India - Kerala Water Supply and Sanitation Project

Document of The World Bank FOR OFFICLAL USE ONLY Report No. 14783 IMPLEMENTATION COMPLETION REPORT INDIA KERALA WATER SUPPLY AND SANITATION PROJECT (CREDIT 1622-IN) JUNE 30, 1995 Agriculture and Water Operations Division Country Department II South Asia Regional Office 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 Rs 1.00 = US$ 0.0909 at appraisal (June 1985) Rs 11.00 = US$ 1.00 at appraisal (June 1985) Rs 1.00 = US$ 0.0324 at project close (March 1994) Rs 30.85 = US$ 1.00 at project close (March 1994) WEIGHTS AND MEASURES 1 millimeter (mm) = 0.0394 inches (in) 1 meter (m) = 3.2808 feet (ft) 1 kilometer (krn) = 0.6214 mile (mi) 1 square meter (m2) = 10.7639 square feet (sq ft) 1 square kilometer (krn2) = 0.3861 square mile (sq mni) 1 hectare (ha)=0.01 km2 = 2.4711 acres (ac) or 10,000 sq m I liter (1) = 1.0567 quarts liquid or = 0.2642 US gallon (gal) or = 0.9081 US quart dry (qt) 1 cubic meter (mn3) = 35.3147 cubic feet (cu ft) 1 liter per capita = 0.2642 US gallons per per day (lcd) capita per day (gpcd) 1 cubic meter per second = 264.1721 US gallons per second (gal/sec) (m3/sec) FISCAL YEAR OF BORROWER April 1 - March 31 ABBREVIATIONS AND ACRONYMS AIC - Average Incremental Cost DMA - Directorate of Municipal Administration DP - Directorate of Panchayats ERR - Economic Rate of Return GOI - Government of India GOK - Government of Kerala IDWSSD - International Drinking Water Supply and Sanitation Decade KWA - Kerala Water Authority LCS - Low Cost Sanitation LIC - Life Insurance Corporation of India PHED - Public Health Engineering Department PMU - Project Management Unit PWD - Public Works Department ROR - Rate of Return TAG - Technology Advisory Group of UNDP/World Bank UNDP - United Nations Development Programme WHO - World Health Organization  FOR OFFICIAL USE ONLY a:Aicr\ke-icr toc _ KERALA WATER SUPPLY AND SANITATiON PROJECT (Cr. 1622-IN) IMPLEMENTATION COMPLETION REPORT CONITEII INTRODUCTORY SECTION Table of Contents i Preface ii Evaluation Summary iii 1. PROJECT IMPLEMENTATION ASSESSMENT (a) Project Objectives 1 (b) Achievement of Project Objectives 1 (c) Implementation Record and Major Factors Affecting the Project 2 (d) Project Sustainability 4 (e) Bank Performance 5 (f) Borrower Performance 6 (g) Assessment of Outcome 7 (h) Future Operabon 7 (i) Key Lessons Leamed 8 II. STATISTICAL ANNEXES Table 1: Summary of Assessment 11 Table 2: Related Bank Loans/Credits 12 Table 3. Project Timetable 14 Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual 15 Table 5. Key Indicators for Project Implementation 16 Table 6: Key Indicators for Project Operations 18 Table-7: Studies Included in Project 19 Table 8A: Project Costs 22 Table 6B: Project Financing 23 Table 9: Economic Costs and Benefits 24 Table 10: Status of Legal Covenants 27 Table 11: Comptiance with Operation Manual Statements 31 Table 12: Bank Resources: Staff Inputs 32 Table 13: Bank Resources: Missions 33 APPENDIXES A. Mission's Aide-Memoire 35 S. Borrower Contnbution to the ICR 73 C. Map 82 This document has a restricted distribution and may be used by recipients only in the performance of their ofrncial duties. Its contents may not otherwise be disclosed wiLhout World Bank authorization.   IMPLEMENTATION COMPLETION REPORT INDIA KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) PREFACE 1. This is the Implementation Completion Report (ICR) for the Kerala Water Supply and Sanitation project in India, for which Credit 1622-IN in the amount of SDR 42.70 million equivalent was approved on July 16, 1985 and made effective on December 9, 1985. In December. 1991, SDR 20.00 million saving due to exchange rate fluctuations was cancelled and transferred to the Social Safety Net Adjustment Program. The Credit was closed on March 31, 1994 after two 6 months and two 1 year (total of 3 years) Credit closing date extensions. The total amount disbursed under the Credit was SDR 21.69 million, out of the remaining SDR 22.70 million. 2. Preparation of the ICR was first discussed with the Government of Kerala in November, 1993 by a supervision mnission and then followed by further discussion during a mission in May, 1994. The ICR mission to assemble data was undertaken in July, 1994. The ICR is based on material in the project file. The borrower contributed to the preparation of this ICR by presenting views reflected in the mission's aide-memoire, preparing an evaluation of the project's initial preparation and execution and commenting on the draft ICR, and preparing Appendix B to this report.  I  -iii- IMPLEMENTATION COMPLETION REPORT INDIA KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) EVALUATION SUMMARY Project Obiectives 1. The broad aim of the project was to improve institutional, operational and financial performance throughout the water supply and sanitation sector in Kerala, while also tackling specific physical needs. The specific Project objectives were to: (a) assist in strengthening the operational and financial roles of Kerala Water Authority (KWA), by promoting manpower development and operational efficiency; (b) provide piped water supplies to about one million people residing in seven rural areas; (c) increase the supply of water and extend the distribution facilities in one urban area to about 150,000 people; and (d) introduce low-cost on-site sanitation LCS facilities and finance their construction so as to benefit about 200,000 people residing in ten urban areas and to undertake a similar pilot program for low-cost sanitation in rural areas. Implementation ExDerience and Results 2. The original project implementation schedule (1985-90) proved overly optimnistic as even after Project extensions totalling three years the project implementation remained incomplete. The institutional development and financial management and accounting aspects of the Project started slowly and were inadequately resourced for most of the Project causing delayed results. 3. The detailed engineering preparation was inadequate and did not progress in tune with the major items of procurement. Implementation progress had slowed down considerably by early 1988. The key factors which were within GOK/KWA control but contributed to the delays were: (a) imposition of excessive GOK control over KWA; (b) inadequate organization and management by GOK/KWA; (c) fast staff turn-over; (d) lack of counterpart finance; (e) land acquisition difficulties; (f) inadequate experience in program management and contract scheduling; (g) poor procurement administration practices; and, (h) inadequate engineering preparation. 4. Because of these many problems and inadequacies the Project outcome is regarded as less than satisfactory. However, the Project has achieved some worthwhile improvement in management capability in KWA and in staff training and financial management and accounting performance, and the physical targets of the Project were substantially achieved at the time of Credit closing. Two water supply schemes had been commnissioned and the remaining five were due to be fully completed and commissioned by October, 1994. 5. The Project gave a start to the use of LCS in the State and demonstrated the successful use of twin-pit latrines as a low-cost sanitation measure for rural and urban areas. However, the quantitative achievement was far below Project targets. The unfinished LCS works are to be addressed through the various LCS programs taken up by GOK.  -iv- 6. The KWA staff training center was operational in 1991 after a delay of about 4 years and is expected to contribute significantly to the improvement of operational efficiency and staff productivity. The long delavs in preparation and submission of audited accounts experienced early on have been reduced. Summary of Findinas 7. Overall, the conclusion of the Project experience is that physical development aspects of the Project were inadequately prepared and not fully appraised. The establishment of a dedicated State- wide utility, which has adopted tariff policies expected to lead to full financial viability may be regarded as a worthwhile achievement. The improvements made in KWA in the areas of management capability, staff training, financial management and accounting practices are sustainable and further improvement is possible. Important experience was gained from the LCS component despite its low level of physical achievement. Future Operations 8. The future operation of the water supply schemes will be the responsibility of KWA. The LCS, being a "household" facility, will be operated by the beneficiaries. Operational Plan and Performance Indicators (Annex 4 of Appendix A) have been prepared by KWA for water supply, and by GOK for LCS, for future operations. The operation plan for water supply schemes appeared somewhat "optimistic" as the projected water supply connections for 1994/95 may prove difficult to achieve. Further, staff recruitment for water supply operations was also pending at Closure due to Government ban on fresh recruitment. 9. Sustainable operation of the water supply components is largely dependent on KWA's management and personnel skills and its financial performance. The impetus provided by the Project in management improvement, staff training and financial viability is expected to contribute substantially to sustainable operation of the Project. Key Lessons Learned for Proiect Identification Identification 10. A wide geographical spread of sub-projects causes problems for the management of project preparation and supervision. 11. The results of the economic evaluation should be used to help design the Project. Preparation 12. Sufficient time and effort should be given by the Bank and the borrower to the preparation stage of the Project cycle. Specifically to: (a) Studies, surveys, investigations and engineering planning and design; (b) Preparation of detailed procurement plans and implementation timetable; (c) Realistic cost estimation;  (d) A detailed implementation plan including an assessment of the magnitude of the magnitude of the disruptive effects of changes to organizations; (e) Project performance indicators which should be worked out against a realistic timetable for Project implementation; and (f) The availability of sufficient land and detailed land acquisition planning before appraisal, such as to avoid delays during implementation. ADpraisal 13. Appraisal should occur only when the Project is ready. The problems of implementation which beset the Project (delays, poor practices, wide ranging failures to reach targets) should be identified at appraisal and appropriate plan of action should be prescribed and covenanted. 14. Entity performance indicators and targets need to be agreed rather than being left to worked out during implementation. There is no advantage in having financial performance covenants for the individual sub-projects: rather, these should be for the utility entity. Implementation 15. Greater supervision effort by the Bank in the critical early stages of implementation would be beneficial. 16. The borrower must provide adequate field level management in order to avoid adoption of poor practices of contract management, procurement etc. 17. Prompt management action is required when borrowers fail to comply with covenants. 18. Borrowers should realize that delays in implementation have an economic cost. 19. Project conditionality should include a minimum of three year posting for field officers. 20. Consolidation of the procurement into a very much smaller number of larger contracts, including "supply and install" contracts.  !  -1.- IMPLEMENTATION COMPLETION REPORT INDIA KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) PROJECT IMPLEMENTATION ASSESSMENT I. Statement and Evaluation of Obiectives 1. The broad aim of the Project was to improve institutional, operational and financial performnance throughout the water supply and sanitation sector in Kerala, while also tackling specific, identified, physical needs. The objectives of the Project were to: (a) help strengthen sector-wise management in the newly created Kerala Water and Wastewater Authority (renamed as the Kerala Water Authority (KWA) in 1986) and in municipalities which operate their own distribution systems, by promoting manpower training, operational efficiency through the reduction of water wastage and improved central services, sound accounting systems and development of cost recovery targets; (b) provide piped water supplies to about one million people residing in seven rural areas; (c) increase the supply of water and extend the distribution facilities in one urban area (Quilon) to about 150,000 people; and (d) introduce low-cost on-site sanitation facilities and finance their construction so as to benefit about 200,000 people residing in ten urban areas and to undertake a similar pilot program for low-cost sanitation in rural areas. 2. It was entirely appropriate to have Project objectives of strengthening the newly established institution and assisting it in developing relevant policies and practices to serve the needs of the State's water supply sector. Demonstration of the successful use of twin-pit latrines as a low-cost sanitation measure for urban areas was also a desirable and relevant objective given that sewerage systems are not affordable in most Indian towns and cities. II. Achievement of Obiectives 3. The physical objectives were not fully accomplished despite three extensions of the Credit closing date over the period from March 31, 1991 to March 31, 1994. By final Credit closure: (a) only 10 of the 36 panchayats were covered with water supply, although works in those remaining were substantially completed: (b) the augmentation of water supply to Quilon town had not been completed and commissioned; (c) only 46% of the total number df latrines initially planned in the urban areas were completed; and (d) only 42% of LCS units planned in the rural areas were  -2- constructed. The economic rates of return (ERR) for the water supply sub-projects were below the estimates at appraisal (Table 9) due largely to delays in implementation which led to the deferment of net project benefits. 4. The Project has achieved only modest results regarding the institutional and financial performance. KWA performance on cost recovery was well below the forecasts due mainly to the delayed introduction of tariff increases (Table 9). Tariff increases on a regular annual basis and of sufficient magnitude to bring the entity eventually into viability (by about 1998/99) were introduced only towards the end of the Project. As a consequence of these delays in action to increase revenues. the GOK needed to provide the entity with considerable annual grants. The financial management was improved in KWA by reorganizing and strengthening the Finance and Accounting Wings and enhanced staff skills brought about by a concerted training program in the Accrual Accounting System (AAS). Nevertheless, inadequate staffing greatly increased the time taken to implement the finance and accounts reforms. The KWA staff training center was operational by Credit closure and is expected to improve operational efficiencv and staff productivity (para 2.11 of Appendix A). IHI. Implementation Record and Maior Factors Affecting the Proiect 5. Water supply schemes. Implementation of the seven water supply schemes (para 1. 11 of Appendix A) was started in mid-1985, except for Kottayam which was taken up in June, 1987. The scope of the water supply schemes was marginally enlarged to cover the additional dwelling units and roads constructed in the project area since inception of this Project and initial design of the schemes. Only two water supply schemes (Vilappil and Puthencruz) were fully commissioned and the GCDA scheme was partly commissioned (water supply commissioned in 5 of the 12 panchayats) by Credit closing. Other schemes were at substantial completion level and all schemes were planned to be fully commissioned before October, 1994 (para 1.13 of Appendix A). 6. Low-cost sanitation. The LCS achievement was far below the targets even though there was a good start made with continued progress at much higher rates than planned in the first two years. The progress began to decline from the third year due to insufficient management control. counterpart funds constraints and inadequate technical support from the KWA to the Department of Municipal Administration and Departnent of Panchyats. Only 44% of the overall (urban and rural together) target which was fixed at appraisal was achieved (para 2.08 of Appendix A). 7. Institutional development and financial management and accounting aspects. These aspects of the Project got off to a slow start and were inadequately resourced for most of the time. While the technical assistance for improved financial accounting practices commenced promptly, inadequate staffing and inappropriate organizational arrangements for the Finance Wing hampered prompt and efficient implementation. One consequence was considerable delay in the preparation of the entities' accounts and hence much delayed audit reports. 8. Proiect Objectives. These included improvement in cost recovery performance of the entity during the Project. Targets for cost recovery were not identified at Appraisal, but financial projections were prepared. These projections provide an opportunity to compare actual performance with the expectations at Appraisal and these comparisons appear in Table 9 in the statistical annex. Actual financial performance was well below projections and was inadequate; for example, negative rates of return occurred throughout the project period. The main differences between projections and actual were operating revenues which were forecast to be over double the actual levels achieved for  3 - the period since 1989/90. Failure early on to introduce regular annual tariff increases of sufficient magnitude to bring the entity into eventual viability by about 1988/99 was the main reason for this poor performance. These tariff increases came only towards the end of the project period. 9. The covenanted "Cost and Revenue" Study and "Training" Study were commenced only after delay of several years (para 30) and actions anticipated in response to such studies were commensurately delayed. An Organization Review Study was taken up by KWA following the recommendations of the Cost and Revenue Study and the Training Study. However, this Study was incomplete, although a draft final report was available at Credit closing. 