Document of The World Bank FOR OFFICIAL USE ONLY Report No: 59948-GZ PROJECT APPRAISAL DOCUMENT ON A PROPOSED TECHNICAL ASSISTANCE GRANT IN THE AMOUNT OF US$3.0 MILLION TO THE PALESTINIAN LIBERATION ORGANIZATION (FOR THE BENEFIT OF THE PALESTINIAN AUTHORITY) FOR A WATER SECTOR CAPACITY BUILDING PROJECT March 3, 2011 Sustainable Development Department Middle East and North Africa Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank`s policy on Access to Information. CURRENCY EQUIVALENTS (Exchange Rate Effective March 3, 2011) Currency Unit = NIS (New Israeli Sheqalim) NIS 1 = US$0.28 US$ 1 = NIS 3.61 FISCAL YEAR January 1 ­ December 31 ABBREVIATIONS AND ACRONYMS AFD Agence Française de Developpement (French development assistance agency) COMSC Cabinet of Ministers Steering Committee CMTA Change Management Technical Assistance DA Designated Account EQA Environmental Quality Agency EU European Union GOI Government of Israel GTZ Gesellschaft für Technische Zusammenarbeit GmbH (German development assistance agency) IWSR Institutional Water Sector Review JWC Joint Water Council LR Legislative Review MNA Middle East and North Africa MNSSD Sustainable Development Department, Middle East and North Africa Region MNSWA Water Unit, Middle East and North Africa Region MOF Ministry of Finance NWC National Water Council OR Organizational Review PCBS Palestinian Central Bureau of Statistics PA Palestinian Authority PLO Palestinian Liberation Organization PP Procurement Plan PWA Palestinian Water Authority RSC Reform Steering Committee RCU Reform Coordinaton Unit SIDA Swedish International Development Cooperation Agency TPAT Technical Planning and Advisory Team UNDB United Nations Development Business WBG West Bank and Gaza WSS Water Supply and Sanitation Regional Vice President: Shamshad Akhtar Country Director: Mariam Sherman Department Director: Laszlo Lovei Sector Manager: Francis Ato Brown Task Team Leader: Richard Pollard i Table of Contents DATA SHEET ................................................................................................................................ 1 I. Strategic Context ..................................................................................................................... 4 A. Country Context .................................................................................................................. 4 B. Sectoral and Institutional Context....................................................................................... 5 C. Higher Level Objectives to which the Project Contributes ................................................ 8 II. Project Development Objectives............................................................................................. 9 A. PDO..................................................................................................................................... 9 B. PDO-level Results Indicators .............................................................................................. 9 III. Project Description.............................................................................................................. 9 A. Project components ............................................................................................................. 9 B. Project Financing .............................................................................................................. 10 C. Lessons Learned and Reflected in the Project Design ...................................................... 11 IV. Implementation ................................................................................................................. 12 A. Institutional and Implementation Arrangements .............................................................. 12 B. Results Monitoring and Evaluation .................................................................................. 12 C. Sustainability..................................................................................................................... 12 V. Key Risks .............................................................................................................................. 12 VI. Appraisal Summary .......................................................................................................... 13 A. Economic and Financial Analysis ..................................................................................... 13 B. Technical ........................................................................................................................... 14 C. Financial Management ...................................................................................................... 14 D. Procurement ...................................................................................................................... 15 E. Environment & Social Safeguards .................................................................................... 16 Annex 1: Results Framework and Monitoring.............................................................................. 17 Annex 2: Detailed Project Description ........................................................................................ 20 Annex 3: Implementation Arrangements ..................................................................................... 23 Annex 4: Operational Risk Assessment Framework (ORAF) ...................................................... 32 Annex 5: Implementation Support Plan........................................................................................ 44 Annex 6: Team Composition ........................................................................................................ 46 Annex 7: Palestinian Water Authority Organizational Chart and Staffing.................................. 47 Annex 8: Terms of Reference for Technical, Planning and Advisory Team (TPAT) ................. 49 Annex 9: Maps ........................................................................................................................... 103 ii DATA SHEET West Bank & Gaza Water Sector Capacity Building Project PROJECT APPRAISAL DOCUMENT Middle East and North Africa Region Date: 03/03/2011 Sector(s): General Water, Sanitation and Flood Protection Country Director: Mariam Sherman (WZ) Sector Director: Laszlo Lovei Theme(s): Water resource management (30%);Access to Sector Manager: Francis Ato Brown urban services and housing (30%);Municipal governance Team Leader(s): Richard Pollard and institution building (20%);Rural services and Project ID: P117443 infrastructure (20%) Lending Instrument: Technical Assistance EA Category: C Loan (TAL) Project Financing Data: Proposed terms: [ ] Loan [ ] Credit [ X ] Grant [ ] Guarantee [ ] Other: Source Total Amount (US$M) Total Project Cost: US$ 6.0 million equivalent Cofinancing: AFD US$ 1.4 million equivalent(1.0 million Euros) Sida US$ 1.6 million equivalent (13 million SEK) Total Bank financing: IBRD US$ 0 IDA (Trust Fund for Gaza and West Bank) New US$ 3.0 million Recommitted US$ 0 Borrower: Palestine Liberation Organization (for the benefit of the Palestinian Authority) Responsible Agency: Palestinian Water Authority Contact Person: Dr. Shaddad Attili, Minister Telephone No.: +972-2-242-9022 Fax No.: Email: sattili@pwa.ps Estimated IDA Grant Disbursements (Bank FY/US$ m) FY 2011 2012 2013 2014 2015 Annual 0.5 million 0.8 million 1.0 million 0.6 million 0.1 million Cumulative 0.5 million 1.3 million 2.3 million 2.9 million 3.0 million Retroactive financing agreed for up to $600,000 with effect from 1 March, 2011 1 Project Implementation Period: three years and five months Expected effectiveness date: March 1, 2011 Expected closing date: 31 July, 2014 Does the project depart from the CAS in content or other significant Yes No respects? If yes, please explain: N/A Does the project require any exceptions from Bank policies? Yes No Have these been approved/endorsed (as appropriate by Bank Yes No N/A management? Is approval for any policy exception sought from the Board? Yes No If yes, please explain: N/A Does the project meet the Regional criteria for readiness for Yes No implementation? If no, please explain: N/A Project Development objective: To strengthen the capacity of the PWA to more effectively plan, monitor, and regulate water sector development in the West Bank and Gaza Project description [one-sentence summary of each component] · Advisory support, Technical Assistance, and Capacity Building to be provided by the Technical and Policy Advisory Team (TPAT) · Supplementary assistance for studies and training · Project management Safeguard policies triggered? Environmental Assessment (OP/BP 4.01) Yes No Natural Habitats (OP/BP 4.04) Yes No Forests (OP/BP 4.36) Yes No Pest Management (OP 4.09) Yes No Physical Cultural Resources (OP/BP 4.11) Yes No Indigenous Peoples (OP/BP 4.10) Yes No Involuntary Resettlement (OP/BP 4.12) Yes No Safety of Dams (OP/BP 4.37) Yes No Projects on International Waters (OP/BP 7.50) Yes No Projects in Disputed Areas (OP/BP 7.60) Yes No Conditions and Legal Covenants: Financing Agreement Reference Description of Condition/Covenant Date Due Not applicable Confirmation of financing to carry out Prior to Negotiations a Legislative Review for Water Sector Reform 2 Article 5, Para. 5.01 (a) The execution and delivery of Prior to Grant Effectiveness the Grant Agreement on behalf of the Recipient have been duly authorized or ratified by all necessary governmental and corporate action. (b) The Subsidiary Agreement referred to in Section I.A of Schedule 2 to the Grant Agreement has been executed on behalf of the Recipient and the Palestinian Authority. (c) The Project Implementation Unit with the staff, terms of reference and resources adequate for the implementation of the Project has been established within the Palestinian Water Authority. (d) The Project Implementation Manual has been adopted by the Palestinian Water Authority. 3 I. Strategic Context A. Country Context 1. The economic climate in the West Bank and Gaza (WBG) has changed dramatically since the collapse of the peace process in 2000 and the onset of the second intifada from one driven by investment and private sector led growth, to one sustained mainly by government spending and significant inflows of donor aid, due to continuing restrictions on movement and access. Moreover, the political process has continued to stagnate and there has been little visible progress for a long-term peace settlement. As the economy continues to deteriorate with low investment, its productive base is hollowing out and per capita GDP is declining (by a cumulative 13 percent between 2000 and 2008). Between 1994 and 1999, before the second Intifada, the WBG economy was growing on average at about 6 percent per year. Had this growth trend continued, GDP per capita would be nearly 85 percent higher than it is currently. 2. Labor force participation rates are low and dropping. Unemployment in the West Bank, as reported by the Palestinian Central Bureau of Statistics (PCBS), rose from 17.7 percent in 2007 to 20.7 percent in the third quarter of 2008. Unemployment in Gaza, however, increased from 29.7 percent to nearly 41.9 percent. Although data on poverty are limited, there are clear indications that overall poverty in both the West Bank and Gaza has risen since 2000. PCBS reports that poverty rates increased in Gaza from 47.9 percent in 2006 to 51.8 percent in 2007. 3. The West Bank (population 2.51 million) and Gaza (population 1.54 million) have been effectively split since June 2007. In early 2006, a Hamas led government won the elections through what is widely regarded as a fair and transparent process. In response, many donors withdrew their assistance to the Palestinian Authority (PA), while the GOI intensified its economic and security restrictions. In June 2007, Hamas took control of Gaza by force, and President Abbas dissolved the Hamas-led government. A caretaker government of technocrats was sworn in until new presidential and parliamentary elections will be held. The caretaker government, headquartered in Ramallah, runs the West Bank and continues to provide basic services in Gaza through PA civil servants who report to and are paid by the caretaker government. The international community has restored its full cooperation with the PA in Ramallah. The continued deterioration in operational conditions in Gaza is also leading to a widening political, social and economic gap between the West Bank and Gaza. 4. Following these political developments, Gaza has been isolated by a strict closure policy by the GOI, crippling the local economy and leading to a deterioration of public infrastructure. Under the closure, only basic foodstuffs and other necessities are allowed to enter Gaza and there are no exports. The lack of spare parts and materials necessary for maintenance of infrastructure has severely impacted its quality and ability to deliver basic services. This deterioration has been exacerbated by the GOI's military operation in Gaza between December 2008 and January 2009 that resulted in a large loss of life and over US$ 1.3 billion in total damages, according to the Palestinian National Early Recovery and Reconstruction Plan. 4 5. Elections are impending in the West Bank and Gaza. The Prime Minister dismissed his Cabinet in mid-February, 2011 and will form a new government within six weeks. The current ministers remain in their respective positions in the interim. Local and municipal elections are scheduled to take place in July, 2011, and the Presidential election will follow in September, 2011. B. Sectoral and Institutional Context 6. Water is a key economic development and humanitarian issue in West Bank and Gaza (WBG). Water is also a prize in the Israeli-Palestinian conflict. In this context, Palestinian water outcomes and rights to water are linked to the Oslo process and to the Final Status negotiations. 7. As a result of restrictions accompanying Israeli control of the territory and obsolescence of the 1995 Oslo II interim accord water provisions (Article 40 Water and Sewage), Palestinians cope with one of the lowest levels of per capita water resource availability in MNA 1. In the West Bank, development of water uses and infrastructure is subject to Israeli veto power under the Joint Water Committee (JWC). In Gaza, it is curtailed by the security blockade. These restrictions, along with inefficient Palestinian institutions and operators 2 and fast demographic growth, perpetuate water supply and sanitation (WSS) infrastructure and service deficits as well as operational inefficiencies 3. They result in heavy reliance on water trucking, makeshift arrangements for desalination of brackish water and treatment of other non- potable water supplies, while also increasing dependence on the Israeli bulk water utility Mekorot. The impacts of this situation are strongest in Gaza, in area C, and on the poor. The lack of wastewater treatment also contributes to widespread aquifer contamination. All the while, planning and regulation of water resources is very weak, and the potential of the irrigation sector remains largely underdeveloped. 8. Nonetheless, irrigation is estimated to consume 60-70% of water resources in the West Bank and Gaza through inefficient practices and deteriorating infrastructure. Irrigated agriculture is an important economic sector, contributing about 12% to GDP and employing about 117,000 people. However, with the restrictions on movement and export of goods, dwindling water availability, inefficient irrigation practices, and almost no new or replacement water sources receiving permits, the economic cost of foregone opportunity in irrigated agriculture is significant 4. 9. Key sector issues can be summarized as: · Lack of sovereign control over WBG water resources and water infrastructure development, leading to (i) highly restricted access to water resources (and potential erosion of Final Status water rights), (ii) perpetuation of ad-hoc emergency planning as 1 75 m3/per capita/year in the West Bank and 125 m3/pca/yr in Gaza (<500m3/pca/yr defines "water stress"). 2 World Bank (2009) Assessment of Restrictions on Palestinian Water Sector Development, report 47567-GZ (aka Water Restrictions Study) 3 Although 90% of the population and 64% of communities have access to a water network, service discontinuity results in average consumptions as low as 50 l/cap/day, dropping to a crippling 15 l/cap/day in some areas. All the while, water loss and bill collection rates hover around 35% and 50% respectively. 4 Upper bound estimates are as high as 10% of GDP and 110,000 jobs. 5 opposed to strategic planning, and (iii) uncertainty and delays in infrastructure project authorization and implementation. · Major WSS infrastructure deficits and inefficiencies in the West Bank and in Gaza, with (i) inadequate and unreliable access to potable water, particularly in Gaza and Area C, (ii) lack of wastewater treatment and reuse, and (iii) uneven reliability, performance and sustainability of WSS operations, and (iv) restricted growth of irrigated agriculture. · Impending environmental and public-health collapse in Gaza, with 95% of water resources unfit for use by Gaza's 1.5 million inhabitants, due to saline intrusions and untreated sewage infiltrations. · Governance and capacity weaknesses in the Palestinian water sector, including Palestinian Water Authority (PWA) and municipal service providers, in need of institutional reform, towards clearer roles and accountability, reorganization and capacity building. 10. The Palestinian Water Authority (PWA) is the central agency in the water sector 5. In a context of overall inefficient institutional capacity and governance, PWA straddles ad-hoc strategy, planning, regulation and infrastructure program implementation agendas, with unique JWC and donor coordination challenges. A new chairman, in place since March 2008, has engaged PWA in refreshing initiatives such as i) a critical review of projects and operations (Audit) 6, ii) an in-house governance clean-up 7, and iii) a campaign to push back on Oslo's water governance provisions. PWA has also initiated the spin-off of its West Bank Water Department, to create an autonomous bulk water utility. Two years into the changes, PWA initiatives are making moderate progress, and the agency has yet to fully recover from the initial loss of morale and capacity felt in its ranks as a result of the 2008 management shake-up. 11. Following the Norwegian-funded Audit, PWA has engaged the PA in a comprehensive reform of the sector. According to the Audit, existing water sector programs and institutions do not sufficiently address the needs of the Palestinian people. The Water Law establishing PWA and the National Water Council 8 (NWC) fails to identify the roles of other institutions, in particular municipalities and service providers, and to define a sector architecture which NWC and PWA must lead, support and regulate. Policy and strategy development in the sector is also highly inadequate; ongoing projects appear to have been developed in a largely donor-driven, ad- hoc emergency fashion, distorted by Israeli restrictions. The Audit calls for a major strategy and institutional refocusing effort. It stresses PWA's urgent need for strategic planning technical assistance (TA). 12. On December 14th 2009 the Cabinet of Ministers of the Palestinian Authority (PA) endorsed a PWA-drafted Action Plan for Reform for the definition and implementation of an institutional and legislative reform program in the water sector. PWA is expected to lead the design, coordination and implementation of the program, under supervision by a Cabinet of 5 The "Water Sector" includes water resource management (WRM) and water supply and sanitation (WSS) activities. 6 Audit Environmental, An Audit of the Operations and Projects in the Water Sector in Palestine: The Strategic Refocusing of Water Sector Infrastructure in Palestine., Final Report, 18 November 2008. 7 This is associated with misprocurement and investigations in the Bank's Emergency Water Project. 8 The National Water Council (NWC) is the interministerial body responsible for developing the overarching water policy, including planning and development as well as strategic matters. NWC has never convened. 6 Ministers Steering Committee (COMSC) 9. The reform is to include PWA's own strategy update, reorganization and capacity increase. A Reform Steering Committee (RSC) has been established at the inter-ministerial level to oversee the implementation of the Action Plan, as executed by PWA. The RSC is chaired by the PWA and comprises designated representatives of the Ministry of Planning and Administrative Development, Ministry of Finance, Ministry of Agriculture, Ministry of Local Government, Ministry of Health, the Environmental Quality Authority, a Representative of Service Providers, and a Representative of Civil Society. 13. In line with the PA goal to accelerate the set-up of a viable Palestinian State administration, the water sector reform thrusts comprise: (i) building the capacity and sustainability of institutions under an optimized legal framework, (ii) accelerating infrastructure development based on updated strategies, (iii) regulating service provision towards improved quality, efficiency and cost-recovery, and (iv) achieving more sustainable water resources management. 14. As illustrated in figure 1, the envisioned reform sequence includes the following components: · A sector-wide Institutional Water Sector Review (IWSR) with the goal of proposing a responsive sector architecture, with clear roles, responsibilities and accountability, optimizing cooperation. The IWSR commenced in mid-September 2010, funded by Norway. Following a period of consultations and consensus building, PA is expected to decide on a new sector architecture in 2011. · A sector-wide Legislative Review (LR), for a redrafting of the Water Law to reflect the preferred architecture, with relevant decrees and updated bylaws for key agencies and operators. The LR is foreseen to be funded by Norway and is expected to begin in March 2011. · A PWA-specific program of reform coordination, strategy development, capacity building and reorganization, supported by CB/TA initiatives such as: o A Technical Planning and Advisory Team (TPAT), for which PWA seeks co- financing by Agence Française de Developpement (AFD), the Swedish International Development Cooperation Agency (SIDA), and the World Bank (WB). o An Organizational Review (OR) and a Change Management Technical Assistance (CMTA), to assist the implementation of OR recommendations, which currently lack TORs and funding. · Other capacity building initiatives for key sector institutions and operators, to adapt to the requirements of the new sector architecture (such as supported by GTZ and EU). 9 Key stakeholder ministries include Ministry of Local Governments (MOLG), Ministry of Agriculture (MOA), Ministry of Planning (MOPAD), and Ministry of Finance (MOF). 7 Figure 1: Timeline of the Water Sector Reform Action Plan 2010 2011 2012 2013 2014 IWSR Institutional Water Sector Review Government Decision LR Legislative Review and Water Law Redraft TPAT Technical Planning and Advisory Team 1. Advise and support Sector Reform Implementation 2. Update WSS and WRM strategies 3. Build capacity for strategy implementation OR Organizational Review CM Change Management TA/CB 2010 2011 2012 2013 15. The Bank plays a key role in helping the PA respond to water emergencies, with operations such as i) the Emergency Water Project in southern West Bank (completed in 2008), ii) the North Gaza Emergency Sewage Treatment Project (since 2004), iii) the Gaza Emergency Water Project (since 2004), and iv) the Hebron Wastewater Management Project (to be identified for FY12 delivery) 10. Following the governance turnaround at PWA and the release of the Water Restrictions Study, the PA has asked for a greater Bank involvement in institutional support to PWA, a request echoed by some other sector donors. C. Higher Level Objectives to which the Project Contributes 16. The Project is expected to contribute to the overall objectives of the Water Sector Reform Initiative as set forth by the Palestinian Authority: · With regard to institutions, to establish strong, capable, and sustainable institutions within a legal framework that clearly defines their roles, responsibilities and the interface (relationship) between them. · With regard to infrastructure needs, to improve water supply and sanitation strategies, policies, investment programs, project designs, and the implementation of projects, in an effort to substantially accelerate infrastructure development. · With regard to service provision, to accelerate equitable access to a quality service, while providing improved efficiency and cost-recovery of effectively regulated water operators. 10 The Red Sea-Dead Sea Water Conveyance Study Program, conducted with no MNSWA involvement, is not considered here. 8 · With regard to water resources management, to build the institutional knowledge, policies, and monitoring and enforcement capacities, as part of an effort to achieve a more sustainable water resources management strategy. · With regard to water consumers, improving water demand management awareness in line with the development of water conservation policies. II. Project Development Objectives A. PDO 17. The Project's development objective is to strengthen the capacity of the PWA to more effectively plan, monitor, and regulate water sector development in the West Bank and Gaza. B. PDO-level Results Indicators 18. Progress towards meeting the PDO will be measured through the following indicators: · Progress of the water sector reform process as measured by the delivery of key contributions expected from TPAT. These expected contributions from TPAT to the water sector reform process include: (i) a detailed reform planning document for all Sector Reform processes, (ii) an Action Plan to ensure appropriate transition of the sector approved and adopted by the sector institutions, (iii) monitoring tools necessary for an efficient management interface with service providers. · Comprehensive updating of the PWA policies, strategies and guidelines and technical planning tools as measured by the delivery by TPAT and subsequent adoption of key policies, strategies and guidelines, as well as technical planning tools. · Increased capacities of the PWA as measured by data collected in semi-annual progress reports. The Bank will conduct semi-annual supervision missions in order to assess key outputs and work plan updates recorded in semi-annual TPAT progress reports to be prepared by the Reform Coordination Unit. III. Project Description A. Project components 19. The project will comprise the following three components 11 : · Component 1: Advisory support, technical assistance, and capacity building to be provided by the TPAT · Component 2 : Supplementary assistance for studies and training · Component 3 : Project Management 20. Component 1: Advisory Support, Technical Assistance and Capacity Building to be provided by the TPAT (Estimated Budget: US$ 2.1 million from the Trust Fund for Gaza and West Bank, plus US$2.8 million co-financing from AFD and Sida). 