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Implementation Completion Report (ICR) Review - Second Decentralized City Management

1. Project Data:   
ICR Review Date Posted:
Project Name:
Second Decentralized City Management
Project Costs(US $M)
 37.60  76.17
L/C Number:
C4117, C4490
Loan/Credit (US $M)
 35.00  76.17
Sector Board:
Urban Development
Cofinancing (US $M)
 0  0
Board Approval Date
Closing Date
06/30/2010 06/29/2012
Sewerage (31%), Roads and highways (31%), Sub-national government administration (16%), Solid waste management (15%), Other social services (7%)
Pollution management and environmental health (25% - P) Urban services and housing for the poor (25% - P) Municipal governance and institution building (24% - P) Participation and civic engagement (13% - S) Decentralization (13% - S)
Prepared by: Reviewed by: ICR Review Coordinator: Group:
Toneema M. Haq
Robert Mark Lacey Soniya Carvalho IEGPS1

2. Project Objectives and Components:

a. Objectives:
The project is the second in a two-credit series of Adaptable Program Loans (APL). The Project Appraisal Document (PAD) does not contain a statement of the program objectives. According to page 3 of the PAD for the first credit (P035648), “The APL purpose is to provide better quality and cost-effective basic services to urban residents, especially the poor, of Benin's three main cities (Cotonou, Porto Novo and Parakou).”

The PAD and Development Credit Agreement (DCA) have identical development objectives for this second credit: "to increase access to infrastructure and basic services for residents of the Borrower's Cities." The target cities are specified in the PAD: "primary cities (Cotonou, Porto-Novo and Parkaou) and selected secondary cities (Abomey-Calavi, Lokossa, and Kandi)."

Additional Financing of US$40 million was approved on September 12, 2008 to increase the funding for basic urban infrastructure. The project objectives were not changed.

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

c. Components:
There were four components:

A. Municipal Management Strengthening (Estimated Cost: US$5.33 million, Actual Cost: US$3.51 million)

This was to improve management and financial resources of Benin's primary and secondary cities in order to provide urban services and maintain infrastructure. There were three subcomponents. The first covered the three primary cities (Cotonou, Porto-Novo and Parakou). The second strengthened the line ministries (Ministry of Environment, Housing and Urban Affairs, Ministry of Finance and Economy, Ministry of Interior, Security and Decentralization, and Ministry of Plan and Development). The third subcomponent covered secondary cities (Abomey-Calavi, Lokossa, and Kandi). Support to both primary and secondary cities consisted mainly of preparation of financial and technical manuals. studies, and office equipment.

B. Basic Infrastructure (Estimated Cost: US$21.52 million, Additional Financing: US$37.40 million, Actual Cost: US$59.90 million)

This was to provide improved access to urban infrastructure. It financed basic infrastructure construction and rehabilitation priority works in Cotonou, Porto-Novo and Parakou. The priority program was pre-identified by the cities, made up of investments with a sufficient economic rate of return (greater than 12% for roads), and complementary to existing networks. The entire Additional Financing of US$40 million was to make up for a lack of funding in the priority work programs. Due to IDA constraints, the original project was not able to provide sufficient funding. The programs included construction and rehabilitation of 260 km of roads and 167 km of drainage.

C. Community Participation and Integration (Estimated Cost: US$2.46 million, Actual Cost: US$1.79 million)

This was to improve access to basic services for residents of poor neighborhoods. There were three subcomponents: neighborhood infrastructure, community-based activities, and support to community development. Neighborhoods were selected on the basis of relative needs, level of poverty, and level of community organization.

D. Solid Waste Management in Porto-Novo (Estimated Cost: US$5.87 million, Actual Cost: US$9.06 million)

This was to improve sold waste management in Porto-Novo. There were three subcomponents. Capacity strengthening focused on equipping a waste management unit and training collection workers and municipal staff. The second subcomponent financed an environmental and social impact assessment study for a landfill, carrying out a solid waste management study, and a public awareness campaign. The final subcomponent financed works and infrastructure which included and closure and rehabilitation of existing open dump sites, establishment of new collection points, and construction of a new landfill.

d. Comments on Project Cost, Financing, Borrower Contribution, and Dates
Project Cost. Including US$2.44 million in price and physical contingencies, total estimated cost was US$37.60 million. Total actual cost was US$76.17 million consisting of US$36.86 million from the original credit and US$37.40 million from the Additional Financing and US$1.9 million in counterpart financing.

Financing. Two credits financed this project. The original credit was for SDR 24.0 million (US$35.0 million equivalent) and the additional financing credit was for SDR 24.3 million (US$40.0 million equivalent). There is a discrepancy concerning the dollar amounts from the credits, which are less than the dollar equivalents of the two grants expressed in SDR. Exchange rate fluctuations would have had the opposite effect since the SDR appreciated against the dollar, so it is possible that the ICR does not have the most up to date information on amount disbursed. There was no co-financing for this project, but the Agence Francaise de Developpement (AFD) provided US$11.7 million in parallel financing for sorting of solid waste systems in Cotonou.

Borrower Contribution. The government was committed to financing US$2.6 million (7% of estimated project costs). This was evenly divided between the government (US$1.3 million) and cities (US$1.2 million). For the Additional Financing, the government was committed to financing US$6.79 million (14.4% of additional financing costs) divided between the government (US$4.73 million) and cities (US$2.36 million). According to the ICR, no government financing was mobilized by project closure due to the allocated funds being used to pay for unforeseen social measures related to resettlement of communities living near the Takon landfill for Component D (classrooms, toilets, roads, clinics, community center, electricity and water supply to compensate communities whose land was acquired). However, the project team confirmed that the borrower did indeed provide US$1.9 million in counterpart financing (contradicting the ICR) which was less than the US$3.3 million committed by the government at appraisal.

Dates. There were six level 2 restructurings during project implementation but none of these changed the objectives. The Additional Financing was approved on September 12, 2008, three years after original Board approval. It was needed to scale up activities under Component B and cover cost overruns from the original project. It also extended the closing date by six months from June 30, 2010 to December 31, 2010. The closing date was extended twice more. On June 22, 2010 it was extended 15 months from December 31, 2010 to March 31, 2012 in order to enable completion of the Takon landfill and all outstanding works in the AF. It was extended a final time on March 28, 2012 by three months to June 29, 2012 to ensure the government would finance the shortfall amount of US$0.315 million. The project finally closed on June 29 2012, two years later than originally planned.

3. Relevance of Objectives & Design:

a. Relevance of Objectives:
The objectives are relevant to the Country Assistance Strategy (CAS) for Fiscal Years 2009-2012. The CAS (p. 10) highlights unreliable and expensive infrastructure services and poor basic services as two of the key development challenges in Benin. Two of the three key pillars of the CAS are improving access to basic services and promoting better governance and strengthening institutional capacities.

The objectives are also relevant to government strategy. As a response to uncontrolled urban growth (5% annually over the past 20 years), from 1990-2004 the Government of Benin, supported by the World Bank and other international agencies, has provided a framework to support this growth by improving living conditions of the urban poor (ICR, p. 1) This framework led to the provision in 35 cities for key urban services, including rehabilitation of public infrastructure. The first phase of the APL financed the delivery of urban services to Benin's three primary cities and this project aims to expand this to secondary cities.

Relevance of Objectives is High.

b. Relevance of Design:
The project's design at appraisal as laid out in the results framework of the PAD was relevant to the eventual achievement of its objectives. The design not only focused on providing infrastructure, it sought to improve access by enabling municipalities to better provide services and maintain infrastructure. As such, one of its components (Component A) focused on improving management tools and financial resources of the municipalities and to providing them with support from the relevant line ministries. The second component (Component B) rehabilitated urban roads and drainage in order to improve access to urban infrastructure. The third component (Component C) focused on improving access to basic services for residents of poor neighborhoods. This was done by involving the community in selecting relevant micro-projects. Finally, the last component (Component D) focused specifically on improving waste management in one city (Porto Novo) as part of improving basic services. The project was designed to build up infrastructure and to ensure sustainability through strengthening the capacity of municipalities and community involvement.

