Malawi - Malawi Infrastructure Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No.: 16382 IMPLEMENTATION COMPLETION REPORT GOVERNMENT OF MALAWI MALAWI INFRASTRUCTURE PROJECT (Credit 2069-MAI) March 18, 1997 Water, Urban and Energy 1 Eastern and Southern Africa 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 = Malawi Kwacha (MK) US$1 00 = MK 2.60 (October 1988) US$1.00 = MK 2.73 (1989) US$1.00 = MK 15.38 (March, 1996) FISCAL YEAR April I to March 31 WEIGHTS AND MEASURES I imperial gallon (1g) = 1.2 US gallons ' 4.55 liters (1) I cubic meter (m/3) = 220 Ig = 264.2 US gallons 1 liter per capita per day (lcd) = 0.2642 US gallons per capita per day I million imperial gallons per day (Igd) = 4,546 m/3/day 1 meter (m) 3.28 feet (ft) 1 millimeter (mm) 0.039 inch (in) I kilometer(Km) = 0.62 mile (mi) I square kilometer (kn) = 0.386 square mile (sq rhi) 247 acres (ac) ABBREVIATIONS AND ACRONYMS AfDB = African Development Bank BUMMAS = Buildings Maintenance Management System CBM = Community Based Management (of water supplies) DANIDA = Danish International Development Agency DCA = Development Credit Agreement DEVPOL = Statement of Development Policies and Strategies (1986/87-95/96) DRIMP = District Road Improvement and Maintenance Program DWSF = District Water Supply Fund EDF European Development Fund EIA = Environmental Impact Assessment ERR = Economic Rate of Return EU = European Union FRG = Federal Republic of Germany (later Republic of Germany) GOM = Government of Malawi GTZ = Gesellschaft fOr Technische Zusammenarbeit HDM = Highway Design Model ICR Implementation Completion Report IFMIS = Integrated Financial Management Information System JICA = Japan International Cooperation Agency KfW Kreditanstalt for Wiederaufbau MIP = Malawi Infrastnicture Project MIS = Management Information System MOWS = Ministry of Works and Supplies MJWD = Ministry of Irrigation and Water Development NWDP = National Water Development Project NTC = Northern Transport Corridor Project ODA = Overseas Development Agency PSIP = Public Sector Investment Program PVHO = Plant and Vehicle Hire Organisation ROMARP = Road Maintenance and Rehabilitation Project SAR = Staff Appraisal Report SADC = Southern Africa Development Council SATCC - Southern Africa Trade Cooperation Conference TA = Technical Assistance UK = United Kingdom UNCDF = United Nations Capital Development Fund UNDP = Untted Nations Development Program UNICEF = United Nations Children's Fund USAID = United States Agency for International Development VLOM = Village Level Operation and Maintenance (of rural water supplies) Vice President: Callisto Madavo Country Director: Barbara Kafka Task Manager: John Shepherd ICR prepared By: John Kandulu MALAWI FOR OFFICIAL USE ONLY INFRASTRUCTURE PROJECT (CREDIT 2069-MAI) IMPLEMENTATION COMPLETION REPORT CONTENTS PREFACE EVALUATIO N SUM M ARY ................................................................................................................... i A . In tro d u ctio n ....................................................................................................................................... i B. Statement/Evaluation of Project Objectives and Benefits................................................................. i C . A chievem ent of Project O bjectives................................................................................................. iii D. Summary of Findings, Future Operations, and Key Lessons Learned..............................................v E . K ey L esson s..................................................................................................................................... v i PART I: PROJECT IMPLEMENTATION ASSESSMENT ................................................................1 A . B ack gro un d ....................................................................................................................................... B. Statem ent and Evaluation of Project Objectives ...............................................................................2 C . Project B ackground ........................................................................................................................... 2 D . Project D escription ............................................................................................................................ 4 E. A chievem ent of Project O bjectives..................................................................................................5 G . Project Sustainability........................................ ............ .......................................... .................. 12 H . B ank P erfor n ance ........................................................................................................................... 14 I. B orrow er Perform ance...................................................................................................................... 15 J. Perform ance of Cofinancing A gencies............................................................................................16 K . A ssessm ent of Project O utcom e......................................................................................................16 L . E conom ic A nalysis .......................................................................................................................... 17 M . K ey L essons L earned ..................................................................................................................... 18 Part II Statistical Tables Table 1: Summary of Assessments Table 2: Related Bank Loans/Credits Table 3: Project Timetable Table 4: Credit Disbursements: Cumulative Estimated and Actual Table 5: Key Indicators for Project Implementation Table 6: Summary of Progress of Co-financed Components Table 7: Studies Included in Project Table 8: Project Financing Plan Table 9: Economic Costs and Benefits Table 10: Status of Legal Covenants Table 11: Bank Resources: Missions 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. Annexes: I Completion Mission Aide-Memoire 2 Borrower Contribution to the ICR 3 Performance on Cofinanced Components 4 Performance of AfDF/ADB Financed Components 5 Management Improvement Component: Training Sub-Component Map: IBRD 21225 MALAWI INFRASTRUCTURE PROJECT (CREDIT 2069-MAI) PREFACE 1. This is the Implementation Completion Report (ICR) for the Infrastructure Project in Malawi, for which Credit 2069-MAI in the amount of SDR22.3 million (US$28.8 million equivalent) was approved on November 7, 1989 and made effective on June 19, 1990. 2. The Credit was closed on December 31, 1995 and was fully disbursed. The final disbursement was transacted on April 30, 1996. Cofinancing was provided by various multilateral and bilateral donors as listed in Table 8, and disbursement is continuing in relation to several of these components. 3. This ICR has been prepared by M. John Kandulu, Infrastructure Program Officer, Malawi -Resident Mission (AFMMW) and reviewed by Messrs. K. John Shepherd, (Task Team Leader, AFTUl) and Jeffrey Racki (Technical Manager AFTU 1); and Ms. Barbara Kafka (Country Director: Angola, Zimbabwe, and Malawi). The Borrower provided comments which have been incorporated in the report. 4. Preparations for this ICR were initiated during the Bank's final supervision mission that took place from July 24 to August 6, 1995 and whose Aide Memoire is annexed to this report. The contents of this report are based on material in the project file. MALAWI INFRASTRUCTURE PROJECT (Credit 2069-MAI) EVALUATION SUMMARY A. Introduction 1. Donor support for the Malawi Infrastructure Project (MIP) was aimed, in the transport sector, at improving the condition of trunk and rural roads in Malawi in order to reduce transport and user costs, enhance the reliability of transport outside and within the country, and prevent the progressive deterioration of roads caused by lack of timely maintenance. In the water sector, the project aimed at augmenting urban and rural water supplies to cater for a growing demand for potable water in urban centers, increasing access to safe water by rural communities, and strengthening the capacity of the Water Department to manage national water resources and water supply services in a sustainable manner. In public buildings, the project aimed at rehabilitating selected public buildings to improve their utility and extend their useful lives. The MIP was cofinanced with other bilateral and multilateral aid donors as listed in Table 8. B. Statement/Evaluation of Project Objectives and Benefits 2. The objectives of the MIP at appraisal stage were to: i) strengthen the management capability of the Ministry of Works and Supplies (MOWS) through technical assistance and training to effectively manage public infrastructure facilities; ii) restore and improve the physical condition of selected main and secondary roads to facilitate the movement of traffic and lower transport costs; iii) expand the existing system of district roads to provide improved access for increasing numbers of rural people; iv) expand potable water supply coverage in selected urban and rural areas; and v) rehabilitate high priority government hospitals, schools and other important public buildings to extend their useful lives, and improve the provision of public services. 3. The original project objectives were clear, realistic and directed at responding to the country's long-term infrastructure needs, but the size and extent of the project were, in hindsight, too ambitious, especially in view of the human and financial capacity limitations of the implementing Ministry in particular, and the Government in general. 4. The objectives were restructured during the project's Mid-Term Review (MTR) in response to the country's immediate needs, primarily caused by a four-year drought that adversely affected almost all sectors of the economy - agriculture, water, health, and education being the worst hit. In addition to assessing overall progress in component implementation, the review also re-prioritized project elements and reallocated resources to more important areas, primarily the provision of safe water and improvement of additional rural roads for the conveyance of relief items such as food and medicines, to communities affected by the drought. Secondly, IDA financing was re-aligned to cover priority areas left by other co-financiers who withdrew their support in reaction to concerns about governance. Projects such as Zomba Urban Supply including Zomba Dam (KfW, DANIDA, JICA); Supply of Road Maintenance Equipment and Vehicles Phase IV (JICA); and Technical Assistance and Training for MOWS Personnel (ODA and UNDP) are cases in point. 5. Major outputs expected from the MIP before the Mid-Term Review included: MOWS Management Improvement * an increased capacity of the Ministry of Works and Supplies to manage its program efficiently; Roads * about 270 km of paved roads rehabilitated and strengthened, about 300 km of earth and gravel roads rehabilitated; about 115 km of earth and gravel roads improved to bitumen standard; and about 200 km of paved roads resealed; * extension of the District Road Improvement and Maintenance Program (DRIMP) rural road network to three districts, about 500 km of additional roads in other districts, execution of spot improvements on previously developed DRIMP roads, and support to DRIMP road maintenance through the provision of equipment, tools and a budget; * 9 road maintenance depots constructed and furnished, and capacities of selected existing depots expanded; * a national road safety program developed and implemented; Water Supply * Seven urban water supply schemes improved for an extended coverage; * 2,500 boreholes rehabilitated, and beneficiary communities trained in the Community Based Management (CBM) of rural water supplies; * 13 gravity-fed piped water schemes constructed in selected rural areas; Public Buildings * 19 selected schools, hospitals, and other public buildings rehabilitated; and * Lilongwe and Zomba Training Centers expanded and improved. 6. Changes made to the project during the Mid-Term Review include: amendments to the Development Credit Agreement (DCA) to support the MOWS road maintenance budget on a declining basis over a three-year - 111 - period commencing fiscal 1993/94, as a result of government's failure to meet its Covenant with the IDA (See also Paragraph 21 in the main report). The allocations would be pro rata to the Ministry's total expenditure on road maintenance, distributed as 30, 25 and 15% respectively for each of the three years; * establishment of a Road Maintenance Initiative (RMI) Unit to facilitate the creation of a Road (Maintenance) Fund, and a Roads Board to manage the Fund. The Fund would augment government's allocation to the MOWS recurrent budget for road maintenance. In addition, the Ministry requested financing for a comprehensive investigation of the extent of over-loading on the primary road network to determine the likely effect of upgrading the axle load limit from 8.2 to 10.0 tonnes per vehicle axle. This would assist government to prioritize future investments in the network; * IDA agreed to finance a detailed engineering design, an EIA, and later construction of Zomba Dam and associated works for Zomba Urban Water Supply after KfW and DANIDA withdrew support; * improvement of the existing source for Ntcheu Urban Water Supply would proceed only as far as detail engineering design as the supply to the town had meanwhile been augmented from two high-yielding boreholes as an interim emergency intervention. Additional work requested by government during the MTR however was identification of a more reliable alternative source for Ntcheu, and a preliminary EIA for the selected site. Savings from this component were used to finance the drilling of 72 drought relief boreholes; purchase of a drilling rig; water quality testing equipment for the Central Water Laboratory, and supervision vehicles for the Water Department for drought mitigation; * institutional capacity building for the Ministry of Works was extended to cover support for the training of Architecture, Engineering, and Quantity Surveying students in British Universities, previously under ODA funding, as a result of the withdrawal of British support for the project; and * allocation of approximately US$570,000 for the engagement of Technical Assistance to coordinate the work of various Consultants, and to finance minor physical works related to the Northern Transport Corridor (NTC) Project (Credit 1879-MAI) such as fire fighting equipment and facilities; modifications to fuel pumping equipment; improvements to drainage and structures. An additional effort in this component was extension of the Credit to finance a study to privatize Lake Malawi Transport and Port Services, as part of the restructuring of the Malawi Railways, of which it was a sister concern. C. Achievement of Project Objectives 7. The IDA component of the MIP achieved some of its objectives, namely: increasing the capacity of the Ministry of Works and Supplies to manage its program - iv - annually; extending the DRIMP roads program in additional districts (100%) and improving existing roads in others (100%); expanding safe water coverage to selected urban schemes and rural communities through improved urban schemes (100%) and rural boreholes (98%). However, it fell short of achieving its targets in the construction of new DRIMP roads (39%); construction of road maintenance depots and supervisors' houses (25%); training of communities in CBM (31%); and the rehabilitation of public buildings (35%) (Table 5). Significant project cost escalation after project appraisal due to inflation and currency floatation, withdrawal of fiscal support by major aid donors, and the effects of a prolonged drought all adversely affected the achievement of project objectives. The overall performance of major components of the MIP is summarized in Table 1. Project Sustainability 8. The extent to which the facilities improved in the project are sustained depends on the commitment of the Government of Malawi (GOM) to the sector, and its ability to meet recurrent expenditures adequately. So far this does not seem to be the case as the road network and water services continue to deteriorate at an alarming rate, with some main roads becoming impassable and bridges collapsing due to lack of maintenance. This situation is likely to be reversed if Government implements the Road Maintenance Initiative (RMI) currently under preparation with financial support from the Bank and the European Union (EU). Secondly, the impressive number of experienced senior management and professional staff successfully trained using proceeds of this Credit is likely to drop significantly as more and more are being transferred to other GOM agencies, moving to the private sector and Non-Government Organizations (NGOs), or dying. (Annex 5) 9. Rural water supply services were generally not implemented in a manner likely to result in sustainable infrastructure. Over 2,500 boreholes were rehabilitated, but several hundred of the communities served by these boreholes were not given adequate training in operation and maintenance. More sustainable arrangements will be established with the implementation of the National Water Development Project (NWDP) that was declared effective on May 1, 1996, and the Bank/UNICEF promoted a collaborative approach to the sustainability of rural water services. However, sustainability as implemented under the MIP is considered to be unsatisfactory. 