AFRICAN DEVELOPMENT FUND

STUDY FOR NATIONAL TRANSPORT SECTOR MASTER PLAN UPDATE

COUNTRY : ANGOLA

OITC DEPARTMENT

August 2013

Appraisal Team

Regional Director : Mr. C. OJUKWU, ORSB

Sector Director : Mr. A. OUMAROU, OITC

Team Leader : Mr. T. HARADA

TABLE OF CONTENTS

I – STRATEGIC THRUST & RATIONALE ....................................................................... 1

1.1. Study linkages with country strategy and objectives ...................................................... 1

1.2. Rationale for Bank’s involvement .................................................................................. 1

1.3. Donors coordination ........................................................................................................ 2

II – STUDY DESCRIPTION .................................................................................................. 2

2.1. Background ..................................................................................................................... 2

2.2. Study objective ................................................................................................................ 3

2.3. Study components ........................................................................................................... 4

2.4. Technical solution retained and other alternatives explored ........................................... 4

2.5. Study type ....................................................................................................................... 4

2.6. Study cost and financing arrangements .......................................................................... 4

2.7. Study’s target area and population .................................................................................. 5

2.8. Participatory process for study identification, design and implementation .................... 6

2.9. Bank Group experience, lessons reflected in study design ............................................. 6

2.10.Key performance indicators ........................................................................................... 6

III – STUDY FEASIBILITY ................................................................................................... 6

3.1. Economic and financial performance ............................................................................. 6

3.2. Environmental and Social impacts .................................................................................. 6

IV – IMPLEMENTATION ..................................................................................................... 7

4.1. Implementation arrangements ......................................................................................... 7

4.2. Monitoring ...................................................................................................................... 8

4.3. Governance ..................................................................................................................... 8

4.4. Sustainability ................................................................................................................... 8

4.5. Risk management ............................................................................................................ 8

4.6. Knowledge building ........................................................................................................ 9

V – LEGAL INSTRUMENTS AND AUTHORITY ............................................................. 9

5.1. Legal instrument ............................................................................................................. 9

5.2. Conditions associated with Bank’s intervention ............................................................. 9

5.3. Compliance with Bank Policies ...................................................................................... 9

VI – RECOMMENDATION................................................................................................. 10

Appendix I. Country’s comparative socio-economic indicators

Appendix II. Table of ADB’s portfolio in the country

Appendix III. Key related projects financed by the Bank and other development partners in the

country

Appendix IV. Map of the Study Area

i

Currency Equivalents As of July 2013

Currency Unit = Angolan Kwanza (AON) UA 1.0 = AON 144.13

UA 1.0 = US$ 1.50

US$ 1.0 = AON 95.84

Fiscal Year

01 January – 31 December

Weights and Measures

1metric tonne = 2,204 pounds (lbs)

1 kilogramme (kg) = 2.200 lbs

1 metre (m) = 3.28 feet (ft)

1 millimetre (mm) = 0.03937 inch (“)

1 kilometre (km) = 0.62 mile

1 hectare (ha) = 2.471 acres

Acronyms and Abbreviations

ADB = African Development Bank

ADF = African Development Fund

CSP = Country Strategy Paper

CFB = Caminhos de Ferro de Benguela (Benguela Railway)

EU = European Union

GOA = Government of Angola

JICA = Japan International Cooperation Agency

Pre-F/S = Preliminary Feasibility Study

SADC = Southern African Development Community

TOR = Terms of Reference

UA = Unit of Account

USAID = United States Agency for International Development

ii

Loan Information

Client’s information

BORROWER : The Republic of Angola

EXECUTING AGENCY : Ministry of Transport

Financing plan

Source Amount (UA) Instrument

ADF 2.90 million Loan

Government of Angola 0.38 million Counterpart fund

TOTAL COST 3.28 million

ADB’s key financing information

Loan currency

UA

Interest type N/A

Interest rate spread 1%

Commitment fee 0.5%

Other fees 0.75% on the

amount disbursed

and outstanding

from time to time

Tenor 30 years

Grace period 8 years

FIRR, NPV (base case) N/A

EIRR (base case) N/A

Timeframe - Main Milestones (expected)

Concept Note approval

July 2012

Study approval September 2013

Effectiveness October 2013

Last Disbursement August 2016

Completion August 2015

iii

Study Summary

1. Study Overview

Study for National Transport Sector Master Plan Update comprises 2 components: 1)

National Transport Sector Master Plan Update incorporating existing plans and studies to a)

formulate an overall strategy and policy for the nationwide transport network, composed of

roads, railways, inland waterways, ports and airports in Angola, b) elaborate a nationwide

and integrated transport network for the future, connecting the existing transport

infrastructure, and c) identify and select priority projects with justifications, and 2)

Preliminary Feasibility Study (Pre-F/S) on the Railway Link between the existing railway

named “Caminhos de Ferro de Benguela (CFB)” and Zambia. An optimum route for a

railway link connecting CFB and Zambia among different options will be selected, based on

traffic data, natural, social and economic information, and environmental and social aspects,

as well as economic and financial analysis of the optimum route.

The first component will be completed within 15 months from the beginning of the

consultancy services, whereas the latter will take 6 months. The study will cost UA 3.28

million, of which UA 2.90 million will be an ADF loan.

