Language : English Original : French

PROJECT : GITEGA-NYANGUNGU-NGOZI ROAD DEVELOPMENT

AND ASPHALTING PHASE I: NYANGUNGU-NGOZI SECTION

COUNTRY : BURUNDI

PROJECT APPRAISAL REPORT

Date: July 2010

Appraisal Team

Team Leader:

Team Members:

P. MORE NDONG, Transport Engineer OICT.2 Ext. 2284

A.I. MOHAMED, Principal Transport Economist OITC.2 Ext. 2774 M.LEKE, Socio-economist, (Consultant) OITC.2 O.S.A BAH, Environmentalist, (Consultant) OITC.2 B. NTUNDA, Public Health Specialist, (Consultant) OITC.2

Regional Director: Mrs. D. GAYE OREA Ext. 2064

Sector Director: Mr. G. MBESHERUBUSA OICT Ext. 2034

Sector Manager: Mr. J. RWAMABUGA OICT.2 Ext. 2181

Peer Reviewers

A. KARANGA, Transport Economist OICT.1 Ext. 2607 M. MBODJ, Transport Economist OICT.1 Ext.2348 N. NDOUNDO, Energy ONEC.1 Ext.2725 P. RUGUMIRE, Transport Engineer OICT.1 Ext.3803

AFRICAN DEVELOPMENT FUND

TABLE OF CONTENTS

I. STRATEGIC THRUST AND RATIONALE ........................................................................................ 1

1.1 Project Linkages with Country Strategy and Objectives ............................................................... 1 1.2 Rationale for Bank Involvement ................................................................................................... 2 1.3 Donor Coordination ....................................................................................................................... 2

II. PROJECT DESCRIPTION ............................................................................................................... 3 2.1 Project Components ...................................................................................................................... 3 2.2 Technical Solutions Retained and Other Alternatives Explored ................................................... 4 2.3 Project Type .................................................................................................................................. 4 2.4 Project Cost and Financing ............................................................................................................ 4 2.5 Project Area and Beneficiaries ...................................................................................................... 6 2.6 Participatory Process for Project Identification, Design and Implementation .............................. 7 2.7 Bank Group Experience and Lessons in Project Design ............................................................... 7 2.8 Key Performance Indicators .......................................................................................................... 7

III. PROJECT FEASIBILITY ................................................................................................................. 8 3.1 Economic and Financial Performance ........................................................................................... 8 3.2 Environmental and Social Impact ................................................................................................. 8

IV. PROJECT IMPLEMENTATION AND MONITORING/EVALUATION .................................... 12 4.1 Implementation Arrangements .................................................................................................... 12 4.2 Monitoring/Evaluation ................................................................................................................ 14 4.3 Governance .................................................................................................................................. 14 4.4 Sustainability ............................................................................................................................... 15 4.5 Project Management .................................................................................................................... 16 4.6 Knowledge Building .................................................................................................................... 16

V. LEGAL FRAMEWORK ................................................................................................................. 16 5.1 Financing Instrument ................................................................................................................... 16 5.2 Conditions Associated with ADF Intervention ........................................................................... 16 5.3 Compliance with Bank Policies................................................................................................... 17

VI. CONCLUSIONS AND RECOMMENDATIONS .......................................................................... 17 6.1 Conclusions ................................................................................................................................. 17 6.2 Recommendations ....................................................................................................................... 17

Major Related Projects Financed by the Bank Group and Other Development Partners in Burundi 1

i

CURRENCY EQUIVALENTS

[July 2010]

UA 1 = BIF 1813.57

UA 1 = EUR 1.20520

EUROS UA 1 = USD 1.47890

FISCAL YEAR

1 July - 30 June

WEIGHTS AND MEASURES

1 kilogramme (kg) = 2.200 pounds (lbs)

1 metre (m) = 3.28 feet (ft)

1 kilometre (km) = 0.621 mile

1 square kilometre (km2) = 0.3861 sq mile

1 hectare (ha) = 2.471 acres

ACRONYMS AND ABBREVIATIONS

AADT Average Annual Daily Traffic

ABEDA Arab Bank for Economic Development in Africa

ADF African Development Fund

BIF Burundian Franc

EAC East Africa Community

EDF European Development Fund

EIRR Economic Internal Rate of Return

HDM Highway Design and Maintenance Model

IDA International Development Association

MF Ministry of Finance

MTPE Ministry of Public Works and Equipment

NEPAD New Partnership for Africa’s Development

NPV Net Present Value

NRF National Road Fund

ODR Roads Authority (Burundi)

PIA Project Impact Area

PAP Priority Action Programme

PDSR Road Sector Development Project (Burundi)

PIMU Project Implementation Monitoring Unit

PRGSF Poverty Reduction and Growth Strategy Framework

STAP Short Term Acton Plan on Infrastructures (NEPAD)

Veh/d Vehicles Per Day

ii

LIST OF ANNEXES

No. of

No. TITLE Pages

Appendices

I. Comparative Socio-economic Indicators of Burundi 1

II. Table of Bank Portfolio in Burundi 1

III. Major Related Projects Financed by the Bank Group and Other

Development Partners in Burundi 1

IV. Road Network Map of Project Area 1

LIST OF TABLES

No. TITLE Page

Table 2.1: Summary of Project Components………………… 3

Table 2.2: Technical Solutions Retained and Alternatives Explored 4

Table 2.3: Summary of Project Cost Estimates by Component …………………….……... 5

Table 2.4: Summary of Project Cost Estimates by Expenditure Category ……………… 5

Table 2.5: Project Source of Financing………… 6

Table 2.6: Schedule of Expenditure by Source of Financing……………………………… 6

Table 3.1: Summary of Economic Analysis…… 8

Table 4.1: Monitoring/Evaluation Schedule… 15

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1. Client Information

COUNTRY : Burundi

PROJECT NAME : Gitega-Nyangungu-Ngozi Road Development and

Asphalting Phase 1: Nyangungu-Ngozi Section

LOCATION Gitega, Ngozi, Kanyaza and Karuzi Provinces

DONEE : Republic of Burundi

EXECUTING AGENCIES : Ministry of Infrastructure and Public Works (METP) /

Roads Authority / Road Projects Implementation

Monitoring Unit (PIMU); B.P. 1860 BUJUMBURA,

(Burundi), Fax: (257) 25 36 95; Telephone: (257) 22 29 40

/ 22 09 59; E-mail: odr@usan-u.net .

2. Financing Plan

Source

Amount net-of-taxes (in

UA Million) Instrument

ADF Grant (from “Fragile States Facility” FSF

Pillar I) 24.1

Grant (project)

GOVERNMENT 0.155

Capital Budget (Counterpart

Fund)

TOTAL 24.255

3. ADF Grant Key Financing Information

Grant Currency Unit of Account (UA)

Interest Type N/A

Interest Rate Spread N/A

Service Fee N/A

Commitment Fee N/A

Other Fees N/A

Loan Tenor N/A

Grace Period N/A

FIRR, NPV (baseline scenario) N/A (project road is managed by the Administration, its use will not

generate direct operating income)

EIRR, NPV (baseline scenario) 14.9% and USD 3.5 Million

4. Timeframe – Main Milestones (Expected)

Activities (Month, Year)

Concept Note Approval July 2010

Project Approval September 2010

Signing of Grant Protocol of Agreement / Effectiveness (latest) December 2010

Project Completion October 2012

Last Disbursement of ADF Grant July 2013

iv

BURUNDI: GITEGA-NYANGUNGU-NGOZI ROAD PROJECT PHASE 1

RESULT-BASED LOGICAL FRAMEWORK

HIERARCHY OF OBJECTIVES EXPECTED

RESULTS

REACH PERFORMANCE

INDICATORS

INDICATIVE TARGETS

AND TIMEFRAMES ASSUMPTIONS /RISKS

Goal (Overall objective to which project must contribute)

Contribute to opening up rural areas and increasing sub-regional trade

Impacts (Long-term result(s) or logical

consequence of

project impacts)

(i) Opening up of rural

areas; (ii) sub-regional trade facilitated and

enhanced

Beneficiaries (Population

reaping benefit

directly and indirectly from

project)

Burundi

Impact Indicators (Evidence of achievement of results –Source

and method)

(i)Length of priority roads

developed;

(ii)growth rate of sub-regional

trade by road

Source: Ministry of Public

Works and Infrastructure

(MTPE), Ministry of Trade; Methods: national economic

and transport statistics

Progress Anticipated in the Long Term

(i).Between 2010 and 2020, the length of the paved

national roads increases

from 1 230km to 1 950 km; (ii) increase in sub-

regional trade by about

10% starting from 2013

Source: MTPE and Ministry

of Trade; Methods: national economic and transport

statistics

Assumption Statement (Risk factors and critical conditions of success Mitigation strategy(s)

Risks: (i) Delay in country’s stabilization process; (ii) lack of mobilization of financing and necessary reforms for financing sector

investments

Mitigative measures: (i) country reconciliation and the security policy

initiated in recent years as well as the ongoing democratization process

are likely to strengthen peace and stability in the country; and (ii) the return of donors since 2004 would likely speed up and attract the

necessary funding, given the expected political stability.

v

Project Purpose (Changes pursued or expected through project implementation)

Facilitate the movement of people and goods along the Gitega-Nyangungu-Ngozi

Road and improve the population’s access

to basic services.

