Document of The World Bank Report No: ICR0000750 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-33680 IDA-3368A) ON A CREDIT IN THE AMOUNT OF SDR 15.1 MILLION (US$20.0 MILLION EQUIVALENT) TO THE REPUBLIC OF RWANDA FOR A RURAL WATER SUPPLY AND SANITATION PROJECT June 26, 2008 Water and Urban 2 Country Department 9 Africa Regional Office CURRENCY EQUIVALENTS (Exchange Rate Effective 12/31/2007) Currency Unit = RWF 1.00 RWF = US$ 0.00184 US$ 1.00 = 544 RWF FISCAL YEAR: January 1 ­ December 31 ABBREVIATIONS AND ACRONYMS AfDB African Development Bank CAS Country Assistance Strategy CDC Community Development Committee CDP Community Development Plan CRDP Community Reintegration and Development Project DEA Directorate of Water and Sanitation (Direction de l'Eau et de l'Assainissement) EIRR Economic Internal rate of Return GTZ German Technical Cooperation (Gesellschaft für technische Zusammenarbeit) HAMS School Hygiene and Sanitation (Hygiène et assainissement en milieu scolaire) IDA International Development Association ICR Implementation Completion and Results Report IP Implementation Progress LIL Learning and Innovation Loan M&E Monitoring and Evaluation MINERENA Ministry of Energy, Water and Natural Resources (Ministère de l'Énergie, de l'Eau et des Ressources Naturelles) MINITERE Ministry of Land, Environment, Forestry, Water and Natural Resources (Ministère des Terres, de l'Environnement, des Forêts, de l'Eau et des Ressources Naturelles) MTR Mid-term Review N/A Not applicable NGO Nongovernmental Organization NPV Net Present Value OA Partner Organization (Organismes d'appui) PAD Project Appraisal Document PCU Project Coordination Unit PDO Project Development Objective PEAMR Rural Water Supply and Sanitation Project (Projet d'alimentation en eau et d'assainissement en milieu rural) PIM Project Implementation Manual PRA Participatory Rural Appraisal PRSC Poverty Reduction Support Credit PPP Public-Private Sector Partnership QAG Quality Assurance Group QEA Quality at Entry RURA Rwanda Utilities Regulatory Agency RWF Rwandese Franc RWSS Rural Water Supply and Sanitation WSP-AF Water Supply and Sanitation Program - Africa WSS Water Supply and Sanitation WUA Water Users Association Vice President: Obiageli Katryn Ezekwesili Acting Country Director: C. Sanjivi Rajasingham Sector Manager: Eustache Ouayoro Project Team Leader: Christophe Prevost ICR Team Leader: Christophe Prevost RWANDA Rural Water Supply and Sanitation Project CONTENTS Data Sheet A. Basic Information......................................................................................i B. Key Dates................................................................................................i C. Ratings Summary......................................................................................i D. Sector and Theme Codes.............................................................................ii E. Bank Staff..............................................................................................ii F. Results Framework Analysis.........................................................................ii G. Ratings of Project Performance in ISRs...........................................................v H. Restructuring .........................................................................................vi I. Disbursement Graph..................................................................................vi 1. Project Context, Development Objectives and Design............................................... 1 2. Key Factors Affecting Implementation and Outcomes .............................................. 5 3. Assessment of Outcomes............................................................................................ 9 4. Assessment of Risk to Development Outcome......................................................... 13 5. Assessment of Bank and Borrower Performance ..................................................... 14 6. Lessons Learned ....................................................................................................... 16 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 17 Annex 1. Project Costs and Financing.......................................................................... 18 Annex 2. Outputs by Component ................................................................................. 19 Annex 3. Economic and Financial Analysis................................................................. 24 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 27 Annex 5. Beneficiary Survey Results........................................................................... 29 Annex 6. Stakeholder Workshop Report and Results................................................... 30 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR..................... 31 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders....................... 42 Annex 9. List of Supporting Documents ...................................................................... 43 MAP IBRD 25927R A. Basic Information Rural Water Supply and Country: Rwanda Project Name: Sanitation Project Project ID: P045182 L/C/TF Number(s): IDA-33680,IDA-3368A ICR Date: 12/17/2007 ICR Type: Core ICR RWANDESE Lending Instrument: SIL Borrower: REPUBLIC Original Total XDR 15.1M Disbursed Amount: XDR 15.1M Commitment: Environmental Category: B Implementing Agencies: MINITERE Cofinanciers and Other External Partners: B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 10/13/1998 Effectiveness: 09/07/2000 01/30/2001 Appraisal: 04/10/2000 Restructuring(s): Approval: 06/06/2000 Mid-term Review: 06/30/2003 05/12/2004 Closing: 12/31/2006 12/31/2007 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Highly Satisfactory Risk to Development Outcome: Low to Negligible Bank Performance: Satisfactory Borrower Performance: Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Highly Satisfactory Quality of Supervision: Highly Satisfactory Implementing Agency/Agencies: Satisfactory Overall Bank Overall Borrower Performance: Satisfactory Performance: Satisfactory i C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Performance Indicators (if any) Rating Potential Problem Project No Quality at Entry Satisfactory at any time (Yes/No): (QEA): Problem Project at any Quality of Yes None time (Yes/No): Supervision (QSA): DO rating before Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Sanitation 38 15 Water supply 62 85 Theme Code (Primary/Secondary) Rural services and infrastructure Primary Primary Water resource management Primary Secondary E. Bank Staff Positions At ICR At Approval Vice President: Obiageli Katryn Ezekwesili Callisto Madavo Acting Country Director: C. Sanjivi Rajasingham Emmanuel Mbi Sector Manager: Eustache Ouayoro Letitia A. Obeng Project Team Leader: Christophe Prevost Richard Verspyck ICR Team Leader: Christophe Prevost ICR Primary Author: Richard Verspyck F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The objectives of the project are to assist the Borrower in: (i) increasing the availability and sustainability of water supply and sanitation (WSS) services in rural areas; (ii) strengthening the capacity of (a) communities to plan water supply and sanitation investments and manage water supply and sanitation services and (b) agencies in charge of water supply services, communes, water users and the private sector to carry out their respective responsibilities under the Borrower's water sector strategy; and (iii) mobilizing community support for (a) the rehabilitation or expansion of the major regional water systems, and (b) their operation by the private sector. ii Revised Project Development Objectives (as approved by original approving authority) Not applicable (a) PDO Indicator(s) Original Target Formally Actual Value Indicator Baseline Value Values (from Revised Achieved at approval Target Completion or documents) Values Target Years Indicator 1 : Average per capita consumption of water from facilities constructed under the project exceeds 10 liters/cap/day (lpcd) Value Average Spring catchments: (quantitative or Average consumption of consumption of 10 8.5 lpcd (7 districts) qualitative) 5 lpcd lpcd in 16 Piped systems: 10- communes 13 lpcd (7 districts) Date achieved 01/30/2001 12/31/2007 12/31/2007 Comments (incl. % The average consumption (springs and piped systems combined) is 10.7 lpcd, achievement) i.e. 107 % of the PAD target Indicator 2 : Percentage of water systems fully covering their operation and maintenance expenditures Value (quantitative or 35% 80% 100% qualitative) Date achieved 01/30/2001 12/31/2007 02/28/2008 Comments (incl. % 125% of the PAD target achievement) Indicator 3 : Percentage of school sanitation facilities maintained in accordance with national standards Value (quantitative or No school latrines 80 % More than 80 % qualitative) Date achieved 01/30/2001 12/31/2007 12/31/2007 Comments (incl. % PAD target fully achieved achievement) Number of CDCs able to program and execute WSS investments, number of Indicator 4 : partner organizations able to assist communities in programming and executing investments Value Number of CDCs: 0 Number of CDCs: Number of (quantitative or Number of partner 9 districts: 7 qualitative) organizations : 0 Number of partner Number of partner organizations: 6 organizations: 4 Date achieved 01/30/2001 12/31/2007 12/31/2007 Comments Due to the redrawing of communes/districts, the figures are not directly (incl. % comparable. However, expressed in percentage of the total number of local achievement) governments, 23% of the total number of districts has acquired the required capacities, vs. only 8% expected at appraisal. iii Indicator 5 : Number of additional people with access to improved water services (excluding Mayaga) Value (quantitative or 0 250,000 408,000 qualitative) Date achieved 01/30/2001 12/31/2007 12/31/2007 Comments (incl. % 163 % of PAD target achievement) Indicator 6 : Number of people with access to water services from the Mayaga system Value (quantitative or 30,000 120,000 120,000 qualitative) Date achieved 01/30/2001 12/31/2007 12/31/2007 Comments (incl. % 100 % of the PAD target achievement) (b) Intermediate Outcome Indicator(s) Original Target Formally Actual Value Indicator Baseline Value Values (from Achieved at approval Revised Completion or documents) Target Values Target Years Indicator 1 : Mayaga system rehabilitated with participation by beneficiaries in the rehabilitation design, planning, financing and implementation. Value System System (quantitative System not rehabilitated rehabilitated and rehabilitated and or qualitative) operational operational Date achieved 01/30/2001 12/31/2005 12/31/2007 Comments The PAD target was fully achieved. The rehabilitation of the main production (incl. % and transmission system was completed in May 2006 and the secondary achievement) networks in December 2007. Indicator 2 : Private sector operator assures continuous service with respect to Mayaga system and collects revenues System managed by Value private operator in (quantitative or No private operator accordance with Private operator selected. qualitative) contractual performance indicators Date achieved 01/30/2001 08/01/2006 02/28/2008 Comments (incl. % The private operator has been selected, and the contract is to be signed shortly. achievement) Indicator 3 : Completion of investment and assessment studies for Lava Region system Value (quantitative No study available Studies completed Studies completed or qualitative) iv Date achieved 01/30/2001 12/31/2003 09/30/2004 Comments The PAD target was fully achieved. The detailed design studies and bidding (incl. % documents were completed in September 2004. They helped attracting funding achievement) for the execution of works, which are currently implemented under AfDB and Dutch financing. Indicator 4 : Identification and establishment of a sustainable management of the Lava Region systems Value Management Management (quantitative No sustainable solution identified solution identified or qualitative) management and implemented and implemented Date achieved 01/30/2001 12/31/2007 12/31/2007 Comments The PAD target was fully achieved. The Lava Region systems are operated by a (incl. % local private operator (Aquavirunga) in the Western part and by Electrogaz in the achievement) Eastern part. Number of regional offices of Ministry in charge of Water able to deliver Indicator 5 : contract management, community development, accounting and monitoring services Value (quantitative 0 Number of Number of or qualitative) regional offices: 4 provincial offices: 4 Date achieved 01/30/2001 12/31/2003 12/31/2004 Comments The PAD target was fully achieved. The provincial engineers recruited under the (incl. % project have been further contracted under the AfDB-financed project and achievement) provide assistance to all RWSS operations in their respective provinces. G. Ratings of Project Performance in ISRs Actual No. Date ISR Archived DO IP Disbursements (US$ millions) 1 12/11/2000 Satisfactory Unsatisfactory 