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Implementation Completion Report (ICR) Review - Nura River Clean-up Project


  
1. Project Data:   
ICR Review Date Posted:
04/21/2014   
Country:
Kazakhstan
PROJ ID:
P059803
Appraisal
Actual
Project Name:
Nura River Clean-up Project
Project Costs(US $M)
 67.82  97.80
L/C Number:
L4693
Loan/Credit (US $M)
 40.39  40.39
Sector Board:
Environment
Cofinancing (US $M)
 0  0
Cofinanciers:
Board Approval Date
  05/15/2003
 
 
Closing Date
09/30/2009 06/30/2011
Sector(s):
Petrochemicals and fertilizers (36%), Irrigation and drainage (30%), General agriculture fishing and forestry sector (17%), Solid waste management (16%), Central government administration (1%)
Theme(s):
Pollution management and environmental health (29% - P) Water resource management (29% - P) Other human development (28% - P) Environmental policies and institutions (14% - S)
         
Prepared by: Reviewed by: ICR Review Coordinator: Group:
David M. Colbert
Stephen Hutton Christopher David Nelson IEGPS1

2. Project Objectives and Components:

a. Objectives:
The Project Appraisal Document (PAD, p. 2) defines the project development objective (PDO) as “to improve the welfare of the population in the Nura River Basin by cleaning up serious mercury pollution in area adjacent to the Nura River, providing a safe, secure and cost effective alternative source of water supply to meet growing needs of local water users, and restoring flow control in the river for flood management and ecological purposes.”

The Loan Agreement (Schedule 2, p.12), on the other hand, states the PDO as to “(a) improve the welfare of the population in the Nura River Basin by cleaning up serious mercury pollution in and adjacent to the Nura River; (b) provide a safe, secure and cost effective alternative source of water supply to meet growing needs of local water users; and (c) restore flow control in the river for flood management and ecological purposes.”
This review will assess achievement of the development objective as formulated in the Loan Agreement, which is the formulation adopted by the ICR as it is the legally binding one.

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

c. Components:
Component 1: Nura Valley Mercury Clean-Up (appraisal amount US$44.08 million; actual US$58.77 million). This component would include construction of a secure landfill for contaminated soil and materials; excavation of contaminated hotspots at a polluted factory site; excavation of other highly contaminated areas and transport to the landfill site; initial operation and long-term maintenance and monitoring of the landfill; and inspection and monitoring of the landfill.
Component 2: Intumak Reservoir Rehabilitation (appraisal amount US$19.13 million; actual US$33.76 million). Component 2 would include rehabilitation of the Intumak Reservoir, including reinforcement of the dam and completion of the spillway and gates to allow the dam to operate as a flow-control mechanism as originally designed; development and implementation of an integrated water resources management plan for Intumak and the upstream Samarkand and Sherubianur Dams and reservoirs.
Component 3: Nura-Sarysu River Basin Authority Strengthening (appraisal amount US$1.68 million; actual US$1.67 million equivalent). This component would include technical assistance, training and equipment necessary to increase the institutional capacity of the Nura-Sarysu River Basin Authority, in order to strengthen its resource planning and management capacity, as well as to strengthen the water quality monitoring network, and water pollution control systems.
Component 4: Project Management and Monitoring (appraisal amount US$2.53 million equivalent; actual US$3.20 million). This component would cover a number of activities related to project management and monitoring, including the incremental operating costs of the Project Management Unit (PMU); training in procurement, disbursement, and project accounting; auditing of project accounts; assistance in implementation of the environmental management plan; and assistance in hydrology, social sciences, and environmental management.

