Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: 59947-ML

PROJECT PAPER

ON A

PROPOSED ADDITIONAL CREDIT

IN THE AMOUNT OF SDR14.2 MILLION

(US$23 MILLION EQUIVALENT)

TO THE

REPUBLIC OF MALI

FOR THE

SECOND TRANSPORT SECTOR PROJECT

May 25, 2011

Transport Sector

Country Department AFCW3

Africa Region

This document has a restricted distribution and may be used by recipients only in the

performance of their official duties. Its contents may not otherwise be disclosed without

World Bank authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS

(Exchange Rate Effective April 30, 2011)

Currency Unit = FCFA

FCFA 441 = US$1

US$1.62 = SDR 1

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AF Additional Financing

AfDB African Development Bank

AGEROUTE Agence d’Exécution des Travaux d’Entretien Routier (Road

Maintenance Works Execution Agency)

AGETIER Agence d'Exécution des Travaux d'Infrastructures et d'Equipements

Ruraux (Infrastructure and Rural Equipment Works Execution Agency)

ARAP Abbreviated Resettlement Action Plan

BADEA Arab Bank for Economic Development in Africa

CAS Country Assistance Strategy

CMDT Compagnie Malienne pour le Développement des Textiles (Malian

Textile Development Company)

DNACPN Direction Nationale de l’Assainissement et du Contrôle des Pollutions et

des Nuisances

ERR

ESIA

Economic Rate of Return

Environmental Social Impact Assessment

ESMF Environmental Social Management Framework

ESMP Environmental Social Management Plan

EU European Union

FCFA CFA Franc (Franc of the Communauté Financière Africaine (Franc of

African Financial Community))

FM Financial Management

GDP Gross Domestic Product

GNI Gross National Income

GOM Government of Mali

GPN General Procurement Notice

GPRSF Growth and Poverty Reduction Strategy Framework

HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency

Syndrome

IBRD International Bank for Reconstruction and Development

ICB International Competitive Bidding

IDA International Development Association

IDB Islamic Development Bank

IFR Interim Financial Report

IP Implementation Progress

ISA International Standards on Auditing

KfW Kreditanstalt fuer Wiederaufbau

M&E Monitoring and Evaluation

MET Ministry of Equipment and Transport

MTSP-II Mali Second Transport Sector Project

NCU National Coordination Unit

NGO Non Governmental Organization

OHADA Organisation pour l’Harmonisation en Afrique du Droit des Affaires

(Organization for Harmonization of Business Law in Africa)

OHVN Office de la Haute Vallée du Niger (Upper Niger River Valley Program)

OP/BP Operational Policy/Bank Procedure

ORAF Operational Risk Assessment Framework

PAD Project Appraisal Document

PAP Project Affected People

PBMC Performance Based Maintenance Contract

PCR Physical Cultural Resource

PCRMP Physical Cultural Resource Management Plan

PDO Project Development Objective

PIA Project Impact Area

PP Project Paper

RAI Rural Access Index

RAP Resettlement Action Plan

RED Road Economic Decision

RPF Resettlement Policy Framework

SDR Special Drawing Rights

SIL Specific Investment Loan

SPN Specific Procurement Notice

SSA Sub-Saharan Africa

TCIP Transport Corridors Improvement Project

TSP Transport Sector Project

UNDB United Nations Development Business

UNDP United Nations Development Program

US$ United States Dollar

VAT Value Added Tax

VOC Vehicle Operating Cost

WATTFP West Africa Transport & Transit Facilitation Project

Vice President: Obiageli K. Ezekwesili

Country Director: Ousmane Diagana

Sector Manager: Supee Teravaninthorn

Task Team Leader: Fabio Galli

THE REPUBLIC OF MALI

SECOND TRANSPORT SECTOR PROJECT

ADDITIONAL FINANCING

CONTENTS

Additional Financing Data Sheet ................................................................................................... i

I. Introduction ..........................................................................................................................1

II. Background and Rationale for Additional Financing in the amount of US$23 million ......1

III. Proposed Changes ................................................................................................................5

IV. Appraisal Summary .............................................................................................................7

Annex 1: Revised Results Framework and Monitoring Indicators ..............................................13

Annex 2: Operational Risk Assessment Framework (ORAF) .....................................................18

Annex 3: Procurement Arrangements ..........................................................................................21

Annex 4: Financial Management and Disbursement ...................................................................27

i

THE REPUBLIC OF MALI

SECOND TRANSPORT SECTOR PROJECT

ADDITIONAL FINANCING DATA SHEET

Basic Information - Additional Financing (AF)

Country Director: Ousmane Diagana

Sector Director: Jamal Saghir

Sector Manager: Supee Teravaninthorn

Team Leader: Fabio Galli

Project ID: P121693

Expected Effectiveness Date: September

30, 2011

Lending Instrument: Specific Investment

Loan (SIL)

Additional Financing Type: Cost Overrun

and Scale Up

Sectors: Transport (Roads and Highways)

100%

Themes: Rural services and infrastructure

90%, other urban development 10%

Environmental category: B

Expected Closing Date: December 31,

2014

Joint IFC: NO

Joint Level: NA

Basic Information - Original Project

Project ID: P090075 Environmental category: B (Partial

Assessment)

Project Name: Mali Second Transport

Sector Project

Expected Closing Date: December 31,

2014

Lending Instrument: Specific Investment

Loan (SIL)

Joint IFC: NO

Joint Level: NA

AF Project Financing Data

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

Proposed terms: Standard IDA Credit Terms

AF Financing Plan (US$m)

Source Total Amount (US $m)

Total Project Cost:

Cofinancing:

Borrower:

Total Bank Financing:

IBRD

IDA

New

Recommitted

27.0

0.0

4.0

23.0

0.0

23.0

23.0

0.0

Client Information

Recipient: The Republic of Mali

Responsible Agency: Ministry of Equipment and Transport (MET), National Coordination

Unit (NCU)

Contact Person: Mr. Tiémoko Y. KONE

Telephone No.: (223) 66 75 95 18

Email: tykone@pstmali.org or tykone5@yahoo.fr

ii

AF Estimated Disbursements (Bank FY/US$m)

FY 2012 2013 2014 2015

Annual 2.0 10.0 9.0 2.0

Cumulative 2.0 12.0 21.0 23.0

Project Development Objective and Description

Original Project Development Objective: The PDO for the project is to provide access and

better transport services to the recipient‟s rural and urban communities through improvement

of essential rural infrastructure and important Bamako transport infrastructure.

Revised Project Development Objective: The PDO for the proposed Additional Financing

(AF) will remain the same as for the Mali Second Transport Sector Project (MTSP-II).

Project Description:

What follows is a short description of the MTSP-II components:

Component A (Rural Access Improvement). This component includes the following

five sub-components: (a) rehabilitation of about 350 km of rural roads (Bandiagara –

Douentza (including the Togo-Tongo section) (140 km) and Kita – Toukoto - Bafoulabe

(210 km)); (b) periodic maintenance of about 1,400 km of rural roads; (c) performance

based maintenance of about 400 km of rural roads; (d) implementation of socioeconomic

activities proposed by local communities; and (e) reconstruction of four river jetties

along the Niger River.

Component B (Bamako Urban Transport System Improvement). This component

includes the following four sub-components: (a) reconstruction of a 1.3 km bus-only lane

on the Boulevard du Peuple; (b) reconstruction of a partially dedicated 4.8 km ring road

for minibuses (SOTRAMA ring road) in downtown Bamako to segregate and facilitate

minibus traffic; (c) rebuilding pedestrian walkways and constructing two pedestrian

overpasses; and (d) providing institutional support, technical assistance and consultant

services to develop traffic management capacity for the city of Bamako.

Component C (Institutional Strengthening and Project Management). This

component includes the following six sub-components: (a) support the implementation of

financial and institutional mechanisms to sustain road maintenance; (b) implement a

rural road access index study; (c) management of social and environmental aspects of

the project including HIV/AIDS prevention and road safety; (d) development of medium

term sector strategies including capacity building for various technical structures and

implementation agencies; (e) project management and financial and technical audits; and

(f) establish a monitoring and evaluation system (M&E), including communications

activities.

