Document ofThe World Bank

Report No: 24050-STV

PROJECT APPRAISAL DOCUMENT

ONA

PROPOSED LOAN AND CREDIT

IN THE AMOUNT OF US$ 3.0 MILLIONAND SDR 2.4 MILLION (US$ 2.91 MILLION EQUIVALENT) RESPECTIVELY

TO SAINT VINCENT AND THE GRENADINES

FOR THE

EMERGENCY RECOVERY AND DISASTER MANAGEMENT PROJECT

IN SUPPORT OF THE SECOND PHASE OF THEORGANIZATION OF EASTERN CARIBBEAN STATES

EMERGENCY RECOVERY AND DISASTER MANAGEMENT PROGRAM

May 9, 2002

Finance, Private Sector and Infrastructure DepartmentCountry Management Unit--LCC3CLatin America and Caribbean Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective May 31, 2001)

Currency Unit = EC$EC$ 1.0 = US$0.37

US$1 = EC$ 2.7

FISCAL YEARJanuary 1 -- December 31

ABBREVIATIONS AND ACRONYMS

APL Adaptable Program Loan (World Bank)CAS Country Assistance Strategy (World Bank)CIMH Caribbean Institute for Meteorology and HydrologyCMO Caribbean Meteorological OrganizationDDC District Disaster CommitteeEOC Emergency Operations CenterGoSVG Government of St. Vincent and the GrenadinesIBRD International Bank for Reconstruction and Development (World Bank)ICZM Integrated Coastal Zone ManagementIDA International Development Association (World Bank)LHDC Land and Housing Development CorporationMEYS Ministry of Education, Youth and SportsMFP Ministry of Finance and PlanningMHE Ministry of Health and the EnvironmentMTST Ministry of Telecommunications, Sciences and TechnologyMTWH Ministry of Transport, Works and HousingNDPC National Disaster Preparedness CoordinatorNDP National Disaster PlanNEAC National Emergency Advisory CouncilNHMC National Hazard Mitigation CouncilNMS National Meteorological ServiceOAS Organization of American StatesODP Office of Disaster PreparednessOECS Organization of Eastern Caribbean StatesPC Project CoordinatorPCU Project Coordination Unit

Vice President: David de FerrantiCountry Manager/Director: Orsalia Kalantzopoulos

Sector Manager/Director: Danny M. LeipzigerTask Team Leader/Task Manager: Bernard A. Becq/Amaud M. Guinard

ST. VINCENT AND THE GRENADINESEMERGENCY RECOVERY AND DISASTER MANAGEMENT PROJECT

CONTENTS

A. Program Purpose and Project Development Objective Page

1. Program purpose and program phasing 32. Project development objective 43. Key performance indicators 5

B. Strategic Context

1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 62. Main sector issues and Government strategy 63. Sector issues to be addressed by the project and strategic choices 94. Program description and performance triggers for subsequent loans 10

C. Program and Project Description Summary

1. Project components 102. Key policy and institutional reforms supported by the project 123. Benefits and target population 134. Institutional and implementation arrangements 13

D. Project Rationale

1. Project alternatives considered and reasons for rejection 152. Major related projects financed by the Bank and other development agencies 173. Lessons learned and reflected in the project design 184. Indications of borrower commitment and ownership 195. Value added of Bank support in this project 20

E. Summary Project Analysis

1. Economic 212. Financial 213. Technical 214. Institutional 225. Environmental 246. Social 257. Safeguard Policies 27

F. Sustainability and Risks

1. Sustainability 272. Critical risks 283. Possible controversial aspects 30

G. Main Loan Conditions

1. Effectiveness Condition 302. Other 30

H. Readiness for Implementation 31

I. Compliance with Bank Policies 31

Annexes

Annex 1: Project Design Summary 32Annex 2: Detailed Project Description 39Annex 3: Estimated Project Costs 45Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 46Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary 51Annex 6: Procurement and Disbursement Arrangements 52Annex 7: Project Processing Schedule 63Annex 8: Documents in the Project File 64Annex 9: Statement of Loans and Credits 65Annex 10: Country at a Glance 67

ST. VINCENT AND THE GRENADINESEmergency Recovery and Disaster Management Project

Project Appraisal DocumentLatin America and Caribbean Region

LCSFU

Date: May 9, 2002 Team Leader: Arnaud Marie GuinardCountry Manager/Director: Orsalia Kalantzopoulos Sector Manager/Director: Danny M. LeipzigerProject ID: P069923 Sector(s): BY - Other Public Sector Management, MY -

Non-Sector SpecificLending Instrument: Adaptable Program Loan (APL) Theme(s): Public Sector

Poverty Targeted Interventioii: N

Program Financing DataEstimated

APL Indicative Financing Plan Implementation Period Borrower(Bank FY)

IBRD/IDA Others Total Commitment ClosingUSS m % US$ m US$ m Date Date

APL 1 19.57 82.3 4.22 23.79 01/31/1999 06/30/2003 St. Kitts & Nevis, St. Lucia,Loanl 14.07/ Dominica.Credit 5.50

APL 2 15.99 86.0 2.61 18.60 03/02/2000 01/31/2006 St. Vincent & the GrenadinesLoan/ 8.06 (US$ 6.81 m total); Grenada

Credit 7.93 (US$ 11.79 m total).

APL 3 0.00 0.0 0.50 0.50 Reallocated to APL 2.Loan/ 0.00/

Credit 0.00

APL 4 10.00 83.3 2.00 12.00 01/31/1999 03/31/2005 APL 1 & APL 2 countriesLoan/ 5.00/ following a declared localCredit 5.00 disaster emergency.

Total 45.56 9.33 54.89

[ ] Loan [I Credit [1 Grant [ Guarantee 1 Other:

For Loans/CreditslOthers:Loan Currency: United States DollarAmount (US$m): 3.00 IBRD (Libor-based single currency loan); 2.91 equivalent (SDR 2.4 million) IDA (standardcredit)

Initial choice of Interest-rate basis: Auto. Rate Fixing by amount (specify)US$3.0 million

Type of repayment schedule:[X] Fixed at Commitment, with the following repayment method (choose one): level[ ], Linked to Disbursement

Conversion options: [X]Currency [X]Interest Rate [ ]Caps/Collars:

Financing Plan (US$m): Source Local Foreign TotalBORROWER 0.24 0.66 0.90IBRD 0.60 2.40 3.00

IDA 0.52 2.39 2.91Total: 1.36 5.45 6.81

Borrower: SAINT VINCENT & THE GRENADINESResponsible agency: MINISTRY FINANCE AND PLANNING, ODP, MINISTRY WORKSProject Coordination Unit (PCU)Address: P.O. Box 608, Kingstown, St. Vincent and the GrenadinesContact Person: Mr. Hudson Nedd, Project CoordinatorTel: 1 (784) 457-1746 Fax: 1 (784) 456-2430 Email: cenplan@caribsurf.com

Other Agency(ies):Office of Disaster Preparedness (ODP)

Contact Person: Mr. Howie Prince, National Disaster Preparedness CoordinatorTel: Fax: 1 (784) 457-2152 Email:Ministry of Transport, Works and HousingContact Person: Mr. Alistair Campbell, Deputy Chief EngineerTel: 1 (784) 457-2569 Fax: 1 (784) 457-1289 Email: pwds@caribsurf com

Estimated Disbursements ( Bank FY/US$m):FY 2002 2003 2004 2005

Annual 0.74 2.53 2.21 0.43

Cumulative 0.74 3.27 5.48 5.91

Project implementation period: 3 yearsExpected effectiveness date: 09/15/2002 Expected closing date: 01/31/2006

OS APL PAD F-m P WM 2ZO

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A. Program Purpose and Project Development Objective1. Program purpose and program phasing:

This project for St. Vincent and the Grenadines, along with a similar project for Grenada, approved inOctober 2001, forms the second phase (APL 2) of an Adaptable Program Loan (PAD Report No. 18645LAC) that covers five Organization of Eastern Caribbean States (OECS) member countries. The programaims at strengthening the OECS countries' ability to manage efficiently and effectively emergencysituations, in order to reduce the likelihood of loss of life and assets. The program also aims at enhancingthe capacity of disaster management agencies and mitigate the adverse effects of disasters that regularlystrike the island, in particular floods, landslides, sea surges, and hurricanes. To this end, the program aimsto support the strengthening of physical infrastructure to better weather natural disasters and enhancinginstitutional capacity in order to improve responsiveness once disasters have struck.

The entire program consists of individual lending operations in five OECS countries (Dominica, St. Lucia,St. Kitts & Nevis, Grenada and St. Vincent and the Grenadines). It originally was expected to beimplemented over a period of approximately six years. The program supports the following comprehensiveset of activities:

* Physical prevention and mitigation investments: Key social and economic infrastructure will beprotected and strengthened before disasters strike so as to reduce the likelihood of loss of life andassets--alternatively, they will be rehabilitated or reconstructed in the aftermath of a disaster.

* Capacity building and strengthening disaster management capacity: The capacity of nationalemergency management and disaster preparedness agencies will be strengthened to enable them toperform more effectively.

* Community preparedness: Community-level disaster committees will be organized, trained andequipped to enhance their role in disaster preparedness, mitigation and recovery.

APL 1: The first phase of the program (APL 1) is now well underway in St. Kitts & Nevis, Dominica andSt. Lucia, where credit and loan agreements have been effective since respectively April, June and August1999. By and large, the implementation of these projects has generally been slow at the beginning due to ageneral lack of project management capacity in Governments, the difficulty to coordinate all agenciesinvolved, the lead-time necessary to prepare detailed proposals and complete tender documents, and thelack of proactive management of the procurement process. Implementation is now proceeding satisfactorilyand closing dates have recently been extended.

APL 2: Both projects for St. Vincent and the Grenadines and Grenada under the second phase of theprogram required substantially more funding than was originally allocated for APL2 projects (about US$10 million vs 2 million for Grenada, and about $6 million vs $4 million for St.Vincent and the Grenadines).The needed additional funds (about 10 million overall) have been taken from APL 3, leaving no IBRD andIDA funds for this phase, which has therefore been canceled. Additional funding for the St.Vincent and theGrenadines project is required to strike the proper balance between pilot physical mitigation measures andsupport to strengthening disaster management capacity. The amount for the APL 4 phase --thecontingency funds-- remains identical to maintain the comprehensiveness of the program. The fundingreallocation, as well as changes in the triggers to access the contingency funds under APL4 (see below),were approved by the World Bank Board of Executive Directors on October 17, 2000, when the Grenadaproject was approved.

APL 3: All countries participating in APL 1 and APL 2 require long-term support in order to improvecapacity to prepare and respond to disasters. The APL 3 phase was originally to allow the Bank to providecontinued support for long-term strengthening of disaster management capacity and focus on continuing

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and enhancing the process of community outreach and involvement, and finance additional physicalinvestments for which feasibility and detailed engineering studies will be carried out during APL 1 & APL2. With this phase cancelled for lack of available funds, APL 1 & APL 2 will thus strengthen the capacityof the countries to manage disasters and provide for some preventive physical mitigation measures, andAPL 4 will allow for quick response following an emergency. Should the countries need additionalfinancing for further capacity building in disaster management and preparedness, or for further preventivephysical mitigation measures (which APL 3 would have provided), additional World Bank support wouldtake the form of new and separate projects, and/or supplemental loans and credits. This course of action isjustified on the basis of the slow implementation of APL I projects in all participating countries, andlimited results and progress at this stage, as the APL3 phase was to be conditioned by: (i) the satisfactoryimplementation and completion of APL I or APL 2 (depending on the country); (ii) the evidence ofadequate maintenance of infrastructure (in particular those funded under APL 1 or APL 2); and (iii) theexistence of formal disaster committees and disaster-resilient communities to finance morecommunity-based investments.

APL 4: Through APL 4, the program will make contingent financial resources readily available to theGovernment of any of the five participating countries to assist in restoring, inter alia, critical publicfacilities, should a severe natural disaster strike them during the program period. This phase will run inparallel with APL 1 and APL 2, meaning that as long as a country has signed for either APL 1 or APL 2,they would be eligible to access the contingency funds. The contingency fund was originally to be triggeredby first a declaration of a national disaster emergency by the respective Government seeking to access thefund and its recognition by the international donor community, and second evidence of said Government'scommitment to improving disaster mitigation policies as demonstrated by the effective implementation of itsproject under either APL 1 or APL 2. The first trigger was amended to the declaration of a local disasteremergency by the respective Government seeking to access the fund and recognition by the World Bank ofsuch an emergency, which was approved by the Board in October 2000. This reflects the well-recognizedfact that it is hardly possible for any of the OECS countries to declare a state of national disasteremergency when their economies are so much depending on tourism which would be very negativelyaffected by such declaration for a long period of time.

2. Project development objective: (see Annex 1)

The primary development objective of the project is to strengthen St. Vincent and the Grenadines'resilience, preparedness, and ability to respond to natural disasters.

This objective will be achieved by:* building the capacity of the Office of Disaster Preparedness (ODP) and other concerned public

agencies to perform their respective responsibilities more effectively prior to and during a crisis;* strengthening the country's institutional disaster preparedness and management procedures,

rehabilitating a designated Emergency Operations Center (EOC) which would also serve as ODPheadquarters, and procuring specialized and emergency equipment;

* implementing selected priority mitigation and prevention measures to protect key infrastructure andlifeline facilities before disasters strike, on a pilot basis;

* retrofitting shelters and health centers to improve the safety of the populations, particularly in poorareas;

* improving environmental protection through better standards with regard to disaster management, andenvironmentally-sound prevention measures; and

* promoting community involvement through organizing, training and equipping community disastercommittees, and enhancing their role in disaster preparedness measures, and mitigation and recoveryoperations.

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3. Key performance indicators: (see Annex 1)

The following project performance monitoring indicators will be used to measure project progress andimpact.

Outcome Indicators:* Operational emergency procedures and mobilization guidelines as per international standards in place

by June 2004.* Improved reporting of weather information by the National Meteorological Service (NMS) to the

Office of Disaster Preparedness (ODP) with: a) regularity (at least once daily); and b) quality (verifiedby missions of the Caribbean Meteorological Organization (CMO), Caribbean Institute of Meteorologyand Hydrology (CIMH) or equivalent institution).

* Enhanced ability of ODP to accurately analyze incoming information and data on emergencies andserve as a single "clearing house" for early warning information and dissemination (as evidenced bytimely decision making, the triggering of emergency procedures and timely dissemination of warningsby ODP to populations at risk).

* Increased number of people serviced by adequate shelters due to the retrofitting program.* Strengthened capacity in the Ministry of Transport, Works and Housing (MTWH) to carry out works

during emergencies, and in MTWH and the Ministry of Health and Environment (MHE)Environmental Unit to prepare Environmental Impact Assessments (EIAs) and monitor mitigationmeasures.

Output Indicators:

* Existing National Emergency Advisory Council (NEAC) streamlined by the end of calendar year 2003into a full-fledged National Hazard Mitigation Council (NHMC) through the elaboration of a charterestablishing new procedures and the appointment of new members.

* Adequate staffing and financial resources for the Office of Disaster Preparedness (ODP) in line withthe civil service reform recommendations: (i) "upgrading" before mid calendar year 2004 of theNational Disaster Preparedness Coordinator (NDPC) position to a higher level in the civil servicepay-scale; and (ii) appointment respectively before the end of calendar year 2004 and mid calendaryear 2005 of two additional high level staff in ODP --Technical/Data Specialist and Deputy DisasterCoordinator.

* Draft legislation by mid calendar year 2004 to formalize ODP as an agency with specific authority tocoordinate all disaster management activities and agencies involved during emergencies, and to adoptrevised operational guidelines;

* Training of High-level Government Officials in disaster and emergency management.* At least 72-hour advance warning from NMS to ODP of impending tropical events.* Number of District Disaster Coordinators (DDCs) reached, and reduced response time of those

coordinators to an emergency.* Efficient shelter management procedures in place.* Number of shelters retrofitted.* Number of shelter managers actually from communities.* At least one shelter manager per shelter trained and in place.* Dedicated unit in MTWH capable of erecting on-site metallic bridges of a 10 to 15 meter span in less

than 4 days.* Design standards and monitoring guidelines elaborated; MHE Environmental Unit trained in preparing

EIAs; and MTWH staff trained in monitoring the implementation of mitigation measures.

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* Sea wall reconstructed at Layou.* Flood protection/gabion works at selected river-crossing sites (Georgetown, Buccament, Colonarie)

completed.* Rehabilitation of priority health centers and clinics completed.* Recommendations of studies financed by the project reviewed by Government before December 2003,

and approved recommendations implemented before December 2004.

B. Strategic Context

1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1)Document number: 22205-LAC Date of latest CAS discussion: 06/28/01

The program directly supports the principal goals of the new OECS Country Assistance Strategy (CAS):building human and institutional capacity, and reducing income security and vulnerability at aggregate andhousehold levels --which includes mitigating disaster risks to the extent feasible. As St. Vincent and theGrenadines develops further into a service-based economy, strengthening infrastructure and ensuring theirreliability will become increasingly important, especially to increase the country's resilience to disasters andprevent economic activities from being interrupted. The program is expected to have a tangible povertyreduction impact, both direct through the provision of shelters and health clinics which will benefit thepoorer populations whose houses cannot withstand strong hurricanes, and early warning and bettercommunications which will allow those populations to seek refuge in time, and indirect by reducing theeconomic and social risks, income loss, and vulnerability of the usually more exposed poorer populations.In addition to risk minimization measures and to the strengthening of Governments' capacity to prepare forand manage natural disasters, there is a need for improved availability of affordable catastrophe insurancewhich another Bank-funded project will help providing, and for support to the OECS Governments inmonitoring and managing the effects of global climate changes which a Bank AAA study and a proposedGEF project will assist in identifying.

Economic development. During the 1980s, rapid growth was driven largely by a favorable externalenvironment, characterized by concessional aid flows, which financed a large portion of public investmentsin infrastructure, preferential market access, favorable agricultural export commodity prices, and fastgrowth in the tourism sector. In the 1990's, however, real GDP growth has slowed considerably from anannual average of 6.2% in the 1980s to roughly 3.5% for the following decade. This slowdown in growthhas been largely due to a reversal in the extemal environment, with extemal flows slowing downconsiderably and concessional aid flows declining rapidly. During the 1990s, the main economic trend inSt. Vincent and the Grenadines, as with other OECS countries, has been the rapid transition from anagriculture-based economy to a service-based one, primarily driven by increased tourism. The prospectsfor growth have improved somewhat and real GDP is expected to grow by an annual average of 3.7 % to4.4% over the next five years, due mainly to the expansion of the tourism sector in substitution of theagricultural industry as the main foreign exchange earner. The challenge that St. Vincent and theGrenadines faces is that both of its main foreign exchange sources --tourism and agriculture-- areparticularly vulnerable to natural disasters.