11 Further details on project components can be found in Annex 2 (Detailed Project Description) 9 · Sub-component 1.1. Advisory services and technical assistance to support the design and implementation of sector reforms by PWA. · Sub-Component 1.2: Technical assistance to the PWA to develop updated strategies and action plans for water supply and sanitation infrastructure and service provision, as well as for water resources management. · Sub-Component 1.3: Capacity building within PWA and related agencies to implement sector reform strategies and action plans and evaluate their impacts and effectiveness. 21. Component 2: Supplementary assistance for studies and training (Estimated Budget: US$ 0.1 million from the Trust Fund for Gaza and West Bank, plus US$0.2 million co-financing from Sida). Financing for additional studies & training not contemplated in the TPAT scope, but identified in TPAT-developed action-plans (e.g. master plans, development of standards, staff training, and feasibility studies for selected projects to be identified during the first six months of implementation). The identification and implementation of these tasks is PWA's responsibility, and the proposed funding will accelerate their implementation. 22. Component 3: Project management (Estimated budget: US$ 0.8 million from the Trust Fund for Gaza and West Bank). Financing for incremental operating and consultant costs to be incurred by PWA for managing TPAT and component 2 activities in accordance with the reporting, financial management, and procurement requirements of the World Bank and donor partners. B. Project Financing 23. Lending Instrument. The proposed lending instrument is a Technical Assistance Grant from the Trust Fund for Gaza and West Bank. 24. Project financing table. A grant in the amount of US$ 3,000,000 is to be provided from the Trust Fund for Gaza and West Bank for the Project. Additionally, parallel direct co-financing in the amount of 1 million will be provided by AFD and joint co-financing in the amount of SEK 13 million is proposed to be provided by Sida. Activity AFD SIDA WB Total TPAT $1.4 million $1.4 million $2.1 million $4.9 million Supplementary Studies & 0.2 million $0.1 million $0.3 million Training Project Management $0.8 million $0.8 million Total $1.4 million $1.6 million $3.0 million $6.0 million 10 C. Lessons Learned and Reflected in the Project Design (Optional section for Track II operations) 25. Lessons can be drawn from the poor track record of numerous past attempts at supporting the Palestinian water sector through the provision of technical assistance, including strategies for the PWA, West Bank and Gaza water management master plans, hydrological and groundwater models, legislation and regulations, all funded by different donors. These efforts have resulted in few tangible results, because of the relatively inefficient management capacity of the PWA, diverging donor agendas and interests, and the ad-hoc nature of water resource management and development in light of the Israeli occupation. 26. The design of the main activity proposed under this Project - the TPAT consultancy services - and its inclusion in a broader, multi-donor effort to support the Palestinian water sector, aim to address these constraints by providing technical assistance to impart implementation strategies, skills, and training to build the capacity of the PWA to effectively lead reform of the water sector in West Bank and Gaza. 27. The TPAT is a critical element of the PWA's Agenda for Reform mentioned earlier, which constitutes the Water Sector contribution to the broader national strategy, laid out in 2009 by the 13th Government of the PA, to pursue the building of strong state institutions enabling the "establishment of an independent, sovereign, and viable Palestinian state 12" by 2012. With a strong ownership of the Agenda for Reform by the PWA, and an encouraging alignment of donor support on the priorities and action plan it lays out, the current context provides a favorable framework and political impetus for renewed engagement in the institutional reinforcement of the Palestinian Water Sector. 28. The TPAT concept was derived from the Audit recommendations, and subsequently developed by PWA through internal and donor consultations, thus achieving an uncommon level of debate, client ownership of the project design, and constructive participation by a broad base of stakeholders. TPAT is thus also designed to complement without duplication other existing capacity building and technical assistance initiatives within PWA or within the sector. For instance, the TPAT will complement a GTZ-funded TA program to strengthen i) PWA's administration of the JWC approval and Civil Administration permitting processes, and ii) PWA's capacity to monitor basic performance indicators of service providers. 29. Along with the leadership of the PWA in developing the terms of reference for the TPAT, the explicit request for co-financing TPAT by three development partners (AFD, SIDA, and the World Bank) also illustrates the strong ownership of this activity by PWA and the institution's proactive engagement in donor coordination. 12 Palestinian National Authority, 2009, "Ending the Occupation, Establishing the State" Program of the 13th Government, August 2009 11 IV. Implementation A. Institutional and Implementation Arrangements 30. The Project's implementing agency will be the Palestinian Water Authority (PWA). The PWA has received a clear mandate from the PA's Cabinet of Ministers to define and lead the implementation of the Water Sector Reform as defined in the Action Plan for Reform that was approved by the Cabinet on December 19th, 2009. A Project Implementation Team (PIT) will be established at the PWA for day to day implementation of the project. Within the PWA, a Reform Coordination Unit (RCU) has been created to act as the focal unit in charge of supervising the PIT. The RCU team is composed of the PWA directors and the Heads of the Project Management Units in both the West Bank and the Gaza Strip. 31. The TPAT consultancy will be administered by the PIT that will report to the Head of PWA, through a designated member of PWA's Reform Co-ordination Unit (RCU). The RCU, through the PIT, will also ensure day to day support and oversight of TPAT, review outputs and administer the contract. TPAT reporting outputs may be utilized by the PWA to inform the Reform Steering Committee appointed by the Council of Ministers. Further, TPAT may be requested to perform ad-hoc presentations to the RSC. B. Results Monitoring and Evaluation 32. The World Bank (together with co-financiers) will participate in semi-annual formal TPAT supervision missions, during which semi-annual TPAT progress reports, key outputs and work plan updates will be reviewed (prior to their approval by PWA). C. Sustainability 33. The TPAT will work closely and inclusively with the PIT, the Head of the PWA, its Directors, advisors and staff to support and advise the implementation of Sector Reform processes while focusing on the realignment and strengthening of water supply, sanitation, and water resources management strategies and action plans, as well as on developing PWA's capacity for their implementation. The success of TPAT depends on several factors: PWA managers and staff becoming empowered, the knowledge transferred being pragmatic and being retained, and the solutions applied remaining in place and relevant following the conclusion of the TPAT support. Towards these ends, PWA will hire a qualified and dedicated firm to provide the TPAT experts, and whenever possible, will favor short-term expert assignments over long- term ones. V. Key Risks 34. Lack of predictability in IWSR sector architecture recommendations and PA decision. IWSR is expected to recommend a reform of moderate scope, complexity, cost and duration, preserving PWA's sector planning and regulation role. More radical reforms, going as far as the replacement of PWA with another entity, cannot however be ruled out. Nonetheless, postponing the implementation of TPAT until PA's decision is known is deemed detrimental to 12 PWA's pressing capacity and strategic planning challenges, and the services to be provided by TPAT are by design flexible and will be critically needed in whatever form the sector architecture ultimately settles. 35. Fiduciary risk associated with the selection of TPAT consultants by PWA. PWA procurement capacity is limited and it currently does not have procurement staff with appropriate knowledge of the Bank Guidelines for the Selection of Consultants. The importance of TPAT services and the likely teaming of Palestinian consultants with international consulting firms may create the conditions for conflicts of interest and influence the selection of TPAT consultants. To address this and to help ensure compliance with Bank and donor partner procurement guidelines, an experienced procurement expert was hired with AFD funding to advise and support PWA throughout the TPAT selection process. The selection of TPAT consultants will be subject to Bank's (and AFD's) prior review. The shortlist of consultants and the evaluation of proposals has been carefully reviewed to avoid potential conflict of interest. 36. Fiduciary risk associated with management of AFD, SIDA, and WB co-financing. There is a risk of overlapping of funding support since co-financing will be channeled from three different sources of financing. As a mitigating measure, the PWA Financial Management staff will familiarize themselves with the FM guidelines of the Bank and other financiers with support from the FM staff of the respective funding agencies. PWA will clearly indicate the source of financing on each accounting record (receipts/invoices/contracts) and Statements of Expenditure (SOE) forms that accompany withdrawal applications in order to confirm what portion is being financed from the WB funds. In addition, PWA will maintain separate designated accounts and accounting records for each financier based on the co-financing arrangements and percentages. Reporting will be consolidated at the project level in lieu of reporting to each financier separately. The Audit TOR will require that the co-financing arrangements and percentage financed according to the project financing agreements be verified. 37. Delays in the Reform Action Plan decision making. There is no guarantee that the PA will reach timely decisions on Action Plan initiatives such as the IWSR. Substantial delays will add uncertainty to TPAT's work plan, and ability to deliver on outputs. Assurances will be sought that PA is committed to timely reform decision making. Furthermore, the PWA-led Action Plan for Reform is an integral part of the institution building initiative under the Prime Minister's two-year plan entitled "Ending the Occupation, Establishing a State". As a result, the PWA aims to obtain approval for the outcomes of both the IWSR and the LR from the Cabinet of Ministers prior to the end of the two-year time frame in August or September, 2011. The TPAT contract will include relevant renegotiation and termination clauses. VI. Appraisal Summary A. Economic and Financial Analysis 38. The nature of the activities to be financed by the Project does not lend itself to the standard quantitative cost-benefit analysis. The main objectives of the Project are to (i) support the PWA in its role as implementation agency for the Water Sector Reform, (ii) provide technical expertise for the comprehensive updating of the PWA policies, strategies and guidelines and 13 technical planning tools, and (iii) identify and develop capacity building activities. The benefits of these activities cannot be reliably estimated in monetary terms. The weakness of the Palestinian water institutions and more specifically the lack of technical planning capacity in PWA have been identified as factors constraining sector development 13. The TPAT concept has been developed based on this analysis and the expected improvement in terms of PWA's capacity to effectively plan, monitor, and regulate the sector is expected to bring significant indirect economic benefits. Independently from the quality of the Project's outputs, its potential outcome will remain subject to very high uncertainty essentially driven by the over-riding and primary influence of the Permanent Status negotiations, as stressed in the 2008 Audit 14. 39. Considering the fluctuating environment in which the TPAT is expected to operate, the design of the TPAT contract has been based on the principles of adaptability and flexibility. This design aims at ensuring cost effectiveness and risk mitigation. The contract will be divided, with a fixed component including the inputs that TPAT is expected to need in all the institutional scenarios envisaged, and an adaptable component that will be defined and validated after a six month needs assessment phase and based on the results of the Institutional Review. Moreover, the contract management will be based on regular revision and adaptation of the TPAT's work plan. Finally, the PWA has prepared the TPAT Terms of Reference so as to ensure that the required mix of expertise can be made available at the lowest cost possible. This should be achieved by a combination of long-term and short-term expert assignments. B. Technical 40. The Terms of Reference of the TPAT consultancy build on the needs identified during the preparation of the Bank's Assessment of Restrictions on Palestinian Water Sector Development (2009), and incorporate extensive technical comments from AFD, SIDA and the Bank that were provided through successive drafts of the TOR that were prepared over a six month period. The TOR is attached as Annex 7 to this Project Appraisal Document. 41. In addition to the TPAT consultancy, the project will finance additional studies and training that will be identified during TPAT implementation by PWA with support from the TPAT consultants. These activities, comprising Component 2 of the Project, will be financed independently of TPAT. C. Financial Management 42. The PWA will be the responsible party for managing, implementing and supervising this project, including the financial management aspects, with the direct assistance of the TPAT advisors. PWA will be responsible for preparing and issuing the annual work program and operating budgets as well as all the progress and financial reports, the Interim Financial Reports (IFRs) and annual audited financial reports. 13 World Bank (2009) Assessment of Restrictions on Palestinian Water Sector Development, Report No. 47657-GZ 14 Audit Environnemental (2008) "An Audit of the Operations and Projects in the Water Sector in Palestine: The Strategic Refocusing of Water Sector Infrastructure in Palestine" Final Report, 18 November 2008. 14 43. As part of the project preparation, the Financial Management specialists on the Project Task Team conducted a financial management assessment of the PWA in the context of the financial management requirements for the project. The assessment reviewed the organizational structure of the PWA's Financial Department in light of the project's management needs. The assessment concluded that the capacity of the PWA needs further strengthening in the Financial Management area. To address this, the project design includes, as part of the TPAT contract, capacity building advisory assistance to the PWA in the area of Financial Management. 44. The Bank financing will be a Grant from the Trust Fund for Gaza and West Bank to be disbursed through a Designated Account (DA) opened by the MOF under the Central Treasury System and managed by the PWA. The PWA will prepare a detailed quarterly budget (disbursement plan), according to which the ceiling of the Designated Account will be defined, to facilitate the availability of funds necessary for on-time project implementation. 45. Interim unaudited financial reports (IFR) will be submitted to the Bank within 45 days after the end of each quarter. The Grant Agreement will require the submission of annual Audited Project Financial Statements within six months after year-end. Project Financial Statements will be audited in accordance with international audit standards by an independent, experienced, and internationally recognized audit firm acceptable to the World Bank and recruited on a competitive basis based on TORs acceptable to the Bank. The cost of the audit will be financed from the Grant proceeds. The audited annual project financial statements will be publicly disclosed. 46. Detailed FM and disbursement arrangements are summarized in Annex 3 Implementation Arrangements. D. Procurement 47. Overall responsibility for implementing project procurement will rest with PWA. The Reform Coordination Unit (RCU) through the PIT will take the lead on all technical aspects of the TPAT selection process and will be responsible for contract administration and management. PWA procurement and contract management capacity is limited; the Authority does not currently have procurement staff with appropriate knowledge of the Bank Procurement and Consultants Guidelines. 48. The importance of TPAT services and the likely teaming of Palestinian consultants with international consulting firms may create the conditions for conflicts of interest and influence the selection of TPAT. In light of PWA's currently limited procurement capacity, an experienced procurement expert was hired by AFD to advise and support the PWA throughout the TPAT selection process, up to contract award. The selection of TPAT is subject to the Bank's and AFD's prior review; the short list of consultants has been carefully reviewed to avoid potential conflict of interest, and the evaluation of proposals will be similarly scrutinized. The RFP also clearly states the issue of conflict of interest, which will disqualify the applicant. 49. Prior to launching the TPAT team in early 2011, a new procurement specialist will be hired by PWA to be responsible for processing project procurement and to facilitate the 15 implementation of specific procurement capacity building during. Moreover, PWA procurement staff and the RCU will receive fiduciary training on administrative, financial, managerial and technical aspects of contract management and the administration of large scale consultancy services contracts 50. TPAT constitutes the main contract to be financed under the project. The selection of TPAT was launched during pre-appraisal; TPAT TORs were cleared by the Bank and AFD and a request for expressions of interest was issued in United Nations Development Business (UNDB) and dg Market. A short list of six firms has been cleared by the donor partners and a request for proposals will be distributed in mid-November. The procurement process and mobilization of the TPAT consultant team is expected to be completed during the first quarter of 2011. 51. Other envisaged procurement activities include office equipment, procurement officer, contract management training, external audits, and additional technical assistance and capacity building to be identified in TPAT-developed action-plans. A procurement plan (PP) for the first 18 months of project implementation was prepared and agreed with the Bank following pre- appraisal and can be found in Annex 3. E. Environment & Social Safeguards 52. Given the nature of the proposed activities, the Project does not raise any significant environmental or social issue. None of the Bank's Safeguard policies is triggered and the Project is classified as "C". 53. In an effort to mainstream sound environmental and social management practices in the Palestinian Water Sector, the TPAT contract will include a first nine month phase during which the consultant will perform a comprehensive needs assessment and prepare a detailed TA and CB action plan. Based on this needs assessment, the consultant and the client (PWA) will agree on a revision of the initial work program proposed by the consultant to carry out the defined action plan. The consultant's Terms of Reference include - as part of the initial six month needs assessment - a detailed review of the capacity of the PWA to implement the relevant Palestinian laws and regulation regarding environmental and social impact assessment and management of water projects. Based on this review and needs assessment, a capacity building program will be devised and implemented by the consultant. In addition to water sector specific areas, the consultant will be required to provide additional expertise if needed as required by the TORs, including but not limited to social and environmental management of water projects. 16 Annex 1: Results Framework and Monitoring WBG: Water Sector Capacity Building Project Results Framework Project Development Objective (PDO): To strengthen the capacity of the PWA to more effectively plan, monitor, and regulate water sector development in the West Bank and Gaza. Responsibility Description Data Source/ PDO Level Results Core Cumulative Target Values** Frequency for Data (indicator Unit of Measure Baseline Methodology Indicators* Collection definition) YR 1 YR 2 YR3 Indicator One: Key Reform TPAT progress Progress in executing the documents Action plan to reports, implementation Water Sector Reform produced and ensure appropriate supervision Detailed sector monitoring tools Process endorsed by transition of the Semi- mission reports 0 reform planning developed and being PWA the PA sector approved annual document used to assess the and adopted by effectiveness of sector institutions reforms. Indicator Two: Key TPAT progress Updated sector policies, documents, to reports, strategies, guidelines, and be agreed supervision technical planning tools during the To be determined To be determined To be determined mission reports first six during initial six during initial six during initial six Semi- 0 PWA months of months of project months of project months of project annual TPAT, implementation implementation implementation developed and endorsed by the PA. Indicator Three: # of staff Increased capacity within the trained in PWA and service providers PWA and To be determined To be determined To be determined TPAT progress among during initial six during initial six during initial six Semi- reports, 0 PWA service months of project months of project months of project annual supervision providers, implementation implementation implementation mission reports productivity of staff INTERMEDIATE RESULTS Intermediate Result (Sub Component 1.1): Sector Reform Implementation Support 1. Detailed reform Key document 0 Detailed reform plan planning document is approved and Contractual adopted by sector Semi-annual deliverable PWA institutions 17 2. Action Plan to ensure Key document 0 Detailed Action Plan appropriate transition to ensure appropriate Contractual transition is approved Semi-annual deliverable PWA and adopted by sector institutions 3. Monitoring tools Key document 0 Monitoring tools necessary for an Contractual efficient management Semi-annual deliverable PWA interface with service providers are applied Intermediate Result (Subcomponent 1.2): Review and updating of policies, strategies and guidelines; technical planning support 1. Review and update of Policy and 0 Status report on Draft updated Updated policies policies strategies and strategy review of current policies strategies strategies and guidelines papers policies strategies and guidelines for guidelines for water, Contractual and guidelines for water, wastewater Semi-annual wastewater and water Deliverables PWA water, wastewater and water resources resources are approved and water resources are prepared 2. Technical Planning 0 Set of climate Integrated Water Water supply, and Support change mitigation resources Wastewater measures and set of management plan infrastructure Semi- Contractual standards for water developed and development plan annual Deliverables PWA quality monitoring adopted developed and are developed and adopted, including adopted investment plan. Intermediate Result (Subcomponent 1.3): Capacity building 1. Review of water and Report Draft report delivered Final report Semi- Contractual groundwater surface annual Deliverables PWA models 2. Environmental and Report Draft report Final report delivered Semi- Contractual social impact annual Deliverables PWA assessment procedures 3. Technical assessment Training To be determined To be determined To be determined Semi- Contractual capacity building events, # of based on action based on action plans based on action plans annual Deliverables PWA staff trained plans 4. Service providers Training 0 To be determined To be determined To be determined capacity building events, # of based on action based on action plans based on action plans Semi- service plans annual Progress reports PWA provider staff trained Training 0 To be determined To be determined To be determined 5. PWA staff capacity events, # of based on action based on action plans based on action plans Semi- Progress reports PWA building PWA staff plans annual trained Intermediate Results (Component 2): Studies and Training Fund 1. Study results and Documents, 0 Semi- training events To be determined To be determined To be determined Progress reports PWA training events annual 18 Intermediate Results (Component 3): Project Management Progress 1. Project progress reporting 0 2 2 2 plus final report PWA reports 2. Procurement Procurement Plan to be updated Plan to be updated as Plan to be updated as Semi- Procurement 1 World Bank, PWA implementation plan as required required required annual review reports FM review Semi- Independent auditor, 3. Financial management Audit reports 0 1 1 1 reports, audit annual PWA, World Bank reports 19 Annex 2: Detailed Project Description A. Detailed Project Description Component 1: Advisory Support, Technical Assistance, and Capacity Building to be provided by the TPAT (Estimated Budget: US$ 2.7 million from the Trust Fund for Gaza and West Bank, plus $2.8 million cofinancing from AFD and Sida) Sub-component 1.1: Advisory services and technical assistance to support the design and implementation of Sector Reform by PWA. 54. The main task will be to support the PWA in implementing the activities undertaken in the Water Sector Reform process, in particular the Institutional Water Sector Review (IWSR), the Legislative Review (LR), the PWA Organizational Review (OR), the Change Management Technical Assistance and other bilateral programs. This support will include: · The development of an Action Plan for implementing the newly developed and agreed structure for the sector (to be defined by the IWSR). · The drafting of the revised Water Law and related Bylaws under the Legislative Review, as well as support for preparing regulations and guidelines flowing from the new institutional arrangement and the revised water law. · Defining the rules and interfaces among the sector institutions themselves and other stakeholders including coordination mechanisms in accordance with the new institutional arrangement and needs. · An Action Plan for the transitional period with the aim of supporting the establishment of a functional institution within the new institutional architecture that will ensure the proper implementation of the reform itself and appropriate management of day-to-day activities during the transitional phase of the reform process. · The development of internal and external communication plans to promote and inform relevant institutions, stakeholders, and concerned staff on the Sector Reform, and to design and implement public awareness programs. Sub-component 1.2: Technical assistance and capacity building for the development of updated strategies and action plans for water supply and sanitation infrastructure and service provision, as well as for water resources management. 