Ghana - Community Water and Sanitation Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No.: 21785 IMPLEMENTATION COMPLETION REPORT (IDA-26040) ONA CREDIT IN THE AMOUNT OF SDR 15.9 MILLION (US$ 21.96 MILLION EQUIVALENT) TO THE REPUBLIC OF GHANA FOR THE COMMUNITY WATER AND SANITATION PROJECT January 31, 2001 Water and Urban II Country Department 10 Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective September 25, 2000) Currency Unit = Cedi (GHC) GHC 1 = US$ .006800 US$ 1 = GHC 6,800.00 FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS BAS - Beneficiary Assessment Survey CAS - Country Assistance Strategy CIDA - Canadian International Development Agency CWS - Community Water and Sanitation CWSA - Community Water and Sanitation Agency CWSD - Community Water and Sanitation Division CWSP-1 - First Community Water and Sanitation Project CWSP-2 - Second Community Water and Sanitation Project DA - District Assembly DDA - Demand Driven Approach ERR - Economic Rate of Retum ESA - Extemal Support Agency GoG - Government of Ghana GWSC - Government Water and Sewerage Corporation HO - Head Office IDA - Intemational Development Association ILM - Intensive Leaming Model KfW - German Cooperation M&E - Monitoring and Evaluation MOU - Memorandum of Understanding NCWSP - National Community Water and Sanitation Project NCWSS - National Community Water and Sanitation Strategy NGOs - Non Govermment Organizations O&M - Operation and Maintenance POs - Partner Organizations PPF - Project Preparation Facility RFA - Rapid Field Assessment RWSTs - Regional Water and Sanitation Teams SAR - Strategic Assessment Report SBDUs - Small Business Development Units UNDP - United Nations Development Program WATSAN - Water and Sanitation Committees WSDBs - Water Sector Development Boards Vice President: Callisto E. Madavo Country Director: Peter C. Harrold Sector Manager: Letitia A. Obeng Task Team Leader: Jennifer J. Sara  FOR OFFICIAL USE ONLY IMPLEMENTATION AND COMPLETION REPORT GHANA COMMUNITY WATER AND SANITATION PROJECT CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 3 5. Major Factors Affecting Implementation and Outcome 10 6. Sustainability 10 7. Bank and Borrower Performance 12 8. Lessons Learned 14 9. Partner Comments 15 10. Additional Information 16 Annex 1. Key Performance Indicators/Log Frame Matrix 17 Annex 2. Project Costs and Financing 20 Annex 3. Economic Costs and Benefits 22 Annex 4. Bank Inputs 23 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 25 Annex 6. Ratings of Bank and Borrower Performance 26 Annex 7. List of Supporting Documents 27 Annex 8. Beneficiary Survey Results 28 Annex 9. Stakeholder Workshop Results 33 Annex 10. Borrower's Implementation Completion Report 41 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization.   Project ID: P000924 Project Name: COMMUNITY WATER & SANITATION Team Leader: Jennifer J. Sara TL Unit: AFTU2 ICR Type: Intensive Learning Model (ILM) of ICR Report Date: January 31, 2001 1. Project Data Name: COMMUNITY WATER & SANITATION L/C/TF Number: IDA-26040 Country/Department: GHANA Region: Africa Regional Office Sector/subsector: WR - Rural Water Supply & Sanitation KEY DATES Original Revised/Actual PCD: 05/14/91 Effective: 04/14/94 12/15/94 Appraisal: 01/24/94 MTR: 11/17/97 11/17/97 Approval: 04/14/94 Closing: 12/31/99 08/31/2000 Borrower/Implementing Agency: GOVERNMENT OF GHANA/Community Water and Sanitation Agency Other Partners: CIDA, KfW STAFF Current At Appraisal Vice President: Callisto E. Madavo E.V.K. Jaycox Country Manager: Peter C. Harrold Edwin Lim Sector Manager: Letitia A. Obeng James 0. Wright Team Leader at ICR: Jennifer J. Sara Robert J. Roche ICR Primary Author: Wendy E. Wakeman; Tracy Hart; Peer Reviewer: Alexander Bakalian 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 Inmpact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: Project at Risk at Any Tinte: No  3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The main objective of the First Community Water and Sanitation (CWSP-1) project was the full-scale demonstration of the proposed National Community Water and Sanitation Strategy (NCWSS). The project was designed to help achieve the objectives of the National Community Water and Sanitation Program (NCWSP), i.e., to (a) provide basic water and sanitation services to communities that will contribute towards the capital cost and pay the normal operations, maintenance, and repair costs of their facilities; (b) ensure sustainability of these facilities through community management, including involvement of women, private sector provision of goods and services, and public sector promotion and support; and (c) maximize health benefits by integrating water, sanitation, and hygiene education interventions. The project was implemented in four regions: Ashanti, Brong Ahafo, Northem and Westem, with small town work also undertaken in Upper East and Upper West regions. 3.2 Revised Objective: There were no revised project objectives. 3.3 Original Components: The project had three components: (i) provide water and sanitation services to rural communities (US $7.94 million); (ii) provide water and sanitation services to small towns on a pilot basis (US $8.87 million); and (iii) capacity building for public and private sector (US $5.96 million). 3.4 Revised Components: Although there were no major revisions of the project components, the following two changes were introduced during project implementation: 1. In the interest of meeting the national program objective of transferring govemment-managed waterpoints to community ownership and management throughout the country, an agreement was reached in 1996 with the Govemment of Ghana (GoG), German Cooperation (KfW), and the Intemational Development Association (IDA). IDA would shift some of the project funds that had been allocated to hardware to support community organization and training for the "conversion" of about 2,500 existing handpumps to community management. In tum, KfW would finance the construction of 270 of the targeted boreholes, the rehabilitation of 860 additional boreholes (about 350 of which are in CWSP-1 regions), the supply and distribution of handpumps, the establishment of an associated maintenance system and international consulting services. 2. In 1999, IDA agreed to a government request for the reallocation of a portion of project funds to cover the cost of the retrenchment of about 170 Central Maintenance Unit staff. Since the autonomous Community Water and Sanitation Agency (CWSA) was established and community ownership and management was adopted nationwide, these staff were no longer required in the public sector. 3.5 Quality at Entry: Preparation of the project followed a lengthy policy dialogue involving the Government of Ghana, multiple External Support Agencies (ESAs), and the World Bank. A Rural Water Supply and Sanitation Workshop held in 1991 resulted in a draft sector strategy which would become a precursor to the NCWSS. The Bank undertook an active role, vis-A-vis other ESAs in the sector in stepping in to demonstrate the proposed strategy, thereby hoping to prompt other ESAs to follow suit. This was the World Bank's first stand-alone rural water and sanitation project in Ghana, although the Bank had previously financed four urban water supply and sewerage projects. The Country Assistance Strategy - 2 -  (CAS) of 1994, which was presented to the Board at the same time the CWSP-1 Staff Appraisal Report (SAR) was finalized, recognized urban and rural water supply delivery and institutional reform as central to a broader poverty alleviation agenda. Project design was commended at the time of board presentation as being very innovative. It involved implementing a new strategy for the sector and designing interventions in areas where little was known (community managed small towns and integration of water, sanitation and hygiene activities). Quality of entry on the part of the Bank is considered to be satisfactory. Quality of entry on the part of the borrower was satisfactory. The Government provided strong support to the NCWSP, of which this IDA-financed project was a part. GWSC moved quickly to create a separate Community Water and Sanitation Division (CWSD) within its structure. The Ministry of Finance and Economic Planning provided timely project start-up funds, and the Ministry of Works and Housing initiated three workshops to introduce the National Program and its intent to take the lead in monitoring and evaluating the quality of the Program. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: The primary development objective of the project was to provide a full-scale demonstration of the proposed National Community Water and Sanitation Strategy. The project was designed to be a major step towards sustainability by moving away from a government-driven approach towards community management. The key elements of the reform included: (i) resources channeled to communities and districts based on their expressed demand; (ii) district-level involvement and the establishment of a District Water and Sanitation Team (DWST); (iii) the use of the private sector in the provision of goods and services; (iv) public sector facilitation, where the GoG would sign a performance contract with GWSC; (v) community ownership and management of services; (vi) the involvement of women; and (vii) the integration of water, sanitation, and hygiene education. Accordingly, during the first two years of the project emphasis was on institution building and training, with most physical targets back-loaded into the project life span. With regards to institutional structure, the National Strategy was implemented by GWSC through CWSD. Regional Water and Sanitation Teams (RWSTs) of CWSD were responsible for overall implementation of the project in each region. The RWSTs assisted district govemments in establishing District Water and Sanitation Teams (DWSTs). These DWSTs then promoted the project by providing communities with information about water and sanitation and vetting Construction Grant Applications and Facilities Management Plans (FMPs). The RWSTs were also responsible for building up the capacity of the local private sector. Small Business Development Units (SBDUs) were hired to help establish and train district-based Partner Organizations (POs), who assisted rural communities in planning and preparing their FMPs, training them to manage their systems and encouraging them to use good hygiene practices. The RWSTs and SBDUs also trained hand-dug well contractors and latrine artisans, and prepared training materials and methods for them. Procurement of borehole siting, construction and supervision; small towns consultants and contractors; and handpumps was undertaken by CWSD Head Office. The RWSTs managed the contracts for the POs and hand-dug wells, while the districts managed the funds for the latrine component. Each RWST handled an imprest account and CWSA Head Office was responsible for overall - 3-  financial management and reporting. Monitoring and evaluation indicators and targets for each of the three specific objectives were developed in the SAR and were slightly modified during the mid-term review, when the project was retro-fitted to adopt a log frame (included in Annex 1). Several qualitative and quantitative assessments were implemented by CWSA through the life of the project, including the Mid-term Review, an Impact Assessment used for the design of the follow-on IDA-funded project, CWSP-2, and as part of this Intensive Learning ICR, a Rapid Field Assessment (RFA) followed by a Beneficiary Assessment Survey (BAS). Periodic national and regional stakeholders' workshops also provided substantial self-assessment of roles and responsibilities of individual stakeholders. Development Objective: overall, the project substantially achieved its development objective. In addition to meeting most physical and institution-building targets, the project had an important spill-over effect in the sector. CWSP-1 served as a powerful vehicle for GoG to seek concurrence, convince donors and all agencies working in the sector in order to operationalize of the national policy throughout the country. Specific Objective 1 of "providing basic water and sanitation services to communities that will contribute towards the capital cost and pay the normal operations, maintenance, and repair costs of their facilities," is rated with a highly satisfactory outcome. The objective was achieved through meeting all physical targets for communities and small towns, as well as all related community-based deliverables (hygiene training, caretaker training, WATSAN training, etc.). BAS results find 89 percent of CWSP-1 beneficiaries surveyed currently contributing to operations and maintenance funds. Specific Objective 2 of "ensuring sustainability of these facilities through community management, including involvement of women, private sector provision of goods and services, and public sector promotion and support," to-date is rated satisfactory. Women form at least 40 percent of WATSAN members in sampled communities in all the four CWSP-1 regions, and hold executive positions regularly across all CWSP-I regions. CWSP-1 has been successful in stimulating private sector provision of goods and services, and small community national stakeholder participants have consistently rated it one of the key principles most successfully applied. However, BAS interviews with private sector individuals also show that they are concerned about the weak demand for private sector services that may occur once investment subsidies provided by external projects are removed. Public sector support for ensuring sustainability cuts across central (CWSA), regional (RWST), and district (DA, DWST) levels. Approximately 93 percent of the rural water facilities surveyed (all of which were at least two years old) are adequately functioning at the time of project close. Specific Objective 3 of "maximizing health benefits by integrating water, sanitation, and hygiene education interventions," the project's outcome was partially satisfactory. Most participants in the small communities national workshop rated the integration of water, sanitation, and hygiene education as one of the key underlying principles of the NCWSP that was not as successfully applied. The objective was to integrate water, sanitation, and hygiene, yet sanitation was dealt with separately from the other two sub-components (see Section 4.2). However, at the community level, and through the efforts of the POs, the integration between water and hygiene was achieved. The RFA and BAS in-depth interviews with WATSAN committees underscored that they were very satisfied with the level of hygiene education provided to them by DWSTs as well as POs and believed hygiene education to be an integral component of improved water supply delivery. 4.2 Owtputs by conmponents: -4 -  Rural Water and Sanitation At project inception, water supply facilities were to be offered to rural communities in four regions on a demand-driven basis, with an estimated 700 rural communities and 350,000 people being served by 1,000 water points. Sanitation facilities for households, schools, and public places were also to be provided under this component, with 10 percent of the component's construction budget earmarked for sanitation. The component also included hygiene education and a schools program. Hygiene education was to be front-loaded into the process of mobilizing and training communities to manage their water supply and sanitation facilities in order to better ensure that the health aspects of water and sanitation were captured as fully as possible. The schools hygiene education program coupled the construction of sanitation facilities with the training of teachers in good hygiene practices. Finally, the handpump conversion program was added to the project and is expected to reach a target of 2,500 conversions, thereby more than doubling the final number of communities owning and managing their facilities. Table 1 Target Achieved No. of rural water points 1000 (730 IDA + 270 KFW) 563 hand-dug wells, 725 constructed boreholes No. of handpump conversions 2500 2610 (350 rehabilitated KFW) No. of household latrines 4000 6000 No. of communities with water 700 communities 826 new facilities facilities, WATSANs and hygiene 1154 conversions education No. of schools participating 250 140 schools, 70 with latrines Table 2: Regional distribution of Ashanti Brong Western Northern completed facilities Ahafo No. of rural water points 323 334 403 228 No. of household latrines 2,323 2,126 841 641 Table 1 indicates that all but one of the targets were not only met but were also exceeded. The implementing arrangements at the community level were sound, with each community expressing its demand, selecting its service level, forming and training a representative WATSAN Committee, preparing a facilities management plan and developing an action plan for hygiene education. These actions laid the foundation for community ownership and management of the facilities. On the other hand, the school sub-component was the only one that did not fully achieve its physical targets of facilities constructed, with 140 schools out of the expected 250 participating. However, the sub-component was able to deliver on supporting the establishment of a National School Health Education Program and developing a school hygiene curriculum and associated training materials. As noted above, the integration of water, sanitation and hygiene was a weaker element of the project. The project design called for communities to enter separate applications for improved water supplies and latrine facilities. The school component was never fully integrated into the community-level work and was managed by separate staff within CWSA. From this experience, CWSA has leamed that the provision of water and sanitation facilities in schools should be integrated into the overall community process, especially since most schools are located within the communities and mechanisms have to be in place to ensure the - 5 -  sustainability of the facilities throughout the year. The household sanitation component was designed with a "demonstration effect" in mind. However, the strategy of subsidizing demonstration latrines did not achieve its intended success. Demand for latrines was high by certain members of the community when there was a subsidy; however, it seemed non-existent without one. An initial subsidy was provided to interested households in order to stimulate demand. Latrine artisans were trained, and were then responsible for marketing a finite number of latrines at a subsidized rate. Results show the households benefiting from the latrines constructed were often the well off and were spatially concentrated in few communities where the latrine artisans lived. In addition, neither the project nor the latrine artisans actively marketed non-subsidized latrines, or developed a range of technology options that could have been more affordable. Despite these flawed design assumptions about the expected replicator effect, the household sanitation component was able to exceed its physical target of 4,000 latrines and was able to construct a total of 6,000 latrines, and provided many lessons for the design of CWSP-2. Despite these apparent design shortcomings, health and hygiene knowledge of beneficiaries of rural water points, as measured by RFA household surveys, were high. When posed with an open-ended question, 95 percent of respondents could name a general