2. Main sector issues and Government strategy:

St. Vincent and the Grenadines is an archipelagic state covering over 10,600 square nautical miles of waterand comprising 32 islands, nine of which are inhabited. The country lies in the Atlantic hurricane belt andhas an active volcano, which last erupted in 1979. It is very vulnerable to floods, and during the lastcentury, it has been struck by four hurricanes, experienced four major floods, and suffered three volcanic

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eruptions. As recently as November 1999, storm surges resulting from Hurricane Lenny served tohighlight the country's vulnerability to hurricanes. While the storm did not inflict severe damages to theisland, it caused significant coastal erosion along the leeward side of the island of St. Vincent. The countryfaces special challenges due to its small size. The country is about 340 sq. km., with a population ofroughly 110,000 inhabitants for the entire archipelago, and had a GNP per capita of US$ 2,720 in 2001.Its mountainous terrain and relatively low population density make the cost of providing and maintainingeconomic and social infrastructure high. St. Vincent and the Grenadines also lacks preparedness and theinstitutional arrangements required to manage emergency situations in an effective manner. In order tominimize the adverse impacts of disasters on economic activity and to protect communities, theGovernment is thus seeking to strengthen the institutions responsible for managing natural disastersituations.

Tourism and Agriculture. Tourism has become the most important foreign exchange earning sector.Agriculture has historically been important, and still represented about 10% of GDP in 2000, but tourismand related activities have shown rapid growth, representing roughly two-fifths of GDP in 2000. Naturaldisasters can, however, have a devastating impact on the tourism industry, since tourists are generally waryabout visiting a country that has been devastated by a tropical storm. In addition, it also takes timefollowing a disaster to rehabilitate the infrastructure needed to serve the tourism industry. However, mosthotels have already protection/evacuation plans and emergency procedures, and are usually the mostproactive in repairing their facilities after hurricanes. Agriculture is also vulnerable to natural hazards dueto its dependence on foreign trade and because it still plays an important role in contributing to thecountry's economic wealth. Exports from the agricultural industry still forms an important source offoreign exchange revenues.

Roads, Transport and Coastal Areas. The transport and communication networks are increasingly vital,in terms of output (comprising over 15% of GDP), and the transport network is vital for transporting bothmerchandise and people, particularly the St. Vincent island road network and the maritime and air linksbetween the main island and the Grenadines. The country's physical infrastructure, especially the roadnetwork and the coastal areas, are particularly vulnerable, as witnessed by the coastal erosion caused bythe storm surges associated with Hurricane Lenny in November 1999. Many populated areas are alsovulnerable to disasters, such as landslides and floods, which not only threatens living conditions, but alsohave a significant negative impact on road conditions and the road network, hence possibly also disruptingroad transport activities. Selective strengthening of roads and bridges in key sections of the network isneeded to help minimize disruptions in transport and economic activities. The rehabilitation of most of themain Western Coast Road has been completed last year with the Government-funded rehabilitation of theLayou to Wallilabou section. The main Eastern Coast Road will be rehabilitated under a large program ofcivil works to be partly financed by the European Union (EU). The program is expected to include bridgesrepairs at key locations such as Argyle, Gorse and Georgetown, a bypass road in Mount Grenan, anddrainage and flooding protection, as well as studies of options for the Byera tunnel, and the crossing of theRabacca river.

Shelters. Government has identified the existence of safe and hurricane resistant shelters and healthcenters as key to disaster management. Shelters and health centers are currently not hurricane resistant,and not adequately managed. There is a lack of clear guidelines with regard to shelter management, noregular training for shelter managers, and they are also poorly equipped for effective functioning during anemergency (i.e. lack of generators, water supply, etc.). In addition, shelter managers also tend to be schoolprincipals, who may not reside within the community where the shelter is located.

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Community Involvement in Disaster Management. While District Disaster Committees (DDC) exist,they are not well trained, have weak mobilization capacity to handle emergencies, and are not properlyequipped to effectively deal with emergency situations. Currently, DDCs exist at the local level, but theyare purely voluntary and do not coordinate with the local level Government structures for disastermanagement. They tend to act as "relief' committees rather than committees that can play an active role indisaster preparedness and mitigation. There is thus a need to restructure these committees, institutionalizethem, and facilitate better cooperation between them and local Government structures.

Public Sector Capacity. Expertise in the public sector is generally quite limited with regard to disastermanagement, in spite of the existence of a dedicated disaster management agency (ODP). ODP is currentlystill critically understaffed, with only one professional staff on a part-time basis, and is not housed in anappropriate office. The main disaster management inter-Governmental structure, NEAC, has no realdecision-making power, includes too many sub-committees with unclear mandates to be effective, hence theneed for a less bureaucratic and more operations-oriented institutional framework.

The lack of capacity within the public sector institutions with regard to disaster management is alsoreflected in the fact that: (i) there is little planning for disaster investments and a lack of proactive efforts toimprove preparedness measures; (ii) the national disaster plan dates back to 1986, making it operationallyoutdated, and it has no legal authority; (iii) disaster emergency procedures are not regularly tested; (iv)there is a need for better collaboration between all stakeholders, and for all to be closely associated withemergency measures (e.g. disaster committees, community leaders and organizations); (v) there are no realregulations to prepare and/or enforce zoning and new building code; and (vi) there are no early warningsystems, as well as a lack of good emergency communications.

Government Strategies. The Government's strategy to strengthen disaster management capacity is toadopt and implement institutional measures aimed at improving preparation for and response to disasteremergencies, increase staffing in concerned agencies and implement a comprehensive training program, andput in place sustainable procedures to ensure quick response in case of natural disasters. The main thrustsof the Government's strategy are to:

* strengthen the human resource capacity of ODP through the appointment of qualified professionals inpermanent positions financed by Government;

* improve disaster planning and preparedness, and operational emergency procedures;* institutionalize disaster management into mainstream Government functions, in particular through

specialized technical training for ODP and all concerned branches of Government, as well as otheragencies, the private sector and communities;

* sensitize communities to disaster preparedness and mitigation to demonstrate the effectiveness ofproperly organized committees representing all sectors of the community such as churches, schools, thebusiness community, etc.;

* designate and renovate the building that will house the national EOC and serve as the headquarters ofODP.

* operate the existing NEAC as a full-fledged National Hazard Mitigation council (NHMC), with newprocedures and members consisting of high level representatives from each of the concerned ministriesand agencies and from the private sector; and

* increase investments in mitigation and prevention measures.

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3. Sector issues to be addressed by the project and strategic choices:

The Government's key priority areas are: (i) the strengthening of the institutional capacity of ODP andother institutions concerned with disaster management; (ii) the protection of the populations duringemergencies through a program to retrofit shelters, particularly in poorer areas; (iii) the protection of keylifeline facilities to avoid disruptions of economic activities; (iv) the improvement of the access ofpopulations to health care after emergencies; and (v) the protection of the populations who are particularlyexposed to storm surges and floods, and in particular those living along the main Eastern Road due to theundersea Kick-em Jenny volcano threat.

The project will support these objectives by focusing on two strategic activities, namely (i) strengtheningdisaster management capacity through institutional development and capacity-building measures, includinga comprehensive training program available to staff involved with disaster management in all concernedagencies, and support to strengthening community involvement in disaster preparedness, mitigation andresponse; and (ii) preventive physical mitigation, focusing on selected priority investments and pilotmeasures, and the engineering and feasibility studies necessary to prepare for more extensive worksprograms.

The strengthening of disaster management capacity aims at addressing the capacity issues and improvingthe country's preparedness and response to natural disasters. In St. Vincent and the Grenadines, thiscapacity is particularly weak in ODP --the principal Government agency dealing with disasters-- which isill-organized, suffers from inadequate staffing, lacks resources, and does not possess a dedicated officebuilding. The project will support the creation of a well-staffed and well-equipped ODP with a mandate,legal authority and adequate procedures to prepare for and manage emergency situations, and housed in anappropriate structure where the EOC would also be located. It will also assist in implementing acomprehensive training program open to all Government staff and communities leaders involved in disastermanagement, as well as strengthening the Government capacity with regard to environmental guidelines andmonitoring. Additional priorities, to be supported by the Project and aimed at improving early warning,include the setting up an effective emergency communications system between ODP, concerned agenciesand communities, and the strengthening of the weather monitoring and reporting functions of the NationalMeteorological Service (NMS) under the Ministry of Telecommunications, Science and Technology(MTST).

An important aspect to protect populations is the retrofitting of shelters, which ensures that the bulk of thepopulation (particularly the poor living in vulnerable homes) has access to safe accommodation during andimmediately following a natural disaster. Thus a number of shelters in high density and high vulnerabilityareas will be retrofitted and shelter management operations improved. District Disaster Committees(DDCs) are at the core of the strategy to respond to and manage disasters and emergencies at thecommunity level. Their capacity, however, needs to be strengthened in order to prepare community disasterplans and organize community activities related with disaster prevention and mitigation.

The preventive physical mitigation measures are all intended to help maintain the smooth functioning of theisland during an emergency, and protect areas where there is a high concentration of population andeconomic activity at risk. To this end, Government intends to first and foremost address the critical issueof maintaining access in the St. Vincent island which largely depends on road transport. The two keymeasures are to protect priority roads and bridges from floods, and to preserve coastal areas --where mostof the population lives-- from sea surges. The sea defense works at Layou will serve to protect animportant and currently very vulnerable town center on the western side of the island. Other selectedphysical mitigation measures under the project are intended to test --on a pilot basis before all the necessary

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studies are completed-- flood protection measures. In addition, providing metallic bridges, gabions andtechnical assistance to MTWH is necessary to improve its ability to effectively intervene to keep thecountry functional during emergencies, while also enabling it to conduct quality repair works immediatelyafter disasters. Finally, the rehabilitation of priority health centers will help maintaining an adequatemedical response during emergencies.

4. Program description and performance triggers for subsequent loans:

The detailed program description is provided in Section A. 1 of this document. The table below outlines thetriggers for additional investments in all countries participating in the APL program, and the triggersrequired for APL 4 to be effective.

Loan Type Triggers to activate loan/credit

Subsequent 1 . Satisfactory and on-time completion of physical investments within budget, and withloans/credits adequate technical quality under APLI and APL2.and/or 2. Evidence of adequate maintenance of infrastructure vulnerable to disasters.supplemental 3. Fully staffed disaster management agencies (ODP in St. Vincent and the Grenadines)loans/credits to with clear mandates and sufficient human and financial resources.APL1 and/or 4. A program of preparedness and mitigation activities at the national and communityAPL2 levels, including a complete National Disaster Preparedness and Response Plan for(APL3 natural and man-made disasters.canceled) 5. An operational plan within disaster management agencies (ODP in St. Vincent and the

Grenadines) to carry out disaster awareness, preparation, and response trainingactivities at the community level, including at schools and private businesses.

6. A fully staffed meteorological service (National Meteorological Service in St. Vincentand the Grenadines) with a clear mandate and sufficient human and financial resourcesto issue timely weather and flood warnings, as well as an operational island-wideemergency communications systems to transmit the information to communities andbusinesses.

APL 4 1. Declaration of a local disaster emergency by Government, and approval by the Bankafter consultations with the international community.

2. Satisfactory implementation progress of the projects under APL 1 and/or APL 2.

C. Program and Project Description Summary

1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed costbreakdown):

The St. Vincent and the Grenadines project will consist of two major components: (A) strengtheningdisaster management capacity, aimed at improving the country's capacity to prepare for and respond todisaster emergencies through technical assistance, training, the rehabilitation of a Government-ownedbuilding into an Emergency Operations Center (EOC) and headquarters for ODP, and the procurement ofspecialized equipment, emergency supplies and rescue tools; and (B) preventive physical mitigation, aimedat minimi7ing disaster-caused damages through selected priority and pilot preventive infrastructureinvestments and associated supervision services, as well as the necessary preliminary studies to assess

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disaster-related risks, elaborate comprehensive long-term mitigation investment programs, and preparedetailed designs for critical priorities to be subsequently financed. It will also include a projectmanagement component to assist Government in discharging its overall coordination, financialmanagement, auditing, procurement, works supervising, environmental monitoring, and reportingresponsibilities.

Initially, as outlined in the original PAD prepared for APL 1, the program sought to differentiate andsupport the funding of both institutional strengthening and capacity building. Institutional strengtheningwas defined as measures aimed at improving the regulatory framework as it applies to disaster planningand mitigation (such as improving the regulatory framework, developing a national building code, disasterinsurance, hazard analysis and vulnerability mapping), and strengthening disaster management capacitysought to strengthen the capacity of national institutions responsible for disaster preparedness, mitigationand management (such as staffing, training, and equipment for disaster-related agencies).

APL 2 has been slightly restructured to focus primarily on strengthening disaster management capacityrather than on institutional strengthening as defined above due a number of factors. First of all, there was ageneral lack of details in the documentation of the proposals discussed for funding under the Bank project,and most tender documents remained incomplete. Second other donors and organizations that already havesubstantial experience and a long involvement in disaster management in the region, and have adaptedfunding mechanisms for regional activities, have expressed a willingness to continue financing suchactivities under the framework provided by the APL program. Third, the country's inability to implementand enforce regulatory reforms does not allow for activities aimed at institutional reform --such as hazardmapping and zoning regulations-- to be pursued before the Government's enforcement capacity has beenenhanced. Finally, the Bank project has been streamlined to reflect the current weak capacity of ODP, thenational institution responsible for disaster management.

Component A of the Project, Strengthening Disaster Management Capacity, will include foursub-components: 1) Institutionalizing and strengthening the Office of Disaster Preparedness (ODP),including inter alia elaborating/revising emergency procedures, rehabilitating the newly-dedicatedEmergency Operations Center (EOC) and ODP office, procuring specialized equipment, emergencysupplies and rescue tools, and developing and implementing a comprehensive disaster management trainingand public awareness program; 2) Developing emergency communications and improving meteorologicalassessment capacity on a country-wide basis, including technical assistance and training, and theprocurement of specialized equipment; 3) Implementing a shelter program, including technical assistance,training, and the retrofitting of selected public buildings; and 4) Capacity-building in the Ministry ofCommunications and Works (MTWH) to effectively respond to disaster emergencies through training andthe procurement of strategic stocks of prefabricated metallic bridges and gabions, and strengthening theenvironmental capacity of MTWH and the Environmental Unit of the Ministry of Health and theEnvironment (MEH) through training and technical assistance to establish standards and guidelines, andmonitor mitigation measures.

Component B, Preventive Physical Mitigation, will include four sub-components: 1) river floodingprotection through civil works and gabionage to protect selected river crossings against floods and stormsurges and the associated design review and supervision services, and a feasibility and design study todefine priority river training and river flood protection investments; (b) coastal erosion protection throughminor priority sea defense works at Layou and the associated design review and supervision services, andan Integrated Coastal Zone Management (ICZM) study to define a prioritized sea defense and roadrealignment investment program and to elaborate the corresponding design; (c) flood control through acomprehensive drainage improvement, flood control and watershed management study to design an optimal

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storm drainage system for the Kingstown area; and (d) health centers and clinics through a program toretrofit priorities.

Component C, project management, includes the funding of: 1) the specialists to be recruited in the PCU(financial manager/accountant, procurement specialist and part-time disaster management specialist) andtraining of Government staff appointed to the PCU; 2) office equipment and project vehicles; 3)independent yearly financial audits, and selective technical audits; and 4) operating expenditures, includingcommunications services and secretarial support.

Total costs for the project's components are listed below.(Bank financing is to be understood as the total under the IBRD loan and the IDA credit, and including the US$ 30,000front-end fee).

Indicative Bank- % ofComponent Sector Costs % of financing Bank-

(US$M) Total (US$M) financingA. Strengthening Disaster Other Public Sector 3.34 49.0 2.95 49.9Management Capacity ManagementB. Preventive Physical Mitigation Non-Sector Specific 2.77 40.7 2.35 39.8C. Project Management Other Public Sector 0.70 10.3 0.61 10.3

ManagementTotal Project Costs 6.81 100.0 5.91 100.0

Front-end fee 0.00 0.0 0.00 0.0Total Financing Required 6.81 100.0 5.91 100.0

2. Key policy and institutional reforms supported by the project:

Institutional reforms will be sought in the area of disaster preparedness, prevention and mitigation, inparticular through various capacity-building measures, namely: (i) enhancing the capacity of ODP toperform its role effectively and in a timely manner, in particular through appropriate staffing and arecognized authority to act; (ii) ensuring that the National Disaster Plan (NDP) is updated and disastermanagement procedures are in place; (iii) formulating a national environmental protection policy andguidelines, and strengthening the institutional capacity --in particular in MTWH-- to preserve theenvironment; and (iv) protecting and maintaining infrastructure facilities through increased funding formaintenance, improved construction standards, better capacity to enforce disaster mitigation regulations,and enhanced MTWH capacity to quickly react during emergencies.

The overall Government program aims at financing initiatives to enhance preparedness to manage futureemergency situations in the long-term. To address pervasive flooding and coastal protection issues, thisfirst project in support to the overall program will finance engineering studies to prepare investmentprograms. The rest of the program includes activities which would be funded by other donors or under anext phase of the program, including inter alia hazard analysis, vulnerability mapping and risk assessment;building legislation; and seismic and volcano monitoring. In addition, all investments on the Eastern Coastare incorporated in an EU-financed rehabilitation program.

Government is committed to reducing its vulnerability to natural disasters through further reforms andrestructuring actions, in particular regarding staffing and training, awareness and information. To this end,Government would during the life of the project take action with regard to inter alia: (i) appointing afull-time NDPC as a high-level civil servant with the unique function of bringing together diverse groups to

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promote disaster mitigation, stimulate preparedness and to coordinate relief operations; (ii) staffing ODP(now under the Prime Minister Office) with professional and permanent civil servants; (iii) developing anappropriate institutional process to engage/mobilize all parts of society and stakeholders in disasterpreparedness and emergency management; (iv) engaging business and industry resources to support publicprojects; and (v) encouraging the private sector to develop plans to protect their own productive capacity.In addition, Government will with direct support from the Project: (i) undertake disaster-related trainingand drills in order to improve emergency management skills; (ii) draft and support laws and regulations tostrengthen national and community disaster awareness and protection; and (iii) improve the degree ofpreparation of MTWH to respond to emergency situations and its capacity to quickly proceed with theremoval of debris to reopen road transport infrastructure and carry out repairs.

3. Benefits and target population:

The main benefits of the project would be to: (i) ensure that people can move quickly to safe areas (such asshelters) thanks to better emergency procedures, improved early warning, and a new communicationssystem; (ii) protect assets through the rehabilitation of selected infrastructure and the retrofitting of publicfacilities (shelters and clinics) to better withstand disasters; (iii) contribute to gradually decreasing the costof disasters through improved response capacity and appropriate infrastructure protection; (iv) facilitateprotecting the environment, and raise awareness and capacity in this regard; (v) increase the effectiveness,timing and coordination of interventions during and following disasters; and (vi) carry out the necessaryengineering and feasibility studies to prepare a comprehensive preventive mitigation program for thecountry.

The main beneficiaries will be the population at large who will benefit from improved disasterpreparedness, in particular through enhanced early warning and better and quicker meteorologicalinformation, and revised emergency procedures. They will also benefit from improved Governmentalcapacity to intervene and carry out more rapidly the rehabilitation/reconstruction of damagedinfiastructure. Some populations will benefit from the minimization of the disruption of economic activitydue to the prevention and mitigation works financed under the project in selected areas, and more securedaccess to health care during disasters. The project will also benefit many lower income groups as it willimprove access to the safety of retrofitted shelters in the most risk-prone areas, which are usually inhabitedby poorer sections of the population. The involvement of local communities through the disastercoordination committees will ensure that people can move quickly to safe areas and shelters if a disasterstrikes. Government agencies, such as ODP, the Central Planning Division and the Physical PlanningSection of the Ministry of Finance and Planning (MFP), and other implementing agencies, especiallyMTWH, will benefit from capacity building through training and technical assistance.