Outcomes (medium-term results, i.e.

logical consequence

of project outputs) (i) Movement of

people and goods on

the Gitega- Nyangungu-Ngozi

road improved; (ii)

improved access to communities within

the project area

Beneficiaries (target group(s)-

benefiting from

project outcomes) Burundi

Outcome Indicators (Target group(s) benefiting from

project outputs)

1.(i) average traffic speed

between Gitega and

Ngozi; and (ii) general reduction of transportation

costs on the Gitega-Ngozi

road

2.Number of persons located at

less than 2 km of walking distance from an all-season

motorable road

Source: MTPE

Methods: national statistics,

socio-economic surveys

Progress anticipated in the medium term

By 2014: (i) average traffic speed between Gitega and

Ngozi increases from

20km/h in 2010 to 60 km/h; (ii) vehicle operating costs

decreases by an average of

25% over the life span of the road, and average travel time

on the road reduces from 4

hours in 2010 to 1 hour 30 minutes by 2014

2. The population of the

project area located at less than 2 km of walking

distance from an all-season

motorable increases from 15% in 2010 to 60% in 2014

Sources :(MTPE); Method: national statistics

Assumption Statement ( Risk factors and critical conditions of success

Mitigation strategy(s))

Risks (i) Lack of road maintenance due to insufficient resources; and (ii)

weak capacity of local SMEs to undertake maintenance works

Mitigative measures: (i) Mobilization of supplementary sources such as

tolls to replenish the already established Road Fund; and (ii) financing

of a diagnostic study on Burundi’s road construction industry leading to a support project on the training of SMEs and a reform of the road

maintenance works contracting method.

vi

Inputs and Activities (financial and human

resources for carrying out activities for the

production of an output)

1. (i) Nyangungu-Ngozi road section development

and asphalting; (ii) control and supervision of road works of the said section; (iii) raising the

awareness of the population on environmental

protection, STIs, including HIV//AIDS and road safety on the entire Gitega -Nyangungu -

Ngozi road (cost, net of taxes and customs duty

= UA 21.347M)

2. Construction of related facilities and amenities, including control and supervision of such

facilities (cost, net of taxes and customs duty =

UA 2.651 M)

3. Annual auditing of project and

monitoring/evaluation of project impacts; support to project management (cost, net of

taxes and customs duty = UA 0.257 M)

PROJECT COST, net of taxes and customs duty, including physical contingencies and price

escalation = UA 24.255 M

Outputs (Short-

term results)

1. Nyangungu-

Ngozi road

paved

2- Connecting

feeder roads developed;

health education

centres along the road

provided with sanitation

facilities/protect

ed

3. Population in

within the PIA sensitized on

road safety,

environmental protection and

STIs, including

HIV-AIDS

4- Temporary

employment created through

works execution

Beneficiaries

(target

group(s)-benefiting from

project outputs)

PIA : Gitega,

Ngozi, Karuzi

and Kayanza Provinces)

about 775,000

inhabitants

Output Indicators (evidence

showing that outputs have been

achieved -Source and method)

1. (i) Length of paved road;

and (ii) number of persons sensitized about road

safety, environmental

protection and STI-AIDS

2. Length of feeder roads and

number of socio-economic infrastructure

developed/protected

3.Number of jobs created

through execution of works

4. (i) Number of audit reports

produced and validated; and (ii)project impact

monitoring/evaluation

reports produced and validated

Source: MTPE Methods: reports from central

and decentralized departments

Progress anticipated in the

short term

1 – (i) 30 km of paved road

between Nyangungu and

Ngozi; and (ii) about 100,000 persons sensitized

2. (i) 80 km of connecting feeder roads developed; (ii)

Rehabilitation of 2 markets

(Nyangungu and Gitaramuka); and (iii) 2

health centres - in Busarira and Mubuga – and 5

schools (Busarira, Gitamo,

Ruhororo, Mugomera and Mubuga) fenced,, provided

with washrooms and

latrines as well as drinking water standpipes; (iv) 10

rice hullers operational and

farm implements supplied to women’s associations;

3. 500 temporary jobs created, including 300

local workers employed

4. (i) 3 project accounts audit

reports produced; and (ii) 3

project impact monitoring evaluation reports

produced.

Source : MTPE; Methods: Quarterly progress

reports and project final

activity report

Assumption Statement ( Risk factors and critical conditions of

success

Mitigation strategy(s)

Risks: (i) Financing gap due to weak competition; (ii) lack of

security in the area during the works implementation phase; and (iii) capacity of the executing agency

Mitigative measures: (i) inclusion of this factor in the project cost (provision for price escalation), drawing from the experience

of ongoing projects, and use of Advanced Action on Procurement

which will likely win the participation of contractors currently undertaking works in Burundi and Rwanda in the competitive

bidding process; and (ii) as with other projects currently financed by the Bank, the Authorities will dispatch security forces to the

area in order to bolster security; and (iii) capacity building with

technical assistance, training and computer hardware provided under ongoing projects financed by the Bank.

vii

Project Implementation Schedule

viii

EXECUTIVE SUMMARY

Project Overview

1. To implement its economic development and poverty reduction strategy, Burundi has

defined a programme for improving the road network that supports the productive sectors. The

Gitega-Nyangungu-Ngozi earth road, the subject of this project, falls under the said programme.

This classified road, which forms part of Burundi’s primary network, connects the country’s

second and third largest cities and constitutes a key link in the development of trade between the

north and south. The location of Ngozi near the border is also an asset for trade with Rwanda.

The service level of various road sections varies significantly (from average to seriously

degraded). In view of the financial resources available, the Bank and the Government have

agreed to implement the works in phases. The first phase concerns the Nyangungu-Ngozi Section

which is the most degraded portion and whose year-round accessibility is not assured. The

project comprises: (A) the development and asphalting of the Ngozi-Nyangungu Section (30 km);

(B) associated structures, including the rehabilitation of 80 km of feeder roads, the development

of socio-economic and market amenities; and (C) support to project management and monitoring.

The implementation of project activities will run from September 2010 to July 2013. The total

project cost, excluding taxes and customs duty, is estimated at UA 24.255 million.

2. The Project Impact Area (PIA) has an estimated population of 775,000 inhabitants,

representing 10% of the country’s total population. The PIA also has a population density of

nearly 450 inhabitants/km² - which outstrips by almost half the already high average national

density (310 inhab./km²). This project is expected to contribute to the development of trade

between the north and south of the country, as well as with neighbouring Rwanda. Specifically,

the project aims to facilitate the movement of people and goods along the Gitega-Nyangungu-

Ngozi Road and improve the living conditions of the communities within the PIA.

Needs Assessment

3. Investment needs under this project result from the current difficult traffic situation on

the road which serves a large population. Given the state of the road, it is necessary to adapt it to

meet demand needs in order to guarantee quality service. The project design is based on the

update of the detailed studies conducted in 2009, which also recommended the need to undertake

the proposed investments. In addition to its contribution to opening up the regions along the road

and sub-regional trade, project implementation will have a significant reducer effect on poverty

(very high in Burundi at 70%). Indeed, it will improve the service level of the road while

ensuring access by the population to the farm production areas within the PIA and marketing of

such production on provincial and district supply markets.

Bank Value Added

4. Infrastructure development is one of the objectives under the Government’s Poverty

Reduction Strategy. With this project, the Bank will contribute to implementing the country’s

Priority Investment Programme and attaining the infrastructure development objective. The

project will contribute to implementing the Infrastructure Action Plan funded by the Bank and

strengthen the execution of the two previous operations that the Institution is financing in the

same sector.

ix

Knowledge Management

5. The project design drew on the achievements of similar road projects. Technical skills

obtained by the Implementation Unit (notably in procurement and management procedures) in

previous and ongoing road projects financed by the Bank and other donors will be put to good

use when implementing this project. The project monitoring/evaluation mechanism will also help

to build knowledge that will be used to design future projects.

