ROADS 2000-DISTRICTS RURAL ROADS REHABILITATION · PDF file · 2013-03-19ROADS 2000-DISTRICTS RURAL ROADS REHABILITATION REPUBLIC OF KENYA ... Trans Mara, Narok and Kajiado Districts)

SCCD : N.G.

AFRICAN DEVELOPMENT FUND KEN/PTTR/2001/01Language: EnglishOriginal: English

APPRAISAL REPORT

ROADS 2000-DISTRICTS RURAL ROADS REHABILITATION

REPUBLIC OF KENYA

COUNTRY DEPARTMENT OCDEEAST REGION MARCH 2001

TABLE OF CONTENTSPage

PROJECT INFORMATION SHEET, CURRENCY AND MEASURES, LIST OFTABLES, LIST OF ANNEXES, LIST OF ABBREVIATIONS, BASIC PROJECTDATA, PROJECT LOGICAL FRAMEWORK, EXECUTIVE SUMMARY (i-viii)

1. ORIGIN AND HISTORY OF THE PROJECT 1

2. THE TRANSPORT SECTOR 1

2.1 Sector Overview 12.2 The Transport System 22.3 Transport Policy, Planning and Co-ordination 4

3. THE ROAD SUB-SECTOR 5

3.1 The Road Network, Vehicle Fleet and Traffic 53.2 The Road Transport Industry 63.3 Road Administration and Training 73.4 Road Planning and Financing 93.5 Road Engineering and Construction 113.6 Road Maintenance 12

4. THE PROJECT 13

4.1 Project Concept and Rationale 134.2 Project Area and Project Beneficiaries 154.3 Strategic Context 174.4 Project Objective 174.5 Project Description 174.6 Traffic Demand and Roads User Prices 194.7 Environmental Impact 204.8 Social Impacts 204.9 Project Costs 224.10 Sources of Finance and Expenditure Schedule 23

5. PROJECT IMPLEMENTATION24

5.1 Executing Agency 245.2 Institutional Arrangements 255.3 Supervision and Implementation Schedule255.4 Procurement Arrangements 265.5 Disbursement Arrangements 285.6 Monitoring and Evaluation 285.7 Financial Reporting and Auditing 295.8 Aid Co-ordination 29

ii

TABLE OF CONTENTSPage

6. PROJECT SUSTANABILITY AND RISKS 30

6.1 Recurrent Costs 306.2 Project Sustainability 316.3 Critical Risks and Mitigation Measures 31

7. PROJECT BENEFITS 32

7.1 Financial Analysis 327.2 Economic Analysis 327.3 Social Impact Analysis 337.4 Sensitivity Analysis 34

8. CONCLUSIONS AND RECOMMENDATIONS 35

8.1 Conclusions 358.2 Recommendations and Conditions for Loan Approval 35

…

This Appraisal Report was prepared by Messrs. A. BABALOLA (Senior TransportEngineer, Ext. 4682), M.O. AJIJO (Principal Transport Economist Ext. 5353), I. SAMBA(Senior Environmentalist, Ext.4962) and N. MAKONNEN (Principal Policy Economist-SocialExpert, Ext. 5210 following their mission to Kenya in March, 2001. Any inquiries relating tothis report may be referred to either the authors or to Mr. G. MBESHERUBUSA, DivisionManager, OCDE.4, Ext. 4131.____________________________________________________________________________

AFRICAN DEVELOPMENT FUND01 B.P. 1387 - ABIDJAN

Tel: 20 20-44-44Fax: (225) 20 20-49-86

Telex: 23717, 22202, 22203

PROJECT INFORMATION SHEET

The information given hereunder is intended to provide some guidance to prospectivesuppliers, contractors and consultants and to all persons interested in the procurement of goodsand services for project approved by the Board of Directors of the Bank Group. More detailedinformation and guidance should be obtained from the Executing Agency of the Borrower.

1. COUNTRY : Kenya

2. PROJECT TITLE : Roads 2000-Districts Rural RoadsRehabilitation Project

3. LOCATION : The Rift Valley Province (West Pokot, Trans-Nzoia, Marakwet, Keiyo,Uasin Gishu,Trans Mara, Narok and Kajiado Districts)

4. BORROWER : The Republic of Kenya.

5. EXECUTING AGENCY : Ministry of Roads & Public Works (MRPW)P.O. Box 30260Nairobi, KenyaTel: (254) 2 72 31 01Fax: (254) 2 72 00 44

6. DESCRIPTION : The project consists of:i) Civil Works: Spot improvement and

partial rehabilitation of 115 importantlinks totalling 2,944.2 km of roadswithin the eight districts networks;

ii) Goods: Nine Supervision/maintenancevehicles, 32 motor-cycles, ninephotocopiers and nine computers forthe Project Implementation Unit atHeadquarters and the 8 districts; and

iii) Consultancy services for: (a) pre-contract and supervision; (b) training of34 Headquarters and Districts staff ofMRPW in contract administration andsupervision; and promotion offormation of 160 small-scalecontractors in labour-based routine andperiodic road maintenance; and (c)Project Audit

7. TOTAL COST : UA 22.28 million

ii

i) Foreign Exchange : UA 11.45 millionii) Local Cost : UA 10.83 million

8. BANK GROUP LOAN

ADF : UA 20.00 million

9. OTHER SOURCE OF FINANCE

GOK : UA 2.28 million

10. DATE OF APPROVAL : June 2001

11. ESTIMATED STARTINGDATE OF PROJECTAND DURATION : June 2002 – July 2006 (50 months)

12. PROCUREMENT OFGOODS AND WORKS : National Competitive Bidding (NCB) for small

labour-based construction works with minimumequipment; and NCB for light supervisionvehicles, motor-cycles and office equipmentfrom member countries of ADB and ADF Stateparticipants in accordance with the Bank's"Rules of Procedure for Procurement of Goodsand Works".

14. CONSULTANCY SERVICESREQUIRED AND STAGEOF SELECTION : Consultancy services will be required for pre-

contract documents, supervision of constructionworks and training of staff in contractadministration and supervision, and promotion offormation of small-scale contractors in labour-based road maintenance. Procurement will be inaccordance with the Bank's "Rules of Procedurefor Use of Consultants". The procurement will beon the basis of two shortlists of firms to cover: (i)Region I- West Pokot, Trans Nzoia, Marakwet,Keiyo, Uasin Gishu districs; and (ii) Region II-Trans Mara, Narok and Kajiado districts.

: Project audit services will be procured on the basisof a shortlist of auditing firms in accordance withthe Bank's "Rules of Procedure for Use ofConsultants".

iii

CURRENCY AND MEASURES

Currency Equivalents(March, 2001 Exchange Rates)

Currency Unit = Kenya shilling (KSh)

1 UA = KSh 101.6741 UA = US$ 1.300641 US$ = KSh 78.172

WEIGHTS AND MEASURES

1 tonne (t) = 2,205 lbs1 kilogramme (kg) = 2.205 lbs1 metre (m) = 3.281 ft1 foot (ft) = 0.305 m1 kilometre (km) = 0.621 mile1 square kilometre (km2) = 0.386 square mile1 hectare (ha) = 0.01 km2 = 2.471 acres

FISCAL YEAR

July 1 - June 30

LIST OF TABLES

Table 3.1: Road Sector Investment and Recurrent ExpenditureTable 3.2:Donors support for Roads 2000 Maintenance ProgrammeTable 4.1 : Summary of Project Cost by ComponentsTable 4.2 : Summary of Project Cost by Category of ExpenditureTable 4.3 : Sources of FinanceTable 4.4 : Expenditure Schedule by ComponentTable 4.5 : Expenditure Schedule by Sources of FinanceTable 5.1 : Project Implementation ScheduleTable 5.2 : Summary of Procurement Arrangements

LIST OF ANNEXES

Annex. Titles No of Pages

1. Map of Project Area 12. Project Organisational Chart 13. Project Implementation Schedule 14. Provisional List of Goods and Services 15. Summary Financial and Economic Analysis 46. Environmental and Social Management Summary Plan 27. Summary of Bank Group Operations as at 31/03/01 18. List of Annexes in Project Implementation Document 1

ivLIST OF ABBREVIATIONS

AADT = Average Annual Daily TrafficADB = African Development BankADCS = Automatic Data Collection SystemADF = African Development FundAFD = Agence Française de Developpement

Air Traffic Management SystemCBR = California Bearing RatioCNS/ATM = Communication Navigation and Surveillance System/CSO = Civil Society OrganizationDANIDA = Danish International Development AgencyDWT = Deadweight TonnageEIRR = Economic Internal Rate of ReturnESAL = Equivalent Standard Axle LoadEU = European UnionFE = Foreign ExchangeFY = Financial YearGBCP = Gravelling, Bridging & Culverting ProgrammeGOK = Government of KenyaHDM = Highway Design and Maintenance ModelHMMS = Highway Maintenance Management SystemICB = International Competitive BiddingIDA = International Development Association (World Bank)ILO = International Labour OrganizationIRI = International Roughness IndexKfW = Kreditanstalt fur Weideraufbaukph = Kilometres Per HourKRB = Kenya Roads BoardKRC = Kenya Railways CorporationKTC = Kenya Transport CompanyKTODA = Kenya Taxi Operators and Drivers AssociationLMS = Loading Management SystemMFP = Ministry of Finance and PlanningMITC = Ministry of Information, Transport & CommunicationsMLA = Municipal Local AuthorityMRP = Minor Roads ProgrammeMRPW = Ministry of Roads and Public WorksMTEF = Medium-Terms Expenditure FrameworkNCB = National Competitive BiddingNPV = Net Present ValuePCR = Project Completion ReportPEMS = Pavement Evaluation Management SystemRARP = Rural Access Road ProgrammeRMLF = Road Maintenance Levy FundSIDA = Swedish International Development AgencyTEU = Twenty-Foot Equivalent UnitTLB = Transport Licensing BoardVOC = Vehicle Operating Costsvpd = Vehicles Per Day

v

vi

KENYAROADS 2000-DISTRICTS RURAL ROADS REHABILITATION PROJECT

PROJECT MATRIXREVISION DATE: MAY 2001DESIGN TEAM: A. BABALOLA/M.O. AJIJO

Narrative Summary (NS) Verifiable Indicators (VI) Means of Verification Assumptions

1. Goal:1.1 To improve the efficiency of the

transport system in order to supporteconomic and social developmentthrough effective market integration.

1.1 Inventory of theclassified road networksatisfactory conditionincrease from 57% in2000 to about 90% byyear 2005.

1.2 Transport servicesinput improved by2005.

1.1 Annual roadconstruction andpavement evalua-

tion statistics fromMRPW

1.2 Input-OutputMatrix ofProductivesectors.

(Goal to supergoal)Reduced transport cost will lead toeconomic growth and improvement ofcritical poverty indicators.

2. Project Objective:2.1. To restore the classified road

network to a maintainable condi-tion in eight districts of the RiftValley province.

2.1 Average vehicle operatingcosts reduced by 25% inthe year 2005 when theroads are openedcompared to base line.

2.2 Reduction in averagetravel time on classifiedroads by 50% December2005 compared tobaseline.

2.3 Roughness reduced from15.0 to about 8.0metres/km during servicelife of the project roads.

2.1 Transport pricesand vehicleoperating costdata.

2.2 Travel time surveyreports.

2.3 InternationalRoughness Index

(IRI) data on roadlinks.

2.4 Annual budget ofMRPW.

(Project objective to Goal)

2.1 Road 2000 Programme is fullyimplemented.

2.2 Fuel levy fund is adequate forroad maintenance.

2.3 Government commitment toaxle.

load limits enforcement onmain roads.

2.4 MRPW is effective in projectimplementation.

3. Outputs3.1 Improved accessibility to agricul-

tural, social and economic centres.in the eight districts of the RiftValley Province.

3.2 Human resources developed incontract administration and super-vision of labour-based roadmaintenance works in the PIU.

3.3 Small-scale contracting capacityexpanded for road maintenance inthe eight districts.

3.1 2,944.2 km of ruralclassified roads partiallyrehabilitated by Dec.2005.

3.2 34 staff of MRPWtrained by Dec. 2002.

3.3 160 labour-based small-scale contractorspromoted by June 2004.

3.1 Quarterly ProgressReports (QPRs)

3.2 Supervision Reports(SRs)

3.3 Project CompletionReport (PCR).

3.4 Audit Reports

(Outputs to Project Objective)3.1 GOK will maintain the road

network in the eight districtsafter the rehabilitation iscompleted.

4. ActivitiesFor Works and Goods:

4.1 Issue and receipt of tendersEvaluation, negotiation and award ofcontract

4.2 Partial Reahabilitation of 115 No.(2,944.2 km) classified gravel roadsin eight districts.

4.3 Procurement of Goods: 9 supervisionvehicles,(Double cabin), 32 motor-cycles, 9 photocopiers and 9computers

For Consultancy Services:

4.4 Approval of TOR for pre-contract,supervision and training, and auditingservices.

4.5 Issue & receipt of RFP4.6 Evaluation and approval4.7 Award of consultancy service4.8 Commencement of services.

Inputs/ResourcesInputs million UA

4.1 Civil works 16.204.2 Consultancy

Services 1.564.3 Goods 0.25

4.3 Contingencies:- Physical 2.52- Price 1.75

Total 22.28

Resources:ADF 20.00GOK 2.28

Total 22.28

4.1 Appraisal estimates.

4.2 QPRs

4.3 SRs

4.4 PCR

4.5 Audit Reports

(Activity to Output)4.1 All procurement actions are on

schedule.4.2 Payments for invoices are not

delayed.4.3 GOK’s budget and timely

release of counterpart localfunds.

4.4 Effective supervision by theBank and consulting firms.

4.5 KRB is operational andeffective.

vii

EXECUTIVE SUMMARY

Project Background

As part of the overall strategy to promote economic growth, poverty eradication and marketintegration, the Government of Kenya (GOK) in consultation with the donor communityprepared in 1998, Roads 2000 Programme, which was aimed at improving the road networkand creating employment opportunities through the use of appropriate mix of labour andequipment for a well-maintained and sustainable road network.

The Programme focuses on: (i) implementation of spot improvement and partial rehabilitationand environmental protection of important but damaged rural roads in each network of 60districts; (ii) training of engineers and other technical staff of the Ministry of Roads andPublic Works (MRPW) in each district in contract administration and supervision, andpromotion at district level formation of small-scale contractors for routine maintenance, spotimprovements and partial rehabilitation works; and strengthening the institutional capacity ineach district. Following a Road Sector Review Meeting held in December 1998 in Nairobi,Kenya, some donors inclusive of ADB fully endorsed the Roads 2000 Strategy and promisedto support its implementation on a district-by-district basis until it covered all the 60 districtsof Kenya.

Purpose of the loan

The ADF loan of UA 20.00 million, amounting to 89.8 % of the total project cost, will be usedto finance 100% of foreign exchange (UA 11.45 million) and 78.9% of the local cost (UA 8.55million).

Sector Goal and Project Objective(s)

The sector goal of the project is to improve the efficiency of the transport system in order tosupport economic and social development through effective market integration.

The objective of the project is to restore the classified road network to a maintainablecondition in eight districts of the Rift Valley province.

Brief Description of the Project’s Outputs

In order to achieve these objectives, the project will focus its attention on:

i) Spot improvement and partial rehabilitation of important 115 links totalling2,944.2 km of roads within the eight districts networks to improve accessibilityto agricultural, social and economic centres;

ii) Human resources development of 34 Headquarters and Districts staff ofMRPW in contract administration and supervision; and

iii) promotion at district level formation of 160 small-scale contractors in labour-based routine and periodic road maintenance.

viii

Project Cost

The total project cost is estimated at UA 22.28 million out of which UA 11.45 million (51.4%)will be in foreign currency and UA 10.83 million (48.6%) will be in local currency.

Sources of Finance

The Project will be financed by the African Development Fund (ADF) and the Government ofKenya (GOK). The ADF resources will be utilised to finance civil works, consultancy servicesand goods, while the counterpart fund will cover a part of the civil works. ADF contributionrepresenting 89.8% of total costs, will be utilised to cover 100% of the foreign costs and 78.9%of local costs of the project; and the GOK’s contribution of UA 2.28 million, representing 10.2%of the total project costs, will be utilised to cover 21.1% of local the costs.