10. Significant improvements made under the project to a few selected public buildings would have been sustained through the MIP-financed Building Maintenance Management System (BUMMAS) installed in the Buildings Department of MOWS for the timely maintenance of the government building stock. Regrettably, this is an area that continues to receive little attention and commitment from GOM, with preference going to new construction rather than the up-keep of existing stock. Sustainability of public buildings is therefore highly unlikely unless the government's attitude towards the maintenance of its buildings changes radically, especially with regard to decentralizing the maintenance of buildings to sector ministries. The Ministry of Works would then assume advisory and oversight roles with respect to construction and major rehabilitation activities only, as is already happening now post-MIP. The project failed to recognize this aspect and was prepared on the basis of the status quo with unsatisfactory results. Environmental Impact 11. The Project Staff Appraisal Report predicted beneficial effects on the environment as a result of implementing the project. Construction of new DRIMP roads, and rehabilitation of existing earth roads has had beneficial effects of checking soil erosion in adjacent land, as was originally predicted, through the channelization of stormwater into engineered drainage structures. Improved road pavements have increased access to some parts of the country during the wet season, and reduced damage to vehicles. Abandonment of the first dam site for Zomba Urban Water Supply has ensured the conservation of the unique ecosystem around the marsh on Zomba Plateau. Siting of the new dam at the site of the existing dam is expected to have no significant adverse environmental impacts, and will offer a larger body of water not only for water supplies but also for sport fishing, camping, and other recreation. In rural areas, rehabilitation of boreholes has afforded safe water to a large number of rural people with accompanying positive health consequences. It has also significantly reduced the distance that families have to'walk to sources of safe water especially during periods of drought, thus freeing up valuable time for other more productive socio-economic activities. D. Summary of Findings, Future Operations, and Key Lessons Learned 12. GOM continued to face difficulties meeting budgetary requirements for adequate road maintenance, and failed to take full advantage of IDA's commitment to reimburse, on a declining scale up to December 31,1995, a proportion of its expenditure on road maintenance. The ability of MOWS to effectively implement road development projects and manage a sustainable national road network was compromised as a result. Secondly, withdrawal of donor commitment for some components early in the project, continued use of an inefficient force account on capital works, and the inability of national small- scale contractors to satisfy contract obligations, all had negative impact on project implementation. 13. MOWS has, through the project, installed Management Information Systems to facilitate program planning, implementation, monitoring, and management decision- making. The degree to which these systems continue to function will depend to a large extent on the ability of the concerned Ministries to retain staff trained in these areas, and to care for and protect the expensive investments made in computer hard- and software installations. So far this does not seem to be the case, as some equipment is reported to be unserviceable or stolen, and six specially trained senior staff have since left MOWS. - vi - Economic Analysis 15. Table 9 is a comparison of the Economic Rates of Return at project appraisal in June 1988 for first year components, and for IDA components at the time of preparing this ICR (August 1996). ERRs at project closure are well above those projected at appraisal. The reasons for this are: (i) for public buildings: benefits accrued from the cost of reconstruction avoided, and associated savings from annual maintenance costs, and for hospitals, increased utilization of the improved facilities; (ii) for roads: increased utilization for the conveyance of relief items to drought areas, increased agricultural production in the 1994/95 growing season, and traffic diverted from the poorly maintained primary and secondary road system; (iii) for rural water supply: increased number of households per borehole, and reduced maintenance costs; and (iv) for urban water supply: additional water sales due to system rehabilitation reducing water losses, enabling additional demand to be met by the project. E. Key Lessons 17. The MIP offers useful lessons for future operations in the infrastructure sector. The following are some of the more important:: a) Project cost estimates made during project appraisal should be monitored closely in the period leading to project implementation. b) The ability of government both to provide counterpart funds, and to match recurrent expenditures with the rate of infrastructure development should be assessed and confirmed at the appraisal stage, and reassessed annually. Levels of investment in development projects should be set and reset accordingly. c) Frequent supervision missions with an appropriate skills mix should have been undertaken throughout the life of the project, especially given the complexity of the project and the high turnover of both Borrower and Donor staff. d) This multi-sectoral project, funded by many donors, was too complex and difficult for the Borrower to satisfy each donor's requirements, to meet budgetary requirements, and to put together the skills and specialities to implement the project satisfactorily. The Bank's supervision budgets tends to be allocated by project rather than by program, and the fact that MIP was in fact three sector projects rolled into one large program resulted in project supervision being under resourced. e) Different elements of the same component co-financed by a number of aid agencies, posed special challenges especially when agencies withdraw their support for the project. Future projects should be so designed as to avoid such complex and interdependent arrangements. - vii - f) The project's problems underscore the importance of developing sector projects from a clear institutional and policy framework. The Government has responded to this need by developing sector policies and strategies in water, transport and environment. g) The experience of this project reinforces the argument for increased participation of stakeholders and beneficiaries in the development of projects, particularly the participation of the private sector and beneficiary communities in provision and maintenance of infrastructure. This also ensures transparency and accountability in the use of public resources by government. MALAWI INFRASTRUCTURE PROJECT (Credit 2069-MAI) PART I: PROJECT IMPLEMENTATION ASSESSMENT A. Background 1. Malawi is a long, narrow, land-locked country situated in the Great African Rift Valley with a land area of about 94,300 km2 and a freshwater lake area of 24,200 km . (See IBRD Map No. 21225) The country is characterized by a limited resource base, poorly developed social and physical infrastructure, and low per capita incomes particularly for rural smallholders who constitute 90 percent of the population currently estimated just under 11.0 million. Malawi has one of the highest population densities per km2 of arable land in Africa, and agriculture contributes over 90% of the country's exports. Rural development is a primary economic and social objective that inevitably requires improvement of road access to markets, public health facilities and other services for the rural population. It also entails ensuring convenient sources of safe and easily accessible water supplies to rural communities. 2. Responsibility for the provision and maintenance of road infrastructure, water, and public buildings was during implementation vested in the Ministry of Works and Supplies (MOWS). (The subsequently formed Ministry of Irrigation and Water Development (MIWD) now has responsibility for the provision of district (town) water supplies.) The Malawi Infrastructure Project (MIP) was a five-year multi-discipline and multi-donor financed project whose primary objective was to strengthen the capability of the MOWS to manage the country's infrastructure, benefits of which would be realized within the context of the road, water and public buildings components of the infrastructure sector. Severe funding and expenditure constraints that faced, and continue to face, the Government of Malawi (GOM) underscore the importance of maintaining the existing infrastructure, and of maximizing benefits through an efficient and effective program management system. 3. At the time of project appraisal, a total of 11 international bilateral and multilateral aid donors had committed themselves to finance various parts of the project. The Government of Malawi contributed approximately 10% of the total project cost of about US$157.7 million. The IDA Credit amounted to SDR22.3 million (US$28.8 million equivalent). The project became effective on June 19, 1990, and was closed on December 31, 1995. -2- B. Statement and Evaluation of Project Objectives 4. The objectives of the MIP were to: i) strengthen the management capacity of the Ministry of Works and Supplies through technical assistance and training in order to effectively carry out the construction and maintenance of public facilities; ii) restore and improve the physical condition of selected main and secondary roads to facilitate the movement of traffic and lower transport costs; iii) expand the existing system of district roads to provide improved access for more rural people; iv) expand potable water supplies for selected urban schemes and rural water supplies; and v) rehabilitate selected high priority government hospitals, schools and other important public buildings so that they contribute more efficiently and effectively to the provision of public services and extend their useful lives. 5. These objectives were clear and consonant with the Government's Statement of Development Policies and Strategies (DEVPOL) for the 1986/87-95/96 planning horizon; as well as the Bank's assistance strategy for Malawi at the time. Government's sector development strategies emphasized improvement of existing infrastructure, and extension of coverage to rural communities to facilitate movement to socio-economic centers, and enhance the health and welfare of the rural poor. It is worth noting however that these objectives assumed a continuation of the national status quo characterized by a stable political situation, and a sound economic environment which, in turn, meant sufficient financial resources to cover project local costs, as well as guarantee adequate allocations on the recurrent budget to ensure the sustainability of the facilities once improved. The modal structure of the project lent itself to easy re-prioritization of components during project implementation in response to national dynamics. This assisted the Government to reallocate unspent project funds to more needy areas during a period of protracted drought when government efforts were concentrated on minimizing the severe effects of the drought. C. Project Background 6. A 1987 management study of MOWS established that the Ministry's management could and should be improved substantially, and included an action plan for achieving that objective. Specifically, the study recommended an improved direction setting for the Ministry, better management control, a better functioning organization, development of human resources, and allocation of adequate financial and material resources to carry through planned programs. A Management Improvement Component (MIC) largely comprising Technical Assistance, installation of management information systems, and staff training was therefore incorporated into the project to implement recommendations of the study. 7. Since independence in 1964, Malawi took strides to establish a sustainable infrastructure through ambitious externally financed projects including the World Bank Group's highly successful First Highway (Cr. 112-MAI), Second Highway (Cr. 523- MAI), Third Highway (Cr. 758-MAI), Fourth Highway (Cr. 1099-MAI), Fifth Highway -3- (Credits 2363-MAI, 1423-MAI, and SF-6-MAI) Projects; and the Northern Transport Corridor Project (Cr 1879-MAI). (Credits 2363-MAI and 1879-MAI were cofinanced by the African Development Bank (AfDB) and the European Development Fund (EDF) respectively.) The road rehabilitation and resealing components of MIP were a continuation of work initiated under the Fifth Highway Project, and the extension of the DRIMP component to the three remaining districts was also carried over from the Fifth Highway Project. All the previous projects cited above were aimed at expanding the national road network but did not provide adequately for the development of a capacity in GOM to manage the investments sustainably. The MIP, on the other hand, provided for technical assistance to the Roads Department to develop its capacity to plan, construct, and maintain the national network adequately and sustainably. 8. In the water sector, the Government of Malawi has since independence undertaken several projects with foreign aid financing to improve the supply of water and water services to both urban and rural populations. The Bank Group has financed three water supply projects in Malawi, namely: * the Blantyre Water Supply Project (Credit 711-MAI, 1977, US$7.0 million) to augment water supply to the City of Blantyre, and strengthen Blantyre Water Board's management and technical capabilities; * Lilongwe Water Supply Engineering Project (Credit 1272-MAI, 1982, SDR 3.6 million) to assist GOM and the Lilongwe Water Board formulate a long range water supply, sewerage and sanitation program, prepare studies for water supply extension, strengthen the Board through improvements in management and training, and help GOM develop low-cost technologies for handling sewerage and sanitation; and * the Second Lilongwe Water Supply Project (Credit 1742-MAI, 1986, US$ 20.0 million) aimed principally at augmenting the water supply of Lilongwe through the construction of a dam/reservoir and to expand Lilongwe's water supply system to cater for an increased demand. Government's long-term target is for families to have access to safe water within 500 m of each household. The urban water supply component of MIP was aimed at expanding the capacity of seven urban water systems and enabling them to cater for a growing demand for potable water. Rehabilitation of rural boreholes and construction of new ones sought to improve water supplies to a large number of rural people throughout the country, and helped reduce the time spent by families walking long distances to fetch water, especially in times of drought and in normal dry seasons. 