Document of The World Bank FOR OFFICIAL USE ONLY Report No: RES18505 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF MATANZA-RIACHUELO BASIN SUSTAINABLE DEVELOPMENT PROJECT PHASE 1 (APL1) ADAPTABLE PROGRAM LOAN June 9, 2009 TO THE ARGENTINE REPUBLIC December 23, 2015 GLOBAL ENVIRONMENT AND NATURAL RESOURCES PRACTICE LATIN AMERICAN AND CARIBBEAN REGION This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ABBREVIATIONS AND ACRONYMS ACUBA Asociación de Curtiembres de Buenos Aires (Buenos Aires Tanneries Asociation) ACUMAR Autoridad de Cuenca Matanza Riachuelo (Matanza-Riachuelo Basin Authority) APL Adaptable Program Loan AySA Aguas y Saneamientos Argentinos S.A. (Argentina Water and Sanitation Utility) BOD Biological Oxigen Demand CBA City of Buenos Aires CRI Convenio de Reconversion Industrial (Industrial Conversion Agreement) EIA Environmental Impact Assessment EMF Environmental and Social Management Framework GoA Government of Argentina IBRD International Bank for Reconstruction and Development ISDS Integrated Safeguards Data Sheet IWWTP Industrial Waste Water Treatment Plant MMAyDS Ministry of Environment and Sustainable Development M-R Matanza-Riachuelo MRB Matanza-Riachuelo Basin MU Moderately Unsatisfactory MS Moderately Satisfactory PBA Province of Buenos Aires PDO Project Development Objective PISA Plan Integral de Saneamiento de la Cuenca Matanza-Riachuelo (Integrated Cleanup Plan for the Matanza-Riachuelo Basin) SEPA Sidestream Elevated Pool Aeration Station SAyDS Secretaría de Ambiente y Desarrollo Sustentable (Secretariat of Environment and Sustainable Development) SORT Systematic Operations Risk-Rating Tool TIP Tanneries Industrial Park TOR Terms of Reference Regional Vice President: Jorge Familiar Country Director: Jesko S. Hentschel Senior Global Practice Director: Paula Caballero Practice Manager/Manager: Raúl Ivan Alfaro-Pelico Task Team Leader: Christophe Prevost ii ARGENTINA Matanza-Riachuelo Basin Sustainable Development Project Phase 1 (APL1) CONTENTS A. SUMMARY 1 B. PROJECT STATUS 1 C. PROPOSED CHANGES 2 D. APPRAISAL SUMMARY 12 ANNEX 1: REVISED RESULTS FRAMEWORK AND MONITORING 14 ANNEX 2: SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) 19 iii DATA SHEET Argentina Matanza-Riachuelo Basin (MRB) Sustainable Development Adaptable Lending Program (P105680) LATIN AMERICA AND CARIBBEAN Environment & Natural Resources . Report No: RES18505 . Basic Information Project ID: P105680 Lending Instrument: Adaptable Program Loan Regional Vice President: Jorge Familiar Original EA Category: Full Assessment (A) Country Director: Jesko S. Hentschel Current EA Category: Full Assessment (A) Senior Global Practice Paula Caballero Original Approval Date: 09-Jun-2009 Director: Practice Raul Ivan Alfaro Current Closing Date: 31-Mar-2016 Manager/Manager: Pelico Team Leader(s): Christophe Prevost . Borrower: Argentine Republic Responsible Ministry of Environment and Sustainable Development (MMAyDS) Agency: . Restructuring Type Form Type: Full Restructuring Paper Decision Authority: Country Director Approval Restructuring Level: Level 2 . Financing ( as of 22-Dec-2015 ) Key Dates Approval Effectiveness Original Revised Project Ln/Cr/TF Status Signing Date Date Date Closing Date Closing Date P105680 IBRD-77060 Effective 09-Jun-2009 25-Aug-2009 20-Jul-2010 31-Mar-2016 31-Mar-2016 Disbursements (in Millions) % Origin Cancelle Disburse Undisbur Project Ln/Cr/TF Status Currency Revised Disburse al d d sed d P105680 IBRD-77060 Effective USD 840.00 718.03 121.97 192.68 525.35 27 . Policy Waivers Does the project depart from the CAS/CPF in content or in other significant Yes [ ] No [ X ] respects? 1 Does the project require any policy waiver(s)? Yes [ ] No [ X ] . A. Summary of Proposed Changes Proposed changes include: (i) extension of the loan closing date by 12 months (ii) change the description of Component 2 to include an industrial wastewater treatment plant (IWWTP), (iii) reallocation of proceeds across disbursement categories, (iv) addition of a new disbursement category; and (iv) adjustment of the project’s Results Framework. There will be no changes to the PDO or changes to the Safeguards policies triggered. Change in Implementing Agency Yes [ ] No [ X ] Change in Project's Development Objectives Yes [ ] No [ X ] Change in Results Framework Yes [ X ] No [ ] Change in Safeguard Policies Triggered Yes [ ] No [ X ] Change of EA category Yes [ ] No [ X ] Other Changes to Safeguards Yes [ ] No [ X ] Change in Legal Covenants Yes [ ] No [ X ] Change in Loan Closing Date(s) Yes [ X ] No [ ] Cancellations Proposed Yes [ ] No [ X ] Change to Financing Plan Yes [ ] No [ X ] Change in Disbursement Arrangements Yes [ ] No [ X ] Reallocation between Disbursement Categories Yes [ X ] No [ ] Change in Disbursement Estimates Yes [ X ] No [ ] Change to Components and Cost Yes [ X ] No [ ] Change in Institutional Arrangements Yes [ X ] No [ ] Change in Financial Management Yes [ ] No [ X ] Change in Procurement Yes [ ] No [ X ] Change in Implementation Schedule Yes [ X ] No [ ] Other Change(s) Yes [ ] No [ X ] Appraisal Summary Change in Economic and Financial Analysis Yes [ ] No [ X ] Appraisal Summary Change in Technical Analysis Yes [ ] No [ X ] Appraisal Summary Change in Social Analysis Yes [ ] No [ X ] Appraisal Summary Change in Environmental Analysis Yes [ ] No [ X ] Appraisal Summary Change in Risk Assessment Yes [ ] No [ X ] . B. Project Status The project has accelerated the implementation of its five major infrastructure contracts under component 1, including the construction of : i) a 16 km underground sewerage main collector on the left bank of the Matanza Riachuelo (M-R) river and 18 km of secondary collectors in the lower part of the basin to collect and convey the sewerage to the Riachuelo Wastewater Treatment Plant, ii) a 12 km underground subaquatic outfall to adequately dispose of the sewerage in the La Plata River; iii) a Sludge Treatment 2 Plant for the Sudoeste WWTP of AySA (Agua y Saneamientos Argentinos S.A), and iv); and two aeration stations (so-called SEPA) in the margins of the Matanza Riachuelo. Activities under Components 2 and 3, are now on track with more than US$100 million in works ready for bidding or at an evaluation stage. And under Component 4, Matanza-Riachuelo Basin Authority (ACUMAR) has become an entity with the adequate staffing, and resources and is an engaged counterpart in the implementation of the project. The initial Loan amount was US$840 million, and US$122 million was canceled in 2012. The current Loan amount is US$718 million. To date, over 80 percent of Loan proceeds have been committed, and about 26 percent of Loan proceeds have been disbursed. Current project ratings are MU for Progress towards achievement of PDO, and MS for Implementation Progress. . C. Proposed Changes . Development Objectives/Results Project Development Objectives Original PDO The PDO is to (i) improve sewerage services in the M-R River Basin and other parts of the Province and City of Buenos Aires by expanding transport and treatment capacity; (ii) support a reduction of industrial discharges to the M-R River, through the provision of CRI Grants; (iii) promote improved decision- making for environmentally-sustainable land use and drainage planning, and to pilot urban drainage and land use investments, in the M-R River Basin; and (iv) strengthen ACUMAR’s institutional framework for ongoing and sustainable clean-up of the M-R River Basin. Change in Project's Development Objectives Change in Results Framework Explanation: The Project’s Result Framework is updated to capture all aspects of the PDO in order to better monitor and manage the progress of the proposed restructured Project towards achieving the objectives. . Financing Change in Loan Closing Date(s) Explanation: The Project has experienced extraordinary delays. The Project lost one year between Board approval and effectiveness and the procurement process related to the main infrastructure sanitation works took four years to be completed. A 12 month extension is proposed to assess project progress and impact of proposed redesign, before proposing a new extension. Based on current information, it is anticipated that at a 60 month extension would be necessary to achieve the PDO. Statu Original Closing Current Closing Proposed Closing Previous Closing Ln/Cr/TF s Date Date Date Date(s) Effect IBRD-77060 31-Mar-2016 31-Mar-2016 31-Mar-2017 31-Mar-2016 ive Reallocations Explanation: 3 Reallocation of funds among disbursement categories is necessary to finance current works under Component 1 and future infrastructure works, particularly under Component 2 and Component 3, as presented in the following table. Current Category of Disbursement % Ln/Cr/TF Currency Allocation Expenditure (Type Total) Current Proposed Current Proposed IBRD-77060 USD Works under Part 1(a) 478,032,000.00 576,412,000.00 80.00 80.00 CS, GO & TRNG 30,000,000.00 