Public Disclosure Authorized The World Bank FOR OFFICIAL USE ONLY Report No. 6193 Public Disclosure Authorized PROJECT PERFORMANCE AUDIT REPORT Public Disclosure Authorized NICARAGUA EARTHQUAKE RECONSTRUCTION PROJECT (CREDIT 389-NI) NICARAGUA URBAN RECONSTRUCTION PROJECT (CREDIT 965-NI) May 14, 1986 Public Disclosure Authorized Operations Evaluation Department 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. THE WORLD BANK FOR OFFICIAL USE ONLY Washington. D.C. 20433 U.S.A. Office cof Dafcti-Genfal Opwatinns Evaltistn .Mav 14, 1986 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Performance Audit Report on Nicaragua - Earthquake Reconstruction Project (Credit 389-NI) and Nicaragua - Urban Reconstruction Project (Credit 965-NI) Attached, for information, is a copy of a report entitled "Project Performance Audit Report on Nicaragua - Earthquake Recon- struction Project (Credit 389-NI) and Nicaragua Urban Reconstruction Project (Credit 965-NI)" prepared by the Operations Evaluation Department. Attachment 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. FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT NICARAGUA EARTHQUAKE RECONSTRUCTION PROJECT (CREDIT 389-NI) NICARAGUA URBAN RECONSTRUCTION PROJECT (CREDIT 965-NI) TABLE OF CONTENTS Page No. Preface ***************************** Basic Data Sheet ...................................... ......... i Evaluation Summary .. ........ ***************************......... vi PROJECT PERFORMANCE AUDIT MEMORANDUM I* BACKGROUND ............................................. 1 II. EARTHQUAKE RECONSTRUCTION PROJECT ...................... 1 Project Design *****o******************* o*** 1 Project Cost and Financing ........................... 4 Implementation Schedule .............................. 6 Project Achievements ... o..o......................... 6 III. URBAN RECONSTRUCTION PROJECT ........................... 8 Project Design .............. O...........**0...... 8 Project Cost and Financing ........................... 9 Implementation Schedule ............................ 10 Project Achievements e.e......................... 10 IV. IMPLEMENTATION CONSTRAINTS ......... ... ... .. 11 V. URBAN SECTOR AND HOUSING ...................... 13 Overview ................................. oo....... 13 Earthquake Reconstruction Project .................... 15 Urban Reconstruction Project ......................... 17 Con1usions ****************************************** 19 APPENDIX I - Comments from the Borrower .......................... 20 This document has a restricted distribution and may be used by recipients only In the performance of their oflicial duties. Its contents may not otherwise be disclosed without World Bank authoriastAon. TABLE OF CONTENTS (continued) Page No. PROJECT COMPLETION REPORT: NICARAGUA EARTHOUAKE RECONSTRUCTION PROJECT (CREDIT 389-NI) A. Sites and Services Component ................................ 21 I. Introduction ..................................... 23 II. Project Background ................................... 24 III. Project Implementation ................................ 28 IV. Economic Performance .................................. 34 V. Government Performance ................................ 41 VI. Bank Performance ...................................... 44 VII. Conclusions *.*****************...................... 45 B. Industrial Component ....................................... 49 I. Introduction .............................. 0...... 51 II. The Industrial Component ............................. 52 III. Project Implementation and Impact .................... 55 IV. Lessons Learned ...................................... 59 C. Education Component .................................... 67 I. Background and Content of the Project ................ 69 II. Project Implementation ..................... 70 III. Project Cost and Financing ........................... 74 IV. Operating Outcomes ................................... 76 V. Conclusions and Recommendations ...................... 79 PROJECT COMPLETION REPORT: NICARAGUA URBAN RECONSTRUCTION PROJECT (CREDIT 965-NI) I* Introduction .............................. . 86 II. Urban Sector, Background and Objectives .............. 87 III. Project Preparation and Appraisal .................... 90 IV. Project Implementation ............................... 94 V. Institutional Development ............................ 100 VI. Conclusions .......................................... 102 MAPS: IBRD 14721R IBRD 16961 IBRD 16962 IBRD 16963 IBRD 16964 IBRD 16965 IBRD 16966 TABLE OF CONTENTS (continued) Page No. PROJECT PERFORMANCE AUDIT REPORT (Report No. 2289): (Please see Nicaragua Second Managua Water Supply Project separate (Loan 808-NI) and Water Supply Component of Table of Earthquake Reconstruction Project (Credit 389-NI) Contents) PROJECT PERFORMANCE AUDIT REPORT (Report No. 5144): (Please see Nicaragua Eighth Power and Earthquake separate Reconstruction (Part C) Projects (Loan 840-NI Table of and Credit 389-NI) Contents) - i - PROJECT PERFORMANCE AUDIT REPORT NICARAGUA EARTHOUAKE RECONSTRUCTION PROJECT (CREDIT 389-NI) NICARAGUA URBAN DEVELOPMENT PROJECT (CREDIT 965-NI) PREFACE This Project Performance Audit Report (PPAR) represents a perfor- mance audit o. two Nicaragua projects: the Earthquake Reconstruction Proj- ect, for which Credit 389-NI for US$20.0 million was approved on May 8, 1973; and the Irban Reconstruction Project, for which Credit 965-NI for US$22.0 million equivalent was approved on December 18, 1979. Both credits were fully disbursed, the first on March 7, 1980 and the second on October 1, 1984. The PPAR consists of the following: (a) separate Project Comple- tion Reports (PCRs) on the sites and services component (dated May 29, 1981), industries component (dated September 17, 1984) and education component (dated November 10, 1983) of the Earthquake Reconstruction Project; the combined PPAR1 / (including PCRs) for the Nicaragua Second Managua Water Supply ProjecF (Loan 808-NI) and water supply component of the Earthquake Reconstruction Project; the combined PPAR2 / (including PCRs) for the Nicaragua Eighth Power Project (Loan 840-NI) and the power component of the Earthquake Reconstruction Project; (b) a PCR on the Urban Reconstruction Project; and (c) a Project Performance Audit Memorandum (PPAM) prepared by the Operations Evaluation Department (OED). All the PCRs, including those covered under the earlier PPARs, were prepared by Staff of the Latin America and Carribean Regional Office. OED has reviewed the PCRs against the Appraisal and President's Reports, the legal documents and the transcripts of the Executive Directors' meetings which considered the projects. Project files and documents have also been reviewed and discussions have been held with Bank operational staff. Further, an OED mission had discussions witi officials of government departments in March 1985. Following standa d procedures, OED sent copies of the draft PPAR on the Earthquake Rehabilitation and Urban Reconstruction Projects to the government for comments. The comments received are reproduced as Appendix I to the PPAM. 1/ SecM78-897, dated December 11, 1978. 2/ SeeM84-611, dated July 5, 1984. PROJECT PERFORMANCE AUDIT BASIC DATA SHEET NICARAGUA: EARTHQUAKE RECONSTRUCTION PROJECT (CREDIT 389-I) KEY PROJECT DATA Appraisal Actual or Estimate current Estimate Total Project Cost (US$ million) 30.3 n.a. /a - Overrun (2) n.a. Credit Amount (US$ million) 20.0 20.0 - Disbursed 20.0 20.0 Date Physical Components Cotpleted 06/30/75 02/ /80 /b Proportion of Physical Components Completed by Original Completion Date (2) 100 u.a. Time Overrun (2) 0 280 Cumulative Estimated and Actual Disbursements (US$ million) Bank FTs: 773 73/74 74/75 75/76 76/77 77/78 78/79 79/80 (i)Appraisal 2.3 10.9 17.7 20.0 20.0 20.0 20.0 20.0 (ii) Actual - 2.4 7.6 12.6 18.2 19.6 19.9 20.0 (iii) Actual as % - 22 43 63 91 98 99 100 of Appraisal OTHER PROJECT DATA original Actual Date Date First Mention in Files 12/27/72 12/27/72 Government's Application Ol/ /73 01/ /73 Negotiations 14/18/73 04/18/73 Board Approval 05/08/73 05/08/? Credit Agreement 06/06/73 06/06/73 Effectiveness 08/07/73 08/07/73 Closing 06/30/76 09/30/79 Borrower Republic of Nicaragua Executing Agencies Banco de la Vivienda de Nicaragua (BVN) lustituto de Fomento Racional (INFORAC) Ministry of Education Empress Aguadora de Managua (AGUADORA) Empresa Nacional e Luz y Fuerza (ENALUF) Fiscal Year of Borrower January 1 - December 31 Follow-up Projects Second Education Project (Loan 1244-NI) Ninth Power Project (Loan 1402-NI) Third Managua Water Supply Project (Loan 1496-NI) Urban Reconstruction Project (Credit 965-*1) Agricultural and Industrial Rehabilitation Projoet (Loan 1785-Hi) Managua Water Supply Engineering Project (Loan 1983-NI) /aNot available. Refer to pars. 13 of PPAX. Appraisal/actual coar of three of the five Individual components were; sites and services, 13.0/15.1; education, 2.9/3.4; water0 approximately 2.7/3.0. b Date of physical completion of education component, the last of the five sector components completed. - lit - MISSION DATA /a month/ No. of Staff- Date of Mission Year Persons Weeks Report Sites and Services Component Identification/preparation 01/73 2 0.7 01/22/73 Appraisal 02/73 3 7.5. 04/20/73 Supervision 1 04/74 2 2 0&/18/74 Supervision 2 07/74 2 2 08/08/74 Supervision 3 10/74 2 1 11/26/74 Supervision 4 03/75 2 1 04/11/75 Supervision 5 06/75 3 1.5 04/21/75 Supervision 6 06/75 1 0.5 08/12/75 Supervision 7 10/75 2 1 10/23/75 Supervision 8 06/76 1 0.5 06/11/76 Supervision 9 02/77 2 1 03/02/77 Supervision 10 06/77 4 2 07/06/77 Completion 04/80 1 0.5 05/14/80 Completion 11/80 1 0.5 05/20/81 Subtotal 21.7 Education Component Identification/preparation 01/73 6 4.2 n#a. Appraisal/post appraisal 03/73 2 6.0 04/20/73 Supervision 1 06/73 1 0.5 07/21/73 Supervision 2 12/73 2 2.0 01/22/74 Supervision 3 11/74 2 1.4 12/13/74 Supervision 4 05/75 1 0.5 06/27/75 Supervision 5 08/76 2 2.0 10/12/76 Supervision 6 03/77 2 2.0 04/21/77 Supervision 7 04/77 1 0.3 07/07/77 Supervision 8 08/77 1 0.1 09/19/77 Completion 02/80 2 3.0 11/11/83 Subtotal 22.0 Water Supply Component Identification/appraisal 02/73 2 4 02/73 Supervision ) Not separately recorded Power Component Identification/appraisal 01/73 1 1 01/25/73 Supervision 1 10/73 2 3 10/29/73 Supervision 2 10/74 1 2 01/10/75 Supervision 3 02/75 2 3 03/24/75 Completion Not separately recorded CURRENCY EXCHANGE RATES Name of Currency (abbreviation): Nicaragua Cordoba (C$) 1973-1978 US$1 - C$ 7.00 C$1 - US$0.14 1979 US$1 - C$10.00 C$1 - US$0.10 /a Excluding data for industries component, which are unavailable. - iv - PROJECT PERFORMANCE AUDIT BASIC DATA SHEET NICARAGUA: URBAN RECONSTRUCTION PROJECT (CREDIT 965-NI) KEY PROJECT DATA Appraisal Actual or Estimate Current Estimate Total Project Cost (US$ million) 26.0 29.5 /a - Overrun (%) 13 Credit Amount (US$ million) 22.0 22.0 - Disbursed 22.0 22.0 Date Physical Components Completed 12/81 09/83 /b Proportion of Physical Components Completed by Original Completion Date (%) 100 86 Time Overrun (%) 88 Cumulative Estimated and Actual Disbursements (US$ million) Bank FYs: 79/80 80/81 81/82 (1) Appraisal 17.4 22.0 22.0 (ii) Actual 10.0 18.8 22.0 (iii) Actual as % of Appraisal 57 85 100 OTHER PROJECT DATA Original Actual Date Date First Mention in Files 08/ /79 08/ /79 Government's Application 08/ /79 08/ /79 Negotiations (completed) 11/14/79 11/14/79 Board Approval 12/18/79 12/18/79 Credit Agreement 01/04/80 01/04/80 Effectiveness 01/25/80 01/25/80 Closing 12/31/81 06/30/83 Borrower Republic of Nicaragua Executing Agencies Ministry of Housing and Human Settlements Special Development Fund Ministry of Transportation Fiscal Year of Borrower January 1 - December 31 Follow-up Project None /a There are important qualifications about the calculation of actual total project cost. Refer to para. 31 (footnote) of PPAM. /b Date of completion of the central workshop under the Managua oublic transport component (PPAM. paras. 29-32). - V - MISSION DATA month/ No. of Staff- Date of Mission Year Persons Weeks Report Identification ) Preparation ) 09/79 3 6 11/29/79 Appraisal ) Supervision 1 01/80 4 4 02/25/80 Supervision 2 04/80 2 2 05/14/80 Supervision 3 07/80 2 2 03/19/80 Supervision 4 09/80 3 3 10/20/80 Supervision 5 07/81 2 2 07/10/81 Supervision 6 08/81 1 1 03/19/82 Supervision 7 01/82 2 2 03/31/82 Supervision 8 06/82 1 1 08/11/82 Project Completion Report 08/82 3 4 06/24/83 Total 27 CURRENCY EXCHANGE RATES Name of Currency (abbreviation): Nicaragua Cordoba (CS) 1979-1982 US$1 = C$10.00 C$1 = US$0.10 - vi - PROJECT PERFORMANCE AUDIT REPORT NICARAGUA EARTHQUAKE RECONSTRUCTION PROJECT (CREDIT 389-NI) NICARAGUA URBAN RECONSTRUCTION PROJECT (CREDIT 965-NI) EVALUATION SUMMARY Introduction Both projects reviewed in this audit were formulated to provide relief from disasters, the first disaster the result of a natural event and the second, man-made. The disaster underlying the first project (Credit 389-NI) was an earthquake which, in lnte 1972 destroyed the center of the capital city, Managua, taking the life of some 16,000 people. The calamity leading to the second project (Credit 965-NI) was a civil war, which after heavy casualties in people and destruction of property, led to the 1979 change in government (PPAM, paras. 1-2). The two projects belong to a group of more than 40 operations by the Bank/IDA in support of disaster rehabilitation or reconstruction made to date. They are illustrative of special conditions which may prevail in a country during the rebuilding period and the need to design such projects accordingly. The first project was, to some extent, experimental, made at a time when the Bank/IDA had yet little experience with rehabilitation proj- ects. The second, following about four years later, incorporated lessons from its predecessor (PPAM, paras. 26 and 44). In the meantime, the Bank/IDA has reviewed most of its rehabilitation projects made since the early seventies and summarized the findings in the "Guidelines for Bank Participa- tion in Reconstruction Projects after Disasters" (hereafter referred to as "Guidelines"). 1 / While the Guidelines draw conclusions of a general nature, and in case of Credit 389-NI, analyzed only one of the five project compo- nents, this PPAR is specifically geared to recording the entire Nicaragua experience, covering of course all project components. The PPAR is exceptionally lengthy because of the Bank/IDA's admin- istration of Credit 389-NI. As there were five different project components, five Bank/IDA operational units were made responsible for its administration, and five PCRs were produced. In case of Credit 965-NI, Bank/IDA credit administration was simplified and therefore, only one PCR was delivered. The audit notes that there was no positive correlation between the degree of sectoral diversification in credit administration and project success and that one single PCR (Credit 965-NI) as adequately told the story as five PCRs 1/ Issued by the Water Supply and Urban Development Department in August 1984 (for staff use only). - vii - (Credit 389-NI) did. Delivery of the PCRs for Credit 389-NI matched the sluggish project implementation. They were produced over a period of six years, from 1978 to 1984, whereas the credit was closed in 1979. Delivery of the PCR for Credit 965-NI was as efficient as project implementation itself. The document was available in 1983, within less than one year after credit closing (1982). Objectives The two projects had similar objectives--the reconstitution of the economic and social life disrupted by the earthquake and the civil war, respectively. In both cases, reconstruction dealt exclusively with urban areas--Managua and secondary cities. Both in objectives and number of compo- nents, the Earthquake Reconstruction Project was more ambitious than the Urban Reconstruction Project. The first project, in particular, aimed at supporting the government objective, developed after the earthquake, of decentralizing urban development, while to the second project, this was at best a peripheral goal. Further, the first project had the formal objective of providing low-cost shelter for displaced low-income families, while the second project only indirectly concerned itself with housing needs (which, however, were also pressing). The essence of both lending operations was speed of project preparation and implementation, based on the recognition that time standards of regular development projects were inappropriate and emergency situations required less-than-normal reaction times and procedures (PPAM, paras. 3-11 and 26-29). The Earthquake Reconstruction Project had five distinct sectoral components, of which in financial terms, sites and services was the most important. This component was meant to provide permanent shelter for 6,400 families from among the some 300,000 refugees which (temporarily) fled from Managua in the immediate aftermath of the disaster. The other project compo- nents were industries (which included a credit program), education (construc- tion of schools), water supply and power. The Urban Reconstruction Project, after the experience with the earthquake project, did not provide direct financing for shelter and limited its support to municipal reconstruction (rehabilitation of community property), rehabilitation of small enterprises (largely a credit program) and rebuilding of Managua public transport (PPAM, paras. 5-11 and 27-29). Implementation Experience Implementation of the Earthquake Reconstruction Project, on the whole, suffered from various problems, which were not adequately or only slowly resolved. As a result, the scope of some components was reduced, the character of some components was changed, the cost of some components went up and the completion of some comronents was excessively delayed. While imple- mentation of this project faced various "technical" constraints which might have been expected under circumstances of a national calamity, the conclusion is inescapable that the Government lacked a serious commitment to execute the project in full accordance with the underlying objectives. The situation was quite the opposite under the Urban Reconstruction Project, where a new - viii - government did its utmost, and on the whole with success, to faithfully implement the spirit and letter of the project agreement (PPAM, paras. 12-25, 30-34 and 35-36). Results After the various implementation issues had been resolved, the Earthquake Reconstruction Project more or less achieved the physicak objec- tives of providing shelter, schools, industrial credit and water and power. However, it did so with considerable deviations from some of the original objectives which had earned it exceptionally high praise at the Board approv- al meeting. The design and administration of the shelter program, in the end, deprived many low-income people of the housing intended exclusively for them, their places taken up by higher-income groups. The decentralization objectives, underlying the design of the sites and services and industries components, were not achieved either or only badly, in part for lack of serious trying and in part, presumably, because the objectives were question- able from the start. There were other minor shortfalls in goal achieve- ments. These underachievements were upstaged by the excessive project delays which for a regular developmental project would have been disturbing, and in a post-disaster situation called the very nature of a rehabilitation project into question. Again, the Urban Reconstruction Project provided a counterpoint (PPAM, paras. 19-25, 32-36 and 42-50). Sustainability The accent of both projects, by their nature, was on replacement of lost property and capacity and less on the conditions which shape or deter- Tine the flow of benefits from the project investments and undertakings. Apparently, the sustainability of the project components is safeguarded only in part. Some tangible assets are still in use or operational (such as shelter and schools under Credit 389-NI, and municipal facilities under Credit 965-NI); about other components, little if any, information is avail- able (such as industries financed under 389-NI), and at least one component (Managua public transport under 965-NI) may have ended up with a shortened economic life because of the country's current political situation (which prevents adequate supply of spare parts) (PPAM, para. 34). Findings and Lessons The principles or conditions for successful rehabilitation proj- ects, contained in the "Guidelines", 2 / are, by and large, borne out by the experience from the two Nicaraguan projects, which were included in the operations analyzed as background material to the document. The "Guidelines" refer, among other points, to appropriate project preparation, which would be based on speedy damage assessment, to desirable project design features such as limits on the number and scope of reconstruction objectives, and to efficient implementation procedures, including close Bank supervision. The 2/ Guidelines, op. cit., page v. - ix - document implies that the Bank/IDA ordinarily can exert influence on most factors bearing on project success, but correctly points out that strong government commitment is another essential ingredient for success. The apparent lack of government commitment under the Earthquake Reconstruction Project is intriguing, as it not only raises questions about the reasons for the government's behavior and attitudes, but also about the Bank/IDA's actual reaction. Without being able to demonstrate that a force- ful Bank/IDA postu-e against the government's performance on project imple- mentation would actually have produced results, one is hard pressed to explain the lender's quiet tolerance of project slippage and transformation in a post-disaster period, which, one might have expected, should have commanded exceptionally high standards of project monitoring and intervention (PPAM, para. 40). Whenever the provision of very basic services to the politically, socially and economically disadvantaged is at risk, a special Bank/IDA effort would be to its credit, if not produce results. This could even have been true in the Bank/IDA's dealings with the Nicaraguan government. - 1 - PROJECT PERFORMANCE AUDIT MEMORANDUM NICARAGUA EARTHQUAKE RECONSTRUCTION PROJECT (CREDIT 389-NI) NICARAGUA URBAN RECONSTRUCTION PROJECT (CREDIT 965-NI) I. BACKGROUND 1. The two projects, the Earthquake Reconstruction Project financed under Credit 389-NI and the Urban Reconstruction Project financed under Credit 965-NI, were the Bank/IDA's contribution toward relief from disasters of national dimensions--the December 1972 earthquake and the civil war which led to the 1979 change in government. The earthquake, which struck the capital city, Managua, caused the loss of lives of some 16,000 people and injuries to some 20,000 others. It damaged about 80% of the city's total area of 33 square kilometers, completely destroying 14 square kilometers of the central area. Some 300,000 people of Managua's population of less than half a million people temporarily left the city, most of them taking refuge in secondary cities located within a 100-km radius. Total earthquake damage to physical assets was estimated at US$300 million. 2. The civil war, with its intense battles in 1978 and the first half of 1979, resulted in the loss of life of an estimated 35,000 people and the destruction of major parts of the downtown areas of four secondary cities (Esteli, Leon, Masaya and Matagalpa). Damage to physical structures and equipment and losses of inventories were estimated at about US$250 million. An even more serious legacy of the war was the widespread disruption of the national economy--capital flight from the country, insolvencies or illiquid- ities in commerce, industry and banking, and large-scale unemployment. Both disasters, the earthquake and the civil war, required a speedy reconstruction effort within a framework of national priorities and a realistic assessment of implementation constraints. II. EARTHQUAKE RECONSTRUCTION PROJECT Project Design 3. The project aimed at financing high priority items in the govern- ment's earthquake reconstruction program that was consistent with the report and the recommendations of an International Advisory Panel which reported to the Government within a few months after the earthquake. Designed to comple- ment relief and reconstruction efforts by the Interamerican Development Bank (IDB) and the United States Agency for International Development (USAID), the project had five distinct sectoral components: sites and services; indus- tries; education; water supply; and power. - 2 - 4. The major formal objectives of the project were to: (a) restore the remaining productive capacity in Managua to full opera- tion as quickly as possible; (b) alleviate unemployment and low-cost housing needs; (c) meet the reconstruction requirements in sectors of previous Bank assistance (water, power and secondary education); and (d) promote deconcentration and decentralization strategies for rede- velopment.1/ 5. The sites and services component comprised the provision of 5,500 serviced residential lots in Managua and four identified secondary cities (Masaya, Granada, Leon and Jinotepe), and another 400 lots whose location was not specified at appraisal. The replacement of destroyed or damaged housing in Managua by new housing in secondary cities was consistent with the Govern- ment's decentralization policies adopted shortly after the earthquake. This component further included a pilot program for self-help housing construction on 500 serviced lots in Managua to explore improved building techniques, com- munity facilities (primary schools, health and community centers and others) for all the project sites and implementation assistance (technical support and engineering services). 6. Housing provision, "at the earliest date possible", 2 / was intended exclusively for families dislocated by the earthquake, with-preference for those families seeking permanent residence in secondary cities or returning to work in surviving industries in the capital. Earthquake victims were supposed to be eligible for housing assistance if their household income was in a defined low range (of C400-1,100 per month), with about one-third of all the lots reserved for families with an income at the bottom end of the range (less than C500 per month). Although families with lower incomes could qualify in principle if they could demonstrate their ability to service the loans, the appraisal documents did not discuss how that might be possible, or if not, whether they could obtain shelter elsewhere (USAID was expected to supply 11,000 temporary wooden shelters). To initiate a long-term housing program for low-income families, the Government agreed under the project to establish a housing fund, which would use the mortgage loan repayments for financing of new housing loans to low-income families. The pilot program for housing construction was expected to demonstrate improved techniques for self-help construction which would, among other things, take better account of seismic activity. 7. The industries component had two items--industrial sites and services and the financing of industrial pr>jects (industrial credits). Industrial sites and services were expected to pave the way for the 1/ SAR, pages i and ii, paras. 1.04 and 2.21. 2/ SAR, para. 3.02. - 3 - relocation of medium-sized industries from Managua to secondary cities by stimulating a larger program of industrial zones in the ensuing five- to eight-year period. The secondary cities were selected on the basis that they had concrete development plans for industrial zones. To reinforce each other, sites and services for both housing and industries were planned to be located in close proximity (within walking distance) of each other. 8. About 30 industrial projects, including 20 related to earthquake damage, to be selected out of some 50 tentatively identified at appraisal, were to be financed under the project's industrial credits program. The appraisal noted that the program would be supportive of the Government's decentralization efforts, and that the industries financed would also be located close to sites and services (for housing). 9. The education component consisted of four temporary structures for general secondary schools, two permanent buildings for multilateral secondary schools and one permanent edifice for a technical institute, all located in the capital city. 3 / The four general secondary schools were expected to meet "immediate", and the other secondary schools and the technical insti- tute, "more long-run" educational needs. 4 / The appraisal noted the Govern- ment's intention to remove the temporary school structures and relocate them in rural areas as soon as they could be replaced by permanent buildings in Managua. One stated function of the two multilateral schools, which was unrelated to the earthquake, was the introduction of a new diversified cur- riculum, developed under the previous Education Project (Loan 532-NI), into all of Managua's public secondary schools. The technical institute did not replace damaged or destroyed school space and thus also had no direct rela- tionship with the earthquake itself, but it was included in the project to provide Bank support to fill a perceived gap in the Nicaraguan education system. Low-income groups, the main users of public education, were said to be the principal beneficiaries of the project's education component. 10. The wathr supply component had three major items--emergency repairs and rehabilitation of existing installations; procurement of equipment and materials for the repairs; and civil works previously included in the Second Water Supply Project (Loan 808-NI). The appraisal noted that some slum areas were not yet receiving potable water but that, under the project, the water utility would correct this situation. 11. The power component consisted of emergency repairs and rehabilita- tion of existing installations; extension of the distribution network; and various items in the power utility's 1973-74 investment program. Project financing of extensions to the distribution network was provided on the grounds that many households, small industries and commercial enterprises had 3/ The SAR's definition and discussion of the education component excluded the twelve primary schools which were listed under the sites and services component. 4/ SAR, para. 5.06. moved to the periphery of Managua after the earthquake. Financing of 1973-74 investments was offered to ease the utility's cash flow problems arising from its (temporary) loss of customers. Project Cost and Financing 12. The appraisal estimated total project cost at US$30.3 million, equivalent to about 10% of the assessed earthquake damage to physical assets. In financial terms, sites and services (housing) was designated as the most important component, which at US$13.0 million, accounted for over 40% of the total project cost. Total estimated cost for industries was US$5.0 million; for education, US$2.9 million; water, US$2.7 million; and power, US$6.7 million. Total foreign exchange cost was US$16.6 million, about 55% of total project cost. Expected sources of financing were the IDA credit of US$20.0 million, contributions by the Government and public sector agencies of about US$8.0 million and by the beneficiaries of the industrial credit subproject of about US$1.2 million. Part of the proceeds from the credit was earmarked for the financing of local cost incurred by the water utility, whose finances in the aftermath of the earthquake were precarious. The Government's contribution was mostly in the form of land, community faci- lities and infrastructure. 13. The actual total project cost cannot be reported, as the actual costs of two project components have not been fully accounted for: Parts of the expenditures for the power component are unavailable, and the definition and description of the industries component (credit program) was not geared to the tracking of cost. The actual total costs of the other components were established. However, the comparison between appraised and actual cost of the sites and services and the education components is complicated because of substantial changes in scope during implementation. Details are provided below (PPAM, paras. 14-18). The data suggest that the project's overall cost performance was satisfactory only in part. 14. The PCR for the sites and services component reports actual cost of US$15.1 million as compared to US$13.0 million projected at appraisal, which seems to imply a cost overrun of about 16%.5/ However, there was a signifi- cant reduction in project scope, as only about 4,3006/ rather than 6,400 families were housed and 22 rather than 48 items of community facilities (elementary schools, health clinics, community centers and markets) were built. At appraisal, the average per family cost of sites and services was projected as being of the order of US$2,000. The actual unit cost was US$3,500. This leads to the conclusion that if project definitions and scopes are applied, which are identical for appraisal and completion, the actual cost exceeded the projected cost by about 75%. 5/ The PCR erroneously reports US$13.6 million appraisal cost. 6/ The 4,300 total of housing units actually completed (instead of the 5,400 reported in the PCR), reflects the "twinning" process whereby many lots were allocated in pairs to form a single, larger house for a higher income family (PPAM, paras. 49-50). - 5 - 15. The PCR for the industries component reports that the IDA credit helped finance industrial projects with total cost of US$21.6 million as com- pared to US$5.0 million projected at appraisal. The cost difference is largely, if not entirely, explained by an increase in the volume of invest- ments supported under the project, matched by a reduction in the percentage of investment cost financed by IDA, and not necessarily by an increase in unit cost. At appraisal, it was assumed that the IDA funds would finance about 50% of expenditure of industrial projects selected. The actual share was about 10%. In all likelihood, there was little match between the indus- trial projects under consideration at appraisal and those actually financed by the IDA Credit. For these reasons, an evaluation of the cost performance of the industrial projects financed by the industrial credit program has little meaning. The actual cost of industrial sites and services, the other item under the industries component, was apparently of the order of the cost projected at appraisal, US$0.3 million. 16. The actual cost of the education component, as established in the PCR,7/ was US$3.4 million as compared to the US$2.9 million estimated at appraisal. 8 / Once more, the accounting for actual cost and the analysis of cost perfoFmance has to be tailored to changes in project scope. Of the two proposed multilateral secondary schools, only one was built, although its capacity was increased by about 40%. On this basis, the increase in actual cost over projected cost, calculated for identical project definitions, is of the order of 50%. 17. The actual and appraised cost of the water supply component, by the account of the Project Performance Audit Report (PPAR) for Loan 808-NI (Second Managua Water Supply Project) and Credit 389-NI (Water Supply Compo- nent of Earthquake Reconstruction Project),i/ were identical with about US$3.0 each. 10 / The PPAR reports that all items under this component were implemented. 18. The actual costs of the power component have not been adequately established, according to the PPAR for Loan 840-NI (Eighth Power Project) and Credit 389-NI (power component of Earthquake Reconstruction Project). 1 1 / The executing agency neither recorded the local cost nor prepared project Tmple- mentation reports, and so whether the component was implemented in full com- pliance with the project description, has not been determined. 7/ PCR, para. 3.01. 8/ The PCR erroneously refers to US$3.02 million of appraised cost. 9/ SecM78-897, December 11, 1978; para. 3.17 of the PCR. 10/ As in the case of the project's other components, the post-evaluation reported the appraised component's cost as being different from those given in either the SAR or the President's Report. 11/ SecM84-61, July 5, 1984; para. 3.2.1 of the PCR. -6- Implementation Schedule 19. In view of its emergency nature, the project was expected to be completed by about end-1975, only within two and one-half years after the earthquake, and quick credit disbursement, a project feature highly acclaimed at the Board approval meeting, was supposed to be equally impressive. Despite its complexity, scope and the number of implementation stages, the sites and services component was estimated to need only two years to be completed, a period evidently deemed consistent with the urgency of the shelter program. The projected implementation period for the industries com- ponent was about one and a half years. For the education component, the period was two years; for water, it was two and a half years; and for power, as indicated by the disbursement schedule, no more than about one and a half years. 20. Actual project implementation took considerably longer than planned and more than wiped out time savings realized through IDA's efficient pre- Board credit processing. The sites and services component, notwithstanding the reduction in scope, suffered a time overrun of about two years. The industries component was delayed by some one and one-half years. Completion of school construction under the education component was about two and one- half years late, and the entire education component, about five years behind schedule. The water component was completed almost two and one-half years late. The actual implementation time for the power component is uncertain, as is the component's actual cost. Without firm information, the PPAR1 2 / estimated the actual completion period at one and one-half years, which woTd have been the same as that projected, but it also noted that credit disburse- ment took seven, rather than two, years as projected-an indication that implementation may have lasted well beyond the PPAR's estimate. The project delays, of course, completely undermined the original disbursement schedule. Project Achievements 21. The project produced mixed results. All (physical) components were implemented. However, as noted above, the project suffered from major time overruns in implementation, which severely curtailed its relevance as an emergency operation aimed at repairing damage following a national disaster, it had significant reductions in scope, and its "social character", which a Board member acknowledged with great satisfaction at the approval meeting, was partly lost. The project also made questionable contributions to two of its formal main objectives, alleviation of unemployment and promotion of deconcentration and decentralization strategies. The impact on employment has not been adequately demonstrated, as monitoring was weak, and the impact 12/ Page iv and para. 3.2.1 of the PCR. - 7 - on deconcentration and decentralization was minor, if not negative. 1 3/ However, as the support for deconcentration/decentralization policies was ill-advised, as discussed hereafter (PPAM, paras. 45-46), the weak project impact was ultimately inconsequential, if not beneficial. 22. The sites and services component provided housing for only about 67% of the expected number of families (PPAM, paras. 