Language: English
Original: English
PROJECT: ROAD SECTOR SUPPORT PROJECT II
COUNTRY: TANZANIA
PROJECT APPRAISAL REPORT
Date: September 2011
Appraisal Team
Team Leader: L. Kiggundu, Infrastructure Specialist, TZFO
Team Members: G. Bezabeh, Transport Engineer, OITC.2
N. Kulemeka, Socio-Economist, ONEC.3
D. Gebremedhin, Transport Economist, OITC.2
T. Harada, Transport Engineer, OITC.2
U. Duru, Environmentalist, ONEC.3
B. Y. Hija, Procurement Specialist, TZFO
G. Kaijage, Financial Management Specialist, TZFO
Country Manager: T. Kandiero
Sector Manager: A. Oumarou
Sector Director: G. Mbesherubusa
Regional Director: G. Negatu
Peer Reviewers
J M Chirwa, Infrastructure Specialist, ONRI.1; D M Isooba, Infrastructure Specialist,
UGFO; E Ntagwabira, Infrastructure Engineer, OSAN.2; A Hamza, Gender Specialist,
OWAS.2
TABLE OF CONTENTS
Currency Equivalents i
Fiscal Year i
Weights & Measurements i
Acronyms & Abbreviations i
Loan Information ii
Project Summary iii
Result-Based Logical Framework v
Project Timeframe vii
I. STRATEGIC THRUST AND RATIONALE 1
1.1 Project Background 1
1.2 Project Linkages with Country Strategy and Objectives 2
1.3 Rationale for Bank’s Involvement 2
1.4 Development Partners’ Co-ordination 3
II. PROJECT DESRIPTION 4
2.1 Project Objectives 4
2.2 Project Components 4
2.3 Technical Solutions Retained and Other Alternatives Explored 5
2.4 Project Type 5
2.5 Project Cost and Financing Arrangements 5
2.6 Project Target Area and Population 6
2.7 Participatory Processes of Design and Implementation 6
2.8 Bank Group Experience and Lessons Reflected in Project Design 7
2.9 Key Performance Indicators 7
III. PROJECT FEASIBILITY 7
3.1 Economic and Financial Performance 7
3.2 Environmental and Social Impacts 9
IV. IMPLEMENTATION 11
4.1 Implementation Arrangements 11
4.2 Monitoring 13
4.3 Governance 13
4.4 Sustainability 13
4.5 Risk Management 14
4.6 Knowledge Building 15
V. LEGAL INSTRUMENTS AND AUTHORITY 15
5.1 Legal Instrument 15
5.2 Conditions Associated with Bank’s Intervention 15
5.3 Compliance with Bank Policies 16
VI. RECOMMENDATION 16
Appendices
I. Country’s Comparative Socio-Economic Indicators
II. Table of ADB’s Portfolio in Tanzania
III. Similar Projects Financed by the Bank and Other Development Partners
IV. Project Map
Annexes
Annex A
Currency Equivalents September 2011
1UA = TZS2,532.55
1USD = TZS1,573.64
1UA = USD1.60936
Fiscal Year
Tanzania: 01 July-30 June
Weights and Measures 1 metric tonne (t) = 2,205 lbs.
1 kilogram (kg) = 2.205 lbs.
1 meter (m) = 3.281 ft
1 foot (ft) = 0.305 m
1 hectare (ha) = 0.01 km2 = 2.471 acres
Acronyms and Abbreviations
AADT Annual Average Daily Traffic MKUZA Mkakati wa Kukuza Uchumi na Kupunguza
Umasikini Zanzibar
ADB African Development Bank MOIC Ministry of Infrastructure and
Communications
ADF African Development Fund MTEF Medium Term Expenditure Framework
AIDS Acquired Immune Deficiency Syndrome NEMC National Environmental Management
Council
CBO Community Based Organization NEPAD New Partnership for Africa’s Development
COMESA Common Market for Eastern & Southern
Africa NGO Non-governmental Organization
CSP Country Strategy Paper NPV Net Present Value
CRR Crushed Fresh Rock NSGRP National Strategy for Growth and
Reduction of Poverty
DANIDA Danish International Development Agency PAP Project Affected Persons
DFID Department for International Development PCR Project Completion Report
DP Development Partners RAP Resettlement Action Plan
DPG-T Development partners Group-Transport RFB Roads Fund Board
EAC East African Community RFP Request for Proposals
EIRR Economic Internal Rate of Return RTRN Regional Trunk Road Network
ESIA Environmental and Social Impact Assessment SADC Southern Africa Development Community
ESMP Environmental and Social Management Plan SPN Specific Procurement Notice
EU European Union STI Sexually Transmitted Infection
FE Foreign Exchange TANROADS Tanzania National Roads Agency
GOT Government of the United Republic of
Tanzania TB Tuberculosis
GOZ Revolutionary Government of Zanzibar TSIP Transport Sector Investment Program
IPCC Intergovernmental Panel on Climate Change TZS Tanzania Shilling
JAST Joint Assistance Strategy for Tanzania TZFO Tanzania Field Office
JICA Japanese International Cooperation Agency UA Unit of Account
MCC Millennium Challenge Corporation
VOC Vehicle Operating Costs
MKUKUTA Mkakati wa Kukuza Uchumi na Kupunguza
Umasikini Tanzania WB World Bank
ii
Loan Information
Client’s information
BORROWER: UNITED REPUBLIC OF TANZANIA
EXECUTING AGENCIES: TANZANIA NATIONAL ROADS AGENCY, MINISTRY OF
INFRASTRUCTURE AND COMMUNICATIONS
(ZANZIBAR), ROADS FUND BOARD
Financing plan
Source Amount (UA) Instrument
ADF
140.00 million
Loan
JICA 62.14 million Loan
GOT 10.64 million counterpart funds
TOTAL COST 212.78 million
ADB’s key financing information
ADF loan Currency
UA
Interest type Not Applicable
Interest rate spread Not Applicable
Service Charge 0.75%/annum on amount
Disbursed and outstanding
Commitment fee 0.50%/annum on un-
disbursed amount
Duration 50 years
Grace Period 10 years
Dodoma-Babati Road EIRR (Base case) 16.2%
NPV (Base case) USD45.07 million
Tunduru-Mangaka Road EIRR (Base case) 15.8%
NPV (Base case) USD19.92 million
Mangaka-Mtambaswala Road EIRR (Base case) 14.6%
NPV (Base case) USD6.01 million
Timeframe - Main Milestones (expected)
Concept Note approval
September, 2011
Project approval April 2012
Effectiveness December 2012
Launching January 2013
Project Completion Report December 2016
Works Completion March 2017
Last Disbursement September 2017
iii
PROJECT SUMMARY
Project Overview: Road Sector Support Project II comprises: (a) civil works for upgrading
from gravel to bitumen standards: (i) the Dodoma (Mayamaya)-Babati (Bonga) (188.1km);
and (ii) the Tunduru-Mangaka-Mtambaswala (202.5km); (b) consulting services for: (i)
design review and supervision of the civil works; (ii) road safety; (iii) sensitization of
HIV/AIDS, STI, TB and gender; (iv) baseline data collection and monitoring of ESMP
implementation; (v) road sub-sector studies; and (vi) audit; (c) capacity building; and (d)
compensation and resettlement. The total cost of the project amounts to UA212.78 million
comprising UA163.63 million in foreign exchange and UA49.15 million in local costs. The
project components are to be financed through an ADF loan of UA140.00 million or 65.8% of
the total cost and UA62.14 million or 29.2% from JICA as joint financing. Government will
finance UA10.64 million or 5.0% of the total cost to entirely cover compensation and
resettlement and 2.4% of the civil works. The project will be implemented over a five year
period.
Project Beneficiaries and Participation: The main beneficiaries of the project include
export/import operators, freight operators, the business community in the region and
communities in the zones of influence of the two roads. The communities in the project zones
of influence will benefit from improved road safety, HIV/AIDS, STI, TB and gender
awareness. The project will create job opportunities during the construction phase which will
benefit the communities through direct employment and supply of goods and services to the
two roads and related works.
Project Rationale and Need: The project will support economic and social development
programs of the country through efficient and cost-effective movement of passengers and
freight transport, in line with the objectives of the Ten Year Transport Sector Investment
Program (TSIP 2002/03-2012/13), the White Paper on Transport Policy, the Tanzania
Development Vision 2025, the Second National Strategy for Growth and Reduction of
Poverty (NSGRP 2010/11-2014/15) or MKUKUTA II/MKUZA II, the Country Strategy
Paper (CSP 2011-2015) and the Medium-Term Strategy of the Bank (2008-2012). The roads
proposed for upgrading will provide access to the communities in the zones of influence, to
better markets and social services, contribute to reduction of poverty and improve cross-
border trade with neighbouring countries at the same time enhance tourism and regional
integration.
Bank’s Value Added: The Bank under Phase I of Road Sector Support Project is already
financing roads linking to the ones referred to herein namely the Dodoma-Iringa and
Tunduru-Namtumbo roads. The project will address the development challenges resulting
from poor transport infrastructure and connectivity in line with the Bank Medium Term
Strategy (2008-2012) that promotes support to infrastructure with high development impact.
