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Implementation Completion Report (ICR) Review - Municipal Services Project


  
1. Project Data:   
ICR Review Date Posted:
12/04/2013   
Country:
Romania
PROJ ID:
P088252
Appraisal
Actual
Project Name:
Municipal Services Project
Project Costs(US $M)
 170.6  225.0
L/C Number:
L4835
Loan/Credit (US $M)
 131.7  131.56
Sector Board:
Water
Cofinancing (US $M)
   
Cofinanciers:
Board Approval Date
  07/24/2006
 
 
Closing Date
06/30/2011 03/31/2012
Sector(s):
Roads and highways (39%), Flood protection (23%), Water supply (17%), Sewerage (16%), Central government administration (5%)
Theme(s):
Other urban development (29% - P) Urban services and housing for the poor (29% - P) Pollution management and environmental health (14% - S) Municipal governance and institution building (14% - S) Regional integration (14% - S)
         
Prepared by: Reviewed by: ICR Review Coordinator: Group:
Maha J. Armaly
Robert Mark Lacey Soniya Carvalho IEGPS1

2. Project Objectives and Components:

a. Objectives:
The project development objective in the Project Appraisal Document (PAD, page 3) is identical to that in the Loan Agreement: "The objective of the project is to assist the Borrower to meet EU [European Union] environmental directives in the water and wastewater sector, thereby improving the quality and coverage of water and wastewater services, mainly through: (i) support of infrastructure in the municipalities of Bucharest and Arad to provide better water and wastewater services and improve stormwater management, and (ii) preparation of priority water and wastewater projects in eleven (11) counties."

The Board approved a restructuring of the project in January 2008, and objective was revised to state: "The objective of the Project is to assist the Borrower to meet EU environmental directives in the water and wastewater sector, thereby improving the quality and coverage of water and wastewater services, mainly through: (i) support of infrastructure in the municipalities of Bucharest and Arad to provide better water and wastewater services and improve stormwater management, and (ii) preparation of priority water and wastewater projects in selected counties."

This review considers the statement of objective to be substantially unchanged before and after restructuring, and does not therefore undertake a split evaluation.

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: 01/28/2010

c. Components:
Original Components: The project had three components:
Component 1: Urban Services in Bucharest Municipality (appraisal cost: US$91.6m equivalent, revised estimate at restructuring US$133.1m equivalent, actual cost: US$128.5m equivalent) included: (i) works and goods for the provision of new urban services including water, sewerage, drainage and road surfacing in priority neighborhoods; (ii) technical advisory services to prepare bidding documents and for construction supervision, and to support the Municipality of Bucharest to implement the project and complete financial audits. Two changes were made to this component at restructuring: (i) the remaining funds under the Baneasa neighborhood were re-allocated to all other remaining neighborhoods; and (ii) the share financed by the Municipality of Bucharest increased from €74 million to €93 million due to rising cost of civil works.
Component 2: Urban Services in Arad Municipality (appraisal US$62.4m equivalent; revised estimate at restructuring US$105.4m equivalent , actual US$78.3m equivalent) included: works and goods for the provision of new urban services including sewerage, drainage and road surfacing in priority neighborhoods; (ii) technical advisory services to prepare bidding documents and for construction supervision, and to support the Municipality of Arad in implementing the project and completing financial audits. Two changes were made to this component at restructuring: (i) changes in legislation no longer allowed Arad Municipality to select competitively a water and wastewater operator (which had been a covenant in the Loan Agreement), but to use the one selected by the county; and (ii) revision of component costs.
Component 3: Project Preparation for the EU (appraisal US$16.2m equivalent; revised estimate at restructuring US$18.7m equivalent ; actual US$ 17.8m equivalent), implemented by the Ministry of Environment and Water Management (MoEWM), included technical advisory services in two phases: (i) data collection and assessment of current situation, development of a master plan at the county level identifying investment needs, carrying out detailed feasibility studies (including economic and financial analysis, institutional analysis, Environmental Impact Assessment (EIA) studies, and financing plans), and the preparation of applications for accessing EU Cohesion and Structural funds; and (ii) elaboration of the complete tender dossiers for the services, goods and works contracts required for the implementation of selected infrastructure investment projects. Also included in this component are (a) institutional strengthening and training to MoEWM and relevant beneficiary institutions in the counties, and (b) project audits. At restructuring, the number of counties included was reduced to from 11 to 10.

