Colombia - Municipal Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 22394 IMPLEMENTATION COMPLETION REPORT (CPL-33360) ONA LOAN IN THE AMOUNT OF US$60.0 MILLION TO THE REPUBLIC OF COLOMBIA FORA MUNICIPAL DEVELOPMENT PROJECT JUNE 25, 2001 FINANCE, PRIVATE SECTOR AND INFRASTRUCTURE SECTOR MANAGEMENT UNIT LATIN AMERICA AND THE CARIBBEAN REGION This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective May 30, 2001) Currency Unit = Colombian Peso Col$ 1 = US$ 0.00043 US$ I = Col$ 2,325 FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS GOC Government of Colombia DNP National Planning Department (Departmento Nacional de Planeacion) FFDU Urban Development Fund FINDETER Territorial Development Bank (Financiera de Desarrollo Territorial'; IDB Inter-American Development Bank IGAC Agustin Codazzi Geographic Institute (Instituto Geografico Agustin Codazzi) MED Ministry of Economic Development PSP Private Sector Participation TA Technical Assistance Vice President: David de Ferranti Country Director: Olivier Lafourcade Sector Director: Danny Leipziger Task Manager: Thakoor Persaud / Menahem Libhaber  FOR OFFICIAL USE ONLY CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 3 5. Major Factors Affecting Implementation and Outcome 5 6. Sustainability 7 7. Bank and Borrower Perl'ormance 7 8. Lessons Learned 10 9. Partner Comments 12 10. Additional Information 16 Annex 1. Key Performance Indicators/Log Frame Matrix 17 Annex 2. Project Costs and Financing 18 Annex 3. Economic Costs and Benefits 20 Annex 4. Bank Inputs 21 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 22 Annex 6. Ratings of Bank and Borrower Performance 23 Annex 7. List of Supporting Documents 24 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.   Project ID: P006852 Project Name: Municipal Development Project Team Leader: Thakoor Persaud TL Unit: LCSFU ICR Type: Core ICR Report Date: June 28, 2001 1. Project Data Name: Municipal Development Project L/C/TF Number: CPL-33360 CountryIDepartment: COLOMBIA Region: Latin America and Caribbean Region Sector/subsector: UM - Urban Management KEY DATES Original Revised/Actual PCD: 03/20/1987 Effective: 10/15/1991 05/15/1992 Appraisal: 06/01/1989 MTR: Approval: 05/30/1991 Closing: 12/31/1997 12/31/2000 Borrower/Implementing Agency: GOVT OF COLOMBIA/FINDETER/IGAC/ESAP Other Parnners: Inter-American Development Bank (IADB) STAFF Current At Appraisal Vice President: David De Ferranti Shahid S. Husain Country Manager: Olivier Lafourcade Ping-Cheung Loh Sector Manager: Jeffrey S. Gutman Graham Smith Team Leader at ICR: Thakoor Persaud Vincent J.Gouarne ICR Primary Author: Thakeor Persaud; Menahem Libhaber 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: M Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: No  3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The six objectives noted in the Loan Agreement were to: (a) remove infrastructure bottlenecks and improve the coverage and operation of local government services, especially for low-income groups; (b) improve the coverage and operation of services provided by Project Entities; (c) improve the financial performance of Project Entities; (d) strengthen the institutional capabilities at the national and regional level to provide technical support to Project Entities; (e) improve the skills of personnel of Project Entities in areas such as revenue administration, expenditure management, and planning and delivery of local services; and (f) improve the municipal resource base by strengthening the capability for cadastre definition and update. 3.2 Revised Objective: Along with the above objectives, a new project component E was added to: Contribute to the institutional improvement of the water sector companies by: (i) supporting one or more selected project entities to undertake an institutional transformation which will render them more efficient, in accordance with the requirements of the Borrower's Law 142; and (ii) providing the Borrower's authorities responsible for the water sector with the know-how required to carry out the process of incorporation of the private sector in the provision of domiciliary water and sewerage services. Assessment of Objectives. The original and revised Development Objectives were clear, appropriate and realistic and they were consistent both with the Bank and country assistance strategy. With increasing urbanization, the Government of Colombia (GOC) began to adopt various decentralization measures. A new constitution was prepared in 1991 and the roles of the central, departmental and local governments were redefined. Among other things, the project was aimed at assisting the weak local government institutions to better assume their new role, while at the same time, helping other partner entities such as Instituto Geografico Agustin Codazzi (IGAC) and Departmento Nacional de Planificaci6n (DNP) to position themselves for longer-term assistance. Another important element was the goal of helping to make the newly-created Financiera de Desarrollo Territorial (FINDETER) a strong sector-financing entity. While the original objectives were appropriate, in retrospect, it seems that they reflect a common feature of projects of the era inasmuch as they gave the impression of providing one-time interventions aimed at resolving all of the sector problems. These objectives may thus have been too many and too optimistic on the expected outcomes and impact, especially in terms of depth and continuity as well as in the expectations about the initial institutional capacity of the various project entities. Also, in line with projects prepared during that era, the quantitative measures needed for assessing the degree of development impact and achievement (e.g. improved coverage of services and staff skills), were not provided. The objective of the new component E were also clear,appropriate and relevant and have been very instrumental in assisting the Governnent in its reform initiatives and in embarking upon a national water sector strategy within which the role of the private sector will be very important. 3.3 Original Components: Component A. A line of credit administered by FINDETER for subloans originated by eligible intermediaries to subnational govermments and municipal enterprises for subprojects to improve urban infrastructure and local services and to strengthen beneficiary institutions. (Loan amount: Planned - US$40.0 M; Actual - US$40.0 M). Component B. Strengthening of FINDETER's operating capacity (IDB Financed) -2 -  Component C. Training and I:nstitutional Support, including institutional assessments of about 700 local government entities, training of about 6,400 sector personnel in such areas as planning, budgeting, revenue generation, maintenance, etc. (Loan amount: Planned - US$8.0 M; Actual - US$7.04 M). Component D. TA to help IGAC, the Institute in charge of cadastres, to improve its capacity and complete a then ongoing program of updating about 4.3 million municipal cadastres nationwide. (Loan amount: Planned - US$12.0 M; Actual US$9.0 M). Assessment of Original Components. The original components seem to be the appropriate tools for achieving the stated goals. They were well-delineated in terms of institutional responsibilities, while at the same time, they showed clear complementarity. In retrospect, it appears that the preparation team was too optimistic in its assumption that FINDETER, IGAC and DNP could quickly gear up and implement their respective tasks with the high degree of coordination required to maximize the benefit of the investments. 