Document of / )

The World Bank

FOR OFFICIAL USE ONLY

Report No. P-5202-SO

MEMORANDUM AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL DEVELOPMENT ASSOCIATION

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED CREDIT OF SDR 14.1 MILLION

TO THE

SOMALI DEMOCRATIC REPUBLIC

FOR AN

INFRASTRUCTURE REHABILITATION PROJECT

SEPTEMBER 14, 1990

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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SOMALIA

Infrastructure Rehabilitation Project

CURRENCY EQUIVALENTS

Currency Unit = Somali Shilling (So. Sh.)SoSh 1.00 = US$0.0017US$1.00 = So. Sh. 583 1/SDR 1.00 = US$1.31US$1.00 = SDR 0.76

WEIGHTS AND MEASURES(Somalia uses the metric system)

1 meter (m) = 3.28 feet1 kilometer (km) = 0.62 miles1 square kilometer (km2) 0.386 sq. mile1 hectare (ha) = 2.47 acres

1 metric ton (ton) = 2,204 pounds1 Imperial gallon (Ig) = 1.2 US gal, 4.55 liters1 cubic meter = 220 Ig, 264.2 US gal

ACRONYMS AND ABBREVIATIONS

DOH - Directorate of HighwaysGOS - Government of Somalia

HMA - Highway Maintenance AreaIDA - International Development AssociationMPT - Ministry of Posts & TelecommunicationsMWA - Mogadishu Water Agency

RMF - Road Maintenance Fund

GOVERNMENT OF SOMALIA

FISCAL YEAR

January 1 - December 31

1/ as of October 7, 1989

FOR OFFICIAL USE ONLY

SOMALIA

INFRASTRUCTURE REHABILITATION PROJECT

CREDIT AND PROJECT SUMMARY

Borrower: The Somali Democratic Republic

Beneficiaries: Directorate of Highways (DOH)Mogadishu Water Agency (MWA)Ministry of Posts & Telecommunications (MPT)

Amount: SDR 14.1 million (US$18.5 million equivalent)

Terms: Standard IDA terms with 40 years maturity

On-lending Terms: As a loan of $6.0 million to MWA at 12.OZinterest rate to be repaid over 20 yearsincluding four years grace.

Project Financing Plan: Government: US$ 2.5 millionIDA: US$18.5 million

Total US$21.0 million

Economic Rate of Return: 43Z

Staff Appraisal Report: Report No. 8220-SO dated September 14, 1990

Map: No. IBRD 22016

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

MEMORANDUM AND RECOMMENDATION OF THE PRESIDENTOF THE INTERNATIONAL DEVELOPMENT ASSOCIATION

TO THE EXECUTIVE DIRECTORSON A PROPOSED CREDIT TO

THE SOMALI DEMOCRATIC REPUBLICFOR AN INFRASTRUCTURE REHABILITATION PROJECT

PART I

Country Policies and Bank Group's Assistance Strategy

1. Somalia is among the poorest countries in the world with a percapita GDP of US$173 in 1989. The country is physically large and sparselypopulated by about 6 million people. Its economy is heavily affected bythe country's arid to semi-arid climate. The mainstay of the economy haslong been nomadic pastoralism; about 50 percent of the population arenomads. The agricultural sector's contribution to GDP in an average yearis about 62 percent and livestock exports account for about 60 percent oftotal exports over the past five years. Somalia's level of economic andsocial development is illustrated by a high infant mortality rate, lowaverage life expectancy, and very low literacy.

2. After assuming power in 1969, the Somali Government adopted aprogram of "scientific socialism" based on the leadership of the publicsector and cooperatives, supported by Soviet and Eastern European aid andtechnical advice. In the early 1970s public sector ownership andmanagement expanded through nationalization and the creation of new publicenterprises. Modest growth was achieved in the first half of the 1970s,but during the second half of the 1970s large imbalances in the economyappeared due to increased military expenditures related to the war withEthiopia for the Ogaden region, as well as inappropriate economic policies.Over the decade average annual GDP growth was about 3 percent, indicatingno growth in real per capita income.

Economic Performance Since 1981

3. In 1981 the Somali Government severed relations with the SovietUnion, and Eastern Block economic and military aid was replaced withsupport from the United States and Western Europe. At the same time, theGovernment began the process of moving from a highly controlled to an open,market-oriented economy.

