Algeria - Water Supply Engineering Project

The World Bank FOR OFMAL USE ONLY Report No. 6270 PROJECT COMPLETION REPORT DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA WATER SUPPLY ENGINEERING PROJECT (IDAN S-17 AL) June 13, 1986 Water Supply and Sewerage Division Europe, Middle East and North Africa Region This document has a resticted distribution and may be used by recipients only In th performance of their offcial duties. Its contents may not otherwise be disclosed without World Bank authoriatioin. THE WORLD BANK MOR OFFICIAL USE ONLY Wastgto". D.C 20433 U.S.A Oet# eI ow"to-caW41 June 13, 1986 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on the Democratic and Popular Republic of Algeria - Water Supply Engineering Project (Loan S-17-AL) Attached, for information, is a copy of a report entitled "Project Completion Report on the Democratic and Popular Republic of Algeria - Water Supply Engineering Project (Loan S-17-AL)" prepared by the Europe, Middle East an' North Africa Regional Office. Further evaluation of this project by the Operations Evaluation Department has not been made. Yves Rovani by Otto Maiss Attachment This document has a restricted distribution and may be used b) rtcipients on!y ir. the performance of their oftial duties Its contents may not otherwise be disclo-se without Wo4kd ank authorization FOR OFFICIAL USE ONLY EXCHANGE RATES Currency Unit : Algerian Dinar (DA) = 100 centimes Appraisal Year Average (1979) : US$1 = DA 3.75 Average Over Project Period : US$1 = DA 4.80 Completion Year Average (1985): US$1 - DA 5.20 ACRONYMS APC - Assembl4e Populaire Communale DPRK = Direction des Projets et R4alisations Hydrauliques IRB = Institut d'Hydrotechnique et de Bonification SEDAL = Soci6t' des Eaux de l'Agglow6ration d'Alger SONADE = Soci6t6 Nationale de Distribution d'Eau Potable This document hs a restricted distribution and may be used by recipients only in the perfomunce of their official duties. Its contents may not otherwise be disclosed without World Bank authoudsation. DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA LOAN S-17 AL - WATER SUPPLY ENGINEERING PROJECT PROJECT COMPLETION REPORT Table of Contents Page No Preface ..................... ...... ........ i Basic Data Sheet ................................. 11 Highlights ....................................... iv I. INTRODUCTION 1........ ...................... 1 II. PROJECT PREPARATION AND APPRAISAL ................ 2 Origin, Preparation and Appraisal ................ 2 Project Description ..*.......................... 2 Negotiations and Approval ........................ 2 Loan Covenants .................................. 3 III. PROJECT IMPLEMENTATION ..D COST .................. 3 Loan Effectiveness and Project Start-Up .......... 3 Project Execution ................................ 4 Consultant Selection and Procurement ............. 4 Project Costs ................................. 4 Disbursement ................ 5 Reporting ........................................ 5 Consultants' Performance ......................... 5 IV. PROJECT JUSTIFICATION ............................ 5 Project Achievements ............................. 5 Bank Performance ........................... .. 6 V. CONCLUSIONS ...................................... 6 ATTACMENT A - Comments from the Borrower.............. 8 MAP - IBRD No. 14626 DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA LOAN S-17 AL - WATER SUPPLY ENGINEERING PROJECT PROJECT COMPLETION REPORT PRFACE This report reviews the preparation, implementation and achievements of the Water Supply Engineering Project (Loan S-17 AL) in Algeria, for which a loan of US$5 million was made to the Government of Algeria. The loan was signed in February 1980, becpme effective in September 1980 and was closed at the end of 1984. The project was implemented by the Ministry of Hydraulics. The Water Supply Engineering Project was the first Bank-financed operation in the water supply sector. Prior to that, the Bank had made Loan 1545-AL of US$82 million for sewerage works in Algiers, the nation's capital and largest city. The objective of the Water Supply Engineering Project was to prepare a master plan for the exploitation of water r-sources in the Algiers Region. A first construction stage of this plan is currently under execution, partly financed by Loan 2461-AL of US$290 million. The completion report was discussed with the Ministry of Hydraulics during a mission in February 1986. The data presented in the report were provided by the Ministry of Hydraulics. In accordance with the revised procedures for project performance audit reporting, this Project Completion Report was read by the Operations Evaluation Department (OED), but the project was not audited by OED staff. Following standard procedures, OED sent copies of the draft report to the Borrower and Executing Agency for comments, Comments from