Document of The World Bank

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. I t s contents may not otherwise be disclosed without World Bank authorization. J

FOR OFFICIAL USE ONLY

Report No: 32173 - TR

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED LOAN

IN THE AMOUNT OF EURO 310 MILLION (US$400 MILLION EQUIVALENT)

TO THE

REPUBLIC OF TURKEY

FOR AN

ISTANBUL SEISMIC R I S K MITIGATION AND EMERGENCY PREPAREDNESS PROJECT

April 29,2005

Environmentally and Socially Sustainable Development Unit Europe and Central Asia Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective April 18,2005) t

M O M AYM CAS C B EC E C A EIA EMP EMPI ERR FEMA FMR GNP GDCD GIS GO1 IBRD I C B I F I S

IGDAS IMM P C U I S K I ISPA JICA MDG MEER M&E MPWS N C B NGO P C N

Currency Unit = Turkish New Lira

US$ 1 = TNLR 1.37

U S $ l = EURO0.78

TNLR 1 = US$O.73

EURO 1 = US$1.29

FISCAL YEAR January 1 - December31

ABBREVIATIONS AND ACRONYMS Istanbul Metropolitan Disaster Coordination Center Istanbul Governorship Disaster Management Center Country Assistance Strategy CostBenefit Ratio European Commission Europe and Central Asia Region Environmental Impact Assessment Environmental Management .Plan Earthquake Mit igation Master Plan for Istanbul Economic Rate o f Return U.S. Federal Emergency Management Agency Financial Monitoring Report Gross National Product General Directorate for C iv i l Defense Geographic Information System Govemorship o f Istanbul International Bank for Reconstruction and Development International Competitive Bidding Intemational Financial Institutions Istanbul Gas Distribution Corporation Istanbul Metropolitan Municipality Istanbul Project Coordination Unit Istanbul Water and Sewage Company Istanbul Special Provincial Administration Japan International Cooperation Agency Millennium Development Goals Marmara Earthquake Emergency Reconstruction Project Monitoring and Evaluation Ministry o f Public Works and Settlements National Competitive Bidding Non-governmental Organization Project Concept Note

I

FOR OFFICIAL USE ONLY

PMS Project Monitoring System SDC SPO State Planning Organization S I L Specific Investment Loan TCA Turkish Court o f Accounts TEMAD

Swiss Agency for Development and Cooperation

Turkish Emergency Management General Directorate

Vice President: Shigeo Katsu Country Director: Andrew N. Vorkink

Sector Manager: Joseph R.Goldberg Task Team Leader: Wael Zakout

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. I t s contents may not be otherwise disclosed without Wor ld Bank authorization.

TURKEY SEISMIC RISK MITIGATION-TR

CONTENTS

Page

A . STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 Country and sector issues .......... 1 ......................................................................................... 1

Rationale for Bank involvement ......................................................................................... 2

Higher level objectives to which the project contributes .................................................... 3

1 . 2 . 3 .

B . PROJECT DESCRIPTION ................................................................................................. 3 Lending instrument ............................................................................................................. 3

Program objective and Phases ............................................................................................ 3

Project development objective and key indicators .............................................................. 4

1 . 2 . 3 . 4 . 5 . 6 .

Project components ....................................................................................................... .. ..... 4

Alternatives considered and reasons for rejection .............................................................. 6

Lessons learned and reflected in the project design ............................................................ 5

C . IMPLEMENTATION .......................................................................................................... 7 Partnership arrangements ................................................................................................... 7 1 .

2 . 3 . 4 . Sustainability ....................................................................................................................... 8

5 . Critical r isks and possible controversial aspects ................................................................. 9

6 . Loadcredit conditions and covenants ............................................................................... 10

Institutional and implementation arrangements .................................................................. 7 Monitoring and evaluation o f outcomeshesults .................................................................. 8

. . .

D . APPRAISAL SUMMARY ................................................................................................. 10

1 . Economic and financial analyses ...................................................................................... 10

2 . Technical ........................................................................................................................... 11

3 . Fiduciary ........................................................................................................................... 12

4 . Social ................................................................................................................................. 13 5 . Environment ...................................................................................................................... 14

Safeguard policies ............................................................................. : ............................... 14

Policy Exceptions and Readiness ...................................................................................... 15

Annex 1: Country and Sector or Program Background ......................................................... 16

6 . 7 .

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ................. 22

Annex 3: Results Framework and Monitoring ........................................................................ 24

Annex 4: Detailed Project Description ...................................................................................... 28

Annex 5: Project Costs ............................................................................................................... 44

Annex 6: Implementation Arrangements ................................................................................. 45

Annex 7: Financial Management and Disbursement Arrangements ..................................... 48

Annex 8: Procurement Arrangement ........................................................................................ 55

Annex 9: Economic and Financial Analysis ............................................................................. 62

Annex 10: Safeguard Policy Issues ............................................................................................ 62

Annex 11: Project Preparation and Supervision ..................................................................... 74

Annex 12: Documents in the Project File ................................................................................. 76

Annex 13: Statement of Loans and Credits .............................................................................. 77

Annex 14: Country at a Glance ................................................................................................. 80

Map TBRD34015

TURKEY

Source BORROWER INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

SEISMIC RISK MITIGATION-TR

Local Foreign Tota l 0.00 0.00 0.00

306.02 93.98 400.00

PROJECT APPRAISAL DOCUMENT

Total:

EUROPE AND CENTRAL ASIA

306.02 93.98 400.00

ECSSD

Date: April 29,2005 Country Director: Andrew N. Vorkink Sector Managermirector: Joseph R. Goldberg

Team Leader: Wael Zakout Sectors : Sub-national government administration (40%); Information technology (30%); Health (1 5%); General education sector (15%) Themes: Natural disaster management (P);Municipal governance and institution building (S)

Project ID: PO78359 Environmental screening category: Partial Assessment

Lending Instrument: Specific Investment Loan Safeguard screening category: Limited impact Project Financing Data

[XI Loan [ ]Credit [ ]Grant [ ]Guarantee [ ] Other:

For Loans/Credits/Others: Total Bank financing: Euro 3 10.00 mi l l ion (US$400.00 mi l l ion equivalent) Proposed terms: Variable-Spread Single Currency Loan denominated in EURO Grace period (years) 4 Years to maturity: 17 Commitment Fee: 0.75% Front end fee (FEF) on Bank loans: 1% (less any waiver)

Borrower: Republic o f Turkey

Responsible Agency: Istanbul Special Provincial Administration

Y 2006 m u a l 46.96 hmulative 46.96

Project description [one-sentence summary of each component] Re$ PAD B.3.a, Technical Annex 4

2007 2008 2009 2010 2011 89.39 100.22 89.47 56.22 17.74

136.35 236.57 326.04 382.26 400.00

Component A: Enhancing Emergency Preparedness This component wi l l enhance the effectiveness and capacity o f the provincial and municipal public safety organizations in Istanbul to prepare for, respond to and recover from significant emergencies, especially those arising from earthquakes.

Component B: Seismic Risk Mitigation for Public Facilities This component wi l l reduce the risk o f future earthquake damage to critical facilities in order tc save lives and ensure their continued hnct ioning in the event o f an earthquake, througl! retrofitting o f hospitals, schools and other priori ty public facilities.

Component C: Enforcement o f Building Codes This component wil l support innovative approaches to better enforcement o f building code and compliance with land use plans.

Component D: Project Management This component wi l l support the Istanbul Provincial Administration to implement the project ir efficient and transparent manner, and build the institutional capacity to sustain tht

implementation o f Seismic Risk Mitigation and Preparedness program beyond the l i f e o f the project.

Which safeguard policies are triggered, if any? Re$ PAD 0.6, Technical Annex 10 Environmental Assessment

Cultural Property

Significant, non-standard conditions, if any, for: Re$ PAD C.7 Board presentation: M a y 26,2005

Loadcredit effectiveness: August 10,2005

Covenants applicable to project implementation:

- Maximum funds for re-construction o f buildings will be limited to 20% o f allocation for c iv i l works. Reconstruction o f buildings wil l require Bank no-objection (Schedule 5; para 5)

- The I P C U will submit an annual work plan and budget for Bank review and comments by August 31 each year. (Schedule 5; para 7a)

- The I P C U will update a procurement plan in accordance to guidelines acceptable to the Bank, and furnish such update to the Bank not later than 6 months after the date o f the preceding Procurement Plan, for the Bank’s approval (Article 111; section 3.03b)

- The IPCU wil l submit to the project Steering Committee and the Bank a progress report by March 31 and September 30 o f each year, starting March 31, 2006. (Schedule 5, para 7a)

- The IPCU wil l prepare the mid-term review report by March 3 1, 2008 and facilitate the mid-term review o f the project by M a y 30,2008. (Schedule 5; para 8)

A. STRATEGIC CONTEXT AND RATIONALE 1. Country and sector issues

Turkey i s highly vulnerable to natural disasters, particularly earthquakes. In the 1999 Marmara earthquakes, the death to l l reached over 17,000 with a direct economic impact estimated at about US$5 billion, or around 2.5 percent o f GIW. Within the nation’s high-risk context, Istanbul i s most vulnerable because o f its seismic-prone location on the Nor th Anatolian Fault, and i t s high population and commercialhdustrial densities. According to recent assessments carried out by JICA (Japan International Cooperation Agency) experts’, the probability o f a major earthquake affecting Istanbul in the next 30 years i s 62% & 12%, while the likelihood o f such a devastation in the next decade i s 32% & 12%. This i s roughly comparable to the risk faced by Los Angeles and San Francisco, but with a damage potential that i s much higher because o f Istanbul’s greater structural vulnerabilities. If a seismic event o f the same magnitude as that in 1999 were to occur near Istanbul, the human suffering as wel l as the social, economic, and environmental impacts would be dramatically higher than in the Marmara region, as Istanbul i s not only the financial, cultural and industrial center o f the country, but is also a nexus o f inter-continental importance and home o f about 15 mi l l ion people. An interruption o f Istanbul’s social, economic and financial l i f e would be felt for many years to come. Some sources estimate the economic impact o f such a disaster would be more than U S 2 0 billion. The JICA study estimates that an event similar to the Marmara earthquake could result in up to 87,000 fatalities, 135,000 injuries and heavy damage to 350,000 public and private buildings.

The Government o f Turkey i s aware o f the critical need to develop and to implement a comprehensive hazard risk management strategy for the country. With Bank support through the Marmara Earthquake Emergency Reconstruction (MEER) project, a risk transfer mechanism through a catastrophe insurance scheme was successfblly launched, and has received a significant international recognition. The MEER project also initiated establishment o f a decentralized emergency management system through creation o f the Turkey Emergency Management General Directorate (TEMAD). Albeit after long init ial delays, there has been some progress made in upgrading the newly established TEMAD to become an efficient national disaster coordination agency. In parallel to changes in the emergency management structures at the central level, considerable efforts and resources have been invested at the regional and local levels to better prepare at-risk-communities against future disasters. The Istanbul province, both the municipality and the governorship in particular has demonstrated a high level o f commitment and ownership in earthquake mitigation efforts, and has initiated numerous valuable seismic r isk assessment and planning activities in collaboration with national and international experts, with some support from international donors.

One o f the key initiatives i s development o f the Earthquake Masterplan for Istanbul, prepared by the Metropolitan Municipality o f Istanbul. The plan i s comprehensive in i t s treatment o f risks and mitigating measures and has received international recognition as a strategic instrument for addressing seismic r isks in highly vulnerable mega-cities. The proposed ISMEP project has been prepared within i t s framework and conceptual comprehensive approach.

’ Japan International Cooperation Agency [JICA]: The Study o n a Disaster PreventiodMit igation Plan in Istanbul Including Seismic Microzonation in the Republic o f Turkey; December 2002

1

The overall purpose o f the initiatives described in the Masterplan i s to enhance safety and total quality o f l i fe in the city by: integrating mitigation measures in city management processes, protecting natural and historical assets, reclaiming urban quality and identity, engaging local communities, rehabilitating high risk areas, and retrofitting or demolishing o f unsafe buildings.

.

A particular area o f concern for Istanbul, as for other urban areas in Turkey, has been lax enforcement o f building codes, development control and compliance with land use plans, caused by institutional and social factors, including the process transparency issues, and leading to a built environment which i s poorly protected against seismic events. The basic regulatory framework for construction supervision has been amended since 2000 and provides for legal mechanisms, though often criticized, for better construction quality. The statutory responsibility for the building codes enforcement and land use planning i s vested with the municipalities which, however, do not have enough capacity, to successfully control the built environment. Indisputably, Istanbul municipalities have made notable efforts and advanced their land planning and management functions, nevertheless, the effective compliance and enforcement o f the codes i s s t i l l lacking and need to be addressed at the lower administrative level, and possibly through engaging the professional engineering community and building local awareness.

*

The proposed project strives to address these key systemic issues in order to have lasting impact, and would provide a financial support to achieve many o f the safety objectives listed in the Earthquake Masterplan.

2. Rationale for Bank involvement

The Bank has established a long history o f financing emergency rehabilitation projects following disasters in Turkey and other countries globally. Recently, however, more attention has been given to mitigation programs enhancing governmental capacities to respond to disasters and reduce their risk, including strengthening o f organizational frameworks, emergency response management systems, risk reduction investments, insurance programs, etc. The Bank has been engaged in disaster mitigation operations in other ECA countries, including Romania, Kyrgyzstan, Poland, and Russia.

With this background, the Bank has, a unique ability to focus not only on the physical, but also the economic and social aspects o f hazard risk management, as wel l as the associated critical pol icy and institutional reforms. The Bank can provide effective assistance as the Government o f Turkey shifts from a ‘reactive’ to a more ‘proactive’ approach to disaster management.

In Turkey, the impact o f numerous efforts at the provincial and local levels to mitigate natural hazards has not yet been fully realized due to the limited scope o f activities and lack o f adequate funding. A comprehensive framework i s s t i l l needed to integrate these activities and to strengthen Istanbul’s seismic risk mitigation and emergency preparedness, in order to enable the community to cope with the risk o f an eventual seismic disaster. The Bank i s well positioned to play this role through application o f its expertise and financial assistance, which taken together, can leverage the already ongoing or new initiatives, and serve as a catalyst for other resources from international financial institutions and bilateral donors.

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3. Higher level objectives to which the project contributes

In the higher level strategic context, the project contributes to the objective spelled out in Section IV of the Mil lennium Development Goals (MDG) Declaration which states the goal “to intensify our collective efforts to reduce the number and effects o f natural and man-made disasters”.

In the most recent Country Assistance Strategy (CAS) o f October 2, 2003 (Report No. 26756 TU) and covering the planned assistance program for FY04-06, one o f the key development objectives for that period i s to “increase disaster preparedness and minimize losses from natural disasters”.

The project-supported assistance is also aligned with the CAS program o f poverty reduction, which aims at, among others, “making the economy more resil ient to crises (including natural disasters) that disproportionately affect the most vulnerable”.

Moreover, the project wil l contribute to the governance agenda through more transparent processes for building codes enforcement. The proposed project wil l support activities which will increase the disaster prevention and management capacities o f the government, both at the regional and provincial level in the Istanbul area.

The World Bank E C A region i s now promoting the importance o f mitigation and improvement o f governments’ capacities to respond to emergencies. The underlying principle o f the strategic framework, as reflected in the recently completed E C A Hazard R isk Management Strategg, is that both loss o f l i fe and economic impact o f disasters can be reduced by advance planning and investment, that i t i s cost effective to do so, and that this is governmental responsibility. The ISMEP fully applies this proactive approach by introduction o f disaster mitigation activities which address long-term emergency preparedness and risk mitigation needs prior to occurrence o f a possible major disaster.

B. PROJECT DESCRIPTION 1. Lending instrument

The Specific Investment Loan (SIL) was selected as the most suitable lending instrument, which wil l provide support to the specific investments together with a limited and focused technical assistance.

2. [If Applicable] Program objective and Phases

Not Applicable.

2World Bank: “Preventable Losses: Saving Lives and Prouertv through Hazard Risk Mitigation - A Strategic Framework for Reducing the Social and Economic Imuact o f Earthquake. Flood, and Landslide Hazards in the Europe and Central Asia Region”; October 2004

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3. Project development objective and key indicators

The proposed project wi l l initiate a process that aims at transforming Istanbul in the next 10-20 years into a city resilient to major earthquake. The overall goal o f the proposed project is to save lives and reduce the social, economic and financial impacts in the event o f future earthquakes. The specific objective o f the project i s to improve the city o f Istanbul’s preparedness for a potential earthquake through enhancing the institutional and technical capacity for disaster management and emergency response, strengthening critical public facilities for earthquake resistance, and supporting measures for better enforcement o f building codes and land use plans.

Fol lowing are the key indicators o f the expected project outcome:

a

a Ski l ls and technical capacities o f the relevant emergency response units are

a

K e y public facilities are retrofitted to resist a major earthquake;

strengthened; and Improvement in compliance with building codes and land use plans.

4. Project components

The project consists o f the following components and activities:

Component A: Enhancing Emergency Preparedness The objective o f this component i s to enhance the effectiveness and capacity o f the provincial and municipal public safety organizations in Istanbul to prepare for, respond to and recover from significant emergencies, especially those arising from earthquakes. Specifically, the component wil l support:

a

a

a Strengthening of institutional capacity of AYM - Istanbul Governorship Disaster

a

a Public awareness and training

Improvement of emergency communications systems Establishment of an emergency management information system

Management Center Upgrading of emergency response capacity in Istanbul

Component B: Seismic Risk Mitigation for Public Facilities The objective o f this component i s to reduce the risk o f future earthquake damage to critical facilities and lifelines in order to save lives and ensure their continued functioning in the event o f an earthquake. The component will consist o f the following key activities:

a

a

a

Retrofittingheconstruction of priori ty publ ic facilities such as hospitals, clinics, schools, administrative buildings and infrastructure, etc. Risk assessment of lifelines and vital infrastructure Risk assessment of cultural heritage buildings

Component C: Enforcement o f Building Codes

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The objective o f this component i s to support innovative approaches to better enforcement o f building codes and compliance with land use plans. The component will support:

0 Public awareness campaigns 0

0 Volunteer accreditationhaining of engineers 0

Further development of regulato y framework for enforcement of building codes enforcement land use plans

Streamlining of building permits issuance procedures and promoting transparency and accountability in selected district municipalities

Component D: Proiect Management The objective o f this component is to support the Istanbul Special Provincial Administration (ISPA) to implement the project in efficient and transparent manner, and build the institutional capacity to sustain the implementation o f Seismic Risk Mit igation and Preparedness program beyond the l i fe o f the project. Specifically, the component wil l comprise:

0 Project management support, including support to monitoring and evaluation

5. Lessons learned and reflected in the project design

The Marmara earthquake, with the resulting damages, l o w effectiveness o f response, the recovery efforts, and the fol lowing Bank MEER project, provided the key lessons based on which the ISMEP project was designed. '

The earthquake o f August 17, 1999 created a crisis in emergency management which exposed the weaknesses o f existing disaster response systems, as well as the poor quality o f construction deriving from a lack o f building codes enforcement and inadequate land use practices. Communication systems linking the affected provinces with outside agencies and organizations collapsed. Essential emergency response resources were either destroyed or severely damaged. The Turkish disaster response was unable to meet the demands created by the Marmara earthquake. Immediately after the catastrophe, some critical elements o f the national infrastructure failed. This included damage to the main fiber optic cable between Istanbul and Ankara, the link which formed a backbone o f the communication with the earthquake region. The disaster virtually incapacitated local response capabilities o f the affected provinces. Basic repairs to the communication and electric power connections took too long and critical rescue opportunities were practically lost and the response effort was in disarray.

The MEER project prepared in the aftermath o f the Marmara earthquake strived to tackle the above problems and strengthen the emergency management and response system through creation o f a national, comprehensive emergency management structure for Turkey that would focus on the coordination and integration o f risk reduction strategies, preparedness, response and recovery. The restructuring o f the national emergency management system is gradually progressing through a range o f activities designed for institutional strengthening o f TEMAD. Though the national coordination is o f key importance, the focus should now also be given to a lower, sub-national level o f the government, and to the region bearing the highest'risk in terms o f disaster probability, and importance and impact on the whole country.

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The design o f ISMEP project takes into account international experience which demonstrates that reducing l i f e loss and minimizing property damage in the immediate aftermath o f major earthquakes is most effectively achieved by what is done by agencies, authorities and resources and individual residents in the affected area. Outside assistance is essential when local capacity is exceeded as a result o f the scale o f the event, but, ultimately, al l disasters are local. The most fundamental effectiveness o f any emergency management system depends upon the ability, organization, skills, and commitment o f a community - i t s government officials, private industry, NGOs and residents - to prepare for emergency situations. These efforts should be locally based and managed, but they must be consistent with the national and provincial systems, standards and programs. Building local capacity, therefore, i s the most effective strategy for improving emergency preparedness. Consequently, the ISMEP project promotes a decentralized approach to implementation of the risk reduction efforts and strengthening the regional institutions, which already showed a notable initiative since the Marmara earthquake to prepare for future disasters.

The project strives to improve the building code enforcement practices and development in line with land use plans and regulations through activities to be implemented at the municipal level. Given the already introduced amendments to the legal framework and further discussions and work o n the relevant legislation, the ISMEP takes a route o f designing a road map with monitorable actions to be taken by municipalities who commit themselves to a better compliance to building code enforcement.

