Niger - Public Works and Employment Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 17260 IMPLEMENTATION COMPLETION REPORT REPUBLIC OF NIGER PUBLIC WORKS AND EMPLOYMENT PROJECT CREDIT 2209-NIR December 23, 1997 Water and Urban Sector Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency unit = CFA Franc (CFAF) 1990: US dollar = 285 CFAF 1991: US dollar = 283 CFAF 1992: US dollar = 265 CFAF 1993: US dollar = 280 CFAF 1994: US dollar = 555 CFAF 1995: US dollar = 520 CFAF 1996: US dollar = 520 CFAF 1997: US dollar = 540 CFAF WEIGHTS AND MEASURES Metric System FISCAL YEAR January I - December 31 ACRONYMS AND ABBREVIATIONS AFN Women's Association of Niger AGETIP Agence d'Execution des Travaux d'Interet Public Contre le Sous-Emploi [Public Works and Employment Agency] AVCN Association of Cities and Communes [i.e. Municipalities] of Niger. CFD Caisse Fran9aise de Developpement CIDA Canada International Development Agency CNMP Commission Nationale des Marches Publics [National Public Procurement Commission] EDF European Development Fund EElC European Economic Community FSD Fonds Social de Developpement (France) IDA International Development Association 1(1W Kreditanstalt fbir Wiederaufbau (Germany) N][GETIP Agence Nigerienne de Travaux d'Interet Public pour l'Emploi [Niger's Public Works and Employment Agency] O]PEC Organization of Petroleum Exporting Countries PACSA Program to Alleviate the Social Costs of Adjustment (Niger) PPF Project Preparation Fund SAR Staff Appraisal Report SPEIN Business and Industry Employers' Association of Niger SYNAPEMEN National Association of Small and Medium-Sized Enterprises of Niger TAIMAKO Mutual Guarantee Company TIPE Travaux d'Inter6t Public pour l'Emploi [Employment-creat'ig Public Works] UNC National Union of Cooperatives USTN Federation of Labor Unions of Niger Vice-President : Mr. Jean-Louis Sarbib Director : Mr. Theodore Ahlers Sectoral Manager : Mrs. Letitia Obeng Task Team Leader : Mr. Christian Diou  TABLE OF CONTENTS FOR OFFICIAL USE ONLY Page No PREFACE EVALUATION SUMMARY PART I: PROJECT IMPLEMENTATION ASSESSMENT A. Introduction 1 B. Project Objectives 2 C. Achievement of Objectives 3 D. Major Factors Affecting the Project 5 E. Sustainability of the Project 7 F. Bank Perfonnance 8 G. Borrower Performance 8 H. Assessment of Project Outcome 10 I. Future Operations 10 J. Key Lessons Learned 10 PART II: STATISTICAL ANNEXES Table 1: Summary of Assessments Table 2: Related Bank Loans and Credits in the Sector Table 3: Project Timetable Table 4: Credit Disbursements: Cumulative Estimated and Actual Table 5: Key Indicators for Project Implementation Table 6: Key Indicators for Project Operation Table 7: Studies Included in Project Table 8A: Project Costs Table 8B: Credit Allocation by Category Table 9: Economic Costs and Benefits Table 10: Status of Legal Covenants Table 11: Compliance with Operational Manual Statements Table 12: Bank Resources: Staff Inputs Table 13: Bank Resources: Missions ANNEXES A. Closing Mission Aide-Memoire B. Borrower's Contribution C. Map IBRD 16779R 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.  T  IMPLEMENTATION COMPLETION REPORT REPUBLIC OF NIGER PUBLIC WORKS AND EMPLOYMENT PROJECT CREDIT 2209-NIR PREFACE This is the Implementation Completion Report (ICR) for the Public Works and Employment Project in Niger, for which Credit 2209-NIR, in the amount of SDR 13.9 million (US$ 20.0 million) was approved on February 19, 1991, signed on April 5, 1991, and declared effective on December 9, 1991. A supplementary Credit, 2209-1 -NIR, in the amount of SDR 6.9 million (US$ 10 million), was approved on November 10, 1994, signed on December 23, 1994 and declared effective on September 18, 1995. The two credits, 2209-0-NIR and 2209-1-NIR, were closed on June 30, 1997. The original closing date was December 31, 1994. At that time, the operations financed by the initial Credit were almost fully completed. The closing date was postponed to allow implementation of the supplementary Credit. The last disbursement took place on September 26, 1997. This Implementation Completion Report was prepared by Christian Diou, Senior Municipal Engineer, AFTU2, task manager for the project, with the assistance of G6rard Tenaille, Consultant, and was reviewed by Theodore Ahlers, Country Director for Niger and Jerome Chevallier, Sector Manager, AFTS3. Preparation of the report started during a mission to Niger in April 1997, of which the aide-memoire is attached. The Implementation Completion Report is based on project files, correspondence, the Staff Appraisal Report and the Credit Agreement. The Borrower contributed to the preparation of the Implementation Completion Report by preparing its own project implementation report in April 1997, updated in November 1997, and through its comments on the draft ICR.  