20,000,000.00 100.00 100.00 under Part 1(b) CW, GO & CS under 40,000,000.00 1,000,000.00 100.00 100.00 CRI subprojects Eligible Exp. Parts 55,000,000.00 7,100,000.00 80.00 80.00 2(a) to (d) & 3 Eligible Expenditures 14,000,000.00 7,820,000.00 100.00 100.00 for Part 4 UNALLOCATED 98,900,000.00 0.00 0.00 0.00 PREMIA FOR INTER. RATE 0.00 0.00 0.00 0.00 CAPS/COLLARS Designated Account 0.00 0.00 0.00 0.00 FRONT END FEE 2,100,000.00 2,100,000.00 0.00 100.00 Works under part 2(f) 0.00 103,600,000.00 0.00 80.00 and 3(g) Total: 718,032,000.00 718,032,000.00 Disbursement Estimates Change in Disbursement Estimates Explanation: The following table presents the revised disbursement estimates that take into account actual and projected disbursements. Fiscal Year Current (USD) Proposed (USD) 2009 0.00 0.00 2010 50,000,000.00 0.00 2011 50,000,000.00 4,778,757.09 2012 100,000,000.00 782,596.52 2013 210,000,000.00 1,538,487.22 2014 210,000,000.00 582,603.48 2015 100,000,000.00 176,355,897.06 2016 8,032,000.00 51,204,900.68 4 2017 0.00 482,788,757.951 Total 718,032,000.00 718,032,000.00 . Components Change to Components and Cost Explanation: As part of Component 2, Industrial Pollution Abatement, it is proposed to include the construction of an industrial wastewater treatment plant (IWWTP) that will treat the liquid discharges from Tannery Industrial Park in the Municipality of Lanús, under the responsibility of ACUMAR. The IWWTP will contribute to achieve the PDO’s by supporting a reduction of industrial discharges to the M-R River. The IWWTP will allow the adequate treatment and safe disposal of 78 percent of the total tannery wastes discharged in the basin. The description of the Component in the Loan Agreement will be updated to reflect the change and the Component costs are revised as follows: Current Component Proposed Component Current Cost Proposed Action Name Name (US$M) Cost (US$M) Sanitation 571.90 596.40 Revised Industrial Pollution 60.30 57.80 Revised Abatement Environmental Territorial 65.50 53.90 Revised Management Institutional Strengthening and Project 18.20 7.80 Revised Management Front-end fee 2.1 2.1 New Total: 718.00 718.00 . Other Change(s) Change in Institutional Arrangements Explanation: By Decree No. 13/2015, the Secretary of Environment and Sustainable Development (SAyDS) has been replaced by the Ministry of Environment and Sustainable Development (MMAyDS) and the execution of the Project will continue under MMAyDS. The change does not entail any changes to the Project Execution Unit. Its capacity has been assessed and found acceptable by the Bank. Change in Implementation Schedule Explanation: The implementation schedule will be adjusted to reflect the accumulated delay and the projected implementation of Project activities. 1 The amount shown for year 2017 reflects the balance of the loan at the time of the proposed closing date. 5 ARGENTINA Matanza-Riachuelo Basin Sustainable Development Project Phase 1 (APL1) (P105680) RESTRUCTURING PAPER A. SUMMARY 1. This Restructuring Paper reflects the following proposed changes with regards to the Matanza-Riachuelo Basin Sustainable Development Project Phase 1: a. Extend the closing date from March 31, 2016 to March 31, 2017; b. Change in description of Component 2; c. Create a new disbursement category to finance works under Components 2 and 3; d. Reallocate funds among disbursement categories to account for works under Components 2 and 3, and redistributing the funds from the “unallocated� disbursement category; and e. Revise the Project Outcome Indicators, Intermediate Indicators, and targets to better monitor and manage the progress of the proposed restructured Project. B. PROJECT STATUS 2. The loan was approved on June 9, 2009. The Loan Agreement was signed on August 25th, 2009 and declared effective on July 20th, 2010. The initial Loan amount was US$840 million, and US$122 million was cancelled in 2012. The current Loan amount is US$718 million. To date, over 80 percent of Loan proceeds have been committed, for a total of U$S602 million. Disbursement has increased from 0.7 percent in July 2014 to 25.8 percent in November 2015. Current project ratings are MU for Progress towards achievement of PDO, and MS for Implementation Progress 3. The project development objectives are to: (i) improve sewerage services in the M- R River Basin and other parts of the Province and City of Buenos Aires by expanding transport and treatment capacity; (ii) support a reduction of industrial discharges to the M- R River, through the provision of CRI Grants; (iii) promote improved decision-making for environmentally-sustainable land use and drainage planning, and to pilot urban drainage and land use investments, in the M-R River Basin; and (iv) strengthen ACUMAR’s institutional framework for the ongoing and sustainable clean-up of the M-R River Basin. 