GPOBA CONCEPT NOTE. The Palestinian Authority represented by the Joint Services Council for Hebron and Bethlehem Task Team Leader

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized GPOBA CONCEPT NOTE Project Name GPOBA Pilot Solid Waste Management Project (GPOBA-PSWMP) Sector Solid Waste Management Location Southern Region, West Bank Applicant The Palestinian Authority represented by the Joint Services Council for Hebron and Bethlehem Task Team Leader Ibrahim Dajani, World Bank TTL Carrie Farley, IFC Investment Officer (TTL for IFC project) Funding Request US$ 8 million for subsidies, $250,000 for independent verification (IVA) (W3) Date July 11, 2012 I. SUMMARY Unsanitary waste collection and disposal in unregulated dumpsites in the West Bank and Gaza area directly affect residents, presenting serious public health and environmental hazards. These hazards particularly impact the poor, as 34% of total West Bank waste originate from Hebron and Bethlehem, the two poorest Governorates in the southern part of the West Bank. Following the successful northern West Bank solid waste management project, the World Bank, in collaboration with the European Union (EU) and other donors, is supporting the Palestinian Authority (PA) and its Joint Services Council for Hebron and Bethlehem (JSC-H&B) through the Southern West Bank Solid Waste Management Project (SWBSWMP - P105404). This project aims to provide efficient, socially acceptable, and environmentally friendly SWM services through (i) strengthening the JSC-H&B administrative and technical capacity; (ii) the provision of a sanitary landfill in Al Minya; and (iii) carrying out a public awareness campaign to promote waste minimization, resource recovery and cost recovery of SWM. In parallel, the International Finance Corporation (IFC) is supporting the JSC-H&B in attracting the private sector through a publicprivate partnership (PPP) for: (i) the operation and maintenance of the planned Al Minya Landfill and three transfer stations; (ii) the transport service between each transfer station and the Al Minya Landfill; and, if feasible, (iii) the implementation of recycling/composting activities. The expected completion of the landfill works is March In the interim period, as a result of the closing of the 17 existing illegal dumpsites, municipal waste is re-routed to a regional dumpsite in Yatta, south of Hebron Municipality. An OBA pilot is proposed to help improve the end-service for residents who are not able to afford full cost recovery fees in Southern West Bank, and to tackle the main problems faced by municipalities in managing their solid waste management (SWM) system, namely (a) high inefficiencies linked to internal costs of primary waste collection (e.g. excess workers, inadequate equipment/routes); and, (b) low fee collection ratios. Solid waste fees would be charged to households by the municipalities to cover primary collection, transport to transfer stations, and operations and maintenance of the sanitary landfill, as well as administrative costs of the landfill operator and JSC-H&B. It is estimated that during the first four years of the new system, primary collection billing will have to be increased significantly in order to improve the service. Based on household affordability estimates, such additional burden would initially be unaffordable for most households and would be equivalent to an annual gap of US$2-2.3 million. It is therefore proposed to provide an output-based subsidy to JSC-H&B on behalf of the poor of the 33 member municipalities to help cover these payments during the first four years of the operation of the planned landfill which would otherwise have to be collected from households. 1

2 The project area would comprises the 33 municipalities and surrounding villages of Hebron and Bethlehem Governorates with an estimated total population of 800,000 people, of which around 35% are poor and where, in some areas, unemployment reaches nearly 40% (see map on page 5). 1 The proposed OBA pilot would also complement the broader capacity building support (e.g. planning, monitoring), including the technical assistance provided to the JSC-H&B and individual municipalities (e.g. equipment, machines, staff training) to improve operating efficiency. The OBA project would build on these efforts by providing additional incentive to the JSC-H&B to (i) improve the quality of services, which would in turn increase consumer willingness to pay, thus making the project financially sustainable once the OBA subsidies run out, (ii) increase user fee collections and (iii) reduce operating costs. Project sponsor: The project sponsor is the PA via the JSC-H&B, a joint agency for the municipalities in the Hebron and Bethlehem Governorates created to address common SWM problems in Southern West Bank. The JSC-H&B is a legal entity. It was established through a decision by