June 30, SDR 32.4 m, US$ 50 m SDR 14.3 m, US$ 22 m. US$ 26.3 m (53%) US$ 11.7 m (53%) US$ 38.0 m or SDR 27.3 m (58%)

Transcription

1 Nepal: Rural Water Supply and Sanitation Improvement Project (IDA Credit No NP and IDA Grant No. H945-NP) Mid-Term Review Mission ( 6-17, 2017) Aide Memoire 1. During 6-17, 2017, a Bank Team 1 led by Shideh Hadian (outgoing Task Team Leader) and Joep Verhagen (incoming Task Team Leader) carried out the Mid-Term Review (MTR) of the Rural Water Supply and Sanitation Improvement Project (RWSSIP). This Aide Memoire (AM) summarizes the findings on the status of the project implementation and agreements reached with the relevant agencies at the wrap-up meeting held on 16, 2017 with Mr. Krishna Raj BC, Secretary, Ministry of Water Supply and Sanitation (MoWSS). Annex 1 presents a list of people met during the review; Annex 2 presents the Result Framework. Annex 3 presents the agreed action. I. OVERALL STATUS AND KEY PROJECT DATA Project Data Ratings Previous New Approval Date May 29, 2014 Achievement of PDO MS U Credit/Grant Signing Date July 11, 2014 Implementation Progress MS MU Effectiveness Date 10, 2014 Project Management MS MU Closing Date Credit Amount Grant Amount Credit Amount Disbursed Grant Amount Disbursed June 30, 2020 SDR 32.4 m, US$ 50 m SDR 14.3 m, US$ 22 m US$ 26.3 m (53%) US$ 11.7 m (53%) 1 Procurement MS MS Financial Management MS MS Safeguards Monitoring and Evaluation Cumulative Disbursement (As of 17, 2017) US$ 38.0 m or SDR 27.3 m (58%) Counterpart Funding S S Ratings: S=Satisfactory; MS = Moderately Satisfactory; MU= Moderately Unsatisfactory; U=Unsatisfactory 3. Achievement of Project Development Objective (PDO) and Project Implementation are significantly behind. At MTR, 22% of the targeted 1.5 million people were provided with access to improved water points - an estimated 800 schemes need to be completed within the remaining project period to meet the project targets; 13.25% of the Village Development Committees (VDCs) were declared open defecation free (ODF); and, none of the targeted 3,300 schemes were visited by the district backstopping facility. A gap is projected between physical and financial progress of at least 12% for Component 1 upon completion of Batch X (refer table). An independent assessment of the water supply schemes found that, of the schemes less than 2 years old, approximately 25% needs major repairs. Sustainability of older schemes was found to be a concern. A field visit to three schemes brought out issues related to progress reporting and implementation supervision by (FB). With a disbursement of 9.06%, Component 2 is lagging similarly. Progress and implementation of Component 2 is likely to be affected by the ongoing Federal transition. Finally, there have been continuous slippages in completing the actions agreed during past reviews. Component 1 PHYSICAL PROGRESS (PDO) access to improved water points (# people). # of VDCs declared ODF. Budget (IDA, US$ million) MS MS FINANCIAL PROGRESS Actual Disbursement MS MU % of budget R&R Earthquake 106, % Batch IX 334, % Batch X (projected) 398, % Target/Allocation 1,502, % Projected Achievement 48.85% 13.25% 1 The team comprised Shideh Hadian (Sr. Infrastructure Economist, TTL), Silva Shrestha (WSS Specialist, Co-TTL), Joep Verhagen (Sr. WSS Specialist), Rokeya Ahmed (WSS Specialist), Shambhu Prasad Uprety (Sr. Procurement Specialist), Yogesh Bom Malla (Sr. Financial Management Specialist), Annu Rajbhandari (Environment Specialist), Dron Pun (Environment Specialist-Consultant), Ishwor Neupane (Social Development Specialist-Consultant), Aayushma K.C. (Consultant), and Sushila Rai (Program Assistant).