Project Implementation

Duration of implementation of the project: June 2002–July 2006 (50 months)

Implementing Agency: The Ministry of Roads and Public Works (MRPW) will be theimplementation agency

Conclusions and Recommendations

The implementation of the project will restore the classified road network to a maintainablecondition in each of the eight districts, enhance accessibility to agricultural, social and economiccentres and create employment opportunities for its sustainability. The project is consistent withthe Bank Group’s country assistance strategy, as outlined in 1999-2001 CSP, which supports theagricultural, transport, and social sectors.

It is recommended that a loan not exceeding UA 20.00 million from ADF resources be grantedto the Government of Kenya for the purpose of implementing the project as described in thisreport, subject to conditions specified in the loan agreement.

1. ORIGIN AND HISTORY OF THE PROJECT

1.1 The Government of Kenya (GOK), launched in March 1997 its Strategic Plan forthe Roads Sector. The Strategic Plan, the preparation of which donors and other stakeholderswere widely consulted, recognized the fact that the road sub-sector had suffered many years ofinadequate routine and periodic maintenance with consequent high transport costs service forthe people. The Plan encouraged increased participation of the private sector in all roadmaintenance works and institutional reforms of the Ministry of Roads and Public Works(MRPW). It is in this context that the Government launched its Roads 2000 MaintenanceStrategy and Programme to improve the road network and create employment opportunitiesthrough the use of appropriate mix of labour and equipment for a well-maintained andsustainable road network.

1.2 The strategy recognizes that on highly trafficked roads, more emphasis should beplaced on reduction of transport costs while on lightly trafficked roads the emphasis wouldshift towards improving accessibility. The aim of the Programme is to: (i) implement spotimprovement and partial rehabilitation and environmental protection of important butdamaged rural roads in each network of 60 districts; (ii) train engineers and other technicalstaff of Roads Department of the Ministry of Roads and Public Works (MRPW) in eachdistrict in small-scale contracts administration and supervision, promotion at the district levelformation of small-scale contractors for routine road maintenance, spot improvements andpartial rehabilitation works; and (iii) strengthen institutional capacity in each district.Following a Road Sector Review Meeting held in December 1998 in Nairobi, Kenya, donorsfully endorsed the Roads 2000 Strategy and promised to support its implementation on adistrict-by-district basis until it covered all the 60 districts of Kenya. Several donors (EU,DANIDA, KfW, SIDA, World Bank, AfD and ADB) have been participating or indicatedinterest in participating in the programme. (See Section 3.6.3 for the Roads 2000 MaintenanceProgramme and Status of Donor Support).

1.3 The Government approached the African Development Bank Group in December1997 to intervene in the Roads 2000 Maintenance Programme in eight districts of the RiftValley Province. As a result of this request, the Bank Group fielded a preparation mission inApril 1999 to the Rift Valley Province for which some documents were available. TheGovernment, on the basis of the preparation mission result, was requested to prepare theEconomic and Social Analysis, Environmental Impact Assessment, detailed quantities andcost estimate studies to enable the project to be appraised. The studies were made available tothe Bank in March 2001. An appraisal mission was fielded to Kenya in March 2001, and thisreport is based on information collected and discussions with government officials,representatives of multi-lateral and bi-lateral donor institutions and other stakeholders inKenya. The project is in the line with the Bank Group’s country assistance strategy as outlinedin 1999/2001 CSP that supports agricultural, transport and social sectors.

2. THE TRANSPORT SECTOR

2.1 Sector Overview

2.1.1 Kenya operates a transport system consisting of five modes namely, road, rail, air,maritime and pipeline transport. The transport sector in Kenya has traditionally played the dualrole of a catalyst in supporting national economic development and a vital transit network for theneighbouring countries in the eastern Africa and the Great Lakes region. Transit traffic generatesforeign exchange earnings of about US$ 85.0 - 95.0 million annually for Kenya. The efficiencywith which the transport system operates is critical at both national and regional levels. For this

2reason, the condition of the infrastructure, particularly the road and rail modes gives cause forconcern because of physical deterioration of facilities caused by insufficient maintenance.

2.1.2 The Government has put in place measures to improve the state of the economy withmajor progress achieved in restoring macro-economic stability and the GDP at factor cost hasbeen growing at an average rate of about 4.9% since 1995. There has also been substantialliberalization of the economy across all sectors. Higher growth rate and diversification of theproductive base and exports could only be achieved, among others, by removing the constraintsposed by transport infrastructure. Government is therefore committed to the institutional reformprogrammes in the sector in addition to increased investment to remove the constraint posed bypoor maintenance of road and rail modes. A brief review of the individual modes of transport ishighlighted below.

2.2 The Transport System

Roads

2.2.1 Kenya has an extensive road network of approximately 64,000 km of classifiedroads and 86,600 km of unclassified road, with a density of 0.26 km per square km of landsurface. The concentration of the network is however not uniform across the country. Theheaviest concentration is along the transport corridor extending from the port of Mombasa in theeast, through Nairobi and continuing to the Western region and to the Kenya/Uganda border,while most of the east and north of the country have little road development. The road sub-sector is discussed in detail in Chapter 3.

Rail

2.2.2 The rail network, which is operated by the Kenya Railway Corporation (KRC),consists of about 1,920km of the mainline, 345 km of principal lines and 490 km of branch line.The mainline connects the Mombasa Port to Nairobi and continues to the Kenya/Uganda borderat Malaba; a network that is critical for long distance freight along Kenya’s main transportcorridor. The current operations of the KRC comprise freight services, passenger services andmarine passenger and freight services. The corporation transports about 2 million tonnes ofcargo and 1.9 million passengers per annum between 1995 and 1999 and plays a critical roleespecially in the transport of export and import goods, which accounts for about 35% of thetraffic handled at the port of Mombasa. Rail revenue has also increased from KSh 3,716 millionin 1995 to KSh. 4,976 million in 1999. Rail remains an important mode for long haul freighttransport along Kenya’s main transport corridor. Railway operations are however hampered bythe poor condition of track, ageing rolling stock and locomotives. This has constrained itscapacity and has continued to impede the export of low-value bulk commodities such as sodaash, which are highly sensitive to transport cost.

2.2.3 Government is committed to putting in place policies for a level playground on thelong-haul transit corridors in order to strengthen the competitive position of the railways vis-avis the roads. Government has agreed to compensation for public service obligations imposedon the rail in addition to fiscal and legal measures to enhance its comparative position andadvantage. As from the financial year 2000/2001, Government has also programmed newinvestment to improve telecommunication system, increase wagon availability and relay 60 kmof the Nakuru – Kisumu branch line. All these measures would increase capacity of the rail tohaul more traffic and capture the lucrative traffic destined for North Western Tanzania, Ugandaand Rwanda.

Maritime Transport

3

2.2.4 The Kenya Ports Authority (KPA) is responsible for both ports and marine affairs.The KPA operates and manages the principal seaport of Mombasa and the minor ports of Kilifi,Lamu, Malindi and Shimoni. Mombasa port has an extensive infrastructure including 16 deep-water berths; 3 oil berths; 3 container berths; 2 cement berths; and 2 lighterage berths. The porthinterland extends to the Great Lakes Region and the Horn of Africa, handling transit traffic toUganda, Rwanda, Burundi, and to a lesser extent parts of the eastern Democratic Republic ofCongo and the southern part of Sudan.

2.2.5 The port throughput increased from 7.973 million tonnes in 1995 to 8.55 milliontonnes in 1999 with an average throughput of 8.4 million tonnes per annum during the period.About 22.0% of the throughput were transit traffic, while trans-shipped traffic was only 1.0%.The low rate of economic growth has impacted on the growth of port throughput coupled withoperational problems of poor equipment availability and reliability, inadequate maintenance andlack of proper management system. There had been significant fall in the volume of importedpetroleum products, while containerized traffic increased from a level of 144,137 TEU in 1993to 248,451 TEU in 1999. The growth of exports had been slow and has dropped from all timehigh level of 2.77 million tonnes in 1993 to only 1.843 million tonnes in 1999.

2.2.6 The KPA’s vision is to retain the port of Mombasa as a major port of call and toprogressively become the hub port on the eastern board of the Western Indian Ocean. While themarket outlook continues to be promising, the port faces stiff competition from other ports in theregion. Therefore, KPA has devised a corporate strategy to adjust to the needs of the changingmarket environment, which include among others, re-engineering the way businesses is done,additional capital investments and new technology, changing market rules to make servicesmore attractive to customers, privatisation of some port activities through leasing, concessionsand contracting out some of the maintenance programmes for port equipment. Government inconsultation with the stakeholders to this effect is at the point of formulating a Maritime policyfor Kenya and also to expedite the establishment of a Shippers’ Council.

Air Transport

2.2.7 Air transport plays an important role in the Kenyan economy particularly for thetourism and horticultural sectors. The Government administers air transport and operationsthrough the Ministry of Information, Transport and Communications (MITC). The Directorateof Civil Aviation is responsible for matters relating to civil aviation and air safety, while theresponsibility for the physical administration of airports and public airstrips lies with KenyaAirports Authority, a Government parastatal, which falls directly under the Office of thePresident.

2.2.8 Kenya has two international airports located at Nairobi and Mombasa and also fourother main commercial airports located at Nairobi (Wilson), Kisumu, Malindi and Eldoret. Inaddition, there are 149 smaller public and private airstrips that facilitate travel and accessibilityto all parts of the country. Kenya Airways has been privatised and has a merger arrangementwith a strategic partner, which has resulted in improved operational and financial performance.Kenya Airways operate domestic schedule flights from Nairobi to Mombasa, Eldoret, Malindi,and Kisumu and a small independent company has recently established a limited scheduleservice and some chartered flights. Government is committed to upgrading telecommunicationfacilities and navigational aids at the airports, particularly the implementation of the CNS/ATMby the year 2010. Total commercial traffic at Nairobi and Mombasa airports indicate thatpassenger movement had increased from 2.675 million in 1995 to 2.987 million in 1999 whilefreight tonnage had decreased from 73,000 tonnes to 65,100 tonnes over the same period thoughhas started to pick up from the level of 62,900 tonnes handled in 1998.

4

Pipeline

2.2.9 The state-owned Kenya Pipeline Company commissioned in 1977, the 425-kmpipeline from Mombasa to Nairobi to transport white oil products. The pipeline has since beenextended to Kisumu and Eldoret. This has been contributing to the reduction of overloading onthe road network from vehicles carrying white oils. Throughput of white petroleum products hadincreased from 2.40 million cubic metres in 1995 to 2.799 cubic metres in 1999, which is lessthan the total rated capacity. This shortfall between capacity and throughput is due to lack ofdemand rather than operating difficulties as the whole pipeline structure is well maintained.There had been active discussion on extending the pipeline to Uganda.

2.3 Transport Policy, Planning and Co-ordination

2.3.1 The transport policy as indicated in the recent Letter of Sector Policy is: (i) toaccord high priority to the maintenance of existing facilities and services; (ii) to restrict thedevelopment of major new infrastructure to cases which would eliminate serious constraintsin transport services, and those that would enhance access to social and economic facilities inthe rural areas; (iii) to develop missing road links with Kenya's PTA neighbours; (iv) toimprove the urban road network to provide greater road capacity to meet increased trafficdemand; (v) to provide job opportunities, and conserve foreign exchange through using labourintensive methods in the construction and maintenance of roads, where appropriate; and (vi)to provide a reasonable level of transport service to all users, particularly in rural and remoteareas. The current Interim Poverty Reduction Strategy Paper which formed the basis of theMedium-Term Expenditure Framework for the period 2001/02 to 2003/04 under elaborationunderscored the role of transport in poverty alleviation particularly in improvement ofaccessibility and income in the rural areas. The basic principle under which Governmentadministers transport operations remain that of permitting competitive forces to guideshippers' choice of the mode of transport to be used. However, the Government does imposeregulations in areas considered to be in the national interest such as railway tariffs and largebus passenger tariffs.

2.3.2 All planning in Kenya follows the National Policy Objectives, which are set out inthe Sessional Paper No.1 of 1986 which, is the central planning policy statement, and putsemphasis on development at the district levels. The national priorities in the transport sectoris designed to fulfil the demands placed on the transport sector by first, overall growth of thenational economy, and the economies of those countries for which Kenya is a transit corridor,and secondly, by growth of population in Kenya with the resultant demand that this imposeson rural and urban passenger and freight services. Following a reorganisation ofresponsibilities within Government in 1998, the Ministry of Roads and Public Works(MRPW) and the Ministry of Information, Transport and Communication (MITC) have jointresponsibility for the development of transport policy, and for co-ordinating, planning andadministering transport operations for assigned modes except pipeline transport which is theresponsibility of the Ministry of Energy. Responsibility for all aspect of road infrastructureremains with the MRPW while that of air transport, maritime transport and railways are underthe MITC.

52.3.3 At the sectoral level for transport planning and co-ordination in air and maritimetransport, the MITC receives planning inputs from the various transport parastatals for whichit is responsible (Kenya Airways, Kenya Ports and Kenya Railways Authority). Roadsplanning is the responsibility of MRPW for the classified network, Kenya Wildlife Servicesfor roads in the parks, Municipal/local authorities through the Ministry of Local Governmentfor unclassified network and urban roads, and the Forest Department of the Ministry ofEnvironment and Natural resources for roads specific to serving the forestry sector. Thedevelopment of specific projects is measured against the background of the sectoral policy andis also measured against resources available as represented by the budgetary ceilingsdetermined by the macro-economic framework and issued by the Treasury of the Ministry ofFinance and Planning.

2.3.4 There is still the problem of lack of a unified or network-based framework forplanning and resource allocation in the road mode. This was due to multiplicity of agenciesinvolved in identification, development and maintenance needs. This issue has been addressedunder the on-going institutional reform of the road sub-sector with the enactment of the KenyaRoad Boards Act of 1999 which gives over-all sub-sector policy co-ordination, mobilisationand allocation of resources among the road agencies to the Kenya Roads Board. This willimprove overall sector co-ordination currently done at macro level through the issue of policyguidelines and budgetary ceilings by the Treasury of the Ministry of Finance and Planning.

3. THE ROAD SUB-SECTOR

3.1 Road Network, Vehicle Fleet and Traffic

Road Network

3.1.1 Kenya's road network is estimated at 150,600 km, consisting of a highlydiversified network ranging from dry-weather earth road to bitumen highways. The Ministryof Roads and Public Works (MRPW) is responsible for the classified network estimated atabout 64,000 kilometres, consisting of 8,937 km of paved roads and 55,063 km of unpavedroads; while the municipalities and local authorities through the Ministry of LocalGovernment, the Kenya Wildlife Service and the Forestry Department have a sharedresponsibility for the unclassified road system. The classified road network consists of ClassA - International Trunk Roads; Class B - National Trunk Roads; Class C - Primary Roads;Class D - Secondary roads; and Class E - Minor Roads.

3.1.2 The last condition survey of the classified network in 1995 indicated that 34% ofthe paved roads, 57% of earth roads and 29% of gravel roads, which translate to 43% of theclassified network, were in poor condition. The rains associated with the El-Nino weatherphenomenon in 1997/98 had further aggravated the condition of the network. There is noreliable information on the condition of the unclassified road system but their situation iscertainly worse. These have serious implications on transport service levels and vehicleoperating costs. The Government of Kenya (GOK) is however addressing this problemparticularly under the Roads 2000 Maintenance Programme, and the on-going El-NinoEmergency Project co-financed by IDA and the ADF.

6Vehicle Fleet and Traffic

3.1.3 Current data on the vehicle fleet is not available. However from available data onvehicle with current licences, the fleet increased from 296,253 in 1990 to 450,559 in 1999,with an annual growth rate of about 4.8%. The rate of motorization in 1999 of about 18vehicles per 1000 person which is low compared to 129 vehicles per 1000 person in SouthAfrica, 44.6 vehicle per 1000 person in Tunisia, 27.2 vehicles per 1000 in Zimbabwe, and22.4 vehicles/1000 person in Ivory Coast. The composition of the fleet indicates that carsaccounted for about 48%; light goods vehicle - 28.4%; heavy goods vehicle - 9.1%; buses -8.3% and others (road construction vehicles, farm tractors and three wheelers) account for6.2%. Road traffic surveys and counts are conducted on-routine basis on all classes of roadsby the Traffic Engineering Unit of the MRPW. The surveys show that the highest levels oftraffic are recorded in the triangle Nairobi – Thika – Nakuru which is the zone with thehighest level of population concentration and manufacturing activities; around Mombasa areagiven the port city, along the Northern Transport Corridor in general; and in the denselypopulated areas of Western Kenya. The paved road network, though slightly accounting forover 10% of the length of the total network carries more than 60% of the total vehicle-kilometres and nearly 90% of heavy truck-kilometres.

