Senegal - Public Works and Employment Project (AGETIP)

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 15166 PROJECT COMPLETION REPORT REPUBLIC OF SENEGAL PUBLIC WORKS AND EMPLOYMENT PROJECT (AGETIP) (Cr. 2075-SE) DECEMBER 7, 1995 Infrastructure Operations Division Western Africa Department 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 Currency Unit: CFA Franc (CFAF) US$1.00 = CFAF 316 (1989) US$ 1.00 = CFAF 5 10 (1994) WEIGHTS AND MEASURES Metric System FISCAL YEAR July I - June 30 ABBREVIATIONS AND ACRONYMS AfDB African Development Bank AFRICATIPE African Union of Public Works and Employment Executing Agencies AGETIP Agence d'Execution de Travaux d'lnteret Public contre le Sous-Emploi (Public Works and Employment Executing Agency) CIDA Canadian International Development Agency CFD Caisse Fran,aise de Developpement (French Development Fund) DCA Development Credit Agreement EC European Community ERR Economic Rate of Return MOD Maitrise d'Ouvrage Delegu6e (Delegated Contract Management) NGO Non Governmental Organization PPF Project Preparation Facility SAL Structural Adjustment Loan SDR Special Drawing Rights SIF Social Infrastructure Fund SME Small and Medium-sized Enterprises WFP World Food Program  FOR OFFICIAL USE ONLY The World Bank Washington, D C 20433 iU SA Office of the Director-General Operations Evaluation December 7, 1995 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Senegal- Public Works and Employment Project (Credit 2075-SE) Attached is the Project Completion Report (PCR) for the Senegal Public Works and Employment Project (AGETIP; Credit 2075-SE, approved in FY90. in the amounLt of lJS$20 million) prepared by the Africa Regional Office. The PCR includes Part 11. prepared by the Borrower. The main objectives of the AGETIP project, according to the Staff Appi .isal Report (SAR). were: (a) to create substanltial new emplovment in urbani areas as rapidly as possible; (b) to improve. through the execution of works financed by the project. the individUal skills of workers and the competitiveness of firms engaged; (c) to demonstrate the feasibility of labor-intensive ptublic projects and test new procedures to bid out small public works projects; arid (d) to produce results that are economically and socially useful. These objectives were to be achieved under the following conditions: (a) avoiding the need for increased civil service staff: (b) combining low cost and highi visibility; (c) supporting but not displacing other developmenit programs: and (d) using transparent yet expeditious procedures for subproject bidding. appraisal, contractinig anid disbursements. Project objectives were achieved, withouLt increasinig the size of the civil service, at low cost and with high visibility of results. Employmenit created was 8,718 person-years in contrast with 7,000 person-years at appraisal. Subprojects ulidertakenii i urban areas, especially in Dakar and its environis. included constructioni of schools arid clinics. roadworks. canal drainage, and other environmenital projects. The economic rate of retuLrn for subprojects ranged between 9.9% (for environmenital projects) to 37.4% (for urban roadworks). The project had a very positive impact on the construction sector; on local skills; on the environimenlt arid on social services (health and education). The project design was innovative and the preparatory work relatinig to procedures for subcontracting and procurement were critical to the project results. As a result of the encouraginig results of the project. a follow-Lip project (AGETIP 11), approved in FY92-, extended the coverage to new activiti-s arid areas withiln the country. The second project stressed that only commintiities that uLidertook mainteniance of their completed works would be considered for future works. Moreover, the AGETIP coiicept has been applied in several other coLintries (e.g.. Mali, Buirkinia Faso, The Gambia and Madagascar). The outcome of the project is rated as highly satisfactory. The institutionial developmenit impact is rated as riiodest, since it is still confined to a simall segmnent of goverinment procedUres. The surstainability of the pro ject is rated as likely. The PCR is of higil quality. A major lesson of this project is that proccdires for bidding,contiactinig and disbursinig striall public works projects can be made simpler and more tlexible thani those for larger projects withi good results. Moreover, the project's conicept arid approach have good replicability for other countries. An audit is planined, togethier with AG[ T P 1i Attachment 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.   FOR OFFICIAL USE ONLY REPUBLIC OF SENEGAL PUBLIC WORKS AND EMPLOYMENT PROJECT (AGETIP) (Cr. 2075-SE) PROJECT COMPLETION REPORT Table of Contents Preface. ................................................................. Evaluation Summary .............................................................................. iii PART I: PROJECT REVIEW FROM IDA'S PERSPECTIVE ....................................I A. Project Identity .................................................................I B. Background ................................................................ 1 C. Project Objectives ................................................................2 D. Project Design and Organization ....................... ..........................................2 E. Project limplementation ................................................................4 F. Project Results .................................................................5 G. Project Sustainability .................................................................8 H. IDA's Performance ................................................................9 1. Borrower's Performance ................................................................ 10 J. Project Relationship ................................................................ II K. Consulting Services ..1......................................................... 11 L. Project Documentation and Data ................................................................ 11 PART II: PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE ........ 12 A. Lessons Learned ................................................................ 12 B. Bank's Performance ................................................................ 13 C. Government's Performan ce ................................................................ 14 D. Project Relationship ................................................................ 14 PART III: STATISTICAL INFORMATION ................................................................ 16 A. Related Bank Loans and Credits ................................................................ 16 B. Project Timetable ................................................................ 17 C. Credit Data ................................................................ 17 D. Project Costs and Finanicing ................................................................ 1 8 E. Project Implementation ................................................................ 19 F. Project Results ................................................................ 19 G. Compliance with DCA Covenants ................................................................ 25 H. Use of IDA Resources ............ ....................................... . ........... 26 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 wiLhout World Bank authorization.   i PROJECT COMPLETION REPORT REPUBLIC OF SENEGAL PUBLIC WORKS AND EMPLOYMENT PROJECT (AGETIP) (Cr. 2075-SE) PREFACE This is the Project Completion Report (PCR) for the Public Works and Employment Project (AGETIP) in the Republic of Senegal, for which Credit 2075-SE in the amount of SDR 16.1 million was approved on December 14, 1989. The credit was closed on September 30, 1993, 11 months behind schedule. The balance of SDR 10,853.85 was canceled as of March 8. 1994. The PCR was jointly prepared by the Infrastructure Operations Division of the Western Africa Department of the Africa Region (Preface, Evaluation Summary, Parts I and III), and the Borrower (Part II). Due to its length, only a portion of the Borrower's contribution has been included as Part II. The report in its entirety is included as an annex. Preparation of this PCR was started during the Bank's final supervision mission of the Project in May 1994 and is based, inter alia, on the Staff Appraisal Report. the Development Credit Agreement; supervision reports; correspondence between the Bank and the Borrower; and internal Bank memoranda.   Jii PROJECT COMPLETION REPORT REPUBLIC OF SENEGAL PUBLIC WORKS AND EMPLOYMENT PROJECT (AGETIP) (Cr. 2075-SE) EVALUATION SUMMARY 1. Objectives. The project aimed to create 13,400 new temporary jobs (at an average cost of US$2,100 in 1989 dollars or about 7,000 person-years of employmilent) in urban areas as rapidly as possible, to improve the skills of workers employed through public w4orks financed by the project, to improve firms' capabilities and ability to offer sustained employment followhig the project, to demonstrate the feasibility of labor-intensive projects and to test procedures that would enable the public sector to commission such projects, and to undertake economically and socially useful public works subprojects. These objectives were to be fulfilled, moreover, without increasing the civil service, at the lowest possible cost and with high visibility. Efforts under the project were to support rather than replace other development programs. Procedures for subproject bidding, appraisal. contracting, disbursements were to be expeditious and open to scrutiny. Quantitative objectives used to determine and justify project costs were arrived at by surveying the local construction industry to determine the capacity of small firms and their training needs. The project further ained to acheive a labor ratio (salaries as a percentage ol'the total cost of the subproject) of greater than 20%. a turn-around time for payables of less thani ten days, and a procurement process that required less than three months (Part 1, section C; Part Ill, section F- I). 