Document of. The World Bank IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-74260) ON A LOAN IN THE AMOUNT OF USD 56 MILLION TO THE

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank Report No: ICR IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-74260) ON A LOAN IN THE AMOUNT OF USD 56 MILLION TO THE HASHEMITE KINGDOM OF JORDAN FOR A CULTURAL HERITAGE, TOURISM AND URBAN DEVELOPMENT PROJECT January 30, 2015 Social, Urban, Rural and Resilience Global Practice Middle East and North Africa Region

2 CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2014) Currency Unit = Jordanian Dinar Jordanian Dinar = US$1.00 FISCAL YEAR ABBREVIATIONS AND ACRONYMS CAS CPS CBO GDP GoJ ICR ISR M&E MENA MoMA MoTA MTR O&M PAD PAP PDO RAP RPF QAG QALP QEA TDD Country Assistance Strategy Country Partnership Strategy Community-based organization Gross Domestic Product Government of Jordan Implementation Completion and Results Report Implementation Status Report Monitoring and Evaluation Middle East and North Africa Ministry of Municipal Affairs Ministry of Tourism and Antiquities Mid-Term Review Operation and maintenance Project Appraisal Document Project-affected person Project Development Objective Resettlement Action Plan Resettlement Policy Framework Quality Assurance Group Quality Assurance in the Lending Process Quality at Entry Assessment Technical Development Department (of MoTA) Senior Global Practice Director Vice President: Country Director: Practice Manager: Project Team Leader: ICR Team Leader: ICR Primary Author: Ede Jorge Ijjasz-Vasquez Gerard A. Byam (Acting) Ferid Belhaj Nina Bhatt (Acting) Chantal Reliquet Guido Licciardi Willem Zijp and Christopher Ward

3 Hashemite Kingdom of Jordan Cultural Heritage, Tourism and Urban Development Project Data Sheet 4 A. Basic Information 4 B. Key Dates 4 C. Ratings Summary 4 D. Sector and Theme Codes 5 E. Bank Staff 5 F. Results Framework Analysis 6 G. Ratings of Project Performance in ISRs 6 H. Restructuring 7 I. Disbursement Graph 1. Project Context, Development Objectives and Design 9 2. Key Factors Affecting Implementation and Outcomes Assessment of Outcomes Assessment of Risk to Development Outcome Assessment of Bank and Borrower Performance Lessons Learned Comments on Issues Raised by Borrower/Implementing Agencies/Partners 35 Annex 1. Project Costs and Financing 39 Annex 2. Outputs by Component 40 Annex 3. Additional Details on Intermediate Indicators 53 Annex 4. Economic and Financial Analysis 56 Annex 5. Bank Lending and Implementation Support/Supervision Processes 60 Annex 6. Summary of Borrower's ICR and/or Comments on Draft ICR 62 Annex 7. Comments of Cofinanciers and Other Partners/Stakeholders 68 Annex 8. List of Supporting Documents 69 Annex 9. Map 71

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5 A. Basic Information Country: Jordan Project Name: Jordan - Cultural Heritage, Tourism & Urban Development Project ID: P L/C/TF Number(s): IBRD ICR Date: 08/05/2014 ICR Type: Core ICR Lending Instrument: SIL Borrower: Original Total Commitment: Revised Amount: USD 55.00M Environmental Category: B GOVERNMENT OF JORDAN USD 56.00M Disbursed Amount: USD 50,781, Implementing Agency: Ministry of Tourism and Antiquities (MoTA) Cofinanciers and Other External Partners: None B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 09/01/2005 Effectiveness: 08/16/ /16/2007 Appraisal: 08/07/2006 Restructurings: 07/14/2011 Level 1 03/21/2013 Level 2 Approval: 01/30/2007 Mid-term Review: 11/12/2009 Closing: 09/30/ /31/2014 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Risk to Development Outcome: Bank Performance: Borrower Performance: Moderately Satisfactory Substantial Moderately Satisfactory Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Moderately Satisfactory Quality of Supervision: Moderately Satisfactory Implementing Agency/Agencies: Moderately Satisfactory Overall Bank Overall Borrower Moderately Satisfactory Performance: Performance: Moderately Satisfactory i

6 C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project at any time (Yes/No): Problem Project at any time (Yes/No): DO rating before Closing/Inactive status: Yes Yes D. Sector and Theme Codes Moderately Unsatisfactory Sector Code (as % of total Bank financing) Quality at Entry (QEA 8): Quality of Supervision (QSA): Quality of Lending Portfolio (QALP 8) Original UM- Urban Management 50 UE - Urban Environment 50 Satisfactory None DO: Moderately Unlikely Actual Central government administration 6 Other industry 13 Other social services 32 Sub-national government administration 12 Urban Transport 37 Theme Code (as % of total Bank financing) Municipal Governance 50 Other Urban Development 50 City-wide Infrastructure and Service Delivery 17 Cultural Heritage 16 Micro, Small and Medium Enterprise support 25 Municipal governance and institution building 25 Urban Economic Development 17 E. Bank Staff Positions At ICR At Approval Vice President: Gerard A. Byam (Acting) Daniela Gressani Country Director: Ferid Belhaj Joseph P. Saba Acting Practice Manager: Nina Bhatt (Acting) Inger Andersen Project Team Leader: Chantal Reliquet Mohammed D. E. Feghoul ICR Team Leader: Guido Licciardi NA ICR Primary Author: Willem Zijp and Christopher Ward NA ii

7 F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The original PDO from the Loan Agreement (2007) was to contribute to: (a) tourism development in the five key historically and culturally important cities (Jerash, Karak, Madaba, Salt and Ajloun), and thereby create the conditions for local economic development; and (b) consolidation of the tourism industry in Petra, Jordan's premier tourism asset and destination. Revised Project Development Objectives (as approved by original approving authority) The revised PDO (2011) was to: support tourism development in five historically and culturally important cities (Jerash, Karak, Madaba, Salt, and Ajloun) and thereby contribute to local economic development. PDO Indicators Original PDO as approved 2007 (a) Tourism development in the five key historically and culturally important cities (Jerash, Karak, Madaba, Salt and Ajloun), and thereby create the conditions for local economic development (b) Consolidation of the tourism industry in Petra, Jordan's premier tourism asset and destination Indicators Baseline Target Increased visitation and stay in target cities Increase in value of properties in targeted cities Established, efficient, informative and culturally sensitive new Visitors Center operating in the Petra Sanctuary 1.5 days average length of stay Actual March 31, days 2.8 days 0% 20% 50% No visitors center Timely completion of the Visitors Center at the Petra Sanctuary. (result indicator d, para 22, page 6 of the PAD) Visitor Center built and operational, but dropped from the project in 2011 G. Ratings of Project Performance in ISRs No. Date ISR Actual Disbursements DO IP Archived (USD millions) 1 03/13/2007 Satisfactory Satisfactory /21/2007 Satisfactory Satisfactory /01/2008 Satisfactory Satisfactory /02/2009 Satisfactory Satisfactory /05/2009 Satisfactory Moderately Satisfactory /25/2009 Moderately Satisfactory Moderately Satisfactory /26/2010 Moderately Unsatisfactory Moderately Unsatisfactory /07/2010 Moderately Unsatisfactory Moderately Satisfactory /11/2011 Moderately Unsatisfactory Moderately Satisfactory /20/2011 Moderately Satisfactory Moderately Satisfactory /12/2012 Moderately Satisfactory Moderately Satisfactory /24/2012 Moderately Satisfactory Moderately Satisfactory /26/2012 Moderately Satisfactory Moderately Satisfactory iii

8 14 05/17/2013 Moderately Satisfactory Moderately Satisfactory /21/2013 Moderately Satisfactory Moderately Unsatisfactory /29/2014 Moderately Unsatisfactory Moderately Unsatisfactory H. Restructuring (if any) Restructuring Date(s) Board Approved PDO Change ISR Ratings at Restructuring DO IP 07/14/2011 Y MU MS 03/31/2013 N MS MS Amount Disbursed at Restructuring in USD millions (ISR archived on 08/20/2011) (ISR archived on 05/17/2013) Reason for Restructuring & Key Changes Made Cancellation of Component 2 (Petra gateway): Under the Second Tourism project, a land use plan had been developed with World Bank support, and an appropriate site for the gateway or visitor center agreed, after extensive consultation. The design of the facility in Petra was agreed under this project, with early feasibility work done. However, the Government then decided to finance the facility from its own resources. The facility was built with UNESCO s oversight on technical, social and environmental safeguard compliance. The facility is now operational and conforms to the World Bank s original appraisal. UNESCO continues to advice on sustainable management of the facility. The project was extended by 6 months, and there were a few other, minor changes. Cancellation of Component 3 (Local Economic Development) for two reasons: MoTA was uncomfortable with this component, as they recognized their limited capacity to implement it. The World Bank-supported Local Economic Development component was undersized, and dwarfed by other partner contributions. Extension of the closing date from March 31, 2013, to March 31, 2014 to complete the works in Ajloun. The restructuring also included other minor changes. iv

9 I. Disbursement Profile v

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11 1. Project Context, Development Objectives and Design Table 1 A quick overview a) Tourism accounted for 11% of Jordan s GDP at appraisal (2007). Past tourism development had focused on Petra and a few other top attractions, but the 2004 National Tourism Strategy argued for diversification, increasing employment, and integration of tourism into local economic development. b) These elements fitted the Jordan CAS very well and brought to bear the Bank s considerable experience and knowledge in this field. c) This project was highly relevant, well prepared, with strong borrower and beneficiary ownership, and a convincing rationale for Bank support. Early implementation (2008) reflected the solid preparation, with staff in place, work plans available, immediate disbursements done, safeguards for resettlement agreed and operational, and contracts being delivered. d) However, by 2010 three factors beyond the scope of the project had slowed implementation: (i) the Arab spring (and from 2011 the Syrian crisis); (ii) the global economic downturn; and (iii) the countrywide process of (a) devolvement of implementation from the Ministry of Planning to the Line Ministries; and (b) a start-and-stop process of decentralizing selected tasks to the municipalities. e) Implementation also slowed down as a result from changes in staffing, both within the Government and at the Bank, but the MTR was fielded timely and proposed a restructuring. Ratings dropped to MU for DO and IP for a while. f) The first restructuring (Level 1, 2011) dropped the construction of the Visitor Center at Petra as the Government decided to use its own funding. UNESCO ensured safeguard compliance and technical quality. However, the restructuring failed to fundamentally improve the PDO, indicators and M&E. g) The project was extended twice for a total of 18 months to allow for the unforeseen delays mentioned above. During the second extension, it was decided to do an impact assessment, to be carried out by one of the world s leading Universities in this field. h) By project closing in March 2014, the results of the impact evaluation were still being analyzed, and the project was rated MU overall in the final ISR. i) The data from the impact assessment have become available for this ICR and indicate solid achievements for all indicators, and beyond. The project achieved, or exceeded its restructured targets. j) The Government is committed to follow-up operations, while businesses continue to grow in the five communities, and Municipalities are attracting domestic and international investment and tourists. 1

12 1.1 Context at Appraisal 1. Tourism is one of the pillars of the Jordanian economy, accounting for 11% of GDP at the time of appraisal (2007). Tourism was also Jordan s largest export sector, its second highest earner of foreign exchange, and its fifth largest employer. Past tourism development had focused on Petra, Jordan s premier attraction, and on a handful of other top sites. However, over the decade preceding the project, Jordan had been falling behind other destinations in the region in terms of growth rate, market share, length of stay, and earnings per tourist arrival. 2. Jordan s 2004 National Tourist Strategy targeted deepening and diversifying Jordan s tourism products, improving quality, and increasing employment, business turnover and fiscal yield. The medium term objective was to develop a denser structure of multi-attraction circuits to appeal to a wider range of visitors especially outside Amman, encourage longer stays, spread tourism-driven benefits, and create opportunities for private investment and employment. This tourist strategy was later confirmed in Jordan s National Agenda At the same time, the strategy recognized the need for greater integration of the elements of the model now used widely: (i) domestic and international tourism; (ii) local economic development; (iii) improving and safeguarding cultural and natural heritage sites; (iv) opening up while preserving historic city cores; (v) increasing the capacity of municipalities to manage urban development; and (vi) reducing poverty and raising the standard of living of the people living and working in the historic centers. 4. Support to this program matched the Bank s Jordan Country Assistance Strategy (CAS) ( ). The CAS aimed to assist the Government to harness its considerable cultural heritage for tourism development, economic revitalization, and job creation. In particular, it would support local development through increased access to services and economic opportunities (CAS Cluster 2). 5. The Bank brought considerable in-country experience, including two past tourism development projects and three urban and municipal development projects. In addition, the Bank had accumulated global experience in supporting cultural heritage and sustainable tourism development, and had prepared a cultural heritage strategy for the MENA region (2001), whose recommendations were embedded in the project design. 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) 6. The original PDO 2 was to contribute to: (a) tourism development in five key historically and culturally important cities (Jerash, Karak, Madaba, Salt, and Ajloun), and thereby create the 1 The Jordan National Tourism Strategy (2004) informed and initiated this project. The MNA sector knowledge and tourism strategy paper (2001) formulated recommendations that are embedded in this project. In 2002, a grant of USD 350,000 was awarded from the Multi Donor Trust Fund for Cultural Heritage and Sustainable Tourism (donor: Italy) to develop the project concept. Lessons from similar projects, both global and five in-country projects have also been incorporated. 2 This ICR found a few discrepancies in the PDO between the Loan Agreement (which is used above, as the only legally binding formulation), the PAD, and the log frame of the PAD. The Borrower s report uses the Loan Agreement formulation. On the first objective, the PAD Annex states: To contribute to tourism 2

13 conditions for local economic development; and (b) consolidation of the tourism industry in Petra. Table 2 Original PDO and Indicators PDO Key Indicators (a) Tourism development in the five key historically and culturally important cities increased tourist visitation, stay and spends in the cores of the project cities; (3) (Jerash, Karak, Madaba, Salt and Ajloun), and increased economic activity as indicated by thereby create the conditions for local economic increased value added in the city centers development. (1) (particularly in tourism-related activities and businesses) (4) (b) Consolidation of the tourism industry in Petra, Jordan's premier tourism asset and destination. (2) established, efficient, informative and culturally sensitive new Visitors Center operating in the Petra sanctuary.. (5) (1) This section of the PDO was kept with the restructuring. (2) This section of the PDO was dropped with the restructuring. (3) This PDO Outcome Indicator was kept with the restructuring, but edited for clarity (4) This PDO Outcome Indicator was clarified as number of tourism-related jobs created in target cities, as Intermediate Outcome Indicator under Component 3. (5) This PDO Outcome Indicator was dropped with the restructuring 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification 7. The revised PDO was to: support tourism development in five historically and culturally important cities (Jerash, Karak, Madaba, Salt, and Ajloun) and thereby contribute to local economic development. In other words, the construction of the Petra Gateway (as well as some smaller elements) was dropped from the project. Table 3 Revised PDO and Indicators Project Development Objectives Key Indicators To support tourism development in five historically Increased visitation and stay in target cities. (6) and culturally important cities (Jerash, Karak, Madaba, Salt, Ajloun) and thereby contribute to local economic Increase in value of properties in targeted cities. development (7) (6) This PDO Outcome Indicator was kept with the restructuring. (7) This PDO Outcome Indicator was added as a proxy of private sector interest. 1.4 Main Beneficiaries 8. Beneficiaries included men and women living and working in the five cities. Another group of beneficiaries included domestic and international tourists. Cities were improved, and as a result, local businesses opened up to cater to both locals and tourists. There were no changes in beneficiary targeting during the implementation of the project. development in the Project Municipalities (PMs), and thereby create the conditions for local economic development On the second objective the PAD adds: Jordan s premier tourism asset and destination after the word Petra. The PAD annex says: To complete the Petra Archeological Park (PAP) Management Plan, initiated under the Second Tourism Development Project. 3