3.2 The Road Transport Industry

3.2.1 The Ministry of Information, Transport and Communications (MITC) isresponsible for administering the laws controlling the road transport industry. There are twoActs, the Road Traffic Act and the Road Licensing Act that govern the conduct of theindustry. Trucks account for almost 100% of short-distance collection/delivery transportservice; and in recent years road transport has taken over from the rail as the primary mode forlong-haul freight transport, while public passenger transport is dominated by buses andmatatus.

3.2.2 Matatus (mini-buses) have played a significant role in passenger transport sincetheir exemption from the Transport Licensing Act requirement vide Gazette Notice No.89 ofJune 1973. However, as the Matatu industry grew, illegal syndicates took advantage ofabsence of controls of the Transport Licensing Board (TLB) over routes and form illegalcartels on the Matatu routes and other syndicates of routes positioning themselves ascontrollers of the bus/Matatu terminals and stages collecting illegal fees from operators. Thishas discouraged long-term, large-scale domestic and foreign investors in the industry.Government has assumed its regulatory role by the revocation of the exemption vide LegalNotice No. 18 of 27 January, 1999 to ensure order in the operations of road transport andencourage new inflow of investors.

3.2.3 The freight industry is split between vehicles licensed to operate for hire whichhold B license, and those carrying private goods which hold C licenses. Currently there areabout 7,752 B vehicles (freight transport vehicles) and 9,000 C registered vehicles. Bothlicenses may be restricted as to area of operation or route to be followed, but the TLB and thepolice do not strictly enforce this. For transport operations within Kenya, truck operators arefree to practice their services at will, and to charge according to market conditions.International transit trucking services have in the past been dominated by Kenya operators,who have been required to charge GOK-imposed rates of up to KSh 4000/ton on transittraffic. Operators from all the landlocked countries for which Kenya provides a transitcorridor from Mombasa port also operate, charging according to their own national legalrequirements. Competition is strong both within the Kenya trucking industry and the

7railway and this competition has been heightened by the change to rail movement to Mombasafor Uganda coffee including the ferry journey across Lake Victoria from Jinja to Kisumu.

3.2.4 Two policy concerns with respect to the road transport industry are the issue of: (i) axleload control and monitoring to protect the investment in the road network currently estimatedat about KSh. 250.0 billion; and (ii) road safety given the high level of road accident estimatedfor the period 1993 to 1998 of an average of 37 accidents per day with fatality rate of over21%. Currently, the total loss in human and property resources through road accidents isestimated at KSh.4.0 billion annually. The issue of overloading by heavy goods vehicles isbeing addressed through the upgrading and establishment of additional weigh-bridge facilities,the checking of sealed containers at port of entry and fuel tankers at the point of loading,banning of vehicles with illegal axle configuration, enforcement of penalties provided in theTraffic Amendment Act 1999, which enabled overloaded vehicles to be prohibited from usingpublic roads until excess cargoes had been offloaded and involvement of the private sector inmanagement of weigh bridges. With respect to enhancement of road safety, Government isseeking to introduce a Traffic Amendment Bill to establish a Road Safety Authority in theplace of the Road Safety Council, which had been redundant since 1983. The proposedAuthority will give full surveillance on road safety matters and formulate road accidentcounter measures; stemming the forgery of log books, licences, vehicle ownership documents,plates and ensuring effective motor vehicle inspection and Data Collection and Storage, drivertraining and testing and road safety education.

3.3 Road Administration and Training

Road Administration

3.3.1 In 1995, Government commissioned a Road Sector Institutional Study with theassistance of the European Union to propose an institutional framework within which themanagement of the entire road network of Kenya will be most effectively undertaken. On thebasis of the recommendation of the Study, Government has in 1999 started theimplementation of major institutional reforms in the sector with the creation of the KenyaRoads Board (KRB) under the Kenya Roads Board Act 1999 that was signed into law inJanuary 2000. While the Ministry of Roads and Public Work will now be mainly concernedwith its regulatory and supervisory role, the other key actors in the sub-sector under the Actare i) the newly created Kenya Roads Board with the responsibility to co-ordinate theimplementation of all policies relating to the development, rehabilitation and maintenance ofthe road network and the administration and allocation of the financial resources derived fromthe fuel levy and any other fund that may accrue to it among all road agencies, ii) the RoadsDepartment of MRPW with responsibility for management of the classes A,B,& C covering atotal network of 14,221.7 km, iii) the District Roads Committees (DRCs) with responsibilityfor classes D, E and all Special purpose roads with a total length of 49,069 km, iv) Local andUrban Authorities through the Ministry of Local Government with responsibility for 134,000km of unclassified roads out of which, 10,000 are in urban areas, v) the Kenya WildlifeServices with responsibility for roads going through the national parks coveringapproximately 8,908 km of roads and tracks and vi) the Forestry Department of the Ministryof Environment and Natural Resource which maintains approximately 5,300 km ofunclassified roads within the industrial and natural forests in about 30 districts.

3.3.2 The Roads Department of the MRPW, until the enactment of the Kenya RoadsBoard Act 1999, has been responsible for the classified network of approximately 64,000kilometres which under the current dispensation is to be shared with the District RoadsCommittees. The institutional reforms are at a transitional stage. The members of the KenyaRoads Board have been constituted but the Chief Executive of the Board with responsibility

8for administering the Road Maintenance Fuel Levy Fund and the principal officers (3 GeneralManagers – Planning, Technical, Finance & Administration) and a Legal Secretary of theKRB have not been appointed. Besides, the membership of the DRCs has been the subject ofarbitration and is yet to be concluded while its executive organ has not been properly defined.These issues need to be settled before the DRC takes over the classes D, E and all specialpurpose roads that had hitherto been the responsibility of the Roads Department of MRPW.

3.3.3 As a result of this transitional stage, there is still need to further defineresponsibilities and roles among the Roads Department of the MRPW and the DRCs in thedelivery of Roads 2000 Strategy and Programme with respect to classes D,E and SpecialPurpose roads. Under the transitional arrangement, Government opined that as in the existinginstitution the Roads Department of the MRPW would continue to handle all classified roadsuntil each agency created under the Act is able to take over. In this context, some conditionswith respect to operational effectiveness of the KRB and the action plan for theimplementation of the outstanding reforms at level of the DRCs have been attached to theloan. The organisational structure of the Roads Department of the MRPW is shown in Annex2. The Department is structured along five functional areas (Planning, design, construction,and maintenance of paved and unpaved roads) with a Chief Engineer (Roads) as Head andreports through the Engineer-In-Chief of the MRPW to the Permanent Secretary.

3.3.4 In 1994/95, there were 12,057 employees consisting of 174 engineers, 1059 roadsupervisors, 1,867 technicians and artisans, 1,033 drivers and plant operators and 7,924support and other general staff in the Roads Department - MRPW. Through the voluntaryearly retirement programme and freezing of any replacements after retirement or death, thenumber declined to 7,737 in 1997/98. The on-going institutional reform will address furtherthe issue of staff rationalisation, remuneration and motivating of remaining staff, which iscrucial for enhancement of productivity and efficiency. Overall, the capacity exists in thecountry for effective road administration.

Training

3.3.5 The MRPW has a sound policy for training its staff and has access to goodfacilities. The under-graduate academic training of engineers is done at the University ofNairobi, which has adequate facilities. The vocational training of sub-professional staff is theresponsibility of the MRPW Department of Staff Training, which runs a long and well-established programme at Kisii Training Centre.

3.3.6 Within the Roads Department the graduate engineers are trained on a three-yearrotational basis to expose them to all operations of the Department. Those who complete thistraining become eligible for post-graduate courses relevant to the needs of the Department.Ten to fifteen engineers receive this training each year. Bilateral donors normally sponsor thepost-graduate courses.

3.3.7 The roads sub-professional personnel are trained either by or through theDepartment of Staff Training, which has a school capable of meeting the requirement of theRoads Department. In addition to these training facilities, the MRPW has established forsome 15 years a well-equipped Kisii Training Centre for labour-intensive techniques. Thecentre is effective but has limited capacity for rapid expansion of these techniques to allactivities of the MRPW that can be carried out using the labour intensive method. Donorsinvolved in the Roads 2000 programme have all supported this component to ensureavailability of institutional capacity at each district level for planning, programming andcontract administration for labour-and equipment-based maintenance contracts forsustainability of the road network.

9

3.4 Road Planning and Financing

Road Planning

3.4.1 The development of road plans for the classified network is the responsibility ofthe Planning Branch of the Roads Department. The Branch is staffed by engineers,economists and support personnel and had been strengthened through the institutional supportcomponent of the ADF/TAF grant for the Rumuruti-Maralal road study. Usually policyguidelines are issued from the Ministry of Finance and Planning, which determines thebudgetary ceilings consistent with the macro-economic framework and the Poverty ReductionStrategy Paper. Under the current PRSP/MTEF under elaboration for the period 2001/02 to2003/04, the Government of Kenya has programmed for the classified road network aninvestment of KSh.117.703 billion. About 62% of the amount is for routine and periodicmaintenance of the classified network while 37% is devoted to reconstruction and upgradingof part of the network in un-maintainable condition where substantial donor input is alsorequired. Donors’ intervention is also anticipated in clearing the backlog of periodicmaintenance programmed over the period. The details of the Three Year Rolling Budget(2001/02 – 2003/04) is as in the table hereunder:

Three Year Rolling Budget–Classified Road Network-(2001/02–2003/04)(million KSh)

ACTIVITY 2001/02 2002/03 2003/04 Total

Road and Bridge Maintenance 21,150 23,057 28,653 72,860Road Planning and Design 366 304 304 974Road Construction and Rehabilitation 15,307 14,754 13,519 43,580Works Verification 40 40 40 120O & M 47 57 65 169Total 36,910 38,212 42,581 117,703

3.4.2 In the allocation of resources over the three year rolling plan/MTEF period,priority is given to maintenance of existing road infrastructure while major reconstruction andrehabilitation has to be justified on economic grounds. For the maintenance activities for anyroad link to qualify, this has been based on a number of parameters with correspondingmaximum weight as follows: i) traffic level – ADT > 2000 paved road and ADT > 300 forgravel road has 30 points, ii) contribution to economic growth if the road carries tourist trafficor any areas with potential tourist attraction, serves an area of high agriculturalproduction/potential or is a conduit through which agricultural product gets to the market orsupport commercial/industrial activity has a maximum score of 6 point for each of the fivesub-criteria, iii) contribution to employment creation and therefore poverty alleviation has amaximum of 30 points for labour based methods, 15 points for a labour-capital mix and 5points for capital based methods only and iv, social cultural and other cross cutting issueswhich has 2 points for national and international concerns, and 8 points if the road traversesan area where poverty is prevalence depending on the poverty indices given the povertyprofile of Kenya. The medium-term plan has been found to be consistent with the strategicfocus of the PRSP and in line with the Bank Group’s country assistance strategy for Kenya,which focuses on poverty reduction and employment generation.

Road Financing

3.4.3 The road financing in Kenya is derived from the development budget for newconstructions and rehabilitation while the funding of maintenance expenditure is mainly from

10the Fuel Levy Funds supplemented from the Recurrent budget. Road related expenditure hasbeen maintained at about 25% to 30% of the expenditure in the Economic Service Category; 3%to 4% of the total budget expenditure and on the average at about 30% of GDP. For therecurrent expenditure component of road expenditure, about 71% is used for routinemaintenance of classes A, B, and C trunk roads while about 29.0% is used for the maintenanceof tertiary, rural and special purpose roads. In the case of road development expenditure over theperiod, 86% of the total expenditure accounts for the construction of 34 new roads and for theNorthern Corridor Rehabilitation Project. For the development budget, all funds depend onloans and grants except for the small amount of counterpart funds to cover local expendituresmainly taxes, compensation etc. For the recurrent budget about 95% is sourced from Road UsersLevy made up of fuel levy fund and transit toll while supplement from ordinary recurrent budgetof the Government account for the remaining 5.0%.

Table 3.1: Road Sector Development and Recurrent Expenditure(1995/96 - 1999/00)

(KSh. Million)Year Development Recurrent Total1995/96 3880 3,820 7,7001996/97 2980 4960 7,9401997/98 2,700 4,820 7,5401998/99 3,540 5,220 8,7401999/2000 6,000 7,372 13,372

Source: Roads Department, Ministry of Roads and Public Works

3.4.4 Current estimate put the amount required annually for maintenance of the 57% ofthe classified road network in good condition at about KSh. 6.16 billion per year and for thewhole-classified network if in maintainable position at about KSh. 9.0 billion per year. TheGovernment, as far back as 1993, decided to redress the imbalance by extending the fundingbase of road maintenance financing in order to arrest the continuing deterioration of the roadnetwork. In June 1994, Government started imposing fuel levy on petroleum products in thecountry for road maintenance. In September 1994 the Government introduced the CommonMarket for Eastern and Southern Africa (COMESA) harmonised road transit charges for allheavy goods vehicles with more than 3 axles and all articulated vehicles. From the aboveprojections, the Government would be in a position to meet the funds required to maintain the57.0% of the road network in a maintainable condition. The establishment of Kenya RoadsBoard and provision of adequate funding and liquidity to the Road Agencies have beenaccepted by Government as central to the attainment of an efficient road network.

3.4.5 The backlog of rehabilitation and reconstruction of the failed sections of thenetwork is estimated at KSh. 45.0 billion and would require at least the next five years toclear. It is therefore quite certain that the Kenyan Government will need donors’ support forthe maintenance of the classified road network and also for the rehabilitation andreconstruction of the failed links in the immediate future. Donors’ commitment currently is tointervene in the lower classes of the network in terms of spot improvement and partialrehabilitation of failed road sections under the Road 2000 Maintenance Programme. This willincrease the percentage of the network in maintainable condition to about 90.0%. Majorupgrading and rehabilitation of higher classes of the road network in categories A, B, & C willrequire preparation for donors’ intervention and the process is underway with a RoadInventory Study for the main trunk network financed by the World Bank.

3.5 Road Engineering and Construction

11Road Engineering

3.5.1 The Design Branch of the Roads Department is responsible for survey, design andtender documentation for road projects. It is also responsible for standards and designmanuals and matters relating to road reserves and control of access. Basic engineering designsare standardised following long-standing research and field testing, and they continue to beup-dated according to latest information. The Branch has capacity to undertake about 50% ofdesign work and the remainder is done through consultants. Domestically financed designstudies are normally executed by the Branch or by local consultants who are capable ofhandling most road engineering projects. The direction of policy is to reduce in-house designto 30% while consultants would handle 70%. Foreign consultants are hired in cases where thisis a requirement for tendering from the source of external financing.

3.5.2 The soils and materials investigation and testing as well as the quality control of aselected construction and periodic maintenance works are undertaken by the MaterialsDepartment of the Ministry of Roads and Public Works. It is generally well-staffed andoperates a large central laboratory in Nairobi in addition to seven provincial laboratories.Although the performance of the Materials Department is satisfactory, it has a limitedcapacity. Consequently, the bulk of the major design and site supervision services are let outto consultants.

Road Construction

3.5.3 The Roads Department executes its responsibility for road construction andimprovement through two Branches, namely, the Construction Branch and the Maintenance(Unpaved Roads) Branch. The Construction Branch is responsible for the execution ofcontract and equipment-based direct labour construction and rehabilitation works involvingbitumen roads. In addition to the routine and periodic maintenance of the unpaved roads, themaintenance branch is responsible for institutionalisation of labour-intensive technologywithin the Roads Department.

