INTEGRATED SAFEGUARDS DATA SHEET

CONCEPT STAGE

Report No.: AC297

Date ISDS Prepared/Updated: September 24, 2003

I. BASIC INFORMATION

A. Basic Project Data

Country: Indonesia / Project ID: P084872
Project Name: Urban Water and Sanitation Improvement a / Task Team Leader: Ventura Bengoechea
Estimated Appraisal Date: March 25, 2004 / Loan/Credit amount ($m.):
IBRD: 50
Estimated Board Date: June 22, 2004
Managing Unit: EASUR / Lending Instrument: Specific Investment Loan
Sector: Water supply (70%);Sanitation (30%) / Theme: Access to urban services for the poor (P);Small and medium enterprise support (S)
Safeguard Policies Specialists in the task team: Jitendra Shah, Cyprian Fisiy
Other financing amounts by source: / ($m.)

B. Project Objective

The main project development objective is to improve and expand the delivery of WSS services by strengthening the local water utilities to become operationally-efficient and financially-sustainable. A second development objective is the scaling up of sanitation services by pilot-testing the SANIMAS approach into at least three urban areas. This approach, which has been successfully tested in peri-urban communities, is based on the establishment of a partnership between beneficiary communities, the local governments and NGOs to design and implement sanitation systems. Most importantly, the benefits are expected to reach beyond the areas included in this project through its demonstration effect on other PDAMs and urban areas.

C. Project Description

The project would finance investments aimed at improving the provision of water services in about ten selected PDAMs and to expand their coverage into un-served urban and peri-urban areas. The project will also target three urban areas to pilot test low-cost wastewater collection and treatment systems in areas subject to environmental degradation.

The selection of PDAMs and the community areas to benefit from this proposed operation will be demand-driven and based upon compliance with some eligibility criteria to guarantee the effectiveness and sustainability of the operations.

3.1 Water supply investment component will finance investments to improve the services and expand the coverage of about 10 PDAMs that are: (i) commercially viable; (ii) committed to improving their efficiency and expanding their services; and (iii) supported by their respective local authorities. These investments will be selected from a priority list being prepared at each of the PDAMs, together with their corresponding standardized financial projection models.

3.2 Pilot sanitation component would finance: (a) feeder sanitation investments; (b) trunk sanitation investments; and (c) technical assistance. The feeder sanitation investments would include the implementation and optimization of separate and combined sewerage solutions. The trunk sanitation investments would include the construction of interceptors and treatments facilities. The technical assistance would assist local authorities in preparing feasibilities studies, detailed designs, bid documents and in supervising the project implementation. This component will be developed in collaboration with the Sanimas initiative under the WB’s Water and Sanitation Program (Annex 5).

3.3 TA component to: (i) assist the National Government in developing a new framework for on-lending to the water sector, and in the establishment of the new regulatory agency; (ii) assess the needs and demand for water and sanitation services and establish benchmark indicators; and (iii) finance a public information campaign. The first would require substantial work in developing the legal documents and guarantee instruments. The second subcomponent will support the establishment of an initial base line, reliable mechanisms to measure progress made against key benchmark indicators, and to prepare action to attain agreed targets. The third part would include TA for developing and implementing public information campaigns at the national and especially local level to create awareness about the need to improve water and sanitation services.

D. Project location (if known)

The project will support the optimization of the following 10 PDAMs, subject to confirmation during pre-appraisal:

Banjarmasin, Bogor, Cirebon, Jambi, Kendari, Lebak, Makassar, Malang, Manado and Pontianak.

E. Borrower’s Institutional Capacity

Project implementation will be done through the above PDAMs which have proven successful in the implementation of the ASEM-funded PDAM rescue program, Financial Recovery Action Plans (FRAP). These PDAMs have improved their financial condition and are now ready and willing to invest to improve their efficiency and increase service coverage. Fund channeling arrangements need to be worked out with GOI during the appraisal process. Project oversight will be provided by a national-level Commitee on Infrastructure (Sub-committee for Water Supply/SWS) under the Coordinating Minister of Economy, with members from Kimpraswil,

BAPPENAS, MOHARA and MOF.

II. SAFEGUARD POLICIES THAT MIGHT APPLY

Applicable? / Safeguard Policy
If Applicable, How Might It Apply?
[X] / Environmental Assessment (OP/BP 4.01)
EA for participating subprojects will commence during project preparation.
[ ] / Natural Habitats (OP/BP 4.04)
[ ] / Pest Management (OP 4.09)
[X] / Involuntary Resettlement (OP/BP 4.12)
Guidelines on Resettlement and Compensation of Land and Other Assets, consistent with Bank policies, will be prepared to deal with land acquisition, temporary displacement and other matters which may have a negative impact.
[ ] / Indigenous Peoples (OD 4.20)
[ ] / Forests (OP/BP 4.36)
[ ] / Safety of Dams (OP/BP 4.37)
[ ] / Cultural Property (draft OP 4.11 - OPN 11.03)
[ ] / Projects in Disputed Areas (OP/BP/GP 7.60)[*]
[ ] / Projects on International Waterways (OP/BP/GP 7.50)

Environmental Assessment Category:

[ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined)

If TBD, explain follow-up and calendar/steps for the determination of the category:

Safeguard Policies Classification:

[ ] S1 [X] S2 [ ] S3 [ ] SF [ ] TBD (to be determined)

If TBD, explain follow-up and calendar/steps for the determination of the classification:

III. ACTIONS DURING PROJECT PREPARATION

[Guideline: Refer to sections 5 and 6 of the PCN]

A. What actions might be needed during project preparation to assess safeguard issues and prepare to mitigate them?

Environmental assessments (EA) will be prepared by participating PDAMs, under the supervision of consultants for each of the towns, together with environmental management plans (EMP). In order to guide the preparation of EAs and EMPs for subsequent batches of subprojects, an Operational Manual for Environmental Assessments will be prepared as a part of appraisal.

B. How might consultation and disclosure requirements be addressed?

The project-supported activities will involve the participation of primary beneficiaries (households willing to secure a water supply or sanitation connection and ready to pay user fee) through community mobilization. This will be done through the establishment of Users Groups (UGs), and the empowerment of these groups to speak on behalf of the communities.

IV. AGREEMENTS REACHED ON SAFEGUARDS AT PCN REVIEW

[Guideline: Summarize the key agreements reached on follow-up actions to be taken regarding safeguards during project preparation]

Agreed target date for Quality Enhancement Review:

[*] By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas