Document of The World Bank

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank IMPLEMENTATION COMPLETION REPORT (IDA-30400) ON A CREDIT IN THE AMOUNT OF SDR 3.4 MILLION (US$4.49 MILLION EQUIVALENT) TO GEORGIA FOR A CULTURAL HERITAGE PROJECT June 15, 2004 Environmentally and Socially Sustainable Development Sector Unit South Caucasus Country Unit Europe and Central Asia Region Report No: GE

2 CURRENCY EQUIVALENTS (Exchange Rate Effective June 3, 2004) Currency Unit = Lari (GEL) Lari (GEL) 1 = US$ 0.52 US$ 1.00 = Lari (GEL) 1.92 FISCAL YEAR January 1 December 31 CAS DCA IDF LIL M&E NGO PAD PIU ABBREVIATIONS AND ACRONYMS Country Assistance Strategy Development Credit Agreement Institutional Development Fund Learning and Innovation Loan Monitoring and Evaluation Non-Governmental Organization Project Appraisal Document Project Implementation Unit Vice President: Country Director Sector Manager Task Team Leader/Task Manager: Shigeo Katsu Donna M. Dowsett-Coirolo Alexandre Marc Janis D. Bernstein

3 GEORGIA CULTURAL HERITAGE PROJECT CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 7 5. Major Factors Affecting Implementation and Outcome Sustainability Bank and Borrower Performance Lessons Learned Partner Comments Additional Information 20 Annex 1. Key Performance Indicators/Log Frame Matrix 21 Annex 2. Project Costs and Financing 23 Annex 3. Economic Costs and Benefits 25 Annex 4. Bank Inputs 26 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 28 Annex 6. Ratings of Bank and Borrower Performance 29 Annex 7. List of Supporting Documents 30 Annex 8. Evaluation Report: Fund for Preservation of Cultural Heritage of Georgia 31 Annex 9. Partner Comments: Ministry of Finance of Georgia 50

4 Project ID: P Team Leader: Janis D. Bernstein Project Name: CULTURAL HERITAGE TL Unit: ECSSD ICR Type: Core ICR Report Date: June 15, Project Data Name: CULTURAL HERITAGE L/C/TF Number: IDA Country/Department: GEORGIA Region: Europe and Central Asia Region Sector/subsector: Other social services (71%); Central government administration (29%) Theme: Participation and civic engagement (P); Other financial and private sector development (S) KEY DATES Original Revised/Actual PCD: 11/20/1997 Effective: 05/18/ /18/1998 Appraisal: 11/20/1997 MTR: 11/15/ /28/2000 Approval: 02/13/1998 Closing: 12/31/ /31/2003 Borrower/Implementing Agency: Other Partners: Government of Georgia/Fund for Preservation of Cultural Heritage of Georgia STAFF Current At Appraisal Vice President: Shigeo Katsu Johannes F. Linn Country Director: D-M Dowsett-Coirolo Judy M. O'Connor Sector Manager: Alexandre Marc James Christopher Lovelace Team Leader at ICR: Janis D. Bernstein Thomas Blinkhorn ICR Primary Author: Wendy Schreiber Ayres 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: Sustainability: Institutional Development Impact: Bank Performance: Borrower Performance: S L M S S QAG (if available) Quality at Entry: Project at Risk at Any Time: No ICR S

