World Bank Document · AFS Contractual Solidarity Allocation ... 6 Project Objectives ... demand by...

Document of

The World Bank

Report No. 15392-AL

STAFF APPRAISAL REPORT

DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA

SOCIAL SAFETY NET SUPPORT PROJECT

MARCH 29, 1996

Human Resources DivisionMaghreb and Iran DepartmentMidddle East & North Africa Regional Office

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CURRENCY EQUIVALENTS

Currency unit = Dinar Algerien (DA)

I US dollar = 53.7 DA(as of January 31, 1996)

FISCAL YEAR

January Ist - December 31

WEIGHTS AND MEASURES

Metric system

ABBREVIATIONS

AFS Contractual Solidarity Allocation(Allocation Forfaitaire de Solidarit6)

DIPJ Program for Professional Insertion of Young People(Dispositif d'Insertion Professionnelle des Jeunes)

DSPS Department of Health and Social Protection(Departement de Sante et de Protection Sociale)

ECA Europe and Central AsiaGDP Gross Domestic ProductICAF Completnentary Indenmity of Family Allocation

(Indemnit6 Complementaire d'Allocation Familiale)ICB International Competitive BiddingICSR Indeniity for the Incomeless

(Indemnite en faveur des Categories Sans Revenu)IMF International Monetary FundIPSU Indemnity to Low Income Households

(Indemnite aux Personnes a Salaire Unique)LSMS Living Standards Measurement SurveyMAP Ministry of Agriculture and Fisheries

(Ministere de l'Agriculture et de la P&he)MEAT Ministry of Equipment and Land Use Planning

(Minist&re de l'Equipement et de l'Amenagement du Territoire)MICLE Ministrv of Interior and Environment)

(Ministere de l'Interieur, des Collectivites Locales, etde I'Environnement)

MTPS Ministry of Labor, Social Protection and Vocational Training(Minist&re du Travail, de la Protection Sociale et de laFormation Professionnelle)

NCB National Competitive BiddingNGO Non-Governmental OrganizationiPAIG Program of Public Interest Activities

(Programme d'Activites d'Interet General)PE Public EnterprisePCU Project Coordination UnitPHRD Policy and Human Resources DevelopmentSA Special AccountSAL Structural Adjustment LoanSSN Social Safety NetSTF Special Treasury AccountTUP Public Works Program

(Travaux d'Utilite Publique)UNDP United Nations Development Program




LOAN AND PROJECT SUMMARY

Borrower: Democratic and Popular Republic of Algeria

Executing Agencies: Ministry of Labor. Social Protection, and Vocational TrainingMinistry of Agriculture and FisheriesMinistry of Equipment and Land Use PlanningMinistry of Interior and Environment

Project Objectives: The project seeks to create temporary jobs for the unemployed, toimprove the social safety net system in Algeria, and to pilot socialdevelopment programs based on increased community participation.

Project Description: A labor intensive public works scheme, located in disadvantaged areasand executed mainly by small private enterprises, would provide about20,000 person years of temporary employment in road, agriculture, andwater and sewerage maintenance. The Government's current socialsafety net programs would be strengthened through studies, equipmentprovision, and training. A pilot program to improve local socialinfrastructure would be established and feasibility work undertaken todevelop a Social Fund.

Poverty Category: Program of targeted interventions. Public works programs are designedto effectively target the unemployed and poor with temporary jobcreation. The reforms of the existing social safety net programs aim toimprove targeting of the poor and to enhance service quality. Reformsin eligibility criteria for some social programs will target poor femaleheads of household.

Amount: US$50.0 million

Terms: Repayable in 17 years including a five-year grace period, at the Bankstandard variable interest rate.

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Proposed Financing Plan:

Funding Source Total Percentage of Total Project Costs(US$ Million)

IBRD 50.0 71

Government 20.4 29

Total 70.4 100

Economic Rate of Return: Not applicable

Environmental Rating: "B"

Staff Appraisal Report: Report No. 15392-AL

Map: IBRD 27831

Project ID Number: 4978

TABLE OF CONTENTS

L. BACKGROUND .................................................. 1

Economic and Political Context ..................................... 1Features of the Labor Market ...................................... 1Poverty and Social Assistance Programs ................................ 3Government Strategy ........................................... 4Bank Assistance Strategy ......................................... 5

II. PROJECT OBJECTIVES AND DESCRIPTION ............................. 6

Project Objectives .............................................. 6Project Description ............................................ 6Labor Intensive Public Works ...................................... 6Strengthening the Social Safety Net .................................... 8Testing and Preparation of a Social Fund ................................ 9Economic Analysis ............................................. 10

III. PROJECT COSTS, FINANCING, PROCUREMENT AND DISBURSEMENT ... ..... 11

Summary of Project Costs ....................................... 11Financing ................................................. 12Procurem ent ................................................ 13Disbursement ................................................ 15

IV. PROJECT MANAGEMENT AND IMPLEMENTATION ...................... 16

Project Management ............................................ 16Im plem entation ............................................... 16Supervision, Monitoring, and Evaluation ......... ...................... 17

This report is based on the findings of an appraisal mission which took place in Algeria and Washington, D.C.in February, 1996. The mission included the following staff members and consultants: Mmes.lMessrs.Laurence Wolff (Mission leader and Principal Operations Officer, MNIHR), Fritz Rodriguez (PrincipalSanitary Engineer, MNIPI), Claude Archambault (Engineer), Laurie Effron (Senior Economist, MNlPI),Kutlu Somel (Senior Economist, MNINE), Meskerem Mulatu (Human Resources Specialist, MN1HR), NancyGillespie (Human Resources Economist, MN1HR), Dung-Kim Pham (Operations Analyst, MN1HR), PedroKanof (Information Technology, Policy and Strategy Specialist, EMTDR), Setareh Razrmara (Economist,MNlCO), Nabil Salem (Consultant). Peer reviewers were Jean-Jacques de St. Antoine (LA1HR), AlexandreMarc (EC4MS), Kalanidhi Subbarao (PSP), and Verdon Staines (EMTHR). Ms. Roslyn Hees is the MN1HRDivision Chief and Mr. Daniel Ritchie is the MN1 Department Director.

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TABLE OF CONTENTS (CONT.)

V. BENEFITS AND RISKS ................... 18

Project Benefits ........................................ ...... 18Project Risks ................................................. 18Environmental Rating ............. 19Program Objective Category ....................................... 19

VI. AGREEMENTS TO BE REACHED AND RECOMMENDATIONS .... ............ 19

ANNEXES

1. Description of the Social Protection System2. Road Maintenance Component3. Water and Sewerage Component4. Agricultural Sector Component5. Social Safety Net Improvement Component6. Pilot Social Fund7. Community Social Service Units Component8. Comparison of Current and Planned Interventions in the Algeria Social Safety Net9. Project Monitoring and Implementation Indicators10. Project Costs11. List of Terms of Reference and Documents in the Project File




I. BACKGROUND

Economic and Political Context

1.1 Algeria is undergoing an economic and social transformation. A collapse in the price of oil in1986, with hydrocarbon exports accounting for 95% of total merchandise exports, caused a 50% dropin Algeria's terms of trade and exposed the inefficiency of Algeria's centralized economy. Outputstagnated, and unemployment and inflation increased. The existing inefficiencies of the economy, and tosome degree the impact of the reforms as they began to take hold, resulted in a drop in incomes and theattendant increase in the number of vulnerable people.

1.2 The impact of the 1986 oil shocks was exacerbated by the fact that oil revenues account for 60%of the Algerian budget. Since 1986 there has been a cumulative decline of consumption per capita by28%. Reported unemployment rose from 17% in 1986 to 25% in 1994. Algeria borrowed heavily tocover its deficits, and its external debt increased by US$6 billion over the period 1985-87, and reached68% of GDP by the end of 1994. Both political uncertainty and economic imbalances negatively affectedforeign official and commercial investment in Algeria. By 1994, the widening macro-economicimbalances, the reduced access to external funds, and the deteriorating social and political environmentbecame unsustainable. With the assistance of the IMF and the World Bank, the Government introducedswift and far-reaching stabilization and adjustment measures in May 1994 (IMF), and January and May1995 (IBRD).

1.3 Under the IMF stabilization program, the budget deficit fell to 4.4% in 1994 (from 8.7% in 1993)and the overvalued dinar was devalued by close to 100%. The debt service ratio fell from 75% in 1993to 37% in 1994. Under the IBRD and IMF supported adjustment programs, the Government succeeded,inter alia, in drastically reducing subsidies, limiting them to three food products (bread, semolina, andmilk). The program is showing some results, and growth was estimated at 3.5% for 1995. Howeverrecent and expected growth will not, in the short and medium term, reduce to acceptable levelsunemployment rates, housing shortages, and low household incomes.

1.4 Since the elections of 1991, the situation in Algeria has limited the Government's ability torespond to the economic needs of the population, or to provide adequate incentives for domestic andinternational investments to fuel at least some of the much-needed recovery. The political tension hasalso severely limited external development assistance which, under different circumstances, might havesupported interventions to mitigate the negative effects of the economic crisis on the poor.

Features of the Labor Market

1.5 Up to the mid-1980s, employment policy was to a large extent a mechanism for the redistributionof oil revenues. The State's strategy was to ensure close to full employment. During the 1970s, the

strong demand for labor originated in the expanding public enterprise (PE) sector, but after 1986, labordemand by PEs fell sharply. The proportion of new formal sector jobs in public administration increasedfrom one third in the early 1980s to 50% of all new jobs. The shares of the construction and industrysectors declined, while the service sector remained largely unchanged over that period.

1.6 The employment distribution of the laborforce in 1991 is given in Figure 1. In addition, data Algeria: Labor force distribution, 1991

from the 1991 labor force survey, the latest availableinformation, show a clear trend in employment since 30the mid-1980s: the absolute number of salariedworkers remained virtually unchanged, but the share 25 -

of temporary workers increased. Agriculture and 20construction are two sectors in which a significant -

expansion of temporary contracts has occurred. 15 -

1.7 Although 55% of women are illiterate, there 10 -are 83 girls per 100 boys in primary school, and 81 *girls per 100 boys in secondary school. While only -

10% of the labor force is female, female employment 0growth averaged 10% p.a. between 1977-87. The CD

E~~~~~~

real level of female economic activity is probably , .2

understated by the official statistics due to the formal . Ocategories of employment used in the surveys of XS

employment.

1.8 Despite a relatively low labor force participation rate of 46%, open reported unemployment was25% in 1994. A shrinking economy in the face of an expanding labor force has led to slow growth ofemployment in the formal sector and rising unemployment, especially among youth and new entrants tothe labor force. The expected retrenchments of redundant workers in the public sector and rising femaleparticipation rates will also add to the ranks of the unemployed without faster employment growth.

1 .9 Those listed as unemployed include, in addition to the hard-core unemployed, people engaged ininformal activities, the underemployed, and those who have refused employment offers due toexpectations of getting a job according to their qualifications. Youth under the age of 25 represent two-thirds of the unemployed. Only one-third of the stock of unemployed have had prior work experience.About one-fifth of the unemployed have no formal education, 28% have not attained education beyondthe primary level, and another 34% have no more than a lower secondary school education. Between1989 and 1991, the share of the unemployed with higher levels of education rose. Unemployment forfirst job seekers as well as among older workers will remain a priority issue for some time during (andafter) the transition period of economic reform.

1.10 During the years of central planning and controlled prices, the informal sector's primary role wasthat of making rents on shortages. As the economy has become increasingly liberalized, however, theGovernment has recognized the importance of the informal sector and its potential role. Indeed, micro-enterprises can play a critical role as an engine of growth and a source of stable employment andrevenues; and fostering micro-enterprises can provide an important tool in poverty alleviation. Littlesystematic information is available, however, on the size, range of activities, or evolution of the informalsector in Algeria, so any program to support the micro-enterprise sector would have to begin withgathering and analyzing information.

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Poverty and Social Assistance Programs

1.11 There are no official estimates on the number of poor in Algeria. However, the existing socialprotection programs reach about 1 million households. The number of poor people depends on the choiceof the poverty line (the higher the poverty line, the more people will be defined as "poor"); at povertylines of US$40, 50 or 60 a month, which are roughly the averages of the various poverty lines used inMENA countries, the number of poor in 1990 could be about 3%, 7%, or 12%, respectively, of thepopulation. This indicates that very careful empirical work will need to be done before a poverty lineis chosen. Given that normally poverty increases with declining incomes, a decrease in real consumptionper capita of about 28% during 1986-94 suggests that the incidence of poverty should have increasedsignificantly over that period. The ongoing Living Standards Measurement Survey (LSMS) will providevaluable information to calculate country specific poverty lines and on the status of needy groups.

1.12 The Algerian social protection system comprises both contributive and non-contributivecomponents. The contributive component encompasses social insurance (Securite Sociale) and providescash benefits for contingencies such as retirement, disability and survivors' pensions, health care, andunemployment insurance scheme. The non-contributive component comprises the implicit and explicitconsumer price subsidies, family benefits, and the social assistance programs. An overview of the socialprotection system in Algeria is provided in Annex 1.

1.13 Despite structural problems and economic inefficiencies, in the 1970s and early 1980s, the systemwas fairly successful in alleviating poverty. Because of oil rents, fiscal costs were not a major constraint.The wide coverage of the former system,while inefficient because of the considerable leakage to thebetter-off in the society, enabled the Government to reach the poor. The main challenge of the currentsystem is to protect the vulnerable during the transition period within a constrained budget. The systemmust balance considerations of equity with the need to focus on efficiency and financial sustainability.

1.14 In an effort to compensate vulnerable groups for the reductions in subsidies for food staples, theauthorities introduced a broadly targeted system of cash transfers in 1992, covering almost 60% of thepopulation in 1993. This program was designed to ensure wide popular support for the consumer subsidyreform. Its cost was about 2% of GDP. However, the new system was inefficient and poorly targeteddue to inadequate means-testing. In October 1994, after agreement with the IMF, the Government putin place a further reform of the cash transfer system designed to improve targeting. One of the benefitswas transformed into a cash transfer system (Allocation Forfaitaire de Solidarite, AFS) directed towardspoor heads of households who are unable to work (i.e. the elderly and the disabled). A second transferscheme (Programme d'Activites d'Interet General--PAIG) was established for the able-bodied andunemployed poor, who would "work" for municipalities for a full day at half the minimum wage. TheGovernment considers these activities as acts of "social solidarity" rather than "work".

1.15 The new safety net system, covering about 15% of the population in 1995, and costing about0.75% of GDP, is functioning better than the previous broadly targeted system. However, a recentreview of the program identified a number of areas for improvement in targeting. Key issues are: (a)inadequate definition of poverty, including a lack of a unified poverty record system; (b) inadequatemanagement and supervision; (c) inadequate implementation of selection criteria, which in practice areapplied subjectively; and (d) cumbersome administrative procedures which lead to slow delivery oftransfers and payments. In particular, due to lack of oversight and to institutional weaknesses, manyparticipants in the PAIG are working for less than a full day and in activities with limited economic valueadded.

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Government Strategy

1.16 In order to maintain long-term economic growth and social stability, the Government is seekingto intensify the transformation of the economy from one which is centrally planned and public dominatedto one where the private sector is the engine of growth. Economic diversification from the presentdependence on oil/gas is key to achieving this objective. The Government is also seeking to move fromhighly centralized socialist planning to decentralized and grass roots decision making.

1.17 To reduce unemployment, the Government's highest priority is the promotion of broad-based,sustainable economic growth through the above changes in the economic structure. At the same time theGovernment is promoting a variety of labor intensive programs, designed to generate large numbers ofjobs. This includes, under the proposed project a multi-sectoral program of public works programsmainly in roadside maintenance, forestry, and water supply and sanitation. In addition, the Governmentis discussing similar free standing programs in agriculture and housing. The Government is couplingthese programs with efforts to develop the private sector and encourage bottom-up decision-making forpublic works programs.