the Minister of Local Government on July 12, 2007 through the articles of the Local Government Law of The JSC-H&B consists of both JSCs of Hebron and JSC of Bethlehem, as well as other municipal JSCs, and will be the implementing agency. Both the PA and the JSC-H&B are public institutions. JSC-H&B will be directly responsible for waste collection and/or ensuring that waste collection is efficiently performed by its member municipalities. Objective: The objective of the GPOBA subsidy would be to offset the cost of an improved SWM service for poor households in Southern West Bank, during the first four years of the new landfill operation, while the primary solid waste collection becomes more efficient. Outputs: The OBA pilot would have two outputs: Output 1: Improved access to primary collection service Output 1 would measure access for poor household to an improved primary waste collection service, resulting from improved efficiencies (e.g. improvement of vehicles, machines, and staff capacity). For disbursement purpose, quantifiable targets will be defined for the following generic indicators for improved service: a. Satisfaction of end-users with the service b. Cleanliness of the streets c. Waste collection according to quality standards d. Number of households serviced Indicators a, b, c and d. would be verified through (i) surveys of statistically representative samples of households in randomly selected municipalities at an agreed frequency to confirm that households are satisfied with the quality of the service provided, (ii) visual inspection of streets, (iii) technical indicators on operation of facilities, equipment and services (e.g. routes, vehicle logs, type of vehicle used, waste collection schedule/frequency, environmental controls), and (iv) tonnage of waste received at the landfill and transfer stations, and waste generation rates (currently estimated at 0.69 kg/person/day in Hebron in 0.79 kg/person/day in Bethlehem) 2. Output 2: Improvement in fee collection This output will be measured through pre-set indicators of improvement in fee collection efficiency, increase in user fees, and percentage of cost recovery compared with baseline data. Based on the current collection ratio of 34% of total billing, and evidence from other municipalities that have improved fee collection substantially following linkages to electricity bills and improvements in ease of payment, fee collection levels are targeted to improve to the level of 90% over the 4 years of the GPOBA subsidy. The 1 Coping with Conflict? Poverty and Inclusion in the West Bank and Gaza, The World Bank, July 29, SENES Technical Report Draft. 2

3 GPOBA subsidy will decline in proportion with both the fee collection increase, and the tariff increase as tentatively indicated in Table 1. The OBA outputs would be verified on a quarterly basis by an independent verification agent (IVA), which will in turn trigger the GPOBA subsidy payment. The IVA will recommend payment requests submitted by JSC-H&B to the Ministry of Finance (MoF), based on an in depth review of whether the pre-agreed outputs indicators have been satisfied. Quantifiable targets under Output 1and Output 2 categories above that can be verified in quarterly intervals will be defined as a part of the ongoing technical assistance work funded through the IFC project. 3 Targeting: The project targets the poorer part of Southern West Bank, namely Hebron and Bethlehem Governorates, where poverty rates reached around 35% of the total population in 2010, with 16.2% and 6.7% respectively living under deep poverty resulting in very low affordability levels, which affect the municipalities ability to cover the costs associated with improved service. In addition, Bethlehem and Hebron Governorates have the highest unemployment rates among the West Bank governorates where it averages 22.8% and 22.4%, respectively 4. Vulnerability of these groups is exacerbated by mobility restrictions and poor market access. In this context, and given that the Palestinian Authority social criteria system is unable to map individual registered social cases to specific location, the project would use geographical targeting at the governorate level. Funding structure: The total project cost during the four year period is estimated at US$23.3 million. The GPOBA subsidy is estimated to contribute approximately US$8 million over this period beginning around March The remaining will be paid by household fees, which will be set to cover the cost of primary collection, transport to transfer stations, operation and maintenance of the sanitary landfill, and administration of the landfill operator and JSC-H&B. The cost sharing would be on average over four years as follows: 66% from households; and 34% from GPOBA grant. Both the household fees and the complementary subsidy from GPOBA will be paid into a Designated OBA Account to the