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         Water Resources Development Phase II

    The Cyprus Southern Conveyor Project for Water Resources Development, Phase II, supported by Loan 2914-CY for US$30.0 million, was approved in FY88. The project was closed in FY96 after a one year delay, at which time the undisbursed balance (US$2.3 million) was canceled. Cofinancing was provided by Kuwait Fund (US$15.4 million), EIB (US$17.5 million), and a UK grant (US$2.3 million). The Implementation Completion Report (ICR) was prepared by the Europe and Central Asia region on the basis of a draft ICR from the FAO/World Bank Cooperative Programme. The borrower’s evaluation is attached to the ICR. There is no indication that the cofinancers were asked to contribute to the ICR.

    The main objectives of the project of both Phase I and II were to improve water availability for domestic use and irrigated agriculture, whilst taking steps to improve cost recovery, enhance water use efficiency and ensure the mitigation of adverse environmental impact. Specifically the Phase II loan supported: water resources development of the Dhiarizos diversion; development of four irrigation distribution networks; on-farm development; domestic water supply development, including treatment plants and the Nicosia conveyor and two rural water schemes; operation and maintenance and miscellaneous equipment; and technical services and training.

    Progress towards achieving the project’s objectives was mixed. Progress on the four physical components was good, although completion of the main works was one year behind the original schedule and certain works remain to be completed. Cost recovery for domestic water supply was good, but for irrigation it remained below target. High water use efficiencies were achieved and environmental mitigation measures recommended. These measures are still being implemented.

    The ICR rates project outcome as satisfactory, sustainability as likely, institutional development as modest and bank performance as satisfactory. The Operations Evaluation Department (OED) notes that there are some outstanding issues, mainly related to ensuring that the identified environmental mitigation measures are implemented, and thus rates outcome only as marginally satisfactory. OED agrees with the ICR ratings on sustainability and bank performance but rates institutional development as negligible owing to two significant institutional shortcomings: the proposed National Water Entity has yet to be established and the Monitoring and Evaluation unit, reportedly formed under Phase I did not function and has ceased to exist.

    Key lessons of the project are that: continuity between phases of projects minimizes delay and allows the project to benefit from earlier experience; project monitoring and evaluation and operational planning and water resources management should be clearly defined at an early stage; and environmental management should be incorporated into the project cycle so that all required mitigatory measures are fully agreed and implemented.

    The ICR is satisfactory and provides useful insight into the progress and problems of the project. However, it fails to comment significantly on the implications of its observations on the identified environmental mitigatory measures.

    No audit is planned.

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