4. Activities have now under almost full implementation with the start of five infrastructure contracts under Component 1, including the construction of: i) a 16 km underground sewerage main collector on the left bank of the M-R River and 18 km of secondary collectors (Lot 1) in the lower part of the basin to collect and convey the sewerage to the Riachuelo Wastewater Treatment Plant; ii) a 12 km underground subaquatic outfall (Lot 3) to adequately dispose of the sewerage in the La Plata River; iii) 6 a Sludge Treatment Plant for the Sudoeste WWTP of AySA (Agua y Saneamientos Argentinos S.A), and iv) two aeration stations (so-called SEPA). 5. Activities of Components 2 and 3 are now on track with more than US$100 million in works ready for bidding or at an evaluation stage. With the signature of these contracts, 95 percent of the loan proceeds will be committed. 6. Progress of activities under Component 4 is now moderately satisfactory. The capacity of ACUMAR and municipalities have been substantially strengthened to properly oversee the proposed investments, carry out and follow through strategic planning initiatives, improve their water quality monitoring abilities and develop adequate communication strategies. C. PROPOSED CHANGES 7. Extension of closing date. The proposed extension is the first step of a phased approach to extend the project closing date in order to allow all project activities to be completed. The proposed a 12-month extension will allow adequate time to start the proposed new activities while allowing the new Administration to review the impact of proposed changes before a further extension of the closing date. Project material progress will be assessed within one year before proposing a possible new extension. 8. Changes in the description of Component 2, Industrial Pollution Abatement. As part of the Industrial Pollution Abatement Component, it is proposed to include the construction of an industrial wastewater treatment plant (IWWTP) to treat the liquid discharges from Tannery Industrial Park in the Municipality of Lanús, Province of Buenos Aires, under the responsibility of ACUMAR. 9. The construction of said plant pursues the same objective as the implementation of the Industrial Conversion Agreements (CRIs). The ultimate goals from the IWWTP and the CRIs include: i) reducing industrial discharge in the M-R River, ii) supporting small and medium enterprises with weak financial and technical capacity to comply with environmental regulation, and iii) focusing on the main industrial polluters with significant organic and toxic loads that discharge to the M-R River. More importantly, the project will continue to support ACUMAR to develop plans for industrial restructuring (Planes de Reconversion Industrial, or PRIs) and finance CRIs signed with the Secretariat of the Environment and Sustainable Development (SAyDS). 10. The IWWTP is part of the industrial pollution program of the Government’s Plan for Environmental Remediation of the M-R Basin, PISA (for its initials in Spanish Plan Integral de Saneamiento Ambiental). Among the mandates of execution is the case "ACUMAR s / Industrial Pollution - ACUBA" registered as C.MA-R 280/5. Different judgments are requesting the presentation and implementation of the "Tannery Industrial Park" (TIP) project, in particular the one of December 19, 2012 in which the Supreme Court urged the presiding judge to conduct "special emphasis" on the TIP project to ensure compliance with the plan. 11. The industrial wastewater treatment plant will support environmentally sound production processes for 26 small and medium tannery enterprises and reduce substantially 7 industrial discharges to the M-R River, by 54 percent for organic waste (BOD5), 88 percent for total chromium, and 93 percent for Sulfurs, representing a reduction of industrial discharges of 103.000t/year of organic waste, 1.400t/year of chromium and 1.680 t/year of Sulfurs. The plant will be complemented with the construction of the Industrial collector, and these two works will allow the adequate treatment and safe disposal of 78 percent of the total tannery wastes discharged in the basin. This construction will not involve any resettlement. 