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Implementation Completion Report (ICR) Review - Land Administration Project


  
1. Project Data:   
ICR Review Date Posted:
03/14/2006   
PROJ ID:
P007174
Appraisal
Actual
Project Name:
Land Administration Project
Project Costs(US $M)
 70  69.5
Country:
El Salvador
Loan/Credit (US $M)
 50  49.92
Sector, Major Sect.:
Central government administration, Law and justice, Sub-national government administration,
Law and justice and public administration; Law and justice and public administration; Law and justice and public administration
Cofinancing (US $M)
 20  19.58
L/C Number:
L3982      
   
Board Approval (FY)
  96
Partners involved
 
Closing Date
06/30/2002 06/30/2005
         
Evaluator: Panel Reviewer: Division Manager: Division:  
Lauren Kelly
George T. K. Pitman Alain A. Barbu IEGSG

2. Project Objectives and Components:

a. Objectives
The Land Adminstration Project (LAP) had two objectives: (a) regularize land registration for El Salvador’s estimated 1.6 million parcels of rural and urban land; and (b) create an efficient, streamlined, and financially self-sustaining nation-wide cadastral mechanism for mapping and land registration – the new National Registry Center (CNR).

b. Components (or Key Conditions in the case of Adjustment Loans):

(i.) Institutional Strengthening and Decentralization (planned US $10.6 million; Actual US $16.7 million or 24% of project cost): Establish institutional framework, structure and procedures for the introduction of an integrated, nation-wide mapping and land registration system; maintenance of records after regularization and strengthen related legal framework through the promotion of key legal reforms.

(ii) Land-data Acquisition (Planned US $48.7 million; Actual US$41.3 million or 59% of total costs): Divided into three subcomponents (mapping, land records regularization, and alternate dispute resolution), this component aimed to acquire new land data for cadastral purposes, verify and regularize land rights on identified parcels and consolidate data for input into the Land Information System (LIS) and establish mechanisms to resolve conflicts.

(iii) Project Management (Planned US $8.7 million; Actual US $9.4 million or 14% project cost ): Strengthen and expand the Project Executing Unit (PEU) that was created under the PRISA pilot.

(iv) Project Preparation Facility (Planned US $2million; Actual US $2.1 million or 3% of totoal project costs).

c. Comments on Project Cost, Financing, Borrower Contribution, and Dates
While there were no revisions in project or component objectives, formal reallocations among disbursement categories were made and the project closing date was extended twice for a total of three years. Reasons provided for the extensions include difficulties encountered with the procurement of three large land regularization contracts and the occurrence of several natural disasters during the 1998-2001 period.


3. Relevance of Objectives & Design:

LAP's relevance is substantial since its objectives are mostly consistent with the country's development priorities. While supporting comprehensive land titling and registration is a relevant objective in line with El Salvador's agrarian policy dialogue with the Bank in the early nineties as reflected in the 1993 CAS.

4. Achievement of Objectives (Efficacy) :

The overall Efficacy of LAP is rated as Substantial.


(A) Regularize land registration for El Salvador’s estimated 1.6 million parcels of rural and urban land. Efficacy is rated Substantial since LAP was only able to regularize 66% of its target parcels due to higher than predicted costs, attributable to inadequate experience and capacity of local firms, difficult terrain and the extent of training that was required for technical and juridical staff from CNR and private contractors -- which led to delays in implementation.

(B) Create an efficient, streamlined, and financially self-sustaining nation-wide cadastral mechanism for mapping and land registration – the new National Registry Center. This objective was fully achieved by more than half and itts Efficacy is rated as High. Recognized as a best practice in the Central American region, the project successfully improved national and local capacity for land administration (mapping and land registration) through the consolidation and streamlining of the National Registry Center. The now fully functioning automated and decentralized information system has improved records management, reduced the number of days needed to register standard real estate transactions; the number of visits required for service users has been reduced by 133%, and reportedly, transaction costs have been reduced but there is inadequate information available in the ICR to support this claim. While registration fees have increased by 27%, the ICR did not provide any information on the fee structure prior to the project. This is important since the sustainability and the projected financial viability of the institution will in part rely on these fees. Meanwhile, the transparency and accountability that has resulted from this project is noteworthy.