2 4. Restructuring. It is highly unlikely that at the current rate of progress and with the available resources, the PDO of the Project will be achieved. The team recommends a restructuring to; (1) scale down the PDO targets; (2) address supervision of and reporting on community level activities; and, (3) address the ongoing Federal transition in the country. 5. Component 1 progress status is summarized below: Batch IX: 358 of 376 schemes completed benefiting 335,000 people in 260 VDCs. Batch X: Development Phase for 562 schemes is completed; 15 schemes were dropped for not meeting the criteria. Implementation of 482 schemes has started potentially benefitting 0.4 million people. There is a projected price escalation of 250% vis-à-vis the initial cost estimates at appraisal for Batch X schemes. The FB has been requested to provide detailed documentation of this price escalation that will be reviewed by the team. Rehabilitation of earthquake affected schemes in 14 districts: Design and cost estimates were finalized for 386 schemes, and minor rehabilitation work was completed for 168 schemes benefiting 106,000 people. Sanitation: 53 of the targeted 147 VDCs have been declared ODF benefiting 46,000 households. Total sanitation activities personal and household hygiene, etc. in some 250 VDCs are progressing but are not captured in current the results framework. 6. Component 2 activities have progressed but with slow pace. The design of web-based Monitoring and Evaluation (M&E) system has been completed and will be implemented by the District Support Organization for Sustainability (D-SOS) in coordination with the Project Support Team (PST) in the five districts to support monitoring of functionality and sustainability of schemes. Combined technical/financial evaluations for four out of five D-SOSs were submitted to the Bank for review. Negotiated documents will follow by mid Contracts should not exceed a duration of two years and four to ensure completion before project completion. Terms of references were developed for: (i) procurement of consulting services for development of Water Sanitation and Hygiene (WASH) Plans in 70 districts; and (ii) D-WASH Units. Strategy for WASH networking and marketing was formulated by the Project Support Team (PST). The prepared Memorandum of Understanding (MOU) between MoWSS and Ministry of Federal Affairs and Local Development (MoFALD) to formally establish D-WASH units needs to be revised considering the ongoing federal transition. 7. Component 3 - PMU-MoWSS has a new Project Director at Joint Secretary level, a full-time and dedicated Deputy Project Director, plus two technical staff. The team observed that the Deputy Project Director is not yet fully available. Through the recent amendment of the FB s formation order the Government of Nepal has aligned the composition of the FB s Board with Nepal s Federal structure. The team welcomed this amendment. Currently, the FB is fully staffed (48) and hires additional consultants as portfolio managers. FB urgently needs to improve the quality and consistency of its reporting, strengthen internal checks and balances on financial and physical progress, and on community-level procurement and accounting. II. KEY POINTS DISCUSSED AND AGREED ACTIONS 2 8. General: Given the observed and agreed abovementioned issues, the FB and PMU agreed to jointly develop a realistic action plan for the remaining project period and share this with the Bank team (this was received by 28, 2017). Preparatory activities for Batch XI under Component 1 will not continue until the action plan has been agreed upon. 9. Component 1 - Supervision implementation of Batch X To address supervision of the implementation of Batch X schemes, the FB and PMU will develop a proposal to monitor implementation of Batch X schemes using the mobile application developed under Component 2. It was agreed that FB would send invitation letter to SOs for necessary training by 24, This has been delayed due to election protocols. ( 11, 2017). To strengthen component 1 social accountability mechanisms, FB will: (a) share finalized Jagaran Guidelines; (b) coordinate with the PST to enhance mobile app to support grievance reporting by Jagaran Committees; (c) develop a training package for Jagaran committees on the use of community report cards; and, (d) develop a proposal for documentation of grievances received and recording of corrective actions. ( 15, 2017) 2 Dates agreed during the MTR discussion. Dates in parenthesis are subsequently postponed deadlines. 2

