ILE COPY 41 E SDocument of FlL 9"l | The World Bank FOR OFFICIAL USE ONLY Report No. P-2024-SYR REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE SYRIAN ARAB REPUBLIC FOR THE ALEPPO WATER SUPPLY PROJECT June 1, 1977 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit: Syrian Pound (LS) LS 1 US$0.25 US$1 = LS 3.95 ABBREVIATIONS Arab Fund - Arab Fund for Economic and Social Development EPEA - Etablissement Public des Eaux d'Alep (Aleppo Water Supply Authority) EPEF - Etablissement Public des Eaux de Figeh (Damascus Water Supply Authority) MHU - Ministry of Housing and Utilities MLG - Ministry of Local Government PDF - Public Debt Fund USAID - United States Agency for International Development Fiscal Year January 1 - December 31 FOR OFFICIAL USE ONLY SYRIA - ALEPPO WATER SUPPLY PROJECT LOAN AND PROJECT SUMMARY Borrower: Syrian Arab Republic. Amount: US$50.0 million in various currencies. Terms: 17 years, including 3 1/2 years of grace, at interest rate of 8.2 percent per annum. Onlending US$48.5 million in various currencies would be on-lent by Terms: the Government to Etablissement Public des Eaux d'Alep (EPEA) under the same conditions and with a maturity of not less than 17 and not more than 20 years, including not less than 3-1/2 and not more than 4-1/2 years of grace, at interest rate of 8.2 percent per annum. Project (a) an expansion of the intake, transmission and treatment Description: facilities from Lake Assad to Aleppo and extensions to the distribution system; auxiliary buildings, office facilities, equipment and staff training for EPEA; and related consulting services; (b) feasibility and preliminary engineering studies of the sewage collection, treatment and disposal system for Aleppo and Lattakia; (c) technical assistance to the State Planning Commission and public construction enterprises for the collection and analysis of data on construction resources and building materials and improving the administration of enterprises. This documont has a mtrictd distribution and may be used by recipients only in the performance of their offical duties. Its contents may not otherwise be disclosed without WowM Bank auithorIation. - ii - Project Cost: The table below summarizes the cost of the project. % of LS Millions-- -- US$ Millions---- Project Local Foreign Total Local Foreign Total Cost (a) Water Supply Component Aqueduct and Pumping Mains 109.4 62.8 172.2 27.7 15.9 43.6 37.3 Pumping stations and Telemetry 3.9 37.5 41.4 1.0 9.5 10.5 9.2 Treatment Plant 10.6 10.3 20.9 2.7 2.6 5.3 4.4 Distribution Facilities 17.1 32.5 49.6 4.3 8.2 12.5 10.7 Ancillary Buildings and Equipments 4.8 2.6 7.4 1.2 0.7 1.9 1.7 Consultants 5.2 15.2 20.4 1.3 3.8 5.1 4.3 Training -0.8 0.8 1.6 0.3 0.2 0.5 0.4 Sub-Total 151.8 161.7 313.5 39.5 40.9 79.4 68.0 (Base Cost) Physical contin- gencies 15% 21.8 25.2 47.0 5.5 6.4 11.9 10.2 Sub-total 173.6 186.9 360.5 44.0 47.3 91.3 78.2 Price contin- gencies 55.7 38.0 93.7 14.1 9.6 23.7 20.2 Sub-total Water Supply Works 229.3 224.9 454.2 58.1 56.9 115.0 98.4 (b) Aleppo and Lattakia Sewerage Studies 1.0 4.9 5.9 0.2 1.3 1.5 1.3 (c) Technical Assis- tance Construc- tion Industry 0.2 1.0 1.2 0.1 0.2 0.3 0.3 Total Project Cost 230.5 230.8 461.3 58.4 58.4 116.8 100.0 - iii - Financing The proposed loan would finance 43% of the total cost of the Plan: project (excluding secondary distribution works) as summarized in the table below: Total EPEA Government IBRD --------------US$ Millions---------------- Water supply component 115.0 14.2 52.3 48.5 Secondary distribution works 6.6 6.6 - - Sub-total EPEA 121.6 20.8 /1 52.3 /2 48.5 Sewerage studies 1.5 0.2 1.3 Technical assistance Construction industry 0.3 0.1 0.2 Total 123.4 20.8 52.6 50.0 /1 Net cash generation 1978-82. /2 Equity. Estimated Disbursements: ------------$ Millions----------- Bank FY 1978 1979 1980 1981 1982 Annual 2.0 13.5 16.5 13.0 5.0 Cumulative 2.0 15.5 32.0 45.0 50.0 Procurement: Contracts for civil works (amounting to about US$61 million including contingencies) and for materials and equipment (amount- ing to about US$43 million including contingencies) would be awarded following international competitive bidding (ICB) in accordance with Bank Guidelines, except for contracts estimated to cost less than US$300,000. These contracts, the total of which would not exceed in aggregate US$5.0 million, would be awarded on the basis of local competitive procurement procedures acceptable to the Bank. In bid comparison, local manufacturers of equipment and materials, to be procured under ICB, would be allowed a margin of preference equal to 15 percent of CIF price or the actual customs duty, whichever is lower. Consultants: About 1,040 man-months of consultant services would be provided under the project, at an average foreign exchange cost (excluding contingencies) of about $5,000 per man-month; of the total, 800 man months would be provided for the water supply component. - iv - Rate of Return: Internal economic return (excluding non-quantifiable benefits): 10 percent Appraisal Report No. 1542-SYR, dated June 1, 1977 Report: EMENA Projects Department INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE SYRIAN ARAB REPUBLIC FOR THE ALEPPO WATER SUPPLY PROJECT 1. I submit the following report and recommendation on a proposed Bank loan of $50.0 million equivalent to the Syrian Arab Republic to help finance the Aleppo Water Supply project. The loan would have a term of 17 years including 3-1/2 years of grace, with interest at 8.2 percent per annum. The equivalent of $48.5 million out of the proceeds of the loan would be on-lent to Etablissement Public des Eaux d'Alep (EPEA) under the same conditions and with a maturity of not less than 17 and not more than 20 years, including not less than 3-1/2 and not more than 4-1/2 years of grace, at interest rate of 8.2 percent per annum. PART I - THE ECONOMY 2. A report entitled "Current Economic Position and Prospects for Syria" (no. 806-SYR, dated October 31, 1975) was distributed to the Executive Directors on November 12, 1975. This section is based on the findings of an economic mission which visited Syria in November 1976 in preparation for a Basic Economic Mission. Country data sheets are attached as Annex I. 3. Since attaining independence in 1946, Syria has had several changes in regime which resulted in a shift of power from groups of landowners, traders, and industrialists to a rising class of officers, technicians, and civil servants, as well as a shift of the economy from an essentially laissez- faire system to a largely publicly-owned and centrally regulated one. The Ba'ath Socialist Party, the ruling party since 1963, provided substantial continuity of emphasis on economic and social development policies which have, by and large, prevailed in spite of internal Government changes and tensions within the Middle East. During the 1960s an agrarian reform was carried out, with redistribution of land to a large number of formerly landless peasants; also large segments of the industrial, finance and trade sectors were national- ized. In November 1970 General Assad became President of the Republic; his regime has been characterized by a balance of firmness and conciliation in domestic policies, economic pragmatism, a concerted search for a better defined role for the private sector in a centrally regulated economy, as well as diversification of foreign economic relations. These aims have been pursued gradually and, in spite of continued political uncertainty in the Middle East, substantial reorientation of economic policies and diversifica- tion of production have been achieved. 4. The Government's attention to economic and financial matters has led to a sustained on-going effort in conceptualizing objectives, identifying con- straints, and formulating alternative strategies. As a result, an increasingly pragmatic assessment of economic policies is taking place within the Government (and the ruling Ba'ath Party). A new cabinet was formed in August 1976. One - 2 - of its key tasks is to implement new economic policy directives, to strengthen economic management, and to tighten controls over investment decisions in the public sector. The new Prime Minister, General Khleifawi, a former head of the Economic Committee of the Ba'ath Party, and Prime Minister in the first cabinet formed after President Assad's accession to power, defined shortly after the change in cabinet the new principles which henceforth are to guide Syrian economic policies. The Prime Minister's program, while re-affirming the Ba'ath Party's commitment to general socialist principles and the dominant role to be played by the public sector, called for improvements in management of the public sector and attempted to define a role for the private sector (including the specification of activities open to private investment, exclu- sively or jointly with the public sector, and the provision of the necessary safeguards and incentives to stimulate private investment). The program also calls for the formulation of a wages and price policy, review of the economic planning system, transformation of the existing Industrial Bank into a genuine industrial development finance institution, and changes in interest rate policies to promote greater consistency with interest rates charged in neigh- bouring countries and to stimulate domestic savings. 5. The 1973 petroleum price increase, which boosted Syria's own petro- leum export earnings, and the sharp rise in Arab grants following the October 1974 Rabat agreement, augmented financial resource availability in the short run, leading to revisions of the Third Plan (1971-75) and sharp increases in public investments. However, adverse financial developments, rooted in the high investment rates of 1974-75 and external developments, including the discontinuation of oil transit by Iraq, a decline in Arab aid and the impact of the Lebanese civil war, put unexpected financial constraints on investment and growth, and delayed the finalization of the Fourth (1976-80) Plan to early 1977. For 1976-80, the Plan calls for: real growth of 12 percent yearly in GDP, a target specified by the Ba'ath Party; increases in real terms of 7 per- cent per annum in exports; and a domestic savings/GDP ratio of about 23 per- cent. With the constraints on resource availability that have emerged, the Government has limited its investment program mainly to ongoing projects, and a further revision of the Plan is underway with a view to scaling it down substantially. 