The project was to finance a number of studies designed to support decentralization and local government reforms -- increasing revenue-raising capacity, managing resources and assets, enhancing technical and administrative management, improving solid waste management, and increasing local participation. However, the results framework did not specify how, or through which activities, the recommendations of these studies would be implemented and progress monitored.

Relevance of Design is Substantial.

4. Achievement of Objectives (Efficacy) :

The degree of achievement of the project's development objective -- to increase access to infrastructure and basic services for residents of Benin's primary and selected secondary cities -- is rated substantial.

  • By 2012, a considerable amount of urban infrastructure had been constructed, rehabilitated, or enhanced through sub-projects financed by the operation; most sub-projects were operational by closure: 37.63 km of paved roads (against a revised target in 2008 of 32.18 km); 15.41 km of primary drainage networks (against a revised target in 2008 of 14.8 km); 11 new classrooms; 21 latrines; two health centers newly equipped and a number of others (unspecified) re-equipped; 14 water kiosks installed; three public gardens built; two new markets constructed; five new and nine rehabilitated secondary refuse transfer stations; and a new solid waste landfill at Takon, near Porto Novo (although the landfill was not operational at project closure: delays on the part of the National Board for Procurement Control meant that the operator's contract was not signed until six months after the closing date).
  • Numerous studies in solid waste management capacities were carried out for the cities of Porto Novo and Cotonou.
  • The number of operational Neighborhood Development Committees was 14 in 2012, surpassing the target of 10. There were no functional committees in 2004.
  • Technical and administrative management procedures manual were developed and in use in three primary cities by project completion.
  • All 6 cities generated periodic budget reports by project completion. Budget performance indicators have been assigned to each municipality to monitor recurrent costs.

  • Access to services increased significantly as a result of project-supported infrastructure and related enhancements: 446,520 more people gained access to paved roads (against a target of 336.000); 526,184 people faced a reduced flood risk, nearly five times the target of 114,000 (the ICR provides no details on how the flood risk was reduced for so many people); the number of pupils attending school in the new or improved classrooms rose by over 1,300; and the newly equipped and re-equipped health centers provided, on average, 20 consultations per day (no baseline figures are provided); and 115,000 more people were given access to improved solid waste collection (in Porto Novo, the proportion of waste collected and transported out of the city rose from 25% in 2004 to 71% in 2012, against a target of 65%), improving the quality of the environment and reducing health risks. The ICR also states that the new parks and gardens increased access to safer and cleaner recreational areas, but no figures are provided.
  • Municipal finances were improved. The percentage of billed taxes recovered increased for all 6 municipalities between 2004 and 2012, meeting or exceeding targets (Cotonou from 75% to 82%, target 75%; Porto Novo from 52% to 66%, target 65%; Parakou from 64% to 65%, target 65%; Abomey-Calavi from 51% 70%, target 65%; Lokossa from 19% to 65%, target 60%; and in Kandi the percentage remained constant at 68% in accordance with the target). All 6 primary and secondary municipalities experienced a growth in their own revenues by 2012 with respect to baseline values in 2004 (Cotonou 56%, Porto-Novo 165%, Parakou 48%, Abomey-Calavi 215%, Lokossa 190%, and Kandi 68%).
  • According to the ICR, project outcomes would be sustained not just through improved municipal finances but also through improved managerial procedures and strengthening of communities. However, the evidence for this is limited to introduction of procedural manuals, production of regular budget reports, the establishment of maintenance teams in each municipality, and the number of functional Neighborhood Development Committees.

Program Objectives

There is no evidence or discussion in the ICR in relation to the APL program objectives of providing "better quality and cost-effective services to urban residents, especially the poor."

5. Efficiency:

The ex ante and ex post economic analyses cannot be compared. While the PAD analyzed only roads, the ICR analyzes everything except roads. The latter were excluded from the ex post estimates on the grounds that road investments had to have an economic rate of return (ERR) of greater than 12% to be considered for the investment program, and the PAD had shown an average ex ante ERR of 24%. This reasoning is deficient since it takes no account of changes in costs, benefits and other determining factors since appraisal.

