Burkina Faso - Public Works and Employment Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 16576 IMPLEMENTATION COMPLETION REPORT BURKINA FASO PUBLIC WORKS AND EMPLOYMENT PROJECT CREDIT 2282-BUR May 15, 1997 Water, Urban and Energy 2 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.  CtIRRENCY EQt l,1IVLFNTS 1991 l s$ 1100 GI ('1 L 2'8 1992 l. SS 1.00 CTAIM 265 1993: UiSS 1.00 () I \' 280 1994: (1S1 it00o ('I 5AI 1995; 1U5 I .00 (' CI \1 4() 1996: IUS$ 1 00 ('[ \1 4() FIS CA \1 FA R Januiar} l-I)eccimbei 31 ABBREFVIATIONS ANI) \(ACRONYMS1 A (GFlTI P AxecCuting AgencN lor Public Work\ s and I nmp)ovilelt Pro;ject (TFl) ('aisse Francaise de D)c\ctoppelnmit (FIrcnch ('oopcratioll) Cl D)A (Canadian Internationial D)eveloIupmnt nl\Acic\ FAC Forids d'Aide et de Coopcration ( rcnchb Cooperation) (I'll I')uCiLsche JCesGleIscIlMIt lr- I-CIcI hnsch)c 1usamllilmicrhllIlcit (6(icrina ( ooperaltion) Kl-W Kreditanstalt fur Wiederal-IlbLtl (G cHIMan C ('rClrationil) ONl'l-' National Office l'r LniploNnicilt Promoti io P [) D'ublic Institutionial i)evclxopillnllt Pro-ject PIPF lroicct Preparation Faciliji TIPI Public Works anid 1liip1omeni Vice 1'resident: Mr. leaM-I .(LiS Sarbib. A[RVP Dircctor: Mr. Serc Michailol'. Al ('t(' 'I'ecnilical Manager: M!r M ax PIulgar-\ idal. AFl 11)2 Team Leader: Mr. Christiani D)ioL. Al 'li'2  FOR OFFICIAL USE ONLY TABLE OF CONTENTS PREFACE EVALUATION SUMMARY PART 1: PROJECT IMPLEMENTATION ASSESSMENT Introduction A. Project Objectives B. Achievement of Objectives C. Major Factors Affecting the Prcject D. Sustainability of the Pro ject E. Bank Performance F. Borrower Performance G. Assessment of Project Outcomc H. Future Operations I. Key Lessons Learned PART II - STATISTICAL ANNEXES Table 1: Summary of Assessments Table 2: Related Bank Credits in the Sector- Table 3: Project Timetable Table 4: Credit Disbursements: Cumulativc Estimated and Actual Table 5: Key Indicators for Project linplemcintation Table 6: Key Indicators for Project Operation (not applicable) Table 7: Studies Included in Project Table 8A: Project Costs Table 8B: Credit Allocation by Category Table 9: Economic Costs and Benefits (not applicable) Table 10: Status of Legal Covenants Table I1]: Compliance with Operational Manual Statements Table 12: Bank Resources: Staff Inputs Table 13: Bank Resources: Missions This document hag 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.   PREFACE This is the Implementation Completion Report (ICR) for the Public Works and Employment Project in Burkina Faso, for which Credit 2282-BUR, in the amount of SDR 15.0 million (US$ 20 million) was approved on June 27, 1991 and declared effective on December 31. 1991. The Credit was closed on June 30, 1996. after a one year extensioni. The final disbursement took place on August 15, 1996 and the credit was fully disbursed. This Implementation Completion Report was prepared by Gerard Tenaille, Consultant, and Christian Diou, Senior Municipal Engineer. AFTU2. task manager for the Project. It has also benefited from comments from Alberto Harth, AFTU2. Preparation of the report started during a mission to Burkina Faso in April 1996, of which the aide-memnoire 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 [ebruary 1996 and through its comments on the draft ICR.   IMPLEMENTATION COMPLETION REPORT BURKINA FASO PUBLIC WORKS AND EMPLOYMENT PROJECT CREDIT 2282-BUR EVALUATION SUMMARY Introduction 1. This Implementation Completion Report evaluates the Public Works and Employment Project (TIPE) in Burkina Faso, implemented by the Faso Baara Agency, an institution created on the model of the AGETIP Agency in Senegal. Project Objectives 2. The major objective of the project was to reduce under-employment by the financing of small urban labor-intensive works, executed by local enterprises and consulting firms, which the project would assist via training and very rapid payment conditions. The other objectives are closely linked (para. 4). On the whole, these objectives were reasonable and within the capacities of the authorities and contractors in Burkina Faso. But the implementation schedule of three years was not realistic (para. 5). Experience and results 3. The project attained most of its objectives, both as r egards the number ofjobs created and physical achievements (para. 16): (a) The number of jobs created was always higher than the estimates made at appraisal: 16,010 at the end of 1994 as against 11,700 projected, and 19,680 at the end of June 1996. It should be noted that 1994 was the expected date for the completion of the project, and that the extension of the closing date of the Credit allowed the implementing agency to continue the execution of the project till June 1996. During that extension, other financing made it possible to increase the volume of works; (b) The number of contracts awarded in 5 years w\as 3 14, as against 270 estimated at appraisal for 3 years; (c) The number of contractors and consulting firms which obtained contracts was 175 and 53, respectively; and (d) The number of contractors and consulting firms which benefited from training under the project was 122 and 25, respectively. 4. On the other hand, the objectives as regards the percentage of contracts conforming to the initial time schedule and budget were not met. The appraisal report put those percentages at 88  v percent in both cases, but in practice they were only 58.82 percent and 83.1 percent, respectively. The first of these figures seems very low, but an in-depth review shows that the consulting firms are mainly responsible because in the bidding documents they almost systematically stipulated a three- month construction period (para. 17). 5. The impact of the project on the public procurement procedures was also very positive. The project financed a study to identify the bottlenecks in public procurement and to propose measures to improve it. The conclusions were discussed with the ministries concerned and the Public Institutional Development Project (PID) financed the preparation of a new decree on public procurement. This decree was signed by the President of Burkina Faso on March 7. It constitutes an appreciable improvement compared to previous procedures (para. 18). 