Document of The World Bank FOR OFFICIAL USE ONLY Report No.: 18004 IMPLEMENTATION COMPLETION REPORT PHILIPPINES FIRST WATER SUPPLY, SEWERAGE AND SANITATION SECTOR PROJECT (LOAN 3242-PH) June 15, 1998 Rural Development and Natural Resources Unit East Asia and Pacific Region 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. CURRENCY EQUIVALENTS (Peso per US$) Year Exchange Rate 1990 (Appraisal fear) P 22.50 1997 (Completio l Year) P 40.12 (12/29/97) WEIGHTS AND MEASURES I liter (I) = 1.1 quarts (qt) or 0.26 gallons (gal 1 liter per capita per day (Ipcd) = 0.2642 gal per capita per day FISCAL YEAR January 1 to December 31 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank BWSA Barangay Waterworks and Sanitation Association COA Commission on Audit DBM Department of Budget and Management DECS Department of Education, Culture and Sports DEO District Engineering Office DILG Department of Interior and Local Government DOH Department of Health L)PWH Department of Public Works and Highways EACPF East Asia Country Philippines Field Office EAP East Asia and Pacific EASRD East Asia Sector Rural Development FW4SP First Water Supply, Sewerage and Sanitation Sector Project ICR Implementation Completion Report JICA Japan International Cooperation Agency LCB Local Competitive Bidding LGU Local Government Unit LWUA Local Water Utilities Administration NEDA National Economic and Development Authority NGA National Government Agencies NGO Non-governmental Organizations OECF Overseas Economic Cooperation Fund O&M Operation and Maiptenance SAR Staff Appraisal Report UNDP/WB United Nations Development Program/World Bank Managers and Staff Responsible Vice Presldent Mr. Jean-Michel Severino Director Mr. Vinay K. Bhargava Sector Manager Geoffrey B. Fox Task Manager Mr. Wael Zakout FOR OFFICLAL USE ONLY TABLE OF CONTENTS PREFACE EVALUATION SUMMARY Project Objectives .................................................... i Implementation Experience and Results .......................................... ........... i Summary of Findings, Future Operations and Key Lessons Learned .......................... ii PART 1: PROJECT IMPLEMENTATION ASSESSMENT A. Project Objectives .....................................................1 B. Achievement of Objectives .....................................................2 C. Major Factors Affecting the Project .....................................................5 D. Project Sustainability .....................................................7 E. Bank Performance ....................................................7 F. Borrower Performance .....................................................8 G. Assessment of Outcome .....................................................9 H. Future Operation .....................................................9 I. Key Lessons Learned .................................................... 10 PART II: STATISTICAL TABLES Table 1: Summary of Assessment .13 Table 2: Related Bank Loans .14 Table 3: Project Timetable .15 Table 4: Loan Disbursements: Cumulative Estimated and Actual .15 Table 5: Key Indicators for Project Implementation .16 Table 6: Key Indicators for Project Operation .23 Table 7: Studies Included in the Project .26 Table 8A: Project Costs. ............................................ 27 Table 8B: Project Financing ............................................ 28 Table 9: Economic Costs and Benefits ................ ............................ 28 Table 10: Status of Legal Covenants ............................................ 30 Table 11: Compliance with Operational Manual Statements ............................ ..... 32 Table 12: Bank Resources: Staff Inputs ............................................ 32 Table 13: Bank Resources: Missions ............................................ 33 APPENDICES A: Mission's Aide-Memoire B: Borrower Contribution to the ICR C: Consultant Contribution to the ICR D: Map of the Philippines 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. PHILIPPINES FIRST WATER SUPPLY, SEWERAGE AND SANITATION SECTOR PROJECT (LOAN 3242-PH) PREFACE This is the Implementation Completion Report (ICR) for the First Water Supply, Sewerage and Sanitation Sector Project (FW4SP) in the Philippines, for which the Loan 3242-PH in an amount equivalent to US$85 million was approved on July 9, 1990 and made effective on January 15, 1991. A restructuring of the loan resulting in a decrease in the amount of the loan to the equivalent of US$58 million was requested by the Government of the Philippines on June 17, 1993 and agreed by the Bank on November 12, 1993. Another US$10.07 million was canceled in FY96 bringing the final amount of the loan to US$47.93 million. The loan was closed on December 31, 1997, twenty four months after the original closing date of December 31, 1995. Final disbursement took place on May 18, 1998 at which time a balance of US$3.23 million was canceled. The ICR was prepared by Mary Judd of the Social Development Unit in the East Asia and the Pacific Region with the help of Steven Matsler, Water Supply Consultant. Contributions came from Cecilia Vales of the Resident Mission in the Philippines, Nancy Barrett of the Rural Development and Natural Resources Sector in EAP, and Loreta Rufo, Financial Analyst Consultant. It was reviewed by Vinay Bhargava (Country Director, EACPF), Geoffrey Fox (Manager, EASRD), Jeffrey Gutman (EASTR), Wael Zakout (EASRD) and Erdogan Pancaroglu (former Task Manager). The Government and Project Consultant provided their reports and comments that are included as appendices to the ICR. Preparation of this ICR was begun during the Bank's final supervision and completion missions from September 29-October 6 and October 6-22, 1997 respectively. The report is based on material in the project file which includes the Staff Appraisal Report (No. 8143-PH) dated May 31, 1990; the Loan Agreement dated July 9, 1990; Bank supervision reports; and project implementation progress reports. It is also based on discussions with implementing and relevant agencies, donor organizations, non-governmental organizations and participating private sector companies as well as field visits to project sites and a series of consultative meetings in regions, provinces, municipalities and barangays. A major part of the report is based on information gathered in a participatory manner and the findings and recommendations are as much contribution from the Bank as from the major stakeholders including the beneficiaries and local government units. The Bank thanks the Government, the project implementation team of DILG, DPWH and DOH and the project consultants for their valuable assistance in preparing this ICR. EVALUATION SUMMARY FIRST WATER SUPPLY, SEWERAGE AND SANITATION SECTOR PROJECT (LOAN 3242-PH) PHILIPPINES Introduction 1. In 1987, about 37% (21.2 million) of the Philippines' population had no access to safe water and the 1980 census indicated that 44% of the population had no satisfactory sanitation facilities. In 1987, the Government of the Philippines prepared the Water Supply, Sewerage and Sanitation Master Plan of the Philippines 1988-2000 (Master Plan), which placed particular emphasis on accelerated development of the sector in the rural areas. The First Water Supply, Sewerage and Sanitation Sector Project (FW4SP), the subject of this report, was designed to support the Master Plan by providing basic water supply facilities in 37 provinces within 7 regions on the island of Luzon, and sanitation facilities in 75 provinces within 14 regions nationwide. Project Objectives 2 The principal objective of the FW4SP was to assist the Government to meet the basic needs of the rural population through the provision of safe, adequate and easily accessible water supplies, as well as proper sanitation. Secondary objectives included decentralization of Government activities, training of manpower, and a range of social, environmental, and private sector development objectives (e.g., poverty alleviation, women's participation, improved environmental sanitation, and promotion of local manufacture). Implementation Experience and Results 3. Rural water activities under FW4SP were administered by the Department of Public Works and Highways (DPWH), rural sanitation activities were administered by the Department of Health (DOH), and complementary training activities in community development were administered by the Department of Interior and Local Government (DILG). Although the Loan Agreement was signed in July of 1990 and the project formally started in late 1991, a substantial level of physical project activity was not achieved prior to 1992. Because of this long delay, in 1993 the project was restructured and the loan reduced from the equivalent of $85 million to the equivalent of $58 million; in the restructuring, the total number of project targets was reduced by roughly 40%. Later, another US$10.07 million was cancelled bringing the final amount of the loan to US$47.93 million. The original Loan Closing Date of December 31, 1995 was also eventually extended (to December 31, 1997), to enhance achievement of project objectives. 4. By the extended Loan Closing Date, the project achieved most of its revised physical targets. For water supply, 100% of the revised targets were met. For sanitation, 100% of the production targets were met prior to the extended Loan Closing Date; 70% of the toilet bowls were installed and the remainder to be installed under the Government's sanitation program for 1998. Related ii community development activities (i.e., formation of Barangay Waterworks and Sanitation Associations, or BWSAs) were also 100% completed. Given the long initial delays in commencement of meaningful project implementation, the performance of the three implementing agencies is considered satisfactory. 5. Project planning and coordination were affected by several factors. The "top down" approach taken (i.e., utilizing preparation of Provincial Master Plans) to identifying project locations, and slow obtainment of grant funding for this activity, appears to have limited Plan usefulness in assisting the three involved Government agencies to develop their detailed implementation programs. Poor coordination between the three implementing agencies also caused difficulties, especially in early part of the project phase, in particular between the DILG and the DPWH, resulting both in mismatches between targets for community development activities versus construction of water supply facilities, and in the out-of-sequence occurrence of these activities. 6. Some problems were observed with procurement of materials, quality control of facility construction, and long-term maintenance of a substantial proportion of the project facilities. The project's household latrine subcomponent was long-delayed in awarding contracts for the manufacture of plastic toilet bowls, and then further delayed by quality-control problems with the initial batches produced. Project wells, which were originally intended to be mainly constructed under contract by professional well drillers, instead were usually constructed by small, poorly equipped and trained "backyard well drillers", which is felt to have had a particularly adverse effect on the quality of project deep wells. A substantial number of the BWSAs formed under the project were not active and the affected facilities were then maintained by either the barangay council or private individuals. 7. Achievement of the project's secondary objectives was affected by Government attitudes towards both decentralization and private sector development. The enactment of the Local Government Code of the Philippines in 1992 served to substantially promote project-related responsibilities at the Local Government level, particularly with respect to the sanitation component. On the other hand, lack of Government willingness or ability to provide financial support for training of private sector participants (particularly well drillers) resulted in lower quality of facilities constructed, although private sector manufacturing capabilities (particularly with respect to deep well handpumps) appear to have been very well promoted. Summary of Findings, Future Operations and Key Lessons Learned 8. The concept of the project was sound, and the project outcome (as stated in the 1990 SAR) was considered satisfactory, as substantial physical accomplishment of the restructured water supply and sanitation targets was achieved. The sustainability of the full range of constructed and functioning physical infrastructure will be achieved only if the users and their organizations (BWSAs, Barangay Councils, Municipal Government, schools, and private sector groups) are active in operation and maintenance. The findings and the observations of the ICR mission in its limited sampling found that more than half of these groups were not active. The project's Capacity Enhancement Program managed by DILG and implemented by an NGO was a relatively successful attempt to provide the necessary support to enhance sustainability of facilities and organizations. However, due to time constraint this program was focused on only one out of three batches of communities. The operations phase plan for the FW4SP, presented in Part II (Table 6B), emphasizes activities which are intended to provide support to more communities served under the project. 9. The principal lessons learned are summarized as follows: Principles/Design a) Multi-agency type of projects should be avoided; where National Government Agencies are involved, it is recommended that a single agency serve as the executing agency; b) Projects should support decentralization where projects are planned and implemented by the Local Government Units (LGU), National Govermment Agencies (NGA) can provide the executing agency role, Provincial Government can assist with technical assistance, supervision and monitoring, and the Municipality and Barangay should be the focus of implementation; c) Cost recovery principles should be promoted and implementing agencies, i.e., LGUs, should borrow funds for investments and be fully accountable for them; d) Small civil works contracts, such as those under this Project, should be undertaken by LGUs; procurement of all goods can also be handled by LGUs; certain items (e.g., deep well handpumps and plastic toilet bowls) can be procured at the central level to achieve economies of scale and to maintain quality; Preparation e) All Government agencies with both direct and peripheral responsibility to the project should be involved from the earliest stages of project preparation; f) At the beginning of project preparation an institutional assessment should be conducted for the capability and experience of the LGUs. Appropriate and more intensive technical assistance should be provided to the weaker LGUs; g) Planning, designing and implementation of sub-projects by LGUs should be based on need and demand and in close consultation and participation with the community; Implementation h) A supporting environment which will enable LGUs to succeed should be promoted, e.g., simplify procedures, establish mechanisms which will speed implementation, allow procurement by LGUs, develop a proper system of accounting and financial reporting; i) The first year of project implementation should include the preparation of a comprehensive project implementation plan with sub-project proposals from the community, prior to the start of construction; j) Continue to support local private sector manufacturing capability and promote private sector participation in O&M; k) Where appropriate and where skills are available, LGUs should work with NGOs for community organizing as well as contractors in the small physical works; the cooperation between intermediary and local government would require clear definition of roles and responsibilities in all phases of the project and after; iv 1) Utilization of pre-existing community organizations for the operation and maintenance of Level I (point source) water supply facilities should be considered in future project designs; more formal associations such as BWSAs should be promoted only for higher level (Levels II and III) facilities; Supervision m) Full supervision missions should visit the project at frequent intervals in the initial stages of the project, and at other critical periods, with particular emphasis on adherence to financial and procurement policy; n) Strong and appropriate action, such as suspension of disbursements, should be taken in light of delayed audits; and o) The World Bank supervision mission should include a procurement staff from the Resident Mission to undertake field reviews of accounting procedures and physical facilities, at least annually. IMPLEMENTATION COMPLETION REPORT PHILIPPINES FIRST WATER SUPPLY, SEWERAGE AND SANITATION SECTOR PROJECT (LOAN 3242-PH) PART 1: PROJECT IMPLEMENTATION ASSESSMENT A. PROJECT OBJECTIVES Sectoral Background 1. By 1987, about 63% of the Philippines' population had access to safe water. The population unserved by water supply systems, comprising approximately 21.2 million people (primarily rural ) at the end of 1987, depended on water of often doubtful quality from wells, springs, rainwater, lakes, streams and vendors. Likewise, the 1980 census of the Philippines indicated that only about 56% of the population had access to satisfactory sanitation facilities. Of the 17.3 million people still underserved or unserved countrywide, 12.6 million were in the rural areas. 