[Federal Register Volume 75, Number 210 (Monday, November 1, 2010)]
[Notices]
[Pages 67122-67142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-27459]
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MILLENNIUM CHALLENGE CORPORATION
[MCC FR 10-14]
Notice of Entering Into a Compact With the Hashemite Kingdom of
Jordan
AGENCY: Millennium Challenge Corporation.
ACTION: Notice.
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SUMMARY: In accordance with Section 610(b)(2) of the Millennium
Challenge Act of 2003 (Pub. L. 108-199, Division D), the Millennium
Challenge Corporation (MCC) is publishing a summary and the complete
text of the Millennium Challenge Compact between the United States of
America, acting through the Millennium Challenge Corporation, and the
Hashemite Kingdom of Jordan, acting through the Ministry of Water and
Irrigation. Representatives of the United States Government and the
Hashemite Kingdom of Jordan executed the Compact documents on October
25, 2010.
Dated: October 26, 2010.
Melvin F. Williams, Jr.,
VP/General Counsel and Corporate Secretary, Millennium Challenge
Corporation.
Summary of Millennium Challenge Compact With the Hashemite Kingdom of
Jordan
The five-year Millennium Challenge Compact with the Hashemite
Kingdom of Jordan (``Compact'') will provide up to $275.1 million to
reduce poverty and accelerate economic growth. The Compact is intended
to support: (a) Rehabilitation of the water supply network for
households and businesses; (b) reinforcement of main sewer lines and
expansion of the lateral sewers into neighborhoods that lack access to
a proper wastewater collection network; and (c) expansion of the As-
Samra Wastewater Treatment Plant, in partnership with a private sector
operator that will mobilize a portion of the total cost of
construction.
1. Program Overview
The Compact program consists of three tightly integrated
infrastructure projects that address critical problems in water
distribution, wastewater collection and wastewater treatment. The
projects are focused in Zarqa Governorate, home to the country's second
and fourth largest cities, Zarqa and Ruseifa, and more than half the
country's small-scale industry. A history of neglect coupled with rapid
population growth, particularly an influx of refugees from Iraq over
the past decade, has strained critical water and wastewater
infrastructure throughout the area. Residents continuously complain of
sewer main overflows and water pipes made of cheap, flexible tubing
that run above ground through city streets, where they are subject to
considerable wear and tear.
In combination, the three projects are designed to increase the
effective supply of water that reaches household and commercial users
throughout Zarqa Governorate. This increase comes from two sources.
First, repairs to the reservoirs, pumps, and pipes that make up the
water delivery network will reduce the physical loss of water during
transmission and distribution, directly increasing the amount of
potable water available to end users. Second, greater collection and
treatment of wastewater will create an increased supply of high-quality
treated wastewater appropriate for use in irrigated agriculture. This
treated wastewater is expected to become a substitute for the fresh
water currently used in agriculture, allowing fresh water to be
directed to higher value uses in urban areas, including Zarqa, before
it is collected as wastewater and then treated and reused. This
arrangement extends the use of each unit of fresh water.
2. Project Descriptions
Water Network Restructuring and Rehabilitation Project (Water Network
Project) (Estimated $102.57 Million)
At present, an estimated 57 percent of the potable water supplied
into the water transmission and distribution network in Zarqa
Governorate is lost through physical leaks; additional losses are
attributable to administrative mismanagement. The Water Network Project
is designed to reduce high rates of water loss through construction and
repairs to reservoirs, pump stations and up to 67 km of primary, 927 km
of secondary, and 256 km of tertiary pipes, along with replacement of
household connections and meters, in the two poorest, most heavily
populated water service areas of Zarqa Governorate. The project is also
designed to convert the system from high-pressure, periodic
distribution to more frequent, gravity-fed distribution that should
improve customer service, reduce wear and tear on critical
infrastructure, and extend the lifespan of the network. The project
includes technical and financial assistance to very poor households to
improve plumbing, water storage, sewage connections, and general
awareness of best practices for basic sanitation and efficient water
use.
Wastewater Network Reinforcement and Expansion Project (Wastewater
Network Project) (Estimated $58.22 Million)
Zarqa Governorate is served by an outdated sewer system that limits
the collection of wastewater and endangers public health. The system
frequently overflows into city streets and the surrounding environment,
relies on pump stations that have insufficient capacity, and serves
only 72 percent of the population. The Wastewater Network Project is
designed to replace or rehabilitate up to 29 km of undersized trunk
lines and expand lateral sewers by up to 140 km in the neighborhoods of
East Zarqa and West Zarqa, both of which lack proper sewer connections.
The extension of lateral sewer lines is expected to raise coverage
rates from 72 percent to about 85
[[Page 67123]]
percent of the local population. These new customer connections should
also generate additional supplies of wastewater to be treated at the
As-Samra Wastewater Treatment Plant and eventually reused in
agriculture downstream in the Jordan Valley.
As-Samra Wastewater Treatment Plant Expansion Project (As-Samra
Expansion Project) (Estimated $93.03 Million)
Originally built with support from a USAID grant, the As-Samra
wastewater treatment plant is the primary facility for treating
wastewater from Amman and Zarqa Governorates. The plant became
operational in 2008 and was originally designed to meet the region's
treatment needs through 2015 but is already nearing its capacity.
Without an expansion to properly handle the region's growing volume of
wastewater, the plant could become overloaded, its ability to treat
wastewater could deteriorate, and downstream agricultural areas that
rely on treated water for irrigation could face serious food safety
risks and the loss of markets for agricultural products. The As-Samra
Expansion Project is designed to expand the plant's treatment capacity
by 97,800 cubic meters per day, an increase of more than one-third, and
install upgrades to handle higher suspended solid loads. These
improvements should meet the region's wastewater treatment needs
through 2025. The proposed expansion will be financed in partnership
with the Samra Wastewater Treatment Plant Company Limited (``SPC''), a
private company that built the existing plant and operates it under a
concession from GOJ. Under this arrangement, an MCC grant would cover a
portion of the cost of construction, while SPC would mobilize debt and
equity funding to cover the remaining construction costs, along with
project development and design, project management, and interest costs.
In this way, the MCC grant will attract private financing, reduce
construction costs to MCC, and thereby reduce the role of the public
sector in financing the project. MCC's involvement will reduce the cost
of capital, allowing lower water and wastewater tariffs to consumers
than might otherwise have been necessary. This arrangement may also
enhance operational sustainability by transferring some risks related
to financing, construction, and operations to the private sector.
3. Administration
The Compact also includes program management and oversight costs
estimated at $18.47 million over a five-year timeframe, including the
costs of administration, management, auditing, fiscal and procurement
services, and environmental and social oversight. In addition, the cost
of monitoring and evaluation of the Compact is budgeted at
approximately $2.81 million.
4. Economic and Beneficiary Analysis
The Compact projects are expected to have reliable and demonstrable
impacts on economic growth and on incomes for residents in Zarqa
Governorate and Amman through improved efficiencies in the water
distribution network, as well as for a number of farmers in the lower
and middle Jordan Valley, who will receive reliable supplies of high
quality treated wastewater for use in irrigation.
The Compact projects reflect GOJ's priorities, are endorsed by the
Ministry of Water and Irrigation that will implement them, and respond
to public demands for improved public administration, investment, and
service provision. These are necessary and significant conditions for
sustained administrative and political support of MCC's investment and
lay the groundwork for effective project implementation. Finally,
consistent with MCC's results-focused approach, the Compact allows for
careful monitoring of implementation progress and rigorous evaluation
of the nature and magnitude of selected project impacts.
Table 1 presents a summary of the economic rates of return and the
number of beneficiaries that each Compact project and the Compact
program are expected to achieve.
Table 1--Summary of Economic Impacts
------------------------------------------------------------------------
MCC Economic
project rate of
Project cost return Beneficiaries
($M) (%)
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Water Network Project............ 102.57 19 1,600,000
Wastewater Network Project....... 58.22 14 2,020,000
As-Samra Expansion Project....... 93.03 ......... ...............
Total Compact.................... 253.82 16 \1\ 2,020,000
------------------------------------------------------------------------
\1\ The total number of beneficiaries does not sum because of overlap in
the beneficiary populations between projects.
Millennium Challenge Compact Between the United States of America,
Acting Through the Millennium Challenge Corporation, and Hashemite
Kingdom of Jordan, Acting Through the Ministry of Water and Irrigation
Table of Contents
Article 1. Goal and Objectives
Section 1.1 Compact Goal
Section 1.2 Program Objective
Section 1.3 Project Objectives
Article 2. Funding and Resources
Section 2.1 Program Funding
Section 2.2 Compact Implementation Funding
Section 2.3 MCC Funding
Section 2.4 Disbursement
Section 2.5 Interest
Section 2.6 Government Resources; Budget
Section 2.7 Limitations of the Use of MCC Funding
Section 2.8 Taxes
Section 2.9 Lower Middle Income Countries
Article 3. Implementation
Section 3.1 Program Implementation Agreement
Section 3.2 Government Responsibilities
Section 3.3 Policy Performance
Section 3.4 Accuracy of Information
Section 3.5 Implementation Letters
Section 3.6 Procurement
Section 3.7 Records; Accounting; Covered Providers; Access
Section 3.8 Audits; Reviews
Article 4. Communications
Section 4.1 Communications
Section 4.2 Representatives
Section 4.3 Signatures
Article 5. Termination; Suspension; Refunds
Section 5.1 Termination; Suspension
Section 5.2 Consequences of Termination, Suspension or
Expiration
Section 5.3 Refunds; Violation
Section 5.4 Survival
Article 6. Compact Annexes; Amendments; Governing Law
Section 6.1 Annexes
Section 6.2 Amendments
Section 6.3 Inconsistencies
Section 6.4 Governing Law
Section 6.5 Additional Instruments
Section 6.6 References to MCC Web site
[[Page 67124]]
Section 6.7 References to Laws, Regulations, Policies, and
Guidelines
Section 6.8 MCC Status
Article 7. Entry Into Force
Section 7.1 International Agreements
Section 7.2 Conditions Precedent to Entry into Force
Section 7.3 Date of Entry Into Force
Section 7.4 Compact Term
Section 7.5 Provisional Application
Annex I: Program Description
Annex II: Multi-Year Financial Plan Summary
Annex III: Description of the Monitoring and Evaluation Plan
Annex IV: Conditions to Disbursement of Compact Implementation
Funding
Annex V: Definitions
Annex VI: Tax Schedules
Millennium Challenge Compact
Preamble
This Millennium Challenge Compact (this ``Compact'') is between the
United States of America, acting through the Millennium Challenge
Corporation, a United States government corporation (``MCC''), and the
Hashemite Kingdom of Jordan (``Jordan'' or the ``Government''), acting
through the Ministry of Water and Irrigation (individually a ``Party''
and collectively, the ``Parties''). Capitalized terms used in this
Compact will have the meanings provided in Annex V.
Recalling that the Government consulted with the private sector and
civil society of Jordan to determine the priorities for the use of
assistance and developed and submitted to MCC a proposal for such
assistance to achieve lasting economic growth and poverty reduction;
and
Recognizing that MCC wishes to help Jordan implement the program
described herein to achieve the goal and objectives described herein
(as such program description and objectives may be amended from time to
time in accordance with the terms hereof, the ``Program'');
The Parties hereby agree as follows:
Article 1. Goal and Objectives
Section 1.1 Compact Goal
The goal of this Compact is to reduce poverty through economic
growth in Jordan (the ``Compact Goal'').
Section 1.2 Program Objective
The objective of the Program (the ``Program Objective'') is to
increase the effective supply of water available to the inhabitants of
Zarqa Governorate through improvements in the efficiency of water
delivery, the extent of wastewater collection and the capacity of
wastewater treatment. The Program consists of the projects described in
Annex I (each a ``Project'' and collectively, the ``Projects'').
Section 1.3 Project Objectives
The objectives of each of the Projects (each a ``Project
Objective'' and collectively, the ``Project Objectives'') are as
follows:
(a) The objectives of the Water Network Project are to (i) Improve
the efficiency of network water delivery and the condition of home
water systems, and (ii) decrease certain costs that households in Zarqa
Governorate incur to satisfy their subsistence water needs.
(b) The objectives of the Wastewater Network Project are to (i)
Increase access to the wastewater network, (ii) increase the volume of
wastewater collected within Zarqa Governorate for treatment and reuse,
and (iii) reduce the incidents of sewage overflow.
(c) The objectives of the As-Samra Expansion Project are to (i)
Increase the capacity to treat wastewater from Amman and Zarqa
Governorates, (ii) increase the volume of treated wastewater that is
available as a substitute for freshwater for non-domestic use, and
(iii) protect existing agriculture from the potential consequences of
pollution from untreated wastewater.
Article 2. Funding and Resources
Section 2.1 Program Funding
Upon entry into force of this Compact in accordance with Section
7.3, MCC will grant to the Government, under the terms of this Compact,
an amount not to exceed Two Hundred and Seventy Two Million Nine
Hundred and Eighty Thousand United States Dollars (US$272,980,000.00)
(``Program Funding'') for use by the Government to implement the
Program. The allocation of Program Funding is generally described in
Annex II.
Section 2.2 Compact Implementation Funding
(a) Upon signing of this Compact, MCC will grant to the Government,
under the terms of this Compact and in addition to the Program Funding
described in Section 2.1, an amount not to exceed Two Million One
Hundred and Twenty Thousand United States Dollars (US$2,120,000.00)
(``Compact Implementation Funding'') under Section 609(g) of the
Millennium Challenge Act of 2003, as amended (the ``MCA Act''), for use
by the Government to facilitate implementation of the Compact,
including for the following purposes:
(i) Financial management and procurement activities;
(ii) Administrative activities (including start-up costs such as
staff salaries) and administrative support expenses such as rent,
computers and other information technology or capital equipment;
(iii) Monitoring and evaluation activities;
(iv) Feasibility studies; and
(v) Other activities to facilitate Compact implementation as
approved by MCC.
The allocation of Compact Implementation Funding is generally
described in Annex II.
(b) Each Disbursement of Compact Implementation Funding is subject
to satisfaction of the conditions precedent to such disbursement as set
forth in Annex IV.