4. The period from 1981 to the present has been characterized byalternating periods of good economic management, including liberalizationmeasures which led to vigorous private sector responses, interspersed witheconomic backsliding where fiscal discipline was relaxed and the exchangerate was allowed to become overvalued. For example, in 1981-83 Somaliaundertook policy reforms within the framework of an IMF-supported program,including an exchange rate adjustment, fiscal and monetary restraint, andsignificant liberalization of domestic agricultural pricing and marketing.These measures, supported by an increase in donor aid organized through aConsultative Group in 1983, achieved positive results until a Saudi ban onSomali cattle exports on health grounds, and a major drought in late 1983,

led to fiscal deficits which the Government was unable to control. Theeconomic reform program was subsequently abandoned.

5. In 1985, the Government once again undertook an economic reformprogram with IMF/World Bank support, which included a foreign exchangeauction system and removal of most internal price controls. This programwas, despite some difficulties from declining workers remittances and adelay in the release of external assistance, implemented successfully in1986 and 1987. It was supported in June 1986 by a quick-disbursing IDACredit (ASAP I).

6. In mid-1987, however, the Government abandoned the programunder the pressure of a declining exchange rate which reflected theGovernments failure to maintain fiscal discipline. In July 1988 theGovernment attempted to undertake a new reform effort, including furtherliberalization measures including the export of skins, frankincense andmyrrh, the importation of veterinary drugs, and the removal of monopoliesin banking, insurance and maritime transportation. The Bank approved asecond quick-disbursing IDA credit (ASAP II) in support of this program.

7. While the Government has followed through on most of themeasures to liberalize the economy as announced in 1989, it has not beenable to adhere to the monetary and fiscal targets established inconjunction with the IMF due to weak commitment and implementationcapability as well as deterioration of political security situation in thecountry throughout 1989. A deepening crisis in the banking sectorrestricted exporters' access to their own accounts, and acceleratinginflation put pressure on the exchange rate in the parallel market. Inview of the deteriorating performance of the Government, including failureto adhere to the IMF-agreed targets, release of the Second Tranche of ASAPII is being held back. The Bank formally communicated to the Government,at the end of August, that it intends to cancel the Second Tranche of ASAPII unless the revised fiscal, monetary and exchange rate targets agreedwith the Fund are implemented by November 1990.

Current Outlook

8. The current outlook is not favorable for an early return to goodeconomic policies. The Government continues to face widespread internaldissent and armed opposition. While it has announced its intention toadopt a multi-party system, there is not yet any clear solution forresolving the political tensions that exist. The Government's internal andexternal security concerns have led to expenditures for military purposeswhich equal about 80 percent of total Government expenditures, which isunlikely to change until the security situation improves. Production andtrade have been disrupted by the armed conflict, and exports dropped to arecord low of US$58 million in 1988. The revenue to GDP ratio is at an alltime low of 5.3 percent, and total debt arrears now are about US$700million, of which US$150 million is owed to the IMF. Thus the Government'sability to undertake an effective economic reform effort is seriouslyrestricted by its current circumstances.

-3-

Central Development Issues

9. The vigorous supply response by the private sector during thesuccessful periods of economic reform demonstrated that the Somali economycan expand under conditions of good economic management. For theforeseeable future, the livestock sector will continue to be the majorcontributor to Somalia's output, exports and employment. Even though therangelands are near their maximum carrying capacity, livestock off-take canbe substantially increased by improving animal health services, marketingsystems and related facilities. The sector could also support much largerdairy production. With improved irrigation and agricultural supportservices, much growth can be expected from the crop subsector, particularlyin diversifying into high-valued export crops such as oilseeds, fruits andvegetables. Processing of hides and skins and other agricultural productscould increase the value of Somalia's exports. In all these activitiesthere is a big potential for greater private sector initiative.

10. Sustained long term growth in Somalia will require a dynamicexport sector which enables the country to finance its debt burden andimport requirements. Also the realization of Somalia's potential economicgrowth depends heavily on the Government's willingness and ability torestructure its public expenditures in favor of economic and social sectorswhich now account for less than 20 percent of GDP, to devote greaterresources to reverse the rapidly deteriorating public sector managementcapability, to bring about a political change which will once again bringall factions of the society together and restore peace and security to thecountry, and to create a policy environment which can regain the confidenceof the private sector.