14 and 50).14/ The original target groups, low-income families displaced by the eaFt-hquake, found themselves competing with others who, by virtue of their higher incomes, did not meet the original selection criteria (PPAM, para. 50).15/ Guidance on improved techniques for self-help construction was provided. Te housing fund, a device to replicate sites and services, was (in 1981) reported to have suffered from a serious shortfall in mortgage repayments and thus encountered difficulties to fund new housing loans. 16/ 23. The industries component had mixed achievements. Industrial financing was successful in stimulating business investment. However, it was not administered with the discipline necessary to ensure that only industries locating outside Managua would benefit, thus undercutting the original objec- tive of directing economic activity away from the capital city. 1 7 / Indus- trial sites and services also had little to contribute to the decon,-centration effort, as implementation went poorly, 1 8 / and the limited scope of this component anyhow could have offered lft?le more than symbolic support to policies of industrial deconcentration and development.1 9 / The intended close spatial integration between sites and services (housing) and the indus- tries component was not attained. 24. The education component came close to providing the physical school capacity specified at appraisal, except that not all delivery dates were met. The four temporary schools were built on time. However, because of their engineering, they cannot be dismantled and relocated to rural sites as stipulated under the project. The multilateral secondary school was not 13/ The PCR for Credit 965-NI, para. 4, suggests that the earthquake reha- bilitation effort had the unintended effect of concentrating investments in Managua. 14/ SAR, para. 3.02. 15/ Refer also to "Guidelines", op. cit. 16/ PCR, paras. 5.10-5.11. 17/ PCR, para. 3.06. 18/ PCR, para. 4.03. 19/ It is -ven questionable whether industrial financing, which was much wider in scope, could have had a noticeable impact on the capital's endowment with productive capacity. - 8 - built on time, being only fully operational from 1978 on. Construction of the technical institute was also delayed, and the planned introduction of diversified curricula into all of Managua's public secondary schools did not take place, but in the context of the earthquake, this hardly did matter as neither the institute nor the curricula had a direct bearing on reconstruc- tion needs. 25. The water supply component accomplished, with delays, the restora- tion of water supply and supported execution of works for which previously financing under Loan 808-NI was arranged. The provision of piped water to some slum areas appears to have been achieved. 2 0 / The performance of the power component was reported as having been imilar to that of water supply .21/ III. URBAN RECONSTRUCTION PROJECT Project Design 26. The pr,,ject was conceived as the Bank Group's contribution to a coordinated effort of dealing with the economic after-effects of the civil war. Its broad objectives were assistance in rehabilitating war-damaged cities, establishing an institutional basis for reconstruction and develop- ment, and producing a rapid impact on employment and the transfer of foreign resources. Against the background of the extremely lggard implementation under the earlier Earthquake Reconstruction Project, particular attention was paid in the Urban Reconstruction Project to features that would facilitate speedy project execution. These ranged from the less expected, such as excluding from the project components requiring land acquisition, to the more obvious, such as adaptation of project components to the implementation capa- city of the executing agencies. 2Z/ Thus, not only was project design well conceived for what it incorporatW, but also for what it excluded. Signifi- cantly, the project did not include a shelter/housing component, which, because of its complexity, was considered unsuitable for a Bank-financed emergency operation. 23/ 20/ The record given in the PPAR (for the Nicaragua Second Managua Water Supply Project and water supply component of the Earthquake Reconstruc- tion Project) is not entirely clear. 21/ Para. 18, PPAM of the PPAR (for the Nicaragua Eighth Power Project and the power component of the Earthquake Reconstruction Project). 22/ President's Report, para. 44. 23/ PCR, para. 44. The government, however, undertook large-scale housing repairs on its own in the cities covered by the Urban Reconstruction Project. For a more detailed discussion of the issue of a shelter/ housing component, refer to Chapter V of the PPAM. - 9 - 27. The project had three components--municipal reconstruction, rehabi - litation of small enterprises and Managua public transport rehabilitatiou. The municipal reconstruction component consisted of emergency civil works ani replacement of municipal vehicles and equipment in the six most severely damaged secondary cities. The civil works included improvements to streets, water supply, drainage and flood control, wholesale and retail markets, and buildings for storage of municipal vehicles and equipment. All items addressed only minimum requirements for first-stage repairs or restoration of urban services. 28. The rehabilitation of small enterprises component arranged credit and technical assistance for the rehabilitation, expansion and development of small firms. The component's definition included micro-enterprises (one- person or one-family operations), cooperatives and similar forms of enter- prises, many located in "marginal" barrios 2 4 / and ordinarily without access to commercial credit and technical assistaie. Focus on small rather than medium-sized or large productive units was justified in the appraisal by their employment generating effect and geographic dispersion, which could be tapped for a more balanced regional development of the country. 29. The Managua public transport component was to fulfill the minimum requirements for rehabilitating the capital city's public transport, which had been devastated by the war. The component included the purchase of buses and vehicle spare parts, provision for bus maintenance, improvement (to 28 km) of bus transit routes and technical assistance for improving bus opera- tions. All procurement was earmarked for a new public and semi-autonomous transport company with independent commercial management, which the Govern- ment was in the process of setting up at the time of appraisal. At the same time, the Government let it be known that it would permit private operators to continue to operate public transport services in the future. Project Cost and Financing 30. Total project cost was estimated at appraisal to be US$26.0 million, of which US$8.0 million was destined for municipal reconstruction, US$4.0 for rehabilitation of small enterprises, and US$14.0 million for Managua transport rehabilitation. The IDA credit contributed US$22.0 million toward the project financing, with government counterpart funds financing the balance. 31. Actual project costs (as per the appraisal design) were US$28.0 million, implying an overrun of about 7%. However, two items under the municipal reconstruction component were increased in scope (at an additional cost of US$1.5 million), and thus, the actual total cost of the modified/ expanded project was US$29.5 million. The actual cost for municipal recon- struction was US$10.0 million without (and $11.5 million with) additions, as compared to US$8.0 million appraised. The actual cost for rehabilitation of 24/ A barrio is a low income neighborhood. - 10 - small enterprises was US$4.5 million, against US$4.0 million appraised, 2 5 / and for Managua transport rehabilitation, it was US$13.0 million, against iWe US$14.0 million appraised. The project performed reasonably well, on balance, in meeting the appraisal cost target. Implement-stion Schedule 32. Implementation of all project components was projected at appraisal to take two years only. Actual Implementation of the municipal reconstruc- tion and rehabilitation of small enterprises components remained within that time frame. Implementation of the Managua public transport component exceed- ed that schedule by almost two years because of a combination of delays in the procurement of various components for the central workshop, where major repairs for the bus fleet are performed. The buses, the principal item under the public transport component, were delivered on time. Project Achievements 33. The project achieved its broad objectives of rehabilitating war- damaged cities and establishing an institutional basis for reconstruction and development. Though it had no formal institutional component, substantial institution building reportedly took place. 2 6 / Implementation of the muni- cipal reconstruction component relied, wher;-appropriate, on labor intensive techniques, to tap the project's potential for rapid generation of employ- ment. The reactivation of businesses through rehabilitation of small enter- prises is also believed to have had the desired employment effect though the quantitative results have not been documented. About two-thirds of the small business loans were granted to enterprises outside Managua in accordance with the objective of supporting regional development. 34. The project succeeded in rebuilding Managua public transport, which toward the end of the civil war, suffering from a near total loss of vehicles and equipment, had virtually ceased to function. Institutional development of the public bus company has made progress, and private bus operators have stayed in business, assisted by loans (in the aggregate amount of US$1.0 25/ Tracing the total cost of this credit program faces conceptual problems similar to those referred to under the industries component for Credit 389-NI (PPAM, para. 15). Strictly, the US$4.0 million total cost reported in the appraisal and the US$4.5 million total cost reported in the PCR represent only the cost financed by IDA and the local credit institutions, not counting cost incurred by the investors (small enter- prises). Further, reporting the cost of a defined project component is only meaningful to the extent that the definition does not or not sub- stantially change (a change occurred at least through the inclusion of bus cooperatives in the credit program during implementation). Only with these limitations in mind does the audit report on the cost perfor- mance of the rehabilitation of small enterprises component. 26/ PCR, para. 40. - 11 - million) under the project's small scale enterprise rehabilitation compo- nent. The longer term prospects for Managua's public transport are clouded. Lacking foreign exchange for the procurement of vehicle spare parts, manage- ment of the public transport company has been forced to idle a large number of otherwise serviceable buses that were financed under the project. IV. IMPLEMENTATION CONSTRAINTS 35. The PCRs for the Earthquake Reconstruction Project give various reasons for slow project execution, one of the main implementation issues. The majority of these reasons are of a technical nature. Sites and services was reported as having suffered from institutional shortcomings of the imple- menting and supporting agencies, delays in land acquisition, slow service by public utilities and slow IDA responses to approval requests. 2 7/ The indus- tries component proceeded at an unsatisfactory pace, by the-PCR's account, again because of institutional problems, which in the case of industrial sites and services were compounded by a lack of project preparation at the time of appraisal, delays in land acquisition and late design approval. The PCR also noted a lack of sense of urgency on the part of the responsible authorities. 2 8 / The PCR for the education component referred to institu- tional inade Fuacies, lack of interagency coordination, overoptimistic assess- ment of the Government's implementation capacity, 2 9 / and it blamed the less than satisfactory implementation, the only PCR to do so, on "the economic difficulties and socio-economic problems" after the December 1972 earth- quake.30/ In the judgement of the PPARs for the water supply and p6wer components, implementation delays were the result of late deliveries of materials and equipment, limited availability of qualified workers and materials in the immediate post-earthquake period and world inflation, which required arranging for additional project funding. 3 1/ 27/ PCR, paras. 3.01 and 3.05. The PCR noted that the reasons for delayed land acquisition were not entirely clear. 28/ PCR, paras. 3.01, 3.09, 3.11 and 4.01-4.04. 29/ PCR, paras. 2.01-2.02. 30/ PCR, para. 2.01. This was not only a reference to the earthquake itself, but also to the civil war. Clearly, if the project had been completed sooner, in accordance with the original schedule, it would have been finished before the civil war had heated up. 31/ PPAR for water supply component, paras. 3.09-3.10 of PCR; PPAR for power component, page vi (Highlights) of PPAM. Other factors, listed in the PPAM for the power component, para. 7, and primarily referring to Loan 840-NI, may also have influenced the earthquake rehabilitation. - 12 - 36. As the Bank/IDA more recently has come to realize, emergency situa- tions are particularly prone to creating obstacles for efficient project implementation. A Bank/IDA staff memorandum, for example, noted that "many institutions in developing countries are barely equipped to handle day-to-day tasks... and following a disaster, they find themselves overwhelmed by the 32 demands made upon them...." / Institutional shortcomings prior and after the earthquake, the temporaNy shortage of resources following the disaster and, in fact, the entire list of above-mentioned technical obstacles (PPAM, para. 35) were factors contributing to the project's delayed implementation. But for a full explanation of the delays, in the audit's view, reference must be made to the serious lack of government commitment to execute all project components adequately and expeditiously. Such a lack of commitment was par- ticularly relevant to the totally inadequate supply of housing and schools for low income disaster victims who were supposed to have been the main proj- ect beneficiaries. In the a-.dit's view, there can be little doubt that the Government could have made progress more quickly on shelter and education had it genuinely considered them to be a national priority. A similar assessment had already been reached in mid-1974, when the Bank-seconded resident engi- neer, stationed in Nicaragua to expedite project implementation, advised IDA that he had come "to doubt seriously the existence of a commitment on the 3 3/ As early as during project prepara- part of the Nicaraguan Government". tion, an IDA mission seems to have had a hunch about the future performance of the Government, when in discussions with the Nicaraguan President, it raised the issues of land availability and implementation capacity (in refer- ence to sites and services). In his reply at the time, the President gave assurances that land would not be an issue and that he was especially enthu- 34 siastic about sites and services in secondary cities. / 37. Lack of government commitment to all project components posed a problem, which IDA, according to available information, largely handled in a "business-as-usual" manner. In July 1973, it stationed a resident engineer (referred to in PPAM, para. 36) in Managua, but terminated his assignment in August 1974, well before implementation was under control and even well before the original completion date had been reached. No special effort of this or similar kind was made thereafter to put the project again on the fast track on which it was supposed to run, and the audit has been unable to determine the reasons for this omission. Supervision reports and mission follow-up letters to Government were drafted in low-key Bank/IDA languiage, revealing little more than ordinary concerns. Shortly before his departure from Managua, a letter to be sent by IDA to the Nicaraguan President was drafted by the resident engineer which was to have made "it clear to the Nicaraguan Government that continuation of the present situation is not 32/ Memorandum, dated October 28, 1981, written in the context of the Fall 1981 Project Implementation Review by the Latin America and the Carribean Regional Office. 33/ Memo, April 1, 1974. 34/ Memorandum by Bank/IDA staff, dated January 22, 1973. - 13 - acceptable to IDA". 3 5 / However, according to IDA records, no such letter, containing a criticar analysis of the sorry state of project implementation, was actually sent. 38. The executive summary of the Reconstruction Guidelines lists nine conditions which constitute "effective" reconstruction projects, eight of them being controlled by the Bank/IDA through its normal involvement in project design and administration. The ninth condition is "strong commitment to reconstruction by the Government. 3 6 / Credit 389-NI underscores that such a commitment is indeed an essential Igredient of reconstruction projects (if not other project types). 39. The Urban Reconstruction Project faced all implementation con- straints resulting from the political, institutional and economic changes brought about by a civil war. If anything, the constraints were even more imposing than those under the Earthquake Reconstruction Project. The President's Report (for Credit 965-NI) noted that the project had been formu- lated and would be implemented under unusual circumstances--the institutions responsible for implementation had undergone major restructuring, and the country environment was highly uncertain. To deal with these and other factors potentially bearing on project success, several safeguards were built into the project. 3 7 / One safeguard (against poor institutional perfor- mance), for exampfe, was the creation of a technical unit within the agency which carried the main implementation responsibility for the project. Another safeguard (against selection of low-priority or non-performing reha- bilitation works) was to keep the selection of municipal reconstruction subprojects flexible, something which was made possible through the identifi- cation of more subprojects than could be funded. A third safeguard (against lack of implementation capacity) was the design of the municipal component for implementation by force account, to lessen dependence on the private sector which was not expected to have fully recovered from the war at the time of reconstruction. All these and other safeguards, which were fairly basic procedures with applicability in ordinary lending operations, can be assumed to have enhanced the efficiency of project implementation. However, what made the project such an overall success was strong government commit- ment, which was sorely missing under the Earthquake Reconstruction Project. V. URBAN SECTOR AND HOUSING Overview 0. Even though both projects were ostensibly designed to aid recon- structtin, their concepts and, more important, their effects were quite different. The Earthquake Reconstruction Project had shelter in the form of 35/ Memorandum, dated April 1, 1974. 36/ Reconstruction Guidelines, pages v and vi. 37/ President's Report, para. 79. - 14 - sites and services as its principal component. This was only the second time that the Bank/IDA had supported this approach. The Urban Reconstruction Project did not make any direct provision for shelter. It concentrated instead on the direct replacement of key urban infrastructure and equipment that had been damaged or destroyed during the war, and on financing the res- toration of small businesses. These components made up an overall strategy whose aim was to reactivate the war ravaged urban economies of Nicaragua. In spite of the lack of direct financial provision for housing (which was also destroyed la the war, especially in low income areas), the self-help effort that it stimulated, in fact, led to more low income houses being provided than were achieved by the Earthquake Reconstruction Project. 41. The differences in project concept and design partly reflect evolv- ing Bank/IDA priorities for lending to the urban sector over the years spanned by the two projects. In this respect, the Earthquake Reconstruction Project was in fact a prototype for the sites and seriices approach that was to characterize Bank/IDA supported urban projects for over a decade. The Urban Reconstruction Project, although appraised over five years ago, comes closer to current Bank/IDA urban sector thinking which emphasizes the contri- bution that urban sector projects can make to general economic development. The intervening years also saw the increased application by Bank/IDA in its work of large scale multi-sector integrated urban development projects, an approach which Bank/IDA thus far has not applied in Nicaragua. 42. Credit 965-NI helped consolidate efficient and equitable urban development, whereas Credit 389-NI performed rather poorly in this respect. Part of the explanation is due to the fact that the earlier project sought to make itself a vehicle for the introduction of new housing and spatial poli- cies (of which the Bank/IDA had then only limited experience), whereas the later project concentrated on restoration, without a policy overlay, of what was destroyed. However, the contrasting performance is attributable to more than just variations in design, but also to differences between the two cases in the political priorities of Government (and the consequential placement of commitments) and the degree of effectiveness of the administrative machinery prevailing at the time of project implementation. The Earthquake Rehabilita- tion Project was not only executed with little government support for its "priority" for low income beneficiaries, but also amid skepticism about the low (housing) standards implied by such an approach. 3 8 / The middle to high income houses built on many of the project's lots inte5iRed for the urban poor remain as a reminder of the disdain shown for the project's goals at that time (PPAM, paras. 47-50). The aims of the later Urban Reconstruction Project, however, encountered a quite different set of government priorities which were more in tune with the Bank/IDA's own objectives. These favored low income groups and the progressive solution of the shelter and other problems that they confront in the urban areas of Nicaragua. In fact, the "urbanizacion progresiva" approach, by which low income families may settle on subdivided land on the understanding that it will be serviced as and when they improve their own dwellings, has become the de facto low income housing policy of Nicaragua. 38/ PCR for Earthquake Reconstruction Project, para. 5.03. - 15 - Earthquake Reconstruction Project 43. To deal with the housing emergency arising in the aftermath of the earthquake, the project relied on the sites and services approach. At the time of appraisal (1973), the Bank/IDA had had little experience with this kind of component, although it is recognized now that such projects do not make appropriate instruments for emergency intervention since they take such a long time to consolidate. The inappropriateness of such a project design for an emergency can be illustrated by asking what were the housing needs following the catastrophic events in Managua after the 1972 earthquake, one of the worst in the history of Latin America. 44. The earthquake that struck Managua completely destroyed 45% of the city 's housing stock. For the survivors who had lost their homes, their emergency housing requirement was to find shelter immediately. The audit mission was informed that largely on their own account, the majority of the 300,000 people who had to leave the city sought accommodation with relatives and friends in nearby secondary cities. A small fortunate minority was allo- cated a site and service lot under the project, but beneficiaries had to wait up to four years for delivery of the lot. Even if the project had been expe- ditiously implemented in accordance with the original timetable, its design would not have allowed it to answer these people's emergency needs, namely shelter immediately. The emergency in the aftermath of the earthquake was an unfortunate time to test 3 9 / an untried technique, when what was needed was the rapid application of-proven methods. 45. As a "regular" urban development project, with its emergency role superceded, its impact was considerably reduced by the fact that components were located in the wrong place, namely in the secondary cities when most of the demand for housing was in Managua, the city destroyed by the earthquake. Although the aftermath of the 1972 earthquake saw massive population move- ments which seemingly signalled a radical restructuring of Nicaragua's set- tlement pattern (giving greater importance to the secondary towns), these changes were only temporary. Within three months of the catastrophy, some 100,000 refugees (one-third of those who had fled Managua) had already returned to the nation's principal city and economic center, whose major infrastructure and industrial plant had been largely spared from destruc- tion.40/ The only major permanent spatial restructuring which has since taken-place, has been within the city of Managua itself, where the old city center location over fault lines has been abandoned in favor of lower density urban development on safer locations on the periphery. The project, however, (in tune with government thinking then) interpreted the refugee movements and the supposedly higher risk of building in Managua as a sign that the decen- tralization of population from the city to Nicaragua's secondary towns should be a permanent feature of the nation's spatial planning. The project sup- 39/ According to the PCR, para. 2.06(c), "to test the sites and services component in Nicaragua" was one of the project objectives. 40/ PCR for Earthquake Reconstruction Project, para. 1.03. - 16 - ported decentralization despite the fact that the drift of the refugee popu- lation back to Managua had already begun by the time of appraisal. 46. The Earthquake Rehabilitation Project explicitly endorsed the new policy of decentralization by proposing to locate 60% of the shelter invest- ments in the secondary cities even though the earthquake damage had occurred almost exclusively in Managua. While it is not within the scope of this audit to assess Nicaragua's regional planning needs, one might well ask whether such a small country (population about 3 million) could afford, on top of the devastation that had already occurred, a further dismemberment of its only urban center providing economies of scale capable of sustaining internationally competitive economic activities. This is an especially relevant question to ask since, as the audit mission was informed, it is possible to reduce the risks of another earthquake in Managua by building sounder structures at dispersed locations yet within the urban area itself. 47. As subsequent events were to demonstrate, the decentralization policy was not only ineffective, but its failure actually prejudiced the performance of the project itself. It meant, for example, a weakened demand for the completed sites and services in some of the less dynamic secondary cities by the intended low income beneficiaries. The weaker demand in the case of Granada (population 30,000), where about 1,000 sites and services lots were built, was at least partly responsible for the allocation of the lots in pairs to higher income families. 4 1 / Upon receiving the lots, higher income residents (who included lawyers and accountants) would start building to join the two core units together in order to construct a quite substantial dwelling. Examples of houses visited by the audit mission were of 110 squarp-meter built area on 220 square-meter lots. In the case of Granada, practically all the about 1,000 project lots of this largest scheme outside Managua were allocated in pairs in this way. However, the twinning of lots was not confined to Granada. Site inspection in Masaya suggested that perhaps half of the lots were thus allocated. There were also twin plot allocations in Managua, though one might infer that this was due to abuses of beneficiary selection procedures, rather than the shortage of demand for low cost single lot housing. 48. With rising inflation, the constant local currency value of the mortgage repayments since 1977 implies an ever increasing subsidy to all residents who are paying well below the market price for their houses. The subsidy not only ensures that high income house buyers spend a very small proportion of their income on housing (perhaps less than 5% in some cases), but it also has a regressive effect upon income distribution. The audit mission was informed that monthly repayments for a single house were in the 41/ The proposed increase in Granada's housing steck was enough to house a 20% increase in the population of the town whose growth rate had been below the national average of 2.8% p.a. in contrast to Managua's growth of 7.0% p.a. - 17 - US$5-10 range. 4 2 / Even if the high income residents were to make repayments at a more appr3riate level, the IDA project would still have been an uneco- nomic way of providing middle class housing, involving as it did the assign- ment of two water mains and two sewerage connections to each house, plus the costly administrative complexities regarding ownership titles and repayments schedules of these twin properties. If the original intention had been to house higher income families, then it could have been done more rationally, and also the lots could have been sold at market prices to at least recover the costs incurred by the public sector. 49. The allocation of many site and service lots in pairs to high income families sharply curtailed the project's physical and unit cost achievements. This is not brought out in the PCR (for sites and services) which might give the erroneous impression that the physical shortfall of the component was of the order of only 15%, since about 5,400 "units"of the 6,400 intended at appraisal had been built. 4 3 / Such a conclusion would be incor- rect, however, since it would imply ti-eting each "unit" as if it were synon- ymous with a house, whereas in fact it proved necessary to combine two such "units" in order to house each higher income family. 4 4 / Relating project cost to the number of families housed rather than "runits" built is, of course, the more appropriate approach to measuring the real level of the project's achievements. 50. From visual inspection and discussions with officials, the audit mission estimates that just under one-half of the lots were allocated in pairs. Assuming that, in fact, 40% of the lots were allocated in this way to high income families, would imply that the project would have supplied about 1,100 (2,200/2) homes for such families. The remaining 60% of the lots would have supplied about 3,200 homes for 3,200 lower income families, thereby making for a total of 4,300 beneficiary families. This would represent a shortfall of 33% of the 6,400 families that the project originally intended to house, instead of the 15% figure implied by the PCR. Mbreover, the appraisal target was that all 6,400 were to be low income families, whereas the project at most probably only houses half that number (3,200 out of 6,400). Urban Reconstruction Project 51. The prolonged civil war in Nicaragua (1978-79) inflicted heavy damage particularly upon the country's secondary cities which were in the front line of military action. This was in contrast to the incidence of the 42/ The difference from the PCR's figures, Table 7, must be due to the successive devaluations of the national currency of Nicaragua. 43/ PCR, para. 3.13. 44/ For this reason, the audit considers that the PCR's analyses of the project's physical accomplishments, its "unit" costs and monthly pay- ments can lead to unduly optimistic conclusions about project perfor- mance. PCR, paras. 3.13 and 3.16 and Tables 3, 5 and 7. - 18 - 1972 earthquake destruction which was largely confined to Managua. Learning from the experience of the difficulties encountered during the previous project (and also of a similar reconstruction effort in Guatemala 4 5/), the design of the Urban Reconstruction Project was radically different-and con- centrated instead on the replacement of key items of infrastructure and services in situ, seeing this approach as the best way of reactivating war damaged urban economies. Also, instead of taking housing as its principal component, the project was concentrated on infrastructure and equipment (such as municipal markets, street grading and lighting and vehicles and mainte- nance facilities for the Managua bus fleet) that could be more readily and rapidly replaced. The purpose of their replacement, which in the secondary towns was referred to as "municipal reconstruction", was to reactivate the urban economies and thereby help generate personal income. It would then be up to the beneficiaries to decide how to apply it, whether in housing or in some other expenditure. Perhaps the most significant measure of the success of this approach is the fact that more low income homes were provided through self-help efforts under this project (without any onus upon its costs) than under the Earthquake Rehabilitation Project which had earmarked US$15.0 million for that purpose. 52. Of course the Urban Reconstruction Project could not have achieved these results without government policies that were more appropriately geared towards stimulating the efficient and equitable functioning of Nicaragua's urban areas with the full participation of low income groups. Although the current political and economic crisis which the nation is passing through is not a propitious moment for policy formulation on housing, it was clear to the audit mission that the current priorities are more in tune with Bank/IDA urban sector thinking than those of the post-earthquake reconstruction period. Particularly appropriate is the current commitment to "urbanizacion progresiva", which permits the official sanction of self-help subdivisions on unserviced land and allows the construction of houses at below the official standards on the understanding that the services will be provided as and when the houses are improved by their owners. !.his approach, which has been applied with some success in Bogota, Colombia; implies a more realistic stance in the face of limited financial resourues vis a vis the practically unlimited demands for low income housing in rapidly growing cities of devel- oping countries. Although the Ministry of Housing (MINVAH) has until quite recently built some low income housing schemes, most of its emphasis is now on "urbanizacion progresiva", a policy that has been amply applied in Managua itself. Almost all new low income housing units in Nicaragua are now being provided in this way. Even when bilateral funding for MINVAH's conventional housing projects was more abundant, the number of homes provided through self-help always exceeded those provided through such schemes. 53. The civil war brought even more disruption to the spatial distribu- tion of Nicaragua's population than the earthquake did. It displaced some 600,000 people, mostly from secondary cities and in rural areas where the 45/ Earthquake Reconstruction Project - Education (Loan 1314-GU) and Earthquake Reconstruction Project - Urban (Loan 1315-GU). - 19 - fighting was most prolonged, twice the number that had to flee Managua in the aftermath of the earthquake. This time, however, the mass population move- ments were correctly interpreted as constituting a temporary resettlement following what was regarded as a temporary crisis situation. Instead of interpreting these movements as a justification for a permanent spatial rearrangement of the population of Nicaragua, the project correctly sought to restore the economies of the devastated secondary towns, in order that the population might return to resume their former economic activities in the prewar locations, once the emergency was over. Conclusions 54. Thus both projects sought through various means to attain restora- tion of the destroyed urban fabric. The two projects exhibited a somewhat similar multiplicity of beneficiary agencies, both public and private, even though the first seemed to deal with them more individually. However, the results in the two cases seemed to have been less affected by the patterns adopted than by larger political considerations. The two projects contrasted most sharply in the fact that the first project had a housing component while the second did not. While restoration of housing is one of the most vital needs after a natural disaster, the approach adopted in the first project was inherently slow and cumbersome and ill adapted to rapid provision of shelter. 55. The first project, also unlike the second one, sought to achieve several policy objectives having little or nothing to do with the disaster itself. There may be instances when the tabula rasa created by a major disaster opens opportunities for radical transformations not otherwise possi- ble. Perhaps some of the policy aspects of the first project were included under such considerations. Whatevar might be the circumstances under which this approach would apply, they probably occur rarely and did not apply here. Moreover, they may, in fact, have impeded the primary disaster relief objective. Thus, it appears that the lack of policy orientation of the second project was no deficit in view of the now demonstrated problems of implementing such reforms when other concerns are overriding. 56. The restoration of urban life after a major disaster thus can be achieved in several ways chosen for the needs of each case. While much needs to be left to the skill of the project designer, certain guidelines could reasonably be observed: housing other than simple restoration to the status quo should be excluded and any policy elements should be avoided. - 20 - APPENDIX I Comments from the Borrower E-659/86 February 28, 1986 Spanish (Nicaragua) OED/Infra. & Urban JCB:cc Translation of incoming cable 1061 MINVAH Managua, Nicaragua, February 18, 1986 To: Mr. Yukinori Watanabe, Acting Director-General, OED, IBRD Re: PPAR (Credits # 389-NI and 965-NI). AUDIT COMMENTS: We fully approve the evaluation of municipal reconstruction carried out under MINVAN's responsibility and as described in the PCR (Credit 965-NI). As mentioned in the PPAR, the project did not make provision for housing construction, but the fact of project execution provided an incentive for the self-help construction of a considerable number of housing units, primarily in areas close to the various improvement works covered by the project (market, road surfacing, etc.). It should be stressed, however, that in parallel with execution of the project financed by Credit 965-NI, the Government of National PPAM para. 26 Reconstruction, through MINVAH, carried out 4,676 housing repair operations in expanded. the cities covered by the National Reconstruction Project, including 367 replacements of housing units totally destroyed by the war. Lastly, we wish to thank you for sending us the PPAR, and we congratulate you on its layout and on the promptness with which it was prepared after completion of the Municipal Reconstruction Project, executed thanks to the invaluable support of the World Bank missions and the financing provided by your institution. Regards. Miguel Ernesto Vijil Icaza, Minister. - 21 - PROJECT COMPLETION REPORT NICARAGUA EARTHQUAKE RECONSTRUCTION PROJECT SITES AND SERVICES COMPONENT (CREDIT 389-NI) .. . AC- - 23 - NICARAGUA CREDIT 389-NI EARTHQUAKE RECONSTRUCTION PROJECT COMPLETION REPORT SITES AND SERVICES COMPONENT 11 I. INTRODUCTION Context 1.01 In 1970, Nicaragua had an estimated population of 1.9 million of which 44% lived in urban areas. Managua, the capital, was the center of Nicaragua's economic activity and had a population almost seven times greater than that of Leon, the second largest city. The 1970 census reported that the population of Managua was about 400,000 inhabitants or 21% of the country's total population. Managua's population growth averaged 5.9% per year between 1950 and 1963 and 6.3% per year from 1950 to 1970, almost twice the rate of the country's population growth as a whole. 