Document of The World Bank Report No: ICR00001522 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-39710, IDA-39711 and IDA-45660) ON A CREDIT IN THE AMOUNT OF SDR 34.6 MILLION (US$ 51 MILLION EQUIVALENT) TO THE GOVERNMENT OF GHANA FOR A SMALL TOWNS WATER AND SANITATION PROJECT January 31, 2011 Urban and Water Unit Sustainable Development Department Country Department AFCW1 Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2010) Currency Unit = Ghanaian Cedi GH 1.4852 = US$1 US$ 0.6493 = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CBO Community Based Organization CBRDP Community Based Rural Development Project CWSA Community Water and Sanitation Agency CWSP Community Water and Sanitation Project DANIDA Danish International Development Agency DTRB District Tender Review Board DWSP District Water and Sanitation Plan DWST District Water and Sanitation Team DA District Assembly ESMF Environmental and Social Management Framework GoG Government of Ghana GPRS Growth and Poverty Reduction Strategy ICR Implementation Completion Report IDA International Development Association MMDAs Metropolitan, Municipal or District Assemblies MDG Millennium Development Goals M&E Monitoring and Evaluation MLGRD Ministry of Local Government and Rural Development MoFEP Ministry of Finance and Economic Planning MWRWH Ministry of Water Resources Works and Housing NCWSP National Community Water and Sanitation Project NGO Non-Governmental Organization O&M Operations and Maintenance PDO Project Development Objectives PIM Project Implementation Manual RPF Resettlement Policy Framework RCC Regional Coordinating Council RTRB Regional Tender Review Board ii RWSS Rural Water Supply and Sanitation RWST Regional Water and Sanitation Team SDR Special Drawing Right STWSSP Small Towns Water Supply and Sanitation Project WSDB Water and Sanitation Development Board Vice President: Obiageli Katryn Ezekwesili Country Director: Ishac Diwan Sector Director: Jamal Saghir Sector Manager: Junaid Kamal Ahmad Project Team Leader: Ventura Bengoechea ICR Team Leader: Emmanuel Nkrumah iii GHANA Small Towns Water Supply and Sanitation CONTENTS 1. Project Context, Development Objectives and Design ............................................... 1 2. Key Factors Affecting Implementation and Outcomes............................................... 4 3. Assessment of Outcomes ............................................................................................ 7 4. Assessment of Risk to Development Outcome......................................................... 10 5. Assessment of Bank and Borrower Performance...................................................... 10 6. Lessons Learned........................................................................................................ 12 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners........... 14 Annex 1. Project Costs and Financing .......................................................................... 15 Annex 2. Outputs by Component.................................................................................. 16 Annex 3. Economic and Financial Analysis ................................................................. 17 Annex 4. Bank Lending and Implementation Support/Supervision Processes............. 25 Annex 5. Beneficiary Survey Results ........................................................................... 28 Annex 6. Stakeholder Workshop Report and Results................................................... 29 Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR ..................... 30 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 42 Annex 9. List of Supporting Documents....................................................................... 42 MAP iv A. Basic Information Small Towns Water Country: Ghana Project Name: Supply and Sanitation Project IDA-39710,IDA- Project ID: P084015 L/C/TF Number(s): 39711,IDA-45660 ICR Date: 01/31/2011 ICR Type: Core ICR GOVERNMENT OF Lending Instrument: APL Borrower: GHANA Original Total XDR 17.8M Disbursed Amount: XDR 29.8M Commitment: Revised Amount: XDR 29.8M Environmental Category: B Implementing Agencies: Community Water and Sanitation Agency Cofinanciers and Other External Partners: B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 11/10/2003 Effectiveness: 11/17/2004 11/17/2004 Appraisal: Restructuring(s): 05/12/2009 Approval: 07/27/2004 Mid-term Review: 07/03/2007 07/10/2007 Closing: 04/30/2009 04/30/2010 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Moderate Bank Performance: Satisfactory Borrower Performance: Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Satisfactory Implementing Quality of Supervision: Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Satisfactory Satisfactory Performance: Performance: i C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry No None at any time (Yes/No): (QEA): Problem Project at any Quality of No None time (Yes/No): Supervision (QSA): DO rating before Moderately Closing/Inactive status: Satisfactory D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Other social services 5 5 Sanitation 20 10 Sub-national government administration 5 5 Water supply 70 80 Theme Code (as % of total Bank financing) Decentralization 17 20 Other human development 33 30 Rural services and infrastructure 33 40 Small and medium enterprise support 17 10 E. Bank Staff Positions At ICR At Approval Vice President: Obiageli Katryn Ezekwesili Callisto E. Madavo Country Director: Ishac Diwan Mats Karlsson Sector Manager: Junaid Kamal Ahmad Inger Andersen Project Team Leader: Ventura Bengoechea Paul Kriss ICR Team Leader: Emmanuel Nkrumah ICR Primary Author: Emmanuel Nkrumah F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) To increase access to small towns water supply and sanitation services in six regions over the next 4 years, providing 500,000 people with water supply facilities, and 50,000 people with sanitary facilities. ii Revised Project Development Objectives (as approved by original approving authority) To increase access to small towns water supply and sanitation services in six regions over the next 4 years, providing 550,000 people with water supply facilities, and 50,000 people with sanitary facilities. (a) PDO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Provide 550,000 people with access to water supply an 50,000 people with Indicator 1 : access to sanitation 550,000 and 500,000 and 561,754 and 50,424 50,000 people Value 50,000 people with people gained with access to quantitative or 0 access to water access to water and water and Qualitative) and sanitation, sanitation, sanitation, respectively respectively respectively Date achieved 05/17/2004 11/17/2004 05/12/2009 04/30/2010 Comments PDO targets were fully achieved and slightly exceeded for access to water and (incl. % sanitation (102.14% for water and 1.01%, respectively) achievement) (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Participating small towns effectively using their systems and managing them in a sustainable manner. Number of Water Boards fully trained through project, Indicator 1 : water systems completed, functioning as designed and collecting fees to cover O&M Value (quantitative 0 100% 100% or Qualitative) Date achieved 05/17/2004 11/17/2004 04/30/2010 Comments A total of 73 Water Boards were formed and trained and 73 systems were (incl. % completed and are working as designed and collection fees to cover O&M achievement) Capacity of participating districts, regional governments, Water Directorate at Indicator 2 : the MWRWH and private sector developed to fulfill their roles 100% of 100% of Value participating participating (quantitative 0 districts and districts and or Qualitative) regional regional governments governments iii Date achieved 05/17/2004 11/17/2004 04/30/2010 All participating 44 districts and the corresponding 6 regional governments Comments received capacity, as well as 58 private service providers. Water Directorate (incl. % received support from other donors in line with Paris Declaration for achievement) coordination and harmonization G. Ratings of Project Performance in ISRs Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 11/24/2004 Satisfactory Satisfactory 0.00 2 04/21/2005 Satisfactory Satisfactory 2.50 3 11/22/2005 Satisfactory Satisfactory 2.50 4 03/24/2006 Satisfactory Satisfactory 3.44 5 09/25/2006 Satisfactory Satisfactory 7.62 6 03/19/2007 Satisfactory Satisfactory 10.13 7 09/12/2007 Satisfactory Satisfactory 12.70 8 03/11/2008 Satisfactory Satisfactory 16.82 9 08/07/2008 Satisfactory Satisfactory 18.63 10 02/06/2009 Satisfactory Satisfactory 21.99 11 06/21/2009 Satisfactory Satisfactory 27.48 12 12/01/2009 Moderately Satisfactory Moderately Satisfactory 34.25 H. Restructuring (if any) ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made PDO Change DO IP in USD millions 05/12/2009 Y S S 25.93 If PDO and/or Key Outcome Targets were formally revised (approved by the original approving body) enter ratings below: Outcome Ratings Against Original PDO/Targets Satisfactory Against Formally Revised PDO/Targets Satisfactory Overall (weighted) rating Satisfactory iv I. Disbursement Profile v 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal Country background: In 1988 the Government of Ghana initiated a decentralization policy that assigned responsibilities in the following manner: (i) policy making, overall planning, facilitation, monitoring, evaluation and promotion were assigned to central government ministries and departments; (ii) facility planning, design, implementation and operation were assigned to local governments; and (iii) coordination and oversight were assigned to the Regional Coordinating Councils (RCCs) and their respective Regional Planning Coordinating Units. The decentralization reforms are enshrined in the 1992 Constitution, which stipulates that “Parliament shall enact appropriate laws to ensure that functions, powers and responsibilities and resources are at all times transferred from central government to local government units in a coordinated manner.” In 1993, the Government enacted Local Government Act (Act 462) to regulate political and administrative arrangements for local government units (Metropolitan, Municipal or District Assemblies, MMDAs). Since then, several other laws pertaining to local governance systems have been enacted.1 In line with the decentralization policy, the mandate for implementation of development programs lies with the respective District Assemblies. Sector background: The Government of Ghana’s strategy for rural water supply and sanitation was embedded in the Growth and Poverty Reduction Strategy (GPRS) and stressed that increasing access to potable water and sanitation was key to achieving health outcomes and sustained poverty reduction. The draft National Water Policy of April 2004 emphasized the need for community ownership of facilities, based on a demand-driven approach and private sector participation in the supply of goods and services. It further stated that the overall objective of the Community Water Supply and Sanitation Program was to “improve the public health and economic well-being of rural and small town communities through provision of adequate, safe and sustainable water for domestic, commercial and industrial purposes in a planned and coordinated manner, with integrated hygiene education and sanitation interventions.” The draft policy letter validated the GoG’s commitment to a demand-driven strategy, where communities pay a percentage of the capital costs of systems as well as all of the operations and maintenance costs, and are responsible for planning and managing their facilities. The demand-driven approach was seen as key to promoting sustainability of the systems. Other key principles included creating an adequate market for spare parts and repair services, ensuring participation of all stakeholders, promoting the active involvement of women in all phases of water supply and sanitation, and clearly defining and promoting the role of the informal and formal private sector. Rationale for Bank involvement: Rural Water Supply and Sanitation (RWSS) was identified as a priority area by the Ghana GPRS, and achieving the Millennium Development Goals (MDGs) was a key consideration in scaling-up investments in the water sector. Consequently, the FY04-07 Country Assistance Strategy (CAS) included ample support to the reforms and to the increase in coverage in Ghana’s water sector. The 2 support was to be provided by means of this Small Town Water Supply and Sanitation Project (STWSSP) and the Community Based Rural Development Project (CBRDP). The World Bank was an active player in the rural sector in Ghana by means of several on-going projects in the areas of agriculture, health, education, and decentralization. The Bank’s comparative advantage was in its long history in the water and rural sectors in Ghana. In addition, the STWSSP could assist with refining the district-based RWSS programs in six regions. 