3.4 Revised Components: In addition to the four components listed in Section 3.3 above, Component E included a program for institutional improvement of the water and sanitation sector companies through preparatory works for privatization of one or more medium size water utilities, each serving a population of up to 500,000 inhabitants and institutional improvement support to community organizations for water supply to small municipalities (of up to 30,000 inhabitants), along with promotion of the establishment of regional water supply entities. (Loan amount: Planned US$3.96 M; Actual - US$4.27 M). Assessment of Revised Component: While Component E is generally consistent with the other components of Loan 3336, it was added from a then-ongoing water project (the Water and Sewerage Sector Project, Loan 2961-CO) in the process of closing that project. Its focus upon privatization models for municipal water entities was a timely response to the operation and maintenance gap which appeared in the orginal project. Component E was a valuable instrument which served as the basis for implementing the Government's strategy for improving the performance of the water-sector companies after it became evident that municipal operation and maintenance issues were not easy to resolve without additional private sector participation. 3.5 Quality at Entry: There was no QAG review of this aspect of the project. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: There has been a positive impact in increased coverage of basic municipal services in the areas where project works were done, especially in several semi-rural municipalities with low-income population. Overall, about 179 municipalities with a total population of about 7.5 million residents benefitted from FINDETER's component. IGAC's cadastre program registered plots for about 7 million families and DNP's Technical Assistance (TA) program reached almost 700 municipalities. There was widespread impact of the investments financed from various sources under this program. The project helped in improving the financial and technical performance of the implementing entities, strengthening their institutional capabilities at the national and regional level to provide technical support to municipalities. It helped to improve the skills of personnel of FINDETER, IGAC and DNP, allowing them to provide TA in such areas as revenue administration, expenditure management, and planning and delivery of local services. The municipal resource base was strengthened through IGAC's assistance in cadastre definition and update work. Component E was successful in providing support to a large number of utilities, helping them to -3 -  incorporate greater private sector participation to the point where four utilities were successful in signing contracts with private operators. Additionally, key staff in the national authority responsible for the water sector (the Directorate of Water and Sanitation in the Ministry of Economic Development) have acquired the expertise needed to continue private sector participation for water and sewerage services. 4.2 Outputs by components: FINDETER used its US$40.0 M in Bank funds for subloans which partially financed 92 sub-projects, leveraging about US$7.5 M of funding from FINDETER's own funds; about US$11.3 M from financial intermediaries and about US$32.5 M in counterpart funds from municipalities. Among the projects financed under the loan, about 60% (in number) were for roadworks (rehabilitation and expansion), markets and urban sanitation works. Other categories of works included health centers, staff training, abattoirs, telephones, parks, etc. At appraisal, a target of about 300 subprojects was mentioned; however, this was later modified to 150. Reasons for this reduced figure were not clear but it is believed that later sub-project analyses indicated that the original cost figures were too low. FINIDETER was not able to reach the goal of 150 subprojects, primarily because the average cost of its subprojects grew from about US$500,000 to about US$709,000 due to inflation as well as to demand by the financial intermediaries and municipalities for larger sub-projects. For DNP's technical assistance program, it completed 673 of its planned 685 institutional diagnosis activities; 632 out of 685 contracts for technical assistance to municipal entities and it trained 7,219 municipal staff (versus a planned target of 5,400). In quantitative terms, its level of achievement has been very satisfactory. The IGAC component originally envisioned completion of 1,588,000 new cadastres and updating of another 2,830,000 throughout the country. Its actual figures are 1,757,850 new cadastres and 5,175,768 updated ones. It surpassed its original targets under the project by a large margin. Instead of 5-8 Private Sector Participation (PSP), Component E provided PSP support to 28 utilities via the Ministry of Economic Development (MED), with two medium-size and two small municipalities signing operating contracts with private operators. In addition, technical assistance packages, including fmancial management and commercial software, were developed for water utilities of small municipalities. About 60 training seminars for use of the packages was provided to representatives of 545 small municipalities and community organizations, in which 2254 persons participated. An innovative model, the "constructor-operator" model was developed to help small municipalities seeking private sector assistance. Standard bidding documents and contract were developed for this model. PSP processes were carried out for 8 small municipalities so far. 4.3 Net Present Value/Economic rate of return: A limited sample of Intemal Economic Rate of Return (IERR) calculations for markets showed 16% while slaughterhouses had a rate of about 18%. Part of the qualifying criteria for FINDETER to finance a subproject was that it had to have an IERR greater than 12%. Because of several problems (frequent staff changes, difficulty of locating initial analyses, problems in estimating current benefits, etc.) a systematic comparison of ex-ante and ex-post IERR figures was not possible. However, in preparation for the follow-up Bank/IDB loan (LN 4345-CO in 1998), consultants reviewing sample sub-projects found satisfactory IERR figures. Component E provides TA and no economic rate of return analyses were done. IERR for a sample of water subprojects analyzed as part of the PSP exercise showed a weighted average of about 23%. -4 -  4.4 Financial rate of return: Because of the type of activities and the operations of the project entities, no financial rate of return analysis was done for the components of FINDETER, DNP and IGAC. For Component E, the financial projections showed an average rate of return of about 16%. In terms of project finances, there has not been any repayment problems from those municipalities which borrowed from banks which rediscounted their loans through FINDETER. Part of the reason for this is that these municipal loans are collateralized by Central Government transfer payments. There has recently been some difficulty with banks which had to be rescued by the Government but the extent of this problem is not clear at this time. For the DNP, IGAC and MED components, no direct cost recovery or repayment by the beneficiary entity was envisaged for their TA activities. 