9. Rehabilitation of selected public buildings was intended to improve their utility and extend their useful lives. Except for minor emergency repairs, most of the targeted buildings had not received adequate routine or periodic maintenance since construction. Thus their renewal was also meant to demonstrate the substantial savings that can be -4- gained from timely attention. It was also envisioned that long-term benefits would accrue from the development of an on-going maintenance program that would obviate the need for premature major rehabilitation or replacement investments. D. Project Description 10. The Project provided financial assistance to the Government of Malawi to implement a set of activities identified by the MOWS for management improvement and training as well as maintenance, rehabilitation and construction works in the roads, water, and public building sub-sectors over a five-year period commencing in fiscal 1989/90. The IDA Credit funded components of the project as described in Paragraph 11 below. The rest were cofinanced by ten (10) other multilateral and bilateral donors as described in Section J and Annex 3. 11. IDA Credit Components comprised: (a) MOWS Management Improvement: Implementation of a management improvement program for MOWS through Technical Assistance, and consultant studies for the identification, installation and institutionalization of Management Information Systems and training; (b) Roads: (i) DRIMP Phase IV: Extension of DRIMP to five Districts carried forward from the Fifth Highway Project (Mwanza, Blantyre and Chiradzulu); rehabilitation of about 500km of additional roads in other districts; spot improvements on 350 km of existing DRIMP roads; and maintenance support. The first phase of DRIMP began in 1979 under the Second Highway Project and continued under subsequent highway projects; (ii) Road Maintenance Depots: Maintenance depots and residential houses for roads supervisory personnel would be constructed or improved to support road maintenance activities; and (iii) Technical Assistance and Training for personnel of the Roads Department for a total of 298 person-months in road planning, design and construction specifically in the rural roads division and in the soils and materials branch; for an urban roads study, and for PVHO; (c) Water: (i) Urban Water Supply: augmentation of water supply systems at Mponela, Mangochi, Ntcheu, Zomba, and Karonga through the expansion of existing schemes and construction of new intake systems, treatment facilities, storage tanks, trunk mains and distribution networks. Further, a complete re- valuation of all assets belonging to schemes in the District Water Supply Fund (DWSF) would be undertaken in order to update the Fund's asset register, and to facilitate such future valuations; (ii) Rehabilitation of Boreholes: 500 boreholes out of a total planned 2500 were to be financed from IDA proceeds and the remainder by the UNCDF. Integrated into the rehabilitation program was the Village Level Operation and Maintenance (VLOM) system which places responsibility for the sustainability of rural water supply services under user communities; and -5- (d) Public Buildings: The Buildings Department of the MOWS, with the assistance of Consultants, carried out an inspection of buildings from its inventory and selected a total of 21 public hospitals, schools, colleges and other buildings for rehabilitation and improvement under the project. 12. Although all the components were identified by the Ministry of Works and Supplies during the project identification and preparation phases, some components were transferred for execution by other Ministries notably the African Development Fund (AfDF) funded Road Safety component (Ministry of Transport and Civil Aviation), the IDA-funded Urban Roads Study (Ministry of Local Government), and the UNDP supported Pilot Integrated Rural Transport component (Ministry of Transport and Civil Aviation). 13. MOWS has, through the project, installed Management Information Systems to facilitate program planning, implementation, monitoring, and the management decision-. making process. Computer-based programs such as the Integrated Financial Management Information System (IFMIS), the Logical Framework, Water Billing Systems, Fleet Management Information System and Billing Systems for the Plant and Vehicle Hire Organization (PVHO), an enhanced Highway Design Model III (HDM III) for road planning, the Weigh-in-Motion traffic management model and the Buildings Maintenance Management System (BUMMAS) for public buildings are all in use in MOWS and the Ministry of Irrigation and Water Development, as appropriate. 14. The MIP supported a number of ready-for-implementation studies in relation to water supply services and water resources management including the development of the National Water Resources Management Policy and Strategies. . It also set up and equipped the Road Maintenance Initiative (RMI) Project Unit within the Ministry of Works and Supplies, and supported a study to rationalize (later restructure and commercialize) the Lake Malawi Transport Services and Port Facilities. E. Achievement of Project Objectives 15. Implementation of the MIP was dogged with delays which, among other problems as will become apparent later, made it difficult for the project to achieved its objectives fully, particularly in: i) the construction of new District Roads (39% achievement); ii) construction of road maintenance depots and staff housing (25%); iii) training of communities in Community Based Maintenance of rural water facilities (31%); and iv) in the rehabilitation of public buildings (35%). (See Table 5 and Annex 3) These delays were largely attributed to: i) cost escalation as a result of time lapse between preparation of project estimates in 1988 and declaration of credit effectiveness in June 1990; ii) inadequate annual allocations to MOWS in Part I Public Sector Investment Program (PSIP) development budget; iii) lack of counterpart funding from GOM for Part II of the PSIP; and iv) GOM's inability to satisfy those covenants of the credit that impinged on the rate at which the credit was disbursed. -6- 16. Above all, the assumptions mentioned in Paragraph 5. above changed during implementation as donor sanctions to accelerate political change, withdrawal of co- financing agencies from the project, and a protracted drought, caused a reduction in available resources and budget cuts. Further, a culture of total risk aversion developed in the civil service due to the severity of the former regime stifling initiatives, causing a considerable out-flux of managerial level staff, and a general drop in productivity in the public labor force. 17. At the time of the Mid-Term Review (MTR), it had become necessary to rescope the project to respond to a prevailing adverse social, political, and economic environment in the country caused mainly by: i) a prolonged drought in the region; ii) influx of over one million refugees fleeing the civil war in Mozambique after the project had already been appraised; iii) withdrawal of ODA support for Technical Assistance and funding for overseas students in the UK, many of whom were MOWS Architects; and iv) extra resources required for Technical Assistance (TA) to complete remaining works on the Northern Transport Corridor Project (NTC, Credit 1879-MAI) when it became apparent that its resources were becoming insufficient to achieve the desired results. Consequently, more emphasis was placed on the provision of potable water, access roads for haulage of relief items, and the improvement of hospitals in drought and refugee concentration areas than may have at first been envisioned. Secondly, a way had to be found to support the Ministry of Works' efforts in road maintenance as a result of GOM's failure to allocate sufficient funds in the road maintenance budget. The Road Maintenance Initiative (RMI) concept was thus introduced in Malawi in 1994 to facilitate the creation of a Road Fund to be financed from a fuel levy and road user charges and fines. The Bank was already introducing this concept elsewhere in the region with measurable success, and it was therefore seen as a sustainable way of financing road maintenance in Malawi. 18. Management Improvements and Capacity Development Component (MIC): The Ministry of Works and Supplies was, for the duration of this project, responsible for the national road network, water supplies (except for Blantyre and Lilongwe), and plant and vehicle fleet management. The objective of the MIP was thus to strengthen the management of the Ministry to better manage its large multi-sectoral program. This need was clearly brought out in a report by De Luew Cather International Ltd. in association with Price Waterhouse titled " A Blue Print for Management Improvement: Preparing the Ministry of Works and Supplies to Meet the Challenges ofMalawi's Future" (January, 1988). The Management Improvement Component of MIP was therefore modeled on the recommendations of this report and included work in the areas of * Management Information Systems; * Financial Management Technical Assistance; * Plant and Vehicle Hire Organization (PVHO) Technical Assistance; * Executive Technical Assistance; and * Training of MOWS Management in program delivery. -7- 19. Implementation of this component has been satisfactory with the exception of the PVHO Technical Assistance which was terminated due to non-performance of the individual procured under this sub-component, and the Buildings Maintenance Management System which was not fully realized due to complex parameters in the building stock, and lack of model systems in this field. However, other information systems installed in the Ministry's key functional areas such as the Integrated Financial Management Information System (IFMIS), the Water Billing System for the District Water Supply Fund, and the Logical Framework for Ministry-wide program planning and evaluation are all in active use in the Ministry. 20. Several MOWS officers received training that ranged from in-country short courses and workshops to undergraduate and postgraduate Degrees overseas in relevant fields. (Annex 5) Out of 31 officers who received scholarships for postgraduate studies, 28 (90%) have completed their studies and are back in the country; 19 (6 1%) are in relevant positions in the Ministry of Works and Supplies; 4 (13%) are in various positions within GOM or in GOM/IDA-funded Project Implementation Units (PIUs); 5 (16%) are still studying; and 4 (13%) have joined the private sector or Non-Government Organizations (NGO). A total of 32 officers received sponsorships to attend various short courses within and outside the country in their fields of expertise. Of these, 25 are still serving in MOWS or the Water Department - a 78% rate of retention. The rest (22%) have since left the Ministry either on posting within GOM, moved to international donor agencies and regional development organizations, or are deceased. The overall retention rate in the Ministry of Works and Supplies at the time of preparing this report for the short- and long-term training and staff development effort, including those still at school, was 80% (48 out of 60 officers). This is considered to be a satisfactory achievement, especially in the face of a severe shortage of skills in the country and the resulting scramble for experts on the market. 21. Two additional efforts in this area were: i) retention of the services of the Controller of Buildings, previously financed by ODA, under this component until the post was localized in July 1995; and ii) engagement of Chief Architect TA to provide support and training for young Architects until December 1995. At the time of the SAR in 1989, there were 27 expatriates in the Ministry of Works. All these posts are now occupied by local staff as a result of an aggressive staff development program and an accelerated localization program under the MIC component. 22. Roads: Successes achieved in previous DRIMP projects were replicated in DRIMP Phase IV, with the extension to the five districts carried over from the Fifth Highway Project and spot improvements in 17 districts completed successfully. Five hundred (500) kilometers of new district roads were planned to be constructed to DRIMP standard in this project using small-scale Malawian national contractors wherever these were considered cost effective, and as part of government's deliberate policy of development of national contractors. However construction of new roads in 21 districts was delayed inordinately partly on account of lack of adequate local counterpart funds and partly due to technical problems associated with the use of national contractors, -8- principal among which was the contractors' inability to secure Performance Bonds and working capital. The Ministry made attempts to intensify implementation of the works towards the end of the project in order to achieve the planned target. However, at the end of the project only 195 km of track were improved to district road standard in 19 of the 21 districts. 23. Construction of Road Maintenance Depots: This component was dropped during the MTR process and had its resources re-allocated to higher priority areas such as the rehabilitation of rural roads and construction of rural boreholes. Work to construct new road maintenance depots commenced early in the project but was suspended when it became clear that GOM counterpart funding was not forthcoming and the component assumed a lower priority. As a result, only 8 maintenance depots and 7 residential houses for Road Supervisors and Road Foremen were constructed to completion out of planned 30 depots and 37 residential houses. 24. Road Maintenance Support: It was established during project implementation that GOM allocations for road maintenance continued to decline over time, with the allocation for 1995/96 projected to be under 40% of the Ministry's requirements. These levels contravened Section 4.03 of the Development Credit Agreement (DCA). GOM therefore sought agreement from the Bank to provide recurrent cost support on a declining basis in line with its support for DRIMP roads. The DCA was amended such that the Association would finance 30% of maintenance expenditure in 1993/94, 25% in 1994/95, and 15% in 1995/96 to provide an adequate and desirable level of service that protected the nation's road network without storing-up additional longer term rehabilitation costs. By December 1995, IDA had reimbursed GOM a total of MK7.111 million for 1993/94 representing 30% of its expenditure on road maintenance, and MK6.06 million for 1994/95. The Accountant General has since claimed MK3.0 million, being 15% of the total expenditure on road maintenance to December 1995 of fiscal 1995/96. 25. The Labour-intensive Mobile Pavement Repair Team (MPRT): In order to maximize the application of the allocations as amended in the DCA, the Bank developed and proposed to GOM, during the project's mid-term review, a labor based "Mobile Pavement Repair Team" road maintenance approach using appropriate technologies. The method was "workshopped" with MOWS maintenance personnel to further develop the approach, and a pilot was run in the Central Region of the country to test it. It was confirmed at the workshop and on the pilot that the method had a lot to offer to the sustainability of the road network in Malawi. The MOWS extended the MPRT throughout the country using additional plant and equipment purchased from funds reallocated within MIP. 26. Towards the end of the project (between September and December 1995) the Project supported the purchase of road maintenance plant and equipment consisting of 20 motor cycles for supervisory staff, 2 tipper trucks, 3 farm tractors with trailers, 4 motor -9- graders, 5 pick-up trucks (1-ton capacity), and bulk bitumen all at a total cost of SDR983,000. These had all been delivered and put to use by project closure. 