0.00 2 12/20/2000 Satisfactory Unsatisfactory 0.00 3 02/13/2001 Satisfactory Satisfactory 0.00 4 08/21/2001 Satisfactory Satisfactory 0.54 5 04/02/2002 Satisfactory Satisfactory 1.35 6 10/10/2002 Satisfactory Satisfactory 1.54 7 04/30/2003 Satisfactory Satisfactory 1.93 8 11/06/2003 Satisfactory Unsatisfactory 2.63 9 05/18/2004 Satisfactory Unsatisfactory 2.96 10 12/06/2004 Satisfactory Satisfactory 3.92 11 04/25/2005 Satisfactory Satisfactory 5.38 12 11/21/2005 Satisfactory Satisfactory 10.15 13 05/15/2006 Satisfactory Satisfactory 13.14 14 11/15/2006 Satisfactory Satisfactory 14.99 15 05/14/2007 Satisfactory Satisfactory 16.63 16 11/13/2007 Satisfactory Satisfactory 18.69 v H. Restructuring (if any) Not Applicable I. Disbursement Profile vi 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal Country and Sector Background. By the time of appraisal, the rural water supply and sanitation (RWSS) sector in Rwanda faced many challenges stemming from top-down investment programming, poor cost recovery, low sustainability and high per-capita investment costs for system construction. Early attempts (starting in 1987 with the Bank- financed Second Water Supply Project, Cr. 1783-RW) to introduce community participation and transfer the responsibility and ownership of RWS facilities to the communes failed in the absence of a strong governmental commitment to actual decentralization and continued governmental insistence to keep investment decisions centralized. These issues had been compounded by deep community-level distrust engendered by the 1994 genocide and by the demands of post-war reconstruction, which placed immediate emergency relief ahead of considerations for longer-term sustainability in investment decisions. Only 44 percent of the total population had access to a water delivery point. The hilly landscape covering most of the country increased the hardships associated with fetching water. Similarly, the sanitary situation of the rural population was problematic. Traditional pit latrines were available to 85 percent of the population, but the latrines were generally poorly maintained and safe hygienic practices were not prevalent. Government Strategies. To foster reconciliation and community reintegration, in 1998, the Government of Rwanda embarked upon a decentralized, participatory approach to development. Local structures, the community development committees (CDCs), were elected in March 1999. CDCs were provided with administrative and financial autonomy to ensure participation of the local population in the decision-making process. Participatory Rural Appraisals (PRAs) were carried out with the assistance of various donors which helped 40 communes to define local development priorities and prepare Community Development Plans (CDP). An institutional and financial framework for community level development activities was developed and tested in a Bank-financed Learning and Innovation Loan (LIL), the Community Reintegration and Development Project (CRDP, Cr. 3138-RW). A new RWSS strategy was developed at the same time, which was based on the following key elements: · Promoting a demand-responsive approach through which communities decide whether to participate, identify their preferred service level based on willingness to pay, contribute to a portion of investment costs and pay the operation and maintenance costs of their facilities in full; · Decentralizing planning and management of services by (i) making water users' associations (WUAs) the decision-makers, owners and managers of their facilities, and (ii) enabling the communes, particularly the CDCs, to assist WUAs obtain improved services; 1 · Redefining the roles of the various institutions involved in the delivery of water and sanitation services, including transitional arrangements to move from a centralized planned approach to a demand-responsive approach and related capacity building; · Supporting the private sector as provider for all works, goods and services; and · Redeploying the public sector as facilitator, with the Ministry of Energy, Water and Natural Resources 1 (MINERENA) and its Directorate of Water (DEA) providing assistance and support to the CDCs and WUAs. Rationale for Bank Assistance. The Country Assistance Strategy (CAS) Progress Report (June 1999) for Rwanda recognized that Rwanda continued to face particular challenges for sustained growth and poverty reduction after the genocide in 1994, including the resettlement and reintegration of displaced families and other victims, achieving peace and stability, and improving the standard of living of the population. The project supported two of the five main themes of the CAS, namely (i) revitalizing the rural economy with the provision of the social and economic infrastructure (of which water supply and sanitation are part); and (ii) investing in human resource development, including capacity building. The Bank, which sponsored the preparation of the sectoral strategy (with the WSP-AF and the German GTZ), was in a position to bring forward the design and implementation experiences accumulated in Africa to help implement the new strategy with a self- standing project. Through this project, the Bank could also cooperate with the Government in demonstrating that sectoral investment programs could be prepared and implemented by CDCs and WUAs using the standard framework developed by the CRDP, thus strengthening the case for community action programs. 1.2 Original Project Development Objectives (PDO) and Key Indicators The objectives of the project were to assist the Borrower in: (i) increasing the availability and sustainability of water supply and sanitation (WSS) services in rural areas; (ii) strengthening the capacity of (a) communities to plan water supply and sanitation investments and manage water supply and sanitation services and (b) agencies in charge of water supply services, communes, water users and the private sector to carry out their respective responsibilities under the Borrower's water sector strategy; and (iii) mobilizing community support for (a) the rehabilitation or expansion of the major regional water systems, and (b) their operation by the private sector. The key indicators of achievement of the developments objectives were the following: · Per capita consumption of water · Percentage of water systems covering operation and maintenance costs 1The WSS sector was transferred in December 2002 under the Ministry of Infrastructure (MININFRA). A State Ministry for Water and Natural Resources was then established in the latter ministry. The sector and the State Ministry were transferred in December 2003 under the Ministry of Land, Environment, Forestry, Water and Natural Resources (MINITERE). 2 · Percentage of collective latrines adequately maintained · Number of communes able to program and execute WSS investments with the assistance of partner organizations · Additional members of the population getting access to services · Completion of Mayaga system rehabilitation · Completion of investment and assessment studies for the Lava Region systems · Private operators delivering water services in Mayaga and the Lava Region · Number of regional offices of DEA able to deliver assistance and monitoring services 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and Reasons/Justification Not applicable 1.4 Main Beneficiaries, The primary target group was the rural population in 16 communes (of a total of 194) that were selected in relation to three main criteria: low service coverage rates, little external support for sector investments and high demand for improved services. The project would provide basic drinking water facilities to about 370,000 people and promote improvement of household sanitation and hygiene practices. The project would thus contribute to poverty reduction through time savings, improved productivity and health, especially for women and children. The project would also benefit communes, WUAs, the Directorate of Water and the private sector (contractors, operators, non-governmental organizations (NGOs) and consultants) by strengthening their capacities to deliver their responsibilities in the development of sustainable water and sanitation services. 1.5 Original Components The project comprised four components: · Subprojects Component (Appraisal*/Actual: US$10.43 million/US$14.10 million). This component would provide grants to communities. Annual grant agreements signed with CDCs would finance: - the construction of water and sanitation facilities2 identified in community development plans; and - technical assistance, training and outreach activities delivered by partner organizations3 (Organismes d'appui, OA), which would help communities to plan, implement, operate and maintain water and sanitation facilities in an effective and sustainable manner. 2The number and type (springs, latrine blocks, piped systems) of facilities were not preset, as they should result from the choices of the communities, which were not yet expressed at the time of appraisal. However, indicative values were used for the purpose of computing the project costs (see Annex 2) 3Partner organizations are NGOs or local consulting engineers. 3 Using a demand-responsive approach and the eligibility criteria spelled out in the Project Implementation Manual, this component would start with a pilot phase in four communes and would then be extended to 12 other communes. · Major Water Supply Systems Component(Appraisal*/Actual: US$4.89 million/US$5.08 million): The goals of this component were (i) to demonstrate that the decentralized and demand-responsive approach was suitable for rehabilitating major water supply systems ; and (ii) to establish sustainable 4 management arrangements for those systems. The approach would be tested in the Mayaga system. This component would also lay the groundwork for completing the Lava Region systems and restoring their operational capacity. · Capacity Building Component (Appraisal*/Actual: US$3.61 million/US$1.90 million): The goal of this component was to strengthen stakeholders' capacity to carry out the roles ascribed to them in the rural water supply and sanitation strategy in order to ensure adequate and timely provision of high quality infrastructure and services at the community level. This would consist of support for: (a) the private sector and NGOs, as providers of works, goods and services; and (b) the public sector (DEA, communes and CDC) as facilitators of the sub-sector development and management process. · Project Management Component (Appraisal*/Actual: US$1.75 million/US$1.78 million): This component would finance the incremental costs of managing the project and of assisting the CDCs with the Project Coordination Unit (PCU) staff and the provincial engineers. *Note: Appraisal estimates include all contingencies 1.6 Revised Components Not applicable 1.7 Other significant changes Implementation arrangements and responsibilities were significantly modified during project execution to take stock of: (i) the extension of the national decentralization policy in 2001 and the new status of the communes (renamed districts and later redrawnr5); and (ii) the deteriorating performance of community management of piped systems, which led the district authorities to seek an alternative solution with private operators. These changes were formally introduced in the Project Implementation Manual (PIM) after the mid-term review (MTR; see section 2.2 below). The closing date was extended once by one year to December 31, 2007, to provide more time to complete the rehabilitation/extension of the branches of the Mayaga system and 4A major system is a water system that supplies several districts; this type of system usually includes water treatment and/or pumping equipment. 5Initially 106 districts, which were further reduced to 30 in 2005 4 to take stock of the experience with private operators. The allocation of IDA funds was slightly modified to allow for grouping equipment and works in the Mayaga system rehabilitation. Finally, Government funding increased substantially after 2005 with the introduction of budget support to the RWSS sector, which allowed financing additional subprojects. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry Key features of the project preparation consisted of (i) taking into account lessons from similar projects in Rwanda and Africa; (ii) developing a sectoral strategy that would be consistent with the national decentralization policy and also be effectively internalized by the Government and stakeholders; (iii) assessing risks and mitigation in the context of the post-conflict situation; and (iv) carrying an economic analysis based on the results of a specific willingness-to-pay (WTP) study. The Quality Assurance Group (QAG) assessed the quality at entry (QEA) of the project in April 2001 (see section 5.1. (a) below). Use of Lessons in Project Design. The introduction of the demand-based approach derived from the lessons of earlier RWSS projects. The subproject cycle, as defined in the PIM, largely duplicated the arrangements of the Ghana Community Water Supply Project, with the recourse to partner organizations to assist communities and districts and the use of annual investment programs prepared through a participatory process. The initial satisfactory performances of the WUAs established at the end of the Rwanda Second Water Supply Project also indicated that community management was a sustainable solution. Government Commitment. The strong commitment of the Government to the decentralization policy and its convincing application to community investments through the CRDP, were key factors in internalizing the new sectoral strategy. MINERENA and the DEA were ready to take on their new role of facilitators and to let CDCs and communes implement the subprojects. Risks and Mitigation. The Project Appraisal Document (PAD) rightly emphasized two series of risks. First, the risks linked to the restoration of mutual trust between central/local government and the rural communities were expected to be mitigated by the participatory arrangements that governed implementation. As mentioned above, these arrangements had been successfully tested in the CRDP. Second, the risks linked to the weak capacity and limited experience of the stakeholders (which also resulted from the post-conflict background). The latter risks were to be mitigated by the assistance delivered by the OAs and globally by the capacity building component of the project. 2.2 Implementation Minor Role of External Factors. External factors played a limited role in project implementation, excepted in the Major Water Supply Systems component, where the 5 recruitment of technical design and supervision consultants was delayed by the lack of adequate proposals (initially sought on a sole-source basis). Major Role of Factors Subject to Government Control. Policy decisions and reforms introduced by the Government played a major role. As noted above, the steadfast implementation of the decentralization policy by the Government, with the establishment of districts in 2001 and the election of mayors (in lieu of the appointed bourgmestres) put the CDCs in a subordinated position. The districts were vested with contracting authority and the mayors took a leading role in supervising the performance of the WUAs, as they felt responsible for the sustainability of water services. This was a key factor in the decision to shift to private management of the water facilities. In 2005 the Government also introduced a system of performance contracts between the districts and the President 6 and between households and district subdivisions (cells) , which are 7 periodically assessed. Finally, the reform of the civil service at the end of 2004 reduced the staff of DEA by almost 85 percent. The resulting disruption was limited, as the best- performing staff members were either kept as civil servants or left the civil service and were re-hired under contracts with the Project Coordination Unit (PCU). All these changes and the emphasis put by the Government on results-based policies were instrumental in addressing the implementation issues faced by the project as they (i) helped streamline implementation responsibilities in the districts; (ii) eventually strengthened the cohesion of the implementation team; and (iii) brought forward a culture of accountability, both at central and local levels. Problem Project Status. The project entered Problem Project status at the end of 2003. The downgrading of the implementation progress (IP) rating reflected the slow pace of disbursements (disbursement rate of less than 15 percent two and half years after project approval), monitoring deficiencies (including a lack of quality control by the PCU) and the insufficient provision of counterpart funding from the budget. More importantly, the absence of visible results in the field frustrated the rural population and the district mayors, and cast doubt on the credibility of the project. The OAs were clearly overwhelmed by the multiplicity of their tasks. The preparation of the subprojects in the pilot districts (ending with the tendering of the first batch of water facilities) had lasted more than 20 months (appraisal estimate: nine months). In addition, the deteriorating performances of most of the existing WUAs questioned the management option selected for the water facilities. Actions Taken and Mid-term Review. In the first quarter of 2004, the PCU held a series of workshops with stakeholders to address the implementation problems. The PCU also carried out two detailed reviews of: (i) the community mobilization process; and (ii) community management and the experience of three districts of the Byumba province 6The districts sign an annual performance contract to carry out specific development activities, including water (construction and management of water facilities, protection of spring catchments, terracing) which are assessed quarterly by a presidential commission. 7Household contracts focus, inter alia, on building latrines, hygienic practices and hand washing and rainwater collection. They are assessed monthly by an umidugudu (village) commission. 6 with private operators. The first review found that the districts were now better suited than the OAs to mobilize the community investment contributions. It also found that financial contributions were perceived as inequitable, as the requested amounts depended on the type of system, which was beyond the control of communities8. The second review found that more than 50 percent of the WUAs were no longer operational, due to the absence of performance incentives (volunteer status), users' willingness to pay, mismanagement of funds and technical weaknesses. Conversely, local private operators placed in challenging situations (managing costly pumping systems), had overcome these issues and were even able to self-finance system rehabilitation. The findings were discussed in the MTR of May 2004. Participants agreed on an action plan aimed at: (i) simplifying implementation procedures and the subproject cycle; (ii) reducing implementation delays; (iii) supporting the generalization of public-private partnerships (PPP) for the operation of water facilities; (iv) improving coordination among project participants; and (v) strengthening the monitoring and evaluation functions. The districts took over the community mobilization responsibilities from the OAs, which concentrated on the preparation and supervision of piped systems, while the simple subprojects (springs and latrines) were delegated to the provincial engineers and the district caretakers (fontainiers). The lengthy preparation of annual grant agreements was streamlined in a global district program. The community contribution rules were revised to emphasize in-kind and labor contributions. The project rules and the PIM were modified accordingly. The action plan was successfully carried out. The second batch of subprojects in three new districts was completed in four months. The districts implemented the management reform and selected private-sector operators for the completed facilities. More than 50 percent of project funds were committed at the end of 2004 and the project came out of Problem Project status in February 2005. Scaling-up and Harmonization. The accelerated implementation performance after the MTR proved that the new implementation procedures were adequate and could be used for scaling-up future RWSS development activities with a common implementation framework. This achievement, together with the demonstrated new capacities of the stakeholders, paved the way for developing and implementing the sector-wide approach, which, in turn, allowed increasing the sectoral absorption capacity by a factor of ten (see section 3.2 below). In addition, the project fulfilled the harmonization objectives of the Government and the donor community by: (i) merging its PCU with that of the AfDB- financed RWSS project in 2006; and (ii) taking over the implementation of the budget- financed RWSS activities under the Subproject component in 2006, after preparing streamlined financial management procedures. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 8 Beneficiaries could easily contribute 10 percent for spring catchments (contribution equivalent to US$0.30 per person served), while a 5 percent financial contribution in the case of pumping systems amounted to more than US$6 per person served (US$36 for the average household)) and appeared prohibitive. 7 M&E Design. The M&E system was based on a simple set of indicators of access, use and sustainability of water and sanitation facilities and on qualitative assessments of the capacity building activities' outcome. The M&E arrangements included the appointment of a deputy project coordinator in charge of M&E and the establishment of semi-annual M&E reports. In hindsight, the monitoring indicators provided a clear vision of the project outcomes, but did not allow assessing either the intermediate results of the project or the pace of implementation. Adding process indicators-such as those used in the MTR (e.g. duration of the various steps of the subproject cycle) -to the list of monitoring indicators would have been appropriate, given the innovative nature of the project approach. M&E Implementation. M&E was unsatisfactory until the MTR. The construction delays prevented measuring the facilities' use and sustainability indicators, which led the PCU to neglect its M&E responsibilities. Reports were not produced on time and data gathered by the OAs and the provincial engineers were not aggregated by the PCU. The situation improved after the implementation of the MTR action plan. In addition, the monitoring function became a sectoral priority, when the Government embarked on a sector-wide approach and budget support with the Bank's assistance with Poverty Reduction Support Credits (PRSC). M&E Utilization. As noted above, the M&E system was appropriate to measure the outcomes, but did not help in monitoring implementation. However, the project's data gathering system, which was strengthened after the MTR, helped develop the sectoral indicators at the country level (population served, type of facilities management, availability of installations) that were used in the PRSCs. This enabled evidence of the sectoral progress in terms of absorptive capacity of investments and measurement of increased access to water and sanitation facilities. 2.4 Safeguard and Fiduciary Compliance The project did not entail major adverse social and environmental impacts. The implementation of the mitigation plan was reviewed only twice during project execution, which illustrates the difficulty of mobilizing safeguards specialists on simple Category B projects. The first review took place in 2003, at which time physical implementation was minimal. The second review took place with the completion mission. The Bank Environmental Specialist raised concerns with the protection of water resources in spring catchments and water reservoirs. Mitigating measures were agreed and included in (i) the matrix of actions of PRSC IV; and (ii) the performance contracts of the districts with the Government. Fiduciary compliance was satisfactory throughout implementation. The financial auditors issued clean opinions. Financial management reports were prepared in a timely manner from mid-2003 onwards. The rejection rate of disbursement applications rose markedly after the decentralization of the Bank's disbursement unit to Johannesburg. However, the situation improved after a field visit by the Bank specialists. 8 2.5 Post-completion Operation/Next Phase The post-completion operation of the water facilities constructed under the project is adequately addressed. All completed systems are managed by local private operators under contracts signed with the districts. The operators are responsible for operations and maintenance and have been competitively selected. The selection criteria take into account the price of water, the fee paid by the operator to the district and the quality and reliability of the technical proposal. The water rates range from RWF 2.5 (gravity-fed systems) to RWF 15 (pumping systems) per container of 20 liters (equivalent to US$0.25 to US$1.40/m3). Users with private connections pay RWF185 to RWF600/m3. The principle of paying water at standposts in accordance with the volume consumed has been widely accepted, as the water users acknowledged the improvements in service delivery. More than fifteen years of experience with administrative or community management of water services proved that free or unpaid water resulted in little water or no water at all. In addition, and to alleviate the financial burden for the poorest part of the rural population, the districts keep a list of vulnerable households (widows, poor single-parent households), who get free access to water points9. Rather than using standardized contracts (usually prepared by foreign consultants), which are seldom comprehensible by the parties, each district has developed its own contract, with very simple terms. In view of the diversity of local situations and of the uncertainty of demand for water, the Rwanda Utilities Regulatory Agency (RURA) endorsed this approach and provided assistance to the districts for renegotiations, once the operational conditions were well-established. Sanitation facilities are maintained by the schools with the local School Hygiene and Sanitation Committees (hygiène et assainissement en milieu scolaire, HAMS). A minimal fee (RWF100/ year) is paid for each child. The capacities created under the project will continue to be available to the sector. The core staff of the PCU, as well as the provincial engineers, has been taken over by the AfDB-financed RWSS program and will be eventually financed by the national budget. A follow-up operation is not necessary, as the sectoral activities now take place within a sector-wide approach and PRSCs. Budget allocations increased from US$1.2 million in 2006 to US$6.3 million in 2007 and US$7 million in 2008. These funds are financing inter alia eight remaining subprojects identified and prepared under the project, for which IDA funds were not available. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 9An assessment of the efficiency of these specific rules for the poor is to be carried out soon by MINITERE. 9 The project objectives remain highly relevant to current country priorities. Access to WSS services features prominently in the PRSP and in all community development plans. The Government and the district mayors consider that the sustainability of WSS services is a key element of their own accountability. The inclusion of the WSS sector among the three priority sectors (with health and education) of the first PRSC is further proof of the relevance of the project objectives to country priorities and the Bank's assistance strategy. Similarly, the decentralized approach built in the project design makes it highly relevant to the global priorities of the Government, as it demonstrated that the districts could plan, implement and manage WSS facilities. Finally the project implementation procedures, as updated after the MTR, now serve as guidelines for all WSS investments in Rwanda, regardless of the source of funding. 3.2 Achievement of Project Development Objectives The project achieved all its development objectives. The assessment is made with reference to the level of achievement of target values for the outcome indicators and to other project impacts directly related to the PDO. Data for the evaluation were provided by the M&E reports, an October 2007 field survey of school latrines, the November 2007 technical audit and the impact evaluation study carried out by local consultants at the end of the project. Objective#1: Increasing the availability and sustainability of WSS services in rural areas. This objective was fully achieved and the key outcome targets were exceeded. The project helped provide access to water services to an additional 408,000 people (excluding the population served by the Mayaga system), i.e. 163 percent of the PAD target (250,000 people). In addition, the studies financed by the project helped mobilize financing to construct water facilities under budget support that will serve another 90,000 people. The impact study and the operators' reports showed that water users are consuming 8.5 liters per capita per day (lpcd) at the spring catchments, 13 lpcd at the gravity-fed piped systems standposts and 10 lpcd at the pumping systems standposts. Users of private connection consume 20 lpcd. On average, this amounts to 10.7 lpcd, i.e. 107 percent of the PAD target (10 lpcd). The 33 completed piped systems are operational and operated under PPPs. All systems can cover their operation and maintenance expenditures (125 percent of the PAD target). Sanitation facilities (latrine blocks and rainwater storage for hand washing) are available to about 65,000 children in 105 primary and secondary schools. More than 80 percent of the school latrines are correctly maintained (exceeding the PAD target), as the result of the sensitization efforts carried out with the local HAMS committees. At country level, the project helped strengthen the national HAMS committee, which was instrumental in introducing hygiene and sanitation practices in the household contracts with the districts (see section 2.2, note 8). Objective #2: Strengthening the capacity of all stakeholders to carry out their respective responsibilities under the Borrower's water sector strategy. This objective 10 was fully achieved and the key outcome targets were generally exceeded. Seven districts (23 percent of the 30 districts in the country)10 are able to plan, implement and manage the operations of water facilities. This result exceeds the PAD target (16 communes, i.e. 8 percent of the 194 communes in the country). Local contractors, almost non-existent in WSS activities at project startup, executed US$10.6 million worth of contracts, (94 percent of all construction activities for the Subprojects component). Local operators took over the delivery of WSS services well beyond the project area. More than 25 percent of the 850 water systems throughout the country are now managed under PPP. Subprojects have been planned and designed in accordance with community preferences. The best measure of the stakeholders' capacity is given by the global absorption capacity of the WSS sector, which increased dramatically with an additional 600,000 people each year getting access to water services in 2005, 2006 and 2007, to be compared to only 60,000 in 2002. Objective #3: Mobilizing community support for the rehabilitation or expansion and the operation by the private sector of major regional water systems. This objective was largely achieved, albeit with some delays. The rehabilitation and expansion of the Mayaga system was completed in December 2007 and the system now serves 120,000 people (100 percent of the PAD target). A PPP for the system operation will be effective shortly. In the Lava region, the project was, as expected, instrumental in (i) attracting external financing (AfDB and Dutch bilateral assistance) for the completion of the water systems; and (ii) facilitating the involvement of private operators (see Annex 2). The Lava Region systems, once completed, may supply about 306,000 people. As mentioned above, Government policies and reforms strongly facilitated implementation. However, the project benefits essentially derive from the project outputs. Access and sustainability achievements result directly from the activities of the Subprojects and the Major System components. The spectacular increase of the absorption capacity would not have taken place without the training, exchange of experiences and the dissemination efforts provided under the Capacity Building component (see Annex 2). 3.3 Efficiency An ex-post economic analysis of water supply investments (see Annex 3) was carried out with a methodology similar to that of the PAD (valuation of cost savings in getting water, including time savings and consumer surplus). The analysis covers 72 percent of the project costs, i.e. the Subprojects component (excluding the sanitation facilities) and the Major Systems component (excluding the Lava Region studies). The ex-post economic internal rate of return (EIRR) is estimated at 10.6 percent and the US$0.51 million net present value ( NPV) are to be compared to the appraisal estimates of 12.6 percent and US$1.67 million, respectively. The slight decrease of the EIRR and of the NPV is 10Five districts in the Southern province (Gisagara, Huye, Kamonyi, Nyanza and Ruhango, one in the Eastern province (Gatsibo) and one in the Western province (Nyamasheke). 11 attributable to the different mix of technical solutions between the PAD's indicative list of water facilities and the actual facilities constructed under the project (see the table below) NPV and EIRR of the Water Supply Sources Technical Options NPV (US$ million) EIRR (%) PAD ICR PAD ICR Springs 0.92 1.60 19.4% 65.4% Rehabilitated piped systems 0.57 -0.03 19.1 9.8% New piped systems: -0.42 -0.58 8.3 6.9% - gravity-fed systems n/a 0.22 n/a 13.6% - pumping systems n/a -0.74 n/a 3.6% Mayaga system 0.42 -0.48 11.3 9.0% Global 1.67 0.51 12.6 10.6% The high investment cost of the new pumping systems brings down the NPV. This is also true to a lesser extent with the Mayaga system, the cost of which was 30 percent higher than expected. The new gravity-fed systems generate an EIRR higher than expected, and the spring catchments generate an EIRR of more than 65 percent. An analysis of the efficiency of investments in terms of unit rates of the various types of water facilities is also provided in Annex 2 and summarized in the table below, which shows that the unit rates compare favorably with values observed elsewhere in Africa. Average cost per person served (US$/person) Type of facilities Project Regional Average Spring catchments 3 5 Piped systems 42 50-80 Major systems 58 >100 all systems (rehabilitated systems, new gravity-fed systems and new pumping systems) Mayaga system, including production, transmission and secondary networks 3.4 Justification of Overall Outcome Rating The outcome of the project is rated as highly satisfactory, as it allowed provision of sustainable access and use of WSS services to a greater than expected number of rural inhabitants. It also paved the way for Rwanda to achieve Millennium Development Goal (MDG) targets by creating the conditions for mobilizing donors. Consequently, the rate of access to water grew from 44 percent at project inception to 71 percent at the end of 2007. The project objectives, design and implementation were and remain highly relevant to the country priorities and the Bank assistance strategy. All objectives have been achieved and most of the outcome targets have been exceeded. In view of the EIRR and of the average investment costs per capita, the efficiency of the operation is satisfactory. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 12 Not applicable (b) Institutional Change/Strengthening The institutional objectives (decentralization of sector development and establishment of sustainable management of facilities) were achieved, and even exceeded, as the project was instrumental in enabling to shift to the sector-wide approach. (c) Other Unintended Outcomes and Impacts (positive or negative) Not applicable 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops Not applicable 4. Assessment of Risk to Development Outcome The risk to development outcome is rated low to negligible in terms of (i) restoring trust between communities and central/local governments; and (ii) maintaining the newly acquired capacities of the various actors. The close involvement of communities at all steps of preparation and execution built up the social cohesion of communities around their WSS subprojects. More importantly, the successful decentralization process established the legitimacy of the elected district authorities. Restoring mutual trust between central/local governments and the communities facilitated the acceptance of the policy changes in the delivery of services (private operators and cost recovery policies) as the changes were initiated and elaborated by the district mayors. As noted above, the principle of paying for water is widely accepted. The districts acquired a genuine capacity to plan and execute investments and to oversee the delivery of services. They are themselves accountable both to the communities and to the Government, which closely monitors their performances. The performance record of the operators is relatively short, as most of the contracts linked to project facilities were signed in 2006-2007. However, the experience of the first contracts (including those signed outside of the project area) is positive. The operators and the districts have been able to overcome unforeseen problems and to adjust as needed the contract terms with the support of the project and of RURA. Key measures for maintaining the acquired capacities are being implemented. They include for the districts the continuous technical assistance of DEA and of the provincial engineers. On the other hand, the operators have established a national association, which will provide support to its members in the area of financial and commercial management. In addition, in its assistance program to Rwanda, WSP-AF has scheduled a specific component devoted to PPPs and IFC is planning an intervention to help the private operators to develop their activities. 