6. Alternatives considered and reasons for rejection

Three main alternative approaches were considered for the proposed ISMEP project: (i) implement geographically-expanded risk mitigation and emergency preparedness activities covering not only Istanbul but also other provinces throughout Turkey; (ii) continue to focus on the support to the national level institutions responsible for r i sk mitigation and emergency preparedness; (iii) implement a seismic strengthening program aimed not only at public assets and lifelines, but also on the private residential buildings.

For the f i rst alternative, given that the degree o f institutional capacity and disaster mitigation needs vary considerably across different provinces, i t was agreed that a uniquely-tailored program focusing on one area would have the potential to deliver the highest impact at the local level. Istanbul was chosen because o f the provincial government’s demonstrated ownership and commitment, the province’s high potential risk and vulnerability, and i t s vital importance to the country and the region as a whole. I t is expected that key lessons may be learned and replicated in other provinces in the future.

The rationale for rejection o f the second option o f providing support focused on the national level i s based on the lessons learned from the MEER project, as described in section B.5. The ongoing MEER project provides tremendous assistance for strengthening the central level emergency management functions. The ISMEP project will support activities at the local level, where such support i s greatly needed, where must be effective, where there i s a strong wil l and commitment to implement them, and where the authorities showed remarkable initiative to better prepare for emergencies since the Marmara earthquake.

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The project will include the mechanisms which wil l ensure compatibility and consistency o f the actions taken in Istanbul as we l l as the systems developed with the national programs. For this purpose, the Turkish Emergency Management General Directorate (TEMAD) wil l be part o f the project Steering Committee as well as part o f the user groups in the development o f the communication system and the emergency management system to ensure that these systems are compatible with the national and other regional systems.

In regard to the third alternative, i t was considered to pilot under the project innovative approaches to financing retrofitting o f private housing through undertaking vulnerability assessment and extending a financing mechanism for interested household owners whose buildings were found to be unsafe. This option was dropped for the following reasons: (i) the Government did not approve providing a subsidy (including the bearing o f foreign exchange risk) for the most prosperous region o f the country, and in these circumstances the private banks were not interested in the project; and (ii) the willingness o f households to pay for retrofitting was found l o w given the costs and low level o f information available to the communities about the r isks and benefits o f retrofitting.

Another pi lot considered was on urban transformation. The potential pi lot included demolition o f unsafe buildings and re-building the entire block(s). The pilot was withdrawn by the Greater Municipality o f Istanbul so that discussions about i t s feasibility and the financial model would not delay the processing o f the retrofitting activities for public buildings.

C. IMPLEMENTATION 1. Partnership arrangements (if applicable)

The proposed project i s being developed in close coordination with other international donors. I t i s envisaged that parallel financing wil l be provided by the, Swiss Agency for Development and Cooperation (SDC) for support to neighborhood volunteers emergency response groups, which complements activities under sub-component A.5 (Public Awareness and Training). ’ The Government o f Turkey i s also discussing possibilities for additional funding for disaster mitigation activities in Istanbul from other International Financial Institutions.

2. Institutional and implementation arrangements

In l ine with government decentralization agenda, project implementation would be placed under the responsibility o f the Govemor o f Istanbul. A small Istanbul Project Coordination Unit (IPCU) would be, established under the Istanbul Special Provincial Administration (ISPA). The Unit would be headed by a highly qualified project Director who wil l report directly to the Govemor or his designee, and the General Secretary o f ISPA. Each relevant agency (such as Provincial Directorates o f Health, Education, Public Works, etc.) wil l nominate a senior staff to be a liaison between the I P C U and their mother agency.

The IPCU wil l be responsible for project coordination, procurement, financial management, contract management, monitoring, and evaluation and reporting. The core I P C U staff will include, in addition to the Director, 2 Deputy Directors (one technical and the other for administration and finance), 2 procurement officers, 2 financial management officers, 5

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engineers, a social scientist, an environmental engineer, and a monitoring and reporting officer. The number o f positions i s indicative and might be revised during project implementation.

In order to ensure full coordination T o n g the various relevant agencies and the IPCU, Implementation Coordination Protocols wil l be signed between the ISPA and these agencies.

Some staff from the existing PIU under the Prime Ministry Office (implementing, among others, the MEER project) wil l be temporarily assigned to the IPCU, and once the ISMEP project becomes effective these staff may be permanently transferred to IPCU.

A Project Steering Committee would be established to oversee project implementation and provide strategic guidance. The Steering Committee would be chaired by the Governor o f Istanbul, and may include Directors o f the provincial departments o f the concerned ministries, representatives o f Istanbul Municipality, Treasury, SPO, TEMAD, Ministry o f Public Works and Settlements, and the Director o f the PIU under the Prime Ministry Office.

3. Monitoring and evaluation of outcomes/results

Evaluation o f the results through thorough monitoring i s o f key importance for drawing lessons for future applications in Turkey and elsewhere. In the case o f the Enhancement o f Emergency Preparedness component, many o f the emergency communication and response functions wil l be enhanced for the daily use by the relevant agencies. Therefore, the improvements made can be to some extent monitored and evaluated.

Measuring o f the results o f the Seismic R isk Mitigation for Public Facilities component i s rather straightforward and i t s outcomes wil l be evaluated through assessment o f physical investments and the number o f facilities retrofitted.

The monitoring and evaluation function wil l be particularly important, and indeed instrumental, for the building code enforcement activities at the selected district municipalities. A part of'this component wi l l be establishment o f a monitoririg framework, including an independent audit system for building code enforcement to assess the progress made in this area.

In the context o f evaluating project results evaluation, i t should be noted that most o f the outcomes o f the envisaged activities wil l not be precisely known unless severe earthquake strikes the city.

4. Sustainability

Institutional sustainability. The commitment to the project objectives, a good indicator o f its sustainability, i s shown by activities already carried out which were initiated by Turkish government and financed from their own sources. Development o f the Master Plan, command centers for the coordination o f post disaster actions, and technical studies constitute vital steps towards broadly based improvements in the capacity to mitigate the effects o f earthquakes and other disasters. Borrower ownership has been made clear during project preparation, where responsible entities have worked together to support the project and provide al l necessary counterpart inputs with great efficiency. The prime example o f th is cooperation has been the

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prioritization process for the public facilities to be selected for retrofitting, involving many public institutional owners.

In order to ensure institutional sustainability beyond the l i fe o f the project, the proposed project would provide assistance to the Governor’s Emergency Management Center through support to the development o f organization structure and operations procedures and strengthen the capacity o f the AYM to effectively carry out the roles assigned to it.

Technical sustainability. The maintenance o f the seismically strengthened structures in the time beyond the project implementation period wil l fol low normal procedures used for buildings. The long-term sustainability o f the emergency communication and information system, as wel l as the response equipment is dependent upon continuing budgetary support from the municipal and provincial governments to maintain the systems and equipment. Given the level o f commitment demonstrated by the lead agencies in the Istanbul region to emergency preparedness, and the fact that the communications and emergency response systems and equipment will be used on a day- to-day basis, there i s every reason to believe that the initiatives undertaken under the project wil l continue to be supported.

5.. Cri t ical risks and possible controversial aspects

The proposed ISMEP project has certain risks that need to be mitigated in order to help ensure achievement o f i t s development objective. The key potential risks, along with their proposed mitigation measures are the following:

Lack of institutional coordination. The prioritization process carried out during project preparation for selection o f the public buildings to be retrofitted, showed that inter-sectoral cooperation can be effective if coordinated by one responsible institution, in this case, the Govemor’s office. In the implementation phase, the risk o f lack o f coordination can be mitigated using the same mechanism, and by having the implementation unit vested with responsibilities and temporary ownership, until completion o f the investment, for the assets otherwise legally belonging to other public entities. The investments supported by the project in the communication and emergency management information systems will strengthen the linkages, and the process o f the interaction should further enhance working relationships and consequently, coordination mechanisms between various institutions, some under the Mayor, others under the Governor, responsible for public safety. (Risk rating: Modest)

Municipalities’ commitment to strict enforcement of building codes and compliance with land use planning regulations. The project will support improvement o f building code enforcement at the municipal level through adopting a strategy which will require a full commitment o f municipalities to transparency and accountability to achieve improvement in compliance rate with building codes and land use plans. The achievement o f th i s objective wil l be monitored through an independent audit. The discussions with the Istanbul authorities indicate that there i s good wil l to work on development and application o f the necessary measures. Also, community involvement and information dissemination wi l l provide for measures to increase chances o f better building code enforcement. However gaps in the regulatory fiamework and resistance by several interest groups may undermine the achievement o f this goal. (Risk rating: Substantial)

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6. Loanlcredit conditions and covenants

Effectiveness Conditions a Establishment o f the IPCU and the appointment o f the Project Director, Procurement

specialist and Financial Management specialist with qualifications and terms o f reference acceptable to the Bank; and

Signing o f the Project Implementation Protocol between the Undersecretariat o f the Treasury and ISPA under terms and conditions acceptable to the Bank.

a

Loan Covenants Maximum funds for re-construction o f buildings wil l be limited to 20% o f allocation for c iv i l works. Reconstruction o f buildings wil l require Bank no-objection (Schedule 5; para 5) The ISPA wil l submit an annual work plan and budget for Bank review and comments by August 3 1 each year. (Schedule 5; para 7a) The ISPA wil l update a procurement plan in accordance to guidelines acceptable to the Bank, and h i s h such update to the Bank not later than 6 months after the date o f the preceding Procurement Plan, for the Bank’s approval (Article 111; section 3.03(b)) The ISPA wil l submit to the project Steering Committee and the Bank a progress report by March 31 and September 30 o f each year, starting March 31,2006. (Schedule 5, para

The ISPA wil l prepare the mid-term review report by March 31, 2008 and facilitate the mid-term review o f the project by M a y 30,2008. (Schedule 5; para 8b)

7 4

D. APPRAISAL SUMMARY 1. Economic and financial analyses

Cost Benefit Analysis Methodolonv. There exist a number o f methods for performing a cost benefit analysis o f a disaster with widely varying data requirements and degree o f sophistication. For the most part, estimation o f project costs i s easier and straightforward. These costs are borne at the beginning o f the period and are subject to a greater degree o f certainty. However, there are problems associated with the estimation o f project benefits. First o f all, one does not know in advance if and when a disaster wil l occur, and at which intensity i t wil l occur. Secondly, one does not know in advance how effective the overall mitigation efforts wi l l be in avoiding the possible loses based on vulnerability assessments. Therefore, in large-scale disaster mitigation projects the costs are defined while benefits, which are largely derived from avoided losses, are at best probabilistic. For disaster mitigation project involving earthquakes, the principal gain i s saved human lives in addition to avoided property loss and income in case o f commercial and industrial sites. Most o f the conventional cost-benefit models heavily rely on the notion o f assigning a monetary value to human l i fe which commands a much greater monetary amount as opposed to property. Although quite appropriate for insurance and actuarial purposes, and intrinsically appealing, this approach provokes controversy because o f disagreements whether a monetary value could be ascribed to human life. Where exhaustive listings o f project benefits and assignment o f monetary values to human l i f e spared pose practical or moral difficulties, a

10 ,

macro approach may be adopted, especially for large and complex mitigation projects such as ISMEP. Such a macro-economic approach i s pertinent for ISMEP, due to problems associated with the reliability and availability o f micro-level data. The economic analysis o f ISMEP project i s based on a macro model (neither attributing values to human l i fe nor exhaustively listing al l losses and damages). The analytical framing is based on a simple macro model which strives to arrive at comparable results that would be obtained through detailed micro analyses.

,

Proiect Benefits. Benefits due to individual project components are summarized in Annex 9. The analysis relies on estimating the cross-cutting benefits - rather than individual component or activity benefits - that result from an interaction and interdependence o f a l l the project components. The concept o f provincial GNP is used to estimate the damage impact o f the earthquake as wel l as the benefits that would be due to the mitigation effort resulting from avoided earthquake impact.

Economic Analysis. Using a macro-economic model, probability weighted annual economic loss in Istanbul due to an earthquake is expected to be around U S $ 163 mi l l ion using a conservative loss scenario and US$ 249 mi l l ion based upon the most l ikely loss outcome. FEMA calls this concept annualized damages and losses and it does not apply to them a growth element. The same principles were adhered to in this analysis as well. Mitigation must be centered on reducing this amount o f US$ 249 mi l l ion per year to the highest degree possible. The project's benefits are generated to the same extent as one can reduce this potential loss. However, current loss mitigation capacity i s very limited and it can only be gradually built and sustained over a period o f time, which is assumed to span some 30 years.

Under the above scenarios, the estimated ERR will be 11 % for the conservative case, and 19% for the most likely case for the proposed project, with' a C/B ratio o f about 1.1 1 (conservative case) and 1.69 (most l ikely loss scenario). If the loss level i s allowed to rise, this would only increase the ERR. For instance, using the most likely scenario assumptions, for a probability o f earthquake occurrence f ixed at 3 percent, rather than 2 percent, the ERR will be 29 percent (with B/C o f 2.53, and for a probability o f 4 percent the ERR would be 41 percent (with C/B o f 3.37). This i s due to the fact that at higher levels o f loss there will b e more room for mitigation effort and hence generation o f mitigation benefits. The computational details are included in Annex 9.

2. Technical

The technical approach to the seismic strengthening o f public buildings is two fold: retrofitting o f structures where this i s technically feasible and, secondly, building reconstruction where the existing poor quality does not allow for a reasonable retrofit, and a facility is o f key importance. The threshold in this respect i s considered a retrofit cost that i s lower than 30% o f the cost o f replacement with a seismically appropriate structure on the same site. The technical measures, their costs and benefits are subject to site specific feasibility studies.

The proposed technical approach to retrofitting buildings i s mainly to fol low conventional engineering methods that are well-known in Turkey and intemationally, l ike construction o f

11

sheer walls and expansion o f building foundations. isolation wil l be introduced where appropriate. .

Advanced technologies, such as base

Feasibility studies, including cost-benefit analysis to ensure that the cost o f retrofitting is below an agreed replacement cost ratio are a part o f each design contract for each building. These wil l be evaluated prior to the start o f construction for any given facility. Designs will follow the latest construction code, which experts acknowledge i s suitable for the seismic conditions o f Istanbul. The local construction industry i s fully capable o f implementing the work with currently available plant, labor and experience. The bidding process for engineering design and supervision will be based on international selection process to ensure that design and supervision follow international practices. Furthermore, the project will also finance an international seismic engineer to assist the I P C U in reviewing the retrofitting design.

3. Fiduciary

Financial Manaaement. The task team has conducted an assessment o f the adequacy o f the project financial management system at IPCU. The current financial management arrangements for the project are not yet fully satisfactory to the Bank and an action plan to bring these arrangements to a satisfactory level i s included in Annex 7.

The project accounting wil l be maintained separately within IPCU which wil l install a Project Monitoring System that wil l allow for proper recording o f project financial transactions, including the allocation o f expenditures in accordance with respective components, disbursement categories and sources o f funds and that wil l generate financial, procurement and output monitoring report.

The project expenditures wi l l be financed 100% from the Bank loan as permitted by the new country financing parameters. The Government o f Turkey decided that allocating project funds directly to Istanbul Special Provincial Administration (ISPA) i s going to speed up project implementation. Therefore, a specific clause which wil l enable the Treasury to allocate the ISMEP loan to ISPA wil l be included in the draft L a w amending some laws and decree by laws. This law wil l give the Council o f Ministers the authority to make loan allocations to ISPA in cases where these funds are obtained for the purpose o f implementing risk mitigation projects in Istanbul.

The budgeting and execution responsibility for ISMEP wil l be vested with the ISPA. The budget wil l be submitted to the Province General Assembly for approval. These arrangements wil l also be confirmed in the protocol that wil l be entered between the Treasury and ISPA for Project Implementation. In any fiscal year, the undisbursed fkds can be transferred to the next year project budget by a decision o f the ISPA Secretary General upon the recommendation o f the I P C U Director.

There wil l be a special account for the project at the Central Bank o f Turkey in Euros. Since the project financing percentage i s loo%, payments for a l l expenditures under the project wi l l be made from this account or through direct payments fi-om the loan account. The IPCU Director and the Governor’s Designee wil l be responsible for signing withdrawal applications.

12

Procurement. An assessment o f the capacity o f the Governorship o f Istanbul to implement procurement actions for the project has been carried out in February, 2005. The assessment reviewed the organizational structure for implementing the project. The key issues and risks concerning procurement have been identified and include lack o f experience with the Bank- financed projects. Therefore, the IPCU wil l be composed o f competitively selected key staff such as Project Director, Deputy Director(s), FMS Manager, Procurement Manager and adequate number o f F M S and procurement experts, reporting, evaluation and monitoring expert, technical staff, environmental and social experts and necessary support staff as wel l as local and international individual consultants in contract management and supervision when and as needed. Furthermore, IPCU wil l be supported by consultant f i r m s and individuals for the preparation o f designs, bidding documents and supervision o f works if and as necessary.

Given the fact that the gaps and loopholes existing in the previous legislation which was subject to the recent CPAR conducted in 2001 were substantially removed by the new Public Procurement Law ( Code 4734 & 4735) effective from January 1, 2003 and assuming that the I P C U wil l have the necessary capacity, including the qualified procurement staff and supported by the MEER PIU which has highly experienced staff in Bank’s procurement assisting the IPCU in the preparation of bidding documents, i t is recommended that this project be placed init ial ly in medium risk category. The risk rating wil l be re-evaluated after one year o f loan effectiveness and adjustments made accordingly.

At appraisal, a procurement plan for project implementation was developed which provides the basis for the procurement methods. This plan was agreed on April 18, 2005, and is summarized in Section C o f Annex 8. I t wil l also be available in the Project’s database and in the Bank’s external website. The Procurement Plan will be updated in agreement with Bank project team bi- annually or as required, to reflect the actual project implementation needs and improvements in institutional capacity.

4. Social

Each o f the three components o f the project has had social analysis carried out during preparation. The implementation wil l also include additional social analysis, as needed.

For Component A (Enhancing Emergency Preparedness) a study has been commissioned to analyze community mobilization experiences in Turkey. The study wil l compare several efforts to mobilize community disaster response volunteers, focusing on a number o f dimensions, including mobilization techniques, training and organizing, developing and maintaining group morale, and sustainability. The results wil l feed into the preparation o f a community mobilization module that the Swiss Agency for Development and Cooperation (SDC) has expressed a strong interest in supporting. Using principles and techniques refined in their Neighborhood Disaster Support Project, the subcomponent wil l mobilize, train and equip volunteer teams that are prepared to offer significant f i rs t response support in their neighborhoods in case o f disaster. As sustaining such groups i s a major challenge, the process and results wil l be monitored carefully to find ways to increase the efficiency and sustainability o f the volunteer cadres.

13

For Component By Seismic Risk Mitigation for Public Assets, an analysis was undertaken in each o f the hospitals where a retrofitting feasibility study was completed to prepare or strengthen a social mitigation plan associated with the work. The plans wil l identify possible impacts o f the retrofitting or reconstruction on operations o f the facility, as wel l as access by clients and the public to the services offered by the facility. The plans wil l identify steps to be taken to mitigate disruptions in service or access to facilities during construction on site or at an alternative location. The terms of reference for each new feasibility study for buildings to be included in the public assets retrofitting program wil l include the requirement to prepare social mitigation plans in consultation with staff and management o f the facility.

Project preparation actively engaged officials and technical staff in several municipalities, as wel l as decision makers in the Province and Metropolitan Municipality and academics. The various social analyses initiated contact with other stakeholders who wil l be involved more actively as Component C develops.

The project wil l not involve land acquisition or resettlement, thus it does not trigger O P B P 4.12, Involuntary Resettlement.

5. Environment

The environmental assessment category for the project has been determined to be B. This i s based on the fact that overall, the environmental r isks from the proposed ISMEP project are minor to moderate in scale, local in extent, and are easily identified, mitigated and monitored. The project is, furthermore, environmentally positive as i t helps minimize the potentially disastrous environmental consequences o f an earthquake, and assure the existence o f public infrastructure and major utilities networks in the event o f the disaster. The retrofitting works would be performed on buildings that are already in existence and the use o f innovative, minimally intrusive technical retrofitting solutions would be promoted. Only on a very limited scale the project might include demolition and replacement o f structures which do not qualify for the retrofitting. An environmental management plan that incorporates institutional assessment, identification o f specific potential r isks along with their mitigation measures and monitoring systems has been prepared by the borrower; consultations with affected stakeholders were included in the preparation.

6. Safeguard policies

Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OPBP/GP 4.01) [XI [I Natural Habitats (OPBP 4.04) [I [ X I

Pest Management (OP 4.09) 11 [XI Cultural Property (OPN 1 1.03, being revised as OP 4.11) E l Involuntary Resettlement (OPBP 4.12) [I [ X I Indigenous Peoples (OD 4.20, being revised as OP 4.10) [XI

Forests (OP/BP 4.36) [I [ X I

[ X I

[I

14

Safety o f Dams (OP/BP 4.37) [I [XI Projects in Disputed Areas (OP/BP/GP 7.60)* [I [XI Projects on International Waterways (OP/BP/GP 7.50) [I [ X I

Involuntary Resettlement. The project wil l not entail land acquisition or resettlement, as the retrofitting or reconstruction will take place on existing sites. Each feasibility study for retrofitting wi l l include a social mitigation plan to deal with temporary impacts o f the work on operation of the facility and access o f clients and the public to the services offered in the facility.

Cultural Property. The safeguard pol icy on Cultural Property is considered triggered since retrofitting (and if needed replacement) in Istanbul has a reasonable likelihood of: (i) affecting listed cultural heritage sites, (ii) being in close proximity to such sites, andor (iii) being located in a district under protection. The Bank has in the past reviewed the Turkish regulations concerning interventions with regard to cultural property. The EMP includes an updated review o f current regulations and practice, and incorporates the appropriate mitigation planning.