11. There are a number of longer term impediments to the realizationof Somalia's growth potential which need to be addressed also. Theseinclude a weak human resource base due to an inadequate educational system,poor health standards caused by inadequate preventive and curative healthfacilities and institutions, a weak public sector management capabilitywhich inhibits all government operations, an inadequate infrastructurewhich adds to the cost of production and reduces the ability to marketoutputs, and growing environmental concerns due to overgrazing,waterlogging and salinity buildup. These longer term constraints need tobe overcome through sustained efforts to improve educational and healthfacilities; to strengthen public institutions by training, dedicatedleadership, and improved incentive systems; a soundly conceived publicinvestment program that correctly prioritizes the most importantinfrastructure investment and provides sufficient resources formaintenance; and increased attention to Somalia's environmental problemsthrough changes in grazing and irrigation practices.

12. Somalia's meager resources, weak institutional capacity, andscanty basic services have been further strained by a sizeable influx ofrefugees from Ethiopia since 1979. Though their number has not been firmlyestablished, some 600,000 persons in 44 camps around the country,equivalent to one tenth of Somalia's total population, are being assistedunder refugee relief programs supported by UNHCR, WFP and other donors.Overconcentration of these refugees and their animals has led to damage to

-4 -

the environment, particularly rangelands and forests in the vicinity of therefugee camps.

Bank's Assistance Strategy

13. The Bank's overall objective during the 1980s was to helpSomalia get on a sustained growth path with more equitable incomedistribution through adjustment programs which included economicstabilization measures combined with a return to a deregulated marketeconomy. This strategy was also supported by investment projects directedto overcoming Somalia's longer term development constraints in agriculture,infrastructure, human resources and essential public sector institutions.These objectives were also pursued by maintaining a policy dialogue throughCountry Economic Memoranda and public expenditure reviews.

14. Since the Bank extended its first credit to Somalia in 1964,US$526 million of IDA credits have been made available for 40 projects asof June 30, 1990. Twenty eight projects have been completed and fullydisbursed and eight Project Performance Audit Reports have been distributedto the Executive Directors. Project implementation has been average forsub-Saharan Africa, but has recently been disrupted by the securitysituation in some areas of the country.

15. The sectoral distribution of Bank lending to Somalia has been 59percent for agriculture, with the emphasis on improving livestock healthservices and management of rangelands, and more recently improved irrigatedfarming. Twenty two percent of total lending was extended forstrengthening the country's infrastructure, namely roads, port facilitiesand water supply. The education sector absorbed about 11 percent oflending; the remaining projects comprising about 6 percent of total lendingwere for the energy and finance sectors.

16. While the Bank's efforts to carry out its past assistancestrategy have had some positive results, the adjustment process has nowstalled due to the Government's preoccupation with internal political andmilitary concerns. We plan to continue to encourage the Government to putthe adjustment process back on track, but until there is clear evidence ofa change from the performance of the recent past, it would be inappropriateto undertake the kind and level of IDA lending which such a strategy wouldjustify. The performance criteria on which resumption of such lendingwould be justified would include implementation of the monetary and fiscaltargets agreed to with the IMF and agreement with the Bank on a publicinvestment program, an appropriate composition of government expendituresfor the economic and social sectors, and continued implementation of theagreed measures to further liberalize the economy. Credible performance inthese areas will necessarily require political reconciliation and consensusin the country.

17. In the absence of a meaningful adjustment program, as outlinedabove, the Bank has significantly reduced its support for Somalia to a"Core Program" of activities which include a lending program of one or twoinvestment projects a year totalling about US$20 million and a smalleconomic and sector work program. This lending level is a little over one-fourth of the size that would be appropriate if Somalia were undertaking a

- 5 -

full adjustment program, and is considerably less than the US$52 millionannual average for FY87-89. The Infrastructure Project (US$18.5 million)is the only lending operation planned for FY91 under the "Core Program".

18. The "Core Program" will be directed to supporting human resourcedevelopment and institutional capacity building, and to preventing furtherdeterioration of Somalia's basic infrastructure and natural resource basethrough maintenance and improved environmental protection. The presenteconomic and political situation will make the attainment of theseobjectives difficult, but carefully designed projects that includetechnical assistance and training should improve their chances for success.The "Core Program" approach has been adopted as a temporary holdingoperation and will be carefully reassessed by May 1991.

19. Economic and Sector Work. In the absence of an adjustmentoperation under the "Core Program", much of the policy dialogue with theGovernment will be carried out through economic and sector work.Restructuring the public expenditures, civil service reform and improvedpublic sector management will be the focus of a subsequent PublicExpenditure Review and Country Economic Memorandum. In sector work, anEnvironmental Assessment and a Human Resource Development Strategy areplanned.

