Page 1 PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB3433 Project Name IQ-EMERG. COMMUNITY INFRASTR. REHAB. II Region MIDDLE EAST AND NORTH AFRICA Sector Irrigation and drainage (75%);Water supply (25%) Project ID P109296 Borrower(s) GOVERNMENT OF IRAQ Implementing Agency IQ - Ministry of Water Resources Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared December 4, 2007 Estimated Date of Appraisal Authorization January 10, 2008 Estimated Date of Board Approval January 31, 2008 1. Key development issues and rationale for Bank involvement 1. Iraq water sector has been plunged into crisis, with dramatic effect on the incomes and health status of the Iraqi people. The lack of preventative maintenance since the 1980s and the heavy dependence on public budgetary support have both diminished the effectiveness of service organizations to meet the day-to-day needs of households and farmers. The normal response in such a human and economic crisis is to invest in infrastructure, and this is clearly imperative for Iraq’s degraded water assets. Further, global experience with post-conflict situations shows that the crisis provides an opportunity for instituting sensible reforms on the policy front. 2. The comparative advantages of the Bank lies in its ability to: (i) bring its international experiences and best practices in community rehabilitation and development projects under post- conflict/in-conflict conditions (Afghanistan, East Timor, Kosovo, West Bank and Gaza); and (ii) build capacity in existing local Iraqi institutions by involving them in the execution of the Project and thereby creating greater commitment and ownership of the reconstruction process of their country. 3. In cooperation with the GOI, the Bank completed in FY06 a diagnostic Sector Work entitled “Iraq Water Resources Assistance Strategy” . One of its key recommendations is to use an output-based approach, by targeting investments in priority rehabilitation and modernization to achieve vivid and immediate improvements in rural water infrastructure. These investments would be contingent upon an assurance to achieve tangible and immediate results of water security and employment creation. 2. The Ongoing Operation: Objectives and Description 4. The Bank’s line counterpart mandated to address rural-water and irrigation services has been the Ministry of Water Resources (MOWR). The Bank, through the multi-donor Iraq Trust Funds (ITF) program, has been supporting MOWR since September 2004 through the Page 2 “ Emergency Community Infrastructure Rehabilitation Project “ (ECIRP), having the size of $20 million. ECIRP was effective in December 2004 and due to close in end March 2008. 5. Strategic Context and Donor Coordination: The project employs a flexible programmatic approach that allows interventions to adapt to the changing realities on the ground and to the interventions of other donors. Although the project’s focus is on job creation and local impact, it helps lay the groundwork for irrigation and drainage sector rehabilitation and reform . Project Development Objective (PDOs) and Description : 6. The project has been using a phased and flexible approach building on pilots and increasing community involvement. The project aims to generate near-term employment while addressing urgent rural rehabilitation needs. It is designed through a flexible program of labor- intensive, small-scale civil works to restore and improve rural water supply and irrigation infrastructure, particularly those located in low-income areas. The project finances 22 civil-work subprojects and 10 goods contracts. 7. The three specific PDOs are: (i) to restore some of the basic small-scale water supply, irrigation and drainage facilities in the rural areas that are currently in a damaged state and causing hardship to the rural inhabitants; (ii) to carry out the restoration works in a manner that creates short-term employment in communities where the sub-projects are located; and (iii) to increase community involvement in small-scale infrastructure rehabilitation that could eventually help result in decentralization through community planning, implementation and operation and maintenance of these infrastructures. 8. The principal outputs of the project are: (i) increased short-term employment in project areas across all Iraq; (ii) improved access to community infrastructure and services; (iii) enhanced central and decentral capacity to implement infrastructure programs; and (iv) increased private-sector activity in rural areas through opportunities for local contractors and suppliers. 9. Geographic Coverage: The project benefits thirteen governorates: Al Muthana, Baghdad, Thi-Qar, Sulaymaniyah, Wasset, Najaf, Diyala, Karbala, Erbil, Salahuddin, Babel, Dahook and El-Qadisiah. 10. Project Components and Costs: 1. Subprojects in 13 governorates (US$17 million) 2. Procurement of goods for the MoWR (US$ 2.3 million) 3. Project management and capacity building (US$0.7 million) 11. Project Costs by Category of Expenditure: Civil works : US$15 million; Goods : US$2.3 million (e.g., earthmoving equipment, vehicles); Consulting services & institutional strengthening : US$0.7 million. Contingencies : US$2 million Page 3 12. Status of Implementation and Impacts: The project is rated fully satisfactory (per the last three ISRs) and has been implemented at a rapid pace. Eighteen subprojects amounting to about US$15.2 million are completed in nine governorates. Four subprojects are underway (with completion rates averaging 60%) and expected to be completed by end December 2007. Project commitments and disbursements reached 100% and 71% respectively. Thus far, the project has achieved the following impacts: (a) Created an estimated 152,000 man-days of employment (against a target 183,000 by the closing date); (b) Improved 67,000 hectares of irrigated areas (against a target 89,000 by the closing date); (c) Benefited over 100,000 farmers (against a target 151,000 by the closing date); and (d) Achieved an average of 6-7 bidders per contract, indicating a competitive procurement environment. 3. Rationale and Description of the Proposed Additional ITF 13. As implied above, the smaller-scale, spatially dispersed subprojects under ECIRP are currently performing better and faster than the larger-scale ITF projects. The project experienced the highest disbursement rates and most effective results amongst the ITF portfolio. Thus, a scaling up has been advocated by the ITF donors and has been formally requested by GOI. 14. The sector and country units agreed that ECIRP can readily receive additional $15 million from the uncommitted balance of the ITF. Moreover, the MOWR indicated it can effectively spend up to $50 million before the ITF closure in end 2010, of which the MOWR has already prepared technical designs and fast-tracked feasibility studies for a $30-million worth of subprojects. Therefore, awaiting Bank and GOI decision is to further increase ECIRP’s finance by reallocating another US$15 million from the non/less disbursing components of the other ITF projects. The decision is expected to be made amid the annual meetings upcoming by end October 2007. Accordingly, the Project Paper (PP, per OP13.20) will be prepared assuming that the total additional ITF finance could be US$30 million. 15. The additional financing will contribute to the same (PDOs) stated above, albeit through minimal improvements in project design. The improvements in design aim to further expedite implementation, and to enhance impacts and ownership of the end beneficiaries. 16. Project Components: The ongoing project is designed as an emergency operation that is able to respond to evolving demands in terms of intervention and financing requirements. The Additional Financing will use the same components of the ongoing Project, as follows: Component 1 : Rehabilitation and modernization of small irrigation and drainage networks (US$ 22 million). This would include amongst others improving the physical state of main and secondary canals and drains and associated structures. In 2006, the Iraqi Team presented to the Bank a list of 15 sub-projects to be financed under this component. Recently the Iraqi team presented a slightly modified list containing 15 sub-projects, four of which are in the Kurdistan Region. Funds allocated for each subproject range between US$0.75 and 2 million. It was agreed with the Iraqi Team that the so-called “Annex 1” for each of those 15 subprojects would Page 4 be updated, giving special attention to the areas and populations benefiting from the project, and sent to the Bank for review. To be noted, some of the sub-projects will also help in providing water supply to rural populations. Component 2 : Equipment and Goods (US$5 million). This would include the procurement of machinery (about 15 in number) and equipment for the MOWR central and regional offices. The machinery and equipment would include: excavators, bulldozers, graders, pickups (20 in number), various communication equipment, office supplies, etc. The Iraqi Team would send to the Bank the full list of goods to be procured under the new project with their associated costs. Component 3 : Technical Assistance and Training (US$2 million). This would include: (a) employment of auditors for project’s accounts; (b) field surveys to determine the project’s impact on agriculture production; and (c) training of MOWR personnel in the fields of water resources, farmer participation, information technology, construction supervision; etc. Component 4 : Project Management (US$1 million). This would include: (a) Project Management Team (PMT) costs related to supervision of project’s activities; and (b) supplementary costs for construction supervision by MOWR engineers. 