Armenia - Earthquake Reconstruction Project (EQRP)

Document of The World Bank FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT Report No. 17255 ARMENIA EARTHQUAKE RECONSTRUCTION PROJECT (EQRP) (CREDIT 2562-AM) DECEMBER, 1997 Infrastructure Sector Europe and Central Asia 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 (as of October 6, 1997) Currency Unit = Armenian Dram (AMD) AMD$1 = .001992627 US$ US$1 = 501.85 AMD$ AVERAGE EXCHANGE RATES Oct. 1996 Feb. 1997 June 1997 Oct. 1997 413.71 463.52 499.75 501.85 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRC)NYMS AUA American University of Armenia CBRD Center for Business Research and Development EBRD - European Bank for Reconstruction and Development EC - European Commission EQZ - Earthquake Zone FSU - Former Soviet Union GOA - Government of Armenia ICB - International Competitive Bidding IDA - International Development Association LCB - Local Competitive Bidding MOE - Ministry of Economy MOF - Ministry of Finance MTR Mid -Term Review PIU - Project Implementation Unit SOE - Statement of Expenditures TA Technical Assistance UN - United Nations UNDP - United Nations Development Program USAID - United States Agency for International ARMENIA'S FISCAL YEAR January I - December 31 Vice President: Johannes Linn, ECA Sector Director: Ricardo Halperin, ECSIN Sector Leader: Margaret Thalwitz, ECS][N Responsible Staff: Eric Peterson, Task Manager, Seema Manghee, Daniel Maly (ECSIN), Deniz Baharoglu (Consultant)  FOR OFFICIAL USE ONLY Contents Preface ................................................ i Evaluation Summary .............................................. ii Part I. Project Implementation Assessment ...............................................1 A. Background and Statement of Project Objectives .............................................. 1 B. Achievement of Project Objectives .............................................. 3 C. Major Factors Affecting Project Implementation .............................................. 9 D. Project Sustainability .............................................. 9 E. Bank Performance .............................................. 10 F. Borrower Performance .............................................. 11 G. Assessment of Project Outcome .............................................. 11 H. Future Operations ...............................................11 I. Key Lessons Learned ...............................................11 Part II. Statistical Tables .............................................. 14 Table 1: Summary of Assessments .............................................. 14 Table 2: Related Bank Loans/Credits .............................................. 16 Table 3: Project Timetable .............................................. 17 Table 4: Credit Disbursements: Original, Revised and Actual .............................................. 17 Table 5: Key Indicators for Project Implementation .............................................. 17 Table 6: Key Indicators for Project Operation .............................................. 18 Table 7: Studies Included in Project .............................................. 18 Table 8A: Project Costs .............................................. 19 Table 8B: Project Financing .............................................. 19 Table 9: Economic Costs and Benefits .............................................. 20 Table 10: Status of Legal Covenants .............................................. 21 Table 11: Compliance with Operational Manual Statements .............................................. 22 Table 12: Bank Resources: Staff Inputs .............................................. 23 Table 13: Bank Resources: Missions .............................................. 23 Appendixes: A. Mission's Aide-Memoire B. Borrower contribution to the ICR C. Miscellaneous appendixes C- I Disbursement Graph C-2 Civil Works Implementation Summary C-3 Sample Survey Map: IBRD 28965 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.  -i- IMPLEMENTATION COMPLETION REPORT ARMENIA EARTHQUAKE RECONSTRUCTION PROJECT (EQRP), CREDIT 2562-AM Preface This is the Implementation Completion Report (ICR) for the Earthquake Reconstruction Project in Armenia, Credit No. 2562-AM in the amount of SDR 20.1 million (US$28.0 million equivalent), signed on February 1, 1994, and effective on April 4, 1994. The Credit was closed on June 30, 1997, (the original closing date was June 30, 1996) at which time a balance of SDR21,470 remained, giving a total disbursement of 99.89 percent of the Credit. However, in USD (the equivalency denomination for local disbursements) the project disbursed 106 percent of the appraised value (USD29.7 million). Cofinancing for the project was provided for preparation through a Japanese grant, in the amount of $1 million. This ICR was prepared by Eric Peterson with Seema Manghee, Daniel Maly (ECSIN) and Deniz Baharoglu (Consultant) and reviewed by Judy O'Connor, Country Director, and Margaret Thalwitz, Sector Leader, of the Europe and Central Asia Region. Preparation of this ICR was begun during the Bank's final supervision mission, April 28, 1997. It is based on findings of that mission and on material in the project file. The borrower contributed to the preparation of the ICR by completing the borrower's project completion evaluation report, drafted by the Government team, including the Project Implementation Unit, under the Ministry of Economy.  ii IMPLEMENTATION COMPLETION REPORT ARMENIA EARTHQUAKE RECONSTRUCTION PROJECT (EQRP), CREDIT 2562-AM Evaluation Summary Project Objectives and Background 1. Although it came some five years after the devastating earthquake of December, 1988, the World Banks' Earthquake Reconstruction Project - an IDA credit - was the first significant donor activity in Armenia in the post-Soviet era. The credit was the only major program to pick up the challenge to continue rehabilitation work which had begun under Soviet leadership, but had stopped upon the dissolution of the Union. The Bank's effort--prepared and appraised in 1993 and made effective in 19941--came therefore at a time of economic stagnation, political transition, and by then low morale in the Earthquake Zone (EQZ), as several years had passed without repair of physical and economic infrastructure. The project was seen primarily as one of an emergency/humanitarian nature and therefore did not include significant policy or reform conditions. However, certain concepts were introduced, such as the principle of housing cost recovery and the Bank's competitive procurement requirements. While the emergency nature of the project appears diminished by the delay between the earthquake and project effectiveness, emergency conditions remained, as government and private sector lacked the means to take mitigating initiatives: intolerable living conditions in temporary shelter areas and lack of basic infrastructure still dominated the environment in the EQZ when the project was appraised, and remain for many citizens of the EQZ to this day. 2. The project pursued three objectives: a) to provide improved housing and living conditions to residents of the earthquake zone (EQZ); b) to reconstruct basic infrastructure which will support employment creation; and c) to support a longer term sustainable program for rehabilitation in the EQZ. An economic rate of return could not be calculated for housing, municipal and TA components, but was estimated at an average of 50 percent for factory shell completion. Expected risks included the Bank's inexperience in physical works in Armenia; potential effects of a trade blockade; local unfa,miliarity with Bank procurement requirements; possible turnover of local implementation staff; and the chance that occupants of restored housing would be unable or unwilling to pay for maintenance of the units. Efforts were made in project design to mitigate these risks, for the most part, successfully. 3. The project comprised four components: Housing, including completion of unfinished apartment buildings; repair and strengthening of damaged buildings; and land development and construction of serviced plots and starter houses for single family ownership and self-help expansion; Municipal Services, including provision of bathhouses for temporary housing areas, completion of selected water supply and sewerage sub-projects in Spitak, Vanadzor, and Stepanavan; and community facilities; Unfinished Factory Shells: the completion of factory shells for existing profitable industries; Technical Assistance, Training, Equipment and Studies, for procurement and construction supervision housing reform, regional development of the Earthquake Zone, and to support the country's Earthquake Engineering Center. A delay of nine months between negotiations and effectiveness was due to the need to resolve political questions arising from regional territorial conflict.  iii 4. The credit of SDR 20.1 million was disbursed locally in USD equivalent. At appraisal, this was equal to $28.0 million. Disbursements followed the projected profile except for a lag at the start (see Appendix C-1), totaling at closing $29.75 million, thanks to SDR appreciation. Moreover, additional civil works valued at about $600,000 were achieved through the use of contractor penalties, for a total value of $30.3 million. Non-Bank financed land, infrastructure and sunk costs valued at $17.3 million bring the total project cost to $47.6 million, including an estimated $500,000 in local contributions. The project closed June 30, 1997, one year later than originally estimated, in order to enable the execution of civil works outputs that were substantially higher than expected at appraisal. 5. Preparation and implementation of the project is judged to be satisfactory. Implementation was consistently efficient and effective. Borrower performance was satisfactory: the Project Implementation Unit (PIU) was called upon to introduce fully competitive procurement to construction enterprises that were at the time still largely state-owned, and which functioned in a strongly ingrained culture of vertically organized, centrally administered production. This was done successfully. Accuracy and timeliness in satisfying Bank requirements was consistently good; management and audit reviews are positive; and technical operations ensured cost-effective and technically acceptable construction, although improvements over former Soviet finish quality was generally not achieved. A key attribute of the PIU that contributed importantly to implementation success, was its professional soundness and political/commercial independence, an attribute that was supported by the PIU's parent Ministry. The Bank's performance was also satisfactory, particularly during preparation and early supervision, when circumstances were at best difficult and unpredictable, with a borrower undergoing transition, and usually weak local governance. Project design allowing for flexibility at Mid-Term Review, a realistic proportion of policy development and reform, and effective implementation procedures, personnel selection, and training can be credited. A key attribute of project design contributing to implementation success was the fact that it built upon an existing body of experience and engineering work that was undertaken in the suspended Soviet assistance program. The project used the allocation system and engineering work already developed under the Soviet program and added certain critical elements such as competitive procurement, cost recovery (albeit token), business and housing privatization, condominium formation, and business development assistance for bathhouses and factories. Summary of Findings, Future Operations, and Lessons Learlned Physical Components 6. Civil Works comprise 98 percent of project expenditures. The project largely exceeded its physical targets except in some cases where experimental approaches were reduced at Mid-Term Review because of altered needs (bath house solar heating, single family housing) that could not be foreseen during project preparation. Of the three major civil works components, Housing and Municipal Services each disbursed about double the SAR-projected amounts, with higher (although not proportionally so) unit outputs. Factory Completion disbursed the projected amount, but produced three more units than the projected seven. This increase is partially explained by an increase of 47 percent in additional funds shifted to civil works above the originally allocated amount at the Borrower's urging, and when it became apparent that implementation capacity could sustain higher outputs. Cost estimates were robust, thanks to effective competition among many eager contractors and the designation of USD equivalency for all contracts. See Appendix C-2 for Civil Works Implementatiion Summary by subcomponent and city, comparing outputs projected in the SAR and Mid Term Review with the final outputs.  