JSC-H&B. Subsidy level: Preliminary estimates (Table 1) indicate that the current fee would not be enough to cover costs of primary waste collection or the entire lifecycle cost of the SWM system (including transfer stations, long-haul transport, landfill operation including renewal and equipment replacement 5 ). Revenue collected from existing tariff levels and the current average 34% collection rate amount to a total US$1.4 million per year which leaves an annual gap of US$2.0 to US$2.3 million for primary waste collection in the first four years of the landfill operation. The OBA subsidy would cover a portion of this gap. Table 1: Financial projections and subsidy estimates for GPOBA subsidy period (US$) Year 1 Year 2 Year 3 Year 4 Total % 1. Full SWM system cost 6,000,000 6,000,000 5,650,000 5,650,000 23,300, % (including waste collections) 2. Primary collection cost 2,350,000 2,350,000 2,000,000 2,000,000 8,700, Private sector SWM cost 3,650,000 3,650,000 3,650,000 3,650,000 14,600,000 (transfer, disposal OpEx/CapEx) 4. Current user fees (US$) 1,400,000 1,400,000 1,400,000 1,400,000 5,600,000 24% 5. New household tariff ($/ton) Household tariff collection rate 34% 55% 75% 90% 7. Additional user contribution through increase in tariff and collection rates 700,000 1,900,000 3,100,000 4,000,000 9,700,000 41% 8. GPOBA subsidy level 3,900,000 2,700,000 1,150, ,000 8,000,000 35% 9. % O&M cost recovery 35% 55% 79% 95% 66% Source: IFC Financial Model 3 The proposed PPP contract for the landfill operation will include performance indicators (KPIs) such as tons of waste disposed at the Al Minya Landfill, and tons of waste transferred from the transfer stations to the Landfill to be verified by a qualified independent technical expert. 4 PCSBS Press Release on Labour Force Survey Results, Labour Force Survey (January-March, 2011) Round (Q1/2011). 5 Estimated at US$19/ton. 3

4 Note: 5. Current tariff for all solid waste management costs is US$23/ton in Hebron and US$22/ton in Bethlehem (translating into average monthly household waste collection fee of US$2-6.5 in Hebron and US$ in Bethlehem). Innovation: The innovation of the proposed OBA pilot is the provision of an output-based, targeted subsidy for waste primary collection performed by municipalities. At the same time, by allocating this subsidy in a special account, the pilot would be playing an important role in terms of strengthening the credit worthiness of the JSC-H&B, thus enabling private sector participation, which would in turn contribute to the long-term sustainability of the SWM system. Sustainability: The four year period is estimated to be sufficient to allow the JSC-H&B to achieve improvements in (i) cost recovering tariff through/implementation of tariff increases, and (ii) installing a mechanism to better collect solid waste fees which will make the system financially sustainable. Improving collection rates will in turn involve a significant upfront increase in service quality accompanied by a gradual increase in household contribution towards cost recovery. In parallel, technical assistance would be provided by the World Bank and IFC to achieve greater cost recovery level. For instance, World Bank-funded consultants are looking at the feasibility of pilot projects for waste collection optimization, waste minimization, and waste recovery for recycling and composting including the organization of waste pickers (scavengers) into commercially-viable service organizations. IFC will evaluate the possibility to further bundle primary collection service provision to fewer municipal actors to achieve economies of scale, and examine varying service levels to rationalize the service being provided across service areas. Scaling-up and replication: If the project yields successful results, the scaling up and/or replication to other poor pockets of the West Bank and in Gaza, as well as for other municipal infrastructure sectors could be envisaged. Economic cost-benefit: Residents will directly benefit from improved collection of waste from their house through an improved public health outcome. Surrounding natural resources will benefit from safe disposal and treatment of waste. A calculation of cost-benefits will be made determined during project preparation. Impacts relative to current situation: The main impact from a reduction in the illegal dumping of waste and increase in the share of waste delivered to the sanitary landfill is improved environmental conditions for the people living in the surrounding area. This impact will be calculated by (i) the increase in the number of people with access to improved services; and (ii) the potential reduction in GHG emissions resulting from the treatment of organic waste compared with the base case of disposal in wild dump sites. Project duration and anticipated schedule of GPOBA payments: The GPOBA grant is envisaged to be