3 To strengthen the sanitation-related activities, FB will: (1) share a detailed progress report on sanitation activities including the use of ODF grants by the VDCs, the support provided to the ultra-poor; and the construction of institutional toilets: (2) develop a detailed action plan to declare all 147 VDCs ODF by June 2018 and a revised strategy and action plan for post ODF activities to sustain the ODF-status by 30, 2017 (Received): and, (3) train 15 to 20 small scale entrepreneurs on sanitation marketing by January 15, Component 2 Implemented by PMU-MoWSS PMU to expedite contracting of D-SOS consultants for the four districts by 30, 2017 with an adjusted scope of work and contract duration (see para 12). Negotiated contracts received for two districts by 24, ( 15, 2017). In case of Makwanpur district no technically qualified consultant could be identified. The team agreed that there is insufficient time for rebidding; hence, the PMU will re-visit the ToRs and propose an alternative process to carry out sustainability support activities by 24, 2017 ( 11, 2017). PMU to coordinate with Department of Water Supply and Sewerage for the development of a framework and actual plan, and finalize the ToRs for District/Local Government level WASH Plans by 31, FIDUCIARY COMPLIANCE - Procurement Performance 11. Both the PMUs are using Systematic Tracking of Exchanges in Procurement (STEP). However, the procurement plans, prior and post review procurement activities are not updated regularly as advised during the previous review. Secondly, by the end of first week of every month, dates and procurement documents should be uploaded. To ensure the required due diligence during the selection of consultants, the Project and the implementing agencies need to upload the CVs of all key experts proposed in technical proposals and the CVs of individual consultants irrespective of prior or post review requirements. 12. Finalization of the procurement of the D-SOS for four districts by MoWSS should be expedited to sign the contracts by first week of The team also draws the attention of MoWSS to reduce the proposed duration and activities of these four contracts to fit within the remaining project period. As per the team s assessment this can be done without affecting the objectives of the assignments substantially. The Bank procurement team will undertake a visit to select schemes under implementation to review community procurement practices. Based on overall performance and partial progresses of the planned activities, procurement performance is retained at Moderately Satisfactory. FIDUCIARY COMPLIANCE - Financial Management (FM) Performance 13. For FY2017/18, the budget of NPR 21, million has been allocated (GoN NPR 2, million and IDA NPR 19, million). NPR 19, million and NPR 2, million has been allocated FB and MoWSS respectively. In the first trimester, the total expenditures are: NPR million (0.72% of allocation) by FB; NPR million (0.56% of allocation) by MoWSS. The counterpart fund allocation is satisfactory. The Project has been maintaining books of accounts as required by the Government rules and regulations. The team reviewed payment vouchers on a sample basis and it was found to be in compliance with the financial regulations. The Project has also maintained required ledgers such as main grant register, subsidiary grant register, designated account. There are no outstanding trimester Implementation Progress Reports and audit reports under both the components. However, the team reminded that the unaudited reports for FY2016/17 were due on October 15, 2017, and the audited reports will be due on January 15, The internal audit for FY2016/17 has been completed in MoWSS with no issues reported by the internal auditors. The draft internal audit report for third trimester of FY2016/17 has been submitted for FB. The internal auditor has noted few internal control weaknesses relating to accounting, procurement related, and compliance. The FB has been suggested to strengthen its internal control systems and comply with applicable accounting, procurement and compliance requirements. FB has appointed internal auditor for FY2017/18 and has initiated hiring of the auditor of Batch X WSUCs. The review/audit report of Batch IX SOs and WSUGs has been partly obtained with the following observations: weak accounting system, inadequate record keeping and supporting documents; lack of evidence of cash contribution by community, non-compliance of procurement policy, non-compliance of terms and conditions of tripartite agreement. 15. Disbursements Status: Total disbursement as of review date is USD 38.0 million (SDR million) including initial advance. There is no disbursement lag and based on information provided by the project, about USD 3.0 million 3

