Document of The World Bank Report No: ICR00001104 IMPLEMENTATION COMPLETION AND RESULTS REPORT (Grant No. TF052627) ON A TRUST FUND GRANT IN THE AMOUNT EQUIVALENT TO US$12.5 MILLION TO THE PALESTINIAN AUTHORITY FOR A WEST BANK AND GAZA EMERGENCY WATER PROJECT June 29, 2009 Sustainable Development Group Middle East and North Africa Region Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
Transcript
Document of The World Bank
Report No: ICR00001104
IMPLEMENTATION COMPLETION AND RESULTS REPORT (Grant No. TF052627)
ON A
TRUST FUND GRANT
IN THE AMOUNT EQUIVALENT TO US$12.5 MILLION
TO THE PALESTINIAN AUTHORITY
FOR A WEST BANK AND GAZA
EMERGENCY WATER PROJECT
June 29, 2009
Sustainable Development Group Middle East and North Africa Region
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CURRENCY EQUIVALENTS Currency Unit = New Israeli Shekel, Exchange Rate Effective March 7, 2009
NIS 1.00 = US$ 0.2356 US$ 1.00 = NIS 4.24
WEIGHTS AND MEASURES
1 meter (m) - 3.281 feet (ft), 1 kilometer (km) -- 0.621 miles (mi)
ABBREVIATIONS AND ACRONYMS DFID Department for International Development (UK) EHW#2 East Herodian Well #2 EIP Emergency Investment Program EMP Environmental Management Plan EMSRP Emergency Municipal Services Rehabilitation Project EQA Environmental Quality Authority ERP Emergency Response Program ESSP Emergency Services Support Project EWOC Emergency Water Operations Center EWP Emergency Water Project GDP Gross Domestic Product GNI Gross National Income ICB International Competitive Bidding IDA International Development Association JWC Joint Water Committee l/c/d Liter per capita per day MCM Million Cubic Meters MOF Ministry of Finance MNSSD Middle East and North Africa, Sustainable Development Group NCB National Competitive Bidding NGO Non-Governmental Organization OP Operational Policies PA Palestinian Authority PLO Palestinian Liberation Organization PMU Project Management Unit PWA Palestinian Water Authority SAWSIP Southern Area Water and Sanitation Improvement Project TFGWB Trust Fund for Gaza and West Bank USAID United States Agency for International Development VAT Value Added Tax WBG West Bank and Gaza WSSP Water and Sanitation Services Project
Vice President: Daniela Gressani
Country Director: A. David Craig
Sector Manager: Narasimham Vijay Jagannathan
Project Team Leader: Sana Kh. H. Agha Nimer
ICR Team Leader: Pier Francesco Mantovani
WEST BANK AND GAZA EMERGENCY WATER PROJECT
IMPLEMENTATION COMPLETION AND RESULTS REPORT (Grant No. TF052627)
CONTENTS
Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph
1. Project Context, Development Objectives and Design ...............................................2. Key Factors Affecting Implementation and Outcomes ...............................................3. Assessment of Outcomes .......................................................................................... 14. Assessment of Risk to Development Outcome ......................................................... 15. Assessment of Bank and Borrower Performance ..................................................... 16. Lessons Learned ........................................................................................................ 1 Annexes Annex 1. Project Costs and Financing .......................................................................... 1Annex 2. Outputs by Component .................................................................................. 1Annex 3. Economic and Financial Analysis ................................................................. 1Annex 4. Bank Lending and Implementation Support/Supervision Processes ............. 2Annex 5. Beneficiary Survey Results ........................................................................... 2Annex 6. Stakeholder Workshop Report and Results ................................................... 2Annex 7. Borrower Evaluation Report ......................................................................... 2Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 3Annex 9. List of Supporting Documents ...................................................................... 3Map ............................................................................................................................... 3
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A. Basic Information
Country: West Bank and Gaza Project Name: Emergency Water Project
Project ID: P065921 L/C/TF Number(s): TF-52627
ICR Date: 06/29/2009 ICR Type: Core ICR
Lending Instrument: ERL Borrower: PLO FOR THE BENEFIT OF PA
Original Total Commitment:
USD 12.5M Disbursed Amount: USD 10.4M
Environmental Category: B
Implementing Agencies: Palestinian Water Authority
Cofinanciers and Other External Partners: B. Key Dates
Process Date Process Original Date Revised / Actual
Project Team Leader: Pier Francesco Mantovani Suhail J. S. Jme'An
ICR Team Leader: Pier Francesco Mantovani
ICR Primary Author: Sati Achath F. Results Framework Analysis
Project Development Objectives (from Project Appraisal Document) The main objective of the project is to help alleviate the chronic shortages of safe water supplies, and reduce system losses, water costs and health risks. Revised Project Development Objectives (as approved by original approving authority)
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(a) PDO Indicator(s)
Indicator Baseline Value
Original Target Values (from
approval documents)
Formally Revised Target Values
Actual Value Achieved at
Completion or Target Years
Indicator 1 : Increase the quantity of water by 1.7 mcm
Value quantitative or Qualitative)
1.7mcm increased in water quantity
Goal was not effectively nor fully achieved at project closure. Goal was achieved in mid-2009 as PWA secured and installed a new pump in HEW#2, and started operation of above-ground facilities completed by project.
Date achieved 09/30/2007 09/28/2008 Comments (incl. % achievement)
Works are substantially completed towards achieving this goal, but pump misprocurement has delayed actual delivery of service beyond project closure. Suggested achievement : 50%
(b) Intermediate Outcome Indicator(s)
Indicator Baseline Value
Original Target Values (from
approval documents)
Formally Revised
Target Values
Actual Value Achieved at
Completion or Target Years
Indicator 1 : Number of house connection rehabilitated
Value (quantitative or Qualitative)
300 House connections in Kharas and 200 House connections in Nuba rehabilitated
450 and 400 house connections have been rehabilitated respectively in Kharas and Nuba
Date achieved 09/30/2007 05/28/2008 Comments (incl. % achievement)
Connection rehabilitation goal was susbstantially exceeded. Achievement: 170%
Indicator 2 : Number of new house connections installed
Value 200 new House 150 and 300 new
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(quantitative or Qualitative)
connections in both Kharas and Nuba
connecetions are installed in Kharas and Nuba respectively
Date achieved 09/30/2007 05/28/2008 Comments (incl. % achievement)
New connection development goal was exceeded. Achievement: 112%
Indicator 3 : Length of new water pipes laid and exsiting pipes rehabilitated (km)
Value (quantitative or Qualitative)
90.5 km of water pipes installed and rehabilitated
85 km of pipelines were laid: EH2 pipeline is complete (7.5km); Halhul Kharas Nuba pipelines are complete (12.5km). Networks in Kharas and Nuba (33.6 km and 31.2 km resp.) are complete. Total of 85 km.
Date achieved 09/30/2007 05/28/2008 Comments (incl. % achievement)
Pipes laid and/or rehabilitated goal was attained. Achievement: 94%
Indicator 4 : Packages for Yatta & Dura identified and detailed engineering designs
Value (quantitative or Qualitative)
Detailed engineering Design and Tender Documents completed for both Yatta and Dura villages.
