Madagascar - Rural Water Supply and Sanitation Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 34060 IMPLEMENTATION COMPLETION REPORT (PPFI-Q0650 PPFI-P7580 PPFI-P7581 PPFI-P7582 PPFI-P7583 IDA-30250) ON A CREDIT IN THE AMOUNT OF SDR 12.6 MILLION (US$17.3 MILLION EQUIVALENT) TO THE REPUBLIC OF MADAGASCAR FOR THE RURAL WATER SUPPLY AND SANITATION PILOT PROJECT December 21, 2005 Water and Urban 1 Country Department 8 Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective June 30, 2005) Currency Unit = Ariary AR = US$ 0.495 US$ 1 = AR2023 FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS ANDEA Water Basin Agency AR Ariary (national currency unit) CAS Country Assistance Strategy CDP Community Development Plan CNEA National Water and Sanitation Committee DEA Directorate of Water and Sanitation (within MEM) FMG Franc Malgache (former national currency unit) HIPC Highly Indebted Poor Countries IDA International Development Association IEC Information-Education-Communication JIRAMA Water and Electricity Public Utility MDG Millennium Development Goal MEM Ministry of Energy and Mines NGO Non-Government Organization NPV Net Present Value O&M Operation and Maintenance PAEPAR Rural Water Supply and Sanitation Pilot Project PPPHW Public Private Partnership for Hand Washing PPP Private Public Partnership PRS Poverty Reduction Strategy PRSC Poverty Reduction Strategy Credit PU Project Unit QAG Quality Assurance Group RWS Rural Water Supply RWSS Rural Water Supply and Sanitation SDR Special Drawing Rights SOREA (Water) Regulatory Agency SSPA Sector Strategy and Action Plan TA Technical Assistance VLOM Village Level Operation and Maintenance WASH Water, Sanitation, Health (consortium of donors and national agencies, led by Wateraid) W&S Water and Sanitation WUA Water User Association WUP Water Utilities Partnership Vice President: Gobind T. Nankani Country Director James Bond Sector Manager Jaime Biderman Task Team Leader/Task Manager: Christophe Prevost  REPUBLIC OF MADAGASCAR Rural Water Supply and Sanitation Pilot Project CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 4 5. Major Factors Affecting Implementation and Outcome 10 6. Sustainability 11 7. Bank and Borrower Performance 12 8. Lessons Learned 14 9. Partner Comments 14 10. Additional Information 15 Annex 1. Key Performance Indicators/Log Frame Matrix 16 Annex 2. Project Costs and Financing 18 Annex 3. Economic Costs and Benefits 20 Annex 4. Bank Inputs 22 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 24 Annex 6. Ratings of Bank and Borrower Performance 25 Annex 7. List of Supporting Documents 26 Annex 8. Borrower's Contribution 27 MAP IBRD NO. 34318  Project ID: P001564 Project Name: Rural Water Supply and Sanitation Pilot Team Leader: Christophe Prevost TL Unit: AFTU2 ICR Type: Core ICR Report Date: December 22, 2005 1. Project Data Name: Rural Water Supply and Sanitation Pilot L/C/TF Number: PPFI-Q0650; PPFI-P7580; PPFI-P7581; PPFI-P7582; PPFI-P7583; IDA-30250 Country/Department: MADAGASCAR Region: Africa Regional Office Sector/subsector: Water supply (71%); Central government administration (23%); Sub-national government administration (4%); Sanitation (2%) Theme: Water resource management (P); Participation and civic engagement (P); Decentralization (S); Other communicable diseases (S); Other financial and private sector development (S) KEY DATES Original Revised/Actual PCD: 05/12/1997 Effective: 06/17/1998 06/17/1998 Appraisal: 06/11/1997 MTR: 09/23/2002 09/23/2002 Approval: 12/18/1997 Closing: 12/31/2003 06/30/2005 Borrower/Implementing Agency: GOVERNMENT/MINISTRY OF ENERGY AND MINES Other Partners: STAFF Current At Appraisal Vice President: Gobind T. Nankani Callisto E. Madavo Country Director: James P. Bond Michael Sarris Sector Manager: Jaime M. Biderman Jeffrey Racki Team Leader at ICR: Christope Prevost Andreas Wildt ICR Primary Author: Peter Koenig 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: Yes Quality at Entry: 1998 with a rating of "Marginal" ("3" rating) Project at Risk from 1999 - 2000 - QAG Report November 2001 (rating "2")  3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: As stated in the Project Appraisal document (PAD), the main objective of the Rural Water Supply and Sanitation Pilot Project (PAEPAR) was to improve the capacity of the Government, the communities and the private sector to expand a sustainable and cost-effective coverage in water supply and sanitation (WSS). The project objective was clear and appropriate in view of the critical challenges facing the WSS sector at the time of the appraisal, namely: (i) inadequate sector policies and legal and regulatory frameworks; (ii) inefficient sector organization and coordination; (iii) limited capacity to construct, operate and maintain WSS systems; (iv) inefficient promotion of community participation and poor sanitary education; (v) low access to safe water and sanitation in rural areas, poor basic hygiene education and knowledge of benefits of using potable water and safe sanitation; and (vi) low recovery of user charges to cover operation and maintenance (O&M) costs. The project objective was consistent with the Government's priorities. In May 1995, the Government approved the Sector Strategy and Action Plan (SSPA) which aimed at defining the global and operational objectives in the WSS sector. The global objectives were to enhance the sector contribution to public health improvement and strengthen the sector participation in the social and economic process. In rural areas, the objectives were to alleviate the water fetching burden by reducing time and effort to provide populations with safe water, and raise the sanitation service level. The medium term objective was to raise the water supply level of 12 % to 50 % and the sanitation level of 5 % to 30 % by 2010. The SSPA also recommended specifying the role of the different actors (the state at central and decentralized level, communes, donors, private sectors and NGO's) to emphasize skills and know-how and to encourage community participation at each stage of the sector development. The project objective was in line with the 1997 CAS (Report No. 1628-MAG) which emphasized the need for "strengthening the capacity to develop efficient WSS services", and "broad based growth and human capital development through community empowerment to reduce poverty". The project was not complex or risky in terms of institutional and policy development. 