Turkey - Koykent Development Project

Report No. PID11361 Project Name Turkey-Koykent Development Region Europe and Central Asia Region Sector General education sector (20%); Health (20%); Roads & highways (50%); Water supply (10%) Project ID TRPE77324 Implementing Agency Address: Eskisehir Yolu 10 Km. Lodumlu-Ankara Contact Person: Mr Sait Cingi, Deputy General Director Tel: 90-312-287-3360 Fax: 90-312-287-8098 Email: topraksu@khgm Treasury Contact Person: Mr Ersen Ekren, Director General, General Directorate of Foreign Economic Relations Environment Category F Date PID Prepared July 9, 2002 Auth Appr/Negs Date September 13, 2002 Bank Approval Date November 28, 2002 1. Country and Sector Background BackgroundTurkey's rural population consists of about 25 million people (39% of the population) with the remainder living in urban and semi-urban areas. The economic crisis of February 2001 resulted in reduced household incomes and increased hardships for the rural population, especially the poor. The landless poor in rural areas have been affected by a decline in construction and other informal job opportunities whilst the poor with land are beset by increased input costs due to inflation. In 2001, about 10.13 million rural residents were wage earners, distributed across the following economic activities: agriculture (71%), industry (7%), construction (5%) and services (17%). There are big differences in poverty incidence among regions. The average household income per capita in the richest region is three times the income in the poorest region. Income differentials across regions and social groups are wide and persistent. Inequality between regions can be traced to a number of factors, most importantly to differences in sector structure and in productivity across sectors. Lagging regions exhibit much lower productivity within agriculture than richer regions due to differences in resources (lack of fertile land, animals, inadequate infrastructure, labor, capital and the absence of basic education and health services). Poorer provinces are typically those with the lowest capital-to-land and land-to-labor ratios, and with the least access to public infrastructure (roads and water). Many rural poor live in the remote upper watersheds of local streams and rivers and rely on livestock and rangeland for a large part of their income. Many poor living in these remote areas are physically removed from local markets and access is difficult especially  in winter when they might be isolated for days due to poor weather conditions. Rural Infrastructure ServicesAdequate infrastructure and good quality infrastructure services combined with appropriate rural development policies will support growth. In the rural communities of Turkey, physical access to neighboring villages and markets has been a key impediment to growth. Lack of proper roads has also resulted in isolation of communities and has resulted in inadequate delivery of social services mainly education and health. Other basic infrastructure services water, wastewater, irrigation, power, and telecommunication are also not adequate at the local level. A recent survey indicates that the urban population, in general, receive better infrastructure services. Only 759 of rural households have access to an adequate supply of clean drinking water. Close to 100l of the rural population has electricity, although the power supply is unreliable largely due to faults in the distribution system that affect both the availability and frequency of supply. Rural Social ServicesEducationA Basic Education Law was adopted in 1997 that extends the period of compulsory basic education from five to eight years and raises new tax revenues to finance a vast expansion of infrastructure to accommodate the expected increase in basic education enrollments. In rural areas, the gains were dramatic: boys' enrollment in grade six increased by 62W; girls enrollment increased by 162%. However, a continuing obstacle to improving school attendance is the high turn-over rate for teachers in remote, rural areas. Access to education is generally influenced by a combination of a few main factors: availability and quality of services, affordability of education and the perceived economic benefits from education. In rural areas, not all children have easy access to primary or secondary schools located nearby and during winter road conditions are particularly bad. For the poorest, the direct and indirect cost of education (e.g. books, transportation, loss of income) is a real burden. HealthThere are wide disparities in access to care on a regional and urban/ rural basis, as well as amongst different income groups. Access to heath in rural areas has a number of dimensions, mainly availability of infrastructure in the forms of roads, running water and facilities, the ability to pay, proximity of health facilities. Many villages lack a health post and in many cases, rural health posts are not functioning because they lack staff. Also, in many villages, roads are closed for weeks during the winter. This has resulted in a wide gap in health indicators between urban and rural populations. As funding to the sector has become scarce, hospital expenditures have increasingly crowded out funds for primary care. As a result, health services in rural areas have been cut back substantially. The Government's StrategyThrough the Koykent project, the Government intends to upgrade the quality of life in rural areas as the larger benefits of the ongoing economic and financial reform programs materialize. Koykent is a Turkish word and its literal translation is 'village-township'. The Government has already initiated four Koykent pilot projects in rural communities. The first pilot Koykent site is located in the sub-province of Mesudiye and has targeted a community of nine villages. A basic component of this project - about 70- of the costs - was to connect the villages with roads so that there would be better access among the population. Further, the construction of roads brought the community together and economies of scale were achieved so that better quality services could be provided.The Mesudiye community is now receiving better infrastructure services (water, electricity, telecommunication etc). A fully functional health care center has been provided to help vaccinate the population and provide the community with - 2 -  easy access to basic care, for which the population had to travel greater distances in the past. The school for all the children in the community is now well staffed and equipped and does not have multi-grade classrooms, that were previously common in each village. A wood products factory is operational and has created jobs in the area. Other programs, supported by the Government and NGOs, have provided opportunities for economic growth. Details of the Koykent Ordu-Mesudiye pilot project can also be found on the following Government website: www.mesudiye.gov.tr. After the successful operations in Mesudiye, more than a hundred rural communities have indicated their willingness to the Government to start a Koykent project. The Government will support a few of these proposals based on socio economic needs of the community. Through the experience gained in these sites the Government plans to prepare and implement an integrated Rural Development Strategy which will improve the quality of life in rural areas and promote growth. The Koykent project uses participatory approaches to involve end beneficiaries in the project design and implementation. This type of a participatory approach is relatively new to Turkey but is expected to yield sustainable development. The Rural Development Strategy will take into account the experience of the participatory approach followed in the project. 2. Objectives The project development objectives are to (i) improve infrastructure services; (ii) improve social services; and (iii) support income generation activities. The project will be targeted towards the poor rural communities and contribute towards sustainable rural development in Turkey 3. Rationale for Bank's Involvement The Bank is also able to bring experience and knowledge from implementing rural development and social fund projects in other regions to the Koykent project, thus helping to ensure a replicable and sustainable project design. The Bank has experience in Turkey for all the sectors to be covered under the project. The sectors to be covered under the project are also core competences of the Bank. The Bank has considerable experience in infrastructure and social sectors in Turkey and is aware of country issues in these sectors. Further, the Bank team that will work on Koykent will be primarily drawn from the teams working on the other ongoing activities to ensure consistency in approach and to use the existing Bank's knowledge of Turkey. 4. Description The project would be participatory in nature. Based on a needs assessment, a Community Commitment Charter (CCC) would be prepared which has to be acceptable to the population. A social assessment will be used to identify the needs of the villagers, their proposed solutions to identified problems and their willingness and ability to contribute to the project. Special emphasis will be placed on gender issues in the social assessment to ensure that the views of women are incorporated into project design and implementation. It is envisaged that the project will have three main components to support the development objective. Component 1: Improvement in Infrastructure Services. Given the Koykent concept to bring a cluster of villages together, roads will be a key component of the project and is expected to account for most of the costs. The infrastructure component will mainly include the development and - 3 -  rehabilitation of rural roads, water and sanitation systems. Component 2: Improvement in Social Services. The connection of the villages in a cluster through roads will create economies of scale that would make investments viable to establish a central health and educational facility serving multiple villages. The component will include rehabilitation of rural schools and provisions for vocational training. Health facilities will be upgraded to be a fully serviced center with resident doctors and support staff and ambulance facilities.Component 3: Promote Income Generation. The project will support extension services to increase income levels in a community. The extension services would focus on agricultural activities such as fruit and vegetable production, animal husbandry, market development, bee-keeping etc. The project will also support temporary employment opportunities for the local communities during the construction period. Component 4: Rural Development Strategy. Technical assistance will be required for the preparation of the Rural Development Strategy as well as for preparation activities related to the above components.Project CostsThe total project cost and the financing plan have not yet been finalized. A Project Preparation Facility (US$900,000) has been provided to the Government to help with project preparation. 