5. Efficiency:

The ICR did not conduct economic analysis; no ERR was calculated. Instead, the ICR discusses (1) cost of activities and (2) a Financial Rate of Return (FRR). Overall, the efficiency of the project is rated as substantial.


Actual costs /ha. were greater than the SAR estimates, but costs were still lower when compared to costs in similar countries ($200/ha in Indonesia and $80/ha in Thailand). Estimated SAR costs equaled $40/ha - actual costs wereUS$85/ha. The ICR points to the reduction of time needed to register a real estate transaction (from 38 to16 days) as the primary quantifiable benefit of the project, but without information about the number of landowners (scale) that have benefitted and the actual number of days saved due to the project -- this indicator is not a sufficient measure of the project's efficiency.

(2) The Financial Rate of Return was double that of the estimated cash flow analysis: It was estimated that additional revenue directly attributable to the project would total US $12.2 million between 1996-2003 and at least US$2.6m each year thereafter. Reported analysis suggests that CNR's positive cash flow between 1996-2003 was US$24m, more than twice the estimate.

Annex 3 provides a Summary of Economic Costs and Benefits, but expected benefits are calculated (projected) over a 20 year period. However it is unclear if the analysis includes the costs and benefits of LAP I and LAP II or only the benfits for both projects and the cost of LAP I.

6. M&E Design, Implementation, & Utilization:

The Impact Indicators Annex (G) attached to the SAR is an excellent example of an early results-based monitoring system -- it sought to establish baselines and monitor project objectives across a six year period by clearly delineating inputs (source) against the SAR targets. However, this system was not implemented. Annex 1 provides a table of Key Performance Indicators - in effect a Log Frame Matrix for the project. It reveals the absolute lack of baseline data used by the project as well as the fact that the indicators were indeed limited to outputs as suggested by the ICR author.

The ICR provides inadequate information about the project's M&E system -- the little information that is provided suggests the system was inadequate. The ICR mentions that "difficulties were initially encountered in the operation of CNR's manual M&E system", that "a complete and adequate baseline study was lacking," and on p. 14 that the indicators "were not adequate to measure the impact of the project since they focused on physical and financial outputs." Although the ICR states an "action plan to adjust and upgrade the system and update existing baseline information was designed and implemented" -- the ICR provides no description of how the resulting "satisfactory" M&E system was designed, who was involved (beneficiaries?), how often monitoring occurred, how reporting took place, how findings and lessons were reported and or managed by CNR, the project team etc.

In terms of assessing impact, ICR Section 4.1 develops a logic chain that asserts that property owners whose real estate has been regularized and registered in the cadastre and registry system have secure property rights, and that as a result of this secure tenure, owners in both rural and urban areas have had better access to the formal credit market. An Impact Evaluation -- Carrach 2005 (ICR p. 5 Footnote Ref. 6) then reports that project beneficiaries in one geographical area accessed credit more often than non-project beneficiaries in another geographical area -- it reported that project beneficiaries in Sonsonate accessed formal credit markets more often than non-project beneficiaries in Usulutan. These findings are not very useful without accompanying information about the factors that were isolated and compared. For example, why were beneficiaries and non-benficiaries in the same department of Sonsonate not compared? Why simply was there no data provided on the percentage of the beneficiary population that accessed credit prior to the project versus during and/or after? etc. Also, there is no discussion considering whether credit obtained was used for 'investment' or 'better land management' versus recovery and rehabilitation after the aforementioned natural disasters. Attribution may also be an issue: concurrent efforts (USAID, for example) to improve the institutional capacity and sustainability of FIs, increase the number of their offices in rural areas, and increase the savings of poor rural clients were ongoing during project implementation. IFAD's TA in the Northeast also involved financial service development.
7. Other (Safeguards, Fiduciary, Unintended Impacts--Positive & Negative):

Unintended positive impacts resulted from this project. Useful maps and property information was provided to several relevant govt. ministries to aid in damage assessment after the natural disasters of this time period. National Police were trained in the use of cartography which is necessary to develop an emergency system. The Ministry of Economy is using CNR data to carry out the national census.