4 is projected for the next quarter. Based on the progress made and completion of agreed actions, the FM performance rating is retained as "Moderately Satisfactory". ENVIRONMENT AND SOCIAL SAFEGUARD MANAGEMENT 16. The team noted partial progress in achieving the agreed actions for social safeguards during the last review. FB has shared two guidelines for review in October 2017: Gender and Social Inclusion (GESI) and Environmental and Social Management Plan (ESMP). Two guidelines on Women s Technical Support Services (WTSS) and Jagaran are yet to be drafted and finalized. The team observed that the prolonged absence of GESI Expert in the FB might have far reaching impacts on the overall performance. The team reiterated the need to improve the safeguards compliance regarding: signing of MOUs between land donors and WSUCs; encouraging legal transfer of donated lands; and, maintaining of proper documentation by SOs/WSUCs. 17. The team reviewed the progress on the environmental safeguard and is pleased to note that all ESMPs except one have been submitted to FB by the SOs. However, the field visit revealed that the ESMPs are not site specific and that key environmental issues/risks are not adequately captured, and mitigation measures are not proposed. The team requested the FB to revise parallel to implementation the ESMPs. Prefeasibility water quality tests showed that 35% of gravity schemes are at high risk of bacteriological contamination. The team informed FB that tests need to be done during development and implementation phases, and requested FB to submit a water safety plan for these schemes. 18. Inspection of ongoing construction revealed that communities require technical support particularly while installing water treatment systems or innovative technologies. The Project agreed to provide technical support and monitor the technical execution of the schemes. The frequency of monitoring by Portfolio Manager (PM) needs to be intensified to provide timely technical input especially during the construction. Discussions with WASH officers and social mobilizers pointed at the need to conduct required training of the SOs prior to development phase. Finally, the team recommended the project to obtain technical designs for twin pit latrines approved by GoN and raise awareness on the disadvantages and environmental risk of single pit latrines. Earlier agreed actions have been completed. The social safeguard rating has been retained at moderately satisfactory. 19. The overall safeguard rating has been retained at Moderately Satisfactory. 20. Next Review: Tentatively scheduled for early February Summary of Agreed Prioritized Actions 3 1 Develop a realistic action plan for the remaining project period and share this FB and PMU 30, 2017* with the Bank team 2 Develop a proposal to monitor implementation of Batch X schemes using the FB and PMU 11, 2017 mobile application developed under Component 2 3 Expedite the negotiations and complete the contracting of D-SOS consultants PMU 15, 2017 for the four districts 4 Re-visit the ToRs and propose an alternative process to carry out sustainability PMU 11, 2017 support activities for Makwanpur District 5 Revisit and revise ESMPs of Batch X to capture the keys environmental and social issues parallelly with implementation Continuous 6 Develop training packages and report card to assist and empower Jaagaran committees on Social Accountability 15, Prepare action plan to address audit issues raised by the auditors. 8, Submit audit project accounts of FY FB/ MoWSS January 15, 2018 * Action plan submitted by FB and PMU within Nov. 28, This list contains only prioritized actions. Detailed agreed actions during MTR is listed in Annex 3. 4

5 Annex 1: List of People Met Ministry of Water Supply and Sanitation 1. Mr. Krishna Raj BC, Secretary 2. Mr. Anil Bhadra Khanal, Joint Secretary 3. Mr. Jyoti Kumar Shrestha, Joint Secretary/Project Director 4. Mr. Dinesh Adhikari, Sr. Divisional Engineer/Deputy Project Director Ministry of Finance 5. Mr. Yuga Raj Pandey, Under Secretary, IECCD Rural Water Supply and Sanitation Fund Development Board 6. Mr. Bhupendra Prasad Aryal, Executive Director 7. Mr. Sanjay Kumar Mishra, Deputy Executive Director 8. Mr. Binod Dhital, Chief of the Planning and Operations Division 9. Mr. Pravesh Niraula, Chief of the Project Monitoring and Evaluation Division 10. Mr. Tika Prasad Adhikari, Chief of the Human Resource/Program Development Division 11. Mr. Kapil Dev Gyawali, Chief of the Technical Division 12. Mr. Chudamani Pokharel, Chief of the Administration Division 13. All Professional Staff, Experts and Rehabilitation and Reconstruction Team Project Support Team for Component Mr. Pranab Shah, Team Leader 15. Mr. Krishna Rana, Deputy Team Leader 16. Mr. Khem Dallakoti, Procurement Specialist 17. Mr. Rajeeb Ghimire, M&E Specialist 18. Mr. Prem Nidhi K.C., Social Development Specialist 19. Ms. Pallawee Jha, IMT Specialist 20. Mr. Padam Prasad Jamar Kattel, Training Specialist UNICEF 21. Mr. Dandi Ram Bishwakarma, WASH Specialist 22. Mr. Siddhi Shrestha, Sanitation Specialist 23. Mr. Surendra Babu Dhakal, M&E Specialist List of People Met During Kavre Field Visit SO: SJAYC 24. Mr. Shankha Buddha Lama, Chairperson 25. Ms. Parbati Rana, Team Leader 26. Mr. Phupendra Adhikari, WASH Engineer 27. Ms. Sunita Luitel, WASH Officer 28. Ms. Ranju Nepal, WASH Officer 29. Ms. Durga Phuyal, WASH Officer 30. Mr. Nirmal Pariyar, WASH Motivator 31. Mr. Parash Moktan, WASH Technician 5