d. Comments on Project Cost, Financing, Borrower Contribution, and Dates
Project costs. Project costs increased during the early stages of implementation due to inflationary pressures and variations in exchange rates. Costs were adjusted among the components during the restructuring. The Government provided the additional funding needed to cover the increased costs (ICR p. 5). Project costs increased from the estimated €131.7 million at appraisal to €166.67 million at completion – an increase of 21%.
Financing. The IBRD loan was denominated in Euros (€106.2 million, equivalent to US$ 131.7 million at appraisal) and was fully disbursed. Due to increased project costs, Bank financing dropped from 77.4% to 66.1% of total project costs.
Borrower Contribution. The Borrower’s contribution increased from Euro 31.4 million to Euro 60.56 million (93%) to cover the increased costs.
Dates. The project was appraised in May 2006, and became effective in May 2007. Effectiveness was delayed due to delays in ratification of the Loan Agreement by Parliament. The original closing date of June 30, 2011 was extended to March 31, 2012 to enable the Bucharest Municipality to complete the remaining civil works contracts.


3. Relevance of Objectives & Design:

a. Relevance of Objectives:
Substantial. The Country Partnership Strategy for Romania (CPS) for the period Fiscal Years 2010-2013 reaffirms the country’s goal of achieving convergence with the EU on all social and economic fronts. The November 2011 CPS Progress Report indicates that the overarching objective of CPS implementation remains to support Romania’s convergence with the EU. In 2007, Romania became a member of the EU. Given its continued reliance on EU Structural and Cohesion Funds to pursue the regional policy agenda, Romania's Environment Operational Program includes key infrastructure services such as water and wastewater. Therefore, the Project objectives, and the intended outcomes and capacity building acquired remain relevant.

However, the second development objective -- preparation of priority water and wastewater projects in eleven counties -- is output oriented and limited to the identification and preparation pf projects for EU funding. The actual outcomes in the form of enhanced coverage and service quality, will not materialize until 2015.

b. Relevance of Design:
Substantial. Design combined infrastructure improvements to meet EU standards, with the preparation of future projects. This approach involved both accumulating knowledge and experience in project preparation and implementation and actual delivery of services. The results framework was simple and designed to capture the achievements of the project in contributing to EU directives. The outcomes of the project's components are directly related to achieving the objectives of meeting EU standards in (a) infrastructure investments that resulted in connections to improved water, sanitation and drainage services; and (b) preparation of investment plans for future EU grant investments in the sectors. The targets were set to monitor the number of beneficiaries and connections and are responsive to EU directives. The target for the second component was the number of counties finalizing investment plan documents ready for EU funding.