iv Institutional Components 7. The proposed Technical Assistance budget was reduced during implementation as local capacity proved strong, other donors contributed to institution building needs, and Government pressed for a greater focus on civil works investments. While greater expenditures on TA might have increased project benefits in some areas (additional support to municipalities, building capacity for Condominium Associations, and design of single family housing, for example), it can be argued that the additional civil works investment was at least equally beneficial, and that development objectives have not been compromised as a consequence. 8. The only policy component in this emergency project was the Housing Policy Action Plan, which was submitted by Government at Mid-Term Review in fulfillment of a legal covenant. The Bank team provided comment during the policy development process, which was being executed under a separate USAID program (USAID provided a full-time consultant in the field for three years.). The framework for sound policy formulation is developing well, and the project provided the opportunity to test changes in the existing approach to housing: Condominium associations established under the project are contributing to the local experience with housing privatization and maintenance, although results are inconsistent as of project completion. 9. Support for a longer term sustainable program for rehabilitation in the EQZ was provided through help to the country's national seismic risk management efforts, Regional Economic and Infrastructure Studies, equipment for the national Earthquake Engineering Center, the organization and division of labor of existing national seismic institutions, and application of experimental seismic resistance technologies along with the development of locally appropriate engineering codes. Operations 10. Some weaknesses (weak condominium associations, and municipal housing operations) are showing up in operational aspects of the project, as investments are put into use. Some are due to unforseeable conditions during project design and to lack of coordination between the Bank project and parallel activities of a Diaspora-funded NGO. However, the public bathhouses--which local governments are obliged under the project to put on private concession bases--are likely to operate as intended, though at the time of Credit Closing this could not yet be confirmed. Factory operations were not sufficiently underway at project completion to assess their performance. As previously mentioned, more vigorous use of TA resources during supervision might have mitigated some of these weaknesses. Key Lessons Learned 11. The project can on the whole be seen as having been well-designed for an emergency reconstruction activity, with very limited policy content and good flexibility for adjustment at Mid-Term Review. The independence of the PIU from political and commercial pressures has been of key importance. This is largely due to enlightened borrower attitudes and Bank support. Efforts by the Bank preparation and early supervision teams to prepare and assist in the introduction of the competitive procurement process were clearly very effective, and critical to project success. 12. More difficult to predict during preparation were potential operational difficulties inherent in administering a project with the geographic breadth of the EQRP under embryonic local governance, and without consistent local operations capacity. Operational aspects were perhaps not sufficiently pre- defined in some areas, and were unrealistic in others. The capacity of local authorities to take on  v responsibilities under the project were more limited than expected. Finally, the Borrower's desire to focus intensively on civil works production might have been tempered somewhat more than it was during implementation, with a more critical eye on preparation and support of operational needs. 13. Sustainability in future operations might be better ensured in a reconstruction project if some follow-on technical support could be built into the operations phase for several years after implementation completion. The recommendation would be foir a level of continuing support to operations that are deemed to require a longer term commitment to be sustainable than planned at appraisal. The EQRP would benefit from such an activity. (Condominium Associations would greatly benefit from on-going assistance).  IMPLEMENTATION COMPLETION REPORT ARMENIA EARTHQUAKE RECONSTRUCTION PROJECT (EQRP), CREDIT 2562-AM PART I. PROJECT IMPLEMENTATION ASSESSMENT A. BACKGROUND AND STATEMENT OF PROJECT OBJECTIVES Background 1. Armenia suffered a series of devastating shocks between late 1988 and the early 1990's--the earthquake of December, 1988, the dissolution of the Soviet Union and a trade blockade due to regional political disagreements. The earthquake caused extensive damage to housing, factories, community facilities and infrastructure in about one third of the country. Between 25,000 and 30,000 people died in the earthquake and approximately 530,000 persons were left homeless, a serious blow to a country of less than 4 million people. In addition, 40 percent of the country's manufacturing capacity was destroyed just before the country achieved independence and was faced with the need to adopt market reforms and find new trade partners. 2. Efforts to recover from the earthquake were thwarted by the political and economic upheaval that followed the breakup of the Soviet Union. International rescue efforts begun in December, 1988, and early 1989 were followed rapidly by reconstruction projects led by a committee under the Supreme Soviet of the USSR, which mobilized plant, material and labor from the Soviet Republics in a concerted campaign of rebuilding. Work continued until mid-1991, when the Soviet work crews were withdrawn to their newly independent home countries. This left vast areas of partially completed apartment blocks, factories, and infrastructure projects, and even more damaged, uncleared, and unrehabilitated buildings and infrastructure. 3. The Republic of Armenia joined the Bank in 1992 and requested Bank assistance in re-mounting the reconstruction effort. Although it was five years after the earthquake, a crisis remained. No international or bilateral assistance programs in Armenia were focusing on capital investments in housing or employment, either for earthquake relief or to stimulate a faltering national economy. The Bank judged that IDA involvement was justified to alleviate pressing economic and social problems and to provide a unique opportunity to support implementation of basic economic reforms in housing and infrastructure. It was acknowledged that the volume of reconstruction needed was well beyond the scope of a single operation. However, the project was intended to provide an opportunity for the government to reaffirm its commitment to the reconstruction effort and provide the physical basis and a coherent plan for continuing the process. 4. The Earthquake Reconstruction Credit was prepared and appraised in 1993 and rr ,. .ctive in 1994. A delay of nine months intervened between Negotiations and Effectiveness becaL . f need to resolve political questions arising from regional territorial conflict. The EQRP came thert fore at a time of economic stagnation, political transition, and low morale in the Earthquake Zone (EQZ), as by then, six years had passed since the earthquake. Nonetheless, the project was seen primarily as of an emergency/humanitarian nature and therefore did not include significant policy or reform conditions. Certain concepts were introduced, however, such as the principle of housing cost recovery, which along with the Bank's competitive procurement requirements had significant impact. While the emergency nature of the project appears diminished by the delay between the earthquake and project effectiveness, emergency conditions remained, as government and private sector lacked the means to take mitigating  2 initiatives: intolerable living conditions in temporary shelter areas and lack of basic infrastructure still dominated the enviromnent in the EQZ when the project was appraised. Project Objectives and Expected Benefits and Risks 5. The three objectives of the Earthquake Reconstruction Project (EQRP) were (a) to improve the housing and living conditions of ;residents within the earthquake zone by: (i) assisting in the completion of unfinished apartments; (ii) repairing and strengthening damaged apartment buildings; and (iii) assisting in land development and construction of serviced plots and starter houses for single family ownership and self-help expansion; (b) to reconstruct basic infrastructure supporting employment creation through the completion of: (i) selected water supply and sewerage sub-projects in Spitak, Vanadzor, and Stepanavan; (ii) provisional bathhouses for temporary housing areas; (iii) additional community facilities; and (iv) assisting in the completing of unfinished factory shells for existing profitable industries; (c) to support a longer term sustainable program for rehabilitation in the earthquake zone through technical assistance, training, equipment and studies for: (i) procurement and construction supervision; (ii) steps toward housing reform; (iii) regional development of the Earthquake Zone; and (iv) the Earthquake Engineering Center. Project Components 6. The project comprised four components: Housing (i) Completion of unfinished apartments; (ii) Repair and strengthening of damaged buildings; and (iii) Land development and construction of serviced plots and starter houses for single family ownership and self-help expansion. Municipal Services (i) Provision of bathhouses for temporary housing areas, some to incorporate solar heating; (ii) Completion of selected water supply and sewerage sub-projects in Spitak, Vanadzor, and Stepanavan; and (iii) Community facilities. Unfinished Factory Shells (i) Completion of factory shells for existing profitable industries. Technical Assistance, Training, Equipment and Studies for: (i) Procurement and construction supervision; (ii) Housing reform; (iii) Regional development of the Earthquake Zone; and (iv) The Earthquake Engineering Center.  3 B. ACHIEVEMENT OF PROJECT OBJECTIVES 7. Project Implementation and Development Objectives Ratings have generally been noted in supervision reports as satisfactory to highly satisfactory. The ICR mission confirmed these ratings, but noted that some operational deficiencies are developing and recommended that these be addressed quickly (see below). 8. The following can be evaluated for this project: limited sector policy and financial objectives, institutional development, and physical objectives. No impact on macroeconomics policies was expected. Economic Rates of Return could not be calculated for the housing, municipal and TA components, but was estimated at an average of 50 percent for factory shell completion; this is as yet too early to verify. 