6. The cost of the project was estimated in 1991 at CFAF 9.45 billion, of which 7.5 billion related to the IDA financed project and 1.95 billion to parallel financing. At the Credit closing date, the cost of the project amounted to CFAF 18.04 billion, of which 6.84 billion represented IDA financing, 0.94 billion the national counterpart and 10.27 billion parallel financing. These considerable amounts in CFAF of executed works are due in particular to the devaluation of January 1994, the IDA Credit being denominated in SDRs. 7. The implementation schedule was exceeded by 18 months. This delay is due to the Government's decision not to renew the contract of the director general of Faso Baara, in March 1994. This led to a notable slowing of activity until the nomination of a new director general acceptable to IDA, in June 1995. At this date, operations returned to normal and the management ratios were restored. 8. Important factors affecting the project. The only major factor affecting the project was the non-renewal of the director general's contract, on March 11, 1994, without any valid reason. Even though IDA would have been justified in taking remedies leading to cancellation of the Credit, it preferred to leave the project dormant, letting Faso Baara execute the sub-projects already approved (sub-projects of less than CFAF 125 million for which at least five bids had been received, and for which, according to the procedures manual, para. 20, it was not necessary to obtain IDA's no-objection). This event would have only been a passing incident if the director general had been replaced quickly. However, the new director general was nominated and accepted by the Bank only on June 5, 1995, 15 months after the departure of the previous one. This gap had a negative impact on the project: what should have been done in 4 years took 6, and Faso Baara survived only by financing its activities from other sources (para. 21). 9. Sustainability of the project. In the medium term, the agency's sustainability is assured by the capacity it demonstrated to mobilize funds other than those of IDA and the Government. In the long term, the agency's sustainability will be a function of the capacity of its beneficiaries, whether communes or administrations, to finance the sub-projects and the maintenance of the executed works on their own, or to find the necessary funds. The same is true of the sustainability of the works themselves, which will depend on the ability of the beneficiaries to mobilize the necessary resources for their maintenance (para. 24).  vi 10. The Bank's performance was satisfactory, particularly during the supervision phase (para. 26). H1. The Borrower's performance was mixed. The Government respected its commitment to provide the funds needed to complete the project, and indeed went much further, since it provided CFAF 1,600 million, compared to an initial commitment of CFAF 555 million. But its decision not to renew the director general's contract, in March 1994, had negative consequences (para. 27). The performance of the implementing agency, Faso Baara, would have been excellent if an accounting error at the end of the project had not led to an over-commitment of CFAF 780 million in relation to the funds available. This problem was resolved by transferring the liabilities of Faso Baara to the Urban Environment Project (Credit 2728-BUR), under an agreement existing between the two projects (para. 29). Conclusions, Future Operations, and Major Lessons 12. The project can be deemed highly satisfactory. (para. 31). 13. The project's good results could justify pursuing the experience with a second project of a similar type, to support the development of local capacities (para. 32). 14. The lessons to be drawn from the project are important and confirm those learnt from other AGETIP projects which have been completed. The project showed: (a) that a private institution like Faso Baara is perfectly capable of executing works of public interest quickly and efficiently, without any external technical assistance. It is important to specify clearly, in advance, the procedures to be followed, to choose the right persons to implement them, and to apply them in an appropriate framework; (b) that Faso Baara is an executing agency at the service of the Borrower. Such an agency cannot by itself compensate for the lack of a sector policy (urban development, health, education, etc.). The links between Faso Baara and the programs or sectoral projects using its services should be carefully reviewed during the preparation of the agreement delegating the project management to Faso Baara; and (c) that provision must be made for grassroots participation in the definition of sub-projects so as to ensure the sustainability. Systematic maintenance of facilities built under the project is an issue that will be addressed under the follow-up project. 15. External technical assistance, limited in this project to training provided by GTZ, should not be necessary if another project is considered (para. 33).   IMPLEMENTATION COMPLETION REPORT BURKINA FASO PUBLIC WORKS AND EMPLOYMENT PROJECT CREDIT 2282-BUR PART 1: PROJECT IMPLEMENTATION ASSESSMENT PROJECT IDENTITY Name of the Project: Public Works and Employment Project No. of Credit: 2282-BUR Amount of Credit: SDR 15.0 million (USS 20 million equivalent) Executing Agency: Faso Baara Vice-Presidency: Africa Region Country: Burkina Faso Sector: Urban Sub-Sector: Urban Works INTRODUCTION I. Between 1980 and 1990, a high population growth rate of 3.3 percent and a heavy migration towards the cities led to accelerated urbanization in Burkina Faso. Employment creation could not keep up with the rise in demand: in 1987, a survey carried out by the National Office for Employment Promotion (ONPE) showed that, for the principal cities (Ouagadougou, Bobo- Dioulasso and Koudougou), demand for jobs was 3 1,974 as against a supply of 5,470, giving a demand satisfaction rate of 17 percent. At Ouagadougou, the ratio was even worse : 14.8 percent. In 1990, the urban unemployment rate was II percent taking into account the informal sector, and 25 percent if it was omitted. 