55. The main tasks will include the following: · Support for further developing and implementing reformed water supply, sanitation, and water resource management policies, strategies, regulations and investment programs. · Revising existing, or developing new policies and regulations to ensure service quality, efficient operations and maintenance, sustainable cost recovery and effective regulation by PWA. 20 · Assist the coordination, endorsement by the Government, and adoption by service providers of such strategies, policies and regulations. · Identify funding gaps relating to the implementation of the strategies, policies and regulations mentioned above, in particular for financing of investment needs. The activities of the TPAT will support the PWA in their discussions with donors on funding needs for a phased 2011-2019 program. · Support the Gaza-based PWA staff as they implement a range of ongoing initiatives and reform measures, including the Gaza Early Recovery and Reconstruction Plan. For this purpose, a specific action plan and work plan shall be elaborated. Sub-Component 1.3: Capacity building for effective sector strategy implementation. 56. The main tasks will include, but not limited to, the following: · Development of a capacity building needs assessment and a work plan for its implementation. · Review, with particular attention to PWA staff and service providers, the needs in the water sector for training and capacity building programs for the update and implementation of the strategies, policies and regulations developed under Component 2 above and develop relevant capacity building programs, action plans and budgets. · Implementation of Capacity Building Action Plans. · Building capacities, systems and methods within PWA to improve coordination of key local and international stakeholders in the Sector. · Assess needs, develop an Action Plan, then budget and implement the Action Plan once validated to build PWA's and Service Providers' capacity in implementation of investment programs through training, methods and procedures development. · Building PWA's capacity in financial modeling towards multi-year planning for capital as well as recurrent budgets. · Building the financial management capacity of PWA, water and wastewater service providers, including auditing system, consistently with the on-going GTZ program. Component 2: Supplementary Assistance for Studies and Training (Estimated budget: USD 0.1 million from the Trust Fund for Gaza and West Bank plus US$0.2 million co-financing from Sida) 57. Financing for additional studies and capacity building activities, not contemplated in TPAT scope, but identified in TPAT-developed action-plans (e.g. master plans, development of standards, feasibility studies for selected projects, etc.). The budgeting and implementation of these tasks is PWA's responsibility, and the proposed financing will accelerate their implementation. Component 3: Project Management (Estimated budget: USD 0.8 million from the Trust Fund for Gaza and West Bank) 58. Project Management will support the incremental operational expenses incurred by the PWA as a result of administering project implementation, management, and monitoring, 21 including office maintenance, office supplies and utilities, translation and interpretation, printing and advertising, communications costs, transportation and travel PIU staff costs, and other miscellaneous costs as may be needed to meet the reporting, financial management, and procurement requirements of the World Bank, AFD, and Sida. . 22 Annex 3: Implementation Arrangements I. Project institutional and implementation arrangements 59. The Project's implementing agency will be the Palestinian Water Authority (PWA). The PWA has received a clear mandate from the PA's Cabinet of Ministers to define and lead the implementation of the Water Sector Reform as defined in the Action Plan for Reform that was approved by the Cabinet on December 19th, 2009. A Project Implementation Team (PIT) will be established at the PWA for day to day implementation of the project. The PIT will comprise, as core staff, a Project Manager, a procurement specialist, and a Financial Management Specialist. Within the PWA, a Reform Coordination Unit (RCU) has been created to act as the focal unit in charge of supervising the PIT. The RCU team is composed of PWA directors in the West Bank, Gaza Strip and advisers to the head of PWA. 60. The TPAT consultants will report to the Head of PWA, through the PIT. The Project Manager within the PIT will be a designated member of the RCU. The RCU will, through the PIT, also ensure day to day support and oversight of TPAT, review its outputs and administer its contract. TPAT reporting outputs may be utilized by the PWA to inform the Reform Steering Committee appointed by the Council of Ministers to oversee the implementation of the Action Plan for Reform. Further, TPAT team might be requested to perform ad-hoc presentations to the RSC. II. Financial Management 61. As part of the project preparation, the FM team conducted a financial management assessment of the PWA in the context of the FM requirements for the project. The assessment reviewed the organizational structure of the PWA's Financial Department for implementing the project. The assessment concluded that the capacity of the PWA needs further strengthening in the Financial Management area. As a part of the capacity building aspect of the project, the project design includes, as part of the TPAT contract, capacity building advisory support for the PWA in the area of financial management. 62. The PWA will be the responsible party for managing, implementing and supervising this project, including financial management, with the direct assistance of the TPAT. PWA will be responsible for preparing and issuing the annual work program and operating budgets as well as all the progress and financial reports, the Interim Financial Reports (IFRs) and annual audited financial reports. 63. Role of Partners: While the project is not dependant on the co-financing, co-financing options were identified between AFD, SIDA and WB during project identification. It is understood that SIDA will make its funds available through a recipient-executed trust fund to be established with the World Bank and to be administered by the World Bank. AFD will provide parallel co-financing of its share of TPAT costs directly to PWA. Accordingly, PWA will manage and be accountable to two sources of TPAT funding, with distinct accounts, request for payments, and fiduciary requirements. PWA will clearly indicate the source of financing on each 23 accounting record (receipts/invoices/contracts) and Statement of Expenditure (SOE) forms that accompany withdrawal applications. 64. During Appraisal, co-financing arrangements were finalized between the different financiers, and where the parallel financing is used, the activities and items to be financed in parallel form to be identified and agreed between all donors. 65. Project Financing: The project will provide funding for PWA's proposed "Technical and Planning Advisory Team" (TPAT), and for additional consultancies and capacity building activities to be defined and delivered outside the scope of TPAT. The project will be co-financed by AFD, SIDA and the World Bank. AFD has confirmed co-financing of one million Euro (US$1.4 million equivalent) to be provided as parallel, direct co-financing. Sida has confirmed their intention to provide SEK 13 million (approximately US$1.6 million) for the project to be provided as joint cofinancing through a Bank-administered trust fund. The cost of the TPAT contract is estimated at $4.9 million, of which AFD will provide 1 million Euros (about $1.4 million), the World Bank $2.1 million, and Sida $1.4 million. $0.1 million of the World Bank Grant and $0.2 million of the SIDA funds would be available to PWA for additional studies and capacity-building tasks outside of the scope of TPAT. The World Bank will provide $0.8 million for project management costs. In the event that Sida funds do not become available, or exchange rate fluctuations reduce the dollar value of the AFD contribution, the TPAT contract will be amended to reduce the scope and costs to conform to the resources available if supplementary funding is not available. The phased nature of the TPAT inputs makes such an amendment relatively easy to execute. The Project is not dependant on the co-financing. 66. The following schedule shows the financing amounts to be provided by the cofinanciers with the respective financing percentage from each donor to the project: Activity AFD SIDA WB Total WB % Financing US$ millions equivalent TPAT 1.4 1.4 2.1 4.9 43% Supplementary Studies & Training 0.2 0.1 0.3 33% Project Management 0.8 0.8 100% Total 1.4 1.6 3.0 6.0 50% 67. Flow of Funds: The Bank financing will be a Grant from the Trust Fund for Gaza and West Bank to be disbursed through a Designated Account (DA) opened by the MOF under the Central Treasury System and managed by the PWA. The Bank has agreed that up to $600,000 may be retroactively financed with effect from March 1, 2011. 68. The PWA will prepare a detailed quarterly budget (disbursement plan), according to which the ceiling of the DA will be defined, to facilitate the availability of funds necessary for on-time project implementation. Separate DAs will be used for the Bank funds and for the SIDA funds. Separate Accounting records will maintained for each Trust Fund. 69. The PWA will maintain a DA denominated in Pound Sterling (GBP) to which the initial deposit and replenishments from Bank resources will be deposited and will be used in 24 financing project components according to the approved budget, the Grant Agreement, and Project Paper. 70. Withdrawal Applications submitted to the Bank will be prepared by PWA, signed by the authorized signatures at the MOF before submission to the Bank. 71. When the central treasury account (CTA) is fully established at the PA, the flow of funding to the PWA will be directed through the CTA instead of through a separate designated account. The Bank will continue the discussion with MOF in regard to the CTA implementation. 72. Staffing: The FM aspects of the project will be the responsibility of the finance department at the PWA, with financial control supervision and internal auditors assigned from the MOF, and also the additional support to be provided by the TPAT advisory in the FM area. Although the PWA has previous experience with World Bank projects, additional strengthening will be required. PWA has assigned one of its FM staff (Financial Manager at PWA) to follow up on the FM aspects for the project and also this FM staff will be provided with orientation and training on Bank guidelines concerning IFRs, Audit, and disbursements to be ready for project implementation. Additional training from the Bank FM team will be provided to the PWA throughout the project implementation period. 73. Financial Control: Financial control for the PWA is the responsibility of MOF financial controllers stationed at the PWA. According to the MOF financial controller mandate, all project activities implemented by line ministries have to be reviewed and cleared by the financial controller based in that line ministry. This will include the Project as well. The Financial Controller's function is important to insure that Project activities are in compliance with the Implementation manuals and donor guidelines as well as in compliance with internal control mechanisms. 74. Internal Audit: The internal audit function is also centrally established at the MOF, with a mandate to cover all line ministries and public entities including the PWA. MOF's internal audit function is under way to be fully functional, internal audit manual has been drafted and training to the internal auditor recruited is underway. The Bank will continue the discussion with MOF to continue building capacity of the internal audit function at MOF and PWA eventually. The internal auditor will ensure that the processes and procedures of the whole PWA are properly applied. The internal audit reports will also be submitted to the PWA chairman. 75. An audit committee will be established from independent members and will (i) ensure that financial statements are understandable, transparent, and reliable, (ii) ensure that the risk management process is comprehensive and ongoing, rather than partial and periodic, (iii) help achieve an organization-wide commitment to strong and effective controls, (iv) review policies relating to compliance with laws and regulations, ethics, conflicts of interest, and the investigation of misconduct and fraud, (v) ensure the internal auditors have access to the audit committee and encouraging communication beyond scheduled committee meetings, (vi) establish a direct reporting relationship with the external auditors, and (vii) review internal audit plans, reports, and significant findings. 25 76. Information system: The system currently used by the PWA and MOF (the Bisan system) will be configured through the opening of a separate cost center that will be used to account for, record, report and monitor the project accounts and generate the project financial reports, by category, component, and by each financing donor separately. 77. Financial Reporting and Monitoring: The PWA will have overall responsibility for the financial management of the Grant. Specifically, it will be responsible for: i) consolidating the grant financial data; ii) preparing activity budgets (Disbursement Plan) quarterly as well as annually, monthly DA reconciliation statement, and periodic SOEs, withdrawal schedule, quarterly IFRs and annual financial statements; and iii) ensuring that project FM arrangements are acceptable to the PA and the World Bank. 78. The PWA will produce quarterly and annual reports as outlined below and submit these to the Bank for the purpose of monitoring project implementation. 79. Financial Reports include a statement showing for the period and cumulatively (project life or year to date) inflows by sources and outflows by main expenditure classifications; opening and closing cash balances of the project; and supporting schedules comparing actual and planned expenditures with detailed deviation analysis between actual and budgeted figures. The reports will also include cash forecast for the following six months: (a) A Statement of Sources and Uses of Funds (by grant category / activity showing Bank separately from other financiers); (b) A Statement of cash Position for project funds; (c) Statements reconciling the balances on the various bank accounts (including DA) to the bank balances shown on the Statement of Sources and Uses of Funds; (d) SOE Withdrawal Schedule listing individual WAs relating to disbursements by SOE method, reference number, date and amount; and (e) Notes to the Financial Statements for significant accounting policies and all other relevant information. Indicative formats for the IFR are outlined in the Financial Monitoring Reports: Guidelines to Borrowers. External Audits: The Grant Agreement will require the submission of annual Audited Project Financial Statements within six months after year-end. The audited financial statements will report separately each financier contribution and related disbursement to the Project. Project Financial Statements are to be audited in accordance with international audit standards by an independent, experienced, and internationally recognized audit firm acceptable to the World Bank and recruited on a competitive basis based on TORs acceptable to the Bank. The audit reports will be submitted to the World Bank within six months after the end of each fiscal year. The cost of the audit will be financed jointly from the financiers of the Project as per the financing percentages stipulated above. Gradually, as the State Audit function is further strengthened, the Bank can increase its reliance on the state audit to conduct the audit of Bank financed projects. The Bank will continue the discussion to gradually move the audit from private external auditors to the State Auditor (SAACB). 26 In addition to the audit report, the external auditors will be expected to prepare a Management Letter giving observations and comments, and providing recommendations for improvements in accounting records, systems, controls and compliance with financial covenants in the Bank Trust Fund Grant Agreement. The audit TOR scope of work will include attestation the Internal Control System of the PWA can be relied on and provide a basis for producing the project financial statements. PWA will maintain separate accounting records for each financier based on the co-financing arrangements and percentages. Reporting will be consolidated on the project level reporting each financier separately. Audit TOR will include verifying that the co-financing arrangements and percentage financing is in accordance with the project financing agreements. The audited annual project financial statements will be publicly disclosed according to the Bank disclosure policy. Training and Implementation Support: The Bank will provide training to the PWA staff on Bank financial management and disbursement guidelines and procedures and will provide financial management support during project supervision. III. Disbursement Arrangements 80. Disbursements from the Bank Grant will follow the transaction-based method, i.e., traditional Bank procedures: SOEs, Direct Payments, and Special Commitments. For certain payments, above the "Minimum Application Size" as specified in the Disbursement Letter, Withdrawal Applications (WAs) will be submitted to the Bank for payments to suppliers and consultants directly from the Grant Account. 81. The DA will be held in GBP. The initial deposit into the DA will be based on a four months forecast prepared by the PWA and submitted with the Withdrawal Application. Subsequent disbursements into the DA will be based on SOE, and accompanied with Withdrawal Applications, reconciled bank statements and copies of all bank statements. The supporting documentation for requests for direct payment should be records evidencing eligible expenditures (copies of receipt, supplier's invoices). 82. Disbursement by Component and Co-financing arrangements: the schedule provided below shows the financing percentages between the Bank, AFD, and SIDA. Withdrawal Applications to be submitted to the Bank will show total 100% of amounts disbursed on behalf of the project and specify the financing sources of which the Bank will be financing its share as per the summarized financing percentages below. The accounting records will include total project disbursements recorded separately and specify disbursed amounts related to each financier. AFD SIDA IDA Total IDA % AFD % SIDA % Total Activity US$ millions equivalent Financing Financing Financing % TPAT 1.4 1.4 2.1 4.9 43% 29% 28% 100% Supplementary Studies & 0.2 0.1 0.3 33% 0% 67% 100% Training Project Management 0.8 0.8 100% 0% 0% 100% Total: 1.4 1.6 3.0 6.0 50% 23% 27% 100% 27 IV. Procurement 83. Procurement of goods and consultants' services under the project will be carried out in accordance with the `Guidelines On Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants' known as the `2006 Anti-Corruption Guidelines', and the `Guidelines: Procurement under IBRD Loans and IDA Credits' published by the Bank in May 2004, revised in October 2006 and May 2010 and the `Guidelines: Selection and Employment of Consultants by World Bank Borrowers,' dated May 2004, revised October 2006 and May 2010, the Grant Agreement and the Procurement Plan approved by the Bank. 84. Overall responsibility for the implementation of project procurement will rest with the Palestinian Water Authority (PWA). The PWA would act as the main counterpart to the Bank and AFD for all procurement aspects of the project and would ensure that project procurement is carried out in accordance with the grant agreement and the procurement plan. 85. Within this general framework, the Reform Coordination Unit (RCU) through the Project Implementation Team within PWA will be responsible for finalizing (through technical discussions/inputs from the Bank, AFD and SIDA), the TPAT TORs as well as the TORs/specifications for other consultants' services or goods to be procured under the project. Based on these TORs, the PWA Procurement Department will prepare the Request for Proposals (RFP)/Bidding Documents and will manage the procurement process, ensuring full involvement of the RCU in all steps of the procurement process; from advertisement through contract award. The PWA will seek the Bank's (and AFD's) "no-objection" on all steps of the TPAT selection process and on other contracts/bid packages that are subject to prior review. 86. The RCU through the Project Implementation Team will take the lead on all technical aspects of the TPAT selection process and will be responsible for contract administration and management including the review and approval of consultants' deliverables and for advising the on the release of funds to the consultants in accordance with the signed contracts. 87. A Procurement Capacity Assessment for the PWA was carried out as part of project preparation and finalized during appraisal. The assessment evaluated the institutional capacity of the PWA to implement procurement under World Bank procurement guidelines and reviewed the organizational structure for implementing the project. Furthermore, the assessment evaluated procurement risks and made recommendations on mitigation measures for efficient procurement under the project. 88. The assessment determined that the procurement and contract management capacity of the PWA is weak and needs to be strengthened through support in terms of technical assistance, training and supervision in order to meet the procurement implementation requirements under the project. Below are the proposed actions agreed with PWA: · Strengthening the procurement capacity of the PWA through hiring a procurement consultant, with expert knowledge of the Bank Procurement/Consultants Guidelines, to provide support and guidance to the PWA procurement staff and the RCU throughout the 28 TPAT selection process, up to contract award; the consultant was contracted prior to appraisal through AFD funds. · Recruitment of a qualified procurement specialist within PWA Procurement Department to be held responsible for processing project procurement according to the agreed-upon procurement arrangements and procedures and to facilitate the implementation of specific procurement capacity building within the scope of TPAT. · To ascertain the proper implementation of the TPAT contract, PWA procurement staff and the RCU shall receive fiduciary training immediately after effectiveness on the administration of large scale consultancy services contracts. The training shall include all administrative, financial, managerial and technical aspects of contract management from contract award until completion. · The Bank's prior review requirements were set in accordance with the existing procurement capacity. The selection of TPAT will be subject to Bank's (and AFD's) prior review; the short list of consultants and the evaluation of proposals shall be carefully reviewed to avoid potential conflict of interest. The RFP would also clearly state the issue of conflict of interest which will disqualify the applicant The Bank will maintain a close follow up and quality control of procurement/contract management matters during project supervision to ensure the efficiency of procurement decisions. 89. The procurement risk rating for the project is Substantial 90. TPAT assignment constitutes the main contract to be financed under the project. The selection of TPAT was launched during appraisal; TPAT TORs were cleared by the Bank and AFD and a request for expressions of interest was issued in UNDB and dg Market. Other envisaged procurement activities include: office equipment, procurement officer, contract management training, external audits and additional technical assistance and capacity building assignments. For each contract to be financed under the project, the different procurement and consultant selection methods, estimated costs, prior review requirements, and time frame are agreed between PWA and the Bank project team in the Procurement Plan (PP). A procurement plan for the first 18 months of project implementation was prepared and agreed with the Bank during appraisal and summarized below. The PP will be updated at least annually or as required to reflect the actual program implementation needs and improvements in institutional capacity. Summarized Procurement Plan (A) General 1. Project Name: GZ Water Sector Capacity Building Project 2. Period covered by this procurement plan: March 2011- September 2012 (B) Goods 1. Procurement Methods and Prior Review Thresholds: Procurement Decisions subject to Prior Review by the Bank as stated in Appendix 1 to the Guidelines for Procurement: 29 Category Method of Threshold Prior Review Threshold Procurement (US$ Equivalent) (US$ Equivalent) Goods NCB <500,000 All Contracts Shopping <100,000 First two contracts Direct Contracting No threshold All contracts 2. Summary of the Procurement Packages planned during the first 18 months after project effectiveness 1 2 3 4 5 6 7 Ref. Description Estimated Procurement Domestic Review Comments No. Cost Method Preference by Bank US$ (yes/no) (Prior / Post) 1. Office Equipment 60,000 S No Prior 2. Office Furniture 30,000 S No Prior Total 90,000 (C) Selection of Consultants 1. Selection Methods and Prior Review Thresholds: Selection decisions subject to Prior Review by Bank as stated in Appendix 1 to the Guidelines Selection and Employment of Consultants: Category Selection Method Threshold Prior Review Threshold (US$ Equivalent) (US$ Equivalent) Consulting QCBS No threshold All contracts Services Firms QBS No threshold All contracts CQS/LCS <200,000 First two contracts selected under each of the two methods and thereafter all contracts above $100,000 Sole Source No threshold All contracts Individuals IC No threshold First two contracts regardless of the value and thereafter all contracts above $50,000 Sole Source No threshold All contracts 2. Short list comprising entirely of national consultants: Short list of consultants for services, estimated to cost less than $200,000 equivalent per contract, may comprise entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines. 3. Consultancy Assignments with Selection Methods and Time Schedule 1 2 3 4 5 6 1. TPAT 4,260,000 QCBS Prior 2. Contract Management Training 6,000 IC Post 3. Midterm Evaluation 10,000 CQS Prior Total 4,276,000 * IDA percentage financing of TPAT amounts at 51%. AFD and SIDA (through Bank-administered Trust Fund) will be sharing the cost of the TPAT contract @ 24% each 30 91. The Bank will carry out at least two supervision missions per year. A post procurement review of contracts which are not subject to the above prior review requirements shall be conducted once a year. The procurement post reviews should cover at least 20 percent of contracts subject to post review. Complete procurement documentation for each contract, including bidding documents, advertisements, bids received, bid evaluations, letters of acceptance, contract agreements, securities, related correspondence etc., will be maintained by PWA in an orderly manner, readily available for audit. V. Environmental and Social 92. Given the nature of the proposed activities, the Project does not raise any significant environmental or social issue. None of the Bank's Safeguard policies is triggered and the Project is classified as "C". In an effort to mainstream sound environmental and social management practices in the Palestinian Water Sector, The TPAT contract will include a first six month phase during which the consultant will perform a comprehensive needs assessment and prepare a detailed TA and CB action plan. Based on this needs assessment, the consultant and the client (PWA) will agree on the revision of the initial work program proposed by the consultant to carry out the defined action plan. The consultant's Terms of Reference include - as part of the initial six month needs assessment - a detailed review of the capacity of the PWA to implement the relevant Palestinian laws and regulation regarding environmental and social impact assessment and management of water projects. Based on this review and needs assessment, a capacity building program would be devised and implemented by the consultant. In addition to water sector specific areas, the consultant will be required to provide additional expertise on a need basis as required by the TORs, including but not limited to social and environmental management of water projects. VI. Role of Partners The project will be co-financed by AFD and SIDA. AFD will provide one million Euro as parallel direct financing. Sida is expected to provide 13 million Swedish Kronor as joint co- financing, through a recipient-executed trust fund to be established for this purpose by the Bank. 31 Annex 4: Operational Risk Assessment Framework (ORAF) WEST BANK AND GAZA Water Sector Capacity Building Project Project Development Objective (PDO) Strengthen the capacity of the PWA to more effectively plan, manage and regulate water sector development in West Bank and Gaza PDO Level Results 1. Progress in implementing the water sector reform process. As measured by delivery of: i) detailed sector reform Indicators: planning document; ii) implementation action plan; and iii) monitoring tools 2. Comprehensive updating of PWA's policies, strategies, guidelines, and technical planning tools 3. Increased strategic planning and implementation capacity of the PWA, as measured by appointments of qualified staff in accordance with institutional analyses, and progress in implementing the reform action plan. Risk Timing for Proposed Mitigation Risk Category Ratin Risk Rating 15 Explanation Risk Description Mitigation: Measures g Prep/Impl. 16 1. Project Institutional rivalry and A contract between the TPAT Stakeholder Risks sector institutions: the competition for resources consultants and PWA or a Other ministries and water implementation of the water may undermine the potential successor institution 1.1 Within the sector reform process might be effectiveness of project (water ministry or other) with Palestinian MI the object of rivalries between activities and lead to confused the responsibility of leading X X Authority ministries and institutions such reporting arrangements and the Water Sector Reform will as the Ministry of Local lines of authority for technical be a condition of Project Governments (MOLG) and the assistance. effectiveness to further Ministry of Agriculture (MOAG). delineate lines of authority. 