10. The original project implementation schedule (1985-90) proved overly optimistic as indicated by the Project extensions totalling three years, and which proved to be insufficient. The principal factors that affected the Project progress were as follows: Factors not subiect to GOK control (a) Natural calamity: Floods caused by uncommonly heavy rains caused implementation delays by several months in 1992-93. (b) Competing LCS Program: Availability of other GOI-assisted LCS programs which offered more (and often substantial) subsidy to the people reduced the demand for latrines in some parts of the project areas. Factors subiect to GOK control (c) GOK control of KWA: Under the Kerala Water Supply and Sewerage Act, 1986 KWA aimned at becoming a largely autonomous and commercially oriented organization. In practice, its powers were limited and its role was restricted by GOK. For example, KWA had no control over staff recruitment; water supply tariff revision remained subject to GOK approval, and the KWA Board was given limited powers to decide on contract awards. As a result, decisions were delayed or deferred altogether. (d) Inadequate organization and management by GOK/KWA: The Project was generally poorly managed. Although some changes in KWA organizational structure were made at the beginning of the Project, no evaluations were made by GOK to determine effectiveness or whether further changes would be desirable. (e) Staff continuity: Lack of KWA staff continuity was a serious issue during project implementation, with too frequent transfers causing disruption to work schedules and reduced effectiveness. (f) Counterpart funding constraints: Slow progress for other reasons was compounded from 1988 by GOK's failure to provide required levels of counterpart funding. This resulted in delays in payments to contractors, and delayed the procurement of remaining contracts. During the extended period of the Credit, counterpart funding problems eased considerably. (g) Slow preparation of KUDP: The Project's Development.Credit Agreement was amended in March 1994 to accommodate financing the consultants studies for preparation of future urban  -4- development projects in Kerala. However, the proposed Kerala Urban Development Project was deleted from the Bank's lending program on March 25, 1994 due to very slow decision-making by GOK. (h) Land acquisition difficulty: Land acquisition disputes caused delayed availability of land in Puthencruz, GCDA, Adoor, Quilon and Chithara for water supply schemes. Land acquisition for pipelines in one instance at Quilon was so difficult that eventually the pipes were taken through an alternate route. Factors subiect to KWA control (i) Lack of experience in program management and contract scheduling: KWA's lack of experience in time-bound construction and related contract scheduling seriously affected the efficiency of implementation of the Project. There were instances where, due to non-availability of the appropriate size of pipe, the nearest available pipe size was used in some sections of the transmission and distribution network in GCDA, Adoor, Quilon and Chithara. (j) Large number of small contracts: The lack of procurement planning resulted in the field divisions embarking on a large number of small contracts where the estimated cost was within the delegated award decision level at field level. There were 546 LCB civil works contracts of aggregate value of Rs 446.3 million, and 710 LCB goods contracts of aggregate value of Rs 98.1 million for the seven water supply schemes, apart from the ICB procurement of pipes and LCB procurement of water treatment plants. This large number of contracts demanded substantial attention to coordinate the availability of various goods and materials at site. Coordination difficulties were further aggravated by the wide-ranging nature of the project engineer's district-wide responsibility for all water supply schemes which did not permit sufficient concentration of effort on the needs of the Bank-financed schemes. (k) Inadequate procurement administration practices: The use of small and numerous contracts proved to be an obstacle to timely completion of works and precluded the Bank's prior review. The procurement practices adopted were not conducive to good results (for example, works awarded based on the lowest offer without the effective prescription and appreciation of post-qualification requirement; no compensation for price escalation). They caused delays and aggravated construction management problems. Lengthy processes of contract award decisions were another factor which contributed to the delays in implementation. (1) Need for sound construction management practices: The physical works, mainly the laying of pipelines, were not carried out using sound construction management practices (for example, new pipelines were laid without testing for leak tightness and without keeping proper records and drawings). This was evident from the inordinately long period taken for commissioning of water supply schemes as several defects such as improper joints, missing links, pipe blockages, pipe bursts, leaking joints, etc. had to be rectified before the trial operations. (m) Inadeguate engineerinaz preparation: There was insufficient effort given for the preparation of designs and detailed engineering drawings on time (KWA was responsible for detailed engineering for pipes, storage reservoirs, pumps and pumphouses, intake structures). The procurement of these items progressed without a sound implementation plan. '  (n) Consultant appointment delavs: Long delays were experienced in appointment of consultants for the covenanted "Cost and Revenue" and "Training" Studies. IV. Proiect Sustainability 11. The financial policy, mnanagement and accounting improvements introduced through the Project are expected to lead to progressive and permanent improvements in efficiency and performance. If KWA does not deviate from the tariff revision principles established under the Project, it could become financially self-sustaining by 1998-99. 12. The impetus provided by the Project in management improvement, staff training and financial viability is expected to contribute substantially to the conditions for sustainable operation of the Project assets. 13. However, KWA has not taken the steps to post appropriate number of skilled staff for operation and maintenance of the completed water supply schemes and has also not provided adequate budget for this purpose. Currently, the operation and maintenance activities of the completed water supply schemes are ad-hoc and largely rely on temporary recruitment (for a term of 6 months naximum) of inexperienced and untrained staff. 14. The service connection targets for the completed schemes were not achieved, in spite of demands for connections from consumers. A concerted and determined effort on the part of the KWA to achieve the connections targets, and establishment of widespread consumer meter repair facilities, particularly in the panchayats, would be essential to meet the operational plan targets (Annex 4 of Appendix A). 15. The LCS component provided "household" facilities which are simple and inexpensive to maintain. Evaluation reports confirm this experience, which provides the basis for some "cautious optimism" for the Project to be sustainable as: (a) ownership of the latrine is with the householder; (b) the users appear satisfied with the functioning of the latrines and do not report problems; and, (c) the users are aware of the operation and maintenance procedures including the switching of pits. However, for maximization of benefits, the local bodies will have to continue to provide advisory assistance to the beneficiaries by providing oral and written guidelines as may be indicated by periodical field monitoring. V. Bank Performance 16. Identification. A few brief reconnaissance missions to Kerala preceded the formal identification mission of Nov/Dec 1982. The physical development aspects of the Project were of an unusual mixture, for which the rationale was unclear. The Project consisted both of rural and urban components, despite their quite different service delivery systems. The rural schemes were widely scattered throughout the State which made regular physical inspection by supervision missions difficult, and not cost-effective despite borrower concerns that this should have occurred. The rural schemes were located in both stable and rapidly growing (peri-urban) areas, which also added to the Project's complexity. Only one urban area was included, which was neither the State capital, nor one of the States three large cities. Such a choice may have provided benefits to a larger number of people with less logistical complexity. However the institutionat'development intentions of the  -6 - Project were clearer which were to establish and develop a State-wide utility at arm's length from Government. 17. Preparation. The preparation of the Project commenced in July, 1983 and the Project was appraised in May, 1984. Insufficient Bank effort went into preparation, with only one Bank mission to visit Kerala in the intervening period in October, 1983 to assist the preparation. KWA's engineering and management skills were not adequate to the task of Project preparation and needed greater participation by the Bank in guiding and reviewing progress. Moreover, the limited Bank staff-time (37.4 staffweeks - Table 12) involved in preparation was concentrated largely on orienting the newly established institution in financial management skills. Total staff-time of 45.4 staffweeks (Table 12) used by the Bank through the Credit effectiveness is only 41 % of a typical requirement of about 110 staffweeks for such a project. 18. Appraisal. The Bank may also be faulted for relying on outline proposals and preliminary cost estimates prepared by KWA. The project costs proved overestimated. The complexity of the duties of the engineers at the scheme level in KWA was underestimated. The proposed organization structure did not respond to the needs of improving efficiency at the field level. 19. The operational action plan did not adequately take into account the requirement to overcome KWA's weaknesses. These weaknesses were not adequately addressed at appraisal. This was evident during implementation, for example, as: (a) the pipes procured were based on rough estimates of length for various pipe sizes; (b) the designs were not ready in an orderly manner; and (c) it took considerable time for the agency to understand the Bank procedures and procurement guidelines. 20. Projections of KWA financial statements were prepared at appraisal along with key cost recovery indicators, although targets for the entity were not covenanted. The financial performance of the sub-project schemes was covenanted, but monitoring of this covenant was not possible during implementation since revenues would start to flow only after the completion of the schemes. Generally, there was inadequate grasp by the Bank at Appraisal of the information needs and tasks which would be required during supervision. 21. With hindsight, the arrangements for LCS implementation were also inadequate leading to the underperformance. 22. The Bank inadequately appraised the financing capability of the GOK, leading to slow application of counterpart funds. 23. Supervision. There were 14 supervision missions undertaken in the 8.3 years of project implementation period. Supervision involved 129.7 staffweeks in total (Table 12) of which 85.7 staffweeks (Table 13) were used in the field. Almost up to the scheduled project completion period (31 March 1990), the project supervision team was small (comprising two persons) and usually made brief visits (6 days on an average - Table 13). Such brief supervision missions, though composed of members with the required skills, were not enough to deal with an agency which had no prior experience in working with the Bank. 24. Prior to FY91 total supervision staff-time averaged 10.9 staffweeks per annum whereas from FY91 onwards it rose substantially to 18.8 staffweeks per annufm. Additionally the nature of the supervision changed dramatically between these two periods. Only 43 percent of the time was spent  -7- in the field prior to FY91 but 83 percem thereafter. There was only one supervision mission during the formative stage of the Project implementation between February, 1988 and April, 1990 (in March, 1989) (Table 13). 25. The low level of supervision effort by the Bank in the initial years helps to explain the decline both in Project performance and GOK commitment from early 1988 (para 22). Progress with water supply works was very slow, LCS achievement slumped and expected reforms of financial performance at KWA failed to materialize. The increase in Bank effort and the need for extensions after FY91 may be regarded as attempts to put right, somewhat late in the Project, poor and deteriorating borrower performance with Project implementation. VI. Borrower Performance 26. The GOK-KWA performance was variable during project preparation and implementation. They participated, though with occasional delays, in the project preparation as per program. Considerable time was lost, however, between appraisal and effectiveness due to GOK's inability to complete the processes for the establishment of KWA. 27. The project implementation was given an enthusiastic start by GOK-KWA, but the initial enthusiasm was not sustained in part due to weak organization and management and the consequences of inadequate counterpart funds. GOK-KWA appeared to benefit from guidance and pressure by the Bank to improve performance but this happened mostly during the extended period of project implementation and came too late. 28. The irnplementation of the Project began with the centrally administered procurement of large contracts, comprising ICB procurement of pipes, LCB procurement of turnkey contracts for the water treatment plants, and LCS construction. However, the detailed engineering preparation was inadequate and did not progress in tune with the major items of procurement. The implementation progress was slow from early 1988 (para 22) as: (a) the detailed engineering drawings were not available, (b) employment of smaller contracts of large numbers with lack of supervision because of the inadequate organization at field level; (c) counterpart funds constraints; and, (d) low levels of commitment by GOK. 29. Staffing levels and organizational arrangements for KWA Finance and Accounts remained inadequate up to the time of Credit closing and the repeated extensions of the consultants' contract, and extensive auditor comments on the entity accounts were due, in part, to these inadequacies. 30. A Revolving Fund which was set up for water supply connections did not take-off at all in spite of promotional efforts, relaxed eligibility criteria and increased loan amount offered for this purpose. 31. The covenants regarding the billings and collections targets for KWA, and the insurance coverage for fixed assets of KWA were not complied with (Table 10). Other covenants were generally complied with, although with considerable lapses. The covenanted Cost and Revenue Study was delayed by about four and half years and the Training study was delayed three years and nine months. Completion of entity audits did not occur on time due to the inadequate staffing for Finance and Accounts Wings during the period of reorganization and chailge, although the delay was  -8- considerably reduced as the Project progressed and as the Finance and Accounts Wings became better organized and the catching-up operations were completed. VII. Assessment of Outcome 32. Because of the many problems and inadequacies of the Project the outcome is regarded as less than satisfactory. However, the physical targets of the Project have been substantially achieved at Credit closing (para 3). KWA has adopted tariff policies which is expected to lead to full financial viability and may be regarded as a worthwhile achievement. Also a worthwhile improvement in management capability was achieved in KWA in staff training and financial management and accounting performance. The improvements made in KWA in these areas are sustainable and further improvement is possible. KWA will become a more effective and autonomous agency if they and the GOK continue with the 15 percent per annum tariff revisions as announced (para 4). The sense of commercial operation and accountability imbibed through the Project is expected to improve performance in water supply operations. 33. The LCS component achieved a performance well below physical targets, although there were some important improvements in planning and implementation procedures and financial record keeping. VIII. Future Operation 34. GOK/KWA developed an Operational Plan and Performance Indicators (ref. Annex 4 of Appendix A) for water supply and LCS components for period up to the year 2000-2001. Milestones for future operations for each rural/urban water supply scheme and for the LCS units constructed have been indicated in the Plan. The water supply schemes are proposed to cover 90% population in the respective project area with continuous supply. Per capita net water supply for house service connections is taken as 60 liters/capacity/day (lcd) with exception for GCDA and Quilon town where a higher service level has been planned. The supply through the standposts is proposed to be made at a net rate of 30 lcd. 35. Financial projections suggest KWA viability by about 1998/99. A growth of service connections (linked to the population growth and persons per household) for each water supply scheme, an increase of tariff at the rate of 15 % per year, and a steady improvement of revenue collection performance (to reach 100% in 2000-2001) are the basis of revenue projections. The O&M expenditure for the water supply schemes included the costs of staff, chemicals, electricity and other items. Debt servicing and depreciation reflect the assets acquired under the Project. 