(c) If MCC determines that the full amount of Compact
Implementation Funding available under Section 2.2(a) exceeds the
amount that reasonably can be utilized for the purposes set forth in
Section 2.2(a), MCC, by written notice to the Government, may withdraw
the excess amount, thereby reducing the amount of the Compact
Implementation Funding available under Section 2.2(a) (such excess, the
``Excess CIF Amount''). In such event, the amount of Compact
Implementation Funding granted to the Government under Section 2.2(a)
will be reduced by the Excess CIF Amount, and MCC will have no further
obligations with respect to such Excess CIF Amount.
(d) MCC, at its option by written notice to the Government, may
elect to grant to the Government an amount equal to all or a portion of
such Excess CIF Amount as an increase in the Program Funding, and such
additional Program Funding will be subject to the terms and conditions
of this Compact applicable to Program Funding.
Section 2.3 MCC Funding
Program Funding and Compact Implementation Funding are collectively
referred to in this Compact as ``MCC Funding,'' and includes any
refunds or reimbursements of Program Funding or Compact Implementation
Funding paid by the Government in accordance with this Compact.
Section 2.4 Disbursement
In accordance with this Compact and the Program Implementation
Agreement, MCC will disburse MCC Funding for expenditures incurred in
furtherance of the Program (each instance, a ``Disbursement''). Subject
to the satisfaction of all applicable conditions precedent, the
proceeds of Disbursements will be made available to the Government, at
MCC's sole election,
[[Page 67125]]
by (a) deposit to one or more bank accounts established by the
Government and acceptable to MCC (each, a ``Permitted Account'') or (b)
direct payment to the relevant provider of goods, works or services for
the implementation of the Program. MCC Funding may be expended only for
Program expenditures.
Section 2.5 Interest
The Government will pay or transfer to MCC, in accordance with the
Program Implementation Agreement, any interest or other earnings that
accrue on MCC Funding prior to such funding being used for a Program
purpose.
Section 2.6 Government Resources; Budget
(a) Consistent with Section 609(b)(2) of the MCA Act, the
Government will make a contribution towards meeting the Program
Objective and Project Objectives of this Compact. Annex II describes
such contribution in more detail. In addition, the Government will
provide all funds and other resources and will take all actions that
are necessary to carry out the Government's responsibilities under this
Compact.
(b) The Government will use its best efforts to ensure that all MCC
Funding it receives or is projected to receive in each of its fiscal
years is fully accounted for in its annual budget on a multi-year
basis.
(c) The Government will not reduce the normal and expected
resources that it would otherwise receive or budget from sources other
than MCC for the activities contemplated under this Compact and the
Program.
(d) Unless the Government discloses otherwise to MCC in writing,
MCC Funding will be in addition to the resources that the Government
would otherwise receive or budget for the activities contemplated under
this Compact and the Program.
Section 2.7 Limitations on the Use of MCC Funding
The Government will ensure that MCC Funding is not used for any
purpose that would violate United States law or policy, as specified in
this Compact or as further notified to the Government in writing or by
posting from time to time on the MCC Web site at http://www.mcc.gov
(the ``MCC Web site''), including but not limited to the following
purposes:
(a) For assistance to, or training of, the military, police,
militia, national guard or other quasi-military organization or unit;
(b) For any activity that is likely to cause a substantial loss of
United States jobs or a substantial displacement of United States
production;
(c) To undertake, fund or otherwise support any activity that is
likely to cause a significant environmental, health, or safety hazard,
as further described in MCC's environmental and social assessment
guidelines and any guidance documents issued in connection with the
guidelines posted from time to time on the MCC Web site or otherwise
made available to the Government (collectively, the ``MCC Environmental
Guidelines''); or
(d) To pay for the performance of abortions as a method of family
planning or to motivate or coerce any person to practice abortions, to
pay for the performance of involuntary sterilizations as a method of
family planning or to coerce or provide any financial incentive to any
person to undergo sterilizations or to pay for any biomedical research
which relates, in whole or in part, to methods of, or the performance
of, abortions or involuntary sterilization as a means of family
planning.
Section 2.8 Taxes
(a) Unless the Parties specifically agree otherwise in writing, the
Government will ensure that all MCC Funding is free from the payment or
imposition of any existing or future taxes, duties, levies,
contributions or other similar charges (but not fees or charges for
services that are generally applicable in Jordan, reasonable in amount
and imposed on a non-discriminatory basis) (``Taxes'') of or in Jordan
(including any such Taxes imposed by a national, regional, local or
other governmental or taxing authority of or in Jordan). Specifically,
and without limiting the generality of the foregoing, MCC Funding will
be free from the payment of (i) Any tariffs, customs duties, import
taxes, export taxes, and other similar charges on any goods, works or
services introduced into Jordan in connection with the Program; (ii)
sales tax, value added tax, excise tax, property transfer tax, and
other similar charges on any transactions involving goods, works or
services in connection with the Program; (iii) taxes and other similar
charges on ownership, possession or use of any property in connection
with the Program; and (iv) taxes and other similar charges on income,
profits or gross receipts attributable to work performed in connection
with the Program and related social security taxes and other similar
charges on all natural or legal persons performing work in connection
with the Program except (x) natural persons who are citizens or
permanent residents of Jordan; and (y) legal persons formed under the
laws of Jordan (but excluding MCA-Jordan and any other entity formed
for the purpose of implementing the Government's obligations
hereunder).
(b) The mechanisms that the Government will use to implement the
tax exemption required by Section 2.8(a) are set forth in Annex VI.
Such mechanisms may include exemptions from the payment of Taxes that
have been granted in accordance with applicable law, refund or
reimbursement of Taxes by the Government to MCC, MCA-Jordan or to the
taxpayer, or payment by the Government to MCA-Jordan or MCC, for the
benefit of the Program, of an agreed amount representing any
collectible Taxes on the items described in Section 2.8(a).
(c) If a Tax has been paid contrary to the requirements of Section
2.8(a) or Annex VI, the Government will refund promptly to MCC (or to
another party as designated by MCC) the amount of such Tax in United
States Dollars or the currency of Jordan within thirty (30) days (or
such other period as may be agreed in writing by the Parties) after the
Government is notified in writing (whether by MCC or MCA-Jordan) that
such Tax has been paid.
(d) No MCC Funding, proceeds thereof or Program Assets may be
applied by the Government in satisfaction of its obligations under
Section 2.8(c).
Section 2.9 Lower Middle Income Countries
Section 606(b) of the MCA Act restricts the amount of assistance
that MCC may provide to ``lower middle income countries,'' a term that
is defined in the MCA Act and includes Jordan. To the extent that MCC
determines, in MCC's reasonable discretion, that the amount of Program
Funding granted to the Government in this Compact may result in a
violation of Section 606(b) of the MCA Act, MCC, at any time and from
time to time upon written notice to the Government, may reduce the
amount of Program Funding, or withhold any Disbursement of Program
Funding, to avoid or remedy such a violation.
Article 3. Implementation
Section 3.1 Program Implementation Agreement
The Parties will enter into an agreement providing further detail
on the implementation arrangements, fiscal accountability and
disbursement and use of MCC Funding, among other
[[Page 67126]]
matters (the ``Program Implementation Agreement'' or ``PIA''); and the
Government will implement the Program in accordance with this Compact,
the PIA, any other Supplemental Agreement and any Implementation
Letter.
Section 3.2 Government Responsibilities
(a) The Government has principal responsibility for overseeing and
managing the implementation of the Program.
(b) The Government hereby designates Millennium Challenge Account--
Jordan Limited Liability Company as the accountable entity to implement
the Program and to exercise and perform the Government's right and
obligation to oversee, manage and implement the Program, including
without limitation, managing the implementation of Projects and their
Activities, allocating resources and managing procurements. Such entity
will be referred to herein as ``MCA-Jordan,'' and has the authority to
bind the Government with regard to all Program activities. The
designation by this Section 3.2(b) will not relieve the Government of
any obligations or responsibilities hereunder or under any related
agreement, for which the Government remains fully responsible. MCC
hereby acknowledges and consents to the designation in this Section
3.2(b).
(c) The Government will ensure that any Program Assets or services
funded in whole or in part (directly or indirectly) by MCC Funding are
used solely in furtherance of this Compact and the Program unless MCC
agrees otherwise in writing.
(d) The Government will take all necessary or appropriate steps to
achieve the Program Objective and the Project Objectives during the
Compact Term (including, without limiting Section 2.6(a), funding all
costs that exceed MCC Funding and are required to carry out the terms
hereof and achieve such objectives, unless MCC agrees otherwise in
writing).
(e) The Government will fully comply with the Program Guidelines,
as applicable, in its implementation of the Program.
Section 3.3 Policy Performance
In addition to undertaking the specific policy, legal and
regulatory reform commitments identified in Annex I (if any), the
Government will seek to maintain and to improve its level of
performance under the policy criteria identified in Section 607 of the
MCA Act, and the selection criteria and methodology used by MCC.
Section 3.4 Accuracy of Information
The Government assures MCC that, as of the date this Compact is
signed by the Government, the information provided to MCC by or on
behalf of the Government in the course of reaching agreement with MCC
on this Compact is true, correct and complete in all material respects.
Section 3.5 Implementation Letters
From time to time, MCC may provide guidance to the Government in
writing on any matters relating to this Compact, MCC Funding or
implementation of the Program (each, an ``Implementation Letter''). The
Government will use such guidance in implementing the Program. The
Parties may also issue jointly agreed-upon Implementation Letters to
confirm and record their mutual understanding on aspects related to the
implementation of this Compact, the PIA or other related agreements.
Section 3.6 Procurement
The Government will ensure that the procurement of all goods, works
and services by the Government or any Provider to implement the Program
will be consistent with the ``MCC Program Procurement Guidelines''
posted from time to time on the MCC Web site (the ``MCC Program
Procurement Guidelines''). The MCC Program Procurement Guidelines
include the following requirements, among others:
(a) Open, fair, and competitive procedures must be used in a
transparent manner to solicit, award and administer contracts and to
procure goods, works and services;
(b) Solicitations for goods, works, and services must be based upon
a clear and accurate description of the goods, works and services to be
acquired;
(c) Contracts must be awarded only to qualified contractors that
have the capability and willingness to perform the contracts in
accordance with their terms on a cost effective and timely basis; and
(d) No more than a commercially reasonable price, as determined,
for example, by a comparison of price quotations and market prices,
will be paid to procure goods, works and services.
Furthermore, any person or entity on (i) The master list of
Specifically Designated Nationals and Blocked Persons maintained by the
U.S. Department of Treasury's Office of Foreign Assets Control, (ii)
the consolidated list of individuals and entities maintained by the
``1267 Committee'' of the United Nations Security Council, (iii) the
list maintained on http://www.epls.gov, or (iv) other lists specified
by MCC will be ineligible to participate in an MCC-funded procurement
or to receive MCC Funding.
Section 3.7 Records; Accounting; Covered Providers; Access
(a) Government Books and Records. The Government will maintain, and
will use its best efforts to ensure that all Covered Providers
maintain, accounting books, records, documents and other evidence
relating to the Program adequate to show, to MCC's satisfaction, the
use of all MCC Funding and the implementation and results of the
Program (``Compact Records''). In addition, the Government will furnish
or cause to be furnished to MCC, upon its request, originals or copies
of such Compact Records.
(b) Accounting. The Government will maintain and will use its best
efforts to ensure that all Covered Providers maintain Compact Records
in accordance with generally accepted accounting principles prevailing
in the United States, or at the Government's option and with MCC's
prior written approval, other accounting principles, such as those (i)
prescribed by the International Accounting Standards Board or (ii) then
prevailing in Jordan. Compact Records must be maintained for at least
five (5) years after the end of the Compact Term or for such longer
period, if any, required to resolve any litigation, claims or audit
findings or any applicable legal requirements.
(c) Providers and Covered Providers. Unless the Parties agree
otherwise in writing, a ``Provider'' is (i) any entity of the
Government that receives or uses MCC Funding or any other Program Asset
in carrying out activities in furtherance of this Compact or (ii) any
third party that receives at least US$50,000 in the aggregate of MCC
Funding (other than as salary or compensation as an employee of an
entity of the Government) during the Compact Term. A ``Covered
Provider'' is (1) a non-United States Provider that receives (other
than pursuant to a direct contract or agreement with MCC) US$300,000 or
more of MCC Funding in any Government fiscal year or any other non-
United States person or entity that receives, directly or indirectly,
US$300,000 or more of MCC Funding from any Provider in such fiscal year
or (2) any United States Provider that receives (other than pursuant to
a direct contract or agreement with MCC) US$500,000 or more of MCC
Funding in any Government fiscal year or any other United States person
or entity that receives, directly or indirectly,
[[Page 67127]]
US$500,000 or more of MCC Funding from any Provider in such fiscal
year.
(d) Access. Upon MCC's request, the Government, at all reasonable
times, will permit, or cause to be permitted, authorized
representatives of MCC, an authorized Inspector General of MCC
(``Inspector General''), the United States Government Accountability
Office, any auditor responsible for an audit contemplated herein or
otherwise conducted in furtherance of this Compact, and any agents or
representatives engaged by MCC or the Government to conduct any
assessment, review or evaluation of the Program, the opportunity to
audit, review, evaluate or inspect facilities, assets and activities
funded in whole or in part by MCC Funding.
Section 3.8 Audits; Reviews
(a) Government Audits. Except as the Parties may agree otherwise in
writing, the Government will, on at least a semi-annual basis, conduct,
or cause to be conducted, financial audits of all disbursements of MCC
Funding covering the period from signing of this Compact until the
earlier of the following December 31 or June 30 and covering each six-
month period thereafter ending December 31 and June 30, through the end
of the Compact Term. In addition, upon MCC's request, the Government
will ensure that such audits are conducted by an independent auditor
approved by MCC and named on the list of local auditors approved by the
Inspector General or a United States-based certified public accounting
firm selected in accordance with the ``Guidelines for Financial Audits
Contracted by MCA'' (the ``Audit Guidelines'') issued and revised from
time to time by the Inspector General, which are posted on the MCC Web
site. Audits will be performed in accordance with the Audit Guidelines
and be subject to quality assurance oversight by the Inspector General.
Each audit must be completed and the audit report delivered to MCC no
later than 90 days after the first period to be audited and no later
than 90 days after each June 30 and December 31 thereafter, or such
other period as the Parties may otherwise agree in writing.