6. The strategy underlying the Fourth Plan places particular emphasis on industrialization, with investment in agriculture remaining substantial. The industrial development strategy stresses import-substitution in consumer goods, and a substantial expansion of resource-based industries, such as cotton textiles, cement and fertilizers. Significant exports of manufactured goods by 1980 -- particularly textiles and fertilizers -- is a primary objec- tive of the Government's investment program in the manufacturing sector. In agriculture, the Government's overall objectives are the same as those in the previous Plan: self-sufficiency in major domestic food needs, meeting the raw material requirements of industry, and provision of a production surplus for export. Rational land and water use, the stabilization of annual fluctuations in output and the improvement in consumer diets through an increase in protein supply are further objectives. The strategy to achieve these objectives includes expansion of irrigated agriculture, intensification of crop produc- tion and achievement of a better balance and complementarity between crop and livestock production. - 3 - 7. Economic growth during 1971-75 is estimated at close to the 8 per- cent target level, and growth in 1976 was also around 8 percent. Public investment during 1971-75 reached about 70 percent of the original Plan target, with about 55 percent of the total outlays being made in the last two years of the Plan period, largely as a result of greater availability of financial resources. The elasticity of savings with respect to GDP fell to 1.0, compared to a target of 1.8, reflecting a shortfall in the public savings effort, particularly in recent years. A substantial number of manufacturing projects, including those in fertilizers and steel rolling, came on stream during the Plan period, thus diversifying the structure of industrial output. Particularly heavy expenditures were made in industry, energy and fuel in 1974 and 1975, as a large number of projects were commenced. Investments in irrigation and agriculture appear to have remained stagnant in real terms during the Plan period and fell substantially short of the target and the Plan's overall achievement rate. Nonetheless, the Euphrates basin investments were substantial and are expected to lead to higher growth and stability in the production of the agricultural sector in the future. Progress in the fields of transport and communications kept pace with the overall implementa- tion rate of the Plan. Investments in social services reached a high propor- tion of planned allocations, although substantial needs remain in education, health and urban services. 8. Increasingly aware of the needs to improve the economy's performance, the Government has begun to take measures to relieve constraints on the coun- try's development. Following the years of financial ease (up to early 1976), fiscal performance needs to be improved, if development is to proceed without interruption and without entailing potentially serious inflationary and public debt management problems. This will require greater resource mobilization and tighter control of expenditures. Efforts are underway in the Ministry of Finance to reform the tax system and to improve the Ministry's budgetary and control functions. In addition, consideration needs to be given to increasing the efficiency of the economic enterprises and their contribution to the bud- get through improved management, including introduction of sound accounting practices (for which a law was passed in 1974) and control, as well as im- proved efficiency in production. The State Planning Commission is presently studying capacity utilization in agriculture, industry and transport with a view towards finding means of increasing growth through improved utilization of existing capacity rather than new investments. With a large number of projects (particularly in industry), expected to come on-stream over the next few years, the scope of raising output to optimum use of capacity appear quite substantial. The Government has also sought UNDP assistance in planning. While these efforts are expected to have only a small impact during the Fourth Five Year Plan, they are likely to yield considerable fruits in the long run. 9. The shortage of skilled manpower may cause bottlenecks in project implementation. The uneven spatial distribution of employment is also likely to pose problems as a large proportion of public investment in agriculture and industry is to take place in the Northeast, where the population density is much lower than in the Western Coastal belt. Measures will be required to attract population and to provide sufficient skilled manpower to the Northeast - 4 - region. The overall manpower situation and the difficulties currently en- countered in fostering an efficient public administration and public economic sector are exacerbated by emigration of trained technicians and skilled labour abroad and the outflow of trained manpower from the public sector to the private sector as a result of wide wage differentials. To alleviate the shortages the Government will provide extensive training facilities for augmenting the supply of skilled manpower. It may however have to revamp the structure of incentives so as to enable the public sector to attract and retain an efficient cadre of administrators, technicians and other skilled workers. While the Government is fully committed to increasing productive employment opportunities, there is an urgent need to formulate a coherent employment strategy consistent with the Fourth Plan investment strategy. 10. Syria's economic prospects depend heavily on the availability of financial resources and also on absorptive capacity in the various sectors. Tentative Bank projections indicate that considering these constraints, an investment program totalling around SL 35 billion in constant 1975 prices is likely to be achieved during the 1976-80 period. At this level, investment would be consonant with the Government's concern for improving the quality of investments. It would generate real GDP growth around 7 percent yearly during the period, which is somewhat below the recent growth record (8 percent). The sources of growth in the late 1970's are likely to be the manufacturing and construction sectors, with agricultural production stabilized at higher levels, rather than mining and commerce which were the leading growth sectors during the Third Plan. 11. On Bank assumptions, the requirements of a growing aggregate demand would entail an increase in the current account deficit from $580 million in 1976 to $1,220 million in 1980. The Government is expected to implement strong measures to improve domestic resource mobilization, following the studies currently underway, so as to close the savings-investment gap, and thereby the resource gap; and a turnaround in the increasing deficit position may be expected in the late 1980's. Assuming current transfers to increase in 1977-78 and decrease thereafter, gross external borrowing requirements over the Fourth Plan period are estimated to be $4.0 billion. Syria can probably mobilize most of this from official sources and obtain the remainder from commercial sources. 12. At the end of 1976, external public debt outstanding and disbursed, excluding military debt, was estimated to be around $970 million (14 percent of GDP) of which 80 percent was held by Governments (28 percent, OPEC; and 47 percent, centrally planned economies), and 4 percent by multilateral organi- zations (exclusively the World Bank Group). Debt service payments in 1976 amounted to only 10.6 percent of exports (including NFS). With assumed new borrowing, debt and debt service would rise significantly. By 1980, Bank projections indicate that debt could reach 30 percent of GDP while debt serv- ice would be around 16 percent of exports. Beyond 1980, the effect of poli- cies emphasizing exports (para. 6) would stabilize the relative burden of debt service at a manageable level of around 20 percent of exports. Syria is therefore creditworthy for continued Bank lending. - 5 - PART II - BANK GROUP OPERATIONS IN SYRIA 13. Syria has to date received four IDA credits totalling US$47.3 million and eight loans totalling US$249.1 million (including one loan of US$12.5 million on Third Window terms), net of cancellations. Although Syria is a member of the Corporation, IFC has made no investments. At the end of 1976 the Bank Group accounted for 4 percent of Syria's total out- standing public debt; by 1980 it is expected to account for 10 percent of total outstanding public debt and 7 percent of public debt service obliga- tions. Annex II contains a summary statement of IDA credits and Bank loans as of April 30, 1977. 14. Project implementation has generally suffered substantial delays due largely to circumstances beyond Syria's control. The 1973 hostilities brought works to a standstill and diverted the country's resources first to military, then to reconstruction tasks; the unsettled conditions in the region and weaknesses in the administrative system caused project implementa- tion to be slow. The above developments were compounded by the high rate of world inflation and generated considerable cost overruns in most projects. As a result the composition of the Damascus Water Supply and Mehardeh Power Projects had to be revised and additional financing secured. In the case of the Balikh Project, the Government obtained a $50 million loan from the Government of Iran and has undertaken to provide the Bank with a new finan- cing plan for the project. In the case of the Second Highway Project, the Government obtained a $45.9 million loan from USAID to finance one of the components originally included in the project and has decided to upgrade the project roads to four lane standards. Recent progress in project implemen- tation has been encouraging; contracting and construction is well underway for most projects although the Damascus Water Supply Projects will require close coordination of the works financed by different donors. 15. Lending for infrastructure accounted for over two-thirds of Bank Group lending to Syria thus far. It aimed at fostering well designed sector policies and strengthening various public institutions in charge of power, water supply, highways and telecommunications. The objective of lending for irrigation development (Balikh Project) was to help increase and stabilize agricultural production and farmers' incomes which are subject to wide fluc- tuations under rainfed conditions. The livestock development project for which a loan was approved earlier in FY77 provides for fundamental improve- ments in feed and flock management policy as well as credit to sheep farmers, most of whom are among Syria's poor nomadic population, with an aim to in- creasing and stabilizing incomes in the sheep subsector throughout Syria. Due to delays in selecting and appointing consultants, this loan has not yet become effective. 