2. In 1987, the Government prepared the Water Supply, Sewerage and Sanitation Master Plan of the Philippines 1988-2000 (Master Plan), which placed particular emphasis on accelerated development of the sector in the rural areas. The First Water Supply, Sewerage and Sanitation Sector Project (FW4SP), the subject of this report, was designed to support the Master Plan by providing basic water supply facilities in 37 provinces within 7 regions on the island of Luzon, and sanitation facilities in 75 provinces within 14 regions nationwide. It succeeded another Bank-financed rural water supply and sanitation project in the Philippines which was underway at the time of preparation of the Master Plan (Rural Water Supply and Sanitation Project, Loan 2206-PH), and was implemented concurrently with other projects which include similar components, including the Rural Water Supply IV Project (OECF), and the UNDP/WB-PHI Project. Similar projects which have recently started or are expected to commence soon include the Rural Environmental Sanitation Project (JICA) and Rural Water Supply and Sanitation Sector Project (ADB). 3. Rural water activities under FW4SP were administered by the Department of Public Works and Highways (DPWH), rural sanitation activities were administered by the Department of Health (DOH), and complementary training activities in community development were administered by the Department of the Interior and Local Government (DILG). Project Objectives 4. Principal Objective. The principal objective of the FW4SP was to assist the Government to meet the basic needs of the rural population through the provision of safe, adequate and easily accessible water supplies, as well as proper sanitation. Specifically, the project aimed at: (a) providing Level I (point source) rural water supply facilities, including shallow and deep wells, spring developments, rainwater collectors, rehabilitation of existing wells, and water treatment units; and (b) providing rural sanitation facilities including household latrines, school and public toilets, 2 sullage removal units, and pilot wastewater disposal facilities. Physical project targets are presented in Table 5A. 5. Other Objectives. Institutionally, the FW4SP aimed to promote: (a) effective community participation for sustainable sector development; (b) development of organizational arrangements for improved operations and maintenance of water supply facilities; (c) decentralization of Government activities by providing Local Government Units (LGUs) with a greater role in planning, implementation and mofiitoring of sector activities; and (d) training manpower in the planning and implementation of water supply and sanitation systems. 6. The FW4SP was also intended to promote achievement of Social, Environmental, and Private Sector Development objectives, particularly the following: (a) poverty alleviation; (b) improved participation of women; (c) reduced pollution; (d) improved health and hygiene; (e) local manufacture of handpumps; and (f) private sector participation in well construction, operations and maintenance. 7. Assessment of Objectives. The objectives were well chosen. They were consistent with the priorities of the Master Plan, and they addressed underlying key issues with respect to institutional strengthening for project sustainability, and broader areas of accomplishment as outlined in the Bank's Country Assistance Strategy for the Philippines. B. ACHIEVEMENT OF OBJECTIVES 8. The FW4SP substantially achieved its major objective of providing safe, adequate and easily accessible water supply, and proper sanitation. It also made a substantial contribution to the Philippines' rural water supply and sanitation sector program as embodied in the Master Plan. Safe and Adequate and Easily Accessible Water Supply and Proper Sanitation 9. Water Supply. The FW4SP originally envisaged the implementation of a total of 25,000 water supply facilities. During the early stages of the project, field investigations revealed that a minimum of 3 to 4 wells would be required in each barangay as opposed to one well per barangay stipulated in the Accelerated Program. Along with long delays in the implementation of the facilities, the Government decided to restructure the project, thus reducing the number of barangays planned to be served from the original project design (from 18,000 to 8,000). Original, restructured, and revised targets are presented in Table 5A. 10. Sanitation. The project restructuring also affected the targeted number of sanitation facilities, primarily through reductions in the number of planned household latrines (from 1,000,000 to 650,000). By the loan closing date, 65% of these targets were met, with virtually all of the remainder being completed by the end of the first quarter of 1998. Most other major project sanitation facilities were substantially achieved prior to the extended loan closing date, including school toilets, public toilets, sullage removal units, and well disinfections. Targets are presented in Table SA. Institutional Aspects 11. Participatory Objectives. Participatory objectives of the project were intended to be accomplished through the formation of Barangay Waterworks and Sanitation Associations (BWSAs). 3 Formation targets were met, although not all of the BWSAs were sustained due to the inappropriateness of the organization for simple Level I facilities (see paragraph 26). A substantial percentage of project water supply facilities are reliably maintained by persons originally trained under the project to assume a BWSA-related function, but now acting as members of a different entity, such as a Barangay Council or Farmer's Cooperative. 12. Decentralization of Government Activities. The project's decentralization objective was substantially affected and speeded up by implementation of the Local Government Code, which went into effect in 1992 and called for the devolution of specific responsibilities to LGUs, including water supply and sanitation. Specific LGU roles with respect to water supply and sanitation programs and projects were further defined by NEDA Board Resolution No. 4, Series of 1994. The mid-project legislation had a substantial effect on sanitation-related activities under the project, which subsequently devolved from the DOH to the respective LGUs at the provincial and municipal levels; however, water supply facilities continued to be constructed under the administration of the DPWH. 13. Training of Manpower. The project was partially successful in achieving its training objectives, with at least 75% of targeted participants receiving training in several areas including well site selection and well construction, design of water supply facilities, operation and maintenance of water supply facilities, and sanitation training. Efforts were less successful in extending the training activities to private sector participants, particularly small ("backyard") well drillers, for which the Government was generally reluctant to extend funds. This is a particular source of concern, as backyard well drillers performed over 60% of the well constructions under the project (Table 5D). The Project, however, appointed an internationally experienced well driller to improve the quality of well drilling by providing on-the-job training to DPWVH District Engineering Offices. This resulted in significant improvements in well drilling. Social and Environmental Aspects 14. Gender Issues. In response to the Government's pledge to provide equal access to women under the project, BWSA pre- and post- formation training was provided to large numbers of women participants, which also resulted in a substantial percentages of women BWSA members (estimated at about 40%). Many occupational roles in the Philippines, particularly in the health and sanitation fields, are already dominated by women. 15. Improved Health and Hygiene. Improved hygiene behavior was observed in barangays where household latrines were constructed using plastic, water seal, pour-flush typw toilet bowls. Educational materials were also distributed to support the sanitary and hygienic use of these facilities. Many of these materials, although fully distributed to the Regional Departments of Education, Culture and Sports (DECS) by DOH, were often subject to long delays in redistribution to the intended end users (primary schools), which would have diminished somewhat the benefits of the facilities, and in particular could have had some effect on the number of observed toilets which failed due to improper sanitation practices. 16. Other Issues. Although difficult to quantify such benefits, the project is considered successful with respect to poverty alleviation and improvement of environmental conditions. It would have indirectly assisted in poverty alleviation by generally improving health conditions, and by reducing the amount of time spent fetching water, thereby making more time available for income- generating activities. Similarly, the project would have accomplished its stated environmental objectives (cleaner homes and community environments; reduced stream pollution; and more rational 4 and prudent water use) to the extent to which original project water supply and sanitation facility targets were met. Private Sector Development 17. The FW4SP was highly successful in fostering the development of private sector manufacturing capability, and considerably less so at promoting private sector construction, operations and maintenance of water supply facilities. 18. Manufacture. Prior to FW4SP, only the shallow well handpumps were produced in the Philippines whereas the deep well handpumps and the plastic toilet bowls were imported. The project promoted and assisted in local manufacturing capability of these items including external quality control mechanisms. Specifications were developed with assistance by the UNDP/World Bank Water Supply and Sanitation Program conforming to international standards. Quality of the locally produced handpumps and plastic toilet bowls were tested and verified by external quality consultants. A total of 1,900 deep well handpumps or 71% of the total project requirements and 100% of plastic toilet bowls (650,000) were locally produced for FW4SP. All project shallow well handpumps with improved specifications were also locally manufactured. 19. Availability of spare parts for newly introduced, locally produced products was seen as a possible impediment to project sustainability. The most commonly used spare parts for the deep well handpumps (cups) are obtainable in the market, although generally of low quality. Many of the project beneficiaries appeared not to be informed that a wide variety of high quality deep well handpump spare parts are still available at relatively low cost from the manufacturer; this was verified by the ICR mission. 20. Construction. Project school toilets and public toilets were constructed by private contractors who bid for the works in accordance with the Bank's Local Competitive Bidding (LCB) procedures, as stipulated in the project design. The project design had also intended for private sector involvement in well construction through LCB packaging of contracts for professional well drillers, with a minimum of approximately 100 wells per contract. Such large contracts proved impractical, and were therefore never implemented. The DPWH either constructed project wells using its own District Engineering Office (DEO) well drilling personnel, or resorted to much smaller labor-only contracts (10-20 wells apiece) for implementation by "backyard" well drillers who were furnished well construction materials by the DPWIH. These small well drillers were often poorly equipped and trained, and therefore unable to properly construct the wells according to project specifications. 21. Maintenance. Private sector maintenance of handpumps was observed in some areas of the project, where locally run shops were reported to be performing handpump repairs. However, the intended nature of private sector involvement was not clearly defined at project appraisal, and there was no systematic program developed under the FW4SP to foster such widespread participation. DILG's Capacity Enhancement Program, implemented in the latter part of 1997, utilized NGOs to foster private sector handpump repair. Additional monitoring conducted during the operations phase of the project should serve to assess the longer term success of this activity. 5 Economic Analysis 22. At project appraisal, the economic rate of return on the project's water supply component was estimated at 8% (weighted average) based on a comparison of the then-estimated production cost of water and, as a proxy for the water's value, the average unit -cost of water developed under the Government's Accelerated Water Supply Program. At project closing, updated water production cost figures were provided by DPWH (capital costs) and DILG (operation and maintenance costs), and the water's value was re-estimated based on a current range of unit prices established under the UNDP/WB-PHI Project, resulting in a recalculated weighted average economic rate of return of 5%, or lower than at appraisal. However, a sensitivity analysis indicates that the weighted average might reasonably be expected to vary from as low as 1% to as high as 14%. The estimated financial rate of return has not been calculated in view of the project's perceived failure to levy charges adequate to cover operation and maintenance costs and debt service, and its unquantifiable social benefits. C. MAJOR FACTORS AFFECTING THE PROJECT Project Planning and Administration 23. Provincial Planning Activities. Project design considered that implementation of major activities would be undertaken by the three Government agencies (DPWH, DOH, and DILG) in a synchronized manner, in accordance with the Provincial Water Supply, Sewerage and Sanitation Sector Plans. Effective usage of the Plans and synchronization of Plan-related activities both proved to be problematic. Adoption of the Plans (in the first 8 provinces covered under the project) was a condition of loan effectivity, and the Government took considerable time in locating grant funding for plan preparation. The tight time frame under which the Plans were therefore produced appears to have resulted in a lack of verification of data sources. Technical expertise in plan preparation was focused on demand allocation rather than source identification, and plan accuracy did not extend below the municipal level. The result of these factors appears to have been that, although Plans were prepared in close consultation with DILG and with Local Government Personnel, the Plans themselves did little to directly assist these personnel in effectively determining specific project targets. 24. Interagency Coordination. Poor coordination between the national implementing agencies and the field implementors caused difficulties in the early part of the project phase. In particular, miscoordination between the DILG (community development) component and the DPWH (construction of water supply facilities) component resulted both in mismatches between targets for BWSA formation versus construction of water supply facilities, and in the out-of-sequence occurrence of project related activities (e.g. water supply facility construction proceeding ahead of BWSA formation in many instances). Lack of synchronization of agency budget releases was often blamed for this, with requests and releases of individual project-related budgets for each agency being separately processed through the Department of Budget and Management (DBM). 