9. For most components, project activities have met or exceeded SAR expectations for production. Disbursement targets were exceeded, except for technical assistance, which were by mutual agreement reduced during implementation in favor of civil works, as local capacity proved to be strong and other funding sources were used. Because of SDR appreciation against the USD, available funds were 6 percent ($1.75 million) more than estimated at appraisal, and virtually all was disbursed ($29.75 million). While greater expenditures on TA might have increased project benefits in some areas, it can be argued that the additional civil works investment was at least equally beneficial, and that development objectives have, in general, not been compromised as a consequence. Transparent, competitive bidding has been introduced and consolidated in the construction industry thanks to the large volume of civil works funded by the project-- in a large number of separately executed contracts with local construction firms. The increase in outputs is also due to good PIU procurement performance in mobilizing project savings and contractor penalties. Sector Policy Impact-- Objectives achieved: design of the project was appropriate for achieving the limited objectives. Criteria for judging the achievement of objectives were not quantified in the SAR. 10. As an emergency project, policy objectives were limited and impact is difficult to measure in the housing sector. The project attempted to introduce the concept of cost recovery for housing and housing services, a start on housing privatization and operation through condominium associations, and supported the drafting of a market-based enabling policy for the sector. The impact of these initiatives is not possible to measure at this time. The impact on the construction industry, however, is more discernible: virtually all construction enterprises operating in the EQZ, and others as well, embraced privatization and competitive procurement procedures, and executed about 140 construction contracts under this framework. The Bank's procurement procedures, as set up for the project, became by Government decree the standard for all procurement of foreign donor investment in Armenia. The depth of this experience promises future sustainability, growth and international competitiveness for Armenian firms. Financial Objectives-- Achievement of objectives notyet measurable; design of the project was appropriatefor achieving the objectives. Criteriaforjudging the achievement of objectives were not quantified in the SAR. 11. Cost recovery was introduced for housing and Factory Shell completion. The formula for apartment housing is token in magnitude (25 percent of monthly minimum wage, or about USD 0.50, in 1997) because of prevailing poverty and Government earthquake victim policy. The intention was to introduce the concept, rather than to produce significant cost recovery sums. Collection experience is inconsistent as local authorities were called upon to establish their own collection systems. Single Family housing should in principle produce 25 percent of incremental costs, but the completion of the single family units came too late in the project for collection experience to begin in any significant degree, and therefore cannot be evaluated for this report. The Factories component calls for full cost  4 recovery, but the agreed three-year grace period for repaymrent delays collection until well after Credit Closure, and therefore cannot be evaluated. Institutional Development Objectives--Objectives achieved: design of the project appropriate for achieving the objectives. Criteriafor judging the achievement of objectives were not quantified in the SARP 12. Technical assistance was reduced considerably during implementation at the request of Government and approval of the Bank. Local capacity proved to be strong and other funding sources were used. Most reallocated TA funds were used for civil works, as desired by the Borrower. Local consultants contributed and gained valuable experience using local talent and involving students. 13. TechnicalAssistance and Equipment has supported a range of studies and initiatives. Many were generated by the borrower, from short educational videos describing project and procurement procedures to regional economic and infrastructure studies. In many cases, local resources have been used, notably the Center for Business Research and Development (CBRD) of the American University of Armenia (AUA). The regional studies were financed by the PHRD grant; a study of national seismic risk management institutions was provided by the French government. Other TA activities include assistance in developing and institutionalizing innovative seismic strengthening techniques, advisory services to municipalities on operating public services through private concessions, and the factory business management advisory services mentioned above. Training and advisory services for the formation and operation of condominium associations was also provided, and in retrospect, closer supervision and additional support in this area would have been beneficial. Perhaps the greatest impact of the project's technical assistance was on project implementation, including support for procurement and financial operations. 14. The Housing Policy Action Plan submitted by Government at Mid-Term Review in fulfillment of a legal covenant supported a policy development process. This was assisted by USAID under a separate project and led to reform-minded legislation. The Bank team provided comment during this process and contributed to the shaping of this legislation and policy development. Condominium associations established under the project are contributing to the local institutional experience with the privatization of housing ownership and maintenance. 15. The Regional Economic and Infrastructure Studies (RES and RIS) were undertaken in order to guide the development of long-term infrastructure needs for the EIQZ. These studies a) assessed the comparative advantage of the EQZ with regard to economic activities and b) recommended infrastructure repair and development needed to enable such activities to take pilace. 16. The Seismic Risk Management Study recommended rationalizing Armenia's current Seismic institutional framework to clarify the division of labor between tvo active government entities with overlapping responsibilities in the area of seismic risk management. 17. Assistance in drafting an engineering and application coie for laminated rubber bearings in seismic base- and top-isolation systems was provided by the project, as was assistance to the Nairit industrial enterprise in making possible the manufacture of the bearings in Armenia. Top isolation and base isolation pilots were undertaken to establish methods and materials appropriate for low technology environments. The project funded a pilot project that retrofitted an occupied apartment building with the base-isolation system without requiring temporary resettlement of the tenants, something that had heretofore not been accomplished anywhere in the world.  5 Physical Objectives-- Objectives substantially achieved; design of the project appropriate for achieving the objectives. Criteria forjudging the achievement of objectives were quantified in the SAR 18. Civil Works comprise 98 percent of project expenditures. Of the three major civil works components, Housing and Municipal Services activities each disbursed about double the SAR-projected amounts, with higher outputs. In housing, the increase in output was not proportional to the increase in resources, because the greater number of housing units rehabilitated or finished meant that the levels of completion at start of work became substantially lower in remaining candidate buildings. Factory Completion disbursed the projected amount, while producing ten units as against the projected seven; community facilities rehabilitation was increased, but bathhouses were reduced. The project largely exceeded its physical targets except in some cases where experimental approaches were reduced at mid- term-review because of altered needs and other matters that could not be foreseen during project preparation. See Appendix C-2 for Implementation Summary by subcomponent and city, comparing outputs projected in the SAR and Mid Term Review with the outputs as of ICR mission. 19. The large increase in civil works outputs is partially explained by the fact that over 100 percent additional funds were allocated to civil works above the originally allocated amount, when it became apparent that implementation capacity could sustain higher outputs. The additional funds came from several sources within the original credit envelope: $4.96 million categorized as unallocated in the Credit Agreement, $1.4 million (of $2.3 million) reallocated from Technical Assistance categories at the request of Government, $1.75 million due to a favorable trend in the SDRIUSD exchange rate (local disbursements were denominated in USD), and additional contract work valued at about $600,000 accruing from contractor penalties. Cost estimates were robust, thanks to effective competition among many eager contractors and the designation of USD equivalency for all contracts. Housing Subcomponent 20. Housing is the largest civil works subcomponent, accounting for about 55 percent of the civil works disbursements. 2,857 housing units were completed, rehabilitated, or strengthened, compared to the appraisal target of 2069 units. There were three activities under this subcomponent. Completion -- funded the completion of residential structures started immediately after the 1988 Earthquake, suspended upon the break-up of the Soviet Union, and is the centerpiece of the housing subcomponent. Unit costs rose during implementation as the degree of completion of candidate buildings fell; thus while an average of over $4,150 per unit was projected in the SAR, the end of project average was $5,600, with typical unit costs capped at $8,500 for project selection purposes. The Strengthening subcomponent funded the strengthening of structures damaged and weakened by the EQ that could be made habitable through retrofitted structural reinforcing or seismic isolation systems. This subcomponent has established new technologies for the strengthening of existing structures, notably new techniques for installing seismic isolation systems in new and existing occupied buildings. The project is the world- wide pioneer for several techniques, and two project pilot structures have attracted international professional attention by establishing appropriate low technology methods for the strengthening of existing structures. Single Family Housing, the third housing activity, introduced a limited experimental program of houses on single plots, in various stages of construction from foundations and incomplete core units intended for self-help completion, to complete two-story units built for subsidized sale. Because of contractor delays, these were completed near the end of the project, at which time allocation by municipal authorities of the new units was incomplete and occupancy was therefore low. A preliminary assessment of local officials is that absence of credit will make it difficult for EQZ citizens to build out the empty foundations of the core units on their own and will remain unpopular for the near future. The Operational Plan outlined by Government (see Appendix B) mentions this issue, but does  6 not address it in sufficient detail nor does it suggest a procedure for these assets to be used in a manner that sustains project objectives. 21. Experimental buildings: The project did not originally plan to support new housing construction since the cost per unit exceeded that of completion and strengthening by a large factor. However, rising demand, incomes and market value, and an interest on the part of local authorities in restoring downtown city centers led to consideration of new buildings on a pilot basis. To this end, the project constructed two apartment buildings to pilot a) increased financial participaition of beneficiaries (Gumri), and b) appropriate seismic isolation technology in new construction (Spitak). The buildings are located in downtown areas where many households are perceived to be willing to pay substantially more than required under the project's cost recovery formula for completed and strengthened buildings. In the first structure, beneficiaries agreed to contribute over 50 percent of the construction cost. After construction began, however, some of the participants in this scheme proved unable or unwilling to make the agreed contributions (after having deposited an agreed amount in escrow to enable the start of construction.) In order to complete the building on time and make it habitable using only the agreed limited project funds, the building was completed at two stories. The city can add additional floors when the climate is better for increased beneficiary financial participation. This experiment might have succeeded with better planning--including selection of participants--and timely TA inputs. The second experimental building was plagued by delays beyond the control of the contractor: delayed shipment of laminated rubber base isolation bearings, and severe late winter weather. Construction was completed very close to the Credit Closing date and the status of beneficiary participation could not be assessed for this report. 