health risk associated with drinking polluted water and 33 percent could name a specific water-bome disease. More than 90 percent of RFA household members surveyed could describe how to identify safe drinking water. Seventy five percent of beneficiaries could provide proper health and hygiene-related reasons for using a latrine. Project households adopted the following hygiene practices, as recorded in the BAS: 84 percent store water in clean containers, 63 percent have water containers with a lid/cover, 50 percent use separate cups for scooping water and drinking, 82 percent wash hands after visiting latrines, and 81 percent wash hands before cooking. Annex 8 provides more details. The RWSTs performed extremely well in the implementation of this component, especially on assuming their responsibility for contracting the POs, the hand-dug well contractors and managing the handpump conversion program. On the other hand, the contracts for borehole drilling and handpump supply and installation, handled centrally by HO, frequently did not deliver in a timely manner. Despite these shortcomings, the rural water and sanitation component was able to deliver its physical facilities and community development activities ahead of project schedule. Overall, the rural water and sanitation component met and exceeded its physical targets, and successfully achieved its intermediate objectives of capacity building for private sector involvement and local-level public sector participation. The component is rated as highly satisfactory. Small Towns Water and Sanitation The small towns water and sanitation component had the objective of achieving sustainable water provision by establishing comnmunity ownership and management, through representative Water and Sanitation Development Boards (WSDBs). In terms of its physical targets, 30 small towns, with populations between 5000 and 20,000, were to have gone through the planning and design process with WSDBs elected and trained, and civil works completed. In the northem regions, IDA was to finance the investment costs of 20 small towns systems through a parallel funding arrangement with CIDA, who would be responsible for design, supervision and community development. The southem small towns were designed as a pilot, to test and strengthen the capacity of CWSA and the local private sector to work in this field. - 6 -  Small towns strategy: The component was designed to be implemented using a demand-responsive approach and firmly rooted in the concept of comrnunity ownership and management, including a 5 percent community contribution to capital costs, selection of technology and service options based on willingness to pay, and full responsibility for O&M through tariff revenue collection. The technology options included handpumps on boreholes, small-piped systems (consisting usually of a mechanized borehole, a storage tank, distribution network, and metered public and/or house connections), or a combination of the two. Community selection for the southern small towns was to be routed through District Assemblies with RWSTs to provide backstopping support in implementation. CWSA Head Office was to take on the role of facilitator in planning, mobilizing financial resources, and facilitating private sector provision of goods and services. The community was to be responsible for operations, maintenance and repair of their facilities, and revenue collection. Basic management would consist of a voluntary water board, accountable to the community. Implementation results: The small towns component of the project presented the greatest challenge for implementation. The considerable learning-by-doing and revision of the component during implementation led to major delays. It was extremely difficult in some cases to collect the 5 percent community contribution in the given time frame, as many towns took on a "wait and see" attitude to see if in fact they would actually have to pay, or if a government agency would bail them out. CWSA, often against much political pressure, firmly enforced the policy. However, it was later discovered that the District Assemblies assisted many of the communities in raising the 5 percent on a loan basis. By the close of project, the following targets were met: * Facility Management Plans were prepared in 38 towns (target was 30) * WSDBs were formed and trained in 38 towns (target was 30) * Two towns opted for and received only handpumps, based on their contributions - Twenty-nine towns had water systems completed (target was 30) (Ashanti - 5, Brong Ahafo - 4, Western - 6, Northern - 5, Upper East - 4, Upper West - 5) * Five additional towns had water systems completed, however, these were pre-financed under CWSP-2 * Two towns have partially completed water systems (the remaining works will be re-bid under CWSP-2) The following are modifications made to the strategy and implementation results: 3 Towns were supposed to be selected competitively based on demand. However, once the town was included in the list, it was politically difficult to have it removed even if the community members did not show true demand for the project. * A mix of technologies was never really implemented and handpumps have been provided only as backup for piped systems. Households have, however, been able to choose between house connection and public standposts. * All selected small towns should have been connected to the national electricity grid within a period of one year. However, at project close, eight are yet to be connected. Temporary alternative arrangements include solar systems, generators, and the use of single-phase pumps. * The sanitation sub-component for the small towns never materialized. * Poorly defined roles of CWSA HO versus regional staff have had an adverse effect in activities, such as construction and training supervision. * Two construction contracts in the northern regions were transferred to CWSP-2 for funding, through a pre-fmancing agreement between CWSA and the contractors. The delay in effectiveness of CWSP-2 caused major concerns, with one of the contractors demobilizing. Despite these drawbacks, by far the greatest institutional capacity building has been achieved in - 7 -  communities through the WSDBs. Starting with no knowledge in water supply and sanitation services delivery, the initial capacity of WSDBs has been built to make informed choices of service levels, and manage the operations and maintenance of piped water supply systems. The building of social capital has been very good as community members have become involved in all processes of water supply delivery, in particular concerning the need to pay for water in order to keep the water supply system operational. Given that the small towns component was to be a pilot effort, both for CWSA and for the Bank, and that the physical targets were by and large achieved, its rating as a component is satisfactory. Although its implementation lagged behind that of the rural water and sanitation component, the eight-month project extension ensured that the component would be able to complete its civil works and WSDB training. Its implementation resulted in a considerable spill-over effect: it demonstrated a strategy that has influenced other donors to implement similar projects across the country. Public and Private Sector Capacity Building Through this component of the project, the public sector, specifically GWSC, was supposed to shift from providing services to facilitating private sector provision of goods and services and community management. The private sector was to be encouraged to take the lead role in planning, construction, maintenance, and equipment distribution for water supply and sanitation facilities. In terms of the public sector, the greatest achievement was the creation by an act of Parliament of an autonomous agency, CWSA, charged with facilitating community water and sanitation provision across the country. By virtue of this act, the central government has eliminated its role of directly providing and managing services, and has transferred these responsibilities to the local government and communities. Within the CWSP-1 project period, CWSA opened and staffed offices in its ten regions, and trained many of its staff. With project support, CWSA also developed its accounting, procurement, disbursement, administrative and auditing procedures. As a new agency, CWSA is still improving upon its computerized management information system for financial management, monitoring and evaluation. Finally, CWSA has established itself as the sector leader in the country, hosting periodic regional stakeholder reviews, including annual software and technical policy reviews, bi-monthly donors' meeting and a donors' conference. As part of CWSP-1, CWSA was expected to transfer primary implementation responsibilities to RWSTs and District Assemblies (DAs). Although the RWSTs have proven that they can handle increasing responsibility, implementation responsibility was never transferred to the DAs. Under CWSP-1, all contracts were signed and managed by CWSA at the regional or national level. The greatest challenge now facing CWSA is successfully dealing with the change required to become a true facilitator rather than project implementor. CWSP-2 is designed so that all investment funds for subprojects will be directly managed by the communities and districts, leaving CWSA as a facilitator. At the District level, the project succeeded in getting water and sanitation on the agenda of the participating DAs. In all of these districts, water and sanitation teams (DWSTs) were formed. DWST staff were trained by the project and provided with equipment and logistical support. Most DWST staff showed high levels of commitment and a good knowledge of their