The direct beneficiaries of the study are the Ministry of Transport and the Ministry of

Urbanism and Construction including the transport-related entities under the ministries.

The National Transport Sector Master Plan Update will enable the Government of Angola

(GOA) to timely and properly make decisions and take actions toward better transport

infrastructure and services, while the Pre-F/S on the Railway Link between CFB and Zambia

will provide a basis for the GOA’s next actions for development of the railway link, including

the private sector involvement.

2. Needs Assessment

The Bank’s intervention in the study is timely, because 1) Angola, at the final stage of

rehabilitation, is now urgently requiring new perspectives on a nationwide and integrated

transport network for the future, connecting the existing transport infrastructure, and 2) the

Pre-F/S on the Railway Link should be commenced as soon as possible in light of the

enhanced interests by the both governments of Angola and Zambia and the fact that some

studies have been already done on the Zambian side.

3. Bank’s Added Value

The Bank will be able to support the GOA in the study not only financially but also

technically, having experience of interventions in similar studies for other member countries.

Also, the Bank will be able to provide the GOA with advice for the Pre-F/S on the Railway

Link between CFB and Zambia, as it has on-going interventions in the transport sector in

Zambia.

4. Knowledge Management

The study will unveil the current situation of the transport sector in Angola which is not well

known so far, despite its importance in the regional context. The study is expected to identify

future Bank’s intervention, such as financing for priority projects to be identified in the

National Transport Sector Master Plan Update, as well as financing for the full-scale

feasibility study and detailed engineering design on the Railway Link between CFB and

Zambia whose TOR shall be elaborated by the Pre-F/S.

iv

Result-based Logical Framework

Country and study name: Angola – Study for National Transport Sector Master Plan Update

Purpose of the study : to carry out studies that will provide GOA with a clear vision of transport infrastructure development up to 2025

RESULTS CHAIN

PERFORMANCE INDICATORS MEANS OF

VERIFICAT

ION

RISKS/MITIGATI-ON MEASURES Indicator

(including CSI)

Baseline

[2012] Target

IMP

AC

T

Socio-economic development,

poverty reduction and regional

integration through an improved and

sustainable transport system

GDP growth rate

6.8%

(IMF

forecast)

7.5-8.5 %

(Target of the long-

term strategy “Angola

2025”)

[2015-2025]

GOA’s

statistics

Risk

Failure to allocate enough budgets to develop and

maintain the transport infrastructure

Mitigation measures

GOA’s efforts with the assistance of development

partners

OU

TC

OM

ES

GOA is capable to timely and

properly make decisions and take

actions for the transport sector

Institutional framework in

place to ensure transport

infrastructure development

based on the studies

None

Establishment of the

institutional

framework

[2015]

GOA’s

document

Risk

GOA’s decreasing commitment to implement the

outputs of the studies

Mitigation measures

Regular dialogue and follow-up by the Bank and

other development partners

OU

TP

UT

S

Component 1: National Transport

Sector Master Plan Update prepared

Component 2: the Preliminary

Feasibility Study on the Railway

Link completed

Study reports

None

Study reports

submitted and

approved

Component 1 [2015]

Component 2 [2014]

Study reports

produced

Risk

1. Delays in the procurement

2. Delays in the implementation, not meeting quality

standards

Mitigation measures

1. Realistic contract award plan

2. Precise ToR and efficient monitoring

KE

Y A

CT

IAV

ITIE

S

COMPONENTS INPUTS

Component 1: Preparing the National Transport Sector Master

Plan Update

Component 2: Carrying out the Preliminary Feasibility Study on

the Railway Link between CFB and Zambia

Component 3: Provision of the Technical Assistance

Component 4: Carrying out the Financial Audit

Costs (million UA)

Studies 2.66

Technical assistance 0.19

Financial audit 0.03

Base cost 2.88

Price escalation 0.40

Study cost 3.28

Sources of financing (million UA)

ADF Loan 2.90 [88%]

GOA 0.38 [12%]

Total 3.28 [100%]

v

Study Timeframe

Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct

Board Approval *

Signature of Loan Agreement *

GPN Publication *

TA (Procurement)

Shortlisting

Evaluation

Award of Contract *

Technical Assistance Services 1 2 1 2 3 19

Study

Shortlisting

Issuance of RFP *

Receipt of Proposals *

Evaluation of Proposals

Award of Contract *

Mobilization

Implementation of Study 1 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

TA (Study Management)

Shortlisting

Issuance of RFP *

Receipt of Proposals *

Evaluation of Proposals

Award of Contract *

Mobilization

Technical Assistance Services 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Financial Audit

Shortlisting

Issuance of RFP *

Receipt of Proposals *

Evaluation of Proposals

Award of Contract *

Mobilization

Financial Audit Services 1 2 3 4 5 6 7 8 9 10 11 12 13 14

TA: Technical Assistance

20152013 2014

1

REPORT AND RECOMMENDATION OF THE MANAGEMENT TO THE BOARD

OF DIRECTORS ON A PROPOSED LOAN TO THE REPUBLIC OF ANGOLA TO

FINANCE THE STUDY FOR NATIONAL TRANSPORT SECTOR MASTER PLAN

UPDATE

Management submits the following Report and Recommendation on a proposed loan for UA

2.9 million on loan to finance the Study for National Transport Sector Master Plan Update in

the Republic of Angola.

