West Bank and Gaza Municipal Infrastructure – World Bank project – Public information

Project Name West Bank and Gaza-Municipal Infrastructure Development            Project

Region                        Middle East and North Africa

Sector                        Urban Development

Project ID                    XOPA43339

Borrower                      The Palestine Liberation Organization for

                              the Benefit of the Executive Authority of

                              the Palestinian Council

Implementing Agency           The Ministries of Local Government,

                              Transport and Works; the Municipalities

                              of Nablus, Jenin, Hebron, Rafah and Gaza

                              City; and the Palestinian Economic

                              Council for Development and

                              Reconstruction (PECDAR).

Environmental Category        "B"

Date PID Prepared             April 23, 1996

Appraisal                     February 1, 1996

Projected Board Date          May 28, 1996

A.   Background

     Country and Sector Background

1.   Historically, local governments have been the foundation of

Palestinian governance.  They have also been key providers of public

goods and services in the West Bank and Gaza (WBG).  However, years of

economic and political dislocation, the neglect of these institutions

and under-investment in the public sector have contributed significantly

to the present inadequate level of infrastructure and services, which

are now far below the levels in countries with comparable per capita

GNP.  In many areas water quality is low; system losses are high; many

villages are unserved; and few municipalities have adequate wastewater

collection, treatment or disposal systems.  The road network has

deteriorated to the point where, without immediate rehabilitation, past

investments may be completely lost.  Some 50 percent of the roads in

Gaza are unpaved, and it is estimated that 40 percent of the road system

in the West Bank is below acceptable service levels.  Given the

important role that municipalities play in infrastructure and service

delivery, these conditions cannot be significantly and sustainably

improved unless urgent attention is paid to rationalizing and

strengthening of the local government (LG) system.

B.   Objective

2.   The overall objectives of the proposed project are to continue the

thrusts began under the Emergency Rehabilitation Project to rehabilitate

basic, high-priority infrastructure  and services, relieve critical

infrastructure bottlenecks, relieve unemployment and deliver wide-spread

benefits as quickly as possible.  This project would also seek to

initiate institutional reform and capacity building in the LG sector

particularly by helping to clarify the legal and institutional

framework, reform the LG fiscal and financial system, and strengthen LG

management, maintenance and service delivery capacity.

C.   Description

3.   The proposed project would have two main parts.  Part 'A', the

Infrastructure Rehabilitation and Improvement component, would support:

(i) the rehabilitation and improvement of vital high priority road,

water, wastewater and sanitation networks, systems, structures, plant

and facilities; (ii) the establishment of a maintenance program, (iii)

the establishment of an urban Upgrading program (basic infrastructure

and community facilities); and (iv) technical assistance and studies for

sub-project preparation and supervision.  (Intervention in the water,

wastewater and sanitation sectors would be limited to the West Bank

since Gaza would be served by complementary Bank-supported project.)

Part B, the Local Government Development component, would help initiate

and support institutional, financial and managerial reforms in the local

government system.  This would include support to the Ministry of Local

Government (MLG) to initiate studies, workshops and, in due course,

actions aimed at: (i) clearly defining and rationalizing the relative

roles and responsibilities of the various levels of government; and (ii)

developing an efficient, equitable and sustainable system of inter-

governmental revenue sharing.  Also, this component would help support

the technical assistance, studies, training and equipment necessary for

preparing and implementing the proposed reforms.  Supplementing the two

main components outlined above would be a third, a Managerial and

Incremental Operating Costs component (Part 'C') which would help

finance the establishment of essential project management and monitoring

capacity, including operating costs and critical vehicles, equipment,

materials and spares for implementing agencies.

D.   Financing

4.   The preliminary estimated total project cost is US$45 million which

would be financed by: an IDA Credit (from the Trust Fund for Gaza and

West Bank) of US$40 million; and US$5 million in local funding.  This

financing plan has yet to be confirmed during negotiations.  In order to

help support an emergency employment program, retroactive financing of

up to a maximum 20 percent of the credit amount has been provided for.

E.   Sustainability

5.   Through this project a start would be made on systemic reform and

building sustainable capacity at both local and central levels of

government.  Several measures are contemplated.  First, at the municipal

level, the project would help support steps to mobilize revenues on a

sustainable basis, improve cost recovery, and strengthen municipal

financial and asset management.  Second, at the central level, the

project would help support steps to rationalize roles and

responsibilities; establish an efficient, equitable and sustainable

system of inter-governmental revenue sharing; strengthen LG investment

programming; and strengthen MLG's planning and policy making capability.

Third, sub-project selection criteria would include consideration of

recurrent cost implications, and would help eliminate sub-projects with

unsustainable future recurrent cost commitments.