3.5.4 At present all road construction works are undertaken by the private sectorcontractors and also handle 97% of the periodic maintenance of the paved roads and 53% ofthe unpaved roads. The equipment intensive direct-labour operations are very limited in scope,currently only 4 construction units are operational and do not play an import role in theexecution of the major road works but only to respond to emergencies and are being scaleddown because of lack of equipment, adequate funding, inefficiency and the cumbersomegovernment procurement regulations. However, the direct labour operations under the SpecialProjects Branch are, on the whole, successful because of their support by the donorcommunity under which three programmes, namely the Rural Access Roads Programme(RARP); the Minor Roads Programme (MRP) which was a Government initiative forimprovement and maintenance of more than 5000 km of the classified minor roads and insome exceptional cases, that of the secondary roads having low volume traffic (less than 50vehicles per day), and Gravelling, Bridging and Culverting Programme

12(GBCP) were implemented. These two programmes were implemented using the labour-intensive technology while the conventional equipment-intensive method is used for theimplementation of the GBCP.

3.5.5 The labour-intensive method was first introduced in 1974 for the improvement ofrural access (farm/village access) roads under RARP and up to now 8137 km of such roadshave been constructed. The operations of RARP were scaled down and at present, continuepredominantly on labour intensive road maintenance. Roads 2000 Maintenance Strategy is torely on appropriate mix of labour and equipment as a delivery mechanism. While the roadagency will be involved primarily in monitoring works, private labour based contractors willbe involved in the execution of the works to support the employment creation and povertyalleviation objective of Government under the MTEF.

3.6 Road Maintenance

3.6.1 The organisation of maintenance of the classified road network is done on districtsbasis. There are 51 maintenance districts for the whole-classified network. A district roadengineer heads each District Works Office with responsibility for programming andimplementation of maintenance works on the network. Modern management techniques interms of the Highway Maintenance Management System (HMMS), Automatic DataCollection System (ADCS) Loading Management Systems (LMS) and Pavement EvaluationManagement System (PEMS) are currently put in place to enhance a network approach to roadmaintenance that recognizes traffic volumes across the whole network and the implicationsfor Vehicle Operating Costs (VOCs).

3.6.2 Each district has a force account unit for implementation of maintenance works.A group of districts are co-ordinated by the Provincial Works Office headed by the ProvincialWorks Officer that report directly to the Roads Department - Paved and Unpaved RoadsBranches. 97% and 53% of periodic maintenance on paved and unpaved roads respectively iscurrently contracted out to private sector contractors. Presently, Government policy is toincrease private sector participation in periodic maintenance to the level of 95% leaving alittle in-house capacity for emergency works and for contract control purposes. There isenough domestic capacity to undertake periodic maintenance contracts. However for routinemaintenance contracting, there is the need to develop capacity through training of small-scalecontractors and supervisory staff. By the year 2000/2001 about 50% of routine maintenancewill be executed by private sector contractors. Indeed, with the launching of Roads 2000Programme in most districts, this may be accomplished much earlier and the training of smalland medium-scale contractors would be hastened through donor-supported trainingcomponents for expanding labour-based methods among small-scale Contractors.

Road 2000 Maintenance Programme

3.6.3 The Roads 2000 Strategy is an approach which aims at providing basic access inthe road network through use of an appropriate combination of labour and equipment in orderto create employment opportunities and alleviate poverty. The approach is to be used in thedelivery of maintenance works on rural gravel roads mainly for classes C, D, and specialpurpose roads. The main focus of the programme is improvement of spots in the road networkwhich constrain accessibility by reshaping roads, spot re-graveling and improvement ofdrainage and partial rehabilitation of the road structure where necessary. During theimplementation of the Rural Access Roads Programme (1974 - 1986) and the Minor RoadsProgramme (1986 to date), Kenya gained a lot of experience in the use of labour-basedmethods of road construction and maintenance. Following extensive donor consultation atprogramme conception, and the successful implementation in the pilot districts, donor

13representatives at the January 1994 Unpaved Roads Review Meeting fully endorsed the Roads2000 strategy and promised to provide support for its implementation country wide.DANIDA, EC, KFW, SIDA and the World Bank and the ADF have intervened or indicatedinterest in the programme and the amount pledged/committed to date amounts to KSh. 8.32billion. Table 3.2 shows the status of donor support for the implementation of the Roads 2000Maintenance Programme across the country.

Table 3.2Donors Support for Roads 2000 Maintenance Programme

Donor Donor Budget Status Period Coverage (Districts)

SIDA SEK 35 mill. On-going 1998-2003

Nyeri, Kirinyaga

EU Ksh 700 mill. On-going 1998-2003

Meru North, Meru Central, Meru South,Tharaka, Embu, Mbeere, Machakos,Makueni

KFW DM 15 mill. Procurement of Consultancy 1999-2004

Nakuru, Nandi, Kericho, Bomet Bureti,Nyamira

DANIDA DKK 81.6 mill. On-going 1999-2004

Kilifi, Malindi, Kwale, Taita-Taveta,Mombasa, Lamu, Tana River

IDA US$ 30 mill. Pre-Appraisal 1999-2004

Baringo, Koibatek, Kisii, Gucha, Homa Bay,Kuria, Migori, Suba, Rachuonyo, Laikipia,Samburu, Kisumu, Nyando,

ADF UA 20.00 mill. Appraisal 2001-2005

Kajiado, Trans Mara, Uasin Gishu, TransNzoia, West Pokot, Keiyo, Marakwet, Narok

AFD Ksh 750 mill Procurement of Consultancy 2001-2003

Nyandarua, Muranga, Maragwa

3.6.4 The donors, in their respective districts, are at different stages of implementation.IDA has earmarked US$ 30.0 million and carried out a pre-appraisal of its component. IDA hasnot yet finalised its Country Assistance Strategy (CAS) paper, which might support interventionin both rural roads and trunk road rehabilitation. EU has signed an agreement to give a grant ofKsh 700 million in 1997 for 8 districts in the Eastern Province. The physical implementationand the Mid-Term Review are on-going. DANIDA signed a grant agreement of DKK 81million in in 1999 to support 4 districts in 2 phases. Phase I is on-going and DKK 25 millionwould have been committed by July 2002. Thereafter, Phase II involving DKK 56 million wouldcommence. KfW signed a loan of DM 15 million for 5 districts of the Rift Valley Province in1999. SIDA signed a grant agreement of SEK 35 million in 1998 to support 2 districts ofNyanza Province. AFD is in 3 districts of the Central Province and procuring consultants for aPreparation Study.

4. THE PROJECT

4.1 Project Concept and Rationale

4.1.1 The proposed project was designed to restore the classified road network to amaintainable condition in Kajiado, Trans Mara, Uasin Gishu, Trans Nzoia, West Pokot,Keiyo, Marakwet and Narok districts of the Rift Valley Province through spot improvementsand partial rehabilitation of prioritised gravel/earth roads with appropirate mix of labour andequipment. Since the road works are of small magnitudes and are spread over several sites,Labour-based method (LBM) with minimum equipment would be encouraged for theimplementation of the project. With the population growing and massive unemployment inKenya, the LBM fosters employment creation and development of the private sector, and

14consequently contributes to poverty reduction in line with the Bank Group's country assistancestrategy outlined in the 1999-2001 CSP.

4.1.2 Furthermore, the project was conceived pursuant to the outcome of the studies onappropriate technologies for road construction conducted in developing countries by theWorld Bank and Internattional Organization (ILO) over the last 30 years. The studiesconcluded that Labour-based Method was a cost-effective alternative to Equipment-BasedMethod in low-wage countries. In Kenya between 1974 and 1996, force account andgovernment-run delivery mechanism of LBM were adopted for road maintenance programmesunder the technical assistance provided by ILO. It was estimated that the programmesgenerated more than one million worker-day annually.

4.1.3 With the minimun equipment such as: tractor/trailers, tractor-towed graders,tippers, water tankers, pedestrian rollers, deadweight rollers, wheel-barrows, shovels, rake etc,required to support LBM available within and outside the project area, and the Kenyans'experience in LBM, the project can be implemented as conceived and endorsed througheffective participatory approach of stakeholders.(See Section 4.2.7)

4.1.4 The overall Bank Group operations in the transport sector in Kenya as at 31 March2001 amounted to UA 153.41 million covering 15 projects in the road sub-sector, and oneroad study. Thirteen of the road projects have been completed with 90% of the overallportfolio disbursed, while for the remaining two operations in the sector one is about 98%completed with substantial completion slated for June 2001 while the other has substantialcost overrun above loan amount and is being funded by the Government as provided for underthe relevant provisions ot Loan Agreement.

4.1.5 The major generic lessons learnt from the experience of the Bank in the road sub-sector, which are summarised below, have been taken into account in the conception of thisproject.

i) The projects implemented so far have been characterised by long start-updelays and delays in fulfilling the conditions precedent for loaneffectiveness, particularly where land acquisition has been involved. Allprojects and studies in the sector have experienced start-up delays of atleast 18 months;

ii) Long implementation delays caused by poor project management,procurement delays, serious problems of local counterpart funding andconsequent delayed payments to contractors and consultants compoundedby the devaluation of the Kenyan shilling, the non-fulfilment of loanconditions especially reporting requirements with respect to quarterlyprogress reporting and submission of audits, and high cost overruns in oneof the projects have been observed;

4.1.6 The implementation of the on-going “El Nino” Infrastructure RehabilitationProject has shown a remarkable improvement over the past projects owing to the fact that thePMU was adequately staffed and counterpart fund are met on timely basis. The proposedproject will be executed on a “district-by-district” basis. There is no staffing problem in eachdistrict; and a project account can now be opened at each district for better accountability andmonitoring and auditing. Accordingly, evidence that projects accounts have been opened atdistrict level for GOK counterpart funds, and the proceeds of the loan from the SpecialAccount has been made a condition of the loan. Furthermore, with the establishment of the

15Kenya Roads Board (KRB) as a body corporate to collect and administer fuel levy funds,problems of inadequate counterpart fund would be solved.

4.2 Project Area and Beneficiaries

Project Area

4.2.1 The Roads 2000 Project will cover eight districts of the Rift Valley Provincenamely; Narok, Keiyo, Marakwet, West Pokot, Trans Mara, Trans Nzoia, Kajiado and UasinGishu. The eight districts have an estimated total population of about 2.8 million, andpopulation growth in the project area is quite high ( 3.5% and above). Women constituteabout 51% of the total population in the project area.

4.2.2 The Rift Valley Province has a great variety of topographic features including hillswith altitudes over 3,000 meters above sea level. Similarly, the project area has diverse soiltypes and quality ranging from rich volcanic towards the west, black cotton in the plateauregions to silty sandy clays in the Amboseli Plains and the alluvial soils in the Ngurumanescarpment. The hill area soils are shallow and moderately deep reddish, brown and friablesandy clay loam that are prone to soil erosion. The lowland area soils are well-drained,moderately deep brown calcareous sodic gravel. In the flat areas the soils are poorly drained,very deep dark brown firm calcareous sodic clays.

4.2.3 In general, the Rift Valley Province comprises part of the high potential areas inKenya with high agricultural production of cereals such as; Maize, Wheat and Barley as wellas Livestock production. In addition, tourism is another important economic activity in thisregion. Among the project districts, Narok, Kajiado and Trans Mara house some of the mostimportant National Parks in Kenya with rich wildlife resources. Thus, wildlife-based tourismis a key foreign exchange earner in these districts.

The Poverty Situation

4.2.4 The poor constitute over 50% of Kenya’s nearly 29 million people. Womenconstitute the majority of the poor. Results of the 1997 Welfare Monitoring Survey (WMS)show a 52% of overall national poverty, 53% of rural poverty and 49% of urban poverty.Poverty in Kenya is primarily a rural phenomenon with a contribution of rural to nationalpoverty as high as 80%. In the Rift Valley province alone, from which the 8 districts of theproject have been drawn, the contribution to national poverty is about 28 percent. The districtdistribution of poverty in the project area is illustrated in the Table below. The poor areclustered in certain socio-economic categories that include small farmers, pastoralists, andagricultural labourers, casual labourers, female headed households, the physicallyhandicapped, HIV/AIDS orphans and street children.

16

POVERTY SITUATION IN THE PROJECT AREA

RIFT VALLEY PROVINCE

District Population PovertyIncidence

Some Major Causes of Poverty

Kajiado 403,000 40.9% Drought or Floods, Small Farm Sizes, Gender Imbalance,Overstocking, Prevalence of Animal or Crops Diseases, HIV/AIDS,Landlessness or Squater Problems, Unemployment, EnvironmentalProblems, Poor Roads

Trans Mara 232,000 30% Unreliable Rainfall, Illiteracy, Poor Roads and Infrastructure,Prevalence of Animal or Crops Diseases, Unemployment, InadequateHealth Facilities, Insufficient Water Supply, Lack/High cost ofEducation, Cattle Rustling.

UasinGishu

599,000 56% Poor Roads and Infrastructure, HIV/AIDS, Inaccessibility to Credit,Poor/Lack of Marketing Systems, High Input Prices, InsufficientWater Supply, Lack/High Cost of Education and Health Facilities,Landlessness or Squater Problems, Unreliable Rainfall, InadequateAgricultural Extension.

TransNzoia

551,000 45% Insecurity, Landlessness and Squater Problems, Cattle rustling;Unreliable Rainfall, Prevalence of Animal or Crop Diseases, SmallFarm Sizes, Poor Roads and Infrastructure, High Input Prices,Inadequate Agricultural Extension, Unemployment, HIV/AIDS,Inaccessibility to Credit

West Pokot 298,000 45.8% Insecurity, Poor Roads and Infrastructure, Illiteracy, Drought orFloods, Prevalence of Animal or Crop Diseases, InadequateAgricultural Extension, Inaccessibility to Credit, Poor Land TenureSystem, Unemployment, High Input Prices.

Keiyo 146,000 28.2% Insecurity, Drought or Floods, Inadequate Health Facilities,Landlessness/Squatter Problems.

Marakwet 146,000 - Cattle rustling; Migration to the Highlands and the ConsequentPressure on Land, Poor Farming Methods; Land Fragmentation, PoorRoads and Infrastructure; Drought; Environmental Degradation.

Narok 432,000 53% Insufficient Water Supply, Unreliable Rainfall, Poor or Low Qualityof Animal Stocks, Illiteracy, Inadequate Slaughter Facilities.

2,807,000Source: District Poverty Assessment Reports, Poverty Eradication Commission, Office of the President, ROK

4.2.5 The specific causes of poverty in the districts indicated in the Table above arerelated to Material Deprivation, Isolation, Alienation, Dependency, Lack of Participation orFreedom of Choice or Assets, Vulnerability and Insecurity. Isolation related factors refer tocover the lack of infrastructure, physical access to roads and communication services; alienationincludes the lack of education, employment opportunities, unexploited irrigation potential, highcosts of agricultural input and services, and the lack of appropriate technologies. Dependency isevident by virtue of landlessness and dependency on remittances. On the other hand,vulnerability is manifested through natural and international factors and processes, whileinsecurity is attributed to physical and social infrastructure and unemployment, which confrontsmany districts.

Project Beneficiaries

4.2.6 As small-scale contracts will be used to maintain the road network in the projectdistricts, it will benefit primarily the local population including women and other vulnerablegroups from new employment opportunities, increased accessibility and communication, andenhanced economic activities. Local small contractors and individuals will also benefit fromlocal capacity building in improved skills. In addition, as changes in road conditions and

17accessibility are expected to bring about generated traffic as a result of increased economicactivity, more traders will be attracted, and vehicle owners will also benefit from both savingsin vehicle operating costs and increased social mobility.

4.2.7 The project selection process was undertaken following a fully participatorymanner by involving beneficiaries and other relevant stakeholders. The project selectioncommittee comprised the District Development Committee(s), which includes all the relevantstakeholders including NGOs, Civil Society Organizations (CSOs), and communityrepresentatives. Consensus was therefore built on the choice of the roads.