14 Table 4 Key Beneficiaries Who benefited How did they benefit How many did benefit Directly Indirectly Communities From the upgraded infrastructure, and from the second round effects of increased tourism spending 512,000 residents in the five city cores 964,000 total residents in the five cities Tourists (domestic and international) Municipalities Businesses in general Workers in the tourism sector MoTA staff From improved access and facilities, and from a more integrated tourism experience beyond the main destinations in Jordan From an expanded tax base, and upgraded infrastructure, and from being a partner in planning, implementation and monitoring public works and improved services, as well as from ensuring social cohesion From increased business, both centrally and in the five participating municipalities From increased employment opportunities From implementation of an important part of the National Tourism Strategy and from capacity building, both through training and through on-thejob experience 1.5 Original Components (as approved) 692,324 tourists visiting the five cities in municipal staff who worked on the project in the five cities 163 businesses (in tourism, e.g. restaurants, shops, hotels) that opened or expanded in the five city cores 1003 new jobs (assuming 6 workers per business) in businesses that opened or expanded in the five city cores 35 MoTA staff who worked on the project 4.1 million foreign tourists and 2.15 million domestic tourists visiting Jordan in municipal staff in the five cities The total commercial activities (in tourism and non-tourism) in the five cities is not available The total number of workers (in tourism and non-tourism) in the five cities is not available 360 (Total MoTA staff) 9. Component 1: Revitalization of Historic City Centers, Urban Infrastructure Improvements and Cultural Landscape Regeneration. This accounted for 84.2% of Bank financing, or USD million. The component comprised the following activities in and around the historic cores of Jerash, Karak, Madaba, Salt and Ajloun: (1.1) upgrading of and improvements to street networks and allied public spaces; (1.2) rehabilitation and upgrading of pivotal urban spaces; (1.3) rehabilitation of facades and landscaping and furnishing of primary streets; (1.4) renovation and preservation of selected heritage buildings through adaptive reuse including a Salt Pilot Historic Preservation Fund for privately owned buildings; (1.5) traffic and parking management; (1.6) construction or rehabilitation of essential municipal buildings and facilities; (1.7) regeneration of cultural (natural) landscapes (Ajloun only); and (1.8) design and supervision services. 10. Component 2: Petra Gateway. This accounted for 9.2% of Bank financing, or USD 5.17 million. The component was to support: (2.1) construction of a new Visitors Center at Petra Sanctuary; and (2.2) related consultant services. 4

15 11. Component 3: Local Economic Development. This accounted for only 2.1% of Bank financing, or USD 1.15 million. The component was to provide financial and technical assistance to local entrepreneurs and community groups for the creation or expansion of environmentally appropriate and financially viable small and medium enterprises in the project areas. 12. Component 4: Capacity Building and Project Management. This accounted for 4.5% of Bank financing, or $2.55 million. The component included: (4.1) municipal capacity building, including improved development and management of historic centers by municipalities, local strategic partnerships amongst municipalities and local community and business groups, and Municipal Revitalization Pacts which would underpin project investment in additional core infrastructure; and (4.2) project management and institutional support. 1.6 Revised Components 13. A request for Level 1 project restructuring was received from the borrower on April 19, 2011 after it had been suggested by the MTR in November The restructuring involved changes to the PDO and other features, as requested by the Borrower, and described below: a) Cancellation of Component 2 (Petra gateway). The Visitor Center in Petra was conceived in a land-use plan under the Second Tourism project and a site agreed upon. The facility was appraised by the Bank and included in this project with early feasibility work done. However, during implementation the Government decided to use its own funding for the construction, USD 2.5 million, while benefitting from a USAID grant of about USD 125,000 for detailed design and bidding documents. For technical, social and environmental safeguard compliance, UNESCO oversight and adequate Jordanian legislation were in place. The construction of the facility in Petra was tendered out following the Jordanian national procurement of public works. The percentage of Bank financing for the Petra component at appraisal was 9.2% of the Bank financed project, and those funds were re-allocated to allow for cost increases, largely in component 1. UNESCO continues to advice on sustainable management of the facility. b) Update the scope of the following three components: Component 1 (Revitalization of historic city areas and urban infrastructure improvements). A number of lower priority activities were dropped, due to the evolving situation on the ground. For example, the Salt Heritage Fund was cancelled, as private homeowners took the urban regeneration much further themselves, as a result of a more favorable economic environment, created by the project; Component 3 (Local Economic Development) was adjusted, reduced (and eventually dropped at the second restructuring); and Component 4 (Capacity Building and Project Management) which was adjusted and reduced to focus on training, as studies and technical activities were being financed with grant funds from other partners. However, it must be noted that key elements of this component (the Municipal Revitalization Pacts for instance) had already proven their worth and were supported with local resources. 5

16 Update the Project Results Framework and make it consistent with the reformulation of the PDO and proposed changes to project design. Reallocation of loan proceeds to reflect project design changes. Extension of the Loan's closing date for six (6) months, from September 30, 2012 until March 31, 2013 to enable the completion of ongoing contracts and other commitments in the project. Changes to the disbursement conditions due to the cancellation of Component 2 and the Salt Heritage Fund. 14. With the Level 1 restructuring, Bank financing remained USD 56 million. The total project cost, including Bank and borrower financing, before and after restructuring, is shown in the table below. Table 5 Project Financing, Restructuring 1 Original (including contingencies) Component 1: Revitalization of historic city centers, urban infrastructure improvements and cultural landscape Revised (including contingencies) regeneration Component 2: Petra gateway Component 3: Local Economic Development Component 4: Capacity building and project management Land acquisition, expropriation and resettlement costs Total Cost (Bank and borrower) Other significant changes 15. In January 2013, due to the need of completing complex works in a very delicate project location (the mosque in Ajloun) and a few other sites, the Government requested a second extension of the project closing date. The Bank approved this request in March 2013 through a Level 2 restructuring. The closing date was extended from March 31, 2013, to March 31, At the same time, Component 3 (Local Economic Development, USD 1 million, 2.1% of the Bank financed project) was dropped two main reasons: a) First, MoTA was not entirely comfortable with this component in view of its limited capacity to implement. In retrospect, it is likely that MoTA would have subcontracted this component s implementation, raising questions about capacity retention and efficiency. b) Second, there was a good supply of grant funding for LED and solid capacity to implement outside MoTA. The World Bank-supported component was dwarfed by other partner contributions, including USAID, Japan, the EU and others. For instance: USAID has a five year, USD 70 million Local Enterprise program called LENS being implemented by FHI 360; USAID also has another five year, USD 40 million Workforce Development Program being implemented by DAI; 6

17 In Madaba, USAID under the Tourism project had already provided USD 2 million in grants to support small tourism related businesses; shop owners contributed another USD 0.5 million; In Salt, USAID budgeted USD 250,000 for small grants but only gave out USD 85,000 because only 14 applications met requirements; A number of Jordanian organizations are managing similar programs such as the Development and Employment Fund (DEV) and the Women s Fund. 17. When interpreting the findings from the economic impact assessment, the project can thus not claim benefits from direct investments in the specific Local Economic Development grants, but can justifiably be proud of the strong evidence of indirect benefits from the much larger investments in urban upgrading, resulting in improved businesses, employment and reduced poverty. Even in the absence of Component 3, the number of jobs created by the project substantially surpassed the target, as documented by the economic impact assessment, which also analyzed and confirmed their attribution to the project. 18. With the second restructuring, other minor changes were made, without impacting the PDO and the indicators (Level 2). Bank financing was reduced from USD 56 million to USD 55 million with the remainder of component 3 (Local Economic Development) dropped. The total project cost, including Bank and borrower financing, before and after restructuring, is shown at the table below. The project closed on March 31, 2014 with USD 50,781, disbursed and 4,218, undisbursed. Table 6 Project Financing, Restructuring 2 Original (including contingencies) Component 1: Revitalization of historic city centers, urban infrastructure improvements and cultural landscape Revised (including contingencies) regeneration Component 2: Petra gateway 0 0 Component 3: Local Economic Development Component 4: Capacity building and project management Land acquisition, expropriation and resettlement costs Total Cost (Bank and borrower) Table 7 Disbursement by close of project Original Revised Cancelled Disbursed Undisbursed IBRD ,000,000 55,000,000 1,000,000 50,781, ,218, Disbursement rate against appraised Bank financing: 91% Disbursement rate against revised Bank financing (following second restructuring): 92% 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 19. The project was prepared around cultural heritage and sustainable tourism linked to urban upgrading in historic city cores. The project design reflected lessons from earlier experience in the country, notably from the Bank-supported tourism development projects and urban development projects. One lesson was that design had to take account of the complexity of local 7

18 interests and environment and to ensure a broad support base for the project. This was to be done through a participatory preparation process, through Strategic Partnerships with the community, and through Municipal Revitalization Pacts, which allowed community voice and permitted continuous adjustments as needed over the life of the project. 20. The project design required sound institutional capacity from the implementing agency, MoTA, across a broad range of sectors, including water supply, sanitation and municipal public works, in addition to the Ministry s core attributes of tourism and cultural heritage. This need had been recognized by the earlier Second Tourism Development Project, and staffing and capacity strengthening of the project unit, MoTA s Technical Development Department (TDD), were built into the project. The PAD foresaw the recruitment of an additional 17 staff to TDD s existing 15 personnel, together with equipment and training. 21. The M&E system was a key weakness of the Second Tourism Development Project, and the need for design and implementation of an integrated M&E system and related capacity building was appropriately highlighted in the design of this project. 2.2 Implementation a) Factors beyond Government control 22. The global economic downturn and the Arab Spring (and from 2010 the Syrian crisis) negatively impacted all aspects of life in Jordan. The country suffered a fiscal crisis and restricted the budget ceiling for project expenditures. In 2010, for example, the budget was capped at the equivalent of USD 4 million against contract commitments of USD 24 million, necessitating the phasing and lengthening of implementation. This allowed the project to deliver, but it slowed implementation and explains the need for the total of 18 months of extensions. 23. Herein lies an apparent contradiction: claiming a more favorable economic environment in the five cities, while at the same time blaming the global economic downturn and the Syrian crisis for slowing implementation. It is perhaps one of the key strengths of this project that both statements are true. Even during this time of crisis, the rehabilitation of city centers, making them more attractive for local inhabitants, businesses, and tourists, resulted in a major increase in businesses (see 3.2) in those upgraded city centers. 24. Although domestic tourism numbers in Jordan as a whole fell by about 11% from 2008 to 2012, domestic tourist numbers in the target cities grew by about 18% over the same period. Foreign tourists in the five project cities rose as a share of total foreign tourists in Jordan in about 8% of foreign tourists visited the five sites, in 2013 it was 11%. 25. The project also experienced price increases for commodities, which translated into higher than estimated contract prices and cost overruns. These overruns were addressed in the 2011 project restructuring. In the end, the actual project costs exceeded the estimates by more than 160%. b) Factors under Government control 26. Even with changes in Ministers, the objectives and the relevance of the project remained high. But due to changes in interlocutors at both central and local levels, and to an increasing 8

19 workload in MoTA, implementation slowed down and by 2010 the project entered at risk status. To speed up implementation, MoTA decided to strengthen the implementation team and temporarily postpone works on further sites. In particular, technical and managerial capacity was strengthened and the consulting engineers reinforced. Monitoring, measuring and managing for Outcomes remained a challenge, but was addressed through the commissioning of an economic impact assessment conducted by project closure. c) Factors under implementing agency control 27. Project preparation had been characterized by partnerships with municipalities and engagement of communities, as set out in the Municipal Revitalization Pacts. At project start-up, contracts were quickly let for works in the most important project sites, Madaba and Salt, and land acquisition and resettlement issues were satisfactorily handled. Procurement plans were ready, and staff in place. 28. Despite early stresses in collaboration 3 between the line Ministries and the decentralizing municipalities, over time all parties worked collaboratively during implementation. The consultative model established during preparation was appreciated by the participating municipalities, and during implementation these municipalities asked for increased consultation, as the benefits of such an approach had become apparent. The implementation team worked flexibly to enhance this mechanism, also employing a communication specialist, a municipal specialist, and full time community liaison officers for each city. The municipalities in turn assigned the dedicated Municipal Program Coordinators as counterparts to the project. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization a) M&E design 29. M&E was highlighted as a weakness in earlier Bank-supported operations, and MoTA was new to Bank operations, although quite familiar with contracting goods and services out. Specialized consultancy services were thus included in this project s design, to be provided at national and local levels to prepare the system. However, the PDO, indicators and results framework were poorly formulated. The PDO largely describes a set of activities, rather than define what would constitute success by the end of the project. In particular, the PDO did not identify the beneficiaries, nor did it formulate what changes were meant to happen in their livelihoods. 3 An example how initial stresses can be overcome comes from planning for traffic and parking management, for which a subcomponent (1.5) was designed. Traffic flow was part of the TORs for the street rehabilitation in Karak, Madaba, and Jerash. As it turned out, traffic restrictions in tourism areas need time to get the buy in of the local residents. Early results on traffic management in the project were mixed. The agreed solution was to conduct consultative studies on small, yet effective changes to traffic management and parking, to balance the various needs of locals, urban planners and tourists. 9

20 b) M&E implementation 30. During implementation, the Results Framework was used to tabulate data from survey forms. Municipal units collected data and conducted sampling exercises thus building capacity and fostering ownership. The M&E system did provide information to track the key indicators (see 3.2 below) but did not properly reflect the project outcomes, thus explaining the decision to undertake the independent economic impact assessment towards the end of the project. Early Implementation Status Reports (ISR) highlighted the lacking outcome data, and the MTR proposed a level 1 restructuring. The Results Framework was subsequently revised, without altering its scope or fundamentally improving its design. That is surprising, as the QALP 8 (September 2010) observed that The project is now in need of a fundamental restructuring. c) M&E utilization 31. Staff at national and local levels were already familiar with implementation and output monitoring. Under the project they have been trained to better monitor, manage and measure development outcomes. In particular, the intensive collaboration with the University that undertook an economic impact assessment (see box below) proved a key motivating and learning experience. The capacity built, and ownership fostered at local level has been very positive, as measured in the impact analysis. In addition, and although of limited methodological soundness, daily local monitoring of works by the local communities (as routinely happened) has been a powerful incentive for contractors to deliver quality, on time, and within budget. The hands-on interest from the mayors and the highest levels of the Jordanian Government is also likely to ensure sustainability of the M&E capacity developed under the project. Table 8 An economic impact assessment a) The Government and the Bank commissioned a research study to Maquarie University, Australia to assess the economic impacts of the project investments. Maquarie University is one of the leading institutions in the world on evaluating the impact of cultural heritage projects. b) The study collected and analyzed existing data and undertook original data collection through surveys in Madaba and Salt, as well as in a control city, Irbid. c) The study demonstrated the added value of investments in cultural heritage in the target cities and compiled new and original data pertaining to the socio-economic impacts of such investments, particularly in regard to employment and income generation. d) The study used tested economic methodologies for ex-post impact evaluation that have been applied in similar studies elsewhere, identifying direct, indirect and induced impacts of the investments. The study also looked at effects of the project on major stakeholder groups. 4 4 There are a few counter-intuitive data in the assessment, coming from the control city. Business expansion on some indicators appears better in Irbid (the control city) than in either project city. Household income also looks better in the control city. The ICR understands that Irbid might not have been the most appropriate city to provide counterfactuals, as it is considerably bigger than any of the five project cities and recognizes the major variations between the project cities. Also, apart from representativity, these findings may indicate one of the successes of the project: attracting tourists and businesses to wider circuits with more cities, --possibly including non-project cities-- with longer stays and increased spending. In conclusion, the ICR is impressed with the important results achieved as evidenced in the impact assessment, and largely agrees with the evidence of attribution. 10