1.02 On December 22, 1972, Managua was struck by one of the worst earthquakes recorded in Latin American history. The earthquake killed about 16,000 persons, injured 20,000 more and destroyed or damaged 27 km2 of the city; in the city's center, an area of 14 km2 was totally devastated. In addition to the damage to Government offices, public facilities, commerce and, in particular, small,industry, more than 31,000 houses or about 45% of all dwellings in the city, were completely destroyed. About 200,000 inhabitants (50% of the total population) abandoned the city. Some left because they had lost their dwellings; others responded to a Government decree which ordered the evacuation of the city to facilitate demolition of buildings in serious danger of collapse and the clearing of areas of greatest destruction, in order to avoid the spread of disease arising from the fact that many victims were trapped under the debris. The refugees who abandoned Managua scattered throughout the country but must of them concentrated in cities within 30 to 90 km of the capital, such as Masaya, Tipitapa, Granada, Le6n, Jinotepe and Diriamba. 1.03 The city of Managua was reduced to a population of about 215,000 inhabitants in early 1973. But three months after the earthquake, refugees began to return to Managua since the greater part of infrastructure, heavy industry and other job sources in the services sector had suffered relatively light damage. A total of over 100,000 persola returned, bringing the population of Managua to about 310,000 by the middle of 1973. About 75,000 refugees still remained in the above mentioned secondary cities, where they faced serious housing, employment, income and health problems. 1/ This report specifically addresses the sites and services component of the project. A PCR has been completed (6/08/78) for the water supply component. PCRs for other components are under preparation. - 24 - 1.04 Bilateral and multilateral international agencies responded quickly to the disaster in Managua. On January 4 and 5, 1973, a first Bank mission participated in discussions with the OAS, IDB, AID, and other agencies on an emergency program and the reconstruction of Managua. On January 10, the Bank informed the Nicaraguan Government that it was prepared to support the reconstruction of Managua through an IDA credit and that it would immediately begin to work on the preparation of a project. Bank Operations 1.05 The Bank Group investments in Managua dated back to 1962 when IDA Credit 26-NI was granted for the First Managua Water Supply project. As of November 30, 1972, the investments in power, water supply, education and industry in the capital city totalled about US$21.4 million (fully disbursed). In March 1972, a US$6.9 million loan was signed for a Second Water Supply Project (Loan No. 808-NI) and another US$24 million loan for the Eighth Power Project (Loan No. 840-NI) was signed in June 1972. The only other ongoing project at the time of the earthquake was the US$2 million First Education Project (Loan No. 532-NI). The Bank Group had no experience in low-income housing in Nicaragua, and indeed, little experience elsewhere. The Earthquake Reconstruction Project was to be one of the first Bank-supported projects including a sites and services component. I/ II. PROJECT BACKGROUND Preparation and Appraisal 2.01 Following these earlier contacts, a second Bank mission travelled to Managua from January 15 to 20, 1973, and began helping in the preparation of the Earthquake Reconstruction Project. Three weeks later a mission returned to asuraise the project. 2.02 The appraisal mission found that although a strategy for reconstruc- tion and development following the earthquake had not yet been formally estab- lished, certain basic considerations were generally recognized. Given that it was not advisable or economically feasible to relocate the City of Managua, efforts would be directed towards (a) restoring remaining productive capacity in Managua to full operation as quickly as possible; (b) providing adequate and safe housing, particularly for returning workers required for the above; (c) reducing the risk of similar extensive earthquake damage in the future by taking measures to deconcentrate Managua's central district, to improve building standards, and to support the decentralization from Managua by locating housing and industries in secondary cities; and (d) economizing on resources by making the greatest use of still existing infrastructure and deferring high-cost investments until more was known. 1/ Prior to the Earthquake Reconstruction Project, the only other sites and services project was Senegal (Loan No. 336-SE), approved by the Board in June, 1972. - 25 - 2.03 This framework conformed with the recommendations of the International Advisory Panel on Reconstruction and Redevelopment of the Managua Region, which was jointly sponsored by IDB, the OAS and IBRD, at the request of the Nicaraguan Government. As the emergency relief efforts were phasing out, various lending agencies supported immediate medium and long term rehabilitation efforts and planned additional reconstruction loans to support long-term programs. AID provided a US$3 million grant for temporary housing and a US$15 million loan for budget support to the Government in early 1973. At the same time IDB was processing two loans, one of $4.2 million for agroindustries and a second emergency loan of US$16 million for subprojects including university facilities, telecommunications, credit for small enterprises and medium sized industry. An existing IDB water supply and sewerage loan was modified to take into account immediate reconstruction and redevelopment needs, particularly in water distribution networks. 2.04 Taking into consideration the programs of other agencies, the appraisal mission identified a project comprising five components: low-income sites and services, medium-sized industry, secondary education, water supply and power. The mission composed of ten staff members and consultants appraised the sites and services, education and industrial financing components in Nicaragua from February 6 to 23. The power and water supply components were appraised by four members of the LAC projects department in January and February. The appraisal report was completed by April 20, 1973 and taken to the Board three weeks later. The Credit Agreement was signed on June 6, 1973. Project Objectives 2.05 The general objectives of the project were to help meet priority needs through quick implementation of the components and to lend support to a long term strategy of deconcentration of greater Managua and decentralization among secondary cities. Thus, in the case of the sites and services component, while the Managua dwelling units were related to the remaining industry and the return of the refugees, about half of this project component and all of the industrial financing were aimed at supporting refugees remaining in the secondary cities and accelerating the growth rates of those cities. 2.06 The specific objectives for the sites and services component were the following: (a) To provide safe shelter and adequate services to low-income families affected by the earthquake, in two categories: those who had decided to settle permanently in the secondary cities, and those who were returning to Managua and resuming their work in the industrial plants or other sources of employment that had survived; - 26 - (b) to provide guidance and training for the development of a low cost system of self-help construction in a program of 500 serviced lots located in Managua; this program was intended as a pilot experience to establish the basis for an ongoing effort of this type; (c) to test the sites and services concept in Nicaragua and at the same time build an institutional capacity to successfully carry out and replicate such a program; and (d) to contribute to the reactivation of the economy and contribute to the orderly urban development of the city of Managua. Project Description 2.07 The project comprised five components designed to meet urgent needs not covered by other lending agency programs. 2.08 The sites and services component of the reconstruction project would consist of 6,400 lots and other items, the detailed composition of the component was: (a) 5,900 serviced residential lots complete with sanitary and dwelling core units, located in Managua (2,250), Masaya (850), Granada (870), Ledn (830) and Jinotepe (700); 400 were left unallocated; (b) a pilot program of an additional 500 serviced residential lots in Managua with sanitary units only and a materials fund for self-help housing; (c) community facilities (primary schools, health centers, community centers, recreational areas, markets) for all project locations; and (d) technical assistance, engineering design, and construction supervision. The executing agency for this component of the project would be the national housing bank, Banco de la Vivienda (BAVINIC). 2.09 The industrial component would apply to the secondary cities and consist of financing for the following items: (a) Industrial sites and services; and (b) plant, equipment and buildings for an estimated 30 to 50 medium sized industries. - 27 - The executing agency for this component of the project would be the national development bank, Instituto de Tomento Nacional (INIONAC). 2.10 The education component of the reconstruction project would consist of the following items: (a) Four temporary, general secondary schools (prefabricated and expected to be in operation by June 1973); (b) two permanent, multilateral secondary schools; and (c) one permanent technical institute. 2.11 The water supply component would consist of the following items: (a) Emergency repair and rehabilitation of existing installations (civil works); (b) equipment and materials for rehabilitation work; and (c) some local cost financing of civil works under the previous Loan 808-NI. 2.12 The power component would consist of the following items: (a) Emergency repair and rehabilitation of existing installations; (b) extension of existing distribution network to provisional housing and expansion of substations; and (c) primary and secondary distribution facilities, transmission systems and substations, office buildings, warehouses, workshops, vehicles and equipment in ENALUF's 1973-74 work program throughout the country. 2.13 The proposed components constituted what was deemed a balanced and high priority reconstruction effort suitable for an IDA credit of US$20.0 million equivalent, including US$1.5 million of local costs for civil works under the previous Water Supply Loan (808-NI). I/ The costs per component were the following: 1/ Given the weakened condition of the executing agency (Aguadora) following the earthquake, this would ensure the implementation of works for which equipment and materials were provided under Loan 808-NI. - 28 - Component Total IDA Credit Sites and Services 13.0 8.0 Industrial Financing 5.0 2.5 Education 2.9 2.0 Water Supply 2.7 2.5 Power 6.7 5.0 TOTAL US$30.3 US$20.0 2.14 The total costs of the reconstruction project components were esti- mated at $30.3 million, of which $16.6 million would represent the foreign exchange component. The counterpart contribution of $10.3 million to the $20.0 million IDA credit would primarily be financed by the Central Government, including the provision of all land; approximately $2 million of the counterpart for industrial financing would come from INFONAC, and about $1.5 million counterpart would come from the power (ENALUF) and water supply (AGUADORA) entities. 2.15 The proposed credit was to be made to the Government of Nicaragua which would make available the proceeds to the respective executing agencies under separate sub-agreements acceptable to the Association. Government would pass the $8.0 million for sites and services on to BAVINIC on a grant basis. In addition, the repayments of principal and interest from ENALUF, AGUADORA and INFONAC, together with all mortgage repayments from sites and services beneficiaries, would be channelled into a special fund at BAVINIC for a continuing low-income sites and services/housing program. Government was to repay the IDA credit from general revenues. 2.16 All goods and services financed by the Association would be subject to international competitive bidding except an estimate $1.7 million for emergency repairs, rehabilitation and replacement, and the $2.5 million of industrial financing, as is normally the case with DPC-type operations. An estimated $1.85 million was proposed for retroactive financing in order to expedite reconstruction. III. PROJECT IMPLEMENTATION 1/ Achievement of Project Objectives 3.01 The implementation of the sites and services component partially realized the general and specific project objectives. As far as the former were concerned, it can be said that the sites and services component did not effectively "meet priority needs through quick implementation". The experience in Nicaragua, and later in Guatemala, has appeared to demonstrate that sites and services are not an effective response to emergency post-disaster housing needs; by the same token, emergency housing, such as the AID-supported project 1/ From here on, reference to the project means exclusively the sites and services component. See page 1, footnote 1. - 29 - in Nicaragua, while meeting immediate relief needs, tends to consolidate into inadequate permanent dwelling environments--the opposite of sites and services. The component did however contribute toward reactivating the economy, and, to a lesser degree, supported the longer term strategy of deconcentrating Managua and decentralizing urban development to secondary cities. 3.02 As far as the specific objectives were concerned: (a) The project did provide safe shelter and adequate services to the low-income population, but generally of higher standards than originally intended and therefore, in some cases, did not reach the target population; (b) the project did provide for a successful mutual aid/self-help sites and services component, although it was only half as large as originally intended; (c) the sites and services concept was tested and demonstrated to be feasible, and the institutional capacity to implement the program was established, but the program has only been replicated on a small scale; (d) the project had only minimal impact in helping reactivate the economy or in contributing to the orderly urban development of Managua, as neither of these objectives were really achieved. Appropiateness of Scope 3.03 The fact that the sites and services component was not very successful in supporting the strategy of decentralization has little to do with the appropriateness of scope of the project or lack of it. It was the strategy that was unrealistic and the actual unfolding of events demonstrated this. Refugees flocked back to Managua; industry, services and government did too. It was simply not possible to develop the economic base of the secondary cities fast enough to retain the displaced population. 3.04 The scope of the component in itself was adequate: it complemented other ongoing investments in the sector, and to a certain extent, it was flexible enough to respond to demand as it developed; the mutual aid/self-help sites and services technology introduced by the component proved to be successful and feasible and although there was an almost unlimited demand for housing in Managua, the program's size was right given the experimental nature of a first urban project, and because it was sufficient to demonstrate the feasibility of the approach, develop the technical capability for replicating the program, and make somewhat of a dent in the demand for housing. Project Management / 3.05 The Banco Nacional de la Vivienda (BAVINIC) agreed to set up a project unit to conduct the execution of the project. At the same time, however, BAVINIC was implementing projects supported by AID and IDB, and was somewhat overextended. This resulted in an understaffed project unit which had inadequate 1/ See also Chapter V below on Government performance. - 30 - support from other overworked departments that had no prior experience in dealing with sites and services. Many of the delays in getting the project started can be attributed to this situation (see para 3.09 below). About two years into the execution of the project, after repeated complaints by the Bank, a new unit director was appointed and provided with two additional staff members. The unit's performance improved considerably thereafter and the Bank began receiving progress reports and timely notifications on the procurement process. 3.06 Aside from the initial inherent weakness of the unit, the unit head had limited autonomy for making decisions and very little leverage vis-a-vis other government agencies. This was aggravated by the lack of support for the unit by BAVINIC's top management and by a general resistance throughout the institution to the concept of sites and services and low-income housing. In spite of these limitations, towards the end of the project implementation period, the unit became reasonably effective, having acquired a good deal of experience. Use of Consultants 3.07 Local consultants were used for the detailed engineering in seven of the eight subprojects. The eighth and last subproject was done in-house by the project unit. The use of consultants led to satisfactory results in all but two of the subprojects. In the case of Le6n, the consultant prepared final project on the basis of land contours taken from inaccurate aerophoto- graphic restitutions. Upon confronting the project with reality, there was little relation between what was on paper and the topographic characteristics of the site. The project had to be done over again, beginning with a topographic survey and resulting in several months delay. 3.08 In most cases, the consultants eventually came to grasp the concept of sites and services and to understand the need for efficient layout designs, in terms of land use. And with feedback and support from various Bank missions, generally satisfactory designs were arrived at. In the case of Jinotepe, how- ever, the consultant simply did not understand or did not agree with efficient design, and insisted in producing variations of a layout based on circular blocks. This case required an inordinate amount of attention from Bank missions. After almost a year's delay spent on discussions and review, an acceptable design for this subproject was finally agreed upon. Delays in Implementation 3.09 Other than those mentioned above, delays in implementation resulted for the following reasons: (a) Unforeseen complications in the acquisition of land; the assurances of Government on the speed of land acquisition were such that the implementation schedule did not even take this phase into account. In reality, land acquisition took from four months to over one year to complete for each subproject. The reasons for the delays were never made very clear but in the - 31 - lengthiest case they were attributed to personal political differences between the seller and the President of the Reconstruction Committee. (b) Once the land was acquired another series of considerable delays arose in the process of approval of the project designs by the newly created Vice Ministry of Urban Planning (VIMPU), who insisted on higher design standards for the projects, and unnecessarily waited almost a year to declare one site free of seismic faults and adequate for construction. This led to delays from three months to over a year for the different subprojects. (c) At the end of the construction process, further delays were incurred when public utilities had not completed parts of the trunk infrastructure (this had to be done by the project unit), or sought to overcharge or double charge beneficiaries or entire projects for dwelling connections. These delays were only of a few months. (d) Finally, on more than one occasion the Bank was slow to respond to requests for approval of project designs, bid documents or contract awards. These were usually no more than one or two months' delays. Procurement Practices 3.10 By the time the first contracts were let, the reconstruction effort was in full swing. The building industry boomed and inflation spiraled. The government appealed to construction workers to work longer hours for less pay, but the workers responded with strikes, demanding higher wages. Thus, when the first two contracts for the Masaya and Granada subprojects were tendered, bids came in 15% to 20% higher than BAVINIC's base prices and 80% to 100% higher than the estimated costs at appraisal. 3.11 The subprojects were tendered through ICB, in packages that combined earthworks, infrastructure and dwelling cores. Only local firms responded, with the results mentioned above. BAVINIC's recommendation was simply to reduce the overall number of units to be build under the project. The Bank countered with the proposal that all bids be rejected, that the earthworks and infrastruc- ture be negotiated with the lowest bidders for those components, and that the dwelling core designs be modified to achieve lower costs, and be tendered separately later on. The Bank estimated that the original number of units could be built if 4,000 of the 5,900 dwelling cores were downgraded to sanitary units and unfinished dwelling cores. NICARAGUA Table 1: Earthquake Reconstruction Prolect Estimated and Actual Implementation Selodule 73 74 75 76 77 Proposed implementa- 7-I T u for ad1boooJoooo tionaA 0ooo ii X Appraisal, all subprojects Actual implementation schedule by City & Subproject. GRANADA 000 0 Aham MASAYAi iioboDO "x LEONi 000oo ooo oo60 l JINOTEPE iiiiiiiii.o IJo60 0000oo4o0o roooooooocoo I MANAGUA I VILLA PROGRESO. iiiiiio'ooo r 000 000 I 0 0 MANAGUA II VILLA ESPERANZA Liiioo oo"0000 MANAGUA III 0 JA" VILLA SAN JACINTO iiiiiii oo OOM iiiiiiiiiii Land Acquisition 0oooooooooo Engineering approvals, and Tendering IIIMPIx- Construction period, including colmmity facilities 1/Built on land developed in the San Jacinto project - 33 - 3.12 The Bank's proposal was accepted and it resulted in obtaining costs for the first two subprojects 14% below the original lowest bids, but still 75% higher than the estimated costs at appraisal. Learning from this initial ex- perience, all subsequent subprojects were broken down into separate contracts for infrastructure, dwelling cores, and community facilities. A total of ten contracts were awarded for the production of the overall sites and services component. Number of Units Built 3.13 Throughout the execution of the project boCh prices and resistance to lower standards remained high. Although the Bank's proposal of providing only partially completed cores was implemented, VIMPU insisted on high urbanization standards, including overdesigned circulation networks, excessive streetlights and fire hydrants, etc. This of course resulted in a shortfall from the originally planned 6,400 units in total to the 5,391 units actually built. The breakdown by city and category, comparing the appraisal estimates and actual results, is as follows: Table 2: Number and Location of Dwelling Units Appraisal Category City Estimate Actual Dwelling Cores Masaya 850 869 Granada 870 1,028 Ledn 830 418 Jinotepe 700 200 Managua 2,250 2,586 Unallocated 400 - 5,900 5,141 Serviced Sites Managua 500 250 Total 6,400 5,391 3.14 In addition, it was originally estimated that for approxxaately each 500 families, a school a health clinic, a community center and a market would be built. This brought the number of community facilities to 48. However, only 22 were actually built: 4 in Masaya, 4 in Granada, 3 in Le6n, 2 in Jinotepe and 9 in Managua. - 34 * Total Costs 3.15 The final total cost of the sites and services component came to US$15.1 million, as compared to the originally estimated US$13.6 million. Total expenditures by the project unit included an additional US$515,278 corresponding to the industrial parks component and charged to INFONAC. Table 3 below shows a breakdown of total costs and average unit costs by category and comparing the appraisal estimates with the actual results. Table 4 shows the total project expenditures by category and by city. Unit Costs 3.16 Upon completion of each of the subprojects, the sale cost per unit was arrived at, taking into account the total cost of land and urban infrastructure 1/ (less the amount corresponding to community facilities), plus the cost of the dwelling units. Both the urban infrastructure and dwelling unit costs included the civil works, detailed engineering, geological studies and topography, laboratory analysis (for earthquake resistance) and supervision. There were no administrative costs imputed to the subprojects but a 5% charge was made to cover financing during construction. Thus, the average unit cost US$2,844 as compared to the estimated $1,777. Table 5 shows final unit costs by category and by subproject. 8 Disbursements 3.17 The rate of disbursement obviously reflected the delays in the implementation of the project. Table 6 shows the estimated schedule of disbursements at,appraisal, and actual disbursements. IV. ECONOMIC PERFORMANCE Affordability, Demand and Target Population 4.01 Two issues affected the affordability of the project, and therefore its success in reaching the originally targeted population. The first was a decrease in household purchasing power: the increases in minimum salaries levels that took place between 1974 and 1977 simply did not keep pace with the rate of inflation. Thus people received less dwelling for roughly the same amount of money that had been targeted at appraisal. Even for this to be possible measures had to be taken to reach the lower income families, such as financing 50% of the downpayment (5% of the unit price) over a 6 month period at an 8% interest rate. 4.02 The second factor affecting the project was demand. By 1975, even before the first units became available, about 80% of the displaced population had returned to Managua. They came mainly from the nearer secondary cities such as Granada, Masaya nad Jinotepe and the subprojects there had a relatively weak demand. After having units on the market for almost two years in these cities, it was decided to admit middle income families and many purchased two 1/ Of the urban infrastructure, only 50% of the road network cost was to be charged to the beneficiaries. 35 - Table st SuMary of EstiNted and Actual Total and Unit Costs Siteis a0d Service Coouat Unit Costs Attributable to Total Costs and Payable by Households (in US$'000) (in US$) Estimated Actual bstimated Actual 1. LAND a. Managua 903 840 200 295 b. Secondary cities 399 339 75 134 1,302 1,179 2. CIVIL WORKS (including site preparation and urban infrastructure) 2,829 3,303 392 617 3. LOT DEVELOPMENT 4,895 6,966 836 1,463 (including dwelling cores and materials fund) 4. COMMUNITY FACILITIES 757 957 -- 128 5. ENGINEERING SUPERVISION 923 1,033 110 190 AND TECHNICAL ASSISTANCE Sub-total 10,706 13,438 1,538 2,693 6. CONTINGENCIES (Original estimate: 2.114 1,655 307 138 physical: 15% of item 2-4;price: 10% of items 2-4) 7. PROVISION FOR 400 ADDITIONAL LOTS 800 - n.a. n.a. TOTAL 13,620 15,093 (a) 1,845 2,885* (b) 1,720 2,720 * (a) - Managua (b) - Secondary cities. TABLE 4 Total Project Expendituresa/ (to 12/31/78) In US$ except. as otherwise indicated Villa S. Villa Villa Villa Pro- Jacinto Frater- Total in Villa Villa Villa Jino- greso Ma- Villa Ma- Managua nidad Cordobas Total in Masaya Granada Leon tepe nagua I nagua II III Managua C$ US$ 2 Urban infra- structure 842.857 1,100,000 334,573 138,330 753,571 868,584 418,390 150,390 32,248,545 4,606,935 29.5 Communal facilities 185,714 214,286 102,538 98,055 150,729 99,435 106,920 - 6,703,736 957,736 6.1 Dwelling units 1,310,821 1,543,957 747,219 389,881- 857,456 1,309,439 528,717 278,813 48,764,148 6,966,307 44.6 Detailed engineering 32,379 28,881 28,292 39,573 35,214 24,929 28,543 7.156 1,579,210 225,601 1.4 Supervision 165,143 123,095 53,095 39,282 100,186 133,714 98.500 30,250 5,202,858 743.265 4.8 Lab & topography 40,747 48,179 18,571 6,662 26,057 26,286 26,105 - 1,348,249 192.607 1.2 Contingencies- 162,242 143,847 45,745 27,283 151,497 115,136 79,373 13,105 5,167,599 738.228 4.7 Subtotal 2,739,903 3,202,245 1,330,670 739,0602,074,710 2,577,522 1,286,548 479,953 101,014,345 14,430,620 92.5 Land 168,638 103,298 - 50.643 15,817 348,571 365,714 92,306 32,830 8,244,730 1,177,819 7.5 Crand total 2,908,542 3,305,543 1,381,313 754,8862,423,282 2,943,238 1,378,854. 512,783 109,259,075 15,608,439 100.0 a/ Total figures include US$515,278 corresponding to industrial parks component. January 1981 TABLE A Final Unit Costs by Catesory and Subproject (in US$ except as indicated) Geological Total charged to studies and Laboratory Detailed Dwelling Urbanised beneficiary topography costs engineering unit lot Supervision C$ US$ Villa Masaya - 43 25 1,733 995 175 20,793 2,970 Villa Granada 24 50 26 1,940 1,129 127 23,077 3,297 Villa Leon 61 40 18 1,946 826 114 21,045 3,006 Villa Jinotepe 37 30 43 2,014 688 179 20,943 2,992 Villa Progreso Managua t 48 35 43 1,698 1,322 133 22,954 3,280 Villa Esperanza Managua II 68 25 13 1,573 1,194 129 21,026 3,004 Villa San Jacinto Nanagua 111 19 26 17 1,275 735 83 15,077 2,154 Villa Fraternidad Managua a/ 92 - 17 1,093 735 l1 14,341 2,049 Average costs 6/ 50 36 25 1,659 953 131 19,907 2,844 a/ Villa Fraternidad civil works are substantially lower due to the mutual-aid method used in their realization. b/ Costs may not add up due to rounding off in converting from c6rdobas to US$. !I Exchange rate at the time: C$7 - US$1 January 1981 - 38 - Table 6: Estimated and Actual Schedule of Disbursements (in US$ millions) ESTIMATED ACTUAL SEMESTER DATE DISBURSEMENT DISBURSEMENT 1 6/30/73 0.1 - 2 12/31 0.7 - 3 6/30/74 1.9 - 4 12/31 3.6 - 5 6/30/75 6.0 1.2 6 12/31 8.0 2.7 7 6/30/76 - 4.4 8 12/31 - 5.8 9 6/30/77 - 7.5 10 12/31 - 7.8 11 6/30/78 - 7.9 12 12/31 8.0 - 39 - adjoining units, particularly in Masaya. In Granada, the most extreme case, 40% of the units were sold to families with monthly incomes of up to about US$360. In the larger cities, such as Managua and Le6n, there was a much higher demand for housing, and units were allocated to the lowest income families that could afford them. Some other factors that affected demand in the secondary cities included: (a) Excessive time elapsed between the earthquake and the avail- ability of the units (3 to 5 years), during which many families procured alternative permanent dwellings; (b) unfavorable project location, particularly in regard to job markets and exacerbated by failure to implement, other than in Masaya, the industrial parks; (c) inadequate housing unit design and size; the 17 m2 single room core in Masaya was deemed to be simply too small, e-en temporarily, for the average five member family. I/ 4.03 The following table shows the range of incomes of project benefi- ciaries, approximate proportion by income groups, and monthly housing payments, all by cities where subprojects are located. Table 7: Income and Monthly Payments Beneficiary Proportion by Monthly Income Income Level V Number Charges Ranges Low income Middle income Projects of units US$ US$ % % Granada 1,028 22 64 to 357 60 40 Jinotepe 200 23 57 to 171 80 20 Masaya 869 19 64 to 214 85 15 Managua (1, II and III) and Le6n 3,004 20 to 22 57 to 171 100 - Villa Fraternidad (Serviced Sites, Managua) 250 13 57 to 129 100 1/ In the same city, IDB financed 45m 2 units for a US$54 monthly payment, which itad a mauca greater acceptance compared to our 17 m2 for US$19, although the former were clearly not affordable to our target population. 2/ Dividing line between low and middle income was the original cut off for project beneficiaries of US$157 income per mounth. - 40*- Economic Rate of Return 4.04 Following the criteria for the economic analysis 1/ of the project at appraisal, the economic rate of return was recalculated on the basis of actual economic costs of the project and updated monthly rental values. The table below shows the actual ERR for one and two room units, as compared with the ERR projected at the time of appraisal. Table 8: Estimated and Actual Rates of Return One Room Unit Two Room Unit Minimum al Likely b/ minimum Likely Rental Value Rental Value Rental Value Rental Value Estimated Rate of Return a. Including Land 7.5% 12.4% 8.3% 12.7% Cost b. Excluding Land 8.9% 14.2% 9.6% 14.4% Cost Actual Rate of Return a. Including Land 2.9% 9.2% 6.2% 11.9% Cost b. Excluding Land 3.9% 10.5% 7.3% 13.3% Cost A/ This refers to a minimum value used as a baseline for the analysis. b/ This is the probable average value to be expected. 1/ Estimates for comparable types of housing were made in the field. Benefit streams were calculated based on the capitalized rental values, assuming consolidation patterns (1 or 2 rooms) for the lots over a 30 year period. Costs included are the cost of site preparation, infrastructure, core unit, engineering, supervision and technical assistance, net of taxes and finance charges. Land costs were excluded for purposes of sensitivity analysis. - 41 - Non Quantifiable Benefits 4.05 Besides providing housing for 5,391 families, the sites and services component had an important effect on employment and continues to have a benefi- cial effect on the quality of life. About 40% of the project costs went to labor and generated an estimated 13,300 man-months of construction work, and about 650 man-months of administrative and technical work. The individual dwelling, water and sewerage connection, in addition to the clinics, have probably had a significant impact on health. And the integrated nature of the project, including seven elementary schools, six clinics, seven community centers, green areas, paved roads and footpaths, etc., has definitely provided better physical and social environments. This can best be appreciated in the photographic documentation annexed to this report. V. GOVERNMENT PERFORMANCE Executing Agency 5.01 In compliance with loan conditions, BAVINIC established a project executing unit. The unit eventually came to include 12 professional staff members and at its peak was a fairly competent and well run outfit. In the beginning, however, the unit was understaffed, had a weak leadership and counted with little support from BAVINIC's top management. It was not until after repeated requests were made by the Bank, that an effective manager was appointed and additional staff assigned to the unit. However, this only took place nearly two years after the Credit Agreement was signed. This situation, together with the general lack of enthusiasm of BAVINIC with the concepts of sites and services and progressive development was at least partially responsible for the delays in getting the project started. 5.02 The professional staff of the unit, designated BAVINIC-IDA but known as BAVINIC-IBRD, included architects, bus1"4. managers, social workers and an engineer. Organizationally, the unit was structured in four sections: engineer- ing and supervision, comptrollers and statistical information, promotion and sales, and application and loan processing. These were all coordinated by the BAVINIC-IDA project manager, who was also responsible for relations with the Bank, contractors and consultants, and with other government agencies. The project executing unit prepared and awarded ten contracts for the production of the 5,351 units and 22 community facilities. The unit promoted the projects, allocated the dwelling units and in general managed the pro3ram. However, upon the occasional failure of local agencies to provide certain services, the unit also temporarily organized and ran community facilities or even contracted out specific services such as garbage collection services. In the end, the performance of the project unit itself was satisfactory, while the management of the executing agency sometimes was uncooperative or failed to provide adequate support to the unit. - 42 - Other Government Aaencies 5.03 Performance and cooperation of other government agencies was, in many cases unsatisfactory. Chief among these was VIMPU, the Vice Ministry of Urban Planning which was created shortly after the reconstruction efforts got under way. Totally alien to the idea of progressive development as a basic approach to the problem of low-income housing, VIMPU imposed urbaa design standards on the sites and services projects that directly resulted in substantially higher overall costs. Specifically, they required design standards that applied to high-income residential neighborhoods including excessive road rights of way and parking areas, road pavement for heavy traffic, underground storm drainage along paved streets, excessive number of fire hydrants, high density and intensity of street lights, etc. The onsite circulation network's cost alone was such that, as mentioned above, it was resolved to charge the beneficiaries for only half of it, in order to keep within the upper range of the target population. In addition, VIMPU was responsible for serious delays, taking three and four months to approve detailed engineering for the subprojects. 5.04 Although their performance as executing agencies for other components of the project may have been satisfactory, the water, sewerage and power authorities (AGUADORA, DENACAL, ENALUF) all applied the same tariffs and dwelling connection charges to the sites and services projects as they did in upper-income residential areas, ignoring repeated requests by the project unit to lower their charges in the interest of affordability. As a result, in many cases families who had begun payments on their dwelling units had to postpone moving in because they could not afford the connection charges for the services. In another instance, the agency responsible for the sewerage systems attempted to charge residents for dwelling connections which had already been installed under the project. 5.05 With the exception of the city of Le6n, the cooperation of the local municipalities was almost nil. Garbage collection services were at best irregular. In asaya, the BAVINIC unit, together with the residents, paid a contractor for the service for six months. The municipalities, also responsible for the market areas, in most cases let them remain idle, not having the interest and/or capacity to promote and organize their operation. 5.06 The Ministries of Health and Education did take over and operate their respective facilities. In three cases, however, the Ministry of Education failed to provide equipment for the schools and BAVINIC had to do this. In addition, the same Ministry failed to adequately maintain the facilities and BAVINIC again provided funding for repairs to schools in Masaya, Managua and Jinotepe. This was done with BAVINIC and Central Government resources. 