4. Achievement of Objectives (Efficacy) :

(i) Improving the quality and coverage of water and wastewater services and improve stormwater management, mainly through support of infrastructure in the municipalities of Bucharest and Arad. Modest.
Outputs:
  • In Bucharest, 74.5 kilometers of water mains, distribution and service pipes were constructed; 24 kilometers of sewerage mains, two pumping stations for the unitary sewerage network, three wastewater pumping stations, and four pre-treatment installations were built; and, in order to improve stormwater off take, 51.2 kilometers of roads were improved (target. 49.3 kilometers), along with 102.6 kilometers of sidewalks (no target) and the construction of 29.96 kilometers (target 28.12 kilometers) of storm water drains.
  • In Arad, 89.5 kilometers of sewerage mains were constructed; 89.4 kilometers of roads were improved (target 84 kilometers) along with 146.3 kilometers of sidewalks; and 72.4 kilometers of storm water drains were built (target 81 kilometers).
Outcomes
  • In Bucharest, 3,605 incremental households were connected to piped water supply (target 3,566 households), and there were 3,077 incremental sewerage connections (target 3,208). According to the ICR (page 13), the actual number of household connections for both water supply and sewerage would be more than reported, since connections to apartment complexes are counted as one.
  • The incremental beneficiary population is estimated at 27,105 (target 24,449). The increased volume of piped water sold as a result of the project was 1,254 thousand m3 per year (target 1,249 thousand m3). The increased volume of sewage collected was 1,129 m3 per year compared to the target of 1,124 m3.
  • In Arad, there were 6,460 incremental household sewerage connections (target 7,400 households). According to the ICR (page 13), “technical design changes during implementation resulted in a new assessment of the number of targeted households. The three [targeted] neighborhoods were fully covered and all households had a sewerage connection.”
  • The incremental beneficiary population is estimated at 23,331 (target 23,238). The increased volume of sewage collected was 1,746 m3 per year, in accordance with the target.
  • In neither city does the ICR report on measurement of improved quality of water supply or of sewerage service. The ICR (page 12) states, in explanation of this, that Romanian legislation regarding private operators places the responsibility to supply and monitor water quality on the operators, and achieving satisfactory quality is part of the operator mandate once assets built under the project are handed over to them. The quality standards included in the operator mandate were reportedly in line with European Union (EU) directives, and the ICR states on page 17 that EU directives concerning both water supply and sewerage were met. Nonetheless, it would have been appropriate to have included independent evidence of enhanced quality, particularly since this is part of the development objective.
  • Although the ICR refers (page 14) to “accrued health benefits to the communities in both Arad and Bucharest,” and to "attracting investment in real estate thereby increasing the demand and property values," neither of these is quantified.

(ii) Improving the quality and coverage of water and wastewater services through preparation of priority water and wastewater projects in selected counties. Substantial.
Outputs
  • Project-financed technical assistance was deployed for the preparation of grant applications for projects in the 10 designated counties included master plans, feasibility studies involving site investigations, assessments and management plans to ensure environmental soundness, procurement strategies, tender documents, and preparing EU documentation.
Outcomes
  • Through the approved grant applications, and based on a project component of €13 million, the Government was able to leverage about €900 million in grants from the European Union for water and sanitation and related projects in the ten counties. The financing represents about one third of the total budget of €2.8 billion allocated for Priority Axis 1 of the Sector Operational Program.
  • The projects to be financed by the grants were not part of the output of the project under review. According to the ICR (page 15), the outcomes in the 10 counties are expected to materialize by 2015 and would include 237,000 more people with access to water services; 512,000 more people benefiting from wastewater collection and treatment services; and eventually increasing the water and wastewater connection rate meeting EU standards from 80% to 99% and from 63% to 96% respectively.

5. Efficiency:

The ICR presents cost-benefit analyses undertaken at appraisal and completion of water and wastewater works in Bucharest (for both existing and new developments) and wastewater works in Arad. The same methodologies and models are used so that the results are comparable.
For water and wastewater, incremental revenues from water services and from property taxes are used as a proxy for benefits and compared to final capital investment and O&M costs. The ex-post economic rate of return (ERR) was 12.9% in Arad compared to 6.2% at appraisal. In Bucharest, the ex-post ERRs for two groups of investment were 10.1% and 15.7%, compared with ex ante ERRs of 9.4% and 12.3% respectively. The use of incremental future property taxes as a proxy for benefits may be over-estimating the benefits, since there may be several reasons for improved property prices and increased property taxes. On the other hand, quantified benefits exclude improved health, reduction in pollution, reduced technical losses, lower energy usage, and diminished flood risk (ICR pages 16 and 31).

For road paving, the Road Economic Decision Model developed at the World Bank was used. The main benefits included savings in vehicle operating costs and travel time costs and reductions in road maintenance costs. The ex-post ERR was 19% in Arad (21% ex ante) and varied between 2% and 12% in Bucharest (7% to 14% ex ante).