F.   Poverty Category

6.   The project would support the Palestinian effort to alleviate

poverty, build institutional capacity, improve the environment, preserve

public assets and create an enabling environment for sustainable private

sector development.  Specifically, in the short run, the infrastructure,

rehabilitation and improvement component and, within this, the

maintenance sub-program particularly, will generate a significant number

of lower skilled jobs at the municipal and village levels where poverty

is most widespread.

G.   Environmental Aspects

7.   Implementation of the proposed project would result in significant

improvements in the management of water and wastewater in the West Bank.

Because of past experiences, the project would not support construction

of new wastewater treatment plants or sludge disposal facilities prior

to a detailed environmental examination of the interventions in this

area.  Rehabilitation of the road network would include improvements to

drainage, thus reducing flooding in municipalities and erosion; in

addition, the resulting efficiencies in travel operations would reduce

air pollution.  Proposed activities to be supported under the project

would be subject to environmental screening and review process which

would be coordinated by the environmental specialist assigned to the

staff of PECDAR, in coordination with representatives of the

Environmental Planning Directorate of the Ministry of Planning and

International Cooperation and the Palestinian Department of Antiquities

of the Ministry of Tourism and Antiquities and IDA.  Environmental

mitigation and monitoring measures would be included as appropriate.

The project presently is classified under environmental category B.

H.   Project Benefits

8.   The project would have a particularly positive impact on

employment:  an estimated 3,500 man-years of direct employment in

construction would be created.  Further, by helping to improve the

delivery of essential infrastructure services, the project would provide

other significant and widespread social and economic benefits.

Specifically, it would help: protect and conserve sensitive and limited

water resources, and reduce the losses due to network inadequacies and

inefficient utility operations; make a start in improving roads,

reducing traffic congestion, travel time, and vehicle operating costs;

and improve the general quality of life for broad segments of the

population.  The project would also help rationalize and strengthen both

central and local institutions; mobilize local initiative and resources;

improve resource allocation and open up opportunities for private sector

participation and development through consulting, contracting, and

manufacturing inputs; and help lay the foundation for sustainable

development.  The benefits would accrue to virtually all citizens of WBG

and particularly to low income families through increased employment

opportunities and construction.

Contact Point:      Task Manager

                    Mr. Kingsley Robotham

                    The World Bank

                    West Bank And Gaza Resident Mission

                    Telephone No: (011 972) 2 5747151

                    Fax No: (011 972) 2 5747150

                    or

                    Mr. Suhail Jme'an

                    The World Bank

                    1818 H Street, N.W.

                    Washington D.C. 20433

                    Telephone No: (202) 473-2991

                    Fax No: (202) 477-0348

Note:  This is information on an evolving project.  Certain components

may not necessarily be included in the final project.

7 February 1996

Project Name                  West Bank and Gaza-Municipal…
                              Infrastructure Development Project

Region                        Middle East and North Africa

Sector                        Infrastructure

Project ID                    XOPA43339

Borrower                      The Palestine Liberation Organization
                              (PLO) for the Benefit of the
Palestinian
                              Authority (PA)

Implementing Agency           The Ministries of Local Government,
                              Transport and Works; the
Municipalities of
                              Nablus, Jenin, Hebron, Rafah and Gaza
                              City; and the Palestinian Economic
Council
                              for Development and Reconstruction.

PID Date                      February 7, 1996

Appraisal Date                01/96

Board Date                    May 1996

     Sector Background.  Historically, local governments have been
the
foundation of Palestinian governance.  They have also been key
providers of public goods and services in the West Bank and Gaza
(WBG).  However, years of economic and political dislocation, the
neglect of these institutions and under-investment in the public
sector have contributed significantly to the present inadequate
level
of infrastructure and services, which are now far below the levels
in
countries with comparable per capita GNP.  In many areas water
quality
is low; system losses are high; many villages are unserved; and few
municipalities have adequate wastewater collection, treatment or
disposal systems.  The road network has deteriorated to the point
where, without immediate rehabilitation, past investments may be
completely lost.  Some 50 percent of the roads in Gaza are unpaved,
and it is estimated that 40 percent of the road system in the West
Bank is below acceptable service levels.  Given the important role
that municipalities play in infrastructure and service delivery,

these
conditions cannot be significantly and sustainably improved unless
urgent attention is paid to rationalizing and strengthening of the
local government (LG) system.

     Project Objectives.  The overall objectives of the proposed
project are to continue the thrusts began under the Emergency
Rehabilitation Project to rehabilitate basic, high-priority
infrastructure  and services, relieve critical infrastructure
bottlenecks, relieve unemployment and deliver wide-spread benefits
as
quickly as possible.  This project would also seek to initiate
institutional reform and capacity building in the LG sector
particularly by helping to clarify the legal and institutional
framework, reform the LG fiscal and financial system, and
strengthen
LG management, maintenance and service delivery capacity.

