AFRICAN DEVELOPMENT BANK · ADB African Development Bank ACES Association de Conservation des Eaux...

AFRICAN DEVELOPMENT BANK

TUN/NSAA/2000/01LANGUAGE : FRENCHORIGINAL : ENGLISH

APPRAISAL REPORT

INTEGRATED AGRICULTURE DEVELOPMENT PROGRAMME FOR GABES,GAFSA ET KASSERINE

REPUBLIC OF TUNISIA

NB: This document contains errata or corrigenda (see Annexes)

COUNTRY DEPARTMENT OCDNNORTH REGION AUGUST 2000

TABLE OF CONTENTSPAGES

PROJECT BRIEF, BASIC DATA AND EXECUTIVE SUMMARY..................................

1. ORIGIN AND HISTORY OF THE PROGRAMME.....................................1

2. AGRICULTURE SECTOR...............................................................................22.1. Major Characteristics ..................................................................................22.2. Land Tenure.................................................................................................22.3. Constraints and Prospects............................................................................32.4. Agriculture Sector Policy............................................................................3

3. NATURAL RESOURCES MANAGEMENT.................................................43.1. Major Characteristics ..................................................................................43.2. Institutions of the Rural Sector....................................................................43.3. Constraints, Prospects and Opportunities ...................................................53.4. Policies and Strategy ...................................................................................63.5. Operations of Donors ..................................................................................7

4. THE PROGRAMME .........................................................................................74.1. Programme Design and Justification ..........................................................74.2. Programme Area and Programme Beneficiaries ........................................84.3. Strategic Context .........................................................................................94.4. Programme Objectives ................................................................................94.5. Programme Description..............................................................................94.6. Production, Market and Price......................................................................144.7. Environmental Impact .................................................................................154.8. Programme Cost..........................................................................................174.9. Sources of Finance and Expenditure Schedule..........................................19

5. PROGRAMME IMPLEMENTATION...........................................................215.1. Executing Agency .......................................................................................215.2. Institutional Arrangements..........................................................................235.3. Implementation Schedules and Supervision ...............................................245.4. Procurement Arrangements of Goods and Services ...................................245.5. Disbursement Arrangements.......................................................................275.6. Monitoring & Evaluation ............................................................................275.7. Financial Reporting and Auditing ..............................................................285.8. Co-ordination with the Other Donors .........................................................28

6. PROGRAMME SUSTAINIBILITY AND RISKS .........................................286.1. Recurrent Costs ..........................................................................................286.2. Programme Sustainability ...........................................................................296.3. Major Risks and Mitigating Measures .......................................................30

7. PROGRAMME BENEFITS..............................................................................307.1. Financial Analysis .......................................................................................30

7.2. Economic Analysis.....................................................................................317.3. Social Impact Analysis................................................................................327.4. Sensitivity Analysis ....................................................................................33

8. CONCLUSIONS AND RECOMMENDATIONS...........................................338.1. Conclusions.............................................................................................338.2. Recommendations and Conditions for Loan Approval ..........................34

This report was prepared following a mission to Tunisia from 10 April to May 01, 2000 andfrom 14 to 30 June 2000* by Messrs E. DOTE, Chief Agricultural Economist OCDW4, MissionLeader, and A. GOMBE, Agricultural Engineer, OCDN, J.FRANSSEN, environmentalistOESU, JC AMON, Agricultural Economist*, a Consultant in Water Engineering and Dams.Further information on this programme may be obtained from Mr. J. RUSHEMEZA, DivisionManager, OCDN 2 (Ext. 4199) and from Mr.. Bisi OGUNJOBI, Director OCDN (Ext. 4040).

CURRRENCY EQUIVALENTS(July 2000)

Currency Unit : Tunisian Dinar (TD)TD1 = UA 0.576236UA1 = TD1.735400 (July 2000)

FISCAL YEAR

1 January - 31 December

WEIGHTS AND MEASURES

Metric System

ANNEXES

1. Map of Tunisia2. Organisational Chart3. Programme Implementation Schedule4. Detailed Cost Estimates by Programme (Gabès, Gafsa and Kasserine)5. Summary of Economic Analysis

SIGLES ET ABREVIATIONS

ADB African Development BankACES Association de Conservation des Eaux et du Sol (Association for the

Preservation of Water and Soil)AFD Agence Française pour le Développement (French Agency forDevelopment)AIC Association d’intérêt Collectif (Association for CommunityDevelopment)ANPE Agence Nationale pour la Protection de l’Environnement (NationalAgency for Environmental Protection)AVFA Agence de Vulgarisation et de Formation Agricole (Agency forAgricultural Extension and Training)BNA Banque Nationale Agricole (National Agriculture Bank)BTS Banque Tunisienne de Solidarité (Tunisian Solidarity Bank)CES Conservation des Eaux et du Sol (Preservation of Water and Soil)CFRA Centre de Formation et de Recyclage Agricole (Centre for Agriculture

Training and Recycling)CRA Centre de Rayonnement Agricole (Centre for Agriculture Ventilation)CRDA Commissariat Général au Développement Agricole (GeneralCommissariat for Agriculture Development)CSA Coopérative de Services Agricoles (Agriculture Co-operativeServices)CTV Cellule Territoriale de Vulgarisation (Territorial Extension Unit)DEDA Division des Etudes et du Développement Agricole (CRDA)(Division for Agriculture Studies and Development)DGFE Direction Générale du Financement et des Encouragements (General

Directorate for Finance and Encouragement)

DPVA Division de la Production et de la Vulgarisation Agricole (CRDA)(Division for Agriculture Production and Extension)EU European UnionFODERI Fonds de Développement Rural Intégré (Rural IntegrationDevelopment Fund)FOPRODI Fonds pour la Promotion du Développement Industriel (Fund for the

Promotion of Industrial Development)FOSDA Fonds de Solidarité pour le Développement Agricole (Agriculture

Development Solidarity Fund)GDP Gross Domestic ProductGIC Groupement d’intérêt collectif (Community Development Group)Ha HectarHER Hydraulique et Equipement Rural (Rural Water and Equipment)IDB Islamic Development BankIBRD International Bank for Reconstruction and DevelopmentIPA Irrigated Public AreasIRESA Institut de Recherche et de l’Enseignement Supérieur Agricole(Agriculture Research Institute)KFW Kreditanstal fur WiederaufbauMD Million de Dinars (In Dinar Million)MR Market RateNGO Non Governmental OrganisationPDG Président Directeur Général (Director General)PMU Programme Management UnitOC Office des céréales ( Cereal Office)OEP Office de l’Elevage et des Paturages (Office for Livestock andPastures)ONA Office National de l’Artisanat (National Artisanat Office)PDRI Programme de Développement Rural Intégré (Integrated RuralDevelopment Programme)SONEDE Société Nationale d’Exploitation et de Distributrion de l’EauSAU Superficie Agricole UtileSME Small and Medium EntreprisesSMI Small and Medium IndustriesTD Tunisian DinarUA Unit of AccountUF Fodder UnitUTAP Union Tunisienne de l’Agriculture et de la Pêche (Tunisian Union for

Agriculture and Fishery)

AFRICAN DEVELOPMENT BANK01 B.P. 1387 ABIDJAN 01Tel. : (+ 225) 20 20 44 44

PROGRAMME BRIEFDate : May 2000

The information given hereunder is intended to provide some guidance to all prospectivesuppliers, contractors, consultants and all persons interested in the procurement of goods andservices for the programme approved by the Boards of Directors of the Bank Group. Moredetailed information and guidance may be obtained from the Executing Agency of the Borrower.

1. COUNTRY : TUNISIA

2. NAME OF PROGRAMME : Integrated Agricultural Development Programmefor the Governorates of Gabès, Gafsa andKasserine

3. LOCATION : Governorates of Gabès, Gafsa and Kasserine

4. EMPRUNTEUR : Republic of Tunisia

5. EXECUTING AGENCY : Programme Management Unit within theRegional Commission for AgriculturalDevelopment (CRDA) of Gabès Tel : (216) 06220 104 ; Fax ( 216) 06 222 721

Programme Management Unit within theRegional Commission for AgriculturalDevelopment (CRDA) of Gafsa Tel : (216) 05280 831 ; Fax ( 216) 05 280 668

Programme Management Unit within theRegional Commission for AgriculturalDevelopment (CRDA) of KasserineTel : (216) 07 474 935 ; Fax ( 216) 07 474 398

6. PROGRAMME DESCRIPTION

The major components of the programme are:

A. Development Works;B. Agricultural Development;C. Assistance to Rural Organisations;D. Programme Management.

7. PROCUREMENT OF GOODS AND SERVICES:

The ADB-financed goods, works and services will be procured as follows:

i) The recruitment of consultants, offices and NGOs in charge ofimplementation studies of infrastructure facilities, a mid-term review anda final appraisal, organisation and sensitisation, training and auditing ofthe Programme’s account, will be done through competitive biddingbased on a short-list;

ii) The market to supply vehicles, material and equipment, pumps andaccessories, will be done through consultations with suppliers at thenational level (CFEN). This procedure is justified considering the value,the nature and quantity of goods to be supplied which are small innumbeer and less likely to attract foreign suppliers;

iii) The procurement of development works relating to the treatment ofcatchment basins the construction of water infrastructure facilities,rehabilitation of earth roads, the development of beds and hydro-agricultural areas will be done in accordance with the Nationalcompetitive bidding procedures (AON) ;

8. TOTAL COST : UA 63.86 million.

- Foreign Exchange : UA 32.98 million.- Local Currency : UA 30.87 million.

9. ADB LOAN : UA 41.31 million.

10. OTHER SOURCES OF FINANCING- Government : UA 12.38 million- Beneficiaries : UA 1.02 million- BNA/BTS : UA 6.61 million- FOSDA : UA 2.54 million

PDAI OF GABES

- Total Cost : UA 18.50 million.- Foreign Exchange : UA 9.75 million.- Local Currency : UA 8.75 million.


12. OTHER SOURCES OF FINANCING- Government : UA 2.65 million- Beneficiaries : UA 0.37 million- BNA/BTS : UA 2.40 million- FOSDA : UA 0.92 million

PDAI OF GAFSA



10. OTHER SOURCES OF FINANCING

- Government : UA 3.55 million- Beneficiaries : UA 0.31 million- BNA/BTS : UA 1.99 million- FOSDA : UA 0.76 million

PDAI DE KASSERINE



14. OTHER SOURCES OF FINANCING

- Government : UA 6.18 million- Beneficiaries : UA 0.34 million- BNA/BTS : UA 2.22 million- FOSDA : UA 0.86 million

15. APPROVAL DATE : November 2000

16. ESTIMATED START-UP DATE OF THE

PROGRAMME AND DURATION : April 2001, 5 years.

17. CONSULTANCY SERVICES REQUIRED: Consultants for : (i) surveysand implementation ; (ii)organisation and trainingservices ; (iii) mid-termreview, audit and projectcompletion reports.

ii

EXECUTIVE SUMMARY

1. ORIGIN AND HISTORY OF THE PROGRAMME

The programme being mentioned in this report comprises three (3) integratedagricultural development projects in Gabès, Gafsa and Kasserine. It was identified during theADB agriculture programme supervision mission in September 1998. This programme wasthe subject of a financing request made by the Tunisian Government to the ADB. Thefeasibility study of the programme in Gabès, on the one hand, and those of Gafsa andKasserine, on the other hand, conducted by Centre national des études agricoles (NationalCentre for Agricultural Studies)(CNEA), were re-conducted by the Centre for Investment ofthe FAO with the exception of the study in Kasserine which did not require any re-conduction. These studies were financed by the CRDA of the different Governoratesrespectively. The programme’s appraisal mission to Gabès and Gafsa took place in May2000. The mission to Kasserine took place in June 2000.

2. BANK GROUP LOAN

The ADB loans whose total amount is UA 41.31 million will be used to finance 95.1%of the foreign costs of the programme, and a part of the costs in local currency.

3. PROGRAMME OBJECTIVES

The sector objective of the programme is to alleviate poverty and check regionalimbalance. In this vein, the specific objective of each project is to increase sustainably, theproduction and income of the farmers in those areas, thereby contributing to the improvementof the living conditions of beneficiaries.

4. PROGRAMME ACHIEVEMENTS

The major achievements being expected from the programme are as follows: (i)completion of development works for the preservation of soil and water through anti-erosionmeasures; (ii) construction rural infrastructure facilities; (iii) construction of thresholds andbarriers sills and dykes, development of irrigated land; (iv) crop and animal production (vi)establishment of extension measures and of research-development; (vii) promotion of variousexisting organisations through sensitisation, organisation and training; (viii) support torevenue-generating activities of rural women and the youth; (ix) a management unit will becreated within the three CRDAs to co-ordinate activities in each region.

5. PROGRAMME COSTS

The total cost of the programme is estimated at TD 110.82 million, or UA 63.86million, net of tax and duties. This cost is distributed as follows: TD 57.24 million, orUA32.98 million in foreign exchange and TD 53.58 million, or UA 30.87 million in localcurrency. The programme is broken down into three projects whose costs are presentedbelow:

The total cost of the Project in Gabès is estimated at TD 32.10 million, or UA18.50 million, net of tax and duties;

The total cost of the Project in Gafsa is estimated at TD 37.27 million, or UA21.48 million, net of tax and duties;

iii

The total cost of the Project in Kasserine is estimated at TD 41.44 million, or UA23.88 million, net of tax and duties.

6. SOURCES OF FINANCING

The loans will be financed by the ADB, le Government, the beneficiaries, la BanqueNationale Agricole (the National Agricultural Bank) (BNA) and/or la Banque Tunisienne deSolidarité (the Tunisian Solidarity Bank)(BTS), and le Fonds de Soutien au DéveloppementAgricole (Funds for Agricultural Development Support)(FOSDA). On the average, the ADB willcover 64.6% of the total cost of the programme or UA 41.31million. The ADB contribution willbe used to finance 95% of the costs in foreign exchange of the four components. Thecontribution of the Government amounts to UA12.38 million or 19.4% of the total cost of theprogramme. It will be used to finance a part of the expenditure in local currency relating to allthe various components except credit. The contributions of the beneficiaries will amount toUA 1.02 million and shall cover the counterpart corresponding to the contribution on theloans for agro-pastoral development. The cost of agro-pastoral development will be financedfrom the loan granted by the BNA/BTS and by FOSDA for UA6.61 million and UA 2.54million respectively, or 10.4% and 4% of the total cost of the programme. The sources offinancing of each of the PDAIs is presented as follows:

(In million UA)

GABES GAFSA KASSERINE TOTALFINANCING

F.E. L.C Total F.E. L.C Total F.E. L.C Total F.E. L.C Total

%Total

ADB 9.19 2.97 12.16 11.02 3.86 14.87 11.17 3.10 14.28 31.38 9.93 41.31 64.7%GOVERNMENT 0.00 2.65 2.65 0.00 3.55 3.55 0.00 6.18 6.18 0.00 12.38 12.38 19.4%FOSDAP 0.14 0.78 0.92 0.11 0.65 0.76 0.15 0.71 0.86 0.40 2.14 2.54 4.0%BENEFICIARIES 0.06 0.31 0.37 0.05 0.26 0.31 0.06 0.28 0.34 0.16 0.86 1.02 1.6%BTS/BNA 0.36 2.03 2.40 0.30 1.69 1.99 0.38 1.84 2.22 1.04 5.57 6.61 10.4%

TOTAL 9.75 8.75 18.50 11.47 10.01 21.48 11.76 12.12 23.88 32.98 30.87 63.86 100.0%

7. PROGRAMME IMPLEMENTATION

The programme will be executed by three Management Units (UGP) created withineach of the Regional Commissariats for Agricultural Development (CRDA) in Gabès, Gafsaand Kasserine. Measures will be taken to ensure a rational utilisation of human resourcesavailable within each of the CRDAs and if need be, contractual employees will be recruited.Each Management Unit will be headed by a Director and assisted by five Management staff.

8. CONCLUSION AND RECOMMENDATIONS

PDAI will operate in the Governorates of Gabès, Gafsa and Kasserine where thenatural physical conditions are unfavourable and are faced with a series of technicalconstraints: water resources are often inadequate, excessively salty, pumping is often done atgreat depth, hence the need to emphasise measures to economise water. The rationaldevelopment of these priority catchment basins, will help to mobilise the low level rain-waterresources in the area for irrigation purposes and replenish the underground level, protect thesoil and reclaim new lands for farming. The programme is technically achievable,economically and financially viable. The rate of economic profitability of the programme isput at 20.62%.

iv

In the light of the foregoing, it is recommended to grant to the Republic of Tunisia,three ADB loans for the financing of projects not exceeding:

- UA12.16 million for the PDAI in Gabès ;- UA14.87 million for the PDAI in Gafsa ;- UA14.28 million for the PDAI in Kasserine.

The granting of these loans is subject to the following conditions:

A) Conditions Precedent to Loan Effectiveness:

The effectiveness of each of the loans will be subject to the fulfilment by theBorrower, of the conditions as provided in Section 5.01 of the general conditions.

B) Conditions Precedent to First Disbursement:

(i) Provide the ADB with evidence of the establishment of the projectManagement Unit in Gabès, Gafsa and Kasserine each having aDirector whose Curriculum Vitae will have received the prior approvalof the ADB, a Rural Engineer, an Agriculture Economist, a Specialistin Gender issues and an Accountant/Administrative officer (paragraph5.1.2) ;

(ii) Submit to the ADB for consideration, the Curriculum Vitae of theDirector of each of the PMU (paragraph 5.1.2) ;

(iii) Undertake to schedule the construction of windbreaks for theprogramme in Gabès in accordance with the project schedule(paragraph 4.5.5) ;

(iv) Undertake to sign agreements between the CRDAs and the Researchand Training Institutions (paragraph 4.5.16) ;

(v) The proof of the opening of an account in a Commercial Bank in eachof the Governorates. Such accounts should be to receive from the Bank,the special account funds for the projects.

C) Other Conditions

The Borrower should also:

For the PDAI in Gabès

(i) Commence the construction of windbreaks for the project in Gabès asfrom the beginning of the second year following the effectiveness ofthe Loan Agreement for Gabès ;

For the PDAIs in Gabès, Gafsa and Kasserine

(ii) Send to the Bank, not later than 31 December 2003, the agreementssigned between each of the CRDAs involved in the projects, on the onehand, and the Research and Training Institutions on the other hand;

iProject Name : TUNISIA : Integrated Agricultural Development Programme for the Governorates of GABES, GAFSA and KASSERINE

Design Team : Messrs. DOTE, GOMBE, AMON , ZAHAF AND FRANSSENDesign Date : 09/08/00

Hierarchy of Goals (HG) Objectively Verifiable Indicators (OVI) Means of Verification (MOV) Assumptions/Risks

a) Sector Goal

The sector goal of the project is to alleviate povertyand check regional inballance.

1.1 the percentage of the people below poverty thresholdgoes from 8% in 2000 to 7 % in 2007 ;

1.2 increase in agricultural and non-agricultural incomes offarmers from 15% per annum for a period of five years

1. Report of DGFE/MA and ProjectCompletion Reports

2. Regional Survey and Statistics

b) Project Goals

(i) the specific objective of each project is to increasesustainably, the production and income of the farmersin those areas, thereby contributing to theimprovement of the living conditions of beneficiaries.;

1.1 Additional productions are: 235.000 tonnes ofagriculture production; 1.600 tonnes of meat,1.300.000 litres of milk; 16 tonnes of wool and5tonnes of honey

1.2 Increase the agricultural income of farmers by 250%at the end of the project

1. Progress Report

2. Mid-term Review

3. CD reports

4. Outcome of Monitoring andEvaluation

5. Outcome of surveys during and at theend of the project

1.1 political and economic stability

c) Achievements

1. Improved Protection and Management of NaturalResources:- Developed Preservation of Water and Soil

Progress Reports and mid-term review andCD reports1. Progress Reports and the Consultant’s

monitoring and evaluation2. CD reports3. Works and contract reports4. Mid-term Review5. Reports on environment monitoring

- Priority of the Government in Matters ofManagement of Natural Resources

- Identification with and the contribution ofbeneficiaries to the completion of the project

Absence of recurrent drought

1.16.