Detailed engineering Design and Tender Documents for Yatta and Dura villages completed
Date achieved 09/30/2007 05/28/2008 Comments (incl. % achievement)
Design and Tender documents delivered. Achievement: 100%
1. Project Context, Development Objectives and Design (this section is descriptive, taken from other documents, e.g., PAD/ISR, not evaluative)
1.1 Context at Appraisal (brief summary of country and sector background, rationale for Bank assistance) Country and Sector Background: At appraisal in May 2003, years of protracted and often-violent conflict had devastated the economy of the West Bank and Gaza (WBG) and caused tremendous social and economic hardship. The economy had shrunk by half, with Gross National Income (GNI) losses exceeding US$5.4 billion - the equivalent of one year of wealth creation. Real private Gross Domestic Product (GDP - measured at factor cost) had declined by almost 30 percent. The movement of people and goods were severely restricted both internally and between the Palestinians and Israeli areas. Unemployment had increased from 10 percent of the labor force in the third quarter of 2000 to about 42 percent at the end of September 2002. About 60 percent of households had lost more than half of their income, and the number of poor had tripled to more than 2 million, about 60 percent of the total population. In addition, the poor were getting poorer, with average daily consumption slipping from US$1.47 to US$1.32. The incidence of acute malnutrition among children had increased to 13.3 percent in Gaza, and families had been forced to liquidate their savings, accumulate debt, and resort to family and/or other social networks as a way to cope with the crisis. The crisis had also resulted in serious damage to infrastructure and institutions in the WBG. The impact had been particularly severe on roads, electricity services, public facilities, housing, and there had also been serious damage to activity and household income, and the resulting inability and/or unwillingness of citizens and businesses to pay for essential services, municipal revenues had declined sharply, in some cases by as much as 50 percent, worsening the capacity of municipalities and villages to handle the situation. Supplies and spare parts had also been depleted, and access to networks to undertake essential maintenance and repairs had been curtailed by extensive Israeli military blockades, closures and curfews. As a result, roads, waterlines and sewers had gone un-repaired for long periods of time, and in many municipalities the streets were strewn with garbage, posing a challenge to public health. In addition, supply of water by tankers had been severely restricted due to difficulties caused by frequent closures and checkpoint delays. Thus, the availability of safe and reliable supply of water had decreased significantly in many towns and villages. Large portions of the population had been without water for extended periods, and the already low levels of household water consumption had plummeted. Health risks had also increased because of failed wastewater and chlorination systems. The above had taken a particular toll on the water and sanitation sector, and significantly increased water insecurity: People were much poorer; many had no cash income since September 2000, making the purchase of water from vendors increasingly difficult. It was also very difficult to obtain credit from vendors or through social connections. As a result of closures and other movement restrictions, the cost of tanker transport had increased, making water more expensive and putting additional economic burden on households. Data gathered in the field suggested that the price of water supplied by tanker had increased five-fold in many villages in the southern West Bank, from about NIS 4 (US$0.88) to NIS 20 per cubic meter. Waiting times for services were much longer, and water supply was erratic. During the summer season, the period of very severe water restriction had increased from 2-3 months to about 5-6 months.
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Water supply provided to many municipalities and villages from Israeli sources was increasingly erratic, due largely to discretionary and unpredictable Israeli rationing and lock-offs. People in the smaller municipalities and villages were increasingly resorting to water sources not fit for human consumption, with typically dirty or infested cisterns used for watering livestock. Rationale for Bank assistance: The Bank had considerable global experience in designing and implementing operations in response to natural disasters and emergencies arising in conflict-affected settings. The number of Bank-supported emergency recovery projects had increased in the last several years, and the Bank had come a long way in its own understanding of how to operationalize sustainable interventions in emergency situations. In WBG in particular, the Bank was often relied upon by the PA and donors to lead such efforts, and had done so successfully. For example:
The first three operations implemented by the Bank in WBG were all emergency in nature and benefited from simplicity in design, while contributing toward the establishment of Palestinian implementation capacity, given its absence at the outset.
The Bank had already demonstrated an ability to respond rapidly and effectively to the
current crisis in WBG through it s US$12 million contribution to the Emergency Response Program (ERSP), launched in December 2000 - only two months after the start of the second Intifada - in which the Bank and five other donors provided over US$37 million to create temporary employment opportunities through small-scale infrastructure micro-projects.
The Bank’s ability to mobilize resources and contribute by providing a framework for
other donor assistance was illustrated by the Emergency Services Support Project (ESSP), which had mobilized over US$45 million in donor co-financing.
1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) The main objective of the project was to help alleviate the chronic shortages of safe water supplies, and reduce system losses, water costs and health risks. Key Outcome Indicator was:
Increase in quantity of water supplied (MCM). Key Output Indicators were:
Number of new household connections Number of household connections rehabilitated Length of water pipelines installed and rehabilitated (km) Identified packages were tendered and completed satisfactorily in accordance to the
project plan. Engineering designs and bidding documents for the Dura and Yatta villages were
satisfactorily completed.
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1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification The objective was not revised.
1.4 Main Beneficiaries, The beneficiaries of the project were the estimated 90,000 people in the Western Hebron villages who would receive improved water supply. This would translate into improved health and hygiene through higher quantities and better quality of water and reduced expenditures for buying water from water vendors.
1.5 Original Components (as approved) The project consisted of two components as follows: Component 1. Rehabilitation and Improvement of Water Supply Transmission and Distribution System (US$ll.4 million) The activities included:
East Herodian Well Equipment and Transmission Pipeline (US$4.5 million).This sub-component financed: a) the supply and installation of electromechanical works for the existing East Herodian water well number two (EH#2), including well pump, booster pump and accessories, at an estimated cost of US$2.0 million; and b) the supply and installation of about 7.5 km of 16-inches diameter ductile iron water transmission pipeline to convey the water from EH#2 to the existing main north-south carrier at an estimated cost of US$2.5 million.
HalhoulKharasINuba Transmission Pipeline (US$4.4 million).This sub-component financed the installation of about 15km of 6 to 16-inch diameter ductile iron water transmission pipeline from the existing Halhoul regional water reservoir (capacity 25,000m3, financed by USAID) to Kharas and Nuba villages.
Distribution Network Rehabilitation Package (US$2.5 million).This sub-component financed the rehabilitation of existing water networks in the villages of Kharas (about 34km of different diameter pipes) and Nuba (about 34km of different diameter pipes). Component 2: Technical Assistance (US$2.0 million): This component included: (i) strengthening of the existing PMU within PWA to enable it to effectively supervise project execution, and collaborate with other donors in the creation of a framework for the development of joint services council clusters, that would be responsible for operating and maintaining retail water distribution throughout the project area; (ii) the preparation of designs and bidding documents for the Dura and Yatta villages’ distribution networks for implementation under a proposed follow-on project; and (iii) PMU’s incremental operating costs.
1.6 Revised Components The revisions to the components included the rehabilitation of Beit Ula network and the construction of the main power cables to the EH well#2. The project also funded the construction
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of the Kharas reservoir with a storage capacity of 1000 cm, and after it was completed, it is now part of the integral system of Kharas-Nuba-Beit Ula water works.
1.7 Other significant changes (in design, scope and scale, implementation arrangements and schedule, and funding allocations) Aside form the above component adaptation, there were no changes in the project’s design and implementation arrangements. However, there were changes in the project’s schedule and funding allocation: Project Schedule was revised three times. The closing date was extended first by one year from June 30, 2006 to June 30, 2007, due to delays in effectiveness and it was extended for a second time for a period of three months (through September 30, 2007). Both extensions were done to accommodate the delays caused by the ongoing security situation. The third extension was for one year from September 30, 2007 to September 30, 2008, due to the prevailing difficult security conditions and delays in delivery of materials and equipment. This extension was particulalrly needed for the completion of the construction of East Herodian 2 well and pumping station (EH2). A grace period closure extension was also granted from Jan 31, 2009 through March 31, 2009. Funding allocations. During implementation, the Grant Agreement of $12.5 million was revised two times to reallocate funds among expenditure categories. The reallocations are shown in the table below. The first reallocation was done to increase the allocation under Category 1 to meet expenditures for civil works, and the second reallocation was done to increase the allocation for consultant services and audit cost (Category 3) and incremental operating costs (Category 4). With a grace period extension ending on March 31, 2009, a final reallocation requested by the Borrower on March 22, 2009 to “facilitate the closing of the project” was not processed.
Category Original Allocation
(USD)
Reallocation –October 2006
(USD)
Reallocation –March 2007
(USD)
(1) Civil Works 3,790,000 8,160,000 8,160,000
(2) Goods 5,860,000 3,400,000 3,440,000
(3) Consultant’ services and
audit cost
1,630,000 700,000 800,000
(4) Incremental Operating
Costs
90,000 40,000 100,000
(5) Unallocated 1,130,000 200,000 0
Total 12,500,000 12,500,000 12,500,000
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2. Key Factors Affecting Implementation and Outcomes
2.1 Project Preparation, Design and Quality at Entry (including whether lessons of earlier operations were taken into account, risks and their mitigations identified, and adequacy of participatory processes, as applicable) During preparation, the project design took into account lessons learned from emergency operations in WBG supported by the Bank. Likewise, the design considered the risk factors and appropriate measures were adopted to mitigate all major risks identified at appraisal. The project preparation and implementation benefitted from a participatory framework involving beneficiary communities, operators, PWA and other donors (including USAID, AFD, FINNIDA) in decision-making and cooperation towards i) improving water service at the local level, and ii) promoting sustainable water operations at a regional scale. Within such framework, the project was conceived as a building block towards an interconnected regional water supply system, itself the backbone of a Southern Region utility envisioned under PWA’s sector reform plans. The design only included technically straightforward components, well matched to achieve the PDO. In hindsight, the procurement plan of this emergency operation might have considered avoiding time-consuming international competitive bidding (ICB) for equipment, when, under OP/BP 8.00 national emergency procurement procedures, if available, were allowable. Lessons of earlier operations taken into account.