22. Housing Component Policy Issues. The housing completion component followed simple criteria for the selection of buildings to be completed: maximum degree of work in place and designation by local authorities. The aim was to maximize the number of habitable units provided given the limited fiunds available while putting to use the enormous sunk costs represented by nearly finished structures, and to meet perceived local demand (local officials were elected were felt to be responsive to citizens' needs). This approach is defensible in an emergency project but would not be acceptable in a housing investment initiative under normal circumstances, where the economics of spatial organization would govern. Many of the project's completed buildings, (and virtually all of those in the strengthening component) are located in or adjacent to established downtown areas (Spitak, which was virtually flattened, lacks a traditional core). However, many of the project completion investments are in new peri-urban developments, which are not located according to criteria that would be used in a market system. To be sure, new centers are developing in these areas, but housing there has lower market values than that located closer to the traditional centers. Related to the question of location is the fact that housing beneficiaries have often been slow to occupy new apartmients. Most EQZ emergency (temporary) housing areas were located in downtown parks. However, as noted elsewhere in this report, there are more likely disincentives for slow occupancy. Disincentives to move quickly include on-going NGO programs that provide free fuel and food to families still in "domiks", coordinating timing with the school year, husbands working overseas, the obligation of the new owner to finish the interiors of the project apartments (through self-help), and established subsistence gardens in domik areas. Some are thought to cling to downtown domiks in the hope of extracting a payment for leaving. While not a criterion in the EQRP, market value is the primary criterion in the housing component of the proposed Municipal Development project, that will aim to shift housing interventions away from emergency- assistance to focus on sector reform. 23. See Table 1 below for comparison of SAR, Mid Term Review (MTR), and final projected housing outputs. The increase in outputs in both the completion and strengthening activities is due to efficient PIU procurement performance and was made possible by shifting project resources from the  7 Unallocated and Technical Assistance categories, and the mobilizing of project savings and contractor penalties to this end. TABLE 1: SUMMARY COMPARISON OF SAR, MTR AND FINAL HousING COMPONENT OUTPUTS. HOUSING INCREASE TOTAL $ INCREASE UNITS OVER SAR (MILL)* OVER SAR (UNrrS) (COST) SAR 2069 0% 8.58 0% MTR 2375 15% 11.71 36% Actual 2857 38% 16.01 86% Municipal Services Subcomponent 24. The Municipal Services Component comprises Bathhouses, Infrastructure, and Community Facilities. $6.5 million was spent on Municipal Services, which is twice the amount projected, and includes water piping to main cities and deprived communities. Schools, clinics and other structures-- new, strengthened or completed--are among the community facilities provided. 25. Bathhouses: The emphasis on the Bathhouse activity was shifted during implementation from "mobile" units to the rehabilitation of downtown central facilities that existed before the earthquake and were out of operation because of damage. As a result, bathhouse production was decreased in number from 54 to 1 1, of which 2 were restorations of old downtown facilities. These restorations have proven to be very popular. The mobile bathhouses are in fact not strictly "mobile" in the sense that they can be quickly towed or shifted as immediate needs change. They are steel structures that are demountable and can be moved and adapted to other uses when needs change over the longer term. This was not what was originally envisioned (at Appraisal), when it was felt that a quickly changing emergency environment would call for easy flexibility. In fact, the residential patterns--albeit "temporary" had already stabilized to the extent that such flexibility was not seen as critical. In addition to being demountable steel structures, they are technically advanced as they use base-isolation for seismic resistance, permitting heavy water tanks to be mounted in their attics. Of the 54 bathhouses originally envisioned at Appraisal, six were to experiment with solar heating. However, during implementation, it was found that this was not feasible at the time, and not pursued. Operation of project-financed public bath houses on the basis of private concessions with full cost recovery, as foreseen in the SAR and agreed during negotiations-- was embryonic as of Closing. Municipalities needed guidance in defining appropriate concession arrangements that would ensure their financial protection and the sustainable operation of the bathhouses. Technical assistance was provided to the municipalities for this purpose towards the end of project implementation by the CBRD. 26. Infrastructure and Community Facilities: These investments were largely selected during supervision by local authorities and represent felt needs, thus providing a fairly broad range of investments. After mid-term-review, it was agreed that communities could propose priority projects costing up to an agreed limit. All investments are operating successfully and appear to have had an impact on community health and morale. More than 40 km of water piping was either newly installed or repaired, connections to completed housing was installed, one library, community cultural center (historic building), and stadium seating were put back into service; two hospitals, a municipal building and telephone exchange were rehabilitated, and five schools, one kindergarten, and school sports hall were restored or completed.  8 Factory Shells Subcomponent 27. Of the ten factories assisted under this subcomponent, one (Spitak Clothing) was as of the ICR Mission, employing abut 600 workers--with a total of about 1200 expected to be employed the following year--and a few others were about to start production in the new facilities completed under the project. Cost recovery will begin after a three year grace period. TA has been provided by AUA Center for Business Research and Development (CBRD) to Gumri Electrocondensor to draft a Business Plan and help to rationalize production and marketing. The CBRD reviewed several of the enterprises and concluded that the Electrocondensor plant was likely to adapt first to the new market demands. The Factory Shells activity was successful in terms of implementation, despite numerous "teething problems" encountered by contractors. Success will ultimately depend on many factors beyond the control of the enterprise managers, along with the managers' ability to adapt to new challenges. Government's interest in factory rehabilitation led to influence over the selection process in one particular case, over the more negative recommendations of independent consultants. Success in the operational phase will probably require additional business management assistance. This could be provided at relatively low cost through local consultants such as CBRD. Problematic Activities 28. Of the civil works activities, three might be judged in relrospect to have been somewhat premature or less suitable. The Factory Shells completion and single Family Housing were both well- intentioned and both will in the long run have a degree of impact. In the future, none of the investments in these activities is lost, on the contrary, they did in fact bring about the creation of useful assets. 29. Factory shells: The selection of suitable factory enterpr:ises for reconstruction could not be very robust when the entities would be obliged to shift radically their way of operating to survive under market conditions. Only two factories appeared at Credit Closing to be likely to survive without some continuing state assistance in the near future, and even they are not fully viable. However, this is arguably the case for most industrial enterprises in Armenia. All factories are required to repay Government in full the sums invested in their structures, including interest, after a grace period. If they are unable to do so, the subloans will in effect amount to a subsidy of nearly $7 million to these enterprises in the EQZ. A problem is the difficulty of finding new markets. The lifting of the present blockade is expected to improve the business environment. In the longer term, the repaired factories are likely to serve in some capacity, but external factors will have to improve. Long term monitoring of this activity would be of interest to the Bank. 30. Single Family Housing: The project designers made a wcrthy and useful attempt to introduce a degree of self-reliance and typology diversity in the single family housing pilot scheme. Although construction was completed, good results cannot yet be reported with regard to social and economic factors. External implementation problems conspired to delay completion of this component, and the activity could not be substantially altered at Mid-Term Review because problems were not yet identifiable. Construction delays resulted from contractor difficulties early in implementation, delaying the completion of the units until very close to Credit Closing. Thus, supervision and monitoring--and possible correction--of allocation and recovery issues could not be addressed. Public education and a marketing plan could have ensured a more effective allocation of the units. The core units--requiring self-help completion-- have attracted little interest. This could change in future, if a marketing plan is developed and financial assistance in the form of affordable credit is provided. The notion of self-help on the part of citizens in the EQZ was not well-developed during project implementation--a legacy of past housing policies, and still promoted by government promises' to earthquake victims.  9 31. Mobile bath houses: The mobile bath house activity was determined at appraisal to fill a clear need for families deprived by lack of water and sanitary infrastructure. The tradition of public baths was felt to allow for neighborhood units that could be shifted to meet the changing needs of temporary settlements. The idea of such units--some with solar heating--was progressive and might have succeeded a) if conceptual design and design development had been more closely supervised and resulted in appropriate industrial designs, and b) if they had been put in place quickly, before local authorities shifted attention to existing central bath houses that had important civic and cultural value, and were already accepted by the citizens. Instead, the local technical capacity--in both design and construction-- was not sufficiently monitored and supervised to produce appropriately designed mobile units quickly. The delays caused this component to be reduced in scope as attention turned to rehabilitating permanent structures. Ultimately, it can be argued that the latter approach was more appropriate. However, if neighborhood units were proven to be in demand, it might have been cost effective and timely to build compact conventional low-cost masonry structures that are removable when no longer needed, in lieu of pursuing the development of "innovative" industrialized designs. C. MAJOR FACTORS AFFECTING PROJECT IMPLEMENTATION 32. The project was the first Bank effort to finance physical work in Armenia and there were entrenched obstacles in place after years of neglect. This was, however, tempered by Armenia's readiness to get something done, construction firms eager to work, and the people's resilience. Other positive factors included high technical ability and integrity of Central Government and PIU staff and flexibility of most construction firms faced with having to learn a new, apparently less secure system. Equally important was Government's support of an environment devoid of political and commercial pressures, and an effective working relationship between PIU and the Ministry of Economy. The PIU's professional and commercial independence was one of the major factors underlying successful implementation of the project. 