12. The development of Tannery Industrial Park (TIP) is located in the District of Lanús, Province of Buenos Aires. It involves the installation of an exclusive industrial area intended for the establishment of the first 22 tannery companies in the area known as "ACUBA" whose domain was transferred to ACUMAR. Currently, 22 companies have agreed to move to the TIP. Three companies localized outside the TIP will use the plant for secondary treatment and another one to conduct its effluents directly into the Industrial Collector. 13. The infrastructure development and financing of the TIP is the responsibility of ACUMAR. On March 21, 2012 an agreement was signed between ACUMAR and the tannery companies defining each one’s role and responsibilities in the development and operation and maintenance of the TIP. On, October 4, 2012, tannery companies signed a contract with ACUMAR in which, in addition to setting the groundwork to proceed with the relocation of industrial plants or processes within the Tanner Industrial Park confirmed the allocated premises. Once constructed, the TIP, including the plant, will be managed by the association of the tannery companies (ACUBA). ACUMAR, and ACUBA will finalize, at least six months before works completion, the modalities for ensuring efficient and sustainable operation the TIP. 14. After the supervision mission held on March 2015, where the inclusion of the IWWTP for financing under the Project was agreed, the activity was included in the Procurement Plan. Bidding document and Environmental and Social Impact Evaluation for the industrial wastewater treatment plant are acceptable to the Bank. The expected bid- opening date is January 13, 2016. The estimated duration for the execution of the works is 24 months. 15. Reallocations between disbursement categories and creation of a new disbursement category. The proposed restructuring will: (i) Create a new cost category 9 to finance works under Components 2 and 3 to finance: a. the construction of an Industrial Treatment Plant in the Lanus Municipality to enable treatment of 70 percent of tannery effluent in the basin; b. water and sanitation services improvement for about 100,000 people living in low income settlements in the Province and City of Buenos Aires; and c. improving flood control system in the upper part of the basin. This category will have a loan cost distribution of 80% IBRD-20% GoA. (ii) Reallocate amounts of the Loan among disbursement categories of Eligible 8 Expenditures. 16. There are no changes in the percentage of expenditures to be financed. The changes are summarized in the table below. Amount of the Loan Allocated Changes Category (expressed in USD) (expressed in USD) Current Proposed (1) Works under Part 1 (a) of the Project 478,032,0002 576,412,000 +98,380,000 (2) Consultants’ services, goods and Training under 30,000,000 20,000,000 -10,000,000 Part 1 (b) of the Project (3) Works, goods and/or consultants’ services under 40,000,000 1,000,000 -39,000,000 CRI Subprojects (4) Eligible Expenditures for Parts 2 (a) through (d) and 3 55,000,000 7,100,000 -47,900,000 of the Project (5) Eligible Expenditures for Part 4 of the Project 14,000,000 7,820,000 -6,180,000 (6) Unallocated 98,900,000 0 -98,900,000 (7) Front-end Fee 2,100,000 2,100,000 0 (8) Premia for Interest Rate Caps and Interest Collars 0 0 0 (9) Works under Parts 2(f) and 3(g) of the Project 103,600,000 +103,600,000 TOTAL AMOUNT 718,032,000 718,032,000 0 17. Modifications to the Results Framework. The following table presents changes to the Results Framework to reflect modified activities and targets: Results Framework- Proposed Change PDO3: (no changes). The objectives of the Project are to: (a) improve sewerage services in the M-R River Basin, and other parts of the PBA and the CBA by expanding transport and treatment capacity; (b) support a reduction of industrial discharges to the M-R River, 2 US$122 million of the original loan amount were cancelled. 