(b) Audits of Other Entities. The Government will ensure that MCC-
financed agreements between the Government or any Provider, on the one
hand, and (i) a United States nonprofit organization, on the other
hand, state that the United States nonprofit organization is subject to
the applicable audit requirements contained in OMB Circular A-133,
``Audits of States, Local Governments, and Non-Profit Organizations,''
issued by the United States Office of Management and Budget; (ii) a
United States for-profit Covered Provider, on the other hand, state
that the United States for-profit organization is subject to audit by
the applicable United States Government agency, unless the Government
and MCC agree otherwise in writing; and (iii) a non-US Covered
Provider, on the other hand, state that the non-US Covered Provider is
subject to audit in accordance with the Audit Guidelines.
(c) Corrective Actions. The Government will use its best efforts to
ensure that each Covered Provider (i) takes, where necessary,
appropriate and timely corrective actions in response to audits; (ii)
considers whether the results of the Covered Provider's audit
necessitates adjustment of the Government's records; and (iii) permits
independent auditors to have access to its records and financial
statements as necessary.
(d) Audit by MCC. MCC will have the right to arrange for audits of
the Government's use of MCC Funding.
(e) Cost of Audits, Reviews or Evaluations. MCC Funding may be used
to fund the costs of any audits, reviews or evaluations required under
this Compact.
Article 4. Communications
Section 4.1 Communications
Any document or communication required or submitted by either Party
to the other under this Compact must be in writing and, except as
otherwise agreed with MCC, in English. For this purpose, the address of
each Party is set forth below.
To MCC:
Millennium Challenge Corporation, Attention: Vice President,
Compact Operations, (with a copy to the Vice President and General
Counsel), 875 Fifteenth Street, NW., Washington, DC 20005, United
States of America, Facsimile: (202) 521-3700, Telephone: (202) 521-
3600, E-mail: [email protected] (Vice President, Compact
Operations), [email protected] (Vice President and General
Counsel).
To the Government:
Ministry of Planning and International Cooperation, P.O. Box 555,
Amman 11118, Jordan, Tel: +962 6 4642246, Fax: +962 6 4642247.
Section 4.2 Representatives
For all purposes of this Compact, the Government will be
represented by the individual holding the position of, or acting as,
the Minister of Planning and International Cooperation, and MCC will be
represented by the individual holding the position of, or acting as,
Vice President, Compact Operations (each of the foregoing, a
``Principal Representative''). Each Party, by written notice to the
other Party, may designate one or more additional representatives
(each, an ``Additional Representative'') for all purposes other than
signing amendments to this Compact. The Government hereby designates
the Chairperson of the Board of MCA-Jordan as an Additional
Representative. A Party may change its Principal Representative to a
new representative that holds a position of equal or higher authority
upon written notice to the other Party.
Section 4.3 Signatures
Signatures to this Compact and to any amendment to this Compact
will be original signatures appearing on the same page or in an
exchange of letters or diplomatic notes. With respect to all documents
arising out of this Compact (other than the Program Implementation
Agreement) and amendments thereto, signatures may, as appropriate, be
delivered by facsimile or electronic mail and in counterparts and will
be binding on the Party delivering such signature to the same extent as
an original signature would be.
Article 5. Termination; Suspension; Expiration
Section 5.1 Termination; Suspension
(a) Either Party may terminate this Compact without cause in its
entirety by giving the other Party thirty (30) days' prior written
notice. MCC may also terminate this Compact or MCC Funding without
cause in part by giving the Government thirty (30) days' prior written
notice.
(b) MCC may, immediately, upon written notice to the Government,
suspend or terminate this Compact or MCC Funding, in whole or in part,
and any obligation related thereto, if MCC determines that any
circumstance identified by MCC, as a basis for suspension or
termination (whether in writing to the Government or by posting on the
MCC Web site) has occurred, which circumstances include but are not
limited to the following:
(i) The Government fails to comply with its obligations under this
Compact or any other agreement or arrangement entered into by the
Government in connection with this Compact or the Program;
(ii) An event or series of events has occurred that makes it
probable that the Program Objective or any of the Project Objectives
will not be achieved during
[[Page 67128]]
the Compact Term or that the Government will not be able to perform its
obligations under this Compact;
(iii) A use of MCC Funding or continued implementation of this
Compact or the Program violates applicable law or United States
Government policy, whether now or hereafter in effect;
(iv) The Government or any other person or entity receiving MCC
Funding or using Program Assets is engaged in activities that are
contrary to the national security interests of the United States;
(v) An act has been committed or an omission or an event has
occurred that would render Jordan ineligible to receive United States
economic assistance under Part I of the Foreign Assistance Act of 1961,
as amended (22 U.S.C. 2151 et seq.), by reason of the application of
any provision of such act or any other provision of law;
(vi) The Government has engaged in a pattern of actions
inconsistent with the criteria used to determine the eligibility of
Jordan for assistance under the MCA Act; and
(vii) The Government or another person or entity receiving MCC
Funding or using Program Assets is found to have been convicted of a
narcotics offense or to have been engaged in drug trafficking.
Section 5.2 Consequences of Termination, Suspension or Expiration
(a) Upon the suspension or termination, in whole or in part, of
this Compact or any MCC Funding, or upon the expiration of this
Compact, the provisions of Section 4.2 of the Program Implementation
Agreement will govern the post-suspension, post-termination or post-
expiration treatment of MCC Funding, any related Disbursements and
Program Assets. Any portion of this Compact, MCC Funding, the Program
Implementation Agreement or any other Supplemental Agreement that is
not suspended or terminated will remain in full force and effect.
(b) MCC may reinstate any suspended or terminated MCC Funding under
this Compact if MCC determines that the Government or other relevant
person or entity has committed to correct each condition for which MCC
Funding was suspended or terminated.
Section 5.3 Refunds; Violation
(a) If any MCC Funding, any interest or earnings thereon, or any
Program Asset is used for any purpose in violation of the terms of this
Compact, then MCC may require the Government to repay to MCC in United
States Dollars the value of the misused MCC Funding, interest,
earnings, or asset, plus interest within thirty (30) days after the
Government's receipt of MCC's request for repayment. The Government
will not use MCC Funding, proceeds thereof or Program Assets to make
such payment.
(b) Notwithstanding any other provision in this Compact or any
other existing agreement to the contrary, MCC's right under Section
5.3(a) for a refund will continue during the Compact Term and for a
period of (i) five (5) years thereafter or (ii) one (1) year after MCC
receives actual knowledge of such violation, whichever is later.
(c) In addition to Section 5.3(a), MCC will be entitled to any
refund of Program Funding related to the As-Samra Expansion Project to
the extent such refund is contemplated by the Program Implementation
Agreement.
Section 5.4 Survival
The Government's responsibilities under Sections 2.7, 3.7, 3.8,
5.2, 5.3, 5.4, and 6.4 will survive the expiration, suspension or
termination of this Compact.
Article 6. Compact Annexes; Amendments; Governing Law
Section 6.1 Annexes
Each annex to this Compact constitutes an integral part hereof, and
references to ``Annex'' mean an annex to this Compact unless otherwise
expressly stated.
Section 6.2 Amendments
(a) The Parties may amend this Compact only by a written agreement
signed by the Principal Representatives (or such other government
official designated by the relevant Principal Representative).
(b) Notwithstanding Section 6.2(a), the Parties may agree in
writing, signed by the Principal Representatives (or such other
government official designated by the relevant Principal
Representative) or any Additional Representative, to modify any Annex
to (i) suspend, terminate or modify any Project or Activity, or to
create a new project; (ii) change the allocations of funds as set forth
in Annex II as of the date hereof (including to allocate funds to a new
project); (iii) modify the Implementation Framework described in Annex
I; or (iv) add, delete or waive any condition precedent described in
Annex IV; provided that, in each case, any such modification (1) is
consistent in all material respects with the Program Objective and
Project Objectives; (2) does not cause the amount of Program Funding to
exceed the aggregate amount specified in Section 2.1 (as may be
modified by operation of Section 2.2(d)); (3) does not cause the amount
of Compact Implementation Funding to exceed the aggregate amount
specified in Section 2.2(a); (4) does not reduce the Government's
responsibilities or contribution of resources required under Section
2.6(a); and (5) does not extend the Compact Term.
Section 6.3 Inconsistencies
In the event of any conflict or inconsistency between:
(a) Any Annex and any of Articles 1 through 7, such Articles 1
through 7, as applicable, will prevail; or
(b) This Compact and any other agreement between the Parties
regarding the Program, this Compact will prevail.
Section 6.4 Governing Law
This Compact is an international agreement and as such will be
governed by the principles of international law.
Section 6.5 Additional Instruments
Any reference to activities, obligations or rights undertaken or
existing under or in furtherance of this Compact or similar language
will include activities, obligations and rights undertaken by, or
existing under or in furtherance of any agreement, document or
instrument related to this Compact and the Program.
Section 6.6 References to MCC Web site
Any reference in this Compact, the PIA or any other agreement
entered into in connection with this Compact, to a document or
information available on, or notified by posting on the MCC Web site
will be deemed a reference to such document or information as updated
or substituted on the MCC Web site from time to time.
Section 6.7 References to Laws, Regulations, Policies and Guidelines
Each reference in this Compact, the PIA or any other agreement
entered into in connection with this Compact, to a law, regulation,
policy, guideline or similar document will be construed as a reference
to such law, regulation, policy, guideline or similar document as it
may, from time to time, be amended, revised, replaced, or extended and
will include any law, regulation, policy, guideline or similar document
issued under or otherwise applicable or related to such law,
regulation, policy, guideline or similar document.
Section 6.8 MCC Status
MCC is a United States government corporation acting on behalf of
the
[[Page 67129]]
United States Government in the implementation of this Compact. MCC and
the United States Government assume no liability for any claims or loss
arising out of activities or omissions under this Compact. The
Government waives any and all claims against MCC or the United States
Government or any current or former officer or employee of MCC or the
United States Government for all loss, damage, injury, or death arising
out of activities or omissions under this Compact, and agrees that it
will not bring any claim or legal proceeding of any kind against any of
the above entities or persons for any such loss, damage, injury, or
death. The Government agrees that MCC and the United States Government
or any current or former officer or employee of MCC or the United
States Government will be immune from the jurisdiction of all courts
and tribunals of Jordan for any claim or loss arising out of activities
or omissions under this Compact.
Article 7. Entry Into Force
Section 7.1 International Agreements
The Parties understand that each of the Compact and the Project
Implementation Agreement, upon its entry into force, will prevail over
the domestic laws of Jordan.
Section 7.2 Conditions Precedent to Entry Into Force
Before this Compact enters into force:
(a) The Program Implementation Agreement must have been signed by
the parties thereto;
(b) The Government must have delivered to MCC:
(i) A letter signed and dated by the Principal Representative of
the Government, or such other duly authorized representative of the
Government acceptable to MCC, confirming that the Government has
completed its domestic requirements for this Compact to enter into
force and that the other conditions precedent to entry into force in
this Section 7.2 have been met;
(ii) A signed legal opinion from the Minister of Justice of Jordan
(or such other legal representative of the Government acceptable to
MCC), in form and substance satisfactory to MCC; and
(iii) Complete, certified copies of all decrees, legislation,
regulations or other governmental documents relating to the
Government's domestic requirements for this Compact to enter into
force, which MCC may post on its Web site or otherwise make publicly
available;
(c) MCC shall not have determined that after signature of this
Compact, the Government has engaged in a pattern of actions
inconsistent with the eligibility criteria for MCC Funding;
(d) The Government has delivered to MCC a plan, in form and
substance satisfactory to MCC, including any necessary adjustments to
wastewater tariffs in Amman and Zarqa Governorates, for fully funding
the projected treatment charges payable as a result of the As-Samra
Expansion Project;
(e) The Government has delivered to MCC a plan, in form and
substance satisfactory to MCC, including any necessary adjustments to
water and wastewater tariffs in Zarqa Governorate, to ensure projected
revenues fully fund projected operations and maintenance costs of the
water and wastewater network in Zarqa Governorate no later than 2015;
and
(f) MCC has determined in its sole discretion, after consultation
with the Government, that there has been satisfactory progress with
respect to the As-Samra Expansion Project.
Section 7.3 Date of Entry Into Force
This Compact will enter into force on the date of the letter from
MCC to the Government in an exchange of letters confirming that MCC has
completed its domestic requirements for entry into force of this
Compact and that the conditions precedent to entry into force in
Section 7.2 have been met.
Section 7.4 Compact Term
This Compact will remain in force for five (5) years after its
entry into force, unless terminated earlier under Section 5.1 (the
``Compact Term'').
Section 7.5 Provisional Application
Upon signature of this Compact and until this Compact has entered
into force in accordance with Section 7.3, the Parties will
provisionally apply the terms of this Compact; provided that, no MCC
Funding, other than Compact Implementation Funding, will be made
available or disbursed before this Compact enters into force.
In Witness Whereof, the undersigned, duly authorized by their
respective governments, have signed this Compact.
Done at Washington, DC, this 25th day of October 2010, in the
English language only.
The United States of America, acting through the Millennium
Challenge Corporation,
Daniel W. Yohannes,
Chief Executive Officer.
The Hashemite Kingdom of Jordan, acting through the Ministry of
Water and Irrigation,
Mohammad Najjar,
Minister of Water and Irrigation.
Annex I Program Description
This Annex I describes the Program that MCC Funding will support in
Jordan during the Compact Term.
A. Program Overview
1. Background and Consultative Process
Jordan is a highly urbanized Middle Eastern country with a
population of approximately six million people. With limited access to
surface water or naturally recharged aquifers, Jordan ranks among the
world's five most water poor countries.
Jordan was deemed eligible for MCC Compact assistance in 2006. Late
in 2007, the Government established the Millennium Challenge Unit (the
``MCU'') to work directly with MCC to manage the process of developing
a proposed Compact program. Following a detailed constraints analysis
and sector analysis, the MCU conducted a broad consultative process
that garnered feedback from private sector representatives, civil
society organizations, donors, and ordinary citizens through large,
town-hall style meetings in each of Jordan's twelve governorates.
Throughout this process, the challenge of addressing Jordan's severe
water shortages emerged as a key priority.
The MCU invited key stakeholders in the water, sewer and sanitation
sector to participate in a project design workshop that focused on the
objective of making more water available to households and commercial
users. Stakeholders emphasized the need to (a) improve water delivery
systems to reduce water losses and (b) expand capacities for collecting
and treating wastewater and reusing it in agriculture, wherever
appropriate.