1.18 To promote micro-enterprises, the Government through the Ministry of Labor, Social Protectionand Vocational Training (MTPS), undertook a program in 1990 targeted at the young (Dispositifd'insertion professionnelle des jeunes, DIPJ). After four years, more than 25,000 cooperatives had beenestablished, employing about 64,000 people. In 1994, however, based on an evaluation of the program,the Government realized it needed a new approach to support micro-enterprises. The evaluation pointedout a number of serious problems, including: (a) the problematic nature of cooperatives and the high rateof dissolution; (b) the relatively costly subsidies, subsidized interest rates, and establishment of aguarantee fund, provided by Government for investments in the micro-enterprises; (c) the refusal of banksto continue to provide credit to the cooperatives through the program; and (d) the relatively high rate ofarrears and default on the loans. Following this experience, the Government is prepared to seek adifferent approach, involving non-Governmental organizations, to ensure that a sustainable program isput in place that would provide support to a wide range of micro-enterprises. For the start up phase ofthe program, and in order to concentrate initial efforts, the focus would be on urban and peri-urbanmicro-enterprises.

1.19 With regard to its social safety net programs, the Government seeks to: provide temporaryemployment opportunities, particularly targeted to the poor, within the restructured macro-economicenvironment; and improve social assistance programs in both their management and their ability to bettertarget the poor without further increasing budgetary commitments. Under the SAL, the Government hasagreed to a specific program of improved management, better targeting, and further analytical work.Based on the expected analytical work to be undertaken over the next year, the Government, inconsultation with the Bank, will undertake further reforms of the social safety net system as part of thesecond tranche of the SAL about a year from now. Better understanding of the economic and socialcharacteristics of the needy, currently being sought through a Bank-financed LSMS, will help improvethe targeting and implementation of social protection programs.

1.20 The Government is also seeking to strengthen local and grass roots decision-making. Forexample, individual communes are responsible for the management of the PAIG. In addition, on a pilotbasis the Government has initiated a program (cellules de proximite), which identifies problems of slumdwellers, provides services, and links slum dwellers with other service agencies. The Government ismoving forward with the preliminary work leading to the establishment of an autonomous agency which

would manage a social fund based on grass roots identification of problems and implemented, inter aliaby private enterprises. The draft decree defining the statutes of the agency has been reviewed by theBank and establishment of the agency is expected over the next six to eight months.

Bank Assistance Strategy

1.21 The Bank aims to work closely with the Government of Algeria to support the reform programin all of its various elements, while recognizing the ongoing political uncertainties. The main objectivesare to deepen and ensure the irreversibility of the reforms at both macro- and sectoral levels, while at thesame time supporting targeted labor intensive projects as well as improvements in the social safety net,which complement adjustment efforts. The signature of an agreement with the IMF for a stand-by loan,and the recent follow-up discussions, signal the intention of the Algerian Government to pursue soundmacroeconomic policies. The Government has complied with the terms and conditions of its agreedprogram with the IMF and is completing its commitments under the Bank's Economic Rehabilitation Loanapproved in January 1995. The SAL focusses on the development of the private sector; the reform ofpublic enterprises, public expenditures, and the financial sector; and the strengthening of the socialprotection system. Successful implementation of the SAL operation would move the Government furtherin the direction of reform.

1.22 As a complement to its structural adjustment program, the Government is requesting assistancefrom the World Bank to (a) provide short-term employment opportunities for the unemployed, in parallelwith the adjustment effort; and (b) to strengthen its social safety net programs through better targeting,improved management, and, eventually, a more participatory approach. Parallel to the Social Safety Netproject, the Bank is preparing similar projects in housing and in agriculture, designed to target the poorand to increase employment, in parallel with broader sector- and economy-wide adjustment programs.The Bank is also initiating discussions on programs which will create a better environment for thedevelopment of micro, small, and medium private enterprises.

1.23 Within the context of the current situation, the Bank has undertaken untraditional and innovativemeans to maintain the dialogue with the Government: reverse preparation, appraisal and supervisionmissions (with the representatives of Government coming to Washington or to third countries); and useof consultants from Algeria or elsewhere in the Maghreb to conduct preparatory studies, implementationevaluations, and selective field visits.

1.24 Lessons from Previous Projects. The experience of the Bank in financing road programs hasbeen successful because of the strong institutional capacity of the Ministry of Public Works. At the sametime all Bank-financed projects in Algeria have faced problems of slow procurement and disbursement,and some projects, for example in health and agriculture, have been closed due to a lack of Governmentcommitment. The main lesson to be learned is that Government must be fully committed to project goals,design should be simple, and institutional and procurement arrangements fully worked out in advance.In the case of the proposed project, the Government appears strongly committed to the project and hasproposed a system for rapid decision-making and financing flows which would bypass most normalbureaucratic processes.

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II. PROJECT OBJECTIVES AND DESCRIPTION

Project Objectives

2.1 The proposed project mainly pilots new ideas and institutional set-ups which, if successful, couldeventually be broadened and generalized. The most important project objective is to create employmentand improve infrastructure and services in disadvantaged areas, and demonstrate the Government'scommitment to mitigate the impact of economic reforms on the poor. The second objective is to enhancethe effectiveness of Algeria's social safety net system. The third objective is to prepare, on a pilot basis,social development programs aimed at developing social infrastructure and alleviating poverty.

2.2 The project complements the SAL operation which focusses on the development of the privatesector and the reform of public enterprises, public expenditures, and the financial sector. In particularthe project would demonstrate the Bank's and Government's commitment to alleviate the social costs ofadjustment and support SAL objectives to improve the social safety net system.

Project Description

2.3 The project would consist of three main components: (a) labor intensive public works; (b)strengthening the social safety net; and (c) piloting of a program to improve social infrastructure as wellas feasibility studies on developing a Social Fund. Below is a summary of the components, which aredescribed in greater detail in the annexes to this report.

Labor Intensive Public Works Programs (base cost US$55.6 million)

2.4 The project would support labor intensive public works programs (trava1r d'utilite publique orTUP) in rural roadside maintenance, agriculture, water supply and sanitation, to be undertaken in under-served urban and rural areas. These programs, comprising over 80% of project costs, would differsignificantly from the PAIG in that there would be increased emphasis on social and economic valueadded, with closer supervision of works, and greater private sector participation. The programs areexpected to provide short-term employment, encourage the growth of small enterprises, maintain basicinfrastructure and services, and improve the environment in selected poor communities. In most caseslocal authorities would identify the specific works, which would be undertaken on a contract basis bysmall firms. Annex 8 summarizes the differences between the PAIG, the TUP, and a future Social Fund.

2.5 Roadside maintenance (US$24.2 million). The project would support the maintenance of about13,000 km of rural wilaya and communal roadsides in about 32 wilayas with high unemployment. Inparticular, the project would finance relatively simple works executed by small task teams (or tacherons)under contract, the total for each of which is not expected to exceed the regulatory ceiling of DA 3million (about US$60,000), tax included. The program would create about 4,400 person-years oftemporary employment at a cost of US$5,500 approximately per job-year. The program would help (a)develop the small scale private sector, particularly those using labor-intensive methods, rather than relyingon work done by Government force account, as has been the case in the past, and (b) maintain theinfrastructure in poor communities. The program is also expected to contribute to the reduction of rural-urban migration and lead to a more flexible flow of decision-making authority and funds. Consultantswould be hired to supervise the ongoing work. All project works selected require a minimum ofspecialized training or experience and a survey determined that local private contractors are indeed inplace.

2.6 Within this program 6,700 km of wilaya roads in 15 wilayas, and 4,500 km of communal roadsin 14 other wilayas have already been identified for maintenance on the basis of high unemployment, littleor no budget for maintenance, and adequate security. A complementary 2,000 km for roadsidemaintenance will also be carried out.

2.7 Agriculture (US$18.7 million). The agriculture programs would include five sub-programs. Thefirst would be designed to reduce the negative impact of caterpillar infestations in 50,000 ha. of pineforests. The second program would be designed to reduce soil erosion in vulnerable areas (53,000 ha.)in two provinces through regeneration and rejuvenation of the alfa plant. This plant, which thrives inthe saline soils of high plateau steppes of Algeria, serves as an important element of a fragile ecologicalsystem, but also has economic value in the production of high quality paper. The third program, in theprovince of Boumerdes, would focus on maintenance of watershed infrastructures as well as drainageworks. The fourth program, to be undertaken in the wilaya of Setif, would aim at flood damageprevention, afforestation, and fruit tree planting. The fifth program is a small scale activity for thecleaning and maintenance of irrigation drains in the lower Soummam and eastern coastal plain of Bejaia,which will improve utilization of the agricultural lands that are drained.

2.8 The agricultural programs would all be undertaken in poor rural areas. Overall about 10,000person-years of employment would be created at a cost of $1,800 per job-year. The labor portion of theseactivities would range between 56% and 80% of total cost.

2.9 Water Supply and Sewerage (US$12.7 million). The proposed water and sewerage componentwould be implemented in 17 wilayas with the highest rate of estimated unemployment. A major concernin the water and sewerage sector has always been poor maintenance of the works. While the Governmenthas made large investments in the sector, the public utilities have not had the necessary resources toproperly maintain the Government-financed installations. The proposed project would seek to assist theutilities in improving and rehabilitating their water supply and sewerage assets.

2.10 The water supply and sewerage component would include three sub-components: The watersupply sub-component would include the detection and repair of leaks from water supply pipelinesinstalled in selected wilayas. At present, about 50% of potable water produced in these wilayas is lostthrough leaks in the pipes. Under the project, unskilled laborers would be employed to survey theseleaks, and to uncover the pipeline areas where they are leaking. Leak repairs would be carried out byspecialized labor of the utilities. After the pipelines have been repaired, the unskilled laborers would fillin the trenches. In addition, water would be collected from underground springs in three sites locatedin the wilaya of Mila. Also, a number of water reservoirs in the wilaya of Setif would be dredged andrepaired. Steel reservoirs in the wilaya of Tizi-Ouzou would be sand-blasted and repainted. It isexpected that these rehabilitation works would allow to extend substantially the useful life of theseinfrastructures. No water rights issues are raised by these activities.

2.11 The second sub-component would include the cleaning and repair of sewers in 15 wilayas. Underthe project, unskilled laborers would manually remove settled materials from these sewers. The samelaborers would also clean the outlets of the main sewage interceptors in the concerned wilayas. Manualdredging would also be carried out at the junctions of the interceptors with the receiving water bodies.

2.12 The third sub-component would cover the provision of public utilities, essentially water supplyand sewerage, in 12 sites located in the wilayas of Batna and Djelfa. Basically, the work would consistof laying pipes for water supply and sewerage services. This would be performed manually by unskilledlaborers.

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2.13 Labor would account for about 63 % of the total cost. The water supply and sewerage componentwould create about 9,134 jobs over a period of six months, for a total of 4,600 person-years. The costper job-year would be about $3,000.

2.14 Overall, the following tasks are to be performed under TUP programs:

Roads: ditch cleaning and re-calibrating; weeding and restoration of shoulders; spreading ofdiscarded materials; cleaning of culverts and sealing of small cracks in the concrete; and repairsto concrete walls and rock linings.

Agriculture: maintenance of retaining walls; manual cleaning of drainage structures; constructionof windbreaks; flood damage prevention; alfa replanting; preparation of soil, planting, andreforestation; road maintenance.

Water and Sanitation: sewer cleaning and maintenance; water supply maintenance, including leakdetection and repair; cleaning and repairing water reservoirs; spring water collection.

Strengthening the Social Safety Net (base cost US$3.0 million)

2.15 Two sub-programs would help strengthen the Government's social safety net. The first wouldfocus on improving management, targeting, and monitoring of the Government's social assistanceprograms. A second sub-program would strengthen the Government's pilot community social serviceprogram (cellules de proximite), which identifies problems of slum dwellers, provides guidance and healthservices, and links slum dwellers with other public service agencies.

2.16 Imnproving Social Assistance Programs (US$2. 1 million). Overall, while the AFS and PAIG aresignificant improvements over the previous system, they require improved management at both the localand national levels as well as better monitoring and improvements in targeting. As part of the SAL, theGovernment of Algeria will put into place new policies and actions to improve its social safety net. Toimprove targeting of the AFS, the Government is expected to make cash payments monthly rather thanquarterly, extend cash payments to women who are heads of families and without other sources ofrevenue, and ensure that AFS programs do not duplicate other ongoing programs. Over the medium termthe Government would utilize the results of the ongoing LSMS to better understand the characteristicsof poverty. On this basis, and within its budget, the Government would adjust the amount of transfersprovided to individual families. To improve the PAIG the Government is expected to enforce regulationsrequiring eight hours of work for PAIG participants, experiment with weekly payments, and improve theselection and location of activities to ensure better targeting.

2.17 In support of these recommendations, the project would help build institutional capacity throughthe provision of technical assistance, training, studies, equipment, and documentation. Specifically astudy, the terms-of-reference of which have been agreed upon, would determine how to improvemonitoring of social assistance programs through the setting-up of an MIS and related improvedcomputerization, communication, and training programs. The study would build on the monitoringindicators agreed upon with the Bank and would be completed by December 31, 1996. As part of thestudy, a proposal, acceptable to the Bank, would be prepared for purchase of computers, software, faxmachines, photocopying machines, etc, and related training, at an estimated cost of US$1.1 million. Inaddition, vehicles would be provided to about 20 provinces and funds would be provided fordocumentation, including books and periodicals, at the central and wilaya levels.

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2.18 A large-scale training program to reach 2,000 staff responsible for oversight of social safety netprograms, at national and local levels, would be undertaken. The main objective of this training programwould be to strengthen the capacity for management, monitoring, and oversight of PAIG/AFS programs,including improving guidelines and support to local communities in developing PAIG programs. Inaddition study tours abroad as well as limited consultancies on technical matters would be made availableto central MTPS staff.

2.19 In order to ensure that the Government has an adequate analytical basis to initiate further reformsof the social safety net system, the project would support a survey designed to identify the characteristicsof PAIG/AFS beneficiaries.

2.20 In order to strengthen the management of social programs, the Government has initiated aprogram of redeployment of its staff. In particular the Government has established a small central officeresponsible for overseeing AFS/PAIG programs. It is planning to progressively increase the number ofstaff from the current four to ten. The Government is also seeking to redeploy two to four persons ineach wilaya to monitor and coordinate the evaluation of these programs, and to designate, at the communelevel, a person responsible for these programs. While the Governrment does not expect to contractadditional staff the total operating costs for the staff who would oversee these programs is estimated atabout US$4 million per year. This is a reasonable cost considering that the program, as a whole,distributes over US$300 million equivalent per year.

2.21 Commnunity Social Service Units ("Cellules de Proximite") (US$0.9 million). The Governmenthas mobile social service units in place in 20 locations. Each unit comprises a health professional, aneducator, a social worker/psychologist, and a representative of the Ministries of Sports and Culture.These units identify local community problems, link poor communities with existing social services, andprovide certain key social services, at a relatively low cost. Several partial evaluations of this programwhich have been undertaken indicate that the programs are having some success in helping to ensure moredirect and focussed Government interventions at the community level. However, further analytical workis needed before significant expansion should be undertaken.

2.22 Based on these evaluations, the project would support the strengthening of the existing 20 socialservice units as well as wilaya and central management. At the local level, this assistance would consistof about $5,000 per unit. Each unit, with community participation, would prepare a proposal for thenecessary assistance. The first two proposals would be transmitted to the Bank for review. The projectwould also provide computers and related software, equipment, and vehicles to each of the seven wilayacoordinating units. At the central level, the project would provide for a vehicle, national seminars, anda national training program (including for the coordination unit).

Testing and Preparation of a Social Fund (base cost US$4.1 million)

2.23 The third component would support small-scale testing of a commnunity development programand preparation of a Social Fund.

