Liberia - Second Water Supply Project

The Wor l, J) ti ( 2ji>;*j FOR OFMICIA ReportNo. 9717 PROJECT COMPLETION REPORT REPUBLIC OF LIBERIA SECOND WATER SUPPLY PROJECT (CREDIT 1563-LBR) JUNE 26, 1991 . Infrastructure Division Country Department IV Africa Regional Office 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.  MEASURES AND EOUIVALENTS 1 millhmeter (mm) 0.04 inches (in.) 1 meter (m) = 39.4 inches (in.) 3.28 feet 1 kilometer (kIn) 0.62 miles (mi) 1 cubic meter (m3) 35.3 cubic feet (cu.ft) 1 cubic meter per second = 22.8 million US gallons per day (mgd) 1 cubic meter per day 264 US gallons per day liters per capita/day (Icd) = 0.264 US gallons per capita per day ACCRONYMS AND ABBREVIATIONS AfDB African Development Bank AfDF African Development Fund GOL Govermment of Liberia GTZ Gesellschaft fur Trihnische Zusammenarbeit (German Technical Assistance Agency) KfW Kreditanstalt fur Wiederaufbau (German Reconstruction Bank) LWSC Liberia Water and Sewer Corporation SAC Structural Adjustnent Credit  FOR OMFCIAL USE ONLY THE WORLD SANK Washington, D.C 20433 U.S.A. Office of Dvecian.Genetal Opatimon Evaui..mi June 26, 1991 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Liberia Second Water Supply Project (Credit 1563-LBR) Attached, for information, is a copy of a report entitled "Project Completion Report on Liberia - Second Water Supply Project (Credit 1563-LBR)" prepared by the Africa Regional Office. No audit of this project 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 without World Bank authorization.  FOR OFFICIAL USE ONLY PROlECT .QOMPLETION REPORT REPUBLIC OF LIBERIA SECOND WATER SUPPLY PROJECT (CREDIT 1563-LBR) Table of Connte Page No. Preface ..... ............................................. i Measures and Equivalents, Accronyms .ii Evaluation Summary .iii Part I. Bank Assessment A. Project Identity ................................................1 B. Background ................................................ I C. Project Objectives and Description .............................................. 2 D. Project Design and Organization ................................................ 4 E. Project Implementation ................................................ 5 F. Project Results ................................................ 6 G. Project Sustainability ................................................ 8 H. IDA Performance ................................................ 9 I. Borrower Performance ................................................ 9 J. Consulting Services ................................................ 9 K. Project Documentation and Data ................................................ 10 Part III. Statistical Annex Table 1 Project Timetable and Mission Data Table 2 Action Plan Table 3 Monitoring Indicators Table 4 Selected Performance Indicators Table 5 Disbursement Performance Table 6 Project Costs and Financing Table 7 Status of Covenants 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.  PROJECT COMPLETION REPORT REPUBLIC OF LIBERIA SECOND WATER SUPPLY PROJECT (CREDIT 1563-LBR) Preface This is the Project Completion Report (PCR) for the Second Water Supply Project in the Republic of Libetia, for which Credit 1563-LBR in the amount of SDR 5.1 (US$5.0) million was approved on March 21, 1985. Liberia was in non- accrual status during most of the project, initially from February 1985 to September 1986, then again from December 1986 to the present and disbursements were suspended during that period. An exception to the disbursement suspension was made for the technical assistance component of the project up to December 31, 1987. A total of SDR 2.9 (US$3.7) million or about 57% of the credit was disbursed by the date of final disbursement, February 1, 1988, which leaves SDR 2.2 miliUon undisbursed. There are no outstanding coninitments. The credit closed on December 31, 1990, and, in accordance with Operational Directive of April 1989 (OD 13.30, para. 14), the undisbursed balance should be cancelled within two months of the closing date. Although there is no Government in place for the Bank to communicate formal closing, the undisbursed balance could now be treated as cancelled to enable the Bank to free funds which it is otherwise obligated to keep in liquid resources (OD 13.30, para. 2). As soon as there is a new Government in the Republic of Liberia, the Bank can take the additional steps to communicate closing and cancellation of the credit. The PCR was prepared by the Infrastructure Division of the Western Africa Department (Preface, Evaluation Summary, Parts I and I) based on a review of documents available in the Regional Information Center and discussions with staff involved with the project's evolution. Part II could not be prepared by the Borrower because of difficult country conditions.  - ii - POECr COMPLETION REPORT REPUBLIC OF LMEIA ~~QIY_kUL_SUPPL ROECTM (CREDrr 1563-LBR) Eroject Evaluation Summarr i. The intention of the Second Water Supply Project was to help resolve deficiencies of the First Water Supply Project (Credit 859-LBR; PCR No. 5754 dated June 26, 1985) and arrest the steady decline in the operations of the Liberia Water and Sewerage Company (LWSC). The project had originally included provision for phjsical investments in distribution and transmission systems, technical assistance and training, studies and designs, and procurement of equipment and supplies through a cofinancing arrangement with AfDB. Upon the withdrawal of AfDB at the start of the project, due to Liberia's liquidity problems, the project was scaled down to exclude the major construction item under the project costing US$4 million (pam. 5). ii. At the time of project preparation, there was serious neglect in the operation of LWSC's treatment plant and pumping stations which resulted in excessive costs and wear. Financial problems were immense, stemming largely from inadequate consumer control and data processing deficiencies, so that LWSC was dependent to a very large degree on the overloaded Government budget, with consequent loss of managerial autonomy. The LWSC was overstaffed at the lower levels and efficiency was very low. iii. The project made micro gains in improving LWSC's financial management with the steady, tedious work of a team of technical assistance staff financed by GIZ and with IDA's persistence. At the same time, however, sustainability could not be ensured as the project had neither the leverage nor the policy support. iv. Overall financial performance remained poor. While LWSC succeeded in increasing its collection efficiency over time, the amounts collected were barely sufficient to cover salary expenses. Billings continued to reflect flat rate charges and charges based on faulty meters. [A metering program under the project was curtailed when funds dried up]. With neither government subventions nor government payments forthcoming, maintenance suffered, unaccounted-for-water grew, steering LWSC into its pre-appraisal operating condition. v. An economic rate of return was not calculated at appraisal, the project having been justified on non-quantifiable benefits. It is now questionable whether any qualititative benefits could be attributed to the project (para. 24).  - iii - vi. In retrospect, it appears that at the outset, chances for any impact would have been very slim in the light of the following countervailing factors: (i) serious and worsening liquidity problems of the GOL; (ii) significant and growing GOL arrears to LWSC; (iii) the critical need for more project resources which were not forthcomning; (iv) LWSC's past institutional and financial performance under the First Wauei Supply Project; and (v) widespread difficulties in LWSC which could not be adequately addressed in the context of a rescue operadon. vii. TMe experience from this project gives rise to a set of questions which are easy to ask in retrospect but difficult to answer. Why attempt a miniscule rescue operation in the midst of severe country and sector problems and at a time when other Bankc/DA-ftnanced projects, with reinforcing objectives, such as the Structural Adjustment Credit, were on hold? Should there not have been a greater degree of commitment up front from the Government vis-a-vis counterpart funding and settlement of arrears to LWSC (which were about US$5.5 million at project preparation and grew to US$10 million by 1989) before the project became effective? Given that the Bank Group was not obligated to disburse funds if the GOL/LWSC did not comply with its legal covenants, why did the Bank/IDA not stop all disbursements sooner and cancel the remainder of the credit? When are the costs of techni.al assistance too high for the accrued benefits? viii. One lesson that can be derived from this project's experience is that success is very difficult to achieve and sustain under adverse policy and institutiona' conditions. A small-scale operation such as this one might have had a fair chance of success (i.e. the gains made could have been sustained) under conditions of: (i) government policy commitment; and (ii) the operation being catalytic in mobilizing additional donor support.  JE& C COQMLETIQO R IE REPUBLIC OF lBE SECOND WA113R SUPPLSY PROXECT (GRED1563-L.BR) A. Prject Identi Name: Sacond Water Supply Project Loan/Credit No: Credit 1563-LBR RVP Unit: Western Africa Country: Republic of Liberia Sector: Infrastructure B. Background 1. The first Bank-financed water supply project in Monrovia (Credit 859- LiAR; Project Completion Report (PCR) No. 5754 dated June 26, 1985) had mixed results. While the physical components of the project were quite successfully completed, the software aspects (institutional, financial and operational) needed to sustain these investments were not successful. Several reasons had been given in the PCR for this outcome, the most important being management changes and increased Government intervention since the 1980 coup. The ensuing deterioration of the financial position of the Liberia Water Supply Company (LWSC) left it on the brink of financial collapse. 2. The Second Liberia Water Supply Project was designed as a rescue operation, with emphasis on technical assistance and rehabilitation to prevent. irreversible decay of the physical system and to start developing an institution which could meet the water supply needs of Monrovia's growing population. It was hoped that by revamping LWSC's financial and accounting systems as well as helping to improve its operating efficiency, LWSC's financial collapse could be avoided. Based on the lessons of the first project, physical components were to be undertaken only after specific institutional and financial targets were met. This second project also continued on from the Monrovia Urban Development Project (CR 1223-LBR; PCR No. 7865) which helped to improve water supply through installation of 52 standpipes. Provision for their maintenance was included in this project. 