4. Institutional and implementation arrangements:

Institutional arrangements have been streamlined to account for lessons from the implementation of APLIprojects, in particular the difficulty to coordinate too many implementing agencies. They are mainly basedon the establishment of a full-fledged Project Coordination Unit (PCU) to coordinate and manage theproject, and the devolution of part of the implementation responsibility --under the monitoring and with theassistance of the PCU-- to only two implementing agencies: ODP and MTWH. In addition, in order tofacilitate the handling of disaster management matters on a sustainable basis, Government will strengthenODP through additional staffing and proper offices, and streamline the current NEAC to serve as a steeringcommittee (NHIC) for policy matters.

The PCU will be responsible for the implementation of the project, including inter alia coordinatingimplementing agencies, keeping financial accounts and files, carrying out and monitoring the procurement

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process, and reporting to the Government and to the World Bank. The implementing agencies will in turnmonitor all activities under their component, including those that may be directly involving other agencies,and coordinate with other concerned stakeholders as may be needed.

Project Coordination and Management.The PCU, which has been set up within the Central Planning Division of the MFP, will be retained duringthe whole duration of the project. It is headed by a Project Coordinator (PC) --to be fully dedicated to theproject, at least during the early implementation phase. The PCU will also include --under project funding--a full time procurement specialist, a full-time financial manager/accountant and a clerical administrativeassistant for the whole duration of the project, and a part-time disaster management specialist (initially fora one-year period to be extended as needed until a second professional staff has joined ODP as committedby Government). Detailed terms of reference for each PCU staff, and a description of the respectiveresponsibilities of the PCU and implementing agencies have been prepared and included in the ProjectImplementation Manual (PIM).

The implementing agencies will work under the auspices of the PCU, and will provide progress reports tothe PCU on a quarterly basis. The PCU will supervise and be ultimately responsible for managing theprocurement and contract management process for all components of the project, and will discharge thisresponsibility in full coordination with the implementing agencies which would retain responsibility forsubstantive matters such as the preparation of terms of reference (TORs) and specifications, engineeringaspects, etc... The PCU will report on a bi-annual basis to the World Bank. Annual performance reviewswill be conducted, with the one to be held during the second year of implementation also serving asmid-term review.

ODP will be the implementing agency for Component A (Strengthening Disaster Management Capacity).In this regard, it will directly manage sub-component 1), while coordinating with NMS for sub-component2) regarding meteorological and communications systems, MTWH and the Ministry of Education, Youthand Sports (MEYS) for sub-component 3) regarding shelters, and with MTWH and the Environmental Unitof MvHE for sub-component 4) regarding the strengthening of the Government emergency response andenvironmental monitoring capacity.

MTWH will be the implementing agency for Component B (Preventive Physical Mitigation). MIHE will beinvolved with MTWH in the management of the sub-component dealing with the rehabilitation of healthcenters and clinics.

Finally, the steering committee (NHMC, ex NEAC) will coordinate country-wide policy issues, approve theselection of priority investments, and help ensure compliance with Government commitments. Thecommittee would consist of representatives of relevant sector ministries involved in the project, as well asrepresentatives from the private sector and NGOs. Government has committed to complete this by the endof calendar year 2003.

Financial Management, Accounting, and Auditing ArrangementsA Financial Management Assessment of the existing financial management procedures, accounting systemand administrative controls of the Ministry of Finance and Planning was carried out and cleared by theWorld Bank in February 2002. To assist with financial management, the PCU has retained aninternationally qualified accountant/financial manager for the duration of the project. The PCU willmaintain two separate accounts for project-incurred expenditures, one account for IBRD/IDA funds (theSpecial Account) and one account for Government's counterpart funds (the Project Account).

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Financial statements and reports will be prepared in formats satisfying the Government and IBRD'smonitoring and fiduciary purposes. On a monthly basis, the PCU will prepare the project's basic Statementof Expenditure, a matrix classifying receipts by financing source and expenditures by financing source anddisbursement category. This report will be submitted to the Office of the Accountant General and to theMFP.

In addition to Statement of Expenditure, the monthly financial reports will include the Special AccountReconciliation Statements. Any difference in the amount of expenditures reported under the two financialstatements must be clearly explained. The project financial statements, along with the physical progress andprocurement sections of the FMRs, will be submitted to the Bank on a quarterly basis, and will besubmitted no later than forty-five (45) days after the end of each quarter. The contents of the FMRs havebeen discussed, and the formats of the reports will be finalized by loan negotiations.

The World Bank also assessed the capacity of the Auditor General to perform the annual independent auditof the PCU. Given the limited resources of the Office of the Auditor General, the audit will be contractedto an external accounting firm according to the Bank's procurement guidelines. The PCU will ensure thatan annual independent audit is carried out and completed by a qualified International Auditing firm, with afinal report issued to the Bank no later than three months after the end of the fiscal year. An audit firmacceptable to the Bank was hired prior to negotiations. Detailed financial management, accounting andauditing arrangements are given in Annex 6.

D. Project Rationale

1. Project alternatives considered and reasons for rejection:

This project forms the second phase of an APL for five OECS countries. The rationale for the entire APLprogram is described in detail in the Project Appraisal Document for the APL 1 (Report No. 18645 LAC),and the program's phasing is described in Section A. 1 of this document.

The first alternative would have been to focus the project on short-term priority measures and help thecountry reduce its vulnerability to hurricanes and mostly finance physical mitigation investments to repairpast damages (particularly those caused by the effects of Hurricane Lenny in November 1999). This quasiad-hoc approach would have limited the assistance impact as it would not have addressed the key issueswhich are to improve the country's preparedness to withstand and manage disasters over the long termthrough both preventive mitigation investments and strengthening disaster management capacity.

A second alternative would have been to finance a more complex project, in particular including aninstitutional strengthening component (as defined in Section C of this document and the original PAD forthe APL 1 phase) with such activities as (i) hazard analysis, vulnerability mapping and risk assessment,building codes and zoning regulations; (ii) seismic and volcano monitoring; and/or (iii) disaster insurance.The first two sets of items were not retained due to the weak implementation capacity within the country,the added difficulty to coordinate the additional implementing agencies that such an approach would haveinvolved, and the low degree of preparation of activities in these areas. In addition, a number of otherorganizations in the region --which are well equipped to intervene in these fields due to their longexperience in the sub-region, and have a proven capacity to exchange best practice and finance suchactivities on a regional basis-- have indicated their willingness to finance these types of activities or arealready doing so. Given the high cost of financing such activities, retaining these under the present projectcould also have been premature as currently there are neither accompanying zoning regulations to enableGovernment to control land use, nor capacity to enforce building regulations. Regarding catastrophic

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insurance, the Bank is currently in the process of finalizing a separate regional loan for the OECScountries.

A third alternative would have been to include in the project additional preventive mitigation investments.It was not retained due to the limited implementation capacity within the country, the generallyinsufficiently justified proposals from both economic and disaster management points of view, the high riskassociated with the fact that most identified priority investments were ill-prepared and not supported byappropriate engineering studies, and the lack of detailed environmental and social impact analysis. Theemphasis has been put on small pilot investments to demonstrate and replicate in further phases. Theproject is part of a larger program which addresses all needs in a phased way and in coordination withother donors who have committed funds for potential investments, hence the timing of disaster-relatedinvestments over the medium to long term.

A fourth alternative would have been to prepare a larger infrastructure sector project based on up-frontpolicy reforms to address the need for restructuring a fairly inefficient public sector, increasinginfrastructure funding and cost recovery, and organizing adequate routine and periodic maintenance whichshould be financed under regular Government budget. This would, however, have proved difficult in thedisaster management and preparedness context where the overarching objective is to focus on strengtheninglong-term disaster management capacity rather than just financing physical infrastructure, and targetpriority investments to prevent or mitigate the impact of disasters. Addressing all infrastructure sectorissues would have resulted in too complex a project and loosing the focus on capacity building in disastermanagement.

The project was designed bearing in mind the need for a balance between capacity-building in disastermanagement and preventive mitigation. A choice was therefore made to include two major components,one to strengthen the country's institutional capacity to manage and respond to disasters, the other to carryout preventive physical mitigation measures. minor preventive civil works have been selected as pilotprojects: sea defenses at Layou, and works to protect critical bridges and culverts against floods at prioritylocations. They aim at minimizing any major devastation from storms and/or sea swells works andsupporting long terrn physical mitigation, and enabling emergency repairs. With the related design andsupervision consultancies, they represent roughly 41% of the total project cost. The remainingexpenditures under the project are largely focused on strengthening key disaster management capacityactivities, including 25% of the total project cost for civil works, namely the retrofitting of priority sheltersand the rehabilitation of the newly-designated EOC and ODP building.

Recognizing the need for a longer term approach to disaster management and prevention, the project willlay the foundation for future financing --under further phases of the program as well as under other donors'programs and Government funding-- of priority needs once they have been properly assessed. Thesefurther initiatives will also provide funding for additional support to long-term strengthening of disastermanagement capacity. This project will finance a series of feasibility and design studies to define phasedprograms of sea defenses, drainage and flood control, and river training and slope protection. Investmentson the Eastern Coast are already incorporated into a comprehensive EU-financed rehabilitation program,and most critical parts of the Western Coast have already been financed. The priorities to be financedunder the next phases of the program and/or future Bank/donors operations will --pending satisfactoryenvironmental impact assessments-- focus on completing priority physical preventive mitigationinvestments such as sea defenses, drainage improvement, and river training.

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2. Major related projects financed by the Bank and/or other development agencies (completed,ongoing and planned).

Latest SupervisionSector Issue Project (PSR) Ratings

(Bank-financed projects only)Implementation Development

Bank-financed Progress (IP) Objective (DO)Strengthen monitoring capacity & Global Environmental Facility S Sanalysis of global climate change to GEF Planning for Adaption todetermine potential impact on coastal Global Climate Changeareas; identify areas vulnerable to Project--I997adverse effects of global climate change (implemented by the& sea level rise. Organization of American

States-OAS, and the CaribbeanCommunity and CommonMarket-CARICOM).

Introduce pro-competitive reforms in OECS: Telecommunications S Stelecommunications sector and increase Project--1998.supply of informatics-related skills.

Protect the environment and reduce OECS: Solid Waste S Spublic health risk. Management Project--1995.

Improve the preparedness and response OECS Emergency Recovery S Sto natural disasters in five OECS and Disaster Managementcountries. Program (APL 1)--1998 for

three countries St. Kitts andNevis, Dominica, and St. Lucia.

Other development agenciesOffice of Foreign Disaster Assistance Institutional support to disaster(OFDA) of the United States Agency preparedness agencies on afor International Development (USAID) regional basis.Caribbean Development Bank (CDB) Sea Defenses in selected areas.United Kingdom Department for Technical assistance for disasterInternational Development (DFID) management.United Nations Development Program Technical assistance to the(UNDP) Caribbean Disaster Emergency

Relief Agency (CDERA).Canadian International Development Technical assistance for disasterAgency (CIDA) management.

IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)

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3. Lessons learned and reflected in the project design:

Bank-wide experience of successful emergency and disaster management programs and previous projectsundertaken in the Caribbean, including the APLl projects, and incorporated into this project are: (i) projectsimplification with fewer components and implementing agencies to facilitate project coordination andimplementation in a weak institutional capacity context; (ii) early dialogue with Government on necessaryinstitutional reforms with regard to disaster management and preparedness, and up-front strong governmentcommitment as evidenced by institutional measures agreed and implemented before negotiations; (iii) moreadvanced and detailed preparation of project components and activities; (iv) clear understanding betweenthe Bank and the Borrower regarding project implementation arrangements, and clear and agreed projectmanagement responsibilities for the coordination unit and the implementing agencies; (v) focus onstrengthening the capacity of existing institutions to effectively discharge their responsibilities with regardto disaster management and preparedness; and (vi) investing in capacity-building measures in this firstphase of the program to increase the Borrower's ability to mitigate the effects of future disasters and avoidad-hoc requests for emergency assistance following disasters.

Specific lessons were derived from the implementation of the APLI projects. First of all, projectpreparation in the prevailing emergency situation resulted in many ill-prepared proposals and henceforthdelays during implementation to complete tender documents and launch activities, and often the need torestructure some components or sub-components. Second, activities earmarked for co-financing withundefined donors resulted in the need for an increased effort for both the Government and the Bank duringimplementation to leverage the required additional resources --sometimes to no avail, leaving a fewactivities not carried out. Third, disaster management projects --which are very complex by nature(multi-sector and new area of assistance)-- cannot be easily implemented in the prevailing context of limitedproject management capacity. Fourth, national institutions responsible for disaster management are stillvery much in infancy and unable to handle all the complex dimensions of project management and thecoordination of too many agencies. Finally, the Bank is better placed to focus on long-term prevention(both institutional and physical investments) than on short-term emergency measures, which other donorsare often better organized to deliver.

While this phase will primarily build the institutional capacity of the country with regard to disastermanagement and emergency response, its preparation has also highlighted weaknesses within variousspecific government agencies to respond to and manage disasters that are fairly similar to thoseabove-captioned. This was very much accounted for in identifying the key investments and capacitystrengthening activities that the project has finally settled on. In addition, the importance of shelters duringan emergency has helped identify related assistance necessary for the use of shelters to be effective.General experience with communications, meteorology and early warning systems has helped structurerelated sub-components in more easily palatable activities. The lack of capacity to coordinate and managethe projects has resulted in more focused technical assistance to ODP, and the general lack of managerialcapacity has influenced the choice to elaborate and implement a comprehensive training program for staffof all concerned agencies, disaster managers and community committees.

This led to streamline the Bank-financed project to focus primarily on capacity-building measures andselected priority preventive physical mitigation investments. Better up-front coordination with donorsallowed a more focused approach to co-financing and the agreement that a number of key activities,particularly those regarding institutional issues (such as the regulatory framework, disaster planning,adoption and enforcement of a new building code, catastrophic insurance, hazard analysis and vulnerabilitymapping) would be implemented within the APL framework under the funding of other donors and/orGovernment using alternative financing resources.

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Specifically, for the five OECS countries covered by this APL, including St. Vincent and the Grenadines,the need for training is of utmost importance to ensure rapid response and effective management of thesituation during and immediately after a natural disaster strikes. Training in Bank procedures, such asprocurement and financial management in particular for the PC and relevant PCU staff, will prove vital toenable successful project implementation. Also, in building the country's institutional capacity with regardto disaster management over time, emphasis is given to technical assistance to ODP and MTWH, and to alesser extent to other implementing agencies, and to on-the-job training. This is aimed at building localcapacity through actively transferring knowledge to local agency staff from experts within Saint Vincentand the Grenadines or internationally recruited. Also, Bank assistance to project preparation through theprovision of documents, and the sharing of best practice and experience, has proven to be crucial.

Another important aspect given special attention to was the Borrower commitment to both the short runimplementation of the current project, as well as the long run sustainability of a disaster managementprogramn. In terms of implementation, the coordination and management role of the PCU vis-a-vis the othergovernment agencies (such as MTWH and ODP in particular) responsible for executing the various projectcomponents, was clearly spelled out to avoid conflicts later on during project implementation. The PCUalso needed a clear mandate enabling it to coordinate various other government agencies, and housing itwithin MFP aided this process.

Regarding disaster management and response, the role and legal authority of ODP has to be more clearlydefined, and Government has committed to institutionalize its existence during the project implementationperiod. Although ODP needs to be able to act independently, it also needs to be backed by Government if itis to act effectively during an emergency. For that purpose, ODP has recently been placed under thetrusteeship of the Prime Minister office. In addition, the response at the local level is also critical, andcommunity involvement via the district disaster committees has been incorporated into the project design toprovide in particular inputs into the streamlining of emergency procedures. Training for both ODP staff,the district disaster committees and communities in disaster management and response will be critical. Inorder to ensure that the shelters are properly utilized and accessible during an emergency, the project hasemphasized the need for shelter managers to be selected from, and preferably living in, the local commnunitywhere the shelter is housed.

Inadequate maintenance of physical infrastructure has also been a key contributing factor to thevulnerability of infrastructure facilities. In the case of St. Vincent, the coastal erosion caused during thestorm surges associated with Hurricane Lenny showed the adverse effects resulting from the lack of properresource management. The Borrower will submit to the Bank, prior to each annual review, an Operationsand Maintenance (O&M) plan and a budget for all relevant physical sub-components financed under theproject.

4. Indications of borrower commitment and ownership:

A higher profile has been given to disaster management following on the impact of Hurricane Lenny inNovember 1999. The new Government -which came on board in April 2001-- has endorsed the approach,and indicated its commitment to reducing the country's vulnerability to natural disasters, and to buildingcapacity in agencies responsible for --or concerned with-- disaster management.

Cooperation among various government agencies will be critical for the smooth implementation of thismulti-sector project. Government has given assurance in this regard to ensuring that the implementingagencies be proactive in assuming control of their respective components. Government has, therefore,

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established the PCU in the Central Planning Division of MFP which has overall responsibility fordonor-funded projects, and a new Project Coordinator from this division has been in place since Fall 2000.

Government has also taken a number of steps during project preparation that demonstrated its commnitmentto the project content and objectives, in particular: (i) the preparation of a draft disaster managementtraining program for all concemed agencies; (ii) the completion of terms of reference for most studies andconsulting services to be recruited under the project; (iii) the preparation of preliminary engineering studiesand bills of quantities for the shelters retrofitting and the health centers and clinics rehabilitation programs,the preliminary design for the renovation of the ODP/EOC building, and the feasibility and preliminarydesign of coastal erosion protection and flood protection civil works; and (iv) the elaboration of a draftImplementation Manual (Project Operations Manual).

The new Government has confirmed the approval by the previous one of the Development ProgramAgreement of the OECS Emergency Recovery and Disaster Management Program, and the signing by theformer Government of the Program Letter for the Adaptable Program Loan. It also confirmed the terms ofthe April 7, 2000, letter which: (i) committed to appoint in the mid-term a deputy National DisasterCoordinator, a Technical Data Specialist, and other clerks in ODP, and to recommend and draft legislationto formalize ODP; and (ii) designated the Land and Housing Development Corporation (LHDC) buildingas both the ODP office and EOC headquarters. In a letter dated September 26, 2001, the Government hasalso indicated its commitment to: (i) appointing before Loan Signing the National Disaster PreparednessCoordinator (NDPC) as a full-time position with a minimum grade of 10 in the civil service scale (to belater "upgraded" to a higher level as part of the ongoing civil service reform); (ii) appointing beforeEffectiveness a Disaster Management Specialist in the PCU who would remain until the ODPTechnical/Data Specialist has been recruited; and (iii) institutional reforms (also in an additional legalcovenant) regarding the streamlining of the existing National Emergency Advisory Council (NEAC) into afull-fledged National Hazard Mitigation Council (NHMC), the amendment of the legislation regardingODP and disaster management activities and agencies, and the staffing and financing of ODP in line withthe civil service reform recommendations.

