Ghana - Water Supply Technical Assistance and Rehabilitation Project

Doe The Worl CfF T CHE l(PY Nvr.,r'rE N, ',. "I:-(Mi G y I ( 'C'I I FOR OMICLAl SoLAN,-) C./,' X i/o o 1 T (31 / (tP;D]u ReportNo. 9732 PROJECT COMPLETION REPORT GHANA WATER SUPPLY TECHNICAL ASSISTANCE AND REHABILITATION PROJECT (CREDIT 1342-GH) JUNE 28, 1991 Infrastructure Operations Division Country Department IV Africa Region hlds document has a restricted distribution and may be used by recipients only in the performance of their official duties Its contents may not otberwise be discosed without World Bank authorzation.  CURRENCY EQUIVALENTS Currency Unit Cedi (C) Exchange Rate (Cedi to US$) 1983 (SAR) 0.3636 1984 0.0244 1985 0.0175 1986 0.0111 1987 0.0061 1988 0.0049 1989 0.0037 1990 0.0031 ABBREVIATIONS AND ACRONYMS ATMA Accra-Tema Metropolitan Area GWSC Ghana Water and Sewerage Corporation MIP Management Improvement Program TWI Thames Water International FISCAL YEAR January 1 - December 31  THE WORLD SANK FOR OFICIAL USE ONLY Washin8ton, D.C 20433 U.S.A. Oich of D01ftSm.c4teaI Operations {V& iaitim June 28, 1991 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Ghana - Water Supply Technical Assistance And Rehabilitation Project (Credit 1342-GH) Attached, for information, is a copy of a report entitled "Project Completion Report on Ghana - Water Supply Technical Assistance and Rehabilitation Project (CR 1342-GH)" prepared by the the Africa Regional Office. No audit of this report has been made by the Operations Evaluation Department at this time. 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 w'ithout World Bank authorization.  FOR OMFAL USE ONLY (CREDff 13424G Pae No. Preface ................. i Evaluation Summary ............., ., ii PART I: o I ProjectId y..ti 1 I ProjectB. .kg.o..d I ProjeatObjeives and Descipdon.. 2 ProjeatDesiandOrganizat... 3 Projet Implementation.. 3 PrjetResuts. ... 4 ProjeatSustanabiity.. 6 BankPerformane.. 6 Borrower Perfomance... 7 ProjeatRelationship.. 7 Consulting Services............ ........... 7 Project aond Data... 8 PART U: ... 9 Adequacyad AcracyofFactual nfFioninPartM. . .. ......... 9 EvaluatimofnflBk'arPaformancsndLessonsLIarg.d ...9 EvalualonoftheBorrower's Own Pformnac audLawon Lansd . . 10 PART m: =AISTIL IE....ll............11 Reated IDA Credits ..................l 12 PhojectTlea"bl .13 Crdit Dlsbuumew . *'. 14 ProjeFo bswax acng ............. ... . ......... ProjecaCosasUSS Mlons ...............**.. 15 Pmj Financing ........................ 16 StudIs .............. 17 StasusofCovnaa ..99999999999999999999999 18 MissionDatabyStagesofProje ............ 20 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'd) ANNEXES 1. Record of Project Progreu Reports Submitted 2. Tab!e 1: Sources and Application of Funds Statemean (Consolidatod) Table 2: Income Statemet (Consolidated) Table 3: Income Statements (AccralTema Metropolitan Area) Table 4: Balance Sheets (Consolidated) Table 5: Balance Shem (Accra_Tema Metropolitan Area)  Q IECT COMPLETION IQEPORI GHANA WATER SUPPLY TECHNICAL ASSISTANCE AND REHABILITATION PROJECT (CREDIT 1342-GH) pREEACE This is the Project Completion Report (PCR) for the Water Supply Technical Assistance and Rehabilitation Project in Ghana, for which Credit 1342-OH, in the amount of SDR 11.8 million (US$13.0 million equivalent) was approved on March 29, 1983. The credit was closed on June 30, 1990, three years behind schedule. Disbursements against commitments were made until October 31, 1990, and an outstanding balance of US$0.33 million was cancelled. Tme PCR was jointly prepared by the Infrastructure Operations Division, Country Department IV, Africa Region (Preface, Evaluation Summary, Parts I and HI), and the Borrower (Part II). Preparation of this PCR was started during the Bank's final supervision mission of the project in June 1990, aAd is based on the President's Report; the Development Credit and Project Agreements; supervision reports; correspondence between tbe Bank and the Borrower; and internal Bank memoranda.  -iii- PROECT COMPLEIMON REPORT GHANA (CREDIT 1342 - GH) EVALIATlQIOUMMARX Objectiyes 1. Intended. The project objectives were: fi to strengthen the managerial capabilities of the Ghana Water and Sewerage Corporation (GWSC) both at headquarters and in the districts and to improve its operating efficiency and financial performance; sAend to carry out emergency repairs to the Kpong-Tema-Accra transmission pipeline, to secure a reliable water service to the Accra and Tema urban area, and to improve the distribution system in those areas; and ihir to prepare detailed plans for future investment projects (para 3.02). 2. Acieved: The need to strengthen GWSC, the entity responsible for water supply throughout the nation, had been clearly indicated by its performance during previous projects and by the adverse effects of the exodus of large numbers of people at professional, technical and managerial levels during the late 1970s and early 1980s. The choice of the primary objective was totally correct and fully jusjified but was far more difficult to achieve than expected. Efforts were impeded by lack of adequate financing for day-to-day operations and m_atenance and for local counterpart funding of development projects. Technical assistance and training were also impeded by an inability to recruit staff on the terms which GWSC was permitted to offer or even to retain valued upper level and middle level professionals in the face of more attractive offers from the private sector and from neighboring countries. Tbis situation continues to persist (para 6.01). 