Document of The World Bank FOR OFFICIAL USE ONLY Report No. 15736 IMPLEMENTATION COMPLETION REPORT REPUBLIC OF COTE D'IVOIRE ABIDJAN ENVIRONMENTAL PROTECTION PROJECT (LOAN 3155-IVC) June 17, 1996 Infrastructure Operations Division West Central Africa Department Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. [ts contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIIVALENTS Currenicy Uinit = C. 1-raiic US$ 1 1990 = c('-'; franic 3L_ 1991 = C[l-A franc 28') 1992 = CFA franc '65 1993 -C C'FA franc 283 1994 CFA franc 555 1995 = CFA franc 490 WEIGiiFTS AND MEASURES I meter (m) = 3.28 feet (ft) I kilometer (kin) = 0.62 mile (lli) I cubic meter (rn3) = 264 US gallon I liter per capita per day ( Icd) = 0.26 gallon per capita/per day FISCAL YEAR Borrower and Project-related Governmeit Agencies: January 1 - December 31 Societe de distribution d'eau de C6te d'lvoire (Sodeci): October I - September 30 ABBREVIATIONS AND ACRONYMS CAA National Public Debt Agency (Caisse autonome dainortissement) Ciapol Ivorian Pollution Control Center (Ctentre ivoirien antipollution) CRO Center for Oceanographic Research (Centre die recherches oceanographiques) DAI Directorate of Sanitation and Intfrastructure (Direction de / 'assainissen7ent et cles infrastructures) DCA Directorate of Constructioll and Sanitation (Direction de Ia construction et de I 'assainissemnent) DENT Directorate of Environment, Standards and Technology (Direction de I 'environnetnent, de la normalisation et de la technologie) DCGTx Office for the Management and Control of Major Works (Direction et Controle des grands tracaultv) EIB European Investmenit Bank FNE National Water FuLnd (Foncds national de I 'eau) Lanema National Laboratory of Quality Control, Metrology and Pollution Analyses (Laboratoire national d'essais de qualit~. de dnmtrologie et d 'analyses de pollution) MLCVE Ministry of Housing and Environment (Ministere dii logenient, du cadre de vie et de 1 'environnenient) MCU Ministry of Constructioni and Urban Affairs (,Alinistere de la construction et de I 'urbanisme) MDM Ministry of Defense and Marine (Ministere de la defense et de la marine) MET Ministry of Environment and Tourism (Ministire de / 'environnen7ent et du lourisnie) Sodeci Ivorian Water Distribution Company' (Societe de distribution d'eau de C6te d'Ivoire) WASAL Water and Sanitation Sector Adjustment Loan FOR OFFICIAL USE ONLY CONTENTS Page Preface Evaluation summary .............1i PART I PROJECT IMPLEMENTATION ASSESSMENT .1 A. Introduction . B. Project Objectives .1 C. Achievement of Objectives .2 D. Major Factor Affecting the Project .5 E. Project Sustainability .7 F. Bank Performance .7 G. Borrower Performance .8 H. Assessment of Outcome .8 I. Future Operation .9 J. Key Lessons Learned .9 PART II STATISTICAL ANNEXES .10 Table 1: Summary of Assessments .10 Table 2: Related Bank Loans/Credits .11 Table 3: Project Timetable .11 Table 4: Loan Disbursements: Cumulative Estimated and Actual .12 Table 5: Key Indicators for Project Implementation .12 Table 6: Key Indicators for Project Operation .......................... 13 Table 7: Studies Included in Project .14 Table 8A: Project Costs ............................................ 15 Table 8B: Project Financing ............................................ 15 Table 9: Economic Costs and Benefits ............................................ 16 Table 10: Status of Legal Covenants in the Loan Agreement ...................... 17 Table 11: Bank Resources: Staff Inputs ........................... ................. 19 Table 12: Bank Resources: Missions ..................... ....................... 20 APPENDIXES A. Mission's aide-memoire ............................................ 21 B. Borrower contribution to the ICR .................... ........................ 26 C. Comments received from the European Investment Bank ........................ 31 This docuwnent has a restricted distribution and may bc used by rxcipicnts only in the perforinzce of their Iofficial duties. Its contents may not otherwise be disclosed wiLhout World Bank authorization. l IMPLEMENTATION COMPLETION REPORT REPUBLIC OF COTE D'IVOIRE ABIDJAN ENVIRONMENTAL PROTECTION PROJECT (LOAN 3155-IVC) Preface This is the Implementation Completion Report (ICR) for the Abidjan Environment Protection Project in C6te d'lvoire, for which Loan 3155-IVC in the amount of US$21.9 million was approved on January 9, 1990, and made effective on June 11, 1990. The Loan was closed on December 31, 1995, after a delay of two years. Final disbursement took place on May 15, 1996, at which time a balance of US$2,157,881 was canceled. Cofinancing for the project was provided by the European Investment Bank (US$17.93 million equivalent). The ICR was prepared by Richard Verspyck (task manager for the project) of the Infrastructure Operations Division, West Central Africa Department, Africa Region, and reviewed by Mr. James Wright, Division Chief and Mr. Franz Kaps, Project Adviser. The cofinancier provided comments that are included as an appendix to the ICR. Preparation of this ICR was begun during the Bank's final supervision/completion mission in November 1995. It is based on material in the project file. The borrower contributed to the preparation of the ICR by preparing its own evaluation of the project's execution. IMPLEMENTATION COMPLETION REPORT REPUBLIC OF COTE D'IVOIRE ABIDJAN ENVIRONMENTAL PROTECTION PROJECT (LOAN 3155-IVC) Evaluation Summary Project Objectives i. The primary objective of the project was to reverse the deterioration which had taken place in the Abidjan environment because of the dumping of urban wastes and industrial effluents into the Ebrie lagoon by: (a) building waste water disposal facilities; (b) establishing sound environmental regulations; (c) monitoring pollution; and (d) ensuring the financial and operational sustainability of the sewerage system. ii. Project Description and Components. To achieve the above objectives, the project included four major components: (a) Policy and institutional reform including (i) environmental regulations of domestic and industrial waste water disposal; (ii) maintenance of facilities by a private water supply operator, Sodeci; and (iii) strengthening capabilities for monitoring lagoon and coastal pollution; (b) Physical works including (i) construction of an ocean outfall-diffuser, a sand trap and a floatable removal plant; (ii) completion of the existing North-South sewer interceptor; and (iii) construction of secondary sewers for connecting industrial zones and residential areas to the interceptor; (c) Enforcement of cost recovery mechanisms to cover operating expenditures as well as debt service of sewerage facilities; and (d) Carrying out a comprehensive Master Plan of the Abidjan sanitation, drainage and environmental protection system. iii. Evaluation of Project Objectives and Risks. The project concept and its objectives were clear and consistent with the sectoral adjustment program which had been prepared and negotiated at the same time. Both water and sanitation aimed at increasing private sector participation, improving cost recovery policies and restoring the financial autonomy of the water and sanitation sectors. Some project features were very demanding such as the unusual cost-sharing arrangements. The sole project risk mentioned in the SAR was associated with the completion of the financial restructuring of the National Water Fund (Fonds national de 1 'eau; FNE), which actually took place at the end of 1990, but had a short-lived impact when the Government started again to accumulate arrears on water bills (paras. 5-7). Implementation Experience and Results iv. Achievement of Objectives. The first policy objective, namely to establish a new regulatory framework, was not achieved. Regulations were drafted but are still to be enacted. Despite these substantial delays, the execution of the project still achieved policy objectives by paving the way for increasing the responsibilities of the private operator, Sodeci, under a new lease contract (paras. 8-9). v. Cost recovery from the project's beneficiaries and water users has been adequate, but collected revenues were not transferred to FNE in a timely manner-contrary to the financial - 11 - covenants of the loan agreement. Overall, FNE was relegated to a passive role and the project's financial objectives were only partly achieved. The financial relations between the various actors resumed in 1995 when the Government began to repay its arrears towards Sodeci (paras. 10-1 1). vi. Ivorian institutions implemented all project components. The achievement of the institutional development objectives was nonetheless partial because: (a) the Office for the Management and Control of Major Works (Direction et Contr6le des grands travaux; DCGTx) was unable to update the Master Plan; and (b) overall sector coordination was deficient (paras. 12-13). vii. Environmental objectives were achieved. A measure of potential benefits is given by the volumes of waste water that may be discharged into the ocean outfall. It is estimated that the organic pollution of the lagoon will be reduced by 80 percent. The commissioning of the outfall had to be postponed by more than a year pending the installation of odor-suppression equipment. In addition, the construction of the outfall caused minor damages to the neighboring buildings which were compensated only after the closing date (paras. 14-16). viii. The project went beyond its physical objectives. About 174,000 inhabitants (to be compared to SAR estimates of 140,000 inhabitants) and industrial units of the Port area representing 220,000 equivalent-inhabitants were connected to the interceptor. Sixty-seven percent of the waste water generated by water users connected to the sewerage system may be discharged into the main interceptor and the outfall. The pilot on-site sanitation component was not completed as expected. Those works were programmed and executed using a standard top-down approach, which did not allow meaningful conclusions (paras. 