There is an error in the ICR, acknowledged by the project team, where an overall ERR is arrived at by simple, unweighted addition of the ERRs for water and waste water on the one hand and those for roads on the other.

The preparation of the project documents for the ten counties, supported by technical assistance financed under the third component, provided good value for money in terms of EU grant money mobilized (about €900 million were leveraged by a component cost of €13 million).

Project costs were 21% higher in Euro terms at closure than estimated at appraisal. Cost increases were mainly due to “inflationary pressures during a construction boom (ICR p. 9).” A nine-month extension in the closing date (relatively short for infrastructure projects) was necessitated to enable the completion of works in Bucharest. This was partly due to administrative inefficiencies (see Section 9 below).

On balance, efficiency is rated substantial due to the acceptable range of ex-post ERRs based on conservative estimates of benefits, the fact that cost increases were beyond the control of the project, a relatively short extension of the closing date, and the high financial leverage achieved with the support of technical assistance.

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:

The relevance of objectives is rated substantial and that of design substantial. The efficacy of the first objective -- improving the quality and coverage of water and wastewater services and improve stormwater management, mainly through support of infrastructure in the municipalities of Bucharest and Arad -- is rated modest. Although there is strong evidence of expanded coverage, there is no independent measure provided of enhanced quality. Under the second objective -- improving the quality and coverage of water and wastewater services through preparation of priority water and wastewater projects in selected counties -- the project substantially achieved what it set out to do, which was to prepare sub-projects for grant financing and leverage committed funding for this from the EU. However, the outcomes of improved quality and coverage will not materialize until 2015. Efficiency is rated substantial given acceptable ERRs conservative assumptions about benefits, high leverage of project funds, and a relatively short time extension. Outcome is assessed as moderately satisfactory.

a. Outcome Rating: Moderately Satisfactory

7. Rationale for Risk to Development Outcome Rating:

Romania joined the EU in January 2007, and has continued to develop its public institutions to meet EU standards and manage public services. EU integration remains a focus of Romania’s strategy of cooperation with the Bank. Modernization of public institutions to enhance resource allocation and absorption of EU funds is a priority to enable better delivery of public services. The Bank has been requested to support capacity building for absorbing EU funds. The risk of a change in Romania’s commitment to the EU and the impact of such a risk on the project outcomes are negligible.
Bucharest is the capital of Romania, and Arad is an important industrial center and transportation hub. Both municipalities have the requisite institutional framework to ensure the appropriate management and operation of the project assets with negligible risk of a change that would negatively impact the achievements of the project.

a. Risk to Development Outcome Rating: Negligible to Low

8. Assessment of Bank Performance:

a. Quality at entry:
Preparation was based on a sound knowledge of country and sector priorities. The Bank/Government team selected a strategic objective to be addressed, and designed components that were appropriate for achieving the objective. The selection of Bucharest and Arad was important because they are not eligible for EU grant funds or any of the associated advisory support. By providing funding for this financing gap, the project maked an important contribution to the country's strategic goals. Without Bank and Government collaboration and funding of the two components in Bucharest and Arad, these goals would likely not have been achieved during the observed period.

Despite the complexity of the issues (for example, EU integration, multiple implementing entities), the results framework and objective remained focused on achievable and realistic outcomes. The monitoring and evaluation framework was comprehensive and within the capacity of the municipalities to manage. The framework was well designed to reflect project physical progress as well as progress towards achievement of objectives. Procurement and financial management capacities were assessed and arrangements were in place at the start of the project. Each implementing agency was assigned the responsibility for managing and reporting on the implementation of its own component.

