Document of The World Bank

FOR OFFICIAL USE ONLY

Report No: 71882-HT

PROJECT PAPER

ON A

PROPOSED ADDITIONAL GRANT

IN THE AMOUNT OF SDR 23.3 MILLION (US$35 MILLION EQUIVALENT)

TO THE

REPUBLIC OF HAITI

FOR AN

INFRASTRUCTURE AND INSTITUTIONS EMERGENCY RECOVERY PROJECT

September 10, 2012

Sustainable Development Department Caribbean Country Management Unit Latin American and the Caribbean Region

This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated

document will be made publicly available in accordance with the Bank’s policy on Access to Information.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective as of July 31, 2012)

Currency Unit = Haitian Gourde (HTG) 42.55 HTG = US$1 US$0.6629 = SDR 1

FISCAL YEAR

October 1 – September 30

ABBREVIATIONS AND ACRONYMS

ACDI/CIDA AF BTEB BRH CIAT CNMP CSCCA

Canadian International Development Agency Additional Financing Technical Unit for Building Evaluations and Dissemination of Best Practices of Construction (Bureau technique d'évaluation des bâtiments) Haiti Central Bank (Banque de la République d’Haiti) Inter-ministerial Committee for Territorial Planning (Comité Interministériel d'Aménagement du Territoire) Procurement Regulatory Agency (Commission Nationale des Marches Publics) Supreme Audit Institution (Cour Supérieure des Comptes et du Contentieux Administratif)

EA Environmental Assessment EIA Environmental Impact Assessment EMP Environmental Management Plan ESMF Economic and Social Management Framework EU European Union FM FY GoH IADB ICAO ICB IDA

Financial Management Fiscal Year Government of Haiti Inter American Development Bank International Civil Aviation Organization International Competitive Bidding International Development Association

IGF IHSI IIERP ISN LAC

Financial Inspectorate (Inspection Générale des Finances) Haitian Statistics Institute Infrastructure and Institutions Emergency Recovery Project Interim Strategy Note Latin America and the Caribbean

MEF MPCE MTPTEC NCB

Ministry of Economy and Finance (Ministère de l’Economie et des Finances) Ministry of Planning and External Cooperation (Ministère de Plan et de la Coopération Externe) Ministry of Public Works, Transport, Energy and Communication (Ministère des Travaux Publics, Transports, Énergie et Communications) National Competitive Bidding

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OM OMRH

Operations Manual Office of Human Resources (Office de Management et des Ressources Humaines)

ORAF Operational Risk Assessment Framework OCPAH PCU

Association of Chartered Public Accountants of Haiti (Ordre des Comptables Professionnels Agréés d’Haiti) Project Coordination Unit

PDO PEFA PFM PPA PTDT PRSP

Project Development Objective Public Expenditure and Financial Accountability Public Financial Management Project Preparation Advance Transport and Territorial Development Project Poverty Reduction Strategy Paper

QCBS Quality Cost Based Selection RAP Resettlement Action Plan RPF SA

Resettlement Policy Framework Social Assessment

SBD Standard Biding Document SDR Special Drawing Rights SYSDEP SYSGEP TAP TOR

Expenditure Information System (Système d’Informatisation des Dépenses) Public Investment Information System (Système de Gestion de Projets) Technical Assistance Program Terms of Reference

UCE UCP UEP ULCC UN

Unité Centrale d’Exécution (Central Implementing Unit) Unité de Coordination de Projet (Project Coordination Unit) Design and Planning Unit (Unités d’Études et de Planification) Anticorruption Agency (Unite de Lutte Contre la Corruption) United Nations

UNDP UNESCO USAID USD USGS

United Nations Development Program United Nations Educational Scientific and Cultural Organization United States Agency for International Development United States Dollar United States Geological Survey

Vice President: Hasan A. Tuluy Special Envoy: Alexandre V. Abrantes

Sector Manager: Aurelio Menendez Sector Manager: Arturo Herrera

Task Team Leader: Co-Task Team Leader

Pierre Xavier Bonneau Colum Garrity

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HAITI

INFRASTRUCTURE AND INSTITUTIONS EMERGENCY RECOVERY PROJECT

CONTENTS

Contents Additional Financing Data Sheet ...................................................................................................................... 5

I. Introduction ............................................................................................................................................ 8

II. Background and Rationale for Additional Financing (AF) in the amount of US$35 million ......... 9 A. Country Context ............................................................................................................................. 9

B. Sectoral and Institutional Context ................................................................................................ 10

C. Original Project Background ........................................................................................................ 11

D. Status of Implementation .............................................................................................................. 12

III. Proposed Changes .............................................................................................................................. 19

IV. Appraisal Summary .......................................................................................................................... 20 A. Project Description: Components and Costs ............................................................................... 20

B. Institutional and Implementation Arrangements .......................................................................... 21

C. Technical, Economic, Environmental and Social Appraisal ........................................................ 22

Annex 1: Results Framework and Monitoring........................................................................................... 30

Annex 2: Operational Risk Assessment Framework (ORAF) .................................................................... 37

Annex 3: Detailed Description of Modified Project Activities ................................................................. 42

Annex 4: Revised Estimate of Project Costs ............................................................................................. 49

Annex 5: Revised Implementation Arrangements and Support ................................................................ 50

Annex 6: Environmental and Social Safeguards Framework .................................................................... 56

Annex 7: Road Rehabilitation Map ........................................................................................................... 64

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HAITI

INFRASTRUCTURE AND INSTITUTIONS EMERGENCY RECOVERY PROJECT

ADDITIONAL FINANCING DATA SHEET

Basic Information - Additional Financing (AF) Country Director: Alexandre Abrantes Sector Manager/Director: Aurelio Menendez; Arturo Herrera//Ede Jorge Ijjasz-Vasquez; Rodrigo A. Chaves Team Leader: Pierre Xavier Bonneau, Colum Garrity Project ID: P130749 Expected Effectiveness Date: December 25, 2012 Lending Instrument: ERL Additional Financing Type: ERL

Sectors: Central government administration (34%), Solid waste management (17%), Rural and Inter-Urban Roads and Highways (26%), Aviation (15%), Public administration- Transportation (8%) Themes: Other public sector governance (42%), Rural services and infrastructure (26%), Natural disaster management (17%), Other urban development (15%), Environmental category: A Expected Closing Date: June 30, 2016 Joint IFC: No Joint Level: No

Basic Information - Original Project Project ID: P120895 Environmental category: A Project Name: Infrastructure and Institutions Emergency Recovery Project (IIERP)

Expected Closing Date: June 30, 2013

Lending Instrument: ERL Joint IFC: No Joint Level: No

AF Project Financing Data [ ] Loan [ ] Credit [ X ] Grant [ ] Guarantee [ ] Other: Proposed terms: 100% IDA grant

AF Financing Plan (US$m) Source Total Amount (US $m)

Total Project Cost: Cofinancing: Borrower: Total Bank Financing: IBRD IDA New Recommitted

35.0 million

35.0 million

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Client Information Recipient: Republic of Haiti Responsible Agency: Ministry of Public Works, Transport and Communications, Ministry of Economy and Finance Unité Centrale d'Exécution, Rue Wilson Haiti Contact Person: Gary Jean Telephone No.: (509) 3446-3165 Email: garijean@gmail.com

AF Estimated Disbursements (Bank FY/US$m) FY 2013 2014 2015 2016 Annual 9 13 10 3 Cumulative 9 22 32 35

Project Development Objective and Description Original project development objective: The Project Development Objective is to support the Recipient in its early sustainable recovery efforts from the effects of the Emergency, through selected interventions aiming at contributing to rebuilding key institutions and infrastructure. Revised project development objective: The Project Development Objective is to support the Recipient in its sustainable recovery efforts from the effects of the Emergency, through selected interventions aiming at contributing to rebuilding key institutions and infrastructure. Project description: Component 1: Restoring key economic and financial functions of the Recipient Component 2: Carrying out emergency rehabilitation of selected public infrastructure Component 3: Providing institutions support, reconstruction planning and project management.

Safeguard and Exception to Policies Safeguard policies triggered: Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.11) Indigenous Peoples (OP/BP 4.10) Involuntary Resettlement (OP/BP 4.12) Safety of Dams (OP/BP 4.37) Projects on International Waterways (OP/BP 7.50) Projects in Disputed Areas (OP/BP 7.60)

[ X ]Yes [ ] No [ X ]Yes [ ] No [ ]Yes [ X ] No [ ]Yes [ X ] No [ X ]Yes [ ] No [ ]Yes [ X ] No [ X ]Yes [ ] No [ ]Yes [ X ] No [ ]Yes [ X ] No [ ]Yes [ X ] No

Does the project require any waivers of Bank policies? Have these been endorsed or approved by Bank management?

[ ]Yes [ X ] No [ ]Yes [ X ] No

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Conditions and Legal Covenants: Financing Agreement Reference

Description of Condition/Covenant Date Due

Article IV, 4.01. The Operational Manual, including therein the Environmental and Social Management Framework (ESMF), shall have been adopted on behalf of the Recipient satisfactory in form and substance to the Association

Before effectiveness

Schedule 2. Section 1.D.1

The Recipient shall ensure that the Project and its respective parts are carried out by MEF and MTPTEC in accordance with the ESMF, as prepared and maintained for the Project, satisfactory at all times to the Association

Prior to commencement of any works

Schedule 2. Section 1.D.2

The Recipient shall carry out the Project in accordance with the ESMF. The Recipient shall prepare, consult and disclose an Environmental Management Plan, satisfactory to the Association, for the relevant part of the Project and, therefore, the Recipient shall implement the relevant part of the Project in accordance with said Environmental Management Plan.

Prior to commencement of any works

Schedule 2. Section 1.D.3

In the event that Involuntary Resettlement is involved (as determined by the Association) in relation with the Project, the Recipient shall prepare, consult and disclose a Resettlement Action Plan, satisfactory to the Association, for the relevant part of the Project, the Recipient shall implement the relevant part of the Project in accordance with said Resettlement Action Plan.

Prior to commencement of any works

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I. Introduction

1. This Project Paper seeks the approval of the Executive Directors to provide an Additional Financing (AF) Grant in the amount of SDR 23.3 million (US$35.0 million equivalent) to the Republic of Haiti for the Infrastructure and Institutions Emergency Recovery Project – IIERP (P120895; IDA Grant No. H5510-HT). 2. The proposed AF would scale up a well-performing project (US$65 million equivalent ongoing) and finance modified project activities for all three components focused on recovery and reconstruction following the January 12, 2010 earthquake. It would support additional activities which are expected to enhance the original project’s impact and development and address pending challenges to overall sustainability of the reform process. 3. The proposed AF would not entail any substantial change to the IIERP development objective. Institutional arrangements for project implementation of the AF would also remain unchanged. The project will continue to be implemented by Ministry of Economy and Finance (MEF) and the Ministry of Public Works, Transport and Communications (MTPTEC). For Component 1, Financial Inspectorate (IGF, part of MEF) would provide strategic advice to the MEF implementing agency, Unité de Coordination de Projet (MEF-UCP) MTPTEC-UCE, given IGF’s overall mandate to provide audits and recommendations of all government ministries and agencies. 4. The grant closing date of the Original Project would be extended for three years from June 30, 2013 to June 30, 2016, to align the closing date with the proposed additional activities. The Environmental Category A is retained due to the continuation of one activity of a Category A nature. The proposed AF would not undertake any additional activities of a Category A nature and would not trigger any additional safeguards. The Operational manual would be updated to reflect current circumstances, building on lessons learned from successful implementation of the IIERP to date. 5. Specifically, the proposed AF would help finance the following modified and additional activities:

a. Improve efficiency and transparency in public resource use and strengthen Haiti’s

public sector management systems to improve overall governance and anticorruption and enhance the institutional foundation for continued reconstruction and post-reconstruction recovery;

b. Ensure continuity of existing critical activities related to the continued reconstruction phase, including the restoration of key economic and financial functions of the GoH, and the rehabilitation of selected public infrastructure; rehabilitate the aviation safety equipment, and foster further economic recovery through continued activities at the Trutier Debris Processing Facility, as well as rehabilitate existing roads between Cap Haitien and Labadie, and between Milot and Cap Haitien, both catalytic investments for tourism development;

c. Continue the provision of support to the Ministry of Public Works, Transport, Energy and Communications (MTPTEC) to manage the ongoing recovery and reconstruction

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process, and incremental costs of project administration, supervision, monitoring and evaluation.

II. Background and Rationale for Additional Financing (AF) in the amount of US$35 million

A. Country Context

6. Two and a half years after a massive earthquake ravaged Haiti, reconstruction remains urgent to address the impacts of the disaster. The earthquake killed 230,000 people, injured 300,000, and displaced 1.5 million. It resulted in damages and losses of US$7.9 billion (120% of GDP) and in US$11.3 billion in estimated reconstruction needs. Massive efforts have been made by individuals, communities, Government and donors to respond, but much remains to be done to improve living conditions and effect sustainable change. Experience of the reconstruction process has also made clear that increasing the capacity of Haitian institutions and improving overall governance are critical to achieving sustainable results. Striking a balance between speed and sustainability remains a considerable political, economic, financial and organizational tour de force for Government and donors alike.

7. The earthquake struck a country already facing major development challenges and further weakened the ability of the Haitian State to respond. With a GDP per capita of US$656 in 2009, one of the lowest in the World, Haiti is also one of the most unequal countries in the World (Gini coefficient of 0.59). Over half of its population of 10 million was estimated to live on less than US$1 per day, and 78 percent on less than US$2 per day in 2001 (last available data). Any poverty gains from the country’s average real growth of 2.2 percent p.a. from 2004 to 2009 are likely to have been eradicated by the earthquake. The country ranks 158th out of 187 in the 2011 Human Development Index, and has suffered from repeated exogenous and political shocks. In 2008, rising food and fuel price hikes led to riots and the fall of the Government and multiple tropical storms and a hurricane year caused losses estimated at US$900 million (or 15 percent of GDP) the same year. With the disappearance of one third of the civil service, the collapse of all but one Ministry, and the destruction of much of the service delivery infrastructure in and around Port au Prince, the earthquake further weakened the Government’s ability to respond.

8. In addition to facing high poverty levels, Haiti’s development has historically been hampered by fragility and characterized by social fracture. Over many years, deep social and economic inequities, intense concentration of wealth and power in the hands of a few, and a lack of social justice and of the rule of law have repeatedly led to spikes of political and non-politically motivated violence. Longstanding lack of transparency and the absence of service delivery have led to citizens’ low trust in government and severely damaged the credibility of the State. Governance challenges – including limited rule of law, the absence of clear rules for market-based competition and corruption– are major constraints on growth and investment and have hampered Haiti’s development. While this historical context presents substantial challenges for reconstruction and medium-term goals, Gallup’s most recent yearly perception poll shows Haitians’ trust in Government at its highest level since polling began in 2006 and on the rise by 30% compared to 2010.

9. This surge in confidence and improved political consensus is encouraging in the wake of the level of political uncertainty of 2010 and 2011. Presidential and legislative elections launched in November 2010, were concluded in May 2011, with the swearing in of President Michel Joseph

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MARTELLY. He was the first opposition candidate in Haiti’s history to accede to the post by democratic transition. However, while the President received a strong majority of votes cast, the opposition retained control of Parliament and it took five months to confirm the first Prime Minister, who resigned five months into his term in February 2012. In 2012, although contained a movement to re-establish the Haitian Army (disbanded in 1995) caused tensions. The movement appears to have abated and, under Government pressure, the idea abandoned. Four months were needed to build consensus around the current Prime Minister, Laurent Lamothe. Mr. Lamothe’s Government and program were approved in May 2012 and appear to benefit from broader political and popular support.

10. Despite these difficult conditions, much progress has been made since January 2010. Donors have committed US$8.7 billion in humanitarian and project investments of which US$5.8 billion have been disbursed, and have provided US$1 billion in debt relief. On the ground, progress is visible. Most earthquake affected areas have been cleared of rubble, of 1.5 million internally displaced people (IDPs) about 910,000 have left the camps and relocated. Government, which first struggled to resume its critical functions, is taking initiative to address longstanding service delivery gaps. Many schools have been reconstructed and during the 2011/2012 school year, Government has undertaken to pay fees for 900,000 children while donors financed free access to education for another 230,000 children. Cholera is being combated effectively, social safety net programs are being initiated, agriculture investments are being stepped up, electricity sector reform has been launched, and substantial efforts are being made to attract foreign investors. The World Bank Group has contributed substantially to the achievement of these results, as set out below, and made significant IDA investments for the years to come.

11. Nevertheless, much remains to be done. Important infrastructure in earthquake affected areas is still being rebuilt, including public buildings, schools, hospitals, housing, electricity, and water systems. Access to basic services and private sector investment, already very limited before the earthquake, need to be substantially expanded, if Haiti is to achieve and sustain productive growth rates and see social conditions improve and poverty levels drop. Haitian institutions need to be substantially strengthened to ensure that poor governance and corruption do not stand in the way of the achievement of Haiti’s medium-term objectives.

B. Sectoral and Institutional Context

12. Haiti’s history of political instability has weakened its institutions and governance

mechanisms, contributing to fiscal, regulatory and planning constraints. The January 2010 earthquake further deepened the existing governance challenges by severely diminishing already weak government capacity. The Government of Haiti (GoH) requires support to develop strategic policies to coordinate across line ministries and implement monitoring and evaluation tools for a successful development program.

