Business Case and Intervention Summary
Intervention Summary
Title: MONTSERRAT: DISASTER PREPAREDNESS REPAIRS
What support will the UK provide?
DFID will provide up to £726,802 for immediate activities to bring disaster preparedness
standards in Montserrat back to acceptable standards to address the risks posed by the
continuing volcanic eruption, hurricanes and tropical storms.
Why is UK support required?
This proposal is to assist in upholding Montserrat’s basic disaster preparedness standards.
In July 2011 Montserrat’s Disaster Management Co-ordination Agency (DMCA), reporting to
the Governor on the status of disaster preparedness for the hurricane season, highlighted a
number of concerns and critical weaknesses to be addressed if Montserrat is to meet
minimum standards of preparedness and be compliant with Montserrat’s disaster legislation
and UK’s commitments.
The UK’s responsibilities to Montserrat (and the aided Overseas Territories) include meeting
the reasonable needs of aid dependent territories. The 1998 white paper on the Overseas
Territories (OTs) refers to “a firm commitment from the UK to help the territories develop
economically and to assist them in emergencies.” The National Audit Office pointed out in
2007: “Constitutional responsibility for internal security requires the UK to ensure that the
Territory is able to respond adequately to natural and man-made disasters”1.
The Governor is head of Montserrat’s National Disaster Preparedness and Response
Committee (NDPRAC) and the DMCA reports to the Deputy Governor. There is disaster
legislation that calls for updated preparedness plans, including the maintenance of monitoring,
warning systems and shelters. The UK Government has a responsibility to work with the
Montserratian authorities to ensure adequate emergency response measures are in place.
The Government of Montserrat, receiving budgetary assistance from UK, has not made
budgetary provisions for these initiatives and does not operate a contingency reserve. The
alternative to UK support now is to wait for new budgetary allocations (that still require UK
assistance) or to seek other funding sources. Other funding sources are scarce for Montserrat
and would take time to organise (even if successful).
National Audit Office, “Foreign and Commonwealth Office: Managing risk in the Overseas
Territories”, 2007
1
This initiative is for priority activities to address preparedness concerns at the earliest to
ensure adequate protection is in place for the next hurricane season. The Montserrat volcano
remains active. Despite two years of limited surface activity the Scientific Advisory Committee
on Montserrat Volcanic Activity recently estimated (November 2011) a 70% probability of a
new lava extrusion or magmatic explosion in the next year. Any delay in project
implementation places Montserrat at increased risk.
What are the expected results?
This project proposes support for the following critical disaster preparedness activities:





Repairs to the access road to Montserrat’s main communications centre and hub
Increasing the resilience of the main communications centre and hub
Replacement parts for the emergency siren system
Repairs to hurricane shelters
Re-establishing with replacement parts the emergency communications/radio network.
As a result of the initiative the population of Montserrat, circa 5,000, will be better prepared for
disasters. Preparedness is essential to maintain Montserrat’s economic and social feasibility.
The project, through the measures below, will help prevent any unnecessary hazard related
deaths, losses and suffering:

Early warning. The population will be aware of any impending threats and be able to
take precautions. Any evacuation of vulnerable areas will be timely and effective.

Emergency broadcast. The broadcast system is an essential part of early warning
systems. Post emergency it provides assurance and guidance to the population. It must
be able to function after severe weather or under conditions of heightened volcanic
activity.

Emergency shelter. This will provide protection for those living in vulnerable conditions
or temporary housing for those evacuated from vulnerable locations. People are
typically only prepared to evacuate if shelters are comfortable and safe.
Business Case
Strategic Case
A. Context and need for a DFID intervention
The island of Montserrat, which is a UK Overseas Territory, has been on a state of high alert
since 1995, when the Soufriere Hills Volcano started its current 16 year eruptive stage. The
volcano, the yearly threat of tropical storms and hurricanes (e.g. Montserrat required
development assistance after Hurricane Hugo in 1989) heightened vulnerability (budgetary
assistance, lower population levels, a weak economy, etc) and past scrutiny of HMG’s
handling of the crisis meant that in the past priority has been given to attaining high
standards of disaster preparedness.
The island’s population has fallen from 12,500 to almost 5,000 with many of its leading
citizens being forced to move to the UK, US or Caribbean neighbouring islands for work and
education. The cost of maintaining a high state of disaster management readiness, with a
reduced population and fewer trained professionals, is taxing and some important areas,
critical to the safety of the Community require urgent attention.
Recent exercises, a joint FCO/DFID capability review (2009) and lessons learnt from
responses to Hurricane Omar (2009) and Tropical storm Tomas (2010) have highlighted that
contingency plans and response systems need to be improved.