6 Scheme Name: Thulo Khola Lift WS District: Kavre, Location: Mandandeupur Municipality Ward No Mr. Thulo Kancha Sarki, WSUC Chairperson 33. Mr. Sano Kancho Tolonge, Vice Chairperson 34. Mr. Sabina Bisunkhe, Treasurer 35. Mr. Sukuram Sarki, Secretary 36. Mr. Kumar Ramtel, Member 37. Mr. Budh Kumara Sarki, Member 38. Mr. Raju Sarki, Member 39. Mr. Kalika Sarki, Member 40. Mr. Ramesh Ramtel, Member Scheme Name: Budhathoki Lift WS District: Kavre, Location: Sankhupati Chaur Ward No Mr. Sajan Budhathoki, WSUC Chair 42. Mr. Ambika Budhathoki, Vice Chair 43. Mr. Sonam K.C., Treasurer 44. Mr. Ramhari Budhathoki, Secretary 45. Mr. Shyam Budhathoki, Member 46. Mr. Sanu Karki, Member 47. Mr. Sunita Sunuwar, Member 48. Mr. Mithu Budhathoki, Member 49. Mr. Sanker Budhathoki, Member SO: SYA 50. Mr. Pahal Man Shrestha 51. Radhe Shyam Duwal, Chairperson 52. Hari Krishna Shrestha, Team Leader 53. Bibek Kayastha, WASH Engineer Scheme Name: Manohara Besi Ground Lift WS District: Bhaktpur, Location: Changunarayan Municipality Ward No. 1, Ganesh Bahadur Shrestha, WSUC Chairperson 55. Ganesh Bahadur Khatri, Vice Chairperson 56. Sushila Sharma, Treasurer 57. Raju Khatri, Secretary 58. Mina Shrestha, Secretary 59. Ram Kaji Docha, Member 60. Kedar Prasad Khanal, Member 6

7 Annex 2: Results Framework, as of October 30, 2017 (Includes Indicators for New Sub-category under Restructured Project) Project Development Objective (PDO): Increase sustainable access to improved water services and promote improved sanitation and hygiene practices in rural areas; and (ii) Develop and implement a long-term support mechanism to promote the sustainability of water supply schemes in selected Districts. Result Indicators Indicator 1: People provided with access to improved water points; of which, female (percentage). Indicator 2: Number of VDCs declared ODF by the Districts. Indicator 3: Number of schemes visited by the backstopping facility at the District level; of which (percentage of schemes non-functioning). Indicator 4: Improved community water points constructed (new, expansion, rehabilitated under the project). Indicator 5: Number of water supply schemes completed and in operation; of which (Jagaran Committee established). Indicator 6: Number of WSUCs formed; (those with at least 3 women members). Indicator 7: Improved public latrines constructed under the project (number) in schools and health posts. Indicator 8: People trained on improved hygiene behavior, and sanitation practices; of which, female (%) and school children (%). Core Unit of Measure Number (000) Base line 0 Cumulative Achievement (October 31, 2017) (49%) PDO Level Results Indicators Cumulative End Target Value 1502 (female %) 7 Achievement Against Target 22.3% Number % Number Frequency Data Source/ Methodology District Level MIS Responsibility for Data Collection D-WASH Unit, PMU-MoWSS Intermediate Results (Component One): Access to Improved Water Supplies and Promote Improved Hygiene Practices Number 0 9,356 37, % Number (100%) 1,874 (80%) 18.62% Number (100%) 1,874 (100%) 51.44% Number % Number (000) (F 49%) (S 6%) 2,400 (F %) (S %) 44.62% Description Includes 424 schemes in Batch-IX retroactively financed Target is 400 VDCs There are 3300 schemes in 5 districts; half is nonfunctional. On average 20 water points per scheme Includes 424 schemes in Batch- IX retroactively financed Includes 424 schemes of Batch- IX and 537 schemes of Batch-X On average 3 public toilets are built in each VDC Number of beneficiaries in ODF declared 53 VDCs and number of beneficiaries in water supply schemes both Batch-IX 349