25. Local Government Code. With the enactment of the Local Government Code, DOH lost direct control over implementation of many field activities at the municipal level, such as those of the Rural Sanitary Inspectors who facilitated construction of the household latrine units. In isolated instances, this appears to have resulted in the priorities or activities of such personnel being diverted from their assigned duties, and in cases of misuse of equipment procured under the project. DILG's role was expanded in respect of its mandate to strengthen local government capability, and their 6 central office was subsequently restructured. Provincial Action Officers responsible for coordination of DILG's project-related local government strengthening role remained based at the central office, and appear to have been hampered somewhat in their efforts to coordinate field activities due to constrained schedules and travel budgets. Despite the observed problems with coordination and utilization of services and equipment at the local level associated with the mid-project shift in administrative responsibilities, the LGUs themselves generally appear to be very satisfied with the increased level of autonomy, which has brought more efficient delivery of services and has allowed project implementation to be more appropriately tailored to suit local conditions. 26. User Acceptance. At the local level, sustainability of water supply and sanitation improvements is dependent upon acceptance of responsibility; such degree of acceptance varied widely from one BWSA to another. Data collected in the field for some areas of the project by DILG (Table 6) would indicate that, on average, about 70% of the BWSAs formed under the project continued to function as intended at the close of the project. The wide variation in reported results from province to province questions the accuracy of the data; ignoring the results of the two regions reporting the highest rates of success (e.g., two provinces report a failure rate of 0%) results in a calculated rate of success of about 50%, which may be more realistic and is in any case still a considerable improvement over the estimated success rate (25%) of the previous Bank-funded sector project. 27. Sustainability of school and public toilets was also adversely affected in many instances by lack of a proper organization to operate and maintain the facilities, or low degree of commitment by the responsible entity. Not surprisingly, the most successful public toilet facilities appeared to be located in areas which were served by a private entity such as a church or a market association. Such facilities were able to collect fees for use, which were then used to purchase water and maintenance of the units, in some instances even resulting in substantial profits which could be used to enhance the facilities or area served by the toilet. In many other cases, LGUs which were given toilets did not honor contracts or pledges to provide water and otherwise maintain the toilets, and the facilities soon fell into disuse. Degree of usage of school toilets was also highly variable, with many facilities well maintained and used, others seldom used or unused and some facilities not functioning because of blocked septic lines. Financial Reporting 28. Financial reporting by some of the implementing agencies, particularly on operations and expenditures relative to the project, was inadequate. Some audit reports were late by more than one year. It was reported that some project staff appeared not to know what was expected by the Bank, or even by their own auditors. Lack of staff dedicated specifically to FW4SP financial aspects appears to have partly caused the problem; another factor may have been the result of staff changes. The lessons given from the previous Rural Water Supply and Sanitation Project in this respect appear not to have been taken into account. Procurement and Quality Control 29. Implementation of Household Latrines. The project subcomponent initially suffered several long delays relating to procurement and quality control, and therefore did not achieve substantial results prior to mid-1995. The initial intended procurement of 450,000 toilet bowls was conducted by the Department of Budget and Management Procurement Service (DBM-PS) rather than by the DOH. 7 DBM-PS deferred award of contract after bids were submitted by four prospective manufacturers, which ultimately resulted in a court case filed by one of the four bidders, and a subsequent further delay of approximately one year. The end result was the entire procurement was rebid in two batches. Once the procurement was rebid and finally awarded, there were further delays associated with initial quality control problems, including problems with tolerances in the P-trap. However, the plastic bowls produced were of high quality and conforming to standards and specifications developed by the UNDP/ World Bank Water and Sanitation Program as part of the appropriate sanitation technology for rural applications. Finally, in many instances the latrines themselves were not installed according to project specifications, the most frequently reported problem being the lack of a vent pipe (about 40%). 30. Quality of Well Construction. The failure to get well equipped and qualified professional drilling contractors involved in the project is believed to have adversely affected the finished quality of many of the project wells, particularly the harder-to-construct deep wells. For most of the wells there was also little monitoring of important topographical, geological or hydraulic/ hydrologic data. Estimates of the failure rate of project wells range from below 10% (shallow wells, reported by DPWH) to over 30% (deep wells, reported by DILG). The relative proportion of reported failures of deep wells versus shallow wells (about 2:1 for both agency-specific sets of data) is probably a more reliable indicator than the gross figures, as both sets of data are incomplete, and random checking revealed numerous inconsistencies between the two sets. The approximate gross failure rate is fairly consistent with the BWSA sustainability figures, if it is considered that a certain number of facilities are maintained by entities other than BWSAs. D. PROJECT SUSTAINABILITY 31. Achievement of sustainment of project benefits at the community level will require maintaining functional BWSAs or practical alternatives to the BWSA structure, which will promote regular maintenance of the facilities. The results of the rapid assessments conducted during Bank supervision provide indications of the effectiveness of using an intermediary such as an NGO to assist LGUs in developing viable BWSAs who would be responsible for the sustainable operation and maintenance of water facilities provided under FW4SP. 32. Sustainability of project benefits will also require local government to maintain facilities built in public places (schools, markets, health laboratories). The findings and the observations of the ICR mission in its limited sampling found that more than half of these facilities were not well maintained. The project's Capacity Enhancement Program managed by DILG and implemented by an NGO was a relatively successful attempt to provide the necessary support to enhance sustainability of facilities and organizations. However, due to time constraints this program was focused on only one out of three batches of communities Application of an effective, long-term operations phase plan (Section H), to be conducted with the assistance of the three implementing agencies, will be required. Periodic support by the Bank will also be required, to advise and assist with each specific action area. In the future, Bank-financed sector projects in the Philippines may wish to incorporate aspects of operational assistance to previous projects into the project designs. E. BANK PERFORMANCE 33. Identiflcation and Preparation. The Bank's performance during identification and preparation of the project was satisfactory, with substantial and adequate inputs having been provided 8 by Bank Staff during these phases. The multi-implementing-agency approach adopted, which had been used with moderate success in the Philippines in an earlier Bank-financed project (Rural Water Supply and Sanitation Project, Loan 2206-PH), did not turn out to be the appropriate arrangement under FW4SP. Problems which later occurred in respect of project coordination might have been partially averted by more closely involving Government agencies with peripheral project-related responsibilities, in addition to the primary implementing agencies, from the earliest stages of preparation. 34. Appraisal. Performance during Project Appraisal was considered adequate, although the Bank failed to foresee a number of issues which later became problematic in the implementation of the FW4SP: (a) reluctance of the Government to commit GOP or loan funds for planning-related activities or private sector training activities; (b) relatively low level of commitment of BWSAs to operate and maintain Level I water supply facilities; and (c) lack of Government support for private sector contracting of project water supply facilities. Item (b) is particularly significant in view of similar observed failures under the earlier Rural Water Supply and Sanitation Project. 35. Supervision. Supervision performance was generally considered satisfactory. The records indicate that the Bank was fairly prompt in responding to most project developments and to the needs of the implementing agencies and in responding to problems relating to financial reporting and procurement. In the last 18 months of the project, there was greater focus on field supervision which brought the project to a more successful completion. F. BORROWER PERFORMANCE 36. The three implementing agencies (DPWH, DOH, DILG) performed reasonably well, considering the extensive staffing changes which occurred during the project, and the mid-project change in organization and responsibilities brought about by the Local Government Code. Problems observed due to lack of coordination and synchronization between the agencies could have been partly averted by better planning and more effective use of the Project Coordinating Committee. However, many such problems would almost appear to be inherent in the three-agency design of the FW4SP. Observed deficiencies in financial reporting are somewhat harder to defend. 37. On account of delayed submission of Audit Reports by DPWH from years 1992 up to 1994, the Bank effective October 15, 1995 suspended disbursements for eligible expenditures under Categories 1, 2a, 2b, 2c and 2e of Schedule 1 of the Loan Agreement which are all parts of the Water Supply component of DPWH. The disbursements for the rest of the components implemented by DOH and DILG were not suspended. The Commission on Audit (COA) Audit Reports for years 1992 and 1993, which were finally submitted to the Bank in November,. 1995, revealed serious discrepancies in the accounts of DPWH in connection with undelivered supplies and materials for which payments were made by the Bank since 1992 totalling to about $2 Million. The audit reports traced the causes of the findings largely to poor inventory and financial controls. 38. Because of the seriousness of the audit findings, the Bank requested DPWIH to take action on the findings and recommendations of the audit reports and required the government to refund the payment for undelivered materials before considering the lifting of suspension and further extension of the loan. The said amount was subsequently refunded to the Bank while extension of the closing date was not made applicable to the affected DPWH rural water supply component which was terminated on February 16, 1996. 9 39. Although support for achievement of the main project objectives was good, less attention was given to achievement of the FW4SP's institutional and private sector development objectives. In particular, the failure to train or certify private sector well drillers, or to pursue construction of project wells utilizing professional well drilling contractors, were seen as major shortcomings. The Local Government Code gave strong support to the project's decentralization objective, but also served to highlight many instances of the LGUs' inability or unwillingness to implement the project according to its design, and of the National Agencies' failure to provide strong technical support when needed. G. ASSESSMENT OF OUTCOME 40. The project outcome is considered satisfactory, as substantial accomplishment of the restructured water supply and sanitation physical targets was achieved. The best physical accomplishments in gross percentages were in development and rehabilitation of water sources, with 100% completion of the restructured targets having been achieved. The least successful physical result was in the completion of the wastewater treatment units, where only 44% (representing 44 units) of the target were able to be constructed prior to the final loan closing date, although there is still a commitment by local government to install the remaining 56 units in certain parts of Metro Manila, beyond the close of the project. The wastewater treatment activities is an on-going pilot study of DOH. Progress in the household latrine subcomponent, which suffered greatly in the early stages of the project, was excellent in the later stages of the project, with the entire manufacture and delivery of plastic toilet bowls being completed prior to the loan closing date. Seventy percent of the toilet bowls were installed at the end of December 1997 and the remainder will be installed under the Government's sanitation program for 1998. 41. The lessons learned from the foreign-funded projects, particularly FW4SP, have led to significant policy changes and improved practices for both the Government and the Bank, such as: a) NEDA Board Resolution No. 4, 1994 amends NEDA Board Resolution No. 5, 1989 and allows LGUs to implement all levels of water supply projects; b) in 1995 DBM instituted the General Allotment Release Order (GARO) and the Special Allotment Release Order (SARO) to overcome late releases of funds; c) Central COA undertook a study on "Transparency and Internal Controls" in 1996/1997 using FW4SP as one of its case studies and has recommended significant changes and improvements. Improved and systematic accounting and auditing practices have been put in place for this and other projects; and d) the Philippines Resident Mission has started a series of regular disbursement and procurement seminars for staff in project management offices. H. FUTURE OPERATION 42. Theoretically, the BWSA concept should have provided for the long-term operations and maintenance of the water supply and sanitation facilities constructed. Therefore, no element of continued external support was considered in the project design. However, given the scope of the project, the ultimate responsibility for operating and maintaining the completed water supply and sanitation facilities must still rest with the LGUs and Barangay recipients, and ongoing technical support from the national implementing agencies will be required to achieve this. The operations phase plan for the FW4SP, presented as Table 6B, emphasizes activities which are intended to strengthen local government capabilities generally, and specifically to enhance BWSA sustainment. 10 The funding to sustain the operations phase effort will have to come from other sources, e.g., ADB newly funded water and sanitation project as well as the Government funded poverty alleviation project where most staff at the national agencies continue to be those from FW4SP. I. KEY LESSONS LEARNED 43. The concept of the project was sound, and in accordance with the sectoral goals of the Philippine Government. Most problems which occurred in the implementation and operation of the FW4SP could be avoided in the future through careful project design, appropriate institutional arrangements, better tailored training activities, close Bank supervision of implementation, and prompt action in response to deficiencies noted. 