-

- - Development and Completion of RuralInfrastructure

1.10 133 km rural earth roads completed and maintained1.11 90 replenishment works completed1.12 85 sewerage works completed on the oueds1.13 400 Engine sheds constructed1.14 500 Catchment basins constructed

1. Progress Report2. Works and contract reports

Same

- Hydro-geological and pastoral Infrastructurecompleted

1.15 25 Deep drilling for prospecting1.16 45 Pressure measurement for layers1.17 300 Surface wells dug and 23 bore-holes with 970

existing wells rehabilitated and equipped1.18 230 Traditional tanks of 80 m3 and 90 tanks of

1. Same

2. Same

ii


- Hydro-agricultural development

200m3 constructed; and 40 large tanks for watersupply to livestock

1.19 6.050 ha rehabilitated for intensive farming1.20 5.050 ha rehabilitated for intensive farming1.21 900 ha PIC rehabilitated and equipped with irrigation

equipment

2. Agriculture and livestock Production improved 2.1 Additional agricultural production en full productioncapacity of 235.000 tonnes, 1.6000 tonnes of meat,16 tonnes of wool, 5 tonnes of honey and 1.3000.000litres of milk

1. Same2. Same3. Reports and contracts with IRA

3. Co-ordination with the CRDA TechnicalServices

4. Government’s assistance in creating agriculturaldevelopment groups

5. The farmers register with the project and areready to make their contribution towards itscompletion

- Arboriculture en sec et en irrigué augmentée

- Superficies irriguées accrues et méthodesculturales intensifiées ;

- Expansion des cultures d'épandage;

- Amélioration de l'alimentation et desperformances des animaux

2.3 22.540 ha of tree cultivation completed on CES ,2.4 7.460 ha tree cultivation (olive trees) regenerated;2.5 2.570 ha tree cultivation irrigated2.6 5.900 ha cereal cultivation and 2.000 ha of market

gardening2.7 6.100 ha of shrub forage

2.8 5.000 ha Cultivated in sewage;

2.9 140 ha of forage plantations and 3000 ha of cactusplantation

2.10 5.000 ha of Alfa tree development completed

1. Reports on environment monitoring

2. Progress Report

3. Supervision Report

4. Mid-term Review Report

1. BTS and OEP l Reports

Same

6. The technical measures adopted by the farmers

7. The farmers register with the project and thetechniques are under control

8. Financial Resources of Farmers for the co-financing of CES works, irrigation anddevelopment. Protection for 3 years is compliedwith.

- Increase in the production of trails; stabilisationof dunes

2. 21.000 ha of trails developed and dunes stabilised3. productivity of developed trails and improved

livestock4. 710 km of windbreaks and the biological

consolidation of works5. 900 km of tabias made, raised and maintained

1 Progress Report and Completion Report;

2. Reports on environment monitoring

Same

3. Development of the Rural Folks- Creation and strengthening of local farmers

organisations3.1 10.000 farmers regrouped into 150 local organisationsat the three Governorates3.2 150 concerted development committees created andoperational

3.3 Viability of local organisations

1. Same2. Progress Reports; Monitoring-

evaluation Report by an IndependentConsultant

3. Mid-term Review Report

- Integration of women into farming and thedevelopment of non agricultural activities

3.4 900 Women trained in micro-enterprise at the threeGovernorates: 1. Supervision Report

2. Reports from BTS, ONA and NGOs

iii


3. Mid-term Review Report- 8. Women groups trained and fully active,

participation in development committees;possibilities of non agricultural employment

4. Project ManagementUnit of the project fully active

3.5 120 Viable Women Groups;3.6 30 Women in the Development Committee3.7 150 Operational micro-enterprises;

Personnel recruited or brought by the CRDA/MA

4. Reports from BTS, ONA5. Survey on the Reference Situation

Reports from PMU and CRDACompetent and Motivated Senior and Support Staff

d) ACTIVITIES-

1.1 Development Works

2.1 Agro-pastoral development

3.1 Organisation of the Rural Folks

4.1 Project Management Unit

Budgetary Allocation by Category of expenditure (UAmillion)Infrastructure Works: UA 3476 millionEquipment and Material: UA 5.37 millionVehicles : UA 0.52 million

Services:Technical Assistance and Consultants : UA 2.37 millionResearch: UA 0.33 millionTraining: UA 1.42 millionStudies : UA 0.33 millionLoan : UA 8.76 millionLocal Contracts: UA 1.16 millionOperations: UA0.71 million

Total : UA 63.86 million

1. List of Goods and Services of theproject

2. Disbursement by Category ofExpenditure

3. Project Supervision Reports andProject Completion Report

1.1 Loan Agreement Signed promptly

1.2 counterpart funds to the CRDA promptly

1. ORIGIN AND HISTORY OF THE PROGRAMME

1.1 Agriculture occupies an important place in the economy of Tunisia, though itsdevelopment remains weak due to lack of arable land and lack of adequate and potable watersupply. Consequently, this sector continues to be highly dependent on climatic contingencies. It istherefore in view of these reasons that for nearly two decades and especially under the VIII and IXfive-year plans, the programme of the Government of Tunisia in the area of agricultural and ruraldevelopment aimed at mobilising nearly 90% of the country’s water resources for the year 2000.This goal is being reached as a result of an investment programme focusing on the one hand, on theconstruction of dams and hill-water catchments, on the other hand, on works to preserve waters andsoil through a rational management of natural resources. These measures, which are still on-going,are accompanied with a policy of encouragement of water economy at plot level, as well as acampaign to combat desert encroachment and reforestation of denuded soil.

1.2 Moreover, the political will of openness and integration of the Tunisia market to theEuropean Union has led the Government to adopt a dynamic policy of « economic enhancement ».This policy is visible at the agricultural level by: (i) a larger involvement of the private sector andbeneficiaries in the activities of development (participatory approach in programme design andimplementation); (ii) the establishment of « true price determination » through the gradual reductionof subsidy in the non strategic sectors. Furthermore, the mobilisation and the good management ofwater resources on the one hand, and the protection of arable land against the effects of water andair erosion as well as the protection against the Sahara desert encroachment , on the other hand,form the basis for the rural development policy. In addition to these development measures, theGovernment continues to pursue its policy of reducing regional gaps and creating regionaldevelopment poles aimed at keeping in place the most deprived people, and creating new jobs forthe young school leavers, as well as gainful occupations for the women folk.

1.3 In this vein, it should be noted that the African Development Bank Group (ADB) hascontributed substantially for an amount of UA 487 million to the implementation of 15 projectscovering works for the preservation of water and soil (CES) and the programme for integrated ruraldevelopment (PDRI) and the integrated agriculture development programme (PDAI). In view ofthis long co-operation, the Government of Tunisia transmitted to the Bank, the reports of theidentification of this programme prepared by the CNEA for each of the Governorates (September1998 for Gabès, August 1998 for Gafsa and February 2000 for Kasserine). The Bank repliedfavourably to the request for financing made by the Government by financing the programme’spreparatory study for the Governorates of Gabès and Gafsa which was prepared by the Centre forInvestment of the FAO in November 1999. The preparatory study of the programme for Kasserinewas designed later in February 2000 by the Centre National d’Etudes Agricoles (National Centre forAgricultural Studies) (CNEA), Tunisian firm and the cost was borne by the Tunisian budget.

1.4 An appraisal mission from the Bank comprising an Agriculture Economist, anAgronomist, an Environmentalist and a Civil and Irrigation Engineer went to Tunisia from 06 to 28April 2000 for Gabès and Gafsa, and from 14 to 30 June 2000 for Kasserine.

1.5 The present programme will be covered by an appraisal report and three (3) loanagreements for each of the three integrated agriculture development projects (PDAI), namely, thoseof Gabès, Gafsa and Kasserine. Thus, the present report records significant modifications withregard to the usual format of the Bank in matters of appraisal. Consequently, the structure of thereport has been adapted to take this exigency into consideration.

2

2 THE AGRICULTURE SECTOR

2.1 Major Characteristics

2.1.1 The agriculture sector occupies an important place in the economy of Tunisia where itemploys about 35% of the workforce. The agriculture sector contribution to the GDP went from24% in 1960 to 14% in 1998 as a result of the high growth in other sectors and the vulnerability ofagriculture to rainfall. Nonetheless, in the past 15 years, the agriculture sector has grownsatisfactorily at an average rate of 4% par annum. This growth is largely as a result of themobilisation of water resources, encouragement of investment, development of infrastructuralfacilities, the liberalisation of the sector and the improvement of services to professionalassociations. Despite the efforts to diversify, agricultural exports, ¾ of which are represented bythree products (olive oil, sea-foods and dates), are in rapid decline and represent not more than 8%of the entire export volume of the Country. The cover rate of export volume by agricultural exportsoscillates between 70 and 80% depending on the year.

2.1.2 Tunisia has limited natural agricultural resources estimated at 8.4 million ha (50% of thenational territory): the cultivable lands represent 5 million ha of forests, 1.2 million ha of espartosand 2.2 million ha of pasture lands. Cereals account for one-third of cultivable lands, tree-planting,another one-third, and the rest is divided among fodder, gardening, legumes and fallow. Irrigatedsurface area is about 250 000 ha but the available resources in water remains low. Livestockcomprises 650 000 cattle, 6 400 000 sheep and 1 300 000 goats. The agro-pastoral production,highly dependent on climatic contingencies, contributes to more than half to the family income andremains the major occupation of two-thirds 2/3 of the rural population.

2.2 Land Tenure

2.2.1 The present land tenure system comprises four (4) categories: (i) a statute for modernownership with certificate of occupancy; (ii) a statute for traditional ownership based on a type ofownership such as privately owned lands without certificate of occupancy; (iii) lands collectivelyallocated for private use; (iv) collective lands for trails and private lands. Some lands for trailspurposes could be subjected to forest land regulations to allow for pastoral development. In thatcase, the communities still reserve the right of ownership while the right of use is determined by thecommunities and the forest authorities. Presently, the decision to privatise is taken by the Boards ofManagement (Bodies elected by users) and approved by the competent administrative authorities.Due to the slowness in issuing title deeds, the Government established in 1974, the certificate ofoccupancy procedure which could be issued to farmers after five years of use of the land as anowner. This certificate helps to obtain bank loans and to benefit from development facilities.

2.2.2 Despite the remarkable progress made by the women in the last thirty years, (47.3% of girlshas access to basic education, 50.2% for the secondary and 45.9% for higher education), it remainsreal social constraints which reduce their access to properties. The access to properties is one of themost restrictive sociological constraints. Nonetheless, the Government has taken measures toregularise titles through land matriculation by bringing solutions in the absence of secured indirectenhancement, the problems jointly owned property, the management of collective lands and theparcelling of farms by heritage. Once again, such dispositions have constraints especially at thelevel of women, on the cultural weight and social environment.

3

2.3 Contraints and Prospects

2.3.1 The major constraints facing the agriculture sector in the area of the programme are: a) thephysical nature characterised by low and irregular rainfall, the scarcity of soft and fertile cultivablelands, inadequate underground water resources (salinity), the degradation of land through water andwind erosion agravated by salinity; b) the technical and institutional aspects: the improper farmingmethods; the overgrazing and desert encroachment, the land tenure and parcelling of farmlands; thelow activities of organisation and extension, of agriculture loans and of research-development; thelow commitment on the part of farmers in the development of hydro-agriculture; the inadequacy oforganisations at the base; the under-equipment in rural infrastructure especially in the Southernareas of Tunisia.

2.3.2 The country has about 380 000 farmlands of which 45% have less than 5 ha and 68% lessthan 10 ha. The management of community lands, the smallness of the farmlands for rain cropping,the excessive parcelling of farmlands through inheritance, regulation of title-deeds are the majorproblems facing the sector.

2.3.3 Tunisia has the wherewithall to ensure a sustainable development. Furthermore, the newparticipation policy involves the farmers in the designing and implementation process ofdevelopment programmes. This action receives the support of an existing network of orgainisationsat the base, the new legislation on development groups in the agriculture and fisheries sector(GDA), the agriculture tradition recognised by the local people for agriculture development and theparticipatory management of natural resources. Moreover, amongst the major factors which havecontributed to the development of agro-pastoral and agriculture in the Centre and South of Tunisiaare: (i) privatisation of community lands which form the largest part of community lands; (ii) thegeneralisation of mechanised farming and the extension of cultivated areas, especially in tree-planting; (iii) the encouragement given by the State through the various programmes in the area ofdry and wet farming; (iv) the generalisation of supplementary agriculture with livestock and withagriculture by-products; (v) the rescource to non agriculture revenues (trade, emigration) for thefarming of privately owned lands.

2.4 Agriculture Sector Policy

2.4.1 The major orientations of the Government’s agriculture policy, implemented under the IXthDevelopment Plan (1997-2001) aim to: (i) mobilise, protect and utilise rationally, the naturalresources; (ii) upgrade the sector in order to cope with the liberalisation of the domestic market andthe exigencies of the international market; (iii) consolidate professional organisations; (iv) improvethe sector productivity by removing the various constraints (land tenure, loan, research/extension);(v) improve the gains of agricultural activity in order to attract investments and help to keep thefarmers in the rural area; and (vi) contribute to combat poverty by reducing inter and intra-regionalgaps. To meet these objectives successfully, the Government of Tunisia has adopted an extensivelytested programme approach for which the country has a good stock of experience. This is theintegrated rural development programme (PDRI) and the management of natural resources with anew policy of participation involving beneficiaries at every stage of implementation.

3 NATURAL RESOURCES MANAGEMENT

3.4 Major Characteristics

3.4.1 The Tunisian natural environment, characterised by relatively scarce and fragile resourcesin soil, water, and natural plant cover, requires to meet its increasing demand in natural resources ofa population which has doubled in the last 25 years. The growth which the agriculture sector mustrecord in order to cope with these demands is hampered by lack of arable land because 50% of the

4

country surface area, or 8.4 million ha have already been given to agriculture and livestock. Thecountry’s water resources are very and put at about 4.35 billion m3 per annum or 62% in surfacewater and 38% in underground water. Thus, considerable efforts made to raise and diversifyproduction gave rise to abuse of some resources whose deterioration level varies from one region toanother.

3.4.2 With regard to natural resources, the annual national consumption has almost reached themaximum of resources available. In deed, aside from the household and various industries,including tourism, irrigation accounts for between 2 and 2.2 billion m3 or 84% of the totalconsumption estimated presently at 2.5 billion m3 ; this figure represents 92% of renewable waterresources. Thus, as a part of the surface water is yet to be tapped, this demand is currently metthrough an over-use of underground water deposits. Given these data, the situation may still getworse. The Government’s strategy therefore, is to mobilise the entire renewable undergroundwater/resources and control 88% of the surface reserve, which should offer a first response to thecritical problem of water. But this will not be enough. The authorities have therefore began awater-saving campaign through the introduction of new planting techniques, training og users inwater management, and the rehabilitation of some networks with very low efficiency rate.

3.4.3 Concerning plant life and soil resources, nearly one-third of cultivated lands is of poorquality. Esparto which cover 0.7million ha is insufficient to meet, on the average, more than 35% ofthe requirements of livestock estimated at 6.5 million heads. Tunisia is faced with a host ofendogenous and exogenous factors giving rise to three types of degradation: water erosion, winderosion and salinity. Water erosion (which affects a surface area estimated at 2 million ha ofcultivated land) stems from the combination of natural factors such as the relief and theaggressiveness of stormy rains and human activities, culminating in the gullying of slopes and theerosion of banks of oueds. The salinity of irrigated land affects mainly the large irrigated areas andthe desert encroachment is as a result of both water and wind erosions and affect mainly the shallowstepped soil of the South of the Country where rain, though less frequent, is more aggressive.

3.4.4 CES ambitious programmes, implemented over the last twenty-five years, are aimed, firstand foremost, at combating erosion and mobilising surface water. The result was inadequate duringthat period mainly as a result of poor coordination among the various parties, the lack ofinvolvement of beneficiaries and an inadequate maintenance of infrastructure. The implementationof the national strategy of CES (1990-2000) and the publication of the CES Code (1995), matchedby a participatory policy for beneficiaries, made it possible to improve these results. The presentprogramme falls within the framework of these new strategies.

3.5 Institutions of the Rural Sector

3.5.1 The Ministry of Agriculture (MA) operates in the rural sector and manages integratedagriculture development projects (PDAI) at the national level. The MA comprises eleven (11)general directorates (Water, Rural Engineering, Water resources, Forestry, Finance & Incentives,etc.) and two (2) directorates (Water Preservation and Soil Preservation). At the regional level, MAis represented in each of the Governorates by a Regional Commissariat to Agriculture Development(CRDA) within which the general directorates are represented by departments called‘arrondissements’. Headed by a Commissioner, the CRDA and is divided into five divisions (Waterand Rural Equipment, Promotion and Agriculture Extension services, forestation and SoilProtection, Studies and Administration & Finance). Furthermore, MA supervises several agenciesand offices (Cereals, livestock breeding and grazing, Fisheries, etc.) which deal with specific tasksand are represented at the Governorates with their respective duties.

3.5.2 The Ministry of Economic Development (MDE), through the Commissariat General forRegional Development (CGDR), also operates in the rural sector by managing integrated rural

5

development projects (PDRI). Its intervention on the ground is co-ordinated by the Governorate, incollaboration with all the specialised directorates of the various technical ministries

3.5.3 At the local level, the country has a good network of organisations for the management ofnatural resources, namely: (i) Associations of Co-operatives (AIC) for potable water and irrigation;(ii)Association of Forestry Co-operatives (AFIC) ; (iii) Organisation of water and soil preservation(GCES); (iv) Management Boards; (v) Agriculture Development Co-operatives (CAS), etc. Theseassociations henceforth have a broad area of operation (protection of natural resources,development of agriculture and pastures, marketing) and can legally receive subsidies and sigh loancontracts. The agriculture Department Co-operatives (CAS), multi-stock companies, established bythe farmers, operates in the supply of inputs and marketing of agriculture products.

3.5.4 The Non Governmental Organisations in agriculture and rural development are a relativelyrecent development in Tunisia. Yet, they have often appeared weak, marked by limited human andmaterial capacity, and lacking in professionalism, organisation and strategic vision.

3.5.5 The National Union of Tunisian Women (UNFT) has a large regional representation and itsmajor objectives are directed at the promotion of women, the removal of all forms of discriminationagainst them and their involvement in the national development programmes.

3.5.6 Loan to the rural area is essentially granted by two institutions: la Banque nationale agricoleNational Agriculture Bank (BNA) and the Banque tunisienne de solidarité the Tunisian SolidarityBank (BTS). The BNA enjoys the status of a universal bank with administrative and financialautonomy, and lends on the basis of a technical-financial study, generally prepared by CRDA. Withregard to BTS, created in December 1997 by the Government, its role is mainly to promote micro-enterprises, the rehabilitation of workers, and more generally, to contribute through micro-financingto the development of income generating activities, and this as a result of the problems besettingBNA’s formal lending to the rural sector. BTS has a capital of TD 30 million, of which 18.6 millionis public share. It grants loans without banking guarantee at a rate of 5% per annum to clients for aminimum amount of TD 33,000. The duration can be extended to 11 years with one year graceperiod.

3.5.7 There are also structures established by the Government which are responsible for managingguarantee and loan subsidy tools as well as incentives. Featuring among these structures isAgriculture Development Solidarity Fund (FOSDA) whose objective is guide the rural peopletowards priority development activities.

3.6 Constraints, Prospects and Opportunities

3.6.1 The factors hampering the development of resources are linked to the constraints of physicalenvironment, institutional and national development: (i) mountainous chains, irregular and stormyrainfall, inadequate and sometimes poor quality underground water resources; (ii) deterioration ofplant cover; (iii) sedentary nature of farmers and lack of integration of achievements (separateapproach of various technical service operators); (iv) shortcomings in research-development; (v)low involvement of farmers in development; (vi) low organisation and extension activities andlimited institutional capacity of organisations at the base; (vii) unequal population distribution.Despite the gradual degradation of natural resources, there are, nonetheless, possible solutions tothese constraints. These solutions are to be sought in following three directorates:

3.6.2 Greater Awareness of the Efficiency of Economic Incentives: management of naturalresources and sector policies should aim at creating an incentive framework which would guide thefarmers in the direction of an improved management and a sustainable management eventually.This requires a greater awareness of the incentives of the main actors, the village community,

6

through an on-going system of socio-economic surveys, land issues, prices and subsidies whichplay an important role in the management of natural resources.