5.07 The Junta Nacional de Asistencia y Previsi6n Social (JNAPS) took charge of the community centers and organized the residents to establish volunteer community clean-up teams. The JNAPS also provided services such as courses in home economics. Lack of a necessary budget to maintain this effort soon forced them to abandon the projects in Nasaya, Ledn and Granada. The BAVINIC-IDA unit " 43 - social workers stepped in to restructure the community organization and keep the centers open. But without the support of JNAPS the activities dropped to minimum levels. Archeological Study 5.08 After the land for the Granada subproject was acquired, a visit to the site and subsequent research by the Bank's Resident Project Officer led to the conclusion that the site was of some archaeological significance. Given that funds for an archeaological study were naturally scarce during the reconstruction effort, Mr. Jorge Espinoza, Director of the Department of Anthropology and History of the Nicaraguan National Geographic Institute approached the Bank for inclusion of the study within the Earthquake Reconstruction Project. The study would be conducted during the preparation of detailed engineering, before beginning the earthworks. This was agreed to by the Bank. .e original study, 1/ plus one extension of the same, came to US$23,300 of which the IDA financed about 54%. The difference was put up by the Banco Central de Nicaragua. 5.09 The study consisted of collecting, analyzing and classifying ceramic shards that abounded on the site. The field and laboratory work were completed and the funds were disbursed. But a final report, if it was ever done, was not published or submitted to BAVINIC or the Bank. The Bank has asked MINVAR to inquire about the collection of over 100,000 shards, stone implements and artifacts, and requested that a report be presented. Housing Fund 5.10 The Housing Fund, which was conceived as a tool to support the replication of sites and services, did not work quite as foreseen at appraisal. According to data submitted by BAVINIC comptroller's office, as of March 31, 1979, downpayments and monthly charges received from the BAVINIC-IDA projects totalled US$1.09 million; the Fund was owed, at that time, about US$1 million by the institutions responsible for other project components (INFONAC, ENALUP, AGUADORA, and Ministry of Finance), as stipulated in the subsidiary agreements to Credit 389-NI. These funds, however, were never received, in spite of numerous appeals made by BAVINIC. 5.11 In March of 1979, the first project using the resources of the Fund was approved. It consisted of 83 units to be built with mutual aid for US$187,790. The units, similar in design to those of Villa Fraternidad, were built on land adjoining that project and have since been completed. Cost Recovery 5.12 Downpayments and initial monthly payments by beneficiaries for units allocated by BAVINIC were made on a fairly regular basis, and these funds were transferred to the housing fund. With the widening of the civil war, however, monthly payments dropped sharply beginning in late 1978. The level of payments 1/ The study originally consisted of two months field work and seven months laboratory work and report writing. The extension provided for an additional four months field work and two months for laboratory work and report writing. - 44 - increased again towards the end of 1979, although they were reduced by the new government in many cases. There are no more concrete data on this matter at the present time. VI. BANK PERFORMANCE Identification to Appraisal 6.01 Faced with the emergency situation resulting from a catastrophic earthquake, the Bank was able to respond with great agility. Less than two months elapsed between identification and completion of the appraisal, and the credit agreement was signed four months later. For all the speed with which the exercise was conducted, the appraisal report remains a thorough, detailed document. The premises on which it was based were demonstrated to be valid through the implementation of the project. 6.02 The problems that arose during the implementation of the project were not so much related to the basic premises of the appraisal as they were to the scheduling and timing of the execution. At the time of appraisal, it was impossible to foresee the delays that were to be incurred in the purchase of land or by VIMPU's slowness to approve plans. Only the experience of this and other projects would teach the Bank that these steps often involve substantial delays, and that they have to be given as much attention as the detailed engineering or the procurement process. Bank's Role 6.03 Given the limited experience there was at the time with sites and services and progressive development, the Bank was compelled to take a fairly prominent role in the formulation and design of the housing component of the project. And although there was a persistent resistance to the Bank's approach to low-income housing on the borrower's side, the technical capacity and quality of the Bank was recognized and its views were eventually accepted and the physical product successfully implemented. The quality of the relations between the borrower and the Bank was generally good and the Bank was frequently called upon to intervene in support of the project unit in a variety of instances. In general terms, however, it can probably be said that the Bank's role was more important and of greater influence in the formulation and design of the project than in its implementation. Supervision 6.04 The Bank did recognize the difficulty in starting up the project in the crisis-struck environment following the disaster, and a full-time Resident Project Officer was appointed following signature of the credit agreement. During his stay of over a year in Nicaragua, at the beginning of implementation, the Resident Project Officer spent at least two thirds of his time on the sites and services component of the project, trying to get the land purchased and the - 45 - detailed engineering completed and approved. It is certain that the delays of this stage would have been much greater without his intervention. 6.05 After the Resident Project Officer was withdrawn, the supervision effort increased in speciaization, and the technical inputs of Bank missions were undoubtedly very valuable, but decreased in intensity. An average of two to three missions a year of just over one man-week supervised the project in the field during the peak of its implementation. A certain lack of continuity in the staff supervising the project had a negative effect on some components, such as the archaelogical study that was vigorously pursued at the beginning and then not followed up on. Or in failing to ensure that utilities were making their payments to the Housing Fund. Towards the end of the implementation of the subprojects, the level of supervision decreased further: there were no supervision missions or reports in 1978 and 1979. This situation was largely due to the increasing level of violence of the civil war that sharply curtailed the Bank's ability to supervise. 6.06 Overall, however, the Bank's supervision effort had a significant impact if not on the pace of the implementation, on the quality of the final designs and the physical product that resulted. The supervision was also very important in permitting the Bank to draw valuable experience and lessons from the ongoing project which were then rapidly applied elsewhere. VII. CONCLUSIONS Bank Experience 7.01 The Bank became involved in urban development and low income housing, using the sites and services approach, almost a decade ago. Today, the Bank is supporting integrated urban development projects that include employment generation, transportation, upgrading of existing low income settlements and metropolitan infrastructure systems, among other components, as well as site and services. These integrated urban projects evolved from the experience derived from Bank supported projects, including the Nicaraguan Earthquake Reconstruction, long before the appearance of this first completion report for a sites and services project. In summarizing the experience of one of the first sites and services projects, this report can, however, point to a number of concluisions that support, or are supported by, earlier experiences. The following points outline some of the main lessons derived from the Nicaragua Earthquake Reconstruction Project. Suitability of Sites and Services 7.02 The sites and services approach rests on the idea of progressive development; i.e. that housing is a process by which a dwelling changes and consolidates over time. For reasons which lie beyond the scope of this report, this is more easily understood and more readily accepted by low income project beneficiaries than by concerned government agencies. Indeed the latter often - 46 - have a built-in resistance, in the form of building codes and housing related regulations, to the low standards that sites and services begin with. A great deal of attention must be paid to this fact to avoid lengthy delays and substantial cost overruns. It is not sufficient to have the borrower agree to a project; all agencies and actors in the process should be identified and clued-in in advance, taking the necessary measures (which are often very time consum- ing in themselves) to avoid future bottlenecks and obstacles. 7.03 The sites and services approach is not a panacea. In fact it can only be successfully applied under particular conditions. Some cases in which it may not work are as follbws: (a) Given the time it takes, first to complete the civil works (after dealing with the problems described in the preceeding paragraph), and then to build a minimum dwelling, the sites and services approach is not an answer to emergency housing needs resulting from disasters such as earthquakes or floods. A possible alternative for these situations are the surveyed plots, where disaster victims are provided unserviced site in a layout that will allow for gradual introduction of infrastructure networks and community facilities; (b) a site and services project may not attract customers even when there is an apparent demand for this type of solutions, if there are illegal subdivisions that can compete favorably in terms of price, even if, or rather because, they offer a lower level of services--or if there are free sites suitable for squatting that are better located, again, in spite of a lower level of services; (c) demand for sites and services may also suffer if too little or too much is provided in terms of service levels or dwelling core, particularly in small towns. Such is the case at one end of the spectrum when a project is accompanied by a mutual aid program to complete the dwelling cores, and the amount and opportunity cost of the time required is too great for beneficiaries involved in the informal sector, or otherwise employed; or at the other end, when regulations and building codes impose standards for dwellings and services that make the solution financially unaffordable to the target population. These are just a few instances in which, derived from the Earthquake Reconstruction Project experience, we think that a sites and services approach should not be used, or only used very carefully. Of course, every specific case should be explored and thought through individually to determine the suitability of this approach. (paras,4.01-2). Tmig 7.4 Experience in this project shows that there are a number of areas in which sites and services projects systematically encounter substantial - 47 - delays. Taking this into account by paying more attention to these trouble spots, and adopting measures to deal with them, should allow us to provide more accurate time and cost estimates and avoid costly delays. The first instance is in the acquisition of land. Without going into everything that can go wrong in getting a site or sites of a project, it can be said that this requires a good deal more lead time than that usually alloted to it. Given its pre-eminent position in the critical path, any delay in the procurement of land inevitably affects the rest of the implementation schedule. The ideal situation would be to have most land acquired before appraisal, alLowing for early detailed engineering and more accurate cost estimates. The situations where availability of suitable land is known to be a problem (such as in location vis a vis trunk infrastructure), this is highly advisable (para. 6.02). 7.05 Delays are often encountered in the preparatory stages leading up to implementation, mostly due to a lack of prior experience and/or acceptability of the sites and services approach. Some items that often become problematic are the following; (a) Passing resolutions or legislation to modify building codes or otherwise allow for sites and services projects; (b) setting up and staffing project execution units, given that the capacity is not usually available in the concerned agencies; (c) producing adequate designs to reach the target population in terms of cost and cultural acceptability. 7.06 The physical implementation of a project basically has two phases: the civil works, usually done by a contractor, which comprises earthworks, laying the urban infrastructure networks and often building the sanitary units or dwelling cores; and the self help or mutual aid phase needed to bring the units to a level were the beneficiaries can actually move in. Although the first stage usually has no more problems than any other civil works, the second phase can often run into trouble. Two examples: In the case of self-help completion, beneficiaries not being able to afford the cost of the dwelling once the plot payments are made, particularly materials financing is not provided; in the case of mutual aid, beneficiaries dropping out due to length of the process, the opportunity cost of their time, or the amount and difficulty of work involved. These and other problems are common when the second phase has not been carefully planned or there is not enough prior experience. 7.07 The accumulated delays eventually affect the proposed disbursement schedule. The logic of progressive development would seem to support the view, usually reflected in disbursement schedules, that a short start-up period is followed by a period of heavy investments in the civil works, fairly early on, which then tapers off with the smaller costs of dwelling consolidation. In reality, the curve of disbursements is the opposite. It starts out slowly, picks up speed near or past the half way mark of the implementation period, and then ends rather rapidly towards the end of the period. This is generally due to the delays and necessary lead time mentioned above, and to the fact that sites - 48 - and services projects are often made up of several sites that come on stream little by little at first, and then all at once, when the obstacles have been finally overcome and time is running out. Supervision 7.08 Finally, the importance of the Bank's supervision of sites and services projects should be stressed (paras. 6.04-5). Because most executing agencies have little experience here, a fairly intense supervision effort, bringing the Bank's experience from other projects, can be extremely useful. In this sense, supervision actually has doubled as technical assistance. This assistance is often crucial, not only to attain the original project objectives, but simply to get the project completed. Given the number of moving parts in urban projects and their increasingly complex nature, supervision usually consumes a good deal more time than in more conventional or straightforward projects. If this is not taken into account in planning for the supervision of the project, problems such as those mentioned in the preceding paragraphs, are likely to persist. * 49 - PROJECT COMPLETION REPORT NICARAGUA EARTHQUAKE RECONSTRUCTION PROJECT INDUSTRIAL COMPONENT (CREDIT 389-NI) ー 5 り ー メ森 f ウぐe 多ん そ - 51 - NICARAGUA METHQUAKE RECONSTRUCTION PROJECT INDUSTRIAL CUM-PO-MT I/ Credit 389-NI PROJECT-COMPLETION REPORT I. Introduction 2/ A. Background 1.01 On December 22, 1972. Managua, the capital of Nicaragua, was struck by one of the worst earthquakes in Latin America's recorded history. It killed about 16,000 persons, injured 20,000 more and destroyed or damaged 27 k*2 of the city. In the city's center, an area of 14 km2 was totally devastated. In addition to the damage to Government offices$ public facilities, commerce and, in particular, small industry, more than 31,000 houses or about 45% of all dwellings in the cityt were completely destroyed* About 200,000 inhabitants (50% of the total population) abandoned the city* Most of the refugees were concentrated in cities within 30-90 km. of the capital, such as Masaya, Tipitapa, Granada, Leon, Jinotepe and Diriamba, 1.02 Three months after the earthquake, refugees began to return to Managua, since the greater part of infrastructuret heavy industry and the services sector had suffered relatively light damage. By mid-1973, a total of over 100#000 persons had returned, bringing the population of Managua to about 310,000. About 75,000 refugees still remained in the above mentioned secondary cities, where they faced serious housing, employment, income and health problems. 1.03 Bilateral and multilateral international agencies responded quickly to the disaster in Managua. On January 4 and 5, 1973, a first IDA mission participated in discussions with the OAS, IDB, USAID, and other agencies on the design of an emergency program for reconstruction of Managua* On January W, IDA informed the Nicaraguan Government that it was prepared to support the reconstruction of Managua through an IDA credit and that it would immediately begin work on the preparation of a project. A second IDA mission visited Managua from January 15 - 20, 1973 to assist the Government to prepare the project. Prior to the earthquake, the Bank had granted loans to the power, water supply and education sectors, but had not worked with the financial, industrial and urban sectors. B. Reconstruction Strate1Z 1.04 The appraisal mission found that although a strategy for reconstruction and development following the earthquake had not yet been formally established, certain basic considerations were generally accepted* I/ This report specifically addresses the industrial component of the project. PCRs have been completed for the water supply, sites and 2 services, power and education components* General background information on the project as a whole, which was included in the PCR's of other components* has been included herein for the sake of completeness. - 52 - Since it was not feasible from either the economic or technical viewpoints (taking account of relocation costs and expected reduction in earthquake risks) to relocate Managua, efforts were to be directed towards (a) restoring remaining services and productive capacity in Managua to full operation as quickly as possible; (b) providing adequate and safe housing, particularly for returning workers; (c) reducing the risk of similar extensive earthquake damage in the future by taking measures to deconcentrate Managua's central district, improve building standards, and support decentralization away from Managua by locating housing and industries in secondary cities; and (d) economizing on resources by making the greatest use of still existing infrastructure and deferring high-cost investments until a clearer strategy had been developed. 1.05 This framework conformed with the recommendations of the International Advisory Panel on Reconstruction and Redevelopment of the Managua Region, which was jointly sponsored by IDB, the 0AS and IDA at the request of the Nicaraguan Government. As emergency relief efforts were being phased out, various lending agencies supported rapid initiation of medium and long term rehabilitation efforts. USAID provided a US$3 million grant for temporary housing and a US$15 million loan for budget support to the Government in early 1973. At the same time, IDB was processing two loans; US$4.2 million for agroindustries and US$16 million for rebuilding university facilities, the telecommunications system, and provision of credit for small and medium-sized industry. An existing IDB financed water supply and sewerage project was modified to take into account immediate reconstruction needs. II. The Industrial Component A. Project Objectives 2.01 The overall objectives of the project were to help meet priority needs through rapid implementation of immediate earthquake rehabilitation measures and to lend support to a long term strategy of deconcentration of greater Managua and decentralization among secondary cities. About one-half of the urban sites and services component and all of the industrial component were aimed at achieving the latter objective by providing housing and employment opportunities. B. Project Design and Cost 2.02 Taking into consideration the programs of other agencies, an appraisal mission, which visited Nicaragua from February 6 to 23, 1973, identified a project comprising five components: low-income sites and services; medium-sized industry; secondary education; water supply and power. The appraisal report was completed by April 20, 1973, and a Credit of US$20 million was presented to the Board three weeks later. The Credit Agreement was signed on June 6, 1973. It became effective on August 7, 1973. 2.03 The total cost of the project was estimated at US$30.3 million, of which US$16.6 million represented the foreign exchange component. The counterpart contribution of US$10.3 million to the US$20.0 million IDA credit would primarily be financed by the Government, including US$5.0 million from the Nicaraguan Housing Bank (BAVINIC), US$0.9 million from the Ministry of Education, US$2.5 million from the National Development Institute (INFONAC), - 53 - US$1.7 million from the National Power :,nd Light Company (ENALUF), and US$0.2 million from the Managua Water Company (AGUADORA). The Project and its separate components were to be financed as follows: Table I (US$ Million) Component Total IDA Credit Counterpart Financing Sites and Services 13.0 8.0 5.0 Industrial Financing 5.0 2.5 2.5 Education 2.9 2.0 0.9 Water Supply 2.7 2.5 0.2 Power 6.7 5.0 1.7 Total US$30.3 US$20.0 US$10.3 C. Industrial Component 2.04 US$2.5 million of the IDA credit was allocated to the industrial component of the project. The component consisted of two sub-components: US$0.3 million for financing of industrial sites and services in secondary cities, (Masaya, Granada, Jinotepe and Leon); and US$2.2 million for financing of plant, equipment and buildings for an estimated 30 or more medium-sized industries, which were expected to locate in the secondary cities and thus provide the major employment linkage to beneficiaries of the housing sites and services component. The sites and services and industry components were designed to reinforce each other. The absence of permanent manufacturing employment precluded locating a larger percentage of serviced housing lots with core units in the secondary cities. The 3,250 serviced lots in these cities would have accommodated a permanent population increase of 18,000 to 21,000, for which an estimated 1,200 jobs would have been created by the financing provided under the industrial component. 2.05 It was expected that this component of the Credit would have been fully committed within six to nine months and disbursed within eighteen months; i.e.,C$7.5 million (US$1.07 million) in 1973 and C$10 million (Us$1.42 million) in 1974. The Association would disburse 50% of amounts disbursed by INFONAC under individual subloans. Documentation would be retained by the borrower and reviewed by the Association during the course of project supervision missions. The Credit was to be relent to INFONAC at 6.75%, to enable it to obtain a spread of 2.0% within its current lending rate of 8.75%. INFONAC subloans would finance fixed assets for periods of up to 10 years, including up to 3 years of grace. 2.06 Industrial Sites and Services. The objective of the industrial sites and services subcomponent was to enable a signficant number of medium-sized industries to relocate in Nicaragua's secondary cities as part of a deconcentration and gradual decentralization process, by providing them with prepared industrial land and facilities at reasonable prices. The - 54 - cities of Leon, Jinotepe, Masaya and Granada, as well as private groups were expected to prepare specific proposals for development of industrial zones. The industrial component included US$300,000 earmarked for the preparation of industrial sites in these cities. The total program was expected to cost US$2.0 million over a five-to-eight-year period. It was expected that prospective sub-borrowers would have been identified more specifically by the time detailed engineering for household sites and services had been completed, and that invitation for bids for the latter would have included the industrial site preparation. Industrial land needed for the medium term in each of the designated cities was calculated to be 20 ma. (13 ha.) maximum. Land acquisition costs (estimated at C20,000 - C$50,000 per ha.) constituted part of the local counterpart contribution and was not to be financed by the Association. Cost estimates included the provision of industrial and potable water, a sewage system, roads, fences, electricity, and telephone lines. Estimates were that infrastructure could be provided for C$10.7 per square meter of total land, or C$13.4 per square meter of usable land. The average medium-size firm would require one-third of a ma. and the costs estimated per firm for Granada and Jinotepe were C$6,250 for land and C$39,500 for infrastructure; and for Leon and Masaya, C$16,000 and C$49,000, respectively. In effect, IDA was expected to finance 50% of the urbanization costs to initiate a program of incremental development of industrial sites and services. 2.07 Investment Subprojects. Under this subcomponent, it was expected that IDA would finance more than 30 sub-projects, with an average size subloan of C$550,000 (US$78,000). It was also anticipated that 22 of these would be earthquake damaged plants which had decided to relocate outside Managua. Not more than 50% of each subloan would be financed by IDA. INFONAC normally required a 60:40 debt equity ratio but was permitted to -ower the equity requirement to 10% for sub-borrowers severely damaged by the earthquake but who were otherwise good credit risks. It was estimated that the foreign exchange component of the aggregate sub-projects would not exceed 50% of total costs, excluding working capital. In the case of industrial buildings, the indirect import component was estimated at 25-30%. On this basis, IDA's financing would effectively cover 100% of foreign exchange financing, both direct and indirect. D. Instituto de Fomento Nacional 2.08 Background. The establishment of a national development bank in Nicaragua was first recommended by a Bank economic mission, which spent one year in the country in 1951-1952. Instituto de Fomento Nacional 'INFONAC), a government-owned development bank, was created by Decree No. 54 in November 19, 1952 to "increase, diversify, and rationalize national production in all its aspects". Consistent with its broad mission, the institution became a multi-purpose development bank, providing credit, investment capital, technical assistance and research to agriculture, livestock, industry, fishing, tourism, service industries and even to consumers. INFONAC carried out considerable promotional activities, particularly for large-scale projects requiring substantial development financing. INFONAC put special emphasis on industrial lending only after the earthquake of 1972, when it received a large inflow of foreign resources and became executing agency for the Industrial Component of Credit 389-NI. - 55 - 2.09 Management and Staff. INFONAC's highest policy-making body was its Superior Council, which met at least once a year. It was chaired by the Minister of Economy, Industry and Commerce, and included the Minister of Finance, the Minister of Agriculture, the Director of the National Planning Board, the President of Banco Central de Nicaragua (BON), the President of Banco Nacional de Nicaragua, INFONAC's General Manager (without vote), 2 representatives of minority political parties,3/ and 2 representatives of the private sector (agriculture and industry)47. The main functions of the Consejo were to fix interest rates, establish the Executive Board, select an internal auditor, select the general manager, approve the annual report, and formulate operating plans (the last 3 subject to the approval of the President of the Republic). Management and administrative functions were entrusted to an Executive Board comprising 8 members who, except for INFONAC's General Manager, were not members of the Superior Council. The members of the Board were INFONAC's General Manager (Chairman), a representative of the President of the Republic, 3 members appointed by the Superior Council (experts in agriculture, economics and a representative of the private sector), and 2 representatives of minority parties. The Board's main functions were to raise resources, carry out operating programs, approve financial statements, approve the annual budget, and appoint department heads. INFONAC was organized into 4 departments (Bancario; Estudios, Supervision y Control; Fomento y Desarrollo; Administracion General). The department heads reported directly to the General Manager, who had no deputy, but used an advisory staff to assist him in arriving at important operational and management decisions. INFONAC wae expected to initiate its own program of institution building, and had undertaken to formulate, or engage consultants to develope a program for improving its internal organization, operating procedures and accounting system; in particular, separate accounting for its industrial and agricultural portfolios, and its research and development program. Separate accounts were to be maintained by INFONAC for sub-projects involving proceeds of Credit 389-NI to be audited by independent auditors acceptable to IDA. 2.10 Role as Implementing Agency. INFONAC was judged at appraisal to be capable of making a technical and economic evaluation of each proposed subproject and administering the industrial component of the Credit, but it was recognized that there was considerable room for Improvement in theseareas. This was reflected in IDA's decision to station a Resident Project Officer (RPO) in Managua for 14 months, beginning in May 1973, to monitor INFONAC's appraisal methodology, and review its approval/rejection processes. This effort was to be supported by frequent supervision missions conducted by the Industrial Projects Department, which had assumed responsibility for implementation and supervision of this component. III. Project Implementation and Impact A. Investment Subprojects 3.01 By May 1973, INFONAC had submitted 26 subprojects for IDA financing, of which 15 had been approved, 9 were awaiting additional information and 2 were rejected. As Credit 389-NI only became effective on 3/ Appointed by Nicaragua's President from lists submitted by the relevant political party or association. 4/ Idem. - 56 - August 7, 1983, INFONAC financed 4 of the approved subprojects under a KfW line of credit, and 4 others were withdrawn by their promoters, leaving 7 of the original 15. In September, INFONAC submitted 11 additional subprojects to the RPO who had begun to work directly with the institution. The RPO informed Washington that the information provided by INFONAC was insufficient in many cases (i.e., lack of breakdown of costs or proposed financing, lack of full appraisal and missing approval documentation), and that consideration of these projects should be delayed until the required information was obtained. In November, the RPO was empowered to grant authorization to withdraw from the credit account for subprojects, in order to avoid lengthy exchanges of comments and recommendations with Washington. The RPO spent considerable time with INFONAC staff reviewing subprojects, most of which required additional work before they could meet minimum appraisal standards. Subsequently, the RPO granted INFONAC authorization to withdraw for 31 more subprojects, although 4 were eventually cancelled. 3.02 With the departure of the RPO in August 1974 the quality of appraisals became a long-distance problem, more difficult to resolve through correspondence. Only I of 10 subprojects submitted to Washington during October 1974 was initially approved, and at the end of 1974, only 38 subloans were outstanding for a total commitment of US$0.6 million. However, in early 1975, most pending subproject issues had been resolved and an additional 18 subprojects were approved. By August 1975, 68 subprojects had been approved and a total of US$2.2 million committed. Although 8 of these subprojects were later cancelled, they partially were replaced by new approvals, resulting in a total of 63 subprojects being financed under the project. By June 30, 1976 the industrial component had been completely disbursed. 3.03 Since INFONAC was required to match IDA funds under any subloan, the subloan free limit of US$100,000 actually meant that Bank approval was required whenever IDA financing reached US$50,000. In retrospect, it is difficult to tell whether this limit was a meaningful one. All subprojects were reviewed to see if they complied with the requirements of the Project Agreement for Part D (The Industrial Component). However, individual memoranda covering the adequacy of INFONAC's appraisal for subprojects over the free limit were not written, and it is difficult to tell if these subprojects received any closer scrutiny from IDA than subprojects under the limit. 3.04 A total of 63 subprojects were financed, more than twice the 30 subprojects anticipated at appraisal. Average subloan size was C$238,000 (US$34,000) as compared to appraised estimates of C$546,000 (US$78,000). During the first year of implementation, when one-half of the subprojects financed were processed, subprojects tended to be much smaller (the average subloan was US$13,620) than they were in the following year ($61,000 on average). This was due in part because the RPO had not approved any subprojects over the free limit, due to insufficient justification in the appraisals submitted. All 9 subprojects over the free limit were approved in the following year, including 7 for the maximum financing allowed under the loan of US$250,000 (IDA-US$125,000; INFONAC - US$125,000). 3.05 The total investment financed under this component was US$21.6 million, of which US$18.3 million was for fixed investment (85%) (Annex 1, Table 2). INFONAC's total financing of US$4.4 million provided 20.4% of - 57 - total financing requirements, and IDA's share was 10.2% or US$2.2 million. In a few large projects, IDA/INFONAC financing was a small portion of the total investment cost, and this was sufficient to skew the results, and to reflect a low proportion of IDA/INFONAC financing for the component overall. Subloans over the free limit accounted for 55% of the total assets financed and 50% of the total funds lent by INFONAC. In some cases, INFONAC provided additional financing for those subprojects from other sources. 3.06 Seven enterprises, which accounted for 35% of total investment financed and 26% of total IDA/INFONAC financing, were located outside of, but very close to Managua's city limits. These enterprises were part of Managua's industrial belt, which stretches along Lake Managua to the north and south of the city. In financing these subprojects, IDA was not strictly adhering to the project's goal of decentralization. 3.07 Three-fourths of the subprojects financed were concentrated in the construction, food processing, wood products and textiles subsectors. These 4 subsectors also accounted for 69% of total employment creation of 2,057. This total far exceeded the appraisal estimate of 1,200-1,500 jobs. The investment cost per job averaged US$10,695 (no estimate of this had been made at appraisal). As no information is available regarding incremental output or value added generated by the subprojects financed, it is difficult to fully assess the economic benefits provided by this component. In connection with the quality of investments, the report of the last IDA supervision mission (October 1976) does state that at that time, 54 of the 63 subprojects financed had commenced operating, that 42 were already operating above projected levels, and that only 8 were having difficulty meeting their operating targets. 3.08 The objective of complementarity between the housing and industrial components was sound; however, the design of the industrial component was not fully consistent with this goal. Investment subprojects became eligible for IDA/INFONAC financing if they were located anywhere outside the city limits of Managua. As a result, just one-third of the total financing granted went to subprojects in the same secondary cities in which the housing sites and services were located. B. Industrial Sites and Services 3.09 Successful implementation of industrial sites and services in Masaya, Granada, Leon and Jinotepe became a matter of increasing concern in 1973-1974 due to: (i) lack of clear guidelines as to who would pay for, construct, own, and administer the industrial sites, (ii)INFONAC's overall lack of experience in this field, and its lack of knowledge of actual demand for industrial park space; (iii) the time required to obtain the land for these sites; (iv) difficulties in obtaining approval for the basic design for a small industry-artisan's building prepared by INFONAC and its consulting architects (it went through three major revisions during 1974 alone). Concerning the first point, the greatest confusion existed about who were to be the beneficiaries of financing under the sites and services subcomponent. While the Part D Project Agreement cle&rly stated that the development of industrial serviced sites would be financed through subloans, the SAR is not clear on the subject. In effect, Para. 4.01 omits mention of subloans for such financing, while Para. 4.02 states that city councils as well as private - 58 - groups might "develop financing proposals". It is clear then, that the issue of who the specific sub-borrowers might be was left to the future; they would be identified when detailed engineering for the housing sites and services component had been completed. In the final analysis, INFONAC contracted with BAVINIC to carry out industrial site preparation work in Masaya and Granada. Bank funds were on-lent by INFONAC directly to BAVINIC, no subloans to investment enterprises were made, dnd the Credit Agreement needed to be amended. This took place on January 26, 1976. As far as can be determined, subloans were not made for the 2 other sites. 