4.5 Institutional development impact: The project achieved many of the quantified physical output targets established at appraisal; however, in terms of its development impact, while it can be concluded that for the objectives listed in Sections 3.1 and 3.2, the degree of achievement has been generally met, the impact has been less than originally envisaged. For example, while service coverage and operation of most project municipalities improved substantially (not all of the improvement attributable to the project), there are still several operation and maintenance, tariff, property tax and related issues to be addressed. Similarly, while FINDETER, IGAC and DNP were all able to use the project funds and TA to improve their respective operations, FINDETER and IGAC continue to face several internal and external challenges in a changing macroeconomic environment. The DNP project entity was disbanded shortly after its component was completed. While the "training of trainers" and diagnostic work have had some continuity as municipalities on their own seek out TA from private consultants, the experience developed in this unit was lost after the unit was disbanded. Component E achieved significant positive institutional development impact with the creation of a unit with competent professionals in the Directorate of Water and Sanitation of the Ministry of Economic Development. This unit continues to function well and it will be in charge of implementing the country's water policy through a new Bank sector project currently under preparation. The two medium size cities PSPs will last for 30 years while the two small PSPs will run for 10 years. 5. Major Factors Affecting Implementation and Outcome 5. 1 Factors outside the control of government or implementing agency. The project was prepared and implementation commenced during a period of significant changes in Colombia. The new Constitution, while favorable from a decentralization policy viewpoint, created several implementation problems as the various national and sub-national entities struggled to interpret and apply it. Illegal drug activities also had a significant negative impact upon the project, resulting in limited access to several municipalities in many parts of the country, difficulty in implementing property tax reforms and cost recovery measures, damages to infrastructure facilities, etc. For IGAC, poor weather conditions prevented aerial mapping and cadastre work in several parts of the country during the time when FINDETER and/or DNP were focussing on these municipalities. Preparing technical specifications and finding suppliers for IGAC's specialized equipment needs were also problem areas. For Component E, the new constitution provided a strong basis for seeking more PSP in municipalities. The December 2000 municipal electoral process coincided with the end of the project and with the period for bidding and selecting private operators for participating water utilities. This had a negative impact because it froze some municipal decisions and distracted participants. It was only possible to get 4 PSPs done under such conditions. Security conditions also deterred foreign private operators and investors from seeking new opportunities in the country and may have also limited the pool of consultants hired under component E. 5.2 Factors generally subject to government control: Poor coordination at the national level among FINDETER, IGAC and DNP is one key area where the GOC - 5 -  could have helped in maximizing project impact. Lack of counterpart funding for IGAC, especially during the latter part of the project, also contributed to delays. Other factors include difficulty of contracting works and services on time, frequent staff changes at all levels in the implementing entities as well as in the municipalities, difficulty in attracting and retaining qualified staff, primarily because of low salaries, and limited use of lessons learned. Because of coordination problems within the Government and budget constraint, the first (of three) year for implementation of this component was lost. Frequent changes at all levels in the MED (from ministers through Project Implementation Unit - PIU staff) also created problems. Additionally, there were inconsistencies within the environmental legislation, unclear environmental regulations and fears regarding the excessive payment of water pollution charges (tasas retributivas) which contributed to the reluctance of private operators to submit proposal for the PSP bidding process. 5.3 Factors generally subject to implementing agency control: Among the primary factors related to the components of FINDETER, DNP and IGAC are the initial reluctance of the implementing entities to decentralize their operations in order to speed up turnaround approval time, supervision, etc; slow preparation and approval of work programs; reluctance to communicate with other project entities and lack of follow-up mechanisms. 5.4 Costs and financing: Final project cost figures are difficult to calculate, primarily because apart from Bank financing, FINDETER also received an IDB loan as well as other resources from its own funds, GOC budget funds, intermediary institutions and municipalities. The figures below are an estimate of the Bank-generated lending activities. Component Appraisal Estimate (US$M) Actual Expenditures (US$M) Local Foreien Total Local Foreign Total A. Municipal Projects 86.20 72.00 158.20 92.30 89.00 181.30 B. Inst. Devt. Findet 2.40 1.60 4.00 2.40 1.60 4.00 C. Training & Inst. Sup. 6.20 3.80 10.00 3.90 7.40 11.30 D. Cadastre 4.10 11.90 16.00 0.30 7.10 7.40 E. Inst. Devt. Wtr. Sct. - - - 3.40 0.90 4.30 Total 98.90 89.30 188.20 102.30 106.10 208.30 Project financing was as follows: Appraisal Estimate (US$M) Actual Expenditures (UJS$M) Local Foreign Total Local Foreign Total IBRD 60.00 60.00 60.00 60.00 IDB 4.00 40.00 44.00 4.00 40.00 44.00 Sub-borrowers 47.50 47.50 47.50 47.50 FINDETER 14.10 14.10 21.40 6.10 27.50 Financial Intermediaries 16.60 16.60 21.20 21.20 CORPES 0.70 0.70 0 0 National Government 5.30 5.30 8.10 8.10 Total 88.20 100.00 188.20 102.30 106.10 208.30 Note: The category of expense for approx. US$0.4 M is now being finalized by MED/IGAC/DNP - 6 -  6. Sustainability 6.1 Rationale for sustainability rating: The project has a "likely" sustainability rating because the impact of the components financed (both physical works and TA) helped municipalities to increase their service coverage as well as to improve operational efficiency. With more intensive coordination and follow-up actions, there could have been more achieved in maintenance, property-tax adjustment and cost recovery. Many municipalities nevertheless took advantage of the loan and TA to improve their provision of basic services, strengthen their operations, update their property tax records, and otherwise improve their operations. As part of the national reform process, every municipality now has to prepare a municipal plan. These plans are being formulated in a more professional manner and in almost all of the municipalities, there is full acceptance of the principle of competitive bidding, a larger degree of cost recovery and a greater willingness to reduce staff. Many municipalities are facing financial crisis because of the current political and socioeconomic problems in Colombia and also because of their heavy debt burden and their inability or unwillingness to improve their own-source revenues. This could make many of the achievements of the project uncertain if they continue much longer. The MED component is also expected to be very instrumental in promoting greater private sector participation in water and sanitation services and this may lead to further acceptance of the private sector in such areas as markets, slaughterhouses and solid waste management. FINDETER was able to consolidate and improve its operations, promoting greater self-sufficiency among municipal entities. However, as a second-tier lender in an era when many banks are facing liquidity problems and many municipalities are also running up deficits, there is greater uncertainty in FINDETER's future. Frequent efforts to modify its role have also had a negative impact; however, it has the potential to surmount these obstacles if the Government accepts its recent proposal to improve its operation. As the national budget comes under pressure and local governments are being increasingly pushed to greater self reliance, the full impact of IGAC's updated cadastre work would find favor as more municipalities tum to property tax to make up for reduced transfers. 