3.6.3 Implementation of a participatory Approach to a Sustainable Natural ResourcesManagement to improve dialogue between the Government and the Village communities. In thiscontext, the State becomes the promoter, the mover, the catalyst of local development potentials,and the village communities move progressively from a passive position of the Assisted to that ofdecision makers seeking state support to implement their programmes. The men and women will beinvolved in decision-making process. This participation is all the more important as the women playan essential role in the management of natural resources (water for household use, firewood,farming, etc.).

3.6.4 Focus of the New Technical Package for the Farmers: The participatory approach equallyresolves the concern of using the most appropriate techniques in agriculture and in the preservationof water and soil. Agricultural research should allocate adequate resources to the peripheral zoneswhere the natural resources are particularly threatened (relatively low output and poor livingcondition). The Government’s agricultural policy therefore aims to keep the people in the ruralareas through the programme for the improvement of living condition (Schooling at 100%, a nearcomplete cover in electricity and drinking water), harmonise the various levels of developmentwithin the regions, reduce poverty, reduce the gap between the social groups in the rural areas, andfinally, guaranty the sustainability of natural resources.

3.7 Policy and Strategies

3.7.1 The policies and strategies implemented under the country’s natural resources managementhave helped to remove the degradation of these resources despite an unalloyed support from theState in mobilising significant human and financial resources and a host of very complexregulations. Water resources remain largely used or overused. Some irrigated areas also haveproblems of salinity and hydro-morphical soils. Forests and trails are getting smaller and poorer,and mountain agriculture is in an increasingly precarious state due to soil degradation.

3.7.2 To resolve this problem, the Government established a new participatory approach whichconsisted in sensitisation through information days, surveys, meetings involving the potentialbeneficiaries and association of beneficiaries, as well as all the administrative and political bodiesinvolved in the programmes. The final goal will be to harmonise these strategies with those of thefarmers and stock-breeders, users of these resources. Moreover, in order to resolve the problem ofwater management, the Government has established some incentives aimed at optimising the use ofthese resources, especially on the procurement of materials and equipment to help to economisewater.

3.8 Operations of Donors

3.8.1 Within the framework of the protection and the mobilisation of natural resources, theTunisian Government has adopted a CES programme which is supported through a strategy,panning the period 1990-2000. As priority, this programme aims to combat erosion, mobilise waterresources and rationalise their management. The various activities of this programme have beenfinanced by the Government of Tunisia with the assistance of different donors. Based on theexperience from similar projects and programmes implemented in the various regions of thecountry, Tunisia has a good stock of experience which she hopes to spread to other regions under asustainable agricultural and pastoral development.

3.8.2 In this vein, the ADB has financed significant components relating to water and soilpreservation under the Ras Djebel hydro-agricultural development projects, the development

7

projects of the rural areas of the most deprived people (PDRI 1 and 2) and the Rural developmentProject of Interior Delegations of Mahdia (Phases 1 and 2). Furthermore, the European Union hasfinanced the construction of wind-breaks and hill-water catchments at the national level; theJapanese Co-operation finances reforestation activities and hill-water catchments in Tunisia. FIDAcontributes to the financing sylvo-pastoral project for the participatory management of lands in themountainous areas. The World Bank finances forestry development project at the national level; theintegrated agricultural development project in the Governorate of Zaghouan and the naturalresources management in the Governorate of Kasserine.

4. THE PROGRAMME

4.1 Programme Design and Justification

4.1.1 The programme which covers the three Governorates of Gabès, Gafsa and Kasserinefalls under the priority actions of the Government in the area of water and soil preservation andprotection. It was designed in the form of integrated agricultural development projects (PDAI) andthus helps to resolve the problem in these areas at the rural sector level, namely: (i) the preservationof natural resources; (ii) the development of lands thus saved through the utilisation of agro-pastoraltechniques for increase in production; (iii) the increase in revenue of the people thanks to theimprovement in the management of farms and the creation of income-generating activities for theyouth and the women, as well as ; (iv) the creation of development poles for the beneficiaries,aimed to reduce the regional gap and check rural exodus. This programme will be executed whilealso taking into account, the participatory and incentive approach at economic and social level as aresult of the training of target groups and professional association in the area where the programmeis executed

4.1.2 Considering the nature of this programme and the experience acquired by the CRDA, itwas decided that the programme activities should cover four areas of implementation, namely: (i)CES works; (ii) irrigation infrastructure, (iii) organisation of the rural populace and (iv) agro-pastoral development. The design and formulation of the programme in Gabès, Gafsa and Kasserineas decided at the preparation stage have noted the removal by Tunisia, the construction of a hill-water catchment and the wind-breaks in Gabès initially designed to enable the reconstitution of thequality of the water table at Gabès on the one hand, and to resolve the problem concerning winderosion, on the other hand. This decision was motivated by the fact that these two activities will betaken into consideration in the national programme for rhe construction of hill-water catchmentsand wind-breaks whose financing has been requested from the European Union. This modificationhas no impact on the programme justification, subject to the construction of the wind-breaks inaccordance with the initial plan. This is another loan condition.

4.1.3 This programme also falls under the Bank’s policy as well as that of the Government ofTunisia, and takes into consideration, the lessons learnt from similar projects financed by the ADB.In fact, the institutional capacity of the project management units was taken into considerationduring the preparation of the implementation programme of the various components. Theaccompanying measures have also been identified in order to ensure, on the one hand, an effectivelyparticipatory approach of beneficiaries and, on the other hand, the handling of recurrent expenditurethanks to an improved organisation of professional associations. This same approach had beenadopted with regard to infrastructure whose sustainability will be guaranteed as a result of thelessons learnt from similar projects. Based on the implementation of projects in the past, Tunisiahas companies capable of carrying out hydro-agricultural development of CES professionally(136.000 ha of catchment basins have been treated), and the Regional Commissariats forAgricultural Development (CRDA) have the institutional capacity to ensure a good programmepreparation, by leaning on the good knowledge of their areas of intervention and a rational

8

organisation of the area. The CRDA can also assure or monitor the compulsory accompanyingactions (research-development, training, extension, organisation and study of loan applications).

4.2 Programme Areas and Programme Beneficiaries

4.2.1 The programme’s area of intervention are the Governorates of Gabès, Gafsa andKasserine and covers an area of 1.541.300 ha or 572 000 ha in Gabès (about 80% of theGovernorate), 480.300 ha at Gafsa (about 65% of the Governorate), and 489.000 ha at Kasserine(about 59% of the Governorate). These areas are the mountainous regions in these Governorates.The climate is the arid or Sahelian type with irregular rainfall varying, on the average, from 90 to210 mm/annum in the Gabès area and 80 to 200 mm/annum in the Gafsa area. In the Kasserine area,the climate has some advantages with a rainfall estimated at 200 - 450 mm/annum. Water shortagein the Southern areas reaches 1,550 mm in Gabès ; 1,900 mm in Gafsa and 1,800 mm in Kasserine.Contrary to the Northern part of the country, agriculture cannot develop in these areas without watersupply.

4.2.2 There are several water tables being used in the areas of the programme. They haveresources which can be harnessed so that wells can be used. Nonetheless, the possibilities for themobilisation of surface water are low to guarantee the development of the area where agricultureand extensive livestock breeding (the ovine race) on the trails, are the major activities of thefarmers. Excessive parcelling of land hampers the modernisation of the agricultural system as aresult of which, there is a drop in agricultural production. Aside from these aspects, the choice ofthe programme sites has been based partly on the serious degradation of water and soil resources,and partly on the fact that these are the most underprivileged areas in the Governorates concerned.

4.2.3 The programme areas have a population of about 384,000 inhabitants. The beneficiarieswill be the rural folks living in the areas where CES development and infrastructures are beinginstalled. More specifically, each of the areas has the following characteristics:

(i) In general, the beneficiaries are known for their experience in CES works andmost of them have enjoyed the good works of FOSDA. The intercalary system oftree-planting with cereals and extensive livestock breeding on the collective trailsis the most wide-spread. Most of the women participate in farming and also carryout artisanal and some livestock-breeding activities. But presently, the trainingand extension programme has had little impact on them due to social constraintsin the rural area. The programme provides for their benefiting from supportactivities for the rural folks.

(ii) More specifically in the Gabès area, the project beneficiaries will be those farmingon existing areas of 4,500 ha for whom the CES works will be carried outupstream to protect their farm-lands as well as the rural populace living on about60% of new land which the programme will allow them to rehabilitate. The farm-lands in the project area are generally small (11 ha) with 10 to 40 heads of smallproductive ruminants. With regard to the Gafsa area, the profile of beneficiaries ispractically the same as in Gabès. About 3,100 farmers will benefit from theprojects.

(iii) The Kasserine project has particularities different from the two other projects. Byits nature, the project will give priority to farmers who own developed lands withirrigation infrastructure, and then, those who carry out irrigated tree-plantingwhose lands are being threatened by erosion. Income-earning activities for thewomen and the youth will also be developed under the Gabès and Gafsa projects.About 770 farms (2,350 people) or 5.6% of the present rural households of theGovernorates will benefit from the project.

9

4.3 Strategic Context

4.3.1 The programme, as it is designed, will contribute to provide response, in the variousareas of intervention, to most of the constraints described in Chapters 2 and 3 of this report. Thisprogramme also falls under the Government’s strategy as defined in the IX five-year developmentplan for the period 1997-2000 (see Paragraph 2.4.1). Furthermore, it is in line with the ADB Groupintervention strategy in the agriculture sector as contained in the CSP for the period 1999-2001,especially the mobilisation and management of water and soil resources, the promotion ofparticipatory management, private initiative and poverty reduction. Moreover, at the sector level, itshould be noted that the programme will help to resolve the problem of intensified farming in theirrigated areas. In deed, the rate presently being observed is about 107% to 116%, while the averagerates obtained with the CRDA guidance are about 145%. Furthermore, the current rates ofsatisfaction in water to plants vary from 21% to 29% of their requirements, because the installedirrigation system is inadequate. The programme, as it is designed, will be able to increase theserates.

4.4 Programme Objectives

4.4.1 The sector objective of the programme is to reduce poverty and regional imbalance. Insuch context, the specific objective of each project is to increase sustainably, the production andrevenue of farmers in the areas concerned, by contributing to the improvement of the livingcondition of beneficiaries.

4.5 Programme Description

4.5.1 The programme is essentially to carry out development works aimed at preserving thequality of soil and enhancing the reconstitution of water tables, and improving water management.In this vein, the programme will undertake the implementation of the following: (i) protect andmanage the natural resources in a rational manner ; (ii) improve agriculture and livestockproduction; (iii) enhance the creation and strengthening of local organisations; and (iv) integrate thewomen and the youth in the local organisation and develop the non agriculture activities. Thesedevelopments will help to recover new fertile lands for agriculture and livestock breeding, and ofwhich about 60% will be developed by the farmers.

4.5.2 Generally, the programme includes the following components at each agriculturedevelopment project (PDAI) of Gabès, Gafsa and Kasserine:

A. Development WorksB. Agro-pastoral developmentC. Assistance to Rural OrganisationsD. Project Management Unit

A. Development Works

4.5.3 This component, concerns, on the one hand, the construction works necessary for thepreservation of water and soil, and on the other hand, the completion of rural infrastructures andhelping to check and harness water tables with the development of irrigated areas and theimprovement of grazing area. The detailed description of achievements of this component is asfollows:

4.5.4 Preservation of Water and Soil (CES): Works concerning the treatment of 21 catchmentbasins of which nine (9) are in Gabès and eight (8) in Gafsa and four (4) in Kasserine. In thisregard, the programme has identified, in the two areas, eight (8) catchment areas which have neverbenefited from CES activities, as against nine (9) which were treated by CRDA. In addition to theseactivities, are CES works on private lands, at the downstream of the catchment basins in Gabès

10

whose upstream water had not been treated. These works will help to secure the lands which arealready in use over 5,400 ha in Gabès and 3,000 ha in Gafsa. The major achievements of componentwill be as follows:

Achievements Unit Gabès Gafsa Kasserine Total

1. Anti-Water Erosion Treatment of Catchment Basins:

1.1. Water Treatment with Joussours and Tabias1.2. Mechanical Excavation1.3. Manual Excavation1.4. Banquettes in Gabions or Dry Stones1.5. Subsoiling

2. Treatment of Ravines and Water Reservoirs2.1. Irrigated Area from the Water Reservoirs2.2. Refilling Works Constructed2.3. Reservoir Works Constructed2.4. Protection of “Epis” constructed along the

Oueds3. Recuperation of Rain Water

3.1. Traditional Reservoirs of 80 m33.2. Modern Reservoirs of 200 m3

hahahahahahahaha

unitunitunit

unitunit

12.6001.6009.5001.500

1.0001.000

2020

15050

10.30010.4007.9001.000

1.4002.000

4050

8040

10.000

6.000

2.5001.500

2.000301515

32.90012.00023.4002.5002.5001.5002.4005.000

908515

23090

4. Land Recovered on CES Works ha 15.800 13.100 10.000 38.9005. Land Recovery Works5.1 Fight against silting and Environmental Protection5.2 Biological Consolidation of Works and Windbreaks5.3 Designing and Maintenance of Tabias Palms5.4 Raising of tabias5.5 Biological Consolidation of Works

kmkmkmha

560 (p.m)280225

150200 100

100

710580325

4.5.1 Development of Hydro-agriculture and Rural hydro-geological and pastoral Infrastructures:The major achievements of the project for these components will be the following for Gabès, Gafsaand Kasserine:

Achievements Unit Gabès Gafsa Kasserine TotalA. Rural Infrastructures1. Earth Roads2. Deep Drilling (300ml –360ml)3. Piezometres4. Surfaces Wells5. Well Rehabilitation and equipment6. Recovery of Abandoned Wells7. Completion of Drilling and Construction of Basin

kmunitunitunitunitunitunit

2710157012

8

516

15120115

559

15110630190

15

1332545

300757190

23

B. Protection of Works1. Shelter for Engines2. Storage Basins

Unitunit

400500

400500

C. Development of hydro-agriculture1. Areas Claimed for Intensive Farming2. Areas Claimed for Extensive Farming3. 9 Irrigated Areas for Collective Use4. Irrigated Areas5. Irrigated Areas Equipped with irrigation

Equipment

hahahahaha

150450

4.000600

1.9004.000

540600750

6.0505.050

540600750

11

D. Water and Pastoral Improvement1. Rehabilitation of Existing Plantations2. Protected trails (Developed trails)3. Fodder Shrub Plantations4. Reforestation5. Cactus Plantation6. Esparto Development7. Shade Groves Completed8. Large Reservoirs for Water Supply to Livestock

hahahahaha

unitunit

7504.000

500140

30

13505.000

450

10

5.00012.0001.500

3.0005.000

45

7.10021.0002.450

1403.0005.000

4540

12

4.5.2 Dyke and Underwater Level (Gafsa). Water from the Oued Melah in the Sabkhet El Guettarfloods the neighbouring oasis of Gafsa with salt water. The project finances the survey and thecompletion of a dyke to canalise this oued on its former bed towards Oued Bayech. An underwaterlevel is projected on the Oued Tebiddit in order to create locally, an under-flow of water to supplythe neighbouring wells. The project will finance the survey and the completion of this component.Furthermore, the project will finance ways to provide a technical solution for the deviation ofstream which presently runs through Sabkhet Ain Ghazel and collects salt before going to filtrate itupstream in the water whose salt concentration reaches 60 g/l.

4.5.3 Fight against Silt: there is provision for the construction of 280 km and 200 km of tabiaswith palms (Gabès and Gafsa), 225 km of raised tabias and the biological consolidation of works on560 km (Gabès), and 150 km of windbreaks at Gafsa. All these works will be carried out by CRDAunder a project financed by Japan and are therefore simply being recalled here as they willcontribute to the protection of new plantations of the project. As a result, the Tunisian part willundertake to programme the implementation of these works in conformity with the schedule of thisproject. This will also be a loan condition.

4.5.4 The implementation of this component will help to reclaim an agricultural area totallingabout 15,800 ha in Gabès, 13,100 ha in Gafsa and 10,000 ha in Kasserine. In addition to this, thereare 9,000 ha of trails which will be protected and protected trails. In Kasserine, the project willdevelop 17,000 ha of Esparto and pastoral areas.

B Agro-pastoral Development

4.5.5 The major activities of this component will focus on the development of plant and animalproduction as well as the development and improvement of trails.

4.5.6 Agricultural Development. The agricultural aspects which will be developed through theproject will include the conditions and the existing utilisation systems in the area. The developedareas will be planted with trees (olive trees associated with fruit trees mostly almond, fig andpistachio), cereal and fodder for livestock breeding. Based on this, the following crops have beenretained and will be developed and financed by the beneficiaries through loan. With regard toregeneration and/or rehabilitation of old plantations in dry and irrigation, the regenerationtechniques will be determined with IRESA and particularly with the Institut d’olivier de Sfax underthe agreements being prepared to that effect. Details of the speculations retained on the three siteshave been given hereunder for indicative purposes.

Indicative Distribution of Speculations Retained for the Three ProjectsSpeculations Area (ha) Gabès Area (ha) Gafsa Area (ha)

KasserineArea (ha) total

Dry CropsTree Crops- Olive tree- Almond- Fig/ pistachioCereal Crops

10.7008.2006.600

800800

2.700

9.7407.1405.500

3401300

2.600

2.1001.500

600500400600

22.54016.84012.700

16402.5005.900

Irrigated Crops New PlantationsTree Crops

- Olive tree- Apricot Tree/AFD

GardeningFodder Crops

4.270270210

60900

3.100

3.100800320480500

1.800

2.1001.100

600500600

1.200

9.4702.1701.1301.0402.0006.100

Dry Regeneration / Rehabilitation of OldApricot Plantations (irrigated) 600 260 6.600 7.460

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4.5.7 Pastoral Development: the projects will focus on the zoo-technical improvement oflivestock and its health monitoring, on the one hand, and improve the trails and the esparto whichwill be developed consequently, on the other hand. With regard to zoo-technical and healthmonitoring improvement, the projects will finance the procurement of veterinary products as well assome sires which will be put in the reproduction centres in order to improve the performance oflocal breeds through artificial insemination whose technique is wide-spread in Tunisia. The semenproduced will be sold to the farmers..

4.5.8 The farmers will benefit from loans from BTS and from BNA as well as facilities fromFOSDA to procure hives for apiculture, to construct stables and develop stables within theframework of diversifying revenue base. Particularly in Kasserine, the project will facilitatefarmers’ access to loans for the procurement of heifers and draught animals and will finance thecreation of a veterinary centre equipped with artificial insemination equipment, the creation of milkcollection centre and the expansion of two existing ones. Trails will be developed through theproject and consolidated through the associations of beneficiaries who will subsequently manageand maintain them. The development of these trails will enjoy the results of a research-developmentprogramme which will be implemented by IRA and a management and extension programmeimplemented by the CRDA services.

4.5.9 The individual agro-pastoral activities projected in this programme will be financed by thebeneficiaries from the loans contracted by them from the BTS and BNA and may benefit, inaccordance with the regulation, from the facilities of the Agricultural Development Solidarity Funds(fonds de solidarité au développement agricole) (FOSDA).

4.5.10 Research-development: The new planting and pastoral techniques which were introduced bythe project to the beneficiaries of the three areas will need to be adopted by the latter in accordancewith the local conditions of development. Consequently, a set of agreements whose terms will beprepared by each Project Management Unit has been envisaged. These agreements will concern ,among others, the regeneration of olive-trees, the development of trails, the irrigation techniques inview of the salinity, the utilisation of olive by-products, milk-goat breeding, etc., and will approvedwith the competent authorities of IRESA, especially IRA of Medenine and the Institut des oliviersde Sfax. Each of the UGPs will prepare the contract draft which will be submitted for prior approvalof the ADB. This will also be a loan condition.

C. Organisation of the Rural Populace in Gabès, Gafsa and Kasserine

4.5.11 The strategy implemented through these projects will depend on the involvement of thebeneficiaries in the choice of sub-projects, the consolidation of development, management andmaintenance of project achievements. This method will require a substantial management,sensitisation, training and support effort from the beneficiaries and their professional associationsbased on a good knowledge of their objectives and measures proposed to guarantee the goodmanagement of natural resources.