17. Bank staff, in the short-term, will monitor progress based on consultant field reports and will have meetings with the client in Amman to discuss progress. Training will also be provided to the implementing agencies (project staff of MOWR and representatives of local government/farmers/communities) to strengthen capacity in technical, project management and fiduciary skills including environmental and social safeguards. 18. The Ministry of Planning and Development Cooperation (MOPDC) is the responsible agency coordinating the project with the Bank. MOWR will prepare lists of specific priority subprojects to be funded under the Additional Financing, focusing on rehabilitation of water supply systems, irrigation canals and pumps, and drainage infrastructure. Eligibility of subprojects will be determined according to a set of criteria that include technical, economic and environmental soundness, involvement of community, and readiness for implementation. Details on the eligibility criteria for project financing are being finalized with the Government representatives during appraisal and negotiation. 19. MOPDC will review the proposed program and ensure that there is no overlap or duplication with other donors’ activities. Since the proposed Additional Financing is expected to be funded through the ITF, it will be vetted and cleared by the Strategic Review Committee of the Government of Iraq. 20. Project design rests on rapid rural appraisals and simplified feasibility studies for the subprojects proposed by MOWR, which are conducted by the local Iraqi consultants hired under the project. Given the large information gaps on the situation in rural Iraq, especially the lack of an in-depth social analysis, community driven interventions will be gradually phased in as experience grows, both within the Bank and our counterparts in the ministries and participating Governorates. Page 5 21. To ensure fiduciary compliance, the project scope has been initially limited to the water sector so as to avoid complex procurement and financial management arrangements across several sectoral Government entities. For all Bank operations, the Bank has been engaging a qualified firm (a Fiduciary Monitoring Agent) to monitor procurement, disbursement, and financial reporting related to the ITF, to support the Bank’s own supervision. 22. Donor coordination with agencies active in the water sector will be actively pursued as part of the preparation, implementation and monitoring of the proposed emergency intervention. 4. Safeguard policies that might apply [Guideline: Refer to section 5 of the PCN. Which safeguard policies might apply to the project and in what ways? What actions might be needed during project preparation to assess safeguard issues and prepare to mitigate them?] Environmental Assessment (OP/BP 4.01): The Project recognizes the emergency nature of the proposed relief and reconstruction interventions, and the related need for immediate assistance, while at the same time ensures due diligence in managing potential environmental and social risks. The proposed additional financing operation will be used in executing a number of small-scale rehabilitation subprojects, each in the range of US$2,000,000 maximum. These subprojects are anticipated to have no major environmental or social impacts. Furthermore, the proposed Project is being processed under emergency procedures OP 8.00, and the environmental and social safeguard assessments are expected to be carried out during implementation under an environmental and social safeguards framework (revised ESSAF), which has been specifically tuned for the Iraq situation and has already been disclosed in Iraq and in the Bank’s InfoShop. The proposed Additional Financing, as compared to the ongoingproject, will implicate no changes as to ESSAF. For preparation and appraisal of each subproject financed through the Additional Financing, the client is responsible for: (1) vetting this subproject against ESSAF, (2) explaining how to address the safeguards issues if any, and (3) sharing the results with the Bank towards completing the appraisal. Post project effectiveness, and to account for any safeguards issue that may emerge on-the-spot upon starting the field works, the client is to insert legal clauses in the respective civil-work biding documents, thus mandating the contractor to address this issue. Physical Cultural Resources (OP/BP 4.11: To be determined during appraisal. Involuntary Resettlement (OP/BP 4.12: To be determined during appraisal. 5. Tentative financing Source: ($m.) Borrower 0 Iraq Reconstruction Trust Fund 15 Total 15 Page 6 6. Contact point Contact: Ahmed Shawky M. Abdel Ghany Title: Young Professional Tel: (202) 473-5711 Fax: Email: ashawky@worldbank.org WB15774 P:\!UNITS\MNSSD\AShawky\ECIRP II - P109296\Prep\Project Information Document-Concept Stage.doc 12/04/2007 10:01:00 AM