44. The principal lessons learned are summarized as follows: Principles/Design a) Multi-agency type of projects should be avoided; where National Government Agencies are involved, it is recommended that a single agency serve as the executing agency; b) Projects should support decentralization where projects are planned and implemented by the Local Government Units (LGU), National Government Agencies (NGA) can provide the executing agency role, Provincial Government can assist with technical assistance, supervision and monitoring, and the Municipality and Barangay should be the focus of implementation; c) Cost recovery principles should be promoted and implementing agencies, i.e., LGUs, should borrow funds for investments and be fully accountable for them; d) Small civil works contracts, such as those under this Project, should be undertaken by LGUs; procurement of all goods can also be handled by LGUs; certain items (e.g., deep well handpumps and plastic toilet bowls) can be procured at the central level to achieve economies of scale and to maintain quality; Preparation e) All Government agencies with both direct and peripheral responsibility to the project should be involved from the earliest stages of project preparation; f) At the beginning of project preparation an institutional assessment should be conducted for the capability and experience of the LGUs. Appropriate and more intensive technical assistance should be provided to the weaker LGUs; g) Planning, designing and implementation of sub-projects by LGUs should be based on need and demand and in close consultation and participation with the community; Implementation h) A supporting environment which will enable LGUs to succeed should be promoted, e.g., simplify procedures, establish mechanisms which will speed implementation, allow procurement by LGUs, develop a proper system of accounting and financial reporting; 11 i) The first year of project implementation should include the preparation of a comprehensive project implementation plan with sub-project proposals from the community, prior to the start of construction; j) Continue to support local private sector manufacturing capability and promote private sector participation in O&M; k) Where appropriate and where skills are available, LGUs should work with NGOs for community organizing as well as contractors in the small physical works; the cooperation between intermediary and local government would require clear definition of roles and responsibilities in all phases of the project and after; 1) Utilization of pre-existing community organizations for the operation and maintenance of Level I (point source) water supply facilities should be considered in future project designs; more formal associations such as BWSAs should be promoted only for higher level (Levels II and III) facilities; Supervision m) Full supervision missions should visit the project at frequent intervals in the initial stages of the project, and at other critical periods, with particular emphasis on adherence to financial and procurement policy; n) Strong and appropriate action, such as suspended disbursements, should be taken in light of delayed audits; and o) The World Bank supervision mission should include a procurement staff from the Resident Mission to undertake field reviews of accounting procedures and physical facilities, at least annually. 12 IMPLEMENTATION COMPLETION REPORT PHILIPPINES FIRST WATER SUPPLY, SEWERAGE AND SANITATION SECTOR PROJECT (LOAN 3242-PH) PART II: STATISTICAL ANNEXES Table 1: Summary of Assessment Table 2: Related Bank Loans/Credits Table 3: Project Timetable Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual Table SA: Physical Accomplishment Table 5B: Social Aspects Table 5C: Local Manufacture Table 5D: Private Sector Well Construction Table 5E: Technical and Institutional Training Table 5F: Private Sector Capacity Enhancement Table 5G: Quality and Adequacy of Water Supply Facilities Table 5H: Quality and Adequacy of Sanitation Facilities (School and Public Toilets) Table 51: Quality and Adequacy of Sanitation Facilities (Household Latrines)* Table 6A: BWSA Activity Level Table 6B: Operations Phase Plan Table 7: Studies Included in Project Table 8A: Project Costs Table 8B: Project Financing Table 9A: Economic Rate of Retum Table 9B: Sensitivity Analysis Table 10: Status of Legal Covenants Table 11: Compliance with Operational Manual Statements Table 12: Bank Resources: Staff Inputs Table 13: Bank Resources: Missions 13 IMPLEMENTATION COMPLETION REPORT PHILIPPINES FIRST WATER SUPPLY, SEWERAGE AND SANITATION SECTOR PROJECT (LOAN 3242-PH) Table 1: Summary of Assessments A. Achievement of Objectives Substantial Partial Negligible Not applicable (Vt) (Vt) (Vt) (Vt) Macro Policies O O O Sector Policies El / O O Financial Objectives El V O Cl Institutional Development O 0 Physical Development V/ O O . Poverty Reduction Vt/ O O O Gender Issues E E O Other Social Objectives O O O V Enviromnental Objectives VI O O Public Sector Management E Ol O Private Sector Development E O 1O Other (specify) O O V/ B. Project Sustainability Likely Unlikely Uncertain (V) (V) (V) Highly C. Bank Performance satisfactory Satisfactory Deficient (V) (V) (V) Identification O V/ E Preparation Assistance E V/ E Appraisal VI El Supervision O V El Highly D. Borrower Performance satisfactory Satisfactory Deficient (V) (V) (V) Preparation El V O Implementation E V O Covenant Compliance O V O Operation (if applicable) O V O Highly Hhy E. Assessment of Outcome Satisfactory Satisfactory UnsatisfactoryUnsatisfactory (V) (/) (V) (t) Ol V/ E a 14 Table 2: Related Bank Loans/Credits Loan/credit title Purpose Year of Status approval Preceding operations 1. Manila Sewerage Improve sanitation in the poor and 1980 Completed densely populated areas of Metro Manila and develop the institutional capacity to implement similar projects in future. 2. Rural Water Supply Development and mobilization of 1983 Completed resources for the water supply and sanitation sector, and the organization and strengthening of the implementation capabilities of institutions responsible for the sector. The project also supports the objectives of the Rural Water Supply and Sanitation Master Plan which focuses on specific policies, targets and programs for the provision of water supply and sanitation in the rural areas. Following operations 1. Manila Second Sewerage Enable MWSS to radically expand its 1996 Active septage management program and establish the conditions needed for medium-term low-cost improvement of sewerage services in Metro Manila. 2. Water District Promoting private sector participation 1998 Preparation Development in water districts' building capacity for economic regulation, training, and sewerage investments. 3. LGU Urban & Water To support investment and institutional 1999 Preparation Sanitation strengthening of urban LGU water and sanitation utilities. 15 Table 3: Project Timetable Steps in Project Cycle Date Planned Date Actual/ Latest Estimate Identification (Executive Project Summary) 11/20/89 (final) Preparation 6/26 - 7/15/89 Appraisal 10/89 9/25 - 10/13/89 Negotiations 2/28/90 5/10/90 Board Presentation 4/30/90 6/28/90 Signing 7/9/90 Effectiveness 1/15/91 Midterm review (if applicable) n/a n/a Project Completion 6/30/95 12/31/97 Loan Closing 12/31/95 12/31/97 Table 4: Loan Disbursements: Cumulative Estimated and Actual (US$ Millions) FY91 FY92 FY93 FY94 FY95 FY96 FY97 Appraisal Estimate 10.70 31.00 49.60 67.50 81.80 85.00 Restructured Estimate 3.71 11.26 18.95 37.29 58.00 Revised Estimate 45.29 47.93 Actual 4.99 12.79 15.35 22.09 29.72 37.21 44.70 Actual as % of Restructured/Revised 135% 114% 81% 59% 51% 82% 93% Estimate Date of Final Disbursement May 18, 1998 16 Table 5A: Key Indicators for Project Implementation Physical Accomplishment Item Original Restructured Revised Actual Target Target Target Completed Planning Preparation of Provincial Water Supply, 37 28 28 37 Sewerage and Sanitation Sector Plans Water Supply . Shallow Wells 11,000 6,950 6,717 6,717 Deep Wells 7,000 2,550 2,664 2,664 Spring Developments 1,000 650 660 660 Well Rehabilitation 5,000 3,200 3,171 3,171 Rain Water Collection Installation 200 200 188 188 Pilot Water Treatment Units 1,000 500 436 397 Workshop Construction 25 25 25 25 Sanitation Household Latrines 1,000,000 650,000 650,000 457,792 School Toilets 1,000 1,000 1,000 999 Pilot Communal/ Public Toilets 100 100 100 99 Pilot Wastewater Treatment Units 100 100 100 44 Sullage Removal Units 1,000 1,000 1,000 1,000 Well Disinfections 1,000,000 1,000,000 1,000,000 1,000,000 Sanitary Well Protection Units 0 1,000 1,000 942 Water Laboratory Equipment Sets Regional Laboratories 13 13 14 14 Provincial Laboratories 75 75 76 60 Community Development BWSAs Formed 18,000 7,845 7,756 7,756 17 Table 5B: Key Indicators for Project Implementation Social Aspect (Women's Participation Level)' Project Province BWSA Members Women Members % Women Members Cordillera Admin.Region (CAR) Ifugao 1,953 489 25% Mountain Province 1,883 564 30% Kalinga 1,946 333 17% Benguet 1,672 502 30% Region I La Union 8,424 2,527 30% Pangasinan 19,424 5,827 30% Region II - Quirino 1,612 484 30% Isabela 9,632 2,341 24% Region III Bulacan 4,967 1,582 32% Pampanga 6,793 2,903 43% Region IV-A Aurora 1,366 488 36% Batangas 13,900 9,137 66% Quezon 4,577 4,142 90% Region IV-B Marinduque 2,758 994 36% Palawan 3,908 609 16% Romblon 2,406 267 11% Region V _ Camarines Norte 5,479 1,852 34% Camarines Sur 978 382 39% Catanduanes 783 181 23% Sorsogon 14,058 2,453 17% Total 101,065 38,059 38% * Data reflects information provided to DILG-WSSPMO by government field personnel (Provincial Action Officers) in late 1997. Not included in the table are project provinces for which data was not submitted. Table SC: Key Indicators for Project Implementation Private Sector Development Aspects - Local Manufacture Item Total No. Total No. Locally % Locally Produced Manufactured Manufactured Shallow Well Handpumps 7,150 7,150 100% Deep Well Handpumps 2,664 1,900 71% Plastic Toilet Bowls 650,000 650,000 100% 18 Table 5D: Key Indicators for Project Implementation Private Sector Development Aspects - Well Construction Total Wells per Wells Constructed Wells Constructed Project Province/Region Province in by Backyard Well by DEO Personnel Survey Drillers No. % of No. % of Total Total Cordillera Administrative Region (CAR) Ifugao 18 8 44% 10 56% Mountain Province 30 30 100% 0 0% Region I La Union 180 95 53% 85 47% Pangasinan 519 344 66% 175 34% Region II Quirino 43 43 100% 0 0% Cagayan 150 74 49% 76 51% Isabela 99 99 100% 0 0% Region I1 Bulacan 642 640 100% 2 0% Nueva Ecija 373 279 75% 94 2% Pampanga 824 824 100% 0 0% Region IV-A . Batangas 390 31 8% 359 92% Cavite 100 48 48% 52 52% Quezon 111 111 100% 0 0% Region IV-B Marinduque 70 0 0% 70 100% Palawan 159 87 55% 72 45% Romblon 82 33 40% 49 60% Region V . Albay 728 146 20% 582 80% Camarines Norte 344 141 41% 203 59% Catanduanes 79 57 72% 22 28% Masbate 118 0 0% 118 100% Sorsogon 714 499 70% 215 30% Total 5,773 3,589 62% 2,184 38% * Data reflects information provided to DPWH-PMORWS by specific DEOs during 1997. Not included in the table are provinces for which DEOs did not submit data. 19 Table 5E: Key Indicators for Project Implementation Technical and Institutional Training Activities Institutional Component Item Number of Number of Participants Participants Targeted Trained BWSA Pre-formation Training 310,120 232,180 BWSA Post-formation Training 108,584 79,087 Sanitation Component Activity Number of Number of Participants Targeted Participants Trained National Sanitation Training Program 120 RSIs 114 RSIs Regional Sanitation Training Program (Ph-I) 1,300 RSIs 1,807 RSIs Regional Sanitation Training Program (Ph-II) 2,800 SEs 2,262 SEs Skills Training for Sanitary Engineers 200 SEs 139 SEs Skills Training for Supervising and District 400 SIs 346 SIs Sanitary Inspectors Water Quality Management Training - Bacteriological Analysis 120 Mec. Tech. 182 Med. Tech. - Chemical Analysis 60 Chemists 29 Chemists Health and Hygiene Education Material Distribution Items Target Distributed Posters 466,000 pcs. 1,439,000 pcs. Comics 3,000,000 pcs. 6,000,000 pcs. Handbills 3,000,000 pcs. 3,000,000 pcs. TV Promotions 6 hrs. 6 hrs. Radio Promotion I0 hrs. I0 hrs. 20 Water Supply Facility Design and Construction Training Number of Number of Participants Activity Participants Targeted Trained Seminar/Workshop in the 18 Water Supply Engrs 18 Water Supply Engrs Determination of Water Well Location & Well Drillers & Well Drillers Training on Quality Control for 122 Water Supply Engrs 122 Water Supply Engrs Construction and Development of Wells & Well Drillers & Well Drillers Training of Trainors Program in Water 58 Water Supply Engrs 58 Water Supply Engrs Supply Implementation and Provincial Engrs. and Provincial Engrs. Skills Training on Operation and 521 Municipal Engrs. 521 Municipal Engrs., Maintenance of Level I Water Supply 6,916 BWSA 6,961 BWSA Facilities Officers/ Caretakers Officers/ Caretakers Training on Low Cost Water Treatment 37 Water Supply Engrs 37 Water Supply Engrs Facilities & Well Drillers & Well Drillers Implementation Planning Workshop 35 35 PMO Staff Orientation on the Preparation of 130 COA Auditors, Statement of Expenditures Accountants, Book- keepper and Water Supply Engineers Orientation on the International Bidding 22 Procurement and Guidelines and Procedure Staff Engineers Table 5F: Key Indicators for Project Implementation Private Sector Capacity Enhancement Activities Program No. of Project Total No. of Percentage of Total Provinces BWSAs within BWSAs Covered Covered the Covered within the Covered Provinces Provinces ITN/ NGO Involvement Pilot Project 1 21 4% UNDP-PEH (93/10), Organization and Training of Beneficiaries of Water and 2 Sanitation Projects Capacity Enhancement Program (NGO) 28 3,700 50% 21 Table 5G: Key Indicators for Project Implementation Quality and Adequacy of Water Supply Facilities* Project Province Number of Operational Facilities Number of Non-Operational ._____________________ Surveyed Facilities Surveyed DW SW SD RC TOT DW SW SD RC TOT Cordillera Admin. Region 40 15 113 12 180 10 0 11 0 21 (CAR) ____ _ Region I 230 439 31 2 702 14 1 0 0 15 Region II 171 242 18 4 435 5 2 0 0 7 Region III 566 1703 31 0 2300 54 126 1 0 181 Region IV 551 780 129 107 1567 102 27 7 0 136 Region V 425 726 98 14 1263 280 197 5 3 485 Total (Number) 1983 3905 420 139 6447 465 353 24 3 845 Total (%) 81% 92% 95% 98% 88% 19% 8% 5% 2% 12% * Data reflects informnation provided to DPWH-PMORWS by specific DEOs during 1997. Areas for which DEOs did not provide such information are not reflected in the table. "Operational" is defined as functioning at the time of the field survey. DW = Deep Well SW = Shallow Well SD = Spring Development RC = Rainwater Collector 22 Table 5H: Key Indicators for Project Implementation Quality and Adequacy of Sanitation Facilities (School and Public Toilets)* Region Number and Percentage of Number and Percentage of Surveyed Sanitation Facilities Surveyed Sanitation Facilities Being Utilized Not Being Utilized School Toilets Public Toilets School Toilets Public Toilets No. % No. % No. % No. % Cordillera Admin. Region 36 51% 3 75% 34 49% 1 25 (CAR) Region I 0 0 Region If 38 52% 35 48% Region III 38 60% 12 48% 25 40% 13 52% Region IV 48 72% 22 69% 19 28% 10 31% Region V 38 57% 29 43% Region VI 1 1 85% 2 15% Region VII 41 68% 10 77% 19 32% 3 23% Region. VIII 34 52% 31 48% Region IX 36 78% | l 10 22% RegionX 12 46% 14 54% Region XI 34 64% 13 87% 19 36% 2 13% Region XII 30 75% r l 10 25% ARMM 11 58% _ _ 8 42% CARAGA 12 48% 13 52% NCR 40 73% 2 29% 15 27% 5 71% Total 459 62% 62 65% 283 38% 34 35% * Data reflects field surveys conducted in late 1997 by the DOH-EHS, covering approximately 75% of the constructed facilities. Table 51: Key Indicators for Project Implementation Quality and Adequacy of Sanitation Facilities (Household Latrines)* Observed Problem No. of Occurrences Frequency of Surveyed Occurrence Bowl not properly set 67 6% P-trap not properly attached 8 1% No P trap installed 20 2% No vent pipe installed 440 40% Superstructure of substandard quality 356 32% * Data reflects random field surveys conducted in late 1997 by the DOH-EHS, and includes a total of 1113 units surveyed. 