3. The second water supply project was conceived and evolved during a very difficult time for Liberia. The country continued to have trouble in keeping repayments to the Bank Group current, and disbursements of all loans and credit: were suspended, initially from February 1985 to September 1986, then again from December 1986 to present. Nevertheless, a decision was taken to process the loan (Board approval March 21, 1985) with the condition that prospects for resolving Liberia's immediate liquidity problems and meeting debt service commitments to the Bank Group looked reasonably good. Simultaneous discussions during the month of March 1985 between the Liberia Govemment, the IEM and the US Govemment led to  -2 - asswrances that a two-year financial program for the country would enable Liberia to pay off its outstanding debts to the Bank Group. Thlese expectations czme to fruition on September 30, 1986 when Liberia cleared all arrears to the Bank Group by paying US$18 million, most of which was US-financed. 4. The project was approved in March 1985 but, because of the country's non-accrual status, could not be declared effective until October 1986 (Annex Table 1 provides dates for key stages in processing of the project). No formal steps could be taken to close the loan and car I the undisbutsed balance in the absence of a Governunent in Liberia. However, as the closing date has expired (December 31, 1990), and there are no outstanding commitm-nts, thc undisbursed balance of the credit (SDR 2.2 million) can be treated as cancelled to allow the Bank to free funds which it is otherwise obligated to keep in liquid resources (OD 13.30, April 1989). As soon as there is a new Govemment in Liberia, the Bank can take the additional steps to communicate closing and cancellation of the credit. 5. Total costs of the project under review wete to be financed by IDA, the African Development Bank (AfDB), Gernany (GTZ), and the Government of Liberia (GOL). The AfDB subsequently withdrew from the project because of Liberia's overdue payments to AfDB/AfDF, and the project had to be scaled down accordingly (parm. 8). C. Project Obiectives and Descrintion 6. The objectives of the project as stated in the SAR were to: (a) effectively and efficiently manage the financial and human resources of LWSC; (b) make repairs and linited expansions to the distribution system to enhance the availability and reliability of supply; (c) improve billing and collection performnance; and (d) achieve operational efficiency in the use of energy, supplies and manpower by eliminating waste. 7. The project compcnents listed in the SAR consisted of the following: (a) Technical Assistance and Training (i) 10 man-years of technical assistance for the positions of financial controller (3 years), distribution engineer (3 years), water engineer (3 years) and training specialist (1 year);  - 3 - (ii) suppott for training including tuitio'i, training equipment and supplies; (b) Studies and Designs (i) design and supervision of construction; (ii) consultant servics for (a) revision of Management Improvement Program studies prepared under the Monrovia Water Supply Project; (b) fixed asset revaluation; (c) data processing; (d) groundwater exploration; and (e) public relations; (c) Equivment and Supplies (i) comnunications equipment, data processing equipment and other minor office equipment; (ii) equipment, tools and spare parts for thie motor vehicle repair shop and the meter repair shop; (iii) vehicles and field equipment (3 cars, 8 light trucks, 5 heavy trucks, compressor and generator); and (iv) supply and installation of chemical dosage equipment and bulk chetnicals. (d) Distribution and Transmission (i) supply and laying of 6 mi (10 kIn) of 8 in (200 mm) and 12 in (300 mm) dianieter pipe in the Congotown, Sinkor and Mamba Point areas; (ii) construction of a 5 mg (19,000 m3) distribution storage reservoir of reinforced or prestressed concrete in Paynesville; (iii) installation of 11 large zonal metels; (iv) repair and rehabilitation of valves, hydrants and standpipes; and (v) supply of approximate'y 5,000 service meters, together with PVC pipe and fittings for 6,Ck0 house connections; and the supply of spare meter parts and pipes.  -4- Reviion inpLoject Scope 8. As a result of the withdrawal of AfDB3, and the inability of IDA to secure alternative cofinancing, the major construction component (part (d) (ii)), amounting to about US$4 million, was removed and the project focussed on technical assistance, studies, and procurement of basic equipment and supplies. D. Project Design and Organization 9. Ihe project was originally designed as a component of a Public Enterprise Reform project, but later revised as a free-standing project when it was felt that the inclusion of physical componelits was necessary to bring about both physical and financial changes in LWSC. The project set about to remove the inefficiencies that affected all aspects of LWSC's operations. Measures were appropriately taken to have LWSC assume responsibility for much of the needed improvements and these were specified in an Action Plan (Annex Table 2) which became a side letter to the Project Agreement. LWSC was also required to meet standard conditions for Board presentation, including: (i) the appointment of auditors acceptable to IDA to audit LWSC's FY83/84 accounts; (ii) reconstitution of the LWSC's Board in accordance with LWSC's by-laws; and (iii) modifying the structure of LWSC's tariff. Key financial and operational targets wenm dramwn up to track performance (Annex Table 3). 