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Implementation Completion Report (ICR) Review - Sri Lanka: Puttalam Housing Project


  
1. Project Data:   
ICR Review Date Posted:
05/07/2013   
Country:
Sri Lanka
PROJ ID:
P100390
Appraisal
Actual
Project Name:
Sri Lanka: Puttalam Housing Project
Project Costs(US $M)
 34.2  25.2
L/C Number:
C4261
Loan/Credit (US $M)
 32.0  23.3
Sector Board:
Urban Development
Cofinancing (US $M)
 0  0
Cofinanciers:
Board Approval Date
  02/20/2007
 
 
Closing Date
06/30/2011 12/30/2011
Sector(s):
Housing construction (52%), Water supply (31%), General public administration sector (7%), Flood protection (5%), Roads and highways (5%)
Theme(s):
Pollution management and environmental health (25% - P) Conflict prevention and post-conflict reconstruction (25% - P) Urban services and housing for the poor (24% - P) Social safety nets (13% - S) Personal and property rights (13% - S)
         
Prepared by: Reviewed by: ICR Review Coordinator: Group:
Kavita Mathur
George T. K. Pitman Soniya Carvalho IEGPS1

2. Project Objectives and Components:

a. Objectives:
The project development objective as stated in the Project Appraisal Document (PAD, page 2) was:

        "to support the integration of Internally Displaced Persons in Puttalam by upgrading and improving the habitat, water and sanitation facilities of both Internally Displaced Persons and selected non-Internally Displaced Persons, and providing eligible Internally Displaced Persons in refugee camps with housing".
According to the Financing Agreement (page 4) the objective of the Project was:
        "to assist the Recipient in contributing to the social and economic integration of Internally Displaced Persons in Puttalam by upgrading and improving the habitat, water and sanitation facilities of Beneficiaries and providing eligible Internally Displaced Persons with permanent housing".
The review uses the objective statement from the Financing Agreement as it is more specific.

The project development objective was revised in November 2009. The revised objective was:

        "to support the integration of Internally Displaced Persons in Puttalam by upgrading and improving the habitat, water and sanitation facilities of both Internally Displaced Persons and select non-Internally Displaced Persons, and providing eligible Internally Displaced Persons in refugee camps and a limited number of non-Internally Displaced Persons in the host communities with housing.
The revised objective is essentially the same as the original Financing Agreement objective except the target for beneficiaries for housing was expanded to include a limited number of non-Internally Displaced Persons in the host communities.

b. Were the project objectives/key associated outcome targets revised during implementation?
Yes

If yes, did the Board approve the revised objectives/key associated outcome targets? Yes

Date of Board Approval: 11/11/2009

c. Components:
Original Components
1: Housing Assistance (appraisal estimate US$16.1 million, actual cost US$17.6 million). "This component would provide grants apportioned across the 141 refugee camps in Puttalam District. The housing support cash grant would be Rs. 250,000 to construct a new house and Rs.100,000 to complete construction of a partly-completed house. The release of the grant installments to beneficiary bank accounts would be contingent upon meeting specified construction milestones as verified by technical officers, and the beneficiary would have six months to complete construction. It was expected that the housing component would be phased over four years with 1,463 houses targeted for completion in 2007; 2,201 houses in 2008; 2,031 in 2009; and 2,190 houses in 2010. If there was a risk of building material scarcity, the project would facilitate (where requested) the procurement of construction material in bulk to mitigate the risk of price escalation, supply constraints and unsustainable resource extraction. Beneficiaries, however, would retain the prerogative to independently procure their own materials if they choose to.

A household within a refugee camp would have to meet certain criteria to be entitled to housing Assistance: (i) It must have title to land; (ii) the head of the household and the majority of household members must live in the camp (according to United Nations High Commissioner for Refugees (UNHCR) Survey 2006 and Social Assessment 2006); (iii) the household should not have a permanent house in Puttalam or received similar housing assistance in its place of origin (iv) It should have had a temporary or partly-completed house within a camp as of April 2006 (according to UNHCR Survey). If the household had no clear title to the land on which the non-permanent house is situated, it should have at least possessed land as at such date where the title could be subsequently regularized prior to construction.