The Government has identified specific projects related to the
rehabilitation of the water distribution system and expansion of the
capacity for collecting and treating wastewater in Zarqa Governorate,
among the poorest and most urban areas in the country, and the
expansion of the capacity of an existing wastewater treatment plant
that treats the majority of wastewater from Amman and Zarqa
Governorates.
2. Program Objective
The Program Objective is to increase the effective supply of water
available to the inhabitants of Zarqa Governorate through improvements
in the efficiency of water delivery, the extent of wastewater
collection and the capacity of wastewater treatment. The Program
consists of the Water Network Project, the Wastewater Network Project
and the
[[Page 67130]]
As-Samra Expansion Project, as further described in this Annex I.
3. Environmental and Social Safeguards
All of the Projects will be implemented in compliance with the MCC
Environmental Guidelines and the MCC Gender Policy, and any involuntary
resettlement will be carried out in accordance with the World Bank's
Operational Policy on Involuntary Resettlement in effect as of July
2007 (``OP 4.12'') in a manner acceptable to MCC. The Government also
will ensure that the Projects comply with all national environmental
laws and regulations, licenses and permits, except to the extent such
compliance would be inconsistent with this Compact. Specifically, the
Government will (a) cooperate with or complete, as the case may be, any
ongoing environmental and social impact assessments, or if necessary
undertake and complete any additional environmental and social
assessments, environmental and social management plans, environmental
and social audits, resettlement policy frameworks, and resettlement
action plans required under the laws of Jordan, the MCC Environmental
Guidelines, this Compact, the Program Implementation Agreement, or any
other Supplemental Agreement, or as otherwise required by MCC, each in
form and substance satisfactory to MCC; (b) ensure that Project-
specific environmental and social management plans are developed and
all relevant measures contained in such plans are integrated into
project design, the applicable procurement documents and associated
finalized contracts, in each case in form and substance satisfactory to
MCC; and (c) implement to MCC's satisfaction appropriate environmental
and social mitigation measures identified in such assessments or plans
or developed to address environmental and social issues identified
during implementation. Unless MCC agrees otherwise in writing, the
Government will fund all necessary costs of environmental and social
mitigation measures (including, without limitation, costs of
resettlement) not specifically provided for, or that exceed the MCC
Funding specifically allocated for such costs, in the Detailed
Financial Plan for any Project.
To maximize the positive social impacts of the Projects, address
cross-cutting social and gender issues such as human trafficking, child
and forced labor, and HIV/AIDS, and ensure compliance with the MCC
Gender Policy, the Government will (i) develop a comprehensive social
and gender integration plan which, at a minimum, incorporates the
findings of a comprehensive gender analysis, identifies approaches for
regular, meaningful and inclusive consultations with women and other
vulnerable/underrepresented groups, consolidates the findings and
recommendations of Project-specific social and gender analyses and sets
forth strategies for incorporating findings of the social and gender
analyses into final Project designs, as appropriate (``Social and
Gender Integration Plan''); and (ii) ensure, through monitoring and
coordination during implementation, that final Activity designs,
construction tender documents, other bidding documents, and
implementation plans are consistent with and incorporate the outcomes
of the social and gender analyses and Social and Gender Integration
Plan.
B. Description of Projects
Set forth below is a description of each of the Projects that the
Government will implement, or cause to be implemented, using MCC
Funding to advance the applicable Project Objectives. In addition,
specific activities that will be undertaken within each Project (each,
an ``Activity''), including sub-activities, are also described.
1. Water Network Project
(a) Summary of Project and Activities.
The objectives of the water network restructuring and
rehabilitation project (the ``Water Network Project'') are to (1)
improve the efficiency of network water delivery and the condition of
home water systems, and (2) decrease certain costs that households in
Zarqa Governorate incur to satisfy their subsistence water needs. The
Water Network Project is designed to address high rates of water loss
in the water supply network in Zarqa Governorate and provide direct
assistance to poor households in improving their household water and
sanitation infrastructure.
The Water Network Project is comprised of two Activities: (A) The
restructuring and rehabilitation of the water supply systems in key
areas of Zarqa Governorate (the ``Infrastructure Investment
Activity''); and (B) assistance to households to improve the plumbing,
water storage, sewage connections, and general awareness of best
practices for sanitation and water efficiency (the ``Water Smart Homes
Activity,'' or ``WSH Activity'').
(i) Infrastructure Investment Activity.
The Infrastructure Investment Activity is designed to restructure
and rehabilitate transmission and distribution water supply systems in
key areas of Zarqa Governorate. In addition to reducing physical leaks,
this Activity is designed to facilitate the transition of the water
supply systems from periodic distribution under high pressure to more
frequent, gravity-fed distribution. The Infrastructure Investment
Activity consists of the following three sub-activities:
(1) Strategic Infrastructure Works. This sub-activity is designed
to install up to 65 system meters at up to 32 locations, and conduct
condition assessments of the system through mapping and geographic
information systems (``GIS'').
(2) Zarqa Water Supply Area (``WSA'') Works. This sub-activity is
designed to rehabilitate, restructure, and upgrade works in the
primary, secondary and tertiary water supply systems in the Zarqa WSA.
Primary infrastructure works to be supported by MCC Funding include:
(A) Strategic metering in the following three distribution areas:
Zarqa High, Zarqa North, and Zarqa Mid-Batrawi (other than the Al-
Gweireyeh area) (collectively, the ``Zarqa Distribution Areas'');
(B) Mapping and GIS condition assessments;
(C) Construction of primary systems from Batrawi and Zarqa High
Reservoirs to the Zarqa Distribution Areas;
(D) Creation of up to 63 district metering area (``DMA'')
connection points;
(E) Rehabilitation and restructuring of up to 44 km of primary
systems; and
(F) Upgrading the existing reservoir at Zarqa Pump Station.
Secondary infrastructure works to be supported by MCC Funding
include the rehabilitation and restructuring of up to 595 km of
secondary network pipelines.
Tertiary infrastructure works to be supported by MCC Funding
include:
(G) Rehabilitation and restructuring of up to 37 km of tertiary
network pipelines;
(H) Replacement of up to 23,737 customer meters; and
(I) Restructuring of up to 29,371 customer connection points.
(3) Ruseifa WSA Works. This sub-activity is designed to
rehabilitate, restructure, and upgrade works in the water systems in
the Ruseifa WSA. Primary infrastructure works to be supported by MCC
Funding include:
(A) Strategic metering for the following distribution areas:
Ruseifa High and Ruseifa Low (collectively, the ``Ruseifa Distribution
Areas'');
(B) Mapping and GIS condition assessments;
(C) Creation of up to 26 DMA connection points;
[[Page 67131]]
(D) Construction of up to 6 km of new primary network pipeline and
upgrade of up to 11 km of existing primary network pipeline; and
(E) Construction of new Basateen pumping station and upgrading of
the existing Basateen Reservoir.
Secondary infrastructure works to be supported by MCC Funding
include the rehabilitation and restructuring of up to 332 km of
secondary network pipelines.
Tertiary infrastructure works to be supported by MCC Funding
include:
(F) Rehabilitation and restructuring of up to 219 km of tertiary
network pipelines;
(G) Replacement of up to 9,786 customer meters; and
(H) Restructuring of up to 15,813 customer connection points.
(ii) Water Smart Homes Activity.
The WSH Activity is designed to improve the condition of home water
systems and enhance the benefits that households, particularly poor
households, gain from increases in the effective supply of water in
Zarqa Governorate. The WSH Activity consists of the following two sub-
activities:
(1) WSH Outreach Campaign. This sub-activity is designed to
disseminate information on techniques for cleaning water storage tanks
and properly maintaining home water systems, along with the benefits of
regular maintenance, to households in the geographic areas targeted by
the Infrastructure Investment Activity (the ``WSH Outreach Campaign''),
and
(2) WSH Direct Assistance Program. This sub-activity is designed to
provide technical and financial assistance to poor households in Zarqa
Governorate for critical improvements in their home systems for water
storage, water delivery and sanitation, in exchange for certain cost-
sharing fees (the ``WSH Direct Assistance Program''). The WSH Direct
Assistance Program is expected to support replacement of water storage
tanks, replacement of pipes, installation of water-saving faucets and
construction of proper connections to the wastewater collection system,
as needed. Eligible recipients for MCC Funding under this sub-activity
must first qualify for the National Aid Fund, a Ministry of Social
Development program that provides financial support to the very poor.
(b) Beneficiaries.
The Water Network Project is expected to benefit approximately
302,000 households, for a total of 1,600,000 individuals, over twenty
years. This figure represents the projected total population of Zarqa
Governorate who may benefit from the efficiency gains anticipated in
the water supply network. This figure includes an estimated 110,000
households, for a total of 600,000 people, who will benefit directly
from changes in domestic expenditure or higher consumption of water
provided through the water supply network. An estimated four percent of
beneficiaries will be among those living on less than US$2.00 per day
on a purchasing power parity basis, with those living on US$2.00-
US$4.00 per day representing another quarter of the total
beneficiaries.
This figure also includes 3,500 poor households, for a total of
almost 19,000 individuals, who will benefit from direct assistance to
rehabilitate their household water and sanitation systems.
(c) Environmental and Social Mitigation Measures.
Consultants responsible for the feasibility study of the
Infrastructure Investment Activity completed a preliminary
environmental and social impact assessment (``PESIA'') in May 2010. In
the PESIA provided to the Ministry of Water and Irrigation (``MWI''),
the consultants recommended a Category B classification under the MCC
Environmental Guidelines and a Category 2 classification under
Jordanian regulations. MWI will submit this recommendation, along with
a project overview and a copy of the PESIA, to the Ministry of
Environment (``MOE'') for its evaluation of the classification under
Jordanian law. MOE has yet to issue its determination of the project
category. Depending on the final categorization by MOE and MCC's
assessment of the final resettlement requirements, a detailed
Environmental and Social Impact Assessment (``ESIA'') may be required.
Discussions among MCC, MWI and MOE have defined a process for the
detailed ESIA that meets mutual requirements for evaluating
environmental and social impacts, conducting transparent and inclusive
public consultations, developing detailed management plans and meeting
expectations for social analysis, including gender and social issues
and resettlement concerns consistent with OP 4.12. Estimates for
mitigations resulting from the ESIA have been included in the Multi-
Year Financial Plan Summary.
2. Wastewater Network Project
(a) Summary of Project and Activities.
The objectives of the wastewater network reinforcement and
expansion project (the ``Wastewater Network Project'') are to (1)
Increase access to the wastewater network, (2) increase the volume of
wastewater collected within Zarqa Governorate for treatment and reuse,
and (3) reduce the incidents of sewage overflow. The Wastewater Network
Project is designed to increase the carrying capacity of impaired sewer
main lines, reduce periodic overflows in the wastewater collection
network, and extend lateral sewer lines to urban neighborhoods in which
populations are not currently connected to the wastewater collection
network.
The Wastewater Network Project is comprised of two Activities: (A)
The reinforcement of existing networks and rehabilitation of existing
sewer main lines in West Zarqa (the ``West Zarqa Pumping Station Zone
Activity''), and (B) the reinforcement of existing networks and
rehabilitation of existing sewer main lines in East Zarqa (the ``East
Zarqa Pumping Station Zone Activity'').
(i) West Zarqa Pumping Station Zone Activity. In the West Zarqa
zone, MCC Funding will support:
(1) Expanding the lateral sewers by up to 102km of pipe for
collection systems and house connections;
(2) Reinforcing the network by replacing up to 10km of main trunk
lines and constructing up to 3km of new main trunk lines; and
(3) Rehabilitating existing sewer main lines by replacing up to 7km
of blocked sewers.
(ii) East Zarqa Pumping Station Zone Activity. In the East Zarqa
zone, MCC Funding will support:
(1) Expanding the lateral sewers by up to 38km of pipe for
collection systems and house connections;
(2) Reinforcing the network by replacing up to 4km of main trunk
lines; and
(3) Rehabilitating existing sewer main lines by replacing up to 8km
of blocked sewers.
(b) Beneficiaries.
The Wastewater Network Project will provide direct benefits to the
residents of East Zarqa and West Zarqa, where up to 19,000 households,
for a total of approximately 100,000 people, will have opportunities to
connect to new lateral sewer lines over the next twenty years and
forego the installation, maintenance and potential health risks
associated with the use of cesspits in an urban environment.
(c) Environmental and Social Mitigation Measures.
The consultant responsible for the feasibility study of the
Wastewater Network Project completed a PESIA in May 2010. In the PESIA
provided to MWI, the consultants recommended a Category B
classification under the MCC Environmental Guidelines and a Category 2
classification under Jordanian regulations. MWI submitted this
recommendation, along with a project overview and a copy of the
[[Page 67132]]
PESIA, to MOE for its evaluation of the classification under Jordanian
law. Based on the findings from the PESIA, MOE assigned the Project a
Category 1 classification under Jordanian regulations. A full, detailed
ESIA is currently underway. Discussions among MCC, MWI and MOE have
defined a process for the detailed ESIA that meets mutual requirements
for evaluating environmental and social impacts, conducting transparent
and inclusive public consultations, developing detailed management
plans and meeting expectations for social analysis, including gender
and social issues and resettlement concerns consistent with OP 4.12.
Estimates for mitigations resulting from the ESIA have been included in
the Multi-Year Financial Plan Summary.
3. As-Samra Expansion Project
(a) Summary of Project and Activities.
The objectives of the As-Samra Wastewater Treatment Plant expansion
project (the ``As-Samra Expansion Project'') are to (i) Increase the
capacity to treat wastewater from Amman and Zarqa Governorates, (ii)
increase the volume of treated wastewater that is available as a
substitute for freshwater for non-domestic use, and (iii) protect
existing agriculture from the potential consequences of pollution from
untreated wastewater.
MCC Funding for the As-Samra Expansion Project will support a
portion of the cost associated with the construction of the expansion
of the existing As-Samra Wastewater Treatment Plant. MCC Funding will
also support technical assistance for the management and supervision of
the construction.