33. Delays: Project implementation was delayed nine months due to external political factors. Two extensions of the Closing Date totaling 12 months were required by the increased civil works program made possible by the allocation of additional funds to physical components. 34. During four years of project implementation, Bank divisional responsibility changed once and Bank Task Managers changed four times. The GOA responsible Minster changed three times. In spite of these transitions, implementation was carried out successfully. Effective, communications were maintained at all times between the Bank and Government, as the PIU management remained unchanged until just after closing. The Bank's management handovers were effective, and Government's transitions were assisted by stable PIU management. D. PROJECT SUSTAINABILITY 35. The project substantially achieved its intended implementation objectives. The potential for sustainability is favorable. However, several individual activities supported by the project will require effective operational planning to function on a sustainable basis. Some weaknesses are appearing in operational aspects of the project, as investments are put into use. These include operation of housing units after construction (slow occupancy, unclear management responsibilities, allocation conflicts, uneven cost recovery experience) and inadequate public information about the project. Slow occupancy was due to existing disincentives to move, such as NGO programs that provide free fuel and food to domik-dwellings, the need for beneficiaries to complete interior finishing of apartments, head of households working in Russia, as well as seasonal factors such as school year and vegetable gardens. Uneven cost recovery experience is due to the lack of a unified approach among cities, including monitoring. Some weaknesses are due to design, e.g. the expectation that local authorities will be able to  10 follow through with agreed or recommended operational procedures and that TA could remedy weaknesses in this area. Others are due to inadequate follow-up with TA inputs (e.g. condominium organization) and coordinating difficulties between the Bank project and parallel activities of the All- Armenia Fund, the second primary donor in the housing field (although with a contributidn significantly less than the Bank). 36. Operation of project-financed public bath houses on the basis of private concessions with full cost recovery is not yet fully realized because municipalities needed guidance to define appropriate concession arrangements that would ensure their financial protection. Technical assistance was provided to municipalities near the end of the project and it is too early to judge if they will operate as foreseen in the long term. The concession operations will probably require continuing advisory help to ensure that municipalities are wholly removed from subsidy responsibilities. Such help is readily--and inexpensively-- available locally. 37. Within the housing component, sustainability will require continuing support and monitoring of condominium associations, cost recovery and marketing and extension of core-houses. Follow-up programs are needed here. National seismic entities will need to monitor the seismometric stations installed in seismically isolated buildings and buildings with vibration dampers to study their performance in strong earthquakes. These activities should not require external financial assistance. 38. The factory enterprises rehabilitated or completed under the project will require continuing management guidance if they are to repay the subloans that funded their civil works. This should be part of a wider-ranging industrial development plan for the EQZ, as recommended in the project-funded Regional Economic and Infrastructure Studies. E. BANK PERFORMANCE 39. The Bank's performance was satisfactory, particularly during identification, preparation and early supervision, when political and economic circumstances were problematic and unpredictable, with a borrower undergoing transition and a demoralized population. 40. Identification was timely and appropriate. Preparation and Appraisal was undertaken under very difficult conditions due to considerable time pressure and a severe winter, but managed to produce effective results. Teams were appropriately constituted given the technical, institutional, and social demands. The team's focus on establishing an effective PIU and providing training for the new procurement methods provided an essential foundation for project implementation. PHRD grant funds were effectively targeted. Coordination with other donors, mainly USAID and the US Peace Corps, to effect implementation and synergy with existing programs was effective. One aspect that might have been better judged is local (municipal) governance, ownership, and operations capacity, but this might not have been possible under the circumstances prevailing at the time. 41. Supervision is overall judged to be satisfactory. Changes in Bank management due to change of division and four consecutive Task Managers were handled smoolhly. Mid-Term Review revisions were responsive and appropriate. Major shifts in budget allocations to increase civil works investrnents placed a burden on Bank supervision staff. This was well-managed, but possibly at the expense of attention to Technical Assistance components. The smooth transition to local competitive procurement was made possible by consistent and knowledgeable support provided to the PIU on a regular basis. While time- consuming, this support was necessary and effective in establishing a solid knowledge base in the PIU and among contractors. In retrospect, it can be argued that the supervision team could have placed more emphasis on technical assistance activities needed to solidify the sustainability of project development  11 gains, especially more timely attention to helping the borrower develop a more rigorous and detailed operational plan. F. BORROWER PERFORMANCE 42. Borrower performance was satisfactory. The Project Implementation Unit (PIU) was called upon to introduce fully competitive procurement to firms that were still largely state-owned, and which functioned under the former Soviet business culture, and did so with success. Accuracy and timeliness in satisfying Bank requirements was consistently excellent. Management and audit reviews are positive; and technical operations ensured cost-effective and technically acceptable construction. A key attribute of the PIU, that contributed importantly to implementation success, was its professional soundness and political/commercial independence. This was supported by the PIU's parent Ministry. Another important attribute was the PIU's cooperation in keeping lines of communication open and encouraging regular dialogue between the Bank's supervision team and all levels of the PIU staff. Accuracy and timeliness in satisfying Bank requirements was consistent despite the lack of previous lending experience. Audits were never late, and implementation agreements were virtually always delivered as agreed. G. ASSESSMENT OF PROJECr OUTCOME 43. The project achieved its major objectives and project outcome is judged to be satisfactory. The long-term impact of the Factory Shells component cannot yet be evaluated. The project helped to refocus government and international attention on EQZ rehabilitation and introduced first steps to redirect housing policies, and restructure the construction industry. Employment was generated as 97 percent of the Credit was spent locally. An Economic Rate of Return cannot be calculated for most components of this project. H. FUTURE OPERATIONS 44. The borrower has drafted an Operational Plan (attachment to Borrower's Contribution, Appendix B). The Plan is a comprehensive outline of the areas requiring attention, and needs to be further developed by the different agencies responsible for the various areas. The Plan represents a blueprint that requires elaboration. I. KEY LESSONS LEARNED 45. Lessons might be drawn for this project in the areas outlined below. Some are obvious but are repeated here because project experience supports them with certainty. Design: * PIU independence is essential, as is the rigorous selection of its staff, particularly in positions of leadership; * Local governance, ownership, and operations capacity should be carefully assessed and if found wanting, mitigating design is required; * Coordination of donor activities can be difficult, particularly with independent NGO's with strong international support, but is essential and requires attention to forestall conflict during implementation; * Potential operational pitfalls deserve realistic attention during design and appraisal; * Project design allowing for flexibility at Mid-Term Review.  12 Implementation: * Operational aspects deserve more attention during Supervision (Operational Plan should have been started earlier, under stricter supervision from the Bank) * Close technical communications between the Bank: and borrower pay big dividends: both sides are able to adapt comfortably and effectively to a changing project environment. Operations: * Future, post-implementation monitoring and technical assistance needs to be provided for; a way to follow up activities after project closing that would assist in sustainability, without being tied to appraisal and funding of another project. Possible role for an Adaptable Lending activity. 46. The project was a first quick response to an emergency situation that did not allow yet to address major sectoral adjustment issues. The focus was hence on increasing the supply of housing and rebuilding infrastructure in an area that had been devastated several years earlier. The emphasis was therefore on achieving physical target. The independence of the PIU from political and commercial pressures was of key importance, and was made possible by enlightened borrower attitudes and Bank support. Efforts by the Bank preparation and early supervision teams to prepare and assist the competitive procurement process were clearly very effective an(d critical to success of the project. 47. The project was building upon an existing body of experience and work that had been started in the suspended Soviet assistance program. The Bank's project used the allocation system and engineering work already developed under the Soviet program and added certain critical elements such as competitive procurement, cost recovery (albeit token), business/housing privatization, condominium formation, and business development assistance for bathhouses tnd factories. While the housing allocation system was not market-based, it was an accepted response in an emergency environment. 