Document of The World Bank FOR OFFICIAL USE ONLY Report No: 58791-AR PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN IN THE AMOUNT OF US$200 MILLION TO THE ARGENTINE REPUBLIC FOR THE SECOND NORTE GRANDE WATER INFRASTRUCTURE PROJECT March 7, 2011 Sustainable Development Department Argentina, Paraguay and Uruguay Country Management Unit Latin America and the Caribbean 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 Bank's Policy on Access to Information. CURRENCY EQUIVALENTS (Exchange Rate Effective March 1, 2011) Currency Unit = Argentine Peso AR$1.00 = US$0.248 US$1.00 = AR$4.03 FISCAL YEAR January 1 ­ December 31 ABBREVIATIONS AND ACRONYMS AGN National Audit Institution MPF Ministry of Federal Planning, Public (Auditoría General de la Nación) Investment and Services (Ministerio de BNA National Bank of Argentina Planificación Federal, Inversión Pública y (Banco Naciónal de Argentina) Servicios de Nación) BP Bank Procedures NBI Basic Unsatisfied Needs (Necesidades CAS Country Assistance Strategy Básicas Insatisfechas) CAF Corporacion Andina de Fomento (Andean NCB National Competitive Bidding Development Corporation) NG Norte Grande CF Consultation Framework NGO Non Government Organization CMU Country Management Unit NGR Norte Grande Region CO Country Office OECD Organization for Economic Co- CPS Country Partnership Strategy operation and Development DA Designated Account O&M Operation and Maintenance EA Environmental Assessment OM Operations Manual EIA Environmental Impact Assessment OP Operational Policy EMP Environmental Management Plan PAD Project Appraisal Document ESMF Environmental and Social Management PDO Project Development Objective Framework PROSAP- Second Provincial Agricultural ETS Environmental Technical Specifications II Development Project FAP Fiduciary Action Plan PTA Participation, Transfer and FM Financial Management Maintenance of Works Agreement FMR Financial Management Report RP Resettlement Plan FY Fiscal Year RPF Resettlement Policy Framework GDP Gross Domestic Product SA Social Analysis GoA Government of Argentina SBD Standard Bidding Document HQ Headquarters ­ Washington, D.C. SEPA Procurement Plans Execution System IADB Inter-American Development Bank (http://www.iniciativasepa.org ) IAU Internal Audit Units SIDIF Integrated Budget and Accounting IBRD International Bank for Reconstruction and System (Sistema Integrado de Development Información Financiera) ICB International Competitive Bidding SIGEN General Syndicate of the Nation IDA International Development Association (Sindicatura General De La Nación) IFR Interim Unaudited Financial Reports SIL Specific Investment Loan IP Indigenous Peoples TA Technical Assistance IPP Indigenous Peoples Plan TORs Terms of Reference IPPF Indigenous Peoples Planning Framework UCPyPFE Executing Unit within Coordinating M&E Monitoring and Evaluation Unit for Programs and Projects with MDG Millennium Development Goals External Financing (Unidad Mercosur Southern Common Market (Mercado Coordinadora de Programas y Comun del Sur) Proyectos con Financiamiento Externo) WS Water Supply UEPEX Ministry of Economy's Information WSS Water Supply and Sanitation Unit (Unidad Informática de la Secretaría de Hacienda) Vice President: Pamela Cox Country Director: Penelope J. Brook Sector Director: Laura Tuck Sector Manager: Guang Zhe Chen Sector Leader: Michel Kerf Task Team Leaders: Patricia Lopez ARGENTINA Second Norte Grande Water Infrastructure Project CONTENTS I. Strategic Context ..................................................................................................................... 1 A. Country Context .................................................................................................................. 1 B. Sectoral and Institutional Context....................................................................................... 2 C. Higher Level Objectives to which the Project Contributes ................................................ 5 II. Project Development Objectives ............................................................................................. 6 A. PDO..................................................................................................................................... 6 B. Project Beneficiaries ........................................................................................................... 6 C. PDO Level Results Indicators ............................................................................................... 6 III. Project Description .................................................................................................................. 6 A. Introduction ......................................................................................................................... 6 B. Project components ............................................................................................................. 7 C. Project Financing ................................................................................................................ 8 IV. Implementation ........................................................................................................................ 9 A. Institutional and Implementation Arrangements ................................................................ 9 B. Results Monitoring and Evaluation .................................................................................. 11 C. Sustainability..................................................................................................................... 11 V. Key Risks and Mitigation Measures ..................................................................................... 12 VI. Appraisal Summary ............................................................................................................... 12 A. Economic and Financial Analysis ..................................................................................... 12 B. Technical ........................................................................................................................... 12 C. Financial Management ...................................................................................................... 13 D. Procurement ...................................................................................................................... 13 E. Social (including safeguards) ............................................................................................ 14 F. Environment (including safeguards) ................................................................................. 15 G. Other Safeguard Policies Triggered .................................................................................. 15 Annex 1: Results Framework and Monitoring.............................................................................. 16 Annex 2: Detailed Project Description ........................................................................................ 19 Annex 3: Implementation Arrangements ..................................................................................... 24 Annex 4: Operational Risk Assessment Framework (ORAF) ..................................................... 40 Annex 5: Implementation Support Plan........................................................................................ 46 Annex 6: Team Composition ........................................................................................................ 49 iv Annex 7: Norte Grande Development Program: MAP IBRD 38215R......................................... 50 v PAD DATA SHEET ARGENTINA SECOND NORTE GRANDE WATER INFRASTRUCTURE PROJECT PROJECT APPRAISAL DOCUMENT LATIN AMERICA AND CARIBBEAN Urban, Water and Disaster Risk Management Unit (LCSUW) Date: March 7, 2011 Sector(s): WZ - General water, sanitation and flood Country Director: Penelope J. Brook protection (85%); BW- Public administration - Sector Director: Laura Tuck Water, sanitation, and flood protection (15%) Sector Manager: Guang Zhe Chen Theme(s): 71- Access to urban services and housing Sector Leader: Michel Kerf (70%); 84 - Pollution Management and Team Leader: Patricia Lopez Environmental Health (30%) Project ID: P125151 EA Category: Full Assessment (Category A) Lending Instrument: Specific Investment Loan (SIL) Project Financing Data: Proposed terms: Variable-spread loan with a final maturity of 26 of years including a grace period of 7.5 years. [X] Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other: Source Total Amount (US$M) Total Project Cost: 240 Cofinancing: Borrower: 40 Total Bank Financing: IBRD 200 IDA New Recommitted Borrower: Argentine Republic Responsible Agency: Ministry of Federal Planning Public Investment and Services, Coordinating Unit for Programs and Projects with External Financing (UCFyFPE) Contact Person: Pablo Abal Medina Telephone No.: 54 11 4349 7632 Fax No.: 54 11 4349 7568 Email: pmabal@minplan.gov.ar vi Estimated Disbursements (Bank FY/US$ m) FY FY12 FY13 FY14 FY15 FY16 FY17 Annual 2.00 48.00 60.00 60.00 25.00 5.00 Cumulative 2.00 50.00 110.00 170.00 195.00 200.00 Project Implementation Period: July 15, 2011 ­ December 31, 2016 Expected effectiveness date: June 30, 2011 Expected closing date: April 30, 2017 Does the project depart from the CAS in content or other significant Yes No respects? If yes, please explain: Does the project require any exceptions from Bank policies? Yes No Have these been approved/endorsed (as appropriate by Bank management? Yes No Is approval for any policy exception sought from the Board? Yes No Does the project meet the Regional criteria for readiness for Yes No implementation? Project Development objective The Project Development Objective is to increase sustainable access to sanitation and water supply services in the Norte Grande region of Argentina, by providing investments in infrastructure and supporting institutional development. Project description: Component 1: Water Supply and Sanitation Infrastructure. Carrying out of demand-driven subprojects consisting of the rehabilitation, upgrading and/or reconstruction of: (i) wastewater collection, conveyance, treatment and disposal systems, and (ii) water supply systems. Component 2: Institutional and Operational Development and Technical Assistance. Carrying out of: (i) tailored institutional and/or operational strengthening programs and technical assistance for participating WSS Service Providers, (ii) technical studies required to support the preparation and implementation of subprojects, and (iii) communication plans, dissemination and knowledge-sharing activities, and training and capacity building. Component 3: Project Management and Supervision. Carrying out of: (i) specialized independent technical, environmental and social supervision of subprojects' implementation, (ii) Project audits, and monitoring and evaluation activities, and (iii) provision of administrative and operational support. vii 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 Waterways (OP/BP 7.50) Yes No Projects in Disputed Areas (OP/BP 7.60) Yes No Conditions and Legal Covenants: Financing Description of Condition/Covenant Date Due Agreement Reference Schedule 2, Upon the selection of any given Subproject and prior to the Recurrent Section I.E.1 carrying out of the pertinent works under said Subproject, the Borrower, through UCPyPFE-UEP, shall: (a) carry out and/or cause to be carried out an environmental/social assessment of the pertinent works, and based on the results of said assessment as determined by the Bank, approve and/or cause to be approved an environmental/social management plan or similar environmental or social safeguards instrument, acceptable to the Bank, for each said works (which plan or similar environmental/social safeguards instrument shall be based on the results of the environmental/social assessment mentioned herein, and the Bank's comments on the results of said assessment, if any), all in accordance with the provisions of the Environmental and Social Management Framework; and (b) immediately after said approval, implement and/or cause to be implemented (as the case may be) the corresponding environmental/social management plan (or similar environmental/social safeguards instrument) in accordance with its terms, and in a manner acceptable to the Bank. Schedule 2, Without limitation to the pertinent provisions of this Agreement Recurrent Section I.E.2 in respect of any given Subproject in which works are involved, and if as a result of the definition of the precise sitting alignments it is determined by the Bank that Resettlement will be involved, the Borrower, through UCPyPFE-UEP, shall: (a) prior to the carrying out of any said works, prepare and/or cause to be prepared and furnish to the Bank, a resettlement plan, acceptable to the Bank (which plan shall consistent with the pertinent provisions of the Resettlement Policy Framework); and (b) thereafter, implement and/or cause to be implemented, said resettlement plan in accordance with its terms and in a manner acceptable to the Bank. viii Schedule 2, With respect to the carrying out of any given Subproject and Recurrent Section I.E.3 when so determined by the Bank as set forth in the IPPF and the Environmental and Social Management Framework, the Borrower, through UCPyPFE-UEP shall: (a) prior to the carrying out of any said Subproject, prepare and/or cause to be prepared and furnish to the Bank, an Indigenous Peoples' Plan, acceptable to the Bank (which plan shall consistent with the pertinent provisions of the IPPF); and (b) thereafter, adopt and implement (and/or cause to be adopted and implemented) said Indigenous Peoples' Plan in accordance with its terms and in a manner acceptable to the Bank. Schedule 2, The Borrower, through MPF, shall, prior to the commencement Recurrent Section II.B.4 of each calendar year during Project implementation, create, and thereafter maintain throughout each said calendar year of Project implementation, a specific budget line entry in the national annual budget (starting in calendar year 2011) in order to keep track of the corresponding expenditures incurred during Project implementation. ix I. Strategic Context A. Country Context 1. Recovery from 2001 crisis. Between 2002 and 2008, real Gross Domestic Product (GDP) in Argentina grew on average 8.5 percent per year 1. This strong growth performance was supported by a dynamic expansion of private investment, internal consumption and exports. Continued primary surpluses, together with a successful restructuring of sovereign debt in 2005, led to a marked reduction in the debt-to-GDP ratios from 66.4 percent of GDP in 2002 to 47.1 percent of GDP (US$160.9 billion) by end-September 2010. The Government's economic strategy, aimed at supporting the growth momentum, included expansionary fiscal and monetary measures as well as active income policies. As a result, poverty has declined from 13.9 percent in June 2009 to 12.0 percent in June 2010 2. Unemployment is also falling, reaching 7.5 percent in September 2010, from a peak of 9.1 percent in September 2009. 2. Economic slowdown and recovery. Economic activity started to slow in 2008 due to the impact of the global financial crisis. Real GDP growth declined to 6.8 percent in 2008 from 8.7 percent in 2007 according to official statistics. Economic activity declined further in 2009 due to a drop in external demand, declining commodity prices, and a severe drought that weighed on agricultural production. Fiscal performance deteriorated in 2009 on account of lower economic activity, counter-cyclical stimulus measures and a sharp decline in foreign trade (primary fiscal surplus fell from 3.1 percent of GDP in 2008 to 1.5 percent of GDP in 2009). The economy rebounded strongly in 2010, fueled by fast growth in internal absorption, external demand (mainly Brazil and China) and commodity prices. A revitalization of industrial activity in automobiles, basic metals and textiles, and a normalization of agricultural production following the previous year's severe drought have contributed to the economy's dynamism. Internal absorption has been boosted by consumption, investment and an expansion of public spending. Real GDP, as proxied by accumulated monthly economic activity, grew by 9.1 percent in 2010. 3. With the onset of the worldwide economic crisis and domestic economic slowdown, the Government of Argentina (GoA) prioritized an infrastructure investment program as a key part of a countercyclical economic stimulus package. Following the 2001-02 crisis, infrastructure investment grew every year, reaching 4.67 percent of GDP in 2008, and has continued to grow strongly despite the recent economic slowdown. The GoA's Strategic Plan for Territorial Development 3 2010-2016 sets out the two main objectives for its investment agenda: (i) consolidating market forces for the country's inclusion in the global economy and (ii) mitigating isolation asymmetries in the development of disadvantaged regions and communities to ensure a more equitable and sustainable growth for the country, particularly by bridging infrastructure deficits in poorer provinces The infrastructure investment program is a key piece of the GoA's strategy to overcoming potential bottlenecks to competitiveness and an essential means of tackling endemic poverty and regional inequalities as well as enhancing living standards in Argentina. 1 By mid-2005 real GDP had recovered to the level immediately before the 1998-2002 recession. 2 Data based on official inflation figures, which are contested by market analysts 3 1816-2016 - Argentina del Bicentenario: Plan Estratégico Territorial. 1 4. The Norte Grande Region (NGR) epitomizes the marginalization, underdevelopment and extreme poverty. Despite the economic recovery in Argentina and overall decrease in poverty levels, growth has historically been unequally distributed and poverty still endures in the North of the country. The region includes the nine provinces of Catamarca, Chaco, Corrientes, Formosa, Jujuy, Misiones, Tucumán, Salta and Santiago del Estero. Although it covers one-third of the national territory and comprises about 7.5 million people, representing 21 percent of the population, it produces only 10 percent of the GDP and 8 percent of the country's total exports. In contrast to declining national poverty levels, poverty stands at 48 percent of the population (3.6 million people), with 24.6 percent (1.85 million people) living in extreme poverty. According to the Bank's Provincial Development Index, which compiles measures of poverty and deficits in social and basic infrastructure services for all twenty-four provinces, eight of the nine NGR provinces' occupy the bottom eight spots. The proportion of homes with Basic Unsatisfied Needs (Necesidades Básicas Insatisfechas, NBI 4) is 18.6 percent compared to the national average of 14.3 percent. B. Sectoral and Institutional Context 5. The WSS sector faces significant challenges to increase coverage rates and improve service delivery. Sector policies have changed repeatedly and drastically over the last two decades. The concessions to private operators introduced in the 1990's often resulted in opportunistic renegotiations and tariff changes. The economic and social crisis of 2001 led to a freezing of water tariffs which affected the utilities' self-financing capacity. Many of the concessions were ultimately terminated. As a result of these upheavals, many companies are facing financial and operational difficulties and sector institutions have been weakened. With only 80 percent piped water supply and 48 percent piped sewerage coverage (2007), Argentina compares unfavorably with other upper-middle income countries and continues to lag behind some of its neighbors. The same is true of wastewater treatment, with only 10 percent of the collected wastewater receiving treatment. 