36. However, the projected water supply connections for 1994/95 will be difficult to achieve. The time likely to be available in five of the seven water supply schemes after commissioning (these schemes were due to be commissioned in the later part of 1994), will not be adequate to install all the projected connections. KWA will need to make up the shortfall of 1994-95 connections, as early as possible in order to adhere to the operational plan and adherence to the performance targets. Water meter repairing facilities are also inadequate and yet of paramount importance in order to raise the bills on a volumetric consumption basis.  -9- 37. The LCS works will be directly used and operated by the beneficiaries. There is some real possibility of further enhancement of Project benefits, if the local bodies continue to provide advisory assistance to the beneficiaries by way of oral and written guidelines, as may be undertaken by periodic field monitoring. These aspects were considered by GOK while developing Project Performance Indicators (Page 9 and 10 of Annex 4 of Appendix A). A sustained and aggressive effort will be necessary on GOK's part to improve LCS loan recovery. 38. An annual update by GOKIKWA of the Operational Plan and Performance Indicators together with an analysis of the achievement and reasons for shortfall, if any, would be a desirable tool for the GOK to monitor the Project benefits and decide on follow-up actions. IX. Key Lessons Learned Proiect Identification 39. The urban and rural combined structure of the Project was too complex and geographically spread for manageable project preparation and appropriate supervision. There would have been managerial and implementation advantages in having a simpler and more focussed approach. 40. The economic case for the Project rested largely on the provision of additional quantities of water supply. However, a more thorough review and economic comparison of altematives, indicating the rehabilitation and disinfection of previous dug well sources, may have resulted in a different project proposal. Prenaration 41. Insufficient time and effort was given to the preparation stage of the Project cycle, and as a result many aspects of the Project had not reached a satisfactory standard of preparation before appraisal. Accordingly, lending was premature. Specifically: (a) Studies, surveys, investigations and engineering planning and design were inadequate. (b) There were no detailed procurement plans. (c) The implementation timetable was vague. (d) Proper enquiries were not made to ensure cost estimation was realistic. (e) The modernization of the financial management systems and changes to the basis of accounting at KWA were without a detailed implementation plan nor adequate assessment of the magnitude of the disruptive effects of the changes on the organization. (f) Performance indicators were not worked out against a realistic timetable for Project implementation. (g) Land had not been acquired by the time of appraisal leading to extensive delays during implementation.  -10- Appraisal 42. A set of performance indicators for the KWA as an entity should have been identified rather than being left to be worked out during implementation. There was no advantage in having financial performance indicators for the individual sub-projects. 43. The problems encountered with the loan arrangements for the LCS program were not considered at appraisal. The scrutiny of the details of administration of the LCS program was insufficiently searching and as a result many features of the program had to be changed. Audit procedures for the LCS program were inadequate and were changed. Implementation 44. The resources devoted to supervision by the Bank in the formative early stages of implementation were not sufficient and led to a stalling of the progress and deterioration in Project management by the borrower. Additionally, the proportion of Bank supervision effort spent in the field in these early stages was too low. 45. There was failure by the borrower especially at field level to undertake proper management, with attendant waste and adoption of poor practices of contract management, procurement etc. 46. Policy regarding tariffs was not adhered to (until the closing stages) resulting in serious deterioration of KWA financial performance. 47. There was no recognition by the borrower that delays in implementation have an economic cost. 48. The Bank should have monitored closely the availability of counterpart funds and taken steps to rectify the shortfalls as soon as they occurred. 49. Staff continuity was a serious problem. Project conditionality might have included a miinimum of three year posting for field officers. 50. There was a need to identify a clear mechanism for prompt award of contracts. There is also need of consolidation of the procurement into a very much smaller number of larger contacts, including "supply and install" contracts. Summinz Ur, 51. Many of the problems of implementation which beset this Project (delays, poor practices, wide-ranging failures to reach targets) could have been foreseen and arose from poor identification and preparation. The single most important conclusion to emerge from the Project management experience, therefore, is that greater effort both by Bank and borrower needs to go into these early stages of the Project cycle. Appraisal should occur only when the Project is truly ready. A subsidiary conclusion for similar projects in the future in India and elsewhere is that field level supervision effort by the Bank needs to be substantial during the early stages of implementation to ensure that the Project remains firmly on the rails. '  11 a:ljcrltabe-O1 .wk1 Table 1 Page 1 of 1 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Implementation Completion Report - Table 1 Summary of Assessments A. Achievement of objectives Substantial Partal Negligible Not applicable Macro policies yyy Sector policies yyy FinanciaJ objectives WYY Institutional development Yy Physical objectives WYy Poverry reduction YYY Gender issues yyy Other social objectives yyy Environmental objectives YYY Public sector management yyy Private sector development yyy Other (specify) S. Project sustainability Ukely Unlikely Uncertain YYY Highly C. Bank perfornance satisfactory Satisfactory Deficient Identification yyy Preparation assistance yyy Appraisal yyy Supervision yyy Highly 0. Borrowerperformance satisfactory Satsfactory Oeficient Preparation yWY Implementation yyy Covenenat compliance yyy Operation (if applicable) Highly Highly E. Assessment of outcome sabisfactory Satisfactory Unsatisfactory UnsatistactorY yyY  a:\icrktable-02.wk1 12 Table 2 Page 1 of 2 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Implementation Completion Report Table 2. Related Bank Loans/Credits Year of Loan/Credit title Purpose approval Staus Preceding operations 1. Uttar Pradesh Water Supply To reorganize water supply and sanitation sector 1975 Complete and Sewerage Project in the state: to construct new piped water supply (Cr. 585-IN) schemes for rural areas, and improve and augment water supply and sewerage in five major cities: to implement procedural reforms to achieve better fiscal discipline: strengthen operation and maintenance and develop skills in management and finance. 2. Secono Bombay Water Supply To construct 450 mid filteration plant and other 1979 Comnplete and Sewerage Project allied works. construction of balancing reservoir (Cr. 842-IN) and large diameter transmission pipelines: improvement of distnbution system and renovation of transmission mains, reservoirs, pumping stations etc.: and improvement of sewage collection and conveyance system in 5 zones: renovation of sewage treatment plant. 3. Punjab Water Supply and To improve water supply and sewerage in eight 1979 Complete Sewerage Project towns: and train staff and supply of specialized (Cr. 848-IN) equipment. 4. Maharashtra Water Supply and To construct 200 mid water treatment plant and 1979 Complete Sewerage Project allied works. rehabilitate existing water (Cr. 899-IN) treatment plant. construct reservoirs, transmission mains and improve distribution system in five towns and villages: expand sewage treatment capacity and extend sewage collection system. 5. Rajasthan Water Supply and To provide water supply to problem villages and 1980 Complete Sewerage Project improve and extend water supply to four major (Cr. 1046-IN) cities: to extend sewerage system in three major cities: and strengthen operation and maintenance. 6. Gujarat Water Supply and To bring water to rural communities where water is 1983 Complete Sanitation Project scarce or unsafe for human consumption: to improve/ (Cr. 1280-IN) extend water supply and sewerage services in selected urban centers: to extend and upgrade sewage collection and disposal systems in densely populated areas in major municipalities; to provide low-cost sanitation in medium-size towns; and to strengthen the institutional frame work of the sector through improved financial management. accounting, billing and collection practices, and introduction of cost recovery targets and establishment of training facilities. Tamil Nadu Water Supply and To improve water supply in larger urban areas and 1984 On-going Sanitation Project to provide water supply to certain smaller towns (Cr. 1454-N & SF-12-IN) and rural areas: to provide low-cost sanitation to selected urban communities and to strengthen institutional, managenal. and financial practices.  a:\icr\table-02.wkl 13 Table 2 Page 2 of 2 Year or Loan/Credit title Purpose approval Status Following operations t. Third Bombay Water Supply and To construct 455 mid water treatment plant and 1987 On-going Sewerage Project other allied works, construction of storage (Cr. 1750-IN & Ln. 2769-IN) reservoirs and large aiameter transmission pipelines: pumping stations etc.: and to construct sewers and enhance sewage pumping capacity and provision of low-cost sanitation. 2. Madras Water Supply and To augment water supply sources by 102 mid and 1987 On-going Sanitation Project improvement of water supply distribution system; (Ln. 2848-IN) and to improve sewerage system and strengthen institution. 3. Hyderabad Water Supply and To provide additional 135 mid water to Hyderabad: 1990 On-going Sanitation Project and to rehabilitate and strengthen the existing (Cr. 2115-IN) water system and sewerage system: and to provide low-cost sanitation units to serve low-income people; and to strengthen institution. 4. Maharashtra Rural Water To raise the standard of living in rural areas 1991 On-going Supply and Environmental through improved health and productivity, by Sanitabon Project expanding access to potable water supply systems (Cr. 2234-IN) and environmental sanitation facilities. To develop replicable models for coordinating water. environmental sanitabon and health communications program and strengthen the insitutitonal capacity. 5. Kamataka Rural Water To raise the standard of living in rural areas 1993 On-going Supply and Environmental through improved health and productivity, by Sanitation Project expanding access to potable water supply systems (Cr. 2483-IN) and environmental sanitation facilities. To develop repitcable models for coordinating water. environmental sanitation and health communications program and strengthen the local insitutitonal capacity. .5.  14 a:\icr\table-03.wk1 Table 3 Page 1 of 1 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Implementation Completion Report Table 3: Project Timetable Date actual Steps in project cycle Date planned latest estimate Identification (Executive Project Summary) 26-Nov-82 Preparation May-83 30-Jul-83 Appraisal Sep-83 28-May-84 Negotiations Jan-84 25-Mar-85 Letter of development policy N.A. N.A. (if applicable) Board presentation Mar-84 16-Jul-85 Signing - 24-Sep-85 Effectiveness Jun-84 09-Dec-85 First tranche release (if applicable) N.A. N.A. Midterm review (if applicable) N.A. N.A. Second (and third) tranche release N.A. N.A. (if applicable) Project completion 31-Mar-90 31-Oct-94 Credit closing 38-Mar-91 31-Mar-94 N.A. Not applicable  a:\icr\table-04.wk1 Table 4 Page 1 of 1 KERALA WATER SUPPLY AND SANITATION PROJECT (CR. 1622-IN) Implementation Completion Report Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual (USS thousand) FY 1986 FY 1987 FY 1988 FY 1989 FY 1990 FY 1991 FY 1992 FY 1993 FY 1994 FY 1995 Appraisal estimate 2,600 10,700 22,100 32,900 39,200 40,900 41,000 Actual 0 5,095 6,170 10,655 14,727 18,602 22,524 22,524 25,715 28,978 Actual as % of estimate 0 47 6 27.9 32 4 37 6 45 5 54 9 54 9 62 7 70 7 Date of final disbursement 17-Aug-94 @ _--- - -- - - -- - --- -- - - - -- - -- - - - - - - - - - - -_ - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - -  16 a:\icr\table-05 .wp Table S Page 1 of 2 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Implementation Completion report Table 5: Key Indicators for Project Implementation 1. The following Project Monitoring Indicators (SAR: ANNEX 16) were proposed for discussions at negotiations and were to be monitored on a quarterlv basis, during and after the execution of the Project. These indicators were proposed to be applicable to each of the sub-project areas, where applicable, and to KWWA as a whole. Ehsical Cr a 2. (a) Water Production (i) average dailv production for each month of the quarter; (b) Water Connections and Metering (ii) number of new connections for the quarter (domestic, standpost, commercial, industrial); (iii) number of net defective meters for quarter; (iv) number of meters repaired during quarter. (i) number of major leaks repaired during quarter and, cumulatively, to end of quarter since beginning of repair program. (d) Low-Cost Sanitation (i) number of individual units installed for the quarter. and cumulative total; (ii) number of seats installed in communal facilities, for the quarter. and cumulative total. Staffing 3. The number of permanent employees engaged in sector activities at end of quarter detailed as follows: (a) headquarters (management, engineers. accountants and others); (b) regional offices (management, engineers, accountants, operation and maintenance staff, metering and collections staff and others). Project Expenditure 4. (a) monthly project expenditures by cost categories; (b) cumulative expenditures at end of quarter, indicating actual versus projected expenditures. Financial Indicators 5. (a) Financial Ratio  17 a:\icr\table-05.wp Table 5 Page 2 of 2 (i) working ratio (ratio of all operating costs, excluding depreciation and interest expenses. to revenues); (ii) debt service coverage (ratio of total internal cash generation to the debt service requirement); (iii) rate of return for developing rural and urban areas (ratio of operating income. including depreciation but excluding interest expense, to net fixed assets in operation); (iv) ratio of accounts receivable to total billings. (b) BMing and Collection (monthly basis (i) average tariff for all meters sold: (ii) number of connections billed (domestic, commercial, industrial and government users); (iii) amount billed (shown separately for current demand arrears) for standposts. government, domestic. commercial, and industrial usage; (iv) number of bills collected (domestic. commercial. industrial users); (v) amount collected (shown separately for current demand and arrears) from standposts. government, domestic, commercial and industrial billings; (vi) percentage of unaccounted water (ratio of water billed to meters sold); (vii) number of disconnections and reconnections during quarter; Pnnulation Statintics 6. 'he following indicators relating to population and service level should be monitored on a yearly basis: (a) population in urban areas; (b) population in rural areas: (c) total population served by domestic water connections in both urban and rural areas; (d) total population served by standpipes in both urban and rural areas. 7. The recorded minutes of negotiations however. does not indicate whether any discussions to this effect (para 1) was held and therefore, it is not known whether, any indicators for project implementation were proposed. However, the Schedule 2 of the Project Agreement provided an action plan, which was covenanted under Clause 2.01(b) of Project Agreement. Compliance status is reported in Table 10 (Status of Legal Covenants). 8. - Para 6 of Table 9 shows the trends in operating income for the entity (operating revenues less operating costs including depreciation), comparing projections at appraisal with actual performance during the project implementation period, and para 7 of Table 9 provides a cornparison for the entity for four performance indicators also for the project implementation period. 9. The quarterly reports prepared by KWA following the indicators (paras 2-6) were not complete and were not fuirnishing specific information on the progress of the Project. KWA thus revised in 1991 the quarterly progress report format to a more comprehensive and effective presentation which reported on each project component and provided detailed progress status on (a) procurement: (b) expenditure and disbursement; (c) physical progress - contractwise; (d) physical progress -componentwise; (e) consulting services assignments; (f) covenant compliance, etc. in annexures to the reports.  18 a:\icr\table-06. wp Table 6 Page I of 1 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Implementation Completion report Table 6: Key Indicators for Project Operation 1. Key indicators for operation were not defined in the SAR. The minutes of negotiations also do not provide any information whether indicators for project operation were discussed and defined. No project operation indicators were defined during the project implementation. 2. However, the Government of Kerala and the Kerala Water Authority have developed operational and performance indicators for water supply and LCS components of the Project. for period up to the year 2000-2001 (see attached Annex 5 of Appendix B of this Report). Section H (Future operation) of the Project Implementation Assessment contains a brief report on the GOK-KWA developed operational and performance indicators.  