For the project other than roads, the ICR calculates ERRs and what it calls modified economic rates of return or MERRs (according to the ICR, the ERR assumes that project cash flows are reinvested at the rate of the ERR whereas the MERR considers that positive cash flows are reinvested at the country financing cost). The ICR considers the MERR as a more accurate reflection of the cost and financial viability of a project, though it is unclear how it improves upon the traditional ERR. Increased municipal revenues were used as a proxy for the benefits of Component A (municipal management strengthening), a methodology that would seem to be less than fully robust, and which led to very high rates of return (see below). Benefits for Components B (basic infrastructure), C (community participation and integration), and D (solid waste management) were derived from a survey of beneficiaries' perceptions; it is unclear how these perceptions were quantified. The ERR and MERR for the project as a whole (minus the roads component) are estimated to be 56% and 40% respectively (ICR, p. 42). This overall result is dominated by the return for Component A (which has an MERR in excess of 100%). It is noteworthy that Component D (solid waste management in Porto Novo) had a negative net present value of -US$4.2 million, with an MERR of -20%, while the MERRs for Components B and C were 18% and 20% respectively.

There were a number of significant operational and administrative inefficiencies, reflected in a closing date 21 months later than scheduled (though some of this was required to carry out activities funded by the Additional Financing), and with some infrastructure (notably the Takon solid waste landfill) still not fully functional by project closure.

Given reservations about the robustness of the methodology, the fact that ex ante and ex post estimates cannot be compared, and inefficiencies reflected in implementation delays, 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
ICR estimate:

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

6. Outcome:

Based on high relevance of objectives, substantial relevance of design, achievement of the project's development objective to a substantial degree, and modest efficiency, overall outcome is assessed as moderately satisfactory.

a. Outcome Rating: Moderately Satisfactory

7. Rationale for Risk to Development Outcome Rating:

  • A moderate risk stems from the lack of economic viability of the solid waste component, accentuated by the delay in the operator's contract for the Takon landfill.
  • Institutional risks are moderate. Although the municipalities have benefited from studies and enhanced procedures supported by the project, these require continual updating and staff would need a well thought-out career development and training strategy if the improvements are to be lasting.
  • Financial risks are moderate. While the project has enabled an improvement in the municipalities' fiscal situation, it is unclear if the increases in revenue can be sustained (there has been backtracking in the past in a number of municipalities).
  • Sustainability risks are moderate. Municipalities are responsible for the maintenance of the infrastructure financed under the project, and municipal maintenance teams have been established. At project completion, municipalities had between 62-82% of their budget allocated and spent on infrastructure and basic services and between 20-44% of their budgets allocated and spent on road maintenance (ICR, p. viii). While this is a considerable improvement on the situation pertaining prior to the project, there is no indication if the sums budgeted and spent are adequate for routine and periodic maintenance since the amounts required have not been estimated. The Borrower's ICR (ICR, page 56) has already observed some emerging maintenance issues, such as cracked tiles and missing garbage grills. The Borrower's ICR also mentions poor quality work in some instances (see Section 11b below).

    a. Risk to Development Outcome Rating: Moderate

8. Assessment of Bank Performance:

a. Quality at entry:
This project was designed as a continuation of the first phase of the APL to increase access to infrastructure and basic services given the improvement in capacity of the local government to mobilize resources for priority infrastructure. The Bank integrated lessons learned and studies undertaken in the previous phase of this APL, though which lessons and studies are not specified in the ICR. Institution building activities were supported in all six cities in order to produce and maintain the infrastructure in this project. The results framework and the choice of indicators reflected both outputs and outcomes. The participatory approach that was used, including establishment of neighborhood development committees to supervise and operate social infrastructure projects, reduced political tensions during implementation and increased ownership among communities.
The monitoring and evaluation framework was well-designed and did not need to be modified during project implementation. Risk analysis was thorough and identified all potential project risks.

Quality-at-Entry Rating: Satisfactory

b. Quality of supervision:

The Bank coordinated well with the implementing agencies and the oversight ministry, Ministry of Environment, Housing and Urban Development. Two supervision missions per year were undertaken, and there were regular field visits to ensure compliance with safeguards and verify physical progress. There were monthly reviews when the project was facing substantial delays.