implemented over a period of four years beginning at the start of Al Minya Landfill operations (March 2013) or earlier. Line 8 of Table 1 above presents the anticipated GPOBA disbursements. II. SECTOR BACKGROUND Legally and institutionally, the solid waste sector is regulated by the Ministry of Local Government (MoLG) as part of their overall responsibility for municipalities, and by the PA Environmental Quality Authority (EQA). However, MoLG and EQA are still developing their capacity to properly regulate the sector. The efficient implementation of a SWM service thus mainly depends on the capacity of the municipalities, which is lacking in most cases. Further, the necessary funds to improve the system are not generally available. The World Bank has been providing support to the West Bank SWM sector since year The first intervention has been in Jenin Governorate with the Zahrat Al Finjan Landfill, which was successfully constructed in The World Bank s second involvement in the area is through the ongoing SWBSWMP. 4

5 The current population of the West Bank is estimated at about 2.5 million and generates a solid waste load of about 1.2 million tons per year (2010) 6. The number of unregulated dumpsites range from 190 to 420. The waste load is estimated to be primarily of domestic origin with provisions for commercial waste. There is no estimate of industrial and medical waste loads or composition, nor any record of how such waste is disposed. In Southern West Bank, the estimated annual waste generated is about 200,000 tons (550 tons/day); and municipal waste collection is in the range of 85-95%. 7 The estimated average municipal per capita waste load varies from 0.7 kg/capita/day in the Hebron governorate to about 0.8 kg/capita/day in the Bethlehem governorate (associated with the impact of tourism), and the average waste density is estimated on the order of 0.6 tons/cubic meter. Municipal waste composition consists on average of 46% organic, 9% paper and cardboard, 18% plastic, 2% glass, 1% metals and 24% other materials 8. The extent and composition of hazardous waste generated in the West Bank is not known. The PA has been aggressively addressing SWM issues. Its strategy hinges on three main pillars: (i) strengthening municipal service delivery capacity by enhancing the management and financial capabilities of local governments; (ii) encouraging municipalities to establish Joint Services Councils as regional institutions for the delivery of SWM services to realize economies of scale; and (iii) establishing three regional sanitary landfill sites to effectively serve the entire West Bank. The first regional landfill, located in Jenin and serving the Northern region was funded by the World Bank. The second regional system to service the southern West Bank region is being implemented by JSC-H&B with the support of the World Bank and IFC. 9 The third regional system to service the middle region (Ramallah and nearby municipalities excluding Jerusalem) is being funded by the German Bank for Development (KfW). Figure 1: Maps of West Bank The total annual waste generated in the project area is currently about 200,000 tons (550 tons/day) and is estimated to grow to 230,000 tons in 2020 and 300,000 tons in Although waste is mostly residential and commercial, there is indication that some hazardous waste is also present due to industries such as tanneries, textiles, paint, manufacturing and food processing, and hospitals. 6 Sweepnet, Baseline Data Inventory Report, Feasibility and Social Impact Study for the Southern West Bank Solid Waste Management Program, dated May 10, 2008, by DHV Consultants. 8 SENES Technical Report Draft. 9 The Jericho area is managed separately due to its location in the Jordan Valley depression--about 400 meters below sea level. 5

6 Although waste collection is high (80-95% of the waste is collected), the service itself is inefficient, which increases the primary collection costs, and disposal is unsanitary. Collection suffers from poor planning, high operation and maintenance costs associated with excess numbers of workers who are often hired as part of the social program, inadequate vehicles and bins, and limited financial resources. Similarly, waste is mainly disposed of at local dumpsites at the edge of towns and villages. These lands are often privately owned and leased to municipalities at nominal fees. Fee collection, depending on the adopted collection mechanism and/or the level of enforcement, may reach 100% in some municipalities or as low as 20% in others (the latter particularly in larger municipalities). The higher percentage is often found in municipalities with high levels of enforcement by municipalities staff or robust collection mechanisms such as prepaid electricity meters with built-in SWM fees. The proposed OBA pilot aims to allow for a gradual improvement in primary collection service