2.24 Pilot Proiect for Community Development (US$3.4 million). The project would support a pilotprogram for community development. The criteria for selection of these communities have been agreedupon. It is expected that the communities would include one with an active "cellule de proximite", onewith an active NGO, and one with no significant active intermediary agency. An evaluation wouldidentify the needs of these three communities and the capability of Government to meet these needs. On

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the basis of the study, a pilot program of social and infrastructure interventions would be identifiedincluding modalities for implementation, for financing under the project. The interventions, which havenot been pre-identified, could include construction of community infrastructure such as pre-schools, wells,community development centers, school expansion and repair, road improvement, sites and services, etc,as well as social services such as training and institutional support. A condition of disbursement for thiscomponent would be completion of the assessment of community needs, preparation of a program, anddefinition of implementation needs, all acceptable to the Bank.

2.25 Preparation of a Social Fund (US$0.7 million).' As noted above, the Government is planningto establish an autonomous Agency for Social Development which would manage a Social Fund. Anannex to this report provides a schematic discussion of the differences between the TUP, the PAIG anda future Social Fund. A draft decree establishing the Agency has already been prepared. The Agencywould be established and its operations defined by no later than March 31, 1997. In order to define thenature of the Agency and the activities of the Social Fund, the project would finance a number ofpreparatory studies and actions. In particular a study would be undertaken to identify, on the basis ofa national sample, community needs for social infrastructure, as well as the means for undertaking ademand-based program of local infrastructure development. Pre-engineering work would be undertakento prepare estimates of the unit costs for expected interventions. Study tours would be undertaken toreview experiences of social funds in the world.

Economic Analysis

2.26 AFS/PAIG. The expected project benefits include, for the PAIG: (a) productivity gains in theactivities undertaken through supervision to ensure workers actually work on the job, ensure compliancewith technical standards for the job, and enforce an 8 hour work day for the equivalent of half theminimum wage instead of the frequently observed 4 hour standard; (b) improved returns on resourcesinvested through training for project administrators in the identification and selection of moreeconomically and socially valuable PAIG sub-project activities; and (c) social welfare gains through thestrict application of the principle of self-targeting of beneficiaries by enforcing the work requirement.For the AFS, social welfare gains are expected through better targeting and service to AFS beneficiaries.Depending on the quality of implementation, economic benefits may be very high. Even a veryconservative estimate of a 5% allocative efficiency gain represents $15.4 million per year, or 385% of(broadly defined) incremental recurrent costs of the component.

2.27 TUP. The public works program (TUP) would provide 20,000 person-years of short-termemployment. Activities undertaken under the TUP component of the proposed project would have twotypes of economic benefits: first, the direct economic value of the sub-projects themselves; and second,the value of the TUP as an alternative job creation program model, which may guide future reforms ofthe PAIG and/or provide the basis for a future social fund. The objectives of this model includepromoting the development of small private enterprises, starting a process of participation bydecentralized, local-level decision-making units, and providing economically and socially valuable servicesin under-served areas. While the number of jobs created will be modest in regard to the number of

1/. In parallel, a Japanese grant will finance (a) the preparation of an implementation manual with guidelines forthe selection, financing, execution, supervision, monitoring/evaluation, and reporting/auditing of sub-projects, aswell as defining the environmental criteria for sub-project selection and (b) a feasibility study on the developmentof a micro-enterprise promotion program.

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unemployed, the program would serve to illustrate the Government's concern for poverty alleviation,through providing a positive Government presence at the local level, and would set the stage for a moreefficient and effective social safety net, which would support a deepened economic adjustment effort.

2.28 Nearly all TUP sub-projects have been preselected and appraised. Selection criteria emphasizethe project's overall objectives, and activities which have been shown, in other countries, to be correlatedwith acceptable economic rates of return.2 An ex-post economic evaluation of TUP activities is expected.

2.29 The expected average monthly cost per job created under the TUP is US$228. Although this isa higher cost per job created than under the PAIG, it is not unreasonable, given the greater economicvalue of TUP sub-projects. At 178% of GDP per capita, the cost per job created under the TUP fitswithin the range found in similar projects around the world (see Annex 8).

III. PROJECT COSTS, FINANCING, PROCUREMENT, AND DISBURSEMENT

Summary of Project Costs

3.1 Total costs of the project are estimated at US$70.4 million equivalent, including US$7.8 millionfor taxes (11% of project costs) and US$7.0 million for contingencies (10%). The foreign exchangecomponent is equivalent to US$17.5 million (28% of project costs net of taxes). Base costs are estimatedat US$63.5 million.

3.2 Contingency Allowances. Physical contingencies are estimated at 10% for civil works and 5%for other project items, for a total of US$5.4 million. Price contingencies have been estimated at US$1.6million. Total contingencies represent 11 % of the base cost. The project has been costed in US$equivalent to 53.7 DA. The annual world-wide rate of price increases of 2.4% has been applied toforeign and local costs for the duration of the project. It is expected that differentials between foreignand local inflation during project implementation would be reflected in an adjustment to the exchangerate.

3.3 Project costs by component are outlined in Table 1. Base costs of the Public Works componentwould be US$55.6 million, representing 88% of total base costs; costs of the Social Safety Net, US$3.0million (5%); and costs of the Social Fund, US$4.1 million (6%). Detailed project cost tables areprovided in Annex.

3.4 Incremental recurrent costs. Incremental recurrent costs under the project would be minimal. Nonew permanent staff would be recruited; therefore the costs incurred would be associated with a limitednumber of equipment, consisting of vehicles, computers and office equipment, under the improvementof the SSN program. Counterpart funds are allocated for the first year of operations in the 1996 financeplan.

2/. An economic analysis of similar roadside maintenance activities undertaken in Tunisia showed returns in excessof 30%. Financial rates of return for the water and sanitation activities are not expected to exceed 10%, but theincremental social benefits in terms of improved health conditions are expected to generate an acceptably higheconomic rate of return.

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Table 1: Project cost summary by component

DA Million US$ Thousand

Local Foreign Total Local Foreign Total

1. Public WorksIA. Road Maintenance 862.6 434.1 1,296.7 16,078.0 8,091.0 24,169.0IB. Agric./Forestry 953.1 50.5 1,003.5 17,764.0 941.0 18,705.0IC. Sewage/Water 587.3 95.0 682.3 10,947.0 1,771.0 12,718.0

Subtotal 2,403.0 579.6 2,982.6 44,789.0 10,803.0 55,591.0

11. Social Safety NetIIA. Mgt. SSN 41.2 71.3 112.6 769.0 1,330.0 2.098.0IIB. Cellules Proximite 13.5 33.5 46.9 251.0 624.0 875.0

Subtotal 54.7 104.8 159.5 1,020.0 1,954.0 2,974.0

III. Social FundIIIA. Community Dev. 53.1 128.8 181.9 990.0 2,400.0 3,390.0IIIB. Preparation 4.5 34.3 38.8 84.0 639.0 723.0

Subtotal 57.6 163.0 220.7 1,074.0 3,039.0 4,113.0

IV. Coordination Unit 21.8 21.7 43.5 407.0 404.0 811.0Subtotal 21.8 21.7 43.5 407.0 404.0 811.0

TOTAL BASELINE COSTS 2,532.2 869.1 3,406.3 47,289.0 16,200.0 63,489.0

Physical Contingencies 237.2 50.9 288.1 4,421.0 948.0 5,370.0Price Contingencies 65.6 18.4 84.1 1,223.0 343.0 1,567.0

TOTAL PROJECT COSTS 2,840.0 938.4 3,778.5 52,934.0 17,491.0 70,425.0

*Totals may not add up due to rounding.

Financing

3.5 The project would be financed by a Bank loan of US$50.0 million equivalent (71% of totalproject costs) and Government contribution of US$20.4 million, which includes US$7.8 million of taxes.The Bank loan would cover 100% of foreign expenditures and 72% of local costs excluding taxes. Thehigh proportion of Bank financing, including local costs, is due to the social importance of the projectas a complement to the SAL as well as the Government's current financial constraints. The Governmentwould finance the balance of local costs and taxes. A PHRD grant from the Japanese government wouldfinance a portion of the preparatory work for the envisaged social fund.

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3.6 The proposed financing plan is summarized in Table 2.

Table 2: Project Financing Plan (in US$ million)

Component IBRD Government Total

Public Works 43.5 18.6 62.1

Social Safety Net 2.8 0.3 3.1

Social Fund 3.0 1.3 4.3

Coordination Unit 0.7 0.2 0.9

Total 50.0 20.4 70.4

Procurement

3.7 Procurement under the project will be in accordance with World Bank Procurement Guidelines(January 1995), using standardized local bidding procedures and contract forms agreed with the Bank.Procurement methods are summarized in Table 3 below. Procurement for works, nearly all of which willbe under the public works component, will be done through National Competitive Bidding (NCB)procedures which are acceptable to the Bank. Algerian government regulations permit simplifiedprocurement procedures for contracts below US$60,000. These procedures have been reviewed andfound acceptable to the Bank. For contracts which are US$60,000 equivalent or below, advertisementwithin the wilayas would be used to ensure the utilization of local manpower. Strong efforts would bemade to identify and encourage local contractors, including advertisements and publicity, coordinationwith other Government agencies, encouraging small enterprises, and organization by the MEAT ofseminars to explain project objectives and procedures. Contracts which are above US$60,000 equivalentwould be awarded through NCB where bidding would be advertised nationally. It is expected that noprequalification or grouping of bids will take place.

3.8 It is expected that over 800 small contracts would be signed with small contractors (tacherons),consisting mainly of road maintenance, small agriculture, and water supply projects, and based onsimplified bidding documents. The agriculture programs for caterpillar removal and "alfa" regenerationwould be implemented on the basis of larger scale contracts above US$60,000 under NCB. All publicworks bidding documents will be designed so as to encourage enterprises to utilize labor intensivemethods and pay unskilled labor no more than the minimum wage.

3.9 With regard to procurement of equipment, contracts above US$300,000 would be awardedthrough ICB. Contracts estimated to cost below US$300,000 would be purchased through internationalshopping on the basis of three price quotations from suppliers.

3.10 Consultants needed for studies and technical assistance would be selected in accordance with theBank's Guidelines on the Use of Consultants. For local consultants, simplified consultant contracts willbe used.

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Table 3: Procurement arrangements (in US$ million)

Goods and Services Amount by Procurement Method *

ICB NCB International Other N.B.F. Totalshopping

Works - 64.2 - - - 64.2

(44.9) (44.9)

Gosds 2.0 1.5 - - 3.5(1.5) (1. 1) (2.6)

Consuluicies - - - 2.6 2.6

(2.5) (2.5)

Miscellaneous - - - 0.1 0.1

Total cost 2.0 64.2 1.5 2.6 0.1 70.4IBRD financing (1.5) (44.9) (1.1) (2.5) (-) (50.0)

* Totals include taxes and contingencies. Amounts in parentheses show allocations from Loan proceeds. NCB =National competitive bidding. NBF = Not Bank Financed. Consulting services shall be procured in accordancewith Bank guidelines.

3.11 The following Bank prior review thresholds will apply:

(a) Works: For public works, all contracts greater than US$300,000, and the first two contracts foreach sector, i.e. road maintenance, agriculture/forestry, and sewage/water, independent of thevalue, will be subject to the Bank's prior review. For road maintenance and sewage/waterworks, as the value of contracts is expected to be less than US$60,000 equivalent, and nosubsequent prior review is expected. For agriculture/forestry works, these contracts are expectedto be larger. One in five contracts would be subject to a post review. Because of the small sizeof most contracts, about 25 % of the total value of sub-contracts would be subject to prior review.

b) Equipment: Contracts to be awarded through ICB, estimated to cost the equivalent ofUS$300,000 or more, shall be subject to prior review. It is estimated that US$1.8 million ofequipment would be procured through ICB, and US$0.8 million through international shopping.About 70% of the value of equipment contracts are expected to be subject to prior review.

(c) Consultant services: Prior review will be required for contracts of US$100,000 or more for firmsand US$50,000 for individuals. For contracts estimated to cost less than these amounts andexcept for the employment of single source selected firms or of contracts judged to be critical tothe project, the Bank's prior review would be limited to terms of reference only. Procurement

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documentation for all contracts for the employment of individuals or single source selection offirms for studies and overall project monitoring would be subject to prior review by the Bank.

Disbursement

3.12 While most of the public works programs are expected to be completed in one year, the socialsafety net components will develop more slowly over a two and a half year period. Taking intoaccount that in Algeria there is as much as a year's lag in disbursement, the project would be completedby June 30, 1999 and the closing date would be December 31, 1999. The proposed loan would bedisbursed according to the categories and schedule shown in Tables 4 and 5.

Table 4: Disbursement by Category

Category Amount (USS Million) Percentage of expenditures to be financed

1: Works 45.0 70%

2: Goods 2.6 100% of foreign expenditures, 100% of localexpenditures (ex-factory cost) and 85% of localexpenditures for other items procured locally

3: Consultants' 1.9 100%services, training andstudies

Unallocated 0.5

Total 50.0

Table 5: Estimated Disbursement Schedule (in US$ million)

Fiscal Year 1996 1997 1998 1999 2000(July-June) l

Annual 0.0 5.0 15.0 20.0 10.0

Cumulative - 5.0 20.0 40.0 50.0

3.13 All withdrawals from the loan account will be fully documented except for expenditures relatingto contract for goods and works costing less than $300,000, which will be eligible for reimbursement onthe basis of Statement of Expenditures (SOE). SOE would also be used for consultant services contractscosting less than $100,000 for consulting firms and $50,000 equivalent for individual consultants.Documentation for SOE will be retained at the local levels and will be made available for review byauditors and Bank's supervision mission.

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3.14 To facilitate disbursements, the Government would establish, maintain and operate on terms andconditions satisfactory to the Bank, a US dollar Special Account (SA) at the Central Bank of Algeria forup to US$5 million. This amount is estimated to represent about four months of average project needs.When the Loan becomes effective, the Borrower may request an initial deposit to the Special Accountnot exceeding US$2.5 million. Additional deposit(s) may be requested when the amounts committedand/or disbursed under the Loan will reach US$10 million. The SA will be replenished by submittingwithdrawal applications to the Bank on a monthly basis, or whenever the account is diminished by one-third, whichever is sooner. Replenishment applications submitted against the SA will include monthlybank statements showing account activity since the last application, a reconciliation statement andsupporting documents as required by the Bank.

3.15 The Government has provided sustained efforts to ensure the speedy preparation of this project.Retroactive financing up to 10% of the loan amount will therefore be provided for expenses incurred afterFebruary 15, 1996, to enable quick start-up of TUP activities and efficient functioning of the project.

IV. PROJECT MANAGEMENT AND IMPLEMENTATION

Project Management

4.1 A Project Coordination Unit (PCU) ("Cellule de Gestion du Projet"), established by Ministerialdecision, is located at the level of the cabinet of the MTPS. The location of the PCU at the level of thecabinet of the minister of the MTPS will ensure a high political profile and access to high Governmentofficials. An inter-ministerial committee composed of representatives of the Ministries of Labor,Agriculture, Public Works, Interior and of the Prime Ministry will meet regularly to coordinate and liaisewith the head of the PCU. The purpose of the PCU would be to coordinate and ensure implementationat the wilaya, local and sectoral levels, link with the financing agencies, coordinate policies andregulations among different ministries and agencies, identify and resolve implementation problems,prepare the establishment of a Social Fund, and ensure that the project is able to bypass, to the extentpossible, any bureaucratic procedures which might impede rapid implementation.

4.2 The PCU would include three full-time high level staff--a chief, an implementation specialist, anda finance and procurement specialist. The specific activities and terms of reference of each of thesespecialists have been agreed upon. Their experience, training, and qualifications would be acceptable tothe Bank. The list of names of the main staff along with their qualification and experience will betransmitted to the Bank at the latest end of May 1996. Until the PCU becomes operational, MTPS staffand consultants will continue to manage the project.

