Algeria - Ain Temouchent Emergency Earthquake Recovery Project

 ICRR 12575 Report Number : ICRR12575 IEG ICR Review Independent Evaluation Group 1. Project Data: Date Posted : 03/16/2007 PROJ ID : P069947 Appraisal Actual Project Name : Ain Temouchent US$M ): Project Costs (US$M): 112.85 109.13 Emergency Earthquake Recovery Project Country : Algeria Loan /Credit (US$M Loan/ ): US$M): 83.5 78.6 Sector Board : UD US$M ): Cofinancing (US$M): 0 0 Sector (s): Housing construction (56%) Other social services (26%) Central government administration (10%) General water sanitation and flood protection sector (6%) Roads and highways (2%) Theme (s): Natural disaster management (100% - P) L/C Number : L7023 Board Approval Date : 06/22/2000 Partners involved : Closing Date : 12/31/2003 05/31/2006 Evaluator : Panel Reviewer : Group Manager : Group : Anna Amato Peter Nigel Freeman Alain A. Barbu IEGSG 2. Project Objectives and Components: a. Objectives: To restore normal functioning of communities damaged by the December 22, 1999 earthquake in the region of Ain Temouchent and to increase national preparedness for future disasters . The objective would be reached by : - strengthening the capacity to disaster response of the civil protection entities; - strengthening of the existing system of earthquakes monitoring and studies; - strengthening the guidelines for para -seismical design and control of construction; - promoting risk coverage, specially insurance, to reduce the financial impact of disaster on the national budget; - supporting the government for the construction of durable housing units in the earthquake affected area; - restoring the essential urban services (drinkable water, sewage, roads ); - rebuilding the public social equipment for education, health, and administration . b.Were the project objectives/key associated outcome targets revised during implementation? No c. Components (or Key Conditions in the case of DPLs, as appropriate):  A. Disaster Organization and Risk Management (App.US$9.37 million; Actual US$6.67). This includes purchase of emergency response equipment, construction of civil protection facilities, assessment of communications systems used in civil protection, upgrading of communication and information systems used in civil protection, seismic risk assessment and monitoring network upgrades, assessment of building code enforcement, assessment of natural hazard insurance programs. B. Housing (App. US$65.78 million; Actual US$48.42). This includes the building or reconstruction of 3400 rental units and 800 single unit homes. C. Technical Infrastructure (App. US$8.39 million; Actual US$3.81) This includes the repair of water supply and sewerage systems and construction of a wastewater treatment plant; repair or reconstruction of 45 kms. of roads; D. Social Infrastructure (App. US$26.78 million; Actual US$49.22) This includes repair of 12 schools, 8 small health centers and construction of a 240 bed hospital; and the reconstruction or repair of 17 public buildings (post offices, court house, etc.) E. Project Implementation (App. US$1.69; Actual US$0.17) This includes the establishment of an Interministerial Committee for Coordination and Follow-Up for the Ain Temouchent Disaster Area and of a Project Coordination Unit . d. Comments on Project Cost, Financing, Borrower Contribution, and Dates: The GOA requested cancellation of non -committed funds of US$0.79 million and an additional US$4.07 million was not disbursed. Almost one fourth of the loan amount, US$ 17.4 million dollars, was shifted from the Housing Construction Component to the Social Infrastructure Component, specifically the construction of the new hospital . It is not explained explicitly in the ICR but it appears to have been for the unexpected costs of building a hospital but did not affect completion of the housing component, which came in under budget . Because the project was prepared as an Emergency Recovery Loan, it is covered by OP 8.50, with the terms and conditions applicable at that time, specifically that the project be completed within 3 years. The original closing date was already half a year beyond policy limitations, and the project was extended yet another two and a half years beyond that due to delays in effectiveness, procurement delays and completion of major infrastructure projects . 3. Relevance of Objectives & Design: The project objectives were in line with the CAS, which includes protection of vulnerable groups and transition to a market economy. They were also relevant to a clear need which was affirmed by both federal and local agencies for better disaster prevention in a seismically active country which also regularly has flooding and pest infestation problems. And of course, repairing homes and infrastructure after an earthquake are relevant to the economy and well-being of the people of the stricken area, most of whom were poor . The primary design problem, in retrospect, was including large scale infrastructure in an instrument (ERL) designed for short-term (3-year) completion. Large scale infrastructure subcomponents (a new hospital and a new wastewater treatment plant) were included in the project. These were not a direct response to the emergency situation : no water treatment plant was damaged in the event and the hospital that did receive damage was reparable and was repaired by the government. Most of the delays occurred due to these subcomponents . 4. Achievement of Objectives (Efficacy): The objectives were substantially achieved, but with the following problems noted : 1. Two subcomponents under Component A were not completed : (i) Assessment of communications system for the Civil Protection Directorate was not completed (ii) Purchase of upgraded communications and information management systems. These subcomponents were not completed due to procurement problems and lack of consultants with this expertise . 2. The Social Infrastructure Component included the construction of a hospital, which had significant delays due to approvals needed by the Ministry of Health, and cost overruns . 