An important lesson learned related to decentralization of project preparation and
implementation, which greatly facilitated implementation at a time when central systems were unable to function effectively because of the security situation. Decentralization had worked well in all of the Bank-supported emergency projects in WBG.
Water was at the time one of the few sectors in WBG where dialogue mechanisms were
still in place between Palestinian and Israeli administrations. Considerable donor involvement was facilitating the dialogue between the parties, towards a shared interest in better management of scarce water, and mitigation of the health risks of failing service.
The Joint Water Committee (JWC) of Palestinian and Israeli administrations for planning
and permitting issues had to be mandatorily consulted to sort out project needs and to secure special access permits for contractors and consultants to facilitate the movement of equipment and workers.
Contingency plans had to be developed to deal with crises and blockages that might arise. Risks and their mitigation.
It was predicted that the project would face risks associated with the volatile political and security situation, in particular if closures and curfews remained in place for an indefinite period. This risk was widely acknowledged by the donor community and was addressed in part through the Task Force on Implementation. The mobilization in the Task Force of major donors involved in developing Southern Region water systems, proved effective in alleviating such project risks. The following specific risks were identified along with measures to mitigate their impact:
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Low Well Yield. There was a risk of the EH#2 well yielding less than the necessary 200
cubic meters per hour (CMPH) of water of acceptable quality. Test results had confirmed that the required quantity and quality of water was obtainable from the well.
Procurement: To further minimize potential risks during the implementation phase, the
contracting would be done separately for equipping the EH#2 well, the goods needed for the two pipelines, the works related to the installation of the pipelines, and the rehabilitation works for the villages of Kharas and Nuba. The equipping of the EH#2 well and goods would be tendered and awarded using International Competitive Bidding (ICB) procedures, using the standard bidding documents for supply and installation of equipment, as well as the standard bid evaluation report for goods and works. PWA would be assisted by an international consulting firm in preparing these documents in accordance with Bank procurement guidelines. National Competitive Bidding (NCB) procedures would be used for the installation of the pipelines and rehabilitation of the village networks. The risks of increased complexity of supervision associated with this approach were mitigated by the employment of an experienced, internationally recruited construction manager.
Delays in finalizing bidding documents: PWA would prepare the bidding documents in
accordance with the World Bank procurement guidelines.
Israeli Permissions: PWA had secured written confirmation from the Joint Water Committee and the Israeli authorities indicating their willingness to facilitate the movement of the contractors and goods to and from the project sites.
Project Management: Although the PMU was competent, it also had many other
responsibilities. Thus, further local technical expertise (project manager and procurement specialist) and an internationally recruited construction manager would be employed under the project to help oversee progress and manage the procurement issues that could arise.
Donor Coordination: The project was part of a wider program of relief and improvement
for the southern West Bank, and had been developed in coordination with other donors, who were expected to be working in parallel. Delays in the implementation of other donor-financed components were a risk that was mitigated by the project's freestanding design.
In hindsight, despite such risk mitigation, the Project featured an unusual level of difficulty due to the highly disruptive security context and to the governance and capacity limitations of the Borrower, which could have prompted added Bank local supervision presence and handholding.
2.2 Implementation (including any project changes/restructuring, mid-term review, Project at Risk status, and actions taken, as applicable) There was a delay of seven months for the project to become effective. This delay was caused by several factors such as: (i) the time taken for completing the project documentation, receiving the legal opinion, and sorting out procedural issues on the part of the PA; (ii) disagreements between
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the PWA and the U.S. consulting firm on the project design and other technical aspects; and (iii) the delay in tendering different packages on the part of PWA. The project was not restructured. The Bank conducted a Midterm Review (MTR) in March 2006, to evaluate the project performance towards meeting its development objectives. The MTR covered the following main topics: (a) reassessment of the project’s original development objectives; and (b) review of the implementation progress to date. Procurement performance ad options to accelerate project implementation were assessed. No single issue was identified requiring project restructuring or project design changes. Factors outside government or implementation agency control
The project implementation was delayed due to difficult security conditions and delays in getting Israeli Defense Force (IDF) clearance for electrical connections and the finalization of the well pump. Also, the change in local politics and establishment of a Hamas government has complicated the works with the boycotting from the Israeli and international community to the activities. The change in the political scene had led to the boycotting of the US pump manufacturer to the EH well #2 project, and led to confusion regarding the replacement of the source with an alternate equivalent source.
Factors subject to government or implementation agency control
(i) Construction of EH2 Transmission Pipeline experienced initial delays for the following reasons: (i) the design alignment of the pipeline was changed in certain locations according to instructions from the Israeli authorities to avoid the entrance of an Israeli settlement in the area. Such changes led to an increase in the cost of the construction especially with the Israeli demand to make encasements on parts of the transmission line; and (ii) sub-standard quality of initial detailed shop drawing was submitted by the contractor. (ii) Project outcome was severely affected by the because of the Misprocurement declared by the Bank in September 2008 on the Contract for the supply and construction of East Herodian Well No. 2 Pumping Station. The background for misprocurement is as follows:
In June 2007, the PWA found that there were major discrepancies between the information submitted by the Contractor for the furnished submersible pumps and the technical specifications for these pumps, which were part of the Contract. Further testing by an independent third party in November 2007, which was initiated at PWA’s request, confirmed that these pumps were unacceptable and lacked proper certification from the manufacturer concerning the test results provided by the Contractor. Finally, on February 20, 2008, in a letter to PWA the Bank declared the cost of the pumps as an ineligible expenditure and requested a refund of payments made for them. The PWA had instructed the Contractor in March 2008 to replace the previously furnished pumps with new pumps that would meet the technical specifications. According to information received from the PWA, the Contractor seemed to be agreeable to the PWA’s request at first. However, even seven months after the PWA made its request, the Contractor had neither replaced the pumps, nor had the PWA exercised due diligence invoking in due time the PWA’s contractual rights and remedies vis-a-vis the Contractor. This had raised serious concerns about the achievement of the project objectives set out in the TFGA to alleviate chronic shortages
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of safe water supply. Finally the PWA issued the termination notice to the Contractor on September 17, 2008; but the view of the Bank was that, this action was not exercised in due and timely manner as required of the PWA under the Contract. Based on the above findings, the Bank concluded that, according to the General Conditions applicable to the TFGA, the procurement of the Contract financed out of the proceeds of the Grant was inconsistent with the procedures set forth or referred to in the TFGA and decided to cancel the equivalent of US$3,116,903.14 (the value of the Contract), as of September 26, 2008, from Schedule 1 to the TFGA Since US$1,847,333.34 had already been withdrawn against this Contract, the PWA was requested to refund the said amount no later than December 31, 2008. The grace period for grant closure was later extended to March 31, 2009. On March 27, 2009, a letter was received from the Palestinian Authority asking for an additional extension through June 30, 2009. As of June 16, 2009 such reimbursement has not been recorded. The Bank’s Integrity Vice Presidency (INT) also conducted missions in regards to the East Herodian well contract issues. These investigations led to close collaboration with the MNACS, country and sector management teams in engagement with the clients between 2007 and 2008 when the project was closed after declaring misprocurement. However, no final report has been issued by INT as yet.
2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization M&E design. The project’s Outcome and Output Indicators were vaguely defined and did not have specific targets on these indicators. In addition, while the objective of the project was to reduce system losses, water costs and health risks, no indicators were included in the design to measure or calculate the achievement of these goals at the end of the project. Further, no baseline values were available at the beginning of the project. M&E implementation. PWA was regularly collecting data on the output indicators such as the number of new household connections, number of household connections rehabilitated, and length of water pipelines installed and rehabilitated. The Bank’s task team also followed up with the PMU on a constant basis. These data were closely monitored and the actual figures were compared with the target values. M&E utilization. Appropriate data collected from PWA was evaluated and used to inform decision-making on certain activities. For example, reallocation of funds between categories was done based on this data on networks, reservoirs etc.