15 This section is part of the deliberative process and will be available in the system but not in the final documentation. The document will reflect all other aspects which will be disclosed. 16 Please see para. 14 of the guidance note for details on filing in timing for mitigation measures. 32 PWA has received a clear mandate from the Cabinet of the Palestinian Authority to define and lead the implementation of Water Sector Reform process. PWA has so far led the process in a remarkably inclusive manner. Relevant ministries and other stakeholders have been gathered in a Reform Steering Committee which ensures consultation and participation of key stakeholders and especially MOLG and MOAG. The TPAT contract will be co- Given the significant number AFD, SIDA and WB will financed by three major donors of donors involved in participate in semi-annual (AFD, SIDA, WB) and supporting the Palestinian formal TPAT supervision implementing in a milieu in water sector, there is a risk of missions, during which semi- which other donors (e.g. overlapping or conflicting annual TPAT progress reports, Norwegian cooperation, GTZ, advisory support and key outputs and workplan USAID) have ongoing and assistance. updates will be reviewed planned technical assistance (prior to their approval by projects for the water sector that PWA). could potentially overlap or conflict with TPAT advisory Regular consultations will support. continue to be held during 1.2 Donors MI X X implementation under the However, consultations with all leadership of PWA with other donors who are active in the donors to ensure effective water sector have been held coordination. during project preparation, and PWA has taken a proactive role Also, the Water and Sanitation in promoting donor coordination Sector Working Group and in ensuring the alignment of provides an effective forum for all donors on the proposed donor and PWA dialogue and water sector reform plan. coordination 33 The Israeli Government may Israeli authorities have the The risk of interference is not undermine efforts to strengthen ability to interfere with the directly related to the Project's the capacity of the PWA and approval of water projects by DO which are related to related institutions to maintain the Joint Water Committee outcomes depending solely on control of water resources (JWC) and the Civil the Palestinian Authorities 1.3 Government (through restrictions on travel, Administration. They also (Water Sector Reform and of Israel and limiting access to data, etc.). may have an interest in Capacity Building). MI X X Israeli Water maintaining relatively Authority However, the IWA and other inefficient sector institutions Regular dialogue is maintained Israeli institutions have for the West Bank and Gaza. with COGAT, ICA, and other expressed a willingness to relevant Israeli institutions. cooperate with the PWA in managing regional water resources. 2. Operating · In the absence of peace and Environment Risks reconciliation, the WB&G will · Politics and governance: Reliance not only on PA not be able to recover both The stalled peace process institutions, but also on local politically and economically. hampers parts of the PA's communities, NGOs, local Lack of forward momentum reform agenda and prospects government, semi-independent on the political front may for economic growth. Also, government utilities and public affect public support for the the current tensions in the utilities. PA and thus affect Bank's region increase potential ability to operate in WB&G. instability within the PWA representation in both Gaza and the West Bank 2.1 Country 17 WB&G and with Israel. H · Political tension within the X provides institutional mechanism West Bank and Gaza and with to address political issues within Despite a limited easing of Israel could degenerate into the water sector. the access and movement violence. This would have restrictions by Israel, the serious consequences for the Simple project design, with situation, particularly in Bank's projects. flexible implementation Gaza, prevents private arrangements that take into sector growth. The account access and movement separation of Gaza and the restrictions and can quickly tensions between the PA in adapt to changing circumstances the West Bank and the on the ground. Hamas government in Gaza continue to impact the Additional funding to existing 17 Please see para. 8 and 27 of the guidance note for details on completing this section. 34 fabric of the Palestinian projects that can operate under society. the current closure. · Society and security: Security manager advising on Israel's physical, security situation and on entry to administrative and Gaza. New security systems regulatory restrictions in (vehicle tracking system; the West Bank and armored vehicles) have been put in place to ensure staff safety. Coordinating with the Office of blockade of Gaza with the Quartet Representative sporadic military (OQR), and Israel on entrance interventions heavily of personnel and materials impact the PA's ability to into Gaza for project implement its national implementation. One staff plans. member seconded to the OQR. There is no guarantee that the Delays in Reform Action Plan PA will reach a timely decision decision making may lead to Assurances will be sought that by end 2010 on institutional uncertainty about the focus PA is committed to timely reforms for the water sector. and priorities for technical reform decision making. Water Substantial delays beyond such assistance for capacity Sector Reform process is linked date add uncertainty to TPAT's building of sector institutions. to the Prime Minister's time workplan, and ability to deliver table for establishing a on outputs. Palestinian State within two years, which will require a 2.2 Institutional However, the IWSR is now commitment to institutional MI underway with strong X (sector & reforms by September, 2011. multi-sector ownership and support from Level) PWA. The TPAT contract will include relevant renegotiation and termination clauses. In addition, a two-phased approach will be taken, with major commitments defined only after the institutional review is completed and the results endorsed by the PA. The IWSR may result in findings The institutional reforms and L X and recommendations that the associated strategy proposed The project itself provides the Bank with the opportunity and 35 Bank does not support, but are may, in the view of the Bank, endorsed by the PA. not be conducive to the resources to generate development of efficient and information and support for sustainable water, sanitation, policies and practices that should and water resources lead to sustainable and efficient management services in the services. West Bank and Gaza. The project design and institutions such as the Water and Sanitation Sector Working Group provide effective mechanisms for dialogue to ensure common agreement on institutional arrangements. In addition, the phased nature of the TPAT contract should allow for opting out if the Bank concludes that further support would not be useful in the context of the proposed reforms. Fiduciary risk associated with 3. Implementing Agency Risks (including FM & PR Risks) management of AFD, SIDA, PWA has limited experience with Refresher training to be provided and WB co-financing. There is Bank procedures, and staff who to ensure that PWA FM staff are a risk of overlapping funding were involved with previous Bank sufficiently familiar with Bank support with co-financing operations may have left the FM guidelines as well as those channeled from three sources, institution. of AFD. with two TFs and direct AFD may provide parallel co- financing. financing with different fiduciary The Project Implementation arrangements and reporting Manual, to be approved by the 3.1 Capacity MI X X requirements, increasing Donor Partners, will provide administrative burdens for PWA. detailed guidance on the administrative procedures required by the Bank and other donors, and agreed mechanisms for streamlining reporting. PWA will maintain separate accounting records for each financier based on the co- financing arrangements and 36 percentages. Reporting will be consolidated at the project level. Audit TOR will include verifying that the co-financing arrangements and percentages Fiduciary risk in procurement are being followed. of TPAT services by PWA. The importance of TPAT services Independent consultants will be and the likely teaming of hired to advise and support PWA Palestinian consultants with in the procurement of TPAT international bidders may create services. Provisions against L X the conditions for conflicts of bidder conflict of interest will be interest and influence in the asserted and strictly applied. procurement of TPAT services in Refresher training to be Ramallah. provided. TPAT scope will further include specific procurement capacity building. Staff turnover or reduction of Potential loss of leadership staff numbers may reduce the and supervision capacity on Bi-annual supervision missions ability of the structures put in PWA's side during project by the donors will provide the place to ensure coordination of implementation opportunity for the donors to the Water Sector Reform review the need for additional (Reform Steering Committee) MI X support if required to ensure that and effective supervision of the key PWA staff involved in the reviews and technical assistance RCU are available to supervise consultancies included in the TPAT and other tasks. action plan (Reform Coordination Unit). PWA procurement and contract PWA does not currently have Independent procurement management capacity is limited. procurement staff with adequate consultant was hired to advise knowledge of the Bank and support PWA in the 3.2 Procurement Procurement and Consultants procurement of TPAT services, MI X Capacity Guidelines or the administration up to contract award. of large scale consultants Procurement Specialist would be services contracts. hired at PWA. TPAT scope will further include specific procurement capacity building. Procurement staff and RCU will receive training on contract 37 management. PWA management and staff may Lack of buy-in to TPAT not see a need for capacity advisory and capacity TPAT has been consistently building support per se, but building services from PWA's highlighted by the head of PWA value access to additional managers and key staff as one of the key elements of the financial resources. They also Sector Reform Plan. may not agree with the focus and The preparation of TPAT TORs priorities for the support to be has involved extensive provided participation of PWA's managers and key staff to 3.3 Governance L However, PWA has led the ensure the project inputs, X design of the project and activities, and expected preparation of the TORs for the outputs accurately reflect TPAT consulting team. client needs and priorities. Appointment of key PWA staff to be trained and provision of counterpart contributions are conditions for appraisal. The risk that may be associated with the selection The importance of TPAT services The selection of TPAT will be of TPAT services by PWA and the likely teaming of subject to Bank's (and AFD's) Palestinian consultants with prior review; the short list of 3.1 Fraud & L X international firms may create the consultants and the evaluation of Corruption conditions for conflicts of interest proposals shall be carefully and influence the selection of reviewed to avoid potential TPAT. conflict of interest. The RFP would also clearly state the issue of conflict of interest which will disqualify the applicant. Flexibility is strongly built in the Design flexibility : Lack of 4. Project Risks design of the TPAT contract. advance visibility in IWSR Refer to the description of the sector architecture 4.1 Design TPAT contract design in section MI The first nine month phase - recommendations and PA X 4.5 Contract Management. The focused on needs assessment ­ decision. IWSR is expected to PWA will maintain agreed is expected to start when the recommend a reform of coordination arrangements with preliminary results of the IWSR moderate scope, complexity, the co-financiers. 38 will be known, but before there cost and duration, preserving is endorsement and commitment PWA's sector planning and to implementing them. Any regulation role. More radical delay in completing the IWSR reforms cannot however be could delay or compromise the ruled out. effectiveness of TPAT support. While being articulated around a well defined list of outputs, the contract will allow TPAT to function as an expert facility to be mobilized in a flexible way, according to agreed bi-annual revision of the workplan. Palestinian norms and During the first six months of regulations in terms of social the contract, the TPAT and environmental assessment consultant will carry out a and management of water needs assessment including a projects are defined by the detailed review of the capacity Environmental Quality Agency Ensuring the of the PWA to implement the (EQA), and their revision is not mainstreaming of social While being articulated relevant Palestinian laws and part of the PWA-led Water and environmental issues : 4.2 Social & around seven water-specific regulation regarding Sector Reform Plan supported Environmental L core areas of expertise, TPAT environmental and social X by the Project. intervention needs to be impact assessment and carried out in a way that management of water projects. The review and ­ if needed ­ ensures the mainstreaming of Based on this review and reinforcement of PWA's capacity social and environmental needs assessment, a capacity to implement the relevant issues in the PWA's activities. building program would be regulation is however explicitly devised and implemented by included in TPAT TORs, with the the consultant. intervention of relevant experts to be provided by the consultant. The level of risk is inherent to Program dependency : TPAT TPAT approval by the WB will the nature of the proposed is one element of a broader require: 4.3 Program & operation supporting a strategic institutional strengthening - Confirmation that IWSR is Donor MI X X sector such as water in a highly program which involves an underway; unstable political institutional Institutional Water Sector - Governmental assurances and political environment. Review (ISWR), a Legislative that, following completion of 39 Review, an Organizational IWSR, PA is prepared to reach Reasons for considering the Review, Change Management and enact a timely decision on probability of such risk technical assistance, and improved water sector relatively low are : (i) the clear other initiatives. architecture; mandate to lead the Water - Assurances that the Sector Reform given by the PA's Legislative Review is scoped cabinet to the PWA, and (ii) (TORs prepared and demonstrated donor support for approved) and that funding is the reform process. identified for its timely implementation. Approval of the improved water sector architecture is directly linked to the Prime Minister's time-bound plan to establish a Palestinian State. PWA has taken a proactive role Donor collaboration : Given The TPAT contract will be co- in promoting donor coordination the significant number of financed by three major and in ensuring the alignment of donors involved in supporting donors (AFD, SIDA, WB) and all donors on the proposed the Palestinian water sector, extensive consultation of other water sector reform plan. donors coordination will be relevant donors (Norwegian L Donors themselves proactively key cooperation, GTZ) have been meet and seek to coordinate carried out during the their programs, inter alia preparation of TPAT TORs. through the Water and Sanitation Sector Working Group. 40 PWA operates is a competitive Sustainability : Lack of The PWA has established a bureaucratic and political empowerment of PWA reform coordination unit environment with other managers and staff and (RCU) to ensure the continuity agencies of the PA. limited sustainability, beyond with the overall reform TPAT, of solutions applied process. The RCU involves PWA must also compete with and knowledge transferred. relevant Director Generals private sector opportunities from the PWA as well as both within Palestine and dedicated advisers to the head abroad to recruit and retain of PWA. The RCU will be qualified staff. identified in TPAT TORs as the focal unit to supervise On the other hand, there is a implementation and ensure large pool of well-trained and the quality of the outputs of 4.4 Delivery experienced Palestinian the technical assistance. Quality MI professionals from which to X draw, both within Palestine and The PWA will assign dedicated abroad. staff to engage on a daily basis with the TPAT individual experts to facilitate the transfer of technical assistance and build capacity. Operation is designed to minimize long-term CB/TA resident expert assignments, and favors short mission instead. Last year of TPAT is to implement a formal handover strategy. 41 TPAT TORs include a very wide Measurability : Measurement Key outputs will be identified range of "soft" outputs. and attribution of results and to be included in the TORs as outcomes from the technical contractual outputs assistance inputs will be conditioning the payment of difficult to assess. the consultant and/or as project intermediary outcomes to be used to monitor the progress of Project's L X X implementation. Explicit termination clauses will be included in the contract to be signed between PWA and the consultant, and related covenants will be included in the Grant agreement to be signed between WB and PWA. The TPAT contract is expected to Contract management: The be signed and consultants design of the TPAT contract is The PWA and the mission have mobilized before the IWSR is critical to ensure the agreed on an optimized tiered completed and approved. commitment of both PWA and structure for the TPAT Contractual arrangements will the consultant to the delivery contract. A single TPAT need to include flexibility to of the outputs outlined in the contract would be procured adapt to evolving capacity TORS. for a period of up to 3 years, to building needs. be renewed after 12 and 24 months based on achievement of minimum performance requirements. MI X X The provision of TPAT services for activities 2 and 3 would begin with the development of detailed needs assessments and action plans to be submitted within 3 and 5 months respectively. Such action plans will refine the definition of outputs, as well as the methodologies, means and progress indicators to achieve 42 them, based on detailed needs assessments and IWSR recommendations for institutional reform of the water sector. The action plans may also include staffing requirements and tasks to be fulfilled by PWA. Approval and commitment by PWA of such action plans would condition the continuation of TPAT services on activities 2 and 3 beyond month 6 through month 36. Explicit termination clauses will be included in the contract to be signed between PWA and the consultant, and related covenants will be included in the Grant agreement to be signed between WB and PWA. Overall Risk Risk Rating: Rating: Implementation Date Comments There are significant risks affecting the ability of the Project to deliver its DO's. The main risks are Preparation related to the overall political context, the specific progress in the PWA-led water sector reform agenda, and to the PWA's technical staff readiness and buy in required to ensure that actual capacity building is derived from TPAT's intervention. Proposed risk ratings of Medium-I for preparation and Medium-I for implementation are justified Medium-I Medium-I 12/05/10 by the following considerations : - The team considers that considerable progress has been made by PWA in the preparation of the TPAT intervention, including (i) extensive external and internal consultation, leading to satisfying indications of the buy-in and readiness, and ( ii) the definition of the outputs and of the reporting arrangements for TPATs. - The remaining risks during implementation are considered as unavoidable given the local institutional context, and have to be weighed against the cost of inaction. 43 Annex 5: Implementation Support Plan I. Strategy and Approach to the Implementation Support 93. The Implementation Support Strategy design is built on the following key considerations: The main project activity will be a single consultant contract consisting in one firm component and one adaptable component. The size of the contract will be significant with regards to the Palestinian water sector. The contract will be co-financed by three donors (AFD, SIDA and the World Bank) In spite of the detailed description of the expected inputs included in the TPAT Terms of Reference, the consultant's work plan will most probably require some adaptations, based on the actual progress in the implementation of the Reform Action Plan as well as the recommendations of the other reviews (LR, OR, & CMTA). 94. Taking the issues above-mentioned into account, the proposed Implementation Support Strategy comprises the following features : The Project supervision team will include a HQ-based Task Team Leader in charge of the country water sector program, as well as Country Office (CO) based sector, fiduciary, and safeguards staff. Before launching the procurement of the TPAT contract, AFD will provide funding to the PWA to hire a procurement consultant, with expert knowledge of the Bank Procurement/Consultants Guidelines, to provide support and guidance to the PWA procurement staff and the RCU throughout the TPAT selection process. Fiduciary training will be offered early on to the PWA's implementation staff. The Safeguard staff will specifically review the result of the initial six-month needs assessment relative to the capacity of the PWA to fulfill its responsibilities in terms of environmental and social management. AFD, SIDA and WB will participate in semi-annual formal TPAT supervision missions, during which semi-annual TPAT progress reports, key outputs and work plan updates will be reviewed. II. Implementation support plan 95. Technical Support: Technical support will principally involve joint supervision missions to be conducted biannually by the donor partners. AFD and IDA have water sector technical specialists assigned to this task. 96. Fiduciary Support: Fiduciary support will be provided primarily by the Bank's procurement and financial management specialists based in Jerusalem. In addition to biannual supervision missions, these specialists will be available on an ad hoc basis to provide support as may be required to the project implementing agency. 97. Safeguards: Safeguards risks and issues directly related to this project are considered to be minimal. The TPAT consultants will conduct an assessment of the PWA capacity and performance in fulfilling its responsibilities in terms of environmental management that are explicitly assigned to the PWA under the current and proposed amended water law in the first six months of the project. This assessment would also include a description of the other relevant institutions such as the Environmental Quality Agency and their interaction with the PWA. Bank Safeguards staff will evaluate the assessment in the course of project supervision III. Implementation main focus. 