16. A diversification of lending operations in Syria is envisaged through a gradual shift of emphasis away from long gestation infrastructure projects, except where they are of utmost social priority (e.g., education and the provision of basic urban services, such as water supply), toward quicker yielding projects in the directly productive (agricultural and industrial) - 6 - sectors. This would be in support of the Government's Fourth Five-Year Plan (1976-80) strategy of developing the country's productive capacity and im- proving its social and physical infrastructure. However, project preparation according to Bank standards remains a serious constraint in these sectors. 17. Negotiations have recently been completed for an education project, which provides for facilities for teacher training and vocational and tech- nical training, and for related technical assistance. A tourism project, providing for hotel training and technical assistance to the sector, and a rural electrification project, which would be part of the Government's rural electrification program covering all of Syria, have or are presently being appraised. Preparation has also begun for a third highway project, which would include the construction and/or upgrading of high priority road sections; for an irrigation/drainage project, providing for the rehabilitation of salt- affected lands in the lower Euphrates area; and for agro-industry (cotton seed processing), industry (rehabilitation of textile plants), rainfed agri- culture (integrated development in the northeastern region), and sewerage facilities (for Damascus, Hama, Homs). 18. The lending activities described above would help to improve project preparation and implementation, especially in those sectors in which the Bank has not been previously involved, and strengthen sector policies and institu- tions. The proposed operations will include significant technical assistance and training components to achieve the above objectives. PART III - THE WATER SUPPLY AND SEWERAGE SECTOR 19. Although substantial surface and groundwater resources are avail- able in Syria, the scarcity of water supplies is a present and growing problem in some regions as a result of the unbalanced distribution of the resources (annual rainfall varies between 50 mm and 1,000 mm in the different areas of the country) and the rapid increase in population (3.3 percent per annum) which reached 7.4 million by 1975. Growth in urban population has been above average and rural-to-urban migration significant. Some 45 percent of total population now resides in urban areas, where, generally, water transmission and distribution systems are overburdened and sewerage facilites inadequate. Two main rivers are utilized for public water supplies, the Euphrates, which serves Aleppo and towns in the northeast, and Orontes, which serves the central area; there are also a number of important aquifers, one of which feeds the Figeh spring supplying Damascus. 20. In Damascus, IDA and the Bank have assisted in the financing of projects designed to improve and expand the distribution and supply systems (Credit 401 for $15 million in FY73 and Loan 1241 for $35 million in FY76). Financing for these projects is also provided by the Arab Fund ($41.3 million) and USAID (two loans totalling $62.5 million). The Credit/Loan also include funds for a study of measures to reduce pollution in the Orontes and Barada rivers, including sewage treatment facilities in Damascus, Homs and Hama, and - 7 - for training of staff of the city's water supply authority. Construction of the components financed by the Bank Group is generally well underway. A close coordination of the works financed by the various donors will be required to permit the timely link-up of the various components of the supply and distribu- tion system and to minimize expected delays in implementation of the project components financed by other donors. The total project, when completed (1982), would meet the anticipated demand until 1987. 21. In Aleppo, the principal manufacturing and trading city in northern Syria, the population served by Etablissement Public des Eaux d'Alep (EPEA) with water from the Lake Assad reservoir (some 80 km east of the city on the Euphrates river) has increased from about 640,000 in 1970 to over one million in 1976. Because of the rapid growth in demand, severe shortages of water during summer have occurred since 1973; the temporary shut off of supplies in rotation results in serious health hazards from back syphoning. The partial completion, by mid-1977 of the second phase of supply works, which involved a duplication of the original scheme completed in 1967, should remedy this situa- tion, but without further works, supply would become inadequate again by 1981. The city's sewerage system is in poor condition. Most of the population is connected to sewers but there is no treatment. 22. At the central Government level, the responsibility for water supply and sewerage both in urban and rural areas is shared between the Ministries of Housing and Utilities (MHU) and the Ministry of Local Government (MLG). While MLG has overall responsiblity for the services provided by the municipalities, MHU provides general guidance and assistance on technical matters. Eight major cities, including Aleppo have semi-autonomous water authorities, which are subject to close Government control on such matters as tariffs, budget, personnel, salaries and capital investment. Municipalities are responsible for the operation and management of sewerage systems, and outside the major cities for management of the water supply systems. 23. At present, about 70 percent of the urban population is served by metered house connections; the remainder depends upon private wells, public taps and water vendors. Service levels for urban poor within city limits are generally satisfactory. In 1975, an estimated 60 percent of the rural popula- tion had reasonable access to safe water, compared to 50 percent in 1970. At present, about 75 percent of urban dwellings have some form of sewerage serv- ice; however, there are no sewage treatment plants and most of the networks discharge raw sewage into rivers, streams or the sea. No organized disposal systems are available to the majority of the rural population. 24. The Government objectives in the sector, as reflected in the Fourth Five Year Plan (1976-80), are: to increase the house-connection of urban dwellings to 80 percent, and the rural population with reasonable access to safe water to 70 percent; to improve the quality of service; and to give priority to sewerage in order to reduce pollution of major water sources. The cost of the program for the water supply and sewerage sector is estimated at LS 2,616.5 (US$662.5) million in 1975 prices, of which LS 1,552.0 (US$393) million would be allocated to the eight existing public water authorities, LS 924 (US$234) million to water supply for other municipalities and rural areas - 8 - and LS 140.5 (US$35.5) million for sewerage. The Government plans to further decentralize the responsibilities for urban water supply through the estab- lishment of public water authorities in the other six provincial capitals. 25. A Bank water supply and sewerage sector mission visited Syria in November/December 1976. Its findings and recommendations will be discussed with the Government shortly. The mission reviewed the Government's sector program and concluded that two principal factors are likely to constrain investments in the sector. The first is the shortage of professional and skilled manpower resulting from the absence of water supply and sewerage train- ing programs and the low salary levels in the public sector, which causes an outflow of trained manpower to the private sector and out-migration of skilled individuals to neighboring oil-exporting countries. The program for the estab- lishment of a national water supply and sewerage center and training of staff is supported by financial and technical assistance from the Arab Fund and the Bank. Secondly, the financial constraints of the Government resulting from recent developments, will possibly result in a reduction of the sector program envisaged in the Fourth Five Year Plan (see para 24 above), even though these constraints will be somewhat alleviated by the recent increases in tariffs and other charges for water supply which will enable water authorities to generate cash surpluses to meet part of their investment needs. PART IV - THE PROJECT Background 26. The source of Aleppo's water is the Lake Assad reservoir on the Euphrates River. Raw water quality has been good, although occasional high turbidities and seasonal algae infestation have occurred. After treatment at the intake, gravity flow aqueducts bring the water to the city where it is further treated prior to distribution. The first phase of the supply system was completed in 1967; the second phase is expected to be completed by 1977 and will bring the quantity of water supplied to Aleppo to 180,000 m3/d. EPEA's system has been operated efficiently and water losses have averaged a reasonable 30 percent of total production and 24 percent of water pumped to the city. 27. The population served by EPEA grew at 8.2 percent per annum between 1970 and 1976 as a result of natural growth, rural-to-urban migration and extensions of the supply area. Severe shortages of water have occurred in summer since 1973; this necessitated shutting off supplies in rotation and caused serious health hazards from back-syphoning. About one million people are presently served by the system; about 900,000, or 90 percent, have direct house connections. By 1976, domestic consumption accounted for about 75 per- cent of all water consumed and per capita daily consumption amounted to 84 liters; it is expected to increase to 90 liters in 1977 when ongoing supply works will be completed and present constraints will be removed. However, without further works supply would become inadequate again by 1981. - 9 - 28. The sewerage system is operated by the Public Works Department of the Municipality of Aleppo and financed from the municipal budget. It serves, at no charge, approximately 80 percent of the municipal population; of the re- mainder, 10 percent rely on septic tanks. Most of the system was constructed in the last 60 years but the main interceptors were built in the 1940's. Sur- charging occurs frequently as a result of the rapid development of the city. The system is in poor condition. All flow is by gravity into three inter- ceptors which discharge undiluted raw sewage into the Quwaik River, which is used for contact irrigation. During periods of very low flow, this creates serious health problems which periodically reach epidemic proportions. In Lattakia, there is a need to relocate the present sewage outfalls because of a proposed port expansion, and to extend the system to serve planned tourist and industrial development areas. The proposed project, provides for feas- ibility studies of the sewage collection systems in Aleppo and Lattakia and preliminary engineering studies for sewage treatment and disposal to be under- taken by consultants. 