In addition, Govemment indicated that it intends to: (i) update the National Disaster Plan (NDP),streamline the emergency operating procedures, and review the conditions for calling both a local andnational state of emergency; and (ii) prepare a plan for coordinating the roles of governmnent agencies,private sector and volunteers in the early warning/emergency communications systems.

5. Value added of Bank support in this project:

Disaster Mitigation Experience. The Bank has gained experience, particularly over the last five years, inpreparing and monitoring the implementation of a number of emergency and disaster mitigation projects,including for floods, cyclones, and El Nino effects throughout the Latin America and Caribbean Region, aswell as in other developing countries outside this region. The lessons and best practices from theseexperiences are being applied to this project. Throughout project preparation, the project team liaisedclosely with the Bank's Disaster Management Facility (DMF) on disaster management related issues.

Regional OECS Projects. The Bank has already worked on a number of regional projects for theOECS/CARICOM countries and has established strong working relationships, as well as experience incoordinating regional efforts.

External Expert Advice. The Bank project team liaised and coordinated with several international andnational agencies in practical, operational and state-of-the-art approaches to emergency management. The

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Bank team also drew upon the experience of donor agencies, in particular the Organization of AmericanStates (OAS) and the USAID Office of Foreign Disaster Assistance (OFDA).

Donor Coordination. The project has been designed in collaboration with international organizations andbilateral donors, including inter alia the CDB, UNDP, OAS, PAHO, USAID/OFDA, DFID, CIDA. TheDutch trust fund was used to finance the use of some consultants during project preparation.

E. Summary Project Analysis (Detailed assessments are in the project file, see Amnex 8)

1. Economic (see Annex 4):* Cost benefit NPV=US$26.328 million; ERR = 46.7 % (see Annex 4)O Cost effectivenessO Other (specify)

Given the non-revenue generating nature of the project, benefits are estimated based on expected damagesaverted due to the investments pursued in this project. Expected benefits are a combination of physicallosses avoided, and the costs of lost economic activity and disruptions in social welfare minimized. Theanalysis includes the costs and expected benefits of the minor coastal and flood protection works andrehabilitation works for health centers and clinics (under the preventive physical mitigation component),and the shelters retrofitting and reconstruction of the ODP and EOC (under the strengthening of disastermanagement capacity component). The economic analysis is described in greater detail in Annex 4.

The NPVs and ERRs shown below are for the base-case scenario, which assumes (i) that the objectiveprobability of a major hurricane striking St. Vincent and the Grenadines is at least 10% per year (this is thelower bound of the probability range estimated by the U.S. National Ocean and AtmosphericAdministration), and (ii) that the minimum damage averted due to the project's investments equals a 10%value of GDP. In Annex 4 the expected benefits are also subjected to sensitivity analysis by varying theprobability of a hurricane striking the island and simultaneously varying the value of damages averted (as apercent of GDP).

2. Financial (see Annex 4 and Annex 5):NPV=US$ million; FRR = % (see Annex 4)

This analysis is not applicable, since it is a non-revenue generating project.

Fiscal Impact:

The fiscal impact is expected to be limited, with government counterpart. funding amounting to less than1% of GDP per year during construction, and a negligible amount in post-project years. The effect on thecountry's debt position is also expected to be minimal given the IBRD/IDA blend nature of the financing.Of greater concern is the capacity within government to undertake the project, and maintain momentumonce the project is completed.

3. Technical:River Flooding: the reconstruction of gabion walls and protection works for selected bridges is based onsound and simple engineering design, taking into account the need for environmental mitigation measures toavoid any damage to the river basins downstream and the surrounding settlements. A study will be carriedout to prepare a national program of priority bridges repairs, and flood protection and river training works,bearing special attention to environmental and social aspects.

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Coastal Erosion: the technical design of the sea defense at Layou is based on existing sea defenses in St.Vincent and the Grenadines and the region, including designs for similar works in other countriesparticipating in the Emergency Recovery and Disaster Management Program. A feasibility and designstudy (Integrated Coastal Zone Management-ICZM) will be carried out to prepare a national program ofpriority sea defense and road realignment investments.

Drainage and flood control: no works are actually financed under the project, as most proposals were toosketchy and no technical solution to the overall Kingstown watershed and storm drainage system issues hasbeen elaborated. The study to prepare a comprehensive drainage improvement, flood control and watershedmanagement program for all sub-basins of Kingstown, South River and Kingstown North River, will focusinter alia on run-off and drainage analysis, and environmental aspects.

Construction design standards and civil works specifications: the design of the rehabilitation/retrofittingworks, for both the shelters and the health centers and clinics, is based on design standards compatible withother OECS countries, especially the specifications established by USAID/OFDA and OAS under theCDMP program. The renovation of the existing shelters and the rehabilitation of the health centers andclinics are based on materials specifications and construction techniques aimed at ensuring that structureswill be resistant to hurricanes. The shelters' renovation also takes into consideration the minimumrequirements needed for the well being of the tenants. The selection of the shelters to be retrofittedprioritizes areas of high population density which are more at risk and usually among the poorest in thenation, while taking into account the costs of the works to be undertaken.

Reliability of cost estimates: the project cost estimnates are based on detailed engineering cost breakdownsand the result of past bidding processes carried out for similar works in the island during the last five years.

Capacity of the local construction industry: three or four large construction firms have the capacity tocarry out significant infrastructure works, purchase materials and manage construction contracts. About200 or so "local operators" carry out the majority of maintenance work for the Government, where theGovernment purchases the materials, and give labor contracts to the operators. The maximum value ofthese labor contracts is about EC$ 20,000 For housing construction, there are eight or nine largeconstruction firms who have the capacity to purchase materials and carry out construction, and another 100or so local operators working with labor contracts. This capacity will be adequate with regard to the scopeand quantity of works to be implemented under the proposed Bank-financed project.

4. Institutional:

4.1 Executing agencies:

Government has engaged on an effort to down-size its 5,700 strong civil service through the redeploymentof civil servants, particularly at the middle and lower levels, with the assistance of a EU Stabex-fundedinstitutional development program.

Government's experience with and capacity to handle the management of complex and multi-facetedprojects is quite limited. This is mostly due to under-staffing in a number of agencies, the lack of staffexperienced in project management at all levels, and the lack of well-defined mechanisms and procedures.The capacity issue is particularly acute with regard to managing donor-funded projects.

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MTWH, which is inter alia responsible for all infrastructure-related matters and often acts on behalf ofother Ministries in this regard, has demonstrated little capacity during project preparation to complete in atimely manner the tasks that were entrusted upon it. Its Public Works Department --which is organizedhorizontally, meaning that professional staff work on different sectors as needed-- has, however, somepotential to deliver, provided that Government exerts its influence to mobilize resources and prioritizetasks.

ODP has been somewhat involved in project design by helping to identify communications gaps and needsregarding equipment and supplies, but contributed little to the detailed project preparation. The structure isparticularly weak in the OECS context, with a National Disaster Coordinator only recently recruited, andpreviously under the trusteeship of the Ministry of Housing with offices located in a very inappropriate andunequipped office. As a result, the country does not benefit from an effective disaster preparedness system,and capacity at the community level must be urgently built to prepare for and respond to disasters. Therole of the district disaster coordinators and committees in particular would have to be strengthened.

4.2 Project management:

Both ODP and line ministries are stretched too thin to effectively manage the project, and are alsoconstrained by their current staffing and organizational structures. Capacity-building with regard toproject management is thus of the essence, but difficult to achieve due to the small size of the economywhich cannot easily sustain the necessary critical mass of expertise in administrative and managerialservices. The lack of capacity issue is the main rationale for creating a PCU to be operated during thewhole project implementation period, the idea being to mainly recruit local staff and train them in projectmanagement matters, including procurement and financial management. This would eventually form thebasis for a longer-term solution to the issue of limited Government capacity in project management.

A Procurement Assessment was carried out during project preparation, and approved by the Bank'sRegional Procurement Advisor in February 2000. The procurement and contracting of contractors,suppliers, and consulting firms will follow World Bank guidelines. The PCU will be responsible for theprocurement and management of contracts, while the implementing agencies --which have been involvedduring project preparation in designing the various sub-components and activities -- will providesubstantive inputs to tender documents (terms of reference for consultancies, lists and specifications forgoods, design and specifications for works) and be involved in the day to day supervision of the activitiesand management of implementation issues.The publication of the General Procurement Notice (GPN) will take place before Effectiveness.Advertisements of Bidding Documents and Requests for Proposals (RFP) as well as Special ProcurementNotices (SPN) --if required-- will be published in Development Business and national newspapersrespectively for all ICB works and for studies estimated to cost over US$ 200,000. The preliminary designand environmental impact assessment for the sea defense and gabion protection works have been carriedwith the assistance of consultants.

Advanced Procurement has taken place for the recruitment of the PCU staff and the auditors, andretroactive financing will be used to cover the relevant expenses. Retroactive financing will also be used tocover expenditures related to the procurement of office equipment for the PCU as may be needed. Totalretroactive financing will not exceed US$100,000 equivalent.

4.3 Procurement issues:

Recruitment of a Procurement Specialist is a condition of effectiveness.

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4.4 Financial management issues:

See Financial Management Plan.

5. Environmental: Environmental Category: B (Partial Assessment)5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (includingconsultation and disclosure) and the significant issues and their treatment emerging from this analysis.

Key sections of the coastlines of the several islands of St. Vincent and the Grenadines have been retreatingin association with rises in sea level and increasing frequency of storms, trends which are predicted tocontinue. Because of the topography of the main island of St. Vincent, coastal areas are vital to thecountry's economy; they are the locus for major population centers and highways. Steep inland topographyalso channels storm water runoff into river gullies which are increasingly responsible for flash flooding anddanger to life and property in populated areas. In addition, illegal sand mining undermines coastalprotection efforts. The need for support to community efforts related to the cleaning-up of beaches andpreventing uncontrolled construction on the coast and flood plain is key.

Environmental management, planning and land-use developments are still not mainstreamed into regulardevelopment practices, and there is a crucial need for formulating land-use regulations and introducinglegal documents in this regard, and generally strengthening environmental management in the country.Government has recognized this, and identified the improvement of environmental management andmonitoring as a priority for effective disaster mitigation and prevention. A special unit responsible forenvironmental management --the Environmental Management Unit under the responsibility of the NationalEnvironmental Coordinator-- was established in 1995 in what has now become the Ministry of Health andthe Environment (NMIHE). This unit currently has a limited budget and lacks equipment to monitorenvironmental conditions on the islands.

In an effort to mitigate these problems, the project proposes to fund minor civil works on a pilot basis intwo critical areas: reinstating sea-walls to ensure coastal erosion control in the Layou area, and protectingfrom floods river crossings and banks in three critical areas. MTWH assessed that the situation in theseand similar areas constitutes a significant hazard, and has prioritized the areas according to perceivedthreat.

The project will also assist MTWH and the MHE Environmental Management Unit in strengthening theirenvironmental assessment and management capacity within the context of disaster preparedness. This willtake the form of technical assistance to: (i) prepare environmental standards and guidelines for theinfrastructure (urban and transport) sector; (ii) review the organizational and administrative relationshipsof the Environmental Unit of MHE with MTWH and other relevant Government agencies with regard todisaster mitigation and preparedness; and (iii) review environmental legislation, and develop environmentalregulations and EIA guidelines with regard to disaster mitigation and preparedness. In addition trainingwill be provided to staff from MTWH and the Environmental Management Unit of MNHE, in particular incarrying out environmental impact assessments. Government will in addition review the nationalenvironmental institutional structure, including the determination of staffing profiles and training needs, andthe organizational and administrative relationships of MHE with other relevant Government agencies suchas MTWH.

The project will also finance three major studies in connection with: (i) coastal protection through theICZM study; (ii) drainage, flood control and watershed management through the Integrated KingstownDrainage Improvement, Flood Control and Watershed Management (Kingstown DIFCWM) study; and (iii)

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river flooding protection, river training and slope protection through a study to define priority bridgesrepairs and river training & flooding protection investments (including assessing flooding risks and drawinga hazard map of flood-prone areas. These studies will all address environmental and social issues, anddefine mitigation measures. The TORs for these studies include specific wording to ensure that appropriateenvironmental requirements are accounted for in the design of future civil works, and thatrecommendations are made as to the type of mitigation measures which should be carried out as part of theproposed investments to be carried out during the subsequent phase of the program or financed by otherdonors.

5.2 What are the main features of the EMP and are they adequate?

The Environmental Impact Assessment (EIA) study for the whole project has been carried out by a regionalconsultant, and Government has submitted to the Bank the final EIA report in May 2001. The potentialenvironmental and social impacts have been deemed to be limited, and no major issues have been identified.The EIA did not identify any resettlement issues associated with the civil works or any other projectcomponents. The EIA includes specific mitigation measures for the rehabilitation of the Layou seadefenses and gabion protection works. They will, in addition to the usual mandatory good constructionpractices, be strictly abided by during project implementation (specific covenant).

5.3 For Category A and B projects, timeline and status of EA:Date of receipt of final draft: May 2001

5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EAreport on the environmental impacts and proposed environment management plan? Describe mechanismsof consultation that were used and which groups were consulted?

Meetings regarding the above-captioned specific sub-projects were held at the community level at Layouand at the three river sites by MTWH, in coordination with the MEHE Environmental Management Unit, atthe time of completion of the final detailed design of the proposed works. In addition, a workshop --to beorganized by the Secretariat of the Physical Planning Board (namely the Physical Planning Section of theCentral Planning Division of MFP)-- will be held as part of the launch workshop at the inception of projectimplementation.

5.5 What mechanisms have been established to monitor and evaluate the impact of the project on theenvironment? Do the indicators reflect the objectives and results of the EMP?

Mitigation measures have been included in the bidding documents for civil works. Close supervision willbe undertaken during execution and provision has been made to carry out technical and environmentalaudits. In addition, strengthening of the MHE and MTWH environmental management capacity will beundertaken through technical assistance.

6. Social:6.1 Summarize key social issues relevant to the project objectives, and specify the project's socialdevelopment outcomes.

The project is expected to have a positive social impact because a majority of the components wouldrestore and retrofit basic infrastructure such as sea defenses, roads, and schools, all infrastructure that isused on a day-to-day basis by the general population. The project will benefit communities bystrengthening the capacities of the agencies that are in charge of warning citizens of impending disastersand improving their ability to manage the situation efficiently and effectively during and after suchemergencies. ODP procedures will be reviewed to focus more on reaching out and consulting withcommunities. The actual review of the procedures will also be carried out in consultation with

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communities. In addition, the project will finance technical assistance to MTWH and training of its staff toprepare EIAs and monitor/enforce environmental and social measures to be implemented under all MTWHprojects.

The project will also assist in developing a training program in disaster management activities for thedisaster committees and communities. Such training will include the functions of a District DisasterCommnittee, surviving a disaster, and specialized training like emergency search and rescue, donationsmanagement, etc. The training program will also include community-level training and other activities topromote community participation in disaster preparedness and mitigation. As a part of this effort, theproject will finance the production of training and education materials, including pamphlets for publicdistribution through the District Disaster Coordinators and public centers like post offices, communitycenters, churches and major employers.

6.2 Participatory Approach: How are key stakeholders participating in the project?

The project will benefit communities directly through:* support to District Disaster Committees and community volunteers through training and equipment,

including communications equipment such as hand held radios;* ensuring that shelter managers are from the communities (as opposed to defacto school principals),

which should be reflected in the drafting of the new Shelter Policy;* the procurement of a new country-wide communications and early waming systems to improve the

local capability to wam communities of impending emergencies, and facilitate the management ofdisaster situations at the community level; and

* the review of the ODP procedures (aimed at focusing more on reaching out and consulting withcommunities) which will be carried out in consultation with communities.

ODP and MTWH are among Government agencies the primary stakeholders to benefit from the Projectthrough technical assistance and training. NMS and MHE are the secondary beneficiaries of the Project.

6.3 How does the project involve consultations or collaboration with NGOs or other civil societyorganizations?

Local communities and NGOs were consulted during preparation and will continue to be involved in theproject execution as mentioned in para 6.2

6.4 What institutional arrangements have been provided to ensure the project achieves its socialdevelopment outcomes?

At local level, District Disaster Committees and community volunteers would receive training andequipment. At central level, ODP will be strengthened and coordinate the activities of relevant agencies.

6.5 How will the project monitor performance in terms of social development outcomes?

Assessments and evaluations will conducted at the conclusion of each training session and an evaluation ofthe District Disaster Committees and ODP's capacity will be undertaken as part of the project supervision.

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7. Safeguard Policies:7.1 Do any of the following safeguard policies apply to the project?

Policy ApplicabilityEnvironmental Assessment (OP 4.01, BP 4.01, GP 4.01) 0 Yes 0 NoNatural Habitats (OP 4.04, BP 4.04, GP 4.04) 0 Yes 0 NoForestry (OP 4.36, GP 4.36) 0 Yes 0 NoPest Management (OP 4.09) 0 Yes 0 NoCultural Property (OPN 11.03) 0 Yes 0 NoIndigenous Peoples (OD 4.20) O Yes * NoInvoluntary Resettlement (OP/BP 4.12) O Yes * NoSafety of Dams (OP 4.37, BP 4.37) O Yes * NoProjects in International Waters (OP 7.50, BP 7.50, GP 7.50) 0 Yes * NoProjects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)* 0 Yes 0 No

7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies.

F. Sustainability and Risks

1. Sustainability:

Disaster Management Capacity. Both ODP, the line ministries such as MTWH and MHE, as well asother Government agencies such as NMS, cannot effectively manage activities under the project and/orproject components as they are currently staffed and organized. The project will provide assistance, mostlyto ODP, to prepare for and manage emergency situations. It will also assist in building capacity withregard to emergency management, disaster preparedness and environmental monitoring in MTWH, theEnvironmental Management Unit of MHE, and NMS. The bulk of the assistance provided from projectresources would be in setting up systems, elaborating procedures and guidelines to improve response andpreparedness capacity, providing training, and procuring the specialized equipment necessary to operateefficiently. This important "setting-up" phase will be followed by further support to longer-terminstitutional reforms in disaster preparedness and management, and emergency response through possibleadditional loans/credits from the World Bank Group or under other donors' financing.

Preventive Physical Mitigation. Inadequate maintenance has been a key issue in the lack of sustainabilityof infrastructure, as was witnessed by the damages caused during the sea surges associated with HurricaneLenny. In accordance with Section 9.01 of the General Conditions Applicable to Loan and GuaranteeAgreements, each relevant sector ministry will, prior to annual reviews, prepare and submit to the Bank forreview and approval an O&M plan and budget for all relevant physical components financed under theproject.

Implementation Capacity. The assessment of procurement and contract monitoring capacity, as well asfinancial management capacity, in line ministries showed significant weaknesses, except forprocurement-related matters in MTWH. The project will, therefore, provide assistance to the Government,via the PCU, to discharge its project management responsibilities, particularly with regard to procurementand financial management. Capacity exists among local contractors and all civil works are of a limitedscope, so that the local construction industry should be able to carry out the civil works appropriately.Local consulting firms are not usually involved in the supervision of donor-funded projects, but their

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capacity --on their own or in association with regional firms-- is deemed sufficient to supervise therelatively simple and small civil works and ensure that adequate technical standards are enforced for therehabilitation of the EOC, and the retrofitting of the shelters and of the health centers and clinics.