Environmental Assessment. During preparation, a pool o f buildings that met agreed criteria was established, however, al l specific buildings to be strengthened wil l not be identified until project implementation. Therefore, a range o f potential environmental impacts have been assessed and a generic EMP developed based on the potential interventions and environmental impacts. The EMP includes the mitigation plan, Le. measures to be taken to control potential impacts, monitoring plan, and responsible party for the mitigation actions. As part o f the formulation o f the EMP, the environmental protection regulatory framework was analyzed and institutional arrangements for environmental management clearly specified. The framework EMP for the project has been publicly disclosed prior to the appraisal.

7. Policy Exceptions and Readiness

None

* By supporting the proposedproject. the Bank does not intend to prejudice the f inal determination of theparties' claims on the disputed areas

15

Annex 1 : Country and Sector Background

TURKEY: SEISMIC RISK MITIGATION-TR

Human Casualties Deaths Severely injured

Bui ld ing Damages /I Heavily Heavily +Moderately Heavily +Moderately +Partly

Seismic Vulnerability. Turkey i s highly vulnerable to natural disasters, particularly earthquakes. In the 1999 Marmara earthquakes, the death to l l reached over 17,000 with a direct economic impact estimated at about US$5 billion, or around 2.5 percent o f GNP. Within the nation’s high- risk context, Istanbul i s most vulnerable because o f its seismic-prone location on the North Anatolian Fault, and its high population and commercialhndustrial densities. According to recent expert assessments, the probability o f a major earthquake affecting Istanbul in the next 30 years i s 62% f 12%, while the likelihood o f such a devastation in the next decade is 32% k 12%. Some sources estimate the economic impact o f such a disaster would range between US$20-60 billion. A model o f earthquake scenario analysis was developed under the J ICA- fhded Seismic Microzonation Study, with the following estimation o f human casualties and damages.

Model A Model B (most probable case) (worst case)

73,000 (0.8%) 87,000 (1 .O%) 120,000 (1.4%) 135,000 (1.5%)

51,000 (7.1%) 59,000 (8.2%) 1 14,000 (1 6%) 128,000 (18%) 252,000 (35%) 300,000 (38%)

Household Damages /1 Heavily Heavily +Moderately Heavily +Moderately +Partly

Publ ic Buildings Located i n High Seismic Intensity Areas Educational Health Security Governmental Water Pipeline Damage Points

2 16,000 268,000 503,000 60 1,000

1,116,000 1,300,000

42.8% 48.5% 43.6% 53.1% 48.0% 53.0% 53.0% 57.2% 59.4% 69.6%

1,400 1,600

I Gas Pipeline Damage Points I 11 I 13 Electric Cable Damages

collapse) Bridge Damages (high probability o f

820 km (2.5%) 1,080 (3.3%) 18 20

I I I

living without repaidrebuild; Moderately: usable for evacuation, but repairs necessary for living; Partly: usable for evacuation and living, but repair is desirable for living.

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The r isk i s roughly comparable to the risk faced by Los Angeles and San Francisco, but with damage potential that i s much higher because o f Istanbul’s greater structural vulnerabilities. If a seismic event o f the same magnitude as that in 1999 were to occur near Istanbul, the human suffering as we l l as the social, economic, and environmental impacts would be dramatically higher than in the Marmara region, as Istanbul i s not only the financial, cultural and industrial center o f the country, but i s also a nexus o f inter-continental importance. An interruption of Istanbul’s social, economic and financial l i fe would be felt for many years to come.

International Models for Emergency Management. Emergency management organizations in nations that have a substantial earthquake risk share two common characteristics:

(i) There is a strong emphasis on developing municipal and provincial capabilities. Emergencies occur in specific communities, and experience has demonstrated that the most fundamental effectiveness o f any emergency management system depends upon the ability, organization, skills, and commitment o f a community - i t s government officials, private industry, NGOs and residents -- to prepare for emergency situations. These efforts must be community based and managed, but must also be consistent with the national and provincial systems, their standards and programs.

(ii) There is a single national agency charged with coordination o f preparedness, planning, response and recovery activities that i s directly linked either to the Executive branch of the government or the Ministry o f the Interior.

Organization of Emergency Management in Turkey. Historically, Law No. 7269, “Measures and Assistance to B e Put into Effect Regarding Natural Disasters Affecting the L i f e o f the General Public” sets forth the fbndamental components o f disaster management in Turkey.

Turkey i s divided into 81 provinces governed by administrators appointed by the central government. A provincial disaster committee is composed o f senior provincial officials f i om relevant ministries and departments l ike c iv i l defense, health, education, and includes mayors (who are elected officials) and the Red Crescent Society. In addition, there are approximately 840 sub-districts in the provinces and some 3,200 municipalities.

Traditionally, disaster management in Turkey has been highly centralized. Local authorities administer directives f i om the Ministry o f Public Works and Settlement (MPWS) which has, in one reading o f Law 7269, the lead responsibility for disaster affairs; governors (who are part o f the Ministry o f Interior) are expected to coordinate and mobilize the resources o f other agencies. Mayors have relatively l imited direct authority and responsibility for disaster management. Minor crises are to be handled at the district or sub-district level. If the disaster exceeds capabilities at that level, the provincial Governor becomes involved. If it i s a major event, representatives o f the ministries o f the central government become involved and establish crisis centers. If there is a national-scale natural disaster (like the Marmara earthquake), a crisis center is established in the office o f the Prime Minister that includes senior representatives o f at least 15 ministries, including the military.

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Though the system has been highly centralized, ironically there has been no single national coordinating agency for disaster management, until formal establishment o f the TEMAD after the Marmara earthquake. The operational responsibilities at the provincial level reside with governors. Each ministry has a unit responsible for some aspect o f disaster management. Rescue and rel ief operations are the direct responsibility o f the provinces or districts, with assistance provided by the central government; the central government, under MPWS, i s responsible for reconstruction and rehabilitation. The Red Crescent Society, the General Directorate o f Civ i l Defense (GDCD in the Ministry o f Interior), and the military also play a significant role in rescue and rel ief operations.

The enabling law sets forth a basic structure, and each min is t r j has a specific plan but there has been no explicit national emergency response plan that defines how al l the elements o f the government’s response system are to be coordinated at each level.

The General Directorate o f Disaster Affairs (GDDA) o f the MPWS, historically responsible for disaster management and mitigation (GDDA is divided into seven major departments: Earthquake Research, Disaster Damage Assessment and Survey, Emergency Rel ief and Machine Support, Planning and Indemnification o f Affected Populations, Disasters Fund Administration, Temporary Housing, and Prefabricated House Construction) has approximately 1200 personnel, including planners, architects, geoscientists, architects and engineers but evidences l i t t le interest in emergency operations.

The GDCD has some 3000 personnel, with approximately 300 assigned in Ankara. GDCD rescue and rel ief teams are assigned nationwide, and are expected to intervene at times o f disaster to provide immediate assistance, though their level o f training, organizational structure, and equipment is inadequate. The G D C D administers the operations o f the C iv i l Defense College in Ankara that trains civilian government employees.

In 1999 the MEER project team conducted a careful analysis o f the altematives,to enhance the capacity o f the Government o f Turkey to the nation’s substantial risk fkom natural hazards.

As a result o f this assessment, two basic strategic objectives were envisioned: (a) creating and empowering a single agency at the national level to coordinate the efforts o f a l l ministries related to disaster preparedness, emergency response and recovery and (b) decentralizing the emergency management system by enhancing the capacities at the municipal level so that the initial emergency response efforts - which have been clearly demonstrated to be the most effective in saving l ives and reducing property damage - are strengthened.

In June 2000 the Government enacted the Decree to formally establish the Turkey Emergency Management General Directorate (TEMAD) as a national coordination body for emergency management. TEMAD, however, was not able to play a key and significant role in the coordination o f disaster preparedness and response for several reasons including: (i) TEMAD did not initiate the process to develop i t s systems and human resources till only a few months ago; (ii) competing interests among the various entities that deal with disaster management and response; and (iii) the head o f TEMAD is at the General Director level, equal to the other important agencies dealing with disasters and there i s no proper mechanism to coordinate the

18

various activities. Recently, T E M A D prepared a draft law to strengthen disaster management coordination in the country. The draft law calls for strengthening TEMAD’s ability to coordinate the various government entities in the case o f a major earthquake, and calls for each local government to establish a disaster management team. The draft law has been circulated widely in the country for comments.

In parallel to efforts o f the central government, individual municipalities have, at their own initiative, undertaken activities to strengthen.their emergency preparedness capacity.

Organization of Disaster Management in Istanbul. The overall responsibility for disaster management in the province o f Istanbul i s under responsibility o f the Governor. There are two key disaster management centers in Istanbul: the Istanbul Governorship Disaster Management Center ( A m ) and the Istanbul Metropolitan Disaster Coordination Center (AKOM); each having different roles and responsibilities. Provincial authorities are responsible for health, education, c iv i l defense, c iv i l works, security (police) and other areas falling under the authority o f the national government while the municipal agencies are responsible for the f ire brigades, water and gas, and some parts o f the transportation networks. In a case o f a major disaster, a l l o f these services and sectors within the boundaries o f the province are under the responsibility o f the Governor. In addition, the provincial authorities, as regional representatives o f national agencies, serve as the principal link to the central government’s operational facilities in Ankara.

Both the provincial government and the metropolitan government have each constructed new emergency operations centers within the .past four years. The municipal center (AKOM) was completed and began operations within a year o f the 1999 earthquake. Modeled after a similar facility in Los h g e l e s County, AKOM contains many state-of-the-art features and accommodations for each o f the municipal agencies that would need to respond to a variety o f emergencies. The Provincial government has constructed a similar facility (AYM) that, when fully operational, wil l serve a similar purpose, including training classrooms and facilities for field training. AYM will enable the Governor to lead emergency management operations’in a case o f a major natural disaster in Istanbul, and will enable the coordination among the national government agencies in Ankara, l ine agencies in Istanbul, and the metropolitan and district governments.

The activities to be supported under ISMEP are designed to build on the self-initiated actions o f officials in Istanbul. In this sense, the ISMEP is entirely consistent with the strategies developed in 1999 and, as importantly, consistent with the broader national strategy o f the government in 2004 in its emphasis upon decentralization as a fundamental objective.

Building Code Enforcement. With the exception o f some o f the historic parts o f the city, Istanbul’s housing stock has largely been created without the benefit o f ci ty planning and within a “laissez faire” environment in which scant attention has been paid to either the seismic characteristics o f building sites or to applicable building codes. Many buildings, and individual houses, have been built without val id permits, or with permits obtained in spite o f the fact that location or construction, or both, were not conforming with norms extant at that time. The latter i t s e l f were lax, at least until 1997, when the entire area o f Istanbul was finally’reclassified as being in a zone o f high seismic risk. Repeated “amnesties” o f buildings known to be outside o f

19

applicable norms, with the most sweeping one in 1983, have further contributed to the problem o f inadequacy o f housing with respect to seismic risks. The present status, conservatively estimated, i s that over 70% of al l housing in Istanbul does not conform with current standards o f resistance to the seismic risk that i s now generally accepted for Istanbul.

Although the problems are widely known in Turkey, effective remedial action remains weak. Enforcement o f construction codes and city planning, are the responsibility o f municipal governments. These, though, tend to be weak and under funded, with narrow if any, local income. As a result, municipal engineering and planning departments, the instruments for code enforcement and local planning, are equally weak, under funded and understaffed and, consequently, are susceptible to extraneous influences, including extra curricular monetary rewards. Overt, such as the mentioned “amnesties”, and covert actions by higher authorities, interfering with building practices, have further contributed to the dismal status quo.

The series o f catastrophic events, including earthquakes, that have hit Turkey in the last 20 years or so, culminating in the devastating 1999 Marmara earthquake whose epicenter was a mere 60 km f iom Istanbul, have been wake up calls. This has coincided with a gradual strengthening o f local authorities, a decentralization o f power and, most important, with increased public aw.areness. The populations potentially affected by earthquakes, are increasingly vocal in their demands for safer living environments, and local governments also show the willingness to improve the situation.

Key Studies Initiated by Istanbul Authorities. Considerable effort and resources have been invested at the regional and local levels to better prepare at-risk-communities against future disasters. The Istanbul municipality in particular has demonstrated a high level o f commitment and ownership in disaster mitigation efforts, and has initiated numerous valuable seismic r isk assessment and planning activities in collaboration with national and international experts, with some support from international donors.

Study o n Disaster PreventionlMitination. The JICA study o f 2002 emphasizing the likelihood o f a large earthquake striking Istanbul focuses on disaster prevention and mitigation planning in Istanbul, outlining the challenge as 1) to integrate and develop seismic microzonation studies in Istanbul as the scientific and technical basis for disaster preventiodmitigation planning; 2) to recommend a citywide preventiodmitigation program against building and infrastructure damages; 3) to recommend disaster prevention considerations in the urban planning o f Istanbul City; and 4) to pursue the tfansfer o f technology and planning techniques to Turkey. Necessary earthquake disaster mitigation measures are presented as short- and medium- to long-term perspectives. Short-term measures basically include retrofitting important facilities and infrastructure to secure their operational function. Medium- to long-term measures involve non- structural recommendations.

Earthquake Masterplan for Istanbul. The plan i s comprehensive in i t s treatment o f risks and mitigating measures and has received international recognition as a strategic instrument for addressing seismic r isks in highly vulnerable mega-cities.

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The Masterplan outlines an “Earthquake Mitigation Plan for Istanbul” [EMPII with the fol lowing characteristics. The EMPI is envisaged as a framework for social contracts to be drawn between Istanbul Metropolitan Municipality, the Governorate, local municipalities, institutions, enterprises, NGOs, local community administrations, and individual citizens with the aim o f determining the active role o f the parties involved, and facilitating their participation and contributions.

The overall purpose is to enhance safety and total quality o f l i fe in the city by: reducing infrastructural deficiencies, gradually eliminating the unauthorized building stock, integrating mitigation measures in city management processes, protecting natural and historical assets, reclaiming urban quality and identity, engaging local communities in the management o f the city, rehabilitating o f high risk areas, and retrofitting or removing buildings according to the local revision plans. A particular area o f concern for Istanbul, as for other urban areas, has been lax enforcement o f building codes and development control, caused by institutional and social factors, and leading to a built environment which i s poorly protected against seismic events.

Bank Involvement. The project has been developed within the framework o f the Earthquake Masterplan for Istanbul and provides financial support to address many o f the safety and quality o f l i fe enhancing objectives listed in the document.

The proposed project strives to address some key systemic issues in order to have lasting impact. This project builds upon and enhances the efforts over the past few years o f Istanbul provincial and municipal officials. I t i s designed to ensure that those responsible for carrying out the plans that have been developed will be continually involved in the process o f implementation and in determining the specific solutions to be achieved.

21

Annex 2: Major Related Projects Financed by the Bank and/or other Agencies

TURKEY: SEISMIC RISK MITIGATION-TR

Bank-financed projects:

Turkey - Marmara Earthquake Emergency Reconstruction WEER) Project (P068368) [Active; PDO - Satisfactory; P - Satisfactory]. The main objectives o f the project are to help restore the living conditions in the region o f Turkey that was affected by the August 17, 1999 Marmara earthquake, support economic recovery and resumption o f growth, and develop an institutional framework for disaster risk management and mitigation. Closing date has been extended till M a y 3 1 , 2006.

Turkey - Emergency Recoverv Loan (EERL) (P068394) [Closed; Outcome: Satisfactory]. A key objective o f the loan was to assist the government to respond quickly and effectively to the impact o f the Marmara earthquake o f August 17, 1999, and help ensure that social assistance payments to earthquake victims were paid and keep Turkey’s economic reform program on track.

0

Turkey - Emergency Flood and Earthquake Recoverv (TEFER) Proiect (P058877) [Closed; Outcome: Satisfactory]. The objective o f the project was to assist the government in : (a) restoring basic infrastructure in municipalities and rural areas affected by 1998 flood by repairing structures and facilities o f economic and social importance; (b) providing assistance to restore housing in the earthquake affected province o f Adana and (c) reducing vulnerability to future floods and earthquakes.

Turkey - Earthquake Rehabilitation and Reconstruction Proiect (POO9099) [Closed; Outcome: Satisfactory]. The objective o f the .project was to assist the Government in carrying out the emergency reconstruction program for the Erzincan region affected by 1992 earthquake through: (i) rehabilitation and reconstruction, and (ii) development and implementation o f seismic r isk prevention and mitigation measures.

Programs o f other donors:

Japan International Cooperative Agency (JICA) has financed several r isk assessment studies including a major microzonation initiative for the Istanbul metropolitan region.

Japan Bank for Intemational Cooperation (JBIC) is providing a loan for seismic strengthening o f bridges and viaducts in Istanbul.

Government o f France via SOFREMI loan will finance procurement o f emergency vehicles including rescue helicopters and ships for the Istanbul Metropolitan Municipality.

Government o f Switzerland - following the 1999 Marmara earthquake the Government o f Switzerland has worked with f i re brigades and community groups in limit and Adapazari to improve training and public awareness regarding natural disasters. This effort has been

22

expanded to Istanbul. The support was also p;ovided through a limited number o f specialized search and rescue equipment caches to the General Directorate o f Civ i l Defense in Istanbul,

The U.S. AIzencv for International Development (US AID) - supported training programs for neighborhood groups in Istanbul.

UNDP - has been implementing in several earthquake-prone locations the local capacity program for disaster prevention and preparedness through public awareness activities, and earthquake preparedness training for volunteer groups.

European Investment Bank - in the aftermath o f 1999 Marmara earthquake, the EIB has provided, parallel to MEER, loan financing for housing, infrastructure, and lifelines reconstruction in the affected region.

Government o f Spain - provided hnding for reconstruction and rehabilitation o f damaged infrastructure.

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Annex 3: Results Framework and Monitoring

TURKEY: SEISMIC RISK MITIGATION-TR

Results Framework

and facilities) is we l l prepared to a major earthquake.

Intermediate Results One per Component

Component A: Capacity o f the provincial and municipal public safety organizations in Istanbul to respond to major disasters i s enhanced; coordination between regional emergency response agencies, as w e l l as between the Istanbul authorities and the national government are improved.

Component B: K e y selected public facilities are retrofitted in order to ensure their operation in the aftermath o f a

Outcome Indicators K e y public facilities are retrofitted to resist a major earthquake; skills and technical capacities o f the relevant emergency response u n i t s are strengthened; building code enforcement and compliance with land use plans are improved.

Results Indicators for Each Component

Component A: N e w communication system i s installed and fully operational in emergency response facilities.

Emergency management information and communication systems are installed and used in daily operations.

The Governorship Disaster Management Center (AYM) i s strengthened.

The public safety units are provided with the adequate emergency response equipment.

The relevant agencies and volunteer groups are trained.

Component B Around 800 public buildings retrofitted

Feasibility assessments o f lifelines and vital infrastructure completed.

Vulnerabil ity assessment o f selected cultural heritage buildings completed.

Use of Outcome Information Formulate publ ic policies and xograms for seismic risk mitigation u1 the country risk-prone areas.

Use of Results Monitoring

Component A: Assess effectiveness o f the systems and training through a day-to-day application and mock exercises,

Define additional training needs.

Support municipal and provincial governments with decision-making tools.

Performance may feed into institutional changes in emergency management.

Component B: Replication o n the national scale o f the methodology for the priorit ization and strengthening o f publ ic facilities, based o n transparent criteria.

Exposure and wider use o f new seismic strengthening techniques by engineering and construction industry.

Informed decisions o n retrofittingheconstruction o f l i felines and vital infrastructure.

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Component C: Component C:

Improvement in compliance with building codes and land use plans in selected Istanbul municipalities.

Voluntary accreditation and training o f engineers has started.

Better enforcement o f building codes and progress made in implementation o f land use plans in selected municipalities.

Component C:

Revised policies and procedures for improved code enforcement.

Increased donor awareness o f need and opportunities to invest in protection o f cultural assets.

I

25

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Annex 4: Detailed Project Description

TURKEY: SEISMIC RISK MITIGATION-TR

Component A: Enhancing Emergency Preparedness (uS$73.46 million)

Objective. The objective o f th is component i s to enhance the effectiveness and capacity o f the provincial and municipal public safety organizations in Istanbul to prepare for, respond to and recover f rom significant emergencies, especially those arising from earthquakes.

Background. In recognition o f the expert forecasts on probability o f earthquake in North Anatolian Fault, and following the sobering experiences o f the August 1999 Marmara disaster, the metropolitan and provincial governments in Istanbul have undertaken a series o f initiatives to accelerate the pace o f preparedness among public agencies and, through on-going awareness programs, the general public. These efforts have enjoyed the strong, visible support o f a series o f Governors and Mayors in Istanbul and have galvanized the efforts o f numerous agencies, non- governmental organizations and the general public. W h i l e the pace o f preparedness at the national level has been slow, the mitigation and preparedness efforts o f Istanbul authorities have been substantial.

For example, both the provincial government and the metropolitan government have each constructed new emergency operations centers within the past four years. The municipal center ( M O M ) was completed and began operati,ons within a year o f the 1999 earthquake. Modeled after. a similar facility in Los Angeles County, M O M contains many state-of-the-art features and accommodations for each o f the municipal agencies that would need to respond to a variety of emergencies. The Provincial government has constructed a similar facility (AYM) that, when fully operational, will serve a similar purpose, including training classrooms and facilities for field training.