2. While preparing a structural adjustment program with a view to improving the management of public resources, the Government of Burkina Faso requested IDA, on September 3, 1990, to finance a feasibility study for a National Employment Promotion Fund. It was then proposed to undertake a program of small labor-intensive works for improvement and rehabilitation of urban infrastructure, whose impact on employment would be incremental to that of more important works planned under the Second Urban Project (Cr.2067-BUR) : road repair and maintenance, rehabilitation of drainage systems, restoration of schools and dispensaries, etc. 3. Taking advantage of its experience in similar projects in Senegal and Niger (AGETIP projects), IDA was able to help the Government rapidly prepare a similar project for Burkina Faso. In a context of ongoing reforms at the macro-economic level, this project provided private contractors with an opportunity to develop and to demonstrate their capacity to carry out programs of public works and housing efficiently.  - 2 - A. Project Objectives 4. The project's objectives were to: (a) finance a program of small municipal works in the area of urban infrastructure upgrading and rehabilitation; (b) encourage local private contractors and consulting firms to participate in project execution; (c) improve, through execution of the works financed by the project, the individual skills of the workers employed as a result, and the competitiveness of the firms carrying out the works, so as to develop their capacity to respond to increased opportunities for sustained employment, after completion of the project; (d) 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; (e) review existing public works programs and recast them with the intent of speeding up their implementation and overall performance; and (f) demonstrate the feasibility of labor-intensive projects and test the procedures that would ensure the public sector's ability to commission such projects. 5. These objectives were clear and reasonable. However, the implementation schedule of three years was not realistic. Project Description 6. To meet these objectives, the project included the following components: (a) a program of public facility and infrastructure rehabilitation and maintenance in urban areas to be carried out in a labor-intensive manner 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 awarded contracts under component (a); (c) a supervision and monitoring component in order to closely monitor the progress of the project and to prepare the transition toward locally-supported employment of the target group; (d) a selective audit of public works programs to identify bottlenecks and design system improvements; and (e) a package of consultant services to design a program to train the beneficiaries and engineering firms in the preparation of feasibility studies and technical project proposals; and a program aimed at increasing grassroots participation in urban infrastructure maintenance. 7. The project's design was based on project management being delegated by the beneficiary (a public body, ministry or local authority) to an executing agency independent of the Government (Faso Baara), which was to be created to execute the project. The objective was to allow the Government to delegate the responsibility for project execution, while retaining the responsibilities for planning and budget preparation.  -3 - Project Organization 8. The functioning of the agency was based on the Procedures Manual (annex 2 of the appraisal report) approved during negotiations, which specified in particular the eligibility criteria for the sub- projects submitted by the beneficiaries to Faso Baara. If the sub-project was declared eligible, Faso Baara appraised it and signed a delegated project management agreement with the beneficiary, by which all rights and obligations of the beneficiary were transferred to Faso Baara for the construction period of the sub-project. Faso Baara financed all the sub-projects with funds provided by the IDA Credit and other donors, as well as the Government, and no reimbursement was required from the beneficiaries. As a consequence, these works became part of their investment programs, without impacting their financial situation. 9. Faso Baara took care of all the bidding procedures and awarded the contracts for sub-project studies and works. It supervised the works, paid the consulting firms and contractors, and attended the commissioning of the works after completion. The role and responsibilities of Faso Baara were made very explicit in the procedures manual, which the agency always followed rigorously during the project execution. So that all the entities involved in the project perfectly understood their role and the procedures to be followed, Faso Baara organized meetings for all the beneficiaries and qualified bidders. Project Preparation 10. Because of the urgency, and thanks to the experience acquired in Senegal with the first AGETIP Project (Credit 2075-SE, approved on 12/14/89), project preparation was very rapid. The project was identified in October/November 1990, and appraised in March/April 1991. The project was well prepared, thanks to a Project Preparation Facility (PPF) advance of US$ 600,000, requested on November 6, 1990, and approved on November 28, 1990, under the number P.654-BUR. The appraisal mission took place from March 23 to April 9, 1991. I. To ensure the project would start on time, a sample of five sub-projects was reviewed and approved by IDA during the appraisal mission including: (i) paving and maintenance of streets; (ii) construction of small embankments; (iii) rehabilitation of a public building; (iv) cleaning of the urban drainage network; and (v) collection of household garbage. These works were financed by a second PPF advance, in an amount of US$900,000, requested by the Government on April 30, 1991, and approved on May 31, 1991, under the number P.654-1-BUR. In fact, five sub-projects got off to a good start in October 1991, but were somewhat different from those planned at the appraisal: (i) paving of a street; (ii) rehabilitation of two public buildings (national assembly and a maternity center); (iii) construction of new drainage ditches; and (iv) collection of solid waste. Thus, the construction of small dams was replaced by the rehabilitation of a second public building, and the cleaning of the drainage network by the construction of new ditches. These justified changes had no effect on project preparation. 