Implementation

4.3 The individual wilayas would be responsible for implementing the TUP programs. Under the1996 finance law, a Special Treasury Fund (STF) has been established to be managed by the MTPS.This special fund permits advance payments from three to six months of all TUP activities, which are sentto the responsible official in the individual wilayas. Payments to the wilayas will be authorized on thebasis of expected activities over the next three to six months. Over the past five years the MTPS hasmanaged a similar procedure in its program for youth employment. This program has permitted paymentwithin two weeks of completion of small contracts and one week after completion of force account works.

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4.4 The wilaya representatives of the MTPS would have overall responsibility for all programs. Atthe technical level, agriculture programs would be managed by the representative of the Ministry ofAgriculture and Fisheries (MAP), and road and water programs by the representative of the Ministriesof Equipment and Land Use Planning (MEAT) and Interior and Environment (MICLE). A condition ofeffectiveness would be the signing of agreements between the MTPS, MEAT, MAP and MICLE forimplementing the project. These arrangements should continue and be acceptable to the Bank for theduration of the project.

4.5 The PCU would be assisted in its work by a private consulting firm (or firms). This firm wouldbe responsible for monitoring implementation of the TUP components of the project, eventually usinga computerized monitoring system to ensure rapid transmission of data. On the basis of the results ofits monitoring activities, and on a regular basis, the firm would recommend to the PCU means ofimproving project implementation. This assistance to the PCU will be in place at the latest September30, 1996. A short list of firms has been sent to the Bank. It is expected that the local representatives ofMEAT, MAP and MICLE would provide on site supervision for TUP programs.

4.6 To facilitate implementation, the Government has established a Special Treasury Fund (STF).This fund, managed by MTPS, bypasses normal budgeting procedures and permits advance payments ofthrec to six months to Wilayas. In addition, the provision of documentation of completed works wouldbe simiplified. For payments, the "secondary" agents would complete a form stating that work has beencompleted at a certain value. This form would be sent to the Wilaya representative of the MTPS and thento the PCU and would serve as justification for replenishing the revolving fund at the local level andequally a, the national level. Contract documents would remain at the local level but would be subjectto audit.

4.7 The PCU would implement the social safety net components of the project, in coordination withthe appropriate agencies within the MTPS. It is expected that the PCU would engage consultants toundertake preparation of the proposed Social Fund.

Supervision, Monitoring, and Evaluation

4.8 Status of project preparation. Nearly all public works programs have been identified and allprocurement and disbursement procedures confirmed. The MEAT has already initiated its requests forbids. A number of studies are already underway. Training plans and terms-of-reference for nearly allstudies have been agreed upon.

4.9 Project Monitoring Indicators. A list of program and project indicators by which both the processand impact of the proposed operations can be monitored has been agreed upon. Process indicatorsinclude: socio-economic status of program beneficiaries, number of employed recruited, managementcapacity of sub-contractors, use of labor intensive methods, implementation progress, productivity, timingand processes for implementation, procurement, and payment. As noted above, a private firm will beengaged to gather these indicators in a timely manner. Adequate support to the PCU for supervision andmonitoring, acceptable to the Bank, would continue for the duration of the project.

4.10 Project Implementation Reviews. Because of the importance of timely execution of the project,the PCU will prepare, on a semester basis, reports on progress in achieving project goals. In particularthe report will (i) describe progress in accordance with the agreed upon monitoring indicators, including

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procurement and disbursement; (ii) indicate specific problems in terms of management and recommendedimprovements; (iii) will define activities for the following quarter. The Bank and the Government willreview progress, including the functioning of the PCU, every six months. A mid-term review of projectimplementation will be undertaken, at the latest by December 31, 1997. A Project Completion Reportwill be completed at the end of the project on the achievement of overall project objectives, includingcosts, disbursement, and an evaluation of the roles of the Bank and the Government. A plan for thefuture operation of the project will also be prepared.

4.11 Audits. Audited accounts and reports by independent auditors would be submitted to IBRD nolater than nine months after the end of each fiscal year. The auditor's report on project expenditureswould include an examination of the documentation substantiating expenditures and a verification that (a)project accounts permit identification of all receipts and payments; (b) goods had been received or workperformed; (c) payments had been made; (d) all expenditures had been legitimate; and (e) the SpecialAccount has been used appropriately, along with an opinion on the reliability of the SOE procedures andon whether the goods and services acquired under the project were being utilized in accordance with itsobjectives. The auditors would also prepare the audit report including the management letter revealingpossible shortcomings in the staffing, accounting system and efficiency of the internal control procedures.Assurances on the foregoing will be obtained during negotiations.

V. BENEFITS AND RISKSProject Benefits

5.1 The primary benefit of this project is improved income transfer mechanisms to support Algeria'svulnerable population groups during a period of economic reform. The project will help improvetargeting and management of existing transfer programs as well as create a pilot public works programand a pilot social fund using innovative design and implementation mechanisms to support future programreform. As such, the proposed project will have a substantial impact on the efficiency of resource usein public transfer programs, with minimal incremental recurrent cost implications. Additional projectbenefits include promoting the development of small private enterprises, initiating a practice ofdecentralized, local-level participation in both decision making and implementation (both withingovernment and within communities), and providing economically and socially valuable services in under-served areas. This project, although modest in scope, will set the stage for the development of a moreefficient and effective social safety net, which would support a deepened economic adjustment effort.

Project Risks

5.2 In spite of modest objectives, project risks are significant. Any diminished ability of the Algerianstate to project its authority at local levels will jeopardize implementation of a locally based public worksprogram. In the past, the Government has had difficulty in maintaining macro economic reforms, andthere is no certainty that this would not recur, which could undermine the sustainability of programrecurrent finance commitments. The inability of Bank staff and most foreign consultants to visit thecountry (beyond short highly controlled visits to Algiers) because of the security situation means that wemay be unaware of key elements or issues which could compromise effective implementation. Thisproblem will be partially overcome through the recruitment of Algerian and regional consultants tomanage supervision. The multi-sectoral (and hence, multi-ministerial) nature of the project increases itscomplexity. The location of the implementation unit high enough within MTPS to handle the

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coordination issues smoothly. the interministerial agreement, and simplified procurement anddisbursement, should reduce these complications to a minimum. Coordination within the Bank will beequally important. To that end, staff from the sectoral divisions have been closely involved in thetechnical discussions and would be expected to supervise project components.

Environmental Rating

5.3 The small scale public works activities to be financed by the project will have no negativeenvironmental impact. The agricultural activities are designed to have a positive environmental impact.The other activities are environmentally neutral. The project raises no international water rights issuesnor does it involve resettlement of local population. Activities to prepare a future social fund project willinclude the development of environmental guidelines and checklists for each type of sub-projectcontemplated for future social fund finance. While the project is coded as "B," no study in advance ofnegotiations was required.

Program Objective Category

5.4 The project would support a program of targeted interventions through reforms of the country'spoverty reduction strategy. The TUP program and the pilot social fund components are pilot programsdesigned to effectively target the unemployed and poor with temporary job creation. The reforms of theexisting social safety net programs (AFS, PAIG and Community Social Service Units) aim to improvetargeting of the poor under these programs and to enhance service quality for the poor. The studiesincluded in this project are designed to prepare a future social fund project that would be a demand-drivenand participatory vehicle to deliver temporary employment opportunities and possibly infrastructureservices to the poor. The reforms to AFS eligibility criteria target poor female heads of household andthe strengthening of the Community Social Service Units, will be of greatest benefit to women andchildren.

VI. AGREEMENTS TO BE REACHED AND RECOMMENDATIONS

6.1 A condition of loan effectiveness will be signature of a framework agreement between MTPS andMEAT, MAP and MICLE. This agreement must be maintained during the life of the project (para. 4.4).

6.2 The following are conditions and assurances related to various project components:

(a) to strengthen social assistance programs, a study to establish an MIS and an investmentprogram to computerize the management of AFS/PAIG, including a plan for acquisitionof equipment and training, would be realized at the latest, December 31, 1996, andwould be acceptable to the Bank (para. 2.17);

(b) for the community social service units, the first two proposals for strengthening localunits would be reviewed by the Bank (para. 2.22);

(c) for the pilot social fund, a condition of disbursement would be completion of anassessment of needs of local communities, preparation of an investment plan and an

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implementation plan, all acceptable to the Bank (para. 2.24); and

(d) for the TUP, the first two contracts for roads, agriculture, and water would be reviewedby the Bank (para. 3.11 [a]).

6.3 Other conditions and assurances include the following:

(a) an autonomous agency for social development would be established and its internal rulesof operations defined by March 31, 1997 (para. 2.25);

(b) the PCU would be maintained within MTPS with professional staffing in adequatenumber, whose qualifications and experience shall be acceptable to the Bank (para. 4.2),and arrangements acceptable to the Bank for assisting it in supervision and monitoringof TUP components will be in place by September 30, 1996 (para 4.5).

(c) a mid-term review will be undertaken by December 31, 1997 (para. 4. 10);

6.4 On the basis of above, the project provides a suitable basis for a loan of US$50 million to theGovernment of Algeria.

Annex 1Page 1 of 3

Description of the Social Protection System

1. The Algerian social protection system is comprised of both contributive and non-contributivecomponents. The contributive component encompasses the social insurance (SecuriteSociale) and providescash benefits to its affiliates for contingencies such as retirement, disability and survivors' pensions, andhealth care. Moreover, in July 1994, a new unemployment insurance scheme was introduced. Thisscheme is financed through an entry fee and payroll contributions. The non-contributive componentcomprises the implicit and explicit consumer price subsidies, family benefits, and the social assistanceprograms.

2. Social Insurance System:' The social security system is the contributive component of the socialprotection system and is managed by four public funds that are the source of all social insurance benefits(CNAS, CNR, CASNOS, and CNAC)2. According to existing legislation, all employers and workers areobligated to subscribe to the social insurance system. Total affiliation is about 5 million people.However, the number of affiliated workers represents only about 60% of the active labor force.Moreover, over 85% of agricultural employees and about 80% of independent workers (notablyconcentrated in agriculture) are not affiliated in practice.

3. The principal issue facing the social insurance system is its precarious financial status. Theproblems are mainly the result of: (i) the lack of a transparent actuarial link between benefits andcontributions, which creates disincentives to join; and (ii) the use of the system's resources to pursuesocial objectives partly or totally unrelated to social insurance. The financing of health care coverage fornon-affiliates is a clear example of this problem. Moreover, the reserves have been used to finance socialdevelopment projects and placed in Treasury bonds at negative real rates of return. The weak linkbetween contributions and benefits provides a strong incentive for employers in the formal sector andtheir employees to underpay contributions, and for informal activities to remain outside the system. Thislowers contributions to the social security system, and hampers the expansion of its contributor basewhich is already constrained by widespread unemployment. As a result, contribution rates are relativelyhigh, which reinforces the incentives to underpay and evade. Consequently the imbalances pose a riskto the system's financial viability.

4. Workers and employers have to contribute the equivalent of 31.5% of the wage bill to the socialsecurity funds. Although existing contribution rates are comparable to the average rates in the WestemEuropean countries (i.e.. 25-30%), this does not necessarily mean that such rates are sustainable underpresent conditions in Algeria. The progressive aging of the work force will likely increase payroll taxes

1/ See: "The Democratic and Popular Republic of Algeria - CEM: The Transition to a Market Economy";World Bank, report#12048-AL, May 1994.

2/ The Caisse Nationale des Assurances Sociales (CNAS) insures salaried workers in the agricultural and non-agricultural private and public sectors, as well as students and civil servants. CNAS provides healthcoverage, medical leave benefits, and disability benefits for work-related injuries. The Caisse Nationaledes Retraites (CNR) is responsible for paying pension benefits to those covered bv CNAS. CNR does notcollect contributions but receives a share (fixed by decree) of CNAS contributions. The CASNOS is theanalogue of the CNAS and CNR combined for non-salaried workers (i.e., independent). The CaisseNationale d'Assurance Ch6mage (CNAC) was introduced in 1994 and provides the unemploymentinsurance benefit to the affiliates.

Annex 1Page 2 of 3

in the future. Moreover high labor costs may discourage job creation at a time when unemployment ischronically high (roughly 25% of the labor force). Therefore correcting the structural sources of thefinancial imbalances of the social insurance system is a more sustainable alternative than increasingcontribution rates.

5. Consumer price subsidies: Faced with an increasing budgetary constraint, the Governmentdecided to gradually eliminate general price subsidies on consumer products, and introduced in 1992 asystem of cash transfers (see below) to compensate for the increase in consumer prices. By June 1992subsidies had been completely eliminated on all foodstuffs except for flour for bread, semolina, and milk.As a result, food subsidies dropped from almost 5% of GDP in 1991 to 2.3% in 1992. However,subsequent increases in the import cost of these commodities. partly due to exchange rate depreciation,raised subsidies to 2.5 % of GDP in 1993. Subsidies on energy products and basic public services arosemainly from the fact that consumer prices are established below production costs. Since 1990 there hasbeen a gradual price adjustment for gasoline, diesel fuel, electricity and nacural gas. In March 1994,prices for the remaining subsidized food products were adjusted by 41%, and prices for petroleumderivates by 50%.

6. Social Assistance Programs: The social assistance programs attempt to alleviate poverty throughtwo types of schemes. One is a svstem of direct transfers, in kind and in cash, to the traditionally definedhard core poor unable to support themselves. Targeted on the basis of indicators, these programs include(i) financial aid to the 100% handicapped and the elderly poor (DA 2.100 per month); (ii) pensionbenefits, separate from the insurance schemes, to war veterans (moudjahidines) and members of theirfamilies; (iii) scholarships for children of less wealthy families; and (iv) cantines scolaires that channelfood aid to children in schools located in geographically disadvantaged areas, predominantly in the south.The level of budgetary expenditures to finance these programs amounted to about 2 % of GDP in 1994.

7. The other is a safetv net, new cash transfer program introduced in 1992. to compensate vulnerablegroups for food subsidies reduction and to protect the most vulnerable groups of the population from theshort-term costs of adjustment. There were four cash benefits with an overall budgetary outlay of DA24 billion (about 2.2% of GDP) in 1993, benefiting around 15 million individuals (more than 60% of thepopulation). These programs included: (i) Indemnite complementaire d'allocarion farniliale (ICAF), acomplementary monthly family allowance (per child) for all salaried workers affiliated with the socialinsurance system; (ii) IndemniW pour salaire unique (IPSU), for salaried workers earning less than 7,000dinars per month and whose spouse is not working; (iii) Indemnite cornplnmenraire de pension et deretraite (ICPR), paid to every retiree who is a household head disabled in a work-related accident, or awar veteran on a pension less than 7,000 dinars per month. In addition, in order to qualify, the spousemust have no source of income: and finally (iv) 1ndemnites ailr categories sociales sans revenus (ICSR).In order to qualify for this benefit the household head had to certify that neither he/she. or his/her spouse,had any source of income.

8. However, the new system was inefficient and poorly targeted due to inadequate means-testing,and about 25% of the population were considered "without income" and benefitted from cash transfers.In 1994/95, the authorities, recognizing that the targeting of the cash payment scheme, introduced in1992. needed to be improved, modified once again che safety net prograrms. The first three cash benefits(i.e. the ICAF, the IPSU and the ICPR) were integrated into the salarv structure or into existing socialbenefits under the social security system. Moreover, to substitute for the generalized subsidies, whichwere gradually being eliminated, the untargeted cash allowance paid to persons without income (ICSR)was replaced by two new schemes. The first, is the cash transfers providing financial support to thoseunable to work (Allocarion ForJaitaire de SolidariWe - AFS). The second, is the public work program

Annex 1Page 3 of 3

providing compensation to those able to work (Indetnnite d'Acrivites d'Interet General - IAIG or PAIG).These two schemes, covering about 15% of the population (or 4.3 million) in 1995, and costing about0.8% of GDP, are apparently more efficient and better targeted than the allowance paid to personswithout income. The combination of direct transfers (AFS) to the unemployable and employment scheme(IAIG) provides the potential for a comprehensible safety net for the poor.