4.5.12 This component includes support activities to groups for training, extension and organisationand for the creation of groups and associations to strengthen and consolidate the participatoryapproach to natural resources management at the local level, and for the promotion of revenue-generating activities such as artisanal, small scale breeding of rabbit breeding and apicultureespecially for the women. A service contract will be signed with the Office National de l’Artisanat(ONA) for the training programmes for self-employment in the artisanal sectors in the project areas.Training will be done on the bases of areas of priority identified by the projects. To implement suchparticipation, the projects will establish a network of organisers for the specific support activities tothe women at the PMU level of each CRDA. Details of this component at each project level have

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been described in the project implementation documents. implementation will be based on theaspects described here-below.

4.5.13 Information, Sensitisation and Organisation. Training, sensitisation and organisation for theyouth and the women for revenue-generating activities as well as those aimed at project extensionworkers, and trainers will be conducted by the Agence de vulgarisation et de formation agricole(AVFA) on contract basis at each Governorate level. Training of farmers will be conducted by theextension workers and organisers of each project. Details of these programmes will be prepared bythe PMU of each project. The project will also prepare sensitisation programmes based on thesituation of reference, on the establishment and the implementation of the training, sensitisation,extension in favour of the extension workers and the project teams as well as the beneficiaries. Atthe end of each project, about 50 groups and/or associations are expected to have been trained andtaught the participatory approach to natural resources at each project and about 700 trainingsessions will have been organised for the beneficiaries and their associations and groups. Eachproject will make available, a minibus and audio-visual teaching materials, to the organisers.

4.5.14 Creation of Groups and Professiona Associations. These activities aim to strengthen andconsolidate the participatory approach to natural resources management at the local level; in thisvein, 50 groups and/or professional associations will be created in each area of the projects (CES,irrigation, management of trails, co-operatives and others).

4.5.15 Promotion of Rural Organisations: they aim to promote the various existing organisationsthrough sensitisation, organisation and training. The major organisations concerned are as follows:the Board of Management of Collective Lands, Collective Interest Association (drinking water,irrigation), the Local Union of Farmers, the Co-operatives of Agricultural Services, Assistance tothe Association of Herdsmen (procurement of breeding rams, he-goats of pure breed, camels, hives,harvesting equipment, irrigation equipment, collection centres, strengthening of the centre forinsemination, veterinary products).

4.5.16 Assistance to Revenue-generating Activities for Rural Women and Youth: theimplementation of this component will concern: recruitment of organisers, organisation of technicaltraining programmes in the specific areas of activities of women and the monitoring of about 200women and young girls to prepare them for entrepreneurial functions at each of the Governorates.The training of beneficiaries will be organised by ONA for about 200 women to prepare them forentrepreneurial functions at each of the Governorates. They will have access to loan for micro-enterprises: apiculture, cheese dairy, canning, artisanal products, trading and small-scale breeding.The projects will assist beneficiaries in preparing their loan documents. For this reason, the projectsshould have a contract with ONA (cf.4.5.13).

D. Programme Management Unit (PMU)

4.5.17 The programme management will be decentralised at each of the Governorates (see Chapter5). The PMUs will be provided with experts based on the local contract and will include a Directorassisted by five (5) specialists, namely: a Sociologist/Specialist in organisation and sensitisation, anAgronomist in charge of agricultural and pastoral development, a Rural Engineer, an Agro-economist, a Manager/Accountant and Support staff. The Government will provide the necessarystaff for the projects. A complementary training will be given to the programme agents, especiallyfor the gender services.

4.5.18 The programme will also finance, for the three Governorates, the procurement of 24 four-wheel pick-up vehicles and three (3) minibuses to transport the beneficiaries in training, officeequipment and materials of the PMU (15 computers, 4 photocopying machines, 13 Audio-visualmachines for the training, 3 fax-machines and furniture, etc.) and will bear the costs relating to itsrunning. Details of these equipment for each PMU are given in Annex 4.

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4.5.19 The programme also intends to finance the costs of consultants to conduct surveys,especially the diagnostic survey of the programme takeoff, the mid-term review, the the detailedpilot study of developments and infrastructures de CES. Moreover, under the re-parcelling of landand actions specific to the programme, environmental monitoring, etc., it is expected that theservices of consultants and those of Specialised Institutions will be needed. Details of the durationof these services are given in Annex 4.

4.6 Production, Market and Price

4.6.1 Production and Market. The expected additional productions of the PDAIs of Gabès, Gafsaand Kasserine include agricultural speculations (fruits, cereals, gardening and fodder) as well aspastoral (cattle, sheep, goats, milk, wool and honey). The annual output at full production (8th year)is as follows: tree-crops, 27,840 tonnes ; gardening : 50,137 tonnes ; fodder and cereals : 157,595tonnes ; meat: 1,635 tonnes ; wool: 16.2 tonnes ; dung: 6.698 tonnes ; honey: 5,400 kg and milk:1.258,000 litres. Marketing of agricultural products in the programme areas goes essentially throughthe local markets where there is a predominance of traders and private middlemen.

4.6.2 The marketing of olives is generally organised through the oil-mills (oil-olives) or live(table olives). Fruits and vegetables are sold on the wholesale markets and on secondary markets foranimals and non perishable goods. These markets are open once a week by delegation, or on weeklysouk day. Milk is sold through the collection centres. Collection is done by dairy co-operatives.Cereals are marketed under the Government’s policy of food security through the Office descéréales and Central co-operatives.

4.6.3 Price. Whole-sale prices are determined at the Gabès market which is highly influenced bythe mercurial of prices at the Tunisian market. In most cases, the producers accept these prices, andalso remain influenced by the prices of producers in the neighbouring Governorates of Kairouanand Sidi Bouzid as is the case of sheep and goats. The financial and economic prices of allagricultural and pastoral speculations in the regions of Gabès, Gafsa and Kasserine are detailed outin the project implementation document.

4.6.4 Through the implementation of assistance to the rural folks, the programme projects tocontribute to resolve most of the issues of distribution concerning the selling of their goods thanksto service roads to farms and to a better training of professional associations on the ground, and tothe procurement capacity of the relevant storage centres. Nonetheless, the markets and their presentoutlets can, on the whole, absorb and sell the additional quantities of agro-pastoral products on thetraditional market and the small units of food processing, as well as through the wholesalers in theregion who will be more organised thanks to the programme.

4.7 Environmental Impact

4.7.1 Considering its objectives of essentially protecting and managing sustainably the weaknatural resources of the Governorates of Gabès, of Gafsa and of Kasserine, the programme has beenclassified environmental category n° 2.

4.7.2 Positive Impact of the programme will be numerous and diversified; they are seen from theprogramme design which aims to manage in a sustainable manner, all the natural resources of theGovernorate (water, soil, flora and wildlife). CES works will help to reduce the impact of torrentialrains, collect water for watering crops and replenish underground water and limit the water erosionof the soil, recover farmlands and improve their pedological quality through leaching. Theorganisation of pastoral plantations, their cyclical trail protection , the organisation of stock-breeding in stables, the establishment of fodder planting will to remove the constraint of over-grazing and regenerate the sylvo-pastoral areas and recreate a re-balanced biocenose. Reforestation,the construction of wind-breaks, and the fight against silting will induce an improvement of the bio-

16

diversity and will diversify the shrubs landscape. The extension of hives will have a positive impacton the reproductive cycle (pollination) of crops.

4.7.3 Negative Impact of the programme will generally be accidental and will come directly fromagricultural activities associated with the programme implementation (i) inadequate irrigation anddrainage and the abusive utilisation of fertilisers and pesticides lead to a degradation of the qualityof underground water; (ii) abusive utilisation of underground water for irrigation and beyond theirre-filling capability could lead to the anticipated dryness of reserves and their gradual degradation(risks of salt infusion for some, increasing risks of contamination through drainage water, for theothers); (iii) the extension of herds could constitute a threat to the sylvo-pastoral areas alreadyheavily degraded, accumulation of organic wastes from livestock breeding in stables could causethe pollution of nearby surface well-water; (iv) the extension of the network of earth roads and theimplantation of irrigation network will require some eventual appropriation, but there will be nodisplacement of persons.; (v) the extension of monoculture areas will be a propitious ground for thepropagation of crop parasites (with risks to be assessed) for harvests; (vi) inadequate use ofespartos.

4.7.4 Mitigating Measures are incorporated in the project components; these are strengthening ofpreservation works and management of soil and water; the guidance of farmers and the extensionof irrigation techniques, drainage and the utilisation of agro-chemical products, guidance usingveterinary equipment, protection of pastures and reforestation against water erosion. The lands to beused for community works for irrigation and for opening up are about 100 ha, or less than 1 % ofthe surface area to open up (community lands represent about 93% of the total lands recovered).Eventual compensations and/or re-development of land will be carried out in accordance with thelaws 63-18 of May 1963, 71-9 of February 1971 and 77-17 of March 1977 ; the eventual allowancesto be paid to the farmers will be taken care of by the Tunisian Government from the CRDAbudgets. Nonetheless, there will be no displacement of persons in the various areas of theprogramme.

4.7.5 Environmental Monitoring will be supervised by ANPE and conducted with equipmentand laboratories of CRDA, specialised in the various areas concerned. The monitoring unit has,right from the project takeoff, indicators which will enable it to identify all forms of degradation ascompared to the situation at the beginning of the project takeoff and remedy them. Supervision willfocus on the following areas: (i) the monitoring of the underground water; (ii) the conditions ofdrainage of irrigated areas, (iii) the medical monitoring of the people concerning water-bornediseases; (iv) the monitoring and checking of silting; (v) the ecological monitoring of catchmentbasins, steppes in general and trails (overgrazing); (vi) the monitoring of expropriation andcompensation operations. The budgets required for this monitoring are incorporated in the budgetsof the project components. To carry out this monitoring, CRDA has reference data to be updated assoon as the project takes off, including feasibility study of the underground dam on the ouedTabbredid (risks of pollution of its bed by waste-water from the Gafsa Phosphate Company), and anevaluation of risks of environmental impact on the area of the project from the waste-water from theKasserine Paper Paste Mill. Also included is a training programme for the upgrading andstrengthening of human capacities of the project management units

4.7.6 Gender Issues. The age structure for the population in the project area shows that 2/3 of thefemale population are under 30 years, half of which are illiterates. Their work is the fundamentalbase of the running of the entire sector of the agricultural production. Considering the smallness offarms, the head of the family seeks a salaried job outside and the rural woman plays a moreimportant role of farming including domestic chores. It is estimated that the proportion of womenheading farmlands is about 3 to 5% in the project area. This figure remains low partly because ofthe difficulties encountered by them in owning land and partly due to socio-cultural constraints(limited access to information, to extension techniques and to loan facilities, the status of thewoman in the rural society, etc.). Irrigation could have the advantage of overturning the school-

17

attendance tendency in favour of girls considering the increasing need for labour. Under theprogramme, four areas will be developed to favour the access of women to the project activities: (i)access of the women to micro-credit, (ii) the recruitment of female organising staff; (iii) theparticipation of women in associations; and (iv) the improvement of possibilities of non agriculturalworks.

4.7.7 Poverty Indicators. Figures published by INS show a net regression in agriculture both injob provision and in the revenue of the Tunisian household. According to the national statistics, theagricultural household represents not more than one-third of the rural household and the agriculturalsector does not provide more than 21% of the entire jobs, agaist 44% for the services and 35% forthe industry; 47% of the rural household members are said to be illiterates. The minimum income offarm hands is about DT 1,500/annum (DT 5.6/day), while the minimum required by families inthese areas is about DT 2,000/annum. Based on this, 60% of the family income comes fromagriculture (which involves several members of the family) and 40% from non agriculturalactivities. In the regions of the programme, there is a predominance of small holdings; 30% of themhave less than 5 ha and 12% of the farmers have incomes below the poverty line. The objectives ofthe programme will help to bring the minimum income of these farmers to DT 3,800/annum. Theincome of farms with large surface areas will be multiplied by 3 or 4 with a ceiling of DT50,000/annum. The completion of the project will help to improve the physical conditions offarming and their socio-economic aspect; they will help to improve productions , re-absorb a part ofthe unemployed, and open up some douars..

4.8. Programme Cost

4.8.1. The total cost of the programme is estimated at DT 110.82 million, or UA 63.86 millionnet of tax and duty-free. This cost is spread in DT 57.24 million, or UA 32.98 million in foreigncurrency and DT 53.58 million or UA 30.87 in local currency. Table 4.1 summarises the costs bycomponent and as detailed out in Annex 4.

Table 4.1Summary of Cost Estimates of the Programme by Component

In DT Million In UA MillionComponents F.E L.C. Total F.E L.C. Total

% in F.E

A. Development 39.40 27.77 67.16 22.70 16.00 38.70 58.7%

B. Agro-pastoral Development 2.31 11.52 13.83 1.33 6.64 7.97 16.7%

C. Organisation of the Rural Folks 3.62 3.00 6.61 2.08 1.73 3.81 54.7%

D. Programme Management Unit 5.03 4.05 9.08 2.90 2.33 5.23 55.4%

Total Base Cost 50.36 46.34 96.70 29.02 26.70 55.72 52.1%

Physical Contingencies 2.52 2.19 4.71 1.45 1.26 2.71 53.5%

Provision for Price Increase 4.36 5.05 9.41 2.51 2.91 5.42 46.3%

Total Cost of the Programme 57.24 53.58 110.82 32.98 30.87 63.86 51.6%

4.8.2. The costs have been estimated based on prices existing in June 2000. A 5% physicalcontingency has been applied on all the base costs except for staff costs, services and loan. Aprovision for a 3% price increase has been applied to all the components. The inflation rate inTunisia in the past three years is between 2.8 and 3% per annum.

4.8.3. Table 4.2 below summarises the programme costs by category of expenditure:

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Table 4.2Summary of Cost Estimates of the Programme by Category

In DT Million In UA MillionCategories

F.E L.C. Total F.E L.C. Total

% InF.E

1. CIVIL ENGINEERING WORKS 33.87 26.46 60.33 19.52 15.25 34.76 56.1%2. GOODS 8.04 2.19 10.22 4.63 1.26 5.89 78.6%3. SERVICES OF CONSULTANTS 5.45 2.22 7.67 3.14 1.28 4.42 71.0%

4. CREDIT 2.44 12.76 15.20 1.41 7.35 8.76 16.1%

5. LOCAL STAFF 0.00 2.01 2.01 0.00 1.16 1.16 0.0%

6. RUNNING 0.55 0.68 1.23 0.32 0.39 0.71 44.9%

Total Base Cost 50.36 46.34 96.70 29.02 26.70 55.72 52.1%

Physical Contingencies 2.52 2.19 4.71 1.45 1.26 2.71 53.5%Provision for Price Increase 4.36 5.05 9.41 2.51 2.91 5.42 46.3%TOTAL 54.61 53.58 110.82 31.47 30.87 63.86 49.3%

BREAK DOWN OF COSTS BY AREA OF OPERATION

4.8.4. The programme total cost is spread into UA 18.50 million for Gabès, UA 21.48 millionfor Gafsa and UA 23.88 million Kasserine. Table 4.1 (i) below summarises the costs by zone and bycomponent with details in Annex 4.

Tableau 4.1 (i)Summary of Cost Estimates By Zone and By Component

((In UA million)GABES GAFSA KASSERINE TOTALCOMPONENTS

F.E L.C. Total F.E L.C. Total F.E L.C. Total F.E L.C. Total

A. Development 6.40 4.08 10.49 8.11 5.46 13.57 8.19 6.46 14.65 22.70 16.00 38.70

B. Agro-pastoral Development 0.42 2.64 3.06 0.46 2.14 2.61 0.45 1.86 2.30 1.33 6.64 7.97

C. Organisation of the RuralFolks

1.18 0.37 1.55 0.71 0.50 1.21 0.20 0.86 1.06 2.08 1.73 3.81

D. Programme ManagementUnit

0.57 0.46 1.03 0.81 0.52 1.33 1.51 1.36 2.87 2.90 2.33 5.23

Total Base Cost 8.58 7.54 16.13 10.09 8.63 18.72 10.35 10.53 20.88 29.02 26.70 55.72

Physical Contingencies 0.43 0.36 0.79 0.50 0.42 0.92 0.52 0.48 1.00 1.45 1.26 2.71

Provision for Price Increase 0.74 0.84 1.58 0.88 0.96 1.84 0.89 1.11 2.00 2.51 2.91 5.42

Total Cost of the Programme 9.75 8.75 18.50 11.47 10.01 21.48 11.76 12.12 23.88 32.98 30.87 63.86

4.8.5. Table 4.1 (iI) below summarises the programme costs by zone and by category ofexpenditure.

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Tableau 4.2 (ii)Summary of Cost Estimates By Zone and By Category of Expenditure

(In UA million)GABES GAFSA KASSERINE TOTALCATEGORIES

F.E L.C. Total F.E L.C. Total F.E L.C. Total F.E L.C. Total

1. Civil Engineering Works 6.24 4.15 10.39 7.87 5.39 13.26 5.41 5.70 11.11 19.52 15.25 34.76

2. Goods 0.73 0.18 0.91 0.86 0.21 1.07 3.04 0.87 3.91 4.63 1.26 5.89

3. Services Of Consultants 1.04 0.14 1.17 0.85 0.14 0.99 1.24 1.01 2.25 3.14 1.28 4.42

4. Credit 0.49 2.68 3.17 0.40 2.22 2.63 0.52 2.45 2.96 1.41 7.35 8.76

5. Local Staff 0.00 0.26 0.26 0.00 0.52 0.52 0.00 0.38 0.38 0.00 1.16 1.16

6. Running 0.09 0.14 0.23 0.09 0.14 0.23 0.14 0.12 0.26 0.32 0.39 0.71

Total Base Cost 8.58 7.54 16.13 10.09 8.63 18.72 10.35 10.53 20.88 29.02 26.70 55.72

Physical Contingencies 0.43 0.36 0.79 0.50 0.42 0.92 0.52 0.48 1.00 1.45 1.26 2.71

Provision for Price Increase 0.74 0.84 1.58 0.88 0.96 1.84 0.89 1.11 2.00 2.51 2.91 5.42

Total Cost of theProgramme

9.75 8.75 18.50 11.47 10.01 21.48 10.25 12.12 23.88 31.47 30.87 63.86

4.9. Sources of Finance and Expenditure Schdule

4.9.1. The programme will be jointly financed by the ADB, the Government of Tunisia, theFOSDA, the beneficiaries and BTS / BNA, according to Table 4.3 below:

Table 4.3Sources of Finance

In UA millionSOURCES OF FINANCE F.E L.C. TOTAL

%Total

ADB 31.38 9.93 41.31 64.7%

Government of Tunisia 0.00 12.38 12.38 19.4%

FOSDAP 0.40 2.14 2.54 4.0%

Beneficiaries 0.16 0.86 1.02 1.6%

B N A / B T S 1.04 5.57 6.61 10.4%

TOTAL 32.98 30.87 63.86 100.0%

4.9.2. The ADB will cover 64.7% of the programme total cost or UA 41.31 million. It will finance95.1% of the expenditure in foreign exchange, cause it does not finance the foreign exchange part ofthe equipment procured through the loan granted to the beneficiaries, or 4.9% of the amount inforeign exchange of the programme. The ADB intervention will cover all the activities of theprogramme except those financed on loan, especially the development of agro-pastoral production;its participation will help to finance the entire cost of equipment and consultants’ services. It willalso help to finance a part of the cost of works and running of the programme. The Government’scontribution amounts to UA 12.38 million, or 19.4% of the total cost of the programme. It will helpto finance a part of the expenditure in local currency relating to works, local staff costs and running.The institutions financing the rural sector such as the Banque Nationale Agricole (BNA) and theBanque Tunisienne de Solidarité (BTS) will finance to the tune of UA 6.61 million or 65% of therequirements of the beneficiaries of the programme or 10.4% of the programme cost. The FOSDAwill finance it with UA 2.54 million, or 25% of loan requirements or 4% of the programme costs,and the Beneficiaries for UA 1.02 million, or 10% of the loan granted or 1.6% of the total cost ofthe programme.

4.9.3. The following sections summarise the various tables of costs by sources of finance, as wellas the expenditure schedules by components, by category of expenditure and by source of finance.Each of the programme areas can eventually programme its annual activities.