This situation is recognised and remedial efforts are underway to ensure the Government of
Montserrat and HMG are able to provide sufficient protection to Montserrat and its citizens.
In 2011 the Disaster Management Coordination Agency (DMCA), under a new director, was
tasked with re-building preparedness standards to acceptable levels. Positive progress has
since been made, with the review of national plans and improvements to co-ordination and
emergency response arrangements.
But critical deficiencies remain. In July the DMCA was requested by the Governor, on behalf
of FCO, to report on the status of disaster preparedness for the 2011 hurricane season.
The report covered a wide range of preparedness issues, identifying a number of priority
areas requiring immediate actions. Those that could be addressed with relative ease were
quickly implemented (e.g. repairing back up generators, installing equipment already held).
However necessary works to repair the siren system that provides early warning, emergency
shelters and communications systems cannot be implemented for lack of funds. The
Governor, referring to a severely restrained GoM budget, has asked if DFID could be of
assistance.
Why is UK support required?
The UK’s responsibilities to Montserrat and the OTs are:
-
meeting the reasonable needs of aid dependant OTs;
accelerating towards self sufficiency where possible; and
managing the risk of contingent liability and ensuring OTs meet international
commitments
OT’s needs are not judged by the same criteria as those of independent developing
countries. Citizens of the OTs have an automatic right to British citizenship and most of the
OTs have achieved the Millennium Development Goals (MDGs). The International
Development Act 2002 specifically exempts aid to the OTs from the poverty reduction criteria
that apply to the rest of the DFID aid budget. With the exception of the EC, Her Majesty’s
Government (HMG) is the only source of significant grant funding to Montserrat.
HMG’s obligation to the OTs derives from the UN Charter: “to promote to the utmost, within
the system of international peace and security established by the present Charter, the wellbeing of the inhabitants of these territories [whose peoples have not yet attained a full
measure of self government]”.
The OTs are not explicitly mentioned in the Coalition Document. However the One World
Conservatism manifesto document states that the reasonable assistance needs of the OTs
should remain a first call on the aid programme and that the ultimate goal is to move all of
the OTs towards self-sufficiency.
UK’s Disaster Management responsibility
The National Audit Office pointed out in 2007: “constitutional responsibility for internal
security requires the UK to ensure that the Territory is able to respond adequately to natural
and man-made disasters”2. In Montserrat the Governor is head of the National Disaster
Preparedness and Response Committee (NDPRAC) and the DMCA reports to the Deputy
Governor. Legislation is in place that calls for updated preparedness plans, including the
maintenance of monitoring, warning systems and shelters. There is an expectation that
standards of emergency preparedness will be maintained – especially in the face of an
active volcano.
Priority preparedness requirements
The July preparedness review and subsequent consultations identified the following
immediate priorities :

Repairing the access road to Montserrat’s main communications repeater centre and
hub at Silver Hills. The facility houses communications equipment for private sector
and GoM entities including the Royal Montserrat Police Force, DMCA, Fire and
Rescue, Montserrat Volcano Observatory (MVO), Radio Montserrat, the airport, Cable
and Wireless. The facility is a vital link in all Montserrat’s telecommunications
systems. If there is a power outage and this site cannot be accessed to refuel the
generator, all essential communication and broadcast in Montserrat will be
National Audit Office, “Foreign and Commonwealth Office: Managing risk in the Overseas
Territories”, 2007
2
compromised. The site is currently not accessible after heavy rainfall.

Replacement parts for the emergency siren system that is the core component of the
island wide volcanic early warning system. Currently three of the eight siren sites are
non-functional and the remaining units cannibalised to repair the more critical ones.

The emergency communications system is further weakened by the lack of spares or
back-up capacity of the public broadcast system. As recently as Tropical Storm Irene
in 2011, it was impossible to broadcast warnings and advice to some parts of
Montserrat.

Repairs to hurricane shelters. All shelters need to be inspected on an annual basis,
and the appropriate certificates issued; shelters for hurricanes need to be structurally
inspected and rated according to the expected severity of the hurricane and all
shelters need to have valid fire certificates. The July assessment found three shelters
(St Peters Old School, Mongo Hill and Davy Hill Weslyn Holiness Church) are in need
of attention. The Pasture Piece compound shelters that will provide shelter space in
the North of island should the volcano cause an(other) evacuation of the south,
require maintenance and improvements.
These priority actions to re-establish preparedness standards are required to meet GoM and
UK responsibilities. Without them, the extensive investments made in the Montserrat
Volcano Observatory and emergency management systems, essential to reduce risks are
put into jeopardy. Volcanic activity is likely to persist for many years, potentially decades.