1 The laws enacted since 1993 include: 1994 National Planning Act 480; 1994 Local Government (Urban, Zonal and Town Councils and Unit Committees) Establishment Instrument (LI 1589); 2003 Local Government Service Act 656; 2003 District Assembly’s Common Fund Act 455; 2003 Audit Service Act 584; 2003 Financial Administration Act 654; 2003 Internal Audit Act 658; 2003 Procurement Act 663; 2004 Financial Administration Regulations (LI 1802); and Local Government District Tender Board Regulations (LI 1606). 2 Second phase of the Second Community Water and Sanitation Project (CWSP2). This Adaptable Program Loan (APL) was approved in 1999 to empower district assemblies to plan, design and execute their own RWSS programs. The program’s ultimate objective was to support the GoG in its goal to extend access to, and increase the sustainability of, RWSS facilities 3 Further, under the previous project , there had been a significant amount of analytical work and a few associated pilot activities related to innovative management models for small town water supply and the promotion of private sector involvement. Therefore, the second phase provided the opportunity to systematically apply these lessons on a large scale. 1.2 Original Project Development Objectives and Key Indicators The original Project Development Objective (PDO) was to increase access to water supply and sanitation services to small towns located in six regions of Ghana over a period of five years, providing 500,000 people with water supply facilities, and 50,000 people with sanitation facilities. This equaled approximately 8.3 percent and 0.94 percent of the incremental population to be reached in order to achieve the water and sanitation MDGs, respectively. The key development indicators for measuring principal project outcomes included; a) Number of Water Boards trained and functioning b) Number of people served with improved access to water supply c) Number of people served with improved access to sanitation facilities 1.3 Revised Project Development Objective (as approved by original approving authority) and Key Indicators, and reasons/justification The original PDO of providing 500,000 people with water supply facilities was increased to 550,000 as a result of the additional financing approved by the Board on May 12, 2009. The target population for sanitation coverage and the key indicators remained the same. The justification for this additional financing was: (i) to finance unanticipated cost overruns in community water supply and sanitation subprojects to enable the Borrower to complete the project activities and achieve the original development objectives, and (ii) to further expand access to water supply services to some of the beneficiary regions whose water supply coverage was relatively very low, as compared to the national coverage, as part of the efforts to meet the MDG target. 1.4 Main Beneficiaries The project involved the provision of water supply and sanitation facilities to 734 small town communities in 44 districts in six regions in Ghana: Ashanti, Brong-Ahafo, Upper East, Upper West, Central, and Western. It addressed the main issues related to the provision of small towns’ water supply and sanitation services, as well as measures of institution building and capacity enhancement of several sector institutions. 1.5 Original Components The project was the second phase of the Community Water and Sanitation Program (CWSP2). The main difference between the first phase (CWSP2-1) and the second phase (CWSP2-2) was that the second phase focused on small town water and sanitation systems while the first included community systems. The project had three components: Community Subprojects (US$24.8 million, of which IDA contributed US$21.6 3 First phase of the CWSP2 APL 4 The original target of 62 communities was increased to 73 with the additional funding approved for the project. 2 million); Sector Support (US$3.7 million, of which IDA contributed US$3.1 million); and Project Management (US$2.5 million, of which IDA contributedUS$1.3 million). Component 1 - Community Subprojects: This component provided resources for water and sanitation services in four types of contexts: a) Small town subprojects planned but not implemented under CWSP2-1 b) New small town systems (planned and implemented under STWSSP) c) Rehabilitation of existing small town systems d) Institutional and household sanitation facilities and hygiene promotion activities in small towns This component provided assistance to small towns and schools through grants to respective District Assemblies (DAs) for: (i) the construction/rehabilitation of their water and sanitation facilities; and (ii) financing technical assistance and community development activities to strengthen small towns’ capacity to plan, implement, operate and maintain water and sanitation facilities in an effective and sustainable manner. The subprojects were to be implemented on the principle of community demand which required financial contribution from the small town and the DA (5 percent each for water supply, institutional latrines, and more for household sanitation), and to be accompanied by community development and technical assistance support. The target groups for this component were dwellers in small towns located in the six selected regions. The component improved the quality of life in several ways, including a reduction in the incidence of water- borne and excreta-related diseases, as well as increased time-savings, productivity, and school attendance. Component 2 - Sector Support: This component supported training and technical assistance for key stakeholders to improve their capacity to fulfill their sector roles. Support was provided to: (i) DAs, District Works Departments and District Water and Sanitation Teams (DWST) by providing basic equipment (e.g. computers, motorbikes) and practical training in procurement, contract management, accounting, hygiene, and community participation; (ii) local providers of goods and services, through a voucher scheme which facilitated demand-driven training for the private sector and community-based organizations (CBOs); (iii) development of training materials (such as community and district operational manuals) and studies related to monitoring and evaluation (M&E); (iv) regional structures involved in project monitoring, such as the Regional Coordinating Council (RCC), which received general orientation on the project and sector and specific training in the area of M&E activities, and Regional Water and Sanitation Team (RWST) staff who received training to address their specific capacity building needs; and (v) the Directorate for Water in the Ministry of Water Resources Works and Housing (MWRWH)5, which received support through training and technical assistance to enable it to fulfill its role in planning and monitoring overall RWSS access in the country and progress towards meeting the MDGs. Component 3 - Program Management: This component provided a management fee to the Community Water and Sanitation Agency (CWSA) to support incremental costs incurred by the Agency to manage the project. The component assisted CWSA to develop its role as a facilitator and strengthen sector planning, donor coordination, funds mobilization, and program management role. 1.6 Revised Components 5 Formerly (at the time of appraisal) Ministry of Works and Housing (MWH) 3 The activities financed under the different components were not revised. However, the amounts allocated for each of the components were increased as a result of two additional credits. The original Credit Agreement was amended on August 8, 2007 to provide an additional financing of US$10 million equivalent. A second additional credit of US$15 million equivalent was approved on May 12, 2009. The additional financing was requested in view of an anticipated financing gap due to: (i) higher per capita investment costs than projected resulting from predominance of participating towns with smaller population sizes; and (ii) significant increase in the cost of imported construction materials in the entire region, and in Ghana in particular, by the time the tenders took place. The second additional financing helped also to scale up access to water in four regions where access to clean water was low compared to the national average and the population was suffering from water borne disease such as guinea-worm infections. Scaling up the impact in those districts under a well- performing project was considered the best way to respond to the urgent needs of the population. Therefore, the second additional financing supported the provision of access to water supply to 50,000 more people by including an additional 11 towns in four of the beneficiary regions. The final breakdown of the financing for the various components was as follows: Component 1: Community Subproject (US$42.5 million) Component 2: Sector Support (US$6.3 million) Component 3: Project Management (US$2.9 million) By the April 30, 2010 Project Closing Date, there was a remnant of US$7.5 million that was cancelled, out of the total of about US$54 million equivalent provided between the original and the two additional credit financings. The project savings were mainly a result of local currency devaluation against the US dollar and the US dollar against the SDR. 1.7 Other significant changes The Small Towns Water Supply and Sanitation Project became effective in November 2004 and was scheduled to close on April 30, 2009. The project closing date was extended by 12 months to allow for the construction of additional water supply systems. The project closed on April 30, 2010 and a four-month grace period was granted to submit disbursement applications for works completed, goods delivered, or services provided before the closing date. A significant change was agreed during the negotiations for the second additional financing to build 11 new small town water systems. Indeed, the requirement that the District Assemblies and beneficiaries each contribute 5 percent of the capital cost was removed at the request of the GoG. The justification was that the new beneficiary communities had relatively low income levels, and also, because of fiscal constraints, the GoG would not be able to provide additional budgetary funds to the districts to meet their share of the subproject costs. This was in line with a statement made by the new administration to waive community contributions upon taking office in January 2009. Therefore, IDA agreed to finance 100 percent of subproject costs of the 11 new small town water systems. However, this change of rules during the course of the implementation of the project created problems with the collection of contributions from the existing beneficiaries that were not part of the waiver. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry The project was designed taking into account the GoG’s decentralization policy and lessons from previous projects. Therefore, the project provided technical assistance (TA) to increase local government capacity for subproject planning, design, and implementation. The first project to operationalize the Ghana National 4 Community Water and Sanitation Program (NCWSP) was the CWSP2, which made the DAs play pivotal roles in the planning, implementation, and management of sustainable safe water supply and improved sanitation facilities and services. The STWSSP deepened the process of decentralization by building local level capacities to implement the project, with CWSA as facilitator. Resources, according to the project design, were channeled to District Assemblies based on their expressed demand to provide water supply and sanitation facilities to their communities. The project also supported strengthening CWSA’s role as facilitator and coordinator of the national community water and sanitation program implementation. The project preparation process included a study on major topics related to project implementation such as: (i) contract management; (ii) institutional implementation and arrangements; (iii) financing and flow of funds; (iv) sanitation and hygiene education; and (v) small town water supply. Several other studies reviewed the community participation and capacity aspects of the first phase of the CWSP2. It also included conclusions based on experience from other Bank and Development Partners (DP) funded projects, as well as other sector reviews and papers. All District Assemblies located within the project regions were eligible to benefit from the project. However, in line with the demand driven approach for community water and sanitation projects, to access subproject grants the DAs had to: (i) contribute 5 percent of the investment cost of anticipated subprojects for the district; (ii) appoint qualified technical staff to manage subproject implementation; (iii) prepare a rolling district water and sanitation plan (DWSP) to be reviewed and updated annually; and (iv) submit acceptable subproject proposals and procurement plans. After the selection of the beneficiary districts, the next step was selection of the beneficiary small towns. The small towns were initially selected by the DA based on criteria that included: poverty, existing water and sanitation facilities, district-development plans, and expressed willingness of community members to contribute 5 percent of the cost and assume full responsibilities for operation and maintenance (O&M) of the selected facilities. Consistent with the demand driven approach, small towns were requested to submit an application form and deposit a minimum fee into their bank account. Only communities that had submitted a completed application were included in the project on a first-come, first-served basis. With regard to sanitation, approaches were developed to: (i) provide a robust framework for promoting sanitation and hygiene in small towns; and (ii) establish a cost-sharing arrangement to ease the burden on households in the construction of appropriate latrine. The project provided TA to assist CWSA, which had little experience with small town sanitation and had not yet defined an appropriate approach to the issue. The approach included the provision of latrine technologies which comprised mainly low-cost sanitation options. 