Public Disclosure Authorized
Document of
The World Bank
Public Disclosure Authorized
Report No: 21068-GE
Public Disclosure Authorized
PROJECT APPRAISAL DOCUMENT
ONA
PROPOSED CREDIT
IN THE AMOUNT OF SDR 7.6 MILLION (US$ 9.63 MILLION EQUIVALENT)
TO
GEORGIA
FOR AN
Public Disclosure Authorized
ENERGY TRANSIT INSTITUTION BUILDING
PROJECT
February 15, 2001
Energy Sector Unit
Europe and Central Asia Region
CURRENCY EQUIVALENTS
(Exchange Rate Effective October 17, 2000)
Currency Unit = Lari
1.96 Laris = US$1.00
US$0.51 = 1.00 Lari
FISCAL YEAR
January 1 - December 31
ABBREVIATIONS AND ACRONYMS
AIOC
CAS
EA
ECA
EMP
ESAC
EU (TACIS)
GGIC
GIOC
GoG
HGA
IDA
IFC
IMF
MEP
NGO
PIU
SRSP
SOCAR
TAL
UK KHF
UNDP
USAID
USTDA
Azerbaijan International Operating Company
Country Assistance Strategy
Environmental Assessment
Europe and Central Asia
Environmental Management Plan
Energy Sector Adjustment Credit
European Union (Technical Assistance for the Commonwealth of Independent States)
Georgian Gas International Corporation
Georgian International Oil Corporation
Government of Georgia
Host Government Agreement
International Development Association
International Finance Corporation
International Monetary Fund
Major Export Pipeline
Non Government Organization
Project Implementation Unit
Structural Reform Support Project
State Oil Company of the Azerbaijan Republic
Technical Assistance Loan
United Kingdom Know-How Fund
United Nations Development Program
United States Agency for International Development
United States Trade and Development Agency
Vice President:
Country Director:
Sector Director:
Sector Manager/Team Leader:
Johannes Linn, ECA
Judy M. O'Connor, ECC03
Hossein Razavi
Peter Thomson, ECSEG
GEORGIA
ENERGY TRANSIT INSTITUTION BUILDING
CONTENTS
A. Project Development Objective
1. Project development objective
2. Key performance indicators
Page
2
2
B. Strategic Context
1. Sector-related Country Assistance Strategy (CAS) goal supported by the project
2. Main sector issues and Government strategy
3. Sector issues to be addressed by the project and strategic choices
2
2
3
C. Project Description Summary
1.
2.
3.
4.
Project components
Key policy and institutional reforms supported by the project
Benefits and target population
Institutional and implementation arrangements
3
5
5
6
D. Project Rationale
1.
2.
3.
4.
5.
Project alternatives considered and reasons for rejection
Major related projects financed by the Bank and other development agencies
Lessons learned and reflected in proposed project design
Indications of borrower commitment and ownership
Value added of Bank support in this project
7
7
8
8
8
E. Summnary Project Analysis
1.
2.
3.
4.
5.
6.
7.
Economic
Financial
Technical
Institutional
Environmental
Social
Safeguard Policies
8
9
9
9
10
10
12
F. Sustainability and Risks
1. Sustainability
2. Critical risks
3. Possible controversial aspects
13
13
14
G. Main Conditions
1. Effectiveness Condition
2. Other
14
14
H. Readiness for Implementation
15
I. Compliance with Bank Policies
15
Annexes
Annex 1: Project Design Summary
Annex 2: Detailed Project Description
Annex 3: Estimated Project Costs
Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary
Annex 5: Financial Summary
Annex 6: Procurement and Disbursement Arrangements and Financial Management
Arrangements
Annex 7: Project Processing Schedule
Annex 8: Documents in the Project File
Annex 9: Statement of Loans and Credits
Annex 10: Country at a Glance
MAP(S)
IBRD No. 31222
16
20
28
29
30
31
43
44
45
47
GEORGIA
Energy Transit Institution Building
Project Appraisal Document
Europe and Central Asia Region
ECSEG
Date: February 15, 2001
Country Manager/Director: Judy M. O'Connor
Project ID: P072394
Lending Instrument: Technical Assistance Loan (TAL)
Project Financing Data
[X] Credit
[ 1 Loan
[
Grant
Team Leader: Peter D. Thomson
Sector Manager/Director: Hossein Razavi
Sector(s): GP - Oil & Gas Transportation
Theme(s): Energy
Poverty Targeted Intervention: N
( Other:
[ Guarantee
For Loans/Credits/Others:
Amount (US$m): 9.63
Proposed Terms: Standard Credit
Grace period (years): 10
Commitment fee: 0.5%
Financing Plan:
Source
BORROWER
IDA
BORROWING AGENCY
Years to maturity: 40
Service charge: 0.75%
Local
Foreign
2.18
0.00
0.37
9.26
0.48
0.00
3.03
Total:
9.26
Borrower: GOVERNMENT OF GEORGIA
Responsible agency: INSTITUTION BUILDING PIU, GIOC, GGIC, MIN. OF ENVIRONMENT
Note: "Borrowing agency" in financing plan above refers to GIOC and GGIC.
Address: Institution Building PIU, 42, Al. Kazbegi Ave., Tbilisi, 380077, Georgia
Contact Person: Alexander Sikharulidze
Tel: 995 32 950 865
Fax: 995 32 955 268
Email: [email protected]
Estimated disbursements ( Bank FY/US$M):
FY
2001
2002
2003
Annual
0.30
2.80
2.50
Cumulative
0.30
3.10
5.60
2004
2.50
8.10
Project implementation period: 4.25 years
Expected effectiveness date: 04/30/2001 Expected closing date:
OCS
PADFo,n Rev Ma,.
2000
2005
1.53
9.63
07/31/2005
Total
2.18
9.63
0.48
12.29
A. Project Development Objective
1. Project development objective: (see Annex 1)
The project aims to enhance the capacity of Georgia to negotiate and implement oil and gas transit
agreements in a manner that maximizes economic benefits, and minimizes social and environmental costs.
Georgia has considerable potential for transit of hydrocarbons, particularly by comparison to its other
economic assets. However, realizing positive net benefits from large transit investmnents (in a very complex
geopolitical context) requires very careful management by the State and substantial institution building.
2. Key performance indicators: (see Annex 1)
The success of the project will be assessed by reference to the following key performance
indicators:
Expected benefits from transit agreements actually realized.
Compliance with legal agreements and Georgian legislation (by Government agencies and private
investors).
Audit reports published.
Actual examples of enforcement of liability legislation occur.
Agreements governing financial relations between Government, GIOC, and GGIC are respected.
B. Strategic Context
1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1)
Document number: 17000-GE
Date of latest CAS discussion: September 22, 1997
This project was not included in the last CAS, but it will be cited in the CAS scheduled for Board
discussion in the fourth quarter of FY200 1. The project does, however, support three of the CAS priorities,
namely: "1) stabilization support, as continued weaknesses in public finance jeopardize the stabilization
objective; 2) strengthen and diversify sources of growth by removing remaining barriers to private sector
development; and 3) assist the Govemment in introducing institutional and policy reforms needed to protect
Georgia's environmental and natural resources."
The proposed project will support the first priority through consultancy assistance to maximize the
Government's pipeline revenues and minimize its liabilities. The second priority will be pursued by
consultancy assistance to ensure that transit agreements are negotiated and implemented in a manner that
balances the interests of investors and of Georgia, thereby reducing the long-term political risk faced by
private investors in infrastructure in Georgia. The third priority will be addressed through technical
assistance in review of environmental impact assessments and related environmental permit applications for
pipelines (and subsequent monitoring and public outreach), as well as in oil spill prevention and mitigation
for non-pipeline transportation of oil.
2. Main sector issues and Government strategy:
Large investments in transit pipelines made by the private sector give rise to many complex fiscal,
environmental, social, political, legal and institutional issues for the host government. Georgia has gained
-2-
some experience in managing such issues through six years of implementation of the Baku-Supsa early oil
pipeline (which transports crude oil from Azerbaijan to the Georgian termiinal of Supsa) and through the
transit of gas from Russia to Armenia. However, the new agreements coming into place impose greater
obligations on the Government than the existing arrangements, and do so within a more complex
environment than prevailed in the past. New framework legislation has been adopted but is untested in
application, geopolitical competition over Caspian resources has intensified, synergies between oil and gas
transit have emerged, land ownership has become more dispersed through privatization, and civil society's
awareness of pipeline issues has developed. These challenges and opportunities are testing the State's
ability to coordinate its agencies in fulfilling its responsibilities to investors and to its citizens.
The Government's strategy for dealing with these challenges has centered on clearly designating
key agencies responsible for coordination, and strengthening their capacity. For oil pipeline coordination,
the key agency is the Georgian International Oil Corporation (GIOC), and for gas pipelines, the Georgian
Gas International Corporation (GGIC). Multiple government agencies are involved in transit pipelines,
most notably the Ministries of Environment and of Finance. The Government has undertaken a major
donor mobilization effort to support institution building for interfacing with private investors in pipelines,
and with the public over pipeline-related issues.
3. Sector issues to be addressed by the project and strategic choices:
The main issues to be addressed by the project are how to enhance the institutional capacity of
GIOC, GGIC, and the Ministry of Environment most effectively, and how to ensure those agencies
collaborate efficiently with multiple other state agencies. Terms of reference for consultants financed by
the project will reflect the objective of interagency coordination. The increasingly close relationship
between oil and gas transit issues means that coordination between GIOC and GGIC is of paramount
importance, as well as with the Ministry of Environment. Project management arrangements are designed
to enhance such coordination (through a steering committee mechanism).
C. Project Description Summary
1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed cost
breakdown):
A. Environmental and Technical Advice for Pipeline Implementation will include consultancy services
to assist the Government in fulfilling its obligations under oil and gas pipeline transit agreements on a
timely basis (Georgia incurs substantial liabilities if there are delays against very short deadlines in the
agreements). These services will focus on reviewing environmental/social impact assessments, pernitting,
compliance monitoring, and public outreach. The component will thus go beyond environmental impact
assessment, and will strengthen long-term environmental management capacity. This will involve
environmental, social, technical, and public communications consultants (international and local) to address
oil and gas transit issues jointly. It will also include technical/environmental advisors for negotiations of
transit of gas from (or through) Russia (technical advisors for negotiation of East-West gas transit have
been provided by USTDA).
B. Legal Advice for Pipeline Implementation will include specialized pipeline lawyers to advise the
Government on legal issues arising from implementation of the various transit agreements negotiated,
including the revision of Georgian legislation where necessary. Financial or fiscal skills may also be
needed to complement legal advisory skills. These advisors will only be needed once existing consultancy
contracts (financed by the Structural Reform Support Project, SRS) expire, and precise terms of reference
will be elaborated at that time.
-3 -
C. Company Audits will include financial audits (according to internationally-accepted standards) to be
conducted annually for GIOC and GGIC to enhance transparency of company operations (audits are to be
published in the Georgian press). The credit will finance part of the cost of the company audits in the first
year of the project only.
D. Non-pipeline Oil Spill Prevention and Mitigation Component will address oil spill risks related to
marine and rail transportation of oil, through (i) the provision of essential equipment to facilitate spill
response, monitoring and enforcement by the Ministry of Environment; (ii) consultant services; and (iii)
training.
E. Project Implementation will be provided by the PIU currently managing the technical assistance
component of the Structural Reform Support Project and the Judicial Reform Project, in conjunction with
GIOC, GGIC, the Ministry of Environment and other agencies responsible under the transit agreements.
This component will provide for office equipment, annual audit of the project accounts, incremental
operating costs and related needs.
Component
Environmental and Technical Advice
Sector
% of
Bankfinancing
% of
Bank-
(US$M)
Total
(US$M)
financin-
8.40
68.3
6.70
69.6
1.00
8.1
0.80
8.3
0.24
1.07
2.0
8.7
0.10
0.96
1.0
10.0
1.08
0.50
8.8
4.1
0.67
0.40
7.0
4.2
Total Project Costs
12.29
100.0
9.63
Total Financing Required
12.29
100.0
9.63
100.0
100.0
Legal Advice
Company Audits
Non-Pipeline Oil Spill Component
Oil & Gas
Transportation
Oil & Gas
Transportation
Other Finance
Oil & Gas
Transportation
Indirative
Costs
Project Implementation
Unallocated
-4 -
Identifiable taxes are estimated at US$2.15 million. Total cost net of taxes is US$10.14 million.