10. The project was originally designed to have the physical works commence only after LWSC's operating performance had sufficiently improved to benefit from extensions to its system, or two years after implementation of the technical assistance progtam. However, because of the significant elapsed time between Board approval and effectiveness, mplementation of the limited volume of works proceeded simultaneously with the technical assistance program. 11. To produce maximum benefits to LWSC, IDA staff negotiated with GTZ to have its team of experts act in executive line functions rather than advisory (which GTZ would have preferred). This difference in philosophy had to be resolved early, and GrZ finally agreed to have their team start in executive positions but to revert to advisory capacity towards the latter part of their tenure to allow counterparts to assume full responsibility. 12. A Structural Adjustment Credit (SAC) focussing on reforn of the public enterprises in Liberia and their relationships with the Govemment was being appraised at the time of this project's appraisal. It was expected that the SAC with its complementary objectives would reinforce the goals of this project by correcting and strengthening the overall policy framework for public enterprises. However, the SAC was never processed. 13. In retrospect, it appears that the design of the project was reasonable. The LWSC was required to make important changes which it did initially and which could have been sustained under a more enabling environment. But, as the project  progressed and country circumstances and liquidity problems worsened, it became apparent that the. project, as designed, did not have the leverage to have an impact. E. Prolect Implementation ject F1ncina 14. It had been estimated at appraisal that the costs of the project would be shared by IDA, AfDB, GIfZ and LWSC in amour'ts specified in the table below. However, as the country's illiquidity situation worsened, counterpart funds grew scarcer and participation of the cofinancers in the project was trimmed and the major physical works item was removed (part (d) (ii) of para. 7). Project Financing (US$ 000) SAR Expectation %Actually Source Foren L Total Financed IDA 5,100 - 5,100 57% AfDB 3,804 196 4,000 0% GIZ 1,200 - 1,200 100% LWSC - 1,780 1,780 32% Total 10,104 1,976 12,080 29% Technical Assistance 15. Project implementation appeared to be reasonable under the prevailing poor country and institutional circumstances. The Bank was able to make use of the time elapsed between credit approval and effectiveness (19 months) to work out many of the details of imolementation wlth LWSC. By Decen'ber 1985, LWSC had signed a contract with GIZ (as executing agency for technical assistance) covering four of the technical assistance positions financed under the credit - financial controller, water treatment engineer, distribution engineer and manpower/training specialist. In addition, GTZ provided, on a grant basis, five technical assistance positions -- advisor to the Managing Director, chief accountant, commercial advisor, outstations advisor and workshop superintendent. By 1990, a toal of 18 technical assistance personnel had been assigned to LWSC by GIZ under the project. It is noteworthy that GTZ had been financing technical asistance positions at LWSC since 1983 (under the first water supply project) and had therefore been able to provide necessary continuity. 16. The technical assistance team got fully in place by March/April 1986 and, despite very difficult country conditions, were able to achieve qtute a lot -  - 6 - perhaps most significant of which were impro-ements, albeit short-term, in financial discipline within LWSC (para. 22). Paragraphs 31 through 32 further highlight the challenges which limited the team's accomplishments during implementation. On December 31, 1987, the technical assistance program, twice exempted from Bank's suspension of funds to Liberia, was terminated, following a decision by the Bank Group. Notwithstanding, the GTZ team continued its work with LWSC through Match 1990. Procurement 17. Procurement was fully executed by end August 1987 Chemicals, vehicles, meters, field equipment, pipes and fittings, communication equipment and meter repair equipment and accessories weru procured amounting to about $1.5 million (100% financed by IDA). Local counterpart funds needed for additional purchases remained in short supply or unavailable during the project. Physical Works 18. Although the materials procured with IDA funds were insufficient for the scope of the task, they turned out to be useful to the technical assistance team and their counterparts in cartying out limited works. LWSC was thns able to repair the most seriously deteriorated sections of its system: (i) a 16" Freeway