9. AFS gives allowances to those unable to work and intends to target those who are missed by othersocial assistance programs: (i) the elderly without pensions or sources of income; and (ii) the handicappedwho are not 100% incapacitated (the 100% handicapped already receive direct cash transfers as mentionedabove) but who are unable to work and have no income. Targeted beneficiaries - pensioners (elderly)and the disabled - receive DA 600 per month per capita, plus DA 120 per dependent up to a maximumof three. In 1995, about 453 thousand heads of households participated in the program, of which 38%were female, and the number of dependents totals 384 thousand. Out of the total participants about 84%are elderly and the remaining 16% are handicapped. Based on a preliminary study of the program themain drawbacks are the following. First, the payment frequency is inadequate for those who are reallywithout any sources of income. Although the amount of the cash transfers is calculated monthly, inpractice the payments are allocated on a quarterly basis. Second, the narrow scope of the eligibilitycriteria, by definition, excludes female household heads unable to work and without sources of income,but who are below 60 years of age. Finally, the cash transfers seem to be less than subsistence due tothe budgetary constraints.

10. IAIG is an income-generation program that requires some obligation from the recipient, such asthe requirement to work. It intends to provide short term employment, in various community basedactivities, to those able to work and willing to be paid at half the minimum wage. Overall about 26.305work sites had been opened with 492 thousand participants, of which 27% are female. The participantis hired at DA 2,100 per month (DA 97 per day), which is half the minimum wage. Based on apreliminary study, the program has important flaws. It has been inefficient in targeting the poor becauseof a lack of adequate self-targeting mechanisms. The apparent low level of remuneration was designedto ensure self-targeting of those who have a lower opportunity cost. But in practice. because of lenienttime requirements (4 hour working day), the level of compensation is in effect equivalent to the minimumwage; therefore the system fails to exclude those who are not poor and have other activities in theinformal sector. As a result, instead of providing income support to the able-bodied poor withoutalternative employment, this program risks to provide permanent jobs for the unemployed youth.Currently about 54% of the participants are between 18 and 30 years of age. The selection of the worksite is also not based on geographical targeting and the kind of activities created are not necessarily laborintensive, requiring hard work. Finally the payments are monthly instead of being by task or daily.

11. While preliminary evidence indicates that the new safety net system is functioning reasonablybetter than the previous broadly targeted system, it suffers from difficulties that typically arise in targetingassistancc to the poor using means tests and specific eligibility criteria. Thus there are several importantissues to be addressed during the transition in order to improve the targeting of the new system. Themain issues are: (i) deficiencies in the definition of poverty, lack of unified poverty record system, andinadequate administrative coordination between ministries (e.g., Labor, Education. Health) for allocatingthe transfers to Lhe poor which may have led to overlaps between programs and may have failed to reachall the needy groups; (ii) inadequate implementation of selection criteria which in practice are appliedsubjectively; and (iii) cumbersome administrative procedures which may have led to uneven delivery oftransfers across wilayates and delays in payments. The SAL project, will emphasize on different meansto improve the efficiencies of these schemes.

Annex 2Page 1 of 6

Road Maintenance Component

Project Description

1. Regional roads (Chemins de Wilaya, CW) in 15 Wilayas' and rural roads (Chemins communaux,CC) in 14 other Wilayas2 have been designated by the Directorate of Road Operations and Maintenance(DEER) at the Ministry of Public Works and Regional Planning (MEAT) as part of a pilot project todetermine a maintenance strategy and define a three-year maintenance program3. This project is notfunded under the Sixth Highway Project, which is concerned exclusively with national roads (RoutesNationales, RN). The Wilayas and the municipalities that would participate in the pilot project werechosen according to the following criteria:

- Wilayas with highest unemployment levels in the last survey of 1987: unemployment is nowgeneralized throughout the country, but there is no recent survey;

- Wilayas where road maintenance was particularly neglected during the past five years, in theHauts Plateaux particularly;

- Wilayas with the lowest levels of security problems. and where it would be relatively easy tomobilize road maintenance crews: these are generally rural Wilayas, far from the major cities;

- 101 communes had already been identified in preparing the Sixth Highway Project, and 54 otherconmnunes were identified by local staff of regional directorate (DTP) of MEAT.

2. The pilot project will consist in performing current and routine maintenance activities over 6,700km of paved regional roads (CW), and 4,500 km of paved rural roads (CC) which will create theequivalent of 62,000 men-months of work over a period of 6 months. A complementary program ofabout 2000 km is also included. All the works are relatively simple, and they do not require any specifictraining nor previous experience: minor repairs to concrete appurtenances and rock linings would requirethe presence of one specialized worker, usually a stoneworker, within an 8-men crew. The following isa list of tasks to be performed on both categories of roads, as determined by DEER:

ditch cleaning and recalibrating to a depth at least equal to the height of the pavement structure;

1/ Ain Defla, Bordj Bou Arreridj, Djelfa, El-Bayadh, El Oued, Guelma, Khenchla, Laghouat, Naama, Oum-El-Bouaghi, Saida. Sidi Bel Abbes, Tebessa, Tiaret and Tissemsilt.

2/ Batna, Bejaia, Bouira, Cilef. Mascara, Medea, Mila, Mostaganem, M'Sila, Setif, Skikda, Souk Ahras, TiziOuzou and Tlemcen.

3/ Algeria's Sixth Highway Project, Staff Appraisal Report, Annex 10, January 1995

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iefection of shoulders, with construction of small lateral channels to evacuate the surface waterfrom the pavement;

spreading of discarded materials;

cleaning of culverts and sealing of small cracks in the concrete;

repairs to concrete walls; and

rock linings.

Proiect Costs

3. Project costs have been estimated based on the following assumptions:

- average quantities per kilometer for various tasks have been estimated by DEER, as well as thetime it would take an 8-men crew to perform the works;

- total lengths have been determined based on available data for CW and CC in each Wilaya;

- productivity rates of a road crew have been estimated by DEER based on current practice forsimilar works;

- an 8-men crew would consist of 7 unqualified workers who will be paid the minimum wages(currently DA 4,000/month) and one specialized worker who will be paid 1.5 times the minimumwages; and

- all works are to be done through local competitive bidding.

In addition to salaries, costs include the location of a truck, including a driver, for every two 8-mencrews, and buying small equipment (wheelbarrows, shovels, picks, etc.) and material (cement and quarryrocks for lining of ditches). The salary component is estimated at 54% of total direct costs for the CW,and at 56% for the CC. The following table illustrates the total direct costs of the pilot project:

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Table 1: Total Direct Costs of the Pilot Project 4

Maintenance of Regional (CW) and Rural (CC) Roads(based on 16-men crews)

Average Total Costs TLength, Cost, Men-

krn DA/krn mDillin mUilon months_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ D A U SS _ _ _

Regional Roads (Chemins de Wilava) .

Cleaning: roads 6,705 29,991 201.1 4.0 20,968

Cleaning: culverts, etc. 6.705 29.125 195.3 3.9 13,166

Sub Total 6.705 59,116 396.4 7.9 34,135

Rural Roads (Chemins Communaux)

Cleaning: roads 4.460 38.845 173.2 3.5 18,164

Cleaning: culverts, etc. 4.460 31.145 138.9 2.8 9,731

Sub Total 4,460 69,990 312.2 6.2 27,895

TOTAL, excluding overhead, profit 11,165 63,460 708.5 14.2 62,030and taxes I _ __ I_ I__ _ _ I__ _ _ I___ __

4. The following table illustrates total project costs, including the contractor's overhead and profit,design and supervision of the works, and taxes:

Table 2: Total Cost Estimates

Regional Roads Rural Roads Total Pilot Project(CW) (CC)

DA US$ DA USS DA USSmillion million million million million million

Cost of Works 396.4 7.9 312.2 6.2 744.4 14.9

Overhead and Profit 79.3 1.6 62.4 1.2 148.8 2.8

Supervision 28.5 0.6 22.5 0.4 52.1 1.0

Total before taxes 529.2 10.6 417.1 8.2 945.3 18.9

Taxes 68.8 1.4 54.2 1.1 122.9 2.5

TOTAL 598.0 12.0 471.3 9.3 1,068.2 21.4

4/ An additional program of approximately S5.0 million in about 3 wilayas will be defined jointly by bothparties during project implementation.

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Environmental Impacts

5. The planned maintenance project will have a minor impact on the environrment, since it does notmodify in any substantial way the conditions prevalent before the beginning of the works. Nevertheless,precautions will have to be taken in the following areas:

- Soils Erosion: Manual weeding and cleaning of ditches, especially in mountainous areas, maycreate premature erosion of the ditches by increasing the speed of the pavement runoff water.In those conditions, small weirs or a lining of medium size quarry rocks may reduce the speedwithin an acceptable range.

- Air and Water Pollution, Noise, and other Nuisances: The lack of new construction and thelimited scope of the works explain why the impact on air or water quality is close to null, andthat no noise or other nuisances will be generated by the works.

- Disposal of Discarded Material: Ditches and shoulder cleaning will require the disposal ofrejected materials: it will be necessary to spread these materials outside of the ditches, close tothe road. As a rule, they would have a high vegetal content, with no adverse effect on theenvironment.

* Traffic Safetv: Works will be carried out on low traffic volume roads. Nevertheless, thecontractors will be asked to follow the rules described in the MEAT's road maintenancehandbook regarding signalization of works areas.

In addition, a half-day training session will be organized on each new project, to acquaint contractors andworkers alike with environmental problems.

Small Contractors (Tacherons)

6. There are very few small contractors in Algeria, particularly in the public works sector whereall maintenance is presently done by force account. However there is a tradition of small contractors inthe housing industry, and in agriculture. Tacherons as they are called in Algeria are usually specializedworkers who will hire nonspecialized daily laborers on a temporary basis, according to the needs of theproject. A recent survey done by DEER at the instigation of the Bank has shown that there are indeedtacherons in each Wilaya that was selected for the pilot program, and that local competitive bidding couldbe organized for all TUP projects.

7. In the Fifth Highway Project (1988-1994), two pilot projects have demonstrated the effectivenessof contracting out maintenance works for national roads (RN): in the last year of the project, maintenanceby contracts was extended to all the Wilayas, in view of the success of the previous stages. However,one should note that most of the low bidders who got contracts were publicly owned enterprises. In mostcases, there were only 2- or 3 bidders from the region where the works were to be performed, althoughthe bidding documents were made available to any public works enterprise across the country, whetherit was publicly or privately owned.

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8. The development of small contractors in the public works sector will require the followingconditions:

- large diffusion in the municipalities of information on upcoming contracts: DEER is to preparethe documents to that effect;

- invitation to small contractors to register with the municipality or the Wilaya, since somecontracts will be signed with the municipalities (public works projects), and others with theWilaya (roads projects);

- cocrdination with the Ministry of Labor and Social Protection (MTPS), which already has aprogram to promote small contractors, and with local associations such as the Young UnemployedAssociation;

- organization of seminars to explain to small contractors the contents of the projects and theobjectives of MEAT.

9. There will be more competition if projects are limited in scope, because of the limited financialcapabilities of most small contractors. One invitation to tender could include six or seven lots, with thepossibility that a contractor bids for any one or any combination of the lots. Assuming 16-men crews,contracts limited to six months, and the productivity rates and quantities described above, there wouldbe approximately 340 contracts with a 20 km average length and worth around DA 1.6 million each forregional roads (CW), and 300 contracts with a 15 km average length and worth around DA 1.4 millioneach for rural roads (CC). In addition, any public project whose cost is less than DA 3.0 million is notsubject to cumbersome local procurement procedures, hence the advantage of limiting the project scopeso that it fits within this limit.

10. Experience shows that payment delays - a common occurrence in developing countries - enticesmall contractors to prefer high material content rather than high intensity labor content in public works,which is contrary to the objectives of the safety net protection project. Small contractors do not haveready access to local bank credit, and they may not want to press the Government for interest chargeson overdue accounts for fear of being blacklisted. In addition, small contractors can delay payments totheir suppliers, but cannot do the same with temporary workers, without running the risk of having tosuspend the works. The following schedule should help in defining a faster payment cycle:

Annex 2Page 6 of 6

a. Confirmation of works done during the period by the foremen or 0the section chiefs, for each contract.

b. Approval of the report by the area manager. 1 week

c. Approval by the Director of Public Works at the Wilaya level. 3 days

d. Confirmation by the Treasurer of the Wilaya that the 10 daysexpenditures can be made.

e. Payment to the contractor. 1 week

Total 4 weeks

Contractual Documents

1l. The contract specifications have been prepared. The project preparation cycle is the following(for projects whose costs are less than DA 3.0 million):

a. Preparation of bidding documents by the DTP for maintenance 1 monthof CW and CC in their subdivision.

b. Open local bidding, with advance public notice in the newspapers 1 monthand in town halls.

c. Bidding period, including possibly an information meeting for all 3 weeksbidders.

d. Public opening of the bids at the time and place where they are 0due.

e. Evaluation of the bids and selection of a contractor by DTP, 4 weeksconfirmation by MTPS, and signature by the Administrationdelegate.

f. Notification of contract to contractor. 1 day

Total 16 weeks

For larger projects, whose costs exceed DA 3.0 million, the total delay has to be increased by a minimumof 12 weeks.

12. The small contractors will sign a contract with the Wilaya DTP, and the area manager willsupervise the works and control their execution, with the possibility that a consultant be appointed by theDTP to help with the supervision and control.

Annex 3Page I of I

The Water Supply and Sewerage Component

Proiect Description

1. With the aim of creating jobs through the implementation of useful and beneficiary works, theproposed water and sewerage component would be implemented in 17 wilayate with the current highestrate of unemployment. A major concern in the water and sewerage sector has always been poormaintenance of the works. While the Government has made large investments in the sector, the utilitieshave not had the necessary resources to properly maintain the Government-financed installations. Theproposed project would seek to assist the utilities in improving and rehabilitating their water supply andsewerage assets.

2. The water supply and sewerage component would include three sub-components: The first onewould cover the detection and repair of leaks from water supply pipelines installed in the selectedwilayate. At present, about 50 % of potable water produced in these wilayate is lost through leaks in thepipes. Under the SSN project, unskilled laborers would be employed to survey these leaks. and touncover the pipeline areas where they are leaking. Leak repairs would be carried out by specialized laborof the utilities. After the pipelines have been repaired., the unskilled laborers would fill in the trenches.

3. Other items of the water supply sub-component would consist of collecting water fromunderground springs. These works would be executed in three counties located in the wilaya of Mila.Also, under this component, a number of water reservoirs in the wilaya of Setif would be dredged andrepaired. Steel reservoirs in the wilaya of Tizi-Ouzou would be sand-blasted and repainted. It isexpected that these rehabilitation works would allow to extend substantially the useful life of theseinfrastructures.

4. The second sub-component would include the cleaning and repair of sewers in 15 wilayas. Underthe proposed SSN project, unskilled laborers would manually remove settled materials from these sewers.The same laborers would also clean the outlets of the main sewage interceptors in the concerned wilayas.Manual dredging would also be carried out at the junctions of the interceptors with the receiving waterbodies.

5. The third sub-component would cover the provision of public utilities, essentially water supplyand sewerage, in 12 sites located in the wilayate of Batna and Djelfa. Basically, the work would consistof laying pipes for water supply and sewerage services. This would be performed manually by unskilledlaborers.

Proiect Cost

6. The cost of the water supply and sewerage component, including construction supervision andtaxes, is estimated at DA 892.6 millions. Labor would account for DA 564.9 million, or about 63% ofthe total cost. Equipment and material supply would account for onlv 11 % of the total cost, illustratingthe labor-intensive aspects of the proposed works. Taxes would amount to 13% of the total investments.Construction supervision is estimated to account for 8% of the total project cost.Job Creation

7. It is estimated that the proposed water supply and sewerage component would create about 9.134jobs over a period of six months. for a total of 54,804 man-months. The cost per job creation would beabout DA 97,730.