17-20). ix. Economic Evaluation. The economic rate of return is now estimated at 12 percent (15.4 percent expected in the SAR) and the net present value of its benefits and costs- computed with a discount rate of 10 percent-is now CFA franc 2.5 billion, compared with the SAR estimate of CFA franc 7.7 billion (para. 22). x. Costs and Delays. The final costs of the project amount to US$42.4 million (compared to SAR estimates of US$49.9 million). The final cost of the physical facilities was 5 percent below SAR estimates, but the completion of the works required two extensions of the closing date from December 31, 1993 to December 31, 1995 (para. 17). xi. Major Factors Affecting the Project. The project was mostly implemented during a period of severe economic depression which resulted in: (a) blocking the financial relations between the Treasury, Sodeci, FNE and the National Public Debt Agency (Caisse autonome d'amortissement; CAA); and (b) the unavailability of counterpart funds to carry out the master plan studies. On the institutional side, procurement activities and decisions regarding the regulatory framework were particularly affected by the frequent ministerial reshuffles and organizational changes (paras. 25-27). xii. Sustainability. The strong commitment of the Government to a functional sewerage system for Abidjan is not questionable, even in the face of the substantial delays in approving the new regulatory framework. There is full ownership of the pollution monitoring program. The project will likely maintain its physical achievements in view of the past performances of - iii - the private operator. In addition, the lease contract reinforces the sustainability of project achievements (paras. 29-30). xiii. Bank's and Borrower's Performance. The Bank played a decisive role in project preparation by insisting on an independent review of the original design studies which had recommended complex treatment solutions. The global environmental impact was carefully reviewed by the Bank, but the direct impact of project works was clearly overlooked. During the supervision, the Bank recognized that the lack of compliance with financial covenants was a macro-economic issue which could only be addressed by an adjustment of the exchange rate and renounced to use remedies. Instead, Bank efforts were successfully directed towards bringing a consensus on the reform of the contractual framework (paras. 31- 33). xiv. Project preparation from the detailed design stage was entirely carried out by the Borrower. The quality of the preparation was generally satisfactory. Implementation performance was mixed. Critical decisions were delayed, sensitivity to popular participation was minimal and DCGTx' contract management and supervision performance declined with the attrition of the staff of the agency after 1991. On the positive side, one may mention the swift completion of the outfall, the quality of project monitoring and reporting, and the buildup of genuine Ivorian capabilities, evidenced by the preparation of the lease contract (paras. 34-35). xv. Assessment of Project Outcome. The likely outcome of the project is rated satisfactory in view of the sustainability of its environmental and physical achievements and of its positive net present value (para. 36). Future Operation and Lessons Learned xvi. Operational responsibilities have been streamlined and are vested into Sodeci and the Directorate of Environment of the Ministry of Housing and Environment (Ministere du logement, du cadre de vie et de 1'environnement; MLCVE), which is responsible for supervising Sodeci and enforcing the regulatory framework. Resources generated by the user fees will fund the incremental expenditures of the pollution monitoring program. The Bank should follow up project operations in two respects. First, the actual environment impact of the ocean outfall should be closely monitored as it is the only facility of this kind on the West African coast. Second the execution of the lease contract-again a premiere in sub-Saharan Africa-should lead to interesting conclusions. Bank assistance should continue in the sanitation sector, to help preparing a genuine national strategy that would not only build on Abidjan's experience, but also explore new solutions and pave the way for better beneficiary participation (paras. 37-38). xvii. The key lessons learned from project implementation are as follows: (1) Establishing surcharges on water tariffs for further remittance to other entities is risky. Those arrangements are quite sensitive to the (frequent) build-up of arrears on governmental water bills as the proceeds of the surcharge are likely to be held up by the utility as a compensation (para. 10); - iv - (2) An environmental protection project may generate, as this was the case, negative side effects. The impact of construction works in urban areas should not be overlooked. Mitigation plans are essential (para. 16); (3) Contract packaging should not aim exclusively at minimizing the number of contracts to simplify procurement, as large and heterogeneous contracts may have their shortcomings in terms of contract management (para. 17); (4) Time-based conditionalities should be attached to a dated deadline. The project conditionality requiring enactment of regulations by the time of completion could not be enforced (para. 32). IMPLEMENTATION COMPLETION REPORT REPUBLIC OF COTE D'IVOIRE ABIDJAN ENVIRONMENTAL PROTECTION PROJECT (LOAN 3155-IVC) PART I - PROJECT IMPLEMENTATION ASSESSMENT A. BACKGROUND 1. From 1975 onwards, the Bank had actively supported the development of the sanitation systems in Abidjan, where collective sewerage was justified by the high population densities and sustained by the satisfactory operation of the networks. Ten years later, Abidjan's rapid growth had outpaced the substantial progress made in developing its metropolitan sewerage and drainage system. Abidjan stretches along the Ebrie lagoon, the coastal line of which spreads over 120 km within the city limits. The city's environment had been deteriorating because of the pollution of the lagoon that originated mainly from organic sewage and industrial effluents discharged through several outlets and from septage continuously dumped into the lagoon. 2. The project was initially designed as the third phase of the implementation of the Abidjan master plan studies for sewerage and drainage carried out with Bank/UNDP assistance in the seventies. The first two phases, which were executed between 1978 and 1986, provided for major extensions of the city's sewerage and drainage networks and helped to remove waste water from the immediate environment to the lagoon. Environmental consultants confirmed in 1985 that an ocean outfall was an adequate solution for the eventual discharge of liquid wastes. The project was appraised in July 1987, but the entire portfolio of Bank projects in preparation in Cote d'Ivoire was then put on hold, pending agreement on a program of sectoral adjustment operations (including one for the water and sanitation sector) and on the macro-economic framework. Negotiations eventually took place in July 1989 and the project was approved by the Board in January 1990 and made effective in June 1990. B. PROJECT OBJECTIVES 3. The primary objective of the project was to reverse the deterioration which had taken place in the Abidjan environment because of the dumping of urban wastes and industrial effluents into the Ebrie lagoon by: (a) building waste water disposal facilities; (b) establishing sound environmental regulations; (c) monitoring pollution; and (d) ensuring the financial and operational sustainability of the sewerage system. 4. Project Description: To achieve the above objectives, the project included four major components: (a) Policy reform and institutional development including (i) enactment and enforcement of new environmental regulations ensuring appropriate disposal of domestic and industrial waste water; (ii) assignment of responsibility for maintaining and operating Abidjan sewerage facilities to the private Ivorian water supply company Sodeci which was selected in 1988 through competitive bidding; and (iii) strengthening capability of the Ministry of Defense and Marine (MDM) and the Center for Oceanographic Research (Centre de recherches oceanographiques; CRO) for monitoring lagoon and coastal ocean pollution; (b) Physical works including (a) construction of a 1.2 km ocean outfall-diffuser, of a sand trap and of a floatable removal plan; (ii) completion over 6.5 km of the existing North-South sewer interceptor to collect waste water and septage; and (iii) construction of 26 km of secondary sewers for connecting industrial zones and residential areas already equipped with tertiary sewers to the interceptor; (c) Enforcement of satisfactory cost recovery mechanisms including charges on domestic and industrial water consumption to cover full cost of 0 & M expenditures as well as debt service of sewerage facilities; and (d) Carrying out a comprehensive Master Plan of the Abidjan sanitation, drainage and environmental protection system including measures to promote on-site sanitation in low-income areas. 5. Evaluation of Objectives and Risks. The project concept and its objectives were clear and consistent with the sectoral adjustment program supported by the Water and Sanitation Sector Adjustment Loan (WASAL, Loan 3240-IVC) which had been negotiated at the same time. Both the project and the WASAL aimed at increasing private sector participation, improving cost recovery policies and restoring the financial autonomy of the water and sanitation sectors. 6. Some project features were, however, very demanding such as the implementation period of less than four years and the unusual cost-sharing arrangements. The two cofinanciers-the Bank and the European Investment Bank (EIB)-were to finance 100 percent of the (net of taxes) costs of works and equipment. The Borrower was to finance 100 percent of the costs of supervision, training and studies (detailed design, master plan and studies related to the regulatory framework) which were to be carried out by the Office for the Management and Control of Major Works (Direction et Contr6le des grands travaux; DCGTx). Those arrangements were designed to facilitate the procurement of the large works contracts and were actually efficient in that respect. They were also based on the assumption that DCGTx, then under the Presidency, would easily obtain budget funds, which was previously the case, but failed to materialize during project implementation. 