3. Although the primary objective was not fully achieved, and much has still to be accomplished before GWSC may be regarded as a well managed, well taffed, effective water corporation, the project limited the erosion of GWSC's operating ability that would have occurred I . but for the substantial input of technical assistance under the project. Furthermore, persistent actions taken and pressures exerted on the Government throughout the course of the project, to increase tariffs and settle arrears for water services to Government departments (para 6.05), improved GWSC's financial position (para 6.04). 4. The second objective was achieved as planned, and the emergency repairs of the pipeline and the distribution system improvements achieved widespread benefits for urban dwellers. The third objective was partially achieved through the preparation of a feasibility study leading to a national water sector rehabilitation project; however, detailed engineering designs were not carried out under this project (para 6.03).  -iv- S. With the excepdon of difficulties usociated with delayed provision of counterpart funds by the Government, project implementation was relatively troubIe free. Although delays occurred they did not have serious implications. In rtospec, there was no apparent solution to the delays in the provision of counterpart fundwing since the decline in the national economy meant that the Government faced many more demand than could be met from dwindling resources. Delays in carryirS out the preparatory work for futurc investment projects, although not a serious issue, if avoided could have resulted in the follow-on project achieving a more advanced stage at the time of appraisal (para 5.02). 6. The estimated cost of the proiect was USS22.4 million of which US$9.4 million equivalent were local costs. IDA financed US$12.67 million, or 57% of the total appraisal cost. The actual prle cost was USS18.21 million (Table 4A). Planned project completion was June 30, 1987 (Table 2). Actual project completion was in June 1990. The credit was disbursed until October 31, 1990. ha,abilily 7. Results of the institutional strengthening aspects of the project have not been encouraging. GWSC is still desperately short of professional staff at upper and middle levels. Tariffs are again below the levels required to finance operaCons and maintenance, debt service and a portion of C;WSC's investment program (paras 7.01 - 7.02). Physical components of the project are more positive. 'The Kpong-Tema-Accra pipeline repairs are satisfactory, although these works corrected only the most urgent aspects of pipeline rehabiitation and more long term rebabilitation work needs to be done. Findings and Lesson 8. lTe PCR indicates that the primary objective of the project, institution building, was not as successfully achieved as had been envisaged during project preparation. A somewhat inappropriate approach tu institutional strengthening, in addition to the Government's reluctance to support the provision of incentives to enable GWSC to recruit adequate staff, contributed to the partial fai!ure to fully achieve this objective. The PCR also indicates that the remaining objectives, most of which were physical in nature and therefore more easily achievable, were much more successfil. Difficulties also resulted from the Government's reluctance to agree to tariff increases until quite late in the projec implementation stage and also its difficulty in providing counterpart funding to meet the local cost component of the project. 9. By far the most critical factor in the success or failure of water supply operations and development is the strength of the sector entity, in this case a national entity. Ciearly, the strength of an entity depends largely on the number and ability of individual members of its staff. The Bank's support for strengthening this institution was appropriate. A lesson to be considered for future operations of this nature concerns selection of the form and approach to institutional  siengthening. Recruitment and on-the-job training of indigenous staff has several advantages over the widespread use of expatriates. Clear advantages relate to sustainability, cost, acceptability (and hence local support). Intentions at appraisal were to use quite a large number of expatriates to "put the house in order' and train counterpart staff. The need to first restructure the terms of service for GWSC staff, or provide other incentives and to gain Government support for these reforms was not apparent until too late. As a result, the expatriates had few counterpart staff to train and when the expatriates left after three years or so, the void in GWSC remained. A subsequent training program (under a "twinning" contract with Thames Water Internaticnal (TWI)) was marginally more successful, but a lack of adequate counterpart staff to train continued to be a constraint,  WATER SUPPLY TECHNICAL ASSISTANCE AND REHABILITATION PROJECT (CREDIT 1342-43H kISQM b~fQELE * PART I: PROJECI REVIEW FROM BANK'S PERSPECIVE 1. EIect Identit - Name: Water Supply Technical Assistance and Rehabilitation Project - Credit Number: 1342-GH - RVP Unit: Africa Region - Country: Ghana - Sector: Water Supply 2. P Backround 2.01 Sector Development Qbiectives. (At the time of project appraisal). Early in the 1980s the new Government recognized the need to undertake major economic reforms and institutional changes to restore a basis from which sustained economic development could be resumed. The Government formulated a comprehensive economic recovery progi-am in 1983, requiring substantial suppqFt from international and bilateral institions. The