3 From the Loan Agreement 9 through the provision of CRI Grants; (c) promote improved decision-making for environmentally-sustainable land use and drainage planning, and to pilot urban drainage and land use investments, in the M-R River Basin; and (d) strengthen ACUMAR’s institutional framework for the ongoing and sustainable clean-up of the M-R River Basin Original Indicators Proposed New Indicator Comments (Justification Change (if New or of proposed Change) D=Dropped Revised) C=Continue N= New R=Revised PDO Indicators Component 1 a) Percentage of all sewage (about 12m3/s) that is currently discharged from AySA’s concession area to the La C Plata River without adequate treatment that is appropriately treated and disposed of by the end of APL-1 ACUMAR, as part of Component 2 their obligations, b) (i) Percentage of performs regular regular monitoring for at monitoring campaigns of least the 50 most the most polluting polluting enterprises to D enterprises and also of track progress in many other enterprises reducing industrial located in the Matanza- pollution. Riachuelo basin, they are exceeding the target In order to measure the Volume (mass) of COD impact of the activities pollution load reduction financed under N achieved under the Component 2 of the project (Tons/year) Project a new indicator is proposed. Number of (ii) Percentage of the enterprises in the enterprises in the matching grants Due to the little progress matching grants program program that in the CRIs, the unit of that have effectively R have effectively measure is being changed reduced their discharge reduced their and the target value loads according to their discharge loads modified PRIs by the end of APL- according to their 1. PRIs Updated ACUMAR has finalized Component 3 Drainage Master the TORs for the c) Both plans (Integrated R Plan agreed with Drainage Master Plan. On Territorial Development key stakeholders the other hand, the Plan for the M-R Basin and are piloted Integrated 10 and updated Drainage Territorial Development Master Plan) are agreed Plan activity as such has with key stakeholders been dropped during the and implementation restructuring. arrangements are piloted A participatory forum To measure improved for environmentally- decision-making for sustainable land use with N environmentally- municipalities at the sustainable land use in Basin level is in place the M-R River Basin Component 4 ACUMAR has fully staffed against its new organigram, operates C with its own operating budget and is fully able to fulfill the functions vested in it by law. Intermediate Results Indicators Component 1 a) Linear kilometers of the Left Bank collector C (including Baja Costanera bypass collector) completed b) Linear kilometers of This indicator is no Right Bank collector longer valid as the completed construction of the Right Bank collector has been replaced by the construction of various D WWTP financed under Government program, complemented with several aeration stations some of them financed under the loan. c) Linear kilometers of the Riachuelo outfall C completed c) Percentage of the The Riachuelo treatment Riachuelo treatment D plant is not being plant construction financed under the project completed This indicator is revised. Field audits Component 2 ACUMAR conducts conducted by b) ACUMAR conducts multiple samplings and R ACUMAR, field audits, including field audits of a much including sampling/lab tests of the higher number of sampling/lab tests enterprises located in the 11 50 most polluting of the enterprises basin. The new indicator enterprises of the basin. of the basin. will allow the measurement of the exact number of enterprises being monitored Component 3 a) Satisfactory The indicator is not preparation of integrated appropriate to measure regional and local land- D the progress of the use plans taking into activities being financed account the river basin and implemented protection perspective b) Satisfactory update of the Drainage Master C Plan c) Percentage of funds disbursed for activities Since activities have been to indicate satisfactory selected, new indicators implementation of pilot looking for the progress D integrated urban of said activities are interventions, taking into selected in lieu of this account the river basin indicator. protection perspective Number of This indicator is to beneficiaries with measure the number of improved access beneficiaries from the to water and pilot activities under N sanitation service Component 3 with in poor improved access to water settlements and sanitation services in poor settlements d) Percentage of funds Percentage of funds disbursed for activities disbursed does not to indicate satisfactory D indicate the satisfactory implementation of pilot implementation of drainage interventions drainage interventions. Component 4 Percentage of staffing completed on basis of C staffing plan developed by ACUMAR D. APPRAISAL SUMMARY 18. No changes to the Economic and Financial Analysis, Technical Analysis, Social Analysis or Environmental Analysis are proposed. 