12. The negotiations were held in Washington from May 17 through 21, 1991. At the request of the Burkinabe delegation, the amount of the Credit was increased from US$ 15 million to 20 million. The Credit was approved on June 27, 1991, by the IDA Board and signed on July 5, 1991. The conditions of effectiveness were : (a) the appointment of the director general, technical director and  - 4 - financial director of Faso Baara, all to be acceptable to IDA; (b) the selection and approval by IDA of a first portfolio of sub-projects for at least US$ 4.78 million; (c) signing of an agreement between Faso Baara and the Government, defining the agency's missions; (d) the pre-qualification of an initial list of contractors and consulting firms; and (e) the introduction of an accounting system, the selection of auditors and the submission to IDA of a training program for the beneficiaries and consulting firms. Initially projected for October 3, 1991, the effectiveness of the Credit was finally declared on December 31, 1991. Project Implementation 13. The start-up of the project was rapid and satisfactory: as early as October 1991, before the Credit became effective, the five test projects defined during the appraisal mission were launched using PPF funds. During the first year, in 1992, 9,467 jobs were created, for an average of 37 days. In 1993, these figures were increased to 15,406 jobs (cumulative) and 44.2 days. Activity slowed down in 1994 and 1995 because of the departure on March 11, 1994, of the director general, who was only replaced on June 5, 1995 (para. 20 below). During those fifteen months, IDA suspended all no-objections. Only contracts for less than CFAF 125 million for which at least five bids had been received and which were included in a portfolio already approved by IDA could be executed, since they did not require a no-objection from IDA. Job creation was limited to 604 in 1994 and 264 in 1995. In 1996, 31 sub-projects were executed for a total amount of CFAF 1,904 million; 3,406 jobs were created, and CFAF 132.9 million were distributed as wages. By June 30, 1996, the closing date of Credit 2282-BUR, 19,680 jobs had been created for a global amount of wages of CFAF 1,178,265,313. The average wage by job and by day were CFAF 59,871 and CFAF 1,267 respectively, for an average job duration of 47.25 days. The Credit financed mainly rehabilitation and construction of small buildings (60 percent), drains (17 percent) and road upgrading (13 percent). 14. In 1994-95, the Agency's activity continued at a high level, even in the absence of the director general, but using other financing. Faso Baara since its creation has been responsible for numerous sub-projects financed by other donors: Special Development Fund, financed by the Caidsse Francaise de Developpement (CFD) and FAC (French aid agency), covering 24 sub-projects completed at the end of December 1995, for an amount of CFAF 1,389.6 million, which generated 147,000 person/days of work; Fourth Education Project, concerning the construction and equipment of 100 schools, covering 61 contracts for a total amount of CFAF 2,327.3 million, completed in February 1996; Health Services Development Project, for which 3 contracts were signed, for an amount of CFAF 127.5 million. The works which had been stopped because of the closing of the Credit were started again under the Health and Nutrition Services Project (see below); National Institute of Agronomic Studies and Research (INERA), for which CFAF 351.2 million have been committed, involving on one hand studies awarded to consulting firms for  - 5 - CFAF 162.3 millioni and on the other 4 conti-acts for 'A irks in the aLimounlt of'CFAF 1 88.9 'illion, Health and Nutrition Development Project, for a global amount of CFAF 5.3 billion. A first portfolio of 13 sub-pro'jects. representing 83' contracts for an amount oflCFAF 3,786.6 million, is under implemlienitation: Public Institutional Development Project (PI'D). f'or CI amo III 0uL1t of ('[AlI' I ,1(1 millio.1, but the continuationi ot' its implementation is ulidel- re iC\\ . in the framnework of tile PID mid- term review; Basic Education Support Project, tfinaniced b! CI)A. A first phase involved the rehabilitation and equipment of 65 schools lor an amount of CFAF 402.7 million. A second phase, under implemenitationi, will finance the coinstructioni and equipmenit of 8 new schools for an amount of CFAF I 353 millioni Food Security and Nutrition Project. for an amount otfCFAF 1.034 1 million, involving implementation of two portfolios of suh-pro jects. T'he l'irst one. amounting to CFAF 320.1 million, comprised 20 SLub-projects in 1994 in lPassore l'romince. Thle second portfolio, comprising 27 sub-projects in 4 provinices anlountineL to ('AF 714.3 million, is almost completed; Fada N'Gourma School of Vocational Education Project, in the amount of CFAF 1,805.1 million, financed by the Government of Netherlanids, f)r the construction and equipment of the Fada N'Gourma School of Vocational FLducationi l'rooject. This project is at the procurement stage: National School of Public Health Project. in the amounlt of CFAF 1 ,840.0 millioll, financed by the Danish Governmcnt lor the construction1 of'thiree trainingp centers of the National School ol' Public Health at Ouagadougou. l3oho-D)ioulasso and Fada N'GoUiorma. The preparatorv studies are almost completed: and Small Projects for other Agencies. in the amount of ('FAF 481.3 million, financed by the Population and Aids Control Pro ject, the JUrban Environlinent Project (pilot phase of support for the preparation of the tUrban Environmenlt l'roiject). the CFD and PASEC-TRANSPORT. 15. Faso Baara also obtained from KfW (the Germana aid agency) a credit of DM 21 illion (about CFAF 7,350 million). The works relating to a first portfolio of sub-projects, for an amount of CFAF 1,012.8 million, are almost completed. A second portflolio of suh-projects is in preparation. This financing, in addition to the projects mentionied aho\ e, \k ill enable [aso Baara to pursue its operations until Credit effectiveness for a possible seconld H'PI' Project. Faso Baara also signed a delegated project managemiienit agreement with the Population and Aids C'ontrol P'roject. for an amount of CFAF 412.2 million,. but the works have not started v et.  - 6 - B. Achievement of Objectives 16. The project's results are very satisfactory in terms of job creation, private sector development and contractors' technical capacity, as well as physical achievements. Table 5 in Part IlI shows that the number of contracts awarded in five years exceeded the appraisal estimate for three years (314 against 270). and the cumulative number ofjobs created has always been higher than the appraisal estilmate: 16,010 at the end of 1 994 as against 1 1,700, and 1 9,680 at the end of June 1996. The impact of the project was also very beneficial for the consulting firms and contractors who obtained contracts: about CFAF 6 billion of the IDA Credit was shared among 175 contractors and 53 consulting Firms, and the traininig provided under the project to 122 contractors and 25 consulting firms impr-oved the quality of'the works. Somlie weaknesses identified during execution, notably in quality control and the establishlimlent ot' procedures for grassroots participation, are being corrected by the updating of the Procedures Manual and the positioning of the agency as a tool to support the policv ot'decentralizationi currentl\ beinlg adopted by the Government. 17. On the other hand. project objectives were not met as regards the proportion of contracts conforming to the original schedule and budget. The appraisal report fixed those percentages at 88 percent for the entire durationi of the project, while the actual figures were only 58.82 percent and 83.1 percent, respectively. This last number is not surprising, sinec unexpected events often affect the final amiount of a contr-act, and to have 82 percenit of the contracts avoid any cost overrun is not a bad result. But it is not nor mal for 41.18 percent of'the colltracts to exceed the stipulated period. The main responsibility here lies with the consultilIg firm>, who almost systematically hicorporated a three-month contract period in all the bidding documelits. The reasoii is probably that the Procedures Manual stated that tor a sub-project to be eligible, the works must be started within three months. But this does not meani that the construCtion period must not exceed three months! The main cause of delay is the period of about one monith reqLilred for the contractor to obtain tax and custom duties exemption. 18. The project's ilmpact on national procurement procedures was also very positive. The project financed a study to identify the bottlenecks in public procurement, and propose measures to improve it. The conclusions were discussed with the miniistries concerned and the PID project financed the preparation of a new decree on procurement. TI'his decr-ee w as signed by BLurkina Faso's President on March 7. 1996. under the numiber- 96/059/PRFS/"MiM\1F1 . It represents a marked improvement compared to previous procedul-es. 19. However. three reser vations can be expressed about this decree: (a) State firms (S'ocLiLs d'Ewt,) should not have been included in its provisions and could have been left f'ree to establish their own procedures; (b) "the Minister of Finance or his representatives shall sign all public contracts". It should have been preferable to specify a ceililg below whichi the signature of the minister concerned would have been sufficient: and (c) Articles 82 and 83 stipulate that an amenidimlenit is mandatory if the volume of the works is 20 percent less than anticipated, and thai a new contract must be signed. following the procedure used ftor the initial contract. if the \ariation exceeds 20 percent. This should be corrected, because this provision is too restrictive. An amendimient is clearly not  -7 - necessary if the overrun in the volume ol'the works is onl\ one percenit. The regulations in most countries authorize an overrun o '20 per-ccntt \ithout the necd 'for an amendment, and require an amendmenit he ond 20 percent. C. Important Factors Affecting the Project 20. The only major factor atfecting the pr-oject \\as the noni-renen\al oflthe conitiact of'the director general without any valid reasoni on March I I 1 994. 1i he Government took this decision without advising the Banik. and without inl'orninii- it oflficialkl alter\ ards. 'rhe appointment of the director general acceptable to IDA wvas a condition of rcrdit cffectiveness: the non-renewal of his contract. without IDAI approval. was a violationl ol thc (Credit \Vrcerment. Although lI)A would have been justified in taking rciiedies lcading to cancellation of th ( Credit. it prefcrr-ed to leave thle project dornant and allov\ Faso Baara to implenlitcit sub-proljcts of less thlian ('IAF1 125 million for which at least five bids had hecn received anid that xxcre alread\ part ofla portfolio approved by IDA (according to the Procedures Manual, it vvas not necessar\ in hese Ci-cumlistanices to request a no- objection from IDA). 21 This event would have onlr beeni a passing incIidti't hte director Ieneral had been quickly replaced. However. the candidates proposed by the (io0ernmcenlt could not obtain the approval of the Bank, whiclh insistcd oln that thev should have a substantial c\pcliencc in the private sector. After difficult discussions. whose near failure almost led to the cancellation oi'the Credit, a new director general was nominated and accepted by the Bank 0sOn J1un1e 5. I 995. l'ifteeni months after the departure of the previous one. This gap had a negative impact o.n the progress of thie project: what should have been done in four years in fact took six. and the niana.^emient ratios sufl'ered fiomil the reduction in turniover. The closing downi ol'Faso Baai-a \%as onI\ ai\oidcd h\ I n;inincinL) its activities from other sources of funds. 22. The non-renewal ol'the director i,eneral's contract hai.d another bad el'f'ect: in February 1994, a Bank supervision mission visited Burkinia FaSo to rc ie\\ tihe If'lects of thie devaluation of the CFA franc. It proposed a suppleicientarx credit of l IS, I 0 mlililoni. in order to rapidly inject additional liquidities into the domestic economy. The l'ormalities ere ulider xx aN in Washington when the departure of'the director general became knovin. Ihich -Lut a1n enid to the supplementary credit project. D. Project Sustainability 23. The project's sustainability can be assessed at txNo I. cis: ( i) thc capacit\ of the implementing agency, Faso Baara. to outlive the IDA ( redit and miaintain its assistance to the beneficiaries, local governments and ministerial departinents x\ hich ricque.,t its help; and (ii) the capacity of these beneficiaries. notably the ncx v\-ccctecd n1LonIicipal itiesC to maobilize the funds needed for maintenianice of thc xxorks executed itnder thc pr( Ject. 24. In the mediulIl tCerill the agency's sustainlahility 1i astiircd hy its demonstrated capacity to mobilize funds other than those of' IDA and Cio crinecnt It \\,as al-ead\ noted (para. 14) that Faso Baara is also an executing agncic\ folr other pro jects. Lsin1 11I )A or other financing. for more than CFAF 15.0 billion. This represents threl-cc caIrs olfact ix thc prescnt rte. I o this caLi be added  the Kf\V Credit t'or DM 21 millioni (]SS 14.0 millioni equi\alent). A possible TIPE2 project. fhianiced bv IDA. would ensul-e the sustainabilitx ot Faso Baara until 2002. Beyond that date. the agenicy's sustainabilitv will be a fuLictioni of the beneficiaries' capacity to finance the sub-projects themilselves. or to find the necessary fiiianicinig on their owIn . Thie same applies to the sustainability of the works: maintenance can onlI be assured bv the beneficiaries themselves, in the context of the deccntralizatioIl goiig onl in 13urkinia Faso. 