5 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The project s objective was to improve the management and promotion of Georgia s rich cultural heritage by: (a) testing approaches that could revive the once dynamic tourism industry, and (b) engendering social cohesion and national identity during the difficult economic transition. The project would achieve this objective by financing work to restore four sites of significant historic importance (including work to prevent further deterioration of private homes); activities proposed by community groups and others to restore or preserve historical and cultural assets (including music, dance, and handicrafts) in danger of being irrevocably lost; and technical assistance to strengthen capacity of the project implementation unit to manage the project, build awareness of the public of cultural heritage, and strengthen the capacity of people to develop and implement site management plans. The overall project objective was, and remains, appropriate. It reflected the importance of Georgia s cultural heritage to both citizens of the nation and to people of the world. Georgia is home to some 12,000 culturally significant monuments, and religious buildings, forts and walled cities, some dating to the last centuries B.C. Tbilisi, its capital city, protected from the development pressures that have changed the character of most cities in the rest of Central and Eastern Europe, still contains large neighborhoods dominated by traditional houses and shops. Georgia also has a rich and unique history of music and literature that is a strong focus of national pride and identity. At the time the project was conceived and prepared, the country had been independent from the Soviet Union for just six years. Interest in the history and culture of Georgia was rising rapidly as citizens sought to recapture a national identity based on its diverse ethnic and cultural traditions. The project s objective was also in line with the government s strategy of reviving tourism, a potentially important source of growth for Georgia. According to government statistics, tourism and travel accounted for about 10 percent of GDP in Tourism, along with the other economic activities, had collapsed with the breakup of the Soviet Union, and revitalizing the industry by restoring and protecting cultural sites and by reviving traditional music, dance, handicrafts, and other artistic activities was, and still is, viewed as important to stimulating the economy as a whole. Finally, the project was designed to help promote social cohesion in a country divided by conflict among various ethnic and political groups that threatened to tear the nation apart. The project s objectives also supported the objectives the Bank s country assistance strategy (CAS). These were to promote economic growth and diversification, to strengthen public finance, to protect the environment, and to reduce poverty. The project promoted economic growth by rehabilitating historic sites and revitalizing cultural traditions of interest to both Georgians and foreign visitors. It helped to strengthen public finance by insisting on transparency and accountability in procurement and financial management of project-related expenditures. It helped to improve environmental conditions in Tbilisi by encouraging the municipality to address the severe underground water problem, and in the other pilot sites, by supporting the development of environmental management plans. It also helped to reduce poverty by stimulating development in the areas where it operated. Finally, the project fit well within a broader program of Bank support to Georgia, which included a municipal infrastructure project and a social investment fund project, both of which aimed at revitalizing Georgia s cities and towns. 1 Statistics on tourism are very weak in Georgia and appear to capture not only tourists spending time in Georgia, but also lorries passing through Georgia transporting goods among neighboring countries

6 The project was the first stand-alone cultural heritage project to be supported by the Bank. Because of its innovative nature, a Learning and Innovation Loan (LIL) was used to pilot a variety of approaches to revive and protect cultural heritage. The project was the first in the Europe and Central Asia Region to benefit from this Bank instrument, which was introduced in fiscal Revised Objective: The objectives of the project were not formally revised during implementation. The Development Credit Agreement (DCA), however, was amended three times. The DCA was amended on July 22, 1998 to add operating costs to categories eligible for financing. The DCA was amended on May 5, 2000 to revise procurement procedures, as recommended in the midterm review. The DCA was amended on November 29, 2001 to reallocate proceeds of the Credit. 3.3 Original Components: The project comprised two broad components: (1) Investment (US$3.57 million). This included two subcomponents: Emergency Rehabilitation Program (US$1.03 million). This subcomponent focused on preventing the permanent loss of both immoveable and moveable cultural heritage by financing activities such as stabilizing buildings in danger of collapse, microfilming and archiving old manuscripts, and recording traditional songs and dances. 2 The program was to provide as grants a maximum of US$75,000 to community groups, nongovernmental organizations (NGOs), institutes, and others whose proposals were selected by the 52-member Georgian Cultural Revival Board through a rigorously transparent selection process. The staff of the Fund for the Preservation of Culture Heritage of Georgia (hereafter referred to as the Fund), which was established under the IDF and became the project implementation unit (PIU), would provide technical assistance to the committee and to beneficiaries, screen proposals for presentation to the committee to ensure that they complied with the criteria, and monitor and evaluate their implementation. Pilot Priority Cultural Heritage Sites (US$2.54 million). This subcomponent focused on comprehensively restoring the historic buildings, and monuments, and the surrounding areas of four important cultural heritage sites. The sites Old Town, Tbilisi; the famous northern mountain town of defensive towers, Shatili; the walled town of Signaghi; and the ancient rock city of Uplistsikhe were chosen after wide consultation with stakeholders on the basis of their cultural significance; evidence of community commitment to help protect, manage, and maintain the site; and evidence of community willingness to consider piloting new approaches for financing site management and maintenance, including through the forming public-private partnerships and implementing measures to recover costs. Funds were to be provided as grants to local authorities or community groups in accordance with a signed memorandum of understanding that would reflect a simplified plan, budget, and schedule for operation and maintenance. The Fund would assist communities prepare the plans. This subcomponent also included funds to rehabilitate private properties in Tbilisi and Signaghi officially designated as historic, called the Neighborhood Fund. 2 The subcomponent was originally titled the Emergency Rehabilitation Fund. The name was later changed to avoid confusion with the Fund for the Preservation of Cultural Heritage of Georgia, the PIU for the project