27. Road Maintenance Initiative (RMI) and the Integrated Road Development Program (IRDP): Having appreciated the need to develop and establish a long-term and sustainable road maintenance system in close collaboration with others in the region, GOM has initiated the RMI and IRDP by employing a Road Maintenance Initiative Coordinator initially funded from MIP and, effective January 1, 1996, by the European Union (EU). The RMI Coordinator would, among other things, coordinate the development and passing of Legislation establishing a Road Maintenance Fund, and formation of a Road Board to oversee the utilization of the fund. Legislation has been drafted and passing of a Bill by Parliament is expected within the 1997 calendar year. Substantial outputs from the RMI Coordinator in accordance with his TOR will form the basis of the Bank's Road Maintenance and Rehabilitation Project (ROMARP) presently being identified, as a follow-on to MIP. 28. Axle Load Study: Six main road sections on major inter-regional links were investigated to determine the extent of axle loading on Malawi's primary network and the likely effect of increasing the legal axle load limit from 8.2 tonnes to 10.0 tonnes to match the standard loading in the SATCC region. This was also in response to the increasing traffic loading on the national network which far exceeds levels that were predicted during the design phase of many of the country's major roads. Results of the study showed that increasing the legal axle load from 8.2 to 10.0 tonnes per axle would not greatly increase the current adverse effect on the condition of most of the roads investigated as most of them have deep, well designed pavements which are less sensitive to increases in axle loading. 29. Water: Of the four urban water supply systems planned for augmentation under IDA financing, only two, namely Mangochi and Karonga, were fully implemented. Augmentation works for Mangochi Urban Water Supply involved new intake works on Shire River, 2No. pressure filters with a capacity of 66m /hr each, construction of 1.01km pumping main, 2 - concrete ground level storage tanks, each 400m3 capacity, and various distribution lines. Karonga Urban Water Supply works comprised 3 - river intake wells and a collector well, 1.8km of raw water main, 1 - sedimentation tank (60m 3/hr filter capacity) and associated treatment equipment, a 536m3 storage tank, and 13.7km of distribution line. Current coverage for Karonga Water Supply is just over 16,000 out of a total urban population of 20,000 (or 80%), while that for Mangochi is 18,000 out of a total population of 27,580 (or 65%). The shortfall in coverage is expected to be catered for through the implementation of water supply augmentation works under the National Water Development Project (NWDP) by the newly formed Regional Water Boards. 30. Ntcheu, Zomba and Mponela Urban Water Supply Schemes: Because of delays in awarding a contract to the Consultant for Ntcheu Water Supply, and the speed with which the Consultant proceeded, work only progressed as far as completion of detailed engineering studies, preparation of tender documents, and identification of new -10- and more dependable sources of water for the town including a preliminary EIA for the selected alternative. Due to insufficient time available to project closure, construction was postponed and will now be carried out under the New Water Supply component of the NWDP. It was further agreed with the IDA that funds originally earmarked for construction works be utilized for the construction of 206 drought relief boreholes throughout the country. Two high yielding boreholes (7 cumecs each) prospected in the area were reticulated into the town supply as a medium-term solution for Ntcheu urban supply. Mponela Urban Water Supply was dropped from the portfolio as the Water Department had carried out improvement works using in-house (DWSF) resources. 31. Design of a new 45m high rockfill dam with a storage capacity of 330,000m , and extension of existing treatment works and a distribution system for the Zomba Urban Water Supply suffered from donor withdrawal as a result of the "good governance" issue. This project was high on the list of priority projects to benefit from a reallocation of funds within MIP during the MTR as a long-term drought relief intervention for the urban population in Zomba. Detailed engineering designs, preparation of tender documents, pre-qualification of Contractors, an Economic Analysis, and an EIA for the new dam site have been completed and adopted by the GOM. Construction of a new dam immediately downstream of the existing Mulunguzi Dam will be carried out under the NWDP, the original site upstream of the existing site having earlier been rejected on account of a negative EIA on the ecosystem as discussed in more detail in Paragraph 35 below. 32. Rehabilitation of Boreholes: Implementation of this component suffered effects of start-up delays and contractor procurement problems, resulting in a reduction of the total number of boreholes to be rehabilitated under the IDA credit from 1500 to 1450 to fit within the original funding commitment in the DCA. These boreholes were in the Northern and Central Regions of the country. A further 1000 boreholes, cofinanced by the UNCDF within MIP, were completed in the Southern Region. An additional 278 boreholes were brought in for construction in the final eighteen months of the project to alleviate the scarcity of water in drought-stricken rural areas. At project closure, a total of 2555 of the 2778 original plus feed-in boreholes were completed, i.e. a 92% success rate. A Drilling Rig and assorted water quality testing equipment for the National Water Laboratory were also purchased as part of the drought relief intervention. 33. Formation and training of village committees in Village Level Operations and Maintenance (VLOM) at all the improved boreholes lagged far behind schedule, compromising their sustainability. A collaborative approach to VLOM in particular, and to the Community Based Maintenance of rural water, was developed by MOWS, IDA and UNICEF to reduce the backlog and accelerate future CBM and VLOM activities. This effort was promulgated to stakeholders (NGOs, the private sector and one donor) by the Water Department through a Bank-funded workshop. It is hoped that this effort will be implemented under the NWDP. The project also financed TA to clear the backlog of VLOM training and by project closure only 778 of the original 1450 planned borehole committees had been trained; the rest were deferred to the NWDP. At the time VLOM was included in the project as a community-based management of rural water supplies, it - 11 - was an innovative concept still in its developmental stages. MIP facilitated its further development and institutionalization in the Water Department. 34. The District Water Supply Fund (DWSF) Asset Valuation was completed in 1994 with MIP funding to assist GOM fulfill its financial covenants stipulated in the DCA for the sustainable operation of the fund. The valuation report contains updated replacement values of the assets scheme by scheme, and forms a valuable input to the Business Planning process for the Regional Water Boards (RWB) being formed under the NWDP. It is important however that RWB personnel be sufficiently trained in re-valuation of assets and the meaningful use of the information in the business development of the new Boards. 35. Public Buildings: Out of 21 public buildings identified for rehabilitation and improvement, only 8 (eight) were completed representing a 38% success rate for this component. The main causes of this low rate of achievement were: i) cost escalation in excess of 150% due to time lapse between the preparation of estimates and project start- up; and ii) unforeseeable additional works. The eight included: three District Hospitals; one Central (Referral) Hospital; three Secondary Schools; and a Teacher Training College. Machinga District Hospital and Chituo Housing were dropped from the original list as they had received alternative funding - from KfW for construction of a new Machinga District Hospital, and from GOM for Chituo Housing. 36. Completion of Minor Works for the NTC: While not in the original project design, US$0.57 million was set aside in 1992 for the engagement of a Project Coordinator to oversee the completion of remaining minor rectification tasks on the NTC. Successful completion of the NTC was critical to the removal of transport bottlenecks experienced by the country in its import-export trade, and as an alternative route to the sea ports. By December 1995, all outstanding minor works, including TA had been completed satisfactorily and within budget. 37. Study for the Privatization of Lake and Port Services: A total of SDR27,030 was reallocated from MIP to finance a study to privatize Lake Malawi and Port Services, formerly part of Malawi Railways. The study, which generally cites the viability of these services, was implemented by the Ministry of Transport and Civil Aviation, and the Consultant submitted his final report in January, 1996. The report forecasts increasing demand for MLS passenger and cargo services but emphasizes the importance of speed and efficiency for MLS if it is to survive competition from alternative modes of transport. 38. Environmental impact: The Project Staff Appraisal Report predicted beneficial effects on the environment as a result of implementing the project. Construction of new DRIMP roads, and rehabilitation of existing earth roads has had beneficial effects of checking soil erosion in adjacent land, as was originally predicted, by channeling stormwater into engineered drainage structures. Improved road pavements have increased access to some parts of the country during the wet season, and reduced damage to vehicles. Abandonment of the first dam site for Zomba Urban Water Supply has - 12 - ensured the conservation of the unique ecosystem around the marsh on Zomba Plateau. Siting of the new dam at the site of the existing dam is expected to have no significant adverse environmental impacts, and will offer a larger body of water not only for water supplies but also for sport fishing, camping, and other recreation. In rural areas, rehabilitation of boreholes has afforded safe water to a large number of rural people with accompanying positive health consequences. It has also significantly reduced the distance that families have to walk to sources of safe water especially during periods of drought, thus freeing up valuable time for other more productive socio-economic activities. F. Key Factors Affecting Project Implementation 39. Factors generally within GOM control that contributed to the gap between actual and expected project outcome included: i) government's failure to allocate sufficient funds to Part II of the PSIP development budget (local contribution) for road construction and rehabilitation; ii) the government's inability to allocate sufficient funds in the recurrent budget to meet adequate service levels of road maintenance in compliance with a Credit Covenant; iii) slow procurement of goods and works leading to tardy project start-ups and failure to complete projects within time; iv) non-compliance with Credit Covenants as agreed in the project DCA (See Table 10); and v) reduced MOW staff capacity when large numbers of staff were sent outside the country for training. 40. Factors generally not within GOM control that contributed to the gap between actual and expected project outcome included: i) IDA's condition not to declare the Credit effective until all donor commitments for cofinanced subprojects scheduled to begin in the first year (1989/90) had been obtained; and until GOM had received firm commitments from cofinanciers for second year (1990/91) subprojects; ii) withdrawal of donor support on governance grounds meant that GOM had to find alternative sources of funds, or the projects deferred; iii) a long gestation period between project appraisal and start-up; iv) adverse effects of a prolonged drought; v) adverse economic and political conditions that finally forced the floatation of the local currency; and vi) requisite additional preparatory work, such as detailed environmental impact assessments, not envisioned at appraisal. The Bank's project processing procedures were changed in the middle of MIP preparation to include mandatory Environmental Impact Assessments. This later resulted in longer processing and implementation of physical components than originally planned (Zomba Dam and Ntcheu Urban Water Supply for instance) to accommodate the new requirement. G. Project Sustainability 41. Continued capability of the Ministry of Works and Supplies on the one hand, and of the Water Department on the other, to plan and manage their respective programs in an efficient and effective manner depends to a large extent on their ability to retain highly trained staff within their employ, and to use and manage the Management Information Systems in a beneficial and sustainable manner. There is presently a significant staff - 13 - turnover due to attrition to the private sector and donor-funded projects, transfers within GOM, and loss due to natural causes. Highly sophisticated management information systems currently working satisfactorily run the danger of under-utilization, or of lying idle, if the staff that was specially trained to manage them leave the Ministry and the Department for whatever reason. GOM must therefore find ways and means of retaining staff with rare skills, and of training people to succeed them, if it is to maximize benefits from these expensive investments, and manage its programs efficiently and effectively. The training given under this project to the small group of specialists referred to in paragraph 17 appears to have succeeded in retaining an adequate proportion. 42. The sustainability of the national road network has been the subject of considerable concern throughout the project primarily because of low budgetary allocations for road maintenance, despite IDA contribution to annual expenditures on a declining scale. The level of service on the national network has so far deteriorated to the point where most of the roads and bridges (including main roads) become impassable during the rain season. Under 40% of the network has been maintained to a minimum level of service for the past four years, with the rest of the network left to deteriorate prematurely. This trend is likely to continue in the foreseeable future unless a major intervention is introduced, such as the creation of a dedicated Road Fund, managed by a Road Board as is currently envisaged for the proposed Road Maintenance and Rehabilitation Project (ROMARP). 43. The Medium Term Expenditure Framework (MTEF) introduced by government in the 1996/97 financial year revenue budget isolates priority sectors for a deliberate preferential allocation of funds to facilitate the achievement of the government's objective of poverty alleviation. The Ministry of Works and Supplies is among the priority Ministries. Road maintenance enjoys MKl05.0 million (62%) out of the total MTEF allocation of MK169.0 million to the Ministry. Even so, this represents only 40% of the maintenance requirements for the national road network. The rest of the sectors selected for MTEF are agriculture, health, education, and national security. It is therefore imperative that passing of Legislation establishing a Road Maintenance Fund, and the formation of a Road Board to manage the fund, are accelerated in order to salvage the network from further deterioration, and reduce road user costs. 44. Rural water supply services were generally not implemented in a manner likely to result in sustainable infrastructure. Over 2,500 boreholes were rehabilitated, but several hundred of the communities served by these boreholes were not given adequate training in operation and maintenance. The lessons of the past are that for adequate sustainability, the communities should participate in the planning phase, and their commitment to maintaining the facilities should be secured before physical work at the site is commenced. This was generally not done. The water supplies for towns were provided under somewhat more sustainable conditions. Nevertheless, the District Water Supply Fund was consistently underfunded as many Government agencies were in arrears and remain so at the time of writing. More sustainable arrangements will be established with the implementation of the National Water Development Project (NWDP) that was -14- declared effective on May 1, 1996, and the Bank/UNICEF promoted collaborative approach to the sustainability of rural water services. However, sustainability as implemented under the MIP is considered to be unsatisfactory. 