     Project Description.  The proposed project would have two main
parts.  Part þAþ, the Infrastructure Rehabilitation and Improvement
component, would support: (i) the rehabilitation and improvement of
vital high priority road, water, wastewater and sanitation
networks,
systems, structures, plant and facilities; (ii) the establishment
of a
maintenance program, (iii) the establishment of an urban Upgrading
program (basic infrastructure  and community facilities); and (iv)
technical assistance and studies for subproject preparation and
supervision.  (Intervention in the water, wastewater and sanitation
sectors would be limited to the West Bank since Gaza would be
served
by complementary Bank-supported project.)  Part þBþ, the Local
Government Development component, would help initiate and support
institutional, financial and managerial reforms in the local
government system.  This would include support to the Ministry of
Local Government (MLG) to initiate studies, workshops and, in due
course, actions aimed at: (i) clearly defining and rationalizing

the
relative roles and responsibilities of the various levels of
government; and (ii) developing an efficient, equitable and
sustainable system of inter-governmental revenue sharing.  Also,
this
component would help support the technical assistance, studies,
training and equipment necessary for preparing and implementing the
proposed reforms.  Supplementing the two main components outlined
above would be a third, an Incremental Operating and Managerial
Costs
component (Part þCþ) which would help finance the establishment of
essential project management and monitoring capacity, including
operating costs and critical vehicles, equipment, materials and
spares
for implementing agencies.

     Project Financing.  The preliminary estimated total project
cost
is US$80 million which would be financed by: (a) an IDA Credit
(from
the Trust Fund for Gaza and West Bank) of US$20 million; (b)
cofinancing of about US$55 million; and (c) US$5 million in local
funding.  This financing plan has yet to be confirmed.

     Project Sustainability.  Through this project a start would be
made on systemic reform and building sustainable capacity at both
local and central levels of government.  Several measures are
contemplated.  First, at the municipal level, the project would
help
support steps to mobilize revenues on a sustainable basis, improve
cost recovery, and strengthen municipal financial and asset
management.  Second, at the central level, the project would help
support steps to rationalize roles and responsibilities; establish
an
efficient, equitable and sustainable system of inter-governmental
revenue sharing; strengthen LG investment programming; and
strengthen
MLGþs planning and policy making capability.  Third, subproject
selection criteria would include consideration of recurrent cost
implications, and would help eliminate subprojects with
unsustainable
future recurrent cost commitments.

     Program Objective Categories and Poverty Category.  The
project
would support the Palestinian effort to alleviate poverty, build
institutional capacity, improve the environment, preserve public
assets and create an enabling environment for sustainable private
sector development.  Specifically, in the short run, the
infrastructure, rehabilitation and improvement component and,
within
this, the maintenance sub-program particularly, will generate a
significant number of lower skilled jobs at the municipal and
village
levels where poverty is most widespread.

     Environmental Aspects.  Implementation of the proposed project
would result in significant improvements in the management of water
and wastewater in the West Bank.  Because of past experiences, the
project would not support construction of new wastewater treatment
plants or sludge disposal facilities prior to a detailed
environmental
examination of the interventions in this area.  Rehabilitation of
the
road network would include improvements to drainage, thus reducing
flooding in municipalities and erosion; in addition, the resulting
efficiencies in travel operations would reduce air pollution.  All
activities would be subject to environmental review by the
environmental specialist in the Palestinian Environmental
Protection
Authority and IDA.  Environmental mitigation and monitoring
measures
would be included as appropriate.  The project presently is
classified
under environmental category B.

     Benefits.  The project would have a particularly positive
impact
on employment.  Further, by helping to improve the delivery of
essential infrastructure services, the project would provide other
significant and widespread social and economic benefits.
Specifically, it would help: protect and conserve sensitive and
limited water resources, and reduce the losses due to network
inadequacies and inefficient utility operations; make a start in
improving roads, reducing traffic congestion, travel time, and
vehicle
operating costs; and improve the general quality of life for broad
segments of the population.  The project would also help
rationalize
and strengthen both central and local institutions; mobilize local
initiative and resources; improve resource allocation and open up
opportunities for private sector participation and development
through
consulting, contracting, and manufacturing inputs; and help lay the
foundation for sustainable development.  The benefits would accrue
to
virtually all citizens of WBG and particularly to low income

families.

Contact Point:      Public Information Center
                    The World Bank
                    1818 H Street N.W.
                    Washington D.C. 20433
                    Telephone No.: (202)458-5454
                    Fax No.: (202)522-1500
________

Note:  This is information on an evolving project.  Certain
components
may not necessarily be included in the final project.