............................................................................. 1 1.3 Donor Coordination................................................................................................... 2

II PROJECT DESCRIPTION .............................................................................................2 2.1 Project Components................................................................................................... 2 2.2 Technical Options Retained and Studied .................................................................. 3 2.3 Project Type............................................................................................................... 4 2.4 Project Cost and Financing Arrangements ................................................................ 4 2.5 Project Area and Beneficiaries .................................................................................. 6 2.6 Participatory Approach to Project Identification, Design and Implementation ........ 6 2.7 Bank Group Experience, Lessons reflected in Project Design.................................. 7 2.8 Key Performance Indicators ...................................................................................... 7

III PROJECT FEASIBILITY ...............................................................................................8 3.1 Economic Performance ............................................................................................. 8 3.2 Environmental and Social Impact ............................................................................. 9

IV IMPLEMENTATION ....................................................................................................12 4.1 Implementation Arrangements ................................................................................ 12 4.2 Monitoring and Evaluation...................................................................................... 14 4.3 Governance.............................................................................................................. 14 4.4 Sustainability ........................................................................................................... 15 4.5 Risk Management.................................................................................................... 15 4.6 Knowledge Building................................................................................................ 16

V LEGAL INSTRUMENT AND AUTHORITY .............................................................16 5.1 Legal Instrument..................................................................................................... 16 5.2 Conditions of Grant Approval ................................................................................ 16 5.3 Compliance with Bank policies.............................................................................. 17

VI RECOMMENDATIONS................................................................................................17

6.1 Conclusion and recommendation ............................................................................ 17

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LIST OF ANNEXES

Number No. TITLE of pages Annexes I. Sierra Leone Socioeconomic Indicators 1 II. Table of Bank Portfolio in Sierra Leone 1 III. Map of Project Area 1 Technical Annexes A. Support for Key Arguments of the Report A.1 Project Costs (details) 1 A.2 Implementation Arrangements (details) 1 A.3 Financial Management and Disbursement Arrangements (details) 1 A.4 Procurement Arrangements 3 A.5 Auditing Arrangements 1 A.6 Economic and Financial Analysis 4 A.7 Environmental and Social Analysis 9 A.8 Project Sustainability 1 A.9 Project Preparation and Supervision 1 B. Supplementary Technical Annexes B.1 Recommendations from the study on unit costs of road works 1 B.2 Procurement plan 1

LIST OF TABLES No. TITLE Page Table 2.1: Project Components............................................................................................................2 Table 2.2: Project Alternatives & Reasons for Rejection for Lungi – Port Loko road………………3 Table 2.3: Lungi - Port Loko Road Upgrading Project: Cost by Project Component .........................5 Table 2.4: Lungi - Port Loko Road Upgrading Project Costs with Built-in Contingencies ................5 Table 2.5: Project Cost by Category of Expenditure ...........................................................................5 Table 2.6: Expenditure schedule by component (Milllions UA) .........................................................6 Table 3.1: Summary of Economic Analysis ........................................................................................8 Table 4.1: Summary of Procurement Arrangements .........................................................................13

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Currency Equivalents

(December 2008) UA 1 = SLL 4466 UA 1 = US$ 1.48797 US$ 1 = SLL 3001

Fiscal Year

1 January - 31 December

Weights and Measures 1 kilogram (kg) = 2.205 pounds 1 metre (m) = 3.28 feet 1 kilometre (km) = 0.621 mile 1 square kilometre (km2) = 0.3861 sq mile 1 hectare (ha) = 2.471 acres

Acronyms and Abbreviations AADT Annual Average Daily Traffic AC Asphaltic Concrete ADB African Development Bank ADF African Development Fund ADT Average Daily Traffic (over a week period of time) AIDS Acquired Immune Deficiency Syndrome AutoCAD Engineering Drawing Software B/C Benefit Cost Ratio BOQ Bills of Quantities BSL Bank of Sierra Leone CBR California Bearing Ratio CDS Cross Drainage Structures CIF Cost, Insurance, Freight DBST Double Bituminous Surface Treatment DCP Dynamic Cone Penetrometer DXF Data Exchange Format ECOWAS Economic Community of West African States EIA Environmental Impact Assessment EIRR Economic Internal Rate of Return EU European Union FSF Fragile State Fund GOSL Government of Sierra Leone HIV Human Immunodeficiency Virus IDA International Development Association IMT Intermediate Modes of Transportation IRI International Roughness Index IRR Internal Rate of Return kph Kilometer per hour NEPAD New Partnership for Africa’s Development NGSP National Gender Strategic Plan

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NPV Net Present Value OPEC Organization of Petroleum Exporters Countries PA Project Area PAP Project Affected Persons/People PHU Peripheral Health Units PRSP Poverty Reduction Strategy Paper SLL Sierra Leone Currency (Leone) SLRA Sierra Leone Road Authority STAP NEPAD Infrastructure Short-Term Action Plan STD Sexually Transmitted Diseases UNCTAD United Nations Conference on Trade and Development USD United States Dollar VAT Value Added Tax VPD Vehicles per day SPW Student’s Partnership Worldwide VOC Vehicle Operating Costs VOP Variation of Price VPD Vehicles per day WB World Bank ZOI Zone of Influence

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Customer Sheet COUNTRIES : Sierra Leone PROJECT TITLE : Port Loko – Lungi Road Rehabilitation Project LOCATION : North-West of Sierra Leone BORROWER : Non applicable DONEE : Republic of Sierra Leone EXECUTING AGENCY : Sierra Leone Roads Authority (SLRA)

PMB 1324, Kissy, Freetown, Sierra Leone Tel: (232) 22-226 565 Fax: +232 -22-222 346 e-mail: slra_mis@sierratel.sl

Financing Plan Source Amount in UA

Million Instrument

ADF GRANT (country allocations) 26.26 Project Grant GOSL 0.6 PAP compensation TOTAL 26.86 Important Financial Information

Loan/Grant currency Unit of Account (UA) Type of interest Not applicable Interest rate margin Not applicable Service charge for ADF loan Not applicable Commitment charge for ADF loan

Not applicable

Other charges Not applicable ADF loan duration Not applicable ADF loan grace period Not applicable FRR, NPV (baseline scenario) Not applicable ERR, NPV (baseline scenario) 16.0%, USD 113.10 million

Duration – Main Stages (expected)

Activities (month, year) Approval of concept note January 2009 Project approval May 2009 Effectiveness June 2009 Last disbursement December 2013 Completion December 2014 Last repayment date n/a

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EXECUTIVE SUMMARY Overview of the Project 1. As part of its economic development and poverty reduction strategy, Sierra Leone has defined closing infrastructure gaps and promoting private sector growth as essential. The Lungi-Port Loko road project (62km) fully complies with this national strategic orientation. The project will improve the land route between the airport at Lungi and the capital Freetown, and also enhance the development of regional trade between Port Loko district and the rest of the country and Guinea. The project covers: i) Construction works for the upgrading of 62km Lungi -Port Loko road to paved standards and the rehabilitation of 6.5km of Lungi township roads, the gravelling of 30km of earth feeder roads and construction of social infrastructure for local small scale farmers; ii) Consultancy services for the supervision of the works, iii) Consultancy services for Evaluation and Monitoring of the project impact, and iv) project audit consultancy services. The duration of implementation of the project is 24 months (January 2010 to January 2012). The total project costs, exclusive of taxes and duties are UA 26.26 million. The cost of compensation is estimated at UA 0.6 million.

2 The project beneficiaries are estimated at about 480 thousand people, that is 8.4% of Sierra Leone’s population. They are made up of inhabitants of the project area (PA) and road users. The project is connecting to the Freetown - Conakry road corridor and as such, will contribute to regional integration between Sierra Leone and the neighbouring countries. In addition, this project is country-driven as linked with two of the four themes of the draft PRSP II of the GOSL, which is closing infrastructure gaps and enabling private sector growth. Furthermore the medium-term Bank Group Strategy (2008-2012) which has put a strong emphasis on infrastructure, including transport, promotes and supports regional integration and the development of fragile states.

Needs Assessment 3. The investment requirements for this project stem from the current situation of poor condition of the road which is a major impediment to movements of goods and people in the Port Loko District and beyond. Therefore the road needs to be upgraded in order to adapt to transport needs of the users. The design of the road is based on a detailed feasibility and engineering study conducted in 2006 and updated in 2008, which also arrived at the conclusion that the envisaged investments need to be made. In addition to its contribution to improving the link Freetown to Lungi and the sub-regional trade, the implementation of the project will reduce poverty by contributing to the development of the agricultural production areas within the zone of influence and the marketing of agricultural products between the capital and the Northern region.