main; (ii) sections of a 36" transmission main; (iii) the 12" Airfield main; and (iv) rehabilitation of the City Reservoir. With a distribution system, parts of which only worked intermittently, and limited qualified and committed manpower, not much could be done to stem the growing levels of unaccounted-for-water (estimated at about 65%) partly caused by the number of illegal connections which continued to drain the system. Standpipe Privatization 19. A pilot program of privatization of standpipes launched July 23, 1985 showed positive signs initially but had to be curtailed because of shortage of counterpart funding. Had the counterpart funding been forthcoming, LWSC could have been relieved of its responsibility for standpipe maintenance thereby stopping another drain on its resources. F. Project Results Financial Performance 20. Audited financial statements for LWSC for the project period (1986- 1989) ar ..ot available. It has been difficult to finid sufficient consistent data from which to derive unaudited financial statements for those years. As a result, it has not been possible to determine the performance of LWSC vis-a-vis important targets set at appraisal, such as reduction in the operating deficit, the role of sewerage in the  - 7 - operating deficit, the value of its assets, and the change in the equity base of the company. The observations which follow have been based on financial data in available monthly progress reports. 21. Annex Table 4 shows a steady improvement in cash collections of LWSC over the three-year period 1987-1989, but these revenues, averaging about $3.6 million annually, were far below appraisal expectations of about $11 million annually. One can safely assume that after salaries were paid (and for several months LWSC was in arrears in salary payments) there was little left for maintenance. This assumption has been supported by the progtess reports of the technical assistance team. 22. To achieve these marginal gains, a considerable amount of financial and operational discipline had to be injected into the LWSC through: (i) restructuring of the commercial department; (ii) staff cuts from 640 to less than 450 (although the target of 400 remained elusive); (iii) producing monthly financial management reports on a regular basis; (iv) converting LWSC to a proper accrual basis system for inventories; (v) bringing accounts up to date; and (vi) training of Liberian counterparts in financial procedures and management. 23. It was expressed in supervision reports that LWSC's cash collections could have been further improved if agreement had been made early on a program, for example, for purging its accounts receivable data of erroneous entries and uncollectible accounts, restructuring the tariff, and billing consumers based on actual usage. More work could have been done to identify the numerous illegal connections and take the necessary corrective action. It had been estimated that illegal connections numbered 5,000 or 25% of total registered connections at the start of the project, and the situation grew progressively worse. Rate of Retum 24. An economic rate of return was not calculated at appraisal as it was then felt that the project with its very limited investments in physical assets did not lend itself to such a calculation. The project was justified on the basis on unquantifiable benefits, including reduction in morbidity and mortality rates as a result of a more reliable supply of safe water and improved accessibility to low income groups. Based on infornation contained in an inspection report Aj, project assumptions about unquantifiable benefits turned out to be overly optimistic. There was evidence in 1989 that the water quality had deteriorated considerably because of j/ An inspection report dated February 9, 1990, on the White Plains Treatment Plant, prepared by a US consulting firm at the request of LWSC, highlighted the need for urgent repairs and rehabilitation. It recommended that LWSC secure international financing on an emergency basis to assess the rehabilitation work needed to bring the plant into proper operating condition and to start work shortly thereafter.  - 8 - lack of counterpart funds and foreign exchange to purchase needed chemicals, reliability was undermined as services were frequently interrupted, and there is no evidence that the project was able to improve the poor water supply situation in low- income residential areas. Trawna 25. A manpower training specialist provided under the project came up with useful recommendations for a new organizational structure for LWSC. A new pay and benefits scheme was implemented together with a staff performance appraisal scheme; policies on retirement and redundancy were agreed upon and also established. Staff received on-the-job, in-country as well as overseas training. Physical Works 26. Only a very limited amount of physical works could be done under very stringent financial circumstances both in the countty and in the LWSC. At the White Plains Treatment Plant, for example, a new high lift pump was bought and installed and the old pump removed. Repairs wer also done to improvc, filters; a lime feeder was repaired and chlorination levels maintained. All outstations were repaired to function at very basic levels. Because of the need for constant rehabilitative and