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Implementation Completion Report (ICR) Review - Car - Policy Support Project


  
1. Project Data:   
ES Date Posted:
02/14/2005   
PROJ ID:
P064149
Appraisal
Actual
Project Name:
Car - Policy Support Project
Project Costs(US $M)
 8.5  1.39
Country:
Central African Republic
Loan/Credit (US $M)
 8  1.39
Sector, Major Sect.:
Central government administration, Law and justice, Telecommunications, Power,
Law and justice and public administration; Law and justice and public administration; Information and communications; Energy and mining
Cofinancing (US $M)
   
L/C Number:
C3360      
   
Board Approval (FY)
  0
Partners involved
 
Closing Date
08/31/2004 06/24/2004
         
Prepared by: Reviewed by: Group Manager: Group:  
Michael R. Lav
Fareed M. A. Hassan Kyle Peters OEDCR

2. Project Objectives and Components:

a. Objectives
To provide technical assistance in the implementation of the previously approved Fiscal Consolidation Credit.

b. Components
Provision of technical assistance for: (1) Privatization (bringing the energy and telecommunications companies to the point of sale/lease) and regulation program, US$3.87 million; (2) Poverty Reduction Strategy, US$2.03 million; (3) Implementation of Statistical Development Plan, US$0.35 million; (4) Strengthening the capacity of the Ministry of Mining, US$0.55 million; and (5) Support to the Technical Committee for Structural Adjustment (which was in charge of the reform program), US$ 0.6 million. In addition, US$0.35 million of the credit was allocated to reimburse the Project Preparation Facility, and US$0.75 million was allocated to contingencies. While it would normally be desirable to provide actual expenditures rather than appraisal estimates, the ICR does not provide adequate information for this to be done.

c. Comments on Project Cost, Financing and Dates
The project cost US$1.39 million financed by an IDA credit for US$8.0 million, of which US$6.61 million was cancelled. The project was appraised in April, 2000, approved by the Board on May 30, 2000, made effective on April 6, 2001, and closed on June 24th, 2004, 2 months ahead of schedule, in view of the lack of progress in implementation.


3. Achievement of Relevant Objectives:

None

4. Significant Outcomes/Impacts:

None

5. Significant Shortcomings (include non-compliance with safeguard features):

As the country was in default on its IDA repayments during much of the project's time framework, disbursements were interrupted for all but about 6 months during project implementation. The attempted coup several weeks after project effectiveness and ensuing civil strife greatly impinged on project performance. (1) The energy company was not brought to the point of lease and the telecommunications company was not restructured nor brought to the point of sale. The framework for these sectors was not revised. While the Government put in place interim management contracts for the energy and telecommunications companies with the objective of protecting their assets and increasing their efficiency prior to privatization, the monitoring of the contracts was ineffective. (2) While there was some progress in preparation of an interim poverty reduction strategy, the deterioration of security in the country following the aborted coup d'etat in 2001 negated any further progress. However, the government sought to continue work even after IDA disbursements stopped. IDA assisted in this effort and UNDP funding was obtained which allowed production of a set of policy notes if not the Poverty Reduction Strategy as had been foreseen under the project. (3) While the parliament approved a new statistical law as part of implementing the Statistical Development Plan, implementation has been slow, the overall quality and timeliness of statistics remains poor, and the training component was never started. (4) A draft mining law as prepared and approved but it does not meet international standards. There has been no progress in the installation of a functioning cadastre system. (5) While the Technical Committee for Structural Adjustment functioned for a time with salary support from the IDA credit, with the suspension of disbursements the committee lost most of its capacity. A final shortcoming is the timing of the project, coming after the Fiscal Consolidation Credit, while much of the technical assistance which the project intended to provide would have been more beneficial had it been provided earlier in the FCC project cycle.
6. Ratings:ICROED ReviewReason for Disagreement/Comments
Outcome:
UnsatisfactoryHighly UnsatisfactoryNone of the project's objectives were achieved.
Institutional Dev.:
NegligibleNegligible
Sustainability:
Highly UnlikelyHighly Unlikely
Bank Performance:
SatisfactoryUnsatisfactoryThe project's conditions of effectiveness (especially establishment of satisfactory accounting and financial management systems for the project) were mispecified and should have been formulated as conditions of Board presentation, especially in the risky environment present in the CAR. Another concern is the timing of the PSP which, as noted in section 5 above, followed the Fiscal Consolidation Credit. Technical assistance should have preceded adjustment lending, not followed it. The project's allocations appear to have been inadequate to support serious work. For example, only US$0.55 million was allocated to strengthen the capacity of the Ministry of Mining. Finally, supervision was inadequate to support serious technical work, as it was almost entirely limited to the Country Economist.
Borrower Perf.:
UnsatisfactoryUnsatisfactoryThe Borrower neither implemented the program as foreseen, nor serviced previously incurred IDA debt, so that the project's disbursements were curtailed, thereby bringing to a halt even those few components of the project in which some progress might have been achieved. However, the Government did continue work on a poverty reduction strategy even without direct IDA support.
Quality of ICR:
Satisfactory

7. Lessons of Broad Applicablity:

Especially in risky circumstances, projects should contain minimal conditions of effectiveness, and such conditions as establishment of satisfactory accounting and financial management systems should be formulated as conditions of Board presentation. In this case, this mispecification of conditionality led to a one year delay in effectiveness. The Bank should use a LICUS approach (coordinating financing and policy reforms very closely with other donors) with realistic expectations when facing risky conditions as in the CAR.

8. Audit Recommended?  No

          Why?  

9. Comments on Quality of ICR:

The ICR is clearly and frankly written, and the overall quality of the ICR is satisfactory.

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