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Implementation Completion Report (ICR) Review - Chongqing Small Cities Infrastructure Improvement Project


  
1. Project Data:   
ICR Review Date Posted:
09/03/2013   
Country:
China
PROJ ID:
P081161
Appraisal
Actual
Project Name:
Chongqing Small Cities Infrastructure Improvement Project
Project Costs(US $M)
  264.5  352.06
L/C Number:
L4794
Loan/Credit (US $M)
 180  175.09
Sector Board:
Urban Development
Cofinancing (US $M)
   
Cofinanciers:
Board Approval Date
  06/21/2005
 
 
Closing Date
06/30/2012 06/30/2012
Sector(s):
Water supply (35%), Roads and highways (33%), Flood protection (21%), Sanitation (8%), Sub-national government administration (3%)
Theme(s):
Other urban development (29% - P) Urban services and housing for the poor (29% - P) Pollution management and environmental health (14% - S) Other human development (14% - S) Natural disaster management (14% - S)
         
Prepared by: Reviewed by: ICR Review Coordinator: Group:
Fang Xu
Roy Gilbert Soniya Carvalho IEGPS1

2. Project Objectives and Components:

a. Objectives:
Objectives as in the Project Appraisal Document (PAD, p.2) were “to support emerging small cities to improve the efficiency and effectiveness of infrastructure service delivery, to accommodate the rapid urban growth"

Objectives as in the Loan Agreement (Loan Number 4794-CHA, Schedule 2) were "to assist Chongqing in supporting sustainable growth in small cities by improving the efficiency and effectiveness of infrastructure service delivery in the cities”


This review assesses the objectives formulated in the Loan Agreement.

b. Were the project objectives/key associated outcome targets revised during implementation?
No

c. Components:

1. Water Supply (estimated cost US$98.2 million, actual cost US$115.54 million). Activities under this component were: i) Enhancement of water treatment and network expansion in three areas of Dianjiang; ii) Songji regional water supply of raw water to Yongchuan city; iii) Tongguanyi regional water supply scheme supplying 16 towns in water scarce areas in the planned western expansion areas; iv) Enhancement of water treatment and network expansion in two areas of Tongnan; and v) enhancement of water treatment and network expansion in three small towns located close to Yongchuan city.

2. Flood Protection (estimated cost US$57.6 million, actual cost US$82.29 million), Activities under this component included flood protection embankments to mitigate against serious flood damage in Nanchuan and Rongchang. Extension of existing flood protection embankment on the south side of the river in Shizhu.

3. Road Improvement and Construction (estimated cost US$93.2 million, actual cost US$133.41 million), Activities under this component included i) construction of a spine road in new development area in Qianjiang; ii) construction of a 4.6km long Shizhu expressway link road; iii) construction of an 11 km long link road from Chongqing-Chendu expressway to the key secondary city of Tongba; and (iv) construction of a 14.4km access road to tourist site in Yubei.

4. Environmental Sanitation (estimated cost US$11.1 million, actual cost US$.5 64 million). This component was to finance public toilet upgrading and reconstruction in Chongqing city.

5. Institutional Strengthening and Training (estimated cost US$ 4.4 million, actual cost US$15.18 million). This component was to fund technical assistance in six areas:

(i) strengthening finances, management and operations of utility companies; improving management capacity of parent units of local governments managing these companies, and development of a policy and pricing mechanism for the two regional water supply schemes;

(ii) Carry out an update of all available water resources, and formulate appropriate policies for water resources management, including investigations to establish the availability of ground water in the western areas of Chongqing;

(iii) Support initiatives in private sector participation in urban in urban infrastructure services;

(iv) Carry out a study on the policy for provision of public toilets in Chongqing city;

(v) Carry out independent monitoring of safeguards implementation; and,

(vi) Carry out training and study tours.

As reported by the ICR (p18), the project was restructured twice, on February 25, 2009 and June 07, 2010. The first restructuring was to reallocate loan proceeds of US$1.2 million from the unallocated category to finance the preparation of Chongqing Urban Rural Integration Project (CURIP, approved in FY10). The second restructuring was to relocate funds among various components due to the changing of the original project components during project implementation. The major changes are listed below:

1. Under component 1:

The Yongchuan Town Water Supply subcomponent was dropped for lack of counterpart funding;

Songji Regional Water Supply subcomponent was expanded to include a new distribution pipeline to meet the new and expanded demand;

Tongguanyi Regional Water Supply subcomponent used alternative route to accommodate the geological condition; and

Tongnan Water Supply added a new water treatment plant.