The Dodoma-Babati and Tunduru-Mangaka-Mtambaswala roads are missing links on the
Trans-Africa Highway and the Mtwara Corridor respectively and their upgrading will
promote cross-border trade, enhance tourism and contribute to the achievement of the
development objectives of the country and the EAC and SADC regions at large. The capacity
building component for TANROADS and MOIC will strengthen their project management
capacities.
iv
Knowledge Management: The capacity building component has incorporated a road safety
pilot project that will generate and transfer knowledge on effective measures of reducing
accident rates on the Tanzanian road network. Baseline data collection by an independent
consulting firm will provide knowledge on the impact of the project on the prevalence of
HIV/AIDS, STI, and TB prior to project commencement, during execution and completion.
v
RESULTS-BASED LOGICAL FRAMEWORK Country and project name: Tanzania: Road Sector Support Project II Purpose of the project: To improve services between Dodoma and Babati, Tunduru and Mangaka and Mangaka and Mtambaswala
RESULTS CHAIN
PERFORMANCE INDICATORS
MEANS OF VERIFICATION ASSUMPTIONS/RISKS/MITIGATION MEASURES Indicator
(including CSI) Baseline 2011 Target 2016/17
IMP
AC
T
Impact
Improved access
Improved living standards
% of paved trunk roads on
the network
Economic growth
Currently at 42.9%
GDP Growth at 6.8%
To grow to 62%
GDP growth projected to 12%
TANROADS and National
Statistics and project baseline
data
National, Regional (RECs), and
International Statistics.
Risk: Failure by GOT to implement the
recommendations of the Transport Investment program
(TSIP).
Mitigation: Progress of the implementation of the projects within the TSIP is monitored by the
Development Group-Transport (DPG-T) and regular
dialogue meetings held with GOT.
OU
TC
OM
ES
Outcome 1 Increased paved network
Paved road density
6.86km/1000 km2
8.91km/1000 km2
TANROADS Directorate of
Planning, Monitoring &
Evaluation
Outcome 2
Reduced transport costs
Annual average composite VOC
per vehicle km.
Dodoma – Babati USD 0.824;
Mangaka - Tunduru USD 0.877; and
Mangaka – Mtambaswala
USD 0.949
Reduced by 33% to
USD0.555. Reduced by 41% to
USD0.516 and Reduced by
43% to USD0.54.
Outcome 3
Reduction in travel times
Average Vehicle travel time 5 hrs for Dodoma-Babati;
3.5 hrs for Mangaka-Tunduru; 1.5 hrs for Mangaka –
Mtambaswala
Reduced by 40% to 3hrs.
Reduced by 30% to 2.5 hrs and
Reduced by 33% to 1 hr.
OU
TP
UT
S
Component 1: Upgrade to
Bituminous Standards
1.1: Upgrade Dodoma-Babati
(Mayamaya-Bonga) and Mangaka-
Tunduru-Mtambaswala roads
Condition of the Dodoma-
Babati- and Mangaka-Tunduru-Mtambaswala roads
390.6 km of road in poor
condition
390.6km of road in good
condition
Monthly and Quarterly Progress
reports; Project Completion Report
Risk: Escalation of costs due to late start-up in project
implementation resulting from delayed effectiveness of the loans from ADF and JICA.
Mitigation: The loan conditions are to be minimized and
aligned to the implementation schedule. Advance Contracting procedures are to be utilized. Project costing
has allowed physical and price contingencies to cover
possible price increases.
Risk: Failure by GOT to finance to completion of 59km
of the Dodoma-Babati Road.
Mitigation: GOT counterpart financing is limited to 5.8% to reduce pressure on the budget.
Risk: Premature failure of pavement due to overloading.
Mitigation: The project has incorporated weighbridges for overload control.
Component 2: Cross-Cutting Issues
2.1: Sensitization (HIV, Safety,
Gender);
2.2 ESMP and Forestation;
2.3 Local job Opportunities 2.4: PAP compensated /resettled
Number sensitized
Execution of the ESMP
Number of local jobs
Implementation of RAP
No sensitization
No ESMP to implement
No construction jobs
No RAP to implement
Full compliance with
ESMP
Complete RAP implementation
At least 30 communities
sensitized (10/road section)
At least 1,500 of local jobs created (30% are women)
at construction; 300 routine
maintenance (50% women);
vi
Component 3: Sub-sector Support
3.1 Staff trained
3.2 Bidding documents for pipeline
projects finalized 3.3 Experts procured
3.4 Road safety knowledge
Number of staff trained;
Availability of study reports
Experts’ commencement of
services
Personnel trained in road safety.
No staff trained;
No reports;
No experts recruited.
30 staff members trained
(With gender equity)
2 sets of feasibility, detail
design and bidding
documents produced
4 experts completing
contracts
At least 20 road safety
personnel trained with gender equity
KE
Y A
CT
IVIT
IES
COMPONENTS INPUTS
Component 1: Upgrade to Bituminous Standards
1.1: Civil works
1.2: Supervision services
1.3 Road Safety 1.5: Audit services
Component 2: Cross-Cutting
2.1 Sensitization, HIV/AIDS, Gender 2.2 Monitoring of ESMP and Baseline Data Collection
2.3: Compensation of PAP
Component 3: Sub-sector Support
3.1 Capacity Building
3.2 Road Sub-sector Studies 3.3 Road safety pilot Project
Costs - millions UA:
Civil works 162.18
Supervision 8.01
Road safety 0.56 ESMP and Baseline 0.41
Sensitization, HIV/AIDS, Gender 0.45
Capacity Building 2.35 Studies 2.53
Audit 0.24 Compensation/Resettlement 5.24
Base Cost 179.98
Physical Contingencies 18.00 Price escalation 14.80
Project cost 212.78
Sources of financing (million UA) ADF Loan 140.00
JICA Loan 62.14
GOT 10.64
Total 212.78
vii
Project Timeframe: Road Sector Support Project II (RSSP II)
Activity 2012 2013 2014 2015 2016 2017
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
I. Civil Works 1. Compensation, Resettlement 2. Bidding/Contract Award 3. Works Execution a) Dodoma-Babati Road
b) Tunduru-Mangaka-Mtambaswala Road
II. Contract Supervision; 1. Short-list/RFP 2. Contract Award 3. Mobilization 4. Works Supervision Services a) Dodoma-Babati Road
b) Tunduru-Mangaka-Mtambaswala Road
TO : E. Ntiruka
Driver, TZFO
FROM : Tonia Kandiero
Resident Representative, TZFO
SUBJECT: Terms of Reference (TOR) for Kampala, Uganda Drivers Training level 2:
1. You are hereby requested to attend the driving course in Kampala, Uganda from 28,November to 7, December 2011organized by SECU
2. The purpose of the Training is to improve (build) the skill in driving and precision space management, developing accuracy and consistency, looking
though and planning within a fluid driving environment, and to manage vulnerable driving situations.
3. At the conclusion of the mission, you will prepare and submit a Back-to-Office Report within five working days.
III Sensitization of HIV/AIDS, STI, TB and Gender; Baseline data Collection and ESMP Monitoring; Road Safety; Audit Services and Capacity Building 1. Short-list/RFP 2. Contract Award 3. Mobilization 4. Services IV Road Sub-sector Studies 1. Short-list/RFP 2. Contract Award 3. Mobilization 4. Services
Defects Liability Period
ROAD SECTOR SUPPORT PROJECT II
REPORT AND RECOMMENDATION OF THE MANAGEMENT OF THE ADB GROUP
TO THE BOARD OF DIRECTORS ON THE PROPOSED LOAN TO TANZANIA
Management submits the following report and recommendation on a proposed loan of UA140.00
million to the United Republic of Tanzania to jointly finance with JICA Road Sector Support
Project II.
I. STRATEGIC THRUST AND RATIONALE
1.1 Project Background
1.1.1 Road transport accounts for over 90% of transportation of freight and passengers and therefore
plays a pivotal role in supporting economic and social development programs. The Dodoma-Babati
road is an important link (T05) on the national road network meant to link the central and northern
regions of Tanzania. It is also part of the EAC Trunk Road Network (Route 5), the SADC Regional
Trunk Road Network (RTRN-Route 25) and the Trans-Africa Highway from Cape Town to Cairo
(Highway No 4), meant to link Tanzania to firstly the neighbouring countries and secondly to the
southern and northern African countries. The Tunduru-Mangaka-Mtambaswala road is T06/T42 on
the Tanzania network and a link on the Mtwara Corridor designated as Route 35/122 on the RTRN
linking Mozambique to the Mtwara port over the Unity Bridge and westwards to northern Malawi
and eastern Zambia. The Mtwara Corridor commencing from the Mtwara port is part of the SADC
Regional Spatial Development Initiative (SDI) which is meant to attract private sector investment
through adequate, reliable, cost-effective, efficient and seamless transport systems to reduce the
cost of doing business. The handling capacity of the Mtwara port currently stands at 0.4 million
tonnes per annum which is far below the projected requirement to serve southern Tanzania, northern
Mozambique, northern Malawi and eastern Zambia across Lake Nyasa/Malawi when the Corridor is
completed. The Tanzania Ports Authority (TPA) has commissioned the preparation of a Master
Plan to determine short, medium to long-term improvements required to handle future traffic which
at completion will be followed by detailed design studies required for implementation of the
recommendations of the master plan.
