Philippines - Rural Water Supply and Sanitation Project

The World Bank FOR OFFCIAL LSE ONLY MICROFICHE COPY Report No. 10225-PH Type: (PCR) RqwtNtW 10225 TWEDDLE, E/ X31707 / T9 073/ OEDD3 PROJECT COMPLETION REPORT PHILIPPINES RURAL WATER SUPPLY AND SANITATION PROJECT (LOAN 2206-PH) DECEMBER 17, 1991 Infrastructure Operations Division Country Department II Asia Regional Office Tbis document has * rsricted distibution ad may be e by recipients only in the performanse Of official duties. Its cogtents may oot otherwise be disclosed without World Bank thorization.  Currency Unit - Peso (P) US$1.00 - P 8.54 (1982 average) - P 11.11 (1983 average) - P 16.70 (1984 average) - P 18.61 (1985 average) - P 20.39 (1986 average) - P 20.57 (1987 average) - P 21.09 (1988 average) - P 21.74 (1989 average) MASURES AnD EIUIVALENTS * - motor - 3.28 feet km - kilomter - 0.62 miles sq km - *quaro kilometer - 0.39 square miles ha - hectare - 10,000 square meters or 2.47.acres cu m - cubic meter - 264 US gallons cu mim - cubic meters per month - 8030 US gallons per month 1 - liter - 0.26 US gallons lpcd - liters per capita per day - 0.26 US gallons per capita per day PRINCIPAL ABIREVIATIONS AND ACRONYMS ADB - Asian Development Bank DOR Department of Health, formerly Ministry of Health (MOH) IDWSSD - International Drinking Water Supply & Sanitation Decade LWUA - Local Water Utilities Administration MRS - Ministry of Hum-n Settlements MLG - Ministry of Local Government, now Department of the Interior and Local Governrment MOR - Ministry of Health, now Department of Health (DOB) MPWE - Ministry of Public Works and Highways, now Department of Public Works end Highways (DPWH) MWSS - Metropolitan Waterworks and Sewerage System muA - National Electrification Adinnistration WRC - National Water Resources Council PIRC - Project Implementation and Review Committ-e RWDC - Rural Waterworks Development Corporation RWA - Rural Watorworks Association RWSA - Rural Waterworks and Sanitation Association UND? - United Nations Development Programme ISCAL R Government: January 1 through December 31 MWDC: January 1 through December 31  THE WOQLD RANKFOR OFFCIAL USE ONLY T>f WCOtLD BANK IA Ahmon. DMC 20433 U.S.A. O4ke .4 Dv.cmw-Cwed December 23. 1991 MEMORANDUM TO THE E$ECUTIVE DIRECTORS AND THE PRESIDE SUBJECT: Project Completion Report on Philippines Ljoral1Water Supply and Sanitation Project ( 2 2206-PB) Attached. for information, is a copy of a report entitled "Project Completion Report on Philippines - Rural Water Supply and Sanitation Project g 2206-PE)" prepared by the Asia Re'gional Office vith Part II contributed by the Borrower. No audit of this prio act has been made by the Operations Evaluation Department at this time. K' Attacbment This document hss a restricted distribution and may be used by rfcipients only in the performance of their ofcial duties. Its contents may not otherwise be disclosed without World Bank authorization.  FOR OFFICIAL USE ONLY PROJECT CONFETIOI RER MLIPPIRES RURAL WAE SUPLY AND SANITATIOI PROJECT (LOA 2206-Zp) Table of Contents P No. Prefact . ..... .. . . . . ... i. Evaluation Su ary a................................... 11 PART I. PROJECT REVIEWF ROm BANK'S PERSPECTIVE . . . . . . . . . . . . 1 Project Identity . .. . . Background ......... * 1 Project Objsetiv. nd'D-ecr4ption ......2........ .. 2 Projct Orgztion and Deigo ign.................. 3 Project Implementation ..................... . 3 Project Results . .. . .... . . . . . * 9 * 9 9 9 * * * . . 5 Project Sustainability .... . ............. ........... . . . 6 Bank Performance a . - * 9 9 9 9 * * - . . 9 9 . . 9 * . 9 6 Borrower/Implementiug Agency Performance- . . . . . . 6 Consulting Services . o . . . . . . . . . . . . . . . . . 7 Project Documentation dData .... ............... 7 Findlng and Leson Larned .. .................. 7 PART II. PROJECT REVIEW FROM BORROWER'S PERSPECTIVE . . . . . . . . . . 9 Background * 9 . . . . . . . . . . . . * * 9 9 9 * * * * 9 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Scope of the Project ......... ...... . * * * 10 Physical Accompliabment . . . . . . . . . . . . . . . . . . . . . . 11 Cot and Diburusnten....................... 12 Inetitutioal Conaideratio .....13.............. 13 Technical assitance ............. .......... 14 Recou.nndationa/Lsasons Learned ................ * 15 PARTIII.STATISTICAL IN ORTO ON .............. . . . . . . . . ..... 18 Related Bank Loan and Credits . ................. 18 Project Tietable and Issues Raised. . . .o . .....a..... . 19 Loan Disbursements ...... . .. .......... 9 9 9 * 9 9 22 Project Implementation ..... .. ...................... . 25 Project Costs and P1ding .. ........ ............ 26 Project Results . . . . . * . * * * . ... . ... . . 29 Statu of ajor Coro n t . . ..................... 32 Use of Bank Resour rs .. s....................... 37 ANNES Annex1: Descriptionofth Project ............... 41 Annex 2: Definitions . . . . . . . . . . .. .. . .9 . .9 . *. . .. 42 This document has a restricted distribution and may be used by recipients only in the performance of | their oMcial duties. Its contonts may not otherwise be disclosed without IFC authorization.  