a:\cic\table-07 wkl Table 7 19 Page 1 of 3 KERALA WATER SUPPLY AND SANITATION PROJECT(Cr 1622-[N) Implementation Completion Report Table 7 Studies Included in ProlecL Purpose as defined Study at appraisal/redefined Status Impact of study Indicated in SAR Accrual Accounting System Full implementation of AAS. Training Complete Accounts are well organized and records (AAS) Implementation of the financial staff. preparation ot are poduced in less time than it used accounts and progress reports. valuation to take before. Future audit reports of fixed assets lor water and sanitation are likely to be produced on time. sector Cost and Revenue Study To provide factual basis for Completed State-wide tanff with provision for development of a structure for water late automatic annual increase established. supply tariffs and charges throughout the State Training Needs Study Assessment of training needs and Completed Training Center established and identification io training courses late traIning courses are conducted regtlariy. The personnel training program launched is Sep-91 has brought awareness among KWA staff of good operation and maintenance and accounting accounting practices. Added during Implementation Project Management and To develop project management skills Complete Good reporting of prolect progress. Reporting System and progress reporting. Orpnization Review Study To review the existing organization On-going Study was not completed at Credit and its mandate and recommend the dosing, but draft final report was changes necessarv for KWA to be more available. effective Audits of Consumer Ledger in To prepare proper database for future On-going Trivandrum billing including the proposed compterised billing Updaaion ot fixed assets To accurarelv present the value ot On-going registers fixed assets in the Balance Sheet and appopriate recording ot depreciation in the Income Statement. Assssment of dues from To determine the factual position of On-going Local Bodies Local body arrears to take decision on the disposition of arrears KUDP Preparation Water Suppiy Feasibiliry Studies of Water To prepare technical proposals for a Complete The reports ted to detailed engineenng Supply for Thiruvananthapuram. future KUDP phase of prolect preparation. Kochi and Kozhikode Water Resources Studies for To determine the dependability of the Complete Water sources identified and the Kochi and Kozhikode proposed water sources for water supply extarctable quantity determined. to Kochi and Kozhikode.  a.\icr\table-07 wkl 20 Table 7 Page 2 of 3 Purpose as cetined Studv at appraisaliredetined Status Impact of study Sewerage and Low-Cost Sanitation Final Engineering desien and Part of project preparation exercise On-going Environmental Assessment tor Kochi and Kozhikode water suppiy Feasibilitv Studies of To prepare technical proposals tor a Complete The reports led to detailed engineering Sewerage and LCS for future KUDP phase of protect preparation. Thiruvananthapurarn Final Engineering design and Part ot nroiect preparation exercise. On-going Environmenmal Assessment tor sewerage for Thiruvananthapuram Feasibilirv Studv and To prepare technical proposals tor a On-going Environmental Assessment ot luture KUDP Kozhikode LCS Environmental Assessment of Part ot project preparation exercise. On-going Thinivananthapuram LCS Roads Feaibility Studies of Roads To prepare technical proposals for a Complete The repons led to detailed engineenng ror Thiruvananthapuram. future KUDP - phase of project preparation. Kochi and Kozhikode Final Engineenring design and Part of project preparation exercise. On-going Environmental Assessment for Roads of Thiruvananthapuram. Koc-hi and Kozhikode Trafrtc Management Traffic Management Studv ot- Part ot project preparation exercise. On-going Roads for Thiruvananthapuram. Kochi and Kozhikode Storm Water Drainage Identifiomion and Instituti- To prepare technical proposals for a Complete The repons led to detailed engineering onal Studies of Drainage for future KUDP phase of project preparation. Thiruvananthapuram. Kochi and Kozhikode Final Engineering design and Part ot project preparation exercise. On-going Environmental Assessment Ot Drainage for Thiruvanan- thapuram. Kochi and Kozhikode Financial Management and Accounting Financial Management and To implement AAS in the Municipal On-going Introduction of Accrual Corporations of Thiruvananthapuram. Accounting System Kochi and Kozhikode. Strategy Studv for To determine the strategy for On-going Intrduction of introduction of computensed financiai Computerised Financial management svstem for MaNgement System Thiruvananthapuram. Kochi and Kozhikode  a.kicrktable-07 wk l 21 Table 7 Page 3 of 3 Purpose as defined Study at appraisal/redefined Status Impact ot study Preparation of Annual To prepare outstandrinte accounts Complete Complete acconuts for 1985-88 available Accounts for 1985-88 for Thiruvananthapuram and Kochi Preparation of Annual To prepare outstanding accounts Complete Complete acconuts for 1985-88 available Accounts tor 1985-88 for Kozhikode Preparation of Annual To update accounts On-going Accounts for 1988-94 for Thiruvananthapuramn Preparation of Annual To update accounts On-going Accounts tor 1988-94 for Kochi Preparation of Annual To update accounts On-going Accounts tor 1991-94 for Kozhikode .is  22 a:\icrUtable-8a.wk1 Table 8A Page 1 of 1 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Implementation Completion Report Table 8A: Project Costs Appraisal est. (US$M) ActuaUlatest est. (US$M) Local Foreign Local Foreign Item costs costs Total costs costs Total Water Supply: Rural Stable Areas 9.79 2.42 12.21 8.06 2.01 10.07 Rural Developing Areas 21.57 9.37 30.94 15.82- 6.78 22.60 Urban Area 2.96 3.13 6.09 3.23 3.23 6.46 Low Cost sanitation: Rural Areas 3.04 0.19 3.23 1.49 0.09 1.58 Urban Areas 2.67 0.16 2.83 1.33 0.08 1.41 SUB-TOTAL 40.03 15.27 55.30 29.93 12.19 42.12 Central Services: Meter Workshop 0.08 0.01 0.09 0.04 0.00 0.04 Meters 0.00 1.49 1.49 0.00 0.54 0.54 Veh, Misc 0.44 0.02 0.46 0.18 0.18 0.36 Total 0.52 1.52 2.04 0.22 0.72 0.94 Others: Revolving Fund 1.39 0.00 1.39 0.00 0.00 0.00 Land 0.85 0.00 0.85 2.03 0.00 2.03 Training 0.62 0.09 0.71 0.16 0.01 0.17 Consultancy 0.14 0.00 0.14 1.22 0.50 1.72 Total 3.00 0.09 3.09 3.41 0.51 3.92 SUB-TOTAL 43.55 16.88 60.43 33.56 13.42 46.98 Engineering 8.23 0.00 8.23 9.13 0.00 9.13 Physical Contingency 2.76 0.93 3.69 - - - Price contingency 8.45 4.34 12.79 - - - TOTAL 62.99 22.15 85.14 -42.69 13.42 56.11 NOTE: Actual/latest estimate includes Physical contingency and Price contingency  23 a:icr\table-8b.wkl Table 8B Page 1 of 1 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Implementation Completion Report Table 8B. Project Financing Appraisal estimate (US$M) Actual/latest estimate (US$M) Local Foreign Local Foreign Source costs costs Total costs costs Total IDA 18.85 22.15 41.00 14.57 14.41 28.98 Cofinancing institutions - - - - - - Other extemal sources - - - - - - Domestic contnbution 44.14 0.00 44.14 27.13 0.00 27.13 TOTAL 62.99 22.15 85.14 41.70 14.41 56.11 '..^  24 a:\icr\table-09.wp Table 9 Page I of 3 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Implementation Completion Report Table 9: Economic Costs and Benefits Economic Analysis 1. Economic rates of return (ERR) for the three sub-projects were estimated at Appraisal according to a methodology set out in a Note to the Project File. The same methodology has been applied for the ICR but with updated assumptions and data. 2. In brief, the methodology compared the prospective sub-project costs and benefits over time against the costs of supplying water prior to implementation. Costs prior to imnplementation were time costs for water collection from wells. Costs of the sub-projects were capital and on-going operations and maintenance. The quantified benefits were two-fold: the cost savings for the same volume of water consumed after the sub-project as before, and. the estimated willingness to pay by the beneficiaries for the additional water consumed. A stream of net benefits was estimated from which ERRs were derived. However, the analysis recognized that there may have been important additional non-quantified benefits, particularly for health. 3. One of the principal differences between the implementation of the Project and its Appraisal was the delay in completion of the works, by up to four years depending on the sub-project. Delay in completion caused the deferment of both costs and benefits, and reduced the Project's ERR due to the extension of the construction period. The economic analysis was also performed on the assumption that implementation was over four years as planned. The results of the original Appraisal and ICR economic analyses were as follows: EstimtedR Quilon Municipality Developing Rurai Stable Rural At Appraisal 12.2%o 14.1% 7.1% As inmiplemented 8.7% 11.6% 5.2% If implemented 10.8% 13.6% 6.4% in 4 years 4. The principal assumptions and data items which were used in the ICR economic analysis indicating those which differed between the two analyses were as follows: (1) An adjustment for price distortions using the Standard Conversion Factor applied to all costs, and set equal to 0.9 (Memo from Director of 09-May-94). The Appraisal analysis used shadow exchange rates. (2) Actual capital costs and their timings (however, see also iterm (10) below). 0 & M costs were revised estimates.  25 a:\icr\table-09.wp Table 9 Page 2 of 3 (3) The GDP deflator up to 1992/93 was used to obtain constant prices. Thereafter the Indian inflation rate assumptions were used (Memo from Director of 09-Mav-94). The Appraisal analysis used inflation assumptions available at that time. 1990 was used as the year for constant prices in both analyses. (4) The wastage rate (difference between production and consumption quantities) was assurned to be 25 % for Quilon and 15% for the two rural sub-projects. Appraisal assumptions were not known. (5) Opportunity cost of capital was 12% (Memo from Director of 09-May-94) for the ICR. and 9% at Appraisal. (6) Renewal of the capital items of machinery and equipment was included in years 10 and 20 from commissioning, and assumed to be 13% of capital costs. Appraisal assumptions are not known. (7) The cost of water prior to the schemes was Rs 3.92/m3 at Appraisal and increased to Rs 8.01m3 for the schemes as implemented. This equals two hours of unskilled labor wages and the increase reflects the significant change in real wages in Kerala in recent years. (8) The price elasticity of demand used to calculate the benefits of additional supply was -0.5, the same as Appraisal. Other assumptions which were used in the ICR analysis which may be significant were: (9) All schemes were assumed to be commissioned by 1994/95 (although at Credit closing several were not completed although expected to be so within the time frame). (10) No allowance was made for the time costs to households for the collection of water from standposts. Financial Analysis 5. Financial projections were made at Appraisal on the individual sub-projects and for the water entity as a whole and are included in the SAR (Annex 19). Four principal financial ratios covering different aspects of cost recovery were used: working ratio (WR); operating ratio (OR); debt-service coverage (DSC), and rate of return on net fixed assets (ROR) 1/. Financial results for the entity have been prepared using actual out-turn data but separate analyses of the results for the sub-projects have not been undertaken. 6. The trends in operating income for the entity (operating revenues less operating costs incl. depreciation), comparing projections at Appraisal with actual performrance, were as follows:  20 a:\icr\table-09.wp ITabhle Page 3 of 3 Operating Income iLoss,. Rs million Appraisal Actual 1985/86 (32.4) (16.3) 1986/87 (41.2) (174.0) 1987/88 (59.0) (169.8) 1988/89 (80.0) (237.5) 1989/90 95.6 (216.4) 1990/91 70.6 (224.6) 1991/92 68.4 (311.3) 1992193 66.6 (250.0) 1993/94 162.4 (302.8) 7. Comparisons for the entity for the four performance indicators were as follows: WDR OR DSC ROR Appri Actual Apprl Actual Appri Actual Apprl Actual 1985/86 0.81 0.35 1.34 1.11 0.5 9.64 0 -0.3% 1986/87 0.86 1.35 1.36 2.22 0.32 -1.00% 0 -3.5% 1987/88 0.91 1.28 1.44 2.00 0.20 -0.82% 0 -3.1% 1988/89 1.02 1.67 1.53 2.38 0 -1.47% 0 -4.2% 1989190 0.53 1.45 0.75 2.00 1.85 -1.31% 2.7% -3.6% 1990/91 0.55 1.47 0.83 2.00 1.39 -0.43% 1.2% -3.4% 1991/92 0.57 1.85 0.86 2.38 1.3 -0.70% 1.6% -4.3% 1992193 0.61 1.41 0.87 1.75. 1.21 -0.28% 1.5% -3.2% 1993/94 0.48 1.49 0.76 1.79 1.72 -0.35% 3.4% -3.6% J1/ WR is the ratio of total operating costs excl. depreciation to gross operating revenues. OR is the ratio of operating costs incl. depreciation to gross operating revenues. DSC is the ratio of income before depreciation and interest to debt service charges. ROR is the ratio of income before interest to net fixed assets.  27 aAicr\table-10.wp Table 10 Page I of 4 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Impiementauon Completion Report Table 10 Status or Legal Covenants Agree- Section Covena- Present Original Revised Descnpnon of covenant Comments ment nt type scams fulfillmenc rulfillment date date KER 2.01 (a) 5 CP GOK declares comrrutment to objectives and Funds constramrEs and weak shall carrv out Parts C and D of the Project wich organzauon and management were due diligence and efficiency and shall provide responsible for lower achievement. funds, facilities services and other resources. Only 44% of the target was achieved. KER 2.01(b) 4 C GOK to provide KWA. Quilon and local bodies project tunds equivalent to USS19 million to be onlent at not less than 8.75 % repayable over 25 years with 5-year grace period. KER 2.05 5 CD 10/15/85 04/01/86 GOK to ensure KWA fully staffed and all senuor post sancooned and filled KER 2.06 5 C 12J31/85 GOK to cause all local bodies partcipating in low-cost saruitaon (LCS) component to pass by- laws saisfactory to IDA to regulate construction of LCS unuts KER 2.07 5 CP GOK to provide the necessary legal cover to The KWA Act became affective maintain KWA's legal status. power and frmm 04-Aug-86, and repaced the funerons as vested in it by the Ordinance cottinuing Ordinance. However, KWA's powers re personnel appointments have since been curtiled by GOK Order. The KWA Act, per the Cost & Revenue Study, gives KWA full authority over tariffs. However. in practice. GOK approvals have been sought on tariff revisions. A revision to the Act(Dated 02-Mar-93 but effective 31-Dec-92): (i) authorizes a Fjnancial Member" on KWA's Board, and (ii) permts. on a resticted basis. a murucipality to opt out" of KWA's management of its water supply. KER 3.01 (a) 9 C 10/05/85 GOK to cause Quilon to: (a) set up a separame Quilon Munucipaliry set up a and (b) cell for moniuonng and reporting its water supply separate accounting cell to report its accounts, and (b) mauntain records and accounts water sector funances in Jul-85. adequate to reflect in accordance with accrual However, effective 01-Apr-90, accounang practices its operation and financial KWA assumed the responsibility for condition pertaming to its water supply sector. Quilon's water supply.  28 a:\icr\table-1O.wp Table 10 Page 2 of 4 Agree- Section Covena- Presenm Original Revised Descnption ot covenant Comments ment nt type stamzs fulfillment tulfillment date date KER 3.01(c) I C 12131187 12/31/88 GOK to cause Quilon to mainmain its financial Effective 01-Apr-90 Quilon water accounts tor water suppty on accrual accounring supply system became the basis and to have its accounts/financial responsibility of KWA. staements audited for each financial year by independent auditors acceptable to IDA and to provide IDA. no later than 9 months after end of fiscal year. certfied copies of financial stamments and audit reports. ICER 3.02(a) 1 CD 12/31/87 03/15/18 GOK to cause KWA and local bodies to mamiin Separate accounts are mamitaned for (b) A (c) for the low-cost-sanitation components separate low-cost sanutation components. accounts to have the said accounts aujt: Audiu from the Examiner of Locai annually by independent auditors and to provide Funds Accounts were not financial statements/audit reports to IDA within 9 satisfactory: audits by pnvate months of end of each fiscal year. auditor. KER 3.03 2 C GOK to cause the Local Bodies to take responsibility for the cost recovery from the household beneficiaries under Parts C and D of the Project. KER 3.04(a) 2 C 12/31/87 GOK to cause Quilon to implement interim tariff Effective 01-Apr-90 Quilon water inerfese supply system became the responsibility of KWA. KER 3.04(b) 2 C 12/31/87 GOK to implement interim tariff increase in Efrective 01-Apr-90 Cochin water KWA service area and in respect of bulk rate to supply system became the Cochin responsibility of KWA. KER 3.05(a) 2 CD 12/31/87 04/01/88 GOK to iniuate cost and revenue study in KWA'sThe srudv initiated only on 05-Apr- service area and Quilon 91. Final report was available in Jul-92. KER 3.05(b) 2 CD 0NM01/90 GOK to cause and enable KWA to adopt Substanual tariff increase became appropriate new tariffs. considering findings of effective 01-Oct-91. A further study in 3.05(a). revision with 15% automaEic anmual increase effective from 01-Jun-93. KER 3.06(a) 2 C 04/01/91 GOK to cause and enable Quilon to make Effective 01-Apr-90. Quilon water (i) suitable adjustmenes to water tariffs to produce. supply system is the responsibility of beginning FY91 to produce revenues sufficient to KWA. cover all O&M costs and debt service requirements related to water supply. KER 3.06(a) 2 CD 04/01/91 GOK to cause and enable Quilon Panchayats. Schemes not completed at Credit (ii) Komtyam Panchayats and Greater Cochin closing, but new State-wide tariff development Area to make suitable adjusrments adopted effective 01-Oct-91 and to water tariffs. beginning FY91 to produce revised with effect from 01-Jun-93. revenue sufficient to cover all O&M costs and KWA is responsible for water debt service requirements related to water supply operations. supply.  29 a:\icr\table-10.wp Tabil 10 Page 3 of 4 Agree- Sccrion Covena- Present Original Revised Descripnon of covenant ConmmenLs mert nt ype siatu rulfdilment tulfillment date date KER 3 06(a) 2 CD 04U01/90 GOK to cause and enable rural areas or Only PuEhencruz and Vilappil (iii) Putbencruz. Adoor. Chithara and Vilappil to schemes completed and make suitable adjustments to water tanffs. commissioned. Adoor and Chidiara beiantrug FY90 to produce revenues sufficient to schemes not completed at Credit cover all O&M costs related to water supply. zlosing. State-wide tanff adopted effective 01-Oct-91 and revised with effect from 01-Jun-93 is applicable. KER 3.06(b) 2 CP GOK to compensate KWA for any shortfall in GOK funds intended for investment revenues account of its O&M/debt service were diverted by KWA for requirements for financial years 1986 to 1989. opention and maitenance purposes in some years. KWA 2.01(a) 5 CP 03/31/90 KWA to carrv out Parts A. B. E and F of the Part F. revolving fund for project as described in Schedule 2 of the DCA. connections did not receive corsimers response despite upward revisions to eligibility criterta. KWA 2.01(b) KWA to carry out its pan of the project per imnIemenration procedures in Schedule 2 to Lhe Project Agreement - interalia: 10 C 1. KWA Leak Detecton Program by 31-Dec-85. 