8. Ratings:
ICR
ICR Review
Reason for Disagreement/Comments
Outcome: 
SatisfactorySatisfactory
Institutional Dev.: 
HighHigh
Sustainability: 
Highly LikelyLikelyFinancial Sustainability is likely - while the project has increased the flow of income from CNR user fees LAP I did not target poor areas. The retention of certified and trained CNR staff will be crucial. Key regulatory and legal reforms are still required to ensure sustainability of LAP's achievements. Also, since the project was not as successful at decentralizing service provision at the municipal level as it had planned, the sustainability of the parcel-based property registry and more efficient land administration services country-wide will depend on future cooperative municipality agreements.
Bank Perf.: 
SatisfactorySatisfactory
Borrower Perf.: 
SatisfactorySatisfactory
Quality of ICR: 
Satisfactory

NOTES:
- When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006.
- ICR rating values flagged with ' * ' don't comply with OP/BP 13.55, but are listed for completeness.

9. Lessons:

The single land agency modeled in LAP I can improve the efficiency of registration and maintenance of updated information. It has the potential of reducing rivalries and conflicting interests between competing land agencies that are simultaneously responsible for implementing land administration projects.


The integration of the cadastre, property, intellectual, and commercial registries contributes can contribute to an improved investment climate, especially when the merged central agency is supported by a Board of Directors that provide collective political leverage to achieve regulatory and legal measures necessary to complement and sustain reforms.

Land Administration projects that provide adequate financing for mapping, including aerial photography and field surveys, can aid governments in the face of natural disasters. Also, this component can help law enforcement agencies develop emergency response systems. Meanwhile, this component can also assist in the identification of high value environmental areas and the demarcation of protected areas

Automation and Internet access to land records offers citizens a transparent and accountable system of title registration and maintenance. Initial training and capacity building costs are necessarily incurred. However, accompanying manual efforts may be needed to assist El Salvador's (high) illiterate population. Decentralization of such systems can greatly promote regularization at lower costs.

Use of the private sector (surveying) and NGOs for land regularization (through competitive contracting) can generate efficiency gains and cost savings.

Land regularization and titling alone do not spur land investments and facilitate land access.


10. Assessment Recommended?  Yes

          Why?  After LAP II is completed to review the combined Pilot-LAP I-LAP II contribution. Or, as a cluster of Land Administration Project Audits in Central America as input into the upcoming ARD review. A key question is how repicable the model is for the LAC countries.

11. Comments on Quality of ICR:

The ICR is of satisfactory quality overall. It points to such design weaknesses as M&E and a lack of beneficiary targeting, and the overestimation of the number of beneficiaries that could be reached. However, it would have benefited from a discussion of partner programs, constraints regarding rural finance beyond achieving secure tenure, and a thorough discussion of risks related to legal and regulatory obstacles that may or may not have been solved during the preparation and signing of LAP II.

Also, the ICR (p. 7) notes that the project had a positive impact in terms of increased land investments and productivity and improved land management practices but goes on to state that "such improvements were not systematically recorded and therefore it was difficult to quantify and compare the 'with' and 'without' project scenarios. The reviewer found insufficient analysis or evidence in the ICR to recognize these recorded achievements. The "economic analysis" referred to on p. 7 of the ICR was not available as an annex to the ICR, but even then it is difficult to understand how this project would have led to a "more efficient banking system."

(ES-Rev4B-Dec/05)
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