PROJECT COP 3TION Rf PORT PHILIPPINES RURAL WATER SUPPLY AND SANITATION PROJECT lLOAN 22O6-PU) ?ref ace This is the Project Completion Report (PCR) for the Philippines Rural Water Supply and Sanitation Project, for which Loan 2206-PH in the amount of US$35.5 million to the Republic of the Philippines was approved on October 19, 1982. During project implementation, US$6.5 million of the loan amount was cancelled at the roquest of the Borrower. The loan was closed on July 11, 1990, two-and-one-half years behind schedule, when the undisburoed amount of US$70,000 was cancelled. The final disbursed amount was US$28.93 million. The PCR was jointly prepared by the Infrastructure Operations Division of the Asia Regional Office (Preface, Evaluation Summary and Parts I and III) and the Borrower's project implementing agencies, the Local Water Utilities Administration, the Department of Public Works and Highways, and the Department of Health (Part II). Preparation of this PCR was started during the Bank's project supervision missions in June and October 1990, and, except for Part II, is based, inter alia, on the Staff Appraisal Report, the Loan and Project Agreements, supervision mission reports, correspondence between the Bank and the Borrower, and internal Bank memoranda.  - ii - PROJZCT COMPLETIL ROEPORT MELIMPPIWE RURAL WNTER SUMPLY AND SANITATION PROJECT (Loan 2206-Pfl) Evaluation SutiarIv The Proiect *nd Its Obiectlvoe i. The Project's major objectives wera to help develop and mobilize local resources for the rural vater and sanitation sector, and to asoist with the organization and strengthening of the responsible local institutions. These objectives stmed from the Government's cetuprehensive "Integrated Water Supply Program 1980-2000" produced in 1980 and the "'Rural Water Supply and Sanitation Master Plan" which followed. The project objectives were to be achieved through implomentation of part of the Government's overall rural water supply and sanitation programs. Coordination capacities of the several agencies involved were to be improved, as would the capacity to mobilize and develop local community participation in the planning, implementation and operation of water supply and sanitation facilities (Part I, paras. 2, 3 & 7). ii. The Project essontially was a sector project. Its targets included: development or rehabilitation of water supply sources for thousands of Level I and Level II water systems (Annex 2); installation of distribution networks for hundreds of Level II systems; provision of district maintenance facilities; research and testing of equipment for low-cost systems; installation of thousands of sanitary toilet units; construction and testing of pilot wste stabilization ponds; and assistance vith the preparation of solid wastes management, flood control and drainage projects for Manila (Part I, paras. 8-10).. iii. Particularly important parts of the project were: provisions for training of the implementing agencies and the local Rural Waterworks and Sanitation Associations (RWSA*); and for education at the beneficiary level on public health and sanitation (Part I, para. 10). iv. The Project had some significant risks. Firstly, coordination of the rural components was delegated to the newly established Rural Waterworks Development Corporation (RWDC). On top of that, a high-level inter-agency committee, the Project Implementation Review Committee (PIRC) was being established to monitor overall project performance and coordinate implementation (Part I, paras. 4-6 & 12). And secondly, acceptability by the intended beneficiaries of the Level II wvatr supply systems and of the sanitary toilet facilities was uncertain. Imnlementation Ex2erience v. The status and quality of preparation at the time the project was appraised and the loan was approved was good. The project started up quickly after a brief delay in meeting the conditions of loan effectiveness, and it progressed satisfactorily for about the first 18 months. Beginning in 1985,  - iii - however, and persisting through the duration of the implementation period, progress clmwed to well below the planned implementation timetable. In spite of the delays, the Bank considered it worthwhile to continue with the project end three loan closing dato extension. were approved. The project was substantially completed in June 1990, three years late, and the loan account was closed in July 1990 (Part I, para* 14 & 15s Part III, Section 2. vi. The principal causes of delay were inefficient project management and, particularly, the inability of the Government to provide the counterpart funds necessary to maintain an appropriate project timetable (Part I, paras. 14 & 16; Part II, para. 5.7). vii. The appraisal cost estimate totaled P 484.7 million (US$58.4 million equivalent) including P 4. million (US$0.5 million) for the front-end fee on the Bank loan. Actual expenditures financed by government contributions and Bank loan disbursments totaled about P 857.2 million (US$ 45.1 million equivalent), including the fea, an apparent increase of about 772 when costs are expressed in pesos, and an apparent decrease of about 23Z when expressed in US$. This discrepancy is the result of major devaluations of the peso relative to the USS during the course of the project (Part I, paras. 19-20). viii. RWDC performed poorly for four years, particularly in its role as coordinating agency for the rural components of the Project. Eventually it was disbanded and its tasks were handed over to the Local Water Utilities Administration (LWUA). PIRC also failed to perform. The other implementing agencies, MPWH and MNO performed reasonably well considering the difficulties of the period (Part I, paras. 