2. Key policy and institutional reforms supported by the project:
The project does not have a major reform orientation. However, the financial and political
sustainability of the institutional building to be achieved depends partly on rationalization of the financial
relations between the Government on the one hand, and GIOC and GGIC on the other hand. The project
aims to enhance the capacity of GIOC and GGIC to provide specific services to the Government to achieve
its transit pipeline objectives, rather than enhancing their own commercial operations. At the same time, the
revenue arrangements for existing transit pipelines do not adequately distinguish between quasi-tax
revenues and commercial revenues. For oil pipelines, the project will seek to establish a more appropriate
financial arrangement along the lines given below (which was developed in consultation with the IMF). For
gas pipelines, a similar arrangement will be sought once the nature of gas transit becomes as clear as for oil
transit. The main points of these agreements are to be published in the Georgian press, as are annual audits
of GIOC and GGIC. These agreements are expected to establish a model for other state enterprises in
Georgia.
I. As part of the annual government budget cycle, the Ministry of Finance and GIOC will agree on
the expected cost of services to be provided in the coming fiscal year by GIOC to the Government in
respect of implementation of the Baku-Supsa Pipeline Construction and Operating Agreement and the
Baku-Thilisi-Ceyhan Major Export Pipeline Host Government Agreement (and any other agreed transit
corridor). The services in question should be detailed in the agreement;
2. The "cost of services" can include remuneration of an agreed portion of GIOC's start-up capital
(e.g. part of the repayment of other loans, such as the subloan from the IDA Oil Institution Building
Credit). Any grant financing (by donors or the GoG Budget) of these services should be deducted from
the "cost of services" to be billed to GoG in terms of this agreement;
3. All tariff income from Baku-Supsa in excess of the agreed cost of services will be transferred to
the Ministiy of Finance as dividend income;
4. GIOC will be subject to annual audits of international standard to be submitted to the Ministry of
Finance by June 30 of the year following the audit year;
5. The Profit Tax levied on Baku-Thilisi-Ceyhan shall be remitted directly and in full by the MEP
Participants to the Budget as provided by the HGA (the HGA makes no provision for state revenue
from the MEP Participants other than the Profit Tax). No Profit Tax will be paid to GIOC.
3. Benefits and target population:
The proposed project will increase the capacity of key state agencies to negotiate and implement
pipeline transit agreements and other large infrastructure projects on behalf of the Government. Transit
pipelines are likely to be the largest investment in Georgia in the coming years, and could be the largest
single taxable entity by the latter half of this decade. Current plans envisage transit pipeline investments of
about US$ 1 billion in Georgia, which would be of very substantial macroeconomic significance. Oil
pipelines alone could bring US$ 50 million per year in tax revenue, and revenue from gas pipeline transit
could be significantly larger. Net fiscal benefits from such investments will be maximized with assistance
from the project, and the social and environmental impact will be more effectively managed. Georgia will
establish itself as a reliable host country for similar investments, and public perception of those investments
will be enhanced. The target population includes the whole of Georgia.
-5-
4. Institutional and implementation arrangements:
Procurement, financial management, and general oversight under the project will be handled by the
Project Implementation Unit currently implementing the technical assistance component of the Structural
Reform Support Project and the Judicial Reform Project, and one IDF grant (the PIU is attached to the
Ministry of Economy, Industry and Trade). In the past, the samne PIU also managed the Institution
Building Project, SATAC I, SATAC II, and two IDF grants. This PIU has seven years' experience
implementing Bank-financed projects involving multiple agencies, and has a proven track record.
Technical implementation of project components for oil pipelines will be coordinated by GIOC, for
gas pipelines by GGIC, and for non-pipeline oil spill issues by the Ministry of Environment. However,
given the complex nature of transit agreements, these designated core agencies will interact with numerous
other agencies in implementation of the project. Some consultancy contracts under the project will be
shared by GIOC and GGIC, and a steering committee has been established to ensure coordination (see
Section E.4). The Steering Committee is also intended to serve as a forum for interagency coordination
beyond implementation of the proposed project.
Project implementation is estimated to last four years. This estimate is based on expectations of
the date at which pipeline operations might commence. On current expectations, the assistance planned
under the proposed project will be needed from early 2001, and hence the project should not be delayed.
However, the evolution of project implementation is subject to considerable uncertainty, given the complex
nature of the pipeline investment decisions.
A mid-term review early in the project life (June 2002) will assess actual implementation of
pipeline investments against this background of uncertainty. Any project component which has not
progressed by this time will be subject to restructuring or cancellation. In addition, most contracts under
the project will be time-based, which will mitigate the risk that pipeline investmnents do not progress as
anticipated.
Financial Management System. ProjectAccounting: The PIU will establish and maintain project
accounts and adequate control procedures that facilitate timely and transparent reporting in accordance
with the Bank's FinancialAccounting, Reporting andAuditing Handbook (FARAH), published in January
1995, and by other pertinent Bank guidelines, including the Bank's Loan Administration Change Initiative
(LACd). Project accounts are computerized and are maintained using "Peach Tree" software package, and
the PIU may continue to use the existing accounting software, customizing it, as needed, to track all
financial and procurement activities for the new project. Project accounting procedures will be designed to
facilitate the preparation of Project Management Reports (PMRs), although it is envisaged that the Project
will use traditional disbursement procedures.
Project OperationalManual (POM): A draft Project Operational Manual, including: accounting policies
and procedures, internal control routines and the audit arrangement to be used during project
implementation, was submitted to the Association for comments/review in January 2001. After review and
approval by the Association, the final Project Operational Manual will be available by February 28, 2001.
Audits: The PIU will prepare Project Financial Statements and quarterly Project Management Reports
(PMR) in a formnat compatible with the LACI format and in accordance with international accounting
standards. The project accounts will be audited each fiscal year in accordance with IDA guidelines by
independent auditors acceptable to the Association. The PIU will ensure that all project audits are
-6-
furnished to IDA within six months of the end of each fiscal year. The PIU intends to use the same auditor
which audits the other projects it manages and has recruited the auditor using single source selection. A
draft contract for the audit was submitted to the Association for review in January 2001, and it is expected
that the contract with the auditor will be signed immediately after credit effectiveness.
PIUAssessment: The PIU satisfies the Bank's minimum financial management requirements, and was
certified as 4B, although some enhancements are needed. An Action Plan was agreed upon and the PIU is
well on its way to meeting the key elements of the Action Plan to enable it to produce the required level of
financial management information on a timely basis.
D. Project Rationale
1. Project alternatives considered and reasons for rejection:
Option 1: Leave this to other donors. The option of leaving the proposed assistance solely to
grant-based bilateral donors was considered. However, the Government values the political and
commercial neutrality of the Bank in this complex area, as well as the greater stakeholder involvement in
Bank selection procedures for consultants (an important issue for such strategic and sensitive tasks).
Donor funding for training will complement assistance under the proposed project.
Option 2: Address commercial issues also. The proposed project does not address commercial issues in
GIOC or GGIC (with the notable exception of rationalizing the quasi-fiscal revenues and dividend policies
of the two companies - see Section C.2.). These commercial issues have limited direct impact on the transit
pipeline advisory services GIOC and GGIC provide to the Government. Including such issues would
greatly increase project complexity, and risk substantially diminishing project ownership. In addition,
GIOC and GGIC have support from other donors to assist them in their commercial operations.
2. Major related projects financed by the Bank and/or other development agencies (completed,
ongoing and planned).
See Annex 2 for an account of previous Bank Group involvement in transit pipelines in Georgia.
;
Sector Issue
Project
Latest Supervislon
(PSR) Ratings
(Bank-financed
Implementation
Bank-financed
Progress (IP)
enhance capacity of state agencies to
Oil Institution Building
negotiate and implement pipeline transit
agreements (oil transit)
enhance capacity of state agencies to
Structural Reform Support
negotiate and implement pipeline transit
projects only)
Development
Objective (DO)
HS
HS
S
S
Structural Reform Support
S
S
Integrated Coastal Management
(with Netherlands Government)
S
S
agreements (oil and gas transit)
enhance state's revenue management
capacity
enhance state's marine oil spill
management capacity
-7-
improve legal framework for pipeline Energy Sector Adjustment
investments (particularly land
acquisition and environmental liability)
S
S
Other development agencies
enhance GIOC and GGIC capacity
(both ability to provide services to
Government and improvement of
commercial operations)
training in environmental assessment
and technical standards
enhance state's revenue management
capacity
USAID, USTDA, EU TACIS,
UNDP, UK KHF
USAID, Netherlands
Government
USAID, IMF
IP/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)
3. Lessons learned and reflected in the project design:
The main lessons learnt from previous Bank involvement in technical assistance for transit
pipelines in Georgia are: (i) there is a need for flexibility in project design to reflect considerable
uncertainty in pipeline implementation schedules; (ii) events can move very fast, and timely response is
essential; and (iii) Bank management involvement is critical, given political sensitivities.
4. Indications of borrower commitment and ownership:
The proposed project is a follow-on to the Oil Institution Building Project (which focused on oil
pipeline transit), the gas transit component of the Structural Reform Support Project, and the oil spill
component of the Integrated Coastal Management Project. The implementing agencies for those projects
(which are the same agencies as for the proposed project) have displayed consistent commitment to project
objectives. Bank involvement in transit pipelines has been strongly supported by President Shevardnadze
and other key members of the Government. The request for the proposed project was initially made by the
Georgian Minister of Foreign Affairs to the Regional Vice-President of ECA.
5. Value added of Bank support in this project:
Value-added derives from the Bank's regional overview of Caspian oil and gas developments, and
its international experience in large infrastructure projects (particularly the Bank's evolving experience in
social and environmental mitigation of pipeline projects). See Section D. 1. on the comparative advantage of
the Bank vis-a-vis other donors.
E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8)
1. Economic (see Annex 4):
NPV=US$ million; ERR = % (see Annex 4)
O Cost effectiveness
* Other (specify)
Institution-building projects do not lend themselves to quantification of economic and financial
returns. However, the economic returns to Georgia, and the financial/fiscal returns to the Government, are
expected to be considerable through the project's impact on the terms achieved by the State in negotiation
and implementation of transit agreements. In addition, the project supports greater transparency in the
operations of GIOC and GGIC, and the establishment of clear mechanisms for channeling quasi-fiscal
O Cost benefit
-8-
revenues to the Government budget.
2. Financial (see Annex 4 and Annex 5):
NPV=US$ million; FRR = % (see Annex 4)
see section E. 1
Fiscal Impact:
see section E. 1
3. Technical:
N/A
4. Institutional:
4.1 Executing agencies:
The Ministry of Environment, as the key agency responsible for environmental permitting,
monitoring, and enforcement will be intensively involved in the execution of the project. GIOC, as the
agency designated by the President, to coordinate oil transit pipeline issues, will oversee the oil pipeline
aspects of the project. Similarly, GGIC will oversee the gas transit pipeline aspects. The Ministry of
Finance will oversee the rationalization of financial relations between GoG, GIOC, and GGIC (see section
C.2), and will take a lead role on fiscal issues in pipeline transit negotiations.
4.2 Project management:
Procurement, financial management, and general oversight under the project will be handled by the
Project Implementation Unit currently implementing the technical assistance components of the Structural
Reform Support Project and the Judicial Reform Project, and one IDF Grant (the PIU is attached to the
Ministry of Economy, Industry and Trade). In the past the same PIU has managed the Institution Building
Project, SATAC I, SATAC II, and two IDF Grants. This PIU has seven years' experience implementing
Bank-financed projects involving multiple agencies, and has a proven track record.
A Steering Committee has been established to ensure coordination between the PIU and the
executing agencies (the PIU focusing on project management, and the executing agencies on technical
oversight). The Steering Commnittee will be composed of high level representatives from the Ministry of
Finance, Ministry of Environment, GIOC, GGIC and the PIU. The Steering Committee will establish
monthly activity schedules, and review implementation progress against those schedules.
4.3 Procurement issues:
The PIU will handle all procurement under the project (see 4.2). A procurement capacity
assessment of the PIU was completed in September 2000, and indicated that the procurement capacity of
the PIU is sound. More details of the review can be found in Annex 6.
