Tunisia - National Rural Water Supply Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 8128 PROJECT COMPLETION REPORT REPUBLIC OF TUNISIA NATIONAL RURAL WATER SUPPLY PROJECT (LOAN 2134-TUN) OCTOBER 16, 1989 Infrastructure Operations Division Country Department II Europe, Middle East and North Africa Regional Office This document bas a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = Tunisian Dinar (TD) = 1,000 millimes 1981: lTD = US $2.00 1987: lTD = US $1.21 GLOSSARY OF ACRONYMS ADB - African Development Bank AFSED - Arab Fund For Social and Economic Development GOT - Government of Tunisia IDB - Islamic Development Bank KfW - Kreditanstalt fur Wiederaufbau SFD - Saudi Fund For Development SONEDE - Societe Nationale D'Exploitation et de Distribution des Eaux  TO* WORtD SANK xOl OFCIA US ONLY W."ton. OC Z0433 USA. 01 d 0W9VC4 October 16, 1989 MDIORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECTs Project Completion Report ot Tunisia National Rural Water Supply r'eec1 t (Loan 2134-TUN) Attache4, for information, is a copy of a report entitled 'Project Completion Report on Tunisia - National Rural Water Supply Project (Loan 2134-TUN) prepared by the Europe. Middle East and North Africa Regional Office with Part II of the report contributed by the Borrower. No audit of this project has been made by the Operations Evaluation Department. Attachment Thi ha a umimd ddbuUso nd may be uod by mspliau * in Me p_oufmMa of thei effcia duties.f Iswgmmg may nu ethewvA be dbisemi witho Worl Bank authodhtut.  FOR OFFICIAL USE ONLY REPUBLIC OF TUNISIA PROJECT COMPLETION REPORT NATIONAL RURAL WATER SUPPLY PROJECT (LOAN 2134-TUN) Table of Contents Page No. Preface ...... . .........................** ... i*.... Evaluation Summaary . .. ................. s ...... ... 6...ii I. 1. Project Identity ....................*............ 1 2. Background .......1.#*........#*. 3. Project Objectives and Description .. ...... 2 4. Project Design and Organization 2.................. 2 5. Project Implementation . ................... 3 6. Project Results ................. ........... 3 7. Project Sustainability ............................ 5 8. Bank Performance ................. . ............... 6 99. Borrower Performance .6. ...... ..... ... ....... 6 10. Project Relationship ...7 ... ...... ... ..... .. .. 7 11. Consultants, Contractors and Suppliers ............ 7 12. Project Documentation and Data .................... 7 13. Conclusions and Lessons .................8.......so 8 II. Borrower's comments .9. * ...... * ...... .. ...... 9 III. 1. Related Bank Loans... 10 2. Project Timetable ....... 11 3. Cumulative Estimated and Actual Disbursements 12 4. Project Costs and Financing . .13 5. Status of Covenants ..15 6. Missions ...................... 16 7. Actual and Forecast Financial Statements of SONEDE - 1978-1987 . .17 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 authoriation.  REPUBLIC OF TUNISIA PROJECT COMPLETION REPORT NATIONAL RURAL WATER SUPPLY PROJECT (LOAN 2134-TUN) Preface This is the Project Completion Report (PCR) for the National Rural Water Supply Project in Tunisia, for which Loan 2134-TUN in the amount of US$30.5 million was signed on May 14, 1982. The loan became effective on October 20, 1982, and was closed on December 31, 1987, one year behind schedule. It war fully disbursed and the last disbursement was in June 1988. The PCR was prepared by the Europe, Middle-East and North Africa Country Department II, Infrastructure Operations Division. It was based on the Staff Appraisal Report; the Loan and Project Agreements; supervision reports; correspondence between the Bank and the Borrower; internal Bank memoranda and a Project Completion Report prepared by the Borrower.  - ii - REPUBLIC OF TUNSIA PROJECT COMPLETION REPORT NATIONAL RURAL WATER SUPPLY PROJECT (LOAN 2134-TUN) Evaluation Summ Objectives To improve access to piped water supply in the rural and urban sectors by (a) strengthening SONEDE's financial position, its involvement in rural areas and its capacity to develop and manage sector type projects; (b) assisting the utility to obtain additional financing; (c) improving living conditions in rural areas; (d) encouraging connection to piped water supply by providing credit to finance connection charges; and (e) conserving potable water (para. 3.01). nlementation Experience SONEDE excelled in the execution of the house connection and water meter components. However, implementation