2. Under component 2: Detailed geological surveys and soil testing identified some serious engineering problems with foundation designs, though the scope and scale of the road component did not change, the investment cost increased by about US$23 million for the required additional engineering .

3. Under component 4: The number of public toilets to be financed was reduced from 235 to 153 because of objections raised to the locations of the toilets by local residents and associated persistent land acquisition and resettlement issues.

4. Under component 5: Two planned studies were dropped.

d. Comments on Project Cost, Financing, Borrower Contribution, and Dates
Project cost: There was inconsistent information in the ICR on project cost. The Project Appraisal Document Data Sheet estimated total project cost as US$280.7 million, however, the Annex 4 and 5 of the same document estimated total project cost of US$264.5 million. Clarification was sought from the project team and the team confirmed that US$264.5 million was correct. The information on the actual cost at project completion was also inconsistent; Table (a) in the Annex 1 in ICR indicated a total actual cost of US$263.28 million. However, Table (b) in the Annex 1 indicated a total project financing of US$351.16 million. The updated actual project cost information provided by the TTL on April 15, 2013 indicated that actual project cost was US$352.06 million. The increase of project cost was mainly due to : i) Devaluation of the U.S dollar over the implementation period. The USD/RMB exchange rate was 8.28 at project appraisal and fell to 6.3 at project completion. ii) Sharp cost increases in labor and raw construction material during project implementation. iii) Substantial cost overruns as a result of various contract variations. i.e., the actual costs for roads construction in Tongnan County and Yubei District increased by 89.1 percent and 109.1 percent, respectively.

Financing: At project completion, 97.3% of the original Bank loan was disbursed and US$4.92 million was cancelled.

Borrower Contribution: The Data Sheet in the PAD recorded the borrower's contribution as US$100.7 million (out of total financing of US$280.7 million). The updated project cost and financing data provided by the TTL indicated, however, a commitment of US$84.5 million as the borrower contribution to total planned financing of US$264.5 million. According to the ICR, the actual borrower contribution by completion was US$176.07 million, close to the ‘updated’ figure of US$176.97 provided to IEG by the TTL. These actual figures show that the borrower financed all of the increased costs of the project reported above.


3. Relevance of Objectives & Design:

a. Relevance of Objectives:
Rated: Substantial.
The project objectives were relevant both at project preparation and project completion. The project supported two themes under the Bank's Country Assistance Strategy (2003-2005) which were: i) facilitating an environmentally sustainable development process; and ii) addressing the needs of the poorer and disadvantaged people and regions of the country. The project was also in line with China's 10th Five-Year Plan (2001-2005) which called for improved infrastructure, balanced development of regions and increased sustainability (Chapter Three). At project completion, the project objectives remain relevant with Bank's Country Partnership Strategy (FY2013-16) and China's 12th Five Year Plan (2011-2015), which call for focusing on improving the quality of life and enhancing urban environmental services rather than just the pace of growth, and paying attention to balanced growth.

b. Relevance of Design:
Rated: Substantial.
As reported by the PAD (p1), the infrastructure deficiency issues in small cities in Chongqing were: (i) poor quality and intermittent supplies of drinking water; (ii) inadequate transportation networks; (iii) low resistance to flooding and other natural disasters; and (iv) unsatisfactory sanitation conditions. These challenges had to be addressed in order to achieve the project development objectives of supporting emerging small cities to improve the efficiency and effectiveness of infrastructure service delivery. The project activities and components were designed to do this across the above mentioned four infrastructure service areas as well as institutional strengthening and training activities to increase the management capacity and financial viability of the infrastructure service providers (companies and local governments). The results chain from project inputs, then to outputs and finally to intermediate outcomes and outcomes is clear and logical for this project. Understanding how the project activities fit into this results chain is straightforward. With the designed project activities, it was expected, for instance, that water treatment would be enhanced and water supply would be expanded, and consequently more people would have access to better quality of water. With road network expansion and improvement, it was expected that travel time would be reduced; with flood protection embankments construction or expansion, for example, it was expected that the level of flood protection would be increased; with public toilets upgrading and reconstruction, it was expected that the sanitation conditions Chongqing city area would be improved. Consequently, infrastructure service delivery would be more efficient and effective.


4. Achievement of Objectives (Efficacy) :

Outputs:
At project completion, most project activities under the five components were completed as planned or exceeded the targets, except for three activities that were slightly short of target:

i) 8.2km of river embankment completed in Rongchang country under the Flood Protection Component compared with a target of 10.2km;

ii) 4.57km of link road completed in Shizhu County under the Roads component compared with a target of 4.6km;

iii) 10.4km of link road completed in Tongnan County under the Roads component compared with a target of 11km.