1.1.2 The road safety situation in Tanzania is among the worst in Sub-Saharan Africa with the trend
of reported accidents worsening at an annual rate of 10%. Reported road crash fatalities in 2010,
were over 9 per 100,000 inhabitants. The rate compares with the one in Kenya at 9, Nigeria at 5;
Ghana at 9; Uganda at 9 and Ethiopia at 3. Recently Parliament approved the National Road
Safety Policy which provides direction for addressing multi-sector road safety issues
comprehensively including the establishment of a National Road Safety Agency (NRSA) and
Driver and Vehicle Examination and Licensing Agency (DVELA) under MOW. In order to
support the efforts of Government, a pilot road safety project has been incorporated in this project
to build capacity of the major road safety stakeholders through learning by doing. The component
involves the engagement of a road safety expert for the implementation of the pilot project and
preparation of a nationwide road safety strategy and programme and will complement the World
Bank funding for the establishment and capacity building of NRSA and DVELA.
1.1.3 The ADF transport portfolio at approval of this intervention will comprise a total of 39
contracts, 15 for civil works and 24 for consulting services amounting to UA352 million or 44% of
the overall ADF country portfolio. To ensure effective management of the portfolio, capacity
2
enhancement of the roads sub-sector entities is essential to consolidate the gains achieved from
similar support under Phase I. Provision has therefore been made for four experts, namely, one
procurement expert and one contract management expert, for TANROADS; one institutional reform
expert for the Ministry of Infrastructure and Communications (MOIC) to alleviate the capacity
constraints that have negatively affected the restructuring component financed under Phase I; and
one road safety expert for the road safety pilot project. Provision has also been made for short-term
training including the training of women contractors, procurement of support equipment and three
road sub-sector studies, one for mainland (Ifakara-Songea road-512km), one for Zanzibar (48km of
road on Unguja Island) as pipeline projects and a study for the widening of the road user charging
system for the Road Fund (RF) to ensure sustainability of the road network.
1.2 Project Linkages with Country Strategy and Objectives
1.2.1 The Second National Strategy for Growth and Reduction of Poverty (NSGRP II 2010/11-
2014/15) or MKUKUTA II/MKUZA II recognizes that infrastructure development is at the
centre stage of the economic development process and reduces the cost of doing business,
attracts private sector investment, enables production and social service delivery, links market
centres and contributes to sustaining of the quality of life through re-distribution of wealth. The
strategy under Cluster I: Growth for Reduction of Income Poverty identifies road infrastructure
as one of the cross-sector drivers of broad-based growth. The White Paper on National Transport
Policy (NTP) also mirrors the NSGRP objective of supporting socio-economic development
through the development of an efficient and cost-effective transportation system that integrates
regional and domestic economic centres and contribute to the reduction of poverty through
access to services and markets for agricultural produce. As such, Phase I of the Transport Sector
Investment Program (TSIP 2007/08-2011/12), has been developed with wide stakeholder
consultation including development partners which will be followed by Phase II currently under
preparation. The TSIP reflects the objectives of the Tanzania Development Vision 2025, the
NSGRP I and NSGRP II and the Country Strategy Paper (CSP 2011-2015).
1.2.2 The CSP has identified the two roads for Bank intervention in the ADF XII Cycle under
Pillar I: Infrastructure Development. The CSP responds to the objectives of the NSGRP II or
MKUKUTA II/MKUZA II that targets improvement of the quality of life and social well-being.
MKUKUTA II/MKUZA II is consistent with the Bank’s Medium Term Strategy (2008-2012)
that has identified infrastructure as one of the major focus areas for new commitments especially
projects that have high development and regional integration impact. The two roads therefore,
have been identified as priority for intervention to facilitate economic development and poverty
reduction and contribute to the attainment of the objectives of MKUKUTA II/MKUZA II
through easy movement of goods and people that will enhance intra-regional trade and tourism,
improve competitiveness in international trade and promote regional integration.
1.3 Rationale for Bank Involvement
1.3.1 Phase I of the TSIP is under implementation with support from development partners
including the Bank. The projects in the TSIP financed by other development partners are
presented in Appendix III. On-going interventions that link to the proposed road sections include
the Dodoma-Iringa road (260 km) and the Arusha-Namanga-Athi River Road Project (244km)
3
both jointly financed by the Bank and JICA and the Babati-Minjingu road (60km) financed by
the Bank and GOT. Further the Bank and JICA under the on-going Phase I are jointly financing
the Tunduru-Namtumbo (193km) a section on the Mtwara Corridor which links with the
Tunduru-Mangaka-Mtambaswala road and the Namtumbo-Songea road currently under
construction. The civil works contracts for Phase I were awarded in December 2010, one year
after Board approval and work has commenced on the ground an indication of good
implementation performance. Due to the importance attached to the project, Government is
through the budget; (i) financing the upgrading 59 km of the Dodoma-Babati road; (ii) financed
together with the Mozambique Government the construction of the Unity Bridge over the
Ruvuma River. The Mozambique Government has already approached the Bank for financing of
the studies for upgrading the Mueda-Negomane road leading to the Unity Bridge as a pipeline
project. This reinforces the two Governments’ commitment to development efforts that enhance
regional cooperation and integration. Bank financing for the upgrading of the road sections
herein is therefore justified firstly, as continuation to Phase I under implementation from the
Bank and JICA resources and secondly, as support to TSIP implementation in line with the other
DPs’ financing of the sub-sector to achieve the development objectives of the Government.
1.4 Development Partners’ Coordination
1.4.1 At national level a Development Partner Group (DPG) is the coordinating body for bilateral
and multilateral development partners in the country and the Bank is the Chair of Cluster I:
Growth for Reduction of Income Poverty. At sector level a Development Partner Group for
Transport (DPG-T) in which the EU is Lead and the ADF and JICA are Deputy Leads, is a sub-
group of the DPG that provides a platform on which financing and implementation issues
regarding the TSIP are discussed. Issues discussed inter alia include financing of; the trunk and
regional road networks; feeder roads; the rail network; and governance issues in the sector. There
is continuous dialogue between Government and Development Partners (DPs) to ensure that
results and outcomes are achieved in line with the targets agreed to. The Bank is one of the
leading active DP in the transport sector. Other major players include the WB, JICA, DANIDA,
EU, NORAD, MCC, OPEC and the Kuwait Fund. For the 2010/11 financial year the DPs
financed 35.5% of the roads sub-sector expenditure. The Bank’s intervention is in line with the
other DPs involved in the sector and is mostly through direct project financing for most DPs. The
EU is the only DP channelling its intervention through non targeted sector budget support. JICA
and MCC have on-going interventions in feeder roads through direct financing. An assessment
carried out on sector budget support identified challenges in financial management, contract
management and delays in disbursement. A full fiduciary risk assessment is necessary prior to
ADF’s participation in sector budget support.
1.4.2 During preparation and appraisal extensive consultations with the major DPs active in the
transport sector, were conducted to share experience, harmonize procedures and co-ordinate
interventions. As a result of effective donor coordination, JICA participated in the preparation
and appraisal missions and is considering joint financing for the project.
4
Players - Public Annual Expenditure 2010/11**
Total Government Donors
302.1 m UA194.9 m UA107.2m
[64.5%] [35.5%]
Level of Donor Coordination
Existence of Thematic Working Groups [Yes]
Existence of SWAPs or Integrated Sector Approaches [Yes]
ADB's Involvement in donors coordination** [Cluster Chair]
ADB’s Involvement in Transport Sector donor group [Deputy Lead]
II. PROJECT DESCRIPTION
2.1 Project Objectives
2.1.1 The sector goal is to contribute to socio-economic development, poverty reduction and
integration of the regions of the country through an improved transport system that links centres
of economic activity. The project objective is to improve road transport infrastructure to reduce
road maintenance costs, vehicle operating costs and travel time between Dodoma and Babati and
between Tunduru, Mangaka and Mtambaswala and provide the communities in the zones of
influence access to bigger markets and social services and contribute to reduction of poverty.
2.2 Project Components
2.2.1 The project comprises the following components:
I. Civil Works: UA189.27 million: Dodoma (Mayamaya)-Babati (Bonga) Road (188.1km), and
Tunduru-Mangaka-Mtambaswala Road (202.5km): The component involves upgrading the
existing gravel roads to bitumen standards of 6.5m carriageways and 1.5m sealed shoulders on
either side. The civil works are to be implemented in five contracts; Lot A: Mayamaya-Mela
(99.3km); and Lot B: Mela-Bonga (88.8km) for the Dodoma-Iringa road and Lot 1: Mangaka-
Nakapanya (70.5km); Lot 2: Nakapanya-Tunduru (66.5km); and Lot 3: Mangaka-Mtambaswala
(65.5km) for the Tunduru-Mangaka-Mtambaswala road.
II. Consulting Services: UA14.56 million: Consulting firms will provide services for: (i) design
review and supervision of the civil works; (ii) road safety; (iii) sensitization of HIV/AIDS, STI
and gender; (iv) baseline data collection and monitoring of ESMP implementation; (v) Studies;
widening of the road user charging system and two road sub-sector studies, one each for the
mainland and Zanzibar; and (vi) audit;
III. Capacity Building: UA2.81 million: The component consists of technical assistance to
TANROADS and the MOIC in Zanzibar, road safety pilot project; training for female
contractors, short-term training of staff and procurement of support equipment;
IV. Compensation and Resettlement: UA6.14 million: The component provides for
compensation and resettlement of the project affected people (PAP) in accordance with the
Resettlement Action Plans (RAPs).