21 2.4 Safeguard and Fiduciary Compliance 32. The project activities in densely populated city centers had various land acquisition and resettlement requirements. These were handled by Government in line with Bank requirements and the Resettlement Policy Framework. Two Resettlement Action Plans were prepared for Jerash and Karak and two abbreviated Resettlement Action Plans were prepared for Salt and Ajloun. Site specific Resettlement Action Plans were prepared for Jerash, Karak and Salt, and these were substantially respected during implementation. The process required time, as common in Bank projects focusing on urban areas, particularly in Salt, where land acquisition was important and Ajloun, where the relocation of vendors was required before works could start. The actual resettlement impacts were slightly smaller than the impacts documented in Resettlement Action Plans at appraisal stage: Permanent land acquisition (m2) Table 9 Resettlement Totals Demolishing of residential house (m2) Demolishing commercial store (m2) Number of households affected Planned Actual Planned Actual Planned Actual Planned Actual Jerash 12, ,815 1, Karak 4,695 2,681 3,523 2, Salt 2, , Ajloun - 9, Madaba Total 20,332 12,408 4,107 2,905 7,136 1, The actual resettlement cost was slightly higher than the estimated resettlement cost at the Resettlement Action Plans, because the actual compensation value was higher than what was planned (see table below). Table 10 Resettlement Costs Planned (million JOD) Actual (million JOD) Jerash Karak Salt Ajloun Madaba Total 4.18 million JOD USD 5.9 million 4.96 million JOD USD 7 million 34. The Environmental Management Plan (EMP) was based on Jordanian legislation and Bank guidelines. Consultants delivered several awareness and training workshops for stakeholders and supervised respect of the EMP in works contracting and implementation. Compliance was substantial, with minor exceptions on dust control and noise, which had negligible negative impacts. 35. Procurement of works, goods and selection of consultants made use of possible flexibility of the Bank s Guidelines to make use of Government's regulations when appropriate, in alignment with the Loan agreement (especially with respect to the NCB provisions). Procurement incorporated budget requirements and procurement planning. Rectifications and adjustments were timely and integrated in the procurement plan and disbursement forecasting. Financial 11

22 management was satisfactory throughout: during preparation, appraisal, and during implementation. 2.5 Post-completion Operation/Next Phase 36. It is likely that the project s impact will be measurable after closure, as forecast in the economic impact analysis. The Government is already working on similar projects with several partners and it may discuss a possible follow-up World Bank operation. 37. Perhaps, the most important aspect of future sustainability is the proof of concept, bringing together cultural heritage, local economic development and urban management. Although somewhat similar projects had been initiated before (Fez, before 2000 and Lebanon in 2003), this project was among the first to bring all elements together in an effective and sustainable fashion. This concept is now being applied widely in Bank-financed projects in other countries, including Lebanon, Georgia, Armenia, Haiti, China, and Russia. 38. To facilitate replicability, the project benefitted from a grant from the Multi Donor Trust Fund for Cultural Heritage and Sustainable Tourism (in 2013, donor: Italy) of US$300,000. This grant supported a variety of studies on two additional locations, on which now the Government is intervening with its own resources and also supported a study to identify potential investment opportunities for future operations. 39. In the five participating cities in Jordan, as works were being completed and handed over, the municipalities still lacked adequate financial means to undertake the necessary operation and maintenance (O&M). This was largely due to uncertainties in the decentralization process in Jordan, as referred to in the Borrower s report. Agreement on a comprehensive O&M manual had been reached at the end of 2011 (ISR #11). The ICR mission found that all participating municipalities are determined to protect the new assets as a priority, as they see the economic value of the assets. 40. Many facilities built under the project were designed with cost recovery in mind and included commercial areas that municipalities could rent out. The inclusion of these commercial areas, notably in Salt, was a successful result of the ongoing consultation between MoTA and the participating municipalities. Table 11 Examples of Commitment to Operation and Maintenance Madaba allocated JD 500,000 for street maintenance and JD 1 million for upgrading tourism infrastructure. Jerash has adequate capacity and resources, and the new mayor and the city manager confirmed to the ICR team that O&M of project assets would be given priority. In Salt, facilities built under the project included spaces that could be rented out, ensuring revenues that can be reinvested in the O&M of the asset. Support to the establishment of City Core Management Units was provided during the project. Larger, more prosperous municipalities of Salt and Madaba showed capacity to maintain assets. In Karak and Ajloun, the situation was initially more challenging, but as tourism has continued to develop, the municipalities made available the required capacity and resources. 12

23 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation a) Relevance of Objective 41. Rating: High 42. This project had the overall development goal of making secondary cities better places to live in (for the local population) and more attractive places to visit (for domestic and international tourists). The project-generated benefits demonstrated the relevance of this operation to Jordan s economic growth and poverty reduction strategy, and to the Bank s twin corporate goals, addressing extreme poverty (as it invested in city cores, where the poor live), and supporting shared prosperity (creating conditions for businesses to thrive in city centers, where tourists can be attracted). 43. Relevance became even greater at project closure. Jordan has suffered multiple exogenous shocks, including the global economic downturn, regional instability, the Syrian crisis, and the influx of refugees. The sensitivity of tourism to these external shocks and, more generally, to the perception of the Middle East as a risky tourist destination, has been amply demonstrated by the fluctuations in overall tourist numbers in Jordan. During the project period, tourism showed a steadily rising trend to 2010 (6.9 million foreign visitors) and a sharp drop-off thereafter (declining to 4.3 million foreign visitors in 2013). In contrast, visitor numbers and local businesses increased in the project cities over the same time period (see 3.2 Achievements). Additionally, the project is highly relevant to the current CPS ( ) priority of enhancing inclusion, pursuing local development, and addressing poverty pockets. b) Relevance of design 44. Rating: Substantial 45. This project was designed to bring about multi-attraction circuits, bringing tourists to secondary cities, thus encouraging longer stays and higher average expenditures, and linking tourism more closely to local businesses and benefiting the local residents. Such a combination of investments is now considered good practice, which is adapted and applied globally. The downside of this integrated approach is a possible overload of activities, and the project design was indeed quite ambitious in terms of number of stakeholders, geographic locations, and safeguard requirements, given the capacity and time constraints. 46. The project had four components (see 1.5), integrating five key elements to achieve the PDO: Improved inner city infrastructure (components 1 and 2); Better public asset management and local resource mobilization (components 1 and 4); Increased local ownership and business participation (components 3 and 4); Poverty reduction (components 1, 3 and 4) ; and Combined tourist attractiveness and cultural heritage preservation (components 1 and 2). c) Relevance of Implementation. 47. Although implementation relevance is not rated, the ICR notes several positive aspects, not least of which is the fact that the project continued to operate and deliver impressive results in 13

24 challenging and worsening environment. Also, the generally excellent relations between the Bank team and several groups of stakeholders -particularly at local level- are noted, despite the frequent changes of TTL. The inevitable challenges that emerged, mostly due to factors exogenous to the project, but some caused by dwindling interest and commitment in MoTA, were handled through dialogue and resulted in confirmation of the continued relevance of the project to both Government and Bank priorities at the time of the 2011 restructuring. 3.2 Achievement of Project Development Objectives 48. Rating against the original PDO and intermediate objectives: Modest 49. Rating against the restructured PDO and intermediate objectives: High 50. The overall, weighted rating of the this project s achievement of its objectives: Substantial Achievement of original Project Development Objectives 51. Rating: Modest 52. The original PDO has achieved or exceeded most of its targets, but the Petra Gateway was dropped. Thus, the achievement of the original PDO is rated as Modest. Most of the indicators have been achieved or exceeded. The length of stay of visitors in the five sites shows an increase over the pre-project period and is more than a quarter above target. This compares to a 28% decline in length of stay nationwide (Annex 3), showing concentration of tourism in the five municipalities participating into the project. The increase in the length of stay is a good indicator of success as it measures two components of the PDO tourism development and contribution to local economic development. For both these indicators, the economic impact assessment provides evidence of their attribution to the project. (Annex 3) Property values have increased rapidly and are now more than double their target levels, with positive impacts on real estate tax revenue. The risk of gentrification is mitigated by a high rate of home ownership, while virtually all renters have returned to their houses and businesses. 53. Although the Visitor Center in Petra was dropped during the first restructuring and consequently the rating for the original PDO is Modest, the project can justifiably claim some achievements getting the Gateway realized. It was conceived in a Bank-supported land-use plan under the Second Tourism project. The land-use planning, started under the Second Tourism project, continued during preparation and appraisal of this project, and was a period of intense collaboration with occasionally frank exchanges about the exact placement of the site. The many decisions taken at that time have proven to be the right ones. The facility was appraised by the Bank and included in the project. Had the Bank not had this dialogue with the Government of Jordan, the likelihood of a much less desirable Gateway (or no Gateway at all) would have been high. The ICR team was reassured that for technical, social and environmental safeguard compliance, UNESCO oversight and adequate Jordanian legislation were in place. UNESCO provided technical expertise and continues to advice on sustainable management of the facility. 54. As explained in section 1.6 (revised components) three other aspects were changed during restructuring: Cancellation of Salt Heritage Fund 14

25 Local Economic Development funds were adjusted and reduced Capacity building and project management was focused on training Original PDO as approved 2007 (a) Tourism development in five historically and culturally important cities (Jerash, Karak, Madaba, Salt, Ajloun) and thereby contribute to local economic development (b) Consolidation of the tourism industry in Petra Table 12 Original outcomes achieved Indicators Baseline Target increased tourist visitation, stay and spends in the cores of the project cities increased economic activity as indicated by increased value added in the city centers (particularly in tourismrelated activities and businesses established, efficient, informative and culturally sensitive new Visitors Center operating in the Petra sanctuary 1.5 days average length of stay Actual March 31, days 2.8 days 0 20% 50% No visitors center Timely completion of the Visitors Center at the Petra Sanctuary. (result indicator d, para 22, page 6 of PAD) Dropped Achievement of restructured Project Development Objectives 55. Rating: High 56. The restructuring was delayed, but made sensible changes in the components of the project, set better priorities, in agreement between the Government and the Bank, and reallocated some of the funding. Both PDO indicators (as restructured) exceeded their targets. PDO as per 2011 restructuring Support tourism development in five historically and culturally important cities (Jerash, Karak, Madaba, Salt, and Ajloun) and thereby contribute to local economic development Table 13 Revised outcomes achieved Indicators Baseline Target Increased visitation and stay in target cities Increase in value of properties in targeted cities 1.5 days average length of stay Actual March 31, days 2.8 days 0 20% 50% 57. Of the seven intermediate objectives agreed after restructuring, three were right on target, three exceeded their targets (one by a wide margin: more than eight times the foreseen number of facilities improved), and only one achieved less than its target: 93 businesses created out of a planned 100. Significantly, the largest project component (1. revitalizing historic city centers and 15

26 urban infrastructure) delivered 100% of what had been planned. Some results were only confirmed at the time of the economic impact analysis, or of the ICR mission (July 2014) Achievements beyond the indicators 58. The key findings of the economic impact assessment (see 2.3) are given below, with details to be found in Annex 3. In addition, the results of beneficiary assessments are summarized in 3.6, below. 59. A positive impact on tourist numbers. Total visitors to the principal attractions in the five project sites reached about 700,000 in 2013, above levels prior to the project which averaged 600, , despite the economic and security situation in the region. Foreign tourists to the principal heritage sites in the five project cities rose as a share of total foreign tourists in Jordan in about 8% of foreign tourists visited the five sites, in 2013 it was 11%. Although domestic tourism numbers in Jordan as a whole fell by about 11% from 2008 to 2012, domestic tourist numbers in the target cities grew by about 18% over the same period. 60. A rise in tourism-related employment. Tourism-related employment grew in the five cities at a substantially faster rate than for Jordan as a whole. Employment in tourist shops increased by 200% in project sites during , against a 70% rise for Jordan as a whole. Employment in tourist and travel agencies grew strongly (80%) in the target cities over the same period. The study, together with the parallel findings in the borrower s report, also found out that the project created 697 direct jobs and 306 indirect jobs, for a total of 1003 jobs, with a further 200 jobs as an induced impact on employment, against an initial target of 500 combined indirect and indirect jobs. 61. Increased employment and income. The study assessed benefits city by city (see box below). The findings confirmed that the local economy is gaining employment and income benefits from the project, and this trend can be expected to continue. 62. The works undertaken have substantially helped to break key constraints that were holding back tourism and community development in the target sites, despite the activities that were cancelled, because those implemented were of high priority. 63. The generation of benefits from the improvements in the historic cores of the target cities will continue. The project laid a firm foundation for future growth in tourist numbers, incomes from tourism, and employment opportunities in the tourist industry, and the results provide tangible evidence of success. 64. The project also produced intangible benefits by improving cultural heritage conservation, and stimulating communities awareness of the importance of heritage in celebrating the richness of Jordanian culture. 65. Considerable capacity has been built as a result from the Municipal Revitalization Pacts doing the design and overseeing implementation of works. Community Partnerships, which facilitated the exchange of ideas, organized by Municipal Program Coordinators, helped significantly in solving problems, especially during the design and early implementation phases. 16