3. The proposed water waste treatment plant was not built upon recognition that it would cost too much and take too long. The government has planned and budgeted to do this on its own, starting in 2006. 4. Only the first phase of a study for stabilization of a major reservoir was completed, because of procurement delays. 5. Efficiency (not applicable to DPLs): Because this was an ERL, economic and financial analyses were not done . However, the project did achieve cost savings over appraisal estimates for almost all components . The cost of construction was deemed to be 10% to 15% lower than similar investments in others parts of the country, due to the use of small and medium -sized local contractors and the availability of materials from factories close to the worksites . ERR )/Financial Rate of Return (FRR) a. If available, enter the Economic Rate of Return (ERR) FRR ) at appraisal and the re-estimated value at evaluation : re- Rate Available? Point Value Coverage/Scope*  Appraisal % % ICR estimate % % * Refers to percent of total project cost for which ERR/FRR was calculated. 6. Outcome: All of the housing, all of the schools and all of the health centers were completed . Other than the wastewater treatment plant and the stabilization of the reservoir, all the technical infrastructure was satisfactorily completed . So the first objective of restoring normal functioning of communities damaged by the earthquake has been satisfied . Five of the 7 subcomponents for the natural disaster preparedness subcomponents were completed, so the second objective of increase national preparedness for future disasters was mostly met as well. a. Outcome Rating : Satisfactory 7. Rationale for Risk to Development Outcome Rating: Most of the construction was done to higher seismic standards and capacity in earthquake monitoring and disaster management has increased.The awareness of disaster prevention and management for everyone from the central government to the population as a whole in Algeria is high . a. Risk to Development Outcome Rating : Negligible to Low 8. Assessment of Bank Performance: Including large construction projects (building of a new hospital, and a wastewater treatment plant ) in a short term emergency project was questionable . Although the project was approved in three months, it took an additional six months after Board approval for effectiveness to occur -- that is, 9 months before any money was available to assist the implementing agencies to recover from this emergency event . This is an indication that quality at entry had shortcomings . Also, procurement was problematic. Otherwise, the indications from the ICR show that Bank staff were responsive and supervision was satisfactory . at-Entry :Moderately Satisfactory a. Ensuring Quality -at- b. Quality of Supervision :Satisfactory c. Overall Bank Performance :Moderately Satisfactory 9. Assessment of Borrower Performance: The government was highly committed to the project and they were able to mobilize the resources needed for the project. There were minor problems with annual reports not being on time . The PCU was a bit weak. a. Government Performance :Satisfactory b. Implementing Agency Performance :Satisfactory c. Overall Borrower Performance :Satisfactory 10. M&E Design, Implementation, & Utilization: Indicators based on the components were developed but, as presented in the ICR, the indicators were not robustly documented. Monitoring during the project with weekly meetings and quarterly reporting appears to be adequate . Since it was an emergency operation, a monitoring and evaluation system to evaluate longer -term outcome was not developed. a. M&E Quality Rating : Modest 11. Other Issues (Safeguards, Fiduciary, Unintended Positive and Negative Impacts):  Relocation of affected persons was done well . Living conditions improved for those affected by the earthquake . 12. 12. Ratings : ICR IEG Review Reason for Disagreement /Comments Outcome : Satisfactory Satisfactory Risk to Development Negligible to Low Negligible to Low Outcome : Bank Performance : Satisfactory Moderately Quality at entry is rated "Moderately Satisfactory Satisfactory" due to the delays in disbursement, project design that was not fully consistent with with ERL guidelines for length of implementation, and the inclusion of subcomponents that were not wholly emergency in nature and contributed to the serious delays to which this project was subject. The current Harmonized ICR Guidelines developed by OPCS, IEG and the Regions stipulate that if a project is rated "Moderately Satisfactory" on either Entry or Supervision, then Overall Bank Performance has to be rated "Moderately Satisfactory." Borrower Performance : Satisfactory Satisfactory Quality of ICR : Satisfactory NOTES: NOTES - When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006. - The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate . 13. Lessons: 1. Large,complicated investment components should not be included in ERLs . In this case, the hospital and wastewater treatment plant added time, money and problems and were not directly related to the project objectives. Local authorities seized the opportunity to address long -standing problems through an emergency project. 2. Up-front training and effort should be put into procurement methods . This is a frequent problem in ERLs. 3. Leadership of the Wali (governor) ensures the effective implementation of an emergency project . 14. Assessment Recommended? Yes No Why? The housing component was done well and it would be good to check out whether the seismic construction code enforcement and other disaster prevention activities are sustainable . 15. Comments on Quality of ICR: The description of the outputs accomplished could have been more specific and descriptive . The language was very vague and it was hard to align the outputs described with the subcomponents listed in the original appraisal . No mention was made of the decision to reallocate a large share of the project funds from one component to another . There were no Borrower Comments. a.Quality of ICR Rating : Satisfactory