efficiency and improved fee collection that will lead to an affordable and sustainable system, in line with the World Bank Group strategy for the region. III. PROJECT DESIGN The GPOBA subsidy will be provided to the JSC-H&B on behalf of the poor of the 33 member municipalities to help cover the payments due for collection, transfer and disposal services during the first four years of the operation of the planned landfill. Moreover, GPOBA would strengthen JSC-H&B s creditworthiness and enable private sector participation, which would in turn lead to a properly operated SWM system. The waste collection would be performed by the municipalities under the supervision of the JSC-H&B. The Al Minya Landfill and the three transfer stations are expected to be operated by a private operator, who will be selected through a competitive tender process facilitated by IFC. It is envisaged that the PPP contract will include specific KPIs (e.g. minimum waste volume guarantee provided to the private operator), with the JSC-H&B/municipalities will be taking the demand risk --which the GPOBA pilot will help address. The GPOBA subsidy is expected to lead to significant quality improvements to precede increases in household contribution. Also, as waste generation increases, but service efficiency improves, the per-ton cost is expected to decrease, resulting in improved affordability for households, which when combined with improvements in fee collection will result in the long-term sustainability of SWM service provision. IV. DEVELOPMENTAL IMPACT (INCLUDING ECONOMIC COST BENEFIT ANALYSIS) Impact: The project will contribute to improving the quality of SWM services and environmental conditions for thousands of households in poor areas in Southern West Bank. In particular, improved public health conditions will result from the closure of the uncontrolled dumpsites. This impact will be calculated based on (i) the number of people with access to improved services compared to baseline; and (ii) a potential reduction in GHG emissions, associated with the more efficient long haul transfer, closure of the Yatta dumpsite, and the possible implementation of recycling and composting which is being studied as part of the IFC due diligence process. Economic Rate of Return: Economic benefits will result from improved SWM service, including sanitary disposal of waste, which will improve public health and protect the surrounding natural resources. The ERR will be further determined during project preparation. As regards affordability, based on best estimates for monthly household wage (US$315) 10 and monthly expenditure (US$250 in Hebron, US$230 in Bethlehem), the project proposes a household contribution of US$30 per ton, which is considered affordable as it remains below the upper limit of the % threshold typically used to establish 10 Average daily wage in West Bank was NIS 98.6 in 2008, according to Palestinian Central Bureau of Statistics (PCSBS). 6

7 affordability for solid waste management 11 (see Table 2), although it is on the high end of the affordability range. Table 2: Household Affordability for SWM Fee* Area No. of Households (HH) Annual HH Income (US$) Proposed Waste Fee (US$/ton) Avg. Annual HH Waste Fee (US$) Waste Fee compared to Annual HH Income (%) Hebron Governorate ,000 $30 $51 1.7% Bethlehem Governorate 32,592 2,760 $30 $58 2.1% Total 126,843 * Based on assumption that a household generates approximately 1.7 tons of waste per year. The project is estimated to yield a profit margin of 15%, and sensitivity analyses are being conducted to determine the risk factors that could impact the private operator returns. V. FUNDING STRUCTURE AND SUBSIDY LEVEL The total project cost during the four year period is projected to equal US$23.3 million. The GPOBA subsidy is estimated to contribute approximately US$8 million over this period beginning around March At the household level, the projected waste fee amounts to US$30 per ton on a monthly basis which will be covered as follows: 66% from households (average over four years) 34% from GPOBA grant (average over four years) The fee will be set to cover the cost of primary collection, transport to transfer stations, operation and maintenance of the sanitary landfill, and administration of the landfill operator and JSC-H&B. The specific targets (to include service improvement and fee collection rate increase) to be verified independently and that will trigger the quarterly OBA subsidy disbursement to the JSC-H&B on behalf of the poor households of the 33 member municipalities, will be defined during the project preparation study funded by IFC. Over the four years of project implementation period, the GPOBA payments would be made in four declining annual tranches as follows (subsidy provided of the total service cost in any particular year): Year 1: 65% subsidy Year 2: 45% subsidy Year 3: 20% subsidy Year 4: 4% subsidy Table 3 summarizes project costs and funding structure: Table 3: Estimated GPOBA Pilot Costs (US$) Project Year GPOBA JSC-H&B Total Cost Year 1 3,900,000 2,100,000 6,000,000 Year 2 2,700,000 3,300,000 6,000,000 Year 3 1,150,000 4,500,000 5,650,000 Year 4 250,000 5,400,000 5,650,000 Total 8,000,000 15,300,000 23,300, Private Sector Participation in Municipal Solid Waste Services in Developing Countries, Sandra Cointreau-Levine. Urban Management Programme. The World Bank, DC

