Notice of Entering Into a Compact With the Hashemite Kingdom of Jordan, 67122-67142 [2010-27459]

Agencies

• Millennium Challenge Corporation

[Federal Register Volume 75, Number 210 (Monday, November 1, 2010)]
[Notices]
[Pages 67122-67142]
From the Federal Register Online via the Government Printing 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

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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)       (%)
------------------------------------------------------------------------
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 https://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 https://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: VPOperations@mcc.gov (Vice President, Compact 
Operations), VPGeneralCounsel@mcc.gov (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