Value added for the Bank 4. The objective of the Government’s poverty reduction strategy is to improve the road network and access to markets and farms, thereby increasing food security. By supporting this project, the Bank will contribute to the objectives assigned in the first pillar of the country’s CSP and contribute in the implementation of the Regional Integration Strategy for West Africa. The project is connecting to the Freetown - Conakry road corridor and as such, will contribute to regional integration between Sierra Leone and the neighbouring countries.

Knowledge Management 5. The knowledge acquired from the implementation of similar road projects was used in the design of the project. Technical knowledge gained through the ongoing road projects financed by the Bank and other donors will be used in the implementation of this project. The project’s monitoring and evaluation mechanism will also help to consolidate knowledge that will be used in

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designing future projects. Monitoring and evaluation operations of the current PRSP II will include the Lungi - Port Loko Road Upgrading Project monitoring activities in its Working Group dedicated to road activities.

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SIERRA LEONE LUNGI - PORT LOKO ROAD UPGRADING PROJECT (62 km)

VII. RESULTS BASED LOGICAL FRAMEWORK REVISION DATE: 3/15/2009 DESIGN TEAM: M. Benard, J. Muntu and M. Wa-Kyendo

Hierarchy of Objectives

Expected Results

Reach Performance Indicators Source Method

Indicative Targets Timeframe Assumptions / Risks

1 – Goal Global objectives to which the project is to contribute to Increased economic development in the project area and increased regional integration

Impact Long-term results, Logical consequence of project effects 1. Improved economic growth 2. Reduced incidence of poverty

Beneficiaries Population benefiting directly or indirectly from the project 1. Rural and urban populations in Sierra Leone

Impact Indicators Evidence showing the accomplishment of results 1.1 National incidence of poverty Sources / Method: National Statistics, Development Reports, UNDP

Progress anticipated in the long term 1. GDP growth of 6% annually for the period 2009-12 and 5% thereafter

Assumptions Risk factors and conditions vital to success Mitigation strategy/strategies 1. Political stability 2. Institutional capacity 3. Donor support

2. Project Purpose : Changes intended or anticipated as a result of the accomplishment of the project The specific project objective is to stimulate regional economic growth and integration by reducing transport time and costs between Lungi and Port Loko

Outcome: Medium Term Results, Logical consequence of project outputs 2.1 Improved level of transport ( reduced travel time and cost for goods and passengers ,with reduced VOCs,including Time and Safety, between Lungi and Freetown) 2.2. Increased Agriculture production 2.3 Regional integration improved 2.4 Reduction in the number of Teenage Pregnancies and reduction in the spread of HIV /STD, and road accidents.

Beneficiaries Target group(s) benefiting from the project results 2.1 Population and transport users in the project zone 2.2 Sierra Leone population

Indicators Evidence showing the accomplishment of the intended outcomes of change 2.1 Vehicle operating costs (VOCs) on the project road 2.2 Agricultural production 2.3 Intra-regional trade with Guinea increases 2.4 Reduction in the number of Teenage Pregnancies and reduction in the spread of HIV /STD, and road accidents. Source/Method: Districts, National Statistics, MOT , Sierra Leone Road Authority

Progress anticipated in the medium term 2.1 At least 40% reduction in VOCs from 2008 to 2012, from 61.0 USD/km to 36.6 USD/km for a passenger car 2.2. At least 40% increase in agriculture area cultivated from 2008 to 2012, from 22,895 ha to 32,011 ha 2.3 Intra-regional trade with Guinea increases by 20%, rising from USD 2.0 million in 2008 to USD 2.4 million in 2012 2.4 By 2012, 8,000 persons sensitized on HIV/AIDS, malaria, teenage pregnancies and road safety.

Assumptions Statement: Risk factors and conditions vital to success Mitigation strategy/strategies 2.1 Compliance with implementation schedule 2.2 Adequate performance of the construction firm

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3. Inputs and activities: Financial and human resources enabling the accomplishment of the activities necessary for the production of an output 3.1 Procurement of works and consultancy services 3.2 Construction of Civil works Inputs - (millions UA): A. Works 25.22 B. Services 1.04 Total A 26.26 Compensation/resettlement 0.60 Total B 26.86 Sources of financing (million UA) ADF Grant 26.26 GOSL 0.60 Total 26.86

Outputs: Short Term Results, Logical consequence of project outputs 3.1 A completed upgraded

two-lane bitumen road with 6.7-m wide carriageway and 1.5-meter sealed shoulders for a total of 62 km, rehabilitation of 6.5km Lungi roads and

3.2 30 km of associated feeder roads developed, socio-economic infrastructures such as market stalls along the road built.

3.3 Local communities sensitized on HIV/AIDS, malaria, teenage pregnancies and road safety

Beneficiaries Target group(s) benefiting directly from the project results 3.1, Local communities and, local suppliers 3.2 Local traders and producers of which a high percentage are women 3.3 Teenagers, Youth and entire PA Community 3.4 Construction workers, and Road users

Indicators Evidence showing the accomplishment of the intended outcomes of change 3.1 Length of road upgraded, 62 km, 6.5km Lungi township road rehabilitated 3.2 30 km of feeder roads developed, 4 Market stalls, one at every junction intersecting with the feeder and main Road and 14 Drying Floors built. 60 IMT (Donkey drawn carts or multi-purpose carts) 3.3 Number of persons sensitized on HIV/AIDS, malaria, teenage pregnancies and road safety3.5. Increase of Local traders and producers (65% are women) Source / Method : Appraisal Report, Quarterly reports, Technical and Financial Audit reports, Disbursement Records, Bank Supervision missions and Mid– Term review

Progress anticipated in the Short term 3.1 62 km of bitumen paved road between Port Loko - to Lungi 3.2 6.5km Lungi township road rehabilitated 3.3 30 km of feeder roads developed 3.4 4 Market stalls, one at every junction intersecting with the feeder and main Road and 14 Drying Floors built 3.5 60 IMT (Donkey drawn carts or multi-purpose carts) 3.6 From 2008 to 2012, increase of Local traders and producers from 90 in 2008 to 120 in 2012 3.8 From 2008 to 2012 a decrease in the number of reported teenage pregnancies by 6,460.

Assumptions Statement Risk factors and conditions vital to success Mitigation strategy/strategies 3.1 Inadequate Maintenance: 3.2Inadequate institutional capacity of SLRA: 3.3 Delays in implementation of project: 3.4 Post-conflict instability

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SIERRA LEONE - LUNGI - PORT LOKO ROAD UPGRADING PROJECT- IMPLEMENTATION SCHEDULE ID Task Nam e Duration

1 LUNGI - PORT LOKO P ROJE CT : SCHEDULE OF A 0 days2 GENERAL ACTIVITIES 262 days3 Project approval 0 days4 Signature/Effectiveness 0 days5 Publication of Project GPN 0 days6 Publication of Project SPN 0 days7 CIVIL WORKS (Advance Contracting) 860 days?8 Bank approval of Advance contracting 5 days9 Preparation of Bidding documents by the Executing Agency 0 days10 Submission and launching of tenders 21 days11 Preparation / Submission of bids 90 days12 Analys is and evaluation of bids by the Executing Agency 22 days13 Approval of Bid Evaluation Report by OINF 30 days14 Notification and Contract Negotiation 10 days15 Submiss ion and approval of draft contract 15 days16 Signature of the contract 17 days17 Contract Commencement 33 days18 Contract implementation/Completion 522 days19 Defect Liabiity Period 262 days20 SUPERVISION (incl. Monitoring-Evaluation/Sens itization) 1029 days21 Bank approval of Advance contracting 5 days22 Preparation of Bidding documents by the Executing Agency 0 days23 Submiss ion to the Bank of Bidding documents and Tender 22 days24 Bank's Approval of Bidding documents 6 days25 No objection to Short-Lis t 1 day?26 Launching of Tenders 5 days27 Preparation / Submiss ion of bids 28 days28 Analys is and evaluation of bids by the Executing Agency 44 days29 Approval of Bid Evaluation Report by OINF 22 days30 Notification and Contract Negotiation 10 days31 Submiss ion and approval of draft contract 15 days32 Approval by the Bank of the minutes of negotiations and draft con 5 days33 Signature of the contract 22 days34 Contract Commencement 20 days35 Contract implementation/Completion 522 days36 Sens itization campaign(Road Safety, environment, Malaria) 1045 days37 End of Services 0 days38 AUDIT 1060 days39 Bank approval of Advance contracting 5 days40 Preparation of Bidding documents by the Executing Agency 0 days41 Submission to the Bank of Bidding documents and Tender 21 days42 Bank's Approval of Bidding docum ents 6 days43 Analys is and evaluation of bids by the Executing Agency 44 days44 Approval of Bid Evaluation Report by OINF 22 days45 Notification and Contract Negotiation 10 days46 Submission and approval of draft contract 15 days47 Signature of the contract 22 days48 Contract Com mencement 20 days49 Contract im plementation/Completion 522 days50 Realization of audits 2011 20 days51 Realization of audits 2012 20 days52 End of services 0 days

26/01

06/0519/05

27/0413/03

20/03

20/03

20/03

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan FebQtr 1, 2009 Qtr 2, 2009 Qtr 3, 2009 Qtr 4, 2009 Qtr 1, 2010 Qtr 2, 2010 Qtr 3, 2010 Qtr 4, 2010 Qtr 1, 2011 Qtr 2, 2011 Qtr 3, 2011 Qtr 4, 2011 Qtr 1, 2012 Qtr 2, 2012 Qtr 3, 2012 Qtr 4, 2012 Qtr 1, 2013

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REPORT AND RECOMMENDATION OF THE BANK GROUP MANAGEMENT TO THE BOARD OF DIRECTORS FOR A PROPOSED GRANT TO SIERRA LEONE TO

FINANCE THE LUNGI - PORT LOKO UPGRADING ROAD PROJECT

Management hereby submits this report and recommendation for a proposed grant of UA 26.26 million to the Government of Sierra Leone to finance the Lungi - Port Loko Road Upgrading Project.