8 In order to achieve the outputs, JSC-H&B will implement a series of measures (inputs), including outreach and communication with stakeholders, implementing adequate billing procedures, such as incentivizing staff to perform their billing task, outsourcing the collection to the private sector, or implementing capacity building programs to train the staff of the municipalities. The JSC-H&B will also analyze the efficiency of new billing mechanisms such as linking waste fees to the bill of prepaid electricity meters. Given that fee collection is 34% of the billed amount, resulting in only 22% final cost recovery, 12 a significant improvement in billing and fee collection at the municipal level is needed. The GPOBA grant intends to help achieve this improvement, so that, at the end of the OBA subsidy, municipalities are in a position to pay for the full SWM service. Based on the Jenin experience where revisions in payment mechanisms (through prepaid electricity meters) and enforcement procedures allowed the municipality to reach 90% cost recovery, it is expected that waste fee cost coverage could reach a similar level in Southern West Bank. Given the larger number of municipalities participating in this project, adopting a similar approach is expected to require three to four years to deliver similar results. In addition, the new tariff system and enforcement procedures for fee collection envisaged by the new Waste Bylaw being drafted by the National Solid Waste Team 13 should support improved cost recovery. VI. PROJECT IMPLEMENTATION ARRANGEMENTS The JSC-H&B and its 33 member municipalities will be responsible for the primary collection of waste in the project area. Municipalities will be considered the clients of the JSC-H&B and will pay the JSC-H&B per ton of waste collected, transported and disposed at the Al Minya Landfill. The project will be managed by the existing Technical Operations Unit (TOU) of the JSC-H&B. The TOU has participated in the design and construction of the SWM system, is currently closing all illegal and dumpsites and is overseeing the design of the new sanitary landfill. In addition, the TOU has already developed the program for the temporary transfer of solid waste to the Yatta dumpsite until the proposed sanitary Al- Minya landfill is completed. Figure 2 describes the envisaged implementing and funds flow arrangements, with GPOBA funds disbursed through a Designated OBA Account opened at the MoF Central Treasury and operated by the JSC-H&B TOU. As per usual World Bank procedure, the Grant Agreement signatory would be the MoF. However, an alternative arrangement of having the JSC-H&B (as service provider under the GPOBA project) as signatory is also being explored. This model has been used in several GPOBA grants that were provided to a non-sovereign party through the provision of a Ministry of Finance No-Objection Letter ( Government Information Letter ). Figure 2: Implementing Arrangements 12 World Bank Project Appraisal Document for the Southern West Bank Solid Waste Management Project, April 21 st, Average billing coverage is about 58% of the estimated full cost recovery level. 13 The Solid Waste National Team comprises MoLG, EQA, Ministry of Panning, and other relevant government stakeholders. 8

9 VII. RISK ASSESSMENT Table 4 summarizes the risks and mitigation measures to reduce them: Table 4: Risk and Mitigation Measures Item Risk Mitigation Measures 1 Demand and willingness to pay risk - Beneficiaries may not be willing to pay Improved SWM service and awareness activities should increase willingness to pay. for SWM services Improved enforcement of fee collection by the JSC-H&B should reduce this risk. 2 Affordability Risk Risk of Municipalities not being able to pay JSC- Improvements in the primary collection and transportation system to reduce costs. H&B for the improved SWM service Improvements in tariff and collection system to increase the fees collected. 3 Commitment / Implementation Risk - Municipalities may not commit to using the new SWM facilities and instead continue to use illegal dumpsites MoLG will apply laws and regulations to prevent illegal dumping which will be monitored by EQA. The Solid Waste National Team is currently drafting a Waste ByLaw to regulate these matters. Future coordination between JSC-H&B and municipalities (e.g. purchasing new collection vehicles) will be ensured to consolidate the collection service under JSC-H&B who would ultimately perform SWM services. Recommendation as to what the coordination will entail will be made under IFC-funded Technical Assistance. 4 Sustainability Improved quality of services and reduced operating costs would increase consumer willingness to pay, thus making the project financially sustainable once the OBA subsidies run out. Effective collection mechanisms (e.g. linking fee to electricity bills, ease of payment) will be established to 9