preventive maintenance, they could only be operated for 4 to 5 hours per day due to unreliable electricity supplies or due to shortage of funds to purchase fuel for standby generators. Repairs at the vehicle and meter repair workshops were hampered by non- availability of spare parts. G. Project Sustainability 27. Sustainability has to be viewed in the light of (i) whether the investment has been worthwhile; and (ii) whether the investment could be sustained. As the country economic situadon did not improve, and it appears to have worsened during implementadon, the GOL could not or would not meet its financial obligations to LWSC. Indications are that the GOL made no attempt to follow IDA advice on ways to support the project and LWSC through, for example, offsetting its debt with LWSC and other parastatals (para 30). As a result, LWSC did not have the counterpart funds for the project, let alone to continue the limited maintenance programs establiMhed thereunder. It was also expressed in progress reports by the technical assistance team that the project addressed only the superficial problems, having been unable to devote funds so badly needed to rehabilitate, for example, the transmission lines, and carry out other major repairs and replacement to safeguard LWSC's assets in the longer term. While the work of the technical assistance team proved to be useful in insdlling operational and financial discipline into LWSC, indications are that their work under the project is unLikely to be sustained due to country conditions.  H. IlA erformance 28. Within the boundaries of the project it appears that MDA had limited successes. IDA was able to convince the GIZ team of experts to act in an executive rather than advisory capacity (para. 11) in LWSC, which turned out to be helpful, particularly to the counterparts in the finance department. ]DA was also instrumental in establishing and maintaining a very productive working relationship with the implementing agency and GTZ. In terms of follow through, IDA's performance was adequate; an average of about two missions per year visited the LWSC, during which action plans were drawn up and monitored quite closely. At the same time, however, the task appeared to have had little or no chance of success without adequate government support. I. Borrower Performance 29. LWSC performed no worse than could be expected given the very unfavorable macro-economic climate in Liberia, GOL's serious Lquidity problems, the very poor financial condition of the company, and the inefficiency which permeated all aspects of its operations. Approximately 30% of LWSC's revenues were derived from the GOL, but the GOL was unable to make any of these payments. In addition, a significant proportion of the company's arrears (about 40%) were due to non-payment by the government. Despite IDA's frequent recommendations to seek an offsetting arrangement between GOL, Liberia Electricity Corporation, and LWSC, as they were all debtors of the other, LWSC took no action. 30. On the positive side, marginal changes became apparent in the performance of the Borrower with the support of a very energetic team of technical assistance experts and IDA, and improvements, albeit short tern, were made in its financial systems, staffing levels, operational efficiency and its organizational structure. J. Consulting Services 31. Consulting services were carried out largely by GTZ acting as executing agency. Based on the contract entered into between the LWSC and GTZ on December 18, 1985, GIZ recruited a total of eighteen (18) consultants to support LWSC during the period 1986-1990. Generally, these experts were successful in (i) improving installation of zonal meters and repair of valves; (ii) completing assessment of the White Plains Water Treatment Plant and rehabilitation of some equipment; (iii) assessing the carrying capacity of the transmission system; (iv) improving financial management; (v) completing the fixed assets register up to 1985/86; and (vi) introducing a manual stores accounting system. Counterparts were also trained. 32. Performance of the experts was mixed. It was unanimously agreed that the financial controller and chief accountant introduced steady financial management improvements into LWSC. At the same time, however, progress in the technical areas  - 10- was hindered largely by the liquidity problems of the GOL and the overall difficult macroeconomic context of the country which led to a variety of problems, including: (i) di Wubdo aInd JnmiMId: lack of funds to purchase proper equipment, tools and spare parts; (ii) vehicle workhps: poor quality of spare parts available locally compounded by the difficulty In procuring the same through LWSC's cumbersome purchasing system and procedures; (iii) White Plains Water Treatment Plant: lack of funds to provide the necessary rehabilitation works whose cost was much higher than the funds available; and (iv) outstations: limited quantity of tools and spare parts and insufficient funds to replace old assets. K. Poject Documentation and Data 33. The project generated numerous monthly and quarterly progess reports which were useful in the preparation of this PCR.  - 11 - PROJECT COMPLETION REPORT REPUBLIC OF LIBERIA SECOND WATER SUPPLY PROJECT (CREDIT 1563-LBR) PART III. STATISTICAL DATA ANNEX Table 1 A. PROJECT TIMETABLE DATE DATE ITEM PLANNED ACTUAL IDENTIFICATION SSpImbWr 1982 PREPARATION November1982 APPRAISAL May/Jun 1983 NEGOTIATIONS Apri 1984 Docmbr 17-21,1984 BOARD APPROVAL JLdy 1984 Miah 21. 198 SIGNATURE Odober21. 198S EFFECTIVENESS May 31.1986 October 1S. 1986 CLOSING DATE Domber 31, 1990 COMPLEnON DATE December 31. 1989 B. MISSION DATA STAGE OF NO OF SPECIALTIES PROJECT CYCLE DATE DWRATIONSTAFF STAFFWEEKS REPRESENTED RATINGS IDENTIFICATION SEP 1982 PREPARATION NOV 1982 1.0 2 2.0 FA, SAN ENO PREAPPRAISAL JAN 1983 2.0 1 2.0 SAN ENS PREAPPRAISAL APR 1083 0.6 2 1.0 FA, CONS APPRAISAL MAY 1083 2.0 3 8.0 ENG, FA. EC POSTAPPRAiSAL NOV 1983 0.6 2 1.0 FA. ENS PRE NEGOTIATIONS FEB 1984 1.0 4 4.0 ENO (2). TR, FA PRE NEGOTIATIONS OCT 1984 1.0 2 2.0 FA. ENO PREBOARD MAR 1986 1.0 2 2.0 ENG. FA SUBTOTAL 9.0 20.0 SUPERVISION NOV 1986 1.0 1 1.0 ENG SUPERVISION FEB1986 1.0 1 1.0 FA 2,1,2.2 SUPERVISION OCT1986 0.5 2 1.0 FA, ENS SUPERVISION FEB1987 1.0 2 2.0 FA, ENS 2,1.22 SUPERVISION OCT1987 0.6 2 1.0 FA, TR.SPEC. 3.1.2.2 SUPERVISION NOV 1987 0.6 1 0.6 ENS SUBTOTAL 4.56 6. TOTAL 13.6 26.6 _____u____ .uU Uuwuwu.. m.~ In..nmununamU Uu.uS3inui  - 12 - ANNEX Table 2 PROJECT COMPLETION REPORT REPUBLIC OF LIBERIA SECOND WATER SUPPLY PROJECT (CREDIT 1563-LBR) ACTION PLAN (Actual vs SAR Expectations) .......... .. .......... _ ... ........ . ............. ....................... e.. ._. ..... . ........ .... ... ... __........ .... ........................................... ............ ..........._ _ Duration Target Date Action (months) Source Remarks ............................................................................................................................ . ..... .. ........................ Feb.28,1985 Financial controller 36 GTZ Met; a total of 18 staffed July 15,1985 Water engineer 36 GTZ were deployed In LWSC during July 15,1985 Distribution engineer 36 GTZ the period 1986-1990. July 15,1985 Training Specialist 12 GTZ Feb.28, 1985 Accounting advisor 24 GTZ Feb.28,1985 Elect/mech. technician 24 GTZ Feb.28,1985 Vehicle workshop Super. 18 GTZ Dec.31,1985 Analysis of LWSC O & M Complied with. needs Jun.30,11986 Action program for Action program not reducing unaccounted for Implemented water to 40% by 1987 and to 30% by Dec. 1969. Dec. 31,1985 Program for billing and Complied with. collection June 30, 1985 Reduce staffing to 550 Partially compled with. June 30, 1986 Reduce staffing to 500 June 30, 1987 Reduce staffing to 450 June 30, 1989 Reduce staffing to 400 Jan. 1, 1986 Second tarff adjustment Mar. 31, 1986 Automated general ledger Complied with. accounting system Aug.31,1985 Training needs analysis Complied with. Dec. 31,1985 Develop program to Program prepared but not strengthen In-house Implemented training capability June 30, 1985 Prepare phased plan for Plan prepared but not Insuring all assets Implemented NOTE: While most of the required steps were taken they were not sustained. For example, by 1989 LWSC had started Indiscriminate hiring again; LWSC's O&M needs were studied, but there were no funds for implementation of the findings.  - 13 - ANNEX Table 3 PROJECT COMPLETION REPORT REPUBUC OF UBERIA SECOND WATER SUPPLY PROJECT (CREDIT 1563.LBR) MONITORING INDICATORS FY85 FY88 FY87 PROJ ACTUAL PROJ ACTUAL PROJ ACTUAL OPERATIONAL Water Produced (mg) 5,402 4,980 5,672 5,795 5,956 6,895 Water Blited (mg) 2,917 2,386 3.347 2,158 3,812 2,291 Unaooounted for water (%) 48 52 41 63 36 67 ConnecIons (a) Water 17,500 17,300 18,500 17.600 20,000 17,900 -WoRdng neters 7,700 3,700 10,000 3,100 12100 3,100 - DefecUve meters 5,100 3,500 5,100 4,300 4,600 4,500 -Unmetered 1.700 10,100 1,900 10,200 2,300 10,300 - Illegal 3.000 n.a. 1,500 n.a. 1.000 n.a. (b) Sewer 4,000 2,500 4,100 2,400 4,200 2,700 Colection#ing (%) (a) Private 70 54 80 57 84 61 (b) Government 100 0 100 8 100 0 Number of Employees 550 520 550 445 450 439 FINANCIAL Operating Ratio (bef. deprec.) 1.08 1.00 1.20 1.00 1.25 n.a. Operating Ratio (after deprec) 0.76 0.73 0.90 0.72 0.96 n.a. Current Ratio 1.13 0.44 1.36 0.50 2.23 n.a. Outstanding Debt (US$ mil) 20.1 18.6 19.5 18.2 20.2 n.a. Source: LWSC Progress Report, Janualy 1-March 31,1988  - 14 - ANNEX Table 4 oROJECT COMPLETION REPORT REPUBLIC OF LIBERIA SECOND WATER SUPPLY PROJECT (CREDIT 1 663-LBR) SELECTED PERFORMANCE INDICATORS .... ... ,+.................. ...... ......................................._. ..................... .... . .. ..._. . . ............ . _ Monthly Monthty Monthly Avg for Avg for Avg for CATEGORY 1987 1988 1989 .. _._... ........ ............... ._. __.._................ _._. .. _ .... ... .. . .... ...... .. Cash collected ($) 11 259,8635 293,633 342,844 No. of Meters Installed 12 n.a 129 20 No. of Bills delivered n.a. 17,554 18,910 No. of Dlsconnections 1,99 2,785 2,713 Revenue from disconnections ($) 47,667 53,701 78,486 No. of Waming Notices sent 881 868 858 Revenue from Warning Notices (S) 21,500 16,916 22,853 Unaccounted-for-water (%) 67% 66% 65% Arrears ($mDlbon) 25.00 25.74 27.82 - of which Govt arrears (OA) 39% 35% 36% NOTE: Due to unavailability of complete data tor each year, the average for 1987 Is based on data for 7 months; 1988 for 12 months; 1989 for 10 months. 11 Revenue collection target was set at a minimal $326,500wmonth. As the evidence suggests, LWSC made steady progress towards achlevement of the target. 