4.3 Strategic Context

4.3.1 The Project is prepared within the framework of Government’s sector goal ofproviding a safe and efficient road transport system capable of supporting the productive sectorsand the social and economic development in general. This sector goal is derived from the overallcountry development strategy in the Interim Poverty Reduction Strategy Paper and the MediumTerm Expenditure Framework 2001/02–2003/04 which states the strategic objective of the roadsub-sector, among others, as provision and facilitation of basic access to all production,marketing, social facilities and consumption centres through cost-effective, efficient andsustainable road construction and maintenance. The road 2000 programme focuses oninstitutional capacity building, road maintenance and rehabilitation, network improvement anddevelopment in order to reduce general cost of transportation to the economy. The efficient andeffective implementation of the programme would result in the removal of transportationconstraints to market integration, poverty eradication and export facilitation. This strategiccontext is consistent with the Bank Group’s country assistance strategy in Kenya for the period1999 –2001 which is to assist the Government in pursuing its poverty alleviation strategythrough the development of selected sectors which includes the road sub-sector.

4.4 Project Objective

The sector goal to which the project is contributory is to improve the efficiency ofthe transport system in order to support economic and social development through effectivemarket integration. The objective of the project is to restore the classified road network tomaintainable condition in eight districts of the Rift Valley Province. The project will lead toreduction in vehicle operating costs and improved accessibility in the project districts.

4.5 Project Description

4.5.1 The project components are described as follows:

A. Civil Works: Spot improvement and partial rehabilitation of prioritised 115gravel/earth links totalling 2,944.2 km of roads within the eight districts’ networks;

B. Goods: 9 Supervision/maintenance vehicles, 32 motor-cycles, 9 photocopiers and 9computers for the Project Implementation Unit at Headquarters and the 8 districts.

C. Consultancy services: (i) pre-contract and supervision; (ii) training of 34Headquarters and Districts staff of MRPW in contract administration andsupervision; and promotion of formation of 160 small-scale contractors in labour-based routine and periodic road maintenance at district level; and (iii) project Audit.

Civil Works

184.5.2 The classified rural unpaved road links, which are unmaintainable in each districtnetwork, were identified and prioritized for spot improvement and partial rehabilitation to ensureaccessibility. A typical road has one or more surface defects such as: uneven undulations,partially or fully blocked culvert lines, inadequate culvert lines, loss of gravel at some sections,blocked side drains and inadequate turnouts for surface run-off, distorted formation levels due toweak subgrade materials, and collapsed drift structures for crossing wide and shallow rivers. Thecivil works to remedy these defects are described below.

4.5.3 The surface of the affected road sections will be reshaped in order to rectify allsignificant depressions, lack of crossfall and erosion gullies. Other roads will require additionalre-gravelling using suitable materials, with C.B.R. values greater than 15%, compacted in 200-mm layers using rollers.

4.5.4 The sections of these roads that have failed as a result of inadequate drainage,will be rehabilitated by providing mitre (turnout) drains at 20-m interval with 3% slope, ordrainage outlets with 600-mm diameter pipe culverts at 100-200-m intervals. All broken orundersized culverts will be replaced, and low lines of culverts will be removed, cleaned andreinstated with 900-mm diameter concrete pipes at 2-5% slopes. In situations where sideditches slopes exceed 4%, scour checks will be provided at 5-20 m intervals to reduce thevelocity of water on erodible soils. Either grass turves pinned to the ditch invert with woodenpegs or natural stones will be used as scour checks. Grass planting on slopes vulnerable toscouring and back-filling of borrow pits and quarry sites are other works to be carried out.

4.5.5 At wide and shallow river crossings, drifts will be constructed or rehabilitatedwith high-quality concrete instead of expensive bridge structures. Gabions (2m x 1m x 1m) willbe used to protect slopes, wingwalls of culverts and abutments of bridges.

4.5.6 The Conditions of Contract shall specify that all the civil works shall be executedby small to medium-scale contractors using Labour-Based Method (LBM) with minimumequipment in accordance with Roads 2000 Manual prepared by MRPW. The Manual encouragessmall contracts limiting the use of heavy equipment; and such small contracts will deter largecontractors from competing for the civil works.

Goods: Supervision Vehicles and Office Equipment for PIU

4.5.7 As part of the institutional support, 9 vehicles, 32 motor-cycles, 9 photocopiers and 9computers would be procured for the Project Coordinator at the Headquarters of MRPW andAssistant Coordinators in the 8 districts, through NCB to facilitate supervision and monitoringof the project implementation by the PIU.

Consultancy Services:

4.5.8 The consultancy services for pre-contract and supervision of several small roadworks will be carried out by two reputable consulting firms on behalf of MRPW. Theresponsibility of the selected firms will include preparation of tender documents in batches,contract programming and administration, inspection of works, testing of quality of materialsand project cost management, training for the PIU staff and promotion of formation of small-scale labour-based contractors in Kisii Training Center that is well-equiped for to train courseson road maintenance by LBM. Each of the two firms will cover one of the Regions below:

(i) Region I- West Pokot, Trans Nzoia, Marakwet, Keiyo, Uasin Gishudistricts; and

19(ii) Region II- Trans Mara, Narok and Kajiado districts.

The two consulting firms will also be required to liaise effectively with MRPW and the Bankduring the implementation of the project. In addition, the project audit services will be carriedout by an auditing firm.

4.6 Traffic Demand and Roads User Prices

a) Traffic levels

4.6.1 The estimate of the base year (2001) traffic volumes is based on the Traffic CountStudy implemented by the MRPW on the classified road network in 1995 and the supplementarytraffic study undertaken between October 1999 and June 2000 by the consultant on theEconomic and Social Analysis for the project. The result of the traffic counts undertaken by theconsultants indicated that 20 road links out of the total of 115 with combined length of 666.5 kmhave an average daily traffic of over 300 vehicles per day and account for 22.6% of the totallength of all links of 2,944.2 km. Thirty-eight other links with a total length of 800.5 kmaccounting for 28.2% of all roads link length under the project have traffic volumes of between125 and 300 vehicles per day while 35 links have an ADT of between 50 and 125. Theremaining 31 road links with combined length of 554.1 km accounting for 18.8 % of projectroads links length have a traffic level of less than 50-vehicle per day in zones of influence withlow economic activities but of social concerns for basic access.. The traffic levels on thedistricts’ networks of Marakwet, Trans Nzoia and Trans Mara are generally low compared withthe other districts and range between 50 to 125 vehicles per day. (See Annex 5 on TrafficAnalysis on the district road links). The traffic composition on the gravel and earth roads in theproject districts indicated that light vehicles accounted for over 80% of the traffic while light tomedium trucks account for 18 – 20%.

4.6.2 As the 1995 classified road traffic counts did not cover most of the road linksproposed, it was not possible to establish the trend of traffic growth, though some links hadhigher traffic levels in 1995 when the roads were in good condition. In projecting future trafficlevels, a rate of increase of 5.0% has been used taking into account macro – economicassessment such as growth rate of agricultural component of GDP of 4.5% per annum anddemographic projections. This rate of growth has been applied as the links involved in thedistricts’ networks consist mainly of tertiary roads linking access roads to the main roadnetwork. Traffic volume is estimated for 10 years given the nature of intervention of periodicmaintenance nature with service life of 5 to 8 years. In this circumstance also differentiating byvehicle types may not add materially to the confidence level of the projections; as a resultgeneralised growth rates have been used. It should be noted however that from the past trafficcounts survey by the MRPW, it is evident that rates for some individual road links are over 7.5%per annum.

b) Road User costs

4.6.3 The road user costs include vehicle-operating costs (VOC) that depend on types ofvehicles and of road surface conditions. The other important cost is the passenger travel timethat depends on the household incomes of the passengers in the light vehicles/cars which isusually 75% above average income, while household income for bus passengers are at thenational average. From studies in some districts in Kenya, the estimation of passenger time

20saving benefit is estimated at KSh. 0.399/minute for passenger car, KSh. 0.375/minute for bus,KSh. 0.094/minute for motorcyle and KSh. 0.014/minute for bicycle.

4.7 Environmental Impact

Potential Environmental Impacts

4.7.1 The potential impacts of the Roads 2000 Program are common in all the eightdistricts, and fall under two broad categories of Bio-Physical (Natural) and Socio-Economicenvironments. The envisaged Road Maintenance and Rehabilitation Potential Impacts are: 1)Erosion of the road, shoulders, the road reserve, and the nearby land and crop fields. 2)Disturbance of water flows caused by poor drainage facilities; 3) Water pollution by oilspillage; 4) Traffic disruption; 5) Traffic Noise; 6) Waste materials from drain cleaning andpavement reconstruction; 7) Safety of road workers from careless commuters; 8)Encroachment induced by improved access, leading to implementation of new clearing forcropping, and homestead; 9) unrehabilitated borrow sites.

Mitigation Measures

4.7.2 Environmental mitigation measures for road construction and maintenance arenow well integrated in the engineering design. Road environmental mitigation measures areintegrated in the design and costing of the roads. Very limited mitigation measures need to becosted separately especially those located outside the road reserve such as mitigation for fieldseroded by runoff from roads, and rehabilitation of borrow pits. The proposed environmentalmitigation measures to minimize potential impacts resulting from the project activities are: 1)Design and construction measures; 2) Rehabilitation works; 3) Maintenance works; 4) Lawenforcement; 5) Prevention and waste disposal. See more details in Annex 5.

Environmental Management Plan.

4.7.3 An Environmental Management Plan (EMP) is outlined in the EIA report, and inthe environmental annex, where the institutions responsible for implementation are described.Some of the key parameters for monitoring and auditing in the Roads Maintenance Programinclude: 1) Erosion of the road, the road reserve and the immediate environs; 2) Water qualityin critical water resources affected by road construction, rehabilitation and maintenance; 3)Encroachment on forested areas by non planned economic activities, 4) Traffic accidents inorder to improve road signing; 4) Diseases such as malaria and schistosomiasis, especiallyaround unrehabilitated borrow sites.

4.8 Social Impacts

4.8.1 The Economic and Social Study conducted by the Ministry of Roads and PublicWorks shows that the project will reduce transport costs and raise the reliability of vehicularaccess and thereby expand markets for agricultural and non-farm products; integrate poorlyaccessible districts with regional economic centres; improve transport conditions in ruralvillages; generate employment through the rehabilitation and maintenance of rural roads tomitigate rural poverty; and build up institutional capacity at local government level anddevelop small- and medium-size enterprises to manage and execute, on a sustainable basis,the maintenance and minor upgrading of rural roads in Kenya.

214.8.2 The project will contribute to alleviate rural poverty in the districts and raise livingstandards of rural communities through increased access to basic social and economic servicesand income-generating activities. The labour-based methods would generate significantemployment opportunities for the local population including women. It has been estimatedthat during the rehabilitation phase a total of 30,000 jobs will be created and 20 percent ofthese jobs are expected to benefit women directly. As the project progresses, it will also bringabout increased economic activities and social benefits to the local populations and beyond.

4.8.3 With regard to the enhancement of the quality of life of the local population, manyroutine daily activities such as commuting to schools, shopping centres, visiting hospitals formedical treatment and going to administrative centres will be made easier. Recent studiesshow that in the Rift Valley Province the proportion of children who never attended schoolwas one of the highest in the country (about 24%). In addition, only about 6 percent of thepoor manage to reach secondary school education. This is attributed to both the distance andhigh cost attached to secondary school education. Similarly, the poor in the project area areparticularly disadvantaged in terms of length of time taken to reach the nearest hospital /maternal and child health care delivery centers. The project would therefore without doubthelp to close some of this gap thereby benefiting particularly girls and women.

4.8.4 The project will also promote the local economy by improving the current accessto markets surrounding the project districts for both crops and livestock products. Rawmaterials and products will be transported quickly and more efficiently. Since most of theproduce is agricultural, it will be an encouragement for the farmers to grow crops/livestockproduce without fear or damage of perishable crops and milk as a result of lack of immediatetransport. The project will therefore help achieve the Government’s agricultural sector growthrate target of 4-6% per annum.

4.8.5 One major area of potential socio-economic negative impact of the project isexpected to be poor sanitation and solid waste disposal in maintenance camps. There is also apossibility of transmission of communicable diseases such as HIV/AIDS as a result ofincreasing prostitution activities around the construction sites. Another area of negativeimpact is accident risks associated with vehicular traffic and transport, that may result in spillsof toxic materials, injuries or loss of life.

4.8.6 With regard to the risks of Sexually Transmitted Diseases, local authorities willtake appropriate measures to create awareness on HIV/AIDS and other related diseases, aswell as avail health care services. All relevant local authorities (including education andhealth district units) as well as civil society and NGOs would play a critical role in creatingawareness and thereby mitigate the negative health impacts. In addition, the project sites willbenefit from national/local HIV/AIDS programs and in particular from those that targetconstruction workers and drivers. More over, contractors will be obliged to provide awarenessbuilding measures about HIV/AIDS and other sexually transmittable diseases, and biddingdocuments will have one line item to address this need. Similarly, with regard to mitigatingaccident risks, local authorities should design and implement road safety measures and put inplace emergency services.

224.9 Project Costs

4.9.1 The project cost estimate (net of taxes) is UA 22.28 million which is made up of UA11.45 million (51.4%) in foreign exchange cost and UA 10.83 million (48.6%) in local cost. Theestimated project cost is based on the "Bills of Quantities" prepared by the MRPW dated June2000 and unit rates from recently awarded contracts reviewed by the Fund. A provision of 14%was made to accommodate physical contingencyand further deterioration of the gravel roads,and price escalation of 3% and 6% per annum for foreign and local costs respectively. Anamount of UA 1.40 million or 7% of the total cost for works was also provided for supervisionConsultancy services. A lump sum of UA 0.04 million has been incorporated for Consultancyservices required for audit of the project civil works, goods and consultancy services cost. Asum of UA 0.31 million has been estimated for Goods, while a sum of UA 0.49 million has beenestimated for Training, inclusive of technical assistance cost and training cost at KTC.

4.9.2 A summary of the project cost estimates for the various components and categoriesis given in Tables 4.1 and 4.2 below and the detailed cost estimates for the project arepresented in Annex 4.

Summary of Project CostsTable 4.1

Summary of Project Cost by Components

KSh millions UA MillionComponent Foreign

ExchangeLocalCosts

TotalCosts

ForeignExchange

LocalCosts

TotalCosts

% F.E.

A. CivilWorks-PartialRehabilitation

823.56 823.56 1647.12 8.10 8.10 16.20 50.0

B Goods: Vehicles &Office Equipment

25.42 - 25.42 0.25 - 0.25 100.0

C Consultancy:(i) Pre-contact &

supervision(ii) Training(iii) Auditing

91.5121.354.07

23.3818.30

-

114.8939.654.07

0.900.210.04

0.230.18

-

1.130.390.04

81.453.8100.0

Total Base CostPhysical Contingency (14%)Price Contingency

965.91135.2363.03

865.24121.13114.76

1831.15256.36177.79

9.501.330.62

8.511.191.13

18.012.521.75

52. 752.735.4

Total Project Costs 1164.17 1101.13 2265.30 11.45 10.83 22.28 51.4

23

Table 4.2Summary of Project Cost by Category of Expenditure

KSh millions UA MillionCategory Foreign

ExchangeLocalCosts

TotalCosts

ForeignExchange

LocalCosts

TotalCosts

% F.E.

A.

B

C

CivilWorks:Partial Rehabilitation

Goods: Vehicles andOffice Equipment

Consultancy Services:Pre-contract, Supervision, Training and Auditing

823.56

25.42

116.93

823.56

-

41.68

1647.12

25.42

158.61

8.10

0.25

1.15

8.10

-

0.41

16.20

0.25

1.56

50.0

100.00

74.1

Total Base CostPhysical Contingency (14%)Price Contingency

965.91135.2363.03

865.24121.13114.76

1831.15256.36177.79

9.501.330.62

8.511.191.13

18.012.521.75

52. 752.735.4

Total Project Costs 1164.17 1101.13 2265.30 11.45 10.83 22.28 51.4

4.10 Sources of Finance and Expenditure Schedule

4.10.1 ADF and GOK will jointly finance the project. The proposed financing from ADFof UA 20.0 million will cover the entire foreign exchange cost and 78.9% of the local costamounting to UA 8.55 million. The GOK will finance 21.1% of the local cost amounting toUA 2.28 million as a part of the civil works. The proposed financing plan of the project bysource of finance and by categories of expenditure are presented in Table 4.3.

Table 4.3Sources of Finance (In UA Million)

Source Foreign Exchange Local Costs Total Costs % of TotalADFGovernment (GOK)

11.45-

8.552.28

20.002.28

89.810.2

Total 11.45 10.83 22.28 100%

4.10.2 The financing of local costs is justified by the Government of Kenya's continuedefforts to mobilise internal and external resources to finance its programme of macroeconomicadjustment and structural reform.