6. Improving WSS services is a priority for the GoA which has launched an ambitious investment program in the sector. Water services are widely seen in Argentina as a fundamental basic necessity for the population, a vision which is quite common in the Latin America region and elsewhere in the world. The GoA recognizes that water, sanitation and wastewater treatment help guarantee the provision of certain public goods with important externalities such as health and environmental sustainability and is a allocating significant amounts from the federal Government as public subsidies for infrastructure investment. Concessional financing programs are commonly used worldwide ­ including in OECD and middle income countries such as the US, Colombia and Mexico - to deal with these externalities and address problems of underinvestment in the sector. In Argentina, investments reached US$500 million in 2008, an increase of over 50 percent from the previous year (US$330 million), and almost five times the average of the previous five years (US$120 million for the period of 2002-2007). 5 Increasing the efficiency of WSS provision is also an objective of the federal government support to the WSS 4 The NBI is a method of measuring poverty which uses indicators related to people's basic needs, namely shelter, sanitation, education, and minimum income. 5 These investments include only those managed at the Federal level through the Ministry of Planning, and therefore do not account for provincial and municipal governments' investments with their own resources, or those financed by privately managed WSS utilities, NGOs, and others. 2 sector. The GoA is channeling funds through several programs to promote operational efficiency and service quality improvements. Important initiatives are also underway at the local level to re- organize regional utilities. Such initiatives are not always optimally coordinated, which has generated some duplication of efforts and inconsistencies between different programs. Initial steps have been taken however to harmonize investment criteria, rationalize federal programs, and coordinate donor activities. 7. The NGR suffers from particularly acute problems in the WSS sector. The NGR is characterized by low coverage rates, poor service levels, contamination of water sources, limited availability of water resources (Chaco, Jujuy, Catamarca), high investment needs, limited funding, as well as governance and institutional challenges. The models for service provision within the region are wide-ranging. Seven out of the nine provinces in the NGR entered into concession contracts with private operators, most of which subsequently underwent renegotiation 6. While the situation of the different service providers varies significantly, all have been negatively affected by the economic and social crisis of 2001 and by institutional instability. As a result, the NGR is the most deprived region after the Metropolitan Region of Buenos Aires 7, with nearly 15 percent of the population (more than 1 million people) lacking piped water supply and 61 percent of the population (more than 4.5 million people) without piped sewerage services. As shown in Graph 1, the NGR presents some of the biggest disparities in terms of WSS coverage, with four of its nine provinces ranking the lowest in the nation and only two provinces above the national average. Graph 1: Water Supply and Sanitation Coverage in the Provinces of Argentina 8 ___________________________________________________________________________________________________________________________________________________ 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% Water Supply 30.0% Sanitation 20.0% 10.0% 0.0% Corrientes Jujuy Tucuman Catamarca Formosa Salta Sgo. del Estero Chaco Misiones Capital Federal Santa Cruz Chubut Mendoza La Pampa Cordoba Santa Fe San Juan San Luis Neuquen Buenos Aires Entre Rios La Rioja Rio Negro T. de Fuego ____________________________________________________________________________________________________________________________________________________ 8. In order to address the historical imbalances that have impeded the development of the NGR, the GoA has requested Bank support to the ongoing Development Program for the Norte Grande Provinces. This Program has thus far been financed by the GoA, the Inter-American Development Bank (IADB) through a US$2.4 billion package of loans covering water supply 6 Some provinces continue to provide the services in their main localities through concessions with privately owned operators (Santiago del Estero , Misiones , Formosa , Corrientes), others have undergone recent private to public processes (Catamarca , Salta ), and others are served by provincially owned entities (Chaco , Jujuy, Tucuman). 7 In the Metropolitan Region of Buenos Aires nearly 18 percent of the 14 million residents live in extreme poverty, primarily in the peri-urban areas surrounding the capital city, where 28.6 percent (close to 4 million people) lack household access to water supply and 54.2 percent of the population (more than 7.5 million people) lack household access to sewerage services. 8 Access to service % from the National Census of Population and Housing (2001). 3 and sanitation (WSS), energy, transport, and competitiveness, the Andean Development Corporation (CAF), and the World Bank through the first Norte Grande Water Infrastructure (P120211) and Road Infrastructure Projects (P120198) approved in December 2011. The Program is part of the GoA's strategy to correct historical imbalances among regions, with an emphasis on the implementation of infrastructure works to stimulate and integrate production. Annex 7 shows a map of the region with the investments financed thus far by the NG Development Program. 9. The Project will address infrastructure gaps as well as sustainability issues in order to generate long-lasting performance improvements in the WSS sector of the NGR. Moving towards greater cost recovery for service providers while maintaining affordability for users, especially the poorest, is a key challenge in the NGR. Nevertheless, a positive trend has been observed in the last few years, thanks to several reviews of rate structures and pricing levels which were deemed socially acceptable. The Project will seek to build on these successes and on the GoA's commitment to give the NGR prioritized access to concessional public funding and to improve institutional capacity in the region. 10. The Project is the second of two projects for water infrastructure in the Norte Grande Region. The first Norte Grande Water Infrastructure Project (P120211), approved by the Board on December 20, 2010, focuses on water supply and urban drainage, while this second project focuses mainly on sanitation infrastructure. Originally prioritized by the Borrower as a single operation for US$400 million, the operation was split in order to respond promptly to the need to prepare and implement priority investments in water supply under the first operation, which are relatively simpler from a technical perspective, while allowing additional time to consider the approach to financing the sanitation investments which present more complex technical, economic and safeguards issues. This Second Norte Grande Water Infrastructure Project (P125151), which is the object of the present PAD, focuses on subprojects that are considered to be Category A as per the World Bank Environmental Assessment Safeguard Policy (OP/BP 4.01) (while the first Project ­ P120211 ­ focuses on Category B subprojects). Both Projects (P120211, P125151) will provide technical assistance specifically designed to accompany the preparation of the works which they finance 9 and each will support a different universe of service providers throughout the region. In addition, the first loan (P120211) includes technical assistance and institutional strengthening for regional sector entities (with policy, regulation, and oversight functions) in the entire NGR and will therefore facilitate the implementation of the works to be financed under the second Project (P125151). 11. The proposed Project (P125151) ­ like the first Norte Grande Water Infrastructure Project (P120211) - has been designed as a framework operation. At the onset of Project preparation, two sanitation subprojects that had reached an advanced preparation stage were proposed by the Government for funding under the proposed Project. These subprojects are the Gran Resistencia Metropolitan Area Sanitation System in Chaco Province and the Santiago del Estero Sanitation and Wastewater System in Santiago del Estero Province. Preparatory activities 9 During the preparation of the first NG Water Infrastructure Project (P120211), it was envisaged that this first Project could support the preparation of sanitation subprojects. However, during the preparation of the Second NG Water Infrastructure Project (P125151), it was agreed with UCPyPFE that each Project will support the preparation of subprojects which they finance to maximize the use of the TA available under each loan and to maintain within the Second NG Water Infrastructure Project (P125151) the preparation of studies and safeguard instruments designed to support the more complex sanitation investments. 4 were launched with the objective of including these two subprojects as fully prepared investments ready for financing during the first year of Project implementation 10. However, the assessment concluded that in-depth additional discussion and studies would be needed to identify the best technical solutions and to ascertain the economic and environmental sustainability of these subprojects. The overall design and structure of the Project was therefore revised to adopt a framework approach that accommodates the need to undertake such studies and allows flexibility in the final choice of investments. This design provides the opportunity to include these and/or other subprojects as they are identified, designed and shown to meet eligibility criteria. The framework approach supports the Borrower's strategy of securing financing for basic infrastructure in the sanitation sector in Norte Grande. Currently, the Norte Grande Development Program financed by the IADB is fully committed and the Bank's commitment under the proposed Project will provide an incentive for municipalities and provinces to allocate the necessary planning tools and resources to the preparation of these complex subprojects. The framework approach also facilitates the delivery of TA at an early stage of subproject preparation thereby ensuring Bank's technical support to subproject design, and to the preparation of accompanying environmental and social studies. 12. The Project complements the ongoing Development Program for the Norte Grande Provinces. In line with the GoA's strategic priorities, the Bank is supporting a large investment lending program in the Norte Grande Region, including the first Norte Grande Water (P120211) and Road Infrastructure Projects (P120198), the Second Provincial Agricultural Development Project (PROSAP-II, P106684), aimed at improving agriculture productivity and agricultural support services to increase farmers' competitiveness and market access, and additional financing under the Small Farmer Development Project (PROINDER-P102446), aimed at increasing productive and organizational capacity in participating poor rural communities. During implementation, close coordination with other ongoing operations in the region will be sought, through joint supervision missions 11 and development of appropriate synergies among the respective investments and technical assistance programs. C. Higher Level Objectives to which the Project Contributes 13. By increasing investment and improving the efficiency and sustainability of service provision in the WSS sector, the Project will assist Argentina in getting closer to achieving the water and sanitation targets of the Millennium Development Goals (MDG 7) 12 and will contribute to raising the standard of living of low income population in the NGR. Currently, Argentina is on track to increase water supply accessibility to 84 percent and sanitation services to 55 percent; which is a substantial achievement, but still far from Argentina's 2015 MDG targets of 90 percent accessibility for water supply and 75 percent accessibility for sanitation services. The Project and its objectives support the vision outlined by the GoA to combat poverty and inequality through infrastructure investments and are consistent with the World Bank Group Country Partnership Strategy (CPS) discussed by the Board on June 9, 2009 (Report No. 48476- AR) for 2010-2012. The main objective of the CPS is to provide selective support to influence 10 As described in the ISDS from 07/30/2010 according to the original Project (P120211) design. 11 Coordination with the IADB counterparts is ongoing, with a commitment from GoA and task teams to continue coordination activities, including joint missions to the extent possible, during implementation. 12 MDG 7 on environmental sustainability sets a target of reducing by half the proportion of people without sustainable access to safe drinking water and basic sanitation. 5 specific outcomes in support of Argentina's strategic development goals under three pillars: (i) sustainable growth with equity; (ii) social inclusion and (iii) improved governance. The project will contribute to all three CPS pillars by supporting investments in basic water supply and sanitation facilities in poor and marginalized regions of the country as well as sustainability and improved institutional performance. As guiding principles for all components and financed activities, the Project is designed to promote: (i) the planning of all interventions based on agreed eligibility criteria; (ii) the identification of targets for each intervention whose attainment will be used as an indication of success; and (iii) the participation of stakeholders through meaningful consultation, facilitating access to relevant and timely information to foster Project's ownership. II. Project Development Objectives A. PDO 14. The Project Development Objective is to increase sustainable access to sanitation and water supply services in the Norte Grande region of Argentina, by providing investments in infrastructure and supporting institutional development. B. Project Beneficiaries 15. Project beneficiaries include people in the nine NGR provinces who will have new or improved access to water supply and sanitation services and those benefiting from improved environmental conditions as a result of wastewater collection and treatment. Considering the preliminary pipeline of candidate subprojects presented in Annex 2 and the available resources, the project is expected to benefit at least 400,000 people, of which an estimated 52% are female, through improved sanitation services. C. PDO Level Results Indicators 16. PDO success will be monitored by the following outcome indicators: (i) Number of people in urban areas within the NGR with access to sewerage and wastewater treatment services as a result of the infrastructure built under the Project; (ii) Number of new household sewerage connections built or benefiting from rehabilitation works built under the Project; and (iii) Evidence that at least three (3) service providers of the total supported under the Project 13 have undertaken and achieved the targets (including operational and financial targets) agreed upon in an institutional strengthening program financed by the Project. III. Project Description A. Introduction 17. The Project has been designed as a framework project comprising several sanitation and water subprojects, each of which will be selected for funding during project implementation from 13 The Project expects to support at least 4 service providers from the NGR during implementation through an institutional and operational strengthening program (see Annex 1). 6 a pipeline of potential investments 14. The pipeline subprojects were identified by the UCPyPFE based on the priorities indicated by provinces during the preparation of the ongoing IADB financed Water Infrastructure Project 15 (see Annex 2). The investments will be fully funded by the federal Government from loan proceeds and will be transferred to the provinces once completed. The Project will also provide technical assistance to support pipeline development and subproject preparation through its component 2. To help encourage investment in sanitation and provide capacity building in the NGR, the technical assistance would include a broader group of municipalities and provinces than those that would be ultimately funded under the investment component of the project. 18. Specific subprojects approved for funding will need to comply with the technical, economic, financial, institutional, environmental and social eligibility criteria set forth in the Project's Operational Manual, as well as with consultation and disclosure requirements. Consideration for funding will be made on first-come, first-served, basis from those subprojects that are ready for implementation. Subproject proposals will be examined in the context of: (i) consistency with Project objectives, in particular their poverty reduction potential; (ii) compliance with all eligibility criteria; and (iii) level of subproject's ownership and results of stakeholder consultation at the local level. 19. Works financed under the subprojects will be operated by the providers in charge of the services within the different provinces, who will commit to provide O&M funding and operate the subproject in accordance with Project rules and an Action Plan to be prepared by the Province for the sustainability of the investments. During the preparation of each specific subproject, the relevant service provider will undertake a capacity and needs assessment and will benefit from an institutional and operational strengthening program financed under the Project to help address the established targets and address identified weaknesses. B. Project components 20. Component 1: Water Supply and Sanitation Infrastructure (US$209 million, with US$169.5 million of Bank funding16): Carrying out of demand-driven Subprojects consisting of the rehabilitation, upgrading and/or reconstruction of Participating Provinces': (i) wastewater collection, conveyance, treatment and disposal systems, such as wastewater treatment plants, pumping stations, main collectors and secondary sewerage networks; and (ii) water supply systems including, for instance, production and distribution systems that are considered category A from their environmental impact assessment perspective. 21. Component 2: Institutional and Operational Development and Technical Assistance (US$15 million, all financed by the Bank): (i) Carrying out of tailored institutional and/or operational strengthening programs and provision of technical assistance for participating WSS Service Providers to improve their institutional organization, investment planning, management 14 The Project will focus on sanitation investments although it could eventually fund water supply investments that are considered Category A as per the World Bank Environmental Assessment Safeguard Policy (OP/BP 4.01) and thus would be excluded for funding under the first Norte Grande Water Infrastructure Project. 15 Water Infrastructure Project: Northern Provinces Development (AR-L1015), IADB, 2007. This Project is part of the overarching Norte Grande Development and Integration Program. 16 These amounts include price and physical contingencies. 