I m  IMPLEMENTATION COMPLETION REPORT NIGER PUBLIC WORKS AND EMPLOYMENT PROJECT CREDIT 2209-NIR EVALUATION SUMMARY Introduction 1. This Completion Report evaluates the Public Works and Employment Project in Niger, which was implemented by the Executing Agency NIGETIP, an institution created on the model of the AGETIP agency in Senegal. Project Objectives 2. The major objectives of the project were the following: (a) create, at least temporarily, new employment in urban areas using the private sector, and thereby stimulating small local private contractors and consulting firms; (b) improve the individual skills of workers and the competitiveness of the firms involved; (c) demonstrate the feasibility of labor-intensive projects and to test procedures that will allow the public sector to commission economically and socially useful projects; and (d) review existing public works programs and recast them with the intent of speeding up their implementation and enhancing their overall performance. Achievement of Objectives 3. The project attained its objectives, as regards the creation of jobs, development of the private sector, and physical objectives: (a) Job creation. The objectives were exceeded. More than 900 works contracts have been awarded to date, for a total value of CFAF 21 billion. These contracts have led to the creation of 46,760 jobs lasting for an average of 53 days and total wage spending of CFAF 5.28 billion. The value of wages represents 25 per cent of the overall value of the works, or 35 per cent when one takes into account of the wages paid to the consulting firms and the personnel costs of the Nigetip Executing Agency. (b) Enhancing the individual skills of workers and the competitiveness offirms. Here, the objectives were attained. A total of 856 Niger contractors were prequalified by Nigetip (a number that was recently reduced to 428), and 157 of these firms obtained an average of 5.7 contracts. 84 consulting firms were prequalified (this number has been reduced to 57), and 45 of them have worked with Nigetip under a total of 442 consulting contracts and 544 works supervision contracts. Without the Nigetip project, it is likely that a major portion of professionals would have had to go abroad to seek employment. The activities undertaken have provided them with  . . -11- significant opportunities since 1995, primarily through the training and technical assistance that has been provided to contracting finns awarded, work contracts under the project, to the consulting firms and to the beneficiaries (in particular the municipal governments). (c) Demonstrating the feasibility of labor-intensive sub-projects and procedures. The results are globally positive. Regarding the labor-intensive techniques, the field results obtained in Niger, as in neighboring countries, were highly satisfactory. The program which was aimed at encouraging community participation in maintaining urban infrastructure financed by the project was partially implemented, and the target beneficiaries of the sub-projects were sensitized. The preparatory study for setting up a mutual guarantee company was successful, and resulted in the further development of "Taimako". On the other hand, the study on bottlenecks in public procurement and tendering did not produce any new regulatory measures. Economic analysis 4. The economic analysis conducted during the project appraisal found internal rates of return (IRR) of 26 per cent (clearing sand from roads), and 51 per cent (pavement rehabilitation). An ex post analysis was performed in 1997, on the basis of which IRRs were calculated for various kinds of sub-projects, revenue-generating or not: building rehabilitation (27 per cent), road paving (21 per cent), drainage (28 per cent), construction of sports facilities (20 per cent), bus depots (45 per cent), slaughterhouses (39 per cent), etc. These data confirm the economic soundness of the urban works program managed by the Executing Agency. Major factors affecting the project 5. The only major event that affected the project was the devaluation of the CFA franc on January 12, 1994. The Bank and the Government agreed at that time on the need to set up a supplementary Credit of US$ 10 million in order to expand employment opportunities, and in particular to increase the volume of works under the existing project. There were difficulties with implementation of counterpart funds at the outset of the project. Sustainability of the project 6. The project is probably sustainable. This must be looked at from two angles: (a) the capacity of Nigetip to endure after closing of the IDA credit, and to continue responding to requests for support from the beneficiaries, local governments and government departments; and (b) the sustainability of the sub-projects financed under the Credit. 7. Over the medium term, the agency is probably sustainable, to judge from the capacity it has shown to mobilize funds from sources other than IDA and the Government. Beyond that horizon, the agency's longer-term sustainability will depend on the ability of the beneficiaries to finance sub-projects on their own, or to find the necessary funding by themselves. Given the current circumstances of Niger's urban sector, it might be suspected that the agency's long-term sustainability is uncertain.  -iii- 8. The sustainability of the works themselves is also probable over the medium term, and uncertain in the longer term. It will depend on the ability of the beneficiaries, primarily the municipalities, to mobilize the needed funding for maintaining the works carried out under the project. The agency has already introduced a mechanism whereby it will turn down sub-projects submitted by beneficiaries who fail to maintain those already implemented. The Bank's performance 9. The Bank's performance was satisfactory. The Bank drew upon the lessons from its experience with the first AGETIP project in Senegal to shorten the preparation time for this project. The Bank's project supervision was also highly satisfactory. The record of management stability was excellent: there were only two task managers for the project over the seven year period. The Borrower's performance 10. The Government's performance was satisfactory. It allowed the agency to function as planned. It was not able, however, to meet its commitments for counterpart funding for the project in a timely manner, and it failed to take full advantage of the study for improving public contracting procedures. The performance of the executing agency, Nigetip, can be judged as highly satisfactory. The Agency launched the project swiftly, and pursued its work at a steady pace, in scrupulous observance of the procedures manual. Audit reports consistently certified the accounts as faithfilly reflecting the project's financial situation. Conclusion, future operations, and key lessons learned. 11. The project may be considered as satisfactory. 12. Nigetip has been able subsequently to undertake the Urban Infrastructure Rehabilitation Project (Cr. 2957-NIR, approved on May 29, 1997), a second KfW-financed operation, and a CFD-financed program for secondary towns. Over the longer term, the process of decentralization in Niger and an in-depth approach to the problems of its cities will demand the adoption of a more ambitious sectoral policy to promote urban productivity. 13. There are some important lessons to be drawn from the project, and these are generally in line with those from other AGETIP projects: (a) an autonomous institute with its own statutes, such as the Nigetip agency, is fully capable of carrying out public works, quicldy and effectively, relying entirely on domestic human resources; (b) Nigetip is merely an implementation tool at the service of the beneficiaries (municipalities and government). It cannot by itself compensate for the lack of a sound sectoral policy; (c) quality is a very important consideration in selecting sub-projects; and (d) grass-roots community participation must be assured if sub-projects are to be sustainable.  I I I  IMPLEMENTATION COMPLETION REPORT REPUBLIC OF NIGER PUBLIC WORKS AND EMPLOYMENT PROJECT CREDIT 2209-NIR PART I: PROJECT IMPLEMENTATION ASSESSMENT Name of Project: Public Works and Employment Project No. of Credit: 2209-0-NIR and 2209-1-NIR Initial Amount of Credit: SDR 13.9 million (US$ 20 million) Supplementary Credit: SDR 6.9 million (LJS$ 10 million) Executing Agency: NIGETIP Vice-Presidency: Africa Region Country: Niger Sector: Urban Sub-Sector: Urban Works A. INTRODUCTION 1. At the time the project was prepared, the rate of growth of Niger's population (3.2 per cent) was higher than the average for countries of the Sahel. Moreover, the urban population was growing at 5.5 per cent a year. In 1991, the city of Niamey accounted for 45 per cent of the total urban population, and was growing at an estimated rate of 8 per cent, or close to 30,000 people every year. People tended to regard the problem of under-employment in urban areas as a fallout from structural adjustment, and this perception reduced the Government's leeway in pursuing the needed reforms. 2. To alleviate social problems in urban centers, particularly in Niamey, the Government hoped to supplement its adjustment efforts with labor-intensive civil works projects that would have an immediate impact on employment. It set up a coordination group, under the authority of the National Commission for Economic and Financial Reform, to seek ways of resolving the growing problem of under-employment. In October 1989, this group proposed a Program to Alleviate the Social Costs of Adjustment (PACSA), which called for a variety of measures in the areas of health, population, education, water supply, rural development, environental protection and public works among others. It was decided at that time to take an approach to implementation of such works in the urban sector based on the AGETIP (Public Works and Employment Agency) model, following the successful experience that was then underway in Senegal, and another that was in preparation for Burkina Faso. IDA was thus able to help the  -2- Government draw up a similar project for Niger, in a way that combined the goal of rehabilitating urban infrastructure with that ofjob creation. B. PROJECT OBJECTIVES Description of Objectives 3. The main objectives of the project, as described in the Staff Appraisal report 9032-NIR, of January 11, 1991, were: (a) to create, at least temporarily, substantial new employment in urban areas as rapidly as possible, using the private sector, thereby stimulating small local private contractors and consulting firms; (b) to improve, through execution of the works financed by the project, the individual skills of the workers who would be employed and the corporate competitiveness of the firms that would carry out the works, so as to develop their capacity to respond to increased opportunities for sustained employment after completion of the project; (c) to demonstrate the feasibility of labor-intensive projects and to test procedures that would enable the public sector to commission projects that were economically and socially useful; and (d) to review existing public works programs and recast them with the intent of speeding up their implementation and enhancing their overall performance. 