2. Implementation Experience. This project is considered highly satisfactory in that it exceeded all its major objectives and achieved substantial development results. The project was particularly innovative in that the executing agency. private and not-for-profit, was managed by a general assembly drawn mostly from the private sector. Thle agency was also exempted from public sector salary schedules and procurement and disbursement procedures, which fieed it from government administrative control and allowed for more efficient manageimient. Finally the project chose public works tasks that required a large work force, providing at least temporary employment opportunities and subsistence wages for unskilled workers. This project, therefore. temporarily alleviated some social distress caused first by structural adjustment (Part 1, para. 8) and later by the January 1994 devaluation of the CFA franc. The executing agency, AGETIP (Agence d'Execution de Travaux d'lnteret Public contre le Sous-Emploi), adhered closely to a procedures manual drafted by the Borrower throughout the project (Part 1, para. 11). Duriig implementation, however, the goverinment deposited its counterpart funds more slowly than planned, which resulted in an I l-month delay in project closing (Part 1, paras. 13. 3 1(c). Although the project fulfilled the government's objectives of creating immediate, short-term employment, its activities may have had a displacement effect on the Credit Communal component of the Municipal and Housing Development Project (Cr. 1884-SE), already under implementation. In particular, the Credit Communal was to on-lend to support revenue-earninig local projects such as markets, which were different from the non-incoine producing projects  iv financed under this project (Part 1, paras.14, 32). However, this should be discounted because in Cote d' Ivoire, the local Credit Communal (FPCL) was also not entirely successful due to overall country fiscal situation, the negative resource transfer to the local governments, in spite of the inexistence of an Agetip-type organization. 3. Results. The project met its objectives and is judged highly satisfactory. Under the project 416 subprojects were completed arid a total of 8,713 person-years of employment were created in urban areas. The average wage earned by workers in the project has been of CFAF 38,724 which represents, for one month of employment, over 33 percent of average per capita income in Senegal estimated at CFAF 90,500. An on-site training program successfully improved the skills of project workers and the capacity of firms carrying out works under the project (Part 1, paras. 20-2 1). The project demonstrated the feasibility of using transparent, streamlined procurement and management procedures to execute small public works quickly. The average turnaround time for payables was three days, the procurement process took 1.2 months (as compared with six months the average turn-around for public works procurement). The project's procurement procedures also allowed local construction firms to bid for and receive government contracts, which stimulated the local construction industry. Convinced of AGETIP's efficacy, the government has expressed its desire to "AGETIP-ize" other activities (Part 1, para. 24). The subprojects undertaken were also economically and socially useful (Part 1, paras. 17-18), and had a net positive impact on the environment (Part I, para. 22). A study carried out jointly by the Massachusetts Institute of Technology and IDA concluded that delegating responsibility for providing social services to the communities that use these services contributes to more efficient infrastructure provision, and has a higher chance of creating service delivery systems that work. This method, in fact, has brought about a statistically significant improvement in the efficiency and effectiveness of publicly funded infrastructure projects (Part I, para. 26 and Part 111, section F). 4. Sustainability. With proper maintenance, works executed under the project should have a life span of 30 years or more. The question of their beinig properly maintained is problematic, however. The Second Public Works and Employment Project (Cr. 2369-SE), approved in May 1992, contains a community participation component which is designed to disseminate information about the importance of maintaining completed public works. Beneficiaries who do not maintain works already executed on their behalf will not be considered for works in the future. Contractors and consultants whose technical and managerial capacity was increased under the project will also have a better chance of maintaining their businesses. AGETIP, the current executing agency for the Second Public Employment Project, will also be executor for the Community Nutrition Project (Cr. 2723-SE approved in May 1995). It is also executing other IDA-financed works under the Agricultural Research Project (Cr. 2107-SE), the Second Human Resources Development Project (Cr. 2473-SE), and the Municipal Housing and Development Project (Cr. 1884-SE). As a private not-for-profit entity, AGETIP can opt to continue as an NGO, to be converted into a for-profit organization, or to split into smaller, competing AGETIPs in the future (Part 1, para. 28). 5. Findings and lessons learned The Second Public Works and Employment project closely resembles the first, successful project. It does include, however, such innovations as a program of pilot activities to test AGETIP procedures in the development and management of municipal revenue-earning infrastructure and AGETIP-type mechanisms to support rural investments. From the first project, it also became clear that social sector subprojects should be  v located on the basis of numerical indicators (such as population, number of current and potential users of social infrastructures, tax collection efficiency, etc.). The procedures manual indicates how to use these indicators to rank subprojects by their need. An innovation in procurement was the introduction of a post-qualification bid which takes into account the remaining capacity in contract award in the evaluation of contractors' bids. It also provided explanations for bids 15 or more percent lower than the reference price. These changes are now reflected in AGETIP's updated procedures manual. Regarding the disbursement of counterpart funding, experience has shown the government to be slow in disbursing these funds. A covenant requiring the deposit of counterpart funds before review of subproject batches was therefore included in the Development Credit Agreement for the Second Public Works Project. It was also decided to design the training for contractors under the PPF so that under the second project training would be available as soon as the credit became effective. Building on lessons learned in the first project, the second project also includes a program to increase communiity participation in public works maintenance and the consideration of environmental impact in determining the eligibility of subprojects. Another eligibility criterion was therefore added to AGETIP's procedures manual to the effect that subprojects that might have a negative impact on the environmelit would not be considered for execution (Part 1. para. 31 (a)-(f)). 6. In addition, the project demonstrated the effectiveness of usilig a staged approach-- starting small to test innovative project designs, adjusting project design to respond to unexpected problems, and only then expanding the project to cover a wider area or population. The staged approach allows for flexibility in the project design without large-scale disruptions in public works implementation. The project also showed how important it is to coordinate project efforts with those already under way so that development projects do not compete with one another to the detriment of one of them (Part 1, para.32). 7. The Borrower learned that strong, centralized coordination is needed to avoid misunderstandings among various actors in the public works sector and within the project. A detailed annual work program and a procedures manual are therefore both indispensable for project success. Using these tools, a motivated team can implement a project effectively and transparently. A reliable computerized management system, furthermore, makes regular standardized reporting available to all parties and greatly facilitates project supervision. Finally, delegated contract management is a powerful tool for ensuring the efficient and transparent execution of small-scale public works (Part 1, para. 36).   REPUBLIC OF SENEGAL PUBLIC WORKS AND EMPLOYMENT PROJECT (AGETIP) (Cr. 2075-SE) PROJECT COMPLETION REPORT PART 1: PROJECT REVIEW FROM1 IDA'S PERSPECTIVE A. PROJECT IDENTITY Project Name: Public Works and Employmiienit Project (AGETII') Credit No.: 2075-SE Credit Amount: SDR 16.1 million (US$20 million equivalenit) RVP Unit Africa Regioni Country: Republic of Senegal Sector: Urbani Subsector: Public Works B. Background 8. When the project was identified in 1988, Senegal had been in the process of adjulstjg is economy for over six years, with a fourth Structural Adjustment Loan (SAL IV) uLider preparation. Unemployment was a very serious problem, particularly in Dakar. The situatioll was being aggravated by a number of factors related to the SALs, such as a reduction in the civil service and the streamlining of public enterprises. Two other trends were adversely affecting job seekers: (a) the age structure of the population was such that 100,000 new entranits ilnto the job market were appearing each year, anid (b) a similar number of migrants. driven out of rural areas by adverse climatic conditions and inadequate incomes, were arriving in Dakar each year to seek employment. 