29. Preparations for the project's main component consisting of the third phase of works for meeting the rapidly increasing demand for water in Aleppo, were undertaken by EPEA. A Bank identification mission visited Syria in May 1976. The project was appraised by a Bank mission to Syria in November/ December 1976. Negotiations were held on May 9-16, 1977 in Washington, D.C.. The Government delegation was led by Mr. Moharram Tayarra, Minister of Housing and Utilities, and EPEA was represented by Mr. Abdul Latif Breydi, General Director. Objectives 30. The objectives of the proposed project are to: (i) expand the water source and transmission facilities to meet anticipated demand until about 1991; (ii) reinforce distribution and thereby improve minimum pressures and reduce risks of pollution within the system; (iii) extend the supply into fringe areas of the city occupied mainly by the urban poor; (iv) improve project implementa- tion capacity and operations of EPEA; (v) prepare sewerage and sewage treatment projects for Aleppo and Lattakia; and (vi) improve construction sector planning capabilities in the Ministry of Planning and the administration of public con- struction enterprises. Project Description 31. The water supply component comprises the expansion of the intake, transmission and treatment facilities from Lake Assad to Aleppo and extensions to the distribution system; it consists of the following elements: (i) a third gravity aqueduct 75 km long to convey 220,000 m3/d and pumping mains to deliver 110,000 m3/d; (ii) pumping facilities at the Lake Assad intake to produce 220,000 m3/d and extensions to pumping and treatment facilities at existing stations to produce an additional 110,000 m3/d with provision for an increase to 220,000 m3/d; (iii) additional service reservoirs, with a combined capacity of 100,000 m3; (iv) distribution mains to serve areas occupied by urban poor and areas where future growth is planned; (v) auxiliary buildings, administrative offices, transportation and office equipment; (vi) consulting - 10 - services (about 800 man-months) for studies (see para. 44 below), review of construction methods, preparation of detailed design of works and bidding documents, bid evaluation and supervision of construction; and (vii) training of professional and technical staff. 32. The project also provides for about 200 man-months of consulting services for studies for the preparation of sewerage and sewage treatment projects in Aleppo and Lattakia; and about 40 man-months of consulting services to assist the State Planning Commission in the collection and analysis of data on construction resources and building materials in Syria, and to provide tech- nical assistance to the Syrian public construction enterprises in cost account- ing, equipment repair and warehousing. The proposed assistance to the con- struction sector would aim at improving its structure and operations to ensure that the investment program in the water supply and sewerage sector, as well as in other sectors, can be implemented timely and effectively. Cost Estimates 33. The estimated cost of the various project items, expressed in June 1977 prices, are given in detail in the Loan and Project Summary. Total proj- ect cost would be $116.8 million, of which $58.4 million, or 50 percent would be in foreign exchange. The major element of cost is the aqueduct, the cost estimates for which have been based on the design and construction methods similar to those for previous aqueducts. Physical contingencies (15 percent of base cost estimates) and price contingencies (26 percent of base cost esti- mates plus physical contingencies) would amount to $35.6 million, or 30 per- cent of total project cost. Financing Plan 34. The Bank loan of $50 million would finance 43 percent of the total cost of the project, as described in paras. 31 and 32 above, net of duties and taxes. Of the proposed Bank loan to the Government $48.5 million would be on- lent to EPEA, and would cover 85 percent of the foreign exchange cost of the water supply component (para. 31 above). The on-lending terms provide for a maturity of not less than 17 and not more than 20 years, including not less than 3-1/2 and not more than 4-1/2 years of grace, at interest rate of 8.2 percent. This flexibility in on-lending terms will permit the Government to make the loan proceeds available to EPEA at terms somewhat closer to those for Etablissement Public des Eaux de Figeh (Damascus) under Loan 1241 approved in FY 1976. The $1.5 million balance of the Bank loan would finance the foreign exchange component of the proposed sewerage studies and technical assistance (para. 32 above), for which the Government would provide local cost financing. EPEA's overall financing requirements for capital works over the 1978-82 con- struction period, which in addition to the project would include $6.6 million for secondary distribution works, would amount to $121.6 million and, aside from the Bank loan, would be financed through EPEA net cash generation of $20.8 million and through a Government equity contribution of $52.3 million equivalent. Financial Situation 35. EPEA has a good financial record and has thus far generated a sub- stantial proportion of its investments requirements. For 1973-1976, EPEA's operating ratio averaged about 54 percent and its rate of return on average net fixed assets about 10 percent. In recent years, increases in operating costs have exceeded those of revenues, as a result of inflation and the lack of tariff increases over nearly two decades; this has caused a deterioration in EPEA's financial performance. However, the recently implemented new tariffs and charges for water supply (see para 37 below) will result in a considerable improvement in EPEA's financial performance (see para 38 below). 36. EPEA's debt/equity ratio increased from 30/70 in 1973 to 49/51 in 1976 as a result of borrowing from the Government's Public Debt Fund (PDF) to finance the second phase of supply works. At the end of 1976 long term loans, solely from the PDF, amounted to LS 80 (US$20 million). 37. EPEA has recently (May 1977) implemented new tariffs and charges for water supply. The water rates in effect prior to May 1977, which had remained unchanged since 1959, yielded an average of LS 0.30/m3. Together with other charges, the new rates of LS 0.60/m3 for household consumption and LS 0.75/m3 for non-household consumption, will yield revenues of LS 1.10/m3 (compared to about LS 0.55/m3 prior to May 1977). In order to maintain an acceptable finan- cial performance and to generate a reasonable contribution to the investment program, EPEA would set and collect rates for the sale of water not below the present levels; as a minimum, these rates, together with revenues from other charges on water supply, would cover in each year, operating expenses (exclud- ing depreciation), debt service and increased working capital, plus during the period 1978-82 at least 15 percent, and beginning in 1983, at least 35 percent of the three-year average investment cost, computed over one actual and two forecast years (Section 4.03(a) of Project Agreement and Section 4.04 of Loan Agreement). By not later than September 30 of each year EPEA would review the adequacy of its tariffs for the next year on this basis. The results of these reviews would be furnished to the Bank (Section 4.03(b) of Project Agreement). It is expected that no tariff increases will be required until 1982 to generate the agreed contribution to the average investment program. If and when future upward adjustments in tariffs and charges are required, EPEA would ensure that such adjustments would be higher for large consumers, which represent the higher income groups, than for consumers of small quantities of water, which represent the poorer segment of the population. This would allow an equitable application of future tariffs and the gradual introduction of progressive rate schedules. 38'. With the new tariffs and charges, EPEA's rate of return on net fixed assets is expected to be somewhat above 12 percent during any of the years 1977 through 1981; thereafter it would decline as project works are added to fixed assets. However, with the increased utilization of the project facilities, the rate of return would steadily increase again between 1983 and 1991, provided tariffs are maintained in real terms. During this period only minor invest- ments in pumps and treatment will be required for full utilization of the transmission works. EPEA's debt/equity ratio is projected at about 40/60 - 12 - during the period 1977-82. The debt service coverage is projected at 1.7 in 1981 and 1.2 in 1984. EPEA would not incur any further loans unless its net cash generation, before depreciation and interest, exceeds 1.5 times its debt service in any future year, including debt service on the amount to be bor- rowed from the proposed Bank loan (Section 4.04 of Project Agreement). Management and Organization 39. Service des Eaux d'Alep was established in 1947 and was transformed into the Establissement Public des Eaux d'Alep (EPEA) in 1975 under a decree establishing a semi-autonomous authority for the water supply of the city of Aleppo and villages along the transmission pipeline from Lake Assad. EPEA is fairly autonomous in its day-to-day operations and is managed by a Board of Directors comprising a President-Director General, four department managers and a workers' representative. The Minister of Housing as well as, in some cases, the Prime Minister's Office are involved in major decisions (see para 22 above). To expedite the implementation of ongoing investment works a project committee under the Governor of Aleppo, was established by Presidential Decree in 1975 for a period of three years ending January 1978. This committee has wide ranging power in matters of procurement, project execution and commis- sioning. The operation of this committee would be extended to cover the proposed project (Section 4.02 of Loan Agreement). 