I STRATEGIC THRUST AND OBJECTIVES

1.1 Project Linkage with Country Strategy and Objectives 1.1.1 The Lungi-Port Loko road project fully complies with the strategic orientation of the Bank Group’s CSP 2005-2009 for Sierra Leone as articulated around Pillar I as reformulated in the CSP mid-term review “supporting pro-poor growth” with emphasis on good governance and infrastructure. Rehabilitating the selected transport infrastructure will improve access to markets and farms, increasing food security and thereby reducing poverty. Upgrading the Lungi to Port Loko road will improve the condition of the road network between the capital and Lungi, thereby facilitating to the objectives assigned in the first pillar and contribute in the implementation of the Regional Integration Strategy for West Africa.

1.1.2 The project is connecting to the Freetown - Conakry road corridor and as such, will contribute to regional integration between Sierra Leone and Guinea. In addition, this project is country-driven being linked to two of the four major themes of the draft PRSP II of Sierra Leone. The two themes are (i) closing infrastructure gaps and (ii) enabling private sector growth. Furthermore the medium-term Bank Group Strategy (2008-2012) has put strong emphasis on infrastructure, including transport which promotes engagement in and support for regional integration and development of fragile states.

1.2 Rationale for Bank’s involvement 1.2.1 The project‘s justification is based on the improvement on the land route between Lungi and Freetown and on the development of regional trade between Port Loko district and the rest of the country and Guinea. Lungi town hosts the Lungi international airport, the gateway to Sierra Leone, and yet it is not connected by a paved road to any part of Sierra Leone, including the capital city of Freetown. The lack of reliable road connection has curtailed the mutual trade and investment and other socio-economic benefits between Lungi, Freetown and the rest of the country. For example, airport transfers are made using helicopter, ferry or hovercraft whose services carry a high safety risk. Not only that, the services are time consuming and can take up to 8 hours between arrival at airport and Freetown. In the Zone of Influence (ZOI), economic transport of farm produce and farm inputs is impeded by poor connectivity between the farming areas and the consumption centers. The project will contribute to the improvement of the road network which carries over 80% of the domestic traffic flows. In addition to Lungi – Port Loko road, there is 6.5km Lungi township road and 30km of feeder roads connecting to the main project road which provide access to the agriculture zone.

1.2.2 The Lungi – Port Loko road project will connect the Port Loko district to the Economic Community of West African States regional priority Freetown – Conakry road corridor and therefore will promote regional economic integration with Guinea and other trading partners.

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The Bank’s intervention in Lungi-Port Loko road is adding to the synergy already created within the donor community investment plans because the project road is complementing to the European Union funded Freetown – Conakry road corridor.

1.3 Donor Coordination 1.3.1 The main activities of donors in the road sub-sector are coordinated through the Sierra Leone Road Authority (SLRA), and the Ministry of Transport and Aviation. However, the donors do not have a formal organization. In order to enhance coordination and harmonization of best practices between donors and the Government, biannual round table meetings are held to review progress made in the implementation of the PRSP for the Road sub-sector. Those meetings address the transport sector issues.

1.3.2 The active donors in the transport sector include the World Bank (WB), the European Union,(EU), Organization of the Petroleum Exporting Countries (OPEC), Kuwait Fund for Arab Economic Development and the Bank. The main donor in the road sub-sector is the EU. The Lungi – Port Loko road project will promote the synergies between the EU and the Bank because the proposed project complements the Lungi airport to the ECOWAS regional priority Freetown – Conakry road corridor, which is EU funded.

II PROJECT DESCRIPTION

2.1 Project Components The table 2.1 below describes the components of the project.

Table 2.1: Project Components

No. Component Estimated cost (UA millions)

Component description

A WORKS Road works and Goods

25.22

• Construction works for the upgrading of 62-km Lungi -Port Loko road to paved standards, with a double bituminous surface treatment. The road cross section will be 9.7m including a carriageway width of 6.7m and 2 x 1.5m sealed shoulder.

• The rehabilitation of 6.5km of Lungi township roads

• The gravelling of 30km of earth feeder roads which serve rural communities abutting the project road

• The provision of simple social infrastructure for local small scale farmers.

B B1

SERVICES Consultancy for supervision of the works, Monitoring and Evaluation and Audit

1.04

• Engineering consultancy services for supervision of the above civil works. The services will also include sensitization on HIV/AIDS, teenage pregnancies, malaria and road safety.

• Consultancy services for Evaluation and Monitoring of the project impact. The consultant will develop the mechanism for monitoring and evaluating the impact of the

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completed project, including collection of baseline data and first and second year impact data.

• Consultancy services for the audit of the technical, managerial and financial aspect of the project. The consultant will audit the construction of the works, supervision services and the monitoring role of the executing agency.

Total 26.26

2.2 Technical Options Retained and Studied 2.2.1 The road works consist of 62 km Lungi -Port Loko road upgrading, the rehabilitation of 6.5km of Lungi township roads and the gravelling of 30km of earth feeder roads.

2.2.2 The 62 km Lungi -Port Loko road traverses a gently rolling terrain and the structural and road alignment design took into consideration these and other existing conditions of the alignment including the soil, the engineering properties of gravel and rock material sources, rainfall and drainage patterns, terrain, and current road roughness, and current and future traffic characteristics (vehicle volumes, modal splits and axle wheel loading). In addition, the economic, environmental and social issues were taken into consideration.

2.2.3 The final design elements were in accordance with Sierra Leone Road Authority Road Design Manual. The road pavement will consist of a crushed rock base structure sitting on selected high quality gravel and will be sealed with a double bituminous surfacing treatment. The road cross section will be 9.7m including a carriageway width of 6.7m and 2 x 1.5m sealed shoulders. The road traverses gently rolling terrain and has generally low gradients (the highest is 6% compared to a maximum allowable 12%). The design speed is 80kph hour, reducing to 70kph at villages and towns. The road is widened at tight curves in order to improve the safety. A number of bus-stops have been provided in strategic positions along the road. The project provides space for future installation of Information Communication Technology, fiber optic wires, and other public utilities.

Table 2.2: Project Alternatives & Reasons for Rejection for Lungi – Port Loko road

Alternative Brief description

Reasons for rejection

(i) Gravel road surface consisting of 300mm of 2 layers of compacted soil

The current traffic levels could warrant a gravel road and thus a gravel road as a low cost technical solution was considered

The traffic projected to use the completed road warrants a paved road surface, and cannot be sustained on a gravel road surface.

The road is part of the core network of national roads connecting the international airport with the rest of the country as well as the Freetown –Conakry road corridor which is part of the regional ECOWAS network

(ii) Paved road carriageway with Gravel shoulders

A cost saving design which combines a double surfaced bituminous carriageway with gravel shoulders.

The shoulders will wear out faster and create an overhang (the road carriage way at higher level than the shoulder). This is considered unsafe for motorist if they

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veered off the road. Further, it causes difficulties to emergency off- road parking.

(iii) Narrow 6m wide carriageway paved road

A cost saving design in which the pavement structure is paved with DBST but the width is reduced from 6.7m to 6 m to cut cost

A narrow road would compromise road safety to motorists especially during overtaking.

6.7m carriageway is the SLRA current standard design applied throughout the country

2.2.4 The 6.5 km Lungi township road serves residential/shopping areas, hospital and police station. The road was once paved with bituminous surfacing but has since deteriorated to pot-holed gravel road which become very dusty during the dry season and muddy during the rainy season, presenting difficulty for road users. The technical solution retained includes construction of a structural base layer and a bituminous surfacing that will reduce dust and mud and improve motor-ability. It would not be practical to retain a gravel surface on this road.