23 Table 6A: Key Indicators for Project Operation Institutional Development Indicator (BWSA Activity Level)* Project Province Number of Number and Number and BWSAs Percentage of Percentage of Surveyed Active BWSAs Inactive BWSAs Cordillera Administrative Region (CAR) Benguet 8 5 62% 3 38% Region I Pangasinan 70 70 100% 0 0% Region II Cagayan 44 26 59% 18 41% Region III Bataan 11 10 91% 1 9% Bulacan 150 119 90% 13 10% Pampanga 196 165 84% 31 16% Region IV-A Batangas 19 1 5% 18 95% Laguna 38 18 47% 20 53% Region IV-B Marinduque 14 14 100% 0 0% Region V Albay 71 41 58% 30 42% Camarines Norte 21 17 81% 4 19% Camarines Sur 32 13 41% 19 59% Catanduanes 34 3 9% 31 91% Masbate 3 1 33% 2 67% Total 693 503 73% 190 27% * Tabulated data was provided to DILG-WSSPMO by Provincial Action Officers while validating areas for participation in DILG's Capacity Enhancement Program in 1997. "Active" BWSAs are defined as those which conduct regularly scheduled meetings, collect fees for facility maintenance, and implement repairs of facilities. Table 6B: Operations Phase Plan Agency Full Development Specific Actions Required Inputs/ Time Region or Funding Sources Responsibility/ Objective Frame Province Subject Covered DPWH, DILG, * Safe, adequate, and * Maintain regular dialogue between PMOs, EHS, Regional Offices, REOS, Ongoing CAR Rural Water Supply DOH/ easily accessible RHOs, DEOs, and LGUs, and coordinate activities Romblon and Sanitation Rural Water water supply * Perform monitoring of facilities (LGUs) Quarterly Aurora Sector Project Supply * Validate requests for facility repair (LGUs) As needed Masbate (ADB) (national Provide technical assistance and advice to LGUs when requested (PMO, As needed level) DEOs) * Loan equipment and provide spare parts to LGUs when requested (DEOs) As needed Provincial and * Perform monitoring of water quality of completed water supply facilities Biannually Municipal (PHOs, LGUs) Governments (local level) DOH/ * Proper Sanitation * Maintain regular dialogue between EHS and RHOs, and coordinate activities Ongoing 29 FW4SP Poverty Alleviation Rural Sanitation * Maintain regular dialogue between RHOs and LGUs, and coordinate Ongoing Provinces Fund II (national activities level) * Perform monitoring of school toilets and public toilets (RHOs, LGUs) Quarterly w * Perform regular monitoring of constructed household latrines (RHOs, Ongoing Provincial and LGUs) Municipal * Liaise with school, government and barangay officials to ensure full usage Ongoing Governments (local of facilities (RHOs, LGUs) level) * Conduct follow-up visits to assess effectiveness of health and hygiene Biannually education program, and redistribute materials as appropriate (RHOs, LGUs) DILG, LGUs/ * Promotion of * Maintain regular dialogue between WSSPMO and LGUs/ MWTFs, and Ongoing Region V WATSAN Project Institutional effective coordinate activities Region XII (UNICEF) Arrangements community * Provide review of MWTF activities (PMO, LGUs) Biannually (national level) for Project participation * Provide update of BWSA assessment database Biannually Sustainability * Organizational * Finalize and implement guidelines on BWSA registration and accreditation By mid- 1998 Provincial and arrangements for (PMO, LGUs) Municipal improved operation * Prepare implementation and investment plan (LGUs) Annually Governments (local and maintenance of * Provide technical assistance to LGUs as requested (PMO) As needed level) water supply * Provide review of BWSA functional levels (PMO, LGUs) Annually facilities * Perform and coordinate technical assistance to BWSAs in areas of identified As needed Supporting need (PMO, LGUs, NGOs) government decentralization Training manpower in planning and implementation of water supply and sanitation systems I Agency Full Development Specific Actions Required Inputs/ Time _ Region or Funding Sources Responsibility/ Objective Frame Province Subject Covered DPWH, DOH/ * Promoting local * Provide detailed performance assessment of locally manufactured Annually Benguet Rural Water Supply Private Sector manufacture of handpumps (PMO, DEOs) Apayao and Sanitation Development quality shallow well * Review of commercial availability and Government distribution of spare Annually Kalinga Sector Project handpumps parts for handpumps (PMO, DEOs) Ifugao (ADB) * Promoting local * Review commercial availability and Government Distribution Policy of Annually Mt. Province manufacture of PTBs (EHS, RHOs) Aurora Provincial and quality deep well Romblon Municipal handpumps Masbate Governments (local * Promoting local level) manufacture of quality toilet bowls DILG/ * Increased * Monitor participation of women in water and sanitation activities at the LGU Annually Social and participation of level and the Barangay level (PMO, LGUs) Environmental women in the Improvement planning, operation and maintenance of water supply and sanitation facilities * Poverty alleviation * Reduction of diseases related to poor sanitation 26 Table 7: Studies Included in Project Purpose as defined at Study appraisal Status Impact of study or study inception* Low Cost Water Develop appropriate technology Study completed Recommended design for Treatment Unit for the removal of excessive iron in June 1995. treatment units developed, Pilot Study and manganese, to improve rural tested, and later implemented Project (DPWH). groundwater supplies. in the field on widespread basis. Local Provide assistance in improving Program Local companies developed Manufacture of local handpump manufacturing completed in capability to manufacture Handpumps capabilities, and in establishing 1993. Four quality handpumps. One of (DPWH). local quality assurance and local the four participating local control capabilities. manufacturers companies was subsequently produced trial awarded contract for batches of 25 manufacture of 1900 project units each. deep well handpumps. Tara Handpump To evaluate the performance of Study completed Possible widespread use of Evaluation the Tara Handpumps under rural in June 1995. the Tara Handpumps in future Project (DPWH). conditions in the Philippines, rural water supply projects. including maintainability, reliability, and acceptance by end users. ITN-NGO To enhance the sustainability of Program Provided insight into the Demonstration BWSAs in the demonstration completed in effectiveness of the use of Program (DILG). area, ITN-NGO would guide and 1994. NGOs to enhance rural coordinate activities during community development critical stages of BWSA activities. formation. Pilot Wastewater To test the efficiency of the units Program Following completion of Treatment Units in removing high BOD content ongoing - 44 installation of the units, (DOH). in septic wastes. units installed sampling will be performed out of 100 to test the efficiency of the targeted. units for possible future widespread use. Capacity To implement sustainability Program Total of 200 BWSAs directly Enhancement strategies for project facilities completed reactivated and 200 water Program (DILG). through revitalization of BWSAs December 1997. supply facilities repaired. and minor repair activities. Master Plan for Perform feasibility studies and Plan completed Some recommended National Urban formulate investment projects in October 1993. investment projects are now Sewerage and for sustainable interventions in proceeding, including the Sanitation Sector sewerage, sanitation and solid World Bank funded Water (LWUA). waste. District Development Project (LWUA). * For studies not defined at appraisal. 27 Table 8A: Project Costs (As of December 1997) Appraisal Estimate (US$M) Restructured Estimate (US$M) Revised Estimate (US$M) Actual/Latest Estimate (US$M Item IBRD GOP Total IBRD GOP Total IBRD GOP Total IBRD GOP Total Rural Water Supply -DPWH 37.42 49.73 87.15 29.81 10.42 39.52 24.46 10.17 34.63 25.31 11.54 36.85 Equipment and Materials 25.88 7.67 33.55 15.68 2.07 17.75 11.78 2.07 13.85 12.82 1.83 14.66 Civil Works 3.36 28.49 31.85 8.40 6.42 14.82 7.41 6.42 13.83 7.36 8.07 15.43 Training 0.04 0.47 0.51 0.16 0.16 0.16 0.16 0.20 0.20 Consultancy Services 1.84 0.68 2.52 4.95 0.52 5.47 5.27 0.27 5.54 5.07 0.12 5.20 Quality Control 0.15 0.15 0.07 0.07 0.05 0.05 Administrative Costs 0.47 0.47 1.25 1.25 1.25 1.25 1.30 1.30 Contingencies 6.15 11.95 18.10 0.71 Rural Sanitation - DOH 14.51 17.92 32.43 20.85 24.69 45.54 18.21 24.69 42.90 13.22 22.59 35.81 Equipment and Vehicles 10.19 2.01 12.20 7.44 0.73 8.17 5.99 0.73 6.72 4.60 0.80 5.40 Civil Works 0.79 4.48 5.27 12.86 11.73 24.59 12.22 11.73 23.95 8.62 19.73 28.35 EC/Training/Water Quality 0.37 4.88 5.25 2.06 2.06 Consultancy Services 0.74 0.36 1.10 6.95 6.95 6.95 6.95 Administrative Cost 3.10 3.10 0.55 5.28 5.83 5.28 5.28 Contingencies 2.42 3.09 5.51 Institutional Development - 1.58 3.29 4.87 7.34 10.60 17.94 5.24 3.42 8.66 3.88 4.23 8.11 DILG I Vehicles and Equipment 0.61 0.61 1.58 1.16 2.74 0.76 0.74 1.50 0.60 0.74 1.34 Community Development 0.16 2.44 2.60 5.45 5.84 11.29 3.28 3.28 3.28 0.08 3.36 Provincial Master Plan 0.61 0.41 1.02 2.78 2.78 Capacity Enhancement Program 0.82 0.82 1.20 1.20 0.82 0.82 Administrative Cost 2.67 2.67 2.59 2.59 Contingencies 0.20 0.44 0.64 0.31 0.31 Special Account 0.13 0.13 Technical Assistance - LWUA 0.57 7.81 8.38 TOTAL 54.08 78.75 132.83 58.00 45.71 103.00 47.93 38.28 86.21 42.55 38.37 80.92 28 Table 8B: Project Financing (as of May 1998) Appraisal Estimate (US$M) Actual/Latest Estimate(US$M) Source Local Foreign Total Local Foreign Total Costs Costs Costs Costs IBRD 30.9 54.1 85.0 16.8 27.9 44.7 Domestic 47.8 0.0 47.8 38.1 38.1 Contribution TOTAL 78.7 54.1 132.8 54.9 27.9 82.8 Table 9A: Economic Rate of Return* Facility Type Economic Rate of Return Economic Rate of Return Estimated at Appraisal Re-estimated at Completion Shallow Well 29% 17% Deep Well 5% 2% Spring Development 8% 5% Weighted Average 8% 5% * The net economic benefits estimated here are limited to the value of water only. It is worth mentioning that economic benefits from a water supply project also include avoidance of waterbome diseases, increased productivity due to savings in time used for fetching water, and increased household productivity because of the availability of water as an input in household activities. The economic value of these benefits, although not quantified for this project, if included would further increase computed rates of return. Cost data derived from facility construction cost figures provided by DPWH, and facility maintenance figures operation and maintenance figures provided by DILG. Benefit data derived from water unit pricing developed under the UTNDP-PHI project. 29 Table 9B: Sensitivity Analysis* Price of Water Type of Facility Economic Rate of Return P3/m3 Shallow Well 17% P3/m3 Deep Well -2% P3/m3 Spring Development -3% P3/m3 Weighted Average 1% P4/m3 Shallow Well 29% P4/m3 Deep Well 2% P4/m3 Spring Development 0% P4/m3 Weighted Average 6% P6/m3 Shallow Well 54% P6/m3 Deep Well 8% P6/m3 Spring Development 5% P6/m3 Weighted Average 14% * The range of water prices considered applies to similar facilities constructed under the UNDP-PHI Project. Table 10: Status of Legal Covenants Agreement Section Covenant Present Original Revised Description of Covenant Comments Type Status Fulfillment Fulfillment Date Date 2.02 01 C Withdrawals to be made, amongst Agreement was reached in respect of others, in unit rates as may be the adjustment of the unit rates. determined by Borrower and the Bank. 2.02 b 01 C Borrower shall open and maintain in Special account balance was dollars a special deposit account in the maintained at $5 million. Central Bank. 3.01 b 02 C Borrower shall carry out project in accordance with the Implementation Program in Schedule 5. Sch. 5.1 05 C Borrower will establish and maintain a The Project Coordinating Committee Project Coordinating Committee. met regularly throughout the course of the project. Sch. 5.2 05 CD Borrower shall cause the provincial Locating appropriate sources of grant govemments to prepare, adopt, and put funding caused some delay in plan into effect Provincial Water Supply, preparation. Sewerage and Sanitation Sector Plans. Sch 5.3 05 C Borrower shall designate one DILG DILG's Provincial Action Officers staff member to act as community (PAOs) were based at the central organizer in each province. office and had limited travel budgets and schedules. Sch. 5.4 05 CP Borrower shall implement the training Very little training was extended to and community development program. the private sector. Sch 5.5 05 NC DPWH shall provide one year Even without a one year warranty, warranties to BWSA against defective DPWH is still liable in replacing materials and faulty workmanship on defective materials and provide completed wells and handpumps. assistance to BWSAs. Sch. 5.6 05 C Borrower shall ensure quality control Quality control was maintaine using and obtain quality assurance on goods. both an Extemal Quality Assurance Consultant, and later a Govemment Quality Control Committee. Sch. 5.7 05 C Borrower shall organize and conduct a In the future, it might be beneficial to Project Launching Workshop. consider conducting refresher workshops or relaunchings after a major restructuring of a project. Agreement Section Covenant Present Original Revised Description of Covenant Comments Type Status Fulfillment Fulfillment Date Date Sch. 5.8 01 NC Borrower shall undertake biennial DPWH does not presently have a reviews of its water pricing policy and formnal pricing policy for rural water cost recovery principles, discuss with services. A study is presently being the Bank and implement it. undertaken by the Sectoral Task Group on Water Resources Mgt., Population Policy Operations Project executed by the Commission on Population. Sch. 5.9 05 CP Borrower shall provide the Bank with Although women's participation in all such information about the involvement phases of the project was evident, of women in the project and ensure such participation was not well equal access to membership and documented. management roles in BWSA. 4.01 a 01 C DPWH, DOH and DILG shall maintain Local Consultant assisted in this task. project accounts. DPWWH was not eligible for Bank financing as of January 1, 1996. 4.01 b 01 C Borrower shall have Special Deposit DPWH had been in default of project and Project Accounts audited and audits and became no longer eligible furnished to the Bank nine months after for Bank financing as of January 1, the end of each calendar year. 1996. 4.01 c 01 C SOE records shall be maintained, COA audit reports cover SOE retained, access given to, and covered records. by separate opinion. Covenant Status Covenant Class C - Complied with I - Accounts/ audits CD - Complied with after delay 2 - Financial performance/ revenue generation from beneficiaries CP - Complied with partially* 3 - Flow and utilization of project funds NC - Not complied with* 4 - Counterpart funding S - Management aspects of the project or executing agency 6 - Environmental covenants 7 - Involuntary resettlement 8 - Indigenous people 9 . Monitoring, review and reporting I - Project implementation not covered by categories 1-9 11 - Sectoral or cross-sectoral budgetary or other resource allocation 12 - Sectoral or cross-sectoral policy/ regulatory/ institutional action 13 - Other * If the covenant is complied with only partially or not at all, the reason is provided. 