3.10 IDA financing of industrial sites and services represented just a small portion (roughly 15%) of the total investment costs, and Bank funds were disbursed in 1975 to pay for civil works carried out at the Masaya and Granada sites. The component continued to develop slowly overall, and by late 1976, when supervision ceased, only the Masaya complex had been completed. Four factory buildings containing 96 modules had all been rented, and 91 were occupied by 28 enterprises. Construction in Granada and Leon was far behind schedule, and only the infrastructure had been completed. Only the site preparation work had been carried out at Jinotepe (Annex 1, Table 1). According to INFONAC, construction at the other sites was being delayed until the Nasaya park had demonstrated its success. 3.11 The industrial sites and services portion was linked to the same cities as the housing component. However, although design standards and cost estimates were developed during appraisal for the housing sites and services, this was not done for the industrial sites component. In addition, the housing bank, BAVINIC, had the technical capability to implement the housing component, while INFONAC did not have the expertise to deal with the industrial sites. This resulted in these two components being out of phase (except for the Masaya industrial site). INFONAC did work with BAVINIC staff in the design and construction of the sites, but this relationship was not spelled out in the project documents. The long delays which occurred in the acquisition of land (and which took up a large portion of the RPO's time) affected not only the housing component, but the industrial sites as well. When the re-concentration of population back to Managua occurred in 1974-1976, the industrial sites component (except for Maaaya) was not sufficiently advanced to offer alternatives to firms wishing to move back to Managua. Another major difficulty with the sites, was that the appraisal report did not establish who would own the industrial sites, or how they would be managed, and was unclear as to who would be the beneficiaries of this financing. 3.12 Just 30 kms. from the center of Managua, Masaya served as a convenient location for firms which were reluctant to locate in or return to Managua, but which wanted to be sufficiently close to its labor pool or to its market. Granada was 45 kms, from Managua and Leon was 90 kms away. With economic activity clearly centering on a reconstructed Managua, demand for establishing new industrial enterprises was clearly related to their nearness to Managua. 3.13 Utilization of the Industrial Component was much slower than had been anticipated at the time of appraisal. Commitment of loan funds had taken 24 months rather than the 6-9 months anticipated at appraisal. Disbursements had required 36 months rather than the 18 estimated. After the - 59 - departure of the RPO in August 1974, the executing agency was next visited by a supervision mission in August 1975. Disbursements were completed by July 31, 1976, and a second supervision mission visited INONAC in October 1976. No completion report was issued at the time. C. Performance of INFONAC 3.14. During INFONAC's four administrations since 1966, and particularly after the 1972 earthquake, the institution's financial resources were overcommitted and used to finance a considerable number of high-risk projects. INFONAC had acquired a large equity portfolio which produced almost no return on investment. At the same time many loans were not being repaid. The quality of portfolio declined, loans became uncollectible, were written off, and INFONAC's equity was eroded. As a result, INFONAC exhausted its liquid resources and became virtually decapitalised, having to recur to expensive short-term Eurodollar borrowings to overcome its tight liquidity situation and service part of its debt obligations (Annex 1, Tables 3 - Table 5). Its debt/equity ratio skyrocketed from 2.4 in 1972 to 22.8 in 1975, with relatively expensive foreign loans representing 81.9% of the total debt. As a result, INFONAC's lending and equity investments had to be out in 1976 to about 1/5 of the previous year's levels, and its credibility among potential borrowers as a reliable financing source was damaged severely. The reduced lending levels in 1976-77, together with about M8300 million in government equity contributions, allowed INFONAC to overcome its most serious liquidity problems; however, the quality of INFONAC's portfolio continued to decline and almost two-third of its portfolio was affected with arrears above one year. 3.15 In order to deal with the alarming deterioration of INFONAC's portfolio and the resulting erosion of its net worth, the institution was reorganised in 1976, and its assets were separated into 2 funds; the Yondo de Operaciones Ordinarias (PONDOR) for financing projects which had met or could meet creditworthiness criteria, and the Fondo de Desarrollo Economico y Social (FONDES) for operations which could not meet these criteria. This was an attempt to isolate its doubtful portfolio from the rest of its assets. INFONAC's equity was valued at C$180.4 million, and PONDES was capitalised with C$ 97.6 million, and PONDOR with C$82.8 million. Using the latter fund as a lending channel, the Bank was prepared to consider a loan of US$16 million through INFONAC to industrial borrowers. However, the project was stopped when civil strife broke out. In 1979, INFONAC was dissolved by the new government and its assets were taken over by a new institution, the Banco Nacional de Desarrollo, which was formed from the consolidation of INFONAC and two other financial institutions. IV. Lessons Learned A. Investment Subprojects 4.01 In spite of long delays, the investment portion of the industrial component exceeded its overall objectives in number of enterprises financed and amount of employment generated. The delays encountered in implementing this subcomponent were mainly due to institutional weakness of the executing agency, and its lack of a sense of urgency in utilising these funds. However, sufficient guidelines were not provided by IDA (statement of operating policy, appraisal and supervision procedures), and in spite of the - 60 - presence of the RPO, INFONAC's staff and procedural weaknesses led to a high rate of subproject rejections and a long process of review and up-grading of appraisals. In addition, INFONAC, with many sources of financing available, felt free to use other resources and cancel subprojects after they had been ipproved by IDA . The small size of subprojects was also an important fector. The appraisal estimate of the number of subprojects approvals was reached within the time limit anticipated at appraisal, but the relatively small amounts involved (one-fifth of the appraisal estimate) meant that many more subprojects had to be approved to fully commit available funds. Although initially many small subprojects were approved, subsequently a reversal in the above pattern occurred, and several large subprojects were also approved, which were sufficient to commit one-half of the amount allocated for investment subprojects. This indicated a shift in INFONAC's attitude away from financing small-scale enterprises. There was also a shift away from the decentralization objective, and an important number of subprojects were financed that were technically outside the Managua city limits, but were effectively part of the city's industrial zone. 4.02 INFONAC's financial and institutional weaknesses were well known and were a major part of the rationale for stationing an RPO in Managua. Yet, there was a limit to what the RPO could do. He could not, (nor was he meant to) substitute for INFONAC staff. On this basis, the RPO's presence is difficult to justify in terms of cost effectiveness, although it did help speed up project implementation. The major lesson learned is that even an extraordinary staff imput from IDA was not sufficient to make up for basic institutional deficiencies in the executing agency. B. Industrial Sites and Services 4.03 In contrast to investment subproject financing, this subcomponent did not achieve any of its objectives. Its success was tied to a broad national policy objective which did not materialize. With the government remaining in Managua and the reversal of the population flow back into the city (by Mid-1973 one-half of the inhabitants who had abandoned the city after the earthquake had returned), economic activity again became centered in Managua,and decentralization lost most of its justification. In addition, no preliminary designs, detailed engineering specifications or costs estimates were prepared for this component, nor was an institutional structure developed which could provide this. In short, the executing agency, (INFONAC) had no experience in this field, and a supporting structure from other institutions was not created to provide it with the necessary technical assistance. In addition, the amount of financing provided by IDA (about 15% of the total cost) was not sufficient to provide it with much leverage or to give IDA a major role in the subcomponent's implementation. The major lessons learned are that it may have been inappropriate to pursue broad policy objectives through an emergency lending type of approach, and that seed money is not enough if a basically weak institution is carrying out a complex task in a field with which it is not familiar. C. Summary View 4.04. To be successful, emergency lending should focus on goals that are attainable in the short-to-medium term, and on providing the proper institutional, financial and technical support to achieve them. In Credit - 61 - 5941, too sch emphasis was placed on efforts made by IDA (speed of processing, large manpower commitments) without sufficiently linking this to the ability of the beneficiary to deal with the problems of implementation. In addition, the need to develop a full range of design and engineering procedures overloaded the executing agency, which was not provided with sufficient back-up technical assistance. Also, the time involved in the purchase of land delayed the commencing of the sites and service portion of the project. ?or the future, emergency lending projects should (i) require land purchase as a prerequisite to appraisal; (ii) focus on short-range objectives, (iii) avoid technical or institutional complexity in project design; and (iv) utilise simplified procedures and strong technical assistance support. * 62 - ANNEX 1 Table 1 NICARAGUA EARTHQUARB RECONSTRUCTION PROECT INDUSTRIAL CREDIT COMPONENT Credit 389-NI PROJECT COMPLETION REPORT Instituto de Fomento Nacional Investment in Industrial Sites and Services as of September 30. 1976 (C$000 Masaya Leon Granada Jinotepe Total Land 405 357 304 357 1,423 Infrastructure 1,843 3,711 1,810 10 7,374 Buildings 1,967 917 - - 2,884 Preoperating Engines 188 175 175 175 713 Total 4,403 5,160 2,289 542 12,394 &63& A闢觔蠶 Xl 黝 bl ● 2 ！ ， 〕〕 〕 !--,!〕〕〕 〕〕 64 ~ l T~ 9lax= pm= ~Cemomf~ Craft 39M DWMM IZ IMM Nå^ B~ SM AS CP IOMM 31 IN%n~ (WC1- 1975 1976 1977 .1978 GAM »0 B~ 25.9 29J 22.8 801 WAN FeRvan DU= 461.9 410.5 AGUGULTUM 790.6 705.7 104*2 1220 LIVUM 65.6 65.4 om 2.0 2BJ OMERÖM 33.2 eB.O Sin~ -åm 705.7 ~SW.T n4.6 DM= &ommffi R~=9 105.9 1293 129,0 127.6 ODM im 25.7 29.3 19.2 20.0 summ 955.4 _~ -M = UM DOURM WAM (100.6) MIBJ) (117.7) UOB.3) w WAN FeRnkm C4,8 MS '6901 M.0 UNHS~ paa~ M~ 49.5 60.4 84.0 IW.4 PRO~ 50.5 52.6 46J 46,8 5~ 100.0 T3.0 WO T47.2 M= : LM (140,574 HK) 1.0 55.1 55.0 55,0 1FAj~ 22.1 2.0 2B*O 22,8 FRaffim IVREM IEL NY~ 0.5 39.9 50.6 77.4 ouffi Emmer~ 4.3 3.9 4.2 77.4 Duillm PAM 13.4 15.6 16.2 16*6 TOM projeM. 41J = = ^ DWES~ FOKUM» 141.3 255.5 35.3 319.0 IESS: Es~ 1 (16.0) (33.1) (39.1) L34.?1 NU DNes~ ERTFam 15J- 222.4 59.2- -OVå oma A~ A~ ~~ IN Lim CP WAN R~ = MT VAM 34.7 35.3 96.3 118,7 ~ å= 1.8 3.1 5.1 Acua~ Dumrom 21 94 7,8 10.1 T~ KL9GUJA~ 1~ 36.8 46.5 -107.-2 133.9 wmi« & avm= 8.2 13.6 16.4 17.5 IM: Dansc~ (3,8) (4.7) jL.91 _Q.SI NEr FDM å~ 4.4 8.9 10.7 10.3 UM: MVAL3~ (53.1) (53.1) (53.1) A~ 1047.2 980.0 1,024.0 1,137.7 - 65 - Toble 4 NICAQA FARlIQUAE lR00NSEUCI W DC UoSTRLuAL CREDIT 024ERr Credit 389-NI PM0JECT 02lPtI~N REMEB NII IE FOENI NACI~AL BAANCE SHE= AS OF CEMBER 31 IN MILLICNS OP C$ 1975 1976 1977 1978 P ID 1 )AR 54.3 59.7 42.5 27.6 oER 1 EAR 18.8 21.0 26.3 37.2 1UPAL 73.0 80.7 68.8 64.8 IDAN PAYABIE CiENY ^DCAL 1/ 60.7 94.1 122.8 GNRE XKC MAN( 636.1 726.7 722.6 1mTAL 866.7 696.9 820.8 901.0 AmIRSJERD PUNDM 2/ 38.4 15.7 12.1 AC(DIM PAYAE ~ 51.4 55.7 50.3 58.1 1MTL LABILIXIES 1,029.5 849.0 952.0 1,023.9 CAPITAL INITIAL SUBSCRIPTIc, 50.0 50.0 50.0 180.4 IüRASES 53.8 163.6 165.9 2.3 DRATIONS 7.0 7.0 7.0 - 1TAL PAID-IN 110.8 220.5 222.9 182.7 ~ EFICIT & REVALUATION (93.1) IESS ACMIIATM (89.5) (150.9) (68.9) NET CAPITAL 17.7 131.0 72.0 113.8) UTAL LIABILITIES &CAPITAL 1,047.3 980.0 1,024.0 1,137.7 ONflNr 1JABILITIES 1/ 245.7 238.3 225.1 1_/ Breakdown nt available 2/ Funds m~ned on behalf f IFWAGAN and Frutera del Lagp. - 66 - Table 5 1 URMUE 1aCSwi 1w2JEr Credit 38941 DerTEi 5 1C~00D NAGLe L S'M W M EfEMifl AS OF iEEMW 31 (C$NfiLTS) 1975 1976 1977 1978 DMEES DID 72.9 87.8 76.0 59.1 m CK uE er 1 ES - - 2.1 6,8 O~leSSC Dum 5.3 7.1 5.6 DIV~D DOME 0.1 0.3 0.5 26.7 oDE Dim 4.1 8.8 11.5 1mm L iE 82.4 103.9 795 INER! & 02«SSCM PAID 77.7 68.8 69.1 91.0 GE^ & NI~ 19.0 22.7 26.9 34.4 mmTAL CERMADG EK E .7 91.5 9.0 125.4 eFERATDC =R1 (ID~) (14.3) 12.4 (0.2) (32.8) SliK WSTS - AGRIBT 3.5 3.6 7.9 1 P~WISIK 1%R ian 57.4 57.3 3.9 Fm!LIO Wrfl 14.8 11.2 2.8 TDL OM ER ~ 75.7 22.1 14.6 NET P IT (I~S) (90.0) (9.6) (14.8) (32.8) jf These cots are Ilnrli~ In gn~a1 and 1idsvratie expenses. - 67 - PROJECT COMPLETION REPORT NICARAGUA EARTHQUAKE RECONSTRUCTION PROJECT EDUCATION COMPONENT (CREDIT 389-NI) PROJECT PERFORMANCE AUDIT REPORT NICARAGUA: SECOND MANAGUA WATER SUPPLY PROJECT (LOAN 808-NI) AND WATER SUPPLY COMPONENT OF EARTHQUAKE RECONSTRUCTION PROJECT (CREDIT.389-NT) Preface This report presents the result of a perforuance audit of tha Second Managua Water Supply Project and the water supply component of the Earthquake Reconstruction Project in Nicaragua. The Second Managua Water Supply Project was supporfed by a loan of US$6.9 million (Lo&n 808-NI). Following the earthquake in Nicaragua, the Bank extended a credit of US$20 million (Credit 389-NI) to the Government of Nicaragua, to support an earthquake reconstruction project with a water supply component of US$2.5 million. The second Managua Water Supply Project and the water supply component of the Earthquake Reconstruction Project were, as events turned out, essentially two financing sources for the same pro- ject and have therefore been dealt with jointly in the performance audit. The Project Performance Audit Report consists of a short Memorandum, prepared by the Operations Evaluation Department (OED), and a Project Completion Report (PCR), prepared by the Latin America and Caribbean Regional Office (LAC). OED has reviewed the PCR, the Appraisal Report and other project documents and discussed the project with Bank staff. Comments made by OED on an earlier draft of the PCR are reflected in the present version. On the basis of this limited review process, OED finds the PCR to be reasonably comprehensive, balanced and internally consistent and accepts its analysis and conclusions. The memorandum therefore summarizes the main findings of the PCR, underlines certain noteworthy features of the project and highlights the points of particular interest. - 69 - PROJECT COMPLETION REPORT NICARAGUA - EARTHQUAKE RECONSTRUCTION PROJECT PART E OF THE PROJECT - EDUCATION (CREDIT 389-NI) I. BACKGROUND AND CONTENT OF THE PROJECT 1.01 Project Background. The Government of Nicaragua requested the Bank Group assistance in financing a reconstruction project after a devastating earthquake struck Nicaragua in December 1972 and destroyed the central part of Managua , the capital city. An IDA reconnaissance mission visited Managua in January 1973, to assess the earthquake damage on ongoing projects in the water, power and education sectors and determine how best to assist in the reconstruction effort. An appraisal mission was sent in February 1973. Because of the pressing need and given the time available, it had not been possible to carry out a detailed project analysis as is customary. The agreement for a credit of US$20.0 million was signed on June 6, 1973 and became effective on August 7, 1973. Of this total amount, US$2.0 million was allocated for the education component. 1.02 Project Description. The earthquake levelled the great majority of schools in Managua, where it was estimated that 70% of primary and 85% of secondary school capacity was destroyed. The IDA reconstruction efforts in the education sector were concentrated on secondary education since the primary and university subsectors were to receive assistance from USAID and IDB respectively. The education Lomponent therefore comprised: (a) the construction of 4 temporary prefabricated general secondary schools, Grades 7-11 (4,000 student places); (b) the construction, furnishing and equipping of 2 permanent multilateral secondary schools, grades 7-11 (2,900 student places); and (c) the construction and furnishing of 1 permanent technical institute, Grades 12-13 (500 student places). 1.03 Furniture salvaged from earthquake damaged schools were to be used in the four prefabricated general secondary schools. The U.K. Overseas Development Agency (ODA) was expected to contribute some US$0.9 million to the technical institute component in the form of technical assistance to establish the institute, and for equipment provision; the signing of an agreement satisfactory to the Association between ODA and the Government of Nicaragua was a disbursement condition against this component. 1.04 The project was to be implemented in two phases. It was estimated that Phase I (prefabricated schools) would be completed by December 1973, and Phase II (the remaining components) by June 30, 1974. 1.05 Project Revisions. Only one amendment (dated November 2, 1977) of the content of the education project was effected. One of the two proposed multilateral secondary schools was deleted. The capacity of the remaining school was increased from 1,450 student places to about 2,000, and instead of being used as a new multilateral secondary school, it was used to house the Ramirez Goyena National Institute, the country's largest general secondary school (equipped under the First Education Project - Loan 532-NI, but destroyed in the December 1972 earthquake). The reasons for the revision were: - 70 - (a) substantial construction cost increases above appraisal estimates (about 64%); and (b) the supplementary measures needed to properly implement the multilateral schools system (i.e., curriculum development, teacher training, analysis of the job market and coordination with other programs) had not yet been carried out and were unlikely to be accomplished as part of the earthquake reconstruction project; 1.06 The Credit proceeds were reallocated accordingly. II. Project Implementation 2.01 Overview. The education component of the project was implemented less satisfactorily than expected at appraisal due to the economic difficulties and socio-political problems facing the country after the December 1972 earthquake and particularly in CY78-CY79, which culminated in the change in government. On the other hand, given the tremendous reconstruction effort faced by the country, the lack of qualified personnel and the disorganization caused by the earthquake, the appraisal estimate of government capacity appears to have been too optimistic. All loan covenants related to the education component (Annex 1) were, however, satisfactorily complied with. The project was fully completed in February 1980 (56 months or 250% longer than the original completion date of 06/75), although all construction (excluding the deleted multilateral school) was substantially completed for occupancy in December 1977 (30 months longer). The Project Implementation Unit (PIU) leadership's lack of management skills, frequent changes of key project staff and site acquisition delays due to the shortage of funds contributed in great part to implementation delays and the 13% increase in total project cost (from US$3.02 M to US$3.43 M) as a result of these delays. 2.02 Project Management. Implementation of the education component was carried out by the Department of Investments and Financial Assistance (DGIAF) under the Ministry of Education (MOE) which was in charge of the execution of the First Education Project - Loan 532-NI. The performance of DGIAF was, however, less than satisfactory primarly due to weak leadership, delays in the decision making process, frequent changes in key staff and lack of coordination with the agencies rendering technical assistance to the project. Considering that the project was principally one of school construction, it was unfortunate that no architect or engineer was appointed to the project staff until 1975 (2 years after signature). Construction supervision was therefore undertaken by CONESCAL 1 /architects and engineers during their occasional visits. Furthermore, DGIAF was also encountering difficulties with the implementation of the Loan 532-NI. Management improved from 1977 when responsibilities for the reconstruction project as well as Loan 532-NI were consolidated under the PIU charged with the implementation of the new Second Education Project - Loan 1244-NI. During this latter period, however, 1/ UNESCO Regional Center for School Construction. - 71 - the socio-political and economic conditions of the country deteriorated further (culminating in the 1979 civil war), imposing a greater handicap on the PIU and paralyzing project Implementation for about six months in 1979. 2.03 School Construction. The school facilities actually constructed reasonably attained the appraisal objective number of student places to be provided (Table 2.1) although one multilateral school was deleted (para 1.05) from the project content. They are well designed and constructed. Space allocations are reasonable compared to appraisal standards, although much below regional and Bankwide averages for education projects completed between CY73-CY77 (Table 2.2). Table 2.1 Comparison of Student Places Provided No. of Schools Student Places Provided Appraisal Actual Appraisal Actual % Difference General Secondary Schools 4 4 4,000 3,800 - 5% Multilateral Secondary Schools 2 1 2,900 2,280 -21% Technical Institute 1 1 500 780 +56% Total *7 _6 7.400 ii 7% Table 2.2 Building Areas (Sq.m) per Student Place Appraisal LAC a/ Bankwide a/ Actual % Difference Unit A Averae Average Unit A 4/1 4/2 4/3 (1) (2) (3) (4) Gen. Secondary 1.5 b/ 5.0 3.8 1.8 c/ +20% -64% -53% Multilateral 4.0 5.7 5.7 3.8 - 5% -33% -33% Tech. Institute 10.0 8.4 9.3 7.2 -28% -14% -23% a/ Median for projects completed between CY73-CY77. / Does not provide areas for practical arts subjects and administrative offices. c/ Does not provide areas for practical arts subjects. 2.04 General Secondary Schools. The four schools conceived at appraisal and designed as temporary prefabricated units were completed reasonably expeditiously by November 1973 because the plans for these schools had already been prepared by ONESCAL and tendered at the time of appraisal (March 1973). The quality of construction is inferior to that of other project schools but acceptable for their intended use as temporary facilities. It should be noted however, that the construction methods used will not allow for their economic dismantling and erection on other sites, as had been postulated by the appraisal mission. It seems likely, therefore, that they will continue to function in their present locations, although deterioration has since set in due to lack of maintenance and repair work is necessary. Since 111 modules were constructed (11 more than proposed 100 at - 72 - appraisal) the four schools jointly have 95 actual teaching spaces, providing an overall capacity on a two-shift basis for 7,600 students in contrast to the 8,000 originally planned. All four schools have no facilities for practical work. 2.05 One of the four schools, Bello Horizonte, has been converted to a primary school; the projected general secondary school is operating in other premises within the community center at El Progreso. At all events, the present premises are inadequate; the school includes 14 classrooms, a library a small multi-purpose room, two storerooms and two administrative areas (except for the classrooms these last facilities as well as areas for science and practical arts subjects were not provided at appraisal). Pillage and vandalism during the 1979 civil strife have wreaked havoc on the building. The library has been completely destroyed; the school has limited furniture, no equipment, is in a poor state of maintainance and operates in a noisy and busy complex which includes a community center, dispensary and other facilities. The other three prefabricated schools are similar in design and construction to that of Bello Horizonte, and like the latter suffered superficial damage during the civil strife to doors, windows, etc., which are either in process of, or scheduled for repair. Maintenance in these schools has also been neglected in the past. As at Bello Horizonte, a number of modules are in use as storerooms or, administrative units. 2.06 Multilateral Secondary School. The multilateral secondary school (revised capacity 2,000 places) remaining in the project was built as a general diversified secondary school (para 1.05). Construction of this school did not commence until November 1976 (26 months later than appraisal target) due to: (a) delays in contracting consultants to define the school requirements; (b) delays in site acquisition due to lack of budgetary provisions for the site purchase; and (c) delays in finalizing the school designs as result of (a) and (b). Construction was substantially concluded and ready for occupancy in November 1977 (29 months beyond appraisal target); however, equipment still had to be procured (para 2.07). The school is well-designed and actually accommodates 2,280 students: it provides adequate working areas for the various types of school activities (classroom, laboratory and shop work); the system of construction is modular and easily expandable; the structure is durable and materials used in construction are easy to obtain locally, maintain and/or replace. The school has suffered from vandalism during the civil disorder and lack of maintainance, and therefore, supplementary civil works (repair and provision of utilities - water and sewage) needed to be carried out and were completed in December 1979. 2.07 Technical Institute. As constructed, the technical institute is well-planned and appropriately designed for the level of training required. The building, inspite of some minor damage during the civil strife, is structurally sound, easy to expand and maintain. The size of the institute as defined at appraisal (6650 sq. m./500 places) was reduced, with Bank approval, to an area of 5,000 sq. m. for 500 places when the architectural - 73 - brief was completed in January 1974. Delays in site acquisition and planning such as those described in para 2.06 also affected the timely implementation of this component. The building was not substantially completed for occupancy until December 1977, and as constructed, provided 780 places (56% above appraisal) with only a 13% increase in total gross area over that provided in the revised brief. The implementation delays, however, nullified whatever savings could have been realized through the efficient planning of the building. Some minor damage occured during the civil conflict and supplementary works were not.completed until December 1979. 2.08 Furniture and Equipment. Only furniture for the technical institute and furniture and equipment for the multilateral school were provided under the project (para 1.03). An assessment of what remained after the vandalism and theft which occured during the civil strife in 1979, shows that the furniture and equipment acquired for the project were functional and adequate for the levels of training provided. The inadequacy of the remaining stock of furniture and equipment found in the technical institute limit the course offerings in this school particularly in science, industrial arts, home-economics and commerce. Extensive delays in preparing the equipment lists and furniture lists, partly as a result of the delays in contracting specialists to undertake this work, and partly due to management inadequacy delayed the invitation of tenders until mid-1977. Lack of competition required that some furniture be rebid and disputes with equipment suppliers over prices due to delayed awards prevented the expenditious finalization of contracts. Later on during implementation a need arose to acquire supplementary furniture for the general secondary schools (to replace unserviceable ones), and some office equipment for the multilateral school and the technical institute. Final deliveries were not completed until February 1930. 2.09 Technical Assistance. IDA financing of technical assistance for the education component of the project was limited to assistance to the PIU in implementing the construction of the four general secondary schools. This role was satisfactorily rendered by CONESCAL who prepared school designs and supervised the construction of these schools. CONESCAL likewise prepared the architectural briefs for the multilateral school and the technical institute (designs were prepared by private consilting firms). ODA provided the technical assistance covering the educational requirements of the technical institute and the preparation of equipment lists and specifications. The technical assistance agreement between ODA and the government was only finalized in January 1975, and this contributed to the delay in Implementing this component. 2.10 IDA Performance. IDA's overall performance during the project cycle leaves room for Improvement. The credit was processed (from reconnaissance to Board approval) within four months, demonstrating the effectiveness with which the Association responded to the emergency situation. Unfortunately, however, appraisal expectations of the Borrower's - 74 - capacity to expeditiously implement the project appear to have been too optimistic. Considering that the project was one of reconstruction and thus, of an emergency nature, the complex nature of the multilateral schools and the technical institute which involved curriculum, teacher qualification and student intake, do not appear to have been simple project elements to implement in an abbreviated period. During project implementation, an adequate level of supervision was devoted to the project: up to August 1974, an IDA resident project officer was assigned to oversee the reconstruction effort in Managua; and, 8 supervision missions were sent over a a 4-year span up to 1977. It was only when security conditions did not permit visits that no missions were fielded in 1978-79. Some improvement in project execution could have been realized had (a) services of management consultants been provided under the credit and (b) more missions been fielded in CY75 and CY76 thus minimizing the lengthy exchange of correspondence between IDA and the Borrower concerning the technical aspects of the project. III Project Cost and Financing 3.01 Total Project Cost. The total cost of the education component amounted to US$3.43 million equivalent or 13% above the appraisal estimate of US$3.02 million (Table 3.1). The actual cost of the 6 (out of 7) schools built under the project is, however, 59% higher than the appraisal cost of these 6 schools. The cost overruns were mainly due to: (a) the 3-year delay in completing all civil works resulting in a higher than estimated (12%) cost escalation. The cost of services of contractors and architectural/engineering firms were at a premium due to the heavy demand created by the reconstruction projects, building materials were scarce and unavailable even at inflated prices, and wages increased substantially (40% in August 1973 alone); and (b) the necessary acquisition of supplementary furniture for the 4 general secondary schools and equipment for the multilateral and technical schools (para 2.09). Table 3.1 Comparison of Appraisal and Actual Project Costs (costs in US$000s including contingencies) Schools Appraisal Actual % Local Foreign Total Local Foreign Total Difference Gen Secondary 142.0 340.0 482.0 236.7 324.4 561.1 + 16% Multilateral 750.0 990.0 1740.0 606.7 1000.0 1606.8 - 8% Tech. Institute 376.0 424.0 800.0 538.5 722.0 1260.5 + 58% Total 1268.0 1754.0 3022.0 1381.9 2046.5 3428.4 + 13% 3.02 Unit Costs. The construction costs (buildings and site develop- ment) per student place of the completed schools were kept reasonably close to the appraisal estimates (Table 3.2) inspite of increases in the - 75 - construction cost per square meter of building area (Table 3.3), and are significantly below the average unit cost for similar LAC (except the technical institute) and Bankwide projects completed between CY73 and CY77. The insignificant unit cost increase was due to: (a) a reduction in building areas per place (para 2.03) for the multilateral school and the technical institute; and (b) the early completion (in Nov. 1973) of the four general secondary schools which offset the increase in area per student place resulting from the inclusion of additional spaces (para 2.05) which were not provided at appraisal. Table 3.2 Construction Cost (US$) per Student Place (including contingencies and site development costs) Appraisal LAC Bankwide Actual % Difference School Estimate Average Average Unit 4/1 4/2 4/3 (1) (2) (3) (4) Gen. Secondary 118 562 496 134 +14% -76% -73% Multilateral 452 1049 1580 506 +12% -52% -68% Tech.Institute 1340 1340 2964 1392 + 4% +4% -53% Table 3.3 Building Cost per Square Meter Gross Area (cost in US$ including contingencies) Appraisal LAC Bankwide Actual % Difference School Estimate Averg Average Unit Cost 4/1 4/2 4/3 (1) (2) (3) (T) Gen. Secondary 85 163 244 83 - 2% -49% -66% Multilateral 86 163 244 117 +36% -28% -52% Tech. Institute 86 166 288 168 +95% + 1% -42% 3.03 Project Cost Financing. IDA financing of total project cost decreased from 66% at appraisal to 58% at completion thereby increasing the need for local counterpart funds. However, these funds were readily available early during implementation as the four general secondary schools were the first of the various components of the reconstruction project to be completed and therefore had early access to these funds. The reduction in project scope (para 1.05) eased subsequent counterpart fund problems, moreover, due to implementation delays and a low expenditure profile during the succeeding years (1974-77), the budgeted funds were adequate to cover the counterpart needs. Some temporary difficulty was encountered, nevertheless, during 1974, in acquiring of sites for the multilateral school and the technical institute, because funds for the site purchases (about US$0.38 M) - 76 - were not provided for in the budget. The worsening socio-political and economic climate in 1978-79 exacerbated local financing difficulties. However, by this time, the main project expenditures were devoted to equipment and furniture purchases and required little counterpart. 3.04 Disbursements. The appraisal disbursement projections appear to have been too optimistic considering that the government faced enormous reconstruction tasks, which posed significant constraints to speedy implementation. Disbursements during the first year of Implementation fairly approximated the appraisal disbursement projections due to the rapid completion of the four general secondary schools. Subsequently, the civil works and procurement delays were reflected in a low, drawn-out disbursement profile. IV Operating Outcomes 4.01 Overview. Any realistic assessment of operating outcomes must necessarily take into account the damage suffered by the schools in 1979; and the disposition of the present administration in respect to reconstruction priorities, high among which was the literacy campaign launched nationwide in April-October 1980. This latter action program involved all school staff and many students whose normal educational routine was disrupted by participation in the campaign; the physical composition of the schools and the lack of vocational teachers have distorted school timetables and curricula, while an unsettled and floating population resulted in a highly volatile enrollment pattern. These considerations are pertinent to an overview of project achievements. General Secondary Schools 4.02 Enrollments. The school now functioning at El Progeso (para 2.04) operates in three shifts, and provides pre-primary and primary, lower secondary and upper secondary courses. Enrollments in 1980 totaled 1,303 (preprimary 780, lower secondary 419, upper secondary 104); the evening shift includes an accelerated primary education course for adults. Class sizes average 39 (primary) and 33 (secondary); the school has one guidance counselor and one "inspector." Secondary level enrollments in the four schools total 5,569, about 70% of the 8,000 for which the schools were originally intended. Most of the schools also enroll primary students, but enrollment details for this level were not available to the mission. 4.03 Technical (Administrative) Staff. A sample of 59 teachers in 2 of the 4 project schools gives the following distribution by level of qualifications: qualified secondary teachers 46%; qualified primary teachers 19%, unqualified secondary school graduates 32%; others 3%. This may be viewed as a move in the right direction towards the employment of qualified - 77 - teachers. The following distribution of teaching loads derives from the same sample of 59 teachers: 30-40 hours/week 39%; 19-29 hours/week 36%; less than 19 hours/week 25%. These figures are lower than the hoped-for 60-70% of fulltime teachers. Principals and vice-principals are well-qualified, university-level graduates. Other administrative staff, however, including guidance counselors (where these exist) and inspectors, for the most part, hold primary school teacher qualifications, or less. 4.04 Curriculum. Since none of the four schools was functioning during the missions visit (staff were attending workshops in preparation for their participation in the forthcoming literacy campaign) the mission was unable to obtain detailed information regarding curricula at the various educational levels. It learned that the multishift system, staffing constraints, and lack of practical subjects facilities, teacher materials, a common phenomena in schools, as described in the Completion Report, dated 1980 for Loan 532-NI, have resulted in a reduction of class hours, the elimination or shortening of practical subjects, and a reversion towards more traditional teaching methods. Multi-Lateral Secondary School. 4.05 Curriculum. The remaining multilateral school now functions as a general diversified secondary school in parallel with schools constructed under Loan 532-NI (para 2.07). In essence, the curriculum change involved the dropping of prevocational technical studies in electricity and mechanics in the upper cycle and a concentration at that level on academic (arts and sciences) and commerical studies. The school is functioning under certain handicaps. Because of vandalism and procurement delays (paras 2.10 and 2.11) the school is without equipment for industrial arts, home economics and commerce; equipment for the science laboratories is also very incomplete and services are only now in process of being connected; furthermore, it has no teachers trained in these disciplines. The school is therefore only offering academic courses with a limited science content; diversifed studies are expected to be introduced in the next academic year. 4.06 Enrollment. The school operates a three shift program from 07:00 to 21:50. Enrollments (3,367) for 1980 are approaching the double shift capacity of the facilities; they include 2,521 lower secondary, and 846 upper secondary students. In the light of the government's policy of open admissions, it is significant that about 37% of all enrollments are in the first grade. Class sizes average 40 to 49 in the morning shifts, and 31 to 38 in the afternoon and evening courses. 