Turkey - Ankara Sewerage Project

 ICRR 10425 Report Number : ICRR10425 ICR Review Operations Evaluation Department 1. Project Data : OEDID: OEDID : L3151 Project ID : P009061 Project Name : Ankara Sewerage Project Country : Turkey Sector : Sewerage L/C Number : Loan 3151-TU Partners involved : EIB, KfW Prepared by : Klas B. Ringskog, OEDST Reviewed by : Hernan Levy Group Manager : Gregory K. Ingram Date Posted : 08/04/1999 2. Project Objectives, Financing, Costs and Components : Objectives : (a) Eliminating the discharge of untreated sewage into the Ankara River and its tributaries; (b) Improving services for some 500,000 persons already sewered; (c) providing an additional 850,000 persons access to these services; and (d) reducing flooding in flood-prone parts of Ankara. Components : The project comprised a large amount of secondary sewers to collect sewage from customers, five major collectors, and two major interceptors . In addition, a sewage treatment plant was planned for a flow up to 18 cubic meters per second. Further, about 45 km of stormwater drains and pipelines were included . Funds were also provided for digital mapping of ASKI's service area; for the purchase of operations and maintenance equipment of sewers, and for technical assistance and training to strengthen ASKI, including its ability to operate and maintain the sanitary sewerage and stormwater drainage systems . Costs: The total project cost at appraisal was US$ 556.8 million vs. the actual cost of US$ 597.2 million. Financing : The costs were financed by the World Bank loan ( US$ 100.8 million); the European Investment Bank(EIB) (US$ 50.4 million); KfW (US$ 159.9 million), and the Ankara Water and Sewerage Administration (ASKI) ( US$ 286.1 million). The World Bank loan was approved in FY 90 and closed, fully disbursed, on February 28, 1999, two months behind schedule. 3. Achievement of Relevant Objectives : The Project was scheduled over a nine -year period in recognition of ASKI's financial constraints . In the end, the actual project cost was only 7% above the appraisal estimates but there had been large variations for the different components. (a) Eliminating the discharge of untreated sewage into the Ankara river was fully achieved through the construction of the two major interceptors and Ankara sewage treatment plant; (b) An undetermined number of clients already sewered saw their services improve through the investments and rehabilitation of sewers of different diameter; (c) An additional 1.0 million persons were provided with sewer service under the project vs . the planned 0.85 million; and (d) the risk for flooding has been reduced following the completion of the planned stormwater drainage works. Although not an explicit project objective, ASKI has undoubtedly become a more modern and capable institution within the constraints of its municipal charter . 4. Significant Achievements : All the works were finished within the planned implementation period in spite of numerous project execution problems, such as failing civil works contractors in a number of instances; initial management changes in ASKI that affected project implementation negatively, and difficulties of raising local counterpart funding due to the lack of effective arrangements for settlement of Ankaran public entities' debt to one another . 5. Significant Shortcomings : The Project objectives were modest in the sense that they were mostly physical . As noted, they were largely achieved although with delays . However, the Project might have included more ambitious targets of making ASKI more autonomous from the Ankara municipality . 6. Ratings : ICR OED Review Reason for Disagreement /Comments Outcome : Unsatisfactory Marginally Satisfactory The Project did eventually meet its narrowly set physical objectives and Ankara population has better sewer service as a result. Institutional Dev .: Partial Modest Sustainability : Uncertain Uncertain Bank Performance : Deficient Satisfactory At appraisal in 1989, the objectives of institutional reform were modestly set . The narrow physical objectives and modest institutional objectives were achieved albeit with some delays . Borrower Perf .: Deficient Unsatisfactory Quality of ICR : Satisfactory 7. Lessons of Broad Applicability : (1) It is preferable to have a few, simple and consistent objectives that can be achieved when lending to a novice institution for the first time rather than overreach with a multitude of objectives that ultimately remain unfulfilled; (2) It is essential to reach full agreement on procurement procedures before going ahead with project implementation . The procurement problems in the early years of the Ankara project are largely due to procurement disagreements . (3) The Project calls into question the merits of financial covenants when the implementing agency, ASKI, does not have de facto full authority to take all actions ( such as tariff adjustments) to assure full compliance. 8. Audit Recommended? Yes No Why? There are three recent ICRs for water supply and sewerage projects in Turkey . It would make sense to undertake audits of the three to detect common constraints and lessons that might prove of value to the country and to the region in designing future operations and reforms . 9. Comments on Quality of ICR : The ICR is well written and quickly picks up the key points and the relevant project lessons . ICR's analysis of implementation experience and results and the project outcome is comprehensive and of high quality . This analysis will prove useful for preparation of future projects in Turkey .