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Project Name
Project ID
Implementing Agencies
Environment Category
Date PID Prepared
Date of Appraisal
Date of Board Approval
Report No.: 56407
Water (100%)
Ministry of Energy and Water
Ministry of Energy and Water
Tel: 961-1-9811361 Fax: 961-1-981252
Council for Development & Reconstruction (CDR)
Tel: (961-1) 980-099 Fax: (961-1) 981-282
Beirut Mount Lebanon Water Authority (BMLWA)
Tel: +961 1 396 063 Fax: +961 1 385 111
[X] A [ ] B [ ] C [ ] FI [ ] TBD (to be determined)
August 25, 2010
August 6, 2010
December 16, 2010
Country and Sector Background
Lebanon is a small country on the Mediterranean coast with a population of 4.2 million
people. The country is highly urbanized with more than 85 percent of the population living in
cities. Beirut, the capital city, hosts about half of the country’s population. Lebanon’s servicebased economy, while fragile and subject to frequent political shocks, is driven by the dynamic
private sector and is highly reliant on the Arab Gulf economies. The country has long been
known for its human talent in banking, education and engineering and for its open capital and
liberal press.
Despite the relative availability of water resources, the Lebanese water supply and
sanitation sector has not achieved suitable levels of service provision and is not in line with the
level of economic development reached by the country. The cost of inaction in the water sector is
estimated at about 1.8 percent of GDP ($433 million per year1) or 2.8 percent of GDP if the cost
of environmental degradation is included. Household expenditure on private water supply varies
regionally but can be as high as 3.4 percent of household income. Furthermore, the
environmental degradation caused by the discharge of untreated wastewater costs an additional 1
percent of GDP per year.
Public Expenditure Review for the Water Sector, World Bank, 2010.
The Greater Beirut and Mount Lebanon area houses about 40% of the total Lebanese
population. Despite relatively high municipal connection rates reaching 90%, the continuity of
water supply is low and reaches as little as 3 hours per day in the lean summer season. This
seasonal water imbalance is primarily caused by very low water storage capacity, high amount of
water lost to the sea, growing demand for water and the deficiency of existing water networks.
Average technical and commercial losses are as high as 40% and further aggravate supply
intermittency. In this context, small scale private water vendors have provided water of dubious
quality. If no actions are taken to improve distribution efficiency and increase storage capacity, it
is estimated that the seasonal imbalance of water resources will lead to chronic water shortages
by as early as 2020.
Beirut Mount Lebanon Water Authority (BMLWA) is the Regional Water Authority
responsible for the Greater Beirut and Mount Lebanon area comprising the towns of Jbeil,
Barouk, Metn, Ein el Delbi and Keserwan with approximately 2.2 million registered users
equivalent to approximately 350,000 registered households. BMLWA also services the lowincome neighborhoods in Southern Beirut.
BMLWA is a public institution established in 2000 through Law 221(2000) which
amalgamated numerous “water establishments”, including the “Beirut Water Establishment” and
“Ein El Delbi Water Establishment” into a unified “Beirut Mount Lebanon Regional Water
Authority”. BMLWA operates as a commercial entity, is headed by a General Director who also
chairs the Board, and oversees an organization of approximately 2000 part-time and full-time
staff. Due to a longstanding hiring freeze within the Government however, many of these
positions remain vacant and BMLWA is thus considerably understaffed, with many existing staff
nearing retirement.
BMLWA delivers water to a “gauge” flow-device installed in every apartment building,
the most common form of residence across urban Lebanon. The gauge is designed to allow a
flow of 1 m3/day for every apartment of area equivalent to 200 m2 or less. Larger apartments are
allocated larger volumes of water per day and subsequently pay a higher gauge tariff. Only 16%
of registered users are metered, with 11% of these representing large industrial and commercial
users of significantly higher consumption rates. Since water rationing is frequent and reaches as
low as 3 hours per day in the summer, most residences have installed communal pumps and
individual roof-top reservoirs to store water when it is delivered.
The gauge water tariff is LLB 236,000 (US$157) per year per household for 1 m3/day for
each 200 m2 of household area, and LLB 324,000 (US$216) per household for limited metered
connections. The metered connections have more regular water services, and have a price
adjustment at the end of the year reflecting the volume of consumed water. On average,
BMLWA collection rate has been consistent at 90 percent per year. Thus, the combination of: (a)
a relatively high yearly gauge tariff (equivalent to approximately 4% of minimum wage income)
due in full yearly (b) the water shortages across the Greater Beirut Mount Lebanon area, and (c)
the relatively satisfactory collection rate, given the low quality of service – have all resulted in
BMLWA amassing significant financial reserves.