7 (2) Technical Assistance (US$1.4 million). This component included five subcomponents: PIU Support and Institution Building. This supported and strengthened the PIU by providing technical assistance in areas such as project management, finance and administration, procurement, monitoring and evaluation, and engineering. It also helped build capacity of the Ministry of Culture and other cultural heritage-related institutions by financing the participation of their staff in study tours and training sessions. Training and Study Tours. This involved training of staff of the PIU, the Ministry of Culture and other cultural heritage institutes, municipal authorities, and community groups in project management, community mobilization, methodologies of economic evaluation, and others according to demand. This subcomponent also included study tours to destinations in Western Europe to learn about their experiences in successfully preserving and promoting cultural heritage. Public Awareness Program. This involved preparation of articles for magazines and newspapers, programs for radio and television, and brochures and information booklets designed to increase public awareness of the importance of cultural heritage and the activities of the Fund. It also included funds to present photo exhibits, cultural fairs, seminars, the design and operation of a website, and the like. Integrated Conservation Master Plan, Old Town. This involved preparation of a plan intended to guide future development in Old Town, Tbilisi. The master plan would incorporate principles of planning in areas with important historical urban architecture and would involve economic and market analyses. Monitoring and Evaluation. This supported the development of a management information system to be used to monitor implementation of the project and its impact. This subcomponent would also support technical and financial audits, beneficiary assessments, and reports of independent evaluators. Finally, it would support participatory monitoring by cultural heritage committees at the pilot sites. The project was expected to be executed over three years. Overall responsibility for project implementation rested with the Fund, which was constituted as an autonomous agency for this purpose through decree. The Fund had gained experience with Bank procedures and project management by implementing the US$430,000 Cultural Heritage Initiative approved in 1996, financed by an Institutional Development Fund (IDF) grant, that had established the institutional foundation for the project. The Cultural Heritage Initiative Board of Trustees established by decree in 1996 with the support of the IDF grant and comprising representatives of government agencies and NGOs was to facilitate coordination, provide policy guidance, and oversee implementation. The Georgian Culture Revival Board would have a major role in evaluating and selecting proposals for funding under the ERP. Groups whose proposals were approved were responsible for implementing the proposed activities. The Fund would provide technical assistance and oversight. Community cultural heritage committees, with the technical assistance of the Fund were to implement small-scale activities at the pilot sites. The Fund was responsible for all procurement. 3.4 Revised Components: Project components were not formally revised during project implementation. However, funds were reallocated to allow six competitions to be held for funding under the popular Emergency Repair Program (ERP), rather than the three originally envisaged. The total cost of this subcomponent rose to US$1.46 million from the originally envisaged US$1.03 million

8 The project closing date was extended twice. The first extension to December 31, 2002 was granted to allow work in Tbilisi and Uplistsikhe to be completed. Works in Tbilisi could not start until repairs of the underground water systems conducted by the Municipality of Tbilisi and the Municipal Development Fund were complete. Moreover, an earthquake in November 2000 damaged the caves at Uplistsikhe, which required emergency reinforcement and delayed the start of the works. The second extension to December 31, 2003 was given to permit work in Tbilisi to be completed. Work had been delayed by bad weather last winter, an earthquake in April 2002, and unexpected difficulties in making arrangements for the temporary relocation of residents of the Erekle St. caravansary. 3.5 Quality at Entry: Quality at entry is rated marginally satisfactory. The project s development objectives were reasonably clear and appropriate, although too broad to allow measurement of the project s achievements. They were consistent with the government s development strategy and the Bank s CAS. The project aimed to rescue cultural heritage in danger of permanent loss critical both for stimulating economic development and for preserving and re-creating a national identity. The Bank s Quality Assessment Group did not assess the project s quality at entry. The project design benefited substantially from discussions with other organizations active in preservation of cultural heritage in Georgia, including the Council of Europe, Getty Trust, World Monuments Fund, UNESCO, and the Soros Foundation. It also reflected lessons learned from the implementation of the IDF grant and from the experiences of other countries with preservation of cultural heritage. These included incorporating a demand-driven fund for emergency rehabilitation of cultural heritage among the project s components, undertaking social assessments at the pilot sites, establishing community cultural heritage committees to help design and implement activities at the pilot sites, and supporting activities to raise public awareness of issues related to cultural heritage. The design also accounted for Georgia s limited experience with and capacity for implementing Bank-supported projects by using a autonomous PIU (that is, the Fund) to implement the project, staffed with many of the same people that had executed the IDF grant. While the use of independent PIUs is often criticized for creating structures parallel to those of the government, most Bank-supported projects in Georgia are implemented by such PIUs to compensate for exceptionally weak government capacity. The project also included substantial resources to develop human resources and to strengthen institutional capacity over time. The design was consistent with the Bank s safeguard policies. The project, classified environmental impact assessment category B, included funds for environmental analyses to be conducted at the pilot sites. Building on work that the Bank undertook in preparation of the project, the design also took account of the severe underground water problems in Old Town, Tbilisi by ensuring that rehabilitation of infrastructure and buildings took place only after the problem was resolved. The project included funds for the development of a resettlement and rehabilitation plan should the need for resettlement arise. The project appraisal document (PAD) realistically appraised the risks the project would face. In particular, it recognized that the risk of failing to mobilize resources for the operations and maintenance was substantial. The PAD did, however, mistakenly consider as negligible the risk that counterpart funds might not be forthcoming, and as modest the risk that no agreement with occupants of the Erekle Street caravansary on temporary resettlement could be reached. Credit effectiveness conditions depositing counterpart funding for the first year of the project (US$100,000) in a bank account, and completing and - 5 -