34-37). Prolect Results ix. Overall, the project can be rated as a success in accomplishing the physical and some of the institutional objectives, although with a delay of up to three years* This is particularly true when the prevailing difficult economic and political conditions are taken into account. About 2.75 million of the rural population are benefiting from new or improved water supply systems, and about 450,000, from the installation of sanitary toilet facilities. The risk that the sanitary toilet units might be unacceptable was disproved. Acceptability of Level II water distribution systems, however, proved to bp limited, resulting in delays in that project component (Part I, paras. 25-26). x. The critical project shortcoming appears to have been the failure to establish fully functioning, well trained RWSAs; apparently, this was accomplished for loes than 25S of the nearly 11,000 Level I systems constructed under the project (Part I, paras. 27-28). Sustainabllitv mi. The critical requirement for fully achieving and possibly enhancing the potential benefits of the project is the establishment of well trained RWSAs for each of the Level I and Level II water supply systems constructed or improved by the project. This requires the Philippine authorities to undertake and persist with a long term, well organized and coordinated training and education program (Part I, par&. 29).  - iv - lindinas and Lasagne Learned xii. The coneept of the project was *ound. It -was timely and well planned. The physical components were reasonably well executed in spite of the failures of the two principal coordinating bodies, and especially considering the difficult economic and political conditions which prevailed. Roalization of the full benefits of this project and any other rural water supply activities in the Philippines requires a concentrated effort to Jevelop the local agencies responsible for operation and maintenance of the facilities provided. xiii. The principal lessons for a project of this type emerging from this experience appear to be that: (a) proj-et preparation to the point where contracts can be awarded as soon as the loan is effective helps to get the project started quickly (Part I, paras. 13-14)5 (b) full supervision missions should visit the project at fairly frequent intervals during the early and any other critical periods (Part I, para. 31); (c) when a project extends over a long period and particularly when there have been significant staff changes in the implementing agencies, Bank procurement and disbursement specialists should visit the project along with Bank supervision staff and conduct refresher courses in procurement end disbursement procedures for local staff directly responsible for implementing those procedures. Also, Bank supervision staff should couduct periodic review sessions with responsible local staff on the financial reporting requirements for the project (Part I, paras. 33 & 37); (d) the Bank should insist on the use of special accounts and statements of expenditure when these would be appropriate (Part I, para. 24); (e) for some projects where counterpart funds are difficult for the project implementing agency to obtain, the Bank should consider financing more of the local costs of training than the incremental costs (Part I, para. 27); and (f) For projects involving exploration end development of groundwater sources, the Bank should include in the project the necessary provisions to develop and maintain a monitoring program (Part I, para. 26).  PROJECT CCNPIZTI!O REOT ItDAL WATER UPPLT AND SAnITATIgK PROJECT (LOAN 2206-PH) PART I * PJECT REVIEW 7RON BAK'S IZISPECTIVE Proioet Identity Project Nemes Rural Water Supply and Sanitation Project Loan Numbers 2206-PH RVP Unit: Asia Regional Office Countrys Philippines Borrower: Republic of the Philippines Sectors Water Supply Bagktround 1. Sector Develonment Cbiectivos. By the lato-1970s Government intere-t in improvement of community water supplies, previously aimed almost exclusivaly at the Manila metropolitan area, provincial cities and the larger towns, had begun to focus serioualy on the improvement and development of water supplies in rural areas throughout the country, where low-income families were largely dependant on unsafe water supplies. There vas also the beginning of an official awareness of the importance of improving the extremely poor sanitary conditions in those areas. 2. Influenced in part by the objectives of the United Nations International Drinking Water Supply and Sanitation Decade (IDWSSD), to which the Government subscribed, and strongly supported by sanitary engineering and public health professionals, the Government produced a national "Integrated Water Supply Program 1980-2000" in 1980. Following that, the "Rural Water Supply and Sanitation Master Plan" was prepared. Both those plans were comprehensivs and based on IDWSSD's ambitious targets. 3. The objectives for rural water supply were that by 2000, about 301 of all rural clusters of households would be erved by protected water sources without distribution systems and about 70X would have piped distributior system with public faucets. For sanitation, the aim was to provide all rural households with sanitary exoreta disposal systems by 1990. For each rural water system a Rural Waterworks and Sanitation Association would be formed and trained to operate and maintain the system. It also was intended that education in personal sanitation and public health would be provided together with the improved water supply and sanitation facilIV