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Agricultural Sector Component

1. Bank Strategy on Rural Employment. Reforms that have been initiated essentially aim atreducing the role of the public sector in economic activity. In 1990, public employment in Algeria,covering both the Government (public service) and the public enterprises made up 57% of totalemployment; 50% of male employment; and 85% of female employment. Austerity measures are alreadyhaving an effect in reducing public service employment and similar results would be expected as aconsequence of privatization and restructuring of public enterprises. These consequences of economicreform and adjustment in increasing unemployment in the short to medium term are compounded by thepolitical conditions. Indications are that there is a noticeable exodus from urban areas with highunemployment and security problems, towards rural areas. These developments exacerbate the employmentquestion in rural areas.

2. The Bank aims to address these evolving issues in a two phase approach. In the short term, inresponse to the urgency of the problem, agricultural sector activities are proposed to comprise a significantpar' in the public works component of the proposed Social Safety Net Project. This will be followed bya proposed Rural Employment Project with a more concerted assessment of unemployment incidence andrectifying measures. The proposed activities will focus on the repair and maintenance of the existingagricultural infrastructure, especially the irrigation infrastructure, and environmental infrastructure. Theissues in these two areas are briefly reviewed below. In the implementation of these activities the privatesector will be given prioritv in order to create externalities for private sector development and sustainableemployment creation.

3. Maintenance and Repairs of the Irrigation Infrastructure. Irrigated areas make up only about10% of cultivated and 3-4% of arable land and there are plans to expand these areas substantially by theyear 2010. The Government gives high priority to and allocates a large share of agricultural investmentsto irrigation. However, there are important problems in the management of the water resources and theirrigated areas. Overall system efficiency is estimated at 36%. This low system efficiency is compoundedby low on-farm water use efficiency (WUE), which would imply that as low as onlv 20% of the waterharnessed for irrigation is actually converted into plant production. In some cases, the exigencies of selfsufficiency policies had resulted in the use of valuable irrigated land for crops with low economic value.These problems are compounded by the lack of effective water charges to cover at least operation andmaintenance (O&M) costs. As a consequence, system maintenance is not done in an effective manner. Soilerosion in the watershed areas has caused irrigated areas to decline bv reducing water storage capacity indams as a result of siltation. Hence, the following should be given high prioritv in irrigated areas: (a)rehabilitation and effective O&M of irrigation systems; (b) effective dissemination of productiontechniques. and (c) water pricing that promotes higher on-farm WUE.

4. Agroecological Issues: Soil Erosion and Desert Encroachment. The natural resource base isthreatened by several natural or man-made factors. The consequences are not only jeopardizing theproductivity of farm land but also the substantive investments in irrigation. Soil erosion and desertificationthrough the encroachment of sand dunes are the two main agroecological problems:

a. Soil Erosion. The main factor causing soil loss is water erosion. due to heavy runoff inthe fragile areas, which are primarily the overgrazed pastures. denuded forest areas, theuntilled fallow and the ravines and gullies in the watershed areas. In some areas,

Annex 4Page 2 of 5

expansion of production into marginal areas in response to Government price incentivesand the use of inappropriate tillage techniques have recently become more critical. As aconsequence, almost 10 million ha of land in the North is considered susceptible to lossof productivity as a result of soil erosion. Currently, (a) soil erosion in the watershedareas reaches 2,000 MT/km2/year; (b) 120 million MT of sedimentation is lost to the seaannually; (c) on average, dams have lost about half their capacity due to siltation; and (d)the annual reduction of water storing capacity in dams is around 20 million m3. Theseproblems require a concerted research and extension effort (both for erosion control andfor promoting appropriate production technologies) along with public works andinvolvement of local populations in managing the natural resource base and theenvironment.

b. Desert Encroachment. The encroachment of sand dunes results in irreversible loss ofagricultural land. Intensive efforts are under way to stabilize dunes with "barrages verts",reduce sand dune movement with windbreaks (brise vent) and control of grazing inmarginal areas (despite the countervailing pressures from contradictory subsidies topromote livestock production). An example of effective controls is observed in Bousaada,where the fortunate presence of underground water has allowed land with highly sandysoils to be allocated to producers. Commercial production on these farms is the bestguarantee for dune stabilization. Similar approaches should be used where the potentialof the private sector can be exploited to counter ecological problems.

Agricultural Sector Components of the Social Safety Net Project

5. The agreed guidelines for these activities are:

a. Control of infestation in pine forests (caterpillar control),b. Regeneration et developpement des nappes alfatieres (alfa bush regeneration);c. Wilaya de Boumerdes (rural development), maintenance of watershed infrastructures and

drainage works;d. Wilava de Bejaia (drainage maintenance); ande. Wilava de Setif (repair and maintenance of flood control structures).

6. During appraisal. it was agreed that:

a. the private sector would be given priority in implementation,b. the minimum wage would be paid to workers (DA 211.77/day. including social costs);c. labor and material costs would be based on established norms which would be explicitly

stated;d. priority would be on repair and maintenance of the existing agricultural infrastructure and

environmental activities;e. all activities would be executed within 12 months;f. a person-year would be calculated on the basis of 3 12 eight hour days per year; andg. a profit and overhead margin of 25 % over total costs would be applied in estimating

indicative budgets.

Annex 4Page 3 of 5

7. Lutte contre la chenille processionaire du pin. This component entails the mechanical (i.e.,manual) control of a devastating pest attacking pine trees, especially young plants. Coverage would be in12 provinces over an area of 50,000 ha.

8. These caterpillars currently constitute one of the important pests that cause major damage toaround 1.5 million ha of pine forests in Algeria. Field inspections have indicated infestation in 400,000ha, with half of this area being highly infested. These pests attack especially young trees. Evergreens suchas the Aleppo pine, which is adapted to semi-arid conditions, are used in barrage verts to arrest theencroachment of sand dunes on to productive land. These young plantations are attacked by thecarterpillars which prefer to defoliate the young shoots. Thus. major investments in these environmentalprotection activities will fail if this pest is not controlled and eradicated. Furthermore, the effects of thepest on pine forests elsewhere in the country are causing economic losses by reducing the volume of thelumber harvest.

9. Chemical control over large forest areas and plantations would have adverse environmental effectsas selective controls are not available. Hence, the Government has used mechanical methods to attack thepest. These involve manually removing the pest populations from the trees during the three phases of itsbiological cycle by cutting the branches infested with larval tents, cocoons and pupae (chrysalis). Thisselective method also allows local populations to find seasonal employment.

10. Implementation requires prior training, planning and adequate supervision. Assurances would beneeded from the Government on a detailed implementation plan. Work has to be organized into gangs,headed by forepersons, at a ratio of around 20:1 or 25: 1.

11. This component would cost US$ 7.8 million and create 4808 person-years of employment at a costof US$ 1629 per person year of employment created, with a high labor cost component of 75 %.

12. Regeneration et developpement des nappes alfatieres. Alfa is a bush that thrives in the salinesoils of the high plateaux steppes of Algeria, on what used to be ancient salt marshes. The plant is usedfor complementary forage but also for high quality paper production. Part of the production is processedin Algeria for paper and the rest is exported. The bush is an important element of a fragile ecologicalsystem that is susceptible to wind erosion. Overgrazing has taken its toll and the environment requires animportant protection and regeneration effort.

13. The proposed component aims to rejuvenate and regenerate alfa plantations on 48,000 ha in theprovince of Djelfa and 5000 ha in El Bayadh. Activities entail removal of dead plant residues to reducecrowding. delineation of production areas, collection and preparation of plant material, preparation of thesoil and planting. While the lands are under public ownership. exploitation and harvest of the productionparcels is subcontracted to local residents. The cost of the component is US$6.5 million. It creates 4152person-years of emplovment at a low US$1,562 per person-year and at a high labor cost component of78 %.

14. Wilaya de Boumerdes - mise en valeur. This component targets the irrigation perimeter oflower Sebaou on the Sebaou River in the dairas of Baghlia and Dellys in the province of Boumerdes. Itaims to focus on maintenance of the watershed infrastructures as well as the drainage works. Apart fromprotecting valuable irrigated agricultural land, the activities will also protect grazing areas from erosion.

Annex 4Page 4 of 5

Reduction of soil erosion from the watershed areas will also reduce siltation in the reservoirs. Themaintenance of the drainage works will reduce potential salinity arising from the rise of the water tablein irrigated areas.Other activities entail windbreaks on around 10,000 ha of which 7000 ha are irrigated.

15. Specific activities include the maintenance of gabions with a volume of 4000 m3, windbreaks of1000 km, and manual cleaning of drainage structures with a volume of 550,000 ml on 5500 ha of irrigatedland. The cost of the component is US$0.9 million, creating 4 13 person-years of employment at US$2.203per person-year and with a labor cost element of 56 %.

16. Wilaya de Bejaia - curage manuel de drains. This is a small scale activitv for the cleaning andmaintenance of irrigation drains in the lower Soummam and eastern coastal plain of Bejaia. It willfacilitate improved utilization of the agricultural lands that are drained by the systems to be maintainedand cleaned. The activities have a high labor content of 72 % and create 18 person-years of employmentat a cost US $30,000, equivalent to US$1,714 per person-year.

17. Wilaya de Setif - retenues collinaires. This component aims to repair and maintain flood controlstructures upstream of irrigation ponds established on the ravines and gullies of the watershed areas in theprovince of Setif. Of the 13 existing structures in Setif, eight in the dairas of Amn Amat. Maoklane. AinEl Kebira and Bir El Arch are targeted. These ponds have a total capacity of 4.4 million m3 and potentialirrigation area of 690 ha. Complementary activities include afforestation, plant cover in ranges and fruittree plantations.

18. Specific activities include maintenance work on flood control structures of 10.000 m;, afforestationon 330 ha, plant cover on 700 ha of rangeland and fruit tree planting on 120 ha. The total cost of thecomponent is US$1.25, creating a total of 535 person-years of employment at USS 2347 per person-yearas a labor cost element of 52 %.

19. This component contains desirable elements for employment and maintenance of agriculturalinfrastructures with the following caveat: assurances would be needed for sustainability, i.e., O&Mresources.

20. Costs. The costs of the agricultural components of the Social Safety Net Project total DA 885million or US$16.5 million, excluding VAT. These projects have a high labor cost component of 73% onaverage and create the equivalent of 9926 person-years of employment. at an average cost of DA 89,237per person-year or US$1,663.

Annex 4Page 5 of 5

Projects Costs

Projects Costs Cost US$ % Labor Created Cost Costmillions millions employment person- person-

DA person- employmen employ-years t DA ment US$

Boumerdes - Mise en 48,9 0,91 56 413 118.182 2.203valeur

Nappes Alfatieres 348,0 6,49 78 4.152 83.810 1.562

Setif - Retenues 67,3 1,25 52 535 125.916 2.347collinaires

Bejaia - Curage de 1,6 0,03 72 18 91.956 1.714drains

Chenilles 420,0 7,83 75 4.808 87.402 1.629processionnaires

TOTAL 885,8 16,51 73 9.926 89.237 1.663

Note: The costs do not include VAT. The exchange rate used is US$1.00 = Da 53.6522

Annex 5Page 1 of 3

Social Safety Net Improvement Component (AFS - PAIG)

1. Under the SAL, measures have been agreed upon to improve targeting by AFS and self-targetingby PAIG (cf. SAL aide-memoire of February 1996). The proposed program includes components onautomation of the system's management, at the national and wilaya levels, training of supervisors,documents and equipment for management of the system at the national and wilaya levels, and studies.

Management Information System (MIS)

2. Terms of reference for a study of a master scheme to establish an MIS have been completed. Themain objective of this MIS is to ensure the monitoring of social safety net programs (AFS - PAIG). Thisstudy focusses on preparing an MIS for personnel, finances and monitoring of AFS and AIG programs,designing the system, equipment, software and ancillary services, and training users on service software.On the basis of the study's conclusions and the contents of the master scheme, equipment will bepurchased and installed. In addition to hardware and software, photocopy and fax machines, as well asvehicles, will be purchased, at a total estimated cost of US$ 1. I million.

Training and technical Assistance

3. Training and technical assistance will aim at strengthening the social safety net system throughraising the level of qualification of supervisory personnel at all management and monitoring levels of thesystem. The training program will comprise all modem methods scheduled in training plans (experience,further training, refresher courses, seminars, exchanges of know-how) for: Personnel at the Ministry'scentral level and personnel of community and wilaya services. As for the contents of training, theprograms will target project selection, management, monitoring as well as automated managementsystems.

Supervisory training US$- Total number of staff 2,000- Daily amount 20- Duration: 10 days/person/2 yearsTotal amount for training 400,000Seminars, study tour 25,000Technical Assistance 20,000

4. An agreement will be sought by the Ministry of Public Works and Vocational Training with aninstitution responsible for implementing the training program, with possible collaboration with an overseastraining institution. Total cost is estimated at US$445,000.

Documents

5. In order to improve management of the system, aside from aspects indicated above, it is necessaryto provide management structures at all levels with general documentation, whether technical orspecialized (technical management review, manuals, case studies, methods of analysis of statistical data,design of file management. etc.). The documentation will be supported by audio-visual equipment. Totalcost is estimated at US$70,000.

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Strengthening of Management of the social safety net system

6. Control Level. In 1995, a "social safety net cell" was created, directly managed by theMinistry's cabinet, through an Advisor. It is presently composed of a high-level official, deputy directorof central administration, two administrators and an accountant. Its purpose is to ensure administrativemonitoring of each wilaya in terms of commissioning and use of credits allocated to communities for AFSand PAIG, evaluate beneficiaries (from AFS and PAIG) and PAIG building sites. The information willbe sent quarterly by the Department of Health and Social Protection of each wilaya who receives it fromthe communities.

7. The means available to central services remain insufficient and should be strengthened in orderto ensure a closer monitoring, mainly for maintaining statistical data. The extent of the program, in termsof staffing and amounts of budget allocated to communities justifies the need to strengthen, primarilythrough staff redeployment, the service in charge of the project at the central level. The strengtheningcould affect resources of staff competencies and management and monitoring tools appropriate to theprograms.

8. Compared with present staffing, the strengthening would take place through transfer orredeployment: of one staff responsible for statistics, in charge of records maintenance (AFS and PAIG);of one staff responsible for planning and monitoring of economic and social situation of wilayas, buildingsite programming (PAIG) per wilaya, population and needs, as well as evaluation of AIG programs.

9. The Central unit will need adequate automation, and communication tools with the wilayas. Thesetools, which are presently non-existent would allow the central unit to receive and process informationmore quickly and efficiently and to regularly prepare the sunmmary of wilaya reports, monitor the use ofallocated credits, prepare quarterly budget projections for the wilayas, and prepare recommendations forthe orientation of AFS and AIG programs.

10. Wilava Level. The management of the social safety net system at the wilaya level is presentlyensured by a specialized unit at the level of the health and social protection direction of the wilaya. Theunit in charge of social assistance to the under-privileged was given, since October 1994, responsibilityfor the management of the social safety net (AFS and PAIG). Its capacity and means remain limitedcompared to its goals. This situation makes it imperative to consider the creation of a wilaya unit solelyresponsible for the social safety net, equipped with manpower and equipment necessary to its operation.

11. The structure planned at the central level could, for consistency in the system's management, becopied at the wilaya level while adapting capacity to the volume of actual work required by the programs.

12. Staff from this unit should include, aside from the social safety net unit manager, a coordinatorof activities at the wilaya level, a staff responsible for records (AFS and PAIG), administrative andfinancial management of allocations and compensation as well as monitoring of planning and evaluationof economic and social situation of the wilaya (economist-sociologist): a staff responsible formanagement, supervision and evaluation of AIG building sites organized by communities (Technician).

Staff transfers will mostly take place through redeployment in order to make a better use ofcompetencies and existing capacities before recruiting new staff.