48. More difficult to predict during preparation were potential operational obstacles inherent in administering a project with the geographic breadth of the EQRP under embryonic local governance, and without consistent local operations capacity. Operational aspects were perhaps not sufficiently pre- defined in some areas, and unrealistic in others, but considering that some new socio-economic concepts and operational procedures were just being introduced, the record is good. Finally, the Borrower's desire to focus intensively on civil works production might have been more tempered by Bank supervision teams during implementation, with a more critical eye on operational aspects requiring better preparation and support. A well-running civil works program has a tendency to justify itself and attract increased emphasis. In this case, the borrower's strong desire to concentrate on construction appears to have distracted attention from institution-building through technical assistance. The positive effect of such an emphasis is difficult to measure, but would include increased employment in the construction industry, noticeable improvement in construction industry capacity, and improved living conditions and municipal services. The negative effect of the heavy civil works focus began to appear at the end of project implementation - in the form of weaker operational quality in sorne areas than might have been expected, with uncertain effect on the sustainability of some components. Nevertheless, the project's development objectives are not likely to have been compromised. While an earthquake reconstruction project is primarily about re-building a devastated environment, later Bank supervision might have been more rigorous in promoting technical assistance in the face of borrower wishes to de-emphasize it in favor of building. 49. Sustainability in future operations could be better ensured in a reconstruction project if a degree of follow-on activity could be built into the operations phase for several years after implementation  13 completion. The EQRP would benefit from such an activity, which might be financed through trust funds and managed by the Resident Mission with Country Department and Sector support.  14 PART II. STATITICAL TABLES Table 1: Summary of Assessment Table 2: Related Bank Loans/Credits Table 3: Project Timetable Table 4: Credit Disbursements: Original, Revised and Actual Table 5: Key Indicators for Project Implementation Table 6: Key Indicators for Project Operation Table 7: Studies Included in Project Table 8A: Project Costs Table 8B: Project Financing Table 9: Economic Costs and Benefits Table 10: Status of Legal Covenants Table 11: Compliance with Operational Manual Statements Table 12: Bank Resources: Staff Inputs Table 13: Bank Resources: Supervision Missions Table 1: Summary of Assessments A. AchievementgfObiectives Substantial Partial Negligiblk Notapplicable Macro Policies O O O E3 Sector Policies O O 0 E3 Financial Objectives 0 0 [E o Institutional Development O E3 0 O Physical Objectives El O 0 0 Poverty Reduction 0 0 0 El Gender Issues O O 0 03 Other Social Objectives 0 O O 0M Environmental Objectives O O O 0 Public Sector Management O [03 0 0 Private Sector Development E 03 0 0 Other (specify) E E E a B. PrQject Sustainabilitv likelv Unlikely Uncertain El) El) 0/)  15 HWI C. Bank Perfornance satis SatisfaQty Defichrt (1) (1) (V) Identification 0 E3 0 Preparation Assistance 0 0 0 Appraisal 0 03 0 Supervision 0 E 0 D. Boffower Performance satisfactoZ Satisfactorv Deficien (/) (/) (v') Preparation 0 E3 0 Implementation El 0 0 Covenant Compliance 0 El 0 Operation (if applicable) 0 El 0 Highly Highl E. Assessment of Outcome satisfa t Sry Satisfactorv UnsatisfadtQry unsatisfactory (if) (if) (if) (0) 0 0 0 0  16 TABLE 2: RELATED BANK LOANS/CREDITS Loan/credit title Purpose Year cf approval Status Preceding operations None Following operations 1. Power Maintenance Strengthen electricity 1994 Closing July 31, 1998 (Credit No. 26660) load management and reverse deterioration of three thermal generation units/three hydro power generation plants 2. Irrigation Maintain level of 1994 Closing June 30, 1999 Rehabilitation irrigated agricultural (Credi No. 6670) production and improve (Credit No. 26670) the country's water resource management. 3. Highway Develop an institutional 1995 Closing Dec. 31, 1999 (Credit No. 27760) framework adapted to (Credi No. 7760) the requirements of the road sector of a market economy. 4. Social Investment Support most 1995 Closing June 30, 2000 Fund vulnerable groups (Credit No. 27840) through improvement (Credit N. 27840) of basic social services and creation of employment opportunities. 5. Municipal Provide resources for TBED TBD Development rehabilitation of priority (Credit No. Q0500) water supply networks and support for policy formulation in the water supply and housing sectors.  17 TABLE 3: PROJECT TIMETABLE Steps in Project Cycle Date Planned Date Actual/ Latest Estimate Identification (Executive Project Summary) December 1992 Preparation Appraisal April 1993 Negotiations July 1993 Letter of Development Policy (if applicable) N/A Board Presentation February 1994 Signing February 1994 Effectiveness April 1994 Midterm review (if applicable) --- Project Completion June30, 1997 Credit Closing June 30, 1997 TABLE 4: CREDIT DISBURSEMENTS: ORIGINAL, REVISED AND ACTUAL (US$ MILLION) FY Original Revised Actual 1994 5.10 2.11 2.11 1995 8.27 6.20 6.20 1996 6.75 8.13 8.11 1997 0.00 3.68 3.66 TABLE 5: KEY INDICATORS FOR PROJECT IMPLEMENTATION Estimated Actual (as of April '97) L Key implementation indicators in SAR 1. Civil Works => Housing > Provision of 2069 units => 2857 units provided. => Bathhouses => Provision of up to 54 units => 2857 units provided. => Factories => Repair of 7 units => 10 factories repaired => Infrastructure => Approx. 27 km water piping => 41 km water piping provided = Community Facilities => Undefined quantity valued at = Numerous structures built or $600,000 repaired, valued at $2.9 million 2. Institutional Development Housing Policy Action Plan Completed  18 TABLE 6: KEY INDICATORS FOR PROJECT OPERATION NOTAVAILABLE TABLE 7: STUDIES INCLUDED IN PROJECT Study Purpose as defined at Status Impact of study appraisal/redefined 1. Regional Economic Study Assess the comparative advantage cif Done the EQZ regarding economic activities and recommend infrastructure repair and development needs. 2. Regional Infrastructure Identify to what extent existing 9/95 Shaped long range Study infrastructure deficiencies negatively investment planning for the affect economic development in EQZ. EQZ. 3. EQ Risk Management Recommend rationalizing current 10/95 Strategy Seismic institutional framework to clarify the division of labor between two active government entities with overlapping responsibilities. 4. Armenia Housing Sector Presents sector issues to highlight 10/97 Provides overview of and EQZ Housing Issues main reconstruction issue, review housing sector and will be settlement pattern and examine used as background material household expectations and options. for housing component for Municipal Development Project.  19 TABLE 8A: PROJECT COSTS Appraisal estimate Actual/latest estimates (US$ million) (US$ million) Item Local Foreign Total Local Foreign Total costs costs costs costs 1. Land sites and infrastructures 1.7 - 1.7 2.2 2.2 2. Construction: Sunk Costs Housing 5.9 - 5.9 15.5 15.5 Factory Shells 9.7 - 9.7 6.8 6.8 3. Construction: Incremental Costs 5.7 13.2 18.9 4.8 4.8 4. Technical Assistance 0.2 2.1 2.3 0.4 0.7 5. Design, supervision, 0.1 0.5 0.6 0.5 0.05 administration Sub-total: Base Costs 23.3 15.8 39.1 30.2 0.7 29.35 7. Physical contingencies2 1.0 2.2 3.2 8. Price contingencies (15%) 1.0 2.7 3.7 Sub-total contingencies 2.0 4.9 6.9 Total 25.3 20.7 46.0 30.2 0.7 29.35 TABLE 8B: PROJECT FINANCING Appraisal estimate Actual/latest estimates (US$ million) (US$ million) Item Local Foreign Total Local Foreign Total costs costs costs costs 1. State Authorities (land, 17.3 - 17.3 NOT AVAILABLE infrastructure, sunk costs) 2. (5% of incremental local costs) 0.3 - 0.3 3. IDA (incremental costs) 7.7 20.3 28.0 4. Donor assistance - 0.4 0.4 Sub-total (excluding sunk costs) 8.7 20.7 28.7 Total 25.3 20.7 46.0 2 Physical contingencies are 10% on technical assistance and 15% on all other activities.  20 Table 9: ECONOMIC COSTS ANMD BENEFITS - No ERR was calculated during Appraisal (check SAR) - Revenue generating scheme: Bathhouses and Factories: too early to be measurable  21 Table 10: STATUS OF LEGAL COVENANTS Annenia Earthquake Reconstruction Project (EQRP) Agreement Section Covenant Type Present Original Revised Description of Covenant Comments Fulfillment Fulfillment Status Date Date Article IV 4.01 Financial C quarterly --- Maintain records and accounts with sound accounting practices for operations, resources and expenditures. Article IV 4.01 Financial C annually --- Furnish independent audit of accounting Schedule 4 1 Management C on-going --- Maintain PIU Schedule 4 2 Management C on-going --- Execute Mid-Term Review agreements. Schedule 4 3 Sectoral C 06/15/94 --- Submit Housing Policy Action Plan Schedule 4 4 Financial C on-going --- Cost recovery from housing and factories as agreed. Schedule 4 5 Implementation C on-going --- Allocation of housing units as agreed Schedule 4 6 Financial C 06/30/95 --- Submit plan for bathhouse operations Schedule 4 7 Implementation C 06/30/95 ---. Provide priority access to electricity, for factories Covenant types: Present Status: 1. = Accounts/audits 8. = Indigenous people C = covenant complied with 2. = Financial performance/revenue generation from 9. = Monitoring, review, and reporting CD = complied with after beneficiaries 10. = Project implementation not covered delay 3. = Flow and utilization of project funds by categories 1-9 CP = complied with partially 4. = Counterpart funding 11. = Sectoral or cross-sectoral budgetary NC = not complied with 5. = Management aspects of the project or executing or other resource allocation agency 12. = Sectoral or cross-sectoral policy/ 6. = Environmental covenants regulatory/institutional action 7. = Involuntary resettlement 13. = Other  22 Table 11: COMPLIANCE WITH OPERATIONAL MANUAL STATEMENTS There was no significant lack of compliance with applicable Operational Directives or Operational Procedures.  23 TABLE 12: BANK RESOURCES: STAFF INPUTS Total in US$ 000 Staff Week Salary Total LENP -- PRE-APPRAISAL 68.2 141.2 209.4 LENA APPRAISAL 21.5 57.4 78.9 LENN NEGOTIATIONS 18.1 41.9 60.0 SUBTOTALS 107.8 240.5 348.3 ...................................................................................................................................................................................................................... SUPERVISION 77.4 217.8 295.2 ----------------------------------------------------- TOTAL PROJECTED COSTS 185.2 458.3 643.5 Table 13: BANK RESOURCES: SUPERVISION MISSIONS Performance Rating Types of Stage of Project Month/ No. of Days in Specialization' Implem. Develop. pebls f3 Cycle Year Persons Field status objectives Preparation Feb. 1993 8 12 FA, UP, UP, FA, UP, PMS, EN, EN Supervision 1 June 1994 15 6 HE, IS, EN, UP, UP E Supervision 2 July 1995 12 2 UP, UP Supervision 3 Dec. 1996 7 1 UP Supervision 4 April 1996 6 1 UP ICR Mission April 1997 18 2 UP, UE Total 74 56 FA Financial Analyst EN Engineer IS Industrial Specialist UP Urban Planner E Economist UE Urban Economist HRS Housing Reform Specialist HE Highway Engineer  Appendix A Republic of Armenia Earthquake Reconstruction Project (EQRP)--Credit 2562-AM Implementation Completion Mission, April, 1997 AIDE-MEMOIRF 1 A World Bank mission by Eric Peterson (Architect/Urban Planner, EC4MS), Task Manager, and Deniz Baharoglu, Consultant, Urban Economist/Urban Planner, visited Armenia from April 1 to 18-30, 1997, to a) carry out the final scheduled supervision mission for the Earthquake Reconstruction Project, b) begin preparation of the Implementation Completion Report, and c) start work on a housing sector issues paper for Earthquake Zone housing strategy formulation. "Ms. Baharoglu's participation in the mission was funded by the Norwegian Trust Fund, and focussed on the sector paper. As a part of Ms. Baharoglu's activities, Mr. Sassoun Tsirounian (social survey consultant) assisted the mission in preparing a sample survey of project beneficiaries. 2. The mission met with EQRP Project Implementation Unit (PIU) staff in Yerevan; with regional and local government officials, project beneficiaries, and an NGO working in the Earthquake Zone (EQZ); as well as with central Governnent officials in Yerevan. Commercial banks, real estate brokers, and contractors were also visited. The mission thanks these officials for their cooperation and assistance, and the director and staff of the PIU for their effective support and coordination of mission activities. Generous assistance on the status of current housing sector legislation and policy issues was provided by the Yerevan ICMA/USAID office. The findings of the mission are summarized herewith, and are subject to confirmation by Bank management. Mission Objectives 3. Supervision. review project completion procedures with the PIU, assess progress on the few remaining civil works and technical assistance (TA) contracts and assist the PIU and contractors in working out feasible work plans for any problem contracts to ensure completion prior to the Closing Date of June 30, 1997 4. Implementation Completion Report (ICR): a) discuss the preliminary views of the Bank, Government and implementing agencies on project implementation and operation; b) assist Government in development of an operational plan for continuing project objectives; and c) discuss with Government and implementing agencies their contribution to the ICR and reach agreement with the PIU on a work plan for providing inputs. 