The expansion is designed to increase the hydraulic capacity of the
existing treatment plant and its ability to handle suspended solids and
biological materials, among other critical treatment requirements. The
expanded plant will use activated-sludge technology with several
important characteristics: (1) Primary settling, (2) biological
treatment and clarification, (3) disinfection by chlorination, (4)
energy recovery from treated water, (5) primary and biological sludge
thickening, (6) sludge digestion and biogas energy recovery, (7)
digested sludge storage, (8) ventilation and odor control, and (9) a
mechanical dewatering process that is designed to accelerate
decomposition and reduce volumes of sludge. The average daily hydraulic
capacity of the plant is expected to increase from 267,000 cubic meters
per day to 364,800 cubic meters per day; the capacity for treating
total suspended solids (``TSS'') is expected to increase from 147,000
kilograms per day to 236,800 kilograms per day; and the biological
oxygen demand (``BOD5'') capacity is expected to increase
from 174,000 kilograms per day to 232,200 kilograms per day. The
treatment, storage and disposal of sludge and the quality of the final
effluent are required to comply at all times with (A) the applicable
Jordanian standards for sludge and for water discharged to wadis and
catchment areas, and (B) the minimum technical requirements under the
As-Samra Project Agreement. The expansion is expected to meet the
region's wastewater treatment needs through 2025.
(b) Beneficiaries.
Together with the Wastewater Network Project, the As-Samra
Expansion Project will benefit approximately 375,000 households, for a
total of 2,020,000 people, in Amman and Zarqa Governorates. These
households will benefit from additional supplies of freshwater that can
be transferred to these areas as these Projects make larger volumes of
treated wastewater available for substitution in agricultural
applications in the Jordan Valley. This includes approximately 8,500
households in the Jordan Valley, for a total of 46,000 people that are
expected to benefit from consistent supplies of high-quality treated
wastewater that can be used in irrigation.
(c) Environmental and Social Mitigation Measures.
The As-Samra Wastewater Treatment Plant is located on land that is
owned by MWI and located approximately 2km from the nearest town,
Khirbet As-Samra, and far from other large population centers,
including Amman and Zarqa municipalities. Under the As-Samra Expansion
Project, the plant operator will develop a detailed ESIA that will
build upon the 2003 Environmental Assessment for construction of the
existing plant. MCC, MWI and the plant operator will design an approach
to the ESIA that meets the requirements of the MCC Environmental
Guidelines, the International Finance Corporation's Performance
Standards on Social & Environmental Sustainability, dated April 30,
2006 (``IFC Performance Standards''), and applicable Jordanian
environmental protection laws.
The ESIA will define any necessary augmentations to current
practices in place for monitoring odor, noise, water quality, heavy
metal accumulation and disease vectors, especially those induced by
sludge, as required under the existing environmental management plan.
The ESIA will also define an effective plan that clearly sets forth
the roles, responsibilities and costs associated with the management
and disposal of large volumes of sludge in order to improve the current
practice of storing sludge in stabilization ponds that are present on
the project site. These stabilization ponds are expected to be filled
within eight to ten years. The sludge treatment, storage and disposal
plan will accord with Jordanian law (including applicable Jordanian
standards) and the MCC Environmental Guidelines.
The project site includes sufficient unused adjacent land for the
proposed expansion. For this reason, there are no issues of land
acquisition or resettlement and only limited social impacts associated
with the construction and operation of the plant.
4. Donor Coordination.
In relation to the Water Network Project, the Government and MCC
coordinated closely with Germany's Deutsche Gesellschaft f[uuml]r
Technische Zusammenarbeit (``GTZ'') and Kreditanstalt f[uuml]r
Wiederaufbau (``KfW''). MCC leveraged the ongoing work of KfW and GTZ
in Zarqa, particularly in two principal areas of Compact development:
(a) Scoping and detailing specific works in Zarqa based on their
experiences, and (b) undertaking preliminary financial analysis of
Zarqa water and wastewater operations. KfW and GTZ are currently active
in meter replacement and network rehabilitation in Al-Gweireyeh and
also have a major project to develop detailed GIS tools for operations
and management of the water systems in Zarqa Governorate. Early outputs
from this GIS system served as useful inputs to the feasibility study
for the Water Network Project.
The Program will complement other current and potential work by
other donors including but not limited to (i) the Japan International
Cooperation Agency's project to improving the water supply for the
Zarqa WSA, which includes restructuring of the primary and secondary
water supply and distribution system in the areas of Zarqa, Ruseifa,
Hashmeya, Sukhna and Awajan through construction of new storage and
distribution reservoirs, transmission pipelines, pumping stations and
rising mains, and disinfection facilities; (ii) China's project to
replace water networks within the Ruseifa Low distribution area; and
(iii) the European Union's project to improve the water supply network
in the areas of Zarqa, Al-Gweireyeh, Awajan, Ruseifa, Bani Hashem and
Dogara.
[[Page 67133]]
In relation to the As-Samra Expansion Project, the Swedish
International Development Agency provided technical assistance to MWI
to structure and tender the financial arrangements for the original As-
Samra Wastewater Treatment Plant, as well as loans and grants to assist
MWI in supervising the construction of the existing plant and its
initial operations period through February 2010. The Project benefits
from the lessons learned in financing and constructing the existing
plant.
5. USAID
The United States Agency for International Development (``USAID'')
has been active in the water sector in Jordan for many years and has
funded and executed projects throughout the country. MCC has
collaborated and coordinated closely with USAID on sector policy,
particularly with respect to Jordan's National Water Strategy and
tariff scenarios. USAID is funding a project to develop a comprehensive
water and wastewater infrastructure master plan, and to support studies
related to wastewater infrastructure improvements in several areas in
Jordan, including Zarqa Governorate. MCC will continue to liaise with
USAID.
For the As-Samra Expansion Project, USAID provided a grant for the
construction of the existing As-Samra Wastewater Treatment Plant.
6. Sustainability
The Water Authority of Jordan (``WAJ''), through its Zarqa
administrative unit, is currently responsible for the operation and
maintenance of water supply and wastewater collection infrastructure in
Zarqa Governorate. The Water Network Project is expected to provide
additional operating revenues within the Zarqa administrative unit of
WAJ by increasing collections as a result of reduced water losses and
thus delivery of higher volumes of water to end-users. The Wastewater
Network Project is expected to increase the number of households that
subscribe to WAJ wastewater collection services, thereby increasing
collection of service fees.
In addition, WAJ plans to reorganize the Zarqa administrative unit
of WAJ. This is expected to increase the efficiency of operations and
further improve the financial situation for the Zarqa administrative
unit.
When MWI becomes responsible for additional treatment charges
payable under the As-Samra Expansion Project, the burden of these
treatment charges may worsen the financial position of the water
companies in Amman and Zarqa Governorates, collections from which will
support the payment of the treatment charges. The Government has agreed
to deliver plans to (a) fully fund these treatment charges, and (b)
ensure projected revenues fully fund projected operations and
maintenance costs of the water and wastewater network in Zarqa
Governorate no later than 2015.
C. Implementation Framework
1. Overview
The implementation framework and the plan for ensuring adequate
governance, oversight, management, monitoring and evaluation, and
fiscal accountability for the use of MCC Funding are summarized below.
MCC and the Government will enter into the Program Implementation
Agreement, and any other agreements in furtherance of this Compact, all
of which, together with this Compact, set out certain rights,
responsibilities, duties and other terms relating to the implementation
of the Program.
2. MCC
MCC will take all appropriate actions to carry out its
responsibilities in connection with this Compact and the Program
Implementation Agreement, including the exercise of its approval rights
in connection with the implementation of the Program.
3. MCA-Jordan
MCA-Jordan was established by the Government as the accountable
entity. It is a limited liability company wholly owned by the
Government and was registered on June 29, 2010, as the Millennium
Challenge Account--Jordan Limited Liability Company, in accordance with
the Jordanian Companies Law. This arrangement allows MCA-Jordan the
independence to enter into contracts, manage its own finances, and hire
staff outside of the standard civil service system. In accordance with
Section 3.2(b) of this Compact and Section 1.3(a) of the Program
Implementation Agreement, MCA-Jordan will act on the Government's
behalf to implement the Program and to exercise and perform the
Government's rights and responsibilities with respect to the oversight,
management, monitoring and evaluation, and implementation of the
Program, including, without limitation, managing the implementation of
Projects and their Activities, allocating resources, and managing
procurements. The Government will ensure that MCA-Jordan takes all
appropriate actions to implement the Program, including the exercise
and performance of the rights and responsibilities designated to it by
the Government pursuant to this Compact and the Program Implementation
Agreement. Without limiting the foregoing, the Government will also
ensure that MCA-Jordan has full decision-making autonomy, including,
inter alia, the ability, without consultation with, or the consent or
approval of, any other party, to (i) Enter into contracts in its own
name; (ii) sue and be sued; (iii) establish an account in a financial
institution in the name of MCA-Jordan and hold MCC Funding in that
account; (iv) expend MCC Funding; (v) engage a fiscal agent who will
act on behalf of MCA-Jordan on terms acceptable to MCC; (vi) engage a
procurement agent who will act on behalf of MCA-Jordan, on terms
acceptable to MCC, to manage the acquisition of the goods, works, and
services required by MCA-Jordan to implement the activities funded by
this Compact; and (vii) competitively engage one or more auditors to
conduct audits of its accounts. The Government will take the necessary
actions to manage and operate MCA-Jordan, in accordance with the
applicable conditions precedent to the disbursement of Compact
Implementation Funding set forth in Annex IV to this Compact.
In accordance with Articles of Association and Memorandum of
Association of MCA-Jordan, (the ``Bylaws''), MCA-Jordan will consist of
the following bodies: (1) A board of directors (the ``Board''), (2) a
management team (the ``Management Unit''), (3) a stakeholders committee
(the ``Stakeholders Committee''), and (4) the general shareholders
assembly (the ``General Assembly''). The governance of MCA-Jordan is
set forth in more detail in the Program Implementation Agreement and
the Bylaws, which will, collectively, set forth the responsibilities of
the Board, Management Unit and Stakeholders Committee. The Bylaws were
developed and adopted in accordance with the Governance Guidelines.
(a) Board
(i) Composition. The Board is initially comprised of the following
seven members, including four Government members and three
representatives from civil society and private sector organizations:
(1) Secretary General, Ministry of Planning and International
Cooperation; (2) Secretary General, WAJ; (3) Secretary General, MOE;
(4) Secretary General, Ministry of Municipalities; (5) a nominee from
the General Federation of Jordanian Women; (6) a nominee from the
Jordanian Hashemite Fund for Human Development; and (7) a nominee from
[[Page 67134]]
the Zarqa Chamber of Commerce. The Chief Executive Officer (the
``CEO'') of MCA-Jordan and an MCC representative will serve as non-
voting observers.
(ii) Roles and Responsibilities. The Board is responsible for the
oversight, direction, and decisions of MCA-Jordan, as well as the
overall implementation of the Program. The Board will hold regular
meetings, at a minimum once per quarter.
(b) Management Unit.
(i) Composition. The Management Unit will initially include eleven
key officers, as follows: (1) CEO, (2) Deputy CEO for Administration,
(3) Deputy CEO for Project Management, (4) Finance Director, (5)
Procurement Director, (6) Legal Director, (7) Environment and Social
Assessment Director, (8) Monitoring and Evaluation Director, (9)
Director for the Water Network Project, (10) Director for the
Wastewater Network Project, and (11) Director for the As-Samra
Expansion Project. These key officers will be supported by appropriate
additional staff to enable the Management Unit to execute its roles and
responsibilities.
(ii) Roles and Responsibilities. With oversight from the Board, the
Management Unit will have the principal responsibility for the day-to-
day management of the Program, including those roles and
responsibilities specifically set forth in the Program Implementation
Agreement and the Bylaws. The Management Unit will serve as the
principal link between MCC and the Government, and will be accountable
for the successful execution of the Program, each Project, and each
Activity. MCA-Jordan will be subject to the audit requirements under
Jordanian Companies Law. As a recipient of MCC Funding, MCA-Jordan will
also be subject to MCC audit requirements.
(c) Stakeholders Committee.
(i) Composition. The Stakeholders Committee will provide input to
the Board and the Management Unit on matters that relate to the
Program, promoting transparency and ongoing consultation. The size,
composition, and manner of selection of members of the Stakeholders
Committee are subject to ongoing discussions between the Government and
MCC, and will be dictated by the project areas of the Program.
Membership will at least reflect the NGOs, private sector, civil
society, and local and regional governments that were consulted by the
Government in developing its proposal for the Compact.
(ii) Roles and Responsibilities. Consistent with the Governance
Guidelines, the Stakeholders Committee will continue the consultative
process throughout implementation of the Program. While the
Stakeholders Committee will not have any decision-making authority, it
will, among other things, review, at the request of the Board or the
Management Unit, certain reports, agreements, and documents related to
the implementation of the Program in order to provide input to MCA-
Jordan regarding the implementation of the Program.
(d) General Assembly.
(i) Composition. The General Assembly of MCA-Jordan will be
comprised of all shareholders of MCA-Jordan. The Government is the sole
shareholder of MCA-Jordan.
(ii) Roles and Responsibilities. The General Assembly will hold one
annual meeting during the first four months of MCA-Jordan's fiscal year
and fulfill all obligations under applicable Jordanian law.
4. Implementing Entities
Subject to the terms and conditions of this Compact, the Program
Implementation Agreement, and any other related agreement entered into
in connection with this Compact, the Government, through MCA-Jordan,
may engage one or more entities of the Government to implement and
carry out any Project or Activity (or a component thereof) in
furtherance of this Compact (each, an ``Implementing Entity''). The
appointment of any Implementing Entity will be subject to review and
approval by MCC. The Government will ensure that the roles and
responsibilities of each Implementing Entity and other appropriate
terms are set forth in an agreement, in form and substance satisfactory
to MCC (each an ``Implementing Entity Agreement'').
5. Fiscal Agent
The Government, through MCA-Jordan, will appoint a fiscal agent (a
``Fiscal Agent'') which will be responsible for assisting the
Government with its fiscal management and assuring appropriate fiscal
accountability of MCC Funding, and whose duties will include those set
forth in the Program Implementation Agreement and such agreement as
MCA-Jordan enters into with the Fiscal Agent, which agreement will be
in form and substance satisfactory to MCC.
6. Procurement Agent
The Government, through MCA-Jordan, will appoint a procurement
agent (the ``Procurement Agent'') to carry out and certify specified
procurement activities in furtherance of this Compact. The roles and
responsibilities of the Procurement Agent will be set forth in the
Program Implementation Agreement or such agreement as the Government
enters into with the Procurement Agent, which agreement will be in form
and substance satisfactory to MCC. The Procurement Agent will adhere to
the procurement standards set forth in the MCC Program Procurement
Guidelines and ensure procurements are consistent with the procurement
plan adopted by the Government pursuant to the Program Implementation
Agreement, unless MCC agrees otherwise in writing.