4.10.3 The external financing requirements of Kenya are high. The financial resourcesprovided by the multilateral and bilateral donors and creditors are primarily used to financethe foreign exchange cost of goods and services that the economy needs to expand and for theimplementation of development projects.

4.10.4 The local costs of the project are fairly high, accounting for 48.6 percent of thetotal project cost. Requiring the Government to finance the whole amount of local costs wouldput a severe strain on the already limited budget resources. The Government is currentlyimplementing a poverty reduction strategy, which has identified core poverty projects andprograms, to which available budget resources are directed. To be able to meet the entire localcosts of this project would thus oblige the Government to borrow from the local market thus

24increasing the stock of domestic debt. The Government’s domestic debt currently amounts toUS$ 2.5 billion, representing 22.2 percent of GDP. Further borrowing from the domesticmarket would worsen the domestic debt service situation and reduce the resources availablefor development purposes. Also, increased domestic borrowing will lead to higher interestrates, which will crowd-out private investment. Hence, the total local costs cannot be met withavailable domestic resources.

4.10.5 The project will utilise labour-intensive methods and will require localprocurement of a large proportion of its components, such as labour (skilled and unskilled).Hence, the high local cost cannot be avoided.

4.10.6 The provisional expenditure schedule by component of the project based on theproposed implementation plan is shown in Table 4.4 below. The expenditure schedule has beenevolved from the total estimated cost of the project spread over the implementation programmein proportion to the works and services programmed for each year of project implementation.

Table 4.4Expenditure Schedule by component

(In UA million)

Component 2002 2003 2004 2005 TotalA. Civil Works 4.01 7.02 7.01 2.00 20.04B. Goods: Vehicle, Office Equipment 0.31 0.0 0.0 0.0 0.31C. Consultancy:

(i) Pre-contract and Supervision(ii) Training

(iii) Auditing

0.280.240.01

0.490.150.01

0.499,100.01

0.140.00.01

1.400.490.04

Total 4.85 7.67 7.61 2.15 22.28

Table 4.5Expenditure Schedule by Sources of Finance

(In Million UA)

Source 2002 2003 2004 2005 Total

ADFGOK

4.000.85

7.000.67

7.000.61

2.000.15

20.002.28

Total 4.85 7.67 7.61 2.15 22.28

5. PROJECT IMPLEMENTATION

5.1 Executing Agency

The project Execution Agency will be the Ministry of Roads and Public Works(MRPW), while the Project Implementation Unit (PIU) will be under the purview of the ChiefEngineer (Roads), and located in Maintenance Branch of the Roads Department-MRPW (seeAnnex 2).

25

5.2 Institutional Arrangements

5.2.1 The Roads Department of the MRPW has Seven Divisions each headed by aChief Superintending Engineer, namely: Administration, Inspectorate, Bridges, Planning,Maintenance, Construction, and Design as presented in Annex 2. The PIU for Roads 2000Programme is under the Maintenance Division. The key staff of the PIU comprises : 1 CivilEngineer at the Headquarters as the Project co-ordinator and 8 Civil Engineers at district levelas the Assistant project co-ordinators These engineers are available for the projectimplementation. (see Annex 2).

5.2.2 However, the need for the Fund to further review the suitability of thequalifications and experience of the project co-ordinator and his assistants has been made acondition of the loan.

5.3 Supervision and Implementation Schedules

5.3.1 The rehabilitation works will be executed by the selected labour-based contractorsunder unit price contracts. Supervision of works, training of staff and promotion of formation oflabour-based contractors will be done by two reputable firms of civil engineering consultants onbehalf of the Executing Agency. The project will be implemented progressively over a period of50 months commencing in June 2002 and ending in July 2006, inclusive of one yearmaintenance period.

5.3.2 In addition, the consultant will be responsible for the day-to-day supervision of theworks, quality control and certification of the works done.

5.3.3 The implementation schedule for the project is presented here-below.

26Table 5.1

Project Implementation Schedule

Activities Date Agency ResponsibleApproval/ADF June 2001 ADFPublication of GPN Aug. 2001 MRPW/ADF

Consultancy Service for Pre-contract, Supervision and TrainingAdvertisement and Notification (SPN) Sept 2001 MRPW/ADFApproval and issue of RFP Nov. 2001 MRPW/ADFReceipt of Proposals Jan. 2002 MRPW/ADFEvaluation & Approval April 2002 MRPW/ADFAward of Contracts May 2002 MRPW/ADFCommencement of Consultancy Services June 2002 MRPW/ADFCompletion of Consultancy services July 2006 MRPW/ADF

Civil Works ContractAdvertisement and Notification (SPN) June 2002 MRPW/ADFCall for tenders July 2002 MRPW/ADFReceipt of Tenders Sept. 2002 MRPW/ADFEvaluation & approval Nov. 2002 MRPW/ADFAward of Contract Dec. 2002 MRPW/ADFCivil Works commenced 1st batch Jan. 2003 MRPW/ADFConstruction completed Last batch June 2005 MRPW/ADFEnd of Maintenance Period June 2006 MRPW/ADF

GoodsCommencement of Procurement Aug.2002 MRPW/ADFEnd of Procurement Aug. 2003 MRPW/ADF

Training (Intermittent)Commencement of training Aug. 2002 MRPW/ADFEnd of training Feb. 2004 MRPW/ADF

5.4 Procurement Arrangements

5.4.1 Procurement arrangements are summarised in Table 5.2 below. All procurementof goods, works and acquisition of consulting services financed by the Bank will be inaccordance with the Bank’s “Rules of Procedure for Procurement of Goods and Works ” or asappropriate “Rules of Procedure for the Use of consultants” using the relevant StandardBidding documents.

Table 5.2Summary of Procurement Arrangements

(UA Million)Project Categories ICB NCB Other Shortlist Non-Bank funded

Total

1. Civil Works(small contracts)

20.04(17.76)

20.04(17.76)

2. Goods (Vehicles,OfficeEquipment)

0.31(0.31)

0.31(0.31)

3. Consultancy Services(Pre-contract, Supervision,Training and Audit

1.93(1.93)

1.93(1.93)

( ) = ADF Contribution

27

Civil Works

5.4.2 The civil works contracts which are small in value, comprising spot improvements/rehabilitation of the rural roads, are to be carried out in remote areas of the Districts, as such theyare unlikely to attract bids from outside the country. Therefore, procurement of civil works undersmall contracts in the eight districts, will be carried out under National Competitive Bidding(NCB) procedures, in accordance with Bank’s Rules. This procurement mode is appropriatebecause : (i) the maintenance budget allocation is on a district –by-district basis; (ii) spotimprovement and partial rehabilitation are required on several gravel and earth roads that arespread in each district; (iii) the nature of intervention, on the average, requires about US$ 9500per km, which does not require mobilization of heavy construction equipment; (iv) the objectiveof the Road 2000 programme which is supported by seven other donors is to restore theclassified road network through spot improvements and partial rehabilitation; and (v) the need toreduce poverty through enhancement of the contracting capacity of the country.

5.4.3 The spot improvement/ rehabilitation works in each district will be grouped into lots(with an average contract value not exceeding UA 100,000 each), and are valued in total at UA20.04 million. Tender documents for the works will be prepared for each package separately tofacilitate contractors to bid.

Goods

5.4.4 National Competitive Bidding ( NCB) procedures for procurement of Vehicles (9nos), Motor Cycles (32 nos), Computers (9 nos), and photocopiers (9 nos) required forsupervision and monitoring of the implementation of the project (amounting to UA 0.31million), will be followed, in accordance with the Bank’s rules.

Consultancy Services

5.4.5 Procurement of Consulting services as detailed in the table above, will beundertaken in accordance with the "Bank’s Rules of Procedure for the Use of consultants".

5.4.6 Consultancy services (including Pre-contract services) for (i) Supervison of Spotimprovements/rehabilitation works in eight districts; and (ii) Technical AssistanceConsultancy services for training of personnel in Contract Management & Supervisionactivities, amounting to average UA 1.89 million, will be procured on the basis of shortlistsof qualified consultants, in accordance with Bank’s guidelines.

5.4.7 Two Consulting firms will be selected, and each of the two firms will cover one ofthe Regions below:

i) Region I- West Pokot, Trans Nzoia, Marakwet, Keiyo, Uasin Gishu districs; andii) Region II- Trans Mara, Narok and Kajiado districts.

The selection of consultants will be based on technical quality with price as a factor, inaccordance with the "Bank’s Rules of Procedure for the Use of consultants".

28

Audit Services

5.4.8 Audit services will be procured on the basis of shortlist in accordance with theBank’s “Rules of Procedure for the Use of Consultants”. The selection procedure shall bebased on comparability of technical proposals and least-cost consideration. As the amount isless than UA 350, 000, the Borrower may limit the publication of the announcement tonational or regional newspapers. However, any eligible consultants, being regional or not ,may express their interest to be short listed. The contract would be a multi-year with theoption of retaining the same consultant.

National Procedures, Regulations and Executing Agency

5.4.9 Kenya’s National procurement laws and regulations have been reviewed anddetermined to be acceptable. The executing agency (MRPW) through the PIU, will beresponsible for the procurement of works, goods and acquisition of consultancy services. TheMRPW has been executing similar projects financed by the Bank and are familiar with theBank’s procurement rules and procedures.

General Procurement Notice and Review Procedures

5.4.10 The text of General Procurement Notice (GPN) has been agreed with MRPW and itwill be issued for publication in Development Business upon approval by the Board of Directorsof the loan proposal.

5.4.11 The following documents are subject to review and approval by the Bank beforepromulgation : i) Specific Procurement Notice; ii) Tender documents/ Requests for Proposals;iii) Tender Evaluation Reports or reports on Evaluation of Consultant’s proposals includingrecommendations for contract award; and iv) Draft Contracts if these have been amendedfrom the drafts included in the tender invitation documents.

5.5 Disbursement Arrangements

The Government will open and maintain a Special Account(SA) in foreignexchange at a bank acceptable to the ADF. The SA will be used to deposit part of the loanresources to finance small civil work contracts. The ADF will replenish the SA after theGovernment has provided valid justifications for the use of at least 50% of the previousdeposit. The direct payment method will be used for other categories. The resources from theSA will be deposited into the Project Accounts to be opened at the district level foroperational purposes. The opening of the SA and Project Accounts have been made acondition precedent to first disbursement.

5.6 Monitoring and Evaluation

5.6.1 Quarterly progress reports in line with the Bank's format covering all aspects of theproject will be prepared by the Executing Agency and forwarded to the Bank not later than onemonth after the end of each quarter. These reports will include progress achieved against agreedimplementation and disbursement schedules, key performance indicators, work programmes andcost estimates for the next quarter. The progress report will provide an updated information onproject implementation, highlighting key issues and problem areas, and recommending actionplans for resolving identified bottlenecks. Reporting requirements and associated performanceindicators, in accordance with the Bank's format, were discussed and agreed with the ExecutingAgency.

29

5.6.2 The PIU will be required to operate a separate account for the project in order tofacilitate verification of expenditures by component/category and source of finance. The projectaudit will be carried out once every year and a final audit will be prepared at the completion ofthe project. The certified audit report shall be submitted to the Bank not later than 3 monthsafter the completion of the project audit.

5.6.3 The EIA mitigative measures will be supervised by the consultant and alsomonitored by the Environmental Liaison Unit of MRPW and NEMA. The consulting firms willprepare a quarterly brief on the implementation of the identified mitigative measures andforward to the Bank, MRPW and NEMA. The consulting firms are required to prepare andsubmit to the Executing Agency and the Bank a final report at the completion of the project.Thereafter, MRPW will prepare and submit to the ADF the Borrower's Project CompletionReport (PCR) not later than three months after project completion. The consultant's finalreports and the Borrower's PCR will provide the background documents for the preparation ofthe Bank's PCR required to facilitate post evaluation of the project.

5.7 Financial Reporting and Auditing

5.7.1 The Finance and Administration Division of MRPW will be responsible forfinancial management and reporting procedures for the project and that of other donorsparticipating in the Roads 2000 Maintenance Programme. A well-documented FinancialManagement Manual which outlines internal control procedures as well as financial reportingarrangement to Government and Donors has been developed and found acceptable. TheAccounting System based on Microsoft Excel is operational and an accounting softwarepackage/consultancy service is under implementation for computerization of the accounts. Atappraisal the vote book and the cashbook have been fully computerized while the process ofcomputerizing the ledger is on going and will be fully computerized by December 2001. Undercurrent policy, Project Bank Accounts are opened in all districts, which are handling donor-funded projects. With the project Bank Accounts in the districts into which Governmentcounterpart funds are lodged, the Finance and Administration Division would be able to monitorthe expenditures of the project and meet the financial reporting and auditing requirement underDonor funded projects. The financial reporting under on-going projects supported by DANIDAand SIDA was reviewed and found acceptable.

5.7.2 Provision has been made for annual audit of the project during implementationand a final audit at the end of the project in line with the Bank's Guidelines for Project Audit.The auditing services will be undertaken by a qualified and experienced independent auditingfirm appointed by the Government and procured on the basis of an acceptable terms of referenceto the Fund.

5.8 Aid Co-ordination

5.8.1 Aid co-ordination in Kenya is carried out at the sector, national and internationallevels. The Ministry of Finance and Planning (MFP) is responsible for mobilisation andmanagement of the financial resources that are required by the technical ministries for theirdevelopment programmes and projects. The Government has established sector co-ordinationunits, which are charged with the responsibility of overseeing all sector issues including donor-assisted projects. Monthly informal meetings are held with the resident donor community todiscuss issues pertaining to on-going projects in the various sectors. At the national level, theGovernment plans to establish a Debt Management Committee to monitor the over all externaldebt situation and donor assistance to Kenya. There is also Inter- Ministerial Committee, whichreports to donors on progress and problems encountered in the implementation of donor assisted

30projects and programmes, including the Government’s Sector and macro-economic adjustmentprogrammes. At the international level, Consultative Group (CG) meetings and informal Donormeetings offer an effective forum for aid co-ordination an opportunity to assess performance ofthe country in terms of economic management, and thus determine the appropriate level ofdonor assistance to the country.

5.8.2 The major donors intervening in the road sector are the European Union, World,Bank, ADB, DANIDA, SIDA, KfW, and AFD. The MRPW provides secretariat facilities forquarterly meetings of donor agencies in the sector in which the Bank participates during whichsector policy issues and programmes are reviewed. Besides, the donors meet regularly atinformal sessions co-ordinated by the EU to harmonize donors response and positions withrespect to institutional, policy and programme implementation performance. These fora havebeen effective in the design of and for supporting the on-going policy and institutional reformsin the road sub-sector and have enabled effective partnership with the Government in theformulation of the Roads 2000 Maintenance Strategy.

6. PROJECT SUSTAINABILITY AND RISKS

6.1 Recurrent Costs

6.1.1 The recurrent costs for the project link roads for the eight districts networks whichmainly involves such activities as pothole patching, bush clearing, re-shaping and re-grading aswell as opening and cleaning of drains have been estimated at KSh. 132.4 million per annum.These maintenance activities for the gravel link roads under the project comply with the currentmaintenance policy mostly comprising annual routine maintenance of the roadside and thecarriageway and grading/re-gravelling after 3-4 years. Throughout the construction andmandatory one-year guarantee period, the construction firms will be responsible for themaintenance of the link roads in the respective district road networks. After this period, themaintenance expenditure of the project link roads will be taken over by the Roads Department ofthe MRPW for classes C link roads while classes D, E and other Special purpose roads under theproject will be that of the District Road Committees that would act as the agencies of KenyaRoads Board.