20. Poverty, pervasive in Somalia, is the outcome of years ofeconomic decline and political disturbances. Social statistics which existare too scanty and unreliable to estimate what proportion of the urban andrural population fall below the poverty line. The Bank has initiated aSocial Dimensions of Adjustment (SDA) program in the country and isassisting the Government to establish an institutional capability to screenand finance poverty targeted projects which involve the community and NGOs.Under the SDA aegis the African Development Bank is working closely withthe Bank to strengthen the Ministry of National Planning's ability tocollect and analyze socio-economic data, and is providing financing forthis purpose. It is also financing policy studies which specificallyaddress issues affecting the vulnerable groups.

Aid Coordination

21. The Bank continues to maintain close ties with major donors inSomalia, namely Italy, Germany, U. S. Aid, African Development Bank, EECand UNDP through periodic consultations and frequent exchanges ofinformation among staff as well as through Consultative Group meetings.The last Consultative Group Meeting on Somalia was held in February 1987and a Special Donors' meeting was held in London in September 1988. Thedonors have come to look to the Bank for assessment of the country'smacroeconomic performance, a task which it carries out in closecoordination with the IMF.

22. The Policy Framework Paper (SecM89-361) outlining theGovernment's 1989-91 macroeconomic program, which was approved by theCommittee of the Whole in April 1989, was prepared jointly by theGovernment, the Fund and the Bank. Although the Fund has been unable toprovide additional resources to Somalia since 1986 because of Somalia'sarrears with the Fund, the Fund staff have nonetheless worked closely with

the Bank to advise and monitor the macroeconomic program being implemented,through joint missions and continuous consultations.

23. The Fund also took the initiative to form a Support Group forSomalia in 1989 to address Somalia's rising debt arrears problems,particularly to multilateral donors. However, it has so far had littlesuccess other than a US$15 million contribution made by Italy at itsoutset.

Conclusions

24. Though the economic reform experience of the 1980s has beenmarked by frequent policy reversals, the Somali economy has nonethelessundergone a significant transformation from a public sector dominatedsocialist system to a more open, market oriented economy. Trade in majorcommodities and services has been liberalized, government monopolies inmany sectors eliminated, and all prices have been decontrolled except forwater, electricity and petroleum products. The Government is makingserious efforts to eliminate subsidies on petroleum products and to bringdomestic prices up to import parity. Benefits from and sustainability ofthese reforms are, however, greatly undermined by the Government'sinability to enforce fiscal and monetary discipline as well as thepolitical and security situation which continues to deteriorate. Despite arecent constitutional reform to permit a multiparty system and governmentannouncements on the timing of elections, the process toward politicalreconciliation is likely to be long and difficult. The security conditioncontinues to deteriorate, putting the feasibility of holding nationwideelections in the near future in question.

25. The Core Lending Program, which was adopted under the currentcircumstances, will allow a continued dialogue to encourage the Governmentto sustain the reforms which it has so far achieved, while maintaining aminimal Bank presence. Improved revenue performance, increased allocationof government resources to economic and social sectors, and improvedmonetary control, including implementation of the targets agreed with theFund, as well as improved security in all parts of the country which isnecessary for the Bank to effectively carry out field supervision of Bankfinanced projects will be needed for the Bank to resume a full lendingprogram for Somalia. The proposed Infrastructure Rehabilitation Projectfits into the limited objectives of the Core Program by helping to preventfurther deterioration to Somalia's basic infrastructure, mainly throughstrengthening the road maintenance capability of the Directorate ofHighways and building institutional capacity in the other agencies.

Part II

Infrastructure Rehabilitation Project

26. The proposed credit of SDR 14.1 million (US$ 18.5 million) istherefore submitted to the Board for approval. The credit would be onstandard IDA terms with forty years maturity and help finance anInfrastructure Rehabilitation Project.

27. Several donors have financed large projects to rehabilitateroads and urban water supplies. Yet the key institutions responsible toundertake operations affecting physical infrastructure lack the capabilityto effectively manage their respective sectors. Urgent support is neededto strengthen these institutions. IDA is positioned to provide suchassistance, to develop institutional capacity, to develop cost recoverymechanisms and to act as a catalyst to attract and coordinate cofinancing.Similarly, in the telecommunications sector, which is in even greaterdisarray than water or roads, IDA's involvement is needed to strengthen theinstitution, help develop sectoral strategies and critically assess projectproposals to assure that most the cost effective investment decisions aremade.