7 capabilities and technical, operational, commercial and financial efficiency including, for instance: (a) the development of WSS-related management and information systems; (b) the development of WSS customer databases and cadastres; (c) the provision of technical assistance related to strategic planning, energy efficiency and operational efficiency programs; (d) the carrying out of analysis of cost-recovery options and optimization of rates and subsidy structures; (e) design and implementation of macro- and micro-metering (including minor works), and non-revenue water reduction programs; (f) the provision of technical assistance for institutional reorganization; and (g) the design of training programs for operation and maintenance of systems and installations (focused on wastewater treatment plants, water treatment plants and pumping stations), and the carrying out of studies related thereto, all under terms of reference acceptable to the Bank 17; (ii) Carrying out of technical studies required to support the preparation and implementation of Subprojects, for instance, feasibility studies, analysis of alternatives, engineering designs, economic and financial analysis, socio-economic surveys, environmental and social impact assessments and management plans (including screening and risk assessments, support to the preparation of safeguard instruments and monitoring) and other studies related thereto, all under terms of reference acceptable to the Bank; and (iii) Carrying out of communication plans, dissemination and knowledge-sharing activities related to the Project, and training and capacity building for the institutional strengthening of UCPyPFE and Participating Provinces. 22. Component 3: Project Management and Supervision (US$15 million, all financed by the Bank): (i) Carrying out of specialized independent technical, environmental and social supervision of Subprojects' implementation, as required; (ii) Carrying out of Project audits and monitoring and evaluation activities under the Project; and (iii) Provision of administrative and operational support (including the provision of Operating Costs) to UCPyPFE in the administration, monitoring, coordination and supervision of Project implementation. 18 C. Project Financing Lending Instrument 23. In agreements reached with the GoA, a SIL (Specific Investment Loan) lending instrument has been selected for an amount of US$200 million for the Project. Repayments will be annual, with a total maturity of 26 years, including 7.5 years of grace. Project Cost and Financing Project Components Project cost IBRD Financing % Financing (US$M) (US$M) 1. Water Supply and Sanitation Infrastructure 176,5 143,1 81% 2. Institutional Dev. and TA 15 15 100% 3. Project Management and Supervision 15 15 100% 17 If both the first (P120211) and second (P125151) NG Water Infrastructure Projects were to finance works operated by the same service provider, only one Project would generally support the entire institutional strengthening program for that service provider. This component, and subcomponent (ii) can also support service providers or subproject preparation in provinces that do not have an infrastructure subproject financed under Component 1. 18 As mentioned in paragraph 10 above, implementation arrangements for both the first and the second NG Water Infrastructure Projects are the same. Each Project will fund its share of the combined management and supervision costs. 8 Project Components Project cost IBRD Financing % Financing (US$M) (US$M) Total Baseline Costs 206,5 173,1 Physical contingencies 8 6.4 80% Price contingencies 25 20 80% Total Project Costs 239.5 199.5 83% Front-End Fee 0.5 0.5 100% Total Financing Required 240 200 83% IV. Implementation A. Institutional and Implementation Arrangements 24. Borrower and Implementing Agency: The Borrower is the Argentine Republic and the Implementing Agency will be UCPyPFE within the MPF. 19 At present, the UCPyPFE is coordinating several programs financed by multilateral development banks, including the Water Infrastructure Project in the NGR co-financed by the IADB 20 and the first NG Water Infrastructure (P120211) and NG Road Infrastructure Projects (P120198) financed by the Bank. 25. Project Management and Implementation: The UCPyPFE will be in charge of Project administration and execution through a dedicated unit, which is the same unit as the one in charge of the implementation of the first NG Water Infrastructure Project. Works will be centrally executed and the UCPyPFE's unit will coordinate all program activities including the handling of procurement, contracting, and payments to contractors, acting as necessary to meet the Bank's contractual conditions. Through this unit, the UCPyPFE will coordinate with other entities at the national and provincial levels, with the MPF providing overall oversight. Flow of funds will be centralized and there will be no transfers of funds to provinces (details provided in Annex 3). Although the UCPyPFE is currently managing a relatively large volume of projects (financed by the Bank and other multilateral institutions), it will assign a specific group of professionals (with new contracting as required given the additional needs) to handle the NGR water and sanitation projects, in particular fiduciary, environmental, social and meaningful communication issues, so there will be sufficient capacity in the implementation unit to manage the projects. See Annex 3 for details on the agreed institutional strengthening program for environmental and social management for UCPyPFE and the provinces. 26. Subproject operation: Upon completion, the WSS assets will be transferred to the provinces under a Participation, Transfer, and Maintenance of Works Agreement (PTA) to be signed with the MPF. The provinces would then generally transfer them, as appropriate, to their WSS service providers for their management, operation and maintenance under the appropriate administrative instrument according to the existing service provision model in the particular province. Under these agreements, the service provider will provide the financial resources to 19 The UCPyPFE was created by Resolution 165/2000 of the Ministry of Infrastructure and Housing, and its duties and responsibilities were modified by Executive Decree 1,142/2003. 20 Implementation of the IADB Program, although at the onset suffered significant delays mostly due to capacity constrains at the local level for the preparation of the subprojects , is well underway, with 100% of the funds committed and current good standards in the preparation of bidding documents, procurement and supervision of ongoing works. 9 properly manage, operate and maintain Project-financed works or, in case of operational deficit, the Province will provide funding. 27. Technical and environmental supervision. Large or complex works will be supervised by a specialized independent consulting firm. The UCPyPFE will provide further supervision and regularly inspect the works, as well as the implementation of the Environmental Management Plan (EMP) and any social impact mitigation measures during construction. Consulting services for the supervision of major investment works will be hired before the contracts for the respective works are signed, according to terms of reference agreed upon with the Bank. 28. Eligibility criteria for Participating Provinces in the NGR: Provinces participating in the program must comply with the following criteria: (i) Sign the Participation, Transfer and Maintenance Agreement with the MPF; (ii) Allocate and demonstrate that they have sufficient budgetary resources to operate and maintain Project financed works, as applicable; (iii) Demonstrate sufficient and sustainable technical and institutional capacity to manage, operate and maintain the investments 21; and (iv) Prepare an Action Plan to address sustainability of the subprojects, including the measures and targets that will lead to its sustainable operation. 29. General Eligibility Criteria for Subprojects: Without exception, the following general eligibility criteria 22 must be met for projects to be considered and financed under the Project: (i) Subprojects must largely benefit low income populations 23 and be consistent with Project objectives; (ii) Subprojects included in the Project must have complete technical designs, be economically viable and financially sustainable, be managed by stable institutions and warrant satisfactory environmental and social management; (iii) Compliance with the economic, financial, legal, technical, institutional, social and environmental eligibility criteria will be documented in relevant satisfactory studies 24, be approved by the UCPyPFE and have the formal No Objection of the Bank; (iv) Current and estimated revenues of the subproject, or the provincial WSS service providers (including any applicable subsidies from provincial or federal budget) must cover the current and estimated cost of operating and maintaining actual and future projects; (v) Participating WSS service providers will benefit an institutional and operational institutional development program establishing the targets and other measures that will support the sustainability of the investments and the overall provision of WSS services and address any identified weaknesses; (vi) The guidelines of the Project's Environmental and Social Management Framework (ESMF) must be followed to ensure compliance with applicable social and environmental 21 These may be government institutions or a public or private company holding a concession. 22 Eligibility criteria are further detailed in the Project's Operations Manual. 23 At least 40% of investments will benefit low-income population as defined using Index of Household Material Deprivation (NBI), Unsatisfied Basic Needs Index, or Human Development Index or subproject specific socio-economic surveys. 24 Studies will follow agreed ToR and guidelines described in the OM. 10 safeguard policies including preparing the necessary instruments and undertaking consultation and disclosure, and in particular: a) The subproject must provide an EIA acceptable to the environmental authority of the relevant province and the Bank. The EIA will incorporate the results of public consultations, prepared following the guidelines of the ESMF. b) The EIA must include mitigation measures and programs for the construction and operation phases. In the case of subprojects involving involuntary resettlement or affecting indigenous peoples, specific provisions will be outlined in a Resettlement Plan (RP) or Indigenous People Plan (IPP). c) All costs associated with the implementation of the subproject EMP, RP and/or IPP and any mitigation measures and monitoring programs must be budgeted for (under Component two of the Project). d) The subproject must demonstrate sustainability from an environmental and social standpoint, which entails preventing: (i) permanent negative impacts on protected areas or cultural heritage; (ii) negative impacts on species threatened by extinction; (iii) negative environmental impacts that cannot be mitigated to acceptable levels; and (iv) social costs deemed unacceptable and/or unable to be mitigated by the affected communities. B. Results Monitoring and Evaluation 30. Project progress reports will be prepared by the UCPyPFE and submitted to the Bank on a semi-annual basis. These reports will indicate the progress made under the different components of the Project and measure performance against the results indicators established in the results framework (Annex 1). Progress reports will also include: (i) disbursement performance over the period covered by the report and an updated disbursement calendar; (ii) a report on status of procurement actions, and an updated procurement plan for activities under each of the project's components; (iii) progress in the implementation of the Action Plan for the sustainability of the subprojects, in the Institutional Strengthening programs entered into by Service Providers and in the Environmental and Social Management Plans, laying out problems identified as well as documenting Project impacts in the areas of intervention; (iv) status of Bank safeguard implementation/compliance; (v) potential developments that could affect project implementation, which should consist of a review of the main risks and the impact of envisioned mitigation measures; and (vi) an annual operation plan for the following year. C. Sustainability 31. Long term project sustainability will be proactively addressed by: (i) the signing of PTA committing to the provision of WSS services in a context of economic and financial sustainability, including an Action Plan aimed at ensuring proper management, operation and maintenance by the service provider, with a specific commitment from the province to provide 11 necessary O&M funding 25 and a commitment from the service provider to operate the subproject; (ii) the funding of an institutional development component to strengthen and improve the quality of subproject preparation and the operational and efficiency of the participating WSS service providers; (iii) if appropriate, utilizing effective and sustainable wastewater treatment processes which require low O&M costs and are potentially able to generate energy (i.e. income to support the financing of O&M expenses); and (iv) the first NG Water Infrastructure Project (P120211) which will support the strengthening of the regulatory and monitoring capabilities of provincial authorities to promote a more efficient and sustainable provision of WSS services. These arrangements will be supported during implementation by ongoing technical dialogue between the Bank and GoA. Dialogue on sector financing policies at the federal level will continue during implementation, in particular in the likely upcoming period of discussion of sector policy notes. Sustainability is also underpinned by the strong ownership and commitment of the GoA and Provinces to the overarching NGR Devolvement Program. V. Key Risks and Mitigation Measures 32. Potential risks are summarized in the Operational Risk Assessment Framework (see Annex 4). The overall implementation risk for this Project is rated as High. Risks identified are manageable and mitigation measures are in place. The two main risks identified are: (i) the need to strengthen implementing capacity at the federal and provincial levels to successfully implement the Project within a five-year implementation period (particularly in the areas of subproject design, environmental and social safeguards and supervision of large complex works); and (ii) the technical and financial sustainability of WSS service providers. Mitigation measures for these risks are an integral part of the Project's design (see Annex 4). VI. Appraisal Summary A. Economic and Financial Analysis 33. The Project is expected to generate a broad set of economic benefits, including improved environmental conditions and access to sewerage and wastewater treatment services particularly in urban and peri-urban areas, all of which are expected to improve health conditions and the quality of life in the NGR. The approach for economic evaluation, as in the first Norte Grande Water Infrastructure Project (P120211), has focused on developing cost benefit and financial analysis methodologies which will be used in the screening and evaluation of subprojects to be funded under the Project and will permit the analysis of the sustainability of the operation and maintenance of the investments (as well as the identification of any operational deficit requiring concessional funding). B. Technical 34. The allocation of funds to specific sub-projects during the implementation of the Project will be demand-driven. The Project will fund sanitation works to be defined during the 25 Provinces will be asked to include a budgetary line allocating the resources required for any public support required to the WSS service provision from the provincial budget as applicable. Based on the experience with other ongoing Bank financed projects, typically provinces in Argentina, including some from the NGR, have complied with their commitments to provide counterpart funding related to their participation in federal programs financed by Bank projects. 12 implementation from the preliminary pipeline identified by the GoA (see annex 2) and other potential eligible sub-projects identified at a later stage. The technical viability of proposed WSS subprojects will be assessed following a rigorous technical analysis of detailed designs by the UCPyPFE and the Bank. For subprojects including wastewater treatment plants, a list of treatment processes based on process technologies (or combinations of such processes), which are in principle recommended for the subprojects to be funded under this Project, has been elaborated during Project preparation 26. See Annex 2 for additional details. C. Financial Management 35. The UCPyPFE will be responsible for Project administration and execution and will undertake the financial management functions of the Project including budgeting, accounting and financial reporting, internal control, disbursements and documenting expenditures to the Bank and external auditing arrangements. No major Financial Management (FM) risks have been identified for the Project. The flow of funds and other FM arrangements are detailed in Annex 3. 36. The Bank will approve retroactive financing for payments made up to one year before the date of signature of the Loan Agreement and after January 1, 2011, provided that the services and goods are procured in accordance with the Bank's Procurement Guidelines and that they are executed in compliance with the Bank's safeguard policies. These expenditures would be paid in advance by the Borrower and should not exceed US$10 million 27. FM related covenants include: (i) not later than six months after the end of each year, the borrower shall furnish to the Bank the annual audited financial statements; (ii) not later than 45 days after the end of each calendar semester, the Borrower shall furnish to the Bank Semi-annual IFRs which will be part of the progress reports of the Project; and (iii) a specific budget line entry for the Project will be created in the MPF's 2011 annual budget and maintained thereafter to follow Project execution. D. Procurement 37. Procurement activities will be carried out by the UCPyPFE. A Bank assessment of UCPyPFE capacity concluded that it has adequate experience and capacity to carry out procurement activities related to the proposed Project. The UCPyPFE has project implementation experience from previous World Bank financed projects, and has personnel with sufficient capacity and experience in procurement under Bank norms and procedures. The UCPyPFE also manages procurement under the IADB operation which finances WSS works in the NGR. A summary of the procurement capacity assessment and Project procurement arrangements can be found in Annex 3. The risks identified in the assessment and the proposed mitigation measures have been discussed with the UCPyPFE and are detailed in Annex 4. 38. The Procurement Plan for the Project is available in the Project's database and in the Procurement Plan Execution System (SEPA System 28). The Procurement Plan will be updated annually, or as required, in agreement with the Bank to reflect the actual Project implementation needs. Works procured under this project would include construction and rehabilitation of water 26 Available in the Project files. This list does exclude any technology and each case will be analyzed on its own merits based on specific requirements and technical and environmental sustainability aspects. 27 Retroactive financing under the Project will only apply for goods and services under components 2 and 3. 