4. In pursuing these objectives, the following conditions were to be fulfilled: (a) avoiding any increase in civil service employment; (b) combining low cost and high visibility; (c) supporting but not replacing other development programs, and (d) using transparent but expeditious and flexible procedures for subproject bidding, appraisal, contracting and disbursements. 5. To achieve these objectives, the project contained the following components: (a) a program of public facility and infrastructure rehabilitation and maintenance in urban areas to be carried out under labor-intensive schemes by local contractors; (b) a package of services related to work organization, management and labor force training to be offered on a voluntary basis to the local contractors that were awarded works contracts; (c) a supervision and monitoring component to allow progress under the project to be monitored closely, and to prepare the transition toward locally generated employment; (d) a selective audit of public works programs to identify bottlenecks and design system improvements; and (e) a package of consultant services related to (i) a training program for the beneficiaries and consulting firms on the preparation of feasibility studies and technical project appraisals; (ii) a program aimed at increasing grassroots participation in urban infrastructure maintenance; and (iii) the preparatory work for the establishment of a mutual guarantee company.  -3- Assessment of objectives and risks 6. The project's objectives were clear and realistic, and were based on experience with a similar project in Senegal. The goal of implementing the project in three years was an ambitious one, but in fact nearly 95 per cent of the initial Credit was disbursed within that limit, although an increase in the initial Credit was decided during Negotiations. The objectives remained valid for the duration of the project, despite a difficult institutional environment. They were confirmed in 1994, during preparation of the supplementary Credit, and are still valid today. 7. The major risk identified during the assessment was the possibility that the country's economy might not be able to generate stable job opportunities at the rate foreseen for the program. In that case, it would be necessary to extend the implementation period, which could have resulted in management cost overruns. Another risk was that the jobs created would tend to remain concentrated in local government, rather than in the private sector. Neither of these risks materialized. On the contrary, the construction industry was able to adapt and grow by taking advantage of the contract tendering process. Such opportunities were multiplied, moreover, through financing provided by other donors to Nigetip. Finally, a further risk identified, was that it might be more difficult to supervise and monitor the use of project funds than would be the case with a conventional investment project, because of the Agency's high degree of autonomy. Not only did this risk not materialize, but the broad experience that has now been built up in projects of this kind shows that the procedures in place, when respected, are sufficient to avoid these risks. 8. An important risk that was not identified during the project appraisal was that the Agency may become so effective that it might be used for tasks it was never designed for -- either to take on contracts that were too large, and hence beyond the scope of its procedures manual, or that were located outside urban areas, at the request of project managers or donors looking for a competent executing agency. This risk however did not materialize during the project, because the Agency was able to concentrate on its area of primary competence: small, labor-intensive projects in urban areas. There were a few cases where the Agency may have been led to take on commitments for which it could not properly guarantee completion. This risk, however, does not relate to the concept of delegated project management itself, which seems to be adaptable to rural settings, provided a suitably competent structure is set up. C. ACHIEVEMENT OF OBJECTIVES 9. The objectives of the project were attained, in terms of job creation, private sector development and physical objectives. Degree of attainment of objectives 10. Job creation. The objectives were exceeded. Table 5 in Part II shows that more than 900 works contracts have been awarded, for a total value of CFAF 21 billion. These contracts  -4- have led to the creation of 46,760 jobs, for an average duration of 53 days, and the disbursement of CFAF 5.28 billion in wages. The value of wages represents 25 per cent of the overall cost of the works, compared with estimates in the appraisal report, which called for a floor of 20 per cent. The economic analysis conducted during the appraisal forecast a labor component as high as 33 per cent, taking into account the wages and salaries paid to consulting firms (studies and supervision) and the personnel costs of Nigetip. Using such a basis for calculation, the value of wages rises to 35 per cent, broken down as follows: (a) private company manpower: 25.2 per cent; (b) consultants/salaries: 6.6 per cent, and (c) Nigetip staff remuneration: 3 per cent. 11. Enhancing individual worker's skills and company competitiveness. The objectives were attained. 856 local contractors were prequalified (this number was recently reduced to 428), and 157 of these firms obtained a total of 901 contracts. 