Government requested Bank assistance to encourage external assistance through cofinancing and strengthening aid coordination. Objectives which guided the Bank's assistance program in Ghana included, among others, an effort to. improve the country's essential infrastructure (transport, water, power) to relieve constraints to increased production. Thus the immedhte objectives of both the Government and the Bank with regard to the water sector were to: a) increase the proportion of the population having access to potable water supplies, especially in rural and low income area; b) improve system reliability and sanitation in urban areas; c) strengthen the financial viability of the sector institution, the Ghana Water and Sewerage Corporation (GWSC); and d) strengthen GWSC with emphasis on improving sector planning and project implementation capacity. 2.02 The Bank's Prior Involvement in the Sector. Prior to the Water Supply Technical Assistance and Rehabilitation Project, the Bank financed two water supply and sewerage projects in Ghana (Credits 160-GH and 499-GH) both of which were directed to the Accra-Tema Metropolitan Area (ATMA). 2.03 The first project (US$3.5 million credit in 1969) assisted in expanding the water supply distribution network in Accra-Tema and constructing a sewerage system in central Accra. The project was completed in 1973 with a cost overrun of about 32% and a time delay on the water supply and sewerage components of zi- months and two years, respectively. The Operations Evaluation Department (OED) Project Performance Audit Report (No. 1683 of July 29, 1977) on this project concluded that, while the objective of the water supply component was  -2- met, the objective of the sewerae component was not fufly met becaute of the small percente of potei user to connect to the system. 2.04 The second project (Credit 499-GH for US$10.4 million in 1974) was financed in parallel with the African Development Bank and Canadian Internationl Development Agency. It was intended to increase the insalled capacity of works serving ATMA to meet existing and future neods for potable water for some 800,000 people in the Accra-Tema metropolis md to extend water supply to some 170,000 people living in adjacent rural P.am. Although the IDA- financed component, including construction of a 17m high earth dam at Woija, was completed in 1980, the entire project was not completed until mid-1985 about six years later than originally envisaged. This was due to general shortages of materials and labor that affected civi works. Cost overruns on the foreign currency component were held to 16% bv teduction of the project scope pertaining to the distribution system extensions. 2.05 Tle institution building objectives of the first and second projects were not fully achieved, in part because of a very high turnover of GWSC's top level officers, lack of managerial autonomy from Government and overstaffing at the lower levels. 3. Project Objectives and Description 3.01 Eroie Qbiectiv. In line with sectoral objectives outlined in pars 2.01 above, and in an attempt to better achieve institutional objectives which had had limited impact under the fis and second projects, the third project was conceived only to provide technical assistance to improve GWSC's capacity for planning and implementing development projects. However, afer delays in the preparation phase of the project, and in response to a request from the Government of Ghana and GWSC, the scope of the project was restructured to include urgent rebabilitation works and additional technjcal assistance. 3.02 Ihe main objectives of the project at appras, were to: (a) strengthen the managerial capabilities of (3WSC as a whole including its headquarters and area organizations so that GWSC could more effectively plan and carry out futer development of the sector; (b) improve GWSC's operating and financial perifrmance so that GWSC coud funcion as a viable and efficient secr indtiton; (c) provide ertergency maintenance aod repairs to the Kpong- Tema-Accra transmission pipeline and the distribution network in the Accn-Tema aea; and (d) prepare detailed plans for suitable investment projec for possible future Bank Group financing. 3.03 Pflec QmpgnM. The project consisted of the following: (a) Provision of about 30 man-years of thical assistance to strengthen GWSC's maagement by carrying out management duties and by providing on-the-job training to its senior staff and assisting GWSC to carry out agreed recommendations of a Management Improvement Ptogram (MM) Study (item (b) below). (b) A comprehensive Management Improvement Study of GWSC's orgaizaton, legal statu, statutory duties, operations, finances, planning and control systems, staffing and manpower deveiopment and traing. (c) Rehabilitation of the 42-inch diameter Kpong-Tema pipeline and the 32-inch diameter Tema-Accra pipeline and ancillary structures including: (i) replacement of  corroded pipes and recoating of dumged sections with concrete encasement at stream crossings; (ii) replacemeat of defective cathodic protection and repair or replacement of defective valves; (iii) provision of maintenance equipment; and (iv) related consultant services for surveys, designs, tender documents and construction supervision. I (d) A program of instalation, repair and maintenance of public standpipes in ATMA, including the installation of about 100 public fountains, the repair of about 250 public fountains and the acquisition and utilization of spare parts, tools, water meters, about 10 cars and pick-up trucks, about 50 mopeds and equipment and materials for the maintenance