Prescriptive deeds would not be acceptable as this would trigger IDA'S operational policy on land acquisition and would therefore not be included under the Credit. The deed of prescriptive title under Sri Lankan law stipulates that a person or family encroaching on private land without interruption for 10 years can claim ownership and can automatically have absolute ownership after 20 years.

Some IDP communities living in environmentally unsustainable camps might need to be relocated on a voluntary basis. Should the situation arise, the Government was expected to provide alternate land with legal title. An Environment and Social Safeguards Framework includes guidelines to prepare a Resettlement Action Plan should the eventuality arise at a future date. The District Secretariat was to ensure adherence to the government’s environmental guidelines on the extraction of resources."

At restructuring, following revisions were made to the component 1 "Housing Assistance":

  • The size of the housing grant for temporary houses was increased from Rupees 250,000 to Rupees 325,000 to ensure consistency across this and the North East Housing Project.
  • The 2009 restructuring extended the benefits of Component 1 from only the Internally Displaced Persons in selected refugee camps to an additional number non-Internally Displaced Persons households in adjacent communities across four divisions in Puttalam district. This change aimed at improving social cohesion across communities served by the the Project by allowing a larger number of households to be eligible for assistance.

2: Water, Sanitation, Environment Mitigation, and Settlement Plans (appraisal estimate US$15.9 million, actual cost US$5.8 million).The component would provide water and sanitation to 136 refugee camps and select non IDP villages. The National Water Supply and Drainage Board (NWSDB) undertook a concept feasibility study to map groundwater sources, report on water availability, water quality, and source yield. Based on this study, pumping sites would be strategically located within a demarcated zone and safe water distributed to refugee camps and non IDP villages through a system of storage tanks and pipes, or pumped through tube wells. The type of scheme would depend on location and ground water condition. Stand posts would be considered the basic level; however households opting for a higher service level such as yard taps and or house connections would be able to do so provided they pay the additional cost for the higher service level and the source yield is adequate.

The project would provide drinking water to 13,584 IDP families and 3,291 non IDP families. Where services would be provided through connecting pipelines, existing permanent houses which would not be entitled for housing assistance would be brought under the local water and sanitation sub-projects. The population living in the vicinity of the water source (off-camp source) and villages en route to the transmission pipe would be included under the project where necessary to ensure wider community participation in sustainable water supply.

All 7,885 IDP households that receive housing support cash grants would construct appropriate latrines. The grant includes provision for the toilet.

3: Capacity Building and Monitoring (appraisal estimate US$0.8 million, actual cost US$1.3 million).The component will support a comprehensive technical assistance program to ensure smooth implementation. This will include: (a) Housing Assessment Survey, (b) Land Task Force. (c) Continuous Social Impact Assessment, (d) Technical Audit, (e) Communications Campaign, (f) Skills Training, and (f) Environmental Audit.

4: Project Management (appraisal estimate US$1.3 million, actual cost US$0.9 million). The component will provided project management and implementation support for the project. The IDA Credit would finance the incremental operating costs of the Puttalam Project Unit (PPU) . The incremental operating costs include: (a) Project management costs, (b) PPU staff salaries including travel costs, per diem for PPU staff, vehicle maintenance, fuel and insurance costs, costs of supervision field visits (travel costs and per diem), office supplies and communications expenses and such other administrative expenses arising through Project implementation, but excluding salaries o f the Recipient’s civil servants, and (c) the grievance redressal mechanism (that is travel costs and per diem for grievance redressal mechanism members).

d. Comments on Project Cost, Financing, Borrower Contribution, and Dates
Project cost and Financing:

  • Total project cost was US$25.2 million at closure, 74% of the appraisal estimate of US$34.2 million. The main reduction was in Component 2 (Water, Sanitation, Environment Mitigation, and Settlement Plans) as four out of twelve planned water supply schemes were not constructed due to lack of water source. In addition, at restructuring, an amount of US$ 0.9 million was reallocated from the physical contingencies under water and sanitation to the housing grant category. This implied that out of US$ 17.0 million for the housing component, a total of US$ 1.84 million was allocated to finance non-Internally Displaced Persons housing.
  • At appraisal, IDA committed 21.7 million Special Drawing Rights (SDRs), equivalent to US$32.0 million. At project completion, 5.99 million SDR was cancelled, and the net disbursement was SDR 15.71 million, equivalent to US$23.3 million.