Both levels o f government, as well as mayors o f several o f the districts in the metropolitan region, have supported risk assessment ' studies l i ke the JICA assessment, inventories o f vulnerable structures and facilities, and widespread public awareness programs through informational brochures and media campaigns. A robust geographic information system - Urban Information System -- i s being developed that includes the location o f critical infrastructures and vulnerable structures.

Representatives o f the key public safety agencies meet regularly to develop, review and refine plans and procedwes for responding to a major earthquake. Large-scale exercises are held at least twice a year. Officials from the Turkish military are active participants in these planning and exercise efforts and they have developed detailed plans for how they wil l respond in support o f civilian authorities.

Though the level o f commitment and action by provincial and municipal authorities i s impressive, significant and tangible, the level o f r isk i s so severe that important needs remain unmet. For example, budgetary constraints have delayed achieving full operational status for the AYM facility.

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Personnel levels and equipment for the f i re brigades and emergency medical services are wel l below those o f other large, high risk metropolitan areas. The provincial ministry o f health has 65 operational ambulances and no communications l i n k s with area hospitals. 500 fire fighters are on duty at any time. They operate out o f 38 stations spread over a large, densely populated city with an intricate and often archaic road and street system that makes access to some high risk areas al l but impossible.

Communications l i n k s between the fire, security, emergency medical agencies and the various crisis centers are marginally adequate for day-to-day operations and would be immediately overwhelmed in the aftermath o f a significant earthquake or other large-scale emergency. Each function monitors the activities o f their public safety colleagues, but they operate on separate frequencies and there is no significant capacity for interoperable communications at the field level.

AYM and AKOM, the principal crisis management centers, are not able to share information electronically and the various crisis management centers o f other public safety agencies are dependent on the same l imited wireless communications networks that are used for dispatch o f critical resources.

'

There are no systems in place that would allow each o f the crisis centers to have a common situational awareness about conditions fol lowing a major disaster or to systematically track resource requests, resource status, and projected needs. In addition, communication and information linkages between the provincial and municipal authorities in Istanbul and key agencies o f the national government in Ankara remain much as they were in 1999. Since any major disaster in Istanbul wil l inevitably require prompt assistance from unaffected areas throughout Turkey, rapid notification, reliable communications systems and the ability to share information about what has occurred and what resources are most critically needed will be essential to an effective emergency response.

The issues summarized above -- especially those involving communications, information gathering and sharing, and enhancing the response capacity o f key agencies -- are the principal areas to be addressed in this project.

This project builds upon and enhances the efforts over the past four years o f Istanbul provincial and municipal officials. I t i s designed to ensure that those responsible for carrying out the plans that have been developed will be continually involved in the process o f implementation and in determining the specific solutions to be achieved.

Component Description

Enhancing the emergency preparedness and response systems in Istanbul i s to be accomplished through five principal activities: (a) improving the emergency communications systems, capacity and capabilities among and between the key public safety agencies, including linkages to national authorities in Ankara; (b) establishment o f an Emergency Management Information System that l i n k s the various key crisis centers in the metropolitan area as wel l as national authorities in Ankara; (c) upgrading the operational capacity o f public safety agencies through

29

the acquisition o f equipment as wel l as training and awareness programs; (d) strengthening the institutional capacity o f AYM; (e) public awareness and training.

Sub-component A. l - Emergency Communications System (US$33.16 million)

Communications is the cornerstone o f an effective emergency response. The current emergency communications systems in the Istanbul metropolitan region have numerous, significant limitations that are widely recognized by the public safety agencies and key governmental officials.

Each agency - security, f i re brigades, emergency medical - operates its own system that is capable o f voice-only transmissions. Each system is essentially an “open channel’’ network that operates on a “first come, f i rst serve” basis with minimal ability to prioritize calls. There i s high background noise on the networks. Each agency monitors the other networks at the call centers but there is no effective “interoperability”, i.e. the ability to communicate between functions on a common network. There is no ability to transmit data over the networks or to arrange for groups to talk clearly. Key facilities, e.g. hospitals, are not linked to the ambulance services. The limitations o f the current systems wil l almost inevitably seriously compromise an effective, coordinated response to a major crisis.

‘

The component would support the establishmenthpgrade and installation o f an integrated communications system so that al l public safety agencies such as police, fire brigades, c iv i l defense, heath care providers and ambulance, at the provincial and municipal levels communicate effectively at the tactical (field) level using both voice and data. The system wil l also enable the communications to the relevant crisis centers and key facilities including national offices in Ankara. The system wil l have several layers o f backup so that i t wil l continue to be operational in the event o f catastrophic event. The component wil l also support training o f system users, training o f system maintenance and operations.

Currently, a systems analysis is being conducted by international consultants to define the specific technical features and equipment necessary to achieve the objectives o f the upgraded system. This work builds upon efforts undertaken by the provincial and municipal governments to consider alternative strategies for, resolving what they recognize are serious limitations with the existing communications systems.

Sub-component A.2 - Emergency Management Information System (US$7.50 million)

Large-scale emergencies involving multiple agencies and multiple activities are managed at crisis centers. Crisis centers bring together representatives o f involved agencies to make critical decisions regarding response priorities, determine what resources are available, identify what resources are needed, locate those resources and ensure that they are deployed and, should the situation change, reassigned.

These operations centers are responsible for developing the situational awareness o f what has occurred, what the impacts have been’ and what actions are needed to minimize the effects o f the

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crisis. In a large-scale emergency multiple crisis centers will be activated by the municipal and provincial governments, the involved agencies and ministries and at the national level in Ankara.

I t is important that each center has a shared understanding or common view o f what has occurred, what actions are being taken, what priorities have been established and what resources are needed and deployed. An Emergency Management Information System is the key to achieving this coordinated response.

Currently the multiple crisis centers that would be activated following a major earthquake in Istanbul can only communicate via the same wireless, voice-only systems referenced above. W h i l e municipal and provincial authorities are developing a robust geographic information system (GIS) that graphically displays the region's critical infrastructure, this important management tool cannot currently be shared between the centers or integrated with information regarding response priorities and resource allocations. An Emergency Management Information System makes the effective use o f GIS during a crisis possible.

'

The sub-component would support establishment o f an Emergency Management Information System that can collect, aggregate and display information related to a crisis, in real time, for use by the operations crises centers that would be established both in the Istanbul metropolitan region and at the national level in Ankara. This system should also support daily operations o f the public safety organizations such as c iv i l defense, fire brigades, police, traffic control and municipal governments. The component would also support data conversion, training in system operations and system maintenance.

Currently a systems analysis i s being carried out by international consultants, working in coordination with a users group from the provincial and metropolitan governmental agencies, to define the specific technical features and equipment requirements to support the implementation of an emergency management information system.

Sub-component A.3 - Strengthening the Institutional Capacity of AYM - the Governorship Disaster Management Center (US$9.60 million)

The provincial government has copstructed a new facility to be used as an operational and training center for emergency management. Whi le the construction has been completed budgetary constraints have delayed making the facility fully operational. Since this facility provides the primary point o f coordination between the municipality and the national government in Ankara, the project wil l provide support and technical assistance to the provincial government to enable the facility to become operational including computers, visual displays, and other equipment. In addition, the project will provide technical assistance to the provincial government to develop the organizational structure and operational procedures to strengthen i t s capacity to carry out the roles assigned to it.

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Sub-component A.4 - Upgrading the Emergency Response Capacity in the Istanbul Metropolitan Region (US$15.20 million)

The primary emergency response agencies (fire, security [police], emergency medical teams) in Istanbul - the “first responders” - have many critical needs to enable them to cope with the challenges they wil l face following a major earthquake. While the above-outlined activities under th i s component wil l provide much o f the communications and information infkastructure to enhance response, i t is essential that the units and personnel at the field level have adequate equipment, facilities and training to support their efforts.

Because of the nature o f the building stock - largely concrete arid brick - there are relatively few structural fires in Istanbul. The f i re brigades in Istanbul, much like those throughout Turkey, are staffed at a level below that for large metropolitan areas. Istanbul has 1500 firefighters with 500 on duty per shift assigned to 38 stations. Unique demographic features, including the fact that the metropolitan area is divided by the Bosporus and laced with an intricate road and street system with many areas virtually inaccessible, add to the challenges the department faces.

By contrast, the city o f Tokyo, which also i s faced with a severe seismic risk, as well as a history o f catastrophic fires, has over 17,000 fire fighters housed in 80 stations with 207 branches. The City o f New York has 11,400 fire professionals and 2800 emergency medical technicians on staff, London has over 7000 f ire fighters while the City o f Los Angeles has 3,376 fire fighters working out o f 103 stations, augmented by the Los Angeles County Fire Department that has over 5500 personnel.

The emergency medical services are similarly small in size. Sixty five ambulances are currently available to the provincial Ministry o f Health; they have set a goal o f having 100 units operational. Emergency communications systems provide for no links to the area’s hospitals and, with the exception of arrangements made at a few f i re stations, there is l i t t le coordination between f ire response units and emergency medical actions.

This sub-component wil l support the financing o f equipment for “first responder” agencies in Istanbul as well as training and on-going maintenance costs. A needs assessment i s currently underway by international consultants, working in close consultation with local officials, to identify and prioritize the specific needs and equipment standards to be used and to ensure that the initiatives supported through this project are coordinated with efforts undertaken by the government and international donors.

The project wil l support the acquisition o f equipment - e.g. response vehicles, upgrades o f emergency medical support teams, rescue equipment, command vehicles, and personal protective gear.

Sub-component A.5 - Public Awareness and Neighborhood Community Volunteers (US$8.0 million)

As part o f enhancing emergency response capacities the project wil l provide support to the disaster awareness program, as well as training for the volunteer groups in the selected areas o f

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Istanbul identified to be at a high seismic risk, in an effort to prepare disaster-prone communities to respond to emergencies in a swift and organized manner. This wil l be realized through the community-based disaster awareness program, as well as training for the volunteer groups. Evidence from earthquakes and other Datura1 disasters, including those in Turkey, clearly demonstrates the importance o f a knowledgeable public who can make a critical difference in reducing the loss o f l i fe in the immediate aftermath o f an earthquake.

The project will support public information campaigns aimed at increasing public awareness of seismic risks, and training to school children, community groups, and the business community in preparedness and mitigation measures. This component wil l disseminate educational and other materials already available but not yet widely distributed as well as develop materials for radio and television.

Creating and sustaining volunteer groups to provide assistance in preparedness and response efforts i s a challenge worldwide. Numerous groups piloted volunteer initiatives following the 1999 earthquake, with varying degrees o f success. One program that shows particular promise is the Neighborhood Disaster Support (MAG) program funded by the Swiss Agency for Development and Cooperation (SDC). SDC mobilizes neighborhood groups by working through Muhtars (the lowest level o f govemmental structure in Turkey). Four to five ten-person teams per neighborhood are targeted and, through experiences gained in projects in Kocaeli province, SDC has developed training programs and equipment caches. The teams participate in a 36-hour training program conducted by professionals from C iv i l Defense, Fire Brigades and medical associations, and in periodic exercises.. SDC creates a small self-management group that maintains contact information, arranges maintenance, updates training and organizes social activities to strengthen team cohesion.

The project wil l work in coordination with volunteer organizations including SDC; SDC wil l provide the organizational oversight o f the effort and ISMEP will provide fimding to conduct training programs, refresher training and field exercises, as wel l as equipment caches to support the neighborhood MAG teams to be created in the Istanbul Metropolitan area. The component wil l be implemented in close coordination with the .General Directorate o f C iv i l Defense, with the support o f a professional public relations firm.

Component B: Seismic Risk Mitigation for Prioritv Public Facilities (US$309.55 million)

Objective. The objective o f this component i s to implement structural retrofitting measures to reduce the risk o f future earthquake damage to essential facilities, in order to ensure their continuing function and to reduce casualties in the event o f an earthquake. In the case o f especially critical medical facilities where retrofitting i s deemed to be unfeasible, some reconstruction may be included in this component.

Essential public facilities include those that serve a public function critical to the disaster response and recovery operations o f the community and to social and community function in general, as well as buildings regularly used by large numbers o f the public where 'life-safety i s o f special concem. These include schools and hospitals, disaster response and information centers, and governance and public order management centers. Lifelines including gas, water supply,

3 3

power and transport infrastructure i s being largely retrofitted by other donors or by the private companies that operate them. However the component will support a Risk Assessment o f vi tal infrastructure (lifelines) to identify remaining gaps, and recommend an action plan to implement needed mitigation measures. The component will also include a small technical assistance program to address the vulnerability o f cultural assets, which are important to Istanbul’s economy, and which in many cases have global cultural heritage value.

Background. The earthquake o f 1999 demonstrated the seismic vulnerability o f the building stock o f the Istanbul and Marmara region. In addition to the human and economic losses, essential facilities such as hospitals, f i re brigades, and rescue equipment were rendered inoperable or destroyed, resulting in chaos in the national emergency response activities and delaying the delivery o f emergency aid to earthquake victims. After the earthquake, the Municipality o f Greater Istanbul and the Governorate o f Istanbul began to develop a comprehensive strategy to integrate several initiatives necessary to reduce the city’s vulnerability. Among these i s addressing the challenge to strengthen key public facilities that must be capable o f remaining in operation in the event o f an urban earthquake.

In response to the Marmara earthquake, parliament passed laws that delegate many o f the mitigation and emergency response functions to the provincial and municipal levels o f govemment. Local administrations, especially Istanbul, followed up by making quick progress in, among other initiatives, carrying out vulnerability assessments and making investments in retrofitting (structural upgradinglstrengthening).

Because o f its recognition o f the serious risks prevailing in building code enforcement, the Istanbul Provincial Government has carried out an inventory o f at-risk structures, establishing priorities for retrofitting activities and initiating some retrofitting work on public assets with support from international donors such as JICA, which supported the drafting o f a special report on Istanbul’s vulnerability to earthquakes, including limited microzonation and earthquake scenario studies. Istanbul Municipality estimates that the metropolitan area’s building stock o f approximately 1.5 mi l l ion structures includes about 12,000 structures serving public functions, many having priority in disaster response and recovery operations, such as hospitals, schools, and emergency management and governance centers.

The agencies responsible for critical facilities have begun to fund and implement retrofitting o f key structures. In addition, with the help o f a $100 mi l l ion loan from the government o f Japan, several heavy volume bridges and overpasses may be retrofitted. The Government has identified about 3,600 public structures remaining in need o f retrofitting following the Marmara quake, and estimates that about U S $ l b i l l ion is needed to complete the work. Thus, while much work has been done, the unmet needs remain significant. The earthquake risk reduction activities to be supported through the project under this component are therefore designed to build upon and expand the efforts o f local and regional govemments, focusing on critical public facilities and assets.

Component Description

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The component will focus on four categories o f buildings (outlined below) that are essential to the disaster response and recovery operations or otherwise serve important public functions in the community. These categories include buildings only, and comprise a long list o f nearly 2,500 of the 3,600 public structures that require retro-fitting. The Component wil l finance the retrofitting o f up to 840 o f these, selected in order o f priori ty based on specific criteria as described below. This represents about a third o f the estimated total retrofitting need for public buildings in these categories. A l imited number o f building reconstructions may also be included, if feasibility studies demonstrate a) criticality for emergency response as wel l as general function, and b) costhenefit analysis (including life-cycle cost analysis) that brings into question the technical and cost effectiveness o f retrofitting. Non-structural elements wi l l also be secured as a part o f the structural work, as described further below. The component will also support the development o f a vulnerability assessment o f lifelines and a vulnerability inventory for cultural heritage assets, which are important to Istanbul’s economy.

Quality control o f design and construction wi l l be provided through a) design review by international seismic experts, b) site supervision and technical control by IPCU engineers experienced with seismic retro-fitting and earthquake reconstruction supervision, and c) on-site internationally procured construction supervision consultants, as done under the previous Bank- funded TEFER and MEER reconstruction projects.

The provincial Government, in consultation with the sectoral provincial government agencies, has identified a list o f priori ty buildings planned to be retrofitted. The inventory and prioritization process was developed through a series o f meetings between the Governor’s office, stakeholders and academicians as detailed below.

Component B.1- RetrofittingDXeconstruction o f Priority Public Facilities (US$303.85 million)

The types o f public facilities to be considered eligible for seismic strengthening through project financing are categorized as follows:

Category A: Medical Facilities 0 Hospitals 0 District polyclinics.

Category B: Educational Facilities Schools

0 Student dormitories

Category C: Administrative Facilities 0 Facilities essential for the administrative functioning o f communities

at risk after disaster, including communication and coordination centers

Category D: Social Service Facilities

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Child protection centers Orphanages Elderly housing

The cost benefit threshold for eligibility for project financing wil l be determined through the feasibility studies being carried out with PHRD funding, and is expected to be approximately 30% o f replacement cost, depending on function, age and sector operational requirements such as usefulness o f the structure’s plan from the point o f view o f b c t i o n (potential functional obsolescence-medical function with respect to adaptability to modem medical technology and service provision). Certain hospital structures may be considered for complete reconstruction if feasibility studies demonstrate a) criticality for emergency response as wel l as general function, and b) costhenefit analysis (including life-cycle cost analysis) brings into question the technical and cost effectiveness o f retrofitting

In addition to strengthening the hospital buildings to protect the emergency response capacity and the lives o f the patients and staff, i t is also necessary to secure non-structural components such as medical equipment and infrastructure in order to avoid loss o f function and secondary damage and to prevent injury during an earthquake. While this need is especially important in hospitals, i t applies also to first response facilities and other structures where technical infrastructure must continue to operate immediately after an earthquake. The retrofitting work under the component will include the securing o f such critical non-structural elements. Items to be included are those physical elements required for the continuing safe and effective operation o f the facility, such as equipment, stored supplies and technical infrastructure, as wel l as physical access and circulation within the compound, in the case o f hospitals.

During the retrofitting operations, the social and functional impact. o f structural interventions in hospitals wi l l be minimized through special planning activities involving hospital staff and other stakeholders, the design engineers, and the contractors. The planning for impact reduction as wel l as i t s monitoring during construction wil l be ensured through a consultancy funded under the project. The prioritized list includes a few school buildings o f historic and/or cultural importance. Feasibility studies wil l determine whether cost-effective, non-intrusive retrofitting can be implemented in these cases. Decisions whether retro-fitting i s economically and culturally feasible, wil l be made on a case-by-case basis, including consultations with the Bank. Turkish law governing the protection and reconstruction o f these structures would apply.

Selection process

Under the leadership o f the Istanbul Governorship Disaster Management Center (AYM), a comprehensive inventory o f critical facilities has been developed through a transparent prioritization process involving stakeholder agencies, using building-specific technical data, transport access data (hospitals and schools), distance from fault lines, importance in the Istanbul Disaster Management Plan, population on-site and general population served and other relevant characteristics depending on the type o f facility, taking account criteria for each sector as indicated in the weighting formula tables below.

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The process included workshops that gathered representatives o f the sectoral provincial directorates and academicians, to agree on the allocation o f project resources between sectors and among types o f facilities, as well as criteria for prioritization, including coefficients to be used to weight relative importance for the sectors and role in the overall Istanbul Emergency Management Plan. Conclusions reached during the workshop in regard to the allocations and criteria coefficients served as a basis for completing the priority l i s t o f public buildings by the AYM o f the Governorate working with a small task group o f stakeholders. The process has provided a rationalized prioritized l i s t o f facilities requiring seismic retrofitting in order to serve the ci ty in the event o f a major earthquake or other disaster.

No.

1.

2.

The tables below indicate the selection criteria and weighting formula used for public facilities prioritization and selection.

Score

20

CRITERIA

ACCESSIBILITY DURING DISASTER(X0,20)

0 Access from air (x 0,05) I (yes)-100 I (no)-0 0 Access from ground (x 0,15) between 0-100

20 TECHNICAL FEATURES OF BUILDING (X0,20)

I 4. 5.

0 Construction year after 1980 (40) 0 Construction year before1 980 (I 00)

10 DISTANCE TO EPICENTER (X0,Io) 3.

0 Distance to Fault Line >20km. (40) 0 Distance to Fault Line C20km. (100)

Importance in Disaster Management Plan (Strategical Location)* (x0,40) 40 Capacity (bed) (x0,IO) 10

0 0-100 bed (30) 0 100-500 bed (60)

500 bed and more (I 00) I TOTAL I 1 0 0

Special features like specialization of hospitals, surrounding open space for potential mobile units, etc., are also taken into account in discussions with health sector officials.

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Table 2: PRIORITIZATION CRITERIA FOR SCHOOLS

No.

2'

3.

CRITERIA Score 10 ACCESSIBILITY DURING DISASTER (Xo.10)

Access between 0-1 00 40 TECHNICAL FEATURES OF BUILDING (x0.40)

0 Construction Year (x0.20)

0 Number of story (x0.20)

(a)before 1965' ( I 00) (b) between 1965- 1980 (60)

(c) after 1980 (40)

(a) > 5 story (100) I (b) 3-4 story (60) I (c) 1-2 story (20) 10 DISTANCE TO EPICENTER (x0.10)

I Distance to Fault Line >20km. (40) 1 4. 5.

Distance to Fault Line c20km. (100) Importance in Disaster Management Plan (Strategical Location) (x0.10) 10 Number of Student (x0.20) 20

~~ ~

0-500 student

6.