84 consulting firms were prequalified (this number has been reduced to 57), and 45 of them have worked with Nigetip under a total of 442 consulting contracts and 544 works supervision contracts. These are very significant results, for since 1989 the job situation for engineers and architects already on the market or returning from abroad after graduation has been very tight. A great many construction businesses, and a number of consulting firms (about 40 of the 45 that won contrcts from Nigetip) were created with these specific opportunities in view, with support from an informal -taining program that involved apprenticeship assignments with Nigetip. Without the Nigetip project, it is likely that a major portion of professionals would have had to go abroad to seek employment. The activities undertaken have represented a significant opportunity for them since 1995, at a time when construction and public works activities in Niger were for the most part effectively shut down. The project has allowed these contractors and consulting firms to prosper and grow. The training and technical assistance provided to firms awarded work contracts under the project, to the consulting firms and to the beneficiaries (in particular the municipal governments) has had a major impact on the sector. In total, over a period of three years, 793 business managers and technicians have benefited from technical training modules, and 250 from management modules. A training session for consulting firms was also organized with German cooperation. Twenty-four consulting firms received training over a two-week period on topics related to planning, preparing bid proposals, and construction techniques using local materials. 12. Demonstration of the feasibility of labor-intensive subprojects and procedures testing. The results are globally positive. With respect to the use of labor-intensive techniques, the field results obtained in Niger, as in neighboring countries, were highly satisfactory, and showed the broad feasibility of executing subprojects in this manner. These encouraging results should be viewed against a context where the Agency has to sub-contract studies, works and supervisory activities to local firms. This approach poses no particular problems for straight- forward works of the kind regularly undertaken by competent local companies, as was the case under this project. In future projects, however, it will be important to ensure that the local resources required for the investments are actually available, or that, if necessary, the works program can be supplemented by a training and support program for local contractors and consulting firms. 13. With respect to the studies and their impact, the results were mixed. The study on bottlenecks in procurement, contracting, supervision, payments and audits that impede project  -5- implementation was carried out. The consultants submitted a draft Plan of Action to the Government in September, 1992, that included a draft decree amending and supplementing decree No. 89/117/PCMS/PM of April 27, 1989 on the regulation of public procurement. During the course of 1996, the National Commission on Public Procurement (CNMP) began a gradual implementation of these recommendations, and succeeded in reducing the number of procurement steps from 33 to 13. Unfortunately, contrary to earlier expectations, the new regulations have not been introduced. The program aimed at encouraging community participation in maintaining urban infrastructure financed by the project has been partially implemented. The target beneficiaries of the subprojects have been sensitized. The quality of projects submitted to Nigetip has improved, but there has been little benefit in terms of community maintenance of infrastructure. Finally, the preparatory study for setting up a mutual guarantee company was successful. It was presented in 1995, and has helped to strengthen the Taimako ("Entraide" or mutual aid), a cooperative institution created in 1993 with a statute allowing it to provide financial guarantees. Taimako now has 1,900 members, including 140 contractors and consulting finns, and it has provided about 50 guarantees for start-up loans and contract holdbacks under the project. To date, only one guarantee, in the amount of CFAF 600,000, has failed to be recovered. Economic Analysis 14. An economic analysis was conducted during the project appraisal stage, on the basis of a sample of subprojects eligible for financing under the Credit: removal of sand from roadways, road surface rehabilitation, cleaning out drainage ditches, garbage collection, building repairs and the treatment of koris (seasonal watercourses). In those cases where internal rates of return could be determined, they were estimated at 26 per cent (for clearing sand from roads) and 51 per cent (for pavement rehabilitation). An ex post analysis was conducted in 1997 to validate these data and to test a suitable method for the economic and financial analysis of projects that Nigetip could use in the future. Applied to the first set of subprojects proposed under the Urban Infiastructure Rehabilitation project then in preparation, this method allowed IRRs to be calculated for various types of subprojects, income-generating or not: building rehabilitation (27 per cent), street paving (21 per cent), drainage (28 per cent), construction of sports facilities (20 per cent), bus