Volcano monitoring and preparedness must be maintained – even in periods of relative calm
- to ensure public safety and to build confidence in Montserrat’s sustainable future.
Without functioning early warning systems, or robust emergency telecommunications the
existing zonation system, which relies on differing comparative risk levels, may be
significantly compromised.
The proposal addresses priority concerns that must be put in place at the earliest. There are
no budgetary provisions for these initiatives either within the capital or recurrent budgets.
The DMCA budget submission for maintenance EC $600K was cut to EC $200k. On the
capital side, the work for the Silver Hills Access had not been foreseen. Any re-prioritisation
will have to wait for inclusion within the next budget. Montserrat has no contingency or
emergency funds to meet unexpected needs.
B. Impact and Outcome that we expect to achieve
Impact
The safety of the population of Montserrat is improved by re-building disaster preparedness
competencies to acceptable standards.
Outcome
Critical disaster preparedness weaknesses are addressed and GoM is compliant with
disaster legislation.
Outputs
1.
Shelters repaired.
2.
Resilient communications, including more reliable access to Silver Hills radio site and
back up emergency systems for the public broadcast system (so that it can function
after severe weather or conditions of heightened volcanic activity).
3.
Siren systems that are fully functioning.
Evidence underpinning the intervention
There is a significant body of evidence setting out disaster management capabilities and
vulnerabilities of Montserrat. The most recent include:
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
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FCO/DFID Disaster Management Capability Reviews, Montserrat 2006, 2009.
UNDP country reports: Anguilla and Montserrat Disaster Benchmark Tool 2010.
Caribbean Centre for Development Administration (CARICAD) – Report on mission to
facilitate the updating of specific contingency plans, November 2010.
CDEMA country report November 2010.
National Audit Office report in to OT Contingent liabilities (2007).
Post disaster reports and lesson learning exercises by UK and OT authorities: Yearly
visit and exercise reports by APT(N); 2010, 2011. Hurricane Omar 2009, Hurricane
Earl 2010.
Governor’s statement on preparedness prepared for FCO and assessment July 2011.
Appraisal Case
A. What are the feasible options that address the need set out in the Strategic case?
There is considerable room to build disaster and climate resilience in Montserrat to minimise
future hazard losses and disruption. However, building a culture of safety and ensuring all
investments are properly protected is a lengthy and continual process. It is envisaged the
GoM will continue to develop appropriate risk reduction strategies with support from DFID
and other regional and international agencies (e.g. Caribbean Disaster and Emergency
Management Agency (CDEMA) and the United Nations Development Programme (UNDP)).
This project does not address longer term risk reduction issues, e.g. reducing structural
vulnerability of critical infrastructure or developing risk transfer options (such as disaster
insurance or hazard resistant income strategies). Instead the project focuses on addressing
immediate, and critical, preparedness shortfalls to bring minimum standards back into
functional operation. Standards that are set out in Montserrat’s disaster management
legislation that calls for the maintenance of disaster plans, co-ordination systems, shelter
capacity and early warning. Standards that are non-negotiable from the legal perspective or
from the expectations of the guidance provided by UK and exercised by the Governor as the
head of Montserrat’s national disaster management system.
A do nothing option is not feasible. Responsibilities for the well being and safety of
Montserrat’s populations require critical preparedness deficiencies to be addressed. Two
feasible options are considered:
1) Delaying actions to remedy these priority preparedness needs, i.e. waiting for GoM
budget allocations or for assistance programmes from other funders. This will involve
significant delays. There are no funds quickly available from other agencies for these
initiatives. For example, CDEMA and UNDP disaster risk reduction funds that
Montserrat is eligible for are all allocated until 2013. Formulating new proposals,
finding funders and receiving funds will take many months.
2) Immediate actions to remedy priority preparedness activities that are required by
legislation and have been identified in 2011 hurricane season preparedness
assessments.
B. Assessing the strength of the evidence base for each feasible option
In the table below the quality of evidence for each option is rated as either Strong, Medium or Limited
Option
Evidence rating
1. Delaying until the new budget or Strong: Well documented appraisal of need,
external funding is realised
assessment of cost and implementation
options.
Close familiarity of budgetary position and
affordability by DFID and FCO as Montserrat
is in budgetary assistance.
2. Immediate implementation of priority Strong: Well documented appraisal of need,
preparedness activities.
assessment of costs and implementation
options.
Detailed understanding of risk, UK liabilities.
What is the likely impact (positive and negative) on climate change and environment
for each feasible option?