5. Financing Total ( US$m) BORROWER $0.00 IBRD $0.00 IDA Total Project Cost $0.00 6. Implementation Project ImplementationA Project Management Unit (PMU) under the General Directorate of Rural Services will be responsible for overall project coordination. The PMU will be independent from the GDRS to ensure that there is no over-representation of activities typically addressed by the GDRS (roads and water). The Bank financing would be made available for activities implemented by the following agencies: a) GDRS; b) Ministry of Education; c) Ministry of Health; d) Ministry of Agriculture or possibly ORKOY ("Orman ve Koy Iliskileri Genel Mudurlugu" - General Directorate for Forest and Village Relations) for the income generating component. The PMU will sign a protocol agreement with these agencies regarding the preparation and implementation of the project. The protocol agreement will outline the roles and responsibilities of the PMU and the various agencies. Implementation of the project will be the responsibility of these agencies and ministries who will coordinate their activities through the PMU and in consultation with the local community. The PMU will be responsible for overall coordination and will work with the related agencies on matters related to project preparation and implementation. The PMU will be led by a Project Director who will report to the Deputy General Director of GDRS who in turn will report to a State Minister in the Prime Ministry's Office. A Steering Committee, comprising members from various ministries, will advise the PMU as needed. There would be a total of 6 staff in the PMU in the initial period comprising: financial specialist, accountant, social scientist, procurement specialist, translator, and a secretary. The process for selecting PMU staff has started and it is expected that by 10 July 2002, the Director of the PMU would be appointed. Funds from the Project Preparation Facility will be used to pay for the PMU Director and the staff. Although the PMU staff - 4 -  has not yet been selected, the project preparation is underway. The GDRS has taken the lead in project preparation and will continue to do so until the PMU is in place.Project Area The project will focus in areas that are poor, as identified by indicators such as access to infrastructure such as roads, water, and electricity as well as health, education and economic indicators. These indicators will be compared with the UNDP's Human Development Indicators, which are available at the provincial level for Turkey. Preparation activities have started in two sites in the provinces of Van and Duzce. Project Implementation PlanThe Project Implementation Plan (PIP) that will be developed will outline the process to be followed for the use of loan funds. The steps in the PIP will comprise: STEP 1 - Initial Screening of Applications To narrow the list of potential sites for Koykent. This screening will help to identify potential sites that can be supported under the project. The screening will be completed using socio economic data in Turkey.STEP 2 - Second Stage Screening of Applications To prepare a short list of sites where project preparation can begin. The second level of screening will be based on: a) population size - at least 4,000 people in a group of villages; b) initial assessment of the nature of social issues; c) initial assessment of environmental issues; and d) presence of user groups such as water user association or other measures to demonstrate that the community is willing to work together to reach the Koykent objective.STEP 3 - Social Assessment and Community Commitment Charter Through a social assessment process identify the needs of the community, their proposed solutions to address the problems and their willingness and ability to contribute towards the project. This will be carried out in two phases by consultants, supervised by the PMU and relevant Government agencies. A Community Commitment Charter will be developed and signed by community representatives and will include: priority and type of investments, willingness to pay indicators, institutional arrangements at a local level, and baseline data.STEP 4 - Feasibility Studies Complete the feasibility study of the proposed investments, based on the inputs provided by the community. For each of the identified investments, the feasibility study will ensure that a) cost effective solutions are considered for the conceptual design; b) the institutional arrangements are adequate to ensure sustainability of investments; c) there is an Environmental Management Plan, meeting Bank standards and approved by the Turkish authorities; and d) a Social Action Plan, if needed, to address the Bank's social policies.STEP 5 - Sub-project Appraisal At this stage sub-project appraisal would be completed and financing secured. Based on the feasibility study, the sub-project will be appraised based on economic, technical, financial, environmental, and social considerations. The financing of the sub-project from the Bank, local sources, and the Government will also be secured.STEP 6 - Detailed Design The detailed design will be completed and bidding documents will be issued. Detailed design will be based on the feasibility study. Bank procurement procedures will be followed for bidding. STEP 7 - Implementation and Monitoring To ensure effective project implementation and that Project objectives are met. This will be provided through the proper supervision of contractors and the use of the Project Monitoring System to measure progress. The Project Monitoring System, including financial management features, will be used to measure progress in all of the above steps and will help to track the flow of funds and physical progress. To determine project progress it is essential to establish a centralized monitoring system that will track activities under each sub-project. The system will include: status of - 5-  social assessment; status of feasibility study; status of design; sources of financing and flow of funds at the sub-project level; procurement: status of the bidding process, contract information, physical progress; disbursement status; performance benchmarks for each sub-project to determine whether the objectives of the project are being met; an overall reporting system; and making project information available to the public to ensure transparency. Certification of this Monitoring System is a condition of presentation of this project to the Bank's Board. 