8 Indicator 9: Households provided with improved and rehabilitated latrines in the earthquake affected districts. Indicator 10: People provided with improved water supply through rehabilitation of schemes in earthquake affects districts Indicator 11: Water and Sanitation units ((DWASH Unit) formally established under the DDC with defined functions. Indicator 12: District level M&E system established. Number 0 12,924 22, % Number 0 106, , % Intermediate Result (Component Two): District Level Institutional Strengthening Number % Number % Project MIS Project MIS PMU-MoWSS PMU-MoWSS completed schemes and Batch-X DP completed 540 schemes. Under rehabilitation and reconstruction of schemes damaged in 14 Earthquake Affected Districts Under rehabilitation and reconstruction of schemes damaged in 14 Earthquake Affected Districts Only for 5 districts in component 2 Only for 5 districts in component 2 Note:- As regard to Indicator 9, Achievement could not be reported due to following reasons : R &R programme was designed with immediate focus on Water supply In the sanitation side, there was focus on software part like promotion of personal domestic and environmental sanitation. As regard to household and institutional toilet, SOs and communities facilitated repair and construction work only without any materials and financial support.fund also was not allocated for sanitation and hygiene materials( at least pan and pipe up to plinth level, plastic sheet for super structure, Hygiene Kit etc) as mentioned restructuring document. R &R guideline was approved by Board and no-objection obtained from WB. 8

9 Annex 3: Summary of Agreed Actions during Mid-term Review S.N. Actions Agreed Responsibility Environment ESMPs of Batch X to be revisited and revised to capture the keys environmental and social issues parallelly with implementation Provide Water Safety Plan for high risk (ecoli contamination) gravity water supply schemes Get technical designs for twin pit latrines as per GoN s guidelines and accordingly advocate and raise awareness on the disadvantage and environmental risk of single pit latrines. Ensure the Portfolio Managers visit schemes at least 2 times a year with adequate environment and social safeguards monitoring. Provide technical support to monitor the SOs technical execution of the schemes very closely particularly while installing water treatment systems (for e.g. iron removal,) and adopting different/new technologies for functionality and sustainability of the schemes. Social Safeguards Encourage legal transfer of land donated to WSUC via MOU 9 Agreed timeline Continuous February 15, 2018 February 15, 2018 Review quarterly Continuous Continuous 7 Hire GESI expert ASAP Share finalized Jaagaran Guidelines Coordinate with Component 2 on the technology used to report grievances by Jaagaran Commitees Develop training packages and report card to assist and empower Jaagaran committees on Social Accountability Citizen Report Cards to be sent to the World Bank every six Develop GRM to ensure documentation, upward flow of grievances to the Fund Board and actions taken on the grievances WTSS Guidelines to be shared with World Bank 14 Translation of GESI Guidelines into Nepali 15, , , 2017 Continuous 15, 2017 February 28, , 2017 Status as of 1, 2017/ Revised date

10 Project Management Complete the SO finalization for Batch XI Provide realistic number of schemes and corresponding funding essential to complete the schemes. Batch XI will only be approved once these numbers are finalized in consultation with the World Bank. Provide scanned minutes of the board meetings for the last 2 years. Provide financial implications of the schemes that have been dropped Submit two proposals on scope, coverage and timeline of mobile app training activities targeted towards Batch X SOs, SAs and WSUC. FB to include the letter sent to the SOs inviting them for the training. Fiduciary Prepare action plan to address audit issues raised by the auditors. Submit unaudited project accounts for FY16/17 Hire auditor for Batch X (implementation phase) Submit final audit report for Batch IX 24 Submit audit project accounts of FY Provide justification for difference between financial and physical progress Component 2 to start using STEP for procurement. Dedicated Procurement staff to document the monthly procurement activities. to provide monthly updates on the procurement activities on STEP in accordance with the procurement on the ground /PST / MoWSS MOWSS , , , , , , , , 2017 January 15, , 2017 As soon as possible Continuous Postponed Provided as part of the Action Plan on Nov. 28, 2017 Provided on Nov. 17, , 2017 Delayed due to election protocol. 11, , , 2017 Provided on 15, 2017 Initiated. First set of procurement activities approved in the Procurement Plan 10