9 adopting the project operation manual acceptable to IDA were appropriate given the government s poor track record in providing agreed counterpart funds for donor-financed projects and the need to have clear implementation arrangements prior to project launch. Credit disbursement conditions that applied to financing of the renovation of the Erekle Street caravansary confirming that underground water problems were not an impediment to restoration, and completing a resettlement and rehabilitation plan acceptable to IDA were essential to ensure that project resources were not wasted and that the project complied with the Bank s safeguard policies. A dated covenant that the PIU recruit four technical specialists (project management advisor, procurement advisor, financial expert, and monitoring and evaluation specialist) was also appropriate. The design of the project was, however, weak in several ways. First, the plans for community participation were underdeveloped. Thus although the PAD states that resources for renovating pilot sites would be provided as grants to local authorities or community groups to implement subprojects, this was not implemented. Second, the project design failed to pay adequate attention to issues of raising funds for operating and maintaining the project investments. While it was envisaged that the project would support experiments with cost recovery techniques, the project designers appear to have been unaware that such experiments at public sites require a special decree before they can be carried out, an obstacle that ultimately blocked such experimentation. Even where entrance fees can be charged, such as at museums, the low number of visitors at most sites and the laws that require revenues raised through such fees to be submitted to the central treasury mean that other methods of raising funds for operations and maintenance must be found. Third, the project design lacked an economic analysis that might have revealed where resources could best be targeted. For example, Shatili was selected as one of the pilot sites, despite being snowbound nine months of the year not an area where tourism is likely to rise significantly in the near future (although Shatili is located near the Chechen border, it was considered a safe ecotourist destination at the time the project was designed). Although Shatili holds a special place in the hearts of Georgians because of its unique defensive towers, economic analysis may have shown whether the existence values alone could justify the use of public funds for renovations in a inaccessible village that is home to just 25 families, or whether the resources could be better spent elsewhere. Disagreements among the Bank team that arose during implementation with regard to Sighnaghi s prospects for increased tourism also may have been avoided. Fourth, the PAD did not present hypotheses that stated what questions were being explored through the project. This is a serious omission, given that the purpose of a LIL is to understand the effectiveness of the various approaches being tried. Although the project was prepared before clear guidance on the purpose and content of LILs had been prepared and the new template for LILs (which emphasizes their learning aspects) became available, more attention could have been paid to clearly articulating what the project designers expected to learn from the project and how the learning would take place. Fifth, despite including a subcomponent in the project on monitoring and evaluation (M&E) and the contracting of an international consultant to help design an M&E system, the plan for M&E was poorly articulated. Key performance indicators specified to measure impact were either too vague to be useful (incorporation of lessons learned through the project by government and communities in future efforts to preserve and promote cultural heritage), or would be difficult if not impossible to attribute to the project without the use of sophisticated econometric techniques (increase in number of tourists visiting the sites benefiting from the project, and increase in number of cultural heritage-related activities, such as the national music competitions, during the project life). The PAD lacked benchmarks or details of the tools that would be used to measure project impacts. The PAD also failed to acknowledge that statistical - 6 -