I. STRATEGIC THRUST & RATIONALE

1.1. Study linkages with country strategy and objectives

1.1.1 The strategic pillars of the Country Strategy Paper (CSP) 2011-2015 are Pillar I:

Stimulus to the Competitiveness of the economy and Pillar II: Support to Economic

Infrastructure Development. Transport is one of the two sectors which are given priority in

terms of financing infrastructure development. The outcome of the study will enable the

Government of Angola (GOA) to timely and properly make decisions and take actions for the

transport infrastructure development which will enhance the competitiveness of the economy

of Angola and the region. The study area including the railway link is identified in the CSP

2011-2015.

1.1.2 Angola does not have a Poverty Reduction Strategy Paper (PRSP) but launched a

long-term strategy named “Visão 2025” in 2010. Another long term vision named “Angola

2025”, published by the Ministry of Planning, articulates the vision of transport infrastructure

development: “construction of an integrated transport network at the national level based on a

comprehensive and integrated level of road, rail, maritime and air transport...”. The proposed

study is to elaborate a nationwide and integrated transport network for the future, connecting

the existing transport infrastructure, which is in line with the foregoing vision.

1.2. Rationale for Bank’s involvement

1.2.1 The Bank will be able to support the GOA in the studies not only financially but also

technically, having experience of interventions in similar studies for other member countries.

Also, the Bank will be able to provide the GOA with advice for the Preliminary Feasibility

Study (Pre-F/S) on the Railway Link between Caminhos de Ferro de Benguela (CFB) and

Zambia, as it has on-going interventions in the transport sector in Zambia. Close

communication between the Bank and the GOA through the presence of Angola Country

Office will be favourable for the smooth implementation of the studies.

1.2.2 The intervention in the studies is timely, because 1) Angola, at the final stage of

rehabilitation, is now urgently requiring new perspectives on a nationwide and integrated

transport network for the future, connecting the existing transport infrastructure; and 2) the

Pre-F/S on the Railway Link should be commenced as soon as possible in light of the

enhanced interests by the both governments of Angola and Zambia and the fact that some

studies have been already done on the Zambian side.

2

1.3. Donors coordination

1.3.1 The Bank has not yet provided support for the transport sector in Angola. The World

Bank financed a program named “Emergency Multi-sector Recovery – Phase2” which

includes rehabilitation of 150 km of trunk roads and 600km of feeder roads. EU financed the

“Feasibility Study Western Part TAH 9 Beira Lobito” including a feasibility study that covers

a 1,161-km road section on Lobito Corridor within Angola and the Democratic Republic of

Congo (DRC). JICA carried out a study to prepare a rehabilitation project in Port of Namibe,

including a preliminary design, implementation plan and cost estimates, based on which a

grant aid for development of a multi-purpose terminal is currently under consideration. Most

of the railway rehabilitation has been funded by China.

1.3.2 Donor activity in Angola has shifted in the last two years to an increased presence in

cross-cutting areas such as environment, decentralization, private sector development, and

regional integration. There is no formal donor coordination, but informal meetings are held

occasionally. A thematic Working Group meets when needed. With the opening of the

Bank’s Country Office in Angola, the Bank aims to play a bigger role in this Working Group.

Table 1.1

Overview of Major Donor Assistance in Angola

Sector or subsector*

Size

GDP Exports Labor Force

Transport N/A N/A N/A

Players - Public Annual Expenditure (2008-2011 average)**

Donors Amount(US$ mil.) %

EU 64.0 33.3

USAID 44.5 23.1

World Bank 35.8 18.6

Italy 26.2 13.6

Norway 21.9 11.4

Total 192.4 100.0

Level of Donor Coordination

Existence of Thematic Working Groups Y

Existence of SWAPs or Integrated Sector Approaches N

ADB's Involvement in donors coordination*** M****

* as most appropriate , ** The figures are for all sectors (the figure for the transport sector is not

available), *** for this sector or sub-sector, **** L: leader, M: member but not leader, none: no

involvement

II STUDY DESCRIPTION

2.1. Background

2.1.1 Transport sector in Angola: After 27 years of conflict that ended in 2002, political

stability and peace set the ground for an economic boom in Angola fuelled by increased oil

production. The increasing revenues have enabled Angola to intensively rehabilitate its

transport infrastructure, namely roads, railways, ports and airports up to now. However,

Angola is still facing shortage of transport infrastructure and low service quality despite the

intensive rehabilitation. Thus, it seems to be reaching a turning point from the era of

3

rehabilitation of deteriorated infrastructure into the era of development of infrastructure

required for the country’s further economic growth in future.