4.4 Financial management issues:
The PIU will be responsible for all financial management under the project (see 4.2). Project
accounting procedures will be designed to facilitate preparation of PMRs, although it is envisaged that the
project will use the Bank's traditional disbursement procedures. A financial management capacity
assessment was carried out in September 2000, and the full report is available in Annex 6. The assessment
concluded that because the existing PIU has vast experience and a proven track record in implementing
-9-
Bank-financed projects, project management responsibilities can be given to the existing PIU, on condition
that the current level of staffing, with appropriate skills, be maintained. The project satisfies the Bank's
minimum financial management requirements, although some enhancements are needed. A timebound
Action Plan was agreed, which requires the PIU to design and implement an enhanced financial
management system by March 31, 2001, including the following actions, which were completed in January
2001: draft contract for the audit of the project and draft Project Operational Manual (POM) were
submitted to the Bank for review. Once this time-bound action plan is carried out successfully, the project
will have developed a financial management system capable of producing on a timely basis the required
level of financial management information.
5. Environmental:
Environmental Category: C (Not Required)
5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including
consultation and disclosure) and the significant issues and their treatment emerging from this analysis.
Since the project consists of technical assistance services, and scientific equipment related to
studies, the project is classified as a Category C. Neither an environmental assessment nor an EMP are
required. The project itself has a major environmental management focus by assisting in the review of the
environmental reports that will be submitted for construction of pipeline facilities. Under the project,
technical assistance to government agencies will be provided to ensure that adequate review of
environmental studies is carried out for the major oil and gas transit pipelines, and that compliance with
permitting requirements and liability legislation is effectively monitored. Public consultation and outreach
form an integral part of that process. For non-pipeline oil spill prevention, a separate project component of
technical assistance is included.
5.2 What are the main features of the EMP and are they adequate?
N/A
5.3 For Category A and B projects, timeline and status of EA:
Date of receipt of final draft: N/A
5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b) draft EA
report on the environmental impacts and proposed environment management plan? Describe mechanisms
of consultation that were used and which groups were consulted?
N/A
5.5 What mechanisms have been established to monitor and evaluate the impact of the project on the
environment? Do the indicators reflect the objectives and results of the EMP?
N/A
6. Social:
6.1 Summarize key social issues relevant to the project objectives, and specify the project's social
development outcomes.
Actual pipeline construction and operation will involve right-of-way issues. The project will fund
technical assistance to mitigate the social impact of pipeline right-of-way issues (to ensure fair
compensation to landowners and neighboring communities, adequate govermmental review of investor
social impact assessments etc.).
6.2 Participatory Approach: How are key stakeholders participating in the project?
Key government agencies have been intensively involved in project preparation, and will implement
the project. Advice of relevant private sector entities (particularly oil and gas companies) has been sought
- 10 -
during project design. Local consultants from the environmental community are expected to participate in
the provision of consultancy advice financed by the project. The project finances a consultative process for
environmental and social impact assessment, and includes subsequent public outreach.
6.3 How does the project involve consultations or collaboration with NGOs or other civil society
organizations?
This technical assistance project will finance a process of stakeholder consultation as actual
pipeline investments advance.
6.4 What institutional arrangements have been provided to ensure the project achieves its social
development outcomes'?
Affected land owners need to be informed and assisted during the land acquisition phase which is
carried out by the pipeline investors. To ensure more inclusive participation in planning and decision
making, the project will include the following mechanisms: (a) distribution of land owners information
materials (i.e. model agreements for land evaluation and land acquisition) and local work session to inform
and prepare the affected land owners for the negotiation with the pipeline investors, (b)
strengthening/creation of capacity within the government and its implementing agencies to foster improved
dialogue and conflict resolution between land owners and pipeline investors, (c) providing access to public
documents concerning the legal arrangement (i.e. eminent domain) for land acquisition, and (d)
dissemination of the results of the EIA and SIA including public hearings.
6.5 How will the project monitor performance in terms of social development outcomes?
The social impact and social development outcomes resulting from pipeline investments will be
explicitly indicated in the Social Impact Assessment which is carried out by the pipeline investors. Due to
the nature of pipeline projects, a main indicator in the SIA process will be to assess the land evaluation
process and land ownership transfer. Therefore, priority will be given to monitoring the stakeholder
satisfaction with the land evaluation and negotiations process as well as monitoring of the public hearings.
The proposed Energy Transit Institution Building Project will fund disseminatioti of public
information concerning the proposed pipeline investments. In particular, it will finance legal and economic
guidelines concerning the land evaluation and land acquisition process, as well as guidelines for
participation in the public hearing process.
Monitoring, identification, and mitigation of social impacts will be a joint responsibility for
investors and the Government. Both activities will occur on an iterative basis throughout the project life
cycle. The terms of reference of the advisors financed by the project provide sufficient flexibility to deal
with monitoring of mitigation of unpredictable social impacts.
- 11 -
7. Safeguard Policies:
7 1 Do anN of the following safeguard policies apply to the projeci?
Polcy
Environmental Assessment (OP 4.01, BP 4.01, GP 4.01)
Natural habitats (OP 4.04, BP 4.04, GP 4.04)
Forestry (OP 4.36, GP 4.36)
Pest Management (OP 4.09)
Cultural Property (OPN 11.03)
Indigenous Peoples (OD 4.20)
Involuntary Resettlement (OD 4.30)
Safety of Dams (OP 4.37, BP 4.37)
Projects in International Waters (OP 7.50, BP 7.50, GP 7.50)
Projects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60)
Applicablity
0 Yes 0 No
O Yes * No
D
Yes * No
0 Yes * No
0 Yes * No
0 Yes * No
O Yes * No
0 Yes 0 No
0 Yes * No
0 Yes * No
7.2 Describe provisions made by the project to ensure compliance with applicable safeguard policies.
None of the above safeguard policies are applicable.
- 12 -
F. Sustainability and Risks
1. Sustainability:
It is critical to the sustainability of project benefits that transit pipelines retain high-level political
support in Georgia, but that political objectives do not overwhelm economic, social and environmental
considerations in order to ensure broad-based stakeholder ownership. It is important that state agencies
with divergent objectives (in particular GIOC and GGIC) manage to coordinate their activities. In addition,
the sustainability of project benefits will be enhanced if foreign investors in transit pipelines behave as good
corporate citizens.
2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex I):
Risk
From Outputs to Objective
Risk Rating
Risk Mitigation Measure
Private investors do not proceed with oil
pipeline
H
Private investors do not conclude
negotiations or fail to proceed with
implementation of gas pipeline
Investors do not fully respect oil or gas
transit agreement provisions
S
Early mid-term review to consider project
restructuring if needed, and use of time-based
contracts for most consultants
Early mid-term review to consider project
restructuring if needed, and use of time-based
contracts for most consultants
Georgia fulfills its side of the bargain, and
monitors investor performance closely using
capacity built by the project
Credible negotiating positions using capacity
built by the project, consensus-building through
public outreach on importance of transit
agreements being stable over time, and dialogue
with Bank and IMF
GIOC and GGIC maintain past track record in
managing consultants. Each agency has
designated a coordinator who will be responsible
for technical supervision of the consultants.
M
Short-term political interventions override
long-term economic and environmental
objectives in transit negotiations
H
Consultants are poorly-managed by
GIOC, GGIC, and Ministry of
Environment
M
From Components to Outputs
Poor coordination between key agencies
S
Strong government oversight from high level,
and establishment of steering committee,
combined with Bank supervision and
involvement of key advisors in coordination
Lack of staff continuity at PIU and other
agencies.
Inadequate counterpart funds
M
Government-Bank dialogue on importance of
continuity
Government-Bank dialogue
M
H
Risk Rating - H (High Risk), S (Substantial Risk), M(Modest Risk), N(Negligible or Low Risk)
Overall Risk Rating
- 13-
3. Possible Controversial Aspects:
The project is unlikely to be controversial, even though the pipelines themselves can be expected to
be so. The pipelines give rise to geopolitical controversy, and social/environmental concerns; the project is
politically neutral between different pipeline options, and assists in the management of social/environmental
impacts.
G. Main Loan Conditions
1. Effectiveness Conditions
i.
The Borrower has entered into agreements acceptable to the Association between GIOC and the
Borrower, and between GGIC and the Borrower, governing financial relations between the Borrower and
GIOC and GGIC with effect from Government Budget year 2001, and the main points of the agreements
have been published in the territory of the Borrower.
The project Steering Committee has been appointed with membership and mandate acceptable to
ii.
the Association.
iii.
The Borrower has opened the Project Account with deposit of an initial amount of US$ 100,000.
2. Other [classify according to covenant types used in the Legal Agreements.]
i.
Annual signature of agreements acceptable to IDA governing financial relations between the
Government of Georgia, and GIOC and GGIC respectively (commencing with coverage of Government
Budget year 2002). Main points of the agreements to be published in the Georgian press within one month
of conclusion of the agreements;
ii.
Continuity of project Steering Committee arrangements as specified in effectiveness condition,
unless changes have been agreed with IDA;
iii.
PIU to submit audit reports and audited financial statements, including management letters, for the
project, not later than six months after the close of the fiscal year;
iv.
PIU to submit to IDA by September 30, 2005 the Borrower's contribution to the Implementation
Completion Report;
v.
PIU to maintain adequate staffing with appropriate skills;
vi.
Mid-term review by June 30, 2002 to assess overall progress in project implementation;
vii.
PIU to submit to IDA within 60 days after the end of each calendar year a report integrating the
results of the monitoring and evaluation activities and recommending measures to ensure the efficient
carrying out of the Project and the achievement of the project objectives;
viii.
Borrower to carry out a timebound Action Plan acceptable to IDA for the strengthening of its
financial management system for the Project in order to enable it, not later than June 30, 2001, to prepare
quarterly Project Management Reports, acceptable to IDA;
ix.
Borrower shall cause the PIU to implement the financial management system action plan not later
- 14 -
than June 30, 2001;
x.
Borrower to maintain a Project Account, wherein it shall deposit an amount from its own resources
sufficient to cover the portion of counterpart financing requirements for local expenditures for which the
Borrower is responsible under the project financing plan and which are projected to be made under the
project in the three months succeeding. Except as otherwise agreed by IDA, the balance in the Project
Account, as of the first day of each quarter, shall not be less than $100,000.
H. Readiness for Implementation
1. a) The engineering design documents for the first year's activities are complete and ready for the start
of project implementation.
Z 1. b) Not applicable.
0
1 2. The procurement documents for the first year's activities are complete and ready for the start of
project implementation.
Z 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactory
quality.
0 4. The following items are lacking and are discussed under loan conditions (Section G):
1. Compliance with Bank Policies
1 1. This project complies with all applicable Bank policies.
EO 2. The following exceptions to Bank policies are recommended for approval. The project complies with
all other applicable Bank policies.
NiL5-~ (&Peter D. Thomson
Team Leader
&
t
Hossein Razavi
Sector Manager
-15-
i
-~-
_
^
/\*
__
Judy M. O'Connor
Country Manager
_
_
Annex 1: Project Design Summary
GEORGIA: Energy Transit Institution Building
Key Polwn'ance
Critical Assumptions
Monitoring & Evaluation
Hlerarchy of Objectives
indicators
Sector! country reports:
(from Goal to Bank Mission)
Sector-related CAS Goal:
Sector Indicators:
The project supports three of Sustainable fiscal stance, and Macroeconomic reports from The Government remains
macroeconomic stability.
IMF and World Bank.
committed to private
the CAS priorities, namely:
participation in infrastructure
"I) stabilization support, as
as being critical to econom .c
Improved public perception of
continued weaknesses in
growth and poverty reduction,
public finance jeopardize the environmental management.
and pursues
stabilization objective; 2)
environmentally-sustainable
strengthen and diversify
development.
sources of growth by removing
remaining barriers to private
sector development; and 3)
assist the Government in
introducing institutional and
policy reforms needed to
protect Georgia's
environmental and natural
resources."
Project Development
Objective:
The project aims to enhance
the capacity of the Georgian
State to negotiate and
implement oil and gas transit
agreements in a manner that
maximizes economic benefits,
and minimizes social and
environmental costs. Georgia
has considerable potential for
transit of hydrocarbons,
particularly by comparison to
its other economic assets.
However, realizing positive
net benefits from large transit
investments (in a very
complex geopolitical context)
requires very careful
management by the State and
substantial institution
building.
Outcome I Impact
Indicators:
Expected benefits actually
realized.
Project reports:
(from Objective to Goal)
Mid-term review and
supervision reports by Bank
staff. Reports from
consultants.
Transit agreements balance
the interests of Georgia and
private investors, thereby
increasing the probability that
agreements will be politically
sustained.