2.4 Safeguard and Fiduciary Compliance (focusing on issues and their resolution, as applicable) Financial Management Review. The FM performance is rated "Moderately Unsatisfactory". The financial management system including accounting, auditing and reporting was adequate and consistent with the Bank’s financial management requirements. However, there is weakness in the internal controls, which is attributed to the lack of segregation of duties, where the accounting and procurement functions are handled by the same person. In addition, the Financial Procedures Manual was not completed for this Project, which is necessary to provide clear guidance to staff on their duties and responsibilities and establish some internal controls in the process. All FMRs including the financial audit reports and Management letters were submitted in a timely fashion,
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with the exception of the 2008 audit report still pending as of June 2009, and found to be satisfactory, in spite of the shortcomings described. The opinions rendered by the auditors to the project’s financial statements were “unqualified”. Despite performance generally considered moderately satisfactory through implementation, , delays experienced since closure to recover Designated Account balance justify an overall “Moderately Unsatisfactory” FM rating. As of June 16, 2009, the outstanding DA balance is GBP 51,549. Project implementation and the project’s outcome are at risk with the "mis-procurement case on the contract for the supply and construction of East Herodian Well No. 2 Pumping Station." On February 20, 2008, in a letter to the PWA, the Bank declared the cost of the pumps as an ineligible expenditure and requested a refund of payments made for them. The value of the Contract is US$3,615,896.40. For procurement and other fiduciary issues, see discussion of Misprocurement in Section 2.2 There were no safeguard issues related to the implementation of the project.
2.5 Post-completion Operation/Next Phase (including transition arrangement to post-completion operation of investments financed by present operation, Operation & Maintenance arrangements, sustaining reforms and institutional capacity, and next phase/follow-up operation, if applicable) (a) Transition arrangements. After the project closure, PWA has transferred the distribution assets created under the project to the municipalities. The system is being put to fruition, as the municipalities have the needed technical, financial, and institutional capacity to manage it. Despite delays due to a court claim by the Contractor upheld through the spring of 2009, PWA has gained access to the EH2-Well facilities, procured and installed a replacement pump in the well, and transferred the operating production asset to West Bank Water Department (WBWD). The Joint Service Councils are responsible for the operation and maintenance. They may need additional help since the economic and political conditions do not favor ideally sustainable operations. However, the systems are in place and the JSC can sustain the works. On the other hand, the bulk transmission pipeline should be operated and maintained by the National Water Utility which is the transformed WBWD that has been operational since 1967.
(b) List of performance indicators. The same set of monitoring and evaluation indicators that were developed under the project will be used as part of the local governments’ regular operations. As sector regulator, PWA will further be collecting and analyzing, on an yearly basis, the information on services in the communities. (c) Suggested priority and optimum timing of any future impact evaluation. Well operations have reportedly started in May 2009. Currently, the well has been equipped with a new pump supplied by USAID. It will be important to make an evaluation after three years and see whether the quality and quantity of water has improved. (d) Sustaining reforms and institutional capacity. Since March 2008, new PWA leadership has engaged the agency on a path of governance reform, strategic realignment and capacity building. Implementation of recommendations of an “Audit of Projects and Operations” conducted in 2008 has begun, towards more efficient investment programs and operations. Governance and capacity
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weaknesses identified in a Bank-completed “Assessment of Restrictions on Palestinian Water Sector Development” have been fully acknowledged by PWA, and are beginning to be addressed under agency and sector restructuring strategies.
3. Assessment of Outcomes
3.1 Relevance of Objectives, Design and Implementation (to current country and global priorities, and Bank assistance strategy) The objective of the project to help alleviate the chronic shortages of safe water supplies, and reduce system losses, water costs and health risks was and is still very relevant for the targeted communities and for the Hebron governorate, considering that this region features the most serious and chronic shortages of clean water of the West Bank. Project design proved straightforward and the components, once in service, are assured to deliver more water and to reduce losses, costs and health risks. Despite the need to revise selected engineering documents for quality, the components are well suited to local implementation and operating capacities. The project is also consistent with the Bank's assistance strategy for Palestine.
3.2 Achievement of Project Development Objectives (including brief discussion of causal linkages between outputs and outcomes, with details on outputs in Annex 2) Moderately Unsatisfactory The project was rated satisfactory to moderately satisfactory throughout supervision. The project indeed succeeded in completing the following activities:
EH2 Transmission Pipeline: Installed 7.5 km of ductile iron pipe 16" (400 mm) diameter conveying water from the EH2 well to the existing main north-south bulk transmission line east of Beit Fajjar.
Halhul-Kharas-Nuba Transmission Pipeline: Installed about 12km of 12" - 16"
diameter ductile iron pipe from the existing Halhoul regional reservoir (which is supplied by various wells) to the western Hebron villages (Kharas Nuba villages). This will benefit approximately 34,000 persons.
Kharas Village Reservoir (Capacity 1,000m 3). This reservoir, which has been
constructed under the project, is an essential part of the main system serving the western area of Hebron governorate and benefiting approximately 12,000 persons.
Kharas Village Distribution Network. Installed 33.6 km HDPE internal distribution
pipes as well as 600 household connections. This will benefit approximately 7,300 persons.
Nuba Village Distribution Network. Installed 31.2 km HDPE internal distribution pipes
as well as 700 household connections. This package was completed in May 2007 and will benefit approximately 4,550 persons.
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Supply and Installation of Beit Ula Village Distribution Network. Installed about 11 km steel pipe of various diameters for Beit Ula. This will benefit approximately 9,600 persons.
Based on construction of such infrastructure outputs, supervision reported very high achievement levels (as high as 93% in September 2007), while the East Herodian Well #2 pump, essential to add water to the above network components, was still being installed. The last supervision mission reported moderately satisfactory progress and completion of project components, expecting resolution of contract issues surrounding the delivery and installation of the proper pump. Such issues could not however be resolved in a timely manner, and by project closure, had in fact led to declaration of Misprocurement as mentioned in Section 2.2. At closure in Septemner 2008, with the pump installation left incomplete, the project had very substantially expanded and improved the water supply and distribution infrastructure of the beneficiary communities but paradoxically fell short of actually contributing increased quantity and quality of water supply in the expanded service areas. Such outcome was only achieved after project closure in May 2009, after PWA was able to install and procure a new pump through other fundings resources, fulfilling the scope of the misprocured contract. At closure nevertheless, by rehabilitating and constructing the distribution networks in Kharas, Nuba and Beit Ula, in addition to the construction of the Kharas reservoir as mentioned above, duly connected to pre-existing inadequate water supply sources, the project had already facilitated reductions in Unaccounted For Water (UFW), thereby de facto increasing the water supply. In addition:
With the new networks, and despite the inadequate availability of pre-existing sources of water, PWA is able to reduce its maintenance cost and provide better services to the residents, who in return, should feel more encouraged to pay their water bills. An agreement is in place between the West Bank Water Department (WBWD) and the communities that have been served, to schedule the accumulated debts as well as to pay current invoices. This strategy would help in collecting the water bills from the inhabitants.
As residents are bound to getting more water from the pipelines, they do not have to buy
water from vendors, and this reduces their expenses for getting water. While water tanker vendors used to sell 8 m3 of water for NIS120, the utilities are selling potable water at a price of NIS 5 per m3.
Also, as chlorinated water reaches houses, the chances of spreading water-borne diseases
are reduced considerably. It should be noted that water that is pumped through the water systems is chlorinated, and the PWA samples the different sources regularly.
On the whole, at closure, the project could not contribute significantly to the main objective of alleviating the chronic shortages of safe water supplies. Although such outcome has reportedly been attained since closure, the ICR team is of the view that a Moderately Unsatisfactory rating unavoidably and reasonably applies to the conditions at closure.