5. Housing sector Issues Paper: organize and start research for an informal note on housing in the earthquake zone (EQZ), which will serve as an initiating document (ID) for the proposed PPF-funded EQZ housing strategy study planned under the proposed Municipal Development Project.  2 6. The Issues Paper will highlight key earthquake zone shelter sector issues and identify information gaps; document current settlement patterns, market development, citizens' expectations and options, government subsidy and humanitarian aid patterns, and discuss environmental impacts; and make preliminary government/donor strategy recommendations for discussion with Government and for further development under the PPF study. A household sample survey of project beneficiaries was launched during the mission, with the objective of contributing information to both the ICR and the issues paper. Project Completion Procedures 7. All works under the project must be completed by the Closing Date of the Credit on June 30, 1997. The final work plan agreed during the last mission (updated, Annex 1) is being followed closely, although one sub-project (new experimental building) has been especially affected by bad weather since December and delayed delivery of seismic isolation bearings. The updated Cash Flow Projection (Annex 2) indicates smooth phasing out of PIU activities under the EQRP. Mission Findings PROJECT SUPERVISION Project implementation progress 8. No unusual problems have been encountered since the December, 1996, mission, and project implementation remains by-and-large highly satisfactory. All procurement under the project has been completed. A total of 137 civil works contracts have been executed under the project, along with associated site supervision contracts, and over 30 TA and equipment contracts. 9. The Credit amount of SDR 20.1 million is expected to be equivalent to $29.7 million as of the Closing Date because of the strengthening of the dollar during the past year. Contractor penalties (mostly for late performance) have added the equivalent of $600,000 to project civil works outputs. Thus, the total value of project outputs has risen from the original appraised amount of $28.0 million, to about $30.3 million. In the face of declining SDR/USD value, the PIU has done its best to cut the final commitments as closely as possible to the available dollar amount, and spend virtually all funds available to the project, but the dollar has continued to strengthen, and projections are so close that a surge in the strength of the dollar could result in a slight overspending, which would have to be covered by Government. 10. The PIU reports that as of the end of March, 1997, $30,300,000 has been committed, representing about 108% of the original credit amount of $28 million. For civil works components alone, the increase is on the order of 56%, from $18.9 million (SAR) to 29.5 million (March, 1997). $28.5 million, or 94% of the total commitment has been disbursed by the PIU to contractors, suppliers and consultants. As of end March, $29.4 million had been  3 disbursed from the Credit to the PIU, including $959,000 remaining in the Special Account, with another $146,000 in Withdrawal Applications in the pipeline. 11. Remaining project activities. Procurement for all scheduled project activities was completed last year, and there is no margin of uncommitted funds remaining for even minor additional work. Review of the investment program 12. Among the project's subcomponents, there are only two problems to be resolved prior to Closing, both involving the project's two experimental apartment buildings. These were started last year in a pilot to test a) increased financial participation of beneficiaries (Gumnri), and b) seismic base isolation in new construction (Spitak). The buildings are located in downtown areas where many households are believed to be willing to pay substantially more than required under the project's cost recovery formula for completed and strengthened buildings. 13. In the first experimental structure, beneficiaries had agreed to contribute 40% of the construction cost, but a higher than expected cost led to an upward revision of the contribution. Some of the participants in this scheme have been unable or unwilling to make the agreed contribution. The mission agrees with the PIIJ's proposal to finish the building at two stories rather than the expected three, in order to complete it on time and make it habitable using project funds only. The PIU will propose a transparent procedure for returning participants' deposits as required. It is understood that thie city can add additional floors when the climate is better for increased beneficiary financial participation. 14. The second experimental building has been plagued by delays beyond the control of,The contractor: delayed shipment of laminated rubber base isolation bearings from Malaysia, and- severe late winter weather. The PIU will carefully monitor progress in the spring, and support the contractor where possible, but total completion by June 30 is as yet not assured. Operational issues 15. Inquiries made for the ICR, and preliminary results from the household survey revealed some operational issues that need to be addressed by PIU/Government, notably cost recovery recording and transfer procedures, rules on selling apartments, occupancy rates, and the status of beneficiaries' domiks. In addition the role of the All-Armenia Fund in the Housing sector in the EQZ appears to continue to be in conflict with that of the Bank project. These issues are discussed below under Implementation Completion Report. Survey of housing beneficiaries 16. To assess project impact on target beneficiaries and the role of local authorities in providing the governance necessary to ensure sustainable benefits, and to collect information  4 for the housing issues paper, a sample social survey in the EQZ was begun during the mission by Sassoun Tsirounian under Dr. Baharoglu's supervision and funded by the Norwegian Trust Fund. Final results are expected in mid-May. Support and cooperation provided by local authorities is appreciated. Testing of the questionnaire took place during the mission, and preliminary results appear to confirm several operational problems (see Annex 4 for brief summary). HOUSING ISSUES PAPER 17. The Issues Paper will be completed by end of June. Government review is planned for late May--early June. As of the end of the mission, preliminary findings hold no great surprises. Strong steps towards reform are underway, but the Armenian housing sector remains constrained by an undeveloped financial sector. In the EQZ, the expectation of continuing full Government provision of housing is particularly strong in some communities, and is, along with weak effective demand/affordability (price:income ratio is quite high compared to other FSU countries), a persistent impediment to local and personal initiative (see Annex 5). IMPLEMENTATION COMPLETION REPORT ICR Preparation 18. During the mission, a Government ICR Working Group was formed, headed by Deputy Minister of Economy Kotolikian and EQRPIU Director Michael Mellcumian. Preparation steps and Bank/Borrower responsibilities were explained, as outlined below and in Annex 6. 19. Borrower' contribtion to the Report. Goverrnent is responsible for preparing its own final evaluation report on the project. This should be about ten pages. This evaluation report/summary, which will be attached unedited to the ICR, should assess project objectives and implementation, and evaluate both the borrower's own performance and that of the Bank during the evolution and implementation of the project, including the effectiveness of the relationship between the Borrower and the Bank. These should be looked at with special emphasis on "lessons learned" that may be relevant in the future. 20. Operational Plan. The borrower needs to adopt a plan for the operational phase of the project--the administration of the objects provided by the Credit after they are put into use, and to define the performance indicators to be used to monitor operations and development impact (see Annex 7 for discussion notes). 21. ICR Schedule. A schedule was agreed with the ICR Working Group. The timing is governed by PIU and Government time constraints caused by other obligations. The schedule is outlined below, but must be approved by Bank Management and is therefore provisional:  5 Jul. 25 Bank sends draft ICR to Government, without borrower's contribution; Aug. 8 ROA sends preliminary comments on draft ICR to Bank; Aug. 22 Government sends Borrower's contribution to the Bank, along with final comments on Bank's ICR draft; Sep. 5 'Gray cover" draft finalized at Bank. Project Evaluation 22. The Earthquake Reconstruction Project is the first Bank project to finance physical works in Armenia. Project objectives include a) provision of improved housing and living conditions to residents in the EQZ, b) the reconstruction of basic infrastructure supporting employment creation, and c) development of a longer term sustainable program for rehabilitation in the EQZ. Project outputs are discussed below. 23. Expected project benefits include a) poverty alleviation in the EQZ through employment creation, subsidized improved housing and other welfare infrastructure; b) policy development in the housing sector and c) the promotion of institutional development of a private construction sector through the introduction of competitive procurement and improved construction supervision. Factory shell completion is expected to lead to the creation of 2,500 jobs and increase exports. 24. Project Ratings. Supervision reports have generally rated the implementation of the project as highly successful; achievement of development objectives have also been highly rated. The mission supports these ratings, with the caveat that some operational deficiencies are developing and these must be addressed quickly. In addition, while the project, has eliminated one obstacle to the success of the enterprises selected for the factory shells component by providing the structures necessary for them to resume production, it is too soon to judge whether they will ultimately succeed since so much will depend on the mitigation of external political and macro-economic constraints. Finally, the housing component should be helping to shift popular attitudes in the EQZ away from the expectations of Government provision and to greater self-reliance. However, there is little evidence at this time that such a shift is taking place. Implementation 25. Implementation has been consistently efficient and effective. The PIU was called upon to introduce fully competitive procurement to firms that were still largely state-owned, and which functioned in a strongly ingrained culture of vertically organized, centrally administered production. This has succeeded admirably. Accuracy and timeliness in satisfying Bank requirements has been consistently excellent. Production of housing and other facilities under  6 the project has largely exceeded project design targets except in some cases where experimental approaches were undertaken and reduced at mid-term-review because of problems that were not foreseen during project preparation. The proposed Technical Assistance budget was reduced during implementation as local capacity proved strong, other donors contributed, and Government preferred to focus on civil works investments. Operations 26. Some weaknesses are showing up in operational aspects of the project, as investments are put into use. These include operation of housing units after construction (slow occupancy, unclear management responsibilities, allocation conflicts, and uneven cost recovery experience, and inadequate public information about the project.) Some of these are due to inadequate design, such as the expectation that local authorities will be able to follow through with agreed or recommended operational procedures. Others are due to inadequate follow-up of TA inputs (e.g. condominium organization) and to lack of coordination between the Bank project and the parallel activities of the All-Armenia Fund. 27. Operation of project-financed public bath houses on the basis of private concessions with full cost recovery is not yet fully realized because municipalities needed guidance in defining appropriate concession arrangements that would ensure their financial protection. Technical assistance has recently been provided to the municipalities to correct this, but it is too early to tell whether they will operate as foreseen. 