12 By August 1988 the supply ot meters had dried up; faulty meters could not be repaired because of a lack of spare pans.  - 15 - ANNEX Table 5 PROJECT COMPLETION REPORT REPUBLIC OF LIBERIA SECOND WATER SUPPLY PROJECT (CREDIT 1563-LBR) DISBURSEMENT PERFORMANCE APPRAISAL EXPECTATIONS ACTUAL RESULTS (in SDRs) (In US$) Cumul. Cumul. Each Cumu- Diab. Each Cumu- Disb. FY Qtr. Qtr. lative (%) Qtr. lative (%) 1985 4 0.45 0.45 9% 0.00 0.00 0% 1986 1 0.68 1.13 23% 0.00 0.00 0% 2 0.19 1.32 26% 0.00 0.00 0% 3 0.20 1.52 30% 0.00 0.00 0% 4 0.03 1.55 31% 1.03 1.03 27% 1987 1 0.03 1.58 32% 0.49 1.51 40% 2 0.10 1.68 34% 1.51 3.02 81% 3 0.19 1.87 37% 0.22 3.24 87% 4 0.20 2.07 41 % 0.20 3.43 92% 1988 1 0.80 2.87 57% 0.30 3.74 100% 2 0.03 2.90 58% 3 0.27 3.17 63% 4 0.18 3.35 67% 1989 1 0.90 4.25 85% 2 0.22 4.47 89% 3 0.13 4.60 92% 4 0.29 4.89 98% 1990 1 0.05 4.94 99% 2 0.05 4.99 100% 3 0.01 5.00 100%  - 16 - PROJECT COMPLETION REPORT ANNEX Tabe 6 REPUBLIC OF ULERIA SECOND WATER SUPPLY PROJECT (CREDIT 1563.LBR) PROJECT COSTS (US$000 Projeot Cost - SAR Prot Cost - Actual Loo Forelgn Total Local Foreign Total Technical AsIstan 126 2Z8 2,524 0 1,796 1,796 Manpower Development & Training 18C 110 290 %I Studls and D"glns 110 616 626 11 505 516 Aocountng Sysems 5 45 50 Mgt Studies 6 31 37 Fixod Asset Revaluaton 20 80 100 GmundwaterStudles 15 35 50 11 0 11 Engineering DesIgn 30 180 210 Conauoton SupervsIon 34 145 179 Equipment and Suppfles 95 970 1,085 21 1,674 1.695 Acoountng Systoms 15 105 120 Communications Equipment 0 100 100 Meter Repair Shop 0 10 10 Motor Vehide Repair Shop 20 110 130 Vehides and Truncs 15 245 280 Field Equlpment 5 70 76 Water Treatment Plant 40 80 120 ChemIcals 0 250 250 Distbution and Transmission 965 3,771 4,738 541 0 541 Standplp. Kiosks 80 40 100 Valves, Hydrants, S/pipe Repair 25 95 120 Zonal Meters and InstaDlatlon 15 75 g0 Repair of TransmissIon Valves 20 80 100 Servle Meters and Spare Parts 0 284 284 House Connections & Spar Pipes 0 518 518 Pipe, Ffttngs - Dtibution 35 e5s 690 Laying of Pipe 200 634 834 Distribution Storage 540 1,280 1,600 Storage Piping 70 13s 200 Total Bse Cost 1,478 1,765 9.241 573 3,976 4,548 Contingencies Physcal 127 401 528 Prio 373 1,828 2,201 TOTAL PROJECT COST /2 1,976 9,994 11,970 673 3,976 4,548 Actual dlsbursements for this project by the GOL through 1989 have been reoorded as $573,055. /1 Cost of Studies Included with Technicsi Assistanco. /2 Project costs derived from IDA disbursement data In SORs. Total costs would differ from total disbursements In Annex Table 5 refetbing exchange rate differential between the SDA and the US dollar. Total oosts In this table were oonverted to doflars at the rate of 1 SDR - US$1.3587, prevaiilng at March 21, 1931. Additional project expenditures by GTZ amounted to DM 9.2 millon based on Informatlon provided In Final Project Report, RODECO, vwth oovering lettr dated February 28,1991. __  - 17 - ANNEX Table 6A PROJECT COMPLETION REPORT REPUBLIC OF LIBERi!A SECOND WATER SUPPLY PROJECT (CREDIT 1 3-LBR) ALLOCATION OF CREDIT PROCEEDS . ........ ............... _...... ..... ......_,... ..w. _.... ..... _... ... "_...... ............... .......................... w................ ......................._.._..... PER CREDIT AGREEMENT REVISED \1 ACTUAL ACTUAL CATEGORY 10-21-85 12-31-86 01-31-91 01-31-91 (SDRs) (SDRs) (SDRs) (US$) \2 .--------- -... --..... - -_ -----.... ------------ -------- ................... .... ..... ....... .......... "...... _...... .. .. _.............. ............ ._...... (1) Equipment and Supplies 2,080,000 2,080,000 1,232,122 1,674,084 (2) Civil Works 390,000 390,000 0 0 (3) Consultants, experts, Specialists, training & fellowships 1,990,000 1,990,000 1,322,350 1,796,677 (4) Special Account 50,000 0 0 0 (5) Refunding of Project Preparation Advance 460,000 372,457 372,457 506,057 (6) Unallocated 130,000 267,543 0 0 . _ . - _ _ .S __s _ * @ _ " e ~.... ................. TOTAL 5,100,000 5,100,000 2,926,928 3,976,818 \1 Revisions In December 1986 were necessary to bring about the following changes: (I) An Increase (to 100%) in the % of expenditures financed for category (3) to allow financing of LWSC's annual audits which was done by the local office of an intemational accounting firm. (ii) Category (4) was deleted to reflect current practice in the Bank, i.e. funds were advanced to the special account without reference to a specific category as disbursements were ultimately charged to the appropriate category when the account got replenished. (iii)Category (5) was reduced to reflect the actual amount of the PPF refinancing. \,2 Based on exchange rate prevailing at March 21, 1991, which would not necessarily match the total in Annex Table 5 which was calculated based on the exchange rate prevailing on the dates of disbursement.  - 18 - PROJECT COMPLETION REPORT ANNEX Tabie7 REPUBUIC OF LIBERUA SECOND WATER SLUPLY PROJECT (CREDIT I SSaLBR) STATLIS OF COMPUANCE WITH PROJECT AGREEMENTS IN NOT IN CONDITIONS COMPLIANCE COMPUANCE REMARKS A. NEGOTIATIONS Government d Liea to ornun to nrmbum LWSC X iGOL hod ditdblty for operatlng ddisl makng theme paymemts rsleed to utsWmton to provide to LWSC UBDSa X SubIdIary rWeemat millon d the IDA or*&t - to INt Iffoot sind equity and onlad to LWSC Noeomber 27. i9a U3S2 mHon an tUnys and adxndtI providrg a 6yar grn pwId wth rUfU