The World Bank CO Rio Bogota Environmental Recuperation and Flood Control Project (P111479) REPORT NO.: RES37868 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF CO RIO BOGOTA ENVIRONMENTAL RECUPERATION AND FLOOD CONTROL PROJECT APPROVED ON DECEMBER 14, 2010 TO CORPORACIÓN AUTÓNOMA REGIONAL DE CUNDINAMARCA (CAR) WATER LATIN AMERICA AND CARIBBEAN Regional Vice President: Axel van Trotsenburg Country Director: Ulrich Zachau Regional Director: Practice Manager/Manager: Rita E. Cestti Task Team Leader: Antonio Manuel Rodriguez Serrano, Karen Priscila Navarro Rios The World Bank CO Rio Bogota Environmental Recuperation and Flood Control Project (P111479) I. BASIC DATA Product Information Project ID Financing Instrument P111479 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 14-Dec-2010 31-Dec-2019 Organizations Borrower Responsible Agency Corporación Autónoma Regional de Cundinamarca (CAR) Corporación Autónoma Regional de Cundinamarca (CAR) Project Development Objective (PDO) Original PDO The objective of the Project is to assist the Borrower to transform the Rio Bogotá river into an environmental asset for the BogotáDistrito Capital metropolitan region by improving water quality, reducing flood risks, and creating multi- functional areas along the river. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-79850 14-Dec-2010 15-Jul-2011 21-Sep-2011 31-Dec-2019 250.00 192.51 57.49 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank CO Rio Bogota Environmental Recuperation and Flood Control Project (P111479) Project Background 1. The Project Development Objective (PDO) is to assist the Borrower to transform the Río Bogotá into an environmental asset for the Bogotá Distrito Capital metropolitan region by improving water quality, reducing flood risks, and creating multi-functional areas along the river. The Project has four components: (i) upgrading and expanding the Salitre Waste Water Treatment Plant (WWTP); (ii) Río Bogotá flood control and environmental restoration works; (iii) environmental and water studies; and (iv) project management and administration. The Project was approved on December 14, 2010 in the amount of US$250 million and became effective on September 21, 2011. The original closing date was June 30, 2016. The total Project cost is US$531 million. 2. The main activities financed under the Project are: (i) under Component 1, a turnkey contract for the expansion and upgrading of the Salitre WWTP (US$409.4 million, of which US$235.5 million IBRD) and its corresponding supervision contract (US$12.8 million, of which US$ 0 million IBRD); (ii) under Component 2, two contracts flood control works and environmental restoration of riparian areas along 68.5 km of the Rio Bogota River middle basin, contract for segments A, B and C totaling 52.0 km (US$66.6 million of which US$14.5 million IBRD) and contract for 16.5 km (US$25.73 million of which US$0 million IBRD) and the corresponding supervision contract; (iii) under Component 3, several plans and studies financed entirely with counterpart funds, including an Integrated River Basin Management Plan, a Study for the Design, Operation and Maintenance of Multifunctional Areas, and a Biosolid Management Plan; and (iv) under Component 4, the Project Management and Administration. Status of Project Implementation and Performance to Date 3. Progress towards the achievement of the PDO is Moderately Satisfactory (MS). So far, the Project has achieved the PDO targets and corresponding results indicators on flood risk management and environmental restoration. The remaining PDO targets and corresponding results indicators on effluent discharge limits and on direct beneficiaries would be achieved within the requested extended implementation period, i.e., by September 30, 2021. 4. Disbursements. To date, 77 percent of the loan proceeds equivalent to US$192.51 million have been disbursed and 100 percent of the loan proceeds have been committed. Disbursement is expected to reach 96 percent of the US$250 million IBRD loan by December 31, 2019. 5. Overall Implementation Progress is Satisfactory (S). All contracts financed by the loan proceeds have been completed except for the Salitre WWTP turnkey contract under Component 1. A summary of Project progress to-date under each component is provided below: (a) Under Component 1: the Salitre WWTP expansion and optimization turnkey contract, which started in April 2017, is ahead of schedule. As of May 31, 2019, it has reached an overall progress of 99 percent of detailed designs, 72 percent of physical works, and 50 percent of financial execution, compensating initial delays. The Salitre WWTP expansion and upgrading works are expected to be completed, as scheduled, by end September 2020 to enable one year to test the operation of the p lant, through the end of the turnkey contract in September 30, 2021. (b) Under Component 2: The works for flood control and environmental restoration of riparian areas have been completed. Six multifunctional areas totaling 203 hectares have been reserved and recuperated along the Rio Bogota River, including 