98. The following table presents the main focus of implementation support during the main phases of the Project's implementation. Time Focus Skills Needed Resource Partner Role Estimate First twelve Procurement of Technical support $ 75,000 AFD will fund the months TPAT contract, for procurement procurement supervision of the and consultant consultant to initial needs team mobilization support the PWA in assessment and the procurement of review of the the TPAT contract. consultant work plan 12-48 Project supervision Sector capacity AFD, IDA, and months and quality needs, Sida will conduct assurance procurement and joint supervision financial missions. management Other IV. Skills mix required Skills Needed Number of Staff Weeks Number of Trips Comments Technical supervision 4 per year 6 (two per year) Procurement supervision 1.5 per year Financial management 1per year Safeguards 0.5 V. Partners Name Institution/Country Role Celine Robert AfD / France Task Manager Herve Conan AfD / France Resident representative Ana Gren SIDA / Sweden Consul, Development Cooperation Annex 6: Team Composition World Bank staff and consultants who worked on the project: Name Title Unit Richard Pollard Senior Water and Sanitation Specialist MNSWA Pier Francesco Mantovani Lead Water and Sanitation Specialist ECSS6 Zeyad Abu Hassanein Senior Infrastructure Specialist MNSEG (Environmental Safeguards) Iyad Rammal Senior Infrastructure Specialist MNSWA Hyacinth Brown Senior Finance Officer CTRFC Suhair Musa Senior Financial Management Specialist MNAFM Majd Laisoon Financial Management Consultant MNAFM Velayutham Vijayaverl Senior Procurement Specialist MNAPR Lina Tutunji Procurement Specialist MNAPR Augustin Maria Water and Sanitation Specialist MNSWA Daniel Shemie Junior Professional Associate TWIWA Fifi Antar Operations Assistant MNCO4 Magalie Pradel Language Program Assistant MNSWA Nikolai Soubbotin Senior Counsel LEGEM Anjum Rosha Legal Consultant LEGEM Annex 7: Palestinian Water Authority Organizational Chart and Staffing At the time of appraisal the Palestinian Water Authority comprised 87 staff, excluding staff within the Project Management Unit of the North Gaza Emergency Sewage Treatment Project and in the West Bank Water Department. An additional 14 staff were under recruitment, of whom five are to be assigned to work with specific aspects of the Water Sector Capacity Building Project. These include: · Two wastewater management specialists · One finance specialist · One water resources management specialist · One water supply specialist In addition, a Capacity Building Program Coordinator will be recruited, along with a procurement specialist, a secretary, and an office manager. The current organization chart for the Palestinian Water Authority is portrayed on the following page. Annex 7, continued Staffing Plan and Or ganization Char t for the Palestinian Water Author ity Minister of PWA Dr. Shaddad Attili Other organizations with a direct link to the PWA include: Project Management Unit (PMU) Office Manager for PWA Deputy Head PWA Head Rebhy El-Sheikh West Bank Hadia Bashir (Based in Gaza City) Aiman Jarrar (interface with PWA: Dr. Shaddad Attili) Project Management Unit (PMU) Office Manager (N/A) Gaza Strip Sadi Ali (interface with PWA: Rebhy El-Sheikh and Dr. Shaddad Attili) Internal Audit Unit Consultants: Michael Talhami, West Bank Water Department (WBWD) Mohammed Sa'adi Ayman Daragmah Fuad A S =(1) P S =(5) B t h Al t Ab di Note: Coordination Public & National Water (1) Director General (DG) International Relations Council Affairs (2) All positions are based in Ramallah unless & Media Unit Y fA (DG) Unit otherwise indicated (i.e. Based in Gaza City) (3) Since the PWA Office in Gaza was taken over International Public Relations Media Unit both Rebhy El-Sheikh and Ahmad Yaqubi Relations Ismail Abu Ta'a Abeer Awwad work from the PMU in Gaza. Yousef Awayes A S =(1) P S=(2) A S =(1) P S =(2) Technical Training Admin & Financial Water Control Regulatory Strategic Planning Water Resources Directorate Directorate Directorate Directorate Directorate Directorate Directorate Hazem Kittani (DG) Ziyad Fuqaha (DG) Mohammad Shuiebi Ahmad Safi Saleh Hammad Omar Awwad (DG) Ahmad Yaqubi (DG) Research & Policies & Personnel Dept. Service Quality Licensing Dept. Geographical Hydrology Dept. Development Dept Technical Support Abeer Abu Ghosh Assurance Dept. Saleh Hammad Information Sy Omar Zayed Subhi Samhan Bessan Shounar A S=(2) PS=(8) Emad Saifi A S=(4) PS=(9) Dept. A S=(5) P S=(8) Specification & Coordination Dept. Administrative Violations and Tariff & Economy Water Planning Water Quality Standards Dept Rania Karakrah Service Dept. Control Dept. Dept. Dept. Dept. (Central Lab) Hala Barhumi AS=(2) PS=(6) Ra'ad Sawafta Walid Awwad Kamal Issa Hani Qasem Majed Alawaneh Quality Assurance Financial Dept. Legal Affairs Dept. Consumers Affairs Wastewater Water Resources Mohammad Ja'as Shareen Musfer Hala Abu Hawa & Public Planning Dept. Development Dept. A S=(5) PS=(8) A S=(3) PS=(6) A S=(2) PS=(4) Awareness De Adel Yassin Deeb Ghafour Computer Dept. Data Bank Dept. Hassan Ghazal Ashraf Dewkat A S=(3) PS=(5) AS=(2) PS=(5) Annex 8: Terms of Reference for Technical, Planning and Advisory Team (TPAT) The TPAT constitutes the main contract to be financed by the project. It is reproduced here in its original format. Palestinian National Authority Palestinian Water Authority PALESTINIAN WATER AUTHORITY WATER SECTOR REORM PROGRAMME TERMS of REFERENCE TECHNICAL, PLANNING AND ADVISORY TEAM (TPAT) October, 2010 Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 49 TABLE OF CONTENTS 1.0 INTRODUCTION AND BACKGROUND ........................................................ 51 1.1 Introduction ...................................................................................................... 51 1.2 Background ...................................................................................................... 51 1.3 Water Sector Reform ....................................................................................... 53 1.4 Oversight of the Institutional Reform Process ................................................. 56 1.5 References ........................................................................................................ 56 2.0 SCOPE OF THE TECHNICAL, PLANNING AND ADVISORY TEAM (TPAT) ......................................................................................................................... 58 2.1 Rationale .......................................................................................................... 58 2.2 Objectives of the TPAT ................................................................................... 59 2.3 TPAT Task Activities ...................................................................................... 61 3.0 FORMAT OF TPAT ............................................................................................ 79 3.1 TPAT Composition .......................................................................................... 79 3.2 TPAT modalities .............................................................................................. 80 3.2 Funding of action plan tasks outside of TPAT scope ...................................... 85 4.0 STAFFING AND QUALIFICATIONS REQUIREMENTS FOR TPAT ........... 86 5.0 TPAT OUTPUTS AND TASK TIMELINE AND RESONSABILITIES .......... 90 6.0 ANNEXES ........................................................................................................... 90 ANNEX 6.1The Roles and Responsibilities of the Water Authority as Defined in the Water Law No 3 of 2002.................................................................................... 92 ANNEX 6.2 The Roles and Responsibilities of the National Water Council as Defined in the Water Law No 3 of 2002.................................................................. 96 ANNEX 6.3 LIST OF CAPACITY BUILDING AND TRAINING PROGRAMMES FOR THE PERIOD OF 2006 UNTIL 2010 ............................. 100 ANNEX 6.4 ABBREVIATIONS AND ACRONYMS ......................................... 102 VII. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 50 1.0 INTRODUCTION AND BACKGROUND A. 1.1 Introduction On Dec 14th 2009 the Cabinet of Ministers of the Palestinian National Authority endorsed an "Action Plan for Reform" (from here on referred to as "the Action Plan") towards the definition and implementation of a comprehensive programme of institutional and legislative reform in the Palestinian water sector 18 ("the Sector Reform"). As the central body in the sector, the Palestinian Water Authority (PWA) has the mandate to lead the reform process in coordination with the established Reform Steering Committee (RSC). The overall reform is expected to include the reorganization of the water sector and the institutions within, capacity building, and the revision of strategies and policies, when necessary, as a result of any change that takes place in the architectural arrangement of the sector. This document provides the Terms of Reference (TOR) for a critical component of the Action Plan which is the establishment of a "Technical Planning and Advisory Team" (TPAT) for PWA. The purpose of this team is to provide technical assistance and capacity building (TA/CB) during the transition period, in an effort to assist in the implementation of the reform, serving as a stop-gap for capacity during the transition period, and ultimately building capacity within the PWA. The TOR refers to activities within the occupied Palestinian territory, including the West Bank and the Gaza Strip, hereafter referred to as `Palestine'. B. 1.2 Background The status of the water sector in Palestine, as it exists today, is a direct outcome of the terms and conditions determined by the Oslo II Interim Agreement of 1995 and the occupation and closures imposed on the Palestinian territory by Israel. Despite receiving a priority focus of external aid, the Palestinian water sector has not significantly developed, and by some standards has regressed, in the past 15 years due to exogenous and endogenous factors. Palestinians suffer from restricted access to their entitled share, in accordance with international water law, of the trans-boundary water resources. This manifests itself with low per capita water availability, inadequate water service in terms of access, reliability and water quality, and major seasonal water shortages particularly acute in rural areas. The sewerage sector has 18 In this document, the "Water Sector" is a term used to refer to the activities associated with water resource management and the provision of water supply and wastewater services. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 51 fared no better with chronic underinvestment leading to partial coverage, very low rate of wastewater treatment, and widespread environmental damage. The PWA was created in 1995 through a Presidential decree in order to regulate the water sector, improve and sustain water resources, planning and service delivery provision. The roles and responsibilities of the main water institutions in the water sector are detailed in the Water Law No 3 of 2002 (refer to Appendix 1). In general, the Water Law lacks clarity as a result of the neglect given to defining the exact nature of and relationships between the sector institutions. The Water Law defines the roles and responsibilities of the PWA and the National Water Council (NWC), but fails to offer any guidance on other institutions (i.e. Ministry of Agriculture) and to define the overall sector architecture under which the NWC and the PWA have to operate. The Water Law does however provide PWA with the jurisdiction over the utilities responsible for water provision and sewage water services. At present the relative roles, responsibilities and relationships of the institutions within the water sector are in need of clarification. The ability of the PWA to lead, develop and regulate this suboptimal and exogenously constrained sector is severely hampered by unclear mandates and undefined relationships among key sector institutions including central and local government, civil society and private actors. It is assessed that the institutions and institutional framework created since 1995 to manage water resources and water uses, including the provision of water and wastewater service are insufficient for their purpose and consequently do not meet the needs of the Palestinian people in Palestine. The lack of clear institutional mandates has contributed to a situation of ineffective governance and weak capacity in the Palestinian water sector, which combined with occupation-related restricting factors, impairs the development of adequate policies and strategies for water resources management, infrastructure development and service provision. The institutional fragility of the water sector in Palestine is generally acknowledged, as reflected in a number of reports. In November 2008 a Norwegian funded infrastructure audit of the water sector in Palestine 19 (the Audit) requested by PWA concluded that there is an urgent need for a "strategic-level study of the institutional needs in the water and wastewater sub-sectors in Palestine", and that the study should take account of all previous work on institutional issues, but not be constrained by any earlier 19 An Audit of the Operations and Projects in the Water Sector in Palestine: The Strategic Refocusing of Water Sector Infrastructure in Palestine. 30th October 2008 Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 52 conclusions. It goes on to conclude that "the existing water sector programme [in the West Bank and Gaza] does not sufficiently address the needs of the Palestinian population and that a major refocussing effort is required." It notes "policy and strategy development in the water sector has been inadequate" and goes on to say that "ongoing projects have been developed in a largely donor-driven fashion." Based on these Audit recommendations, and in line with the Program of the 13th Government to accelerate the establishment of a viable Palestinian State the Palestinian National Authority has endorsed the Action Plan for Reform and asked the PWA to lead in the implementation of a multi-year Water Sector Reform. C. 1.3 Water Sector Reform The Sector Reform has the following objectives: With regards to institutions, the Sector Reform will establish strong (capable) and sustainable institutions within a legal framework that clearly defines their roles, responsibilities and the interface (relationship) between them. With regards to infrastructure needs, the Sector Reform will improve water supply and sanitation strategies, policies, investment programs, project designs, and the implementation of projects, in an effort to substantially accelerate infrastructure development. With regards to service provision, the Sector Reform aims to accelerate equitable access to a quality service, while providing improved efficiency and cost-recovery of effectively regulated water operators. With regards to water resources management, the Sector Reform will help to build the institutional knowledge, policies, and monitoring and enforcement capacities, as part of an effort to achieve a more sustainable water resources management strategy. With regards to water consumers, the Sector Reform will aim at improving water demand management awareness in line with the development of water conservation policies. The Sector Reform will be articulated in the following components: An action-oriented Institutional Water Sector Review (IWSR) with the goal of proposing a responsive sector architecture, where each governmental Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 53 institution, holds a clear role and responsibility with the aim of optimizing the coordination and cooperation amongst key stakeholders. A Legislative Review (LR), including a redrafting of the Water Law to reflect the preferred arrangement retained by the Palestinian National Authority (PNA) following the attainment of a consensus on the required institutional architecture, as recommended by the IWSR. This will include a review of pertinent water laws, bylaws and regulations. A PWA Organizational Reform of the PWA shall commence after the Cabinet of Ministers approval of the preferred architectural arrangement, and will include a capacity evaluation of the existing institution, a gap analysis between the existing and desired institution, the development of roles and responsibilities for each department and position within the institution, and the revision of the National Water Plan; to be carried out with the assistance of a Change Management Specialist/Team (CMS). A comprehensive program of capacity building (CB), starting with the Technical, Planning and Advisory Team (TPAT) for the PWA, and after the Cabinet of Ministers approval for the preferred institutional arrangement, other CB programs for each of the individual institutions in the Water Sector shall be developed. A proposed timeline of the above Sector Reform components is illustrated in the diagram below. PWA Action Plan for Reform Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 54 The IWSR shall begin in August 2010 and run for a duration of six months, at which time the process will yield a preferred institutional arrangement, built by consensus. An additional three months is expected to be needed to obtain approval from the Cabinet of Ministers (CoM) on the preferred institutional arrangement. In parallel to the IWSR, the TPAT will be put in place to provide transitional technical assistance and capacity building to PWA towards advising and supporting Sector Reform implementation, updating sector strategies, and strengthening the PWA's overall capacity to fulfill the institutions mandate. In total the TPAT program shall run for a period of three years and consist of two main components: (1) Fixed Core Competency Expertise, a Needs Assessment reflecting the institutional arrangement of the Water Sector as detailed in the IWSR CoM Approval, and a Work Plan detailing the adaptive outputs in accordance with the findings of the Needs Assessment; and (2) Adaptive Component based on the outputs outlined in the Work Plan mentioned above (Refer to Section 3.2 "Project Implementation Schedule" for further information). Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 55 Following the approval of the preferred institutional arrangement by the CoM an Organizational Review will be conducted in coordination with the CMS with the objective of carrying out an organizational structure and functional analysis, and recommend and support the implementation of the modified PWA structure. The Organizational Review for the assessment and design of the PWA internal reform is expected to last six months, before the estimated 15-month implementation period. The Organizational Review and implementation period shall include the support of the CMS. D. 1.4 Oversight of the Institutional Reform Process Following the approval of the Action Plan for Reform, the Cabinet of Ministers appointed a Reform Steering Committee (RSC), chaired by the PWA and comprised of the Ministry of Planning and Development, Ministry of Finance, Ministry of Agriculture, Ministry of Local Government, Ministry of Health, the Environmental Quality Authority, a Representative of Service Providers, and a Representative of Civil Society. The RSC is mandated to oversee the implementation of the Action Plan, as executed by PWA, including the IWSR, the Legislative Review, the Organizational Review, and the TPAT. E. 1.5 References Background information on the Palestinian water sector can be found in the following references and will be made available to the consultant by the PWA: Executive Summary of the Water Supply and Wastewater Strategy from 2011 - 2013 (March 2010) Palestine: Moving Forward Priority Interventions for 2010 (January 2010) Cabinet of Ministers Submission entitled "Reform of the Water and Wastewater Sectors in the Occupied Palestinian Territory" otherwise known as the "PWA Action Plan for Reform" (2009) Troubled waters: Palestinians denied fair access to water (October 2009), Amnesty International Basic Needs and Development of On-going and Proposed Projects by Governorates (October 2009) An Audit of the Operations and Projects in the Water Sector in Palestine: The Strategic Refocusing of Water Sector Infrastructure in Palestine (April 2009) Program of the 13th Government: Palestine: Ending the Occupation, Establishing the State (August 2009) West Bank and Gaza Strip: Assessment of Restrictions on Palestinian Water Sector Development (April 2009), World Bank Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 56 The Draft Palestinian Water Agenda (2009-2011) Reports on the West Bank Governorates (2009) The Water Sector Review, Austrian Development Agency (2007) The Water and Wastewater Sector Update, World Bank (2007) The West Bank & Gaza Water & Sanitation Project, Government of Finland (2004) The West Bank Integrated Water Resources Management Plan, USAid/ CH2MHill (2003) The Water Resource Management Strategy, PWA (2003) Water Law No. 3 (2002) The National Water Plan, UNDP (2000) Water Resource Study, USAid/ Camp Dresser & McKee International and CDM/ Morganti (1996 ­ 1999) The Regional Wastewater Management Plan (1998) Water Tariff Study", Norconsult (NORAD) (1998) The Water Sector Strategic Planning Study, Carl Bro International (1998 ­ 2000) Norwegian Institutional Support Programme: Water Master Planning, Government of Norway (1997) The Coastal Aquifer Management Program, USAid/Metcalf & Eddy with Camp Dresser & McKee (1994 ­ 2004) Presidential Decree for the establishment of the Palestinian Water Authority (1995) Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 57 VIII. 2.0 SCOPE OF THE TECHNICAL, PLANNING AND ADVISORY TEAM (TPAT) A. 2.1 Rationale The realignment of PWA's strategies and capacities against the many challenges identified in the Audit, and the mandate to lead the planning and implementation of the Sector Reform call for a substantial effort which exceeds PWA's current capacity. The challenges faced by the PWA have been widely documented, most notably in the World Bank report, "Assessment of Restrictions on Palestinian Water Sector Development" April, 2009 and the Amnesty International report "Troubled Waters ­ Palestinians Denied Fair Access to Water", October, 2009. TPAT is thus justified to deploy additional resources and expertise within PWA to provide urgently needed transitional technical assistance and capacity building for a period of three years. The TPAT will work closely and inclusively with the Head of the PWA, its Directors, advisors and staff in full coordination with key organizations to support and advise the implementation of Sector Reform processes while focusing on the realignment and strengthening of water, sanitation and water resources management strategies and action plans, as well as on developing PWA's capacity for their implementation. The TPAT concept was developed by PWA in consultation with its line managers and with donors, as key instrument of reform assistance, strategic planning and capacity building, destined to complement without duplication other existing CB/TA initiatives within PWA or within the sector (Refer to Appendix 5.3 for a list of on-going and planned CB/TA programmes within PWA and within the sector). Accordingly TPAT tasks and outputs shall rely on effective consultation and participation of relevant internal and external stakeholders, while supporting governmental and donor coordination. Particular attention will be paid by TPAT to sustain seamless coordination with PWA's policy and implementation counterparts in the Administration, including among others at the Ministry of Planning, Ministry of Finance, Ministry of Local Government, Ministry of Agriculture and the Environmental Quality Authority. The success of the TPAT will ultimately reside in the empowerment of PWA managers and staff and in the sustainability, beyond TPAT, of strategies developed and knowhow transferred. The PWA will assign dedicated staff to work on a daily basis with TPAT experts to facilitate capacity building through on-the-job training. Furthermore, the PWA will establish an internal PWA Reform Coordination Unit (RCU) to ensure the coordination of TPAT activities with the overall reform process. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 58 The RCU team is composed of PWA directors in the West Bank, Gaza Strip and advisers to the PWA. In order to promote effective capacity building and avoid substitution, the TPAT will favor short to medium-term expert assignments over long term resident assignments. B. 2.2 Objectives of the TPAT The objectives of the TPAT are aimed at assisting the PWA, as one entity in both the Gaza Strip and the West Bank, are detailed below: Objective 1: Facilitate the implementation by PWA of Sector Reform processes. Objective 2: Update water supply, sanitation and water resources management strategies towards more effective infrastructure development, improved service provision, and sustainable resource management. Objective 3: Develop PWA's capacity for implementation of water supply, sanitation and water resources management strategies, action plans and programs. Attainment of objectives shall be measured against milestone deliverables and progress indicators as detailed below. The milestones outlined below are related to fixed outputs which are pre-defined, while milestones for the adaptive outputs will be developed at the end of the first 6-month period (Adaptive Component). Milestones for Objective 1 will include: · by the first nine months, an assessment and work plan outlining the outputs for the adaptive tasks (component 2) is produced in an acceptable manner to PWA; · by the first six months, the Terms of Reference for the complementary consultancy services including the Organizational Review (OR) and the Change Management Specialist/Team (CMS) Programme shall be developed in an acceptable manner to the PWA; and · by the first year, monitoring tools for an efficient management interface with service providers is produced in an acceptable manner to PWA. Milestones for Objective 2 will include: Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 59 · by the first six months, an assessment of PWA needs with regards to water resources management and waste water strategy and policy development, planning, implementation and regulation is produced and an action plan for implementation of identified needs is produced. · by the first six months, a set of mitigation measures to climate change and an action plan and budget shall be produced in an acceptable manner to PWA; · by the first six month, a set of standards for water quality shall revised and adapted to the context shall be developed in an acceptable manner to PWA; · by the first year, a review of current water resources, water supply, and wastewater status reports shall be produced; · by the first 18 months, applicable tariff model is developed in an acceptable manner to PWA; · by the end of end of the first year, update draft policies, strategies and regulations pertaining to water and sanitation infrastructure and service provision, are produced in an acceptable manner to PWA; · by the end of second year, a water resources management plan in the oPt is produced in an acceptable manner to PWA; · by the end of the second year, a sludge disposal national policy, including waste water reuse schemes, for the West Bank and Gaza shall be developed and then adopted by the PWA and concerned institutions; and · by the end of the third year, sound water supply and wastewater infrastructure plans are developed and then adopted by the PWA. Milestones for Objective 3 will include: · by the six months, review and evaluate the existing groundwater and surface water models, and recommend a suitable model to bridge the gaps to enable optimal water resources management; Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 60 · by the end of the first nine months, a framework program is designed to facilitate the planning, funding, implementation and monitoring of capacity building programs across the Water Sector; · by the first year, a TOR for a detailed environmental and social impact assessment procedures for the purposes of the Water Sector Projects shall be developed; · by the first 18 months, PWA's technical capacity to assess the design of wastewater collection and treatment facilities; · by the end of the second year, PWA management capacity of waste water facilities is improved and a set of guidelines and procedures for sanitation facility supervision shall developed; and · by the end of the third year and in cooperation with on-going and planned TA/CB programs 80% of the constituted service provider(s) capacities shall built in terms of implementation, coordination, monitoring, contract management, technical and financial reporting and internal audit. C. 2.3 TPAT Task Activities The three following TPAT task will be implemented in parallel: · Activity 1: Advisory services and technical assistance to support the implementation of Sector Reform; · Activity 2: Technical assistance and capacity building for the development of updated strategies and action plans for water supply and sanitation infrastructure and service provision, as well as for water resources management; and · Activity 3: Technical Assistance and capacity building for effective sector strategies implementation. The consultant shall be fully responsible for the quality of outcomes of the specific assignments recognizing the necessity for a range of intervention levels from support of PWA staff in the completion of some tasks to the full intervention of the consultant in performing specific other tasks. General support should be in the form of providing a guideline to PWA staff to work on a specific task, review their product and advise Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 61 on corrections measures until reaching a satisfactory level of work produced by PWA staff. The required level of intervention is detailed in the following components. The components of the three activities are divided into two types of activities A) components to be performed within the first nine months of the assignment hereafter called primary activities and B) components to be adapted in accordance with the outcomes of the first nine months and the reform process evolution. Adaptation is subject to negotiations following the submission by the consultant of the action plan as well as the individual action plan of the various components. Please refer to section 4 "action plan" 1. 