Annex II Multi-Year Financial Plan Summary
This Annex II summarizes the Multi-Year Financial Plan for the
Program.
1. General
A multi-year financial plan summary (``Multi-Year Financial Plan
Summary'') is attached hereto as Exhibit A to this Annex II. By such
time as specified in the Program Implementation Agreement, the
Government will adopt, subject to MCC approval, a multi-year financial
plan that includes, in addition to the multi-year summary of estimated
MCC Funding and the Government's contribution of funds and resources,
the annual and quarterly funding requirements for the Program
(including administrative costs) and for each Project, projected both
on a commitment and cash requirement basis.
2. Government LMIC Contribution
During the Compact Term, the Government will make contributions,
relative to its national budget and taking into account prevailing
economic conditions, as are necessary to carry out the Government's
responsibilities under Section 2.6(a) of this Compact. These
contributions may include in-kind and financial contributions
(including obligations of Jordan on any debt incurred toward meeting
these contribution obligations). In connection with this obligation the
Government has developed a budget over the Compact Term to complement
MCC Funding through budget allocations to water and wastewater
projects, management contracts and institutional support in Zarqa
Governorate. The Government anticipates making contributions from its
national budget of approximately US$73,700,000 over the Compact Term.
Such contribution will be in addition to the Government's spending
allocated toward such Project Objectives in its budget for the year
immediately preceding the establishment of this Compact. The
Government's contribution will be subject to any legal requirements in
Jordan for the budgeting
[[Page 67135]]
and appropriation of such contribution, including approval of the
Government's annual budget by its legislature. The Parties may set
forth in appropriate supplemental agreements certain requirements
regarding this Government contribution, which requirements may be
conditions precedent to the Disbursement of MCC Funding.
Exhibit A Multi-Year Financial Plan Summary
Multi-Year FInancial Plan Summary
[US$ millions]
----------------------------------------------------------------------------------------------------------------
Project CIF Year 1 Year 2 Year 3 Year 4 Year 5 Total
----------------------------------------------------------------------------------------------------------------
Water Network Project
Infrastructure Activity
Water Smart Homes Activity
Sub-Total...................... 0 13.09 28.52 36.04 20.76 4.16 102.57
2. Wastewater Network Project
Sub-Total...................... 0 6.70 16.20 20.67 12.82 1.83 58.22
3. As-Samra Expansion Project
Sub-Total...................... 0.63 17.92 45.28 26.00 3.20 0.00 93.03
4. Monitoring and Evaluation (M&E)
Monitoring and Evaluation
Sub-Total.................. 0.03 0.69 0.04 0.72 0.52 0.81 2.81
5. Program Administration and Audit
MCA-Jordan
Fiscal Agent
Procurement Agent
Audit
Sub-Total.................. 1.46 3.39 3.40 3.40 3.41 3.41 18.47
----------------------------------------------------------------------------
Grand Total............ 2.12 41.79 93.44 86.83 40.71 10.21 275.10
----------------------------------------------------------------------------------------------------------------
Annex III Description of Monitoring and Evaluation Plan
This Annex III generally describes the components of the monitoring
and evaluation plan (``M&E Plan'') for the Program. The actual content
and form of the M&E Plan will be agreed to by MCC and the Government in
accordance with MCC's Policy for Monitoring and Evaluation of Compacts
and Threshold Programs posted from time to time on the MCC Web site
(the ``MCC Policy for Monitoring and Evaluation of Compacts and
Threshold Programs''). The M&E Plan may be modified from time to time
with MCC approval without requiring an amendment to this Annex III.
1. Overview
MCC and the Government will formulate and agree to, and the
Government will implement or cause to be implemented, an M&E Plan that
specifies (a) how progress toward the Compact Goal, Program Objective
and Project Objectives will be monitored, (``Monitoring Component'');
(b) a process and timeline for the monitoring of planned, ongoing, or
completed Activities to determine their efficiency and effectiveness;
and (c) a methodology for assessment and rigorous evaluation of the
outcomes and impact of the Program (``Evaluation Component'').
Information regarding the Program's performance, including the M&E
Plan, and any amendments or modifications thereto, as well as progress
and other reports, will be made publicly available on the Web site of
MCA-Jordan and elsewhere.
2. Program Logic
The M&E Plan will be built on a logic model which illustrates how
the Program, Projects and Activities contribute to the Compact Goal,
the Program Objective and the Project Objectives.
3. Monitoring Component
To monitor progress toward the achievement of the impact and
outcomes, the Monitoring Component of the M&E Plan will identify (i)
The Indicators (as defined below), (ii) the definitions of the
Indicators, (iii) the sources and methods for data collection, (iv) the
frequency for data collection, (v) the party or parties responsible,
and (vi) the timeline for reporting on each Indicator to MCC.
Further, the Monitoring Component will track changes in the
selected Indicators for measuring progress towards the achievement of
the objectives during the Compact Term. The M&E Plan will establish
baselines which measure the situation prior to a development
intervention, against which progress can be assessed or comparisons
made (each a, ``Baseline''). The Government will collect Baselines on
the selected Indicators or verify already collected Baselines where
applicable and as set forth in the M&E Plan.
(a) Indicators. The M&E Plan will measure the results of the
Program using quantitative, objective and reliable data
(``Indicators''). Each Indicator will have benchmarks that specify the
expected value and the expected time by which that result will be
achieved (``Target''). All Indicators will be disaggregated by gender,
income level and age, and beneficiary types to the extent practicable.
Subject to prior written approval from MCC, the Government may add
Indicators or refine the definitions and Targets of existing
Indicators.
(i) Compact Indicators.
(1) Goal. The M&E Plan will contain the following Indicators
related to the Compact Goal and based on national statistics. The
Program will contribute to progress against poverty nationwide by
contributing to a reduction of the poverty rate in Zarqa Governorate,
but the results are attributable to many factors in the economy:
(A) Official poverty rate nationwide: 13.3 percent in 2008; and
(B) Official poverty rate in Zarqa Governorate: 11.2 percent in
2008.\1\
---------------------------------------------------------------------------
\1\ Poverty Baselines are from the Department of Statistics
``The Status Report of Poverty in Jordan: Based on Household Income
and Expenditure Survey 2008'' (Arabic); July 12, 2010. As of July
2010, Jordan did not have a current poverty target using its
official poverty rate.
---------------------------------------------------------------------------
[[Page 67136]]
(2) Objective and Outcome Indicators. The M&E Plan will contain the
Indicators listed in the following tables.
---------------------------------------------------------------------------
\2\ The baseline figure refers to all of urban Zarqa. The target
will be measured only against areas planned for assistance under the
Compact. If the update to the baseline survey reveals a significant
difference between the figure for all of urban Zarqa and the areas
planned for assistance under the Compact, an adjustment to the
baseline and target will be noted in the M&E Plan ensuring that the
magnitude of the improvement by Year 5 remains consistent with that
of the Compact.
\3\ Ibid.
\4\ In order to conform to MCC's Common Indicators, this
indicator will be supplemented after the next baseline study with
``Average number of days of work lost by adult household members in
last 2 weeks due to a water borne illness + Average number of days
of school lost by school-age children in past 2 weeks due to water
borne illness.''
\5\ The baseline figure refers to all of urban Zarqa. The target
will be measured only against areas planned for assistance under the
Compact. If the update to the baseline survey reveals a significant
difference between the figure for all of urban Zarqa and the areas
planned for assistance under the Compact, an adjustment to the
baseline and target will be noted in the M&E Plan ensuring that the
magnitude of the improvement by Year 5 remains consistent with that
of the Compact.
\6\ Ibid.
Table 1--Compact Program Objective Indicators
----------------------------------------------------------------------------------------------------------------
Baseline
Result Indicator Definition value Year 5
----------------------------------------------------------------------------------------------------------------
Program Objective Level: Cross-Cutting Results
----------------------------------------------------------------------------------------------------------------
Effective supply of water increased Network water For Zarqa Governorate: 65 96
through improvement in water consumption per capita [Annual billed
delivery, extension of waste-water (residential and non- residential and non-
collection, and expansion in waste- residential). residential (in m3)]/
water treatment. [population of
governorate] * 1000/
365 (l/c/d).
Total residential water Billed residential 62 89
consumption. network water
consumption + tankers,
treatment shops, and
bottled water (l/c/d).
----------------------------------------------------------------------------------------------------------------
Table 2--Water Network Project Objective and Outcome Indicators
----------------------------------------------------------------------------------------------------------------
Baseline
Result Indicator Definition value Year 5
----------------------------------------------------------------------------------------------------------------
Objective Level
----------------------------------------------------------------------------------------------------------------
Decrease cost to households of Use of tanker water.... Annual average quantity 4.7 1.2
meeting subsistence water needs. of tanker water
consumed per person (l/
c/d) in Water Network
Project areas.\2\
Use of treatment shop Annual average quantity 0.4 0.2
water. of treatment shop
water consumed per
person (l/c/d) in
Water Network Project
areas.\3\
Prevalence of Percent of children 9% 7%
waterborne disease. under age five who had
disrrhea in the two
weeks preceding the
survey.\4\
Improve efficiency of network water Dissatisfaction with Percent of water 34% 26%
delivery. supply service. utility customers
``very dissatisfied''
or ``quite
dissatisfied'' with
frequency, duration,
and pressure of supply
(average of the three
dimensions) in Water
Network Project areas
\5\ Dissatisfaction
with water quality.
Dissatisfaction with O='xl'Percent of water 60% 40%
water quality. utility customers
``very dissatisfied''
or ``quite
dissatisfied'' with
potability of network
water in Water Network
Project areas.\6\.
----------------------------------------------------------------------------------------------------------------
Outcome Level
----------------------------------------------------------------------------------------------------------------
Improve efficiency of network water Non-revenue water as % Difference between 47% 35%
delivery. of Governorate system water supplied
input. including water
imported and water
sold including
exported (i.e., volume
of water ``lost'')
expressed as a
percentage of water
supplied including
water imported.
[(Production +
Imports) - (Exports +
Accounted Water)]/
(Production + Imports).
Continuity of supply Hours of supply/week 36 70
time. (during the
summer).\7\
Condition of household water systems Households cleaning Percent of households 56% 65%
improved. their water storage cleaning their
facilities. domestic water storage
facilities in Water
Smart Homes Activity
area.\8\
----------------------------------------------------------------------------------------------------------------
[[Page 67137]]
Table 3--Wastewater Network Project Objective and Outcome Indicators
----------------------------------------------------------------------------------------------------------------
Baseline
Result Indicator Definition value Year 5
----------------------------------------------------------------------------------------------------------------
Objective Level
----------------------------------------------------------------------------------------------------------------
Incidents of sewage overflow reduced Sewer blockage events.. Annual number of 8,500 2,000
blockages that
occurred in sewers
network (pumping
station blockages
shall not be
included).\9\
----------------------------------------------------------------------------------------------------------------
Outcome Level
----------------------------------------------------------------------------------------------------------------
Quantity of wastewater collected Volume of wastewater Total volume of 24 31
from Zarqa Governorate increased. collected. wastewater collected
through the sewer
system and pumped via
West Zarqa and East
Zarqa pumping stations
(million cubic meters/
year).
Access to wastewater network Residential population Zarqa Governorate 72% 82%
increased. connected to the sewer wastewater subscribers
system. as a percent of water
subscribers.
----------------------------------------------------------------------------------------------------------------
Table 4--The As-Samra Expansion Project Objective and Outcome Indicators
----------------------------------------------------------------------------------------------------------------
Baseline
Result Indicator Definition value Year 5
----------------------------------------------------------------------------------------------------------------
Objective Level
----------------------------------------------------------------------------------------------------------------
Substitution of freshwater for Treated wastewater used Treated wastewater \10\ 61 70
treated wastewater increased. in agriculture. used for irrigation in
Northern and Middle
Jordan Valley as a
percent of all water
used for irrigation in
Northern and Middle
Jordan Valley.
----------------------------------------------------------------------------------------------------------------
Outcome Level
----------------------------------------------------------------------------------------------------------------
Existing agriculture protected from Quality of As-Samra Number of days during 0 0
untreated wastewater. effluent meets the past quarter when
standard. effluent does not meet
the applicable
standard set out in
the As-Samra Project
Agreement.
Quantity of treated wastewater for Volume of waste water Annual volume of 65 99
agriculture use and substitution effluent discharged wastewater treated to
increased. from the As-Samra at least secondary
plant. level (measured as
annual volume of
wastewater effluent
discharged from the As-
Samra plant, million
cubic meters per year).
Agriculture use of Agriculture land in the 13.7 15.9
treated wastewater. Middle and Northern
Jordan Valley using
treated wastewater for
at least part of their
irrigation water
(1,000 hectares).
----------------------------------------------------------------------------------------------------------------
(b) Data Collection and Reporting. The M&E Plan will establish
guidelines for data collection and reporting, and identify the
responsible parties. Compliance with data collection and reporting
timelines will be conditions for Disbursements for the relevant
Activities as set forth in the Program Implementation Agreement. The
M&E Plan will specify the data collection methodologies, procedures,
and analysis required for reporting on results at all levels. The M&E
Plan will describe any interim MCC approvals for data collection,
analysis, and reporting plans.
---------------------------------------------------------------------------
\7\ Ibid.
\8\ Ibid.
\9\ If during the Compact Term sewage blockages become part of
the GIS database, this indicator should be updated to better measure
blockages by type and location.
\10\ ``Treated wastewater'' includes rainwater runoff mixed with
treated wastewater in King Talal Dam reservoir.
---------------------------------------------------------------------------
(c) Data Quality Reviews. As determined in the M&E Plan or as
otherwise requested by MCC, the quality of the data gathered through
the M&E Plan will be reviewed to ensure that data reported are as
valid, reliable, and timely as resources will allow. The objective of
any data quality review will be to verify the quality and the
consistency of performance data across different implementation units
and reporting institutions. Such data quality reviews also will serve
to identify where those levels of quality are not possible, given the
realities of data collection.