The project was selected for piloting the Use of Country Systems (UCS) under the Bank’s OP/BP 4.00 to address environmental and social safeguards in Bank-supported projects. The Safeguard Diagnostic Review confirmed that there were no gaps between the national legislation and Bank Policy in equivalency and
acceptability (ICR, page 9). Involuntary Resettlement (OP 4.12) was not triggered during preparation because no involuntary resettlement was envisaged and the municipalities had assessed that all construction would take place on public land. This was reflected in the legal agreement which contained a covenant stating that there would be no involuntary resettlement. This had to be changed during implementation (see Sections 8b and 11 below). Although this could not have been foreseen at the preparation stage, it would have been prudent to trigger OP 4.12 at appraisal as a precautionary measure (ICR, page 10).

M&E design does not allow for any independent measure of water quality.

Quality-at-Entry Rating: Moderately Satisfactory

b. Quality of supervision:
The ICR (page 7) and the project team report that the project was monitored closely by the Bank (with an average of 2-3 missions annually to ensure that necessary adjustments were made to meet the intended objectives while complying with Bank requirements and a tight implementation schedule. Several issues came to light during implementation and were handled appropriately, though sometimes at the expense of time.

A procurement issue (preexisting work included in a Bank financed contract – ICR page 10) led to suspension and delays in one contract. Results from independent procurement auditors, which became available about two years later, showed no serious irregularities. Close supervision is evident in the ICR's description of detailed issues and how they were resolved. It reports that the team followed up diligently in addressing procurement and other implementation problems as they arose. Financial management (FM) review missions were undertaken at least once a year. FM recommendations were followed up until corrected.

When it transpired that the Involuntary Resettlement safeguard would, after all, be triggered, the supervision team responded proactively and included the requirement to prepare a Resettlement Framework Policy at restructuring (see Section 11 below).

The mid-term review (April, 2009) was comprehensive in assessing the project's problems and accomplishments and led to a restructuring. The objectives and design after restructuring remained substantially unchanged. Adjustments were made to the details of sub-components according to new circumstances (new funding, delays, government requests). Restructuring focused Bank financing on the poorer areas of Bucharest (ICR page 8) while at the same time working with an affluent municipality which was not eligible for EU funding. The Government in its comments on the ICR is appreciative of Bank assistance in resolution of problems, and of experiences gained through the project and its contribution to reform discussions. Despite the complexity of the procurement and safeguard issues unexpectedly encountered during implementation, the project closing date needed to be extended for only nine months.

Quality of Supervision Rating: Satisfactory

Overall Bank Performance Rating: Moderately Satisfactory

9. Assessment of Borrower Performance:

a. Government Performance:
The Government was strongly committed to the objective of harmonization with the EU, and took actions to further the achievement of this objective. The project fitted well with this strategy of harmonization and with the country’s own strategies in the water sector. According to the project team, central government agencies coordinated effectively among themselves to ensure efficient implementation of the project and encouraged application of experience under component 3 to improve future selection, application and implementation of EU financed projects. The government strengthened the working relationships between the multiple agencies and responded to Bank requests to resolve counterpart funding issues and to finalize approval procedures. The Government coordinated the project effectively with the EU.

Government Performance Rating: Satisfactory

b. Implementing Agency Performance:
The implementing agencies for the project were the two municipalities of Bucharest and Arad for the first two components, and the Ministry of Environment and Water Management (MoEWM) for the third component.


The municipalities were committed to the objectives and design of the project and to the success of its implementation on their territories. They devoted the necessary resources, human and financial, to the implementation of the project. Implementation arrangements and staffing were in place at the start of the project. The municipalities carried out substantial preparatory work despite the absence of the engineering consultants who could not be deployed prior to effectiveness (ICR page 7). They responded to the Bank's requirements and advice on complicated issues such as land acquisition. Delays in counterpart funding and in receiving permits were encountered in Bucharest (ICR page 8). Despite the delays, the municipalities were able to complete the work with a relatively short extension of 9 months. The water/wastewater assets created by the project will be handed over to the water utility operator who is responsible for improving services and environmental safety. Roads will be handed over to the Streets Administration of the municipalities.