'I'he Seconid UJrbani Project (Credit 2067-BUR) has helped to strengthen local g(overnments. especially Ouagadougou and Bobo-Dioulasso. Maintenance of facilities finaniced ulider- the project is not set systemnatic. however. This issue will be addressed under the f'ollo -up pro ject. It can therefor-e bc said that the project s sustainability is probable in short and medium1l termii, and unlcel-tail In the long teillm. E. Bank I'erforniance 25. Thle 3anik took advanitagc of' its experienice of'a '11'1 project in Senegal to shorten the preparationi of the project: an identificationi mIissioni In October/November 1990 led directly to the appraisal missioni in March/April 1991 withIout any intervciling preparation mission. The appraisal report coIntainls soIme iniconisistenicies: paragraph 2.05 stipulates that 40 percent of the available funds would be allocated to services. but the cost estimiates (para. 21) do not mention services. The Credit Agreemnent, Scihedule I . containis a categorv I .h lor ser\ ices. f'or an amounit of LJS$ 4. In fact. only SDR 99,000 were Lised tor services. I'herefore. the estimate \Nas unrealistic. 26. The Bank's super-visiOI of the pro'ject as satis'actory. The appraisal report forecast three missions per year until 1994. In fact, there were thiee ImlissiOlns in 1992, two in 1993. one in 1994, thiee in 1 995 and one in 1 996. This was perfectly adequate, taking into account the execution agency's excellent perforimiance. Finally, there were three task managers for the project over a period of five years. which is too many, but this did not have a negative impact on the project. F. Borrower's Performance 27. The Borrower's performance was mixed. Th'le (iovernment met the negotiation and eff'ectiveness conditionis relatively fast and well . but its decision not to renew the director general's conti'act was a blow to the project that could have been fatal. The matter was all the more serious in that during the negotiationis. "thc G,overnimienit had given an assurance that it would ensure that any chanige of the agenicy's di-ector was acceptable to the Associationi" (appraisal report para. 2.26). On the other hand, thc State grcatly exceeded its commnitments as regards its counterpart financing: so far it has made available a total of CFAF 1,600( millioni. against an initial commitment of CFAF 550 million. 28. The perforimianice of'the executing agency. Faso Baara, can be deemed excellent, except for the over-commllitmenit discussed below. The agenc\. though barely established, started the project very quickly and maniaged to carryi out its activities at a high rate, while scrupulously respecting the procedures manlual. Th'le only poilnt worth mentioning is the proportion of its operating costs. Even though the level of its t'ees is not speciftied Ii any legal or conitractual document, the rate of 5 percent was used in all the contract maniagemilent agreciiemiets signed with the beneficiaries. However, in some cases this rate does not cover all its operating expelnses. The solution currently being  9- implemented, would be to apply a variable rate, as a function of the amount of the works and their complexity and location, as is already done for the agreements with the consulting firms. 29. In September 1996, Faso Baara discovered it had undertaken commitments which exceeded by CFAF 780 million the IDA funds available. This situation was not detected earlier because of the lack of systematic reconciliation in the agency's accounting system between the project accounts in CFA Francs and the disbursement data made available by the Bank in SDRs. It would have been extremely bad to the Agency and the Government if the contractors regularly retained for contracts not to be paid on time. Given the difficulty of mobilizing counterpart funds rapidly, and to help the Government solve the problem, it was decided to use unallocated funds from Credit 2728-BUR, effective since May 27, 1996, for the Urban Environment Project. The Auditor confirmed that the mistake was indeed an accounting error and not a fraudulent use of Credit funds. Credit 2728-BUR was able to finance the contracts to be paid if their effectiveness date was later than June 14, 1995 (signing date of Credit 2728-BUR) and if the works conformed to the description of the project in the Credit Agreement. An agreement between the Urban Environment Project, Faso Baara and the Ministry of Finance was signed on November 13, 1996, to resolve the problem. 30. In accordance with the Credit Agreement, the project accounts were audited twice a year by independent auditors, acceptable to the Association. The audit reports were duly submitted to IDA, at times somewhat late. They always certified that the accounts faithfully represented the financial situation of the project. Even though not required by the Credit Agreement, a technical audit and an analysis of the agency's operations were carried out in 1995 and 1996. They led to an improvement of the procedures used by the Agency. G. Overall Evaluation of the Project 31. The Project achieved and even surpassed its objectives as regards job creation, its main goal, as well as its physical targets. Therefore the project can be considered highly satisfactory. H. Future Operations 32. The good result obtained from this first TIPE project would justify following up the experience with a second project. This new project could extend the agency's activities outside Ouagadougou and Bobo Dioulasso, towards secondary cities, in the context of decentralization. I. Major Lessons 