thereof. (e) Preparation and execution of a program of surveillance and monitoring of the hydrologic, environmental and public health conditions of the Weija Reservoir. (f) Preparation of designs and tender docu-ments for future water supply and sewerage projects to be carried out by GWSC. 4. Proiect Design and Organization 4.01 The project was initially designed as a technical assistance project with the objective of strengthening GWSC and was appraised in 1978. Because of delays in processing the credit, the project was restructured, reappraised in November 1980, and renegotiated in January 1983. The project's original concept and objectives were maintained despite delays and changes during the preparatory stages. The project concept and design were appropriate and timely in order to .y to restore the capability and operational and development capacity of GWSC, a vital institudon to the water sector, the hqeth and welfare of the people and the economic recovery of the country. 4.02 The addition.of several rehabilitation components did not change the original basic concept of the project. The focus on technical assistance to strengthen GWSC as originally planned, was maintained. Without IDA support for GWSC through this substandal technical assistance component, the effects on GWSC during the national economic depression when a number of professional and technical staff left Gbana, may have been even more serious than those actually experienced. Tbe project concept "as not innovative but was basically sound and met the needs of the sector, and of the key sector institution, GWSC, at a critical period. 4.03 Although major institutional improvements and reforms envisaged at the time of appraisal were not fully achieved, the decline of GWSC during this period of countrywide economic depression would inevitably have been more severe but for the technical assistance input provided under the project. The project was uncomplicated i its concept, it was of moderate size (US$22.4 million) and was well within the implementation capability of GWSC. 5.01 loan Effectiveness and Proiect Stao-up. The credit (1342-GH) was approved on March 29. 1983, signed on April 26, 1983 and became effective on November 15, 1983, some four months after the planned date of July 26, 1983. This was not considered to be a serious  -4 delay and was due primarily to allowing insufficient time in the original scheduling to satisfy four conditiOns for credit effectiveness. 5.02 Implementation Schedule. The project was originally scheduled to be completed by June 30, 1987. Although most of the rehabilitation works were completed by that date the institutional strengthening component continued to early 1990 as did completion of the existing training school at Weija, a component which was added to the project in September 1987. On the institutional side, on June 29, 1988, a twinning contract of two-year duration was signed with Thames Water International of the U.K. (TWI) to supplement the previous technical assistance effort. The closing date was extended in 1988 and again in 1989 to allow these components to be completed. This extension also provided an opportunity for completion of a component to prepare a follow-on project, an item which was deferred until relatively late in the implementation period. 5.03 Procurement. In the earlier stages of the project, procurement proceeded satisfactorily. Prequalitication of bidders for the largest physical component in the project, rehabilitation of the Kpong-Tema-Accra pipeline was completed by mid-1983, bids were received in September 1983, a contract awarded in February 1984 and site work started in September 1984. Similarly, the MIP study team was mobilized as early as January 1984 and a five-man technical assistance team was in position by February 1984. The remaining components, a technical assistance contract with TWI and a feasibility study for the follow-on project, were late in starting, due primarily to indecision rather than procurement difficulties. Throughout the project, procurement followed Bank guidelines and was satisfactorily processed with minimal delays. 5.04 PrgLect Costs. 'he estimated cost of the project at appraisal was US$22.4 million. The final cost was about US$18.21 million as shown in Part 111, Table 4. 5.05 Disbursements. Estimated disbursements of Credit 1342-GH are shown in Part m, Table 3. At the beginning of the implementation period disbursements were slower than those estimated at the time of appraisal, primariiy due to overly optimistic forecasting. Disbursements could not be expected in FY1983 as the credit became effective on November 15, 1983. However, disbursements reached satisfactory levels in FY1984 - FY1988 and then declined in FY1989 - FY1990 as major components were completed. 6. Proiect Results 6.01 Q jiect 9pjiecives. The extent of the exodus of managers and professional people in all sectors throughout Ghana, and the results of that phenomenon, were not fully apparent at the time of appraisal. The difficulties to be faced in strengthening GWSC's managerial capabilities were therefore underestimated. Two pervasive and related issues impeded GWSC's recovery and subsequent development, lack of adequate financing and an inability to attract effective upper and middle level managers and technical staff. This situation persists, although. more recently recruitment of junior professional staff has oeen reasonably successful. 