The proposed AF is expected to fund the following activities which fall under Component A

(Rural Access Improvement) of the MTSP-II:

Rehabilitation of the Bandiagara – Douentza rural road including the Togo-Tongo

section and excluding design and supervision consultant services (estimated cost

about US$17.8 million): The rehabilitation of the Bandiagara – Douentza rural road was

already included in the MTSP-II but could not be funded due to higher than expected bid

iii

prices. The proposed AF is expected to fund the rehabilitation of the critical Bandiagara

– Douentza (including the Togo – Tongo section) rural road including a limited set of

socio-economic infrastructure such as drilling of water wells in villages along the project

roads.

Periodic maintenance of an additional 275 km of rural roads excluding design and

supervision consultant services (estimated cost about US$4.4 million): The MTSP-II

is already funding the maintenance of about 1,800 km of rural roads, of which about

1,400 km have already been maintained. The proposed AF is expected to fund the

periodic maintenance of an additional 275 km of rural roads. The periodic maintenance

works contracts may also include a limited set of socio-economic infrastructure such as

drilling of water wells in villages along the project roads.

Design and supervision consultant services (estimated cost about US$0.8 million): The proposed AF will fund all consultant services required to implement the rural road

maintenance works.

Safeguard and Exception to Policies

Safeguard policies triggered:

Environmental Assessment (OP/BP 4.01)

Natural Habitats (OP/BP 4.04)

Forests (OP/BP 4.36)

Pest Management (OP 4.09)

Physical Cultural Resources (OP/BP 4.11)

Indigenous Peoples (OP/BP 4.10)

Involuntary Resettlement (OP/BP 4.12)

Safety of Dams (OP/BP 4.37)

Projects on International Waters (OP/BP 7.50)

Projects in Disputed Areas (OP/BP 7.60)

[X]Yes [ ] No

[ ]Yes [X] No

[X]Yes [ ] No

[ ]Yes [X] No

[X]Yes [ ] No

[ ]Yes [X] No

[X]Yes [ ] No

[ ]Yes [X] No

[ ]Yes [X] No

[ ]Yes [X] No

Does the project require any exceptions from Bank policies?

Have these been approved by Bank management?

[ ]Yes [X] No

Conditions and Legal Covenants: Additional Financing

Financing Agreement

Reference

Description of Condition/Covenant Due Date

Article V.5.01 The delegated management contract for Part 1 (b)

(i) and (ii) and (c) of the Project between the

Recipient and the Infrastructure and Rural

Equipment Works Execution Agency and the

delegated management contract for Part 1 (a) and

Part (b) (iii) of the Project between the

Beneficiary and the Road Maintenance Works

Execution Agency have been updated in form and

substance satisfactory to the Association.

Effectiveness

condition.

Schedule 2.

Section 2.B.1

The Recipient shall maintain or cause to be

maintained a financial management system in

accordance with the provisions of Section 4.09 of

the General Conditions.

Until the project

closes.

iv

Schedule 2.

Section 2.B.2

Without limitation on the provisions of Part A of

this Section, the Recipient shall prepare and

furnish to the Association not later than forty-five

(45) days after the end of each calendar quarter,

interim unaudited financial reports for the Project

covering the quarter, in form and substance

satisfactory to the Association.

Prepared and

furnished to the

Association no

later than forty-five

(45) days after the

end of each

calendar quarter.

Schedule 2.

Section 2.B.3

The Recipient shall have its Financial Statements

audited in accordance with the provisions of

Section 4.09 (b) of the General Conditions. Each

audit of the Financial Statements shall cover the

period of one fiscal year of the Recipient. The

audited Financial Statements for each such period

shall be furnished to the Association not later

than six months after the end of such period.

No later than six

months after the

end of each period

of one fiscal year

of the Recipient.

Schedule 2.

Section 5.B.1

The Recipient shall recruit, in accordance with

the provisions of Section III of this Schedule, an

external auditor, with qualifications, experience,

and terms of reference satisfactory to the

Association, for purposes of the audit referred to

in Section 2.B.3 of this Schedule.

No later than thirty

(30) days following

the Effective Date

Schedule 2.

Section 5.B.2

The Recipient shall ensure that funds allocated to

road maintenance as reflected in its draft 2010

Finance Law are at a minimum FCFA

14,500,000,000, and that, no later than September

30, 2011, 2012, 2013 and 2014 respectively, said

funds as reflected in its draft 2011, 2012, 2013

and 2014 Finance Law, respectively, shall be

those agreed with the Association.

No later than

September 30,

2011, 2012, 2013

and 2014

respectively.

Schedule 2.

Section 5.B.3

The Recipient shall continue to ensure that at

least 70 percent of its dedicated yearly road

maintenance funds are generated by road user

fees.

The Recipient shall

continue to do that

until the project

closes.

1

I. Introduction

1. The Project Paper (PP) seeks the approval of the Executive Directors to provide

Additional Financing (AF) in the amount of Special Drawing Rights (SDR) 14.2 million

(US$23 million equivalent) to the Republic of Mali for the Second Transport Sector Project

(MTSP-II) (Credit 4303-MLI). What follows is the rationale for the proposed AF, the proposed

changes and appraisal summary.

2. The proposed AF will help to finance the costs associated with: (a) substantial

implementation of part of the rural road rehabilitation sub-component activities that could not be

funded under the MTSP-II due to higher than expected civil works costs; and (b) a scale-up of

the implementation of the rural road periodic maintenance sub-component.

3. The activities planned under the proposed AF and the financial management,

procurement and implementation arrangements will be the same as for the MTSP-II. The

implementation of the proposed AF is expected to be completed within 36 months of the original

closing date for the MTSP-II of December 31, 2011.

4. Partnership arrangements. The MTSP-II is not being co-financed with any other

development partner. However, together with the International Development Association (IDA),

several development partners (European Union (EU), African Development Bank (AfDB),

Islamic Development Bank (IDB), Kreditanstalt fuer Wiederaufbau (KfW) and the Arab Bank

for Economic Development in Africa (BADEA)) are supporting the objectives of the Government

of Mali‟s (GOM‟s) 2007-2011 “Transport Sector Policy Letter”.

II. Background and Rationale for Additional Financing in the amount of US$23 million

Country context

5. Mali is a large (1,241,238 square km) land locked country with a rapidly increasing

population of about 14 million unevenly spatially distributed due to the fact that about 60 percent

of its surface area is desert. In 2009 Mali‟s per capita gross national income (GNI) was about

US$580 and it ranked 160 out of 169 countries covered by the 2010 United Nations

Development Program (UNDP) Human Development Index.

6. Mali‟s economy has shown good macro-economic resilience over the last several years,

despite having been hit by a series of external shocks (poor rains, food and oil price increases,

decrease in the price of cotton on world markets, world economic slowdown). This has translated

into an average real gross domestic product (GDP) growth rate of about 4.6 percent for the

2004-2008 period. Despite the global recession of 2008-2009, the GDP growth rate was still

about 4.5 percent in 2009 and increased to about 5.8 percent in 2010. However, Mali‟s economy

remains vulnerable to exogenous and endogenous shocks such as deterioration in the terms of

trade, poor rainfall, fall in remittances, tourist arrivals and aid flows and an increase in food and

oil prices. Although gold has become the most important export commodity by value, cotton

remains the second most important, and accounts for about 85 percent of Mali‟s export tonnage.

2

7. The modal share for road transport in Mali is currently over 90 percent for goods and

passengers, and over 90 percent of goods by volume are exported by road. Although over the last

two decades the GOM has invested heavily in improving its road network, the total road network

length is about 89,000 km which gives it one of the lowest road densities in West Africa.

Furthermore, its Rural Access Index (RAI) is about 16.7 percent which is below the average for

sub-Saharan Africa (SSA). Based on the recently adopted road classification system, Mali has a

total classified road network of 89,024 km of which: (a) 14,102 km of national roads [Route

d'Intérêt National]; (b) 7,052 km of regional roads [Route d'Intérêt Régional]; (c) 28,929 km of

local roads [Route d'Intérêt local]; and (d) 38,941 km of communal roads [Routes d'Intérêt

Communal].

Objective, design and scope of the original Project

8. The MTSP-II was approved by the World Bank Board of Directors on May 24, 2007 and

became effective on August 31, 2007. The total estimated project cost was about

US$106.1 million of which about US$90.0 million was funded by IDA and the balance (about

US$16.1 million) by GOM. The closing date of the original MTSP-II is December 31, 2011,

which is being extended to December 31, 2014, to coincide with the closing date of the AF.