communities. However, the support provided by the DAs to the DWSTs often left much to be desired. In addition, there was frequent turn-over of the DWST staff who could be transferred by their line ministries at any time. Strengths of the private sector, cited at the end of CWSP- I at the stakeholders' national workshop include improved technical skills and high levels of cooperation at the local level among communities and the - 8 -  private and public sectors. The national strategy of hiring a private Small Business Development Unit (SBDU) in each region proved to be a successful initial approach to capacity building. At the start of the project few Partner Organizations existed and by the close of the project, a number of POs were functioning in all four regions, also serving the needs of other projects. Through the project, other small enterprises that did not previously exist in the country were formed and trained, including hand-dug well contractors, small towns consultant firms and local small town civil works contractors. In terms of the small towns, the local consulting firms recruited to undertake community mobilization and training, water system design and construction supervision have built capacities in these activities. The public and private sector capacity-building component of CWSP-1 has been the force for institutional change in the rural water supply and sanitation sector in Ghana. To the extent that both private and public sectors have continually met development objectives during CWSP- I and are continuing to transition through CWSP-2, this component's outcome is rated as successful. 4.3 Net Present Value/Economic rate of return: The SAR generated an indicative economic rate of return (ERR) for four principal technologies to be offered to communities on a demand-driven basis (listed based on their rates of retum, highest to lowest): hand-dug well with bucket, hand-dug well with hand pump, piped system, and borehole with hand pump. Sensitivity analysis was conducted, varying the value of time and the distance walked to unimproved source relative to improved source. Given lack of available information about the validity, the source, and the base year of the original data on value of time, as well as its relationship to the shadow value of labor, no attempt has been made to recalculate the indicative ERRs at the end of the project. See Annex 3 for a more thorough treatment of economic costs and benefits. 4.4 Financial rate of return: The financial rate of return was not calculated in the SAR. There is a brief discussion of the unfeasibility of a centralized system for rural tariff collection. The national sector strategy is that a 5 to 10 percent contribution towards the capital cost is a practical measure of a community or small town's commitment to maintaining the system once it is operational. The SAR states that the community/small town's contributions can be paid in cash and in kind, corresponding to the value of labor that is contributed by the community/small town, but implementation of this kept contributions to a cash-only deposit. Despite an overwhelming demand for CWSP-1 services relative to delivery rates, there was no reevaluation of the 5 percent threshold within the CWSP-1 project period. CSWP-2 has raised the contributions to a 10 percent mix, with 5 percent contributed from the small town or community and 5 percent from the District Assembly. In addition, the DA will cover DWST operating costs, which they began to provide under CWSP-1. 4.5 Institutional development impact: The institutional development impact of the project has been substantial. CWSD did not exist before this project, and is now a separate agency (CWSA), with trained staff at head office and in regional offices. It provides leadership and coordination for the sector, and promotes adherence to and lesson-sharing on the national sector strategy. The Government now includes, in the annual budget of the Ministry of Housing, an allocation to cover the core costs of CWSA, thereby ensuring agency sustainability. DWSTs have been created in all 26 project districts. While DA support to DWSTs is not always at the desired level, these units are now seen as a regular part of district assembly structures and it is being increasingly recognized that they have an important role to play. Capacity building under the project significantly strengthened the local private sector. This is particularly -9-  true in the case of POs, several of which have expanded into other sectors or districts. Despite the progress made in starting-up many new companies, all stakeholders voice concern for long-term sustainability of the private sector once CWSA, supported by external interventions, is no longer a primary client. The project has promoted increased collaboration between stakeholders through project review meetings and sector fora focusing on technical and software issues. These activities have helped to increase understanding of the national strategy and encouraged joint discussion of issues raised during the implementation of the strategy. The concept of community management is well established and all donors are following the national strategy. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implemenlting agency: Difficulties in finding adequate groundwater resources delayed implementation, especially in the small towns, and reduced the production capacities of some systems. The drop in the water table has also affected the yield of hand-dug wells. 5.2 Factors generally subject to government control: Delays in payment of counterpart financing caused problems with the implementation of the small towns component for about eight months. This delay was especially critical as it came late in the project implementation period, thereby requiring a project extension. Similar problems with counterpart funding also affected the rural water component, and thus during some dry seasons (when drilling is done) communities and contractors were ready but drilling could not commence on time. 5.3 Factors generally subject to implementing agency control: The small town component was delayed from the start of the project. This problem was compounded by the subsequent lack of counterpart funds and the centralization of procurement at the national level. In addition, inadequate co-financing arrangements between the Government, World Bank and CIDA resulted in a lack of understanding of clear roles and responsibilities in the northern regions. Centralized procurement of handpumps also affected the pace of project implementation. Handpump procurement and distribution was delayed, in some cases for more than one year, due to the slowness of the one handpump supplier, who had a monopoly, in meeting his obligations. 5.4 Costs andfinancing: See Annex 2, which also includes a reference to co-financing provided by CIDA and KFW. 6. Sustainability 6.1 Rationale for sustainability rating: Rural Water and Sanitation Project sustainability is rated by the ICR team as likely. Participants at the national stakeholders workshop also rated sustainability of the rural water and sanitation activities as likely. Of the systems constructed under the project, 92 percent are still functioning (based on communities sampled in the BAS). There is a strong, supportive policy environment. A comprehensive national strategy which promotes sustainability has been in place since 1994 and is widely accepted. Government decentralization reforms support increasing roles for communities and districts, thus supporting local management of systems. Sustainability at the community level can be assessed in terms of financial, institutional and technical factors as well as consumer satisfaction with services. The BAS provides evidence of financial - 10 -  sustainability. Results indicate that the principle of paying for improved water is well accepted by rural communities. The percentage of households that contributed towards capital costs was 92 percent and those paying for O&M were 85 percent. Communities will continue to be monitored to assess whether they are putting aside enough funds for O&M and are able to fund major repairs. The water and sanitation committees are the most important institutional factor at the community level and the BAS found that they are functioning adequately. WATSANs are meeting regularly and about 91 percent of WATSANs meet with their communities at least four times a year to discuss the status of water systems. Ninety-four percent of WATSANs have bank accounts. Most WATSANs keep minutes, except in the Northern region, where literacy rates are low. As women are the main collectors and managers of water in the household, they have a strong incentive to keep improved, nearby water sources functioning. In the communities sampled by the BAS, 44 percent of WATSAN members are female (target was 30-40 percent). Furthermore, 28 percent of WATSAN vice chairpersons are women (with 69 percent in Brong Ahafo Region), as are 69 percent of treasurers and 47 percent of caretakers. Technically, the quality of construction is good in most communities, facilities are functioning adequately and community caretakers are trained and knowledgeable (the BAS found that 92 percent of facilities surveyed were adequately constructed and the same percentage were adequately functioning). BAS results show that beneficiary households in all districts are satisfied with the location of the water system, water quantity and quality, and the arrangements for fetching water. At the district level there are many concerns with the DWSTs. Many of the DWSTs no longer have functioning motorbikes, thus greatly diminishing their ability to visit communities for follow-up support. In the subsequent project, funds are available for district support, and