40. Five department managers report directly to the Director General who is responsible for executing Board decisions. EPEA's top management is an experienced, qualified and efficient team. EPEA's total staff of 756 includes 16 engineers, 15 other professional staff and 725 skilled and un- skilled workers. The operating staff is competent and experienced, but spe- cialized training in such areas as system design, treatment plant operation, distribution system analysis, quality control, budgetting and accounting is required and is provided for under the proposed project. EPEA would prepare a training program for its professional staff and submit such program to the Bank for comment prior to June 30, 1978 (Section 2.04 of Project Agreement). EPEA's staff is presently housed in several inadequate buildings throughout the city which results in lack of communication and inefficiency. The pro- posed project therefore provides for the construction of a new EPEA office building. 41. EPEA's budget, including proposed levels of staff, requires Govern- ment approval. Temporary workers can be hired for a period of less than six months. EPEA's annual staff turnover is only 1.5 percent as a result of Gov- ernment restrictions on resignation and transfer of staff. EPEA has recently been unable to fill a number of vacancies mainly due to the low levels of public sector salaries. In order to ensure effective project implementation the Government would permit EPEA to be adequately staffed at all times with experienced and qualified personnel (Section 3.02 (b) of Loan Agreement). How- ever, in view of the overall shortage of technicians, especially in the public sector (see para 9 above), and given the scope of the proposed project works, there will nevertheless be a need for EPEA to employ a substantial number of engineering consultants to assist in project implementation (Section 2.03 of Project Agreement). - 13 - 42. EPEA's accounts are kept satisfactorily on a commercial basis in accordance with a unified accounting system introduced in 1974. The billing of customers on a two month-cycle, and the collection of accounts are satis- factory. However, office equipment is old and inadequate and the proposed project provides for its replacement and expansion. EPEA's internal auditing is weak and external auditing by the Ministry of Finance has thus far taken place with long delays. EPEA would engage auditors acceptable to the Bank to undertake an annual audit of its accounts for 1977 and onwards (Section 4.02 of Project Agreement). Project Implementation 43. Project implementation will be carried out by EPEA with the assis- tance of consultants. Construction of project works, except for new intake pumps to be installed in 1977, is scheduled to start towards the end of 1978. All works would be completed by the end of 1981. EPEA has agreed on the critical dates of the project construction schedule and would establish and maintain systems to produce performance and progress indicators to monitor the project implementation schedule and would report relevant information to the Bank within three months of the end of each quarter (Section 3.02 (c) of Proj- ect Agreement). Status of Engineering 44. The proposed third phase of supply works would be a duplication of the schemes used by EPEA for the earlier phases of the works. The necessary land and way leaves are already owned by EPEA. Consulting engineers will be employed to review various techniques of constructing the proposed alternative and to prepare detailed designs and bidding documents. Because of the deposi- tion of silt at the intake which has rendered two out of three gates inopera- tive, EPEA would engage consultants to undertake studies to determine the extent of the silting problem. In view of the potential risk of flooding of pump motors at the intake, EPEA would engage consultants to investigate and advise on actions to minimize this risk. On the basis of the studies on silt- ing and the protection of intake pumps, the Government would take measures required to prolong the life of the intake (Section 3.03 of Loan Agreement). EPEA would also engage consultants to design water treatment plants, taking into account the changes in water quality which have occurred since the con- struction of Lake Assad. The commencement of work by all consultants referred to above would be a condition of loan effectiveness (Section 6.01 (c) of Loan Agreement and Section 2.03 of Project Agreement). Finally, to ensure adequate planning and the least cost-scheme for the extensions to the distribution works (see para 51 below), EPEA would engage consulting engineers to analyze the existing system and review alternatives for its extension (Sections 2.02 and 2.03 of Project Agreement). Procurement 45. Contracts for civil works (amounting to about US$61 million includ- ing contingencies) and for materials and equipment (amounting to about US$43 million including contingencies) would be awarded following international - 14 - competitive bidding in accordance with Bank Guidelines, except for contracts estimated to cost less than US$300,000. These contracts, the total of which would not exceed in aggegate US$5.0 million, would be awarded on the basis of local competitive procurement procedures acceptable to the Bank. In bid comparison, local manufacturers of equipment and materials, to be procured under ICB, would be allowed a margin of preference equal to 15 percent of CIF price or the actual customs duty, whichever is lower. 46. Bidders for civil works contracts are expected to include public construction enterprises which under their charter are exempt from normal supervision by the employer. The Government has agreed that for a public construction enterprise to be qualified for bidding, the Government would, for the purpose of the project, waive this provision in its charter (Section 2.03 of Loan Agreement and Schedule I of Project Agreement). In addition under Syrian legislation public construction enterprises are exempt from posting bid bonds and performance bonds. The Government has agreed that tender calls will require bidders to state the cost of bid bonds and performance bonds as sepa- rate items and that the cost of these will be deducted from the amount of the tenders when comparing tenders which include those from public enterprises (Section 2.03 of Loan Agreement and Schedule I of Project Agreement). Disbursement 47. The proposed loan of US$50 million would be disbursed on the basis of the following percentages: (i) 100 percent of foreign expenditures for directly imported equipment and materials; (ii) 100 percent of ex-factory cost of locally manufactured equipment and materials; (iii) 70 percent of total expenditures for locally procured imported equipment and materials; (iv) 25 percent of total expenditures for civil works; (v) 100 percent of foreign expenditures for consulting services, technical assistance and training. The estimated disbursement schedule is shown in the Loan and Project Summary. Disbursement is expected to be completed by the middle of 1982. Project Justification and Risks 48. Environmental and Health Impacts. The high incidence of water-borne diseases in the Aleppo area arises in part from the following causes: (i) because of severe shortages in water supply during the past three summers, large sections of the supply area have been turned off in rotation resulting in back-syphoning of polluted groundwater into the distribution system; (ii) outlying urban areas cannot be provided with piped supplies until increased - 15 - source facilities are available; (iii) during periods of water shortage the supply is supplemented by untreated water from private wells, the quality of which is not continuously monitored. With the completion of the second phase of the supply works in 1977, those health hazards should come to an end; they would, however, recur in 1981 when demand would again exceed supply if the third phase is not implemented. A further health risk in the area arises from the present lack of sewage treatment and the use for irrigation of water from the Quwaik River containing a high proportion of raw sewage. 49. The relatively small proportion of the Euphrates water taken for public supply to Aleppo raises no riparian or environmental problems; at maximum capacity, expected to be reached beyond 1990, the extraction of water would amount to 80 million m3 per year for the proposed project which, includ- ing works under operation or construction, would bring total extraction to 160 million m3 per year, or about 0.5 percent of the total average annual inflow of 29.4 billion m3 at Lake Assad. Although the increased supply will increase the volume of sewage discharged to the Quwaik River, planned improvements in the sewerage system, including sewage treatment, will eliminate any serious health risks from this source. 50. Demand. The population served is expected to grow at 3.3 percent p.a. and per capita consumption, which is very low at present (para 27), is expected to increase by 3 percent p.a. Industrial water use, presently only 3 percent of the total, is expected to increase rapidly with the completion, in the near future, of a new industrial estate, and would amount to 20 per- cent of total water use by the early 1980's. Total water demand is expected to increase by about 9 percent p.a. between 1977 and 1984. Without the proj- ect, supplies would become inadequate by 1981. 51. Least-Cost Solution. The only proven major source of water avail- able for Aleppo is from Lake Assad on the Euphrates River. The project cost estimates are based on the duplication of existing supply works with staged construction where appropriate and extensions to the main distribution system. After careful consideration of construction alternatives it was found that the proposed solution for this stage of the works represents the least cost solu- tion primarily because it takes full advantage of an existing tunnel under the city and existing intake works which were built with capacity for the proposed project. Consultants will assist EPEA in preparing detailed designs for the proposed alternative and in analyzing the existing distribution system to optimize the design of the reinforcement and extensions to outlying areas. 52. Economic Analysis. The most important benefits associated with the provision of a reliable and safe water supply are health-related. These would be-partially revealed through medical cost saving, a general improvement in individual well-being and a cost saving to and/or increased productivity of business enterprises. Because of their nature and the absence of reliable information,-these benefits cannot be quantified. Using the value of sales of incremental water supply from the project (at present tariffs and charges) as a minimal measure of economic benefits, the project would have an internal economic rate of return of 10 percent. The average revenues from water sales of LS 1.10/m3 resulting from the recently introduced new tariffs and charges - 16 - (see paragraph 37 above), are virtually equal to the long-term marginal cost of water in Aleppo, which has been estimated at about LS 1.14/m3, at a dis- count rate of 10 percent (the estimated opportunity cost of capital in Syria). 