32 Table 11: Compliance with Operational Manual Statements Statement Number and Title Describe and Comment on Lack of Compliance NIL Table 12: Bank Resources: Staff Inputs Stage of Planned Revised Actual Project Cycle Weeks US$ Weeks US$ Weeks US$ Through Appraisal 58.1 117,700 Appraisal-Board 38.3 88,400 Board-Effectiveness Supervision 39.0 95,500 40.5 88,400 190.8 458,400 Completion 9.0 18,800 9.0 18,800 4.1 10,100 TOTAL 48.0 114,300 49.5 107,200 291.3 674,600 [NOTE: Completion time and dollars to be updated when final figures known. Task budgeting began in FY96. Does not include travel and other costs - only staff time.] 33 Table 13: Bank Resources: Missions Performance Rating Number Specialized Implemen Develop- Stage of Month/ of Days in Staff Skills -tation ment Types of Project Cycle Year Persons Field Represented Status Objectives Problems Through 2/89 5 18 FA, SE, PS, CS Appraisal 6/89 14 19 FA, SE, ME, PE, IE, SO, TR, NGO Appraisal through 9/89 5 18 FA, SE, ME, Board Approval PE, CS 6/90 3 12 SE, PE, TR Board Approval 12/90 1 18 FA - - through Effectiveness Supervision 10/90 2 FA, SE 2 1 12/90 1 FA 1 I 06/91 2 FA, consultant 1 I 10/91 2 FA, SE 2 I 03/92 2 FA, SE 2 1 04/93 2 FA, ME 2 1 08/93 2 FA, SE 3 2 05/94 2 FA, SE S S 11/94 2 FA, SE S S 07/95 1 SE S S 02/96 2 SE, AN S S 01/97 2 7 AN, CE S S 07/97 1 5 AN S S 09/97 2 8 AN, CE S S Completion 10/97 1 14 AN _ FA = Financial Analyst PE = Project Engineer (water) SE = Sanitary Engineer CS = Computer Specialist ME = Municipal Engineer TR = Training Consultant AN = Anthropologist IE = Institutional Expert CE = Civil Engineer SO = Sociologist PS = Procurement Specialist NGO = Non-Governmental Organization 34 Appendix A ICR Aide Memoire PHILIPPINES FIRST WATER SUPPLY, SEWERAGE AND SANITATION SECTOR PROJECT (LOAN 3242-PH) WORLD BANK IMPLEMENTATION COMPLETION MISSION OCTOBER 6 - 22, 1997 Aide Memoire 1. A World Bank mission led by Ms. Mary Judd (Anthropologist, EASSD) visited the Republic of Philippines from October 6 - 22, 1997 to undertake the Implementation Completion Mission for the First Water Supply, Sewerage and Sanitation Sector Project (FW4SP). Mr. Steven Matsler (Water Supply Consultant) joined the mission in the Philippines. The ICR Mission immediately followed the final supervision mission led by Mr. Wael Zakout of the World Bank from September 29 to October 6, 1997. The mission met with the Project Coordination Committee (PCC), and had separate meetings with relevant agencies (DILG, DPWH, DOH, LWUA, NEDA, DBM and COA), donors (UNDP and UNICEF) and participating private sector companies (Malanday and Atlanta). The mission visited project sites in Laguna, Benguet and Davao del Sur provinces and held a series of consultative meetings in two regions: Cordillera Administrative Regions (CAR) in northern Philippines and Region XI in the south. The mission would like to thank the following for all the cooperation, assistance and hospitality extended to the mission: PCC; staff of DOH, DILG and DPWH; beneficiaries; officials of barangays, municipalities, provinces, and regions. This Aide Memoire summarizes the mission's findings and recommendations which were presented at a wrap-up meeting on October 22, 1997. It is subject to confirmation by the management of the World Bank. 2. The ICR mission was conducted in a participatory manner and the findings and recommendations were a joint product of the mission and the members of the project implementation offices (PMOs) of the three agencies. Visits to project sites were undertaken jointly. Consultative meetings in the regions for the various administrative levels were facilitated by the PMOs. The information collected from these meetings were discussed at a one day workshop in Manila on October 20 and attended by staff of the three implementing agencies and Philippines' resident mission staff; it was included as input into the draft findings and recommendations in the sections below. Refer to Attachment 1 for the mission agenda, list of people met and the consultative meetings. 35 Appendix A ICR Aide Memoire Project Completion 3. The mission confirmed with the Government on the project implementation completion date of December 31, 1997. All activities after that date will not be eligible for funding under the Bank loan. The Government will have four months until April 30, 1998 to clear all outstanding payments from the loan. 4. The following are outstanding activities yet to be completed as of October 22, 1997: Items Targets Completed Outstanding DPWH Water treatment facilities 500 370 130 Repair and rehabilitation of facilities on-going Skills Training II 7,845 6,609 1,236 DOH Household latrines 650,000 378,083 271,917 Wastewater treatment units 100 44 56 Water testing laboratories 90 63 27 Well disinfections (to be completed by Nov 30) 542,000 260,000 282,000 Follow-up on hygiene education material 1,000 follow up with distribution and use in 1,000 elem. schools DECS DILG _ _ _ _ _ _ _ _ CEP refresher/on-the-job training courses 16 16 0 CEP minor repairs 1,200 0 1,200 CEP operation and maintenance manual 1 0 1 BWSA data 1,800 _ 0 1,800 Disbursement and Audit Reports 5. The disbursement as of September 1997 was about US$45.06 or 94% of the final loan amount of US$47.93 million. The remainder, which is mainly for DILG's Capacity Enhancement Project, is expected to be fully drawn by the project closing date of December 31, 1997. The last audit report for the project submitted to the Bank was for fiscal year 1996. The audit report for 1997 will be submitted by September 1998. Implementation Completion Report 6. The mission discussed the draft Operational Plan and the Government's contribution to the ICR prepared by the implementing agencies. The updated version of the Operational Plan is found in Attachment 2; a final version will be submitted by the end of November 1997. The Bank's ICR will be drafted by the mission members, Mary 36 Appendix A ICR Aide Memoire Judd and Steven Matsler, together with the assistance of Cecilia Vales from the Resident Mission in the Philippines and Nancy Barrett from World Bank HQ. Ms. Loreta Rufo, a financial analyst consultant from Manila, will re-estimate the economic rate of return for the project. ICR Mission Findings 7. Overall, the primary project objective of assisting the "Government to meet the basic needs of the rural population through the provision of safe, adequate and easily accessible water supplies as well as proper sanitation" is appropriate and appears to have been achieved in its physical targets. Project implementation was adversely affected by late Congressional budget approval in 1991 and the initial confusion of roles and responsibilities related to the devolution of responsibilities to LGU in 1992. The loan was restructured in 1993 and physical targets were revised. The summary of findings are presented below. a) Physical targets for water supply and sanitation facilities have been substantially achieved. The degree of use, operation and maintenance of the facilities have been difficult to establish due to lack of valid and complete data at this stage. The physical targets were driving the project more than community demand. b) Institutionally, the project has been partially successful: i) coordination at the national level was difficult at the beginning but improved significantly towards the end of the project and continued to be chaired by DPWH even though disbursements for it had stopped in 1996; ii) coordination at the LGU level has been problematic due to the initial uncertainties and confusion of responsibilities caused by devolution; iii) location of project action officers at the national level was less effective than planned but lack of allocation at the LGU level prevented the hiring of community organizers at that level; iii) training was satisfactory for project and government staff and BWSAs but unsatisfactory for private sector, particularly the backyard well drillers; and iv) formation of new BWSAs for Level I facilities appeared to be inappropriate. c) Sector development objective was partially achieved: i) the preparation of provincial sector master plans were satisfactory but their use in the planning and site selection for the project was limited although some of these sector plans are now being used by provinces for development planning; and ii) a national strategy and action plan for urban sewerage and sanitation was developed under LWUA and an investment project--Sewerage and Sanitation for Local Government Unit--generated and funded by a Bank loan. d) Social and environmental improvements were partially successful: i) women and children gained substantially from the provision of water supply and sanitation facilities; ii) although no specific targets were set, about 50% of women were office holders in BWSAs; iii) women usually made up more than 50% of participants at barangay training sessions; iv) the impact on health is difficult to determine as this 37 Appendix A ICR Aide Memoire will require a long term assessment; v) hygiene education materials have been developed for 1,000 elementary schools but the distribution to those schools have been very slow and impact assessment on improved hygiene practices has yet to be undertaken; vi) the project's positive impact on poverty alleviation can only be assumed as no measuring indicators were developed at the time of project appraisal; and vii) similarly, the enviromnental impact was assumed to be positive in cases where potable water supply and sanitary excreta disposal facilities were provided and used accordingly. e) Private sector development in improving local manufacturing capability was highly successful: i) the Afridev deepwell handpump was modified and 1,200 units were locally produced for the project; and ii) 650,000 pieces of plastic (polyvinylchloride) pour-flush toilet bowls were also locally produced. Quality of the above units was verified by an independent External Quality Assurance Consultant and, later, by a joint inspection committee composed of DILG, DBM-PS, and DOH. f) Financial procedures and practices needed improvement: i) project account reporting was late leading to late audits and late submission to the Bank; ii) lax internal financial control for budgeting, accounting, deliveries and inventories led to unaccounted for supplies and material; iii) delay in procurement of plastic toilet bowls caused a significant delay in the sanitation program; and iv) lack of pre and post qualification of bidders resulted in some contracts being awarded to unqualified contractors. A good practice by DILG was noted in its development of local guidelines (based on Bank guidelines) for provincial procurement in the Capacity Enhancement Program under the project. 8. The lessons learned from the foreign-funded projects, particularly FW4SP, have led to significant policy changes and improved practices for both the Government and the Bank, such as: a) NEDA Board Resolution No. 4, 1994 amends NEDA Board Resolution No. 5, 1989 and allows LGUs to implement all levels of water supply projects. b) In 1995 DBM instituted the General Allotment Release Order (GARO) and the Special Allotment Release Order (SARO) to overcome late releases of funds. c) Central COA undertook a study on "Transparency and Internal Controls" in 1996/1997 using FW4SP as one of its case studies and has recommended significant changes and improvements. Improved and systematic accounting and auditing practices have been put in place for this and other projects. d) The Philippines Resident Mission has started a series of regular disbursement and procurement seminars for staff in project management offices. 38 Appendix A ICR Aide Memoire ICR Mission Recommendations 9. The main recommendations for future water supply and sanitation projects are presented in the light of devolution of basic services, such as water supply and sanitation, to LGUs: a) Projects should be planned and implemented by the Local Government Units (LGU) with the National Government Agencies (NGA) providing technical assistance, supervision and monitoring, and executing agency role. b) Provincial Sector Master Plans should be updated and promoted for use in LGU projects. These Plans should be related to the National Master Plan to ensure that a sound and common strategy is followed. c) A careful assessment should be undertaken regarding the concept of a Barangay Waterworks and Sanitation Association (BWSA) for Level I facilities. Are the responsibilities currently envisaged for the BWSA inappropriate for the type of system mandated by the project (i.e., Level I) and is this type of a formalized association more appropriate for a higher level facility? d) At the beginning of project preparation an institutional assessment should be conducted for the capability and experience of the LGUs. Appropriate and more intensive technical assistance should be provided to the weaker LGUs. e) A qualified community organizer should be hired at the municipal level and paid by the LGU. If funds are a constraint, then the project can agree to pay for the first year and the LGU pays for the subsequent years. Training and regular refresher training should be provided by the project as needed. f) Planning, designing and implementation of sub-projects by LGUs should be based on need and demand and in close consultation and participation with the community. g) A supporting environment which will enable LGUs to succeed should be promoted, e.g., simplify procedures, establish mechanisms which will speed implementation, allow procurement by LGUs, develop a proper system of accounting and financial reporting. h) Community-based projects should not include construction for the first year of the project. Instead, they should focus on orientation and training of staff, setting up proper management systems and working with the community to plan and design their sub-projects. i) Continue to support local private sector manufacturing capability and promote private sector participation in O&M. 39 Appendix A ICR Aide Memoire j) Hygiene education material can be more effectively produced and promoted at the LGU level (using the local dialect) with technical assistance from NGA. k) It is important to promote and monitor the effective use of installed facilities. Reliable data should be collected during the monitoring. Follow-up should be provided as needed. 1) The World Bank supervision mission should include a procurement staff from the Resident Mission to undertake field reviews of accounting procedures and physical facilities, at least annually. 40 Appendix B Borrower FIRST WATER SUPPLY, SEWERAGE AND SANITATION SECTOR PROJECT GOVERNMENT'S REVIEW AND ASSESSMENT OF THE PROJECT ViTRODUCTION Project Scope 1. The First Water Supply, Sewerage and Sanitation Sector Project (FW4SP), which is an outgrowth of the Government's Accelerated Water Supply Program, is a World-Bank funded project which was developed to address the identified need for improving the living conditions of its rural population through the provision of safe and adequate water supply and sanitation. 2. Area of coverage of the water supply component was in Luzon, where training, community organization and physical facility construction activities were carried out in 29 provinces. Approximately 14,000 Level I (point source) water supply facilities were constructed, including 6,717 shallow wells, 2,664 deep wells, 660 spring developments, 370 pilot water treatment units, 188 rainwater collectors, and 3,171 well rehabilitations. 3. The rural sanitation component of the project was nationwide and was therefore intended to complement parallel water supply projects being implemented using other funding sources, as well as providing sanitation coverage in those areas provided with water supply facilities under the FW4SP. Major project components included implementation of 378,083 household latrines, 999 school toilets, 99 public toilets, 44 pilot wastewater treatment units, 1,000 sullage removal units, 260,000 well disinfections, 915 sanitary well protection units, and 63 water quality laboratory upgrades. Implementation Arrangements 4. The three Philippine Government agencies with primary responsibility for implementing the project were the Department of Public Works and Highways (DPWH), the Department of Health (DOH), and the Department of the Interior and Local Government (DILG). 5. Department of Public Works and Highways (DPWH). Under the Project, the DPWH Project Management Office for Rural Water Supply (PMO-RWS), apart from being the lead agency, was responsible for the implementation of the water supply component. The PMO-RWS was assisted in the field by its respective Regional Engineering Offices (REOs) and District Engineering Offices (DEOs). 6. Department of Health (DOH). DOH was responsible for implementing FW4SP's sanitation component. To carry out such responsibility, a Project Management Office was created, which is attached to the Office of the Environmental Health Service of the Office of Public Health Services. The PMO is responsible for overall planning and management, and was assisted by Regional Offices in providing monitoring operations, including training and guidance on technical matters. 41 Appendix B Borrower 7. Department of the Interior and Local Government (DILG). The role of DILG in the Project was to implement the community development component, primarily the formation and training of Barangay Waterworks and Sanitation Association (BWSA), central responsbility for which was carried out by DILG's Water Supply and Sanitation Program Management Office (WSS-PMO), with assistance from DILG Provincial and Municipal field offices. Provincial Action Officers based at the WSS-PMO were responsible for coordination and implementation of field activities in their respective provinces. DILG also led and coordinated the preparation of provincial water supply, sewerage and sanitation sector plans for 29 provinces in Luzon. 