d. Comments on Project Cost, Financing, Borrower Contribution, and Dates
Project Cost: The ICR reports that the cost of the project was initially estimated at US$67.83 million but that at completion project costs were US$ 97.80 million (144% of the original project costs). The large variation in cost was due to the extent of polluted territories and level of pollution discovered in Nura River flood plains during the detailed design and pre-construction excavation phase. Costs were further increased due to the delays in state approvals for the design, the requirement to update the feasibility study (and the accompanying state approvals) resulting in the delay in construction works. However, the government of Kazakhstan financed the escalated costs as well as the remaining costs of works pending at loan closing.
Financing: The project was financed by a $40.39 million IBRD loan and by a Borrower contribution. There was no co-financing.
Borrower Contribution: At appraisal the Borrower planned to contribute US$27.4 million; whereas the actual contribution was US$57.41 million equivalent or 209% of planned. This large increase in the Borrowers’ contribution was due to the reasons explained above, and was fully funded through the Borrower’s own funds after the loan closing in June 2011. The ICR does not clearly distinguish between Borrower expenditure prior to and after project closure.
Dates: The project effectiveness date was extended one time to June 17, 2004, because of the delay in ratifying the Loan Agreement by Kazakhstan’s Parliament. The loan became effective on June 14, 2004, almost 15 months after project approval (March 27, 2003). The expected closing date (September 30, 2009) was extended twice as a result of significant delays in project implementation. Initially, the extension was processed as a legal amendment for nine months, establishing June 30, 2010, as the closing date. The second extension was processed as a level-two restructuring and was granted for 12 months, establishing June 30, 2011, as the closing date.


3. Relevance of Objectives & Design:

a. Relevance of Objectives:
Substantial. At the time of project appraisal Kazakhstan was still responding to the legacy of environmental damage left by the output-focused development policies of the former Soviet Union. The government faced a number of challenges with respect to remediation of environmental degradation, cost-effective supply of potable water to the population, and ongoing protection of environmental resources. In order to assist the government in addressing these challenges, the Bank’s 2001-2004 Country Assistance Strategy (approved January 16, 2001) included lending to support the most vulnerable, through improvement in the delivery of municipal and industrial water supply and sanitation and to protect the environment by addressing environmental degradation. The Bank's strategy concentrated on addressing industrial pollution in the Northeastern industrial area, promoting integrated planning of water resources and addressing the security of water supply and access to clean water for vulnerable populations.
The project objectives remain very relevant to the Bank’s current Country Partnership Strategy (FY 2012- FY 2017), which cites the Nura River Clean-Up Project as part of the Bank’s ongoing support for pollution remediation in Kazakhstan and commits the Bank to continue providing assistance for “rehabilitation of selected industrial contaminated sites” and broadening and deepening “implementation of Energy Efficiency and water resource management” (para. 71-72, p.25). While the objectives appear less relevant to the government's Strategic Plan for Development 2020, which identifies national priorities for achieving a competitive, diversified economy, they are very relevant to the National Environmental Action Plan.

b. Relevance of Design:
Substantial. The PAD contains a detailed project design summary (Annex 1, pp 28 – 31) connecting the sector-related Bank strategy goal to relevant sector outcomes, the project development objectives to project outcomes/impacts and project activities to relevant outcomes. The project’s environmental remediation activities could reasonably be expected to improve the health and welfare of the affected population in the Nura River Basin by reducing their exposure to toxic substances. Furthermore, the improvements in Nura River water quality resulting from the environmental remediation could reasonably be expected to provide local water users with a safe and secure alternative source of water supply (even though the cost-effectiveness of this alternative is not convincingly demonstrated). Finally, rehabilitation of the Intumak Reservoir could reasonably be expected to improve water resources management (assuming adequate institutional capacity for such management), by allowing the dam to operate as a mechanism for flow control at its original design reservoir level, thus providing control over river flows for flood management and ecological purposes.