depots (45 per cent), slaughterhouses (39 per cent), etc. These data confirm the economic soundness of the urban works program managed by the Agency, and they have now been integrated into the method of selecting subprojects for which Nigetip will be responsible under the new funding agreements with various donors. D. FACTORS AFFECTING THE PROJECT Factors not attributable to the Government 15. The only important event affecting the project was the devaluation of the CFA franc on January 12, 1994. In the wake of this move, a Bank mission visited Niger to discuss with the Government the possibility of a supplementary Credit that would help to overcome the negative effects of the devaluation on low-income groups. The Bank and the Government agreed at that  -6- time on the need to set up a supplementary Credit of US$ 10 million in order to expand employment opportunities, in particular by increasing the volume of works related to the projects then underway. Negotiations were concluded in Niamey in August 1994, and the Credit was approved on November 10, 1994. Effectiveness was postponed three times because, as with the original Credit, the legal opinion was late in arriving at the Bank. The supplementary Credit was finally declared effective on September 18, 1995. This led to the extension of the closing date of the initial Credit, from December 31, 1994 to June 30, 1996. In light of the delay in declaring the supplementary Credit effective, the 1995 work program of Nigetip was slowed down significantly, for reasons that had nothing to do with the Agency's own capabilities. In order to make full use of this supplementary Credit, the closing date of the Credit had to be postponed yet again to June 30, 1997. Factors attributable to the Government 16. The Government was supposed to provide counterpart funding for 10 per cent of project costs, or the equivalent of US$ 3.3 million. The counterpart contribution for 1992 was paid only in part (CFAF 150 million of a total of CFAF 412.5 million due), because of the country's institutional and financial difficulties. To force the project back on track, IDA threatened suspension of disbursements. The Government then turned to the European Community, and subsequently to the Dutch Government, and between them, the needed counterpart funds were finally provided through budgetary support (CFAF 500 million and CFAF 359 million, respectively). In addition, according to the appraisal report, cofinancing of US$ 10 million was expected from other donors, in particular the KfW and OPEC. A KfW grant of DM 13 million was negotiated in 1992, and has been fully implemented. OPEC approved a credit of US$ 4 million on September 11, 1991 (554-P). Unfortunately, OPEC suspended aid to Niger in 1995, for default on payments. This suspension meant that Nigetip was late in making nearly CFAF 500 million in payments to the contractors, who were consequently obliged to stop work. 17. Nigetip, the agency created under the project, was in fact responsible only for execution of the works and services component. The other project components were supposed to be carried out by the Coordination Unit for the Program to Alleviate the Social Costs of Adjustment (PACSA), within the Planning Ministry, which moreover had overall responsibility for the project. So it was Government's responsibility to implement the new procurement guidelines. Unfortunately, this procedure did not come to fruition, and despite some improvements, the average lapse of time between the issuing of a call for bids and the signing of a contract has remained very long. 18. At the conclusion of the project, the Government asked Nigetip to suspend implementation of the final portfolio of works that was about to be launched, and to replace the planned social facilities with customs stations. While this decision may have appeared justified from the Government's viewpoint (because it would help to increase state revenues), it was a blow to the beneficiaries, and has led to a certain amount of foot-dragging and resentment on the part of the local authorities. Furthermore, it definitely was not sustaining the project's rationale. In order to diminish the impact on the people concerned, the Government has undertaken to devote future funds to the construction of social infrastructure.  -7- Factors dependent on the project unit 19. Nigetip has been able to execute the subprojects and to disburse the credits under highly satisfactory conditions, despite the difficult institutional environment. This success is due in large part to the Agency's autonomy, which the Government has wisely preserved, and to its strict adherence to carefully prepared procedures. E. SUSTAINABILITY OF THE PROJECT 20. The project can be said to be probably sustainable. This probability must be looked at from two angles: (i) the capacity of Nigetip to endure after closing of the IDA Credit, and to continue responding to requests for support from the beneficiaries, local governments and government departments; and (ii) the sustainability of the sub-projects financed under the Credit. Sustainability of Nigetip 21. Over the medium term, the agency is probably sustainable, to judge from the capacity it has shown to mobilize funds from sources other than IDA and the Government. Despite the unfavorable institutional environment, Nigetip has in fact been able to offer itself as the executing agency