these can be used to purchase or repair DWST motorbikes; however, in the long-run, the district will have to include the full costs of the DWSTs in its budget. Spare parts outlets exist in a majority of districts sampled in the BAS, although the availability of spare parts in the outlets varies from 22 percent in Western to 50 percent in Northern and 88 percent in Ashanti. One reason for the lack of spare parts is that as demand is still fairly low, merchants do not get much profit from stocking them. This should change as facilities age and more spare parts are needed. For the moment, with support from DANIDA and KfW, CWSA is establishing a bonded warehouse that will stock spare parts in Accra with retail outlets in Kumasi and Tamale, thereby ensuring that an ample supply is available in the country. A high proportion of WATSANs (92 percent of those surveyed in the BAS) indicated they have access to area mechanics, which is an important element of sustainability. Small Towns Water and Sanitation Sustainability for the small towns component is rated by the ICR team as likely (this is a preliminary assessment, as the systems have just been completed). Participants at the national stakeholders workshop also rated sustainability of the small towns activities as likely. There is a general willingness to pay for water and so long-term financial sustainability is probable, provided that water boards (WSDBs) maintain adequate tariffs and implement an acceptable level of financial management. Community members are very much aware of their responsibilities regarding their water supply projects and understand the need to pay for water to generate adequate funds to keep systems operational. Facilities Management Plans (FMPs) were prepared in each town to document the process of selecting the appropriate improved water supply system, establish capacity requirements, per capita cost, and overall financial plan, including community contribution to capital cost, and initial tariff. Overall average unit investment cost of the small towns component of CWSP-1 was $27 per capita. WSDBs used FMP-based - 1 1 -  exercises to calculate initial break-even tariffs, which are based on the annual volume of water sold. These incorporated annual O&M costs and included an allowance for bad debts. Within the O&M costs are included: energy, personnel and labor, maintenance, and repair costs, including depreciation. Sample break-even tariffs ranged from 113-435 cedi/m3 ($0.1/m3 at 1999 exchange rate). WSDBs were instructed to set initial tariffs at least 5-10 percent above break-even point to provide some margin of safety. Although WSDBs seemed to understand the basis for setting the tariff, sustainability will be based on their ability to calculate and implement changes in tariffs as prices increase. At the time of the small towns rapid assessment (several months prior to project closing), although most WSDBs showed enthusiasm and demonstrated knowledge of their responsibilities, many still needed to have more training before having adequate capacity to manage their systems. Further training took place before the closing of the project, with a focus on operations, maintenance, and financial management practices, including tariff setting, procedures, and customer management. Female membership of WSDB ranges from about 18 percent to 56 percent, with an average of 34 percent. CWSA also continues to explore private sector options for managing small town water systems, to be hired on a contractual basis by the WSDBs. As small town systems were completed towards the end of the project, it was premature to assess consumer satisfaction with services, although community members seemed enthusiastic about their water systems. CWSA and the district assemblies will need to monitor the small towns closely as they gain initial experience with managing their systems, to ensure that WSDBs are operating properly and receiving any needed technical or managerial guidance. Provisions have been made under CWSP-2 to continue with the training and monitoring, as required. 6.2 Transition arrangement to regular operations: As noted above, WATSANs have been functioning satisfactorily in most rural communities. However, as the physical works and final WSDB training for the small towns component were completed towards the end of the project, it is recommended that the Bank conduct further monitoring of this component, in combination with a CWSP-2 supervision mission. FurthermoTe, CWSA has developed a list of standardized monitoring indicators which each RWST will be required to track. Progress on this monitoring and evaluation (M&E) system will be monitored under the follow-on project. 7. Bank and Borrower Performance Bank 7.] Lending: Preparation of the project by the initial task tearn leader was an extension of a larger effort to develop and implement a National Community Water and Sanitation Strategy. As such, it was a pioneering effort in the region. Several other similar 'first-generation' demand-driven rural water and sanitation projects were being developed in parallel in other regions; the quality of the preparation of this project is high and similar to those of that vintage. Use of PPF funds to open the RWST office and launch two DWSTs in Brong-Ahafo region was noted as a clever 'mini-piloting' of that component. Thus efforts of the Bank with regards to lending is rated as satisfactory. 7.2 Supervision: Quality of task management over the life of the project was highly satisfactory, with only two task team leaders presiding, and considerable effort made to provide overlap by retaining key task team members throughout most of the period of the credit. The overall quality of the skills mix of supervision teams was good, although the small towns component of the project seems to have received less attention in terms of supervision input in the earlier stages of the project cycle. The task team leaders met service standards for - 12 -  submitting back-to-office reports and completing Project Status Reports. Senior management attention to the project, including that of the Country Director, was unusually attentive, and well received. Bank supervision faltered in a few minor areas: duing the June 1997 supervision mission, the objectives, outputs, and monitoring indicators for the project were reviewed, updated, and placed in a logical framework. This 'retrofitting' was not sufficiently woven into the latter half of the project, and a solid computerized monitoring and evaluation program was never fully implemented. Also, both Bank and borrower reported various issues with procurement, resulting in part from the extensive use of centralized procurement processes for implementing small works scattered across the country. 7.3 Overall Bank performance: Overall Bank performance was judged to be satisfactory. Borrower 7.4 Preparation: At the time of the preparation of the draft National CWS Strategy, the Rural Water Supply Department, located within GWSC, was staffed by a director and three professionals, who were hired to manage several projects throughout the country. This office was the precursor to CWSD, now CWSA. Significant ownership of CWSP- 1 was held by this department as well as by key players in the Ministry of Works and Housing. Given the significant lack of human resources available to provide input to CWSP-1 project preparation, the borrower nonetheless showed commitment in terms of working openly with the Bank to prepare a project that, in turn, would undertake significant institutional change as one of its components. The borrower's performance at preparation is thus rated as sadsfactory. 7.5 Government implementation perfornmance: Government commitment at the level of the Ministry of Works and Housing at the time of CWSP-1 start-up was to create CWSD in GWSC, which it did. The Ministry also fulfilled its obligation to pursue further national policy reform during the period of CWSP-1 implementation by creating CWSA and by establishing a Board of Directors for CWSA. With the exception of a delay in payment of counterpart funding in early 1999, the Government was also able to allocate counterpart contributions in a timely manner. Given the primary responsibilities as outlined above, government commitment can be characterized as satisfactory. 7.6 ImplementingAgency: CWSA, as the implementing agency, performed admirably, given a task to help facilitate a large infrastructure project in a decentralized manner while initially developing, and later, fully transforming its role as an institution. While CWSA exceeded all CWSP-1 physical targets, the level of decentralized facilitation of the rural community component to the District Assembly, as outlined in the CWSP-1 Implementation Manual, never fully occurred during most of the time-span of CWSP-1. At project start, CWSA had insufficient capacity to implement the sum of individual components of CWSP-I. Capacity has been built at both HO and RWST levels during the course of project implementation. CWSA performance through the course of CWSP-1 has been highly sadsfactory, due to the considerable and consistent efforts of CWSA management and staff. CWSA HO could have also benefited from more training in financial management, procurement, and small towns water and sanitation. 7.7 Overall Borrower performance: Overall Government of Ghana performance was sadisfactory, given the ambitious nature of CWSP-1. The Ministry of Works and Housing met its obligations and was actively involved in the supervision and monitoring of the project. CWSA staff have been extremely committed to seeing the success of the national - 13-  strategy, the project and their own agency. Overall, the borrower has a very keen, introspective sense as to how it performed well and poorly in CWSP-1, and these insights have been shared at length with Bank staff. 