28 www.sepaargentina.org.ar 13 supply and sanitation systems. In general, ICB procurement will be done using the Bank's April 2008 version of the Standard Bidding Document (SBD) for Smaller Contracts, and National SBD agreed with or satisfactory to the Bank will be used for all NCBs. Large or complex works, if needed, would be preceded by pre-qualification using the Bank's Standard Pre-qualification Document, August 2006, revised September 2010, and further carried out using the Spanish version of the Bank's SBD for the Procurement of Works, April 2007, revised May 2010. E. Social (including safeguards) 39. A Rapid Social Analysis (SA) was undertaken during preparation which indicated the Project would have an overall positive social impact and represents a great opportunity for social development, directly benefiting over 400,000 people, of which an estimated 52% are female. The SA has identified opportunities for positive social impacts and the main risks during the construction and operation of subprojects, which arise mainly from: (a) direct and indirect employment creation and multiplier effects in the provision of goods, supplies, equipment, services and income generation during the construction, which will contribute to the growth of local economies and discourage migration; and (b) better health and hygiene conditions stemming from increased access to WSS and reduced contact with untreated and polluted wastewater sources; and (c) decreasing costs associated with treating these health problems during the operation. 40. With regard to Bank's social safeguards, an Indigenous Peoples Planning Framework (IPPF) and a Resettlement Policy Framework (RPF) have been prepared by the GoA as part of the Environmental Social Management Framework (ESMF), following federal and provincial legislation and Bank's Indigenous Peoples (OP4.10) and Involuntary Resettlement (OP4.12) safeguard policies. Additional detail on the Project's social analysis, the Project's key social risks, provisions to identify and address negative or enhance positive impacts on vulnerable groups, and other specific social instruments are provided in Annex 3. 41. Disclosure and Consultation. The ESMF was first disclosed on UCPyPFE's website on September 28, 2010 and in the Bank's Infoshop on October 20, 2010. Final drafts of the Frameworks (ESMF, IPPF and RPF) have been publicly disclosed in-country and in the Infoshop on February 24, 2011. All Frameworks (ESMF, IPPF and RPF) have been consulted through three different channels: (i) expert peer review of the documents by two internationally recognized 29 professionals with substantial experience in the WSS sector and also in working with indigenous communities in Argentina; (ii) a virtual review as part of which the Project documents were shared for comments with a variety of institutional stakeholders at the federal and provincial levels, including provincial environmental agencies and institutions related to water resources provision and management, NGOs and indigenous affairs institutions; and (iii) organization of focus group targeted meetings to discuss any comments to the frameworks in two provinces of the NGR on January 25-27, 2011 30. Additionally, the Communication and Consultation Framework (CF) of the ESMF requires broad dissemination of information on the Project to ensure an open process of discussion about its scope and objectives, as well as timely 29 Angel Menendez (ESMF), Pia Pacheco (IPPF and RPF). 30 Details on comments received in UCPyPFE's report on the consultation process, available in UCPyPFE website and in the Infoshop. 14 and thorough consultation for relevant stakeholders of future subprojects to ascertain their views, identify potential adverse and positive impacts, and define adequate mitigation measures, especially for category A subprojects where meaningful consultations will be required. F. Environment (including safeguards) 42. Environmental Categorization and Bank Safeguards Policies triggered. The Project has been classified as a Category A following the Environmental Assessment safeguard policy (OP4.01), in consideration of the impacts and mitigation programs needed as part of the construction and rehabilitation of large scale wastewater treatment systems which are anticipated to be funded under the Project. In addition to this, the categorization process takes into account: (i) the social and environmental sensitivities of the project area, (ii) the types of proposed investments, (iii) the weak provincial, municipal or utilities capacities; and (iv) the unknown scope of future investments. Because of the nature of the potential impacts of these types of works the Project also triggers the following World Bank environmental safeguard policies: Environmental Assessment (OP4.01), Natural Habitats (OP4.04), Forests (OP4.36), Physical Cultural Resources (OP4.11), Pest Management (OP4.09), Safety of Dams (OP4.37) and International Waterways (OP7.50). 43. Safeguards instruments and Environmental Assessment (EA) process. The safeguards instruments prepared by the Borrower include an ESMF which integrates an RPF and IPPF. The ESMF addresses requirements of each of the triggered World Bank Safeguard Policies. Future subprojects that will be proposed for funding will undergo environmental screening to determine their eligibility for financing following the ESMF and according to the eligibility criteria described in section IV. Once specific investment proposals are received for consideration, they will undergo a detailed environmental assessment process outlined as part of the ESMF which includes procedures for: (i) environmental and social screening of activities; (ii) preparation of EAs and EMPs including draft TORs and guidelines for mitigation measures; (iii) public consultation and disclosure; (iv) clearance of EAs; and (v) supervision of EMP implementation. G. Other Safeguard Policies Triggered 44. The Bank's policy on Projects on International Waterways (OP-BP 7.50) is triggered as some of the subprojects to be considered for funding may be located on waterways that form part of the Paraná/Paraguay River system which originates in Brazil and flows into Bolivia and Paraguay (the Paraguay River) and Paraguay and Argentina (the Parana River). The Paraguay River discharges its water in the Parana River and further downstream it merges with the Uruguay River to form the La Plata River, which flows from Argentina to Uruguay. This system comprises an international waterway for purposes of The World Bank's OP 7.50 paragraph 1. 45. It is envisaged by Bank staff that the Project will not cause appreciable harm to other riparians and will not be appreciably harmed by the other riparian's possible water use. Following OP/BP 7.50 requirements, a formal notification of the proposed Project and its details has been sent by the Bank to the Republic of Paraguay and the Oriental Republic of Uruguay on behalf of the Government of the Argentine Republic. The notification period expired on March 3, 2011 and no response has been received. 15 Annex 1: Results Framework and Monitoring ARGENTINA: SECOND NORTE GRANDE WATER INFRASTRUCTURE PROJECT Results Framework Project Development Objective (PDO): The PDO is to increase sustainable access to sanitation and water supply services in the Norte Grande region of Argentina by providing investments in infrastructure and supporting institutional development. Cumulative Target Values Responsibility Description (indicator Unit of Data Source/ Core PDO Level Results Indicators* Baseline Frequency for Data definition etc.) Measure Methodology YR1 YR2 YR3 YR4 YR5 Collection Indicator One: Based on data on People in urban areas within the No. of 0 0 0 250,000 410,000 418,000 Biannually Service Service average household size NGR with access to sewerage and People Provider Providers, and intermediate wastewater treatment services as a customer UCpyPFE indicator data, result of the infrastructure built databases removing any double under the Project counting of beneficiaries Indicator two: Service Service Those related directly Number of new household sewerage No. of 0 0 0 50,000 84,000 94,000 Biannually Provider Providers and to physical outputs connections built or benefiting from Connections customer UCPyPFE rehabilitation works built under the databases Project Indicator three: No. of 0 0 0 1 2 3 Biannually Service UCPyPFE Indicators definition Evidence that at least three (3) Service Providers will be based in the service providers of the total Providers Management activities to be funded supported under the Project have Information under the institutional undertaken and achieved the targets Systems strengthening program (including operational and financial with specific time- targets) agreed upon in an bound targets institutional strengthening program (i.e improvement in financed by the Project operational or financial indicators) 31 31 As included in a Participation Agreement to be signed by service providers and the provinces. 16 Project Development Objective (PDO): The PDO is to increase sustainable access to sanitation and water supply services in the Norte Grande region of Argentina by providing investments in infrastructure and supporting institutional development. Cumulative Target Values Responsibility Description (indicator Unit of Data Source/ Core PDO Level Results Indicators* Baseline Frequency for Data definition etc.) Measure Methodology YR1 YR2 YR3 YR4 YR5 Collection INTERMEDIATE RESULTS Intermediate Result (Component One): Intermediate Result Indicator One: No. of 0 0 0 250,000 410,000 418,000 Biannually Service UCpyPFE Based on data on Direct Project beneficiaries, of People Provider average household size which 52% are female customer and other intermediate databases indicator data, removing any double counting of beneficiaries Intermediate Result Indicator Two: No. of 0 0 0 250,000 410,000 418,000 Biannually Service UCpyPFE Based on UNICEF- People in urban areas within the People Provider WHO Joint Monitoring NGR with access to improved customer Program definition sanitation under the Project databases Intermediate Result Indicator Three: No. of 0 0 0 40,000 80,000 135,000 Biannually Service Service Those related directly Additional population served by people Provider Providers and to project physical sewerage collectors customer UCPyPFE outputs databases Intermediate Result Indicator Four: Km 0 0 0 5 10 16 Service Service Those related directly Km of sewerage collectors Biannually Provider Providers and to physical outputs rehabilitated under the Project customer UCPyPFE databases Intermediate Result Indicator Five: No. of 0 0 0 1 2 3 Service Service Those related directly No. of additional service providers service Biannually Provider Providers and to physical outputs that complying with the provincial and providers information UCPyPFE have been confirmed to federal standard for effluent systems meet wastewater discharge quality standards through adequate testing Intermediate Result (Component Two): Inter mediate Result Indicator One: No. of 0 1 2 3 4 4 Biannually UCPyPFE UCPyPFE No. of utilities enrolling Number of water utilities supported service in an institutional by the Project providers strengthening program financed under the 17 Project Development Objective (PDO): The PDO is to increase sustainable access to sanitation and water supply services in the Norte Grande region of Argentina by providing investments in infrastructure and supporting institutional development. Cumulative Target Values Responsibility Description (indicator Unit of Data Source/ Core PDO Level Results Indicators* Baseline Frequency for Data definition etc.) Measure Methodology YR1 YR2 YR3 YR4 YR5 Collection Project Inter mediate Result Indicator Two: No. of 0 1 3 5 6 6 Biannually Service Service Subprojects that meet Number of subprojects prepared that subprojects Providers Providers and eligibility criteria as set meet Project eligibility criteria to be UCPyPFE forth in the Project's approved for funding Operational Manual Intermediate Result (Component Three): Inter mediate Result indicator One: Yes/No Yes Yes Yes Yes Yes Biannually UCpyPFE World Bank Project FMR as defined Evidence that the UCPyPFE unit in Task Team in the LA charge of Project implementation is operational and functions effectively as evidenced by the timely preparation of financial management and other monitoring reports Inter mediate Result indicator Two: Yes/No Yes Yes Yes Yes Yes Biannually UCpyPFE World Bank Project FMR as defined Development, launching and Task Team in the LA continuing the implementation of a Communication Strategy for the Project following project design guidelines 32 32 Guidelines are contained in the Project ESMF and will be further developed in the OM. 18 Annex 2: Detailed Project Description Introduction 1. The Project is part of the ongoing Development Program for the Norte Grande Provinces, which has thus far been financed by the Inter-American Development Bank (IADB) through a US$2.4 billion package of loans (with US$500 million in counterpart financing) covering the energy, transport, water and competitiveness sectors, and the Andean Development Corporation (CAF) for transport (see Box 1). The overall objective of this Program has been to contribute to the sustainable economic development of the Norte Grande provinces and to raise local population living standards by promoting increased productive activities and social well-being. The Bank's support in the region includes the first Norte Grande Water Infrastructure (P120211) and Road Infrastructure Projects (P120198), the Second Provincial Agricultural Development Project (PROSAP-II, P106684), and the Small Farmer Development Project.(PROINDER) Additional Financing (P102446). Box 1: GOA's Norte Grande Development Program The Norte Grande Development and Integration Program is part of a National Government strategy for historical redress of this region. The Program, initiated in 2004, comprises financing by international development partners, including four operations by the Inter-American Development Bank totaling US$2.9 billion (IADB Loans No. 1843-OC/AR, 1764- OC/AR, 2005-OC/AR and 1851-OC/AR), and an operation with the Andean Development Corporation--CAF financing Route 81 in Salta and Formosa. The Norte Grande Development and Integration Program has four main objectives: To revert one of the greatest imbalances in the regional development of Argentina under the framework of an increasing integration process. Develop the basis for egalitarian and sustainable development, with a federal mandate based on the support of key regional competitiveness, seizing its human capital and natural resources. Enhance the quality of life and improve the opportunities of the different communities of the region, accounting for social and environmental aspects. To include public participation and consultation processes. This program seeks to facilitate growth of the productive and services sectors, overcoming barriers to social and economic development of the provinces as a basis for regional integration with Bolivia, Brazil, Chile and Paraguay, recognizing South American integration as a requirement for survival. The development of infrastructure, energy and telecommunication projects, the provision of an inter-oceanic connection to enhance the Mercosur, the exploitation of mining and hydrocarbons as well as the provision of transport corridors and the improvement of trade logistics, will have economic impacts generating employment and promoting and enhancing new and existing industries. The Development Program is supported by an institutional framework under which each one of the nine governors of the provinces involved participates actively, working closely with Ministries and Government officials, supported by the multilateral banks, in designing, implementing and monitoring the proposed projects in the agenda. As mentioned before, the Program comprises investments of US$2.9 billion, and is divided in 4 sub-programs: Energy Subprogram ($1.1 b) - comprises the financing of a high-voltage transmission line for the interconnection of the Northwest and Northeast regions, 1160 km in 500 Kv, with 2 intermediate substations at Monte Quemado (Santiago del Estero) and San Juancito (Jujuy). Road Subprogram ($1.5 b) - comprises several works of construction, rehabilitation and enhancement of different segments of the national and provincial roads networks. This subprogram has been supported by the IADB. Water Subprogram ($300 m) - comprises multiple projects involving sewage, drainage and flood control. Productive Sector Competitiveness Subprogram ($20 m) - supports the main productive chains in the Norte Grande Region removing bottlenecks and potential barriers to sector development. More information is available at: http://www.ucpypfe.gov.ar, and at: http://www.desarr-territorial.gov.ar/htms/nortegrande/nortegrande elprograma.html 19 Project Description 2. The Project has been designed as a framework project comprising several sanitation and water subprojects 33, each of which will be selected for funding during project implementation from a pipeline of potential investments (see table below). The pipeline subprojects were identified by the UCPyPFE based on the priorities indicated by provinces during the preparation of the ongoing IADB financed Water Infrastructure Project 34. The investments will be fully funded by the federal Government from loan proceeds and will be transferred to the provinces once completed. The Project will also provide technical assistance to support pipeline development and subproject preparation through its component 2. To help encourage investment in sanitation and provide capacity building in the NGR, the technical assistance would include a broader group municipalities and provinces than those that would be ultimately funded under the investment component of the project. 3. Specific subprojects approved for funding will need to comply with the technical, economic, financial, institutional, environmental and social eligibility criteria set forth in the Project's Operational Manual, as well as with consultation and disclosure requirements. Consideration for funding will be made on first-come, first-served, basis from those subprojects that are ready for implementation. Subproject proposals will be examined in the context of: (i) consistency with Project objectives, in particular their poverty reduction potential; (ii) compliance with all eligibility criteria; and (iii) level of subproject's ownership and results of stakeholder consultation at the local level. 4. Works financed under the subprojects will be operated by the providers in charge of the services within the different provinces, who will commit to provide O&M funding and operate the subproject in accordance with Project rules and an Action Plan to be prepared by the Province for the sustainability of the investments. During the preparation of each specific subproject, the relevant service provider will undertake a capacity and needs assessment and will benefit from an institutional and operational strengthening program financed under the Project to help address the established targets and address identified weaknesses. 5. The most complex interventions to be financed under the Project from the technical standpoint are expected to be wastewater treatment plants. A list of treatment processes based on process technologies (or combinations of such processes), which are in principle recommended for the subprojects to be funded under this Project, has been elaborated during Project preparation 35. The treatment processes in the list have low investment and O&M costs and are relatively simple to operate. Considering the effluent quality standards required in most provinces in the NGR, it is anticipated that most of the treatment processes presented can achieve the required effluent quality, without the need to combine two or more of the processes into a single treatment plant. The lower O&M costs and the simplicity of operation will improve the 33 The Project will focus on sanitation investments although it could eventually fund water supply investments that are considered Category A as per the World Bank Environmental Assessment Safeguard Policy (OP/BP 4.01) and thus would be excluded for funding under the first Norte Grande Water Infrastructure Project. 