28. Project Objectives. In the highways sector, the Project wouldaim to: (a) to protect the capital investment in and increase the servicelife of the primary and secondary road network; (b) help improve DOH'scapacity for road maintenance; (c) mobilize local resources for highwaymaintenance by encouraging the development of a recently established RoadMaintenance Fund; and (d) help coordinate investments in the sector withinthe framework of a 5-year Road Maintenance and Rehabilitation Plan.

29. In the water supply sector, the Project would aim to: (a)strengthen the administrative, technical and financial capacity of MWA; and(b) set the stage for a further expansion of Mogadishu's water supplysystem.

30. In the telecommunications sector, the Project would aim to: (a)support a program of institutional and management improvement in thesector; and (b) improve the financial performance of MPT.

31. In short, this operation is a capacity building and maintenanceproject.

32. Project Description. The Project is composed of the followingcomponents: (i) routine maintenance of the primary and secondary roadnetwork in three Highway Maintenance Areas (HMA's 1, 3 and 4); (ii)institutional strengthening of DOH through technical assistance andtraining; (iii) engineering design of a future Mogadishu water supplyproject; (iv) institutional strengthening of MWA; and (v) institutionalstrengthening of the telecommunications sector. A breakdown of costs andthe financing plan is shown in Schedule A. Amounts and methods ofprocurement and of disbursements and the disbursement schedule are shown inSchedule B. A timetable of key projects processing events and the status

-8-

of Bank Group operations in Somalia are given in Schedules C and Drespectively. A map and the Staff Appraisal Report No. 8220-SO datedSeptember 14, 1990 are also attached.

33. Agreed Actions. Main issues in the highway sector include theestablishment of an independently budgeted department concerned withhighway construction and maintenance and the establishment of a RoadMaintenance Fund (RMF) generated by a tax on motor fuel. Major progress inthe resolution of these issues was achieved during project preparation withthe reorganization of the Highways Department into a Directorate and thecreation of a road fund earmarked for highway maintenance. Duringnegotiations, agreement was reached with the Government that: (a) retailfuel prices will be gradually increased to eliminate any subsidy by endDecember 1990; (b) the National Road Rehabilitation Plan 1989-1993 agreedwith Government during appraisal was confirmed; (c) throughout the projectimplementation period, annual budgetary allocations for routine roadmaintenance including funds in RMF will be at least US$1.2 millionequivalent in 1989 prices and that not later than four months before thebeginning of each fiscal year the Government shall review with theAssociation the budgetary requirements and the proposed budgetaryallocation for road maintenance; and (d) there will be phased increases inthe ad valorem tax on gasoline and diesel fuel to the level required tosustain routine road maintenance activity on a continuous basis.

34. In the water supply sector, the main issue concerns the abilityof the Mogadishu Water Agency to remain financially viable without directsubsidy from Government. During project preparation MWA increased watertariffs by three hundred percent, paving the way for the introduction ofnew terms of employment for its workers based on renewable contracts.However, MWA could still not afford to implement the proposed productionincentive scheme. During Negotiations, agreement was reached withGovernment that MWA would receive local funds from Government adequate tocover the cost of introducing the improved compensation scheme for twoyears. For the third and subsequent years of the Project, MWA willgenerate, at a minimum, the amount of cash required to cover operatingexpenses and debt service.

35. There are no major project-related issues in thetelecommunications sector.

36. The Following are Conditions of Effectiveness. (a) execution ofa subsidiary loan agreement with the Mogadishu Water Agency; (b)appointment of suitable candidates to key posts within DOH and MWA; (c)establishment of a suitable system to provide incentive pay from theproceeds of the Road Maintenance Fund to DOH staff to motivate existingemployees and to attract and retain new employees; and (d) inclusion ofgasoline in the fuel tax base. As a condition of disbursement of the fundsrelated to each of the highways and water sector, Government would havesigned a twinning agreement with an organization acceptable to theAssociation.

37. Benefits. The main economic benefits of the Project are savingson vehicle operating costs and the lengthening of the service life of theroad network owing to improved maintenance. The major direct beneficiaries

of the time savings, reduced transport costs and improved road safety willbe motor vehicle owners and, indirectly, the end-users of mass transport.Patrons of road services, especially the urban poor, would benefit from theexpected reduction in transport costs in the form of lower transport ratesor at least in the form of reduced cost increases. Refugee reliefoperations which have placed heavy demands on the roads would greatlybenefit as well. The Project is also expected to produce general benefitsto other sectors, such as supporting an increase in marketed agriculturalproduction.