27 66. A strong sense of ownership and enhanced capacity among mayors and municipal council members in the five project areas as evidenced by many initiatives to attract investors, market the city, and ensure sustained funding. Table 14 City-by-city economic benefits beyond the M&E framework a) Madaba. Production and sales of handicrafts in both the formal and informal sectors have increased in project areas and continue to do so. Government has now established the city as a transit destination for travelers: tour operators pick up transit passengers from the airport for a guided day (often including overnight stay) to be spent at the city. Madaba now boasts 470 licensed furnished apartments with another 210 currently under construction; many more are rented out on an individual basis. Restaurants do not now let go of seasonal staff as they expect tourism year round. b) Salt. Rehabilitated shops re-opened up in the historic core, and the renovated square build under the project 5 has been used for successful festivals and on a daily basis by the community. There is an increase in inquiries for real estate around the Saha to serve as hotels or restaurants, and real estate prices have increased 200% in the past two years, after the completion of the facility. The Saha is increasingly a launching pad for tourists to start their tours around the city. The impacts are likely to rise steadily as the city invests to move towards World Heritage nomination. c) Karak. Tourism-related employment in project areas during grew at an annual rate of 10%, compared to 4% in Jordan as a whole. Seasonal employment and seasonal housing rentals are a significant source of income, including in the 70 day period between Ramadan and Adha feasts when Shiites come to visit local shrines. The three months of summer provide additional seasonal rental opportunities. The local MoTA office has added furnished apartments to its brochures. d) Ajloun. There has been growth in hotel employment, more registered handicraft associations and a substantial increase in expenditure per head by daily visitors. The Sons of Ajloun Society (a CBO) holds the keys to numerous residences that it lets out to visitors. The completion of the mosque expansion, the oldest in Jordan, is expected to make this trend even more positive. e) Jerash. Employment in tourism has not grown as rapid as in the other project cities, confirming that this site, where works were completed late, may still have untapped potential. However, some of the streets have been narrowed through the project and congestion has increased; traffic remains a major constraint and needs to be tackled as a priority. 3.3 Efficiency 67. Rating: Substantial 68. Using econometric methods, the economic impact assessment assessed what the tourist numbers to the principal sites in each of the five cities would have been if the project had not been undertaken. The study then estimated an annual increase of about 18% in tourist numbers (about 120,000 tourists) compared to what the numbers would have been in the absence of the project. The annual expenditure generated by this increase in tourist numbers was estimated at around JD 6 million. The study also estimated the multiplier effects of the increased expenditure due to the additional tourists. The indirect multiplier effects (due to backward linkages) were estimated at JD 2.7 million, while induced multiplier effects resulting from increased consumer spending were estimated to be approximately JD 3.5 million. 5 As referenced in the Economic Impact Analysis, additional funding was provided by JICA 17

28 69. At appraisal, pure cost-benefit analysis was found to be not appropriate due to the difficulty of quantifying benefits and assigning a monetary value. Instead a cost-effectiveness approach was proposed, to determine whether the project represented the least cost solution by an analysis of cost per unit of input. Overall, quality of works varied from acceptable to very good. Quality of street works was exceptionally good in Madaba and Salt, while in Jerash and Ajloun it was acceptable. Asphalting was of high quality in all cities. The construction quality of the mosque annex in Ajloun was also very good, as acknowledged by His Royal Highness the King of Jordan during his visits to the site, as was the rehabilitation of the Saraya Building in Madaba. 70. In general, Jordan has higher construction costs (costs per unit of output) than other countries in the region - about 10%-20% (see Table below). A comparison of sewage networks for example for two similar World Bank projects would put a kilometer at USD 36,000 in Lebanon and about USD 40,000 in Jordan. Jordan also has higher costs per unit of input, such as costs of materials, while daily labor rates were also higher than in neighboring Lebanon The ICR finds the total of 18 months extensions justified in the light of the formidable delaying factors of global economic downturn, Syrian crisis and National Government restructuring and thus does not consider that a negative factor in rating efficiency. On the other hand, the period between the MTR recommending a restructuring and the actual restructuring was too long, and not particularly efficient. (see Borrower Performance) Output Lebanon (FMIP Grant) (USD) Table 15 Unit cost comparisons Jordan (USD) West Bank & Gaza (USD) Yemen (USD) Road/km 56, , , ,400 Municipal Building NA 492, , ,000 Drainage/km 139, , ,360 NA Street Lighting (No.) 261 1,152 NA NA Portable Water/km 10,336 11,000 NA NA Sewerage/km 36,349 40,000 NA NA Source: Figures obtained from FMIP Grant database; Emergency Municipal Services Rehabilitation Project II, ICR, West Bank and Gaza, December 20, 2011; Port Cities Development Project, ICR, December 30, Justification of Overall Outcome Rating 72. Rating: Moderately Satisfactory 73. The ICR team rates the Overall Outcome as Moderately Satisfactory, based on the considerations summarized in the table below and finds confirmation of its rating in the weighing of pre- and post-restructuring results, below. This project achieved and exceeded many of its key 6 The cost estimates at appraisal were overly optimistic. The actual project costs exceeded the estimates by more than 160%. Much of that difference was absorbed by funding from cancelled non-core activities, as described in paragraph 2.2, above. 18

29 objectives, and helped Jordan set important elements of heritage-based tourism, urban renewal, economic growth and poverty reduction on a very strong footing Table 16 Overall Outcomes Elements of Overall Outcomes Relevance Before restructuring After restructuring Effectiveness Weighted Rating Results beyond the indicators, but contributing to the PDO Institutional Development Efficiency Sub-Rating High Modest Substantial Substantial High Modest Substantial 1. Rating Table 17 Weighting original against revised PDOs Against Original PDOs Moderately Unsatisfactory Against Revised PDOs Overall Satisfactory - Comments Petra dropped, to be funded from other public sources 2. Rating value Weight (% 63% 37% 3. disbursed 100% before/after (69%) (31%) PDO - change) Weighted value (2 x 3) Final rating (rounded) 1.89 (2.07) The Disconnect dilemma 1.85 (1.55) (3.62) Moderately Satisfactory 74. Despite an innovative and ambitious project, the implementation team felt confident that the project had achieved a great deal in an adverse operating context. At the same time, the team acknowledged that substantiating these achievements was not entirely possible some of the data not being available at the time. To address this situation the team accepted the need to rate the last ISR as MU with the expectation (shared by staff and management) that the comprehensive report would yield the evidence to support a more accurate and positive rating at the time of the ICR The project underwent a revision of the PDO in 2011 when the project had 63% disbursed. The above weighing only considers actual disbursements at the time of the restructuring. It could be argued that USD 5 million were canceled and undisbursed, so the actual amount disbursed at that time (USD 35 million) was closer to 69% of the loan amount used. Applying 69% and 31% result in 3.62, which is still an MS. It is unfortunate that the restructuring was delayed, as an earlier restructuring would have resulted in a more robust MS rating. 19

30 3.5 Overarching Themes, Other Outcomes and Impacts a) Poverty Impacts, Gender Aspects, and Social Development 75. As discussed above, the project investments have improved infrastructure and service provision in five historic city cores where poverty rates are high and unemployment and underemployment are prevalent. A high ownership rate prevented gentrification, even in presence of substantial increase in real estate values and virtually all renters returned to their improved businesses. The result has been a clear improvement in standards of living and access to services as detailed in Annex 3, and highlighted in 3.2 above. 76. Several investments also benefitted specific populations. At Ajloun, for instance, the expansion of the mosque has enhanced a national and local religious and cultural asset - it is the oldest mosque in the country while creating first rate community facilities and providing women with a defined, up-to-standard place to meet and socialize. In Madaba, the street and sidewalk upgrading is the first such project to meet Jordanian norms for disabled access. The Saha in Salt provides a meeting place for young people, in a region of the world where investing in youth and creating urban spaces for them is of critical importance. b) Institutional Change/Strengthening 77. As described above, MoTA s effectiveness started high, then dwindled, and ended again on a high note. As a result, MoTA has acquired confidence and experience from project implementation. This is evidenced by the increased capacity of MoTA to access grant funds with other donors and concessional loans from IFIs. 78. Municipalities are now well aware of the need to combine tourism promotion and management of their historic city cores. All five cities have a deeper appreciation for the planning and execution of O&M, they are incorporating safety in their traffic planning, and have found ways to mobilize resources, for instance. On the other hand, there was limited institutional analysis during implementation during a period of unclear decentralization. Some capacity building activities were dropped, and the capacity built among temporary contracted staff in the CMUs (see Borrower s Report) has not been assured. Thus, the ICR team rates the institutional strengthening as Modest. c) Other Unintended Outcomes and Impacts (positive or negative) 79. None Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 80. Micro-level beneficiary surveys in Madaba and Salt conducted as part of the economic impact assessment looked at the effects of the project on major stakeholder groups: Clear majorities of businesses (around 85% in Madaba and 65% in Salt) reported that the upgraded city cores are now attractive places for customers. Hoteliers in Madaba reported clear evidence of the appeal of the historic center of the city as a location for an overnight stay for tourists. 20

31 Cultural institutions are growing, with the average number of employees per institution rising (between ) in Madaba from 1 to 8, and in Salt from 12 to 16. The majority of institutions (80%) in Madaba and Salt agreed or strongly agreed that the project had a positive impact in terms of visitors, both Jordanian and foreign. Roughly 70% of visitors in Madaba and 80% in Salt agreed that conservation works improved livability. About three quarter of respondents agreed that the improved core now gives a sense of Jordanian cultural identity. 4. Assessment of Risk to Development Outcome 81. Rating: Significant 82. Going forward, the main risk to tourism development and poverty reduction is the overall situation in the Middle East, and the Syrian crisis in particular. The impact, if this risk were to materialize is hard to foresee. The ICR rates the risk to the Outcomes as Significant. 83. The risk assessment done at appraisal was comprehensive, and made sense, while many of the mitigating factors came into play. As a result, some of the key risks identified at appraisal have been effectively mitigated, and are unlikely to remain risk factors. For instance, poor local leadership, elite capture, an unwilling private sector, and disinterested populations are no longer risks. 84. On the other hand, resource availability was rated as Negligible at appraisal, and that may have been too low a risk rating, as it turned out. Also, the Borrower s report notes that weak capacity building and poor CMU staffing might hinder the sustainability of operation and maintenance [..] and cause loss of institutional memory. As explained below (Comments on Borrower report), the ICR partially agrees with the reservations about capacity built at MoTA. However, local tourist institutions, the municipalities, and communities of residents and business owners achieved significant capacity, and demonstrate their sustainability. The early signs of institutional changes in Jordan s public sector should perhaps have been investigated better, if not at appraisal, then during implementation to better manage the associated risks. Risk identified at appraisal Insufficient attention to management, operations and maintenance at the Petra visitors center. The local financial and managerial resources and practices do not ensure adequate operation and maintenance of the new municipal assets in the rehabilitated city cores and participating municipalities resources adjusted up or down Table 18 Assessing Risks at Appraisal and at ICR Rating Did the Is the Is it higher at mitigation risk still now than at appraisal work? existing appraisal? M Yes No Lower N Partially Yes Higher Observations Given the visibility and iconic character, risks are Low There is considerable bottom-up pressure for the central Government to provide resources for O&M, but with budget constraints and imperfect decentralization, the risk is Moderate, somewhat higher than the rating at appraisal. 21

32 based on achievements. Because of weak municipal leadership and capacity, inadequate social consultation practices and complex competing interests, sustained municipal and community support for the project is not forthcoming. Capture of project benefits by narrow sectional interests. The private sector proves unwilling to participate or investment in revitalizing the project zone. The spillovers from neighboring conflicts deter tourists from visiting Jordan. M Yes No Lower M Yes Yes Lower M Yes No Lower M Yes Yes Probably higher, but impossible to quantify or predict The risk of lacking community support no longer exists, thanks to the project. Financial Management and Procurement worked very well in this project, and combined well with local oversight by key stakeholders. Another hallmark of the project, with many new businesses and substantial private sector investment, as documented by the economic impact assessment. The length of stay in the five cities increased, well over target, while the length of stay in the rest of the country declined by a quarter. 85. Key risks to consider for possible follow-up operations: Counterpart funding, decentralization and devolvement issues. Institutional arrangements, with a better skill gap analysis, an incentive review among all stakeholders, and some understanding of the political economy. M&E system design, implementation, and capacity built and retained. Overly negative perceptions of risks in Jordan among potential tourists. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance a) Bank Performance in Ensuring Quality at Entry 86. Rating: Satisfactory 87. Overall, project preparation, design, and quality at entry were sound (see 2.1 above). Bank inputs during preparation and appraisal helped to deliver a strategically relevant and thoroughly prepared project where extensive consultations promised strong ownership and engagement at central, municipal, and community levels. Lessons from previous experience were well incorporated and the risk management strategy was sound. Although ambitious, project design made sense and combined the key ingredients in an effective manner to achieve integration and efficiency. Safeguards and fiduciary aspects were carefully appraised and prepared. The project was ready for implementation: there were no major procurement issues, no implementation delays, and disbursements started early on, with adequate staffing in place. On the other hand, the 22

33 results orientation (including RF, PDO and M&E) was less than satisfactory. 8 Thus, Bank performance in ensuring quality at entry is rated Satisfactory. 88. This ICR agrees with the QAG review of quality at entry (QEA8, August 2007), which considered this a well-prepared project. QAG noted how three sub-sectors - cultural heritage, tourism, and municipal management - were innovatively brought together to spur local economic development and how the project took a tailored, non-conventional approach to urban policy, building on in-depth sectoral knowledge and participation of key stakeholders with adequate attention to social and environmental aspects. QAG rated the overall quality at entry as Satisfactory, with environmental and fiduciary aspects rated Highly Satisfactory, and five quality dimensions rated Satisfactory. Implementation Arrangements were rated Moderately Satisfactory, however, as the panel felt that the project implementation period was short (5 years) given the comprehensiveness of the project and past experience within the sector in Jordan. The Region broadly accepted this assessment. b) Quality of Supervision 89. Rating: Moderately Satisfactory 90. Overall, the supervision teams did a good job, despite five changes of Task Team Leaders. The team built excellent relations with a multitude of stakeholders and partners and provided key technical expertise in a timely fashion. The quality of the 16 ISRs was good, candid in its observations, and realistic in its ratings, although the upgrade of the DO rating before the restructuring had been finalized seemed premature. 91. On the other hand, key moments for Bank decisions were not used optimally: The QER was not used to improve the quality of the RF/PDO/Indicators The MTR was underutilized to prepare for the restructuring Restructuring One was delayed 9 and did not improve RF/PDO/M&E Restructuring Two (project extension) may have been too modest 8 The ICR undertook a retrospective assessment of Quality at Entry by unbundling QaE into selected elements. Those elements were rated, and given a numerical value, allowing a theoretical averaging. The elements are as follows, with their ratings: Relevance (HS); Borrower commitment (S); Knowledge base (HS); WB Rationale (S); Results orientation (U); Institutional analysis (MS); Risk analysis (MS); Due diligence in Fiduciary and Safeguards (HS); Project design (S); and Readiness for implementation (S). The simple average would be 4.8 (S). 9 The period between MTR and Restructuring showed dwindling interest in government (at least among the leadership at the time) and the delay of the restructuring should perhaps have been taken up by the Sector Manager, requesting the Country Director to discuss at appropriate levels. That delay now unfavorably weighs the Outcome to the pre-restructuring period. Had it been done in time, the weighted MS rating for Outcome would have been more robust and possible closer to an S rating. 23