For the purpose of this review the project development objectives were disaggregated into four parts as listed below. The rating of each part will be considered in turn as elements of an overall efficacy rating for the project development objectives.

1. Improving the efficiency and effectiveness of infrastructure service delivery (for water supply): The supply of raw and treated water to participating country towns has been improved at project completion, as evidenced by more people having access to more reliable water supply with better quality of water. The ICR and the TTL reported that:

i) The construction of a new Water Treatment Plant in Tongnan Country and a new Water Treatment Plant in Dianjiang County, together with another water supply program financed by the Government (confirmed by the TTL), are providing a safe and reliable 24/7 water supply service that meets all required national standards for an additional 100,000 people.

ii) Unaccountable water loss was reduced by 20% for Tongnan Water Supply at project completion, evidence of increased efficiency of water supply delivery.

iii) The Songji Regional Water Supply System with revised design and capacity provided raw water to Yongchuan Town for around 390,000 people and to the new Ganqiao Industrial park; The Tongguanyi Regional Water Supply System provided raw water in bulk to 14 new towns, benefiting an estimated 380,000 people (ICR p28).

iv) The service satisfaction ratio of water supply users for Yongchuan Town under Songji Water Supply system increased from 75% at appraisal to 98% at project completion.

The achievement of this sub-objective is rated as Substantial.

2. Improving the efficiency and effectiveness of infrastructure service delivery (for flood protection): The flood protection work under the project contributed to a significant increase in the standard of flood protection of three urban areas: Nanchuan, Rongchang and Shizhu, from a level of about 1:5 years (probability of flooding occurrence 20%) at appraisal to 1:20 years (probability of flooding occurrence 5%) at completion. Thanks to the project, about 220,000 people in flood prone areas are now protected from flooding and about 260 ha of additional developable land have been made available.

The achievement of this sub-objective is rated as Substantial.

3. Improving the efficiency and effectiveness of infrastructure service delivery (for transportation):The expansion of urban roads network and construction of three expressway linkages improved road conditions in the project area and laid a foundation for socio-economic development, as evidenced by the information in the ICR ( p29):

i) The construction of 12.8km of a new urban road linking two towns, Zhengyang and Zhangjiaba, has resulted in a decreasing of travel time between Zhengyang and the 319 expressway (a distance of 1.3 km) from one hour (no direct road prior to the project walking over hilly area) to 3-5 minutes; The traveling time on the Qianxian class 2 road (11.5 km) improved by the project was shortened from 20 minutes to seven minutes.

ii) The construction of a 4.6km link road between Nanbin Town and the Dianjiang-Lichuan Expressway at Sandian resulted in just a 10-minute drive, as compared to the one hour journey over a rough 15 km track before the project.
iii) The construction of a 10.4 km link road to connect Tangba with the Chongqing-Suining-Chengdu Expressway provides vehicular access with a journey time of just 3-5 minutes, replacing a two hour walk.

iv)The project constructed a 10.14 km access road to Tongjian from the Chongqing-Linshui Expressway at Caoping has resulted in a reduced travelling time from Caoping to Tonjing (10.14 km) from 40 before the project to 10 minutes afterwards.

The achievement of this sub-objective is rated as Substantial.

4. Improving the efficiency and effectiveness of infrastructure service delivery (for public sanitation): ICR reported that 153 toilets were installed under the project which provided urban residents with easy access to toilets and improved sanitation environment in the city. However, there is no detailed information about a more efficient or effective public sanitation service as a result of the project intervention. The achievement of this objective is rated as Modest.

The overall achievement of the project development objectives is rated as Substantial.


5. Efficiency:

At project appraisal, economic analysis was carried out for three components: water supply, roads, and flood protection and reported the following results:

i) For the water supply component, the estimated economic internal rates of return for the four subcomponents were in the range of 12.6%-19.6%;
ii) For the roads component, the estimated economic internal rates of return for the four subcomponents were in the range of 11.9%-17.7%.
iii) For the flood protection component, the estimated economic internal rates of return for the three subcomponents were ranged 11.1%-12.4%.