ADF 16.2%
WB 14.7%
JICA 13.4%
DANIDA 5.7%
EU 3.9%
NORAD 1.1%
5
2.3 Technical Solutions Retained and Other Alternatives Explored
2.3.1 Project design considered three pavement alternatives, namely (i) Double Bitumen Surface
Treatment (DBST); (ii) Asphalt Concrete (AC); and (iii) gravel rehabilitation with a 150mm
gravel wearing course on compacted sub-grade. The pavement structures retained comprise a
50mm AC surfacing with sealed shoulders on 150mm cement stabilized granular base (C2) on
200mm natural granular sub-base (G45) for the Dodoma-Babati road and a DBST with sealed
shoulders on 150mm crushed stone base (CRR) on 200mm cement stabilized granular sub-base
(C1) for the Tunduru-Mangaka-Mtambaswala road. The AC surfacing was retained for the
Dodoma-Babati road because of; its high NPV; its suitability for the projected high heavy
vehicle traffic on the road; the mountainous terrain; and, continuity of surfacing with adjacent
road sections under construction. For the Tunduru-Mangaka-Mtambaswala road, the other two
alternatives were rejected due to the high construction costs for the AC; lower economic returns
for both as compared to DBST and environmental considerations for the gravel rehabilitation
alternative.
2.4 Project Type
2.4.1 The modality of operation is through direct project financing typical of the nature of
intervention, as compared to sector budget support. The Bank and other DPs are exploring the
best way of using sector budget support in line with the recommendations of the Paris
Declaration and Accra Plan of Action.
2.5 Project Cost and Financing Arrangements
2.5.1 The project cost estimate is UA212.78 million net of taxes, which is, made up of UA163.63
million (76.9%) in foreign exchange and UA49.15 million (23.1%) in local cost. Abridged cost
estimates are Table 2.1 below.
Table 2.1: Summary of Project Cost Estimates (UA million net of taxes)
Component TZS billion UA million
FE LC Total FE LC Total
Civil Works:
Dodoma-Babati 169.70 42.43 212.13 67.01 16.75 83.76
Tunduru-Mangaka-Mtambaswalwa 154.83 38.71 193.54 61.14 15.29 76.43
Sub-total 324.53 81.14 405.67 128.15 32.04 160.19
Design Review and Supervision
Dodoma-Babati: 8.49 2.12 10.61 3.35 0.84 4.19
Tunduru-Mangaka-Mtambaswala 7.74 1.94 9.68 3.06 0.76 3.82
Sub-Total 16.23 4.06 20.29 6.41 1.60 8.01
Other Services 9.49 11.20 10.60 3.75 0.44 4.19
Capacity Building 5.36 0.60 5.96 2.11 0.24 2.35
Compensation & Resettlement - 13.27 13.27 - 5.24 5.24
Sub-Total 14.85 25.07 29.83 5.86 5.92 11.78
BASE COST 355.62 100.19 455.81 140.42 39.56 179.98
Physical Contingency (10%) 35.56 10.02 45.58 14.04 3.96 18.00
Price Contingency (FE: 3%; LC: 7%) 23.24 14.26 37.50 9.17 5.63 14.80
Total (Net of Taxes) 414.42 124.47 538.89* 163.63 49.15 212.78
1UA=TZS2,532.55 1UA=USD1.60936 * The Base Cost includes cost of weighbridges, service ducts and tree planting
6
2.5.2 The proposed financing from ADF amounts to UA140.00 million to cover 65.8% of the
project cost comprising 62.0% of the foreign exchange cost of UA101.49 million and 78.4% of
the local cost (UA38.51 million). JICA will finance the balance of foreign exchange cost
amounting to UA62.14 million or 29.2% of project cost. GOT will finance 5.0% of project cost
amounting to UA10.64 million or 21.6% of local costs and taxes. Annex A presents the
justification for GOT’s financing below 10%.
Table 2.2: Sources of Finance (UA million - net of taxes) SOURCE FE LC Total %
ADF 101.49 38.51 140.00 65.8
JICA 62.14 - 62.14 29.2
GOT - 10.64 10.64 5.0
Total 163.63 49.15 212.78 100
2.6 Project’s Target Area and Population
2.6.1 The project constitutes three road sections namely the Dodoma-Babati road situated in
Dodoma and Manyara Regions; the Tunduru-Mangaka and Mangaka-Mtambaswala roads
situated in the Ruvuma and Mtwara Regions respectively. The road sections traverse the districts
of Babati, Kondoa, Dodoma, Tunduru and Nanyumbu directly serving a combined population of
over 2.4 million people. The project must be seen in the broader regional and sub-regional
contexts as it forms part of the SADC regional network and the Cape to Cairo Trans Africa
Highway and therefore will serve beyond the population in the direct zones influence. Similarly,
the Tunduru - Mangaka and Mangaka – Mtambaswala roads are part of the regional Mtwara
Corridor connecting Tanzania to Malawi through Songea and Mozambique through the Unity
Bridge hence indirectly serving the vast populations of these countries including the Iringa –
Mbeya triangle through to Zambia and Northern Malawi.
2.6.2 Among the main project related impact is the consequential socio-economic development
which will result in increased income levels and therefore improved living standards. The areas
are rich in agriculture, natural resources and tourism. Improved wellbeing will be as an outcome
of improved transport systems derived from reduced transport costs and travel time; increased
movement of people, goods, and services; enhanced regional integration; improved road safety;
increased accurate and timely dissemination of information regarding awareness and prevention
of HIV/AIDS/STI and TB. The capacity building component will enhance the capacities in
managing the roads sub-sector; and female contractors.
2.7 Participatory Process for Project Design and Implementation
2.7.1 The preparation of the TSIP underwent extensive consultation at local, regional and
national levels including consultation with development partners through the DPG-T. The project
roads therefore were identified within an elaborate mechanism complying with best practice in
determining priority development projects. At roads sub-sector level, the Ministry of Works and
TANROADS led the process of identification of priority road projects on the trunk and regional
road network during the development of the TSIP.
2.7.2 Additional community and stakeholder consultations were conducted during the
Environmental and Social Impact Assessment (ESIA) and Resettlement action Plan (RAP)
7
exercises which covered both the national level institutions and communities down to village
levels, and with project affected persons (PAPs). All relevant ministries and bureaus dealing
with the environment, resettlement and compensation as well as NGOs and CBOs operating in
the project areas were also consulted. The Bank missions during project preparation and
appraisal also conducted consultations with various stakeholders including regional and district
administrations, community representatives, the donor community, government institutions and
NGOs. All concerned people and institutions consulted confirmed the need for the project, and
expressed willingness to cooperate towards its successful implementation. They equally
expressed specific concerns for mitigation actions of negative environmental and social impacts.
These concerns and opinions of the stakeholders have been incorporated in project design.
2.8 Bank Group Experience, Lessons Reflected in Project Design
2.8.1 Lessons learnt from management of previous and on-going road sub-sector interventions
have been incorporated in project design as follows: (i) delay in implementation has been
mitigated by use of advance contracting to facilitate early procurement and timely award of
contracts; (ii) pre-qualification has in the past limited participation. Use of post qualification will
encourage wider participation of bidders for the civil works which will result in favourable
tender rates; (iii) conditions precedent to first disbursement that are not aligned with project
implementation have delayed disbursement. The conditions have been streamlined to avoid start-
up delays due to late fulfilment of the conditions precedent to first disbursement; and (iv) under-
estimates not detected during project processing has in the past resulted in bid offers far above
available financing. The studies have been critically reviewed during project preparation, with
respect to unit rates and quantities to reduce the possibility of cost overruns; and (vi) low
capacity of executing agencies contributes to delays in project implementation which has been
mitigated through capacity strengthening that will enhance project execution.
2.9 Key Performance Indicators
2.9.1 At completion of project implementation four outcomes are expected; (i) reduction of
transport costs; (ii) reduction of travel times; (iii) increased paved road network; and (iv)
enhanced implementation capacity. The outputs of the project will be; (i) upgraded 390.6 km to
bitumen standards; (ii) implemented cross-cutting issues comprising sensitization of HIV/AIDS,
STI, TB and gender; forestation, creation of job opportunities and compensation/resettlement of
PAP; and, (iii) national road safety programme and road sub-sector studies for pipeline projects.
An independent consultant will be responsible for the collection of base line data at various
intervals throughout project implementation as a means of monitoring progress towards the
projected targets. The output indicators will be measured during project implementation as
sections of the roads are opened to traffic and after project completion.
III. PROJECT FEASIBILITY
3.1 Economic and Financial Performance
3.1.1 The methodology for the economic analysis: The methodology is based on cost benefit
analysis by comparing the “with” and “without “ project scenarios over a period of 20 years,
8
using the Highway Development and Management Model (HDM-4). The economic costs consist
of (i) the capital investment costs and (ii) the routine and periodic maintenance expenses. The
base year estimated annual average daily traffic (AADT) of Dodoma (Mayamaya)-Babati
(Bonga); Mangaka-Tunduru; and Mangaka-Mtambaswala are 129, 126 and 109 vehicles per day
respectively. The traffic projection is discussed in Annex C2. The benefits consist of savings in
(i) vehicle operating costs, (ii) motorized traffic travel time for passenger and cargo, and (iii)
exogenous benefits. The measures of project worth used are the EIRR and NPV at 12.0%
discount rate, which is the opportunity cost of capital in Tanzania.