13. Countries that have experienced major natural disasters need assistance to restore the main functions of the State. Institution building is a gradual and difficult process and a precondition for lasting change in Haiti. It can only be achieved with strong and sustained commitment from Government and donors. Despite demonstrating improvements in economic governance in the last

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several years, weaknesses in public sector management remain and hamper sustained economic growth and poverty reduction. Public financial management capacity will also help maximize benefits from donor support, which is expected to decline to pre-earthquake levels in the medium-term. The proposed AF would continue to build institutional capacity and public financial management systems to improve the tracking of public expenditures, public procurement, public sector and enterprise management, investment planning and human resource management and by establishing a culture of transparency and accountability that aims to reduce corruption. 14. Infrastructure investments remain critical to Haiti’s recovery and its social and economic development. With about 80 percent of the country’s traffic being by land, Haiti has a limited road network of about 3,400 km, including 700 km of national roads, 1,500 km of departmental roads, and 1,200 km of rural roads. Due to lack of maintenance, the size of the officially registered tertiary network has decreased by more than half between 1991 and 2004. The Bank has been supporting the transport and infrastructure sectors since 2006, and has focused on critical spot interventions since the earthquake. Each of these investments has aimed at increasing the resilience of the system in key damaged and vulnerable areas. This has ensured continued access and generated positive impacts. The proposed AF would continue this approach to foster economic growth and enhance the resilience of the Haitian road network to natural hazards.

C. Original Project Background

15. IIERP is financed through IDA Grant No. H5510-HT in the amount of SDR 41.9 million (US$65 million equivalent), approved by the Board on March 1, 2010. The corresponding Financing Agreement (H551-0-HT) was signed on March 22, 2010, and became effective on April 23, 2010. The original closing date is June 30, 2013. 16. The original Project Development Objective (PDO) is to support early sustainable recovery efforts from the effects of the Emergency, through selected interventions aiming at contributing to rebuilding key institutions and infrastructure. The achievement of the PDO is supported by the following three project components: 17. Component 1 – Restoring Key Economic and Financial Functions of the Recipient, providing support pertinent to: (a) enable the reinstatement of MEF’s basic functions, such as, inter alia, budget formulation, execution and reporting; and (b) carry out activities to assist in fully re-establishing, including through relocation or physical structure rehabilitation, and thereafter operationalizing, through, inter alia, provision of goods and equipment and technical assistance, key financial management, control and expenditure institutions of the Recipient. 18. Component 2 – Emergency Rehabilitation of Selected Public Infrastructure, supporting: (a) rehabilitation or reconstruction activities of key institutional and transport infrastructure through the piloting of sound social and environmental practices; and all related studies and supervision activities; (b) strategic studies related, inter alia, to infrastructure reconstruction based on specific infrastructure designs intended to increase the resilience of rebuilt infrastructure. 19. Component 3 – Institutional Support, Reconstruction Planning and Project Management, providing support to: (a) restore the functioning capacity of key institutions of the

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Recipient’s crisis governance framework; (b) carry out planning activities for the short, medium and long-term reconstruction phases; (c) carry out institutional strengthening activities; (d) finance Project management activities; (e) establish and operate an engineering clearinghouse in MTPTEC to manage the technical knowledge deriving from assessments carried out by national and international institutions and thereafter to disseminate good engineering practices and innovative solutions; and (f) assist the Recipient with preliminary basic recovery activities. D. Status of Implementation

20. The implementation of the IIERP is proceeding well, with both the Implementation Progress (IP) and Development Objective (DO) rated consistently Satisfactory for the last 12 months. The project has disbursed a total of US$45.86 million (or 71 percent) as of September 7, 2012. Works under the original project are expected to be complete by the original project closing date of June 30, 2013. Moreover, the project has complied with all environmental, social and fiduciary safeguard requirements, and both financial management and procurement has been carried out in accordance with the Bank’s Procurement Guidelines. 21. The Project’s “Original Activities” were those originally planned in the existing project, Emergency Project Paper, Infrastructure and Institutions Emergency Recovery Project (Report: 53072-HT) and “Alternative Activities” were alternative activities financed by the same project, such as the financing of additional computer equipment for ministries and agencies; regulatory reform and modernization to create an insurance regulatory body; supporting the audit capacity of the anticorruption agency (ULCC); upgrading customs software to international standards; and financing 430,000 Structural Damage Assessments, 500 engineers and 2,500 masons as part of reconstruction or repair of damaged public buildings.

22. The IIERP included a Project Preparation Advance (PPA) of US$15 million. The PPA has been fully disbursed and has been implemented satisfactorily. All activities are complete and the PPA was closed on July 18, 2012, and would not receive additional funds under the proposed AF. Main achievements to date

23. The original project continues to progress well in all components. To date, Component 1 has supported, inter alia: (i) the provision of prefabricated units for the Direction Générale des Impôts (DGI), Direction Générale du Budget (DGB), Treasury and DEE, emergency support for civil service payroll system and the purchase of emergency equipment; (ii) the reorganization and filing of Treasury’s archives, salvaged from the buildings collapsed in the earthquake; (iii) the finalization of the insurance regulatory law to create an insurance regulatory body; (iv) the upgrading of SYDONIA World System for Customs and putting in place an information system for human resource management for the Tax and Customs Administrations; (xi) the creation of a website and development of a database for the CNMP’s information system on public procurement.

24. Component 1 has also contributed to Haiti’s progress in budget preparation, budget execution and budget control during the past two years. On budget preparation, the Ministry of Finance has adopted a manual that sets clear and transparent guidelines for budget preparation. On budget execution, the Government has reduced significantly the use of special accounts, and it is

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expected that there will be further improvements with the adoption of a manual for budget preparation and execution, including a more systematic enforcement of internal procedures for expenditure processing. On budget control, the Government has arguably made progress. The Treasury is now submitting to the Court of Accounts the government accounts within the legal timeframe, and the Court of Accounts has significantly reduced the backlog of audits of government accounts. It has finalized the 2008-09 report and has sent to the Treasury the preliminary draft for the 2009-10 report. While acknowledging the progress achieved in managing public finances and procurement, several challenges remain, including, but not limited to: (i) improving the expenditure tracking system to enhance budget execution monitoring, and managing the flow of resources to ensure timely availability of funds; and (ii) improving procurement practices and standards by supporting the effectiveness of the procurement legal framework and the institutional set up.

25. Component 2 has supported critical emergency recovery activities in the immediate aftermath of the earthquake, and continued reconstruction activities over the last two years. On building assessments, more than 430,000 buildings were assessed and more than 500 engineers and 2500 masons were trained, most of whom are still actively working on reconstruction activities with the MTPTEC, or elsewhere. On transport, the project undertook: (i) urgent repairs on Route Nationale 4 (RN4), the primary corridor between Port-au-Prince and Jacmel, ensuring continued access during the immediate emergency response phase; (ii) the rehabilitation of 30km of Route Nationale 2 (RN2) and RN4; and (iii) prepared design studies for long-term rehabilitation of roads, and the construction of the Rivère Fauché bridge situated on RN2. On debris and canal cleaning, the Truitier pilot debris treatment center has processed approximately 700,000 m3 of rubble to date, facilitating continued debris removal activities for complementary partner operations, and undertook canal cleaning operations, which prevented major flooding in downtown tent-cities with over 110,000 m3 of materials extracted from 5 primary canals. Finally, on aviation safety equipment, the project financed the completion of an assessment report of safety infrastructure requirements at Port-au-Prince Toussaint Louverture International Airport (PAP) and technical specifications for new equipment/facilities conducted by the Technical Cooperation Bureau of the International Civil Aviation Organization (ICAO).

26. Component 3 continues to progress well. It has supported to date, (i) the establishment of the Technical Unit for Building Evaluations and Dissemination of Best Practices of Construction (Bureau Technique d'Évaluation des Bâtiments - BTEB) at MTPTEC and the hiring and training of 70 engineers and technical staff to reinforce the ministry’s capacity to handle the reconstruction process, and to promote the diffusion of construction best practices; (ii) the elaboration of technical guidelines, including a Repair Guide for Small Buildings, a Retrofit Guide for Small Buildings, and a Manual for Seismic Resistant Construction of Small Buildings; (iii) the elaboration of a strategic document for territorial strategies for reconstruction – Haiti Tomorrow – with the Inter-ministerial Committee for Territorial Planning (CIAT); (iv) analytical and economic studies for the development of the Artibonite department and Plateau Central region; (v) technical and logistical support to CIAT; and (vi) operating costs of the implementing unit, Unité Centrale d’Exécution (UCE). The original project no longer requires the services of a fiduciary agent to manage financial management and procurement processes on behalf of the Government, and this responsibility has now successfully transferred back to Government agencies as of February 2012.

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27. A summary of activities financed, alternative activities financed, where necessary and main achievements can be found below in Table 1.

Table 1: Main Achievements of Original Project Component 1: Restoring Key Economic and Financial Functions of the Recipient Original Activities Additional Financing Activities Activities Status Alternative Activities1 Activities Budget (US$

equivalent) Carry out activities to assist in fully re-establishing, including through relocation or physical structure rehabilitation, and thereafter operationalizing, through, inter alia, provision of goods, equipment and technical assistance to key institutions of the Recipient; Enable the reinstatement of MEF’s basic functions, such as budget execution (including wages), monitoring, control, tax collection

Pillar 1.1. Construction of small customs building at airport

Construction of a small customs building at airport.

Add’l 1,500,000

Pillar 1.2. Enhance accountability and efficiency (of inst/govt systems)

Execution of critical budget expenditures, including budget preparation, execution and reporting.

Emergency support for civil service payroll system; emergency equipment purchased; information system for human resource management for the Tax and Customs Administrations. Treasury’s archives salvaged from the buildings collapsed in the earthquake, have been reorganized and filed by an archivist.

Regulatory reform & modernization: Insurance regulatory law & law to create an insurance regulatory body finalized; support to DEE in MEF to evaluate the economic function of the Ministry; Consultant to support ULCC’s finance section & reinforce auditing. Upgrading of SYDONIA World System for Customs Planned: Organization of CSCCA’s archives/records

Fiscal reporting & execution & linking GoH PFM systems (e.g., investment, current expenditure); Treasury links to sector ministries; support accounting (OCPAH); strengthen revenue/tax customs; operationalize public investment systems with implementation units in ministries (UEPs); improve internal and external audit & control (CSCCA/IGF).

Add’l 4,800,000

Provision of Prefabricated -Premises for Public Finance Institutions Pillar 1.3. Enhance transparency & participation

Prefabricated units Prefabricated units erected for the Direction Générale des Impôts (DGI), Direction Générale du Budget (DGB), Treasury and DEE.

Enhance access to information & data (eGov); improve data collection, statistics & records management; support anticorruption activities of the anticorruption agency (ULCC) & improve links to procurement (CNMP)

Add’l 1,600,000

Project Management/ studies or training to strengthen Haiti’s governance and institutional capacity

Add’l 1,000,000

1 “Original Activities” refers to those originally planned in the existing project, Emergency Project Paper, Infrastructure and Institutions Emergency Recovery Project (Report: 53072-HT), Washington, DC: March 1, 2010. “Alternative Activities” refers to alternative activities financed by the same project. The right two columns refer to activities proposed to be financed from the Additional Financing.

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Provision of office space

Rehabilitation of the National Statistics Office

Possibly do some works around the BNP building as per discussions with the Minister of Finance.

Provision of Equipment and Assistance to Restore Information Technology & Systems for Public Finance and Banking System

Pillar 1.4. Improve equity & responsibility

IT and other equipment needs for MEF, Central Bank, CSCCA, Statistical Office, Treasury, Tax Admin, Customs.

IT, electrical, & office equipment purchased & delivered to 11 beneficiary institutions to replace equipment lost in the earthquake & strengthen their capacity. Purchase of all equipment for the implementation of the post-earthquake household survey. Restoration of financial network (Wimax) of the Central Bank (ongoing) 11 vehicles provided to IHSI, CNMP, MEF and UCP to replace vehicles lost in the earthquake and strengthen their operational capacity.

Additional servers & computer equipment purchased for CNMP, DGI and AGD. Equipment and goods for the Ministry of Commerce and Industry’s temporary (2 year) location while their new office is being built.

Improve procurement systems, including links to ministries & the national procurement regulatory body (CNMP); enhance civil service capacity, e.g, via improved HR data (OMRH); improve regulatory rules & laws for greater equity/access.

Add’l 3,100,000

Refurbish MEF, Min of Planning, Tax Admin, CNMP, CSCCA, National Stats

Mostly complete. Additional work on data management, expenditure tracking, & systems to enhance budget execution needed

(see above)

Component 2: Emergency Rehabilitation of Selected Public Infrastructure Original Activities Additional Financing Activities Activities Status Alternative Activities Activities Budget (US$

equivalent) Identified Priority Infrastructure Works RN2 Rehabilitation Ongoing. 13km repaired to

date. Rehabilitation of

Labadie-Cap Haitien Road (7km)

Add’l 6,000,000

RN4 Rehabilitation Ongoing. 17km repaired to date.

Rehabilitation of Cap Haitien-Milot Road (3km)

Add’l 2,850,000

RN4 Emergency Works Complete. Ensured continued access during the emergency.

N/A

Rivère Fauché Bridge Designs complete; Construction of bridge in progress.

N/A

Canal Cleaning and Drainage – Port au Prince

Complete. 110,000 m3 material cleared from 5 canals, preventing flooding of nearby temporary camps

N/A

Possible Eligible Works Under Non-Identified Allocation Bridge Repairs Ongoing. Original project

funded bridge design and N/A

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construction of Rivère Fauché Bridge on going; GoH funded remaining bridge repairs

Airport Infrastructure – Departure Terminal

Identified as eligible under original project, but activities not immediately prioritized by GoH. Being funded by the GoH.

Activities revised following a technical evaluation conducted by the ICAO. Original project funded an Evaluation of Air Safety Navigation System.

Rehabilitation of Aviation Safety Equipment, including communications equipment, air navigation equipment and runway lighting equipment.

Add’l 5,300,000

Port Infrastructure Identified as eligible under original project, but activities not immediately prioritized by GoH. Being funded by GoH.

N/A

Debris Disposal and Management

On going. Original project funded establishment of pilot Debris Processing Facility at Trutier, the first site complying with international safeguards standards. 700,000 m3 of rubble processed to date.

Trutier Debris Processing Facility

Add’l 6,150,000

Reconstruction or repair of damaged public buildings

Identified as eligible under original project, but activities not immediately prioritized by GoH. Being funded by GoH, among other donors.

Activities revised to finance 430,000 Structural Damage Assessments, and 500 engineers and 2500 masons trained with MTPTEC.

Component 3: Institutional Support, Reconstruction Planning and Project Management Original Activities Additional Financing Activities Activities Status Alternative Activities Activities Budget (US$

equivalent) Port au Prince land-planning study, including data acquisition

Ongoing. Produced analytical and economic studies for the development of the Artibonite Department and Plateau central region.

Continued Institutional Support, Reconstruction Planning and Project Management

Add’l 2,700,000

Support to Crisis Governance

Creation of this institution was abandoned by the GoH.

Activities revised to establish the Technical Unit for Building Evaluations, hiring and training of 70 engineers, elaboration of technical guidelines, including Repair Guide for Small Buildings, Retrofit Guide for Small Buildings, and Manual for Seismic Resistant Construction of Small Buildings.

Support to CIAT Ongoing. Provision of technical and financial support. Financed the preparation of “Haiti Tomorrow”, national planning document now in broad circulation.

Procurement and Financial Management Agent

Completed; function has now been successfully transferred back to GoH.

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Compliance with Covenants

28. IIERP is in compliance with all required covenants in the Financing Agreement, including all audits. The Moderately Unsatisfactory and Moderately Satisfactory ratings for both FM and Procurement (ISR as of March 2012-last archived) stem from the challenges post-earthquake, obstacles working with the Fiduciary Agent, and weaknesses associated with the overall public financial management and procurement systems in Haiti. Nonetheless, both FM and procurement processes have improved over the past 6 months, and both ratings are expected to further improve in the next reporting period. Safeguards compliance has been rated as Satisfactory for the overall Project. Rationale for the Additional Financing 29. The January 12, 2010 earthquake resulted in devastating losses for Haiti, killing 230,000 people and destroyed an estimated 115,000 houses, forcing some 1.5 million people to seek shelter in temporary camps, 300,000 of whom remain to date. Despite some measurable progress, reconstruction remains a priority for Haiti.

30. The Government of Haiti (GoH) requested an Additional Financing for the IIERP under the IDA 16 allocation. The proposed AF would support the scaling up of a well-performing project to enhance its development impact, and finance modified project activities in support of public sector reform, and continued investments in the transport and infrastructure sectors.

31. The proposed AF is the most suitable financing instrument to support the GoH in a timely manner. The Government Program, approved by Parliament in May 2012, aims to improve infrastructure, develop growth industries, and addresses governance as one of its main themes. The successful outcomes proposed by this project represent a window of opportunity to consolidate and sustain previous achievements and support the Government Program.

32. The proposed AF would complement other ongoing Bank emergency response operations, such as the Disaster Risk Management and Reconstruction Project (P126346), the Port-au-Prince Neighborhood Housing Reconstruction Project (P125805), the Emergency Bridge Reconstruction and Vulnerability Reduction Project (P114292) and the Transport and Territorial Development Project (P095523). Additional project activities would also complement the proposed Jobs Creation and Growth Project (P123974). See Table 2 for more information.