Borrower Contribution: US$2.2 million, the same as the appraisal estimate.

Dates: The closing date was extended by six months from June 30, 2011 to December 31, 2011 to complete pending activities under the infrastructure component.


3. Relevance of Objectives & Design:

a. Relevance of Objectives:
Original objectives: High.
Project objectives were and remain relevant to the needs of Sri Lanka. After the cessation of civil conflict in 2006, the majority of Internally Displaced Peoples (IDPs) were housed in the district of Puttalam in north west Sri Lanka where 63,145 persons (or 15,480 families) lived in 141 refugee camps. Of these, 41% were children under the age of 18 who had known no other home than Puttalam. Due to security considerations, 96% of the IDPs in Puttalam indicated that they intended to settle down there and not return to the North, and almost three-quarters of them had bought land in Puttalam demonstrating a resolve to remain there. Of the IDPs in Puttalam displaced since 1989, 5,653 families lived in temporary thatched houses, 2,232 families in partly-completed houses and 1,093 families in permanent houses. Another 6,501 families, who are largely the married children of the original IDPs had no house of their own and lived with their extended families. Therefore, a total of 12,154 new houses and completions 2,232 of partially constructed units was required to address the housing needs of the Puttalam IDPs. Additionally, the refugee camps lacked access to safe drinking water, sanitation, drainage, health care and education. The refugee camps in Puttalam were initially anticipated to be of temporary duration and there was no investment in basic infrastructure. Thus project objectives to provide drinking water, sanitation and environment management was relevant as it was intended to upgrade the refugee camps into sustainable habitat and integrate them with the surrounding communities.

The objective of the project remains relevant to the Bank's Country Partnership Strategy for the period FY 2013-16 which aims to support improvements in living standards and social inclusion in order to ensure the benefits of rapid growth and higher quality services are broadly shared. Activities in this area include restoration of basic infrastructure, housing construction, and cash for work as well as support for starting new businesses in the conflict affected regions of the country.

The project objective was in line with the Government's development strategy to rehabilitate the conflict affected areas and encourage the return of Internally Displaced Persons.

Revised objectives: High.

The project objectives were restructured due to the emerging tensions between the host communities and the Internally Displaced Peoples. The project development objective was revised to include a limited number of the non-Internally Displaced Persons households in adjacent communities across four divisions in Puttalam district. The restructuring was intended to facilitate improvement of social cohesion within communities served in the project areas.

b. Relevance of Design:
Original design: Modest.
The direct financing of activities aimed at the rehabilitation of the basic infrastructure such as water and sanitation and housing, and roads was relevant to assisting economic and social reunification. Selection criteria for beneficiary selection were relevant, as were the inclusion of social grievance mechanism, provision to move from environmentally hazardous areas and measures to mitigate cost-escalation. There was, however, no clear causal chain between these activities, their expected outputs and the attainment of the development objectives of social and economic integration.

Revised design: Substantial.

After the project approval, the Government pointed out that the United Nations High Commissioner for Refugees (UNHCR 2006) Survey had omitted those Internally Displaced Persons households who in fact had a temporary house but were classified as those without a temporary house and, therefore, had been omitted from the list. The Government found, through surveys and an Independent Housing Damage Assessment that a number of deserving families met the selection criteria and that the proportion of the temporary houses and semi-built houses is slightly different from that surveyed by the UNHCR 2006 Survey. In response to tensions between the host communities and the Internally Displaced Persons regarding housing reconstruction, the project was restructured to include limited number of host communities for housing grants. Thus the revised design removed some of the impediments to economic and social reunification.


4. Achievement of Objectives (Efficacy) :

Original Objective
To assist the Recipient in contributing to the social and economic integration of Internally Displaced Persons in Puttalam by upgrading and improving the habitat, water and sanitation facilities of Beneficiaries and providing eligible Internally Displaced Persons with permanent housing. The project objective comprises two sub-objectives: (a) social integration and (b) economic integration. These are discussed below.