3.3 Efficiency (Net Present Value/Economic Rate of Return, cost effectiveness, e.g., unit rate norms, least cost, and comparisons; and Financial Rate of Return)
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Prepared under emergency recovery assistance procedures (OP 8.50) the project was faced with limited time and data for detailed efficiency analyses. Preliminary economic rate of return estimates were advanced ranging between 10 and 21% with no derivation backup information. Ex-post efficiency analysis was not deemed relevant at closure, since with “no water in the pipes”, project benefits could not be quantified.
3.4 Justification of Overall Outcome Rating (combining relevance, achievement of PDOs, and efficiency) Rating: Moderately Unsatisfactory While the project substantially expanded and upgraded water supply infrastructure in the target areas, misprocurement disrupted the installation of a crucial pump, preventing any alleviation of water shortages by the time the project closed. The expected project outcome has been achieved since, with a post-project pump installation by PWA. In light of this, and of the discussion given in Sections 3.1 and 3.2, the overall outcome at closure is rated as Moderately Unsatisfactory.
3.5 Overarching Themes, Other Outcomes and Impacts (if any, where not previously covered or to amplify discussion above) (a) Poverty Impacts, Gender Aspects, and Social Development No information available. No substantial impacts at closure. (b) Institutional Change/Strengthening (particularly with reference to impacts on longer-term capacity and institutional development) The project was implemented in parallel with other programs and projects in the Southern Area of the West Bank. Accordingly, the EWP is seen as a project that complemented other programs and projects that aim at restructuring and reforming the water sector. It should be noted that the targeted areas; Kharas, Nuba and Beit Ula, are part of the Joint Service Council cluster that was formed with the purpose of improving the services to the communities. The establishment of the JSC is only one step in the strategic objective of the PWA to establish Regional Utilities.
(c) Other Unintended Outcomes and Impacts (positive or negative) None
3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops (optional for Core ICR, required for ILI, details in annexes)
4. Assessment of Risk to Development Outcome Ratings: Moderate The transmission pipelines, household connections, and the Kharas Village Reservoir constructed under the project are already transferred to relevant operators, deemed sustainable in the context
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of the Palestinian water sector. Since the East Herodian Well has started operations after project closure, it can be assumed that it is fully functioning and substantially increasing water deliveries, thereby lowering the development outcome risk to low or negligible levels.
5. Assessment of Bank and Borrower Performance (relating to design, implementation and outcome issues)
5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry (i.e., performance through lending phase) Rating: Moderately Satisfactory The project objective was consistent with the Bank’s assistance strategy for the WBG, and the government priorities and met the critical needs of the water sector. During preparation and appraisal, the Bank took into account the adequacy of project design and all major relevant aspects, such as technical, financial, economic, and institutional, including procurement and financial management. In addition, major risk factors and the lessons learned from emergency operations in WBG supported by the Bank were considered and incorporated into the project design. To this extent, the Bank performance was satisfactory. On the other hand, the project design presented a major drawback in terms of key performance indicators. For example, while the objective of the project was to reduce system losses, water costs and health risks, no indicators were included in the design to measure or calculate the achievement of these goals at the end of the project. In the absence of these relevant indicators and without a baseline data, it is impossible to come to a conclusion on the success or failure of the project. While it is understood that preparation of an emergency project in a post-conflict area is bound to encounter a dearth of baseline data and monitoring capacity, in light of this major shortcoming the overall quality at entry is rated moderately satisfactory. (b) Quality of Supervision (including of fiduciary and safeguards policies) Rating: Moderately Satisfactory. Overall Bank performance during the implementation of the project was moderately satisfactory. The task team focused on the project’s development impact. The project was adequately supervised and closely monitored. In addition to the headquarters-based TTL, project supervision benefitted from West Bank-based fiduciary specialists accessible to the client. The task team regularly prepared Aide-Memoires, alerted the Government and PWA about issues found during project execution. The Implementation Status Reports (ISRs) realistically rated the performance of the project both in terms of achievement of development objectives and project implementation, although missing the eventual gravity of the EHW#2 pump procurement delays. Supervision duly rated achievement assessment highly (93% in 2007) based on infrastructure completion, the ultimate failure to install EHW#2 pump unraveling at the end of the project under unpredictable circumstances. Bank’s procurement and financial management proficient staff worked with PMU staff to explain the rules and procedures to be applied during project implementation, with regard to procurement
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of goods and works, and selection of consultants, accounts and audits, based on the Grant Agreement. In the client’s opinion, the Bank supervision role could have been more responsive to and supportive of PMU needs. The task team carried out a Mid-Term Review in March 2006 to evaluate the project performance towards meeting its development objectives. An opportunity was then missed improve the consistency of PDO and monitoring indicators. The task team also effectively monitored safeguard and fiduciary compliances, and vigorously upheld Bank’s technical and fiduciary standards when needed. The assessment of complex EHW#2 issues also benefitted from effective teamwork across Bank units. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory. Based on the Bank performance during lending phase and supervision as discussed above, the overall Bank Performance is rated as Moderately Satisfactory.
5.2 Borrower Performance (a) Government Performance Rating: Moderately unsatisfactory. While generally satisfactory through project closure, the Government performance must be rated moderately unsatisfactory following the delays experienced beyond the grace period extension for the refund of grant balance from the Designated Account and of the amounts due under the misprocurement. It is acknowledged that overarching fiscal constraints may have contributed to the delays. The Government was however consistently committed to the project. Recognizing the increasing threat to public health, the increased economic burden on households, and the financial and operational constraints on municipalities and villages, in April 2002 the Palestinian Water Authority established the Emergency Water Operations Center (EWOC). This was done in close consultation with and strong support from the donor and nongovernmental organization (NGO) community. The purpose of the EWOC was to assist in responding to the growing humanitarian crisis through the prompt restoration of basic water and sanitation services in the West Bank. Appropriate levels of review and approval were usually in place; financial accountability and follow-up was observed, and expenditures were duly authorized before they were incurred; and documentation was maintained properly for periodic review. The project did not suffer from any counterpart funding problems. The Government also acted proactively in recognizing the misprocurement situation and taking remedial governance measures. (b) Implementing Agency or Agencies Performance Rating: Moderately unsatisfactory The PWA’s performance was satisfactory in carrying out all aspects of project management, such as financial management, procurement arrangements, reporting activities, and disbursements, with the exception of the Misprocurement reported in Section 2.2 :
Financial Management Review. The financial management system including accounting, controls, auditing and reporting was adequate and satisfied the Bank’s financial management requirements. All FMRs reviewed were submitted on a timely basis and found to be satisfactory. The financial audit reports were all received on time, with the exception of 2008 statements still
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pending, and the opinions in the Management Letters were “unqualified” in regard to the project’s financial statements.
Procurement Arrangements. Procurement of all works, goods and technical services under the project followed the Procurement Guidelines “Procurement under IBRD Loans and IDA Credits”. However, there was an issue of Misprocurement. For details see Section 2.2
Reporting Arrangements. The PMU submitted all required quarterly and annual reports
more or less in a timely manner. These reports were informative, and provided valuable feedback on how the PWA was progressing covering all project activities. The status of performance indicators were incorporated in all progress reports and served as valuable input to Bank supervision mission reports. Limited proactivity in dealing with implementation issues, calling for the Bank’s task team to contact PWA management, combined with the issue of Misprocurement, would rate unsatisfactory. However, a moderately satisfactory rating is justified, in light of the organizational changes enacted by new PWA management since April 2008, and the high responsiveness demonstrated in adressing the misprocurement. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Unsatisfactory In light of the Government and PWA performance as discussed above, the overall performance of the Client was moderately unsatisfactory.
6. Lessons Learned (both project-specific and of wide general application)
Project Design:
The design of an emergency project should be simple in nature, so that it is easy to develop and implement, towards likely achievement of the developments objective(s). Within the constraints of an emergency project preparation, it is important to develop a monitoring framework consistent with DOs and to ensure that baseline data is available.
Project design should attempt to fully benefit from the simplifications afforded under OP/BP 8.00 for projects of emergency nature, including alternative procurement methods (e.g. national emergency procurement of selected goods, when available, in lieu of ICB).
Implementation:
It is critical to ensure that, despite prior borrowing and implementation experience with the World Bank, the management and staff of implementing agencies are indeed familiar and current with the Bank’s guidelines and procedures, as well as with project management procedures before starting the project. Need for capacity building or refresher training should be assessed, and possibly addressed, during
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preparation, even in emergency project preparation, to facilitate project implementation (general applicability).