53. Risks. Measures to be taken to ensure satisfactory project comple- tion are those normally found in a typical water supply project. The technical design content of the project is similar to work already completed by EPEA, and with assistance of consultants, implementation should pose no major problem. EPEA is a long established organization which has shown that it can perform effectively, and the training, techniques and control methods to be introduced through the project will assist in strengthening EPEA's operational capabili- ties. Consequently, the proposed project poses no special risks. PART V - LEGAL INSTRUMENTS AND AUTHORITY 54. The Loan Agreement between the Syrian Arab Republic and the Bank, the Project Agreement between the Bank and Etablissement Public des Eaux d'Alep, the Report of the Committee provided for in Article III, Section 4 (iii) of the Articles of Agreement of the Bank, and the text of a draft re- solution approving the proposed loan are being distributed to the Executive Directors separately. Features of the Agreements of special interest are described in Annex III. The commencement of work by consultants (Section 6.01 (c) of Loan Agreement) would be an additional condition of effectiveness. 55. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank. PART VI - RECOMMENDATIONS 56. 1 recommend that the Executive Directors approve the proposed loan. Robert S. McNamara President Washington, D.C. June 1, 1977 4-4. C -s .~~~~~~~~~~M t m t LI Il I t iIt I IS * h * a~~~~~~~~~~~~~~~~~~~~~~~~~~~4 'Iwo S P-4 . . : ~~~~-1l -1 ~~ ~ 1~ ~ a we ..a.-o a i C 0 -I C C O C.O i O 0 0 CI V 0 - CI - C - - 0 9 0 MI I ta f ta1 s-Cat * nt0 zI t 1- ** ItS - ..I - 4 01 - - : 2 IC -~~~~~~~~~~~~~~~~~~~~% tt I 1:I t I I ttt. a~ ~~~~~~~~~~~~~~~~mv CI * 0 0 cc~~~~~1 O- 040 f C SP m N c . CI C- 0 I 0 0 0 0-Cft ~~~.: - v~~~~~~~~- - 0-c - 5* It I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ft mW! t 0 a. SS~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~a cm I~~~~~~~~~~~0 . I V .; I.. S I~~~~~~~~~~ -:-I & I~vM aI Ia. a co coCoa C i ~~~~~~~~~~~~~~~~~~~~~~~~ .. eea ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ * - D. aCe 00 . ft.0 0 00 o I.x& I M - -I IsI a *. a. - - C Ca 00 051~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~au Z Z --OS..m - C7 a aaW"S ~~~~~Ia S .a -~~~~~~~~~~~~~~~~~~~~~~~~~~df. a . W A -4-4 -9-4 ' ~9- ~ wS s.c a cc a- *nc C *10= - Cow. C COO 0 C 00 - 0 oa * S. an ma C * 00 o* cC~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~s a CUf 5 Ca a 'en:v a~ ~ ~ ~ ~ ~~ ~ ~~~~~~~~~~~~~~~~~~~~~ o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~o N lo Ia ANNEX I Page 2 of 4 pages unlees othorulee noted. dat. for 1960 refor to any year betwee 1959 end 1961, for 1970 between 1968 and 1970, and for Moat Recent E-ertesc between 1973 end 1975 00 Algeria haa beet .e leccd atno objecttoo coun.try o the beet, of the etilarity to the cnmcoretatn of the tot .. coc irte, rich the lending roeI aItall f-notion a...igoed to the pub ic setr,ed the ettetltrity to the gr... repcod-tttos rent and age structure of the tcc populetl... etcl n,the distributIonof population to urbnres and the labor fortes it agrtcultutal iploynent). SYRIANi ARAB Rff. 1960 I 6 years of ege end meet; lb Syrrian popal.acte only; /n 1962; /d Incladiog nidwi-ne /0 1961-62. 1970 /a Syrian populetlen onlyl /b Iecludin ndice aenietant nidis-n and a..setenet ocae c 1964-66, Id 1ocludiog UN11WA schoo..I HOST RECENT ESTIKATE: /. 1971; Ib 1970-75 end 70-74 for arhee grmath; /c Including Pale1- tani. refage..c /d 1972; /0 Including niwoe strn idwl-n end aesiereat nure...; If 1969-71 averge; Z Inotudlg IRMlgA schools; lb Ratta of population wider 15 and 65 and ove to toteS labor force TLyNISS 1970 /a Su to onigretio, population groth rate io laster than the rate of natural increase; lb 1956-66, /c 1966, Id geti Lof poPolaci-onuder 15 and 65 and evr to touta Saber force' /e Cevertog 4.5 cillion hactaree of privete lend, eacluding 0.8 mIllio, heatares in public -ea-hlp, and 2.1 nillion hagoarea of collective leand; If Pereonme to g"vemast nevieewly; Gj oveest beapita1 natabliahinnta wily; lb 1964-66; /I Ragieterd only. TuORREY 1970 /a tacldfia 17 a..nter previ.ces; lb 1965-67; Lc 1665-70; Id Ratio of populetion onder 10 and 65 end ovr to lbabr forc 15 yeare and over I. 15 years mand ovr, encludiog uwployed; If Regietrerd only, a& Diepoeeble income; lb Inoludiog.. aeiatant nureec and nidwi-s; /1 196,4-66; /I person sic years, ed -or who tall the C.e-n tabot, that the y can re ad and write, Al-OtRIA 1970 I 1966, lb ncluding military pereonnel in barracka and 274,663 nainaearoad of wh- 229,020 are oconmtclly acctvs, als aecludlog1,210,000 fenlee naily occupied in agriculture, /c 1964-66; /d Total, urban cod rural, Ie nlding nidwio- and aesinoat uset 0L5, Jeocery 12, 1971 DEINmITIONS OF SOCIAL INDICATORS Laud Area (thou An2 ) Poulation roell ure in perc - Ppulatioc divided by tubrbo of practicing Total - Total aufc rscnren edaraadIln aes a n foa r grduate, turee, 'tr-t-d" or certifi.lod ouen and gAKIt.otrcn nlet forcltrn iaue epoaiyo nilry perecone1 with training oe exporiecce. permaneci ly for crops, p-et-re, narbet &kitchen garden, or to lie Poeclati,on par boh lalbed - Population divided by ounber of huepita1 bode M..lo. aritabl in publIc o. roc eea eod epeialiae,d hoepita" and rehab ilitatio not ..;co lde aring home adocbliahc,tot for GNr per capita luc5) - GNP for cepita astn satcretnrbet pricee, cuetodia1 and prevettIce car. ceclae by tom c--eeion method an World Beak Atlaa (1973-75 baeis) Per cagite pply of caloric, (7. of requiremets) - Cocpotod from eorgy 1960, 1970 and 1975 data, eqIvaLen--t of ont food eupplin. evalable in coun.try per capita perday; avileble suppline tonprise. doneetic prod-ctioc, laiprLa lees nopocte, Puuaio n ital ettiatice and chane in stack;ot euphic ocld 1aia feed ,oede, quanit!- Povulaioc (id-yr nilloc) -As of July firet: if not avilable,tn sdi odpoeslo.o oeei itluie roqirota avru rftocdyert iae,16, 95ad17 aa waron tinated by PAO bhas.d on phyeiologlca1 toa ds for normal activity and heal thbconeidering e Iiocoa tiporatur-, body osighte, age and Populotoc densty - p.r.squar km - Old-yea population per square kilo- en dietribotione of popuSa ticn, and al1o-ing 117. for caste at hou.e- mo, 1tor10 cce)o 1oa area, hold level. Puculatiun density - per square km of Artc. land - Computed ae aboa for per cap It epplZ of protein (gram per day) - Protein content of per agiutr lelnd ocly. capitatnet auppy of food per day; not nupply of food Ie defined ae abmoreuiommt for nlco iri secabliehed by BSDAE.t.nnl Oct01 otaciecice Reeceech~~~~~~~~~~ Seric proideIfor niitm aluac of 60 fenc of total Cru2de bir th rate per thocaacd, averge - Mince1 lIve birtha pot thocasod proteic pnr day, and.20 gram of animal codpus prti,o hich ofmid-yea ppultin;ceoyer..i...l ovrge ening in 1960 end 10 grame eh.ad be anIal pruteic; thean standards ur lower than th... 1970, end floe-ye ravera enrdin in195fo not resd etimt,o%5ga,o oa rti and 23 grams of animl protein ge an C-1v d-eth rote per thooseod,.aerg-1AnnualI deetha per thmcae-d of nid- averge for the world, propoe..d by PAO in the Third World Pond Suc-ry. ycar .yPu"aior c -yea,ra.r ithoetic, averegeeedingit!1960 ad 1970 and Pee capitaf prtineupp!Lyfr- aImal and polee - pro toin eupply offood fiveyearaverge ediogic 975f fr cocrecn sti_n dne frma nls ndpseingram, per day. bigfat mortality rate ¼ thou) Annua deaths of inant, under one year of Death rate C(/thou) aces 1-4 - Anua. Id-athe per thb...a-d in age group age per thouoend Ive births. 14 years to children in chic age group, suggested as an indicator of 'if, corer lan at birth (Y..) - Averago nunber of ycare of lif. reouciing malntritio.. at birth, usualy five-year -vreges en ding im 1960, 1970 and 1975 fee dro-iupugvuoont rce.- Edocetlo O'roes r_roductiot rote -ourage uber of live daughtors a oa ill Adjuated troloen rato. primry school - inro1lnant of all a gee an hoar in he cooicpodclepro if heoe en . preent age- P.;aretg ofprimr school-ge population; inclodne child-co aged upecific ferilityrta,uulyfv-er vrgs eningt 90 6-11 year boo adjusted for different 1engthn of prto,ry educa.tion; 5970 and 1975 for dsv-lopivgcvneO.for _outrins with uniore-1 educa.tion, ero1lmont n_ e.ccnd 1007. Popoletiom growth rate (7%) - total- Compoun.d acn. grostb rate. of old- since e.e. pupile are below or above the official schoolIago year popula-tion for ...50-60,' 1960-70 and 1970-75. Adjus.ted ooleot" ratio : - .secodary.echaol - Computed e above; Population growth race 17.) - orbSa - Computed like growth rate of total snadr;y educationreuIe at leas foar yearn of approved Primay poultin,different deloitiona of urban areae map affect cmpare- lmetruction( promidne gene.ral, voctIonal1 or teac.her tr.ainin Il of data eon _cutries instruction for pupils of 12 to 17 years of age; correepondenco ~~ruen ourulailom (7. of total) - Ratio of urban to totol populetion; caurama arc gemerelY.ly -a-moludndeerally ..1odd; diffreotdofilciue oforb 0 aras cy afocito'tnpl.rPbpillitty o'f data Yers of echooling providedJ(firs aod seco.d level) -Total 7eacs of otog ...untir e..shoig at ne..ondery level, voca tional inutructiu nay be par- Ago struiu ro (perceo.t,) -rChil.dren ;10-14 yor okn-g 1-64 yeare), tially or completely excluded. ~WTiTFj fl3aflaAove) a d Perotae f rd-yea popula.tion. Voccatiol earoI-1iant (.of e...ondary) - Voca.tIonal1 iatitutico, ioclude Ace dece.d..y ratio - Betio of population under 15 aend 65 and over to technica,indsrilo other progrm chich operate independeotly or thoar of ages 15 through 64. an dp arnste fecudary In-titutiona. Ecunocic dopecderccy ratio -RSeic of population utdor 15 and 65 and ovr Adult litearyc ract(.1 M - Literate adu1te fable to road and write) a to the labor focei agegroup of 15-64 yoeare. percentage of total adult popoltion aged 15 yeere and over. family lanning- accotos (tumlatly-. thou) - Cumultive number of acce ptors ofgbirth-control devices nodr auspice, of national faeily osn P laccing proga Lance in-eption. Pere pe or room (urban) - Average otuber of porene pot room in Pa_ily gla...ico -user (7. of norrind,woen - Percetgso marre occupied ....e.ntioca1 dwelling, in urban arose; d.ellingo exclude scene f chid-boaing age (15-6 er)cofe bit-onrldeis nc-enacete Z,tre andunoccupied parte. L. all narriod _wome I0 sam ego grouP. Ocapled dualinas w itho t pipe cter (7.). - Occupied conventional doellinge in urban and rural