REPORT AND RECOMMENDATION OF ADB GROUP MANAGEMENT TO THE BOARD

OF DIRECTORS CONCERNING A GRANT TO THE REPUBLIC OF BURUNDI

FOR THE GITEGA-NYANGUNGU-NGOZI ROAD PROJECT PHASE 1

Management submits the following report and recommendation for the award of a

UA 24.10 million grant to the Republic of Burundi to contribute to financing the Gitega-

Nyangungu-Ngozi Road Project Phase I: Nyangungu-Ngozi Section.

I. STRATEGIC THRUST AND RATIONALE

1.1 Project Linkages with Country Strategy and Objectives

1.1.1 The Poverty Reduction Strategy Framework (PRSF) (2007-2010) constitutes the

reference document of cooperation with development partners. It entails four (4) strategic

thrusts: (i) improving governance and security; (ii) promoting sustainable and equitable

economic growth, notably through infrastructure development in support of production; (iii)

human capital development; and (iv) the fight against HIV-AIDS. In 2006, the Government

adopted a Priority Action Programme (PAP) for the same period to make the PRSF more

operational and better measure the impact of poverty reduction actions. The Bank’s assistance

strategy for the 2008-2011 period is mainly geared towards strengthening good governance

and infrastructure development.

1.1.2 As part of implementing this strategy, Burundi has defined a programme to improve

its road network, which provides support to the productive sectors. The development and

asphalting of the Gitega-Nyangungu-Ngozi National Road that forms part of the classified

network, is included in the programme. It connects the country’s second and third cities and

constitutes a key link for the development of trade between the north and the south. The

location of Ngozi close to the border is also an asset for the development of trade with

Rwanda.

1.1.3 Covering 80 km, the service level on the project road varies significantly. The project

has been divided into the following three lots based on the road sections: (i) Lot 1: Kitega-

Bugendana section (25 km) currently in fair condition; (ii) Lot 2: Bugendana-Yangungu

section (25 km) currently in average condition; and (iii) Lot 3: Yangungu-Ngozi section (30

km) currently in an advanced state of degradation. In view of the available financial

resources, the Bank and the Government have agreed to implement the works in phases. The

first phase of the project relates to the Nyangungu-Ngozi section which is the most degraded

and whose year-round access cannot be guaranteed. The project is consistent with the

objectives pursued by Burundi’s Poverty Reduction Strategy, the Bank’s Intervention Strategy

and the Country Strategy Paper (CSP) for the 2008-2011 period (Pillar 2), as well as the

Infrastructure Action Plan for Burundi financed by the Bank. This plan proposes an integrated

framework for assessing the country’s infrastructure and investments needs and their

attendant maintenance costs, in addition to the human and institutional capacity required to

design such a programme and ensure its successful implementation. It puts forward, for the

benefit of the Government, the donor community and the private sector, a detailed assessment

of infrastructure investment opportunities available in the country and the region. It defines an

action plan for harnessing these opportunities and, consequently, makes up for the lack of

master plans for managing the expansion of the electricity, transport and communications

sectors. In the road sector, the plan aims to rehabilitate and pave the national road network (1

950 km) by 2020.

2

1.2 Rationale for Bank Involvement

1.2.1 A landlocked country located far from sea ports, Burundi underwent a period of

political instability that resulted in the deterioration of its infrastructure and maintenance

backlog. This situation constitutes a major drawback for opening up the country whose

population density (305 inhabitants/km) is among the highest in the world. The road project is

in line with the priorities set out in the country’s Poverty Reduction Strategy Paper (PRSP).

The PRSP underscores road infrastructure development as a contribution to opening up the

rural areas and improving access to basic social services and regional integration. The Bank’s

involvement in the project is part of financial assistance towards implementing the Priority

Road Network Improvement Programme to support the productive sectors by ensuring

continuous traffic flow. Specifically, the Bank’s involvement is also in pursuit of its support

for the rehabilitation of this road network.

1.2.2 Road transport in Burundi constitutes the main means of transporting people and

goods, and spans the breadth of the agricultural and industrial production spectrum (i.e.

upstream and downstream). An estimated 90% of domestic passenger and goods transport is

by road. This makes it the dominant mode of transport.

1.2.3 In Burundi, the promotion of economic growth for poverty reduction will be

achieved mainly through rural and agricultural development. Indeed, the share of the primary

sector ranges between 50 and 55 % of GDP, depending on the year. Sector programmes

cannot be successfully implemented without the existence of road infrastructure to move

people and goods. This is particularly so with regard to the supply of agricultural inputs to the

rural world and the haulage of agricultural production to consumption centres.

1.3 Donor Coordination

Sector Importance

in % of GDP in % of Exports in % of Labour

Years 2001-2006 2005-2009 2005-2009

Burundi Transport and

Communications Sector 4.1 N/A N/A

Stakeholders – Annual Public Expenditures of the Transport Sector in BURUNDI

(Averages in BIF Million)

Donors (ADF, IDA, EDF, China,

Arab Fund etc.)

Year Total Gov.

2000 to 2003

In BIF M 2490 1360 1130

In % 100% 55% 45%

2004

In BIF M 4040 670 3370

In % 100% 17% 83%

2005 In BIF M 4650 750 3900

In % 100% 16% 84%

2006

In BIF M 5330 560 4770

In % 100% 11% 89%

Level of aid coordination in Burundi

Existence of Thematic Working Groups

Existence of a General Sector Programme

ADB’s role in aid coordination

Yes

Yes

Member

3

Aid coordination in Burundi is the responsibility of a National Aid Coordination Unit, chaired

by the second Vice-President. The various development partners and the Government

maintain constant dialogue. The Bank is a stakeholder in this endeavour and shares

information within that framework. Within the context of road projects, this dialogue has

allowed for the establishment of synergy in co-financing and complementarity. With specific

regard to the project under consideration, consultations were held between the Bank and the

major road sub-sector donors (the World Bank and the European Union). These donors all

emphasized the strong complementarity of actions proposed by the Bank and expressed their

support to the project. Lastly, during the project implementation phase, meetings coordinated

by the METP will be held with these development partners.

II. PROJECT DESCRIPTION

2.1 Project Components

The project components are summarized in Table 2.1 below:

Table 2.1

Summary of Project Components

NO. Component

Estimated Cost (net of taxes

and customs duty) (UA

Million) Description of Components

A Road Works 21.347

A.1 Development and asphalting of the Nyangungu –

Ngozi Section: ADF Financing

A.2 (i) Works control and supervision. (ii) sensitization

of the project impact area population on: road

safety, environmental protection and control of

sexually transmitted infections (STIs) including

HIV/AIDS: ADF Financing

B Associated Developments 2.651

B.1 (i) Rehabilitation of 80 km of connecting feeder

roads; (ii) protection/provision of sanitation

facilities to 8 social amenities (surrounding

education and health centres); (iii) development of

two rural markets; (iv) construction of footbridges;

and (iv) support to women’s groups through the

supply of rice hulling machines and farm

implements: ADF Financing

B.2 Control and supervision of associated works: ADF

Financing

C

Support to Project

Management and

Monitoring

0.257

C.1 Auditing of project accounts: ADF financing

C.2 Project monitoring/evaluation: ADF financing

C.3 Operation of the Project Implementation Monitoring

Unit (PIMU): Financing: Government

4

2.2 Technical Solutions Retained and Other Alternatives Explored

2.2.1 The engineering/economic feasibility studies and the preliminary designs were

examined to ensure the viability of the works to be carried out. The technical design is in line

with recognized international standards. Overall, the geometric trace of the current road has

been preserved, albeit improved at specific points to bring it in line with safety standards in

light of the mountainous nature of the project area. The solution retained will consist of a

roadbed for the development of a 6 metre-wide running strip and two shoulders of 1.25 metres

each.

2.2.2 Based on the class of traffic and type of supporting soil of the road indicated in the

engineering studies, the structure of the road will consist of: (i) an average 30 centimetre-thick

lateritic gravel sub-grade; (ii) a 15 centimetre-thick road base also in lateritic gravel; and (iii)

surfacing of the entire road with a 5 centimetre-thick bituminous concrete (BC) layer. This

road structure takes into account the nature of the various structures of the supporting soil.

The shoulders will entail a single layer surface dressing.

2.2.3 The alternative technical solutions explored and the reasons for their rejection are

summarized in Table 2.2 below.

Table 2.2

Technical Solutions Explored and Rejected

Alternatives Brief Description Reason for Rejection

Solution 1:

The road base is

composed of crushed

gravel.

This is not very different from the one

retained, except that the road base will

consist of crushed gravel instead of

lateritic gravel.

High cost essentially due to the

preparation and transportation of

the materials over a long

distance.

Solution 2:

The road base is

composed of coarse

aggregate bitumen.

This solution differs from the one

retained. The road base will consist of

aggregate bitumen instead of lateritic

gravel.

Very high cost due to the

preparation and transportation of

the materials over a long

distance, and the cost of bitumen.