33. The proposed AF would also complement ongoing activities supported by the GoH and other donors, such as debris removal, neighborhood and housing rehabilitation, urban planning, and rehabilitation of airport infrastructure, as well as economic recovery through the development of the tourism industry in the North Department.

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Table 2: Complementary Bank-Financed Projects Title Project Number Date of Approval Date of Closing Transport and Territorial Development Project

P095523 April 11, 2006 July 30, 2013

Emergency Bridge Reconstruction and Vulnerability Reduction Project

P114292 November 18, 2008 June 30, 2013

Port-au-Prince Neighborhood Housing Reconstruction Project

P125805 May 4, 2011 June 30, 2015

Disaster Risk Management and Reconstruction Project

P126346 December 1, 2011 December 30, 2016

Proposed Jobs Creation and Growth Project

P123974 February 2013 (proposed) January 31, 2019 (proposed)

Consistency with the Interim Strategy Note

34. The proposed AF is fully aligned with the World Bank Group’s Haiti Interim Strategy Note FY2013-2014 (ISN2), to be discussed by the Executive Directors on September 27, 2012. The Strategy programs the second tranche of the US$520 million allocated to Haiti from the IDA 16 Crisis Response Window in response to the 2010 earthquake. The overarching objective of the Strategy is to support the GoH in implementing sustainable post-earthquake reconstruction, with a focus on (i) reducing vulnerability and increasing resilience; (ii) sustainable reconstruction; (iii) building human capital; and (iv) promoting inclusive growth. Additionally, the Strategy emphasizes the cross-cutting theme of strengthening governance. The proposed AF would put substantial resources toward fulfilling the first, second and fourth objectives by enhancing the resiliency of the Haitian road network to natural hazards and infrastructure investments in support of the tourism industry, and toward the theme of strengthening governance through investments in building institutional capacity and improved public financial management systems.

Alternatives Considered and Reasons for Rejection

35. Alternatives to the proposed AF were considered. First, the Bank explored the option of preparing a new project, however, given the satisfactory progress of IIERP, and existing institutional arrangements which are working well, this idea was rejected due to the continued urgency of the needs and the required additional time and effort. A second alternative was to include the road works under the proposed Jobs Creation and Growth Project, given that these works will be complementary to the proposed economic and tourism activities in the north. This alternative was rejected due to the inexperience within the other Ministries with road works and the comparative advantage of the MTPTEC-UCE with managing these types of rehabilitation activities, especially with regard to safeguards management. A third alternative was explored involving a Technical Assistance Program (TAP) with the GoH on Governance. This alternative was deemed redundant given the activities under Component 1 of the original project and the existing structure already in place with the UCP at the MEF. The proposed AF was found to be the most efficient instrument to preserve and capitalize on the existing Project’s momentum and achievements.

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III. Proposed Changes

Proposed Changes in Project Development Objectives and/or Scope 36. There will be a minimal change to the Project Development Objective (PDO), to read “the Project Development Objective is to support the Recipient in its sustainable recovery efforts from the effects of the Emergency, through selected interventions aiming at contributing to rebuilding key institutions and infrastructure”. This is a minimal change, removing the word “early”, as the project would support recovery efforts beyond those provided in the two years following the earthquake.

37. While the project components remain the same, activities within each component will be scaled up, or slightly modified, as follows: (i) increase Component 1: Restoring key economic and financial functions of the Recipient by US$12 million (from US$10 million to US$22 million); (ii) increase Component 2: Emergency Rehabilitation of Selected Public Infrastructure by US$20.3 million (from US$35 million to US$55.3 million); and (iii) increase Component 3: Institutional Support, Reconstruction Planning and Project Management by US$2.7 million (from US$5 million to US$7.7 million).

Revised Financing Plan

38. The indicative financing plan by component is shown below in Table 3. A detailed description of the AF financed activities is included in Annex 3.

Table 3: Detailed IDA Allocation by Component (in US$ millions) Project Components Initial

IDA Amount

Proposed Additional Financing

Total Amount

Component 1: Restoring key economic and financial functions of the Recipient

10.0 12.0 22.0

Component 2: Emergency Rehabilitation of Selected Public Infrastructure

35.0 20.3 55.3

Component 3: Institutional Support, Reconstruction Planning and Project Management

5.0 2.7 7.7

Project Preparation Advance 15.0 - 15.0 Total 65.0 35.0 100.0

Results Framework

39. The Results Framework has been revised to reflect the increased scope and improved impact of the project activities. See details in Annex 1. Institutional Arrangements 40. The proposed AF would be implemented using the institutional framework, procurement, financial management and disbursement arrangements put in place under the original IIERP, all of which are working well and have the capacity to absorb additional funds. The last supervision mission noted that though some weaknesses exist, the project continues to be implemented in a

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timely and reliable manner. The Financial Management (FM) team has developed an action plan to mitigate some of the weaknesses and prepare for implementation of the proposed AF. 41. Social and environmental issues will be addressed as in the original project, in accordance with World Bank guidelines and in compliance with safeguard requirements. The environmental category will remain Category A, though no new activities of a Category A nature are anticipated. A detailed description of the implementing arrangements for the AF is included in Annex 5. 42. The proposed AF closing date would be extended to June 30, 2016, and the closing date of the original grant (H551-0-HT) would be extended by three years to June 30, 2016. 43. A summary of all changes can be found in Table 4 below.

Table 4: Summary of Proposed Changes Description Remarks

1 Development Objective

PDO has slightly changed to remove the word “early”. It now reads: “To support the Recipient in its sustainable recovery efforts from the effects of the Emergency, through selected interventions aiming at contributing to rebuilding key institutions and infrastructure”. Results Framework has been strengthened and modified accordingly to reflect new proposed activities.

2 Institutional and Project Management Arrangements

No major changes in project implementation and management arrangements. The Project Implementation Units remain the MEF-UCP and the MTPTEC-UCEE. A detailed description is included in Annex 5.

3 Financing Plan Financing plan has been adjusted to reflect the proposed AF. 4 Financial Management No changes in financial management from original project. 5 Disbursement Arrangements No changes in disbursement arrangements from original project. 6 Procurement No changes in procurement arrangements from original project.

7 Environmental and Social No new environmental or social risks have been identified. Therefore, the environmental category will remain Category A.

8 Implementation Schedule The proposed activities will be implemented over a 4 year period.

9 Closing Date The closing date of the original grant would be extended by three years to June 30, 2016 to accommodate the proposed modified and additional activities.

IV. Appraisal Summary

A. Project Description: Components and Costs 44. The following components represent the expanded and additional activities for the proposed AF, to be added to the original IIERP (for details see Annex 3): 45. Component 1: Restoring Key Economic and Financial Functions of the Recipient (US$12 million). This public sector and governance component would utilize additional financing to provide support to: (i) Carry out activities to assist in fully re-establishing, including through relocation or physical structure rehabilitation, and thereafter operationalizing, through, inter alia, provision of goods, equipment and technical assistance to key institutions of the Recipient; (ii) strengthen accountability and efficiency of the Recipient through the strengthening of public financial management systems, including, inter alia, budget preparation, execution, monitoring

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and control, revenue mobilization capacity; public accounting; and supporting internal and external audit of government expenditures; (iii) strengthen transparency and participation capacity, including, inter alia, access to information and support for anticorruption activities of the ULCC; (iv) reinforce equity and responsibility, including inter alia, supporting the modernization of the Recipient’s procurement systems and administrative process, and; (v) strengthen the governance and institutional capacity of the Recipient by carrying out studies or conducting training activities in areas such as, public investment, minerals extraction, energy and commerce. 46. Component 2: Emergency Rehabilitation of Selected Public Infrastructure (US$20.3 million) Additional financing under this component would be used to provide support pertinent to: (i) the acquisition of aviation safety equipment and the provision of related trainings and installation works at the Port-au-Prince Toussaint Louverture International Airport, including, inter alia, communications, air navigation, and lighting equipments; (ii) finance the operation of the Trutier Debris Processing Facility located in Truitier, Port-au-Prince, to ensure continuity of ongoing debris removal activities and finance selected works (such as installing weight truck station, solar lighting, and offices) and the acquisition of equipment to improve management of the site, including inter alia, preparation works to install a truck weigh station, solar lighting, fences, safety equipment, and construction of new offices; and (iii) rehabilitate the following existing roads: (a) the road between Cap Haitien and Labadie; and (b) the road between Milot and Cap Haitien. 47. Component 3: Institutional Support, Reconstruction Planning and Project Management (US$2.7 million). The proposed AF would involve the provision of support to the Ministry of Public Works, Transport, Energy and Communications (MTPTEC) to continue: (i) restore the functioning capacity of key institutions of the Recipient’s crisis governance framework; (ii) carry out planning activities for the short, medium and long-term reconstruction phases; (iii) carry out institutional strengthening activities to include, inter alia: finance training, reconstruction urban planning, capacity building in project management, construction supervision, quality assurance, monitoring and reporting, procurement support, and safeguards compliance and streamlining; (iv) finance Project management activities; (v) finance the provision of technical assistance, the rehabilitation and construction of the MTPTEC offices, and the acquisition of equipment and software for MTPTEC key services; and (vi) provide technical assistance, training and equipment to manage the Recipient’s geographic information system and database. B. Institutional and Implementation Arrangements 48. The institutional and implementation arrangements established for the original IIERP would remain unchanged with the proposed AF being implemented by the Ministry of Public Works, Transport, Energy and Communications (MTPTEC) and the Ministry of Economy and Finance (MEF), through their Project Implementing Units, the Unité Centrale d’Exécution (MTPTEC-UCE) and the Unité de Coordination de Projet (MEF-UCP), respectively. Overall project implementation would be coordinated by the MTPTEC-UCE. The MTPTEC-UCE has extensive experience supporting the implementation of Bank-financed projects, and has been appraised to have sufficient technical and human resources to continue to effectively support the coordination of the proposed AF’s implementation. The unit currently has a Project Coordinator, a Procurement Specialist, and a Financial Management Specialist, and may augment its current

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capacity, if deemed necessary. In addition to coordinating the overall proposed AF, the MTPTEC-UCE would be responsible for the implementation of Components 2, and 3.

49. The MEF-UCP would be responsible for the implementation of Component 1. This unit has experience managing other Bank-financed projects and is experienced in Bank procedures. It is proposed that the Financial Inspectorate (IGF, part of MEF) provide strategic advice to the MEF-UCP, given IGF’s overall mandate to provide audits and recommendations of all government ministries and agencies.

50. The fiduciary arrangements will change slightly as the proposed AF would no longer require the services of a fiduciary agent to manage financial management and procurement processes on behalf of the Government. The management of fiduciary activities has now successfully transferred back to Government agencies as of February 2012. The Bank would continue to ensure that the proposed AF remains on track and will closely monitor financial management and procurement implementation and arrangements. C. Technical, Economic, Environmental and Social Appraisal (a) Economic

51. The GoH has released two strategic planning documents to inform the reconstruction process, Haiti Tomorrow, Territorial Strategies for Reconstruction, prepared by CIAT and the Action Plan for National Recovery and Development of Haiti, prepared by the Ministry of Planning and External Cooperation (MPCE) (Plan d’Action Pour le Relèvement et le Développement National d’Haïti – PARDH). Both documents identify the development of new economic growth poles and better equilibrated territories as part of the national recovery strategy. The North and North East Departments have been identified as one of these growth poles with two axes of development; an industrial park and tourism development. 52. The National Tourism Development Plan (Plan de Développement du Tourisme - PDT) prepared by the Ministry of Tourism, has identified tourism development in the North Department as a priority. This would include the rehabilitation of exceptional cultural heritage sites, such as the National Historic Park and the Citadelle of King Christophe (classified by the United Nations Educational Scientific and Cultural Organization (UNESCO) as a World Heritage Site), and the identification of Cap Haitien as a classified historical center. The proposed Jobs Creation and Growth Project would finance US$44 million in rehabilitation investments in this area and accompanying tourism development activities. 53. In addition, the PDT has identified the rehabilitation of the road along the Labadie – Cormier – Cap Haitien – Milot corridor as a critical catalytic investment. Labadie, a major cruise ship arrivals port connects to the Cormier Beach Hotel Area onto Cap Haitien, the second largest metropolitan area in Haiti with 500,000 inhabitants, and south to Milot, entrance of the National Historic Park. The road to Milot stems off of Route Nationale 3 and ends at the National Historic Park, and the Milot area is home to roughly 30,000 inhabitants who would benefit from the improved infrastructure. This road also links a major hotel corridor (Labadie, Cormier, Cap

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Haitian) with potential yearly tourist arrivals of more than 700,0002, to a major touristic destination, the National Historic Park and Citadelle of King Christophe. The project would finance the rehabilitation of two sections of this road allowing all weather access for cars and buses. 54. The average cost for road rehabilitation in Haiti is approximately US$900,000 per kilometer for rural and peri-urban roads. The road to be rehabilitated under the proposed AF between Labadie and Cap Haitien, and Cap Haitien and Milot, runs 7 kilometers and 3 kilometers, respectively for a total length of 10 kilometers at a total cost of US$8,850,000. An 8 kilometer piece of this critical corridor, along Route Nationale 3 (RN3), was rehabilitated by the Transport and Territorial Development Project (P095523), with an average cost of US$1,000,000 per kilometer. The Economic Rate of Return for this section of the corridor was calculated at 60 percent, as this section is part of the primary road linking Cap Haitien to the capital, Port au Prince. In addition, construction costs in Haiti are high, and have been on the rise since the earthquake, due to a large national program for road rehabilitation and a small number of construction firms and contractors, reducing competition and increasing costs. 55. Given the low level of traffic on the section of the road to be financed, and the catalytic nature of the investments, the economic analysis has been developed around the induced economic benefits for tourism development. It is expected that the construction of these two sections of roads, in addition to the investments to be financed by the proposed Jobs Creation and Growth Project (P123974) would increase estimated tourism visits in the range of 40,000 yearly additional hotel night stays with daily average spending of US$200, and 16,000 excursion days for cruise tourists, with an estimated daily average spending of US$50, in Cap Haitien, the National Historic Park and surrounding areas. This, in turn, would have positive direct and indirect effects on employment creation, income generation and poverty. The Cormier Beach Hotel Area is expected to capture 30 percent of the additional hotel nights and 100 percent of the excursion days will be facilitated almost exclusively by the road rehabilitations. Based on this calculation over a ten year period, an Investment Rate of Return (IRR) of 14 percent may be estimated for this activity. 56. If daily average spending falls by 30 percent, the sensitivity of the economic model indicates that the IRR would fall to 6 percent, and in the event roads construction lags as a result of cost overruns, the IRR would fall to 9 percent. 57. As in the original project, the proceeds from the proposed AF would also finance technical assistance and capacity building activities (Component 1 and 3). It is anticipated that the implementation of these activities will generate positive fiscal impact on the government budget and yield economic gains for the population through greater and better service delivery. First, the strengthening and integration of planning, public investment and budget systems is expected to increase public investment significantly and maximize the returns to public spending through much needed public expenditure management. Second, the deployment of public accountants in line ministries and the automation of accounting controls will increase transparency in treasury and accounting operations which will in turn lead to better budget allocation decisions and generate substantial fiscal savings. Third, the operationalization of the procurement framework alongside the strengthening of controls, both the internal and external auditing bodies, and the

2 Number of tourists in 2011 according to the Royal Caribbean Cruise Line (RCCL).

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implementation of measures against corruption will discourage inefficiencies and corruption in public procurement, thereby leading to tremendous fiscal savings and better quality service delivery to the population. Lastly, the strengthening of the MTPTEC would lead to improved performance and efficiency gains, greater accountability and ensure sustainability of infrastructure construction. 58. While the recent PEFA diagnostic acknowledges achievements in public financial management, it also indicates that persistent weaknesses remain in budget execution and treasury and accounting operations. It also highlights the needs to improve the expenditure tracking system to enhance budget execution monitoring, and manage the flow of resources to ensure not only timely availability of funds but also enhanced transparency and accountability and reporting. The project seeks to address these key challenges within the context of the proposed AF.

(b) Financial Management and Disbursement Arrangements

59. Fiduciary risk at the national level is high and the current volatility of governmental structures increases this overall risk. The Project will build on the existing FM arrangements under IIERP. As such, the FM would be handled by the MTPTEC-UCE (Component 2-3) and by the MEF-UCP (Component 1), as in the original project. Both the MTPTEC-UCE and MEF-UCP would be responsible for preparing audits of accounts, systems and procedures acceptable to the Bank. As both entities are already managing the FM aspects under the current project, the Bank’s assessment of MTPTEC-UCE and MEF-UCP’s capacity to implement FM activities for the AF is based on their satisfactory performance to date in implementing the ongoing project. 60. The latest FM supervision of IIERP noted that though some weaknesses existed, this did not prevent timely and reliable provision of information required to manage and monitor the implementation of the project. The FM team developed an action plan to mitigate these weaknesses and prepare for the implementation of the proposed AF 61. In conclusion, the Financial Management arrangements for the Project satisfy the Bank’s minimum fiduciary requirements under OP/BP10.02 and are adequate to provide, with reasonable assurance, accurate and timely information on the status of the project required by the Bank. 62. Proceeds of the Grant would be disbursed from the Bank on the basis of withdrawal requests by the Recipient using the SOE method which is based on summary reports in the form of Statement of Expenditures for all categories, and where relevant, applications for direct payments to Service Providers and Financial Agents. As with the current operation, two designated accounts would be opened at the Central Bank (Banque de la Republique d’Haiti - BRH). One would be managed by the MTPTEC-UCE and the other by the MEF-UCP.