2.1.2 Needs of a master plan for the transport sector: The recent rehabilitation of

transport infrastructure has been implemented based on the Public Investment Plan (PIP) with

a list of a number of facilities to be rehabilitated. However, the transport infrastructure

development in Angola from now on will not be the same as the rehabilitation which was to

return the existing infrastructure once deteriorated to its previous condition. It should be well

planned and implemented with a clear strategy, priority and justification based on thorough

surveys and analysis, with which GOA will effectively allocate the state budget, induce the

private sector’s investment, and obtain the development partners’ fund as needed. In addition

to transport infrastructure development, it is required to improve the transport service and its

sustainability by addressing various issues, such as transport safety, road maintenance, the

serious traffic jam in Luanda and so on. One of the major reasons why the transport sector is

still facing a lot of problems despite the country’s considerably high economic indices is

limited capacity of government institutions. For the reasons above, an integrated national

transport sector master plan, built on existing plans and studies, is highly required,

highlighting improvement in the transport infrastructure and services, so that GOA will be

able to timely and properly make decisions and take actions for the transport sector.

2.1.3 Railway link between CFB and Zambia: CFB is a railway connecting Port of

Lobito and a DRC border named Luau. Currently, the section between Lobito and Huambo is

operational, whereas the remaining section is under rehabilitation and will be operational by

the end of 2013. GOA and Government of Zambia (GOZ) intend to establish a direct railway

link between CFB and an existing railway in Zambia, whose length will be roughly 300 km

in Angola and 554 km in Zambia. The railway link, which would boost the growth of Port of

Lobito, facilitate Zambia to export its mineral resources through an alternative route, as well

as facilitate Angola to export its oil products from Lobito to Zambia, is a very important and

urgent issue for Angola in the light of the political commitment where the Lobito Corridor

development has reached an advanced consensus between the two governments. However, no

study has been carried out so far on the Angolan side, whereas in Zambia a concessionaire

has already carried out a pre-feasibility study on some sections within the missing link. In this

situation, GOA is now very keen on a study on the railway link, so as to have a basis for the

GOA’s next actions for development of the railway link, including the private sector

involvement.

2.1.4 It is on this basis that GOA requested the Bank in December 2012 for assistance in

carrying out a study to prepare an updated National Transport Sector Master Plan as well as a

preliminary feasibility study on the railway link between CFB and Zambia.

2.2. Study objective

The study objective is to provide GOA with an integrated master plan built on

existing plans and studies with a clear strategy, priority and justification in terms of transport

infrastructure development including the Railway Link between CFB and Zambia, so that

GOA can have a clear vision of infrastructure development up to 2025, the target year of the

“Visão 2025”.

4

2.3. Study components

The study components are summarized below:

Table 2.1

Study Components

No. Component Name Estimated

Cost

(UA mil.)

Component Description

1 National Transport

Sector Master Plan

Update

2.14 formulate an overall set of strategies and policies for the

nationwide transport network, composed of roads, railways,

inland waterways, ports and airports

elaborate a nationwide and integrated transport network for

the future, connecting the existing transport infrastructure,

along the strategies and policies mentioned above, and

identify and select priority projects with justifications

2 Pre-F/S on the

Railway Link between

CFB and Zambia

0.52 select an optimum route for a railway link connecting CFB

and Zambia among different options, based on traffic data,

natural, social and economic information, and

environmental and social aspects, as well as economic and

financial analysis of the optimum route

3 Technical Assistance 0.19 [Procurement] assist the executing agency in procurement

process for the study

[Study management] assist the executing agency in

monitoring study activities and reviewing various reports

prepared

4 Financial Audit

0.03 An audit by external independent auditors to express an

opinion on the financial statements provided to the Bank

and provide reasonable assurance that the funds have been

applied for the intended purposes with due attention to

economy and efficiency

2.4. Technical solution retained and other alternatives explored

The proposed study will provide GOA with tools for making decisions and taking

actions required for improvement of transport infrastructure and services.

2.5. Study type

The study is a standalone operation that will be financed by a loan from the ADF,

through the lending facilities of the Bank's windows for performance-based country

allocations (PBA).

2.6. Study cost and financing arrangements

2.6.1 The estimated cost of the study, net of taxes and customs duty, will amount to UA

3.28 million, of which UA 2.94 million (90% of the study cost) payable in foreign currency

and UA 0.34 million (10% of the study cost) payable in local currency. This cost includes

13.7% provision for price escalation. It was estimated on the basis of the unit prices of similar

studies approved lately by the ADF. The estimated study cost is summarized in Table 2.2.

2.6.2 The study will be financed by the ADF and GOA. ADF financing will not exceed UA

2.90 million. This financing represents 88% of the total cost and will cover 98% of the

foreign currency cost and 3% of the local currency cost. ADF financing will cover the

financial audit and part of the expenditure on the study 1, study 2 and the technical assistance.

GOA will contribute UA 0.38 million to study financing, representing 12% of the total cost

and will cover 2% of the foreign currency cost and 97% of the local currency cost. The

contribution of GOA will cover part of the expenditure on the study 1 and 2 and the technical

assistance.

5

Table 2.2

Study Cost Estimates by Component [amounts in million UA equivalents]

Components

Foreign

Currency

Costs

Local

Currency

Costs

Total

Costs % Foreign

Study1 - National Transport Sector Master Plan Update 1.91 0.23 2.14 89%

Study2 - Pre-F/S on the Railway Link between CFB

and Zambia

0.46 0.06 0.52 88%

Technical Assistance 0.18 0.01 0.19 95%

Financial audit 0.03 0.00 0.03 100%

Total Base Cost 2.58 0.30 2.88 90%

Price Contingency 0.36 0.04 0.40 90%

Total Study Cost 2.94 0.34 3.28 90%

Note: Exchange rates are provided in the introduction of this report (page (i)).