6.2 Transition arrangement to regular operations: From the beginning, with the exception of the DNP unit for the TA component, FINDETER and IGAC have been the entities responsible for municipal finance and cadastre respectively. Similarly, the investment and TA were directed at the municipal entities which customarily do the tasks. There is therefore no special transition arrangements needed for these entities to continue with their tasks. In the case of the DNP unit, at one time it was envisaged that it would continue to offer TA to regional and local administrative entities. However, these plans were changed and this unit was disbanded. The municipalities have been working to make their operations more efficient and many are seeking greater private sector participation in such key areas as water and sewerage, markets, transport and other activities. For the MED component, a new water sector project is being prepared to continue to widen and deepen the achievements obtained so far. It is envisaged that the PIU in the MED will continue to be responsible for the proposed new operation; no special transition arrangements are therefore needed. 7. Bank and Borrower Performance Bank 7.1 Lending: Satisfactory. The PAD and other preparation documents reflect a high level of interaction with the Borrower, IDB and national counterpart staff and very detailed analyses. More direct contact with the municipal entities by the Bank, IDB and the implementing entities to explain Bank procedures, requirements, etc., may have smoothed out some of the start-up problems and highlighted the need for greater coordination. Both in Colombia as well as in the Bank, there were institutional changes taking - 7 -  place during that period. Given the proposed impact expected from the project, the complexity of the project, the then-evolving role for FINDETER and several other institutional factors, it may have been prudent for the Bank to either consider scaling back the project or waiting a bit longer until some of the preparatory work were more fully completed. Some of the start-up delays (e.g., the problem of finding private-sector banks which were willing to participate in the lending program, the use of DNP as the TA entity, difficulty of finding acceptable sub-projects among the first batches submitted for approval), could be attributed to this factor. The Bank did send a post-appraisal mission which helped to address some of the above-mentioned issues; however this team comprised different staff from those who did the appraisal - an early indication of initial continuity problems. Although Component E was approved by the Board, more thought should have been given before adding it here after the project was almost completed. 7.2 Supervision: Satisfactory. During the period immediately after loan effectiveness, supervision efforts were only marginally satisfactory. It appears that the Bank did not make full use of the two-year period immediately after appraisal and effectiveness to work intensively with the Borrower and counterpart staff for this project. An important formative intervention period was thus not fully utilized. During this period, for example, there were only three missions, two with one person and one with two persons. This situation could be a reflection of both then-ongoing country and Bank changes. The pace of supervision picked up and averaged twice a year during the latter part of the project. Component E had supervision continuity; supervision missions were frequent and focused on both the pilot operation and the preparation of a new water sector project. 7.3 Overall Bank performance: Satisfactory. While indications are that the project preparation stage needed more Bank attention and perhaps, could have benefitted from some more preparation time and effort, and the supervision of the FINDETER, DNP and IGAC components should have been more intense and focussed, especially during the early phase of the project, the overall Bank performance is rated satisfactory, primarily because of the achievements of the project, aided by improved supervision efforts of the Bank in coordination with IDB. T'he technical, financial and administrative support of the Bank in the water component contributed to a consolidated government sector policy, improved multilevel coordination and increased interest in PSP activities in the sector. Borrower 7.4 Preparation: Satisfactory. As noted above, Colombia was in the midst of several important changes during the late 1980s when the project was under preparation. There was pressure to undertake various decentralization actions at all levels and, like the Bank staff, many counterpart staff appeared to have underestimated the complexity and capacity of the project entities to undertake the work. The decision to have DNP implement a component was based upon the belief that, apart from its policy role, DNP would also assume an active lead TA role. It appears that the logistics and resource requirements for assuming such a role, as well as the institutional rationale, were not very well thought through. Consequently, there were several start-up and coordination problems, changed directions and high staff turnover. 7.5 Government implementation performance: Satisfactory. In the implementation phase, the GOC made special efforts to facilitate smooth project implementation. However, many of the mechanisms for ensuring the required degree of inter-institutional coordination among project entities did not fully materialize for various reasons. Even when DNP's urban planning division tried to assist, it was not successful, primarily because of the large degree of autonomy and different agendas which DNP, FINDETER and IGAC had. Toward the latter period of project -8 -  implementation, lack of counterpart funds for IGAC became a recurring problem. Even though the GOC repeatedly agreed to provide the funds and the budgets were approved, getting the actual allocations proved problematic. The GOC was not able to get many of the lessons learned from the project institutionalized among a wider national audience (especially the operation and maintenance needs, the importance of updated cadastres and the TA program). For the MED component, there were also several start-up budget problems; however, these improved after the first year and the PIU was able to work well with all of its partners. 7.6 Implementing Agency: Satisfactory. Initially, FINDETER had problems defining its role and establishing itself after evolving from the old Urban Development Fund (FFDU). During this early period, there were several organizational issues to address and it was apparently not as prepared as it should have been for the national lending program envisaged under the project. Its initial centralized structure was also an early impediment as were the frequent staff changes at all levels. Getting the interest of private financial intermediary entities to participate in its lending program was a challenge. After these start-up difficulties, FINDETER managed to organize itself, decentralize its operations, develop a close contact with its municipal clients and introduce them to several good practices (in sub-project analyses, contracting, supervision, private sector participation, etc.). FINDETER was also very instrumental in getting many banks to become familiar with lending to municipalities and its loan-guarantee program has had an ongoing positive impact on sector lending, especially in creating a medium-term portfolio among these banks. For IGAC, the evolution from a passive institution into one where it was expected to become more pro-active was a great challenge. It was a rather difficult exercise transforming IGAC into a more demand-driven entity with a close TA role for municipalities. Frequent staff changes, bad weather conditions, delays in getting