33. The lessons to be drawn from the project are important and confirm those learnt from other AGETIP projects which have been completed. The project showed: (a) that a private institution like Faso Baara is perfectly capable of executing works of public interest quickly and efficiently, without any external technical assistance. It is important to specify clearly, in advance, the procedures to be followed, to choose the right persons to implement them, and to apply them in an appropriate framework;  - 10- (b) that Faso Baara is an executing agency at the service of the Borrower. Such an agency cannot by itself compensate for the lack of a sector policy (urban development, health, education, etc.). The links between Faso Baara and the programs or sectoral projects using its services should be carefully reviewed during the preparation of the agreement delegating the project management to Faso Baara; and (c) that provision must be made for grassroots participation in the definition of sub-projects so as to ensure the sustainability. Systematic maintenance of facilities built under the project is an issue that will be addressed under the follow-up project. 34. The training program was prepared and supervised by a technical assistance team financed by GTZ. It is worth noting that the qualified contractors and consulting firms did not take sufficient advantage of the training that was proposed to them in technical areas. The courses concentrated on the procedures of the Faso Baara agency (640 participants), the management of small and medium- size enterprises (154), and worksite management (201), but there were only 44 participants for management of human resources and 126 for technical training in building construction. In practice, the contractors and consulting firms were interested above all in learning how to work with Faso Baara and their participation was closely linked to the potential number of sub-projects to be awarded. In future, it would probably be useful to define a more global strategy for the technical training of contractors and consulting firms. Consequently, the Agency should not manage the training program directly, although it should retain a key role in awarding contracts in these fields. In all, 1,344 persons were trained, representing 146 beneficiaries.  -1 1- PART II - STATISTICAL ANNEXES Table 1: Summary of Assessments A. Achievements of Substantial Partial Negligible Not Objectives Applicable Macro Policies x Sector Policies x Financial Objectives x Institutional Development x Physical Objectives x Poverty Reduction x Gender Issues x Other Social Objectives x Environmental Objectives x Public Sector Management x Private Sector x Development Other (specify) x B. Project Sustainability Likely Unlikely Uncertain Short and Medium Term x Long Term x  -12- Table 1: Summary of Assessments (continued) C.. Bank Performance Highly Satisfactory Deficient Satisfactory Identification x Preparation Assistance x Appraisal x Supervision x D. Borrower Highly Satisfactory Deficient Performance Satisfactory Preparation x Implementation x Covenant Compliance x Operation (not applicable) E. Assessment Highly Satisfactory Unsatisfactory Highly of Outcome Satisfactory Unsatisfactory x  -13- Table 2: Related Bank Loans and IDA Credits Credit or Loan Purpose Year of Status Title Approval Preceding Operation 1. First Urban Upgrading program (438 ha) and Development of 1978 Completed Project Cr. 766- 4,500 new plots in Ouagadougou and Bobo- 1985 BUR Dioulasso. 2. Second Urban Rehabilitation of Urban Infrastructure and 1989 Completed Project Cr. 2067- Institutional Strengthening. March 31, BUR 1997 Following Operations 1. Engineering Preparation of the Ouagadougou water supply 1993 Ongoing Credit for Ouaga- project from the Ziga dam: final design and dougou Water environmental impact. Supply Cr. 2519- BUR 2.Urban Improvement of Urban Living Conditions in 1995 Ongoing Environment Ouagadougou and Bobo-Djoulasso Project Cr. 2728- BUR Table 3 Project Timetable Steps in project cycle Date planned Date actual / latest estimate Identification (Executive Project Summary) Oct - 90 Preparation Appraisal Feb. - 91 Mar. - 91 Negotiations Jul. - 91 May - 91 Board Presentation Aug. - 91 27 June 91 Signing 05 July 91 Effectiveness Oct - 91 31 Dec. 91 Midterm Review n.a. n.a. Project Completion 31 Dec. 94 30 - Jun. - 96 Credit Closing 30 - Jun. - 95 30 - Jun - 96  -14- Table 4: Loan Disbursements: Cumulative Estimated and Actual (US$ million) Fiscal Year Appraisal Estimate Actual Actual in % of Profile for Urban Appraisal Projects in Africa FY92 Sept. 30, 1991 0.0 0.00 0.00 0.00 Dec. 31, 1991 0.0 0.00 0.00 0.00 March 31, 1992 3.0 2.63 87.70 0.60 June 30, 1992 6.0 1 4.18 69.72 1.20 FY93 Sept. 30, 1992 7.8 6.55 83.94 1.60 Dec. 31, 1992 9.5 8.88 93.49 2.00 March 31, 1993 11.3 10.46 92.56 2.40 June 30, 1993 13.0 13.27 102.08 2.80 FY 94 Sept. 30, 1993 14.8 14.74 99.61 3.60 Dec.31, 1993 16.5 17.13 103.85 4.40 March 31, 1994 18.3 17.52 95.73 5.20 June 30, 1994 20.0 17.52 87.60 6.00 FY 95 Sept. 30, 1994 20.0 17.77 88.84 6.80 Dec. 31, 1994 20.0 17.77 88.84 7.60 March 31, 1995 20.0 17.77 88.84 8.40 June 30, 1995 20.0 17.77 88.84 9.20 FY 96 Sept. 30, 1995 20.0 18.41 92.06 10.00 Dec. 31, 1995 20.0 18.61 93.05 10.80 March 31, 1996 20.0 18.75 93.73 12.00 June 30, 1996 20.0 10.35 101.74 13.20 FY 97 Sept. 30, 1996 20.00 21.24 106.20 Date of final Disbursement: August 15, 1996  -15- Table 5: Key indicators for Project Implementation 1. Appraisal Indicators Estimated Actual Difference Number of delegated contract management agreements 135 88 -47 Number of contracts signed 270 314 44 Number of contracts completed 270 306 36 Percentage of contracts respecting schedule 88 58.82 -29.18 Percentage of contracts respecting cost 88 83.1 -4.9 Cummulative number of jobs created 1992 3.900 9.467 5,567 i993 7.800 15.406 7.606 1994 11,700 16n010 4.310 1995 16.27- 1996 19,680 1 11. Other Indicators Cumulative number of person/day and average job duration in days 1992 350,627 37.00 1993 681,365 44.20 1994 713.332 44.60 1995 720,804 44.29 1996 929,944 47.25 Number of subprojects 296 Number of qualified contractors 523 Number of bids received 2191 Number of contractors having had contracts 175 Contractors having received training 122 Number of qualified consulting firms 55 Number of consulting firms having had contracts 53 Rate of contract management 7.41% Consulting firms having received training _ 25 1 Table 6: Key indicators for Project Operation Not Applicable  -16- Table 7: Studies Included in Project Study Objective Status Impact of Study 1. Study of procurement procedures To propose more efficient Completed Important decisions taken to identify bottlenecks and design procedures for public procurement and decree signed on system improvements 03/07/96. 