34 92. Thus, the rating for Quality of Supervision is Moderately Satisfactory. 93. This rating is in line with the QALP 8 findings (Sept 2010) that concluded that the likelihood of achieving the DO was Moderately Unlikely, the Quality of Design and Quality of Bank Supervision were both judged to be Moderately Satisfactory while Implementation Progress was rated Moderately Unsatisfactory. It concluded that The project is now in need of a fundamental restructuring. The QALP was carried out more than three years before project closure, so can only be an indication, but the ICR strongly agrees with its conclusion on the need for a fundamental restructuring. c) Justification of Rating for Overall Bank Performance 94. Rating: Moderately Satisfactory 95. The Bank did an excellent job in assisting the Government of Jordan prepare this project. Quality at entry was good and early implementation demonstrated the solid ownership, preparation and design logic. During supervision, the ICR sees evidence of a solid, professional team working in partnership with the Borrower and Partners. However, it considers the performance of the Bank as a whole less than satisfactory, as several key opportunities were missed to improve this project. Therefore, overall Bank performance is rated Moderately Satisfactory. 5.2 Borrower Performance a) Government Performance 96. Rating: Moderately Satisfactory 97. The project was an excellent fit to Government priorities, and ownership and commitment were strong, particularly at the beginning of the project, when important decisions had to be taken to kick off important activities. The quality of preparation by the Government was high, and inter-ministerial cooperation was good, particularly with the Ministry of Municipal Affairs (MoMA). The Government complied with all covenants. 98. On the other hand, three factors had negative effects on implementation: (i) the institutional changes that impacted the relations between Ministries and between MoTA and the communities; (ii) the budget cap (see 2.2 above); and (iii) the frequent changes of Ministers and municipal Governments. Also, the rationale for the Government to finance the construction of the Petra Gateway from its own resources remained a missed opportunity for the project; the delay of the first restructuring for more than a year negatively impacted the project, the refusal to request an extension beyond one year, although the logic for a longer extension seemed compelling. 99. Collaboration of the Technical Development Department of MoTA with the municipalities required efforts to be established and become fully functional. The Borrowers report states that community participation in the targeted cities presented a chronic resistance and dissatisfaction at least during the first half of project implementation period in most of the cases. 24

35 100. The ICR team understands that initial collaboration may have required efforts, but that problems were resolved relatively quickly as a result of the frequent consultations. Already the third ISR mentions that The project is progressing satisfactorily, which is due largely to the fact that the Technical Development Department (TDD) has been able to establish a close working relationship with the municipalities and that the newly elected mayors have confirmed their strong commitment to the project and are proceeding with the necessary staffing of the city-core management units. Table 19 10,000 likes for Salt While the ICR was prepared, in July 2014, the Salt municipality erected a giant screen at the Saha (one of the project sites) for locals to watch the World Cup in Brazil. Pictures appeared on Facebook along with the following comment: Little did we know that in the process of rehabilitating Sahat Al Ain in Salt that this reclaimed public space will be fully populated as an open theater on one summer night and by that creating a rare social scenery in Jordan. The Government, the World Bank and the municipality totally got it right. The post received about 10,000 likes, proving the appreciation for the project. b) Implementing Agency Performance 101. Rating: Moderately Satisfactory 102. On the whole, the TDD ensured that adequate decisions were taken to address problems arising during implementation, with more realistic phasing of the works and the appointment of a number of additional engineers as examples. In terms of safeguards, issues were satisfactorily resolved while the Government made available the required funding. Community Liaison Officers acted as interface with and between municipalities and the Project-Affected Persons generally expressed satisfaction with the fair process. All affected people were satisfied with the compensation and resettlement package. The compensation rates for all lost assets were determined based on market value and reflected replacement cost. The compensation process for the renters was fair in terms of quantity and quality and the value was adequate, especially taking into consideration the fact the renters eventually went back to improved and renovated shops. Safeguards emerge as a very satisfactory aspect of the project. Fiduciary compliance was observed, financial management was satisfactorily conducted, and audit compliance was satisfactory in terms of quality and timely submission. All audits were unqualified. On the other hand, the poor M&E throughout the project, despite multiple opportunities and incentives for improvement, weighs quite negatively on the implementation agency performance and can only be partially offset by the economic impact assessment. Hence, the ICR rates IA performance Moderately Satisfactory. c) Justification of Rating for Overall Borrower Performance 103. Rating: Moderately Satisfactory 104. Overall, Jordanian commitment to achieving the PDO fluctuated, but ended strong. When the budgetary environment became constrained, considerable efforts were made to continue implementation, but necessitating extensions of the project. Safeguard and Fiduciary aspects of the project were done very well, but M&E remained a serious shortcoming. 25

36 6. Lessons Learned 105. Four lessons were learned from this project: a) The integration of tourism, cultural heritage, business development, urban upgrading, poverty reduction and city management results in a total that is more than the sum of the parts. b) Right-sizing investments in integrated cultural heritage projects balances the need for critical mass in a number of cities while avoiding spreading efforts too thin in too many locations; c) Applying good design and implementation practices helps projects to achieve their objectives, and more importantly, ensure that beneficiaries actually benefit; and d) A solid understanding of the incentives, skill gaps and political economy among all key stakeholders is essential to design institutional arrangements in a complex environment with multiple stakeholders and to inform unavoidable adjustments during implementation Integration. In cases where cultural heritage sites are situated in cities, an integrated approach combining tourism, cultural heritage, urban upgrading, and poverty reduction can drive a powerful economic dynamic. Full integration, as learned in this project, demonstrates that simply improving an access road for tourist buses or putting in place an improved sewer infrastructure, will not provide the optimal outcomes, and may be of dubious sustainability and inclusiveness. Consultation between the local stakeholders (local male and female residents, actual and prospective business owners, public utility managers, municipality representatives, cultural heritage site managers, and mayors, for instance) and the project team is essential. The most interesting results were achieved where close interaction between stakeholders was ensured. Recruiting communication and community outreach staff had a positive effect Right-sizing. Investments in the integrated approach to cultural heritage need to be rightsized, both at the level of individual cities, and at the National level. Considerations to determine the critical size include the following. Consider both the potential of cultural heritage to attract visitors, as well as the opportunity for local people to make a living. Thus, for instance, simply refinishing a building façade, or putting a bicycle route in, won t be enough. Conversely, redoing the whole of urban transport including roads, buses and management practices, will be too much. Focus on what is needed to make the city attractive for locals and visitors, by carefully blending improvement of key municipal services (water, sanitation, electricity, access, parking, safety) with promotion of local businesses that cater to locals and tourists. As a very rough guide, and limited to countries somewhat similar to Jordan and depending on the needed upgrading, investments of less than USD 5 million per city might not have the critical mass, while investments of more than USD 20 million would risk dilution into non-core activities. The development of the five selected sites helped build a denser network of higher quality tourist circuits. This project s model can help raise a country s profile as a standalone tourist destination and thereby improve the resilience of its tourist sector to the threat of external shocks. The wider application of this lesson will depend on the particular country, and the list of sites to be included may need to be established by detailed surveys among prospective tourists and national tourism boards. Again, as a very rough guide, experience in Jordan indicates that in countries with limited implementation capacity more than ten geographically dispersed sites would be a challenge to implement, while the overhead of fewer than three or four sites would be quite high. 26

37 108. Good practice. Projects ignore good practice at their peril. Some shortcomings were exogenous, but some were clearly under the joint control of the Government and the Bank. For future operations, this project underscored the importance to apply good practice in the following areas. Early action is needed to adapt to changing circumstances or emerging performance issues. The Bank and the Borrower have many tools to address needed change, but not using these tools has considerable costs. For instance, this project would have been truly outstanding: Had the team heeded the QER advice to improve the PDO and indicators; Had the MTR had a stronger mandate and more focused terms of reference; Had the Government not delayed the restructuring; Had the Government agreed with a slightly longer extension; and Had counterpart funding been available in the foreseen timeframe. Set a PDO and results that are precise, relevant and confidently monitorable. Although definition of indicators for a cultural heritage and tourism project is difficult, the economic impact assessment provides a wealth of possible indicators that capture the results of the investment in urban infrastructure and services, and indicators that track details of poverty reduction and business growth (Annex 3). Better monitoring of unit costs and least-cost options are an empowering tool for beneficiaries and other stakeholders, in addition to being a fiduciary requirement Understanding institutions. In projects where roles and responsibilities are spread among different implementing agents, which is almost always the case in projects applying this model, a thorough institutional analysis is needed at appraisal. That analysis needs to be checked for relevance during the MTR, particularly in countries undergoing decentralization or other institutional change. Such an institutional analysis would include: An inventory of available and required human resources; A skill gap analysis to determine the outlines of a training plan; An understanding of the key public sector human resource policies, including the incentive structure, compensation criteria, and sanction policies; and An understanding of the political economy to inform the risk analysis and guide attractive and sustainable public and private sector staffing arrangements. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners a) Borrower/implementing agencies 110. The Borrower provided a comprehensive, clearly written, and balanced report that largely concurs with the ICR findings. The ICR team is grateful to the Government of Jordan to have provided an important contribution to the expanding knowledge base on this type of project and the ICR provides the following observations to inform future discussion and practice: Table 20 ICR observations on Borrower s report Borrower s report ICR s team observations Project Successes The revised Project Development Objectives were successfully Agree achieved. Most of the project restructured and Mostly agree, although the ICR team recognizes that the 27

38 planned activities were effectively implemented with satisfactory disbursement level exceeding 85%. The project benefited local communities in target cities as well as visitors and tourists, where the estimated annual increase of tourism was 18% in tourist numbers (about 120,000 tourists) accompanied with positive contribution to the local economic development in those cities. The project represents a unique, unprecedented opportunity of practice demonstrating the local and governmental skill set, and abilities utilized in managing nation-wide multidisciplinary activities requiring complex coordination and strong synergy among stakeholders. The project developmental program is considered a successful sustainable model for tourism and it has formed nuclei for further tourism-related activities in target cities and city cores that can be replicated and/or expanded The project restructuring and amendments to Loan Agreement substantially affected the original scope of work, project design, and means of intervention. PDOs were revised and restated, project components and activities substantially downscaled. Out of four components, two were cancelled, Petra Gateway and Local Economic Development, while a considerable change altered the forth component (Capacity Building) limiting it to training. While the followed development model promotes sustainability, the weak Capacity Building in the participating municipalities and poor municipal units staffing might hinder the sustainability of operation and maintenance of the accomplished activities in city cores and cause losses and/or damages to the obtained institutional memory. The significant downsizing of project activities confined the previously comprehensive program of disbursement ratio was impacted by higher unit costs. Agree and refer to the evidence from the economic assessment that estimated an annual increase of about 18% in tourist numbers (about 120,000 tourists) compared to what the numbers would have been in the absence of the project. Agree Agree, and hence the wider application of the model, globally. Project Failures Agree, but on the other hand the component sizes has to be taken into account: Agree, this is a risk. Mitigation has been described above in 4. See also lesson 2. 85% 9% 2% 4% Urban Petra LED Capacity The ICR acknowledges that two key components were reduced or dropped: (i) LED; and (ii) Capacity. Clearly, the project 28

39 intervention to less diverse one almost limited to the built/physical environment. Community participation in the targeted cities presented a chronic resistance and dissatisfaction at least during the first half of project implementation period in most of the cases. This could be related to the adopted participation model which might not been suitable to the level of impact on the community. Actual project cost exceeded cost estimations by more than 160% and has therefore lead to cancellation of activities. 1. Community Participation For future tourism development projects/programs, it is recommended to conduct an assessment of the needed level of community participation in relation to the anticipated impacts on the community due to proposed project interventions. 2. Capacity Building and Maintaining the Institutional Memory Although it is much easier to build up the full capacity of project related implementation and coordination units, by bringing in and hiring new staff members with relevant experience, nevertheless it has proven to be less sustainable on the medium and long term. Therefore, it is recommended to utilize more staff members from the implementing and cannot claim direct benefits from dropped investments, but there is compelling evidence that the indirect benefits are significant, and attributable. The LED component was too small, and did not fit the implementation profile of MoTA. At the same time, many other partners were, and still are active in this field. However, rather than providing direct funding to local businesses, the benefits in those businesses were largely the consequence of project-supported urban upgrading. Moreover, those benefits are being sustained. As to capacity building, this component was focused on training, as other elements (studies, consultations) were funded from other sources, and some of the capacity built by the time the component was dropped (4 years into the project) appeared quite robust, and ensured their own sustenance. Thus, this ICR sees this project not simply as a bricks and mortar project, and find that the economic impact assessment and beneficiary assessment demonstrate that convincingly. The ICR team recognizes that the relations between MoTA and participating municipalities were initially strained. However, there is a lot of compelling evidence that those problems were resolved, and thus cannot be called chronic. Agree Recommendations for Future Projects Agree. This recommendation underscores the ICR lesson learned about the need to do a solid institutional assessment that would include an incentives analysis among all stakeholders and provide an understanding of the political economy. Such an institutional assessment would help determine the level, scope and nature of community participation, which could draw on a wealth of experience-based knowledge about participation and empowerment, including in otherwise restrictive environments. Agree. The ICR team refers to Bank evidence on the lack of sustainability and the problematic capacity building of project management units, particularly among those who are independent from their line ministries. 29

40 coordinating agencies, such as MoTA and participating municipalities, and rely less on imported qualified personnel. This shall also maintain and allow to the transfer of the institutional memory. 3. Comprehensive and diversified development model It is recommended to increase the diversification of the tourism developmental projects by providing a more balanced distribution of activities beyond infrastructure components and the built environment. This can be done by initiating periodic tourism-related events, community training, Local Economic Development component etc, where this shall expedite the generation of economic and tourism activities in city cores rather than wait for market forces. Works in city cores is recommended to be more hinged with the municipal direct needs and be well integrated with its future urban and strategic plans. 4. More Focused target areas/destinations It is recommended to minimize diffusion, thus select a fewer number of included cities in future projects and have a more area/ destination/ region concentrated intervention. This shall consolidate efforts, require less resources and force irrefutable results. Agreed. Agreed. This recommendation links very well with the ICR s reflection on an optimal size, balancing a minimum critical mass with an oversized project with greater risks of elite capture. b) Cofinanciers 111. NA c) Other partners and stakeholders 112. NA 30

41 Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent) Components Actual/Latest Appraisal Estimate Percentage (including Physical and Price Estimate (USD (USD millions) Appraisal Contingencies) millions) Component 1: Revitalization of historic city centers, urban % infrastructure Component 2: Petra gateway % Component 3: Local Economic Development % Component 4: Capacity building and project management % Land acquisition, expropriation and resettlement costs % Total Baseline Cost % of Front-end fee PPF (waived) % Front-end fee IBRD (waived) % Total Financing Required % (b) Financing Source of Funds Type of Cofinancing Appraisal Estimate (USD millions) Actual/Latest Estimate Percentage of (USD Appraisal millions) Borrower NA % International Bank for Reconstruction NA % and Development 31