Bank management provided guidance to the project team to assist relevant counterparts in addressing project implementation delays. The Bank project team worked closely with the project coordination unit and the two project implementation units to adjust project activities to minimize the impact of delays. Additional financing was provided when needed for scaling up infrastructure activities. The ICR reports that safeguard policies were complied with and financial audits were timely and unqualified. There were some M&E reporting issues (see Section 10 below).

Quality of Supervision Rating: Satisfactory

Overall Bank Performance Rating: Satisfactory

9. Assessment of Borrower Performance:

a. Government Performance:
The municipal authorities were very committed and involved in project implementation. However, the central government did not fully deliver its committed counterpart funding neither for the original project nor for the Additional Financing. As explained in Section 2d, above, this was due to the allocated funds being used to pay for unforeseen social measures related to resettlement of communities living near the Takon landfill. Despite this, the government did provide US$1.9 million, according to the project team, in counterpart financing. The disbursement rate was slow during the first years of implementation due to political changes resulting from the election of a new president and the time required for the new parliament to endorse the project. According to the ICR, the reason the Takon landfill was not operational at project closing was "primarily due to clearance delays [to sign the operating contract] at the level of the National Board for Procurement Control" (ICR, p. 8).

Government Performance Rating: Moderately Unsatisfactory

b. Implementing Agency Performance:
According to the ICR, the implementing agencies were the Project Coordination Unit (PCU) and the two Project Implementation Units (PIUs), established during the first phase of the APL and well-experienced. These worked closely with the municipal authorities to select projects at the municipal and community levels. The PCU and PIUs ensured that Bank procurement and disbursement procedures were followed and safeguards observed (see Section 11, below). They regularly monitored civil works, and when substandard work was noted on some sites, they dealt with it effectively (for example, recommending replacing grills on garbage collectors that were easy to remove with grills that were difficult to remove). Independent audit and evaluation reports noted that the PCU and PIUs handled "management of project implementation very well" (ICR, p. 20). There were some issues with M&E implementation (see Section 10 below)

Implementing Agency Performance Rating: Satisfactory

Overall Borrower Performance Rating: Moderately Satisfactory

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

a. M&E Design:
Monitoring and Evaluation was well designed. Under the four project components, there were 17 indicators identified along with data on baselines, targets, and progress by project closure. These indicators were not modified during implementation except for Component B indicators which were updated to reflect the Additional Financing. The indicators were well chosen to monitor progress under each component. The frequency, data collection instruments, and responsibility of data collection were defined in the PAD. The Societe d'Etudes Regionales d'Habitat et d'Amenagement Urbain (SERHAU) was given responsibility for monitoring components A, C and part of component D and the Agence d'Execution de Travaux Urbains (AGETUR) was given responsibility for monitoring component B and part of component D.

b. M&E Implementation:
SERHAU and AGETUR collected data for the indicators which were updated every Bank mission. Challenges faced included updating indicators on municipal revenues and access to infrastructure indicators. Specifically, the indicators on access to primary and secondary roads and the population protected from periodic floods were reported differently, due to different baselines, in the implementation status reports and in the Additional Financing documents. There was no monitoring of the impact of studies financed by the project to strengthen institutional capacity of line ministries and municipalities.

a. M&E Utilization:
Indicators related to municipalities fiscal revenues and expenditures are continuing to be used by the municipalities as benchmarks for their performance.

M&E Quality Rating: Modest

11. Other Issues:

a. Safeguards:
The project was classified as Category "B" for Environmental Assessment purposes. Two safeguards policies were triggered: Environmental Assessment (OP 4.01) and Involuntary Resettlement (OP 4.12). The ICR (p. 9) reports that all safeguard requirements were complied with.