(d) Management Information System. The M&E Plan will describe the
information system that will be used to collect data, store, process
and deliver information to relevant stakeholders in such a way that the
Program information collected and verified pursuant to the M&E Plan is
at all times accessible and useful to those who wish to use it. The
system development will take into consideration the requirement and
data needs of the components of the Program, and will be aligned with
existing MCC systems, other service providers, and ministries.
(e) Role of MCA-Jordan. The monitoring and evaluation of this
Compact spans three Projects and will involve a variety of
governmental, nongovernmental, and private sector institutions. In
accordance with the designation contemplated by Section 3.2(b) of this
Compact, MCA-Jordan is responsible for implementation of the M&E Plan.
MCA-Jordan will oversee all Compact-related monitoring and evaluation
activities conducted for each
[[Page 67138]]
of the Projects, ensuring that data from all implementing entities is
consistent, accurately reported and aggregated into regular Compact
performance reports as described in the M&E Plan.
4. Evaluation Component
The Evaluation Component of the M&E Plan will contain three types
of evaluations: (i) Impact evaluations, (ii) project performance
evaluations, and (iii) special studies. The Evaluation Component of the
M&E Plan will describe the purpose of the evaluation, methodology,
timeline, required MCC approvals, and the process for collection and
analysis of data for each evaluation. The results of all evaluations
will be made publicly available in accordance with MCC's Policy for
Monitoring and Evaluation of Compacts and Threshold Programs.
(a) Impact Evaluation. The M&E Plan will include a description of
the methods to be used for impact evaluations and plans for integrating
the evaluation method into Project design. Based on in-country
consultation with stakeholders, the strategies outlined below were
jointly determined as having the strongest potential for rigorous
impact evaluation. The M&E Plan will further outline in detail these
methodologies. Final impact evaluation strategies are to be included in
the M&E Plan. The following is a summary of the potential impact
evaluation methodologies:
(i) Water Network Project/Infrastructure Investment Activity. The
evaluation will focus on determining both household level impacts as
well as benefits to the water utility. The household level impacts of
interest include reduced expenditures on water scarcity coping
mechanisms such as use of tanker and treatment shop water. Health
outcomes will also be examined. The impact is expected to be determined
through quasi-experimental techniques comparing the beneficiary
households to households in similar circumstances outside the project
areas. The institutional level impacts such as reduced operating costs
may be determined through financial and operations modeling of with and
without project scenarios. The without project assumptions would be
drawn from utility performance prior to the intervention as well as
concurrent performance of other comparable water utilities in Jordan.
(ii) Water Network Project/WSH Activity. The evaluation will look
at the changes in (1) maintenance/cleaning of home water systems, (2)
the impact on household use of expensive alternative sources of water,
and (3) the incidence of certain waterborne diseases. The primary
methodology expected is propensity score matching. In the case of over-
subscription to the sub-component of household water system
rehabilitation, an element of randomized award of benefits among
eligible beneficiaries will be considered.
(iii) Wastewater Network Project. The evaluation will include an
analysis of the health benefits achieved, particularly reduction in
waterborne disease. The methodology is expected to employ quasi-
experimental techniques comparing beneficiary households (those near
rehabilitated mains or newly connected to the network) with non-
beneficiary households.
(b) Final Evaluation. The M&E Plan will make provision for final
Project level evaluations (``Final Evaluations''). With the prior
written approval of MCC, the Government will engage independent
evaluators to conduct the Final Evaluations at the end of each Project.
The Final Evaluations will review progress during Compact
implementation and provide a qualitative context for interpreting
monitoring data and impact evaluation findings. They must at a minimum
(1) Evaluate the efficiency and effectiveness of the Activities; (2)
determine if and analyze the reasons why the Compact Goal, Program
Objective and Project Objective(s), outcome(s) and output(s) were or
were not achieved; (3) identify positive and negative unintended
results of the Program; (4) provide lessons learned that may be applied
to similar projects; and (5) assess the likelihood that results will be
sustained over time.
(i) Special Studies. The M&E Plan will include a description of the
methods to be used for special studies, as necessary, funded through
this Compact or by MCC. Plans for conducting the special studies will
be determined jointly between the Government and MCC before the
approval of the M&E Plan. The M&E Plan will identify and make provision
for any other special studies, ad hoc evaluations, and research that
may be needed as part of the monitoring and evaluating of this Compact.
Either MCC or the Government may request special studies or ad hoc
evaluations of Projects, Activities, or the Program as a whole prior to
the expiration of the Compact Term. When the Government engages an
evaluator, the engagement will be subject to the prior written approval
of MCC. Contract terms must ensure non-biased results and the
publication of results.
(c) Request for Ad Hoc Evaluation or Special Study. If the
Government requires an ad hoc independent evaluation or special study
at the request of the Government for any reason, including for the
purpose of contesting an MCC determination with respect to a Project or
Activity or to seek funding from other donors, no MCC Funding resources
may be applied to such evaluation or special study without MCC's prior
written approval.
5. Other Components of the M&E Plan
In addition to the monitoring and evaluation components, the M&E
Plan will include the following components for the Program, Projects
and Activities, including, where appropriate, roles and
responsibilities of the relevant parties and providers:
(a) Costs. A detailed cost estimate for all components of the M&E
Plan; and
(b) Assumptions and Risks. Any assumption or risk external to the
Program that underlies the accomplishment of the Program Objective,
Project Objectives and Activity outcomes and outputs. However, such
assumptions and risks will not excuse any Party's performance unless
otherwise expressly agreed to in writing by the other Party.
6. Approval and Implementation of the M&E Plan
The approval and implementation of the M&E Plan, as amended from
time to time, will be in accordance with the Program Implementation
Agreement, any other relevant Supplemental Agreement and the MCC Policy
for Monitoring and Evaluation of Compacts and Threshold Programs.
Annex IV Conditions Precedent to Disbursement of Compact Implementation
Funding
This Annex IV sets forth the conditions precedent applicable to
Disbursements of Compact Implementation Funding (each a ``CIF
Disbursement''). Capitalized terms used in this Annex IV and not
defined in this Compact will have the respective meanings assigned
thereto in the Program Implementation Agreement. Upon execution of the
Program Implementation Agreement, each CIF Disbursement will be subject
to the terms of the Program Implementation Agreement.
1. Conditions Precedent to Initial CIF Disbursement
Each of the following must have occurred or been satisfied prior to
the initial CIF Disbursement:
(a) The Government (or MCA-Jordan) has delivered to MCC:
(i) An interim fiscal accountability plan acceptable to MCC; and
[[Page 67139]]
(ii) A CIF procurement plan acceptable to MCC.
2. Conditions Precedent to all CIF Disbursements (Including Initial CIF
Disbursement)
Each of the following must have occurred or been satisfied prior to
each CIF Disbursement:
(a) The Government (or MCA-Jordan) has delivered to MCC the
following documents, in form and substance satisfactory to MCC:
(i) A completed Disbursement Request, together with the applicable
Periodic Reports, for the applicable Disbursement Period, all in
accordance with the Reporting Guidelines;
(ii) A certificate of MCA-Jordan, dated as of the date of the CIF
Disbursement Request, in such form as provided by MCC;
(iii) If a Fiscal Agent has been engaged, a Fiscal Agent
Disbursement Certificate; and
(iv) If a Procurement Agent has been engaged, a Procurement Agent
Disbursement Certificate.
(b) If any proceeds of the CIF Disbursement are to be deposited in
a bank account, MCC has received satisfactory evidence that (i) the
Bank Agreement has been executed, and (ii) the Permitted Accounts have
been established.
(c) Appointment of an entity or individual to provide fiscal agent
services, as approved by MCC, until such time as the Government
provides to MCC a true and complete copy of a Fiscal Agent Agreement,
duly executed and in full force and effect, and the Fiscal Agent
engaged thereby is mobilized.
(d) Appointment of an entity or individual to provide procurement
agent services, as approved by MCC, until such time as the Government
provides to MCC a true and complete copy of the Procurement Agent
Agreement, duly executed and in full force and effect, and the
Procurement Agent engaged thereby is mobilized.
(e) MCC is satisfied, in its sole discretion, that (i) The
activities being funded with such CIF Disbursement are necessary,
advisable or otherwise consistent with the goal of facilitating the
implementation of the Compact and will not violate any applicable law
or regulation; (ii) no material default or breach of any covenant,
obligation or responsibility by the Government, MCA-Jordan or any
Government entity has occurred and is continuing under this Compact or
any other Supplemental Agreement; (iii) there has been no violation of,
and the use of requested funds for the purposes requested will not
violate, the limitations on use or treatment of MCC Funding set forth
in Section 2.7 of this Compact or in any applicable law or regulation;
(iv) any Taxes paid with MCC Funding through the date 90 days prior to
the start of the applicable Disbursement Period have been reimbursed by
the Government in full in accordance with Section 2.8(c) of this
Compact; and (v) the Government has satisfied all of its payment
obligations, including any insurance, indemnification, tax payments or
other obligations, and contributed all resources required from it,
under this Compact and any other Supplemental Agreement.
(f) For any CIF Disbursement occurring after this Compact has
entered into force in accordance with Article 7: MCC is satisfied, in
its sole discretion, that (i) MCC has received copies of any reports
due from any technical consultants (including environmental auditors
engaged by MCA-Jordan) for any Activity since the previous Disbursement
Request, and all such reports are in form and substance satisfactory to
MCC; (ii) the Implementation Plan Documents and Fiscal Accountability
Plan are current and updated and are in form and substance satisfactory
to MCC, and there has been progress satisfactory to MCC on the
components of the Implementation Plan for any relevant Projects or
Activities related to such CIF Disbursement; (iii) there has been
progress satisfactory to MCC on the M&E Plan and Social and Gender
Integration Plan for the Program or relevant Project or Activity and
substantial compliance with the requirements of the M&E Plan and Social
and Gender Integration Plan (including the targets set forth therein
and any applicable reporting requirements set forth therein for the
relevant Disbursement Period); (iv) there has been no material negative
finding in any financial audit report delivered in accordance with this
Compact and the Audit Plan, for the prior two quarters (or such other
period as the Audit Plan may require); (v) MCC does not have grounds
for concluding that any matter certified to it in the related MCA
Disbursement Certificate, the Fiscal Agent Disbursement Certificate or
the Procurement Agent Disbursement Certificate is not as certified; and
(vi) if any of the officers or key staff of MCA-Jordan have been
removed or resigned and the position remains vacant, MCA-Jordan is
actively engaged in recruiting a replacement.
(g) MCC has not determined, in its sole discretion, that an act,
omission, condition, or event has occurred that would be the basis for
MCC to suspend or terminate, in whole or in part, the Compact or MCC
Funding in accordance with Section 5.1 of this Compact.
Annex V Definitions
Activity has the meaning provided in Part B of Annex I.
Additional Representative has the meaning provided in Section 4.2.
As-Samra Expansion Project has the meaning provided in paragraph
3(a) of Part B of Annex I.
As-Samra Project Agreement means the Project Agreement between the
Government, represented by MWI, and Samra Wastewater Treatment Plant
Company Limited dated 28 July 2002 (as amended and restated on 10
December 2003, as further amended on June 29, 2006, November 5, 2008
and April 8, 2010, and as amended and restated after the date hereof).
Audit Guidelines has the meaning provided in Section 3.8(a).
Baseline has the meaning provided in paragraph 3 of Annex III.
Board has the meaning provided in paragraph 3 of Part C of Annex I.
BOD 5 has the meaning provided in paragraph 3(a) of Part
B of Annex I.
Bylaws has the meaning provided in paragraph 3 of Part C of Annex
I.
Cabinet Resolution has the meaning provided in Annex VI.
CEO has the meaning provided in paragraph 3(a)(i) of Part C of
Annex I.
Certificate has the meaning provided in Schedule E to Annex VI.
CIF Disbursement has the meaning provided in Annex IV.
Compact has the meaning provided in the Preamble.
Compact Contract has the meaning provided in Schedule A to Annex
VI.
Compact Goal has the meaning provided in Section 1.1.
Compact Implementation Funding has the meaning provided in Section
2.2(a).
Compact Records has the meaning provided in Section 3.7(a).
Compact Term has the meaning provided in Section 7.4.
Covered Provider has the meaning provided in Section 3.7(c).
Disbursement has the meaning provided in Section 2.4.
DMA has the meaning provided in paragraph 1(a)(i)(2)(D) of Part B
of Annex I.
East Zarqa Pumping Station Zone Activity has the meaning provided
in paragraph 2(a) of Part B of Annex I.
Eligible Entities has the meaning provided in Annex VI.
Eligible Individuals has the meaning provided in Annex VI.
ESIA has the meaning provided in paragraph 1(c) of Part B of Annex
I.
[[Page 67140]]
Evaluation Component has the meaning provided in paragraph 1 of
Annex III.
Excess CIF Amount has the meaning provided in Section 2.2(c).
Final Evaluations has the meaning provided in paragraph 4(b) of
Annex III.
Fiscal Agent has the meaning provided in paragraph 5 of Part C of
Annex I.
General Assembly has the meaning provided in paragraph 3 of Part C
of Annex I.
GIS has the meaning provided in paragraph 1(a)(i)(1) of Part B of
Annex I.
Governance Guidelines means MCC's Guidelines for Accountable
Entities and Implementation Structures, as such may be posted on MCC's
Web site from time to time.
Government has the meaning provided in the Preamble.
GTZ has the meaning provided in paragraph 4 of Part B of Annex I.
IFC Performance Standards has the meaning provided in paragraph
3(c) of Part B of Annex I.
Implementation Letter has the meaning provided in Section 3.5.
Implementing Entity has the meaning provided in paragraph 4 of Part
C of Annex I.
Implementing Entity Agreement has the meaning provided in paragraph
4 of Part C of Annex I.
Indicators has the meaning provided in paragraph 3(a) of Annex III.
Infrastructure Investment Activity has the meaning provided in
paragraph 1(a) of Part B of Annex I.
Inspector General has the meaning provided in Section 3.7(d).
ISTD has the meaning provided in Schedule A to Annex VI.
Jordan has the meaning provided in the Preamble.
KfW has the meaning provided in paragraph 4 of Part B of Annex I.
M&E Plan has the meaning provided in Annex III.
Management Unit has the meaning provided in paragraph 3 of Part C
of Annex I.
MCA Act has the meaning provided in Section 2.2(a).
MCA-Jordan has the meaning provided in Section 3.2(b).
MCC has the meaning provided in the Preamble.
MCC Environmental Guidelines has the meaning provided in Section
2.7(c).