7. The sole project risk mentioned in the SAR was associated with possible delays in completing the financial restructuring of the National Water Fund (Fonds national de 1 'eau; FNE). That restructuring was carried out under the WASAL at the end of 1990, but had a short-lived impact that was nullified by the economic recession of 1990-1993. C. ACHIEVEMENT OF OBJECTIVES 8. Sector Policies. The first policy objective, namely to establish a new regulatory framework, was not achieved. Drafts of environmental regulations were transmitted to the Bank in 1993 and found satisfactory. However, the inter-ministerial review process in Cote d'Ivoire was repeatedly interrupted by the frequent reshuffles of responsibilities between the ministries in charge of the environment and sanitation sectors. The draft regulations are still to be enacted. - 3 - 9. Despite the substantial delays of approval of the regulatory framework, the execution of the project went beyond the second policy objective by paving the way for increasing the responsibilities of the private operator, Sodeci, under a new lease contract. The need for new contractual arrangements arose from the blockage of the financial relations between the various partners of the sector, including Sodeci, which is also in charge of urban water supplies throughout Cote d'Ivoire under a separate concession contract. 10. Financial Objectives. FNE, under the National Public Debt Agency (Caisse autonome d'amortissement; CAA) was responsible, inter alia, for the debt service of the sanitation sector and for paying Sodeci's maintenance contract. Cost recovery from the project's beneficiaries and water users has been adequate, but collected revenues were not transferred to FNE in a timely manner, contrary to the financial covenants of the loan agreement. As shown in Table 5. lb, the two resources of the sector, namely the sanitation tax (collected by the Treasury as part of the property tax) and the water surcharge (collected by Sodeci as part of the water rate) were sufficient to cover the operating and maintenance expenditures of the sewerage and drainage system, as well as the debt service of the sector. In January 1992 and after obtaining a formal waiver from the Prime Minister's office, Sodeci stopped transferring the water surcharge to FNE in view of the increasing arrears of the public customers on their water bills. In addition, the proceeds of the sanitation tax were erratically transferred by the Treasury to FNE. FNE, in turn, stopped paying Sodeci's maintenance contract. Sodeci, however, kept executing the contract. Overall, FNE was relegated to a passive role and the project's financial objectives were only partly achieved. 11. The financial relations between the various actors resumed in 1995 when the Government began to repay its arrears towards Sodeci. At the same time, all interested parties agreed that the financial autonomy of the sector was compromised by the intricate flow of funds and that operating and maintenance costs of the sewerage system were charged to all water users without considering whether they were connected to the sewers. They further agreed to prepare a lease contract for the sanitation systems, under which Sodeci: (a) would charge an user fee exclusively on those water users connected to the sewerage system and; (b) would maintain and operate the sanitation systems at its own risks. The draft lease contract was reviewed during the completion mission and Sodeci submitted a financial proposal at the end of May 1996. 12. Institutional Development Objectives. The project relied on Ivorian institutions to implement all project components, to carry out the studies through DCGTx and to prepare the regulatory framework. Indeed, apart from limited technical contributions that required specific external expertise, the design and supervision of the physical components of the project were carried out with the in-house resources of DCGTx. The pollution monitoring program was designed and executed by the Ivorian Pollution Control Center (Centre ivoirien antipollution; Ciapol), CRO and the National Laboratory of Quality Control (Laboratoire national d'essais de qualite, de metrologie et d'analyses de pollution; Lanema). Environmental and sanitary regulations were prepared by the Directorate of Environment without external assistance. The lease contract was prepared by a governmental task force with limited support from the Bank. - 4 - 13. The achievement of the project objectives was nonetheless partial because: (a) DCGTx was unable to update the comprehensive sewerage, drainage and environmental protection Master Plan; and (b) overall sector coordination was deficient, in the absence of clear leadership among the various entities concerned by the project. 14. Environmental Objectives. Achievement was substantial. The pollution monitoring program collects data (bacteriological and chemical parameters for waters, sediments and fauna) at 29 sampling stations (14 in the lagoon, 6 on beaches and 9 in marine waters). The effluents of 17 large industrial plants are also monitored by Lanema. Baseline surveys assessed the extent of the pollution and confirmed that the annual floods and the existing channel connecting the lagoon to the sea cannot warrant the regeneration of the central part of the lagoon. The confined waters of Cocody Bay, Bietri Bay and Banco Bay, as well as the vicinity of Koumassi and Marcory have reached high levels of eutrophication and bacterial contamination. The sediment samples showed that the silt generated by organic wastes lays over more than 50 percent of the lagoon bed. 15. It is too soon to perceive the environmental benefits of changing the pattern for final disposal of wastes to bypass the lagoon and to discharge into the sea. A measure of potential benefits is given by the volumes of waste water that may be discharged into the ocean outfall. Sixty-seven percent of the waste water generated by water users connected to the sewerage system through 82,000 service connections may be discharged into the main interceptor and the outfall. In addition, the six septage discharge stations constructed under the project provide an adequate and convenient alternative for the septage hauling companies. Therefore, the organic pollution of the lagoon may be reduced by 80 percent. 16. Some weaknesses in the design and execution of the project produced negative environmental effects which were corrected after lengthy delays. During the test period, the intermittent operation of the main pumping station created odor nuisances in the vicinity of the surge tower of the ocean outfall in Port Bouet. The commissioning of the outfall had to be postponed by more than a year pending the installation of odor-suppression equipment. In addition, the construction of the outfall caused minor damages to the neighboring buildings which were compensated only after the closing date. 17. Physical Objectives. Achievement was substantial. The main facilities were built as scheduled (see Table 5), with some minor variances (length of the interceptor, number of secondary pumping stations and a 15 percent increase of the length of primary and secondary sewers). The final cost of those facilities was slightly (5 percent) below SAR estimates, but the completion of the works required two extensions of the closing date from December 31, 1993 to December 31, 1995. Project procurement had been packaged in three large contracts for the sake of the simplicity of the tendering process. That choice proved to be hazardous during implementation, as the main construction contractor was unable to master the wide range of expertise required. 18. It is estimated that about 174,000 inhabitants (compared to SAR estimates of 140,000 inhabitants) were connected to the interceptor through the secondary sewers constructed under the project in the residential areas. In addition industrial units representing 220,000 equivalent-inhabitants were connected in the Port area. 19. The execution of the project revealed interferences between the drainage and the sewerage networks, mainly attributable to an inefficient control of service connections. The project allowed (a) to eliminate faulty links in two residential areas; and (b) to finance an enumeration of illegal service connections. 20. The pilot on-site sanitation component was not completed as expected. Willingness- to-pay studies and demand surveys were conducted in the low-income areas of Port Bouet. The Bank gave its no-objection to a project document based on a participatory approach. After long discussions between the ministerial departments, DCGTx and the municipality on the implementation process, the Government decided instead to finance the major part of the proposed works under the Social Development Fund established after the January 1994 devaluation of the CFA franc. Those works were programmed and executed using a standard top-down approach, which did not allow meaningful conclusions. 21. Economic Evaluation. The economic rate of return (ERR) and the net present value (NPV) of the project were recalculated by using the SAR's methodology (see Table 9). The present value of actual project costs (capital costs and incremental operating costs) is 24 percent lower than expected at appraisal. This positive outcome is largely offset by the 41 percent decrease of quantifiable project benefits. The decrease of direct benefits stemming from the enhancement of property values in the vicinity of the lagoon is attributable to the implementation delays and also to the unfavorable macro-economic situation which slowed down the development of housing in Abidjan prior to the devaluation. In addition, the baseline surveys did not reveal a significant pollution of marine waters by organic and industrial wastes. The scope of external benefits accruing from increased fisheries output was accordingly limited to lagoon fisheries, while the SAR estimates took into account lagoon and sea catches. 