the Borrower have been reproduced as Attachment A to the report. - ii - DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA LOAN S-17 AL - WATER SUPPLY ENGINEERING PROJECT PROJECT COMPLETION REPORT BASIC DATA SHEET KEY PROJECT DATA Item Appraisal Actual Expectation Total Project Cost (US$million) 6.70 7.00 Underrun (Percent) 4.3 Loan Amount (US$million) 3.61 5.00 Disbursed 3.61 Repaid as of January 31, 1986 1.93 -- Date of Physical Completion 06/84 06/83 Proportion Completed by Above Date (Percent) 100 80 Time Overrun (Percent) 25 Economic Rate of Return (Percent) N/A Financial Performance:6 N/A Institutional Performance Good Good Cumulative Disbursements (US$million) FY 1980 -- 0.60 FY 1981 0.53 2.07 FY 1982 1.32 3.55 FY 1983 2.30 5.00 FY 1984 2.65 --- FY 1985 3.61 - iii - OTHER PROJECT DATA Original Item Plan Revision Actual First Mention in Files -- -- 10/18/78 Government Application -- 10/02/78 Negotiations 11/12/79 Board Approval -- 01/15/80 Loan Agreement Date 02/14/80 Effectiveness Date 06/17/80 09/30/80 09/17/80 Closing Date 12/31/83 12/31/84 11/13/85 Borrower Democratic and Popular Republic of Algeria Executing Agency Ministry of Hydraulics Follow-on Project Name Algiers Regional Water Supply Loan Number 2461-AL Amount (US$million) 290.0 Loan Agreement Date 09/26/84 MISSION DATA Month, No. of No. of Staff Date of Purpose Year Days Persons Days Report Identification 05/79 10 2 20 06/08/79 Appraisal 07/79 7 2 14 08/20/79 Supervision 04/80 12 2 21 05/01/80 Supervision 12/80 12 2 24 12/17/80 Supervision 04/81 7 2 14 04/21/81 Supervision 09/81 9 1 9 10/28/81 Supervision 01/82 9 2 18 01/27/82 Supervision 05/82 7 2 14 05/17/82 Supervision 12/82 6 2 12 12/28/82 Supervision 06/83 5 1 5 08/15/83 Supervision 12/83 10 2 20 01/27/84 Completion 02/86 7 1 7 03/21/86 Total 101 181 - iv - DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA LOAN S-17 AL - WATER SUPPLY ENGINEERING PROJECT PROJECT COMPLETION REPORT HIGHLIGHTS 1. Loan S-17 AL of US$5 million was made to the Government of Algeria in January 1980 to help finance a US$7 million water supply engineering project for Algiers, the capital city and largest urban agglomeration. Prior to this loan, the Bank had made Loan 1545-AL of US$82 million for sewerage works in Algiers. As part of the sewerage project, an evaluation of the existing water works in the Algiers area was carried out. It showed that water services in tuat area were very deficient and that the water supply systems needed to be improved and expanded urgently. This evaluation led to the formulation of the water supply engineering project, with the objectives of preparing a master plan for water resources in the Algiers/Sebaou area and a phased program of works to meet urban water demand in Greater Algiers through the year 2010. 2. The project was successfully implemented and its objectives fully achieved. A water supply master plan was established for the Algiers/Sebaou area and approved by the Government. A construction project for the improvement and expansion of water supply services in Greater Algiers was defined and is currently under implementation. This project is partly financed by Loan 2461-AL of US$290 million made in September 1984. As a result of the engineering project, the Ministry of Hydraulics, which was the executing agency, has greatly improved its management and planning capabilities. 3. There were some delays in appointing consultants for the studies included in the project. Consequently, the project execution took a year longer than anticipated at appraisal. In subsequent projects, the Ministry of Hydraulics has made major efforts to accelerate the selection and appointment of consultants ane contractors. DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA LOAN S-17 AL - WATER SUPPLY ENGINEERING PROJECT PROJECT COMPLETION REPORT I. INTRODUCTION 1.01 The Bank's involvement in the water supply and sewerage sector in Algeria started in 1976 with the preparation of a sewerage project for Algiers, the capital city and largRst urban agglomeration. This was some k fteen years after the country's independence in 1962. During those years, the urban population had grown considerably. The Algiers' population, which in 1962 was about 500,000, had reached 1.5 million in 1976. However, in spite of this tremendous population increase, no major improvement and extension of the city's infrastructure, such as water supply and sewerage, had taken place. There was water shortage in the city. Wastewaters were not evacuated properly, threatening the public health and environmental conditions. 