Long Term Sustainability. The Govermment has committed to the hiring of permanent professional staff inODP to ensure sustainability and capacity in the long run, and to provide financial resources to ensure theirviability after the project is completed.

2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1):

Risk Risk Rating Risk Mitigation MeasureFrom Outputs to ObjectiveParliament has not approved various H Government commitment to prepare and presentnecessary legislations to improve needed legislation;emergency operations, in particular with Preparation and adoption of revised disasterregard to ODP's lack of authority to management procedures;assume leadership role during an Government strong commitment to theemergency; appropriate financing and staffing of ODP;Disaster management procedures untested Public awareness and communicationsand not well understood and known by campaign;communities and Government agencies; Revised procedures to improve maintenanceODP still lacks staff and financial operations and safe storage of emergencyresources; equipment.Emergency equipment is not effectivelystored and maintained, and not properlydistributed during an emergency.

NMS and ODP do not have enough M Government budget for appropriate staffing andadequately qualified staffed to maintenance of equipment and facilities;respectively use emergency Training and assistance to District Disastercommunications and early waming Committees by ODP;equipment, and properly act upon the Public awareness program and participation inreceipt of information; procedures and drills;Communities are unwilling and unable to Improved country-wide communications andmobilize and organize before an early warning systems.emergency.

Communities, in particular poorer M Community leaders' involvement and training inhouseholds, are unable to access shelters disseminating relevant information;during an emergency; Government commitment to keep access roadsShelters' construction/retrofitting is not open;technically adequate. Enforcement of appropriate standards for the

retrofitting of shelters, and adoption of efficientshelter management procedures.

MTWH is not properly budgeted and S Government commitment to elaborate nationalstaffed to discharge its quick post-disaster environmental standards and monitoringresponse responsibilities; guidelines, present relevant environmentalEnvironmental mitigation guidelines and legislation, and subsequently enforce it and

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legislation are neither adopted by implement mitigation measures.Parliament, nor enforced by Government. MIE Environmental Management Unit to be

trained in preparing EIAs and MTWH staff tobe trained in monitoring the implementation ofmitigation measures

Financial and human resources devoted to H Adequate Government budget for O&M,the maintenance of key infrastructure are allocation of enough staff to maintenance, andinsufficient; and training;Civil works are neither adequately Selective technical audits to monitor compliancedesigned nor carried out with proper with hurricane-resistant design standards andconstruction standards and regulations, construction standards and regulations.with regard to hurricanes.

Government has not prepared preventive S Government commitment to complete threemitigation investment programs and/or major preventive mitigation studies, reviewsecure resources to finance them. recommendations, and secure resources for at

least priority investments.From Components to OutputsSlow adoption of revised emergency and S Legal Covenant in the Loan Agreement fordisaster management procedures and Government to hire additional professional staffstatus for ODP; in ODP, adopt new procedures, and create aODP staff not trained in disaster NHMC with new members and appropriatemanagement; procedures, with technical assistance financedODP Headquarters and EOC not under the project;operational. Staff training, and EOC/ODP rehabilitation

works financed under the project.

Emergency communications equipment M Staff --of agencies responsible for managing theand meteorology equipment are not equipment-- to undergo continuing educationadequately maintained and used. and training in the use of new systems by their

suppliers.

Local construction industry has limited M Improved and harmonized design standards andcapacity to carry out works to retrofit materials and construction specifications andshelters and rehabilitate health centers and regulations;clinics to hurricane resistant standards. Project-financed assistance to the design and

supervision of civil works by consultants.MTWH has improved neither its capacity S Project-financed procurement of stocks ofto respond during and after emergencies, specialized equipment;nor its capacity to enforce environmental Project-financed technical assistance to theguidelines and regulations, and monitor MHE Environmental Management Unit andmitigation measures. MTWH, including the development of

environmental guidelines and regulations, andtraining.

MTWH has limited capacity to properly S Project-financed technical audits;supervise contractors. Project-financed recruitment of consultants for

supervision of civil works.

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PCU experts are not well-qualified and M Recruitment of qualified staff in the PCU priorunable/unwilling to transfer their to negotiations with precise terms of referenceknow-how. and fixed-term contracts to be assessed during

annual reviews.Overall Risk Rating s

Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk)

3. Possible Controversial Aspects:

None.

G. Main Loan Conditions

1. Effectiveness Condition

* A completed Project Implementation Manual (P1M) has been submitted to the Bank and foundacceptable (i.e. including finalized Financial Management and Procurement Sections);

* An Eastern Caribbean Dollar Project Account for Government counterpart funds has been opened inthe National Commercial Bank with an initial deposit in an amount of US$ 450,000 equivalent;

* The Financial Management Plan has been completed satisfactorily;* A Procurement Specialist has been recruited.

2. Other [classify according to covenant types used in the Legal Agreements.]

Additional covenant

The Government commits to:* (i) streamline the existing National Emergency Advisory Council (NEAC) into a full-fledged National

Hazard Mitigation Council (NHMC) through the elaboration of a charter establishing new proceduresand the appointment of new members by the end of calendar year 2003;

* (ii) recommend and draft legislation to formalize ODP as an agency with specific authority tocoordinate all disaster management activities and agencies involved during emergencies, and to adoptrevised operational guidelines, by mid calendar year 2004; and

* (iii) ensure adequate staffing and financial resources for ODP in line with the civil service reformrecommendations (NDPC position "upgraded" to a higher level in the civil service pay-scale, andappointment of two additional high level staff in ODP --Technical/Data Specialist and Deputy DisasterCoordinator-- respectively before the end of calendar year 2004 and mid calendar year 2005).

Additional financial covenant

* The Borrower shall deposit into the Project Account the balance of counterpart funding (US$ 450,000equivalent) required for the project one year following project effectiveness.

Environmental covenant

* The Borrower shall take all environmental and social recommendations set forth in the EnvironmentalImpact Assessment (ELA) report prepared for the Project dated May 2001, and ensure that allmitigation measures are implemented by contractors and properly monitored by the Ministry ofTransport, Works, and Housing (MTWH);

* All recommendations from the EIA report regarding the sea defense works at Layou, and the flood

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protection works and gabion walls reconstruction at Georgetown, Buccament and Colonaire, shall havebeen referenced in the bidding documents and reviewed by the Bank before invitations to bid areissued;

* The Borrower shall review legislation regarding land ownership and loss to the sea in coastal areas aswell as public/private delimitation in riverbeds and riverbanks, and conduct public awarenesscampaigns to explain the danger of occupying such lands.

H. Readiness for Implementation

1 1. a) The engineering design documents for the first year's activities are complete and ready for the startof project implementation.

El 1. b) Not applicable.

1 2. The procurement documents for the first year's activities are complete and ready for the start ofproject implementation.

Z 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactoryquality.

FI 4. The following items are lacking and are discussed under loan conditions (Section G):

1. Compliance with Bank Policies

H 1. This project complies with all applicable Bank policies.I 2. The following exceptions to Bank policies are recommended for approval. The project complies with

all other applicable Bank policies.

Ara Mare%ie ard Danny M. Ieipziger Orsali Kal ntzop ulosTeam Leader Sector Manager/Di 0o Country Manager/Director

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Annex 1: Project Design Summary

ST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster ManagementProject

Key Performance Data Collection StrategyHierarchy of Objectives Indicators Critical Assumptions

Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission)Strengthen infrastructure and Social and economic Data on growth, income, and Macroeconomic policysafeguard the environment. disruptions following a socio-economic indicators. conducive to growth.

natural disaster.

Program Purpose: End-of-Program Indicators: Program reports: (from Purpose to Goal)Ensure that all five APL 1: Reconstruction and World Bank missions' Aide All countries have a stableparticipating OECS member rehabilitation of Memoires, Back to Office economic and politicalnations have the ability to infrastructure, and support Reports (BTOs) and Project environment.adequately respond to natural disaster mitigation Status Reports (PSRs).disasters. investments in St. Kitts & Annual reviews and mid-term

Nevis, St. Lucia and reviews (MTR).Dominica. Implementation CompletionAPL 2: This second phase Report (ICR).brings St. Vincent & the Semi-annual Reports of theGrenadines and Grenada into Project Coordination Unitthe program. The projects, (PCU).similar to those in APL 1,focus on strengtheningemergency preparedness andresponse, and preventivephysical mitigation.

Provide additional investment Additional Loans/Credits World Bank project Continued Governments'to strengthen both physical and/or Supplementals to preparation and quality commitment to disasterinfrastructure and APL1 or APL2 (APL 3 assurance mechanism. management.institutional capacity building. cancelled): Demonstration Governments' enforcement of

of: (i) satisfactory key policies.implementation of APL1&2 Governments' budgets devotedprojects; (ii) continued to maintenance.adoption by the respectiveGovernments of good disastermanagement policies; (iii)adequate maintenance ofinfrastructure, particularly ofthose assets vulnerable todisasters.

Establish a contingency credit APL 4: Contingency funds to Governments declaration of a Effective donor coordination.facility for participating mitigate natural disaster local disaster emergency, andcountries to access emergency strikes during the program appraisal/approval mission byfunds in the event of a severe period. APL 4 triggered by a World Bank.natural disaster emergency. declaration of local disaster Evidence of implementation

emergency by Govermnents. of disaster mitigation policies.Technical audits.

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Key Performance Data Collection Strategy THierarchy of Objectives | Indicators T | Critical Assumptions

Project Development Outcome / Impact Project reports: (from Objective to Purpose)Objective: Indicators:Strengthen St. Vincent and Operational emergency Quarterly implementation Effective coordination amongthe Grenadines' resilience, procedures and mobilization progress reports from each government agencies.preparedness, and ability to guidelines as per international implementing agency to therespond to natural disasters. standards in place by June PCU.

2004.

Improved reporting of Mission reports of the CMO Effective coordination andweather information by the or other equivalent timely communicationsNational Meteorological organization. between ODP and NMS.Service (NMS) to the Officeof Disaster Preparedness(ODP) with: a) regularity (atleast once daily); and b)quality (verified by missionsof the CaribbeanMeteorological Organization(CMO), Caribbean Institutefor Meteorology andHydrology (CIMH), or anequivalent institution).

Enhanced ability of ODP to ODP reports. Accurate and timely reportingaccurately analyze incoming Annual reviews and MTR. to ODP by all public agencies,information and data on private sector and NGOsemergencies and serve as a involved.single "clearing house" forearly warning informationand dissemination (asevidenced by timely decisionmaking, the triggering ofemergency procedures andtimely dissemination ofwarnings by ODP topopulations at risk).

Increased number of people Beneficiary surveys. Adequate progress with theserviced by adequate shelters construction of new sheltersdue to the retrofitting and the retrofitting of existingprogram. ones to appropriate standards.Strengthened capacity in the Performance indicators. Contingent budget for MTWHMinistry of Transport, Works emergency activities, andand Housing (MTWH) to enforcement of environmentalcarry out works during regulations.emergencies, and prepareEIAs and monitor mitigationmeasures.

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Key Performance Data Collection StrategyHierarchy of Objectives Indicators I Critical Assumptions

Output from each Output Indicators: Project reports: (from Outputs to Objective)Component:1. ODP capable of effectively 1.1 Existing National 1.1 Final Charter approved. Parliament has approved allpreparing for disasters and Emergency Advisory Council the necessary legislation.managing emergency (NEAC) streamlined by thesituations. end of calendar year 2003 into Proper emergency and disaster

a full-fledged National Hazard management procedures areMitigation Council (NHMC) tested, well understood andthrough the elaboration of a known by communities andcharter establishing new Govemment agencies.procedures and theappointment of new members;

1.2 Adequate staffing and 1.2 Civil Service Ordinances ODP has sufficient authorityfinancial resources for ODP in and relevant budgets. to assume leadership roleline with the civil service during an emergency, andreform recommendations: (i) enjoys appropriate staffing"upgrading" before mid and financial resources.calendar year 2004 of theNational Disaster Emergency equipment isPreparedness Coordinator effectively stored and(NDPC) position to a higher maintained, and properlylevel in the civil service distributed during anpay-scale; and (ii) emergency.appointment respectivelybefore the end of calendaryear 2004 and mid calendaryear 2005 of two additionalhigh level staff in ODP--Technical/Data Specialistand Deputy DisasterCoordinator;

1.3 Draft legislation by mid 1.3 Final legislative text.calendar year 2003 toformalize ODP as an agencywith specific authority tocoordinate all disastermanagement activities andagencies involved duringemergencies, and to adoptrevised operationalguidelines;

1.4 Training of High-level 1.4 ODP quarterlyGovemment Officials in monitoring and reporting.disaster and emergencymanagement.

2. Country-wide emergency 2.1 At least 72-hour advance NMS and ODP quarterly NMS has enough qualifiedcommunications and early warning from NMS to ODP of monitoring and reporting. staff.warning systems operational. impending tropical events.

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2.2 Number of District ODP has enough staff toDisaster Coordinators (DDCs) properly act upon the receiptreached, and reduced response of information.time of those coordinators toan emergency. Communities are willing and

able to mobilize and organizebefore an emergency.

3. Functional shelters. 3.1 Efficient shelter Semi-annual implementation Communities, in particularmanagement procedures in progress reports from the poorer households, are able toplace. Ministry of Education. access shelters during an

ODP quarterly monitoring emergency; and MTWH isand reporting. able to keep access roads

opened at all times.

3.2 Number of shelters Construction and/orretrofitted. retrofitting of shelters is

completed at technicallyadequate standards.

3.3 Number of sheltermanagers actually fromcommunities.

3.4 At least one sheltermanager per shelter trainedand in place.

4. MTWH able to respond 4.1 Capacity in MTrWH to Semi-annual implementation MTWH is properly budgetedquickly to repair erect on-site metallic bridges progress reports from MTWH and staffed to discharge itsinfrastructure following a of a 10 to 15 meter span in and/or MHE. quick post-disaster responsedisaster; MTWH and the less than 4 days. responsibilities.Environmental ManagementUnit of MHE able to carry outenvironmental impactassessments and monitormitigation measures.

4.2 Design standards and Environmental mitigationmonitoring guidelines legislation iselaborated; MHE adopted/approved byEnvironmental Management Parliament/Govemment, andUnit trained in preparing enforced/implemented.EIAs; and MTWH stafftrained in monitoring theimplementation of mitigationmeasures.

5. Improved and maintained 5.1 Sea wall reconstructed at Selective technical audits to Govemnment commits enoughhysical infrastructure. Layou. assess compliance with financial and human resources

disaster-resistant design and to the maintenance of keyconstruction standards. infrastructure.

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Civil works are designed with5.2 Flood protection/gabion adequate standards toworks at selected river-crossing withstand hurricanes, andsites (Georgetown, Buccament, carried out with properColonarie) completed. construction standards and

regulations with regard tohurricanes.

5.3 Rehabilitation of priorityhealth centers and clinicscompleted.

6. Feasibility and detailed 6.1. Recommendations of Consultants' reports. Government has preparedengineering studies for ee major studies financed by reventive mitigation

reventive mitigation the project reviewed by investment programs and/orinvestments carried out. Government before December secure resources to finance

2004, and approved them.recommendations implementedbefore December 2005.

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Key Performance Data Collection StrategyHierarchy of Objectives | Indicators I|I Critical Assumptions

Project Components I Inputs: (budget for each Project reports: (from Components toSub-components: component) Outputs)Institutionalizing and US$ 0.857 million ODP monthly reporting to Adoption of new emergencystrengthening ODP. Government. and disaster management

Consultants' reports. procedures, and revised statusfor ODP.ODP staff well trained indisaster management.Rehabilitation of thenewly-designatedheadquarters of ODP to alsoserve as EmergencyOperations Center (EOC).

Emergency communications US$ 0.509 million Monthly implementation Emergency communicationsand early warning. progress reports from each equipment and early warning

implementing agency to the equipment are adequatelyPCU. maintained and used.

Shelters program. US$ 1.511 million Monthly supervision Local construction industryengineers reports to the PCU. has capacity to carry outConsultants' reports. shelter retrofitting works to

hurricane-resistant standards.

Strengthening Emergency US$ 0.464 million Consultants' reports. MTWH has demonstratedResponse and Environmental Revamped MTWH emergency responseManagement Capacity organization. procedures.

MTWH and viE havetrained staff to enforceenvironmental guidelines andregulations, and monitormitigation measures.

River Flooding Protection. US$ 1.141 million Monthly supervision MTWH has the capacity toengineers reports to the PCU. properly superviseConsultants' report for the contractors.main study.

Coastal Erosion Protection. US$ 0.783 million Monthly supervision MTWH has the capacity toengineers reports to the PCU. properly superviseConsultants' report for the contractors, and monitor themain study. consultants.

Kingstown Drainage US$ 0.211 million Consultants' reports. MTWH has the capacity toImprovement, Flood Control properly monitor theand Watershed Management. consultants.

Retrofitting Health Centers US$ 0.633 million Monthly supervision Local construction industryand Clinics. engineers reports to the PCU. has capacity to carry out

rehabilitation and retrofittingworks to hurricane resistantstandards (idem shelters

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above).

Project Management. US$ 0.703 million PMRs and semi-annual PCU has recruited staffreports. well-qualified and able toQuarterly implementation transfer know-how.progress reports from eachimplementing agency to thePCU.

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Annex 2: Detailed Project Description

ST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster ManagementProject

By Component:

Project Component I - US$3.34 million

A. Strengthening Disaster Management Capacity

This component has four sub-components: 1) institutionalizing and strengthening the Office of DisasterPreparedness (ODP), including inter alia: (a) elaborating/revising disaster management and emergencyprocedures; (b) rehabilitating the newly-dedicated Emergency Operations Center (EOC) which will alsoserve as ODP headquarters; (c) procuring emergency equipment, rescue tools and supplies; and (d)developing and implementing a comprehensive disaster management training program open to otheragencies and communities, and a public awareness program; 2) developing emergency communications andimproving meteorological systems on a country-wide basis to facilitate early warning through technicalassistance and training, and the procurement of specialized equipment; 3) implementing a shelter program,including technical assistance, training, and the retrofitting of selected public buildings (schools andcommunity centers); and 4) building capacity within the Ministry of Transport, Works and Housing(MTWH) to manage emergency situations, including the procurement of stocks of prefabricated metallicbridges and gabions, and within MTWH and the Environmental Management Unit of the Ministry ofHealth and the Environment (MHE) to carry out their responsibilities with regard to environmentalassessment and mitigation through technical assistance and training.

1. Institutionalizing and Strengthening the Office of Disaster Preparedness (ODP)

The following sub-components addresses four key areas for strengthening ODP: (a) elaborating/revisingdisaster management and emergency procedures, including protection/evacuation plans and emergencyprocedures for hotels, new regulations to legitimize ODP and focus its mission, and an update of theNational Disaster Plan; (b) rehabilitating the newly-dedicated ODP headquarters to standards making it asuitable EOC; (c) providing equipment for ODP's daily operations, as well as procuring emergencyequipment, rescue tools and supplies required during an emergency; and (d) developing and implementing acomprehensive disaster management training program open to ODP staff, government officials, disastermanagement volunteers, other related agencies, and communities, and a public awareness program.

