Roads and highways (76%);Central government administration (16%);General transportation sector (8%)
GOVERNMENT OF JORDAN
[X] A [ ] B [ ] C [ ] FI [ ] TBD (to be determined)
[X] S1 [ ] S2 [ ] S3 [ ] SF [ ] TBD (to be determined)
Date PID Prepared
April 19, 2004
Date Appraisal Authorized
February 19, 2004
Date of Board Approval
June 3, 2004
Country and Sector Background
For most of its 5,045 km, Jordan’s main highway network offers good coverage, has sufficient capacity to accommodate vehicle flows, and is in good condition. With the exception of a ring road for the Amman Metropolitan Area (AMA), and bypasses for secondary cities, the network is considered adequate. However, due, in part, to the lack of a ring road, the AMA suffers from increasing traffic congestion. In 2001 alone, the country’s vehicle fleet increased by 15.9 percent, prompted largely by lower duties on imported vehicles. Today, there are an estimated 500,000 vehicles in Jordan, or about 100 vehicles per thousand inhabitants.
As the country’s capital and major commercial and industrial center, the AMA, which includes the cities of Amman, Zarqa, Ruseifa and surrounding areas, accounts for more than 50 percent of Jordan’s population, contains about 80 percent of the country’s industrial sector, and provides employment for around 55 percent of the nation’s inhabitants. Since the 1980s, the population of the AMA increased, on average, by 3.3 percent per annum, and now stands at just under 3.0 million. By 2020, the AMA is forecast to have 4.5 million inhabitants. Over the next twenty years, Jordan’s workforce will increase to 2.1 million, while the workforce in the AMA will more than double to 1.2 million (equivalent to the national work force in 2001).
In recent years, the AMA has expanded to the extent where areas designated for development in the 1980s have become saturated and are no longer sufficient to accommodate continued growth. As a result, congestion is becoming an issue. Urban master plans, including designation of new areas for commercial, industrial and residential development, have not kept pace with economic growth, increasing levels of urbanization, and steadily rising motorization rates.
At the national level, trade promotion is key to the Government’s strategy to maintain economic growth and create job opportunities. Evidence of the country’s commitment to a more liberal trade regime and to transforming the AMA into a regional trade and transport hub can be found in regional and international trade agreements entered into with the European Union and the United States. A promising development is Qualified Industrial Zones (QIZ), which were launched in 1996 and permit goods produced in these areas duty free entry into the American market. To date, QIZs collectively have attracted around US$383 million in investment and generated nearly 27,000 jobs for Jordanians. However, the efficiency of transport logistics is a key determinant of a country’s international competitiveness. High freight transport costs due to inadequate facilities, and distortions in the trucking industry that perpetuate over-capacity and hold trucking tariffs above what would prevail under free market conditions, are barriers not only to increasing trade flows, but also to attracting foreign direct investment. Left unchecked, these drawbacks will make it ever more difficult for Jordan to compete for global trade and investment flows.
For the AMA to begin addressing the pressing issues associated with its rapidly expanding municipalities, it must develop key missing links in its highway system, and designate land to accommodate on-going and future growth. For Jordan to build on its geographical advantage as a regional trade and transport hub, benefit from higher transit revenue and generate employment opportunities, it must reduce transport and logistics costs and increase existing trade flows.
The Project’s development objectives are to: (i) support more efficient transport and logistics services by removing key infrastructure transport bottlenecks; and (ii) provide access to affordable land for productive investment and urban development purposes. These objectives would be achieved through: (a) building a critically needed link in the AMA’s urban highway network - Phase 1 of the Amman Ring Road (AAR-1); (b) opening up around 300 square kilometers of affordable land for future expansion and growth of the AMA; (c) promoting the development of an efficient transport and logistics platform by providing basic infrastructure for a modern inland port and relocating the Amman Customs Depot; (d) supporting on going reforms to restructure the trucking industry; and (e) planning urban development in the ARR-1’s area of influence.
Rationale for Bank Involvement
The Government has long been an advocate of developing a ring road for the AMA, and this remains a top priority. Since the mid-1990s, the Bank has maintained a near continuous dialogue with the Government on the matter. With assistance from the Bank, the proposed Amman Ring Road Project reached the appraisal stage in 1998, but did not proceed to negotiations, due to the Government’s decision to postpone most of its infrastructure investments.
The Bank’s extensive experience in financing large transport infrastructure projects, particularly roads, combined with its broad understanding of municipal planning and measures to facilitate trade,1 enhances the likelihood of a positive outcome for the project. Given the Bank’s diverse international experience in these interdependent areas, it is in a unique position to effectively integrate and coordinate the the different issues related to the Amman Development Corridor Project (ADCP).
The Government felt that Bank involvement would be an effective catalyst to attract financing for the project. It was viewed that with Bank support, interest among donors to participate in co-financing arrangements would be elevated, while comfort levels among private investors to make subsequent investments would be heightened.