130)

1000 student and more (1 00)

Half day (60) Working Hours (x0.10) 10

I 500-1000 student (60 j 1

No. CRITERIA I. TECHNICAL FEATURES OF BUILDING (X0.20)

0 Construction Year (x0.10)

Number of story (x0.10) (a) before1 965 (1 00) I (b) between 1965-1980 (60) I (c) after 1980 (40)

(a) > 5 story (100) , I (b) 3-4 story (60) I (c) 1-2 story (20)

3m DISTANCE TO EPICENTER (x0.10)

Score 20

10

Wholeday (100) I TOTAL I 100

4. 5.

6.

Table 3: PRIORITIZATION CRITERIA FOR ADMINISTRATION BUILDINGS

. . Distance to Fault Line ~20km. (100)

Importance in Disaster Management Plan (Strategical Location) (x0.50) 50 Number of Personnel (~0 .10) 10

0-50 (30) 50-200 (60) 200andmore (100)

8 hrs. (60) Working Hours (x0.10) 10

more than 8 hrs. (100)

I

Distance to Fault Line >20km. (40)

Table 4: PRIORITIZATION CRITERIA FOR DORMITORIES AND SOCIAL SERVICES BUILDINGS

No. CRITERIA

ACCESSIBILITY DURING DISASTER (Xo.10)

Accessibility between 0-100

TECHNICAL FEATURES OF BUILDING (X0.40) 2.

Score 10

40

.I

I I DISTANCE TO EPICENTER (Xo.10) I '" I

0 Construction Year (x0.20)

0 Number of story (x0.20) (a)before 1965 (1 00) I (b) between 1965-1980 (60) I (c) after 1980 (40)

(a) > 7 story (100) I (b) 4-6 Story (60) I (c) 1-3 Story (20) A n

4. 5.

Table 5: PRIORITIZATION CRITERIA FOR DISTRICT POLYCLINICS

Distance to Fault Line >20km. (40) Distance to Fault Line c20km. (100)

Importance in Disaster Management Plan (Strategical Location) (x0.15) 15 Number of Student or People (x0.25) 25

0-500 student (30) 500-1000 student (60) 1000 student or more (1 00)

No. CRITERIA 1. DISTANCE TO EPICENTER (X0.20)

Score 20

500 people and more (100) I TOTAL 1100

2. 3.

The process o f selection began with a long list o f buildings within the four sectors considered to ,be in need o f retro-fitting, as shown in the table below. The long list totals 2473 buildings out o f the approximate total o f 12,000 public sector structures (which includes bridges and other structures) in Istanbul, or about 25% o f the total. The weighting and prioritizing activities resulted in a short l i s t o f 840 buildings estimated to absorb the funds available in the component and covers about 34% o f the estimated total need for retrofitting. The list o f selected buildings is available in the project files. The final prioritized l i s t includes the numbers o f buildings by sector as follows:

Distance to Fault Line >20km. (40) Distance to Fault Line ~20km. (100)

Importance in Disaster Management Planning (Strategical Location) (x0.50) 50 Population Served (x0.30) 30

0-100 people (30) 100-500 DeoDle (60)

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Table 6: Prioritization Results (numbers of buildings)

Facility Long Short Percent List List o f L L

Polyclinics S cho o 1 s

24 1 14 6% 1783* 598 34%

I Administration I 68 I 45 1 66% I Student dormitories Social Services

total

46 26 57% 27 27 100%

2460 840 34% I I

*an additional +/- I000 school buildings have been or are being retrofitted

The prioritized list includes 25 hospitals with retrofitting designs ready and available from the previously Bank-financed Erzincan reconstruction project, permitting procurement o f construction contracts for a number o f high-priority buildings early during project implementation. These designs were reviewed during project preparation to ensure appropriateness under the project. Feasibility studies and design work for the additional buildings in the project wil l be carried out during project implementation. These wil l be reviewed by international seismic engineers. Opportunities to apply innovative seismic mitigation methodologies wil l be identified.

Sub-component B.2 - Risk Assessment for Lifelines and Vital Infrastructure (US$2.45 million)

The project wil l finance an integrated seismic risk assessment for gas, water supply, power, telecommunications and transport infrastructure. The JICA study provides initial potential damage assessments under two earthquake scenarios which indicate vulnerabilities in the lifeline systems. Considerable mitigation work has been accomplished but a detailed risk assessment i s recommended a) to identify remaining needs, and b) to lay the foundation for follow-up work on investments needed to address vulnerability o f the l i fe l ines , and vital infrastructure, including prioritization o f investment projects, and providing opportunities for other donors’ contributions to reducing the risk to these critical facilities. In addition, this subcomponent wi l l finance the development o f methodologies for risk assessment o f commercial and industrial facilities.

Sub-component B.3 - Risk Assessment of Cultural Heritage Buildings (US$3.25 million)

Istanbul i s a cultural and historic center o f wor ld importance. Many structures on the World Heritage l i s t are found in Istanbul, and because o f these assets, the city has for centuries been a center for the study o f eastern and western history and culture. However, perhaps more important to the city’s inhabitants and the country as a whole is the fact that Istanbul’s cultural assets contribute significantly to the local and national economies because o f their strong attraction to tourists and scholars. Interest among international experts to address the seismic vulnerability o f Istanbul’s cultural patrimony has increased since the Marmara quake, and a number o f private and bilateral initiatives have attempted to come to terms with the challenge o f

40

protecting them. However, both the scale o f the problem and the broad interest in taking action have constrained the development o f a coordinated approach.

Recently, the Government has drafted an action plan comprising i) developing a comprehensive inventory o f the cultural assets o f Istanbul, ii) conducting detailed feasibility studies to determine seismic vulnerability and recommend technical mitigation measures, and iii) carrying out design and construction under a long-term (20-year) plan.

The Component will include funding o f the f i rst step (inventory), and funding for applying the second step (detailed feasibility studies) to selected high priori ty assets, as identified in the first step. The project may also provide limited funding for technical assistance to help establish a coordinated approach that wi l l enable and facilitate action by interested donors and expert groups.

Component C: Enforcement of BuildinP Codes (US$7 million)

Objective. The objective o f this component i s to strengthen the institutional and technical capacity o f the Greater Istanbul Municipality and district municipalities to enforce building codes and compliance with land use plans.

Background. The inadequacy o f the housing stock in terms o f seismic resistance i s the result o f a combination o f several factors. Constructions have often taken place o n sites whose geologic characteristics make them unsuitable for housing or whose characteristics are insufficiently known, making it impossible to apply the correct building codes. In this respect i t must be noted that much illegal construction has taken place on state owned land that i s il legally occupied due to the insufficient availability o f private land. Pertinent building codes have not been followed, as their application was deemed too costly. As a result, many buildings, although technically adequate elsewhere, may not resist expected seismic events on the site o f their construction.

In the absence o f code enforcement, building standards have further slackened as a result o f prof i t maximization, to the point where the buildings would be unsafe. The addition o f extra floors to existing buildings, without obtaining the required permit and other structural changes led to existing configurations which could not be structurally safe in case o f major earthquake. Prevalent changes in this respect are often made by shop owners, occupying the ground floors o f buildings, in attempts to extend the space available or to make the shop more easily accessible. Cutting o f support columns to widen the shop front i s probably the most egregious example.

Lack o f certification and accreditation o f engineers, inspectors and contractors have also amplified this problem. Currently, there i s no accreditation o f engineers or contractors, and potentially any graduate from an engineering school can design a building, and any person in Turkey could be a contractor. Most engineers and contractors have no l iabi l i ty insurance and which i s not legally required as part o f private construction.

W h i l e most building permits are issued in accordance with existing building code, often the final buildings do not comply with the original design. There i s often collusion between the home owner who would l i ke to have addition floors, the inspector, and the contractor.

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Component Description

The project would support the Greater Municipality o f Istanbul and the district municipalities to better enforce building codes and comply with land use plans. A study carried out during project preparation identified the following main reasons for lack o f enforcement o f building codes: (i) gaps in the legal and regulatory framework; (ii) lack o f certification o f engineers, inspectors, and contractors, (iii) lengthy processes o f approvals which open doors for corruption among civ i l servants, engineers, private inspectors and contractors; and (iv) lack o f public understanding o f the importance o f compliance with building code and land use plans.

The component wi l l include the following sub-components:

Sub-component C.l - Public Awareness (US$0.23 million)

The sub-component wil l support public awareness campaign to the wider community in regard to the importance for public safety o f compliance with building codes and land use plans. This wil l include advertisement in media, production o f T V and radio programs, meetings with contractors, etc.

Sub-component C.2 - Development of the Regulatory Framework (US$0.56 million)

The sub-component wil l built on the current work undertaken as part o f MEER project, and wil l further support the Ministry o f Public Works and Settlements in further studies and analyses in order to identify solutions and identify gaps in the regulations that would a im to enable the local authorities to better enforce the building code and increase the compliance with land use plans. The component wil l also support public consultation with stakeholder groups, and drafting o f the relevant regulations.

Sub-component C.3 - Voluntary Accreditation and Training of Engineers (US$l.20 million)

The sub-component wil l support the accreditation o f engineers on a voluntary basis, starting with c iv i l engineers who expressed interest in the scheme. The accreditation would fol low the standards used in the EU member countries. This wil l facilitate the entry o f Turkish Engineers to the EU market.

Sub-component C.4 - Streamlining of Building Permits Issuance Procedures (US$5.01 million)

The project will provide support to a limited number o f district municipalities, on a demand basis, to improve the efficiency of issuance o f building permits, ensure transparency, curtail corruption, and strengthen mechanism for public complaints. The purpose o f this focused support i s to demonstrate that practical measures can be undertaken to improve efficiency and to streamline building permits issuance while increasing transparency o f the process.

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The project wil l provide the following assistance: (i) re-engineering o f building permit issuance, including training, capacity building activities, and installation o f computer systems, including hardware, software and data conversion; (ii) hiring o f an independent private firm to inspect the compliance with building permits and to identify any illegal construction.

The component will also support the establishment o f hotline, to be operated by an independent private entity, to receive customer complaints. Files for al l complaints will be submitted to the Mayor for investigation and further actions.

Component D: Project Management (US$S.O million)

The objective o f this component i s to support the ISPA to implement the project in efficient and transparent way, and build the institutional capacity to sustain the implementation o f Seismic Risk Mit igation and Preparedness program beyond the l i f e o f the project.

The component wil l provide support to the Istanbul Project Coordination Unit (IPCU), responsible for project implementation, through provision o f contract staff salaries and other expenses, short term technical assistance, office equipment and fumiture, vehicles, training, and incremental operational costs. I t would further support monitoring and evaluation.

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Annex 5: Project Costs TURKEY: SEISMIC RISK MITIGATION-TR

Disbursement Category

Local Foreign Total

$million $million $million Project Cost By Component and/or Activity us us us Component A: Enhancing Emergency Preparedness 36.86 3 1.88 68.74

Component Total Cost Percentage of Bank Bank

Financing Financing (US$) % US$

Component B: Seismic Risk Mitigation for Priority 239.28 44.63 283.91 . Public Facilities

Civi l Works and Tech. Services Goods Consultants Services and Training Incremental Operating Cost

Component C: Enforcement o f Building Codes 4.35 2.06 6.41

292.93 72.24 28.38 3.87

Component D: Project Management 7.60 0.32 7.92

Total Baseline Cost Physical Contingencies Price Contingencies

288.08 78.88 366.96 16.26 3.31 19.56 3.68 9.79 13.48

Total Project Costs' 308.02 91.98 400.00 Interest during construction

Front-end Fee* 2.00 Total Financing Required 402.00

* To be paid by the Government

100 100 100 100

292.93 72.24 28.38 3.87

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Annex 6: Implementation Arrangements

TURKEY: SEISMIC RISK MITIGATION-TR

Institutional Analysis

Disaster Management Organization and Structure. Traditionally, disaster management in Turkey has been highly centralized. Local authorities administer directives from the Ministry o f Public Works and Settlement (MPWS) which has, in one reading o f L a w 7269, the lead responsibility for disaster affairs; governors (who are part o f the Ministry o f Interior) are expected to coordinate and mobilize the resources o f other agencies. The provincial authorities, as regional representatives o f national agencies, serve as the principal l inks to the central government’s operational facilities in Ankara. Mayors have relatively l imited direct authority and responsibility for disaster management. Minor crises are to be handled at the district or sub- district level. If the disaster exceeds capabilities at that level, the provincial Governor becomes involved. If i t is a major event, representatives o f the ministries o f the central government become involved and establish crisis centers. If there i s a national-scale natural disaster, a crisis center i s established in the office o f the Prime Minister that includes senior representatives o f at least 15 ministries, including the military.

.

Though the system has been highly centralized, ironically, there was no single national coordinating agency for disaster management, until formal establishment o f the TEMAD after the Marmara earthquake. In June 2000 the Government enacted the Decree to formally establish the Turkey Emergency Management General Directorate (TEMAD) under the Prime Minister’s office as a national coordination body for emergency management. The mandate o f the directorate include: (a) carrying out inter-institutional coordination; (b) supporting establishment o f emergency management centers within local governments; (c) preparing emergency response plans; (d) promoting . volunteer efforts; (d) coordinating procurement, warehousing and distribution o f relief materials.

The General Directorate o f Disaster Affairs (GDDA) o f the MPWS, historically responsible for disaster management and mitigation (GDDA i s divided into seven major departments: Earthquake Research, Disaster Damage Assessment and Survey, Emergency Rel ief and Machine Support, Planning and Indemnification o f Affected Populations, Disasters Fund Administration, Temporary Housing, and Prefabricated House Construction) has approximately 1200 personnel, including planners, architects, geoscientists, architects and engineers but evidences l i t t l e interest in emergency operations.

The GDDA, under MPWS, is responsible for reconstruction and rehabilitation in the aftermath o f disasters. The Red Crescent Society, the General Directorate o f C i v i l Defense (GDCD in the Ministry o f Interior), and the military also play a significant role in rescue and rel ief operations.

The General Directorate for C i v i l Defense (GDCD) has some 3000 personnel, with approximately 300 assigned in Ankara. GDCD rescue and r e l i e f teams are assigned nationwide, and are expected to intervene at times o f disaster to provide immediate assistance, though their level o f training, organizational structure, and equipment is inadequate. The G D C D administers the operations o f the C i v i l Defense College in Ankara that trains civi l ian government employees. ,

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Though over the last years TEMAD has not met a l l expectations in regard to i t s potential as a single coordinating body, recently it has intensified i t s efforts by taking the initial steps to enter into contracts to develop the design that would lead to the establishment o f the national emergency management center and a state-of-the-art emergency management information and communication systems. These efforts wil l be coordinated with the initiatives being undertaken as part of ISMEP through on-going interaction between the consultants and the expertise provided by user groups at the national, provincial and municipal levels. The agency also prepared a draft law to strengthen its disaster management in the country. The draft law calls for strengthening TEMAD's ability to coordinate the various government entities in the case o f a major earthquake, and for each local goverhment to establish a disaster management team. The draft law has been circulated widely in the country for comments and will be presented to the Cabinet in the coming weeks.

The operational responsibilities at the provincial level reside with governors. Each ministry has a unit responsible for some aspect o f disaster management. Rescue and rel ief operations are the direct responsibility o f the provinces or districts, with assistance provided by the central government.

Organization of Disaster Management in Istanbul. The overall responsibility for disaster management in the province o f Istanbul i s under responsibility o f the Governor. There are two key disaster management centers in Istanbul: the Istanbul Governorship Disaster Management Center (AYM) and the Istanbul Metropolitan .Disaster Coordination Center (AKOM); each having different roles and responsibilities. Provincial authorities are responsible for health, education, c iv i l defense, c iv i l works, security (police) and other areas falling under the authority o f the national government while the municipal agencies are responsible for the f ire brigades, water and gas, and some parts o f the transportation networks. In a case o f a major disaster, a l l o f these services and sectors within the boundaries o f the province are under the responsibility o f the Governor. In addition, the provincial authorities, as regional representatives o f national agencies, serve as the principal link to the central government's operational facilities in Ankara.

Both the provincial government and the metropolitan government have each constructed new emergency operations Centers within the past four years. The municipal center (AKOM) was completed and began operations within a year o f the 1999 earthquake. Modeled after a similar facility in Los Angeles County, M O M contains many state-of-the-art features and accommodations for each o f the municipal agencies that would need to respond to a variety o f emergencies. The Provincial government has constructed a similar facility (AYM) that, when fully operational, wil l serve a similar purpose, including training classrooms and facilities for field training. AYM will enable the Governor to lead emergency management operations in a case o f a major natural disaster in Istanbul, and will enable the coordination among the national government agencies in Ankara, line agencies in Istanbul, and the metropolitan and district governments.

The activities to be supported under ISMEP are designed to build on the self-initiated actions o f officials in Istanbul. In this sense, the ISMEP is entirely consistent with the strategies developed

46

in 1999 and, as importantly, consistent with the broader national strategy o f the government in 2004 in i t s emphasis upon decentralization as a fundamental objective.

Project Management Arrangements

In l ine with government decentralization agenda, project implementation would be placed under the responsibility o f the Governor o f Istanbul. A small Istanbul Project Coordination Unit (IPCU) would be established under the Istanbul Special Provincial Administration (ISPA). The Unit would be headed by a highly qualified project Director who wil l report directly to the Governor or h i s designee, and the General Secretary o f ISPA. Each relevant agency (such as Provincial Directorates o f Health, Education, Public Works, etc.) wil l nominate a senior staff t o be a liaison between the I P C U and their mother agency.

The IPCU wil l be responsible for project coordination, procurement, financial management, contract management, monitoring, and evaluation and reporting. The core I P C U staff will include, in addition to the Director, 2 Deputy Directors (one technical and the other for administration and finance), 2 procurement officers, 2 financial management officers, 5 engineers, a social scientist, an environmental engineer, and a monitoring and reporting officer. The number o f positions i s indicative and might be revised during project implementation.

In order to ensure full coordination among the various relevant agencies and the IPCU, Implementation Coordination Protocols wi.11 be signed between the ISPA and these agencies.

Some staff from the existing P I U under the Prime Ministry Office (implementing, among others, the MEER project) wil l be temporarily assigned to the 'IPCU, and once the ISMEP project becomes effective these staff may be permanently transferred to IPCU..

A Project Steering Committee would be established to oversee project implementation, and provide strategic guidance. The Steering Committee would be chaired by the Govemor o f Istanbul, and may include Directors o f the provincial departments o f the concerned ministries, representatives o f Istanbul Municipality, Treasury, SPO, TEMAD, Minis,try o f Public Works and Settlements, and the Director o f the PrU under the Prime Ministry Office.

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Annex 7: Financial Management and Disbursement Arrangements

TURKEY: SEISMIC RISK MITIGATION-TR

I 1. Implementing Entity

2. Funds f l ow 3. Staffing 4.Accounting Policies and procedures

,A. Project Financial Management

RATING COMMENTS

Satisfactory

Satisfactory Satisfactory Marginal ly

IPCU at I S P A wil l be responsible for project implementation.

The procedures will be documented at

Summary of Financial Management Arrangements

5. Intemal Audit 6. External Audit 7. Reporting and Moni tor ing 8. Information systems

OVERALL FM RATING

The task team has conducted an assessment o f the adequacy o f the project financial management system at Istanbul Project Coordination Centre (IPCU) at Istanbul Special Provincial Administration (ISPA). The current financial management arrangements for the project are marginally satisfactory to the Bank and an action plan to further improve the systems is agreed with ISPA.

satisfactory the project FM manual Not Applicable Satisfactory Satisfactory Unsatisfactory

Marginal ly Satisfactory

P C U will purchase and install a project management system.

A summary o f the conclusions for the project financial management purposes regarding Bank requirements are as follows:

Country Issues.

A Country Financial Accountability Assessment for Turkey was camed out in 2001. The C F A A report identified some weaknesses in the Turkish financial accountability, in both the public and the private sector. Since 2001 the financial management environment has improved in Turkey . In December 2003, the Public Financial Management and Control Law (PFMC) which establishes the legal framework for harmonizing and modernizing budgetary practices across al l of general government i s enacted in the Parliament , I t wil l reduce fragmentation and provide for a more comprehensive presentation o f the budget. The law wil l also allow for future decentralization o f financial control to spending agencies. Originally PFMC was to become effective in January 2005, but i t i s now postponed to January 1, 2006. The project wil l be implemented by Istanbul Project Coordination Centre (IPCU) that wil l be established under Istanbul Special Provincial Administration. The local administrations are subject to PFMC law

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and defined as part o f the general govemment. The PFMC L a w defines the following structure applicable to local administrations.

INHERENT RISK

1. Country FinariciaLManagement Risk

2. Project Financial Management Issues Overall Inherent Risk

CONTROL RISK

Budget preparation at SPAs wil l be done in accordance with PFMC; with a medium term perspective, consistent with the annual programs, development plans and SPAs own strategic plans.

High

Moderate High

Based on the CFAA report prepared in 2001.

This budget wil l be approved by the Provincial General Assembly and wil l be sent to the Ministry o f Interior.

1. Implementing Entity 2. Funds Flow 3. Staffing 4. Accounting Policies and Procedures 5. Internal Audit 6. Extemal Audit

SPAs wil l prepare Act iv i ty Reports at year ends to be submitted to the Ministry o f Interior.

Moderate Negligible Moderate Moderate NIA Negligible

An internal audit unit wil l be established at SPA level.

SPAs are subject to T C A audit. The current scope o f T C A audit i s l imited to conformity (regularity) audit. With PFMC T C A audit scope was expanded to cover financial and performance audit in addition to conformity audit.