Table 2.3

Sources of financing [amounts in million UA equivalents]

Sources of Financing

Foreign

Currency

Costs

Local

Currency

Costs

Total Costs % Total

ADF Loan 2.89 0.01 2.90 88%

GOA 0.05 0.33 0.38 12%

Total 2.94 0.34 3.28 100%

2.6.3 The study cost by category of expenditure and the expenditure schedule are shown in

Table 2.4 and 2.5 below respectively.

Table 2.4

Study cost by category of expenditure [amounts in million UA equivalents]

Categories of

expenditure

Foreign

Currency

Costs

Local

Currency

Costs

Total Costs % Foreign

Consultancy Services 2.58 0.29 2.87 90%

Goods - 0.01 0.01 0%

Total base cost 2.58 0.30 2.88 90%

Price Contingency 0.36 0.04 0.40 90%

Total study cost 2.94 0.34 3.28 90%

Table 2.5

Expenditure schedule by component [amounts in million UA equivalents]

Components 2014 2015 Total

Study 1.33 1.33 2.66

Technical Assistance 0.10 0.09 0.19

Financial Audit 0.01 0.02 0.03

Total base cost 1.44 1.44 2.88

2.7. Study’s target area and population

Since the study will deal with the whole national transport sector of Angola, the study

area is the entire country and the direct study beneficiaries is the Angolan nation who will

enjoy the transport infrastructure and services to be developed and improved based on the

outcomes of the study.

6

2.8. Participatory process for study identification, design and

implementation

The transport-related private sector was interviewed and their views and opinions

have been incorporated in the study components and the implementation arrangement. The

study will require significant consultation especially about project priority and environmental

and social aspects, through workshops and public consultations with all relevant stakeholders.

The working group to be mentioned in 4.1.2 will be responsible for facilitating all workshops

and public consultations.

2.9. Bank Group experience, lessons reflected in study design

2.9.1 Some of the lessons learned pointed out in the current CSP were reflected in the study

preparation and design. Regarding the “limited Government interest, capacity and ownership”

mentioned in the CSP, the mission team met high officials of the Ministry of Transport and

the Ministry of Planning, including the ministers, and confirmed that the study was urgent

and of a matter of great interest to GOA.

2.9.2 For the counterpart funds issue, the mission team met the Ministry of Planning and

explained the counterpart fund required for this study. On the other hand, the mission team

confirmed with the Ministry of Transport, the executing agency, that the ministry would take

necessary action to secure the counterpart fund registering under the Public Investment Plan

(PIP).

2.9.3 As for the dissemination of the Bank’s procedures to GOA officials, the Bank will

have to elaborately explain and disseminate the Bank’s procedures to the executing agency,

since the study will be the first intervention of the Bank in the transport sector in Angola.

2.10. Key performance indicators

The key performance indicators and expected outcomes upon study completion are

indicated in the results-based logical framework. The indicators for the impact and outcomes

are: i) the GDP growth rate as a measure of “Socio-economic development, poverty reduction

and regional integration through an improved and sustainable transport system” and ii)

Establishment of the institutional framework, such as an inter-ministerial committee, to

ensure transport infrastructure development based on the National Transport Sector Master

Plan Update and Pre-F/S on the Railway Link between CFB and Zambia, as the capability to

timely and properly make decisions and take actions for the transport sector. These indicators

will be followed and evaluated during the study implementation based on economic reports

and GOA’s documents.

III STUDY FEASIBILITY

3.1. Economic and financial performance

Not applicable in case of study in case of study, but economic and financial analysis

will be considered in the Study for National Transport Sector Master Plan Update in

particular the pre-F/S on the railway link between CFB and Zambia.

3.2. Environmental and Social impacts

Environment

3.2.1 The category of the Bank’s environmental and social assessment procedures is not

applicable for studies.

7

3.2.2 Environmental aspects related to priority projects will be considered in the National

Transport Sector Master Plan Update. During the Pre-F/S on the Railway Link between CFB

and Zambia, environmental aspects will be identified, if any, for each optional route of the

railway link. Also, the Pre-F/S will elaborate Terms of Reference (TOR) for ESIA to be

carried out during the full-scale feasibility study subsequent to the Pre-F/S.

Climate change

3.2.3 National Transport Sector Master Plan Update will refer to how climate change

(mitigation and adaptation) is being and should be addressed in the transport sector. The Pre-

F/S on the Railway Link between CFB and Zambia will identify some components related to

climate change resilience to be addressed in the full-scale feasibility study for the railway link.

Gender / Social / Involuntary resettlement

3.2.4 Gender/social/resettlement issues related to priority projects will be considered in the

National Transport Sector Master Plan Update. During the Pre-F/S on the Railway Link

between CFB and Zambia, gender/social/resettlement issues will be identified, if any, for

each optional route of the railway link. Also, the Pre-F/S will elaborate TOR for ESIA and

RAP to be carried out during the full-scale feasibility study subsequent to the Pre-F/S.