2.3 Project Type

Burundi is eligible solely for ADF grants. The financing instrument used for this project is the

“Project Grant” type. Indeed, there is no budgetary support mechanism in Burundi for

transport infrastructure projects.

2.4 Project Cost and Financing

Cost Estimate

2.4.1 Phase 1 of the project is estimated to cost UA 24.255 million, net of taxes and

customs duty, of which UA 18.885 million in foreign exchange and UA 5.370 million in local

currency. The estimated cost of compensations for land expropriation not included in the cost

of the project to be borne by the Government amounts to UA 0.034 million. The unit costs of

works were based on: (i) the project design finalized in 2009; (ii) the unit costs stemming

5

from bids received in 2010 for similar road works conducted in the country and financed by

the ADF and other donors; (iii) programming of works procurement scheduled for 2010; and

(iv) execution of works scheduled for the 2011-2012 period. In estimating the costs, account

was taken of the recommendations of the study on increase of the unit cost of road networks

conducted by the Bank, details of which are specified as Annex B: (i) recourse to Advanced

Action on Procurement for the procurement of goods, works and services; (iii) inclusion of

the provision for fluctuations between the UA and the local currency, as well as the

probability of the prices of some inputs escalating. Provision for physical contingencies is

maintained at 10% of the base cost. Provision for price escalation represents 4.37% of the

base cost and the physical contingencies. Details on Phase 1 cost estimates are given in Annex

A1. The costs are summarized in Table 2.3 below:

Table 2.3

Summary of Project Cost Estimate by Component (Phase 1)

Component USD Million UA Million

F.E. L.C Total F.E. L.C. Total

A. Road Works 25.563 6.165 28.728 14.603 3.990 18.593

B. Associated

Developments 2.792 0.776 3.568 1.807 0.502 2.309

C. Project

Management 0.060 0.286 0.346 0.039 0.185 0.224

Base Cost 25.415 7.227 32.642 16.449 4.677 21.127

Physical Contingencies 2.542 0.723 3.264 1.645 0.468 2.113

Price Escalation 1.222 0.347 1.569 0.791 0.225 1.015

Total 29.179 8.297 37.475 18.885 5.370 24.255

2.4.2 The project cost by expenditure category is given as Annex A2 and summarized in

Table 2.4 below: Table 2.4

Summary of Project Cost by Expenditure Category

Expenditure Category

USD Million UA Million

F.E. L.C Total F.E. L.C. Total

A – Goods 0.014 0.089 0.102 0.009 0.057 0.066

B – Works 24.281 6.042 30.323 15.715 3.911 19.626

C – Consultancy Services 1.121 0.887 2.009 0.726 0.574 1.300

D – Miscellaneous - 0.208 0.208 - 0.135 0.135

Base Cost 25.415 7.227 32.642 16.449 4.677 21.127

Physical Contingencies 2.542 0.723 3.264 1.645 0.468 2.113

Price Escalation 1.222 0.347 1.569 0.791 0.225 1.015

Total 29.179 8.297 37.475 18.885 5.370 24.255

Financing Arrangement

2.4.2 The project will be financed by the ADF and the Government. The ADF grant

amounting to UA 24.10 million represents 99.37% of the project cost, excluding taxes and

customs duty. This grant will be used to finance: (i) the entire cost of works of the Yangusi-

Ngonzo section and associated developments; and (ii) the entire cost of services for works

control and supervision, sensitization of the population, monitoring/evaluation of project

impacts and auditing of project accounts. The sources of financing by expenditure category

and the expenditure schedule by component are given as Annexes A3 and A4.

6

2.4.3 Government’s contribution (0.63% of the project cost, net of taxes and customs

duty), will be used to finance the cost of operation of the Project Implementation Monitoring

Unit (PIMU). Burundi is eligible for 100% financing in accordance with the current Bank

policy on expenditure eligible for financing. However, the counterpart funding will essentially

cover the travel expenses and allowances for PIMU staff. These expenditures are not eligible

under this policy. The project sources of financing are presented in Table 2.5 below.

Table 2.5

Source of Financing of Project Components (in UA million) Source of Financing Amount %

ADF 24.100 99.36%

Government 0.155 0.63%

Total 24.255 100.00%

Expenditure Schedule

2.4.4 The expenditure schedule by source of financing is summarized in Table 2.6 below.

The expenditure schedule by project component is given as Annex A4.

Table 2.6

Expenditure Schedule by Source of Financing (UA million)

Source of Finance 2010 2011 2012 2013

ADF 0.019 17.900 6.159 0.022

Government 0.021 0.096 0.038 -

Total 0.040 17.996 6.197 0.022

% 0.2% 74.2% 25.5% 0.1%

2.5 Project Area and Beneficiaries

2.5.1 The direct Project Impact Area (PIA) comprises 10 communes in the Gitega, Ngozi,

Karuzi and Kayanza provinces. The impact area covers a total 1887 km² with an estimated

population of 775,000 representing 10% of Burundi’s total population. The PIA also has a

population density of nearly 450 inhabitants/km² - which outstrips by nearly half the country’s

already high average density (310 inhabitants/km²). In addition, the area hosts Burundi’s

second and third largest cities (Gitega and Ngozi) and constitutes a key national socio-

economic development pole. Indeed, many decentralized administrative structures and a large

number of schools and tertiary institutions are located in Gitega and Ngozi provinces.

2.5.2 The project beneficiaries will be the road users, rural communities (farmers and

stockbreeders) and traders. The results expected by the beneficiaries are an improved

movement of people and goods, reduction of the general transportation cost and improved

access to basic social services. The economy of the PIA essentially comprises agricultural

activities, coffee and beer industries, and trading. Agricultural activities occupy about 90% of

the working population, generating an estimated annual production of 810,000 tonnes

including 45% of marketable surpluses. Tourism constitutes an undeveloped potential that

could be harnessed, thanks to the project

7

2.6 Participatory Process for Project Identification, Design and Implementation

2.6.1 The participatory approach involving the beneficiaries was used at all stages of the

project. It is worth noting that during project preparation and appraisal, contacts, meetings for

information, gathering of the views and concerns of the beneficiaries took place in the project

area, together with regional and local officials, transport professionals, traders, civil society,

women’s organizations and environmental protection organizations. These meetings were

complemented with socio-economic surveys conducted among sector and village heads. The

overall opinion on the project was favourable. Furthermore, these communities requested: (i)

the rehabilitation of feeder roads connecting the main road and providing access to farming

areas and produce markets; (ii) protection/sanitation facilities for education and health centres

along the road (sanitation via the construction of latrines); (iii) development of two rural

markets; and (iv) support to three women’s cooperatives by providing them with rice hulling

machines and farm implements. The choice of associated priority activities was made in

consultation with these communities. Based on the discussions held, feeder roads linking the

main road were chosen in consultation with the stakeholders. The participatory approach will

also be pursued throughout the project implementation phase, notably during site coordination

and when establishing the baseline scenario for impact monitoring to ensure project

ownership by the beneficiaries.

2.7 Bank Group Experience and Lessons in Project Design

2.7.1 The Bank has financed similar operations in the road sub-sector. The implementation

of these projects has helped it to acquire relevant experiences and draw a few lessons. The

project design took into account lessons drawn from the Bank’s experience in Burundi

notably: (i) the importance to have various stakeholders buy into the project design through

the participatory approach; (ii) the need to have quality engineering design that improves the

technical design of works; (iii) recourse to Advanced Action on Procurement (AAP)

procedure to accelerate project implementation; (iv) enhanced supervision of projects by the

Bank (at least twice annually); (v) development of performance indicators in project

monitoring; and (iv) the need to build the technical and operational capacity of executing

agencies. The project design also tapped from lessons learnt based on challenges encountered

during the implementation of various similar road projects in the country, notably the impact

of works cost increases that delay work start-up. The cost estimate specifically factors in the

procurement, start- up and works execution period.

2.8 Key Performance Indicators

2.8.1 The key indicators identified are those provided in the logical framework together

with their deadlines. These are: (i) the rate of increase of traffic speed between Gitega and

Ngozi; (ii) the rate of reduction of the overall transportation cost (vehicle operating cost

reduced by 25% on average and travel time reduced by 60%) on the project road; (iii) increase

in the volume of sub-regional trade by about 10%; (iv) better access to basic social services,

production and marketing centres for an estimated 0.775 million inhabitants served by the

road and feeder roads, 52% of which women.

8

2.8.2 Apart from these output indicators, implementation performance indicators will be

established and monitored, mainly: (i) the time it takes to fulfil conditions precedent to first

disbursement of the grant; (ii) the procurement timeframe; (iii) the project implementation

timeframe; and (iv) disbursement rates in relation to the expenditure schedule.