The MoEWM is highly committed to its responsibility of preparing projects for EU funding. It participated effectively in the project and supplied the necessary skilled staff to implement and learn from the experiences gained in implementation of the third component. The MoEWM, through the project succeeded in mobilizing Euro 1.1 billion for 10 additional counties. Experiences gained under the project will be applied to all water and wastewater projects to be financed with EU funding.

Implementing Agency Performance Rating: Satisfactory

Overall Borrower Performance Rating: Satisfactory

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

a. M&E Design:
M&E was to be managed by the three implementing agencies operating independently of each other. Each municipality was to collect the data, monitor and evaluate the results, and prepare semi-annual progress reports separately. The Ministry of Environment and Water Management (MoEWM) was responsible for monitoring the third component where the indicators were directly related to the outputs (number of grant applications prepared). Monitoring indicators required were related to measuring coverage outcomes (number of beneficiaries reached) and outputs, as well as following physical construction progress. However, the M&E framework contained no independent measure of improved water quality despite this being part of the project's development objectives. No baseline data were collected as only increments were to be measured.

b. M&E Implementation:
However, during implementation, data collection, monitoring and evaluation proved difficult. A separate unit at the MoEWM, tasked with consolidating progress reports, was not familiar with Bank procedures and data requirements. There were delays in obtaining timely and useful data from the municipalities. The latter relied on supervision engineers to collect and report on data to the responsible agency. Attempts were made to collect data for each neighborhood served by the project. The first indicator (number of beneficiaries) proved difficult to measure accurately as it was derived from the number of connections, some to buildings with multiple apartments. Efforts to make reasonable assumptions on the number of apartments and residents were unsuccessful. Adjustments made during the restructuring went some way to clarify data needs and improve monitoring of progress, particularly in terms of outcome measurement. No attempt was made during implementation to develop and apply independent measures of enhanced water quality.

a. M&E Utilization:
The Bank and the implementing agencies used the M&E framework to monitor project progress. Intermediate indicators drew attention to procurement problems. The ICR noted that the indicators could have been used more vigorously by the implementing agencies to track achievement of target values.

M&E Quality Rating: Modest

11. Other Issues:

a. Safeguards:
Environment. The project was classified as Category “B” for environmental assessment purposes. It was selected for piloting the Use of Country Systems (UCS) under the Bank’s OP/BP 4.00 to address environmental and social safeguards in Bank-supported projects. A Safeguard Diagnostic Review (SDR) confirmed that there were no gaps between the national legislation and Bank Policy in equivalency and acceptability. The scope of Country Systems adopted in this case was limited to environmental assessment and physical cultural resource policies applicable to the three project components.
According to the ICR (page 9), supervision of UCS was adequate. The Bank proactively reviewed the safeguard compliance of the UCS in line with the SDR’s recommendations during implementation. Minor issues which arose -- health and safety lapses on work sites in Bucharest – were appropriately remedied. Adequately trained staff were appointed to be in charge of safety and environment protection activities according to the site environmental management plan provisions. The ICR states that “in most of the works contracts, the performance of the contractors on UCS compliance was satisfactory”
The ICR (page 9) further reports that “under Component 3, Environmental Impact Assessment (EIA) studies conforming to the EU and Romanian legislation and equivalent to the Bank’s OP 4.01 were prepared for each project application. All EIA Reports were reviewed and approved by MoEWM and the EU Commission. The EIAs demonstrated that the proposed sub-projects would contribute to the fulfillment of Romania’s commitments under its Accession Treaty. Overall, the Use of Country Systems in Romania during the implementation of [the project] is considered Satisfactory and in accordance with the findings of the acceptability assessment.”

International Waterways (OP 7.50) was triggered due to stormwater discharge in Bucharest and Arad. The ICR (page 9) reports that compliance was considered satisfactory.