2.2.5 The 30km roads selected for repair/gravelling are earth tracks adjoining the Lungi-Port Loko road which serve the rural communities. Grading the roads and adding compacted gravel material is the technical solution that is practical and will improve the movement of motorized vehicles on the feeder roads making the main Lungi – Port Loko road and the attendant services more accessible to the rural communities. These communities will also be provided with market stalls and Intermediate Modes of Transportation (IMT).

2.3 Project Type The project is designed to be a standalone operation. All the transport sector operations funded by donors in Sierra Leone are implemented in a similar way.

2.4 Project Cost and Financing Arrangements Cost Estimate

2.4.1 The total project costs, exclusive of taxes and duties and inclusive of physical and price contingencies, are UA 26.26 million. The costs are based on a feasibility study and detailed engineering design of Lungi - Port Loko road that was conducted by a consultant using funds granted by the Bank. The costs have been adjusted according to the current regional average cost of road construction.

2.4.2 The estimated project costs by components are presented in Table 2.3 below. The following contingencies have been applied: 10% contingency for physical works and an average of 6.9% for price variation. The project cost shown here does not include the cost of resettlement of People Affected by Project, estimated at USD 950,000 (UA 0.6 million).

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Table 2.3: Lungi - Port Loko Road Upgrading Project: Cost by Project Component

Millions US Dollars Millions UA

Project items Local

(20%)Forex (80%) Total

Local (20%)

Forex (80%) Total

A. Cost of Works 6.84 27.37 34.22 4.31 17.26 21.57 B. Cost of Consultancy i. Supervision of works 0.26 1.03 1.29 0.16 0.65 0.81 ii. Monitoring & Evaluation 0.01 0.05 0.06 0.01 0.03 0.04 iii. Project audit 0.01 0.05 0.06 0.01 0.03 0.04 Base Cost 7.13 28.50 35.63 4.49 17.97 22.46 Add 10% Physical Contingency 0.71 2.85 3.56 0.45 1.80 2.25 Add 6.9% Financial Contingency 1.09 1.37 2.46 0.69 0.86 1.55

Total Project cost 8.93 32.72 41.65 5.63 20.63 26.26 Note: The Project Costs do not include the cost of resettlement of People Affected by Project est. at USD 950,000 (UA 600,000).

2.4.3 Table 2.4 below outlays the costs of each component inclusive of the respective contingency amounts. The cost of construction of civil works for the 62km, 6.5km Lungi township road, and 30km of the rural feeder roads gravelling, amounts to UA 25.22 million. The cost of consultancy for supervision is UA 0.96 million, that of consultancy for project audit is estimated at UA 0.04 million, and similarly, the cost of consultancy for monitoring and evaluation is UA 0.04 million. Furthermore, table 2.5 shows the cost of each category of expenditure.

Table 2.4: Lungi - Port Loko Road Upgrading Project Costs with Built-in Contingencies

Million US Dollars Millions UA

Project Components Local (20%)

Forex (80%) Total

Local (20%)

Forex (80%) Total

A. Cost of Works 8.57 31.42 40.00 5.41 19.81 25.22 B.i. Cost of supervision consultancy 0.32 1.19 1.51 0.20 0.75 0.95 B.ii. Cost of M&E consultancy 0.02 0.06 0.07 0.01 0.03 0.04 B. iii Cost of audit consultancy 0.02 0.06 0.07 0.01 0.03 0.04

Total Project Costs 8.93 32.72 41.65 5.63 20.63 26.26 Table 2.5: Project Cost by Category of Expenditure

Million US Dollars Millions UA

Project items Local (20%)

Forex (80%) Total

Local (20%)

Forex (80%) Total

A. Cost of Works 6.84 27.37 34.22 4.31 17.26 21.57 B. Cost of Consultancy 0.28 1.13 1.41 0.18 0.71 0.89 Base Cost 7.13 28.50 35.63 4.49 17.97 22.46 Add 10% Physical Contingency 0.71 2.85 3.56 0.45 1.80 2.25 Add 6.9% Financial Contingency 1.09 1.37 2.46 0.69 0.86 1.55 Total Project cost 8.93 32.72 41.65 5.63 20.63 26.26

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Financing Arrangements 2.4.4 The Bank Grant will fund all the project costs, excluding local taxes and duties, up to a maximum of UA 26.26 million, which includes UA 5.63 million in local costs and UA 20.63 million in foreign currency costs. This project financing is based on a 100% financing by the Fragile States Facility (FSF). The government will fund the cost of compensation/resettlement of people affected by project (estimated at UA 0.6 million), local taxes and duties and any cost overruns beyond the grant provisions that the project may experience.

2.4.5 Table 2.6 below shows the expected expenditure schedule by project component throughout the project implementation.

Table 2.6: Expenditure schedule by component (Milllions UA)

Project Components 2010 2011 2012 TotalA. Cost of Works 12.61 10.09 2.52 25.22 B.i. Cost of supervision consultancy 0.48 0.38 0.10 0.95 B.ii. Cost of M&E consultancy 0.02 0.01 0.01 0.04 B.iii. Cost of audit consultancy 0.00 0.02 0.02 0.04 Total Project Costs 13.11 10.50 2.65 26.26

2.5 Project Area and Beneficiaries 2.5.1 Port Loko District is the most populous district in the Northern Province with a population estimated to be around 480,000 inhabitants and is the fourth most populous district in Sierra Leone. The district occupies a total area of 5,883 km² and comprises eleven chiefdoms. The Lungi township is of strategic importance as it hosts the international airport and the docking station for the ferry. Lungi has a population of 7,720 (2006 estimate)

2.5.2 The project road will provide better accessibility to the production centers, markets and tourist sites, as well as to the social facilities such as education and health centers (one hospital at Port Loko, one hospital in Lungi Township and two health centres in the Loko Massama Chiefdom). The main beneficiaries of the project will be women and children who constitute a bigger proportion of the population, resulting in a stronger social fabric. 54.2 % of the sample household members are females, whilst males account for 45.8%. About 41% of the members in the households fall under 17 years of age. About 33 % of the household members are youths (18-35 years) while only 26 % are over 35 years of age. Further characteristics on social impacts are detailed in chapter 3.2.

2.6 Participatory Approach to Project Identification, Design and Implementation

2.6.1 Consultations with stakeholders at the national, district and village levels were held during the feasibility study/ detailed design stage in 2006. In addition the Bank held a public workshop of all stakeholders during the preparation mission (October 2008) where environmental/climate change and cross-cutting issues were presented. The Port Loko workshop was attended by 100 persons and at least 40 % were women. There are no major adverse direct or indirect impacts like land prone to erosion, wetlands or other areas of regional importance.

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2.6.2 Small-group consultations also took place where more specific issues were discussed, such as gender differentiation in roles and responsibilities, HIV/AIDS, malaria, teenage pregnancies and related health and social issues. From the Public consultations, it emerged that issues such as HIV/AIDS, malaria, teenage pregnancies as well as road safety are important to stakeholders and the project will include a sub-component for sensitization. Apart from construction of the Lungi – Port Loko road, and the Lungi township road, it was found that feeder roads linking the villages to the main road, market stalls, grain drying floors and the supply of IMT facilities are essential to the communities. These project activities are targeting improving accessibility, and increasing revenues from the agricultural produce.

2.7 Bank Group Experience, Lessons reflected in Project Design 2.7.1 Over the last decade, the Bank has only financed 2 studies including the completed Freetown - Port Loko road design study (on which the current project is based) and the on-going Matotoka-Sefadu road study and institutional support. The performance of the two Bank operations in the transport sector has been characterized by delays in procurement activities as expressed in Sierra Leone’s Results-based Country Strategy Paper (2005-2009), its Mid Term Review of November 2008, and the Country Portfolio Review of August 2008. These delays were mainly due to the low capacity of the implementing agency and consequently non-compliance with the Bank’s procurement rules. The Bank has recognized this weakness and is currently funding a capacity building component within the Matotoka- Sefadu study.

2.7.2 The Lungi-Port Loko road project has taken into consideration this aspects and it will benefit from the increased capacity at the executing agency by utilizing the capacity building component under the Matotoka-Sefadu Road study. As well, the recent establishment of the Bank’s Field Office in Freetown will assist the executing agency as necessary. In addition, short-term experts will be hired if deemed necessary.

2.7.3 The inclusion of the Lungi township road, the feeder roads and the construction of social infrastructure such as market stalls, grain drying floors and provision of IMT are lessons learnt from past experience. These facilities enable the community to directly benefit from the road project by enhancing their economic activities that will lead to poverty reduction.