19. The Project includes environmental considerations that were developed during Project preparation to ensure the Project’s environmental sustainability and its compliance with Argentina’s national regulations and the World Bank Group’s safeguard policies. The Project has been qualified as “Category A,� following OP/BP 4.01 – Environmental 12 Assessment. The main environmental impacts expected from the Project would be those connected to the construction of the infrastructure under Component 1 and these have been mitigated through the implementation of the EIAs and ESMP for each sub-project. 20. The physical investments meet the screening criteria for environmental and social sustainability as defined in the Operations Manual and EMFs for Component 2 and for Component 34. After the screening criteria, the proposed IWWTP5 part of Component 2 resulted in an Environmental and Social Impact Evaluation and its corresponding Environmental Management Plan that was given the Bank’s No Objection on September 2015 and was published in country on October 21st 2015. All environmental permits are up to date, and supervision visits confirm that the environmental management of all sub- projects is implemented, monitored as required by the ESMPs. Project’s ISDS has been updated due to financing of the Industrial Wastewater treatment Plant for the Tanneries Industrial Park in Lanus Municipality and published. 21. Neither the loan in particular nor Argentina in general, is subject to an ongoing suspension of disbursements. No audit reports are outstanding or not satisfactory to the Bank for the project. 22. Risks. The risk of the proposed restructuring is rated High. Annex 2 presents the Systematic Operations Risk-Rating Tool (SORT). The main risk associated with the Project is the possibility to finish on time the ongoing works. As the nature of the works under Component 1 is very complex and there are risks inherent to large works underground, close supervision and monitoring on the works execution is crucial to guarantee actions can be taken to solve any problem or bottleneck, limiting the risk of not achieving completion of the works. 4 The EMFs for Components 2 and 3 as well as the RPF are included in the Operations Manual. 5 Being tendered 13 Annex 1: Revised Results Framework Project Matanza-Riachuelo Basin (MRB) Sustainable Development Project Restructuring Status: DRAFT Name: Adaptable Lending Program (P105680) Stage: Team Requesting Leader(s) Christophe Prevost LCC7C Created by: Daniel Mira-Salama on 10-Mar-2015 Unit: : Product Responsible IBRD/IDA GEN04 Modified by: Maria Catalina Ramirez on 19-Nov-2015 Line: Unit: Country: Argentina Approval FY: 2009 LATIN AMERICA AND Lending Region: Adaptable Program Loan CARIBBEAN Instrument: . Project Development Objectives Original Project Development Objective (from the loan agreement): The project development objectives are to: (i) improve sewerage services in the M-R River Basin and other parts of the Province and City of Buenos Aires by expanding transport and treatment capacity; (ii) support a reduction of industrial discharges to the M-R River, through the provision of CRI Grants; (iii) promote improved decision-making for environmentally-sustainable land use and drainage planning, and piloting urban drainage and land use investments, in the M-R River Basin; and (iv) strengthening the M-R River Basin Authority’s (ACUMAR) institutional framework for ongoing and sustainable clean-up of the M-R River Basin. Results Core sector indicators are considered: Yes Results reporting level: Project Level . Project Development Objective Indicators Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target 14 No Change Percentage of all sewage (about Percentage Value 0.00 35.00 12m3/s) that is currently Date 27-Apr-2009 19-Nov-2015 31-Mar-2017 discharged from AySA concession area to the La Plata Comment River without adequate treatment that is appropriately treated and disposed of by end of APL-1 Marked for Percentage of regular Percentage Value 0.00 1800.00 100.00 Deletion monitoring for at least the 50 Date 27-Apr-2009 19-Nov-2015 31-Mar-2016 most polluting enterprises to track progress in reducing Comment industrial pollution New Volume (mass) of COD