13 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry The Bank performance during the lending phase is rated as satisfactory. The QAG assessed the project's QEA in April 2001 and rated it as satisfactory. QAG found that the project design was based on a good assessment of the local, political and institutional context and commended its decentralized and community-based approach. The QAG panel, however, questioned the level of investment subsidies (90 percent) and the likelihood that such a percentage could be affordable for the Government in the medium-term. The QAG panel also mentioned that the objective of engaging the private sector in the RWSS sector was unlikely to be achieved. The implementation experience showed that these concerns were unwarranted. The shift to the sector-wide approach after 2005 demonstrated the sustainability of the investment subsidies, which have been increasingly financed by the national budget. Likewise, private participation in water services delivery and management has become the norm in Rwanda. In hindsight, the project design suffered from minor shortcomings stemming from the absence of process indicators, which could have helped to detect the initial implementation issues earlier (see section 2.3), and from the excessive complexity of the subproject cycle, as defined at appraisal. The process of subproject preparations included a validation of the community development plans, feasibility studies, and preliminary and detailed design studies, which proved to be redundant. The changes introduced after the MTR proved that neither the quality of the subprojects nor the community ownership suffered from a simpler and swifter preparation. (b) Quality of Supervision The Bank performance in supervision is rated as highly satisfactory, as the team took all opportunities of improvement during field visits and proactively addressed issues, in close partnership with the Borrower. Supervision missions systematically held implementation workshops with OAs, districts, provincial engineers, contractors (as needed), DEA and the PCU, and brainstorming sessions in the field with the project team. One of the field visits found that one district in the Byumba province (outside of the project area) had already successfully implemented public-private partnerships, which created an opportunity for the team to suggest streamlining the experience. The aide-mémoires focus explicitly on the development impact and sustainability, and on ensuring adequate operation of facilities constructed under the project; they review progress of the action plans and include detailed recommendations to address implementation issues. The supervision team remained the same throughout project execution, with the beneficial addition of a municipal engineer based in neighboring Burundi, shortly before the MTR, which allowed the development of a real partnership with the Borrower. The latter expressed 14 repeatedly its satisfaction to the Bank team for its contribution and flexibility in addressing issues. The ISRs were documented and candid. The downgrading of the Implementation Progress rating by the end of 2003 prompted the PCU, DEA and MINERENA to work together with stakeholders to bring the project out of the Problem Project status.11 Fiduciary aspects (including procurement and disbursement issues) were regularly assessed. The infrequent safeguards reviews were eventually compensated by including water resources protection measures in the PRSC matrix. (c) Justification of Rating for Overall Bank Performance Given the above ratings of the two dimensions of Bank performance, the overall Bank performance is rated as satisfactory. 5.2 Borrower Performance (a) Government Performance The Government performance is rated as highly satisfactory, in view of its demonstrated ownership and commitment to the project, the leadership provided by the State Minister for Water and Natural Resources, and the enabling environment created by the decentralization policy. At the macro level, the Government's determination to effectively decentralize development actions with adequate financial and human resources12 was a key factor in enabling districts to take over responsibilities in infrastructure and deliver services. The Government's emphasis on results and accountability (which was evidenced by the frequent removal of insufficient performers among the district mayors) is also highly commendable. Although the provision of counterpart funding was initially problematic, these shortcomings are more than compensated by the very substantial budgetary allocations to the RWSS sector, once the PRSCs came in force. At the sector level, the State Minister appointed in December 2002 demonstrated strong leadership, and was proactive and open to the innovations brought by the project, including the shift to PPP. Once aware of the implementation problems, the State Minister prompted the PCU and DEA to address them. He managed the attrition of DEA staff resulting from the civil service reform by setting up a core team of less than a dozen staff, who prepared the shift to the sector-wide approach while they also managed all RWSS projects. The State Minister also set up a Coordination Committee regrouping all 11It is regrettable to note that, even though the problem project issue was subsequently satisfactorily resolved, the rating persisted in the country portfolio assessment and penalized Rwanda allocation under IDA 14. 12Thirty percent of budget expenditures are decentralized from national level to district level. In addition, the civil service reform allowed redeployment of central government staff to the districts. 15 donors and aiming at converting them to the sector-wide approach, where he persistently advocated harmonization. He also participated in the dissemination of the outcome of the sector policy reforms, both in Rwanda and in international forums. (b) Implementing Agency or Agencies Performance The performances of the project team in DEA and the PCU, and of the districts are satisfactory. The project team faced the demanding task of implementing an entirely new sector strategy and an innovative project with a set of partners with limited experience. The learning curve proved to be slower than expected and resulted in implementation delays. However, the team demonstrated its commitment and capacities in revising the project rules at the MTR, while maintaining a participatory approach to problem-solving. The PCU and the provincial engineers effectively delivered a substantial portion of capacity building activities through a number of workshops and seminars. They successfully addressed several technical shortcomings of the OAs (see Annex 2). Financial management and procurement performances have been adequate. The initial shortcomings in reporting and M&E were resolved after the MTR. The districts took over implementation responsibilities in 2001 and immediately recognized that the restoration and expansion of sustainable WSS services was a key concern of the rural population. The districts played a proactive role in the pilot phase by (i) pointing at implementation delays; (ii) suggesting changes in project rules; and (iii) facilitating the mobilization of community contributions. Later, the district mayors were easily convinced that the PPP was the right option, especially as PPP had been initiated by one of their peers. The mayors demonstrated their leadership by negotiating contracts that reflected the specific conditions of each water system and protected vulnerable users. Throughout the project, their procurement performance has been fully satisfactory. (c) Justification of Rating for Overall Borrower Performance Given the above ratings of the two dimensions of Borrower performance, the overall Borrower performance is rated as satisfactory. 6. Lessons Learned · Implementing an effective decentralization of the RWSS sector supported by effective capacity building is a key factor of success in the development of water and sanitation services in rural areas. To be effective, however, decentralization requires adequate financial and human resources and must be accompanied by an effective monitoring of results by the central Government and by establishing a clear sense of accountability among local authorities. To deliver results, project rules should be as simple as possible and fully flexible, as the commitment of populations is a direct function of the speed at which subprojects are prepared. In addition, capacity building at decentralized level can only be effective when the 16 size and number of local entities is adequate. The 30 Rwandese districts, with an average population of about 250,000 people are in a much better position to benefit from capacity building (and to apply and retain the acquired capacities) than, for instance, the 700 communes of Mali. · There is no one-size-fits-all solution for the management of water facilities, but PPP has a strong potential for the delivery and development of improved water services. Community-based management seems more appropriate for point sources (springs or hand pumps) than for piped systems. The Rwandese experience showed that (i) WUAs offer limited accountability, (ii) maintenance and cost recovery is quite challenging, and (iii) local private operators can be found anywhere. In situations where the operating conditions and actual demand are uncertain, it is not advisable to try to impose the use of standard contracts. The Rwandese districts decided instead to design themselves very simple contracts for candidates offering a minimum of qualifications, which resulted in quite satisfactory arrangements. · Self-standing RWSS projects should also aim at facilitating harmonization and preparing to scale up and to shift to a sector-wide approach and budget support by (i) providing a complete set of tested guidelines and procedures for preparing and implementing investments and for managing and delivering services; and (ii) enabling sector staff, rather than consultants, to elaborate objectives and policy matrix actions. As it was the case in Rwanda, only a strong sectoral leadership at the ministerial level can create incentives for staff and donors to internalize the change in approach and to ensure harmonization. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies (b) Cofinanciers Not applicable (c) Other partners and stakeholders Not applicable 17 Annex 1. Project Costs and Financing (a) Project Cost by Component (in US$ Million equivalent) Components Appraisal Estimate Actual/Latest Percentage of (US$ millions) Estimate (US$ millions) Appraisal A. SUBPROJECTS 10.43 14.10 135% B. REHABILITATION OF MAJOR RURAL WATER 3.40 5.08 104% SUPPLY SYSTEMS C. CAPACITY BUILDING 2.79 1.90 53% D. PROJECT MANAGEMENT 1.35 1.78 102% PPF REFINANCING 0.75 0.67 89% Total Baseline Cost 18.72 23.54 Physical Contingencies 0.47 0.00 Price Contingencies 2.23 0.00 Total Project Costs 21.42 23.54 110% Front-end fee PPF 0.00 0.00 Front-end fee IBRD 0.00 0.00 Total Financing Required 21.42 23.54 110% Calculated by comparing actual costs and appraisal estimates including contingencies. As noted in the PAD, Component A did not entail any contingency and all physical contingencies were allocated to Component B. (b) Financing Appraisal Actual/Latest Source of Funds Type of Estimate Estimate Percentage of Cofinancing (US$ millions (US$ millions Appraisal ) ) Borrower Cofinancing 0.49 0.48 99% Local Communities Cofinancing 0.93 0.60 65% International Development Association (IDA) 20.00 22.45 111% The Borrower also provided USD 5.58 million in parallel financing to construct eight additional piped systems, which had been identified, studied and prepared under IDA financing. 18 Annex 2. Outputs by Component Component A ­ Subprojects Key Outputs. As the subprojects were to be implemented under the demand-based approach, a detailed list of water and sanitation facilities to be constructed under Component A was not included in the PAD. However, the PAD included specific targets for the additional population to be served by the project and the PAD's cost tables were based on an indicative number of facilities. The table below compares the appraisal estimates and the actual figures. WSS Equipment Appraisal Estimates Actual Number Population Served Number Population Served Spring catchments 2,500 150,000 1,201 255,000 Piped systems: - Rehabilitation 25 50,000 21 86,000 - New systems 25 50,000 12 67,000 Total 250,000 408,000 Latrines blocks 125 N/A 134 65,000 Rainwater storage 20 84 The actual outputs for the water facilities are lower than the appraisal indicative figures and the actual outcome is substantially higher (163 percent of the estimate). These results reflect the fact that the average population served by the constructed facilities is substantially higher than expected. The piped systems that were built are also larger than expected. They regroup on average about 15 standposts, against 10 in the appraisal estimates. The piped systems also serve about 450 private connections, which were not contemplated at appraisal. In addition, the OAs completed detailed design studies for eight other systems, the construction of which has been taken over by budget support. These systems will supply another 90,000 people. Sanitation subprojects featured well in the CDPs. With a total cost of RWF 853 million (US$1.70 million equivalent), they represent 15 percent of the total cost of facilities. The actual number of constructed facilities is in line or exceeds appraisal estimates. 