3.1.2 Assumptions taken and the Economic Analysis Result: The project construction is
assumed to commence in June 2013. With a construction period of 36 months, the first year of
opening the road to traffic is assumed to be 2016 and the analysis period goes up to 2035. The
maintenance strategies “without project” do minimum and “with project” improved road have
been considered in the analysis. Residual values are assumed as 20 % of the initial capital
investment and credited to the project in the final evaluation year of 2035. The economic costs
taken into account in the cost benefit analysis are the Road Agency costs in the “with” and
“without” project scenarios, which include both the capital investment cost of upgrading to AC
and DBST for the three roads of the project (390.6km) and the maintenance cost. Construction
cost was revised in October 2011 to take into consideration the detailed engineering design cost
estimate, the recent tender offers and the 2011 oil based input prices into civil works. The revised
economic capital investment cost of three roads is put at USD 237.8 million (USD 127.2 million
for Dodoma-Babati, USD 75.7 million for Tunduru-Mangaka and USD 34.9 million for
Mangaka-Mtambaswala. AC pavement is selected for Dodoma-Babati while DBST for the
others.
3.1.3 The principal benefits of the road upgrading project are expected to derive from reduction
in road user costs, comprising VOC and passenger time costs, as a result of lower road roughness
and higher average travel speeds. The annual average composite VOC per vehicle km is
estimated within a range of USD 0.824 to USD0.949/veh-km on the existing gravel roads to be
reduced to the range of USD0.516 to USD0.555/veh-km when the project roads are completed
and open to traffic in 2016 with AC and DBST pavement interventions. During the same period,
average travel time on the entire three roads is reduced by 38% from 10 hours on the existing
three gravel roads to 6.5 hours when the roads are open to traffic in 2016. The summary of the
economic analysis result is presented in Table 3.1. The traffic analysis and detailed economic
analysis results are presented Annex C2.
Table 3.1 Summary of the Economic Analysis
Parameter Dodoma -Babati Mangaka-
Tunduru
Mangaka-
Mtambaswala FIRR, NPV (base case) n/a n/a n/a
Economic Internal Rate of Return (EIRR) 16.2% 15.8% 14.6%
Net Present Value (NPV) in USD 45.07 million 19.92 million 6.01 million
Sensitivity of EIRR of concurrently 10%
increase in cost and 10% decrease in traffic 14.7% 13.9% 13.1%
9
3.2 Environmental and Social Impacts
3.2.1 Environment: The project is classified as a Category 1 based on its potential adverse
social and environmental impacts - this is with respect to issues of involuntary resettlement and
impacts on the environment including forest resources. Accordingly full ESIAs and ESMPs and
RAPS were developed. The Summary of ESIAs and RAPs were posted on the Bank’s website on
01 December 2011.
3.2.2 It is noted that the road routes are along existing alignments and as such will only require
minimal land acquisition for widening the road widths. The Tunduru-Mangaka road passes in the
vicinity of three wildlife protected areas, game reserves, forest areas and also crosses an
important animal migration corridor between Lukwika-Lumesule-Selous Game Reserves in
Tanzania and Niassa National Park in Mozambique.
3.2.3 Adequate measures for mitigating adverse impacts have been identified and have been
described in the projects ESMPs. A provision of UA0.41 million has been made to implement
the ESMPs and baseline data collection. These measures include controlled excavations and
sourcing of construction materials, traffic control, location of site works from sensitive
environmental receptors, watering of the road works during implementation, adequate signage
and tree planting. The project will also bring environmental benefits in the form of erosion and
flood control measures.
3.2.4 Climate Change: During the construction phase, TANROADS will ensure that site
vehicles and equipment are adequately and timely maintained to keep exhaust emissions at a
minimum. It is envisaged that the tree planting programme associated with the project will in the
long term contribute to offsetting green-house gas emissions.
3.2.5 In terms of adaptation to climate change, the government has provided national policies
and strategies that have substantial elements of climate change adaptation. At the national level,
the National Adaptation Plan of Action (NAPA) has been prepared to identify priority activities
that respond to their urgent and immediate needs to adapt to climate change. In this context by
facilitating mobility and access to economic resources, the road project will contribute to
strengthening climate change adaptation capacity of the local communities.
3.2.6 Project design has considered the impact of climate change on the longevity of the road.
Climate change projections according to the Intergovernmental Panel on Climate Change (IPCC)
reports predict a rise in average annual temperatures of 0.90C (2030), 1.3
0C (2050), and 2.2
0C
(2100). Average annual precipitation changes are projected to increase by 4.1% (2030), 1.3%
(2050), 10.2% (2100). The engineering design has given sufficient consideration to the
temperature rise and changes in annual precipitation resulted from climate change.
3.2.7 Gender: During project feasibility, gender issues have been analysed and several impacts
have been identified and mitigation measures to curb gender related negative outcomes put in
place. Among the areas assessed were socio-cultural barriers of gender, gender biased access to
resources, policy factors and legislations, production and reproductive issues, impact of
HIV/AIDS and food security, access to social services (education and health), and employment
10
opportunities and economic empowerment. Both positive and negative gender related impacts
were isolated and mitigation measures as well as benefit enhancement measures were identified,
such as equal employment opportunities, attention to women during resettlement, targeted
HIV/AIDS messages to women and girls, among others.
3.2.8 On the whole the project is expected to benefit both women and men through creation of
employment and project design has included interventions aimed at expanding chances for
women’s economic empowerment. During implementation TANROADS will ensure that women
are encouraged to seek employment and that they are not discriminated against in the recruitment
process. Through a women empowerment program of TANROADS and MOW, women
contractors get training in routine road maintenance works with the aim of having women
contractors win at least 25% of contracts to do routine road maintenance. This project, therefore,
has made a provision of USD0.12 million under the capacity building component of additional
training of women contractors in Manyara, Dodoma, Ruvuma and Mtwara Regions.
3.2.9 During operation, improved transportation systems will empower women through
accessibility to markets for agricultural produce; easy access to social services such as hospitals
and schools and seizure of discriminatory practices by transport operators who don’t offer
transport to women during rainy season or charge a premium of 25% on the premise that women
would not help push vehicles when stuck in mud.
3.2.10 Among the negative impacts perceived in the project that are likely to disproportionately
impact on women are (i) those associated with relocation where-by women’s workload will
increase; (ii) increase of the incidence of HIV/AIDS and STI; (iii) potential for women being
harassed or attacked by construction workers. In order to address these and other issues raised,
the project has incorporated gender sensitization and mainstreaming activities to be carried out
by a specialized service provider who will combine delivery with HIV/AIDS, STI and TB
awareness and prevention program.
3.2.11 Social: One of the important and immediate means of income creation and poverty
alleviation are the direct and indirect job opportunities that will be created for the local people.
Direct employment will be in the form of skilled labour as well as semi- and non-skilled labour
during construction and maintenance. Indirect employment will include employment by
suppliers to the contractor, food vendors (especially women) and other small businesses like soft
drinks and essential grocery sales. It is estimated that the project will create approximately 1500
jobs during construction and 300 jobs during routine maintenance. Recruitment of semiskilled
and unskilled workers will be reserved for the local communities and these are expected to be
approximately 80% of the total jobs created.
3.2.12 Other wealth creation opportunities will result from an improved transportation system.
The project roads once operational will be catalysts for economic diversification including
agriculture. Dominant crops grown are maize, cashew nuts, oilseeds, groundnuts, pigeon peas,
coconut, rice, sesame and sorghum. It is anticipated that the improved road will attract new
investors to the areas; this will have a multiplier effect on the availability of other services such
as hotels, schools and medical services, in so doing create even more job opportunities. The
improved transportation systems will also make it possible for local and regional trade to
11
flourish. The improved road will increase the number of transport operators and increase demand
for agricultural produce in turn increasing farm-gate prices. Output will also increase due to easy
access to agricultural inputs and contact with extension services. The project areas have potential
for tourism hence upgrading of the roads to bitumen standards will attract high paying tourists
and will have a significant influence in increasing tourist activities in the zones of influence
especially the Selous Game Reserve. Improved accessibility will result in improved management
including quick response to emergencies and combating illegal harvesting of forest products as
well as poaching.
3.2.13 The most common diseases in the project areas include malaria, diarrhoea, acute
respiratory infections including coughing, TB, pneumonia, eye and skin diseases. The
prevalence rates for HIV/AIDS infections vary among the three project areas with Dodoma–
Babati area experiencing the highest rates. The 2007 Comprehensive Council Health Plan
indicated a prevalence rate of 12%. Updated figures for Kondoa and Babati Districts gave
prevalence at much higher rates in excess of 12.8%, compared with the national rate of 7%. On
the other hand Tunduru, Mangaka and Nanyumbu areas have lower rates ranging between 3.5%
and 4.5%, respectively. The project has made provisions for HIV/AIDS and STI and TB
awareness and prevention activities to complement what is already being carried out by the
District Health Offices where each district has District Aids Control Committees overseen by the
Tanzania Commission for AIDS (TACAIDS). NGOs and CBOs are also actively implementing
programs in both HVI/AIDS and malaria control including home-based care. One major
challenge in all project areas which contributes to high incidence of diarrhoea is lack of potable
water. The project will, where feasible, include provision of water to communities through
drilling of boreholes.