3 CP 2. KWA Leak Detecuon Unit established by 01- Leak Detection Unit no longer Apr-86. operatonal. 5 C 3. KWA LCS Cell by 15-Oct-85 KWA Rural LCS Feasibiliry Study by 0 1-Oct- 35. 5 CD 4. KWA commence design or Training by 01- Study commenced in Sep-89 and Jan-86. Final report was available in Jun-92. 2 NC 5. Meet agreed billing and collecuon targets per Records do not permit definitive Apr-85 Agreed Minutes para 22: assessment but not in compliance. '4 DATE BILLINGS COLLECTIONS By 31-Mar-87 80 % Accounts 80% Billings By 31-Mar-88 95% Accounts 90% Billings 9 C 10/15185 6. Establish Project Management Unit (PMU) widt powers, functions. financial and administrauve policies as agreed with IDA and maaged by a Deputy Chief Engineer  30 a:\icr\table-lO.wp Table to Page 4 of 4 Agree- S-cuon Covena- Presenc Original Rcvised Descnpoon ot covenant Commenus mete nt type stanus fulfillment ruifillment date date KWA 3.01 j C KWA shali carry on its opertions and conduct its affairs in accordance with sound administrauve, financial ard public utility pacuces under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. KWA 3.03 0 O iC KWA to carry insumance coverage suiable to Not done. Audim of fixed asets in IDA. progress. KWA 4 01(a) L C KWA to maiman its records and accounts on an accrual accounung basis adequate to retlect its operanons and financial conditions. KWA 4 01(b) I CD 12131187 & 12I31/88 KWA to have its annual accounts and financial The delays in submission of audit (i)&Gii) then semmnenu audited by independent auditors report are Lrraduallv being reduced. arnUai-ly accepable to IDA and to provide IDA. no later The delay is iiniked to iadequate by 31-Dec thun 9 months after and of fiscal year. certfied statfing of KWA's Finance and copies of financial statements and audit reports. Accounts Department. KER - Kerala Agreement with State of Kerala KWA - Project Agreement wich Kerla Water Authority Covenam types: Prsent sttus: I- Accounussaudits 8 - Indigenous people C -covenam complied with 2= Financal performnaa revenue 9 - Monitrng, review, and reporurng CD -comptied with after delay generanon from beneficiaries 10 - Project implementauon not covered CP- complied with pamaliv 3 - Flow anc uulizauon of project funds by categones 1-9 NC - not complied witn 4 * Counterpart funrding I -Secroral or cross-secwral budgeurv 5- Management aspects of the project or other resource allocation or executing agency 12 - Sectol or cross-sectoral policv/ 6 - Environmental covenants regulawrvrinsttutonal action 7 Involuntarv resettlement  31 a:\icr\table-11.wkl TabLe 11 Page 1 of 1 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Implementation Completion Report TabLe 11: Compliance with Operational Manual Statements Statement number and title Describe and comment on lack of compliance OD 13.10: Borrower Compliance with There has been considerble delays in Audit Covenants submission of audit reports. However, over the project implementation period, the deLays are graduaLly reduced. The delay is Linked to inadequate staffing of KWA's Finance and Accounts Department. However, the 1992-93 accounts and audit reports, due December 31, 1993, were not received until February, 1995 and the 1993-94 accounts and audit reports, due December 31, 1995 were not received by June 30, 1995.  32 a:\icrtable-12.wkl Table 12 Page 1 of 1 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Implementation Completion Report Table 12: Bank Resources: Staff Inputs (USS thousand) Planned Revised Actual Stage of project cycle Weeks USS Weeks US$ Weeks USS Through appraisal - - - - 37.4 - Appraisal-Board - - - - 6.8 - Board-Effectiveness - - - - 1.2 - Supervision - - - - 129.7 - Completion - - 8.2 8.9 6.0 TOTAL - - - - 181.1 .1*  Iable 13 Page I o 2 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr 1622-IN) Implementation Cormpleion Reo Table 13 Bank Resources Missions - - -- - -- - - --- .. __..... _. _......_...___._ .........._..__.. __- PerlorMan rFiag Number Days Speaalizsd Implemen- Deveop- Siag of projed MontW of in staff skdUs llaon ment cyqd yew persons field represented status rnpacl Types of problems Through aWpr Nov-DecM2 2 12 SE. FA - - Oct-83 3 10 SE, FA. EC - - Apral May-JunI84 6 20 SE. FA. TR, OR, LE Appraisal through - - Nil - - - Daod approval Board approval Aug-85 1 2 FA uvough effecteness Supervision Feb-86 2 10 FA. SE 1 1 Sme and acquston fell behind Four montits delay in appoiing finanialw consultanis and consequenl delay in lull implementation ot the new accounting and financial system anticipated Aug-86 1 8 FA 1 1 Prolect implementation is delayed by ive mont due to Idt siwnng d pojed ad KWNA adjustment lo IDA procuremenl and reporing procedure. Mr-87 3 8 FA. SE 1 1 Waler supply construclion delayed by six monts due to KWAs adustmaui to IDA procutreent and reporling procedures Nov-87 1 4 SE 1 1 * (see note below) Feb-88 2 8 FA. SE 1 1 Implementation of new financial systems and dvil wol are tang behind. MY-89 2 3 SE, FA 2 2 Covenants relating to cointerpart lunding and GOICs interm fundig of KWAa operatiNg delcit are not in compliance Audit reports are overdue. Accounting reforms are btang longer lo inplment Commenem ol covenanted Cost and Revenue stdy nd Trang tudy are overdue Apr-90 3 13 SE. FA. EC 3 2 Slower implementation pace, counterpart hning conarnsm; ousltading critical land acquisition m three of the seven water supply schemes, outstandinq rnal design and  ail:Wxable-13 wkl Table 13 Page 2 of 2 Performance rating Number Days Specialized Implemen- Develop- Slage of project Month/ of In stafl fskills tation ment cycle year persons rield represented stalus impact Types ol problems .~~~~~~~~- - - -- - -- - -- - _ --- - - ........___. . ... .. _..,,,... . , . ,,...., . .. . .. ... .. .. .. . .. .. . . . .. . Nov/Dec-90 3 17 SE. FA. EC 3 2 Slow progress, non-compliance of covenanis including audil covenants, counlerpari funding constraints Mar-91 3 15 SE. EC, FA 3 2 Slow piogress in implelrient.iltiro and studies initialed under the Technical Assistance have been substatilially delayed Sep-91 3 14 SE. FA, LO 3 2 Delays in complelioln ol accoUnts antd audits. weak financial management. weak project management: and delays in appointment of stall for revenue billing and collection MaylJun-92 3 14 SE. FA 3 2 Slow progress and Weak Inancial performance Sep/Oct-92 2 14 SE, FA 3 2 Counterparl funding constraints, need for a further larill revision, need for additional permanent qualified staff 1i) the Finance and Accounis Departmenl ol KWA, weak organization for and nar,agemenl of Ihe low-cost sanitation program, and poor procedtries for the related niallers of cost estimation and contract avwaids Feb-93 4 12 SE. SA, EC 2 2 Slow progress Nov-93 4 14 SE, SA. FA 2 2 Slow progress in water supply works and LCS implementation. November 1987 Supervision mission dealt with procurement matters only. No report is available Key to specialized staff skills FA Finacial Analyst; SE Sanitary Engineer. EC Econornist, TR Training. LO Disbursement OR Organization and Management, LE Legal; SA Low Cost Sanitation Specialist  APPENDIX A .4.  35 a:\am\keo794am.icr INDIA: KERALA WATER SUPPLY AND SANITATION PROJECT 'Cr. :622-IN) Implemenacticn Completion Reporting Mission 04-16 Jul-94 AIDE-MEMOIRE PaQe I. BACKGROUND AND INJTRODUCTION 2 The Mission 2 The ICR Process 2 The Project 3 - Agreed Objectives 3 - Project Description 3 - Project Completion Schedule 4 - Overview of Project Completion Status 4 - SAR Cost Estimates, Revisions and Expenditures 7 The Credit 7 II. VIEWS ON PROJECT IMPLEMENTATION 8 Bank view on Project implementation 8 GOK-KWA View on Pro]ect implementation 11 III. 'MPLEMENTATION COMPLETION REPORTING - GOK-KWA CONTRIBUTTION 12 IV. PROJECT'S OPERATION AND SUSTAINABILITY 12 The Water Supply Components 12 The Low-Cost Sanitation Components 13 V. OPERATIONAL ACTION PLAN AND PERFORMANCE INDICATORS 14 Annex 1: Water Supply Component: Description of Works Implemented 10 pages Annex 2: Low-Cost Sanitation: Latrines Constructed: Urban 1 page A=gx 3: Low-Cost Sanitation: Latrines Constructed: Rural 1 page Annex 4: Project Cost Estimates and Expenditure I page Annex 5: Operational Action Plan and Performance Indicators 10 pages Annex 6: List of Key Persons met 1 page  36 INDIA: KERALA WATER SUPPLY AND SANITATICN PROJECT 'Cr. 1622-IN) Impiementaticn Compietion Reporting Mission 04-16 Jul-94 DRAFT AIDE-MEMOIRE I. SACKGROUND AND INTRODUCTION The Mission 1.01 A mission of Mr. ShyamaI Sarkar, Sanitary Engineer, New Delhi Office of the World Bank and Mission Leader and Mr. V.R. Iyer of the UNDP/World Bank Regional Water Supply and Sanitation Group (New Delhi RWSG-SA) visited Kerala from 04-16 Jul-94 to discuss with the Government of Kerala (GOK) and Kerala Water Authority (KWA) the Kerala Water Supply and Sanitation Project, the Credit of which closed on 31-Mar-94. 1.02 The mission's main objectives were: (a) to review the Kerala Water Supply and Sanitation Project and record views of the Bank, KWA-GOK on the project implementation and operational plan; and (b) to advise and provide support to GOK-KWA for preparing its own contribution to the Implementation Completion Report (ICR). 1.03 The mission's program has included: (a) field visits to all the seven water supply schemes taken up under this Credit, and visits to four Municipalities (Punalur, Adoor, Mavelikara and Attingal) and four Panchayacs (Vilavoorkal, Vadakkevila, Eravipuram, and Sakthikulangara) where low cost sanitation units were implemented under this Credit, with a view to: (i) examine the degree of achievement of project activities and GOK-KWA performance; and (ii) ascertain the prospects for the sustainability of the schemes implemented, including the plan of their future operations; (b) discussions with officers of the GOK (Secretaries to the State Government, Director of Panchayats, Director of Municipalities, several Panchayat Executive Officers and Municipal Commissioners) and the senior management staff of the KWA to review the Project with regard to the agreed project activities in its physical, institutional and financial aspects, and the problems faced and lessons to be learned from this operation; and (c) review the data collected and needed for Statistical Annexes of the ICR, and any other additional data required for the ICR. 1.04 A State-level wrap-up meeting was held on 16-Jul-94, chaired by the Additional Secretary, Local Administration Department and attended by GOK and KWA officials. A list of the key officials met by the mission is in Annex 6. '.. 1.05 The mission wishes to acknowledge with thanks the courtesy and cooperation which it has received from the GOK-KWA staff in the conduct of its work and the project data provided to the mission. 1.06 A previous mission visited Kerala in May-94 when a GOI-GOK-KWA request for Credit extension to 30-Sep-94 was under the Bank consideration, and discussed generally the completion reporting steps and ICR data requirements. That mission informed GOK-KWA that as no communication regarding the Credit closing date extension was received by them, they should assume that the Credit closing date will not be extended, given that extensions accumulating to more than three years are granted only in the most exceptional circumstances. The ICR Process 1.07 The Bank's letter of 20-Jun-94 to GOK copied to GOI, indicated the purpose of the ICR, the process involved in its production, the borrower contribution and the borrower responsibilities. The ICR aims at improving the  37 I effectiveness of Bank loans and heightens che Borrowers' ability implement, and operate projects. The ICR system is designed to: de feedback from impiementation experience to imporove ccuntry ng strategies and the design of future operations; ensure greater development impact and sustainability of projects .g the operaticnal phase; force self-evaluation, including development -rmpact assessment, by 3ank and Borrowers; requirements for accountability and transparency in Bank .ities; and :ain a record of the implementation experience of Bank-financed itions to facilitate assessment of development impact. 2ctives )roject was formulated with the broad aim of improving ial, operational and financial performance throughout the water sanitation sector in Kerala, while also tackling specific physical X were identified. The objectives of the Project were to: strengthen sector-wide management in the newly created Kerala Water qastewater Authority (KWWA), and municipalities which operate their iistribution systems by promoting manpower training, operational :iency (through the reduction of water wastage and improved central Lces), sound accounting systems and development of cost recovery -ts; ide piped water supplies to about one million people residing in six L areas, most of whom have no safe supply; ease the supply of water and to extend the distribution facilities ae urban area so as to provide reasonable access to about 150,000 cly low income) people; and oduce low-cost on-site sanitation facilities and to finance their truction so as to benefit about 200,000 people residing in ten urban s and to undertake a similar pilot program for low-cost sanitation ural areas. scription Project components were ("Part" refers to the Project Description - of the Develcpment Credit Agreement): l Stable Areas - Design and construction of four new schemes to ide a design total supply of 32 mld to four rural'stable' areas: encruz, Adoor, Chithara and Vilappil. Each scheme was based on a le source and included an intake, treatment plant, transmission, ribution works and meters (Part A). 1 Developinc Areas - Design and construction of schemes to supply e rural 'developing' areas: Quilon panchayats, Kottayam panchayats the Greater Cochin Development Area (GCDA). The design supplies for e schemes totalled 147 mld; Quilon panchayats was to share the uction facilities of the Quilcn Municipality. Each scheme was based single source and included treatment plant, transmission, ribution works and meters (Part A). .n Area - Design and construction of a scheme to augment the supplies he Quilon Municipality. The design supply of the scheme was to be ild. The scheme included intake, treatment plant, transmission, ribution works and meters. Replacement of a deteriorated trans- ;ion pipeline to reduce water wastage was also included (Part B).  38 Urban Low Cost Sanitation - A prototype sub-project to provide low-cost sanitation to 10 towns which have been selected under the UNDP India Low-Cost Sanication Project (Part C). Rural Low Cost Sanitation - A similar prototype sub-project to provide low-cost sanitation facilities to rural areas in the State (Part D). Technical Assistance - Assistance tO KWWA and to the Municipalities (which operated their own distribution systems) in developing sector- wide training services and providing centralized services which included leak detection units, meter repair facilities, workshops, laboratories and stores. In additicn, consulting services were included for implementation of comprehensive financial systems, training in these systems, a valuation of KWWA's assets and a state-wide water tariff study (see para 1.18 for consulting services for possible future KUDP) (Part E). Revolving Fund for Connection - A revolving fund for the provision of loans to assist low-income households to meet their costs for completion of house-connections (Part F). Proiect Completion Schedule 1.10 The Credit Agreement was signed on 24-Sep-85 and the Credit was effective from 09-Dec-85. The Project was scheduled for physical completion by 31-Mar-90 which is an elapsed time of 4.3 years from the date of Credit effectiveness. The Credit closing date was originally fixed for 31-Mar-91 and subsequently, was extended four times to an aggregate period of 3 years with the final Credit closing date being 31-Mar-94 (para 1.27). Overview of Pro-ect Completion Status at Credit closinq The Water Supplv Components 1.11 The water supply components envisaged seven schemes to benefit 36 panchayats and one municipality, and accounted for about 61% of the total project costs. The table below indicates the number of panchayats, population coverage and number of service connections estimated for each of the schemes. Panch- Munici- Project Popula- New conns. bv Mar-95 yats pality Area Population i:ion to House Stand- SCHEME Nos Nos sqm Year 1990 benefit conns. posts Puthencruz 4 95.5 85,890 80% 4,638 374 GCDA 12 243.8 382,060 90% 18,709 1,400 Kottayam 4 99.0 162,100 90% 7,960 1,252 Adoor 5 160.0 157,000 70% 8,478 696 QuilQ;1 6 1 65.2 187,300 (Panch)70% 20,992 1,183 161,620 (Muni) Chithara 4 111.3 124,000 90% 6,696 384 Vilappil 1 19.2 26,820 76% 1,448 115 36 1 794.0 1,286,690 68,921 5,404 1.12 These schemes were based on sufficiently reliable surface water sources - five of them would draw water from other major impounding projects and the two remaining schemes (Adoor and Chithara) would rely on unregulated run-of- river flows. A weir is under construction (incomplete at Credit closing, due for completion by Mar-95) on Achencoil River downstream of intake well to improve the dependability of water source for Adoor scheme (Annex 1, para 10). 