2.8 Key Performance Indicators Implementation and Impact performance indicators 2.8.1 There will be two categories of performance indicators: (i) the project implementation performance indicators which will be based on the corporate indicators and the outputs of the project and will be applied during the period of project construction and (ii) the development effect of the project indicators that will apply after project completion which are based on the outcomes of the project as stated in the project result based-matrix.

2.8.2 The corporate key performance indicators will mainly include disbursement rates and the physical implementation i.e. project execution which will be measured against the project implementation plans as agreed during the project preparation. The principal outputs of this project are as follows: 62 km of upgraded road, 6.5km roads rehabilitated to paved standards, 30 km of graveled earth feeder roads, 4 markets stalls where the feeder roads are adjoining the main road, 14 grain drying floors and 60-intermediate technology carts. In addition, local communities sensitized on HIV/AIDS, malaria, teenage pregnancies and road safety measures. If all the foreseen works are realized then the principal project outcome indicators are: i) increased agricultural production in the ZOI; ii) increased inter-regional trade with Guinea; iii)

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reduced vehicle operating costs (VOCs) on the project road; iv) increase of local traders and producers; iv) decreased number of HIV/AIDS, malaria cases, teenage pregnancies and road accidents.

Mechanisms for Monitoring the Project 2.8.3 The corporate key performance indicators will be monitored by the supervision consultancy, SLRA, and through Bank supervision missions. The Monitoring and Evaluation consultant will be responsible for establishing the system of monitoring and evaluating the project impact indicators and upon completion of the project, impact assessments will be carried out by SLRA.

III PROJECT FEASIBILITY

3.1 Economic Performance 3.1.1 The economic performance of the road has been assessed by using (i) savings on Vehicle Operating Costs (VOC) on traffic, (ii) time savings on ferry, (iii) agricultural production surplus in the ZOI. The future traffic (normal, induced, deviated) on the project road is estimated at an average of 250 vehicles per day in 2012. The lack of a reliable road connection has impeded development between Lungi, Freetown and the rest of the country. The road, presently, has all the characteristics of a “rural/agriculture road”, and has been considered as such in the course of the economic evaluation. The transport costs were calculated through the VOC by using the HDM sub-model and an estimate of the passenger travel time value. The VOC of a car on a good road is 621 SLL/km and 974 SLL/km on a bad road, thus the savings on VOC are 36% after upgrading the road.

3.1.2 The Ferry traffic between Freetown and Lungi as deviated traffic (expressed as 93 vehicles) has been incorporated in the economic evaluation for time savings as the road once completed will provide a safe, reliable connection between the Lungi airport and the capital.

3.1.3 Agricultural production surplus in the ZOI of influence was computed over the project life cycle. The most direct impact after the project implementation is a reduction of VOC, it is anticipated that after the project completion, agriculture producers will have access to cheaper farm inputs and easier access to the markets. This will bring greater added value to agricultural production.

3.1.4 Based on the costs and benefits related to the project, the evaluation of the investment, at 2008 prices, resulted in a 16.0 % internal rate of return for the project. A sensitivity analysis on a simultaneous rise in investment costs by 10% and a 10% decrease in the benefits (most unfavorable scenario) gives a 12.9% internal rate of return. The table 3.1 below summarizes the economic analysis, which is presented in detail in Annex A.6.

Table 3.1: Summary of Economic Analysis

Financial rate of return (FRR) in % NA Net Present Value (NPV) in US$ Million 113.10 Economic rate of return (ERR) in % 16.0% Sensitivity of the ERR (10% increase in costs and 10% decrease in benefits) 12.9% Discount rate 10% Residual value of investment after 20 years 23%

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3.2 Environmental and Social Impact Environmental 3.2.1. At the environmental level, the project is classified in category 1. The Lungi-Port Loko road, which will follow the existing route, will be upgraded. The expected negative environmental impacts can be controlled by taking appropriate mitigation measures. An Environmental and Social Management Plan (ESMP) and Resettlement Action Plan (RAP) have been prepared, and their summaries were published in the Bank website on 19th December 2008. An environmental and Social Impact Assessment (ESIA) report has also been prepared and certified by the Ministry in charge of Environment of Sierra Leone. Key potentially beneficial impacts associated with the project implementation are related to the post-construction phase and include significant reduction in transport costs, benefiting agricultural producers who export goods and import inputs to/from the project area and consumers who purchase goods brought into the area by road. Other beneficial impacts relate to improvements in travel conditions for vehicles, passengers and the many non-vehicular road users; improved access and reduced transport cost of public transport by providing conditions where more bus services are likely to operate; improved road safety and improved access to health services for all road users. The new upgraded road will now provide good opportunity for goods and services to move along the route. In addition, the increase flow of traffic and goods will ignite economic opportunities for the benefit of the people along the road.

3.2.2 No notable adverse direct or indirect impacts are anticipated in respect of environmentally sensitive areas like National Parks, Wildlife Reserves, National Forest Priority Areas, land prone to erosion, or wetlands of national or international importance. During the operational phase, traffic levels are likely to be high enough to give rise to problems of noise, air pollution or crossroad access for pedestrians.

3.2.3 The principal potential adverse impacts mostly relate to the land acquisition requirement. Although over much of the length of the road, the proposed road can be accommodated on the existing alignment, some houses will be affected. These will however be very few. Several other negative impacts have been identified but they can be mitigated satisfactorily and residual impacts reduced to acceptable levels through adoption of the specified mitigation measures. Construction phase impacts will also be mitigated by specific environmental protection clauses to be included in the contract documents, and enforcing compliance with them during construction. The costs of the works and environmental and social protection measures during project implementation will be part of the project cost. The detailed environmental and social assessment is presented in Annex A.7.

Climate Change

3.2.4 The United Nations Intergovernmental Panel on Climate Change (2001) has presented the following changes in climate in humid tropical areas which may likely have negative impacts on the proposed road.

Sea level rise which is up to 8.0 cm per decade; Annual temperatures will increase by 2 to 6 degrees Celsius by 2100 with more extreme

hot days. Forecast significant increases in rainfall over most of the tropics.

3.2.5 As respect to Climate Change, the project has taken due consideration of its impacts. It is noted that the project road is not a coastal road. The engineering design of the road has taken

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into account the adverse effects of climate change in relation to: i) type of pavement; ii) drainage facilities and level of road embankment; iii) geotechnical aspects. In addition, the road Right of Way will be planted with a minimum of 500 trees as a mean to contribute to the reduction in the Green House Gas emissions.

Social Impact 3.2.6 The socio-economic indices are reflective of the high poverty levels in the project area which represents 70% of the settlements. The population lives on subsistence agriculture, but cash crops sold outside the area augment income levels. Port Loko has a total area of 5,883 sq. km and comprises eleven chiefdoms. The main economic activities include small-scale fishing and the production of food crops such as rice, cassava, sweet potatoes and Palm oil. In regards to agriculture, Port Loko has an average agricultural vulnerability in comparison to the rest of the country and is the fifth highest rice-producing district in the country, with rice sufficiency of 41%.

3.2.7 The most significant beneficial impact of the project is expected to be a major improvement in social and socio-economic conditions for the population in the PA. Key potentially beneficial impacts associated with the project implementation are related to the post-construction phase. These include: (i) a significant reduction in transport costs, (ii) the availability of reliable vehicles services, (iii) reduced costs of production inputs such as fertilizers (iv) large scale production of crops (v) off-farm employment - especially along current stoppage points.

Impact on the local Economy 3.2.8 During the implementation phase there are a few beneficial impacts envisaged. As is common with other construction projects in rural areas in Sierra Leone, most, if not all, the skilled and semi-skilled workforce will probably be recruited from outside the immediate project area; due to the shortage of suitably qualified and experienced construction workers in what is primarily a subsistence farming area. Nonetheless, the creation of regular wage employment in the rural parts of project area is important, even though it will be on a relatively small scale, for a limited period, since there are currently few other opportunities available. The presence of the workforce, who is likely to be moderately cash-rich compared with the majority of the rural population, will undoubtedly encourage individuals to set up stalls to supply food and other consumables at worksites. Businesses in the local towns will also benefit financially through supplying goods and services to the workforce as well as through the contractors purchasing some of the food requirements of the base camps.

3.2.9 In relation to the post-construction phase, the provision of social infrastructure, such as Market stalls, grain drying floors, IMT and other road works will have a positive impact on accessibility and development factors in the ZOI. The provision of 60-intermediate technology carts, 14 grain drying floors and display stands constructed in 4 markets adjoining the main road will enhance the development of economic activity in the project zone and beyond. The selected social-infrastructure is an outcome of the consultations and discussions held with the community living in the ZOI. The community identified needs that would assist them in increasing their agricultural production and access to markets, in order to realize economic benefits from the road, which would reduce poverty in the ZOI. Market stalls are intended to provide the community with a place to sell their farm produce and Hand carts to transport their farm produce to the market. The 6.5 km Lungi township road is essential for social and health activities in the district because the main hospital and essential administrative services are

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situated on this road. Additional road works on 30 km of feeder roads adjacent to the Lungi – Port Loko road will improve accessibility especially to the farmers and traders who usually bring their produce to the market.