2.8.3 The lack of a functional monitoring/evaluation system right from the start of project

activities often accounts for the subsequent challenges encountered in assessing the level of

achievement of development objectives retained in the results matrix. Therefore, a

monitoring/evaluation mechanism will be put in place for this project: (i) to build and manage

information on the execution of various project components; (ii) establish the baseline

scenario for road impact monitoring; and (iii) at the end of the project, undertake an impact

assessment using the same methodology that was used to establish the baseline scenario. The

University of Ngozi will conduct the project monitoring/evaluation.

III. PROJECT FEASIBILITY

3.1 Economic and Financial Performance

The economic analysis was carried out using the HDM4 model, based on a cost-benefit

analysis between the “without” and “with” project situations over a 20-year period, starting

from road commissioning. A 12% discount rate and an average residual value of 47% were

assumed, depending on the road sections (resulting from the significant share of earthworks in

the project cost). The data considered are: (i) the investment costs, net of taxes, related to the

control and monitoring of works and physical contingencies; and (ii) the maintenance cost of

road sections and vehicle operating cost (VOC). The total reference AADT in 2009 on the

entire route was 84 vehicle days (arithmetic average of the AADTs by homogenous traffic

section). The quantifiable economic benefits relate to the general transport cost reduction

(VOC reduced by 25% on average and travel time reduced by about 40%). The cost of the

feeder roads as well as the agricultural value added were considered as exogenous costs and

benefits in the model. Table 3.1 below provides a summary of the economic analysis, details

of which are given as Annex A5.

Table 3.1

Summary of Economic Analysis

Financial Internal Rate of Return (FIRR) in % Not Applicable

Economic Internal Rate of Return (EIRR) of the Nyangungu-Ngozi Section Project in % 14.9%

Net Present Value (NPV) in USD million 3.5

Sensitivity of ERR (Combination of 10% increase in the costs and 10% decrease in benefits) 12.5%

Discount Rate 12%

3.2 Environmental and Social Impact

Environment

3.2.1 The project was subjected to in-depth environmental studies. Based on the findings

which were validated by the relevant authorities, the project was classified under

Environmental Category 2. This categorization was endorsed by the Bank on 21 May 2010.

Furthermore, an Environmental and Social Management Plan (ESMP) was prepared and the

summary published on 29 July 2010 on the Bank’s website in accordance with current

procedures.

9

Positive Impacts

3.2.2 The main project impact is the opening up of an estimated 10 districts (“communes”)

that currently lack adequate access to local markets and basic social services. The other

beneficial impacts will mainly be socio-economic, such as skilled and unskilled employment

opportunities (see paragraph 3.2.11), and some formal/informal trading activities (sale of

agricultural and artisanal products, opening of restaurants, etc.).

Negative Impacts

3.2.3 With regard to negative impacts, those identified are as follows: (i) dust emission,

noise pollution, (noise, vibration of site machinery); (ii) safety problems during works and

setting up of site equipment and materials; (iii) accidental spillage, fuel and lubricant leakage;

(iv) felling of roadside trees during the road right-of-way demarcation phase; and (v)

degradation of borrow areas, risk of the spread of STI/HIV/AIDS and change of moral

standards. Furthermore, during works, the disorderly disposal of solid and liquid waste from

the sites (rubble, various residues, etc.) could affect the quality of the natural environment,

especially near living areas. These disposal points could become unsightly dumpsites.

3.2.4 Mitigative measures will be taken for all the negative impacts identified, namely: (a)

the bidding documents will include environmental provisions relating to waste storage areas

identified by type: (i) area reserved for the storage of possibly contaminated/polluted earth,

protected area fitted with water-tight recipients for the recovery of waste oil; (ii) areas

intended for the storage or handling of hazardous, toxic, inflammable or polluting products

(laboratory reagents, dispensary waste, special products, etc.) and located as far away as

possible from human dwelling in order to protect human health, the soil and the subsoil; (iii)

establishment of a quality assurance scheme and a fire fighting plan, including provisions on

respect for the environment. Contractors will submit proposals on programmes for

implementing environmental and social measures as well as site restoration works backed by

a methodological presentation describing solutions for averting negative impacts and

minimizing inevitable ones; (b) the guarantee provided by the contractors will cover the

environmental and social components. Other measures will be prescribed to the contractors,

namely: (c) management of drainage and run-off; reduction of dust on construction sites;

employment of local workers; implementation of a hygiene, health and safety management

plan including tools with which to manage the project components relating to these three

areas; reuse of onsite digging equipment; recycling of waste. The contractors will observe the

country’s labour laws on the work sites; (d) sensitization of the local population on HIV-

AIDS and other pandemics, road safety and good environmental and social practices as well

as implementation of environmental and social surveillance and monitoring activities. A

detailed environmental and social assessment is given in Annex A6.

Climate Change

3.2.5 Lying across the Kimiriro natural region at an average altitude of 1600 m and the

Buyenzi natural region at an average altitude of 1800 m, the project area has a mean

temperature of 19° C with a minimum of 12.6° C and a maximum of 25° C. It is also

characterized by regular and abundant rains ranging between 1200 and 1500mm. Unusual

climatic conditions may result in severe flooding as well as an increase in temperature that

could exceed the maximum 25° C in normal times. The project design takes into account not

only the current climatologic data but also possible future adverse weather conditions. Thus,

10

emphasis is primarily given to the quality of road materials to be used (rocky and loose

materials, asphalt and adjuvant) and the project’s optimal implementation capacity. To this

end, the research already conducted led to the identification of sites and the determination of

the quality of materials already available there, based on the technical criteria. Using the same

approach, the project technical documents also include details on many appropriate structures

designed to drain abundant water and raise the road above water levels, notably in sensitive

areas. Furthermore, the Bank will select a contractor with solid technical references for the

execution of works as well as proper maintenance of the road and associated structures, in line

with the paved road network maintenance strategy supported by Burundi’s partners, including

the Bank.

3.2.6 Furthermore, with the increase in traffic following the road commissioning,

increased gas emissions with their attendant impact on the ozone layer should be expected. To

mitigate this risk, the project will preserve a significant portion of existing roadside trees. The

proposed felling of other trees is indispensable in order to free the 14 metres of right-of-way

needed for the road. However, this will essentially concern trees on one side of the road only.

Those affected will be replaced with the suitable species to be planted in close collaboration

with the National Water Sources and Forestry Department. Therefore, a long chain of

roadside trees will planted mainly to help reduce the effects of exhaust gas emissions induced

by the project during the operating phase.

Gender

3.2.7 Burundi has made significant progress in promoting women. Constitutional

arrangements guaranteeing that women take up at least 30% of seats in institutions have been

respected, particularly in the composition of the Government, the National Assembly and the

Senate. Furthermore, the percentage of women with access to political and economic

decision-making positions has increased from 11.2% in 2003 to over 20% in 2007. At the

local level, the electoral code, amended in September 2009, introduced for the first time in the

country a minimum 30% quota for women in municipal councils, thereby extending to local

governments a requirement that hitherto had been limited to the national level.

3.2.8 Out of the 775,000 inhabitants of the PIA, 52% (or 403,000) are women. It is

estimated that 95% of working women are in the agricultural sector, which constitutes their

main source of livelihood and the mainstay of the national economy. Thus, each commune

has at least one recognized working women’s association. To alleviate women’s work burden

and improve their production, an additional intervention will be provided under this project in

the form of support to women’s cooperatives concentrating on food and cash crop production

(rice hulling machines and more suitable farm implements).

3.2.9 The role of women in the other economic activity areas such as formal trade and

other informal services is still modest. In the project area, two of the six municipal

administrators are women and they have been discharging their duties to the satisfaction of

the citizens.

Social

3.2.10 The project (main road and associated works) will have direct and indirect impact on

the benchmark socio-economic indicators namely: endemic unemployment, rural income,

access to basic social services and provision of public utilities.

11

Unemployment

3.2.11 In 2008, unemployment affected 14% of the PIA workforce. There has been an

upsurge in demand for employment in the last three years, especially following the return to

the country of population groups displaced during the socio-political crisis (1993-2004). The

project will help to mitigate this soaring unemployment. Indeed according to appraisal

estimates, 500 persons including 350 local workers will have direct and indirect employment

opportunities during the works implementation phase.

Increase in Rural Income

3.2.12 The Burundian crisis also brought down the per capita income from USD 201 in

1990 to USD 110 in 2006. Based on this indicator, the project design also aims to raise the

level of income of the rural population through agricultural value added. This exogenous

benefit is inevitable since 90% of the PIA working population derives its income mainly from

agriculture and a significant portion of the road serves rural areas. The economic assessment

indicates that at least 15% of annual agricultural value added in the area will derive from this

project, equivalent to an annual average of BIF 2.25 billion.