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Table 4.4Expenditure by Category and by Source of Finance

(In UA Million)

ADBCategories F.E L.C. TOTAL

TunisianGvt

FOSDA Beneficiaries

BTS/BNA

Total

1. CIVIL ENGINEERING WORKS 22.25 8.68 30.93 9.00 39.93

2. GOODS 5.22 0.25 5.47 1.19 6.67

3. SERVICES OF CONSULTANTS 3.54 1.00 4.54 0.44 4.98

4. CREDIT 2.54 1.02 6.61 10.175. LOCAL STAFF 1.28 1.286. RUNNING 0.37 0.37 0.46 0.83

TOTAL 31.38 9.93 41.31 12.38 2.54 1.02 6.61 63.86

4.9.4. Expenditure relating to the various components of the programme will be made according tothe schedule indicated in Table 4.5 below:

Table 4.5Expenditure Schedule by Component

(In UA million)Components 2001 2002 2003 2004 2005 Total

A. Development 1.40 10.67 12.81 10.66 8.88 44.41B. Agro-pastoral Development 0.23 1.71 2.39 2.60 2.32 9.27C. Organisation of the Rural Folks 0.77 0.87 0.94 0.85 0.91 4.34D. Programme Management Unit 1.42 1.43 1.01 1.03 0.95 5.84

Coût total 3.82 14.69 17.15 15.14 13.06 63.86

4.9.5. Expenditure relating to the various categories will be made according to the scheduleindicated in Table 4.6 below:

Table 4.6Expenditure Schedule by Category

(In UA million)Categories 2001 2002 2003 2004 2005 Total

1. CIVIL ENGINEERING WORKS 1.02 8.47 10.26 8.23 6.77 34.76

2. GOODS 1.06 1.50 1.23 1.21 0.89 5.89

3. SERVICES OF CONSULTANTS 0.72 1.23 0.87 0.81 0.78 4.42

4. CREDIT 0.36 1.68 2.32 2.34 2.06 8.76

5. LOCAL STAFF 0.23 0.23 0.23 0.23 0.23 1.16

6. RUNNING 0.16 0.16 0.16 0.13 0.13 0.73

Total 3.55 13.27 15.08 12.95 10.87 55.72

None Allocated 0.26 1.42 2.07 2.19 2.19 8.14

Total 3.82 14.69 17.15 15.14 13.06 63.86

4.9.6. Expenditure to be made by the ADB, the Government of Tunisia, the FOSDA, theBeneficiaries and BNA and BTS Banks, shall be in accordance with the Table 4.7 below on thebasis of the implementation schedule:

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Table 4.7Expenditure Schedule by Source of Finance

(In UA million)Source of Finance 2001 2002 2003 2004 2005 Total

ADB 2.67 10.27 11.30 9.21 7.85 41.31

Government of Tunisia 0.76 2.55 3.19 3.17 2.70 12.38

FOSDAP 0.10 0.47 0.66 0.69 0.63 2.54

Beneficiaries 0.04 0.19 0.27 0.28 0.25 1.02

B T S / B N A 0.25 1.21 1.73 1.79 1.63 6.61

TOTAL 3.82 14.69 17.15 15.14 13.06 63.86

BREAKDOWN OF SOURCES OF FINANCING BY LENDING AREA

Table 4.3 (i)Source of Financing of Programme

(In UA Million)GABES GAFSA KASSERINE TOTALFINANCING

F.E. L.C. Total F.E. L.C. Total F.E. L.C. Total F.E. L.C. Total

%Total

ADB 9.19 2.97 12.16 11.02 3.86 14.87 11.17 3.10 14.28 31.38 9.93 41.31 64.7%GOVERNMENT 0.00 2.65 2.65 0.00 3.55 3.55 0.00 6.18 6.18 0.00 12.38 12.38 19.4%FOSDAP 0.14 0.78 0.92 0.11 0.65 0.76 0.15 0.71 0.86 0.40 2.14 2.54 4.0%BENEFICIARIES 0.06 0.31 0.37 0.05 0.26 0.31 0.06 0.28 0.34 0.16 0.86 1.02 1.6%BTS/BNA 0.36 2.03 2.40 0.30 1.69 1.99 0.38 1.84 2.22 1.04 5.57 6.61 10.4%

TOTAL 9.75 8.75 18.50 11.47 10.01 21.48 11.76 12.12 23.88 32.98 30.87 63.86 100.0%

5. PROGRAMME IMPLEMENTATION

5.1. Executing Agency

5.1.1. The CRDA will be the executing agency of the project. A CRDA exists in eachadministrative province with representatives from all the directorates of the Ministry of Agriculture.There is also at the same level a local representation of the different technical ministries (Ministryof Community facilities, Ministry of Environment and Territorial Administration, Ministry ofEconomic Development, etc.) The CRDA enjoy financial and managerial autonomy under thesupervisory Ministry of Agriculture.

5.1.2. Given the workload of the CRDA in connection with the programme of activitiesfunded from the Tunisian state budget, and for reasons of administrative efficiency andtransparency, a Project Management Unit (PMU) will be established in each of the CRDA’s inGabes in Gabes, Gafsa and Kasserine. The position of the PMU is justified also by the existingprojects financed by bilateral and multilateral funds. This means that the different CRDA divisionalchiefs cannot devote their entire working time to managing CRDA over and above their annualactivity programmes. Consequently, and in agreement with the Tunisian authorities, the PMUs willbe headed by officers seconded or specially recruited locally on contract and fully assigned to themanagement of the programme. Such staff, whose expenses will be borne by the State budget, willbe appointed in compliance with Tunisian Government’s procedures. The establishment of thePMUs within the CRDA and the submission of the curriculum vitae of the PMU Manager to ADBfor approval prior to appointment will be part of the lending conditions.

The management of each PMU will necessitate human, material and financial resources inorder to fulfil its mission which includes: programming of activities; administering and monitoringcontracts, control of works, and gauging the impact and performance recorded during theprogramme. The PMU will have the following specific tasks:

(i) preparation of the programme of action and the programme budget;

22

(ii) co-ordination, control and monitoring of the entire programme activities;(iii) preparation of bid documents and loan disbursement applications for presentation to

ADB;(iv) preparation of financial statements, monthly programme implementation reports;

(v) preparation of the terms of reference of studies and consultancy as well asobservance of proper implementation of the terms of contracts governing theprocurement of equipment and materials financed by the programme.

5.1.4 As for the financing of activities supported by the beneficiaries, the PMU is required toassist in the preparation of technical documents for loan applications of the operators to enable themto benefit from FOSDA and the funds granted by BTS and/or BNA.

5.1.5 Each PMU will be headed by a Manager who will have directly under him five (5) expertsof the rank of section head. Each of these experts will be responsible for one of the following areas:

(i) Community Development and Micro-enterprises;(ii) Major Works;(iii) Reclamation;(iv) Programming and Monitoring and Appraisal; and(v) Administration.

The PMU will be assisted by the division and arrondissements of the CRDA in theirrespective areas in order to enhance the implementation of the activities of the programme. ThePMU's organisational chart is provided in annex 2.

5.1.6 To ensure an optimal management of the PMU, each of these experts will be responsible forthe co-ordination and monitoring of the activities of the programme corresponding to one ofspecific fields, notably:

(i) The sociologist/specialist engineer will take charge of sensitisation outreachactivities and support of specific women friendly actions as well community andentrepreneurial development will be responsible for sensitisation/animationactivities, effective participation of the beneficiaries and support of micro-enterprisesthrough identification, preparation of documents and training;

(ii) The specialist engineer in rural development will have three principal duties, waterand soil conservation and anti-sand encroachment campaign, rural infrastructures,command area;

(iii) The agro-economist will be responsible for programme follow-up/appraisal actionsand he will exercise supervision for research-development and agriculturalreclamation;

(iv) The agronomist will monitor agro-pastoral reclamation and prepare the technicalappraisal data of the impact evaluation of the project in collaboration with the CTV(Territorial and Extension service Unit) chiefs; and

(v) The administrator of the programme will bear the administrative expenses and themanagement of the financial accounting and logistic resources.

5.1.7 At the Government level, a co-ordination committee will be set up as a platform for dialogueand consultation between the different partners of the programme. It will be responsible for the

23

approval of the work and budget programme as well as control. Its duties will also includemonitoring the application of the recommendations of supervision missions and settling eventualconflicts that may arise during the implementation of the programme. This committee, under thechairmanship of the Governor, will comprise: (i)Regional Commissioner and representatives ofCRDA divisions (CES, rural engineering, water resources, plant and animal production, water andforests); (ii) the Ministry of Economic Development, the Ministry of Environment and TerritorialAdministration and the Ministry of Community facilities; (iii) research institutes and offices (OEP,SONEDE) involved in the activities of the programme; (iv) BTS, BNA and FOSDA for aspectsrelated to rural credit; (v) Professional organisations of each of the programme areas (AIC, Co-operatives, etc.) concerning the participation of programme beneficiaries of the strategic choices.The PMU Manager will take part in this committee, which will meet two times per year as secretaryand will be responsible for the implementation of the decisions.

5.2. Institutional Arrangements

5.2.1. Infrastructure and Hydro-Agricultural Development Prior to the completion of activities,performance evaluation will be entrusted to consultancy firms. The programmes will invitespecialised local enterprises to carry out the construction of infrastructures and agriculturaldevelopment. However, some maintenance works will be undertaken by either force account ofGIC (interested groupings) of the beneficiaries, and that on the basis of the institutional capacityacquired by those groupings. The activities to consolidate achievements such as cactus or acacia atthe banquette level, manage community materials for water and soil resources, will be carried outby the user association and the beneficiaries trained to this end (Association of interested groupings,AIC for irrigation and AIC for drinkable water supply, GFIC (Forestry interest groupings, and thewater and soil conversation groupings (GCES) and CGs (Land Management Co-operatives).

5.2.2 Research - Development The programme will depend on the Institute des regions arides deMedenine (IRA - Institute for the Arid Regions of Medenine), the Institute of Sfax Olive andthe OEP for carrying our development-research on a contractual basis. (See Paragraph4.5.11).

5.2.3 Training community development and extension services: The Actions under thiscomponent are related to the field workers (male and female) to be recruited under thisproject, the beneficiaries chosen from the most outstanding to serve as trainers, and younggraduates with agro-pastoral training certificate to be able to benefit from BTS financialsupport. Therefore, each PMU will conclude an agreement with the followingorganisations:

(i) AVFA (Agence de vulgarisation et de formation agricole) for training and fieldextension activities for field workers, selected beneficiaries and youths;

(ii) Office National de Artisanat (ONA) for training youths and women in arts and craftswork. Moreover, each project will recruit male and female field workers withresponsibility to target groups training and the institutional capacity strengthening ofsocio-professional associations, especially CAS (Cooperatives agricoles de services)and the Inter-professional Groupings (GI) (cf. Paragraphs 4.5.13 and 4.5.14).

5.2.4 Loan: loans granted in response to the beneficiary's application brings in the following:

(i) CRDA/PMU for technical certification of documentation;(ii) FOSD for the grant of subsidies in line with Government regulations(iii) The financing institutions (ENA or BTS) for the certification of applications insofar

as the financial viability of the sub-project in question is concerned.

24

5.2.5 These different bodies will intervene, each as appropriate in the management and partialmaintenance of the installations and infrastructures and natural resources of the programme. Thedraft convention of the agreements to be signed between PMU and the different institutionsmentioned above will be transmitted beforehand to the Bank for approval.

5.3 Implementation and supervision Timetable

5.3.1 The implementation of programme activities is spread over a five-year period. This periodis necessary for the preparatory phase of the programme and the completion of all the components.In fact, the first year will be devoted to: (i)the setting up of the PMUs (staff recruitment, preparationof budget and the annual working programme; (ii) basic studies, diagnostic and reference study,implementation study; (iii) training of programme operators, notably the beneficiaries.

The actual implementations will only commence at the end of the first year. The detailedimplementation timetable for the programme is given in annex.3.

The implementation schedule of the major activities is set out below:

Table 5.1

Summary of the Implementation of Gabes; Gafas and KasserineACTIVITIES Take of Date Completion Date Comments

COMMON ACTIVITIES FOR PROGRAMME COMMENCEMENT

1. Approval of Board of Directors November 2000 ADB2. Establishment of PMU February 2001 March 2001 Min. of Agriculture3. Staff training March 2001 October 2001 CRDA4. Diagnostic basic study August 2001 December 2001 Consultant5. Information October 2001 October 2003 Coord. Committee6. Extension Service/Sensitisation December 2001 October 2004 PMU7. Org. of rural life January 2002 June 2005 PMU

SPECIFIC PROJECTS OF GABES-GAFSA

8. Conservation CES October 2001 December 2005 Enterprises/PMU9. Infrastructures May 2002 December 2005 Enterprises10. Hydro-geological works + studies August 2001 September 2004 Enterprises/PMU11. New public irrigated areas January 2002 December 2005 Enterprises12. Wells June 2002 July 2005 Enterprises/PMU13. Pastoral Hydraulic March 2002 December 2005 Enterprises/PMU14. Replacement of equipment September 2002 March 2004 Enterprises

SPECIFIC PROJECTS OF KASSERINE

15. Establishment of area September 2001 June 2005 Enterprises/PMU16. Individual areas/wells, drilling, equipment September 2001 October 2005 Enterprises/PMU17. Rehabilitation of irrigated public area September 2001 October 2005 Enterprises/PMU18. Development of alfalfa and Pastoral October 2001 December 2005 Enterprises/PMU

5.4 Rules for the procurement of goods and services

5.4.1 The rules for the procurement of goods, works and services under the programmes aresummarised in tables 5.2, 5.3 and 5.4 below. Every procurement financed by the ADB will be donein compliance with the rules and procedures of the Bank for the procurement of goods, services andworks or, as the case may be, in accordance with the rules of procedure of the Bank for the use ofconsultants, on the basis of the appropriate ADB bid documents.

25

Table 5.2INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT IN GABES

Rules for the procurement of goods, services and works(In UA million)

CATEGORIES ICB LCB OTHERSRestricted

ListOther non-ADB finan.

*

TOTAL

1. WORKS. Infrastructure 11.92 (9.91) 11.92 (9.91)2. GOODS. Equip. & Material 0.92 (0.77) 0.92 (0.77). Vehicles 0.09 (0.09) 0.09 (0.09)3. SERVICES- Tech. Asst. & Consultants 0.67 (0.67) 0.02 0.69 (0.67)- Research 0.17 (0.17) 0.17 (0.17)- Training 0.36 (0.33) 0.36 (0.33)- Studies 0.12 (0.12) 0.12 (0.12)

4. LOANS 3.69 (0) 0.00 3.69 (0.00)5. LOCAL STAFF 0.29 0.29 (0.00)6. OPERATIONAL COSTS 0.10 (0.10) 0.15 0.25 (0.10)

Total 0.00 12.93 (10.77) 3.79 (0.10) 1.32 (1.29) 0.46 18.50

* Financing provided by the Tunisian Government, using its own rules of procedure

( ) Represents ADB financing

Table 5.3INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT IN GAFSA


CATEGORIES ICB LCB OTHERSRestricted

ListOther

non- ADBfinance.*

TOTAL

1. WORKS- Infrastructure 15.25 (12.59) 15.25 (12.59)

2. GOODS- Equip. & Material 0.98 (0.86) 0.98 (0.86)- Vehicles 0.21 (0.21) 0.21 (0.21)

3. SERVICES

- Tech. Asst. & Consultants. 0.43 (0.43) 0.43 (0.43)- Research 0.21 (0.21) 0.21 (0.21)- Training 0.31 (0.31) 0.02 0.33 (0.31)- Studies 0.15 (0.15) 0.15 (0.15)

4. LOANS 3.05(0) 3.05 (0)5. LOCAL STAFF 0.58 0.58 (0)6. OPERATIONAL COSTS 0.11 (0.11) 0.17 0.28 (0.11)

Total 0.00 16.44 (13.66) 3.16 (0.11) 1.10 (1.10) 0.77 21.48 (14.87)

* Financing provided by the Tunisian Government, using its own rules of procedure


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Table 5.4INTEGRATED AGRICULTURAL DEVELOPMENT PROJECT IN KASSERINE


CATEGORIES ICB LCB OTHERS RestrictedList

Other non-ADB

financing*

TOTAL

1. WORKS- Infrastructure 12.75 (8.43) 12.75 (8.43)

2. GOODS- Equipment and Materials 4.21 (3.28) 4.21 (3.28)- Vehicles 0.26 (0.26) 0.26 (0.26)

3. CONSULTANCY- Technical Assistance 1.52 (1.52) 1.52 (1.52)- Training 0.91 (0.53) 0.91 (0.53)- Studies 0.10 (0.10) (0.10) 0.10

4. LOANS 3.42 (0) 3.42 (0.00)5. LOCAL STAFF 0.41 0.41 (0.00)6. OPERATING COSTS 0.16 (0.16) 0.14 0.29 (0.16)

TOTAL 0.00 17.22 (11.97) 3.58 (0.16) 2.53 (2.15) 0.55 23.88 (14.28)

* Financing provided by the Tunisian Government. using its own rules of procedure


5.4.2 Each of the PMUs at Gabes, Gafsa and Kasserine, under their respective supervisory CRDA,will be responsible for the award of contracts for goods and services except goods for which loan isprovided. The resources, the capacity, the expertise and experience of CRDA are adequate to carryout the procurement of the following:

(i) recruitment of consultants, consultancy firms and/or institutions dealing withperformance studies, monitoring of mid-term appraisal, extension, outreach andsensitisation effort, and the restructuring of producer organisations and training willbe carried out by restricted bidding;

(ii) the procurement of civil engineering works will be made according to nationalbidding procedures. The scope of the works, their spread and the capacity ofnational engineering enterprises militate in favour of this choice. Moreover, thereare sufficiently many enterprises in Tunisia to guarantee competition. Beside, theworks are not located in easily accessible places:

the bid packages to be awarded are within the range of 20,000 to 30,000Tunisian Dinar for the dry stones, the joussours, tabias and the manualbanquettes;

the mechanical banquettes and the refilling works and spreading of manure willattract contracts ranging between TD 50.000 and 200.000;

(iii) contracts for the procurement of vehicles, equipment, furniture and other diversematerials and supplies will be subject to consultation with local suppliers.Competitive prices are assured by the existence of a sufficient number of localsuppliers and representatives of foreign

5.4.3 To facilitate and step up the procedure for bid awards, the threshold for the preliminarystudy of bid documents for the supplies, the works and studies have been defined and arerespectively UA 20,000, UA 50,000 and UA 40,000. The ADB type of bid documents willbe used.

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5.5. Disbursement Rules

5.5.1 Each of PMU will open a bank account in the name of the project with a commercial bank.This account, meant to receive only the resources of the project, will be managed separately fromthe Tunisian Budget's contribution. The opening of this account is another condition of the loan. Itwill be accessible at all times to the Bank for checking movements, especially during projectsupervision and audit missions.

5.5.2 DISBURSEMENT. Out of concern to enhance programme implementation and in order toadhere to the implementation time frame, a special renewable account will be opened at each PMU.The replenishment of funds will be based on an application submitted for the Bank's prior approval,accompanied by justification of at least 50% of the disbursed amount. In fact, the completion of theprogramme will necessitate payments in local currency and essential works such as alterationswhich will be carried out mainly by small-scale enterprises. The latter could ill afford longdisbursement delays. A special account will be opened on the basis of an annual or semi-annualprogramme. Besides, an estimated UA 50,000 franchise will be accorded to the PMUs.

5.6 Monitoring - Evalutation

5.6.1 MONITORING. Considering the nature of the operations of the programme, the number ofactivities proposed and the chosen approach, which favours dialogue with the operators, two typesof monitoring will be in force:

(i) A monitoring system at the PMU level, established by a consultant following adiagnostic study, and capable of presenting at any moment, the status of theimplementation, of gauging the effectiveness of the actions taken, and ofdetermining the shortcomings in implementation on the basis of indicators identifiedbefore the commencement of works. The method for collecting data will be spelt outalong with the presentation of the results.

(ii) An external monitoring-appraisal system provided by DGFE which caters for all theprogrammes and agricultural and rural development projects in Tunisia. Thismonitoring is related to the management of resources and carrying out activities andtheir impacts on the beneficiaries.

5.6.2 APPRAISAL. It is aimed at measuring the effects and the impact of the programme.Regular appraisal of activities will be provided by the agro-economist responsible for monitoringand appraisal with the support of a consultant during short missions. Two in-depth appraisals willbe carried out under the responsibility of the PMU:

(a) a mid-term appraisal to be undertaken in year 3 of the programme with thecollaboration of a consultancy firm; and

(b) a final appraisal scheduled for the end of year 5. The conclusions andrecommendations of the mid-term review will be submitted for ADB approval aftercertification by two respective workshops for those involved in the programme. Thecost of the programme includes the financing of the consultancy firms for the twoappraisals.