3.2.14 Involuntary Resettlement: The road works will inevitably affect a significant number of
persons and necessitate relocation of residential and associated buildings such as grain stores,
kitchens, commercial buildings; and also trees, crops, fences, social and community structures
e.g. prayer houses, schools, health facilities, water points and communal lands such as grazing
land. Approximately 753 residences will be affected on the Dodoma-Babati road, 402 on the
Tunduru-Mangaka road, and 472 on the Mangaka-Mtambaswala -- in total affecting
approximately 1627 residences. In accordance with the Bank’s Involuntary Resettlement Policy,
for all the three road sections RAPs have been prepared. A total budget of TZS13.27 billion
(equivalent of USD8.43 million) has been allocated for compensation and resettlement to be met
by Government as part of counterpart financing. TANROADS will be responsible for
implementing the RAPs.
IV. IMPLEMENTATION
4.1 Implementation Arrangements
Executing Agencies
4.1.1 Two semi-autonomous entities, namely, TANROADS, and the Roads Fund Board (RFB)
were established by Government as part of sub-sector reforms meant to improve road
12
management. TANROADS has been delegated the management of the trunk and regional road
networks and the RFB delegated to manage the Road Fund.
4.1.2 TANROADS’ organizational structure comprises five directorates namely, (i) Planning;
(ii) Procurement and Contracts; (iii) Maintenance; (iv) Projects; and (v) Business Support. Two
units, namely Internal Audit and Legal Counsel report to the Chief Executive. TANROADS has
successfully delivered positively on the management of the designated road network.
Participation of the private sector as members of the Boards of Directors of TANROADS and the
RFB has assured wide stakeholder input in decision making on the management of the road
network. Of the established engineering positions in TANROADS 87% are filled. The RFB has a
small compliment of staff which are all filled. The Environment and Social Units of
TANROADS will be responsible for implementing the RAPs. The implementation of the ESMP
will be by the contractors under the supervision of the Resident Engineers. TANROADS will
conduct regular inspections to ensure full compliance with the ESMP measures.
4.1.3 The road studies and institutional reform expert and associated support equipment for
Zanzibar will be MOIC’s responsibility. The MOIC is currently implementing a Bank financed
road project and therefore has the requisite experience to procure services for its component. The
road user charging widening study will be supervised by the RFB. The RFB has successfully
implemented donor funded studies and has the capability to oversee its component. The road
safety pilot project will be overseen by a Technical Committee comprising TANROADS, MOW
and Traffic Police. TANROADS will implement the remaining components. TANROADS has in
the past satisfactorily supervised similar projects financed by development partners including the
Bank and has the capacity to supervise its components. TANROADS has benefited from the
capacity strengthening component financed under Road Sector Support Project I which has
enhanced the young engineers’ project management capacity.
Procurement
4.1.4 The procurement of goods, works and acquisition of consulting services financed by the
Bank and JICA will be in accordance with the Bank's Rules and Procedure for Procurement of
Goods and Works, May 2008 edition or as appropriate Rules and Procedure for the Use of
Consultants, May 2008 edition using the relevant Bank Standard Bidding Documents. The
Procurement Plan has been discussed and finalized. Advance contracting is applicable to
procurement.
Financial Management and Disbursement Arrangements
4.1.5 The Financial Management Assessment concluded that the overall risk for this project was
‘moderate’ and there will be adequate capacity to record accurate and complete transactions and
deliver financial reports timely. In line with the Paris Declaration and Accra Agenda, the
project’s financial management transactions will be managed using the country systems. The
project’s financial management transactions will be managed within the existing set-ups.
TANROADS, MOIC and RFB are implementing projects financed by DPs with notable success
and have the experience to manage the financial and disbursement transactions for this project.
As part of the Internal control the Internal Audit Units will include in their audit programmes this
project and separate reports will be issued and shared with the Bank during supervision missions.
13
The financial statements will be audited annually by the Controller and Auditor General (CAG)
in line with the Bank’s Guidelines for Financial Reporting and Auditing of Projects. In the event
that CAG cannot undertake the audit, provision has been made for use of an independent auditor.
A value for money audit will be undertaken by the CAG or his appointee, tabled and discussed at
midterm review. The direct disbursement method will be used for the civil works and
consultancy services. Special Accounts will be utilized for the capacity building component.
4.2 Monitoring
4.2.1 Each of TANROADS, MOIC and the RFB, have assigned project coordinators with the
requisite qualifications and experience that were reviewed at appraisal that will monitor
implementation. The day to day activities of the civil works will be monitored by the supervision
team of the consultant. Independent consultants under the oversight of TANROADS will be
responsible for the sensitization of HIV/AIDS, STI, TB and gender; baseline data collection and
ESMP implementation, road safety and the road sub-sector study. The MOIC and RFB
coordinators will monitor the consulting firms appointed for the studies. The monthly and
quarterly reports submitted to the Bank will include physical, financial, social and environmental
indicators that the project has achieved. The reports will provide updated information on project
implementation highlighting key issues and problem areas and recommended measures for
resolving identified bottlenecks. At least two field missions will be undertaken annually to the
sites to monitor progress. At 85% completion of the project components or 95% disbursement of
the loan funds, the Bank and the Executing Agency will prepare a joint Project Completion
Report.
4.3 Governance
4.3.1 Governance and accountability is an important pillar of both MKUKUTA/MKUZA II
and the National Development Vision 2025. The Government is committed to putting in place
well-functioning systems that are representative, accountable and inclusive, scaling up and
following up on the implementation of all components of the National Framework on Good
Governance and improving the capacity of all representative bodies as well as strengthening
local level governance institutions. Anti-corruption efforts are spearheaded by the Prevention and
Combating of Corruption Bureau (PCCB), which was set up in 1991. Generally, the
Government’s governance agenda is comprehensive and well-focused and the Bank is supporting
the ongoing efforts through the Institutional Support for Good Governance Project (ISP II).
4.4 Sustainability
4.4.1 The roads sub-sector has undergone reforms that include the establishment of
TANROADS for the management and maintenance of roads and the Roads Fund Board (RFB) to
manage the Road Fund (RF). The sustainability of the project will depend largely on the ability
of TANROADS to implement timely maintenance and to exercise effective axle-load-control on
the roads.
4.4.2 The RF is ring-fenced financing (from fuel levies, transit fees and overloading charges)
for road maintenance and its revenue has increased annually on the average by about 21% from
14
TZS44.939 billion in 2000/01 to TZS256.045 billion in 2009/10. The increase in the fuel levy by
100% (from TZS 100/litre to TZS200/litre) in 2007/08 doubled the RF Revenues and shows
GOT’s commitment to the sustainability of the roads subsector. Of the total revenues, 1% of the
collection is set aside for the administration of the Fund. From the remaining balance, the RF
allocates 63% to TANROADS for maintenance of trunk and regional roads; 7% to MOW for
road development; 30% to local district and municipal authorities for maintenance and
development works of district, feeder and urban roads.
4.4.3 There is sufficient financing available to cover routine maintenance of the road network in
good and fair condition, from the Road Fund. Even though fuel levy collection is a major issue
(because of increasing revenue leakages due to adulteration, dumping of transit fuel and tax
evasion), the fuel levy is at a level equivalent to approximately US$ 0.16 per liter, slightly higher that
the optimal for maintenance of US$ 0.15 per liter and therefore adequately funding the country’s road
routine maintenance requirements and part of the periodic maintenance needs. A review of the periodic
maintenance and rehabilitation need and allocation of the last 3 years (2007/08 to 2009/10)
shows an annual average periodic maintenance gap of TZS64.3 billion.
4.4.4 In order to bridge the financing gap, the RFB has requested that this project incorporates a
study to review additional sources of finance to widen the road user charging system. The study
will review the efficiency of collection of revenues for the existing sources besides identifying
new sources.
4.4.5 To date, private contractors in Tanzania carry out 100% of the periodic and the routine
maintenance. The private sector role is in the right direction for the sustainability of investment
in the sub-sector and contributes to the enhancement of the development of the domestic
contracting industry. TANROADS through its regional offices enforces axle load control using
25 static and 17 mobile weighbridges on the road network, which are functioning fairly well. An
additional 6 static weighbridges are planned at strategically important locations. In addition, as
the project roads are part of the continental and regional transport corridors, the project has
provision for a weighbridge for each of the project roads to mitigate the risk of premature
pavement failure due to overloading.
4.4.6 With respect to the project roads, maintenance of the completed sections of the roads will
be the responsibility of the contractors during the construction phase. After completion,
TANROADS will be responsible for maintenance of the road through financing from the RF.
The financial requirement for routine maintenance of the three roads amounts to USD0.786
million per year, starting 2017. Periodic maintenance in 2024 for the newly constructed roads,
will amount to USD29.4 million. This is within the financing capacity of the RF. The
implementation of the above-mentioned measures will go a long way towards the sustainability
of the roads sub-sector.