(a) To assist the Recipient in contributing to the social integration of Internally Displaced Persons: modest

Outputs

The project assisted in upgrading and reconstructing the houses of IDPs. About 98 percent of the targeted housing units were constructed within the allocated budget, with some initial delays in implementation. The project facilitated construction of 4987 new houses (compared to the original target of 5653 and revised target of 4350) and 1493 semi-permanent houses (compared to the target of 2232).

In some cases the quality of housing construction was poor. The implementation Unit increased the number of Technical Officers to improve the quality of construction (ICR p. 10). Also, support was provided to female headed households who were facing difficulties in completing their houses.

Water and Sanitation facilities were improved to a limited extent. The project assisted in providing safe drinking water to about 40 percent of the target number of families. The target was not achieved because four out of twelve planned water supply schemes were not constructed due to lack of water source.

The project provided water connections to 3754 families in 69 camps and 2373 families in 19 host villages. The sanitation sub-component contributed to construction of latrines for 6934 new and reconstructed houses. In addition, it facilitated construction of 1669 latrines as part of the sanitation grant to the Internally Displaced Persons and community toilets in schools, and health centers.

Outcomes

The projects assisted in the formation of the Community Based Organizations. These organizations contributed to social integration by creating an enabling environment through which different segments of the Internally Displaced Persons and non-Internally Displaced Persons managed the water supply assets as a common property in Puttalam. The Community Based Organizations received basic training in water quality monitoring. The ICR does not provide figures for the number of Community Based Organizations that were established. In terms of O&M of the water supply schemes, the CBOs were trained to better manage water supply schemes. However, the ICR (p. 17) reports that institutional support to the CBOs would be required to ensure sustainability.

The ICR (p. 38) reports that benefits of improvements in water and sanitation included reduction in health related expenditures and thus savings in treatment of diarrhea disease and value of less workers falling sick with diarrhea. Other benefits to the consumer of water and sanitation services include value of time savings due to access to water and sanitation and possible other indirect benefits like household switch away from more expensive water sources However, it does not provide any evidence.

The habitat of IDPs was improved. Rehabilitation of the houses was the only way to return the refugees to their place of origin. The provision of housing to the Internally Displaced Persons improved social integration as the IDPs could search for work.

(b) To assist the Recipient in contributing to the economic integration of Internally Displaced Persons: substantial

Outputs

About 149 km of roads were improved. The ICR reports that the improvement of access roads and drainage facilitated increase in economic activity and thus, indirectly contributed to job creation. The improvements in roads enhanced connectivity within the camps and between the camp and the nearby trading towns in Puttalam.

The project assisted in developing construction skills among the Puttalam IDPs which they used to build their houses and provide labor for others. About 500 workers benefited from the skills training program.

Revised Objective

To support the integration of Internally Displaced Persons in Puttalam by upgrading and improving the habitat, water and sanitation facilities of both Internally Displaced Persons and select non-Internally Displaced Persons, and providing eligible Internally Displaced Persons in refugee camps and a limited number of non-Internally Displaced Persons in the host communities with housing - is rated substantial.

The outputs and outcomes for the revised objective for the Internally Displaced Persons are the same as for the original development objective. For the non-Internally Displaced Persons 519 houses were completed out of the target of 600.


5. Efficiency:

At appraisal it was assumed that there was a multiplier effect of new housing construction i.e. each dollar spent on construction would lead to wage increase of about US$ 0.34 in the local economy in Puttalam. It was expected that about 543 jobs would be created as a result of the housing construction. The skills training program was expected to increase individual incomes of the job-training beneficiaries by an average of about US$ 1,115 per annum.
By completion, the project facilitated construction of 5441 new houses and 1493 semi-permanent houses. About 500 construction workers were trained. The direct benefits include the value of the new housing stock and the incremental value of the reconstructed housing stocks. The indirect benefits from the project included multiplier impacts of wage incomes of construction workers generated from the housing construction. It is expected that the values of the houses constructed would appreciate over time in the project area at an annual rate of 6 percent. In order to compute the multiplier impacts of wage income and construction expenditures a multiplier of 1.4 was used in this analysis. It is assumed that the trained workers would earn additional wage incomes for the next 15 years of their productive life.