4. Achievement of Objectives (Efficacy) :

(a) Improve the welfare of the population in the Nura River Basin by cleaning up serious mercury pollution in and adjacent to the Nura River. Substantial
The project successfully removed the sources of mercury exposure and contamination of the water supply, delivering significant welfare gains for the local population in terms of overall well-being and public health.
Outputs:
  • The Karbide factory site was cleaned up. The factory was dismantled, including all buildings and facilities on the site, demolition wastes and contaminated soils were transported to the landfill, and the site was backfilled with clean clay and covered with top soil and vegetation.
  • A hazardous waste landfill was constructed, which has disposed of more than 2 million tons of contaminated material.
  • The mercury deposits along 30 km of the Nura River were cleaned up, removing and safely disposing of 2 million m3 of polluted soil and river sediments.
Outcomes:
  • Quantifiable welfare gains derive from the mercury clean-up of the Nura River, the factory site and riverbeds, to acceptable safe levels for soils and improved water quality for household needs and agriculture, benefiting thousands of people in villages along the river bed and more than 170,000 in the city of Temirtau.
  • Clean-up of the factory site achieved significant reductions in ambient mercury concentrations in air emissions in the vicinity of the factory.
  • The mercury clean-up also resulted in approximately 6,000 ha of land becoming available for agriculture and grazing.

(b) Provide a safe, secure and cost effective alternative source of water supply to meet growing needs of local water users. Substantial
The project can demonstrate achievement of the outputs and most if not all of the corresponding outcomes.
Outputs:
  • The mercury in the water supply was cleaned up to safe levels.
  • The dam and reservoir were rehabilitated to ensure secure water supply.
Outcomes:
  • A safe and secure source of water supply was provided to nine villages upstream (7,600) and downstream (12,000) of the reservoir, as well as to the cities of Temirtau (170,000) and Astana (785,000).
  • Water quality was improved to safe levels based on water sampling and analysis showing a steady decline in mercury levels in surface water.
  • Irrigation water supply was provided along the 600 km river stretch downstream of the reservoir, increasing irrigated land from the current 3,500 hectares to 20,000 in 2020.
  • However, there is no evidence demonstrating the cost effectiveness of this alternative source of water supply.

(c) Restore flow control in the river for flood management and ecological purposes. High
The project can clearly demonstrate achievement of both the outputs and the corresponding outcomes.
Outputs:
  • The reservoir’s capacity was increased by 95% to 108.9 million m3, at least 10% more than the target value.
  • A 118 m. long spillway structure was constructed with with throughput capacity of 3000 m3/sec.
  • The dam was rehabilitated to improve its capacity and allow for a controlled flow downstream to the wetlands and villages.
Outcomes:
  • Flow control was restored so that villages downstream of the dam will now benefit from reduced flooding.
  • A constant supply of water is now available to the villages and wetlands throughout the year.
  • A regulated supply of 253 million m3 of water will be available annually to the wetlands downstream.

5. Efficiency:

Substantial. The PAD included an economic analysis of improved water supply and other benefits that might accrue as a result of better water quality and flow management (pp. 16-17) and arrived at an estimated net present value (NPV), after deducting capital and operating costs, of $30.6 million - yielding an economic rate of return (ERR) of 22.7%. These project benefits are highly probabilistic, depending on hydrology, rehabilitation of water supply systems in Astana, Karaganda and Temirtau, and demand growth. The project's quantifiable benefits derive from the avoided cost of drawing water from the Irtysh-Karaganda Canal, assuming the Nura clean-up could lead to avoided use of the canal system, resulting in annual net savings in the cost of water supply averaging US$ 5.2 million for Astana, $6.7 million for Temirtau, and $6.8 million for Karaganda. The PV of these benefits would total US$ 76.9 million through to 2018. Additional measurable benefits in terms of willingness to pay for regular water supply, access to recreation and hunting opportunities, and enhanced biodiversity are estimated to have a NPV of $3.2 million through to 2018. Given the uncertainties surrounding water supply benefits, however, switching values were also computed and the project's ERR would still exceed 12%, even if water supply benefits fell to 49% of the value estimated above.
The ICR reaches a similar result, an EIRR of 12%, but bases its economic analysis on a completely different use of the Nura River water supply. The PAD evaluated the economic benefits based on the avoided costs of water supply for Astana; the ICR dismissed the Nura River water supply for Astana and did not include these benefits in its ex-post economic analysis. Instead, the ICR based its economic analysis on the supply of Nura River water for irrigation purposes. With annual regulated flow from the reservoir suitable for irrigation purposes and government plans to expand irrigated land from 3,500 hectares to 20,000 hectares by 2020, the ICR determined benefits based on estimated average agricultural return per hectare for irrigated land. Improved agricultural performance can be expected based on increased agricultural yields, increased prices due to changes in cropping patterns and higher value crops, improved soil conditions resulting from irrigation, and better water quality. Based on other agricultural projects in Kazakhstan, the ICR estimated the incremental benefits attributable to irrigation to be USD 3,600 per hectare. Attributing 50% of these benefits to irrigation, since additional investments would be required to realize them, would lead to an EIRR of 12%. It should be noted that neither of these economic analyses includes estimated project benefits other than improved water supply, such as those from reductions in air and soil pollution, improvements in public health and increases in land values resulting from the project. Given these other benefits that were not considered, the estimates of 12 % would appear to be lower bounds.