4.5 Risk Management
4.5.1 TSIP Implementation: Failure by Government to implement the Transport Sector
Investment Program poses a risk of not achieving the objectives set by the transport sector. The
risk is mitigated by monitoring the implementation of the projects in the program by the DPG-T
15
and regular dialogue with Government through Joint Technical Committee meetings and Joint
Transport Sector Reviews;
4.5.2 Project Implementation: Delays in fulfilment of conditions precedent to first
disbursement can delay project implementation and result in escalation of costs. The preparation
of the project has ensured that conditions precedent to first disbursement are kept to a minimum
and are aligned with the implementation schedule. Furthermore Advance Contracting for works
and consultancy services will be utilized to fast track implementation. Project costing has made
contingencies to cover possible price increases;
4.5.3 Financing: Failure by GOT to complete the section it is financing internally poses a risk
to attaining the objectives of the project. The risk will be mitigated by limiting GOT’s
contribution to below the 10% minimum required by the Bank;
4.5.4 Operational: The risk of premature failure of the road structure has been mitigated by
incorporating the construction of a weighbridge for each road in the bill of quantities;
4.6 Knowledge Building
4.6.1 The road safety pilot project will collect data that will inform road safety practitioners in
the country on the best practices on reducing accidents; the data collection at project
commencement, execution and completion will generate knowledge on the indicators on the
benefits to the communities in the zone of influence that will be used to measure the achievement
of the expected outcomes and outputs. The use of independent service providers will provide
knowledge on best practices; and the capacity building component of the project will enhance
project management capacity of staff.
V. LEGAL INSTRUMENTS AND AUTHORITY
5.1 Legal Instrument
5.1.1 The legal instrument for the Project is a loan agreement (“Agreement”) between the
Republic of Tanzania (the Borrower”) and the African Development Fund. An ADF-XII loan of
UA140.00 million from the PBA allocation will be used to finance the project.
5.2 Conditions Associated with Bank’s Intervention
5.2.1 The ADF loans shall be subject to the following specific and particular conditions:
(A) Conditions Precedent to Entry Into Force: The entry into force of the loan Agreements
shall be subject to the fulfilment by the Borrowers of the conditions set forth in Section 12.01 of
the Fund’s General Conditions Applicable to Loan Agreements and Guarantee Agreements
(Sovereign Entities).
(B) Conditions Precedent to First Disbursement: The obligations of the Fund to make the
first disbursement of the loan shall be conditional upon entry into force of the Loan Agreement
16
as stated in paragraph 5.2.1 above and evidence provided by the Borrower, in a form and
substance satisfactory to the Fund, of the fulfilment of the following conditions:
(i) The Borrower shall have opened two (2) foreign exchange Special Accounts in a Bank
acceptable to the Fund for the deposit of part of the proceeds of the Loan to finance eligible
expenses for capacity building for TANROADS and MOIC;
(ii) The Borrower shall have developed and submitted a Resettlement Action Plan (hereinafter
referred to as the RAP) together with a schedule (the “Works and Compensation Schedule”)
detailing inter alia, (A) the sections into which each lot of the civil works will be divided and (B) a
timeframe for the compensation of the Project Affected Persons with respect to all such sections, in
each case, in form and substance satisfactory to the Fund; and;
(iii)The Borrower shall have fully compensated and/or resettled all Project-Affected Persons
(“PAPs”) with respect to the first sections of each lot of the civil works in accordance with the
Resettlement Action Plans (“RAP”) and the Works and Compensation Schedules prior to the
commencement of construction works; and
(iv) The Borrower having submitted written confirmation to the Fund that it has signed a
financing agreement for the joint financing required for the project;
(C) Other Conditions: The Borrower will provide evidence, in form and substance acceptable to
the Fund that prior to commencement of construction on any section of any lot of the civil works, all
Project Affected Persons have been compensated and/or resettled with respect to the relevant
section of the relevant lot in accordance with the RAP and any updates to the RAP as well as the
Works and Compensation Schedule.
(D) Undertakings: The Borrower undertakes; (a) to carry out traffic counts on the Dodoma
(Mayamaya)-Babati (Bonga) and Tunduru-Mangaka-Mtambaswala roads on annual basis as of
commencement of the civil works and on the national road network every four years; (b) to
implement all measures necessary to (i) mitigate the Environmental and Social Management Plan
(ESMP); (ii) comprehensively report on the said implementation of the ESMP every six-months;
(iii) adopt effective measures for the safety of the project roads, and to (iv) progressively
sensitize the local population on HIV/AIDS, STI, TB and gender issues; (c) Provide the Fund
with an annual report on measures adopted for the safety of the project roads, sensitization of the
local populations on HIV/AIDS, STI, TB and gender issues.
5.3 Compliance with Bank Policies
5.3.1 This project complies with all applicable Bank policies and does not require exception
from any Bank policies.
17
VI . RECOMMENDATION
6.1 Management recommends that the Board of Directors approve the proposed loan of
UA140.00 million to the United Republic of Tanzania to jointly finance with JICA Road Sector
Support Project II for the purposes and subject to the conditions stipulated in this report.
APPENDIX I: Tanzania - Comparative Socio-Economic Indicators
Year Tanzania Africa
Develo-
ping
Countrie
Develo-
ped
CountrieBasic Indicators Area ( '000 Km²) 945 30 323 80 976 54 658Total Population (millions) 2011 46.2 1,044.3 5,732 1,123Urban Population (% of Total) 2010 26.5 39.9 45.1 77.3Population Density (per Km²) 2011 48.9 34.0 59.9 33.2GNI per Capita (US $) 2010 532 1 565 3 304 38 657Labor Force Participation - Total (%) 2011 49.0 40.1 65.6 60.7Labor Force Participation - Female (%) 2011 49.3 41.0 51.7 52.2Gender -Related Dev elopment Index Value 2007 0.527 0.433 0.694 0.911Human Dev elop. Index (Rank among 187 countries) 2011 152 n.a n.a n.aPopul. Liv ing Below $ 1 a Day (% of Population) 2007 67.9 42.3 25.2 …
Demographic Indicators
Population Grow th Rate - Total (%) 2011 3.0 2.3 1.3 0.6Population Grow th Rate - Urban (%) 2010 4.7 3.4 2.4 1.0Population < 15 y ears (%) 2011 5.2 40.3 29.0 17.5Population >= 65 y ears (%) 2011 3.2 3.8 6.0 15.4Dependency Ratio (%) 2011 88.2 77.6 55.4 49.2Sex Ratio (per 100 female) 2011 99.9 99.5 93.5 94.8Female Population 15-49 y ears (% of total population) 2011 22.7 24.4 49.4 50.6Life Ex pectancy at Birth - Total (y ears) 2011 57.5 56.0 67.1 79.8Life Ex pectancy at Birth - Female (y ears) 2011 52.2 57.1 69.1 82.7Crude Birth Rate (per 1,000) 2011 40.5 34.2 21.4 11.8Crude Death Rate (per 1,000) 2011 10.4 12.6 8.2 8.4Infant Mortality Rate (per 1,000) 2011 57.9 78.6 46.9 5.8Child Mortality Rate (per 1,000) 2011 93.1 127.2 66.5 6.9Total Fertility Rate (per w oman) 2011 5.4 4.4 2.7 1.7Maternal Mortality Rate (per 100,000) 2008 790.0 530.2 290.0 15.2Women Using Contraception (%) 2007-09 26.4 … 61.0 …
Health & Nutrition Indicators
Phy sicians (per 100,000 people) 2007-09 1.0 58.3 109.5 286.0Nurses (per 100,000 people)* 2007-09 16.8 113.3 204.0 786.5Births attended by Trained Health Personnel (%) 2007-09 43.4 50.2 64.1 …Access to Safe Water (% of Population) 2008 54.0 64.5 84.3 99.6Access to Health Serv ices (% of Population) 2007-09 … 65.4 80.0 100.0Access to Sanitation (% of Population) 2008 24.0 41.0 53.6 99.5Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2007 6.2 4.9 0.9 0.3Incidence of Tuberculosis (per 100,000) 2010 177.0 294.9 161.0 14.0Child Immunization Against Tuberculosis (%) 2010 99.0 85.3 81.0 95.1Child Immunization Against Measles (%) 2010 92.0 77.9 80.7 93.0Underw eight Children (% of children under 5 y ears) 2007-09 16.7 30.9 22.4 …Daily Calorie Supply per Capita 2007 2 032 2 465 2 675 3 285Public Ex penditure on Health (as % of GDP) 2008 5.1 5.7 2.9 7.4
Education Indicators
Gross Enrolment Ratio (%)
Primary School - Total 2010 102.3 100.4 107.2 101.3 Primary School - Female 2010 103.1 90.0 109.2 101.1 Secondary School - Total 2007-09 … 37.7 62.9 100.1 Secondary School - Female 2007-09 … 33.7 61.3 99.6Primary School Female Teaching Staff (% of Total) 2009 49.1 41.4 60.5 81.4Adult literacy Rate - Total (%) 2009 72.9 65.1 80.3 98.4Adult literacy Rate - Male (%) 2009 79.0 74.3 86.0 98.7Adult literacy Rate - Female (%) 2009 66.9 56.2 74.8 98.1Percentage of GDP Spent on Education 2008 6.8 4.7 3.8 5.0
Environmental Indicators
Land Use (Arable Land as % of Total Land Area) 2008 10.8 7.8 10.6 10.9Annual Rate of Deforestation (%) 2007-09 … 0.7 0.4 -0.2Annual Rate of Reforestation (%) 2007-09 … 10.9 … …Per Capita CO2 Emissions (metric tons) 2009 0.2 1.1 2.9 12.5
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.