9. The Project Development Objective (PDO) is to provide access and better transport

services to the recipient‟s rural and urban communities through improvement of essential rural

infrastructure and important Bamako transport infrastructure.

10. The MTSP-II supports the objectives of GOM‟s “Transport Policy Letter” (2007-2011)

which focuses on: (a) regional social and economic development; (b) provision of sustainable

transport infrastructure; (c) increased mobility of persons in rural/urban areas; (d) increased

efficiency and performance of the transport of goods sector; (e) private sector participation in the

transport sector; (f) institutional capacity building in the transport sector; (g) integration of social

and environmental issues in the transport sector; and (h) Human Immunodeficiency

Virus/Acquired Immune Deficiency Syndrome (HIV/AIDS) prevention in the transport sector.

These strategic objectives are the key pillars of GOM‟s ongoing Transport Sector Program.

11. The MTSP-II objectives are also consistent with Mali‟s second Growth and Poverty

Reduction Strategy Framework (GPRSF) and the Bank‟s current Country Assistance Strategy

(CAS) Pillar One which focus on developing infrastructure and strengthening productive sectors.

More specifically, the project directly supports the following Pillar One‟s priorities: (a) food

security and rural development; and (b) infrastructure development. What follows is a short

description of the major MTSP-II components.

12. Component A (Rural Access Improvement). This component includes the following

five sub-components: (a) rehabilitation of about 350 km of rural roads (Bandiagara – Douentza

(including the Togo-Tongo section) (140 km) and Kita – Toukoto - Bafoulabe (210 km)); (b)

periodic maintenance of about 1,400 km of rural roads; (c) performance based maintenance of

about 400 km of rural roads; (d) implementation of socioeconomic activities proposed by local

communities; and (e) reconstruction of four river jetties along the Niger River.

3

13. Component B (Bamako Urban Transport System Improvement). This component

includes the following four sub-components: (a) reconstruction of a 1.3 km bus-only lane on the

Boulevard du Peuple; (b) reconstruction of a partially dedicated 4.8 km ring road for minibuses

(SOTRAMA ring road) in downtown Bamako to segregate and facilitate minibus traffic;

(c) rebuilding pedestrian walkways and constructing two pedestrian overpasses; and

(d) providing institutional support, technical assistance and consultant services to develop traffic

management capacity for the city of Bamako.

14. Component C (Institutional Strengthening and Project Management). This

component includes the following six sub-components: (a) support the implementation of

financial and institutional mechanisms to sustain road maintenance; (b) implement a rural road

access index study; (c) management of social and environmental aspects of the project including

HIV/AIDS prevention and road safety; (d) development of medium term sector strategies

including capacity building for various technical structures and implementation agencies;

(e) project management and financial and technical audits; and (f) establish a monitoring and

evaluation system (M&E), including communications activities.

Project implementation performance

15. Achievements. The MTSP-II has made good overall implementation progress despite the

funding gap.

16. Project ratings. During the last twelve months the PDO rating was either Moderately

Satisfactory or Satisfactory while the Implementation Progress (IP) rating was either Satisfactory

or Moderately Satisfactory. The March 2011 supervision mission for the MTSP-II rated the

achievement of the PDOs as Satisfactory and IP rating as Moderately Satisfactory. The primary

reason for the Moderately Satisfactory IP rating is due to the disbursement lag caused

by: (a) slower than expected implementation of the two largest road works contracts (Bamako

urban road infrastructure works and Badougou – Toukoto – Bafoulabe road rehabilitation works)

which make up over 50 percent of project funds; and (b) decision taken by GOM in agreement

with IDA, to put on hold certain project activities to preserve sufficient unallocated funding to

fully fund the urban transport infrastructure component. As a result of the October 2010 midterm

review of the project, it was decided to re-start the implementation of the balance of activities

that had been put on hold. Furthermore, the contractors in consultation with GOM, have put in

place measures such as the mobilization of additional plant, personnel and equipment, to

improve the physical implementation performance of the above cited works contracts. This

means that project disbursements are now expected to pick up substantially over the next six

months. What follows is an update of project implementation progress broken down by major

component.

17. Component A. Tangible improvements have already been achieved under the MTSP-II in

improving rural road access and mobility through the implementation of the following major

sub-components: (a) periodic maintenance of about 1,000 km of key rural roads throughout Mali;

(b) performance based maintenance of about 400 km of key rural roads; (c) rehabilitation of the

first 45 km of the Badougou – Toukoto – Bafoulabe rural road; and (d) rehabilitation/

reconstruction of four river jetties.

4

18. Component B. The MTSP-II has also made progress in improving the Bamako urban

transport system through: (a) rehabilitation of about 18 km of pedestrian walkways;

(b) rehabilitation of the SOTRAMA ring road; and (c) substantial rehabilitation of the about

1.3 km Boulevard du Peuple.

19. Component C. The MTSP-II has also made good progress in facilitating institutional

strengthening of the road transport sector. For example, with support from the MTSP-II, GOM

has been able to fully operationalize the Mali Road Authority, which is responsible for road

maintenance funding. Furthermore, the MTSP-II was partially responsible for GOM increasing

in 2009 the fuel levy dedicated for road maintenance from FCFA 3 per liter to FCFA 25 per liter.

This has meant that for fiscal year 2010, about 85 percent of Mali‟s Road Authority budget was

generated by road user charges, of which two-thirds was derived from the fuel levy. Finally, by

funding two major road maintenance contracts covering about 400 km, the MTSP-II has

successfully introduced Performance Based Road Maintenance Contracts (PBMC) to Mali.

20. Project disbursements. As of end-April 2011 cumulative disbursements for the MTSP-II

had reached about 62 percent (US$56.2 million) of the original Credit amount. Thanks to

measures already taken by GOM to boost disbursements, by end-July 2011 cumulative project

disbursements are expected to reach about US$68 million, which is about 75 percent of the

original Credit amount.

21. Fiduciary compliance. The MTSP-II continues to be in compliance with all legal

covenants and there are no unresolved Financial Management (FM), procurement, social and

environmental fiduciary issues. In addition, the MTSP-II has not had any audit issues and all

audits are current.

Rationale for the proposed AF

22. The overall rationale for the proposed AF is to assist the MTSP-II to fully achieve its

PDO which is to provide access and better transport services to the recipient‟s rural and urban

communities through improvement of essential rural infrastructure and important Bamako

transport infrastructure. This will be achieved by funding under the proposed AF an

unanticipated financing gap and by scaling up the implementation of one of the project sub-

components. The proposed AF will support the following specific activities: (a) rehabilitation of

the Bandiagara – Douentza rural road (including the Togo-Tongo section) (about 140 km);

(b) periodic maintenance of an additional 275 km of rural roads; and (c) design and supervision

consultant services.

23. The proposed AF is expected to cover the financing gap caused by higher than

anticipated bid prices for the rural road rehabilitation works contracts (Bandiagara – Douentza

and Badougou – Toukoto – Bafoulabe) when compared to the MTSP-II Project Appraisal

Document (PAD) estimates. The higher than expected costs were primarily caused by an

increase in the price of petroleum products and road construction costs throughout Sub Sahara

Africa (SSA) during the 2007/2008 period. The activity that will be scaled up under the proposed

AF is the rural road periodic maintenance sub-component. So far under the MTSP-II about

5

1,400 km of rural roads have already been successfully maintained and under the proposed AF

an additional 275 km of rural roads are expected to be maintained.

24. The rural roads that are expected to be funded under the proposed AF are critical to the

country‟s overall economic development, rural connectivity and accessibility. For example, the

Bandiagara – Douentza (including the Togo-Tongo section) rural road connects the country‟s

main tourist area (Plateau Dongo/Gourma) with the national road network, and provides an

alternative all weather road between the cities of Sevare and Douentza, and through one of the

poorest and most isolated parts of Mali. The periodic maintenance of an additional 275 km of

rural roads will improve all weather rural accessibility and agricultural productivity in key cotton

producing areas.

25. Finally, GOM evaluated the possibility of funding through its own budget the cost

overruns and scaling up of certain activities of the MTSP-II but was not able to mobilize the

requisite funding. Therefore, GOM has requested IDA for additional funding to cover both the

funding gap and to scale up certain project activities to fully meet the PDO for the MTSP-II.

