RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF TN-ROAD TRANSPORT CORRIDORS APPROVED ON JULY 14, 2015 TO REPUBLIC OF TUNISIA REPORT NO.: RES28915 TRANSPORT & ICT MIDDLE EAST AND NORTH AFRICA Regional Vice President: Country Director: Senior Global Practice Director: Practice Manager/Manager: Task Team Leaders: Hafez M. H. Ghanem Marie Francoise Marie-Nelly Jose Luis Irigoyen Olivier P. Le Ber Andrew Losos, Kristin Panier
ABBREVIATIONS AND ACRONYMS DGPC ESIA ESMF ESMP GoT ISR MEHLP MDTF MENA PAP PIU RAP RN RPF RR SBD TND General Directorate of Roads and Bridges ( Direction Générale des Ponts et Chaussées ) Environmental and Social Impact Assessment Environmental and Social Management Framework Environmental and Social Management Plan Government of Tunisia Implementation Status and Results Report Ministry of Equipment, Habitat and Land Planning ( Ministère de l Équipement, de l Habitat et de l Aménagement du Territoire ) Multi-Donor Trust Fund Middle East and North Africa Project-Affected People Project Implementation Unit Resettlement Action Plan National Road ( Route Nationale ) Resettlement Policy Framework Regional Road ( Route Régionale ) Standard Bidding Documents Tunisian Dinar
Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID P146502 Original EA Category Partial Assessment (B) Approval Date 14-Jul-2015 Financing Instrument Investment Project Financing Current EA Category Partial Assessment (B) Current Closing Date 31-Dec-2020 Organizations Borrower REPUBLIC OF TUNISIA Responsible Agency Ministere de l Equipement, de l'habitat, et de l Amenagement du Territoire Project Development Objective (PDO) Original PDO The objectives of the Project are: (i) to reduce transportation cost and time and improve road safety on select road corridors between lagging regions and more developed areas in the territory of Tunisia; and (ii) to strengthen the capacity of the Ministry of Equipment, Habitat and Land Planning in road asset management. Summary Status of Financing Ln/Cr/Tf Approval Signing Effectiveness Closing Net Commitment Disbursed Undisbursed IBRD-85190 14-Jul-2015 02-Oct-2015 30-Dec-2015 31-Dec-2020 200.00 56.58 144.51 TF-A0260 02-Oct-2015 02-Oct-2015 30-Dec-2015 28-Feb-2018.91.39.52
Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Implementation Status: 1. This project was approved by the Board on July 14, 2015 with an IBRD loan of USD 200 million and a grant from the MENA MDTF of USD 0.91 million. The progress towards achieving the PDO and the overall Implementation Progress (IP) have been consistently rated satisfactory since the launch of the project. There are no overdue audit reports, and no legal covenants pertaining to the technical assistance activities funded by this grant. All project ratings are satisfactory and the project is in compliance with all applicable Bank Safeguards policies. As of February 15, 2018, the project disbursement ratio is 28% overall (loan 27.7%, grant 43.1%), having doubled since March 2017 with cumulative disbursements of USD 56.97 million. 2. The implementation progress under all components is rated satisfactory, and the current implementation status of each component is as follows: (a) Component 1: Road Improvements. All contracts are signed and the implementation of civil works is progressing on all lots of RN12, RR133, and RN4 as of the last supervision mission in October 2017 when they were at approximately 40% of physical completion. (b) Component 2: Road Network Management Improvement. Progress has been made for the Road Network Management Improvement Component as follows: o Performance-based contracting feasibility study: All work is now concluded. The draft report was presented to a public- and private-sector workshop in Tunis on 21 February 2018. All expenses against this contract will be filed by 28 February, the current closing date. o Asset-based road maintenance system: The contract is signed and work is ongoing. By end- February 2018, 35% of the contract value will have been paid (for a cumulative total of 58% of the grant). The client estimates work will take until 30 September 2018 to be concluded satisfactorily, hence the request to extend the closing until that date. B. Rationale for restructuring: 3. Following discussions with the task team in January 2018, the PIU expressed a desire to extend the closing date of RETF grant TFA0260-TN, which finances entirely the only technical assistance component of the project, comprising two activities which support the development of (i) a road asset database and (ii) performance based contracting which are essential to (i) the sustainability of the investments in the sector and (ii) promote increasing private sector participation. 4. A formal written extension request for an extension until September 30, 2018, was received by the World Bank on February 23, 2018. Due to ongoing discussions about the extension of the trustee-level TF, however, it is only possible at present to grant an extension to June 30, 2018. In the coming weeks the donors are