5.7 Financial Reports and Audit Reports

5.7 .1 The PMU will keep a suitable general accounting record and an analyticalaccounting record for the programme and will also organise a budget monitoring system. Theprogramme management unit will keep a separate accounting record for the operations financed by

28

ADB. The accounting system should comply with the requirements of the Bank and generallyadmitted accounting principles. (cf. Section 12.04b of the general conditions of loans).

5.7.2 The project accounts will be subject to the usual public administration controls. Moreover,the different accounts mentioned above and those of the projects will be checked annually byauditors acceptable to the Bank. The projects have made the necessary provisions to cover theaudit expenses from the ADB loans. The financial statements and the budget estimate will besubmitted for approval to the Co-ordination Committee mentioned in paragraph 5.1.7. The auditreports and the financial statements will be transmitted to ADB within six months following theend of each financial period.

5.8 Co-ordination with Other Donors

5.8.1 Several lending agencies are operating in this sector, notably in the Gabes and KasserineDistricts. These operations deal with the Forestry Project presently at the takeoff stage, financedby Japan; the construction of hill-top lakes from European Union financing; the supply of forestryequipment against forest fire by the Islamic Development Bank; the project for the management ofnatural resources and the Investment Programme for the water sector by the World Bank. Thewind protector (windbreak) initially envisaged for this project will be integrated with the Tunisian-Japanese project. Further, the European Union will finance the hill-top lakes previously providedfor in this project. In this connection, the Project Management Units (PMU) will co-ordinate theprogramming activities of these works with the other lending agencies through the Co-ordinationCommittee set up at each District level.

6. PROGRAMME SUSTAINABILITY AND RISKS

6.1 Recurrent Costs

6.1.1 The recurrent expenses involve principally costs for ensuring the normal functioning of theprogramme, such as the salaries of officers and contractual staff, the functioning and maintenanceof vehicles and the other costs relating to the functioning of the PMU. These expenses willdisappear on completion of the programme. During implementation programme, the operatingexpenses will be absorbed by the Tunisian Government budget in respect of local currency costssuch as the remuneration of local contract staff, and certain operational expenses and officemaintenance, that is UA 0. 44. The Bank will be responsible for foreign exchange expenses relatingto vehicle maintenance, computer materials, and community development and extension servicesamounting to UA. 0.10 million.

PDAI FOR GABES, GAFSA AND KASSERINE

6.1.2 As for the costs of maintenance of works and the spreading of manure, it is necessary todistinguish the infrastructures established on lands belonging to the beneficiaries from those put upon the oueds. It is thought that damages after digging occur every four (4) years, and representabout 12% of the cost of these infrastructures. The CRDS lending covers the works and the tabias.With regard to the joussours, the expenses are apportioned at the rate of 25% to CRDA and 75% tothe beneficiaries. The PPI expenses include the forestry materials, the wells and the piezemeters.These materials will be renewed every five years. Three per cent (3%) of the irrigation pipes andsupport are to be replaced each year. The CRDA budgets can absorb the annual recurrent expensesestimated from the 6th year at TD 291,000 at Gabes, 324,000 at Gafsa and 275,000 at Kasserine.The maintenance of the tracks is covered from the national budget by the community facilities.Table 6.1 below provides details of the recurrent expenses by project

Table 6.1

29

Summary of recurrent expenses by project

ACTIVITIES GABES (DT) GAFSA (DT) KASSERINE(DT)

Works and banquettes 150,000 180,000 125,000Tabias 30,000 33,000Joussours 15,000 15,000Forestry, Wells andpiezometer

33,000 33,000 55,000

Irrigation Support 63,000 63,000 100,000Tracks Ministry of

EngineeringTOTAL 291,000

6.2 Sustainability of the programme

6.2.1 The sustainability of the executed works is guaranteed by the conception chosen, which is incurrent use in Tunisia, whether in conception by consultancy firms or in works carried out bybuilding contractors. However, in the event of prolonged drought, these works should be closelychecked for cracks to be repaired against water leakage. Similarly, in the event of floods, works onthe oueds should be redone. This task falls easily in line with the normal activities of the CRDAsand involves no long-term risk to the programme.

6.2.2 The manual maintenance of the embankments on the ground and the biologicalreinforcement of the works are to be financed by the beneficiaries by providing funds in form ofloans as well as through a considerable margin they have from their portion of the investment. Thatis made possible by the sensitisation efforts and promotion of professional organisations as well asthe legal framework provided by the state to make more autonomous and responsible themanagement and maintenance of the gains of the programme. As for Kasserine, the sustainabilityof the infrastructures will be assured by the assimilation of irrigation techniques by thebeneficiaries, particularly extension services, field visits, etc.

6.2.3 Apart from these aspects bearing on the nature of the works, it is worth noting that theincreased revenue of the beneficiaries at full production of the projects will enable them participateactively and freely in the recurrent expenses devolving on them, mainly from their portion of theland, on the one hand, and membership of interest groupings, when the latter will be manageriallycapable of replacing the CRDAs.

6.2.4 The development of organisational and institutional capacities through a progressive transferof technical skills and the strengthening of professional grouping's potentials to negotiate and workcollectively to defend shared interests thereby getting involved in the day-to-day practices wherethe operators are committed to resolving problems themselves. These groupings now have the legaltexts that enable them to undertake profit oriented actions and, to invest beyond their operationalactivities.

6.3. Major Risks and relief measures

6.3.1 Some risks may impair the smooth takeoff and the success of the programme. Onecan cite: a) inadequate training of organisers which many entail implementation delays and adeparture from the programmed line of action; b) lack of commitment by communities toparticipate actively in the development process underway. It would be prudent at the

30

commencement of the programme to target the most motivated communities willing to collaboratewith the programme in order to reduce the risks; c) climate hazards especially frequent droughtwith adverse effects on production and hydro-agricultural development. The procurement ofunderground tanks to store water for irrigation in the programme areas can help to remedy hydrousshortfalls at the operational levels; d) insufficient co-ordination and co-operation between PMUand the different institutions dealing with rural life support and rural lending. The organisation ofconsultative meetings and periodic workshops should contribute to minimising this risk. CRDA'ssupport will be determinant for enhancing the environment and team spirit.

6.3.2 RELIEF MEASURES. The programme provides for a sizeable element of training forboth users and field technicians on CRDA services. It recognises in its approach, the possibilitythat in some so-called priority areas, a public utility approach can be put n place by CRDA; but thisshould be done in perfect harmony with joint development plans decided upon by the CESgroupings.

Table 6.1Summary of recurrent expenses by project

ACTIVITIES GABES (DT) GAFSA (DT) KASSERINE(DT)

Works and banquettes 150,000 180,000 125,000Tabias 30,000 33,000Joussours 15,000 15,000Forestry, Wells andpiezometer

33,000 33,000 55,000

Irrigation Support 63,000 63,000 100,000Tracks Ministry of

EngineeringTOTAL 291,000

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7. PROGRAMME BENEFITS

7.1. Financial Analysis

7.1.1. Pending the final location of the programme’s agro-pastoral activities which will be definedduring consultations with the local organisations, the programme has established four model typesof operation based on reclaimed grouping tree-plantations and cereals, cereals associated withfodder in areas spread with manure and tree-plantations associated with market-gardening onirrigated lands, as well as pastoral productions. Tables 7.1 and 7.2 below provide the net incomes bytype of operations with or without project. About 1,750 farms at Gabès, 1,380 at Gafsa and 800 atKasserine, or 22%, 13% and 6,4% respectively of rural households presently in the programmeareas will benefit from the programme in full production.

7.1.2. The gross incomes of the various models of farming were determined on the basis of anincreased production as a result of the following production trends: (i) introduction of selectedseeds; (ii) adoption of new planting methods; (iii) availability of water; and (iv) the improvement ofthe quality of soil. The net incomes were fixed after deductions (from gross incomes) of farmingcosts relating to purchased inputs (seeds, fertilisers, veterinary products, etc.), labour, water andlending charges.

Table 7.1Net incomes by Type of Farms in TD at Gabès and Gafsa

Net Incomes After ChargesFarm Types Number ofFarms

Withoutproject

With project

%of income

growth

- 5 ha in dry including trails 1.210 2.380 11.300 475%- 8 ha in new plantations +PPI+ trails 1.450 8.300 15.900 190%- 15 ha in new plantations+PPI+stockbreeding

380 9.000 28.100 310%

- 58 ha livestock Cattle + Sheep + Goats 90 10.500 48.200 450%

Tableau 7.3Net incomes by Type of Farms in TD at Kasserine

Net Incomes After ChargesFarm Types Number ofFarms

Withoutproject

With project

%of income

growth

- 1.5 ha in dry including trails 100 900 3.750 416%- 1.25 ha CES/PPI/ Cattle / Sheep 200 1.300 3.700 284%- 7.5 ha CES/PPI/ Cattle / Sheep 350 8.050 34.900 433%- 37 ha CES and trails 150 12.100 59.200 489%

7.1.3. The above results clearly show that the beneficiaries are able to repay the loans they hadobtained, and have been able to also participate maintaining developed infrastructure.

7.1.4. The operating costs and net incomes for each farm type show the ability of the farmers tomeet operating costs relating to the introduction of new farming techniques and to take part infinancing the maintenance of infrastructure, as well as in lending charges.

7.2. Economic Analysis of the Programme

7.2.1. Investment Costs. The programme investment costs include direct and indirect costs. Thecosts directly related to the programme concern essentially activities involving the promotion ofrural organisations, the development of private and hydro-agriculture CES, and the enhancement ofagro-pastoral development. The indirect investment costs are those relating to basic infrastructure

32

such as rural earth-roads, potable water, CES works in the community areas, and the fight againstsilting. The overall indirect investment costs were taken into consideration in calculating the rate ofeconomic return of the programme because it concerns earth-roads and physical developmentlinking new farmlands generated by the programme.

7.2.2. With regard to the programme investments, all activities have been taken into account incalculating the rate of economic returns at the economic rate (excluding the provisions for pricehike). The costs have been valued without custom duties. The cost of labour has been maintained atmarket rate. The benefits have been drawn from additional productions from tree-planting CES andirrigation), cereals and fodder in the CES areas and manure spreading, gardening and fodder in theirrigated areas and activities on the trails and the herds. The economic prices have been used tovalue these productions. The present value of the areas to be developed under the programme (tree-planting, irrigated and on-manure cropping) has been estimated on the basis of current productivityof 60%of new lands and trails.

7.2.3. The directly quantifiable beneficiaries of the programme are the value added in relation tothe increase in plant and animal production, on the farms under the programme. Thus, they havebeen calculated based on the additional productions from tree-planting (CES and irrigation), cerealsand fodder in the CES areas and manure spreading, gardening and fodder in irrigated areas andactivities on the trails and the herds.

7.2.4. While maintaining this assumption, the rate of economic returns over a period of 25 years,as detailed out in Annex 5, is as follows for the entire programme for the three projects:

Programme Areas ERR

Programme for Gabès, Gafsa and Kasserine 20.62%

PDAI at Gabès 18.57%PDAI at Gafsa 21.57%PDAI at Kasserine 25.44%

7.3. Social Impact Analysis of the Programme

7.3.1. The implementation of the programme will help to increase the surface area for agricultureand pastoral activities as well as improved sector activities in the programme area. The agricultureand livestock activities established under the programme will help to secure, if possible, increasethe income of farmers. Activities relating to micro-enterprises will bring about an increase in non-agriculture income. The increase in the consumption of own farm-products both of plant and animalorigin will also be beneficial at nutritional level in the programme area.

7.3.2. The completion of CES works; rural infrastructure and sylvo-pastoral activities throughlocal enterprises will have a positive impact on employment of youths during the implementationperiod. Thus, the programme will contribute to the reduction of prevailing unemployment,especially amongst the youth in the Governorates. The construction of a network of rural earthroads will help to open up certain communities in the programme area. The agricultural activitieswill help to create permanent and seasonal employment for the youth and the women. The projectwill train 200 women in artisan and small stockbreeding occupations. Their training will enablethem have access to loans for them to carry out their own activities.

7.3.3. The organising and training activities envisaged for the women will enhance their self-development activities and their economic activities such as weaving and small-scale livestockbreeding in full expansion in the region.

7.3.4. Through the complementary development activities (micro-enterprises, weaving, minoroccupations, services, etc.), the programme will enable the rural families to rise their non-

33

agriculture incomes. There is provision for the creation of 50 enterprises for the youth in each of theproject areas, or 150 micro-enterprises employing an average of 3 to 5 people, corresponding to 450to 750 permanent jobs. The achievements of the programme will help to improve the physicalconditions of farms and their socio-economic aspect; guidance, lines of credit, irrigation,availability of inputs will help to improve farm productivity. The socio-economic advantages willbe: creation of new jobs and reduction in unemployment, increase and diversification ofproductions, guarantee of some food security and improvement of farmer’s income. Extension andmaintenance of rural earth-roads will help to open up the douards and a better access to commercialcentres, education and health and free rooting of agricultural products.

7.4. Sensitivity Analysis

7.4.1. Two assumptions have been retained amongst the risks associated with the implementationand management of the programme by the beneficiaries:

(i) The first is the prolonged drought over a period exceeding three years; this willundermine production and entail a reduction in the revenue of beneficiariesdespite the completed hydraulic projects. The percentage of reduced income overan average annual period is about 10% ;

(ii) The second assumes that the training and support activities in favour of the ruralfolks have not achieved the expected results, and that the production costs rosedue to non compliance with the planting methods, that is 10% increase in costs.

7.4.2. Based on these, the results of the sensitivity tests on the rate of economic return, asdetermined in section 7.2 are presented as follows:

Tests Basic ERR Assumption 1 Assumption 2

Programme for Gabès, Gafsa and Kasserine 20.62% 13.31% 13.68%

PDAI at Gabès 18.57% 12.11% 12.45%PDAI at Gafsa 21.57% 14.40% 14.75%PDAI at Kasserine 25.44% 14.75% 18.89%

7.4.3. These tests show that the results of the projects translated into « cash-flow » are sensitive toincome and production cost variations. Consequently, to maintain the incomes at an adequately highlevel, significant efforts should be made to stabilise output through an adequate mobilisation ofwater while complying with the planting methods emanating from the result of research-development. Furthermore, support actions to the rural folks which have been undertaken underthis programme should be consolidated and strengthened in order to guarantee continuous supply ofinputs. Thus, this will forestall a dis-functioning which will have a negative impact on the farmer’sincomes, therefore on the project cash flow (See Paragraph 4.6.4).

8. CONCLUSIONS AND RECOMMENDATIONS

8.1. Conclusions

8.1.1. The Integrated Agriculture Development Projects (PDAI) will be implemented in theGovernorates of Gabès, Gafsa and Kasserine. They fall under the programme of the TunisianGovernment in matters of management of natural resources and rural agriculture development.These projects form part of the mobilisation programme of nearly 90% of the County’s waterresources envisaged for the first years of the decade 2000, and is accompanied by a policy of

34

enhancing the refilling capacity of the underground water table, the storing and transferring of watertowards the areas in need. These areas suffer from difficult natural physical conditions and are facedwith a series of technical constraints: water resources are often inadequate, excessive salinity,pumping is often done from extremely deep wells, hence the need to intensify the measures foreconomy of water. This programme also falls within the Government’s policy which aims at alarger involvement of beneficiaries and users of natural resources in all spheres of development anddecentralisation during the implementation of development policies.

8.1.2. Consequently, the objective of these projects is partly to reduce the level of poverty andpartly to contribute to the reduction of regional gaps. These programmes will contribute to theincrease in production and in revenue, the creation of new jobs and the improvement of the livingconditions of the people, to the strengthening of food security and to poverty reduction. With regardto environment, they will have positive impact on the water and soil resources, on the steppevegetation for grazing, whose weakness is as a result of climate and low rain, wind and watererosion as well as inappropriate agriculture and pastoral practices. The rational development ofcatchment basins, as priority, will help to mobilise the weak rain-water resources in the area forirrigation and refill the underground water, protect the soil and recover new areas for farming.

8.2. Recommendations and Conditions for Loan Approval

8.2.1. This programme is technically achievable and viable economically and financially. Theeconomic rate of return is about 20.62% (and is broken down into 18.51%, 21.57% and 25.44%respectively for the projects in Gabès, Gafsa and Kasserine).

8.2.2. In the light of the foregoing, it is recommended to grant to the Republic of Tunisia, threeADB loans for the financing of projects not exceeding:

(i) UA12.16 million for the PDAI in Gabès ;

(ii) UA 14.87 million for the PDAI in Gafsa ;

(iii) UA 14.28 million for the PDAI in Kasserine.

8.2.3. The granting of these loans will be subject to the following conditions:

C) Conditions Precedent to Loan Effectiveness:

The effectiveness of each of the loans will be subject to the fulfilment by theBorrower, of the conditions as provided in Section 5.01 of the general conditions.

D) Conditions Precedent to First Disbursement:

(ii) Provide the ADB with evidence of the establishment of the projectManagement Unit in Gabès, Gafsa and Kasserine each having a Directorwhose Curriculum Vitae will have received the prior approval of the ADB, aRural Engineer, an Agriculture Economist, a Specialist in Gender issues andan Accountant/Administrative officer (paragraph 5.1.2) ;

(vi) Submit to the ADB for consideration, the Curriculum Vitae of the Director ofeach of the PMU (paragraph 5.1.2) ;

(vii) Undertake to schedule the construction of windbreaks for the programme inGabès in accordance with the project schedule (paragraph 4.5.5) ;

(viii) Undertake to sign agreements between the CRDAs and the Research andTraining Institutions (paragraph 4.5.16) ;

(ix) The proof of the opening of an account in a Commercial Bank in each of theGovernorates. Such accounts should be to receive from the Bank, the specialaccount funds for the projects.

D) Other Conditions

35

The Borrower should also:

For the PDAI in Gabès

(iii) Commence the construction of windbreaks for the project in Gabès as fromthe beginning of the second year following the effectiveness of the LoanAgreement for Gabès ;

For the PDAIs in Gabès, Gafsa and Kasserine

(i) Send to the Bank, not later than 31 December 2003, the agreements signedbetween each of the CRDAs involved in the projects.

ANNEX 1TUNISIA

INTEGRATED AGRICULTURE DEVELOPMENT PROGRAMME FOR THE GOVERNORATESOF GABES, GAFSA AND KASSERINE

Programme Location

ANNEX 2

TUNISIA –INTEGRATED AGRICULTURE DEVELOPMENT PROGRAMME OF GABES – GAFSA AND KASSERINETYPIFIED ORGANISATION CHART FOR THE PROJECT MANAGEMENT UNIT

Consultants&

ImplementationEntreprises

CommunityDevelopment

&Micro-entreprises

Works &Development

Agriculture&

PastoralDevelopment

ProgrammingMonitoring &

Evaluation

Management& Accounting

HEADPMU

DIVISIONRURAL

HYDRAULICEQUIPEMENT

DIVISIONAGRICULTUREPROMOTION &

EXTENSION

DIVISIONREFORESTATION

PROTECTIONOF SOILS

DIVISIONETUDIES

DIVISIONMANAGEMENT

& FINANCE

REGIONALCOMMISSAIRE

CRDA

ANNEX 3

Summary of Implementation Schedules for Gabès and Gafsa2001 2002 2003 2004 2005

ACTIVITIES 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

1. Board Approval2. Establishment of PMU4. CES Preservation

- Wks Water anti-erosion- Spreading - ravines

5. Infrastructures- Earth roads* Studies* Works

- Electricity* Studies* implementation

6. Hydro-geology- Drilling* Studies* implementation

- Piezometres* Studies* implementation

7. irrigated Community Areas* Studies* Establishment

8. Wells9. Pastoral Water

- Refurbished Equipment

Summary of Implementation Schedules for Kasserine2001 2002 2003 2004 2005

ACTIVITIES 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

1. Board Approval2. Establishment of PMU4. Community Areas

- Drilling Survey- Drilling

5. Establishment of Areas- Studies- implementation

6. Earth Roads- Studies- Works

7. Equipment at the plot level6. individual Areas

- Drilling and Wells- Irrigation Equipment

9. CES- Studies- Works

10. Pastoral EspartoDevelopment

- Works- Plantations

ANNEX 4PAGE 1/9

TUNISIA : INTEGRATED AGRICULTURE DEVELOPMENT PROGRAMME

DETAILED COST ESTIMATES BY PROJECT (GABES, GAFSA, KASSERINE)

1. The various costs tables for each of the three projects Gabès, Gafsa and Kasserine are detailedout in the following sections in order to help to determine the respective contributions of each of theGovernorates and co-sponsors.