105 schools and 4 health centers have been equipped. Quality of Outputs. The final technical audit found that the quality of works was generally satisfactory, regardless of the origin of the contractor (local or foreign). The supervision missions found some design or execution issues in the piped systems that relied on pumping equipment, which had not been explicitly dealt with by the OAs supervision teams. These problems were actually addressed by the PCU and the 19 provincial engineers, who brought the contractors to correct them. The initial design of school latrines also generated maintenance problems, and was subsequently corrected. As noted above, the quality of services of the four partner organizations was not uniform. One of them maintained a fully satisfactory performance. The other three OAs experienced delays, particularly in the early stages of community mobilization, even though they had prior experience with the project district populations. They also encountered difficulties in retaining experienced staff at the supervision stage. Efficiency. As shown in the below table, the average cost of the constructed facilities was lower than the appraisal estimates (-20 percent) for the spring catchments, much higher than expected for the rehabilitated systems (+160 percent) and close to the estimate for the new gravity-fed piped systems. Actually, all rehabilitated piped systems were substantially expanded, which explains the higher average costs. The cost per person served compares favorably with the average costs per capita observed in the region (about US$ 5 for the spring catchments and US$ 50-80 for the piped systems). Water Supply Average Construction Cost Average Cost Number of Equipment of Facility (US$) per Person People per Appraisal Actual Served (US$) Water Point Estimate Spring Catchments 800 640 3 210 Piped systems: - Rehabilitation 50,000 130,500 31 285 - New gravity-fed systems 120,000 116,500 27 520 - New pumping systems N/A 897,000 100 300 Average number of people per spring catchment or per standpost. The piped systems that require pumping cost (on a per capita basis) almost four times as much as the gravity-fed systems. The associated energy costs will further penalize the clients. Gravity-fed systems should thus be the norm when the existence of adequate water resources allows this option. However, it is likely that the trend observed in rural areas toward the grouping of scattered population in the umidugudu (new villages) would lead to a growing recourse to pumping. The promotion of private connections could then allow alleviating the cost of water. The costs of design, supervision and community mobilization were lower than expected (about 24 percent of the construction costs, against 30 percent as expected at appraisal). The changes introduced in the project cycle at the end of the pilot phase (simplification of the technical studies and shifting of community mobilization responsibilities to the district) reduced the work load of the partner organizations and the associated costs. Component B ­ Major Rural Systems Key Outputs 20 This component focused on: (i) the rehabilitation/expansion of the Shyogwe-Mayaga system and its management by a private operator; and (ii) the execution of technical and management studies for preparing the completion of the Lava region systems under separate financing. The actual physical works of the Shyogwe-Mayaga system consisted of: · The rehabilitation of the seven spring catchments (about 120m3/day) · The construction of a new treatment plant at Shyogwe (package units with flocculation, settling tanks and rapid filters) with a capacity of 520 m3/day · The replacement of 60 km of transmission pipes (DN 150-250 mm) · The construction of a 400 m3 storage tank at Kinazi · The rehabilitation and expansion of secondary networks (total length 209 km) equipped with 262 standposts. The rehabilitation and expansion was completed, albeit with major delays attributable to (i) the late selection of the design engineers, as the initial expectations of a negotiated contract with the previously involved engineers failed; and (ii) the slow pace of design studies for the primary branches and secondary networks (antennes). The rehabilitation of the production system and of the main transmission pipe was completed in May 2006, whereas the antennes were completed by the closing date. The system serves 120,000 people. The four districts served by the system set up an inter-district association in September 2005, which obtained assistance from WSP-AF to prepare bidding documents for the selection of the private operator. The operating contract was similar to a lease contract. The operator was expected to be remunerated from the water sales without external subsidies, but with provisions to reassess the economic conditions after a 12-months period, given the uncertainties about the effective demand for water. The late completion of the works delayed the bidding until November 2007, after an intensive search for local private operators. Three candidate submitted bids in December 2007 and the contract was awarded in February 2008 to an NGO, FHI,, which proposed a price of RWF 15/20- liter container (equivalent to US$1.40/m3) and a price of RWF 600/m3 for the private connections. The technical studies (including detailed design and bidding documents) of the completion of the Lava Region systems were completed in September 2004. The cost of completion was then estimated at US$11.6 million. The management studies were postponed, pending the assessment of the existing operators' performance, specifically: (i) in the Western part a provincial public utility in Gisenyi, which had taken over from the collapsing water users associations established in 1997; and (ii) in the Eastern part (Ruhengeri), the national water utility, Electrogaz, which was then under private management. The project provided assistance in the form of water meters for the Gisenyi utility and technical assistance from the provincial engineer. In 2005, the African Development Bank provided US$6.8 million to complete the systems in the Eastern part, which remains under Electrogaz' management. The 21 Government provided US$1.2 million for the networks, which will provide access to water services for about 116,000 people. As the performance of the Gisenyi utility became unsatisfactory, the districts and the Gisenyi province decided to seek a private operator. The latter was recruited in 2007 with the support of the Dutch bilateral assistance, which provided in turn US$1.6 million for the completion of the Western part, which may supply about 190,000 people. Quality of Outputs. The quality of the physical works of the Shyogwe-Mayaga system is satisfactory. After the completion of the production facilities, heavy rainfall in the summer of 2007 caused damages to the spillway of the Shyogwe dam. Repairs were carried out at the end of 2007 with Government financing. The December 2007 review by the Bank safeguards specialist raised concerns about the protection of the watershed feeding the Shyogwe reservoir watershed from potential contamination by fertilizers and pesticides. After a field visit, it was agreed that MINITERE and the districts will seek strict enforcement of the protection perimeter already established around the reservoir. This situation could have been avoided by a closer involvement of the environmental specialist. The quality of the technical studies and of the management assistance of the Lava Region system is evidenced by their satisfactory outcome in attracting adequate financing from other donors and promoting private operators. Efficiency. The actual cost of the rehabilitation of the Shyogwe-Mayaga system was US$4.55 million, i.e. 30 percent higher than the appraisal estimate of US$3.5 million. This corresponds to US$38 per person served (US$58, including the cost of the secondary networks), which still compares favorably with the average costs per capita observed in the region (see above). The design and supervision costs (6.5 percent of the construction costs) were much lower than the one observed in the Subprojects Component. The technical options (simple treatment process and gravity-fed supply) warrant straightforward and low-cost operations of the system. Component C ­ Capacity Building Key Outputs. Overall, this component helped finance 35 workshops (US$0.23 million) and 290 person-months of training (290 person-months in Rwanda and 50 abroad, mostly in Africa) at a cost of US$1.01 million. The equipment (US$0.47 million) included 10 computers and ancillary equipment, 4 vehicles and 8 motorcycles. Consultant services (US$0.19 million) were used for the financial and technical audits. The component was carried out in three phases, which were closely connected to the implementation of the project. These phases were as follows: Phase I: Initial learning (pilot phase, from effectiveness to the start-up of the first works contracts). This phase allowed the improvement of the basic capabilities of the 22 stakeholders and the integration of the pilot CDCs, districts and communities in the project. It consisted of (i) supply of the initial equipment (information technology, office equipment, vehicles and motorcycles) of the PCU and the provincial units; (ii) basic training in procurement (PCU, provincial units and also officers of the National Tender Board in charge of monitoring the project procurement) and participatory techniques (provincial units, CDCs and districts); (iii) visits to other African countries (Benin, Uganda and Burkina Faso); and (iv) periodic workshops with the districts and the CDCs to build awareness of the project approach and the subprojects' implementation manual. Phase II: Exchange of experiences (from the start-up of the first works contract to the MTR). This phase enabled acceleration of the subproject cycle by revising and simplifying procedures and reallocating implementation responsibilities in light of the increased capabilities of the districts. It consisted of (i) exchanges of experiences (among districts, provincial units and partner organizations) in the implementation of subprojects, through workshops; (ii) specific technical training seminars (masons, sanitation technologies and training of caretakers ("fontainiers de secteur"); and (iii) an assessment of the implementation procedures, culminating in the workshops of the MTR, which regrouped all stakeholders Phase III: Dissemination (from the MTR to project completion). This phase allowed spreading best practices, particularly for facilities management, and documenting the progressive shift to the sector-wide approach. It consisted of (i) finalizing and disseminating the revised implementation procedures; (ii) disseminating the experience of the Northern Rwanda districts with private operators through workshops and field visits; (iii) disseminating the Rwandese experience with budgetary support and local private operators in international for a (including the Bank's Water Week); and (iv) assessing the project execution and outcome (technical audit and impact study). Efficiency The cost of this component was substantially lower than expected (53 percent of the appraisal estimate). This is attributable to the intensive use of workshops and seminars managed by the PCU (particularly during the second and third phases) and a lesser use of external providers and training abroad. It should be noted that the Government closely monitored the recourse to external training to avoid unnecessary expenses (all travel for training abroad had to be cleared by the Council of Ministers). In addition, the component benefited from WSP-AF support, which helped reduce project expenditures. 