of the rural water supply component started late, proceeded slowly and had a cost which was higher than expected (para. 5.01). Results Unexpected cost increases of the rural water supply component resulted in a lower than expected number of villages served (para. 6.01). The Bank's catalytic role increased the financial assistance to SONEDE from other international financial agencies (para. 6.02). Although SONEDE improved substantially its operating efficiency, SONEDE's financial position deteriorated. SONEDE's involvement in rural areas increased but its organization has not adapted itself fully to the change. The credit facilities for house connections had excellent results and water conservation efforts were fruitful (para. 6.03). SONEDE's financial position is now improving. Continued improvements are needed to eliminate the pressure of financial constraints on its maintenance and operation activities (para. 7.01). The sustainability of the institutional improvements carried out during SONEDE's growing involvement in rural water supply is also questionable (para. 7.02).  - iii - Findis and Lesso Learned Bnk supervision of the project appears to have been insufficient both in the number of supervision missions carried out and in accepting SONEDE's rather lax general attitude. This is particularly true in the case of fiiancial supervision (paras. 8.01 to 8.04). Efforts to arrest weak supervision activities by hiring consultants had negative results (paras. 8.01 and 8.05). SONEDE should continue to improve: (i) its financial position by gradual tariff increases in real terms, (ii) the performance of its rural water supply unit, and (iii) the participation of local consumers in the operation and maintenance of rural water supply facilities (para. 7.03).  REPUBLIC OF TUNISIA PROJECT COMPLETION REPORT NATIONAL RURAL WATER SUPPLY PROJECT (LOAN 2134-TUN) PART I 1. Project mentity Project name: National Rural Water Supply Project Loan No.: 2134-TUN RVP Unit: EMENA Country: Tunisia Sector: Water Supply and Sewerage Subsector: Rural Water Supply 2. 2.01 The Government's objectives in the urban and rural water supply sector for the 1982-1986 Plan period were (a) to increase the proportion of the urban population having direct access to piped water from 80S in 1982 to 922 by 1986; and (b) to improve service levels in rural areas to discourage urban migration (improvements in 76 semi-rural areas and provision of new water supply systems in 212 rural centers). 2.02 Faced with scarce water resources, the Government of Tunisia (GOT) has given priority to the development of water resources and to the implementation of water conservation measures. GOT has also committed itself to improve water supply services to the populatic. but has only recently approved the application of increased water tariffs. GOT also provided the necessary equity contributions toward the financing of the sector's large investment program, which the National Water Supply Company (SONEDE) has successfully implemented. 2.03 In accordance with the above GOT's socio-economic objectives, the project was designed to finance a time-slice of SONEDE's investment program comprising: (a) house connections to piped water supply systems; and (b) provision of piped water supply in rural centers for improving living conditions in the rural areas.  3. PNolect Objectives and Description 3.01 The primary objective of the project was to improve access to piped water supply in the rural and urban sectors by: (a) strengthening SONEDE's financial position, its involvement in rural areas as well as its capacity to develop and manage sector type projects; (b) assisting in obtaining additional financing for SONEDE's Development Plan; (c) improving living conditions in rural areas through the provision of safe water; (d) encouraging connection to piped water supply through the provision of credit facilities; and (e) reducing water consumption through the preparation and implementation of a water conservation plan. The project comprised the following three components: (a) expansion and improvement of water supply systems and construction of new systems in about 150 rural villages and semi-urban centers, with a population exceeding 500; (b) provision of credit facilities to low-income customers, cover_.ng the cost of house connections and related works; and (c) acluisition of about 80,000 water meters for the above-mentioned house connections. 4. Pro