22. The ERR is now estimated at 12 percent (15.4 percent expected in the SAR) and the NPV-computed with a discount rate of 10 percent-is now CFA franc 2.5 billion (CFA franc 7.7 billion in the SAR). D. MAJOR FACTORS AFFECTING THE PROJECT 23. Implementation Delays. The date of physical completion mentioned in the SAR was December 31, 1992. The actual date was December 31, 1995. SAR estimates were over- optimistic as: (a) they assumed that the loan agreement would be effective in October 1989 and that construction works would start in January 1990; (b) they anticipated a two-year construction period. Implementation delays did not affect all physical components in the same way. The construction of the ocean outfall, which was regarded as the most difficult undertaking, was completed within the SAR's schedule, partly because the procurement process was carried out well ahead of effectiveness. Other physical components faced long procurement delays. Construction generally began 22 months after the tendering date. In addition, the sewer contract (interceptor, secondary sewers and pumping stations) was executed over 48 months, 22 months beyond the original completion date. - 6 - 24. Factors not generally subject to Government Control. Those factors have had a limited impact. Laying the ocean outfall required to find specific weather and sea conditions, which were met at an early date. The failure of one subcontractor hampered the execution of the sewer contract, but this should have been controlled by the main contractor and the supervision team. 25. Factors generally subject to Government Control. Macro-economic policies and changes in the allocation of ministerial responsibilities have had a significant impact. The project was implemented during a period of severe economic depression which resulted in negative growth over the years 1990-1993 and in the accumulation by the Government of domestic arrears of CFA franc 1,200 billion (45 percent of GDP) at the end of 1993. The impact on the water and sanitation sectors and the project was twofold: (a) the accumulation of unpaid Government's water bills, as noted above, paralyzed the financial relations between the Treasury, Sodeci, FNE and CAA; and (b) DCGTx was unable to obtain funds to carry out the master plan studies. 26. The devaluation of the CFA franc of January 1994, as well as subsequent adjustment efforts, improved dramatically the situation of public finances. In the water supply sector, substantial progress has been achieved since 1995 with the payment of the majority of public water bills and the rescheduling of debt service arrears between FNE and CAA; the settlement of cross-debts is being completed in the sanitation sector. The devaluation itself had a very limited impact on the execution of contracts financed under the project. Eighty- eight percent of the contracts had been disbursed before the devaluation and the adjustment of contract prices was carried out quite efficiently by DCGTx. 27. On the institutional side, sectoral responsibilities were repeatedly reshuffled between the ministries in charge of sanitation, housing and environment. The project had been prepared with the Ministry of Defense and Marine (MDM), then in charge of the lagoon environment. Shortly before effectiveness the contracting authority (previously with the Ministry of Public Works and Transport - Ministere des travaux publics et des transports; MTPT) and the regulatory responsibilities (shared by MTPT and the Ministry of Industry) were vested into the newly created Ministry of Environment, Construction and Urban Affairs (Ministere de 1'environnement, de la construction et de l'urbanisme; MECU). The regulatory responsibilities were later shifted to a separate Ministry of Environment and Tourism (Ministere de 1 'environnement et du tourisme; MET) while the contracting authority remained within the Ministry of Construction and Urban Affairs (Ministere de la construction et de l'urbanisme; MCU). In January 1996, both were again merged in the Ministry of Housing and Environment (Ministere du logement, du cadre de vie et de 1'environnement; MLCVE). Each ministerial reshuffle translated into new sets of priorities and into delays in processing agreed actions. Procurement activities and decisions regarding the regulatory framework were particularly affected by those organizational changes. 28. Factors generally subject to Implementing Agency Control. The financial resources available to the executing agency, DCGTx, decreased markedly after 1991. The project team was reduced from five engineers (of whom two expatriates on a part-time basis) to three, although the supervision workload was increasing and at a time when the master plan studies should have started. Another shortcoming was the lack of beneficiary - 7 - participation or merely of public consultation, which was taken into account only at the end of the project, to settle the nuisance problems in Port Bouet. E. PROJECT SUSTAINABILITY 29. The sustainability of the environmental benefits of the project was contingent on the satisfactory operation of the sewerage network and on the enforcement of the regulatory framework. The new facilities are not based on complex processes and do not present particular operating difficulties. The project will likely maintain its physical achievements in view of the past performances of the private operator. The strong commitment of the Government to a functional sewerage system for Abidjan is not questionable, even in the face of the substantial delays in approving the new regulatory framework. There is full ownership of the pollution monitoring program which allows to oversee the environmental impact in both lagoon and sea waters. 30. In addition, the lease contract reinforces the sustainability of project achievements by: (a) improving the financial autonomy and viability of the sanitation sector; (b) facilitating the control of house service connections; (c) incorporating the maintenance of the tertiary networks of public housing projects within the scope of the contract; and (d) reducing administrative delays in approving programs of maintenance activities. F. BANK PERFORMANCE 31. The Bank played a decisive role in project preparation by insisting on an independent review of the original design studies which had recommended complex treatment solutions. The review concluded that the ocean outfall was the best environmental solution as well as the least-cost solution. The task manager's decision to change the name of the project from "Third Abidjan Sewerage Project" to "Abidjan Environmental Protection Project" created a renewed interest in the project on both Bank's and Borrower's side and helped to readily find a cofinancier. The global environmental impact of the project on the lagoon and the ocean waters was carefully reviewed by the Bank. The direct impact of project works was clearly overlooked, even if supervision missions repeatedly raised concerns in that respect. A mitigation plan-not required for environmental projects at the time of appraisal-would have avoided the delays in commissioning the ocean outfall. 32. The frequency of supervision missions (every six months) was adequate, except for a gap of thirteen months between March 1992 and April 1993. There was continuity in task management. In retrospect, the participation of an environmental specialist would have been an asset, particularly to monitor progress and to assist the Borrower on the regulatory framework. The wording of the relevant conditionality was not very helpful, as it had been agreed to enact regulations at the completion of physical works, without mentioning a specific date. The successive extensions of the closing date should have been used to press the Borrower to take action. - 8 - 33. Confronted with continuous lack of compliance with two financial covenants, the Bank recognized that the accumulation of arrears was beyond the control of sectoral institutions and did not use formal remedies. It was a macro-economic issue which could only be addressed by an adjustment of the exchange rate. Instead, Bank efforts were successfully directed towards bringing a consensus on the reformn of the contractual framework. G. BORROWER PERFORMANCE 34. Project preparation from the detailed design stage was entirely carried out by the Borrower. The quality of the preparation was generally satisfactory, although the focus was primarily on the technical side. Cost recovery mechanisms were also thoroughly reviewed. At an earlier stage, project design had benefited from CRO's inputs and from the regulatory experience of the Directorate of Environment, Standards and Technology (DENT) of the Ministry of Industry. In 1987, the Borrower had appointed DCGTx as the negotiator of all loans and the sole interlocutor of the Bank. The immediate benefits of that decision were later outweighed by the initial lack of commitment of other Ivorian stakeholders which had been de facto excluded from the process. 35. Implementation performance was mixed. Compliance with financial covenants was deficient over most of the implementation period, critical decisions were delayed and sensitivity to popular participation was minimal. DCGTx' contract management and supervision performance was uneven and declined with the attrition of the staff of the agency after 1991. On the positive side, one may mention the swift completion of the outfall, the quality of project monitoring and reporting, and the buildup of genuine Ivorian capabilities, evidenced by the preparation of the lease contract. H. ASSESSMENT OF OUTCOME 36. The outcome of the project is rated satisfactory on the basis of the following considerations: (a) the project provides an environmentally sound solution for the disposal of industrial and domestic waste water and will reduce the pollution load of lagoon waters by 80 percent; (b) the project supported the establishment of an adequate pollution monitoring program; (c) the net present value-calculated with a discount rate of 10 percent on the whole of project investments-is CFA franc 2.5 billion and the ERR is 12 percent; - 7 - participation or merely of public consultation, which was taken into account only at the end of the project, to settle the nuisance problems in Port Bouet. E. PROJECT SUSTAINABILITY 29. The sustainability of the environmental benefits of the project was contingent on the satisfactory operation of the sewerage network and on the enforcement of the regulatory framework. The new facilities are not based on complex processes and do not present particular operating difficulties. The project will likely maintain its physical achievements in view of the past performances of the private operator. The strong commitment of the Government to a functional sewerage system for Abidjan is not questionable, even in the face of the substantial delays in approving the new regulatory framework. There is full ownership of the pollution monitoring program which allows to oversee the environmental impact in both lagoon and sea waters. 