23 Annex 3. Economic and Financial Analysis This annex presents the results and methodology followed in the ex-post economic analysis of the project. Introduction and Methodology The project has improved water supply and sanitation coverage and services to rural communities in seven districts through the construction, extension and rehabilitation of point sources and piped systems, the extension and rehabilitation of one major water supply system and the promotion of low-cost sanitation systems. The immediate impact is a greater quantity of safer water and a more convenient source of water for about 528,000 people, safer and more convenient wastewater and excreta disposal and improved hygiene habits. Most benefits accrue to households, and within households, to women and children who spend on average one hour per day fetching water (Source: National Inventory of Water Supply; MINERENA/GTZ) and to children under five, whose health is particularly vulnerable to bad water quality. The ex-post cost-benefit analysis was carried out to calculate the economic net present value (NPV) and internal rate of return (EIRR) of the water supply investments of the project, i.e. about 72 percent of the total project costs. The methodology is similar to the one used in the PAD. Economic benefits depend on the type of improved water supply (springs, piped system) and on the extent to which it is used by the communities, which in turn depends on the original source of supply (standpost, protected or unprotected spring, fetching water or vendors). Two types of benefits accruing to the beneficiaries using the new source were estimated: (a) the cost savings associated with a decrease in use of the traditional source; and (b) an increase in consumer surplus on the increased quantity of water used. Depending on the traditional source used, the cost savings considered are: the costs saved from not having to buy water from vendors, or the costs saved from not having to spend time fetching water. Main Assumptions Water Use and Water Rates. Information on water supply conditions (source of supply, consumption, prices and time spent in fetching water) was gathered as follows: (i) for the water supply conditions before the project, from UNICEF surveys and the WTP survey carried out during project preparation; and (ii) after the project, from the impact study and from statistical information collected from the private operators. It is estimated that 80 percent of the population use the new supply and that the average daily consumption per capita is about 8.5 lpcd at springs, 10 lpcd for people using pumping systems and 13 lpcd for the gravity-fed systems (including Mayaga). Water fetched from traditional sources is free. Water costs between RWF 20 and RWF 30 per 20 liter container from vendors, RWF 2.5 to RWF 5 at the standposts of gravity- 24 fed systems (new or rehabilitated) and RWF 15 at the standposts of pumping systems and of the Mayaga system. A yearly fee of RWF 300 is charged to households supplied by springs. The time spent fetching water would be reduced from 45 minutes to 30 minutes at the springs built as part of the project. The table below describes the water supply conditions of households for each type of water facility, before and after the project, namely (i) the daily consumption of water (in lpcd); and (ii) the actual source of supply used (as a percentage of the total number of households). Water Supply Conditions Before and After Project Water supply conditions Comments Before Project After project New source of supply Daily cons. Distribution Daily cons. Distribution (lpcd) % (lpcd) % Springs: actual source of supply Average population served = 210 Fetching water 8 50 % 8 17 % Time spent :1 hour / day Vendors 2 10 % 2 3 % @ RWF 20/container Spring 8 40 % 8.5 80 % Time spent : ½ to ¾ hour / day Rehabilitated piped system: Average population served = actual source of supply 4,150 Standposts 7 40 % 13 80 % @ RWF 3.75/container Fetching water 8 20 % 8 7 % Time spent :1 hour / day Vendors 2 10 % 2 3 % @ RWF 20/container Spring 8 30 % 8 10 % Time spent : ½ to ¾ hour / day New system (gravity-fed) : Average population served = actual source of supply 4,350 Standposts 0 20 % 13 80 % @ RWF 3.75/container Fetching water 8 30 % 8 10 % Time spent :1 hour / day Vendors 2 10 % 2 2 % @ RWF 20/container Spring 8 40% 8 8 % Time spent : ½ to ¾ hour / day New system (pumping) : Average population served = actual source of supply 9,000 Standposts 0 20 % 10 80 % @ RWF 15/container Fetching water 8 30 % 8 10 % Time spent :1h 30mn / day Vendors 2 10 % 3 2 % @ RWF 30/container Spring 8 40% 8 8 % Time spent :1h 30mn / day Major Systems (Mayaga) Population served = 120,000 Standposts 5 5 % 13 80 % @ RWF 15/container Fetching water 8 45 % 8 9 % Time spent :1h 30mn / day Vendors 3 10 % 18 2 % @ RWF 30/ container Spring 8 40 % 5 9 % Time spent :1h 30mn / day The cost savings of not having to fetch water was estimated as the opportunity cost of time spent fetching water and is equal to 30 percent of the average income in rural areas. Incremental Operating Costs. Average annual costs of the various types of supply were estimated on the basis of actual costs registered by operators. The operating costs of the Mayaga system (treatment, energy, maintenance and commercial costs) are based on the estimates provided by consultants in the rehabilitation studies and checked against actual data obtained from Electrogaz. Operation and maintenance costs are summarized in the following table. 25 Operation and Maintenance Costs (RWF) Type of water supply system Gravity-fed Pumping systems Mayaga system systems Maintenance costs 1.5 % of 1.5 % of 1.5 % of investment costs investment costs investment costs Commercial costs RFW RFW RFW 10,000/standpost 10,000/standpost 10,000/standpost Energy costs - RWF 80/m3sold RWF 20/m3sold Treatment costs - - RWF 50/m3sold Overhead costs 15 % of annual 15 % of annual 15 % of annual revenues revenues revenues rehabilitated systems and new systems Summary of Benefits and Costs Conversion factors were used to translate financial flows into economic values. It was assumed that the shadow exchange rate equals the financial exchange rate. Based on IDA norms for projects in Rwanda, a 10 percent discount rate was used. The period of the analysis is 25 years, starting in 2006. The results of the cost-benefit analysis are summarized in the following table: NPV and EIRR of the Water Supply Sources Technical Options NPV (US$ million) EIRR (%) PAD ICR PAD ICR Springs 0.92 1.60 19.4% 65.4% Rehabilitated piped systems 0.57 -0.03 19.1 9.8% New piped systems: -0.42 -0.58 8.3 6.9% - gravity-fed systems n/a 0.22 n/a 13.6% - pumping systems n/a -0.74 n/a 3.6% Mayaga system 0.42 -0.48 11.3 9.0% Global 1.67 0.51 12.6 10.6% The global NPV is positive. However, the actual results are slightly lower than the PAD estimates, with the exception of the spring catchments, which serve on average more than twice as many people as expected. The high investment cost of the new pumping systems brings down the NPV. This is also true, though to a lesser extent, for the Mayaga system, the cost of which was 30 percent higher than expected. The new gravity-fed systems generate a higher EIRR than expected 26 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Responsibility/ Specialty Lending Richard Verspyck Lead Water & Sanitation Spec. AFTU2 TTL Franz Drees Water & Sanitation Specialist AFTU2 Initial design Marie-Chantal Uwanyiligira Project Officer AFTG1 Country Coordination Marie-Laure Lajaunie Water Resources Specialist MNSRE Economic Analysis Hassane Cisse Counsel LEGAF Legal David Freese Disbursement Officer LOAAF Disbursements Abdul Hajji Financial Management Specialist AFTFM FM aspects Prosper Nindorera Procurement Specialist AFTPC Procurement Ernestina Attafuah Sr. Program Assistant AFTU2 Cost tables Andrew Makhoka Water & Sanitation Specialist WSP- Implementation ESA arrangements Supervision/ICR Christophe Prevost Sr. Water & Sanitation Specialist AFTU2 TTL Serigne Omar Fye Sr. Environmental Spec. AFTEN Safeguards Chantal Kajangwe Procurement Analyst AFTPC Procurement Alain Morel Consultant ETWAF PPP Technical and Deo-Marcel Niyungeko Municipal Engineer AFTU2 implementation aspects Emmanuel Tchoukou Financial Management Specialist AFTFM FM aspects Richard Verspyck Consultant AFTU2 (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle No. of staff weeks US$ Thousands (including travel and consultant costs) Lending FY96 FY97 FY98 FY99 FY00 38 214.28 Total: 38 214.28 Supervision/ICR FY00 1 0.90 27 FY01 15 83.45 FY02 19 78.05 FY03 21 98.12 FY04 19 87.45 FY05 21 75.54 FY06 17 73.18 FY07 26 127.40 FY08 11 76.00 Total: 150 700.09 28 Annex 5. Beneficiary Survey Results Not applicable 29 Annex 6. Stakeholder Workshop Report and Results Not applicable 30 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR 1. INTRODUCTION The Rural Water Supply and Sanitation Project (RWSSP) is a project designed (from 1998 to 1999) as a pilot to test the water supply and sanitation policy adopted in late 1997, whose central pillar for setting up the sustainable water supply and sanitation (WSS) systems was a participatory and demand-responsive approach. The project also introduced a bottom-up project cycle, as opposed to the classic top-down project cycle. Total project cost is US$21,420,000, including US$20,000,000 in the form of an IDA credit negotiated and obtained by the Rwandan Government and US$1,420,000 to be provided by the Rwandan Government with the participation of the beneficiaries. The credit agreement was signed on August 7, 2000 and came into effect on January 31, 2001. Before the reform of the Administration, the project was managed by a team steered by the coordinator and made up of civil servants and contract staff. Following the reform, in 2005, it was managed by a team of contract staff under the supervision of the Directorate of Water & Sanitation [Direction de l'Eau et de l'Assainissement]. The project has adjusted to the various administrative changes (central and decentralized reforms). The decentralized financing facility applied by the RWSSP was ultimately extended to the entire sector. 2. THE PROJECT GOALS 1. Increase the availability and sustainability of water supply and sanitation (WSS) systems in rural areas by promoting simple WSS systems 2. Build the capacity of (a) the communities to plan WSS investments and manage WSS services, and (b) the bodies responsible for district WSS services, users and the private sector to discharge their respective sector strategy responsibilities. 3. Rally community support for (a) the rehabilitation and/or expansion of the major water supply systems, and (b) the operation of the said water systems by the private sector. 3. THE PROJECT COMPONENTS The project is made up of four components: 3.1. COMMUNITY SUB-PROJECTS COMPONENT This component provides grants to the districts covered by the project to: Conduct the WSS works, including: - Protected springs - Building and/or rehabilitating water supply systems (gravity and/or pumped) - Boreholes equipped with handpumps - Building sanitation facilities (latrines, rainwater collection, rainwater and wastewater drainage and disposal) 31 Prepare the water and sanitation components of the Community Development Plans (CDPs) by means of consultant services and training of the Community Development Committees (CDCs). Design and implement the engineering components for the sub-projects. Build the community-based groups' capacities. 3.2. MAJOR WATER SUPPLY SYSTEMS COMPONENT Rehabilitate and extend the Mayaga water supply system to include: (i) water catchment, treatment plant, headworks and other production facilities of the system; and (ii) the said system's main trunk. Assist with the rehabilitation of the Lava Region systems, to include: (i) an evaluation of (a) the operational, social and management conditions for the installations delivered under the 2nd Water Supply Project, and (b) the investments required to achieve the initial service goals for the said systems; and (ii) the definition and implementation of sustainable operational and management procedures, including the operation of the systems by private-sector bodies. 3.3. CAPACITY-BUILDING COMPONENT Build stakeholder capacity to ensure the adequate and timely delivery of supplies, works and services for the WSS sector, including: - Building the capacity of the CDCs to perform their project duties - Providing adequate training, including contracting service providers and partner organizations Build the capacity of the Ministry of Energy, Water and Natural Resources [Ministère de l'Energie, de l'Eau et des Ressources Naturelles ­ MINERENA] to perform its project duties by means of: (a) the provision of technical consultants for the MINERENA personnel assigned to the project, (b) reviews of the Water Supply and Sanitation Programs, (c) identification of subjects for studies, (d) an information campaign to promote widespread hygiene education, (e) an external project impact appraisal, and (e) an exchange program with other countries on project- related issues. 3. 4. PROJECT MANAGEMENT COMPONENT Build the management and supervisory capacities of MINERENA and the CDCs by means of: (i) the building and fitting out of offices for CDC sub-committees and regional MINERENA services, and (ii) the purchase of office equipment, vehicles, motorbikes and bicycles. Monitoring and evaluation activities, and project audits. 4. PROJECT DESIGN The project was designed as a pilot project to test the new Water Supply and Sanitation policy newly adopted in 1997, based on a demand-responsive approach and the participation of beneficiaries in the different sub-project phases (from initiation through implementation to management). In addition, the project links the Water Supply and Sanitation in a concrete manner with the building of sanitation works and the promotion of the Hygiene and Sanitation in Schools Program 32 [Programme d'Hygiène et Assainissement en Milieu Scolaire ­ HAMS]. The planned WSS systems are technically simple systems that can be managed by the local populations. Given the need to set up sustainable systems, the entire project design prioritized user involvement, primarily with meetings to validate the Community Development Plan's Water Supply and Sanitation sector. The project's crucial phase concerned mobilizing and raising the awareness of all the stakeholders in the new approach. The studies were conducted in a participatory manner. 