8. Lessons Learned The project was intended to demonstrate the national strategy, and it did indeed provide evidence that the main elements of the strategy can be effective. The lessons from CWSP-1 are being used to refine the national strategy and were incorporated into the design of CWSP-2. The lessons also have broader applicability to other rural water and sanitation projects supported by the World Bank. * Demand driven approach: the experience of the project illustrates that communities are capable of demanding and maintaining services and making their contributions to capital costs and O&M. The demand-driven approach also requires an adequate information campaign open to all communities, which outlines various technical options and associated costs along with the effective implementation of project rules in order for the financial policy to provide the right incentives for communities to select the levels of service which they are committed to sustain. * District role: There is an important role for districts in ensuring sustainability under the demand driven approach, and so district strengthening and support deserves an important emphasis. Review of the first year of the project concluded that DWST staff needed to be selected more on the basis of their communication and management skills than technical proficiency alone. In addition, districts should also be selected in response to their demand for participation in the program, as assessed against their other development priorities. Under CWSP-2, districts will compete to participate and will have to meet strict eligibility criteria. Procurement: Community and district-level contracting is important in the long-term since it establishes a commercial link and greater accountability between the community and the providers of goods and services, and allows the community to develop its capacity for procuring materials and managing contracts. This shows the importance of not only transferring decision-making, but also resources, if true decentralization and local accountability are to be achieved. Some of the small town contractors did not have adequate credit arrangements nor capacity for procurement planning, and should have either been more closely vetted, had smaller lots or received technical assistance, recognizing the pilot nature of the work. * Sanitation and Hygiene: Great attention needs to be paid to marketing and promoting a range of latrines, from the traditional to more expensive ones, in order for sanitation interventions to have a significant demonstration effect and influence demand. Recent studies indicate that unless 60 percent of households in a community have latrines, the health benefits will not be obtained. As a result, under CWSP-2, a subsidy will be provided (but less than that provided under CWSP-1), but only to communities where 50 percent or more of all households agree to obtain latrines. In order to fully integrate sanitation, hygiene and water activities, water must be integrated into the school latrine programs, so that children can wash their hands after using school latrines. The role of the government Education Service in school water and sanitation activities also needs to be clear. * Gender: With a strong emphasis and training on gender issues, it was possible for the project to promote significant inclusion of women in community management, along with men. The BAS indicated that most WATSANs have a good gender-balanced membership. Women regularly attend WATSAN meetings and are active participants. There is some regional variation in the extent of the - 14 -  roles women play on WATSANs, which can be due to cultural differences as well as the capacity of the PO in reaching out to all members of the community. CWSP-2 will continue to follow up on gender issues, to ensure that women's participation includes full involvement in WATSAN decision-making and positions of authority. * Training and extension activities: The strategy of using SBDUs to train existing POs and promote the growth of new ones worked well. Careful screening is needed when selecting POs for work with communities, to make sure that they are viable organizations and not ones that consist of part-time staff who also have regular, salaried jobs elsewhere. It is recommended that some training materials be prepared during project preparation and then adjusted immediately after implementation starts, to take into account local conditions. * Stakeholder consultation and coordination: CWSA has done a very good job at promoting consultation across the various stakeholders (the private sector, communities, districts, NGOs, donors, etc.) in order to evaluate the strategy and identify lessons. However, donor coordination is also extremely hard to achieve, even when there is a national program, since most donors prefer to have their own self-standing project, often tied to a given region. Despite CWSA's attempts at establishing an unified financial management and M&E system, many donors continue to manage their funds on a project basis, usually with a separate team of technical advisors. This truly is a challenge for CWSA, who must balance the reporting requirements of each donor with those of the Government. * Support to Community Management: Although WATSANs and WSDBs seem to be adequately managing the facilities on behalf of the community, they do need access to long-term support. In particular, financial management training of the WSDBs has to be reinforced on a continuous basis. In addition, CWSA and the districts must be in a position to provide guidance on tariff setting, and service upgrading to house connections and/or additional point source facilities. WSDBs, and to a lesser extent WATSANs, must also be encouraged to enter into contracts with the private sector to help in the management and operations of the water systems, as well as eventual system expansion. 9. Partner Comments (a) Borrower/implementing agency: CWSA completed its own evaluation report which is attached as Annex 10, and contributed to the Beneficiary Assessment and Stakeholder Workshop processes. In addition, CWSA provided comments on earlier drafts of this ICR. (b) Cofinanciers: Commentsfrom CIDA: Under CWSP1, GAP Phase H was a collaborative project between the World Bank and CIDA involving the rehabilitation of 20 small town systems with training and Community Development in the three Northem regions of Ghana. Overall the project was a big success. CIDA was proud to be associated with this collaborative effort. This was the first joint project between the World Bank and CIDA in the Northern regions of Ghana, many lessons were learnt from this exercise which should be used in future collaboration to strengthen partnership in order to meet the needs of the communities in a cost effective, sustainable manner. CIDA supports and is prepared to consider co-ordinated, collaborative approaches, and partnerships for delivering projects in the Northem regions of Ghana to meet the development needs of the recipient country. Being part of CWSP 1 was an excellent experience for CIDA. - 15 -  Comments from KJW: KfW has equally undertaken an assessment of project implementation for the German financial contribution to CWSP1 (FC project Rural Water and Sanitation Programme II). Overall, main findings, conclusions and lessons leamt are very much in line with the IDA report. However, the assessment of sustainable O&M has to be preliminary due to the lack of long-term experience with the VLOM-concept under comparable conditions. First results on institutional, technical and financial aspects (refer to the full reports of the BAS and stakeholder workshops) are mixed, partly promising, partly requiring further action, such as capacity-building, post-implementation monitoring and evaluation, on all levels: communities, districts, private sector, CWSA, government and ESA. Project impact and sustainability should be therefore analyzed once more in a few years, as systematically done in German FC through ex post evaluations, when O&M comes to a critical stage with increasing technical and financial requirements for repair and replacement depending on the efficiency of day-to-day operation and preventive maintenance. As a result, KfW fully supports the transition arrangement to regular operations (ICR 6.2) and provisions made under CWSP-2 to continue IDA support for training, monitoring etc.. However, these provisions still need further discussion and coordination to be implemented. Further, it is recommended to concentrate donor and sector coordination on sustainability issues and to launch an intensive learning process. In addition to this summary, KfW has included more detailed comments and forward-looking actions to monitor and support sustainability issues. These comments are available in the World Bank and CWSA files. (c) Other partners (NGOs/private sector): Not applicable. 