45. Significant improvements made to a few selected public buildings would have been sustained through the MIP-financed Building Maintenance Management System (BUMMAS) installed in the Buildings Department of MOWS for the timely maintenance of the government building stock. Regrettably, this is an area that continues to receive little attention and commitment from GOM, with preference going to new construction rather than the up-keep of existing stock. Sustainability of public buildings is therefore highly unlikely unless the government's attitude towards the maintenance of its buildings changes radically; and more innovative structures for the maintenance of its stock, such as decentralization and more private sector participation are tried. H. Bank Performance 46. Identification: The MIP was identified with the MOWS as a continuation of the Bank's support in the roads sector. However, agreement was reached between GOM and the Bank during project preparation to extend the scope of the project to all the sectors in the Ministry's program, namely water, buildings, and human resource development and training, for a more comprehensive coverage of the Ministry's functions. Much as this was desirable, it did not sufficiently take into consideration the Ministry's capacity to manage the resulting large and complex project, as well as government's ability to finance the local contribution through the Public Sector Investment Program (PSIP) and allocate adequate maintenance costs annually on the recurrent budget. 47. Appraisal: In 1987/88, the Ministry of Works and Supplies identified and packaged the project components into a portfolio, drawing upon recommendations of the studies which formed the basis for World Bank appraisal. The Bank, however, took the lead in identifying bilateral and multilateral cofinancing donors, and coordinating discussions between them and GOM. The Bank's performance was not satisfactory in forecasting project costs, and in assuming a stable political and economic environment during project implementation. Secondly, having earlier determined that the implementing Ministry did not have enough capacity to manage its existing program and needed to be strengthened, the Bank proceeded to appraise an expanded and complex multi-sector project. This oversight contributed to a less satisfactory project management capability by the Ministry of Works and Supplies during implementation, and government's inability to service the project on the PSIP and recurrent budgets adequately. 48. Project Implementation and Supervision: The Bank changed Task Managers four times in the course of project implementation, which sometimes delayed important decisions, especially during the change-over periods. In total, the Bank fielded ten missions totaling 59.4 staff weeks throughout the implementation period, compared to 47.2 staff weeks through to appraisal. In particular, there was no supervision in the roads - 15 - area between June 1990 and February 1992 (Table 11). This level of supervision was not satisfactory and contributed to an under-achievement of targets in road improvement projects. Secondly, it took the Bank six months to review and complete the MTR even after Government had submitted to the Bank its draft MTR report within the time frame agreed with the Government. Consequently, this delayed implementation of critical components of the project aimed at averting adverse effects of the drought, and those that suffered withdrawal of donor support such as Zomba Urban Water Supply. 49. The MTR further recognized the changed environment in the country and Government's eagerness to accelerate project implementation. At this stage, the Bank transferred task management to a field officer who, backed by HQ support, successfully applied the approach developed at the MTR of monthly progress monitoring meetings with the implementing agency, use of experienced local consultants, and resolution of outstanding matters with the Client in the field. I. Borrower Performance 50. Preparation: GOM performance was satisfactory largely because of the large number of studies that preceded project preparation. One major problem worthy of note, however, was the inability of the Ministry of Works and Supplies to prepare realistic cost estimates for most of the rehabilitation works, largely on account of lack of a regularly up-dated cost database. This was exacerbated by the fact that, by their nature, rehabilitation works are often difficult to quantify and cost with a degree of accuracy. This caused significant cost escalations at the time the components were implemented, although this was later aggravated by an inclement economic environment.. 51. Implementation: Although GOM's overall performance in implementing MIP is assessed as satisfactory, some aspects of implementation were deficient. These were: i) inability of GOM to secure firm donor commitments timely; ii) tardy procurement of goods and works; iii) inability of local contractors to mobilize Performance Bonds and Insurance for capital works; iv) use of low capacity force account for capital works; v) inadequate Part II funds in the PSIP to support construction and rehabilitation works; and vi) management capacity limitations in implementation. 52. The rate at which funds were disbursed however was satisfactory. At the time of submitting GOM's pre-MTR report on September 30, 1992, SDR 7.9 million was available for re-allocation to new priority areas while the MTR report in June 1993 showed a total disbursement of SDR17.5 million i.e. 61% of the total Credit (SDR22.3 million). GOM performance was particularly satisfactory in the Management Improvement Component, various Consultancies, Technical Assistance, augmentation of urban water supplies and rehabilitation of rural boreholes, and support for the NTC. 53. During the final supervision mission in July, 1995, GOM projected that the credit would be fully utilized by project end. As at April 30, 1996, just under SDR4.00 (SDR - 16 - four only) remained undisbursed. Disbursement of remaining funds identified during the MTR accelerated with improved project management mainly as a result of transferring project supervision to the field. 54. Compliance with the legal Credit covenant in Section 4.03 of the DCA relating to adequate allocations in the Revenue Budget for road maintenance was, overall, unsatisfactory. Specifically, budgetary support for road maintenance throughout the project remained below agreed levels. This Covenant was later dropped when agreement was reached with the Bank to amend the DCA to include an IDA contribution of SDR2.4 million towards road maintenance funding for 1993/94 to 95/96, on an exceptional basis. This was, however, subject to additional GOM allocations in the recurrent budget to achieve acceptable levels of service on the network. Article IV of the DCA covers financial covenants relating mainly to accounting and audit requirements for the project, and financial performance indicators concerning the District Water Supply Fund (DWSF). There had been no problems with compliance with these covenants as the implementing Ministry maintained detailed records of all transactions, and audited DWSF Accounts regularly. However, Government debt to the DWSF in excess of 90 days continued to remain very high to the end of the project. (Table 10) J. Performance of Cofinancing Agencies 55. In addition to the International Development Association (IDA) and the Government of Malawi, the MIP was cofinanced by ten other bilateral and multilateral agencies as listed in Table 8. A condition for negotiations of the IDA Credit was that GOM receive firm commitments from cofinancing donors for financing subprojects whose implementation was scheduled to begin in the first year (SAR Chart 2). Donor commitment to projects was in a number of cases slow to materialize. Instances where neither donor would commit to a component until others committed, imposed an extra negotiation burden on the Government, often resulting in failure to secure firm funding. Consequently, IDA Credit Negotiations were delayed by nearly five months. Table 6 shows progress made in the implementation of cofinanced components at the date of this report. A brief discussion of the performance of each cofinanced component is given in Annex 3. Of the ten Cofinancing Agencies listed in Tables 6 and 8, two (JICA and DANIDA) withdrew completely, three (KfW, UNDP and ODA) withdrew part of their commitment, one (EDF) suspended a component of its commitment and later resumed, and one (AfDF) was subject to delays due to its internal restructuring program. Five (EDF, USAID, AfDF, UNDP and GTZ) are supporting components which are still continuing. Given the circumstances, no attempt was made to seek the comments of the Cofinancing Agencies on their own performance. K. Assessment of Project Outcome 56. The MIP was unique and particularly complex, as it cut across several subsectors, and was cofinanced by a total of eleven donors with the Bank as the lead donor, and the - 17 - Government of Malawi contributing to local costs. Consequently, it stretched the Ministry of Works and Supplies' resources to the limit. Tying effectiveness of the IDA Credit to financing from other donors only served to delay project implementation and contributed to cost escalation. Component costs also escalated because of progressive deterioration of the facilities in the time leading to implementation, poor estimating, and lack of monitoring of costs during the project preparation period. All these affected the outcome of the project to varying degrees. 57. In general, the project met its objectives only partially, albeit in their altered state, as described in more detail in Paragraph 13 above. This is mainly because the Borrower had to respond to adverse socio-economic and climatic environments. The Bank's flexibility in allowing GOM to modify its priorities, however, facilitated the achievement of the some of the objectives. Much more could have been achieved in the roads sector in particular if government contribution to the development as well as recurrent budgets as committed in the DCA had been forthcoming in a timely manner. Donor withdrawal from large capital projects resulted in more IDA-financed components in the PSIP, but the overall impact of this withdrawal on the national infrastructure was substantial. For instance, several roads improved with previous donor support remained in an extremely poor state of disrepair at project closure. L. Economic Analysis 58. Table 9 compares the Economic Rates of Return at project appraisal in June 1988 for first year components, to those of major IDA components at the time of preparing this ICR (August 1996). The same model was used in both cases. No calculation of ERR was made at appraisal for smaller sub-projects such as the road safety program, gravity-fed rural piped water schemes, training, and technical assistance as they were seen as complementing the larger project and were well justified. ERRs at project closure are well above those projected at appraisal and range between 27% and 97% for the rehabilitation of public buildings largely from benefits accrued from the cost of reconstruction avoided, and associated savings from annual maintenance costs. Rehabilitation of hospitals, in particular, gives even higher ERRs ori account of increased utilization of the improved facilities, an unprecedented increase in the number of patients aggravated by an influx of refugees fleeing the civil war in Mozambique, and due to diseases associated with the effects of drought such as diarrhea and malnutrition especially in children. ERRs for DRIMP roads too are above the average 12% calculated at appraisal, and are 38% for extension works, 26% for spot improvements, and 21% for new roads. As in public buildings, this improvement is mostly attributed to increased utilization for the conveyance of relief items to drought areas which were specially targeted; reduction in annual maintenance costs; increased agricultural production in the 1994/95 growing season due to excellent rains; and due to traffic diverted from the poorly maintained primary and secondary road system. 59. Rehabilitation and construction of boreholes give equally high ERRs (118% and 50% respectively) mainly due to increased number of households per borehole, - 18- particularly in drought-hit areas; savings accrued from walking long distances to safe water points; and reduced maintenance costs as a result of the transfer of responsibility for the operation and maintenance of boreholes to user communities through the VLOM concept. Improved health of communities as a result of using safe water supplies is also a contributing factor. For urban water supplies, the ERRs ranged between 13% and 17%, and are well above the 6.1% calculated at appraisal. This was due to additional water sales, made possible by reducing water losses through system rehabilitation. This enabled additional demand to be met by the project, which in turn resulted in improved health for the users of the improved schemes. M. Key Lessons Learned 60. By its sheer size and complexity, the MIP offers a rich ground for useful lessons for future operations in the infrastructure sector. The following are considered as key: a) Project cost estimates made during project appraisal should be monitored closely in the period leading to project implementation. Flexibility should be built into project financing to cushion the effects of cost escalations especially in weak economies. b) Levels of investment in development projects should be set having regard to projected annual Public Sector Investment Program (PSIP) sector ceilings, and the ability of the Ministry of Finance to allocate sufficient counterpart funds to avoid deferment of components. The ability of government to match recurrent expenditures with the rate of infrastructure development should also be assessed and confirmed at the appraisal stage, and reassessed annually. c) Frequent supervision missions with an appropriate skills mix should have been undertaken throughout the life of the project to monitor project progress and ensure compliance to Credit Covenants, especially given the complexity of the project and the high turnover of staff on both the Borrower and Donor sides. Project implementation can be facilitated when task management and supervision responsibilities are transferred to an experienced officer in the field. In the current project, the decision to rescope the project and transfer management responsibilities to the field should have been reached proactively, and not wait for the midterm review. d) Benefits accrued from implementing a complex multifarious project funded by a host of bilateral and multilateral aid donors should be traded-off against difficulties faced by the Borrower in satisfying each donor's requirements, its resource base to meet budgetary requirements, and its capacity to implement the project satisfactorily. In the case of the MIP, the multi-sectoral approach was not a good idea because: i) it was too complex to deal with as one program; ii) different skills and specialties were required to manage it in the Clients organization; and to supervise water supply, roads, public buildings, - 19 - and capacity building components by the Bank; and iii) Bank supervision budgets tend to be allocated by project rather than by program, and the fact that MIP was in fact three sector projects rolled into one large program may have complicated project supervision. e) Different elements of the same component co-financed by a number of aid agencies, (e.g. Zomba Dam, Treatment Works, Extension of Distribution and New Sewerage Works for KfW, Danish International Development Agency (DANIDA), and the Japanese International Cooperation Agency (JICA) respectively) pose special challenges especially when one agency withdraws its support for the project. Future projects should be so designed as to avoid such complex and interdependent arrangements; f) Problems encountered in implementing a complex infrastructure project, and the lessons learnt from it as cited above, underscore the importance of developing sector projects from a clear institutional framework. Development of long-term sector policies such as the National Water Resources Management Policies and Strategies, the National Transport Policy, and the National Environmental Action Policy guide the formulation of current projects. Government adopted sector policies are increasingly becoming a mandatory requirement by the Government of Malawi for public sector investment projects in Malawi. g) The argument made in f) above may be extended to include the increased involvement and participation of stakeholders and beneficiaries in the development of projects, particularly the participation of the private sector and beneficiary communities in provision and maintenance of infrastructure. Creation of a Road Fund and an independent Roads Board to finance and manage road maintenance respectively; and the Community Based Management (CBM) of rural and peri-urban water services are good examples of the application of this lesson. This also ensures transparency and accountability in the use of public resources by government. и к W Z Z д А Z д и W а д� � н � � � � и � н � Н и � � Н х д а PART II: STATISTICAL TABLES AND ANNEXES Table 1: Summary of Assessments Table 2: Related Bank Loans/Credits Table 3: Project Timetable Table 4: Credit Disbursements: Cumulative Estimated and Actual Table 5: Key Indicators for Project Implementation Table 6: Summary of Progress of Co-financed Components Table 7: Studies Included in Project Table 8: Project Financing Plan Table 9: Economic Costs and Benefits Table 10: Status of Legal Covenants Table 11: Bank Resources: Missions Annexes: I Completion Mission Aide-Memoire 2 Borrower Contribution to the ICR 3 Performance on Cofinanced Components 4 Performance of AfDF/ADB Financed Components 5 Management Improvement Component: Training Sub-Component TABLE 1: SUMMARY OF ASSESSMENTS Assessment Parameter Substantial Partial Negligible Not Applicable A. Achievement of Objectives Macropolicies x Sector Policies x Financial Objectives x Institutional Development x Physical Objectives x Poverty Reduction x Gender Issues x Other Issues x Other Social Objectives x Public Sector Management x Private Sector Management x Likely Unlikely uncertain, B. Project Sustainability x SaisatoySatisfactor.