- 16 -
Key Performance
Indicators
of
Objectlves
Hierarchy
Output Indicators:
Output from each
Component:
Fulfillment of legal
A. The Government of
Georgia will have fulfilled its agreements and legislation.
environmental, social and
technical obligations under the
pipeline transit agreements
and Georgian law.
B. The Government of
Georgia will have achieved
maximum benefit from legal
interpretation of transit
agreements (while avoiding
unnecessary legal disputes),
and will have revised
Georgian legislation where
necessary for this purpose.
Critical Assumptions
Monitoring & Evaluation
(from Outputs to Objective)
Project reports:
Mid-term review and
supervision reports by Bank
staff. Reports from
consultants.
Private investors proceed with
oil and gas pipelines, and fully
respect transit agreement
provisions.
Political interventions are
measured against economic
and environmental objectives
in transit negotiations and
implementation
Benefits realized, and
legislative amendments
adopted.
C. GIOC and GGIC will have Audit reports published.
been audited according to
international standards, and
the audits will have been
published.
Mid-term review and
supervision reports by Bank
staff. Reports from
consultants.
Political interventions are
measured against economic
and environmental objectives
in transit implementation.
Audit reports and Bank staff
review of those reports.
GIOC and GGIC remain
committed to transparent
operations.
D. The Ministry of
Environment will have
monitored and enforced
compliance with liability
legislation and technical
standards to prevent/mitigate
oil spills, and will have
undertaken spill mitigation
where it is directly
responsible.
Actual examples of
enforcement and mitigation.
Mid-term review and
supervision reports by Bank
staff. Reports from
consultants.
Ministry of Environment
remains committed to sound
environmental management
practices, and is not overruled
for political or other reasons.
E. Procurement, contract
management, and financial
management of the project
will have been carried out in
accordance with Bank
guidelines.
No breaches of guidelines
identified on review.
PIU progress reports, Bank
supervision reports.
Consultants are well-managed
by GIOC, GGIC, and Ministry
of Environment.
- 17-
Mid-term review and
supervision reports by Bank
staff. Reports from
consultants.
(from Components to
Outputs)
Good coordination between
key agencies, particularly
GIOC, GGIC, and Ministry K)f
Environment.
B. Legal Advice for Pipeline US$ 1.00 million
Implementation will include
specialized pipeline lawyers to
advise the Governrment on
legal issues arising from
implementation of the various
transit agreements negotiated,
including the revision of
Georgian legislation where
necessary. Financial or fiscal
skills may also be needed to
complement legal advisory
skills.
Mid-term review and
supervision reports by Bank
staff. Reports from
consultants.
Good coordination between
key agencies, particularly
GIOC, GGIC, and Ministry c f
Environment.
C. Company Audits will
include financial audits
(according to
internationally-accepted
standards) to be conducted
annually for GIOC and GGIC
to enhance transparency of
company operations.
Audit reports, and review by
Bank staff.
Auditors are well-selected
Project Components I
Inputs: (budget for each
Sub-components:
component)
A. Environmental and
US$8.40 million.
Technical Advice for
Pipeline Implementation will
include consultancy services to
assist the Government in
fulfilling its obligations under
oil and gas pipeline transit
agreements on a timely basis
(Georgia incurs substantial
liabilities if there are delays
against very short deadlines in
the agreements). This will
involve environmental, social,
technical, and public relations
consultants (international and
local) to address oil and gas
transit issues jointly. It will
also include
technical/environmental
advisors for negotiations of
transit of gas from (or
through) Russia.
US$ 0.24 million
Project reports:
- 18 -
US$ 1.07 million
Mid-term review and
supervision reports by Bank
staff. Reports from
consultants.
Good coordination between
Ministry of Environment and
other state agencies
E. Project Implementation US$ 1.08 million
will be provided by the PIU
currently managing the
Structural Reform Support
Project, in conjunction with
GIOC, GGIC, the Ministry of
Environment and other
agencies responsible under the
transit agreements. This
component will provide for
office equipment and related
needs.
PIU progress reports, Bank
supervision reports.
Staff continuity at PIU and
other agencies.
D. Non-pipeline Oil Spill
Prevention and Mitigation
Component will address oil
spill risks related to marine
and rail transportation of oil,
through (i) the provision of
essential equipment to
facilitate spill response,
monitoring and enforcement
by the Ministry of
Environment; (ii) consultant
services; and (iii) training.
Adequate counterpart
contribution.
- 19-
Annex 2: Detailed Project Description
GEORGIA: Energy Transit Institution Building
Background
Georgian cooperation with the World Bank Group over pipeline transit began in 1995. At that
time, the Government of Georgia and the Georgian International Oil Corporation (GIOC), the state agency
responsible for coordinating oil pipeline transit, requested financing on an urgent basis for short-term
advice in their "Early Oil" negotiations with the Azerbaijan International Operating Company over the
Baku-Supsa pipeline. GIOC was newly established, and Georgia was undertaking its first involvement in a
privately financed large infrastructure project. This collaborative effort with the Bank later developed into
a range of cooperation with the Bank Group to build institutions, enhance the policy framework, and to
finance investment in infrastructure.
In 1997, Georgia and the World Bank agreed on an Oil Institution Building Project. The Bank
credit financed a feasibility study of a potential Baku-Supsa major export pipeline (MEP), as well as
financial and legal advisors for MEP negotiations. The feasibility study covered economic, financial, legal,
engineering and environmental issues, and provided GIOC with substantial training in those disciplines. It
also involved the extensive use of Georgian consultants (particularly environmental scientists) alongside
international experts, ensuring that local knowledge was incorporated and that technology was effectively
transferred. In addition, a National Oil Spill Contingency Plan is being prepared under the Integrated
Coastal Management Project financed by the Netherlands Government. The final report is available.
The training provided by the Baku-Supsa feasibility study helped to prepare GIOC for the
negotiations of the Baku-Thilisi-Ceyhan Intergovermnental and Host Government Agreements (the Oil IGA
and Oil HGA respectively). This was complemented by internationally experienced negotiation advisors.
The Georgian Government and GIOC were thus able to formulate negotiating positions in a better-informed
manner than had been the case for Early Oil.
The law on eminent domain allowed Georgia to negotiate provisions in the Baku-Thilisi-Ceyhan
HGA that significantly reduce the Government's cost exposure in acquisition of land or access rights for the
pipeline corridor. Those provisions in the HGA, and the new law on eminent domain, should ensure that the
pipeline investors will adequately compensate private landowners whose land is needed for that corridor.
The law on transportation of hazardous substances ensures that polluters pay for any pollution. It imposes
"strict" liability on a pipeline operator, such that the operator is obliged to clean up oil spills and
compensate for damage, even if that damage were caused by a third party (the operator can then seek
restitution from the third party). The law should ensure that pollution is cleaned up quickly, and that parties
suffering loss can claim compensation. The law's provisions were incorporated in the Oil HGA.
Georgia and the Bank have also cooperated in gas pipeline transit. The Structural Reform Support
Project has provided funding for fmancial and legal advisors for the Georgian Gas International
Corporation (GGIC, the state agency responsible for coordinating gas pipeline transit) to better assist the
Government in transit negotiations.
Within the framework of the Energy Transit Institution Building Project technical, environmental
and legal advisors are required to provide support and enhance the capacity of the Georgian Government to
implement Oil and Gas transit agreements in a manner that maximizes economic benefit, ensures that
design, construction and operation of the facilities are in compliance with international technical and
environmental standards and best practices, and minimizes social impacts. For effective and targeted
- 20 -
assistance the ETIB includes five individual project components:
By Component:
Project Component I - US$8.40 million
Environmental and Technical Advice for Pipeline Implementation will include consultancy services to
assist the Government in fulfilling its implementation obligations under oil and gas pipeline transit
agreements on a timely basis (Georgia incurs substantial liabilities if there are delays against very short
deadlines in the agreements). These services will focus on reviewing environmental/social impact
assessments, permitting, compliance monitoring, and public outreach. The component will thus go beyond
environmental impact assessment, and will strengthen long-term environmental management capacity.This
will involve environmental, public communications, social and technical consultants (international and
local) to address East-West oil and gas transit implementation issues jointly. The environmental and
technical (route selection) advisors will be under separate, but complementary, terms of reference. This
project component will also include technical/environmental advisors for negotiations of transit of gas
North-South from Russia (technical advisors for East-West gas transit negotiations have been provided by
USTDA).
A) The scope of work for environmental advisors on the East-West oil and gas pipelines includes
several elements to support the GoG (and its implementing agencies) to: (i) fulfill its environmental and
social review obligations under the IGAs and HGAs; (ii) monitor the public review process for the
EIA/SIA, and facilitate widespread public participation and information dissemination; (iii) ensure that
international standards and best practice in respect to the EIA and SIA are applied; (iv) provide support in
continuing negotiations with the pipeline investors/sponsors conceming additional environmental and social
issues which may arise during the implementation phase; and (v) carry out a training program which is
targeted to build institutional capacity in respect to the EIA and SIA review process.
In more detail the Terms of Reference include but are not limited to:
1.
Assist the Government of Georgia to fulfill its "environmental review" obligations under transit
agreements on a timely basis. (Georgia incurs substantial liabilities if there are delays against very short
deadlines in the Oil HGA). The principal agencies to be involved are GIOC, GGIC, and the Ministry of
Environment. The scope of services shall include but not be limited to:
(a)
to review and comment on the environmental issues pertaining to the route selection process as
described in each HGA;
(b)
to assess the capacity of independent consultants employed by the pipeline investors/sponsors for
preparing the environmental strategy products (i.e. scoping study, social impact assessment, baseline study
and environmental impact assessment) and provide conmments on their acceptability for this work;
(c)
to review and comment on the documents pertaining to the environmental strategy product (i.e.
scoping study, social impact assessment, baseline study and environmental impact assessment) as outlined
in each HGA; and
to advise on the adequacy of the public review process of the EIA carried out by the pipeline
(d)
investors/sponsors, as outlined in each HGA.
Note: the remaining components of the environmental strategy products (i.e. risk assessment and spill
response plan) will be reviewed by the technical advisor. However, a cross-review by the environmental
- 21 -
advisor of those documents will be required.
Provide support to the Government of Georgia during the implementation of each HGA and to
2.
support negotiations/discussions related to future oil and gas transit agreements. The proposed
environmental advisory service will also provide on a "as needed" basis support to the Government of
Georgia and its agencies GIOC and GGIC for negotiations/discussions pertaining to the HGAs for Oil and
Gas Transit or to other related transit agreements. The scope of services shall include but not be limited to:
to support and assist the Government of Georgia and its agencies with respect to environmental and
(a)
safety issues in meetings with the pipeline investors/sponsors;
(b)
to support and assist the Government of Georgia and its agencies as well as other advisors
(technical, legal, economic and financial) in continuing negotiations with the pipeline investors/sponsors
concerning additional issues which may arise during the implementation phase;
(c)
to review and comment on any additional documents pertaining to the route selection process and
environmental strategy products which may be submitted by the pipeline investors/sponsors for
coordination purposes. In particular the environmental advisor shall monitor if the pipeline Right of Way
(ROW) selection by the pipeline investors/sponsors is in accordance with the relevant environmental
standards as outlined in the respective HGA and evaluate social and environmental impacts and proposed
mitigation measures;
(d)
to support and assist the Government of Georgia and its agencies in acquiring and preparation of
all social and environmental infornation and data necessary for the pipeline investors/sponsors to carry out
the route selection process in accordance with the process outlined in the respective HGA;
(e)
to compile and supply all socio-economic and environmental data on the pipeline corridor and final
ROW which are relevant for incorporation into a Geographic Informnation System (GIS). The GIS will be
developed and maintained by the technical advisor;
(f)
to support and assist the Government of Georgia and its agencies in identifying social and
environmental issues pertaining to ROW and access to the pipeline corridor for the pipeline
investors/sponsors. In particular this includes a thorough evaluation of the procedure proposed by the
pipeline investors/sponsors for land users/occupiers subject to resettlement, sensitive areas and wilderness,
coastal areas and wetlands and cultural properties;
(g)
to support and assist the Government of Georgia and its agencies in all social and environmental
aspects of the pernit procedures for transit pipelines as outlined in the HGAs;
(h)
to provide on the job and possibly other training for a group of selected staff from the Government
of Georgia and its implementing agencies in respect of environmental management aspects of oil and gas
pipelines projects. Furthermore, the training material shall also include examples and case studies of social
and environmental impact assessment of existing or planned oil or gas pipelines in the European Union or
North America to demonstrate step by step the applicable pertnitting and review process, to explain in
detail the rationale for the selection of recommended mitigation measures and monitoring programs;
- 22 -
(i)
to review and advise on all required social and environmental documentation, applicable standards
and best international practice for social and environmental impact assessment, and risk assessment.
