Morocco - Irrigation-Based Community Development Project

Report No. PID9794 Project Name Morrocco-Irrigation Based Community (@) ... Development Region Middle East and North Africa Region Sector Irrigation & Drainage Project ID MAPE56978 Borrower(s) KINGDOM OF MOROCCO Implementing Agency Address MINISTRY OF AGRICULTURE, RURAL DEVELOPMENT, WATER & FORESTS Direction des Amenagements Hydro-Agricoles (DAHA) Quartier Administratif, B.P. 607, Rabat Contact Person: Abdelkrim Rahali Tel: 212 (0)37 75 17 10 Fax: 212 (0)37 75 20 42 Environment Category B Date PID Prepared December 20, 2000 Projected Appraisal Date March 28, 2000 Projected Board Date March 27, 2001 1. Country and Sector Background After making relatively good progress in the late 1980s (real agricultural GDP growth of 4.0 percent per annum from 1986-91, compared to population growth of 2.0 percent per), rural sector growth and poverty alleviation deteriorated in the 1990s (real agricultural GDP growth of -1.8 percent from 1991-98). An estimated 27 percent of the rural population, or 4 million people, live on less than $1.00 a day. Among the main sector issues are the following:Social indicators in rural areas are similar to those for countries with much lower per capita incomes, and the gap between urban and rural living standards is great, contributing to growing rural exodus: for example, access to potable water is almost universal in urban areas, but only 30t in rural areas; illiteracy is 37T in urban areas, but 75t in rural areas; andThe country's traditionally centralized approach to rural development has provided little encouragement for local participation and cost sharing which are essential for sustainability. However, the Government is committed to addressing these issues, and has recently issued a "2020 Rural Development Strategy." It has also established a Permanent Inter-Ministerial Rural Development Council at the ministerial level and an Inter-Ministerial Rural Development Committee at the Secretary General level under the leadership of the Ministry of Agriculture, Rural Development, Water and Forests (MRDWF) to guide implementation of the strategy. 2. Objectives Reflecting the goals of the IBCD Program (2001-14), the proposed first-phase Project (2001-05) would seek to improve the incomes and quality of life of rural communities centered on small and medium irrigation (SMI) in the provinces of Azilal, Khenifra and Al Haouz through  investments in SMI rehabilitation and improvement and complementary community infrastructure. As a way of piloting the shift to the new demand-driven, integrated approach, additional resources would be provided to finance additional investments in complementary community infrastructure not covered by ongoing sectoral programs on an un-predetermined basis, in accordance with the priorities of the rural communities as expressed through a participatory planning process. Similar investments in SMI rehabilitation and improvement and complementary community infrastructure would be prepared on a participatory, multi-sectoral basis for the 6 additional provinces to be covered by the second phase. 3. Rationale for Bank's Involvement Morocco was selected as a "Focus Country" under the "Rural Development Vision to Action" Program. Bank support provides continuity to the Government in implementing its long-term national rural development strategy which it also helped design, and may facilitate the involvement of other donors in later phases of the Program;Having acquired considerable experience in Morocco and around the world in community participation and operations dealing with integrated rural development, and recently championed community driven development, the Bank can facilitate access to information and advisory capacity on design and implementation issues and lessons learned with comparable projects; and The new APL lending instrument provides greater flexibility in dealing with client needs and local conditions as they evolve. 4. Description Over 5 years (2001-05), the proposed first-phase Project would consist of the following four components: 1. Rehabilitation of SMI - About 9,450 ha in total, of which 3,450 ha in Azilal and an estimated 3,000 ha each in Khenifra and Al Haouz 2. Complementary Community Infrastructure - Additional rural road, water supply/ sanitation, electrification, health and education facilities for the selected rural communities not provided for by ongoing sectoral programs 3. Institutional Strengthening - Support for the participatory, integrated approach and for enhanced agricultural support services in the selected rural communities 4. Preparation of Phase II - Support for participatory, integrated programming of SMI rehabilitation and improvement and complementary community infrastructure in 6 additional provinces 5. Financing Total ( US$m) Total Project Cost 46.55 6. Implementation Project implementation arrangements have been designed to incorporate two new dimensions: (a) beneficiary participation in the planning, design, execution and O&M&R of project works and equipment; and (b) integration of the various sectoral programs into a more coherent framework. Existing policies and procedures for SMI rehabilitation and improvement works are -2 -  already "participatory" in that an Agricultural Water Users Association (AWUA) has to be formed in advance to collaborate in the design, execution and O&M&R of the works. Similar policies and procedures apply to rural water supply/sanitation works, so that under the Project the participatory approach would mainly affect the choice of other complementary community infrastructure investments (roads, electrification, schools and clinics). Beneficiary participation is one of the cornerstones of the Government's new "2020 Rural Development Strategy" which calls for greater involvement by concerned populations in the planning and execution of rural development programs. It is based on the realization that the top-down approach has largely failed to instill a sense of ownership among the beneficiaries for project works and equipment which leads, in turn, to shortcomings in their O&M&R, ultimately compromising their sustainability. Following existing practice under the various sectoral programs, beneficiary participation also implies a significant contribution to the capital cost of Project works and a commitment to take over responsibility for their O&M&R. Integration of the complementary community infrastructure with the SMI rehabilitation and improvement works to be provided under the Project is not an end in itself, but rather the means to create a real sense of ownership and the conditions for a sustainable improvement in incomes and living standards, following the priorities of the rural communities concerned. Integration is also a way for the Government to take advantage of synergy's (e.g., roads, water supply/sanitation and electricity coordinated with school building or clinic construction). Project Management Since the Ministry of Agriculture, Rural Development, Water & Forests (MARDWF) would be responsible for the Project, it would be administratively attached to the Department of Hydro-Agricultural Works (DHAW) in the Ministry. The Director of