The activities proposed and short time scale for their implementation (four months) will result
in negligible impact on climate change and the environment. Maintaining preparedness and
a culture of safety will contribute to Montserrat’s capacities for climate adaptation.
Categorise as A, high potential risk / opportunity; B, medium / manageable potential risk /
opportunity; C, low / no risk / opportunity; or D, core contribution to a multilateral
organisation.
Option
1
2
Climate change and environment risks Climate
change
and
environment
and impacts, Category (A, B, C, D)
opportunities, Category (A, B, C, D)
C
C
C
C
C. What are the costs and benefits of each feasible option?
GoM and HMG are obligated to address these critical deficiencies. Doing nothing is therefore
not a feasible option in respect of the costs associated with the losses and liabilities related
to not addressing known preparedness weaknesses.
Cost benefit considerations are therefore made on the feasible options 1) Delaying the
introduction of preparedness improvements against 2) Implementing critical preparedness
measures as early as possible:
Delayed action
At a very basic level taking no action may be justified by the cost saved if there is no need
for emergency communications systems, warning systems and shelter. This is highly unlikely
as the volcano remains active and Montserrat is threatened by Hurricane and Tropical
Storms every year. Normal communication systems are affected whenever there is bad
weather in Montserrat.
There are two potential benefits to putting off investments in these preparedness priorities.
One is the costs averted by delaying expenditure on necessary activities for a further year or
so. The other is delaying payments for maintenance of old systems, e.g. the siren system, so
funds become available for new updated systems later on. The risk faced and eventual need
to pay for these activities negates the benefit of the first. The second is not an issue as all of
the project’s systems have been designed so they can be upgraded when needed.
The negative costs of delay outweigh benefits of investments elsewhere (e.g. education or
health) when they are considered against the costs and liabilities associated with losses that
would be avoided if emergency preparedness systems were functioning properly.
A delay, and any perception that Montserrat is not adequately prepared, has longer term
cost implications. High levels of preparedness are required if Montserrat is to build
confidence that it is a safe place to invest and to live in. People may choose not to stay on
island if preparedness is considered inadequate or they may chose to relocate to perceived
safer areas, further from the volcano, leaving poorer segments in comparatively vulnerable
areas.
Early implementation
Acting now to address known preparedness deficiencies has positive cost implications.
There will be an extensive return should there be a hurricane, volcanic event or other
disaster in the next year. Functioning preparedness systems would allow pre-emptive
actions to reduce losses and speed recovery and re-establishment of economic practices.
The potential to avoid unnecessary losses justify the investment (e.g. the value of one life
saved).
Action now will reduce potential liability costs and bolster confidence that Montserrat can
"live with the volcano." Maintaining preparedness is essential to attract inward investment.
It is recommended critical preparedness deficiencies are addressed at the earliest. The
benefits of waiting, essentially deferring costs for a year, are minimal and are outweighed by
the costs and consequences of not addressing known preparedness deficiencies to known
risks.
D. What measures can be used to assess Value for Money for the intervention?
Value for money can be assessed in three ways
1.
At the lowest level the cost of purchases and services will be considered against local
and regional options. The GoM are practiced and adept at seeking low cost options. In
accordance with GoM procurement procedures, competitive bids for externally
commissioned works costing over EC$ 100,000 will be obtained.
2.
At a middle level efforts will be made to ensure efficiency against the cost of inputs to
deliver activities and outputs. Existing project management mechanisms of the DMCA,
and GoM will be used to achieve this. The Head of Governor’s Office will monitor
project delivery.
3.
A precise cost benefit of the value of losses that will be avoided by bringing
preparedness up to scratch (adverse outcomes avoided) has not been assessed.
However, the most severe assessment will be lives saved or damage avoided as a
result of preparedness measures should there be a hurricane or increase in volcanic
activity. Indirect cost benefit would include the value of preparedness in investment
confidence, whether to remain or relocate to Montserrat and the cost of GoM and UK
liabilities. A significant return on investment is realised when compared with the
amounts already invested in the MVO to monitor and provide warnings (in the millions
of pounds), the siren systems and the communications equipment at Silver Hills.
Without this proposal these systems may not function as designed and paid for.
E. Summary Value for Money Statement for the preferred option
The consequences of not addressing known preparedness weaknesses in terms of the
human costs, the losses that may otherwise be avoided, and the associated liability of GoM
and HMG, strongly point to the necessity of adopting the immediate implementation option.
Investing now reduces these risks at no additional cost to activities that will have to be
implemented in the future. Investing now therefore gives us the largest return (in term of
risks reduced) and value for money.