MCC Funding has the meaning provided in Section 2.3.
MCC Gender Policy means the MCC Gender Policy (including any
guidance documents issued in connection with the guidelines) posted
from time to time on the MCC Web site or otherwise made available to
the Government.
MCC Policy for Monitoring and Evaluation of Compacts and Threshold
Programs has the meaning provided in Annex III.
MCC Program Procurement Guidelines has the meaning provided in
Section 3.6.
MCC Web site has the meaning provided in Section 2.7.
MCU has the meaning provided in paragraph 1 of Part A of Annex I.
MOE has the meaning provided in paragraph 1(c) of Part B of Annex
I.
MOF has the meaning provided in Annex VI.
Monitoring Component has the meaning provided in paragraph 1 of
Annex III.
MOPIC has the meaning provided in Annex VI.
Multi-Year Financial Plan Summary has the meaning provided in
paragraph 1 of Annex II.
MWI has the meaning provided in paragraph 1(c) of Part B of Annex
I.
OP 4.12 has the meaning provided in paragraph 3 of Part A of Annex
I.
Party and Parties have the meaning provided in the Preamble.
PEISA has the meaning provided in paragraph 1(c) of Part B of Annex
I.
Permitted Account has the meaning provided in Section 2.4.
Principal Representative has the meaning provided in Section 4.2.
Procurement Agent has the meaning provided in paragraph 6 of Part C
of Annex I.
Program has the meaning provided in the Preamble.
Program Assets means any assets, goods or property (real, tangible
or intangible) purchased or financed in whole or in part (directly or
indirectly) by MCC Funding.
Program Funding has the meaning provided in Section 2.1.
Program Guidelines means collectively the Audit Guidelines, the MCC
Environmental Guidelines, the MCC Gender Policy, the Governance
Guidelines, the MCC Program Procurement Guidelines, the Reporting
Guidelines, the MCC Policy for Monitoring and Evaluation of Compacts
and Threshold Programs, the MCC Cost Principles for Government
Affiliates Involved in Compact Implementation (including any successor
to any of the foregoing) and any other guidelines, policies or guidance
papers relating to the administration of MCC-funded compact programs
and as from time to time published on the MCC Web site.
Program Implementation Agreement and PIA have the meaning provided
in Section 3.1.
Program Objective has the meaning provided in Section 1.2.
Project(s) has the meaning provided in Section 1.2.
Project Objective(s) has the meaning provided in Section 1.3.
Provider has the meaning provided in Section 3.7(c).
Reporting Guidelines means the MCC ``Guidance on Quarterly MCA
Disbursement Request and Reporting Package'' posted by MCC on the MCC
Web site or otherwise publicly made available.
Ruseifa Distribution Areas has the meaning provided in paragraph
1(a)(i)(3)(A) of Part B of Annex I.
Social and Gender Integration Plan has the meaning provided in
paragraph 3 of Part A of Annex I.
Stakeholders Committee has the meaning provided in paragraph 3 of
Part C of Annex I.
Supplemental Agreement means any agreement between (a) the
Government (or any Government affiliate, including MCA-Jordan) and MCC
(including, but not limited to, the PIA) or (b) MCC and/or the
Government (or any Government affiliate, including MCA-Jordan), on the
one hand, and any third party, on the other hand, including any of the
Providers, in each case, setting forth the details of any funding,
implementing or other arrangements in furtherance of this Compact.
Target has the meaning provided in paragraph 3(a) of Annex III.
Taxes has the meaning provided in Section 2.8(a).
TSS has the meaning provided in paragraph 3(a) of Part B of Annex
I.
United States Dollars or US$ means the lawful currency of the
United States of America.
USAID has the meaning provided in paragraph 5 of Part B of Annex I.
VAT has the meaning provided in Schedule A to Annex VI.
WAJ has the meaning provided in paragraph 6 of Part B of Annex I.
Wastewater Network Project has the meaning provided in paragraph
2(a) of Part B of Annex I.
Water Network Project has the meaning provided in paragraph 1(a) of
Part B of Annex I.
Water Smart Homes Activity or WSH Activity has the meaning provided
in paragraph 1(a) of Part B of Annex I.
West Zarqa Pumping Station Zone Activity has the meaning provided
in paragraph 2(a) of Part B of Annex I.
WSA has the meaning provided in paragraph 1(a)(i)(2) of Part B of
Annex I.
WSH Direct Assistance Program has the meaning provided in paragraph
1(a)(ii)(2) of Part B of Annex I.
WSH Outreach Campaign has the meaning provided in paragraph
1(a)(ii)(1) of Part B of Annex I.
[[Page 67141]]
Zarqa Distribution Areas has the meaning provided in paragraph
1(a)(i)(2)(A) of Part B of Annex I.
Annex VI Tax Schedules
Introduction
The Government will ensure that MCA-Jordan and all contractors
(prime contractors and subcontractors), consultants, and other entities
and individuals that receive MCC Funding directly or indirectly (the
``Eligible Entities'' or ``Eligible Individuals,'' as appropriate) are
exempt from Taxes in accordance with Section 2.8.
The mechanism that the Government will use to implement the
exemption is as follows:
1. The Ministry of Planning and International Cooperation
(``MOPIC''), the Ministry of Finance (``MOF'') and MCA-Jordan will
cooperate in drafting a resolution to be presented to the Council of
Ministers for approval. The draft resolution will be subject to MCC
approval before being presented to the Council of Ministers.
2. The draft resolution will, at a minimum, specify:
(a) The Projects that will benefit from the exemption;
(b) The expected timeframe of each Project;
(c) The expected cost of each Project; and
(d) A complete list of Taxes that will be exempted.
3. The Council of Ministers approves the blanket exemption for all
Project and Activities (the ``Cabinet Resolution'').
4. The following schedules describe the basic procedures that an
Eligible Entity or Eligible Individual should follow to ensure the
proper implementation of the exemption.
Schedule A Value Added Tax (VAT) \11\
---------------------------------------------------------------------------
\11\ To the extent that VAT is imposed at the port of entry on
imported goods, together with custom duties, the applicable tax
exemption procedures are described in Schedule B below.
---------------------------------------------------------------------------
Procedures
1. The Council of Ministers issues the Cabinet Resolution, as
described in the Introduction.
2. Any MCC-funded contract or agreement with an Eligible Entity or
Eligible Individual (each, a ``Compact Contract'') will explicitly
state that such Eligible Entity or Eligible Individual is entitled to
complete exemption from Taxes in accordance with the Cabinet
Resolution. In the event a Compact Contract is a contract with a
subcontractor, such contract will (a) explicitly state that the
subcontractor is entitled to the complete exemption from Taxes in
accordance with the Cabinet Resolution, and (b) attach the contract
between the prime contractor and MCA-Jordan.
3. When the Eligible Entity or Eligible Individual needs to
purchase goods or services, it will provide MCA-Jordan with the
following:
(a) For goods: A list of the goods needed to be purchased on a tax-
exempt basis, including the total needed and the approximate cost. MCA-
Jordan will indicate its approval on the list provided by the Eligible
Entity or Eligible Individual. The Eligible Entity or Eligible
Individual takes the MCA-Jordan approved list of goods to be purchased
and a copy of the Compact Contract to the Income and Sales Tax
Department (``ISTD''), which provides its approval for the purchase on
a tax-exempt basis. The Eligible Entity or Eligible Individual provides
the vendor with the above-mentioned documentation and purchases the
goods net of VAT.
(b) For services: The same procedure in paragraph 3(a) above is
followed. Instead of a list of items to be purchased, however, the
Eligible Entity or Eligible Individual provides a description of the
services needed, the approximate cost of such services and the period
of performance of such services.
4. MCA-Jordan follows the same procedures for its own purchases of
goods and services related to the Projects.
Schedule B Customs Duties
Procedures
Purchases of Imported Goods
1. The Council of Ministers issues the Cabinet Resolution, as
described in the Introduction.
2. When MCA-Jordan signs a Compact Contract, MCA-Jordan sends to
Jordan Customs an exemption request with the list of materials the
Eligible Entity or Eligible Individual intends to purchase for use on
the relevant Project. The letter must state the name of the Project and
the Eligible Entity or Eligible Individual, and the Cabinet Resolution
must be attached.
3. The Compact Contract will explicitly state that the Eligible
Entity or Eligible Individual is exempt from paying customs duties in
accordance with the Cabinet Resolution.
4. When the imported goods arrive, Jordan Customs compares what is
in the shipment against the list it maintains and then releases them to
the customs broker working for the Eligible Entity or Eligible
Individual. All Eligible Entities and Eligible Individuals are required
to use the services of a customs broker.
5. At the end of the Project, the MCA-Jordan construction manager
performs a reconciliation between goods imported for use on the Project
and goods actually used on the Project. Any goods imported for use on
the Project not actually used on the Project (for example, more goods
imported than used) may be subject to customs duties. Therefore, if an
Eligible Entity or Eligible Individual knows that more goods will be
needed than originally proposed, it must work with MCA-Jordan to ensure
that Jordan Customs has been provided with a list of the additional
materials.
6. The procedures set forth above also apply to MCA-Jordan except
that MCA-Jordan will work directly with Jordan Customs.
Temporary Admission of Equipment, Vehicles and Household Goods, by
Eligible Entities and Eligible Individuals
1. The procedures outlined in paragraphs 1, 2, and 3 above will be
followed except that MCA-Jordan must specifically request that an
Eligible Entity or Eligible Individual performing work for the Project
be permitted to bring in, on a temporary basis, equipment for use on
the Project and vehicles and household goods of such Eligible
Individual or Eligible Entity's employees working on the Project.
2. Once the Cabinet Resolution has been issued, MCA-Jordan sends
the exemption request to Jordan Customs with the Cabinet Resolution
attached.
3. When the items to receive temporary admission arrive, the goods
are released to the customs broker working for the Eligible Individual
or Eligible Entity.
4. The temporary admission request must be renewed annually until
the earlier of (a) the completion of the applicable contract, (b) the
end of the Compact-related work, and (c) the expiration or termination
of the Compact.
Schedule C Corporate Income Tax
Procedures
1. The Council of Ministers issues the Cabinet Resolution, as
described in the Introduction.
2. Any Eligible Entity earning income only from MCC Funding in
Jordan in any given tax year will be exempt from Tax on such income and
as such will not be required to withhold Taxes on income earned during
the tax year. At the end of the tax year, the Eligible Entity files a
tax return indicating that the income earned on the MCC-funded
[[Page 67142]]
Projects is not subject to Tax in accordance with the Cabinet
Resolution and the Compact Contract.
3. Any Eligible Entity earning only a portion of its income from
MCC Funding in any given fiscal year will:
(a) Maintain its books and records to segregate the financial
activity related to the Projects from those financial activities that
are not related to the Compact.
(b) At the end of any such fiscal year, file its Tax return on
income that is not related to the Compact, as applicable, providing the
documentation required in paragraph 2 above.
Schedule D Individual Income Tax
Procedures
1. The Council of Ministers issues a Cabinet Resolution, as
described in the Introduction.
2. Any Eligible Individual earning income only from MCC Funding in
Jordan in any given tax year will be exempt from withholding any such
income Taxes during the tax year and from paying any Tax on income
earned during the tax year. At the end of the tax year, the individual
files a tax return indicating that the income earned on the MCC-funded
Projects is not subject to Tax in accordance with the Cabinet
Resolution and the Compact Contract.
3. Any Eligible Individual earning income paid with MCC Funding and
non-Compact-related income in any given fiscal year will be permitted
to exclude the gross amount of such Compact-related personal income for
the purposes of filing his/her year-end individual income Taxes in
Jordan for any such fiscal year.
Schedule E Fuel Tax
VAT is the only Tax included in petroleum products.
Procedures
1. The Council of Ministers issues the Cabinet Resolution, as
described in the Introduction.
2. The Government will issue a certificate, or other documentary
evidence (the ``Certificate''), to the Eligible Entity or Eligible
Individual that allows the holder of such Certificate to be exempt from
VAT at the point of purchase for fuel or other petroleum products.
3. Purchases of fuel and other petroleum products will be purchased
through approved wholesalers upon presentation of the Certificate.
Schedule F Social Security Tax
Procedures
1. The Council of Ministers issues the Cabinet Resolution, as
described in the Introduction.
2. The Cabinet Resolution will state the following:
(a) Eligible Individuals are exempted from paying the employee
portion of social security Tax to the Government.
(b) Employers of Eligible Individuals are exempted from paying the
employer portion of social security Tax to the Government.
3. Neither the Eligible Individuals nor their employers will be
required to file any paperwork or returns with regard to social
security Taxes.
Schedule G Tax on Foreign Import Services (i.e., Foreign Consultant
Services)
Procedures
1. The Council of Ministers issues the Cabinet Resolution, as
described in the Introduction.
2. The Cabinet Resolution will state that MCA-Jordan will not be
required to withhold VAT on each invoice submitted by any foreign
consultant that is an Eligible Entity or Eligible Individual.
3. Any foreign consultant that is an Eligible Entity or Eligible
Individual will not charge VAT on invoices submitted to MCA-Jordan.
4. MCA-Jordan will not be required to withhold VAT on any invoice
submitted by a foreign consultant that is an Eligible Entity or
Eligible Individual.
Schedule H Company Registration Fee
Procedures
1. The Council of Ministers issues the Cabinet Resolution, as
described in the Introduction.
2. The Cabinet Resolution will state that Eligible Entities that
are required to register in Jordan to perform Compact-related work will
be exempt from paying the company registration fee imposed by the
Ministry of Trade and Industry.
3. At the time of registering in Jordan to perform Compact-related
work, the Eligible Entity will provide copies of (a) the Cabinet
Resolution, and (b) its Compact Contract to the Ministry of Trade and
Industry.
Schedule I Work Permit Fee
Procedures
1. The Council of Ministers issues the Cabinet Resolution, as
described in the Introduction.
2. The Cabinet Resolution will state that Eligible Individuals who
are required to obtain a work permit to perform Compact-related work
will be exempt from paying the work permit fee imposed by the Ministry
of Labor.
3. At the time of obtaining a work permit to perform Compact-
related work, the Eligible Individual will provide copies of (a) the
Cabinet Resolution, and (b) its Compact Contract to the Ministry of
Labor.
[FR Doc. 2010-27459 Filed 10-29-10; 8:45 am]
BILLING CODE 9211-03-P