6.02 Although GWSC's managerial capabilities were not improved to an extent envisaged at the time of appraisal, the project to a large extent prevented the erosion of GWSC's operating capability which otherwise would have resulted from the nationwide exodus of professionals. In addition, there were positive improvements in GWSC's organizational structure, both at  . 5- headquarts ad in the regions. Most imporantly, as a result of the project, GWSC's overall fincial posidon was improved primarily through increased tariffs and payment of arrears for water services by the Government. 6.03 PyAicalRes . Toe physical objectives of the project were achieved substantWly as outlined at appraisal. Emergency maintenance and repairs to the Kpong-Tema-Accra transmission pipeline were completed, and leakage was reduced. Although much work on the pipeline remains to be done, it is in operation. Similarly, distribution improvements in the Accra- Tema area were completed as scheduled. A feasibility study in preparation for the follow-on project (Water Sector Rehabilitation Project, Credit 2039) was completed. 6.04 Fbinial Pfr nc. Financial statements, including appraisal estimates and audited results for FY 1982-88, for GWSC's consolidated and the ATMA operations are presented in Annex 2. Consolidated GWSC and ATMA financial performance was far below appraisal estimates through 1985. Operating losses were incurred during the early stages of the project as the Government repeatedly delayed requested tariff increases. When finally granted, high local inflation and a rapidly deteriorating exchange rate immediately eroded the effects of the tariff measures. The Government provided operating subsidies to assist GWSC in meeting its obligations, although iliquidity remained a serious problem for the Corporation. GWSC's overall and ATMA financial results improved substantially beginning in 1986 as a consequence of Government cumulative tariff action (increases of 500%, 1986; 25%, 1987; and 25%, 1988). The audited 1986-88 financial statements show: (a) positive operating income; (b) an acceptable liquidity level; (c) compliance with the principal financial covenants; and (d) a phasing out of Government operating subsidies by 1986. The audited results must, however, be tempered by: (a) understated revaluation of fixed assets and debt and related depreciation and debt service charges; (b) substantial long-term debt contracted by the Government and onlent to GWSC but not included in the financial sttements; (c) debt servicing requirements not met by the Corporation; and (d) insufficient maintenance provisions. If these factors are considered, it is estimated that GWSC's financial performance, although showing improvement in the later years of project implementation, would haye been satisfactory only in 1986. 6.05 GWSC's overall accounts receivable (as percentage of sales) increased during project implementation. Although GWSC increased its collection efficiency for private consumers, the high level of Government arrears created serious liquidity problems. A Government clearing house arrangement, established in 1989 is satisfactorily dealing with Government accounts. 6.06 GWSC, which relied and will continue to rely heavily on foreign exchange borrowings to finance its investment program, has been particularly hard hit by the depreciation of the Cedi against hard currencies. Under a follow-on Water Sector Rehabilitation Project, approved in June 1989, GWSC's capital needs were restructured in light of its low debt service coverage, inadequate working capital and substantial capital investment program. In addition, the Corporation's fixed assets will be revalued to reflect replacement cost and the remaining usefil life. 6.07 ImRact of the Project. The technical assistance components provided under the project prevented what might well have been a total collapse of GWSC as an operating, national water supply entity. The project provided a means whereby the Government of Ghana could be made aware of the need for water tariff increases and the consequences of withholding authority for such increases. In addition, the expatriate staff provided under the technical assistance  -6 - componae reinorcod the deortu of GWSC's depletoe senior manaement staff and provided valuable asisc in day.tokday operations well as traning. 6.08 bhe emergency repairs to the Kpong-Tema-Accra transmission pipeline enabled GWSC to maintain the water supply service to the metropolitan area, subnantially without interruption. Without this component, watr supply to the area would have ben, at bes, intermittent and unreliable cauing widespread hardship to all sections of the community and deterioration in the health of the urban people. Similarly, the improvemet of the distribution system in ATMA, the provision and rehabilitation of public taps, and improvex supplies in water deficient areas benefitted the poorer sections of the community. 7. Project Sustainabiliq 7.01 The project created an awareness of the need for the Government to agree to a realistic program of phased tariff adjustments, and to implement such a program in a timely manner. Acceptance of this policy was, and continues to be, essential to the financial viability of GWSC, allowing it to continue its day-to-day operations, adequately maintaining its more than 200 water systems throughout the country and to provide for future growth in the sector. These issues continue to be addressed in the follow-on project (Water Sector Rehabilitation Project, Credit 2039-OH). 7.02 Sustainability is also dependent on Government support for continued institutional development, particularly in the area of raising the level of GWSC's management and operating ability by providing incentives to enable GWSC to attract a-I retain qualified staff. 