10 capacity in Georgia is extremely weak, and to propose measures that would allow necessary information to be collected in the face of the weaknesses. Finally, establishing a three-year time frame for implementing the project was too ambitious, especially considering its experimental nature. All experiments require time to carry out, evaluate, redesign, retest, and reevaluate. Successfully concluding several experiments simultaneously, as in this project, in just three years is not likely. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: Achievement of the objectives of the project is rated satisfactory. While the project s objectives were broad, which makes measuring achievements difficult, the project has contributed to permanently improving the management and promotion of Georgia s cultural heritage by demonstrating the value of a variety of approaches to protecting and rehabilitating cultural heritage, forging ties with private benefactors and international groups, and taking the lead in formulating key legislation designed to protect historic properties and to encourage private investment in preservation. Importantly, the project stimulated economic development in areas where it operated. Especially noteworthy is the project s impact on the revitalization of Old Town, Tbilisi. By restoring facades, resetting the cobblestone pavement, installing street lights, and landscaping public parks in Old Town, Tbilisi, the project has encouraged private investors to renovate on their own several of the city s most important old buildings. Many of the workers executing these private developments received their training working on project-financed activities. Rehabilitation of the area has also led to the opening of hotels, cafés, restaurants, shops, and galleries in the area and to an influx of residents and offices. This has led to a significant increase in property values in the historic district. The project generated widespread public awareness throughout the nation of the importance of cultural heritage and of actions that community and other groups can take to protect and rehabilitate it. By employing many workers with special skills, it helped to revitalize knowledge of crafts and workmanship that will be used in future preservation efforts. Finally, the project assisted in strengthening the capacity of the Ministry of Culture, institutes, NGOs, community groups, and others interested in protecting cultural heritage by providing technical assistance and training in preparing proposals and implementing projects. Finally, it helped to build the capacity of cultural heritage committees to prepare and implement participatory community action plans. 4.2 Outputs by components: Component 1: Investment (US$3.7 million) ERP (US$1.03 million revised to US$1.46) Outputs of the ERP are highly satisfactory. The program helped to protect from further deterioration or permanent loss over 100 cultural and historic treasures through 58 projects, including churches, monuments, frescoes, mural paintings, archeological sites, forts, manuscripts, folk music, photos, films, and dances. The ERP supported projects in all regions of the country through a competitive process that is regarded by the cultural heritage community of Georgia as transparent, fair, and effective. Both the eligibility criteria and the process through which proposals are selected have contributed to the success of the program. Among the eligibility criteria are that projects can cost a maximum of US$75,000 and that no single group can submit more than one proposal per competition. This ensured that resources were - 7 -

11 available to fund a large number of projects sponsored by diverse groups. The popularity of the program led to an expansion from three competitions to six competitions. Perhaps surprisingly, all 58 proposed projects were completed, most on schedule and within budget. This is due in large part to the technical assistance and supervision of implementation offered by the Fund to the project sponsors. Noteworthy is that several projects in the regions under dispute were implemented jointly by members of different ethnic groups. For example, subprojects in Javakheti and in South Ossetia (Ikorta, Azmana, Tighva) were implemented and are being maintained by people of various ethnic groups and religions. Observers believe that this has helped to strengthen social cohesion and a sense of national identity in such areas. Pilot Priority Cultural Heritage Sites (US$2.54 million, revised to US$2.08 million) Outputs of the pilot priority cultural heritage sites subcomponent are satisfactory. The component rehabilitated urban spaces, parks, historic homes, and museums in Tbilisi and Sighnaghi; prepared for visitors the ancient cave city of Uplistsikhe; and rehabilitated 29 unique medieval towers, the water supply system, a meeting hall, and a historic brewery in Shatili. Quality of construction, while largely satisfactory, has sometimes been disappointing due to early problems with the quality of technical drawings and specifications, and inadequate supervision of work. These problems were partly, but not fully resolved. While strong on archeological and historical conservation and research techniques, the Fund was unable to establish an effective supervision unit to cover conventional construction, resulting in poorly conceived and implemented finish work. The project helped to resolve underground water problems in Old Town, Tbilisi first by mobilizing trust funds to assess and find solutions to the problem, and second by leveraging municipal funds and coordinating closely with the Bank-supported Municipal Development Fund to ensure that repairs to the underground water system were given priority in its schedule of activities. The project responded rapidly to reinforce the caves of Uplistsikhe that were threatened with collapse following an earthquake in November The project was not however able to renovate the Erekle Street caravansary, the oldest caravansary in Tbilisi. Although the Fund and the municipal authorities spent several months attempting to negotiate an agreement with the residents of the building on a temporary resettlement plan, agreement was not reached by the time of an earthquake in April By then, the building had suffered structural damage from the earthquake and project funds to fully repair the structure were insufficient, even if agreement had been reached. Instead of undergoing a complete renovation, the caravansary has had its main section reinforced and the roof rehabilitated. The municipality provided temporary external supports for the rear part of the building and continues to seek funds to complete its renovation. The Neighborhood Fund repaired or replaced the gutters and drain pipes, and repaired balconies and facades of 36 historic homes in Tbilisi and 37 historic buildings in Signaghi. While the Neighborhood Fund was successful, it was the most troublesome element of the pilot sites subcomponent. The Neighborhood Fund financed up to US$1,500 of exterior improvements (US$4,500 to for a multiple-family dwelling) to private properties in Tbilisi and Signaghi that were included in a registry of historic homes. The purpose of the program was to save historic homes from further deterioration by making inexpensive but critical repairs to the exterior of buildings (most have not been maintained since they were transferred to private ownership soon after Georgia became independent from the Soviet Union, and had already been seriously neglected under the Soviet regime), and to encourage private investment in restoration by demonstrating its ability to increase home values. The Neighborhood Fund proved to be difficult to manage. Many homeowners, whose properties had until independence been nominally maintained by the state, felt that the project should finance renovations to interiors in addition to exteriors, and demanded the - 8 -