The scope of the proposed Project would consist of: (a) constructing Phase 1 of the Amman Ring Road (40.0 km), which would be divided into three sections; (b) developing access infrastructure and utility services for inland port facilities, relocating the Amman Customs Depot, and supporting the Government’s on-going program to restructure the trucking industry; and (c) providing technical support for urban and transport planning, traffic engineering, and project management.
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
The Ministry of Public Works and Housing (MoPWH) is the sole implementing agency and would be responsible for overall implementation of the project. For non-road related activities, MoPWH will involve: (a) the General Customs Department (GCD) of the Ministry of Finance (MoF) for the new Customs Depot and the Logistics Service Center at the Inland Port; (b) the Ministry of Transport (MoT) for the Inland Port Business Zone, and technical support for on going reforms in the trucking industry; and (c) the Ministry of Municipal Affairs, the Greater Amman Municipality (GAM) and other concerned municipalities for the Project’s urban development planning activities. The MoPWH would also be responsible for implementing environmental, resettlement and cultural resources mitigation measures adopted for the Project.
Given the importance of the ADC and the need to ensure its development is both planned and organized, an inter-ministerial ADC Steering Committee and an Executive Committee will be established with membership from concerned ministries and municipalities, and the Office of the Prime Minister. The Committee’s chief function is to ensure that development within the ADC is planned and undertaken in a comprehensive, unified and coordinated manner.
A Technical Unit supported by the Project will be established under the ADC Oversight Committee to work with all concerned municipalities. The Unit will carry out urban planning studies for development within the ADC’s zone of influence, and promote and guide development within and along the ADC. All decisions affecting land use and development will remain with concerned municipalities.
The MoPWH will designate a Project Management Team (PMT) to implement the Project within budget, on schedule, and according to technical specifications. The PMT will be responsible for all project components, including carrying out monitoring and evaluation activities, and ensuring effective implementation of the environmental management and resettlement action plans. The PMT will also be responsible for reporting on implementation progress, monitoring and evaluation activities, the procurement process, financial management and audit requirements. The PMT will be supported by a core team of experts in project management (including procurement and financial management) hired through an international construction management firm.
There is strong demand among Government officials and trade industry leaders for this project, which has combined overdue investments in physical infrastructure with support for key policy reforms. As designed, it will cater to a number of pressing needs, including for an alternative route for freight traffic to bypass central Amman, opening new land for urban development, and developing an integrated logistics platform. The project has also been structured to encourage interaction with private operators, especially in developing measures to strengthen the performance of the trucking industry by addressing prevailing monopolistic tendencies. Soliciting feedback from the private sector during project preparation and incorporating that input into the project’s design reinforces sustainability and the likelihood of maintaining expected benefits over the long-term.
The Borrower’s commitment to project objectives is robust, as evidenced by its successful actions to assemble parallel financing. Another indication of Government ownership is apparent from its agreement to include financing to support a Technical Unit to promote and guide development within the ADC.
Lessons Learned from Past Operations in the Country/Sector
Transport corridor projects are, by nature, complex and require strong commitment from counterpart authorities. Government support for the Project has been unwavering since the mid-1990s, and counterpart agencies fully endorse its implementation.
Often, the benefits of developing roads can be subdued due to encroachment, and the design of the Project addresses this concern. The development of service roads, which will provide links between ARR-1 and adjacent areas planned for development, will help to control access. The Project will also provide support to a Technical Unit that will carry out urban planning initiatives, and promote and guide development within the ADC.
Unless properly managed, the implementation of large, complex infrastructure projects can lead to delays and cost overruns. To help avoid potential delays, bidding documents for the road component will be ready for tendering by effectiveness, and an international construction management firm with in-depth knowledge and practical experience in procurement and construction management will support the Project Management Team (PMT), which will be established at the Ministry of Public Works and Housing. In addition, prequalification criteria were prepared during project identification by a qualified engineering firm.
Safeguard Policies (including public consultation)
Safeguard Policies Triggered by the Project
Environmental Assessment (OP/BP/GP 4.01)
Natural Habitats (OP/BP 4.04)
Pest Management (OP 4.09)
Cultural Property (OPN 11.03, being revised as OP 4.11)
Involuntary Resettlement (OP/BP 4.12)
Indigenous Peoples (OD 4.20, being revised as OP 4.10)
Forests (OP/BP 4.36)
Safety of Dams (OP/BP 4.37)
Projects in Disputed Areas (OP/BP/GP 7.60)*
Projects on International Waterways (OP/BP/GP 7.50)
List of Factual Technical Documents
Assessment of the Feasibility of the Inland Port and Customs Depot in the Amman Development Corridor Project. Initial Appraisal Report, Haskoning Nederland BV, March 2004.
Road Sector Review, Dar Al Handasah, March 2004.
Environmental Impact Assessment Update for the Amman Development Corridor Project, Dar Al Handasah. February 2004.
Land Acquisition and Resettlement Plan Update for the Amman Development Corridor Project, Dar Al Handasah. February 2004.
Economic Analysis of Amman Ring Road, Phase 1. January 2004.