1.02 To remedy this ituation, the Government, with assistance from the Federal Republic of Germany, prepared in 1977 a master plan for the collection and disposal of wastewaters and stormwater in the Algiers metropolitan area. The preparation and implementation of this plan was necessary, as any immediate increase of the water supply to Algiers, without providing proper disposal of the generated wastewaters, would have resulted in further deterioration of environmental conditions in the city. A first construction stage of the sewerage master plan is currently under way. It is partly financed by Bank Loan 1545-AL of US$82 million. This phase is expected to be completed by the end of 1987. 1.03 For some time, the Government was also preoccupied with the water supply situation in Algiers. In 1978, it was estimated that only 60 percent of the city's population had continuous water service. The per capita consumption was about 112 liters/day, 30 percent short of the calculated demand. Greater Algiers was drawing its water supply from the Mitidja Groundwater Aquifer also used for irrigation in the rich agricultural valley surrounding Algiers. No further increase of groundwater production was feasible and a new water source had to be tapped for the city. 1.04 In October 1978, the Government requested the Bank's assistance in preparing a master plan of water resources in the Algiers/Sebaou area. The plan had to co-er the use of the resources for both urban supply and irrigation. In priority, a first construction stage of urban water works had to be defined to allow quick improvement of the water supply situation in Algiers. - 2 - B. PROJECT PREPARATION AND APPRAISAL Oritin, Preparation and AppMasa 2.01 Prior to the Water Supply Engineering Project, there existed various feasibility studies of water supply to Greater Algiers. The Bank, in the course of the appraisal of the sewerage project (Loan 1545-AL), had also evaluated the water supply in Algiers and concluded that the city's water supply had to be increased to meet current and future demand. None of the previous studies, however, was considered complete enough to permit the formulation of a comprehensive water master plan in the Algiers area. 2.02 In October 1978, the Government requested the Bank's assistance in preparing this plan. The project was identified in May 1979 and appraised two months later. Given the nature of the project, no separate appraisal report was prepared. The terms of reference for the studies were prepared by the Ministry of Hydraulics and reviewed by the Bank. Project Description 2.03 The project provided technical assistance to the Government for: (i) the carrying out of studies to assess uiban, industrial and agricultural water requirements in Greater Algiers and surrounding areas within a radius of about a hundred miles from Algiers City; (ii) the elaboration of a master plan for the collection and use of water resources in the project area, including a phased program of works to meet the above water requirements through the year 2010; (iii) the formulation of a master plan of potable water dittribution in the Algiers metropolitan area; and (iv) the preparation of detailed designs, construction plans and tender documents for a first construction stage of works for Greater Algiers. 2.04 The cost of the studies was estimated at US$7 million, with a foreign exchange component of US$5 million. The project was scheduled to be completed by the end of 1983. No study of the water supply sector and organization in the Algiers area was included in the project. This was part of the sewerage project financed under Loan 1545-AL. NeKotiations and Approval 2.05 Negotiations for a Bank loan of US$5 million to finance the foreign exchange cost of the project were held in Washington, D.C. from November 13 to -3- 19, 1979. Agreement was quickly reached on the project contents and objectives, except for a possible future refinancing of the loan. As usual, the Bank had proposed that the technical assistance loan should be refinanced under any future loan for a construction project which would have arisen out of the technical assistance. The Algerian Delegation objected to that proposal on the grounds that it would commit Algeria to accept refinancing of the loan on future unknown conditions, which might not be as acceptable as the current ones. The Bank agreed to drop the proposed refinancing. 2.06 The loan was approved by the Board on January 15, 1980. The agreement was signed on February 14, 1980 and became effective on September 17, 1980. There was no special condition of effectiveness. Loan Covenants 2.07 The Ministry of Hydraulics was put in charge of the project execution. In addition, the following main covenants were set out in the Loan Agreement: (i) The Borrower had to employ consultants acceptable to the Bak, under terms and conditions satisfactory to the Bank (Section $.02(a)); (ii) All documents related to the project and prepared by the consultants had to be submitted for the Bank review and comments (Section 3.02(d)); (iii) The Borrower had to review with the Bank the conclusions and recommendations of the studies (Section 3-02(e)). II. PROJECT IMPLEVENTATION AND COST Loan Effectiveness and Project Start-Up 3.01 There was no special condition of effectiveness. Only the Government's formal ratification of the Loan Agreement was required. The original deadline of June 17, 1980 for declaring the loan effectiveness was extended to September 30 to provide the Government with additional time to complete the ratification process. The loan was declared effective on September 17, 1980. 