III. Proposed Changes

26. PDO. The PDO for the MTSP-II remains relevant and consistent with the activities being

proposed under the AF. Therefore, no changes and/or modifications will be made to the PDO.

The proposed AF will only be supporting activities that were included in the MTSP-II.

27. Implementation framework. The implementation arrangements for the proposed AF will

remain the same as for the MTSP-II. The existing Steering Committee will be responsible for

overall oversight for the implementation of the MTSP-II and proposed AF, while the existing

National Coordination Unit (NCU) will be responsible for overall coordination and

implementation. The Ministry of Equipment and Transport (MET) will delegate the management

of the implementation of the rural road works component to the Road Maintenance Works

Execution Agency (AGEROUTE) and the Infrastructure and Rural Equipment Works Execution

Agency (AGETIER) through a “Convention de Maitrise d’Ouvrage Déleguée”. Under the

MTSP-II both AGEROUTE and AGETIER have been effective in expediting the procurement

process and in closely managing on the field the implementation of civil works contracts.

Furthermore, the FM, procurement, social and environmental fiduciary arrangements for the

proposed AF are expected to remain the same as for the MTSP-II.

28. Social and environmental safeguards. The environmental category rating for the

MTSP-II is „B‟. Taking into account that the proposed AF will not fund any new activities, the

environmental rating for the proposed AF will also remain a category „B‟. No additional

safeguard policies will be triggered beyond what has already been triggered for the MTSP-II.

29. Environmental and social safeguards for the civil works to be financed under the

proposed AF will be guided by the Environmental Social Management Framework (ESMF) and

Resettlement Policy Framework (RPF) prepared for MTSP-II. Environmental Social Impact

Assessments (ESIAs)/Environmental Social Management Plans (ESMPs) and Resettlement

Action Plans (RAPs) are expected to be prepared as and when necessary during project

6

implementation once sites and works are identified. A Physical Cultural Resources Management

Plan (PCRMP) has been prepared, consulted upon and disclosed in April 2011 for the

Bandiagara – Douentza rural road (including the Togo-Tongo section), rehabilitation works to

protect cultural heritage sites along the road and will be implemented together with the

environmental mitigation measures.

30. Results framework. The proposed AF is expected to fund activities already covered

under the MTSP-II. The results framework has been slightly revised to assess progress to date in

the implementation of the activities being implemented under the MTSP-II and to include the

planned activities under the proposed AF. More specifically under the proposed AF: (a) the

number of km of rural roads to be maintained under the project will be increased from about

1,800 km to about 2,075 km; (b) the number of km of rural roads to be rehabilitated will decrease

from about 350 km to about 295 km due to the fact that the Kita – Toukoto (about 55 km) section

of the Kita – Toukoto – Bafoulabe road had already been rehabilitated under a different

development partner project funding; (c) the number of local development activities

implemented has been modified to number of local infrastructure constructed/rehabilitated since

this activity is limited to minor civil works (i.e.; drilling of wells and minor rehabilitation to

schools and rural dispensaries) in selected villages along the rural roads being maintained under

the project; and (d) the Sorokoro – Fana rural road section (27 km) was dropped due to the fact

that the section was in good condition and was replaced by another rural road section that was

more deteriorated and required periodic maintenance. Annex 1 gives the details of the expected

changes in the M&E framework for the proposed AF.

Proposed AF activities

31. The total estimated cost of the proposed AF activities, including all taxes is about

US$27 million. IDA is expected to provide about US$23 million in financing for the proposed

AF, while GOM will provide about US$4 million in counterpart funding in the form of tax

exemptions. This is the same counterpart funding arrangement that was used for the MTSP-II.

The proposed AF is expected to fund the following activities which fall under Component A

(Rural Access Improvement) of the MTSP-II:

Rehabilitation of the Bandiagara – Douentza rural road including the Togo-Tongo

section and excluding design and supervision consultant services (estimated cost

about US$17.8 million): The rehabilitation of the Bandiagara – Douentza rural road

(including the Togo – Tongo section) was already included in the MTSP-II but could not

be funded due to higher than expected bid prices. The proposed AF is expected to fund

the rehabilitation of the critical Bandiagara – Douentza (including the Togo – Tongo

section) rural road including a limited set of socio-economic infrastructure such as

drilling of water wells in villages along the project roads.

Periodic maintenance of an additional 275 km of rural roads excluding design and

supervision consultant services (estimated cost about US$4.4 million): The MTSP-II

is already funding the maintenance of about 1,800 km of rural roads, of which about

1,400 km have already been maintained. The proposed AF is expected to fund the

periodic maintenance of an additional 275 km of rural roads. The periodic maintenance

7

works contracts may also include a limited set of socio-economic infrastructure such as

drilling of water wells in villages along the project roads.

Design and supervision consultant services (estimated cost about US$0.8 million):

The proposed AF will fund all consultant services required to implement the rural road

maintenance works.

Table 1 – MTSP-II and Proposed AF Costs (US$ million equivalent)

Project Component Original Project Cost Additional Financing Revised Cost

IDA GOM Total IDA GOM Total IDA GOM Total

A. Rural Access

Improvement 68.8 12.3 81.1 23.0 4.0 27.0 91.8 16.3 108.1

B. Bamako Urban

Transport System

Improvement

15.0 3.1 18.1 0.0 0.0 0.0 15.0 3.1 18.1

C. Institutional

Strengthening and Project

Management

6.2 0.7 6.9 0.0 0.0 0.0 6.2 0.7 6.9

TOTAL 90.0 16.1 106.1 23.0 4.0 27.0 113.0 20.1 133.1

32. Implementation time frame for proposed AF activities. The activities to be funded by

the proposed AF are expected to be completed by December 31, 2014, which is within 36

months of the December 31, 2011 original closing date of the MTSP-II.

IV. Appraisal Summary

Proposed activities

33. The activities that are planned to be funded under the proposed AF are the same as those

funded under the Component A (Rural Access Improvement) of the MTSP-II and are:

(a) rehabilitation of Bandiagara – Douentza (including the Togo-Tongo section) rural road (about

140 km),; (b) periodic maintenance of an additional 275 km of rural roads; and (c) design and

supervision consultant services.

Economic analysis

34. The economic analysis for the proposed AF rural road rehabilitation and maintenance

works will use the same methodology that was used for the MTSP-II.

35. The Bandiagara – Douentza rural road (including the Togo-Tongo section) was selected

from the priority list of roads identified under the IDA funded Transport Sector Project (TSP)

and is part of the GOM‟s priority road investment program. The estimated Economic Rate of

Return (ERR) for the rehabilitation of the Bandiagara - Douentza (including the Togo – Tongo

section) rural road has been assessed using the Road Economic Decision (RED) Model and has

been estimated in the PAD at about 15 percent. The economic analysis is in the process of being

updated to re-confirm the ERR for the planned Bandiagara – Douentza (including the Togo-

Tongo section) rural road rehabilitation works.

8

36. Consistent with the MTSP-II, the rural roads slated for periodic maintenance under the

proposed AF are expected to be selected from cotton growing areas or areas with high

agricultural potential. They will then be submitted to the same multi-criteria approach that was

used under the MTSP-II, which is based on a combination of economic and social benefits such

as: (a) provision of all weather rural access; (b) reduction in Vehicle Operating Costs (VOCs);

and (c) generation of agricultural benefits and surpluses.

Implementation arrangements

37. Overall implementation of the proposed AF will be coordinated and supervised by the

already existing and fully functioning Steering Committee established under the MTSP-II. The

transport sector NCU, is already established and working on the implementation of other IDA

funded projects, and will continue to be used to coordinate the implementation of the proposed

AF activities. The NCU will also continue to be responsible to meet the financial, procurement,

social, environmental, M&E aspects for the proposed AF.

38. The existing implementation arrangements in which the management of road works

contracts has been delegated by GOM to AGEROUTE and AGETIER will remain in place. The

proposed AF will build on the experience accumulated with the implementation of the parent

project as well as that of other IDA funded transport sector projects to ensure that AGEROUTE

and AGETIER play their full intended role as GOM‟s technical advisors and engineer (Maîtrise

d’Ouvrage Déléguée). The focal points already in place in the two agencies will continue

working in close collaboration with the NCU to implement the proposed AF activities.