In addition, the Government of St. Vincent and the Grenadines (GoSVG) will finance under its civil servicereform program the strengthening of the ODP human resource capacity through the appropriateprofessional staffing of ODP as follows: (i) upgrading of the permanent National Disaster PreparednessCoordinator (NDPC) position to a higher level in the civil service scale; and (ii) hiring a Deputy NationalDisaster Preparedness Coordinator and a Technical and Data Specialist. The NDPC, the Technical andData Specialist, and the Secretary will constitute the ODP's "basic/core team".

(a) Elaborating/revising disaster management and emergency proceduresThe project will finance consultants to initiate several activities in direct collaboration with ODP. Thescope of work for the consultants are: (i) updating the National Disaster Plan, including emergencycommunication procedures, and streamlining the procedures and conditions for calling both local andnational states of emergency; (ii) preparing operational guidelines for ODP; (iii) preparing a plan forcoordinating the roles of government agencies, private sector and volunteers in the early

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warning/emergency communications system; (iv) recommending and draft legislation to formalize ODP asan agency with specific authority to coordinate all disaster management activities and agencies involvedduring emergencies, and prepare revised operational guidelines; (v) reconstituting the existing NationalEmergency Advisory Council (NEAC) as a full-fledged National Hazard Mitigation Council (NHMC)through a charter establishing new procedures and the appointment of new members; and (vi) makingrecommendations for adequate staffing and financial resources for the ODP after the completion of theongoing civil service reform exercise.

(b) Rehabilitating the Office of Disaster Preparedness (ODP) and Emergency Operations Center (EOC)The rehabilitation of part of the building currently housing the Land and HousingDevelopment Corporation (LHDC) will be financed in order to accommodate the EOC and offices for theODP. The EOC will house multiple functions, in particular it will serve as: (i) a base for ODP's dailyactivities; (ii) a training center; (iii) a national command center during an emergency; (iv) an emergencycommunications center; and (v) a storage base for emergency equipment to be distributed to districtshelters. The second floor of the existing building will be converted and rehabilitated for these functions,with central air-conditioning, an emergency generator and transformer, upgraded wiring, and telephoneoutlets. The site, including adjacent storage facilities, will be secured with lockable gates and buildingsecurity systems.

(c) EOC Equipment and SuppliesThe project will finance a stock of emergency equipment and supplies, rescue tools, and loss reductionmaterials to ensure that: (i) ODP can function effectively in its daily operations; (ii) the EOC can functioneffectively as a command center in case of an emergency; and (iii) local disaster coordinators andemergency shelters will be able to function effectively in an emergency with items distributed from theEOC. ODP will prepare proper procedures for secure storage and maintenance, and use and distribution ofmaterials and supplies during an emergency. The list of agreed items includes small emergency generators,portable water purification equipment, pumps, reinforced plastic sheeting, water storage and distributioncontainers, chain saws, portable emergency lighting, emergency health supplies (stretchers, first aid kits,and possibly others as needed), and hand tools. Much of the fumiture and equipment required for thecommand center will do double duty in serving ODP's training activities (chairs, tables, projector etc.Some of the communications equipment to be used in ODP's daily operations (fax, phones, intemet access)will also service EOC's radio room during an emergency. All essential and sensitive electronic equipmentwill be protected by UPS back-up systems, and a stand-by generator will power the equipment in the eventof a power failure. GoSVG will ensure that at least ten phone lines are provided to the EOC, including a"hardened" direct line for the use of the Prime Minister under which ODP falls, and dedicated intemetaccess.

(d) Training and Public AwarenessThe project will finance a comprehensive Training Program to be administered by ODP. Staff from ODP,district disaster coordinators, shelter managers, key GoSVG officials responsible for NEACsub-committees, selected volunteer amateur radio and CB operators who will provide emergencycommunications capability around the country would be eligible. Training in operational meteorology willalso be provided to staff from the National Meteorological Service (NMS) to maximize the informationfrom new technology and to minimize error of misinterpretation of observational data. Training in projectmanagement, procurement and financial management would be offered to selected PCU as needed. A draftprogram has already been prepared on the basis of a training-needs analysis. The training sub-componentwill fund: (i) off-the-shelf and customized training by local and regional providers; (ii) short-term coursesabroad in specialized fields; (iii) conferences, seminars and study-tours; (iv) course materials for trainingcourses at EOC; (v) one full-scale emergency simulation exercise designed to test new equipment and

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system response; and (v) a Public Awareness Campaign in the form of a series of pamphlets to be producedby ODP in close liaison with GoSVG's Public Information Office, local disaster coordinators and publiccenters like post offices, community centers, churches and major employers. Advantage will also be takenof regional training programs as well as free training offered by NGOs and other agencies. Each year, thePCU will submit to the Bank for "No Objection" a comprehensive training program, including the type oftraining and the modalities by which the training could be offered.

2. Emerzency Communications and Meteorology Systems

The project will finance emergency communications and meteorology equipment, and training in their use,to strengthen the country's early warning capacity, enable ODP and the National Meteorological Service(NMS ) to alert appropriate govermment authorities, the media, and the public of adverse weatherconditions in good time. The Project will also finance technical assistance to strengthen ODP and NMScapacity to gather and disseminate timely, reliable and useful information to the population at large in caseof emergencies.

(a) Emergency CommunicationsThe project will finance equipment provided that a national emergency communication plan linkingGovernment and private communications systems into a comprehensivenetwork be developed as part of the National Disaster Plan. The consultants under 1 (a) above will assistGovernment in developing this plan in relation with the technical specialists in the concerned agencies andorganizations.

(b) Meteorology SystemFinancial support will be provided to NMS to ensure that there are effective ways to collect weather dataand the means to disseminate essential weather information to appropriate authorities and the population.The project will finance the procurement of specialized equipment including automated weather observationstations, weather observing and data collecting equipment with appropriate software, and office equipment.The supplier will provide NMS with assistance to install the equipment, and training in equipmentoperations and maintenance. The Caribbean Meteorological Organization (CMO) and/or the CaribbeanInstitute for Meteorology and Hydrology (CIMH) will assist NMS in siting equipment and designing aclimate database. The procurement of specialized equipment will be conditioned on the following: (i) NMSoffices are moved to a higher floor of the airport to prevent flooding, which is currently occurring on aregular basis; (ii) a dedicated phone line for Internet access be secured under Government regular budget;and (iii) the receipt of a report with recommendations for siting the equipment.

3. Shelters Program

The project will finance: (a) the retrofitting to hurricane-resistant standards of schools and communitycenters to serve as shelters, including electrical upgrade and the procurement--as part of the civil workscontracts--of new water storage tanks (with increased capacity) and possibly back-up generators (whenjustified); and (b) technical assistance to develop/adapt a Shelter Operations Manual and revise the shelterpolicy. The project will not fnance air conditioning, due to the need to retrofit many shelters and the limitedfinancial resources available. In addition, specific retrofit guidelines for shelters should be used (possiblyOAS), and it would be desirable to conduct community meetings to discuss proposed plans for the retrofitand subsequent management of the future facilities. EIAs are not necessary for these works, and theEnvironmental Management Unit of the MHE will monitor the proper disposal of construction materials (tobe incorporated in the civil works contracts), and use of sound construction practices with regard to theenvironment.

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4. Strengthening Emergency Response and Environmental Management Capacity

The project will finance MTWH capacity-building in disaster management response. Continuity of accesswill be ensured through the procurement of a stock of built-on site prefabricated metallic components (60meters of double-single type, enough to erect three 10/15 meter-span bridges and covering the longest 20meters span bridge) with launching equipment, as well as training of one maintenance crew and thepurchase of assembly manuals. In addition, a stock of gabion baskets to protect piers and abutments will befinanced under the project. The Project will also finance the procurement for MTWH of a vehiclededicated to the supervision of the Preventive Physical Mitigation works financed under the Project,laboratory testing equipment, and lap-top computers with appropriate software to facilitate fieldwork.

The project will also assist the MHE Environmental Management Unit and MTWH in strengthening theirenvironmental management capacity through technical assistance to: (i) prepare environmental standardsand guidelines for the infrastructure (urban and transport) sector; (ii) review the organizational andadministrative relationships of the Environmental Management Unit of MHE with MTWH and otherrelevant Government agencies with regard to disaster mitigation and preparedness; and (iii) reviewenvironmental legislation, and develop environmental regulations and EIA guidelines with regard to disastermitigation and preparedness. In addition training will be provided to staff from MTWH and theEnvironmental Management Unit of MHE.

Project Component 2 - US$2.77 million

B. Preventive Physical Mitigation

The preventive physical mitigation component includes: 1) river flooding protection through (i) civilworks and gabionage to protect selected river crossings against floods and storm surges, andassociated design review and supervision services, in selected priority areas, and (ii) a feasibility anddesign study for priority river training and flood protection investments; (b) coastal erosionprotection through (i) an Integrated Coastal Zone Management (ICZM) study to define a prioritizedsea defense and road realignment investment program and elaborate the appropriate designsaccordingly, and (ii) minor priority sea defense works at Layou, and associated detailed designreview and supervision services; (c) the preparation of a comprehensive drainage improvement, floodcontrol and watershed management program for the Kingstown area through a comprehensive studyto design an optimal storm drainage system; and (d) a program of retrofitting works for priorityhealth centers and clinics.

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1. River Flooding Protection

The project will finance the (re)construction of gabion walls to protect against floods three bridgesand river banks at Georgetown (bridge over the Caratal river), Buccament and Colonaire. Minorenvironmental mitigation measures have been recommended in the Project ETA study. Thesupervision of the works, including the review of the design, will be contracted out.

The Project will also finance a study to: (i) assess flooding risks, draw a hazard map of flood-proneareas, and identify critical river crossings (bridges and culverts) requiring protection; (ii) definepriority investments, such as bridges repairs and river training & flooding protection; and (iii)prepare detailed design for priority works to be carried out during the subsequent phase of theprogram or financed by other donors.

2. Coastal Erosion Protection

The project will finance minor sea defense works at Layou to protect the village population againstsea swells and ensuring access. Minor environmental mitigation measures, mostly for theconstruction period, have been recommended in the Project EIA study and will be included in thetender documents. The supervision of the works, including a review of the detailed design, will becontracted out.

The project will also finance an Integrated Coastal Zone Management (ICZM) study in order to gainbetter knowledge on natural sea and sand conditions around the islands of St. Vincent and theGrenadines. The ICZM study will also determine a prioritized investment program of coastal erosionprotection works -- and road realignment where needed-- for all the islands of the archipelago,including appropriate detailed design and environmental assessment for key areas to be identified aspriority investments to be carried out during the subsequent phase of the program or financed byother donors.

3. Kingstown Drainage Improvement. Flood Control and Watershed Management

The project will finance the preparation of a comprehensive Kingstown drainage improvementprogram, through a study to conduct an overall assessment of the whole Kingstown watershed anddesign an optimal storm drainage system. The study will inter alia include: (i) a detailed run-off anddrainage analysis, with special environmental and social components, covering the major drainagesub-basins of Kingstown, South River and Kingstown North River; and (ii) detailed engineeringdesign to define an optimal solution providing assurance of a reliable protection against floodthrough sound investments to be carried out during the subsequent phase of the program or financedby other donors.

4. Retrofitting Health Centers and Clinics

The project will finance the retrofitting of health centers and clinics, including the procurement aspart of the civil works contracts of back-up generators, new water tanks (or with increased capacity),and incinerators to mitigate any potential environmental hazards.

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Project Component 3 - US$ 0.70 million

C. Project Management

This component is aimed at assisting Government in meeting its project management obligationsthrough the financing of the Project Coordinating Unit (PCU) staff not seconded by Government andto be recruited externally, i.e. the full-time Financial Manager/Accountant for the duration of theProject, and a Disaster Management Specialist until such time as ODP is adequately staffed.

This component will provide financing for the PCU operations related to project management: (i)office equipment and software; (ii) one project vehicle; and (iii) operating expenditures, includingcommunication services and secretarial support.

In addition, the project will finance: (i) independent financial audits every fiscal year; and (ii)selective technical audits to ensure that the various retrofitting and rehabilitation works (shelters,health centers and clinics, and the EOC) have been designed and carried out according to acceptableinternational disaster-resistant standards.

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Annex 3: Estimated Project CostsST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster Management

Project

Project Costs by Cor onent: Sthousand)% Foreign % Total

Local Foreign Total Cost Exchange Project costA. Strengthening Institutional Disaster Management Capacity

1. ODP StrengtheningDisaster Management Procedures 25 75 100 75 1EOC Retrofitting and Equipment 83 248 330 75 5Equipment and Supplies for ODP 17 149 165 90 2Training for ODP 48 143 190 75 3

Subtotal ODP Strengthening 172 613 785 78 122. Emergency Communications and Early Warning

Emergency Communications System 38 342 380 90 6Early Warning System 13 113 125 90 2

Subtotal Emergency Communications and Early Warning 50 455 505 90 73. Shelters Program

Retrofitting Shelters 325 975 1300 75 19Shelter Policy and Operations 8 23 30 75 0.4

Subtotal Shelters 333 998 1330 75 204. Strengthening MCW

Metallic Bridges and Gabions 39 347 385 90 6Technical Assistance for MCW 18 53 70 75 1

Subtotal Strengthening MCW 56 399 455 88 7Subtotal Strengthening Institutional Disaster Management Capacity 621 2454 3075 80 45

B. Preventive Physical M Itigation Measures1. River Training and Protection

Gabion Walls and Bridges Repairs 215 645 860 75 13River Training Study 38 113 150 75 2

Subtotal River Training and Protection 253 758 1010 75 152. Coastal protection

Layou Sea Defense and Road Rehabilitation 124 371 495 75 7Integrated Coastal Zone Management Study 50 150 200 75 3

Subtotal Coastal protection 174 521 695 75 103. Feasibility Study for Kingstown drainage 50 150 200 75 34. Health Centers Rehabilitation 138 413 550 75 8

Subtotal Preventive Physical Mitigation Measures 614 1841 2455 75 36

C. Project ManagementProject Coordination Unit 76 229 305 75 4PCU Training 8 23 30 75 0.4Office Equipement and Laboratory Testing Equipment 6 50 55 90 1Vehicles 6 54 60 90 1Technical Audits 18 53 70 75 1Financial Audits 26 79 105 75 2Operating Expenditures for Project Management

Secretarial support 7 21 28 75 0.4Office supplies and communications 3 23 25 90 0.4

Subtotal Project Management 149 530 678 78 10

Total Base Costs 1383 4825 6208 78 91Contingencies 144 458 602 76 9Total Project Costs 1527 5283 6810 78 100

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Annex 4: Cost Benefit Analysis SummaryST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster Management

Project

The economic rationale for disaster management and mitigation is based on the premise that improvedrecuperative capacity of the economy will lower any adverse longer term impacts on the country's economicgrowth trajectory. The costs of disasters can be broken down into two parts, firstly the opportunity cost ofnot being able to safeguard the population and their property, and secondly the opportunity cost of losteconomic activity, especially if damages to physical infrastructure leads to prolonged disruptions ineconomic activity.

The analysis below examines the sensitivity of the expected net economic benefits for the APL 2 phase ofthe project in St. Vincent and the Grenadines. Expected benefits are adjusted using a combination of theprobability of a hurricane striking the island, and the damage averted (expressed as a percent of the GrowthDomestic Product-GDP) due to the mitigating investments and the strengthening of disaster managementcapacity measures implemented. Vulnerability can thus be defined as both the frequency at which aparticular disaster (hurricane) occurs and the impact it has on the country (i.e. its severity). The effects ofseverity can be partially offset by mitigation measures aimed at limiting damages and improving responsetimes once a disaster strikes.

Summary of Benefits and Costs:

The project's investment costs and expected benefits are calculated over a twenty year period. These costsand expected benefits are summarized in Table A4. 1 below. The benefits are adjusted by the probability ofa hurricane striking St. Vincent, which in the base case is assumed to be 10%; that is, the lower bound ascalculated by the U.S. National Ocean and Atmospheric Administration (NOAA), which estimates themean probability of a hurricane striking St. Vincent in any given year to be in the range of 10%-25%.

As for damages averted, this variable is largely unknown, since no extensive and consistent historic data setis available on damages averted due to mitigation measures. Data on damages caused by hurricanes in St.Vincent specifically is also absent, as is data on the damages caused by the annual storm surges that affectthe country. In the base case, the assumption is that on average the investments from the project can avert(save) a value equal to 10% of GDP, that would otherwise have been destroyed by a major hurricane (orthat could result from damages caused by storm surges). The sensitivity analysis below, though, assumesvarious values for damages averted as a percent of GDP, and both the Net Present Value (NPV) and theEconomic Internal Rate of Return (EIRR) are also subjected to sensitivity tests in order to see how theirvalues change due to variations in the probability of a hurricane and the damages averted due to mitigationinvestments.

The probability of a hurricane striking the island is harder to quantify and sensitivity tests are performed inorder to see what the lower bound may be for a probability of a hurricane hitting the island in order for theNPV to be greater than zero, i.e. for the project to be economically viable. While Table A4.1 above showsboth gross and expected benefits (as adjusted by the probability a hurricane striking St. Vincent), the latteris the correct variable to use in calculating the NPV and when comparing investment costs with "true"benefits.

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TABLE A4.1COSTS AND BENEFITS (US$ '000)

Investment (yrs 1-4) Operations & Maintenance, Depreciation (yrs 4-20)2002 2003 2004 2005 2006 2007 2012 2017 2021

CostsInstitutional Strengthening 357 1855 1077 50 418 426 470 519 562Communications 0 503 5 0 52 53 58 65 70ODP Strengthening 132 234 447 44 87 89 98 109 118Shelters 210 701 600 0 231 236 260 287 311Ministry of Works 15 417 25 6 47 48 53 59 64Physical MitIgation 313 850 1277 328 391 399 306 338 365Gabion Walls and Bridges Repairs 110 350 508 173 175 178 197 217 235Coastal Protection 70 200 358 155 120 122 - - -

Study for Kingstown Drainage 0 0 211 0 - - - - -

Health Centers Rehabilitation 133 300 200 0 97 99 109 120 130Project Management 177 214 195 117 - - - - -

Total Costs 847 2919 2549 494 809 825 776 857 927

Benefits (averted costs)Institutional Strengthening 357 1855 1077 50 418 426 470 519 562

Physical Mitigation 0 400 3501 37135 39393 41788 56133 75402 95481ProjectManagement 177 214 195 117 0 0 0 0 0

Total Benefits (Unadjusted) 534 2469 4773 37302 39810 42214 56603 75921 96043

Expected Benefits (Basdine) 53 247 477 3730 3981 4221 5660 7592 9604

Expected Net Benefits -794 -2672 -2072 3236 3172 3396 4884 6735 8677

Main Assumptions:

The main thrust of the economic analysis is to compare the cost of physical mitigation-for both thestrengthening of disaster management capacity and infrastructure rehabilitation-with the present andfuture costs averted (imputed benefits) from pursuing such investments. The project's costs are defined asthe direct investment costs associated with the project and the future operations and maintenance costs plusdepreciation of the physical assets. The imputed benefits will be defined as the future costs foregone (orsaved), which is also tantamount to the opportunity cost of not undertaking the mitigating investments. Adiscount rate of 10% will be applied to the costs and the benefits in order to calculate the NPV and EIRRfor the project as a whole. For the project's purposes, the NPV calculations are more important, since azero NPV will yield a positive ERR, and the economic analysis is generally more concerned with apositive NPV for the project.