9. Until the investmenit environment improved allowinig new investments to generatc additional jobs, the unemployment problem, which public opinion considered an adverse elfect of adjustnent, was threatening the government's ability to sustain the process. In ordel to alleviate the social stress, the government was eager to complement its adjustmenit programi *with labor-intensive public works projects which would have an immediate impact on employ-ment and would also contribute to Dakar's and other cities' efficiency and attractiveness for investors. The rationale behind such a program was that its results, althougIl perhaps temporary. Would offset the increasing short-term unemployment problem and ease the transitioni to more sustainable employment creation. In addition, the project would extend the objectix es of the municipal component of the Municipal and Housing Development Project (Cr. 1 884-SE), which became effective in late 1988. It was in this context that the first Public Works and ERmploymlielit Project was conceived.  C. PROJECT OBJECTIVES 10. The objectives of the project were: (a) to create, at least temporarily, substantial new employment in urban areas as rapidly as possible: (b) to improve, through execution of the woks financed by the project, the individual skills of the workers who would be employed, and the corporate competitiveness of the firms which carried out works so as to develop their capacity to respond to increased opportunities for sustained employment after project completion; (c) to demonstrate the feasibility of labor-intensive projects and test the procedures that would enable the public sector to commission such projects; and (d) to undertake sub-projects that were economically and socially useful. In fulfilling these objectives, the following conditions were to be fulfilled: (a) avoiding the need to increase the civil service; (b) combininig low cost and high visibility; (c) supporting, but not replacing, other development programs; and (d) using transparent but expeditious and flexible procedures for sub-project bidding, appraisal, contracting and disbursements. 11. To achieve the above objectives, the project had three components: (a) a program of public facility and infrastructure rehabilitation and maintenance in urban areas, to be carried out under labor-intensive schemes by local contractors: (b) a package of services related to work organization, management, and labor force training. offered on a voluntary basis to local contractors awarded contracts under component (a); and (c) a supervision and monitoring component in order to monitor closely the progress of the project and to prepare the transition toward locally supported employment of the target group. 12. The quantitative objectives used to determine the costs and justify the project were arrived at by surveying the local construction industry to determine the capacity of small firms and their training needs. Other objectives included the creation of 13,400 new temporary jobs at an average cost of US$2,100 (1989 dollars) or about 7,000 person-years of temporary employment; a labor ratio (amount paid in salaries as a percentage of the total cost of the sub- project) of greater than 20%; a turnaround time for payables of less than ten days; and an entire procurement process time of less than three months. D. PROJECT DESIGN AND ORGANIZATION 13. The project's conceptual foundation was clear and was based on "delegated contract management" (maitrise d'ouvrage deleguee). The purpose behind this was to remove the government from project execution, while still maintaining its involvement in project planning and budgeting. The project worked as follows. Potential beneficiaries submitted proposals for sub-projects to the executing agency, AGETIP (Agence d'Execution de Travaux dI'nteret Public contre le Sous-Emnploi) which would determine the sub-project's eligibility for execution based on precise criteria outlined in its procedures manual. If the sub-project was declared eligible, AGETIP would appraise it, and would enter into an agreement, known as a convention de maitrise d'ouvrage delguee, with the beneficiary, whereby the beneficiary transferred all powers, rights and obligations pertaining to the execution of the sub-project to AGETIP for the duration of its execution. AGETIP carried out all the bidding procedures and awarded contracts for the engineering and execution of the sub-projects. It supervised the works periodically, paid the consulting engineers and contractors, and attended the handing-over of the works upon completion. AGETIP's roles and responsibilities throughout the entire process were finely  3 detailed in its procedures manual to which it adhered closely during project execution. Its functions were clearly understood by all actors because AGETIP offered seminars to explain its mandate and procedures to all the bidders it qualified. 14. The project was well prepared. After the Borrower prepared the procedures manual, the project's concepts were tested by executing five pilot sub-projects financed under funds made available by the Project Preparation Facility (PPF). At each stage, adjustments were made to correct problems before proceeding to the next. One lessons learned is that this staged approach ensured that the project's design was tight prior to full-fledged implementation, and helped ensure its success (Part I, para. 32). Project preparation went smoothly with only one caveat. The consultant hired by the government to generate a list of eligible sub-projects for financing made a wish list reflecting the desires of Non Governmental Organizations (NGOs) who were led to believe that their proposed sub-projects would be financed automatically. When project execution commenced, they refused to accept the rigorous requirements to which they were subject in order to obtain financing. This misunderstanding had repercussions on the relationship between AGETIP and the NGOs over the first three years, and it is only recently that the situation has improved (also see Part I, para. 38). 15. This project challenged some basic assumptions regarding the role of government and public services. Traditionally, the government's role was producing public services; this project showed that the government could successfully provide the same services by contracting them out to the private sector. The project was innovative in many respects. First of all, the creation of an executing agency, with a private legal status similar to that of an NGO, freed the project from government controls which could have impeded its efficiency. The agency had its own statutes and by-laws, and was managed by a general assembly whose members were drawn from the private sector. Secondly, AGETIP was granted exemptions from government salary schedules, and procurement and disbursement procedures. This enabled AGETIP to employ the more efficient procurement and disbursement procedures spelled out in its procedures manual, and to attract top-level professionals to staff the agency, both of which were absolutely crucial to the project's successful implementation. Finally, highly labor-intensive sub-projects were executed in order to provide employment opportunities and subsistence to unskilled workers, temporarily alleviating some of the social tension caused by the structural adjustment program. 16. The project's timing was appropriate. With the unemployment problem growing ever worse, a project focusing on creating employment, especially among the most disadvantaged populations, was crucial to maintaining political and economic stability. The scope and scale of the project are also deemed appropriate. The public living in urban areas perceived the unemployment situation as critical, so targeting urban areas for an employment-generating project was logical. Through regular garbage collection, the clearing of drainage canals, rehabilitation of health centers and public sanitary centers (blocs sanitaires) and street-paving, the overall attractiveness of Dakar and other urban centers was nicely enhanced. With the successful implementation of the first Public Works Project, the Second Public Works and Employment Project (Cr. 2369-SE), approved in May 1992, has expanded the operation to include rural interventions.  4 E. PROJECT IMPLEMENTATION 17. The project was declared effective on March 6, 1990 less than three months after Board presentationi. At first, it was limited in scope to urban areas and their outskirts. A phased approach was employed whereby iilplemenitation began with the primary cities and expanded to secondary cities after the first year. The wait was prompted by the desire to be able to assess the project's success and impact before movinig on. This process allowed AGETIP to determine what management components were effective and make modifications to ensure that the remainider of the sub-projects would be properly implemenited. 18. Project implementationi was greatly aided by close adherence to a procedures manual w hich contained procedures for: beneficiaries' submission of projects to AGETIP; preselecting and classifying consulting engineers and contractors: awarding contracts for goods and services, monlitoring and supervisilg works, disbursements: maniagilig the Agency's fulids; and reporting the Agency's activities. Contract awarding and sub-project execution wele performed on a tilmely basis. The entire procuremenit process took 1.2 months. When a sample was taken and analyzed, the result demonistrated that 90% of the contracts were performed within the specified time frames. Delavs were frequently due to the need for additional work or to a delay in the supply of materials relating to exemption certificates. 19. Part 111, section E shows a number of indicators of how project implementation proceeded. It shows that the number of enterprises prequalified had risen from 356 at effectiveness to a total of 1,030. and the number of consultinig engineers prequalified had risen from 85 at effectiveness to a total of 292. The number of sub-projects completed by November 30. 1993 stood at 416. The iiumiber of man-days of employment created was over 1.9 million. The labor ratio, representing the total spent in salaries per sub-project divided by the overall total cost of the sub-project, averaged out at 25.23%. This compares favorably with the SAR's prediction of greater than 20%. 