4.07 Teaching/Administrative Staff. Of the 50 teaching staff, 48% have university teaching qualifications; 26% are qualified primary teachers and the remaining 26% are secondary school graduates. The new principal, appointed in September 1979 after the civil strife, when all school principais were replaced, is a primary school graduate; his assistant is, however, university trained. Other administrative staff, including a - 78 - guidance counselor and four inspectors (responsible lor school disciplinary matters) have mainly lower qualifications (secondary school, or no certificate). With respect to staff teaching loads, 45% teach 30-40 periods per week; 33% 19-29 periods/week and 22% have less than halftime teaching load. Efforts are required to increase staff qualifications and the number of full time teachers. Technical Institute 4.08 Curriculum. The Institute, during its first year of operation (1978) inaugurated its technical courses on the sandwich pattern 2/ agreed between the British technical assistance team (ODA), the government and IDA (IDA letter of January 15, 1974). At the end of 1978 the Institute considered that the sandwich course arrangement was inimical to industrial practice in the country and a revised structure was introduced. The new structure effectively requires three years to complete, consisting of a six month foundation course, two years of full time study in the Institute and six months of industrial experience. The foundation course was considered necessary because of the indifferent level of preparation of students seeking admission to the Institute. Department Heads reacted in different ways to the new structure vis-a-vis students who had already completed the first year course. Some accepted the completed year only as equivalent to the foundation course and the industrial experience element, and required students to recommence the new formal two year course; others allowed full credit for studies completed and permitted students to proceed to the second year. At all events, the new structure will apply to all future intakes. 4.09 Enrollment. Total enrollment in 1980 stands at 330, subdivided by course as follows: Mechanical Engineering 93; Electrical Engineering 113; Civil Engineering 67; Business Studies 57. The Institute was originally designed for 500 students (400 in technical courses and 100 in business studies); the government-approved ODA curriculum, incorporating the sandwich course concept, would have raised enrollments to 570. Based on the original enrollment pattern, the present use factor is 68% in technical disciplines and 66% in business studies; if the ODA enrollment structure (570 students) is used, the overall use factor drops to 58%. Moreover, it is apparent that difficulties are being encountered in attracting suitably qualified entrants. Thus, the mission learned that (i) drop-outs in the first year approached 50%, in spite of recuperative courses, and of those who survived the year, about 20% required make up classes, and (ii) the earlier admissions regulations (secondary school diploma and an entrance examination) have now been relaxed, and all applicants are automatically admitted to the foundation course. Clearly efforts must be redoubled to attract and retain sufficient adequately qualified entrants to utilize fully the costly facilities of the Institute. The possibility of mounting additional, other type courses (part-time, day/evening upgrading training) should not be discounted. 4.10 Staffing. The Institute is well-staffed by graduate qualified teachers. It operates a 40-period/week timetable in two sessions, 7:00 a.m. - 2:20 p.m. and 4:00 p.m. - 9:50 p.m. It has near autonomous status, 2/ The curriculum structure consisted of a five-semester course with an intermediate semester of on-the-job training and a final semester in employment. The last semester would incorporate a short period (8-10 weeks) of highly specialized technical education related to the job. - 79 - equivalent to a university and can appoint its own staff. It is currently offering courses in Mechanical, Electrical and Civil Engineering and in Business Management. While the above situation (para 4.09) may well improve as normalcy returns to Nicaragua, a valuable use of surplus capacity could well be to mount emergency technical teacher training courses. There is a critical need for such teachers, as pointed out in the Loan 532-NI Completion Report, and the Institute is excellently staffed and equipped for such a purpose. Reference has already been made to the underutilization of expensively equipped premises and to drop-out problems (para 4.09). In the context of internal efficiency it is relevant to note that the Institute employs a total staff of 102 (principal, 2 vice-principals, 33 teaching staff, 18 laboratory and workshop technicians, 15 administrative staff, 2 librarians and 31 ancillary staff). At present enrollments this is almost a ratio of one staff for every three students. There is a lack of Ministerial level supervisory services due to unavailabiltiy of staff qualified for this role. The mission had pointed out to the Ministry the need to address this issue. V. Conclusions and Recommendations 5.01 Conclusions. The education component may be considered reasonably successful, if allowances are made for the present transitional development stage of the country. In physical terms, it provided a very fine technical institute, and a quality diversifed secondary school; the latter, together with the four prefabricated secondary schools assisted the government in meeting the large deficit of secondary school places which resulted from the 1972 earthquake. The technological institute set a new and high standard of post-secondary vocational education and could in the future become a model of its kind. 5.02 If some of the educational goals of the project have only partially been achieved, the default stems in large part from the damage and pillage of schools and the consequent lack of facilities required to provide disversifed education courses. It is to be hoped that as the financial base of the country improves, new secondary diversified schools will be constructed so that, in line with project objectives, the prefabricated schools, which offer no opportunities for practical education, will revert to other uses, and students presently accommodated therein will be provided with opportunities to pursue the trend of quality education being offered in the schools constructed under this, and the First Education Project (Loan 532-NI). 5.03 The government is aware that much remains to be done in the fields of education decentralization, supervisory services and the training of teachers, especially for the practical subjects. If it will pursue vigorously its stated aims in these areas, and if finances permit the inception of a sound school maintenance service, including the transfer of the necessary funds for consumable materials and operation1 expenditures, the prospect for secondary education in Nicaragua could be promising. - 80 - 5.04 Recommendations: (a) There is a need to address expeditiously, the inadequacy of equipment, teaching materials and practical arts teaching areas in the project schools in order to maximize the investment return of the project and improve the quality of students enrolled in these schools. (b) School maintainance should be improved and adequate funds for this purpose should be allocated in order to protect the high investment in these schools. (c) The quality and continuity of the project management staff as well as they provision of clear channels of communication and the appropriate administrative backing by entities involved in the project are essential elements to ensure success in project implementation. -81 - ANNEX 1 Fagel1/2 NICARAGUA EARTHQUAKE RECONSTRUCTION PROJECT (Loan 389-NI) Education C2mgonent COMPES WITH VENTS COVENANT COMPLIANCE LOAN AGREEMENT Section 2.02(f) no disbursements Full compliance. against expenditures under Part E3 of the Project (Technical Institute) until evidence satisfactory to the Association ... that the Borrower has made arrangements to obtain tech- nical and financial assistance to plan and start operation of the technical institute ... Section 4.02 maintain Project Unit Full compliance. established for execution of project under Loan 532-NI, such unit to be responsible for proper execution and supervision of Part E of the project. Section 4.03 employ qualified and Full compliance. experienced architectural consultants and an expert in school construction and related procurements. Section 4.04 employ contractors accept- Full compliance. able to Association to an extent and upon terms and conditions satisfactory to the Association. Section 4.05 furnish to the Association Full compliance. for approval plans, specifications, reports, contract documents and construe- tion and procurement schedules for Part E of project. Section 4.07 maintain records adequate to Full compliance. reflect operations, resources and expen- ditures in respect of Part E of the pro- ject. Section 4.08(a) acquire ... the owner- Full compliance. ship of all land required for the educational institutions included in Part E of the project. (b) not award construction contracts... until land fully owned. - 82 - ANNEX 1 Page 2/2 NICARAGUA - Credit 389-NI Education Component COVENANT CWLIANCE Section 5.03 (1) operate educational Targeted enrollments satisfactorily institutions at designed capacity and reached operations geared to promote in accordance with sound administra- educational objectives of government. tive and educational policies, with due economy so as to promote educa- tional objectives of borrower (2) adequate number of Complied with in respect of numbers, teachers and administrators but need for vocationally trained teachers in some project institutions. Section 5.04 adequate maintenance Maintenance unsatisfactory in the of buildings, furniture and equip- past but repairs being undertaken; ment; repairs and renewals; provide administration studying plan to ensure funds and all resources for the .esources made available for the purpose; purpose. replacement of lost equipment problematic. Section 6.02 (b) promptly inform of Complied with. any condition which (may) interfere(s) with purposes of the Credit - 83 - ANNEX 2 NICARAGUA - CREDIT 389-NI Erthquake Reconstruction Project Education Component Comparison of Originally Estimated Costs and Actual Costs (costs in US$'000s) Project Items Type of Expenditure Gen. My1.ti- Tech- TOTAL COST Second. lateral nical School School Inst. Local Foreign Total Construction and Actual 508.7 1,153.8 1,085.8* 1,247.0 1,501.3 2,748.3 Site Development: Arpraisal 470.0 1,311.0 670.0 1,112.0 1,339.0 2,451.0 % Act/Apr + 8% -12% +62% +12% Furniture: Actual 40.9 145.5 97.5 28.4 255.5 283.9 Appraisal 0 112.0 62.0 24.0 150.0 174.0 % Act/Apr - +30% +57% +63% Equipment: Actual 0 212.8 6.2 21.9 197.1 219.0 Appraisal 0 186.0 0 26.0 160.0 186.0 % Act/Apr - +14% - +17% Professional Actual 1.5 94.7 71.0 83.6 83.6 167.2 Services: Appraisal 0 131.0 68.0 105.0 94.0 199.0 % Act/Apr - -28% + 4% -16% Technical Actual 10.0 0 0 1.0 9.0 10.0 Assistance: Appraisal 12.0 0 0 1.0 11.0 12.0 % Act/Apr -17% - - -17% TOTAL COST: Actual 561.1 1,606.8 1,260.5 1,381.9 2,046.5 3,428.4 Appraisal 482.0 1,740.0 800.0 1,268.0 1,754.0 3,022.0 % Act/Apr +16% - 8% +58% +13% * Cost of one school only (2 at appraisal). The purchase cost of the site (US$0.18m equivalent) is not included in this cost. The purchase cost of the site (US$0.20m equivalent) is not included in this cost. - 84 - ANNEX 3 NICARAGUA - CREDIT 389-NI Earthquake Reconstruction Project Education Component COMPARISON OF ORIGINAL AND ACTUAL IMPLEMENTATION SCHEDULES Calendar Year CY73 CY74 CY75 CY76 CY77 CY78 CY79 CYSO Semester 1 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2 PART I Civil Works Preparation of u Tender Documents Tendering, Bid Evaluation - < Contract Awarding Construction Period Furniture Procuremunt and nellvery to Technical Assistance o PART II Civil Works 2--2 Briefing/Contracting , 1-8 Consultant Architects Site Survey/Acquisition m16 Preparation of Cn .4. Tender Documents o Tendering and 1 ImplmenttioI Contract Award ACTUAL~~ ~~ SCEUE: D4ureet Construction Period am Furniture and Equipment j Preparation of Lists and Tender Documents 1 50 0 Tendering and Contract Award . w4 Delivery and A Installation 0 7 1_I 00 APPRAISAL SCHEDULE: I-lmnain Disbursemervt: wn~nw - 85 - PROJECT COMPLETION REPORT NICARAGUA URBAN RECONSTRUCTION PROJECT (CREDIT 965-NI) - 86 - NICARAGUA - CREDIT 965-NI URBAN RECONSTRUCTION PROJECT Project Completion Report I. Introduction 1. In August 1979, one month after the end of hostilities, the Government of Nicaragua requested Bank assistance in the urban reconstruction. Building on the Bank's experience of involvement in the earthquake reconstruction,l/ it was felt that a short-term emergency reconstruction project would be most helpful. The new Government had already initiated needed institutional changes in the planning, housing and construction ministries; and planners and engineers had started diagnostic surveys of the war damage which served as the basis for preparing short-term improvement programs. The Government requested that the Bank funds should provide immediate assistance to: (a) municipal reconstruction of the six major towns outside of Managua, (b) credit program for rehabilitation of small scale enterprises, and (c) rehabilitation of Hanagua's public transport system. 2. Part A of the project - the reconstruction of six towns - consisted of five new markets, three slaughterhouses, one municipal office building, six maintenance and repair shops, one Telcor (telecommunications and post office) building and one fire station along with repairs to water supply, sanitary, storm drainage, street paving, and lighting networks and to various municipal buildings at a cost of US$11.6 million. Under Part B, the credit program, 5,130 loans were made to rehabilitate small scale enterprises totalling US$8.3 million as they continue on a third round of lending from an initial fund of US$3.5 million. For the rehabilitation of Managua's public transport of Part C, 220 buses were purchased along with spare parts, maintenance buildings were built, bus routes paved, safety improvements made and technical assistance provided for US$14.5 million. The total project cost was US$29.5 million; and the IDA credit was for US$22.0 million. The project was substantially completed in two years, and its impact is satisfactory. It is probably one of the most effective urbanprojects supported by the Bank. Only one component - spare parts for bus maintenance was delayed by external suppliers, so that the loan will not be fully disbursed until the revised closing date of June 1983. 3. The PCR is based on information in the President's Report (P-2662-NI) and a review of Bank files, including sup6rvision reports for the project. Additional information was obtained by a supervision mission which visited Nicaragua August 16-27, 1982. Since the three parts were implemented by different government entities - Ministries and agencies, a joint evaluation report of the project was not prepared. The Ministry of 1/ See para. 13 footnote 6 below. - 87 - Housing and Human Settlements (MINVAH) prepared the documentation for the municipal reconstruction, the Special Development Fund (FED) for credit program for small scale enterprises, and the Ministry of Transportation (MITRAN) for the rehabilitation of the public transportation system. In preparing the Bank's PCR, representatives of each of the entities assisted in the data collection and discussion with the municipalities and other project beneficiaries. Also, the mission held discussions with MINVAR, FED, and MITRAN on the general findings of the report. For Part C, Rehabilitation of Managua's Public Transport System, the LAC Highway Division provided assistance during appraisal, supervision and the preparation of this PCR. II. Urban Sector, Background and Objectives Before the War 4. Nicaragua's urban problems were already severe in the last decade, since the growth of cities had greatly exceeded their ability to provide employment and services. The population of Managua in recent years has grown at 6.5 percent per year and that of secondary cities and towns at an average rate of 4.4 percent per year. Over half the country's population already lived in urban areas by the mid-70s, and a large share of the urban population was unemployed and poor. In 1977, 36 percent of households in Managua, and between 46 percent and 59 percent of households in the six major towns had monthly incomes below US$100. Many urban families lacked adequate housing and basic urban services. In the absence of national planning for urbanization and the provision of housing, public investment tended to be concentrated in Managua. BAVINIIC, the national housing bank, provided little housing for the poor. Municipal Governments had traditionally suffered from poor inefficient management and lack of financial support. The 1972 earthquake, which destroyed much of Managua2 /, aggravated an already unsatisfactory situation. While the earthquake reconstruction effort incorporated a nominal strategy to decentralize urban growth, it had the effect of further concentrating investment in the capital city. Most of the new investment in housing, infrastructure, and services since 1972 had been confined to the repair of the earthquake damage. 5. Before the earthquake, the public transit system in Managua, as in many major Latin America cities, was run by a number of private operators; each, with a governmental franchise for a specific route, was responsible for his own buses. While the service was self-supporting, it was precarious. After the earthquake, the characteristics of the city and its spatial distribution changed drastically. Bus patronage in the inner city area fell while operating costs rose as a result of the loss of 144,000 persons who moved out of the city 3/. Round trip bus distances and the proportion of trips on unpaved roaZs doubled with respect to pre-earthquake levels. The National Transport Council had the 2/ It completely destroyed 13 square kilometer and partially destroyed 14 more. 3/ Pre-earthquake Managua was characterized by high population densities of 12,500 to 40,000 persons per square kilometer. - 88 - responsibility for the technical, economic and administrative regulation of transportation activities, but it was ineffectivu. In 1975 the bus fleet consisted of 410 buses; this number had increased to 552 in 1977 and to 695 in the months before the Revolution. By September 1978 route concessions had proliferated and the tariffs had gone up 80%. Owner operators with transport demand in Managua completed before the war in June 1978 by De Leuw, Cather International Inc. projected the growth for Managua bus transit system to about 1,050 units by 1985 and recommended the shortening of certain routes. The September 1978 war foreclosed the possibility of enacting the study's recommendations. War Damage of Urban Areas 6. During the war nearly a quarter of the country's population was displaced. The prolonged fighting resulted in damage and destruction to major parts of most of the cities. Substantial amounts of housing, infrastructure, and commercial and industrial plants were either totally destroyed or seriously damaged - at an estimated cost of US$250 million.4 / The areas suffering most extensive destruction were the commercil/administrative centers and low-income settlements (brrioa). Prior to the war, barrio residents had limited access to urban services, formal employment and credit facilities for shelter or economic activity; the war worsened these problems. 7. Outside Managua, the heaviest damage occurred in six major secondary cities. Esteli (150 km north of Managua) suffered the worst damage along with a-IN-Population decline from 42,000 to 34,000. Its main commercial center and principal economic base was devastated. Municipal buildings, central market, schools, hospital, municipal infrastructure and vehicles were also heavily damaged. Over a third of the housing (980 dwellings) in the city center was heavily damaged. The total damage to over 1,140 structures was estimated at US$35 million. Matagalpa (127 km north of Managua) with 30,000 inhabitants was also heavily damaged in a 12 block central area where most of the commercial center - including banks, shops, offices, Post Office, Telecommunications, National Radio, and the central market - was destroyed. The total damage to 366 buildings was estimated to be over US$18 million. In Leon (90 km northwest of Managua), the second most important urban center, 1W- 100,000 inhabitants, damage was concentrated in 10 blocks; over 100 large shops and stores, representing one-third of all commerce, were damaged or totally destroyed. Educational facilities, municipal offices, markets, infrastructure, and equipment were also damaged or destroyed. Ia addition, over 800 dwellings were damaged. The total damage to more than 930 buildings was estimated at over US$27 million. Chinandega (129 ka northwest of Managua) with 48,000 inhabitants, was damaged in September 1978. Total destruction to more than 200 buildings was estimated to be US$6 million. Massy& (26 km southeast of Managua) with 53,000 inhabitants was seriously affected in the center; about half of the main commercial area and the entire central market were destroyed. The total damage to 320 buildings was estimated at US$19 million. In Rivas (109 ka southeast of Managua) with 22,000 inhabitants, damage was concentrated in 18 blocks. About 365 buildings were damaged - estimated at US$9 million. 4/ These losses led to a reduction in income and production during 1978-80 that probably exceeded US$1 billion. - 89 - 8. While the physical damage to urban infrastructure is quantifiable, it is difficult to measure the resulting economic disruption and subsequent unemployment. Before the war, approximately 40 percent of urban employment was generated by small-scale enterprises. Many of these were located in the barrios of Managua and other cities affected by the fighting. In Esteli, Nicaragua's northern industrial center, some 90 percent of the smaller enterprises were rendered inoperative by physical damage to workplaces or by the destruction or depletion of inventories. Post-war unemployment was estimated at about 60 percent in most of those barrios. In addition, the loss of inventories during the war left many commercial establishments and industries bankrupt. War Damage to Managua Transport 9. During the war, about 346 units were destroyed, roughly 50% of Managua's bus fleet; and about 250 units were severely damaged, shortening their useful life. Damage to the fleet was aggravated immediately after the war by the fast growth in demand as a result of increased economic activities, and the scarcity of private transport supply. In addition, the institutional vacuum in the planning of public transport in pre-revolutionary times had to be filled by newly created institutions, which were confronted with a variety of issues: modified bus routes, damaged street paving, scarcity of equipment, lack of spare parts, non-existing facilities for maintenance, precarious safety standards, inadequate pricing and regulatory policies and lack of mass-transit know-how. Government Response 10. The Government instituted an emergency plan with the following urban reconstruction priorities: generation of employment; reconstruction of cities, towns, and low-income barrios affected by the conflict; and the restoration of public services such as transport, energy, water, and telecommunications. Most of the residents in the barrios participated in the clean-up and within a month after the end of hostilities, streets and sidewalks were cleared. Because most of the important secondary towns were directly affected, the Government mounted a regional/municipal reconstruction and development program. The newly formed Ministry of Housing and Human Settlements (MINVAH), which united the Housing Bank of Nicaragua-BAVINIC- and the Vice Ministry of Urban Planning-VIMPU, acted on the Government's emergency and reconstruction plans by establishing regional urban planning offices to implement the new policy of addressing urban development needs nationally as an integral part of the reconstruction effort. The new ministry was able to retain the experienced technical and administrative staff from both BAVINIC and VIMPU. By combining the planning/regulatory functions of VIMPU with the operational/implementing arm of BAVINIC, it was hoped that MINVAR would resolve long-standing institutional constraint in the delivery of housing and urban services. In addition, formal mechanisms for inter-ministerial coordination of all reconstruction activities were instituted with MINVAH as lead agency. - 90 - 11. The new Ministry of Transport and Public Works (KTOP) integrated the national transport planning and regulatory functions. Some staff from the previous transport regulatory board were retained. The Ministry,for the first time, administered national transport public policy for land, sea and air, with jurisdiction over all forms of passenger and freight transport. The new National Water and Sewerage Authority (INAA) brought together the two agencies serving Managua and other urban areas and now administers water, drainage, and sewerage programs at a national level. Most staff from both agencies were retained. The same was true for Instituto Nicaraguense de Energia (INE) in the energy sector. 12. Municipal Reconstruction Boards, established in all cities, had no financial resources at their disposal and few of the board members had prior municipal experience. They were, nevertheless, able to operate effectively, because of the close contact they maintain with barrio inhabitants and assistance they received from technical groups of local professionals and students. However, an enhanced and permanent administrative and technical capability was badly needed in all municipalities. This was one of the objectives of the urban development program. The newly nationalized banking system was restructured to better coordinate and disburse loans to small-scale enterprises that formed part of this project. III. Project Preparation and Appraisal Initial Request 13. In September 1979, two months after the end of hostilities and at the request of the Government, the Bank Group sent a mission to evaluate the damage and the economic conditions of the country, with a view to preparing emergency projects.5/ Working closely with the then Ministry of Transport and Public Works, fiNVAH, the local Municipal Reconstruction Boards and relevant line agencies, the mission identified and appraised an emergency urban reconstruction project that would provide immediate assistance in rehabilitating the six towns most affected by the war, and also establish an institutional basis for medium- and long-term reconstruction and development. Drawing on the Bank Group's experience with past reconstruction efforts (in particular the Earthquake Reconstruction Project supported by Credit 389-NI)-, whic'i suffered considerable delays in implementation, 6/ the Government and IDA adopted a 5! The mission also identified and prepared an Agricultural and Industrial Rehabilitation Project which was presented to and approved by the Board on the same date as the Urban Reconstruction Project. 6/ The Reconstruction Project included a sites and services program for about 5,100 plots in four cities. Mainly due to the post-earthquake situation, land was difficult and costly to acquire and price escalation of construction materials was unusually high. The implementing agency had little relevant experience; its housing policies and construction norms were not appropriate to sites and services programs. The project nevertheless demonstrated the viability of sites and services in Nicaragua and become the basis for a new housing policy focused on the urban poor. - 91 - new approach in designing the project. Past experience showed that because of their relative complexity, large-scale shelter projects are not easily carried out as emergency operations. Therefore, the proposed project was based on the following considerations: (a) The Government's highest priority was to produce a rapid impact on employment and transfer of foreign resources. To avoid delays the project focused on land available to the Government and used austere engineering standards. (b) The components and subcomponents would be easy to implement and be within the experience of proven capacity of the Institutions involved. (c) Component designs would be based on prototype sketches because of limitations in the availibility of data. (d) The reconstruction needs exceeded the available resources, therefore, the size and scope of each component would be adjusted to emergency priorities and local implementing capacity. (e) This project would be a first phase of other reconstruction efforts; as such, it would help to define strategies and further needs for institutional development. (f) While the project was designed to redress direct physical and economic effects of the war, certain basic infrastruc- tural upgrading was required due to serious pre-war deficiencies. (g) The project was developed in coordination with other external agencies in the first phase of reconstruction. In Managua, substantial reconstruction activity was already underway assisted by AID, and IDB was planning a substantial nationwide housing program. Project Description and Scope - Part A - Municipal Reconstruction 14. Interdisciplinary planning teams completed the diagnostic surveys of the six towns by December 1979, in 3 months. The soil, terrain and land-use analyses including vacant urban land provided a sound basis for planning the reconstruction. The diagnosis showed deficits of schools and health facilities as well as of water supply, and sanitation, from which a five-year capital investment program was prepared. Cost estimates were prepared to extend public utilities to serve the whole population. All the studies were completed with remarkable speed (2-3 months) and compiled into - 92 - a comprehensive report for each city. Preliminary designs of the project components were selected from these plans. 7/ 15. After the signing of the Credit Agreement, January 4, 1980, the first supervision mission met with the technical teams of each town to scale the essential components that could be built in two years within the budget constraints. All final designs and cost estimates were completed within the first six months of the project (between January and July of 1980). Only the market buildings ad macro-drainage components tAre prepared with complete bidding documents. Some local contractors expressed interest in bidding; however, their capacity was limited. They were only willing to bid on a cost plus basis with completion dates tied to the supply of materials. Physical contingencies were limited to 10%. The selection of works to be carried out and their respective costs by component for the six towns were defined as follows in US$ million: Foreign Local Total 1. Water and Sanitary Sewerage 0.49 0.75 1.24 2. Storm Drainage 0.25 0.24 0.49 3. Street Grading and Paving 0.40 0.61 1.01 4. Street Lighting 0.32 0.08 0.40 5. Markets and Slaughterhouses 1.16 1.16 2.32 6. Municipal Office and Maintenance Workshops 0.41 0.42 0.83 7. Municipal Maintenance Vehicles 1.17 0.20 1.37 Subtotal 4.20 3.46 7.66 Administration and Professional Fees 0.34 0.34 TOTAL 4.20 3.80 8.00 Part B - Credit Program for the Rehabilitation of Small Scale Enterprises 16. This component provided credit and technical assistance for the rehabilitation, expansion and development of small-scale enterprises and cooperatives in the productive, commercial and service sectors. Many of these businesses are located in marginal barrios and have had no access to credit or technical assistance. The loans were to be for short-term work capital needs as well as for the repair or reconstruction of retail shops and workshops. US$3.2 million from the credit was made available to FED for a term of 20-year including a 5-year grace period at an interest rate of three percent per annum. The FED was to loan through participating banks to the ultimate beneficiaries with repayment in 10-year for fixed investments and four years for working capital; for micro-enterprises the terms were five years and three years, respectively. The interest rate was not to be less than 12 percent per annum. 7/ During this period the School of Architecture, University of Costa Rica, sent a team of students and professors to assist in the planning of Esteli, and a conference was held by the University of Central America in Masays on land planning and land tenure. - 93 - Part C - Rehabilitation of Managua's Public Transport 17. The transport component was designed to provide the first phase of a longer-term effort that would include, after project completion, continued rehabilitation of the private bus fleet and technical assistance for maintenance. The short-term objectives were to: (a) renovate the urban bus fleet; (b) provide know-how and equipment for maintenance; (c) upgrade streets used for bus transport; (d) develop efficient bus routes and urban transit administration; and (f) strengthen the management capabilities of ENABUS (The National Bus Company). 18. During appraisal the bus route reassignment resulted in: (a) reduced lengths of routes (from 25 km to 14.7 km per route); (b) smaller proportion of transfers (from 60% to 15%) and (c) increased service to outlying districts of Ciudad Sandino, las Americas, etc. Assignations of vehicles types to specific routes resulted in new vehicle requirements of 570 vehicles (375 regular buses and 195 minibuses). A more accurate account of the salvageable buses and minibuses from the existing fleet was to be made with the technical assistance provided under the Credit. Evaluation of the conditions of the bus route network resulted in identification of 41.5 km of streets of the common bus route network in need of urgent paving and/or repair. This urgent road investment program, estimated at US$1.33 million, by no means included all the streets that needed paving along the bus routes. S/ 19. Vehicle specifications and types of vehicles, were proposed for more than one make. Depending on price and deliveries, it was estimated that the credit would supply a mix of regular buses and minibuses or a batch of medium size buses which could be deployed in both short and long routes. For reasons of delivery schedule the second alternative was selected. In addition, spare parts specifications were prepared for the existing fleet which would allow immediate operation of about 60 units. This item would be subject to retroactive financing. It was further agreed that about 60% of the spare parts supplies would be channeled through the Fondo Especial de Desarrollo (FED) to the private sector cooperativ< operating in Managua. A list of the equipment required for the centra. and the auxiliary maintenance depots was prepared with the following recommendations: (a) establishment of a central workshop to carry out the overhaul of defective units (engines, gearboxes, etc.); (b) establishment of five additional depots with workshop facilities suitable for no more than 120 vehicles per depot; (c) construction of the central and additional depots to commence immediately under the auspices of MOTP. (There was no allocation in the credit for construction costs. Retroactive financing of the civil works was to be negotiated with CABEI through a loan estimated at $12.5 million); and (d) part of the engineering assistance at depots and central workshop level was to come from the suppliers of the vehicles; nevertheless, the chief engineer was to be independent of any supplier. 8/ The new public company, ENABUS, was formed around 62 bus units which belonged to the Somoza family before the revolution. The role of ENABUS was defined from the beginning as complementary to the services offered by the private sector. - 94 - 20. Technical assistance was included with the understanding that the sum was not sufficient and would have to be complemented with a preparation facility for a second loan, as proposed in the President's Report. The package proposed in the credit would require long-term technical assistance to DGT and to ENABUS for the continued reorganization and management of an expanding bus transit system. The initial credit covered approximately 9 man-months to DGT over a two-year period. As the system expanded, technical assistance needs would increase too. (See Annex 4 - Technical Assistance, Financial and Economic Reevaluation - Rehabilitation of Managua's Public Transport.) 21. The estimated costs of this component (US$14 million including US$2 million of local costs) are shown in the following table: Foreign Local Total (a) Purchase of buses 7.8 1.0 8.8 (b) Purchase of spare parts 1.8 .05 1.85 (c) Maintenance equipment .7 .2 .9 (d) Technical assistance .3 - .3 (e) Bus route paving and safety improvements 1.0 .7 1.7 (f) Contingencies .4 .05 .45 TOTAL 12.0 2.0 14.0 Cost estimates for buses, spare parts, and maintenance equipment were based on foreign and local costs obtained by the appraisal mission from forei-n suppliers and local sources. Basic vehicle costs were based on an average US$35,000 for regular units and US$25,000 for microbuses. An estimated 45 man-months of consultant services were required at an average gross cost of US$6,500 per month. Cost estimates for bus routes paving were based on an NOTP's appraisal of war damages to the bus routes using MOTP's equipment and labor intensive construction. Base costs and price escalation assump- tions were identical to those calculated in other similar components of the Reconstruction Project. IV. Project Implementation Part A - Municipal Reconstruction 22. The credit become effective one and an half months after Board presentation. With the early placement in the field of the permanent technical units (January 1980), initial works of storm drainage and repaving were started immediately. The first funds were disbursed to the municipalities in February 1980, through the working fund (special account),9/ for salaries of the municipal maintenance force. The 9/ The Government deposited its counter part funds totalling C 2.5 million (US$0.25 million) on January 20, 1980. This was followed by the Bank disbursement of US$0.75 million. - 95 - technical units provided the daily supervision to the work force - establishing final grades and curb lines in the field. They also assisted the local Reconstruction Municipal Board (JRM) in providing technical guidance along with daily contact with the local barrio residents. By the time of the second mission (April 1980) reconstruction was well underway. All of the construction - 17 new municipal buildings, six reconditioned buildings, plus utilities and street paving, were virtually completea by January 1982, as shown in Annex 1, Maps 1 through 6. Photographs of the completed works are shown in Annex 2.10/ Innovations 23. In Chinandega, the municipality produced a new type of street light, from available heavy aluminum dish pans suspended on a 1/4" steel-bar bracket. The cost excluding installation was C 300 instead of the imported fixture of C 2.600 for which delivery would have taken an additional year. INE accepted this innovation as an interim solution thereby extending the area served by 8 to 9 times.1 1 / To protect Masaya against periodic flooding a large interceptor chanel and three tunnels were designed around the town by hydraulic engineers from the Managua Municipality. To provide maximum employment, the whole interceptor was dug by hand tools, including the barrel vaulted tunnels which were lined with masonry. The work was completed in 12 months for an estimated C 13.72 million (US$ 1.37 million) of which the project financed C 2.72 million; the rest came from the National Reconstruction Fund. MICON estimated that an additional year and a 30% cost increase would have been occurred if they had followed normal bidding procedures. Time Schedule and Progress Reports 24. The project was virtually completed within the original two-year implementation period except for Part C - Urban Transport. Only minor interior works remained on the markets and slaughterhouses. More than twice the quantities of road improvements - paving and drainage - were achieved within the time originally allocated. This was due in large part to the committment of the Government authorities, local municipalities and the barrio residents to provide immediate benefits to the poor areas.1 2/ From the inception of project implementation, detailed progress charts ere maintained; the work on each component was monitored on a 10/ From a small contingency fund, the Bank agreed to assist INAA in the construction of a new headquarter's building to replace their fire- bombed bLilding. The estimated cost was C 4.8 million of which the Bank financed C 3.2 million. 