specialized equipment and later on, counterpart funding problems, also complicated the situation. In spite of this, IGAC did manage to exceed the physical targets established under the project and give municipalities a potential source of revenue through their updated cadastres. After having its share of start-up problems, the DNP TA unit managed to meet and later exceed its training and TA targets. However, even while it was making progress in its component under the project, there continued to be questions about its location, role and functions. After completing several diagnostic studies and signing agreements with mayors to embark on a large-scale TA program, the 1994 elections brought in new mayors and councils and resulted in suspension or elimination of many of these initiatives. The unit was disbanded shortly after the funds under this component were spent but since most of the staff continued to work in similar fields, the know-how developed under this component is still being used by many municipalities. After a rather shaky beginning because of budget and staff-turnover problems, the PIT was able to absorb valuable knowledge and experience in managing PSP processes in the water sector. It led and provided support to the territorial entities it interacted successfully with the Bank, consultants and PSP investors and was able to mainstream many of the lessons of the pilot operation. 7.7 Overall Borrower performance: Satisfactory. Given the context within which the project was prepared and implemented, the Borrower performed satisfactorily in spite of the various shortcomings mentioned above. When problems were brought to the attention of GOC officials, they made efforts to address the issues; however, the results were not always as positive as they could have been. -9  8. Lessons Learned FINDETER, DNP and IGAC Components: a) Private-sector financial intermediaries can be a source of municipal finance with the right conditions. In this project, after some initial reluctance and start-up problems, FINDETER managed to leverage about US$11.3 M (approximately 10% of total project cost) from financial intermnediaries and create the nucleus of a medium-term finance market. Admittedly, most of these were public-sector financial intermediaries; however, in the ongoing follow-up project, it is expected that there will be more private-sector banks participating. b) While private sector lenders may need strong guarantees initially in order to make loans to municipalities, care should be taken to avoid an overdependence upon such guarantees and to push more for financially-stronger municipalities. In this project, since the national revenue sharing program was used to guarantee subloans to municipal entities and repayment was through these flows, this could have created a tendency for both lenders and borrowers to be less concemed about the financial and economic viability of the investments financed. Bank-approved selection criteria countered somewhat this project shortcoming. The follow-up project incorporates several rigorous analyses of borrowing entities and lenders are expected to assume greater risks. c) Even though the need for inter-institutional coordination may be obvious and clearly desirable, unless there is a very well-defined, simple and strong mechanism for effecting such coordination, the results may be disappointing. The importance of having FINDETER, IGAC and DNP working together within the same timeframe, institutional clusters and zones was clear; however, the incentives for this were weak and the enforcement mechanisms were rather ineffective. Consequently, the required degree of coordination did not occur and some synergistic impacts were lost. d) Because operation and maintenance tasks are associated with finished works, there is the tendency to postpone attention to them until the works are completed. In this project, because of start-up and related difficulties, there was added pressure to focus on the more immediate issues. Partly as a result of this, many of the works were completed without the needed improved operation and maintenance provisions being in place. Some ex-post efforts (including the water PSP activity), are now being made to correct this deficiency. e) The role of the private sector in the provision of urban services should be an integral part of any infrastructure investment. In this project, it was assumed that the municipal entities would be able to operate and maintain the facilities after they were built and the possible role of the private sector was not as fully considered as it should have been at the outset. f) There is need for the Bank and other lenders and donors to consider "appropriate technology" solutions more carefully in designing lending programs. In many cases, especially among low-income groups, a high-cost solution such as piped-water in homes, for example, may not be sustainable for these groups without large subsidies and they may be better off in the long run with a reliable but lower level of service (such as standpipes or regulated tanker-trucks), rather than a sophisticated one with high operation and maintenance costs. g) Having more than one lending entity can cause complications at several levels. In this project, the Bank and IDB had their individual procurement, sub-project evaluation and other procedures. Additionally, the country has its normal systems and procedures. This resulted in a period of initial confusion as the project - 1 0 -  and municipal entities struggled to understand what was to be done, under which set of guidelines, for which lender etc. Frequent staff changes did not help this situation. Greater efforts at streamlining lending conditions as well as borrower orientation should be considered. h) In designing and preparing projects, lenders should pay more explicit attention to the impact of possible electoral changes and appropriate provisions should be made for these. After preparatory works and agreements were made with mayors for TA (DNP), implementation of cadastre programs (IGAC) and infrastructure investments and tariff adjustments (FINDETER), many of the incoming mayors and councillors refused to continue with the activities initiated under their predecessors. Valuable time and resources were lost because of such complications. i) It appears that there is need for the Bank to evaluate more explicitly the impact of internal reorganizations upon client countries. Staff distraction and gaps in taking early follow-up actions may have contributed to some of the initial start-up problems of this project. The fact that the GOC was undergoing a similar set of changes was also a complicating factor. Component E: j) The PSP experience with water utilities in Colombia, Chile, Argentina and Bolivia, and in other parts of the world indicates that a strong commitment of each municipality is fundamental. Preparing both the community and municipal authorities for PSP is an important precondition. Reaching agreement on an adequate tariff and subsidy structure early in the process is also very important. In preparing the PSP processes in Colombia, MED worked with all parties and reached agreement with each mayor on the tariff level needed to cover operational and maintenance costs as well as part of the investment costs. Improved targeting of subsidies was also part of the preparation process. k) Maintaining a flexible framework and adequate time for key activities can aid in successful results. Dropping municipalities which are reluctant to take needed preparatory actions and working with all participants to prepare appropriate bidding documents which reflect the special needs of the community as well as incentives to bidders aided in the successful completion of the MED component. 