As for damages averted, this variable is largely unknown, since we have no historic data on damagesaverted due to mitigation measures. Data on damages caused by hurricanes are also limited, as is data onthe damages caused by the annual storm surges that affect St. Vincent. More recently, in November 1999,the island suffered some damages from Hurricane Lenny, although the full extent of these damages havenot yet been assessed. In the analysis below, we will assume various values for damages averted as apercent of GDP. In the base case, however, the assumption is that on average the investments from the

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project can avert (save) at least 10% of GDP that would otherwise have been destroyed by a majorhurricane or that could result from damages caused by storm surges.

Sensitivity analysis / Switching values of critical items:

The analysis below examines the sensitivity of the expected net economic benefits for the project. Expectedbenefits are adjusted using a combination of the probability of a hurricane striking the island, and thedamage averted (expressed as a percent of GDP) due to the mitigating investments and the strengthening ofdisaster management capacity measures. Table A4.2 below shows the results from the univariatesensitivity analysis, which allows the probability of a hurricane to vary, while assuming that the value ofdamages averted remain constant at 10% of GDP.

TABLE A4.2Prob. of Expected

Hurricane NPV1% -69752% -32753% 4264% 41265% 782610% 2632815% 4482920% 6333025% 8183230% 100333

At a probability of 3% for a hurricane, the project becomes economically viable (NPV > 0). Theprobability distribution of hurricanes striking the island is then juxtaposed against the value of expecteddamages averted (costs saved). Table A4.3 summarizes the results of the bivariate sensitivity analysis(covarying both the probability of a hurricane and the damages averted).

From this analysis it can be seen that a probability of 3% for a hurricane with damages of at least 10%averted, forms what is tantamount to the "minimal hurdle rates" of this project. In other words, if either ofthese values fall below their respective "minimum hurdle rates" it would not be economically justifiable topursue the mitigating investments. Thus, the results of the sensitivity analysis helps to establish a baselineunder which it would be economically viable to pursue the project. In reality, the probability of a hurricaneis unknown and changes in global weather patterns suggests perhaps an increasing occurrence (hencehigher probability) of tropical storms.

The sensitivity analysis in Table A4.3 below shows that the "objective" minimum hurdle rates for the jointevents as a probability for a hurricane at 4% per year and damages averted at 10% of GDP. However,given the observed lower bound of a probability of a hurricane of roughly 10%, the "minimum" damagesthat need to be averted for this project to become economically viable becomes 3% of GDP. Data gatheredin other Caribbean island, most notably the observation from neighboring Grenada where a tropical stormdestroyed 20% of GDP in 1975, suggests that an assumption for the base case of damages averted of 10%of GDP would be a reasonable assumption.

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TABLE A4.3

Prob. of Percent Damage AvertedHurmcane 1% 2% 3% 4% 5% 10% 15% 20% 25% 30%

1% -10,245 -9,881 -9,518 -9,155 -8,791 -6,975 -5,158 -3,342 -1,525 2922% -9,814 -9,088 -8,361 -7,634 -6,908 -3,275 359 3,992 7,625 11,2583% -9,384 -8,294 -7,204 -6,114 -5,024 426 5,876 11,325 16,775 22,2254% -8,954 -7,500 -6,047 -4,594 -3,140 4,126 11,392 18,659 25,925 33,1925% -8,523 -6,707 -4,890 -3,073 -1,257 7,826 16,909 25,992 35,075 44,15810% -6,371 -2,738 895 4,528 8,162 26,328 44,494 62,660 80,826 98,99215% -4,219 1,230 6,680 12,130 17,580 44,829 72,078 99,327 126,576 153,82520% -2,067 5,199 12,465 19,732 26,998 63,330 99,663 135,995 172,327 208,65925% 84 9,167 18,251 27,334 36,417 81,832 127,247 172,662 218,077 263,49330% 2,236 13,136 24,036 34,935 45,835 100,333 154,831 209,330 263,828 318,326

The next step is to calculate the NPV and EIRR using the baseline scenario, and the minimum hurdle rates.The results calculated using the minimum hurdle rates (probability = 4%, damages averted = 10%) aresummarized in Table A4.4 below, along with the base case, which uses the lower 10% bound of the NOAAprobability of a hurricane striking St. Vincent and damages averted equal to 10% of GDP. In both cases,damages averted is assumed to be 10% of GDP.

TABLE A4.4NET ECONOMIC BENEFITS AND RETURN

Economic AnalysisOperations & Maintenance, Depreciation

Investment (yrs 1-4) (yrs 4-20)2002 2003 2004 2005 2006 2007 2011 2016 2020

Minimum Hurdle RateTotal Costs 847 2919 2549 661 661 674 624 689 746Expected Total Benefits 21 83 191 1502 1502 1593 2014 2701 3416Expected Net Benefits (ENB) -826 -2836 -2358 841 841 918 1390 2012 2670

PV (ENB) -826 -2579 -1949 574 574 570 589 530 480Cumulative PV(ENB) -826 -3404 -5353 -4779 -4779 -4209 -1843 927 2922

NPV (of Expected Benefits) $3,129Economic IRR 15.3%

Base LineTotal Costs 847 2919 2549 494 809 825 761 840 909Expected Total Benefits 53 247 477 3730 3981 4221 5338 7159 9056Expected Net Benefits (ENB) -794 -2672 -2072 3236 3172 3396 4577 6319 8147

PV (ENB) -794 -2429 -1712 2431 2167 2109 1941 1664 1465Cumulative PV(ENB) -794 -3223 -4935 -2504 -338 1771 9895 18756 24909

NPV (Expected Benefits) $26,328Economic IRR 46.7%

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While the probability of a hurricane is going to vary by year, and the damages caused will depend on thestrength of the hurricanes, the actual values will most likely exceed the minimum hurdle rates we havecalculated, which at best are very conservative assumptions.

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Annex 5: Financial Summary

ST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster ManagementProject

Project Components by Year (including contingencies), (US$ thousand)

2002 2003 2004 2005 Total

A. Strengthening Institutional Disaster Management Capacity

1. ODP Strengthening

Disaster Management Procedures - 30.5 73.7 - 104.2

EOC Retrofitting and Equipment 132.0 122.2 126.4 - 380.6Equipment and Supplies for ODP - 173.0 . 173.0

Training for ODP - 81.4 73.7 43.6 198.7

Subtotal ODP Strengthening 132.0 234.1 446.8 43.6 856.52. Emergency Communications and Early Warning

Emergency Communications System - 382.4 - - 382.4

Early Warning System - 121.0 5.3 - 126.3Subtotal Emergency Communications and Early Warning - 503.4 5.3 - 508.73. Shelters Program

Retrofitting Shelters 210.0 670.1 600.0 - 1480.1Shelter Policy and Operations - 30.5 - - 30.5

Subtotal Shelters 210.0 700.6 600.0 - 1,510.64. Strengthening MCW l

Metallic Bridges and Gabions - 391.2 - - 391.2

Technical Assistance for MCW 15.3 26.0 25.0 6.0 72.3

Subtotal Strengthening MCW 15.3 417.2 25.0 6.0 463.5Subtotal Strengthening Institutional Disaster Management Capacity 357.3 1,855.3 1,077.1 49.6 3,339.3

B. Preventive Physical Mitigation Measures

1. River Training and Protection

Gabion Walls and Bridges Repairs 110.0 350.0 350.0 173.0 983.0

River Training Study - - 158.0 - 158.0

Subtotal River Training and Protection 110.0 350.0 508.0 173.0 1,141.02. Coastal protection

Layou Sea Defense and Road Rehabilitation 70.0 200.0 200.0 100.0 570.0Integrated Coastal Zone Management Study - 158.0 54.5 212.5

Subtotal Coastal protection 70.0 200.0 358.0 154.5 782.53. Feasibility Study for Kingstown drainage - 210.6 - 210.6

4. Health Centers Rehabilitation 133.3 300.0 200.0 - 633.3Subtotal Preventive Physical Mitigation Measures 313.3 850.0 1,276.6 327.5 2,767.4

C. Project Management

Project Coordination Unit 75.0 100.0 100.0 36.6 311.6PCU Training - 30.5 - - 30.5

Office Equipement and Laboratory Testing Equipment - 40.6 16.2 56.8Vehicles 61.0 - 61.0

Technical Audits 52.7 21.8 74.5

Financial Audits 27.8 27.8 27.8 27.8 111.0

Operating Expenditures for Project Management 12.9 15.0 15.0 15.0 57.9

Subtotal Project Management 176.7 213.9 195.5 117.4 703.3

Total PROJECT COSTS 847.3 2,919.2 2,549.2 494.5 6,810.0

OoP: Office of Oisaster Preparedness

MCW: Ministry of Communications ana Works

Annex 6: Procurement and Disbursement ArrangementsST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster Management

Project

Procurement

ProcurementAdvanced Procurement will take place for the recruitment of the PCU staff and the auditors, as well as thepurchase of office equipment for the PCU, and possibly tendering the EOC rehabilitation works (e.g.initiating and processing the process up to the point where an award has been decided upon and a contractpossibly signed but short of mobilizing the contractor).

A) Procurement Arrangements

Procurement for the proposed project would be carried out in accordance with World Bank"Guidelines:Procurement Under IBRD Loans and IDA Credits", published in January 1995 (revisedJanuary/August 1996, September 1997 and January 1999); and "Guidelines: Selection and Employment ofConsultants by World Bank Borrowers" published in January 1997 (revised in September 1997 andJanuary 1999), and the provisions stipulated in the Loan Agreement. The methods to be used for theprocurement described below, and the estimated amounts for each method, are summarized in Table A. Thethreshold contract values for the use of each method are stipulated in Table B.

Civil Works: The civil works under the project consist of minor sea defenses for a critical coastline area(Layou), river flooding protection works (gabion walls and bridge repair) at priority sites, the rehabilitationof priority health centers and clinics, the retrofitting of selected shelters, and the rehabilitation of thenewly-dedicated Emergency Operations Center (EOC) and Headquarters of the Office of DisasterPreparedness (ODP) totaling US$ 4.047 million equivalent. The larger Layou contract which involves moresophisticated construction techniques will be procured following International Competitive Biddingprocedures (ICB), using Bank-issued Standard Bidding Documents (SBDs). Given the relatively limitedsize of these works, there is however, no need for a pre-qualification of contractors, and internationaladvertisement of the works will be done through a Special Procurement Notice (SPN). Contracts estimatedto cost less than US$ 0.5 million equivalent per contract, up to an aggregate amount of US$ 3.477 million,may be procured using National Competitive Bidding (NCB) procedures, using standard biddingdocuments agreed in advance with the Bank. The NCB tenders include river flooding protection works tobe packaged in two contracts, shelters retrofitting to be packaged in several contracts on the basis ofproximity, the rehabilitation of health centers and clinics to be packaged in two contracts, and the EOCrehabilitation under one tender.

Goods and Equipment: Goods procured under this project, totaling US$ 1.191 million equivalent, wouldinclude specialized equipment, emergency equipment and supplies, various materials for emergencyresponse, and vehicles and equipment for MTWH and the PCU. They are all, except possibly forcomputers and other office equipment, expected to be procured from foreign suppliers as there is no localmanufacturer for any of those goods.

To the extent possible, contracts for these goods will be grouped into bid packages of more than US$100,000 equivalent and procured following International Competitive Bidding (ICB) procedures, usingBank-issued Standard Bidding Documents (SBDs). This concerns three packages accounting for about90% of the value of the goods to be procured: 1) technological equipment in two lots (communications

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equipment, and meteorological equipment, both including computer equipment and software) for variousimplementing agencies; 2) emergency equipment and supplies, and rescue tools for ODP; and 3) metallicbridges components (and its launching system) and gabions for the Ministry of Transport, Works andHousing (MTWH).

Procurement of a supervision vehicle for MTWH and a vehicle for the PCU estimated to cost less than US$30,000 up to an aggregate amount of US$ 61,000 will be procured through UNDP's Inter-AgencyProcurement Services Office (IAPSO).

Contracts for goods which cannot be grouped into the larger bidding packages will be packaged in smalllots valued at less than US$ 35,000 each. This concerns on one hand computers and miscellaneous officeequipment and furniture for the PCU, and on the other hand laboratory testing equipment, and lap-topcomputers with appropriate software for MTWH. Such goods may be procured using international or localshopping procedures based on model Requests for Quotations satisfactory to the Bank. Internationalshopping procedures will be used for packages estimated to cost less than US$ 35,000 individually up to anaggregate amount of US$ 35,000. Local shopping procedures will be used for packages estimated to costless than US$ 25,000 up to an aggregate amount of US$ 27,000.

Consultants' Services: Consulting services will be contracted under this project in the following areas ofexpertise: coastal protection and shore management; flood control and river training engineering; drainageand watershed management; institutional development and disaster management; training; workssupervision; and project management, including technical and financial audits. These services are estimatedto cost US$ 1.544 million equivalent and would be procured using the Bank's standard Guidelines.

FirmsAll contracts for firms would be procured using Quality Cost Based Selection (QCBS), Least CostSelection (LCS) and Selection Based on Consultants' Qualifications (CQ) procedures, and will requireprior review of the Bank. Tenders for the studies and large technical assistance consultant contracts will beissued using the QCBS procedure. Short-lists will be prepared based on expressions of interests followingthe publication of the General Procurement Notice (GPN), and advertisement published in the DevelopmentBusiness and national newspapers for studies estimated to cost over US$ 110,000. Tenders for all designstudies and supervision services, as well as for financial audits and for technical audits, will be issued usingthe LCS procedure under contracts estimated to cost less than US$ 110,000 up to a ceiling amount of US$186,000. Short-lists will be prepared based on expressions of interests following the publication of theGeneral Procurement Notice (GPN), and advertisement published in national newspapers. The CQprocedure will be used up to a ceiling amount of US$ 230,000 for training contracts and for the ShelterPolicy and Operations assignment, estimated to cost less than US$ 30,000.

IndividualsSpecialized advisory services would be provided by individual consultants selected by comparison ofqualifications of three candidates and hired in accordance with the provisions of paragraphs 5.1 through 5.3of the Consultant Guidelines, for contracts estimated to cost less than US$ 50,000 up to an aggregateamount of US$ 343,000. Terms of reference will in all cases be reviewed by the Bank. In addition, contractand CV will be reviewed by the Bank for contracts of more than US$ 20,000.

Operating expenditures: The Project will finance some operating expenditures in an approximate amount ofUS$ 20,000 during each year of implementation under procedures acceptable to the Bank. This willconsist of: (i) secretarial support (PCU clerical administrative assistant's all-inclusive salary for the

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duration of the project) estimated to cost approximately US$ 10,000 during each year of implementation;(ii) stationary/office supplies and sundry items estimated to cost approximately US$ 7,000 during eachyear of implementation; and (iii) various communications services (phone and fax lines, internet access,etc..) estimated to cost approximately US$ 3,000 during each year of implementation. The services of thePCU clerical administrative assistant will be procured using the Selection of Individual Consultantsprocedure. Supplies and communications expenditures will be procured under the direct contractingprocedure in packages estimated to cost less than US$ 5,000 individually up to an aggregate amount ofUS$ 30,000.

2) Prior review thresholds: The proposed thresholds for prior review are based on the procurementcapacity assessment of the project implementing unit and are summarized in Table B. In addition to thisprior review of individual procurement actions, the plan and budget for the PCU operating expenditureswill be reviewed and approved by the Bank annually.

Two copies of each signed contract should be sent to the Bank prior to making disbursements against thesecontracts. All civil works will require prior review, as well as all the contracts for goods procured underICB. The first two contracts using international shopping procedures, the first two contracts using localshopping procedures, and the first contract using the LAPSO procedure from UN agencies will require priorreview. Thereafter, only the first contract using international shopping procedures and the first using localshopping procedures each year will require prior review. All consultants' services using firms will requireprior review by the Bank, except for training providers (only the first two contracts each year will requireprior review after prior approval of overall training program). All consultants' services using individualswith an estimated cost greater than US$ 20,000 will require prior review of the TORs, the consultant'squalifications and the terms of contract. All other consultants' services under US$ 20,000 will be procuredafter prior review of TORs. Only the first contract under the direct contracting of Operating Expenditurescategory will require prior review.

B) Assessment of the agency's capacity to implement procurement

Procurement activities, including the contracting of contractors, suppliers, and consulting firms will beundertaken by the Project Coordination Unit (PCU) in close coordination with the respective implementingagencies using World Bank guidelines. A Project Implementation Manual-PIM (Operational Manual) hasbeen prepared, and its procurement section includes a description of the procurement procedures andmethods to be applied, the Standard Bidding Documents to be used under each procurement method, modelcontracts for goods to be procured under the shopping or LAPSO procedures, and a procurementplan/timetable (see below Section C).

An assessment of the capacity of the Government to implement procurement actions for the project hasbeen carried out during the pre-appraisal mission of the project (report dated February 7, 2000, included inthe project files) and was approved by the Regional Procurement Adviser on February 18, 2000, with anoverall level of risk assessed as average. The specific risks identified in the assessment include: (i)Government staff inexperienced in procurement and contract management; (ii) slow procurement processcurrently found in the sub-region; and (iii) the need to establish procurement filing and contractmanagement procedures for the project. The PCU will recruit the above-captioned procurementlcontractmanagement specialist before negotiations, and thereafter establish a monitoring system to maintain controlof the procurement actions.

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C) Procurement Plan

A Procurement Plan, along with an overall Implementation Plan for all Project activities, has been preparedby the PCU. It was presented to the Bank before negotiations and found acceptable, and subsequentlyincluded in the Project Implementation Manual and project files. At the beginning of each calendar year,the Borrower will update the Procurement Plan and overall Project Implementation Plan for the comingyear.

D) Frequency of Procurement Supervision

In addition to the prior review supervision to be carried out from the Bank Headquarters, a full supervisionmission will visit field sites to carry out a post review of contract and procurement actions every 12months. Based on the overall risk assessment (average) and the limited number of civil works involved, thepost-review field analysis should cover all major investments (preventive physical mitigation measures),and a sample of not less than 1 in 3 shelters and health centers and clinics contracts. A Bank projectsupervision plan has been included in the project files.

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Procurement methods (Table A)

Table A: Project Costs by Procurement Arrangements(in US$ thousand equivalent)

Category Procurement MethodICB NCB Others NBF Total

Civil Works 570 3477 404

(485) (2955) (3440)

Goods 1073 118 1191

(1019) (112) (1131)

Consulting 1544 154Services

(1313) (1313)

Operational 28 2Costs

(22) (22)

Total 6810(5906)

* Figures in brackets represent the amount of Bank Financing

Table Al: Consultant Selection Arrangements(in US$ thousand equivalent)

Consultant Selection Method Total CostServices (including

Expenditure contingencies)

Category OCBS QBS SFB LCS C Other* N.B.F.