COMPARATIVE SOCIO-ECONOMIC INDICATORS
Tanzania
October 2011
0102030405060708090
100
2003
2004
2005
2006
2007
2008
2009
2010
2011
Infant Mortality Rate( Per 1000 )
Ta nzania Africa
0
200
400
600
800
1000
1200
1400
1600
1800
2002
2003
2004
2005
2006
2007
2008
2009
2010
GNI per capita US $
Ta nzania Africa
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2003
2004
2005
2006
2007
2008
2009
2010
2011
Population Growth Rate (%)
Tanzania Africa
1112131
41516171
2003
2004
2005
2006
2007
2008
2009
2010
2011
Life Expectancy at Birth (years)
Ta nzania Africa
APPENDIX II: Table of ADF Portfolio in Tanzania (as of February 2012)
Project
Date
Approved
Amount
(UA million)
Disbursed
(UA million)
%
Disbursed
District Agricultural Sector Investment Project 24/11/2004 Loan: 36.00
Grant: 7.00
Total: 43.00
22.07
6.87
61.78
98.18
Roads Rehabilitation and Upgrading Project* 03/09/2001 Loan: 38.65 15.57 40.28
Zanzibar Roads Upgrading Project** 9/06/2004 Loan: 16.22
Grant: 0.71
Total: 16.93
13.23
0.71
81.58
100.00
Singida-Babati-Minjingu Road Upgrading
Project
17/11/2007 Loan: 60.00
37.89
63.15
Road Sector Support Project I 02/12/2009 Loan: 152.00 15.07 9.92
Rural Water Supply and Sanitation Programme 13/09/2006 Loan: 59.00
Grant:6.60
Total:65.60
29.57
-
59.31
-
Zanzibar Water Supply and Sanitation Project 11/11/2008 Loan: 25.00
Grant: 2.76
Total 27.76
1.27
-
5.08
-
Electricity V Project 14/12/2007 Loan: 28.68
Grant: 1.32
Total: 30.00
0.18
0.76
0.61
57.56
Iringa-Shinyanga Transmission Line 26/10/2010 Loan: 45.36 - -
Support to SAP for Vocational Ed & Training 09/07/2003 Loan: 14.22
Grant: 1.60
Total: 15.82
13.10
1.37
92.09
85.68
Support for Maternal Mortality Reduction
Project
11/10/2006 Loan: 40.00
20.57 51.41
Small Entrepreneurs Loan Facility 10/05/2010 Loan: 20.00 10.26 51.29
Alternative Learning and Skills Development 29/06/2011 Loan: 15.00 - -
Institutional Support for Good Governance 20/09/2010 Grant: 5.20
0.82 15.68
Poverty Reduction Loan IV 16/12/2011 Loan: 100.00 25.03 25.03
CRBD SME Partial Credit Guarantee facility 22/07/2008 Loan: 8.00 - -
Multinational Projects
Arusha-Namanga Road Development Project 13/12/2006 Loan: 0.54
Grant: 3.50
Total: 4.04
0.16
1.71
29.35
48.97
East Africa Transport and Trade Facilitation (EAC) 29/11/2006 Grant: 6.20 2.36 38.09
East Africa Transport and Trade Facilitation (TTFA) 29/11/2006 Grant: 1.00 0.94 94.00
Isaka-Kigali Railway Feasibility Study 20/10/2004 Grant: 9.20 - -
L Victoria Water Supply & Sanitation 17/12/2010 Loan: 17.48 - -
Support to Lake Tanganyika Integrated Regional
Development Program (PRODAP)
17/11/2004 Loan: 4.99 2.20 44.08
* The loan balance has been cancelled. GOT is financing the balance of works; ** The grant balance has
been cancelled; The loan closed 31 December 2011.
APPENDIX III: Key Related Projects Financed by Other Development Partners in
Tanzania
S.# Project Name & Description Financier
Loan/Grant
Amount
(USD
million)
Completion
Status (%)
Supervision Rating
Implemen-
tation
Progress
Develop-
ment
Objective
1 Upgrading of Taraka-Rombo-Mkuu Road
Section (32 Km) BADEA/GOT 9.6
Substantially
Completed S S
2 Upgrading of Marangu-Mkuu and
Mwika-Kilacha Road Sections (32 Km) NORAD 19.3 82 S S
3 Rehabilitation of Mandela (Port Access)
Road (16 Km) EU/GOT 42.2
Substantially
Completed S G
4 Rehabilitation of Chalinze-Segera-Tanga
Phase I: Chalinze-Kitumbi (125 Km) DANIDA 47.8
Substantially
Completed G G
5 Upgrading of Ndundu-Somanga Road
(60 Km)
KUWAIT/
OFID/GOT 6.6 63 S G
6
Rehabilitation of TANZAM Highway:
Iyovi-Kitonga Gorge and Ikokoto-Iringa
Road Sections (149.6 Km)
DANIDA/
GOT 111.6 93 G G
7 Rehabilitation of Regional roads to
Engineering gravel (145km) OPEC/GOT 8.0 Completed G G
8 Rehabilitation Korongwe-Mkumbara –
Same Road (172 Km) IDA 57.4 Mobilization S G
9 Bus Rapid Transit – Dar Es Salaam –
Phase 1: 20.9km IDA 98.2
Mobilization S S
10 Rehabilitation of Tanga-Hororo Road (65
Km) MCC 54.09 67 G G
11 Upgrading of Tunduma-Sumbawanga
Road (233 Km) MCC 175.9 27 G G
12 Upgrading of Namtumbo-Songea-
Mbinga Road (145 Km) MCC 109.22 22.5 G G
13 Construction of Malagarasi Bridge :
Design and Build South Korea 25.0 8.15 G G
14 Rehabilitation of Arusha – Minjingu
(98km) IDA 52.5 Mobilization S G
Key: G – Good; S – Satisfactory
APPENDIX IV: Map of the Project Area
The map on this page has been prepared by the ADB Group’s staff exclusively for the convenience of the readers of the
report to which it is attached. The dimensions used and the boundaries shown on the map do not imply on the part of the
Group and its affiliates, any judgment on the legal status of any territory or any endorsement or acceptance of such
boundaries.”
ANNEX A
Justification of Request of Government Contribution of Less Than 10% Based on the Bank’s policy on Expenditure Eligible for the Bank Group, this operation is
proposing government financial contribution of less than 10%, justified as follows:
A1 Country Commitment to Implement Its Overall Development Program: Tanzania’s
development strategy is the “National Strategy for Growth and Reduction of Poverty” (2010/11 –
2014/15). The Government is committed to implementing the NSGRP II and continues to both
mobilize domestic resources for the purpose and to strengthen the linkage between the plan and
the national budget, by enhancing sector- and cluster-based strategic planning and budgeting.
The NSGRP II is thus features fundable and implementable activities. The Government has also
aligned all national and sector policies, strategies and programs as well as plans of MDAs,
Regions and LGAs with the NSGRP II and has harmonized them with the national budget
process. The NSGRP II in turn feeds into sector and local processes through the outputs of the
monitoring systems of the development plan.
A2 Financing Allocated by the Country to Sectors Targeted by Bank Assistance:
Government continues to prioritize infrastructure (of which the road sector is the largest
component) in its annual budget allocations as indicated in Table 1.
TABLE 1: INFRASTRUCTURE FINANCING IN TANZANIA
2010/2011 Budget 2011/12 Budget
Financing allocated to infrastructure UA 590 million UA 1,100 million
Share of infrastructure in the budget 13% 21%
Financing allocated to roads sub-sector UA109.1 million UA240.76 million
Share of roads budget in infrastructure budget 18.5% 21.9%
Source: Ministry of Finance
A3 Country Budget Situation and Debt Level: The current budget situation is summarized in
Table 2, which indicates points to the country’s continued heavy dependence on external
financing of its budget. Roughly 30% of government spending is dependent on foreign aid.
Current public debt as a percentage of GDP for 2010 stands debt at 41%.Various debt
sustainability analyses find that Tanzania’s risk of debt distress is low, and that there appears to
be room for an increase in the debt, even on non-concessional terms, to step up financing of such
key sectors as infrastructure over the medium term. Consequently, overall debt levels are within
International Monetary Fund (IMF) debt sustainability levels.
TABLE 2: BUDGET SITUATION
2010/11 Budget 2010/11 Likely 2011/12 Budget
Total Expenditure as % of GDP 33% 30% 34%
Domestic Revenues as % of GDP 17.3% 16.0% 17.2%
Share of Foreign Loans and Grants in total Budget 28% 31% 29%
Share of General Budget Support in total Budget 7% 9% 6%
Foreign Loans and Grants as % of GDP 9% 9% 10%
Source: Ministry of Finance
A4 Country Initiatives: The Government’s initiative of letting out road works contracts for
59km of the Dodoma-Babati Road using budget financing amounting to UA21.04 million net of
taxes is an indication of a commitment to upgrade the road to bitumen standards. In addition the
Governments of Tanzania and Mozambique have completed the Unity Bridge entirely with
internal financing at a cost of USD22.67 million (UA11.40 million).