In light of the EH Well #2 misprocurement, the implementing agency should be firm
and strict in ensuring that the bidders will comply with the specifications mentioned in the tender documents. It should also ensure that the bidders will mention any alterations to specifications in the bidding document. Agency should also reject such alterations, unless exceptionally and transparently justified. The delegation of works supervision to a private consultant funded by another donor may also be avoided in the future to avoid discontinuities and dilution in liability and accountability.
It is necessary, for future projects in the country to provide strong guidance and close
support to the PMU from the outset, during its set-up and throughout the project life, including implementation. It is equally important to maintain qualified staff who is critical to the efficient implementation of the project. The manual of procedures should be available to the accounting and financial management staff as soon as the PMU is set-up to provide guidelines and procedures on the accounting and FM system and ensure internal controls are in place. The Bank FMS should supervise the project closely, at least three times or more on the first year of implementation and at least twice a year thereafter.
When the project sites are located in high security areas, it is essential to guarantee
unimpeded/free access to the contractors working on the sites, so that construction/installation work will progress without any interruption. In the case of the West Bank, cultivating communications and partnership with Israeli civil administration is paramount.
Monitoring and Evaluation:
In order to determine the project’s outcome and measure the outputs, all the performance indicators related to the project’s objectives should be clearly defined at the beginning of the project itself. The project mid-term review should also then address opportunities to improve this framework, if needed through inclusion of a M&E specialist.
In conflict areas such as West Bank and Gaza, where availability of basic service data can be limited, beneficiary surveys should be carried out before and after project completion to enable measuring the impact of the project. Despite the emergency nature of a project, borrower and implementing agency should be sensitized to this need.
INT Engagement
An anonymous complaint received by INT regarding the East Herodian Well #2 pumping station started an investigation with strong coordination between INT and Operations. It led to a series of transformative events as well as to a declaration of misprocurement. Since recognizing misprocurement, new PWA leadership has engaged in efforts to improve sector and agency governance. In this process the client has however brought to the attention of the Bank its concern that the investigation conclusions have not been finalized or disclosed. Going forward, timely completion of investigative outputs and reports will enhance the impact and enactment of governance and anti-corruption remedies by clients.
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Community Participation
Closer involvement and participation of beneficiary households and communities during the design and implementation stages is important in a project such as EWP. This would ensure that there will be more accountability from the implementing agency and contractors regarding the quality of equipment installed under the project.
7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies A direct account of the Borrower’s experience is consigned in the Borrower Evaluation Report filed by PWA and attached as Annex 7 to this report. The following are Borrower’s comments to the draft ICR. PWA’s response ton Section 5.1 (b): In response to Section 5.1 the Borrower signals that due to time zone differences and disrupted phone service, communications were problematic for the Washington-stationed TTL, reportedly leading to delays in effective understanding of project difficulties. The Borrower also signals that Bank’s procurement specialists did not always provide the effective support especially in areas where Bank’s procurement guidelines contradict PA guidelines, holding PWA responsible to solve the conflicts between the Bank’s guidelines and the Ministry of Public Works guidelines. The Borrower retains that in such instances Bank support was inadequate. PWA’s response to Section 5.2 (b): The Borrower signals that alternative implementation and works supervision approaches were suggested by the PMU which may have facilitated satisfactory project outcomes, but were met by Bank insistence on completing the project as planned and on schedule. (b) Cofinanciers NA (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society)
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Annex 1. Project Costs and Financing
(a) Project Cost by Component (in US$ million equivalent) (Total rows and percentage column will be calculated by the system)
Components Appraisal Estimate
(US$ million) Actual /Latest Estimate
(US$ million) Percentage of
Appraisal
East Herodian Well Equipment and Transmission Pipeline
4.50 1.829 40.65%
Halhoul/Kharas/Nuba Transmission Pipeline
4.40 3.048 69.28%
Distribution Network Rehabilitation Backage
2.50 2.721 1.09%
Technical Assistance and Capacity Building
2.00 1.247 62.36%
Total Baseline Cost 13.40 8.845 65.91%
Physical Contingencies
Price Contingencies
Total Project Costs 13.40 8.845
65.91%
Project Preparation Facility (PPF)
Front-end fee (IBRD only)
Total Financing Required 13.40 8.845 65.91%
(b) Co-financing
(The appraisal estimate will be pre-populated from the Financing data in SAP/AUS; Percentage of Appraisal column will be calculated by the system)
Source of Funds Type of
Financing
Appraisal Estimate
(US$ million)
Actual/Latest Estimate
(US$ million)
Percentage of Appraisal
[Government] VAT Coverage 0.90 0.565 62.89%
[IBRD/IDA] Financing Investment
12.5 8.280 66.26%
[Donor A] [WB-administered TF]
[Donor B] [Parallel financing]
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Annex 2. Outputs by Component Component 1: Rehabilitation and Improvement of Water Supply and Distribution System. Component 1.1 East Herodian Well Equipment and Transmission Pipeline:-
- Supply and Construction of East Herodian Well No. 2 Pumping Station ( Considered as a miss procurement by the Bank )
- Installation of 7.5 Km Main Transmission Water Pipeline Component 1.2 Halhoul / Kharas / Nuba Transmission Pipe Line:-
- Construction of Halhoul Kharas Nuba Main Transmission Water Pipeline ( 11.211 Km, DIP )
- Construction of 1000m3 on Ground Water Reservoir for Kharas Village. Component 1.3. Distribution Network Rehabilitation Package:-
- Supply and Installation of Internal Water Network for Kharas Village - Supply and Installation of Internal Water Network for Nuba Village - Supply and Installation of Internal Water Network for Beit Ula Village.
Component 2: Technical Assistance and Capacity Building. Component 2.1 Project Management Unit Capacity Building This item budget enabled the PMU to give training and advice to the service councils that were responsible for operating of the water system through the project area. Component 2.2 Technical Assistance for the PMU This item financed hiring of consultants who supervised implementing the project according to the specifications, preparing the designs and bidding documents for Dura and Yatta villages.
Annex 3. Economic and Financial Analysis (including assumptions in the analysis)
N/A
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Annex 4. Bank Lending and Implementation Support/Supervision Processes
(a) Task Team members
Names Title Unit Responsibility/
Specialty Lending Suhail Jme’an Senior financial analyst MNSIF Preparation TTL Michael Hamaide Operations analyst MNSIF Manuel Schiffler Senior economist MNSIF Majed El-Bayya Lead Procurement Specialist MNAPR Lizmara Kirchner Water & Sanitation Specialist MNSIF Akram Abd El-Aziz Hussein El-Shorbagi
Sr Financial Management Spec. MNAFM
Maged Mahmoud Hamed Sr Environmental Spec. MNSIF Velayutham Vijayaverl Senior Procurement Specialist MNAPR Somin Mukherji Senior Financial Analyst MNSIF Robotham, Kingsley Consultant MNSIF Alexander E. Bakalian Lead Water Resource Specialist MNSIF
Supervision/ICR Sana Kh.H. Agha Al Nimer Sr Water & Sanitation Spec. MNSSD Supervision TTL Pier Francesco Mantovani Ld. Water & Sanitation Spec. MNSSD ICR TTL Khairy Al-Jamal Senior Infrastructure Specialist MNSSD Claire Kfouri Water & Sanitation Specialist MNSSD Fifi Z. Antar Program Assistant MNCO4 Hyacinth D. Brown Senior Finance Officer LOAFC Maya Khelladi Economist MNSIF A. Amir Al-Khafaji Consultant MNSSD Kirsten Burghardt Propst Counsel LEGEM Michael Hamaide Operations officer. MNSIF Dominique M. Dietrich Language Program Assistant MNSSD Hayat Taleb Al-Harazi Program Assistant MNSSD Ruby Ray Finance Officer LOADM Colin S. Scott Lead Specialist MNSSD Magalie Pradel Program Assistant MNSSD Suhail Jme’an Senior Financial Analyst MNSIF Initial SPN TTL Sati Achath ICR consultant Consultant ICR specialist Lizmara Kirchner Water & Sanitation Specialist MNSSD Siaka Bakayoko Country Manager MNCO4 Ahmed Merzouk Senior Procurement Specialist MNCO4 Alexander E. Bakalian Lead Water Resource Specialist MNSSD
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(b) Staff Time and Cost
Stage of Project Cycle Staff Time and Cost (Bank Budget Only)
No. of staff weeks USD Thousands (including travel and consultant costs)
Annex 6. Stakeholder Workshop Report and Results (if any) N/A
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Annex 7. Borrower Evaluation Report
The Palestinian National Authority
The Palestinian Water Authority
EMERGENCY WATER PROJECT
Implementation Completion Report
(Borrower's Contribution)
By
The Project Management Unit
March 2009
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1. INTRODUCTION
In parallel, PWA with donor support (USAID, AFD, FINNIDA and the WB) intended to accelerate the implementation of a program of priority capital investments that would increase available water in the southern area of the West Bank by drilling and equipping five deep wells as well as laying related primary transmission and distribution pipelines. This integrated program would convey additional water throughout the southern area where the water supply situation is dire.