Furthermore, the environmental advisor shall indicate if the applicable standards outlined in the HGAs or
used in the implementation are in compliance with international best practices (in particular North
American or European Union) and the relevant social and environmental safeguard policies published by
the World Bank Group;
(j)
to advise the Government of Georgia concerning the capacity of respective Ministries and agencies
in charge of monitoring and enforcement of mitigation measures and propose further training if found
necessary;
(k)
to provide the Government of Georgia and its agencies with experienced technical
interpretation/translation;
B) The scope of work for technical (route selection) advisors on the East-West oil and gas pipelines
includes several elements to support the GoG and its implementing agencies in respect to: (i) fulfill its
technical review obligations under the IGAs and HGAs, (ii) ensure organizational effectiveness in providing
infornation to the pipeline investors and land owners concerning the land acquisition of the pipeline Right
of Way, (iii) ensure that international standards and best practice in respect to pipeline design and safety
are applied, (iv) provide support in continuing negotiations with the pipeline investors/sponsors concerning
additional technical and route selection issues which may arise during the implementation phase and (v)
carry out a training program which is targeted to build institutional capacity in respect to permitting
procedures for pipeline for hydrocarbon transport.
In more detail the Terms of Reference include but are not limited to:
I.
To assist the Government of Georgia to fulfill its obligations under the IGAs and HGAs (and other
related agreements) on a timely basis. (Georgia incurs substantial liabilities if there are delays against very
short deadlines in the Oil HGA). The principal agencies involved are GIOC, GGIC, and the Ministry of
Environment. The scope of services shall include but not be limited to:
(a)
to review and comment on the documents pertaining to each route selection process as described in
the respective HGA;
(b)
to assess the capacity of independent consultants employed by the pipeline investors/sponsors for
preparing the environmental strategy products (i.e. risk assessment and spill response planning) for each
project and provide comments on their acceptability for this work;
(c)
to review and comment on the documents pertaining to the environmental strategy product (i.e. risk
assessment and spill response planning) for each project outlined in the respective HGA;
(d)
to analyze and develop the basic framework and information outlined in each HGA to facilitate the
land acquisition process;
(e)
to review and comment on the basic and final design of the facilities and in particular if the design
is in compliance with the technical standards outlined in the respective HGA;
2.
Provide support to the Government of Georgia for negotiations/discussions related to oil and gas
- 23 -
transit agreements The proposed technical advisory service will also provide on an "as needed" basis
support to the Government of Georgia and its agencies GIOC and GGIC for negotiations/discussions
pertaining to the HGAs for oil and gas transit pipeline projects, or to other related transit agreements. The
scope of services shall include but not be limited to:
(a)
to support and assist the Government of Georgia and its agencies in coordination meetings with the
pipeline investors/sponsors for each project;
(b)
to support and assist the Government of Georgia and its agencies as well as other advisors
(environmental, legal, economic and financial) in continuing negotiations with the pipeline
investors/sponsors concerning additional issues which may arise during the implementation phase;
(c)
to review and comment on any additional documents pertaining to each pipeline project's route
selection process, environmental strategy products and design of the facilities which may be submitted by
the pipeline investors/sponsors for coordination purposes. In particular the technical advisor shall monitor
if the Right of Way (ROW) selection by the pipeline investors/sponsors is in accordance with the relevant
technical and environmental standards as outlined in the respective HGA;
(d)
to support and assist the Govermment of Georgia and its agencies in acquiring and preparation of
all technical information and data necessary for the pipeline investors/sponsors to carry out the route
selection process as outlined in the route selection and land acquisition process of the respective HGA. In
particular the technical consultant shall ensure organizational effectiveness in the data collection and
evaluation process;
(e)
to supply a Geographic Information System (GIS) and built up GIS data base to establish and
maintain all aspects of ROW information and activities pertaining to the oil and gas pipeline corridor. This
includes incorporation and regular updates with social and environmental data supplied by other advisors in
particular the environmental advisor;
(f)
to support and assist the Government of Georgia and its agencies in acquiring the ROW for the
pipeline routes agreed with the pipeline investors/sponsors. This includes identification, notification of land
users/occupiers as well as setting up a transparent procedure for evaluation of the fair and reasonable
compensation to be paid by the pipeline investors for land;
(g)
to support and assist the Government of Georgia and its agencies in all aspects of the permit
procedures for transit pipelines as agreed in the respective HGA;
(h)
to provide on the job training for a group of selected staff from the Government of Georgia and its
implementing agencies in respect of the technical and organizational aspects of document review, route
selection, permit procedures, land evaluation/acquisition and GIS. Furthermore, the technical advisor shall
organize site visits of transit pipelines (at least one oil and one gas pipeline) operated by western companies
as well as visits to the relevant permiit authorities and government representatives for the respective
pipelines. The site visits shall also include a three day seminar to discuss examples and case studies of
permits of existing or planned oil or gas pipelines in the European Union or North America to demonstrate
step-by-step the applicable pemnitting and review process;
- 24 -
(i)
to review and advise on all required technical documentation, applicable standards and best
international practice, including but not limited to route selection, pipeline design, construction and
operation as well as industry specific safety and environmental issues (in particular, recent developments in
North America and the EU in respect to pipeline safety and environmental risk analysis);
(j)
to provide the Government of Georgia and its agencies with experienced technical
interpretation/translation.
C) The scope of work for the technical/environmental advisors for negotiations of North-South transit
of gas will include:
(i)
to advise GGIC on all technical and environmental aspects of the Project, in particular to review
from a technical perspective all proposals, studies (including feasibility and other technical advisors to
project participants), reports, and tenders;
(ii)
to advise GGIC on cost estimates for new pipeline infrastructure, as well as on technical evaluation
of the existing gas infrastructure and cost estimates for rehabilitation and any other investment which may
be necessary to bring the existing infrastructure which can be used for the gas transit projects to
international technical, environmental and safety standards;
(iii)
to support and assist GGIC and the Lead Advisor in the negotiations phase, including assisting in
the preparation of negotiating options and opening negotiation positions;
(iv)
to review and advise on all required technical documentation, including but not limited to pipeline
design, construction and operation as well as industry specific safety and environmental issues;
(v)
to review and comment on any additional documents pertaining to the route selection process,
environmental strategy products (e.g. scoping, baseline, risk assessment and EIA) and design of the
facilities which may be submitted by the Pipeline Investors for coordination purposes. In particular the
technical advisor shall monitor if the Right of Way (ROW) selection by the Pipeline Investors is in
accordance with the relevant technical and environmental standards;
(vi)
to support and assist the GGIC in acquiring and preparation of all technical and environmental
information and data necessary for the Pipeline Investors to carry out its route selection process;
(vii)
to support and assist the Government of Georgia and its agencies in acquiring the ROW for the
pipeline corridor selected by the Pipeline Investors. In particular the technical consultant shall ensure
organizational effectiveness in regard to identification, notification of land users/occupiers as well as
setting up a transparent procedure for evaluation of the compensation offered by the Pipeline Investors for
Land;
(viii) to advise and assist GGIC in preparation and implementation of a gas metering configuration
suitable for custody transfer of transit pipelines and in accordance to international standards;
(ix)
to support and assist the Government of Georgia and its agencies in all aspects of the permit
procedures for transit pipelines;
(x)
to advise and assist GGIC in the technical and organizational requirements for an operating
- 25 -
company of a gas transit pipeline;
(xi)
to develop a comprehensive model to obtain the economic and financial cost for gas transit. The
model should be structured to enable ongoing analyses under a variety of throughput, cost, financing,
investment, tax and tariff assumptions in response to project developments. In particular, the model should
show explicit trade-offs between inter alia tax/transit fee revenue and rate of return on Georgian equity (if
any). The financial advisor will provide input in respect to assumptions for financing, investment and tax
used in the model. However, the technical advisor shall have the overall responsibility for development of
the model. Training to enable GGIC personnel to modify the model, to reflect substantive changes in
structures, assumptions and methodologies as the project progresses shall be included;
(xii)
to provide on the job and possibly other training to at least two GGIC personnel in respect of the
technical and organizational aspects of the Project, and in particular in respect of GGIC' s participation in
the Project. This is with a view to leaving GGIC with personnel capable of performing day-day technical
and organizational tasks;
(xiii) to provide experienced technical interpretation/translation during negotiations and implementation
phases of the Project.
Project Component 2 - US$1.00 million
Legal Advice for Pipeline Implementation will include specialized pipeline lawyers to advise the
Government on legal issues arising from implementation of the various transit agreements negotiated,
including the revision of Georgian legislation where necessary. Financial or fiscal skills may also be
needed to complement legal advisory skills. These advisors will only be needed once existing legal (and
financial) consultancy contracts (financed by SRS) expire, and precise terms of reference will be elaborated
at that time.
Project Component 3 - US$ 0.24 million
Company Audits will include financial audits (according to internationally-accepted standards) to be
conducted annually for GIOC and GGIC to enhance transparency of company operations (audits are to be
published in the Georgian press). The credit will finance part of the cost of the company audits in the first
year of the project only.
Project Component 4 - US$1.07 million
Non-pipeline Oil Spill Prevention and Mitigation Component will address marine-based and land-based
oil spill issues. On the marine-based oil spill side, the component will consist of: (a) consultant services to
finalize the draft National Oil Spill Contingency Plan and to translate it into the national legislative and
regulatory framework, to assist in the preparation and ratification of the 1992 Civil Liability Convention
and the FUND Convention, and to prepare co-operative agreements with private companies with equipment
to handle major oil spills (tiers 2 and 3 types); (b) procurement of oil spill response equipment for the State
Marine Rescue Co-ordination Center within the Maritime Administration, responsible for responding to
emergency oil-spill clean up operations; (c) procurement of laboratory equipment for the Convention
Inspection Office for the Protection of the Black Sea, responsible for the enforcement of the MARPOL
convention; (d) training in equipment operation and maintenance for those responsible for combating oil
spills, i.e. staff of the National Rescue Center, management personnel in ports, and captains of ports
responsible for the co-ordination of the intervention; and (e) support to allow Georgia to further advance
and promote the concept of a regional approach for oil-spill response and to develop a regional policy of
cooperation in the management of oil-spills in the Black Sea.
- 26 -
On the land-based oil spill side, the component will involve: (a) consultant services to carry out a detailed
risk and impact study to evaluate the likelihood that oil spills will occur during the transport of oil by
railways and the impacts (social, cultural and environmental) that would result in the event of oil spills,
identify opportunities for reducing the impacts of the spills, review the institutional framework for
emergency response (including the development of a detailed assessment of the current legal and
institutional framework, liability issues and the emergency response approach in Georgia), identify the
required regulatory/legal/organizational framework for emergency response and the gaps in existing
framework, develop a plan to strengthen institutional, physical and strategic capacity to respond to
land-based oil spills; (b) procurement of basic monitoring equipment for the Department of Environment
Pernits within the Ministry of Environment; and (c) training on environmental data collection and
management systems.
Project Component 5 - US$1.08 million
Project Implementation will be provided by the PIU currently managing the Structural Reform Support
Project, in conjunction with GIOC, GGIC, the Ministry of Environment and other agencies responsible
under the transit agreements. This component will provide for office equipment, annual audit of the project
accounts, incremental operating costs and related needs.
- 27 -
Annex 3: Estimated Project Costs
GEORGIA: Energy Transit Institution Building
Project Cost By Component
Environmental and Technical Advice
Legal Advice
Company Audit - GIOC
Company Audit - GGIC
Non-Pipeline Oil Spill Mitigation
Unallocated
Project Implementation (incremental operating costs, project
audit, equipment)
Total Baseline Cost
Physical Contingencies
Price Contingencies
Total Project Costs
Total Financing Required
Project Cost By Category
Goods
Works
Services
Training
Unallocated
Incremental Operating Costs of PIU
Beneficiaries' Incremental Costs for Project
Total Project Costs
Total Financing Required
Local
US $million
1.70
0.20
0.02
0.02
0.11
0.10
0.88
Forelgn
US
6.70
0.80
0.10
0.10
0.96
0.40
0.20
|
Total
U millionr
8.40
1.00
0.12
0.12
1.07
0.50
1.08
3.03
0.00
0.00
3.03
3.03
9.26
0.00
0.00
9.26
9.26
12.29
0.00
0.00
12.29
Local
US $million
0.00
0.00
2.13
0.02
0.10
0.37
0.41
3.03
3.03
Foreign
US $million
0.66
0.00
8.00
0.10
0.40
0.10
0.00
9.26
9.26
Total
US $million
0.66
0.00
10.13
0.12
0.50
0.47
12.29
0.41
12.29
12.29
Identifiable taxes and duties are 2.15 (US$m) and the total project cost, net of taxes, is 10.14 (US$m). Therefore, the project cost sharing ratio is 94.9' 'o
of total project cost net of taxes.