At an 8 percent rate of interest and 4 percent appreciation in house values, the Benefit: Cost ratio was 3.75. The Net Present Value at an 8% discount rate was Rs. 6,096 million.

The water and sanitation investments yielded slightly lower returns measured in terms of Benefit: Cost ratio and Net Present Value of cost and benefit streams. At 8% rate of interest the Benefit: Cost ratio was 2.3, which which is lower than the housing component Benefit: Cost ratio of 3.75. At a higher discount rate of 12 percent the project returned a Benefit: Cost ratio of 1.87.

Weak capacity of the PPU resulted in not only inadequate focus on implementation, but also limited coordination with other agencies concerned with environmental planning process. Also, Project Unit contributed to delayed responses to several critical aspects of implementation of water supply schemes, particularly with regard to procurement contracts. There were key weaknesses in financial management of the project were (i) internal audits were not conduct in a timely manner as the audits were done by GoSL staff. The internal audit department of the MOR lacked the incentives for performing the project internal audits and (ii) late submission of quarterly Financial Monitoring Reports to IDA and delays in submission of external audit reports.

Overall, the project efficiency is rated modest.

a. If available, enter the Economic Rate of Return (ERR)/Financial Rate of Return at appraisal and the re-estimated value at evaluation:


Rate Available?
Point Value
Coverage/Scope*
Appraisal:
No
%
%
ICR estimate:
No
%
%

* Refers to percent of total project cost for which ERR/FRR was calculated

6. Outcome:

Original project outcome (based on the disbursement of 40.6% of project funds): Moderately Satisfactory. The relevance of the original objectives is rated high, while that of the original design is assessed as substantial. Efficacy is assessed as substantial. Progress was achieved in improving social and economic integration through project supported rehabilitation of sections of the roads and providing housing rehabilitation. However, four out of twelve planned water supply schemes were not constructed and the project assisted in providing safe drinking water to about 40 percent of the target number of families. About 500 construction workers were trained a result of the housing construction. The skills training program is expected to increase individual incomes of the job-training beneficiaries by an average of about US$ 1,115 per annum.

Revised project outcome (based on 59.4% of project funds): Moderately Satisfactory. Relevance of the revised objectives is rated High, while that of the revised design is rated Substantial. As discussed above, four out of twelve planned water supply schemes were not constructed and the project assisted in providing safe drinking water to about 40 percent of the target number of families.

Since the outcome rating both before and after restructuring is Moderately Satisfactory, overall outcome is assessed as Moderately Satisfactory.

a. Outcome Rating: Moderately Satisfactory

7. Rationale for Risk to Development Outcome Rating:

The risk to the development outcome is rated significant for the following reasons:
  • The sustainability of the water schemes is contingent upon the quality of the source and the availability of water. The challenge is that the water table has further gone down and two of the four wells have dried out. Although these concerns can be mitigated, it would require additional resources to dig deep wells as well as periodically monitor and address the water quality issues.
  • As the houses were transferred to beneficiaries, it is expected that the project beneficiaries would take full responsibility for maintaining their houses. However, if there is major flooding, it will adversely affect the sustainability of some housing investments. The flooding risk is high as some Internally Displaces Persons settlements are situated in low lying areas. There was no clear mitigation plan at project closure.
  • The capacity of the local authorities to maintain the roads rehabilitated under the project is weak.

    a. Risk to Development Outcome Rating: Significant

8. Assessment of Bank Performance:

a. Quality at entry:
The project design was based on the experience of other operations in post-conflict situations. Specifically, the project benefited from the North East Housing Reconstruction Project (closed in 2011) and the Tsunami Emergency Recovery Credit (closed in 2011) supported by IDA. The approaches applied in these operations which were adopted in the project design included: home owner demand driven design; continuous oversight by communities as well as district and central government authorities; and adherence to fiduciary and social safeguard policies. Risks were appropriately identified and mitigation measures were included in the appraisal document. The design of the housing component (at appraisal) did not pay adequate attention to the problem of the non-IDP poor households, an issue that caused initial tensions between the Internally Displaced Persons and host communities.