At project completion, the same methodology was applied for the three components, due to the higher actual costs and delays of two to three years in generating revenues (for water supply activities), four activities had economic internal rates of return below 10%. The result of economic analysis at project completion for each component is as the follows:

i) For the water supply component, the actual economic internal rates of return ranged 8.1%-17.7%;
ii) For the roads component, the actual economic internal rates of return ranged 7.1%-17.9%;
iii For the flood protection component, the actual economic internal rates of return ranged 7.1%-22.5%.

With the wider range of results reported at completion, several below the 10% benchmark that point to inefficiency, the overall efficiency of the project is rated as Modest.

Neither the PAD nor the ICR provided single figures for the overall ERRs that could be reported below.

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:
%
89%
ICR estimate:
%
94%

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

6. Outcome:

The relevance of the project development objectives is substantial and the relevance of design is substantial. The project development objective was substantially achieved in three sub-sectors but only modestly achieved in the fourth. The project efficiency is rated as modest. Overall, the project outcome is Moderately Satisfactory.

a. Outcome Rating: Moderately Satisfactory

7. Rationale for Risk to Development Outcome Rating:

The development outcome of the project is at risk from the following:
i) The water supply companies are still relying on Government subsidies to cover the full costs of operations. There is risk that the Government may not always provide the necessary operation and maintenance funds in a timely manner, which will in turn put the sustainability of water supply service at risk.
ii) Climate change poses another risk to the project development outcome, especially the flood protection standards applied in China and in this specific project are low (1:20 (probability of flooding occurrence 5%)) as compared to the standards in the developed countries (1:100 (probability of flooding occurrence 1%). The increased frequency and intensity of extreme weather will put urban areas at significant risk due to inadequate flood protection. Climate change will also put roads infrastructure at risk and reduce development outcomes.
iii) The rapid urbanization and rising population and car ownership will result in rapid increase of traffic volume which will exceed the designed road capacity and cause faster deterioration of the infrastructure.

Given the above listed factors, the risk to development outcome is rated as significant.

a. Risk to Development Outcome Rating: Significant

8. Assessment of Bank Performance:

a. Quality at entry:
The project had identified issues with Chongqing urban infrastructure service and had designed activities to address those issues so as to improve the efficiency and effectiveness of infrastructure services delivery. The activities were selected after careful analysis of alternative technical options and covered both physical investment and institutional improvement, the institutional improvement design was rated as highly satisfactory by the Quality Assessment Group of the Bank. However, the following shortcomings were noted with the project preparation:


i) International independent consultant support to local institutions for project design work was not always timely. As a result, the detailed design for road works under the project lacked sufficiently detailed geological studies, leading to cost overruns of about US$23 million (26%) (ICR p19);

ii) The risk that counterpart funding may not be provided by local governments was not identified and mitigation measures were not prepared, leading to the cancellation of Yongchuan Town Water Supply subcomponent because of lack of counterpart funding.

iii) Applying the National (Chinese) urban flood protection standards (1:20) to the project activities appeared to be the norm at project preparation stage, as confirmed by the TTL. However, the project design could have been more forward looking by factoring in higher standards to anticipate the possible effects of climate change.

iv) The M&E framework, though with many indicators to measure and evaluate the project implementation status, lacked quantitative Key Project Indicators to monitor progress toward achieving the project objectives. (For the detailed assessment of the M&E framework, please refer to Section 10.)

Quality-at-Entry Rating: Moderately Satisfactory

b. Quality of supervision:
As reported by the ICR (p35), the Bank supervision team was based in Beijing, China. This allowed them to interact regularly with project executing agencies and to respond in a timely manner to the implementation issues. However, at project completion in June 2012, some implementation issues which had been noted and raised during the project Mid-Term Review in early 2010 had still not been fully addressed, including:
i) Compliance with covenants: At project completion, three covenants were rated as partially complied and one as non-complied, all relating to the financial viability of water supply companies. The water tariff was not increased to cover management, operation and maintenance costs, as required by the legal covenants.

ii) The need to improve Key project indicators: The Quality Assessment of Lending Portfolio carried out by the Quality Assurance Group in late 2008 pointed out that KPIs were too vague and recommended refinement during implementation. Following that, at Mid-Term Review, KPIs were revised, however, the project was still using "evidence of" indicators without clearly measurable quantitative targets, making it difficult to monitor the project progress and measure the achievement of the project development objectives.