Social and environmental safeguards

39. Environmental rating. The environmental rating for the proposed AF will remain the

same (B rating) as for the MTSP-II, and the same safeguard policies (Operational Policy/Bank

Procedure (OP/BP) 4.01, 4.11, 4.12 and 4.36) that were triggered for the MTSP-II are also

triggered for the proposed AF.

40. Background on implementation of social and environmental aspects of MTSP-II. As

part of the MTSP-II, an ESMF and a RPF were prepared and disclosed in-country in December

2006 and at the World Bank‟s InfoShop in January 2007. The environmental and social

safeguard measures for the MTSP-II road maintenance works were guided by the ESMF and the

RPF. This is because the rural roads to be rehabilitated or periodically maintained under the

MTSP-II were not all pre-selected and their locations were unknown during preparation. Rural

roads maintenance works financed under the MTSP-II were expected to be identified and

screened, on a programmatic/rolling basis, during the life of the MTSP-II. The ESMF and RPF

were disclosed in 2006 in-country and in 2007 at the World Bank‟s InfoShop for the MTSP-II,

and after review, were re-disclosed in 2008 during the preparation of the Mali component of the

West Africa Transport and Transit Facilitation Project (WATTFP).

41. Consistent with the disclosed ESMF, and RPF, site specific ESMPs have been prepared

and disclosed for each rural road rehabilitation and maintenance works funded under the

MTSP-II. The actual implementation of the ESMPs was carried out as part of the road

9

rehabilitation works contracts and supervised by the supervision consultants,

AGEROUTE/AGETIER and NCU. Environmental mitigation actions carried out under the

MTSP-II are primarily related to: (a) reforestation along the rural roads rehabilitated/maintained;

(b) dust and noise abatement during construction; (c) safe disposal of waste and excess

constructions materials; (d) ensuring that local flora and fauna is not disturbed, captured or

hunted by contractors; (e) restoring borrow pits and quarries used for the road rehabilitation and

periodic maintenance works; (f) sensitizing local communities on the importance of preserving

environment and maintaining the planted trees; and (g) sensitizing contractors‟ employees and

local communities alongside the roads on HIV/AIDS and other sexually transmitted diseases risk

mitigations. Where required, an Abbreviated Resettlement Action Plan (ARAP) has been

prepared and implemented consistent with the parameters of the already disclosed RPF.

42. The MTSP-II prepared a Physical Cultural Resources (PCR) study, inclusive of a

PCRMP, covering the Bandiagara-Douentza road (including the Togo-Tongo section) and Kita-

Tokoto-Bafoulabé rural roads, to ensure that due diligence will be exercised at all time during the

rehabilitation works. This study was disclosed in April 2011. Consistent with the triggering of

the cultural property policy, the project: (a) carried out a systematic study to identify and analyze

the potential disruption that rural roads rehabilitation could cause on cultural heritage in the

Project Impact Area (PIA); (b) developed a PCRMP for archaeological and cultural resources

and mitigation of impacts; and (c) geo-referenced the elements of archaeological and cultural

interest to be considered during project implementation. These main elements of cultural and

archeological importance concern cemeteries and places of worship and remembrance. The PCR

study emphasizes preserving the cultural resources deemed valuable from the point of view of

the local communities. This will require sustained consultation with local communities at the

preparatory, construction and operation of the road rehabilitated under the MTSP-II and

proposed AF.

43. OP/BP 4.36 (Forestry) was triggered for the MTSP-II due to the need to conduct

reforestation along the roads rehabilitated/maintained to compensate for loss of trees and

vegetation.

44. Finally, to monitor the implementation of the social and environmental aspects of the

MTSP-II, the NCU has recruited a Social and Environmental Specialist. As a result of putting in

place a robust social and environmental framework to cover the social and environmental

impacts of the multi-year rolling road rehabilitation/periodic rural road maintenance program

under the MTSP-II, the overall management of the social and environmental safeguards of the

MTSP-II has been deemed to be satisfactory.

45. Implementation of social and environmental aspects of proposed AF. The

implementation of the social and environmental safeguard measures for the proposed AF will

follow the provisions of ESMF and RPF that were prepared and disclosed for the whole transport

sector to meet the requirements of the MTSP-II. Once the full and final list of existing rural roads

to be maintained under the proposed AF has been finalized, ESIAs/ESMPs and any

RAPs/ARAPs as required, will be prepared for review by IDA. The finalization of the

ESIAs/EMPs and/or RAPs/ARAPs will be guided by the provisions of the recently completed

PCR study. This is to ensure that the potential PCR impacts of the road rehabilitation works

10

funded under the proposed AF are assessed and mitigation measures commensurate to those

impacts, including proper handling of chance finds are implemented in the design, screening,

implementation, monitoring of the proposed road maintenance works.

46. Once the site specific social and environmental safeguard instruments have been

reviewed and endorsed, they will be disclosed in country and at Bank InfoShop before the rural

roads rehabilitation/maintenance works start on the ground. The specific social and

environmental mitigation measures will be included in the contracts for rural road rehabilitation

and maintenance works and their implementation will be closely supervised by the supervision

consultants, AGEROUTE and AGETIER, and periodically by the NCU. The social impact

mitigation measures, linked to the possible need to acquire land or displace structures of Project

Affected Peoples (PAPs), will be prepared and implemented following the RPF and with the

assistance of NGOs or directly by the NCU.

47. As in the case of the MTSP-II, for the proposed AF, implementation monitoring of the

ESMPs and RAPs/ARAPs for the road rehabilitation works will be done by the NCU,

AGEROUTE and AGETIER who provide advice and technical support to contractors to reduce

the environmental impact during civil works execution. Sensitization campaigns will be

organized ahead of the rural roads works start, to explain the content of the measures and to

ensure the ownership and the participation by the concerned population. The NCU, AGEROUTE

and AGETIER will also review and approve the ESMPs, RAPs/ARAPs and related bidding

documents before their disclosure to ensure compliance with criteria established in the social and

environmental framework for the MTSP-II and proposed AF. Finally, the external monitoring

which is devolved to the Direction Nationale de l’Assainissement et du Contrôle des Pollutions

et des Nuisances (DNACPN), to verify compliance with national and Bank safeguard policies,

will now be expanded to include the PCR impact of planned road works activities under the

proposed AF.

Procurement

48. The procurement arrangements for the proposed AF will be the same as for the MTSP-II.

The only major difference is that for the proposed AF activities, the more up-to-date

procurement guidelines of January 2011 will apply - "Guidelines: Procurement of Goods, Works

and Non-consulting Services Under IBRD Loans and IDA Credits and Grants by World Bank

Borrowers" dated January 2011; and "Guidelines: Selection and Employment of Consultants

under IBRD Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011.

49. For each contract to be financed under the proposed AF, the different procurement or

consultant selection methods, estimated costs, prior review requirements, and time frame will be

described in the Procurement Plan, see Annex 3 for more details. A Procurement Plan for the

activities expected to be funded under the proposed AF has been prepared and approved by IDA

on April 4, 2011. The Procurement Plan is expected to be updated at least annually or as required

to reflect the project implementation progress.

11

50. The Borrower will prepare and submit to the Bank a General Procurement Notice (GPN)

which will be in addition to the GPN for the MTSP-II. A Specific Procurement Notice (SPN) for

all goods (if any) and works to be procured under International Competitive Bidding (ICB) and

Requests for Expressions of Interest for all consulting services costing the equivalent of

US$200,000 and above will be published in United Nations Development Business (UNDB) and

in the national press, in addition to other media with wide circulation. All other specific

procurement notices and other requests for expressions of interest shall be published at least in

the national press with wide circulation.

Financial Management

51. The proposed AF is expected to use the same financial management and disbursement

procedures that are being used for the MTSP-II. A financial management assessment of the NCU

that is already managing the FM aspects of the MTSP-II, and will manage the FM aspects of the

proposed AF, was conducted in accordance with the new World Bank Group Financial

Assessment Principles.

52. The overall financial management performance of the MTSP-II was rated Satisfactory

and the related FM risk was rated as Moderate following the last detailed review of FM aspects

in October 2010, which was updated in March 2011. Staffing remains adequate and proper books

of accounts and supporting documentation are kept in respect of all expenditures. The FM audit

for the year ending December 2009 for the MTSP-II was submitted on time, and was

unqualified. The interim un-audited financial reports for the MTSP-II are also in general

submitted on time and are acceptable to IDA.