42 Annex 2: Outputs by Component Component 1.0: Historic city centers and urban infrastructure improvements Jerash city revitalization Subcomponent At appraisal (1) At closure (2) (a) Upgrading of primary, secondary and tertiary streets in city core. Includes rationalization and beautification, with particular attention to the redesign of sidewalks, of two main streets in the Completed central retail hub of Jerash: Wasfy Al-Tal, King Abdullah and Bab Amman Streets. 1.1 Upgrading of street networks and (b) Detailed landscaping of two critical junctions as follows: Municipality Square; and Wasfi Al-Tal Street/King Abdullah Street Completed allied public spaces Junction. Output Indicators m2 of primary streets: target 22,650 m2 39,200 m2 m2 of secondary streets: target 19,910 m2 6,000 m2 m2 of tertiary streets: target 29,250 m2 0 m2 m2 of landscaped areas 1,600,000 m Rehabilitation of façades on primary streets 1.3. Renovation and preservation of selected heritage buildings through adaptive reuse 1.4. Rehabilitation and upgrading of pivotal urban spaces 1.5. Construction and rehabilitation of essential municipal buildings and facilities 1.6. Traffic and parking management 1.7. Rehabilitation and improvement of cultural landscapes 1.8. Detailed design and supervision of works Rehabilitation and cleaning of building façades along the primary upgraded streets: King Abdullah, Bab Amman and Wasfy Al-Tal. None in this project site (a) Demolition of at least three buildings on the southern side of the South Bridge and relocation of related activities. Such buildings are both visually invasive and extremely vulnerable to floods and landslides, as they are build right in the wadi path. (b) Rationalization of the pedestrian crossing connecting the South Bridge to the archaeological site and rationalization of the Wasfy Tal-Al Street section, including the introduction of appropriate speed reducing devices coinciding with pedestrian road crossings. (c) Landscape restoration of the Wadi Area urban corridor. (d) Renewal completion of the East Baths Node. Cancelled Completed by the Government with other donors financing None in this project site Completed Completed Completed Completed Output Indicators No of intrusive buildings demolished: target 4 4 m2 of pivotal urban public space upgraded: target 3,300 m2 4,500 m2 Ex-market urban void - parking building and multi-functional facility. New TPMP developed and implemented, including the estimated installation of 6 new parking meters. None in this project site Employment of consultants to complete/prepare detailed design and contract documentation for works, and to undertake supervision of works. Cancelled Cancelled None in this project site Completed (1): This refers to the investments appraised and listed in the PAD. (2): This refers to the investment implemented and documented by Bank records, borrower s report, and in the ICR final mission. 32

43 Component 1.0: Historic city centers and urban infrastructure improvements Karak city revitalization Subcomponent At appraisal (1) At closure (2) (a) (i) Targeted upgrading of streets in city core with special focus on the storm water drainage system. Completed (a) (ii) Creation of a new pedestrian-safe trail to the Castle between Karak Castle and the Bus Station. Includes rehabilitation of parts of the old city wall close to the Trail. Completed (b) Eastern Access: Detailed landscaping and rationalization of the 1.1 Upgrading of Eastern city access identified by the Salah Ad-Din Al Ayyubi Street Completed street networks and and Al Madeenah Street junction. allied public spaces Output Indicators m2 of primary streets: target 3,830 m2 8,830 m2 m2 of secondary streets: target 23,700 m2 39,900 m2 m2 of tertiary streets: target 32,600 m2 37,600 m2 m2 of landscaped areas: target 4,650 m2 2,000,000 m2 m of pedestrian trail: target 1,950 m 2,330 m 1.2. Rehabilitation of Façades on Primary Streets 1.3. Renovation and preservation of selected heritage buildings through adaptive reuse 1.4. Rehabilitation and upgrading of pivotal urban spaces 1.5. Construction/ rehabilitation of essential municipal buildings and facilities 1.6. Traffic and parking management 1.7. Rehabilitation and improvement of cultural landscapes 1.8. Detailed design and supervision of works Cleaning of facades along selected upgraded streets. Renovation and adaptive reuse of selected cultural heritage buildings. Karak City Gateway: (a) Creation of a wall-view Panoramic Walk, stretching along the walls, including the reconstruction of a demolished portion of the city walls. (b) Redevelopment and refurbishment of the Inner-City Bus Station as a mixed-use compound including new clean, small scale multi-purpose commercial facilities, landscaping, and the rehabilitation of the historic Old Eastern Gate. (c) Construction of new multi-purpose multi storey commercial building and car park. None in this project site New TPMP developed and implemented, including the estimated installation of 3 new parking meters. None in this project site Employment of Consultants to complete/prepare detailed design and contract documentation for works, and to undertake supervision of works. Cancelled Completed by the Government with its financing Cancelled Cancelled Cancelled Implementation currently financed by the Government with other donors financing Cancelled None in this project site Cancelled None in this project site Completed (1): This refers to the investments appraised and listed in the PAD. (2): This refers to the investment implemented and documented by Bank records, borrower s report, and in the ICR final mission. 33

44 Component 1.0: Historic city centers and urban infrastructure improvements Madaba city revitalization Subcomponent At appraisal (1) At closure (2) (a) (i) Upgrading of primary, secondary and tertiary streets in city core. Includes basalt paving and equipment with safe sidewalks of Completed King Talal primary street. (ii) Upgrading of the ring road circumscribing the city core, ensuring safety, continuity of sidewalks and proper storm-water Completed 1.1 Upgrading of drainage. street networks and (b) Detailed landscaping and rationalization of the Church of the Completed allied public spaces Map node, a key gateway to the city. Output Indicators m2 of primary streets: target 5,550 m2 125,000 m2 m2 of secondary streets: target 49,530 m2 24,000 m2 m2 of tertiary streets: target 19,765 m2 20,000 m2 m2 of landscaped areas 450,000 m Rehabilitation of Rehabilitation and cleaning of building façades along the primary façades on primary Cancelled upgraded. streets 1.3. Renovation and preservation of selected heritage buildings through adaptive reuse 1.4. Rehabilitation and upgrading of pivotal urban spaces 1.5. Construction and rehabilitation of essential municipal buildings and facilities 1.6. Traffic and parking management 1.7. Rehabilitation and improvement of cultural landscapes 1.8. Detailed design and supervision of works Rehabilitation and adaptive reuse of the historic Saraya building, including the detailed landscaping of the entrance plaza and the slope along Prince Hassan street. Output Indicators No of historic buildings preserved and adaptively reused None in this project site (a) Functional upgrading of the old Bus Station (Madaba City Portal) (b) Creation of a new city-core Leisure Park leisure park including commercial space New TPMP developed and implemented, including the estimated installation of 6 new parking meters. None in this project site Employment of consultants to complete/prepare detailed design and contract documentation for works, and to undertake supervision of works. Completed 1 building 2,000 m2 None in this project site Cancelled Completed by the Government with its financing Cancelled Cancelled None in this project site Completed (1): This refers to the investments appraised and listed in the PAD. (2): This refers to the investment implemented and documented by Bank records, borrower s report, and in the ICR final mission. 34

45 Component 1.0: Historic city centers and urban infrastructure improvements Salt city revitalization Subcomponent At appraisal (1) At closure (2) Upgrading of primary, secondary and tertiary streets in city core: from the Saha to the Maidan area, namely Al-Dair Street, Oqba ben Nafè Street and Sa'eed Sleibi Street. 1.1 Upgrading of street networks and allied public spaces 1.2. Rehabilitation of façades on primary streets 1.3. Renovation and preservation of selected heritage buildings through adaptive reuse 1.4. Rehabilitation and upgrading of pivotal urban spaces 1.5. Construction and rehabilitation of essential municipal buildings and facilities 1.6. Traffic and parking management 1.7. Rehabilitation and improvement of cultural landscapes 1.8. Detailed design and supervision of works Output Indicators m2 of primary streets: target 7,500 m2 m2 of landscaped areas: target 3,000 m2 Rehabilitation and cleaning of building façades along the upgraded streets. Completed for the A in Plaza Street and surrounding area 500 m2 3,000 m2 Cancelled Completed by the Government with its financing Output Indicators No of facades cleaned and rehabilitated 400 m of facades cleaned and rehabilitated 15,000 m 2 (a) Partial rehabilitation and preservation of four significant Ottoman heritage architectural complexes forming the Saha Backdrop, namely the Sukkar complex, the Khatib complex, the Sakit complex and the Abu- Sarhad Coffee complex. (b) (i) incentive grants to historic building owners for implementing preservation works and/or adaptive commercial reuse; (ii) the employment of consultants (according to Bank Guidelines) to establish an appropriate institutional, financial and operational framework and program for the Fund; and (iii) a grant to salt Municipality for initial Fund establishment and operations. Completed Canceled at restructuring Output Indicators No of historic buildings preserved and adaptively reused: target 4 4 (a) Saha City Hub: demolition of three intrusive modern governmental buildings currently occupying the core of the historic Completed city. (b) Creation of the new Saha City Hub, a mixed-use public space Completed dedicated to social encounters, leisure and entertainment. (c) Mosque rehabilitation and/or demolition and reconstruction. Completed (d) Rehabilitation and streetscaping of circulation network around the Saha. Completed Output Indicators No of intrusive buildings demolished: target 3 3 m2 of pivotal urban public space upgraded: target m2 16,000 m 2 Redevelopment of the existing school area for car parking and commercial facilities. New TPMP developed and implemented, including the estimated installation of 40 new parking meters. None in this project site Employment of consultants to complete/prepare detailed design and contract documentation for works, and to undertake supervision of works. Cancelled Implementation currently financed by the Government Cancelled None in this project site Completed (1): This refers to the investments appraised and listed in the PAD. (2): This refers to the investment implemented and documented by Bank records, borrower s report, and in the ICR final mission. 35

46 Component 1.0: Historic city centers and urban infrastructure improvements Ajloun city revitalization Subcomponent At appraisal (1) At closure (2) Upgrading of selected streets in the current city core. Completed 1.1 Upgrading of street networks and allied public spaces 1.2. Rehabilitation of façades on primary streets 1.3. Renovation and Preservation of selected heritage buildings through adaptive reuse 1.4. Rehabilitation and upgrading of pivotal urban spaces 1.5. Construction and rehabilitation of essential municipal buildings and facilities 1.6. Traffic and parking management 1.7. Rehabilitation and improvement of cultural landscapes 1.8. Detailed design and supervision of works Output Indicators m2 of primary streets m2 of secondary streets m2 of tertiary streets m2 of landscaped areas None in this project site None in this project site None in this project site None in this project site None in this project site Protection and reforestation of vulnerable areas; protection of wadis; and development of parklands for recreation and ecotourism. Employment of consultants to complete/prepare detailed design and contract documentation for works, and to undertake supervision of works. 23,250 m2 0 m2 0 m2 150,000 m2 None in this project site None in this project site None in this project site None in this project site None in this project site Studies completed Implementation currently financed by the Government Completed (1): This refers to the investments appraised and listed in the PAD. (2): This refers to the investment implemented and documented by Bank records, borrower s report, and in the ICR final mission. 36

47 Component 2: Petra gateway Subcomponent At appraisal (1) At closure (2) Cancelled at restructuring 2.1 Construction of the Visitors Center 2.2 Consultancy services 2.3 Workshops and training Construction and operationalization of a Visitors Centre Petra for the Petra Sanctuary appropriate to the Sanctuary s status as a World Heritage Site and Jordan s premier tourist attraction. Consultancy services for detailed engineering and supervision and for management and organizational systems development. Training of key operating staff. Completed by the Government with its own financing and other donors financing Cancelled at restructuring Completed by the Government with its own financing and other donors financing Cancelled at restructuring Completed by the Government with its own financing and other donors financing Component 3: Local Economic Development At project level, for all participating municipalities Subcomponent At appraisal (1) At closure (2) Cancelled at restructuring 3.1: Business development grants 3.2 Studies, training and workshops 3.3 Consultant services Grants to selected business enterprises and entrepreneurs (including NGOs; the applicants) in the city cores, and within the following broad areas: (i) accommodation; (ii) food and beverage; (iii) traditional arts and crafts; (iv) day- and night-time tourism- and local community-related cultural heritage, social and recreational activities; (v) tourism services and related products. Technical assistance, training and business development support to selected business enterprises and entrepreneurs (including NGOs; the applicants) in the city cores, and within the following broad areas: (i) accommodation; (ii) food and beverage; (iii) traditional arts and crafts; (iv) day- and night-time tourism- and local community-related cultural heritage, social and recreational activities; (v) tourism services and related products. Employment of competent business development consultants to assist MoTA to implement and manage the Local Economic Development Grant Program. These consultants would be employed in the absence of an undertaking from SIYAHA to extend their services to any or all of the other PMs (i.e., Jerash, Karak, Salt and Ajloun). They would be recruited locally under Bank Guidelines. Completed by the Government with its own financing and other donors financing Cancelled at restructuring Completed by the Government with its own financing and other donors financing Cancelled at restructuring Completed by the Government with its own financing and other donors financing (1): This refers to the investments appraised and listed in the PAD. (2): This refers to the investment implemented and documented by Bank records, borrower s report, and in the ICR final mission. 37

48 Component 4: Capacity Building and Project Management At project level Subcomponent At appraisal (1) At closure (2) 4.1 Municipal Capacity Building Program (a) Project-related workshops, training, studies and Completed communications. (b) consultant services to help prepare and implement the key tasks specified under the Municipal Revitalization Pact, including: (i) tasks related to expropriation and relocation; (ii) historic core Completed regulation; iii) traffic planning and management; (iii) municipal finance and management Municipal Revitalization Pact Support Community Strategic Partnership (c) establishment of an effective City Core Management Unit in the Municipality, including;: (i) employment of key staff for the City Core Management Unit (director, chief engineer, and chief financial and accounting officer; (ii) essential vehicles and equipment for the City Core Management Unit, including office and solid waste management equipment for the city cores; (iii) utilities; and (iv) essential supplies and spares. Community workshops, studies and public information. 4.2 MoTA Capacity Building and Project Management Support Program TDD Project Management Support MoTA Support Project management and supervision: (a) project-related workshops, training, studies and public information; (b) consultant services for project preparation, management, supervision systems development and studies; (c) employment of key staff necessary for the efficient management of the project and the identification and initial preparation of subsequent projects (including but not limited to project managers, planners, engineers, architects, sociologists, statisticians, accountants and financial analysts); (d) essential vehicles and equipment, including office equipment; (e) utilities (electricity, telecoms; internet and other computer services); and (f) essential supplies and spares. Policy making and data collection and analysis: (a) consultant services for studies and training; and (b) essential office equipment and software. Completed Completed Completed Completed (1): This refers to the investments appraised and listed in the PAD. (2): This refers to the investment implemented and documented by Bank records, borrower s report, and in the ICR final mission. 38

49 Pictures from project sites Jerash, street rehabilitation, before the project Jerash, street rehabilitation, after the project Jerash, parking space, before the project Jerash, parking space, after the project Jerash, main square, before the project Jerash, main square, after the project 39

50 Jerash, belvedere, after the project Jerash, belvedere, after the project Karak, access road, before the project Karak, access road, after the project Karak, sidewalk, before the project Karak, sidewalk, after the project 40

51 Karak, retaining wall, before the project Karak, retaining wall, after the project Madaba, downtown street, before the project Madaba, downtown street, after the project Madaba, downtown street, before the project Madaba, downtown street, after the project 41

52 Madaba, downtown street, before the project Madaba, downtown street, after the project Madaba, Saraya heritage building, before the project Madaba, Saraya heritage building, after the project Salt, main square, before the project (did not exist) Salt, main square, after the project 42

53 Salt, main mosque, before the project Salt, main mosque, after the project Salt, downtown street, before the project Salt, downtown street, after the project Ajloun, main mosque, before the project Ajloun, main mosque, after the project 43