Environment. An environmental and social management framework was prepared at appraisal to address construction and rehabilitation of drainage in Cotonou, Parakou and Porto Novo and was publicly disclosed (PAD, p. 22). The ICR reports that, during project implementation, environmental impact assessments with detailed environmental and social management plans were prepared for activities in these cities. The Benin Environment Agency monitored and certified the project's adherence to national environment assessment policy. The implementing agencies reportedly ensured that consultants and contractors adhered to the recommendations of the environmental and social management plan. According to the ICR, environmental management and assessment capacities were built up in participating cities and municipalities through training seminars on environmental and social assessments.

Resettlement. According to the PAD (p. 22), a resettlement policy framework was prepared at appraisal to address requirements related to the landfill at Takon (near Porto Novo). The ICR reports that, during project implementation, resettlement action plans (RAPs) were prepared prior to commencement of civil works. The government used its counterpart funds to compensate communities living near the Takon landfill. As mentioned in Section 2d, above, classrooms, toilets, roads, clinics, community center, electricity and water supply were financed by the government to compensate communities whose land was acquired. This led to the government being unable to mobilize funding for their share of the original and additional financing of the project.

b. Fiduciary Compliance:
Financial Management.
The ICR reports that audits were timely and unqualified, and that all accounting and financial reporting systems were in line with national and Bank procedures.


  • Annual procurement plans were reviewed by the Bank. Procurement of goods and selection of consultants was done according to Bank guidelines. The most important delay related to the operator's contract for the Takon landfill and was due to the National Board of Procurement taking a long time to sign the operating contract for the landfill. At project closure the landfill was still not operational. According to the ICR, the two Project Implementation Units had adequate capacity and staff to carry out procurement under the project. There were no reported cases of misprocurement.
  • The Borrowers ICR reports that companies selected on the bases of low bids did not always produce the best work. These companies "encounter great difficulty in completing constructions works, due to poor workmanship. This had negative repercussions on the quality and durability of the work." (ICR, p. 56).

The project disbursed quite slowly in the first two years. This was due to political changes resulting from the election of a new president. It took time for the new parliament to approve the project and effectiveness was delayed.

c. Unintended Impacts (positive or negative):

d. Other:

12. Ratings:

IEG Review
Reason for Disagreement/Comments
Moderately Satisfactory
Efficiency is assessed as modest. 
Risk to Development Outcome:
Bank Performance:
Borrower Performance:
Moderately Satisfactory
There were significant shortcomings in government performance (see Section 9a above) 
Quality of ICR:
- 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 lessons are taken from the ICR with some adaptation of language:

1. Institutional-building components need a proper implementation framework. The project financed several studies related to capacity-building exercises for the line ministries and municipalities but did not include a framework for monitoring the progress of these institutional activities. (p. 20).

2. Lack of planned counterpart funding by the borrower can adversely affect implementation. The government's inability to come up with sufficient counterpart funds led to implementation delays. (p. 55).

3. If adequate provision for infrastructure maintenance is not built into the design, sustainability will be undermined. Although the project enhanced the organization and financing of maintenance at the municipal level, there is no indication whether the effort will be sufficient to meet requirements (p. 56).

4. Training and motivation for enhanced professionalism among contractors is likely to improve the quality of infrastructure. A system of rewards for excellence and blacklisting for poor work can be instituted as well as training of contractors (p. 56). As mentioned in Section 11b, above, companies selected on the bases of low bids did not always produce the best work

14. Assessment Recommended?


15. Comments on Quality of ICR:

The ICR covered most aspects of the project well, and discusses specific details of project outputs and outcomes. The main weakness is the lack of discussion of the APL program objectives. There were some other shortcomings. There is some inconsistent reporting on indicators, which had to be clarified later by the project team. A private company was recruited to evaluate the project at closing and discovered that more people benefited than was originally thought. Therefore there are discrepancies between some indicator values in the front of the ICR which are based on data from the implementing agency and indicator values reported in the body of the ICR which are based on data from the private company. There is no information on the methodology of the private company or who financed them in the ICR. The Agence Française de Développement is mentioned in one table on project financing as a parallel co-financier but without additional explanation or details. The discussion of the economic analysis used to assess efficiency is confusing; it is unclear why an important activity (roads) was not analyzed ex post. There is inconsistency in reporting counterpart funding.

a. Quality of ICR Rating: Satisfactory

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