3.2.10 The Road project is also expected to generate negative impacts related, in particular, to an increased number of accidents owing to the rise in the speed and number of vehicles along the route; the increased risk of the spread of sexually-transmitted diseases (STDs) including HIV/AIDS and teenage pregnancies due to the increased number of construction workers in the PA. In order to mitigate the negative impacts of the road; appropriate road signs and markings will be installed. Sensitization campaigns are planned under the project to enhance knowledge of road safety as well as of the risks of endemic diseases such as malaria, water-borne diseases, STDs and HIV/AIDS and the negative effects of teenage pregnancies on the health of young girls and the productivity of the community. In 2007, the government of Sierra Leone enacted Prevention and Control of HIV/AIDS Act, which is an on-going programme in every district, conducted by the government in order to increase the level of sensitization, awareness raising and scaling up of services at Peripheral Health Units (PHU) related to HIV/AIDS. Port Loko District has an average level of service provisioning in terms of population per functioning primary health care facility, with a ratio of approximately 7,000 persons per PHU compared to the national average of approximately 8,000. The sensitization component within the project will increase the level of HIV/AIDS awareness and contribute to the reduction of mother to child transmission and the increase in the number of HIV affected persons receiving counseling. These activities will be focused on the community with a special focus on more vulnerable groups such as women, youth and children.

Gender 3.2.11 The government of Sierra Leone through its National Gender Strategic Plan (NGSP) 2009-2012 considers gender equity as a means of reducing poverty, and promoting development in the country. Women’s Empowerment is seen as a catalyst to development and one of the pillars within the NGSP, centers on Women’s empowerment, through a focus on education, agriculture and nutrition. In the Project Area, men account for 45.8% of the population while women account for 54.2% and provide over 65% of the work force in food and agricultural production. However, due to the poor condition of the road women are constrained in their access to markets, farm inputs and agricultural extension services, which adversely affects their farming activities. They are further constrained by their limited access to health care centres and schools due to the lack of appropriate and affordable transport.

3.2.12 Women are engaged in all aspects of agricultural activity while men are mostly engaged in jobs such as land clearing and digging. Since women engage in a range of activities using transportation; the implementation of the project will significantly improve the women’s social and economic conditions through, i) reduced costs of transportation, ii) easier access to markets for their goods, iii) reduced travel time to access farm inputs, iv) greater access to health services and schools with a reduced time in the distance covered by their children walking to school. As a resultant, the project will contribute to women’s empowerment in the PA as defined by the NGSP. In addition, the project will benefit the general population of Sierra Leone in the long term through the ease of access to the international airport in Lungi. This will improve the environment for private sector-led economic growth that benefits the whole population, but specifically the high percentage of female entrepreneurs both in the formal and informal sectors.

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Forced Relocation 3.2.13 Land acquisitions for the Lungi – Port Loko road project are likely to cause limited social disruption and some economic loss for communities along the road corridor. Therefore, a base line, socio economic survey, has been initiated to identify the Affected Persons due to the widening and overlaying of the road, the degree of impact of the project on the affected communities and explore the possibility of minimizing these adverse impacts. Based on this survey, a total of 275 houses will be compensated and 6 water wells will be replaced. A Resettlement Action Plan (RAP) validated by the Bank will be implemented in accordance with Bank procedures at a cost of US$ 950,000 as well as a condition to the grant.

IV IMPLEMENTATION

4.1 Implementation Arrangements Grant Recipient 4.1.1 The Ministry of Finance, on behalf of the Government of Sierra Leone will be the beneficiary of the Grant and the government will provide these financial resources to the Executing Agency who will implement the project.

Executing Agency 4.1.2 Sierra Leone Roads Authority (SLRA) will be the Executing Agency (EA) of the project. SLRA was established in 1992 by an Act of Parliament and is responsible for the design, development and maintenance of all the national roads including provincial and urban roads. In general SLRA has competent staff who have participated in the implementation of similar projects financed by the Bank and other multilateral financing institutions. However, over the last decade, the SLRA has lost some of its experienced engineers and needs technical support. The Lungi – Port Loko road project will receive institutional support from the Technical Assistance within the Matotoka – Sefadu road study/design project that the Bank is funding under a grant given to the Government. The support will include technical training to enhance skills and at the same time SLRA will receive technical assistance from Bank staff in the Sierra Leone field Office. In order to streamline the operations of this project right from the start, the Project’s Coordinator has already been appointed from among SLRA engineers to be directly responsible for the project implementation and the Bank has approved the same.

Institutional Arrangements 4.1.3 The Lungi - Port Loko road works will be undertaken by a civil engineering works contractor. The supervision of the works will be undertaken by an engineering consulting firm. In addition, the supervision consultant will undertake HIV/AIDS, malaria, teenage pregnancy and road safety sensitization. The combination of works supervision and sensitization will create synergies between the works and sensitization. Further more, in conjunction with the Sierra Leone Environmental Protection Agency; the supervision consultant will monitor the implementation of the environment and social mitigating measures. Project technical and financial audit will be executed by an independent firm of auditors. Another consultant will undertake monitoring and impact assessment of the project and will commence by taking base line studies and collect the initial project impact data on the first year upon project completion.

4.1.4 In conjunction with the Sierra Leone Environmental Protection Agency; the supervision consultant will monitor the implementation of the environment and social mitigating measures. Project technical and financial audit will be executed by an independent firm of auditors.

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Another consultant will undertake monitoring and impact assessment of the project and will commence by taking base line studies and then collect the initial project impact data on the first year upon project completion. An independent audit firm will undertake project audit of all aspects of project implementation. Concerning sensitization activities, there is existing capacity within the PA to carry them out as assessed by the Bank appraisal team. There are currently two well established NGO’s operating in the PA, a local NGO, CORD-SL and Student’s Partnership Worldwide (SPW) an international NGO sponsored by DFID. CORD – SL has an office in Port Loko District and won a contract with Port Loko District council in March 2009, to carry out sensitization of HIV/AIDS in the area for the next 5years. SPW carries out sensitization activities in the PA and Countrywide, it has a Youth Empowerment program whose goal is to address the issues of HIV/AIDS with young people through the implementation of sustained behavior change program.

4.1.5 SLRA acting in the capacity of the executing agency will supervise the contractor and all the consultants and monitor all the aspects of project implementation, and report the implementation progress to the Bank on a quarterly basis. Upon completion of the project, SLRA will continue to undertake the monitoring and evaluation of the project impact.

Procurement Arrangements 4.1.6 All procurement of works and acquisition of consulting services financed by the Bank will be in accordance with the Bank's Rules of Procedure for Procurement of Goods and Works or, as appropriate, Rules of Procedure for the Use of Consultants, using the relevant Bank Standard Bidding Documents. The services will include the works supervision consultancy, consultancy for monitoring and evaluation of project impact and the audit consultancy. The SLRA will be responsible for the procurement of works and consulting services as detailed in agreed Procurement Plan - Annex A.4. A procurement summary table is given below.

Table 4.1: Summary of Procurement Arrangements

Project Categories [ in millions UA]

ICB NCB Other* Short List Non-Bank-

Funded

Total

1. Civil Works 2. Consulting Services 2.1 Supervision 2.2 M&E 2.3 Audit

25.22 [25.22]

0.96[0.96 ] 0.04[0.04 ] 0.04[0.04 ]

25.22 [25.22]

0.96[0.96 ]0.04[0.04 ]0.04[0.04 ]

TOTAL 25.22 [25.22] 1.04[1.04] 26.26[26.26]

* Other may be LIC, International or National Shopping, Direct Purchase or Force Account. +Figures in brackets [ ] are amounts financed by the Bank Group.

4.1.7 The Government requested the Bank to use procurement procedures that would speed up the project implementation and the Bank has already approved advance contracting for both the supervision consultancy services and the civil works.

Disbursement Arrangements 4.1.8 The direct disbursement method using standard Bank procedures will be utilized for

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works and consultancy services financed through the ADF grant. All funds from the grant resources will be directly paid to the contractors and consultants. The invoices shall be approved by SLRA before preparation and authorization of the disbursement applications by the Ministry of Finance. The disbursement arrangements are presented in Annex A.3.