IV IMPLEMENTATION

4.1. Implementation arrangements

Study implementation

4.1.1 Ministry of Transport will be the executing agency for the study. Gabinete de Estudos,

Planeamento e Estatistica (GEPE), Ministry of Transport, will be the focal point liaising with

the consultants and the Bank. A Study Coordinator with the relevant experience who is

responsible for the day-to-day management of the studies shall be nominated. Technical

assistance by a consultant to be hired under ADF, who assists the executing agency in

monitoring study activities and reviewing various reports prepared, will be provided to

address the capacity constraint. To address the capacity constraint in the area of procurement

management a procurement specialist would be recruited under ADF. The Ministry of

Transport shall designate a suitably qualified officer to handle financial management aspects

of the study.

4.1.2 A working group comprising various authorities and entities involved in road, rail,

inland waterways, maritime and air transport sectors including the private sector, will be

established. The working group will be responsible for providing technical guidance on the

study, monitoring the implementation of the study, reviewing the consultant’s reports and

facilitating the consultant’s activities. The GEPE will be the secretariat for the study, and will

lead the working group.

Procurement

4.1.3 All procurement of goods and works and acquisition of consulting services financed by

the Bank will be in accordance with the Bank's Rules and Procedure for Procurement of Goods

and Works(May 2008 edition, revised July 2012) and Rules and Procedure for the Use of

Consultants (May 2008 edition, revised July 2012), using the relevant Bank Standard Bidding

Documents. The Ministry of Transport, through GEPE as focal point, will be responsible for

the procurement of goods and consulting services. A detailed procurement arrangement is

shown in Technical Annex IV.

8

Disbursement

4.1.4 The Direct Payment method shall be used to disburse funds, i.e, the consultancy services

for the study, the technical assistance consultant, the external auditors and suppliers of identified

IT equipment (computers and printers) shall be paid directly by ADF upon requisite of all

necessary documentation.

Financial audit

4.1.5 Study financial statements shall be prepared and audited on annual basis. The audit

shall be conducted in accordance with Bank approved auditor TOR, and the audited study

financial statements shall be submitted within 6 months after year end.

4.2. Monitoring

4.2.1 Monitoring will comprise technical monitoring conducted by GEPE and the working

group mentioned in 4.1.2, supplemented with an individual consultant (technical assistance

for study management and monitoring) and supervision missions from the Bank. The

timeframe is as shown below.

Timeframe Milestone Monitoring Process /

Feedback loop

Q3-2013 Study launch Launching mission

Q1/Q3-2014

Q1-2015 Study works Supervision missions

Q3-2015 Study completion Project Completion Report

4.3. Governance

In the current CSP, “civil society access to information on public affairs” is raised as

one of the governance issues, although the CSP recognizes improvements in it. This study

will further improve the civil society access to information on public affairs by improving the

transport statistics.

4.4. Sustainability

4.4.1 It is recommended that the Bank maintain a dialogue with GOA concerning the

establishment of the institutional framework such as an inter-ministerial committee, as well

as endorsement of the outputs of National Transport Sector Master Plan Update as GOA’s

official master plan, to ensure transport infrastructure development based on this study.

4.4.2 It is recommended that the sector department of the Bank review the outputs of the

Pre-F/S on the Railway Link between CFB and Zambia upon its completion, and prepare as

appropriate for the Bank’s funding for a full-scale feasibility study and detailed engineering

design on the railway link, so that GOA will be able to proceed to the next step by fully

making use of the results of this study.

4.5. Risk management

4.5.1 There is a risk of GOA not committing adequate budget to develop and maintain the transport infrastructure as per the recommendations of the studies. As mitigation measures, GOA is expected to continue to give the transport sector high priority, as well as seek funds from development partners as necessary.

9

4.5.2 There is a risk of GOA underutilizing the outputs of the studies although GOA has demonstrated its commitment to develop the transport sector. As mitigation measures, the Bank together with other development partners will maintain regular dialogue with GOA and encourage to set up an institutional framework within the government to be responsible for the implementation of the study output. In addition, the participation of stakeholders in the Study for National Transport Sector Master Plan Update will ensure the ownership and mitigate this risk.

4.5.3 There is a risk of delays in the procurement and implementation of the studies, due to limited capacity of executing agency and poorly qualified consultants. As mitigation measures, technical assistance is included as a component. Also, GOA needs to prepare precise TOR, carefully evaluate the technical proposals by candidate consultants, and efficiently monitor the study progress, supported by the Bank as needed.

4.6. Knowledge building

The Study for National Transport Sector Master Plan Update will unveil the current

situation of the transport sector in Angola which is not well known so far, despite its

importance in the regional context. Although the Bank has not undertaken sector intervention

in Angola, the study, as an upstream activity, is expected to identify future Bank’s

intervention, such as financing for priority projects to be identified in the National Transport

Sector Master Plan Update as well as financing for the full-scale feasibility study and detailed

engineering design on the Railway Link between CFB and Zambia whose TOR shall be

elaborated by the Pre-F/S.

V LEGAL INSTRUMENTS AND AUTHORITY

5.1. Legal instrument

The project will be financed pursuant to an ADF loan agreement between the

Republic of Angola and the ADF.