34 Water Infrastructure Project: Northern Provinces Development (AR-L1015), IADB, 2007. This Project is part of the overarching Norte Grande Development and Integration Program. 35 Available in the Project files. This list does exclude any technology and each case will be analyzed on its own merits based on specific requirements and technical and environmental sustainability aspects. These processes are considered appropriate given climate considerations and technical and financial capacity constrains at the local operational level. 20 sustainability of the investments, which is one of the main objectives of the Project. The use of technologies with lower investment costs would also allow the Project's investments to cover a larger population in different provinces, maximizing the value of the federal subsidy. In addition, subproject preparation will explore the viability of capturing biogas for energy use in wastewater treatment plants that use as the first treatment stage anaerobic processes. The income from the utilization of biogas can contribute to covering O&M costs. It may also be possible to obtain carbon credits for reducing the emission of methane, a strong greenhouse gas, and thus generate additional income from the anaerobic process 36. 6. Component 1: Water Supply and Sanitation Infrastructure (US$209 million, with US$169.5 million of Bank funding37): Carrying out of demand-driven Subprojects consisting of the rehabilitation, upgrading and/or reconstruction of Participating Provinces': (i) wastewater collection, conveyance, treatment and disposal systems, such as wastewater treatment plants, pumping stations, main collectors and secondary sewerage networks; and (ii) water supply systems including, for instance, production and distribution systems that are considered category A as per the World Bank Environmental Assessment Safeguard Policy (OP/BP 4.01).. 7. Component 2: Institutional and Operational Development and Technical Assistance (US$15 million, all financed by the Bank): (i) Carrying out of tailored institutional and/or operational strengthening programs and provision of technical assistance for participating WSS Service Providers to improve their institutional organization, investment planning, management capabilities and technical, operational, commercial and financial efficiency including, for instance: (a) the development of WSS-related management and information systems; (b) the development of WSS customer databases and cadastres; (c) the provision of technical assistance related to strategic planning, energy efficiency and operational efficiency programs; (d) the carrying out of analysis of cost-recovery options and optimization of rates and subsidy structures; (e) design and implementation of macro- and micro-metering (including minor works), and non-revenue water reduction programs; (f) the provision of technical assistance for institutional reorganization; and (g) the design of training programs for operation and maintenance of systems and installations (focused on wastewater treatment plants, water treatment plants and pumping stations), and the carrying out of studies related thereto, all under terms of reference acceptable to the Bank 38; (ii) Carrying out of technical studies required to support the preparation and implementation of Subprojects, for instance, feasibility studies, analysis of alternatives, engineering designs, economic and financial analysis, socio-economic surveys, environmental and social impact assessments and management plans (including screening and risk assessments, support to the preparation of safeguard instruments and monitoring) and other studies related thereto, all under terms of reference acceptable to the Bank; and (iii) Carrying out of communication plans, dissemination and knowledge-sharing activities related to the Project, and training and capacity building for the institutional strengthening of UCPyPFE and Participating Provinces. 36 Covered anaerobic lagoons, Upflow Anaerobic sludge Blanket Reactor ­ UASB, or anaerobic filter. 37 These amounts include price and physical contingencies. 38 If both the first (P120211) and second (P125151) NG Water Infrastructure Projects were to finance works operated by the same service provider, only one Project would generally support the entire institutional strengthening program for that service provider. This component, and subcomponent (ii) can also support service providers or subproject preparation in provinces that do not have an infrastructure subproject financed under Component 1. 21 8. Component 3: Project Management and Supervision (US$15 million, all financed by the Bank): (i) Carrying out of specialized independent technical, environmental and social supervision of Subprojects' implementation, as required; (ii) Carrying out of Project audits and monitoring and evaluation activities under the Project; and (iii) Provision of administrative and operational support (including the provision of Operating Costs) to UCPyPFE in the administration, monitoring, coordination and supervision of Project implementation. 39 39 As mentioned in paragraph 10 of the main text, implementation arrangements for both the first and the second NG Water Infrastructure Projects are the same. Each Project will fund its share of the combined management and supervision costs. 22 Preliminary Pipeline of Potential Subprojects Estimated Province Locality Project Amount (US$) Valle Viejo y Fray Sewerage system Catamarca 12,750,000 Mamerto Esquiú Saenz Peña Sewerage System Master Plan, conveyance Chaco system, household connections, pumping 32,500,000 stations, and wastewater treatment plant Area Metropolitana del Gran Resistencia Metropolitan Area Sanitation Chaco 59,770,000 Gran Resistencia System Area Metropolitana del Second phase of sewerage system, household Chaco Gran Resistencia connections, pumping stations and conveyance 27,500,000 system Villa Ángela Sewerage System Master Plan, conveyance Chaco system, household connections, pumping 17,500,000 stations, and wastewater treatment plant San Martín Sewerage System Master Plan, conveyance Chaco system, household connections, pumping 15,000,000 stations, and wastewater treatment plant Corrientes Corrientes Wastewater treatment plant 50,000,000 Corrientes Ituzaingó Sewerage system 19,500,000 Corrientes Goya Sewerage system 11,750,000 Ciudad de Formosa Main collector, pumping stations and wastewater Formosa 40,000,000 treatment plant Quebrada de Humahuaca Sewerage conveyance system, household (Humahuaca, Tilcara, connections and in-situ sanitation solutions Jujuy 19,321,798 Maimará, Purmamarca, Volcán, Tumbaya) Misiones Apóstoles Sewerage system 23,850,000 Misiones San Vicente Sewerage system 19,800,000 Misiones El Dorado Sewerage system 18,302,500 Misiones Jardín América Sewerage system 16,300,000 Salta Salta Capital Main collector, 1st phase 5,376,569 Salta Salta Capital Main collector, 2nd phase 10,000,000 Salta Salta Capital Wastewater tretment plant expansión. 2nd phase 7,500,000 Salta La Merced-Cerrillos Main collector and wastewater treatment plant 5,776,954 Salta Tartagal-San Martín Main collector and wastewater treatment plant 8,032,245 Santiago del Santiago del Estero Santiago del Estero Sanitation and Wastewater 96,613,000 Estero System Santiago del Añatuya Sewerage system 25,000,000 Estero Villa Carmela, Tafí Viejo y Sewerage system and wastewater treatment plant Tucumán 41,891,499 Las Talitas Alderetes y Banda del Río Main collector and wastewater treatment plant Tucumán 41,588,392 Salí Concepción, Chicligasta Wastewater treatment plant and new activated Tucumán 13,844,788 sludge disposal plant TOTAL 639,467,745 23 Annex 3: Implementation Arrangements 1. Project Administration Mechanisms 1.1 Project implementation institutional arrangements 1. The Implementing Agency will be UCPyPFE within the MPF. 40 At present, the UCPyPFE is coordinating several programs financed by multilateral development banks, including the Water Infrastructure Project in the Norte Grande Region co-financed by the IADB 41 and the first NG Water Infrastructure (P210211) and NG Road Infrastructure Projects (P125151) financed by the Bank. The UCPyPFE will be in charge of Project administration and execution through a dedicated unit, the same in charge of the implementation of the first NG Water Infrastructure Project. Also, as in the first NG Water Infrastructure Project, works will be centrally executed and the dedicated unit will coordinate and implement all program activities including the handling of procurement, contracting, and payments to contractors and will act as necessary to meet the Bank's contractual conditions. Through this unit, the UCPyPFE will coordinate with other centralized and decentralized entities at the national and provincial levels, with the MPF providing overall oversight. 2. Although the UCPyPFE is currently managing a relatively large volume of projects financed by the Bank and other multilateral institutions, they will assign (with new contracting as required) a group of professionals to specifically handle the NGR water and sanitation projects, in particular fiduciary, environmental and social issues, so there will be sufficient capacity in the implementation unit to manage the projects. The provinces will participate in the preparation phase through the completion of studies, safeguard instruments and institutional arrangements for subproject implementation on the ground. 3. Upon completion, the WSS assets will be transferred to the provinces and by the provinces to their WSS service providers for their management, operation and maintenance under a Participation, Transfer, and Maintenance of Works Agreement (PTA) acceptable to the GoA and the Bank. Participating provinces will sign the PTA with the MPF and commit to ensure that the service provider will provide the financial resources to properly managing, operating and maintaining Project-financed works or, in case of operational deficit, the Province will provide the O&M funding. 4. The provinces, through the signature of the PTA, will commit to: a) Work with and support the UCPyPFE in the execution and supervision of technical aspects of the subproject; b) Meet the requirements for subprojects to be eligible for financing under the Project; c) Coordinate the activities needed to achieve Project objectives and allocate all human, technical, and administrative resources needed to meet the obligations assumed; 40 The UCPyPFE was created by Resolution 165/2000 of the Ministry of Infrastructure and Housing, and its duties and responsibilities were modified by Executive Decree 1,142/2003. 41 Implementation of the IADB Program, although at the onset suffered significant delays mostly due to capacity constrains at the local level for the preparation of the subprojects , is well underway, with 100% of the funds committed and current good standards in the preparation of bidding documents, procurement and supervision of ongoing works. 24 d) Take ownership of Project-financed works and equipment; and e) Guarantee, once works have been transferred, that sufficient human, physical, and financial resources are in place to guarantee their O&M, in accordance with a plan approved in advance. Central Implementing Agency. In charge of Contracted by UCPyPFE for the supervision of UCPyPFE procurement, FM, contracting and payments. Supervision firm works, including environmental supervision Represents federal government. Reviews of subprojects. eligibility criteria, and presents to the Bank for no objection. First responsible for safeguard compliance. Presents project to UCPyPFE for financing, signs Contracted by UCPyPFE for construction. Participating Province Contractor PTA with federal government, supervises service providers, and is responsible for service sustainability. Participates in consultation, EIA and EMP and overall supervision. Coordinates between UCPyPFE and service provider. Participates in subprojects' preparation and Participating service provider supervision. Responsible for the operation of the infrastructure. Participates in consultation, EIA and EMP and overall supervision and will enter into a tailored institutional strengthening program, and is accountable to the Province for service provision and sustainability. 5. The main responsibilities of the UCPyPFE will be to: i) Coordinate with provinces to identify subprojects for financing and carry out necessary assessments to ensure compliance with eligibility requirements; ii) Provide guidance and support to provinces and WSS service providers on technical, economic, environmental and social aspects in the preparation and implementation of subprojects; iii) Coordinate with provinces on the preparation and implementation of the institutional strengthening component; iv) Supervise the financial management, procurement and disbursement functions of the Project including keeping Project files and records; v) Retain auditors acceptable to the Bank to audit the Project accounts; vi) Oversee compliance with Bank safeguard policies on social and environmental issues; vii) Make official requests for no-objections to the Bank and liaise with the Borrower on official requests for changes to the Project scope or terms; and viii) Submit semi-annual progress reports detailing progress in achieving Project objectives. The format and content of these progress reports will be approved by the Bank. 25 6. Eligibility criteria for Participating Provinces in the NGR: Provinces participating in the program must comply with the following criteria: (v) Sign the Participation, Transfer and Maintenance Agreement with the MPF; (vi) Allocate and demonstrate that they have sufficient budgetary resources to operate and maintain Project financed works, as applicable; (vii) Demonstrate sufficient and sustainable technical and institutional capacity to manage, operate and maintain the investments 42; and (viii) Prepare an Action Plan to address sustainability of the subprojects, including the measures and targets that will lead to its sustainable operation. 7. General Eligibility Criteria for Subprojects: Without exception, the following general eligibility criteria 43 must be met for projects to be considered and financed under the Project: (i) Subprojects must largely benefit low income populations 44 and be consistent with Project objectives; (ii) Subprojects included in the Project must have complete technical designs, be economically viable and financially sustainable, be managed by stable institutions and warrant satisfactory environmental and social management; (iii) Compliance with the economic, financial, legal, technical, institutional, social and environmental eligibility criteria will be documented in relevant satisfactory studies 45, be approved by the UCPyPFE and have the formal No Objection of the Bank; (iv) Current and estimated revenues of the subproject, or the provincial WSS service providers (including any applicable subsidies from provincial or federal budget) must cover the current and estimated cost of operating and maintaining actual and future projects; (v) Participating WSS service providers will benefit an institutional and operational institutional development program establishing the targets and other measures that will support the sustainability of the investments and the overall provision of WSS services and address any identified weaknesses; (vi) The guidelines of the Project's Environmental and Social Management Framework (ESMF) must be followed to ensure compliance with applicable social and environmental safeguard policies including preparing the necessary instruments and undertaking consultation and disclosure, and in particular: a) The subproject must provide an EIA acceptable to the environmental authority of the relevant province and the Bank. The EIA will incorporate the results of public consultations, prepared following the guidelines of the ESMF. 42 These may be government institutions or a public or private company holding a concession. 43 Eligibility criteria are further detailed in the Project's Operations Manual. 44 At least 40% of investments will benefit low-income population as defined using Index of Household Material Deprivation (NBI), Unsatisfied Basic Needs Index, or Human Development Index or subproject specific socio-economic surveys. 45 Studies will follow agreed ToR and guidelines described in the OM. 26 b) The EIA must include mitigation measures and programs for the construction and operation phases. In the case of subprojects involving involuntary resettlement or affecting indigenous peoples, specific provisions will be outlined in a Resettlement Plan (RP) or Indigenous People Plan (IPP). c) All costs associated with the implementation of the subproject EMP, RP and/or IPP and any mitigation measures and monitoring programs must be budgeted for (under Component two of the Project). d) The subproject must demonstrate sustainability from an environmental and social standpoint, which entails preventing: (i) permanent negative impacts on protected areas or cultural heritage; (ii) negative impacts on species threatened by extinction; (iii) negative environmental impacts that cannot be mitigated to acceptable levels; and (iv) social costs deemed unacceptable and/or unable to be mitigated by the affected communities. 1.2 Measures to address capacity constraints 8. The administrative structure of the UCPyPFE will be strengthened in order to meet the incremental needs associated with the administration and execution of the Project, in particular in fiduciary, environmental and social safeguard aspects. Technical assistance for participating provinces and service providers will be available with the same goal. These efforts will be financed by component two and shared with the first Norte Grande Water Infrastructure Project (P120211) and with the Norte Grande Road Infrastructure Project (P120198), which will have the same execution unit. This setup will enable projects implementation to benefit from economies of scale. 9. Technical, environmental and social supervision. Works will be generally supervised by a specialized, independent consulting firm to be contracted by UCPyPFE. The UCPyPFE will provide further supervision and regularly inspect the works, as well as the implementation of the EMP and any social impact mitigation measures that takes place during construction. The implementation of social and environmental mitigation and compensation plans and minor investment projects will be supervised by the relevant entities in charge in each province with support from UCPyPFE as needed, depending on the capacity of the province. Consulting services for the supervision of major investment works will be hired before the contracts for the respective works are signed, according to terms agreed upon with the Bank. 2. Financial Management, Disbursement and Procurement 2.1 Financial Management 10. A Financial Management (FM) Assessment of the arrangements for the proposed Project has been carried out in accordance with OP.BP 10.02 ­ Financial Management, and in line with Bank specific guidelines 46. The assessment conclusion indicates that the proposed FM arrangements meet minimum Bank requirements. The UCPyPFE will be responsible for undertaking the financial management functions of the Project and has significant experience in 46 Financial Management Manual for World Bank-Financed Investment Operations; document issued by Operations Policy and Country Services OPCFM on March 1, 2010. 