Tanzania - Urban Sector Rehabilitation Project

Document of The World Bank Report No: 32225 IMPLEMENTATION COMPLETION REPORT (PPFI-P9020 PPFI-P9021 IDA-28670 TF-23043) ON A CREDIT IN THE AMOUNT OF SDR 72.3 MILLION (US$105.0 MILLION EQUIVALENT) TO THE UNITED REPUBLIC OF TANZANIA FOR THE URBAN SECTOR REHABILITATION PROJECT June 7, 2005 Water and Urban 1 Tanzania & Uganda Country Department Africa Regional Office  CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2004) Currency Unit = Tanzania Shillings Tsh 1 = US$ 0.0010 US$ 1 = Tsh 1050 FISCAL YEAR July 1 - June 30 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CIP Community Infrastructure Program CIUP Community Infrastructure Upgrading Program DAWASA Dar es Salaam Water and Sewerage Authority GoT Government of Tanzania IDA International Development Association ICR Implementation Completion Report ISS Institutional Strengthening Strategy KfW Kredit Anstalt fur Wiederaufbau MC Municipal Council NSGRP National Strategy for Growth and Reduction of Poverty O & M Operation and Maintenance PHRD Policy and Human Resources Development PICU Project Implementation and Coordination Unit PIU Project Implementation Unit PMU Project Management Unit PMO Prime Minister's Office PO-RALG President's Office Regional Administration and Local Government QAG Quality Assurance Group QSA Quality of Supervision Assessment SAR Staff Appraisal Report USEP Urban Sector Engineering Project USRP Urban Sector Rehabilitation Project UWSA Urban Water and Sewerage Authority Vice President: Gobind T. Nankani Country Director: Judy M. O'Connor Sector Manager: Jaime M. Biderman Task Team Leader: Solomon Alemu  TANZANIA URBAN SECTOR REHABILITATION 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 7 5. Major Factors Affecting Implementation and Outcome 17 6. Sustainability 20 7. Bank and Borrower Performance 21 8. Lessons Learned 23 9. Partner Comments 24 10. Additional Information 24 Annex 1. Key Performance Indicators/Log Frame Matrix 25 Annex 2. Project Costs and Financing 27 Annex 3. Economic Costs and Benefits 32 Annex 4. Bank Inputs 43 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 45 Annex 6. Ratings of Bank and Borrower Performance 46 Annex 7. List of Supporting Documents 47 Annex 8. Borrowers Contribution 48 MAP IBRD No. 26878  Project ID: P002758 Project Name: Urban Sector Rehabilitation Project Team Leader: Solomon Alemu TL Unit: AFTU1 ICR Type: Core ICR Report Date: June 7, 2005 1. Project Data Name: Urban Sector Rehabilitation Project L/C/TF Number: PPFI-P9020; PPFI-P9021; IDA-28670; TF-23043 Country/Department: TANZANIA Region: Africa Regional Office Sector/subsector: General water, sanitation and flood protection sector (48%); Roads and highways (30%); Central government administration (11%); Sub-national government administration (11%) Theme: Access to urban services and housing (P); Municipal finance (P); Municipal governance and institution building (P); Other financial and private sector development (S); Participation and civic engagement (S) KEY DATES Original Revised/Actual PCD: 12/07/1994 Effective: 08/23/1996 05/06/1997 Appraisal: 04/24/1995 MTR: 03/01/1999 03/01/1999 Approval: 05/23/1996 Closing: 06/30/2004 12/31/2004 Borrower/Implementing Agency: GOVT/PRESIDENT'S OFFICE - REGIONAL AND LOCAL GOVERNMENTS Other Partners: STAFF Current At Appraisal Vice President: Gobind T. Nankani Callisto E. Madavo Country Director: Judy M. O'Connor James W. Adams Sector Manager: Jaime M. Biderman Stephen Weissman Team Leader at ICR: Solomon Alemu Gerhard Tschannerl ICR Primary Author: Solomon Alemu; Ephrem Asebe 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: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S 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 Urban Sector Rehabilitation Project (USRP) consisted of a large program of infrastructure rehabilitation works and institutional reform activities covering eight project towns in Tanzania (Arusha, Iringa, Morogoro, Mbeya, Moshi, Mwanza, Tabora, and Tanga) as well as Dodoma and Dar-es Salaam. The investments in Dodoma and Dar es Salaam were of limited scope and complexity compared to those in the other eight towns. The project became effective on May 6, 1997 and closed on December 31, 2004. The project objectives were sustainable economic development and urban poverty alleviation through: (a) rehabilitation of the basic infrastructure and expansion into high priority, under-served areas, and (b) improvement of urban local government management and financing capacity by (i) strengthening the financial, technical and overall operations of the