%. Pefct C. Bank Performance Identification x Preparation Assistance x Appraisal x Supervision x "DeficieDt D. Borrower Performance Preparation x Implementation x Covenant Compliance x Operation x SatsA- toc t~A1*6tctoy, alfatr E. Assessment of Outcome x Note: * (See Annex 5: Management Improvement Component: Training Sub-Component) TABLE 2: RELATED BANK LOANS/CREDITS Project ID Amount Purpose Year of Status (% USS mill. Approval Complete) Preceding Operations 1. Transport Sector 3MAL-PA-002 0.50 Highway Engineering: Detailed engineering of the 1967 Completed Zomba-Lilongwe Road (290km) 3MAL-PA-005 11.50 Highway: Reconstruction, bitumen paving of the 1968 Completed Zomba-Lilongwe road. Consultants study of road transport licensing regulations. 3MAL-PA-013 10.00 Highway II: Construction of the Lilongwe- 1975 Completed Kasungu road (113 km). First phase of a District Road Improvement and Maintenance Program (DRIMP). 3MAL-PA-019 10.50 Highway III: Construction of Kasungu-Jenda road 1978 Completed (85km) feasibility study and detailed engineering of Jenda-Mzuzu road 3MAL-PA-026 33.00 Highway IV: Construction of main Jenda-Luwawa, 1981 Completed and Mbowe-Mzuzu-Ekwendeni Road and DRIMP Phase II 3MAL-PA-035 44.9 Highway V: construction of Luwawa-Champhoyo 1984 Completed road; DRIMP Phase III; provision of weigh bridges. MW-PA-1634 140.75 Transport I (Northern Transport Corridor): 1987 Completed alternative route to sea port of Dar-es-Salaam in Tanzania for import/export trade 2. Water Sector 711-MAl 7.0 Expanded water supply capacity for Blantyre; 1977 Completed strengthening management of Blantyre Water Board. 1272-MAI 4.0 Formulation of long-range plan for Lilongwe Water 1982 Completed Board. 1 742-MAI 20.0 Expanded water supply storage water and 1986 Completed distribution system for Lilongwe. Following Operations MW-PA-34489 16.2 Railways/Lake Services Restructuring Project: 1995 Active Revitalizing the shorter route to Nacala; restructuring commercialization and ultimately privatization of Railways and Lake Services MW-PA-1667 94.1 National Water Development Project: 1995 Active implementation of GOM's Water Resources Management Policy and Strategies. TABLE 3: PROJECT TIMETABLE Steps in Project Cycle Date Planned Actual Date Identification February, 1987 February-October 1987 Initial Executive Project Summary - January 13, 1988 Pre-Appraisal January, 1988 October 1988 Preparation February, 1988 February, 1988 Appraisal June, 1988 November, 1988 Negotiations November, 1988 April, 1989 Board Presentation January, 1989 November 7, 1989 Signing - December 14, 1989 Effectiveness April, 1989 June 19, 1990 Mid-Term Review* April, 1991 Nov. 1992-May 1993 Project Completion June 30, 1995 December 31, 1995 Date of Last Disbursement December 31, 1995 April 30, 1996 Note: * MTR commenced in November 1992, was suspended, and completed in May 1993 after the Borrower submitted missing data and information. Source: Project File and relevant Aide Memoirs TABLE 4: CREDIT DISBURSEMENTS CUMULATIVE ESTIMATES AND ACTUALS (USS MILLION) FY90 FY91 FY92 FY93 FY94 FY95 FY96 SAR Estimate 3.1 8.9 16.5 23.1 27.4 28.0 28.8 Actual 3.3 8.9 14.8 19.3 22.2 25.7 28.8* Actual as % of estimate 106 98 90 84 81 92 100 Date of final April 30, disbursement 1996 Note: * > Balance of Disbursement as at April 30, 1996 was just under SDR4.00 Source: MIP, Project Accounts Office, Ministry of Works and Supplies. TABLE 5: Key Indicators of Project Implementation Key Indicators Planned Actual Achievement ____ ___ ____ ___ ___ ___ ___ __ _ ___ ___(%) Physical Outputs 1. Roads 1. 1 DRIMP Phase IV Extension 3 Districts 5 Districts 167 1.2 Spot Improvement - DRIMP Roads 350km 350km 100 1.3 DRIMP New Roads 500km 195km 39 1.4 Road Maintenance Depots 1.4.1 Maintenance Depots 30 units 8 27 1.4.2 Supervisory Staff Housing 37 units 7 20 2. Water 2.1 Extension of Urban Water Supply* 4 Schemes 3 Schemes 75 2.2 Rehabilitation of Boreholes 2.2.1 Rehab. of Boreholes 2500 2450 98 2.2.2 Training of Committees 2500 778 31 2.3 Construction of New Boreholes 0 246 * 2.4 Design of Water Schemes 0 2 * 3. Public Buildings 3.1 Rehabilitation of Public Buildings 21 8 38 3.2 Lilongwe & Zomba Training Centers 2 0 0 4. Studies 0 8 * Note: * Ntcheu urban water supply completed to final engineering design and preparation of tender documents, and Mponela Urban Water Supply was carried out by GOM using own resources. TABLE 6 - SUMMARY OF PROGRESS ON MAJOR IDA AND CO-FINANCED COMPONENTS Cofinancin Cost /(a) Completion Project Name / Description Agency Planned Actual Date Remarks (Us$ mil.) (US$ mii.) 1. Roads 1.1 Rehab. of Paved Roads Chikwawa-Bangula (74km) AfDF 3.9 0 Delayed due to ADB restructuring and difficulties with procurement of services Limbe-Thyolo-Mulanje-Muloza (104km) EDF 15.4 , 21.8 In progress Delayed to to donor withdrawal (govemance). * Cost given is Tender Value Chilumba-Karonga (80km) EDF 6 0 Deferred pending realization of savings from L-T-M-M above. Feasibility study commenced. Lilongwe-Salima (79 km) ODA 14.3 30.8 May' 94 Completed but with BP4.5 million in Contractor claims due to excessive earthworks 1.2 Rehab. of Other Roads AfDF 7.5 On-going 153 out of planned 286 km of earth road were improved to gravel standard using national contractors 1.3 Road Improvements AfDF 2.2 Karonga-Chitipa-Nakonde-Mpulungu - - On-going Detail Engineering Design in progress Mzimba-Mtangatanga 1.9 0 Deferred due to lack of funds Bangula-Nsanje-Marka ( 74km) AfDF/IDA 0 On-going Feed-in to MIP, Detail Enginerring Design in progress Dwangwa-Nkhata-Bay (& Bua Bridge) EDF 6.5 24.8 Aug. 1994 Cofinanced with KfW (EDF 90km, KIW 45km + Bua Bdge.) KfiW 7.9 20.5 1.4 Resealing of Paved Roads AfDF 4.6 3.5 Nkhota-kota-Dwangwa (58km) 1.2 1.8 Completed 1995 Benga-Nkhotakota (53km) 1.1 1.7 Completed 1995 Mzuzu-Nkhata-Bay (37km) 1.3 0 Deferred Mzuzu-J. Mzumara-Chiweta (68km) 1.0 0 Deferred 1.5 DRIMP Phase IV IDA 5.1 6.8 Dec. '95 1 .6 Improvements to 8 Bridges AfDF 2.2 0.4 Two bridges completed and a third commenced. Slow progress due to cost due to cost escalation and procurement delays for reduced number to be improved. 1.7 Road Signs DANIDA 1.5 0 Withdrew support due to govemance issue 1 8 Maintenance Equipment JICA 5.8 0 6th Japanese Grant Aid: Withdrew on political grounds 1.9 Vehicles and Equipment JICA 2.3 0 6th Japanese Grant Aid: Withdrew on political grounds 1.10 Road Maintenance Depots IDA 0.7 0.3 Under achievement due to use of inefficient force account 1 11 Rural Transport Pilot Program UNDP 0.5 - In-progress In progress in Min. of Transport and Civ. Aviation. Pilot trucks on trial by local (rural) rural transporters 1.12 Road Safety AfDF 1.0 - May, '96 Min. of Transport and Civ. Aviation - Completed TABLE 6 - SUMMARY OF PROGRESS ON MAJOR IDA AND CO-FINANCED COMPONENTS Cofinancin Cost /(a) Completion Project Name / Description Agency Planned Actual Date Remarks (US$ mil.) (US$ miu.) 1.13 Bitumen Overlay Training GTZ 1.7 - In-progress Phase I completed, Phase II in progress 1.14 Tech. Assist and Training AfDF 1.3 0 Funds not made available to GOM IDA 1.8 1.27 GTZ 1.2 - 1991 TA in Construction Contract Mngmnt. and DRIMP Road Maintenance Management completed ODA 1.1 - Dec. 1993 Contracts for OSAS TA (Highway Eng., Structural Eng., Architects, Quantity Surveyors, and other OSAS personnel) rendered non-renewable. Student Scholarships also withdrawn mid-term. UNDP 0.6 0 Withdrew support 1.15 Superv. of Constr. Projects AfDF 1.3 - On-going 2.0 Water Supply 2.1 Urban Water Supply AfDF Mzuzu Dam 2.4 2.8 Completed in July, 1994 Kasungu Dam 1.4 1.5 Completed in July, 1993 Karonga and Mangochi Schemes IDA 1.8 2.3 Karonga and Mangochi urban supply works completed KiW 8.0 0.0 Withdrew support along with DANIDA (and later JICA) 2.2 Rehab. of Boreholes UNCOF 5.0 - 923 rural boreholes rehabilitated IDA 4.4 4.5 Dec '96 1401 rural boreholes rehab'd., 246 boreholes constructed 763 Committees trained in CBM of boreholes /(d) (46%) 2.3 Gravity-fed Rural Schemes USAID 1.6 - Technical Assistance reviewed the PHICS /(b) Program and 8 schemes constructed /(c) 2.4 Tech. Assist. and Training UNDP 0.6 - Dec. ' 96 374 Village Committees trained in CBM of rural boreholes (37%) May, '95 TA to design improved direct action shallow well pump completed, prototype under field test 2.5 Superv. of Urban Water Supplies AfDF 0.9 0.9 June, '95 Completed (Mzuzu and Kasungu) IDA 0.9 0.52 Sept. 1995 Completed (Mangochi, Karonga and Design of Ntcheu Supply) 3. Public Buildings 3.1 Rehab. of Public Buildings IDA 6.9 3.6 8 out of original 21 institutions rehabilitated to completion 3.2 Training UNDP 0.4 0 Withdrew support 3.3 Supervision and Design UNDP 0.8 0 Withdrew support 4. Project Preparation Finance (PPF) IDA 1.5 Fully utilized and refunded Sources: Ministry of Works and Supplies Notes: Poject Office, and Ministry of Irrigation and Water 1. Most donors paid their costs off-shore, hence no expenditure records in project Planning Section 2. (a)/ Including contingencies but net of taxes and duties (b)/ Primary Health Intervention for Child Survival (c)/ Sekwa, Usisya, Ruarwe, East Bank (Limphangwe, Maperera, Mbabzi, Livunzu), and Namitambo Schemes (d)/ Community Based Management (of rural water services) TABLE 7: STUDIES INCLUDED IN PROJECT Study Purpose as defined at Appraisal Status Impact of Study 1. "Malawi Lake and Port Investigate privatization and Completed Privatization and Services Privatization and commercialization options for profitable December Commercialization Commercialization Study" operations, and recommended best option 1995 of Services (KPMG Peat Marwick) for implementation 2. "Nicheu Urban Water Detailed design for augmentation of Completed Facilitate Supply: Detailed Engineering supplies for Ntcheu Urban May 1995 construction of Study and EIA " (Willie & augmentation works Partners). in the NWDP 3. "Zomba Water Supply: Ready-for-construction drawings, tender Completed Preparation for Detailed Engineering Study, documents, and pre-qualification of November construction Economic Analysis and EIA" tenderers for Dam, Treatment Works, and 1995 Contract award. (Lahmeyer International) Distribution System 4. Project Coordinator for the Trouble-shooting and coordination of Completed Facilitated project NTC, Various Progress completion of remaining minor September completion and Reports (John Ryder) rectification works on the NTC 1995 finalisation of accounts 5. "DWSF Asset Valuation Update asset base and coordination of Completed Provides base Study" (COWIconsult) completion of remaining minor August information for rectification works on the NTC 1995 Business Planning for the new Regional Water Boards 6. "Axle Load Study" (Centre Investigate the degree and extent of axle Completed Set minimum fine for Scientific and Industrial loading on the primary network & February of MK300/tonne Research, RSA) implication of increasing the legal axle 1994 overload and inputs load limit from 8.2 to 10.0 tonnes into the planned Road Fund under ROMARP 7. "Assessment of Road Identify options available for the Completed Used as spring- Maintenance Requirements" maintenance of the national road November board for setting (Scott Wilson Kirkpatrick and network, with associated levels of 1993 levels of service and Partners) service and costs. Select and advise developing the recommend option "Mobile Pavement Repair Team" approach. 8. "Urban Roads Study" Assess urban road infrastructure Completed Preparatory input to (BCEOM/Lahmeyer condition and recommend improvements October the on-going Local International Ltd.) including a Facility Maintenance and 1992 Government Dev. Rehabilitation Information system. Project TABLE 8: PROJECT FINANCING PLAN Local Foreign Total % of Total Source (US$) (US$) (US$) Government of 12.7 - 12.7 8.0 Malawi IBRD/IDA 9.9 18.9 28.8 18.3 EDF 5.8 16.1 21.9 13.9 KfW 4.6 11.3 15.9 10.1 USAID 0.8 2.5 3.3 2.1 AfDF/ADB 8.4 30.4 38.8 24.6 JICA 0.4 7.7 8.1 5.1 UNCDF 1.8 3.2 5.0 3.2 UNDP 0.7 2.7 3.4 2.1 ODA 4.0 11.4 15.4 9.8 GTZ 0.2 2.7 2.9 1.8 DANIDA** 0.9 0.6 1.5 1.0 TOTALS 50.2 107.5 157.7 100 Note: ** Withdrew support early in the project to influence political change. TABLE 9: ECONOMIC COSTS AND BENEFITS ECONOMIC RATE OF SECTOR COMPONENT RETURN At Appraisal At ICR (SAR) PUBLIC BUILDINGS 1. Kamuzu Central Hospital - 32 2. Mzuzu Govt. Secondary School 29 48 3. Blantyre Secondary School - 51 4. Lilongwe Girls Secondary School 23 49 5. Blantyre Teachers Training College - 27 6. Nkhota kota District Hospital - 97 7. Nkhata Bay District Hospital - 72 8. Rumphi District Hospital - 66 ROADS * 1. DRIMP IV Extension - 38 2. DRIMP Spot Improvement - 26 3. DRIMP New Roads >12 21 WATER 1. Rehabilitation of 1450 Boreholes 20 118 2. Construction of 246 new - 50 Boreholes, Purchase of new Drilling Rig, and Drought Monitoring Equipment 6 17 3. Karonga Urban Water Supply 6 13 4. Mangochi Urban Water Supply TABLE 10: STATUS OF LEGAL COVENANTS Note: All legal covenants refer to the District Water Supply Fund (DWSF), and are Type 2. DCA Status at Original Revised Covenant Description Comments Section 07/31/95 Date Date Submit annual audited accounts Condition in Bank documents 4.01(b) C within 6 months of year end were later changed to 9 months 4.05 31 Mar, 31 Mar, Total revenues to cover (a)(i) C 1992 1992 operation, maintenance and depreciation 4.05 31 Mar, 31 Mar, Positive net income after (a)(ii) C 1994 1994 operation, maintenance, depreciation and interest expenses 4.05 C Maintain a current ratio of not Presently CR is 1.25 mainly on (aXIii) less than 1.4 account of Creditors rising from MK736,449 to over MK8,000,000 4.06(a) C Not incur any new debt DWSF Study now completed but 4.07 CP. 1 Oct. 1 Oct. Undertake annual revaluation of lacks some information for 1990 1994 fixed assets meaningful revaluation. WD to obtain from COWI for final payment. 