The Government as part o f its decentralization reform agenda has enacted a new Special Provincial Administration Law on March 4, 2005 which became effective on the date o f its publication. This law delegates more authority to SPAs and i t s financial management clauses (regulating budgeting, accounting, organization structure o f financial management, reporting and auditing) are consistent with PFMC. Even though this law was enacted, the President has announced that he wil l apply to Constitutional Court for cancellation on the basis o f h i s assessment o f 13 articles as unconstitutional.

Risk Analysis.

A summary o f the risk assessment for the project in accordance with the Bank requirements i s as follows

Comments Risk

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7. Reporting and Monitoring 8. Information Systems Overall Control Risk

Risk Mitigation Strategy

Moderate Substantial Moderate

Country financial management risk -the C F A A has identified major weaknesses in the Turkish financial accountability, in both the public, private and the banking sector. These risks together with the developments in the sector incurred after the preparation o f C F A A has been explained in detail in the “Country Issues” section. The project financial management will be centralized at I P C U that wi l l be established at the Istanbul Special Provincial Administration.

Control risk - Until IPCU is h l l y established and experienced in project implementation the P I U currently implementing the MEER project will provide support to I P C U in complying with the action plan. The MEER PIU i s very experienced in the implementation o f Bank projects.

Implementing Entity

Project implementation responsibility wil l belong to the Istanbul Special Provincial Administration (ISPA). An Istanbul Project Coordination Unit (IPCU) would be established under the ISPA. The Unit would be led by a project Director who wil l report directly to the Governor or his designee and the General Secretary o f ISPA. Each relevant agency (such as Provincial Directorates o f Health, Education, Public Works, etc.) wil l nominate a senior staff to be a liaison between the IPCU and their main organization. IPCU wil l be responsible for project coordination, procurement, financial management, contract management, monitoring, and evaluation and reporting. The I P C U wil l include, in addition to the Director, 2 Deputy Directors (one technical and the other for administration and finance), 2 procurement officers, 2 financial management officers, 5 engineers, a social scientist, an environmental engineer, and a monitoring and reporting officer. The number o f position is indicative and might be revised in the course o f project implementation.

Some staff from the existing Project Implementation Unit (PIU) under the Prime Ministry Office (implementing, among others, the Marmara Earthquake Emergency Reconstructi’on (MEER) project) has been transferred to the’ IPCU, and these staff might be re-hired once the ISMEP project becomes effective. Until the IPCU is fully functional MEER PIU wil l continue to provide support in purchasing and installing the Project Management System (PMS) and preparing the financial management manual for the project. The MEER PlU is very experienced in the implementation o f Bank projects and i s h l ly capable o f providing support to IPCU.

The risk associated with the implementing entity i s assessed as moderate. Staff is already assigned to IPCU and i t s formal establishment will be completed fol lowing the negotiations.

Funds Flow

The project expenditures wil l be financed 100% from the Bank loan as permitted by the new financing parameters. The borrower wil l be the Undersecretariat o f Treasury. The Public Finance

50

and Debt Management Law (Law number 4749, dated March 28, 2002) gives the Treasury the right to allocate loans obtained from foreign sources to general and annex budget institutions. Since ISPA i s a special budget institution, the Treasury i s not able to allocate the loan for ISMEP to ISPA under the current legislation. However the Government o f Turkey decided that allocating project funds directly to ISPA is going to speed up project implementation. Therefore, the Law which amends some laws and decree by laws i s expected to be enacted in the coming months. The proposed Law would authorize the Council o f Ministers to transfer funds for the implementation o f the project.

In the new' Public Financial Management and Control Law (PFMC), special provincial administrations are included in the description o f general govemment. The PFMC regulates the general framework o f budget preparation and reporting procedures for SPAs. The new SPA Law approved by the President on March 4, 2005 regulates the budget allocation and execution procedures o f SPAs. The SPA budgets and final accounts wil l be agreed by the Province General Assembly and ISMEP wil l also be approved by the Province General Assembly. I ts budgeting and execution will be the responsibility o f ISPA.

There wil l be a special account for the project at the Central Bank o f Turkey in Euros. Since the project financing percentage i s loo%, payments for a l l expenditures under the project wil l be made from this account or through direct payments from the loan account. The IPCU Director and the Governor's Designee wil l be responsible for signing withdrawal applications.

The risk associated with the f low o f funds is considered as negligible.

Staffing.

Three staffs with satisfactory experiences and qualifications are provisionally assigned from the Prime Ministry PIU to IPCU. These staffs are at senior level, one for financial management and one for procurement.

The remaining positions wil l be advertised and recruitment to these positions including the second financial management staff wi l l be completed by August 1, 2005. Until full staff assignments to I P C U are completed, the MEER PIU will provide support IPCU. The required funding for the recruitment o f staff wil l also be provided from the MEER project.

The risk associated with staffing i s considered as moderate. Provisional staff assignments from MEER P I U are completed and additional staff wil l be recruited as required.

Accounting Policies and Procedures

The project accounting wil l be maintained separately within IPCU. The project accounting will be on a cash basis. The MEER PIU has prepared the terms o f reference for a consultant to establish a Project Monitoring System (PMS) at I P C U that wil l be used for project accounting, monitoring and reporting. The PMS wil l generate financial reports, procurement reports and wil l also be used for contract management. The MEER PIU will prepare the main chart o f accounts and the draft project financial management manual for the project. The TOR has been prepared

51

by MEER PIU and the contract with the consultant wil l be signed by 29 April 2005. Accounting procedures will be set out in. the financial management manual for the project. The financial management manual wil l cover (a) the financial and accounting policies and procedures for the project (b) organization o f the financial management (c) the financial management information system (d) disbursements (e) procedures for budgeting and financial forecasting (f) project reporting and (g) project planning procedures to be finalized. The draft project financial management manual wi l l be prepared by April 29,2005.

The risk associated with accounting policies and procedures i s considered as moderate. The MEER PlU has satisfactorily completed the preparation o f the TOR for the project financial management system and the contract with the consultant wil l be signed by April 29,2005.

Internal Audit

Currently there i s not an internal audit unit at ISPA. However the PFMC law which wil l be effective o n January 1, 2006 requires the establishment o f internal audit unit at SPAS. Until such structure i s established no reliance wil l be placed on internal audit.

Reporting and Monitoring

The I P C U will maintain records and wil l ensure appropriate accounting for the funds provided. Financial statements for the project wil l be prepared by the IPCU. The Financial Monitoring Reports 0;MR) wil l be prepared quarterly' and wil l be submitted to the Bank no later than 45 days after the end o f the quarterly period.

The format and the contents o f the FMR have been agreed between the Bank and the MEER PIU. The FMR for ISMEP includes financial reports, output monitoring reports and procurement reports. The financial management manual o f the project will include a section on the FMR. The PMS wil l be capable o f producing al l these reports.

The risk associated with reporting and monitoring i s assessed as moderate. The formats o f the FMRs are agreed with. They wil l be generated automatically by the system once it i s installed at IPCU.

Information Systems

The MEER PIU has prepared the terms o f reference for a consultant to establish a Project Monitoring System (PMS) at P C U that wil l be used for project accounting, monitoring and reporting. The PMS will generate financial reports, procurement reports and will also be used for contract management. The contract with the consultant to implement the PMS i s required wil l be signed by April 29, 2005. The PMS will be financed from the PHRD grant received for project preparation purposes and there i s allocation in the grant for this purpose.

The risk associated with information systems is assessed as substantial. A contract with the consultant will be signed by April 29,2005.

Strengths and Weaknesses

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a The significant strengths that provide the basis o f reliance on the project financial management system are (a) centralization o f al l project financial management functions at I P C U (b) support of the well established and very experienced MEER PIU.

Action 1. Contract will be signed with the consultant to establish the Project Monitoring System (PMS) 2. Draft Project Financial Management Manual prepared 3. Draft FMRs produced by the PMS 4. Recruitment o f additional FM staff completed

The significant weakness in the project financial management system i s that this i s the first Bank project in Turkey that wi l l be implemented by a Special Provincial Administration and therefore there i s no accumulated experience in the functioning o f financial management procedures at the provincial level.

D u e Date April 29,2005

April 29,2005 M a y 15,2005 August 1,2005

Act ion Plan

I t is concluded that the current financial management arrangements for the project are marginally satisfactory and the following action plan i s agreed with the borrower to bring the unsatisfactory arrangements to a satisfactory level.

Supervision Plan

During project implementation, the Bank will supervise the project’s financial management arrangements in two main ways: (i) review the project’s quarterly financial management reports as well as the banks‘ and project’s annual audited financial statements and auditor’s management letter; and (ii) during the Bank’s supervision missions, review the project’s financial management and disbursement arrangements (including a review o f a sample o f SOEs and movements on the Special Account) to ensure compliance with the Bank’s minimum requirements. As required, a Bank-accredited Financial Management Specialist wil l assist in the supervision process.

B. External Audit.

ISPA i s audited annually by Turkish Court o f Accounts. However T C A audit is geared towards compliance auditing only. With the PFMC and the draft T C A law which i s expected to be enacted soon, TCA‘s audit scope wil l include financial and performance audits as well.

Audits o f al l project audits in Turkey are done by Treasury Controllers and the annual project financial statements for ISMEP wil l also be audited by the Treasury Controllers in accordance with International Standards o n Auditing (ISA) and under TOR that will be cleared by the Bank before negotiations.

The risk associated with extemal audit i s assessed as negligible.

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Disbursement Arrangements

The project will be disbursing on the traditional disbursement techniques and will not be using FMR based disbursement.

One special account will be created for the project. A special account will be opened by the Treasury for ISPA in Euros at the Central Bank o f Turkey. The special account wil l have an authorized allocation o f Euros 20 million. Two authorized signatures who wil l be specified in the project FM manuals wil l sign the withdrawal applications. At the start o f the project, the init ial deposits will be limited to Euros 10 mi l l ion and the remaining portion o f the authorized allocation wil l be requested after cumulative disbursements reach a level o f Euros 30 mil l ion. The minimum application size for payments directly f iom the loan account for issuance o f special commitments i s 20% o f the special account allocation.

Applications for replenishment o f the Special Account wil l be submitted to the Bank o n a monthly basis, or when the balance o f the Special Account i s equal to about ha l f o f the init ial deposit or the authorized allocation, whichever comes first, and wil l include a reconciled bank statement as wel l as other appropriate supporting documents.

Use o f statements o f expenditure (SOEs): disbursements would be made against Statements of Expenditures for (i) works, under contracts costing less than $5,000,000 equivalent each; (i) goods, under contracts costing less than $500,000 equivalent each; (ii) services o f consulting firms under contracts costing less than $200,000 equivalent each; (iii) services o f individual consultants under contracts costing less than $50,000 equivalent each; (iv) training; and (v) incremental operating costs, al l under such terms and conditions as the Bank shall specify by notice to the Borrower. Detailed documents evidencing these expenditures would be reviewed and retained by IPCU. Disbursement for the financing of contracts exceeding the above l imits would be made on the basis o f full documentation. Disbursement and procurement documents using SOE procedures would be retained by I P C U for a period o f at least two years after disbursement and made available to World Bank staff and external auditors.

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Annex 8: Procurement Arrangements

TURKEY: SEISMIC RISK MITIGATION-TR

A. General

Procurement for the proposed project would be carried out in accordance with the World Bank's "Guidelines: Procurement under IBRD Loans and IDA Credits" dated M a y 2004; and "Guidelines: Selection and Employment o f Consultants by World Bank Borrowers" dated M a y 2004, and the provisions stipulated in the Legal Agreement. The various items under different expenditure categories are described in general below. For each contract to be financed by the Loan, the different procurement methods or consultant selection methods, the need for pre- qualification, estimated costs, prior review requirements, and time frame are agreed between the Borrower and the Bank in the Procurement Plan. The Procurement Plan will be updated biannually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

Procurement of Works: Eligible investments under th is category would be for: retrofitting o f the key structures and lifeline facilities that serve a public function essential to the disaster response and recovery operations. The buildings include hospitals, schools, dormitories, c iv i l defensehearch and rescue centers, and key administration centers. Lifelines are the utility services and transportation networks vital to disaster response and otherwise vital to the health and safety o f the community. A limited number o f building reconstructions, not to exceed the 20% o f the budget allocated for the retrofitting works, may also be included. In addition to strengthening the hospital buildings to protect the emergency response capacity and the lives o f the patients and staff, works contracts would be launched for securing/fixing o f non-structural components such as medical equipment and infrastructure in order to avoid loss o f function and secondary damage and to prevent injury during an earthquake.

The procurement wi l l be done using the Bank's Standard Bidding Documents (SBD) for al l I C B and by using the Bank's sample N C B documents for E C A Region for Works and Goods.

The works contracts to cost less than U S D 5 mil l ion per contract may be awarded through NCB. Any ambiguity regarding predominance o f the Bank's procurement rules in the case o f contracts conducted in N C B procedures wil l be overcome by using the Bank's sample N C B documents for E C A Region for Works. The conditions for using N C B are listed below from paragraph A to K below shall be discussed at the negotiations and made part o f the Loan Agreement. Based o n the performance o f the project coordination and implementation unit (IPCU) on the N C B contracts, the Bank wil l consider increasing the N C B Works threshold per contract to U S D 6 m i l l i on or above after one year o f implementation pursuant to effectiveness o f the Loan Agreement.

A. Eligibility

Bidding shall not be restricted to domestic bidders. N o restriction shall be applied to foreign bidders who wish to submit a bid.

B. Procedures

55

Invitations to bid shall be advertised in the Off icial Gazette and in at least one widely circulated national daily newspaper or in an electronic portal o f free access allowing a minimum o f 30 days for the preparation and submission o f bids.

C. Assessment o f the bidder’s qualifications

In the procurement o f goods and works, where pre-qualification i s not used, the qualifications o f the bidder who i s recommended for award o f contract shall be assessed by post-qualification, applying minimum experience, technical and financial requirements which shall be explicitly stated in the bidding documents and which shall be determined by a ‘pasdfail’ method, not through use o f a merit point system.

D. Participation by Government-owned Enterurises

Government-owned enterprises .in the Republic o f Turkey shall be eligible to participate in bidding only if they can establish that they are legally and financially autonomous, operate under commercial law and are not a dependent agency o f the Government. Furthermore, they wil l be subject to the same bid and performance security requirements as other bidders.

E. Participation by Joint Ventures

Participation shall be allowed from joint ventures on the condition that such joint venture partners wil l be joint ly and severally liable under the Contract.

F. Bidding Documents

Procuring entities shall use the Bank’s sample N C B documents for E C A Regian for Works and Goods and shall draft contract and conditions o f contract acceptable to the Bank.

G. Bid Evaluation

a) Evaluation o f bids shall be made in strict adherence to the monetarily quantifiable criteria declared in the bidding documents and a merit point system shall not be used.

b) Extension o f bid validity shall be allowed once only for not more than 30 days. N o further extensions should be requested without the prior approval o f the Bank

c) Contracts shall be awarded to qualified bidders having submitted the lowest evaluated substantially responsive bid.

d) N o domestic preference shall apply under National Competitive Bidding.

H. Price Adjustment

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Civ i l works contracts o f long duration (e.g. more than eighteen (1 8) months) shall contain an appropriate price adjustment clause.

I. Rei ection o f All Bids

All bids shall not be rejected and new bids solicited without the Bank’s prior written concurrence.

J. Contracts

All contracts shall be in writing, signed and stamped by authorized signatories o f the Purchaser and the Supplier and contain identical terms and conditions o f contract to those included in the tender documents.

K. Securities

Bid Securities should not exceed 3 % (three percent) o f the estimated cost o f the contract; Performance Securities not more than 10 % (ten percent). N o advance payments shall be made to Contractors without a suitable Advance Payment security. The wording o f a l l such securities shall be included into the bidding documents and shall be acceptable to the Bank

Procurement of Goods: Goods procured under this project would include equipment and materials needed for the eligible investments for: (i) emergency communication system; (ii) emergency management information system; (iii) upgrading o f emergency response capacity in Istanbul metropolitan region and (iv) supporting the Governor’s disaster management center, public awareness, neighborhood volunteers, municipalities and training o f target groups. The procurement wil l be done using the Bank’s Standard Bidding Documents (SBD) for al l I C B and by using the Bank’s sample N C B documents for E C A Region for Goods.

The Goods manufactured within the country and readily available in the local market to cost less than USD 500,000 per contract may be awarded through NCB. Any ambiguity regarding predominance o f the Bank’s procurement rules in the case o f contracts conducted in N C B procedures wil l be overcome by using the Bank’s sample N C B documents for E C A Region for Goods provided that either the Loan Agreement or the side letter should address the provisions A through K stipulated above.

Selection of Consultants: The Borrower wil l select and hire consultants for the (i) preparation o f bidding documents including the detailed design drawings , technical specifications and bi l ls o f quantities and for the construction supervision o f the selected buildings and l i f e lines. In addition to this consultants wil l be hired for (ii) feasibility studies; (iii) public awareness campaign and training (v) risk assessment for the cultural heritage buildings, lifelines, industry and etc; and (vi) enforcement o f building code. A consultant for the voluntary accreditation o f engineers and inspectors wi l l be employed on a single source basis.

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Consultant services also comprise the TA to support implementation o f the project, training and seminars, financial management assistance.

Operational Costs: procedures acceptable to the Bank.

which would be financed by the Loan would be procured using the

B. Assessment of the agency’s capacity to implement procurement

An assessment o f the capacity o f the Governorate o f Istanbul to implement procurement actions for the project has been carried out in February, 2005. The assessment reviewed the organizational structure for implementing the project.

Based on the discussions held by the task team and the Undersecretary o f Prime Minister, the Treasury, Governor o f Istanbul, Director o f the Turkey Emergency Management Administration (TEMAD), sector experts from the State Planning organization (SPO) , and the P I U Director o f the MEER Project, the project components wil l be implemented and coordinated by the Governorship o f Istanbul through a project coordination unit (IPCU) to be established under the Special Provincial Administration (ISPA) which is chaired by the Governor o f Istanbul.

The ISPA through IPCU wil l act with responsibility for overall project management and coordination in close cooperation with the relevant l ine ministries and Metropolitan and District Municipalities o f Istanbul. Treasury wil l be the Borrower and financial intermediary for the project. Treasury wil l allocate the funds from the Loan proceeds to the Special Provincial Administration (ISPA) o f Istanbul. A draft bill authorizing the Council o f Ministers to allocate the Bank’s Loan proceeds to ISPA for the implementation o f ISMEP project.

The IPCU wil l be authorized to carry out project implementation on behalf o f the ISPA o f Istanbul. The IPCU wil l be staffed by a Project Director, Deputy Director(s), FMS Manager, Procurement Manager and adequate number o f FMS and procurement experts, reporting, evaluation and monitoring expert, technical staff, environmental and social experts and necessary support staff as well as local and international individual consultants in contract management and supervision when and as needed. The number o f technical staff may be increased in the due course o f the project if and as needed. The MEER PIU has been supporting the I P C U during the project preparation until the I P C U i s fully established and functional. Some o f the MEER PlU staff meeting the required qualifications may be seconded to the I P C U on voluntary basis. MEER loan proceeds will be used for the I P C U staff fees and incremental operating costs until the proceeds o f ISMEP Loan i s available. The l ine ministries will second relevant staff that wil l cooperate and coordinate implementation activities with the ISPA. Public officers seconded by the ministries wil l locate at their own premises in Istanbul but specifically work for the ISMEP project. The PHRD grant, made available for this project, has been used to support the I P C U on technical, financiallaccounting, and procurement matters.

I t i s expected that establishment o f the core I P C U through an order f rom the Governor o f Istanbul wil l be completed M a y 10, 2005. All positions for the P C U staff would be advertised by M a y IO, 2005 and selected from the eligible qualified applicants by August 1 , 2005.

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The IPCU staff seconded by the MEER P I U will be also subject to selection process pursuant to the advertisement in this respect.

The key issues and r isks concerning procurement and management for implementation o f the project have been identified and include lack o f experience with the Bank-financed projects. The public servants seconded for the project implementation by ISPA, are recommended to be sent for training organized preferably by I L O at Turin /Italy, according to their needs for fbrther development o f procurement knowledge and qualifications and contract management,

The I P C U wil l be supported by consultant firms and individuals for the preparation o f designs, bidding documents and supervision o f works if and as necessary.

Given the fact that the gaps and loopholes existing in the previous legislation which was subject to the recent CPAR conducted in 2001 were substantially removed by the new Public Procurement L a w ( Code 4734 & 4735) effective from January 1, 2003 and assuming that the I P C U wil l have the necessary capacity, including the qualified procurement staff and supported by the MEER PIU which has highly experienced staff in Bank’s procurement assisting the I P C U in the preparation o f bidding documents, it i s recommended that this project be placed initially in medium risk category. The risk rating will be re-evaluated after one year of loan effectiveness and adjustments made accordingly.

During the project launch workshop the Bank will organize a two days training program to the IPCU to introduce the Bank’s Guidelines and standard bidding documents to be used in the implementation o f the project.

C. Procurement Plan

The Borrower, at appraisal, developed a procurement plan for project implementation which provides the basis for the procurement methods. This plan has been agreed on April 18, 2005, and i s summarized in Section C. I t wi l l also be available in the Project’s database and in the Bank’s external website. The Procurement Plan wil l be updated in agreement with the Project Team bi-annually or as required to reflect the actual project implementation needs and improvements in institutional capacity.

D. Frequency of Procurement Supervision

Contracts not subject to Bank’s prior review wil l be post reviewed by Bank’s supervision missions and/or during regular post-reviews by PAS o n sampling basis, i.e. 1 out o f every 5 contracts. The frequency o f procurement supervision should be every six months.