15 hectares of wetlands habitats, increasing the presence of flora and fauna. Flood control protection standards with a return period of 100 years have been achieved along 68.5 km of the Rio Bogota River middle basin. Activities under this component have benefited 1.19 million people with reduced flood risk. (c) Under Component 3: The Integrated River Basin Management Plan was completed. The Study of Design, Operation and Maintenance of Multifunctional Areas is underway. An alternative to implement the Biosolids Management Plan has been identified; the plan includes a short-term solution for the disposal and treatment of biosolids from the Salitre WWTP to be implemented by the current Contractor and a long-term solution for biosolids of other WWTP in Bogota to be implemented by the water utility-Empresa de Acueducto y Alcantarillado de Bogota (EAAB), final recipient of the Salitre WWTP. The World Bank CO Rio Bogota Environmental Recuperation and Flood Control Project (P111479) (d) Under Component 4: This component is also advancing satisfactorily. Previous Project Restructurings 6. In June 2016 the Bank decided on a phased approach towards closing date extensions, driven by the duration of the Salitre WWTP turnkey contract. Since then, the project’s closing date has been extended three times for an overall period of 42 months. As part of this process, an Action Plan was agreed with the borrower. Progress on the Action Plan 7. Current progress on the Action Plan agreed at the last restructuring is as follows: (a) Compliance with agreed disbursement levels corresponding to the current construction schedule. Disbursement of US$30 million of the loan proceeds by April 30, 2019 achieved. (b) Component 1 - Progress on the turnkey contract WWTP Salitre, as scheduled, namely: (i) final project designs and as-built drawings by 31 October, 2019 on track(ii) completion of foundations of structures of Lot 3 at the scheduled level by Jun 30, 2019 achieved; (iii) put into operation works of Lot 2 by December 31, 2019 on track; (iv) final contract adjustment request submitted to the Bank by March 31, 2019 achieved; and (v) request for the shipment of 100 percent of main equipment issued by Jun 30, 2019 on track. (c) Continued compliance with the Environmental and Social Management Plan and the Inspection Panel’s recommendations. Satisfactory rating over the course of the 12-month period of the extension achieved. (d) Component 2. Documentation for all the closed river work contracts submitted to the Bank by Jun 30, 2019 on track; all the works under this component are completed. (e) Component 3 – Consultancies: (i) Biosolids Management Plan for short and long term defined by May 31, 2019 achieved; (ii) Completion of the study of multifunctional areas by September 30, 2019 on track. (f) Component 4 – Compliance with the Project external audit recommendations by Jun 30, 2019–on track. Environmental and Social Safeguards Considerations 8. The Environmental and Social Management Plan continued to be implemented satisfactorily. The Corporación Autónoma Regional de Cundinamarca CAR is implementing all the mitigation measures contained in the Environmental Assessment and continues to disseminate those measures through different social media networks. The Environmental and Occupational Health Safety (EOHS) management of the project has achieved an excellent performance. The Contractor and Supervisors strengthened their industrial safety and health field teams in compliance with the national law and the World Bank's safeguards. As a result of the observed good EOHS practices in the Salitre WWTP worksite, no fatalities or serious accidents have been reported so far. Assessment of Compliance with the Inspection Panel’s Action Plan 9. All the agreed actions have been implemented in a satisfactory manner, as can be observed at the CAR’s Project website (https://ptarsalitre.com.co/category/inspeccion-banco-mundial/). Rationale for the Proposed Restructuring 10. The Project is a key element of the overall government strategy to recuperate the Rio Bogota. Closing the project now would entail to cease implementation support to the complex civil works contract currently being implemented, which would carry substantial risks. The extension will allow the Borrower to: (i) complete the works under the expansion and upgrade of the Salitre WWTP; (ii) put into operation the Salitre WWTP; and (iii) achieve the PDO. Proposed Changes 11. The proposed restructuring includes an extension of the current loan closing date from December 31, 2019 to September 30, 2021. The proposed restructuring would not bring any changes to the PDO or the safeguards policies The World Bank CO Rio Bogota Environmental Recuperation and Flood Control Project (P111479) triggered by the Project and is in compliance with the requirements set forth in the Bank Directive for Investment Project Financing for extensions of the loan closing dates. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 30-Dec-2017, 03-Dec- IBRD-79850 Effective 30-Jun-2016 2018, 31-Dec-2018, 30-Sep-2021 30-Jan-2022 31-Dec-2019