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:
Yes
12%
100%
ICR estimate:
Yes
12%
100%

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

6. Outcome:

The project’s objectives and design were both substantially relevant. The project’s efficiency was also substantial. The project fully and effectively achieved its outputs, exceeding target values in some cases but requiring more time and incurring more costs in others. But, the project only substantially achieved its outcomes, failing to provide evidence that the provision of water supply to meet the needs of local water users was “cost-effective”.

a. Outcome Rating: Satisfactory

7. Rationale for Risk to Development Outcome Rating:

The ICR indicates that, at project completion, all infrastructure investments and clean-up activities were complete and the assets created were of good quality. The project attempted to ensure the sustainability of its outcomes; the principal risk to these development outcomes is institutional. The government institution charged with ensuring long-term achievement of the project’s development outcome is the Committee of Water Resources (CWR), under the Ministry of Environment Protection (MEP), which assumed ownership of assets created under the project. Kazhydromet, also under MEP, has national responsibility for monitoring of water, soil and air quality. But, the critical responsibility for managing the Nura River, the reservoir, dam and spillway is now divided between two separate agencies: the Nura-Sarysu River Basin Inspection, responsible for planning and control of water resources in the Nura River, and the Karaganda Vodghoz, responsible for the operation and management of the reservoir, dam and spillway. While there is state budget available for these agencies to perform these tasks effectively, the division of responsibilities for water resources management in the Nura River Basin presents inherent institutional risks of potential conflict and confusion. The other institutional question at project completion was handing over responsibility for the landfill to the Karaganda Vodghoz, which has state budget for landfill management and an operations manual for its maintenance but no previous experience in this area. This new management responsibility for the Karaganda Vodghoz raises potential institutional risks for the development outcome.

a. Risk to Development Outcome Rating: Moderate

8. Assessment of Bank Performance:

a. Quality at entry:
The Bank adequately responded to the government's developmental and environmental priorities. The project appears to have been well-designed, combining critical environmental remediation with the benefits from improved water management of the Nura River, including improved water quality, increased availability for irrigation, and enhanced flow control of the spring flood waters. However, the original PDO indicators had to be revised during project implementation because they were poorly defined at the outset. Furthermore, the project was appraised without the detailed engineering studies, soil and water sampling, pollution investigations and target values necessary to fully estimate the magnitude of the clean-up required, which in the end resulted in substantial increases in completion time and project cost. In the end, however, when the necessary information became available, the baseline indicators were established through the risk assessment and the target values were agreed based on international good practice. The EIA was comprehensive, provided a pragmatic evaluation of alternatives and raised the right design and implementation issues, including potential health risks. The impacts of implementation delays on engineering, procurement, and government design approvals could have been better identified and addressed in the timeline at appraisal. The project would have benefitted from a beneficiary assessment, for example, in determining improvements in the welfare of the local population in the Nura River Basin. In the end, the project proved technically sound and its activities were implemented as designed.

