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(e) Support for Coordination of prolect Implementation (PCU) (US$1.5 million)

3.53

The Project Management Unit for the FHP, accountable to

the Secretary General of Health (MSASF), will become the Project Coordinating Unit (PCU) responsible for coordinating implementation of the proposed project. The Govemment will be requested to retaln the premises madę available to the PMU/FHP, to house the PCU. Eęuipment, mainly vehicles and computers, procured under the FHP, will also be handed over to the PCU and kept functioning until the second year of the proposed project when they will be replaced, under the credit financing, after amortization. With responsibility for managing all construction contracts delegated to Faso Baara, the new PCU would focus on coordination, facilitating implementation and monitoring and evaluating project outcomes. During negotiations a draft contract delegating the management of civil works related contracts to Faso Baara will be reviewed by IDA. Signature of a contract between MSASF and Faso Baara would be a condition of credit effectiyeness. The PCU would be staffed with a Director, assisted by a deputy director in charge of coordinating the preparation and the follow-up of procurement, annual programs and budgets for all components, an accountant and necessary support Staff (assistant accountant, two secretaries, a driver and watchmen). The accountant and deputy director would be recruited locally. Weaknesses experienced under the FHP will be addressed, notably by strengthening the accounting system with the assistance of a qualified accounting company experienced in working according to intemational standards, and by ensuring that all key Staff would be recruited on a competitive basis under terms of reference satisfactory to IDA and appointed subject to IDA's approval. The recruitment of a ąualified accounting company to assist in strengthening the accounting system would be a condition of credit effectiyeness. Draft terms of reference for the PCU and key positions are in Annex 4.2. As a condition of credit effectiyeness. the PCU would be fully operational, with the Director and the two professional Staff in their posts, recruited in the manner described above. At negotiations, the Govemment provided assurances that it would operate the PCU according to terms of reference acceptable to IDA and would not recruit any key staff of the PCU without the prior consent of IDA.

3.54 Implementation and proiect support. The implementing agency for this sub-component would be the Office of the Secretary General of the MSASF. The Credit would finance the imrestment costs including Office eąuipment, vehicles, supplies and operating expenditures, contractual services for the accountant ffom the private sector as well as for the support staff, and assistance in other technical areas under service contracts subject to IDA review and approval, notably for the audit of the PCU and project components (US$0.2 million), and for civil works contract management (US$0.6 million). In addition, the Credit would finance consultant services and operating costs associated with pre-investment studies, conducted according to terms of reference satisfactory to IDA. Civil servants seconded to the PCU and rental costs of the premises would be borne by the Govemment.

F. Proiect Costs and Financing

3.55 Total project cost, net of taxes, is estimated at US$38.9 million equivalent, with a foreign exchange component of US$33.3 million. Base cost estimates are US$32.9 million at February 1994 prices. Physical and price contingencies are estimated at US$6.1 million (18% of total project cost) with physical contingencies representing 7% of civil works and 5% of other project components. Price contingencies assume: (a) a domestic inflation ratę of 14%, 12%, 8.5%, 6.5%, 5.3% and 5% over the years 1994-1999, respectively; and (b) foreign inflation rates of 3.7% (average for the period 1992 - 1997). Detailed project cost estimates are given in Annex 4.5. The project would be financed through an IDA Credit (US$29.2 million or 75% of total