ame without inside or ouceido piped Enpl.yffiet eate fa-ilitise as paroentage of all occupied d-el1ings. Total laborfoc (ho..egod) - Ero-i-ally acci-e persone *including Acest electricity (7. of all dwelling,) - Conventional dwollings with arned forcon and utemp1ylvyd hoc e:coluding bhonesf-s, studente, etc.; electricity in living quarters as percent of total dwellings in urban deinitLoos in _arions _ontIiene aci comparabls. an ualaes .Leor' force in agriculture (7. - Agricultura labor.force (in faming, Ruradl deellina connected to electricity (7. - Computed a, ebov- for f'ro.itry, hu-ting ad fishing) as porcen.tege of tota labor force, rural dwollinge only. Unemploynd(7oflbr force) - Untmployed are usually deined ae pereoms who are blIo and willing to tk.c a job, out of aIJob cc ai give day, eaitn remaine,d out of. a jb, cod seeking work for a specified n L-ma period Rai rciers (per thou pop) - All types of re..niv-r, for radio broand- not rao tn one seek; nay not be - coprble betweena countrice due to cast tog genera public per tho....nd of population; tacludos unlicense.d differed dfinitioveof ucempiyod'anPd sourc of dta, e.g., Sploy- rr-iv_rs in coantrien and in yeare shot registration of radio ei a moot ofic etaiscie, _sampl esrvys, cnapulsory unemploy.ent iceu.r.acn. in effect; data for rec.entyore may not he -opareble nine emett " c-amrisa abolished liceneng. Intove dietribtiiov- Por-tagc of pri-tet Intone (both in cas h end hind) PoesePnga...n.r care (prtoupr Psegr r npritee emtr care seat- received by richest 57., richest 207., pooreno 207., and poorest 407. of ing lasscthan nig`htthpe.reone; axcludee ambulence, htmrses and nilitary huosholds. vehIce.. Eletctroty (bob/yr per cap) - Aticua consumption of industrial, tm Dietributiov of lund eworehip P- Pec tagee of lend coned by wea lthiest meil-ulcad private electricity in kilowatt hour, per capita; 107. and pooet17. flm conrs. generlly ba...d on production date, without alwnefor I.s..e In gids but allowing for,importsandteaporte of electricity. Heaith and Nutrition gawprint (kg/ yr par cap)-Per cpit annue1 consuptionin kilogram Populat.Ion Ret physician - Population divided by,number of practicing estImated from donnatic production plus nt inport of newprint. physIcian qualified from a ned-1a hobamI at univ-ruity leve. ANNEX I SYRIA: ECONOMC DEIE0 ME;DATA Page 3 of 4 pages (Amounts in million of U.. doUars) Actual97 1P75 __to_ d LL66 17473- 1976 - 19 1 16 -92 97 ____ ____ ____ 85 1965 ____9172 275 198 NATIONAL ACCOUNTS ___ Atul9 ~27 t197l5 - 1756198 19 8l -- 72 197 At 1975 Prices A, --rae Annual GIrow-ih Rates Ab Peri-e.t of' G01 Gross Dlomestic Product 5225 4753 5677' 6370 8351 jjg30 5*7 7.3 7.0 6.5 113 III 100 Gains from Terms of rad (~ -378 -475 0 -67 -161 290 -13 -1 0 Gross Domestic income M847 4- SZ1 SM FM- 1751 0 T 2r -8 i--4 100 100 100 Import (ine]. NS'S) 525 1066 1890 1911 2346 2932 11.7 21.0 5.3 4.6 1n 25 32 E?ELrt (iprcaaty 430 813 1251 1094 1328 2048 9.5 15.4 5.0 9.1 15 19 21 Resource Gap 95 7* 17 IE5 -S -- - - - 6- -- Consumption Expenditures 2497 3285 4714 5592 6996 9347 4.0 12.8 5.7 6. 38 77 80 Inivestment " (incl. stocks) 446 1246 1802 1529 2213 2689 14.8 23.0 6.0 3.8 16 29 31 Domestic Savings 351 993 1162 712 1195 1804 16.1 5.4 140 8.6 12 23 18 National Savings 417 1200 1877 1038 1420 1828 16.3 0.4 8.:2 5.2 11 28 32 MERCHANDISE TRADE Annual Data at Current Prices As Percent of Total Imports Capital goods . 123 439 452 760 123922 9 internediate goods (goI1fuels) .. 235 605 626 1085 2093 22 4 39 F'uels and related mlaterials .. 24 99 256 522 1115 . 43 69 Food 124 275 313 381 431 4 623 1 Consumption goods .. ~~~ ~~~40 121 128 218 79 .., 8 Total Mereb. Imorts (cif) r!7 ~ 5T M7W 90 21. 100 100 Esports Petroleum. 52 642 584 752 1002 . 8 6 Phosphate .. -- 15 15 39 102 .. 19 Cot ton . 98 119 162 80 86 . 34 13 ManufacMtured goods .. 137 154 210 587 1691 .. 48 164 Toa ec.Exports (fob) 2 2 T 73 T - 2T81 . 10 100 Merchandise Trade Indices 1975 100 Export Price Index 22 32 100 110 141 198 Import Price Index 41 58 100 117, 158 225 Terms of Trade Index 53 54 100 94 89 88 Exports Volume Index . 96 100 95 ill i56 VALUE ADDED BY SECTOR Annual Data at 19(5- Prices and Exchange Rates Average Annual Growth Rates As Percent of Total Agriculture 871 989 1017 1070 1253 1464 1.8 1.0 4.3 3.2 27 21 17 Industry and Mining 764 1516 2010 2191 3215 5073 10.2 9.8 9.9 9.6 24 32 34 Service 1590 2248 2850 3109 ~892 4992 5.1 8. . 5.1 49 47 48 Total 3~~~~~~~~~S7 WmS Mr7 TM 831 115 30 57.7 7.3 7.0 9.5 00 10 0 PUBLIC FINANCE (SL Million) As Percent of GDP iuEn-er-a rov-ernme nt ) Current Receipts 223 508 1784 1651 .. . 7 11 30 Current Expenditures 188 454 1395 1511 .. . 6 10 24 Budgetary Savings 3,4 54 389 140 .. . 1 1 6 Public Sector Investment 93 252 1217 1272 . 3 5 21 CURRENT EXPENDITURE DETAILS Actual Prelim. Est. DETAIL ON Third Pive-Yesr Plan 1971-75 As % Total Current Expend.) 19 00 1972 19 75 .1976 PUTBLIC SECTOR Actuals Composition Education = - --l --3 INVESTMENT PROGR.AM 1971L-75 ~ Other Social Services 4 2 1 1 Irrigation 1437 16 AgriculIture 3 2 1 1 Agriculture 479 5 Other Economic Services 14 32 36 24 Industry and Mining 1398 15 Administration and Defense 58 48 52 64 Rower 2719 30 Other -- -- -- .. Transport and communications 1178 13 Total1 Current Expenditures 100 100 100 100 Other i.90L 21 ___________________________________________________________________________________ ToTotalEExpenditures99114 10 SELECTED INDICATORS 1965- 1972- 1976- 1980- FINANCING 1972 1975 1980 1985 Average ICON 3.1 2.8 3.8 38Public Sector 3ain8 2 37 Import Elasticity 1.4 1.4 0.7 0. msi orig1059 12 Average Rational Savings Rate 17.4 24.7 20.3 15.4 External Financing 4673 Li 51 Marginal Nitional Savings Rats 50.4 44.9 17.1 14.5 Total Financing 9FI114 1600 3J includes transfers from Arab countries which are excluded from I.A.BOR PORCE AND____ Total Labor Force Value Added Per Workser (1975 Pricesh Ex=. Rates) OUTPUT PRE WORKER I-n thouBand. a o Total 19 12 - lb In U.S.Dollars Percent of Aver' ge 19 - rS Grovth Rate 1972 1972 75 1972 197 =197 12_ GrwhRae 17 1975 19 1 Growth Rate Agriculture 907.7 894.9 55.5 51.1 0.1 1089 1138 37 34 1.1 Industry 303.1 348.7 18.5 19.9 8.5 5001 5764 172 172 4.8 Service 423.4 506.9 26.0 29.0 7.5 5309 5622 183 167 1.4 Tota.l 1634.2 1750.5 100.0 100.0 3.5 2908 3357 100 100 4.9 not applicable -nil or negligible not available --less than half the smallest unit shown SYRIA: BALANCE OF PAYMENTS, EXTERNAL ASSISTANCE AND DEBT 7amounts in millicns of U.S. dollars at current prices) Actual Estimnated Projected 1972 1973 1974 1975 176 1977 197 19 oJece 1985 1990 SUMMARY bALANCE OF PAYMENTS Exports (incl. NFS) 481 601 1061 1251 1214 1354 1525 1990 2691 4381 9498 Iports (incl. NFS) 599 687 1409 1890 2121 2374 2697 3516 4541 6272 10790 R esource Balance (X-M) _ 3- 6 -llbW -Tt7i -152 --1850 -7791 -129 Interest (net) -10 .5 -45 -3 -19 -42 -50 -115 -242 -494 -941 Workers' Remittance 68 51 62 55 67 77 88 117 154 235 472 Current Tranisfers (ret)s8 371 425 664 282 620 620 300 300 300 300 alance on C urrent Accunts 95 _77 - -514 - -12 - -1851 -14i2 Private Direct Investtmnrt - - - - - 20 22 25 28 35 49 Official Capital Orants Public MtLT Loans Disbursements 77 89 134 262 415 731 869 936 1864 2136 2291 -35 -58 -62 -87 -97 -123 -135 -194 -345 -503 -1486 Net Disbursenmets 41 s0 72 17s 73 4 743 1519 163405 Other M?LT Loans Disbursements - - - - 18 31 36 42 51 71 -Re amnts - - - _ - 0 0 9 -19 -38 -53 Net Disbursements _ - _ _ _ 31 27 22 13 19 Actual Estimted Capital Transactions n.e.i. -3 -60 _R -17 -85 19(2 A9 c ua 91974 19 1976 Change in Net Reserves (- = ircrease) 7 -315 -159 -78 344 DEBT A4D DEBr SERVICE Public Debt Ouit. & Disbursed GRANT AND LOAN ODMMITHENTS Official Grants & Grant-like 49 363 416 653 251 Interest on Public Debt 7 9 10 17 32 Repayments on Public Debt 35 38 62 87 97 Public M< Loans 119 138 495 845 787 ToLal Piblic Debt Service 42 47 72 104 129 IBRD - - 88 81 81 Otiei Debt Service (net) - - - - - IDA 14 15 10 - Totil Debt Service (net) 42 47 72 104 129 Other - - - Other Multilateral - - - - - Burden on Export Earnings (%) Governments 70 34 300 719 669 Suppliers 35 89 68 46 38 Public Debt Service 8.7 7.7 6.7 8.3 io.6 Financial Institutions - - 29 - - Bonds - Public Loans ne. e . -. Average Terms of Public Debt Actual Debt Outstanding on Dec. 31, 1976 Tnt. as % Prior Year DO&D 2.9 2.9 3.1 2.6 3.3 WoTR29AL DEB/I Disbled Olly Percent Amcort. as % Prior Year DYO&D 18.1 15.9 21.5 15.8 13.2 World Bank IDA 44 IBRD Debt Out. & Disbursed Other Miltilateral 0 O as % Public Debt O&D - - - 0.5 2.5 Governmeents 782 80 B as % Public Debt Service - - - 0.7 0.9 Suonli era 118 12 Financial Institutions 30 3 IDA Debt Out. & Disbursed Bonds 0 0 as s% Public Debt O&D - - - 0.5 2.0 Public Debts n.e.i 0 0 as % Public Debt Service - - - 0.2 0.3 Total Public M< Debt T5 lu Other MLIT Debts 0 Short-term Debt (disb. only) 0 not applicable e staff estimate not available - nil or negligible ... not available separately -- less than half the u but included in total smallest unit shown a ANNEX II Page 1 STATUS OF BANK GROUP OPERATIONS IN SYRIA A. Statements of Bank loans and IDA credits (As of April 30, 1977) Number Year Borrower Purpose Bank IDA Undisbursed 46 1963 Syrian Arab Republic Highways 8.5 - 298 1972 Syrian Arab Republic Highways 13.8 13.4 401 1973 Syrian Arab Republic Water Supply 15.0 8.5 469 1974 Syrian Arab Republic Irrigation 10.0 2.1 975 1974 Syrian Arab Republic Irrigation 63.0 63.0 986 1974 Etablissement Public de l'Electricite Electricity 25.0 5.6 986-1 1975 Etablissement Public de l'Electricite Electricity 8.6 8.6 1144 1975 Etablissement Public de l'Electricite Electricity 72.0 54.1 1241 1976 Syrian Arab Republic Water Supply 35.0 28.9 1261 1976 Etablissement Public Telecommuni- des Telecommunications cations 28.0 28.0 1311 1/ 1977 Syrian Arab Republic Livestock 5.0 5.0 1312T l/ 1977 Syrian Arab Republic Livestock 12.5 12.5 Total 249.1 47.3 229.7 of which has been repaid 0 .3 Total now outstanding 249.1 47.0 Amount sold 1.0 0 of which has been repaid 0 0 Total now held by Bank and IDA 2/ 248.1 47.0 Total undisbursed 205.7 24.0 229.7 1/ Not yet effective 2/ Prior to exchange adjustments B. Statements of IFC Investments: None (As of April 30, 1977) ANNEX II Page 2 Credit 298 - Second Highway Project; US$13.8 million Credit of April 17, 1972; Date of Effectiveness: February 2, 1973; Closing Date: June 30, 1978 Project implementation started in 1975 after an initial delay due to the unfavorable political situation in the region. In July 1975, after several contracts had been awarded, the Government decided to upgrade the project roads to four-lane standards, undertaking to cover the extra costs involved. Economic studies, based on preliminary cost estimates, indicate