8. _P r , 8.01 Through the project the Bank provided significant institutional support to GWSC enabling it to achieve an acceptable level of financial performance by the year 1986 against a generally adverse economic climate. In addition, the provision of a relatively large program of technical assistance enabled GWSC to continue to operate at an acceptable level of efficiency despite the massive exodus of professional staff. Tbroughout the project, Bank performance was satisfactory. However, in retrospect it appears that greater benefits may have been achievable by adopting a modified approach to some of the difficulties faced by GWSC; these alternatives are outlined as follows: (a) since adequate tariffs were so vital to the efficient operation of GWSC, patcularly to the maintennce of its many essential water supply systems, the Bank could have made stronger efforts to persuade the Government to introduce realistic tariff adjustment programs; (b) technical assistance to support GWSC was clearly essential; however, the work of the expatriate advisers provided under the project was hampered by a lack of suitable GWSC staff to train; furthermore when the expatriates completed their work and left, GWSC's improved management and operating efficiency was quickly eroded; the basic deficiency, lack of qualified competent staff, remained; perhaps greater benefit would have accrued by persuading the Government to provide suitable  .7 - incenives to atract qualified Ghanaian staff, on a permaent basis for GWSC; (a subsequnt twinning program with TWI was marginaily more succeusful); and (c) emergency maintenance and repair of the Kpong-Tema-Accra transmision pipeline wa an essential component of the projea and was well implemnted; however, it is questionable as to whether the Bank should have made a greater effort to asist GWSC to seek grant, or other financing to enable all of the pipeline rehabilitation work to be completed, much of which still remains to be done. 8.02 In view of the relatively modest size of the credit, and given the political and economic background at the time of the project, it is probable that further pressures on the Government would have been only moderately successfil. 9. Borrower Performance 9.01 The status of covenants (Part III, Table 6) generally indicates the perbrmance of the borrower (the Republic of Ghana) and GWSC. Except for the delays in submitting audited accounts and delays in adjusting water tariffs the borrower's performance has been satisfactory. The revaluation of GWSC's assets has proved to be a more difficult task than was originally envisaged and has yet to be completed. The provision of counterpart funds by the Government tended to be slow throughout the greater part of the project period. Procurement of works, goods and services was expeditiously carried out throughout the project, and there were no major delays with the possible exception of the appointment of consultants to prepare the follow-on project. 10. Project Relationship 10.01 Bank relationship with the Government of Ghana and GWSC throughout the project was excellent. 11. Cgnsulting Seri 11.01 Individual consultants were employed to carry out management duties and provide on-the-job training to GWSC senior staff. Despite the less than satisfactory relationships which developed between local staff and the expatriate advisers, their performance was rated by Bank supervision staff as being generally satisfactory. 11.02 The services of the Public Administration Service in association with Tahal Consulting Engineers, Ltd. were obtained to carry out a study on GWSC manpower, staffing, organization and management. The services of these consultants were satisfactory, as were those of Tahal Consulting Engineers Ltd. when engaged for the Water Sector Rehabilitation Study completed in September 1988.  -8- 12. PmieLDumotation adData 12.01 'Me Development Credit and Project Agreements were adequate and appropriate for their purpose. Similarly, the Report and Recommendation of the Prosiden provided guidance for Bank staff and GWSC in project implementation. Quarterly reporting by bWSC was satisfactory and adequate data are generally available. GWSC provided a draft of Part I of the compleion report and comments and suggestions on the remaining sections.  GHANA WATER SUPpLY CHNCAL AZSSISTANCE AND REHABILITATION PROJECT (CREDIT 1342-GH) PROJECT CQMLEUON REPQRT PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTVE lie 1. Adequacy a acy of Factual Infornation in Part m 1.01 The country data as presented in Part m, were reviewed by GWSC and found to be adequate and generally consistent with GWSC information. 2. Evaluation of Bank's Performance aW Lesson Learnd 2.01 Bank missions were generally helpful. Initially when activities centered around construction work the mission engineers gave sound advice. There was a major delay in procurement of additional steel pipes, but fortunately this did not affect the project completion period. 2.02 Discussions between Bank missions and the Borrower were cordial, each side carefully considering the other's views. Consensus was thus reached on most issues. One exception was that prourement issues were not always expeditiously resolved by missions but were delayed while procurement officers at Bank headquarters were consulted. 