BMLWA’s strong financial position has thus enabled it to contribute US$ 140 million of
equity sharing on the Greater Beirut Water Supply Project - equivalent to 36 percent of the total
project cost.
Institutional Players
The Ministry of Energy and Water (MoEW): is the main agency with oversight and
regulatory power in the water sector, including water resource management. The MoEW
is in charge of budget-financed investments and exercises technical oversight over the
four Regional Water Authorities and is responsible for setting water standards, pollution
control and enforcing legislation.
The Council of Development of Reconstruction (CDR): is a financially autonomous
public institution attached to the office of the President of the Council of Ministers and is
in charge of planning and executing donor-funded investments, including for the water
and wastewater sectors. It was created in 1977 to coordinate the re-construction effort and
to implement the associated investment programs in collaboration with line ministries.
Regional Water Authorities (RWA) Municipal water across Lebanon is provided by four
consolidated RWAs and one pre-existing river basin agency (the Litani River Authority).
The four RWAs are responsible for (a) the study, execution, operation and maintenance
and renovation of potable water supply, irrigation and wastewater according to the
General Master Plan and as per the instructions of the MoEW; (b) setting water tariffs for
potable water supply and irrigation taking into account socio-economic conditions; and
(c) quality control of potable water and water for irrigation.
Rationale for Bank involvement
The Bank has been actively engaged in Lebanon’s water sector since 1993. An
Emergency Reconstruction and Rehabilitation Project (ERRP) of US$275 million, of which
approximately US$90 million was for the water sector, was implemented between 1993 and
2002. In addition, the ongoing Ba’albeck Water and Wastewater project (US$43.5 million in
2002), the Irrigation Rehabilitation and Modernization project (US$70), the West Beka’a
Emergency Water Supply Project (US$15 million Grant in 2007), Irrigation policy note (2004)
and the recently completed Water Sector Public Expenditure Review in 2009 are examples of the
Bank’s continuous engagement in policy advice and investment lending in Lebanon.
The proposed Greater Beirut Water Supply Project has been under consideration by the
Lebanese Government since the early 1960s and has constantly featured in the Government’s
infrastructure development plans. In the late 90s, the Bank provided technical assistance to the
Government for the implementation of the Greater Beirut Water Project on a Build-OperateTransfer (BOT) basis. This plan was later cancelled at the Government’s request but the Bank
teams retain a strong understanding of the project and its objective to alleviate the critical water
shortage currently impeding effective development within the Greater Beirut Region.
Project Description
The project development objective is to increase the provision of potable water to the
residents in the project area, including those in the low-income neighborhoods of Southern
Beirut, and to strengthen the capacity of the Beirut Mount Lebanon Water Authority in utility
Achievement of the development objective will be assessed through the following key
performance and core indicators:
Volume of additional potable water distributed in project area.
Piped household connections affected by rehabilitation works undertaken under the
New piped household connections resulting from the project intervention for poor
Percentage of customers in project area receiving 24/7 water supply.
The proposed Greater Beirut Water Supply Project aims to build, operate and maintain
the intake, treatment, conveyance and storage infrastructure required to meet the immediate and
pressing demand for 250,000 m3/d of potable water in the Greater Beirut and Mount Lebanon –
by building a conveyor, water treatment plant, storage reservoirs and distribution networks to
deliver Litani and Awali River water to the Greater Beirut Region. It will consist of the
following three components:
Component 1: Bulk Water Supply Infrastructure: Tunnels, Water Treatment Plant,
Transmission & Bulk Storage
Component 1 will comprise: (i) the construction of two water tunnel conveyors of 3 km and 21
km respectively; (ii) a water treatment plant; (iii) two transmission twin pipelines of 7.6 km and
2.7 km respectively; (iv) three storage reservoirs of 35 ML, 50 ML and 20 ML capacity
respectively; and (v) all related equipment including pumps and valves.
Component 2: Supply Reservoirs, Distribution Network and Metering
Component 2 will comprise: (i) the construction of 16 supply reservoirs, dispersed within the
project area; (ii) the replacement and/or installation of water supply network of about 187 km of
pipelines as well as local reservoirs and pumping stations; (iii) the installation of 200,000 meters
in specific pilot project areas; and (iv) the installation of bulk water meters.
Component 3: Project Management, Utility Strengthening and Studies
Component 3 will comprise: (i) the setting up and the operation of a Project Management Unit
(PMU) consisting of key specialist staff to implement, monitor and report on project progress,
(ii) the procurement of utility strengthening systems, equipment and technical advisory services,
and (iii) high priority national studies to be undertaken on key sector areas in alignment with the
priorities set forth in the National Water and Sanitation Sector Strategy (NWSSS) under
preparation by the Government of Lebanon.