PDAI of Gabès

2. The total cost of the project is estimated at DT 32.10 million, or UA 18.50 net of tax and duty-free. This cost is distributed into DT 16.92 million, or UA 9.75 million in foreign currency and DT15.18 million or UA 8.75 million in local currency. Table 4.1 (a) summarises the costs bycomponent.

Table 4.1 (a)Summary of Cost Estimates by Component for Gabès

Components In DT Million In UA Million % InF.E

A. Development 11.11 7.08 18.20 6.40 4.08 10.49 61.1%



D. Project Management Unit 1.00 0.79 1.79 0.57 0.46 1.03 55.7%

Total Base Cost 14.89 13.09 27.98 8.58 7.54 16.13 53.2%



Total Cost of the Project 16.92 15.18 32.10 9.75 8.75 18.50 52.7%

3. Table 4.2 (a) below summarises the project costs by category of expenditure:

Table 4.2 (a)

Summary of Cost Estimates by Category of Expenditure GabèsDT Million UA MillionCategories


% InF.E

1. CIVIL ENGINEERING WORKS

- Infrastructure Works 10.82 7.20 18.03 6.24 4.15 10.39 60.0%2. GOODS- Equipment and Material 1.12 0.30 1.42 0.64 0.18 0.82 78.6%- Vehicles 0.14 0.01 0.15 0.08 0.00 0.09 95.0%

3. SERVICES OF CONSULTANTS- Assistance Technique & Consultants 1.03 0.03 1.06 0.60 0.02 0.61 97.4%

- Research 0.16 0.10 0.26 0.09 0.06 0.15 60.0%

- Training 0.92 0.32 1.24 0.53 0.19 0.72 74.1%

- Studies 0.11 0.06 0.18 0.07 0.04 0.10 64.2%

4. CREDIT 0.43 4.37 4.80 0.25 2.52 2.77 9.0%

5. LOCAL STAFF 0.00 0.46 0.46 0.00 0.26 0.26 0.0%

6. RUNNING 0.16 0.23 0.39 0.09 0.14 0.23 40.0%

Total Base Cost 14.89 13.09 27.98 8.58 7.54 16.13 53.2%

Physical Contingencies 0.74 0.63 1.38 0.43 0.36 0.79 54.1%Provision for Price Increase 1.28 1.46 2.74 0.74 0.84 1.58 46.7%Total 16.92 15.18 32.10 9.75 8.75 18.50 52.7%

ANNEX 4PAGE 2/9

Table 4.3 (a)Sources of Finance for Gabès

In UA millionSOURCES OF FINANCE F.E L.C. TOTAL

% ofTotal

ADB 9.19 2.97 12.16 65.7%


FOSDAP 0.14 0.78 0.92 5.0%

Beneficiaries 0.06 0.31 0.37 2.0%

B N A / B T S 0.36 2.03 2.40 13.0%

TOTAL 9.75 8.75 18.50 100.0%

4. The ADB will cover 65.7% of the project total cost, or UA 12.16 million. It will therefor cover94.24% of the expenditure in foreign exchange. The Government’s contribution amounts to UA2.65 million, or 14.3% of the project total cost. The institutions financing the rural sector such asthe Banque Nationale Agricole (BNA) and the Banque Tunisienne de Solidarité (BTS) will financeto the tune of UA 2.40 million. The FOSDA will finance it with UA 0.92 million, and theBeneficiaries for UA 0.37 million, or 2% of the total cost of the project.

Table 4.4 (a)Expenditure by Category and by Source of Finance for Gabès

(In UA Million)

ADBCategories F.E L.C. TOTAL Tunisian

Gvt

FOSDA Beneficiaries

BTS/BNA Total


- Infrastructure Works 7.11 2.81 9.91 2.01 11.92

2. GOODS- Equipment and Material 0.72 0.05 0.77 0.15 0.92

- Vehicles 0.09 0.09 0.09

3. SERVICES OF CONSULTANTS- Assistance Technique & Consultants 0.67 0.00 0.67 0.02 0.69

- Research 0.10 0.07 0.17 0.17

- Training 0.33 0.33 0.03 0.36- Studies 0.07 0.04 0.12 0.12


TOTAL 9.19 2.97 12.16 2.65 0.92 0.37 2.40 18.50

5. The expediture on the various components of the project will be made according to the schedulein Table 4.5 (a) below:

Table 4.5 (a)Expenditure Schedule by Componentsfor Gabès

(In UA Million)Components 2001 2002 2003 2004 2005 Total

A. Development 0.25 2.99 3.72 2.78 2.29 12.02B. Agro-pastoral Development 0.10 0.58 0.93 0.97 0.99 3.57C. Organisation of the Rural Folks 0.27 0.33 0.40 0.38 0.39 1.76D. Project Management Unit 0.39 0.19 0.21 0.18 0.18 1.15

Total Cost 1.01 4.08 5.26 4.30 3.85 18.50

ANNEX 4PAGE 3/9

4.9.7. The expenditure on the various components of the project will be made according to theschedule in Table 4.6 (a) below:

Table 4.6 (a)Expenditure Schedule by Category Gabès

(In UA Million)Categories 2001 2002 2003 2004 2005 Total

1. CIVIL ENGINEERING WORKS- Infrastructure Works 0.21 2.56 3.20 2.43 1.98 10.39

2. GOODS

- Equipment and Material 0.23 0.24 0.19 0.08 0.08 0.82

- Vehicles 0.09 0.00 0.00 0.00 0.00 0.09

3. SERVICES OF CONSULTANTS

- Assistance Technique & Consultants 0.12 0.13 0.15 0.10 0.10 0.61

- Research 0.02 0.04 0.02 0.02 0.03 0.15

- Training 0.10 0.12 0.16 0.16 0.17 0.72

- Studies 0.02 0.02 0.02 0.03 0.03 0.10

4. CREDIT 0.04 0.47 0.77 0.76 0.73 2.77

5. LOCAL STAFF 0.05 0.05 0.05 0.05 0.05 0.26

6. RUNNING 0.05 0.05 0.05 0.04 0.04 0.23

Total 0.94 3.69 4.62 3.67 3.20 16.13

Non Allocated 0.07 0.40 0.64 0.62 0.65 2.37

Total 1.01 4.08 5.26 4.30 3.85 18.50

6. The expenditure to be made by the ADB, the Government of Tunisia, the FOSDA, theBeneficiaries and the BNA and BTS banks will be in accordance with Table 4.7 (a) below, based onthe implementation schedule:

Table 4.7 (a)Expenditure Schedule by Source of Finance for Gabès

(In UA Million)SOURCES OF FINANCE 2001 2002 2003 2004 2005 Total

ADB 0.80 2.99 3.59 2.62 2.16 12.16


FOSDAP 0.02 0.15 0.25 0.25 0.25 0.92

Beneficiaries 0.01 0.06 0.10 0.10 0.10 0.37

B N A / B T S 0.06 0.38 0.65 0.66 0.66 2.40

TOTAL 1.01 4.08 5.26 4.30 3.85 18.50

PDAI de Gafsa

7. The total cost of project estimated at DT 37.27 million or UA 21.48 million net of tax and duty

ANNEX 4PAGE 4/9

Table 4.1 (b)Summary of Cost Estimates by Component for Gafsa

TOTAL TOTALCOMPONENTS F.E L.C. TOTAL F.E L.C. TOTAL

% enDevise

A. Development 14.07 9.48 23.55 8.11 5.46 13.57 59.7%




Total Base Cost 17.87 14.61 32.48 10.30 8.42 18.72 55.0%




8. Table 4.2 (b) below summarises the costs of the project by category of expenditure:Tableau 4.2 (b)

Summary of Cost Estimates by Category of Expenditure for Gafsa

In DT Million In UA MillionCATEGORIES F.E L.C. TOTAL F.E L.C. TOTAL

% inF.E.

1. CIVIL ENGINEERING WORKS- Infrastructure Works 13.66 9.36 23.02 7.87 5.39 13.26 59.3%

2. GOODS- Equipment and Material 1.17 0.35 1.52 0.68 0.20 0.88 77.3%- Vehicles 0.32 0.02 0.34 0.19 0.01 0.20 95.0%


- Research 0.19 0.13 0.32 0.11 0.07 0.18 60.0%

- Training 0.48 0.03 0.51 0.28 0.02 0.29 94.3%

- Studies 0.13 0.08 0.21 0.07 0.05 0.12 61.7%

4. CREDIT 0.70 3.86 4.56 0.40 2.22 2.63 15.3%

5. LOCAL STAFF 0.39 0.53 0.92 0.22 0.31 0.53 42.2%

6. RUNNING 0.16 0.23 0.39 0.09 0.14 0.23 40.0%

Total Base Cost 17.87 14.61 32.48 10.30 8.42 18.72 55.0%

Physical Contingencies 0.89 0.71 1.60 0.51 0.41 0.92 55.9%Provision for Price Increase 1.56 1.63 3.19 0.90 0.94 1.84 48.8%Total Cost of the Project 20.33 16.94 37.27 11.71 9.76 21.48 54.5%

9. The sources of finance by category of goods and services are presented in Table 4.3 (b) below:Table 4.3 (b)

Sources of finance for Gafsa(In UA Million)

COUT TOTALSOURCES OF FINANCE

F.E L.C. TOTAL Total

ADB 11.02 3.86 14.87 69.2%


FOSDAP 0.11 0.65 0.76 3.6%

Beneficiaries 0.05 0.26 0.31 1.4%

B N A / B T S 0.30 1.69 1.99 9.2%

TOTAL 11.47 10.01 21.48 100.0%

ANNEX 4PAGE 5/9

10. The ADB will cover 71.9% of the project total cost, or UA 14.87 million. The Government’scontribution amounts to UA 3.55 million, or 16.5% of the project total cost. The institutionsfinancing the rural sector such as the Banque Nationale Agricole (BNA) and the Banque Tunisiennede Solidarité (BTS) will finance to the tune of UA 1.99 million, or 9.2% of the project cost. TheFOSDA will finance it with UA 0.76 million, or 3.6% of the project cost and the Beneficiaries forUA 0. 31 million, or 3.4% of the total cost of the project.

11. The sources of finance by category of goods and services are presented in Table 4.4 (b) below:Table 4.4 (b)

Expenditure by Category and by Source of Finance for Gafsa(In UA Million)


Gvt

FOSDA Beneficiaries

BTS/BNA Total


- Infrastructure Works 8.98 3.60 12.59 2.66 15.25


- Vehicles 0.20 0.01 0.21 0.00 0.21

3. SERVICES OF CONSULTANTS- Assistance Technique & Consultants 0.43 0.00 0.43 0.00 0.43

- Research 0.12 0.08 0.21 0.00 0.21

- Training 0.31 0.00 0.31 0.02 0.33- Studies 0.10 0.05 0.15 0.00 0.15


TOTAL 11.02 3.86 14.87 3.55 0.76 0.31 1.99 21.48

Sources of Finance and Schedule of Expenses

12. The expenditure on the various components of the project will be made according to theschedule in Table 4.5 (b) to 4.16 below:

Table 4.5 (b)Schedule of Expenditure by Component for Gafsa



Total Cost 1.13 4.71 6.08 4.89 4.67 21.48

13. The expenditure on the various components of the project will be made according to theschedule in Table 4.6 (b) below:

ANNEX 4PAGE 6/9

Table 4.6 (b)Schedule of Expenditure by Category for Gafsa

(In UA Million)

Categories 2001 2002 2003 2004 2005 Total


2. GOODS


- Vehicles 0.20 0.00 0.00 0.00 0.00 0.20



- Research 0.02 0.05 0.04 0.04 0.04 0.18

- Training 0.06 0.06 0.06 0.06 0.06 0.29

- Studies 0.00 0.02 0.02 0.04 0.04 0.12

4. CREDIT 0.07 0.47 0.73 0.69 0.66 2.63

5. LOCAL STAFF 0.12 0.10 0.10 0.10 0.10 0.53

6. RUNNING 0.06 0.06 0.06 0.04 0.04 0.25Total 1.05 4.25 5.34 4.18 3.89 18.72

Non Allocated 0.08 0.46 0.73 0.71 0.78 2.76

Total 1.13 4.71 6.08 4.89 4.67 21.48

14. The expenditure to be made by the ADB, the Government of Tunisia, the FOSDA, theBeneficiaries and the BNA and BTS banks will be in conformity with Table 5.3 below, based on theimplementation schedule:

Table 4.7 (b)Expenditure Schedule by Source of Finance for Gafsa

(In UA Million)SOURCES OF FINANCE 2001 2002 2003 2004 2005 Total

ADB 0.88 3.58 4.33 3.15 2.95 14.87


FOSDAP 0.02 0.13 0.21 0.20 0.20 0.76

Beneficiaries 0.01 0.05 0.08 0.08 0.08 0.31

B N A / B T S 0.05 0.34 0.54 0.53 0.52 1.99

TOTAL 1.13 4.71 6.08 4.89 4.67 21.48

ANNEX 4PAGE 7/9

PDAI of Kasserine

15. The total project cost is estimated at DT 41.44 million, of UA 23.88 million net of tax and duty.

Table 4.1 (c)Summary of Cost Estimates by Component for Kasserine

In DT Million In UA MillionComponents F.E L.C. Total F.E L.C. Total

% inF.E.

A. Development 14.21 11.21 25.42 8.19 6.46 14.65 55.9%




Total Base Cost 17.96 18.27 36.23 10.35 10.53 20.88 49.6%




16. Table 4.2 (c) below summarises the costs of the project by category of expenditure:Tableau 4.2 (c)

Summary of Cost Estimates by Category of Expenditure for KasserineIn DT Million In UA MillionCategories


% inF.E.

1. CIVIL ENGINEERING WORKS- Infrastructure Works 9.36 9.64 19.00 5.39 5.55 10.95 49.3%

2. GOODS- Equipment and Material 4.87 1.51 6.39 2.81 0.87 3.68 76.3%- Vehicles 0.40 0.00 0.40 0.23 0.00 0.23 100.0%


- Research 0.00 0.00 0.00 0.00 0.00 0.00

- Training 0.16 1.21 1.37 0.09 0.70 0.79 11.8%

- Studies 0.15 0.02 0.16 0.09 0.01 0.09 90.2%

4. CREDIT 0.89 4.25 5.14 0.52 2.45 2.96 17.4%

5. LOCAL STAFF 0.03 0.95 0.98 0.02 0.55 0.56 3.0%

6. RUNNING 0.24 0.21 0.45 0.14 0.12 0.26 53.6%

Total base costs 17.96 18.27 36.23 10.35 10.53 20.88 49.6%

Physical Contingencies 0.90 0.84 1.73 0.52 0.48 1.00 51.8%Provision for Price Increase 1.55 1.92 3.47 0.89 1.11 2.00 44.6%TOTAL 17.78 21.03 41.44 10.25 12.12 23.88 42.9%

17. The expenditure on the various components of the project will be made according to theschedule in Table 4.3 (c) below:

ANNEX 4PAGE 8/9

Table 4.3 (c)Sources of finance for Kasserine

In UA MillionSOURCE OF FINANCE F.E L.C. TOTAL

% ofTotal

ADB 11.17 3.10 14.28 59.8%


FOSDAP 0.15 0.71 0.86 3.6%

Beneficiaries 0.06 0.28 0.34 1.4%

B N A / B T S 0.38 1.84 2.22 9.3%

TOTAL 11.76 12.12 23.88 100.0%

18. The ADB will cover 59.8% of the project total cost, or UA 14.28 million. The Government’scontribution amounts to UA 6.18 million, or 25.9% of the project total cost. The institutionsfinancing the rural sector such as the Banque Nationale Agricole (BNA) and the Banque Tunisiennede Solidarité (BTS) will finance to the tune of UA 2.22 million, or 9.3% of the project cost. TheFOSDA will finance it with UA 0.86 million, or 3.6% of the project cost and the Beneficiaries forUA 0. 34 million, or 1.4% of the total cost of the project.

19. The sources of finance by category of goods and services are presented in Table 4.4 (b) below:Table 4.4 (c)

Expenditure Schedule by Category and by Source of Finance for Kasserine(In UA Million)


Gvt

FOSDA Beneficiaries

BTS/BNA Total


- Infrastructure Works 6.16 2.27 8.43 4.32 0.00 0.00 0.00 12.75


- Vehicles 0.26 0.00 0.26 0.26

3. SERVICES OF CONSULTANTS- Assistance Technique & Consultants 1.20 0.32 1.52 1.52

- Research 0.00

- Training 0.11 0.42 0.53 0.38 0.91- Studies 0.09 0.01 0.10 0.10


TOTAL 11.17 3.10 14.28 6.18 0.86 0.34 2.22 23.88

Table 4.5 (c)Expenditure Schedule by Component for Kasserine



Total Cost 1.68 5.90 5.81 5.95 4.53 23.88

ANNEX 4PAGE 9/9

20. The expenditure on the various categories of the project will be made according to the schedulein Table 4.6 (c) below:

Table 4.6 (c)Expenditure Schedule by Category for Kasserine

(In UA Million)Categories 2001 2002 2003 2004 2005 Total


2. GOODS


- Vehicles 0.08 0.09 0.00 0.06 0.00 0.23



- Research 0.00 0.00 0.00 0.00 0.00 0.00

- Training 0.16 0.17 0.16 0.16 0.16 0.82

- Studies 0.04 0.03 0.03 0.00 0.00 0.09

4. CREDIT 0.21 0.68 0.72 0.79 0.57 2.96

5. LOCAL STAFF 0.09 0.10 0.12 0.12 0.12 0.54

6. RUNNING 0.05 0.05 0.05 0.05 0.05 0.26Total 1.57 5.33 5.11 5.09 3.78 20.88

Non Allocated 0.11 0.57 0.70 0.86 0.76 3.00

Total 1.68 5.90 5.81 5.95 4.53 23.88

21. The expenditure to be made by the ADB, the Government of Tunisia, the FOSDA, theBeneficiaries and the BNA and BTS banks will be in conformity with Table 4.7 (c) below, based onthe implementation schedule:

Table 4.7 (c)Expenditure Schedule by Source of Finance for Kasserine

(In UA Million)Source of Finance 2001 2002 2003 2004 2005 Total

ADB 0.99 3.70 3.39 3.44 2.74 14.28


FOSDAP 0.06 0.19 0.21 0.23 0.17 0.86

Beneficiaries 0.02 0.08 0.08 0.09 0.07 0.34

B N A / B T S 0.14 0.49 0.53 0.61 0.45 2.22

TOTAL 1.68 5.90 5.81 5.95 4.53 23.88

ANNEX 5

PDAI OF GABESOBJECTS 2001 2002 2003 2004 2005 2006 2007 2008 2009

Investments 2,842,340.00 9,695,480.00 9,296,217.50 9,266,082.50 6,865,467.50

Renewal 508,365 508,365 508,365

Cost of production -83,250 5,556,922 12,528,552 18,988,966 25,603,337 26,209,718 26,780,065 27,352,104 27,882,585

Total Costs 2,759,090 15,252,402 21,824,769 28,255,049 32,468,804 26,209,718 27,288,430 27,860,469 28,390,950

Gross income -111,000 7,412,885 16,812,578 25,480,614 34,354,070 35,162,579 35,923,041 36,685,760 37,393,068

Net Cash flow -2,870,090 -7,839,517 -5,012,192 -2,774,435 1,885,266 8,952,861 8,634,611 8,825,291 9,002,118

ECONOMIC RATE OF RETURNS 25.44%

SENSITIVITY TEST

Participatory Approach = +10% product -105450 7042240.321 15971948.95 24206583.26 32636366.84 33404449.69 34126888.83 34851471.7 35523414.49

Cash flow -2,864,540 -8,210,162 -5,852,821 -4,048,466 167,562 7,194,732 6,838,459 6,991,003 7,132,464


Participatory Approach = +10% Cost 2897044.5 16015022.03 22916007.97 29667801.37 34092244.57 27520203.97 28652851.25 29253492.32 29810497.52