Quality-at-Entry Rating: Moderately Satisfactory

b. Quality of supervision:
The Bank team provided technical assistance on all implementation aspects (safeguards, fiduciary, other technical and engineering designs) and carried out on-site field visits. The task team regularly met with various stakeholders, and tried to enhance coordination among implementing agencies. Regular supervision missions were carried out (at least two per year). The supervision missions included financial, social and sector specialists. The ratings reported in the Implementation Status and Results Reports were realistic. As mentioned in quality at entry, the design of the housing component (at appraisal) did not pay adequate attention to the problem of the non-IDP poor households, an issue that caused initial tensions between the Internally Displaced Persons and host communities. This was rectified during the restructuring at mid-term.
The Monitoring and Evaluation system was deficient with regard to outcome monitoring. The implementation of environmental safeguards was inadequate. There were shortcomings in the Redressal mechanism. The extent of Involuntary Resettlement or Cultural Property safeguard is not know.

Quality of Supervision Rating: Moderately Unsatisfactory

Overall Bank Performance Rating: Moderately Satisfactory

9. Assessment of Borrower Performance:

a. Government Performance:
The Government sought to encourage the Internally Displaced Persons to return to their place of origin where possible, and to otherwise integrate them in their new location. The Government committed US$2.2 million towards the project. The External Resource Department of the Government provided oversight of the project.
The performance of the Ministry of Resettlement was moderately satisfactory. The Ministry's efforts at coordination, policy making on Internally Displaced Persons in Puttalam and advocacy, and providing strategic guidance for project implementation were inadequate. There were delays in provision of electricity, particularly for Palliwasturai water supply scheme. These negatively affected the provision of water supply to the beneficiaries served by the water scheme.

Government Performance Rating: Moderately Satisfactory

b. Implementing Agency Performance:
The key implementing agency was the Puttalam Project Unit (PPU). The initial start up of implementation was very slow, particularly, with regard to the water supply and roads construction components. Weak capacity of the Project Unit contributed to delayed responses to several critical aspects of implementation of water supply schemes, particularly with regard to procurement contracts.

  • The implementation of environmental safeguards was inadequate. This was mainly due to the weak capacity of the Project Unit. The position of the senior environmental specialist experienced high staff turnover and the long periods in between recruitments witnessed poor and inadequate implementation of the Environmental Management Plan.
  • There were shortcomings in the Grievance Redressal Mechanism. The ICR reports that the Project Unit claims to have addressed all forms of grievances. However, the ICR (on page 12) raises the issues of objectivity with which these Grievances were addressed as the Project Unit was both the assessor and judges. In practice, there was limited use of information on the Grievance Redressal Mechanism by the public despite efforts to display information on the websites, Project Unit's office and in all the Village Rehabilitation Committees information centers
  • There was no reporting on Involuntary Resettlement or Cultural Property safeguards implementation (see sections 11 and 15).

Implementing Agency Performance Rating: Moderately Unsatisfactory

Overall Borrower Performance Rating: Moderately Satisfactory

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

a. M&E Design:
The results framework included mostly output indicators such as number of housing units reconstructed within specified time and allocated budget, percentage of cash grants disbursed, number of water supply schemes commissioned, kilometers of roads surfaced, and number of land titles regularized. The only outcome indicator included was the kilometers of roads in good condition.

b. M&E Implementation:
The ICR reports that more than one year into project implementation, the M&E system was not functional. The Project Task Team informed IEG that the M&E system prepared by the consultant was very complicated. The Project Unit in parallel developed an in-house database to capture the physical and financial progress of the project implementation. However, some of the indicators were not tracked systematically during implementation.

a. M&E Utilization:
The data collected was regularly used by the Project Unit to prepare periodic reports to inform the Government and the Bank on ongoing implementation progress of the project. The ICR reports (page 12) that the database can be used in policy analysis, but this initiative has not been undertaken.