2. Training program for staff of To improve capacities of staff of Completed Important improvements beneficiaries and local consulting beneficiaries and local consulting mainly for consulting firms. firms firms. 3. Program of grassroots To increase population's Completed Minimal impact participation in the project's involvement in maintenance of objectives urban infrastructure Table 8A : Project Costs (CFAF million) Project Components Appraisal Actual Difference Labor-intensive Works 4,137.50 4,861.15 723.65 Technical Assistance and Training 375.00 168.22 (206.78) Consulting Firms' fees 0.00 472.33 472.33 Supervision 150.00 135.58 (14.42) Procurement Study 75.00 54.75 (20.25) Training 62.50 25.26 (37.24) Participation Program 25.00 18.52 (6.48) Expenses of Faso Baara 415.00 858.40 443.40 Start up expenses of Faso Baara 215.00 245.03 30.03 | Iao.il Bascti _ _4_;_ - - -ij - 1.384.-4t Price contingencies 95.00 0.00 (95.00) 'rotal Project Cost 5,550A)O 6.839.24 1I 289.24 Works under parallel financing . National Counterpart 555.00 937.34 382.34 Other Financings _ 1.395.00 10.267.35 8.872.35 '1folal Plrogram Cost 7,500.0()0 18.043,93 IU 054.1 .S  -17- Table 8B: Credit Allocations by Category (in SDR) Category Appraisal Revised Actual Balance Estimate (01/18/95) 1. Sub-Projects: (a) Works 6,050,000 11,000,000 10,309,541.29 4,259,541 (b) Services 4,000,000 400,000 281,945.72 (3,718,054) 2. Services to Contractors Part B of Project 1,130,000 600,00 455,138.03 (674,862) 3. Operating Costs 1,250,000 1,400,000 1,415,387.74 165,388 4. Equipment 200,000 200,000 209,475.45 9,475 5. Consultant Services 940,000 635,000 486,205.60 (453,794) 6. PPF Refinancing 1,130,000 765,000 764,223.66 (365,776) 7. Non allocated 300,000 0 0.00 (300,000) 8. Special Account 1.075,042.62 1,075,043 9. PPF Special Account 3,039.89 3,040 Total 15,000,000 15,000,000 i 15,000,000 (0) Table 9: Economic Costs and Benefits There are no data available to recalculate the economic rates of return that were estimated in the SAR.  -18- Table 10: Status of Legal Covenants in Loan Agreement Section Covenant Present Fulfillment date Description of Covenant Comments Type Status Original Revised 2.01(b) 1 C continuous The Borrower shall open and maintain, in CFA francs. a special account in a commercial bank. 3.01(a)i 5 C continuous The Borrower shall cause the Executing Agency to execute the Project, in accordance with the provisions on the Convention. 3.01(b) 5 C continuous 'I'he Borrower shall enter into a Convention with the Executing Agency. 3.01(d)i 3 C continuous l'he Executing Agency is to execute. not later than December 31. 1994. a program of new sub-projects representing an aggregate cost of $2,200,000 equivalent. 3.03(a) 5 C continuous The Borrower and Association shall every six months undertake a joint review of the Project and a mid-term review. 3.04 10 C continuous 11/15/95 The Borrower shall submit an action plan regarding bottlenecks in I_____________ procurement and take appropriate steps to implement such action plan. 4.01(a) 1 C continuous The Executing Agenc shall maintain records and accounts adequate to reflect sound accounting 4.0 1(b)i I C continuous The Project shall be audited by independent auditors. 4.01(b)ii I C continuouS The Executing Agency shall furnish to the Association certified copies of its financial statement and the report of the audit Covenant types: 1 = Accounts/audits. 8 = Indigenous people. Present status: 2 = Financial performance/revenue generation 9 = Monitoring, review and reporting. from beneficiaries. I() Project implementation not covered by C = Covenant complied wkith. 3 = Flow and utilization of project funds. categories 1-9. CD = Complied with after delay. 4 = Counterpart funding. 11 = Sectoral or cross-sectoral budgetary or CP = Complied with partially. 5 = Management aspects of the project or other r- ource allocation.. NC = Not complied with. executing agency. 12 = Sectoral or cross-sectoral policy/regulatory/ 6 = Environmental covenants. institutional action. 7 = Involuntary resettlement. 13 = Other.  -19- Table 11: Compliance with Operational Manual Statements Fully complied with. Table 12: Bank Resources: Staff Inputs Stage of Project Cycle Planned Revise, Actual Weeks US$ Weeks US$ Weeks US$ Preparation to Appraisal 8.4 22.6 Appraisal 2.7 3.8 Negotiations through 7.2 19.9 Board Approval I Supervision 64.8 196.5 Completion 6.7 30.0 TOTAL n/a n/a 89.8 272.8 Table 13 : Bank Resources: Missions. Stage of Month/ Number Days in Specialized staff Performance Rating Types of Problems Project Cycle Year of Persons Field skills represented I mplemen- Develop- tation Status ment Objectives Identification 10- 3 13 [C, FA. F( In/a n/a 11/90 Appraisal 03- 3 17 I. EC. FC' n/a n/a 04/91 Supervision I 07/91 1 7 EC I I None Supervision 2 02/92 3 EC' I I None Supervision 3 08/92 1 4 EC I I None Supervision 4 10/92 3 5 EC, FA, EC 2 2 Institutional Supervision 5 01/93 3 7 EC, FA. EC 2 2 Financial Supervision 6 05/93 2 9 FA. EC 2 2 Financial Supervision 7 02/94 5 7 IE, IE, FA, EC 2 2 Financial Supervision 8 05- 2 10 IE, FA 2 2 Institutional 06/94 Supervision 9 01/95 3 4 EC, FA. II 2 2 Institutional Supervision 10 07/95 2 7 FA. IE 2 2 Institutional Supervision I1 10/95 3 12 EC, FA, IF 2 2 None Completion 04/96 3 7 IE, IE. FA 2 2 None Key to specialized staff skills TRE = Traffic Engineer MFA = Municipal Financial Analyst EC = Economist TEC = Transport Economist UFS = Urban financial Specialist IE = Infrastructure Engineer LEG = Legal YP = Young Professional FA = Financial Analyst CONS = Consultant CC = Computer Consultant STE = Senior Transport Engineer UP = Urban Planner Key to performance rating I = Problem Free 2 = Moderate Problems 3 = Major Problems 4 = Major Problems - Corrective action to be taken. Key to probkms AF = Availability of funds FP = Financial performance PP = Procurement progress CLC = Compliance with legal covenants PMP = Project management performance SP = Studies progress.    IMAGING Report No.: 16576 Type: ICR