E. Details of the Procurement Arrangements Involving International Competition

1. Goods, Works, and Non Consulting Services

(a) L is t o f contract packages to be procured following ICB and direct contracting:

59

1 2 3

Ref Contract Estimated No. (Description) cost

1 Upgrading o f 32,670,000 Emergency

Communication System

Information System

Response Capacity

Reconstruction of Major Hospitals

Software to Support Municipalities (Group

2)

2 Disaster Management 7,000,000

3 Upgrading Emergency 13,700,000

4 Strengthening/ 44,360,000

5 Equipment and 2,580,000

(b) All ICB contracts estimated to cost US$5 million or more for Works and estimated to cost US$ 500,000 or more for goods, and first NCB works, and NCB Goods contracts, first Shopping Contract and all direct contracting will be subject to prior review by the Bank.

4 5 6 7 8 9

Procurement P-Q Domestic Review Expected Comments Method Preference by Bank Bid-

Date (yeslno) prior / Opening

Post) ICB Post Q No Prior

ICB Post Q N o Prior

ICB Post Q N o Prior

ICB Post Q N o Prior

ICB Post Q N o Prior

60

- 1

Ref No.

-

~~

1

2

2

- 3

3

4

5 -

Design and Implementation o f Public Awareness Campaign

Preparation o f Design for StrengtheningReconstruction o f Key Facilities and Supervision o f

RetrofittingReconstruction Works

2. Consulting Services

(a) L i s t o f consulting assignments with short-list o f international firms.

6 10,000

14,110,000

R i s k Assessment o f Lifel ines and Vital Infrastructure

Risk Assessment o f Selected Cultural Heritage Buildings Enhancing Building Code

Enforcement Capacity at Selected District Municipalities

Description of Assignment

2,450,000 QCBS Prior

2,827,000 QCBS Prior

460,000 QCBS Prior

Estimated cost

4

Selection Method

QCBS

QCBS

5

Review by Bank (Prior I

Post) Prior

Prior

6

Expected Proposals

Submission Date

7

Comments

(c) Short lists composed entirely of national consultants: Short l is ts o f consultants for services estimated to cost less than US$200,000 equivalent p e r contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph: 2.7 o f the Consultant Guidelines.

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Annex 9: Economic and Financial Analysis

TURKEY: SEISMIC RISK MITIGATION-TR

Bqckground

Turkey carries significant seismic risk since it l ies in one o f the most active earthquake and volcano regions in the world. More than 95 percent o f the country’s land area is vulnerable to earthquake risk. Devastating large-scale earthquakes can occur anytime where 70 percent o f the country’s population live and 75 percent o f industrial facilities are located.

Essentially Turkey i s exposed to two types of natural hazards where the earthquakes account for a predominant r isk level of 91 percent against the combined risk o f 9 % due to floods, mudslides and landslides.

After the 1999 Marmara earthquake, Turkey began establishing a modem decentralized emergency management system pattemed after FEMA in the USA. The new Agency’s progress has been slow and incomplete; raising serious concem that Turkey remains unprepared for a similar catastrophic event. Although some attempts have been made, currently, the country does not have a comprehensive strategy for managing and reducing the r isks o f earthquakes and other natural hazards. Proper enforcement of building codes and standards i s one o f the critical challenges for Turkey toward reducing the vulnerability o f the existing l ow quality building stock.

On the positive side, many municipalities have taken the initiative to upgrade the local emergency response system, to conduct microzonation studies, and to initiate important planning tasks. The Istanbul municipality prepared a comprehensive master plan, modeled on international best practice that incorporates risk mitigation activities in the urban planning and development process.,

Within the nation’s high-risk context, and in light o f the investigations undertaken in the aftermath of the Marmara Earthquake, Istanbul appears to be highly vulnerable because o f its seismic-prone location on the North Anatolian Fault (NAF), and its high population and commercialhdustrial densities. This is the backdrop against which the ISMEP should be judged in terms o f i t s relevance and timing.

Estimated Tally of Earthquake Devastation in Istanbul without the Project

Devastation o f a possible earthquake in Istanbul wil l have far reaching repercussions and deal a major blow on the country’s economy. According to recent assessments, the probability o f a major earthquake affecting Istanbul in the next 30 years is 62% +/-12%, while the likelihood o f such devastation in the next decade i s 32%, +/- 12%. In the absence o f ISMEP, the potential earthquake damages are predicted for four earthquake scenarios developed under the JICA- hnded Seismic Microzonation study. These scenarios were labeled Model A through Model D and developed according to the moment magnitude f i o m 6.9 Mw to 7.7 Mw. W h i l e model A, with a moment magnitude o f 7.5, i s considered the most probable case, Model C with a 7.7

62

moment magnitude represents the worst case scenario. Estimated losses for Models A and C are given in the fol lowing table.

Loss and Casualty

Human casualties Lost lives Severely Injured

Building damages Heavily +Moderately +Partly

Public Buildings in High

Model A a Model C (most probable case) (worst case)

73,000 87,000 120,000 135,000

5 1,000 59,000 114,000 128,000 252,000 300,000 42.8% 48.5%

Seismic I n t ensi'ty Areas Educational Health Security Governmental

Water Pipeline Damage Points

43.6% 48.0% 53.0% 59.4% 69.6% 1,400 1,600

53.1% 53.0% 57.2%

Gas Pipeline Damage Points Electric Cable Damage

11 13 820 km 1,080 lan

Cost Benefit Analysis Methodology

There exist a number o f methods for performing a cost benefit analysis o f a disaster with widely varying data requirements and degree o f sophistication. For the most part, estimation o f project costs is easier and straightfonvard. These costs are borne at the beginning of the period and are subject to a greater degree o f certainty. However, there are problems associated with the estimation o f project benefits. First o f all, one does not know in advance if and when a disaster wil l occur, and at which intensity i t will occur. Secondly, one does know in advance how effective the overall mitigation efforts will be in avoiding the possible loses based on vulnerability assessments. Therefore, in large-scale disaster mitigation projects the costs are a sure thing while benefits, which are largely derived f i o m avoided losses, are at best probabilistic. Toward measuring project benefits, the usual approach involves micro-economic methods whereby these benefits are quantified by enumerating al l possible areas where such benefits could arise, individually estimating them and aggregating the results. Some mitigation projects may have a simple structure. They may focus on exerting efforts in one single year and involve wel l selected targets, such as constructing a flood dyke before the on-set o f a possible flood. By contrast, for disaster mitigation project involving earthquakes, the setting i s far more complicated, where the principal gain i s saved human lives in addition to avoided property loss. Most of the conventional cost-benefit models heavily rely on the notion o f assigning a monetary value to human l i f e which commands a much greater monetary amount as opposed to property. Although quite appropriate for insurance and actuarial purposes, and intrinsically appealing, th is approach provokes controversy because o f disagreements whether a monetary value could be

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ascribed to human life. Where exhaustive listings o f project benefits and assignment o f monetary values to human l i fe spared pose practical or moral difficulties, one may adopt a macro approach, especially for large and complex mitigation projects such as ISMEP. Such a macro- economic approach is pertinent for ISMEP, due to problems associated with the reliability and availability o f micro-level data. The below analysis that follows is based on a macro model (neither attributing values to human l i fe nor exhaustively listing al l losses and damages) to judge how far the mitigation effort would go. Analytical framing i s based on a simple macro model which strives to arrive at comparable results that would be obtained through detailed micro analyses.

Component Component A

In addition to the macro approach and methods assigning monetary values to human l i f e saved, there are other popular methods for performing a cost-benefit analysis o f disaster mitigation projects. These approaches, which we will not utilize within the context o f ISMEP, consist of:

Possible Quantifiable Direct Benefits Significant savings in the O&M o f

0

0 Cost effectiveness methods, and 0

The DALY (Disability Adjusted L i f e Year) method,

Micro-economic techniques involving focused cost-benefit analyses o f key project investments or components, such as retrofitting o f hospitals and public schools.

Component C

In narrative terms, benefits due to individual project components can be laid out as follows:

Avoided chaos in the aftermath o f disaster and maintenance o f overall l aw and order. Offers an opportunity for enforcing the building codes,

0

Makes much focused detailed

Component B 7

emergency communications and underlying equipment. Significant opportunity for enhancing Turkey’s national ability to provide immediate rel ief effort in case o f other national disasters since equipment and people are moved to affected keas and not restricted to fixed service stations. Saving lives and reduce number of injuries Saving health care costs Avoided time loss for business Saving the physical structure o f hospitals, schools and other public facilities and valuable equipment. Higher number o f disaster victims with access to immediate medical care.

lnents Remark There are practical difficulties in quantifying benefits

There are practical difficulties in quantifying benefits

Di f f icu l t to quanti&, but potentially offers s in i f i can t economic

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Component D k

Parameter Symbol Probability o f Occurrence o f an Earthquake in P Istanbul

Economic Loss to be Suffered in EL Case o f an Earthquake - Conservative Estimate Economic Loss to be Suffered in EL

Level Unit Remark Of the order o f about 7.5 at Richter’s Scale similar t o

2 percent Marmara’s (estimate provided by Kandi l l i Observatory)

Percent Local GNP comprises

GNP in 2004 potential foregone plus

20 o f local damages due to the earthquake as wel l as growth

damages to property

Percent The most l ikely estimate 31 o f local takes into account the

assessments on critical economic sectors to raise public awaieness and enhance disaster preparedness.

Very important training medium for managers for business and development needs

Avoided disruption o f normal l i f e routine i s probably the greatest project benefit. Sustaining crucial economic activity and fiscal capacity (to collect taxes) in the commercial epicentre o f Turkey, and maintaining the momentum o f growth and stability in the country. Reduced claims from the national insurance fund - D A S K

benefits due to increased self help resulting f rom enhanced awareness and knowledge. Easy to quantify but has limited bearing o n the overall project. Highly diff icult t o quantify if direct methods o f measurements are used to estimate benefits. But less diff icult if indirect methods (such as macro approach) are used.

The analysis that fo l l ows relies on est imat ing the cross-cutting benef i ts - rather than individual component or activity benef i ts - that resul t from an interact ion and interdependence o f all the pro ject components. T h e concept o f p rov inc ia l GNP i s used to estimate the damage impact o f the earthquake as w e l l as the benefits that would b e due to the mitigation ef for t resul t ing from avoided earthquake impact.

Regional GNP-Based Analytical Model

B e l o w i s a descr ipt ion o f the analytical m o d e l u s i n g macro-economic aggregates. Elements of such macro analysis are also encountered in other Bank- funded operations for s imi lar types o f intervent ions (Nicaragua - Natural Disaster Vu lne rab i l i t y Disaster Project - 2001).

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Case o f an Earthquake - Most Likely Estimate Project Costs during Implementation

Project Costs during

Period Operational

Capacity Developed Over Time

c (WB) 400

C(G0VT)

20

and gradually building to 23% at the end o f project implementation.

Mitigated Losses

Cash Flow

MILO EL weighted by

CF Difference LMC

between Benefits and costs

GNP in 2004

US$ Million

US$ Million per year

Percent

US$ Mil l ion US$ Mil l ion

Extrapolation o f Istanbul Earthquake Disaster Losses

privileged economic and social status o f Istanbul, which wi l l amplify the impact o f an earthquake. This i s the project cost for the 5-year project period spread over 6 calendar years.

These are the minimal incremental costs estimated for the operational period of 25 years to maintain the Governorship Disaster Management Center (AYM) in Istanbul. Loss Mitigation Capacity Development wi l l take a long time to build, and stabilize at 50% at around mid-stream in year 15. In other words the project cannot and wi l l not mitigate all losses. T h i s i s a derived figure

Th is i s a derived figure

The Marmara Earthquake of 1999 provides a basis for extrapolating the level o f the economic losses to be sustained in case o f a possible Istanbul earthquake. In 1999, four provinces were affected - Kocaeli, Yalova, Istanbul and Sakarya. The worst hit province was Kocaeli. I t should be remembered that 1999 was not a successful year for the Turkish economy. In fact, a recession was recorded as o f the f i rst quarter in the year. Hence, not al l o f the economic contraction o f the year registered at the end o f 1999 was due to the earthquake, which occurred in August 1999. I t i s observed that those provinces that were affected by the disaster had a total average rate o f shrinkage o f 12 percent in per capita GNP and 11 percent in overall GNP. Meanwhile the rate o f decline in provincial GNP for other major unaffected cities (Ankara, Adana, Izmir and Bursa), was about 6 percent in per capita and 5 percent for overall GNP. Therefore adjusted Marmara Earthquake impact was estimated to be in the order o f 5 percent in per capita GNP and 6 percent in overall GNP (please see the below table). The same percentages are assumed to be applicable in the case o f a possible Istanbul Earthquake for the conservative case. However, Istanbul i s the commercial and financial epicentre o f the Turkish economy. Because o f Istanbul’s privileged status in the Turkish economy, these conservative estimates were raised - to amplify the predicted impact o f earthquake - in order to arrive at the most probable loss scenario.

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A decline in GNP alone is not the sole source o f economic loss because the disaster would also curtail potential economic growth as well. Potential growth for any given year in Turkey i s roughly 4 percent for analytical purposes, which can be doubled for the case o f Istanbul. Another important damage category i s due to the loss o f property, which was roughly equivalent to the income loss in Marmara, as was confirmed by SPO in the aftermath o f the Marmara Earthquake. Indeed, property loss in the Marmara Earthquake was estimated at about 10% o f GNP. However, due to the very high concentration o f industry and higher value economic assets in Istanbul, the property loss should be elevated for the case o f Istanbul, possibly reaching 17% o f GNP. The combined impact of the earthquake on the economy i s the sum o f the level o f economic shrinkage, curtailed growth and property loss. These are estimated to be 20% o f GNP for the conservative loss scenario, and 3 1 % o f GNP for the most l ikely loss scenario.

.

Source: State Institute of Statistics - Computations were made by the Mission

When these parameters are applied to the case o f Istanbul, i t i s possible to extrapolate the level o f economic losses to be sustained in case o f an earthquake. The latest GNP for Istanbul i s not yet known as SIS has not yet released data for province-bas.ed GNPs. But, this magnitude is estimated at about US$40 bi l l ion by making computations (below table).

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Earthquake Related Economic Loss - both in Income and Wealth (Macro Approach)

Provinces (per capita) Economic Contraction due to Marmara Earthquake in the Affected Provinces (in overall GNP terms)

Percent a 5% 5%

Percent b 6% 6% I

(Percent I C 1 4% I 8% Foregone Positive Growth Potential (% of GNP) Total Earthquake Impact on GNP (Income) I Percent I d= b+c 1 10% I 14% Property Loss as a Percent of GNP lpercent e l

~ ~

10% 1 17%

IEstimated Economic Loss in Case of Possible Istanbul Earthquake IBillion US$ I ' f ' g 1 8.14 I 12.44

Source: Mission estimates

I t tu rns out that the loss to be suffered in case o f an earthquake in Istanbul i s about US$ 8.14 bi l l ion using conservative estimates, and about US$ 12.44 bi l l ion based on the most l ikely loss outcome for an earthquake of similar magnitude as that o f Marmara. These figures may appear to be in stark contrast with many exaggerated figures one may come across in the press or interviews. However, even the conservative loss estimate i s sufficiently severe to economically justify the proposed ISMEP at a borderline ERR o f 11%.

Economic Analysis

A financial analysis i s not pertinent in the case o f ISMEP since the base data comes in income terms and encompasses the entire population as opposed to selected individuals or areas.

Probability weighted annual economic loss in Istanbul due to an earthquake is expected to be around US$ 163 million using a conservative loss scenario and US$249 mi l l ion based upon the most likely loss outcome. FEMA calls this concept annualized damages and losses and it does not apply to them a growth element. The same principles were adhered to in this analysis as well. Mit igation must be centered on reducing this amount o f U S $ 249 mi l l ion per year to the highest degree possible. The project's benefits are generated to the same extent as one can reduce this potential loss. However, current loss mitigation capacity i s very l imited and it can only be gradually built and sustained over a period o f time, which i s assumed to span some 30 years. The highest mitigation level to be reached by the project i t se l f i s assumed to be around 25 percent at the end o f the implementation period. However, the project is expected to attain some 50 percent of loss mitigation capacity around mid-stream during i t s planning horizon at the end o f Year 15, at which level it wi l l stabilize and register no h r the r improvement. This means that regardless o f what we do, some loses will be unavoidable. This i s a realistic assumption because complete obliteration o f loss can take a long time, and wil l be intimately related with how fast the existing building stock in Istanbul (primary source o f hazard) can be replaced with earthquake-resistant ones.

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I t i s further assumed that ISMEP wil l largely play a catalytic role in attracting further investment into the risk mitigation effort, and that the Government will continue investing in disaster mitigation after the project closes. Therefore, the Government will probably spend some US$ 500 mi l l ion in the next 25 years to sustain the momentum initiated by ISMEP.

Under the above scenarios, the estimated ERR will be 11 % for the conservative case, and 19% for the most l ikely case for the proposed project, with a C/B ratio o f about 1.11 (conservative case) and 1.69 (most l ikely loss scenario). If the loss level i s allowed to rise, this would only increase the ERR. For instance, using the most likely scenario assumptions, for a probability o f earthquake occurrence f ixed at 3 percent, rather than 2 percent, the ERR will be 29 percent (with B/C o f 2.53), and for a probability o f 4 percent the ERR would be 41 percent (with C/B o f 3.37). This i s due to the fact that at higher levels o f loss there wi l l be more room for mitigation effort and hence generation o f mitigation benefits. The computational details are found in the table below.

Commentary on Loss Mitigation Capacity

Loss mitigation capacity is a concept that cannot be easily quantified. The project i s expected to be rather slow on impacting this critical parameter. Thus, the analysis assumes that only some 25% mitigation capacities can be attained in 5 years o f project implementation. However, if this capacity i s allowed to improve at an accelerated pace, which i s a distinct possibility, the project ERR and C/B wil l certainly improve. For instance, if i t takes us hal f the number o f years to reach the assumed cap o n the loss mitigation capacity o f 50%, the ERR would abruptly jump to 33% with a C/B ratio o f 2.24. This would be possible if we assumed a percentage pattern o f 0, 10, 20, 30, 35, 40, 45 and 50 for the loss mitigation capacity over the f i rst 8 years. I t is evident that, in addition to the overall level o f disaster-related loss for Istanbul, the most important parameter o f the analysis i s this critical capacity which ISMEP i s trying to promote and enhance in an assured albeit partial manner.

Caveats about the Macro Analysis

The foregoing analysis i s premised on the expectation that economic recovery after the incidence o f a possible earthquake' in Istanbul wil l not take much time. This was the case for the Marmara Earthquake where ensuing recovery was speedy. This may not hold true for the case o f Istanbul which in i t se l f wil l amplify the economic losses and hamper the recovery as wel l as ongoing hazard mitigation efforts. Also, the effects o f the earthquake on the poor and SMEs wil l be much more severe than i t wil l be on other groups. I t i s the poor who l ive in unsafe buildings and it is the poor who cannot afford safe housing, and some SMEs may never recover the impact o f an earthquake because o f lost markets, as was evidenced in the case o f Marmara. These are the aspects not treated in the above analysis due to the macro emphasis which conceals micro-level details.

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Table of Probabilities for the Macro-Economic Model

Earthquake in any Given Year

(*) Same as Annualized Damages and Losses

Occurrences 1 , 2% I 12.44 I 248.80

70

Annex 10: Safeguard Policy Issues

TURKEY: SEISMIC RISK MITIGATION-TR

Context and Environmental Assessment Category

Component B o f the ISMEP project wil l support seismic retrofitting works for hospitals, schools and other criticallpriority public buildings already in existence. The use o f innovative, minimally intrusive technical retrofitting solutions wil l be promoted. Only on a very l imited scale will demolition and replacement (in the same location) be necessary for structures that do not qualify for retrofitting. Both types o f interventions have environmental impacts that are minor to moderate in scale, and very localized in extent. Impacts can be readily defined, mitigated and monitored. Project activities wil l take place in areas which do have cultural heritage values protected under local and national laws and practices. New construction (if required) may take place in urban areas with exiting populations and uses/values which must be taken into account. Retrofitting and new construction has been successfully carried out in the Istanbul area in the recent past (mostly with Turkish funding) without significant impacts.

,

Potential physical impacts are associated with renovation o f buildings for retrofitting, in addition to replacement o f some structures as needed. Emissions o f particulate matteddust to the air, sediment to sewerage systems (or nonpoint source runoff), noise pollution, and proper disposal o f demolition debris or wastes present in the buildings will need to be mitigated and monitored. Special precautions for retrofitting hospitals and other facilities which remain in use may be needed; for example to protect patients remaining in hospitals or students remaining in dormitories. In cases o f retrofitting work on certain public buildings in Istanbul, the safeguard pol icy on Cultural Property may be triggered, as potentially some o f the publicly used facilities, important for emergency response activities, may turn out to either have culturalhistorical value, be in very close proximity to such properties, or may be located in an overall historic area. Irreversible impacts are not anticipated given local ordinances and practices regarding cultural heritage protection.

Unl ike the previous MEER project, where large housing complexes were constructed, buildings (if needed) wil l be few in number, and generally within the current foundation area. Retrofitting of buildings is generally the approach with lowest potential impact o n the environment. Replacement o f structures within the existing footprint (Le. those too r isky or expensive to retrofit) i s also the best alternative assuming cultural property issues are sufficiently addressed.