4.08(a) NC 31 Mar, I Oct. Ensure that Ministries and 1990 1994 parastatals do not have arrears Arrears continue to persist I _ in excess of 90 days 4.08(b) C GOM to convert loan of MK3.688 million to capital contribution TABLE 11: BANK RESOURCES: MISSIONS Stage of Date No. of Days Staff Skills Mix Status Develop Problems Identified Project Cycle Persons in of Object Field Implem Through 02/88 4 15 PHE, SSE, STE, N/A N/A N/A Appraisal WE 09/88 8 22 PHE, SSE, Econ, N/A N/A N/A OA, TEd., STE, SFA, PO Appraisal N/A N/A N/A N/A N/A N/A N/A through Board approval to effectiveness Supervision 04/90 1 15 PHE N/A N/A N/A 06/90 1 12 SSE N/A N/A GOM Senior Staff Losses 02/91 1 5 SSE 1 1 Component cost escalation 09/91 1 5 SSE N/A N/A Donor pull out 03/92 1 8 STE 3 3 Low recurrent budgets, non- compliance with covenants 07/92 3 11 STE, SSE, Econ. 3 3 Inadequate counterpart funds, non-compliance with covenants, drought, donor withdrawal 11/92 4 11 STE, TE., SE, 3 2 Inadequate counterpart Econ. funds, non-compliance with covenants, drought, donor withdrawal 12/93 4 13 STE, CE, PE, FA. 2 2 Low revenue budget alloc. for road maintenance Large arrears on DWSF; 07/94 4 17 STE, 2-CEs, FA. S S low revenue budget allocation for road maintenance Completion 07/95 5 11 STE, FA, SWS, Procurement delays and -PE,CE compliance with Covenants Note: PHE = Principal Highway Engineer, SSE = Senior Sanitary Engineer, STE = Senior Transport Economist, WE = Water Engineer, Econ. = Economist, OA = Operations Assistant, TEd. = Technical Educator, SFA = Senior Financial Analyst, FA = Financial Analyst, PO = Project Officer, SWS = Senior Water Specialist, PE = Planning Engineer, CE = Civil Engineer AIDE MEMOIRE ANNEX 1 MALAWI iNFRASTRUCTURE PROJECT (CREDIT No. 2069-M.A) SUPERVISION MISSION. JULY 24 TO AUGUST 4, 1995 I. INTRODUCTION A World Bank mission consisting of Mr Peter Pohland (Deputy Resident Representative, World Bank Malawi Resident Mission, Team Leader), Mr. John Shepherd (Water Resources Management Specialist, World Bank, Washington DC ), Mr. A. Chakravarti (Financial Economist), and Mr. M. John Kandulu (Registered Engineer), supervised the above mentioned project. 2.- Meetings were held with the Ministries of Works and Supplies, and Irrigation and Water Development. Mr. Shepherd accompanied the UNICEF Resident Representative, Dr. Natalie Hahn, on July 28 on a field visit to Nsanje to review a UNICEF supported Community Based Management CBM) program and appreciate the successes and failures of the program. 3 This is the last formal World Bank supervision mission prior to the project closing date of December 31, 1995. It is not envisioned that project activities will be extended beyond this date. 4 The mission wishes to express its appreciation for the assistance and cooperation received from the Government of Malawi, the Ministries of Works and Supplies, and Irrigation and Water Development in particular. Findings and Recommendations of this Aide-Memoire are those of the mission and are subject to confirmation by World Bank Headquarters in Washington D.C For the Government of Malawi For the World Bank Eric H. Msolomba Peter K. Pohland (Secretary for Works and Supplies) (Task Manager) A-NNEX I II. OBJECTIVES 6. The objectives of the mission were as follows: 6.1 assess physical progress, the financial position and projected expenditures up to the closing date of the Credit (December 31, 1995) for those components being funded by DA, namely institutional capacity building, water supplies, roads and civil works; 6.2 confirm the amounts of IDA funds and Government contributions that are available for final reallocation to priority areas within the project; 6.3 agree on realistic implementation timetables based on 6.1 and 6.2 for the remaining period; and 6.4 discuss the format, timetable and data requirements for the Project Implementation Completion Report (PICR). III. NLAi FINDINGS Physical Progress and Financial Status 7. Resulting from information obtained from, and subsequent discussions with the implementing ministries, the current allocations based on the final expenditure of IDA component is summarized as follows: SDR ('000) % of Total Management Improvement 4345 19 Roads 6163 27 NTC Support 388 2 Water Supply 7090 32 Buildings 3250 15 PPF Advance 1064 5 Unallocated 0 - Total 22300 100 8. The scope, cost estimate and timetable for project components as summarized in Attachment 1. were reviewed and generally agreed between the Ministries of Works and Supplies, and Irrigation and Water Development on the one hand, and the mission on the other. ANNEX 1 9. As was the case during the previous mission, a significant amount of unallocated funds resulting mainly from savings in earlier projected expenditures meant that there is considerable scope to augment priority activities. It was emphasized by the mission that as there were only 6 months left to the project completion date, these savings should be allocated to quick disbursing activities otherwise remaining funds would lapse, and will not be available for use by Government. IV. AGREEMENTS REACHED The following discussion highlights agreements reached during the mission: MIP Phase I Components: 10. Manpower Development: The total allocation for this component is SDRS44,000. An undisbursed balance of SDR 50,000 remained at the end of July, 1995. MOWS confirmed that the remaining amount will be fully disbursed to 13 - out of 14 students presently completing their studies, before the project completion date. (Attachment 2) One Water Department student however (M.W. Mikuwa) will remain in college beyond December 1995. His costs will be transferred to NWDP at the expiry of MIP. The Ministry of Irrigation and Water Development is advised to put into train actions that ensure that there is a smooth transfer of responsibilities between the two IDA-financed projects. 11. MIP Phase II Components: IFMIS Extension to the Regions: The Consultant responsible for the implementation of this component is presently on site under a new contract to implement the additional works. MOW envisions completion before project closure this December. Extension of the computerized DWSF Billing System to Districts will be implemented by the original software Consultant, under an addendum. Procurement of hardware will be effected through NCB with a local supplier under a separate agreement. To clear compdter data management problems being faced by MWS and MIWD, the two Ministries will undertake to implement virus clean-up and hard disc reformatting exercises, preferrably through private sector computer companies paid from MIP balances. NTC Support: This project is on-going and will be completed before the end of this year. Lake Services Study: A total of SDR27,030 have been earmarked for the Lake Services Study as part of the Malawi Railways restructuring exercise. The study ANNEX 1 will be undertaken in the Ministry of Transport and Civil Aviation and will be completed before the MIP project closure date. DRLMP New Roads and Bridges: Projected total expenditure on DRIMP Phase IV to project closure is SDR290,000 (.MK6,940,084 @ SDR = MK23.95) for a total of 219.1kn of earth road to be improved. MOWS will intensify implementation of the works in order not only to stay within the remaining period, but also to complete the works ahead of the rainy season. MOWS confirms that adequate Part II funds are available to complete the work. Water Supply Component: Preparation of the final design and tender documents for improvements to Ntcheu Water Supply has now been completed. Due to the short time left to project closure, construction will now be considered under the New Water Supply Projects component of the National Water Development Program (N-WDP) which is scheduled for effectiveness in October this year. The balance of funds originally earmarked for these works has been advanced to the NWDP for the construction of 206 drought relief boreholes. Tenders have been received and are being evaluated. The Ministry will submit a detailed proposal for project supervision for the Bank's consideration. Buildings: As at August 2, 1995, Rumphi District Hospital was 70% completed on original works and completion is scheduled for December 1995. Completion of Bank approved additional works is scheduled for second week of December. No further extensions will be accepted. It is not expected that the Final Account will exceed the approved allocation of SDR215,000. Contractor is mobilizing and has programmed project completion within the remaining period. The Contractor for the rehabilitation of Nkhota-kota District Hospital is now on site and will work on an accelerated program to complete the works within the project deadline. 12. Road Maintenance Support and Pilot Project 12.1 Maintenance Support: IDA and GOM agreed to amend the DCA such that the Association would finance 30% of the road maintenance expenditure in 1993/94, 25%-in 1994/95, and 15% in 1995/96. GOM has since claimed, and has been reimbursed a total of MK7. 111 million by the IDA, representing 30% of MK23.7 million spent on road maintenance in 1993/94 fiscal year. The Auditor General is presently carrying out a financial audit of the Ministry's 1994/95 revenue budget. MOWS will therefore be in a position to submit to the Bank its 25% claim for Road Maintenance for reimbursement for FY1994/95 before year end. A balance of approximately SDRS42, 000 is still to be disbursed under this component. The projected expenditure breakdown for this amount is given in the table below. Ministry of Works and Supplies confirmed that all balances will be expended before the project completion date. The mission emphasized that ANNEX I procurement under this component should be closely monitored so that there is no slippage in tendering and in the delivery of goods and services. Road Maintenance Support: Projected Expenditure Breakdown Item Quantity Rate(K) Total(M I 1. Motor Cycles 20 38,500 770,000 2. Tipper Trucks 2 645,000 1.290,000 3. Tractors/Trailers 8 345,000 2,760,000 _4. Graders 2 2,515,000 5,030,000 5. Pick-ups 5 200,000 1,000,000 6. Bitumen (Bulk) 5,700,000 7. Refund for 1994/95 6,060,000 Total *22,610,000 * As at August 17, 1995, SDR = MK23.00 (approx.), Total = SDR983,000 12.2 Road Maintenance Pilot Project: The pilot phase of a low-cost road maintenance method initiated by the Bank was executed between May and June this year and was extremely successful. The project involved pothole patching over a 200 km stretch of surfaced road between Lilongwe and the Southern Region Border of MI near Balaka. This was achieved within one month. SDR250,000 was allocated for purchase of equipment and for the pilot run, and has been fully utilized. Additional funds have been allocated for an extended program -n all the three regions. Village-Level Operation and Maintenance (VLOM) of Rural Water Supplies 13. Formation of village committees for VLOM and training thereof for the initial 1450 boreholes still lags seriously behind civil works. The situation will obviously worsen when the72 plus 206 boreholes under the drought relief water supply program have Veen completed. Technical Assistance funded from MIP has been engaged for the period July 1- December 31, 1995 to assist the Water Department clear the backlog of Community Based Management (CBM) activities, of which VLOM is a component. The TA will submit a detailed activity program and deliverables, acceptable to the Bank, which should include implementation of a Monitoring System for water supply and sanitation services for rural communities. Further, implementation of future programs should preferably be preceded by an action plan that takes into consideration the Contractor's construction program. ANNEX 1 14. For this reason, the mission recommends a collaborative approach to future CBM activities of donor financed rural water supply projects. The collaboration would include such players as major aid donors, NGOs, the private sector, and relevant Government agencies in this area. It is however expected that Government will be the prime mover of this effort. It will also identify a focal point for all activities related to CBM for rural water supplies. Road Maintenance Initiative and Integrated Road Development Program (IRDP) 15. Having appreciated the need to develop and establish a long-term and sustainable road maintenance system in close collaboration with others in the region, GOM has employed a Road Maintenance and Development Coordinator whose main tasks were outlined in the Aide Memoire for the July 18-August 5, 1994 .. Supervision Mission. Institutional Capacity Building and Manpower Development 16. The high rate of vacancies among professional staff continues to pervade the two Ministries. The mission did not review the manpower skills assessment proposed during the previous supervision mission as this has not been undertaken by MOWS and Water Department. It is recommended that this be undertaken without undue delay taking due cognizance of the timing of the Civil Service Census component of the Institution Development Project (IDP 2) presently being implemented by GOM. Legal Covenants: 17. Article IV of the DCA covers the financial covenants agreed to by the Borrower The covenants relate mainly to accounting and audit requirements for the project, and financial performance indicators concerning the District Water Supply Fund (DWSF). As has been the case before, there have been no problems with compliance with.the covenants as the Ministry continues to maintain detailed records of all transactions. 18. Audited accounts for the 1993/94 financial year were submitted to the Bank last March. Accounts for 1994/95 are being prepared and will be submitted within the required nine-month deadline after the end of a financial year. Preparation of project accounts is still being done manually. Regrettably, the proposal to engage a computer firm to computerize record keeping was not carried out. An opportunity still exists to implement this proposal in the remaining period using off-shelf PC-based computer packages presently available in the country. Improved accounts data will be very useful as an input into the Project ANNEX 1 Implementation Completion Report The MWS will initiate this activity without further delay It is however expected that future projects of this nature will invariably be designed with improved accounting and record-keeping systems. 19. DWSF Asset Valuation: A final report has now been received from COIconsult that incorporates Government's comments. The report clearly contains the updated replacement values of the assets scheme by scheme, and forms a reasonable basis for revaluation under the Business Planning task of the NHDP. Further, the written-down values of the assets of each scheme have been worked out presumably based on the most commonly used scheme of depreciation, i.e. by decomposing the assets into broad types, assigning lives to each type, and depreciating by the straight line method. However, to regularly update these valuations requires the availability of this decomposed information including dates of completion of construction, the economic lives adopted, etc. It is not quite clear that the COWIconsult report provides this information. It was therefore agreed that MIWD will write a strong letter to COWIconsult indicating shortfalls between the Terms of Reference and the contents of the report, and requesting the Consultant to make good before payment of remaining sums can be made. The Ministry will copy the letter to MWS and the Bank for information. It was also agreed that training in the use of this information would best be carried out as an integral part of the Business Planning effort for the Regional Water Boards under the NWDP. 20. There has been no improvement in compliance with the financial covenants as compared to the previous supervision mission. A summary is provided in Attachment 3. Of the eight (8) covenants, six (6) have been met adequately. The following however, are a cause for concern and call for immediate remedial action: 20.1 the current ratio has deteriorated from 2.6 in 1992/93 to 1.25 during 1993/94" The major reason for this is an increase in creditors from MK734,449 to MK6,155,693 for the two fiscal years respectively. 