2.2 Implementation Project Changes/Restructuring The key project changes were the one-year extension of the project closing date, the adjustments to the project cost, financing plan, and outcome indicators following the two additional credits, and the change in government policy to curtail the 5 percent community contributions. The change in policy with regard to the community contribution was a major deviation from the original project design which was premised on the demand-responsive approach as a key contributor to systems sustainability. The government policy required 5 percent contribution by communities and 5 percent contribution from the District Assemblies. There were no changes to project development objectives or project design, implementation arrangements, financial management, and procurement arrangements. 2.3 Monitoring and Evaluation Design, Implementation and Utilization 5 The project’s monitoring and evaluation (M&E) system was designed to serve as a tool for project stakeholders, enabling them to assess implementation on a timely basis so that the project objectives and corresponding targets could be evaluated and corrective measures applied, if necessary. The M&E system was based on a participatory approach, with stakeholder groups given training and responsibility to perform their respective roles. With regard to data collection for M&E, a mixture of methodologies was used to obtain data for the proposed project’s outcome and results indicators. These included: (i) traditional methods of data gathering, analysis, and reporting to monitor implementation progress (i.e. CWSA quarterly reporting on activities and outputs as well as periodic technical audits of districts); (ii) participatory methods that brought together on a regular basis the beneficiary communities (represented by the members of the Community Water and Sanitation Development Boards), the DAs as project implementers, and the CWSA as facilitators of the overall project implementation, to evaluate the effectiveness and sustainability of activities undertaken and provide feedback for improving processes; and (iii) periodic field supervision missions by the World Bank. The periodic participatory M&E workshops provided opportunity to discuss results with all stakeholder groups. A key task of the M&E system was to report on progress toward meeting the MDG targets as well as identification of any constraints affecting implementation. CWSA’s annual work plans indicated their relationship with MDG targets, and the quarterly reports indicated progress against completion targets. The reports were distributed to the Regional Coordinating Councils and the Minister of Water Resources Works and Housing. 2.4 Safeguard and Fiduciary Compliance The CWSA had gained good experience in safeguards issues from previous projects, and they demonstrated this in the project. Key project staff were conversant with basic safeguards requirements of projects. Cases of environmental and social safeguards relating to the project were addressed with required compensation paid to affected persons. Through capacity building programs, Water and Sanitation Development Boards (WSDBs) at the community level had acquired fair knowledge of safeguard issues. Some WSDBs included land acquisition, with appropriate documentation, in their site meeting reports. CWSA facilitated the safeguard process based on agreed actions at support missions which included: (i) a closer reference to the project’s Resettlement Policy Framework (RPF), (ii) engagement of consultants to monitor implementation; (iii) making available documentation on plots acquired for construction; (iv) enforcement of safeguards measures during construction work (e.g. ensuring that construction workers wear the appropriate protective clothing). 2.5 Post-completion Operation/Next Phase The Water and Sanitation Development Boards in each of the beneficiary communities were trained to take over the water supply systems operations. So far, all the water supply systems are working under the oversight of the District Assemblies with facilitation by the CWSA Regional offices. The District Assemblies have the DWSTs responsible for monitoring the operations of the small towns within the districts. District Works Departments with Water and Sanitation Units have been established in some of the districts to monitor operations. The CWSA has also prepared an Operations Manual that will guide the operation and maintenance of the systems. With respect to gender, the WSDBs at the various small towns demonstrated their commitment to gender equity and representation as all the water boards had women representatives with some of the women as executive members. Some of the women, notably queen mothers in the traditional authorities, were already involved in key decision making aspects of project implementation such as fixing of tariffs, participation in site meetings, and general consultation and engagement on the project activities. 6 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design, and Implementation The project objective was consistent with the Government’s strategy for rural water supply and sanitation as embedded in the Ghana Poverty Reduction Strategy (GPRS) which stresses that increasing access to potable water and sanitation is key to achieving health outcomes and sustained poverty reduction. The GPRS contained five medium-term priorities: infrastructure, modernized agriculture and rural development, enhanced social services, good governance, and private sector development. The project supported four of these priorities through the provision of basic infrastructure and social services, the promotion of decentralized and accountable governance, and by enabling the private sector to develop through the provision of rural water and sanitation services. The project also directly supported the three central pillars of the 2004-2006 Country Assistance Strategy (CAS) consisting of: (i) improved service delivery; (ii) enhanced governance and empowerment; and (iii) growth and employment generation. More specifically, reducing water-borne and sanitation-related diseases, and ensuring environmental sustainability are all included in the MDGs and were addressed through the project by constructing water supply and sanitation facilities and changing behavioral practices, such as those related to hand-washing. The project objective was also in line with other aspects of the CAS. The Bank’s involvement in rural water supply and sanitation in Ghana facilitated the process of harmonization in the sector, wherein the Bank worked with the Government and other donors to promote the use of common operational procedures throughout the country. The Bank, Government, and other Development Partners are stressing the importance of a Sector-Wide Approach (SWAP) in project implementation. The project design was consistent with the sector policy which states that the overall objective of the community water supply and sanitation program is to “improve the public health and economic well-being of rural and small town communities through provision of adequate, safe and sustainable water for domestic, commercial and industrial purposes in a planned and coordinated manner, with integrated hygiene education and sanitation interventions.” The policy further emphasizes the need for community ownership of facilities, based on a demand-driven approach, and a private sector supply of goods and services, where communities pay a percentage of the capital costs of systems as well as all of operations and maintenance costs and are responsible for planning and managing their facilities. The demand driven approach is seen as key to promoting sustainability of systems. The design of the project was also in line with the roles as envisaged under the Government’s decentralization policy, even though the role of the Regional Coordinating Councils (RCCs) was not explicit enough in the Project Appraisal Document (PAD) and the Project Implementation Manual (PIM), which undermined their supervision of the DAs in the implementation of the project. Indeed, the project helped to facilitate the decentralization process by providing districts with key responsibilities in implementation, including contracting. A strong emphasis was placed on capacity building to strengthen districts’ ability to carry out their increased responsibilities. 3.2 Achievement of Project Development Objectives The achievement of the project objective is rated as satisfactory as evidenced by development impact indicators that have been fully achieved or exceeded. The project met its targets of providing 550,000 with access to water supply and 50,000 with sanitation facilities. In total 73 communities in 44 districts in the selected regions benefited from the provision of water supply and sanitation. 7 The project experienced an initial shortfall in access targets as a result of predominance of participating towns with relatively small population sizes. The demand responsive approach to subproject delivery meant that towns that were ready and willing to meet project requirements for participation got selected by the districts and therefore the project had no control determining the sizes of towns that would participate. However the approval of additional financing in the amount of US$25million equivalent allowed completing the 62 towns systems, for which the initial credits have been committed, plus 11 additional systems that increased the target of water beneficiaries. 3.3 Efficiency Procurement under the project followed both the Bank guidelines and the Ghana Public Procurement guidelines. This involved evaluation/approval of Consultancy and sub-contract tenders by either the District Tender Review Board (DTRB) or the Regional Tender Review Board (RTRB) and submission to the Bank for no objection. It is noted that the overall approval process took, on average, between 15 to 40 days. Delays in approval may due in part to the fact that the RTRBs usually meet on monthly basis, and in part to the dual approval process between the Bank and local approval committees. An ex-post economic analysis (see Annex 3), indicated significant differences in figures from those in the PAD. The PAD considered the per capita costs for 20,000, 25,000 and 30,000 to be between US$30 and US$32 per capita. The project, however, was implemented in several communities with populations between 2,000 and 5,000, with costs in some cases topping US$100 per capita. The main direct benefit of the project is increased provision of water to beneficiaries living in the small towns under the project. Other key benefits included: (i) health benefits from reduction in water-related and fecal- related diseases; (ii) improved hygiene; (iii) provision of household toilets bringing about enhanced safety, privacy, and convenience; and (iv) time savings in fetching water. In view of the absence of baseline figures for health, hygiene, convenience, and time savings in fetching water, the analysis was limited mainly to key water supply components for which quantifiable benefits could be measured. 3.4 Justification of Overall Outcome Rating The overall outcome of the project is rated satisfactory since: (i) the project development objective, its design, and implementation are relevant to the achievement of the MDG for water supply and sanitation and is consistent with country priorities as indicated in the GPRS; (ii) key indicators related to the development objective have met their targets, as well as most of the other outcome and output indicators; and (iii) the project has achieved a satisfactory level of efficiency in the provision of services. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development The project followed a demand-driven, participatory approach with principal stakeholders as the small towns where the majority of the poor in the country live. Small towns’ WSDBs had both men and women representatives with essential roles throughout the project process. The decision by a community whether or not to apply to join the project was undertaken by these representatives. Subsequently, the local actors, with facilitation by the CWSA, decided on the type of system and level of service they wanted based on cost and other factors. The project had a participatory M&E system, and the community representatives were involved in monitoring the project and are currently managing the installed systems in their small towns. 8 The project allocated funds for construction of latrines at public places and to partially subsidize household latrines to private homes. The cost of a single-family latrine was assessed as US$100 and the subsidy offered by the STWSSP was US$50 per unit. The subsidy supported the construction of more than 4,200 private latrines or their equivalent in public spaces. Though the subsidy was targeted at poorer homes, as expected, no more than 50 percent of the targeted beneficiaries accessed the subsidy and the subsidy was instead accessed by the relatively richer homes. The reason for allocating funds to cover the construction of latrines in only a fraction of lower-income households was that even though some of the families preferred improved sanitation, they could not afford to spend $50 on a latrine. The project ensured participation of key stakeholders in project planning, implementation and management of the facilities. It particularly promoted the active involvement of women, the main beneficiaries from an increased access to water since they are traditionally in charge of fetching water. Therefore women were involved in all phases of water supply and sanitation and represented at the Water and Sanitation Development Boards. The project also promoted the role of the informal and formal private sector. (b) Institutional Change/Strengthening In the previous Rural Water and Sanitation program, regional structures like the RCCs were virtually excluded from project implementation as the concentration was on the District Assemblies, the basic unit within GoG’s decentralization structure for the implementation of projects. The project, however, considered that the RCCs should have a larger role to play in the monitoring of project implementation, particularly in assuring that targets set by districts within the region were upheld. The project incorporated the lessons and involved the regional structures as part of its monitoring arrangements. Additionally, RWSTs provided targeted support to weaker districts in certain specialized functions such as accounting, technical/ engineering, and contract supervision. In line with the Government’s decentralization policy, the role of districts in a decentralized service delivery approach was considered vital, and their ownership of the planning and implementation process was considered essential for success. DAs were provided with assistance to assume their new role of managing contracts and performing accounting and other related tasks associated with provision of water supply and sanitation. This was key, since they were new to contracting. During the same period, DANIDA assisted in the establishment of District Works Department at the District Assemblies to house the Water and Sanitation Team, the key implementation unit within the DAs. Even though there was considerable achievement in the training of the DAs, there is a need to continue with the training programs in subsequent projects to ensure greater understanding particularly in regard to fiduciary issues. Subsequent operations should also train the RCCs in the oversight of DAs in the implementation of subprojects and especially in the operation and maintenance of the water and sanitation facilities once they are completed and placed in service. Support was also provided in the form of training and logistical support to encourage participation of small- scale entrepreneurs. The long-term objective was to ensure that there was a competitive and efficient private sector available at the district level to provide quality goods, works, and services to communities. Specifically, support to small and medium enterprises in the sector to improve on their capacity. This included drilling contractors, drilling consultants and supervisors, sanitation contractors, area mechanics, small town water system operators and providers of training and community development services. (c) Other Unintended Outcomes and Impacts (positive or negative) N/A 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops N/A 9 4. Assessment of Risk to Development Outcome Rating: moderate There were some procurement capacity gaps in the RWSTs and the DWSTs, particularly in the areas of procurement planning, implementation monitoring, bid evaluation reports preparation, and contract management that delayed the project. Support provided by technical assistance, however, mitigated its impact considerably. Delays in the payment of the counterpart funding affected timely completion of subprojects as payment of contractors were delayed. In addition, the removal of the 5 percent contribution for the last 11 participating communities (introduced as part of the second additional financing) undermined the contribution from other beneficiary communities under the original financing which were already committed to the payment of the 5 percent towards the capital cost. The higher-than-estimated per capita cost for some of the facilities in the small towns – in particular for towns with relatively small population (some as low as 2,500) – placed a great burden on some of the beneficiary districts and communities which led in some cases to delayed payments to the contractors. However payment of revenue for the use of the installed water supply systems has not encountered any problem. CWSA is coordinating the operations of the installed facility with the District Assemblies particularly in regard to DAs approving cost recovery tariffs. Inadequate M&E posed a modest risk to the early completion of the project. The role of the RCCs in monitoring was not well-articulated in some of the regions and this delayed the project. However, the delay was quite mitigated by the presence of CWSA, which invariably provided M&E support to the DAs and the WSDBs. There was a modest risk in not attaining the 50,000 target set for the sanitation coverage. Because of high price increases of construction materials over the period of project implementation, several households that initially showed strong interest in participating in the project by contributing 50 percent of the cost (in kind and labor) towards household latrines withdrew from the project. However the target was achieved in the end. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: marginally satisfactory The project was highly relevant to the country priorities as delineated in the GPRS and in the CAS and contributed to the achievement of the MDGs. The Bank team worked closely with CWSA on the project design to make sure that it incorporated the input from analytical studies and lessons learned from previous operations in order to promote cost effectiveness of the installed water supply systems. In particular, the Bank team assisted in the design of the technical and financial aspects of the project and gave adequate attention to economic, fiduciary and safeguards issues. However the project experienced higher per capita investment costs than anticipated. This was due in part to the significant increase of construction costs by the time the subprojects were being tendered, which was difficult to predict, but it was also due to the predominance of participating small towns with fewer population and this might have been anticipated during appraisal. Whereas the design was based on a small town of above 5,000 people, a number of the small towns with lower population were provided with facilities similar to those above 5,000, hence increasing the unit costs. The implementation arrangements were carefully tailored to the GOG’s decentralization process, with the DAs being given the role of implementing the project while CWSA played their statutory role of a facilitator. In addition, the Bank team ensured that provision was made for capacity building to DAs and the WSDBs to enable them implement the project. Main risks were identified by the team and appropriate mitigation measures proposed. (b) Quality of Supervision 10 Rating: Satisfactory Periodic supervision missions were carried out to provide implementation support for the project. The findings of these missions are contained in a number of aide memoires and implementation status reports. A mid-term review was also carried out to provide stake holders with the opportunity to critically examine all aspects of implementation with a view to improving implementation and, where necessary, effecting changes to the project. The supervision missions included key government officials, particularly the CWSA of the Ministry of Water Resources Works and Housing. In addition, mission members travelled to project sites and held discussions with District Assembly officials, traditional authorities, Water and Sanitation Development Boards, Consultants, Contractors, and community members. Key assessment areas during the project included: (i) implementation status of the project components; (ii) progress of disbursement; (iii) the levels of key performance indicators; (iv) community and district contribution to the project; (v) level of operation and management of completed systems, (vi) sustainability issues as they relates to establishment and adequate capacity training of WSDBs, and the DWSTs, and M&E; and (vii) fiduciary and safeguard issues. Compliance with safeguard issues was in accordance with the principles and procedures in the Environmental and Social Management Framework (ESMF) and Resettlement Policy Framework (RPF). The supervision was adequate in all respects, as the project team was mostly field based and had specialists familiar with the project area. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory The Bank played an instrumental role in the planning and design of the project, and the creation of the institutional framework. It also played a role in stakeholder capacity building, particularly the DAs to enable them play their statutory role as implementing agency, and the WSDBs to improve their management capacity at the community level. It contributed to M&E, particularly in resourcing the CWSA, in facilitating implementation of the project, and supported the DWSTs and WSDBs in monitoring the project. Intense supervision, as evidenced by the several missions by the Bank, helped the Government to address major implementation issues. One key area of weakness of the implementing agencies that was addressed by the Bank mission and which significantly contributed to the implementation of the project was knowledge of environmental and social impact issues. The Bank’s support thus helped to keep the project on track so that it was able to meet its development objectives. 5.2 Borrower Performance (a) Government Performance Rating: Satisfactory Government officials from the Community Water and Sanitation Agency (CWSA) and the Ministry of Water Resources Works and Housing (MWRWH) worked closely with the Bank team on all important aspects of the project. The mission also met with officials of the RCCs and the various District Assemblies implementing the project. The RCCs in most of the project regions, however, played relatively limited roles in the implementation of the project. It was observed that they were not involved in the project planning and design stages and, moreover, their roles were not explicitly made clear in the project documents. The relatively limited role of RCCs in project implementation appears not to be limited to water supply, but rather a reflection of their usual coordinating role assigned to them. The missions were coordinated closely with the World Bank Unit of the Ministry of Finance, which provided the Ministry with the opportunity to monitor the progress of the implementation of the project. (b) Implementing Agency or Agencies Performance 11 Rating: satisfactory The implementing agencies participated actively in the project preparation and contributed substantially to the quality at entry of the operation. The District Assemblies, as the key implementing agencies were responsible for: (i) preparing and reviewing annual DWSPs; (ii) signing of sub-project agreements with CWSA; (iii) promoting projects in all communities; (iv) facilitating the establishment and training of WSDBs and delegating the management of the community installed water and sanitation facilities to these Boards; (v) financing the operational expenses of the DWST; (vi) making 5 percent contribution to the capital cost of water facilities; (vii) properly acquiring lands and providing appropriate compensations to property owners under the safeguards requirements; and (viii) resolving conflict at the community levels. Delays by several DAs in the fulfillment of their obligation to make their 5 percent contribution to capital cost of subprojects significantly contributed to some delays in the project. (c) Justification of Rating for Overall Borrower Performance In view of the Government and of the implementing agencies’ performance, the overall Borrower performance is rated as satisfactory. 