1.13 Implementation of the above water supply schemes was taken up in mid 1986, except Kottayam where the implementation was taken up in Jun-87. KWA forecast of completion of commissioning of these water supply schemes was revised many times. After a long delay, only two (Puthencruz and Vilappil) schemes were completed and fully commissioned, and another one, the GCDA  39 scheme, was partly ccmmissioned benef:ting or.iv 5 of 12 panchavats at the time of Credit closing 'l-Mar-94). Other schemes were at substantial completion level and were expected zo be fully commissioned by end of Sep/Oct-94. The status (as of 30-Jun-94) of all seven water supply schemes as reported to the mission by KWA was as follows: Actuali/ Expended Percent Estimated SCHEME Rs million Compieticn Remarks Compign Date Puthencruz 45.4 1009 Commissioned 31-Mar-93 GCDA 244.5 98% Partly Commiss'd 30-Sep-94 Kottayam 117.3 98% Not Commissioned 31-Aug-94 Adoor 72.0 96% Not Commissioned 31-Aug-94 Quilon 228.0 95% Not Commissioned 31-Oct-94 Chithara 69.5 95% Not Commissioned 30-Sep-94 Vilappil 17.4 100% Commissioned 31-May-91 1.14 Annex 1 contains mission's observations on each of the seven water supply schemes and a tabular presentation of physical descriptions of works implemented. All works, except treatment plants for the GCDA and Vilappil schemes, were designed and constructed to meet the prospective demand of year - 2011. The water treatment piants for GCDA and Vilappil schemes were installed to meet the demand of year 2C01 only. The Low Cost Sanitation (LCS) Components 1.15 Overall achievement of 44% of 55,631 (SAR target) in respect of construction of low cost sanitation facilities is disappointing. Only 46% of the latrines planned (SAR target) in the urban areas were constructed, though the program was extended to cover 5 more municipalities than initially planned. In the rural areas, only 42% of the planned (SAR target) latrines were constructed in 32 panchayats. The implementation status is summarized below. Annex 2 & 3 of this aide memoire show the achievements in urban and rural areas respectively. Urban: Municipalities Rural: Panchayats Number of Number of Number of Number of Municina- sanitation Panchayats sanitation lities units units SAR target 10 25,631 32 30,000 Rev. target !May-92) 15 13,941 32 1/ 16,000 Actual achievement 15 11,730 32 12,740 Achiev/SAR Target 150% 46% 100% 42% * Achiev/Rev Target 100% 84% 100% 80% 1/ Revised to 60 in 1988 from initial 32, but scaled back in May-92 The Technical Assistance Comnonent 1.16 The planned TA included various consultant studies [(i) assessment of training needs; (ii) cost and revenue; (iii) valuation of assets; and (iv) implementation of a comprehensive financial and accounting system] and training implementation, and strengthening of centralized services. All these activity commenced some considerable time after Project inception. The financial and accounting study was delayed by more than one year, the training study was delayed by four years, and the cost and revenue study was delayed by over four years. 1.17 During the course of Project implementation additional studies and additional items for the centralized services were included aiming at strengthening KWA's organization and management capability. Technical assistance from consultants was expanded and it covered financial management  40 and accounting, the cost and revenue study, the training study, design and introduction of pro)ect monitoring system, KWA organization review study, audits of KWA's consumer ledgers and assessment of KWA's dues from local bodies. Bulk meters, domestic water meters, computers and vehicles were additional items procured. KWA's Organization study was not compiete at the Credit closing, but a draft final report was available. 1.18 Several consuiting service assignments for the possible future Kerala Urban Development Project ;KUDP - para 1.19) were also financed. The KUDP preparation studies reiated to the feasibility study, environmental assessment and final detailed engineering of water supply, sewerage & sanitation, roads and traffic management, surface water drainage and solid wastes management as well as studies on municipal finance and accounting systems. 1.19 To accommodate financing the costs of consulting services to help prepare a possible future KUDP, an amendment to the Project description in the Schedule to the Deveiopment Credit Agreement iDCA) was agreed between the Bank and the GOI. However, _n a letter of 25-Mar-94 to GOK, the Bank had advised that this possible KUDP had been deleted from the Bank's lending program due to slow government decision making on actions agreed with KUDP preparation mission. However, the Bank letter did indicate that there may be some possibility that the water supply and sanitation investments planned in the proposed KUDP could be financed under some future Bank lending operation but that this possibility was yet to be assessed in detail. 1.20 Almost all the KUDP studies (para 1.18) were in advanced stages of completion at the time of mission's visit, and these studies were scheduled to be fully completed at various dates before 30-Sep-94. The mission was informed that even though the Bank's decision to delete the proposed future urban development project from the lending program might affect further progress of the consulting studies, GOK remains committed to complete all the studies taken in hand and will strive to complete them at the earliest. 1.21 Bulk meters and domestic water meters. All the bulk meters (153 nos.) procured to facilitate proper performance monitoring and operational management of the seven water supply systems implemented were allotted to the schemes. Some have been installed (in Puthencruz and in Kottayam) and others are being installed. The supply position of the domescic consumer meters is not encouraging. Only 38,500 (about 34%) meters were supplied against orders for 113,921 to be completed by 23-May-94. The mission learnt that KWA was reconsidering the procurement of the remaining meters as they have decided to change policy and have the ownership and maintenance of meters located with the consumers. The consumers are proposed to be penalized for r.on-performance of water meters. 1.22 Leakage detection and meters repairs. Both leakage detection and establishment of consumer water meter repairs were taken up on a pilot basis by KKA. The leak detection pilot study was taken up in Trivandrum and a Leak detection cell was formed in Jun-86. KWA could not mobilize resources to implement the recommendations of the pilot study and no action was taken. For meter repairs, seven private servicing stations were established in Trivandrum in Jun-88. Initially, this experiment had shown some encouraging results, but with the passage of time, the performance fell below the expected level and KWA closed down this option. An alternative arrangements for meter repairs using the Kerala State Women's Development Corporation has been worked out and three servicing stations - one each at Trivandrum, Kochi and Kozhikode, are planned. Installation of these service stations is awaiting vacation of Court stay orders. The Revolving Fund for Connections 1.23 The Revolving Fund for connections provided in the Project was based on the belief that many households may be constrained from requesting for private connections because of the lump sum connection charges. However, a request was made by one consumer only, in spite of promotional efforts by KWA  41 involving panchavats in Vilappil and Puthencruz and a relaxed eligibility criteria and increased loan amount. SAR Cost Estimates, Revisions and Exoenditures 1.24 At appraisal the Project cost was estimated to be Rs 936.79 million (about USS 41.0 million). The revised pro]ect cost estimated on 31-May-92 was Rs 1,278.8 million. The revision of cost estimates arose partl}r because of (a) estimating revisions; 'b) some adjustments to the Project scope in the form of distribut:on systems extension commensurate with the roads development in the Project area; 'c) financing of consulting studies for preparation of a future KUDP (para 1.18) ; :d) prices offered for materials in respect of some ICB procurement were substantially lower than the estimates; and (e) availability of substantially high local currencv due to the devaluation of Rupee during the project implementation from Rs 1' (at appraisal) to about Rs 31 per US$ 1.00. 1.25 As against this revised estimated cost 'para 1.24), the project expenditure was Rs 1,138.5 million at Credit closing, which is about 22% more then the SAR estimate in Rupee terms, but 11% less than the-May-92 estimates. A comparison of SAR estimate, GOK-KWA revised estimate of 31-Mav-92 and actual project expenditure at Credit closing is given at Annex 4, which mav be summarized as follows: (Rs millicn) SAR 31-May-92 31-Mar-94 Item Estimate Estimate Actual Exp. 7 Water Supply Systems 671.65 785.44 794.01 Water Supply - Other 46.75 65.06 19.07 Low-Cost sanitation 82.65 83.02 60.53 Technical Assistance 1.95 102.75 34.99 Training 9.73 17.44 3.39 Land and Engineering 123.86 211.55 226.53 TOTAL 936.79 1,278.86 1,138.52 % over Appraisal Est. 100 137 122 D over 31-May-92 Est. 73 100 89 1.26 It is evident that the difference between the revised estimates and the actual expenditure is mainly accounted bv lower expenditure in (i) low-cost sanitation both in urban and rural areas (para 1.15 & i.25); cii) Less than anticipated expenditure in the procurement of meters tonly about 34% domestic consumer meters procured -para 1.21) and meter workshops (para 1.22); (iii) no expenditure incurred for Revolving Fund for connectlons (para 1.23); and (iv) lower utilization in respect of training programs. The Credit 1.27 The key dates related to the Credit, are as follows: Elapsed Time (Year) from Effectiveness Appraisal MayjJun-84 Board Approval 16-Jul-85 Signed 24-Sep-85 Effective 09-Dec-85 0.0 Project Completion 31-Mar-90 4.3 Original Credit Closing 31-Mar-91 5.3 First Extension to 30-Sep-91 5.8 Second Extension to 31-Mar-92 6.3 Third Extension to 31-Mar-93 7.3 Fourth Extension & Credit Closing 31-Mar-94 8.3 SDR 20.0 million of the original Credit of SDR 42.7 million, was canceled in Dec-91 at the request of the Government of India (GOI)  42 1.28 In response to the Mar-89 Bank supervision mission request for a project restructuring proposal as the Credit could finance larger investments than those represented by the on-going project, a restructuring proposal was received by the Bank _n Nov-90. :t included proposals for the completion of twelve water supply schemes whose construction was initiated with financing from the Life Insurance corporaticn (LIC). It also included proposals for water supply improvements tz the system serving Trivandrum, low-cost sanitation, training, water meters, vehicles, a revolving fund for connections, meter testing and repairs and for leak detection studies by consultants. The cotal estimated cost of these proposals was Rs 915 million. 1.29 Under the Special Action Program' of the Bank, designed to assist India with the balance of payments difficulties arising from the Gulf crisis, the disbursement ratios under the Credit were increased in 1991. A reassessment of the Credit utilizaticn concluded that the Credit could at best finance additional investmencs to the tune of Rs 600 million only. The reduced availability of finance required reconsideration of the scale of the proposals (para 1.28) by GOK/KWA. Subsequently, with the cancellation of SDR 20.00 million (para 1.27) in Dec-91 at GOI request, the Bank's consideration of restructuring the Project was dropped. II. VIEWS CN PROJECT IMPLEMENTATICN Bank . -ew on Proiect implementaticn 2.01 The Project has achieved a worthwhile improvement in management capability in KWA and in staff training and in movement towards financial viability. The physical targets of the Project have been partially achieved. 2.02 The Water Sulnlv Comronent: At the beginning of the project implementation, and for the first few years, the attention of GOK-KWA was entirely on the centrally administered procurement of large contracts, comprising ICE procurement of pipes, and LCB procurement of turnkey contracts for the water treatment plants. Such actions were not supported by sound procurement and other activity scheduling, such as the preparation of designs and detailed engineering drawings, preparation of cost estimates, and contract packaging. 2.03 The lack of a sound procurement planning and activity scheduling provided an environment for the field divisions to embark on smaller contracts with a few exception (e.g. distribution extensions), primarily to keep the contract value within the award decision powers at the local level. This led to uncontrolled proliferated a large number of smaller contracts for the water supply schemes. For instance, there were 546 LCB civil works contracts of aggregate value of Rs 446.3 million, and 710 LCB goods contracts of aggregate value of Rs 98.1 million. The substantially higher organization and management attention required for coordination of the availability of various goods and materials on site, in a systematic way, for timely construction was not available where such a large number of small contracts were employed. There are instances in GCDA, Adoor, Quilon, and Chithara that specified pipes in adequate quantities were not procured through the large ICB contracts requiring the field staff to use the nearest pipe size they could obtain locally through LCB small contracts. 2.04 The Engineer responsible for scheme implementation could not pay the required attention on the specific work as his/her district wide responsibility (except for Puthencruz and GCDA schemes) did not provide enough time for the Bank financed water supply scheme alone. Such an unsatisfactory organizational set ap at scheme level was further affected by very fast turnover of key senior/middle level staff. For example, the post of Chief Engineer (South) who is responsible for all the water supply schemes had seen thirteen incumbents during the project implementation period of about 8.3 years. Similarly, since effectiveness there have been seven superintending Engineers of Quilon Circle, responsible for Quilon, Adoor and Chithara water  43 supply scnemes, _2 Executive Engineers, Quilon and seven Executiv,e Engineer, Chithara. 2.05 The organizaticn and manacement system resulted in a very slow pace of implementation, and the physical works carried out, generally, did not follow sound construction management practices with inadequate supervision by senior staff: 2.06 mnadeauate provision of councerpart finance further slowed down the physical progress. The mission learnt that the very low disbursement rate (20%) for LCB works and goods for a project which financed about 63% of project costs through LC3 was unattractive for the GOK to commit a higher budgetary provision. However, with the improved disbursement ratios consequent to the "Special Action Program" of the Bank (para 1.29) the counterpart finance avaliability eased considerably with increased commitment of GOK-KWA, and no shortage of funds was experienced in the closing years of the Project. 2.07 The mission observed that the implementation of many small works contracts (para 2.02) over a long period of time and having inadequate coordination among various suppliers, and inadecuate maintenance of test records and drawings, proved obstacles for quick commissioning of the completed schemes. The pre-ccmmissioning exercise required a further thorough testing and repairs/rectifications or improper jcints, missing links, pipe bursts, pipe leakage, pipe blockages, etc. which are not expecced in a new pipe network if laid properly and tested for leak tightness before back- filling. 2.08 The low cost sanitation implementation which was the responsibility of GOK (Directorate of Municipal Administration (DMA) for urban areas, and Directorate of Panchayats (DP) for rural areas) got off to a good start in the first year of implementation and peaked in the following year, and then registered a declining rate of progress except for the last two years of the extended period of closing. This declining progress resulted by the insufficient management control, counterpart funds constraints and inadequate technical support from KWA to DMA and DP. The Technology Advisory Group (TAG) technical assistance available for this program also ceased in 1988 as its operation was closed down. The annual construction performance was as follows: No. of latrines constructed YEAR Urban Rurai Totai 1986-87 2,449 2,500 4,949 1987-88 3,806 4,506 8,312 1988-89 1,205 744 1,949 1989-90 762 431 1,193 1990-91 763 174 937 1991-92 146 83 229 1992-93 323 269 592 1993-94 2,276 4,033 6,309 TOTAL 11,730 12,740 24,470 SAR TARGET 25,631 30,000 55,631 % Achieved 46% 42% 44% 2.09 Although overall achievement is only 44% of the target, despite 8 years of effort, the Project has produced the following positive outcomes: a) more than 146,000 poor people were benefitted; b) many women secured access to a basic facility; c) project implementation experience of several local bodies strengthened; d) several masons were trained and they constitute a valuable local resource; e) local bodies were exposed to improved accounting systems; and  44 f) substantial amount ftotalling Rs 6.7 million) is available with DMA/DP/Locai bodies as a result of loans recovered from project beneficiaries and could be used to benefit more poor people. 2.10 The institutional development and financial management and accountinq aspects of the ProDect got off to a slow start. The covenanced "Cost and Revenue", Study and "Training" Study were ccmmenced only after substantial delay of several years ipara 1.16) and management actions anticipated in response to such studies were commensurately delayed. Technical assistance for improved financial accounting practices commenced more promptlv, but inadeauace staffing levels and inappropriate organizaticnal arrangements for the more junior levels of KWA's concerned staff hampered prompt implementation. 2.11 The recommendations of the '"Cost and Revenue" Study has brought in an important change in water tariff policy. A new tariff was introduced in Jun- 93 with provision for subsequent annual automatic increase by 15% (The Kerala example of annual automatic tariff increase is being adopted in Uttar Pradesh, Rajasthan and few other States in India). Following the "Training" Study, a training center has been established in KWA and after a belated start in 1991, the training program has achieved substantial momentum. 