- 28 -
Annex 4
GEORGIA: Energy Transit Institution Building
Not applicable.
- 29 -
Annex 5: Financial Summary
GEORGIA: Energy Transit Institution Building
Years Ending
June 2001 - June 2005
|F
Year 1
Year 2
"
Year 3
Year 4
PER'OD
| Year 5
Year 6
Year 7
Total Financing Required
Project Costs
Investment Costs
Recurrent Costs
Total Project Costs
Total Financing
0.2
0.1
0.3
0.3
2.7
0.4
3.1
3.1
2.4
0.2
2.6
2.6
2.4
0.2
2.6
2.6
0.3
2.8
2.5
2.5
1.5
0.0
(1.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.3
0.0
0.0
0.0
0.0
0.0
0.1
0.0
0.0
0.0
0.0
0.0
0.1
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
(1.0
(1.0
(1.0
(1.0
(.0
(1.0
1.4
0.1
1.5
1.5
0.0
0.0
0.0
0.0
0.0
(0.0
0.0
0.0
Financing
IBRDIIDA
Government
Central
Provincial
Co-financiers
User Fees/Beneficiaries
Others
Total Project Financing
0.3
3.1
2.6
2.6
1.5
0.0
Main assumptions:
Since the technical assistance financed by the Project deals with specific issues arising as the pipelines are
implemented, e.g., review of an Environmental Impact Assessment, which would be a one-time review, the
costs are not expected to continue beyond the implementation period, so no expenses have been estimated for
the operational period.
Identifiable taxes, estimated at US$2.15 million, are not included.
- 30 -
(1.0
Annex 6: Procurement and Disbursement Arrangements
GEORGIA: Energy Transit Institution Building
Procurement
The services of consultants and goods will be procured in accordance with the latest edition of the
Bank's Guidelines. The project activities not financed by IDA will be procured in accordance with the
national regulations. The project elements, their estimated cost and procurement methods are summarized
in Tables A and Al. The thresholds for each procurement method and Bank prior review (including
aggregate values) are shown in Table B. A procurement plan detailing the packaging and estimated
schedule of the major procurement actions is presented in Table B 1. All other procurement information,
including capability of the implementing agency, estimated dates for publication of GPN and the Bank's
review process is presented in Table B2.
Goods
Goods (approximately US$660,000 ) consisting of environmental monitoring and office
equipment will be procured through Intemational Shopping, as per the paras. 3.5 and 3.6 of the Guidelines.
Consulting Services
Contracts for Consulting Services (US$8.30 million) will be awarded for technical and
environmental advisory services, non-pipeline oil spill mitigation advisory services, training, auditor's
services (firms) and legal services (individuals). The following methods of selection will be followed:
(a) Quality-and Cost-Based Selection (QCBS) procedures will be used for consultant's services
with firms (except auditors) estimated to cost more than $100,000.
(b) Least-Cost Selection (LCS) will be used for auditors' services (company audits) and training.
(c) Individual Consultants Selection will be used for legal advisors for GGIC and GIOC and for
smaller miscellaneous advisors;
(d) Single Source Selection, for an amount not to exceed US$100,000, will be used for the audit
of the project accounts, using the same auditors the PIU has already contracted to audit the other projects it
manages.
Notification of Business Opportunities
A General Procurement Notice (GPN) was published in the June 16, 2000 issue of Development
Business. For consultants' contracts above US$200,000 a Request for Expressions of Interest will be
advertised in Development Business (in the English Language) and in a major local newspaper (in English
and in the national language).
Review by the Bank of Procurement Decisions
Prior review:
(a) Goods: As there will be only minor procurement of goods, the prior review will be conducted
for the first two contracts.
(b) Consulting Services: Terms of reference for all consulting assignments will be subject to prior
review by IDA. Terms of reference for legal services will also be reviewed by IDA's Legal Department.
Requests for Proposals (RFP) short lists, terms and conditions of contracts as well as evaluation reports
and recommendations for award will be prior reviewed by IDA for contracts for individual consultants
above $50,000 and furms above $100,000.
After award of contract, should any material modifications or waiver of terms and conditions of a
contract result in an increase above 15% of the original amount, IDA will reserve the right to prior review
- 31 -
of such modifications (including modifications to contracts for consulting services).
Ex-post review: All tenders, not subject to prior review, are subject to Bank ex-post review. All
documentation, including, but not limited to: TOR, bidding documents or requests for proposals, bids or
proposals received, correspondence on all bids either prior to or following award of contract including IDA
no objections, contracts and any subsequent amendments should be maintained until at least six months
following the close of the Project.
Procurement methods (Table A)
Table A: Project Costs by Procurement Arrangements
(US$ million equivalent)
Expenditure Category
ICB
Procurement Method
NCB
Other
.1. Works
0.00
(0.00)
(0.00)
2. Goods
0.00
(0.00)
0.00
(0.00)
0.00
(0.00)
0.00
(0.00)
0.00
(0.00)
0.00
(0.00)
0.00
(0.00)
0.00
(0.00)
0.00
(0.00)
0.00
(0.00)
3. Services
4. Unallocated
5. Miscellaneous \3
Total
0.00
N.B.F.
Total Cost
0.00
(0.00)
('.00
0.00)
(0.00)
(0.00)
0.66
(0.66)
8.30
(8.20)
0.40
(0.40)
0.37
(0.37)
9.73
(9.63)
0.00
(0.00)
0.00
(0.00)
0.00
(0.00)
0.41
(0.00)
0.41
(0.00)
0.66
(0.66)
8.30
(8.20)
0.40
(0.40)
0.78
(0.37)
10.14
(9.63)
Figures in parenthesis are the amounts to be financed by the IDA Credit. All costs include contingencies
Includes civil works and goods to be procured through national shopping, consulting services, services of
contracted staff of the project management office, training, technical assistance services, and incremental
operating costs related to (i) managing the project, and (ii) re-lending project funds to local government
units.
3/ Incremental operating costs for PIU.
4/ Procurement tables were prepared using the net of tax project cost.
2
- 32 -
Table Al: Consultant Selection Arrangements (optional)
(US$ million equivalent)
Consuntant
Services
Expenditure
QCBS
Category
B. Individuals
Total
Metiod
oBS
SFB
LCS
CQ
Other
N.B.F.
Total Cost
6.80
(6.80)
0.00
0.00
(0.00)
0.00
0.00
(0.00)
0.00
0.30
(0.20)
0.00
0.00
(0.00)
0.00
0.10
(0.10)
1.10
0.00
(0.00)
0.00
7.20
(7.10)
1.10
I (0.00)
_
A. Firms
Selection
_
(0.00)
(0.00)
(0.00)
(0.00)
(1.10)
(0.00)
(1.10)
6.80
0.00
0.30
0.00
(6.80)
(0.000.
0.00
00
1.20
(1.20)
0.00
(0.00)
8.30
(8.20)
(0.20)0.0.00)
1\ Including contingencies
Note: QCBS = Quality- and Cost-Based Selection
QBS = Quality-based Selection
SFB = Selection under a Fixed Budget
LCS = Least-Cost Selection
CQ = Selection Based on Consultants' Qualifications
Other = Selection of individual consultants (per Section V of Consultants Guidelines), Single
Source Selection of Auditors for audit of the project accounts (US$100,000).
N.B.F. = Not Bank-financed
Figures in parenthesis are the amounts to be financed by the Bank Credit.
- 33 -
Prior review thresholds (Table B)
Table B: Thresholds for Procurement Methods and Prior Review
Contract Value
Threshold
(US$ thousands)
0.00
Procurement
Method
NA
Contracts Subject to
Prior Review
(US$ millions)
0.00
2. Goods
0.10
IS
0.20
3. Services- LCS
3.b QCBS
3.c. Individual
3.d Single Source
Miscellaneous
(Incremental Operating
Costs)
0.10
LCS,
QCBS
0.20
6.80
1.10
0.10
Expenditure Category
1. Works
Ind.
SS.
Total value of contracts subject to prior review:
8.40
Overall Procurement Risk Assessment
Average
Frequency of procurement supervision missions proposed: One evety 12 months (includes special
procurement supervision for post-review/audits)
- 34
-
Procurement
description
Annex 6 Table B1: Procurement Plan
ProcureBid doc. 1. Advertise 1. Bid Invt.
Type of No. of Value
ment
Ready 2.Subm. of 2. Opening
Procure- slices USS MM
3. Eval. & Awd.
intr.
3.Short list Rec.
8
7
method
ment
1
Environmental
Advisor for EastWest oil and gas
pipelines
2
3
4
5
6
CS
1
2.50
QCBS
31-Oct-00
Technical
Advisor for EastWest oil and gas
CS
1
3.00
QCBS
16-Oct-00
31-Oct-00 01-Mar-01
16-Oct-00
01-Mar-01
15-Mar-01
15-May-01
29-Jun-01
15-Mar-01
15-May-01
29-Jun-01
Contract
signature
Contract
complete
9
10
31-Jul-01
31-Jul-01
Remarks
11
Client is the
31-Dec-04 MOF on
behalf of the
Steering
Committee
Client is the
31-Dec-04 MOF on
behalf of the
Steering
pipelines
Committee
Technical
Advisor for
CS
1
0.90
QCBS
16-Jun-00
30-Sept.-00 16-Jul-00
11 -Dec-00
19-Feb-01
30-Sep-00
15-Mar-01
North-South
cas
15-Apr-01
31-Dec-04
Pipelines
Evaluation of
CVs finalized by
15-Dec-00
31-Mar-01
Time of
15-July-01 contract
signing
depends on
the availability
of financing
CS
1
0.10
Individual
Consultant
TOR finalized
by 31-Oct-00
CS
1
0.40
Individual
Consultant
TOR finalized
by 1-Oct-01
Evaluation of
CVs finalized by
1-Dec-01
1-Mar-02
31-Jun-04
Legal Advisor
for GIOC
CS
1
0.40
Individual
Consultant
TOR finalized
by 01- arch-01
Evaluation of
CVs finalized
by 01-May-01
01-Jul-01
31-Jun-03
Audit for GIOC
CS
1
0.10
LCS
31-Mar-01
Short List
31-Mar-01
31-Mar-01
30-Apr-01
31-May-01
15-May-01
31-Dec-01
Audit for GGIC
CS
1
0.10
LCS
15-Jan-01
31-Mar-01
Short List
31-Mar-01
15-May-01
31-Dec-01
Project Audit
CS
1
0.10
SS
30-Apr-01
31-Dec-04
CS
Approx.
5
0.20
Ind. Cons.
As needed
01-Jun-01
31-Dec-04
CS
1
0.18
QCBS
March 01
01-March-01
01-April-01
01-May-01
15-June-01
31-Jul-01
31-Aug.-01
I Oct.-01
31-March-02
CS
1
0.10
LCS
1-April-01
01-May-01
01 June-01
01-July-01
15-Feb. -01
30-June-01
31-Jul-01
31-Aug.-01
15-May-01
1-Oct.-01
31-Dec. -1
CS
1
0.22
QCBS
March 01
15-March-01
30-Jun-01
01-April-01
15-Sep-01
Interim
Environmental
Advisor
Legal
Advisor for
GGIC
Miscellaneous
individual
advisors
Marine-based oil
spill consultants
Marine-Based
Oil Spill Training
Draft Contract
15 -Jan-01
Land-based Oil
Spill
Consultants &
Training
- 35 -
15-Oct-01 31-March-02
Land Based Oil
Spill Monitoring
Equipment
G
Approx.
4
0.08
31 March 01
IS
30-Apr-01
15-May-01
30 Jun-01
Equipment
G
4
_____________
_______
Marine-based oil
spill equipment
Incremental
operating
costs of PIU
01-Apr-01
Time of ITQ
Issuanc,'e and
Contra ct
signing
depends on
.______
Office
01-Mar -01
G
4
0.20
IS
_______
_______I_31-M
0.38
IS
31-Mar-01
_______
31-Mar-01
28-Apr-01
availability
of finaricing
_________
15-Jun-01
31-Dec-02
01-Jul-01
31-Dec-01
31-Mar-01
31-Dec-04
ay-01
March 01
0.37
-
36 -
31 -Mar 01
30-Apr-01
31-May-01
Capacity assessment of the PIU has been completed. The capacity of the PIU is sound.