A. Firms 758 186 229 117(644 (158) (195) (996

B. Individuals 372 37(316) (316

Total 1544_______________ ~~~~~~~~~~~~~(1 313i

*Individual Consultants and PCU Training** Figures in brackets represent the amount of Bank financing

Prior review thresholds (Table B)

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Table B: Thresholds for Procurement Methods and Prior Review

Expenditure Category Contract Value Procurement Method Contracts Subject to Prior(Threshold) Review

US $ thousands US $ thousand1. Works Above5OO ICB All (570)

Below 500 NCB All (3477)2. Goods Above 100 ICB All (1073)

Below 35 Intemational Shopping First 2 contracts (10)Then First per year (10)

Below 25 National Shopping First two contracts (10)Then first per year (5)

Below 5 (Office supplies) Direct Contracting First Contract (5)Vehicles IAPSO First contract (30)

3. ConsultantsFirms Above 110 QCBS All (758)

Below 110 LCS All (186)Below 30 CQ All (30)Training CQ After approval of overall

training program, prior reviewof the first two contracts each

vear (100)Individuals 20 to 50 See Section V of Guidelines Review of TORs, contracts, and

CVs (300)Below 20 See Section V of Guidelines Review of TORs only (42)

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Disbursement

Allocation of loan proceeds (Table C)A US$2.97 million loan and a US$2.94 million credit will be extended to Saint Vincent and the Grenadinesin support of the US$ 6.81 million (including contingencies and front-end-fee) program of activitiesdescribed in Annex 2. This project forms part of the second phase (APL2) of an APL that covers fiveOECS countries for a total of US$ 54.89 million to be disbursed in three phases (APL1, APL2 and APL4).The arrangements and descriptions described here apply to this particular part of APL2 which is for SaintVincent and the Grenadines. The closing date for this project will be December 31, 2005. The allocation ofloan proceeds for this project is presented in Table C below.

Table CAllocation of Loan and Credit Proceeds (US$ thousands)

Total % Loan Credit1. Clvil Works 3,010 85 1,500 1,5102. Goods 1,115 95 550 5653. Consultants 1,235 85 700 5354. Operating Expenses 40 80 20 205. Loan Fee 30 30 -6. Unallocated 480 200 280

Total 5,910 3,000 2,910

It was agreed that retroactive financing would cover eligible expenditures with regard to goods and servicesfor the PCU acquired from December 31, 2001 up to the date of signing of the Loan Agreement and theDevelopment Credit Agreement. They will cover for a maximum of US$ 150,000: (i) fees of consultants;(ii) office equipment and furniture; and (iii) operating expenditures (sundry items and stationary/officesupplies under direct purchase procedures, and various communications services such as phone and faxlines, internet access, etc under direct contracting procedures. These services and goods will be procured inaccordance with the procurement provisions set forth in the Loan Agreement.

Funds Flow

Procedures for flow of funds from the loan and the required counterpart contribution will be implementedwith due regard to safeguarding project's resources and ensuring timely execution of payments.

Loan funds will be disbursed to one Special Account ([JS dollar account for Bank funds), and this accountwill be utilized for the purposes of the implementation arrangements agreed. As is the current practice inSt. Vincent, the Special Account will be opened by the Ministry of Finance and Planning (MOFP) andmaintained in a commercial bank. The management of this account will be the responsibility of the PCU.The PCU will transfer funds from the Special Account to the project account, from which checks ortransfers (in local currency) will be issued to the providers of goods and services. The project willreconcile (monthly) both the project account as well as the Special Account, and submit the documentationregarding both accounts, to the Bank under each withdrawal application and Statement of Expenditure(SOE).

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The establishment of the new Special Account and the deposit of government's first year contribution ofUS$ 450,000 equivalent in the local operational account will be required prior to effectiveness. Asubsequent deposit of US$ 450,000 equivalent will be made in the local operational account one year afterthe effectiveness,date.

Accounting Policies and Procedures

Administrative procedures will be in place to ensure that financial transactions are made with considerationto safeguarding project assets and ensuring proper entry in the accounting/monitoring systems. Theproject already has a working draft of the operations manual, which is in the process of being finalized.The project accounting system has the capacity to record assets, liabilities and financial transactions of theproject, and produce financial statements useful to project management and meeting IBRD's fiduciaryrequirements. The accounting system is designed to be able to capture all financial information andallocate among both categories (the Bank's legal/disbursement categories and GOSVG Budget categories)and project activity.

The project will also submit detailed monthly statements of expenditures to the Office of the AccountantGeneral and to the MOFP in order that the project's expenditures are recorded on the Ministry's accountsas well as supervised by the unit responsible for management of external financing.

Segregation of duties. The PCU has a clear organizational structure and procedures established accordingto the norms under the Financial Administration and Audit Act (FAA). Said procedures support anadequate segregation of procurement, budgeting, payment and recording activities, and this was observedwithin the MFP during the appraisal mission. All payment orders/requests are reviewed and signed by thePCU director and by the office of the Director of the Planning (in the MFP) before being processed by theAccountant General's office. All detailed procedures are contained in the operational manual for theproject.

Budgeting. The loan agreement and project cost tables will be the main inputs for the project budgets andcounterpart (GOSVG) funding estimates under the Capital Budget. The PCU will follow prescribedgovernmental budgetary heads, and in adherence to the FAA Act, will prepare at least:

* The annual work plan classified by work lines, with goals/objectives, physical and financialprograms;* the budget proposal specifying the sources of funds, the summarized and detailed expenditures bymajor areas, accounts, and specific objects;* after approval by Parliament: the budget execution program broken down monthly, and thequarterly document of budgetary commitment authorization;* the monthly report on budgetary execution to be issued within 10 days after the end of each month;and* the quarterly report on evaluation of budgetary execution to be issued within 10 days after the endof the quarter.

Bank account reconciliations will be prepared on a monthly basis by the Accountant and will be availablewithin 8 days after the end of the month.

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Accounting. Accounting and budgetary records will be maintained in accordance with the GOSVG'sprocedures, under the FAA Act and which are satisfactory to the Bank. However, for Bank monitoringpurposes the PCU will report on detailed information at the project level, specifically the deposits to thespecial account and the expenditures classified by activity/ subcomponent and disbursement category.

The project has implemented a basic system that will be able to account for all financial transactions bysource of financing and by either general category or project activity detail.

Safeguard over assets. For the proposed project, the PCU will keep detailed subsidiary records of plantand equipment acquired. The amounts in this register will be reconciled monthly against the respectiveaccounting balances. At least one annual physical inspection will be undertaken by MOFP/PCU staff,preferably with the participation of staff from the external auditors.

Audit arrangements.

Annual project financial statements will be audited in accordance with International Standards on Auditing,by an independent firm and in accordance with terms of reference (TORs) both acceptable to the Bank. Inaddition to the audit opinions on project financial statements, Special Accounts, and SOEs, special purposereports will be required to deal specifically with observance of the procurement and consultants servicesprovisions of the Loan Agreement. The memorandum on internal controls ("management letter") will beissued annually.

The Terms of Reference for the independent annual audit has already been cleared and approved by theBank and the process to contract the auditors is nearly complete.

The PCU will prepare, if needed, an action plan to address any issues and recommendations contained inthe audit reports. The action plan and follow-up activities would be communicated to the Bank.

Reporting and Monitoring

Financial statements and reports will be prepared in formats satisfying the Government and IBRD'smonitoring and fiduciary purposes.

On a monthly basis, the PCU will prepare the project's basic Statement of Expenditure, a matrixclassifying receipts by financing source and expenditures by financing source and disbursement category.This report is submitted to the Office of the Accountant General and to the MOFP.

In addition to Statement of Expenditure, the monthly financial reports will include the Special AccountReconciliation Statements. Any difference in the amount of expenditures reported under the two financialstatements must be clearly explained. The project financial statements, along with the physical progress andprocurement sections of the FMRs, will be submitted to the Bank on a quarterly basis, and will besubmitted no later than forty-five (45) days after the end of each quarter. The contents of the FMRs havebeen discussed, and the formats of the reports will be finalized by loan negotiations.

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Assessment of Agency's Financial Management Capacity

An assessment of Agency's financial management capacity was conducted on site from January 17-21,2000, by a Financial Management Officer, in accordance with guideline OP/BP 10.02 and the ProjectFinancial Management Handbook dated February 1999. The objectives of the assessment were to determineif the Project Management Unit has the capacity to properly manage and account for all project proceedsand to produce timely, accurate and reliable project management reports for use by management andsubmission to the World Bank. Below is a summary risk analysis.

Risk Risk Rating Risk Mitigation Measures

Inherent risk

Country specific Medium Appointment of experienced offinancial staff of the PCU withinMOFP;

Entity/project specific Medium Same as above. Use of Statement ofExpenditures for disbursements.

Control risk

Implementing Entity Medium Same as above.

Funds Flow: loan funds Medium Use of Statement of Expenditure

Funds Flow: counterpart funds Medium Deposit of counterpart funds intoseparate operational account.

Low Establishment of the PCU;Staffing appointment of experienced FM

personnel.

Accounting policies and Lowprocedures

External Audit Medium Appointment of auditors beforeeffectiveness; interim audits

Reporting and Monitoring Medium Bank support to generation of flexibledraft FMRs prior to effectiveness

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The PCU has been involved with the preparation of the Emergency Recovery and Disaster Managementproject (under the Regional APL) and has established some key aspects of the financial management.However, since this is a new project unit to implement a Bank project, there are specific aspects to theoverall financial management system that have been identified as needing modification. Below is the agreedfinancial management action plan:

Financial Management Action Plan

ResponsibleAction Entity Completion Date1. Set up the PCU's new Chart ofAccounts. PCU Before effectiveness

2.Set up the system to classifyaccounting information by projectdisbursement categories andsubcomponents. PCU Before effectiveness3. Establish Special Account PCU/MOFP Before effectiveness

45 days after the end of thequarter in which effectiveness

4. Submit first FMRs PCU takes place

5. Finalization of OperationsManual PCU Before effectiveness

Use of statements of expenditures (SOEs):

Special account:

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Annex 7: Project Processing ScheduleST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster Management

Project

Project Schedule Planned ActualTime taken to prepare the project (months)First Bank mission (identification) 01/20/1999Appraisal mission departure 07/24/2000 05/21/2001Negotiations 11/20/2000 04/11/2002Planned Date of Effectiveness 09/15/2002

Prepared by:

Preparation assistance:

Bank staff who worked on the project included:

Name SpecialityBernard Becq * Team Leader, Senior Operations OfficerRumana Huque Urban SpecialistArnaud Marie Guinard Lead Urban Specialist, Task ManagerMichel Audige* Lead Port Operations SpecialistRajeev Swami Financial Management OfficerMariana Montiel Legal CounselPeter Ellis EconomistJohn Pickard ConsultantAna Daza Language Team Assistant

* Procurement Accredited Staff

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Annex 8: Documents in the Project File*

ST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster ManagementProject

A. Project Implementation Plan

St. Vincent and the Grenadines Project Implementation Manual. *St. Vincent and the Grenadines Project Implementation Plan (Microsoft format) *

B. Bank Staff Assessments

BTOs and Aide Memoires *Financial Management Assessment *Procurement Assessment *Capacity and institutional strengthening measures *

C. Other

Environmental Impact Assessment study *Project Supervision Plan *Costab and Project Cost tables *

*Including electronic files

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Annex 9: Statement of Loans and Credits

ST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster Management Project02-May-2002

Difference between expectedand actual

Original Amount in US$ Millions disbursements'

Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig Frm Rev'dP076822 2002 St Vtncent Emergency Recowvey Project 0.96 2.24 0.00 0.00 0.00 3.33 0.00 0.00

Total: 0.96 2.24 0.00 0.00 0.00 3.33 0.00 0.00

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ST. VINCENT AND THE GRENADINESSTATEMENT OF EFC's

Held and Disbursed PortfolioJan - 2002

In Millions US Dollars

Committed DisbursedIFC IFC

FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic

Total Portfolio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Approvals Pending CommitmentFY Approval Company Loan Equity Quasi Partic

Total Pending Commnitment: 0.00 0.00 0.00 0.00

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Annex 10: Country at a GlanceST. VINCENT AND THE GRENADINES: Emergency Recovery and Disaster Management

ProjectSt VIncent :::..Latin: :Lower--:.

POVERTY and SOCIAL and the .Ameice: :mIddle-Orenadinsa &Crb. Icm Development diamond'

Ppato,mid-year (millons) 012 518: 2,040 ie xecacONl Der capita (Aties method. US$) 2.720 3.880: 1.140.GNI (Atlas method. US$ billions) 0 31 1.j895 2.327

Average annua, growNth..1994-00:Population M . ..... 1.6, ~~~~~~~~~~~~1.0

Labor force 2.3 1 3 GNGrsMost recent eatimate (lateist year avaIlable. 1994-00).prprmr

capita 7 enrollmentPoverty (96 of population below notional poverty line)Urbenpooulation. (96 of total population) s 42Life axoectancy,al birth (veers)~. 73, 70 69Infant mortalitv (per 1, 000 live births) 20: :30 32Child malnyktrtio n (%: of childreni under 5): .. ii1 Access to improved water sourceAccess to an: Improved water, source -(96 o population) 93 85: s0Illilteracy (%6of population age 15+) 12. , 15 _ _

Grosa vrmr nolet(6o colaepplto). 1 114 - St. Vlncent end the GrenadinesMale ........11..Lower-middle-Income groupFemale .. 114 .

KEY ECONOMIC RAT1OS and LONQ-TERM: TRENDS:.....

1980 190 1999 2000Economic rstios'

GDP (US$billiona) 0.06 0.20 0.3 .3Gross domestic InvestnientlGDP 38.2 .29.7, 32.6 +:.28.0,-+TrdExports of opods and services/GDP 54.9 5. 52.0 585 TradGross domestic sevlnoslG DP -12.0 _18.7. 13.9 1.Gross national savlnaslGDP 13.2 222 +:::..12.5: 14.8

C,urrent account.balancelGDP -: 15.3 -101.7 '`20,2 ~ 131 DmsiInterest oavments!GDP. 0.5 0.9 19 I IvetmnTotal debtGOQ? . 17.6 -0 8.3+ 57~8 saigTotal debt servicelexports: .1.0 3.3 8.2 6.8Present value of debtlGDP , .. 45.1Present vatue of debtlexpot . .. 84.8;

Indebtedness19.J80-90 1990-00 1999 20004200-0

(average annual grG wth) 62 33 40 23 3 t inetedteGeaieGDP 40S.VnetadteGoaieGDP per:capita 52 26 . . 5. - Lower-middle-income groupExporte of goods and services 8.5 2.3. 7.7~ .5,2 4.4

STRUCTURE of the ECONOMY1980 1990 1999 2000 Growth of Investment and GDP I(%)

(96 of GDP) 2Agriculture 14.3 21.2 10.4 9.08 2

Industry 26.5 22.9 25.8 25.5 1~Manufacturing 10.5 8.5 6.5 6.3 0

Services 59.2 55.9 83.8 64.7 -1 7 Os s 1

Private consumption 89.0 63.8 67.7 64.5 .20

General government consumption 23.0 17.5 18.4 19.3 _ 0 -- DImports of goods and services 105.1 76.8 70.8 70.3"""'0i "GP

(average annual growth) 1980.90 1990-00 1999 2000 Growth of experts and Imports (%)Agriculture 7.4 -3.2 -5.7 -9.6 30Industry 5.9 3.8 -0.4 12.2 20

Manufacturing 4.8 0.3 -1.6 -5.2 10Services 5.6 4.7 7.6 2.9 0~

Private consuMption 3.0 3.2 -0.1 -2.5 -10 9 1 5 U 0

General government consumption 3.0 2.6 1.7 7.3 .20Gross domestic Investment 5.5 4.5 6.5 -12.1 -~Exporta '"OlmportsImports of goods and services 4.1 2.6 3.3 1.6

Note: 2000 data are preliminary estimates.

The diamonds show four key Indicators in the country (in bold) compared with Its Income-group average, If data are missing, the diamond willbe Incomplete.

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St. Vincent and the Grenadines

PRICES and GOVERNMENT FINANCE1980 1990 1999 2000 Inflation (%)

(% change)Consumer pices 17.2 7.6 -1.8 2.0 4Implicit GDP deflator 8.4 6.4 -0.1 -0.9 2

Government finance ° l ' w(96 of GDP, indudes current grants) -2 -Current revenue .. 27.8 28.2 28.6 4-Current budget balance .. 5.0 3.9 2.8 -GDP deflator O-.CPIOverall surplus/deficit .. -3.3 -2.8 -4.2

TRADE

(US$ millions) 1980 1990 1999 2000 Export and Import levels (USS mill.)Total exports (fob) .. 78 50 55 250

Bananas .. 42 20 19Eddoes and dasheens .. 2 3 3 20Manufactures .. 21 25 30 150

Total imports (cif) .. 120 201 193 00Food 26 41 45Fuel and energY 7 11 20 50Capitalgoods .. 26 76 60 0 .

94 95 96 97 98 99 00Export price index (1995=100) . 101 109Import price index (1995=100) .. 94 99 .. Exports M ImportsTerms of trads (1995=100) .. 107 110

BALANCE of PAYMENTS

(US$ millions) 1980 1990 1999 2000 Current account balance to GOP (%)Exports of goods and services 39 128 171 195 0Imports of goods and services 63 156 233 234 oResource balance -25 -28 -62 -39

Net income -1 -11 -20 -21 -'0Net current transfers 16 18 .. K .

Current account balance -10 -21 -66 -44

Financing items (net) 9 25 63 40 20Changes in net reserves 1 -4 4 3 -25 -

Memo:Reserves including gold (US$ millions) .. 31 49Conversion rate (DEC, locallUSSJ 2.7 2.7 2.7 2.7

EXTERNAL DEBT and RESOURCE FLOWS1980 1990 1999 2000

(US$ millions) Composition of 2000 debt (USS mill.)Total debt outstanding and disbursed 10.6 61.0 191.7 192.3

IBRD 0.0 0.0 0.2 0.1 B:7IDA 0.0 6.2 7.4 7.0 G: 31

Total debt service 0.4 4.3 14.4 13.5 f-IBRD 0.0 0.0 0.0 0.0.IDA 0.0 0.0 0.2 0.2 -D:6

Composition of net resource flowsOfficial grants 4.9 3.4 13.4 \.Official creditors 2.8 4.8 0.6 -0.6 F: 58Private creditors 0.1 0.0 57.5 -0.4Foreign direct investment 1.1 8.0 25.0Portfolio equity 0.0 0.0 0.0 .. E: 35

World Bank programCommitments 0.0 0.0 0.0 0.0 A - IBRD E -BilateralDisbursements 0.0 0.9 0.1 0.0 8- IDA 0- Other multilateral F -PrivatePrincipal repayments 0.0 0.0 0.1 0.1 C -IMF G -Short-termNet flows 0.0 0.9 0.0 -0.1Interest payments 0.0 0.0 0.1 0.1Net transfers 0.0 0.9 -0.1 -0.2

Development Economics 9/13/01

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