Malawi - Lilongwe Water Supply Engineering Project

Document of The World Bank FOR OFFICIAL USE ONLY Repot No. 8642 PROJECT COMPLETION REPORT MALAWI LILONGWE WATER SUPPLY ENGINEERING PROJECT (CREDIT 1272-MAI) MAY 7, 1990 Infrastructure Operations Division Southern Africa Department Africa Regional Office This doeument has a restricted distribution and may be used by recipients only In the performance of their offiial duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit - Malawi Kwacha (MK) US$1.00 = MK 1.08 (June 1982) US$1.00 - MK 2.73 (June 1989) MK 1.00 - 100 Tambala SDR 1.00 u US$1.11 (1982) MEASURES AND EQUIVALENTS 1 meter (m) = 3.28 feet (ft) 1 millimeter (mm) , 0.039 inch (in) 1 kilometer (km) = 0.62 mile (mi) 1 square kilometer (km2) = 0.386 square mile (sq mi) - 247 acres (ac) 1 liter (1) - 0.26 US gallons 1 imperial gallon (Ig) - 1.2 US gallons - 4.55 liters (1) 1 cubic meter (m3) = 220 ig = 264.2 US gallons 1 liter per capita per day (lcd) G 0.2642 US gallons per capita per day 1 million imperial gallons per day - 4,546 m31d PRINCIPAL ABBREVIATIONS AND ACRONYMS BWB - Blantyre Water Board DLVW - Department of Lands, Valuation and Water GOM = Government of Malawi LCSU - Low Cost Sanitation Unit LUB = Lilongwe Water Board MWS = Ministry of Works and Supplies (until the end of March 1988, then subsequently renamed Ministry of Works [MOW]) MLG = Ministry of Local Government ODA = Overseas Development Administration OPC = Office of the President and Cabinet PMF a Probable Maximum Flood PMP 3 Probable Maximum Precipitation FISCAL YEAR (FY) July 1 to June (1982) April 1 to March 31 (1989)  FOR OFCL US ONLY THE WORLtD SANK W.shtton. DC. 20433 U.S A O a CA OItawmtnefl Kay 7, 1990 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Malawi Lilongwe Water Supply Engineering Project (Credit .272-MAI) Attached, for information, is a copy of a report entitled "Project Completion Report on Malawi - Lilongwe Water Supply Engineering Project (Credit 1272-MAI)" prepared by the 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 at this time. Attachment Thisdocument haansmdi*fbuot andmy be wO byrxpDbmu onlbye pofofnnime of tetowoAcW dufieaIt conunu may nsotherwin be dfkamd wkoul Worid Bankutau"nsfion.|  FOR OMCIL USE ONLY MALAWI LILONGWE WATER SUPPLY ENGINEERING PROJECT (CREDIT 1272-MAI) PROJECT COMPLETION REPORT TABLE CF CONTENTS Page No. PREFACE ........................................................... i EVALUATION SUMMARY ................................................ ii PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE A. Project Identity ............................................. 1 B. Project Background ........................................... 1 Sector Development Objectives and Policy Context ......... 1 C. Project Objectives and Description ............................ 2 Project Objectives ...................................... 2 Project Components ...................................... 2 D. Project Design ............................................... 3 E. Project Implementation ....................................... 4 F. Major Results of the Project ................................. 5 G. Project Sustainability ....................................... 6 H. Bank Performar-e ............................................. 6 I. Borrower Performance ......................................... 6 J. Project Relationship ......................................... 6 K. Consulting Services .......................................... 7 L. Project Documentation and Data ............................... 7 PART II: PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE A. Introduction ................................................. 8 B. Project Preparation and Analysis ............................. 9 C. Project Implementaiton, Operation and Cost - The Master Plan for Water Supply and Sanitation ......................... 9 The Feasibility Study - Water Supply Stage 1 .... ........ 11 Project Detailed Design ................................. 13 Provision of Management Staff Support for LWB .... ....... 16 Provision of Vehicles and Other Equipment .... ........... 17 Urban Low-Cost Sanitation Demonstration Project .... ..... 17 Provision of Management Staff Support Costs for Other Sectoral Organizations ................................ 17 Review of Sectoral Training Needs ....................... 17 D. Project Costs and Disbursement ............................... 17 Introduction ............................................ 17 Cost Comparison - SDR ................................... 17 Comments on Expenditures ................................ 18 Cost Comparison in Malawi Kwacha ........................ 20 On-Lending to Lilongwe Water Board ...................... 21 E. Conclusion ................................................... 22 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.  TABLE OF CONTENTS (Cont.) Page No. PART IIIs STATISTICAL INFORMATION 1. Related Bank Loans and/or Credits ....... ................. .... 23 2. Project Timetable ............................................ 24 3. Credit Disbursements ......................................... 25 4. Project Implementation ....................................... 26 5. Project Costs and Financing ............... # .................. 27 A. Project Costs ............ .. ........................ 27 B. Project Financing ... ................ ............... 28 6. Project Results ........ ...................................... 29 A. Direct Benefits ...................... ............... 29 B. Economic Impact ................. ................... 29 C. Financial Impact ................. .................. 29 D. Studies ............................................ 30 7. Status of Covenants .......................................... 31 8. Use of Bank Resources ........................................ 32 A. Staff Inputs ................. .. .................... 32 B. Missions ........................................... 33 ANNEXES ANNEX I - Decription of the Project ........ .. ................ 34 ANNEX II - Final Cost Analysis - IDA Resources ..... ........... 35 ANNEX III - Final Cost Analysis ............... ................. 36 ANNEX IV - On-Lending Repayment Schedule ...................... 39  - i - MALAWI LILONGVE WATER SUPPLY EN6INEERING PROJECT (CREDIT 1272-MAI) PROJECT COMPLETION REPORT PREFACE This is a report on the completion of the Lilongwe Water Supply Engineering Project in Malawi, for which a credit of SDR 3.6 million (US$4.0 million) equivalent (Credit 1272-MAI) was approved in September 1982. The Borrower was the Government of Malawi (GOM). US$3.6 million equivalent of the credit was on-lent to the Lilongwe Water Board (LWB), the implementing agency, at 122 per annum (p.a.) interest rate over 25 years, with a 5-year grace period. The credit was closed in June 1987, one year later than the original closing date of June 1986. Closing of the credit was delayed to accommodate revisions in the feasibility study and to complete the low-cost sanitation component. At the time of the draft PCR preparation in early 1987, the project had been completed for more than 18 months. There was a cancellation of SDR 257,212 due to some components either being omitted or charged elsewhere. The PCR was jointly prepared by the Infrastructure Operations Division of the Africa Regional Office (Preface, Evaluation Summary, Parts I and III) and the Borrower, (Part II). Preparation of this PCR was started during the Bank's final supervision mission of the project in 1987, and is based, inter alia on the Staff Appraisal Report; the Credit, Guarantee, and Project Agreements; supervision reports; correspondence between the Bank and the Borrower; and internal Bank memoranda.  - ii - MALAWI LILONGWE WATER SUPPLY ENGINEERING PROJECT (CREDIT 1272-MAI) PROJECT COMPLETION REPORT EVALUATION SUMMARY ObJective The project's purpose was to enable the Government of Malawi and LWB to formulate long-range water supply, sewerage and sanitation programs for Lilongwe. LWB was also to be strengthened through improved management, financial control and cost recovery. The project was also intended to assist the Government of Malawi to develop appropriate technologies for sewerage and sanitation and to assess the sector's organizational, manpower and training needs. (page 2, para 4) Implementation Experience The components of the project's design give evidence of a well- conceived approach, which was well executed in a timely manner, particularly on the water supply engineering side. Nevertheless, there were several areas where project design might have been improved with beneficial results for implementation: (a) Negotiations with the engineering consultant would probably have improved performance for the client if the new LWB management team had been in place prior to negotiation. (b) The inclusion of low-cost sanitation studies (outside the responsibility of LUB or LBS's consultant) complicated administration of the credit by LWB and _ontributed to the delay in credit closing. (c) The terms of reference for the Master Plan component are considered by LWB management to have been more comprehensive than required to address Lilongwe's water shortage. (page 3, paras 6 & 9) In general, the technical aspects of the work appear to have been very well-handled. However, project implementation was delayed by over six months, as a result of developments following the review of the draft Master Plan and the draft Feasibility Study. In both instances, the drafts as presented were technically optimal although there appeared to be an inadequate appreciation on the part of the consultant of affordability and financial viability. (page 4, para 10; page 5, para 16)  - iii - Results The Engineering Credit achieved its specific objectives essentially within budget with respect to Water Supply: (a) A Master Plan was produced. (b) A Feasibility Study was carried out. (c) An engineering design and contraci documents were produced leading to the Phase III Lilongwe Water Supply Project. (d) An engineer/manager and a financial controller were employed. The credit also supported employment of a low-cost sanitation adviser and the development of a demonstration project, as well as the supply of equipment and software to LWB. (page 5, paras 18, 19) Sustainebility Not applicable. Findings and Lessons Learned Terms of Reference for Master Plans and Feasibility Studies need to be carefully drawn in order to avoid the higher cost of wide-ranging studies much of which may be peripheral to project purpose. It is also desirable to ensure that there is an emphasis on financial viability and affordability in both the Master Plan and the Feasibility Study. (page 3, para 9(c); page 10, para 38)  MALAWI LILON