2.03 During the fiveyear Rehabilitation and Developmeat Study, visits by Bank missions were timely and advice and guidance were relevant, contributing to the high quality of the report. However, as a result of a lack of guidance in the early stages of the study, the consultants were required to spend additional time to amend the study and report as a result of input by Bank missions during later stages of the work. 2.04 Ssons were learned during project implementation. First, procurement contnrc for the supply of materials, for use by the civil works contractor, should be sufficienldy flexible to allow purchases to be made from other suppliers where such a course of action proves to be advantageous. Second, procurement issues should be resolved expeditiously preferably while the mission is still in the field by prompt communication with headquartrs where necessary. Courses of instruction for the Borrower's procurement personnel would be beneficial. In the case of long-term studies by consultants, terms of reference need to be carefully reviewed 1/ Part II is a condensed version of the Borrower's original document; the substance has not been changed and the original document is avahable in the project files.  -10- by Bank staff prior to commencement of such studies, and at frequent intervals throughout the course of the study so that adjustments may be made at early stages as results become available. 3. Evaluation of the Borrower's Own Performance and Lessons Learned 3.01 Cooperation among the Bank, consultants and the Borrower was quite good. Data requested were promptly presented when available. However, lack of certain types of data, such as borehole records and planning reports, caused difficulties. 3.02 In project formulation and planning the implementing agency's performance was quite creditable. However, serious delays occurred in payment of the Cedi portion of contractors' claims. Fortunately the contractors did not stop work although interest on delayed payments had to be met. These late payments did not affect the project completion period. 3.03 The TWI twinning contract was generally satisfactory. However, in some cases TWI recommendations could not be fully implemented because of a lack of equipment and manpower resources within GWSC. In addition, some of TWI staff were younger and less experienced than GWSC staff. Attachment of GWSC personnel to TWI in the U.K. was not fully successful because GWSC staff in the U.K. were not fully involved in TWI work and were not given specific, achievable objectives. Conversely, the effectiveness of TWI personnel in Ghana was reduced because GWSC staff were too fully committed to day-to-day duties to spare sufficient time to coordinate fully with TWI staff. 3.04 Several lessons were learned: First, the Borrower's data storage and retrieval systems need to be improved so that maximum benefits may be derived from such a project. Second, adequate provision must be made to release local Cedi funds so that contractors' claims may be promptly settled. Third, the Borrower should ascertain early in the program that consultants, and organizatibns such as TWI will provide staff who are clearly more experienced than GWSC's staff. Fourth, objectives cannot by fully achieved unless arrangements are made to make available the requisite equipment and manpower. Fifth, arrangements should be made to ensure that the Borrower's staff have sufficient time available from their day-to-day activities to interact with their counterparts; and sixth, prior to acceptance of arrangements for attachment of local staff to overseas organizations (such as TWI), the Borrower should look closely at the way in which local staff will interact with the foreign organization to ensure that the time is spent profitably.  - 11 - PART III STATISTICAL INFORMATION Table 1. Related IDA Credits Loan/Credit Year of Title Purpose Approval Status Credit 160-GH To expand the water 1969 Completed in supply system in central mid-1973. Accra-Tema metropolitan area and provide a sewerage system for central Accra. Credit 499-GH To increase the installed 1974 Completed in water system capacity in mid-1985. Accra-Tema metropolitan area and to enhance GWSC's abkility as a water supply entity. Credit 2039-GH To provide institutional 1989 On-going. support for GWSC, to improve its management capability, financial performance and operation and maintenance ability. To rehabilitate 33 urban water systems.  - 12 - Table 2. Proiect Timetable Date Date Date Item Planned Revised Actual - Identification 07177 - Preparation 04/78 - Preappraisal 08/78 - Appraisal Mission - 1 a/ 11/78 - Appraisal Mission - 2 02/79 - Reappraisal 11/80 - Credit Negotiation 08/81 Credit Renegotiation b/ 05/79 01/83 - Board Approval 11/81 03/83 - Loan Signature 04/83 - Loan Effectiveness 11/83 - Loan Closing 06/87 06/90 - Loan Completion 10/87 10/90 a/ Appraisal was carried out in two stagest the first in November 1978, when project components were agreed with GWSC and the Government; the second in February 1979, when an IDA mission updated GW5Ces financial projections. bi First version of the project negotiated in February 1980. Restructured project appraised in November 1980 and credit negotiated in August 1981. Project cost estimate updated and credit renegotiated in January 1983.  - 13 _ Table 3. _r*ct Disbursements Disbursements (in SDR Million) Credit 1342-GH IDA Fiscal Estimated Actual Actual 2 of Year Cumulative Cumulative Estimated 1983 0.4 -0 - 0- 1984 6.8 1.4 21 1985 10.3 4.9 48 1986 11.8 7.9 67 1987 11.8 9.0 76 1988 11.8 9.8 83 1989 11.8 10.6 90 1990 11.8 11.2 95 1991 11.8 11.6 a/ 95 a/ Credit 1342-GH was disbursed until October 31, 1990 against commitments. A sum of about SDR 0.2 million remained undlsbursed.  - 14 - Table 4. Proiect Costs and Financina A. Proiect Costs USS Millions Aooralol E imate Actusl Local Foreign Locr orolgsn Costs EIchang T Costs Eschange Cot Tta Coat. Total Technical Asaiaten-ce 1.6 2.49 S."9 6.3 2.51 2.P7 Mansogment twprowv"ent Program .086 1.56 2.36 0.46 1.C1 2.26 Consultant Servicoe 0.23 1.64 1.27 0.44 1.79 2.23 Pipeline Rehabilitation 1.64 4.67 6.31 1.15 4.66 .6t1 Weija Training School -- - -- 6.50 8 .35 6.65 iscellaneouo, Vehicle and Equipment I 016 1.00 1.15 2.64 1.65 4.19 Contingencies 6.03 2.30 7.3U -- - -- TOTAL 9.40 13.06 22.46 5.54 12.67 13.21 ^I Estimated costs at completion. $Spar pfrt. and tools, public fountains, water meotrs, vehicle.  - 15 - S. Prolect FinaEcina Planned Source Agreement Revised F$nal a/ --------------- (US Dollars Million))------- IDA Expenditure Catesories 1. Technical assistance 2.42 2.50 2.58 to strengthen GWSC's management. 2. Consulting services 1.47 1.50 1.74 to study GWSC's organization etc. 3. Consulting service 1.00 1.80 1.72 for a Weija Reservoir Monitoring Program and to prepare a future project. 4. Pipeline 4.56 4.60 4.69 rehabilitation and provision of equipment. 5. Installation and 1.00 1.00 1.34 repair of public taps in ATMA. Provision of spare parts, tools, meters, vehicles, etc. 6. Weija Training School -- 0.35 0.20 7. Refunding PPF Advance. 0.40 0.40 0.40 8. Unallocated. 2.15 1.25 (0.33) b/ Total IDA 13.00 13.00 12.67 Government of'Ghana Counterpart Funds 9.4 9.4 5.54 TOTAL FINANCING 22.40 22.4 18.21 a Estimated values. bl Estimated undisbursed amount to be cancelled.  A~~~~~~~~~~~~ - 6 - Table 5. Studies Purpos es Defined ot Impact of Appraisal Status Study Managemnot Improvement A comprehonsive study of Comploted. Conrally a poltlve ProgarwA Study OWSCIs oroanalztlon, IUOai lcmat, improvin? status, statutory duties, GWSC'e organixot onal operations, finance, structure ond planning and control syste m, finances. stsffing and manpower Improvements were development ond training, hampered by lack of Incentives for r crultaent of effective management and Aher preoiessiona staff. Water Supply Sector Propare plans for invostment Completed. Provided a basis for Rehabilitation Study projects for future IDA preparatlon of a financing. follow-on project.  - 17 _ Table 6. Status of Covenants Brief Description Section of Covenants Applicable Compliance Remarks The Borrower and GWSC DCA 3.02 Yes Recommendations shall carry out (b) were substantially recommendations of implemented. the Management Improvement Programme (MIP). The Borrower, through DCA 3.03 Yes Program implemented the Ministry of satisfactorily. Health, to assist GWSC to carry out Weija Reservoir monitoring and control program. GWSC to provide the PA 2.01 Yes Program completed Bank with a plan (b) satisfactorily. relating to the improvement of public taps. GWSC to employ PA 2.02 Yes Programs completed consultant's and satisfactorily. expert's to assist in exec-tion of HIP and to ; pare and supurvise other project components. 'WSC to identify and PA 2.09 Yes Partially complied value fixed assets of (a) with. Assets were ATMA by June 30, not revalued by a 1984. normally accepted method. However, indices were applied to adjust the book value of the assets to a more realistic level.  - 18 - GWSC to establish by PA 2.09 No Partially complied December 31, 1984, (b) with. and maintain, a method for annual evaluation of ATMA's assets. GWSC to, beginning of PA 2.09 No Partially complied December 31, 1984, (c) with. annually revalue ATMA's assets. GWSC to maintain PA 4.01 Ye'. separate accounts for its operations in ATMA and the remaining area. GWSC to have its PA 4.02 Yes Audited statements accounts audited, were overdue for some time but are now up to date through FY88. After December 31, PA 4.03 Yes The rate of return 1984, GWSC shall take (a) was achieved in measures, includihAg 1985, and increasing tariffs thereafter, when where necessary, Lo the Government produce an annual finally responded return of not less to GWSC's requests than 3Z of the to increase average current net tariffs. The rate value of ATMA's f. e.d of return was based assets in operatior- on partially revalued fized assets (see PA 2.09(a) and (b)). After December 31, PA 4.05(a) Yes This covenant was 1984. GWSC shall take not met in 1985, measures, including but was complied increasing tariffs with in 1986, and where necessary, to thereafter as a produce annual gross result of the revenues of not less Government*s than 802 of operating agreement to costs, increase tariffs.  - 19 - Table 7s Mlision Data by Staces of Project Stse ot Month/ Number of Stof f Weeks Pertormnce Rating P.o?met C.,l, Yoer Persons In Field !/ SU ialination kI by Activity p/ Throuch Agralsal Identification 07/77 2 8 E., FA. Preparation U4/78 2 8 E., FA. Preapproleal 08/78 2 4 E., FA. Appraisal I Pt.(i) 11/78 2 0 E., FA. Appraisal I Pt.(1i)02/79 2 2 E., fA. Appraisal II 11/s0 2 4 E.9 FA. TOTAL 20 Supervision a P M f 0 Supervision 1 09/88 2 2 E., FA. 2 1 1 1 - Supervision 2 09/88 2 2 E., FA. 2 2 1 2 - Supervision a 02/84 2 2 E., FA. 2 1 1 1 2 Supervision 4 06/84 2 1 E., FA. 2 1 1 2 S Supervision 6 09/64 2 2 E. fA. 2 2 1 1 8 Supervision 8 {/ 09/86 i 1 1 FA. - - - - _ Supervision 7 11/86 2 2 E, FA. 2 - 2 - - Supervision 8 2/ 03/06 1 0.6 FA. - - - - Supervision 9 10/66 2 1 E. FA. 8 - S - - Supervision 10 02/87 1 0.6 FA. - * - - Supervision 11 5.6/87 2 2 E FA. - S - - Supervision 12 09/67 2 2 E. FA. - - - Supervision 18 11/87 1 1 E. 2 - 2 _ _ Supervision 14 1-2/80 2 2 E.# FA. 2 - 2 - - Supervision 16 09/66 2 2E. FA. 2 - 2 - - Supervision 10 0O/69 1 1 FA. 2 2 1 2 - Supervision 1? 11/89 1 1 fA. 2 2 2 2 - Supervision 16 09/90 2 2 E., FA. 2 2 2 2 - TOTAL STAFF WEEKS -2r S/ Staff weoks Oxclude ti.. spent In the field on other projects. E* Enoineer; FA a Financial Analyst