20. One critical variance between planied and actual implementation centered on the payment of counterpart funds. The government deposited its counterpart funds much more slowly than planned. IDA and AGETIP met with government officials on several occasions in order to coordinate the deposit of these funds, but project execution was delayed by 11 months mainly due to this factor. This variance may have been avoided if the Development Credit Agreement (DCA) had included a covenant whereby IDA could retain the right to reftise to review a new batch of sub-projects if counterpart funding was not up to date. This type of covenanit was included In the Second Project (Part 1, para. 31 (c)). 2I. Finally, the Public Works and Employment may have had a negative impact oil the execution of the Municipal and Housing Development Project (MHDP), which provided credit through a Municipal Credit Fund for financing municipal income generating projects such as market rehabilitationi and constrLIction, on commercial terms, with an interest rate of 10.5%. Under the Public Works and Employment Project, on the other hand, beneficiaries were not requiested to reimburse the cost of the social infrastructure works executed on their behalf. This may put the Public Works and Employment Project In iidirect competition with the Municipal and Housilig Developmelit Project. Naturally, the beneficiaries went to AGETIP which provided the works free of charge rather than go to the Municipal and Housing Development Project wlhere they had to borrow althougil for different purposes (social infrastructure verstis economic  j infrastructure). The result is that the Municipal Credit Fund component of the Municipal and Housing Development Project has been disbursing much more slowly than foreseen at appraisal. Therefore, in the future, careful consideration of how proposed projects would effect ongoing ones is warranted. This is particularly important considering that one of the conditions wlhici were to be fulfilled in pursuit of the project's objectives was that the Public Works and Employment Project should support, not replace, other development programs (Part 1, para. 32). However, there has been a difference of opinion among tasks managers. The two projects were dealing with different objectives. AGETIP deals with social infrastructure that are noni-inicome generating while MHDP finances income generating projects. It is argued that the mayors. instead of going to the Credit Communal for financinig income generatinlg projects, preferied to go to AGETIP to obtain grants for social infrastructure. Although such correlationi is very hard to establish, the fact remains that the mixed disbursement record of MHDP calls into question the relationsihip of granlt financing versus loan financinig in the global urban setting. Projects under preparation will merge the "urban" and the "public works" approach under the fourtl urban project in Senegal, and in other Sahelian countries. AGETIP and the Association of Mayors have been collaborating with the Government in the planniniig of that project. However. considering the highly positive impact that AGETIP in Mali had onl the Second Urban Project in that country, it is not possible to generalize and draw negative inferences on imipact of AGETIP projects on urban projects. In addition, in the case of Cote d' Ivoire, the local Credit Commulial (FPCL) was also not entirely successful due to overall country fiscal situation, the negative resource transfer to the local governments, in spite of the inexistence of an Agetip-type organization. 22. The project risks identified during appraisal arose from the possible inability of the government to create stable jobs during project implementation, resulting in an extension of the project beyond its initial period, a transfer of employment to the public sector, jeopardizing already implemented public sector reforms; an loss of control of funds. Through the Second Project, the network of contractors will be utilized, thus suppressing the risk of transferriig employment to the public sector, at least temporarily. The loss of control of fulids was minimized through close ex post monitoring throughiout implementation and a carefully thoLIgilt- out implementation plan. F. Project Results 23. The project's results are considered highly satisfactory. As can be seen in Part Ill, section F-1, the project completed 416 sub-projects, with 74,928 temporary person-months of new jobs created. A total of 8,713 person-years of employment were created versus the 7,000 estimated at appraisal. The average turnaround time for payables was three days. and the entire procurement process took only 1.2 months. Some permanent employment was also created. The average wage earned by workers in the project has been of CFAF 38,724 which represents, for one month of employment, over 33 percent of average per capita income in Senegal estimated at CFAF 90,500. A survey of 50 consulting firms and small contractors showed that they were able to hire 1.3 more workers for a total of approximately 285 permanentjobs. The projects training program improved the skills of individuals and the capacity of the local construction contractors who executed sub-project. The feasibility of labor-intensive works was amply demonstrated as were the procedures enabling the public sector to commission such projects.  6 The sub-projects undertaken were economically and socially useful as seen in the followiig two paragraphs. 24. In terms of physical achievements, the project contributed to the renovation of 221,820m2 and to the construction of 101,300m of simple buildings including schools and dispensaries, to the rehabilitation of 133km of urban roads and the paving of 523,500m2 of roads, to the rehabilitation of 65,000m of sidewalks, to the demolition of 15,000m2 of old buildings, to the cleaning of 37,200 linear meters of drainage canals and the clearing of 122,000m2 of bushes, to the collection of 7,700m3 of sand, and to the filling of 18,000m3 of embankments. 25. The economic rate of return (ERR) was calculated for a sample of subprojects representing each category of works (sanitation, urban road work, development of green areas, building construction, sidewalk stabilization and storm drain clearing). The results show ERRs ranging from a minimum of 9.9% for the development of green areas to a maximum of 37.39% for urban road works. More details are given in Part 111, section F-3. 26. The project had a strong impact on the growth of the building and construction industry. The project disbursed a total of almost CFAF 11 billion or US$43.9 million through contracts with Senegal's small and medium-sized enterprises (SMEs). As the bulk of the sub- projects (376 or 90%) were executed through contracts of less than CFAF 50 million (US$200,000), a large number of SMEs were able to participate in the project. The simplified bidding process also allowed them to access government-financed contracts, some for the first time, thus meeting the objective of breaking down barriers to markets. AGETIP's rapid turnaround time for payables (average three days) allowed the SMEs to flourish, since they no longer needed a large amount of capital to be able to pay for supplies and pay their workers before receiving the transfer of funds themselves. AGETIP promoted and encouraged the creation of 93 SMEs by guaranteeing half of their sales volume for small businesses and 75% for micro-enterprises. The proliferation of SMEs over the course of the project is indicated by the number of contractors prequalified by AGETIP: 356 at project effectiveness versus the 1,030 prequalified at closing. 27. The project had a positive impact on human resource development. The training provided to those consulting firms and contractors having been awarded contracts over the course of project execution contributed to human resource development by increasing their technical and managerial capacity, thereby ensuring their survival. Courses offered included a business administration and financial management program for entrepreneurs and their administrative staff, as well as work organization programs for foremen, and technical training to improve the basic skills of laborers. Ample evidence demonstrates their increased capacity. At the beginning of the project, 50% of the SMEs registered with AGETIP were classified as category "A", the smallest ones; by closing, that percentage had been reduced to 30%, with a corresponding increase in the percentage of category "B" and "C" enterprises. Another indicator is that some SMEs were able to hook up with category "D" enterprises (the largest ones) to participate in joint venture international bidding. AGETIP also may be credited with having established a network among contractors and consultants.  7 28. The business community very much appreciated the training courses as indicated by their attendance. As of May 3 1, 1994', 1,209 participants had benefited from the training program, including 102 for work organization; 853 for management; 239 for labor improvement; and 15 for training of trainers. The success of the program is also indicated by the increased quality of the work being performed on job sites and by shorter project execution periods. The only shortcoming was that the training was not immediately available upon effectiveness. This was rectified under the Second Project (Part 1, para. 31 (d)). 29. A study conducted in 1992 pointed out that the project responded to environmental concerns in three areas: (i) the clearing of ditches and drainage canals responded to the need for immediate cleanliness in urban areas; (ii) the construction and rehabilitation of public health and educational centers responded to the need for a healthier and better educated populace; and (iii) the improvements made to community infrastructures and tourist attractions improved the general quality of life of urban dwellers2. The report warned, though, that although the project produced positive environmental results, these results could be reversed if the works were not properly maintained by the beneficiaries. As a result of the report's recommendations, AGETIP invited the local press to cover environmental issues in their reports and organized workshops to make the public aware of environmental problems. A community participation component was included in the Second Project for this reason (Part 1, para. 31 (e)). 