10. Additional Information The BAS results indicate that both the poor and non-poor have access to improved water services under the Demand Responsive Approach used by the project. In the communities surveyed by the BAS, 88 percent of the poor households contributed to the capital costs (as compared to 96 percent of non-poor households) and 85 percent of poor households were paying O&M (versus 89 percent of non-poor households). Ninety-six percent of poor households surveyed were using improved water compared to 98 percent of non-poor households. Seventy-three percent of poor households found the O&M rate to be acceptable, as compared to 79 percent of non-poor households. Ninety-one percent of poor and non-poor households felt that paying for water was a good principle, and 81 percent of poor households and 82 percent of non-poor households said they would continue to pay for water. Thus poverty does not seem to be a significant factor affecting access to and sustainability of water facilities. - 16 -  Annex 1. Key Performance Indicators/Log Frame Matrix Summary Key Performance Indicators Actual DEVELOPMENT (At Appraisal) Targets NOT achieved are in OBJECTIVES italics Improved living conditions > 450,000 people have > 320,000 rural inhabitants have in rural communities and improved, sustainable water access to new water points small towns through facilities in 500 rural communities > 120,000 residents have sustainable water and and 30 small towns by June 1999. improved water in 29 towns sanitation facilities > about 780,000 rural users manage their water point (conversion) > 20,000 people have > 6000 household latrines have improved household sanitation been constructed, serving about facilities in villages and small towns 36,000 people by June 1999. PROJECT OBJECTIVES AND OUTPUTS 1. Communities effectively plan, manage and use their water and sanitation facilities Communities demand > Communities pay 5% of the BAS survey shows: facilities and prepare capital cost before construction and > 92% of households paid their Facilities Management all O&M costs. share of capital cost Plans > Communities decide the type > 85% of households are paying of system they want and how to their share of O&M manage it. > 62% of rural communities > Women are actively involved initiated project in highly in all stages of planning and participatory manner managing their facilities. > 44% of WATSAN members and 34% of WSDBs are female (target was 30-40%) > 100% of rural and small towns have selected how to manage facilities Communities manage > Communities establish BAS survey shows: their facilities WATSANs and WSDBs. > 54% of WATSANs meeting > Communities manage their > 94% have bank accounts water supply facilities - i.e., operate, > 72% keep written financial maintain, collect revenues, keep records records and accounts, evaluate and > 92% of rural facilities are resolve problems, and enter into adequately functioning service contracts. -17 -  Improved health and > Improved water facilities are BAS survey shows: hygiene practices operational and used by everyone > 92% of CWSP-l rural throughout the year. community source points are > Water outlets are kept clean adequately functioning and 92% with no ponded water. were adequately constructed. > Latrines are used, kept clean > 96% of poor and 98% of and adequately separated from water non-poor use improved water source sources. > 84% store water in clean > All individuals in the containers, 64% of storage community use better hygiene and containers have a lid, 50% use water use practices. separate cups for scooping water and drinking > 83% wash hands after visiting 2. Private sector provides goods and services. Partner Organizations CWSA data show: (POs) and local > I qualified PO per district. > 32 POs in 26 participating consultants assist > I qualified small towns districts communities to plan and consulting firm per region - > I consultant in each of 3 manage their facilities > 4 firms provide borehole southern regions siting and construction supervision > 3 sitingfirms used services. Contractors construct > 6 qualified hand dug well > 32 qualified HDW contractors facilities contractors per region (24 total) > 4 drillers working > I drilling rig per region (4 > 481 latrine artisans trained in total) 26 districts > 10 qualified latrine artisans per district. Equipment distribution > 800 hand pumps supplied, > 1050 handpumps supplied, and maintenance services installed and warrantied by local installed with warranty established. distributor with spare parts outlets > 65 mechanics trained available in all districts. > No private piped-systems > 2-3 hand pump mechanics operators are yetfunctioning per district trained and equipped. > 2 private piped-system operators per region. 3. Public sector facilitation District Assemblies > District water and sanitation > 26 district programs in provide support to programs established in all regions CWSP-1 regions and 82/110 communities through > DA members knowledgeable nationwide District Water and about their water and sanitation > all DAs knowledgeable, Sanitation Programs program confirmed through supervision visits > Permanent institutional > 26/26 DAs with active DWSTs framework (DWST) and budget security. > DWST members competent in their area of specialty - 18 -  Government facilitates the > An autonomous national > CWSA has been established process through a National community water and sanitation through Act of Parliament Community Water and organization established with > Offices are operational and Sanitation Program multidisciplinary teams in all fully staffed in all regions regions. > CWSA Board appointed, with > CWS Organization governed representative stakeholder board by stakeholder board and able to > Partial management fee is attract external financing for services being pilot tested by IDA under provided. CWSP-2 )- Policies and guidelines as > Policy in place and adopted by well as a sector investment program all donors, NGOs and other supported by all stakeholders. stakeholders > Monitoring and evaluation > M&Eproceduresfor CWSA framework developed to improve the still beingfinalized. National CWS Program. PROJECT COMPONENTS Water supply in rural > 1000 new water points > 1288 new water points communities and small installed. installed towns > 2500 existing hand pumps > 2610 conversions completed shifted to community management > 29 systems completed under > 30 small town systems CWSP-2 installed Household and > 4000 household and 250 > 6000 household latrines institutional latrines in school and health facility latrines > 70 school and health facility rural communities and constructed latrines constructed small towns > Teachers from 250 schools > Teachers from 140 schools trained in health and hygiene trained in health and hygiene Capacity building > All stakeholders are > All stakeholders are fully sufficiently informed of the National informed of NCWSP and participate CWS Program in regional and national fora > All stakeholders at organized by CWSA community, district, regional and > Annual NGO conference and national levels trained and equipped. donors conference have been > All stakeholders performing institutionalized their defined roles effectively > Strategy has been replicated by > All stakeholders working all donors and NGOs across all 10 together as partners regions, using same roles for private and public sector actors. - 19-  Annex 2. Project Costs and Financing Project Cost by Component (in US$ million equivalent) Apprais l Actua lLatest Perce sa le o 0 :Xj:f! ;;:f0\; ;;C00^0:000 0: : ;;: 0:;S :0 EsS0timat0-e: Esimt t :d .:f:0 i00Appraisal Project Cost B' Compon ,t U $m:illion US$ million Rural Water and Sanitation 7.94 8.35 105 Small Towns Water and Sanitation 8.87 4.45 50 Capacity Building for Public and Private Sector 5.96 12.07 203 (Actual costs include Training & Consultants, Operating Costs,Community Development and Staff Retrenchment) PPFlUnallocated 0.55 0.18 33 Total Baseline Cost 23.32 25.05 Physical Contingencies 1.27 Price Contingencies 2.41 Total Project Costs 27.00 25.05 Total Financing Required 27.00 25.05 IDA-FINANCING Category Description Allocation (US$ Disbursed Amount million) (US$ million as of January 24, 2001 Civil Works 8.55 7.93 Goods and Equipment 3.18 3.08 Training and Consultants 7.73 7.40 Operating Costs 1.66 1.78 Refinancing PPF 0.18 0.18 Staff Retrenchment 0.42 0.28 Categories 1-4 0.00 Unallocated 0.22 0.00 Total 21.96 20.66 * There were savings at the very end of the project, especially in the small towns civil works due to the devaluation of the cedi. Co-financing * CIDA: US$1.7 million cost sharing was included in the original financing plan of the project (Project Cost Table) to cover the costs for the design, construction supervision and community development of 20 small towns in the northern regions. These funds were managed directly by CIDA and are not included in the actual costs. Actual expenditures are estimated to be US$2.6 million. * KfW: US$3.1 million of parallel funding was provided by KfW for the rural water and sanitation component of the project, through an agreement signed after the project had become effective. These - 20 -  funds were jointly managed by KfW and CWSA through a different project account than that used for the IDA funds. KfW funds were used for the construction of 270 boreholes equipped with handpumps, and the rehabilitation of 861 boreholes (350 of which were in CWSP-1 regions) as well as support to setting up a maintenance system. Actual disbursements were $2.31 million, and the additional funds are still available for further borehole development in areas of water quality problems. Government and Comnmunity These contributions to the project are estimated at $3.9 million, about $600,000 more than anticipated at appraisal. -21 -  Annex 3: Economic Costs and Benefits Economic analysis conducted at appraisal for CWSP- 1 used an "indicative economic rate of return" rate of return methodology, which used a combination of capital cost outlay, recurrent cost outlay, time savings, and the value of time to four principal technologies: hand-dug well with bucket, hand-dug well with pump, borehole with pump, and piped system. Economic analysis conducted in preparation for CWSP-2 switched to a cost-benefit analysis methodology, retaining similar capital and recurrent cost, time saving, and value of time variables. This analysis added an element of a discount rate, and was able to ascribe values to technologies, so that at the time of CWSP-2 appraisal in 1999 the net present value of