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13. Local Level. The conmnunity plays an important role in the implementation of the system. Itconstitutes the basis of the local social administration. Its services must be strengthened for theachievement of its goals and the improvement of implementation of the social safety net system.Strengthening of staff and means will take place through redeployment and maximum use of availablemeans before recruiting new staff of purchasing new equipment.

Studies

14. The cost of study for a master scheme on the automation of the system is estimated at US$40,000.The cost of the survey on impact of social safety net system (AFS - PAIG) on beneficiaries is estimatedat US$70,000.

Summarv of Costs

Social Safety Net (AFS - AIG)1. Equipment

- Automation, communication 1,100,000- Vehicles 400,000- Training 400,000- Documents 70,000- Seminars, study tours 25,000

2. Studies- Survey on social safety net impact on beneficiaries 70,000- Automation master scheme 40,000- Miscellaneous 20,000

Total estimated cost 2,125,000

Grants will be sought for the financing of the studies.

Annex 6Page 1 of 3

Pilot Social Fund

Project Justir.cation

1. In 1993, the Algerian Governrment established community social service units to serve under-privileged people in popular districts. These units are composed of teamns of multi-disciplinary specialistssettled at the district level. Social aspects in the units' interventions, especially remedial education andhealth prevention advice received special emphasis. The measures taken by the units aimed at improvingthe life of underprivileged groups

2. It has become necessary to go beyond social service units, to the development of under-privilegedareas eventually to be supported by a social development fund managed by an autonomous agency andbenefiting from a substantial financing from international donors and lenders. However, it is necessaryto test this approach on a small scale before expanding.

Purpose

3. On a pilot basis the program will aim at contributing to the improvement of a commnunity's livingconditions by promoting access to basic social services and by encouraging revenue-generating activities.The specific activities will be determined on the basis of an in-depth study of community needs.

Activities

4. In order to ensure commitment from the population to the project and its implication, a studywould identify essential needs of selected under-privileged conmmunities and involve the population in it.The community would define its own priorities with the help of other concerned parties. The needs thusdefined will be translated into objectives and measures to be taken in the short-term, in addition to thosealready initiated by the State. The following steps will be taken.

5. A limited number of communities, probably three. will be identified for the Pilot Social Fund.The project coordination unit will identify the consultant(s) who will undertake a field study. The unitwill valuate consultant proposals which are submitted and advise the coordination committee of its choicefor examination and approval.

6. The first step in the field study will be the identification of three under-privileged areas in eachwilaya. To make this identification reference will be made to the census of under-privileged areas andthe census of their population initiated by the MTPS and surveys on consumption and level of households.The MTPS will confirm the selection of these sites. A sample of under-privileged areas is required tomeasure the success of the pilot program. In principle there would be three types of communities selected

those (a) where under-privileged populations already benefit from the assistance of a community socialservice unit (cellules deproximite), (b) where populations benefit from the assistance of associations ordistrict committees, and (c) where populations have no assistance at all. Other criteria to be defined(nutrition, hygiene, literacy, revenues, etc.) will also be taken into account.

7. The second step is to identify social partners who would intervene in the selected communities(community social service units, associations, district conmmittees, etc.) and their level of competence.

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8. The third step is to undertake a detailed analysis of essential needs of the target populations andtheir expectations. The information produced in this analysis will permit identification of key indicatorsfor the selection of projects as defined by the population through associations, social service units, districtcommittees and other community groups, as well as to also identify social action projects which can notbe met by these groups either because of lack of means, or because they are not present in thecommunity.

9. The next step is to define the role of the program management unit, the role of social partners(community social service units), associations, district or other committees) in the identification of socialsupport activities and their implementation, and the role of communities in the formulation of needs andtheir participation in implementation; particular attention will be given to relations with local authorities.This will include determination of functional and operational links among the various participants as wellas financing procedures.

10. The next step will be to prepare detailed proposals on objectives, activities to implement torealize these objectives. and expected results. Factors ensuring sustainability of measures taken will beemphasized. These proposals would be the result of an interactive identification process, evaluation andapproval of activities. The participation of communities in this process would be decisive.

11. Taking into account the pilot nature of the project. it is suggested that, within each community,that only two or three objectives be identified (e.g. small hydraulics works, rural works, improvementof health coverage). These objectives will be met through multiple activities. The expected results willbe measurable.

1-. The next step would be to identify how to strengthen the intermediary agencies which wouldimplement the program, including technical assistance, training and small equipment. etc, as well as thenature of the required technical assistance to implement each activity.

13. Finally the specific interventions and investments would be costed and a system proposed forprocurement and implementation, with an emphasis on labor intensive works and communityparticipation.

14. Subsequently the Project Coordination Unit would assist in procurement and implementation.

15. The Project Coordination Unit will, in this process of definition of needs and activities toimplement, assist the various partners for each phase of the project and also will evaluate and review theorganization being implemented. The process would be dynamic and interactive.

Evaluation

16. Consultants would be responsible for defining indicators permitting at the end of the pilot phase,to evaluate the organization responsible project implementation and the capacity of the partners toundertake this type of project. This should permit the drawing of conclusions before launching anat.onwide program. In particular it would identify any difficulties faced by the project during itsimplementation and propose solutions with the prospect of pursuing the experiment on a larger scale.In part through this experience, the Project Coordination Unit will prepare a manual on organization and

Annex 6Page 3 of 3

procedures to implement for the realization of the second phase (reference will be made to the conclusionsof the evaluation, see above).

Budget

17. The nature and size of investment and social action programs cannot be precisely evaluated at thisstage. A total of US$3 million is allocated for the studies as well as implementation. While the MTPShas estimated that each intervention would cost US$100,000, the consultants will be asked to identifysmaller investments and actions.

Review

18. The Bank and the Government of Algeria will agree on the initial selection of communities, andthe investment plan. The program will be approved early summer 1996, and it is expected that works,training programs and purchase of equipment will begin by November 1, 1996.

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Component: Community Social Service Units

1. The Government of Algeria has developed 20 conmnunity mobile service units (cellules deproximite or CDP) in an effort to integrate marginalized populations and improve their access to socialservices. Under this program, four major areas of intervention have been identified: health and hygiene,psycho-social affairs, education, and cultural and sport activities. To date, several partial evaluations ofthe CDP experience have been concluded, with sufficient infornation to show the important role theseCDPs have played in serving an important liaison function between the communities and the formal socialsector ministries. Therefore, the project will strengthen the 20 existing CDPs in 7 wilayas, namely:

* Alger. Mouradia et Madania* Atnnaba: Cite de Draa Erich et Centre de transit de Annaba* Boumerdes: Cite El Marsa et Cite El Sahel* Constantine: El Khroub, Constantine chef lieu, Zirout Youcef, Hamma Bouziane, Ibn Ziad,

Dicouche Mourad* Blida: Blida and Boufarik* Setif: 2 CDPs in Setif ville* Oran: 4 cellules

2. Prior to expanding the CDP model to other wilayas, an in-depth evaluation of the program willbe done in the course of this pilot project. To that end, the project will support two weeks ofinternational technical assistance, and 2 months of local expertise as well as the expenses of such anevaluation. One of the most important elements of this evaluation will be the cost-effectiveness and -efficiency of the model, and a deterrmination needs to be made of how it fits within the traditionalactivities of the affected sectors (health, education, water and sanitation, etc.)

Proiect description

3. Within the component, the project would support the commnune, wilaya, and central levels of theCDP program as follows:

At the commune level, the project would finance equipment and furniture, as well as training for staffand conmmunity representatives. and seed funds for specific community action. A simple format for datacollection and reporting would also be developed. Within the budget envelope and the constraints givenbelow, each CDP would be given sufficient flexibility to propose a plan and a budget that is tailored toits own needs.

4. In order to receive the support, each CDP must prepare two documents:

(i) a plan for one year, based on the needs of the target population, within a project-financedbudget of S5,000 for the year. Expenditures are expected to be partitioned as follows:

(a) equipment and furniture, not to exceed 60 percent;

Annex 7Page 2 of 4

(b) community outreach activities, not to exceed 20 percent; and

(c) funds for innovative activities with prior approval by the central coordinator, not toexceed 20 percent.

Within these limits and with the approval of the central coordinator, each CDP team maydecide what equipment, furniture and materials (not including consumables, which would befinanced separately by the Govermnent) best meet its needs.

(ii) a set of impact indicators, a format for which would be provided by the central coordinator.The baseline values for these indicators would be submitted by the CDP team, on the basis ofwhich the impact of this project would be assessed.

The central coordinator will send the first two requests from CDPs for Bank approval of theplanning and budgeting.

Equipment budgets (SOOOs)for 20 CDPs 100 On the basis of $5,000 per CDP

B. At the wilava level, to ensure that the needs of the 7 wilayas are adequately covered (inequipment and, where needed, transport). the project would finance (costs given are estimates):

(SOOO)Vehicles 240 For mobile clinics (clino-mobile) or cars, based on needs of the

wilaya.

Computer 30 For a desktop or laptop computer, based on needs.

Equipment 330 May include fax, copier, media equipment, calculator, fax, basedon needs

5. All efforts would be made to involve the non-governmental organizations and communityassociations in the discussions at the level of the wilaya.

C. At the central level, the project would finance a vehicle, technical assistance for the preparationof 1 national and 12 wilaya-level workshops (technical assistance will consist of I month of internationaland 3 months of local expertise) for the design and implementation of a training program, includingmaterials and modules. The central coordinator will administer the training program, in consultation withthe Chief of the Project Management Unit.

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($000)

1 vehicle 26Equipment 6 fax, computer1 national workshop 6 bringing together all CDP staff, central and wilaya

authorities, community organizations, resourcepersons as needed. Duration of atelier to bedetermined by central coordinator

12 wilaya workshops 4 2 workshops per wilaya over the next 12 months;each workshop for 1 day with 30 participants @$20/day for all expenses + 400 per workshop formaterials, resource persons, etc.

TrainingTA Foreign 12 1 month @ $12,000TA Local 15 3 month @ $ 5,000 per month

CDP teams 48 5 persons X 20 CDPs X 4 weeks of training and 2additional weeks for meetings

Community representatives 16 5 persons chosen by the community X 20 CDPs X 2weeks

Wilaya coordinators 6 5 persons (including sector ministries) X 20 CDPs X2 weeks

Central level 1 5 persons (central coordinator and sector ministryrepresentatives X 2 weeks training

Recurrent expenditures

6. All recurrent expenditures, especially staff salaries), operating costs, public awareness campaigns,and all consumables at the commune, wilaya and central levels will be borne by the Government.

Training

7. The training of CDP staff members, wilaya-level coordination committees, and central-levelauthorities, as well as that of NGO representatives would be financed by the project, as mentioned above.

Procurement

8. All procurement would be done according to Bank procedures, and would be the responsibilityof the Director of Finances within the Project Management Unit.

Annex 7Page 4 of 4

Costs of Evaluation

9. An in-depth evaluation of the program of Cellules de Proximite will be conducted during theimplementation of this project. To that end, the project would finance a study at a cost of $20.000.

10. The terns of reference for this study have been prepared. These TORs will be further refinedby the Chief of the Project Management Unit to ensure that all relevant informnation is collected. It isexpected that this evaluation, in which community representatives would be involved, would be used tomeasure the impact of this project.

Annex 8Page 1 of 5

Comparison of Current and Planned Interventions in the Algeria Social Safety Net

Context:

Four features of the current Algerian situation provide the context for the proposed Social SafetyNet project:

1. The program of macroeconomic reform is expected to lead, among other things, to labor sheddingduring the phases of stabilization and restructuring;

2. High existing unemployment -- or at least the perception of such -- creates a high general potentialfor social unrest, as well as for resistance to reforms that are likely to bring further labor shedding;

3. Rapid labor force growth rates will continue to exert pressure on the labor market well into themedium and long term. This feature will combine with the prior two to increase political pressures onthe government to create employment opportunities;

4. Several years of economic decline are expected to have caused increasing poverry and vulnerabilityamong the population.

Social Safety Net Needs:

To respond to this context, Algeria's social safety net should include two features: first,temporary job creation until a recovery of economic growth can begin to absorb labor; and second,targeted poverty programs for the most vulnerable.

Bank Responses:

To address these needs, the Bank's strategy for Algeria includes both lending and non-lendingactivities.

The SAL will include conditionality to support the rationalization of the social safety net andincrease coherence and coordination of programs. It will require that the GOA undertake poverty analysisto improve its poverty reduction strategy and targetting capabilities, and that the GOA create anindependent social fund as a core element of its social safety net.

The measures called for in the SAL will be supported by the poverty assessment, which will givethe GOA the tools to improve both its overall poverty strategy and its specific poverty targetting efforts.

The SSN project will strengthen safety net program design, and will implement a pilot temporaryemployment creation program (TUP) as a transitional step toward developing a social fund.

The poverty assessment and the labor markets study will help refine our understanding of thecharacteristics of the vulnerable groups, and the scope and duration of the need for employment creationprojects. They will serve as an important input to the preparation of a possible social fund project.

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GOA Programs:

The main elements of Algeria's social safety net include the AFS, a program of targetted incometransfers, and the PAIG, a self targetting employment program. Under the Bank supported SSN project,the GOA will launch the TUP, a transitional public works employment program, and will prepare theSocial Fund, for possible Bank support under a subsequent project. The key operating features of theseprograms, and the objectives they serve, are presented in the tables below.

How they work

OperatingMechanisms AFS PAIG TUP Social Fund

target group poor, and elderly able bodied poor unemployed unemployedor unable to work

what is cash transfer, up to 'solidarity minimum wage market wagetransferred 25% min wage transfer," 50%

min. wageconditions of none work work worktransferduration of ongoing temporary temporary temporarytransferimplementing municipality municipality MTPS = > line autonomous agencyagents ministries = > => private sector

.__ ___ ___ ___ ___ ___private sector

product none public works low public works i social ifrastructureecon. value maint. some econ. high econ. value

valuetransfer share of 100% N.A.' 50% <30% (LACtotal non-admin. average)costs (approx.)

subproject supply driven supply driven supply driven demand drivenselectionno. people reached 430,000 house-hold 420,000 18,000 person T.B.D.

heads participants years of work

1. The guidelines establishing the PAIG provide for limited overhead costs, but make no clear provision forthe financing of non-labor subproject costs. Official estimates of the labor share of total costs are 85-90%,though this cannot be confirmed, since the PAIG does not provide data on actual costs. Given the natureof the subprojects financed, it is likely that the labor share of total costs exceeds 50'7o.

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Obiectives they serve '

Objectives Served AFS PAIG TUP Social Fundincome transfer high high moderate moderatetargetted to poorbuilding social none low low-moderate highinfrastructureprivate sector none none moderate highdevelopmenttemporary none high high highemploymentcreationappearance of high high high highgovernmentalconcerncommunity none low low highparticipation

SSN Program Differences and ComDlementarities

The above tables indicate some of the differences and complementarities between the GOA's mostimportant safety net programs. It is to be emphasized that the TUP is conceived of as a temporary,transitional program, fulfilling some, but not all, of the objectives of a social fund. Key programdifferences include:

(i) Product. While the AFS does not aim to generate any product apart from a straight incometransfer, the other three programs do, to an increasing degree. For the PAIG, the product is not animportant consideration in the selection of subprojects, although since the beneficiary must work for thetransfer, some product is generated. No prior analysis of the value of the product created is conducted,however, as the driving criterion for this program is employment creation. The TUP limits subprojectsto activities that are likely to be both labor intensive and generate a product with positive net value, suchas maintenance of infrastructure. Further economic analysis of those subprojects to be executed underthe TUP is in progress. The social fund would differ from the TUP in the sense that the subprojectselection is demand driven, within a prescribed menu, rather than preselected. Social fund subprojecteligibility criteria typically emphasize the construction of social infrastructure, or other products that willbe of ongoing value to the community. (While these criteria are not strictly economic rate of returncalculations, the ex post evaluation results of other social funds is that these criteria tend to lead toprojects with very high economic rates of return. (Nicaragua, Honduras).

ii) Share of Costs Transferred/Cost per Job The increasing complexity of the subprojects envisagedacross programs from the AFS to the PAIG to the TUP to the Social Fund is reflected in a declining labor(or transfer) share of total costs, and a rising total cost per job created. New construction efforts arelikely to have a higher cost per job, due to the relatively larger costs of complementary inputs (materials,

2. This table reflects program design features. In practice, some programs do not operate strictly accordingto design. For example, due to inadequate enforcement of self-targeting criteria, the PAIG has been lesssuccessful at reaching the poor than intended. See SAR Annex 1.