DHAW would be designated National Director (ND) of the Project, and would coordinate its activities with the other ministries involved through a National Coordinating Committee (NCC), of which DHAW would be the Secretariat.. The ND would be assisted by two engineers and a financial management specialist. Similarly, at the provincial level, the Provincial Director of Agriculture (PDA) would be responsible for the management of the Project within the province. He would be designated Provincial Director (PD) for the Project, and would coordinate its activities with the local branches of the other ministries involved through a Core Rural Development Committee (CRDC), of which he would be the Secretary. To assist the PD, a new Provincial Management Unit (PMU) would be set up with four staff, including an accountant. Procurement Procurement under the Project would be in accordance with the Guidelines for Procurement under IBRD Loans and IDA Credits, dated January 1995, revised in January 1999, using standard bidding documents and contract forms agreed with the Bank. Consultants would be selected in accordance with Bank's Guidelines on the Selection of Consultants, dated January 1997 and revised in September 1997 and January 1999, using standard contract forms agreed by the Bank. Disbursement Retroactive financing for eligible expenditures up to the limit of 10t of the loan amount would be provided to help cover project expenditures incurred up to one year prior to loan signature. The Borrower would establish a Special Account (SA) in MAD with the Treasury. Financial Management The Financial Management System (FMS) in place in the MARDWF in general and DHAW in particular, is based on principles and procedures defined by the legal framework applicable to the pubic sector and more specifically to governmental institutions. DHAW maintains an accounting system on a cash basis and the - 3 -  outline of budget components according to the provisions of the Public Accounting Law. The management information system allows an acceptable monitoring of operational activity Though satisfactory overall, the existing financial management system should be improved in order to handle the specific requirements of the Project (coordination with other agencies involved), to meet the Bank requirements and to achieve the required efficiency. The improvements would be reflected in an action plan to be agreed at negotiations. Accounting and Financial Reporting. The National Director (ND) would maintain acceptable project accounts with the assistance of a financial management specialist. This team would ensure the issuing of annual project financial statements and quarterly Project Management Reports (PMR), as well as their submission to the Bank and to the auditors. Procedures for accounting and financial reporting as well as internal control mechanisms specific to the project aimed at meeting the Bank requirements, would be developed by the specialist. Audit. MARDWF would appoint an auditor acceptable to the Bank to carry out an annual audit according to the International Standards as issued by the International Federation of Accountants, the Bank's Guidelines (e.g. Financial, accounting, reporting and auditing handbook, "FARAH") and specific Terms of Reference (TORs). The auditor would express a professional opinion on the annual project financial statements and submit annual audit reports to the Bank . Disbursements. Disbursements from the Bank loan would be initially made in the traditional way (reimbursements with full documentation and against Statements of Expenditure - SOEs, and direct payments). The Government could opt for PMR-based disbursements after the assessment of the financial management system, which aims at ensuring that this system is operating satisfactorily. Monitoring and Evaluation A participatory monitoring and evaluation system would be designed by consultants On this basis, the DPAs of Azilal, Al Haouz and Khenifra, with input from the beneficiaries, would monitor and evaluate implementation of the Project on an ongoing basis, and submit regular progress reports to the Bank. They would also prepare and submit to the Bank by mid-term an implementation review report on progress to date and the measures required to successfully complete the project. The project would be supervised twice yearly by the Bank. 7. Sustainability n Technical sustainability would focus on arrangements for the O&M&R of the infrastructure to be rehabilitated and improved and the appropriate management of natural resources. The project would promote technologies capable of avoiding soil degradation and erosion, and preserving other natural resources; n Institutional sustainability would be promoted through a decentralized organizational set up that would ensure local coordination and ownership; andn Financial sustainability would be pursued by promoting investments and activities that would generate regular income streams and which the beneficiaries themselves would be capable of managing and maintaining. 8. Lessons learned from past operations in the country/sector The proposed project would build on past experience with rural development programs which indicate that flexibility and grass-roots, demand-driven approaches are key in building ownership, defining local priorities and laying the foundation for better implementation and sustainability. The following main lessons can be drawn from these programs:the top-down "integration" of rural roads, water supply and other socio-economic - 4 -  infrastructure with agricultural projects proved unsustainable, due mainly to inadequate counterpart funds and limited beneficiary commitment; and the current budget process is highly centralized and not conducive to community driven development. The proposed project would address these issues by: (a) establishing a participatory process for the beneficiaries to express their priorities and see that they are implemented; and (b) provision of additional resources to be used flexibly to respond the incremental needs of the beneficiaries in an integrated way. 9. Program of Targeted Intervention (PTI) Y 10. Environment Aspects (including any public consultation) Issues : Given the integrated decentralized programming and budgeting of rural development activities under the Project, the key issue compared to a "standard type" project environmental assessment is that the sub-projects/components are, for the most part, unknown. Consequently, there is a need to develop a mechanism for applying EA and Environmental Management Plan (EMP) procedures to the Program. The approach to be taken combines features of financial intermediary operations with those of a sector assessment. 11. Contact Point: Task Manager Douglas W. Lister The World Bank 1818 H Street, NW Washington D.C. 20433 Telephone: 202-458-1285 Fax: 202-477-1981 12. For information on other project related documents contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Web: http:// www.worldbank.org/infoshop Note: This is information on an evolving project. Certain components may not be necessarily included in the final project. This PID was processed by the InfoShop during the week ending January 26, 2001. - 5 -