30. The project had a healthy impact on the social environment. It gave communities access to educational and health services by providing improved sanitation, drinking water, health stations, pharmacies, schools and recreational centers for youth. In addition, through the "food for work" project, 1. I million food rations were distributed to households in exchange for community work. The Second Project includes a monitoring component whicih includes a study to monitor unemployment levels in the areas and sectors covered by the project. 31. At the national level, AGETIP's success has led to the governmentes wanting to "AGETIPize" various other activities, as it recognizes the efficiency and effectiveness of the system. As seen in Part 111, Section F2-1, AGETIP has introduced competition into the process of providing public goods, leading to lower costs of project execution and, hence, the ability to carry out more projects with the same budget than when the process in the hands of the Government which uses force account units to do the works. AGETIP has never been attacked in Senegal's free press, a remarkable achievement. All parties agree that it is the one organization that works. Recommendations have been made to the government to streamline procedures and increase accountability, but until these recommendations are implemented, various institutions have continued to seek AGETIP to implement part or all of their projects. 32. At the sub-regional level, the project is being replicated in a growing number of countries such as Niger, Burkina Faso, Mali, Mauritania, The Gambia and Chad, and has even spread to southern and eastern Africa (for example Madagascar) and beyond. In addition, the African Union of Public Works and Employment Executing Agencies, known as AFRICATIPE, serves as a forum for the agencies' directors to coordinate their work to improve efficiency, and serves as a tool for sub-regional integration and for promoting South-Soutil dialogue. Most Figures are available only for the combined training programs of the first and second projects. from a questionnaire circulated in June 1994. 2 Etude de l'lmpact des Projets AGETIP sur l'Environnement. August/September 1993. p. 87.  8 recently AFRICATIPE met with members of the Latin American Social Infrastructure Funds (SIFs) to discuss SIF experiences in: (i) delivering multi-sectoral services; (ii) covering rural as well as urban zones; (iii) becoming a permanent instrument in public investment policy; and (iv) interfacing with the decentralization process in progress. 33. Finally, to confirm the project's high impact, a study, undertaken jointly by the Bank's Policy Research Department and the Massachusetts Institute of Technology, analyzed the project and concluded the following about service delegation: (i) it has contributed to more efficient infrastructure provision; (ii) it has a higher chance of achieving impact than other alternatives; (iii) it has brought a statistically significant improvement in the efficiency and effectiveness of infrastructure projects. These improvements are derived from free access of private firms to service provision opportunities; increased competition among private sector firms; improved quality of the final product as a result of more efficient supervision; a better assessment of demand for infrastructure; and an improved match between demand for infrastructure services and the private sector's suppliers3. G. PROJECT SUSTAINABILITY 34. Some aspects of this project are sustainable and can be built upon. The works performed under the project, with proper maintenance, have a life span of over 30 years, although the road work will require rehabilitation every five years in addition to regular maintenance. AGETIP has impressed upon the municipalities the importance of setting aside funds for maintenance work. Their commitment to this goal will determine the sustainability of the works executed. This issue is being addressed under the community participation sub-component. The national and local governments have expressed their desire to improve public services and to continue to utilize delegated contract management. The training received by contractors and consultants and the skills learned by the laborers on the job will continue to serve them by opening up more employment opportunities, thereby ensuring their survival. 35. AGETIP is also executing works for other IDA-financed projects such as the Agricultural Research Project (Cr. 2107-SE) and the Second Human Resources Development Project (Cr. 2473-SE). AGETIP's future is uncertain since it has private legal status. It is currently serving as the executing agency for the Second Project, and will be the executing agency of the proposed community nutrition project slated for Board presentation in June, 1995. Below are three possible options open to the Agency: (a) it could continue as an NGO as it is now; (b) it could be converted into a for-profit organization; and/or (c) it could split into smaller AGETIPs. It is recommended that AGETIP split into smaller competing units, some of which could become for-profit, while others would remain non-profit to maintain its focus on assisting the disadvantaged. 36. There have several attempts to revise laws governing assigning and executing government contracts without producing any notable changes. The obstacle facing the government is finding a way to combine their dual needs of streamlining procedures while 3An Econometric Assessment of the Impact of Service Contracting on Infrastructure Provision: The Case of the AGETIPs of Africa, World Bank Research Project No. 678-64, 1994, pp.3-4.  9 upholding government values in such areas as equitable treatment of co-contractors and ensuring a stake for the government. H. IDA'S PERFORMANCE 37. IDA should be credited for thoroughly preparing the project. Preparation was particularly important, since the project incorporated several design features which had not been attempted in the Sahel before. IDA worked closely with AGETIP and government to promote a strong working relationship with both parties. IDA's supervision missions were carried with due frequency and with a variety of expertise (Part III, section H-2). Continuity was very strong, with one of the original appraisal members having seen the project through to the end. As of February 1995, 83.6 staff weeks had been spent on the project, of which I I weeks were spent in the field (Part III, section H- I). Lessons Learned from IDA's Perspective 38. The following lessons were identified during the course of project execution and have been taken into account in the design of the Second Project: (a) For the appraisal of sub-projects' location, for social projects, numerical indicators such as population, number of current and potential users of social infrastructures, tax collection efficiency, etc., were used to rank sub-projects in order to determine the effective need for the sub-project; (b) In procurement, on the evaluation of the contractor's bids, a post-qualification bid was introduced to take into account the remaining capacity of the contractors in contract award as well as provide explanations for bids that are 15% lower than the reference price and to have an additional guarantee. These changes are reflected in AGETIP's updated procedures manual; (c) Regarding the disbursement of counterpart funding, as experience has shown that government has been slow in disbursing its counterpart funding, a strong covenant linking the review of sub-project batches to the disbursement of such funding has been included in the DCA of the Second Project; (d) The training for contractors component should have been designed to start up earlier to enable participating contractors to have immediate access to training. For the Second Project, training for contractors was available when the credit became effective; (e) A program to increase community participation should have been promoted to help ensure the maintenance, and therefore the sustainability of the works. This program has been included under the training and studies component of the Second Project; and (f) The environmental impact of sub-projects was not taken into account in the eligibility criteria for sub-project appraisal and selection. To address this  l0 point, another eligibility criterion was added to AGETIP's updated procedures manual stating that sub-projects having a negative impact on the environment are not considered for execution. 39. In addition two other lessons may be drawn. The first regards the importance of using a staged approach when testing a project with an innovative design. The staged approach ensured that the project's design was tight prior to full-fledged implementation. Second, given the problem of a lack of complementarity between this project and the Municipal and Housing Development Project, in the future, very careful consideration of how proposed projects would effect ongoing ones is warranted. 1. BORROWER'S PERFORMANCE 40. The Borrower's performance overall was satisfactory. Those involved in the project maintained a good working relationship with both AGETIP and IDA throughout. The government granted AGETIP exemptions from taxes and customs for the work, supplies and services purchased to implement the sub-projects, and followed the procedures manual for the submission of sub-project proposals. There was no problem with government interference in the day-to-day affairs of the Agency. One weakness that had a negative impact on the timely execution of the project was the government's delays in depositing its counterpart funding payments into AGETIP' accounts. 41. AGETIP's performance was outstanding. The Agency's director participated in project preparation and attended negotiations. Over the course of the project, its management remained dynamic, enthusiastic, committed and highly effective. It provided the strong centralized coordination necessary to avoid misunderstandings between the government, local NGOs and local communities. AGETIP unfailingly implemented IDA's recommendations prior to the subsequent supervision mission. Activity reports and the various audit reports were submitted in a timely manner. The financial audits always contained "unqualified" opinions by the auditor. 