8. Local Water UtilitiesAdministration (LWUA). The FW4SP loan included funding to support LWUA in the preparation of National Urban Sewerage and Sanitation Strategy Plan. Subsequent feasibility studies for selected localities were funded by Japanese PHRD grant facility, but administered by the World Bank under the FW4SP. 9. National Economic DevelopmentAuthority (NEDA). NEDA played a vital coordinative and monitoring role in FW4SP, in respect of its Government mandate to ensure that priority needs were incorporated accordingly, and that development plans and investment programs were formulated with the maximum participation of concerned groups. Objectives 10. Basic Objectives. The main objective of the project is to support the government's policy of providing safe, adequate and easily accessible water supply facilities, and proper sanitation facilities, to the majority of the households in the rural areas. I1. Institutional Objectives!Sustainabiity. (a) To promote effective community participation to achieve sustainable sector development. The Project acknowledged that sustainability of sector development is largely dependent on the extent to which communities become involved in the development process. (b) To develop organizational arrangements for improved operation and maintenance of water supplyfacilities. Critical to the effective management of water supply is the physical condition of the facilities. (c) To support government decentralization by providing local government units with a greater role in planning, implementation and monitoring of sector activities. While the Project was implemented by national government agencies, the intention was for LGUs to assume full responsibility for managing the project at their level, including the operation and maintenance tasks after completion of project assistance. (d) To train manpower in the planning and implementation of water supply and sanitation systems. Training was seen as a means of developing the skills needed to effectively achieve the project's main objective. 12. Social, Environmental, and Project Development Objectives. (a) Women in Development. The Government agreed to allow equal access to woman participants, by allowing them to play important and strategic roles in BWSA operation and participate in trainings for skills and knowledge enhancement. (b) Poverty Alleviation. A primary advantage would be the time saved on fetching water, thus having more time for productive activities. (c) Environmental Factors. Provision of water supply and sanitation facilities would provide the basic needs of the communities, which would reduce the rate of incidence of water-borne and water related diseases which predominantly affects rural population. 13. Private Sector Development. The production of plastic toilet bowls by a local plastic products manufacturer was seen as a way to benefit the private sector by reducing dependence on 42 Appendix B Borrower imported products by the government and transferring technology to the private sector by improving the manufacturer's capabilities. Assistance was also to be provided in improving local handpump manufacturing capabilities. It was envisaged that the majority of the project wells would be constructed by professional well drilling contractors, using an appropriate contract packaging arrangement. IMPLEMENTATION EXPERIENCE AND RESULTS Project Assessment 14. Objectives. The main project objective of providing safe, adequate and accessible water supply as well as proper sanitation, is considered highly appropriate in view of the Philippines Government's emphasis on rural water supply and sanitation as contained in both the Water Supply, Sewerage and Sanitation Master Plan of the Philippines, and the Accelerated Water Supply Program. Secondary objectives (institutional, social, environmental, and private sector development) are also considered appropriate. 15. Design. Various water supply designs were used for the program and adoption of a particular design was dependent on the actual conditions in the community. The project design was comprehensive and ambitious in a way that it covered the development of water sector from the national level down to barangay level. Project design was considered appropriate in that it promoted participation by the private sector, in both manufacturing (of toilet bowls and handpumps) and construction (of wells through contract packaging, and of school and public toilets), equal opportunity for women in development, and sustainability through the provision of quality assurance and control. The implementing agencies at the national level were able to develop general specifications for water supply and sanitation systems, and establish a viable quality assurance and control system. 16. Implementors at the provincial level including backyard well drillers and NGOs were to be given assistance through the provision of appropriate training in the planning, design, drilling, construction, operation and maintenance procedures. 17. Implementation. Success of project implementation is measured primarily by achievement of objectives. The main project objective of supporting government policy in providing safe, adequate and accessible water supply and proper sanitation to rural communities was primarily affected by a substantial reduction in the total number of facility targets which was made in 1993 because of initial delays in project implementation. $27 million of the original project loan amount of $85 million (which represented roughly 75% of the project cost) was cancelled in the restructuring. Later, in 1995, an additional amount of $10.07 million was cancelled from the Loan. 18. It is felt that the main objective was satisfactorily achieved despite the reduction in coverage after the restructuring. Virtually 100 percent of the restructured water supply target and community development target, and 58 percent of the restructured sanitation target, were achieved. 19. Institutional objectives were set in respect of: (a) promoting effective community participation to achieve sustainable sector development; (b) developing organizational arrangements for improved operation and maintenance of water supply facilities;(c) supporting government 43 Appendix B Borrower decentralization by providing local government units with a greater role in planning, implementation and monitoring of sector activities; and (d) training manpower in the planning and implementation of water supply and sanitation systems. 20. Accomplishment of items (a) and (b) above were generally felt not to be satisfactory. The BWSA structure often proved not to be sustainable, and the effectiveness of forming what are essentially micro water utilities to provide Level I service is questionable. The project served to adequately support government decentralization (item (c)), which accomplishment was also given a significant boost with the enactment of the Local Government Code in 1991. Item (d) was considered partially satisfactory, as the project provided much useful training in the public sector but failed to train substantial numbers of key private sector participants such as the backyard well drillers who participated in the project. 21. Social and environmental objectives were considered in the project, including: (a) women in development; (b) poverty alleviation; and (c) general environmental improvement. Although it is difficult to quantify accomplishment of such objectives, achievement can be measured against a surrogate indicator (e.g. physical project accomplishment), and on this basis project performance is considered satisfactory. 22. Private sector development objectives considered the promotion of private sector activity in manufacture, construction, and operations and maintenance. Performance in terms of manufacture was considered highly satisfactory, as the project succeeded in promoting high quality manufacture of both deep well handpumps and plastic toilet bowls. Performance in private sector construction was considered unsatisfactory. The well contract packaging scheme included in the original project design was never implemented, as it was considered inappropriate to field conditions, and there were perceived cost constraints associated with the use of professional well drilling contractors. Private sector operations and maintenance also appears to have had very limited success under the project, although some lessons in this respect are yet to be learned from the ongoing Capacity Enhancement Program being implemented by DILG. 23. Operation/Sustainability. Sustainability is addressed at different levels. At the LGU level, sustainability of water supply and sanitation program/project implementation can only be achieved if there is acceptance of responsibility and adequate budgeting. This is an area where the Project was quite unsuccessful. LGUs saw FW4SP as another grant-in-aid project for which funding was expected to be the sole responsibility of the national government. There was low level of acceptance of the concept of cost-sharing, as generally the LGUs do not have provisions in their own regular budget. 24. At the BWSA level, sustainability was limited by the extent to which BWSAs felt that they were not treated as project partners but mere recipients of assistance. Top-down aspects of the project design also sometimes resulted in a low sense of project ownership, with some facilities being inappropriate to the actual needs of the community, and some beneficiaries refusing to organize themselves. On the other hand, there were also many successes, including BWSAs whose operations have been doing fine and whose officers have remained attuned to their responsibilities, with significant involvement of women in many areas. Some BWSAs have managed to upgrade their facilities from Level I to Level II or even Level III on their own initiative, or through resource mobilization using LGU funds or Country Development Funds (CDF). 44 Appendix B Borrower Constraints Encountered 25. National Budget Releases. There were long initial delays in the implementation of the project which were associated with the delayed release of project funds, and later problems between the agencies associated with lack of synchronization of funding releases. Although the former problem may have had something to do with the depressed state of the economy in the early stages of the project, the latter might have been averted through better coordination of budget requests and more prudent use of special funds available to facilitate startup of multi-year projects (GARO and- SARO). 26. Project Coordination. Aside from the problems associated with budget releases, there were constraints at both the national and the local level, and between the implementing agencies as well as between implementing agencies and other performing supporting roles. Because of each agency's mandate to "spend or lose" its annual budget allocation, implementation of the various major components (water supply, sanitation, community development) was sometimes more like a race than a highly coordinated effort. Lack of funding at the community level resulted in inadequate community organization to achieve full and effective use of local personnel trained. Problems in coordination between the DOH and the Department of Education, Culture and Sports (DECS) resulted in long delays in redistribution of project-related health and hygiene educational materials intended for schooolchildren. 27. Effects of the Devolution. The Local Government Code (implemented in 1992) had a particularly strong effect on the DOH, as provincial and municipal functions which had previously been under its control "devolved" to their respective provinces and municipalities. The resulting lack of centralized control over key personnel such as Rural Sanitary Inspectors resulted in some reported instances of misuse of procured goods, and in other instances the duties of the RSIs were diverted to other functions by local politicians. The increased responsibility brought on to DILG by the devolution required its newly designated (Manila-based) Provincial Action Officers to assume a host of responsibilities for which they were generally inadequately prepared or funded to perform. 28. Private Sector Participation. Private sector participation in well construction was limited under the project to backyard well drillers who were often poorly equipped and trained to properly construct project wells, which probably will affect the longevity of the facilities. Few such small private well drillers received training under the project, as the Government was reluctant to extend project funds for the training of private indviduals. With respect to well construction contract packaging, although interest was strong on the part of the professional well drilling contractors intended to perform this work, ultimately no wells were tendered for such construction, at least in part due to the (unproven) perception that the wells thus constructed would be at much higher cost and would perform no better than those constructed directly by DPWH administration. 29. Financial Procedures. The Covenenants of the Project Bank Loan were not strictly followed with respect to timely submittal of Audit Reports, which on the part of at least one agency (DPWH) was partially the result of accounting staff being diverted to reconstruct the financial records of another project. Other problems seemed to be the result of inadequate training or monitoring, such as inadequate perpetual inventory systems, long initial delays in procurement of toilet bowls, and failure to properly follow Bank procurement guidelines (e.g. failure to properly postqualify a supplier of water supply materials). 45 Appendix B Borrower 30. Use of Government Funds for Planning Purposes. Aside from the aforementioned training of private individuals, the Government was unwilling to use loan funds for planning activities, such as the required preparation of Provincial Water Supply, Sewerage and Sanitation Sector Plans. Instead, grant funding was required to be sourced out for this purpose, which resulted in considerable delay in project implementation and probably also lessened the plans' intended use as a tool in setting FW4SP project targets. Borrower's Performance 31. The respective Project Management Offices of the three implementing agencies were mandated to implement the water supply and sanitation improvements. Activities were to be jointly administered through a Project Coordinating Committee, although many of the senior members of the Committee did not remain in place for the duration of the project and there were substantial problems associated with the level of coordination required, in particular lack of synchronization in the schedules for implementation of community development activities and water supply facility construction, and mismatches between BWSA formation targets and corresponding water supply facility construction targets. Considering the degree of coordination required, implementation was generally considered satisfactory. The agencies completed the majority of the facilities targeted, and were very successful in promoting the private sector manufacture of water supply- and sanitation- related goods. Bank Performance 32. Bank performance suffered slightly from a lack of continuity of task management over the course of the project, but is generally considered satisfactory. In the future, it would be helpful to provide more intensive assistance in the area of procurement, as Bank staff have strong expertise in this area and such intervention might have helped to correct four major problems in the implementation of the project which were noted earlier (late submission of audit reports, delayed procurement of toilet bowls, failure to properly postqualify a supplier, and failure to implement contract packaging of wells constructed). Summary of Lessons Learned and Recommendations for Future Projects 33. Interagency Coordination. Strengthening of coordination among implementation agencies from the central down to the local level is key to ensuring efficient delivery of support to LGUs. The following specific activities are recommended: a) Promote early identification of agencies responsible for meeting the preconditionalities of the loan, to achieve the proper level of coordination and ensure timely compliance to the preconditions. b) Solicit direct assistance of senior government officials as required in coordinating construction, certification, operation and maintenance of facilities. c) Synchronize releases of funds to each implementing agency. For future projects of the same aspect, it is suggested that the Department of Budget Management (DBM) should be on board as early as the planning stage, and the Project Coordinating Committee should include the DBM as one of its regularly attending members. 