As a part of the comprehensive program, PWA proposed an Emergency Water Project to alleviate the deteriorated water supply services within the southern area of the West Bank by supporting priority investment packages focusing on enhancing water conveyance and distribution networks. The proposed Emergency Water Project would be financed on grant basis the critical components of the priority program described above where water are already available would be quickly conveyed and distributed to consumers.
The key implementing agencies involved in the project are the Palestinian Water Authority (PWA) and the donor community namely; USAID, AFD, FINNIDA and the World Bank. The PWA has named the Project Management Unit as focal point to oversee the successful implementation of the program. The PMU was established on September of 1999 to follow up the World Bank funded program "Southern Area Water and Sanitation Improvement project"; but soon after it has become the technical unit for the PWA to oversee the implementation of it strategic programs and projects.
2. EMERGENCY WATER PROJECT BACKGROUND
Following nearly of two and a half years of protracted and often violent conflict since October 2000, which has caused severe damages to the West Bank and Gaza’s physical and institutional infrastructure, including housing, public facilities, as well as vital water, wastewater and electrical networks. Municipal and village distribution networks suffered direct damage. Municipal maintenance crews were unable to carry out effective repairs and conduct routine maintenance. Consequently, reliable piped and safe water supplies were severely impacted. The closures and curfews crimped the ability to supply water by tankers on regular basis. Consequently, to the extent that tankers can deliver water the price of water rose sharply putting additional economic burden on households. As a result, large portions of the population continue to be without water for extended periods of time. Levels of household water usage have decreased and health risks increased because of failed wastewater and chlorination systems.
In order to overcome these health and environmental impacts, an Emergency Water Project (EWP) was proposed to improve the water supply conditions in the southern area of the West Bank. The proposed project will increase the capacity of the existing systems, rehabilitate deteriorated networks, improve accessibility, quality and quantity of water.
Recognizing the increased threat to public health brought about by increased exposure to water- and sanitation-borne disease and increased economic burden on households, the Palestinian Water Authority (PWA) with support from the donor and NGO community established the Emergency Water Operations Center (EWOC) in April 2002. The purpose of the EWOC was to assist in responding to the humanitarian crisis described above through restoration of basic water and sanitation services in the West Bank. In the first six months of operation EWOC disbursed about
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$1.15 million for emergency repair work. An additional US$ 7.0 million are spent for continued emergency work, restocking of supplies and to help improve preparedness.
2.1 EWP Objectives The main development objectives of the proposed project are:
Improve the sufficiency of water and wastewater services in the Southern Area of the West Bank (Hebron and Bethlehem Governorates).
Improve the efficiency of water and wastewater services supply to customers in terms of quality and quantity.
Improve the management of water services by building on existing authorities; the Water Supply and Sewerage Authority (WSSA) and the municipal and village water departments within Bethlehem and Hebron Governorates.
Strengthening regulatory and institutional capacity in the Palestinian Water Authority (PWA).
2.2 The EWP Main Components
The Emergency Water Project (EWP) for the southern area of the West Bank consisted of the following components:
2.2.1 Water Transmission Line ( Halhul - Kharas - Nuba )
The water transmission main line has been designed to connect the existing Halhul regional water reservoir, with the capacity of 25,000 cubic meter, to Kharas town and then move on to connect Nuba town and the Western area of Hebron Governorate. The total length of the pipe is 11.21 km and its diameter varies between 6” and 16”. It should be noted that the Halhul reservoir is being supplied by a group of wells that were drilled and equipped through other programs, mainly from the USAID. However, one of those wells, East Herodian 2 well, was drilled through the European Investment Bank, and was planned to be equipped as another component of this exact program; EWP.
The bidding process for the main transmission line was carried out as an NCB and was advertised on September 22, 2004. The Arab Brothers was declared the successful bidder among the eight firms that submitted their proposals with a contract value equivalent to 664,299 USD; and the work commenced on 17 February 2005. The contractor had nine calendar months to complete the work.
The final contract value amounted to $744,498.03 which exceeded the original contract value by 12.07%. Justifications for the increase in the contract amount were furnished to the World Bank and the records were updated accordingly.
2.2.2 Water Transmission Line (East Herodian 2 )
The water transmission mainline was designed to connect the East Herodian Production Well (No. 2), to an existing main transmission pipeline connecting the two regional reservoirs at Dheishe and Halhul in Bethlehem and Hebron Governorates respectively. The total length of the transmission line 7.5 km with a 16” in diameter. The bidding process was carried out as NCB and was advertised on 19 August 2004. Midmac Company was the successful bidder and signed the contract with a value of 345,747 USD on 5 December 2004 with 6 months for completion.
The final contract value was $467,273.55 which exceeded the original contract value by 35.15%. Justifications for the increase in the contract amount have been provided and sent to the World Bank. The main increase in the contract value was due to the intervention of the Israeli Ministry of Public Works who had stopped the works and
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enforced Israeli specifications on the contractor after forcing him to change the routing of the pipeline. The route was shifted from one side of the street to the other, and such required the contractor to redo the shop drawings taking into consideration the different nature of the terrain, and the Israeli specifications. Accordingly, the contractor was forced to make encasement on certain segments of the pipeline that passed next to the Israeli settlement's entrance. In addition, the reinstatement of the original conditions was done according to the Israeli specifications that were different than the ones in the document.
2.2.3 Procurement of DIP for EH2 and H-K-N
The PWA and the World Bank have agreed to divide the above mentioned two projects and to tenders in two separate procurements. The supply of the Ductile Iron pipes and the fittings as one part, and the installation as another. Such was planned to accelerate the implementation of the projects, which means that the pipes would be shipped at a time when the contractors would be making their shop drawings. The contractor was required to procure the needed pipes and materials, store them at two locations and manage the sites for the duration of the installation phase.
Two sites were given to the contractor; the first at Teqo, close to the EH2 transmission line, and the other was provided by the community of Nuba which was close to the H-K-N transmission line.
The contract was signed with the French company (IPS) on 5 August 2004 for a contractual value of € 2,581,105. After farther auditing to the BOQ, it was corrected to the amount of € 2,586,057.
The two storage sites were handed over to the PWA by mid of January 2006; and Nuba storage yard was turned over to the community which is using it as a playground for the community's school.
It was found that this implemented method had saved the project finances and time. This was mainly due to the fact that the works on the three projects went in parallel. In other words, the pipes were on their way to the country at the time when the transmission line contractors were preparing their shop drawings.
The final contract value amounted to € 2,770,306 which exceeded the original contract value of € 2,586,057 by 7.0 %.
2.2.4 Equipping the East Herodian Production Well (No. 2)
The project was awarded to El Concorde for a total contract value of 3,090,509.74 USD excluding VAT, and the works included the supply and construction of the submersible pump, booster pumps, electrical panels, the balance reservoir and other civil works. The contract was signed on 26 December 2005, and the project was scheduled to be completed after 11 months from the day when the notice to be proceed was awarded on 13 February 2006. Once the well is in operation, it is expected to yield an additional quantity of water (200 cm/hr) and to be pumped into the system feeding Bethlehem and Hebron area.
It should be noted that this project was tendered for the second time. The first time, three firms submitted their offers and were found non of them meet the specifications and conditions of the tender document.