54 Ajloun, downtown street, before the project Ajloun, downtown street, after the project 44

55 Annex 3. Additional Details on Intermediate Indicators Intermediate Indicator as approved 2007 Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Component 1: Revitalization of historic city centers and urban infrastructure Intermediate Results (i) Improved livability and attractiveness of the urban environment in the city cores of the participating municipalities (ii) Revitalization of Historic city centers revitalized and urban infrastructure improved (iii) Effective preservation and conservation of historic buildings implemented (iv) Ajloun cultural landscape regenerated Revised Intermediate Results (i) Improved livability and attractiveness of the urban environment in the city cores of the participating municipalities (ii) Effective preservation and conservation of historic buildings implemented Percentage of area of street networks and public spaces in core upgraded under the 0 100% Continued 100% project Percent area of planned urban spaces rehabilitated and upgraded under the Dropped project Increase in percentage of collection of selected local revenues as part of the total local revenues in the participating municipalities local revenues particular property and business taxes Dropped Percent of targeted historic buildings in conservation of historic core protected and, where feasible adaptively reused by the project Percent of designated reforestation area replanted 0 100% Continued Dropped Component 2: Visitor Center effectively established and operational Intermediate Results Visitor center effectively established and operational Revised Intermediate Results Construction of the visitors center Dropped Consultancy services Dropped Workshops and training Dropped 60% (100% at ICR time) 45

56 NB: Al Level 1 restructuring (07/14/2011), the component was dropped. The component was appraised, land allocated, and feasibility addressed under the project, but the Government eventually decided to use grant funds from other donors for the final design and its own funds for the construction. The facility was built with UNESCO s oversight. Component 3: Local Economic Development Intermediate Results (i) Additional small and medium enterprises established in the civic cores (ii) Existing SMEs are more financially sustainable Revised Intermediate Results (i) Additional small and medium enterprises established in targeted cities (ii) Improved conditions within existing businesses in targeted areas NB: At the Level 2 restructuring (03/31/2013), an amount of USD 1 Million was dropped with this component. However, the bulk of the project s resources continued to support the objective of public infrastructure for private sector development, but no longer in the specific, somewhat cumbersome Local Economic Development format. Target values remained intact. No. of directly tourism/hospitality and cultural heritage-related businesses Continued 93 created and or improved in core area No. of new jobs created in directly tourism- and cultural heritage-related Dropped business in the cores Number of facilities improved in targeted cities 0 10 Continued 85 Number of tourism-related jobs created in target cities (direct and indirect) Continued 697 (direct) 306 (indirect) Component 4: Capacity building and project management support Intermediate Results (i) Management and maintenance of historic centers by the participating municipalities improved as agreed in Municipal Revitalization Pacts (ii) Effective use and or reuse and promotion of the key assets (including major civic spaces) in the city cores (iii) Management and maintenance of Ajloun Cultural/Natural Landscape by the Municipality of Ajloun, as agreed in Municipal Revitalization Pact (iv) Project effectively managed, monitored and reported on by MoTA (v) Sub-projects effectively designed and implemented Revised Intermediate Results Project effectively managed, monitored, and reported on by MoTA Number of comprehensive good quality M&E indicators and progress reports 0 One per year Continued One per year delivered on time by MoTA Percent of contracts completed on time and on schedule 0 70% Continued 80% Percent of respondents favorably rating the quality of social (family, leisure, group interaction), environmental and traffic services in Municipal Core (as established by selected results from the Dropped

57 annual Infrastructure Condition Survey conducted by MoTA) Percent of Municipal Revitalization Pacts fully complying with their Action Plan targets No. of new events organized by the CMUs Percent of the Ajloun Municipal Revitalization Pact fully complying with the agreed Action Plan targets Disbursement within 20% of annual forecast Percent of required reports proving adequate coverage of project objectives, procurement, accounting, and progress issues Percent of sub-projects started on time, and completed to an acceptable quality on time and on budget Dropped Dropped Dropped Dropped Dropped Dropped 47

58 Annex 4. Economic and Financial Analysis 1. This annex provides a summary of a special evaluation study commissioned by the Government and the Bank to Macquarie University of Australia, to assess economic impacts of project investments. The study used tested economic methodologies for ex post impact evaluation to derive indicators of the direct, indirect, and induced effects generated by the investments. The study was carried out by Prof. Dr. David Throsby and Dr. Ekaterina Petetskaya. 2. The economic impact assessment collected and analyzed existing data from a variety of World Bank and Jordanian Government sources, and have undertaken original data collection in the field in two of the cities, through extensive surveys, in Madaba and Salt, as well as in a control city, Irbid, which was not included in the project. The results of the pilots were then extrapolated to all project locations. Major outcomes 3. Regarding tourist numbers, total visitors to the principal attractions in the five project sites reached 675,000 in 2013, above levels prior to the project which averaged 600,000 in Foreign tourist numbers in Jordan, which had been following an overall upward trend during the period from 2002 up to 2009, fell away sharply in 2010 because of a range of external factors including the conflict in neighboring Syria. Despite so, foreign tourists to the principal attractions in the five project sites rose as a share of total foreign tourists in about 8% of foreign tourists visited the five sites, in 2013 it was 11%. 5. Domestic tourism numbers in Jordan also fell (by about 11 percent) from 2008 to 2012, but in the target cities over this period, domestic tourist numbers grew by about 18 percent. Econometric analysis 6. The substantial fluctuations in tourist numbers tend to swamp any effect on numbers that may have been exerted by the project improvements. However, econometric modelling overcomes these problems to some extent and enables estimation of the net effects of the project on tourist numbers. The study estimates an annual increase of about 18% in tourist numbers (about 120,000 tourists) compared to what the numbers would have been in the absence of the project. The annual expenditure generated by this increase in tourist numbers is estimated at around JD 6 million. 7. The study also estimated the multiplier effects of the increased expenditure due to the additional tourists. The indirect multiplier effects (due to backward linkages) are estimated at JD 2.7 million, while induced multiplier effects resulting from increased consumer spending are estimated to be approximately JD 3.5 million. Regarding employment, the study estimated the direct impact on employment resulting from the increase in tourist expenditure as 697 jobs throughout the Jordanian economy. The indirect impact on employment was estimated at 106 jobs, with a further 200 jobs also being added as an induced impact on employment. The study provides evidences for the attribution of these jobs to the project. 48

59 Tourism-related employment 8. Tourism-related employment grew at a faster rate in Karak and Ajloun than for Jordan as a whole, whereas in Salt there was a slight decline in the period 2007 to The main drivers of tourist-related employment came from tourist shops the number of employees in such businesses doubled between 2007 and 2013 in the five targeted cities, a bigger increase than in the whole country, where these numbers increased by 70%. Employment in tourist and travel agencies also grew in the target cities over the same period (80%), indicating a growth in this sector that will underpin further development in the years ahead. Results of the micro-level surveys of major stakeholder groups 9. The economic impact assessment involved surveys of: (1) businesses; (2) tourist accommodation; (3) cultural institutions; (4) households; and (5) visitors, particularly in Madaba and Salt. Representative results for these five groups of stakeholders are as follows: Businesses 10. Employment in tourist-related businesses in Madaba has remained reasonably steady overall since the project inception. There has been a significant increase in real estate prices for commercial property since the inception of the project in both locations (50% and 70% in Madaba and Salt, respectively). Clear majorities of respondents (around 85% in Madaba and 65% in Salt) were of the opinion that the historic cores in both cities are attractive places for customers and just over 60% of respondents in Madaba and 75% of those in Salt agreed that the historic core could be described as a prestigious business location. Tourist accommodation 11. The survey covered hotels in both locations. Most Madaba hotels are satisfied with their location in the historic core and would locate there again if starting out. The center of Salt is a more difficult location to access so far the only hotel there is just outside the core. Most respondents expected to increase their staffing levels in the future. There is clear evidence of the appeal of the historic center of the city as a location for an overnight stay for tourists. The majority of respondents thought that the historic core is a prestigious place for business location. These results again confirm the positive role that cultural heritage plays in the tourism industry, through its influence on the decision-making of both tourists themselves and the providers of tourism services. Cultural institutions 12. There has been considerable growth in activity in the years since the project amongst the cultural institutions surveyed. For example, in the case of employment, between 2007 and 2013, the average number of employees in cultural institutions grew from 12 to 16 employees per organization in Salt and in Madaba from 1 to 8 employees. Likewise, average salaries increased by approximately 20 percent in both places. When asked about their opinion regarding the impact that the project has had on them, the majority of institutions in Madaba (80%) and in Salt (80% to 90%) agreed or strongly agreed that there has been a positive impact in terms of visitors, both Jordanian and foreigners. In regard to future plans, four institutions in the Salt historic core and three in the Madaba historic core foreshadowed some changes to improve business operations 49

60 in the future, such as renovation, renewal of exhibits, opening a café, souvenir shop or gallery, launching new program, activities, etc. Households 13. Residents who live in the historic cores expressed their satisfaction or dissatisfaction about the core as a place to live. In Madaba 65% of respondents agreed or strongly agreed with the statement that the historic core is attractive as a place to live. In general living costs in the historic core do not seem to be significantly higher than in other parts of either city. Visitors 14. In view of the fact that the rehabilitation of the historic cores in Madaba and Salt was undertaken under the project with the explicit intention of improving facilities and access for tourists, it was important for this study to find out something about the attitudes of visitors to the city centers do they think that the historic core is culturally important, or do they think that investing in its rehabilitation is a waste of money. The majority of visitors in both Madaba and Salt said they were there because they wanted to visit the historic core as a cultural site, an affirmation of the drawing power of heritage for tourists. Roughly 70% of respondents in Madaba and 80% in Salt supported the proposition that restoration of the core actually improves it; 75% of Madaba respondents and a slightly higher proportion in Salt agreeing that the core gives a sense of Jordanian cultural identity. The majority of visitors disagreed with the proposition that investment in the core is a waste of money, or that it should be demolished. The educational potential of cultural heritage is illustrated by the significant numbers of people claiming to have learnt something about heritage while visiting the core. Conclusions 15. The economic impact assessment has been concerned to evaluate the results of the project within a broad cost/benefit framework. The question to be addressed within this framework has been whether or not the initial investment of over $70 million in the project has generated a timestream of net benefits that will justify the capital cost. The study concluded that the generation of benefits from the improvements in the historic cores of the target cities is getting underway, and the study outlines significant initial results. 16. Main conclusions are: 17. Econometric methods can assess what the tourist numbers to the principal sites in each of the five cities would have been if the project had not been undertaken; preliminary results from this analysis indicate a generally positive impact on numbers, and it might be expected that these predictions will continue into the future. 18. Similarly the surveys of the stakeholder groups in the two case-study cities have yielded primary data showing the improvements that these groups have so far recognised in their commercial operations or in their experience of living in or in visiting the historic core, and it is likely that the best of these sorts of responses will continue to grow. There have been some unfavourable outcomes caused not by the project but as a result of external factors, particularly those that have affected inbound tourist numbers. The overall tone to be recognised in the survey results is positive. 50

61 19. The data assembled and analyses undertaken in have provided a solid basis for making a judgement as to the existing and potential benefits arising from the project. This judgement points clearly to the fact that, although there has been some variations in outcomes between the different cities, the works undertaken have helped to break key constraints that were holding back tourism and community development in the target sites. 20. The economic impact assessment concludes affirming that the project can be judged as having been successful overall in laying a firm foundation for future growth in tourist numbers, incomes from tourism, and employment opportunities in the tourist industry. At the same time the project has initiated both directly and indirectly an improvement in levels of cultural heritage conservation, and stimulated an awakening in the community s awareness of the importance of heritage in defining and celebrating the richness of Jordanian culture and identity. 51

62 Annex 5. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Responsibility/ Specialty Lending Abi Samra, Maher NA Abi Samra, Marwan NA Al Said, Ghada NA Alkayyat, Marah Jamal Masoud NA Dajani, Ibrahim Khalil Senior Operations Officer El Fadel, Mutasem Consultant El Masri, Diana C. NA Etaiwi, Amer NA Fares, Lina Senior Procurement Specialist Feghoul, Mohammed D. E. Senior Urban Development Specialist Task Team Leader Gonzales Flavell, Sara Special Assistant Hannah, Lawrence M. Consultant Massey, Ekaterina K. NA McPhail, Alexander A. Lead Water and Sanitation Specialist Nitti, Rosanna Senior Urban Development Specialist Opsal, Knut Lead Social Development Specialist Reliquet, Chantal Senior Urban Development Specialist Rennie, John Keith NA Robotam, Kingsley O. NA Sommer, Yarissa Lyngdoh Urban Development Specialist Supervision/ICR Agarwal, Om Prakash Senior Urban Transport Specialist Bhatt, Nina Lead Social Development Specialist Brotsis, Christianna Johnnides Senior Urban Development Specialist Brown, Hyacinth D. Division Manager Chalah, Hocine Lead Environmental Specialist Dahiyat, Iyad Consultant Dajani, Ibrahim Khalil Senior Operations Officer Eiweida, Ahmed A. R. Program Leader El Masri, Diana C. Financial Management Specialist Fares, Lina Senior Procurement Specialist Feghoul, Mohammed D. E. Consultant Gigler, Karim Violeta E. Program Officer Goga, Soraya Lead Urban Development Specialist Task Team Leader Gonzalez Flavell, Sara Special Assistant Holm-Nielsen, Niels B. Lead Disaster Risk Management Koteiche, Rima Abdul-Amir Senior Financial Management Specialist Le, Marie Ange Resource Management Analyst Le Tourneur, Candice NA Licciardi, Guido Urban Development Specialist ICR Team Leader Lipman, Barbara Senior Urban Development Specialist Malkawi, Fuad Senior Urban Development Specialist 52

63 Makaroun Bou Assaf, Yasmine NA Menon Parameswaran, Program Leader Balakrishna Mazahreh, Jad Raji Senior Financial Management Specialist Masanque, Josephine NA Nickerson, Joanne S. Operations Officer Nitti, Rosanna Senior Urban Development Specialist Task Team Leader Opsal, Knut Lead Social Development Specialist Raghunath, Madhu Senior Urban Specialist Task Team Leader Reliquet, Chantal Senior Urban Development Specialist Task Team Leader Riachi, Fadi Consultant Robotham, Kingsley O. Consultant Salah, Hana NA Shaqour, Ghada Abdel Rahman Consultant Sommer, Yarissa Lyngdoh Urban Specialist Vijayaverl, Velaythampillai Senior Procurement Specialist Yideru, Azeb Program Assistant Ward, Christopher S. Consultant Zelaya, Mario Antonio Consultant Zijp, Willem Consultant (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY FY FY Total: Supervision/ICR FY FY FY FY FY FY FY FY FY Total:

64 Annex 6. Summary of Borrower's ICR and/or Comments on Draft ICR Prepared by Bashar Haddaden on behalf of MoTA, July 24, 2014 Executive Summary (Verbatim) 1. The objective of this assignment is to develop the project final report analysing project outputs vis-à-vis project design, outlining expected outcomes and benefits, and reporting on overall implementation. 2. The Cultural Heritage, Tourism and Urban Development Project (CHTDP) is Co-financed by the International Bank for Reconstruction and Development (IBRD) and the GoJ for USD 56 million and USD million respectively. The implemented activities under the CHTUDP extended over a period of seven years, from the approval date in January 30, 2007 up to the project scheduled closure date of March 31, The primary implementation responsibility of the CHTUDP resided with the Ministry of Tourism and Antiquities (MOTA)-particularly with its Technical Development Department (TDD). 3. The project has involved the revitalization of historic city centers, urban infrastructure improvements and cultural landscapes regeneration in and around the historic cores of five targeted cities: Ajloun, Jerash, Karak, Madaba and Salt, with the objective of promoting physical and economic development. Results indicators have shown that the Project Development Objectives were successfully achieved. 4. The actual implementation of the project s various components was only recently entirely completed which means that the project s inception is very recent. Most of the project restructured and planned activities were effectively implemented with a satisfactory disbursement level despite some delays and cost deviations. 5. The project restructuring and amendments to Loan agreement substantially affected the original scope of work, project design, and means of intervention. Nevertheless; the project represents a unique, unprecedented opportunity of practice demonstrating the local and governmental skill set, and abilities utilized in managing nation-wide multidisciplinary activities requiring complex coordination and strong synergy among stakeholders to deliver a successful sustainable model for tourism. It is unfortunate thought that the sustainability of this model might be hindered due to the probable loss of institutional memory shall the capacity of the PMs and CMUs deteriorate in the near future. Key Recommendations a) Assess the needed level of community participation in relation to the anticipated impacts on the community b) Utilize more staff members from the implementing and coordinating agencies and rely less on hiring c) Provide a more balanced distribution of activities beyond infrastructure and streamline with municipal urban and strategic plans d) Have a more area/ destination/ region concentrated intervention 54