a borehole was $758 and that of a hand-dug well was $1,602. The economic rate of return for CWSP-2 was estimated at 18-35%. As CWSP-2 does not differ significantly in terms of the Facilities Management Plan cost breakdown (technologies explained to communities, etc.) than that which was in effect at the end of CWSP-1, it can be argued that this estimate of ERR for CWSP-2 might also be an estimate of ERR for CWSP-1. - 22 -  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 02/1991 1 1 TL/FNA 05/1991 4 1 TL/FNA, 1 SE, 2 CON 12/1991 1 1 T1/FNA 03/1992 1 1 TL/FNA 10/1992 1 1 TL/FNA 02/1993 2 1 SE, 1 FNA Appraisal/Negotiation 03/1993 1 1 TL/SE 06/1993 5 1 TL/SE, I FNA, 1 WSS, 2 CON Supervision 10/1993 2 1 TL/SE, 1 FNA S S 04/1994 4 1 TL/SE, 1 WSS, 2 CON S S 07/1994 5 1 TL/SE, 1 FNA, 1 UFNA, 1 S S WSS, 1 CON/TRG 12/1994 4 1 TL/SE, 2 WSS, 1 CON/TRG S S 07/1995 3 1 TL/SE, 1 WSS, 1 CON/TRG S S 11/1995 4 1 TL/SE, 2 CDS, 1 ENG S S 04/1996 7 1 TL/SE, 1 ENG, 1 WSS, 1 S S HYDR,2 IS, 1 CON/TRG 11/1996 4 1 TL/SE, 1 ENG, 1 WSS, 1 S S NGO 06/1997 4 1 TL/SE, 1 G&PS, 1 ENG, 1 SE S S 11/1997 6 1 TL/SE, I SE, I G&PS, 1 NGO, S S 1 WSS, I ENG 03/1998 3 1 TL/SE, 2 WSS S S 08/1998 6 1 TL/SE, I G&PS, I SE, 1 NGO, S S 1 SPS, 1 WSS 11/1998 12 1 TL/SE, 1 NGO, I G&PS, 1 S S lHES, 2 WSS, I CON, I PROC, I FMS, 1 INST, I ENG, I SM 03/1999 3 1 TL/SE, 1 WSS, 1 TA/FMIS S S 07/1999 5 1 TL/SE, 1 INST, 1 G&PS, 1 S S WSS, I PA 10/1999 5 1 TL/SE, 1 WSS, 1 INST, 1 S S PROC, 1 FMS, 1 FIELD 06/2000 4 1 TL/SE, 1WSS, ENG, PROC S S ICR 02/2000 5 1 ECN, 1 G&PS, 1 WSS, 1 S S PA, 1 CON/CAP 09/2000 4 1 G&PS, I ECN, 2WSS, S S -23 -  TL - Team Leader; SE - Sanitary Engineer; FNA - Financial Analyst; ENG - Engineer; WSS - Water & Sanitation Specialist; G&PS - Gender & Participation Specialist; INST - Institutional Specialist; ECN - Economist; FMS - Financial Management Specialist; HES - Hygiene Education Specialist; SM - Sector Manager; PROC - Procurement Specialist; NGO - NGO Specialist; TRG - Training Specialist; UFNA - Urban Financial Analyst; TA - Team Assistant; FMIS - Financial Management Information Specialist; PA - Program Assistant; FIELD - Field Staff; SPS - Social Protection Specialist (b) Staff: Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ (,000) Identification/Preparation 48 125 Appraisal/Negotiation 49 125 Supervision 160 540 ICR 23 70 Total 280 860 - 24 -  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 Z Sector Policies * H OSUOM O N O NA Z Physical O H *SUOM O N O NA Z Financial O H OSU*M O N O NA Z Institutional Development O H * SU O M O N 0 NA Z Environmental OH OSUOM O N * NA Social V Poverty Reduction O H *SUOM O N O NA Z Gender OH *SUOM ON ONA M Other (Please specify) 0 H O SU O M 0 N 0 NA Hygiene * Private sector development 0 H 0 SU O M 0 N 0 NA * Public sector management 0 H 0 SU O M 0 N O NA O Other (Please specify) 0 H O SU O M 0 N 0 NA - 25-  Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 61 Bank performance Rating Z Lending OHS OS OU OHU M Supervision * HS O S OU OHU [Z Overall OHS OS OU O HU 6.2 Borrower performance Rating Z Preparation OHS OS O U O HU M Government implementation performance O HS O S 0 U 0 HU Z Implementation agency performance OHS O S 0 U 0 HU Z Overall OHS OS O U O HU - 26 -  Annex 7. List of Supporting Documents Staff Appraisal Report Back to Office Reports, Aide Memoires, and Project Status Reports CWSP-1 Implementation Manual Mid-Term Review of CWSP-1 Impact Assessment of Community Water and Sanitation Projects in periphery of CWSP-1 area Joint World Bank/CWSA Rapid Field Assessment Beneficiary Assessment Survey CWSP- 1 Western, Ashanti, Brong-Ahafo, and Northern Regional ICR Workshop Reports CWSP- 1 Small Communities National ICR Workshop Reports CWSP- 1 Small Towns National ICR Workshop Reports CWSA ICR CWSP-2 Implementation Manual and Preparation Studies CIDA correspondence, including more detailed comments on the ICR KfW correspondence, including more detailed comments on the ICR -27 -  Annex 8. Beneficiary Survey Results This annex was prepared jointly by CWSA and the World Bank. In accordance with the Intensive Leaming Model (ILM) version of the Implementation Completion Report, a Beneficiary Assessment Survey (BAS) was conducted at the end of the CWSP-1 project. This was an exercise which was designed by a joint WB/CWSA ICR team, which also co-wrote the terms of reference by which the exercise was conducted by a private sector consulting firm resident in Ghana. The joint team completed a pre-test of the hypotheses and the questionnaires to be used in the beneficiary assessment in an exercise known as the Rapid Field Assessment, took place during the period March 2-10, 2000. The Rapid Field Assessment was pre-tested in 28 communities and 88 households. A consultant was then hired to refine the questionnaires and carry out the BAS field work in order to prepare the BAS findings for the regional and national stakeholders workshops, which was held at the end of August, 2000. This allowed the stakeholders an opportunity to agree or disagree with any of the technically or regionally specific characterizations given within the BAS report. The BAS sampled a total of 66 communities, 42 of those CWSP-1 beneficiaries and 24 non-participants in CWSP-1, and 318 households. It should be highlighted that the beneficiary assessment chose to selectively assess the rural-community CWSP-1 participants, and thus did not interview small-town beneficiaries. As completion of the small town component was late relative to the rural communities component, assessing the benefits of CWSP- 1 to small-town residents was deemed to be premature. The beneficiary assessment limited its initial sample selection within CWSP-1 to districts who had been deriving benefits from improved water sources for more than two years. From this sample, two districts were randomly chosen per region, and from within each district, beneficiary communities were randomly selected to represent 20 percent of total number of beneficiary communities in that district. Communities which applied for an improved water source, but which were not selected, and communities which did not apply at all, were both sampled as control groups in the study. Three categories of hypotheses were tested in the beneficiary assessment survey: poor versus non-poor differential access to improved water sources; sustainability (institutional, financial, technical factors, etc.), and improved hygiene knowledge and practices. The consultant used a variety of survey instruments to capture information, including focus group discussions, data sheets, checklists, coded questionnaires, and an abbreviated version of the Ghana Living Standards Survey (GLSS) to determine poor and non-poor households. These GLSS indicators related to levels of education, usage of health care providers, level of employment, and types of household assets and amenities. Specific data from the BAS appear in the main text of the ICR where possible in order to provide quantitative detail. However, this annex provides an overview of the results from the BAS in order to gain knowledge from the exercise and represent the compiled views of the stakeholders as best possible in this survey format. The main results of this study include: * Most generally speaking, BAS survey results substantiated initial findings from the Rapid Field Assessment. * There also seems to be little, e.g., statistically significant, variations in answers to questions on any of the three main hypothesis (poverty, sustainability, hygiene), across the four regions of CWSP- 1. * There seems to be little if any differential access to improved sources of water for poor versus non-poor households. - 28 -  Use of Water by Poor and Non Poor Poor Non Poor Access to Improved Water 96 98 Access to Borehole 90 73 Access to HDW 12 26 Drink Improved Water 86 95 Wash with Improved Water 92 96 Bath with Improved Water 93 97 Cook with Improved Water 90 95 0 Similarly, there are little differences between poor and non-poor in terms of their ability to contribute to capital costs and operations and maintenance costs (O&M). 88% of the CWSP-1 beneficiaries determined to be "poor" contributed to capital costs and 85% are paying for O&M. As for the CWSP- I determined to be "non-poor", 96% contributed to capital costs and 89% are paying for O&M. Poor and Non Poor Payment for Water Payment/Assessment Poor Non Poor % Yes % Yes Paid Capital Cost 88 96 Pay O&M 85 89 Is O&M Affordable? 73 79 Is Payment Good Idea? 91 91 Will You Continue to Pay? 81 82 * Poverty did not seem to be the primary determinant for not having been selected as a CWSP-1 beneficiary community, or not having submitted an application. Demand for facilities was high, and several non-beneficiary communities interviewed were not informed of the program in time to prepare applications. * Rural communities are consistently demanding boreholes rather than hand-dug wells as sources of improved water. * Some CWSP-1 community members are continuing to use unimproved sources of water (but not for drinking). - 29 -  Use of Improved Water Use (Percent) Region Drinking Washing Bathing Cooking Western 97 95 95 87 Ashanti 97 99 99 97 Brong-Ahafo 92 93 93 91 Northern 100 88 97 100 * All CWSP- I districts surveyed are showing high likelihood for financial and institutional sustainability. These likelihood indices are based on the following factors: percentage of community contributing to capital cost, percentage of community contributing to O&M, operational bank accounts and accounting systems, well-functioning WATSAN committees, regularly scheduled committee meetings, gender parity in WATSAN committees, and regularly kept committee meeting notes. Percent of WATSAN with Account and Account Balance Region % With Account Amount in Account (