27 fiduciary aspects for similar Bank-financed operations, which has been taken into account for the FM assessment. 11. The risk assessment process aims at identifying FM risks so as to take appropriate measures mitigating identified Project risks. This enables the Bank to make decisions on the appropriate level of supervision intensity allocating FM resources in a manner consistent with assessed risks. The overall FM risk of the Project has been assessed as Moderate due to the overall adequate FM arrangements. 12. Budgeting Arrangements. Budget execution in Argentina is recorded in the federal government integrated budget and accounting system (SIDIF-SLU, Sistema Integrado de Información Financiera) and subject to control over the budgetary execution process. SIDIF integrates budget accounting and treasury functions and is also linked to the debt management (SIGADE). Secretariat of Finance manages SIDIF controls and consolidates budget execution, which is decentralized to spending units. Ministry of Federal Planning is included in the SIDIF and would create and maintain during Project implementation a separate budgetary line in its annual budget in order to allow tracking of budget resources from different sources and Project expenditures. 13. Accounting and Financial Reporting. The UEPEX system will be used to maintain the Project accounting records. It is an in-house information tool developed by the Federal Government whose use is mandatory for multilateral financed operations at the federal level and is considered adequate for accounting purposes. The Project chart of accounts will reflect disbursement categories, Project components and sources of financing. The cash basis of accounting will be used for recording the Project transactions. Annual financial statements for the Project would be prepared by UCPyPFE following the Public Sector Accounting Standards of Argentina; these rules are comprehensive and consistent with international public standards. UCPyPFE would also be in charge of the preparation of semiannual Interim Unaudited Financial Reports (IFRs) in a format satisfactory to the Bank, as follows: (i) Sources and uses of funds: for each calendar semester and cumulative (uses by category), uses of funds by component and beginning and ending cash balances; along with a reconciliation of the DA accompanied by copy of the bank statement; (ii) Physical progress: Allocated budget and financial execution compared to physical progress and results achieved. 14. Internal Control and Internal Auditing. The Ministry of Federal Planning is subject to internal audit by a national entity Sindicatura General de la Nación (SIGEN) which is under the jurisdiction of the executive branch. SIGEN supervises and coordinates the actions of the Internal Audit Units (IAUs) in all agencies including the Ministry, approves their audit plans, conducts research and independent audits, systematizes the information from its own reports and those produced by the IAUs. IAU's annual plan will include the review of Project activities as one of the measures in strengthening control over Project operations. The internal audit reports on the Project performance will be reviewed during Project supervision. 15. General flow of funds. Flow of funds will be centralized. The general arrangements are described in the following chart. 28 Figure A3-1 Flow of Funds Loan Account (WB) Advances in USD Reimbursement or retroactive financing Segregated DA Local Funding - BNA (USD) Project Account (AR $) Works, goods, and consultants Direct Payments 16. External Auditing. The Project annual financial statements will be audited under Terms of Reference prepared in line with Bank Guidelines by independent auditors and following auditing standards acceptable to the Bank. The audit report would be furnished to the Bank, as soon as available, but in any case not later than six months after the end of each audited year/period. It is expected that the audit will be conducted by the Argentine Supreme Audit Institution, Auditoria General de la Nación (AGN). The audit opinions that will be required to be submitted are presented below: Table A3-1 Audit Requirements Audit Report Due Date 1) Project Specific Financial Statements June 30 2) Special Opinions SOE ­ Designated Account June 30 17. The initial supervision plan is presented in the table below. The FM supervision scope will be adjusted by the assigned FMS according to fiduciary performance and updated risk. 29 Table A3-2 Financial Management Supervision Plan Type Timing Mechanism Objective On-site Visit Once a year Integrating · Review implementation of mitigation measures supervision · Review control framework missions. · Review Designated Account reconciliation · Update assigned risk. · Follow up on External Audit findings · Transactions review as needed IFRs Review Every six months Over the IFR · Review IFRs information consistency Financial Audit Once a year Over the Audit · Raise issues disclosed in Audit Report Review Report received. 18. Action Plan. Pending steps are presented in the table below. Action Responsible Entity Completion Date Request a specific budgetary line UCPyPFE To be included in 2011 annual in the Ministry of Federal budget Planning, Public Investment, and Legal Covenant Services' annual budget to follow Project execution. 2.2 Disbursement Arrangements 19. The disbursement arrangements are described in the following table: Table A3-3 Disbursements Arrangements Retroactive financing Eligible payments · Are paid up to one year before the date of loan singing, and after February 15, 2010; · For items procured in accordance with applicable Bank procurement procedures under Components 2 and 3 (except for works); and · Do not exceed US$10 million Reimbursements of eligible expenditures · Reimbursements of eligible expenditures of eligible expenditures pre-financed by the GoA after the date of into a bank account controlled by UCPyPFE. The minimum application loan signing size for reimbursement requests will be US$2,000,000. Other Disbursement Methods · Direct payments to suppliers. The minimum application size for direct payment requests will be US$2,000,000 · Advance to a segregated designated account in US$ managed by UCPyPFE, in BNA, with a ceiling of US$15,000,000 million for outstanding advances. Supporting documentation · Statement of Expenditures (SOE) 47 · Records (supplier contracts, invoices and receipts). 47 The Borrower through the UCPyPFE shall retain all records (contracts, orders, invoices, bills, receipts and other documents) evidencing expenditures under the Project until at least the later of: (i) one year after the Bank has received the audited Financial Statements covering the period during which the last withdrawal from the Loan Account was made; and (ii) two years after the closing date. The Borrower and the UCPyPFE shall enable the Bank's representatives to examine such records. 30 20. Loan proceeds would be disbursed against the following expenditure categories: Table A-3-4 Disbursements per Expenditure Category Percentage of Expenditures to Amount of the Loan Expenditure Category be financed (inclusive of Allocated (USD million) Taxes) 1. Works 48 169.5 80% 2. Goods, Works, Consultants' Services, 30 100% Non-consultant Services, Training and Operating Costs 3. Front-end Fee 0.5 100% Total Amount 200 21. The UCPyPFE shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines 49. 2.3 Procurement Plan and Procurement Arrangements. 22. The UCPyPFE will be responsible for carrying out the procurement and contract management, including works, goods, and non-consultant services, and consultant firms and individuals. UCPyPFE is staffed by an experienced professional team of around 20 people, organized in the following areas: economics, legal, financial, technical, social and environmental and procurement. Bank's assessment reviewed the organizational structure for implementing the Project, and the planned interaction between the Project's staff responsible for procurement and the provinces. Procurement for the proposed Project would be carried out in accordance with the World Bank's "Guidelines: Procurement Under IBRD Loans and IDA Credits" dated May 2004 revised October 2006 and May 2010; and "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" dated May 2004 revised October 2006 and May 2010, and the provisions stipulated in the Legal Agreement. 23. To the extent possible, works will be grouped in packages costing US$5 million or more, and goods and non-consultant services in packages costing US$500,000 or more. Consultant services provided by firms will be grouped in packages costing US$200,000 or more, per contract. The following will be subject to prior review by the Bank: (i) Works contracts with estimated value of US$5 million and above; (ii) goods and non-consulting services with estimated values of US$500,000 and above; (iii) consultant services by firms costing US$200,000 and above; (iv) consultancy services to be provided by individuals costing US$100,000 and above; (v) all contracts awarded using of direct contracting for works, goods and non-consulting services; and (vi) Single-Source Selection for employment of firms and Sole Source for individuals will be subject to prior review. The first two contracts for works, goods and services under each procurement method, and the first two contracts for selection of consultant firms under each selection method will also be subject to prior review regardless of 48 Includes physical and price contingencies. 49 "Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants", dated October 15, 2006 and revised in January 2011. 31 amount. As far as possible, the Procurement Plans would be prepared and analyzed for improved competition through the use of the method per lots (slice and packages). 24. The Borrower has developed a Procurement Plan for Project implementation which provides the basis for the procurement methods. This plan was approved by the Bank on March 1, 2011 and will be available in the Project's database and in the SEPA System (www.sepaargentina.org.ar). The Procurement Plan will be updated in agreement with the Project Team annually or as required to reflect actual Project implementation needs and improvements in institutional capacity. The Loan Agreement includes these requirements in the section on Special Provisions (Schedule 2, Section III.A.4). Schedule for Goods, Works and Non-Consulting Services 25. No specific works are identified at this stage. Future subprojects will be identified and appraised during the first months of implementation, and the Procurement Plan will be updated accordingly and uploaded in the SEPA System. 26. Given that there are certain local procurement procedures that are not fully consistent with the Bank Procurement and Consultant Guidelines, the Loan Agreement includes Special Provisions to address these. The Operations Manual (OM) includes advertising requirements and minimum timeframe for each procurement method (international competitive bidding, national competitive bidding, shopping). In the event that UCPyPFE's capacity becomes challenged, the Unit will recruit additional staff as needed. The Bank will also assess implementation progress every six months and identify any issues that need to be resolved. Procurement documents will be kept in files located in the UCPyPFE procurement area. 27. A technical capacity assessment of the Participating Provinces will be carried out by the UCPyPFE, and the necessary action plan will be agreed before the beginning of the execution of each provincial procurement plan; said action plans will identify the areas in which consultant services for technical support could be needed. A detailed plan and timetable would also be prepared by the UCPyPFE for the different activities involved in each large work contract (pre- qualification if needed, design preparation, listing the needed drawings and technical documents, bidding process, and supervision) before launching any process. The OM clearly defines responsibilities during bidding processes and contract supervision at national and provincial levels. The OM also includes a Price Monitoring Mechanism acceptable to the Bank. Specific and detailed procedures for facing disputes through adjudication and international arbitration would be included in the Bidding Documents. 28. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment of the UCPyPFE has recommended annual supervision missions to visit the field to carry out post review of procurement actions. 32 3. Environmental and social (including safeguards) Social Issues 29. The Project's Rapid Social Analysis (SA) has identified opportunities for positive social impacts and main risks during the construction and operation phases. The SA anticipates an overall positive social impact. The Project is expected to benefit at least around 5% of the NGR population, of which an estimated 52% are women. The main opportunities for positive impacts during construction and operation arise from: (a) direct and indirect employment creation and multiplier effects in the chain provision of goods, supplies, equipment, services and income generation, which will contribute to growth of local economies and discourage migration; and (b) better health and hygiene conditions stemming from increased access to WSS and reduced contact with untreated and polluted wastewater sources, decreasing costs associated with treating these health problems. 30. The SA has also identified some key social risks due to significant urban population growth from rural-urban migration as a result of land tenure and natural resources pressure, which has increased informal urban housing settlements, including indigenous peoples in urban communities. Potential impacts of subprojects on these groups are expected to be more beneficial than harmful due mainly to the social and environmental setting: (i) rehabilitation and expansion of existing systems in urban and peri-urban areas integrated in the existing land-use legal framework; and (ii) access to WSS services in these urban areas has been a long-standing goal of these communities, including indigenous peoples. 31. A series of inclusiveness measures are foreseen within the subprojects' communication and social programs. These measures will be aimed at identifying and addressing negative impacts, or enhancing positive impacts, among vulnerable groups (attending to factors like ethnicity, gender, age or other characteristics). These measures will be taken by the relevant parties, as indentified in the Indigenous People Planning Framework (IPPF) and Resettlement Policy Framework (RPF) of the Environmental and Social Management Framework (ESMF), which is part of the Project's OM. These measures will include timely and thorough consultations with populations potentially impacted by the subprojects. Additional activities will include, depending on local needs and practices: (i) training, capacity building and knowledge sharing activities aimed at achieving better planning of enhancement and expansion of WSS within agencies in charge of water, land use, natural resources exploitation, indigenous peoples, health, education, and income generation; (ii) social impacts analysis, including gender-based income groups differences in affordability, roles and uses of WSS services to predict how these groups, particularly women can participate in and be affected by these type of planned development intervention; and (iii) educational and awareness programs for specific groups such as squatter communities and indigenous peoples in the subproject area of influence. 32. Since the Project is essentially demand-driven, specific Project alternatives will be discussed in the context of: (i) project objectives; (ii) subprojects' eligibility criteria; and (iii) subproject ownership at the authorities' level and community and stakeholder consultation. 33 33. With regard to Bank's social safeguards, an IPPF and a RPF have been prepared by the GoA as part of the ESMF, following GoA's legislation and Bank's Indigenous Peoples (OP4.10) and Involuntary Resettlement (OP4.12) safeguard policies. As a subproject eligibility criteria pre-agreed in the OM, specific subprojects will undergo a social and environmental screening and/or full assessment for the pertinent works following the ESMF. 34. All land acquisition or compensation required for the Project will take place according to the procedures described in the RPF based on the Bank OP/BP 4.12. The RPF was prepared to guide the preparation of resettlement or land acquisition plans including inter alia (i) freedom of choice of the compensatory measure; and (ii) compensation at cost reposition when appropriate and finalized before starting of civil works. 35. The preparation of any required Indigenous Peoples Plan (IPP) under the Project will follow the procedures described in the IPPF based on the Bank's OP/BP 4.10, and takes into account some key aspects, which include (i) social assessment and previous, free and informed consultations for affected IP; (ii) action plan duly budgeted with measures to ensure that IP obtain adequate social and economic benefits generated by the project as appropriated or to prevent, reduce, mitigate or compensate negative effects; and (iii) a monitoring and grievance mechanism. 36. The analysis of two potential subprojects from the Preliminary Pipeline of Potential Subprojects (see Annex 2), in the province of Chaco (Gran Resistencia Metropolitan Area Sanitation System) and in the province of Santiago del Estero (Santiago del Estero Sanitation and Wastewater System), served as a means of scoping anticipated impacts, flagging important gaps in analysis and identifying capacity constraints for use in developing the ESMF, IPPF and RPF that would be applied to all subprojects, and to scope some of the additional studies and activities that would be required before any subproject could be declared eligible for funding under the Project. In order to be approved, all subprojects without exception would need to comply with the criteria established for inclusion in the program, which include having background studies and consultation processes that meet Bank standards. 37. Disclosure and consultation activities during Project preparation and arrangements for future subprojects are described in paragraph 53 below. Environmental Issues 38. Environmental Categorization: The Project has been classified as a Category A following the Environmental Assessment safeguard policy (OP4.01), in consideration of the impacts and mitigation programs needed as part of the construction and rehabilitation of large scale wastewater treatment systems which are anticipated to be funded under the project. In addition to this, the categorization process takes into account: (i) the social and environmental sensitivities of the project area, (ii) the types of proposed investments, (iii) the weak provincial, municipal or utilities capacities; and (iv) the unknown scope of future investments. 39. Safeguards Policies triggered. Because of the nature of the potential impacts of these types of works, the Project also triggers the following World Bank environmental safeguard 34 policies: Environmental Assessment (OP4.01), Natural Habitats (OP4.04), Forests (OP4.36), Physical Cultural Resources (OP4.11), Pest Management (OP4.09), Safety of Dams (OP4.37) and Projects on International Waterways (OP7.50). 