Training on Project-specific aspects of procurement is planned to be provided at the Project Launch Workshop.
Country Procurement Assessment Report or
Country Procurement Strategy Paper status
A CPAR for the Georgia has not been completed.
For this Project, the Govemment will follow the agreed Bank procurement procedures as
described in this document and in the Credit Agreement.
S&tcie.u 3: Trnini.
I--swin 1''-.I kLrc
Project Launch
Workshop
.1
Are the bidding documents for the procurement actions
for the
first year ready by negotiations
Yes X
No
hzf*makio and DeveWaoxW
F olr,mIed dale .I-
Inld,cte if there ,. proxuren,enm
publication of General
Procurement Notice
mandatory SPN in Development Business
Yes X
No
Procmu1nn
iUbi
.
Dornm.ic Preieren,x h
Goods
Yes X
First Quiatrter of 2001
L.lre
prler,nP.
for
Works, if applicable
No
June 16, 2000
N/A
But not applicable for this
project as no ICB is
envisaged
Re .-.
Ye
|
*. l - s
Advine
.I r Iys'
p_Ys.
No X-
Explain briefly the Procurement Monitoring System:
All procurement related documentation that requires Bank's prior review will be cleared by Procurement Accredited Staff (PAS) and relevant technical
staff.
Packages above mandatory review thresholds will be reviewed by RPA. The PIU will maintain complete procurement files which will be reviewed by
Bank's supervision missions. The Procurement Plan will be
updated semi-annually. Procurement information will be recorded by the PIU and submitted to the Bank as part of the quarterly and annual progress
reports.
This information will include: revised
cost estimates for the different contracts; revised timing of procurement actions, including advertising, bidding, contract award, and completion time
for individual contracts; as well as compliance
with aggregate limits specific methods of procurement. A Management Information System (MIS) consisting of an accounting system capable
of prodticing project management
reports and Microsoft Project for maintaining procurement schedules will be used by the PIU to monitor procurement process.
Co-financing: Explain briefly the Procurement arrangements under co-financing: N/A
,nd.,tner,r-e.*Pr.-uremnent Siallor Bankv iffpin o(Ta;k Team responiible r the prxremente inthe
Project:
Leonid Vanian, x84 796
Explain briefly the expected role of the Field Office in Procurement: The Field Office will provide non-fiduciary procurement support to
the project including answering inquiries about status of planned packages, how to access standard bank documents and guidelines, etc.
Thresholds generally differ by country and project. Consult OD 11.04 "Review of Procurement
Documentation" and contact the Regional Procurement Adviser for guidance.
- 37 -
Disbursement
Allocation of credit proceeds (Table C)
Table C shows the allocation of credit proceeds by category and the disbursement percentages proposed in
each category. The closing date would be July 31, 2005.
Table C: Allocation of Credit Proceeds
Expenditure Category
1. Goods and equipment
Amount in US$million
0.66
2. Consultants' Services & Training
3. Audits of GIOC & GGIC
4. Incremental Operating costs,
including project audits
Unallocated
8.00
0.10
0.47
Total Project Costs
9.63
Financing Percentage
100% of foreign expenditures; 100% of
local expenditures (ex-factory costs) and
80% of other local expenditures
80%
50%
100%
0.40
_
9.63
Total
Note: Incremental operating costs of the implementing agencies (GIOC, GGIC and Ministry of
Environmnent), estimated at US$0.41 million, are being bome by those agencies as their contribution to the
project.
Use of statements of expenditures (SOEs):
Some of the proceeds of the credit are expected to be disbursed on the basis of Statements of Expenditures
( SOEs) as follows: (a) goods costing less than US$100,000 equivalent for each contract; (c) services
contracts for (i) individuals costing less than US$50,000 equivalent each; (ii) firms costing less than
US$100,000 equivalent each; and (d) PIU's incremental operating costs. Disbursements against goods and
services exceeding the above limits will be made against full documentation and respective procurement
guidelines. Related documentation in support of SOEs will not be submitted to IDA, but will be retained
by the PIU for at least one year, after receipt by IDA of the audit report for the year in which the last
disbursement is made. This documentation will be made available for review by the auditors and IDA
supervision missions. If ineligible expenditures, including those not justified by the evidence furnished, or
amounts in excess of agreed disbursement percentages are financed from the Special Account (SA), IDA
will have the right to withhold further deposits in the SA. IDA may exercise this right until the Borrower
has: (a) refunded the amounts involved, or (b) (if IDA agrees) submitted evidence of other eligible
expenditures that the Bank can use to offset the ineligible amounts.
Special account:
To facilitate timely project implementation, the PIU will establish, maintain and operate, under terms and
conditions acceptable to IDA, a Special Account, denominated in US Dollars, in a bank acceptable to IDA.
During the early stage of the project, the initial aggregate authorized allocation of the Special Account
would be limited to $480,000. However, when the aggregate disbursements under the credit have reached
US$1.4 million, the initial allocation of the Special Account may be increased up to the authorized
allocation of US$960,000 by submitting the relevant Application for Withdrawal. The minimum amount
- 38 -
of each application should be 20% of the authorized allocation. The PIU has extensive experience in this
activity and it should not pose any problem. Applications for replenishment of the Special Account would
be submitted monthly, or whenever one-third of the amount has been withdrawn, and must include
reconciled bank statements as well as other appropriate supporting documents.
The Borrower will be responsible for the appropriate accounting of the funds provided by the Bank under
the Loan, for reporting on the use of these funds, and for ensuring that audits of the financial statements or
reports are submitted to the Bank. A computerized accounting system has been established at the PIU.
Financial Management Capacity Assessment
The financial management review was carried out during September 2000.
The project is a Technical Assistance Credit ($10.14 million total cost, net of taxes) which aims to enhance
the capacity of the Georgian State to negotiate and implement oil and gas transit agreements to maximize
economic benefits, and minimize social and environmental costs. The project has five components: (i)
Environmental and Technical Advice for Pipeline Implementation; (ii) Legal Advice for Pipeline
Implementation; (iii) Company Audits for GIOC and GGIC; (iv) Non-pipeline Oil Spill Prevention and
Mitigation; and (v) Project Implementation.
The technical implementation of project components for (i) oil pipelines will be handled by Georgian
International Oil Corporation (GIOC); (ii) for gas pipelines by Georgian Gas Implementation Corporation
(GGIC), and (iii) for non-pipeline oil spill issues by the Ministry of Environment.
The financial management and general oversight of the project will be handled by the Project
Implementation Unit (PIU) which is currently implementing the technical assistance component of the
Structural Reform Support Project and the Judicial Reform Project and one IDF Grant. In the past, the
same PIU also managed Institutional Building Project, SATAC I, SATAC II, and two IDF Grants. The
PIU has over seven years of experience implementing IDA-financed projects involving multiple agencies,
and has a proven track record.
Steering Committee:
To facilitate, manage, and coordinate all contractual activities under the project, a Steering Committee has
been established. The committee will have representatives from GIOC, GGIC, Ministry of Environment,
Ministry of Finance and the PIU. Meetings were held with the heads/representatives of the above agencies
to confirm that project coordinators were identified from each agency.
Capacity of PIU:
The PIU has five full time staff as follows:
(i)
(ii)
(iii)
(iv)
(v)
Head PIU;
Chief Accountant;
Disbursement Specialist;
Procurement Specialist;
Senior Procurement Specialist.
The above team has vast experience in managing World Bank projects. Staff have attended several WB
- 39 -
sponsored seminars in procurement and disbursements in Tbilisi, Washington, and London. The chief
accountant and the disbursement specialist also received accounting (IAS) training from GeorgiaAudit, a
local firm.
PIU Office Space/Equipment:
The project under consideration intends to use the existing PIU facility that was set up under other ongoing
projects. The PIU has adequate equipment. Each staff has PC with Pentium processor and MS-Office
software installed. All PCs, except that of chief accountant, are connected with the local area network.
Project accounts are computerized and are maintained using 'Peach Tree' software package. For the safety
of accounting records and supporting documentation, the PIU is also equipped with a safe deposit box.
The PIU also has a back-up system and has a generator in case of power blackouts.
Needfor New Accounting Software and FinancialReporting:
It is not considered necessary for the PIU to purchase any new accounting software package. The PIU may
use the existing accounting software, customizing it, as needed, to track all financial and procurement
activities for the new project. The PIU will be responsible for all financial management under the project.
Project accounting procedures will be designed to facilitate the preparation of Project Management Reports
(PMRs), although it is envisaged that the Project will use traditional disbursement procedures. The PIU
accountant, who is already preparing PMRs (for other ongoing projects) will be responsible for preparing
and maintaining all disbursement records and furnishing financial management reports to IDA not later
than 45 days after the end of each calendar quarter.
Project OperationalManual (POM):
It was agreed with the PIU Head and Chief Accountant that a Project Operational Manual will be prepared
that would include: accounting policies and procedures, internal control routines, and the audit arrangement
used during project implementation. A good-practice sample (electronic version) of POM was left with the
PIU accountant who prepared a draft manual and submitted it to IDA for its review in January 2001. After
review and approval by the IDA, the final Project Operational Manual will be available not later than
February 28, 2001.
Auditing Arrangements:
The Project financial statements, special account, and the SOEs will be audited annually by a private
sector, independent auditor, in accordance with standards acceptable to the IDA and in accordance with
the Guidelinesfor FinancialReporting and Auditing of Projects Financedby the World Bank (FARAH).
GIOC and GGIC will also submit their annual audited financial statements. The draft contract with the
auditors for the audit of the project accounts was submitted to IDA for review in January 2001. The
contract will be signed once the credit becomes effective.
Special Account:
To facilitate timely project implementation, the PIU will establish, maintain and operate, under terms and
conditions acceptable to IDA, a Special Account, denominated in US Dollars. The PIU has extensive
experience in this activity and it should not pose a problem. Applications for replenishment of the Special
Account would be submitted monthly, or whenever one-third of the amount has been withdrawn, whichever
occurs earlier.
- 40 -
Conclusion:
In the 1999 Corruption Perception Index (published by Transparency International), Georgia was ranked as
#84 out of 99 countries. This index relates to perceptions of the degree of corruption as seen by business
people, risk analysts and the general public and ranges between 10 (highly clean) and 0 (highly corrupt).
Georgia's score on this scale was 2.3. Even though the two beneficiary companies operate in a business
environment with a high degree of perceived corruption, the centralization of project management and
administrative functions -- and related flow of funds -- within the PIU, whose accounting, financial
reporting and internal control procedures are documented in a Project Operational Manual approved by
IDA prior to Board presentation, together with standard external auditing arrangements, would contribute
to mitigate the fiduciary risks associated to the project, which can be judged as being acceptable.
The Project satisfies the Association's minimum financial management requirements, although some
enhancements are needed. An Action Plan is presented below which requires PIU to design and implement
satisfactory financial management system. Once this time-bound Action Plan is carried out successfully, it
is believed that the project will, by then, have developed a financial management system that will be able to
produce the required level of financial management information on a timely basis.
- 41 -
Action Plan
Actions
Status
* Send draft contract for audit of the project
accounts to IDA for no-objection
Received
* Draft Project Operational Manual
Received
* Finalize Project Operational Manual
Responsiblihtv
Due Date
PIU
Jan. 31, 2001
PIU
Jan. 31, 2001
PIU
Feb. 28, 2001
* Complete customization and implementation of accounting
software, including system test
* Prepare initial set of PMRs as of March 31, 2001
for testing purposes
* Prepare complete set of PMRs as of June 30, 2001
and quarterly thereafter, for reporting purposes
PIU
Mar.31, 2001
PIU
May 15, 2001
PIU
Aug. 15, 2001
-42 -
Annex 7: Project Processing Schedule
GEORGIA: Energy Transit Institution Building
Prect Schedule
_P_
Actual
__d
Time taken to prepare the project (months)
7
7
First Bank mission (identification)
09/15/2000
12/12/2000
01/17/2001
04/30/2001
09/15/2000
12/12/2000
01/17/2001
04/30/2001
Appraisal mission departure
Negotiations
Planned Date of Effectiveness
Prepared by:
Georgian International Oil Corporation (GIOC), Georgian Gas International Corporation (GGIC), Ministry
of Environment and SRSP PIU.