30. In addition, the lease contract reinforces the sustainability of project achievements by: (a) improving the financial autonomy and viability of the sanitation sector; (b) facilitating the control of house service connections; (c) incorporating the maintenance of the tertiary networks of public housing projects within the scope of the contract; and (d) reducing administrative delays in approving programs of maintenance activities. F. BANK PERFORMANCE 31. The Bank played a decisive role in project preparation by insisting on an independent review of the original design studies which had recommended complex treatment solutions. The review concluded that the ocean outfall was the best environmental solution as well as the least-cost solution. The task manager's decision to change the name of the project from "Third Abidjan Sewerage Project" to "Abidjan Environmental Protection Project" created a renewed interest in the project on both Bank's and Borrower's side and helped to readily find a cofinancier. The global environmental impact of the project on the lagoon and the ocean waters was carefully reviewed by the Bank. The direct impact of project works was clearly overlooked, even if supervision missions repeatedly raised concerns in that respect. A mitigation plan-not required for environmental projects at the time of appraisal-would have avoided the delays in commissioning the ocean outfall. 32. The frequency of supervision missions (every six months) was adequate, except for a gap of thirteen months between March 1992 and April 1993. There was continuity in task management. In retrospect, the participation of an environmental specialist would have been an asset, particularly to monitor progress and to assist the Borrower on the regulatory framework. The wording of the relevant conditionality was not very helpful, as it had been agreed to enact regulations at the completion of physical works, without mentioning a specific date. The successive extensions of the closing date should have been used to press the Borrower to take action. - 8 - 33. Confronted with continuous lack of compliance with two financial covenants, the Bank recognized that the accumulation of arrears was beyond the control of sectoral institutions and did not use formal remedies. It was a macro-economic issue which could only be addressed by an adjustment of the exchange rate. Instead, Bank efforts were successfully directed towards bringing a consensus on the reform of the contractual framework. G. BORROWER PERFORMANCE 34. Project preparation from the detailed design stage was entirely carried out by the Borrower. The quality of the preparation was generally satisfactory, although the focus was primarily on the technical side. Cost recovery mechanisms were also thoroughly reviewed. At an earlier stage, project design had benefited from CRO's inputs and from the regulatory experience of the Directorate of Environment, Standards and Technology (DENT) of the Ministry of Industry. In 1987, the Borrower had appointed DCGTx as the negotiator of all loans and the sole interlocutor of the Bank. The immediate benefits of that decision were later outweighed by the initial lack of commitment of other Ivorian stakeholders which had been de facto excluded from the process. 35. Implementation performance was mixed. Compliance with financial covenants was deficient over most of the implementation period, critical decisions were delayed and sensitivity to popular participation was minimal. DCGTx' contract management and supervision performance was uneven and declined with the attrition of the staff of the agency after 1991. On the positive side, one may mention the swift completion of the outfall, the quality of project monitoring and reporting, and the buildup of genuine Ivorian capabilities, evidenced by the preparation of the lease contract. H. ASSESSMENT OF OUTCOME 36. The outcome of the project is rated satisfactory on the basis of the following considerations: (a) the project provides an environmentally sound solution for the disposal of industrial and domestic waste water and will reduce the pollution load of lagoon waters by 80 percent; (b) the project supported the establishment of an adequate pollution monitoring program; (c) the net present value-calculated with a discount rate of 10 percent on the whole of project investments-is CFA franc 2.5 billion and the ERR is 12 percent; - 9 - (d) the project is likely to maintain its achievements; facilities will be operated and maintained under a lease contract which marks a substantial improvement over the previous arrangements and ensures a better financial sustainability of the sanitation facilities. 1. FUTURE OPERATION 37. The Borrower has not yet submitted the operational plan. Operational responsibilities have been streamlined and are vested into two agencies only: (a) Sodeci, the lease contract of which provides a detailed framework of sewerage and drainage operations, including revenue collection; and (b) the Directorate of Environment of MLCVE, responsible for supervising Sodeci and enforcing the regulatory framework. Resources generated by the user fees will fund the incremental expenditures of the pollution monitoring program. 38. The Bank should follow-up project operations in two respects. First, the actual environment impact of the ocean outfall should be closely monitored as it is the only facility of this kind on the West African coast. Second the execution of the lease contract-again a pretniere in sub-Saharan Africa-should lead to interesting conclusions. Bank assistance should continue in the sanitation sector, to help preparing a genuine national strategy that would not only build on Abidjan's experience, but also explore new solutions and pave the way for better beneficiary participation. J. KEY LESSONS LEARNED 39. The key lessons learned from project implementation are as follows: (a) Establishing surcharges on water tariffs for further remittance to other entities. particularly for financing operating expenditures, is risky. Those arrangements are quite sensitive to the (frequent) build-up of arrears on governmental water bills as the proceeds of the surcharge are likely to be held up by the utility as a compensation (para. 10); (b) Mitigation plans are essential. An environmental protection project may generate, as this was the case, negative side effects. The impact of construction works in urban areas should not be overlooked (para. 16); (c) Contract packaging should not aim exclusively at minimizing the number of contracts to simplify procurement, as large and heterogeneous contracts may have their shortcomings in terms of contract management (para. 17); (d) Time-based conditionalities should be attached to a dated deadline. The project conditionality requiring enactment of regulations by the time of completion could not be enforced (para. 32). - 10- PART II - STATISTICAL ANNEXES Table 1: Summary of Assessments A. Achievement of objectives Substantial Partial Negligible Not applicable Macro policies U LI El z Sector policies El E El Financial objectives 0l E 0E0 Institutional development El z El Physical objectives El E El Poverty reduction E E E l Gender issues al E E z Other social objectives E l El Environmental objectives El E El Public sector management E E 0l Private sector management El El El B. Project sustainability Likely Unlikely Uncertain z E ElO Highly C. Bank performance satisfactory Satisfactory Deficient Identification E E l Preparation assistance El El Appraisal l El Supervision ElE z Highly D. Borrower performance satisfactory Satisfactory Deficient Preparation E E l Implementation O E l Covenant compliance E El Operation (if applicable) l z E Highly Highly E. Assessment of outcome satisfactory Satisfactory Unsatisfactory Unsatisfactory E z E E - I1 - Table 2: Related Bank Loans/Credits Year of Loan/credit title Purpose approval Status Preceding operations 1. First Abidjan Sewerage and To set up the institutional framework of 1975 Completed Drainage Project (Loan 1076-IVC) the sector and to construct urgently in 1980 needed sewerage and drainage facilities. 2. Second Abidjan Sewerage and To develop the Abidjan sewerage and 1978 Completed Drainage Project (Loan 1577-IVC) drainage system and to strengthen sector in 1985 institutions. 3. Second Water Supply Project To expand water services in Abidjan and 1982 Completed (Loan 2130-IVC) 52 urban centers and to support the in 1992 development of rural water services. Following operations Water Supply and Sanitation Sector To support institutional reforms 1990 Completed Adjustment Loan (Loan 3240-lVC) (increased privatization and community- in 1991 based management of rural facilities) and financial restructuring. Table 3: Project Timetable Date actual/ Steps in project cycle Date Planned latest estimate Identification (Initial Project Brief) Apr-82 Preparation Mar-87 Pre-appraisal Apr-87 Appraisal 10-Jun-87 Post-Appraisal Jul-88 Negotiations Jun-89 23-Jun-89 Board presentation Aug-89 9-Jan-90 Signing Sep-89 16-Jan-90 Effectiveness Nov-89 I 1-Jun-90 Midterm review NA NA Project completion 30-Jun-93 31 -Dec-95 Loan closing 31-Dec-93 31-Dec-95 - 12 - Table 4: Cumulative Loan Disbursements - Estimated and Actual (US$ million) FY90 FY91 FY92 FY93 FY94 FY95 FY96 Appraisal Estimate 2.00 9.00 19.80 21.90 21.90 21.90 21.90 Actual 0.00 0.00 6.23 14.54 16.72 18.57 19.74 Actual as % of Estimate 0.0% 0.0% 31.5% 66.4% 76.3% 84.8% 90.0% Date of Final Disbursement May 15. 1996 Table 5 : Key Indicators for Project Implementation la. Key physical implementation indicators in SAR/President's Report Unit Estimated Actual A. Scope of Works Pipes laid (km) Outfall/diffuser km 1.20 1.27 Interceptor km 5.80 7.55 Sewers (neighborhoods) km 21.00 24.20 Sewers (industrial zone) km 6.00 7.14 Neighborhood pumping stations Number 8 17 Septage discharge stations Number 10 6 B. Service Coverage . Additional population coniected to the Equivalent- 140,000 174,000 interceptor inhabitants Industries connected to the interceptor Equivalent- NA 220,000 inhabitants - 13 - Table 5 (continued): Key Indicators for Project Implementation lb. Key financial indicators 1989 1991 1993 1995 Unit SAR Actual SAR Actual SAR Actual SAR Est. A. FNE: Sewerage & drainage activities Revenues . Sanitation tax M CFAF 2,652 2,234 3,094 2,969 3,441 1,514 4,014 3,000 . Allocation of water M CFAF 1,386 848 1,280 946 1,173 834 791 1,150 surcharge Operation & maintenance M CFAF 1,133 459 1,777 839 1,961 1,193 2,087 1,918 costs Debt service M CFAF 1,386 1,629 1,693 1,321 2.192 1,257 2,233 1,734 B. FNE: All activities Receivable accounts . Treasury (Sanitation tax) M CFAF 6,799 3,324 2,364 3,494 . Sodeci (Water surcharge) M CFAF 9,816 1,451 5,829 2,084 Payable Accounts . Treasury M CFAF 23,606 1,000 1,500 4,850 .Sodeci M CFAF 0 109 1,350 975 . CAA M CFAF 7,291 7,421 11,054 NA Water consumption M m3 56.3 55.1 59.7 55.8 63.5 59.5 67.2 65.6 Table 6: Key Indicators for Project Operation Not Applicable - 14 - Table 7: Studies Included in Project Purpose as defined Study at appraisal/redefined Status Impact of study I. Final design and tender To be carried out by DCGTx Completed by DCGTx Satisfactory outcome. documents for project under Government financing. works 2. Feasibility study and DCGTx to prepare a long-term Study not carried out due None master plan for Abidjan's investment program. to lack of Government sanitation and funding. environmental protection 3. Final design and tender To be carried out by DCGTx Preliminary design Limited impact, in the documents for follow-up under Government financing. studies carried out for absence of a sectoral project some neighborhoods of strategy. Abidjan. 