42. AGETIP has become very popular with the government. The government has learned that delegated contract management can be successful for carrying out small public works contracts. AGETIP's efficiency and openness have led to its being delegated the management of contracts for the construction of schools, health centers, and research centers financed through other IDA projects such as the Agricultural Research Project (Cr. 2107-SE) and the Second Human Resources Development Project (Cr. 2473-SE). A proposed community nutrition project will also be executed by AGETIP, using a procedures manual designed for that purpose. AGETIP is also popular with the public. Many local associations have expressed their desire for AGETIP to continue and intensify its activities in light of the shortage of infrastructure in many communities. 43. Lessons learned from the Borrower's perspective include: (a) It is important to have strong, centralized coordination to avoid misunderstandings among the various actors involved in the project. One way to involve all parties is to draft a detailed work program for implementation annually;  II (b) The use of a highly detailed procedures manual is indispensable for project success. That, coupled with a motivated team, makes it possible to implement a project effectively and transparently; (c) A reliable computerized management system makes regular reporting, in a standardized format, very easy and greatly facilitates project supervision; and (d) Delegated contract management is a powerful tool for the efficient and transparent execution of small scale public works. J. PROJECT RELATIONSHIP 44. IDA, AGETIP and the government had a good working relationship throughout the project's execution. The supervision missions and the project in general were well supported by the government through their active contribution and easy accessibility. All aide-memoires were cosigned by IDA and AGETIP. Communication was effectively managed over the life of the project through the various reports produced. K. CONSULTING SERVICES 45. A large number of consultants were employed over the course of the project. Consultants were used as local contracting authorities to study the proposed sub-projects and prepare them for bidding. This original role was expanded during the project to include a supervision and monitoring component. International and local consultants were also used to carry out impact studies, mid-term and final evaluations, financial, management and technical audits, evaluate training needs, train beneficiaries. All consultations were short-term and yielded quality work with one exception. As mentioned earlier, the consultant hired by the government to generate a list of eligible sub-projects for financing made a wish list reflecting the desires of NGOs, instead of producing a list of sub-projects which would be socially useful with an acceptable economic rate of return. L. PROJECT DOCUMENTATION AND DATA 46. The project documents were key to the successful implementation of the project. They served as the basis for the design and execution of the project. The procedures manual, annexed to the SAR, was relied on heavily and greatly facilitated AGETIP's success. The covenants in the DCA were appropriate, but contained one weakness: it did not contain a provision that the government must deposit counterpart funding into a special account before IDA would disburse. As stated above, this error was rectified in the DCA for the Second Project. The result was that the sub-projects to be financed from the government's contribution experienced delays in execution. On the whole, the documents necessary for the drafting of the Project Completion Report were readily available. AGETIP's computerized management system proved to be a reliable source of data as well.  12 PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE 1. NOTE: The Borrower submitted a Project Completion Report dated January 1994. Due to the report's length, a portion has been condensed and reproduced below. The report in its entirety is annexed to this report. A. Lessons Learned 2. The beneficiaries were unanimous in acknowledging the efficiency of the Agency's procedures. The project served as an example and laid the foundation for transferring these functions to an effective private sector. The project also succeeded in reducing the rigidity of government contracting procedures and substantially improved urban infrastructure, both in the environmental and transportation sectors and in the health and education sectors. 3. All the contractors involved agreed on the efficiency of the project. Because of the prompt payments, they were no longer constrained by cumbersome government contract procedures, and the barriers to entering that market, which worked to the detriment of small enterprises, were broken down. The Agency awarded contracts equitably and transparently to a large number of small and medium-sized enterprises (SMEs), which were able to establish themselves and gain expertise through practical experience. The Agency allowed them to form working capital as a result of prompt payments --less than 10 days--and to purchase supplies, and create temporary and permanent jobs. 4. The Agency gave small individual firms and groupement d'interet economique (GIEs) an opportunity to win contracts. The objectives of equity and transparency were attained. The required labor ratios were observed and frequently exceeded, while at the same time SMEs were promoted and made more profitable. The businesses appreciated the speedy payment procedures and the "learning by doing" methods built into AGETIP's procedures. Once the Agency had achieved its objective of starting up a large number of businesses it developed the training program it needed in a later phase of the project. Training efforts should be intensified, since they would help improve the competitiveness and ensure the lasting operation of these enterprises. 5. Surveys of the people show that the target groups were reached. AGETIP work sites were selected to benefit the most disadvantaged sectors, and the work provided a substantial relief for those people. No matter how laborious the work, the supply was always greater than the demand. Moreover, some of these workers came from the construction industry and were trained at a number of different AGETIP job sites, finally ending up as part of the network of contractors. As for local neighborhood associations, they tend to want to see AGETIP intensify its activities in view of the shortage of infrastructure in many communities. 6. From a technical standpoint, the projects already completed have had a real impact on the quality of life and the environment, since they have focused on rehabilitation, the road system, and social infrastructure in the health and education sectors. It is clear from a comparison with the cumbersome government contracting process that the Agency has performed successfully in terms of rapid disbursements and in terms of prices, which are always below those charged by the government. 7 The project enables the municipalities:  '3 (a) to gain experience in selecting sub-projects, to be implemented on the basis of eligibility criteria, preparing quality engineering designs, and awarding contracts on the basis on bids, with the result of seeing a maximum number of socially and economically profitable sub-projects implemented transparently, at a reduced cost, and with the required quality; (b) to have an opportunity to gain experience in contractual management in performing a public service, thereby making a positive contribution to current and future urban projects in Senegal, (c) to gain credibility in the eyes of the local people, with regard to the municipalities' ability to perform their public service mission. It was recommended that in the future, the local people be more involved in selecting priority sub-projects, so that the work performed would be more relevant to them and the urban infrastructures would be better maintained. B. Bank's Performance 8. The Bank provided considerable support for the Public Works and Employment Project. Before the project started up, the Bank, together with the Borrower, organized two conferences in Paris and Dakar to inform the donors active in Senegal and interest them in cofinancing the program. As for the project Executing Agency, the Bank provided assistance to it in managing the special account during two seminars held in Senegal. As for contracting and procurement procedures, the Bank helped the Agency improve its bidding documents and its criteria for awarding contracts. Between November 1988 and October 1993, the Bank conducted twelve missions. Ten of these were supervision missions, and of these, three missions were made by a team of three persons. Two missions visited the Project to study how to compute rates of return and the net discounted value and to study the bidding documents for the sub-projects implemented by the various public works executing agencies. These missions lasted five days on average. Their objectives were to measure the progress of the project as it was being implemented and funds were being disbursed. The missions helped improve the Agency's performance and encouraged the borrowers to put up their cofinancing. These missions always told other lender about the positive achievements of the Agency, ad this helped the reject obtain further cofinancing. Other Bank missions for ongoing projects or projects under preparation, visited the Agency to learn about its operations, so that they could increase their own structures' effectiveness. Through discussions with persons involved in the various projects, municipalities, and the central government, the supervision missions were able to set up working teams to make ongoing and future urban projects more effective. These missions helped the Agency strengthen its management methods and above all to analyze and asses its contracting methods. They served as an opportunity to remind the Borrower to meet its commitment to providing counterpart funding and to explain the project results to other donors. 