28. The Housing Policy Action Plan submitted at mid term review as agreed during negotiations has been overtaken by a flurry of reform-minded legislation relating to the housing sector. It is not clear whether the Project has contributed to the shaping of this legislation or policy development, but the framework for sound policy formulation is developing well. Civil Works Project, Outputs 29. Civil Works comprise 98% of project expenditures. Of the three major civil works components, Housing and Municipal Services each disbursed about double the SAR-projected amounts, with higher (although not proportionally so) unit outputs. Factory Completion disbursed the projected amount, but produced three more units than the projected seven. See Annex 8 for Implementation Summary by subcomponent and city, comparing outputs projected in the SAR and Mid Term Review with the final outputs. 30. Housing Subcomponent Housing Comnpletion: The completion of residential structures started immediately after the 1988 Earthquake and suspended upon the break-up of the Soviet Union is the centerpiece of the housing subcomponent. Unit costs rose during implementation as degrees of completion of candidate buildings fell. Housing Strengthening: Structures damaged and weakened by the  7 EQ that could be made habitable through structural reinforcing is the second housing activity. This subcomponent has established new technologies for the strengthening of existing structures, notably new techniques for installing seismic isolation systems in new and existing occupied buildings. The project is the world-wide pioneer for several techniques, and project structures have attracted international professional attention. Single Family Housing: Under the third housing activity, a limited experimental program of houses on single plots, in various stages of construction from foundations and core houses, to complete two-story units were built for subsidized sale. Because of contractor delays, these have only recently been completed, and few are occupied. A preliminary assessment of local officials is that the absence of credit will be very difficult for EQZ citizens to build out the empty foundations. The Operational Plan to be drafted by Government for the ICR should address this issue and suggest a procedure for putting these assets to use, that supports project objectives. 31. See Table 1 below for comparison of SAR, Mid Term, and final projected housing outputs. The increase in outputs in both the completion and strengthening activities is due to good PIU procurement performance and was made possible by shifting project resources from the Unallocated and Technical Assistance categories, and the mobilizing of project savings and contractor penalties to this end. Table 1: Summary Comparison of SAR and MTR Housing component budgets, widh final program expenditures. Housing Increase Total S Increase Units over SAR (mill)* over SAR SAR 2069 0% 8.58 0% MTR 2375 15% 11.71 36% Actual 2857 38% 16.01 86% *) Proportionally higher costs are attributable to lower completion levels of buildings available for completion component, increase in the costlier 'strengthening' component, and rising construction costs. Municipal Services Component 32. Municipal services comprise Bathhouses, Infrastructure, and Community Facilities. $6.5 million was spent on Municipal Services, which is twvice the amount projected, and includes over 40km of water piping to deprived communities. Five schools, two clinics and other structures--new, strengthened or completed--are among the community facilities provided. 33. The emphasis of Bathhouse activity was shifted during implementation from mobile bathhouses to the rehabilitation of downtown central facilities. These have proven to be very popular. The mobile bathhouses are in fact demountable steel structures that can be moved and adapted to other uses when needed.  8 Factory Shells Component 34. Of the ten factories assisted under this component, one (Spitak Clothing) is currently employing abut 600 workers. A few others are about to start production. Cost recovery will begin after a three year grace period. TA has been provided by AUA Center for Business Research and Development to Gumri Electrocondensor to draft a Business Plan and help rationalize production and marketing. Lessons Learned 35. It is premature to attempt a comprehensive list of lessons learned at this time, but the following seem evident: a. PIU Independence: the project was fortunate to exist in a borrower framework which was able to guard the independence of the PIU from undue political and commercial pressures. b. Local governance and operations: it is difficult to administer a project with the geographic breadth of the EQRP without strong and consistent local operations capacity. c. Coordination of donor activities: this is essential where diverging project policies/concepts risk undermining project objectives and where a large number of beneficiaries are involved; complementarity and synergy should be sought where resources are scarce. Annexes 1. Final Work Plan 2. PIU Projected Cash Flow for December, 1996 to June, 1997 3. Summary of Project Costs and Disbursements by Category 4. Preliminary Findings of Survey Test 5. Summary of Preliminary Issues Paper Key Findings 6. Borrower's Responsibility in ICR Preparation 7. Operational Plan (description) 8. Implementation Summary (Civil Works)  LIST OF PEOPLE CONTACTED YEREVAN Government Kotolikiyon, Samwel Deputv Minister, The .Ministry of Economy. Kirakosian, V. Shiraz Deputv Minister, The Ministrv of Economy Andreassyan, Andranik First Deputy Minister, The Ministry of Urban Development. Balanian, Armen Head of Capital Construction Department, The Ministry of Economy. Khactarian, Vigen Deputy Mayor of Yerevan. Non-governmental organizations Anlian, Steven Resident Advisor, ICMA. Demirkhenion, Ashot Director, Ear:hquake Zone Acthtities, Hayastan, All-Armenian Fund. Engoian, Samvel Member of the Executive Board, Hayastan, All- Armenian Fund. Hakopian, N. Ashot Executive Officer, Armenian Real Estate Association. Poghossian, S. Gaeik President, Armenian Real Estate Association. Terk, Jakob ICMALVUSAID Consultant. Banks Mfnatsakanian, S. Ashot First Deputy Chairman of the Board, Armimpex, Bank. Sarkissian, M. Rouzanna Assistant to the Chairman of the Board, Arrnimpex Bank. Driver, M. Keith Head of Corporate Bankinz. Midland Armenia jsc. Hunt, A. J. Jeremy Chief Executive Officer, Midland Arnmeniajsc. Khachk}ian, G. Anushavan Chairman of the Board, Lend Bank. Sandonian, M. Rafael Chairman of the Council, Lend Bank. GUMRI Mazmanian. Hunan Urban Construction and Architecmral Sectors Chief, Shirak Mars. Vardanian, Micheal The Mayor Avetission, Sukias Deputv Mayor, Gumri SPITAK Avetisian, Souren The Mayor. Mkhitarian, Hrair Chief of Housing Fund, Municipality. Vova, Gasparian Construction and Architecture Department Chief, Municipality. VAiNADZOR Hovivian Haik Chief of Construction Department, Lory Mvfars. Sargisian, Radik Deputy Chief of Construction Department, Lory Mars Avalian, Ashot Leading specialist building enaineers, Lory Mars. Haroutunian, Andranik The Mavor. Hovtannisian, Armen Deputy Mayor. Voskanian, Rubik Head of Housing Fund, Municipality.  Working plan up to the end of the Project As of 04101197 Contractor Contract Contract Description Contract Works Compi. Remaing Start Projected REMAINING WORK # Narns ID# YPrke Completed % Works Date compl. more than teas than date 50% 20% -5% 20% [_ .j... _ . _.7 contracts I contracts 4 contracts Phase I ._. _ - - 1 Armwralsibstroy 3eG194 Electrocondenser Fact.Crnpl 995,650 836,5701 84.0% 159,0JC 07.11.941 04.30.97 . 11 59,080 21Spitak SIE 12aG/95-1 2 Mobil Baths/Gumri 51,2381 45,6081 89.0% 5,630 04.03.95 02 .30.97 5,630 Total Phase- I____ ____________ 1.046,9889 892,178 84.3%1 164,7101 ______ 0 164,710 Phase 2 3 Prometey 3St/11961l Cnst. of "Ardkap" factory 476,841 451,910 94.8% 24,931 0814.95 03.01.97 | | 24,931 Artikstroy lbPmiW9S-1 Hsng StrengtheninglPemzashen 194,888 160,546 82.4% 34342 12.01.95 05.25.97 . __ 34,342 5 DP "Ani" laGA11I96-3 Cnst.of Pobeda 42a house/Gumri 268,13 130,957 48.8% 137,177 9.05.96 05.30.97 137,177 ___ 6 Kanaka IbV/IW6-1 Housing strengtheningNanadzor 279,929 126,211 45.1% 153,718 0917.96 0415.97 153,718 __| 7 Spitak SIE 1aS/11/9l61a Cnst.of house,Tan #1/Spitak 133,857 54,326 40.6% 79,531 09.18.96 05.30.97 79,531 1 8 Spitak SIE 1 1aS/96&1b Cnst.of house,"Tan"#2lSpitak 133,857| 51,054 38.1% 82,803 09.18.96 05.30.97 82,803 __. __ _ 9 "Armvodstroy" PMK-22 IbGAlI/961 Hsng Strengthening/Gyumri 2412051 63,208 26.2% 177,997 11.18.96 06.01.97 177,997 10 Djavakhk 1 bGA1116-2 Hsng Strengthening/Gyumrl 109,907 33,992 30.9% 75.915 11;18.96 06.01.97 75 915 __ | I1 AOZT -Spitak-l- taS/11/-2 Hsng Completion/Spitak 266,403 121,456 45.6% 144,947 11.29.96 06.01.97 144,947 I 12 AOOT Kanaka" 1dVAIU97-1 UtilityNanadzor 29,8I0 19,013 64.3% 10,567 03.14.97 04.14.97 10,567 Total Phr s-2 _ 2,134,601 1,212,673 66.8% 921,929 - _ ... 362,0981 10,667 69,273 TOTAL __ 3,181 489 2,094,851 65.8% 1 08- S38 852,088 105671 223 983 _. x  Earthqtuake Zone Reconstnmction Project Implementation Unit Projected Cash Flow Alialysis h Credit Agreerent Category 8al. U Contractor Name Contract . Total Remain Category As of 03131197 Nutnber AprS97 May'97 Jun'97 1 Equipmnent ($41) S0 ($41) m F Si ~~~~~~~~~~~~_________~___ *.==' _ _==_____= 2 Civil Works $1,241,626 _ Total Phase 1 & 2 . $497,033 $379,269 S359,097 S1,235,399 56,227 a) Phiase 1 $333,617 _ . ____. _| - 1 Armuralsibstroy 3eG/94 _ $62,300 $67,469 $61,000 $190,769 2 Sutpervision Contracts $592 $592 $372 $1,556 ______________________-__ Total Phase 1T __ __ 562.892 $68,061 S61.372 $192,325 S141.292 b) Pliase 2 $908,009 __ .. . . _ ._ 3 Taron 606 3DL/11/95-1 $15,413 _ $15,413 4 Promeley 3StIllV95-l $32,622 S22,500 S15.0to $70,122 _____________ S "Bazum-1' |bV/II/95-3 $1,750 $1,750 6 "Baztum-1" lbV/I1/95-4 S4.288 $4,288 ____________________ _____________ 7 Achurianstroy lbG/11/95-3 3,t000 . $3,000 ______| ____ |_ 8 Aiikstroy _bPtn/ll/95-1 $23,370 $15.300 $17,600 $56,270 _ 9 "Sepasar lid laG/11/96-2 $5,262 _ $5,262 10 DP Ani' laG/II/96-3 $24,416 $19,500 S20,915 $64,831 11 Kanaka lbV/II/96-1 $68,026 S48.500 $49,813 $166,339 12 Spitak SIE laS/II/96-la $33,500 $27,971 $23,493 $84,964 _____________ 13 Spilak SIE laS/1i/96-1b $30,434 $30,857 $26,618 $87,908 ____________________ _____________ 14 !!a&shin 1bG111196-1 $59,314 $60,672 $67,895 $187,881 _____________ 15 Djavakhk lbG111/96-2 $30,170 $25,027 $24,1 17 $79,314 16 Spilakstroy-1 laSlll/96-2 $55,000 $54,715 $47,378 5157,093 17 Anailtpribor 3G/11/96-1 S2,282 $2,282 18 ERzrim DP laGIII/96-5 $526 $526 _____________________ 19 Kanaka ldV/i1197-1 $12,468 $12,468 20 MIN Rubber Products $28,000 - $28,000 21 Supervision Contracts $4.300 $6,166 $4.897 $15,363 - ' Total Phase 2 $434,141 5311,208 S297,725 51,043,074 (5135,066) 3 TA, Training&Studies $56,049 - __. 1 Earthquake Design Code $20000 $0 $20,000 2 Design | $2,000 $2,000 3 Pmnt for Films Production $800 $1,000 $1800 _4 Bathhouse Manag./AUA $5,721 $5,721 5 Business Plan for Capacitor Plant $6,077 $6,077 58,103 $20,257 6 Auditing ___ $9,600 $9,600 Total TA & Training $34,598 $7.077 $17,703 $59,378 ($3,329) 4 Operating costs ($28,860) $5,800 $5,100 14,610 $16,600 ($45,360) 5 Unallocated S