40. Anticipated general environmental impacts of participating subprojects. Overall the works associated with the construction and rehabilitation of the sanitation and wastewater systems, such as those found under the Project, are expected to be environmentally beneficial and sustainable, if they are managed under good practice standards and if their economic and technical sustainability is ensured. The construction of sewerage and wastewater treatment system will reduce the discharge of contaminated wastewater into the local water bodies. It will also improve the quality of life of the local population by reducing the risk of contracting waterborne diseases and it should provide benefits for the surrounding environment by significantly reducing water pollution. 41. Safeguard instruments. Once specific investment proposals under proposed subprojects are firmed-up and undergo the initial screening to confirm eligibility and scope out the key issues, eligible subprojects will be required to follow the procedures outlined in the ESMF to ensure compliance with safeguards policies applicable to the specific subproject. The ESMF includes a detailed environmental assessment methodology for the assessment of subprojects including: (i) procedures for environmental and social screening of activities; (ii) procedures for preparation of EAs and EMPs including draft TORs and guidelines for mitigation measures; (iii) procedures and guidelines on public consultation and disclosure procedures; (iv) procedures for clearance of EAs; (v) procedures for supervision of EMP implementation; and (vi) an institutional strengthening plan for entities in charge of selected subprojects. 42. Environmental Management Plans and Environmental Technical Specifications: The EMPs include Environmental Technical Specifications (ETS) for contractors, which also foresees social measures to avoid and reduce impacts on surrounding environments, properties and address social impacts. These specifications include measures to address physical cultural resources findings (in line with OP4.11 on Physical Cultural Resources), avoid impacts in natural habitats (in line with OP4.04 on Natural Habitats) and make an eventual and proper application of chemical substances (in line with OP4.09 on Pest Management). The ESMF also includes a set of measures to activate and apply the Safety of Dams policy (OP4.37) in future subprojects if necessary. Contractors will develop a detailed manual to achieve, inter alia, a sound environmental management during the operational phase of the systems. Environmental and socio-environmental mitigation measures will include best practices for mitigating impacts during construction, restoration of construction sites, landscape considerations, and health and safety measures compatible with Bank standards 50 and national law. The UCPyPFE which also implements the mentioned IADB project is familiar with all these best practices. All subprojects will receive the no-objection from the Bank prior to initiation of bidding processes and delivering of the ETSs to contractors. 43. Bank's OP 7.50 on Projects on International Waterways is triggered as some of the subprojects to be considered for funding may be located on waterways that form part of the Paraná/Paraguay River system which originates in Brazil and flows into Bolivia and Paraguay 50 Environmental, Health, and Safety General Guidelines, World Bank Group (2007). 35 (the Paraguay River) and Paraguay and Argentina (the Parana River). The Paraguay discharges its water in the Parana and further downstream it merges with the Uruguay River to form the La Plata River, which flows from Argentina to Uruguay. This system comprises an international waterway for purposes of The World Bank's OP 7.50 paragraph 1. 44. It is envisaged by Bank staff that the Project will not cause appreciable harm to other riparians and will not be appreciably harmed by the other riparian's possible water use. Following OP/BP 7.50 requirements, a formal notification of the proposed Project and its details has been sent by the Bank to the Republic of Paraguay and the Oriental Republic of Uruguay on behalf of the Government of the Argentine Republic. The notification period expired on March 3, 2011 and no response has been received. 45. Capacity assessment. In addition, an assessment of the current institutional capacity at the UCPyPPF and local provincial levels was conducted during Project preparation. Overall, it was found that the staff in the UCPyPFE is competent to manage safeguard issues, but the unit will require additional human resources to handle the increased work load involved by the three new Bank financed projects 51 at the UCPyPFE level and to incorporate specific specialization (i.e in the area of communications). Areas that have been identified for strengthening include: (i) the generation of baseline and environmental monitoring studies at the local level; (ii) the design and implementation of mitigation measures; (iii) the capacity to incorporate social dimensions in EIA processes, including consultation and social participation and indigenous peoples planning in all stages of subproject's cycle; (iv) the dissemination, consultation and claims and redress mechanisms at the local level, and the coordination mechanism with the central level; (v) involuntary resettlement practices; (vi) the integration of communication plans into the institutional system both at the federal and provincial level; and (vii) capacity for monitoring activity outcomes at both levels. A specific assessment of the environmental and social instruments implementation will be undertaken within the mid-term evaluation and at Project completion stage. 46. The following table includes a summary of the Institutional Strengthening Plan for the management of social and environmental issues which is part of the ESMF. Activity Component Estimated cost (US$) Regional workshops on social and environmental management, with Component 2 50,000 emphasis on Bank safeguards. Environmental baseline and a platform to monitor the sewerage systems Components 2 and 3 1,000,000 Elaboration of corporate guidelines for environmental management for Component 2 500,000 WSS service providers. Participation in national and international workshops and other events Component 2 20,000 related to environmental and social management in the sector. Study tours Component 3 50,000 Hiring of environmental and social management specialists for the Component 3 450,000 UCpyPFE 51 First (P0120211) and Second (P125151) NG Water Infrastructure Projects and NG Road Infrastructure Project (P120198). 36 Activity Component Estimated cost (US$) Environmental and Social Impact Assessments for Subprojects Component 2 1,000,000 Technical support staff for subprojects Components 2 and 3 500,000 Consultancies for independent Environmental and Social inspection of Component 3 200,000 works. Technical equipment for the Provincial Water Authorities and service Component 2 1,000,000 providers Training activities at the operational and strategic levels on social issues Components 2 and 3 150,000 Preparation of Manuals, guidelines, and operational protocols on Components 2 and 3 100,000 environmental and social aspects of investment planning. Communication Strategy and communication plans for the Project and Component 2 300,000 subprojects. Interaction, claims, and conflict resolution management system. Components 2 and 3 300,000 Institutional Strengthening Plan for indigenous peoples and resettlement Component 2 and 3 1,050,000 issues according to the IPPF and IRF. Total 6,670,000 47. Disclosure and consultation activities during Project preparation and arrangements for future subprojects are described in paragraph 53 below. Institutional Arrangements for Management of Environmental and Social issues 48. UCPyPFE's role. The UCPyPFE (through a dedicated unit) within the MFP at the Federal Government level will be responsible for safeguard compliance and for the supervision of environmental and social management issues during the construction phase of subprojects. The UCPyPFE will assign qualified staff dedicated to the management and supervision of the EMPs during subproject implementation and ensure periodic independent audits, and supervision of environmental and social performance by contractors, the provinces and service providers. The UCPyPFE will also provide support in coordinating information disclosure and consultations. 49. Contractor's role. All construction contractors will be required to assign an environmental engineer or other suitably qualified staff, including a social specialist, to oversee compliance with the EMP (construction phase) on a day-to-day basis. The specific requirements for environmental and social mitigation measures will be included in bidding documents and as part of the standard construction contract package as Environmental Technical Specifications (ETS). 50. Province and Service Provider role. As part of the PTA to be signed between the federal and provincial governments, the UCPyPFE will transfer to the provincial level the following roles and responsibilities: co-participation with the UCPyPFE in subprojects' screening, consultations processes, environmental and social assessments, design and implementation of IPPs and RPs, and monitoring and supervision. The service providers will have the primary responsibility for establishing baselines and monitoring specific activities under the construction and operation of the systems. This co-participated transfer of roles and responsibilities will also 37 include coordination arrangements to ensure that local service providers internalize capacity towards the operation of the proposed works. This capacity will be created in collaboration with the UCPyPFE during construction, though it will continue during the operation as necessary. 51. During the operational phase, the relevant service providers in charge of operating the works will have specific institutional responsibilities to address avoidance or mitigation of all operationally related impacts. Through their environmental staff, utilities will ensure that competent core staff will be available at all times to supervise the implementation of environmental and social management measures directly under their control and to ensure compliance with the agreed EMPs (operational phase) and environmental license obligations. The Project, through component 2, will finance capacity building and TA activities to ensure sufficient and qualified resources are available for the management of environmental and social aspects related to the proposed works during their operation. 52. Management of Claims and Disputes System. A Management of Claims and Disputes System has been described in the ESMF and will be the joint responsibility of the UCPyPFE and the participating Provinces, and will be channeled through four levels, one internal (at the subproject level in the field through contractors, the Province and the UCPyPFE), and the other three external including mediations, ombudsman, and judicial. Specific mechanisms will be located in the work sites, in the Provinces, and in the UCPyPFE's facilities in Buenos Aires. Channels to receive claims and disputes will comprise a phone line, web site, social monitoring, among others, according to the characteristics and needs of users, including indigenous peoples as needed. In all cases, a systematic record will be kept of the date of reception and resolution of claims 52. 53. Disclosure and Consultation. The ESMF was first disclosed on UCPyPFE's website on September 28, 2010 and in the Bank's Infoshop on October 20, 2010. Final drafts of the Frameworks (ESMF, IPPF and RPF) have been publicly disclosed in-country and in the Infoshop on February 24, 2011. All Frameworks (ESMF, IPPF and RPF) have been consulted through three different channels: (i) expert peer review of the documents by two internationally recognized 53 professionals with substantial experience in the WSS sector and also in working with indigenous communities in Argentina; (ii) a virtual review as part of which the Project documents were shared for comments with a variety of institutional stakeholders at the federal and provincial levels, including provincial environmental agencies and institutions related to water resources provision and management, NGOs and indigenous affairs institutions; and (iii) organization of focus group targeted meetings to discuss any comments to the frameworks in two provinces of the NGR on January 25-27, 2011 54. Additionally, the Communication and Consultation Framework (CF) of the ESMF requires broad dissemination of information on the Project to ensure an open process of discussion about its scope and objectives, as well as timely 52 See ESMF for additional details. 53 Angel Menendez (ESMF), Pia Pacheco (IPPF and RPF). 54 The exercise of dissemination and focus-group discussions of the safeguard framework has not generated to date any comments requiring a modification of the framework documents (in particular, the focus group discussion conducted in Santiago del Estero has highlighted the early involvement of indigenous people in the sub-projects assessment cycle, something which was already contemplated). UCPyPFE has agreed to maintain a continued outreach effort during implementation to disseminate Project information and key documents to enable participation of institutions that could not attend the focused group discussions during preparation. As an example, the ESMF has been submitted to the National Environment Secretariat. Details on comments received in UCPyPFE's report on the consultation process, available in UCPyPFE website and in the Infoshop. 38 and thorough consultation for relevant stakeholders of future subprojects to ascertain their views, identify potential adverse and positive impacts, and define adequate mitigation measures, especially for category A subprojects where meaningful consultations will be required. 4. Monitoring & Evaluation 54. The monitoring and evaluation system is designed to assess whether or not the Project is being implemented in line with the proposed objectives and to measure fulfillment of agreed targets. Project progress reports will be prepared by the UCPyPFE on a semi-annual basis and submitted to the Bank. These reports should indicate the progress made under the different Project components and measure performance against the results indicators established in the results framework (Annex 1) and other relevant activities financed by the Project. In addition, progress reports will include information regarding: (i) disbursement performance over the period and an updated disbursement calendar; (ii) a procurement report, and an updated procurement plan for activities under each of the Project's components; (iii) progress in the implementation of the EMP laying out any issues identified as well as documenting positive environmental and social impacts of the Project in the areas of intervention; (iv) a section describing potential developments that could affect Project implementation, which should consist of a review of the main risks and the impact of mitigation measures envisioned by Appraisal (see Annex 4); and (v) an annual operation plan for the following year, presented in the second semester report. Collaboration arrangements between the UCPyPFE and participating provinces relevant institutions for monitoring of different outcome indicators will be included in each PTA. 55. Collaboration arrangements between the UCPyPFE and the participating provinces for monitoring of relevant outcome indicators and intermediate indicators will be included in each PTA. The Project's OM provides more specific procedures and monitoring and evaluation responsibilities at the provincial and national level. 39 Annex 4: Operational Risk Assessment Framework (ORAF) ARGENTINA Second Norte Grande Water Infrastructure Project Project Development Objective(s) Description: The Project Development Objective is to increase sustainable access to sanitation and water supply services in the Norte Grande region of Argentina, by providing investments in infrastructure and supporting institutional development. 1. Number of people in urban areas within the NGR with access to sewerage and wastewater treatment services as a result of the infrastructure built under the Project. PDO Level Results 2. Number of new household sewerage connections built or benefiting from rehabilitation works built under the Indicators: Project. 3. Evidence that at least three (3) service providers of the total supported by the Project have undertaken and achieved the targets (including operational and financial targets) agreed upon in an institutional strengthening program financed by the Project. Risk Category Risk Rating Risk Description Proposed Mitigation Measures Project Stakeholder Risks H Borrower relations: Project implementation is Disclosure and consultation of Project documents delayed or discontinued due to main public/ (manuals, safeguard frameworks, others) and specific stakeholder opposition or lack of sufficient subprojects that are selected for funding will continue knowledge of the overall Project or specific throughout Project implementation following the subprojects once specific investment proposals are Communication and Consultation Framework (CF) of firmed up. the Project's Environmental and Social Management Framework (ESMF). Direct Stakeholder views: Envisaged consultation A general Communications Strategy for the Project and information sharing activities fail to gain will be further developed and completed during the stakeholder support for each specific subproject first year of project implementation delaying or discontinuing its preparation. UCPyPFE website has been updated to present information on the different Projects financed by the Bank and other multilateral institutions supporting the 40 Risk Category Risk Rating Risk Description Proposed Mitigation Measures framework documents and subproject EIAs 55. NGR WSS sector, with a separate space for UCPyPFE has set up an electronic address for questions and complains at infonortegrande@minplan.gov.ar UCPyPFE has prepared a "Manual for the Preparation of Subprojects" for dissemination consistent with the ESMF for NG Water Infrastructure Project I and a similar one will be done for NG Water II - intended for distribution to non-technical parties. The objectives of the Project are shared by other donors active in the region in the sector. Implementing Agency Risks H Need to strengthen capacity and increase resources The UCPyPFE will retain overall responsibility for at the local and central level in project management project implementation. This unit has experience and and works supervision, as well as environmental capacity to comply with assigned responsibilities and and social safeguards. conduct financial management, procurement and safeguards. The fact that all procurement and FM will Lack of current sufficient resources at the be handled through the Central Unit (with some UCPyPFE to manage the additional workload could participation from the Provinces) is in itself a generate delays in project implementation and mitigating measure for the risk of lack of capacity at jeopardize PDO achievement. the local levels. Participating Provinces will be in charge of some technical activities (project design, EIA, During implementation, an agreement will be reached elaboration of Resettlement Plans and on the number and qualifications of staff that will be Indigenous People Plans amongst others), needed to ensure the smooth operation of the unit with the increased workload. Any additional necessary fiduciary assessments for financial management, procurement and safeguards will also be undertaken as part of project implementation. Procurement will be carried out by the UCPyPFE, and the supervision of construction will be generally 55 http://www.ucpypfe.gov.ar under "Programas". 