the upgrading to be economically justified. The Association will determine its position on the upgraded roads after final cost estimates, based on detailed engineering, become available. Government has called bids for the additional works on the Homs-Tartous road and is presently negotiating addenda to the contracts with the contractors for the construction of the Damascus-Lebanese border road. Agreement for financing of construction of the Damascus-Jordanian border road has been reached between the Government and USAID. This section will, there- fore, be deleted from the project. The Government has requested that the construction of the Damascus-Lebanese border road and Tall Kalakh section of Homs Tartous road remain components of the project even if IDA participation in financing would become low due to the higher standards and increased costs. Credit 401 - Damascus Water Supply Project; US$15 million Credit of June 22, 1973; Date of Effectiveness: February 20, 1974; Closing Date: December 31, 1978 Initial delays in project implementation of about two years were caused by the unfavorable political situation in the region. A revision of the project description was required as a result of considerable cost overruns and was approved by the Board on May 28, 1975. This permitted work to proceed on an urgent phase of distribution. Work is now proceeding in accordance with the contract schedule with about 50 percent of the works completed to date. No further delays are anticipated. Consultants have begun the pollution control studies for Damascus, Homs and Hama. Credit 469/Loan 975 - Balikh Irrigation Project; US$10 million Credit and US$63 million Loan of April 10, 1974; Date of Effectiveness: September 12, 1974; Closing Date: June 30, 1982 Following initial procurement difficulties, works by Syrian Govern- ment organizations for the development of the first 10,000 ha are progressing satisfactorily and construction of the Lower Main Canal headreach (18 km) is underway. Bids for the second part of the project (11,000 ha) have been evalu- ated but recommendations for award have not yet been received, pending a review by the Higher Inter-ministerial Council. The Syrian Government has obtained a loan from the Government of Iran to cover part of the considerable cost overruns and has undertaken to provide a financing plan for the project by the middle of 1977. The Government is presently reconsidering the scope of the project. The question of settlement in the Balikh Project is also being considered by Government. Feasibility studies for a drainage/irrigation project for rehabilitation of salt-affected lands in the lower Euphrates area are expected to be completed around the middle of 1977. ANNEX II Page 3 Loan 986 - Mehardeh Power Project; US$25 million Loan of May 23, 1974 and Supplementary Loan of US$8.6 million of June 4, 1975; Dates of Effectiveness: January 30, 1975 and January 19, 1976; Closing Date: June 30, 1979 The project consists of the first 150-MW unit of new steam-electric power station at Mehardeh; eight 230-kV substations, consultant services and training. The project is co-financed by a US$33 million loan from Kuwait Fund, including a second portion of US$15 million to cover the considerable cost overruns. Although main contracts were awarded about five months late and a further delay of about two months was caused due to a temporary lack of cement, physical progress is satisfactory and the final delay is expected to be minimal. Institutional progress is expected to remain slow due to lack of experienced personnel and the time required to train intermediate executive staff. Loan 1144 - Second Mehardeh Power Project; US$72 million Loan of July 18, 1975; Date of Effectiveness: January 19, 1976; Closing Date: June 30, 1980 The project comprises a second 150-MW steam generating unit at Mehardeh, construction of six and extension of two 230-kV substations, a new office building, organization and accounting studies and training. Construc- tion of the power plant is progressing satisfactorily although a delay of about two months occurred due to a temporary lack of cement; the final delay is expected to be minimal. Construction of the new head office building has been delayed by about one year because the Government is reconsidering its size. Institutional progress is expected to remain slow due to lack of exper- ienced personnel and the time required to train intermediate executive staff. Loan 1241 - Second Damascus Water Supply Project; US$35 million Loan of June 9, 1976; Date of Effectiveness: January 31, 1977; Closing Date: December 31, 1980 This loan became effective on January 31, 1977. The project, which is co-financed by the Arab Fund and USAID, provides for the supply components of Damascus' water system and for training. Work is proceeding on schedule on the contract for the tunnel, underground cutoff and supply reservoir, which are financed by the Bank. A close coordination of the works financed by the various donors under this project and of the works financed under the first project will be required to permit the timely link-up of the various compo- ents of the supply and distribution system and to minimize expected delays in implementation of the project components financed by other donors. Loan 1261 - Telecommunications Project, US$28 million Loan of June 9, 1976; Date of Effectiveness: March 15, 1977; Closing Date: June 30, 1979 This loan became effective on March 15, 1977. The project consists of the most urgent works of the telecommunications investment program for the period 1976-78, including the installation of telephone connections, trunk ANNEX II Page 4 exchanges and teleprinters; and expansion of long distance and international facilities; and a training center. Procurement is well underway on a number of contracts. Loans 1311/1312T - First Livestock Development Project; US$5 million Loan and US$12.5 million Third Window Loan of July 22, 1976; Date of Effectiveness: ; Closing Date: December 31, 1982 This loan has not yet become effective due to delays in the selec- tion and appointment of consultants. The project provides for a strengthening of the organizational framework for feed policies and animal health services as well as credit to sheep farmers and cooperatives. ANNEX III Page 1 SUPPLEMENTARY PROJECT DATA SHEET Section I - Timetable of Key Events (a) Time taken to prepare project: Six months (b) Agency which prepared project: Etablissement Public des Eaux d'Alep (EPEA) (c) Date of first presentation to the Bank: May 1976 (d) Date of departure Appraisal Mission: November 1976 (e) Date of completion of negotiations: May 1977 (f) Planned date of effectiveness: October 1977 Section II - Special Bank Implementation Actions Bank provided terms of reference for studies and technical assis- tance components of proposed project. Other action to ensure satisfactory project implementation (e.g. training of EPEA staff, introduction of new techniques and control methods, provision of consulting services, improve- ments to public construction enterprises) is part of proposed project (paras. 32, 40, 43 and 44). Section III - Special Conditions (a) Government to take adequate measures to prolong the life of the intake at Lake Assad on the basis of consultants studies (para. 44). (b) Government to extend the mandate of the project committee under the Governor of Aleppo to cover the proposed project (para. 39); and to enable EPEA to be adequately staffed (para. 41). (c) EPEA to set and collect rates for the sale of water at whichever is the higher of the following two levels: (i) rates at a level not below LS 0.60/m3 for household consumption and LS 0.75/m3 for non-household consumption; or (ii) rates, which together with revenues from other charges on water supply, are adequate to cover in each year: all operating expenses (excluding depre- ciation), debt service and increased working capital, and in each year during the period 1978-82 not less than 15 percent, and beginning with the year 1983, each year not less than 35 ANNEX III Page 2 percent of the average cost of investment during each consecu- tive three-year period comprising an actual and two forecast years (para 37). EPEA to review, by not later than September 30 of each year, the adequacy of its tariffs for the next year on the basis of forecasts of expenditures for the current and next two years; and to furnish the results of these reviews to the Bank (para. 37). (d) EPEA not to incur any further loans unless its net cash genera- tion, before depreciation and interest, exceeds 1.5 times its debt service in any future year, including debt service on the amount to be borrowed from the proposed Bank loan (para. 38). (e) EPEA to engage consultants to review construction techniques and to study silting, water treatment and risks of flooding of intake pump motors. Commencement of work by these consultants would be a condition of effectiveness. EPEA also to engage consultants to analyze the existing distribution system and review alternatives for its extension (para. 44). (f) EPEA to submit a training program for its professional staff to the Bank for its comments prior to June 30, 1978 (para. 40). IBRD 12722 IU A, j 1k ,, d ,.pdr. MARCH 1977 | z 'mJ !S ALEPPO 4550 //Probable Location of Future Mains to Serve Developing High Level Areas U Probable Location of Future Service Reservoir Trunk Mains A Pumping Stations _____ _____ _____ _____ * Service Reservoirs ToYAI-AN Water Towers Areas Now Fully Developed Areas Being Developed (Population up to 1,500,000) Areas of Proposed Development / ~~~(Population Above 1,500,000) r \/ /HALEPPO WATER SUPPLY PROJECT \ /oQ CiTY OF ALEPPO AND VICINITY iBRD 12690 A CEEEIE MARCH 977. SYRIAN ARAB REPUBLIC ,/E" , ALEPPO WATER SUPPLY PROJECT ,, ' INTAKE HEADWORKS AND AQUEDUCTS ' L RAASM EL AACED_ IERINE~~~~~~~~~~~~~~~~~~~~~~~~~~.E TO DE.R HAFIF B RA.S SER MA /- - / M eAA7ACHIeE _. __ - MATRAURA . Iug__---_____ \ RASM EL HARMEL N lItRRA JEREITT EL MAM / c~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ C ; ° 1 2 3 A 5 j PROJECT EMISTING 'ILOMETERS j 9-p,pg Moins j ~ ~~~~- A9iied-it. 9 ------ ----- Aq..doCu, In TAnnel _ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ;~~~~~~~ - In_rered SiphoRs AHTAED- 3 7, A Pumpin SEtifons , ~ ~~~~~~~~ ~ ~~ ~ ~ ~~~~~~~~~~ Sf _ e TroErnemnI Plonts THARASA j4 ____ - Main fHN _____ looods 01A.1AYA ~ ~ ~ S---_ Row-",' As- ------ … -- TR..d, ////~ Al.pp. D-velenP-t Are, T>U 2 K E Y ___- v < y~~~~~~~~~~~~~"SAEA S Intoh* 7" IY - N StaLraoU Neal~~~~~~~~~~~~~~~~~~~~~~~~~~~~w-B(Od '~ J(: \ r -F _ b ~, \ HABMOU EA 9E A OU . - -- - / *, r , I R A O r bw ~~~~~~~~~~~~~~~~~~~~~ KEE~ERRE ' i- 75 1 1 I H~ *OO.iARAL C u ' E L .q. iAMOUH__--p-___-~ ~~~~~OLRE^