for other projects, financed by IDA and other sources to a total of nearly CFAF 36 billion. At the same time, Nigetip has been retained as the executing agency for the new Urban Infrastructure Rehabilitation project. This will represent three to four years of continued, steady activity for the Agency. Beyond that horizon, the agency's sustainability will depend on the ability of the beneficiaries to finance sub-projects on their own, or to find the necessary funding by themselves. Given the current circumstances of Niger's urban sector, it might be suspected that the agency's long-term sustainability is uncertain. Sustainability of the subprojects 22. The sustainability of the works themselves is also probable over the medium term, and uncertain over the long term. It will depend on the ability of the beneficiaries, primarily the municipalities, to mobilize the needed fimding for maintaining the works carried out under the project. The agency has already introduced a mechanism whereby it will turn down subprojects submitted by beneficiaries who fail to maintain works already in place. Initially, beneficiaries are likely to set up the necessary maintenance mechanisms so that they can remain eligible for the funding still available. Over the longer run, however, their capacity to finance this maintenance will depend on the institutional reforms now under study within the broader context of decentralization in Niger. It is only through the preparation and introduction of reforms of this kind that sufficient resources for infrastructure maintenance, at the central and local levels, can be mobilized.  -8- F. THE BANK'S PERFORMANCE 23. The Bank's performance has been satisfactory. The Bank was able to draw upon the lessons from its experience with the first AGETIP project in Senegal to shorten the preparation time for this project. A project identification mission was conducted in February 1990. No further preparatory mission was necessary, and the project appraisal mission followed. During negotiations, the Bank accepted the Niger delegation's request to raise the proposed amount of the Credit from US$ 15 million to US$ 20 million. The Bank's project supervision was also highly satisfactory. The appraisal report called for three supervision missions per year between 1991 and 1993, but this turned out to be unnecessary. In fact, there were two supervision missions each year, from 1992 to 1995, one in 1996 and a final one in 1997, reflecting the fact that the closing date of the project had been extended to accommodate the supplementary Credit agreed in 1994. This pattern of supervision was fully adequate, thanks to the excellent performance of Nigetip. The record of management stability was excellent: there were only two project task managers over the seven year period. G. THE BORROWER'S PERFORMANCE 24. The Government's performance was satisfactory. It allowed the executing agency to function as planned. Nevertheless, the initial Credit signed on April 5, 1991, was only declared effective on December 1991, after two postponements, and the supplementary Credit only came into effect nine months after signature: delays in both cases were caused by the Govermnent's failure to provide the required legal opinion on time. Moreover, the Government was not able to meet its commitments for counterpart funding for the project in a timely manner, and the resulting shortfall had to be made up by appeals to the European Community and the Dutch Government. Finally, the study for improving public procurement contracting procedures was carried out in a satisfactory manner, but the Government has not taken it fully to heart, and has yet to issue the necessary decrees. 25. As stipulated in the Credit Agreement, the project accounts were audited twice a year by independent auditors acceptable to IDA. Audit reports were submitted to IDA on a regular basis, although with some delay, and they consistently certified that the accounts faithfully reflected the project's financial situation. Moreover, while these were not required under the Credit Agreement, a technical audit and an analysis of the Agency's operations were conducted in 1995 and 1996, on the basis of which certain improvements in the Agency's procedures were suggested. Performance of Nigetip 26. The performance of the executing agency, Nigetip, can be judged as highly satisfactory. The Agency was organized as a private body, with its own Board of Directors, chaired by the General Manager and composed of six members: the Business and Industry Employers' Association of Niger (SPEIN), the National Association of Small and Medium-Sized Enterprises of Niger (SYNAPEMEN), the National Union of Cooperatives (UNC), the Confederation of  -9- Labor Unions of Niger (USTN), the Association of Cities and Communes of Niger (AVCN), and the Women's Association of Niger (AFN). The Agency launched the project swiftly, and pursued its work at a steady pace, in scrupulous observance of the procedures manual. There were no problems with procurement or contracting: local contractors and consultants benefited greatly from the project and from the procedures in place, in particular Nigetip's practice of making prompt payments. In 1993, the average turnaround time for invoices was 3 days, compared with the 10 days called for in the procedures manual. 