Access to Basic Social Services

3.2.13 The road passes through ten districts (“communes”) with a total population of

775,000. This population, 52% of which women, is mostly located at less than 2 km from the

project road. However, as a result of the road’s advanced state of deterioration, vehicle travel

time from the largest localities to the main market and the main hospital in the project area

varies between 1 hour 30 minutes and 2 hours. In the absence of public transport, the

dominant means of transport are bicycles and motorcycles for moving both people and goods.

The disadvantages of these means of transport include reduced capacity and inability to meet

the needs of people in case of emergency (health evacuation, childbirth, etc.) or during rainy

periods. Thanks to the project, the population of the ten districts along the road will

henceforth be able to reach the socio-economic centres of the PIA in shorter time, estimated at

less than 30 minutes as against 1 hour 30 minutes/2 hours in the “without project” situation.

This social-related time gain is of particular significance in case of health evacuation for

delivery or other public health reasons such as immunization and environmental protection

awareness campaigns, HIV/AIDS and other pandemics (malaria, diarrhoeal diseases, acute

respiratory infections etc.).

Public Utilities Cover

3.2.14 There is an awful lack of public utilities in the PIA (drinking water and sanitation),

particularly in schools and some health centres. This deficit accounts for the numerous cases

of water-borne diseases or diseases related to lack of environmental hygiene, especially for

school goers and staff of unequipped health centres. To remedy this situation, the project will

entail as part of associated works, the construction of drinking water points and latrines for

two health centres and five schools identified to be highly needy. The Government and the

local authorities have also been sensitized about the pressing need to offset the lack of public

utilities in the PIA.

12

Resettlement of Displaced Persons

3.2.15 The Gitega-Nyangogo-Ngozi road exists already. The project will not entail any

change in design or axis plane. Consequently, the project implementation will not result in

any destruction of dwellings. It will entail a single forced displacement of one household (2

persons) within its current geographic space. The other proposed displacement will involve

makeshift structures mainly used as dwellings or for commercial purposes, to be moved a few

metres away from the road right-of-way. This resettlement will require a simple compensatory

procedure by the country to facilitate the reconstruction of such structures, compensation for

farmlands and burrow areas as well as trees to be felled to free the right-of-way. This

compensation should be paid before the start of works. The Government will provide the ADF

with evidence of paying compensation for the expropriation of houses and lands. This will be

a grant condition (Condition Bi).

IV. PROJECT IMPLEMENTATION AND MONITORING/EVALUATION

4.1 Implementation Arrangements

Executing Agency

4.1.1 The Project Executing Agency will be the Ministry of Public Works and

Infrastructure (MPTE) through the Roads Authority (ODR). However, for the day-to-day

monitoring of project activities, the Road Project Implementation Monitoring Unit (PIMU),

established since 2006, will be responsible for monitoring this project. Since its inception, the

PMIU has satisfactorily undertaken the monitoring and management of road operations

financed by the Bank in the country. Placed under the supervision of the MTE ODR, the

PIMU will oversee the project’s technical, administrative, financial, and organizational tasks.

The PIMU currently comprises: (i) two civil engineers in charge of the RN5-Nyamitanga-

Ruhwa Road Rehabilitation Project (a project manager and his assistant); (ii) an engineer in

charge of monitoring the RN14-Kirundo-Gasenyi Road Project; (iii) an accountant for

financial management; (iv) an environmentalist; (v) a specialist of STIs, including HIV/AIDS

and other pandemics; and (vi) administrative support staff. The PIMU staffing has been

consolidated under this project with two civil engineers appointed by the Donee, and an

assistant accountant. The Bank’s current focal point at ODR will maintain daily contact with

the Bank on all projects. The PIMU will benefit from the technical assistance put in place

under the RN5 - Nyamitanga-Ruhwa Rehabilitation financed by the Bank. This technical

assistance is a follow-up to the one financed by the Bank under the Kirundo-Gazeni Project,

which helped to improve the management of projects, the planning/programming of road

operations, the assessment of the socio-economic impacts of road projects and the training of

staff in various areas. An overview of the transport sector of Burundi is given as Annex (A7).

4.1.2 A consulting firm will be recruited for control and supervision of works for the main

road and related developments, and another for sensitization of PIA communities on road

safety, environmental protection and STI control, including HIV-AIDS. The consulting firms

will issue: (i) quarterly works progress reports and; (ii) reports on sensitization seminars. The

University of Ngozi will be hired to prepare the monitoring/evaluation report on project socio-

economic impacts. The specific project implementation arrangements are given as Annex A8.

13

Procurement

4.1.3 By letter dated 21 April 2010, the Bank approved the Government’s request to use

Advanced Action on Procurement for goods, works and services under this project. The

procurement of goods, works and services to be financed with the ADF grant will be based on

the Bank’s rules and procedures for the procurements of goods and works, or rules and

procedures for the use of consultants, as the case may be, based on Bank standard bidding

documents for works and consultancy services. Details on the modalities for the procurement

of works and services financed with the ADF grant and the Contract Award Plan are given as

Annex A9. Works for the construction of two pilot footbridges as part of a sector study

initiated by the OITC Department (Annex A10) will be entrusted to Helvetas Ethiopia, an

NGO.

Disbursement and Financial Management

4.1.4 The direct disbursement method will be used for the works and consultancy services

financed by the ADF. To facilitate the timely mobilization of counterpart funds, the

Government will open a special account bearing the project name in a bank in Burundi

acceptable to the ADF, into which the counterpart funds will be paid. This counterpart

account, which will also cover the operating cost of the PIMU, will be replenished yearly in

accordance with the annual expenditure schedule. Evidence of opening the account and its

regular replenishment by the Donee will be a grant condition (Condition C1). The financial

management will be based on Bank rules and guidelines and executed by the PIMU. In this

regard, the current accountant, who has the necessary qualifications and experience in projects

financed by the Bank, will be responsible for financial and cost accounting, in line with the

norms in force. A computerized accounting system will be put in place from project start up.

Details of the financial management and disbursement arrangements are given as Annex A11

Audit

4.1.5 The project executing agency will keep separate project accounts based on a private-

type computerized system. The accounting system should help to monitor project expenditure

in relation to the estimates, by component, expenditure category and source of financing as

well as prepare financial statements. An external auditing firm will undertake annual auditing

of the project accounts based on the International Federation of Accountants’ ISA standard

and the Bank’s Terms of Reference. The firm will be recruited in line with Bank procedures.

The audit report will be submitted to the Bank within six months following the end of each

accounting period. The detailed audit arrangements are specified as Annex A12.

Implementation and Supervision Schedule

4.1.6 The project implementation schedule by components, summarized at the beginning

of this report, is presented in detail as Annex A13. It takes into account the relevant

experience of the executing agency in managing works execution timeframes and that of the

Bank in dealing with issues in previous similar projects. According to the schedule drawn up,

project activities will begin following grant approval in the third quarter of 2010 and will be

completed by October 2012. The grant closing date is fixed at 31 July 2013. Project activities

will be closely monitored at the Bank in line with the schedule in Table 4.1 below.

14

4.2 Monitoring/Evaluation

4.2.1 Project monitoring/evaluation will consist of internal and external monitoring, launch

and supervision missions by the Bank and a final evaluation, including end-of-works and

project completion reports. Project implementation will entail the preparation of: (i) monthly,

quarterly, final works and sensitization reports by the works control consultant and the

consultant in charge of sensitization, respectively, no later than 15 days after the end of the

month or quarter concerned; (ii) quarterly project progress reports by the project

implementation monitoring unit; (iv) monitoring/evaluation reports on the socio-economic

impacts of the project by the University of Ngozi, which will be responsible for these

services. The University will define the socio-economic impact measures indicators and their

trend, in consultation with the project executing agency.

4.2.2 In conjunction with the University of Ngozi, which will be responsible for

monitoring/evaluation, the PIMU will undertake an assessment of the indicators defined in the

CSP and those in this project (see paragraph 2.8.1). At the end of the project and six months

following the completion of works, the executing agency will organize traffic count on the

road to test the traffic assumptions

Table 4.1

Monitoring/Evaluation Schedule

Period Milestone Monitoring Process /

Feedback Loop

Q3 2010 Works & Services Competitive Bidding AAP

Procedure Launch/ (Bank/ODR)

Q4 – 2010 Completion of Works and Services Procurement Evaluation and approval of works and

services contracts (Bank/ODR)

Q1 – 2011 Project Launch/Start Up Disbursement process and updating of

procurement plan

Q3 – 2011 30% of Works Completed Works monitoring /supervision

(Bank/ODR)

Q3 – 2012 100% of Works Completed Final works completion report (control

mission/ODR)

Q4 – 2012 Project Completion and Preparation of

Completion Report

Joint preparation of the project

completion report

4.3 Governance

4.3.1 The culture of good governance is emerging in Burundi. The rule of law is gradually

gaining ground, albeit with some difficulty. The administration is improving. On the political

front, since 2005 Burundi has made significant strides in the peace consolidation process. This

has been the fruit of the efforts by all national stakeholders, with the support of the

international community. It is in this context that long and difficult negotiations with the last

armed rebel movement, the National Liberation Forces (FNL), culminated in the cessation of

hostilities in the country, the return of security nationwide and the establishment of

progressively inclusive institutions. Other significant achievements have also been noted in

terms of economic and regional integration.