Quality-at-Entry Rating: Moderately Satisfactory

b. Quality of supervision:
Project supervision was adequate during implementation, with the exception of two years (2007 and 2008) when only one supervision mission was fielded, and continued even after loan closing in order to provide technical advice to the implementing agency completing the project. Project implementation presented many challenges for the Bank, which for the most part responded proactively in dealing with problems as they arose, including the delays in effectiveness, changes to technical design and procurement. The ICR notes that, in the early stages of implementation, the ISR ratings were too generous and optimistic; the Bank should have been more cautious at that point. The supervision documentation (ISRs, AMs) was rather succinct and brief focusing on the identification of strategic implementation issues rather than documenting the details of project implementation. Procurement packages were handled on a prior-review basis, financial management missions were undertaken separately; however, the AMs did not report adequately on project monitoring and evaluation (M&E). The ICR contends that, if countersignature procedures in Kazakhstan would have allowed for a restructuring to become effective prior to loan closing, the PDO and results indicators would have been formally restructured (e.g. narrowing the scope of the PDO, identifying measurable results indicators). However, it is not clear what difference that would have made in achievement of project outcomes in the end.

Quality of Supervision Rating: Moderately Satisfactory

Overall Bank Performance Rating: Moderately Satisfactory

9. Assessment of Borrower Performance:

a. Government Performance:
The government strongly supported the project and its objectives aligned with those of the National Environmental Action Plan, as demonstrated by the fact that the government included this project in its public investment program for 2004. And, during negotiations, the government indicated its willingness to increase its share of overall financing and, in fact, did so when the detailed sampling and investigations indicated the need for additional financing for the clean-up. At project completion, the government’s contribution to the project was more than twice (209%) the initially committed amount. However, delays hampered the government’s performance throughout the life of the project. The ICR maintains that the initial delay of fifteen months in reaching project effectiveness did not significantly impact implementation since the procurement process was happening in parallel. But, it is hard to believe that this delay did not negatively affect procurement and other project decision-making (e.g. feasibility studies) in the context of Kazakhstan's governmental process. On the other hand, the ICR maintains that the Borrower continued to support the Bank’s efforts in dealing with delays during design and implementation but concedes that the need to update the Feasibility Study and the accompanying State approvals caused additional delays in project implementation. On this basis the government’s performance is rated moderately satisfactory at best.

Government Performance Rating: Moderately Satisfactory

b. Implementing Agency Performance:
The ICR indicates that the Committee of Water Resources (CWR) was committed to the project and provided satisfactory support and day-to-day oversight of project implementation in resolving issues with intra-governmental procedures and supervision of contractors and consultants. However, changes of CWR’s Chairman and Deputy Chairman and high staff turn-over within CWR (especially for procurement and financial management) resulted in delays in procurement and payment. Furthermore, the Implementing Agency/PMU did not submit timely progress reports, nor did it undertake project-level M&E of the PDO indicators to monitor project progress. Additional project management challenges occurred when, for example, the project contractor had to continue to ensure security and maintenance of the mercury disposal facility after expiration of the defect guarantee period. On the other hand, the ICR indicates that the PMU and Implementing Agency were effective in obtaining the series of state approvals needed for (i) the updated feasibility studies required to obtain additional budget, (ii) the supervision of contractors and (iii) the completion of activities for clean-up operations and rehabilitation of the reservoir. The ICR also commends the PMU for persuading WHO to perform an investigation for Minamata disease (a neurological syndrome caused by mercury poisoning) in the Nura River Basin and Temirtau region. For these reasons, the Implementing Agency’s performance is rated moderately satisfactory.

Implementing Agency Performance Rating: Moderately Satisfactory

Overall Borrower Performance Rating: Moderately Satisfactory

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

a. M&E Design:
The PAD based the project’s M&E design on annual implementation progress reports based on monitoring indicators, agreed with the Borrower, that were identified in the Project Design Summary (p. 12; Annex 1, pp 28-31). But, this M&E design got off to a bad start because several of the indicators proposed in the PAD did not have readily quantifiable baseline or target values (e.g. increased reliance on local water resources by the users in the Nura basin), which made it difficult to monitor implementation progress and PDO achievements. In addition, the ICR indicates that the initial project indicators did not comprehensively cover the scope of the project (p. 10). Thus, the project’s monitoring indicators had to be revised and realigned in 2007 when baseline data became available as a result of the detailed design and extensive pollution mapping, sampling and laboratory analysis performed. To make matters worse, the necessary staffing to perform project level M&E in the PIU was not specified nor was the scope of the monitoring activities delineated at project appraisal.