6.1.2 A Fuel Levy Fund Allocation Formula has been established under the Kenya RoadsFund Act 1999 such that 57% of the resources go to the Roads Department – MRPW formaintenance of classified roads in classes A, B, and C while 40% of the resources of the Fundgo annually to the District Road Committees for the maintenance of classified roads in classesD, E and other Special Purpose roads. A review of the financial sources of road recurrentexpenditure, composed of fuel levy maintenance funds, transit toll and other funds from therecurrent budget, indicated that the funding of road recurrent budget has grown from a level ofKSh. 2.54 billion in 1994/95 to KSh. 7.372 billion in 1999/00. The funding level for the sectorboth recurrent and development was in the amount of KSh. 13.37 billion in 1999/2000. Withthe current funding level, which are adjudged as adequate, the annual maintenance of theclassified network would be achievable. The share of maintenance of rural roads was on theaverage about 24% of total maintenance levy fund in the past. The new allocation formula underthe Kenya Road Boards Act 1999 of 40% for maintenance of the classes of roads under theDistrict Roads Committee will ensure adequate flow of resources to the districts for themaintenance of the districts’ rural roads network.

316.2 Project Sustainability

6.2.1 The on-going institutional reforms in the sector, particularly the establishment of theKenya Roads Board will ensure ring-fencing of fuel levy funds and provision of adequatefunding to the road agencies. Under the Act, the Kenya Roads Board would monitor theperformance of the road agencies and this would enable proper programming of maintenanceoperation and establishment of a maintenance programme on the link roads financed under theproject. Besides, the project will promote development of labour-based contractors for roadmaintenance and training of district engineers in contract administration, supervision andmonitoring which are intended to ensure sustainability of the intervention.

6.2.2 Another policy direction that will ensure sustainability is the increased role of theprivate sector in routine and periodic maintenance with limiting of the role of the force accountunits to emergency response only. As of date 95% of periodic maintenance on paved roads and50% on gravel roads is let out on contracts while the force account units handle 70% of routinemaintenance; the share which is to be reduced to 30% over the period 2001/02 to 2004/05. Thispolicy direction will lead to proper market creation and thereby enhance the growth of theprivate contractors and the construction industry. In addition Government has commissioned astudy through the support of the World Bank on commercialisation of the Mechanical andTransport Department of the MRPW to be transformed into a Government Equipment Agencyto operate on commercial basis and lease equipment to the private contractors. After clearingthe backlog of maintenance needs currently supported under the Roads 2000 MaintenanceProgramme and the on-going institutional reforms in the sector ensure sustained cash flow formaintenance of ural roads and the development of the domestic contracting industry, it is assuredthat the project will be sustainable.

6.3 Critical Risks and Mitigation Measures

6.3.1 The implementation of the project predicates on five main assumptions, and eachconstitutes a potential risk factor. These assumptions associated risks are discussed as follows:

6.3.2 First, all procurement actions are assumed to be on schedule. With the PIU fullyoperational and strengthened through institutional support, the risk associated with thisassumption would be ameliorated.

6.3.3 Secondly, it is assumed that payments for invoices will not be delayed by the GOK.Again, KRB's operations would reduce the associated risk factor. The risk associated withproject management would be reduced by appointing competent consultants, strengthening thePIU and launching more frequent Bank supervision missions during the implementation of theproject.

6.3.4 Thirdly, the GOK's would budget for the project and make timely release ofcounterpart funds required for the project. There are indications that the GOK is morecommitted to release of counterpart fund through Kenya Roads Board (KRB). Once the KRB isoperational, this risk factor would be reduced.

6.3.5 Fourthly, it is assumed that the supervision of works by the Bank and consultantwould be effective. The risk factor in this assumption would be removed by appointing acompetent and internationally sourced consultants, and implementing the Bank's new policy of1.5 supervision/year per project.

327. PROJECT BENEFITS

7.1 Financial Analysis

7.1.1 In this intervention, financial NPV and Financial Internal Rate of Return (FIRR) arenot applicable, as cash revenue flows are not accruing to the Road Agency though the projectinvolves cash outflows in the disbursement of financial resources for construction works,supervision and training and the resources required for recurrent expenditure for maintenance ofthe project link roads. In terms of fiscal impact analysis, the intervention would result in increasein agency costs estimated at KSh. 8,990 million in current prices over the life cycle of theinvestment.

7.1.2 For the purpose of fiscal impact, in the context of budget appropriation for roadprojects, an amount of KSh 2,240.4 million representing capital investment cost would befinanced at 90% through appropriation - in - aid and the balance of 10% in counterpart fundsfrom the resources of the Road Maintenance Levy Fund. The balance of KSh 6,749.6 millionover the project life cycle of ten years would be met from the Road Recurrent Budget of theGovernment. This translates into KSh 675 million per year for recurrent maintenance of the linkroads in the eight districts, which is equivalent to 9% of the resources of the Road RecurrentRevenue Budget of KSh 7.372 billion in 1999/2000. A review of revenue sources of fuel levytax established in 1994 as Gasoline tax KSh 1.5/litre, Diesel oil tax KSh 1.0/litre and lubricantoil tax KSh 1.0/litre), transit toll collected from operators of heavy goods vehicles ranging fromUS$ 3/100 km for trucks up to 3 axles and US$ 8.0/100 km for all trucks above 3 axlesindicated that road users as main beneficiaries of improved roads are the major means ofcollecting the funds through fuel sales and as stake holders are supportive of road user charges aslong as there is transparency and accountability in its use for a sustainable road network which isthe objective of the on-going reform in the sector. If road user charges could be sustainedannually in real terms and Government budgetary provision is also maintained at 1999/2000level, it would result in fiscal balance in the sector as this would meet the maintenance need ofthe whole-classified network estimated at KSh 9.0 billion per annum.

7.2 Economic Analysis

7.2.1 The methodology used for the economic evaluation of investment in the roadnetworks under the eight districts is based on the Highway Development and Management Tool(HDM-4) which involves preparation under budget constraints, of multi-year road works andexpenditure programmes in which those sections of the each district network that require spotimprovement and/or partial rehabilitation are identified for different treatment types and fordifferent years for each road section to maximise the NPV of the investment in the 8 districtsroad network. The road network in each district is characterised by length of roads in differentcategories defined by parameters such as road class, surface type, pavement condition, andtraffic levels covering 115 link roads with a total combined length of 2,944.2 km. The HDM-IVallows for modelling over the analysis period of ten years of each link road in the network theinteraction between traffic volume and composition, road conditions and vehicle operating costsfor the with and without project scenarios under the alternative intervention strategy of dominimum in the without project scenario and spot improvement and partial rehabilitation underthe with project scenario. Economic benefits are determined by comparing the total cost streamsfor various maintenance and construction alternatives under the project with the base case. TheNPV and incremental Benefit-Cost Ratio (BCR) have been used as the index to prove theeconomic viability of the project given the network approach instead of individual link roads andthe nature of intervention which is mainly periodic maintenance with life cycle of 5 to 8 years.The details of the economic analysis for the link roads are in the PID while the summary of theBenefit – Cost Analysis for each district network and for the whole project is in Annex 5.

33

7.2.2 The benefits considered in the economic analysis are i) Reduction in Road Users’Costs which consist of vehicle operating cost savings and passenger time savings for normaltraffic on the districts road networks which is estimated using the HDM-IV. The discountedstream of this category of benefits over the life cycle of the investment is estimated at KSh.10.783 billion in terms of decrease in road user costs. The other benefits taken into account inthe analysis is the net increase in the value of agricultural production. This category of benefits isexogenous benefits imported into the HDM-IV. The impact of the investment in spotimprovement and partial rehabilitation were estimated from the areas of influence of each road,production patterns, additional land availability, potential yield increases, crop production costmodels, and the reduction in post harvest losses. This potential agricultural impact is thenfactored by the expected changes in the level of accessibility with no impact if the road isalready all weather and full impact if the road is closed for more than three months a year. Thediscounted stream of the net exogenous benefit is estimated as KSh.2.558 billion over the lifecycle of the investment. Other benefits are increased mobility and increased accessibility tohealth and educational facilities which can only be qualified and therefore not taken into accountin the estimation of the NPV and the incremental benefit cost ratio of the project.

7.2.3 The costs taken into account in the analysis are the Agency costs which include thecosts of spot improvement/partial rehabilitation works, consultancy services for supervision,training and road maintenance costs. For the economic analysis financial construction andmaintenance costs have been converted to economic costs using the conversion factor of 0.76.The total economic capital cost is estimated as KSh 1.703 billion that is to be disbursed over aperiod of four years spanning the period 2002 to 2005. The discounted stream of these costsover the life cycle of the investment resulted in an increase in road agency costs to a tune ofKSh. 6.832 billion.

7.2.4 The result of the economic analysis for the overall project indicated a NPV ofKSh.6.508 billion at 12.0% discount rate and an incremental Benefit – Cost ratio of 1.952, bothof which confirm the viability of the project. There is however a wide distribution in theeconomic results with respect to individual district networks, with the sub-projects of Marakwetmarginally viable and that of Trans Mara and Kajiado having negative NPVs and BCR less than1.0. The Kajiado and Trans Mara Districts’ sub-networks have low traffic levels and thedistricts are characterized by poor roads and rural infrastructure that constrain the exploitation oftheir agricultural and tourism potential. Besides, there are mass unemployment andinadequate/lack of access to health and educational facilities among others as reflected inSection 4.2. As a result, the intervention in these two districts are compelled not solely oneconomic grounds but also in terms of poverty alleviation, improved access to economic andsocial facilities and employment which the project provides. The overall economic assessmentresult in terms of NPV and incremental BCR for the eight districts networks taken together stilljustifies the intervention even with the inclusion in the project of the low volume trafficked sub-networks of Trans Mara, Kajiado and Marakwet districts.

7.3 Social Impact Analysis

7.3.1 The provision of well maintained physical infrastructure is key to economic growth,employment generation and poverty reduction. Production costs, competitiveness and access tomarkets depend upon the quality of infrastructure. The current poor state of all infrastructure actsas a major constraint on economic performance and is a major factor in rising levels of poverty.Today, the poor constitute more than half the population of Kenya. Women constitute themajority of the poor and also the absolute majority of the Kenyans. In this regard, the recentlyreleased IPRSP underlines the importance of the provision of well maintained physicalinfrastructure to economic growth, employment generation and poverty reduction. The use of

34labour based method in order to provide employment to local communities, boost the ruraleconomies, and contribute significantly towards poverty reduction is also emphasized.

7.3.2 Economic and social benefits of the project area are dominated by agriculturalactivities, and agriculture constitutes the major source of income in the project area. The districtsin the project area have a great potential for both food crops and cash crops such as coffee, tea,cotton, sunflower, as well as livestock and livestock products. It should be noted that the projectarea potential for production of both food and cash crops is presently under-utilized due to lackof efficient marketing channels and attractive prices. In some cases a lot of the products from theproject area could not get to their markets because roads had been washed away by rain water.

7.3.3 In order to enable producers increase quantities of their marketable products, it isessential to make all the available roads accessible throughout the year. Access to othereconomic and social amenities has not been good due to the poor state of repair of the roads i.e.people have to walk long distances to hospitals due to inadequate transport which is broughtabout by poor roads. A fairly good road network and maintenance programme will withoutdoubt help to increase access to farm inputs and marketing of farm produce thereby byincreasing both the quantity and quality of agricultural products and livestock. Indeed, access toall other social economic development centres such as education, hospitals, markets will goalong way in increasing accessibility to households of, farm inputs, markets and all other socialamenities in the project area. The project will therefore bring about increased economicactivities and social benefits to the local populations and beyond.

7.3.4 In addition, the project is based on the district focus approach for ruraldevelopment, and is relevant to the overall objective of poverty reduction through increasedfunding and a better disbursement system and reinvigoration of the District Communities andstrengthening of district planning capacities. Decentralization and devolution of institutionsto the lowest levels to involve communities in decision-making is an important programme inpoverty reduction strategy. The project through its district focus will make developmentpeople centred and the district focus of resource allocation will without doubt enhanceparticipatory planning and implementation at the grassroots levels thereby giving priority tothe views and aspirations of poor communities. Looking at it from macro-economic point ofview, the programme will go a long way in addressing issues on poverty reduction andimprovements in the living standards of the rural populations.

7.4 Sensitivity Analysis

The economic analysis result was subjected to sensitivity test of a 10% increase incosts, 10% reduction in benefits (traffic levels and induced benefits) and removal of exogenousbenefits. The result of the sensitivity tests on incremental BCR indicated that a 10% increase incosts would result in a drop in incremental benefit cost ratio from 1.952 to 1.757. On the otherhand, a 10% drop in traffic levels and exogenous benefits would reduce the incremental benefit– cost ratio from 1.952 to 1.774. If the exogenous benefits, which are due to net increase invalue of agricultural production, are not realised and therefore eliminated from the analysis, theincremental benefit-cost ratio would drop from 1.952 to 1.578. All the above tests on theeconomic analysis result indicated that the incremental BCR at 12.0% discount rate is higherthan 1.0 for the project and validates the economic viability of the investment in the project (SeeAnnex 5).

358. CONCLUSIONS AND RECOMMENDATIONS

8.1 Conclusions

8.1.1 The implementation of the project will restore the classified road network to amaintainable condition in each of the eight districts, enhance accessibility to agricultural, socialand economic centres and create employment opportunities for its sustainability. The project isconsistent with the Bank Group’s country assistance strategy as outlined in the 1999-2001 CSPwhich supports the agricultural, transport, and social sectors.

8.1.2 The project is well conceived, technically feasible and it is economically justifiedand viable. It would generate NPV of KSh 6.51 billion and benefit/cost ratio of 1.952. Thebenefits would support adjustment efforts in other sectors of the economy.

8.2. Recommendations and Conditions for Loan Approval

8.2.1 It is recommended that a loan not exceeding UA 20.00 million be extended to theGovernment of Kenya to finance the entire foreign exchange and 78.9% of the local Cost ofRoads 2000-Districts Rural Roads Rehabilitation Project in the Rift Valley Province of Kenya.

A. Conditions Precedent to the Entry into Force of the Loan Agreement

The entry into force of the Loan Agreement shall be subject to the fulfilmentby the Borrower of the provisions of Section 5.01 of the General ConditionsApplicable to Loan Agreements and Guarantees as adopted by the Fund.

B. Condition Precedent to First Disbursement

Conditions Precedent to First Disbursement. The obligation of the Fund tomake the first disbursement of the Loan shall be conditional upon the entryinto force of the Loan Agreement and the fulfilment by the Borrower of thefollowing conditions. The Borrower shall have:

i) Provided evidence that the Chief Executive of the Kenya RoadsBoard (KRB) and the principal officers thereof are in place (paras.3.3.2 and 3.3.3);

ii) Submitted to the Fund an undertaking on the institutionalarrangements for the maintenance of rural roads at the district level(para. 3.3.2. and 3.3.3);

iii) Nominated from the Road Department of MRPW, a Civil Engineer,with a minimum of 10 years post-qualification experience, as a full-time Project Co-ordinator for the implementation of the project, andeight (8) Assistant project co-ordinators at the district level, whoshall possess a minimum of 5 years post-qualification experienceeach, and whose general qualifications and experience shall beacceptable to the Fund (para. 5.2.2);

36

iv) Provided evidence that a Special Account has been opened in theCentral Bank of Kenya, and on terms and conditions acceptable tothe Fund, into which proceeds of the loan will be deposited asrequired. (para. 5.5);

v) Provided evidence that Project Accounts have been opened in banksat the district level acceptable to the Fund, and on terms andconditions also acceptable to the Fund, into which proceeds from theSpecial Account shall be deposited (paras. 4.1.6 and 5.5);

vi) Provided evidence that Project Accounts have been opened at thedistrict level into which the Government counterpart fund shall bedeposited (para. 4.1.6).

C. Other Conditions

The Borrower shall:

i) Have by 31st December 2003 put into place the institutionalarrangement for the maintenance of rural roads at the district level(paras. 3.3.2 and 3.3.3).

SOURCE: GOK

ANNEX 4KENYA

ROADS 2000-DISTRICTS RURAL ROADS REHABILITATION PROJECT

Provisional List of Goods and Services

KSh millions UA MillionCategory Foreign

ExchangeLocalCosts

TotalCosts

ForeignExchange

LocalCosts

TotalCosts ADF GOK

A.