3.2 Revised Objective: The project objectives were not changed. 3.3 Original Components: l Component 1 : Policy and legal framework for the WSS sector (US$1.3 million or 6% of total cost): (i) assistance to the formulation of a WSS sector policy and its implementation strategy, (ii) assistance to the preparation of a Water Law; and (iii) assistance to the communication and dissemination of sector policy and legal framework; l Component 2 : WSS sector capacity building and institutional development (US$3.6 million or 16 % of total cost): (i) support to the Project Implementation Unit (PIU); (ii) WSS sector restructuring study; (iii) assistance to the WSS Directorate (DEA) of the Ministry of Energy and Mines (MEM) to the implementation of the restructuring, training and capacity building; (iv) water resources management study; and (v) assistance to the development of small contractors and companies (artisans, masons, extension workers) and promotion of the local private sector; - 2 -  l Component 3 : Community based WSS services: This component included two sub-components: l Community needs assessment, education and support (US$2.3 million or 10% of total cost): (i) beneficiary and demand assessment; (ii) studies on community financing and contribution mechanisms; (iii) development of tools to facilitate community mobilization, hygiene education, and establishment of a community request system, based on existing material and experiences; (iv) preparation of technology choice for rural WSS services; and (v) information education communication (IEC) campaigns; l Extension of RWSS services (US$15.1 million or 68% of total cost) with the assistance of: (i) UNICEF for constructing village boreholes and fitting them with handpumps; (ii) two NGOs for constructing gravity systems; and (iii) communities. The project components represented a balance of institutional support, capacity building and infrastructure development. They addressed the sector institutional and policy shortcomings and supported sector reforms by building the capacity of public institutions, NGOs and the private sector. All these activities were critical in a pilot project. The project physical component was designed to demonstrate the feasibility of providing sustainable access and also to meet urgent needs of some of the rural population, in particular in the Southern part of the country that is prone to recurrent famines due to the extreme scarcity of water resources. The project design built on successful experience in the country and the region: for the gravity schemes, it replicated the experience of NGO already active in the sector and for the handpump schemes, it built on the experience gained in a UNICEF project implemented in the same region. Physical components were generally well designed. However water quality assurance and sanitation and hygiene education, which are crucial elements for reaping optimum health benefits of water supply projects, were somewhat overlooked during preparation and appraisal, but these elements were addressed later on during project implementation. 3.4 Revised Components: The nature of the project components was not revised. However, the project was amended four times mostly to adjust procurement arrangements, disbursement category amounts and add new activities, as substantial savings resulting from lower than estimated costs of the physical components (about US$2.5 million) and the appreciation of the SDR (US$1.4 million) during project implementation. As these new activities did not significantly alter the structure of the project, no formal restructuring was necessary. The closing date of the Credit was postponed from June 30, 2003 to June 30, 2005, so that funds could be fully utilized. 3.5 Quality at Entry: A Quality at Entry Assessment (QEA) was carried out in FY98. The overall assessment of quality of preparation was assessed as "Marginal" ("3" rating). It appears from the QEA ratings that the project was not ready for implementation, sector policy reform objectives were too ambitious and did not have sufficient government ownership, particularly with regard to the urban side, and contracting arrangements for drilling boreholes did not seem to have been thoroughly thought out. However, the QEA review of the project, together with a change of team management was instrumental in leading to an early change in some project implementation arrangements, in particular for the drilling contracting arrangements. The judgment of the QEA panel seems appropriate at the time of the review. Nevertheless, in retrospect, it appears overly - 3 -  severe, since the project did manage to largely achieve its main objectives, as elaborated below. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: The achievement of objectives is rated satisfactory. The achievements of the project are assessed against its initial objective. The assessment takes into account: (i) the outcome indicators (Annex 1) defined in the PAD and (ii) the findings of the impact survey carried out at the end of the project in 200 communities which benefited from the project. Particular attention was paid to the participatory process, water use and hygiene, functioning of the water point committees and perception of the benefits and quality of service. Realistic future projects are designed and funding obtained: The Government has successfully developed the legal, institutional and policy framework to support its rural water supply strategy, developed with the assistance of the project, to scale up investment in the years to come. A new water Law was adopted in 1999 and all related by-laws by 2003. In 2005, the Government endorsed the national WSS program (Programme National d'Acc