Procurement 63. Activities financed under the proposed AF would use the essentially the same procurement arrangements and management framework already in place for the original IIERP. All procurement for the proposed activities would be carried out in accordance with World Bank “Guidelines: Procurement of goods, works and non-consulting services under IBRD Loans and IDA Credits and Grants”, January 2011; and “Guidelines: Selection and Employment of

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Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers”, dated January 2011, the emergency procedures described in OP/BP 8.00, and with the provisions of the Financing Agreement. For each contract to be financed by the Grant, the various procurement and consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame have been agreed upon by the Recipient and the Bank and are shown in the Simplified Procurement Plan (see Annex 5.C). The Procurement Plan would be updated at least annually, or as required to reflect the actual project implementation needs and improvements in institutional capacity. 64. The procurement process for the Trutier Debris Processing Facility would follow the International Competitive Bidding (ICB) process. The United Nations Agencies referenced under Component 3 in the Simplified Procurement Plan include the United Nations Office of Project Services (UNOPS), and the International Civil Aviation Organization (ICAO). 65. The fiduciary agent hired under the original project would no longer be required as the management of fiduciary activities has now successfully transferred back to Government agencies as of February 2012. Procurement activities will be carried out by the MTPTEC-UCE, and the MEF-UCP. Both entities are already managing procurement under other Bank-financed projects and the fiduciary agent under the original project helped put effective procurement and disbursement, among other procedures, in place prior to their departure. The Bank’s assessment of MTPTEC-UCE and MEF-UCP’s capacity to implement procurement actions for these projects is based on their satisfactory performance to date in implementing these ongoing projects. While both the MTPTEC-UCE and MEF-UCP’s procurement teams are reasonably well equipped to execute procurement according to Bank guidelines, the overall public procurement system in Haiti remains relatively weak. Despite recent reforms in the legal and institutional framework for procurement, there is still a lack of skilled personnel with knowledge of international norms, limited planning and contract management capacity, and insufficient use of standard documents and procedures. Consequently, the overall project risk for procurement is assessed as High.

(c) Environmental and Social

66. The new activities under the proposed AF would not trigger any new safeguard policies. There are also no new activities of a Category A nature proposed under the proposed AF. The policies triggered under the proposed AF include: Environmental Assessment (OP/BP 4.01), Natural Habitats (OP/BP 4.04), Physical Cultural Resources (OP/BP 4.11) and Involuntary Resettlement (OP/BP 4.12). Pest Management (OP/BP 4.09) was triggered under the original project as a precaution due to the project’s involvement in the Trutier Debris Processing Facility, though no Pest Management Plan was prepared. However, since there have been no pest issues associated with the rubble processing, nor with any other activities of the original project and proposed AF, OP/BP 4.09 is no longer triggered. 67. Physical Cultural Resources (OP/BP 4.11) policy was triggered as a result of the earthquake rubble collected from around Port au Prince and processed at Trutier. Given that this rubble could contain materials of cultural significance, it was important to trigger the policy in the event relevant materials were discovered. To date, no materials of cultural significance have been found. Beyond Trutier, the Physical Cultural Resources policy is not expected to be used in other

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additional activities because there will be no sub-surface excavation, extension or widening of the roads during the road works. 68. Natural Habitats (OP/BP 4.04) policy was triggered under the original project as a precautionary measure. To date, the project has not intervened in any critical national habitat. Although it remains triggered for the proposed AF, the additional works are highly unlikely to affect any critical national habitat, as these works are limited to the surface rehabilitation (paving, sidewalks and equipment) of existing roads. In addition, there will be no sub-surface excavation, or extension or widening of the roads.

69. The current safeguard rating for the IIERP is Satisfactory. The additional activities proposed under the AF would not trigger any additional safeguards. The project remains a Category A project, given that continued works at the Truitier Debris Processing Facility will be funded under the proposed AF and the risks (activities in a sensitive and damaged setting with possible cumulative impacts) remain. However, no new activities of a Category A nature are included in the proposed AF. 70. An Environmental and Social Management Framework (ESMF) guiding principles was prepared and disclosed and Environmental Management Plans (EMPs) and Resettlement Action Plans (RAPs) for debris processing, canal cleaning, bridge, and road works were prepared and cleared by the Bank for the subprojects financed under the original project. 71. The Recipient shall carry out the proposed AF in accordance with the ESMF. Prior to the commencement of any works under the Project, the Recipient shall prepare, consult and disclose an Environmental Management Plan (EMP), satisfactory to the Bank, for the relevant part of the proposed AF and shall implement the relevant part of the proposed AF in accordance with said EMP, satisfactory to the Bank at all times. 72. In the event that Involuntary Resettlement is involved in relation with the proposed AF, the Recipient shall prepare, consult and disclose a Resettlement Action Plan (RAP), satisfactory to the Bank, for the relevant part of the proposed AF prior to the commencement of any works in the relevant area and, thereafter, the Recipient shall implement the relevant part of the proposed AF in accordance with said RAP. 73. Safeguards documents prepared to date include EMPs and RAPs for the Trutier Debris Processing Facility, the emergency rehabilitation works on Route Nationale 4 and the larger rehabilitation of Route Nationale 2, and Route Nationale 4, respectively. These documents are currently disclosed in the Infoshop website. All safeguard documents prepared and disclosed to date are outlined in Table 5 below.

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Table 5: Original Project Safeguard Documents Project/Subproject Safeguard Document Date Disclosed

1 Infrastructure & Institutions Emergency Recovery Original Project

Environmental and Social Management Framework – Base Principles

April 23, 2010

2 Emergency works – Route Nationale 4 Environmental Management Plan March 18, 2010 3 Rehabilitation Works – Route

Nationale 4 Environmental Management Plan March 18, 2010 Resettlement Action Plan August 6, 2012

4 Rehabilitation Works – Route Nationale 2

Environmental Management Plan, inclusive of Rivère Fauché Bridge

March 18, 2010

Resettlement Action Plan April 26, 2011

5 Reconstruction of Rivère Fauché Bridge along RN2

Resettlement Action Plan October 18, 2011

6 Canal Cleaning - Canal de Bois de Chaine

Environmental Management Plan March 18, 2010 Resettlement Action Plan May 18, 2010

7 Trutier Debris Processing Facility EIA and Environment Management Plan March 17, 2011 Baseline Census and Rapid Social Assessment

March 10, 2011

Baseline Environmental Site Assessment Report

April 25, 2011

74. Under the proposed AF, of particular note is the rehabilitation of the road between Labadie and Cap Haitien and between Milot and Cap Haitien, for which two new EMPs will be prepared. For these road rehabilitation investments, there would need to be thorough community consultations, as well as a site-specific assessment of the impact of the new works. No land acquisition is anticipated, and there will be no sub-surface excavation, or extension or widening of the roadway. The MTPTEC-UCE would contract a consultant or firm to generate the two new EMPs for the each of the road works between Labadie and Cap Haitian, and Milot and Cap Haitien. The Government has already completed an Environmental Impact Assessment (EIA) for the road between Labadie and Cap Haitian. This document will be updated in accordance with Bank Safeguard policies to include an environmental management plan. 75. The construction of the small Customs Building at the Airport will require an EMP, which will be prepared by the same consultant or firm as the other EMPs. Since the construction will take place at the same location as the former customs building, neither land acquisition nor resettlement issues are anticipated. 76. The minor aviation safety equipment installation works at the Airport do not pose a serious safeguard risk, however, disposal methods (recycling, selling, land-filling) for the old airport equipment will need to be assessed to ensure the safe and appropriate disposal of these equipment. An EMP for the Airport that focuses on waste disposal alternatives would be prepared. All the documents associated with the safeguards instruments (detailed in Table 6 below) would be made available to all concerned agencies, as well as disclosed in public areas and on appropriate Government and other websites. 77. OP/BP 4.12 on Involuntary Resettlement would continue to be triggered under the AF, as there might be a limited number of people along the road between Labadie and Cap Haitian who could be affected under the policy, with impacts being limited to loss of economic or shade trees,

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or temporary loss of livelihood for small scale entrepreneurs. No land acquisition is expected. It is unlikely that there would be any loss of economic or shade trees given that the activities are limited to the rehabilitation of an existing road, with no extension or widening expected, but in the event that this occurs, affected parties would be compensated according to the site specific RAP. The consultant or firm contracted for the generation of EMPs would also be responsible for carrying out a census of affected people and developing a RAP along the same principles of those used for the RAPs under the original project. All anticipated safeguards documents to be prepared and disclosed are detailed in Table 6, below.

78. Given the anticipated increase in the number of tourists that are expected to use the rehabilitated roads, and the resulting opportunities and risks for residents and entrepreneurs along these roads, the update of the EIA would include a gender-informed analysis of the social impacts with recommendations on specific actions that can be undertaken. The EIA will include specific recommendations to address the needs of women/girls. 79. In terms of capacity to manage the safeguard aspects of this project, the original project already has an environmental specialist and a social specialist at MTPTEC-UCE. However, the proposed additional works would need additional environmental and social support. The project would continue to support building environmental capacity within the GoH, and would recruit two additional safeguard specialists, one social and one environmental. In addition, because this is a Category A project, the Truitier Debris Processing Facility would continue to be supervised directly by a firm with expertise in managing landfills.

Table 6: Safeguard Documents to be Prepared and Disclosed under Proposed AF

Description Safeguard Document Expected/Date Disclosed

1 Trutier Debris Processing Facility Environment Management Plan (existing) March 17, 2011 Baseline Census and Rapid Social Assessment (existing)

March 10, 2011

Baseline Environmental Site Assessment Report (existing)

April 25, 2011

2 Road Rehabilitation Works – Labadie-Cap Haitien

Environmental Management Plan October 12, 2012 Resettlement Action Plan (tbc) October 12, 2012

3 Road Rehabilitation Works – Cap Haitien-Milot

Environmental Management Plan November 12, 2012

4 Aviation Safety Equipment Installation Environmental Management Plan November 12, 2012

5 Small Customs Building Environmental Management Plan November 12, 2012

Gender 80. Under the original IIERP, gender was mainstreamed into relevant activities. Gender-inclusive community consultations have occurred for all road rehabilitation activities and would continue under the proposed AF. In addition, the Trutier Debris Processing Facility favors the hiring of female-heads of household, where possible, and this practice would continue. The proposed AF would monitor gender impacts based on disaggregated gender indicators in the

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results framework. In addition, further options will be explored during implementation to address potential gender impacts. (d) Expected Benefits and Risks 81. Activities financed under the proposed AF are expected to benefit the general population as a result of improved infrastructure, greater economic activity, and job creation resulting from the project’s interventions. The additional activities would also continue to support key public financial institutions and their post-earthquake rehabilitation needs. Given the involvement of multiple sectors, project preparation has involved consultations with all stakeholders to ensure effective coordination during project design and implementation. 82. The original project created 171 local jobs at Trutier, and has an important community outreach program that includes the daily feeding of 115-120 local children. These benefits will continue under the additional financing. The improvement of the roads will contribute to the unlocking of the tourist potential of the region and in addition to generating temporary employment opportunities for the local population during the works, will also generate opportunities for local entrepreneurs to benefit from the increased tourist numbers that would use the road.

83. No additional risks are expected as a result of the proposed AF. Health and safety measures that were identified and implemented under the original project and that contributed to keeping the number of accidents to a minimum will continue to guide the EMPs and works. The roads will be designed to ensure that traffic speeds will be controlled to minimize traffic accidents. Specific impacts on women/girls, on children and on vulnerable groups of the works and of the anticipated increased road usage will be assessed in the EIA and will be addressed in the design and contracts. The main risks and the corresponding mitigation measures are presented in the attached ORAF (Annex 2). (e) Bank Policy Exceptions

84. No exceptions to Bank policies are sought under this project.

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Annex 1: Results Framework and Monitoring HAITI: Infrastructure and Institutions Emergency Recovery Project

Results Framework

Revisions to the Results Framework Comments/ Rationale for Change

PDO

Current (PAD) Proposed To support the Recipient in its early sustainable recovery efforts from the effects of the Emergency, through selected interventions aiming at contributing to rebuilding key institutions and infrastructure.

To support the Recipient in its sustainable recovery efforts from the effects of the Emergency, through selected interventions aiming at contributing to rebuilding key institutions and infrastructure.

Removal of the word early, as the project aims to support the continued recovery efforts, beyond those immediately after the earthquake.

PDO indicators

Current (PAD) Proposed change Estimated number of people benefiting from repaired infrastructure (including the proportion of women)

No change. No change.

Project influenced the reconstruction planning process for Port-au-Prince and surrounding affected areas so that public consultation mechanisms are strengthened.

No change. No change.

MEF restored internal control and audit, and able to process payroll.

No change. No change.

Crisis governance institutions strengthened and operating.

Dropped. Initial Indicator has been dropped, as the governmental scheme to create a new institution in charge of crisis governance, elaborated in the very aftermath of the earthquake, was abandoned.

Intermediate Results indicators

Current (PAD) Proposed change* Project Preparation Advance Number of individuals receiving and using immediate recovery supplies.

No change. Activity complete.

Component 1: Restoring key economic and financial functions of the Recipient Revenue: the information system of the General Directorate of Taxes is operational.

Government financial statements are produced, audited and sent to Parliament in a timely fashion. They include improved information on operating and investment expenditures. This can be measured through PEFA indicators PI-25 to 28. 3

The project has been successful in restoring the IFMIS system of the Directorate of taxes and the processing of civil servants’ salary. It needs now to focus on issues of accountability and transparency

Budget Execution and control: Government accounts are

3 PEFA report 2012, available on the Haitian Ministry of Economy and Finance website at: mefhaiti.gouv.ht.

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Revisions to the Results Framework Comments/ Rationale for Change

reviewed by the Court of Accounts less than 8 months after the end of the fiscal year.

PEFA Indicator 2011

rating 2013/14 rating

PI-25 Quality and timeliness of annual financial statements

D+ C

PI-26 Scope, nature and follow-up of external audit

Not rated in 2011 (D+ in 2007)

C

PI-27 Legislative scrutiny of the annual budget law

C+ B

PI-28 Legislative scrutiny of external audit reports

D C

related to budget execution, fiscal reporting, fiscal controls, and audits where success has been more fragile to date.

Payment system: The processing of public servants salaries is fully restored and the registry of civil servants is updated.

PEFA Indicators: P1-18. Original indicator met. Updated indicator to be in alignment with recently published PEFA report.

New. Small Customs Building is constructed and operational, complying with international social and environment standards.

Follows specific request from Government to improve customs at airport; monitoring critical activity financed by project.

Component 2: Emergency rehabilitation of selected public infrastructure New. Km of roads rehabilitated or repaired to

agreed standards. (IDA CORE INDICATOR)

Indicator will take in account the rehabilitation of 2 new sections of road for an increase of 10km.

Number of infrastructure built with due attention paid to sustainability as well as social and environmental aspects.

No change. Change in Target to take in account the creation of a new core Indicator.

Estimated number of days of work generated by infrastructure repair or reconstruction.

Estimated number of days of work generated by infrastructure repair or reconstruction disaggregated by gender.

Consistency with FY1214 LCR gender action plan.

New. Truitier Debris Processing Facility is operational, complying to international social and environmental standards and support implementation of all stakeholders efforts for debris removal.

Monitoring a critical activity financed by the project which has led to Category A rating.

New. Aviation safety equipment is strengthened to support air traffic accordingly to international standards. Compliance of procured goods for aviation safety

Monitoring critical investments to support air traffic.

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Revisions to the Results Framework Comments/ Rationale for Change

infrastructure in line with Standards and Recommended Practices (SARP) of ICAO.

All bridge reconstruction or repairs financed under the project include seismic stops or equivalent design solutions aiming at improving the resilience to future disasters.

No change. No change.

Component 3: Institutional support, reconstruction planning and project management Crisis governance institutions received institutional strengthening support.

Key services of MTPTEC received institutional strengthening support to be able to handle reconstruction process, BTEB is created and operational and leads dissemination of repair, retrofit, and construction best practices.

Initial Indicator has been dropped, as the governmental scheme to create a new institution in charge of crisis governance, elaborated in the very aftermath of the earthquake, was abandoned.

CIAT has become an institution capable of influencing the reconstruction planning process with due attention being paid to social and environmental issues.

No change. No change.

Reconstruction planning alternatives consulted with relevant stakeholders.

No change. No change.

Fiduciary agent hired. No change. Activity complete.

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REVISED PROJECT RESULTS FRAMEWORK

Project Development Objective (PDO): To support the Recipient in its early sustainable recovery efforts from the effects of the Emergency, through selected interventions aiming at contributing to rebuilding key institutions and infrastructure.

PDO Level Results Indicators4

Cor

e UOM

Baseline Original Project Start

(2010)

Progress To Date (2012)

Cumulative Target Values

Frequency Data Source/ Methodology

Responsibility for Data

Collection Comments 2013 2014 2015 2016

1. Estimated number of people benefiting from repaired infrastructure # of

people 0

2. Project influenced the reconstruction planning process for Port-au-Prince and surrounding affected areas so that public consultation mechanisms are strengthened.