Cash flow -3,008,045 -8,602,137 -6,103,430 -4,187,187 261,826 7,642,375 7,270,190 7,432,267 7,582,570


PDAI OF GAFSA

OBJECTS 2001 2002 2003 2004 2005 2006 2007 2008 2009

Investments 1910394 7741821 9729523.5 7613070 7084185 0 0 0 0

Renewal 471000 471000 706500

Cost of production 5892196.103 12420454.89 18743659.39 25090476.86 26133329.25 26431999.41 27269734.86 27756347.46

Total Costs 1910394 13634017.1 22149978.39 26356729.39 32174661.86 26133329.25 26902999.41 27740734.86 28462847.46

Gross income 0 7370583.699 15615342.67 23564916.94 31544152.61 32848853.73 33222191.44 34269360.75 34877626.49

Cash flow net -1910394 -6263433.403 -6534635.72 -2791812.447 -630509.2536 6715524.484 6319192.026 6528625.888 6414779.037


SENSITIVITY TEST

Participatory Approach = +10% product 7002054.514 14834575.54 22386671.09 29966944.98 31206411.04 31561081.87 32555892.71 33133745.17

Cash flow -1910394 -6631962.588 -7315402.853 -3970058.293 -2207716.884 5073081.798 4658082.454 4815157.85 4670897.713



Cash flow -2005913.7 -6945134.258 -7642134.639 -4109648.916 -2239242.347 5408858.022 4974042.056 5141589.145 4991636.664


PDAI OF KASSERINE

OBJECTS 2001 2002 2003 2004 2005 2006 2007 2008 2009

Investments 1699327.5 6716542.5 8421795 6690345 5832180

Renewal 909825 909825 909825

Cost of production 1644395.39 4222335.928 11474193.93 19228912.88 24489238.72 29581275.86 29935690.23 30474304.82

Total Costs 1699327.5 8360937.89 12644130.93 18164538.93 25061092.88 24489238.72 30491100.86 30845515.23 31384129.82

Gross income 2047331.355 5260930.852 14149966.96 23643330.61 30067366 36282826.95 36721512.71 37383299.82

Cash flow net -1699327.5 -6313606.535 -7383200.076 -4014571.964 -1417762.263 5578127.281 5791726.084 5875997.489 5999170.001


SENSITIVITY TEST

Participatory Approach = +10% product 1944964.787 4997884.309 13442468.61 22461164.08 28563997.7 34468685.6 34885437.08 35514134.83

Cash flow -1699327.5 -6415973.103 -7646246.619 -4722070.312 -2599928.794 4074758.981 3977584.737 4039921.853 4130005.01



Cash flow -1784293.875 -6731653.43 -8015406.623 -4922798.91 -2670816.907 4353665.345 4267171.041 4333721.727 4429963.51


INTEGRATED AGRICULTURE DEVELOPMENT PROJECT FOR GABES - GAFSA - KASSERINE

DETERMINATION OF ECONOMIC RATE OF RETURNS

TUNISIE

Annexe

CONFIDENTIAL

AFRICAN DEVELOPMENT BANK ADB/BD/WP/2000/120/Corr.18 November 2000Prepared by: OCDNOriginal : FrenchTranslated by : L. MANNEH

Probable Date of Board Presentation:Not Applicable

FOR INFORMATION

M E M O R A N D U M

TO : THE BOARD OF DIRECTORS

FROM : Philibert AFRIKASecretary General

SUBJECT : TUNISIA : PROPOSAL FOR AN ADB LOAN OF EURO 48,210,000(UA 35.4 MILLION) TO FINANCE THE INTEGRATED AGRICULTUREDEVELOPMENT PROJECTS FOR GABES, GAFSA AND KASSERINE

CORRIGENDUM*

Please find attached hereto a corrigendum relating to the above-mentioned appraisalreport.

Attch.

Cc: The President

* Questions on this document should be referred to:

Mr. Bisi OGUNJOBI Director OCDN Ext. 4040Mr. J. RUSHEMEZA Division Manager OCDN.4 Ext. 4199Mr. E. DOTE Agricultural Economist OCDW.4 Ext. 4542Mr.A. GOMBE Agronomist OCDN.4 Ext. 5652Mr. J. FRANSSEN Environmentalist OESU Ext. 4728

SCCD:C.H

REPUBLIC OF TUNISIA

GABES, GAFSA AND KASSERINE

INTEGRATED AGRICULTURAL DEVELOPMENT PROGRAMME

CORRIGENDUM TO THE APPRAISAL REPORT

The following corrections were made to the appraisal report after the negotiationsheld in Tunis, from 1 to 4 November 2000.

Sections 4.8, 4.9, 5.4 and 5.5 are modified as follows:

4.8. Programme Cost

4.8.1. The total cost of the programme is estimated at TD 99.90 million, i.e. UA 57.57 million,net of taxes and custom duties. The breakdown of this cost is TD 50.16 million, i.e. UA 28.90million in foreign exchange and TD 49.75 million, i.e. UA 28.67 million in local currency. Table 4.1below gives a summary of the costs per component and the details thereof are given in Annex 4.

Table 4.1Summary of Programme Cost Estimates by Component

In Million TD In Million UAComponents F.E. L.C Total F.E. L.C. Total

% inF.E.

A. Developments 36.11 26.73 62.85 20.81 15.40 36.21 57.5%B. Agro-pastoral Developments 2.71 10.60 13.31 1.56 6.11 7.67 20.3%C. Organization of the Rural Areas 3.20 3.29 6.50 1.85 1.90 3.74 49.3%D. Programme Management Unit 4.91 4.97 9.88 2.83 2.87 5.69 49.7%Total Base Cost 46.93 45.60 92.53 27.05 26.28 53.32 50.7%

Physical Contingencies 1.17 1.08 2.25 0.68 0.62 1.30 52.2%Provisions for Price Escalation 2.05 3.07 5.12 1.18 1.77 2.95 40.0%Total Programme Cost 50.16 49.75 99.90 28.90 28.67 57.57 50.2%

4.8.2. The costs were estimated on the basis of the June 2000 prices. A 2.5% provision forphysical contingencies was applied to all the base costs, with the exception of personnel, service andcredit costs. Similarly, a 2% provision for price escalation was applied to all the components.

2

Table 4.2 below gives a summary of the programme costs by category of expenditure:

Table 4.2Summary of the Programme Cost Estimates by Category

Million TD Million UACategories

F.E. L.C Total F.E. L.C Total

% EnDevise

1. CIVIL WORKS 30.43 26.90 57.34 17.54 15.50 33.04 56,1%2. GOODS 1.04 0.33 1.37 1.01 0.18 1.19 78.6%3. CONSULTANCY SERVICES 1.00 0.26 1.26 0.73 0.24 0.97 71.0%4. CREDIT 0.37 1.36 1.73 0.34 1.96 2.31 16,1%5. LOCAL STAFF 0.00 2.24 2.24 0.00 1.29 1.29 0,0%6. OPERATION 0.19 0.29 0.48 0.19 0.29 0.48 44,9%

Total Base Cost 46.93 45.60 92.53 27.05 26.28 53.32 50,7%

Physical Contingencies 1.17 1.08 2.25 0.68 0.62 1.30 52,2%Provision for Price Escalation 2.05 3.07 5.12 1.18 1.77 2.95 40,0%TOTAL 50.16 49.75 99.90 28.90 28.67 57.57 50,2%

BREAKDOWN OF COSTS BY AREA OF OPERATION

4.8.3. The breakdown of the total cost of the programme stands at UA 17.00 million for theGabes area, UA 18.23 million for the Gafsa area and UA 22.34 million for the Kasserine area. Table4.1 (i) below gives a summary of the costs by area and by component and the details thereof aregiven in Annex 4.

Table 4.1 (i)Summary of the Cost Estimates by Area and by Component

(In Million UA)

GABES GAFSA KASSERINE TOTALCOMPONENTSF.E. L.C Total F.E. L.C Total F.E. L.C Total F.E. L.C Total

A. Developments 5.70 4.29 10.00 6.92 4.65 11.57 8.19 6.46 14.65 20.81 15.40 36.21B. Agro-pastoral Developments 0.47 2.35 2.82 0.64 1.90 2.54 0.45 1.86 2.31 1.56 6.11 7.67C. Organization of the Rural Areas 1.00 0.31 1.32 0.60 0.57 1.16 0.25 1.02 1.26 1.85 1.90 3.74D. Programme Management Unit 0.83 0.77 1.60 0.83 0.77 1.60 1.16 1.33 2.50 2.83 2.87 5.69

Total Base Cost 8.01 7.72 15.73 8.99 7.89 16.87 10.05 10.67 20.71 27.05 26.28 53.32

Physical Contingencies 0.20 0.19 0.39 0.22 0.19 0.41 0.25 0.24 0.50 0.68 0.62 1.30Provision for Price Escalation 0.35 0.53 0.88 0.40 0.54 0.94 0.44 0.69 1.13 1.18 1.77 2.95Total Programme Cost 8.56 8.44 17.00 9.61 8.62 18.23 10.73 11.60 22.34 28.90 28.67 57.57

3

4.8.4. Table 4.2 (ii) below gives a summary of the programme costs by area and category ofexpenditure:

Table 4.2 (ii)Summary of the Cost Estimates by Area and by Category of Expenditure

(In Million UA)

GABES GAFSA KASSERINE TOTALCATEGORIES

F.E. L.C Total F.E. L.C Total F.E. L.C Total F.E. L.C Total

1. Works –Civil Engineering 5.41 5.20 10.62 6.71 4.59 11.31 5.41 5.70 11.11 17.54 15.50 33.042. Goods 1.04 0.33 1.37 1.01 0.18 1.19 3.06 0.84 3.90 5.11 1.35 6.463. Services 1.00 0.26 1.26 0.73 0.24 0.97 0.82 1.01 1.83 2.55 1.50 4.064. Credit 0.37 1.36 1.73 0.34 1.96 2.31 0.52 2.45 2.97 1.23 5.78 7.005. Local Staff 0.00 0.29 0.29 0.00 0.63 0.63 0.00 0.38 0.38 0.00 1.29 1.296. Operation 0.19 0.29 0.48 0.19 0.29 0.48 0.24 0.28 0.52 0.62 0.85 1.47

Total Base Cost 8.01 7.72 15.73 8.99 7.89 16.87 10.05 10.67 20.71 27.05 26.28 53.32

Physical Contingencies 0.20 0.19 0.39 0.22 0.19 0.41 0.25 0.24 0.50 0.68 0.62 1.30Provision for Price Escalation 0.35 0.53 0.88 0.40 0.54 0.94 0.44 0.69 1.13 1.18 1.77 2.95Total Programme Cost 8.56 8.44 17.00 9.61 8.62 18.23 10.73 11.60 22.34 28.90 28.67 57.57

4.9. Sources of Finance and Expenditure Schedule

4.9.1. The programme will be cofinanced by the ADB and the Tunisian Government as per Table4.3 below:

Table 4.3Sources of Finance

In Million UASOURCES OF FINANCE F.E. L.C TOTAL

% duTotal

ADB 27.54 7.86 35.40 61.5%Tunisian Government 22.17 22.17 38.5%

TOTAL 27.54 30.03 57.57 100.0%

4.9.2. The ADB will finance 61.5% of the total cost of the programme, i.e. UA 35.40 million. Itwill meet the entire foreign exchange cost of the programme and 26.17% of the local currency costs.The ADB operations will cover all the programme activities, except those financed through credit,particularly the development of agro-pastoral production. The Bank’s contribution will finance theentire cost of the equipment and the consultancy services. It will also finance part of the cost of theworks and the operation. The Government’s contribution amounts to UA 22.17 million, i.e. 38.5%of the total cost of the programme. It will finance part of the local currency costs relating to works,local staff costs, credit and operation. With regard to credit, the rural sector financing institutionssuch as the “Banque Nationale Agricole” (BNA) and the “Banque Tunisienne de Solidarité” (BTS)will finance the activities relating to production and the procurement of stockbreeding equipment.

4.9.3. The following sections give summaries of the different cost tables by source of finance aswell as the expenditure schedules by component, category of expenditure and source of finance.Thus, each of the programme areas can schedule its annual activities accordingly.

4.9.4. Expenditure relating to the different components of the programme will be effected accordingto the schedule indicated in Table 4.5 below:

4

Table 4.5Expenditure Schedule by Component

(In Million UA)

Components 2001 2002 2003 2004 2005 Total

A. Developments 1.27 9.48 11.16 9.47 7.73 39.11B. Agro-pastoral Developments 0.23 1.58 2.15 2.36 2.06 8.37C. Organization of the Rural Areas 0.74 0.81 0.87 0.78 0.82 4.03D. Programme Management Unit 1.57 1.65 1.17 0.78 0.88 6.05

Total Cost 3.82 13.52 15.35 13.38 11.49 57.57

4.9.5. The expenditure relating to the different categories will be effected according to the scheduleindicated in Table 4.6 below:

Table 4.6Expenditure Schedule by Category

(In Millions UA)

Categories 2001 2002 2003 2004 2005 Total1. WORKS –CIVIL ENGINEERING 0.98 7.89 9.58 8.01 6.59 33.042. GOODS 1.05 1.80 1.48 1.36 1.07 6.763. SERVICES 0.80 1.25 0.95 0.55 0.50 4.064. CREDIT 0.34 1.32 1.74 1.78 1.51 6.695. LOCAL STAFF 0.26 0.26 0.26 0.26 0.26 1.296. OPERATION 0.24 0.26 0.28 0.28 0.41 1.47Total 3.67 12.79 14.28 12.24 10.34 53.32Not Allocated 0.14 0.74 1.07 1.14 1.15 4.25Total 3.82 13.52 15.35 13.38 11.49 57.57

BREAKDOWN OF ADB FINANCING BY AREA OF OPERATION

Table 4.2 (i)Summary of Project Cost Estimates by Area and by Category of Expenditure

(In Million UA)

Gabes Gafsa KasserineCategories F.E. L.C TOTAL F.E L.C TOTAL F.E. L.C TOTAL

1. CIVIL WORKS- Works – Civil Engineering 6.44 2.19 8.64 7.43 2.47 9.90 5.25 1.61 6.87

2. GOODS- Equipment and Materials 1.04 0.33 1.36 0.86 0.08 0.94 2.62 0.04 2.66- Vehicles 0.21 0.01 0.22 0.19 0.01 0.20 0.21 0.00 0.21

3. SERVICES- Techn Assistance, Consult 0.54 0.00 0.54 0.21 0.00 0.21 0.55 0.10 0.65- Research 0.10 0.07 0.16 0.10 0.07 0.16 0.00 0.00 0.00- Training 0.28 0.00 0.28 0.25 0.00 0.25 0.13 0.50 0.63- Studies 0.21 0.19 0.40 0.21 0.17 0.38 0.08 0.01 0.094. OPERATION 0.22 0.00 0.22 0.20 0.00 0.20 0.22 0.00 0.22

Total 9.04 2.78 11.82 9.44 2.81 12.25 9.06 2.27 11.33

5

Provisions Relating to the Procurement of Goods and Services

5.4.1. Provisions relating to the procurement of the goods, works and services required for theprogramme are summarized in Tables 5.2, 5.3 and 5.4 below. Procurements financed by the ADBwill be made in keeping with the Bank’s Rules of Procedure for the Procurement of Goods, Worksand Services or the Bank’s Rules of Procedure for the Use of Consultants, as the case may be, usingthe Bank’s relevant standard bidding documents.

Table 5.2Gabes Integrated Agricultural Development Project

Provisions Relating to the Procurement of Goods, Works and Services Financed by the ADB(In Million UA)

CATEGORIES ICB NCB OTHERS ShortlistFinancing

Otherthan ADB

TOTAL

1. CIVIL WORKS- Infrastructure Works 8.64 8.64

2. GOODS- Equipment and Materials 1.36 1.36- Vehicles 0.22 0.22

3. CONSULTANCY SERVICES- Techn Assistance, Consult 0.54 0.54- Research 0.16 0.16- Training 0.28 0.28- Studies 0.40 0.40

4. Credit 05. Local Staff6. Operation 0.22 0.22

Total 0,00 10.22 0.22 1.38 11.82

Table 5.3Gafsa Integrated Agricultural Development Project


CATEGORIES ICB NCB OTHERS ShortlistFinancing

Otherthan ADB

TOTAL



3. CONSULTANCY SERVICES- Techn Assistance, Consult 0.21 0.21- Research 0.16 0.16- Training 0.25 0.25- Studies 0.38 0.38

4. Credit5. Local Staff6. Operation 0.20 0.20

Total 0.00 11.04 0.20 1.00 12.25

6

Tableau 5.4Kasserine Integrated Agricultural Development Project


CATEGORIESICB NCB OTHERS Shortlist

FinancingOther

than ADB

TOTAL



3. CONSULTANCY SERVICES- Techn Assistance, Consult 0.65 0.65- Training 0.63 0.63- Studies 0.09 0.09

4. Credit5. Local Staff6. Operation 0.22 0.22

TOTAL 0.00 9.74 0.22 1.37 11.33

Paragraphs 5.4.2 and 5.4.3 are modified as follows:

5.4.2 Each of the Gabes, Gafsa and Kasserine PMUs, under the supervision of their respectiveCRDAs, will be responsible for awarding the goods and services contracts, with the exception of goodspurchased through credit. The CRDAs will have the requisite resources, capacity, expertise andexperience to conduct the procurements indicated below:

(i) the consultants and consulting firms to be entrusted with the infrastructure design will berecruited on the basis of a shortlist; contracts for the supply of vehicles, materials,equipment, pumps and their accessories, will be awarded following national shopping;

(ii) civil engineering works contracts, particularly development works relating to thetreatment of catchment areas, construction of water supply infrastructure, rehabilitationof feeder roads, the development of bottomlands and irrigation developments, will beawarded through national competitive bidding (NCB);

(iii) contracts for the electrification of the boreholes and pumping stations will be awardedthrough direct negotiation with the company “Société tunisienne d’électricité et de gaz”(STEG) ;

(iv) contracts for the procurement of extension and sensitization services, the restructuring ofproducer organizations and training will be awarded through direct negotiation with theAgricultural Extension and Training Agency (Agence de Vulgarisation et de FormationAgricole - AVFA), the National Vocational Training Board (l’Office National de laFormation Professionnelle), in collaboration with the National Cottage Industries Board(l’Office National de l’Artisanat - ONA), the agricultural services cooperatives and theinterprofessional groups.

5.4.3. In the drive to enhance and speed up the contract award procedures, thresholds beyondwhich bidding documents for supplies, works and studies will have to be reviewed beforehand, havebeen set at UA 150,000, 300,000 and 60,000, respectively. Furthermore, standard ADB biddingdocuments will be used.

7

Paragraphs 5.5.1 and 5.5.2 have been modified as follows:

5.5.1 A bank account will be opened in the name of the project at the Central Bank of Tunisia byeach of the PMUs. These accounts, intended to receive only the project resources, will be manageddistinctly from the contributions emanating from the Tunisian budget. The initial advance, the ceiling ofwhich is set at 1.36 million Euro per loan, will be paid into this account. The funds of the specialaccount will be replenished during during project implementation in line with the planned and eligibleexpenditure and in keeping with the existing disbursement rules. The opening of this account will be alending condition. It will be accessible to the Bank at all times for the verification of fund movements,particularly during project supervision and audit missions.

5.5.2 Disbursement. In the drive to enhance the implementation of the programme and complywith the implementation schedule, a special account, which could be replenished, will be establishedwithin each PMU in accordance with a yearly or half-yearly programme. The initial advance, theceiling of which is set at 1.36 million Euro per loan, will be paid into this account. The funds of thespecial account will be replenished during during project implementation in line with the plannedand eligible expenditure and in keeping with the existing disbursement rules. The advanced fundswill be replenished subject to the submission of a request to the Bank to that effect, accompanied bysupporting documentation showing that at least 50% of the amount of the advance has been spent.Indeed, implementation of the programme will require the payment of certain amounts in localcurrency as well as the funding of essential works such as developments which will be carried outmainly by small local enterprises. These enterprises will not be able to withstand long disbursementperiods.

5.5.3 Retroactive Financing: Expenditure relating to studies (irrigation schemes, electrificationof boreholes, feeder roads and equipment for the project management units …) conducted prior tothe date of signature of the loan agreements, will be refunded to a maximum of 680,000 Euro perproject.

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