The lending instrument will be a Specific Investment Loan that will be aimed at
supporting the creation, rehabilitation, and maintenance of water supply infrastructure in the
Greater Beirut area.
Total project financing requirements are estimated at US$ 370 million, inclusive of price
and physical contingencies, taxes and the front-end fee. The project will be jointly financed as
follows: BMLWA will finance US$140 million and the GOL will finance US$30 million for
land acquisition and the front-end fee. The remaining costs of US$200 million for goods, works,
consultants, reasonable associated taxes and contingencies will be funded by the IBRD loan.
Detailed information on costs and financing sources is provided in Table 1.
Table 1. Project Costs by Component and Use of Financing
Project Cost By Component and/or
A. Works, Goods and
Component 1: Bulk Water Supply
A. Raw and treated water tunnels
Works and supervision
B. Water treatment plant
Works and supervision
C. Transmission pipelines, reservoirs
Works and supervision
Component 2: Distribution, and
A. Distribution and reservoirs
Works and supervision
B. Metering
Component 3: Project
Management, Utility Strengthening
and Studies
B. Land Acquisition
Total Baseline Cost
C. Contingencies
D. Taxes
Total Project Costs
Front-End Fee
Total Financing Required
Institutional and implementation arrangements
The MoEW will be the administrative Ministry with responsibility for the project. It will
have a Project Steering Committee headed by H.E. the Minister, with representatives from key
stakeholders including the Ministry of Finance, CDR and BMLWA. CDR will be responsible for
the implementation of Component 1 of the project, while BMLWA will be responsible for
implementation of Components 2 and 3.
Sustainability of the proposed project will ultimately be determined by the sustainability
of the water sector as a whole, and at the project level, by the proper implementation and
operation of the proposed project. Specifically, the sustainability of the project will largely
depend on: (a) the professionalization of BMLWA and its staff by successful implementation of
international corporatization procedures including accounting and billing standards, non-revenue
water reduction and targeted staff training to operate and maintain the new infrastructure; and (b)
the adoption of full metering on a volumetric basis across BMLWA project area, thereby
controlling water consumption and operation and maintenance costs.
Lessons Learned from Past Operations in the Country/Sector
The following aspects of the project have been built into the design as a result of lessons
learned from current water and sanitation projects and the analytical work undertaken in
Lebanon) and elsewhere:
An independent and autonomous utility run under sound commercial principles and with
professional staff provides the most efficient water supply and sewerage services.
The water utility needs to play a leading role in the implementation and operation of a
water supply project and operate within an appropriate regulatory framework and with
clear policies and procedures.
Government should play the role of facilitator and provide the enabling environment for
effective service delivery.
There should be effective coordination and cooperation between the relevant
agencies/ministries involved in the sector.
The consumer’s voice should be heard while planning and implementing the project
Safeguard Policies
Safeguard Policies Triggered by the Project
Environmental Assessment (OP/BP 4.01)
Natural Habitats (OP/BP 4.04)
Pest Management (OP 4.09)
Indigenous Peoples (OP/BP 4.10)
Physical Cultural Resources (OP/BP 4.11)
Involuntary Resettlement (OP/BP 4.12)
Forests (OP/BP 4.36)
Safety of Dams (OP/BP 4.37)
Projects on International Waterways (OP/BP 7.50)
Projects in Disputed Areas (OP/BP 7.60)*
List of Factual Technical Documents
The list of factual technical documents supporting the proposed project include:
Feasibility Study Update: 2010;
Feasibility Study and Preliminary Design: Study and Design for Greater Beirut Water
Supply and Wastewater Development, 2000, ACE;
Update of Water Supply Masterplan for Greater Beirut, 1997, Gibb- KA KCIC;
Update of Water Supply Masterplan – Infrastructure, 1997, Gibb- KA KCIC;
Update of Water Supply Masterplan - Study of Unaccounted for Water, 1997, Gibb- KA
Awali-Beirut Water Supply Feasibility Report, 1994, Montgomery Watson & Engico;
Awali-Beirut Water Supply Ground Investigation Report and Annexes, 1995, INSITU;
Awali-Beirut Water Conveyor (BOT) – EIA, 2000, Montgomery Watson & Engico,
European Capital, Hannah & Mould.
Contact point
Mr. Parameswaran Iyer
Title: Sr Water & Sanitation Spec.
Tel: (202) 458-7185
Email: [email protected]
For more information contact:
The InfoShop
The World Bank
1818 H Street, NW
Washington, D.C. 20433
Telephone: (202) 458-4500
Fax: (202) 522-1500
Email: [email protected]