27. The total financing obtained by NIGETIP from its inception amounts to nearly CFAF 36 billion, or three times the amount provided by IDA. It was only because it could offer assurances that the investments would be conducted in a fully transparent manner, according to clearly stated procedures, that Nigetip was able to attract such significant resources. Donors Agreed amount (CFAF million equiv.) IDA Projects Public Works and Employment (Cr. 2209-0-NIR) 6,348 Public Works and Employment (Cr. 2209-1-NIR) 4,800 Health 514 Education II 530 Population 1,556 Other donors' projects KfW 3,948 KfWII 5,040 FSD (French cooperation/CFD) 2,541 DFC/Secondary towns 2,000 EDF 2,022 PAPAS/Labor Intensive Projects 1,000 PAPAS HEALTH 213 PAPAS EDUCATION 659 Lux Development (Crafts village) 317 OPEC 2,200 CIDA (Schools) 823 PROZOPAS (EDF - Pastoral areas) 239 BNI/Niger 359 Misc. donors 52 Total 35,161  -10- H. ASSESSMENT OF PROJECT OUTCOME 28. The project may be considered as satisfactory. It attained and in fact exceeded its objectives in terms of job creation, which was its primary raison d'etre, and physical objectives as well. It had a considerable impact on local contractors, and in particular on the engineering firms, since Nigetip has consistently been the only agency providing steady work for these entities. I. FUTURE OPERATIONS 29. The Nigetip experience, and similar experiences elsewhere in sub-Saharah Africa (Senegal, Burkina Faso, Mali, Togo, Madagascar, Gambia, Benin, Mauritania), have demonstrated that the objectives of reducing poverty and improving management are in fact attainable goals when pursued by agencies of this type. Already, a new project has been prepared and readied for implementation, as called for in the country assistance document (CAS, May 1994): the Urban Infastructure Rehabilitation project (Cr. 2857-NIR), approved by the EBoard on May 29, 1997, will provide further impetus to the anti-poverty campaign by prolonging urban job creation activities. It is expected to become effective shortly. Moreover, in addition to the first grant provided by the German KfW, a second grant of DM 15 million is likely to become effective in the near future, now that the previous suspension of disbursements has been lifted. Finally, the CFD is now activating an operation for secondary towns, in the amount of CFAF two billion. These are all quick-disbursing projects, aimed at promoting short-term solutions to the country's current difficulties, and all have a strong social component. Over the longer term, a sound sectoral policy to promote urban productivity will be required if the country's decentralization (now in the planning stages) is to proceed, and if the persistent problems of its cities are to be addressed in depth (improvement of municipal management, capacity building, resource mobilization, etc.). J. KEY LESSONS LEARNED 30. This project was the first of its kind in Niger. As deemed appropriate at the time of preparation, the objectives identified were simple and limited in scope. This choice was a good one and proved to be very appropriate given the current situation of the country. There are some important lessons to be drawn from the project, and these are in line with those from previous y Agetip projectsrThe project has demonstrated that: (a) An autonomous agency with its own statutes, such as the Nigetip agency, is fully capable of carrying out public works, quickly and effectively, by relying entirely on domestic human resources. All that is required is to set out clearly and in advance the procedures that are to be followed, to select the persons needed to apply them, and to make use of them within an appropriate managerial framework.  -1 1- (b) Nigetip is merely an implementation tool at the service of the beneficiaries (municipalities, government), who must retain full responsibility for investment identification, planning, programming and maintenance. As a tool, the Agency cannot by itself compensate for the lack of a sound policy for the sector in question (urban development, health, education, etc.). The links between Nigetip and the sectoral programs or projects should serve to strengthen project management, especially at the municipal level, and these links need to be clearly thought out before the agreement delegating that management is drawn up. (c) Quality is an important consideration in selecting sub-projects. The current ad hoc approach to operations should be replaced by a single, coherent investment program, extending over several years as necessary. Despite their highly positive impact, some subprojects have been accorded insufficient priority by the municipalities. Municipalities would benefit greatly from a planning framework that would guide the selection of local investments. (d) Grass-roots community participation must be assured if sub-projects are to be sustainable, and if there is to be a proper match between the problem and the nature of the response to it, in particular with respect to the cost of the investment and its maintenance. Despite the great efforts made under this project, much remains to be done to resolve this aspect. 31. These lessons learned, as well as the Operations Evaluation Department's audit of Agetip projects in Africa have been taken into consideration during the preparation of the Urban infrastructure Rehabilitation Project. The first steps toward improvement are reflected in the Staff Appraisal Report of this new project (report n