Text No Yes Annual WB team

3. MEF restored internal control and audit, and able to process payroll.

Beneficiaries

Project beneficiaries,

Number (000)

0 2000 3000 Annual Monitoring

reports

MTPTEC-UCE/MEF-UCP

Of which female (beneficiaries)

Number (000) 50%

0 50 1500 Annual Monitoring reports

MTPTEC-UCE/MEF-UCP

Intermediate Results and Indicators

Intermediate Results Indicators

Cor

e

Unit of Measurement

Baseline Original Project Start (2010)

Progress To Date (2012)

Target Values

Frequency Data Source/ Methodology

Responsibility for Data Collection

Comments 2013 2014 2015 2016

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Component 1: Restoring key economic and financial functions of the Recipient

Intermediate Result 1: Government financial statements are produced, audited and sent to Parliament in a timely fashion. (Can be measured through improvements in PEFA indicators P1-25- 28.5)

Intermediate result indicator one: PI-25 Quality and timeliness of annual financial statements

D+ (2011) C(2014)

No deterioration in most recent PEFA indicator

Updated in PER

Third party verification annual financial statements

MEF-UCP These selected PEFA indicators will be updated by the PER.

Intermediate result indicator two: PI-26 Scope, nature and follow-up of external audit

D+ (2007) C(2014)

No deterioration in most recent PEFA indicator

Updated in PER

Third party verification of audit reports

MEF-UCP Ibid.

Intermediate Result 2: Budget Execution and control: Government accounts are reviewed by the Court of Accounts less than 8 months after the end of the fiscal year.

Intermediate result indicator one: PI-27 Legislative scrutiny of the annual budget law

C+(2011) B(2014)

No deterioration in most recent PEFA indicator

Annual Third Party verification MEF-UCP Ibid.

Intermediate result indicator two: PI-28 Legislative scrutiny of external audit reports

D(2011) C(2014)

No deterioration in most recent PEFA indicator

Annual Third Party verification MEF-UCP Ibid.

Intermediate Result 3: Payment system: The processing of public servants salaries is fully restored and the registry of civil servants is updated.

Intermediate result indicator one: P-I:18 Effectiveness of payroll controls D+(2011) C(2014)

No deterioration in most recent PEFA indicator

Quarterly

Monthly reconciliation by the Treasury Directorate between personnel records and payroll data

Treasury Directorate/MEF-UCP

Ibid.

5 The PEFA indicators will be updated in 2013/2014 as part of the planned Public Expenditure Review (PER). In case a formal PEFA is not undertaken in the next three years, a discrete assessment of the 4/5 indicators used in the matrix will be undertaken as often as needed for the evaluation of the project

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Intermediate Result 4: Payment system: Small Customs Building: The building is constructed and customs operations are restored at the location Intermediate result indicator one: Small Customs Building is operational, complying with international social and environment standards.

Yes/No No No Completed Annual Monitoring reports

MTPTEC-UCE/MEF-UCP

Component 2: Emergency rehabilitation of selected public infrastructure

Intermediate result indicator one: Km of roads rehabilitated or repaired to agreed standards

km 0 35 km 118 km

123 km

128 km

128 km Semi-annual

UCE operational report

MTPTEC-UCE

Intermediate result indicator two: Number of infrastructure built with due attention paid to sustainability as well as social and environmental aspects.

Number N/A 0 1 1 1 1 Annual UCE operational report

MTPTEC-UCE

Bridge on Fauché river RN2

Intermediate result indicator three: Estimated number of days of work generated by infrastructure repair or reconstruction disaggregated by gender

Man-days N/A 90,000 180,000 Semi-

annual UCE operational report

MTPTEC-UCE

Intermediate result indicator four: Truitier debris treatment center is operational, complying to international social and environmental standards and support implementation of all stakeholders efforts for debris removal

Yes/No N/A Yes Yes Completed Monthly UCE operational

report MTPTEC-UCE

Truitier debris treatment center is operational, complying with international social and environmental standards and supports the implementation of all partner debris removal projects.

Intermediate result indicator five: Aviation safety equipment is strengthened to support air traffic accordingly to international standards. Compliance of procured goods for aviation safety infrastructure in line with Standards and Recommended Practices (SARP) of ICAO

Yes/No N/A No No Yes Annual

UCE operational report OFNAC operational report

MTPTEC-UCE

Intermediate result indicator six: All bridge reconstruction or repairs financed under the project include seismic stops or equivalent design solutions aiming at improving the resilience to future disasters.

Yes/No N/A No Yes Annual UCE operational report

MTPTEC-UCE

Design of Fauché. Bridge is para-seismic, reviewing of construction plans is expected for September 2012, preparation works are ongoing.

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Component 3: Institutional support, reconstruction planning and project management

Intermediate result indicator one: Key services of MTPTEC received institutional strengthening support to be able to handle reconstruction process; BTEB is created and operational and leads dissemination of repair, retrofit, and construction best practices.

Yes/No N/A Yes Yes Annual MTPTEC Report

Consulting Firm and MTPTEC-UCE

Intermediate result indicator two: CIAT has become an institution capable of influencing the reconstruction planning process with due attention being paid to social and environmental issues

Yes/No N/A Yes Yes Annual

Semi Annual WB team monitoring report

WB

CIAT has served as a key institutions in influencing reconstruction planning, acting as both a coordination unit and think tank

Intermediate result indicator three: Reconstruction planning alternatives consulted with relevant stakeholders

Yes/No N/A Activity Complete Annual

Annual assessment by consultant firm

Consulting Firm and MTPTEC-UCE

"Haiti Tomorrow", issued by CIAT, has been largely disseminated and widely consulted among key stakeholders , encouraging a more decentralized reconstruction approach

Intermediate result indicator four: Fiduciary agent hired Yes/No N/A Activity

Complete UCE operational report

MTPTEC-UCE

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Annex 2: Operational Risk Assessment Framework (ORAF) HAITI: Infrastructure and Institutions Emergency Recovery Project

Stage: Appraisal

Project Stakeholder Risks Rating High Description : Borrower Interest: A new Prime Minister has been appointed and formed a new government.

Risk Management: The project’s key counterparts are not political appointees and close collaboration would thus be maintained with the Implementing Agencies, MTPTEC-UCE and MEF-UCP. Furthermore, technical and policy notes would be prepared to inform the new appointees on how the Bank is supporting their institution.

Resp: Bank Stage: Imp Due Date :Project Implementation

Status: In Progress

Donor Relations: Lack of coordination or diverging views among the donors active in the DRM and infrastructure sectors (specifically the Bank, UNDP, IDB, EU, and USAID), and partner NGOs, between donors and the government and amongst beneficiaries could result in duplications and undermine project implementation.

The Bank would continue to engage in active dialogue during project implementation with major donors (including CIDA, IDB, EU, UNDP, USAID/US Treasury, France) in both infrastructure and public sector governance sectors. The Bank would continue this regular dialogue during supervision and use the Groupe Sectoriel Transport and the Budget Support Group as the coordination entities with the other infrastructure and public sector and governance-focused donors and NGOs, where necessary.

Resp: Bank, MEF-UCP, MTPTEC-UCE

Stage: Imp Due Date : Project Implementation

Status: In Progress

Implementing Agency Risks Capacity Rating: High Description : Capacity of Implementing Agencies: The capacity of the MTPTEC-UCE and MEF-UCP to implement additional activities needs to increase. MTPTEC-UCE and MEF-UCP are already implementing the IDA financed EBRVRP, TTDP, DRMRP, and IIERP. With the additional activities, there is a risk that overall disbursement will be slower than the existing project.

Risk Management : The proposed activities would be implemented by implementing agencies with a satisfactory track record in managing IDA funds. The Bank would work closely with UCE- MTPTEC and MEF-UCP to provide the requisite support during implementation and supervision. Component 1 and 3 would finance institutional support and capacity development for project management and implementation, including training, staffing and project development activities associated with project execution. Resources are still available to hire additional fiduciary and technical staff to support the implementation of all components. Resp: MTPTEC-UCE, MEF-UCP

Stage: Imp Due Date : Project Implementation

Status: Not yet due

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Effective Procurement Implementation: Low capacity to effectively implement procurement. While both Implementing Agencies have procurement teams well equipped to execute procurement according to Bank Guidelines, the overall public procurement system in Haiti remains relatively weak. Despite recent reforms in the legal and institutional framework for procurement, there is still a lack of skilled personnel with knowledge of international norms, limited planning and follow-up capacity, and insufficient use of standard documents and procedures. Effective FM Implementation. Weaknesses encountered do jeopardize the timely and reliable provision of information required to manage and monitor the project.

Procurement activities would be carried out by MTPTEC-UCE and MEF-UCP both of which are already satisfactorily managing procurement under EBRVRP, TTDP, DRMRP and IIERP. Bank supervision in this area would be thorough, additional training and possible staff would be financed for the Implementing Agencies, if deemed necessary. Regarding FM, an Action Plan was developed and agreed upon between the Bank and the Implementing Agencies to resolve the weaknesses encountered, particularly to counter the risk that some information may not be provided in a timely and reliable manner.

Resp: MTPTEC-UCE, MEF-UCP

Stage: Imp Due Date : Project Implementation

Status: Not yet due

Governance Rating: Medium Description : Implementing Agency Coordination: Lack of coordination among MTPTEC-UCE and MEF-UCP could result in neither agency’s assumption of ownership over the project, and could contribute to difficulty achieving the PDOs.

Risk Management : MTPTEC-UCE and MEF-UCP have developed a successful working relationship under IIERP and financing has been allocated to build their project management capacities. The proposed Project was developed in close consultation with both Implementing Agencies who would assume full ownership over their respective components, have a vested interest in achieving the PDOs, and have maintained a strong working relationship with the Bank on previous projects. Resp: MTPTEC-UCE, MEF-UCP

Stage: Imp Due Date : Project Implementation

Status: Not yet due

Project Risks Design Rating: Moderate Description : Project Activities duplicate or are not coordinated with interventions of other donors.

Risk Management : The Project design has been discussed with the other donors in the Groupe Sectoriel Transport and institutional support to the MEF would be coordinated with other key donors (IaDB, EU) throughout project implementation.

Resp: Bank Stage: Imp Due Date : Project Implementation

Status: Not yet due

Private Sector Capacity: The private sector capacity is insufficient to execute the proposed works.

The proposed Project would provide for a range of execution alternatives, including partnering with UN agencies if necessary, when adequate capacity exists within Government agencies.

Resp: Bank, MTPTEC-UCE, MEF-UCP

Stage: Imp Due Date : Project Implementation

Status: Not yet due

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Inappropriate Project Design: Technical assessments or designs prove insufficient to address Haiti’s vulnerability challenges or are under-dimensioned to cope with the next adverse natural event.

The project would hire experienced engineering firms to prepare designs and integrate improved technical standards for major works, including roads and bridges, and would promote preventative maintenance of infrastructure. Reinforced design and construction standards would be applied and particular attention would be given to both the infrastructure and the immediate environment (soil stabilization, protection of river banks against erosion).

Resp: MTPTEC-UCE, MEF-UCP

Stage: Imp Due Date : Project Implementation Status: Not yet due

Intervention Area: Appropriateness and political neutrality of choice of project target areas may be raised as an issue under the newly-appointed government.

The Bank and Implementing Agencies would work closely with national and municipal actors, including heavy consultation at the municipal level to ensure that choice areas are elected transparently. Primary infrastructure works have been pre-identified based upon the principle of greatest loss avoidance, and economic growth. Other works would be identified based on an agreed upon select criteria and on third-party recommendations.

Resp: MTPTEC-UCE, MEF-UCP

Stage: Imp Due Date : Project Implementation Status: Not yet due

Implementation/Institutional Arrangement Complexity: Multiple implementation agencies implementing, diverse project components in various departments could result in sequencing issues, leading to unbalanced implementation, and uneven resource distribution.

The MTPTEC-UCE and MEF-UCP have developed a successful working relationship under IIERP, and would maintain open channels of communication during implementation to ensure appropriate sequencing of project activities and balanced, timely implementation. Close follow-up on implementation would occur on more frequent Bank supervision missions.

Resp: MTPTEC-UCE, UCPMEF

Stage: Imp Due Date : Project Implementation

Status: In Progress

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Social & Environmental Rating: High Description : Limited Safeguards Implementation and Supervision Capacity: Although they have been systematically applying required procedures, with much progress made since the earthquake, the Government and Implementing Agencies lack capacity and incentive to implement and supervise Bank social and environmental safeguard policies and procedures during the reconstruction phase. In the case of an emergency, the constraints are even higher. For Truitier, solid environmental expertise and supervision was provided by an internationally recruited firm. Since the contract for this firm is ending, recruitment has been initiated for their replacement. However, with a newly recruited team to manage these aspects, the learning curve is likely to be high.

Risk Management : The MTPTEC-UCE has a social and environment specialist in place to cover safeguards aspects of Bank projects . Another social and environmental specialist will be hired to provide further assistance with environmental aspects. For Trutier there has been a need to ensure that there is no gap in supervision during this transition between firms and that the old firm is available to train and assist during the transition. Following the earthquake, despite the emergency situation, E&S safeguards measures were successfully applied in other Bank projects. Experiences and instruments developed for the ERDMP/EBRVRP/TTDP/IIERP/DRMRP projects have also been consulted. Resp: MTPTEC-UCE, MEF-UCP

Stage: Imp Due Date : Project Implementation

Status: In Progress

Ecological Degradation: Due to the increased demand for building supplies, Haiti’s stressed forest and freshwater resources may be further degraded.

The Bank and Implementing Agencies are working with ongoing initiatives to ensure reconstruction materials are procured from existing and reputable firms.

Resp: MTPTEC-UCE, MEF-UCP

Stage: Imp Due Date : Project Implementation Status: Not yet due

Involuntary Resettlement: Sub-projects may require micro-scale resettlement activities in the event of infrastructure reconstruction.

Resettlement is not envisioned under this project. However, in the process of updating the EIA, the project will include a census for sub-components where people might be impacted by the project under OP/BP 4.12. If such impacts are anticipated, the project would prepare a Resettlement Action Plan (RAP) along the same principles that were used for the RAPs in the original project. The Implementing Agencies, in collaboration with the Bank, would also ensure that sufficient and appropriate capacity is transferred to implementing partners on the ground to manage the application of social and environmental safeguards adequately. Overall, project would be a Category A project.

Resp: MTPTEC-UCE, MEF-UCP

Stage: Imp Due Date : Project Implementation Status: Not yet due

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Program & Donor Rating: Moderate Description : Given the number of donors and NGOs operating in the DRM and infrastructure fields, both international organizations, and smaller NGOs, competing interests, duplication of project or lack of coordinated with the interventions of other donors could have a high impact but has a low likelihood of occurring. The number of NGOs initiating small scale projects has grown exponentially since the earthquake, and they are especially difficult to coordinate with as a result of their small projects, dispersion across the country, and lack of contact with bigger donors due to their independent nature.

Risk Management : The Bank will continue to engage in active dialogue during project implementation with major donors (including IDB, EU, UNDP, USAID) in both infrastructure and public finance/governance sectors to ensure good donor relations and avoid duplications of efforts. The Bank would continue this regular dialogue during supervision and use the Groupe Sectoriel Transport and the Budget Support Group as coordination entities with the other DRM and infrastructure focused-donors, and NGOs where necessary. Annex 15 highlights other donor-financed activities in the DRM and transport sectors.

Resp: Bank, MTPTEC-UCE, MEF-UCP

Stage: Imp Due Date : Project Implementation Status: In Progress

Delivery Monitoring & Sustainability Rating: High Description : Rebuilt infrastructure and reconstruction planning activities may neither be delivered with the expected quality nor in time for the next hurricane season.

Risk Management : Infrastructure works would be selected based on heavy consultations with national and municipal actors and based on the principle of greatest loss avoidance. Close follow up of implementation would be performed through more frequent Bank supervision missions to ensure Bank standard quality.

Resp: Bank, Client Stage: Imp Due Date :Project Implementation

Status: Not yet due

Other Force Majeure Rating: High Description : Due to its geographic location, Haiti is struck annually by hurricanes and other natural disasters.

Risk Management : Mitigation of this risk falls outside of the scope of WBG action. However, WBG will continue to monitor developments closely and will adjust the program if necessary. Resp: Bank, MTPTEC-UCE, MEF-UCP

Stage: All Due Date : Project Implementation

Status: In process

Overall Risk Rating: Implementation Risk Rating: HIGH Comments: The overall risk rating is High driven largely by technical and fiduciary capacity weaknesses, and general governance issues in Haiti.

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Annex 3: Detailed Description of Modified Project Activities HAITI: Infrastructure and Institutions Emergency Recovery Project

1. The existing PDO and project components remain relevant and there would be no changes under the proposed AF. The proposed AF would support the original project’s Component 1 (Restoring Key Economic and Financial Functions of the Recipient) and Component 2 (Emergency Rehabilitation of Selected Public Infrastructure) with US$12 million and US$20 million, respectively. Additional funds of US$3 million would be provided to Component 3 (Institutional Support, Reconstruction Planning and Project Management).