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equipment, supervision) required. Routine maintenance projects tend to have a lower cost per job.Average wage levels will also affect total job costs.

!n Latin American Social Funds, which typically focus on the construction and rehabilitation ofsocial infrastructure, the average cost per man-month of jobs created ranged from US$270 to US$320in Bolivia, Honduras and Nicaragua.3 In employment generation projects in other countries, costs per jobper day ranged from $1.10 (Indonesia), $1.80 (Haiti), $3.20 (Kenya) and $23.90 (Eastern Caribbean).4

These projects emphasized maintenance activities, with a lower materials complement to labor costs.These figures on costs per job created range from a high of approximately 590% of GDP per capita forthe Latin America social fund average to a low of 46% in Indonesia.5 At 178% GDP per capita, the costper job in the proposed TUP component is well within the range found in similar projects around theworld.

iii) Subproject Implementation/Private Sector Development. The range from PAIG to TUP to socialfund contemplates an increasing role for the private sector in subproject implementation.. While thePAIG contracts subprojects by force account, the TUP will use simplified bidding procedures with privatesector contractors as implementing agents, which will promote capacity building in the private sector inanticipation of a social fund. The social fund would be implemented by an executing agency withautonomy from the government, and would contract subproject implementation to the private sector.

iv) Subproiect Selection/Participation. The AFS, PAIG and TUP all contemplate a preselection ofsubprojects to be financed (or beneficiaries to receive AFS transfers). These are identified and selectedby the public sector (municipalities or line ministries) and financed accordingly. The social fund wouldrepresent a departure from this pattern, by leaving project identification to the conmmunities andselection/approval to an autonomous agency. This demand driven mechanisms for subproject selectionmakes the social fund a more participatory temporary employment creation program.

v) Targeting. In providing difficult manual labor jobs in underserved areas, the TUP mayeffectively self target the poor, even while paying the minimum wage (which may be above or below themarket wage). Its principal objective, however, is to generate temporary employment for the unemployedduring the economic reform and transition. Assuming PAIG criteria are effectively enforced, this is thevehicle that self targets the poor, through its stipend, set at half the minimum wage. The future socialfund would combine these features by permitting private sector contractors to pay a market wage (whichtargets the unemployed) and by weighting the project menu and resource allocations toward very lowskill activities in poor areas (which targets the poor).6

3. See Glaessner, et. al., Poverty Alleviation and Social Investment Funds, The Latin American Experience,World Bank Discussion Paper No. 261, 1994.

4. Cited in Haiti Employment Generation Project SAR, Report No. 14510-HA, June 1995, page 23.5. These are approximations based on 1993 GDP per capita in dollars as cited in WDR 1995, converted at

12 months. per year or 312 days per year. The LAC average is the average of the costs per job cited,relative to the Honduras GDP per capita, which falls between those of Nicaragua and Bolivia.

6. Or, the social fund may emphasize jobs that target other salient correlates of poverty. These refinementsof the targetting mechanism will be possible once a poverty profile is constructed from the forthcomingLSMS data.

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Agency for Social Development

A. As noted above, it is expected that a second project would support the establishment ofan autonomous Agency for Social Development which would implement a Social Fund. The keydifferences between the proposed Social Fund and the TUP are the following: (a) bottom-up versustop-down priority setting. Although local authorities were consulted in the setting of priorities underPhase I, they were not the major decision-makers, and they in turn did not directly consult withcommunity representatives (comites de quartiers, NGOs, or others); (b) indevendent azencv versusGovernment implementation unit. Not only would the establishment of an independent agency outsidenormal government regulations signal independence from the individual agendas of relevant lineministries, but it would also enable the Social Fund to hire the best qualified personnel and pay themmarket salaries; (c) continuous monitoring of community needs. Continuous monitoring and evaluationefforts would highlight the communities' own priorities, within the criteria established with their input,and within the available resource envelope; and communities' satisfaction (or lack thereof) with theservices being provided; and (d) increased focus on development of commnunitv infrastructure and onenvironmental improvement.

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Project Monitoring and Implementation Indicators

Monitoring indicators have been prepared for each of the project components. They aim tomeasure not only the implementation progress of the project, but also consider the attainment of theproject's broader development objectives.

Project monitoring would be carried out by an independent consulting firm that will presentregular reports to the GOA and to the World Bank. Terms of reference for that activity are included atthe end of this annex.

TUP Water and Sanitation Subcomponent

Performance Indicator Target

Competition Total number of contracts 140

Average number of bids per call for bids 3

Progress Average time for processing contracts (in calendar days 30following the bids)

Actual kms of water/sewer maintained 1,200

Percentage of payments to contractors within 15 days of 90invoice receipt

Manpower Actual number of man-months 54,800

Actual number of unemployed people who received 4,200minimum wages

Percentage wages paid/Amount of contract (excluding 50taxes)

Annex 9Page 2 of 5

TUP Roads Subcomponent

TargetPerformance Indicator SW cc

Competition Total number of maintenance contracts 300 240

Average number of bids per call for bids 3 3(supervision or construction)

Total number of supervision contracts 5 2

Work progress Average time for processing contracts (in 30 30calendar days following the bids)

Actual kms of roads maintained 6.000 4.000

Percentage of payments to contractors 90 90(supervision or maintenance works) within 4weeks

Percentage of payments to contractors 50 50(supervision or maintenance works) within 2weeks

Manpower Actual number of man-months (supervision 28.800 24.000or maintenance works)

Actual number of unemployed people who 4.200 3.500received minimum wages

Percentage wages paid/Amount of contract 50 50for maintenance (excluding taxes)

Anniex 9Page 3 of 5

PROJET FILET SOCIAL - COMPOSANTES AGRICOLES

PRINCIPAUX INDICATEURS DE PERFORMANCE

Pirlorimianice lidicatcLir RUg6ncr,ion alIhicre liejaiia - C'urage maniiel lloiiiiicrdcs - Nlise cii (hellilles Setif - RIcILInCs colliiiiresde drains vaklur processionnaires

Avancemnent de Duree mnoyenne de passalioni d'uii 30 30 30 30 30travaux conirat, cii jotirs, de la date du ddpot

des soumissions a la date de l'ordrede servicc

Objeciifs physiques rdafisds 53 000( ha dc 55 260 Ml, 3 000 m' de 50.000 ha 330 ha de rcboisciiiciitdcliniination, correctioniis torrcicl Ics 700 ian de fi\atiomi dcs bergcsnetloiciln:it ti paillage (gabions) 1 .000 in' de correclions iorrenticlIi sI 000 ha de production 1.000 kiii de brises (gahions)

de rhizomes benis 120 ha de plantation Imitikre550.000 Ml. de curagerniaiiIel de draiiis

l'ourci:itage des pai ieiets all 90 90 90 90 90contractamit eii itoinis de 4 sci:iaiiiis

1Iourclireag: ties paiclicnis aiSl 5) 5tl 5( 50 50Cilltraclailt ell Il lills (IC 2 seIIlmilcs

Maiii d'oeuvre Nomiibre de personnes-annkcs rdalis&es 4.152 18 413 4 808 535(26 jours de travail par niois - 312jours de travail par aln)

Nombre de chduneurs qui oit rccu Ie 5.000 15 500 5000 600salaire minimum

PIiurcemiiagu des salariis payis par 78 72 56 75 52rapport aLl inhintani dii cniltrat

Annex 9Page 4 of 5

Strengthening the Social Safety Net

Proposals for monitoring indicators of AFS & PAIG transfer programs

For each social safety net program, it is essential to monitor the evolution of the followingindicators under the social safety net project. After two months, this information should be available forsix Wilayas, after six months this information should be available for all Wilayas.

AFS Monitoring Indicators

I1. Distribution of beneficiaries by category (seniors, handicapped persons), by gender, social status(single heads of households); and total number of dependents (by age and gender).

Distribution of dependents: by age, gender and category.

3. Distribution of beneficiaries, similar to (1) and (2), per wilaya and rural and urban areas.

4. Total distribution of allocations (or services actually paid) by category (seniors, handicapped),by gender, social status (single heads of household): allocation of total increased of DA 120gained on dependents (by age and gender); and allocation of services rendered by Social Securityby category, gender, social and professional status.

5. Distribution of benefits, increases and social security services, and as in (4), per wilaya and ruraland urban areas.

6. Timing of AFS allocations (monthly, quarterly), per wilaya and rural and urban areas.

7. Total cost of AFS programs management, by category and wilaya, and rural and urban area.

PAIG Monitoring Indicators

1. Number of participants, according to accurate list of building sites and existing activities, definingthe type of activities per wilaya. The number of participants per type of building site that maybe classified under 7 general categories, will have to indicate specific category activities at thelevel of each wilaya, such as list of specific AIG in wilaya, details on public buildingsmaintenance, details on social and hygiene measures, etc.

2. Necessary qualifications depending on type of detailed activities and per wilaya.

3. Average number of hours per day for each AIG (by detailed type of activity) for each wilaya.

4. Timing and type of PAIG payments (monthly, per task or work day) per wilaya and for each typeof detailed activity.

Annex 9Page 5 of 5

5. Type of supervisory framework and qualification of monitoring by type of PAIG activity, perwilaya.

6. Cost of supervision and monitoring mechanisms by PAIG detailed type of activities, per wilaya.

7. Total cost of management (including supervisory and tool costs) of PAIG programs , as well asservices from social security, for each PAIG detailed activity and per wilaya and rural and urbanareas.

8. Distribution of total budget expenses for PAIG (specifying expenses for beneficiaries and socialsecurity), and per wilaya and rural and urban areas.

ALGERIASOCIAI. SAFETY NET PROJECT

Expeniditure Accounits by Components - Base Costs((JSs '000)

IlI.Social FundI-Public Works lI.Soc.Safely Net (Phase2) IV.impl.Unit

IA 18 IC IIA IIB IIIA 10IBRoad Agric./ Sewage/ Mgt. Celliles Com. Prep.Maint. Forestr. Water SSN Proxiiim. Dev. Total

hlivestmerit CostsCivil works 24,154 18,705 12,718 - 55,576Subprojects - - - - - 3,390 - 3,390Equipment

Vehicles - - - 393 346 - - - 739Data processing - - - 1,081 47 - - 10 1,138Office equip. - - 69 234 - - 10 313Kits - - - - 111 - - - 111Subtotal - - 1,543 738 - 20 2,301Technical Assistancelntei national - - - - 18 - - - 18Local - - - - 28 - - 430 458Subtotal - - - - 46 - - 430 476Studies 15 - - 130 4 - 633 20 o02Tiainiing - - - 425 U7 - 90 - 602Total Investment Costs 24,169 18,705 12,718 2,098 875 3,390 723 470 63,148Recurrent Costs

Operalt,mainlen - - - - - - 121 121Salaries - - - - - - - 220 220Total Recurrent Costs - - - - - - 341 341Total BASELINE COSTS 24,169 18,705 12.718 2,098 875 3,390 723 811 63,489Physical Contingencies 2,021 1,870 1.272 105 42 - 36 23 5,370Price Contingencies 537 497 338 44 12 98 20 20 1,567Total PROJECT COSTS 26,727 21,072 14,327 2,248 930 3,488 779 855 70.125

Taxes 3,073 2,424 1.648 190 94 401 4 12 7,846Foreign Exchange 8,760 1,060 1,995 1,422 662 2,470 688 435 17,491

0 0i,

Annex 11Page 1 of 1

List of Documents in the Project File

Documents Related to the Project

1. Agreed Upon Detailed Perfornance Indicators, Terms of Reference for Studies and TrainingPrograms, Draft Agreements, and Draft Proposals for Creation of an Autonomous SocialDevelopment Agency, as follows:

a. Study of Community Needs and Capacityb. Economic Rate of Return for Road Maintenancec. Study on Planning an MIS for Social Assistance Programsd. Baseline Study on Micro-enterprisee. Terms of Reference for TUP Supervisionf. Draft Agreements between Participating Ministriesg. Draft Decree for Establishing an Agency in Social Developmenth. Training Plan for the Management of the AFS/PAIGi. Training Plan for the Community Social Service Units (Cellule de Gestion)

2. "Fiches Techniques" for Public Works Programs in Roads, Agriculture, and Water andSewerage.

3. Detailed Government Proposal of August, 1995.

Documents Related to the Sector

5. "Rapport d'Evaluation a mi-parcours de l'execution du Filet Social en Algerie", FaroukTebbal and Saad Belghazi. Octobre 24, 1995, Alger.

6. Dispositif Relatif au Soutien de l'Etat aux Categories Sociales Defavorisees", Ministere duTravail, de la Protection Sociale et de la Formation Professionnelle, Alger, 1995.

7. Study on the Legal Environment for Micro-enterprise.

MAP SECTION

IBRD 27831

ALGERIA Al e cL e n a n S e aSOCIAL SAFETY NET SUPPORT PROJECT 4' Elj- .

PROJET D'APPUI AU FILET SOCIAL

Md. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 1

\ 41 3 4 t 0 < _ n <) i DA- _ \> t { 4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Q

29B .e S/ 1 I N , ' , M .o'E I

T3 V d TI n 3 . 1 E I -K SOIL g rn u - _ r

/ I~~~~~~~~~~~~~~~~~~~

XrO~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I El @hg0

WILAYA NAMES PAVED NATIONAL ROADS 0 TOWNS AND VILLAGESNOMS DES WILAYATE ROUTES NATIONALES VILLES ET VILLAGES . ,ALGIERS

ADRAR 2 EL BAYADH OUARGLA PAVED WILAYA ROADS WILAYA HEADQUARTERS \, /:, AIN DE LA J' E L OILED AOUM EL EO UAGHI ROUTES SECONDAIRES 5IEGES DES WILAYATE , Are- VfNPOA

E AIN TEMOUCHENT EL TARF RELIZANE RAIROAD NATIONAL CAPITAL ALGIERS I' GHARDAIA - SAIDA VOLES FNROREES CAPITALE r...,

2 ANNABA ' SELMA SETIF 33 - 7 _

S BATNE HA LL.Jl 2E SIDI BEL ABBES AIRPORTS - - WILAYA BOUNDARIES |j BECHAR - IEL SKIKDA AEROPORT'S LIMITES DES WLLAYATE j C 5

B aEJAIA KII KHENCHELA i SOUK AHRAS r,r- -

_ BISKRA ' LAGHOUAT TAMANGHASSET INTERNATIONAL BOUNDARIES R'N- | __

I B3IDA - MASCARA TEBESSA LIMITES INTERNAFIONALES ., t , >B.3ORLJ BOU ARRERiDI M MEDEA I TIARET - N-..r

I) BO3UIRA . MILA - TINDOUF \ I l

3- BOUMERDES : MOSTAGANEM _ TIPAZA \, 1

2 CHLEF - M SILA TISSEM S I \ I,,

'5 CONSTANTINE I NAAMA TIZI OUZOU ° 50 IDo ISO I. Vb,,d ... a -31-, d---.--d 3 A., 333C-

DJE LfA ' ORAN TLEMCEN KILOMETERS 1,.d '3'-"pIp 4 s.c boh .dGr T .A

APRIL 1996

IMAGING

Report No: 15392 AL

Type: SAR

World Bank Document · AFS Contractual Solidarity Allocation ... 6 Project Objectives ... demand by...

Documents

Transcript of World Bank Document · AFS Contractual Solidarity Allocation ... 6 Project Objectives ... demand by...