In depth consideration has been given to sustainability and long term cost effectiveness.
Maintenance arrangements are in place for all project components to protect the investment
made (e.g. contractual agreements, yearly reporting). The design of the Silver Hills road
repair incorporates underground cables to increase resilience (i.e. less prone to wind
damage); and provision for a water main pipe, which would be considerably more costly to
install once the road has been concreted. Building a permanent road to the Silver Hills and
including provision for the water main pipe may help stimulate localised development
options.
Commercial Case
A. Clearly state the procurement/commercial requirements for intervention
The procurement of equipment and supplies will be undertaken in accordance with GoM’s
Procurement Rules and Regulations. The DMCA will take a lead overseeing tendering,
procurement and delivery. The Governor’s office collaborated with DMCA in the design of
this initiative and will continue to be engaged.
B. Value for money through procurement
Value for money will be achieved through competition to local contractors and local and
regional suppliers as appropriate.
Financial Case
A. What are the costs, how are they profiled and how will you ensure accurate
forecasting?
Repair and strengthening of the Silver Hills Road (including water distribution
piping for Silver Hills Road (EC$ 300,000) and Electricity cable ducting to
Silver Hills (EC$ 592,000)
EC $2,436,213
Secure site and protect generator and installations
EC $54,000
Repair the Siren system
EC $162,000
Mongo Hill Shelter
EC $8,430.
Church of God of Prophecy – St. Johns
EC $10,000
Davy Hill Wesleyan Holiness Church
EC $25,713
St Peter’s Old School Building
EC $60,676
Montserrat Community College
EC $10,000
Pasture Piece Compound Shelters
EC $69,856
Emergency Broadcast
EC $143,000
Total
Total £ (@£1=EC$ 4.1, to nearest £)
EC $2,979,888
£726,802
Detailed cost break downs have been reviewed by the DMCA , Director of Public Works and
Governor’s office. They are considered an accurate portrayal of costs that will be incurred.
The disbursement and completion schedule is considered realistic based on familiarity with
Montserrat, DFID experience and the advice of the Governor’s office. DFID will make
payments in two tranches. Monthly reports from the DMCA will include latest financial
expenditure and forecast information.
B. How will it be funded: capital/programme/admin?
The project will be funded from DFID’s Overseas Territories Capital budget for 2011/12 and 2012/13.
It is expected that up to £200,000 will be paid from 2011/12 and £526,802 from 2012/13.
C. How will funds be paid out?
Funds will be disbursed to the DMCA via GoM. Expenditure and forecast reports will be required prior
to disbursements.
D. What is the assessment of financial risk and fraud?
Low. The project will be managed by DMCA reporting directly to the Head of the Governor’s
Office (HOGO) and NDPRAC. Audit will be through GoM’s annual audited accounts for
2011/12 and 2012/13.
E. How will expenditure be monitored, reported, and accounted for?
The DMCA will submit monthly progress reports to the HOGO and NDPRAC. These will be
shared with the DFID Disaster Risk Reduction (DDR) adviser in Barbados and the DFID
Programme Officer in the UK. GoM’s Ministry of Finance and Economic Management will
monitor and transmit financial reports to DFID for the project.
Management Case
A. What are the Management Arrangements for implementing the intervention?
The DMCA will take a lead with all project arrangements and report to NDPRAC. An implementation
schedule is in place for project commencement:
Silver Hills
Access
road
Lead
agency
PWD
Silver Hills
Facility
Sirens
DMCA
Emergency
Broadcast
ZJB
Shelters
repairs
PWD
Dec
Jan
Assessment
Costing /
options
Tender for
works
Technical specs
agreed
DMCA Technical
advice
UNDP
Technical specs
agreed /
ordered
Costings in
place
Feb
Land
acquisition /
General fill
March
April
Complete
ordered
Delivery
Delivery
Three
shelters
MoUs
revised
Complete
MoUs
revised
Complete
May
Complete
B. What are the risks and how these will be managed?
Some land acquisition is required in order to repair the Silver Hills Road. No work will commence on the road
repairs until the contract for land purchase has been concluded.
C. What conditions apply (for financial aid only)?
The DMCA, in consultation with PWD, will estimate annual maintenance costs and ensure they are included in
GoM recurrent budgets from 2012/13.
D. How will progress and results be monitored, measured and evaluated?
DMCA will be responsible for day to day management and monitoring of the repairs. Oversight will be
provided from the Governor’s Office. Progress reports will be given to NDPRAC. DFID’s DDR Adviser
will review progress when he visits Montserrat.
Logframe
Quest No of logframe for this intervention: 3419436