12 full US$1,500 even when this was not needed to fund work on the exterior. People whose houses were not on the official list of historic houses questioned the fairness of the program. Tensions between the Bank and the Fund arose over the issue of cost recovery, with the Fund proposing that better-off homeowners be offered loans rather than grants to ensure the sustainability of the program and the Bank team explaining that providing loans would significantly increase the complexity of the program. In sum, the Neighborhood Fund required substantial resources for administration and consultation that might have been better spent on renovating public streets, urban spaces, and historic buildings. Nonetheless, the program arrested the deterioration of historic buildings, thus contributing to the preservation of a part of the architectural legacy of Tbilisi and Signaghi. New legislation and regulations in support of the preservation of cultural heritage was drafted under the leadership of the Fund and subsequently enacted by parliament. These include the Law on Preservation of Cultural Heritage (June 1999), the Law on Export and Import of Cultural Properties (June 2001), the Law on Museums (June 2001), and amendments to the Law on Preservation of Cultural Heritage (May 2002). With the encouragement and technical assistance of the Fund, Georgia also acceded to several international conventions, including the Granada Convention on Architectural Heritage Protection and La Valetta Convention on Archaeological Heritage Protection (both in February 2000). Laws on archaeology, on territorial-spatial planning and urbanization, and on sponsorship and charity in the sphere of culture which are still awaiting enactment by parliament have also been drafted with the help of the Fund. Site management plans for the four pilot sites were developed under the project with the active participation of local cultural heritage committees and other community groups. The management plans include measures to mobilize funds for operations and maintenance and plans for the sustainable development of the sites. The plans have been approved by the State Monument Protection Department. However, funding for implementing the site management plans other than that provided under the project has for the most part not materialized. Some of the elements of the plan for Shatili are being implemented with funds raised by the community, including rehabilitating the local hydropower station and assisting local residents create attractive spaces in their homes for tourists. Component 2: Technical Assistance (US$1.4 million, revised to US$1.37) Fund Support and Institution Building Outputs of this subcomponent are satisfactory. After initial delays, the Fund contracted the services of three international experts to support project management (ten months), financial management (nine months), and monitoring and evaluation (six months). Detailed job description for each position in the Fund were prepared. Organization of the Fund was brought in line with its responsibilities. Training through seminars and hands-on experience was provided to staff in modern management practices, financial management, use of management information systems, accounting, procurement, disbursement, and monitoring and evaluation. A management information system and a monitoring and evaluation system were developed. Weekly staff meetings were introduced to ensure that all staff members knew what others were doing and to foster a sense of teamwork. These measures quickly led to improving execution of the project. The Fund benefited from additional support during the project. Under a separate grant-financed exercise, Fund staff participated in training in community action planning. They subsequently led a participatory community planning exercise in Sighnaghi. The action plan is of high quality and aspects of it are already being implemented. The action plan also has led to a Swiss investment in improving Sighnaghi s water supply system

13 Some problems took time to resolve. Despite considerable assistance from the Bank, financial reporting remained somewhat opaque until close to the end of the project, although in 2000 the Fund started using accounting software recommended by the Bank. Although the Fund did not follow up the Bank s recommendation to contract technical assistance in this area, it consistently clarified any questions regarding financial statements and explained any discrepancies as they arose. Moreover, the audits did not reveal problems in financial management. Another issue related to the monitoring and evaluation system. Although it was developed with the assistance of the international expert, the system was deemed inappropriate for use by the Fund. Time was required before a workable system was put into place. Once the system was established, the Fund significantly improved its monthly, quarterly, and annual reporting to the Bank. Some aspects of technical assistance were not well used. Social assessments conducted by the Fund were too weak to be useful and needed to be redone by outside consulting firms. Whether even these were used to guide project investments is not clear. Market studies were not carried out. Training on the methodologies of economic evaluation was not provided. Approaches for recovering costs were developed, but never implemented because the Fund lacked authority to introduce charges at public sites. Training and Study Tours Outputs of this subcomponent are satisfactory. Key staff of the Fund, the Ministry of Culture, and NGOs participated in a study tour to England taken in early The visit involved meetings with the National Trust, the Architectural Heritage Fund, the English Heritage Fund, the Bath Preservation Trust, the Victoria and Albert and other museums, several visitors centers, and other sites. Participants learned about the use of revolving funds, legal instruments, and financial incentives to encourage private owners to restore their historical properties. They also met with experts on site management planning and value-led conservation, operation of trusts, use of cost recovery mechanisms and concessions to finance operations and maintenance, and use of promotional and educational materials to raise public awareness of the importance of cultural heritage. Participants rate the tour as highly useful and staff of the Fund are actively exploring ways to replicate some of the approaches in Georgia. Cultural heritage committees were established at all four pilot sites. All remained actively involved in planning and implementing activities at their sites. All continue to pursue new sources of funding to implement the site management plans, although with varying degrees of success. Public Awareness Program Outputs of this subcomponent are satisfactory. The subcomponent produced numerous articles for magazines and newspapers, programs for radio and television, and brochures and information booklets for distribution to the public. It also financed photo exhibits, cultural fairs, and seminars. It produced and maintains a website that receives thousands of hits a month. It also frequently succeeded in obtaining coverage of its activities from both state and independent media outlets. For example, the independent television broadcasting company, Mze, covered the restoration of a church in Ikorta (on the World Monument Watch list) that was financed under the ERP. Although survey data do not exist, anecdotal evidence suggests that the activities of this subcomponent have substantially increased public awareness of and interest in preserving Georgia s substantial and varied cultural heritage