Financial Management 4.1.9 The project accounts shall be kept by the executing agency and shall be kept separately using a computerized accounting system. An assessment of SLRA’s financial management arrangement for the implementation of the project concluded that they satisfy the minimum requirements. SLRA has satisfactorily managed previous projects of similar nature and scale, funded by the Bank and other donor organizations. However, SLRA is currently experiencing staff constrains. In order to address this shortage of staff, an arrangement has been made to provide assistance from the Bank funded Technical Assistance provided under the Matotoka – Sefadu road study to the SLRA team managing the Lungi – Port Loko road project. The financial arrangements are presented in Annex A.3.

Auditing 4.1.10 An external audit of project accounts, physical progress, and quality of work and management processes shall be carried out each year by an independent auditing firm recruited in accordance with the procedures of the Bank. The auditor shall prepare and submit technical, managerial and financial statements to the Bank in accordance with the guidelines stated in Annex A.5.

Implementation and Supervision Schedules 4.1.11 Overall, the project will be implemented over a period of 36 months, including 24 months of construction and 12 months defects liability period. The project time frame is included and the implementation timelines are summarized in Annex A.4. The project supervision schedules and skill mix are also presented in Annex A.9. As soon as the grant is approved, the ADF will launch the project and then conduct supervision missions.

4.2 Monitoring and Evaluation 4.2.1 Lack of a functional monitoring-evaluation system at project activity start-up is often the cause of the problems subsequently encountered in assessing the level of achievement of the development goals in the results matrix. For the Lungi - Port Loko road project, therefore, it is planned to set up a monitoring-evaluation mechanism that should be functional right from project start-up, with a view to: (i) compiling and managing information on the level of implementation of the project based on the available database, (ii) defining a baseline situation for road impact monitoring requirements and (iii) carrying a post-project impact assessment using the same methodology as was used in establishing the baseline condition.

4.2.2 Coordination of monitoring procedures among sectors is done primarily by the Ministry of Finance and Economic Development (MOFED) which facilitates monitoring and evaluation operations of the current PRSP II. The Lungi - Port Loko Upgrading Project monitoring activities will be fully integrated in the PRSP II Working Group dedicated to road activities

4.3 Governance 4.3.1 Efforts to reform the public sector are slow and the lack of a comprehensive civil service reform programme continues to pose a serious challenge to government, as the required

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capacity to implement, monitor and evaluate programmes is still lacking in line ministries. Management and functional reviews were undertaken for several Ministries, Departments and Agencies, but the recommendations were not implemented. However, the SLRA as an agency under the Ministry of Works, Housing and Infrastructure has acquired a wealth of experience in implementing donor funded road projects. The project will provide financial and procurement safeguards by using the Bank’s instruments in project implementation. In addition, the establishment by Government of the National Public Procurement Agency (NPPA), created in 2004, and the strengthening of the Anti-Corruption Commission (ACC), both of which provide oversight in all Government related procurement issues participate in the monitoring of governance issues.

4.4 Sustainability 4.4.1 The sustainability of this project will depend on the ability of the Government of Sierra Leone to generate and allocate funds and the required skills for the maintenance of the completed Lungi - Port Loko road. As it is for now, the Road fund, generates income from the fuel levy, is collected and managed entirely by SLRA.

4.4.2 The routine maintenance financing mechanism set up by the Road Fund must contribute to ensuring project sustainability. The resources allocated to the roads from the Road Fund are 63% of its total while the remaining are devoted to administrative expenses. SLRA has identified a core primary network of 2,274km that will ensure basic access to the country’s regions, complemented by feeder and local road networks, which link communities to the primary network. The Lungi - Port Loko road and the 6.5km Lungi township road are part of this core primary road network on which US$ 9 million are spent annually on maintenance.

4.4.3 As far as feeder roads are concerned, the ZOI communities will be active participants in sustaining the road. The communities shall be involved in labour based activities which will contribute to the sustainability of the project. Mobilizing the residents and inhabitants to clear and maintain the feeder road system is viewed as a crucial activity which will give the inhabitants a sense of ownership. There will be a provision in the tender documents which will incorporate a training component for the community to maintain the feeder roads.

4.5 Risk Management 4.5.1 The principal risks related to the project concern: i) the provision of sufficient resources to undertake adequate Maintenance; ii) Price escalation as the one experienced between 2004 and 2008; iii) Inadequate institutional capacity of SLRA to manage the road projects; iv) delays in project implementation.

4.5.2 The following mitigation measures will be undertaken: i) Priority allocation of road maintenance funds from the fuel levy are made towards maintenance of the new paved roads in good and maintainable conditions and the project road is part of the core road network; ii) Project costs are based on a detailed design study and adjustments have been incorporated to take consideration of average similar works in the region; iii) Delays have been minimized by adopting Advance Contracting procedures in the procurement of civil works and consultancy services. Furthermore, the recent establishment of Banks field office in Sierra Leone (SLFO) will assist SLRA in all aspects of project management and help shorten GOSL’s response time.

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4.6 Knowledge Building 4.6.1 The emphasis placed on project impact assessment is mainly aimed at responding to the need for knowledge development. Indeed, the establishment of a baseline situation prior to project activity start-up will provide a basis for comparison with a view to realistically assessing the level of achievement of the project development objectives. The comparative data will be obtained from the outcomes of the project impact assessment to be carried throughout the implementation phase.

4.6.2 The principal knowledge base and lessons drawn will be managed on the basis of a database to be created within SLRA. The database which will be created within the Matotoka-Sefadu road study will effectively facilitate the management of all knowledge accumulated on the activities, the outputs and principal outcomes and lessons drawn from the project.

V LEGAL INSTRUMENT AND AUTHORITY

5.1 Legal Instrument To finance this project, the Bank will use the project grant from FSF resources allocated to fund priority infrastructure investments, committed up-front for three years, and in line with the country’s Debt Sustainability Framework.

5.2 Conditions of Grant Approval The grant shall be subject to the following specific and particular conditions:

A: Conditions Precedent to Entry into Force: The entry into force of the Agreement shall be subject to the fulfillment by the Grant Recipient of the condition set forth in Article 10.01 of the General Conditions Applicable to Protocols of Agreement for Grants of the African Development Fund (February 2009). This condition refers to signature of the Protocol of Agreement.

B: Conditions Precedent to First Disbursement of the Grant

The obligations of the Fund to make the first disbursement of the grant shall be conditional upon entry into force of the Protocol of Agreement as provided. Also the Recipient shall have provided evidence satisfactory to the Fund that: i) funds for the compensation of Project Affected People have been set aside and ; ii) evidence of the commencement of compensation of Project Affected People prior to commencement of civil works in accordance with the Resettlement Action Plan.

C: Undertaking

The Government of Sierra Leone (here referring to the Ministry of Finance) shall undertake to cause the Sierra Leone Roads Authority to implement the Resettlement Action Plan as approved.

D: Other Conditions The Government of Sierra Leone shall submit to the Bank quarterly progress reports on the implementation of the Resettlement Action Plan, detailing the persons who have been compensated and the amounts of compensation, until the Resettlement Action Plan is fully

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implemented.

5.3 Compliance with Bank policies This project complies with all applicable Bank policies, including the Integrated Environmental and Social Assessment guidelines, Bank’s policy on Resettlement and Involuntary Displacement, and Bank’s crosscutting themes of Gender and Poverty.

VI RECOMMENDATIONS

6.1 Conclusion and recommendation 6.1.1 The Lungi – Port Loko road, which is part of the core road network of Sierra Leone, links the capital, Freetown, to the Northern region. The specific project objective is to link Lungi with Port Loko and Freetown with a paved road and promote regional integration. The project will help to: (i) Improve economic growth and (ii) Reduce incidence of poverty. This project is in line with national priorities.

6.1.2 The negative impacts of the project on the environment have been identified, and mitigation measures incorporated into the project. The project is technically well designed. It is economically viable and generates an average economic rate of return of 16.0% which is higher than the opportunity cost of capital estimated at 12%. The sustainability of investments will be ensured by the Road Fund and the communities.

6.1.3 In light of the foregoing, it is recommended that an ADF grant not exceeding and up to UA 26.26 million should be awarded to the Republic of Sierra Leone. The grant will be used in implementing the project as designed and described in this report. The grant will be subject to the conditions specified in the Memorandum of Understanding.