3.02 Meanwhile, in November 1979, the Ministry of Hydraulics had invited seven groups of engineering consulting firms to submit proposals for the studies. The list of selected firms was reviewed and approved by the Bank. Only four groups effectively presented proposals for the studies at the end of 1979. -4- Project Execution 3.03 It was originally foreseen that the project execution would start in April 1980. A period of four months was allocated fo:r the evaluation by the Ministry of Hydraulics of the consultants' proposals. Actually, it took the Ministry more than a year to evaluate the proposals. The evaluation was, however, thoroughly done and very objective. Perhaps the time allowed at appraisal was too short and the evaluation process judged too easy under the Algerian administrative procedures. A group of engineering firms was selected in April 1981, a year later than originally scheduled. The selection was approved by the Bank. 3.04 Overall, the project execution was carried out diligently. The Loan Agreement provided that the project would be completed by mid-1983. Actually, the studies were completed in June 1984, reflecting the original delays in appointing the consultants. The late completion of the studies, however, had no effect on the first objective of the project, which was to formulate a construction project fo" Greater Algiers. A feasibility study of the proposed works was ready in June 1983 and provided the basis of a water supply project for Greater Algiers. In June 1984, the Bank made Loan 2461-AL of US$290 million for this project. Consultant Selection and Procurement 3.05 In selecting the consultants for the studies, the Ministry of Hydraulics followed the Bank's guidelines for the use of consultants. Its selection of a British consortium was approved by the Bank. Project Costs 3.06 Actual and estimated project costs are compared below: Local Foreign Total Local Foreign Total ..... DA Million ..... ..... US$ Million ..... Actual Costs 14.81 17.27 32.08 3.09 3.61 6.70 Appraisal Estimates 7.50 18.75 26.25 2.00 5.00 7.00 Ir.crease (Decrease) 7.31 (1.48) 5.83 1.09 (1.39) (0.30) Increase (Decrease) % 97.5 (7.9) 22.2 54.5 (27.8) (4.3) Overall, the total project cost in US dollars decreased by US$300,000 or 4.3 percent below the original estimates. The cost in Algerian Dinars, however, increased by DA5.83 million or 22.2 percent over the appraisal estimates. This resulted from a 28-percent appreciation of the US dollar vis-A-vis the Algerian dinar during the project execution period. The exchange rate, which was US$1 for DA 3.75 at appraisal and which was assumed to remain constant during the project implementation, fluctuated to an average - 5 - of US$1 for DA 4.80. The decrease in the foreign component also stemmed from the appreciation of the US dollar vis-A-vis the pound sterling which was the currency used to pay the consultants. In addition, some analysis and laboratory tests originally planned to be made outside Algeria, were effected in the country. Disbursement 3.07 Actual and estimated disbursements of the loan in US$ million are compared below: Actual Disbursements Proiected Disbursements FY In-Period Cumulative In-Period Cumulative 1980 -- 0.60 0.60 1981 0.53 0.53 1.47 2.07 1982 0.79 1.32 1.48 3.55 1983 0.98 2.30 1.45 5.00 1984 0.35 2.65 -- -- 1985 0.96 3.61 Only US$3.61 million of the loan amount was used for the project. The balance of US$1.39 million was cancelled. To provide sufficient time for the completion of the studies following the late start of the project execution, the closing date was extended by one year to December 31, 1984. Reporting 3.08 Quarterly progress reports were submitted regularly and on a timely fashion to the Bank. During the project implementation, the Ministry of Hydraulics as well as the consultants reviewed with the Bank the findings and conclusions of the studies. All the reports and documents related to the project were submitted to the Bank. Consu t Performance 3.09 It is the Ministry of Hydraulics' view that the consultants have accomplished a satisfactory work. The Bank concurs with this view. The consultants' studies were used to specify water works for Greater Algiers; their construction is currently under way. The Ministry of Hydraulics and the consultants maintained good relations during the project implementation. IV. PROJECT JUSTIFICATION Project Achievements 4.01 The project was conceived to formulate a water supply master plan for the Algiers/Sebaou Region and to propose new water works for Greater Algiers. This objective was fully achieved. The studies have led to the formulation of - 6 - the Algiers Regional Water Supply Project for which the Bank made Loan 2461-AL of US$290 million in 1984. This project is under construction and scheduled for completion at the end of 1987. The studies also defined a second stage of water works to be built for Greater Algiers. A detailed design of this stage would be soon undertaken. 