20.2 as stated at paragraph 19 above, the asset valuation study undertaken by COWI does not seem to provide adequate information to permit MIWD to undertake an annual revaluation. GOM will therefore not be able to comply with the requirements of this covenant. ANNEX 1 20.3 arrears from Ministries to the DWSF continue to exist. At the end of 1992/93, debtors totaled to MK3.360 million. This amount increased to MK7.738 million at the end of 1993794. Major debtors continue to be the Army, Police, Ministry of Education, and Ministry of Health. Although the DWSF is now taking strict action to disconnect supplies to defaulters (notices to this effect have been issued in all regions), these sanctions will not apply to the major institutional debtors mentioned above. Since March 31, 1994, total debtors have declined to MK3.783 million. However, the existence of these arrears still amounts to non-compliance with Section 4.08 of the DCA. It is time therefore that GOM took decisive action on this matter. Continued non-compliance may compromise formation of the Regional Water Boards in the NWDP and delay its implementation. August 9, 1995 Lilongwe, Malawi ACITYEX 2 Ref.,No. HA:IC1 23 (3) 3: Oc':ý :ar99 P.o. Box3C ~ L:LONGWE,; 3 A72-:ionM-M.Jh ndl INFRASTRUCTURE PRO.TECT (CR. 29691 IMPLE ENTATION COMrPLETION REPORT T.nr you for vou l,te: cf Se:m-e: 3. My acologies for r.ot respondic2ng so er.t: zI-a n 7o. M; c:.: o i:e :z-:- -,.o .er : art as folo : 2.1 Whie it is correct:ha: wo:ks on the Chilumba - KaronV road were reayed due to cove-7ntr issues it may 'e usñ7Il to notc tat work en sprojec: has resumed w :e appointmet ofSi. GIb0 and Pr-zne:s to review the econr.cmc and feasibility study. Hopefully constr:ction should szr, ir. el 1998. Fwunds r--- availab*~e fro-m ±:4uro-c Un`on. 2.3 The engh of the Bangia - Nsa.je - M-ka road P:ojec: 's 74 kinometres. 2.6 So far2'No. bridges have 'ceen corap:ie:ed a.d he:e is prog-ess on a third. These are the only comre:ts I have. Yours sInCC:clv Mar±ew M. Ka=jmalere Corr.issione: for Works for SECRETARY FOR WORKS AND SUPPLIES ANNEX-3 Performance of Cofinanced Components 1. The European Development Fund (EDF) [US$21.9 million]: At the time of preparing the Staff Appraisal Report (SAR), the EDF had committed US$21.9 million for the reconstruction of the Limbe-Thyolo-Mulanje-Muloza (80.0 kin) and the Karonga- Chilumba (75.0 kin) Roads in the Southern and Northern Regions respectively; and for co-financing with KfW the construction of Dwangwa-Nkhata Bay Road (90 and 42 km respectively, straddling the Northern and Central Regions). Although Limbe-Thyolo- Mulanje-Muloza Road was tendered at the end of December 1992, EDF suspended any further work pending a significant improvement in the political governance of the country. The project was re-tendered in December 1994 after the country adopted democratic principles, and is presently under construction with completion expected in the first half of 1998. As a result of delaying implementation by almost four years, project local costs have escalated significantly mainly on account of inflation and the floatation of the local currency in February 1994. Karonga-Chilumba Road, now extended to Chiweta (104 kn), is currently under feasibility study. 2. As stated at Paragraph I above, EDF and Kreditanstalt fur Wiederaufbau (KfW) cofinanced the construction of Dwangwa-Nkhata-Bay Road (132 km) to Class I Bitumen Standard, and replacement of the single-lane Bua Bridge on the Dwangwa- Nkhota-kota stretch with a stronger two-lane concrete bridge. Contract payments were split between EDF and KfW 61% and 39% respectively for the road component with the EU picking up the bill for Bua Bridge. In spite of serious delays in contract mobilization and construction start-up, this component was completed only two months behind schedule. In addition, KfW committed a US$8.0 million contribution towards the construction of Zomba Dam for Zomba Urban Water Supply but later withdrew commitment in favor of completing remaining works on the Container Vessel for the Northern Transport Corridor Project. 3. United States Agency for International Development (USAID) [US$3.3 million]: USAID supported a number of capacity building efforts in the Ministry of Works and Supplies through its Human Resource and Institutional Development (HRID) program. These included: (i) Technical Assistance (TA) in the development and institutionalization of a computer-based data processing capacity (completed in January 1992); (ii) TA in Curriculum Development to improve and upgrade the curricula offered at the Ministry's Training Centers in Lilongwe, Zomba, and Blantyre (PVHO) (completed); and (iii) TA in advisory services for the Primary Health Intervention for Child Survival (PHICS) component of Gravity-fed Rural Water Supply Schemes. USAID also committed financing for the construction of 12, and rehabilitation of one gravity-fed rural water supply schemes (completed). Of these, eight new schemes were ANNEX 3 constructed and one rehabilitated, representing a 70% achievement at the close of the MIP although work continues in the PHICS program. 4. African Development Fund (AfDF) tUS$38.8 million]: The AfDF committed the largest component of the MIP totaling US$38.8 million, about 26% of the total US$151.8 million net of taxes. At the time of preparing the SAR, the fund had appraised its road components through its Road Maintenance and Construction II (ROMAC II) program. It had also committed itself to finance two of three dam projects namely construction of the new Mzuzu Dam, and raising an existing dam in Kasungu in the Northern and Central Regions respectively. The third, Zomba Dam and associated works was taken by KfW. Projects included in the AfDF financing plan for the roads sector were: * rehabilitation of Chikwawa-Bangula (paved) road (45km); * rehabilitation of various earth and gravel roads (286 km); * improvement of Mzimba-Chikangawa earth road (25km) to a paved standard; * resealing of Benga-Nkhotakota-Dwangwa (111km), Mzuzu-Nkhata Bay (37), and Mzuzu-John Mzumara-South Rukuru-Chiweta (68 km) paved road sections; * improvements to 8 road bridges; * support to the National Road Safety program; and * technical assistance, training, and support for information management systems. 5. Annex 4 shows key indicators of implementation achievement for the AfDF portfolio. In summary, although the two projects in the water supply sector, both of which were implemented as first year projects, enjoyed an excellent success rate, those in the roads sector did not. The African Development Bank underwent a major restructuring and reorganization in the course of implementing the MIP which adversely affected the flow of funds for project implementation. This delayed decisions in the procurement of consultants and contractors, and affected progress in the implementation of the first year program as a result of delayed payments to contractors. Consequently, only four of the ten earth and gravel road sections earmarked for rehabilitation were completed (40%); 111km of 216 km of paved roads resealed (51%); and I out of 8 road bridges reconstructed (13%). Mzimba-Chikangawa Road (25km) planned for improvement to bitumen standard was deferred due to insufficient funds, and the reconstruction of Chikwawa-Bangula paved road (45km) is presently at the tendering stage. 6. Implementation of the AfDF portfolio suffered for the same reasons as those cited for IDA components above, i.e. bids far in excess of appraisal estimates compounded by the lapse of time between project appraisal and implementation. In the case of the AfDF however, this was further exacerbated by an ambitious program that may not have taken into consideration the Fund's ability to fully finance it, and the Fund's restructuring and re-organization program that came mid-stream of project implementation. ANNEX3 7. Japanese International Development Agency (JICA) [US$8.1 million]: JICA committed US$8.1 million for the provision to the Government of Malawi of road maintenance plant, equipment and vehicles under the 6th Japanese Grant Aid package. Financing was, however, withdrawn early in 1992 to force political change in the country towards pluralism and the respect of human rights. It was not reinstated as was the case for other donors. 8. United Nations Capital Development Fund [US$5.0 million] provided funds for the rehabilitation of 1000 boreholes in the Southern Region out of which 923 were completed (92%). However, only 374 (37%) village water committees were formed and trained in Community Based Management (CBM) of rural water under UNDP financing due to the depletion of funds. 9. United Nations Development Program [USS3.4 million] withdrew support from the Management Improvement Component (training sub-component) of the MIP for the same reasons given elsewhere above. UNDP and IDA, however, co-financed TA to design an improved direct action shallow-well hand pump, a prototype of which is currently undergoing field tests; and formation and training of communities in CBM as mentioned in Paragraph 60 above. The Rural Motorized Transport Scheme being implemented in the Ministry of Transport and Civil Aviation is on-going and pilot trucks are presently on a trial run by local (rural) transporters. 10. Overseas Development Agency (ODA, UK, US$15.4 million) granted funds to the Government of Malawi for the reconstruction of the Lilongwe- Salima Road (80 km) within the MIP. Construction was completed and the road opened to traffic in May 1994, more than a year behind schedule. This project suffered from heavy claims by the Contractor totaling 4.50 million British Pounds, 60% of which is attributed to excessive earthworks (overhaulage of suitable material). In addition to the Lilongwe-Salima Road, ODA also supported eight (8) Engineering Technical Assistance personnel in the Civil Engineering, Quantity Surveying, Architecture, and Structural Engineering fields; and scholarships to staff in the Ministry for tertiary training in the United Kingdom. This facility was withdrawn in 1992 for political reasons as mentioned above, and the IDA management improvement component was utilized to cover the remaining students and extended TA personnel wherever this was deemed cost effective, especially in the Water and Buildings programs where there was a severe shortage of trained Malawians. 11. Geselischaft fMr Technische Zusammenarbeit (GTZ) [US$2.9 million] funded two Technical Assistance expatriates: one in the management of rural roads (DRIMP) and the second in road construction contract management. Both contracts were not renewed after termination as national (Malawian) experts had taken over their duties after appropriate training. GTZ also financed a Bitumen Training Production Unit (BTPU) for road maintenance personnel in the Roads Department. Later, this training was extended to local private sector contractors to develop their skills, and to prepare them to take on ANNEX3 contract maintenance of bitumen roads, hitherto the territory of direct labor works. At the closure of MIP, a total of 125 road maintenance supervisors and 20 private contractors were trained in bitumen production, pothole patching, and premix overlays. Phase II of this component is continuing beyond the MIP to April, 1998. 12. Danish International Development Agency [Danida, US$1.5 million] withdrew its support for the replacement of road signs on the national road network, under the auspices of the Southern Africa Transport Coordination Council (SATCC), on governance issues. This component remained unfunded to project closure. ANNEX 4 Performance of AfDF/ADB Financed Components Key Output Indicators Planned Actuals % of Targets Planned ROADS: 1. Reconstruction of Chikwawa-Bangula Road 45km 0 0 2. Rehabilitation of Earth and Gravel Roads: 2.1 Junction MI-Nkhoma 15km Okm 0 2.2 S73 Loop 29 29 100 2.3 Mchinji-Mkanda 36 36 100 2.4 Balaka- Junction M3 29 0 0 2.5 Msokera-Lifupa Lodge 53 0 0 2.6 Kamchocho-Banda-Euthini-Mpherembe 54 0 0 2.7 Nsande-Cape Maclear 19 19 100 2.8 Junction M3-Malindi 12 12 100 2.9 Embangweni Mission-Luwawa 25 0 0 TOTAL (Rehab. of Earth & Gravel Roads) 286 96 34% 3. Road Improvement to Paved Surface 3.1 Mzimba-Chikangawa (Mtangatanga) 25 0 0 ANNEX 4 Performance of AfDF/ADB Financed Components 4. Resealing of Paved Roads 4.1 Benga-Nkhota kota-Dwangwa 111 111 100 4.2 Mzuzu-Nkhata Bay 37 0 0 4.3 Mzuzu-J. Mzumara-S. Rukuru-Chiweta 68 0 0 5. Reconstruction of Road Bridges 8 1 12 WATER SUPPLY 6. Mzuzu Urban Water Supply Scheme 20m high earth-fill dam and pumping equipment 100 7. Kasungu Urban Water Supply Scheme Existing dam raised by 4.5 m and new pumping station built 100 ANNEX 5 Management Improvement Component: Training Sub-Component NAME OF OFFICER YEAR COURS DURATION LOCATIO Status K L. GUNDAS) 92/93 Post-grad ARCHITECTURE 12 MONTHS D OF JORDANSTONE COMPLETED L J CHITSANTHI 92193 Post-grad ARCHITECTURE 12 MONTHS LEEDS POLYTECHNIC COMPLETED V J. CHIRWA 92/93 Post-grad ARCHITECTURE 12 MONTHS 0 OF JORDANSTONE COMPLETED E. MACHIKA 92/93 Post-grad ARCHITECTURE 12 MONTHS DUNDEE. UK COMPLETED SCHOLAR SHIPS T EW NYIRENDA 94/95 M Sc (BRIDGE DESIGN) 12 MONTHS UNITED KINGDOM COMPLETED B E NAYEJA - 94/95 M Sc (BRIDGE DESIGN) 12 MONTHS UNITED KINGDOM COMPLETED A A MTHINI 94/95 M.Sc (BRIDGE DESIGN) 12 MONTHS UNITED KINGDOM COMPLETED DC C. PHIRI 94/95 M Sc. (BRIDGE DESIGN) 12 MONTHS UNITED KINGDOM COMPLETED W CHIUME 94/95 B.Sc (BUILD MNGMNT) 12 MONTHS UNITED KINGDOM COMPLETED F DIMU 94/95 M Sc (BRIDGE DESIGN) 12 MONTHS UNITED KINGDOM COMPLETED P KALIATI 94/95 RIBA Pt 3 12 MONTHS UNITED KINGDOM Still at School K MUNTHALl 94/95 RIBA Pt. 3 12 MONTHS UNITED KINGDOM COMPLETED S O. NG6MA 94/95 RIBA PL 3 12 MONTHS UNITED KINGDOM COMPLETED C K N KUMANGIRANA 94/95 M Sc. (COSNTR MNGMNT) 12 MONTHS UNITED KINGDOM COMPLETED W.B. GONOWE 94/95 M.Sc. (BUILD MNGMNT) 12 MONTHS UNITED KINGDOM COMPLETED S THONDOYA 94/95 M Sc. (ARCHITECTURE) 24 MONTHS REP OF SOUTH AFRICA COMPLETED M W MIKUWA 94/95 M Sc (Water Resources Mngrnnt) 24 MONTHS UNITED KINGDOM Still at School F KWAULE 95196 Water and Enwironmental Engineenng 24 MONTHS UNITED KINGDOM Still at School H H MTHINDA 92/93 M.SC (STRUCTURES) 18 MONTHS U OF PRETORIAIRSA COMPLETED J A MAKUNJE 92/93 M.SC. (CIVIL ENG) 12 MONTHS U OF STELLENBOSCHIRSA COMPLETED M J KANDULU 92/93 M SC (PROJECT MGT) 12 MONTHS LOUGHBOROUGHUK COMPLETED M SULUMBA 92/93 M.SC. (CONST. MGT.) 12 MONTHS HERRIOT WATTISCOTLAND COMPLETED C.K. ZULU 92/93 M.SC (WATER ENG.) 10 MONTHS U OF DAR-ES-SALAAM/TZ COMPLETED B KAPOTEZA 92/93 M SC (CONST MGT) 12 MONTHS U OF STELLENBOSCH/RSA COMPLETED S M N MAINALA 93/94 M SC. (H.R MGT) 36 MONTHS DIST. EDUCATION/MLW ON-GOING H KANJERE 92/93 B.SC (ENV. ENG) 48 MONTHS SOUTH LONDON POLY/UK Still at School S D T MATENJE 92/93 CONST. CONTRACTS & 3 MONTHS GEORGETOWN UlWASH DC COMPLETED PROJ. PROCUREMENT W 0 MBVUNDULA 90/91 M SC (PROJ ANALYSIS) 12 MONTHS U OF YORK/UK COMPLETED J J. SOMBA 90/91 M SC (CONST MGT.) 12 MONTHS LOUGHBOROUGH/UK COMPLETED W Y MWAFULIRWA 93/94 MECH ENG REGISTRATION 8 WEEKS UNITED KINGDOM COMPLETED P P NAMWAWA 93/94 MECH ENG REGISTRATION 8 WEEKS UNITED KINGDOM COMPLETED SHORT COURSES L MPANJE (Miss) . 0 COMMUN WATER SUPPLY & SAN 3 MONTHS LoughboroughtUK COMPLETED M A KAMMALERE 92/93 SEMINAR RD CONST 2 WEEKS ARIZONA/USA) . COMPLETED B K MSYALI 92/93 SEMINAR RD CONST 2 WEEKS ARIZONAfUSA) COMPLETED C KALONGA (MISS) 92/93 COMPUTER ADV MGT COURSE) 2 WEEKS CSIR/RSA) COMPLETED 0.8 KAPINGASA 92/93 - COMPLETED K. BANDA (MRS) 92/93 COMPLETED G D. MANGANDA 92/93 COMPLETED O KANKHULUNGO 92/93 PROCUREMENT 2 WEEKS ESAMI COMPLETED BM CHIRWA 92/93 COMPLETED K L MVULA 92/93 COMPLETED 50 OFFICERS 92/93 NEGOTIATING SKILLS 2 WEEKS TRAINING CENTRE/MALAW COMPLETED B D.S MHANGO 90/91 PROJECT EVALUATION 12 WEEKS U OF STRATHCLYDE/UK COMPLETED DJ BAULENI 91/92 ARCHITECTURE 12 WEEKS LUND UNV /SWEDEN COMPLETED N L CHAKHAME 91/92 MONITORING & EVALUATION 9 WEEKS U OF E ANGLIA/NORWICH UK COMPLETED G B NKHWAZi 91192 SITE MANAGEMENT 12 WEEKS CROWN AGENTStUK COMPLETED J J SOMBA 91/92 Q.S CONFERENCE 1 WEEK A.S. UNIV ZARIA NIGERIA COMPLETED E H MSOLOMBA EVALUATION STUDY/ COMPLETED PAVEMENT MGT SYS HARAREZIMBABWE D KARA COMPLETED VARIOUS PARTICIPANTS DISBURSEMENT WISHOPS (IDA) I DAY COMPLETED TUTOR & 15 TRAINEES 93194 CLERK OF WORKS COURSE 4 MONTHS MOW TC LILONGWE COMPLETED VARIOUS 93/94 COMPUTER TRAINING, VARIOUS COMPLETED MANAGEMENT & TECHNICAL 7Т . 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