India - Up & Uttaranchal Rural Water

 ICRR 11666 Report Number : ICRR11666 ICR Review Operations Evaluation Department 1. Project Data: Date Posted : 02/13/2004 PROJ ID : P010484 Appraisal Actual Project Name : Up & Uttaranchal Rural Project Costs 71.0 48.6 Water US$M ) (US$M) Country : India Loan /Credit (US$M) Loan/ US$M ) 59.6 40.7 Sector (s): Board: WS - Sanitation Cofinancing (35%), Water supply US$M ) (US$M) (35%), Sub-national government administration (16%), Other social services (14%) L/C Number : L4056 Board Approval 96 FY ) (FY) Partners involved : Closing Date 05/31/2002 05/31/2003 Prepared by : Reviewed by : Group Manager : Group : Robert C. Varley John R. Heath Alain A. Barbu OEDST 2. Project Objectives and Components a. Objectives According to the Staff Appraisal Report (SAR), the development objectives of the Rural Water Supply and Environmental Sanitation (Swajal) Project) were to: 1. Deliver sustainable health and hygiene benefits to the rural population through improvements in water supply and environmental sanitation services, which will increase rural incomes through time savings and income opportunities for women, test an alternative to current supply -driven service delivery and promote sanitation and gender awareness. 2. Promote the long -term sustainability of the rural water supply and sanitation (RWSS)RWSS ) sector by providing assistance to the Government of Uttar Pradesh (GOUP) to identify and implement a policy framework and strategic plan. These have been re-arranged to better fit the multiple-objective structure of this complex project as elaborated in the SAR. Health was not at the top of the hierarchy of benefits, although this had been a feature of many traditional WSS projects. The objectives were to: 1. deliver sustainable benefits to the project beneficiaries by providing sustainable health and hygiene benefits to the rural population improving water supply (quantity, quality, equity, reliability, coverage and access ) and environmental sanitation services; increasing rural incomes through time saving ; promoting sanitation and gender awareness; 2. promote long -term sustainability of the rural water supply and sanitation sector by : testing a demand-driven alternative to current supply -driven service delivery; and identifying and implementing an appropriate policy framework and strategic plan for the sector in the two states b. Components Appraised and actual costs were $ 71.0 million / $48.6 million respectively, comprising: A. Strengthening and operation of the Project Monitoring Unit (PMU) and District PMUs (DPMU) - 12% / 20% B. Selection and construction of water supply and environmental sanitation facilities for single and regional schemes - 85% / 74% C Studies and sector development - 3% / 7% c. Comments on Project Cost, Financing and Dates The latest estimate for selection and construction costs is $ 35.78 million - only 60% of the appraisal figure of $60.21 million. Between June 2000 and completion there were two cancellations reducing the laon amount by $ 18.9 million. Cost savings were attributed to users' choice of cheaper low -technology gravity-fed options, favorable exchange -rate movements and more efficient procurement . Completion was delayed by one year, largely as a result of the bifurcation of UP into UP and Uttaranchal (UA.) From 2000 there were two sub-projects, each with its own administration, costs, performance monitoring and lines of accountability . 3. Achievement of Relevant Objectives: Objective 1 was achieved : Performance indicators for health and hygiene benefits showed large and significant improvements for both UP and UA. These included reduced incidence of diarrhoea in under -fives, better handwashing practices, safe disposal of infant excreta and safe use of water . The project inculcated the habit of using latrines, achieving 99% usage compared to the 50% target. Coverage for water supply exceeded targets by 1,214 to 1,000 villages, and 992,000 to 785,000 people. Operations have been sustained at 87% of village sites, compared to an appraisal target of 85%. 40 liters per capita per day can now be supplied, as planned . Latrine coverage rose from 4% to 29% in UP and 16% to 63% in UA project villages, Projected incremental cash-income from the time freed-up by the release of women from carrying water, was overestimated. But participation in other valuable activities such as self -help groups, child-rearing, community support, and operation and maintenance (O&M) of water supply systems, was facilitated . Planned female and minority participation, at all levels of organization, was exceeded - for instance 38% of membership in the village water supply committees (VWSC) was female (33% target), and 30% was from scheduled castes/tribes (target 20%.) Extensive awareness, communications and social marketing programs had a strong influence on hygiene practices . Objective 2 was partially achieved : Implementation experience, supported by 40 commissioned studies, was an adequate basis for promoting the demand-led approach and the state (and central) government acknowledged the project's crucial role in developing the new RWSS policies . Policy frameworks and strategic plans were produced for the two states, but the new policy was not wholly appropriate when evaluated against project experience and lessons learned . New state policy reflects the swajal design, but for replication relies on a quasi -line agency (Jal Nigam JN) and established village-level Panchayat Raj Institutions (PRI), substituting for NGOs and private sector organizations . Based on the SAR method and assumptions, counting hardware (HW) and software (SW) costs of component B only, the economic rate of return (ERR) was 19.5%, compared to 26% at appraisal. Adjusting for overestimation of the value of time savings and including all overheads (components A and C), the ERR was still a satisfactory 13.2%. 