2.12 The audit covenant was never in compliance due to delays in submission of audit reports. These delays have been reduced over the project implementation period as the financial management and accounting procedures were partially improved with the introduction of Accrual Accounting System (AAS) and positioning of personnel and personnel training. A further improvement is expected with the filling of the senior level positions in the KWA's Finance and Accounts Department, and it appears that the audits of 1993- 94 will be prepared on time. Due to long delays in completing the LCS audit through the Examiner of Local Funds Accounts, GOK employed a private auditor. The audit reports could not be completed on time due to the substantially deficient data available to the auditor. With the major improvements in the LCS record keeping systems suggested by the auditor, it is now expected that the LCS audits for 1993-94 will be completed on time. 2.13 Despite the Kerala Water Supply and Sewerage Act aimed at KWA becoming an autonomous and commercial organization, in practice limited powers and restrictive role was given to KWA by GOK. For example, KWA has no control on the staff recruitment and the tariff revision, and when legislative action authorized a "Member (Accounts)" on KWA's Board, certain administrative details delayed the actual appointment for several months. Despite strong agreement on the principle to separate the career streams of staff engaged in sub-professional work on the accounts from those performing the administrative jobs, these streams could not be separated. This has resulted in reducing the benefits of the training under the Project for such accounts personnel. The KWA Board was not empowered to take decisions on contract award which continued to require government approval. 2.14 About 10.67 ha land were acquired for water supply schemes from 65 private land owners through the normal land acquisition procedures. The mission was informed that the acquisition of land did not have any significant impact on the income of the land owners. However, land acquisition disputes caused delayed availability of land and consequent delayed construction in Puthencruz, GCDA, Adoor, Quilon, Chithara. In Quilon, acquisition of land proved so difficult for pipelines near Anandavalleeswaram that finally, the pipes were taken through a different route. 2.15 The project monitoring system was generally weak. A belated development of a project monitoring system helped to bring control of the project's implementation and was an important tool for KWA officials, both in the field and headquarters. The mission believes that KWA's familiarity with this system, and conviction of the usefulness of it, will usher in sound project monitoring.  45 GOK-KWA views cn Pro7ect molemenzatign 2.16 Though the institutional and financial objectives were not achieved fully by the Credit closing, the GOK-KWA ccnsiders that the impetus provided by the Project will take KWA quite far in achieving these object:ves. The dependency on grants funding byf the State will reduce, and KWA is expected to be able to sustain its own program by the turn of the century. GOK indicated that the centralizaticn of water suppiy operations in the whole State of Kerala and vesting czmplete responsibility from planning to O&M and billing and collection with the KWA, were considered as the most important achievement of the Project. However, a recent amendment of the KWA Act permitted a municipality to "cpt cut" subject to GOK approval. 2.17 KWA felt that a better achievement could have been shown by GCK-KWA had the Bank agreed to the GOK request to extend the Credit by six months more (i.e. up to 30-Sep-94). By that time all the seven water supply schemes would have been completed and a higher LCS coverage could have been achieved. However, the mission was informed that GOK-KWA are committed to complete the water supply schemes as planned, and confirmed to the mission that necessary budgetary provision has been made for this purpose. 2.18 This being the first Bank in-vestment In the drinking water sector in Kerala, the GOK-KWA expected some intimate guidance from the Bank to be able to meet the institutional and management parameters set at appralsal, and to achieve the Project's institutional and financial objectives. In KWA's opinion such guidance was not available except towards the end of the Project. Guidance on the Bank's procurement procedures provided at the Project's outset were considered inadequate and resulted in protracted correspondence for finalization of the draft bidding documents for contracts requiring Bank's prior review. Guidance provided on disbursements procedures and disbursement claims processing and audit matters was also considered by KWA as minimal and inadequate, for an agency exposed to the Bank requirements for the first time. 2.19 GOK-KWA expressed their disappointment to the mission in respect of (a) Bank's non-acceptance of the Project restructuring proposal for finance (para 1.29); and (b) dropping the proposed Kerala Urban Development Project from the lending program when preparation studies required for appraisal were almost ready (para 1.19). 2.20 In spite of the Project having a reasonably good start and benefitting from three additional ',years of extension, several factors contributed to the incomplete state of the Project according to GOK-KWA. They are: (a) Counterpart funding and disbursement rate: Funds were not forthcoming in a timely manner to the extent the project implementation required. Poor disbursement rate for LCB procurement of goods and works was a deterrent as flow-back to the sector was very small. With the improved disbursement rate consequent to the Bank's Special Action Program (para 2.06), the counterpart finance availability eased and no shortage of funds was experienced in the closing years of the Project. (b) Inefficient procurement administration: A hierarchial system designating officials to decide on contract award was inadequate. The system led to a proliferation of small contracts requiring extensive time for contract administration and supervision (para 2.03). (c) Slow nerformance by contractors: Awarding a number of contracts to a single contractor based on 'lowest offer' without an evaluation of the bid capacity, and some ccntractors' inability to execute the works as per agreed program, slowed down the progress. (d) Difficulties in land accruisition: General reluctance of the people to part with land and taking recourse to the Court actions resulted in delay in land acquisition in some cases (para 2.14).  46 (e) Unproduct:ve use of KWA staff time: Preparation of an abortive proposal to restructure the project took consideranle t:me of staff involved in the project implementation (para 1.28 and 1.29) (f) Additional distribution extensions work.: :nclusion of additional distribution extensions for eacn of the seven water supply schemes, almost at the end of the project life, though essential for expansion of service coverage. 'iad burdened the field staff and consequently further delayed the water suppiy scheme impiementation. (g) Natural calamitv: Floods caused by uncommonly heavy rains caused delays. 2.21 GOK-KWA commented that the Bank supervision missions' visits to the sites were few and far between - only a couple of visits made towards the end of the Project. Acknowledging the benefits of those visits, GOK-KWA suggested that such visits if undertaken from the beginning of the project implementation could have helped the Bank to appreciate the difficult project execution environment, and may have led to improvements through advice and suggestions. In response to this comment, it is noted that . III. IMPLEMENTATION COMPLETICN REPORTINIG - ',O-KWA CONTRIBUTION 3.01 KWA has constituted an ICR Group under the Chief Engineer (South) and having members from the finance and technical wings. This group will obtain specific input from DMA and DP and will prepare the draft ICR contribution to be included as Appendix B of the ICR. Upon review by KWA and GOK, the report will be furnished to the Bank at NDO through the GOK by 31-Jul-94. A draft ICR contribution, prepared by KWA, was discussed with the mission. 3.02 The mission provided a list to GOK/KWA of the information required for preparation of the ICR and its statistical annexes. Formats were provided wherever required for assembly and reporting of field data. The mission reviewed these formats with KWA and GOK staff. Most of the information requested was made available before mission's departure. However, some critical information could not be assembled by this time and KWA agreed to provide this information before 31-Jul-94. 3.03 The mission was pleased to review a format prepared by KWA ICR group to report Performance Indicators. Performance Indicators for each of the seven water supply schemes and LCS (urban and rural) will also be furnished, after review by KWA and GOK, to the Bank by 31-Jul-94 at the latest. IV. PROJECT'S OPERATION AND SUSTAINABILITY The Water Supply Components 4.01 The sustainability of the water supply components, which are "community" facilities, is largely dependent on KWA's management and personnel skills and KWA's financial performance. While additional improvements are needed in these areas, the Project has achieved worthwhile management improvement, staff training and movement towards financial viability. This provides the basis for some "cautious optimism", notwithstanding the fact that KWA has many water systems under its jurisdiction which do not work properly or, in some cases, at all. 4.02 On the positive side the mission believes that the financial policy, management and accounting improvements introduced through the Project will be sustained. If KWA does not deviate from the tariff revision principles, it may become a truly autonomous agency. For example: (a) The most recent tariff increase effective 01-Jun-93 provided for subsequent annual automatic increase by 15% which, it has been projected, will lead to KWA's no longer needing grants-in-aid from GOK  47 by 1998-99. The mission was informed that effective 01-Jun-94 the tariff was increased by 15's. KWA is keen to implement the automatic annual increase, and did not anticipate any insurmountable obstacles to such annual tariff increases; (b) the Accrual Accounting System (AAS) has been implemented and a considerable number of accounting staff have been trained; (c) KWA, under the Project, established a Training Center which is run by a small core of KWA staff and with the assistance and support of a group of external guest lecturers. The personnel training program launched in Sep-91 has brought awareness among KWA staff of good operation and maintenance and accounting practices. These are considered the most important areas for training by KWA and KWA has indicated its intent to continue such effort. 4.03 On the negative side, it is clear that KWA has not taken the steps to post appropriate O&M staff and provide the necessary budget for this purpose, despite earlier mission recommendations to this effect. The current operation and maintenance arrangements of the completed water supply schemes are entirely ad-hoc and largely rely on temporary recruitment (for a term of 6 months maximum) of inexperienced and untrained staff; by the time they gain some experience, they are replaced with a new batch. The existing O&M staffing arrangements are extremely unsatisfactory. 4.04 In this connection, the mission observed signs of inadequate operation and inappropriate handling of equipment (resulting in their less than satisfactory performance) within a short period after the commissioning of water supply systems. In mission's discussions with GOK-KWA, it was stressed that appropriate staffing for operation and maintenance together with appropriate tariff and sound financial management are the most important issues for sustainable operation. 4.05 The mission also observed that the service connection targets fixed for Vilappil and Puthencruz were not achieved which raises the question of financial viability of the schemes. Moreover, KWA does not have widespread consumer meter repair facilities, particularly in the panchayats, which raises the question of whether revenues raised by KWA on a volumetric consumption basis can be sustained. The Low-Cost Sanitation (LCS) Components 4.06 In contrast to water supply's "community" characteristics, the LCS component provided "household" facilities. These are simple and inexpensive to maintain given adequate initial construction quality, which the evaluation reports available indicate that largely the case. 4.07 The mission was pleased to note evidence that latrines constructed under the low cost sanitation program are physically sustainable and properly maintained as (a) ownership of the latrine is with a householder, (b) the users appear satisfied with the functioning of the latrines and do not report problems, and (c) the users are aware of the operation and maintenance procedures including the switching of pits as already demonstrated with the help of local masons. However, it is important that the local bodies continue to provide advisory assistance to the beneficiaries by providing oral and written guidelines as may be indicated by periodical field monitoring. Such assistance may be required particularly in changing the discharge pit when one is filled and for emptying the contents of the first pit when digested. 4.08 On the financial side, a sustained and aggressive effort will be necessary to improve LCS householder loan recovery. This may be particularly so because of the availability of other programs (such as GOI sponsored Urban Basic Services and Environmental Improvement of Urban Slums in urban areas and Jawahar Rojgar Yojana and Rural Sanitation Prograi' in panchayats) which provide higher grants and easier loan terms to householders for low cost sanitation units. There is a need for a consistent state-wide policy on such matters  48 V. OPERATIONAL ACTION PLAN AND PERFORMANCE TD+ICATORS 5.01 The mission reviewed the draft Operational Action Plan and Performance Indicators prepared by KWA for the water supply schemes, and by DMA and DP for LCS programs. These are given in Annex S. The indicators for water supply largely relate to operational performance. The activitles needed to promote project sustainability were lsted for LCS. 5.02 These action plans were the subject of considerable discussions between GOK-KWA and the mission. For water supply KWA will have to improve its operational performance considerably to meet the performance indicators. For LCS it is likely that the beneficiaries themselves will take the steps needed (with the assistance of the local masons, as required) to -secure the continued functioning of the latrines. .1.  49 Annex 1 Page 1 of 10 a:\am\annex-l .wp INDIA: KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Implementation Completion Reporting Mission 04-16 Jul-94 WATER SUPPLY COMPONENTS: MISSION OBSERVATIONS AND DESCRIPTION OF WORKS IMPLEMENTED AND OBSERVATIONS 1. This Annex contains mission observations on the physical aspects of the seven water supply schemes and description of works implemented in each of the water supply schemes. The description of works implemented has been prepared based on the information furnished to the mission in the field and also the information which were furnished by the KWA at a later date to the New Delhi Office of the World Bank. 2. Puthencruz Water Supply Scheme: All works including distribution extensions, envisaged under this scheme were complete. The scheme was commissioned in Mar-93. At present, reportedly, 5.8 mild water is produced against 7.2 mld installed capacity. 1480 house connections were provided, 1128 standposts installed and 39 non-domestic connections were given including those connections existed before the scheme was commissioned. The performance is affected by inefficient operations of the water treatment plant and inadequate staffing. The loss of head indicators of filters are not in working order. 3. Three bulk flow meters have been installed on three delivery mains from the master overhead tank at Choondy, and an electronic flow meter have been installed at the raw water inlet of the flash- mixing chamber. However, there was no attempt on the part of operating staff to read the bulk-flow meters and equate the flow conditions to ascertain the systems functional efficiency. No operational procedures were established, and lack of such procedures was evident as some areas do not receive enough water even at the beginning of the scheme commissioning. Intermittent water supply has been resorted to when the scheme was designed for a 24 hours supply and is producing adequate quantity of water. 4. Greater Cochin Development Area (GCDA) Water Supply Scheme: The scheme has been partly commissioned in May-93 with the commissioning of the 70 mid water treatment plant at Alwaye. Five (Keezhmadu, Edathala, Choornikkara, Kalamassery and Thrikkakkara) of the 12 panchayats were provided with water supply where new connections were given. All works including the system testing and trial run were completed in another three panchayats (Vazhakkulam, Kizhakkambalam and Kunnathunadu). Water supply in these three panchayats was due to be commissioned and the standposts locations were finalized in consultation with the panchayats. 5. Inadequate investigations led to non-feasible solutions for Chambakara canal crossing and RCC O.H. tank at Chellanam. KWA has finally persuaded state PWD to allow the clear water transmission pipe (350 mm dia MS pipe) laid alongside the footpath of the highway bridge over Chambakara canal. The works were due for completion by 25-Jul-94. This will enable pre- commissioning trial in the remaining four panchayats (Maradu, Kumbalam, Kumbalangi and Chellanam) where the water supply commissioning is scheduled to be completed by Sep-94. Though Chellanam O.H. tank, for which bids (with designs from the bidder) were invited (bid opening on 06-  50 Annex I Page 2 of 10 6. Present surplus waEer of this scheme is diverted for Cochin citv and the transmission pipe network at Thammanam facilitates easy transfer of water from the GCDA system to Kochi system. It is a matter of concern that the drinking water scarcity existing in Kochi. and the city's economic and political position in the State. water from this scheme might be diverted for Kochi city in surnmer months when the demand in the GCDA project area will also be high. 7. Kottavam Water Supply Scheme: The scheme has not been commissioned though all works, except 5 kms of 40 kms distribution extension works, were completed. A pre-commissioning trial has been in progress since Mar-94. and the scheme is due to be commissioned by 31-Aug-94. The water treatmnent plant (15.64 mid capacity) trial operation was unsatisfactory as (a) rate of flow recorder and loss of head recorder of filter bed 2 were not in working conditions: (b) operator on duty was unaware of the use of the rate of flow recorder/controller and head loss indicators and backwashes filters once in a day as a routine; (c) despite apparatus for common laboratory tests were procured, no trained person was posted who could deternine the required chemical dosage; (d) arbitrarv quantity of chemicals (alum for coagulation and chlorine for disinfection) were being used. 8. Lack of procurement scheduling contributed to severe delays in commissioning this scheme. Having completed most of the reservoirs by 1988, most of the pipelines (per original project proposal) completed by 1990 (though in places with some gaps due to delayed supply of fittings and pipes), and having achieved good progress in completion of the water treatment plant works by 1992, the scheme has not been commissioned due to delays in (a) procurement for pump house and clear water reservoir; and (b) supplies of some pipes and valves. A lot of repairs of pipes and joints were required at the trial run and no reservoirs were fitted with water level indicators. 