41 Risk Category Risk Rating Risk Description Proposed Mitigation Measures carried out by an independent firm contracted by UCPyPFE. The Loan Agreement includes the Special Procurement Provisions consistent with the FAP to increase competition and civil society monitoring, through (i) electronic publication of procurement notices, bidding documents, requests of expressions of interest, contract award reports and Procurement Plans; and (ii) publicly accessible Procurement Plans in the Procurement Plan Execution System (SEPA). The Borrower is assessing the technical and institutional capacity of the participating provinces to handle environmental and social issues An action plan to strengthen capacity will be agreed before the beginning of the execution of works in each participating province; such action plans will identify the areas in which specific capacity building activities and technical support could be needed. The Operations Manual will clearly define responsibilities during preparation, bidding processes and contract supervision at national and provincial levels. Project Risks · Design Inadequate design and supervision capacity and the All works will be subjected to detailed technical H local level would jeopardize PDO achievement. review by the UCPyPFE and the Bank. The Operations Manual will also include a Price Monitoring Mechanism acceptable to the Bank. Typical works will require specialized independent supervision (which will be funded under the project management component). The Project will also fund a 42 Risk Category Risk Rating Risk Description Proposed Mitigation Measures support structure for the implementation through targeted/specialized TA, and the financing of permanent consultants at the local and central levels as required. Lack of participation from Provinces or insufficient At least two subprojects are already in an advanced M-I pipeline of soundly prepared projects means stage of analysis/preparation and an additional implementation is delayed. pipeline (see Annex 2) with varying preparation degrees has been identified. During preparation and implementation the Project will provide all necessary support to the participating provinces to finalize subproject preparation studies and other required activities (safeguards instruments) in line with national, provincial and Bank standards. This risk is further mitigated by the high level of Social and Project ownership and commitment at the local level. Environmental · M -I Limited capacity for environmental and social This risk will be partially mitigated by adding key management negatively affects achievement of environmental and social staff positions in the two PDO and can potentially damage the Bank's participating levels (national and provincial) together reputation. with clear safeguards implementation and supervision arrangements. The unknown nature of future subprojects that could eventually be located in fragile environmental Clear guidelines are included in the Project ESMF, and social contexts could present risks to IPPF and RPF to guide the preparation of subproject's implementation. EIA, Social Assesemt (SA), EMP, ETS, RP and IPP as needed. Sanitation projects will be planned in a region where baseline information on water quality of Technical assistance, training and capacity building receiving waters is neither existing nor systematic. activities on these issues will be financed under Component 2. Training activities will be addressed at permanent personnel that are likely to remain within the sector entities in the different provinces. Capacity building will aim to be institutionalized to avoid loss of institutional memory. The project will finance environmental baseline and 43 Risk Category Risk Rating Risk Description Proposed Mitigation Measures monitoring activities in order to ensure a realistic assessment of impacts and precise mitigation measures. Processes for strategic environmental assessment, receiving body water quality baseline studies, water monitoring programs, and capacity building Program and Donor L investments have been included in the ESMF. · Given the Project is part of a wider Program The objectives of the Project are shared by other financed by multiple donors, a lack of success in donors active in the region in the sector, and with the other programs or capacity constrains could coordination of the UCPyPFE, the donors will negatively affect the implementation of the Project. continue to communicate to ensure good levels of Delivery Quality cooperation, coordination and complementarity. · H Given the fragile financial situation of some service Participating provinces must sign a Provincial providers in the region, there is a risk that a lack of Transfer and Maintenance Agreement with the sufficient revenues could affect the proper UCPyPFE in which they guarantee the allocation of maintenance and sustainability of investments. sufficient budgetary resources to maintain project- financed works. Component 2 of the Project will support a series of measures aimed at improving the sustainability of WSS service provision. Technical and Financial sustainability of investments is strengthened by: (i) an Action Plan for the sustainability of the sub-projects which will include measures to be undertaken at the level of the province and WSS service provider to guarantee the sustainability of investments during the operation; (ii) commitment by the GoA at the national and provincial levels to keep providing concessional financing to the investment and operation of the services; (iii) improved operational efficiency expected under the institutional and operational strengthening programs for service providers; (iv) improved service quality resulting from investments and TA; and (v) possible rationalization and optimization of user rates structures and available 44 Risk Category Risk Rating Risk Description Proposed Mitigation Measures subsidy schemes to ensure affordability to users taking into consideration poverty factors and involvement of stakeholders. Overall Risk Rating at Overall Risk Rating During H H Comments Preparation Implementation 45 Annex 5: Implementation Support Plan Strategy and Approach for the Implementation Support 1. The Implementation Support Strategy has been designed based on the following considerations: · The Project is part of an on-going Program for the Development of the NGR, which includes projects financed by IADB, as well as the Bank. · The Project has been prepared in parallel with the Norte Grande Water Infrastructure Project (P120211) and its implementation will be managed by the same unit, the UCPyPFE, which is also coordinating the implementation of the on-going Program for the Development of the NGR. · All subprojects in the pipeline will need to comply with the agreed eligibility criteria to be selected for financing. · Since the Project will support further pipeline development and subproject preparation, the Project's area of implementation includes the nine provinces of the NGR, extensive travel will be needed during supervision, in particular during the initial phases of implementation. · The Project will be supervised by a mix of HQ and CO based staff. In addition to sector specialists and safeguard and fiduciary staff, the Bank's team will also be supported by international and local consultants, particularly in relation to technical and safeguard issues. · Frequency of supervision missions will likely be higher at the beginning (4 per year) to decrease to 2-3 per year after project implementation regularizes. · Fiduciary and safeguards training will be offered to the UCPyPFE, and to relevant provincial staff as part of the institutional strengthening activities in component 2. · Coordination with IADB will be sought and joint missions will be organized whenever possible. 2. The Implementation Plan will be revised regularly during implementation on the basis of project progress and continuous risk assessment. Implementation Support Plan 3. Technical Support. The financing of large scale water supply and sanitation systems will require hiring high level engineers to assist preparing and reviewing technical studies. Additionally, the development and operationalizing of institutional strengthening plans for the participating utilities may require the participation of international consultants highly experienced in this area. Specifically: · Component 1 requires strong engineering expertise in water supply and sanitation infrastructure, with emphasis in wastewater treatment. The Bank team is relying on the support of local and international consultants, as well as HQ and CO staff. In addition to the supervision of the infrastructure, the focus will be on activities supporting efficiency improvements for which specific consultants and staff (potentially cross-support from other regions and/or the anchor) will be sought. 46 · Component 2 requires expertise in the areas of utility management and institutional and financial analysis. Activities under this component will be carried out by the sector and technical specialists in the Bank team, supported as appropriate by local and international consultants. · The Safeguard Advisory Team (SAT) in the Bank's Latin America and the Caribbean Region will be actively involved during project implementation and in particular in the clearance and Bank approval of category A subprojects (and their relevant safeguard related studies). 4. Fiduciary support. As stated in Annex 3, the UCPyPFE has experience implementing several programs financed by multilateral banks and already includes a specialized unit dealing with FM and Procurement. Additional measures will be taken during implementation to strengthen the UCPyPFE to properly manage the additional work load represented by this Project, as well as to properly supervise processes. Specifically: · Procurement: Implementation support will include: (i) providing training to members of the UCPyPFE; (ii) reviewing procurement documents and providing timely feedback to the procurement units/specialists; (iii) providing detailed guidance on the Bank's Procurement Guidelines; and (iv) monitoring procurement progress against the detailed Procurement Plan. · Financial Management. Supervision will review the Project's financial management system, including but not limited to, accounting, reporting and internal controls. Supervision will also cover sub- projects on a random sample basis. The Bank team will also work to assist the UCPyPFE in improving coordination among different departments and units for financial management and reporting. 5. Safeguards support. To support the management of social and environmental issues (particularly at the local level), a special focus will be placed on safeguards supervision, including training in specific areas identified as part of the Bank's assessment (See Annex 3). The Bank's supervision team includes a Lead Environmental Specialist and a social development specialist, and will require additional support from consultants during key implementation phases such as: review of EIAs, EMPs, resettlement and land acquisition plans, environmental supervision, and the screening of new subprojects for eligibility. Independent peer reviewers specialized in technical, environmental, and social matters related to water and sanitation will be retained to review specific draft EIA and other social safeguards documents to provide independent analysis of the adequacy and merits of the proposed subprojects providing recommendations as necessary during key stages in the process. 6. Thematic support. Besides the supervision of the Project itself, the scope, nature and objectives of the project indicate that there will be a continuous need of policy dialogue, particularly in the areas of planning, efficiency improvement and financial sustainability. The Bank team expects that most of this dialogue will be led by the Project's sector specialist together with representatives from the Country team. Specific support from other sector specialists or specialists from other fields might be needed at certain times of project implementation. 47 7. Implementation main focus. The following table summarizes the main focus of implementation during the life of the project: Time Focus Resource Estimate Partner Role First 12 months Screen for eligibility and 150% of supervision Joint missions with IADB, appraise subprojects in the norm when possible. pipeline. Develop efficiency improvement plans with participating service providers. 12-24 months Subproject selection. Supervision budget Joint missions with IADB, Initiate procurement process based on norm when possible. for new subprojects. Assist participating service providers in the implementation of efficiency improvement plans. 24-36 Complete procurement for new 150% of supervision Joint missions with IADB, subprojects. norm when possible. Continue assisting participating service providers in the implementation of efficiency improvement plans. Mid-term review mission. 36-60 Keep project implementation Supervision budget Joint missions with IADB, on track. based on norm when possible. Closing Drawing lessons learned and Supervision budget NA mainstreaming good practices. based on norm Skills Mix Required 8. The following table summarizes the proposed skill mix and number of staff weeks in the initial phase of project implementation. It is expected that demand will change with time. Skills Needed Number of Staff Number of Trips Comments Weeks CO based Sector Specialist 12 6 Based in Country Office HQ based Sector Specialist 4 4 Based in HQ Lead Environmental Specialist 3 3 Based in HQ Environmental Specialist 8 5 Based in Country Office Social Specialist 5 4 Based in Country Office Procurement Specialist 4 4 Based in Country Office Financial Management Specialist 1 4 Based in Country Office Disbursement Specialist 1 0 Based in Country Office Consultant(s) on Efficiency 6 2-4 International Consultant Improvement and Institutional Strengthening Consultant ­ Engineer 6 4-6 International Consultant Other specific consultants 6 2-4 International and Local Consultants 48 Annex 6: Team Composition World Bank staff and consultants who worked on the project preparation: Name Title Unit Patricia Lopez TTL, Senior Infrastructure Finance Specialist LCSUW Carlos E. Velez Lead Economist LCSUW Michel Kerf Sector Leader LCSSD Ricardo Lugea Senior Procurement Specialist LCSPT Natalia Bavio Financial Management Analyst LCSFM Marcelo Acerbi Environmental Specialist LCSEN Graciela Sanchez Martinez Social Development Specialist LCSSO Alejandro Alcala Gerez Senior Counsel LEGLA John Morton Senior Urban Environment Specialist LCSUW Victor Ordoñez Financial Management Specialist CTRFC Veronica I. Raffo Infrastructure Specialist LCSTR Ignacio M. Urrutia Duarte Junior Professional Associate LCSUW Federico Scodelaro Junior Professional Associate LCSEN Sofia Garcia Junior Professional Associate LCCEN Ana Kuschnir Program Assistant LCC7C Maria Emilia Sparks Program Assistant LCC7C Sergio Mora Consultant, Geological Engineer LCSUW Menahem Libhaber Consultant, Wastewater Specialist LCSUW Isabel Tomadin Consultant, Indigenous Peoples LCSUW Luz Maria Gonzalez Consultant, Economic and Financial Analysis LCSUW Jorge Bellagamba Consultant, WSS Engineer LCSUW Diego Juan Rodriguez Senior Economist, Peer Reviewer TWIWA Elba Gaggero External Consultant, Environmental Assesment LCSUW Marisa Midonsky External Consultant, Social Analysis LCSUW Michael Jacobsen Senior Water Resources Specialist, Peer Reviewer TWIWA Ousmane Dione Sector Leader SD LC6, Peer Reviewer LCSSD 49 Annex 7: Norte Grande Development Program: MAP IBRD 38215R 50 IBRD 38215R BOLIVIA Area of Map JUJUY PARAGUAY B O LI VI A San Salvador CHILE de Jujuy Santa Catalina ARGENTINA BOLIVIA SALTA Salta FORMOSA BRAZIL SECOND NORTE G RA N D E W AT ER Formosa TUCUMÁN San Miguel de Tucumán Santiago CHACO La Quiada 0 50 100 del Estero Resistencia Posadas ONES I CATAMARCA Corrientes MIS Pil Catamarca SANTIAGO Santa INF RASTRUCTURE PROJ EC T CORRIENTES co La Rioja DEL ESTERO SANTA Victoria m KILOMETERS FE Rinconada ay SAN LA RIOJA o Cordoba Santa JUAN San Juan CORDOBA Fe Paraná Tartagal PACIFIC ENTRE Rosario RÍOS Mendoza San Luis Abra Pampa Iruya IBRD IADB CAF OCEAN MENDOZA SAN URUGUAY MAIN CITIES AND TOWNS BUENOS AIRES LUIS La Plata R R R Santa BUENOS ROADS PROVINCE CAPITALS JUJUY LA Rosa AIRES San Ramón de la PAR AGU AY PAMPA NEUQUEN Mar del Plata Grl. Enrique HYDRO H H NATIONAL CAPITALS Neuquén Bahía Blanca Humahuaca Nueva Orán Valle Mosconi ELECTRICAL RIO R IO NEGRO Susques PROVINCE BOUNDARIES Viedma Grande ATLANTIC Tilcara NORTE GRANDE INTERNATIONAL BOUNDARIES Rawson OCEAN PROVINCES CHUBUT Comodoro Rivadavia Tumbaya Cdad. de Lib. Grl. CHILE San Martín Igr. G. N. S ANTA RU C RU Z San Salvador H Juárez Pil Palpalá Rivadavia co San Antonio de Jujuy San Pedro FALKLAND ISLANDS (ISLAS MALVINAS) m ay A DISPUTE CONCERNING SOVEREIGNTY OVER THE R Laguna ISLANDS EXISTS BETWEEN ARGENTINA WHICH CLAIMS San Antonio o THIS SOVEREIGNTY AND THE U.K. WHICH ADMINISTERS de los Cobres Santa Clara THE ISLANDS. Río Gallegos El Carmen Yema T IERRA TIERRA P araguay DEL F U E G O Ushuaia La Caldera La Poma Salta Grl. Güemes Cerriloos Rosario de Lerma Joaquin W. González Cachi El Carril Chicoana S A L T A R FORMOSA Espinillo Laguna Blanca Molinos La Viña Guachipas San José de Métan Cmte. Fontana Clorinda ASUNCIÓN BRAZIL Rosario de la Frontera Monte Quemado CHACO San Carlos Animaná Pirané C HILE Antofagasta de la Sierra Cafayate Castelli Paraná Trancas H San Francisco Formosa TUCUMÁN Burruyacú H Tres Isletas Pampa del Infierno El Colorado R del Laishi R PAR AGU AY Esperanza Tafi-Viejo Campo Gallo Las Garcitas Santa María Pres. Roque H Gral. J. de Yerba Buena H S. M. de Tucumán Bernardo de Tafí del Valle Lules H Banda Del R. Salí H Los Ralos SANTIAGO Campo Largo Corzuela Saenz Peña Cnias. San Martín Unidas Montecarlo Eldorado Irigoyen San Felipe Monteros H Bella Vista Pozo Hondo DEL ESTERO Las Breñas Machagai Pres. de la Plaza Cnia. Elisa H La Leonesa San Pedro Charata Pt. Rico CATAMARCA Concepción Aguilares H Simoca Los Puestos Grl. Pinedo San Bernardo Va. Berthet Makallé Margarita San M I SI O N ES Belén Cosme Itatí J.B. Alberdi H Termas de Río Hondo Pt. Tirol Andalgalá ná Belén La Banda Quimilí Hermoso Campo Va. Ángela Resistencia Corrientes Para San Ignacio Campo Grande El Soberbio H La Cañada Santiago Charadal San Luis del Palmar La Cocha del Estero H B. de Astrada Posadas Sta. Ana Oberá San Suncho Corral Santa Sylvina Ituzaingó Ntra. Sra. del L. N. Alem Pedro Fernández Empedrado La Puerta Arraga Rosario de Caa-Catí Saujil El Rodeo La Merced Ciudad de Loreto Brea Pozo Mburucuyá Apóstoles San Javier San Fernando del Valle El Alto San Miguel San Blas de Catamarca San José Va. Atamisqui Añatuya Saladas Concepción de la Sierra Herrera Aimogasta San Isidro Frías Concepción Va. San José Bella Huillapima Vista San Roque de Vinchina Ancasti Santo Tomé Villa Castelli Famatina Aminga Chumbicha S. Antonio Los Telares Bandera CORRIENTES Chilecito Pinto ná Santa Lucía Tostado Reconquista ra Alvear Va. Unión Goya Pa Sumampa Mercedes La Cruz La Rioja Va. Ojo de Agua Va. Unión Vera BRAZ I L L A R I O J A San Fco. del Chañar Selva Curuzú Cuatiá Paso de los Libres San José Patquía Va. de María SANTA FE Esquina Rodeo de Jáchal Chamical C Ó R D O B A Sauce This map was produced by the Va. Tulumba San Cristóbal Monte Caseros Map Design Unit of The World Bank. Tama Deán Funes The boundaries, colors, denominations Laguna San J. de SAN JUAN San and any other information shown on this Olta Va. del Totoral Mar Chiquita Feliciano map do not imply, on the part of The Cruz del Eje Javier Malanzán San Justo La Paz E N TR E R I OS U R U G U AY World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such Va. Santa Rita De Catuna Jesús María boundaries. Federal FEBRUARY 2011