5.2. Conditions associated with Bank’s intervention

Conditions Precedent to the Entry into Force of the Loan Agreement

5.2.1 The Loan Agreement will enter into force upon fulfillment by the Borrower of the

provisions of Section 12.01 of the General Conditions.

Conditions Precedent to First Disbursement of the Loan

5.2.2 The obligation of the Bank to make the first disbursement of the Loan shall be

conditional upon the entry into force of Loan Agreement and the fulfillment by the Borrower,

in form and substance satisfactory to the Fund, of the following conditions:

(i) Provide evidence of the appointment of the study coordinator, whose qualifications

and experience shall be acceptable to the Fund; and

(ii) Provide evidence of the designation of a suitable officer to handle financial

reporting, whose qualifications and experience shall be acceptable to the Fund.

5.3. Compliance with Bank Policies

This study complies with all applicable Bank policies.

10

VI RECOMMENDATION

This study is to facilitate the Government of Angola’s sound administration, decision-

making and timely action for development of transport infrastructure that is crucial for further

economic growth of the country which is now transitioning from the infrastructure

rehabilitation phase to the new development phase. Moreover, this study, which will be an

entry point for the Bank’s intervention in the transport sector in Angola, may identify

transport infrastructure projects for further Bank’s intervention.

Management therefore recommends that the Board of Directors approve the proposed

ADF loan of UA 2.90 million to the Republic of Angola for the purposes and subject to the

conditions stipulated in this report.

I

Appendix I. Country’s comparative socio-economic indicators

Year Angola Africa

Develo-

ping

Countries

Develo-

ped

Countries

Basic Indicators

Area ( '000 Km²) 2011 1,247 30,323 98,458 35,811Total Population (millions) 2012 20.2 1,070.1 5,807.6 1,244.6Urban Population (% of Total) 2012 60.2 40.8 46.0 75.7Population Density (per Km²) 2012 15.7 34.5 70.0 23.4GNI per Capita (US $) 2011 4 060 1 609 3 304 38 657Labor Force Participation - Total (%) 2012 36.6 37.8 68.7 71.7Labor Force Participation - Female (%) 2012 45.8 42.5 39.1 43.9Gender -Related Dev elopment Index Value 2005-2011 0.439 0.502 0.694 0.911Human Dev elop. Index (Rank among 186 countries) 2012 148 ... ... ...Popul. Liv ing Below $ 1.25 a Day (% of Population)2000-2011 54.3 40.0 22.4 ...

Demographic Indicators

Population Grow th Rate - Total (%) 2012 2.7 2.3 1.3 0.3Population Grow th Rate - Urban (%) 2012 4.1 3.4 2.3 0.7Population < 15 y ears (%) 2012 45.9 40.0 28.5 16.6Population >= 65 y ears (%) 2012 2.5 3.6 6.0 16.5Dependency Ratio (%) 2012 93.9 77.3 52.5 49.3Sex Ratio (per 100 female) 2012 98.2 100.0 103.4 94.7Female Population 15-49 y ears (% of total population) 2012 23.0 49.8 53.2 45.5Life Ex pectancy at Birth - Total (y ears) 2012 51.5 58.1 67.3 77.9Life Ex pectancy at Birth - Female (y ears) 2012 53.0 59.1 69.2 81.2Crude Birth Rate (per 1,000) 2012 40.2 33.3 20.9 11.4Crude Death Rate (per 1,000) 2012 13.7 10.9 7.8 10.1Infant Mortality Rate (per 1,000) 2012 96.8 71.4 46.4 6.0Child Mortality Rate (per 1,000) 2012 156.6 111.3 66.7 7.8Total Fertility Rate (per w oman) 2012 5.2 4.2 2.6 1.7Maternal Mortality Rate (per 100,000) 2010 450.0 417.8 230.0 13.7Women Using Contraception (%) 2012 14.4 31.6 62.4 71.4

Health & Nutrition Indicators

Phy sicians (per 100,000 people) 2004-2010 8.0 49.2 112.2 276.2Nurses (per 100,000 people)* 2004-2009 135.0 134.7 187.6 730.7Births attended by Trained Health Personnel (%) 2007-2010 47.3 53.7 65.4 ...Access to Safe Water (% of Population) 2010 51.0 67.3 86.4 99.5Access to Health Serv ices (% of Population) 2000 24.0 65.2 80.0 100.0Access to Sanitation (% of Population) 2010 58.0 39.8 56.2 99.9Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2011 2.1 4.6 0.9 0.4Incidence of Tuberculosis (per 100,000) 2011 310.0 234.6 146.0 14.0Child Immunization Against Tuberculosis (%) 2011 88.0 81.6 83.9 95.4Child Immunization Against Measles (%) 2011 88.0 76.5 83.7 93.0Underw eight Children (% of children under 5 y ears) 2007-2011 15.6 19.8 17.4 1.7Daily Calorie Supply per Capita 2009 2 079 2 481 2 675 3 285Public Ex penditure on Health (as % of GDP) 2010 2.9 5.9 2.9 8.2

Education Indicators

Gross Enrolment Ratio (%)