4. Identification of Study added during project Pilot study completed by Will provide the basis for a anomalies of the sewerage implementation to identify Sodeci in Koumassi and program of rehabilitation of and drainage networks faulty connections and Deux Plateaux. house connections and interference between sewers secondary networks. and drains. 5. Willingness to pay study Assessment of the willingness Surveys carried out by Study allowed to identify to pay for sanitation services RWSG-WA with Bank effective demand and in squatter settlements of the assistance. priorities for sanitation Port Bouet neighborhood. services in low-income Study added during project areas. implementation. 6. Pollution monitoring To define and carry out Completed by CR0 and Definition of the pollution program surveys of the quality of Ciapol. monitoring program. lagoon and sea waters. - 15 - Table 8 A: Project Costs (US$ million) Appraisal Estimate Actual/latest estimate Item Local Foreign Local Foreign costs costs Total costs costs Total 1. Ocean Outfall 1.13 10.19 11.32 0.99 8.92 9.91 2. Interceptor 3.51 7.63 11.14 5.48 5.63 11.11 3. Koumassi pumping 0.98 2.79 3.77 1.40 3.04 4.44 station & treatment plant 4. Secondary sewers & 4.30 8.38 12.68 8.00 3.42 11.42 pumping stations 5. Other 0.15 0.57 0.72 0.24 0.55 0.79 6. Supervision, Studies 1.59 8.68 10.27 1.88 2.83 4.71 and Training TOTAL PROJECT COST 11.66 38.24 49.90 17.98 24.40 42.38 Table 8 B: Project Financing (US$ million) Appraisal Estimate Actual/latest estimate Source Local Foreign Local Foreign costs a/ costs Total costs a/ costs b/ Total IDA 7.20 14.70 21.90 13.51 6.23 19.74 Govemment 1.50 8.50 10.00 1.88 2.83 4.71 EIB Loan 2.90 15.10 18.00 2.59 15.34 17.93 TOTAL 11.60 38.30 49.90 17.98 24.40 42.38 - 16 - Table 9: Economic Costs and Benefits Item Unit Appraisal estimate Actual/latest estimate ERR % 15.4 12.0 Present value of costs | Capital costs M CFAF 8,838 7,532 . Incremental operating costs M CFAF 2,459 1,090 Sub-total M CFAF 11,297 8,622 Present value of benefits . Property values M CFAF 13,774 9,388 . Fisheries output M CFAF 5,214 1,767 Sub-total M CFAF 18,988 11,155 Net present value M CFAF 7,690 2,533 Assumptions of the SAR retained in the latest estimate: * Discount rate: 10 percent; * Real land prices have reached again the values observed before the January 1994 devaluation; * The area where land values benefit from the project spread over about 509 hectares. Main variances between appraisal estimates and latest estimates: * Capital costs and incremental operating costs are 5 percent and 35 percent below SAR estimates, respectively; incremental operating costs were revised to reflect the actual prices of Sodeci's contract of October 1994; * The calculation period has been adjusted to take into account the actual completion date; benefits accrue from 1996 onwards instead of 1992; * Land development in the vicinity of the lagoon was delayed by five years, compared to SAR expectations; * Since the baseline surveys carried out under the pollution program did not found evidence of extensive marine pollution, the project might not have any impact on the output of fisheries in sea waters. Benefits expected in the SAR in that respect will not materialize. -17- Table 10: Status of Legal covenants Agreement Fulfillment Text Covenant Date Description of Covenant Comments Reference Class Status Original Revised Section 2.02 3 C Open and maintain a special Special account opened in account in CFA franc in CAA CAA in April 199 1. First deposit of CFA franc 100 million made on September 17, 1991. Section 3.03 6, 10 CD Issue, on completion of the Approbation of (a) works, lagoon environmental environmental regulations protection regulations under way applicable to companies and individuals dumping sewage outside of discharge stations. Section 3.03 6, 10 CD Issue on completion of the Same as above. (b) works regulations pertaining to industrial waste water and permit system for said effluent. Section 3.04 10 C On completion of the works, Unit set up in Directorate of adequately organize the unit Environment of the Ministry of the directorate in charge of of Environment and enforcing regulations Construction. applicable to organic wastes, water quality and dumping of septage. Section 3.05 10 C Upon completion of the Arrangements were made by works, make arrangements amending the maintenance with a commercial company contract of Sodeci. A lease for the operation and contract is being negotiated. maintenance of the new facilities. Section 3.06 9,6 CD 6/30/90 12/31/93 Establish a monitoring Complied with in December program on the quality of 1993. Monitoring program ocean and lagoon waters to be carried out by CRO and carried out by the pollution Ciapol. control laboratory of the MM. Section 4.01 1 CD Continuous Furnish to the Bank, not later Audit reports of Project (b) than 6 months after end of accounts and Special Account fiscal year, audit reports on sent to the Bank in June 1995. the project accounts, of the Audit of financial statements agency of the Borrower of FNE received in December carrying out the project, of 1995. FNE and of the Special Account. - 18- Table 10 (continued): Status of Legal Covenants Agreement Fulfillment Text Covenant Date Description of Covenant Comments Reference Class Status Original Revised Section 4.01 1 C Continuous Ensure that audit report Audit report received in (c) includes a separate opinion June 1995. regarding SOEs. Section 4.02 2, 11 NC Continuous Borrower to take all CFA franc 3.5 billion owed (a) necessary measures for the by Treasury to FNE which prompt deposit of the owes CFA franc 4.9 billion Sanitation Tax in FNE. to the Treasury. Compensation of cross debts between CAA, FNE and the Treasury under way. Section 4.02 2, 11 NC Continuous Borrower to cause Sodeci to Borrower authorized (b) transfer to FNE the Sodeci to stop transferring proceeds of the water surcharge to FNE in surcharge in accordance January 1992 to with provisions of compensate unpaid water concession contract. bills from Government. Sodeci resumed payment of surcharge in 1995. Settlement of cross-debts between Sodeci and FNE completed in 1995. Section 4.03 2 C Continuous Allow operations of Complied with. (a) Abidjan's sewerage and drainage systems to generate each fiscal year revenues at least equal to operating expenses. Section 2, 9 CD Continuous Before December I of each Complied with in January 4.03(b) year, furnish to the Bank 1995. results of review of forecasts to check whether requirements of section 4.01 (a) will be met. Section 4.04 2, 1 NC Continuous Keep up to date the register Not complied with. of the fixed assets of Notional revaluation not Abidjan's sewerage and required until 1994, as drainage system under the inflation rates had been supervision of DCGTx and low have said assets revalued annually on a notional basis. - 19- Table 11: Bank Resources - Staff Inputs Stage of Planned Revised Actual project cycle Weeks US$ '000 Weeks US$ '000 Weeks USS '000 Through Appraisal 62.7 128.8 62.7 128.8 62.7 128.8 Appraisal -- Board 22.7 54.4 22.7 54.4 22.7 54.4 Board -- effectiveness 18.9 50.2 18.9 50.2 18.9 50.2 Supervision 67.0 224.0 67.0 224.0 60.8 193.4 Completion 6.0 18.0 6.0 18.0 4.0 12.0 TOTAL 177.3 475.4 177.3 475.4 169.1 438.8 - 20 - Table 12: Bank Resources - Missions Performance rating b/ Stage of Project Cycle Month/ Number Days in Staff Skills Implementa- Develop- Nature of Year of Field Represented a/ tion status ment problems c/ Persons objectives Through Appraisal Mar-87 4 13 SSE, FA, ENV, ENVCONS Appraisal through Jun-87 3 20 SSE, FA, EC Board Approval Oct-87 2 4 SSE, EC Jul-88 2 4 SSE, EC Supervision I Jun-90 1 7 SSE 1 I Supervision 2 Jan-91 2 3 SE, SEC I 1 Supervision 3 Nov-91 1 5 SEC 2 2 PP, PMP Supervision 4 Mar-92 2 6 SEC, SE 2 2 CLC Supervision 5 Apr-93 1 9 SE 2 2 CLC, FP Supervision 6 Nov-93 1 6 SE 2 1 FP Supervision 7 Mar-94 1 6 SE 2 1 CLC, FP Supervision 8 Jul-94 2 7 SE, PWS S S FP, ENVP Supervision 9 Nov-94 2 4 SE, PWS S S FP Supervision 10 Jul-95 1 9 PWS S S ENVP, FP Completion Nov-95 2 10 PWS, FACONS S S a/ Key to Specialization SSE = Senior Sanitary Engineer; SE Sanitary Engineer; EC = Economist; SEC = Senior Economist PWS = Principal Water Specialist; FA = Financial Analyst; FACONS = Financial Consultant ENV = Environmental Specialist; ENVCONS = Environmental Consultant b/ Key to Status I = Problem Free; 2 = Moderate problems; 3 = Major Problems U = Unsatisfactory; S = Satisfactory; HS = Highly Satisfactory c/ Key to Problems CLC = Compliance with Legal Covenants; PMP = Project Management Performance AF = Availability of Funds; TP = Training Progress PP = Procurement Progress; SP = Studies Progress FP = Financial Performance; ENVP = Environmental Performance APPENDIX A RtPUBLIQUE DE COTE D'IVOIRE PROJET DE PROTECTION DE L'ENVIRONNEMENT D'ABIDJAN (PRET 3155-IVC) AIDE-MEMOIRE (Mission de suivi 4 - 13 novembre 1995) 1. Une mission de la Banque mondiale composee de M. Richard Verspyck (charge de projet) et M. Simon Fajnzilberg (consultant) s'est rendue A Abidjan du 4 au 13 novembre 1995 pour suivre l'execution du projet de protection de l'environnement d'Abidjan. Elle a ete reque par S.E. M. Gon Coulibaly Lancine, Ministre de l'Environnement et du Tourisme (MET). La mission a tenu des rdunions de travail avec les responsables du projet A la DCGTx et au MET et avec M. Yao Bhorey, directeur des Fonds speciaux A la CAA. 2. Les objectifs de la mission 6taient de faire le point de la mise en service des installations du projet, d'examiner les dispositions envisagees pour l'exploitation des rdseaux d'assainissement et de discuter des dispositions A prendre en vue de la preparation du rapport d'achevement. Les conclusions et recommandations de la mission de suivi figurant ci-dessous portent egalement sur l'achevement des travaux et la situation financi&e du secteur de l'eau et de l'assainissement. On trouvera en annexe I des commentaires detailles sur le projet de cahier des charges d'affermage, en annexe 2 un projet r6vise de reglement du service d'assainissement adapt6 au cadre contractuel de l'affermage, et en annexe 3 la description des documents et donndes A fournir pour la preparation du rapport d'achevement. A. ACHEVEMENT DES TRAVAUX ET MISE EN SERVICE Reseaux et installations 3. La mission a visite la station de pr6traitement et de refoulement de Koumassi-Digue, et l'ouvrage de d&part de l'emissaire en mer a Port-Bouet (chemin6e d'equilibre) ainsi que des ouvrages existants, notamment la station Allabra et un grand collecteur d'eaux pluviales (canal du Gouro aboutissant A l'Indeni6) qui recoit actuellement des rejets d'eaux usees. L'ensemble des ouvrages pr6vus initialement est acheve; les derni&res r6ceptions sont programmdes d'ici la fin du mois de novembre 1995. Les demiers travaux complementaires sont en voie d'achevement a Adjame (raccordement de la caseme et 220 logements) et A Port-Bouet (raccordement des abattoirs). 