X Tons/year Value 0.00 0.00 62,400.00 pollution load reduction Date 19-Nov-2015 19-Nov-2015 31-Mar -2017 achieved under the project. Comment Both from Both from CRIs Both from CRIs CRIs and and Industrial and Industrial Industrial Wastewater Wastewater Wastewater treatment plant treatment plant treatment plant Revised Percentage of the enterprises in Percentage Value 0.00 1.00 50.00 the matching grants program Date 27-Apr-2009 19-Nov-2015 31-Mar-2017 that have effectively reduced their discharge loads according Comment to their PRIs by the end of APL-1. Number of the enterprises in Number Value 0.00 1.00 3.00 the matching grants program Date 31-Oct-2013 19-Nov-2015 31-Mar-2017 15 that have reduced their Comment discharge loads according to their PRIs Revised Both plans (Integrated Number Value 0.00 0.00 2.00 Territorial Development Plan Date 27-Apr-2009 19-Nov-2015 31-Mar-2017 for the M-R River Basin and updated Drainage Master Plan) Comment are agreed with key stakeholders and implementation arrangements are piloted Updated Drainage Master Plan Yes/No Value No No Yes agreed with key stakeholders Date 19-Nov-2015 19-Nov-2015 31-Mar-2017 and piloted Comment No Change ACUMAR has fully staffed Text Value Yes Yes against its new organigram, Date 19-Nov-2015 31-Mar-2017 operates with its own operating budget and is fully able to Comment fulfill the functions vested in it by law. A participatory forum for Yes/No Value No No Yes environmentally-sustainable New Date 19-Nov-2015 19-Nov-2015 31-Mar-2017 land use with municipalities at the Basin level is in place Comment Intermediate Results Indicators Status Indicator Name Core Unit of Measure Baseline Actual(Current) End Target No Change Kilometers Value 0.00 0.00 18.00 16 Linear kilometers of the Left Date 27-Apr-2009 19-Nov-2015 31-Mar-2017 Bank collector (including Baja Comment Costanera bypass collector) completed Marked for Linear kilometers of Right Kilometers Value 0.00 0.00 37.00 Deletion Bank collector completed Date 27-Apr-2009 19-Nov-2015 31-Mar-2017 Comment No Change Linear kilometers of the Kilometers Value 0.00 0.00 11.50 Riachuelo outfall completed Date 27-Apr-2009 19-Nov-2015 31-Mar-2017 Comment Marked for Percentage of the Riachuelo Percentage Value 0.00 0.00 100.00 Deletion preliminary treatment plant Date 01-Dec-2009 19-Nov-2015 31-Mar-2017 construction completed Comment Revised ACUMAR conducts field Number Value 0.00 1351.00 50.00 audits, including sampling/lab Date 27-Apr-2009 19-Nov-2015 31-Mar-2017 tests of the 50 most polluting enterprises of the basin Comment Field audits conducting by Number Value 0.00 1351.00 1400.00 ACUMAR, including Date 27-Apr-2009 19-Nov-2015 31-Mar-2017 sampling/lab tests of enterprises of the basin. Comment Marked for Satisfactory participatory yes/no Value 0.00 0.00 2.00 Deletion process led by ACUMAR to Date 27-Apr-2009 19-Nov-2015 31-Mar-2017 foster the preparation of integrated regional and local Comment 17 land-use plans taking into account the river basin protection perspective No Change Satisfactory update of the Yes/No Value No No Yes Drainage Master Plan Date 19-Nov-2015 31-Mar-2017 Comment TORs finalized, Drainage Master bidding process Plan updated ongoing. Marked for Percentage of funds disbursed Percentage Value 0.00 0.00 100.00 Deletion for activities to indicate Date 27-Apr-2009 19-Nov-2015 31-Mar-2016 satisfactory implementation of pilot integrated urban Comment interventions, taking into account the river basin protection perspective Marked for Percentage of funds disbursed Percentage Value 0.00 0.00 100.00 Deletion for activities to indicate Date 27-Apr-2009 19-Nov-2015 31-Mar-2016 satisfactory implementation of pilot drainage interventions Comment New Number of beneficiaries with Number Value 0.00 0.00 50,000.00 improve access to water and Date 19-Nov-2015 19-Nov-2015 31-Mar-2017 sanitation service in poor settlements Comment No Change Percentage of staffing Percentage Value 0.00 70.00 100.00 completed on basis of staffing Date 27-Apr-2009 19-Nov-2015 31-Mar-2017 plan developed by ACUMAR Comment 18 Annex 2: Systematic Operations Risk-Rating Tool (SORT) Systematic Operations Risk-Rating Tool (SORT) Risk Category Rating 1. Political and Governance H 2. Macroeconomic H 3. Sector Strategies and Policies S 4. Technical Design of Project or Program H 5. Institutional Capacity for Implementation and Sustainability S 6. Fiduciary M 7. Environmental and Social H 8. Stakeholders H 9. Other H OVERALL H 19