6. Lessons Learned While the Project’s Development Objective to increase access to water supply and sanitation services to small towns located in six regions of Ghana was fully achieved, there is concern over the long term sustainability of the systems. Therefore a number of lessons and recommendations are indicated below that should be taken into consideration for a follow-up operation that should emphasize on the sustainability of the systems. a) High turnover of membership of the WSDBs, mostly due to political interference, meant that members who had been trained during project implementation had to be replaced by new people who never had the benefit of any training. As political decisions are invariably unpredictable, it would be necessary to involve more of the private sector to complement the management of the WSDBs in subsequent projects. WSDBs, even though they contributed to the management of the project at the community level, in a number of cases resisted the participation of the private sector in the management of the installed water supply facility. This may be as a result of inadequate information on management strategy for community water supply. Future capacity-building programs for the WSDBs should include information on private sector partnership in the management of community water supply facilities. b) The capacity of DAs in the management of water supply projects and in the operation and maintenance of water and sanitation facilities needs to be improved to ensure long term sustainability of the systems. To strengthen the capacity of the DAs, there will be the need to follow up on the establishment and resourcing of the Water and Sanitation Units of the DWDs in the districts for the management of the Water and Sanitation Projects. There will also be the need for the review of procedures by DAs in the processing of work certificates and disbursement of funds for sub-projects which were contributory factors to delay in the execution of sub-project contracts. In addition, there will be the need to educate DAs on the importance of adequate revenue for the operation and maintenance of the installed systems. This meant the DAs approving cost recovery tariffs or supplementing tariffs from their own funds in case tariffs are not sufficient to ensure the sustainability of the systems. DAs also good orientation on environmental and social safeguards, as capacity of DAs are found to be weak and which has led to several land acquisition related conflicts; 12 c) The low level of investment in sanitation and hygiene education, as well as the strategy of providing subsidy to household latrines without prior behavior change awareness campaign poses a great challenge to the attainment of the MDGs. Some pilot projects based on the Community Led Total Sanitation (CLTS) principle, which focuses on behavior change, have been quite successful in a few communities. There will be the need to review the pilot project for possible scaling up in subsequent rural sanitation projects. The behavior change concept should be extended to hygiene promotion to maximize the health benefits of the communities; d) RCCs should be involved in the preparation stages of projects to improve their monitoring of DAs in the implementation of projects and especially in the oversight of the operation of the systems. The Upper West and East Regions RCCs however played significant roles in project implementation which to a large extent improved project management at the district level. Future operations should provide clearer reference to RCC supervision roles so that RCCs in beneficiary regions can adequately play their roles in project implementation. In addition pre-project workshops which are normally organized for DAs should include the RCCs; e) There is a need for developing a robust Sector Information System to facilitate the monitoring and evaluation (M&E) of not only access to water and sanitation, but the quality of the services provided and the financial sustainability of the decentralized and community-managed systems; f) There is the need to review the design for small town water systems to give more consideration to the category of small towns to ensure lower and uniform unit cost. It was realized that the population of a number of the beneficiary communities was less than 5,000 inhabitants, which meant that they were medium small towns as defined by the CWSA ( i.e. population between 1,200 and 5,000) but benefitted from systems intended for larger sized small town (i.e. population of over 5,000). This contributed to higher unit costs. 13 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies CWSA raised the issue of inadequate integration of coordinating roles of the RCC into project implementation which could have improved management of the project. The Bank agrees with this position and it will be a key area of consideration in subsequent projects. CWSA was also of the view that the strategy for sanitation delivery in small towns was not well developed, resulting in few of the poor in the community benefitting from the provision. CWSA also expressed concern with the absence of post project implementation activities to support operation and maintenance and sustainability of the installed systems. Consultation will be made with District Assemblies to ensure adequate funding either through tariffs or from the District Assembly Common Fund (or other DA Funds) to support the operation and maintenance of the installed systems. (b) Co financiers N/A (c) Other partners and stakeholders While commending the project overall, there is a shared concern among DPs supporting the water sector with regard to CWSA’s occasional involvement in sub-project implementation on behalf of DAs, in lieu of sticking to its statutory role of facilitation. There is also strong support by all DPs to move from a project approach to a Sector Wide Approach (SWAP) and for the channeling of funds in line with the decentralization mechanisms rather than through CWSA. 14 Annex 1. Project Costs and Financing Table 1. Project Cost by Component (US$ million equivalent) Appraisal Estimate Actual/Latest Estimate Components Percentage of Appraisal (US$ million) (US$ million) Community Subprojects 21.6 42.50 196.7 Sector Support 3.1 6.30 203.2 Program Management 1.3 2.90 223.1 Total Baseline Cost 26.0 51.70 198.8 Physical Contingencies 1.98 0.00 0.00 Price Contingencies 2.29 0.00 0.00 Total Project Costs 30.27 51.70 170.8 Front-end fee PPF 0.00 0.00 .00 Front-end fee IBRD 0.00 0.00 .00 Total Financing Required 0.00 0.00 .00 Table 2. Financing Appraisal Actual/Latest Type of Percentage of Source of Funds Estimate Estimate Cofinancing Appraisal (US$ million) (US$ million\) Borrower 3.17 4.4 138,8 Germany: German Technical Assistance 0.42 0.42 100 Corporation (GTZ) International Development 26.00 51.70 198.8 Association (IDA) 15 Annex 2. Outputs by Component Project outputs Output indicator Status at project Level of achievement completion Component 1 :Community Sub-project Increased access to water Provide 550,000 people 561,754 people in 73 102.1% supply in small towns in with water supply small towns provided with six regions facilities water supply systems Increased access to Provide 50,000 people 50,424 people provided sanitation services in with sanitation facilities with sanitation facilities 100.8% small towns in six regions. by means of 4,202 household latrines and 288 institutional latrines Component 2: Sector Support Participating small towns No. of Water Boards fully 73 Water Boards formed, 100% effectively using their trained through project trained and functioning improved water and and functioning sanitation systems and managing them in a sustainable manner. Capacity of participating No.of participating 44 districts fully trained. districts, the private districts with active sector, regional district W&S programs, government monitoring fully trained in small entities, and the MWRWH towns service delivery Directorate for Water effectively developed to No. of private service 58 private service fulfill their sector roles providers (TA, providers involved in contractors, artisans, operations suppliers, etc.) trained and/or operational at district/town levels No. of regional governments 6 regional governments adequately monitoring partially monitoring the district RWSS programs. programs Directorate of Water fully staffed and personnel trained Directorate of Water at in RWSS policy issues and MWRWH fully staffed M&E; and active in policy issues and monitoring Project Management . Efficient CWSA Amount of funds Approximately facilitation of national disbursed by CWSA US$46million out of RWSS program and relative to planned US$51 million management of STWSSP disbursements (undisbursed amount were project savings as a result Sector problem–solving of local currency facilitated and lessons devaluation against the shared through US$ and US$ against the stakeholder discussions SDR) coordinated by CWSA CWSA facilitation through site meetings 16 Annex 3. Economic and Financial Analysis Introduction The Small Towns Water Supply and Sanitation Project (STWSSP) was undertaken from 2004 to 2010. The original project was a US$26 million project to provide water supply to 625,000 people in small towns and sanitation services to 50,000 people. The initial population included a number of communities rolled over from the Community Water and Sanitation Project Phase II (CWSP-II), the precursor to the STWSSP. An additional amount of US$ 10 million was obtained in 2006 when it was realized that the population of selected communities was much lower than originally expected. Project interventions usually targeted small towns with larger populations. The project target was revised down to 500,000. Implementing the project in communities with lower population thresholds led to higher per capita costs for the systems to be provided. In addition, in 2008, due to the high price of crude oil on the world market, there was an increase in the cost of construction materials. This required additional financing to meet the project target for water. An additional population of 50,000 people was targeted to increase the coverage to 550,000 with the second additional financing of US$15 million. At the end of the project, however, not all of the second additional financing was utilized. The projected disbursed US$46 million instead of the expected US$51 million. This was attributed to the sudden depreciation of the cedi in the later stages of the project. Table 3. Project Financing Project Project Effective Project Amount Amount Number Date Disbursed Original Financing 39710 GH 2004 US$ 26 million US$ 24.1 million 1st Additional Financing 39711 GH 2007 US$ 10 million US$ 11.2 million 2nd Additional Financing 45660 GH 2009 US$ 15 million US$ 10.7 million Total US$ 51 million US$ 46 million Funds Disbursed The funds for the three credits used under the project were disbursed in the different categories as follows: Table 4. Disbursement of First Credit (39710 GH) (US$ million) Program Sub Projects T/Consult Goods Management Total 2005 - 149.19 - 286.01 435.21 2006 3,980.75 587.40 266.04 - 4,834.19 2007 5,656.51 243.08 147.79 - 6,047.38 2008 5,581.60 690.78 2.04 568.60 6,843.02 2009 970.04 - - - 970.04 2010 4,548.99 41.53 - 404.75 4,995.27 24,125.11 17 Table 5 Disbursement of Second Credit (39711 GH) (US$ million) Program Sub-Projects T/Consult Goods Management Total 2005 - - - - - 2006 - - - - - 2007 - - - - - 2008 - - - - - 2009 9,800.19 651.24 - 278.55 10,729.98 2010 478.31 - - - 478.31 11,208.29 Table 6 Disbursement of Third Credit (45660 GH) (US$ million) Program Sub-Projects T/Consult Goods Management Total 2005 - - - - - 2006 - - - - - 2007 - - - - - 2008 - - - - - 2009 1,866.64 - - - 1,866.64 2010 7,710.14 760.85 - 338.98 8,809.97 10,676.61 Per Capita Costs The per capita costs obtained during project implementation were very different from that used in preparation of the Project Appraisal Document (PAD). The following cost function was derived using the costs that pertained during project implementation I = 492 x Pop 0.8 where I is investment and Pop is population of the community. The PAD, however, determined per capita costs using a cost function of I = 233 x Pop 0.8 The comparative costs from the two cost functions give the per capita costs for various