14 Integrated Conservation Master Plan, Old Town Outputs of this subcomponent are satisfactory. The conservation master plan was developed in close collaboration with experts of the Council of Europe. It is considered a guiding document by the Tbilisi Architectural Service, the Cultural Heritage Subcommittee of the Parliament of Georgia, and many cultural heritage experts. The Tbilisi Architectural Service is now preparing a paper drawing on its recommendations to guide the city in its future planning. Monitoring and Evaluation Outputs of this subcomponent are satisfactory. As noted above, the indicators initially chosen to monitor impact were either not quantifiable or not useful. The Fund eventually agreed with the Bank to monitor a revised set of twelve indicators performance indicators for which data were reasonably easy to obtain. After a slow start and with guidance from the Bank on the content and format of the reports, the Fund consistently produced timely and high-quality monthly, quarterly, and annual reports covering all aspects of project implementation. These allowed problems to be quickly identified and solved and helped considerably in implementing the project. Although participatory monitoring and evaluation at the pilot sites was not carried out, the Fund maintained close contacts with cultural heritage committees and solicited feedback which was communicated to the government and the Bank. 4.3 Net Present Value/Economic rate of return: The PAD did not include an estimate of the net present value or economic rate of return for the project. Sound methodologies for estimating net present values of cultural heritage projects had not been developed at the time the project was being prepared. While methodologies often used to evaluate environmental projects could have been adapted to produce such estimates for this project, considerable time and expense would have been required to produce credible results. Given the short preparation time of the project (three months), undertaking such an exercise would have been difficult. Estimating the net present values of the activities of the ERP was not possible, because these were not known in advance. Estimating net present values of technical assistance is also difficult or impossible. 4.4 Financial rate of return: The project appraisal document did not include an estimate of the financial rate of return. Few of the specific activities were expected to generate revenues directly, although it was hoped that would do so indirectly by stimulating tourism and economic growth in the areas benefiting from the project. 4.5 Institutional development impact: Institutional development impact is rated modest. The project succeeded in strengthening government agencies, NGOs, institutes, and community groups involved in protecting and promoting cultural heritage. These organizations benefited both from employing people who learned skills through employment at the Fund, and through their involvement in implementing project-funded activities. A large number of former Fund staff members are now employed at the Department of Monument Protection at the Ministry of Culture, and according to its director, are helping to completely restructure and revitalize the department. Others are now working at various institutes of history and art history in Georgia. Still others have gone on to develop private businesses that produce and sell maps of important monuments and buildings of Georgian architecture, tapes of traditional Georgian music, and the like. Others are providing consulting services. Groups that benefited from the ERP acquired skills in writing proposals and managing projects