b. M&E Implementation:
Environmental Remediation. The project’s mercury clean-up operation required pollution mapping in order to determine the areas of priority for environmental remediation, so the project undertook extensive mapping of sites, identifying “hot-spots” for mercury remediation or removal. The project adopted clean-up standards in line with international standards for river bed sediments, river banks, floodplains, remote areas, etc. The outcome indicators of the clean-up operation were measured by a very detailed sampling and investigation program using the same sampling grid as prior to the clean-up operations; which provided maps of all the cleaned areas.
Air and Water Quality Monitoring. For monitoring purposes, the project adopted MPC (Maximal Permissible Concentration) of mercury content in air and for drinking water and irrigation water. The project began its quarterly water quality monitoring program (testing and collecting data on a monthly basis) in 2007 after all water monitoring stations were installed along the Nura River and the detailed training of laboratory personnel on mercury analysis was completed. The MEP provided Kazhydromet the operational budget (staff and infrastructure) required for project monitoring (air, water, soil, and fish) and published a bulletin annually for public dissemination.
Despite the project’s best efforts, however, it appears that M&E implementation was sporadic and incomplete. The results of surface water quality monitoring performed by Kazhydromet were reported in quarterly and annual reports. The ICR indicates, however, that the PIU did not monitor PDO progress nor did the Bank report on it in its supervision mission Aides Memoire. Progress was captured only in the ISRs. When the revisions to PDO indicators took place in 2007, the mission Aide Memoire did not even mention it, nor apparently did the Mid-Term Review provide an update of project indicators. At project completion, a comprehensive stocktaking of the PDO indicators was undertaken.

a. M&E Utilization:
Overall, the project had mixed results in utilization of the indicators from the M&E program. On the one hand, the M&E indicators were clearly integral to the performance of the mercury clean-up operations (in determining the levels of mercury contamination of soil, air and water, as well as the levels for clean-up) and were more than effectively employed for project execution; on the other hand, project-level indicators were never effectively employed to monitor project implementation progress. The latter was largely the result of (i) the Bank’s failure to routinely report on the indicators in its mission AMs and (ii) the Borrower’s failure to routinely report on the indicators in its annual reports. In sum, the project paid only limited attention to monitoring indicators of project progress toward achieving its desired outcomes. Curiously, perhaps the most successful project reporting could be found in Kazhydromet’s annual publication: “Informational Bulletin on Environmental Situation of Nura River Basin,” which reported the results of monitoring on water, air, soil, and fish life.

M&E Quality Rating: Modest

11. Other Issues:

a. Safeguards:
Environmental Assessment: The project triggered OP 4.01 and was classified as Category A (Full Assessment) by the Bank at appraisal since it could cause significant environmental impacts affecting an area broader than the sites or facilities subject to remediation. A comprehensive Environmental Impact Assessment (EIA) was conducted by a team of international and local consultants. The EIA analysis included, other things, an in-depth evaluation of alternative landfill sites. The EIA also provided an Environmental Management Plan (EMP), which specified the mitigation measures applicable to different stages of mercury clean-up. The EMP covered site management and institutional control, health and safety protection for clean-up workers and nearby residents, contingency planning and emergency response, waste removal from buildings, soil removal and transport, and landfill operation. The ICR confirmed successful implementation of the EMP.
Dam Safety: Before appraisal, the project had international experts perform a dam safety assessment at the Intumak Dam, which confirmed the need for priority rehabilitation measures, including completion of the spillway and rehabilitation of the main dam in order to allow the reservoir to retain water, particularly during the flood season. This supported the integrated water resources management focus of the project, which required rehabilitation and up-grading of the reservoir, dam and spillway, so it could play a multipurpose role in water management in the Nura River Basin.
International Waters: The project triggered OP 7.50 since the Nura River is connected by canal to the Ishim River, an international waterway, which ends in Russia. The GOK met the requirements of this policy in notifying Russia, the riparian country, about the project and requesting comments. Since no comments or objections were received from Russia, the project went ahead.