expected to agree on extension of the trustee-level TF, at which point the team will propose a further restructuring which would: (i) add new road works to Component 1 of the project; and (ii) further extend the TA grant until September 30, 2018. 5. These TA activities are a high priority for Tunisia given their wide and sustainable development impacts of strengthening technical capacities not only of the Ministry of Equipment, Habitat and Land Planning (MEHLP) in the design and implementation of decision-making tools to better plan road maintenance and road public expenditure, but also of other relevant Ministries, and public and private sector entities regarding modern road asset management and performance-based contracts for road maintenance. This will contribute substantially to modernize the road asset management in Tunisia and to move from a traditional managerial model to an evidence-based one that provides better perspective on the big picture of the road and better manages scarce maintenance resources. These technical assistance activities are expected to initiate a permanent and transformative change of the whole Tunisian road asset management that will enhance the sustainability of the sector by increasing the efficiency of maintenance and rehabilitation investments and creating a conducive environment and solid foundation for future projects. 6. In addition, piloting successful performance-based contracting will open the door to the concept in the MENA region and will leverage the participation of the private sector in the management of Tunisia s road assets. In fact, the current system of maintenance delivery with limited risk transfer to the private sector is resulting in high maintenance and rehabilitation costs which are weighing heavily on the government s budget. Performance based contracting will shift this to a system with stronger involvement of the private sector, resulting in a reduction of long-term costs of road asset management. 7. The proposed restructuring will allow time for the full implementation of the technical assistance activities financed by TF0A026-TN. The performance-based contracting study has now been received in final form and substantial progress has been made on the implementation of the asset-based road maintenance system. The team anticipates the latter will be complete by September 30, 2018 and remains confident that the objectives of the grant will be delivered as planned despite the delay. 8. The team confirms that the project objectives continue to be achievable, the performance of the Borrower and PIU is satisfactory, and the Borrower has prepared a specific action plan acceptable to the Bank to complete the activities financed by this grant, as required by paragraph 47 of OP 10.00. Because the closing date and disbursement deadline date will now be the same day, with an effective grace period of zero, the team also confirms that the client has in place the capacity in place to close the TF grant immediately after 30 June 2018 if the trustee-level fund closing date cannot be extended. 9. Given the high importance of these activities to the client, and their wide and sustainable development effects on the transport sector in Tunisia, the proposed extension is considered essential to the successful implementation of the project. II. DESCRIPTION OF PROPOSED CHANGES 1. Closing date of the MENA MDTF technical assistance grant. The proposed changes are (i) to obtain WFACS clearance to reduce the grace period of TF0A0260-TN from six to two months to allow it to continue disbursing while the parent TF is extended; and (ii) as a result of said clearance, to extend the closing date of TF0A0260-TN
from February 28, 2018, to June 30, 2018. Therefore, the disbursement deadline date and the closing date will be the same at June 30, 2018 and the project will not have a grace period. 2. Clearance has been granted by Junxue Chu, Division Manager of WFACS. It required because the trustee-level TF is in the final stages of an extension of its End Disbursement Date from August 30, 2018, and without it TF0A0260-TN would require retroactive extension at RVP level. 3. Please note that due to ongoing discussions about the extension of the trustee-level TF, it is not possible at present to grant the Recipient s request to extend until September 30, 2018. In the coming weeks the donors are expected to agree on extension of the trustee-level TF, at which point the team will propose a further restructuring which would: (i) add new road works to Component 1 of the project; and (ii) further extend the TA grant until September 30, 2018. III. SUMMARY OF CHANGES Changed Change in Loan Closing Date(s) Not Changed Change in Implementing Agency Change in DDO Status Change in Project's Development Objectives Change in Results Framework Change in Components and Cost Cancellations Proposed Reallocation between Disbursement Categories Change in Disbursements Arrangements Change in Disbursement Estimates Change in Overall Risk Rating Change in Safeguard Policies Triggered Change of EA category Change in Legal Covenants Change in Institutional Arrangements Change in Financial Management Change in Procurement
OPS_DETAILEDCHANGES_LOANCLOSING_TABLE Change in Implementation Schedule Other Change(s) Change in Economic and Financial Analysis Change in Technical Analysis Change in Social Analysis Change in Environmental Analysis IV. DETAILED CHANGE(S) LOAN CLOSING DATE(S) Ln/Cr/Tf Status Original Closing Revised Closing(s) Proposed Closing Proposed Deadline for Withdrawal Applications IBRD-85190 Effective 31-Dec-2020 TF-A0260 Effective 31-Mar-2017 28-Feb-2018 30-Jun-2018 30-Jun-2018 Note to Task Teams: End of system generated content, document is editable from here.