Quality of Supervision Rating: Moderately Satisfactory

Overall Bank Performance Rating: Moderately Satisfactory

9. Assessment of Borrower Performance:

a. Government Performance:
The Government in this case refers to the Chongqing Municipal Government. The Government's commitment and support to the project were strong as evidenced by the following:

i) Participating actively in project design. The finalized project activities were the result of active interaction between the Bank's team and Chongqing Municipality (PAD p4).
ii) Putting into place a strong project management framework to support project implementation. The Government established a Project Leading Group to provide guidance and coordination of project implementation to the Chongqing Project Management Office and Project Implementation Units.
iii) Earmarking contingent counterpart funding to cover any shortfalls in initially committed counterpart funds, debt services repayments and operation and maintenance. It was reported by the ICR (p37) that the Government provided additional counterpart funding to cover the significant 30% foreign exchange rate losses over the life of the project and cost overrun of project activities, and to subsidize the water companies for operation and maintenance because the revenue generated from increased water tariff is not sufficient.

Government Performance Rating: Satisfactory

b. Implementing Agency Performance:
The implementing agencies for this project were the Chongqing Project Management Office at the municipal level, and 12 Project Implementation Units at the county level. The Chongqing Project Management Office was experienced with World Bank procedures as it has managed five previous Bank funded projects. The Project Implementation Units lacked this experience with the Bank and needed time to build up their own capacity in this area, which in turn contributed to the following issues during the project implementation:
i) Large variation of orders to some civil works contracts some of which were disallowed by the Bank due to PIU's unfamiliarity with Bank's procurement rules and the rules and regulations of the International Federation of Consulting Engineers.
ii) Delays in large contract execution because of lack of coordination between the resettlement action plan and civil works management.
iii) At project closing, there was an unfinished resettlement action in Qianjiang County (ICR p38).

Implementing Agency Performance Rating: Moderately Satisfactory

Overall Borrower Performance Rating: Moderately Satisfactory

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

a. M&E Design:
The M&E framework for this project included indicators for project outputs, intermediate outcomes and outcomes. However, some of the indicators were not defined precisely and lacked quantified targets. In addition, the outcome and intermediate outcome indicators did not sufficiently cover all aspects of the stated project development objectives of achieving efficiency and effectiveness of infrastructure service delivery, making it difficult to use the M&E framework to fully monitor and measure the achievement of the project development objectives.

b. M&E Implementation:
As reported by the ICR (p23), a computerized M&E system was established early during project implementation to provide timely monitoring of the project status. Additional indicators were added during Mid-Term Review to provide more comprehensive and quantitative information on project implementation progress. Throughout project implementation process, the M&E data were collected and reported in a timely manner.

a. M&E Utilization:
Monthly and annual reports and plans were prepared using the information generated by the M&E framework. Those reports and plans helped improve the project implementation and addressed implementation issues in a timely manner. As recorded in the ICR, the Quality Assurance Lending Portfolio Review commented that implementation issues were successfully addressed when they arose.

M&E Quality Rating: Modest

11. Other Issues:

a. Safeguards:
Environmental: This being a Category A project, the safeguard policy triggered was OP/BP4.01 and OP/BP4.37(Safety of Dams). At the project preparation stage, Environmental Impacts Assessments were prepared for each individual subcomponent and approved by the Chongqing Environmental Protection Bureau. An Environmental Management Plan was also developed (PAD p13). The Dam safety policy was triggered because there were five dams (funded from other sources) related to the project investments.

As reported by the ICR (pp23 and 25), at project completion, the management of the environmental safeguard issues was satisfactory and fully compliant with the Bank's safeguards policy. The external monitoring results showed that the Environmental Management Plan was well implemented at most construction sites and that construction activities had no significant negative impacts upon the environment. For dam safety issues, the Chongqing Project Management Office recruited an independent Dam Safety Expert and provided Dam Safety Reports for the related dams. The implementation of the dam safety policy was fully in line with Bank requirements as set out in OP4.37. In 2008, following the devastating earthquake in neighboring Sichuan Province, a special assessment of these dams was carried out to identify possible problems, but none were found and no compliance issues were reported.

Social: As the project involved land acquisition and demolition of structures, the Bank's policy on Involuntary Resettlement was triggered (OP/BP4.12). Resettlement action plans (RAPs) were prepared and it was estimated that about 13,700 people would be affected by the land acquisition and house demolition and 270 ha lands would be acquired for project purposes. During project implementation, the Chongqing Technology and Business University (CTBU) was appointed as external independent monitoring agent for social safeguards implementation. As reported by the ICR (p24), issues noted by the monitoring agent included: i) inadequate internal monitoring mechanisms of the resettlement activities of Project Implementation Units; ii) delayed land compensation and lower housing compensation rates relative to those agreed in the RAP, particularly for the Tongnan road construction activities. The compensation issues in Tongnan were later corrected.
ICR (Annex 7) reported that 11,663 of people were actually affected, 275.78 ha lands were permanently acquired and 108,770.36 m2 of houses were demolished.
ICR (p24) also reported that at project closing a resettlement action involving 48 households (roughly 200 people) in Qianjiang County remained unfinished. As confirmed by the TTL, this resettlement activity as of today is still not resolved.