Component A does not directly pose environmental risks. Given the above factors, the overall ISMEP was rated as Category B for Environmental Assessment (OPBP 4.01) at the P C N stage, and this was confirmed as appropriate during pre-appraisal. With the possibility o f project activities affecting Cultural Property, OPN 1 1.03 (being revised as OP 4.11) was considered triggered at the PCN-stage, and this condition was also confirmed during pre-appraisal. Since ISMEP wil l finance numerous retrofitting activities (with limited replacement) o f comparable scope, a framework Environmental Management Plan was set as the principal requirement for due diligence for both EA and Cultural Property.

, 71

Key Elements of the Environmental Management Plan

Draft and final versions o f the EMP were prepared prior to and following pre-appraisal, and reflecting consultations, site visits, experience with previous Bank projects, and experience with retrofitting projects carried out by Turkish authorities. The environmental protection regulatory framework was analyzed, and institutional arrangements for environmental management specified. Recent rapid changes in Turkish laws and regulations to more closely adhere to the principles o f the environmental acquis o f the European Union were taken into account to the extent possible.

The EMP includes a summary plan for mitigation o f environmental risks and monitoring. Responsibilities o f al l the key parties are described including: (i) the project implementation unit who wil l prepare bidding documents with appropriate measures for due diligence to ensure consistent attention to the environment by bidders, (ii) contractors carrying out c iv i l works, (iii) supervisory engineers responsible for tracking compliance with mitigation and monitoring plans, and (iv) environmental and public health officials who are responsible for protecting public interests. Parallel measure for ensuring attention to the identification, protection, mitigation and monitoring o f risks to cultural property are also identified.

-

The EMP recognizes the fact that under Turkish law, retrofitting o f buildings does not trigger a formal Environmental Impact Assessment (EIA) under either Annex I or 11. In a comparable view, retrofitting does not trigger an obligatory assessment under Annex I o f the Environmental Assessment directive o f the European Commission (EC). N e w building construction might fal l in Annex I1 o f the Turkish law, and similarly Annex 11 o f the E C directive, whereby EL4 falls to the discretion o f public officials based on site specific conditions. This i s compatible with the World Bank Category B rating and further supports the approach o f the framework EMP prepared for ISMEP.

Turkish limits for air emissions, noise, etc. were examined (and compared to Bank guidelines) and referenced as suggested limits in the EMP to be incorporated as legal and appropriate in bidding documents and monitoring plans. Given the fact that retrofitting and l imited replacement o f buildings represents a l o w to moderate risk to the environment, i t i s expected that inclusion and compliance o f best practices (such as dust control by tarps and water spray to protect from wind damage) wil l be the normal approach rather than routine monitoring o f emissions per se, as might be the case with higher risk activities (e.g. power stations or wastewater treatment plants).

Nevertheless, special attention (e.g. tighter standards or specialized monitoring) may be placed in bidding documents to ensure, for example that: (i) patients in hospitals (or students in resident buildings) are protected from noise, vibration, dust and the loss o f electricity and air conditioning if they occupy sections o f buildings being retrofitted, (ii) medical wastes and radioactive materials from X-ray machines or similar devices are removed safely in advance o f c iv i l works, with medical wastes adhering to strict local ordinances, (iii) asbestos or other hazardous materials, while not expected to be problematic, are identified and safe measures taken for removal and disposal, and (iv) removal o f construction debris to licensed dump sites i s assured.

72

The EMP includes considerable information to advise the IPCU, contractor and supervisory personnel regarding the comprehensive approach to cultural property protection under national and municipal law and institutions in the Istanbul area. Appropriate references wil l be included in bidding documents and contracts wi l l suffice to comply with World Bank procedures.

According to the team’s assessment, the Borrower (both at the national level and specific to Istanbul) has sufficient capacity to implement the measures included in the EMP and RPF. Institution strengthening i s not needed under ISMEP in this regard.

Considerations for Land Acquisition and Involuntary Resettlement

The project will not entail land acquisition or resettlement. All retrofitting or reconstruction o f public buildings will take place on existing sites. Depending on the particular building and the nature o f the work being done, the retrofitting may temporarily affect building operations and/or access to the facility by clients or the public. To ensure that staff can work in a safe environment, and access to the services offered by the facility, each feasibility study wil l include a social mitigation plan. The plan wil l describe steps to be taken to maintain a suitable working environment o n site or at an alternative site, and to ensure that clients and the public are informed about the temporary measures to ensure uninterrupted access to service.

Supervision of Environmental and Social Safeguards

World Bank staff wil l coordinate Bank supervision o f safeguards during implementation with supervisory contractors and local health, environment and cultural heritage staff; facilitated through the IPCU. I P C U will request that routine reports o f project compliance with laws and ordinances o f Turkey and the Istanbul municipality (or complaints from citizens or others) be shared with them on a timely basis and be taken into account in overall project tracking and response.

73

Annex 11: Project Preparation and Supervision TURKEY: SEISMIC RISK MITIGATION-TR

Planned Actual P C N review 08/07/2003 Init ial P I D to PIC 09/25/2003 Init ial ISDS to PIC 10/03/2003 Appraisal 2/2 8/2005 Negotiations 4/18/2005 Board/RVP approval 05/26/2005 Planned date o f effectiveness 08/10/2005 Planned date o f mid-term review 05/30/2008 Planned closing date 09/30/2010

K e y institutions responsible for preparation o f the project: Governorship o f Istanbul Bank staff and consultants who worked on the project included:

Name Wael Zakout Ibrahim Sirer Jolanta Kryspin-Watson Christoph Pusch Richard Andrews

Eric Peterson

Dilek Barlas Stan Peabody Ron Hoffer Seda Aroymak

Andrina Ambrose Rohit Mehta Dara Lengkong Gurhan Ozdora

Suha Satana Katelijn Van den Berg Richard Lacroix Koshie Michel

Title Task Team Leader

Senior Procurement Specialist Institutional Specialist

Residential Program Manager Emergency Management Expert and Manager o f

Component A Urban Specialist and Manager

o f Component B Senior Counsel

Lead Social Scientist Lead Environmental Scientist Senior Financial Management

Specialist Senior Finance Officer Senior Finance Officer

Financial Specialist Senior Operations

OfficerEinancial Specialist Economist Economist

Residential Program Advisor Program Assistant

Unit ECSSD ECSPS

Consultant SASEI

Consultant

Consultant

LEGEC ECSSD ECSSD ECSPS

LOAGl LOAGl SASEI ECSPF

Consultant ECSSD

Consultant ECSSD

Bank funds expended to date on project preparation:

74

1. Bank resources: $549,791 2. Trust funds: $210,000 3. Total: $759,791

A Japan PHRD grant for US$927,500 (TF052686) was received and i s being used for project preparation by recipient to contract consultant services for the following preparation activities: (a) feasibility study for upgrading o f an emergency communication system; (b) feasibility study for preliminary design for seismic risk mitigation efforts on public assets and lifelines; (c) social assessment; (d) environmental assessment; (d) establishment o f financial management system; (e) project management and coordination. The grant i s executed by the Project Implementation Unit.

A Japan Consultant Trust Fund for US$210,000 (TF030390) was received and was used for support o f the Bank in regard to project parts related to the retrofitting, building code enforcement and urban planning.

Estimated Approval and Supervision costs: 1. Remaining costs to approval: US$77,000 2. Estimated annual supervision cost: US$150,000

75

Annex 12: Documents in the Project Fi le TURKEY: SEISMIC RISK MITIGATION-TR

“Study on Disaster , PreventiodMitigation Basic Plan in Istanbul including Seismic Microzonation in the Republic o f Turkey”; Japan International Cooperation Agency (JICA), Istanbul Metropolitan Municipality (IMM) December 2002;

“Earthquake Masterplan for Istanbul”; developed for: Metropolitan Municipality o f Istanbul, Planning and Construction Directorate, Geotechnical and Earthquake Investigation Department; by Bogaziqi University, Istanbul Technical University, Middle East Technical University, Yildiz Technical University; Istanbul July 7,2003 [English Version]

“Observations on Earthquake Risk and Engineering Practices in Istanbul, Turkey”; Peter Yanev; November 2004

“Assessment o f Stakeholders Approach to Seismic Vulnerability and Housing Stock Strengthening In Istanbul”; Deniz Baharoglu; October 2003

“Assessments o f Design and Preparation o f the ISMEP Project. Final Report”; Pacific Consultants International; December 2004

“Study on Building Codes Enforcement in Turkey”; PROTA; February 2005

76

Annex 13: Statement of Loans and Credits TURKEY: SEISMIC RISK MITIGATION-TR

Difference between expected and actual

disbursements Original Amount in US% Millions

ProjectID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d

PO82801 2004 PO72480 2004 PO59872 2003 PO70286 2002

PO74408 2002 PO69894 2001

PO44175 2000 PO68368 2000

PO09073 1999 PO09072 1998 PO48852 1998 PO08985 1998 PO09076 1995

EXF’ FIN 2 RENEW ENERGY

BASIC ED 2 (APL #2) ARP

SRMP

PRIV SOC SUPPRT BIODNMTRL RES MGMT (GEF)

MARMARA EARTHQUAKE EMG RECON

INDUSTRIAL TECH

PRIV OF IRRIGATION

NATL TRNSM GRID

CESME WS & SEWER

HEALTH 2

Total:

303.10 202.03

300.00 600.00

500.00 250.00

0.00 505.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00

0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 8.19 0.00

0.00 0.00

0.00

0.00 0.00 0.00 0.00

0.00

290.07 202.03

292.96

398.79 375.04 122.34

5.51 300.13

-13.03 0.00

181.12

345.45 248.68 110.17

3.52 300.07

0.00

0.00

0.00 0.00 0.00 0.00 0.00

79.37

155.00 0.00 0.00 0.00 0.00 47.48 47.48 0.00

20.00 0.00 0.00 0.00 0.00 0.96 0.96 0.96 270.00 0.00 0.00 0.00 27.79 173.11 200.90 -1.42

13.10 0.00 0.00 0.00 2.70 5.19 7.89 1.41 150.00 0.00 0.00 0.00 20.17 23.33 50.57 50.57

3,268.23 0.00 0.00 8.19 50.66 2,236.94 1,483.78 130.89

TURKEY STATEMENT OF IFC’s

Held and Disbursed Portfolio In Millions o f U S Dollars

Committed Disbursed

IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic.

2001 Bilgi 10.00 0.00 0.00 0.00

1994196197 2004 1995196

1994 1996101

1990102 1998

2002

1995 1998 1999 1998 1999 200 1

Borcelik

Borusan Holding

CBS Boya Kimya

CB5 Holding

CBS Printas

Conrad

Demir Leasing

EKS

Entek

Finans Leasing

Finansbank

Garanti Leasing

Gumussuyu Kap

Gunkol

10.00 30.00 0.00 4.00 0.00

3.50 0.56 12.86

20.50

0.56 4.44 0.56 4.00 6.37

3.21

0.00 0.65

0.00 0.01

0.00 0.00 0.00

0.00

0.00 0.00 0.00 0.00 0.00

0.00 0.00

10.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00

0.00 13.25

0.00 0.00 0.00 0.00 0.00 0.00

3.43 0.00 6.37 0.00

10.00 0.00 0.00 10.00 3.21 0.00

30.00 0.00 10.00 0.00 0.65 0.00

4.00 0.00 0.00 0.00 0.01 0.00

3.50 0.00 0.00 0.56 0.00 0.00

12.86 0.00 0.00

20.50 0.00 0.00 0.56 0.00 0.00 4.44 0.00 0.00 0.56 0.00 0.00

4.00 0.00 3.43 6.37 0.00 6.37

0.00 0.00

0.00 0.00

0.00 0.00 0.00 0.00 0.00

13.25

0.00 0.00 0.00

0.00 0.00

77

1998

1998100/02 1990

1988190 1991 2003

2002 1998102

1991 2004

2002 1998

2000 1999 1990 200U03

1998102

1999 1982/83/89/91/96199

1999102

2001 1999 1999 1998

1995

2001/03

1998 1996/01/03 2000 1997102

2002 2000

2002

Indorama Iplik

Ipek Paper

Kepez Elektrik

Kiris Kula MESA Group

Milli Re

Modern Karton

NASCO

Oyak Bank

Pasabahce

Pinar ET

Pinar SUT

SAKoSa

Silkar Tur im

Sise Ve Cam

soktas TEB Finansal

Trakya Cam

Turk Ekon Bank

Turkish PEF

Unye Cement

Uzel

Viking

Yalova Acrylic

ALease

Akbank

Altematif Bank

Arcelik

Arcelik LG Klima

Assan Atilim

Banvit

Bayindirbank AS

Beko

5.63

16.98 4.05 10.53

5.05

1 1 .oo 50.00 10.00 10.18

50.00 7.50 5.50 15.20 19.22 2.43

65.37 3 .OO

1.67

0.00 17.78 0.00 12.86 9.48 8.41

2.50 0.56 2.5.00 4.00 18.19 13.12

25.00 6.50 13.33 4.50

30.74

0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00

0.00 0.00

0.61 0.00

10.00

0.00 0.00 0.00

0.00 0.00 0.00 0.00

0.00

0.00 0.00 0.00

5.00

0.00 0.00

0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 15.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

b.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.55 0.00 0.00 0.00

0.00 12.25 2.77

40.86 0.00 0.00 0.00 0.00 0.00

0.00 5.69 0.00

1.33 0.00 0.00 0.00 0.00

3.33 0.00 0.00

0.00

0.00 30.74

5.63

16.98 4.05

10.53 5.05

5.50 0.00

10.00 10.18 50.00 7.50 5.50

11.74 19.22 2.43

65.37 3 .OO

I .67

0.00 17.78 0.00

12.86 9.48 8.41 2.50 0.56

25.00 1 .oo

18.19 13.12 25.00

5.49 13.33 4.50

30.74

0.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00

0.61 0.00

1.37

0.00 0.00 0.00

0.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00 5.00 0.00

0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00

15.00

0.00 0.00 0.00 0.00 0.00

0.00

0.00 0.00 0.00

0.00

0.00 0.00 0.00

0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00

3.55

0.00 0.00 0.00 0.00

12.25 2.77

40.86 0.00 0.00 0.00 0.00

0.00 0.00 5.69

0.00 1.33 0.00 0.00 0.00 0.00 3.33 0.00 0.00 0.00

0.00 30.74

Totalportfilio: 592.63 19.48 34.80 113.77 529.66 10.85 34.80 113.77

ADDrOValS Pending Commitment

FY Approval Company Loan Eguity Quasi Partic.

2001 2004

2003

2004 2002 2004

2003 2002

Akbank

Akbank BLoan Inc

Cayeli Expan 2 Meteksan Sistem

Milli Reasurans OPET Petrolculuk

Sisecam Exp.

TEB III

0.03 0.00

0.02 0.01

0.00 0.03 0.00

0.00

0.00 0.00 0.00

0.00

0.01 0.00 0.00 0.00

0.00 0.00 0.00

0.00 0.00 0.00 0.00 0.00

0.00 0.02 0.00

0.00 0.00

0.05 0.01 0.05

78

2004 Turkish Leasing 0.04 0.00 0.00 0.00

Total pending commibnent: 0.13 0.01 0.00 0.13

79

Annex 14: Country at a Glance TURKEY: SEISMIC RISK MITIGATION-TR

POVERTY and SOCIAL

2002 Population, mid-year (millions) GNI percapita (Atlas method, US$) GNI (Atlas method, US$ billions)

Turkey

69.6 2500 174.0

Average annual growth, 1996.02

Population (%) Labor force (%)

M o s t recent est imate ( la tes t year available, 1996-02)

Poverty (%of population below national poverty line) Urban population (%oftotalpopulation) Life expectancyat birth (pars) Infant mortality(per 10Wllve births) Child malnutrition (%ofchildren under5) Access to an improvedwdtersource (%ofpopulation) Iliteracy(%ofpopulation age E+) Gmss primary enrollment (%of school-age population)

.

Male Female

KEY ECONOMIC RATiOS and LONG-TERM TRENDS

17 2.2

67 70 33

d 82 12

D1 D5 96

1982 1992

GDP (US$ billions) 64.4 158.9

Exports of goods and services/GDP 119 14.4 Gross domestic investmentlGDP U.0 23.9

Gross domestic savings/GDP D.8 20.9 Gross national savings1GDP 13.5 24.4

Current account balance/GD P Merest paynents1GDP Total debt/GDP Total debt service/exports Present value of debt/GDP Present value of debvexports

-15 -0.6 18 2.0

30.6 35.6 29.4 32.1

1982-92 1992-02 2001 (average annualgrowth) GD P 5.1 2.8 -7.5 GDP per capita 2.7 10 -9.0

Europe B Lower- Cent ra l mlddie-

A s i a i n c o m e

476 2,so 1030

0.1 0.4

63 69 25

91 3

Q2 D 3 01

2001

125.2 6 . 8 33.7 8 . 2 20.7

2.3 3.6

78.4 44.0

2,4n 1390

3,352

10 I2

49 69 30

81 0

n

in m ID

2002

132.6 213 28.8 B .6

20.7

-0.8 3.4

7 19 49.0

2002 2002-06

7.8 4.7 6.1 3.6

~ Deve lopment diamond'

Life expectancy I

1 i

, I 1 ~ Accessto impmvedwtersource

' -Turkey

~ ~ Lower-middle-incomegroup

I E c o n o m i c ratios.

i Trade

~ Indebtedness

. -Turkey

I ___ Lower-middle-income group > T

STRUCTURE o f the ECONOMY

(%of GDP) Agriculture Industry

Services

Private consumption General government consumption Imports of goodsandservices

Manufacturing

(average annualgroMh) Agriculture Industry

Services

Private consumption General government consumption Gross domestic investment Imports of goods and services

Manufacturing

1982 1992

22.7 15.3 25.1 29.9 U.7 8.9

522 64.7

76.3 66.2 9.9 P.9 15.0 77.3

1982-92 1992-02

14 11 7 2 2.6 7 2 3.3 4 2 3.1

4.3 2.2 3.4 4.4 5.0 11 8.8 8.3

2001 2002

P.8 D.0 26.1 25.4 15.6 6 .O 611 616

66.6 66.3 14.2 +4 .O 313 30.5

2001 2002

-6.0 7.6 -7.2 5.7 -8.0 8 2 -6.2 7 .O

-9.2 2.6 -8.5 5 A

-42.0 35.7 -24.8 15.7

I I Growth o f inves tment and G D P (%)

50 7

I ' Growth o f expor ts and i m p o r t s ( O h )

I -Exports -Inports

80

Turkev PRICES and G O V E R N M E N T F I N A N C E

D o m e s t i c p r i c e s (??change) Consumer prices

1982

hplicit GDP deflator 282

Government f inance [%of GD P, Includes current grants) Current revenue Current budget balance Overall surplusldeficit

T R A D E

(US$ millions) To tahpor ts (fob)

Textiles Processed agricultural products M anufactums

Total imports (cif) Food Fuel and energy Capital goods

Export price index (S95=OOj h p o r t price index (895=OO) Terms of trade (895=WO)

1982

5.890 1145 1571

4,655 8,843

P 3 3,943 2214

B A L A N C E o f P A Y M E N T S 11 1982

(US$ millions) Eqorts of goods and services 7 8 8 i-nports of goods and services 9,592 Resource balance -1774

Net income Net current transfers

-1455 2277

Current account balance -952

Financing items (net) Changes in net reserves

1PO - 6 6

M e m o : Reserves including gold (US$ millions) 2,027 Conversion rate [DEC,locaVUSb) 62.9

E X T E R N A L D E B T and RESOURCE FLOWS

(US$ millions) Total debt outstanding and disbursed

1982

8 , 7 6 IBRD 1962 IDA 8 7

Total debt service IB RD IDA

Official grants Official creditors Private creditors Foreign direct investment Portfolio equity

World Bank program Commitments Disbursements

Compositionof net resourceflows

2,966 209

3

307 762 146 55 0

648 500

1992

70.1 63.7

B .o -13

4 . 7

1992

14,891 5,603 2,293 DA40 22.871

1398 3,903 7,970

95 90 0 5

1992

23,343 26,706 -3,363

-1670 4,059

-974

2,458 -1484

15252 6.8813

1992

56654 5664 . 148

9,086 1207

6

505 -509

3,504 779

-184

686 286

2001

53.9 54.8

29.3 -14.7 -20.9

2001

34,373 n 3 4 4

t876 28,695 41399

848 8,36 7344

76 81 94

2001

50,403 45.86 4687

-5,000 3,603

3,390

-6 ,3# P,924

30.82 1228,367

2001

It3806 4;107

95

24,623 723

7

0 74

-2,187 2,769 -4.611

2200 1537

2002

44.8 43.5

28.2 -4.7

-P.3

2002

39.827 Z066

1705 32,673 51270

8,955 8,949

75 80 93

u n

2002

54.608 55,095

-487

-4,549 3,496

-1540

1326 2 P

38,057 1509,47 1

2002

t31407 5.367

89

28,632 708

7

334 797

852 -180

3811

1650 1031

I I I n f l a t i o n (ye)

- W P deflator -CPI

1 E x p o r t a n d i m p o r t leve ls (US$ mill.)

l60,WO T

, I Exports e Inports O1 O2 I i 96 97 98 98 w

1

‘ C u r r e n t a c c o u n t balance t o G D P (OG i “ T

I 1 C o m p o s i t i o n o f 2002 debt (US$ mill.)

i A 5,367 I B 69

21503

D lO400 ~

I

I F

E 6,433

I

1 B - IDA ~ A - IBRD

D ~ olher rmltilaterd F - Rivate I

81

MAP SECTION