38. DOH will be a stronger institution with the means to betterplan and manage its road maintenance requirements. The technicalassistance and training to be provided to MWA will lead to a higher levelof institutional performance, including enhanced revenue generatingcapacity with a concomitant increase in worker productivity anddependability of water supply to the capital city. Similar assistance toMPT will set the stage for improved telecommunications in Somalia, bothdomestically and internationally. The development of a policy frameworkwill provide a context within which strategic planning can be undertaken,including the possibility of involving private enterprise in managing someaspects of the telecommunications sector.

39. Risks. While the project is designed to reduce as much aspossible risks associated with implementation, there is nevertheless, thepossibility that implementation could be delayed in the event local staffassigned to the project leave the Government or counterpart staff are notassigned on time. This risk will be mitigated by staff incentive schemesfor DOH and MWA, coupled with the filling of key posts within the entitiesas conditions of credit effectiveness. There is also the possibility thatthe local funding for routine road maintenance may not materialize asplanned. However, the establishment of the Road Maintenance Fund and itsstrengthening under the Project as well as periodic review of the PublicInvestment Program should reduce this risk.

40. The one risk which is difficult to anticipate is the securitysituation in Project areas outside of Mogadishu where the bulk of the roadmaintenance component (27Z of project costs) is located. Under prevailingconditions the Project components dealing with water supply andtelecommunications are feasible in that the major focus of the work isinstitutional development located in Mogadishu. If the situation severelydeteriorates, it will undoubtedly have a negative impact on the roadcomponent of the Project. Under such adverse circumstances, the roadactivities could be delayed until later years in the Project period.

41. Recommendation. I am satisfied that the proposed credit wouldcomply with the Articles of Agreement of the Association and recommend thatthe Executive Directors approve the proposed credit.

Barber ConablePresident

Washington, D.C.September 14, 1990

Attachments:

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SCHEDULE A

SOMALIA

INFRASTRUCTURE REHABILITATION PROJECT

ESTIMATED COSTS AND FINANCING PLAN

Estimated Costs: Item Local Foreign Total---- (US$ million) -----

Routine Road Maintenance 0.6 4.2 4.8

Technical Assistance andTraining for DOH 0.7 2.8 3.5

InstitutionalStrengthening of MWA 0.3 2.3 2.6

Engineering Design ofMogadishu Water Supply 0.3 2.6 2.9

InstitutionalStrengthening of MPT 0.3 2.2 2.5

Project Preparation 0.1 1.3 1.4

Base Cost 2.3 15.4 17.7

Physical Contingencies 0.2 1.4 1.6Price Contingencies 0.2 1.5 1.7

Total Project Costs 2.7 18.3 21.0

Financing Plan: IDA 0.2 18.3 18.5Government 2.5 0.0 2.5

Total 2.7 18.3 21.0

SCHEDULE B

SOMALIAINFRASTRUCTURE REHABILITATION PROJECTProcurement Methods and Disbursements

Project Element ICB LCB IS Other 1/ Total---------- US$ mim on ------- --------

HIGHWAYSProcurement of road main-tenance equipment andspare parts 3.93 a .93

(3.54) (3.54)Procurement of workshopequipment, tools andtraining aids 0.59 0.69

(0.53) (0.53)Improvement/constructionof workshops 0.63 0.63

(0.47) (0.47)Supply of road main-tenanc- materials 0.59 0.59

(0.63) (0.53)Technical assistanceand training 4.28 4.28

(3.42) (3.42)WATERConsultant services/technical assistanceand training 6.46 8.46

(5.81) (5.81)Procurement of equipment,tools and training aids 0.23 0.23

(0.20) (0.20)TELECOMMUNICATIONSConsultant services/technical assistanceand training 2.54 2.64

(2.29) (2.29)Procurement of equipment,tools and training aids 0.44 0.44

(0.40) (0.40)PROJECT PREPARATIONConsultant services (PPF) 1.37 1.37

(1.37) (1.37)

Total 3.93 0.53 1.84 14.64 20.94Total IDA (3.54) (0.47) (1.66) (12.89) (18.60)------------------------------------------------------------

Note: Figures in parentheses *re the respective amounts financed by IDA.Totals may not agree due to rounding.1/ Bank Guidelines for the use of consultants.