The progress was slow and was not to the satisfaction of the Construction Management team. The contractor was required to increase the level of commitment and works toward completion of the project as soon as possible. At the end of December 2007 the PMU informed the Bank's TTL with its non satisfaction with the performance and suggested the termination of the contract or to allow the PMU to procure the submersible pump directly from the supplier. The Bank responded negatively to both suggestions and insisted to proceed with the Contractor and conclude the works prior to the deadline of the TF; June 30th 2007.
It should be noted that no additional payments have been made to the contractor after June 2007, when the PMU noted the discrepancy in the technical submittals of the submersible pumps. In the following month, the PMU rejected the pumps due to the fact that the serial numbers on the pumps refer to an eight-stage pumps and not the supplied ones with 14-stage pump.
The Bank and the PMU have approved to send the pump to be tested in the workshop of the manufacturer in Scotland, and has requested that the Third Party to witness the testing. However, and due to the lack of the proper documentation, the PWA rejected the pumps and requested the Contractor to replace them with new ones. The contractor on March 4th 2008 sent its acceptance to PWA instructions and noted its compliance with the instructions. However, and due to the fact that the contractor refused to extend its performance bond, the PWA sent a letter terminating the contract; and the Bank declared mis-procurement.
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2.2.5 Rehabilitation of water networks
Under the EWP, the full rehabilitation of Kharas and Nuba networks would be carried out. The designs were prepared by the US consultant, CDM to be funded by the USAID. However, and due to limitations in USAID funding; and the urgency to rehabilitate the systems and improve the quality of life for the Palestinian population, the two projects are funded by the World Bank under the Emergency Water Project.
2.2.5.1 Kharas network
The bids were opened on 28 August 2005, and the contract was signed with the successful bidder, Arab Brothers, on 12 December 2005 for a total value of 1,168,753.37 USD (Including VAT). The notice to proceed was issued on 4 February 2006, and the contractor had 8 months to complete the works. The contractor has laid 33.596 Km of the internal distribution pipes in addition to replacement and installation of 600 household meters. It should be noted that the contractor has worked closely with the municipality to ensure the speedy installation of the household connections under the supervision of the PMU/CM team.
The contractor completed the contract works and has received an amount of 1,152,727.12 USD.
2.2.5.2 Nuba network
The bids were opened on 4 October 2005 and the contract was signed with the successful bidder, Al-Khaisi Contracting Company, on the 5th of November 2006 for a total amount of USD 938,275.00 (Excluding VAT). The notice to proceed was issued on the 19 November 2006 and the contractor had 6 months to complete the works.
The works consisted of the rehabilitation of 31.2 km of HDPE and house connections, and the replacement and installation of 700 household meters.
The contractor has completed the contract works and has received an amount of USD 873,186.63 (Excluding VAT). This amount is technically & financially approved.
2.2.6 Kharas reservoir
An estimated budget of 0.36 million USD was allocated to the construction of a 1000 cm reservoir to be an integral part of the main system serving the western area of Hebron Governorate. The bid opening took place on 10 August 2005, the successful bidder was the Arab brother who signed the contract on 24 October 2005 for a contract value equivalent to 195,000 USD excluding VAT.
The notice to proceed was issued on 16 November 2005, and the contract duration was for 6 months.
This project was completed on schedule. The final aggregate amount of this contract was $ 268,193.87 where the increase in the contract amount was $ 41,993.87 which is an 18.56% in the contract amount. Justifications for this increase were furnished to the World Bank in order that they adjust their records accordingly.
During the World Bank's mission last November 2006, it was agreed to reallocate the finances of the project to fund the rehabilitation of Beit Ula network and to connect the EH2 well with permanent power. Below is the description of the two projects with the update on their status.
1. Beit Ula
An estimated budget of 0.6 Million USD was allocated for the supply and installation of a water network for Beit Ula community in Hebron governorate to the south of Nuba community. The tender process took place as scheduled according the World Bank guidelines and the contract was awarded to Afaq Co. as the successful bidder, the contract was signed on the 13 March 2007 with a total contract value of 488,910 USD. The works have not been completed.
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2. Electricity Connection to East Herodian Well # 2
The implementation method for this contract is a sole source shopping. The sole provider of electricity is the Jerusalem District Electricity Company (JDECO). This project is very critical and necessary where it will be feeding electricity to the East Herodian 2 Well, which provides 1.5 mcm of water per year to a system which supplies water to 800,000 inhabitants in the governorates of Bethlehem and Hebron. This project also aims at decreasing the operational costs of the well facility in addition to guaranteeing continuous operation and sustainability of the well.
JDECO requested 1,787,684 NIS for the implementation of the required works, and has sent the work plans for the Israeli civil administration. The environment officer requested not to install the over-head electricity line and instead burry the lines. However, this project is being financed by the Ministry of Finance due to the fact that the Bank did not extend the trust Fund.
3. Designs for the Dura and Yatta villages
Even though this component was designed to be funded by the Bank, but due to the fact that the Bank did not provide the financial support for the required engineers; the PWA was able to hire the design engineers through the funding of the Finnish government. The Finnish government funded part of the operating expenses of the Project management Unit, and have funded the expenses of two experts; the first was an assistance to the Director of the PMU, and the second was the construction manager for the East Herodian well 2 project.
The design were finished and submitted to the Bank seeking funding. The two packages would serve more than 35 communities that have no distribution networks, and have to depend on water tankers. Currently, the PWA is negotiating with other donors to fund those packages.
Lessons learned
1. The formation of the PMU needs to be structured with greater attention, based on the assigned tasks. During the course of its function, the PMU has proven to be the entity that can assume the same responsibilities as those of the Engineering firm, and with additional technical support, the works would be carried out in a more professional manner. The original scope of work mandated that the PMU was to coordinate with the communities and the donor community regarding the implementation of the different projects and the improvement of the services; and act to liaison between the different parties. However, this role was significantly changed after the Intifada and the Israeli incursions The PMU, after expanding its local staff, started having additional tasks including the procurement services, supervising the operation and maintenance of the utilities, providing technical assistance to the different communities, make needs assessment, design, tender, supervise the implementation and continue its role in the donor coordination in the southern area of the West Bank.
2. The institutional arrangement should be handled from the early stages of the program. It was found that the once the communities are well informed about the project, they would be facilitating the works and services to be carried out in their locality.
3. Training should be looked upon seriously and should carry more weight in the process. It suffice to say that some training was carried out to the local contractors, engineers and Villages Councils on the use of the Ductile Iron pipes and the high density polyethylene
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4. The World Bank needs to revise its policies that have proven to be misleading in the management of the program.
a. The main criteria for the Bank to judge the performance of the program should not depend on the speed of spending the funds. The efficient allocation of the funds should be considered, especially when other donors are co-financing some of the projects in the same area. It should be noted that the TTL were found to be under great pressure to expedite the spending of the funds paying less attention to the quality of the works and services.
b. The Bank should provide more technical assistance to similar projects. It was the feeling the policy that was implemented by the Bank was "Sink or Swim"; and the Bank stood on the shore watching the sinking of the project. The main issue was the Equipping of East Herodian Well 2. The Construction management consultant made several proposals to solve the contractual issue with the Contractor. However, the Bank was keen on rejecting all proposals and kept the pressure to conclude the project prior to the deadline. The work should be one of partnership, but it felt that the Bank was instructing the PMU and directing its action; and then judge them for going into that direction
5. Emergency programs and projects should be dealt with in a more delicate manner. The Emergency projects that are implemented under a very hostile political environment should be followed up more closely. We do not believe that Emergency programs could be run by a remote control from the Banks HQ in Washington, and the Task leaders should be based in the country mission offices. Such would give the TTL a more realistic sense of the events and may help receive the appropriate appreciation
6. The relationship between the Bank TTL and the Borrowers technical team should be one of mutual respect. Both side should deal with each others on an equal footage not one of a master and serf. for any project to succeed, both parties should be working together to make things happen.
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Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders
N/A
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Annex 9. List of Supporting Documents
Project Implementation Plan Memorandum and Recommendation of the President for The West Bank and Gaza
Emergency Water Project, dated July 2, 2003 (Report No.:P7597 GZ)
Aide Memoires, Back-to-Office Reports, and Implementation Status Reports.