populations in Table 2 below. Table 7. Per Capita Costs (US$) Population PAD per capita costs Project per capita costs (I = 233 x Pop 0.8 ) (I = 492 x Pop 0.8 ) 5,000 43 90 10,000 37 78 15,000 34 72 18 In addition, the PAD considers the per capita costs for 20,000, 25,000 and 30,000 people, which are between US$30 and US$32 per capita. The project was implemented in several communities with populations between 2,000 and 5,000 people, however, with costs in some cases of over US$100 per capita. Sanitation The sanitation component of the project was aimed at providing latrines in private homes to serve a population of around 50,000 people. Institutional latrines were also provided to serve mostly schools and a few clinics. Each household was expected to contribute 50 percent of the cost of a latrine and the communities/DAs were to contribute 10 percent the cost of institutional latrines. Project Costs and Benefits The project costs have been identified as the investments made for the provision of water supply and sanitation services, as well as technical assistance and goods procured under the project. These project costs have been identified as the main economic costs of the project. The main direct benefit of the project is increased provision of water to beneficiaries living in the designated beneficiary small towns. Other key benefits include: a) Health benefits from reduction in water-related and fecal-related diseases b) Improved hygiene c) Provision of household toilets bringing about enhanced safety, privacy and convenience d) Time saving in fetching water The project did not have a baseline to enable a clear cut analysis of the health, hygiene, convenience and time savings in fetching water. The analysis is therefore limited mainly to key water supply components for which quantifiable benefits can be measured. Households with house connections have an extra benefit of having the water available directly in their yards. Population growth rates of 2.5 percent have been used to determine the population growth rate. The average cost of water assumed in the analysis is 3 pesewas per bucket. The consumer surplus represents the extra benefit for beneficiaries with water closer in relatively closer proximity, especially for those with household connections. The cost-benefit analysis considers the following components that were used to determine the cost benefit analysis in the PAD as well. These are: a) Incremental sales b) Consumer surplus c) Investment costs d) Incremental operating costs Water Demand and Prices The project began using the demand driven policy which required beneficiary communities to contribute 5 percent of the capital cost with corresponding District Assemblies also contributing 5 percent. Due to a change in Government policy, the 11 additional communities to benefit from the project under the second 19 additional financing did not contribute to the capital cost. The cost of a bucket of water at a standpipe is sold at between 2.5 and 5 pesewas. In most communities, two buckets of water are sold for 5 pesewas, making the cost of each 18 litre bucket at 2.5 pesewas. The standard bucket (No. 34 bucket) is 18 litres and it is estimated that 50 buckets of water make 1m3. The estimate of 50 buckets assumes some wastage in washing buckets before fetching water. Households with house connections pay 25 percent more for water, for the enhanced service. Beneficiaries with house connections are expected to use up to 60 liters per capita per day (lcd) as compared to 20 lcd for those fetching from standpipes. All designs took into consideration commercial demand of around 10 percent and losses of around 10 percent minimum. The average use per capita for the towns is expected therefore to be about 25 lcd. The price charged per bucket of water is in line with the tariff setting guidelines and is expected to cover all the O&M costs for each water supply system. Population growth for the small towns has been estimated at an average of 2.5 percent. Water demand is expected to grow at a rate of about 10 percent higher than the population growth rate due to the increased availability of water in the towns. Cost of Water The cost of an 18 litre bucket of water at the time of project preparation was 100 old Ghana Cedis. After the redenomination of the currency, the 100 old Ghana Cedis became equivalent to 1 pesewa (100 pesewas = 1 new Cedi). The new currency’s exchange rate at the time was 1 US$ = 0.915 Cedis. The cost per m3 of water was therefore estimated at US$0.60 per m3. At the time of project closure, the cost of a bucket of water averages 3 pesewas. Consumers with household connections account for up to 20 percent of the beneficiary population and pay 25 percent more for water use. An average cost per bucket of 3 pesewas is assumed for the analysis. The exchange rate of the Cedi to the dollar at the close of the project is 1 US$ = 1.45 Cedis. This makes the cost of water US$1.03 per m3. The cost of water sold is the source of revenue for the operation and maintenance of the water supply systems. The tariff is structured in a manner to ensure there is a component set aside in a replacement fund as well as all recurrent costs. Operation, Maintenance and Cost Recovery Based on the CWSA O&M guidelines, and on experience from the first set of systems completed under the STWSSP, annual O&M costs are between 5 and 7 percent of the construction cost (investment) of the designed water systems. It is estimated that this will increase to between 7 and 10 percent of the investment cost over the design life of a typical system. Conservatively estimated, it is assumed that annual O&M cost is 10 percent of construction cost. Depreciation has been computed for 20 years at 12 percent interest and this gives an annual payment of 13.39 percent of cost of asset. Sinking fund is also computed for 20 years at 2 percent real interest and this gives an annual payment of 4.12 percent of asset. Table 8. Operation, Maintenance, and Capital Cost (US$) Population Investment O&M Depreciation Sinking Fund in town Project Per capita per year per year per year 2,500 257,227 102.89 25,723 34,443 10,598 3,500 336,682 96.19 33,668 45,082 13,871 5,000 447,859 89.57 44,786 59,968 18,452 7,500 619,461 82.59 61,946 82,946 25,522 10,000 779,767 77.98 77,977 104,411 32,126 15,000 1,078,545 71.90 107,854 144,417 44,436 The internal rate of return (IRR) obtained is 24.45 percent as against 20.5 percent. This can be attributed to the increased cost per m3 of water over the period of project implementation. 20 Table 9. Investment under Project and Projections on Population and Water Demand Project year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Calendar year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Investment cost (US$’000) Sub-Projects - 3,981 5,657 5,582 12,637 12,737 T/Consult 149 587 243 691 651 802 Goods - 266 148 2 - - Program Management 286 - - 569 279 744 Total 435 4,834 6,047 6,843 13,567 14,284 46,010 Population and water Population (‘000) 550 564 578 592 607 622 638 654 670 687 704 722 740 758 777 797 816 837 858 879 Water supply (‘000 m3) Without project 2,208 2,230 2,253 2,275 2,298 2,321 2,344 2,368 2,391 2,415 2,439 2,464 2,488 2,513 2,538 2,564 2,589 2,615 2,641 2,668 With project 2,208 2,230 2,855 4,785 6,263 7,340 7,523 7,711 7,904 8,102 8,304 8,512 8,725 8,943 9,166 9,395 9,630 9,871 10,118 10,371 Increment in Water Use 0 0 602 2,509 3,965 5,019 5,179 5,344 5,513 5,686 5,865 6,048 6,236 6,429 6,628 6,832 7,041 7,256 7,476 7,703 Table 10. Cost Benefit Analysis Project year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Calendar year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 COST Total Total Investment Cost 435 4,834 6,047 6,843 13,567 14,284 46,010 Operation and Maintenance O&M 0 398 566 558 1,264 1,274 1,528 1,544 1,559 1,575 1,591 1,606 1,623 1,639 1,655 1,672 1,688 1,705 1,722 1,740 O&M+SF 0 562 799 788 1,784 1,799 2,158 2,180 2,202 2,224 2,246 2,268 2,291 2,314 2,337 2,360 2,384 2,408 2,432 2,456 Total cost (O&M) 435 5,232 6,613 7,401 14,830 15,557 1,528 1,544 1,559 1,575 1,591 1,606 1,623 1,639 1,655 1,672 1,688 1,705 1,722 1,740 Total cost (O&M+SF) 435 5,396 6,846 7,631 15,351 16,082 2,158 2,180 2,202 2,224 2,246 2,268 2,291 2,314 2,337 2,360 2,384 2,408 2,432 2,456 BENEFITS Incremental water sale 0 0 620 2585 4084 5169 5334 5504 5678 5857 6041 6230 6423 6622 6827 7037 7252 7473 7701 7934 Consumer surplus 0 0 713 2,972 4,696 5,945 6,135 6,330 6,530 6,736 6,947 7,164 7,387 7,616 7,851 8,092 8,340 8,594 8,856 9,124 Total benefits 0 0 1,334 5,557 8,780 11,114 11,469 11,834 12,208 12,593 12,988 13,393 13,810 14,238 14,677 15,129 15,592 16,068 16,556 17,058 - B - C (O&M) -435 -5,232 5,279 -1,844 -6,050 -4,443 9,940 10,290 10,649 11,018 11,397 11,787 12,188 12,599 13,022 13,457 13,904 14,363 14,834 15,319 - B - C (O&M+SF) -435 -5,396 5,512 -2,074 -6,571 -4,968 9,311 9,654 10,006 10,369 10,742 11,125 11,519 11,924 12,340 12,768 13,208 13,660 14,125 14,602 IRR (O&M) 26.50% IRR (O&M+SF) 24.45% PV net B (O&M) 12% 27,234.61 PV net B (O&M+SF) 12% 23,625.65 22 Table 11. Financial Analysis Project year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Calendar year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Cost Investment 435 4,834 6,047 6,843 13,567 14,284 O&M+SF - 562 799 788 1,784 1,799 2,158 2,180 2,202 2,224 2,246 2,268 2,291 2,314 2,337 2,360 2,384 2,408 2,432 2,456 Total cost 435 5,396 6,846 7,631 15,351 16,082 2,158 2,180 2,202 2,224 2,246 2,268 2,291 2,314 2,337 2,360 2,384 2,408 2,432 2,456 Finance Total Communities and DAs 575 575 1,150 1150 1150 4,600 Government of Ghana 200 503 610 610 610 610 3,143 World Bank 435 4,834 6,047 6,843 13,567 14,284 46,010 Total finance 1,210 5,912 7,807 8,603 15,327 14,894 53,753 Water Without project (‘000 m3) 2,208 2,230 2,253 2,275 2,298 2,321 2,344 2,368 2,391 2,415 2,439 2,464 2,488 2,513 2,538 2,564 2,589 2,615 2,641 2,668 With project (‘000) 2,208 2,230 2,855 4,785 6,263 7,340 7,523 7,711 7,904 8,102 8,304 8,512 8,725 8,943 9,166 9,395 9,630 9,871 10,118 10,371 Increment (‘000 m3) 0 0 602 2,509 3,965 5,019 5,179 5,344 5,513 5,686 5,865 6,048 6,236 6,429 6,628 6,832 7,041 7,256 7,476 7,703 Incremental water sales 0 - 620 2,585 4,084 5,169 5,334 5,504 5,678 5,857 6,041 6,230 6,423 6,622 6,827 7,037 7,252 7,473 7,701 7,934 IDA loan payment 39710 1,161 1,161 1,161 1,161 1,161 1,161 1,161 1,161 1,161 1,161 1,161 IDA loan payment 39711 446 446 446 446 446 446 446 446 IDA loan payment 45660 670 670 670 670 670 670 IDA loan payment total 1,161 1,161 1,161 1,607 1,607 2,277 2,277 2,277 2,277 2,277 2,277 Net financial flow 775 516 1,582 3,557 4,059 3,981 3,176 3,324 3,477 3,633 3,795 3,961 4,132 4,308 4,490 4,676 4,868 5,066 5,269 5,478 PV of outlays 12% 47,590.86 PV of inflow 12% 68,266.87 23 Annex 4. Bank Lending and Implementation Support/Supervision Processes Table 12. Task Team members Responsibility/ Names Title Unit Specialty Lending Team Leader Paul Kriss Sr. Water & Sanitation Specialist AFTU2 Phase 1 Arthur Majoribanks Team Leader Water & Sanitation Specialist AFTU2 Swatson Phase 2 Ferdinand Tsri Apronti Procurement Specialist AFTPC Ernestina Attafuah Senior Program Assistant AFTUW Mbuba Mbungu Sr. Procurement Specialist AFTFM Wendy E. Wakeman Sr. Community Dev Specialist MNSSO Lydia Sam Procurement Assistant AFC10 Sr Financial Management Frederick Yankey AFTFM Specialist Sr Financial Management Ayman Abu-Haija LOAG2 Specialist Operations Analyst, Kristine Schwebach AFTS1 Environment Yoav Kislev Consultant, Economic Analysis Lead Water and Sanitation Richard Verspyck AFTUW Quality Team Specialist Lead Water and Sanitation Alexander A. McPhail AFTUW Quality Team Specialist Christophe Prevost Sr Water & Sanitation Specialist ETWSA Quality Team Eustache Ouayoro Sr. Sanitary Engineer AFTU2 Quality Team Robert J. Roche Lead Sanitary Engineer ETWSA Peer Reviewer Jennifer J. Sara Lead Infrastructure Specialist LCSSD Peer Reviewer Supervision/ICR Arthur Majoribanks Water & Sanitation Specialist AFTU2 TTL No.1 Swatson Mathewos Woldu Sr. Economist AFTUW TTL No.2 Lead Water and Sanitation Ventura Bengoechea AFTUW TTL No.3 Specialist Baba Imoru Abdulai Procurement Specialist AFTPC Adu-Gyamfi Abunyewa Procurement Specialist AFTPC Beatrix Allah-Mensah Social Development Specialist AFTCS Ferdinand Tsri Apronti Procurement Specialist AFTPC Bayo Awosemusi Lead Procurement Specialist AFTPC Samuel Bruce-Smith Consultant AFTFM Robert Wallace DeGraft- Financial Management Specialist AFTFM Hanson 25 Edward Felix Dwumfour Sr Environmental Specialist AFTEN Maya El-Azzazi Program Assistant MNSSD Tracy Hart Sr Environmental Specialist ENV Hassan Madu Kida Sr Sanitary Engineer AFTUW Anthony Mensa-Bonsu Consultant AFTPC Sr Natural Resources Mgmt. Nyaneba E. Nkrumah AFTEN Specialist Emmanuel Nkrumah Water & Sanitation Specialist AFTUW Lydia Sam Procurement Assistant AFCW1 Emmanuel Nkrumah Water and Sanitation Specialist AFTUW Armele Vilceus Senior Executive Assistant LCC3C Wendy E. Wakeman Lead Social Development Specialist MNSSO Geraldine Agnes Wilson Team Assistant AFCW1 Frederick Yankey Sr Financial Management Specialist AFTFM 26 Table 13. Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle US$ thousands (including No. of staff weeks travel and consultant costs) Lending FY04 36 149.62 FY05 8 29.08 Total: 44 178.70 Supervision/ICR FY04 0.00 FY05 18 76.13 FY06 34 44.53 FY07 32 54.28 FY08 40 144.03 FY09 28 116.18 FY10 25 55.23 FY11 5 9.36 Total: 131 318.97 27 Annex 5. Beneficiary Survey Results N/A 28 Annex 6. Stakeholder Workshop Report and Results N/A 29 Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR Background The Small Towns Water Supply and Sanitation Project was to continue with the decentralized approach adopted in Ghana for the CWSP2 in the planning, implementation and management of safe water supply and improved sanitation facilities/services. The goal is to support the Government of Ghana to reach the Millennium Development Goals in water and sanitation by increasing access to water supplies which will, in turn, contribute to achieving its target of 76 percent and 56 percent of the rural population for water and sanitation, respectively, by the year 2015. The project undertaken in the second phase of the Second Community Water and Sanitation Project (CWSP II/II) became effective on November 17, 2004. The six beneficiary regions were: Ashanti, Brong Ahafo, Central, Western, Upper West and Upper East Regions. In total, 73 communities in 44 districts in these regions benefited from the provision of water supply and sanitation facilities, which raised the national rural water supply coverage by 6.5 percent and adequate sanitation by 0.35 percent. The project design empowered the District Assemblies (DAs) to be at the forefront of small town water supply and sanitation delivery. The methodologies and processes outlined under the project were well understood and accepted by stakeholders. Other rural water supply projects financed by DANIDA, ADB and AFD have followed similar design. Due to effective facilitation by CWSA and commitment by the DAs to increase communities’ access to sustainable safe water supply and improved sanitation services, 561,754 people (instead of the original target of 500,000 (Annex1)), have been served with potable water and 50,484 and 28,800 people in households and institutions, respectively, have been provided with latrines. The funding was received in three tranches to finance three components of the project: Community Subprojects, Sector Strengthening, and Project Management, over the course of four years. The original credit amount was for US$26 million. An additional financing of US$10 million was secured by the Government in August 2007 to enable the project to fully meet the original development objective due to unanticipated cost overrun. A second additional financing of US$15 million was secured and became effective on October 2, 2009, to scale-up access to 50,000 people by providing 11 additional water supply systems. The project closing date was extended from April 30, 2009 to April 30, 2010, to ensure the completion of the additional facilities. 1.0 INTRODUCTION 1.1 Project Objectives The Project Development Objective is to increase access to water supply and sanitation services in six regions of the country over the next four years, providing 500,000 people 30 with water supply facilities, and 50,000 people with sanitation facilities. An additional 50,000 people gained access to water supply, increasing the national coverage of water supply and adequate sanitation by 6.5 percent and 0.35 percent, respectively, in an effort to achieve the water and sanitation MDGs. The project continued to assist the Government of Ghana in: (a) implementing demand- responsive and sustainable water and sanitation services in small towns; (b) strengthening the capacity of communities to manage such services; (c) strengthening district-level capacity to plan and deliver community water and sanitation services, and provide support to communities; (d) building the capacity of private sector and non-governmental organizations (NGOs) to deliver goods and services; and (d) strengthening CWSA’s capacity to effectively facilitate implementation of the national-level community water and sanitation program. 1.2 Project Description The STWSSP had three focal areas: a) Investments: Test and refine a decentralized implementation strategy as well as increasing coverage. b) Capacity building: Build capacities of DAs, communities, NGOs and the private sector in six regions and also refine management structures for sustainability. c) Policy: Support CWSA through management support (management fee). Discuss and consult on decentralized approach and promotion of higher cost recovery. 1.3 Project Components and Coverage The project had three main components: (i) Community Subproject; (ii) Sector Strengthening; and (iii) Program Management. The Community Subprojects component provided grants to communities and institutions through their DAs for the construction of water and sanitation facilities and to finance technical assistance and community development activities to strengthen community capacity to plan, implement, operate and maintain water and sanitation facilities in an effective and sustainable manner. The Sector Strengthening component was used to support and build capacities of: (i) local providers of goods and services (private sector and NGOs); (ii) DAs and their District Water and Sanitation Teams, through the sector strengthening component in the provision of technical support, equipment and training. This included, among other things, office furniture, office equipment, and vehicles; and (c) CWSA at both Head Office and six regional levels including vehicles. The component also provided support in participatory program reviews by all stakeholders, training on environmental and social safeguards, and mass media 31 campaigns for disseminating hygiene education, including promotion of a global hand washing initiative. The third component, Program Management, included CWSA remuneration on a fee-for- service basis for the incremental costs of operation and providing technical assistance to the DAs. Table 14. National Water Supply and Sanitation Coverage Region % with access to % with access to % with access to % with access to water-related safe water, 2004* water related safe water, 2009* sanitation, 2006* sanitation, 2007* Ashanti 8.45 49.80 7.59 72.14 Brong Ahafo 5.77 48.60 5.63 53.61 Central 3.77 39.50 4.33 45.10 Western 2.70 42.60 1.10 44.20 Upper East 3.55 68.90 2.67 59.19 Upper West 1.12 85.70 3.94 76.34 * Information from CWSA National Coverage figures 2.0 PROJECT OUTPUTS AND KEY PERFORMANCE INDICATORS 2.1 Key Performance Indicators at the Beginning of Project The second column of Annex 1 provides the summary list of the key performance indicators set at the beginning of project. 2.2 Achievements of Project Performance Indicators The third column of Annex 1 shows project performance achievements. Targets were exceeded. For instance over 550,000 persons gained access to sustainable safe water supply instead of the initial target of 500,000 persons. 3.0 IMPACT EVALUATION OF THE GOVERNMENT OF GHANA, CWSA, COMMUNITIES, NON-GOVERNMENTAL ORGANIZATIONS (NGOs) AND PRIVATE SECTOR 3.1 General Observation on the Project The CWSP2 was the first project to implement the Ghana National Community Water and Sanitation Program (NCWSP) and the CWSA Act, Act 564 of 1998, giving the DAs pivotal roles in the planning, implementation and management of sustainable safe water supply and improved sanitation facilities and services. The STWSSP advanced the procedures and processes of decentralization by building local level capacity to implement the project, facilitated by CWSA. 32 Under the project, resources were channeled to DAs based on their expressed demand to provide 73 small towns water supply systems, 4,202 household latrines, and 288 institutional latrines to their communities. As a result, DAs and communities developed capacity for the provision of other communal infrastructure. The project also created jobs through the private sector provision of goods and services. 3.2 Government, CWSA, and Communities Contributions The Government of Ghana provided multi-disciplinary staff that facilitated the project at all levels – national, regional, and district. Personnel salaries, wages and administrative cost associated with the staff were borne by the Government of Ghana. At the local level, staff of the DAs provided invaluable services of project coordination, planning, implementation and management. The DAs’ role included: (i) preparing and reviewing annual DWSPs; (ii) signing sub-project agreements with CWSA, (iii) promoting projects in all communities; (vi) ensuring the formation and training of gender-based WSDBs; (v) financing the operational expenses of the DWST; (vi) making 5 percent contribution to the capital cost of water facilities; (vii) properly acquiring lands and providing appropriate compensation to property owners under the safeguards requirements; and (viii) resolving conflict at the community levels. The various participating communities contributed cash equivalent to 5 percent of the capital cost for water, and gave much of their time by participating in meetings and discussions during the planning and implementation of community sub-projects. For sanitation, individual households contributed 50 percent of the cost of latrines while institutions like schools and health centers contributed 10 percent. 3.3 Popularity of the Project Activities at Community Level The STWSSP has been popular among the participating communities judging from the high demand from communities for project support. The WSDBs and the communities were active at all stages of the project planning, implementation, and management. By linking some communities to banks, the culture of savings has been inculcated into some, which is a necessary pre-requisite for poverty reduction. However, the project suffered some setbacks during implementation: (i) delay in the effectiveness of the second additional credit for the implementation of the additional 11 water supply systems, which was partly due to change of governance at all levels in 2009; and (ii) delay in mobilization of respective District Assembly and Community 5 percent capital cost contributions. 4.0 PROJECT ACHIEVEMENTS AND CHALLENGES The following were the achievements and challenges of the project. 33 4.1 National The development of the Project Operational Manual (POM) by the Government of Ghana provided detailed processes and procedure that guided project management at all levels. In addition, CWSA developed such guidance documents as: (i) Small Towns Water and Sanitation Policy; (ii) Technical Design Guidelines; (iii) Operation and Maintenance Guidelines; (iv) Bidding Documents including standard specifications and standard drawings that were useful for program implementation and management at the DA level. Hygiene and sanitation were given much focus through multi-media information, education, and communication (IEC) campaigns, including the global hand washing initiative during which the hygiene practice of washing hands with soap was emphasized, especially for nursing mothers, caregivers, school children, and food vendors. 