11/ With the receipt of the permanent lighting fixture in late 1981 these innovative cheap fixtures were installed in the rural communities. 12/ On Saturday and Sunday barrio residents continue to repave and/or pave streets on a block basis using materials supplied by the municipality along with technical supervision. The local residents are assessed for the cost of materials only so that the program will continue to function until all the local streets are paved, which will take an additional 3-4 years. - 96 - monthly basis. Weekly field reports of the MINVAH central unit supervision verified the advance. Detailed expenditure accounts were analyzed by the central unit on a monthly basis; this facilitated the preparation of timely quarterly reports. For most of the municipalities this was their first experience in autonomous management. Cost, Procurement, and Disbursement 25. The final cost of the project was C 295 million (US$ 29.5 million) as compared with the appraisal estimate of C 260 million (US$26 million), representing a total cost overrun of 14% (see Annex I, Table 1). Cost overruns were limited to Part A (Urban Reconstruction). The actual cost of the original set of Part A works was C 100.3 million - an increase of 25% over the appraisal estimate. Given the level of preparation at appraisal and the uncertain costs of materials, it is an acceptable price increase. Rowever, MINVAH and the local municipality agreed to increase the size of the components to provide benefits to a wider population. With the additional components of a second market and added flood protection, the final cost of Part A was C 115,750 - and increase of 44.7% over the original costs (see Annex 1, Tables 1, 4 and 7). 26. The procurement of civil works and equipment was in accordance with the provisions of the credit agreement and Bank guidelines. The Bank agreed to the use of "international shopping" for Part A to procure individual vehicles such as one fire truck, one ambulance, and one rescue vehicle. The Bank was consulted on each item as to the adequacy of comparable bids and the validity of the lowest evaluated bid. Storm drainage, paving, and minor civil works were executed by each local municipality through force account and/or by contract labor with local foremen or "maestros do obra." 27. The initial disbursement February 1980 into the working fund of C 7.5 million (US$ 0.75 million) by the Bank Group with the counterpart fund of C 2.5 million (US$ 0.25) enabled the municipalities to be reimbursed every two weeks. Without such a fund, the rate of construction would have been drastically reduced. By the third quarter of 1980 over half of the funds planned for the sub-project Part "A" had been expended, mainly in water supply, storm drainage and street paving. Except for a few small items, the credit was fully disbursed by June 1982 - $21.1 million or 95.9% of the credit. While cost recovery of utilities, municipal markets and slaugtherhouses and municipal bugdet was not a condition for on-lending, the municipality has made a good effort to recover cost - see Annex 2. 28. Quality of Work Completed. Quality and quantity controls were established at four levels of supervision starting with: (a) MINVAH at the center, providing weekly supervision to the field, (b) the local Municipal Board - weekly, (c) local technical unit on a daily basis, and (d) local barrio residents who participated in enlarging the scope of works - drainage, paving and other local improvements. The quality of construction - 97 - of buildings and community facilities was excellent. Where there was no budget for finishes, specially on exteriors their strong civic pride drew citizen participation into the final process. Additional Benefits 29. During the first year of implementation -- 1980 - the Government started a literacy campaign to facilitate the reconstruction effort. All six towns were mobilized and the local technical units taught the caderes of workers not only basic reading but also measurements on drawings and in the field (this approach could be applied in other countries to increase productivity in urban p.ojects). 30. Housing improvements (not part of the project) began in the late spring of 1980 after the first streets were improved. By June 1982, about 2,900 project type dwellings were built in four of the six towns under MINVAR programs at a cost of C 145 million (US$14.5 million) (see Annex 3, Rousing Construction - New and Improved). During the same period about 4,100 dwellings were improved or built with aided self-help for an estimated cost of C 61.5 million (US$6.15 million). The total housing improvements (C 206.5 million) compares favorably to the C 30.5 million of street improvements - water supply, limited sanitation, paving, street lighting. 31. In Matagalpa, the new slaughterhouse had been part of the Bank project, but the Netherlands private aid agency (NOVIB) was able to provide financing. They also financed construction of a community building for visiting traders along with drainage works. NOVIB has invested over C 4.0 million in civil works that were carefully coordinated by the technical unit. Part B - Small-Scale Enterprise Rehabilitation 32. This program had a relatively slow start, with early problems in the reorganization of the FED,13/ changes in staff, institutional restructuring, as well as liquTity problems of the participating banks early in the year. While the lending unit was small -- eight professionals, and two secretaries - the demand for small and micro-loans was high. The first loan was made in April 1980. By the end of July 1980, 1,775 loans were made for more than US$3 million; of these 1,400 loans, amounting to 35% of Lotal funds loaned, were below US$2,000 (micro-enterprise); 312 loans (47.3% of the funds) were between US$2,000 and US$10,000; and only 20 loans (17.7% of the funds) involved loans above US$10,000. By October 1980, the fund was fully disbursed. Four commercial banks which had been most active in the FED prewar small-scale enterprise programs accounted for almost 100% of the activity in this area. The Banco de Cr6dito Popular (BCP) was responsible for 42.5% of the loans made, almost all the micro-enterprises accounting for 15.7% of lending in this program. Banco Nicaraguense (BANIC) made 25.2% of the loans (39.0% of the 13/ The FED was transfered from BND to CORFIN on July 7, 1980. - 98 - total lending) concentrating on relatively large enterprises. Banco Nacional de Desarrollo (BND) made 19.8% of the loans (23.3% of tihe unds) and Banco de America with 11% and 17.3%, respectively. 33. Less than half of the loans were commercial activities, one-third were industrial and one-fifth service enterprise loans (see Annex 1, Table 9). Commercial loans were for enterprises such as food merchants, pharmacies, clothing and shoe stores; industrial loans were to carpenters, clothing and shoe manufacturers, building materials producers, ceramics, artisans; services loans went to taxi cooperatives and auto repair shops. Most of the relatively larger loans (about US$10,000) were for industry, while the majority of the small and medium size loans were made to commercial concerns. 30% of the funds were loaned to enterprises in Managua while the rest were in 14 urban centers affected by the war throughout the country. More than 80% of the lending activity supported by the program involved the reactivation of enterprises, mainly by providing working capital and replacing destroyed equipment. The rest was for small enterprise expansion and in a few cases the creation of new businesses. The FED had financed about 92% of the subproject cost, with intermediary and beneficiary participation limited to about 8%, so that initially Bank funds were used to cover a higher proportion of total FED disbursements than expected. Most loans were made to small enterprises for which beneficiary and intermediary participation in the financial plan were not substantial. By December 1980, the fund was completing its second round with 3,223 loans representing US$5,106,300. Of these, the FED financed US$4,537,640 (89%), intermediary banks financed US$445,270 (9%) and the beneficiaries put up US$123,390 (2%) in equity. Given the degree of uncertainty under which most of these loans were made, a high level of repayment has been achieved - more than 98%. 34. During appraisal it was assumed that an implementation mechanism would be necessary to provide T.A. to the enterprises; for this purpose the FED and commercial banks would utilize a procedure similar to that of the tested on-going pilot programs of the BND. During the operation, the FED decided it was not necessary to set up such a technical committee; the local participating banks were able to screen these applications themselves. The lending guidelines have been strictly followed; micro-enterprises which met the criteria established and had fewer than six employees were eligible for a maximum loan of US$2,000. Small production and service enterprises and production cooperatives defined by FED with less than US$60,000 in fixed assets were eligible for financing up to US$40,000. Small commercial businesses with more than US$60,000 in fixed assets would qualify for a maximum loan of US$15,000. Since the micro-enterprises were borrowing on commercial terms (13% interest) in almost all cases repayment schedule was shortened by one to one and a half years from an original three years. The financial intermediaries received the funds from the program at 5% to 8% which gave them a 5 to 8 point spread to cover costs and commercial risks. - 99 - Part C - Rehabilitation of Managua's Public Transport 35. The time devoted to the preparation of this sub-project was relatively short: institutions responsible for its implementation had undergone major restructuring, and details were lacking; the timetable was compressed. The risk of operating a large centralized bus company (less efficient than smaller owner-operated units) was offset by MTOP's readiness to encourage operations on a commercial basis together with the technical assistance to ENABUS to enhance the probability of successful project implementation. The specific objectives were fulfilled in spite of procurement delays, and the most urgent priority needs were met for the urban transport of passengers in metropolitan Managua. The technical assistance provided under the project, coupled with close Bank Group supervision, helped the Government to draw and adopt plans for adequate future participation of the private sector in public transport 14/. 36. Procurement delays resulted from poor performance of a foreign supplier of machine tools and related technical assistance for the maintenance shop program. Machine tools destined to satelite maintenance shops arrived in Nicaragua March 1982, after a delay of one year; machine tools destined for the central workshop arrived in Managua in November. As of May 1983, there were still a few machine tools that the supplier has not been able to provide; therefore, "international shopping" was adopted. 37. Limited Government funds resulted in delays in construction by MICON of the central workshop and four of the five maintenance satellite depots. At the time of the PCR mission, however, CABEI had informed FIR of indefinite delays in the signing of the US$12.5 million loan which had been approved in June 1982. A Bank Group mission requested that CABEI reschedule the loan signing on a priority basis including a bridge loan of up to C 75 million, which was achieved in November. Even with the delays, the machine tools for the satellite depots arrived in time for use in the first depot for the 220 new Mercedes Benz buses. This first depot temporarily catered to the maintenance of about 370 units - about 80% of ENABUS fleet including all buses supplied under the credit; the other 20% is serviced in four additional temporary facilities. With the completion of the central workshop by September 1983, the concurring delays will not have affected the preventive maintenance of the bus engines supplied under the credit. 38. Procurement for the rehabilitation of privately owned bus units suffered start-up difficulties related to the studies required for qualification. By October 1982 this sub-component of US$1 million was completed with the rehabilitation of 75 units owned by five different cooperatives. Cost recovery of this portion of the credit should provide a small revolving fund for the purchase of spare parts in future for the private cooperatives. 14/ See Annex 4 for details of Technical Assistance. - 100 - Cost and Disbursements 39. The cost of the transport sub-project (Part C) was C 144.7 million (US$14.5 million)1 5 / as compared with the appraisal estimate of C 140 million (US$14.0 milllon) (see Annex 1, Table 1). As of April 1983 disbursements of the transport component amounted to 95Z of total cost. Costs for the purchase of buses increased from US$8.8 to US$9.5 million and disbursements were completed June 1982. Disbursements for technical assistance were completed to the Transport Management Services Ltd. (THS) by April 1982 and to Delcanda by June 1982 respectively, with no cost variations. The Managua bus route paving and safety improvements program were completed by August 1981 - rapidly and efficiently by the Reconstruction Board of Managua (JRM) for a cost of US$1 million with more paving than was originally anticipated. The financial and economic reevaluation is presented in Annex 4, including ENABUS operational indicators. V. Institutional Development 40. The main objectives were to rebuild facilities and rehabilitate small enterprises, to reactivate the economies of the six towns and to rehabilitate Managua's public transport; therefore, being an emergency project, there was no formal institutional development component. Nevertheless, substantial institutional building accompanied the execution of the project. MINVAH took over the responsibility for preparing the national urban development plan to reflect the national economic development strategy of the Government. In each town, the Municipal Reconstruction Boards (JRMs) took the responsiblity of reorganizing their own tax base and preparing their annual budgets. In August 1992 the Central Government created regional administrative zones to decentralize government: six regions and three special zones. A year earlier, the technical units of three towns were already provLding T.A. to the smaller towns and settlements in their region. INAA and INE have also decentralized the planning and operation of their networks, strengthening regional and local capacities. 41. Shortly after appraisal, in January 1980, MTOP split into two separate ministries: the Ministry of Construction (MICON) and the Ministry of Transport (MITRANS). MICON took over all public construction projects in Nicaragua in close coordination with the Municipal Reconstruction Boards (JR11) which were formed in each city and town after the 1979 Revolution. MITRANS was entrusted with the institutional responsibility for the state transport companies which were formed after confiscation by the Government of former Somoza family assets (para. 18). The responsibilities of MITRANS have been recently grouped under three Vice-Ministries with separate responsiblities for land surface, water and air transport. Under this new organization, ENABUS reports to HITRANS and is assisted by DGT; DGT has the responsiblity of coordinating all public and private transport services, street paving (executed by MICON and JRM), development of ENABUS' services and analysis of the private sector's needs for spare parts. 15/ Including the C 10 million (US$1 million) for the rehabilitation of the privately owned bus units transferred to the FED for Part B. - 101 - Performance of the .orrowers 42. The professionalism, dedication and response of MITRANS and DGT teams have been remarkable. Close contact among Bank Group staff, FED, BANIC, MICON, JRM, ENABUS, and the private cooperatives resulted in quick corrective action on delicate issues. The performance of ENABUS has also been encouraging. After difficult months of growth and a change of management (recommended by the Bank supervision mission and by TMS), ENABUS's performance has improved substantially; particularly since March of 1982. (Annex 4, Tables 1 and 2 show performance indicators.) The present ratio of 3.8 staff per operating bus compares favorably to most urban passenger transport companies and shows 100% improvement over the March 1981 ratio; operational revenues also doubled from March 1982 and have continued to increase with the help of the implementation of the ticketing system. The daily number of units in operation increased about 56% from March 1982, while trips increased 64% on the average, and the number of passengers transported doubled. In the same manner, while gross revenues increased from C$ 5.9 to 9.0 million between January and June 1982, the cost/revenue ratio decreased from 2.04 to 1.66 in the same period of time (see Annex 4 -- Financial and Economic Reeval:::ion). 43. The technical assistance supplied under the project defined the respective roles of ENABUS and DGT, and oriented the former to act in the future as a management organization entrusted with the Government responsibility of passenger transport services and maintenance facilities (see Annex 4 for details). ENABUS plans gradually to delegate actual bus operations to the private sector cooperatives through a system of financial leases, as buses presently controlled by the company come to the end of their useful lives. During the PCR mission the MITRANS Minister indicated that he had received Government clearance to strengthen and broaden the role of the private sector cooperatives in accordance with Bank suggestions. Bank Group Performance 44. The Bank Group responded to the request for assistance in August 1979 and within one month a combined economic sector and appraisal mission was in Nicaragua. This request was considered an emergency project. The identification and appraisal reports were combined into a President's report. Since there were no major problems identified, there was no issues paper, nor was there a decision memorandum. Negotiations were held on November 14, 1979 and the Board approved the project on December 18th, three months after identification. The credit became effective on January 4, 1980. Four missions at three months intervals were undertaken in the first year to supervise the preparation of the urban plans and final designs, and early implementation of storm drainage and paving works under force account. The first three missions consisted of 80% T.A. on the preparation of land-use plans and final designs while the last mission was 80% supervision. Technical suggestions by the mission were quickly adopted in the field, and a spirit of cooperation with almost weekly communication - 102 - was maintained. Because of the satisfactory performance of the first year, there was only one mission during 1981 for Parts A and B, and one separate mission for Part C of the project. By the end of 1981 the project was virtually completed. During 1982 two missions were undertaken; the last was for the preparation for the PCR. The intensive supervision during the first year helped the early completion of the project. Policy Modification 45. Notwithstanding the short time during which the transport component (Part C) was prepared, the appraisal process succeeded in setting-up an effective management system. The main problems that arose during the implementation were not related to the basic premises of the appraisal but to the scheduling and timing of the suppliers and contractors who executed the program. The experience of this and other similar projects should serve as a lesson to the Bank in that these steps often involve substantial delays, and that they have to be anticipated as contingencies. Even though the three parts of the project were implemented by separate ministries and operating agencies, the Bank Group missions achieved close integratc4 teamwork. It is significant that the 'original premises and assumptions on which the project was based have remained valid throughout the implementation. 46. Although there was some resistance to the Bank Group's approach to privatization on the borrower's side, specially Part C, the views of the Bank Group were eventually accepted. The relations between Bank Group staff and the Borrower have been satisfactory. It can probably be said that the Bank's role has been important both in the design of the project and in its implementation. The supervision effort had a significant impact both on the pace of implementation, and on the quality of the systems that resulted. It also permited the Bank to draw valuable experience. VI. Conclusions Overall Assessment 47. The experience with this project shows that emergency reconstruction projects - requiring two years to implement - can be effective, provided there is a serious commitment on the part of the local authorities. While the appraisal time in the field should be adequate to obtain a comprehensive assessment, the processing time of the SAR to Board presentation can be reduced to two or three months by issuing only a President's Report. During the first year of implementation, quarterly and short supervision missions should be planned with weekly communication (where necessary) with the project unit. To facilitate disbursements, a revolving working fund should be established - large enough to cover three-months expenditures. - 103 - Conclusions 48. Part A of the urban reconstruction project has demonstrated that where Government authorities at the various levels are committed, emergency reconstruction projects can be implemented quickly and effectively. The projects should have a limited number of community facilities to be built where location factors can be analyzed and diagnosed through the use of concept plans or structure land-use plans that do not require the time consuming preparation of a complete inventory. Land acquisition should start within two months, as soon as realistic costs can be obtained from prototype designs and outline specifications. 49. The success of Part B - credit for small-scale operations - was due in large part to the committment of the local banks to promote the program through direct contacts in the community. Evaluating the needs in the field shortened the processing of the loans; in all cases these loans were repaid in a shorter period than originally anticipated - in some cases in less than 12 months. 50. The transport component, Part C, exemplifies how cooperative planning between Borrower and Bank staff at project appraisal may gradually improve Government policies. Privatization of the urban transport system through a joint-venture of privately owned enterprises under the public planning umbrella of ENABUS is now an accepted-Government policy. Careful deployment and utilization of appropriate management, technical and consulting assistance for project preparation, appraisal and supervision minimize the use of Bank staff resources and is of capital importance whenever the borrower's ability to perform depends on how much they learn during project preparation and implementation. Selection of the consulting firms and individuals responsible to carry out the technical assistance was time consuming but produced good results. 51. Finally, the country's financial constraints, time limitations, and rapid deployment of Bank resources required simplicity of design which generated adequate responses from the borrowers. Government staff dedication at all times also contributed to expeditious execution. TICARAtA - ClIDTz 96$-n UBAN RRCONSTReCTION PROJICT . SUI0IA~ y oV TOTAL PRöJEC? COST (n-000) Appratal rätimate Actual Cofat Adittoaal Coot pinat Total 9 V$ -S i -t f- -1 a PART A - MUNICIPAL N1CONSTRUCTIOW 80.000 8.000 0 0.027 .02 i.8 1.548 115.730 11.571 1. ftelti 14,700 1.470 18.340 1.834 18.340 1.834 2. Natagalpa 13.900 1.390 16,470. 1,647 5.670 a67 22,140 2.214 3. Lnon 8,100 810 11.040 1.104 11.040 1.104 4. Chinanåa 5.500 $50 9.870 987 9.870 987 $. Mauaya 13,000 1.300 22.2.10 2.221 9.550 95$ 31.760 3.176 6. givas 12.900 1.290 13.340 1$,5 15.540 1.554 7. Man.gua - INAA 3.200 320 3.990 390 3.990 399 C.>ntingeneea 5.130 5__ 3 113-TOTAL (76.430) (7.643) (97.2oJ0) (9,720) (112.680) (11.268) tiroaestonal service* 1.370 137 880 88 880 88 Project Admlatsratton 2,200 220 2.390 29 2.190 219 sva-TOTAL (3.570) <357) (3,.070) (307) (3.070) (307) PART s - #IRPR112 jtTALL xIMABILITATION 1 . 44.800 * 4.4!0 44.800 4.480 1. Com.ereJaltladustry/Service 40.000 4.000 34.800 3.480 34.8001/ 3.480 2. lu Cooperatives 10.000 1.000 10.000 .1.000 PART C - USAN TRANSPORt 140.000 14.000 jg,f0Q .!470 134.700 13.470 1. Bases 88.000 8.800' 95,000 9.300 93.000 9.500 2. Spara Part& 18.500 1.850 10.000 1.000 10.000 1.000 3. Iaintefance squipment 9.000 900 9.000 900 . 9.000 900 4. Inad tfoute Improv.ente 21.500 2.150 1.7,700 1.770 17.700 - 1.770 5. Techaical Assistance 3.020 .. 300 -.. 0 300 .... 000 _ _0 TOTAL 260.000 26.000 279.70 27.977 15.480 1.348 29$.250 29.323 a/ Second Xunicipal Narket added. 91 J34 KasYA and Central Covernatdeeid to ap~ded ecopc of the faero drainage. c7 As of Junc 30. 1982. total VUN lendlet te C 74.280.182.00 (into third round of leanding). 4/ ThiP vai t c.nnretrd from Part C to provIde ertits to the priv..tc bo e..p.at ren. 偽 i 站 ｀ 姍計 汰！魷－ ― . ．· ⋯ 106 눕 & & 1 & 됴 爵驢썅 ·！ 」 ＊ -,---& ,l--l· ！ 욜 . · ,-,-( WCA~ - cum %I-U tøiwi-ø kr rAd -Å- mælvm. MIMMUM *Ul~ AM A~ OMMCM CU~UR gt N KXD~ Naocomm Å c T 9 Å L (&j e e utad o) L~ at bl~lem IN Kna~ R~ TOTAL ?ØWN~ ) tftw a~ n~pla 01 1. uter ~7 - 41,«» 2ýMM 4.5ý3 3,Og.3B7 - - - 4.553 (Apm K;E~ <r/6») (r/r> (r/6») 2. ~ ~am - 5,425 t*m,m 170 w,= - - - 170 ».32a - Om t om~ M~ w M~ 1,0ma» 0~ het~. 4. 5~ ljrtwtw (4W Ud-tu) SAM M ha~4w> ",(W OM 0~.* ete* St~s (Gýlleel 1.150 - 102~ (8,130 1,2R mo.«D 5.3 b~-Aeag (&ja- - 10^ 636~ 1,2% 59,784 4W,216(18^ 1,2% 460.OM ~~ø de CaUm- a~) %.mm, l SA~ (IM,92» (3^042) (Nu~ 1%u) (5,232,»4) (IOIMIWW 6.1 m-rr-wb sur 3.6W.«» 3,031. - 2.86%.qw 720 2.242,913 1.715 - 5^813 6.2 tbrcmýD »~ bla - ni* 754 - 216n11950 WO 2,989,281 1,6X - 5^7.231 7. - 1,313,740 - - 1,»,"4 1,207.664 3ro - (M~ » MM 1.138.123 tu".r~ (3 (? VA 1,9M.718 1,9M.718 t~tq nut. ~rlpw "lom 667,» 125.W% 456 MI= 108- -mz sabe tI~ ~ ~I ~ u a 4 I I luiiiy a *~ Ii III n I s 6 9 * i •'4ii 壇盧、鰓二 ＇ &． 館纏拿 。二’ ．一會 幣．&: －魷c申 鬍，‘ 闢 妒 向j 寧 ， 馴 &， 飲 ‘ 豐撾匡上勰」劍醒必堅 k 觔堅凶 翅鯉魷 鯉頃 劉中 豔 貍 更」遞整蠱盤 豔 整 麵 豔單 糅壺夠 整 貍肥 主 取 遛 翅圍壁黛顰必江。 ． t.& 煙鹽 糅搜堅 上 團 。劉‘壩 個 加開 朧州細】 一 ． ■ 口． 國開 口常馴悶 總D 闕 縱 哺網 j ． 一． 劇區 ， 魄 馴開闢 口 口閱嗡 寫自嗚 州 “．劇細》 綢“ 戲開陰纖個歸外 你”留 細‘” 胎 鰓卸d 魚 ■． ■口■■．口 ． 開 目■■ 嗚 口 一 ． ■ ． ．■■■開■ ． ． ■ ■ ．口． 口．■ ■■口矚■口 ．■ 口口自 ■開■ 口口■ 自口自 ■ 自 唱口開 ■ &&& “ 州‘&& ‘ 。劇”& ＇ 。 劇”& t．驚糁嚮無． 一 ,.& ‘ ． 為 ’ ”跚 一 ， &r閉 ． － 一 一 一 t.,& 一 ” 一 ：t黝 么嚮鰓冷無鳥 一 ’攔付 謝〞 一 ‘m 衍 · 購州 一 一 一 一 → 們 細州 ‘才． C．．總。訪．目∥化．… . ． 一 ， & 一 一 一 一 一 ‘ 一 一 一 一 一 一 一 鳥 忽驢馴甦 d 鰓雙 · ’ 勵 州 細 ，.&I.& ， 一 一 一 · · 饑恕曾總團 ‘ 。 ” － 戚 撇州 驢一 付 ”〞 一 一 一 鳥 響 斗概般 ， .&, . : ．。 細神 細 一 細州目勵 細為妝口．“騙 一 一 －仕 一 一 一 一 － 一 ． 神””伯 細 O 必 d& ” 向“， 自婦 ｀馴 一 鬍亂 別〝 “． 一 ’ 。 t．小 〞 ， 一 “ 一 一 ｀細 ，＇ 建” & ． 一 ’ ‘。 。細．”婦 一 一 t. ． 鳥 觔 一 認 ． t. ，〝 ”． 一 “』 t. “ 馴’ &H ,., ． 細 “ 淌 “ t 一 一 一 ‘.&.．細吋 一 一 必必萬勵 一 一 膩蘇 痲 一 一 膩氣 騙 一 一 華必贏 磁 e ‘縣 纖 糁編 戶 刨 年 ”一 一 一 一 一 一 一 一 一 一 一 一 ’ ,． ． 勰鳥離勰縉． 一 一 州網 卹 一 · － ， 一 ‘,,& ， 一 t,, 馴”以細魚攤 細 tt ．翻口勵 .．瓷燾戶爍 一 t． 樹 － 么． 一 一 － 翰 ＇” 。 一 ． ． 黝 ＇& 亂， ， 。 ‘。“畸 d 俗 t 細 細寧 闕 露 一 － － 一 一 － － 儲才 － 一 &.ht 韶 闕 馳袖開細 一 － 中糰 h “ 山閱． ． 0 ”目 “ － 一 一 一 一 一 馴勵j 論 一 一 瀾勵 J 矚 “ 。 馴 自戶 闢 一 一 一 一 一 抽 牌細 開 畸縴 ．一 一 一 一 ”一 t. “ 牌 一 一 辟j& ＇詞坤 一 － 中L& ．磚徇 嚮 ,．認識龍 鸞紛驢d&I 囂邢罕 ， 勵卸“ 唱 二 中網戶畸“ 纏 驢 日三 闢磚 緝 口婦 一 － 一 鄴鑾鐺 ！ 三 三三日 ｝ 一 鑿 一 一 ！‘ 甲馴 馴閑 認開戶 ． ‘． 繁 聖e 一 ． 目→‘ 闈口 口口妒間口 開 ＿ 胛 ． ,. 瀾州 婦 一 一 t．必魷．馴睡 一 一 一 一 一 。 j 闕．闢． , t‘屆 織綴豔爍糁扎．- ． 一．．一 －－ 一 一 ‘ 以 一 一 一‘ 一 一 → ‘ 一 一 ■ 口 ． 一 蝕 ． .－ 一 ‘ ＊ 一 &.& 一 ‘一 一 一 ‘ － 一 一 巒 巒 焜藝 ， - ― 一 潤為 馴” a， 細 坤 － 一 “ ’叩 細 ～ 二 ‘． &. －… 為＇,, ，勵二 "TCW^ - c~ M-K ffilmlffiffim 1~ pm A - ~CI.V. ~~Cm a^ magen~ A CT 9 A L (8 4 ur~ w momm m KUCMIL Y~ (PI ~_ - - TOTAL (~ m~ nLå~ at id 0~ 92 vi C3~ 92 at Ca~ la at 0~ 3,= MIM - 3~ 443,6W - - - - 3,= 40~ - m 276,4W - - - - m 276,480 3.1. ~U 6,190 2,711,62 3.2. Inte~ ~ 9 (0~ maou) - - 1~ 2,721,= ~14 0~ 19M 10^713 ålm 14MOM rolig s% 7n 705 729715 10,997*.58 13,719.00 4. st~ IJE41W (M Mse (60 hutmim). M.419 m (Mad~ u~=> ~,419 fru=) IL2. erlowm(amm) "3,614 5.3. fb.»ralam~ 42,%0- 42,%-0 46,0W - 46,007 14xwo - (2.454181 L KoJblotenmoe hd 300 300,= 3W 2BIJU 27 M,346 327 481~ 7. 4^00 3,= - 6,4^467 -3,01,750 S.M 9^217 0.1. MMUC 3M SMIM ya 1ý41M L2. COMM9 Y& - MUC F*dg!!* ~pm~ ~ 3 ~ec~ (ft=le~ 1,200,OW 3 Calle~ 2 Up W~ (Con. 1^842 3 GÄlm~ mopm 2 ~ w~ BU,3W i Th~ MOIM 2 Dff w~ M.300 i MM~ m10%7 i Wa~ 4 Cupietm (Ompw~ 60.OW 4n 331.%7 46,933 4 G~tom 46.933 24081 k~ h~ 24(61 1~ 3 14.9n.M 31,79.609 01o WtikcMU - c0!T 9fit 1mmt mcyNmTC~ P!ntW~ m A - maKus1UntnIrCt= S10TAD m0AIU. Am Irlx:U< outs BY i50ICIPATI ag faIE1T A C T 0 A L je t a d) EsD~ vi ~~U-0 IMD or IICl1 ,Ea TOT AL (PI..aa (~tr H/81BD) (1er FKndaD) o__~~) IMo2 .01 0~tc 52 lta 0~ 2 id ao el ut å1 4,9W 1,330,00 - 5,260 1,261,079 - - - - 5,260 1,26209 1. !mter - )(2"/4) (2" .(2 5,830 62,700 - 4,420 744,346 - - - -- 4,420 744,346 !.gny1ans -- 2,250 627,528 -- 968 3%,069 - 681 279,806 - 1,649 675,873 3.1. ieliea) (8) (1/26r)(I/2 •(026 <5 kies) 428,10 (5 I iw m) 795,135 (5 idg) 795,135 3.2. Dr~a (Inm.) (1,471,0~) 1,055,628 1,11,M (279,804) (470 banrias) 693,050 (358 Ion-as) 254,999 --- <35 hadaa) 254,999 4. 5. Streeta (AIe)M - - - - 322,312 - - i. Lpaired (reprda - - - - - -- - 1,900 1,524,582 5.2. 4OM (Mxs) - 2,923 2,00,0 (13,224) 1,900 1,524,582 - 5,206 594,591 - 1,871 213,674 - 7,075 80,265 5.3. Twd (Ntejaada, - - - - (2,655,159. incl. Omtag y Ad.) (2,000,000) •2,1t9,173 (535,986>- - (dl~ nOfi~ 300,000 240 - , 299,479 - - - 240 - 299,479 6. mbIs.ntemw d (Taller taxatetpa) 4,800,000 , 0 -4- 5,804,015 -- - 611,158 3,410 - 6,415,173 7. ?1arket 3,000 - (>.realo neiw) - .351 - 536,210 287,488 351 - 823.698 8. SLvinme (Ratro) - - 9. le icrpdmnt (~lupMno lebliee) * 2 Olectmr 733,228 - - - 2 omlectors 733,228 2 eblectors (Wmlct 800,000 Itp-uc 441,150 1~mp1nuk (CMmote 23I,000 1 kap Truc 441,150 -- -- - 400,000 l ka..or 331,567 --- Tractor 331,%/ 1 ractor 4 cpactmr 46,93. 4 nG~par on(r"ua~at'") 60,000 4 nuspector 46,933. - - - _ilto~ 12,392 - - - 12 392 (1,565,270) (1,55270) - (j,490,00) 5 0,000 - 53,45 - - - - - 53.49 10. .uid.l ffim --- - loL 12,911,378 13,829,270 1,714,436 15,543,706 00 - URBAN RECOIISTRUCTION PROJECT PART I Si.L. ENTERPRISE RER!AA11.XTA2 - STATUS Or FUND - JUNE 30, 1982 OfODA12RA CAPITAL - IDA/ED Ø 32'NJl.TON - 13% i&ATm ITERtgT TyPE OF LOAN Iadustrial Service Combereia Total 1. .orCkPtIUptal (1a 4) 21.119,074.23 10.220.238.55 32.591.871.31 63,931.184.00 2. ixed Aasets - Pondo 3.954.035.64 14.383,113.32 994.366.S1 19,331.515.77 3. Vorking capitul - seneficary 427.907.00 75.000.00 152.820.00 655.727.00 4. Fixed agets - Seneficiary 101.000.00 413,000.00 307,000.00 821.000.00 5. Vorking Capital - 1I.. 1 1.773.891.21 784.138.30 2.391.746.23 4.949,775.74 6. rixed 'Asets - I.F. 1/ 323,445.71 1.288,676.03 64.162.90 1,676.284.64 7. Working Capital - fEDfi 19.054.656.02 9.506,100.24 30.042.555.28 58.603.311.51 8. lixed Anset8 - ED 3.392.209.93 12.536.437.29 627.953.91 16,556,601.13 Local Ban • Beneftary Type of Loma 'Total Aaoont Patticipation Equity loduatrial 1812 25.073.109.82 2.097,336.92 528.907.00 service 1060 24.603.351.86 2N072.814.33 488.000.00 Comerceial 2258 33.586.38.32 2.455.909.1 459.820.00 TOTAL 5130 83,262,700.05 '6.626,060.38 1.476.727.00 TOTAL ]M LWEING 9 74.280.182.00 1l Inter~ediary lank inannlag. - 113 - ANNEX 1 Table 10 NICARAGUA - CREDIT 965-NI URBAN RECONSTRUCTION PROJECT ESTIMATED AND ACTUAL SCHEDULE OF DISBURSMENTS (in US$ million) ESTIMATED ACTUAL SEMESTER DATE DISBURSEMENTS DISBURSEMENT 1 6/30/80 7.2 4.4 2 12/31 10.2 5.6 3 6/30/81 4.6 3.0 4 12/31 5.8 5 6/30/82 2.3 6 12/31/ 0.3 7 6/30/83 0.6 22.0 22.0 - 114 - ANNEX 2 Page 1 NICARAGUA - CREDIT 965-NI URBAN RECONSTRUCTION PROJECT COST RECOVERY AND MUNICIPAL FINANCES FOR PART A 1. At the end of hostilities almost all the municipalities except Managua were bankrupt. While cost recovery was not part of the original objective of the project, each of the six municipalities over the last two years has been able to establish a substantial degree of cost recovery of capital improvements as well as of operating costs. Before the war well over half of the improved lots within the urban areas paid no municipal taxes. Historically, subdividers sold lots in irregular patterns which were not registered, yet in some make-shift manner water and electricity services were general provided along with monthly charges. With the project, preliminary real property inventories were undertaken, most of the property lot lines were regularized and registered, especially in the expansion areas. As a result municipal revenues from property taxes more than doubled. As seen in Tables 1 thru 6 (Annex 2), Leon, Chinandega and Masaya increased their total revenues between 49% to 70% from 1980 and 1982. For 1982, 57% to 60% of their revenues were from property and sales taxes and services of street cleaning and maintenance and public lighting. The revenues and expenditures, projected thru 1986, show a general increase of 75% and a balanced budget with a modest positive balance for each year. 2. Where street improvements were made, a betterment tax was levied; it varied depending on the amount of the voluntary labor contributed by the local residents. The house owners were given two to three years to pay; the same was true for delinquent taxes. Most have paid the betterment taxes in less than two years with no interest charge. Today about 70 percent of the lot owners are paying regular land taxes to cover the cost of maintenance and repairs of streets and drainages. 3. For markets and slaughterhouses the fees in the six municipal- ities traditionally covered only the operating expenses. With the formation of vendor cooperatives, a self-policing system has been adopted to control the number of mobile vendors who scll in the open terraces of the market. They pay a daily fee while the stall-keepers pay on a weekly or monthly basis depending on the size of the stall. In the case of the new Masaya market they expect to recover their costs over the next seven years. Slaughterhouse activities have recently been regionalized to achieve greater economies of scale, sanitation controls and cost recovery. Cattlemen deliver their livestock to the central slaughterhouse where they are hold for a day to allow time for inspection. They make direct payment to the slaughterhouse when they pick up the dressed meat the following day. A complete cost control and accounting syten is being installed in all the regionalized slaughterhouse to ensure adequate cost recovery. The new slaughterhouses for Matagalpa and Chinandega will operate under the regional program, while the small slaughterhouses for Masaya and Rivas will specialize in pork products. - 115 - ANNEX 2 Page Z 4. For water supply, the users pay a flat rate for unmetered coniections, while those with meters pay a user benefit charge that covers the capital cost and part of operating costs. Over the next five years INAA expects to cover almost all costs. In Leon, 3,000 water meters had been installed by June 1982 as part of the project, resulting in a saving of 16% in water consumption. Both Leon and Masaya have introduced a progressive tax - the higher the consumption, the greater the unit cost. - 116 - ANNE 2 Tabla NICAPACUA UROANWRE~UCTIO0 MUNICIPIO 0 ESTEt. ANNUA, BUDGET (C$ NILLES) - RESULTADO8 1980 1981 1902 1983 1984 1985 1986 Ingreso s/ venta y/o prestaciones de servIcios apuesto 3.565 3.692 3.715 3.824 3.945 4.012 4.017 £%puestos veros 217 226 229 234 236 239 241 matrIculas y licencias 336 349 351 362 374 385 392 Tasas de servicio 345 408 411 415 419 424 432 Secuperacion reparos - - - - - - - StMA 4.463 4.675 4.706 4.835 4.974 5.060 5.082 Ihuta 3 3 2 2 2 2 2 Otros 2.497 462 472 481 492 505 511 TOTAL INGUSOS 6.963 5.140 5.180 5.318 5.468 5.567 5.595 Gastos MAinistracion 796 800 820 826 831 840 852 (Cápitalizables) NETO 796 800 820 826 831 840 852 Servicios Urbanos Aseo Manto. pav1mentacion Alumbrado publico Parques y paseos Destace Educetion publica Manto. de cauce y drenajes StamA 3.063 4.388 2.658 2.735 2.746 2.758 2.801 Operaciones Municipales 360 372 381 394 405 . 416 427 SU-TOTAL 4.767 5.560 3.859 3.955 3.982 4.014 4.080 Provisiones y reservas Depreciacion 111 112 215 215 217 217 217 Amortiacion - - 230 237 239 244 249 S mA 4.878 5.672 4.378 4.477 4.500 4.527 4.589 Intereses - - 74 70 62 52 43 TOTAL CASTOS 4.878 5.672 4.378 4.477 4.500 4.527 4.589 Superevit (deficirt) operacional 2.085 (532) 802 841 968 1.040 1.006 Ingresos (Egresos) no operacionales 212 217 221 231 224 217 216 SUPEMAVIT (DEFICIT) NETO 2.297 (315) 1.032 1.072 1.192 1.257 1.222 - 117 - ANNEIX2 Table 2 NICARA0UA URRAN KOtTMRPCTION NUNICIPIV utEILMVGLPA ANNUAL 5U05E (C$ MILLES) - RESULTADOS 1980 1981 1982 1983 1984 1985 1986 Ingresos Igpuegto el vanta y/o preaaciones de tervicos 4.665 4.689 4.672 4.675 4.705 4.712 4.728 lopueston vario 915 928 932 941 959 963 977 Matriculas y lticencas 715 768 765 771 782 794 797 Tasas de serviclo - - - - - - Recuperacion teparoe - - - - - - - StinA 6.925 6.385 6.369 6.387 6.446 6.469 6.502 Multa* - - - - - - - Otroo 1/ 1.842 1.932 1.945 1.937 1.927 1.932 1.965 TOTAL l#GRE808 8.137 8.317 8.314 8.324 8.373 8.4-1 8.447 Admitstrattve 2.503 2.601' 2.701 2.715 2.732 2.842 2.962 (Capitaliables) - - - - - - mET0 2.503 2.601 2.701 2.715 2.732 2.842 2.962 Servicios Utbanos Aso Nanto. pavinentacioa Alumbrado publico Parques y pseos Destace Educacton publica Nanto. de cauce y drenaje SImA 1.392 1.292 3.040 2.625 1.445 2.116 2.140 öporaetones municipal** 5.495 6.968 5.341 4.325 2.381 2.330 4.325 8U8-TOrAL 9.390 10.861 11.082 9.666 6.495 7.288 9.427 Proistona y roeevr Depreciacion - - 774 772 771 770 768 Aortizacion - 224 228 231 235 240 suNa- - 998 1.000 1.002 1.035 1.008 Interesö - 86 87 85 82 79 74 TT. 0AST08 9.390 10.947 12.167 10.751 7.579 8.372 10.509 Superavit (deficit) operactonel (3.095) (2.630) (3.853) (2.427) 794 29 (2.062> Iagtresos (egesos) no operactoalea 1/ 3.155 4.689 4.700 4.500 2.100 2.500 3.000 SUPEAVT (DU101T) mBTm 60 2.059 847 2.073 3.294 2.529 938 L/ Son injtrosoo de epresas productivas de la Municipalldad tniciadas con la donacion NOV18. 