Preparation assistance:
Bank staff, advisors to executing agencies
Bank staff who worked on the project included:
Name
Peter Thomson
Jonathan Walters
Vakhtang Kvekvetsia
Allan Rotman
Rita Cestti
Ralf Schwimnbeck
Leonid Vanian
Jonathan Pavluk
Nicholay Chistyakov
Roberto Tarallo
Richard James
Jann Masterson
Josephine Kida
Michael Levitsky
Karn Shepardson
Zoe Kolovou
Elly Gudmundsdottir
Speciality
Sector Manager and Task Team Leader
Lead Economist and Task Team Leader (through December 31, 2000)
Financial Analyst
Sr. Environmental Specialist
Sr. Water Resources Economist
Pipeline Engineer
Procurement Specialist
Sr. Country Lawyer
Sr. Disbursement Officer
Sr. Financial Management Specialist
Consultant Financial Analyst
Operations Officer
Program Tearn Assistant
Peer Reviewer
Peer Reviewer
Sr. Country Lawyer
Counsel
-43-
Annex 8: Documents in the Project File*
GEORGIA: Energy Transit Institution Building
A. Project Implementation IPlan
Project Implementation Plan
Project Concept Document
Terms of Reference for consultancy assignmnents
B. Bank Staff Assessments
Supervision reports for Oil Institution Building Project
Financial Management Capacity Assessment for Georgia Energy Transit Institution Building Project, BTO
Report by Richard James, Consultant, October 6, 2000
Procurement Capacity Assessment for Georgia Energy Transit Institution Building Project, by Leonid
Vanian, Procurement Specialist, October 2000.
C. Other
Baku-Supsa Pipeline Construction and Operating Agreement
Baku-Thilisi-Ceyhan Intergovernmental and Host Government Agreement for Georgia
various presidential decrees on role of GGIC and GIOC
Memorandum of President and Technical Annex for Oil Institution Building Project
Project Appraisal Document for Structural Reform Support Project
*Including electronic files
- 44 -
Annex 9: Statement of Loans and Credits
GEORGIA: Energy Transit Institution Building
Feb-2001
Difference between expected
and actual
disbursements
Original Amount in US$ Millions
Project ID
P065715
FY Purpose
2000 AGR RES EXT &TRG
IBRD
0.00
IDA
7.80
GEF
0.00
Cancel.
0.00
Undisb.
7.06
P040556
P064091
2000 ROADS
0.00
40.00
0.00
0.00
38.81
0.00
0.00
2000 AGRIC RES. EXT. TRAINING (GEF)
0.00
0.00
2.48
0.00
2.34
0.05
0.00
P056514
1999 TRANS MIN RESTRUCT
0.00
2.30
0.00
0.00
1.76
1.67
0.00
P057813
1999 JUDICIAL REFORM
0.00
13.40
0.00
0.00
11.67
-1.33
0.00
P060009
1999 INTGR COASTAL MGMT (GEF)
0.00
0.00
1.30
0.00
1.21
0.24
0.00
P052154
1999 STRUCTREFSUPPORT
0.00
16.50
0.00
0.00
12.11
4.38
0.00
P052153
1999 SAC III
0.00
60.00
0.00
0.00
38.36
61.10
0.00
P050911
1999 INTG COASTAL MGT
0.00
4.40
1.30
0.00
3.86
1.72
0.00
P008416
1999 ENT REHAB
0.00
15.00
0.00
0.00
11.48
4.99
0.00
P064094
1999 ENERGY SECAC
0.00
25.00
0.00
0.00
12.04
12.79
0.00
P039929
1998 SIF
0.00
20.00
0.00
0.00
7.36
5.50
0.00
P055573
1998 CULTURAL HERITAGE
0.00
4.49
0.00
0.00
2.22
1.63
0.00
P050910
1996 MUN DEV
0.00
20.90
0.00
0.00
14.57
13.56
0.00
P008415
1997 AGRIC DEVT
0.00
15.00
0.00
0.00
2.30
-0.81
0.00
P008414
1996 HEALTH
0.00
14.00
0.00
0.00
6.42
7.43
0.00
0.00
173.58
Total:
0.00
- 45 -
258.59
5.08
Orig Fmt Rev'd
0.63
0.00
113.55
0.00
GEORGIA
STATEMENT OF IFC's
Held and Disbursed Portfolio
Feb-2001
In Millions US Dollars
Committed
Disbursed
IFC
FY Approval
1999
2000
1999
2000
1997/00
1999
1998
1998
Company
ThilComBank
Telasi
ninotsminda
Bank of Georgia
Georgia G&MW Co.
Georgia M-F Bank
Ksani
TBC Bank
Total Portfolio:
IFC
Loan
3.00
30.00
0.00
3.00
0.00
0.00
6.32
2.38
Equity
0.00
0.00
0.00
0.00
0.18
0.48
2.50
0.86
Quasi
0.00
0.00
6.00
0.00
0.00
0.00
0.00
0.00
Partic
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
44.70
4.02
6.00
0.00
Loan
1.01
10.00
0.00
0.69
0.00
0.00
0.00
2.38
14.08
Approvals Pending Commitment
FY Approval
1997
Company
GGMW
Loan
0.00
Equity
0.00
Quasi
0.00
Partic
0.00
Total Pending Commitment:
0.00
0.00
0.00
0.00
-46 -
Equity
0.00
0.00
0.00
0.00
0.18
0.48
2.50
0.86
Quasi
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Partic
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
4.02
0.00
0.00
Annex 10: Country at a Glance
GEORGIA: Energy Transit Institution Building
POVERTY and SOCIAL
GCorala
1999
Pooulaton mnr*vear 'mii,onsi
CGNPDer CJDuillArlas meflrod tJSS'
G NP IArias me,noJ uSS D',1ucsl
Euroo. &
Central
Asia
Low.
Income
55
620
3.4
475
2 150
1.022
2417
0.0
00
0.1
06
19
23
Development diamond*
Life expectancy
410
988
Averaqe annual growth. 1993-99
0:eu1lat"..i%
.at.IFr force;
Most recent estimate liatest year available. 1913-99)
6 OCf
0OUJbOln Delwow nDonlef oov4rly r,ne
Po.ertv %
Urban Dooulal.on S%of rloal pooularon)
L,fe e)oectan,7v at brth rvea's
Infanit morialmv toet 1 000 i,O ormnsi
Cnil rnainuirtion ". of chcl,an undef 5
Access to morosed water source i% of cooular,onl l
licracS I %of DoDui3r,on age 75-1
%of sc'o'*aoe DOOulalosia1on
Gross ornmrv enrollment %
Mate
Female
t1
60
73
15
89
es
67
69
22
a8
3
IG0O
101
99
G
GNP
per
capita
7
\
31
60
77
3
4
G
Gross
prmary
enrollment
'
Access to safe water
Georgia
Low-income group
96
102
86
KEY ECONOMIC RATIOS and LONG-TERM TRENDS
1973
19U9
1998
28.0
42.4
25.3
1? 2
20.9
-3.6
S59
1999
EconomI c r3tlo
G D P rU SS oIO,ons
Gross comestcr 'n,estment1GDP
E Doris of coods and sbro,cesIGOP
Sr.oss aomeatic sav.ngs GDP
Gr.ss napon3l saAnmgsiGDP
Current account Dalance'GDP
Interest o3vments!GOP
Total aeDeGDP
Total aebt servicelexoorts
Present alue of debDGGP
Present value of debtie,oarls
16 8
270
-2 2
88
.11 3
11
48 5
72
36 9
199 7
-8 0
12
63 8
49 2
194 8
Trade
D
Domestai
Savings
Investment
11.9
Indebtedness
197949
1989399
1993
1999
19903
1.9
11
172
15 9
99
29
22
35
33
41
-1 5
4a
48
80
1979
f3vowe,8 annual Qrowfn
GDP
GNP oer caola
Escorts of aoods ana servoces
-Georgia
- - Low-income group
STRUCTURE of the ECONOMY
1989
l9oS
1999
Growth of Investment and GDP (%)
(%of GDP)
Aqriculture
Industrv
Manufacturinq
Services
23.3
38.7
27.1
38.0
35.6
13.0
7.6
51.5
36.0
12.9
7.6
51.1
IS0100-_
so
a
Private consumption
General qovemment consumption
Imoorts of qoods and services
62.6
12.1
45.1
90.2
13.4
41.6
89.8
12.4
46.0
so
1989-99
1996
1999
Growth of exports and Imports (%)
3.0
5.1
3.3
19.0
-8.0
-2.0
-1.0
16.5
3.0
2.0
3.0
1.7
6.8
17.3
18.9
12.1
-15.9
9.1
6.2
15.5
12.2
2.4
-5.2
-11.4
-14.4
-12.7
4.2
1979-89
(average annuaJ growth)
Aqriculture
Industry
Manufacturing
Services
Private consumption
General qovernment consumption
Gross domestic investment
imports of qoods and services
Gross national product
..
1.9
GDI
_
GDP
60
4
20
------94
96
97
Oa
20
-
Exports
e-irnports
Note: 1999 data are preliminary estimates.
The diamonds show four kev indicators in the countrv (in bold) compared with its income-group average. If data are missinq. the diamond will
be incomplete.
-47 -
Georgia
PRICES and GOVERNMENT FINANCE
Domestic prices
(%chanoe)
Consumer prces
Implicit GDP deflator
1979
1989
1998
1999
Inflation (%)
20,000
..
2.8
..
5.4
3.6
4.5
19.1
10.000
9.4
*o.000
s,o,
Govemment finance
(%of GDP, includes current wrants)
0
Current revenue
..
29.1
16.2
15.9
Current budget balance
Overall surplus/deficit
..
..
29.1
29.1
-4.4
-6.4
-5.1
-6.9
1989
6,716
1998
478
39
43
222
1,164
1999
477
33
39
249
1,013
325
205
231
90
95
94
281
187
187
93
95
97
1998
720
1,437
-717
1999
739
1,260
-521
94
95
97
96
99
99
* CPI
-GDP deflator
TRADE
(US$ millions)
Total exports (fob)
Black metal
Tea
Manufactures
Total imports (cif)
Food
Fuel and energy
Capital goods
Export price index (1995=100)
Import price index (1995=100)
Terms of trade (1995=100)
1979
..
..
.
..
..
..
..
..
7,150
..
.
..
1,685
481
..
..
..
1,710
..
..
Export and import levels (US$ mill.)
1,200
IddiiJIl
s0
**
93
94
95
97
96
99
98
* Imports
C Exports
BALANCE of PAYMENTS
(US$ millions)
Exports of goods and services
Imports of goods and services
Resource balance
Netincome
Net current transfers
1979
Current account balance to GDP (%)
o
..
..
..
..
..
..
..
..
117
211
119
182
-6
..
I
..
-389
-220
-12
..
..
..
..
298
91
209
11
18
..
..
..
..
119
1.4
133
2.0
1998
1999
1,747
Current account balance
Financing items (net)
Changes in net reserves
1989
I
I I
1
Memo:
Reserves including 4old (US$ millions)
Conversion rate (DEC, locallUS$)
EXTERNAL DEBT and RESOURCE FLOWS
1979
1989
(US$ millions)
Composition of 1999 debt (USS mill.)
Total debt outstandinq and disbursed
IBRD
IDA
..
1,674
..
274
Total debt service
IBRD
IDA
..
..
66
0
2
113
0
3
..
..
..
..
..
..
54
96
0
50
68
71
17
62
Composition of net resource flows
Official grants
Official creditors
Private creditors
Foreign direct investment
0
17
0F
346
B: 346
E 1007
Portfolio equity
,.
..
0
0
World Bank program
Commitments
.
..
27
115
A-IBRD
Disbursements
.
..
..
53
0
79
0
B- IDA
C -IMF
..
..
..
..
..
..
53
2
51
79
3
76
Principal repayments
Net flows
Interest Payments
Net transfers
C: 322
0:56
E-Bilateral
D -Other multilateral
F - Private
G - Short-term
9/15/00
Development Economics
- 48 -
EUROPE AND CENTRAL ASIA
THE CASPIAN AND BLACK SEA REGIONS
0
ENERGY TRANSIT INSTITUTION BUILDING PROJECT
*
PROJECT RELATED OIL TERMINALS
*
NATIONAL CAPITALS
750 KILOMETERS
500
250
I
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This map sos produced by the Map Design Unit of The World Bank.
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acceptance of such boundaries.
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