ANNEX I SIERRA LEONE

COMPARATIVE SOCIOECONOMIC INDICATORS

Year SierraLeone Africa

Develo-ping

Countries

Develo-ped

CountriesBasic Indicators Area ( '000 Km²) 72 30 307 80 976 54 658Total Population (millions) 2007 5.9 963.7 5 448.2 1 223.0Urban Population (% of Total) 2007 37.2 39.8 43.5 74.2Population Density (per Km²) 2007 81.8 31.8 65.7 23.0GNI per Capita (US $) 2006 240 1 071 2 000 36 487Labor Force Participation - Total (%) 2005 36.1 42.3 45.6 54.6Labor Force Participation - Female (%) 2005 37.6 41.1 39.7 44.9Gender -Related Development Index Value 2005 0.320 0.486 0.694 0.911Human Develop. Index (Rank among 174 countries) 2005 177 n.a. n.a. n.a.Popul. Living Below $ 1 a Day (% of Population) 2003-05 70.0 34.3 … …

Demographic IndicatorsPopulation Growth Rate - Total (%) 2007 2.1 2.3 1.4 0.3Population Growth Rate - Urban (%) 2007 3.9 3.5 2.6 0.5Population < 15 years (%) 2007 42.9 41.0 30.2 16.7Population >= 65 years (%) 2007 3.3 3.5 5.6 16.4Dependency Ratio (%) 2007 85.9 80.1 56.0 47.7Sex Ratio (per 100 female) 2007 97.0 99.3 103.2 94.3Female Population 15-49 years (% of total population) 2007 23.2 24.2 24.5 31.4Life Expectancy at Birth - Total (years) 2007 42.6 54.2 65.4 76.5Life Expectancy at Birth - Female (years) 2007 44.2 55.3 67.2 80.2Crude Birth Rate (per 1,000) 2007 46.2 36.1 22.4 11.1Crude Death Rate (per 1,000) 2007 22.1 13.2 8.3 10.4Infant Mortality Rate (per 1,000) 2007 160.3 85.3 57.3 7.4Child Mortality Rate (per 1,000) 2007 278.1 130.2 80.8 8.9Total Fertility Rate (per woman) 2007 6.5 4.7 2.8 1.6Maternal Mortality Rate (per 100,000) 2005 2 100 723.6 450 8Women Using Contraception (%) 2000-06 4.3 29.9 61.0 75.0

Health & Nutrition IndicatorsPhysicians (per 100,000 people) 2004 3.1 39.6 78.0 287.0Nurses (per 100,000 people) 2004 34.2 120.4 98.0 782.0Births attended by Trained Health Personnel (%) 2005 43.0 50.4 59.0 99.0Access to Safe Water (% of Population) 2006 53.0 62.3 80.0 100.0Access to Health Services (% of Population)* 2004 38.0 61.7 80.0 100.0Access to Sanitation (% of Population) 2004 39.0 45.8 50.0 100.0Percent. of Adults (aged 15-49) Living with HIV/AIDS 2005 1.6 4.7 1.3 0.3Incidence of Tuberculosis (per 100,000) 2005 475.4 300.7 275.0 18.0Child Immunization Against Tuberculosis (%) 2006 82.0 83.7 85.0 93.0Child Immunization Against Measles (%) 2006 67.0 75.4 78.0 93.2Underweight Children (% of children under 5 years) 2005 30.0 28.6 27.0 0.1Daily Calorie Supply per Capita 2004 1 849 2 436 2 675 3 285Public Expenditure on Health (as % of GDP) 2004 1.9 2.4 1.8 6.3

Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2007 145.0 96.4 91.0 102.3 Primary School - Female 2004 122.0 92.1 105.0 102.0 Secondary School - Total 2007 32.0 44.5 88.0 99.5 Secondary School - Female 2004 14.0 41.8 45.8 100.8Primary School Female Teaching Staff (% of Total) 2001-04 38.4 47.5 51.0 82.0Adult Illiteracy Rate - Total (%) 2006 64.9 33.3 26.6 1.2Adult Illiteracy Rate - Male (%) 2006 53.1 25.6 19.0 0.8Adult Illiteracy Rate - Female (%) 2006 75.6 40.8 34.2 1.6Percentage of GDP Spent on Education 2006 3.8 4.5 3.9 5.9

Environmental IndicatorsLand Use (Arable Land as % of Total Land Area) 2005-07 6.8 6.0 9.9 11.6Annual Rate of Deforestation (%) 2000-07 2.9 0.7 0.4 -0.2Annual Rate of Reforestation (%) 2000-07 3.0 10.9 … …Per Capita CO2 Emissions (metric tons) 2005-07 0.1 1.0 1.9 12.3

Sources : ADB Statistics Department Databases; World Bank: World Development Indicators; last update :UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports

Note : n.a. : Not Applicable ; … : Data Not Available;

July 2008

Infant Mortality Rate ( Per 1000 )

020406080

100120140160180

2002

2003

2004

2005

2006

2007

Sierra Leone Africa

GNI per capita US $

0200400600800

10001200

2001

2002

2003

2004

2005

2006

Sierra Leone Africa

Population Growth Rate (%)

0.0

1.0

2.0

3.0

4.0

5.0

2002

2003

2004

2005

2006

2007

Sierra Leone Africa

Life Expectancy at Birth (years)

111213141516171

2002

2003

2004

2005

2006

2007

Sierra Leone Africa

ANNEX II SIERRA LEONE: PORT LOKO – LUNGI ROAD REHABILITATION PROJECT (62 km)

Summary of Ongoing Bank Operations in Sierra Leone (as at 30 November 2008) In UA Million

N° Sector Project Title Approved Loan (UA)

Approval

Date Entry into Force Disb. Deadline Disbursed

Disbursement ratio

(%) Date Last

supervision

Implementing Progress

rating (IP)

Likelihood of achieving Development Objective

(DO)

1 AGRI Agriculture Sector Rehabilitation Project 12,000,000.00

02.02.2005 02.08.2005 31.12.2011 1,476,682.06 12.3 10.06.2008 Satisfactory Highly Satisfactory

2 AGRI Artisanal Fisheries Development 10,000,000.00

25.10.2001 07.01.2003 31.12.2009 2,799,861.39

28.0 22.10.2007 Satisfactory Satisfactory

3 AGRI Rehabilitation & Community Reduction Project 5,862,702.69

20.02.2004 02.03.2006 30.09.2011 0.0

0.0 16.06.2008 Satisfactory Highly Satisfactory

4 AGRI Rural Finance and Community Improvement 5,950,000

25.06.07 31.12.2014 0.0

0.0 n/a n/a n/a

5 AGRI (MULTI.)

NERICA Disseminatio Project/ S Leone 2,850,000.00

26.09.2003 05.02.2005 31.12.2010 419,237.65

14.7 22.02.2007 Unsatisfactory Unsatisfactory

6 TRANSP Freetown-Lungi Road Study 1,256,000.00

16.07.2003 26.09.2003 30.06.2008 1,221,949.44

97.3 11.06.2005 Highly Satisfactory Highly Satisfactory

7 TRANSP Mototoka to Sefadu Road Studies and Inst 1,990,000.00

09.03.2006 19.05.2006 30.06.2009 191,053.48

9.6 11.06.2005 Highly Satisfactory Highly Satisfactory

8 WATSAN Water Supply & Sanitation Study 850,000.00

30.06.2004 03.09.2004 31.12.2008 176,749.26

20.8 12.05.2008 Highly Satisfactory Satisfactory

9 POWER Bumbuna Hydro-Electric Project – Add. Financing 10,300,000.00

22.03.1991 31.12.2006 0.0

0.0 Not yet

supervised n/a n/a

10 SOCIAL Support to Basic & non-formal education (Educ III) 16,000,000.00

16.10.2002 25.08.2003 30.06.2009 7,150,572.08

44.7 20.10.2008 Satisfactory Satisfactory

11 SOCIAL Strengthening of District Health Services 17,000,000.00

07.09.2005 17.10.2005 31.12.2011 4,672,870.82

27.5

Not yet supervised n/a n/a

12 SOCIAL (MULTI.)

Support to Mano River HIV?AIDS Project 5,000,000.00

07.09.2005 17.10.2005 31.12.2009 4,991,964.19

99.8 01.05.2007 n/a n/a

13 SOCIAL Social Action Support Project (SASP) 12,000,000.00

11.06.2003 08.03.2004 31.12.2009 6,444,224.00

53.7 14.10.2008 Unsatisfactory Satisfactory

14 MULTI-SECT

Inst. Support Public Financial Management & Energy Sector Pro.

2,790,000.00

20.10.2004 19.07.2006 31.12.2011 1,456,829.36

52.2 03.09.2008 Unsatisfactory Satisfactory

TOTAL: 14 ON-GOING PROJECTS

103,848,702.69

31,001,993.73

29.9

ANNEX III

SIERRA LEONE PORT LOKO – LUNGI ROAD UPGRADING PROJECT

DETAILED MAP

Project

Freetown city

Port Loko

Lungi

Existing paved road Freetown – Port Loko

The staff of the ADB Group have provided this map for the exclusive use of this report to which it is appended. The appellations and the demarcations on this map do not imply any judgment on the part of the ADB Group and its members concerning either the legal status of a territory or the approval or acceptance of its boundaries