Document of The World Bank FOR OFFICIAL USE ONLY Report No: 74814-IQ RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF EMERGENCY WATER SUPPLY, SANITATION AND URBANREHABILITATION PROJECT TF054455 DECEMBER 3, 2004 IN THE AMOUNT OF US$110.0 MILLION TO THE REPUBLIC OF IRAQ February 25, 2013 Sustainable Development Department Middle East and North Africa Region ABBREVIATIONS AND ACRONYMS GOI Government of Iraq IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding IDA International Development Association (World Bank Group) IRRF Iraq Relief and Reconstruction Fund ITF Iraq Trust Fund (administered by the World Bank) KRG Kurdistan Regional Government ISRB Iraqi Strategic Review Board MCM Million Cubic Meters MMPW Ministry of Municipalities and Public Works NCB National Competitive Bidding PMT Project Management Team QCBS Quality and Cost-Based Selection SBD Standard Bidding Documents SDR Special Drawing Right Regional Vice President: Inger Andersen Country Director: Ferid Belhaj Acting Sector Manager: Lia Sieghart Task Team Leader: Caroline van den Berg IRAQ EMERGENCY WATER SUPPLY, SANITATION AND URBAN REHABILITATION PROJECT CONTENTS Page A. SUMMARY ................................................................................................................ 1 B. PROJECT STATUS.................................................................................................... 1 C. PROPOSED CHANGES ............................................................................................ 1 ANNEX 1: RESULTS FRAMEWORK AND MONITORING ......................................... 3 IRAQ EMERGENCY WATER SUPPLY, SANITATION AND URBAN REHABILITATION PROJECT RESTRUCTING PAPER A. SUMMARY 1. The proposed restructuring has been discussed and agreed upon with the Ministry of Municipalities and Public Works (MMPW) during the last supervision mission of November 15-20, 2012. This restructuring paper aims to reallocate the trust fund proceeds to facilitate project implementation. Indicators in the results framework will be revised to include the sector core indicators to better reflect project outcomes without any changes to the Project Development Objective. A letter establishing a Grace Period after Closing will be prepared as part of this restructuring package. B. PROJECT STATUS 2. As of December 2012, disbursement stands at about $92.5 million (out of a total project grant of $110 million), with more than $107 million committed. Two sub-projects are fully operational, a third one is operational (except the repair of the groundwater tank that is on-going) and a fourth is in the handover process. The remaining two works contracts are under implementation but moving very slowly. The goods contract for Kena’an (Diyala) has been awarded and is currently under implementation. C. PROPOSED CHANGES Results/indicators 3. The current set of indicators focuses solely on infrastructure built rather than benefits of this infrastructure on water users, and does not contain sector core indicators. The framework will be revised to include relevant core sector indicators, and shift the focus from outputs to outcomes, as described in Annex 1. Disbursement arrangements 4. A letter establishing a Grace Period after Closing will be prepared to ensure that the Project will operate under a grace period of 4 months. Reallocation of proceeds 5. As of December 2012, $92.5 million have been disbursed, and 97% of funds ($107 million) are now committed. As implementation progresses, a clearer picture emerges and estimates of expected remaining commitments are revised. In particular, additional commitments are needed for: 1 a. A shortfall of proceeds for consultant services, as a result of contract extensions due to implementation delays; b. A shortfall of proceeds for goods; c. Estimated remaining commitments for works, accounting for recovered penalties. 6. The proposed reallocation will consist of transferring proceeds from the unallocated funds to the main categories of proceeds in the following manner: Category of Expenditure Allocation % of Financing Current Current Revised Current Revised Works 91,700,000 92,680,000 83% 84% Goods 5,200,000 5,700,000 5% 5% Consulting Services & 9,300,000 10,120,000 Training 8% 9% Operating Costs 1,500,000 1,500,000 1% 1% Unallocated 2,300,000 0 2% 0% Total 110,000,000 110,000,000 100% 100% 2 ANNEX 1: Results Framework and Monitoring Project Development Objective (PDO): The principal objective of the Project is to assist the Ministry of Municipalities and Public Works (MMPW) to restore basic water supply, sanitation and urban services for urban areas outside Baghdad through (a) the reconstruction and rehabilitation of existing priority networks and treatment facilities; and (b) providing capacity building support through training and technical assistance. D=Dropped Cumulative Target Values** C=Continue Core PDO Level Results N= New Unit of Data Source/ Responsibility for Baseline Frequency Indicators* R=Revised Measure YR 1 YR 2 YR 3 2013 Methodology Data Collection Increase in the quantity of D water produced in the project cities (cubic meter of treated water per day) Improvement in the D percentage of water samples meeting the WHO biological and chemical standards in the areas affected by the project Number of people N Number 0 TBD Annual Aggregation of MMPW-PMT benefiting from new or data from every improved water distribution component under the project Number of people N Number 0 TBD Annual Aggregation of MMPW-PMT benefiting from sewerage data from every extension or rehabilitation component works under the project Number of direct project N Number 0 TBD Annual Aggregation of MMPW-PMT beneficiaries data from every component 3 Direct project beneficiaries N % N/A TBD At the end of the Aggregation of MMPW-PMT who are females project data from every component Number of beneficiaries N Number 0 TBD At the end of the Aggregation of MMPW-PMT from urban rehabilitation project data from every through surveys investments (access to an component all-season road and/or storm water drainage) INTERMEDIATE RESULTS INDICATORS Water supply production R m3/hour 6,280 10,000 Annual Aggregation of MMPW-PMT (formerly data from every capacity PDO component indicator) Length of water supply N km 0 TBD Annual Aggregation of MMPW-PMT network rehabilitated data from every component Number of people in urban C Nb of 0 600,000 Annual Aggregation of MMPW-PMT inhab. data from every areas provided with access to Improved Water Sources component under the project Number of households with N Nb of 0 TBD Annual Aggregation of MMPW-PMT househ. data from every new water distribution connection component Number of households with N Nb of 0 TBD Annual Aggregation of MMPW-PMT househ. data from every access to rehabilitated water distribution component Number of new sewerage N Number 0 TBD Annual Aggregation of MMPW-PMT connections data from every component Number of rehabilitated N Number 0 TBD Annual Aggregation of MMPW-PMT sewerage connections data from every component Length of new sewerage N km 0 TBD Annual Aggregation of MMPW-PMT network installed data from every component Length of sewerage network N km 0 TBD Annual Aggregation of MMPW-PMT rehabilitated data from every component 4 No. of man-month training C Man- 0 300 Annual Aggregation of MMPW-PMT months data from every provided through the project component SaifSaad area sewers in D Karbala rehabilitated and upgraded measured as the value of work completed Majar water supply system D rehabilitated and upgraded measured as the value of work completed Al-Hussainia water supply D system upgraded measured as the value of work completed Al-Samawa (Al Muthanna) D water supply system upgraded measured as the value of work completed Badawa water supply D system upgraded measured as the value of work completed Beiji water supply system D rehabilitated and upgraded measured as the value of work completed Badawa slum municipal D roads and storm water drainage system constructed measured as the value of work completed *Please indicate whether the indicator is a Core Sector Indicator (see further http://coreindicators) **Target values should be entered for the years data will be available, not necessarily annually 5 6