1) Using a single consultant to prepare the package could be more beneficial than having more than one do the task. In this component, use of a single consultant to prepare the package (works, investments, financial, legal and bidding documents) improved the quality and consistency of the output. This, with clearly-defined responsibilities between the PIU and the consulting firms, helped to improve efficiency and productivity. m) Even with flexible systems, there should be some degree of standardization to facilitate the process. In order to ensure quality and standardized processes, it is advisable to request all consulting firms to use standard financial models for the analysis of the new private sector managed utilities and to use model bidding documents and a PSP contract for preparing the transactions. n) PSP does not mean that there is no need for a continued government role. Even the larger municipalities would have problems contributing more than about 20% of the needed investments. For the smaller ones with a high proportion of poor households, they are even weaker. The National Government thus still needs to continue to be a fundamental stakeholder in financing the water and sanitation sector in all but the largest municipalities. Also, the signing of a PSP contract is only the start of a complex transaction process that requires several years to consolidate. The government, therefore, needs to provide continuous support to the privatized utilities in technical, financial and political aspects. - 1 1 -  9. Partner Comments (a) Borrower/implementing agency: EVALUATION SUMMARY PROYECTO DE DESARROLLO MUNICIPAL COLOMBIA BIRF 3336-CO i. Introducci6n El contrato de prestamo fue suscrito el 8 de noviembre de 1991 entre la Repuiblica de Colombia y el Banco Internacional de Reconstrucci6n y Fomento por un monto de 60 millones de d6lares, orientados al Desarrollo Municipal. ii. Objetivos del proyecto: a) Remover los cuellos de botella de la infraestructura municipal y mejorar el cubrimiento y operaci6n de los servicios gubemnamentales locales, especialnente para grupos de bajos ingresos b) Mejorar el cubrimiento y operaci6n de los servicios prestados por Entidades del Proyecto c) Mejorar el desempeiio financiero de las Entidades del Proyecto d) Fortalecer las capacidades institucionales a nivel nacional y regional para suministrar apoyo tecnico a Entidades del Proyecto e) Mejorar las habilidades del personal de las Entidades de Proyecto en areas de administraci6n de ingresos, administraci6n de gastos de planeacion y entrega de servicio locales f) Mejorar la base de recurso municipal fortaleciendo la capacidad para la definici6n y actualizaci6n catastral. Para alcanzar estos objetivos el proyecto se dividi6 en 4 componentes: Componente Responsable Objectivos Valor A FINDETER Linea de credito administrada por US$40 millones FINDETER para financiar proyectos BIRF 3336-CO de infraestructura urbana y fortalecimiento institucional. BID 715 CO OC B FINDETER Fortalecer las capacidades de BID 887 SF OC operaci6n de FINDETER Asistencia Tecnica a los municipios C DNP-PDI Desarrollar un programa de US$8 millones entrenamiento y apoyo institucional BIRF 3336-CO para fortalecer a los municipios y a los organismos asesores D IGAC Fortalecer la capacidad de operaci6n US$12millones del IGAC y actualizar el catastro BIRF 3336-CO municipal a nivel nacional TOTAL US$60 millones BIRF 3336-CO - 12 -  iii. Logro de los objetivos. El programa contempl6 la integralidad entre los componentes de inversion (A) y los de mejoramiento institucional (B, C y D). La concepci6n del programa busc6 el fortalecimiento de la entidad territorial, no solamente a traves de una acci6n directa con el proyecto ligada al desarrollo institucional del sector, sino al mejoramiento de la administraci6n central dentro de un esfuerzo integral por un desarrollo equilibrado frente al sector financiado. Sin embargo la debilidad estructural para soportar esta integraci6n debido a una baja capacidad de coordinaci6n interinstitucional, a la limitada importancia que las entidades territoriales le dieron al mejoramiento institucional de la administraci6n central y a la perdida de la memoria institucional por la rotaci6n del personal hicieron que la concepci6n y disefio del programa no lograra integrar los componentes. El componente A se disefio para incrementar la infraestructura, operaci6n y mantenimiento de los servicios locales. Las inversiones se circunscribieron a aquellas diferentes a acueducto y alcantarillado ya que estos sectores se financiaron con el credito del Banco Mundial 2961 CO. Se aprobaron 83 operaciones con las cuales se financiaron 92 proyectos. En promedio, el costo de los proyectos del programa fue de USD$708.744 y el promedio de recursos de credito aprobados USD$ 469.067. La mayor concentraci6n de proyectos aprobados se presenta en vias y plazas de mercado (33 y 15 proyectos respectivamente), los montos mas importantes de creditos aprobados fueron para vias y redes telef6nicas y solamente 9 proyectos incluyeron la financiaci6n de programas de desarrollo institucional. La ejecuci6n del componente C, signific6 una movilizaci6n masiva del recurso humano en el pais en materia de capacitaci6n, estudio, analisis y preocupaci6n de todos los niveles de la administraci6n publica en el tema de desarrollo institucional. En la mayoria de los municipios se busc6 fortalecer la participaci6n de la comunidad en el desarrollo de los proyectos de todas las areas, previa la elaboraci6n de 673 diagn6sticos en igual numero de municipios, labor que permiti6 la formulaci6n en estos de 3 172 proyectos de desarrollo institucional; sin embargo, estos no se concretaron en creditos del componente A. De igual manera, en la ejecuci6n de proyectos PDI en el area de planeaci6n, muchos alcaldes lograron, mediante procesos participativos y conforme a los terminos legales, elaborar y presentar sus correspondientes Planes de Desarrollo. El Componente D cumpli6 sus objetivos de manera parcial ya que no se logr6 consolidar el proceso de descentralizaci6n tecnica, administrativa y fiscal mediante el fortalecimiento de la estructura de planeaci6n, financiaci6n, administracion y gesti6n puiblica de los diferentes entes territoriales. Sin embargo, se logr6 adecuar la capacidad instalada del IGAC el que ayud6 a las administraciones locales a mejorar sus sistemas de recaudo acelerando el ciclo de informaci6n y actualizaci6n catastral y les proporcion6 la informaci6n necesaria para el diseino e implementaci6n de planes y programas de desarrollo territorial. Se actualizaron 5.175768 predios y se formaron 1.757.849 predios: como resultado del trabajo de cartografla se espera tener a disposici6n de los usuarios mapas digitales del 90% de las capitales de departamento, insumo basico para la formulaci6n de planes de ordenamiento territorial. La adquisici6n de equipos modemos para el laboratorio de suelos ha incidido en el mejoramiento de la gesti6n en cuanto a la calidad y entrega oportuna de resultados. Los desembolsos totales del credito ascienden a US$53.9 millones, correspondientes al 90% del prestamo. - 13-  iv. Principales factores que afectaron el proyecto Varios factores contribuyeron negativamente durante la ejecuci6n del proyecto: * La financiaci6n de proyectos por parte de FINDETER se caracteriz6 por: deficiencias en los estudios y disefios hechos con anterioridad generando demoras y acciones adicionales de revisi6n y ajuste acorde con los criterios establecidos por FINDETER; baja capacidad de gesti6n de las administraciones locales; deficientes interventorias y poca valoraci6n de su importancia por parte de las administraciones locales; alta rotaci6n del personal en las administraciones locales, la falta de participaci6n de la comunidad y el corto periodo de los alcaldes restringe la formulaci6n e implementaci6n de prograrnas de mediano y largo plazo, siendo poca la continuidad en los planes