46 Appendix B Borrower d) Maintain close liaison with the Bank staff for effective and efficient implementation. e) Install a data bank for computer inputs at the LGU and provincial levels which is jointly accessible to the national government agencies. 34. Effective Community Participation. Community and LGU participation in project planning and implementation is crucial to project success. Planning should be a two-way process - bottom-up, then top to bottom. The following aspects require careful attention: a) Funding for community organization at the municipal level should be shared by the Project (1 st year) and the LGUs (subsequent years). b) Intensified social preparation and sustained public dissemination from the project design stage is very important to attain cooperation, commitment and acceptance by the community. Emphasis on intensified health education regarding proper personal hygiene and appropriate sanitary practices should be provided. c) Training/Orientation of the LGUs on the Sanitation Component should be emphasized, to improve their awareness and ability to provide assistance to RSIs. Assistance from local NGOs, Barangay Health Workers and other civic organizations must be effectively solicited in the delivery of the basic services. d) Intensive involvement of women in water supply and sanitation management for improved utilization and sustainability of physical facilities should be promoted to enhance 0 & M, and improve family hygiene practices. e) Technologies to be used shall fit the local needs, resources and demand by the rural communities. f) Training should only be provided to those who meet, specific, clearly predefined requirements for participation. g) Other mechanisms besides BWSAs (such as pre-existing community organizations) may be more appropriate for providing Level I water supply services. h) Educational materials should be produced at the LGU level and in the local dialect. i) Regular monitoring on the functionality, use, potability, and 0 & M of completed water supply and sanitation facilities should be undertaken by the LGUs. 35. Adequate Advance Preparation and Proper Timing. Community consultation shall be undertaken from project identification. Social preparation of the communities and planning activities shall precede any project implementation activities to be carried out. In particular, the following are important: a) Orientation on the proposed sector project to be given to the local officials, in order to inform them of the project components and benefits, and to get their commitment and acceptance. b) Site selection and spot mapping with the community. 47 Appendix B Borrower c) Preparation of a comprehensive project implementation plan, together with the community, during the initial year to facilitate proper monitoring and reporting, prior to the start of construction. d) Organization of BWSAs, activation of existing ones prior to project implementation, and tapping of existing organizations. e) Performing project launching workshops so as to get all of the beneficiaries involved, and to be reperformed in instances when there is a substantial mid-project deviation in scope or design. 36. Financial Matters. The government should live up to its commitment to provide budget funds and GOP counterpart funds. The GARO and SARO (one time allotment for one year expenditure) has been provided for this purpose. Agency financial procedures should be strengthened, including the following: a) Promotion of cost recovery schemes at the outset of the planning stage to ensure sustainability. b) Strengthening of the internal control system, particularly on matters pertaining to procurement. Additional training should be provided, especially at the lower levels. c) Defining the tasks of Accountants to update, maintain and accomplish properly the books of accounts and financial reports, to ensure reliability and accuracy of financial information. d) Accounting staff should concentrate on the annual financial reporting of the project at hand; projects should acquire dedicated accounting staff. e) An assessment of the financial management capability of the Project Office should be done at the preparation stage of the project. f) A computerized financial management system should be established. g) Lending institution staff should perform a review of statements of expenditure at least annually for timely discovery of discrepancies. 37. Private Sector Development. Continue promoting the use of modified Afridev handpumps for deeper well settings: a) Continue promoting the use of plastic toilet bowls. b) Promote contract packaging of wells for LGUs where feasible. c) Promote private sector participation as an 0 & M strategy. 38. Facility Design Aspects: a) Promote child-friendly facility designs. b) Provide more emphasis on drainage of water supply facilities. c) Provide appropriate sanitary pit designs to suit varied conditions, e.g. sandy soils. 48 Appendix B Borrower Summary Assessment of Project 39. The lessons derived from this Project served as valuable input to the recent reforms in the sector. Coordination can only be effectively achieved if effective community participation is engendered. This does not mean of course that there is no more room for national government agencies (NGAs) to take part in the entire development process; there are capacity constraints and limitations where NGAs' interventions are crucial, and the level of preparedness of LGUs to assume an increased role in the Sector varies substantially from one to another. The task of helping the less prepared is still part of NGA responsibility. 40. Given the policy environment within which the Project was conceived and developed, the objectives set were reasonable and were consistent with the design of the project, and the achievement of these objectives is considered satisfactory. 49 Appendix C Consultant FIRST WATER SUPPLY, SEWERAGE AND SANITATION SECTOR PROJECT FINAL REPORT SUMMARY BY CONSULTANT General Scope of Services 1. Under the Project, Engineering-Science, Inc. (ES), in association with Nippon Jogesuido Sekkei Co. Ltd. (NJS) and Basic Technology and Management Corporation (BASICTEAM) provided Project Implementation Consultancy (PIC) services. The main objective of the consultancy services was to contribute to the successful implementation of the project, including the following broad areas of assistance: administrative and technical assistance; planning; monitoring; reporting; and training. Performance in Specific Areas 2. Administration and TechnicalAssistance. Such assistance was provided through preparation and attendance of all meetings of the Project Coordinating Committee (PCC), and by continuously posting key personnel in the central offices of the three project implementing agencies. Administratively, the consultants' presence and impartiality generally served to facilitate interagency coordination and cooperation, despite such difficulties as might be expected given the (three-agency) nature of the project design. Technically, the approach taken served to enhance agency achievement and technology transfer in project implementation planning for each individual agency, in development and modification of detailed designs and specifications (water supply and sanitation facilities), and in prequalification and tendering assistance (materials, equipment, civil works, other consultants). Specific problems which occurred and would probably have benefited from closer attention of the consultants included delays in successful implementation of contracts for manufacture of plastic toilet bowls, at least one observed breach of Bank procurement policy, and slow agency compliance with Bank financial reporting and audit requirements. 3. Planning. General planning assistance provided included review of the initial provincial master plans prepared and incorporation of the pertinent information from them (e.g., rural water and sanitation facility requirements, unserved population) into detailed investment programs (covering contracting arrangements, training and community development activities, implementation schedules, and monitoring indicators). However, delays in locating sources of grant funding for subsequent batches of Master Plan preparation eventually resulted in the FW4SP investment programming activity overtaking the broader master planning activity. 4. An updated Water Supply, Sewerage and Sanitation Sector Master Plan will be prepared under ADB grant funding starting in 1998, with the National Economic Development Authority (NEDA) as the Executing Agency. The role of the consultants under FW4SP was to provide inputs for such a plan, which was accomplished in a series of meetings between NEDA and the consultants, and by closely involving NEDA in the activities of the PCC in the early and middle stages of the project, where they were kept informed of the FW4SP's successes and travails. Such experience undoubtedly helped to shape NEDA's philosophy for implementation of future sector projects, which now appears to be more closely focused on community-based approaches to rural water supply and sanitation. 50 Appendix C Consultant 5. Monitoring and Evaluation. Consultant field teams were frequently employed to conduct independent checks of implementation progress, and to monitor and evaluate construction, installation, operation and maintenance, with aspects of particular relevance from such activities being recorded in the respective quarterly reports. Monitoring indicators on physical project accomplishment were also maintained by the consultants and input into a computer data base (and reported in the consultants' quarterly reports) for the duration of the project. A broader range of indicators intended to quantify correlations between physical project accomplishment and less obvious aspects of project accomplishment were also developed early in the project, but less effectively maintained throughout, as the personnel responsible for their development left the project in the early stages and were apparently succeeded by less skilled or experienced personnel. In the latter stages of the project, the consultant assisted the three implementing agencies to organize additional surveys and conduct data analysis, which helped to mitigate information gaps which might otherwise have occurred. 6. A baseline survey suitable for conducting an environmental health impact assessment was also conducted by the consultants at about the time that the project's household latrine subcomponent was just starting to show meaningful progress, but to date follow-up assessments have been limited to presumed correlations between such impacts and measured physical accomplishment. A detailed follow-up survey conducted during the project's operations phase (preferably some months after completion of installation of the household latrines) might provide a more accurate correlation. 7. Reporting. Compliance with reporting requirements is considered generally successful. Monthly and quarterly reports were diligently prepared by the consultants, incorporating the results of the ongoing monitoring efforts in relation to the planned program of work, with data obtained from each of the implementing agencies and from consultant field teams. Typically, these routine reports addressed summaries of progress and project achievements, planning and scheduling of activities, particular difficulties encountered and plans for resolving them, field activities undertaken, and accomplishment of monitoring indicators. A variety of other reports were also prepared in accordance with both explicit requirements of the Terms of Reference, and with respect to a variety of both routine and special activities conducted by the consultants (e.g., project data base, prequalification and tender evaluation, environmental health impact baseline survey, evaluation of special items of materials and equipment). 8. Training and Technical Assistance. The consultants participated extensively in training activities throughout the project implementation period. Training manuals and courses developed and conducted directly by the consultants covered all aspects of water supply and sanitation facility design and construction; much training assistance was also given during Government-sponsored training events in community development. The consultants also assisted in the development of health and hygiene educational materials, and in conducting skills training in the operation and maintenance of Level I water supply facilities. Some training activities in the foregoing topics were also conducted for private sector participants, but were severely limited by availability of funding and are not considered particularly successful. Summary Assessment 9. The consultant's main objective of contributing to the successful implementation of the Project was achieved. Contributions made in the planning, implementation and administration of project activities assisted to improve both the timeliness and quality of project implementation. Capabilities of the implementing agencies were enhanced in several areas as a direct result of the 51 Appendix C Consultant consultant's activities, particularly in the design and construction of water supply facilities. Health and hygiene educational materials prepared with consultant assistance are finding use throughout the project area. Attempts to broaden private sector and local government capabilities have also been at least partly successful. The professional observations of the consultant gained over the entire project implementation period have helped both the implementing agencies and World Bank to perform a more comprehensive and impartial evaluation of the project, and to develop meaningful recommendations for improving the performance of future sector projects. 10. The approach taken by the consultants was not without a few problems worth noting: (a) Inputs of some of the expatriate technical experts employed, particularly with respect to computer applications and financial systems, were expended early in the project, on the (overly optimistic) assumption that the necessary technology transfer would have been completed by then. It would have been better to have provided for intermittent inputs from such personnel through a considerably longer period. (b) Three team leaders were employed over the duration of the project, which likely adversely affected continuity of liaison with the Government, and continuity of the consultants' technical activities generally. (c) Team composition strongly emphasized expatriate personnel with strong technical skills (as opposed to community development expertise), and local personnel with extensive previous government agency service (as opposed to international consulting experience), which may have lessened the level of community development assistance, and some other aspects of technology transfer. IBRD 27553 116~~~~~~~~~~ 120 524 1200~~~~~~~~~~~~~~~~~~~~~~~~~~~0 ~~ 1 laces Norle 38 ALlan 200~~~~~~~~~~~~0 100 :10 ~ 20 2 laces 5cr 39 Capia ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ UA4E 36L no 0Aniu AAE 4 a3 snn 1bbNTONLCPTl CORDILLERA ADMINISTRATIVE 42 Ne~~~~~~~~~~~~~~~~~~~ras Occidental~~~~~12 REGION (CAR) 43 Gaimaras~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~6 S Abra VII CENTRAL VISAYAS PROVINCE BOUNDARIES~~~~~~6 6HINAInaAaa 44Cb 7 Mountain Pranisce 45 Negras Oriental - - REGION BOUNDARIES~~~ 8 lbjgaa 46 Babel~~~~~~~~~~~~~~~IW99 mI [5F
Группа Всемирного банка · Implementation Completion and Results Report
Philippines - First Water Supply, Sewerage, and Sanitation Sector Project
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