10 5 Risk of the JSC-H&B and Municipalities may not have sufficient capacity to implement the recommended service and fee collection improvements 6 Security situation may deteriorate and prevent part of the achievement of OBA targets (particularly related to transport of waste due to possible movement restrictions) ensure targeted 95% cost recovery for both operating costs and cost of final disposal. IFC-funded Technical Assistance to develop actionable plan with buy-in from key stakeholders. IFC and WB to work with JSC-H&B in obtaining additional support/ta if necessary during implementation. All permits from the Israeli side have been acquired for both construction and operating activities in Zone C, which reduces the risks of operation and mobility of staff in the area, and thus the risk to implementation of SW service Clear understanding of typical movement restrictions during periods of instability will be taken into account when designing action plans to further reduce potential impact on project implementation. VIII. IMPLEMENTATION TIMELINE The proposed preparation timeline is as follows: OBA Project Preparation August-September 2012 GPOBA Funding Commitment (PoE) November 2012 Grant Agreement Signed January 2013 Grant Effectiveness March 2013 The anticipated implementation timeline is March 2013 to January VIII.1 Technical Preparation Technical assistance provided by the World Bank and IFC will be used to strengthen the technical capacity of the JSC-H&B and municipalities for the waste fee collection mechanism. VIII.2 Fiduciary and Safeguard Appraisal The World Bank has worked with the JSC-H&B and its technical unit for the implementation of the construction works at Al Minya Landfill. The Bank s SWM environmental safeguard procedures have been followed for the construction of the landfill, including the preparation of: (i) an Abbreviated Resettlement Action Plan (ARAP); and (ii) an Environmental and Social Management Plan (ESMP). Moreover, JSC-H&B has already contracted a qualified social specialist to oversee environmental safeguards aspects. No reputational concerns have been pinpointed with the entities and team involved. IFC fiduciary and safeguards will also apply. IFC will ensure that its safeguards will be applied to the SWM system and project. Regarding fiduciary aspect, JSC-H&B has in place a financial management system acceptable to the World Bank and is already applying Bank guidelines for the procurement of works, goods, and consulting services. The TOU is operational and functioning effectively and to the satisfaction of the World Bank and is very well respected by other donors as well. VIII.3 GPOBA Funding Implementation and Disbursement 10

11 A GPOBA Grant Agreement would be signed as soon as possible, as all existing illegal and unsanitary dumpsites will soon be closed and construction of the Al Minya Landfill is approaching completion (March 2013). The IFC PPP project could begin as early as March 2013, at which time the GPOBA grant would need to be effective. The GPOBA funding structure envisages payment to the JSC-H&B on behalf of the low income households of the 33 member municipalities. Payments to the JSC-H&B would be made on a quarterly basis, upon verification that the collection service is being provided satisfactorily in the project area and the related the pre-agreed indicators. IX. MONITORING AND TRACKING INDICATORS Several performance indicators will be identified to monitor the project performance in terms of waste collection, waste transfer and final disposal, including: Average frequency of primary service collection per month or week (some areas are only served infrequently). Other indicators of service levels TBD Tons of waste received at Al-Minya Landfill and transfer stations Waste fee collection rate Number of people receiving improved SWM services All indicators will be will refined based on the findings of the IFC-TA work. Table 6: Indicator Tracking Table Year (Calendar) Waste tonnage per month delivered to Landfill/Transfer Stations Waste Fee Collection Rate # of people benefiting from improved waste collection services Average frequency of service provision per week/month Grant Disbursement (US$) Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Baseline (before closure of wild dumpsites) N/A 22% Zero 3 times/week N/A , , , , , , , , ,900,000 2,700,000 1,150, ,000 11