b. Fiduciary Compliance:
Financial Management: Project financial management was in accordance with the Bank’s financial management (FM) policies (OP 10.02) and disbursement policies (OP 12.00). All FMRs and audit reports were reviewed and minor discrepancies were corrected. The ICR (p25) reported that the project was subject to two formal FM assessments during the implementation, one as part of the MTR in March 2010 and the other in April 2011. Both assessments rated project FM as satisfactory, but both also noted that the timeliness of the provision of counterpart funding was only moderately satisfactory. With respect to the disbursement, records and accounts were well maintained and no ineligible expenditures were reported.

Procurement Management: All procurement related arrangements were in place by project appraisal, Possible risks were identified and appropriate mitigation mechanisms were put in place to prevent possible problems during the implementation. However, due to the implementation agencies' unfamiliarity with Bank's procurement rules and the rules of the International Federation of Consulting Engineers, a number of civil works contracts encountered large variation of orders and some of claims were disallowed by the Bank.

c. Unintended Impacts (positive or negative):
The unintended positive impact reported by the ICR (p33) was that the flood protection system built under the project also provided high quality of public open space for the local people and promoted real estate development in the city.

d. Other:



12. Ratings:

ICR
IEG Review
Reason for Disagreement/Comments
Outcome:
Satisfactory
Moderately Satisfactory
The economic rates of return of some project activities were lower at project completion, some of project activities’ economic rates of return were below the threshold.  
Risk to Development Outcome:
Moderate
Significant
The project is faced with financial risk (insufficient funds for maintenance), and climate change risk due to the standards of flood protection applied in this project.  
Bank Performance:
Moderately Satisfactory
Moderately Satisfactory
 
Borrower Performance:
Satisfactory
Moderately Satisfactory
There were still some pending issues to be addressed at project completion,e.g., resettlement activity in Qianjiang county. At project implementation, the management of project procurement activities was not fully 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 ICR generated five lessons from the project, as follows:
i) Involvement of existing agencies in project implementation will promote project ownership and sustainability. This project utilized existing agencies within the government bureaucracies to implement the project. Some implementation agencies also had the ultimate responsibility for the management, operation and maintenance of the project-financed facilities.
ii) For mature clients like China, one of the Bank’s comparative advantages is delivery of international best practice thorough well designed and executed international consultant services. The high quality and timely training and capacity building supported by both the World Bank and the international consultant team was important for successful project implementation.

The other three lessons generated by ICR were for management's attention and action:
iii) Following up the compliance of dated covenants is part of Bank supervision responsibilities and needs management attention. This was also identified by the Quality Assurance Lending Portfolio Review as an important systemic lesson.
iv) Lacking funding for good-quality project preparation is a prevailing problem in China. The ICR suggested that Bank senior management have a discussion with China National Development and Reform Committee to find a solution to the problem.
v) Chinese national flood protection standards are inadequate when compared to international standards and these low standards present a real risk to development. The Bank should begin a dialogue with Government of China and review the national standards through analytical and economic work.

14. Assessment Recommended?

Yes
Why?
i) unfinished resettlement activity in Qianjiang County; ii) the sustainability of flood protection activity given the low flood protection standards applied (1:20 as compared to 1:100 international standard). iii) to provide information for incoming IEG evaluation of Urban Poverty.

15. Comments on Quality of ICR:

This ICR provided evidence on the achievement of the project development objectives. It was open and candid about what was achieved and what had not worked well, as well as raising some more general issues. Unusually for an ICR, this ICR comments on and criticizes the inconsistencies of the PDO formulations for this project in different project documents (ICR p. 20). However, there are also some shortcomings with the report. It is unnecessarily lengthy and presents some information inconsistently. For example, the ICR data sheet reported that the project was restructured twice, while the main text (p21) informs that it was restructured three times; the information provided on project costs in Tables (a) and (b) in Annex 1 is not the same. These issues were raised during IEG’s meeting with the TTL, and were followed up by with updated project cost and financing information provided by the TTL.

a. Quality of ICR Rating: Satisfactory

(ICRR-Rev6INV-Jun-2011)
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