4. L'avenant no. 3 et dernier au marche Sonitra et le marche de l'installation de desodorisation ont ete signes en septembre 1995. Le solde previsionnel non decaisse du pret 3155-IVC s'eleve A 0,95 milliard de FCFA (et A 1,4 milliard de FCFA pour le pret de la BEI). La cloture du pret le 31 decembre 1995 devrait conduire A l'annulation d'environ 2 millions de dollars EU. - 22 - Mise en service 5. Les ouvrages et reseaux construits durant le projet fonctionnent, a l'exception des stations de depotage et des installations terminales (station de refoulement et emissaire en mer) qui ne seront mises en service qu'apres l'installation des equipements de desodorisation de la chemin6e d'equilibre. La DCGTx a remis a la mission le protocole d'accord conclu a cet effet le 25 octobre 1995 avec les riverains de Port-Bouet. Cet accord prevoit egalement la reparation des dommages causes par le battage des palplanches du chantier de 1'emissaire et le retablissement de l'ecoulement normal des eaux pluviales aux alentours de la cheminee. Les equipements de desodorisation seront installes en decembre. Comme convenu, les effluents sont rejet6s en plusieurs points pour eviter de concentrer la pollution dans la lagune de Bietri a la sortie du pretraitement de la station de Koumassi-Digue. 6. Les stations de depotage construites ou rehabilitees par le projet ne sont touj ours pas en service. Seule l'ancienne station 7J1 fonctionne. Cette situation, dommageable pour 1'environnement et particulierement penalisante pour les populations du nord de la ville, ne peut durer. Le MET va convoquer une reunion de concertation avec les communes d'Abidjan. En attendant, la mission recommande une mise en service immediate des installations pour garantir au moins le niveau de service foumi avant le projet; le gardiennage des stations peut etre assure par Sodeci en utilisant les prix unitaires du contrat actuel. Reglementation et suivi de la pollution 7. La campagne de mesures de la pollution lagunaire et marine a et reprise par le Ciapol au mois de septembre 1995, en ajoutant un nouveau point de prelevement a Koumassi-Digue. 8. Malgre des assurances repetees et contrairement aux dispositions de l'accord de pret, cette reglementation n'est pas en vigueur a I'achevement des travaux. S.E. M. le Ministre de l'Environnement partage les preoccupations de la mission sur ce retard et convoquera une reunion de finalisation des textes a la mi-decembre 1995. B. EXPLOITATION DES RESEAUX ET INSTALLATIONS 9. La visite des reseaux et installations existants et les anomalies de fonctionnement confirment, si besoin etait, les avantages d'un affermage. Le contrat actuel ne fournit aucune garantie de resultats. II faut de nombreux visas pour une simple reparation. Les dispositions relatives a la construction des branchements n'ont jamais et appliquees et les raccordements souvent effectues en violation des reglements. L'administration, en ne payant pas les prestations du contrat d'entretien - dans l'attente d'une compensation de creances avec Sodeci - s'est d'ailleurs placee en position de faiblesse vis a vis de l'exploitant. 10. La preparation du contrat d'affermage a suivi le calendrier prevu. Le MET et la DCGTx ont effectue au mois de septembre 1995 une mission d'information aupres de municipalites fran,aises portant notamment sur les criteres de mesures de performances de 1'exploitation, les modalites de contr6le dans le cadre de gestion deleguee des services d'assainissement. Les frais afferents a cette mission peuvent etre finances sur les fonds du pret a concurrence d'un montant hors taxes ne depassant pas 21.250.000 FCFA. Le MET et la DCGTx ont ensuite prepare un projet de cahier des charges d'affermage qui servira de base a une proposition financiere et a des negociations avec Sodeci. Appendix A - 23 - 11. La mission a revu avec l'equipe MET/DCGTx le projet de cahier des charges. Des commentaires detailles sur ce document figurent en annexe 1. La mission a souligne notamment les points suivants: (a) I'affermage est inseparable de la creation d'une redevance d'assainissement assise sur la consommation d'eau des abonnes (et des exploitants de forages prives) disposant d'un branchement d'assainissement; (b) la creation d'une taxe d'assainissement individuelle et l'interposition du fermier dans les relations entre proprietaires et vidangeurs n'est pas souhaitable; (c) 1'entree en vigueur de l'affermage est inseparable de la promulgation du reglement d'assainissement et de la reglementation des rejets; (d) le couit du contr6le de l'exploitant et du suivi de la pollution et des rejets devrait etre integre dans la redevance d'assainissement; (e) les equipements des stations devraient etre remis au fermier en l'etat oii ils se trouvent, sans prevoir de programme de rehabilitation a la charge de l'autorite contractante; l'obligation de renouvellement jouerait donc des l'origine du contrat, ce qui eviterait des discussions sans fin; (f) le fermier doit effectuer des 1'entree en vigueur du contrat un inventaire des branchements non conformes (dont il pourrait ensuite assurer la rehabilitation dans un dMlai a determiner); (g) le fermier devrait egalement avoir l'obligation de recenser les anomalies sur l'ensemble des reseaux de drainage et des egouts et d'etablir un programme de travaux de mise en conformite, a realiser par appel d'offres. 12. On trouvera en annexe 2 un projet revise de reglement du service d'assainissement adapte au cadre contractuel de l'affermage. C. SITUATION FINANCIERE ET AUDIT Situation financiere du secteur de 1'eau et de I'assainissement 13. La mission de suivi de juillet 1995 avait pris acte du deblocage intervenu dans les relations financieres entre les divers intervenants du secteur de l'hydraulique urbaine, tout en constatant des progres plus lents dans le secteur de l'assainissement. Les efforts d'apurement des dettes croisees se sont poursuivis, essentiellement entre le Tresor, la CAA et le FNE: (a) Le Tresor a verse I milliard d'arrieres de quote-part d'imp6t foncier au FNE; (b) le ministere des Finances, la CAA et le FNE sont convenus d'6taler le remboursement des emprunts echus et non regles par le FNE sur une periode de dix ans et de reechelonner la dette non echue sur trente ans avec un delai de grace de dix ans. 14. Le FNE et la Sodeci ont entame des negociations sur la compensation de leurs dettes crois6s. Les arrieres dus par le FNE a la Sodeci au titre du contrat d'entretien et d'exploitation des reseaux s'elevent a 3,5 milliards de FCFA. Appendix A - 24 - Audit 15. Le FNE avait indique en juillet 1995 que le rapport d'audit sur ses etats financiers de 1'exercice 1994 serait disponible fin septembre 1995 (le rapport d'audit des comptes du projet etant disponible depuis juin 1995). Ce delai, qui aboutissait dejA A un retard de trois mois par rapport aux dispositions de l'accord de pret, n'a pas ete respecte. La mission a exprime ses plus vives preoccupations devant cette situation, d'autant plus que les comptes 1994 ne sont pas encore arretes. Elle demande A la CAA et au FNE de tout mettre en oeuvre pour transmettre rapidement ce rapport. Elle rappelle que le defaut de transmission des rapports d'audit peut conduire A des delais dans le traitement d'autres operations de la Banque. D. RAPPORT D'ACHEVEMENT DU PROJET 16. L'annexe 3 decrit le processus de preparation du rapport de fin de projet (RFE) qui doit 8tre termine dans les six mois suivant la date de cloture du pret. La contribution ivoirienne A ce processus est egalement decrite de maniere specifique au PPEA. Cette contribution comprend: (a) I'elaboration d'un plan pour la phase operationnelle du projet (A fournir fin fevrier 1996); (b) l'etablissement et la transmission A la Banque avant fin janvier 1996 des informations sur la realisation du projet qui permettront a la Banque d'elaborer sa propre contribution au RFE; (c) l'elaboration d'un rapport d'evaluation finale du projet, a transmettre a la Banque avant fin fevrier 1996. La partie ivoirienne comnimuniquera A la Banque le nom du responsable charge de la preparation de ces documents 17. La DCGTx souhaite realiser un document (video et plaquette) sur l'experience du projet. La mission explorera la possibilite de financer ce document sur les fonds du pret des son retour A Washington. E. RESUME DES ACTIONS A ENTREPRENDRE 18. Les actions A entreprendre ou completer par la partie ivoirienne sont les suivantes: (a) achevement des travaux complementaires avant le 31 decembre 1995; (b) mise en service de l'emissaire en mer apres installation des equipements de desodorisation; (c) transmission a la Banque du rapport d'audit des comptes 1994 du FNE; (d) elaboration de la version finale du cahier des charges de I'affermage et du reglement d'assainissement; (e) transmission A la Banque des informations et rapports relatifs a l'achevement du projet (janvier-fevrier 1996); 19. La Banque informera l'Emprunteur des dispositions prises pour la cloture du pret. Appendix A - 25 - Abidjan, le 13 novembre 1995 Richard Verspyck Banque Mondiale Annexes (3) Ampliations: Primature Ministere des Finances Ministere de la Construction et de l'Urbanisme Ministere de l'Environnement et du Tourisme Direction et Contr6le des grands Travaux Caisse Autonome d'Amortissement Fonds national de l'Eau Banque europeenne d'Investissement Appendix A - 26 - APPENDIX B BORROWER'S CONTRIBUTION TO THE ICR Note: the following text reproduces the summaryfindings sections of the completion report prepared by DCGTx in March 1996. A. OUTCOME AND MAJOR ISSUES Two major issues may be outlined at completion of the implementation of the project: - some of the Government commitments have been partly executed or even not executed at all; - there were major delays in