5. - 118 - AMRE 2 * (c muLLss) - assUuTaOOS 1980 1981 1982 1983 1984 1985 1980 INGRESOS =apustos $/,ts7.y/o preotaclda Iseicos. s/ventas rscd de .332 6.946 7.934 9.186 10.164 13.149 13.971 Ipuestos varios 819 942 1.189 1.421 1.614 1.829 2.076 Matrtcula y Licenclas ff9 643 739 80 . 977 1.123 1.291 Tases de serviclos 2.337 2.687 3.090 3.513 4.086 * 4.699 3.404 Recuperacida epanos 290 217 217 217 217 217 217 SUIA 9.337 . 11.431 13.233 11.283 17.4$$ 20.011 22.959 Wtotas 2 347 399. .49 r 607 698 Otros ' 56 - 86 334 391 436 300 . 374 TOTAL INGRa~08 -.i39 12.. 139 0.03 13.43 2J.14 24.11 Anintstrativos 86 1.038 1.246 1.495 1.794 2.153 2.84 ( Capitalisabies ) •••______________________________________ NET0 *45 1.038 1.348 1.493 '1.794 2.153 3.554 Mto. Pavimntacida Au:brado Pöblico Parquos y Paseos Dostaci Eduacida Peblit .to. de Cauces y Drenajes Otros .17 6.1 2 7.382 8.839 10.631 12.717 1$.308 oeraciones 1aniciales 820 984 1.141 1.417 1.700 2,040 2.444 US.M0AL 6.814 8.174 9.809 11.771 14.125 16.950 20.340 Provisiones y Resevas Deprociaci6a • • 286 3 236 347 347 347 Amortiaaci6a •••• 133 13 133 218 218 218 SIN0A ••9 49 389 . lös 563 363 Intereses . 38 •••• 47 711 743 740 693 TOTAL CA~TOS 6.850 8.163 10.241 12.911 15.438. 1.7l s 21.598 Superavtt ( dfcit ) operacionai 2.841 3.505 3.708 3.'62 2.987 2.869 2.633 Ingresol (forosos) no opemå~na list. k 388 1 (464 1 f 119 1 671 1 f 80t 1 1 966 1 1 1.139 ) Superavit ( d6fict ) Net 2.117 3.039 3.149 2.491 2.182 1.903 1.474 - 119 - ANNEU 2 NICARAGUA URBAN-R~ UCTION KUNICIpo UD Cii1ANDacA ANNUAL BUDGET (C MILLES) - RESULTADOS 1980 1981 198 2 983 1984 1985 19*6 IoNGksOS IMU:STOS S/VZNIAS y/o PRESTA- 11.982 13.779 15.846 G,o. hL. Stav4.føs 5.734 7.878 9.060 10.419 DisUrS.>S V~LKoS 1.023 1.176 1.479 1.725 1.958 *2.226 2.534 Y.ltcu.. Y L1CECIAS 605 696 800 920 1.058 1.217 1.400 T.Ss Dt SEVICIOS 833 954 1.12 1.2.67 1.451 1.676 1.927 RCULãACION T.t.sAROS 592 414 444 444 444 444 USA 8.787 11.152 12.885 14.775 -16.899 19.342 22.151 MLTAS 18 394 453 521 599 67,2 OTROS 27 279 319 365 418 479 550 TOTAL i-c~sos 8.832 11.825 13.657 15.661 17.916 20.310 23.493 JDIINISTRATIVOS 1.107 1.328 1.594 1.913 2.2r6 2.753 3.306 (CITALIZALE~S) ••-- - -- o- ••o-- -- o-- -- o-- -- o-- -- o-- wET0 .107 1.328 1.594 1.913 2.296 2.755 3.304 SRV2ICos UaaA s. ALUl"..OUd.C icco rubLeAv tAktU.S Y P.SEOS ELCtCION PUlWIC .. tI CAUC15 Y DZ~4JES OTROS__________________________________ ~SUL4 4.036 4.843 5.812 6.974 8.369 10.043 12.052 OPERACIONES WU1ICIPALES 1.367 1.641 1.968 2.362 2.934 3.401 4.081 SUs-TOTAL 6.510 7.812 9.374 11.249 13.499 16.199 19.439 PROVISIONES Y SERVAS DEPRECIACIN ••ø-- 6 6 6 2L .91 91 AM'rTIUACIOm -•o-- 191 191 191 191 191 191 SUM4 --- 197 197 197 212 282 282 INT4ESES 112 116 124 449 432 406. 35 TOTAL 4A~TOS 6.622 8.125 9.695 11.895 14.143 16.887 20.076 SUPrAVIT OPRACIONAL (UFICIT) W 2.210 UNGa.SOS (EG4ESos) OP~MWACOxLSC 197) ( 3.700 236) 3.962 - 283) 3,766 340) C.3.773 408) 3.623 { 493) < 3.417 568) SUPERAVIT (DEFICIT) NET1 2.013 3.464 3.679 3.426 3.365 3.133 '2.829 - 120 - 2 ANNElK NICARACUA URflAlC1kiCuN%TtUCrioN NJCIPto »DC"~AgAYA ANNUAL DUDGET (C NIL S) - RSSULTADos 1980 1981 1982 1983 1984 198 . 1986 INERESOS Impuestos s/Ventas y/* Prostacda de serviclos. 2.291 3.717 4.320 4.969 5.714 6.571 7.557 Iput*stos Varios 1.430 1.644 1.937 2.229 2.555 2.930 3.362 t*atricula y Licencias 248 28! 328 377 433 498 573 Tasms de Servicios 413 475 546 628 722 831 955 Recuperaci64 ropaos •••••• ••••• ••••• ••••..•••••.••.--- ••••• 8ta4A 4.382 6.41 7.131 8.203 9.424 10.830 12.447 ultas .. •.• 187 216 248 286 328 378 Otros . 48 154 178 20$ 235 271 311 TOTAL DC IN~RSOS 4.430 6.0 7.U25 .6s 9.945 11.429 13.136 GARTOI Administrattivos 1.539 1.847 2.216 2.659 3.191 3.830 4.595 ( Capital izable s -) •••••.•••••.•••••.••••• .. ••• • • NTO 1.539 1.847 2.216 2.659 3.191 3.830 4.595 SorricoRs Urbanos ,to. Pavtr.entacida Alu-bralo PJblico i Parques y Pasoos Costacc Educacidn Pblica ylto. de Cauces y Drenajes otro$ StMA 2.016 2.419 2.203 3.43 4.180 5.016 4.020 Operaciones Municipales 81 344 so0 SUB-TOTAL 3.789 4.547 5.456 6.547 7.857 9.428 11.314 Provisiones y Iese*~a 161 Depreciacifa 134 134 134 161 161 Aortilacida 128 128 128 226 22- 226 SMA .••• 262 262 262 387 387 387 Inter*~es 10 12 81 569 557 548 $10 TOTAL GA~70S 3.799 4.821 3.799 7.278 8.801 10.363 12.211 Superatvit ( 6ficit ) operacional 631 1.681 1.726 1.278 1.144 1.066 92 rl esos ( Egresos ) No pperaciona- ( 43 ) (521 (621 (743 891 < 107 )2 Superavlt (Deflit Not*es 88 1.629 1.464 1,204 1,055 939 797 - 121 - URRANUXT5 C ANNUAL BUGI <C$ MILLS) - RESULTADOS 1980 1981 1982 1983 1984 1985 1986 Ingresos Impuesto s/venta y/o prestaciones de servicios 1.708 1.811 1.903 2.112 2.213 2.371 2.482 Impuestos varios 206 389 506 568 602 645 701 Matriculas y licencias 161 181 191 201 231 300 309 Tesas de servicio 546 618 623 637 645 668 677 Recuperacion reparos - - - - SMA 2.621 2.999 3.223 3.518 3.691 3.984 4.169 Wultas 16 17 20 26 28 31 35 Otres 61 61 63 66 71 75 79 TOTAL ICRESS 2.698 3.077 3.306 3.610 3.790 4.090 4.283 Gastos dauinistrativou 420 432 468 482 sol 521 525 (Capitalizables) - - NETO 420 432 468 482 501 521 525 Servicios Urbanos Aseo manto. pavimentacion Alumbrado publico Parques y paseos Destace Educacion publica M4nto. de cauce y drenajes SuMA 627 711 1.325 1.320 1.332 1.345 1.362 Operaciotes municipales 504 530 706 709 710 717 725 8UB.TOrAL 1.551 1.673 2.499 2.511 2.543 2.583 2.612 Provisiones y reservas - - 375 375 420 425 432 Depreciacion - - 296 296 . 302 315 319 Amortizacion - - 209 211 217 222 226 SMA • - 880 882 939 962 977 Intereses - 72 68 65 66 70 71 TOTAL GAS2O8 1.551 1.745 3.447 3.458 3.458 3.615 3.660 Superavit (deficie) operacional 1.147 1.332 (141) 152 242 475 623 Ingresos (Egresos) no operaconalee - - 1.086 1.096 1.110 1.230 1.300 $UPRAVIT (DEFICIT) NETO 1.147 1.332 945 1.248 1.352 1.703 1.923 - 122 - ANNEX 3 Page 1 NICARAGUA - CREDIT 965-NI URBAN RECONSTRUCTION PROJECT HOUSING COTD 1PROVED - PART A 1. For all six towns, about 4,100 dwellings of aided self-help were built during the 2k year period starting January 1980 and further housing starts continue at about 1,200 to 1,500 shelter solution per year. This is an impressive program which is a tribute to the efforts of MINVAH, the JRMs and their local planning units. 2. Esteli (42,000 population) which suffered the greatest lose proportionally in lives and property had a critical problem to assist in re-housing about 2,000 families that returned to the town. During 1980, MINVAH built with bilateral aid 500 units in various locations throughout the town; in addition, approximately 1,050 units of self-help housing were built. In the recent May 1982 floods 32 families were left homeless. Part of the recently completed municipal market was used as their temporary shelter, and in September they were resettled permanently in aided self-help units (wooden construction) in a new barrio planned for urban expansion to the northwest. Part of the materials had been stockpiled by the Municipality for emergencies and part was privately donated so that little aid was required from MINVAH and the Central Government. With the continual arrival of new and returning families, the local planning unit has prepared a long-range program of 400 to 500 dwellings of aided self-help per year. This is a further demonstration of the planning and development capability of the municipality as a result of the project. To assess the impact of the street improvements of the project on the housing stock of Esteli, the planning unit undertook a sample survey in June of 1982 of 88 dwellings on improved streets in the center. Twenty-nine dwellings were improved at a cost of C 298,800, or an average value per dwelling of C 10,305 (see Annex 3, Table 1). 3. The housing stock of Matogalps (48,000 population) was not seriously damaged by the War; terefore MINVAH did not build any emergency housing.1/ During the reconstruction, about 350 new dwellings were built privately on vacant lots to satisfy part of the housing deficit. In the summer floods of 1980, 200 families were effected of which 45 lost their dwellings and were relocated on high ground on mini "sites and services" projects which the municipality financed. In addition, on improved streets of the project about 218 dwellings were improved at a cost of C 2,772.90/ dwellings (see Annex 3, Table 1). The planning unit has developed an aided self-help program for the urban expansion areas to the north of the town, but there are severe topographic limitations on expansion. To meet the total housing needs a redensification program is also being prepared. I/ Furthermore, there was no available land. - 123 - ANNEX 3 Page 2 4. Leon, the largest city (96,000 population) has the largest housing deficit. During the reconstruction MINVAH undertook a program of 1,400 units of new project type housing. In addition, about 930 aided- self-help units were built; part of these were for the refugees from the May 1982 floods. An urban expansion area was selected to the east of the town which will accomodate a total of 2,200 "core" units to be built over the next four years, with aided self-help. From the sample survey of 48 dwellings units, the average improvement cost was C 31,238/dwellings. 5. In Chinandega (48,000 population) 350 new dwellings were built by MINVAH. In addition the planning unit has developed 850 lots for "sites and services" to accommodate the homeless from the May 1982 flood disaster; other families still in the flood plain are being resettled on a second site. By the end of 1982 approximately 2,000 new serviced lots will have been added to the housing stock. From the sample survey 32 dwellings were improved at an average cost of C 10,981 per dwelling. 6. In Masaya (60,000 population), MINVAR built 650 units of which 250 were in Monimbo - the contiguous community. A large urban expansion area to the NE has been developed beyond the new market and bus terminal. Over 800 returning families have been resettled in unserviced plots, to which water and light service are being added. This expansion area is adequate to accommodate approximately 1,600 additional families over the next four years. From the sample survey, 71 dwellings were improved at an average cost of C 13,310. 7. In Rivas (22,000 population), no new housing was programmed by MINVAH, since the demand is relatively small. During project implementation, about 122 new families have been settled on the urban expansion to the NE and South. From the sample survey 15 dwellings were improved at an average cost of C 31,077 per dwelling. - 124 - ANNEX 3 Table 1 Estimated Rev and Improved Housing Construction - Jan. 1980 - June 1982 tststed Total Unit Total Cost Estel1 Hatagalpa Leon Chinandege Hasaye Rivas Dwelling Cost (in 000,000. Total Town Development 1. stimated Urban population a/ 42,000 48,000 96,600 48,000 60,000 . 22,000 2. WINVAR programs b/ 500 - 1,400 350 650 a 2,900 50,000 145.0 3. Aided self-help 1,050 350 930 850 c/ 800 c/ 120 a 4,100 15,000 61.5 Total 1,550 350 2,330 1,200 1,450 120 7,000 206.5 Improved and new hotsig * on improved streets 1. No. dwellings on 88 d/ 326 48 143 44 90 * 1,181 improved streets 2. No. dwellings Improved 29 218 48 32 71 15 413 3. Value of housing 298.8 604.3 1,499.4 351.4 945.0 466.1 4,163 improvements in%(COOO) . 4. Average value/dwelling 10,304.59 2,772.9 31,238 10,085.4 13,310.4 31,076.7 10,085.5 S. Total value of housing 6,001.9 604.5 1,499.4 1,014.7 1,457.5 1$674.7 11,252.7 Improvement (in OOO) a/ Dec. 81 Eatisate. b! Includes Bilateral AID. i/ Includes family resettlements. 7/ A sample of the Central area improvements. - 125 - ANNEX 4 Page 1 NICARAGUA - CREDIT 965-NI URBAN RECONSTRUCTION PROJECT TECHNICAL ASSISTANCE, FINANCIAL & ECONOMIC REEVALUATION - PART C 1. Technical assistance to DGT and to ENABUS has been a key tool in project implementation; about 45 man-months of technical and management assistance have been provided to: (a) the management team of ENABUS, about 36-months in a 12-month period of assistance in management, operations, finances and maintenance; (b) DGT, about 9 man-months in two separate periods of 4 and 5 months respectively in the preparation of bus, spare parts and machine tool technical specifications on the one hand, and in bus route planning, bus scheduling, trip pricing, and urban transport management on the other. 2. Technical assistance to ENABUS was contracted with Transport Management Services Ltd. (TMS) of London; the TMS team arrived in Managua about March 1, 1981; in addition to the work program contained in the terms of references, the TMS team faced urgent tasks related to the control of maintenance, supplies and expenses within ENABUS. A first report dated March 23, 1981 proposed a complete ticketing system (the consultants estimated that about 35% of the loss of revenues were due to the lack of ticketing). A public relations campaign was carried out in the press to introduce the system which was finally implemented in March 1982. From March 1981 through April 1982 the management team implemented all areas identified in project preparation as critical, in particular the team trained counterpart staff while preparing a complete accounting system, setting-up preventive maintenance operations and training units, deploying bus operations to serve the metropolitan area, and coordinating with DGT the operations of the private sector. The results of TMS impact in management are best portrayed in the financial turnaround of the company's performance. 3. Technical assistance to DGT was provided during project preparation by TMS and from March through July 1982 by Delcanda of Canada. Technical assistance to DGT was complementary to the TMS contract and in its second part has been oriented towards the private sector through advisory services complementary to the supply of about US$1 million worth of spare parts to private cooperatives. The Delcanda team has also completed the route rationalization program started by the Bank mission in October 1979 during project appraisal. Economic and Financial Reevaluation 4. The urgent character of the urban transport component did not allow the mission to perform a formal economic evaluation. Instead, performance targets (financial, economic and social) were set up aiming at - 126 - ANNEX 4 Page 2 providing minimum acceptable services within the framework of Government policies and future desirable projections. From the start the Bank aimed at establishing a coherent management system and at closing the gap between the need to provide services through a public institution such as ENABUS, and the aim to increase the confidence of the private sector in the newly created management organizations for passenger transport: DGT and ENABUS. Although the main stumbling block to self-sufficient urban transport operations, the pricing policies of the Government in urban transport, has never been removed (trip-pricing in Managua's urban transport continues to be one cordoba, while present trip/person costs can be estimated at around 2 cordobas), the difference in operating costs between private transport operators and the public company have been reduced lately through increasingly efficient operations of ENABUS; in addition, it can be argued that the cost differential accounts for the burden of the organization of the urban transport system (which is entirely the responsibility of ENABUS) as reflected in overheads. The service levels reached in particular by public buses fully account for the cost differential and would have not been possible without the appropriate mix of public investment, adequate regulation, and supporting private transport supply. In this respect, the social impact of the project (public transport of passengers is no longer a critical area) has been fully realized and the trade-off between Government aims in public transport and cost is represented by the subsidies (see Annex 4, Table 3) for public and private operators which are the result of Government aims and policies. A change in Government policies towards transport is not expected; it would be against present Government policies which consider transport of passengers as a social service. 5. Cross-fertilization of Bank aims and Government thinking, however, has resulted in acceptance by MOT of increased private participation in the urban transport and in reconsideration of the future role of ENABUS as limited to the management and organization of services and supporting activities while operation of buses would be left increasingly to private operators through leases. Recommended Changes in the Role of ENABUS 6. The following changes substantiate mission proposals made to and accepted by MOT: (a) Direct operation of buses by ENABUS should be discontinued when the present buses arrive to the end of their useful life. New buses entering the system should be leksed to private operators and cooperatives. The terms of the lease (tentatively five years) should be programmed in such a way as to allow ENABUS a small margin of profit on the leases. Leasing of buses should be operated as a separate cost-profit center. Revenues from the leases should be used to: - 127 - ANNEX 4 Page 3 - contribute to pay for ENABUS' overheads in its future role as administrator of Managua's urban transport; and - provide a revolving fund for the renewal of the fleet on lease to private operators and cooperatives. (b) The maintenance program of ENABUS (established under the credit) should be completed and strengthened. Maintenance should be operated as a separate cost/profit center available to all fleet operators. (c) A main problem in Nicaragua today is the critical situation of spare parts supplies. Supply of spare parts to private operators and cooperatives should be treated as a separate cost/profit center within the overall structure of ENABUS. The Government should study the possibilities of establishing a credit line for ENABUS for the supply of spare parts. ENABUS would administer the spare parts inventory in coordination, but separately, from its maintenance operations and allow, through cost recovery, the formation of a revolving fund for future supplies. 7. Benefits and Savings: The benefits from this approach can be grouped in three areas: (a) Unless the previous recommendations are adopted, there could exist in the future a duplication in the roles of ENABUS and DGT in the administration of Managua's urban transport; the proposal assumes that present responsibilities of DGT in the rationalization of routes, fares and systems for urban transport would be gradually transferred to ENABUS. Savings in DGT staff would be substantial; (b) Savings related to the operation of the fleet (owning, controlling and managing daily operation of buses) would also be substantial since it is an expensive and staff-consuming job. Leasing of buses to private operators would free ENABUS' staff to concentrate on managing the system. Delegation to private operators (with an interest in the equipment) would increase the efficiency of the daily operation of bus units. Savings in ENABUS staff could be as substantial as 85% of present staff which currently has 1,700 employees; - 128 - ANNEX 4 Page 4 (c) Savings related to the standardization of the fleet and availability of spare parts are potentially high. At present, there are many makes and models in the private fleet. This diversity complicates the supply of parts and results in high percentage of immobilization of bus units. A proper channel for the supply of parts would result in better fleet utilization and gradual standardization of models. 8. In spite of this general improvement, ENABUS faces difficult issues; among them, the completion by Government of the maintenance installations and the privatization of bus units. Both these issues underscore the need for continued technical assistance. 9. Subsidies to ENABUS, which in 1980 were forecasted to about C$137 million per annum, amounted to C$82.8 million in 1981 and are expected to reach only about C$60 million in 1982 (about C$30 cents per K). The subsidies to private transport cooperatives, amounted to about C$15 million in 1981 (about C$43 cents per Km). The turnaround in ENABUS's performance,which will cause a reduction in the forecasted Government subsidies in 1982, should not detract the Government from following the above mentioned recommendations. Operational performance of private operators, although commendable given the condition of their equipment (Supervision Report dated March 19, 1982), has room for improvement and is not a good comparator for ENABUS's own performance. Future gains in efficiency will have to come from a combined effort and from the rehabilitation of the private sector fleet. .*'amt ~esarn, ren=aom eras summa iesg m.a am) (Sate hnsend.>, 19e1 *1982 1981 1982 1981 1982 1981 1982 19e i982 1981 1932 C;*tatisg R*veas 3,635.0 5,765.9 3,236.0 6.372.5 3868.8 9.339.9 2,997.9 8.153.8 4,210.8 8.341.8 4.056.8 8.853.6 Aim:a0 ~aLe Sa o Cr.U , Q1 132 224 132 248 141 257 118 250 1t0 240 140 267 <pg 4.y) :.t.eg et tepst 46.5 72.6 42.4 69.2 46.0 84.8 35.8 79.6 49.9 75.4 47.6 73.1 awser or sees 896.7 1455.2 188.9 1436.2 '893.9 3753.4 675.5 1646.5 969.1 i571.4 923.1 1520.4 NL*bee steaasgessee .3.635.0 5.765.9 3.236.0 6.372.5 3,.9.89, 339.9 1,97.9 8.153.8 4,210.8 8,341.0 4.056.8 8,859.& M* Jgg,' EAM, U29* 1aPs?0Ur CeVqImete OaMU aw'asavasce rasset st scmet .umm ~02te s a OM . nu co am g Ia 3. Pr!E.G. L I .rwieSe. 5.75.S86 4.372.526 9.339.954 8.153.71 8341.019 8*8$.578 0 ., s.1 .. rs... 61.356 31.205 53.94 44.887 6.679 M45.60 ., 151.476 133.80 119.214 96.062 141.414 74.03 . u.1 5,9J.08 643,536 9,512.¢M2 8.226.721 8.59,113 .045.391 a. .. i. sr. 6.11 6.50 5.63 5.06 S.65 5.96 e.v er o.,... 82.44 94.42 112.21 . 104.26 113.61 133.93 ter 0~e t•..w et taot ta imatea u6t.a 38.47 1,105 97 1,168.0. 1.271.25 '.,... t., p*,3e t.0?6 t.03 1.03 1.02 1.03 1.03 ~ p. .. ji.oe6.0 3.20 5.56 5.06 . $.05 1.12 Cu~S< <i 4.865,076 4.7M0320 427,5 .3,7l~.171 .3.1 .2.8 t4t. Co$s 12.165.7(8 32.252.788 14.291.826 16.618.023 15.6:6.898 15.015..7 (t.tP.w..e 2.06 . 1.88 1.18 - .76 3.8: 1.466 Cat se.... 8.37 8.54 9.14 8.76 3.81 - 3.63 r!.at. Cio ~e 0nta9 .;o.:teats he 87$2 1766 1726 1922 2013 3242 . . i tt irsåp U68 , 177 1693 881 206 2C6 C<et t.w enme 3.211 1.33 1.76 1.77 1.85 1.70. Cu.t pet ?.-ptcyp.. 775 • . 7781 8427 *336 8161 . 85 se 8t etule 324 278 330 . 318 316 29 Ce t $% Ce.a p .tB moe n este r9 79. 2 110 103 * 284 10 3 SW.tS s'.93, .478 NICARAGUA TRANSPORT COMPOENTs URBAN RECONSTRUCTION PROJECT ENABUS: FINANCIAL RESULTS AND SUBSIDIES JANUARY-JUNE 1982 (in Cordobas) JUNE JANUARY-JUNE REVENUES. CS 8.974.988.10 CS 47.205.767.55 Direct Operating Coste CS .8.285.892.53 CS 48.457.774.91 Maintenance Costs C$ 195.432.41 * CS 1.297.40566 (El Tritnfo Workshop) GROSS PROFIT/LOSS CS 493.6G3.06 CS (2.549.413.02) Overhead Expenses CS 6.530.561.62 CS 13.786.877.90 Financial Expenses 93 1.480.60 CS 2.132.60 Other Expenses CS 2.108.30 CS 24.597.74 Other Revenues C 74.403.50) CS ( 718.355.77?) OPERATING PROFIT/LOS C$ (5.966.083.96) US(35.644.665.49 ). Government Subsidy C8 5.278.00.00 CS 30.673.001.00 NE PROFIT/LOSS C$( 688.083.96) CS (4.971.665.49 ) .4 =massassman& mm massa mas Source: ENABUS, 1982 - 132 - ANNEX 5 Page 1 NICARAGUA - CREDIT 965-NI URBAN RECONSTRUCTION PROJECT PHOTOGRAPHIC DOCUMENTATION OF PART A - MUNICIPAL RECONSTRUCTION The photographs for this annex were taken in August 1982. All of the facilities have been in operation almost a year, except for the five new markets which were open in October and November of 1982. Because of the great success initially, it would be useful to revisit the six towns in four to five years to evaluate the longer term benefits from the on-going community action programs. - 133 - bA. . . . 1. ESTELI: New firehouse -,designed by MINVAH, built by MICON - with firetruck, ambulance and rescue vehicle with multi-purpose community hall on second floor. 2. ESTELI: New north market - 120 stalls - combined with bus terminal, desizned by local technical unit, built by MICON. -134 - !4 A- 3. ESTELI: Reconstructed existing market -designed by local technical unit, built by force account. -. ~-A M 'mqs.. 4. ESTELI: New municipal center from existing housing cluster- -converted designed by local technical unit, built by force account. - 11- 5. ESTELI Aided self-help housing first stage urban expansion designed and supervised by local technical unit. h.t, a say 2 * 44 6. ESTELI: Municipal workshop - concrete pipes, hollow blocks, paving blocks and floor tiles, note literacy campaign material on back wall. J1 7. ESTELI: Storm drainage built by force account. 8. MATAGALPA: Street repaving by force account and barrio parti- cipation. 9. MATAGALPA: New south market - 123 stalls - designed by consultants, built by MICON. A twu j. !J. MATAGA,k2.1.: -n::lii workshop built bv force ",carce 11. LEON: Repairs to oxydation pond by INAA and municipality. !øw - . .........-. 12. LEON: Municipal maintenance/workshop built by force account with maintenance vehicles. - 139 - 13. LEON: Installation of 3,000 water meters by INAA. 14. LEON: Installation of water meter - cost of meter $25., materials $40., and labor $25.70. - 140 - den vi ss .. aAiena sauhen a hUSe Mfad -r- 15. CHINANDEGA: Regional slaughterhouse -1,200 heads of cattle and 50 hogs per month -2/3 for local consumption. - -. p 87 Mr T-r 16. CTIINXIDECA: Street paying by force account. -141 - 17. CHINANDEGA: River trainning wall by force account. 18. MASAYA: Municipal maintenance/workshop built by force account with attractive landscaping. - 141 - 19. MASAYA: New market - 660 stalls designed by consultant and local technical unit, built by MICON. e. 20.. MASAYA: New Market - Interior "comedores" - note smoke collection hoods. ―化 ； 讜 · 次 ‘· ！1· ， 1 1dotion vehicles 一 daily 配 intenance. ’ 州 一：:L,1 仁。 ：i&j二。祝 k 二 d!:&:,:5 in 江 imDr 。＼te 抓ents ;77 -7 *It", IV A-41.1 01 IMIAMOMMUM matzo No= -Ttw&5wI A4 Ile, 4 .14 _4 "A Z 23. MASAYA: Storm drainage interceptor canal 24. MASAYA: One of three tunnels 2.5 m dia. as built by MICON. part of interceptor canal - dug by - 145 - IML- I. B-rk -'7 25. RIVAS: New market - 148 stalls - designed by local technical unit, built by MICON. 2e - ih p 26. RIVAS: New market -interior stalls with lockable partitions and doors. - - 2-'1- - e.we~ local technical unit. 27. RIVAS: Ona of four bridges designed and built by 28 S -p 28. RIVAS: Municipal mai.ntenance/workshop. IBRD 14721R 17 MARCH 1983 1$' CA'IOS MISQUlrOS I. .fJ lo- 14' Caribbean Sea 13' Laguna de ~ f MAIZ IL 12" Pacific 12' Ocean Ma ,M iguelito 17" ~o • ------1,j, __ Ille _____ __ _,,,,, __ ..,,._,,,,. . _..,..,,. ,,,., Puntagorda ------ __ ........ --~ ~ ,.......,_ ---·----- 11 l'•cill c Oc••11 - ........ ,.,,,,Ille .....,,,,, ... ... .,.,,.,,,....,,.....,_ ,,,.,.,..., ,,, IBRD 35 n. map ,ias bHn pu,pared t,y The WOfJd B.tlWI ·s s/al excl/SMl#y fo# the Convet'INlt'ICe of ,,,. rH(Ws and ,s e x ~ f0t the r,/e,""1 use of TM World Bank and the htemat/OMI Fwtane• CapotelJon TtNt denc)trWJal,ons used and ff'Ht bouridar,es sholm on th,$ map do not Lake Managua .,l,lly. on ,twr pMt of The Kb-Id Bltllk end tne lnlerMIIOf'IIII r.-..nce Corpotat,on, any JCJ(if/ment on 11W leQal slefuS ol any temtory or any endorsement or ecc1tOtanc:e of such bounclanes 12" 12" LAS MERCEDES 16" INTERNATIONAL AIRPORT 12" 24" -----Z~~------· LOW SERVICE HIGH SERVICE ZONE 36" 28" -l?._W_s~v~E-ZONE 32" SED SERVICE/ HIGH SERv1cE lON""F---- 24" Existing water main G STATION Proposed water main Actually built new water main LOW SERVICE AREA · b d HIGHSERVICEAREA Service zone oun ary ROPOSED D Existing pumping stations MIRA WELL FIELD ', 0 Existing service reservoirs -- ALTAMIR; - - - / / -7 "'-!,2,, ' ' , , __________ _ HIGH SERVICE ZONE a • Exist ing wells Proposed pumping stations - - HIGH SERVICE z.oNE -"~? UMPING UPPER HIGH SERVICE ZONE - --.... , 0 Proposed service reservoirs cR- - - - - - - - 2.5m.~ . (jPp~ ,{ HIGH SERVICE z.oNE EACH ~-<; ~ • Proposed wells 12" ~ ', _ ....... □ 0 Actually built pumping stations Actually built service reservoirs - 12" 12" I I- ::> EXISTING PROPOSED • Actually built wells SERVICE RESERVOIR Main road $l (0.5m.g. } SERVICE RESERVOIR Railroad (0.5m.g.} 0 10 EXISTING SERVICE RESERVOIR PROPOSED SERVICE RESERVOIR 1 Note: Only pipe diameters 12" and larger ore shown I (0 .5m.g.) (0.5 mg.} Reservoir 0.5 mg . NICARAGUA EMPRESA AGUADORA DE MANAGUA SECOND WATER SUPPLY PROJECT <:,,, CAl<IBBEAN SEA EXISTING WATER SYSTEM INITIALLY PROPOSED 0 1000 2000 3000 IMPROVEMENTS AND ACTUALLY BUILT SYSTEM Meters PACIFIC OCEAN -?,, To well located above 1700 meters ...,;;-~': 16° __ { a.- 16° ) CARIBBEAN GUATEMALA / ' H 0 N D U R A S / ( .f"'-.. .~ ·,,.. SEA i o" .· I ;-·"' r. 'v' ~r ~- .J 0 _. o" : UJ 'o:( u.. Cl< ~ . 12" 12 ~ . .f f/ PACIFIC ( OCEAN I This map has been prepared by The World Bank's staff exclusively for the convenience of the readers and is exclusively for the internal use of The World Bank and the International Finance Corporation. The denominations used and the boundaries shown \ on this map do not imply, on the part of The World Bank and the International Finance Corporation, J any judgment on the legal status of any territory or any endorsement or acceptance of such boundaries. I ~ ft .NICARAGUA URBAN RECONSTRUCTION RECONSTRUCC/ON URBANA TOWN OF ESTELi MUNIC/P/O DE ESTELi Bu ilt-up areas Streets repaired Areas urhanizadas - Calleshacheadas Main roods immmm Streets paved with blocks Vfas principa/es Calles adoquinadas Other roods •••••••• Streets realigned Otras vfas Calles conformadas '-J Existing bridges _ _ _ Streets graded r"\ Puentes existentes Calles patroleadas Important buildings Walkways built ~ Edificios importantes --- Andenes construidos • ... Municipal office complex Complejo municipal Market Mercado ____ Walkways to be built --- Andenes par consfruirse Water distribution lines Agua potable ? .i • Slaughterhouse Rastro Municipal maintenance workshop Sanitary sewers - - - Aguas negras Drainage channels d' ... -~1 ,e ~o' ■ Plante/ = Canals de concreto ,_o/ O· ..- Fire station Storm drainage ■ Bomheros ==== Tuheria Street lights Realigned channels 0 •·•··•••••• Canals conformados Alumhrados puhlicos Electric power lines Check dam . - - - Lineas de electricidad Trans formers Transformadors 181 )=( Cruces con tuhos Box culverts Cajas de concreto t Substation Rivers Ii] Suh-es tacion ====:i RfOS OJ :,0 0 METERS 0 500 1000 "' -< 0- , ~~ FEET O 1000 2000 3000 ( .-...11.--"\. \ Tola Tr,n,dod w ~ To Tipitapa NICARAGUA URBAN RECONSTRUCTION RECONSTRUCC/ON URBANA TOWN OF MASAYA - MUN/CfPIO OE MASAYA Built-up areas ■ a Important buildings Areas urbanizadas • Edificios importantes Main roads Vias principales - - • ~ Other roads • New market Mercado nuevo Maintenance workshop Otras vias ■ Taller de mantenimienfo New streets Calles nuevas Railroads Ferracarril • ~ New slaughterhouse Rastro nuevo Check dams Represas Existing bridges ____ Existing open drainage channel Puentes existentes - - - - Canal existentes New bridge ~ Lined storm drainage interceptor channel ,....... '-' Puentes nuevo - - - ~ Canal interceptor Water distribution lines Agua potable s·anitary sewers --- - Aguas negros International bounderies · - · - · Fron/eras internacionales ti ~ ti "' ti ~ qi 't:, ti c:: :::, ~ ti ...... 15° 10• -~~ Car,bbean Sea __'J _ _/GUATEM 15' METERS 0 500 FEET 0 1000 2000 3000 -n m TIiie ffllP ,_ - ,,,_ed by The World Bani< 's std exclusively for the convenience of 10• PACIFIC ~c~ 107 co "' "' C )> ,,. , _ - • exc:illive,y for the internet use of The World Bani< and the International ,,_,.,,.,. Ca,pcnliofl. The denominations used and the boundaries shown on ll!is map do not OCEAN ~ o ~ . an ,_ _, of The World Bani< and the lntemelional Finance Corporation, any judgment "' 0- -< w.._ 00 an ,_ /e(IIII - of any territo,y or any endorsement or acceptance of such boundaries. -0 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _.....,.__ _ _ _ _ _ ~~-~ fl)" ~- I_O" , I~ -0 IBRD 16964 NICARAGUA FEBRUARY 1983 URBAN RECONSTRUCTION RECONSTRUCCION URBANA TOWN OF LEON MUNICIP/0 OE LEON Cl> Built-up areas - Important buildings ~ Areas urbanizadas ■ ■ Edilicios importantes Sl I. 11_£ A Li:i - - - Vias principales Main roods Markets (rehabil itation) Mercados (restauracion) I oQ --- - ■ I_L Other roods • Slaughterhouse (rehabilitat ion) r-' '7 ■ rf"r Otras vfas Rastro (restauracion) s::Az: Street with new paving, curb and gutter ■ Maintenance workshop and warehouse / Pavimento, cunt1fas, a.pluvial, a. nt1gras Tallt1rt1s y bodega ./ Street paving with blocks ._,, Exist ing br idges 1111111111111111 Cal/es adoquinadas ,--. Puentes existentes Street repaving with drop inlets Calles revestimiento y tragantes . .. , .. ~ \..__ Curbs and gutters , , , , .: • • Cunetas agua pluvial r. -- Retaining walls II I =- Muros de profeccion - - - - - - - Rivers --+-- __ . ...,,r Rios ~. IE _,_ Ra ilroads ferrocarnl Pli~i -l■ - - .. .. "- - • -./ ~ .Q Cl> C: AIRFIELD ~ oQ MEXICO • 95• so- J·-·-f" ,,, ., _ iBE ~IZE Canbbean Sea __ ) ~ _/GUATEMAL~ . HONOUR ,r<."-,. 10• PA C/f!C This map has been prepared by The World Bani< 's statr exclusivtll't fat lhe convenience of the readers and is exclusivety for the internal use of The World Bank Md the International , / -~ETER S 0 OCEAN Finance Corporation. The denominations used and the boundaries showrt on this map do not " imply, on the part of The World Bank and the International Finance Co,po,ation, any judgment on the legal status of any territory or any endorsement or acceptance of such boundaries. FEET 0 IOOO 2000 3000 ~ u• u• To .linotega Caribbean Sea - I 11,• 16' GUATEMALA,,/ U R A S ,,-/ HOND . . r...._ ..-, > .t '--·'-i..,.. ~-,....,·/ J EL SALVADOt'? ( NICARAGUA .f Jliatagalpa 12• PACIFIC OCEAN ... This map has been prepared by The World Bank 's staff exclusively fOf the convenience of the readers and is exclusively fOf the internal use of The World Bank and the International Finance Corporation. The denominations used and the boundaries shown / on this map do not imply, on the part of The World Bank and the International Finance Corporation, any judgment on the legal sta tus of any territo,y "' any "'- endorsement "' acceptance of such boundaries. ~ \ \ r ···-- -- -- · - - ~ . __ "-- ___;:---- ___ _,,,,.,,. .-· / "'- . "- ~ .7'-- . ---\ \ / ___ / \ \ \ ---- . ........___ "'- ~ IS! METERS 0 500 1000 FEET 0 1000 2000 3000 - ---------- NICARAGUA URBAN RECONSTRUCTION RECONSTRUCCION URBANA TOWN OF MATAGALPA MUNIC/P/O DE MAl'AGALPA ., ~ Water distribution lines Agua patoblt1 Water lift stations Estaci6ns impulsoras Sanitary sewer Agua negrq - ....... - :=+ Built-up areas Areas urhanizadas Main roads Vias principoles Other roads Otras vfa-s ~ • Important buildings Edificios importontos Markets Mercodos Slaughter house Rastro ~ 0 Rivers /Nos Street lights Alumbrodos publicos • jjjjjjjjjjjjjjj Streets repaired Reporocion de cal/es pavimentodos Streets paved Calles odoquinodos • om Municipal maintenance workshop Toller municipal Telecommunications buildings : ( 1) new, (2) remodeled Edificios Telcor: (l)nueYo, (2/remodelocion _____ Streets graded Existing bridges Transformers • Tronsformadors Reporoci6n de col/es -......; ,---. Puenhls ex,stentes Electric power lines - - - - l..ineas de electricidad ____J , r-- L- Curbs and gutters Cunetos ~ CP ~ 0 I a:, ,C Walkways International boundaries )> ----! --- Andenes Fronteros internocionoles "' L ~I~ f{(o Acom• I I, I I, I I, I I: I 1 .... -lc:,a conol ,....,, PROCESS! ~ PLANT j -, u ✓- ••• • NICARAGUA JL ---=- URBAN RECONSTRUCTION RECONSTRUCC/ON URBANA TOWN OF CHINANDEGA MUNICIP/O DE CHINANDEGA Built-up areas - lji.a • I Edilicios importontes Important buildings Art1as urbani.zodos ; ~ - ~;:~";;,~~~0/11s .A. ~ Market M,rcado i.~ EMft$; Other roads Otras ~fas • Slaughterhouse llaslro 150 ( ,.<_ HONDURAS / 15' __ Railroad _ _ _ _ Water distribution lines ,-1· _ Ei:"i...,.., ......;,..,. --+--+--+- Ft,rrocarril Agua potablt1 SAlV~ . This map has been prepared by The Mtri1 Bank's staf e x ~ ::::=::::::::: River __ _____ Sanitary sewers for the cOIMnience of the Chinandega 1 Rfo Aguas nt1gras rNdt!n Md is • ~ for the Manag, '--' ,--.. Existing bridges ,.. internal UN of The Mtri1 Bank and ,_, hlemltionlll Finance Put1nlt1s t1xisft1nlt1s eo.-•-· The donomnafions ...... River training wall Muro dt1 rt1tensi6n on this mtrP do not~. on the part of The Mtri1 a.r. and the hlemafiona/ Ftnanee Coqxxetion, •o• Poc,f,c METERS 0 100 200 300 .,,,, ~ on fie - status New streets International boundaries of any territory or any FEET 0 500 IQOO - - - - Call,s nuevas - · - · - Fronlt1ras internacionoltJs endorNment ex .cceptance of Ocean aJCh boundlnies. ~ j BELl zi 11• ~" ... CARIBBEAN NICARAGUA 16" L 16 URBAN RECONSTRUCTION RECONSTRUCC/ON URBANA GUATEMALA. ('. TOWN OF RIVAS H ON DU R A S _,.r·....__,.,,.,...-· SEA MUNIC/P/0 OE RIVAS .)·----·\... Built-up areas Street paving with blocks .-- ! Ir-'). ·"-- .f Areas urhanizadas n11n11n11n11n11IIIIIIIIIIII Calles adoquinadas --✓ -✓ f:L SALVADOR.? ~ Main roads Bridges r- - NICARAGUA I~ I Vfas principalss Other roads Otras vias Puentes Existing bridges Puentes existsntss 12" Monog ~ ~ 12' ... W- Public buildings Edilicios importantss ~ River Rfo ~~ ~- - -·- ·~' Municipal market - - - - • Water distribution lines A Mercado mc,nicipal Agua potable • PACIFIC Municipal slaughterhouse _ _ _ _ Sanitary sewers OSTA Rastro municipal Aguas nsgras OCEAN RICA ====== Storm drains, s~ ., ■ Municipal maintenance workshop Plants/ municipal 21" diameter Tuhsrio, 2/"ditimetro ~ ANAMA l/ Electric power lines - - - - - Lineas de electricidad • Drainage manholes Manjoles •• .... •• 0 Street lights Alumhrados p,;b/icos □ Drop inlets Tragantes This map has be<!n prepared by International boundaries The World Bank's staff exclusively Fronteras internacionales for the COfMW'lf6rtee of the readers and is e x ~ fa the internal use of The ~ Bank and the hternational Finance Corporalion. The denominafioos used and the bocxJdaries shown on this map do not imply, on the part of The World Bank and the k1ternational Finaoce Corporation, any judpment on the legal status of any territory or any endorsement or acceptance of such boundaries. - To Sa,, ./c,011 de/Sc,r -n m - 0D 0:, METERS 0 100 200 300 400 500 ,., ;,tJ FEET 0 500 1000 1500 ~o ~ ~ 0- :;:; -0 OD 0- (.,.) 'J
Группа Всемирного банка · Project Performance Assessment Report
Nicaragua - Urban and Earthquake Reconstruction Projects
Открыть оригинал документа
Полный текст размещён на сайте публикующей организации. lawenc.com индексирует метаданные и ведёт на официальный источник.
Полный текст
Основные сведения
Организация
Группа Всемирного банка
Тип документа
Project Performance Assessment Report
Страна
Никарагуа
Источник
Всемирный банк