M&E Quality Rating: Modest

11. Other Issues:

a. Safeguards:
The project was assigned to Category "B" under OP4.01 Environmental Assessment. In addition OP4.12 Involuntary Resettlement, and OP4.11 Cultural property were invoked. The project was expected to have limited negative environmental and social impacts as the project aimed to support on-site construction for those households with legitimate ownership of land in environmentally safe areas. According to the Integrated Safeguards Data Sheet, no involuntary resettlement or land acquisition was expected in the housing component since eligibility for grants included proof of existing land rights and the project does not comprise new settlements or relocation. However, minor acquisition of government land may have been unavoidable in connection with the environmental mitigation plans and the provision of water supply to the camps and adjacent non-IDP communities. About 111 sites out of the 141 sites were subject to an Environmental Assessment based on information collected through a questionnaire. According to the appraisal document, this would guide the preparation of an Environmental Management Plan to identify the potential environmental impact and mitigation measures needed in each refugee camp. A detailed Environmental Impact Assessment would only be required if the questionnaire had identified a serious environmental issue at a given site which would need to be investigated in further detail.

The ICR reports that stakeholder consultations and the disclosure of the Environmental Management Framework were an integral part of the safeguard assessments. Consultations were carried out with the district officials, village administrators and extensively with the Internally Displaced Persons. The Environmental Management Framework was disclosed to the public locally as well as through the Bank’s Infoshop.

The implementation of environmental safeguards was inadequate. This was mainly due to the weak capacity of the Puttalam Project Unit (ICR page 15). The position of the senior environmental specialist experienced high staff turnover and the long periods in between recruitments witnessed poor and inadequate implementation of the Environmental Management Plan.

The Task Team clarified that environmental safeguards were complied with. The inadequacy referred in the ICR (ICR page 15) was regarding the challenge or difficulty in monitoring environmental issues. The ICR does not report on the implementation of the Involuntary resettlement safeguards.

The ICR does not report on Cultural Property safeguard.

b. Fiduciary Compliance:
There were some weaknesses in the financial management of the project. The internal audits were not conducted in a timely manner. The quarterly Financial Monitoring Reports were submitted late to the Bank. Also, there were delays in submission of external audit reports. However, the external audit report carried out by the Auditor General of Sri Lanka did not reveal any major accountability issues or internal control weaknesses.

c. Unintended Impacts (positive or negative):
None reported.

d. Other:
None reported.



12. Ratings:

ICR
IEG Review
Reason for Disagreement/Comments
Outcome:
Moderately Satisfactory
Moderately Satisfactory
 
Risk to Development Outcome:
Significant
Significant
 
Bank Performance:
Satisfactory
Moderately Satisfactory
Quality at entry is rated moderately satisfactory. However, the quality of supervision is rated moderately unsatisfactory. Overall Bank performance is moderately satisfactory based on IEG/OPCS harmonized criteria. 
Borrower Performance:
Moderately Satisfactory
Moderately Satisfactory
 
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.
- The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate.

13. Lessons:
The following three lessons are drawn from the ICR with some adaptation:
  • The projects that provide basic infrastructure such as housing, water, sanitation, and roads (which are closely related to each other) require integrated planning covering technical design aspects, staffing, and sequencing of implementation. For example, the National Water Supply and Drainage Board was contracted to study the sanitary situation in the IDP settlement. The study was expected to provide timely and suitable solutions. However, it took long to finalize and was not sequenced with the rest of the project activities (ICR page 16). There were delays in completion of roads contracts, partly because these were closely linked to the completion of some water schemes.
  • The homeowner driven approach coupled with necessary technical assistance fosters ownership of the program among participants. The homeowner driven approach provided an effective platform for beneficiary participation and as a result, the houses not only conformed to technical specifications but also met the preferences of the beneficiaries.
  • Community involvement through community based organizations especially for the management of water supply assets that are common property water can promote social integration. The project experience showed that both host and Internally Displaced Persons can work together to share and manage water assets.

From IEG: Grievance Redressal Mechanism should have an independent assessors and judges. The assessor and judge should not be the same unit as it may compromise the objectivity with which the grievance issues are addressed (ICR page 12).

14. Assessment Recommended?

No

15. Comments on Quality of ICR:

The ICR is satisfactory, but inadequately outcome oriented. The lessons are based on project experience. The ICR did not use the OPCS criteria for rating the Bank and the Borrower Performance. Also, the ICR does not report on the implementation of the Involuntary Resettlement or Cultural Property safeguards. The ICR is relatively long, about 26 pages. Overall, the quality of the ICR is moderately satisfactory.

a. Quality of ICR Rating: Satisfactory

(ICRR-Rev6INV-Jun-2011)
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