completing the project, compared to SAR's estimates. Execution of the Project Some of the Government commitments never materialized. They were essentially related to: carrying out the pilot on-site sanitation component; - enacting the legal and regulatory framework for controlling the discharge of waste water and for the protection of the environment of the city of Abidjan; - updating the Master Plan for the sanitation and environmental protection of Abidjan. The initial surveys of the quality of lagoon and coastal waters were carried out in 1993; the monitoring program was then put on hold following the delays in commissioning the project facilities, and resumed at the beginning of 1996. The contract for leasing the maintenance and operations of the sanitation and drainage facilities of Abidjan is being negotiated with Sodeci. The low rate of execution of several Government commitments may be explained as follows: insufficient coordination on the Ivorian side, which was evidenced by the implementation of the pilot component in Port-Bouet. Although a project document had been prepared by the Regional Water and Sanitation Group of the IBRD in cooperation with all parties involved, particularly the municipality of Port-Bouet, and after getting the Bank's no-objection to the proposed works and services, no concrete action was taken in the field; communication difficulties between the executing agency and the Employer that were compounded by the frequent changes of contracting authority during the execution of the project. Since the negotiations of the project, five - 27 - successive ministries have been granted the contracting authority for this project. Those communication difficulties did not allow to clarify the responsibilities of the various partners and to make a better use of the various capabilities; change in the organization and staffing of the project management team within the executing agency. Staff decreased from five professionals at the beginning of the project of whom: one expatriate project manager assigned to the project on a part-time basis; two engineers (one expatriate and one Ivorian) in charge of studies and monitoring, on a full time assignment; two professionals (one expatriate and one Ivorian) at full time for the supervision of the works, to three Ivorian professionals, from 1993 onwards, of whom one project manager on a part-time basis and two staff assigned at full time to the supervision of the works. Those changes did not facilitate the implementation of some studies and contractual responsibilities. Completion Delays The late completion of the physical components is mostly explained by the procurement and execution delays of the Sonitra contract. Procurement delays. The works started eighteen months after bid evaluation; the Bank's no-objection was obtained seven months after bid evaluation. The exceptionally long delay in getting the Bank's no-objection resulted from the Bank's willingness to come back on the waiver granted to the Government at negotiations. In addition, one may mention the usual slowness of the Ivorian procurement procedures, as evidenced in the last CPPR. Execution delays. The important delays in completing the Sonitra contract mostly result from: - the particular features of the works; - the lack of experience of the contractor in installing waste water pumping stations. Specific features of the works. Those works were carried out in urban areas and interfered with utility networks and existing sanitation facilities. This resulted into problems in accessing illegally-occupied right-of-ways and in relocating pipes, phone lines and power cables; this also required additional rehabilitation of some sanitation facilities which had deteriorated since the establishment of the detailed design of the connection of those facilities to the interceptor. The time required to carry out those activities-which were also delayed by local political considerations (in releasing the squatted right-of-ways)-had not been adequately assessed in determining the contractual time of completion; this indeed hindered the implementation schedule provided by the contractor. Appendix B - 28 - Lack of experience of the contractor. Delays in submitting the execution drawings of the neighborhood pumping stations were attributable to the lack of specific experience of the contractor and contributed to extend the completion time. One may remark that Sonitra- albeit having no prior experience in waste water pumping stations-had been awarded the contract as the amount of that component amounted to only six percent of the overall contract. In addition, the local contractor to which Sonitra envisaged to sub-contract the installation of the pumping equipment lost its best professionals shortly before the start-up. Responsiveness of the supervision team. In dealing with the contractor's delays, the supervision team did not consider outlining the specific delays attributable to the particular features listed above to differentiate them from the delays directly attributable to the contractor's performance, in order to proceed with contractual remedies and penalties which might have created incentives for the contractor to speed up work. As regards the delay observed in producing the execution drawings of the pumping stations, the supervision team should have instructed the contractor to employ a competent professional with adequate experience in electromechanical equipment to assist in carrying out that assignment. Beyond the main factors having hampered the execution of the project and looking at the delay in commissioning the facilities, one may mention the following circumstances: - the insufficient information provided to the population and the absence of an environmental assessment of the works which proved to be detrimental to the work progress, - the difficult start-up of the collaboration between the executing agency and the ministerial departments in charge of managing the sanitation facilities which considerably hindered the issuance of taking-over certificates and the commissioning of the new facilities, which generated additional operating costs that had to be financed under the project. B. RECOMMENDATIONS The Abidjan Environmental Protection Project indeed allowed to complete the primary network for collecting and discharging Abidjan's waste water, which would facilitate further programs of connections to the main interceptor; however, to fully achieve the project objective of eliminating in due time any discharge of effluents in the lagoon, the following actions must be taken: Short-term actions: * Technical actions: - to finalize and sign the lease contract being negotiated with Sodeci; - in cooperation with Sodeci, to launch a public awareness campaign to convince the population to value their sanitation facilities and to hook up to them adequately; - to carry out works to bring the sanitation and drainage networks up to standards to optimize their use and eliminate all discharge of waste water into the lagoon through the drainage facilities; Appendix B - 29 - - to contemplate carrying out a rehabilitation program for the sanitation and drainage facilities of Abidjan; - to pursue the program monitoring the pollution of lagoon and sea waters, as well as the control of industrial effluents; - to update the master plan for the sanitation and environmental protection of Abidjan, taking into account the selected and implemented technical solution for the eventual disposal of waste water; * Regulatory actions: - to establish a sanitation surcharge based on the water consumption of the water users connected to the sewerage system, in order to finance the costs of: the lease contract, as regards sewerage operations; the supervision of the private operator and of the pollution monitoring program, including the control of industrial effluents; the works required to bring the networks up to standards; the rehabilitation program; possibly, a program of social connections to the sewerage system in densely populated areas, with a specific contribution of the beneficiaries. - to improve the functioning of the financial channels to and from FNE in order to: ensure the financing of the lease contract as regards the drainage operations; cover the debt service of the sanitation sub-sector; possibly, create borrowing opportunities to finance investments for the sub-sector. * Medium- and long-term actions: - to execute works for connecting the secondary sewerage networks of Banco and Djibi to the interceptor, in line with the recommendations of the updated master plan studies which should be carried out in the near future. In addition, the following recommendations are brought forward to ensure a better execution of this kind of project: - to deepen the environmental assessment studies, - to proceed first with abundant information of the general public on project objectives, - to establish a project team within the executing agency, staffed with professionals exclusively assigned to project management and to replace departing staff of the team as needed. Appendix B - 30 - Regarding disbursements procedures, it would be desirable for the EIB to adopt procedures identical to the ones used for IBRD, namely to open a separate Special Account dealing with the payment of expenditures below a specific threshold and to use direct payments by the EIB to the contractor for larger expenditures, without using the Central Projects Account of CAA. Appendix B -31 - APPENDIX C COMMENTS RECEIVED FROM THE EUROPEAN INVESTMENT BANK E;E I EIB Banque Europdenne d'Investissement I European Invest ent Bank fhix service no (352) 43 77 04 transmis le: no d'enregistrement. centre de d6penses: 052 / PA - ACP I DF=st_natalre(s)/addressed to Ml Richard Verspyck Tt e World Bank W gst Central Africa Department W ashington, D.C. UtIITED STATES Fs no(s) I Nombre de pages A sulvre/number of pages to foil )w 0O0 1.202.477-6391 / 0 E: p6diteur/sender J-e n-Philippe de Jong Rt~marques/notes Dc ar Sir, Su"ject: COTE D'IVOIRE - ICR for Abidjan EnvironmentafProtection Project Wi! thank you for sending us the Implementation Competion Report forthe Abidjan Environmental Pn otection Project, which was the subject of a co-financing by IBRD and EIB. Wi! have read the ICR with much interest and do fully support the conclusions of the report. Yo irs Sincerely. Da e 04/06/96 EUROPEAN VESTMENT BANK -Ph de o_n; 'J. Reversade J, Appendix C En .:as de probl6me de r6cepbon, vouUIoz t6l4phoner au If rocepXon is unsatistactorv, please phone 437-755 IMAGING Report No: 15.736 Type: IC('