65 Selected parts of the report 6. Components. While the original CHTUDP design consisted of four components, the finally revisited project components were reduced to two: Component 1, Revitalization of historic city centers, urban infrastructure improvements and cultural landscapes regeneration and Component 2 Capacity Building and Project Management. Components costs are summarized under (Annex 5: Summary of Project Costs). The implementation of Component 1, Revitalization of historic city centers, urban infrastructure improvements and cultural landscapes regeneration, was carried out through activities in and around the historic cores of the cities of Jerash, Karak, Madaba, Salt and Ajloun and has completed most of the included sub-components. The implementation of Component 2, Capacity building and project management [originally Component 4, renumbered Component 4 following project restructuring, note added by the ICR team], was completed and conducted through the Provision of Training to MoTA and municipal staff in developing an action plan for the operations and maintenance of the assets that are being developed as part of the CHTUD. 7. Compliance with safeguards and country legislation. Three safeguard policies were triggered by the CHTUD project. Environmental Assessment (OP/BP/GP 4.01), Cultural Property (OP 4.1 1) and Involuntary Resettlement IOPA3P 4.12), and in accordance with World Bank Operational Policy 4.01 (January 1998), this Project was rated a category B, with an anticipation that there will be Limited negative social and environmental impacts that are easily mitigated during the implementation of the rehabilitation and construction works. 8. Consequently, an Environmental Assessment (EA) was carried out by MoTA-TDD through a contract with specialized consultant. The EA process was participatory and has featured stakeholder workshops and meetings with municipal councils, business owners, residents, NGOs and special interest groups. 9. On Cultural Property, the project has been designed to ensure compliance with the Jordanian law for the protection and conservation of cultural property, which is also in compliance with Bank policy. Contracts included provisions for chance finds and the few cases which encountered remains of cultural heritage value, the Department of Antiquities intervened to verify the cultural integrity of the finds and recommended measures for the works which have been implemented accordingly. The contracts for restoration of historical buildings included in the project were also in compliance with the Jordanian laws and the Bank policy. The few minor issues identified during construction that triggered this policy have been corrected to maintain the integrity of the cultural property. 10. On Involuntary Resettlement, a project-wide Resettlement Policy Framework (RPF) and subsequent city-specific Resettlement Action Plans, has been prepared for the project as a whole, and site-specific Resettlement Action Plans (RAP) have been produced for the cities of Jerash, Karak and Salt. The Project Management Team and MoTA Senior Officials were diligent and committed to implementing the Abbreviated Resettlement Action Plan and the OP 4.12 was substantially complied with although a number of delays have been experienced. 11. [On community participation,] Community Liaison Officers (CLO) were appointed by each city including Ajloun to follow up with the project affected persons (PAP) and act as a conduit between concerned municipalities and affected communities. Nevertheless, for quite a long time 55

66 of the project s duration, it was noticed that none of these CLOs were full timers as originally planned except for Salt and Karak at a later stage. 12. Procurement. The Technical Development Department (TDD) at MoTA was the party responsible for procurement activities associated with the project and have had the main responsibility for the management of the procurement process. The overall procurement capacity of the implementing agency for handling the procurement and contracts management was adequate for the project purposes. According to the project design as per the PAD, the frequency of procurement supervision missions was determined at one every six months, with the first year requiring three missions to ensure proper implementation start-up as the majority of procurement packaging launch and processing. Since project initiation seven years ago, the total number of procurement plans should have reached around 28 versions by January/February It is difficult to assess the frequency of procurement plan updating out of the provided documents since the collected procurement plan files are not consistent in format, titles, file names, and distinctive dates. Nevertheless, reports and extracts of the procurement plans obtained from the available Aid Memoires were also revised and compared, where the procurement processing was found satisfactory. The Procurement and financial departments were closely coordinating allocation of budget and foreseen disbursements. The project maintained and monitored the procurement plan/cycle. 13. Monitoring and Evaluation. Based on the lessons learned from the Second Jordan Tourism Development project regarding the recognized lack of a structured M&E system built into the project design, the CHTUDP made a clear provision for the design and implementation of an integrated M&E system as part of the Capacity Strengthening of the implementing agency MOTA-TDD. Accordingly, Component 4 was designed to cover the costs of specialized consultancy services aimed at designing and managing the M&E system for the project over the five years of implementation. In particular, the project was to support the creation of an Integrated Monitoring and Evaluation system working at different levels (linking MoTA, the Municipalities and MoMA) and serving different monitoring purposes. The contract of the M&E consultant was terminated and the TDD became the party responsible for monitoring the projects indicators. While the failed consultancy has resulted in a considerable delay in the M&E schedule, a system was prepared to capture the progress of the project. The TDD team developed survey forms within an overall system to collect data on most of the indicators by engaging the city core management units and conducting sampling exercises. The M&E framework of the project underwent few changes along the project progress. This was partially in effect of project restructuring and the two amendments of the loan agreement in addition to better reflect project progress and comprehend the positive results achieved by the project. This is especially in terms of new and extended business activities in project areas as a result of the urban upgrading exercises successfully implemented. 14. Expected Project benefits. Results indicators have shown that the Project Development Objectives were successfully achieved. The actual implementation of the project s various components was only recently entirely completed which means that the project s inception has just started. 15. The eminent upgrades of the built environment for the targeted five cities underlines the fact that projected benefits are in line with the lifetime of the implemented infrastructure itself. It is well stated in (Throsby, May 2014) that the generation of benefits from the improvements in the historic cores of the target cities is just getting underway, and the possibility of measuring effects 56

67 in terms of increased outputs, incomes, employment and so on, is extremely problematical after such a short time period. 16. Predictions and analysis results of tourist numbers in the principle sites in each of the five cities indicate a generally positive impact on numbers, and it might be expected that these predictions will continue into the future. Indeed, it is highly probable that when the improvements in the target cities initiated by the project become integral in urban and social fabric, the rate of growth of tourist numbers might increase further. 17. Surveys of the major stakeholder groups in the two case-study cities businesses, tourist accommodations, cultural institutions, households and visitors show that the improvements these groups have are recognized in their commercial operations, experience of living, or visiting the historic core, but again it is likely that the best of these sorts of responses is yet to come. 18. The data assembled and analyses undertaken in the mentioned study have provided a solid basis for making a judgment as to the existing and potential benefits arising from the CHTUD project. It is clear that, although there has been some variation in outcomes between the different cities, the works undertaken have helped to break key constraints that were holding back tourism and community development in the target sites. 19. Therefore, the project can be judged as having been successful overall in laying a firm foundation for future growth in tourist numbers, incomes from tourism, and employment opportunities in the tourist industry. 20. At the same time the project has initiated both directly and indirectly an improvement in levels of cultural heritage conservation, and stimulated an awakening in the community s awareness of the importance of heritage in defining and celebrating the richness of Jordanian culture and identity. 21. Other future benefits the project would have is mostly related to the capacity building of the different stakeholders that were involved in carrying out project activities and the potential utilization of such knowledge in future applications, whether in the same-targeted cities or other destinations yet to be developed. 22. Performance of project implementation unit. As the overall implementing agency, MOTA and more specifically the TDD retained the most critical role in project implementation and determining of project success. In summary, MoTA is the party responsible for ensuring that the Project is delivered in accordance with its aims and objectives, at an acceptable quality, and on time and within budget. MoTA is also responsible for overseeing the work of the other agencies involved in the project, particularly the PMs, and for ensuring that Bank guidelines, including, inter alia: procurement, accounting, environment, and resettlement are met. In performing its duties during the course of project implementation, the overall performance of the project implementation unit (TDD) was satisfactory. 23. Performance of Central Entities. The Key Central entities involved in project implementation are the Ministry of Municipal Affairs, Ministry of Planning and International Cooperation, the Department of Antiquities, in addition to the Project Steering Committee (PSC) comprising the Secretary Generals or their nominees of MoTA, MoMA, MoPIC and DOA, as well as the Director of the Jordan Tourist Board (JTB). Despite the challenges and bureaucracies 57

68 faced during project implementation, the joint effort of the central entities was satisfactory. Their role was essential for supporting the project implementation and implementing agency. PSC could have been more effective and central to the coordination of efforts and expediting crossministerial procedures. 24. Performance of Local Governments and Peripheral Entities. The performance of PMs varied from a municipality to another ranging from satisfactory to highly satisfactory. As the PMs learning curve was progressing, their respective performance witnessed fluctuation across different project activities. Community partnership was the most problematic at certain project implementation stages; however, critical issues were resolved at last due to PMs distinguished efforts leading to a successful implementation of planned activities. 25. International Best Practices and Role of International Finance Institutions. International best practices were practically tailored to meet the local needs of the targeted cities, where they brought in expertise was employed in the preparation of project novel concepts and designs. Moreover, and during project implementation while issues and obstacles were arising, hands-on alternatives and solutions were profoundly proposed and discussed with the implementing agency and other stakeholders. 26. Bank performance. Throughout the project, the performance of the World Bank was satisfactory. There was continuous follow up by the project team and Bank related staff on the progress of implementation on all components and on financial, procurement and management matters. This ensured the mobilization of a multi-disciplinary team with international exposure very much needed to oversee project activities. Safeguard policies were diligently monitored and timely addressed as well. Lessons Learned and recommendations (Also see ICR paragraph 7: Comments on Issues Raised by Borrower/Implementing Agencies/Partners) 27. Project Successes a) The revised Project Development Objectives were successfully achieved b) Most of the project restructured and planned activities were effectively implemented with satisfactory disbursement level exceeding 85%. c) The project benefited local communities in target cities as well as visitors and tourists, where the estimated annual increase of tourism was 18 percent in tourist numbers (about 120 thousand tourists) accompanied with positive contribution to the local economic development in those cities. d) The project represents a unique, unprecedented opportunity of practice demonstrating the local and governmental skill set, and abilities utilized in managing nation-wide multidisciplinary activities requiring complex coordination and strong synergy among stakeholders. e) The project developmental program is considered a successful sustainable model for tourism and it has formed nuclei for further tourism-related activities in target cities and city cores that can be replicated and/or expanded. 28. Project Failures a) The project restructuring and amendments to Loan agreement substantially affected the original scope of work, project design, and means of intervention. PDOs were revised and 58

69 restated, project components and activities substantially downscaled. Out of four components, two were cancelled, Petra Gateway and Local Economic Development, while a considerable change altered the forth component (Capacity Building) limiting it to training. b) While the followed development model promotes sustainability, the weak Capacity Building in PMs and poor CMUs staffing might hinder the sustainability of operation and maintenance of the accomplished activities in city cores and cause losses and/or damages to the obtained institutional memory. c) The significant downsizing of project activities confined the previously comprehensive program of intervention to less diverse one almost limited to the built/physical environment. d) Community participation in the targeted cities presented a chronical resistance and dissatisfaction at least during the first half of project implementation period in most of the cases. This could be related to the adopted participation model which might not been suitable to the level of impact on the community. e) Actual Project cost exceeded Cost estimations by more than 160% and has therefore lead to cancellation of activities. Recommendations for Future Projects 29. Community Participation. For future tourism development projects/programs, it is recommended to conduct an assessment of the needed level of community participation in relation to the anticipated impacts on the community due to proposed project interventions. 30. Capacity Building and Maintaining the Institutional Memory. Although it is much easier to build up the full capacity of project related implementation and coordination units, by bringing in and hiring new staff members with relevant experience, nevertheless it has proven to be less sustainable on the medium and long term. Therefore, it is recommended to utilize more staff members from the implementing and coordinating agencies, such as MOTA and PMs, and rely less on imported qualified personnel. This shall also maintain and allow to the transfer of the institutional memory. 31. Comprehensive and diversified development model. It is recommended to increase the diversification of the tourism developmental projects by providing a more balanced distribution of activities beyond infrastructure components and the built environment. This can be done by initiating periodic tourism-related events, community training, LED component etc, where this shall expedite the generation of economic and tourism activities in city cores rather than wait for market forces. Works in city cores is recommended to be more hinged with the municipal direct needs and be well integrated with its future urban and strategic plans. 32. More Focused target areas/destinations. It is recommended to minimize diffusion, thus select a fewer number of included cities in future projects and have a more area/ destination/ region concentrated intervention. This shall consolidate efforts, require less resources and force irrefutable results. 59

70 Annex 7. Comments of Cofinanciers and Other Partners/Stakeholders Not applicable 60

71 Annex 8. List of Supporting Documents Project Appraisal Document, Loan Agreements, Agreements Document Title Date Remarks Project Appraisal Document, Report No: JO January 8, 2007 Loan Agreement, Loan No:7426-JO February 11, 2007 Project Restructuring Paper, Report No: JO June 22, 2011 Amendment to the Loan Agreement July 19, 2011 Amendment to the Loan Agreement March 26, 2013 Madaba Municipality Revitalization Pact July 23, 2006 Aide Memoires Mission Date Mission No./ Title Remarks November 2-7, November 7-12, September 18-29, January 19-21, November 19-23, April 7-11, May 14-16,2012 October 14-16, May 14-22, 2013 September/October 2013 November 3-4, 2013 November & December 2-3, 2013 January 26 February 4, 2014 CPPR Technical Mission Technical Report Implementation Support Mission Reports, Progress Reports, Studies and Evaluations, PP Report Date Report Reference Prepared by Remarks March 2009 Progress Report ''IV'' Missing June 1, 2010 Progress Report ''V'' Prepared by TDDMOTA Duplicate Report Name September 2011 Prepared by TDD- Duplicate Report Progress Report ''VI'' MOTA Name June 11, 2014 For the year ending Financial Statements Together with BDO December Independent Auditor's Report 31, 2013 May 2014 The Economic Impacts of World Bank Heritage Investments in Jordan M&E Report David Throsby and Ekaterina Petetskaya Macquarie University, Sydney Received from M&E Officer Includes Baseline Survey Results for Madaba and Karak 61

72 Monitoring and Evaluation table final Received from M&E Officer (March, June, Soft copy Versions of PPs November 2011, Received from Project October 2012, Manager March, September 2013) Karak Final Completion Report Eng. Shadi Qusus Contract W-1B001 Jerash Final Completion Report Dar Al-Omran & Technital Contract W-1A001 Salt Final Completion Report Dar Al-Omran & Technital Contract W-1D004-B 62

73 Annex 9. Map 63