4. Significant Outcomes/Impacts: The project approach was innovative and relevant, gaining support and approval at a time of stagnation in the sector, and a "huge resistance" from supporters of the traditional design. "Swajal", a Hindi word, became identified with this particular demand -responsive and community-driven approach. The project was a crucial driver for the political process which gave birth to a national sector reform program, and the Swajaldhara Project (SP) in 67 districts and 27 states. The Government of India (GOI) has allocated 20% of rural water supply funds to SP, which came into effect in December 2002. The project demonstrated the viability of using NGOs, and other support organizations (SOs) to increase the capacity of rural communities to plan, implement and maintain their water supply and sanitation systems.The GOI Planning Commission named the Swajal Project one of the most successful governance initiatives from Indian States. The VWSCs in project villages now have full responsibility for O&M of water supply systems, with wide participation from villagers of both sexes in the planning, construction and operation of the facilities . This was a big change in institutional arrangements . Administration was more cost-effective than traditional programs and staff salary costs were only 12 percent of project resources. UPJN, a quasi line-agency that implements rural water supply and sanitation projects, spends 35% of its resources on salaries . Conversely UP-JN capacity building costs are much lower than the 20 percent of the budget spent by the project . Project communities pioneered the use of an insurance scheme against natural disasters. This covered 112 VWSCs and over a 3 year period, 33 claims have been settled and the funds used to repair water systems and make them functional again. Sanitation and rural water supply have finally been combined in one government department . 5. Significant Shortcomings (including non-compliance with safeguard policies): The objectives were too broad and should have been simpler, focusing on the main project outcome and facilitating delivery of focused, regular and accurate monitoring and reporting . The basic project principles may be diluted by the scale -up strategy, reducing the scope of villagers to choose the agency for supplying materials and executing the projects under the program . The parallel institutional arrangement for the Swajal Project revolved around partnership between : (a) an autonomous registered society at state level (PMU); (b) NGOs at the district/sub-district level; and (c) communities at the village level. The new UP rural water supply policy incorporates a different kind of parallelism, public providers (JN/Jal Samsthan) playing a greater role in management and implementation . Neither played a significant role in the project, and both are overstaffed and centralized organizations, ill -equipped to play the SO role. Use of the JN and PRI will demand high capacity building costs for the implementers themselves, and not directly address past poor  performance by JN on RWSS projects . The project villagers are a better source of the knowledge and skills needed for replication. There is also doubt that the Gram Panchayat (GP) would allocate sufficient resources for "soft" activities. 6. Ratings : ICR OED Review Reason for Disagreement /Comments Outcome : Satisfactory Satisfactory Institutional Dev .: Substantial Substantial Sustainability : Likely Likely Bank Performance : Satisfactory Satisfactory Borrower Perf .: Satisfactory Satisfactory Quality of ICR : Satisfactory NOTE: NOTE ICR rating values flagged with ' * ' don't comply with OP/BP 13.55, but are listed for completeness. 7. Lessons of Broad Applicability: The main strength of the Swajal approach is transparency, from pre -feasibility stage to O&M, by the dissemination of the maximum amount of information through all media . Partnership between village communities and NGOs the private sector and government (acting as facilitator and co-financer), is a feasible and effective strategy for improving decentralized RWSS access and service quality . The project model is most easily implemented by neighbourhoods that are physio -graphically and socially interdependent, than to attempt to service entire village adminstrative areas . RWSS programs require components to support water resources management activities, such as catchment protection, drainage and regulation of groundwater use . Because of cheaper low-technology, gravity systems were preferred to higher technology, powered pump schemes. Choice of technology was also strongly influenced by : (a) ease of operation and maintenance; (b) safety and adequacy of water sources; (c) reliability and cost of power supply; and (d) the dominance of male household members in financial decision -making. Using performance-based compensation systems and recruiting from NGOs, public and private sectors . helped to maintain high rates of retention of competent staff in the PMUs and DPMUs . 8. Assessment Recommended? Yes No Why? This is a pivotal project for the Bank and it is important, given the scope for future investment, that the conclusions of the ICR be independently evaluated . 9. Comments on Quality of ICR: The main ICR was satisfactory but not really a standalone document - it required time to pursue the sector and institutional background, which was not well explained . While relevant, many of the 14 annexes were too long, apparently not edited, and overdetailed . More detail on maps, local terms, village administration and governance systems, would have been useful . Basic survey methodologies and the confidence to be placed in the results, were not discussed. The annexes are packed with undefined acronyms, making much of the text only partially intelligible . Annex 6 contains no ratings, and Section 9, on Partner Comments, refers to a nonexistent paragraph 4.2.12. The overall quality is barely satisfactory and fails to do justice to the complexity and importance of this major project .