53. In order to maintain and strengthen this adequate control environment, the MTSP-II

needs to: (a) update the FM and administrative procedures manual to take into account the

proposed AF activities; (b) include the proposed AF activities in the scope of the financial audit

for the year 2011; and (c) recruit a technical auditor to review technical aspect of the proposed

AF yearly implementation.

54. The overall risk for the proposed AF is rated as Low and based on the assessment the

management of the FM aspects satisfies the Bank‟s minimum requirements (OP/BP 10.02), and

therefore is adequate to provide, with reasonable assurance, accurate and timely financial

management information on the status of the project as required by IDA.

55. Effectiveness conditions. There are no FM effectiveness conditions for the proposed AF.

Proposed AF Risks

56. The activities to be funded under the proposed AF are subject to a limited range of risks

that can easily be mitigated. The weighted risk profile of the proposed AF activities can be

considered Low. See Annex 2 (Operational Risk Assessment Framework (ORAF)) for more

details.

12

Financial Terms and Conditions for Additional Financing

57. The proposed AF would be provided as an IDA Credit. The Country Financing

Parameters allows for up to 100 percent disbursement including taxes and duties. However,

GOM has agreed to provide about FCFA1.8 billion (about US$4 million equivalent) of

counterpart funds in the form of Value Added Tax (VAT) exemption for the civil works. This is

the same counterpart funding arrangement that has been successfully used for the MTSP-II.

13

Annex 1: Revised Results Framework and Monitoring Indicators

The Republic of Mali: Second Transport Sector Project – Additional Financing

Table 1: Results Framework

Revisions to the Results Framework Comments/

Rationale for Change

PDO

Current (PAD) Proposed

To provide access and better

transport services to the

Recipient‟s rural and urban

communities through

improvement of essential rural

infrastructure and important

Bamako transport

infrastructure

No change

PDO indicators

Current (PAD) Proposed change*

• Percentage of rural

population with access to all-

season road

Revised

Share of rural population with access to an

all-season road

Alignment with CORE indicator

wording.

• Time spent to reach specific

rural services from home Dropped

This indicator is difficult to define

and measure. The indicators on

people with access and the average

travel time will cover the main

results of the project intervention.

• Average time per km

traveled

Revised

Average time per km traveled

(rural/urban), disaggregated by:

- Roads under performance based

contracts

- Badougou - Bafoulabé road

- Rural road under periodic

maintenance

- Bandiagara - Douentza road

Breakdown per type of road has

been made in order to better

capture the improvement due to the

MTSP-II.

• Travel time along the

Boulevard du Peuple

No change

Used as outcome indicator in the

PAD.

• Accidents on Boulevard du

Peuple are reduced Continued

The AF does not include any urban

transport activities. Activities are

expected to be completed and

achieved by December 31, 2011.

Additional transport sector core indicators applicable to the AF:

New

Roads in good and fair condition as a share

of total classified roads (%)

Core indicator.

New

Total number of direct project

beneficiaries (total number), of which

female (percentage)

The use of this indicator is now

required for all investments

projects.

The direct project beneficiaries are

defined as people living in the PIA.

14

Revisions to the Results Framework Comments/

Rationale for Change

Intermediate Results indicators

Current (PAD) Proposed change*

Component A: Rural Access Improvement

• Number of km of road

rehabilitated (as per PAD)

Continued + revised

Rural roads rehabilitated (km) (decreased

from 350 km to 295 km)

The Kita – Toukoto road (about

55 km) has been dropped from the

MTSP-II.

• Number of km of road

maintained

Continued + revised

(increased from 1,800 km to 2,075 km)

Scaling up of periodic maintenance

component from 1,800 km to

2,075 km.

• Number of local

development activities

implemented

Continued + revised

Local infrastructure constructed/

rehabilitated (number)

The name of the indicator has been

modified to better reflect the

specific nature of the activities.

• Number of wharves built. Achieved

This activity has already been

completed under the MTSP-II, and

the related indicator has met the

target value of 4.

Component B: Bamako Urban transport System Improvement

New

Urban roads rehabilitated (km)

The proposed AF does not include

any urban transport activities.

Activities are expected to be

completed and achieved by

December 31, 2011.

New

Travel time for minibuses on SOTRAMA

ring road

The proposed AF does not include

any urban transport activities.

However, this is new indicator to

more comprehensively assess the

outcomes of the MTSP-II.

Component C: Institutional Strengthening and Project Management

• User charges are at least 40%

of the road maintenance

financing needs by 2008, and

70% by 2011

Continued

Already achieved in 2009, with a

road user charges‟ share in the road

fund‟s budget of 78%.

Furthermore, the resources of the

road fund‟s budget are expected to

be entirely composed for the first

time in 2010 of road user charges,

of which two-thirds being derived

from the fuel levy. The

sustainability of this financing

mechanism will be monitored

during the proposed AF period.

* Indicate if the indicator is Dropped, Continued, New, Revised, or if there is a change in the end of project target value

15

Table 2: Arrangements for Results Monitoring

Project Development Objective (PDO):

To provide access and better transport services to the Recipient’s rural and urban communities through improvement of essential rural infrastructure and important

Bamako transport infrastructure

PDO Level Results Indicators1

Co

re UOM2

Baseline

Original

Project

Start

(2008)

Progress

To Date

(2011)3

Cumulative Target Values4

Frequency Data Source/

Methodology

Responsibility

for Data

Collection

Comments 2012 2013 2014

1. Share of rural population with

access to an all-season road (in

the project area)

% 32 40 42 44 45 Annual Supervision

report NCU

2. Average time per km traveled

Minutes

per km

Not

defined

2a. Roads under performance

based contracts 1 1 1 1

Before the

works start

and after the

works are

completed

Supervision

report NCU

The value of this

indicator is not

cumulative and

can be measured

only before the

works start and

after the works

are finished.

There is no value

when the works

are in progress.

2b. Badougou - Bafoulabé road 1

2c. Rural road under periodic

maintenance (original project) 1.5 1.5 1.5

2d. Bandiagara - Douentza road 6 1.75

2e. Rural road under periodic

maintenance (additional financing) 1.5 1.5

3a. Travel time along the

Boulevard du Peuple

3b. Accidents on Boulevard du

Peuple

Minutes

Number

35

81

16

30

16

30

16

16

Achieved under

the MTSP-II.

1 Please indicate whether the indicator is a Core Sector Indicator (for additional guidance – please see http://coreindicators).

2 UOM = Unit of Measurement.

3 For new indicators introduced as part of the additional financing, the progress to date column is used to reflect the baseline value.

4 Target values should be entered for the years data will be available, not necessarily annually. Target values should normally be cumulative. If targets

refer to annual values, please indicate this in the indicator name and in the “Comments” column.

16

4. Roads in good and fair

condition as a share of total

classified roads

% 48 70 70.5 71 71 Annual Supervision

report NCU

Mali‟s total

classified road

network is 89,024

km.

Beneficiaries5

5. Direct project beneficiaries

Number Not

defined

0 2,682,000

End of project End of project

report NCU

This new

indicator will be

measured only at

the end of the

project.

5a. Original project 0 2,536,000

5b. Additional financing 0 146,000

6. Female 0 49.9%

6a. Original project 0 49.9%

6b. Additional financing 0 50.0%

Intermediate Results and Indicators

Intermediate Results Indicators

Co

re

Unit of

Measur

ement

Baseline

Original

Project

Start

(2008)

Progress

To Date

(2011)

Target Values

Frequency Data Source/

Methodology

Responsibility

for Data

Collection

Comments 2012 2013 2014

Intermediate Result 1: Rural Access Improvement

7. Rural roads rehabilitated

Km 0

45 155 200 295

Annual Supervision

report

NCU

AGEROUTE

7a. Badougou - Bafoulabé road 45 155 155 155

7b. Bandiagara - Douentza road 0 0 45 140

8. Rural road maintained

Km 0

1400 1800 2075 2075

Annual Supervision

report

NCU

AGETIER

8a. Original project 1400 1800 1800 1800

8b. Additional financing 0 0 275 275

9. Number of local infrastructure

constructed/rehabilitated Number 0 0 145 255 365

Annual Supervision

report

NCU

AGEROUTE

AGETIER

9a. Original project 138 237 334

5 All projects are encouraged to identify and measure the number of project beneficiaries. The adoption and reporting on this indicator is required for

investment projects which have an approval date of July 1, 2009 or later (for additional guidance – please see http://coreindicators).