Component 1: Restoring Key Economic and Financial Functions of the Recipient (US$12 million): 2. The strengthening of Haiti’s public sector institutions and governance systems is critical for continued reconstruction and post-reconstruction recovery. Component 1 aims to target key ‘choke points’ to improve efficiency and transparency in public resource use, including to enhance budget as a tool for development (e.g., strengthening the link between the budget and sector policies), to strengthen procurement systems to ensure transparency and the proper use of public funds, and enhance control and oversight. 3. Component 1 aims to strengthen Haiti’s public sector governance and public financial management systems and initiate activities to enhance transparency and reduce opportunities for corruption. This component is structured around three pillars: (1) enhancing accountability and efficiency; (2) building transparency and participation; and (3) ensuring equity and responsibility. Under this component, the AF would provide support for, but not be limited to, the following activities which follow from consultations with government:

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Sub-component 1.1: Construction of a small customs building at airport (US$1.5 million) 3. Finance the construction of a small customs building at the the Port-au-Prince Toussaint Louverture International Airport (PAP) where the former customs building existed prior to the earthquake. The proposed financing will restore customs operations to their former location.

Sub-component 1.2: Accountability and efficiency (US$4.8 million)

4. This pillar aims to improve the effectiveness and accountability of Haiti’s institutions through strengthening the quality, comprehensiveness and timeliness of fiscal and financial monitoring and reporting. Activities under this sub-component follow closely and in some cases reinforce the activities of the existing project. These activities, inter alia, include the following four areas: 5. Revenue/tax reporting, public expenditure reporting and monitoring, and budget execution. Activities, inter alia, include: i) Enhance data and information, including support to the Director General of Budget (DGB) to produce the regular monthly report of budget implementation; ii) strengthen and integrate IT systems to improve public accounting and monitoring and evaluation tools to enable direct links between the Director General of Budget, the Treasury, the Director General of Taxation (IMB), the General Customs Agency (DGA), the MPCE (SYSGEP) and MEF (SYSDEP); iii) enhance revenue collection. The aim of this sub-component includes the following: i) Provide, in real time, revenue estimates, liquidity management and better provision of resources to the sector ministries and improve overall expenditure predictability and efficiency; iii) operationalize the planning units (UPE) in key line ministries in order to enhance reporting on investment expenditures; iv) improve the quality of the information contained in the TOFE (Table of Financial Operations of the State) in order to generate it automatically (currently the TOFE is compiled manually); v) enhance revenue and customs processes and collection, including through improving the customs infrastructure at the airport; and vi) accelerate audit submission to the Supreme Audit Institution (Court of Accounts, CSCCA) to allow timely review and delivery of opinions to Parliament during the discussion of the budget for the next fiscal year. 6. Treasury and public accounting. Activities, inter alia, include: i) Strengthen Haiti’s public accounting through establishment of centralized records and quality monitoring; ii) establish a structured network of public accountants in line ministries and autonomous agencies and deconcentrate under the authority of the Treasury Directorate; iii) install treasury accounting software and implement software for general accounts, auxiliary accounts and achievement of different interfaces in order to produce periodic summary statements. This software will be deployed at 36 state institutions; iv) strengthen the capacity of the MEF and the Association of Chartered Public Accountants of Haiti (OCPAH) to support Haiti’s accounting profession and the gradual introduction of international accounting standards. 7. Public investment and planning and implementation units in sector ministries. Activities, inter alia, include: i) Capacity building of the Directorate of Public Investment (DIP); establish the IT infrastructure required to operate the System Management Information for Programs and Projects (SYSGEP); ii) strengthen the implementation and planning units (UPE) and deployment

44

of SYSGEP across the sectoral ministries; and iii) update standards and procedures for all public documentation relating to the National Public Investment System and for national projects under the new National Planning System and Development Management. 8. Overall, the anticipated results after the completion of the above activities would include: (1) Better overall performance of National Planning and Development Management; (2) greater consistency between strategy development, medium term planning and the national budget; (3) better coordination, planning and organization of projects between government institutions and donors; and (4) greater transparency in the overall management of public investments through availability of information on public investments and the operationalization of SYSGEP. 9. Internal and external audit. Activities, inter alia, would build on existing work supported by the trust fund from the Governance Partnership Facility (GPF) and the existing project to strengthen internal and external audit via training, technical assistance and enhancing the capacity of the auditors of the Court of Accounts (CSCCA), and the Inspectorate of Finance (IGF). This includes supporting the overall capacity of public sector audits by providing professionalization of services such as archives, registry, documentation, and management; ii) continued support to the Finance Inspectorate (IGF) and its mandate to audit public agencies and ministries; and iii) improving disclosure of CSCA audits, particularly to Parliament and the general public (see below).

Sub-component 1.3: Transparency and participation and the ‘demand’ for good governance (US$1.6 million) 10. Access to government information. Activities include, inter alia, the following: i) Support access to government information including the government’s budget and its execution, and access to audit reports and other fiduciary reports and controls; ii) improve Parliament’s access to audits; and iii) support overall access to information, including via government websites, e-Governance, leveraging from existing systems and working in collaboration with other donors. 11. Statistics, data collection and records management. Continue support for data collection, statistical analysis and records management and assist the Haitian Statistics Institute (IHSI). 12. Anti-corruption activities. Support the anticorruption activities of the Anticorruption Authority (ULCC). Proposed activities of the ULCC include, inter alia: (i) the implementation of the national strategy against corruption; (ii) creating online connections between the ULCC and the procurement regulatory authority (CNMP); (iii) the implementation of anti-corruption conventions signed by the GoH (UNCAC and IPCC); (iv) the continued devolution of the ULCC to regions; (v) work with CSOs and others and dissemination of manuals and brochures for civic education about corruption; and (vi) studies and perception surveys on the level and incidence of corruption in Haiti. Sub-component 1.4: Equity and accountability through regulatory frameworks and administrative procedures (US$3.1 million) 13. Modernization of public procurement. Activities, inter alia, include: i) Build eProcurement (the new interactive website of the CNMP, supported by the existing project, is planned for late September 2012) and generate an overall database of public procurement; ii)

45

enhance CNMP’s statistical capacity and IT systems in order to process data for monitoring government procurement; iii) disseminate key legal texts and regulations governing the procurement system; iv) audit contracts awarded in 2013 to observe the implementation and compliance with the new Procurement Code; v) strengthening procurement units in ministries (working with the IDB) to build capacity to implement and produce procurement plans. 14. Office of Human Resource Management (OMRH). Lay the foundations for an administrative and civil service reform through targeted activities which may include a payroll audit and an update of the public sector HR database. 15. Regulatory framework. Build equity and accountability through policy reforms and updating of the regulatory and legal frameworks for key sectors such as energy and mining.

Sub-component 1.5: Project Management and studies or training to strengthen Haiti’s governance and institutional capacity (US$1 million) 16. Finance the PCU to support the overall management of the implementation Component 1. The AF will strengthen the governance and institutional capacity of the Recipient by, inter alia, carrying out studies or conducting training activities on the following areas: public investment, minerals extraction, energy and commerce.

Component 2: Emergency Rehabilitation of Selected Public Infrastructure (US$20.3 million): 17. The proposed additional activities under this component would include: Sub-component 2.1: Rehabilitation of Aviation Safety Equipment (US$5.3 million) 18. This sub-component would finance rehabilitation of aviation safety equipment and system at the Port-au-Prince Toussaint Louverture International Airport (PAP) and the "Tete-Etang" remote station. The proposed investments are crucial to ensure conformity with the ICAO’s globally recognized Standards and Recommended Practices (SARP), as well as national and regional air navigation plans. ICAO would provide assistance in the implementation of the components to confirm compliance with these standards. The proposed activities outlined below were identified on the basis of the preliminary Haiti Site Survey Report conducted by the Technical Cooperation Bureau of ICAO in March 2012 financed under the original IIERP. Activities will include, inter alia:

(i) Communications Equipment (US$1.5 million): AF financing would support the

repair or replacement of communications equipment infrastructure at Port-au-Prince airport (PAP) and the "Tete-Etang" remote station. This would include, inter alia, the procuring and installation of communications equipment, including safe and sufficient energy supply, and the refurbishment of the respective equipment rooms, as well as the perimeter fence surrounding the equipment. The proposed communications equipment is planned to consist of: (i) new VHF air- ground radio communications equipment for the Area Control Center (ACC) and Approach Center (APP) in "Tete-Etang" remote station including a new antenna mast; (ii) new radios

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for the Air Traffic Control (ATC) Tower; and a (iii) new Voice Communication Switching System (VCSS) with Consoles for the ACC and ATC Tower. Equipment under (ii) and (iii) will be installed in the old ATC tower that is planned to be refurbished by the Autorité Aeroportuaire Nationale (AAN) under the ongoing reconstruction efforts of the departure terminal. The temporary mobile ATC tower situated on the runway will be removed.

(ii) Air Navigation Equipment (US$2.8 million): AF financing would support the repair or replacement of Air Navigation Equipment Infrastructure at PAP. This would include, inter alia, the procuring and installation of navigation equipment, including safe and sufficient energy supply, as well as the refurbishment of the respective equipment rooms, shelters and the perimeter fences surrounding the equipment. The proposed navigation equipment consists of: (i) a new Instrument Landing System (ILS) including Glide Path (GP)/Distance Measuring Equipment (DME) and Localizer (LLZ) stations for Runway 10; and (ii) a new Doppler VHF Omnidirectional Range (DVOR) and DME at PAP for terminal and en-route services.

(iii)Runway Lightning Equipment (US$1 million): AF financing would support the repair

or replacement of runway lightning equipment at PAP. This would include, inter alia, the procuring and installation of runway lightening equipment including safe and sufficient energy supply. The equipment is planned to consist of: (i) a new Precision Approach Path Indicators (PAPI) for Runway 28 and Runway 10; and (ii) a new Category I Precision Approach Lighting System (Runway 10).

Sub-component 2.2: Continued Works Trutier Debris Processing Facility (US$6.15 million) 19. This sub-component would finance continued works at the Truitier debris treatment center to ensure continuity of ongoing debris removal operations. To date, Trutier has received financing by the GoH and other donors and NGOs, such as inter alia, the Haiti Reconstruction Fund (HRF), the United National Development Programme (UNDP), United National Office for Project Services (UNOPS), and American Red Cross, among others. The pilot debris-processing facility has been in operation for 21 months and has processed approximately 1,000,000 m3 of incoming rubble since its construction, of which 40 percent has been reused in situ for reconstruction activities and rehabilitation of the municipal landfill, including platform construction and road construction, rehabilitation and maintenance. These recycled materials would also be used for road rehabilitation. This component would finance the continuation of these activities for 8 to 12 months until the closing of debris removal projects by partner organizations. The site is has proven critical to date, as it is the only site accredited by the GoH and acting in compliance with International Safeguard Standards. Sub-component 2.3: Road Rehabilitation in North Department (US$8.85 million) 20. This sub-component would finance continued economic recovery and reconstruction by rehabilitating the existing roads between Cap Haitien and Labadie, and between Milot and Cap Haitien, both key roads for tourism development. These two road sections comprise critical linkages along the Labadie – Cormier Beach Hotel Area – Cap Haitien – Milot (entrance to the

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National Historic Park) corridor, a critical and catalytic investment. Under the Transport and Territorial Development Project (P095523), an 8 kilometer section was rehabilitated. The proposed additional roads to be rehabilitated would open this corridor for both tourists and the local population alike, allowing for all weather access for cars and buses. These roads link a major hotel corridor (Labadie, Cormier, Cap Haitian) with the potential for more than 700,000 tourists per year, to a major touristic destination, the National Historic Park and Citadelle of King Christophe, classified by UNESCO as a World Heritage Site. For both roads, all design and standards would be prepared in compliance with road safety best practices. Activities will complement the rehabilitation of the National Historic Park and the classified historical center of Cap Haitian, to be financed by the proposed Jobs Creation and Growth Project (P129749), currently under preparation. 21. Labadie to Cap Haitien: This road is divided into two homogenous sections: Section 1 between Cap Haitien and Cormier (5.7 km), and Section 2 between Cormier and Labadie (1.5km) (see Annex 7 for a map of the road). Preliminary designs and an EIA have been prepared under an IADB-financed transport project. The design would be adapted to limit environmental and social impacts and would develop a standard to allow an all weather access for cars and tourist buses. Rehabilitation works would consist of paving the existing road and critical spot interventions, aiming to increase the resilience of the system in key damaged and vulnerable areas. An EMP and a RAP would be developed in addition to a gender balanced sub-project for local communities. 22. Cap Haitien to Milot: The road to Milot stems off of Route Nationale 3, running from Barriere Battant and ends at the National Historic Park Entrance. This road is divided in two homogeneous sections: Section 1, a peri-urban section between Barriere Battant and Milot Hospital (1.7km), and Section 2 between Milot Hospital and the NHP Entrance (0.7km). For Section 1, a technical design and standard has been developed for the rehabilitation of RN3 from Cap Haitien to Barriere Battant, financed under the ongoing Transport and Territorial Development Project (P095523), and would be reused. A corresponding EMP would be prepared, and environmental and social impacts are expected to be limited. For Section 2, a specific design would be prepared, adapted to the urban environment, to improve accessibility of the Entrance, allowing for both cars and pedestrians. The project may also finance rehabilitation works of the road.

Component 3: Institutional Support, Reconstruction Planning and Project Management (US$2.7 million)

23. The proposed AF would provide institutional support to the Ministry of Public Works, Transport, Energy and Communications (MTPTEC) to continue to, inter alia: (i) restore the functioning capacity of key technical offices involved in the reconstruction process, such as the Transport Directorate; Public Works and Urban Planning Directorate including the BTEB, and the Road Maintenance Service; the Port au Prince Urban Infrastructure Maintenance Service; National Heavy Equipment Center (CNE); and the Data Management Unit; (ii) carry out planned activities for the short-medium and long term reconstruction phases; (iii) carry out institutional strengthening activities; and (iv) finance project management activities. Activities will consist of logistical support by providing goods, data management equipment, technical assistance and

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consultants, software and hardware to enhance the road and bridge management system, as well as the construction of offices and equipment, if necessary. 24. In addition, the AF would finance the incremental costs of project administration, supervision, monitoring and evaluation expenses that will be incurred by both MTPTEC-UCE, and MEF-UCP.

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Annex 4: Revised Estimate of Project Costs HAITI: Infrastructure and Institutions Emergency Recovery Project

Component 1: Restoring Key Economic and Financial Functions of the Recipient US$

equivalent 1.1 Small customs building at airport Construction of the customs building at the Airport 1,500,000 1.2. Accountability and efficiency Supply chain of fiscal reporting and execution and linking systems

(e.g., investment, current expenditure); Treasury software and system links to sector ministries; records management; support building international accounting standards (OCPAH); operationalize public investment systems with implementation units in ministries (UEPs); improve internal and external audit and control (CSCCA/IGF).

4,800,000

1.3 Transparency and participation Public access to government information & data (eGov); data collection, statistics and records management; anticorruption activities of the anticorruption agency (ULCC) and systems links to procurement (CNMP)

1,600,000

1.4 Equity and responsibility Procurement systems including links to ministries and the national procurement regulatory body (CNMP); regulatory rules and laws for greater equity/access.

3,100,000

1.5 Project Management/ studies or training to strengthen Haiti’s governance and institutional capacity

Overall project management and studies or training to strengthen Haiti’s governance and institutional capacity

1,000,000

Total Component 1 12,000,000 Component 2: Emergency Rehabilitation of Selected Public Infrastructure 2.1 Rehabilitation of Aviation

Safety Infrastructure

Communications Infrastructure 1,500,000 Air Navigation Infrastructure 2,800,000 Runway Lightning Infrastructure 1,000,000 Sub-Total 5,300,000 2.2 Trutier Debris Processing

Facility

Supervision Contract 1,250,000 Works Contract 4,900,000 Sub-Total 6,150,000 2.3 Road Rehabilitations Cap Haitien – Labadie 6,000,000 Design 100,000 Supervision 500,000 Works 5,100,000 EMP, RAP and social technical assistance and compensation 150,000 Sub project for local community 150,000 Barriere Battant Millot 2,850,000 Design 200,000 Supervision 300,000 Works 2,300,000 EMP, RAP and social technical assistance and compensation 50,000 Sub-Total 8,850,000 Total Component 2 20,300,000 Component 3: Institutional Support, Reconstruction Planning and Project Management Total Component 3 2,700,000 TOTAL AF 35,000,000

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Annex 5: Revised Implementation Arrangements and Support HAITI: Infrastructure and Institutions Emergency Recovery Project

1. The financial management, disbursement and procurement arrangements of the original project remain appropriate, are able to absorb additional funds, and will continue under the proposed AF, with minor changes listed below. 5.A Implementation and Monitoring Arrangements

2. The proposed additional grant would continue to be implemented by two existing implementing agencies that are highly experienced in managing IDA resources. These are the Unité Centrale d’Exécution (MTPTEC-UCE), under MTPTEC, and the Unité de Coordination de Projet (MEF-UCP), under MEF. Overall project implementation would be coordinated by the MTPTEC-UCE. The MTPTEC-UCE has extensive experience supporting the implementation of Bank-financed projects. The unit currently has a Project Coordinator, a Procurement Specialist, and a Financial Management Specialist. The unit may be augmented with an additional staff if deemed necessary. 3. Component 1 would continue to be implemented by the MEF-UCP. This unit has experience managing other Bank-financed projects and is experienced in Bank procedures. Given the increase in funding and activities for Component 1 and the need to match the funding increase with enhanced operational efficiency, MEF-UCP may be reinforced through increasing its office management, procurement and financial management capacities. It is proposed that the Financial Inspectorate (IGF, part of MEF) provide strategic advice to the MEF-UCP, given IGF’s overall mandate to provide audits and recommendations of all government ministries and agencies. 4. Components 2 and 3 would be implemented by MTPTEC-UCE. This unit has been managing other Bank-financed projects, including the Emergency Bridge Reconstruction and Vulnerability Reduction Project (EBRVRP) and the Transport and Territorial Development Project (PTDT), and is experienced in Bank procedures. While the MTPTEC-UCE has been successful in assuming the fiduciary responsibility associated with these operations, it has demonstrated a limited capacity in handling technically complex interventions under a tight schedule. As such, a firm would be hired to assist in the preparation of technical bidding documents for major works and supervise execution, if necessary, as additional support. Despite this limited capacity, MTPTEC-UCE remains the best available alternative to manage transport investments within MTPTEC. 5. The fiduciary arrangements will change slightly as the proposed AF would no longer require the services of a fiduciary agent to manage financial management and procurement processes on behalf of the Government. The fiduciary agent was originally hired in July 2010, and failed to operate efficiently in the first 12 months of their contract. Their improved performance during their six month extension helped put effective project administrative, accounting, auditing, reporting, financial, procurement and disbursement procedures in place. The management of fiduciary activities has now successfully transferred back to Government agencies as of February 2012. The project team would continue to ensure that the proposed AF

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remains on track and will closely monitor FM and procurement implementation and arrangements.