7. Sustainability The Bank has been involved in similar integrated rural development projects in the past and the experience has been mixed in meeting the project objectives. Experience in other parts of the world has shown that sustainable outcomes can be achieved if the community is involved in the design of investments, shows its willingness to pay both for investments and operations, and can afford to contribute based on local economic conditions. Based on this experience in the past, the project design emphasizes two areas: a) participatory approach towards the design and implementation of the project; and b) establishing realistic project objectives. Under this project, a strategic decision has been taken to support the Koykent vision and overall rural development by ensuring good quality and sustainable infrastructure and social services. In this project, emphasis will be placed on involving communities in defining and designing projects as well as their implementation. This will bring a significant amount of human, social and physical capital at the local level. Through the project the community will strengthen links to local government institutions, markets and credit that will enable individuals and community organizations to diversify their livelihood, to influence local government, and facilitate local resource allocation and mobilization. A Community Commitment Charter will be developed and signed by community representatives. It will also be endorsed by the local Governor and/or Sub-Governors. The charter will include: priority and type of investments. This will also outline a plan for the land acquisition, as needed for the roads. The Bank's safeguard policies will be followed;willingness to pay indicators, including arrangements for opening a bank account with upfront contributions from the villagers before project implementation; institutional arrangements at the local level to ensure efficient implementation and sustainability of investments; andbaseline data at the village level and Performance Benchmarks to measure the success of Koykent. This information, along with project implementation information, will be made available to the public. 8. Lessons learned from past operations in the country/sector On the basis of similar projects in the region and elsewhere, the following lessons have been incorporated into project design:There should be transparency and consistency in the application of selection criteria and procedures. Projects should be demand driven and community based. To ensure project sustainability, communities should be able and willing to work together and should demonstrate a willingness to pay for a proportion of the costs. The design must ensure that the time allowed for participatory planning and implementation is sufficient and effectively used. Investments should be phased and affordable for communities. Rigorous monitoring and evaluation systems should be put in place. 9. Program of Targeted Intervention (PTI) Y - 6 -  10. Environment Aspects (including any public consultation) Issues The project will be designed to meet the environmental assessment requirements of Financial Intermediary operations outlined in the Bank's Operational Policy (OP 4.01). Prior to appraisal, an assessment will be conducted of the social safeguard and environmental regulatory framework as well as the existing institutional capacity to implement this framework. The assessment will build upon the draft Environmental Assessment (EA) capacity review that has been prepared by the Bank for Turkey. This review identified a number of specific aspects that require further attention: quality of EA reports, the review process and the qualifications of consultants; coordination between authorities; screening; scoping; monitoring and enforcement; public participation and land use planning. These issues will be further explored, and mechanisms will be proposed to address them prior to appraisal. Institutional capacity will be assessed to assure that the environmental aspects of sub-projects are addressed in a manner that is acceptable to the Bank.The institutional arrangements for sub-projects including the mechanisms and responsibilities for environmental screening, classification, review, disclosure and consultation will also be developed prior to appraisal. The PMU's staff will include an environmental specialist with specific responsibility for environmental issues. The PMU will screen proposed sub-projects during project preparation to ensure that they meet national, local and World Bank environmental requirements. They will also ensure that implementing organizations carry out appropriate environmental assessments for each sub-project. In addition, the PMU will monitor the compliance of each sub-project with government and World Bank social and environmental requirements. An operations manual will be prepared that will describe the procedures and institutional arrangements for environmental screening, assessment, consultation and disclosure. This will be disclosed in-country and at the Bank's Infoshop prior to appraisal. 11. Contact Point: Task Manager Sudipto Sarkar The World Bank 1818 H Street, NW Washington D.C. 20433 Telephone: + 1 202 473 6661 Fax: + 1 202 614 0902 12. For information on other project related documents contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Web: http:// www.worldbank.org/infoshop Note: This is information on an evolving project. Certain components may not be necessarily included in the final project. -7 -