4.2 Regional and District Table 15. Project Achievements and Challenges Name Achievements and Challenges Achievements • Facilitated project in Ashanti, Brong Ahafo, Central, Upper East, Upper West and Western Regions, providing 561,754 persons with access to safe CWSA water, and 50,484 household latrines, and 2,880 institutional latrines • Played role in fine-tuning of TORs, RFPs and contracts for Technical REGIONAL WATER AND Assistants and Contractors SANITATION • Facilitated in the procurement of TAs and Contractors TEAMS • Training of DAs, Latrine Artisans, and Private Operators • Forged close collaboration among all sector stakeholders, particularly with RCCs • Enabled over-subscription for the projects by DA/Communities due to effective project promotion Challenges • Some DAs did not have adequate capacity to manage contracts, requiring support from RWST via coaching and frequent visits CWSA • Documentation of financial reports from DAs on disbursements was not delivered in timely manner REGIONAL • Poor performance of some private sector operators; especially some WATER AND SANITATION Contractors TEAMS • In some regions, limited resources prevented some RCCs from playing their co-ordinating and monitoring role in support of project implementation and management • There was no budget for post project monitoring or follow up • Some key district officials, such as District Finance Officers, Planning Officers etc., could not allocate sufficient time to the project because of other-project responsibilities • Delay in completion of some of the facilities due to late mobilization of 10 percent district and community contribution to capital cost Achievements • There is a successfully integrated sustainable safe water supply and improved sanitation services, including effective hand washing practices in the beneficiary communities 34 Name Achievements and Challenges in the beneficiary communities • Resources from the project were used to enhance capacities of district officials including DWSTs. Consequently requisite skills and capacities DISTRICT in safe water planning and management have been built among district ASSEMBLIES staff. • Beneficiary districts are able to prepare their DWSPs for integrated safe water supply and environmental sanitation and also their annual work plans and budgets • All participating communities own and manage the services provided • Ensured formation of gender balanced, active WATSANS/WSDBs • Amicable resolution of all conflicts on safe water supply and sanitation delivery in the district. • Capacity building for DA staff, especially the DWST, DPCU, and the Finance Officers and community members were achieved. Office furniture and equipment were provided to enhance their capacity. Challenges DISTRICT • Irregular release of the DACF, which is the primary source of funds for ASSEMBLIES development activities; this adversely affected the DAs’ ability to pay their 5 percent contribution as spelled out in the Project Operational Manual • Delay in submission of Statement of Expenditures by districts to CWSA due to lack of the requisite staff and incentive to motivate the few that were available • High attrition rate of Water and Sanitation Teams (WATSANs), trained latrine artisans, and some DA key staff • Reluctance of people to serve on WSDBs due to perhaps lack of motivation. 4.3 Non-Governmental Organisations (NGOs) and Private Sector Achievements and challenges of NGOs and the Private Sector run through all six regions. Achievements Capacities of the private sector and NGOs were enhanced. The project created jobs for them. Challenges Inadequate equipment holding; Limited managerial skills; and Low capital base 5.0 IMPACT EVALUATION OF THE BANK 5.1 Project Design The project design was satisfactory. However, the coordinating roles of the RCC would have been more effective if they had been well-integrated into project implementation, management, and supported. In addition, the strategy for sanitation delivery in small towns was not well developed. Also there was no 35 budget for post-project implementation activities. Future projects have to address these issues in order to accelerate the delivery of sustainable safe water and improved sanitation services for rural communities and small towns. 5.2 Quality design and implementation support mission The Task Team Managers and teams worked with CWSA as partners in development. Issues and challenges were proactively addressed at all times of project implementation. The supervision missions provided useful technical assistance to CWSA and DAs. Experiences were shared and problems solved during such visits. The aide memoires were useful tools of communication. 5.3 Government, CWSA and Bank Relationship It was very satisfactory as there was reciprocal respect for each party. 6.0 LESSONS LEARNED AND RECOMMENDATIONS a) Participation of women in the project has been very good, and women now play a bigger role in decision- making in the water and sanitation sector and are better empowered to facilitate community action. here is the need for increased sensitization of men to better understand the roles of men and women in planning for and implementing strategies for acquiring safe water and improved sanitation facilities; b) Water and Sanitation Development Boards (WSDB) must be informed at the initial stages of project information that the water supply system to be provided is earmarked for Private Operator management of O&M according to the CWSA Small Towns policy guideline. This information must be delivered throughout their training period. This is to forestall the resistance by the WSDBs to DAs invitation to private operators to manage the larger systems. c) There is a need for greater involvement of RCCs and RCPUs in monitoring project implementation in order to ensure greater support to the District Assemblies in the coordination of resources and tracking of investment results. d) There is a need to shorten the long period between mobilization/planning and construction so as to minimize community frustration and to foster trust between the delivery agents and the beneficiary communities. e) There is need for more effective monitoring and management of results if MDG targets are to be measured efficiently. f) As much as possible consultants who undertake feasibility studies and design of water supply systems should be encouraged to supervise construction of those systems. This will help to prevent errors in the designs which usually result in substantial modifications and variations in contracts. 36 g) Communities should be kept fully informed about the scope of the works during the project design stage, so as to prevent resulting disputes during setting out of the works. h) Consultants and Contractors should be made fully aware of environmental issues in the execution of the works, and environmental management issues should be enshrined in the contract with punitive measures to facilitate compliance. i) When DAs did not formally acquire sites for the system facilities, several conflicts arose between WSDB/DA/Supervisor and Landlords which held up work. Formal acquisition of sites selected for components of the system should be ensured at the project design stage to forestall conflicts with land owners. Lands released by community members for the project should be documented in writing and witnessed by District Chief Executives, to avoid litigation and the resultant project delays. j) Slow response by most DAs to processing certified applications for work done was one of the major contributory factors to delay in the execution of the contracts. A procedural review and further capacity building is recommended to prevent such effects in future. k) The modified replenishment system, remitting to the DA only what amount was necessary to pay a pending certificate/invoice, ensures that no excess funds are locked up with the DAs at any point during project implementation. Previously, just the IDA portion of DA expenditure returns were submitted on a replenishment request. l) Regular stakeholder meetings at the RCC level enabled networking and information sharing across all the implementing districts, especially on the performance of the DA and the private sector. Equally useful, quarterly management meetings among the participating RWST, CWSA-Head Office and the World Bank, Ghana Office helped to address and resolve implementation problems and issues. In the future, DAs and service providers should be invited to participate in these useful project management meetings. At the ministerial level, effective consultation and co-ordination should be institutionalized among, CWSA, MWRWH, MLGRD, and MoFEP. m) There is the tendency of stakeholders (MMDAs and WSDBs) to shift the emphasis to construction of physical facilities at the expense of capacity building and community involvement in general. There is the need to fully implement the TA/capacity building components in order to further enhance sustainability. n) Funds disbursement and reporting by DAs should attract incentives to reward good performance and motivate DAs to excel in this area, and penalties in cases of poor performance. 37 o) There is a need fr a robust Sector Information System for M&E of not only access to water and sanitation, but of the quality of the services provided and the financial sustainability of the decentralized and community-owned systems. 7.0 CONCLUSION The STWSSP has contributed greatly to minimize the incidence of water and sanitation related diseases in the beneficiary communities. Furthermore, the project has contributed immensely towards the Government’s decentralization, poverty reduction agenda, and achievement of MDG goals. DAs, through the project, have been empowered to play a pivotal role in development program through effective planning, implementation and management – especially contract management and administration. Community ownership and management has been embraced and further enhanced through the empowerment of community institutional structures such as WATSANs and WSDBs. 38 Appendix 1 Summary of Borrower’s ICR and/or Comments on Draft ICR Table 16. STWSSP Project Performance Indicators 39 Outcome Indicators End-of-Project Remarks PDO Achievement Increase access to small Provide 500,000 people 561,754 people provided towns water supply and with water supply facilities, with potable water sanitation services in six and 50,000 people with regions over the next four sanitation facilities 50,424 people provided years with HH sanitation facilities Intermediate Results Results Indicators for One per Component Each Component Component One : Component One : Community Subprojects Categories of indicators Result 1: participating Institutional/social Gender-balanced small towns effectively WSDBs have at least a using their improved water third of members being and sanitation systems and women. Benchmark managing them in a agreed at MTR. sustainable manner No. of Water Boards fully 73 Water Boards formed Comprehensive WSDB trained through project and trained training and follow up plan. % of Water Boards that are 100% of WSDBs fully WSDBs now include gender balanced and fully functioning provision for major functioning replacements in tariff setting for O&M Financial No. of small towns 73 small towns submitted All systems new. Some submitting acceptable acceptable proposals less than 1 year in proposals (including cash operation so far. contribution in bank account, adequate management plan) % of completed small 100% hygiene education towns collecting adequate including Global Hand fees for O & M washing was a success Technical No. of completed small 73 systems completed town water systems functioning as designed % of completed 100% functioning as institutional and household designed. latrines effectively used and maintained 4,202 household latrines completed 288 institutional latrines completed 100% functioning effectively Table 17. Project Performance Results Framework 40 Intermediate Results Results Indicators End-of-Project Remarks One per Component for Each Component Target Component Two: Component Two : Sector Support Capacity of participating No. of participating 44 districts that districts, the private sector, districts with active district participated. regional government W & S programs, fully monitoring entities, and the trained in small towns MWRWH - Directorate for service delivery and with Water effectively capacity to fulfill role in developed to fulfill their STWSSP sector roles No. of private service 58 private service 6 TAs providers (TAs, providers 18 HES – TAs contractors, artisans, 24 Contractors suppliers, etc.) trained 6 Financial M. and/or operational at Consultants district/town levels. 4 Other Consultants No. of regional 6 regional governments governments adequately monitoring district RWSS programs. Directorate of Water fully Directorate of Water at Progress collectively staffed and personnel Ministry of Water being monitored by trained in RWSS policy Resources, Works and Sector Working Group. issues and M & E; sector Housing involved in policy implementation monitoring monitored annually including progress towards meeting MDG targets. Intermediate Results Results Indicators End-of-Project One per Component for Each Component Target Component Three: Component Three : Component Three : Program Management Efficient CWSA Amount of funds disbursed US$43million CWSA Head Office has facilitation of national by CWSA to districts approximately released funds to 44 DAs RWSS program and relative to planned for subprojects and DA management of STWSSP disbursements. support Sector problem–solving Yes Project Management and facilitated and lessons Regional Stakeholder shared through stakeholder meetings to identify and discussions coordinated by resolve problems. CWSA. Lessons of experience were also discussed. 41 Appendix 2 to Summary of Borrower’s ICR and/or Comments on Draft ICR: Project Costs Table 18. STWSSP Receipts and Payments, as of August 31, 2010 Receipts Code Details/Description Amount (US$) 1 IDA 45,536,441 2 Gov’t of Ghana 11,327,497 3 District 727,841 4 Community 552,100 Total Receipts 58,143,879 Payments 1.0 Sub-Project 41,215,665 1.1 Small Towns Pipe System 36,764,135 1.2 Sanitation/Latrine Construction 4,451,530 2.0 Goods 515,139 2.1 Vehicle and Equipment 515,139 3.0 Training and Consultancy 3,227,969 3.1 CWSA/District /Private Sector Support 3,227,969 4.0.0 Program Management 13,185,106 CWSA STWSSP staff & administration 4.1.0 costs 13,185,106 Total Payments 58,143,879 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders N/A Annex 9. List of Supporting Documents 42 43 45