b. Fiduciary Compliance:
Procurement: The ICR did not note any significant problems in procurement. A procurement plan for project implementation for all components was developed and prior-reviewed by appraisal. The Bank rated the overall project risk for procurement as medium to high, considering the lack of Bank procurement experience in the PMU and the prevalent procurement environment in Kazakhstan. In the end, however, the procurement staff in the PMU was adequate and performed well, even though there was some procurement staff turnover during implementation.
Financial Management: The ICR rated the project’s overall financial management as moderately satisfactory. This included project accounting and reporting arrangements, staffing, internal control procedures, planning and budgeting, counterpart funding, and financial manual and external audits. The project generally complied with the financial management requirements of the Loan Agreement, the Interim Financial Reports, as well as audit reports.

c. Unintended Impacts (positive or negative):
None

d. Other:



12. Ratings:

ICR
IEG Review
Reason for Disagreement/Comments
Outcome:
Satisfactory
Satisfactory
 
Risk to Development Outcome:
Moderate
Moderate
 
Bank Performance:
Moderately Satisfactory
Moderately Satisfactory
 
Borrower Performance:
Moderately Satisfactory
Moderately Satisfactory
 
Quality of ICR:
 
Satisfactory
 
NOTES:
- When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006.
- The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate.

13. Lessons:
The ICR reports the following lessons:
In pollution clean-up projects, adaptation to local conditions and inherent uncertainties regarding the extent of pollution is largely a process of “learning by doing.” Pollution remediation is a complex and risky business, involving a high level of uncertainty, even with the most advanced knowledge and sophisticated technologies. Often when environmental contamination occurs, the physic-chemical processes involved tend to be governed by complex conditions that can lead to extremely irregular pollution distributions and create a high probability for unforeseen situations, which can only be uncovered during remediation works. This has profound implications on timing and costs. No amount of up-front information gathering by drilling, sampling and analysis will lead to 100 percent certainty and thus there is a need to adapt to these circumstances during implementation.

Implementation delays resulting from institutional changes and state approval processes are more difficult to manage if they are not factored as risks into project design. The project team should be cognizant of the country systems in place and assess whether they pose any apparent risks. Then appropriate mitigation measures should be in place to minimize the impacts of potential delays.

Post-closure management of project assets, including operation and maintenance of the landfill, is better managed by up-front agreements with respect to project assets with project counterparts. Post-completion arrangements of all assets created, especially the landfill, should be discussed and agreed with the Borrower before project completion or loan closing.

IEG also finds that:
It is difficult to assess the welfare impact of environmental clean-up projects if no assessment of beneficiary views/impacts is conducted. The project did not have plans for the assessment of impacts of the clean-up activities on project beneficiaries. Ideally, this should be done at the design stage or during implementation, to better understand the project’s impact on beneficiaries but also on other qualitative aspects related to welfare, poverty reduction, etc. In the absence of longer-term health and epidemiological studies of the beneficiary population, a beneficiary assessment can be a valuable tool in understanding the social/health gains made under the project.

14. Assessment Recommended?

No

15. Comments on Quality of ICR:

The ICR is comprehensive in its detailed presentation and analysis of the evidence generated by this complex environmental remediation/water resources management project. Its focus is appropriately results-oriented in its presentation and analysis of the project’s various outputs and outcomes, as well as of the performance of the Bank, the Borrower and project M&E. The ICR’s overall rating of the project’s outcome (pp. 19-20) relies heavily on outputs rather than outcomes corresponding to the project’s development objectives, but the rating is consistent with the IEG rating in the end. The presentation and analysis of project details are consistent throughout the document, and the lessons identified are based on a thoughtful analysis of the evidence, challenges and insights presented by the project.

a. Quality of ICR Rating: Satisfactory

(ICRR-Rev6INV-Jun-2011)
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