4.3.2 In May 2009, Burundi adopted a Public Finance Management Strategy backed by an

action plan for the 2009-2011 period. The overall objective of this strategy is to set up from

2009 to 2011 a more effective and transparent public finance system. To achieve this overall

objective, six specific objectives have been defined, namely: (i) adopt and implement a

coherent legislative and regulatory framework for public finance management; (ii) effectively

15

mobilize internal and external resources to finance public expenditure, while maintaining

budgetary balance; (iii) adopt an effective, stringent and transparent public resource

management system; (iv) render the auditing system consistent, effective and in line with

international standards; (v) make data on public finances exhaustive, accurate and regular and,

lastly; (vi) gradually strengthen the institutional capacity of the Ministry of Finance and

partner structures to effectively accomplish their mission. Each of these objectives is backed

by specific action plans for implementation.

4.4 Sustainability

4.4.1 Project sustainability depends on the quality of works and adequate operating and

maintenance conditions of the structures to be put in place. The engineering studies identified

quality materials in the project area that will be used. The technical design solution retained is

adequate and will ensure a normal project life span, given the estimated traffic as well as the

topographic and climatic conditions. Maintenance of the road (which forms part of the

classified network) will be included in the country’s annual maintenance programme.

Furthermore, the control of road works (road and associated feeder roads) will be carried out

by a qualified consultant who will ascertain the quality of the structures to be built.

4.4.2 With the capacity of the Roads Authority (ODR) strengthened during project

implementation, it is expected that its operational effectiveness will improve. The Authority’s

performance will be gradually enhanced thanks to the ongoing or expected institutional

support from sector donors. The establishment of a road database, currently in the completion

stage, will enable the ODR to monitor the state of the network, have an appropriate tool for

planning road maintenance and rehabilitation works and better control the costs of

maintenance operations.

4.4.3 The recurrent costs are those of the road and the associated feeder roads. The

relevant recurrent costs of feeder roads will be covered by the National Road Fund (NRF)

which has been operating since 2003. The resources of the NRF derive from road user fees

levied on fuel, road tolls on foreign vehicles, axle load fees, penalties for transport vehicle

overload, compensation for damage caused to the road network, and possible contributions by

the Government as well as grants and contributions from multilateral or bilateral aid

organizations. NRF revenue has multiplied by three and increased from USD 2.3 million in

2005 to USD 7 million in 2009. Major efforts have been made to improve NRF organization

and operation. The Fund has the capacity to finance the entire routine maintenance of the

national road network. In view of the road maintenance backlog due to the war, the

Government still depends on financial support from development partners. Hence, under the

Road Sector Development Project (PDSR), the World Bank is currently providing

institutional and financial support: (i) to the NRF to build its operational capacity and

contribute to financing road network maintenance; and (ii) to SMEs and local technical

consulting firms to strengthen their capacity, with a view to improving the quality of road

maintenance works. Furthermore, the beneficiary communities are involved in road

infrastructure maintenance and protection operations. The ODR has entrusted to Community

Development Associations (ACD)1 manual repair works and monitoring of rights-of-way or

road signs, while creating permanent employment in the rural and urban areas, notably for

female members of the ACDs. Additionally, the ODR will entrust mechanized maintenance to

SMEs in order to stimulate private sector development.

1 This falls within the framework of implementing the PRSF guidelines recommending high labour intensive works and

community involvement. An ACD will undertake spot maintenance and supervision of 10 km of the paved road, 1 km per

member. Each member receives a monthly wage of about BF50,000.

16

4.4.4 The annual routine maintenance cost of the Nyangungu-Ngozi road is estimated at

USD 103,000. The cost of scheduled maintenance of the road (every ten years) is estimated at

USD 2.7 million. For the feeder roads, the annual routine maintenance cost is estimated at

USD 50,700. The scheduled maintenance cost (every 3 years) of the feeder roads is estimated

at USD 3.25 million.

4.5 Project Management

4.5.1 The main risks identified that could impede project implementation are: (i) delay in

the country’s stabilization process; (ii) absence of mobilization of financing and reforms

needed for the funding of investments in the sector; (iii) lack of road maintenance as a result

of inadequate resources; (iv) financing gap due to inadequate competition; and (v) the

executing agency’s inability to adequately monitor project implementation.

4.5.2 The main risks identified will be mitigated by: (i) the reconciliation and territorial

protection policy initiated a few years ago, and the ongoing democratization process that are

likely to consolidate the country’s peace and stability; (ii) the return of donors since 2004

should be strengthened and provide the necessary financing in the wake of the expected

political stability; (iii) mobilization of supplementary sources such as tolls to replenish the

road fund already in place; (iv) use of Advanced Action on Procurement that will likely win

the participation of contractors currently undertaking works in Burundi and Rwanda in the

competitive bidding process; and (iii) capacity-building with the technical assistance, training

and computer hardware provided to ongoing projects financed by the Bank

4.6 Knowledge Building

4.6.1 Knowledge building forms part of the institutional strengthening of the department in

charge of roads. The training of sub-sector management staff and officers has suffered from

years of war, leading to a halt in training programs following the suspension of financing and

projects. Under ongoing projects, the Bank has provided financial support to the roads

department to train its technical staff (engineers and technicians), thus contributing to building

the department’s technical and operational capacity.

V. LEGAL FRAMEWORK

5.1 Financing Instrument

To finance this project, the Bank will use the ADF/FSF Pillar 1 grant allocated to the

Government of Burundi.

5.2 Conditions Associated with ADF Intervention

A. Conditions Precedent to Effectiveness

Effectiveness of the Protocol of Agreement is subject to its signature by the ADF and

the Donee.

17

B. Conditions Precedent to First Disbursement

The first disbursement of the Grant is subject to the fulfilment by the Donee of the

following condition:

(i) Provide the ADF with evidence of the effective payment of compensation for

land expropriation (paragraph 3.2.15);

C. Other Conditions

(ii) In addition to the above conditions, the Donee shall fulfil the following

condition:

Provide the ADF with evidence of opening a special account bearing the project

name in a commercial bank in Burundi acceptable to the ADF into which the counterpart

funds will be paid, and provide the ADF with evidence of replenishing the counterpart fund

account yearly, in accordance with the schedule of expenditure (paragraph 4.1.4).

5.3 Compliance with Bank Policies

Is this project in line with

the Bank’s applicable rules?

The project is line with the policy on expenditures

eligible for financing by the Bank

The project is in line with the Bank’s recommendations

on road works unit costs study

The project is also in line with the CSP of Burundi

VI. CONCLUSIONS AND RECOMMENDATIONS

6.1 Conclusions

6.1.1 The Gitega-Nyangungu-Ngozi Road, which forms part of Burundi’s priority network

linking the country’s second and third cities, constitutes a major link for the development of

trade between the north and the south. Its implementation will contribute to opening up the

rural areas. Specifically: (i) the project will help to reduce general transport costs; (ii) improve

access to basic social services, production centres and product marketing; and (iii) enhance

opportunities for commercial activities. The project forms part of Burundi’s national priorities

6.1.2 The negative environmental impacts have been identified and mitigative measures

incorporated into the project. The project underwent a comprehensive engineering study. It is

economically viable and shows an average economic rate of return of 14.9%, which is higher

than the opportunity cost of capital estimated at 12%. The sustainability of investments will

be assured through the strengthening of resources allocated to road maintenance and

compliance with axle load and heavy vehicle weight limits.

6.2 Recommendations

In view of the foregoing, it is recommended that an ADF grant not exceeding UA 24.1 million

be awarded to the Republic of Burundi. The grant will be used in implementing the project as

designed and described in this report. The grant will be subject to the conditions specified in

the Protocol of Agreement.