9. Lessons to be Drawn. A project properly appraised by the Borrower with the support of the future management can be successfully implemented. Use of a procedures manual by an experienced and motivated team made it possible to implement sub-projects transparently and effectively. A reliable, computerized management system made it possible to report regularly  14 on the project's activities, which in turn, made it possible to measure any risks or impediments to the project's development. In this connection, good communication between the Borrower and the Bank, as reflected in the supervision reports, was conducive to this state of affairs. A well audited project guarantees the security of the funds invested by the Bank to the profit of the Borrower and the success of its development program. All these factors helped make the Public Works and Employment Project a success. C. Government's Performance 10. The performance of the government of Senegal was generally satisfactory during the various stages of the project. The changes made in the government and its administrative structures worked to the advantage of the project. The following points should be made: (a) the government observed the provisions of the agreement signed with the Agency, and which was an integral part of the Development Credit Agreement. (b) the government followed the instructions in the procedures manual for submitting and implementing sub-projects taken from the three-year priority investment plan and financed by its counterpart funds. (c) the government paid its share of the financing in full, which enabled the implementation of 70 sub-projects generating 2,251 jobs, or an equivalent of 147,420 man- days at total wages of CFAF 298,141,964. (d) the Agency was granted tax and customs exemptions for the work, supplies, and services received to implement the sub-projects and to purchase the supplies and equipment needed for the Agency's operations. 11. In this connection, to reduce further the time required to process these exemptions, since a certain sluggishness was noted in the government, the Agency decided to assign one of its staff members exclusively to the job of monitoring exemptions on a daily basis (interfacing with the tax and customs administration and transmitting exemption certificates to contractors). This measure provided relief from the temporary burden of these duties and taxes on the cash holdings of contractors and helped them meet their deadlines, since exemptions were granted more quickly. 12. Lessons to be Drawn. The central government (Ministries and government offices and agencies) and municipalities accepted the principle of maitrise d'ouvrage deleguee (MOD) or delegated contract management and signed agreements to this effect with the Agency. In this first phase, 137 agreements were signed, 86 of which were signed with the municipalities. The 48 municipalities involved demonstrated their interest in using private enterprises to perform public works and provide services, through the good offices of the Agency. This marks the beginning of contracting management of its activities to the private sector, to ensure greater transparency and efficiency in providing public services. D. Project Relationships 13. Bank supervision missions were always well supported by the Senegalese authorities, who were available at all times and contributed to the successful completion of the project.  15 this cooperation was evident from the start of the project to the end. Information was exchanged effectively thanks to the periodic status reports sent out by the Agency, the Bank supervision reports, and the project audit reports. This ensured good communications throughout the implementation of the project. 14. Beneficiaries. The beneficiaries are linked to the Agency by the MOD agreement. which had the following features: (a) Beneficiaries turn over all their powers, rights, and obligations pertaining to project management to the Agency. The Agency is, therefore, given full power to choose the prime contractors, select the contractors on the basis of competitive bidding, sign contracts, supervise the works, check and accept the work, and pay the co-contracting parties; (b) The sub-project presented by the beneficiary is financed out of funds made available to the Agency. This financing is added to the beneficiary's investment budget, but the beneficiary is not required to pay it. 15. In these circumstances, beneficiaries were able to conduct important programs to rehabilitate urban infrastructure, with the following advantages: (a) The technical expertise of AGETIP in drawing up and executing public contracts in the construction sector; and (b) financing granted by the project in the form of subsidies, which made up for the deficit in the municipalities' investment capacity, enabled them to provide services and carry out urban projects, involving sanitation, green areas, road paving, and building urban infrastructure among other things. In addition, under the Agency's program to support training, it organized seminars for these municipalities. These seminars were used to circulate the procedures manual to the municipal technical offices, and initiate them into a data processing management system to make their services more efficient.  16 PART III: STATISTICAL INFORMATION A. Related Bank Loans and Credits Year of Loan/Credit approval Purpose of Project Status Comments 1. Cr. 336-SE. Sites 1972 To support government Closed 12/81 Rated satisfactory and Services Project withdrawal from direct housing financing; to diversify housing supply and concurrently broaden demand: to build institutions capable of pursuing and replicating such projects 2. Cr. 1458/SF-13- 1984 To gain insight into sector issues; Cr. 1458-SE Rated satisfactory SE. Urbain to improve the comprehensive closed 12/88; Managenment and management of Dakar SF-13-SE Rehabilitationi TA closed 12/89 Project 3. Cr. 1884-SE, 1988 To strengthen local governments, Under Closing date extended MuLnicipal and to improve policy formulation, supervision by one year to [lousing service delivery, urban investment 3/31/96 Developimienit and resource mobilization; to Project expand the economic impact and efficiency of the housing sector by (i) removing financial and institutional constraints to the National Housing Bank and (ii) by improving the operation of the urban land market through the annual supply of a significant number of serviced and titled plots, while promoting progressive privatization of the delivery of housing 4. Cr. 2369-SE, 1992 To continue and decentralize tJnder Project Second Public AGETIP activities in secondary supervision implementation has Wor ks and cities: to develop pilot activities to been hampered by a Emploviloenit Project test the feasibility of AGETIP's lack of counterpart approach in other areas; to funding, but otherwise organize training for is proceeding well. municipalities and the small and micro enterprises engaged in project implementation; to make AGETIP a sustainable agency covering its operating costs on a fee basis.  17 B. Project Timetable Item Date Planned Date Actual Identification 07/88 Preparation 06/88 - 02/89 06/88 - 02/89 Pre-appraisal 11/88 11/88 Appraisal 02/89 02/25-03/10/89 Credit Negotiations 07/89 07/18 - 21/89 Board 12/14/89 Credit Signature 01 /23/90 Credit Effectiveness 03/06/90 Project Completion 06/30/92 08/30/93 Credit Closing 10/31/92 09/30/93 C. Credit Data 1. Credit Disbursements IDA FY and semester Disbursements (US$ million equivalent) Estimated cumulative Actual cumulative Actual % of estimated 1990, 1st semester 0 3.47 0 1990, 2nd semester 4.4 4.24 96 1991 1 8.5 8.13 96 1991 2 13.0 12.33 95 1992 1 18.0 15.68 87 1992 2 20.0 20.22 101 1993 1 __20.22 101 1993 2 22.09 110 Note: There was no cost overrun; this report does not include any disbursemenits established throughi balance adjustment entries. 2. Credit Allocations (SDR million) Category As stated in DCA At completioni 1. Sub-projects under Part A of the project: a. Work sub-projects 6.80 9.94 b. Service sub-projects 4.50 1.54 2. Equipment for the executing 0.22 0.38 agency 3. Operating costs of the executing 1.40 2.46 agency 4. Consultants' services under Part 0.82 0.64 B of the project 5. Refunding of PPF 1.20 1.06 6. Unallocated 1.16 0.72 TOTAL 16.10 16.09 Note: SDR 10,853.85 was canceled on March 8. 1994. Numbers may not add up due to rounding.  18 D. Project Costs and Financing (US$ million) 1. Project Costs Category Appraisal* Actual Local Foreign Total Local Foreign Total Component (a) 24.43 3.65 29.92 22.20 5.75 27.36 Labor-intensive civil works (b): Services to contractors 1.27 0.00 1.27 3.01 0.17 3.18 (c): monitoring 0.32 0.25 0.57 0.47 - 0.47 Executing agency 1.19 0.08 1.27 2.66 0.35 3.01 operating costs PPF and 0.06 1.55 1.61 1.06 1.06 executing agency capital budget Price 0.21 0.29 0.50 contingencies TOTAL COST 27.48 5.82 33.30 27.24 6.27 33.51 Note: Numbers may not add up due to rounding. * Estimates for the various components were arrived at by surveying the local construction industry to determine the capacity of small firms and their training needs. 2. Project Financing l___________ _ Appraisal Actual IDA 20.0 22.1 Government of Senegal 5.0 5.0 AfDB 8.3 8.3 TOTAL 33.3 35.4 The results shown in this report are based on financing obtained from IDA, GOS and AfDB. The following agencies funded sub-projects separately: CIDA. Japan, CFD, WFP, EC.  19 E. Project Implementation 6-Feb-91 31-Mar-91 30-Sep-91 30-Jun-92 30-Sep-92 I1-Dec-92 31-Mar-93 30-Nov-93 No enterprises prequalified 356 396 680 796 Sso 912 1030 No maitresd'oe-vresprequalffied 85 110 160 190 233 267 292 No ofsubprojects completed 20 20 99 169 290 213 221 141 Person/day jobs created 29.815 237.384 414.270 461,200 525,129 547,308 1.93o) 99O The number of jobs created includes those created by consulting firms and jobs at AGETIP itself. F. Project Results 1. Direct Benefits Indicator SAR Actual Average daily wage (CFAF) 1700 1280 Average duration of works (days) __29 Average direct cost/job (US$) less than 4000 4236 Turnaround time of payables (days) less than 10 3 Procurement process (months) less than 3 1.2 Person-years of temporary 7000 8713 employment created No. of sub-projects executed __416 No. of contractors having won 231 contracts Labor ratio greater than 20% 25.23% The SAR estimated that the project would create a minimum of 7,000 person-years of temporary employment, at a direct cost of $2,100 per person-year. The SAR calculated this by taking into account that small and medium-sized firms would execute the contracts, and that these firms generally do not honor the minimum wage, instead paying CFAF 450 (small firms) and CFAF 1,300 (medium firms) as the average daily salary. The actual project generated 8,713 person-years of employment (2,178,275 person-days/250 working days (due to the rainy season the construction industry is active for about 250 days a year) or 74,928 temporary jobs of 29 days' duration, at a cost of $586 per job created. The actual project's average cost per person-month of employment equaled $353 ($4,200 per person-year of employment). The average daily wage paid equaled CFAF 1,280 (total wage CFAF 2,788,577,160/2,178,275 person-days). This average daily wage is higher than the expected daily wage paid by small firms and is closer to the wage paid by medium firms.  