DISBURSEMENTS

Category Amount Percentag-(USs million)

Civil works 0.47 901 of total expenditure

Equipment, tools, and training aids 4.67 100X of foreign expenditure

Road maintenance material supply 0.69 1001 of foreign expenditure

Consultancy services, technicalassistance and training 12.77 1001 of foreign expenditure

Total 18.60

EstimatedD;sbursements Bank FY 1991 1992 1993 1994 1995 1996 1997

----------------- USS million -----------------AnnualCumulative 1.9 2.4 4.8 4.0 3.2 1.6 0.6

1.9 4.3 9.1 13.1 16.3 17.9 18.6

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SCHEDULE C

SOMALIA

INFRASTRUCTURE REHABILITATION PROJECT

SUPPLEMENTARY PROJECT DATA

Section I: Timetable of Key Events

(a) Time taken by Borrower 2 yearsto prepare

(b) Project prepared by: DOH, MWA and MPT with assistancefrom consultants.

(c) First IDA mission: December 1987

(d) Appraisal mission departure: October 1989

(e) Negotiations: June 1990

(f) Planned date of effectiveness: November 1990

(g). List of relevant PCRs and PPARs:

(1) PCR 8454-SO Second Water Project,June 1990

(2) PPAR 6222-SO Third Highway Project,May 1986

(3) PCR 6223-SO Fourth Port Project,May 1986

(4) PCR 5761-SO First Water Project,June 1985

(5) PPAR 3052-SO Third Port Project,June 1980

(6) PPAR 2391-SO First and SecondHighway Project,March 1979

- 13 - Schedule D

Pago 1 of 2

STLTUS OF SANK CROUP OPERATIONS IN SOMALIA----------------------------------.-------

A. STATEMENT OF BANK LOANS AND IDA CREDITS(as of June 30, 1990)

-------(USS willion)-------

Amount (Leoss Cancellations)

Loan or Fiscal Undir-Credit No. Year Borrower Purpose Bank IDA burned

Tw*nty-oight (28) credits fully disbursed, 279.08of which SECALs, SAL: and Program Loans a/ -

Cr. A020 1986 Somalia Agr. Sec. Adj. Prog. 0.00 32.60

Cr. 1711 1986 Somalis Agr. Sec. Adj. Prog. 0.00 30.00

0.00 62.60

Cr.1464 1964 Somalia Afgoy Cas Dolinoation 18.00 6.26

Cr.1535 1965 Somalia NW Region Agricultural Dbt. 10.60 7.77Cr.1647 1966 Somalia Liveoteek Health Services 4.30 4.12

Cr.1723 1966 Somalia Ports Modernization 22.60 11.16Cr.1774 b/ 1967 Somalia Semi-Wechanized Rainfed Agric. 13.40 9.98

Cr.1794 1987 So alie 2nd Agricultural Extension 12.70 7.43

Cr.18S0 1986 Somalia Power Rehabilitation 12.50 2.27

Cr.18S6 1986 Somalia Saardhero Technical Assistance S.tO 1.80Cr.1967 1989 Somalia Central Rangelands SS 19.00 17.99Cr.2030 C/ 1989 Somalia SAL/ASAP It 70.00 37.87

Cr.2063 1989 Somalia Forshaono 28.50 26.05

Cr.2110 1990 Somalia Education Rehab. 20.10 26.08

ToteI 522.23 157.57

of which repaid 14.56

Total now hold by IDA 507.72

Total Undisbursed 157.67

a/ Approved after FYOO.b/ Special African Facilityc/ SAL, SECAL or Progra Loan.

somledl.vwl

7-19-90

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Shediule 0

Page 2 of 2

S. STATEMENT OF IFC SNVYSTMENTS IN SOMALIA(As of June 30, 1990)

(Amount In USS illion)

Fiseal Type of

Year Obligator Business .oan Equity Total

1n1 Somal Molsass Co. Ltd. Food Procossing 0.37 - 0.37

1161 Polypropylene Sg Co. polypropylene Saes 0.9 - 0.96

Total Gross Comitmeta 1.35 1.35

Les r;gaymentoand exchange ad3ustments 0,1 0.1S

Total comitm s now hold by PC 1.17 - 1.17

Total undisbarsod 0.00 - 0.00

/-X9-90

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