2.3.1 Activity 1: Advisory services and technical assistance to support the implementation of Sector Reform In coordination with PWA staff, and consultation with other bilateral and multilateral TA programs, the main tasks will be the support to PWA in implementing the activities undertaken in the Water Sector Reform in particular the Institutional Water Sector Review (IWSR), the Legislative Review (LR), the PWA Organizational Review (OR), the Change Management Specialist/Team (CMS) and other bilateral programs, through, but not limited to: 1. Support the CMS in the delineation of capacity building needs, for those that are not covered by the TPAT's work plan for either the fixed or the adaptive components. The identified CB needs by the CMS shall outline the role of the TPAT team as a function of the PWA organizational assessment to be in line with the newly developed/agreed upon structure of the sector; this will include: · the optimisation of terms of references for components of the Sector Reform as needed, as well as support for procurement and supervision of complementary consultancy services and the review of intermediate and final documents; · assist PWA and the CMS in an initial review of the status of the Sector Reform Program, including all relevant documents, and meetings with individual stakeholders involved in the Reform process; · assist PWA and in coordination with CMS in an assessment and review of Technical Assistance/Capacity Building programs in place and/or planned Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 62 for PWA and for key sector institutions, as well as the evaluation of their appropriateness; the assistance to PWA for the development of a detailed Reform Planning Document for the all Sector Reform processes to optimize the internal coordination and tailoring of the Reform Plan, to be periodically updated; the initial update of TPAT work-plan for Activity 1 tasks based on latest developments in Reform implementation at TPAT inception, which should take place within the first nine months after the commencement of the assignment; the preparation of succinct monthly Sector Reform status memoranda for PWA, assessing progress on reform processes; and the preparation of semi-annual reports on progress of Sector Reform processes for the benefit of the TPAT Steering Committee and other relevant reform stakeholders. 2. Support PWA with integrating the revised Water Law and the related Bylaws as developed in the Legislative Review, as well as support and assist in the preparation of regulations and guidelines flowing from the new institutional arrangement and the revised water law: periodically assess and provide legal advice on progress made by sector institutions in satisfying the requirements of the amended Water Law, including the design and integration of bylaws, regulations, standards and guidelines, to the extent that the new Water Law clarifies the mandate, roles and responsibilities addressing the ambiguities and overlaps of sector institutions; and provide technical advice to key sector actors (i.e. PWA, service providers, operators, joint service councils and municipalities...) with regards to likely amendments to bylaws and other guidelines in response to the redrafted water law, bylaws, regulations, standards and guidelines. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 63 3. Support PWA and CMS in defining the rules and interfaces among the sector institutions themselves and other stakeholders including coordination mechanisms in accordance with the new institutional arrangement and needs: · in accordance with the new structure deriving from the institutional review, revision of monitoring tools necessary for an efficient management interface with service providers, including but not limited to, quality assurance procedures and performance indicators, as well as support in drafting complementary protocols, manuals, and regulations as needed; · participation in consultation meetings, support to information dissemination with regards to Sector Reform processes among stakeholders; and · assist the PWA in strengthening the consistency and effectiveness of donor coordination and information processes, in coordination with relevant donor working group. 4. Assist in the development of an Action Plan for the transitional period 20 with the aim of supporting the establishment of a functional institution within the new institutional arrangement which shall ensure the proper implementation of the reform itself and appropriate management of day-to-day activities during the transitional phase of the reform process. 5. Develop an external communication strategy to promote and inform relevant institutions while supporting the CMS in developing an internal communication strategy to address concerned staff on the Sector Reform. This will include but not be limited to the: · assessment of internal and external communication capacities and the identification of gaps; · provide guidance and support to the PWA in developing and implementing communications and media strategies in Arabic and English (including research, press relations and other internal and external communications matters); 20 Transitional period: is the period of implementation of the reform process, towards the new set up of the sector following the approval of the IWSR and Legislative Review outcomes. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 64 · support the establishment of a strengthened communication unit within PWA and provide on job training to a dedicated PWA counterparts; · provide periodic supervision and support to the implementation of the communication strategy; · provide training programs to the PWA leadership to enhance PWA capacity in internal and external communication such as public speaking, press interviews, talking points, press conferences, press statements, update reports to the target audiences, ... as well as generate templates when appropriate; · assist in improving the PWA communication capacity in promoting an equitable and reasonable allocation of trans-boundary water resources; · prepare a succinct monthly Sector Reform status memoranda for PWA, assessing progress on the implementation of the communications strategy and the development of PWA communications capacity; and · prepare semi-annual reports on Sector Reform process for the relevant stakeholders, including progress on the implementation of the communications strategy and the development of PWA communications capacity. With regards to action plans mentioned in Activity 1 above, the implementation and funding of complementary studies and activities will be the responsibility of PWA unless otherwise specified in the present TOR or agreed upon as part of periodic work plan updates. 2. 2.3.2 Activity 2: Technical assistance and capacity building for the development of updated strategies and action plans for water supply, sanitation infrastructure, service provision, and water resources management In coordination with PWA managers, and in consultation with other bilateral and multilateral Technical Assistance programs, the main tasks will include the following: 1. support the development and assist the coordination, endorsement and implementation of responsive and adapted water supply, sanitation and water resources management policies, strategies, regulations and investment programs: Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 65 · Needs assessment for policies, strategies and action plans in the water and waste water/development of action plan for the implementation of the identified needs; · provide consistent technical support and on-job capacity building to the waste water department within PWA; · conduct the review of most-relevant legislation, policies and strategies pertaining to water and wastewater with the aim of identifying problems, gaps and inconsistencies; · conduct an economic analysis pertaining to the cost of Israeli bulk water supply and wastewater treatment to the Palestinian National Authority in coordination with the Joint Water Committee Unit of PWA; · review of current water resources and water supply status, identifying major problems and gaps; · propose and develop/update policies, strategies and regulations pertaining to water and sanitation infrastructure and service provision, according to the two scenarios of the political status evolution described in the Audit, and, as needed, support the PWA in preparation for negotiations within the context of the Joint Water Committee; · propose a prioritized plan for the development of water and waste water infrastructure, including a budget to help establish feasible and comprehensive investment programs for new infrastructure and the rehabilitation of existing infrastructure ­ enabling the optimization of water resources management ­ including the development of relevant master plans, feasibility studies, environmental studies, social studies, designs, etc; · support PWA in the implementation of the infrastructure plans mentioned above, including the identification of additional expertise, the drafting their terms of reference, grant proposals, applications for donor funding, procurement and supervision of consultancy services. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 66 2. Support PWA in the revision of existing, or the development of new regulations to ensure service quality, efficient operations and maintenance, sustainable cost recovery and effective regulation by PWA: · Review the applied and developed tariff guidelines and propose clear and applicable recommendations for the future; · Assess the water sector financing and cost recovery needs; and · Propose strategies for sustainable financing of the Water Sector. 3. Identify funding gaps related to the implementation of the regulations mentioned above and in particular for financing of investment needs. The TPAT will support the PWA in discussions with donors on funding needs for a phased ten year program. The sub-sector specific tasks will be the following, but not be limited to: With regards to water resources management: 4. Develop a coherent and consensual assessment of the water supply resources available to Palestine, including direct groundwater and surface water withdrawals and bulk water purchases from the national Israeli Company, Mekorot. 5. Provide feasible proposals towards the increase of fresh water resources in Palestine, taking account of all available regional sources and being prioritised by feasibility and phased over time. This review shall take account of both conventional and non-conventional sources (desalination, wastewater re-use, inter-basin transfers). 6. Develop a needs assessment, an action plan and a budget for the development of an integrated water resources monitoring program, identifying water quality (including the development of a program for water quality monitoring and a protection plan for the water resources), recharge and abstraction in the West Bank and Gaza, which shall include data collection systems and remote sensing. 7. Assist PWA in the implementation of the action plan, including the identification of additional expertise, the drafting of terms of reference, procurement and supervision of consultancy services. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 67 8. Assist in the development a terms of reference and supervise a strategic analysis of trans-boundary water resource management reviewing the utilization of trans- boundary water resources, as well as endogenous and non-conventional water resources. As well as supporting the development of a shared water resource management plan that optimizes the benefits for all riparians in accordance with best international practices and in relation to customary international water law. With regards to water supply: 9. Support the development of a water sector emergency preparedness strategy. 10. Provide advice to PWA on equitable and affordable allocation of available water resources to Palestinian communities. 11. Review previous standards within Palestine and international standards for water quality, and supervise the updating of standards for all significant forms of end- use in consultation with the Ministry of Health, the Palestinian Standards Institute and other relevant actors. 12. Develop national policy for non-revenue water reduction. 13. In coordination with other technical assistance programs, particularly the on- going UNICEF program, provide sound advice and assistance to PWA in developing and updating PWA's database as regarding water supply and utilization of water resources. 14. Assess the possibility of, and whenever possible, ensure integration of water supply projects and programs in view of a national water supply scheme, in consultation with the relevant actors. With regards to sanitation: 15. Develop a terms of reference for a survey of the sewage treatment quality and sludge management used regionally and supervise the process of carrying it out. 16. Review, as part of the development of a sanitation strategy, standards within Palestine and of international standards for wastewater management (including those of neighbouring countries), and propose recommendations on standards for use in Palestine, in consultation with the Ministry of Health, Ministry of Agriculture, the Palestinian Standards Institute and other relevant actors. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 68 17. Advise, as part of the sanitation strategy development, on the most appropriate and cost-effective systems (on-site and collective) and technologies for different Palestinian contexts (population density, drinking water consumption, soil permeability, aquifer and topography) and reuse applications. 18. Develop a sludge disposal national policy for West Bank and Gaza. 19. Develop a strategic analysis of wastewater treatment options based on factors of financial cost, running costs, environmental impact, and reuse. 20. Support PWA in the development of a sound wastewater infrastructure plan for Palestine. Finally, considering the current political situation as specific to the Gaza Strip, TPAT shall support the Gaza-based PWA staff in the implementation of a range of ongoing initiatives and reform measures, including the "Gaza Early Recovery and Reconstruction Plan". For this purpose, a specific action plan and work plan shall be elaborated, which will include, but not be limited to, the following: supporting a PWA integration strategy, water resource management strategy (with focus on the number of unlicensed wells and the deteriorated aquifer quality), water supply and wastewater management plans, and the planning of a large-scale desalination facility for the Gaza Strip. With regards to the action plans mentioned above, the implementation and funding of complementary studies and activities will be the responsibility of PWA unless otherwise specified in the present TOR or agreed upon as part of periodic work plan updates. 3. 2.3.3 Activity 3: Technical Assistance and capacity building for effective sector strategy implementation In coordination with PWA directors, and in consultation with other bilateral and multilateral CB/TA programs, the main tasks will include, but not be limited to, the following: 1. Support a Needs Assessment for CB and develop a Work Plan for its implementation; 2. Review, with particular attention to PWA staff and service providers, the needs in the water sector for training and capacity building programs for the update and implementation of the strategies, policies and regulations developed under Component 2 above and develop relevant capacity building programs, action plans and budgets; Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 69 3. Assist with the implementation of the above CB Action Plans, including drafting of additional training/CB Terms of Reference, grant proposals, applications for donor funds, procurement and supervision of CB services and material/equipment; 4. Build PWA capacity to enhance coordination of local and international stakeholders in the Sector; 5. Assess the needs, develop an Action Plan, budget and implement the Action Plan once validated to build PWA's and Service Providers capacity in implementation of investment programs through training, methods and procedures development. This will include: · procurement, financial and technical procedures; · technical specifications (in particular for wastewater treatment systems); · terms of reference for detailed designs and environmental and social impact assessments; · implementation, arrangements and monitoring; · contract management; · technical and financial reporting and audits; and · hand over and funds utilization certification, etc. 6. Review and improve PWA's capacity in legal affairs and support PWA in establishing a functional legal department. This will include: · develop action plan and budget for legal department capacity building and documentation organization, and support its implementation; · provide legal advice on any disputes arising from contracts involving PWA; · provide legal advice on all issue (e.g. MOU) of relevance to the interface between Palestine and other States, including bi-lateral and multi-lateral projects; and · support and coordinate the development of legally robust contracts issued by PWA (grants, technical assistance, partnerships arrangements, commercial contracts, employment and consultant contracts, etc.), including support to the development of model agreements for recurring legal arrangements. 7. Build PWA's capacity in financial modelling towards multi-year planning for capital as well as recurrent budgets; 8. Support building financial management capacity of PWA, water and wastewater service providers, including auditing system, consistently with the on-going GTZ program; Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 70 9. Support PWA staff on economic and financial matters. The sub-sector specific tasks will include, but not be limited to, the following: With regards to water resources management: 10. Review existing groundwater and surface water models, and suggest an appropriate model for the management of the shared water resources. 11. Assist with the development of tools for decision making processes in the management and development of the water resources. With regards to water supply and waste water services: 12. Promote the application of tools for the monitoring of service providers performance as developed under other bilateral TA programs, particularly the GTZ program. With regards to sanitation: 13. Build PWA's technical capacity to assess wastewater collection and treatment facility designs and provide PWA with a set of guidelines and procedures for the management of sanitation facilities. With regards to the action plans mentioned above, the implementation and funding of complementary studies and activities will be the responsibility of PWA unless otherwise specified in the present TOR or agreed upon as part of periodic work plan updates. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 71 Indicative Action Plan: Activities FIRST YEAR SECOND YEAR THIRD YEAR 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 Activity 1: Advisory services and technical assistance to support the implementation of Sector Reform 1.1 ­ Support the CMS in the delineation of capacity building needs outlining the role of the TPAT team as a function of the PWA organizational assessment in line with the new developed/agreed structure of the sector the optimisation of terms of references for components of the Sector Reform as needed, as well as support to procurement and supervision of complementary consultancy services including the OR, the CMS, review of intermediate and final documents assist PWA and the CMS in an initial review of the status of the Sector Reform Program, including all relevant documents, and meetings with individual stakeholders involved in the Reform process assist PWA and the CMS in an assessment and review of Technical Assistance/Capacity Building programs in place and/or planned for PWA and for key sector institutions, as well as the evaluation of their appropriateness the assistance to PWA for the development of a detailed Reform Planning Document for the all Sector Reform processes to optimize the internal coordination and tailoring of the Reform Plan, to be periodically updated the initial update of TPAT work-plan for Activity 1 tasks based on latest developments in Reform implementation at TPAT inception, which should take place within the first nine months after the commencement of the assignment the preparation of succinct monthly Sector Reform status memoranda for PWA, assessing progress on reform processes (monthly) the preparation of semi-annual reports on progress of Sector Reform processes for the benefit of the TPAT Steering Committee and other relevant reform stakeholders Activity 1.2 ­ Support PWA with integrating the revised Water Law and the related Bylaws as developed in the Legislative Review, as well as support and assist in the preparation of regulations and guidelines flowing from the new institutional arrangement and the revised water law periodically assess and provide legal advice on progress made by sector institutions in satisfying the requirements of the amended Water Law, including the design and integration of bylaws, regulations, standards and guidelines, to the extent that the new Water Law clarifies Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 72 the mandate, roles and responsibilities addressing the ambiguities and overlaps of sector institutions provide technical advice to key sector actors (i.e. PWA, service providers, operators, joint service councils and municipalities...) with regards to likely amendments to bylaws and other guidelines in response to the redrafted water law, bylaws, regulations, standards and guidelines Activity 1.3 ­ Support PWA and CMS in defining the rules and interfaces among the sector institutions themselves and other stakeholders including coordination mechanisms in accordance with the new institutional arrangement and needs in accordance with the new structure deriving from the institutional review, revision of monitoring tools necessary for an efficient management interface with service providers, including but not limited to, quality assurance procedures and performance indicators, as well as support in drafting complementary protocols, manuals, and regulations as needed participation in consultation meetings, support to information dissemination with regards to Sector Reform processes among stakeholders assist the PWA in strengthening the consistency and effectiveness of donor coordination and information processes, in coordination with relevant donor working group Activity 1.4 Assist in the development of an Action Plan for the transitional period with the aim of supporting the establishment of a functional institution within the new institutional arrangement which shall ensure the proper implementation of the reform itself and appropriate management of day-to-day activities during the transitional phase of the reform process Activity 1.5 Develop an external communication strategy to promote and inform relevant institutions while supporting the CMS in developing an internal communication strategy to address concerned staff on the Sector Reform. assessment of internal and external communication capacities and the identification of gaps provide guidance and support to the PWA in developing and implementing communications and media strategies in Arabic and English (including research, press relations and other internal and external communications matters) support the establishment of a strengthened communication unit within PWA and provide on job training to a dedicated PWA counterparts Completion of awareness campaigns strategy in Arabic Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 73 provide periodic supervision and support to the implementation of the communication strategy Training programs designed and implemented to PWA leadership enhance their capacity in internal and external communication assist in improving the PWA communication capacity in promoting an equitable and reasonable allocation of trans-boundary water resources Activity 2: support the development and assist the coordination, endorsement and implementation of responsive and adapted water supply, sanitation and water resources management policies, strategies, regulations and investment programs Activity 2.1 ­ support the development and assist the coordination, endorsement and implementation of responsive and adapted water supply, sanitation and water resources management policies, strategies, regulations and investment programs Needs assessment for policies, strategies and action plans in the water and waste water/development of action plan for the implementation of the identified needs Provide constant technical support and on-job capacity building to the waste water department within PWA conduct the review of most-relevant legislation, policies and strategies pertaining to water and wastewater with the aim of identifying problems, gaps and inconsistencies conduct an economic analysis pertaining to the cost of Israeli bulk water supply and wastewater treatment to the Palestinian National Authority in coordination with the Joint Water Committee Unit of PWA review of current water resources and water supply status, identifying major problems and gaps propose and develop/update