de desarrollo; falta de continuidad en el manejo del programna por parte del Banco Mundial al tener diversos interlocutores y criterios durante su ejecuci6n. Los limites establecidos por tipo de licitaci6n obligaron al manejo de un volumen apreciable de informaci6n sobre procesos de contrataci6n. Estos procesos conllevaron demoras adicionales en la ejecuci6n de los proyectos en comparaci6n con la legislaci6n nacional. No se logr6 consolidar un sistema de informaci6n integral que permitiera acumular la memoria institucional de los proyectos. * El Programa inici6 su ejecuci6n en forma simultanea con la promulgaci6n de la nueva Constituci6n Politica de 1991, lo cual implic6 la necesidad de introducir algunos ajustes al Programa, especialmente a partir de los desarrollos normativos de la Carta Constitucional. Estos ajustes se relacionaron en los documentos "Avance y Balance" de septiembre/94 y el Informe Final PDI, 1991-1996. - El componente D se vi6 afectado por problemas de asignaci6n presupuestal y de condiciones climaticas y de orden plblica, por lo cual no se pudieron ejecutar totalmente actividades de aerofotografia y la formulaci6n catastral de municipios ubicados en zonas de dificil acceso. v. Sustentabilidad del proyecto La sostenibilidad del proyecto depende del compromiso de los dirigentes locales y el Gobiemo Nacional. La sostenibilidad se fundamenta principalmente en la aplicaci6n de los resultados de estudios, asistencia ticnica experiencias adquiridas y lecciones del Programa, los cuales sirvieron para la formulaci6n de directrices de la nueva politica de consolidaci6n de la descentralizaci6n, planteadas en el documento CONPES No. 2788 de junio de 1995. Esta experiencia soporta la politica impuesta en el Programa Mejor Gesti6n de los Departamentos -PMGD-, como estrategia de fortalecimiento a la gestion territorial a partir de las recomendaciones y lecciones aprendidas durante la ejecuci6n del PDI, posteriormente recogidas por la Evaluaci6n Ex-post del Programa. En este sentido, de las lecciones aprendidas del PDI, las acciones futuras a desarrollar se circunscriben en los avances logrados hasta el momento mediante el desarrollo de la estrategia definida en la politica sefialada. vi. Desempeio del Banco El Banco Mundial intervino y dio su aprobaci6n a los ajustes del proyecto requeridos en el nuevo marco Constitucional vigente. En este sentido, puede calificarse como un desempefho adecuado. No obstante, este organismo debe considerar una participaci6n mas activa en la ejecuci6n de los proyectos, de tal forma que trascienda la esfera de la supervisi6n con el objeto de servir de apoyo en el proceso operativo. Se debe reforzar por parte del Banco el seguimiento durante ejecuci6n (posterior a la aprobaci6n), de los respectivos subproyectos, para poder corregir oportunamente las desviaciones o desfases que se Ilegaren a - 14 -  presentar durante esta etapa y lograr cumplir con los objetivos propuestos en los programas. Se propone al Banco que se asuma un papel mas participativo de los funcionarios de la Misi6n Residente, lo que facilitaria la comunicaci6n y agilizaria los procedimientos. vii. Desempeflo del prestatario Durante la ejecuci6n del proyecto FINDETER fue un promotor de la cultura del proyecto integral en los entes territoriales y sus empresas descentralizadas responsables de la operaci6n, adrninistraci6n y mantenimiento del proyecto financiado. La promoci6n se dio a trav6s de la consideraci6n y evaluacion de los aspectos tecnicos, econ6micos, financieros, institucionales y ambientales tanto del proyecto como el impacto del proyecto en el servicio puiblico. No obstante los resultados de la implantaci6n del desarrollo institucional, la labor de FINDETER se dirigi6 en este aspecto al fortalecimiento del servicio en el nivel territorial, de tal forma que velaran por el mantenimiento, operaci6n y administraci6n de los proyectos financiados. Las funciones y responsabilidades de las diferentes instancias del PDI estuvieron enmarcadas dentro de los procedimientos y requisitos establecidos en el texto del contrato de Prestamo y en el Manual de Operaciones del Progama, que para cada etapa debian surtirse y cumplirse. De otra parte, la identificaci6n de la demanda de desarrollo institucional de los municipios busc6 generar un proceso en el que estos identificaran, de acuerdo con sus nuevas funciones, cuales eran sus potencialidades y debilidades para asumir el reto de la descentralizaci6n. A la luz de esta experiencia, el prestatario experiment6 un modelo de intervenci6n subregional para acometer procesos de desarrollo institucional municipal, con el fin de brindarle a los departamentos otra alternativa de trabajo con el PDI. En forma permanente, el prestatario se nutrio de las experiencias adquiridas durante la ejecuci6n del PDI, de tal forma que influy6 en la formulaci6n de la politica de descentralizaci6n. El IGAC acogi6 las prioridades impuestas por el programa, y atendi6 los requerimientos realizados por los funcionarios del Banco. viii. Valoraci6n de resultados Aunque el programa concibi6 tres componentes complementarios al componente A para el desarrollo territorial, no hubo interacci6n entre los diversos ejecutores, perdiendose la oportunidad de potencializar mas rapidamente el desarrollo territorial dentro del esquema de descentralizaci6n. Cada componente del PDT se manej6 independientemente con resultados satisfactorios para cada uno. Sin embargo, no se puede verificar el impacto conjunto en los municipios. Muy posiblemente, el Programa de Desarrollo Institucional (PDI) hubiera sido complementario y bastante uitil para lograr fortalecer la gesti6n de los municipios, sobre todo en aquellos donde se financiaron proyectos con recursos del componente A. Los retrasos que en el avance de los desarrollos del Programa empezaron a registrarse frente al cumplimiento de unos cronogramas y metas preestablecidas hicieron que, afanosamente y en forma masiva, se desarrollaran acciones improvisadas con miras recuperar el tiempo y cumplir la meta, primando entonces el resultado final, en detrimento de la calidad y cualificacion de los importantes procesos que debian surtirse. ix. Futuras operaciones * Reorientar la estrategia de desarrollo institucional en los proyectos, teniendo en cuenta que se debe - 15 -  afianzar en la entidad la importancia del componente institucional en el ciclo del proyecto y coordinar con el nivel nacional las politicas a implementar para el fortalecimiento institucional en los aspectos gerenciales de los sectores objeto de financiaci6n con de la entidad. * La redefinici6n de roles en el triangulo FINDETER-Intermediario-Prestatario debe darse sin salirse de la misi6n. Hay discrepancias sobre la interpretaci6n de papeles, especialmente: l) el del intermediario financiero a quien algunos ven como competidor y otros como cliente. 