B

C

Works

Goods

ConsultancyServices :

823.56

25.42

116.93

823.56

-

41.68

1647.12

25.42

158.61

8.10

0.25

1.15

8.10

-

0.41

16.20

0.25

1.56

14.36

0.25

1.56

1.84

-

-

Total Base Cost

Physical Contingency&Price Contingency

965.91

198.26

865.24

235.89

1831.15

670.04

9.50

1.95

8.51

2.32

18.01

4.27

16.17

3.83

1.84

0.44

Total Project Costs 1164.17 1101.13 2265.30 11.45 10.83 *22.28 20.00 2.28

* See details below

PROJECT COSTS PER DISTRICT

S/N DISTRICT LENGTHOF

NETWORK (KM)

POPULATION LENGTHCONSIDERED

IN THEPROJEJCT (Km)

LANDAREA(KM²)

AMOUNT(UA

MILLION

PER-CENTA

GE%

1

2

3

4

5

6

7

8

Kajiado

Trans mara

Uasin Gishu

Trans Nzoia

West Pokot

Keiyo

Marakwet

Narok

2,056.2

382.8

1,242.9

1,138.2

1,220.3

566.1

371.6

1,539.9

403,000

232,000

599,000

551,000

298,000

146,000

146,000

432,000

789.3

338.0

204.6

204.6

434.7

236.6

209.8

324.6

21,105

2,901

3,218

2,467

9,100

1,456

1,709

17,128

5.50 (4.95)

2.38 (2.14)

2.76(2.48)

2.38(2.14)

2.92(2.63)

2.08(1.87)

2.08(1.87)

2.18(1.96)

24.7

10.7

12.4

10.7

13.1

9.3

9.3

9.88,464 2,807,000 2,944.2 59,084 22.28(20.04) 100.0

ANNEX 5Page 1 of 4

KENYADISTRICTS RU RAL ROADS REHABILITATION PROJECT

FINANCIAL AND ECONOMIC ANALYSIS

Methodology and Assumptions for Economic Evaluation

i) Methodology

The methodology used for the economic evaluation of the investment in the road networks of the eight districtsis based on the Highway Development and Management Tool (HDM-IV) which involves preparation underbudget constraints of multi-year road works and expenditure programmes in which those sections of eachdistrict sub-network that require spot improvement and/or partial rehabilitation are identified for differenttreatment types and for different years for each road section to maximize the NPV of the investment in thewhole eight districts road network taken together as an investment proposal. The HDM-IV allows for modelingover the analysis period of ten years of each link road in the network, the interaction between traffic volume andcomposition, road conditions and vehicle operating costs for the with and without project scenarios under thealternative intervention strategy of do minimum in the without project scenario and spot improvement andpartial rehabilitation under the with project case. Economic benefits are determined by comparing the total coststreams for various maintenance and construction alternatives under the project with the base case. The NPVand incremental Benefit-Cost ratio at 12% discount rate are the adopted indices to prove the economic viabilityof the project given the nature of intervention of periodic maintenance with life cycle of 5 to 8 years.

The benefits taken into account in the economic analysis are: i) reduction in users’ costs which consist of VOCsavings for normal traffic and time savings for passengers estimated using the HDM – IV ; ii) net increase in thevalue of agricultural production which is treated as an exogenous benefit and imported into the HDM-IV. Thenet increase in the value of agricultural production is estimated from the area of influence of each link road,production patterns, additional land availability, potential yield increases, crop production cost models andreduction in post harvest losses. The costs taken into account are the Agency Costs which include the cost ofspot improvement /partial rehabilitation, consultancy services for supervision, training and road maintenancecosts.

For economic analysis, financial construction and maintenance costs have been converted to economic costsusing a standard conversion factor of 0.76. In arriving at this factor, the following assumptions underly theadjustment of financial investment costs into economic ones:

(a) The foreign exchange contents of all relevant cost components is converted into economic costs byapplying a conversion factor of 1.0 due to liberalization of the foreign exchange market;

(b) Taxes an duties are eliminated completely as they represent transfer payments and not consumption ofeconomic resources;

(c) Financial costs of unskilled and skilled labour are multiplied by conversion factors of 0.50 and 0.75respectively taking into account the existence of wide spread unemployment and underemployment inKenya and role of unionized labour;

(d) Financial Contingencies are eliminated as they do not constitute consumption of economic resources,and

(e) Tradables (domestically produced goods) are adjusted by a conversion factor of 1.0 due tosubstantial trade liberalization policy in place

ii) Other Assumptions

ANNEX 5Page 2 of 4

The assumptions adopted during the economic evaluation of the Kenya Roads 2000 project are listedbelow.

(a) Traffic Composition (%)Gravel and Earth roads

Rift Valley Province – Kenya including semi-aridareas of west Pokot, Marakwet and Keiyo districts

OtherAreas

Bituminousroads

Motor cycle 15 10 10Car 20 20 20Pick-up/4WD 15 15 16Mini-bus 30 30 25

Bus 5 5 5Light truck 8 10 10Medium truck 5 5 7Heavy truck 2 4 5

Articulated truck 0 1 2

Operations unit costs:Economic/financial conversion factor = 0.76

Item Unit Economic (KSh) Financial (KSh)

Unpaved Roads

Routine maintenance Ksh/yr 7,600 10,000

Drainage Ksh/km 9,880 13,000

Grading Ksh/km 16,720 22,000

Spot regravelling Ksh/cub-m 1,520 2,000

Surface reseal Ksh/sq-m 380 500

Regravelling Ksh/cub-m 814 1,071

Spot regravelling Ksh/sq-m 304 400

Regravelling Ksh/km 1,140,000 1,500,000

Works Standards

1. Do minimum maintenance:Bituminous roads: Routine maintenance, patching, drainage repairs, crack sealingGravel roads: Routine maintenance, grading, drainage repairs, spot re-gravellingEarth roads: Routine maintenance, grading, drainage repairs

2. Improvement standards (Projects) consideredEarth roads: gravel surfacing with the option of postponing worksGravel roads: gravel resurfacing 2002, with the option of deferring works to

2003, 2004 or 2005.Bituminous roads: Pavement reconstruction or overlay maintenance in 2002

3. Post construction maintenanceEarth/gravel roads: Routine maintenance, grading, drainage repairs,

spot re-gravelling, gravel resurfacingBituminous roads: Routine maintenance, patching, drainage repairs,

crack sealing, resealing, overlay

ANNEX 5Page 3 of 4

KENYADISTRICTS RURAL ROADS REHABILITATION PROJEFCT

Summary Financial and Economic Analysis – Traffic Analysis on Project Districts Rural Roads(Base Year: 2001)

TRAFFIC VOLUME West Pokot Trans Nzola Marakwet Keiyo Uasin Gishu Trans Mara Narok Kajiado GLOBAL RESULT

No. of Length No. of Length No. of Length No. of Length No. of Length No. of Length No. of Length No. of Length Links Length

Links (km) Links (km) Links (km) Links (km) Links (km) Links (km) Links (km) Links (km) No. % (km) %

ADT > 300 - 2 28.9 - - 6 80.5 3 111.7 - - - - 9 444.4 20 17.4 666.5 22.6

300 < ADT <200 3 127 - - - - 2 45 3 59.1 1 40 1 64 1 6.5 11 9.6 341.6 11.6200 < ADT <125 5 67.7 - - - - 3 66.8 3 62.3 3 83 1 29.6 3 149.

518 15.7 458.9 15.6

125 < ADT < 50 6 193 8 96.4 - - 2 21 8 124.8

4 160 4 148 3 180.9

35 30.4 924.1 31.4

ADT > 50 1 47 9 79.3 11 258.8

2 23 - - 5 55 2 83 1 8 31 26.9 554.1 18.8

TOTAL 15 434.7 19 204.6 11 258.3 15 236.3 17 357.9 13 338 8 324.6 17 789.3 115 100 2,944.2 100

ANNEX 5Page 4 of 4

KENYADISTRICTS RURAL ROADS REHABILITATION PROJECT

Summary Economic Analysis

Benefit-Cost Analysis for Project Roads

SENSITIVITYBase Case Economic

Cost +10%Benefits-10%

ExogenousBenefitsRemoved

DISTRICTNETWORK

Length(km)

EconomicCost in KES

million Increase inAgencyCosts

Decrease inUser Costs

NetExogenous

Benefit

NPV@ 12%KES million

IncrementalBCR @ 12%


IncrementalBCR

@ 12%


1. West Pokot 434.7 228.935 696.892 1149.143 366.940 819.191 2.176 1.958 1.978 1.6492. Trans Nzoia 204.6 159.966 707.150 4131.116 445.570 3,869.536 6.476 5.828 5.887 5.8423. Marakwet 258.8 141.467 300.397 143.846 225.190 68.641 1.229 1.106 1.117 0.4794. Keiyo 236.3 162.598 846.727 2473.748 183.470 1,810.49 3.138 2.851 2.852 2.9225. Uasin Gishu 357.9 217.875 786.725 529.294 419.360 161.929 1.206 1.085 1.096 0.6736. Trans Mara 338.0 187.360 550.020 219.131 314.520 (16.369) 0.970 0.873 0.882 0.3987. Narok 324.6 172.165 347.743 496.318 183.52 332.045 1.954 1.759 1.776 1.4278. Kajiado 789.3 432.344 2596.939 1640.362 183.470 (537.217) 0.739 0.665 0.665 0.632AGGREGATERESULT 2944.2 1702.7 6832.591 10782.958 2557.880 6,508.247 1.952 1.757 1.774 1.578

ANNEX 6Page 1 of 2

KENYAROADS 2000 – DISTRICTS RURAL ROADS PROJECT

ENVIRONMENTAL AND SOCIAL MANAGEMENT PLAN SUMMARY

a) Brief description of the project and key environmental and social components

The Roads 2000 Project will cover eight districts of the Rift Valley Province, namely: Narok, Keiyo, Marakwet,West Pokot, Trans Mara, Trans Nzoia, Kajiado and Uasin Gishu. The districts selected their priority roads formaintenance in this project, including rehabilitation of blocked culvert lines, inadequate culvert lines, loss of gravelin some road sections, blocked side drains, and inadequate side turnout for surface runoff.

b) Major environmental and social impacts

Soil Erosion runoff from the laterite road will generate erosion and affect the road itself, the shoulders, theroad reserve, and the nearby land and crop fields. Road erosion silt the watercourses and under the bridges.Erosion at road runoff diversion outlets and impact all land bordering the road. Design is critical to

alleviate this problem. Disturbance of natural water flows occurs mainly when drainage facilities, culverts, and bridges are not

adequately designed, implemented, and maintained. This results in water logging, inundation, roadoverflow and erosion, downstream water resources abstraction, and affect fauna and flora.

Water pollution by oil spillage: Results from road construction and operation and affect surface andgroundwater resources in specific areas as well as affect resources use by population and animals.

Traffic disruption: This is a minor temporary disruption during road rehabilitation works. Traffic Noise: in the rural areas, noise is a minor impact as residences are scattered and road traffic is low. Waste materials from drain cleaning and pavement reconstruction: Impacts are minor if disposed

properly, i.e. in areas to be reclaimed, but not in rivers. Safety of road workers from careless commuters: risks of accidents are temporary during road

rehabilitation, especially when road signing is poor. Encroachment by upcoming infrastructures, induced by improved access usually in the form of

markets and other business premises, new clearing for cropping, and homestead implementation. Landscape disturbance, besides borrow pits, this is mainly limited to road reserve and results from

clearing for improved visibility. Un-rehabilitated borrow pits become hazards and/or breading sites fordisease vectors (e.g.: malaria, shistosomiasis).

c) Enhancement and mitigation program

Design and construction measures: 1) Discourage habitation of plant and animal species in the road reserveby routine bush clearing; 2) Avoid wetlands in new alignments or realignments of roads; 3) Regular watering ofroad works in operational areas; 4) Install water diversions on the road alignment designed to minimize erosionin the road reserve and fields; 5) Installation of subsurface runoff filter drains; 6) Provide necessary andadequate drainage works; 7) Increase the number of scour checks and interval of mitre-drains to reduce or avoidcascade effect at culvert outfalls; 8) Avoid materials extraction in or close to human settlement areas whereverpossible; and 9) Protect erosion susceptible surfaces by grassing and stone pitching and/or with mulch or fabric.

Rehabilitation works: 1) Rehabilitate quarries into water points or by replanting vegetation; 2) Promoteroadside tree planting to serve as physical barriers for reducing noise levels.Maintenance works: Cure gullies abutting the road using gabion works.Law enforcement: 1) Enforce air and noise pollution standards; 2) Enforce Section 91 of the Traffic Act, Cap403 of the Laws of Kenya.Prevention and waste disposal: 1) Provide adequately located and maintained latrines and roadside litterdisposal facilities; 2) Create awareness on HIV/AIDS and other related diseases and avail limited health careservices.

ANNEX 6Page 2 of 2

Incorporation of environmental mitigation measures in road contractual agreements

Contract Specifications should include clauses on environmental concerns. In the Proposed ADB Roads 2000Program the environmental clauses amongst others would contractor to: (i) submit to the Roads Engineer a campand site office plan defining all facilities to be created; (ii) limit environmental degradation through minimal oilspillage, reducing dust and gaseous emissions and so on; and (iii) restore all excavated material sites includingquarries by: Preserving trees during materials stockpiling. Planting grass and leveling stripped ground to facilitate water percolation and limit water ponding. Ensuring safety measures for local residents where a quarry has been identified as a watering point for

livestock and people. Planting trees at project ecologically vulnerable sites and maintaining them for a specified period.It is crucial that a record of all mitigation measures implemented be availed by the Contractor to the Chief EngineerRoads for purposes of future mitigation monitoring and evaluation. The EMP outlined in the table 6.1 of theenvironmental impact assessment report is in respect of the environmental concerns, which have been derived fromthe potential impacts whose mitigation measures are tabulated in Chapter 5 of the same report. The EIA report willbe used as one of the reference documents for project implementation.

d) Monitoring program and complementary initiatives

Monitoring and auditing are conducted to ensure that potential project impacts are minimized through adequateimplementation of mitigation measures and also to provide early warning on unforeseen impacts. Some of the keyparameters for monitoring and auditing in the Roads Maintenance Program include: 1) Erosion of the road, theroad reserve and the immediate environs; 2) Water quality in critical water resources affected by road construction,rehabilitation and maintenance; 3) Vegetation, assess encroachment on forested areas by non planned economicactivities, especially new clearing for cropping, and homestead development; 4) Traffic accidents in order toimprove road signing; and 5) Diseases such as malaria and schistosomiasis, especially around not rehabilitatedborrow sites.

e) Institutional arrangements and capacity building requirements

The EMP outlined in the table 6.1 of the EIA report indicates in details the institutions charged withimplementing each mitigation measure and the institution charged with monitoring the implementation of themitigation measure. The table indicates the institutions responsible for implementing and monitoring theEnvironmental Management Plan. These institutions include: DRE, KWS, MOTC, CER, PWOs, MRPWEnvironmental Unit, etc…

f) Public consultations and disclosure requirements

During the road selection in each district, during project preparation and design, and during the EIA reportstudies, extensive consultation with local authorities and stakeholders were carried out.

g) Estimated costs

There are two types of impacts in this road project according to the location considered: 1) the impacts that arein the road right of way, for which the cost is integrated in the overall project design and costing; 2) and theimpacts that are out of the right of way, for which the local government will make the necessary arrangementsfor mitigation.

h) Implementation schedule and reporting

Implementation of the mitigation measures necessarily follow the rehabilitation of the road sections as there aretwo types of activities fully integrated.

ANNEX 8

KENYAROAD 2000 – DISTRICTS RURAL ROADS REHABILITATION PROJECT

List of Annexes in Project Implementation Document (PID)

1. Kenya at a glance

2. Project Maps

3. Detailed Project Costing and Provisional List of Goods and Services

4. Summary of Project Cost by Component

5. Summary of Procurement Arrangements

6. Project Implementation Schedule

7. Supervision Plan

8. Main Road Network and Vehicle Fleet

9. Traffic Demand and Road User Prices

10. Detailed Economic Analysis

11. Road Accident Statistics

12. Geometic Design Standards for Roads

13. Environmental and Social Impacts Assessment

14. HDM-IV Results for Link Roads per District Network

Documents

ROADS 2000-DISTRICTS RURAL ROADS REHABILITATION · PDF file · 2013-03-19ROADS 2000-DISTRICTS RURAL ROADS REHABILITATION REPUBLIC OF KENYA ... Trans Mara, Narok and Kajiado Districts)