5.B Financial Management and Disbursement Arrangements

Financial Management Risk Assessment 6. The Financial Management (FM) arrangements for this proposed AF would build on those existing for IIERP. As such, The FM would be handled by the MTPTEC-UCE (Component 2-3) and by the MEF-UCP (Component 1), as in the original project. Therefore, the Bank’s assessment of MTPTEC-UCE and MEF-UCP’s capacity to implement FM activities for the AF is based on their satisfactory performance to date in implementing the ongoing project. 7. Therefore, as the FM arrangements for the proposed operation follow the current FM arrangements under the original project, they would meet the minimum fiduciary requirements under OP/BP 10.02. However, an FM action plan has been agreed to strengthen the FM capacity of the implementing entities and enable the efficient carrying out of FM aspects of the project including: (i) the recruitment of additional FM specialist to support the FM Specialist in charge of the overall fiduciary system of the Project, (ii) the updating the FM sections of the Project Operational Manual (OM), and (iii) the acquisition of an accounting software capable of automatically producing financial reports. The implementation of this action plan would mitigate the additional FM risk created by the proposed AF. Summary of FM Arrangements 8. Financial Management Institutional Arrangements. Under the proposed AF, the FM would be handled by the MTPTEC-UCE (Component 2-3) and by the MEF-UCP (Component 1), as in the original project. Both the MTPTEC-UCE and MEF-UCP would be responsible for preparing audits of accounts, systems and procedures acceptable to the Bank. The Project Coordinators would be the authorizer of expenditures at the Project level and would work with the FM specialist who is entrusted with the overall FM responsibilities of the Project. The MTPTEC-UCE and MEF-UCP would keep records of all Project-related expenditures in order to prepare financial statements that would be audited annually, by independent auditors acceptable to the Bank. The MTPTEC-UCE would also prepare consolidated Interim un-audited Financial Reports (IFRs) on a quarterly basis due to be submitted to the Bank no later than 45 days after the end of every quarter. 9. Accounting Software. The proposed AF’s accounting records would be maintained using a computerized financial management system. The system would be based on an accounting package capable of producing all the accounting and financial data required, including financial statements, bank reconciliation statements, and all financial reports, such as the Interim Financial Reports (IFRs). The accounting software to be procured would include the following modules to be integrated: Budgeting, general accounting, cost accounting, reporting, monitoring and evaluation, fixed assets management, preparation of withdrawal applications, and tracking of disbursements by donors.

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Internal Controls and Procedures 10. The MTPTEC-UCE and the MEF-UCP would maintain a strong system of internal controls and procedures that would be documented in the Operational Manual to enable all stakeholders of the various components of the Project to be cognizant of the detail Project operating guidelines necessary to implement the program. The Operational Manual would need to be completed before Project Effectiveness. 11. Financial Reporting. The MTPTEC-UCE would be responsible for the preparation of periodic financial reports for the Project. It would prepare IFRs on a quarterly basis, and the annual financial statements. The IFRs would be submitted to the Bank no later than 45 days after the end of the quarter. 12. External Audits. The Project annual financial statements would be subject to external audits and the MTPTEC-UCE would be primarily responsible for ensuring that the auditor’s recommendations are implemented. The external audit would be undertaken by a private firm selected in accordance with independence and competency criteria acceptable to IDA. The audit report would be submitted to the Bank no later than six months after the end of each Project financial year. The audit report would include a management letter containing findings and recommendations relating to the Project’s internal controls at the Project Coordination Unit level. Terms of Reference for the audit would be prepared by the MTPTEC-UCE and submitted to the Bank for its no-objection by the time of negotiations for the Project. The selection of the auditor should be completed by no later than 4 months after Project effectiveness. 13. Supervision plan. Given the high risk of the proposed AF, close supervision of the financial FM system would be required. Supervision missions would be conducted twice a year. The missions would notably focus on the strengthening of the financial management capacity of the MTPTEC-UCE and MEF-UCP. The IFRs and annual audit reports would also be reviewed. 14. Disbursements. Proceeds of the Grant would be disbursed from the Bank on the basis of withdrawal requests by the Recipient using the SOE method which is based on summary reports in the form of Statement of Expenditures for all categories, and where relevant, applications for direct payments to Service Providers and Financial Agents. As with the current operation, two designated accounts would be opened at the Central Bank (Banque de la Republique d’Haiti - BRH). One would be managed by the MTPTEC-UCE and the other by the MEF-UCP.

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Table 7: Allocation of proceeds (*US$ equivalent)

Disbursement Categories

Original Financing

Additional Financing

Total Financing

Financing Percentage (financing percentage is the same for original and additional financing)

(1) Goods, works, Non-consultant services , consultants’ services and Operating costs for Part 1 of the Project

10,000,000 12,000,000 22,000,000 100%

(2) Goods, works, Non-consultant services and consultants’ services for Part 2 of the Project

35,000,000 20,300,000 55,300,000 100%

(3) Goods, works, Non-consultant services, consultants’ services and Operating costs for Part 3 of the Project

5,000,000 2,700,000 7,700,000 100%

(4) Refund of Preparation Advance 15,000,000 - 15,000,000 Amount payable pursuant to Section 2.07 of the General Conditions

TOTAL 65,000,000 35,000,000 100,000,000 5.C Procurement Arrangements

15. Activities financed under the proposed AF would use the essentially the same procurement arrangements and management framework already in place for the original IIERP. All procurement for the proposed activities would be carried out in accordance with World Bank “Guidelines: Procurement of goods, works and non-consulting services under IBRD Loans and IDA Credits and Grants”, January 2011; and “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers”, dated January 2011, the emergency procedures described in OP/BP 8.00, and with the provisions of the Financing Agreement. For each contract to be financed by the Grant, the various procurement and consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame have been agreed upon by the Recipient and the Bank and are shown in the Simplified Procurement Plan below.

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Simplified Procurement Plan 1. The agreed simplified procurement plan is presented below.

Contracts Type Amount

(US$ equivalent)

Procurement method

Est date of award

Component 1: Restoring Key Economic and Financial Functions of the Recipient Construction of small customs building at the airport.

Works, Goods, Consulting Services

1,500,000 ICB Jan 2013

Accountability and efficiency: supply chain of fiscal reporting and execution and linking systems (e.g., investment, current expenditure); assist Treasury and links to sector ministries; support accounting profession (OCPAH); operationalize public investment systems implementation units in ministries (UEPs); improve internal and external audit and control (CSCCA/IGF); and

Works, Consulting Services, Goods

4,800,000 QCBS, Individual Consultants

Oct 2012-end of project

Transparency and participation: enhance public access to government information & data (eGov); improve data collection, statistics and records management; support anticorruption activities of the anticorruption agency (ULCC) and improve its links to procurement (CNMP)

Works, Consulting Services, Goods

1,600,000 QCBS, Individual Consultants

Oct 2012-end of project

Project Management/ studies or training to strengthen Haiti’s governance and institutional capacity

Works, Consulting Services, Goods

1,000,000 QCBS, Individual Consultants

Oct 2012-end of project

Component 2: Emergency Rehabilitation of Selected Public Infrastructure Works and Supply of goods and equipment for aerial navigation system (multiple contracts)

Works, Goods, Consulting Services

5,300,000 ICB, UN agencies, NCB

Nov 2012 – Dec 2013

Trutier Debris Processing Facility

Works Works 4,900,000 ICB Oct 2012

Supervision Consulting Services 1,250,000 QCBS Oct 2012 Road Rehabilitation: Labadie - Cap Haitien

Design Consulting Services 100,000 Direct Contracting

Oct 2012

Supervision Consulting Services 500,000 QCBS Jan 2013 Works Works 5,000,000 ICB Jan 2013 RAP and social

technical assistance and compensation

Consulting Services 150,000 QBS Oct 2012

Sub project for local community

Works, goods, non-consulting services

150,000 QBS, shopping, direct contracting

Jan 2013

Road Rehabilitation: Barriere Battant Millot

Design Consulting Services 200,000 QCBS Oct 2012

Supervision Consulting Services 300,000 QCBS Jan 2013 Works Works 2,300,000 ICB Jan 2013

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RAP and social technical assistance and compensation

Consulting Services 50,000 QBS Oct 2012

Component 3: Institutional Support, Reconstruction Planning and Project Management Technical Assistance to MTPTEC (multiple contracts)

Consulting Services 800,000 QCBS, 3CV

Goods & Equipment – Datacenter (multiple contracts)

Goods, Works, 200,000 NCB, Shopping

Technical Assistance and works with SEEUR Consulting Services, Works

700,000 QCBS, UN Agencies6, Shopping

Building for Road Maintenance, Bridges and Crisis Units

Works 300,000 NCB, UN Agencies7

Abbreviations: ICB = International Competitive Bidding QCBS = Quality- and Cost-Based Selection NCB = National Competitive Bidding QBS = Quality-Based Selection DC = Direct Contracting FBS = Fixed Budget Selection LCS = Least-Cost Selection CQS = Selection Based on Consultants' Qualifications

SSS = Single Source Selection

6 United Nations Office of Project Services (UNOPS), and the International Civil Aviation Organization (ICAO). 7 United Nations Office of Project Services (UNOPS), and the International Civil Aviation Organization (ICAO).

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Annex 6: Environmental and Social Safeguards Framework HAITI: Infrastructure and Institutions Emergency Recovery Project

1. Haiti has an extremely fragile environment, and the damage caused by the earthquake to the physical and social environment has been extensive. Following the earthquake, immediate environmental concerns included debris management including hazardous waste and release of polluting substances. These continue to remain issues of concern as debris removal activities are still underway in the country, and are expected to continue for the next 8-12 months. There is hardly any forest cover left in the country, and the terrain is steep with unstable slopes. The need for fuel may lead to further deforestation as people cut down the remaining trees, and the potential damage to aquifers and groundwater is high. Given the need for urgent siting and construction of new infrastructure, there is also a risk of inadequate capacity or time to undertake the required environmental and impact assessments. 2. The original project has assessed these risks and put in place measures to safeguard the environment and social related aspects of the project. On the environment side, the safeguard issues are under the original project were related to waste and debris management, air pollution control issues from debris processing at Trutier, worker safety issues, and issues related to erosion control. On the social side, the injuries and loss of life, as well as destroyed housing and economic assets, have affected poor and rich alike. The poor are however particularly vulnerable, and many are still dependent on assistance are likely to remain so for a considerable time. Their vulnerability to further shocks, whether economic or physical such as rains or hurricanes, speak to the continued need of the reconstruction effort. 3. An Environmental and Social Management Framework (ESMF) guiding principles was prepared and disclosed and Environmental Management Plans (EMPs) and Resettlement Action Plans (RAPs) for debris processing, canal cleaning, bridge, and road works were prepared and cleared by the Bank for the subprojects financed under the original project. Table 1 outlines the safeguards management instruments in detail. The documents are currently disclosed on the Infoshop website and locally on the Ministry of Public Works, Transport, Energy and Communications (MTPTEC). Specifically, the EMPs and the Rapid Social Assessment and ongoing Community Relations Program for Trutier will continue to apply under the AF. The same procedures and principles that were used to prepare the EMPs and RAPs for the roads projects under the original project will be used to generate new EMPs, and as necessary, RAPs, for the new road works financed under the AF. A new EMP that focuses on waste disposal of old airport equipment will also be generated under the AF. The purchase of equipment and other activities financed to upgrade the aviation safety equipment will not require any land acquisition nor will these activities introduce any social impacts requiring mitigation.

Safeguard Implementation under the Original Project

4. At the Trutier Debris Processing Facility, the project has recruited an operator to operate the day-to-day activities of the landfill. Environmental supervision is undertaken by an internationally recruited firm, while social supervision is undertaken by a social specialist in the Unité Centrale d’Exécution (Project Coordination Unit) within the Ministry of Public Works, Transport, Energy and Communications (MTPTEC-UCE). For the other works supported under

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the project, the MTPTEC-UCE, provides both environmental and social supervision. Currently one social specialist and one environmental specialist support this project. 5. The implementation of environmental safeguards under the original project has been satisfactory. There are several reasons for this which could serve as a positive lesson for other projects: (i) the environment supervision team has a highly competent and technical team; (ii) the team operates from the Trutier Debris Processing Facility and therefore is in hourly contact with the landfill operator; (iii) issues regarding on-site air pollution, worker safety, etc, are therefore immediately flagged and the Bank’s intervention, where needed, is quickly requested. Each morning, the supervision team provides safety drills for the operators and workers since this poses the highest risk. In addition, several times a day, air quality is monitored for a range of pollutants and particulates. While some pollutants can be evaluated on site, more complex analyses are done in Canada each week and returned to Haiti, at which point mitigation measures are put in place. The Bank’s supervision of environmental issues and assessment of the air quality at Trutier shows that currently the health risk from the earthquake rubble is minimal. The supervision team is in turn supervised by the MTPTEC-UCE, but that level of supervision is relatively weak, and the MTPTEC-UCE environment specialist depends largely on the internationally recruited environment firm to provide technical expertise. This is largely because the environmental specialist also supervises a large number of IADB projects in addition to the Bank projects. While this does not affect the supervision at Trutier because of the international expertise already in place, this poses more of an issue for the road works, which rely on the MTPTEC-UCE to provide the necessary environmental supervision. To resolve this issue, the project will be recruiting another environment specialist to work at the MTPTEC-UCE. 6. The implementation and supervision of the social safeguards under the original project has been satisfactory. The implementation of the RAPs for the Canal de Bois de Chaine (Canal Cleaning) and Route Nationale 4 (RN4) were completed and were well received by the affected population. Under the Canal subproject, 83 internally displaced people who were living in tents needed to be temporarily moved in order to allow for the urgent canal cleaning works to take place. These people were offered either an opportunity to participate in a cash-for-work program or were offered compensation to leave the site temporarily. Under RN4, 44 people were affected and offered compensation under the RAP. 7. The implementation of the RAPs for Route Nationale 2 (RN2) and Rivère Fauché Bridge are underway and will be completed shortly. 8. At the Truitier Debris Processing Facility, the rapid social assessment carried out for the site analyzed the socio-economic profile of the surrounding communities. No physical resettlement was necessary and the project investments did not limit access to ongoing waste-picking activities. Furthermore, the company, per the bidding document requirements, hired local community members to assist in the site operation and has financed a range of community outreach activities. 9. All subprojects resulted in temporary labor opportunities for the local population – both for men and women. Upon completion of all RAPs, an ex-post evaluation of project affected people is carried out by a third party monitor.

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10. Implementation was carried out by a social specialist within the MTPTEC-UCE who recently left but will be replaced soon. An additional social specialist will be hired and trained to support the additional workload. These social specialists are specifically tasked with the preparation, coordination of the implementation and supervision of all RAPs required by the Project. Lessons to continually improve safeguards management have been raised and addressed through ongoing project implementation support. Safeguards under the Additional Financing 11. For the additional financing, the supervision set up will continue as under the original project. For the other activities supported under the AF, specifically the road rehabilitation works, and the aviation safety equipment installation activities at the airport, the MTPTEC-UCE will continue to provide supervision support for environmental and social safeguards. The MTPTEC-UCE will recruit two additional specialists, one social and one environmental, to supplement the existing team, given the expanded activities. 12. The social assessment process has analyzed and addressed how the current situation and the proposed reconstruction efforts affect different groups, including gender aspects, impacts on children and the aged, and people with disabilities or injuries. World Bank safeguards policies will continue to apply to the AF, and the ESMF summarizes key principles as well as procedures to identify, minimize or mitigate any adverse impacts; consult with local communities and other key stakeholders such as civil society; and integrate environmental and social considerations into engineering designs and other activities. 13. A particular area of concern is displacement of local populations. Large numbers of people have been internally displaced, and there is strong pressure to move people to smaller villages and towns, and reduce the congestion of Port au Prince. Any reconstruction of housing or relocation of groups of people will need to be addressed with a great deal of caution, to ensure that not only property but also livelihood opportunities are restored and maintained during construction. There may also be pressure to simply evict people on the basis of them being illegal occupants of public space. The project triggers OP 4.12, Involuntary Resettlement, and under the original projects Resettlement Action Plans (RAPs) were prepared and are currently under implementation. Additional RAPs will be prepared for the road rehabilitation works to be financed under the AF, using a similar format to the original project. 14. The second area of concern is the expected increase in tourists travelling along the rehabilitated roads in the North, and the socio-economic opportunities and risks that this may entail. A systematic, gender-informed social assessment would analyze and address how the current situation and the proposed reconstruction efforts affect different groups, (women, children, the aged and people with disabilities) and would look at how specific actions can be included to address their needs in terms of economic opportunities; personal safety; vulnerability to crime, violence or exploitation; and displacement or loss of livelihood.