Land Acquisition and Involuntary Resettlement (OP4.12) was not triggered at appraisal since all construction was envisaged to take place on public lands and no involuntary resettlement was anticipated. The Loan and Project Agreements included a covenant forbidding resettlement. Acquisition and resettlement issues nevertheless arose in the latter part of 2008. Due to changes in technical design, privately owned land, on which 34 families were living, would be required for a wastewater pumping station, an underground pipe linking the sewerage collector, and a drainage pipe. Three other privately owned or settled areas were also at risk. The ICR (page 10) reports that the legal agreements were amended to replace the covenant forbidding resettlement by a commitment to apply a Land Acquisition Policy Framework that would be in compliance with OP 4.12. In the event, “none of the technical solutions adopted after project restructuring ultimately required land acquisition.” As the ICR (page 10) acknowledges, however, “OP 4.12 should have been triggered at appraisal as a precautionary measure.”

b. Fiduciary Compliance:
Procurement. Overall procurement was rated satisfactory in supervision reports. Procurement risk was rated high at appraisal due to limited experiences in implementing large works. Payment for preexisting work, and potential unfair competition was reported in the award of one contract in 2009. Payments were stopped and the issue was investigated. This caused delays in the specific contract implementation and absorbed considerable time and resources from the Bank and the Government. The final results of the Forensic Procurement Review Audit became available in 2011. No wrong doing was found and the contract resumed. Despite the delays, the project was completed with one extension of nine months.

Financial Management: Overall financial management was rated as satisfactory in supervision reports for all three components covering aspects of accounting and reporting arrangements, staffing, internal control, budgeting, and external audits. Audit reports were submitted on time and audit opinions were unqualified (ICR, page 11). Counterpart funding from Bucharest was considered moderately satisfactory due to recurrent delays in receiving municipal contribution.

c. Unintended Impacts (positive or negative):

d. Other:



12. Ratings:

ICR
IEG Review
Reason for Disagreement/Comments
Outcome:
Satisfactory
Moderately Satisfactory
The efficacy of the first objective -- improving the quality and coverage of water and wastewater services and improve stormwater management, mainly through support of infrastructure in the municipalities of Bucharest and Arad -- is rated modest. Although there is strong evidence of expanded coverage, there is no independent measure provided of enhanced quality.  
Risk to Development Outcome:
Negligible to Low
Negligible to Low
 
Bank Performance:
Satisfactory
Moderately Satisfactory
It would have been prudent to trigger OP 4.12 at appraisal as a precautionary measure. M&E design does not allow for any independent measure of water quality. 
Borrower Performance:
Satisfactory
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 first of the following lessons is drawn by IEG, and the others from the ICR with some adaptation of language:
  • Combining physical investments with appropriately designed technical assistance, while building on the existing skills of implementing agencies, can significantly increase national capacity to identify and prepare projects for future funding by external partners.
  • Even with Borrower assurances that there will be no land acquisition or resettlement issues, it is prudent to trigger OP 4.12 at the appraisal stage as a precaution in most projects involving the construction of new infrastructure.
  • A beneficiary assessment, which was not programmed in this project, can be a useful instrument in evaluating the benefits and impact of infrastructure projects.

14. Assessment Recommended?

No

15. Comments on Quality of ICR:

The ICR documents adequately the design, implementation and results of the project. However, parts of the main text are repeated in the annexes, leading to duplication and potential errors (for example, in the economic analysis). The split evaluation of outcomes pre and post restructuring was not appropriate (given the fact that the objectives did not substantively change) and accentuated repetition. Elaborating on costs and benefits of the future EU financed projects (prepared under this Project) was unnecessary Some of the lessons learned (for example, the need for local as well as national government ownership of the project) do not appear to be based directly on experience documented in the ICR. The rating scale used for the assessment of the component parts of outcome (efficacy and efficiency) was not in accordance with the guidelines (this should be negligible-modest-substantial-high, rather than the “satisfactory” scale). The dates of the mid-term review are missing from the Data Sheet.

a. Quality of ICR Rating: Satisfactory

(ICRR-Rev6INV-Jun-2011)
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