urban local authorities through training and technical assistance, and (ii) encouraging private sector and community involvement in urban services delivery and operation and maintenance. The project concept was based both on Government Policy Framework for Urban Management, Service Delivery and Infrastructure Investment and an Implementation Strategy for that framework prepared on the basis of urban sector policy reform undertaken under a prior project, the Urban Sector Engineering Project (USEP) (Credit 2291-TA). The USEP project closed on December 31, 1996 and its outcome was rated as satisfactory. The strategy was well thought out based on extended consultation, and provided an assessment of the issues anticipated in every phase of the project cycle and a solid foundation for the design of the USRP. The project was complex relative to the country's capacity at the time of its inception. The available manpower and the implementation environment were viewed as major constraints. However, on the brighter side, extensive macroeconomic and civil service reforms were made during and prior to the project launch. The GOT had also developed a strategy for raising additional revenues through improvement in tax system efficiency and administrative capacity, including better expenditure planning and control, standardized budgeting and accounting system. USEP helped implement this policy through updating of property valuation and tax system and establishment of an improved standard accounting system through the Local Authorities Accounting Manual (LAAM) and tested it in two project towns and Dar es Salaam. The USRP design envisaged roll out of the LAAM in the remaining six project towns. The project objectives were consistent with the IDA Country Assistance Strategies (CAS) issued since 1994. The CAS discussed by the IDA Executive Directors prior to the launching of the project in March 1994 focused on: (i) poverty alleviation through policy reforms and economic growth; (ii) targeted intervention to improve urban services for the poor; and (iii) upgrading and expansion of basic infrastructure and urban services. The project objectives were in line with the three primary thematic objectives of IDA contained in the CAS of (i) capacity building and improved public sector management, (ii) private sector development, and (iii) environmental sustainable investments. The 1997 CAS also focused on supporting: (i) critical link between economic growth and poverty reduction; (ii) targeting interventions to improve urban services for the poor; (iii) upgrading and expansion of basic infrastructure and urban services; (iv) reinforce the growth oriented macroeconomic reforms introduced by the newly elected government; and (v) the need to respect and foster government ownership of both macroeconomic reforms and investment programs. The project objectives were also supportive of - 2 -  FY2001-2003 CAS, the period of major USRP implementation, which also focused on higher growth, poverty reduction, and institutional reforms to improve governance and service delivery, which provided a favorable implementation environment for USRP. In addition, the physical and institutional project objectives are in line with current Government of Tanzania National Strategy for Growth and Reduction of Poverty (NSGRP), also known as MKUKUTA in Swahili, with its three cluster goals of: (i) growth and income poverty reduction; (ii) improvement of quality of life and social well being; and (ii) governance. The benefits of the USRP are likely to reinforce these three desired broad outcomes. 3.2 Revised Objective: The Project development objectives were not revised. The Mid-Term Review undertaken in March 1999 confirmed the relevance of the development objectives. However, they would have been better stated as "contributing" towards sustainable economic development and urban poverty alleviation through elements (a) and (b) noted in 3.1 above, since a single project could at best only make a modest contribution towards economic growth and poverty alleviation. 3.3 Original Components: The project (US$141.3 million equivalent (US$120.1 million base cost and US$21.2 million contingencies)) consisted of the following four components in eight project towns of Arusha, Iringa, Mbeya, Morogoro, Moshi, Mwanza, Tabora, and Tanga, plus Dodoma, and Dar es Salaam. These were (SAR costs estimates indicated below are base costs): A. Rehabilitation and select expansion of infrastructure services in the eight project towns and Dodoma (US$83.4 million, 68%). This included: (i) Municipal infrastructure and services