17

9b. Additional financing 7 18 31

10. Number of wharves built Number 0 4 4

Achieved under

the original

project.

Intermediate Result 2: Bamako Urban Transport System Improvement

11. Non-rural roads rehabilitated Km 0 6.3 6.3 Achieved under

the original

project. 12. Travel time for minibuses on

SOTRAMA ring road Minutes

Not

defined 45 25 25 25

Intermediate Result 3: Institutional Strengthening

13. User charges are at least 40%

of the road maintenance financing

needs by 2008, and 70% by 2011.

% 25 786 80 80 80 Annual Road Funds

Report NCU

Already achieved

in 2009, with a

road user

charges‟ share in

the road fund‟s

budget of 78%.

Furthermore, the

resources of the

road fund‟s

budget are

expected to be

entirely

composed for the

first time in 2010

of road user

charges, of which

two-thirds being

derived from the

fuel levy. The

sustainability of

this financing

scheme will be

monitored during

the proposed AF

period.

6 Situation as of December 30, 2009.

18

Annex 2: Operational Risk Assessment Framework (ORAF)

Mali: Second Transport Sector Project – Additional Financing

Project Development Objective(s)

The PDO is to provide access and better transport services to the Recipient‟s rural and urban communities through improvement of

essential rural infrastructure and important Bamako transport infrastructure. The PDO for the proposed AF will remain exactly the

same as the original project.

PDO Level Results

Indicators:

1. Share of rural population with access to an all-season road (aligned with Core Indicator)

2. Average time per km traveled (rural/urban)

3. Rural roads rehabilitated (km)

4. Roads in good and fair condition as a share of total classified roads (percentage)

5. Direct project beneficiaries (total number), of which female (percentage)

Risk Category Risk Rating Risk Description Proposed Mitigation Measures

Project Stakeholder Risks

Low

The commitment of GOM and key

stakeholders for investments in the

rural and urban transport

infrastructure declines.

No specific mitigation measures except

continued successful implementation of

all project components.

Implementing Agency Risks Medium-I

Weakening overall implementing

agency capacity to implement all

aspects of the project.

NCU needs to continue to facilitate all

aspects of project implementation.

Project Risks

Design Risk Low

Complex project design affecting pace

of implementation of project and

proposed AF activities.

Part of the original MTSP-II activities

have already been successfully

implemented which reduces the design

risk since a narrower range of activities

remains to be implemented. Furthermore,

the proposed AF will only focus on a

19

limited set of activities in the rural roads

component that were already included and

appraised under the original project.

Social & Environmental

Risk Medium-L

Possible slow on the ground

implementation of social and

environmental mitigation measures

developed for the MTSP-II and

proposed AF activities.

The ESMF and RPF prepared for the

MTSP-II has guided the preparation of

ESIAs, ESMPs, and RAPs/ARAPs as the

sites and civil works have been finalized.

The AF includes a Cultural Property

Management Plan for the Bandiagara –

Douentza (including the Togo – Tongo

section) rural road segment.

Capacity and institutional arrangements

are already in place to implement the

social and environmental safeguards

mitigation measures for all MTSP-II and

proposed AF civil works. However,

further capacity building will be

undertaken to ensure more comprehensive

monitoring of the on the ground

implementation of social and

environmental safeguard measures.

Program & Donor Risk Low

Unexpected divergence in

development partners priorities in the

transport sector.

Development partners continue to meet on

a regular basis to ensure full alignment

and coherence in transport sector

priorities.

Delivery Quality Risk Medium-I

Higher than expected construction

costs, slow implementation and lower

than expected quality.

Careful review of unit prices used in

design and detailed engineering studies to

ensure realistic cost estimates of works.

Use of existing implementation

arrangements with AGEROUTE and

AGETIER as the „engineer‟ to ensure

proper supervision of civil works

contracts.

20

The Task Team will review in detail all

bidding documents and bid evaluation

reports in order to ensure that the lowest

evaluated responsive bidders are selected

by GOM.

Overall Risk Rating at

Preparation

Overall Risk Rating During

Implementation Comments

Medium-I Medium-I

The MTSP-II has been under implementation for over three years, and

despite a funding gap, its implementation so far has been broadly

successful. The proposed AF is expected to primarily fund activities that

could not be funded under the MTSP-II due to cost overruns and to scale

up activities that have been successfully implemented. All these activities

are part of the rural roads component (Component A).

21

Annex 3: Procurement Arrangements

Mali: Second Transport Sector Project - Additional Financing

A. General

1. Procurement for the proposed project would be carried out in accordance with the World

Bank‟s "Guidelines: Procurement of Goods, Works and Non-consulting Services Under IBRD

Loans and IDA Credits and Grants by World Bank Borrowers" dated January 2011; and

"Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and

Grants by World Bank Borrowers" dated January 2011, 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 Credit, 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 at least annually or as required to reflect the actual

project implementation.

2. Advertisement. The Borrower will prepare and submit to the Bank a General

Procurement Notice (GPN) which will be in addition to the GPN of the MTSP-II. The Borrower

will publish this additional GPN in United Nations Development Business (UNDB) online and in

local newspapers of wide national circulation. A Specific Procurement Notice (SPN) for all

goods (if any) and works to be procured under International Competitive Bidding (ICB) and

Requests for Expressions of Interest for all consulting services costing the equivalent of

US$200,000 and above will be published in UNDB and in the national press with wide

circulation, in addition to other media with wide circulation. All other specific procurement

notices and other requests for expressions of interest shall be published in the national press with

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

3. As in the case of the MTSP-II, for the proposed AF, the existing arrangements in which

the management of road works contract is delegated to AGETIER will remain in place.

AGEROUTE will be in charge of the road section Bandiagara-Douentza (including the Togo-

Tongo section), and AGETIER will handle the rural roads sections in the cotton production areas

of OHVN and CMDT. In addition, the NCU will be in charge of the overall procurement quality

control and the procurement operations for the socio-economic infrastructure associated to the

rural roads sections in the cotton production areas.

4. The proposed AF will build on the experience accumulated with the implementation of

the MTSP-II, as well as that of other transport sector projects, such as the Transport Corridors

Improvement Project (TCIP) and the WATTFP, to ensure that AGEROUTE and AGETIER play

their full intended role as the GOM‟s technical advisors and engineer in charge.

22

5. An assessment of the capacity of the implementing agencies to implement the

procurement activities linked to the proposed AF was carried out during March 2011. The

assessment reviewed the organizational structure for implementing the project and the interaction

between the project‟s staff responsible for procurement and the ministry‟s relevant central unit

for administration and finance. The key issues and risks concerning procurement for

implementation of the project have been identified and include the following points that were

pointed out during the assessment of the MTSP-II:

Inadequate communication between the technical structures in MET and the

delegated contract management agencies (AGEROUTE/AGETIER) has led to delays

in the update of technical specification and poor cost estimation.

Interaction between the implementing units and the MET‟s relevant central unit for

administration and finance, which may cause delays and possible political

interference; although it was not a major issue for the MTSP-II for the proposed AF

continued vigilance is required.

6. The proposed corrective measures which have been agreed are:

Strengthening the flow of communications to improve interaction, between the

technical structures, the procurement agencies, the NCU and the ministry‟s relevant

central unit for administration and finance, in their respective responsibilities;

turnover of staff should be minimized and any turnover which if necessary should be

properly managed to ensure continuity; and

All interactions related to the procurement responsibility must be consistent with the

institutional arrangements agreed on with the Borrower. In particular, all procurement

documents prepared by any execution agency will be reviewed by the Procurement

Officer based within the NCU, and transmitted for review to: (a) the National

Authorities in charge of such review; and (b) to the World Bank for contracts subject

to prior review.

7. The overall project risk for procurement under this additional financing is Moderate.

C. Procurement Plan

8. The Borrower‟s Procurement Plan will provide the basis for the procurement methods

that will be used under the proposed AF. The Procurement Plan for the proposed AF has been

reviewed and cleared by the Bank in April 2011, and will be available at the office of the UNC,

AGEROUTE and AGETIER. It will also be available in the project‟s database and in the World

Bank‟s external website. The Procurement Plan will be updated in agreement with the project

team annually or as required to reflect the actual project implementation needs and

improvements in institutional capacity. All subsequent updates will be disclosed once they are

approved by the World Bank.