Primary School - Total 2010-2012 124.5 101.9 103.1 106.6 Primary School - Female 2010-2012 111.6 98.4 105.1 102.8 Secondary School - Total 2010-2012 31.3 42.3 66.3 101.5 Secondary School - Female 2010-2012 25.5 38.5 65.0 101.4Primary School Female Teaching Staff (% of Total) 1998-2011 24.5 43.2 58.6 80.0Adult literacy Rate - Total (%) 2010 70.1 67.0 80.8 98.3Adult literacy Rate - Male (%) 2010 82.7 75.8 86.4 98.7Adult literacy Rate - Female (%) 2010 58.1 58.4 75.5 97.9Percentage of GDP Spent on Education 2008-2010 3.5 5.3 3.9 5.2

Environmental Indicators

Land Use (Arable Land as % of Total Land Area) 2011 3.3 7.6 10.7 10.8Annual Rate of Deforestation (%) 2000-2009 0.2 0.6 0.4 -0.2Forest (As % of Land Area) 2011 46.8 23.0 28.7 40.4Per Capita CO2 Emissions (metric tons) 2009 1.4 1.2 3.1 11.4

Sources : AfDB 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.

May 2013

0

20

40

60

80

100

120

2004

2005

2006

2007

2008

2009

2010

2011

2012

Infant Mortality Rate( Per 1000 )

Angola Africa

0

500

1000

1500

2000

2500

3000

3500

4000

450020

03

2004

2005

2006

2007

2008

2009

2010

2011

GNI Per Capita US $

Angola Africa

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2004

2005

2006

2007

2008

2009

2010

2011

2012

Population Growth Rate (%)

Angola Africa

1

11

21

31

41

51

61

71

2004

2005

2006

2007

2008

2009

2010

2011

2012

Life Expectancy at Birth (years)

Angola Africa

II

Appendix II. Table of ADB’s portfolio in the country

On-Going Portfolio In Angola (UA millions)

PROJECT SECTOR APPROVAL

DATE

EFFECTIVE

DATE

CLOSING

DATE

TOTAL

COST

TOTAL

DISBU

RSED

%

DISBUR

SEMEN

T

Bom Jesus Calenga Rural

Development Project

P-AO-A00-001

Agriculture

and Rural

Development

24/11/2005 14/09/2006 31/12/2012 17.20 7.8 45.66%

Environmental Sector

Support Project

P-AO-CZO-001

Environment 11/03/2009 17/12/2009 31/12/2015 12.00 2.2 18.46%

Financial Support

Management Project

P-AO-KFO-002

Finance 14/11/2007 04/09/2008 31/12/2012 5.90 0.4 7.81%

Sumbe Water Supply

Sanitation And

Institutional Support

Project

P-AO-E00-003

Water and

Sanitation 28/11/2007 04/04/2009 30/06/2013 12.00 0.7 6.10%

Institutional Capacity

Building Poverty

Reduction Project

Governance 23/02/2011 May 2011 30/07/2013 5.17 0.2 4.17%

GRAND TOTAL COMMITMENT 52.27 11.04 16.44%

III

Appendix III. Key related projects financed by the Bank and other

development partners in the country

(1) Study on Urgent Rehabilitation Program of Ports: JICA (2005 - 2006)

A study team conducted surveys and compiled a report, which proposed a short term port

rehabilitation plan for 2010, an urgent rehabilitation program of port facilities, and an

action program for the improvement of port management and operation. The study report

concluded with a variety of recommendations such as: (a) rehabilitation and

modernization of ports, (b) strengthening port administration, management and operation,

(c) future development of Port of Luanda, and (d) preparation of Master Plan of Angolan

Ports.

(2) Grant Aid for Urgent Rehabilitation of Ports in Angola: Japan (2008-2010)

Development of a multi-purpose terminal as the urgent rehabilitation program in Port of

Namibe based on the above study.

(3) Angola Emergency Multi-sector Recovery – Phase 2 : The World Bank

(Effective in 2008 – Closing in 2013)

A program to assist the government to: (a) facilitate agricultural marketing in specific

areas with high agricultural potential that have been affected by the conflict, (b)

reconstruct and rehabilitate critical infrastructure, and (c) strengthen capacity of

participating ministries and agencies for improved governance and transparency and of

local governments for future decentralization. The program includes rehabilitation of

150km of trunk roads and 600km of feeder roads, and Sector Strategy (Water, Power and

Transport) to be produced by the ministries involved.

(4) Preparatory Study on Namibe Port Rehabilitation: JICA (2010 –2011)

A study to prepare a rehabilitation project in Port of Namibe, including a preliminary

design, implementation plan and cost estimates. A grant aid for development of a multi-

purpose terminal is under consideration.

(5) Feasibility Study Western Part TAH 9 Beira Lobito: EU (2011 –2012)

This study is composed of (a) feasibility study of the selected road sections including

comprehensive environmental and social impact report, (b) recommendation for trade and

transport facilitation measures for the corridor, (c) recommendation for program to

implement regionally approved standards, policy and financing system of road

maintenance in the region and for vehicle and axle load regulations and management, (d)

development of a proper structured infrastructure database for the SADC region. The

feasibility study covers the road section Kuito – Luena – Luau – Angola/DRC border –

Mutshatsha – Kolwezi (1,161 km) .

IV

Appendix IV. Map of the Study Area

Source: Country Report – Angola, March 2012, Economic Intelligence Unit

CFB Railway Link