15. There continues to be strong pressure to take urgent decisions in a technocratic or autocratic manner, without participation or consultation with affected communities. The ESMF

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already incorporates principles to disseminate information transparently, and to involve affected communities through a systematic consultation process. This will continue under the AF and EMPs will further detail the process. The project will ensure that local populations are actively involved in the reconstruction effort. Experience shows this contributes to solutions being more acceptable and viable. Where possible, therefore, community led reconstruction rather than contractor led reconstruction will be supported. 16. Coordination and implementation capacity of the Government remains weak, in spite of progress made in terms of capacity building under the current project. The AF will therefore require continued follow up and systematic implementation support in the area of environmental and social management. All documentation and plans would be made available to all concerned agencies, as well as disclosed in public areas and on appropriate Government and other websites. Trutier Debris Processing Facility 17. The activities at the Trutier Debris Processing Facility will be inside the existing fenced perimeter and will not introduce any additional environmental or social impacts in terms of resettlement, access or land acquisition, and therefore no additional mitigation measures or instruments are required. The ongoing environmental management and social programs will continue to be operationally supported under the AF and supervised under the existing framework and with the existing safeguards instruments. Road Rehabilitation Works 18. For the road rehabilitation investments, there will need to be thorough community consultations, as well as a site-specific assessment of the social and environmental impact of the road rehabilitation works. EMPs and RAPs, as necessary, will be prepared prior to the start of the works. 19. Labadie to Cap Haitien: The road from Labadie to Cap Haitien will involve surface rehabilitation (paving, sidewalk, road safety equipment) under the AF for which an EMP will be prepared. To date, an Environmental Impact Assessment (EIA) exists for the road between Cap Haitian and Labadie, and will be updated according to Bank Safeguards policies in advance of the commencement of works. No land acquisition is expected to be necessary for the rehabilitation of this road segment. Social impacts related to road safety and the influx of construction workers may exist but are expected to be limited given the low density population along the road corridor. These impacts will also be addressed through the EMP that will be developed along the same principles of the EMPs of activities under the original project. Depending on the technical specifications required for rehabilitation of the road, there is a possibility of minor deviations of the current route. If necessary, an abbreviated RAP will be prepared along the same principles and procedures of the RAPs that guided the construction of the RN2 and RN4 under the original project. Procedures for chance finds of physical cultural resources will be included in the EMP. 20. Cap Haitien to Milot: The road from Cap Haitien to Milot will be involve surface rehabilitation (paving, sidewalk, road safety equipment) under the AF for which an EMP will be

60

prepared along the same principles of the EMPs that guide RN2 and RN4 under the original project. Social impacts related to road safety will be limited will be addressed through the EMP. This road segment has been screened for potential resettlement impacts and it has been determined that these will not exist given the scope the works, where all rehabilitation activities will remain within the existing paved area and no realignment activities will occur. This EMP will also contain procedures to guide chance finds of physical cultural resources. Construction of Small Customs Building 21. The construction of the small Customs Building at the Airport will require an EMP, which will be prepared by the same consultant or firm as the other EMPs in advance of the commencement of activities. The small Customs Building will be built in place of the former Customs Building that was destroyed and subsequently demolished following the earthquake. The land on which the new Small Customs Building would sit belongs to the Customs Department and is completely fenced off with no squatters in place. The MEF-UCP has indicated that neither Land Acquisition nor Resettlement is expected as a result of this activity. No other additional safeguards are anticipated. Since the construction will take place at the same location as the former customs building, neither land acquisition nor resettlement issues are anticipated. In the unlikely event that Resettlement comes up, a RAP will be prepared based on those RAPs prepared under the original project.

Aviation Safety Equipment 22. The minor equipment installation works at the Airport do not pose a serious safeguard risk, however, disposal methods (recycling, selling, land-filling) for the old airport equipment will need to be assessed to ensure the safe and appropriate disposal of this equipment. An EMP that focuses on waste disposal alternatives will be developed. World Bank Safeguard Policies 23. The new and modified activities proposed by the additional do not trigger any new safeguard policies. There are also no new activities of a Category A nature proposed under the AF. However, the project still remains a Category A because of continued financing of the Trutier Debris Processing Facility under the additional financing. As such, the safeguard policies that applied to the original project still apply to the proposed AF, with the exception of Pest Management (OP/BP 4.09). These include:

• OP/BP 4.01, Environmental Assessment • OP/BP 4.04, Natural Habitats • OP/BP 4.11, Physical Cultural Resources • OP/BP 4.12, Involuntary Resettlement

24. Pest Management (OP/BP 4.09) was triggered under the original project as a precaution because of the project’s involvement in the landfill at Trutier, but no Pest Management Plan was prepared. However, since there have been no pest issues associated with rubble processing, nor

61

with the rest of the project, approval was granted to remove the OP from the list of policies triggered. 25. Physical Cultural Resources (OP/BP 4.11) policy was triggered under the original project as a result of the earthquake rubble which was being collected from around Port au Prince and processed at Trutier Debris Processing Facility. Given that this rubble could contain materials of cultural significance, it was important to trigger this OP. However, to date, no material of cultural significance has been found. Beyond Trutier, the Physical Cultural Resources policy is not expected to be used in other additional activities because there will be no sub-surface excavation during the road works, nor any activities to expand the road that could potentially unearth material of cultural significance. The EMPs will provide provisions and guidelines for handling chance finds of cultural significance, in the event that anything is discovered. 26. Natural Habitats (OP/BP 4.04) policy was also triggered under the original project as a precautionary measure. Although it remains triggered for the AF, it is unlikely that the project will have any impact on the natural habitat given that the road works under the AF will focus on the rehabilitation of the existing road and there will be no sub-surface excavation, or extension or widening of the roadway. 27. To address these safeguard policies, the original project had developed frameworks and plans. The original ESMF contains key principles to ensure that project activities and the wider coordination efforts: (i) are environmentally and socially sustainable; and (ii) address existing and potential future risks, including project-induced risks from the reconstruction efforts. In addition, because the project activities are already identified, EMPs will be developed and disclosed for both the road between Labadie and Cap Haitien, and between Cap Haitien and Milot and for the aviation safety equipment installation activities at the airport. If necessary, an abbreviated RAP for the road between Labadie and Cap Haitien will also be prepared and disclosed. 28. In the medium term, it is expected that the ESMF would continue to form the basis of a coordinated framework for the Government and the international community to incorporate sound environmental and social principles into the broader reconstruction effort. The project would therefore coordinate with other Government agencies, the international community, as well as with civil society and the private sector, to develop a shared and consistent approach incorporating key principles not only of the Bank's safeguards policies but also good practice standards from other agencies. Equal emphasis would be put on: (i) policies and procedures; (ii) strengthening implementation capacity; and (iii) citizen engagement. Safeguards Management Capacity

29. The Ministry of Public Works, Transport, Energy and Communications (MTPTEC), with support from the MTPTEC-UCE, has been formally responsible for safeguards management under the project. Their capacity to coordinate and manage safeguards issues remains low, and as with other project activities, the implementation capacity has been built up gradually in phases. Under the original project, an environment specialist and a social specialist were recruited and now, under the proposed AF, two more specialists (one environmental specialist

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and one social specialist will be recruited. For the Trutier Debris Processing Facility, an internationally recognized firm was recruited to conduct on-site supervision. Given that Haiti does not have the expertise to manage the high environmental risks (air and water pollution, etc) that come with managing such a debris site, their expertise has been welcomed in Haiti and the continued high caliber of management that such a firm brings, is also expected in the AF financed works at Trutier. For the other works, specifically the road rehabilitation works and aviation safety equipment installation activities, the MTPTEC-UCE will continue to provide supervision. Increasing the number of the social and environment staff will ensure that there is environmental and social due diligence taking place in the North Department. 30. A robust institutional strengthening program will be supported, and full responsibility for safeguards management would rest exclusively within to Haitian implementing agencies only when there is sufficient guarantee that they have sufficient capacity. This will require consistent supervision and implementation support from qualified environmental and social experts. The MTPTEC-UCE staff will continue to benefit from the joint environment and social training offered jointly by the Inter-American Development Bank (IADB) and the World Bank. 31. The project will establish a set of transparent mediation and grievance redress mechanisms. Ongoing consultations with affected and concerned groups will be set up to address potential disagreements or conflicts related to the reconstruction effort, and independent mechanisms such as advisory panels will be established. Their functioning will be monitored as part of project supervision.

Table 8: Safeguard Instruments

Description Original Project Additional Financing Date Delivered 1 Environmental

Assessment (OP/BP 4.01)

Environmental and Social Management Framework (ESMF) completed- serves as a guide to contractors.

Existing ESMF will remain in place.

April 23, 2010

2 Natural Habitats (OP/BP 4.04)

Triggered as a precaution-no natural habitat issues found

Remains triggered. No natural habitat issues are likely because new works focus on renovations and do not extend or widen the roads.

N/A – EMPs will detail assessment and mitigation of any Natural Habitat issues

3 Physical Cultural Resources (OP/BP 4.11)

Policy Triggered No physical/cultural or chance finds likely. However, policy remains triggered as a precaution.

N/A – EMPs will detail assessment and mitigation of any Physical Cultural Resources issues.

4 Involuntary Resettlement (OP/BP 4.12)

RAPs complete for RN2, Rivère Fauché Bridge

New RAPs would be developed as deemed necessary, and disclosed prior to the commencement of works.

October, 12, 2012

5 Pest Management (OP/BP 4.09)

Triggered as a precaution- no pest management issues found

Not triggered. N/A

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Table 5: Original Project Safeguard Documents

Project/Subproject Safeguard Document Date Disclosed 1 Infrastructure & Institutions

Emergency Recovery Original Project Environmental and Social Management Framework – Base Principles

April 23, 2010

2 Emergency works – Route Nationale 4 Environmental Management Plan March 18, 2010 3 Rehabilitation Works – Route

Nationale 4 Environmental Management Plan March 18, 2010 Resettlement Action Plan August 6, 2012

4 Rehabilitation Works – Route Nationale 2

Environmental Management Plan inclusive of Rivère Fauché Bridge

March 18, 2010

Resettlement Action Plan April 26, 2011

5 Reconstruction of Rivère Fauché Bridge along RN2

Resettlement Action Plan October 18, 2011

6 Canal Cleaning - Canal de Bois de Chaine

Environmental Management Plan March 18, 2010 Resettlement Action Plan May 18, 2010

7 Trutier Debris Processing Facility EIA and Environment Management Plan March 17, 2011 Baseline Census and Rapid Social Assessment March 10, 2011 Baseline Environmental Site Assessment Report

April 25, 2011

Table 6: Safeguard Documents to be Prepared and Disclosed under Proposed AF

Description Safeguard Document Expected/Date Disclosed

1 Trutier Debris Processing Facility Environment Management Plan March 17, 2011 Baseline Census and Rapid Social Assessment March 10, 2011 Baseline Environmental Site Assessment Report

April 25, 2011

2 Road Rehabilitation Works – Labadie-Cap Haitien

Environmental Management Plan October 12, 2012 Resettlement Action Plan (tbc) October 12, 2012

3 Road Rehabilitation Works – Cap Haitien-Milot

Environmental Management Plan November 12, 2012

4 Aviation Safety Equipment Installation Environmental Management Plan November 12, 2012

5 Small Customs Building Environmental Management Plan November 12, 2012

G R A N D E -A N S E

N I P P E S

S U D S U D - E S T

O U E S T

C E N T R EA R T I B O N I T E

N O R D -E S T

N O R D

N O R D - O U E S T

MarcelineSudre

CarrefourBaraderes

Gebeau

La Cahouane

MarcheLéon

Vieux Bourg d'Aquin

CarrefourCharles

SourceChaude

Crrf. Joute

Plaisance

Morne Occo Crrf. Des Ruisseaux

BlockaussSt. Antoine

Trouin

Montrouis

PontSondé

Delegram

Shada

Delmas

Trianon

Carrefour Dufort

Sta. Terrienne

Sentard

LesPoteaux

HascoCroix des Missions

Bon Repos

Ville Bonheur

PORT-AU-PRINCE

Pont Miragoâne

Fonds Jean Noel

Bodane

Croix Fer

RoysecCasse

Baptiste

Crrf. Mace

FondParisien

St.Etienne

Barrage

73º30' 73º00' 72º30' 72º00'

20º00'

19º30'

19º00'

18º30'

20º00'

19º30'

19º00'

18º30'

74º30' 74º00'

72º00'72º30'73º00'73º30'74º00'74º30'

To Santiago

To Barahana

DO

MI

NI

CA

N

R

EP

UB

LI

CPort-Margot

Limbé

Bas Limbé

Plaine duNord

Milot

Dondon

Pignon

St. Raphael

La Victoire

PlaisanceGrd. Riv. du Nord

Acul duNord

CAP-HAÏTIEN

Quartier MorinLimonade CoracolPilate

Le Borgne

Bombardopolis

Jean-Rabel

PORT-DE-PAIX

Bassin-Bleu

St. Louis

Ile de la Tortue

Chansolme

Gras Morne

MÔLE ST. NICOLAS

Anse-á-Foleur

Baie de Henne

Verrettes

Pte. Riv.de l'Artibonite

St. Marc

Grande Saline

St. Michelde L'Attalaye

GONAÏVES

La Chapelle

Dessalines

L'Estere

Desdunes

EnneryMarmelade

Terre-Neuve

Anse-RougeTrou Du-Nord

Ouanaminthe

VallieresRanquitte

Bahan

Perches

MonbinCrochu

Ste. Suzanne

TerrierRouge

FORT LIBERTÉ

Maïssade

Thomonde

Boucan Carre

HINCHE

Cerca-la-Source

Thomassique

Cerca Carvajel

MirebalaisSaut d'Eau Lascahobas

Belladére

Savanette

Tiburon Camp-Perrin

Port-Salut

Roche-á Bateau

LesAnglais Maniche

ChardonnieresPort-á-Piment

Côteaux

St. Jean du Sud

Cayes

Ile a Vache

TorbeckArniquet

Cavaillon AquinSt. Louis du Sud

Dame-Marie

Anse d'Hainault

Les Irois

Petite Troude NippesMoron

Abricots

Bonbon

JEREMIE

Roseaux

Beaumont

Chambellan

Corail

Pestel

L'Asile

Baraderes

Anse-a-Veau

MiragoânePetite Rivierede Nippes

BainetCôtes-de Fer

JACMEL

Cayes-JacmelMarigot

Belle-Anse

Grand Gosier

Anse a Pitres

Thiotte

Léogâne

Arcahaie

Cabare

Gressier

Cornillon

Crois des Bouquets

Petion-Ville

Carrefour

Kenscoff

Ganthier

Thomazeau

FondsVerrettes

PetiteGoâve

GrandGoâve

Canice

MontOrganisé

Capotille

Pointe a Raquette

Anse a Galet

La ValleChantal

A T L A N T I C O C E A N

C A R I B B E A N S E A

G o n â v e C h a n n e l

S a i n t M a r c C h a n n e l

GONÂVEISLAND

Tortue Island

Vache Island

CayemitesIslands

Cape Rose

Grande Anse

BassD

roit

Voldro

gue

Rose

aux

Point Gravois

Cavaillon

Grande

Nippes

MiragoâneLake

Cotes de Fer

Bainet

Gra

nde

Ja

cmel

Gos

sellin

e

Cape Jacmel

Momance

Grise

Blanche

Saumatre Lake

CaimenLake

Port-Au-PrinceBay

Donye

n

Torc

elle

Couline

Point Lapiere

Qui

nte

Bayonnais

Colo

mbi

er HennesBay

Pric

e

Point Jean-Rabel

Gatinette M

ousti

que

Les Trois Rivieres

Tortue Channel

Limbe

Acul Bay

Mancenille Bay

Mar

ion

Great Northern

Bouyaha

Belle

Canot

Font Grass

Sar

nana

Estére

ARTIBONITE

Thomonde

Boucan Carre

Fer-a-Cheval

PeligreLakePeligre

Dam

Artibonit

e

JAMAICA

HAITI

U.S.A.

CUBA

DOMINICANREPUBLIC

PUERTORICO (US)

THE BAHAMAS

ATLANTIC OCEAN

Caribbean Sea

Lesser Antilles

0 10 20 30 40 50

KILOMETERS

HAITIINFRASTRUCTURE AND INSTITUTIONS

EMERGENCY RECOVERY PROJECTAdditional Financing

PROJECT ROAD

COMMUNE BOUNDARIES

DISTRICT BOUNDARIES

ASPHALT ROADS

GRAVEL ROADS

DIRT ROADS

RIVERS

COMMUNE HEADQUARTERS

SELECTED TOWNS

NATIONAL CAPITAL

INTERNATIONAL BOUNDARY

SEPTEMBER 2012

IBRD 39542

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endo r s emen t o r a c c e p t a n c e o f s u c h boundaries.