policies, strategies and regulations pertaining to water and sanitation infrastructure and service provision, according to the two scenarios of the political status evolution described in the Audit, and, as needed, support the PWA in preparation for negotiations within the context of the Joint Water Committee propose a prioritized plan for the development of water and waste water infrastructure, including a budget to help establish feasible and comprehensive investment programs for new infrastructure and the rehabilitation of existing infrastructure ­ enabling the optimization of water resources management ­ including the development of relevant master plans, feasibility studies, environmental studies, social studies, designs, etc support PWA in the implementation of the infrastructure plans mentioned above, including the identification of additional expertise, Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 74 the drafting their terms of reference, grant proposals, applications for donor funding, procurement and supervision of consultancy services 2.2 Support PWA in the revision of existing, or the development of new regulations to ensure service quality, efficient operations and maintenance, sustainable cost recovery and effective regulation by PWA Review the applied and developed tariff guidelines and propose clear and applicable recommendations for the future Assess the water sector financing and cost recovery needs Propose strategies for sustainable financing of the Water Sector 2.3 Identify funding gaps related to the implementation of the regulations mentioned above and in particular for financing of investment needs. The TPAT will support the PWA in discussions with donors on funding needs for a phased ten year program 2.4 Develop a coherent and consensual assessment of the water supply resources available to Palestine, including direct groundwater and surface water withdrawals and bulk water purchases from the national Israeli Company, Mekorot 2.5 Provide feasible proposals towards the increase of fresh water resources in Palestine, taking account of all available regional sources and being prioritised by feasibility and phased over time. This review shall take account of both conventional and non- conventional sources (desalination, wastewater re-use, inter-basin transfers) Develop a needs assessment, an action plan and a budget for the development of an integrated water resources monitoring program, identifying water quality (including the development of a program for water quality monitoring and a protection plan for the water resources), recharge and abstraction in the West Bank and Gaza, which shall include data collection systems and remote sensing 2.7 Assist PWA in the implementation of the action plan, including the identification of additional expertise, the drafting of terms of reference, procurement and supervision of consultancy services 2.8 Assist in the development a terms of reference and supervise a strategic analysis of trans-boundary water resource management reviewing the utilization of trans-boundary water resources, as well as endogenous and non-conventional water resources. As well as supporting the development of a shared water resource management plan that optimizes the benefits for all riparians in accordance with best international practices and in relation to customary international water law Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 75 2.9 Support the development of a water sector emergency preparedness strategy 2.10 Provide advice to PWA on equitable and affordable allocation of available water resources to Palestinian communities 2.11 Review previous standards within Palestine and international standards for water quality, and supervise the updating of standards for all significant forms of end-use in consultation with the Ministry of Health, the Palestinian Standards Institute and other relevant actors 2.12 Develop national policy for non-revenue water reduction 2.13 In coordination with other technical assistance programs, particularly the on-going UNICEF program, provide sound advice and assistance to PWA in developing and updating PWA's database as regarding water supply and utilization of water resources 2.14 Assess the possibility of, and whenever possible, ensure integration of water supply projects and programs in view of a national water supply scheme, in consultation with the relevant actors 2.15 Develop a terms of reference for a survey of the sewage treatment quality and sludge management used regionally and supervise the process of carrying it out 2.16 Review, as part of the development of a sanitation strategy, standards within Palestine and of international standards for wastewater management (including those of neighbouring countries), and propose recommendations on standards for use in Palestine, in consultation with the Ministry of Health, Ministry of Agriculture, the Palestinian Standards Institute and other relevant actors 2.17 Advise, as part of the sanitation strategy development, on the most appropriate and cost-effective systems (on-site and collective) and technologies for different Palestinian contexts (population density, drinking water consumption, soil permeability, aquifer and topography) and reuse applications 2.18 Develop a sludge disposal national policy for West Bank and Gaza Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 76 2.19 Develop a strategic analysis of wastewater treatment options based on factors of financial cost, running costs, environmental impact, and reuse 2.20 Support PWA in the development of a sound wastewater infrastructure plan for Palestine Activity 3: Technical Assistance and capacity building for effective sector strategy implementation 3.1 ­ Support a Needs Assessment for CB and develop a Work Plan for its implementation 3.2 Review, with particular attention to PWA staff and service providers, the needs in the water sector for training and capacity building programs for the update and implementation of the strategies, policies and regulations developed under Component 2 above and develop relevant capacity building programs, action plans and budgets 3.3 Assist with the implementation of the above CB Action Plans, including drafting of additional training/CB Terms of Reference, grant proposals, applications for donor funds, procurement and supervision of CB services and material/equipment 3.4 Build PWA capacity to enhance coordination of local and international stakeholders in the Sector 3.5 Assess the needs, develop an Action Plan, budget and implement the Action Plan once validated to build PWA's and Service Providers capacity in implementation of investment programs through training, methods and procedures development procurement, financial and technical procedures Activity 3.4 ­ support building service provision institution Draft financial, technical and procurement procedures and methods technical specifications (in particular for wastewater treatment systems) terms of reference for detailed designs and environmental and social impact assessments implementation, arrangements and monitoring contract management Needs assessment/ action plan for training and document organization Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 77 hand over and funds utilization certification 3.6 Review and improve PWA's capacity in legal affairs and support PWA in establishing a functional legal department develop action plan and budget for legal department capacity building and documentation organization, and support its implementation provide legal advice on any disputes arising from contracts involving PWA (as per needs) provide legal advice on all issue (e.g. MOU) of relevance to the interface between Palestine and other States, including bi-lateral and multi-lateral projects (as per needs) support and coordinate the development of legally robust contracts issued by PWA (grants, technical assistance, partnerships arrangements, commercial contracts, employment and consultant contracts, etc.), including support to the development of model agreements for recurring legal arrangements 3.7 Build PWA's capacity in financial modelling towards multi- year planning for capital as well as recurrent budgets 3.8 ­ support building PWA and utilities financial management including auditing procedures 3.9 Support PWA staff on economic and financial matters 3.10 Review existing groundwater and surface water models and advice for models for the management of shared water resources 3.11 assist develop tools for decision making in the management and development of water resources 3.12 promote the application of service providers monitoring and evaluation tools 3.13 Build PWA's technical capacity assess wastewater collection and treatment facility designs; and develop a set of guidelines and procedures for sanitation facilities management activities subject to adaptation at month 6 Fixed activities Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 78 IX. 3.0 FORMAT OF TPAT A. 3.1 TPAT Composition TPAT is conceived as a temporary technical assistance (TA) and capacity building (CB) facility, provided by an internationally-recruited firm, and composed of resident, long-term and short-term experts, to support reform implementation, strategic planning, and capacity building in the water sector, particularly PWA over a period of three years. The composition of TPAT will vary over such duration, but will cover the following areas of expertise (CB delivery is an integrated core requirement): · Strategic Planning and Institutional expertise · Legal expertise · Financial Management and Economic Affairs expertise · Water Supply expertise · Sanitation, Waste-water collection, Treatment and Reuse expertise · Integrated Water Resource Management expertise · Internal and External Communications expertise · Additional areas of expertise as needed The consultant, based on his understanding of the TORs and the needs of the Palestinian water sector, shall propose in his work plan and reflect in his financial proposal any additional expertise in fields not mentioned in the TOR for a more efficient intervention. It is expected that the Strategic Planning and Institutional expertise will be provided by one senior TPAT resident expert also performing as Head of the TPAT (chief of party) who will be responsible for leading and coordinating TPAT members, and for delivering on all TPAT objectives, outputs and results as defined in the TOR. TPAT composition, organization, and make-up of long-term and short-term expert assignments will be optimized for flexibility and cost-effectiveness in addressing the needs of dynamic Sector Reform including PWA needs. The scope, timing and duration of individual TPAT expert assignments will be proposed in the original work plan submitted with the bid. Semi-annual updates of the work plan submitted to the Steering Committee (see below) will allow adjusting the levels of effort of individual experts. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 79 Additionally the water and waste water expertise will be provided by one senior TPAT resident expert acting as a chief of technical staff. In order to promote the empowerment and accountability of PWA line managers, and following the initial needs assessment stages, TPAT should consider favourably medium term and short term assignments over long term ones while meeting the objectives. In its last year, individual TPAT assignments will be structured so as to promote effective handover of TPAT tasks and responsibilities to PWA managers. TPAT experts will work as a closely-knit team, distributed within PWA in the West Bank and in the Gaza Strip, with full internal coordination, under the leadership of the Head of the TPAT. The long-term experts will each have at least one senior and one or more junior counterparts from the permanent PWA staff pool, to be designated in coordination with the Head of the PWA. They will work alongside their PWA counterparts on a daily basis, providing on-the-job training and capacity building in all areas addressed by the TPAT as a whole. It is expected that in order to access a broad, tailored and adaptable mix of skills, TPAT will be provided by an international consulting firm. B. 3.2 TPAT modalities Funding: The TPAT will operate under a consolidated budget managed by PWA and co-financed by Agence Française de Développement (AFD), the Swedish International Development Agency (Sida), and the World Bank (WB). TPAT reporting and oversight: TPAT will report to the Head of PWA, through a designated member of PWA's Reform Co-ordination Unit (RCU). The RCU will also ensure day to day support and oversight of TPAT, review its outputs and administer its contract. TPAT reporting outputs may be utilized by the PWA to inform the Reform Steering Committee appointed by the Council of Ministers. Further, TPAT team might be requested to perform ad-hoc presentations to the RSC. Formal supervision by the donors will take the form of semi-annual missions to assess progress, address implementation issues, and review key outputs and work plan updates. Communications and reporting to donors will be through the PWA. Location: Despite limited office space availability, and in order to promote integration of TPAT experts within PWA, facilitate know-how transfer and on-job capacity building, PWA will provide dedicated or shared office space for TPAT Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 80 experts within PWA headquarters. Rental of overflow office space for some PWA staff will be secured under the Project. The office space in PWA headquarters in Ramallah will be equipped with fixed land line for in-country calls and internet access A regular and active interface shall be established between the TPAT and the PWA staff in Gaza. To that effect, TPAT experts will routinely conduct missions to Gaza. As regarding trips to Gaza PWA will support directly and/or through donors the coordination for experts access. Office space will not be secured by PWA in the Gaza Strip. Donor coordination: as mentioned above, a programme steering committee (SC) composed by PWA, SIDA, AFD and the WB will hold semi-annual meetings for updates regarding the progress and action plan for the upcoming six month, where the head of the TPAT team will perform a presentation. Furthermore, TPAT will operate in close coordination with other bilateral and multilateral TA and CB facilities where available, and other water sector actors in the West Bank and Gaza, in order to support the achievement of the components of a broad Sector Reform, including but not limited to: IWSR, LR, and the OR: Complementary sector reform TA and CB programs funded by bilateral and multilateral donors to the water sector (e.g. JWC Unit, regulation and operations- focused TA provided by GTZ, operations and maintenance TA/CB provided by USAID, etc.); and Change Management TA implementing specific reorganization and CB recommendations of the OR. Implementation schedule: The implementation of the activities outlined in the scope of work should commence immediately after the signing of the contract and be carried out over the three years period as outlined in the below table. The consulting team is permitted to submit revisions to the implementation schedule as required to successfully carryout the work as detailed in this ToR to the Head of PWA. The submittal shall be reviewed by the Head of the PWA and is then subject to approval. The implementation schedule shall be reviewed for the purpose of benefiting from routine updates, every six months or as needed, and shall include detailed implementation schedule and resources utilization. A measure of flexibility will apply Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 81 for TPAT to assist PWA on additional (i.e. ad-hoc) tasks that are not included in the approved work plan, but such efforts shall not exceed 5% of billable time for any monthly invoicing period. Project Implementation Schedule The TPAT program is comprised of two main components: 1. Fixed Component A. The core competency needs identified upfront include: (1) strategic planning and institutional development expertise; and (2) sanitation, waste-water collection, treatment and reuse expertise. These expertise align with the fixed outputs detailed in this ToR and are applied to the full duration of the 3-year programme. B. An assessment of PWA technical capacity needs shall be carried out, after the preferred institutional arrangement (IWSR) is approved by the Cabinet of Ministers, as an adaptive measure to realign the capacity needs as required. The assessment shall be used to inform the development of a Work Plan for submission to the PWA for approval. 2. Adaptive Component A. Based on the TPAT Work Plan additional capacity building expertise shall be deployed to compliment the core competency expertise as outlined in the plan. Reporting (this does not cover documents generated performing the various task within the assignment): The head of the TPAT on behalf of the TPAT team shall be responsible for producing and submitting the following reports (in soft and hard copy) and documents in accordance with the reporting requirements outlined in Table below to the Head of the PWA: Report Due/# Copies Reports 21 Review Programme for the first 6 months (RPP) 2 weeks after 4 (draft) It shall outline the proposed methodology to be used for the various reviews, signing the 10 (final) particularly the Sector Reform Program, TA and CB programs, laws, contract. internal and external communication including donor coordination. The report is subject to approval. Inception Report (IR) By the First 4 (draft) It shall provide a summary of the negotiated work plan and describe 3 month of 10 (final) mobilization issues arranged by the consultant. It shall provide an update to the 21 The number of reports included to be seen as indicative Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 82 the TOR in specific relation to the planned tasks (including the Needs assignment Assessment and Action Plan for the Adaptive Component of the programme), fixed outputs, schedule, general organization of the project, reporting and monitoring procedures, and an update on the financial and manpower resources. It shall include as well a proposal for table of contents in Progress Reports, expected to include, inter alia, progress of work, difficulties encountered, cash flow, cost projections, program updates, upcoming events, coordination issues, submittal status, variations and other items as required. Subject to approval: PWA shall provide comments to the report within two weeks, where the consultant shall integrate them within one week. If comments are not provided by PWA within two weeks the IR is to be considered approved. Monthly fact sheet Monthly 4 copies It should include key issues regarding progress, difficulties encountered and (#35) financial projections. Assessment report (adaptive component): it should include the various Within the 4 copies assessments within the TOR such as water resources assessment, water first 6 4 (final) supply, internal and external communication, CB programs, and financial months (#1) contracts. Subject to approval: PWA shall provide comments to the report within two weeks, where the consultant shall integrate them within one week. If comments are not provided by PWA within two weeks the Assessment is to be considered approved. Work plan (adaptive components): it should include the identification of Within the 4 copies outputs (adaptive component) as a result of the 6-month assessment and an first nine 4 (final) implementation schedule. Subject to approval: PWA shall provide comments months (#1) to the report within two weeks, where the consultant shall integrate them within one week. If comments are not provided by PWA within two weeks the Work Plan is to be considered approved. Quarterly Progress Report Quarterly ( 4 copies It should include a general summary of the work and activities completed #11) 4 (final) during the 3 month, problems encountered, and issues resolved. It shall also include the contents outlined and agreed in the inception report. The report shall be concise (not more than 6 pages), and submitted to the Head of the PWA. The quarterly report covers the preceding month. Ad Hoc Reports Un Specified 4 copies These are special reports which are not scheduled in the Work plan but at this stage 4 (final) which may be called for in response to unforeseen circumstances which may (# 10) arise during the implementation of the services and require immediate action by PWA or third parties on important technical findings or the future of the project. The Consultant shall prepare such reports on his own initiative or at the request of the Head of the PWA. Such reports shall be deemed to be parts of subsequent Biannual or other reports and shall be included therein. Semi-annual progress reports Semi-annual 4 draft The draft semi-annual progress report shall be presented to the PWA. The (# 5) 10 final PWA shall provide comments within a maximum of one month which incorporates any comments provided by the SC. The report shall include a thorough revision of the semi-annual work plan, to not only reflect the progress made during the past 6 months but also include the proposed outputs for the next semi-annual period. The consultants shall provide the final report which incorporates the comments of the SC within a week after receiving the SC feedback. The final report will be used by PWA to inform the RSC on the progress made over the period covered by the semi-annual report. A Final Report: This report shall include the full results of the work carried By the last 4 draft out by the Consultancy firm. This reports shall be submitted first in "draft'' month of the 10 final form by the end of the programme reviewed and commented upon by the assignment PWA within 30 days of its receipt. A revised version of the report has to be submitted by the consultancy firm within 30 days. If no comments on the final report are provided by PWA within 30 days, the final is to be considered accepted. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 83 As part of the overall Sector Reform to be implemented by PWA, and as illustrated in the introductory timeline, certain Sector Reform processes will not have been defined or decided at the time of TPAT launch. Since the results of IWSR, Legislative Review and Organizational Review have the potential to impact the requirements for Activity 1 tasks, the TPAT work plan and composition may have to be updated accordingly. Reporting Details: Progress reporting (semi-annual progress report) - Reports shall be submitted in draft form within one week of the end of the reporting month. It will be reviewed by PWA and shared with the SC for the purpose of providing comments; it shall be forwarded to the consultant within a maximum of one month in order to allow the consultant to finalize it for each reporting period. - The reporting language shall be English, provided that all products related to legislations (bylaws and regulations) are to be translated in Arabic. - The report shall include but not be limited to the following: · Executive summary; · Introduction; · Description of activities performed compared to the agreed work plan; · Uncompleted activities and the obstacles to completion; · Suggestions to overcome obstacles; · Recommendations for modifications of activities; · Projected outputs and implementation schedule for the following semi-annual period; · Description of the staff involvement in terms of duties and duration; · Financial report; · Conclusions and recommendations; and · Minutes of meetings. Final Report: Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 84 The report shall include the full results of the work carried out by the Consultancy firm over the period of assignment. - Report shall be submitted in draft by the end of the assignment. It will be reviewed by PWA within 30 days and shall be forwarded to the consultant in order to produce the final report. Within the following 30 calendar days the consultant shall submit a revised version, where PWA will have 30 calendar days. If PWA within 30 calendar days the final is considered accepted. - The reporting language shall be English. - The report shall include but not limited to the following: · Executive summary; · Introduction; · Description of activities performed compared to the agreed work plan; · Uncompleted activities and the obstacles to completion; · Report against milestones, and agreed deliverables; · Description of the staff involvement in terms of duties and duration; · Final Financial report; · Conclusions and recommendations including weakness and gaps that requires follow up; and · Any other relevant documentation. Property of documents, materials, software and equipment: All material printed or digitized that the employer provides the consultant with or to be produced by the consultant under this TA assignment, and all software and equipment purchased by the consultant for the purpose of this assignment shall be used by the consultant throughout the period of validity of the contract. It is prohibited to use or distribute such information of materials without a prior written approval of the employer. C. 3.2 Funding of action plan tasks outside of TPAT scope The action plans developed and recommended by TPAT (e.g. for the development of strategies, capacity building, investment programs, etc.) will include studies and activities not funded under TPAT. Funding of such studies and activities will be the responsibility of PWA unless otherwise specified in the present TOR or agreed upon Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 85 as part of periodic work plan updates. Nevertheless, the TPAT team will be responsible for support in drafting the relevant ToR and in the implementation supervision of such studies. However, in order to promote reform outcomes through the accelerated and full implementation of such action plans, the establishment of dedicated funds is under consideration by PWA and its donor partners. These funds may include: · A Consultancy Fund dedicated to strategic and/or urgent assignments including master plans, feasibility studies, bidding assessments, etc.; and · A Training and Capacity Building Fund dedicated to training events, education grants, capacity building seminars, handbook and guidelines developments, study tours, etc. Potential relevant studies · Comparative analysis of freshwater sources provision in Gaza Strip which considers the various options such as the construction of large scale sea desalination plant, medium and small scale desalination, water transfer and water purchase etc.; and · Potential pre-feasibility and feasibility study of the preferred option recommended in the comparative analysis of freshwater source provision in Gaza Strip; · Pre-feasibility study for the construction of a fresh water carrier in the West Bank; and · Feasibility study for the construction of a national fresh water carrier (West Bank ­ Gaza Strip). X. 4.0 STAFFING AND QUALIFICATIONS REQUIREMENTS FOR TPAT Required qualifications for the seven core areas of expertise are described below. The estimated number of staff-months required for each area of expertise is: · Strategic Planning and Institutional expertise (team leader): 33 over 36 months; · Legal expertise: 13 over 36 months; · Financial Management and Economic Affairs expertise: 17 over 36 months; Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 86 · Water Supply expertise: 22 over 36 months; · Sanitation, wastewater