15 that they are using to seek additional funding to rehabilitate or preserve cultural heritage. Some have already received funding from other donors on the basis of these skills. Government bodies, NGOs, and institutes that are members of the Georgian Cultural Revival Board have also been strengthened under the project. The Georgian Cultural Revival Board maintains a permanent representative in the Department of Culture, Education and Sports of the State Chancellery (president s office) who liaises regularly with the Cultural Heritage Subcommittee of the parliament. Community groups such as cultural heritage committees, have been significantly strengthened under the project through their involvement in planning and implementing project-supported activities. At the end of the project, these groups remain active in driving forward a vision of development based on the preservation of cultural heritage. For example, the cultural heritage committee of Tbilisi now plays a critical role in reporting illegal construction to the authorities. The project helped in creating the regulatory framework for the preservation of cultural heritage through its leadership in drafting and promoting the enactment of laws aimed at protecting Georgia s cultural and historical treasures. It has helped to create a partnership between the municipal government of Tbilisi, the central government, and other donor-funded projects to finance different elements of the renovation of Old Town, Tbilisi. This partnership is likely to last beyond the life of the project. Finally, it has played a major role in encouraging private firms and foundations to either donate funds or enter into public-private partnerships to protect cultural resources. This is helping to create a sustainable source of funding for cultural heritage and to broaden support for its protection. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: The influence of outside factors on project outcomes has been significant. Most important is the failure of expected increases in tourism to Georgia to materialize during the nearly six years of the project. Unresolved separatist movements in the country, tensions between Georgia and Russia over events in Chechnya, and the terrorist attacks in New York on September 11, 2001 have all blunted interest of foreigners in travel to Georgia. Continuing economic stagnation in Georgia leaves citizens with little discretionary income with which to travel. Low tourism has limited the impact of project investments on economic development of the areas where it operated. The failure to generate income through tourism is evident in Signaghi, which is depending on tourism to reverse its decline. While more people are visiting than before the project, and some are staying in the private homes adapted for visitors, many stay no longer than a few hours and spend little money. Further assistance is needed to help residents of Signaghi attract tourists and encourage them to spend more than a few hours exploring the sites. 5.2 Factors generally subject to government control: The influence of factors within government s control on project outcomes has been substantial. The unwillingness of government to provide its counterpart funds in a timely manner significantly delayed works in several cases, making project planning and management very difficult. While the unplanned contribution of the municipal government of Tbilisi to reinforce buildings on Erekle Street and to rehabilitate infrastructure of Cotton Row and Iron Row is highly welcome, slow delivery of these funds has delayed works and left contractors unpaid, disrupting implementation of the project. However, these delays did not affect the overall quality of the works

16 5.3 Factors generally subject to implementing agency control: The influence of factors subject to the control of the Fund on project outcomes has been highly significant in a positive way. The competence, dedication, energy, and networking skills of the director? a respected art historian and former professor at Tbilisi State University? and key Fund staff have been critical to the success of the project. In addition to successfully implementing the project, on their own initiative the staff of the Fund raised US$378,000 from donors other than the Bank. These included, among others, the New Georgian Fund (funded with contributions from the TBC-Bank, Aldagi, Martin Bauer, United Georgian Bank, Georgian Wine Services, and Georgian Trans Expedition), the Council of Europe, the Soros Foundation, and the International Oil Corporation. As an indication of their dedication, the Fund staff have been working without pay since the final project disbursement was made in September Establishing a small, effective Fund was not easy. With guidance from the Bank, the Fund initially comprised 20 full-time staff members, including a coordinator of the ERP, a public awareness officer, an officer of management information systems, an architect, an engineer, a procurement officer, a sociologist, and a social analysis assistant among others. Many of the functions the staff performed could have been more effectively and efficiently carried out by firms or individual consultants contracted to undertake specific tasks (for example, supervision of construction, financial management). In summer 2001, the Bank informed the Fund that an extension of the closing date would not be possible without a reduction of 50 percent in its staff. Staff of the Fund were later cut to six as the project entered its final year, and nearly all activities were complete. 5.4 Costs and financing: The PAD estimated total project costs (including contingencies) to be US$4.97 million over three years. The actual project costs over nearly six years totaled about US$4.91 million (US$3.54 million for the investment component, which included 2.08 million for the pilot sites and 1.46 million for the ERP, and US$1.37 million for the technical assistance component). Disbursements from the IDA credit total about US$4.48 million, 100 percent of the credit. Government counterpart funds to December 2003 are estimated to total US$431,150, or 9 percent of the project costs. This is slightly less than the 10 percent estimated in the PAD. 6. Sustainability 6.1 Rationale for sustainability rating: While sustainability of most project investments is likely, this is not true for all. With regard to the former, a large majority of the funds provided under the ERP was used to rehabilitate churches and church frescoes, murals, and other religious artifacts that had deteriorated during Georgia s years as part of the Soviet Union. Most of these churches are now managed by church staff that protect and maintain the buildings and church artifacts. The churches also have active congregations that provide funds and labor for operations and maintenance. Another portion of the funds was used to improve the capacity of state-operated museums to better store and maintain their treasures through procurement of specialized equipment, installation of ventilation systems, and the like. Museum stakeholders, who on their own initiative prepared and submitted the proposals to the Fund, are likely to make full use of the equipment and the renovations. Many of the improvements at the pilot sites are also likely to be maintained. The rehabilitations in Old Town, Tbilisi have stimulated significant private sector investment and the investors are likely to either organize maintenance themselves or to demand that the city meet its obligations to do so