4.02 The master plan also covered the use of the water resources in the project area for irrigation. Current laud development and planning of these resources follow the sequence set out in the consultants' studies. In this regard, the project was instrumental in strengthening the planning and technical capabilities of the Ministry of Hydraulics. Bank Performance 4.03 At the time the project was appraised, water services in Greater Algiers were deteriorating. No plan was available to improve these services. A major achievement of the project was to outline the measures necessary to restructure the city's water works. A construction project was formulated and is currently under way. Through the project, the Ministry of Hydraulics has also considerably strengthened its planning capability. The studies have allowed the Ministry of Hydraulics to establish an appropriate long-term development program for water resources in an important region of the country. The Bank strongly urged the undertaking of the study and is very supportive of the resulting master plan and development program. 4.04 The project execution was supervised regularly. From the project start to completion, a total of nine supervision missions visited Algiers. It should be noted that always as part of these missions, the Algiers Sewerage Project (Loan 1545-AL) was supervised together with the preparation of the Algiers Regional Water Supply Project (Loan 2461-AL). The missions' advice and follow-up letters contributed in improving the quality of the studies. The Ministry of Hydraulics is pleased with the project's results and the Bank's performance during the project implementation. V. CONCLUSIONS 5.01 The project was successfully implemented. Its objectives were fully achieved. A construction project of new water works for the metropolitan area of Algiers was defined and is under implementation. Once this project is completed, water services in the Algiers area are expected to improve considerably. Greater Algiers is surrounded by rich cultivable land. The project has defined the works to undertake to increase irrigation and agricultural production in the area. The Ministry of Hydraulics has also greatly improved its management and planning procedures through the preparation and implementation of the project. 5.02 The studies were completed with a small delay due to the late start of the project execution. Much time was taken by the Ministry of Hydraulics to evaluate the consultants' proposals and select a consulting firm. Subsequently, the Ministry and the Bank have devoted considerable efforts to -7- improve and speed up evaluation processes in other Bank-financed projects. In spite of the original delays, the expected construction project for Greater Algiers was, however, formulated on schedule and is now under implementation. March 21, 1986 WORLDBANK MS SYSTEM - 8 - ATTACEMNT A ZCZC EEDP1833 JWS0078 COMENTS FROM THE BORROWER EAPED EM2DC REF : TCP D.S. JWS0078 JIV635 IN 02/05:14 OUT 02/05:17 =62354 MHYD DZ VCI OFF ALGER (MHYD) NR 2449 L.5 LE 02.06.86 A 10.00 MINISTRY OF HYDRAULICS, OF THE ENVIRONMENT AND OF FORESTS -HEAD OF PLANNING- WORLD BANK WASHINGTON D.C. ATTENTION: MSSRS. SHIELDS AND RODRIGUEZ TXT NR 11/DP/SDE/2153/BCCR/86 FOLLOWING YOUR DISPATCH OF MAY 27, 1986 CONCERNING THE ENGINEERING PROJECT COMPLETION REPORT (Loan S 17 AL) STOP PLEASED TO INFORM YOU THAT AFTER EXAMINATION OF SAID REPORT WE DO NOT HAVE ANY PARTICULAR OBSERVATIONS STOP REGARDS STOP DIRECTOR OF PLANNING A. SALEM.- STOP AND END COL..BN..NM =06021024 2 4' ALGERIA ENGINEERING LOAN FOR WATER SUPPLY STUDIES SkioRS' Annoc ALGER 0 PROJECT LOCATION " PROJECT AREA t 0ik RIVERS ida 9Constanine 0 - .- INTERNATIONAL BOUNDARIES 0o OEI Eulra Sk-Aas s-- Kmrnis Ksetif o, 0l Asom r ýe 0 6 Mostaganem El Asnam 0 au Bordi Bou 1o O Arreridi OAïn Beïda Arew gqhil Izane ORAN OM'Siila Mohammadf aOBatna 00 0 0 0Mascara Tiaet ' , Kenchela Tebessa Am Tomouchent - 0 Bou Saada Maghnia T e rcen OS jid a 7 - T0S s , OSaïda Biskra oNo- 340 U/ 340. 02 0N 190~ 19 rh,o Map has been prt'dby tho Wodld Hank's staff exnftujMoy for the too injen,a KILOMETERS___ KL ETERS of thed of the to which it is OttOh-d 7ho denminatton sused -d th W KLMEER S boundarib s shown on this map do not imply, on the part of the World Bo-k and it offi tnc wy dgttm the logal status Of any twritory or any endosmnt or acteptance of sulh boundli-s 440 o66