2) El del ente territorial a quien unos ven exclusivamente como un cliente prestatario de un credito para realizar un proyecto y otros como un cliente que debe resolver un problema a traves de un proyecto para el cual asume un credito. En el primer caso prestar plata y recuperarla con eficiencia es el fm institucional. En el segundo, el objetivo es apoyar la realizaci6n de buenos proyectos, con base en creditos que deben ser manejados eficientemente para poder financiar mas proyectos. Entre las dos percepciones, se mueve algo mas que un juego sutil de palabras: se puede mover la misi6n y con ella la misma raz6n de ser de la instituci6n. x. Lecciones aprendidas * Como conclusi6n general del PDT, se puede resaltar que FINDETER logr6 apoyar a los entes territoriales en el proceso de descentralizaci6n a traves de la financiaci6n de obras importantes para su desarrollo; adicionalmente, logr6 difundir la cultura del proyecto integral. Dado el entomo institucional y legal, FINDETER por si sola no pudo afianzar el proceso de fortalecimiento institucional de las administraciones territoriales, lo que es imposible de lograr en el marco aislado de la financiaci6n de proyectos de infraestructura. Como consecuencia de lo anterior, el PDT no logr6 el impacto esperado en terminos del desarrollo institucional. * Cualquier acci6n de fortalecimiento de la capacidad de gesti6n de las localidades debe contar con la voluntad politica decidida e irrestricta por parte del respectivo gobemante territorial, en respeto a la autonomia. De igual forma, es necesario que el mandatario lidere la acci6n y la incorpore a su administraci6n. (b) Cofinanciers: (c) Other partners (NGOs/private sector): 10. Additional Information The Partner Comments in Section 9 cover Components A through D. Partner Comments for Component E, which was added to the Project after its initial approval, can be found in the project file as indicated in Annex 7, "List of Supporting Documents". -16 -  Annex 1. Key Performance Indicators/Log Frame Matrix Outcome I Impact Indicators: Indicator/Ma oJc fedInlast PSR ActuaILatest Esimate Indicators Not Available Output Indicators: Indicator/Matdx Projected In last PSR AcuaUlLatest Estimate a) Approval of 316 infrastructure subloans by 83 83 FINDETER. b) FINDETER's operating capacity improved Qualitative improvements Qualitative Improvements and its pipeline of projects increased. c) DNP training for about 6,425 staff in 685 7,219 Staff in 632 Municipalities 7,219 Staff in 632 Municipalities municipal entities. d) Strengthen IGAC and carry out 6.9 million updated and new cadastre 6.9 million updated and new cadastre registration for about 4.3 million parcels registries. registries. nationwide. Project component E: implementing an Successfully finalizing one or more PSP PSP completed in 2 medium size and 2 assistance program to support a process to processes in medium size cities small cties, with 28 others in preparation increase private sector participation in the stage. w&s sector, aimed at carrying out and successfully finalizing a PSP process for one or more medium size water utilities. End of project - 17 -  Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) Apprlalw ActualALAt6st Percetag of 64inmAte Estmatet Appraisal A. Municipal Projects 158.20 181.30 117 B. Institutional Development FINDETER 4.00 4.00 100 C. Training 10.00 11.30 113 D. Cadastre 16.00 7.40 45 E. Water Supply and Sanitation 4.30 Total Baseline Cost 188.20 208.30 Total Project Costs 188.20 208.30 Total Financing Required 188.20 208.30 Note. The SAR included projected IDB and other investments. Since no ex-post figures were available, they could not be compared with the SAR projections. Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) NCR N.S.Fp.ndituwi To >0 0; tal =>cost 1. Works 10.20 35.50 5.10 50.70 101.50 (5.20) (18.20) (2.60) (0.00) (26.00) 2. Goods 13.70 13.70 6.80 23.90 58.10 (10.10) (7.00) (3.00) (0.00) (20.10) 3. Services 19.20 7.50 26.70 0 0 (13.90) (0.00) (13.90) 4. Land 1.00 1.00 2.00 o O (0.00) (0.00) (0.00) 5. Miscellaneous 0.00 I O O O (0.00) Total 23.90 49.20 32.10 83.10 188.30 .______________________ (15.30) (25.20) (19.50) (0.00) (60.00) 18 -  Project Costs by Procurement Arrangements (ActuaVLatest Estimate) (US$ million equivalent) Expenditure Categoy ICs PBocwnnt Method 2 N.BF. Total Cost ___ Other _ _ _ _ _ _ _ _ _ 1. Works 8.00 50.00 6.00 51.00 115.00 (5.00) (22.00) (2.00) 0 (29.00) 2. Goods 10.80 21.00 8.00 24.00 63.80 (6.00) (12.00) (3.00) 0 (21.00) 3. Services 19.00 2.00 7.50 28.50 O (9.00) (1.00) 0 (10.00) 4. Land 1.00 1.00 o O 0 0 (0.00) 5. Miscellaneous 0.00 0 _ Q (0.00) Total 18.80 90.00 16.00 83.50 208.30 .___ _ _ (11.00) (43.00) (6.00) (0.00) (60.00) " Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. ' Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. Project Financing by Component (in US$ million equivalent) Component .Esdmate Percentage of Appraisal Component Apprasl Estimate A LatestEtmt Ba-sk Govt. Ce?. Bank Gv C. I CbF. A. Municipal Projects 40.00 118.20 40.00 139.00 100.0 117.6 B. Institutional 4.00 4.00 100.0 Development FINDETER C. Training 8.00 1.30 0.70 8.00 1.30 100.0 100.0 0.0 D. Cadastre 12.00 4.00 7.73 4.00 64.4 100.0 E. Water Supply and 4.27 Sanitation - 19 -  Annex 3. Economic Costs and Benefits Subloans were made to municipalities and only minimum acceptable IERRs were specified. Ex-post IERRs were done only for a sample of projects (see Section 4.3) - 20 -  Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No, of Persons and Specialty Performance Rating (e.g. 2 Economists, I FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation 08/85 NA 10/85 NA 05/86 1 EC 06/87 2 EC, US 12/87 2 EC, ID 03/88 3 EC, US, SE 09/88 4 EC, US, SE, ID Appraisal/Negotiation 08/89 3 SE, US, EC 12/89 5 SE, US, EC, US, ID 07/90 1 SE 10/90 2 US, EC Supervision 03/92 2 ME, US HS S 10/92 3 ID, US, WE S S 06/93 3 ID, US, WE S S 02/94 3 EC, SE, WE S S 09/94 3 EC, SE, WE S S 04/97 2 EC, US S S 11/97 3 EC, US, ME S S 10/99 3 ME, PE, SE S S 06/00 3 EC, PE, SE S S ICR 08/00 EC, SE S S EC - Economist ME - Municipal Engineer US - Urban Specialist ID - Institutional Development Specialist SE - Sanitary Engineer WE - Water Engineer (b) Staff: f Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) Identification/Preparation 108.4 195.3 Appraisal/Negotiation 84.7 171.9 Supervision 114.3 267.1 ICR 5.0 17.0 Total 312.4 651.3 FACT Data as of April 1, 1999 - 21 -  Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating Macro policies O H OSUOM O N * NA FSector Policies O H O SU * M O N O NA S Physical O H OSUOM O N O NA Z Financial OH OSUOM ON ONA z Institutional Development 0 H O SUO M 0 N 0 NA Environmental O H OSUOM O N O NA Social C? Poverty Reduction O H OSUOM Q N * NA Gender OH OSUOM ON *NA 3 Other (Please specify) O H OSUOM O N O NA * Private sector development 0 H O SU * M 0 N 0 NA * Public sector management 0 H O SU O M 0 N 0 NA L Other (Please specify) OH OSUOM ON 0 NA - 22 -  Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bank performance Rating 0 Lending OHSOS OLu OHU ? Supervision OHS OS OU OHU 1 Overall OHS OS O U O HU 6.2 Borrowerperformance Rating 2 Preparation OHS *S O U O HU F Government implementation performance O HS O S 0 U 0 HU F Implementation agency performance OHS OS 0 U O HU 0 Overall OHS OS OU O HU - 23 -  Annex 7. List of Supporting Documents The following supporting documents are available in the project file: 1. Departamento Nacional de Planeaci6n, Informe de cierre del Programa de Desarrollo Territorial, September 7, 1998. 2. FINDETER, Informe de cierre de proyecto, Componente A, August 1998 3. Departamento Nacional de Planeaci6n, Unidad Administrativa Especial de Desarrollo Territorial, Informe de cierre de proyect, Componente C, August 1998. 4. Instituto Geografico Agustin Codazzi, Informe de cierre de proyecto, Componente D, August 1998. 5. Ministerio de Desarrollo Econ6mico, Direcci6n de Agua Potable y Saneamiento Basico, Informe de Cumplimiento de Ejecuci6n, Componente E, December 2000. - 24 -  - 25 -   IBRD 26153 COLOMBIA %NI Cor, NIC Riehmhe@ > , 4 A i 1VENFI S> 4/ V/ XOLO 2IVIA jo *j r* K. | < , ,> ' / E M ro FAs / to NA L I,- PA1A~AY PANA AA Mon n 1QN . ) I f NORTE 9 The boundories, colors, denominations &tV4 anid ay other information shown on _CDRDOBIA .MDE this mop do not imply, on the part of The World Bank Group, any judgment / ~~~~~~~~~~~~~~~~~~~~~~~on the legal status of any territoryo 't~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~t (4ibdo a endorsement o o c a J bpol~~~~~~~~~~~~~~~~~~~~~sc ondr,,- K J'41,1 ~ ~ '0 ,< 7n 0 50 100 150 200 250 0~~~~ V 'B C H A D A - EUEVATION ABOVE 1000METERS o O NATIONAL CAPITAL 1 | * DEPARTMENT CAPITALS,,pERUj'( -~~~~- RIVERS P~~~~ VE R E CDEPARTMENT BOUNDARIES , T A ./ - - INTERNATIONAL BOUNDARIES - = ' / j /4 '4 78 74. tthiLefcg 41 AUGUST 1994