9. No staff position was created for operation of the scheme. The pre-commissioning trial has been taken up by mobilizing a few staff from other schemes. and by recruitment of a few temporary staff. A maintenance services contractor was appointed to repair the visible leaks. 10. Adoor Water SuPDIV Scheme: Construction of a 12.38 mid water treatment plant was nearing completion, over head tank for Pallikkal zone was under construction. trial run of the distribution system was in progress and all other works were almost complete. The scheme is expected to be ready for commissioning before 3 1-Aug-94. The weir downstream of intake across Achencoil river is rescheduled for completion by 31-Mar-95. However, the delayed construction of weir is not expected to affect water supply in the short term. IL CI Class B and Class A pipes for transmission of raw water (12.38 mid water to 80 m head) to the water treatment plant were replaced with Premo pipes (locally made PSC pipe, not of good specifications and quality) apparently due to non-availability of C.I. pipes. Realizing the vulnerability of Premo pipes to high pressure head, an air-cushion valve and two zero-velocity valves were additionally fixed on the transmission main after detailed hydraulic study of the surge behavior. 12. Ouilon Water Supplv Scheme: Progress with this scheme is far behind and now commissioning is rescheduled for Oct-94. In view of a large number of contracts (36 nos.) including the intake well & pump house, erection of raw water pumps, treatment plant, laying of distribution pipes (19 nos. contracts), and laying of transmission pipes (6 nos contracts), were incomplete, the rescheduled commissioning date appeared optimistic. The 25 kms long gravity transmission main was  51 Annex I Page 3 of 10 commissioned and now used for transmission of treated water from the existinz water treatment plant. Difficultv experienced from the organized local trade union activity in the execution of works according to KWA, is the principal cause of delay. Currently, the interference has been resolved except at Neendakara panchayat where construction works of the over head tank is stopped after reaching the tank floor level. 13. KWA has made a departure from the original plan of twining the existing gravity main for clear water transmission from the water treatment plant to Anandavalleeswaram reservoir at Quilon town. KWA has planned to reject the existing main and use the newly laid gravitv main as a pumping main for transmission of 59 mrid treated water which is the aggregate production capacity of the existing and the new water treatment plant capacity. No reference of Bank's no objection to such a deviation from the original proposal was available. 14. Chithara Water Supply Scheme: Construction of water treatment plant and erection of transformers were the major works remained to be completed. The scheme is now expected to be conmmissioned before 30-Sep-94. Cl Class B and Class A pipes which were originallv chosen to be the raw water transmission pipes were partly repiaced by Premo pipes due to non-availability of CI pipes at site. Overall delivery head being 118 meters, KWA has taken surge protection measures by providing air-cushion valve and zero velocity valves. 15. Following inadequacies in the detailed engineering were observed. (a) Replacement of part of CI raw water transmission pipes with Premo pipes; (b) Over designed size (9 m dia) of intake and pump house: (c) Space for two additional turbine pumps provided in spite of adequate provision of standby purnping capacitvy (d) Over designed chemical house at water treatment plant constructed (probablv. one-eighth of it would have been adequate); and (e) The depth of clear water reservoir at the water treatment plant could have been smaller to avail of higher gravirv head. 16. Vilappil Water Supply Scheme: Vilappii water supply scheme is in operation from May-91. 458 house service connections. 13 non-domestic connections and 181 standpost connections were provided. KWA has appointed temporary staff for operation and maintenance functions. and has a small laboratory attached to the treatment plant. The laboratory test results were well maintained. The mission met with some consumers who expressed satisfaction with the water supply, chough at times the water supply is reportedly irregular due to power shut-down and low voltage. 17. The general house-keeping and maintenance of equipment required improvement. Some observations on the operations are: no recorders (flow recorders, loss of head recorders and rate of flow controllers) were in working order: the electronic flow recorder fixed to measure the inflow to the plant was out of order for over one year; the valves fitted on the back wash water drain were leaking profusely; the laboratory apparatus are mostly broken down; and filters were washed everyday as a routine without assessing the need. Based on some meter records and also field enquiry. the mission estimated a large volume (about 60%) of unaccounted-for water in Vilappil scheme. and brought it to the notice of the engineering and finance wings of KWA.  Annex 1 52 Page 4 of 10 a:\amn\annex l.wp KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) WATER SUPPLY COMPONENTS Puthencruz Sub-Proiect: Description of Works Implemented Component Location Description CaJ.i Size Function Intake well, transmission and treatment Intake well Kadambanadu R.C. Well 6 m dia As source of water Raw water pumps Kadambanadu Turbine pumps 8.75 mnid To pump raw water 3 Nos. 50 HP from source to treatmen each plant Raw water Kadarnbanadu C.I. Class B & 300 nmu dia To convey raw water pumping main to treatment Class A 5.35 kms from source to treatment plant plant Treatment plant Hillock at Rapid sand filter 7.20 mid Treatment of water Choondy Clear water pumps Hillock at 3 Nos. 50 HP 8.75 mid To pump water from the Choondy each sump to service reservoirs Clear water Choondy to AC pipe 250-300 nmn To convey water to gravity main reservoirs dia 8.68 kms reservoirs Distribution svstem Service reservoirs Sub-project 2 Nos. G.L. 1.36 ml To provide storage area I No. O.H. 1.21 ml Distribution Throughout the AC and PVC 230.8 krns 50 Distribution in sub- network ilc sub-project pipes mm to 300 project area extensions area mm dia Standposts to be Sub-project 400 Nos. 12 mm Rural water supply to provided area poor Service Sub-project 5,800 Nos HSC 12 mm size Rural water supply connections to be area 725 Non-dom Various sizes provided connections  Annex I 53 Page 5 of 10 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) WATER SUPPLY COMPONENTS GCDA Sub-Proiect: Description of Works Implemented Component Location Description Cap./ Size Function Intake well, transmission and treatment Intake well Alwave R.C. Well 12 m dia As source of water Raw water pumps Alwave Turbine pumps 70 mid To pump raw water 3 Nos. 215 HP from source to treatment each. plant Raw water Alwave GRP pipe 900 mm dia To convey raw water pumping main 0.11 kms from source to treatment plant Treatment plant Alwave Rapid sand filter 70 mId Treatment of water Clear water pumps Alwaye Centrifugal 70 mIld To pump water to pumps: 2 Nos. service reservoirs 429 HP each Distribution system Clear water pumnps Sub-project Centrifugal 64 mld To pump water from area pumps: 15 Nos. sump to service each 20 HP to 75 reservoirs HP Clear water Sub-project C.I. Class B & 250-500 mm To convev water to the pumping main area Class A dia 40.1 knis reservoirs Service reservoirs Sub-project 5 Nos. G.L. 17.61 rnl To provide storage area 9 Nos. O.H. 13.53 ml Distribution Throughout the AC and PVC 458 kms 63 Distribution in sub- netivork i/c sub-project pipes mm to 600 project area extensions area mmn dia. Standposts to be Sub-project 1140 Nos. 15 mm Rural water supply to provided area poor Service Sub-project 32,000 HSC 12 mm size Rural water supply connections to be area 10.500 Non-dom Various sizes provided connections  Annex I 54 Page o of 10 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) WATER SUPPLY COMPONENTS Kottavam Sub-Proiect: Description of Works Implemented Component Location Description CaD.! Size Function Intake well, transmission and treatment Intake well Nattasserv R.C. Well 6 m dia As source of water Raw water pumps Nattasserv Turbine pumps 3 18.81 mid To pump raw water Nos, 30 HP each from source to treatment plant Raw water Nattasserv C.I. Class LA 500 mm dia To convev raw water pumping main 55 m from source to treatment plant Treatment plant Nattasserv Rapid sand filter 15.64 mid Treatment of water Distribution system Service reservoirs Sub-project I No. G.L. 1.53 ml To provide storage area 4 Nos. O.H. 3.76 ml Clear water Sub-project C.I. Class B & 250 mm dia To convey water from pumping main area Class A 30.22 kmns sump to reservoirs AC pipe 300 mm dia 2.96 kms Clear water pumps Nattasserv Centrifugal pumps 15.64 mid To pump water from the 9 nos. 40 HP and sump to service 3 nos. '5 HP reservoirs Distribution Throughout the AC and PVC 371 kms 90 Distribution in sub- network i/c sub-project pipes mmn to 600 project area extensions area mm dia Ra. Standposts to be Sub-project 550 Nos. 15 mm Rural water supply to provided area poor Service Sub-project 12.560 HSC 12 mm size Rural water supply connections to be area 2,250 Non-dom Various sizes provided  Annex I 55 Page 7 of 10 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. t622-IN) WATER SUPPLY COMPONENTS Adoor Sub-Proiect: Description of Works Implemenced Component Location Description Cap./ Size Function Intake well, transmission and treatment Intake well Kaipattoor R.C. Well 8 m dia As source of water Kadavu Raw water pumps Kaipattoor Turbine pumps 3 10.30 mid To pump raw water Kadavu Nos. 140 HP each from source to treatment plant Raw water Kaipattoor AC pipe 400 mm dia To convey raw water pumping main Kadavu to 8.25 krms from source to treatment Chiranikai plant Treatment plant Chiranikai hills Rapid sand filter 12.38 nlid Treatment of water Clear water pumps Chiranikai hills 3 Nos. 60 HP 10.30 mid To pump water from the each sump to service reservoirs Clear water Sub-project 80-200 mm dia CI 2.52 krns To convey water to pumping and area pipes pumping various zonal reservoirs gravity main 200-400 mm dia 25.27 kms Ac pipes gravitv Distribution svstem Service reservoirs Sub-project 9 Nos. G.L. 2.58 ml To provide storage area 2 No. O.H. 1.24 ml Distribution Throughout the AC and PVC 224.4 kms 75 Distribution in sub- network i!c sub-project pipes mm to 400 project area extensions area mnm dia Standposts to be Sub-project 485 Nos. 12 mm Rural water supply to provided area poor Service Sub-project 11,500 HSC 12 mm size Rural water supply connections to be area 1,525 Non-dom Various sizes provided connections  Annex 1 56 Page 8 of 10 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) WATER SUPPLY COMPONENTS Adoor Sub-Project: Description of Works Implemented Comronent Location Description Cap./ Size Function Intake well, transmission and treatment Intake well Kaipattoor R.C. Well 8 m dia As source of water Kadavu Raw water pumps Kaipattoor Turbine pumps 3 10.30 mild To pump raw water Kadavu Nos, 140 HP each from source to treatment plant Raw water Kaipattoor AC pipe 400 mm dia To convey raw water pumping main Kadavu to 8.25 kms from source to treatment Chiranikai plant Treatment plant Chiranikai hills Rapid sand filter 12.38 mild Treatment of water Clear water pumps Chiranikai hills 3 Nos. 60 HP 10.30 mld To pump water from the each sump to service reservoirs Clear water Sub-project 80-200 mm dia CI 2.52 kms To convey water to pumping and area pipes pumping various zonal reservoirs gravity main 200-400 mm dia 25.27 kms Ac pipes gravity Distribution system Service reservoirs Sub-project 9 Nos. G.L. 2.58 ml To provide storage area 2 No. O.H. 1.24 ml Distribution Throughout the AC and PVC 224.4 kms 75 Distribution in sub- network i/c sub-project pipes mm to 400 project area extensions area mm dia Standposts to be Sub-project 485 Nos. 12 mm Rural water supply to provided area poor Service Sub-project 11,500 HSC 12 mm size Rural water supply connections to be area 1,525 Non-dom Various sizes provided connections  Annex I 57 Page 9 of 10 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) WATER SUPPLY COMPONENT Chithara Sub-Project: Description of Works Implemented Component Location Description Cap./ Size Function Intake well. transmission and treatment Intake well Mylamoodu R.C. Well 9 m dia As source of water Raw water pumps Mylamoodu Turbine pumps 12.20 mid To pump raw water and Booster 3 Nos. 75 HP from source to treatment station each. Centrifugal plant pups: 3 Nos. 75 HP each Raw water Mylamoodu to C.I. Class A 350 mm dia To convev raw water pumping main treatment plant and 1.40 kms from source to treatment Premo pipe 400 mm dia plant 5.40 kms Treatment plant Madathara Rapid sand filter 9.72 mid Treatment of water Distribution system Service reservoirs Sub-project 7 Nos. G.L. 2.47 ml To provide storage area 2 Nos. O.H. 0.80 ml Clear water pumps Thenkakalla Centrifugal 7.80 mid To pump water from the pumps: 3 Nos. 15 sump to service HP each reservoirs Clear water Thenkakalla to C.I. Class B 100 mm dia To convev water to the pumping main reservoir R6 2.70 kms reservoirs Distribution Throughout the AC and PVC 121 kms 75 Distribution in sub- network i/c sub-project pipes mm to 400 project area A._ extensions area mm dia Standposts to be Sub-project 285 Nos. 20 mm Rural water supply to provided area poor Service Sub-project 9,170 HSCs 12 nmm size Rural water supply connections to be area 930 Non-dom Various sizes provided connections  Annex 1 58 Page i0 of 10 KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) WATER SUPPLY COMPONENTS Vilappil Sub-Proiect: Description of Works Implemented Component Location Description Cav./ Size Function Intake well, transmission and treatment Intake well Vellaikadavu R.C. Well 6 m dia As source of water Raw water pumps Vellaikadavu Turbine pumps 3 2.72 mid To pump raw water Nos, 40 HP each from source to treatment plant Raw water Vellaikadavuto C.I. Class B 200 mnm dia To convey raw water pumping main Kavinpuram 2.85 krs from source to treatment plant Treatment plant Kavinpuram Rapid sand filter 3.35 mid Treatment of water Distribution system Service reservoirs Sub-project 3 Nos. G.L. 0.66 ml To provide storage area 1 No. O.H. 0.25 ml Clear water pumps Sub-project Centrifugal 1.48 mId To pump water to area pumps: 2 Nos. 15 service reservoirs HP each & 2 Nos. 10 HP each Clear water Treatment plant C.I. Class A 250-300 mm To convev water to pumping main to reservoirs dia 1.50 kms reservoirs & AC 300 mrn dia 0.28 kms Distribution Throughout the AC and PVC 37.0 kms 75 Distribution in sub- network i/c sub-project pipes mm to 300 project area extensions area mm dia Standposts to be Sub-project 185 Nos. 15 mm Rural water supply to provided area poor Service Sub-project 1,400 HSCs 12 mm Rural water supply connections to be area 150 Non-dom Various sizes provided connections  59 Annex 2 Page 1 of 1 a:\am\annex-2.wk1 INDIA: KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Low Cost Sanitation - Latrines Constructed: URBAN Si. Name of Municipality Number of No. LCS units constructed 1. AtKingal 1,115 2. Badagara 1,051 3. Kasaragod 472 4. Mavelikkara 1,000 5. Moovattupuzha 730 6. Pala 801 7. Ponnani 1,035 8. Ponalur 2,603 9. Shoranur 1,008 10. Thrchur 500 11. Kalpatta 170 12. Perinthalmanna 302 13. Thaliparamba 250 14. Ottappalam 470 15. Adoor 223 TOTA 15 municipalities 11,730 NOTE Rs 32.0 million were spent to construct 11,730 latrines (as above) against a target of 25,631 latrines fixed at appraisal. The average cost per urban latrine is Rs 2,730. The average cost per rural latrine is Rs 2,239.  60- Annex 3 Page 1 of 1- a:\am\annex-3.wk1 INDIA: KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Low Cost Sanitation - Latrines Constructed RURAL Si. Name of Panchayat Number of No. LCS units constructed 1. Vilavoorkkal 500 2. Kilikolloor 500 3. Adoor 500 4. Kumaranalloor 500 5. Chellanam 500 6. Vilappil 500 7. Sakthikulangara 500 8. Thrikkadavoor 500 9. Ezhamkulam 490 10. Vijayapuram 484 11. Nattakom 500 12. Panachikkad 497 13. Kumbalangi 500 14. Maradu 500 15. Keezhmadu 500 16. Vadavucode-Puthencruz 493 17. Trikkakkara 500 18. Chithara 143 19. Kadakkal 180 20. Chadayamangalam 265 21. Eravipuram 229 22. Kunnathunad 393 23. Aikkaranadu 301 24. Vazhakkulam 359 25. Kizhakkambalam 350 26. Purakkad 295 27. Punnapra 298 28. Mararikulam South - 409 29. Kuthiathode 308 30. Vadakkevila 420 31. Mayyanadu 80 32. Erathu 246 TOTA 32 Panchyats 12,740 NOTE Rs 28.53 million were spent to construct 12,740 latrines (as above) against a target of 30,000 latrines fixed at appraisal. The average cost per rural latrine is Rs 2,239. The average cost per urban latrine is Rs 2,730.  61 cdc a:\keicra4r.wkl and c:\123\kew\keicra4r.wkl Annexure 4 04-Oct-94 INDIA: KERALA WATER SUPPLY AND SANITATION PROJECT (Cr. 1622-IN) Page 1 of I Implementation Completion Reporting Mission; 04-16 July 1994 PROJECT COST ESTIMATES AND EXPENDITURE TO 31-MAR-94