Appendix I

Year Burundi Africa

Develo-

ping

Countrie

Develo-

ped

CountrieBasic Indicators Area ( '000 Km²) 28 80 976 80 976 54 658Total Population (millions) 2009 8,3 1 008 5 629 1 069Urban Population (% of Total) 2009 10,7 39,6 44,8 77,7Population Density (per Km²) 2009 298,3 3,3 66,6 23,1GNI per Capita (US $) 2008 140 1 428 2 780 39 688Labor Force Participation - Total (%) 2009 50,1 41,2 45,6 54,6Labor Force Participation - Female (%) 2009 51,5 41,2 39,8 43,3Gender -Related Dev elopment Index Value 2005 0,409 0,525 0.694 0,911Human Dev elop. Index (Rank among 182 countries) 2007 174 0,514 n.a n.a.Popul. Liv ing Below $ 1 a Day (% of Population) 2006 81,3 50,8 25,0 …

Demographic Indicators

Population Grow th Rate - Total (%) 2009 2,8 2,3 1,3 0,7Population Grow th Rate - Urban (%) 2009 5,7 3,4 2,4 1,0Population < 15 y ears (%) 2009 38,4 56,0 29,2 17,7Population >= 65 y ears (%) 2009 2,8 4,5 6,0 15,3Dependency Ratio (%) 2009 70,0 78,0 52,8 49,OSex Ratio (per 100 female) 2009 96,1 100,7 934,9 948,3Female Population 15-49 y ears (% of total population) 2009 26,2 48,5 53,3 47,2Life Ex pectancy at Birth - Total (y ears) 2009 50,9 55,7 66,9 79,8Life Ex pectancy at Birth - Female (y ears) 2009 52,4 56,8 68,9 82,7Crude Birth Rate (per 1,000) 2009 34,3 35,4 21,5 12,0Crude Death Rate (per 1,000) 2009 13,7 12,2 8,2 8,3Infant Mortality Rate (per 1,000) 2009 96,0 80,0 49,9 5,8Child Mortality Rate (per 1,000) 2009 161,7 83,9 51,4 6,3Total Fertility Rate (per w oman) 2009 4,5 4,5 2,7 1,8Maternal Mortality Rate (per 100,000) 2005 480,0 683,0 440,0 10,0Women Using Contraception (%) 2006 … 61,0 75,0

Health & Nutrition Indicators

Phy sicians (per 100,000 people) 2005 6,5 42,9 78,0 287,0Nurses (per 100,000 people)* 2005 75,9 120,4 98,0 782,0Births attended by Trained Health Personnel (%) 2005 33,6 50,5 63,4 99,3Access to Safe Water (% of Population) 2006 71,0 64,0 84,0 99,6Access to Health Serv ices (% of Population) 2006 … 61,7 80,0 100,0Access to Sanitation (% of Population) 2006 41,0 38,5 54,6 99,8Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2007 2,0 4,5 1,3 0,3Incidence of Tuberculosis (per 100,000) 2007 367,0 313,7 161,9 14,1Child Immunization Against Tuberculosis (%) 2007 97,0 83,0 89,0 99,0Child Immunization Against Measles (%) 2007 99,0 74,0 81,7 92,6Underw eight Children (% of children under 5 y ears) 2005 … 25,6 27,0 0,1Daily Calorie Supply per Capita 2005 1 631 2 324 2 675 3 285Public Ex penditure on Health (as % of GDP) 2006 0,7 5,5 4,0 6,9

Education Indicators

Gross Enrolment Ratio (%)

Primary School - Total 2008 135,6 100,2 106,8 101,5 Primary School - Female 2008 132,1 91,7 104,6 101,2 Secondary School - Total 2008 17,7 35,1 62,3 100,3 Secondary School - Female 2008 14,4 30,5 60,7 100,0Primary School Female Teaching Staff (% of Total) 2008 53,0 47,5 … …Adult Illiteracy Rate - Total (%) 2006 … 59,4 19,0 …Adult Illiteracy Rate - Male (%) 2006 … 69,8 13,4 …Adult Illiteracy Rate - Female (%) 2006 … 57,4 24,4 …Percentage of GDP Spent on Education 2005 5,1 4,5 5,4

Environmental Indicators

Land Use (Arable Land as % of Total Land Area) 2007 38,7 6,0 9,9 11,6Annual Rate of Deforestation (%) 2006 … 0,7 0,4 -0,2Annual Rate of Reforestation (%) 2006 … 10,9 … …Per Capita CO2 Emissions (metric tons) 2008 0,0 1,1 1,9 12,3

Sources : ADB Statistics Department Databases; World Bank: World Development Indicators; last update :

UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports.

COMPARATIVE SOCIO-ECONOMIC INDICATORS

Burundi

may 2010

0

20

40

60

80

100

120

20

03

20

04

20

05

20

06

20

07

20

08

20

09

Infant Mortality Rate( Per 1000 )

Burun di Africa

0

500

1000

1500

20

02

20

03

20

04

20

05

20

06

20

07

20

08

GNI per capita US $

Burun di Africa

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

200

3

200

4

200

5

200

6

200

7

200

8

200

9

Population Growth Rate (%)

Burundi Africa

111213141516171

20

03

20

04

20

05

20

06

20

07

20

08

20

09

Life Expectancy at Birth (years)

Burun di

Africa

Appendix II

Table of Bank Portfolio in Burundi

Sector No. Project Approval Date Signature Effective

ness Date

Amount (UA

M)

Amount

Disburse(

UA M)

Disburse

ment

Rate (%)

Deadline Project

Age

Agriculture 1

PPF Bugesera Integrated Rural

Development 27-Dec-08 27-Feb-09 27-Feb-09

0,32 0,00 0,00 31-Dec-10

1,2

2 Watershed Development Project 1-Mar-06 7-Apr-06 7-Apr-06

9,00 6,23 69,27 31-Dec-11

4,1

3 Lake Tanganyika Development Prog 17-Nov-04 12-Jan-05 13-Jan-06

4,96 0,16 3,27 31-Jan-12

5,4

Total Agric.

14,28 6,40 24,18

3,58

Multi-Sector 4 Economic Reform Support Prog. 8-Dec-04 12-Jan-05 28-Jun-05

6,72 6,72 100,00 30-Dec-10

5,3

8-Dec-04 12-Jan-05 28-Jun-05 1,50 0,60 40,01 30-Dec-10 5,3

Total Multi-

Sector

8,22 7,32 70,01

5,3

Energy 5

Electricity Infrastructures

Rehabilitation .and Extension 5-Jul-07 17-Aug-07

17-Aug-

07 7,32 1,71 23,41 31-Dec-11

2,7

Total Energy

7,32 1,71 23,41

2,7

Social 6 Multisector Re-integration Project 13-Dec-04 12-Jan-05 1-Oct-05

9,81 7,8 79,3 31-Dec-10

4,6

7 Employment Creation Project 24-Jun-09 14-Sep-09 14-Oct-09

10,00 1,31 13,08 31-Dec-13

0,5

Total Social 19,81 9,09 46,19 2,51

Transport 8

Kicukiro - Kirundo Road Project

(Multinational) 20-Sep-06 30-Oct-06 30-Oct-06

14,90 11,15 74,82

31-Nov -

11 3,5

9

Nyamitanga-Ruhwa-Ntendezi-

Mwityazo Road (Multinational) 16-Déct-08 16-Mar-09 16-Dec-08

49,38 0,00 0,00 31-Dec-13

1,3

10

Dsm-Isaka-Kiga/Keza-M Railway

Phase 2 (Multinational) 17-Nov-09 12-Feb-10 12-Feb-10

1,67 0,00 0,00 31-Dec-12

0,1

Total Transport

64,85 11,15 24,94

1,63

Water &

Sanitation 11 Rehabilitation and Extension Project 14-Dec-05 13-Jan-06 13-Jan-06

12,00 3,60 29,96 31-Dec-10

4,3

Total W&S. 12,00 3,60 29,96 4,3

Total 127,58 28,11 38,75 3,68

Appendix III

Major Related Projects Financed by the Bank Group and Other Development

Partners in Burundi

DONOR PROJECT AMOUNT

(millions)

1. EDF

(i) Gitega-Karuzi Road Development and Asphalting and

Gitega City Bypass;

(ii) Ruyigi- Cankuzo Road Development and Asphalting

40,00 Euros

22,00 Euros

2. OPEC Fund

(i) Supplement to Kicukiro – Kirundo: Gasenyi- Kirundo

Section Road Development and Asphalting

(ii) Supplement to Bubanza-Ntamba-Ndora Road Development

and Asphalting

USD 12,00

USD 18,00

3. ABEDA

Supplement to Bubanza-Ntamba Road Development and

Asphalting

USD 22,00

4. IDA Road Section Development Project SDR 34, 30

5ADF

(i) Kicukiro – Kirundo Road Project (Gasenyi-Kirundo Section)

(ii) Nyamitanga-Ruhwa-Ntendezi-Mwityazo Road Project

(Nyamitanga-Ruhwa Section)

UA 14,9

UA 49,38

Appendix IV

Gitega-Nyangungu-Ngozi Road Project Area Map