23

D. Frequency of Procurement Supervision

9. In addition to the prior review supervision to be carried out from World Bank offices, the

capacity assessment of the Implementing Agency has recommended one supervision mission per

year to visit the field and to carry out post review of procurement actions.

E. Details of the procurement arrangements involving international competition

bidding

Table 1: Thresholds for Procurement Methods and Prior Review

Expenditure Contract Value Procurement Contract Subject to

Category (Threshold) Method Prior Review

1. Works ≥ US$5,000,000 ICB All

< US$5,000,000 NCB The first contract

< US$100,000 Shopping/Price Comparison All contracts with a cost estimate above

US$50,000

No threshold Direct Contracting All

2. Goods ≥ US$500,000 ICB All

< US$500,000 NCB The first contract

< US$50,000 Shopping All contracts with a cost estimate above

US$50,000

No threshold Single Source Selection All

3. Consultants

3.1 Firms No threshold QCBS; LCS; FBS; QBS - All contracts with a cost estimate equal or

above US$200,000; and

- The first contract below US$200, 000

< US$100,000 CQS The first contract and all short-lists under

CQS

3.2 Individuals No threshold Selection of Individual

Consultants (Comparison of

at least 3 CVs)

- All contract with a cost estimate equal or

above US$100,000;

- The first contract below US$100,000; and

- All short-lists for individual Consultants

Selection

No threshold Single Source Selection All

(Firms & Individuals)

All TORs regardless of the value of the contract and the selection method, are subject to prior review

24

Table 2: Summary of Proposed Procurement Arrangements

Project Components Procurement Method

(Amounts in US$ thousands, excluding counterpart funds)

International National Other Total

Competitive Competitive Methods

Bidding Bidding

Component A (Rural Access

Improvement) 17,053 4,631 1,316 23,000

Component B (Bamako Urban

Transport System Improvement) - - - -

Component C (Institutional

Strengthening and Project

Management)

- - - -

Total 17,053 4,631 1,316 23,000

25

Table 3: Procurement Plan

(Civil Works) 1 2 3 4 5 6 7 8 9

Ref.

No.

Contract Description Estimated

Cost (in

US$

thousands)

Proc.

Method

Prequal.

(yes/no)

Dom.

Prefe-

rence

(yes/no)

Review

by Bank

(Prior /

Post)

Expected

bid-

opening

Date

Comments

I. AGEROUTE

01 Rehabilitation works on

Bandiagara-Douentza rural

road including the Togo-

Tongo section

17, 053 ICB No No Prior

Review

Oct 31,

2011

Contract

signing

excepted

on Dec 16,

2011

Total AGEROUTE 17,053

II. Implementation Agency for Infrastructure Projects and Rural Equipment (AGETIER)

01 Periodic maintenance of rural

roads in the OHVN area (120

km) and realization of

economic and social

Infrastructure along the roads

2,021 NCB No NA Prior

Review

Sept 13,

2012

Contract

signing

expected

on Oct 30,

2012

02 Periodic maintenance works

of rural roads in CMDT area

(155 km) and realization of

economic and social

Infrastructure along the roads

2,610 NCB No NA Post

Review

Sept 23,

2012

Contract

signing

expected

on Nov 12,

2012

Total Works (AGETIER) 4,631

Overall Total Work 21,684

26

Table 4: Procurement Plan

(Consultancy Assignments with Selection Methods and Time Schedule) 1 2 3 4 5 6 7

Ref.

No.

Description of Assignment

Estimated

Cost

(US$

thousand)

Sélection

Method

Review

by Bank

(Prior/

Post)

Expected

Proposal

Submission

Date

Comments

I. AGEROUTE

01 Monitoring and Control of

construction works on Bandiagara

Douentza road and a section of the

Togo Tongo Motorway

853 QCBS Prior

Review

Sept 14,

2011

Contract

signing

expected

on Dec15,

2011

Total Consultants Services

(AGEROUTE) 853

II. AGETIER

01 Study, monitoring and control of

periodic maintenance works of rural

roads in OHVN area (120 km) and

realization of economic and social

infrastructure along the roads

202 QCBS

Prior

Review

Dec 2,2011

Contract

signing

expected

on March

8, 2012

Study, monitoring and control of

periodic maintenance works of rural

roads in the les CMDT area (155 km)

and realization of economic and social

infrastructure along the roads

261 QCBS Prior

Review Dec 11, 2012

Contract

signing

expected

on March

17, 2012

Total Consultants Services

(AGETIER) 463

Overall Total Consultants 1,316

27

Annex 4: Financial Management and Disbursement

Mali: Second Transport Sector Project - Additional Financing

Financing Management Arrangements

1. Financial Management (FM) implementation framework for the proposed AF. Overall

implementation of the proposed AF will be coordinated and supervised by the already existing

and fully operational NCU for the MTSP-II. The NCU coordinator will oversee the financial

management aspects of the project including the preparation of the financial statements,

providing quarterly Interim Financial Reports, monitoring financial transactions on the project‟s

accounts and making the necessary arrangements for the annual financial audit of the proposed

AF.

2. Budgeting arrangements. The budgeting process is clearly defined in the FM Manual

and the budget will be adopted before the beginning of the year and monitored through the

accounting software. The project consolidated budget will be submitted to the IDA‟s objection.

3. Accounting policies and procedures. The additional financing accounts will follow the

same accounting policies that of the current project in line with the Organization for

Harmonization of Business Law in Africa (OHADA) accounting standards. Project accounts will

be maintained on an accurate basis, supported with appropriate records and procedures to track

commitments and to safeguard assets. Annual financial statements will be prepared by the NCU

by using the existing accounting software being used for the MTSP-II.

4. Internal controls and internal audit. The NCU has already in place a manual of

accounting administrative and financial procedures for the MTSP-II. The manual ensures

adequate internal controls are in place for the preparation, approval and recording of transactions

as well as segregation of duties. The internal audit function is also in place and functioning well.

There is a good follow up of internal audit recommendations. 5. Reporting and monitoring. The Interim Financial Reports (IFRs) are expected to be

prepared on a quarterly basis. The IFR content will be the same as the current one elaborated

under the MTSP-II. It will include, among others, sources and uses of funds by project

expenditures classification and a comparison of budgeted and actual project expenditures

(commitment and disbursement) to date and for the quarter. The NCU will submit copies of the

IFRs to the Bank within 45 days following the end of the calendar quarter.

6. Funds flow. A designated account will be located in a commercial bank and managed by

the NCU. The Designated Account will be managed according to the disbursement procedures

described in the Administrative, Accounting and Financial Manual and Disbursement Letter.

7. External audit arrangements. The Financial Agreement will require the submission of

Audited Financial Statements for the NCU to IDA within six months after year-end. The external

auditor that has been recruited for the MTSP-II will also conduct from the year 2011 the

28

financial audit for the proposed AF activities. A single opinion on the Audited Project Financial

Statements in compliance with International Standards on Auditing (ISA) will be required.

8. FM arrangement prior to effectiveness. Adequate FM arrangements are already in place

for the proposed AF.

9. Other mitigation measures. In order to maintain and strengthen the control environment

that exists under the MTSP-II the following is required for the proposed AF: (a) include the

proposed AF activities in the scope of the financial audit for the year 2011; (b) recruit a technical

auditor; and (c) update the FM and administrative procedures manual to take into account the

proposed AF activities

10. Supervision and monitoring. Supervision activities will be performed following the

same periodicity as for MTSP-II.

Disbursement Arrangements

11. Report-based disbursements arrangements remain the same for the proposed AF. All

supporting documents will be provided for all transactions submitted to Bank prior review. The

others will be retained at the NCU and must be made available for periodic review by Bank‟s

missions and external auditors.

Table 1: Credit Proceeds Allocation Table

Category Amount of the Financing

Allocated (expressed in US$)

Percentage of Expenditures to be

Financed (excluding taxes)

(1) Goods, works, non consulting

services and consultants services for

the Project

23,000,000 100%

TOTAL AMOUNT 23,000,000 100%