20 2-1. Other Benefits - Comparison between AGETI P's and the Central Government's Prices The table below gives some information on prices paid by AGETIP compared to prices obtained by the central government through local shopping. From this analysis, it appears that in the buildinlg trade, AGETIP's prices are almost always less than those obtained by the government. These differences can be explained by (i) AGETIP's more flexible procedures. (ii) shorter turnaround times for payables and easier payment arrangements (Government's turnaround time for payables often exceeded several months or a year); and (iii) the size of the businesses. AGETIP works primarily with SMEs which have low social costs and fixed costs, and which lease equipment and hire employees on temporary contracts on the basis of the work they have to perform, which is not always the case for government co-contractors. This disparity in prices is less marked for large enterprises, such as road companies, for instance, which are outfitted to compute costs and measure risks linked to their commitments. ITEM UNIT AGETIP PRICE GOVERNMENT PRICE % DIFFERENCE BUILDING TRADES Foundation trenches m3 850 1,303 35 Clean concrete m3 17,000 26,168 35 Reinforced concrete: m3 80,000 113,753 30 foundation Reinforced concrete- m3 80,000 113,753 30 lowcr footings l Reinforced concrete- m3 80,000 113,753 30 upper footings Concrete superstructure m3 80,000 113,753 30 Block work: 15 m2 2,500 4,090 39 Block work: 10 m2 2,000 3,061 35 Rendering m2 800 1,267 37 Supplies and parts: 70 x u 30,000 37,260 19 210 flush doors Supplies and parts: 80 x u 30,000 38,880 23 210 flush doors White-wash m2 300 367 19 Acrylic wall paint m2 600 849 31 Ceiling paint m2 1,000 1,260 21 Paint for woodwork m2 1,300 2,372 45 Supplies and parts: non- u 4,500 4,860 7 opening windows  21 Supplies and parts: MI u 3,500 6,450 46 non-opening windows Supplies and parts: built- u 1.000 1,555 36 in switches Supplies and parts: 120 u 8,500 10.968 22 light strip Supplies and parts: 60 u 7,500 10,291 27 light strip Supplies and parts: u 35.000 78,930 56 complete wash basin Supplies and parts: u 50,000 77,436 3| kitchen sink with 1 tub & 2 faucets ROAD WORK Laterite sub-base course m3 6,000 4,500 -33 Laterite base course m3 13,018 11,604 1 -12 34.880 2 T2 curbs ml 4,990 4,324 -15 STAGD 5 bis curbs ml 5,860 6,535 II Permeation m2 285 272 -s Dense, 4cm thick coated m2 2,460 3,500 30 stone Storable coated stone T 49,500 52,800 6 (1) True or natural laterite (2) Laterite reinforced with 3% cement (in weight) * 1988-93 (CFAF)  22 2-2. Other benefits - AGETIP's Disbursement Profile vs. Africa Urban Profile 100 90 80 70 60arters -rom A lAGETIP *~~~~~~~ 50 -~~~~~~~~~~~~~Af ri ca Urban :j40 30 20 10 0 1 2 3 4 5 6 7 8 9 10 11 1213 14 1516 Quarters from Approval 3. Economic Impact Sub-project type Estimated ERR Sanitation work (example of 16.6% - 21.5% Manguiline Canal) Periodic maintenance of 31.75% to 37.39% urban roads (Fann Bel-Air corniche) Road improvements 18.88% - 21.72% (Guediawaye Blvd.) Development of green areas 9.9% - 20.85% (Goree esplanade) Rehabilitation of buildings 14.72% - 19.40% (Nabil Choucaire Medical Center). Building construction 16.93% - 19.52% These six sub-projects represent the six different categories of works performed under the project. For assumptions, see pages 64-67 of the Borrower's contribution.  23 Cost-Benefit Ratios Some social parameters are difficult to quantify, but the impact of the project on the incomes of people can be used: Total Cost Wages distributed Labor ratio Sub-project (CFAF) (CFAF) (%) Construction of 46 120,395,442 32,458,215 27 classrooms in the Diourbel region Improvements to 179,811,959 44,821,973 25 Guediawaye Blvd Improvements to 188,156,535 46,675,430 25 Fann Bel-Air rocade Improvements to East 8,546,616 2,300,200 27 Dakar corniche Rehab. operating 86,300,108 25,644,775 30 room of A. Le Dantec Hospital The improved balance of payments as a result of using local materials is another parameter that would be interesting to consider. Other quantitative factors that are difficult to quantify include: (a) improvement of living conditions and the environment; (b) social satisfaction of the beneficiaries; (c) contribution to structural transformation of the economy; and (d) contribution to social sectors and human resources (education, medical care). 4. Financial Impa=t N.A.  24 5. Studies Study Purpose Status Impact of Study S Study of the To determine the Completed in The average economic rate economic rate of economic rate of January 1992 of return of sub-projects return of sub- return of a sample of executed under the project projects sub-projects was over 12%. Environmental To determine the Completed in Impact of sub-projects on Impact studv impact of sub-project September 1993 the environment was execution on the positive, but could environment and make potentially be negative if recommendationis for works not properly future projects maintained. Information campaign under-taken to sensitize urban population to importance of main- taining works TIechnical (i) To verify that the Completed in The report made 12 | verification of sub- procedures and January 1992 recommendations which projects mechanisms used to were subsequently supervise work sites implemented by AGETIP's were being followed; technical director, among (ii) to verify that these which were: (a) any works were of change made in the adequate quality and engineering plans during were economical; (iii) the course of project to make execution should figure in recommendations on the final plan on file; (b) how to improve the road rehab. projects should system for supervising always take into account work sites. drainage problems; (c) locally produced materials sholid be tested for quality; (d) the technical director should attend all work hand-overs.  25 G. Compliance with DCA Covenants Section of DCA Description of Covenant Deadline Status 3.01 (a) Commitment to objectives met 3.01 (b)(i) Compliance with terms of met the Convention and provisions for transfer of Credit proceeds 3.01 (b)(ii) Due diligence met 3.01 (b)(iii) Procedures manual met satisfactory to IDA 3.01 (b)(iv) Agency directors positions met filled with staff satisfactory to IDA 3.01 (b)(v) Agency and Borrower to met inform IDA of problems 3.01 (b)(vi) Provision of monthly before the 15th of each met activity reports month 3.01 (b)(vii) Sample sub-project met contract always satisfactory to IDA 3.01 (b)(viii) Sample beneficiary met contract always satisfactory to IDA 3.01 (b)(ix) Submission to IDA of new October 15, 1990 met batch of sub-projects estimated at US$7.5 M 3.01 (c) Borrower not to amend, met waive, abrogate the Convention without IDA agreement 3.01 (d)(i) Executing agency to 6/30/91 - completion of execution of sub-projects execute new sub-project Ist batch of sub-projects somewhat delayed due to aggregating the equivalent delays in receiving of US$5 million before 6/30/92 - completion of counterpart fundinig 6/30/92, of which $2.5 2nd batch of sub-projects million to be completed by 6/30/91 3.01 (d)(ii) Counterpart funding met but with delays which caused a delay in project closing by 11 mIaothis 3.02 Procurement to be carried met out in accordance with DCA 3.03 Mid-term review 1/31/91 Mid-term took place in February/March 1991 4.01 (a) Maintain records and met accounts 4.01 (b) Have records and accounts semi-annually slight delays in receipt ot audited, and provide IDA audits, but audits always with audit reports had unqualified opiliioIl 4.01 (c) For expenditures made on semi-annually slight delays in receipt of basis of SOEs, maintain audits, but audits always accounts and provide IDA had unqualified opillion with semiannual audit reports I  26 H. Use of IDA Resources 1. Staff Inputs (in staff weeks) FY Preparation Appraisal Negotiations SPN PCR Total 89 18.6 13.0 31.6 90 12.1 6.3 18.4 91 8.7 8.7 92 9.7 I 9.7 93 8.5 0.5 9 94 0.2 4.2 4.4 95 1.8 1.8 Total 18.6 13.0 12.1 33.4 6.5 83.6 2. Mission Data Stage of Specialization Performance Dates of Project Cycle Month/Year No. persons Days in field represented Ratings reports Identification 06/88 3 7 E, EA, FA n.a. 07/20/88 Preparation 11/88 3 8 E, FA n.a. 12/08/88 Appraisal 02/89 5 14 C, E, EA, n.a. 03/14/89 FA, L Supervision 1 01/90 2 11 E, FA 1. 1, 1, 1, 1 03/15/90 Supervision 2 07/90 2 8 E, EA 1, 2, 1, 2, 1 08/29/90 Supervision 3 11/90 2 8 E, EA 1, 1. 2, 1, 1 02/06/91 Supervision 4 04/91 3 4 E, EA, FA 1, 2, 2, 1, 1 06/06/91 Supervision 5 10/91 4 9 E, EA. L, S 1, 2, 2, 1 ,1 11/20/91 Supervision 6 07/92 2 5 E, EA 1. 2. 2, 1. 2 09/09/92 Supervisioni 7 10/92 3 5 DC, E, FA 1, , 1. 1 ,1 11/24/92 Supervision 8 02/93 2 10 E, EA 1, 1, 1, 1, 1 03/11/93 Supervision 9 04/93 2 5 E. EA 1, I, 1, 1, 1 07/02/93 Supervision 10/93 4 5 E, EA,L. S 1. 1 1. 1, 1 11!30/93 I 0/PCR I I I I_I Specializations represented C Consultaiit DC Division Cliiet E. Econiomist EA Enitineer Advisor FA -- Fittaticial Anialyst L --t Lawvcr S :o=ioioClolo5 fPci ror tndic Ratiegs (in respective orderi Pito ,ci Developn1icn t)hOjectives iinpunictneation Progress Coniplialice with Legal Covenants Ptoiect Mianaoemient Pertorimiatice A a ilahilitv (it Funds   .4 r i --I. - i E-