collection, treatment and reuse expertise, also serving as senior TPAT technical expert (technical focal point and deputy team leader): 33 over 36 months; · Water resource management expertise: 18 over 36 months; and · Internal and external communications expertise: 12 over 36 months. · Additional areas of expertise: 24 over 36 months Note: The consultant may develop equivalent alternate staffing plans, using a combination of senior and mid-level expertise, as seen fit by the consultant and in coordination with the PWA. However this is optional and encouraged but will not be considered for the evaluation of the proposals. Strategic Planning and Institutional expertise (Head of the TPAT) Required qualifications are: · A graduate degree in planning, engineering, water resources management, economics, or other relevant field; · 20 years of experience in the water sector; · Experience in on-job capacity building · Experience in strategic planning advisory roles, including for the development of national water sector strategies; · Experience in management or reform of water sector institutions; · Experience in implementing similar assignments as a team leader; · Experience in regulatory issues in the water sector, including tariff setting, is a plus; · Experience in the Middle East and other developing countries; · Interpersonal and communications skills; and · Fluency in English and working Arabic. Legal expertise Required qualifications are: · A graduate degree in law; preferably specialized in domestic water law and preferably international water law · 15 years of experience in general legal issues, including specific experience related to the water and wastewater sub-sectors and government institutions; Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 87 · Experience in on-job capacity building · Experience in the Middle East will be an advantage; · Interpersonal and communications skills; and · Fluency in English and working Arabic. Financial Management and Economic Affairs expertise Required qualifications are: · A graduate degree in finance or economics; · 15 years experience in financial and/or economic analysis, financial management and regulation of utilities, as well as experience with government institutions; · Experience in on-job capacity building · Experience in the Middle East and other developing countries situation; · Interpersonal and communications skills; and · Fluency in English and working Arabic. Water Supply expertise Required qualifications are: · A graduate degree in water supply engineering or equivalent engineering degree; · 15 years of experience in water supply engineering and project management with experience in government institutions; · Experience in on-job capacity building · Experience in water supply planning, management and advisory experience, including for the development of national water sector strategies and policies; · Experience in public water service provision; · Work experience in the Middle East and in other developing countries; · Interpersonal and communications skills; and · Fluency in English and working Arabic. Sanitation, Wastewater Collection, Treatment and Reuse expertise Required qualifications are: · A graduate degree in water and wastewater engineering or the equivalent engineering or science degree; · 20 years of experience in wastewater related issues, including planning, designing, managing, and operating; Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 88 · Experience in on-job capacity building · Experience in the Middle East and in other developing countries; · Interpersonal and communications skills; and · Fluency in English and working Arabic. Water Resources Management expertise Required qualifications are: · Graduate degree in water resources management; · 15 years experience in Water Resources Management, with substantial experience in international waters and quantitative hydrology; · Experience in on-job capacity building · Experience in assessment of climate change impacts and mitigation measures of water resource management; · Experience in the Middle East and in other developing countries; · Interpersonal and communication skills; and · Fluency in English, working Arabic. Internal and External Communications expertise Required qualifications are: · Degree in Public/International Relations, Communications, or equivalent degree; · 15 years of media, communications and public relations experience, including specific experience with designing and implementing a communications and media strategy for a government institution; · Experience in on-job capacity building and in performing trainings capacity · Experience in CB needs assessment, nonetheless this experience could be with the experience of other members of the team and/or integrated under additional expertise below. · Experience serving as a press secretary, including drafting "op-eds" and preparing speeches and talking points for government officials; · Experience in the Middles East with specific experience relating to Palestine is an advantage; · Interpersonal and advanced communication skills; · Knowledge of water and wastewater issues a plus; and Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 89 · Fluency in English and Arabic, and Hebrew is a plus. XI. 5.0 TPAT OUTPUTS AND TASK TIMELINE AND RESONSABILITIES The outputs outlined in the table below should be implemented in accordance with the tentative action plan under section 2. Outputs Timetable Responsibility the optimisation of terms of references for components of the Sector Reform as TPAT needed, as well as support to procurement and supervision of complementary by the first 6 consultancy services including the OR, the CMS, review of intermediate and months final documents the initial update of TPAT work-plan for Activity 1 tasks based on latest TPAT by the first 9 developments in Reform implementation at TPAT inception, which should take months place within the first nine months after the commencement of the assignment in accordance with the new structure deriving from the institutional review, TPAT&RCU revision of monitoring tools necessary for an efficient management interface with service providers, including but not limited to, quality assurance procedures by the first year and performance indicators, as well as support in drafting complementary protocols, manuals, and regulations as needed By the first nine TPAT, CMS All assessment and their related implementation plans under objective one shall months in line with be produced the reform schedule All of the assessment under and their related implementation plans under by the first 9 TPAT objectives two and three shall be produced months Training programs designed and implemented to PWA leadership enhance their by the first five TPAT capacity in internal and external communication month All reviews under objective two and three conducted By the first nine TPAT months a prioritized plan for the development of water and waste water infrastructure, TPAT & PWA including a budget to help establish feasible and comprehensive investment By the first 18 programs for new infrastructure and the rehabilitation of existing infrastructure month produced ToRs for the sub-studies under objectives two and three produced TPAT & PWA By the 18 month Water sector emergency preparedness strategy developed TPAT By the first 6 month Standards for water quality adapted to the context are developed TPAT & PWA & By the first 6 month MoH & PSI Assessment of the possibility of, and whenever possible, ensure integration of TPAT By the first two water supply projects and programs in view of a national water supply scheme, years in consultation with the relevant actors Policies, strategies, guidelines under results two and three developed By the first two TPAT & PWA years XII. These outputs, deliverables are of vital importance for the success of the assignment. Therefore, due to quality and timely implementation of those, deliverables will be subject a performance based payment scheme as described in section 6 of the special conditions (SC) of the consultant's contract. XIII. XIV. 6.0 ANNEXES 6.1 The Roles and Responsibilities of the Water Authority as Defined in the Water Law No 3 of 2002. 6.2 The Roles and Responsibilities of the National Water Council 6.3 List of Capacity Building and Training Programmes during the period of 2006 until 2010 6.4 Abbreviations and Acronyms Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 90 Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 91 A. ANNEX 6.1 The Roles and Responsibilities of the Water Authority as Defined in the Water Law No 3 of 2002 i) At present the Palestinian Water Authority (PWA) has a range of duties, which are defined in Articles 6, 7, 14, 15, 16 and 17 of the Water Law No 3 of 2002. ii) Article 6 declares that the Head of the PWA will be appointed by the Chairman of the PNA as well as reaffirming that the permanent headquarters of the PWA should be based in Jerusalem. iii) Article 7 defines the tasks and responsibilities expected from the PWA. These are detailed below: 1. The PWA shall have full responsibility for managing [the] water resources and wastewater in Palestine. 2. Setting the general water policy and working to implement it in coordination with the relevant parties, and presenting periodic reports concerning [the] water status to the National Water Council. 3. Surveying the different water resources, and suggesting allocations of water and determining the priorities of usage. 4. Creating reservation areas for protection from pollution, and exercising oversight and supervision over such areas. 5. Approval for transfer of water between the different geographic areas. 6. Licensing the exploitation of water resources including the construction of public and private wells, regulating them, water exploration, drilling exploratory, testing and production wells, and any other matters or activities relating to water or wastewater, in cooperation and coordination with the relevant parties. 7. Studying water and wastewater projects, and projects that integrate them, and setting design standards, and quality assurance, and technical specifications, and work to control its implementation. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 92 8. Rehabilitating and developing water departments for bulk water supply at the level of the different national governorates. Considering them national water utilities, and setting their tasks and responsibilities in accordance with regulations that are issued by the Cabinet of Ministers for this purpose. 9. Coordination and cooperation with the relevant parties to set plans for regulating the use of water., and preventing wastage, and conserve consumption, and carrying out public awareness campaigns regarding this aspect. 10. Supervising the profession of well drilling and qualifying contractors in the field of constructing water facilities in accordance with procedures that are set by the law. 11. Setting plans and programmes for training the technical staff working in the water sector to develop the management of water resources and supervise its implementation and development. 12. Working towards achieving a fair distribution and optimal utilisation in order to ensure the sustainability of ground and surface water resources through cooperation and coordination with the relevant parties and finding solutions and suitable alternatives in case of emergency. 13. Regulating and supervising research and studies relating to water and wastewater, and following up with the concerned and specialized parties. 14. Rehabilitating the centres for research, studies and training working in the water sector in accordance to the procedures to be set up by the regulations referred to in paragraph 8. 15. Participating in setting approved standards for the water quality for the different usages in cooperation with the relevant parties and insuring promulgation. 16. Working to develop and coordinate programmes for international, regional and bilateral technical cooperation in the field of water resources; holding conferences and seminars, and representing Palestine in regional and international meetings in this field. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 93 17. Preparing draft laws and regulations and issuing directives concerning water resources and executing them, and giving opinions with regard to the technical aspect in all disputes relating to water resources. iv) Chapter Four, Article 14 defines the methodology for the selection and appointment of the Head and Deputy Head of the Water Authority. 1. The Chairman of the PNA shall appoint by presidential decree, based on the recommendation of the National Water Council, a Head and Deputy Head of the Authority, from among those with experience, specialisation and competence in the field, and it shall be determined in the decree the employment level for both of them. 2. The Deputy Head shall carry out the tasks and responsibilities delegated to the Head during his absence or when his position becomes vacant. v) Chapter 4, Article 15 defines the tasks and responsibilities of the Head of the PWA. 1. Organising and managing the Authority and supervision of all of its employees, and its different directorates. 2. Preparing the budgets and the financial reports and presenting them to the official bodies to approve, and confirm them in accordance with proper procedures. 3. Implementing the decisions of the National Water Council. 4. Signing water agreements on behalf of the government, in accordance with the provisions of the prevailing laws and regulations. 5. Participating in activities aimed at improving regional and international cooperation in the field of water and wastewater. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 94 6. Preparing periodic reports about the activities of the Authority, and its level of performance, and suggesting solutions to confront the difficulties and obstacles facing the progress of the work. 7. The Head of the Authority may delegate some of his tasks to his deputy. vi) Chapter 4: Article 16 defines the roles of International Advisors. 1. The authority may appoint an advisor or a group of advisors for carrying out its tasks. 2. The Authority may use advisors or experts representing the different sectors to carry out its tasks whenever it is necessary to do so. 3. It is not permitted for any of the advisors or their relatives to the second degree, to have any interest in any matter that is presented to them for their opinion. vii) Chapter 4: Article 17 defines issues of Secrecy for Water Authority staff. 1. The employees of the authority and its advisors shall be bound to the instructions that are issued with respect to maintaining the secrecy of information and the obligation not to publish them in the field of water or any other field that is delegated to them. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 95 B. ANNEX 6.2 The Roles and Responsibilities of the National Water Council as Defined in the Water Law No 3 of 2002 i) At present the National Water Council (NWC) has a range of duties, which are defined in Articles 8 to 13 of the Water Law No 3 of 2002. ii) Article 8 First: The National Water Council shall be composed as follows: 1. The Chairman of the Palestinian Authority (Chairman) 2. The Minister of Agriculture (Member) 3. The Minister of Finance (Member) 4. The Minister of Health (Member) 5. The Minister of Local Government (Member) 6. The Minister of Planning and International Cooperation (Member) 7. The Head of the Environmental Quality Authority (Member) 8. The Head of the Water Authority (Member) 9. The lord Mayor of the Capital (Member) 10. A Representative for Chairman of the Union of Local Authorities (Member) 11. A Representative for the Palestinian Universities (Member) 12. A Representative for the Water Unions and Societies (Member) 13. A Representative for the Regional Utilities (Member) Second: The Council shall select among its members a vice - Chairman. Third: The Head of the Authority shall be the secretary of the Council. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 96 Fourth: The representatives of the private sector shall be selected on the basis of experience, specialization, and competency in this field, and they shall be appointed by a decision from the Chairman of the Palestinian National Authority. Fifth: the period of a membership of the representatives of the non-governmental sector shall be two years and this period may be extended once. iii) Article 9 The Council shall carry out the following tasks and responsibilities: 1. Sanction the general water policy. 2. Sanction the policy for development and utilization of water resources and the different usage. 3. Ratify plans and programs aimed at organizing the usage of water, the preventing wastage, and directing consumption. 4. Ratify the tariff policy. 5. Confirming the allocation of funds for investment in the water sector. 6. Approving the periodic reports concerning the activities of the Authority and its work. 7. Approving the Authority's guidelines and confirming the internal regulations that govern its administrations and operations. 8. Confirming the appointment of the board of directors of the regional utilities. 9. Approving the annual budget of the Authority and presenting it to the Council of Ministers to confirm it. 10. Implementing the financial regulations prevailing in the Palestinian National Authority. 11. Any other tasks which are delegated to it according to the provisions of this law. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 97 iv) Article (10) 1. The Council shall meet at the invitation of its Chairman at least once every six months. An emergency meeting may be held at the request of the Chairman of the Council or four of its members whenever necessary. The meeting shall be chaired by the Chairman, or by the vice chairman in his absence. 2. For the validity of the meetings of the council, at least 8 members must be present including the Chairman of the Council or the vice chairman. The decisions of the Council shall be issued by a majority of the present members and, where the votes are equal the side including the Chairman or the vice ­ chairman shall have a deciding vote. 3. The Secretary of the Council shall have the task of preparing the agenda for the meetings of the Council, for issuing the written invitations, and for drafting its resolutions and implementing them. v) Article (11) The Council may utilize the services of experienced and specialized experts, and consultants, and technical. vi) Article (12) The Council may form, from among its members, one or more committees, permanent or temporary, to which it shall delegate some of its tasks or responsibilities, or assign to such committee a specific task and report about it. vii) Article (13) 1. No member of the Council, nor any employee of the Authority may be a party in any contract, including contracts for purchases of necessities, or bids for carrying out works that the Authority is party to, nor may such a person work Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 98 in these projects or works or obtain any profit or material benefit from it directly or indirectly, except for the salaries and bonuses that he receives from his employment with the Authority, or for his participating in any of the tasks that are delegated to him according the provisions of the Law and the regulations issued with regard to. 2. If any member of the Council, of any employee of the Authority violates the provisions of subsection (1) of this article, he shall be subject to the legal sanctions and procedures, and will be required to return all the sums that he obtained as a result of this violation, in addition to paying compensation for the losses or damages to the Authority or to any party who has suffered as a result of his violation. Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 99 C. ANNEX 6.3 LIST OF CAPACITY BUILDING AND TRAINING PROGRAMMES FOR THE PERIOD OF 2006 UNTIL 2010 No. Program Description Objectives Donor Place Comment Period 1 Technical Assistance for Managing · Support donors coordination Germany (GTZ) West Bank Focus on service provision 2010 ­ 2012 and Coordinating Training in the · Support the JWC unit within PWA through municipalities and Continuation of the Water Sector in Palestine. service providers. programme · Support strategy development · Support service providers and training providers for professional and technical through training 2 Capacity Building in Water Resource Improve Water supply system and sewage technology Japan Jordan Regional programme, training 2010-2012 Management for Palestinian It includes training on: Operational & Maintenance of International focused. continuation of waste water supply networks ­ 2 pilot training, Non Cooperation previous programme Revenue Water, Operation & Maintenance of Deep wells, Agency (JICA) Observation and study tour for Managerial, Advance Non Revenue Water, GIS and Water Meter Maintenance 3 Tools & Principle for Long Terms Training Program Exact Jericho Water Resources Training Cooperation water resources planning Program programme 4 On Line Courses Capacity Building UNESCO Gaza Service Oriented Management Open programme for Irrigation System West Bank Integrated River Basin Management West Bank Ecological Sanitation Gaza Public and Private Partnership in the water sector Technical course on wastewater treatment and disposal of HYDROAID Gaza Hydro aid Distance Program on Urban solid Waste Sanitation InWEnt - Gaza Organization Development Open programme Germany 5 Capacity Building Program Capacity Building Program Austrian West Bank The assessment of the (14/4-26/5)/2010 Government wastewater needs in Rural area Jordan Field visit for the waste water (25/6-1/7)/2010 treatment plants in Jordan Gaza Institutional Setup on use of On going Non-conventional water resources ­Reuse of Treated Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 100 Wastewater, Management of storm water Harvesting in the Gaza Strip 6 Waste Water Treatment and Training Program MEDRC Israel Training Program 25-30/7/2010 Infiltration of treated effluent 7 In ­Depth Training Course on Training Program MEDRC Israel Training Program 1-5/8/2010 Desalination for Palestinians 8 Institutional Water Sector Review Revise the institutional set up of the water sector Norway West Bank & Gaza Contracting process 2010 management and the by laws governing water management 9 Establishment of Technical Planning To support PWA in building regulations, planning and World Bank, West Bank & Gaza Preparation process 2010-2012 and advisory committee (TPAT) master planning AFD, SIDA 10 Water governance programme in the Review of the IWRM plan 2003, UNDP/GWP WBG Processing TOR 2010-2013 Arab region 10 Open Programme Infrastructure projects with accompanying measures that Germany WBG Areas of intervention: 2010-2014 are: institutional set-up and capacity building within the KFW Aqraba Cluster beneficiary area. Wadi Zomer in partnership with GTZ 11 Assistance programme Waste water in Gaza City Germany GS Support to CMWU 2010-2012 KFW 12 Finish programme Infrastructure projects with accompanying measures that Finland WB Area of intervention: North-East 2010-2012 are: institutional set-up and capacity building within the Jerusalem Villages beneficiary area. 13 AFD programme Infrastructure projects with accompanying measures that France WB Area of intervention: 2010-2011 are: institutional set-up and capacity building within the AFD Bethlehem Industrial zone beneficiary area. (supporting the WSSA) Tubas, Maithaloun and Tamoun 14 USAID water and sanitation Infrastructure projects with accompanying measures that USA WBG 2009-2011 programme are: beneficiary providers focus in the capacity building USAID 1 Capacity programme Will focus on sustainable provision of masses of GTZ/EC WBG 2011-2013 technicians and engineers 2 Training in negotiation Provide Training to Palestinian stakeholders water on Arab Water WBG Open negotiations skills Academy Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 101 D. ANNEX 6.4 ABBREVIATIONS AND ACRONYMS AfD Agence Française de Développement (French Development Agency) DfID Department for International Development (UK) EQA Environmental Quality Authority EU European Union GOI Government of Israel GTZ Deutsche Gesellschaft für Technische Zusammenarbeit GmbH (German Society for Technical Cooperation) WB World Bank ICA Israeli Civil Administration ICRC International Committee of the Red Cross IWRM Integrated Water Resources Management JSC Joint Service Council JWC Joint Water Committee JWU Jerusalem Water Undertaking NWC National Water Council MOA Ministry of Agriculture MOF Ministry of Finance MOH Ministry of Health MOJ Ministry of Justice MOLG Ministry of Local Government MOPAD Ministry of Planning and Development MOPH Ministry of Public Works and Housing NGO Non-governmental Organization PLO Palestine Liberation Organization PMU Project Management Unit PNA Palestinian National Authority PWA Palestinian Water Authority SIDA Swedish International Development Cooperation Agency TOR Terms of Reference UNDP United Nations Development Program UNEP United Nations Environmental Program UNICEF United Nations International Children's Emergency Fund UNRWA United Nations Relief and Works Agency (for Palestinian Refugees in the Near East) USAID United States Agency for International Development WBWD West Bank Water Department WRM Water Resources Management WSSA Water Supply and Sewerage Authority Water Sector Reform PWA Terms of Reference, TPAT - FINAL Page 102 This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. 0 2.5 5 10 CP KILOMETERS CP CP Jenin CP CP CP CP CP Tubas Tulkarm CP CP CP Mediterranean CP CP CP CP Sea ISRAEL CP CP CP CP Nablus CP CP CP CP CP Qalqiliya CP CP CP CP CP CP CP CP CP CP CP CP Salfit CP JORDAN CP CP CP WEST BANK AND GAZA WATER SECTOR CAPACITY BUILDING CP CP PROJECT CP CP CP Ramallah CP ISRAELI WELLS CP CP SPRINGS CP CP WELLS CP CP CP CP CP MAIN CITIES CP CP CP CP CP Jericho CP CP CP CHECKPOINTS CP CLOSURES Jerusalem CPCP CP BARRIER ISRAEL CP LINEAR CLOSURES CP CP CP CP RESTRICTED ROADS CP CP CP CP CP Bethlehem CP CLOSED AND RESTRICTED AREAS: CP ISRAELI MILITARY BASES AND AREAS CP CP EXISTING AND PROJECTED "CLOSED AREAS" BEHIND THE BARRIER CP CP ISRAELI SETTLEMENTS: OUTPOSTS CULTIVATED LAND CP MUNICIPAL AREAS CP CP CP BUILT-UP AREAS' OUTER LIMIT, BUILT-UP AREAS CP CP PALESTINIAN SETTLEMENTS: Hebron BUILT-UP AREAS CP CP CPCP CP CP CP Dead Sea OSLO ACCORD AREAS: CP "A" AREAS CP "B" AREAS "C" AREAS NO-MAN'S LAND AREAS PROJECTED NATURE RESERVE ARMISTICE DEMARCATION LINES, 1949 CP MARCH 2011 IBRD 38430 ADMINISTRATIVE BOUNDARY CP ISRAEL INTERNATIONAL BOUNDARIES CP Sources: OCHA-oPT IBRD 38431 This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. ISRAEL Erez Crossing point NORTH GAZA for people P P P P P P P P P P PP P P P P P Mediterranean P P P P Sea P P P Nahal Oz Crossing point GAZA for fuels Karni Crossing point P P for goods P P P P P MIDDLE AREA ISRAEL P P P WEST BANK AND GAZA WATER SECTOR CAPACITY KHAN YUNIS P P BUILDING PROJECT P P ELECTRIC POWER STATION WASTEWATER TREATMENT PLANTS WATER TREATMENT PLANTS P P R A FA H WATER WELLS A. R. P PUMP STATIONS EGYPT CROSSING POINTS Sufa BUILT-UP AREAS Rafah REFUGEE CAMPS Airport International Both used as alternative GOVERNORATE BOUNDARIES terminal for crossing points for commercial passengers ARMISTICE DEMARCATION LINES, 1949 and humanitarian goods Kerem Shalom INTERNATIONAL BOUNDARIES Sources: OCHA-oPT MARCH 2011