5. PROJECT IMPLEMENTATION The implementation of this project, and especially its sub-project component, was based on the demand-responsive approach and the participatory approach, with the particularity of financial participation in sub-project investment. The choice of zone for the project was determined after its launch and was based on the criteria previously defined during the project preparation phase. These criteria included a low level of water supply service, the existence of the resource, the level of priority placed on WSS in the Community Development Plan (ranked 3rd place at most), and the absence of similar projects. The existence of a Community Development Plan (CDP) was a prerequisite in all cases to be able to understand the populations' needs and their rankings in terms of priority. Sixteen communes were selected on the basis of the said criteria. Following successive administrative reforms, where the communes became districts and then larger districts reducing in number each time, the project covered 7/30 districts in the country. Nevertheless, the zone of operations remained the same even though the administrative entity changed. These different changes affected project implementation essentially in terms of administrative partners, who frequently changed. The project had to adjust to this. Project information meetings were held for the new administrative authorities whenever they were needed. In view of the decentralized nature of the project, the funds to finance the implementation of the sub-projects were transferred to the districts following the signing of a grant agreement between MINERENA represented by the Rural Water Supply and Sanitation Project (RWSSP) and the District. The entire contracting and works supervision process, as well as the choice of operators for the systems, was managed by the district with the assistance of the partner organizations and the project engineer based in the province. Important stages in the implementation of the sub-projects: Mobilisation stage (2001), marked by: - Various meetings and seminars held by the Project Coordination Unit for the project partners - ToR and standard documents such as bidding documents and procedures manual produced Study stage, which was longer than planned (2002-2003): - Districts assisted with the production of the CDPs - Partner organizations selected, studies conducted (preliminary design and detailed design), and financial participation by applicants for sub-projects 33 - Agreement signed with the districts Works stage (2004-2007) corresponding to the works contracting process and execution. The project was extended by one year to finalize the Shyogwe-Mayaga sub-branch works and consolidate the private-sector management of the systems. In terms of participation, the project was extremely pleased with the level of beneficiary involvement as demonstrated by (i) the free provision of land for the works, (ii) financial participation even before the detailed designs were drawn up, and (iii) participation in the actual works. Participation on these three levels is what underpins the beneficiaries' current level of ownership. 6. MID-TERM PROJECT REVIEW This review enabled adjustments to be made to speed up the implementation of the project, which had no physical infrastructure achievements to show after four years. These adjustments entailed involving the provincial engineers in the studies conducted for the springs and latrines with the assistance of the district hydraulic engineers, hitherto conducted by the partner organizations; acknowledgement of the failure of the WSS systems by the water agencies; and across-the-board adoption of the private operator principle. The involvement of the provincial engineers in the studies substantially reduced study lead-times in two new districts. The principle of setting an annual funding ceiling for the districts was also reviewed to take in only the district's overall program resulting from the multiannual investment plan drawn up by each district. The adjustments agreed upon following the review were designed to facilitate project implementation. 7. RESULTS Component 1: Community sub-projects A number of activities preceded the execution of the WSS works and prompted ownership by the beneficiaries: The Project Coordination Unit applied the new approach to the Water Supply and Sanitation sector Assistance was provided to the districts to draw up the Community Development Plans (CDPs) The partner organizations held meetings at sector and district level to validate the CDP's Water Supply and Sanitation sector The partner organizations conducted preliminary design studies with the participation of the beneficiaries The results of the preliminary design studies were presented to users for validation followed by ranking in order of priority and multiannaul planning of the WSS sub-projects The grant agreement was signed between the RWSSP and the District Two accounts were opened, one for IDA funds (grants to the district), and the other for beneficiaries' contributions to sub-project funds Detailed design studies for all the WSS sub-projects featured in the multiannual planning 34 In terms of infrastructure delivered: Drinking water (i) 33 water supply systems (30 gravity and 3 pumped) of a length of 432.7 km with 565 public standpipes, 7 water kiosks and 450 house connections. Note that 22 of these systems are rehabilitations and 11 are new systems, with two being pumped. (ii) 212 km of sub-branches off the Shyogwe-Mayaga system, counting 262 public standpipes serving 120,000 people (iii) 1,207 protected springs, including three handpumps. The population served by these systems totals 528,653 people, which is well over the 370,000- person target set in the project goals. Sanitation The RWSSP was the first water project to properly take in the sanitation sector with concrete infrastructure achievements, which form the basis for the promotion of hygiene. It built 134 ventilated and drainable latrines, and 84 rainwater storage tanks of 10 m3 each. These sanitation facilities serve 65,883 people in schools and in clinics with a total of 111 beds. Moreover, different sanitation technologies applicable to Rwanda were studied. HAMS Program As part of the promotion of hygiene and sanitation, the Hygiene and Sanitation in Schools Program [Programme d'Hygiène et Assainissement en Milieu Scolaire ­ HAMS] was developed in order to initiate young children into good hygiene practices. The following important actions were taken in this area: HAMS committees were set up at the level of all districts and schools in the project zone. The National HAMS Committee comprising representatives of the Ministry of Education [Ministère de l'Education ­ MINEDUC], the Ministry of Local Administration [Ministère de l'Administration Locale ­ MINELOC], the Ministry of Health [Ministère de la Santé ­ MINISANTE], and the Ministry of Energy, Water and Natural Resources [Ministère de l'Energie, de l'Eau et des Ressources Naturelles ­ MINERENA] was created and strengthened. Training was given to members of the different HAMS committees, training a total of 505 people on the HAMS primary and secondary school committees in hygiene and sanitation considerations, and 83 people on the HAMS district committees. Radio spots were broadcast on hygiene and sanitation. Plays performed by Urunana Development Communication were broadcast in the national language on the BBC and national radio. These messages promoted changes in hygiene and sanitation behavior. Articles on hygiene and sanitation, and the management of the WSS systems, were published in the leading national newspaper. A Hygiene Fund was set up for each school in the project zone. It is funded by the school's own revenues and by contributions from the pupils' parents, to which may be added various subsidies. This Fund is used to purchase hygiene materials such as toilet paper and hand soap. 35 The evaluation conducted in October 2007 showed that 80 percent of the school and clinic latrines are well-maintained and in a highly satisfactory state of hygiene. The RWSSP prompted a nationwide rollout of the HAMS program. The other sector players, such as UNICEF, have started to support this program, which will produce a teacher's handbook to incorporate hygiene and sanitation into the teaching program. Component 2: Major water supply systems This component comprised two major activities: A technical assessment was made of the water supply systems in the Lava Region with a view to their completion. This technical assessment gave rise to bidding documents for the entire primary network and a cost estimate for the work to be done (approximately 11 million). A study on modernizing the main 60 km-long Shyogwe Mayaga network and water treatment plant was conducted and followed by rehabilitation work on the 60 km-long Shyogwe- Mayaga primary water supply system. Component 3: Capacity-building Capacity-building concerned all central and decentralized levels in a range of areas. Decentralized level: 771 water technicians trained in building VIP latrines and rainwater storage tanks. 290 hydraulic engineers trained in protected small springs and water supply system maintenance. All the members of the district CDCs in the project zone trained in Participatory Rural Appraisal (PRA). 42 district-level procurement officers trained in contracting. Study trips in the districts to exchange experiences, especially on the management of WSS infrastructures. A seminar was held in Kibuye in October 2004 with the authorities and technicians of the districts covered by the project to discuss the management options. Private operators from Byumba took part in this meeting to talk about their experiences in the matter. At the end of the seminar, the participants unanimously recommended contracting out the WSS infrastructures to private operators. Central level: Different training courses were given to 21 people from MINERENA and the NTB (National Tender Board). A study trip was organized to Benin for three people at the beginning of the project to see how the participatory projects are steered. Partner organizations, such as engineering firms and companies, acquired expertise in conducting water supply works, and a new development emerged in the form of the construction of public 36 latrines in which no support agency had been interested, and likewise for small springs, which had been left to untrained hydraulic engineers. At least five national companies developed their expertise as a result of the different contracts conducted. Of the 33 water supply systems built or rehabilitated, only one was executed by a foreign firm. All of the Mayaga sub-branches were rehabilitated by local firms. Only the primary network was executed by an outside company. 8. MANAGEMENT OF THE WSS INFRASTRUCTURES The sustainability of the WSS systems was one of the project's main goals. This goal was largely achieved in the operations zone, principally as a result of the promotion conducted by the project. The project initially intended to put in place infrastructures and, at the same time, set up community-based management structures. Nevertheless, an evaluation conducted by the Directorate of Water & Sanitation [Direction de l'Eau et de l'Assainissement ­ DEA], with project assistance in the first quarter of 2004, revealed the failure of community-based management and the success of the first private managers in the north of the country. This management model was replicated and scaled up at project level. A number of activities were conducted to promote public-private partnerships in the districts covered by the RWSSP and beyond: Study trips in the districts practicing public-private partnerships, for the authorities of the districts covered by the project and the other rural districts. Seminar for the authorities of the districts in the project zone to promote public-private partnerships (PPPs). National seminars to build district authority awareness of PPPs. Meeting of private operational operators to exchange experiences. Assistance from the RWSSP provincial engineers to the districts to prepare operator recruitment dossiers and contracts. To round it off, undertakings with a local consultant, with WSP support, to step up assistance to the districts with the PPP program. The result of these activities is that the transfer of the management of the WSS systems to private operators has become a widespread trend in the Water Supply and Sanitation sector. For example, the 33 water supply systems built and/or rehabilitated and the Shyogwe Mayaga system are managed by private operators. The foremost example of these water supply systems is the 272 km-long Shyogwe Mayaga system, which serves 120,000 people. Its management has just been transferred to the international NGO FHI, in association with a local organization. The operators are selected on the basis of a bid for tenders. The RWSSP has provided support to the districts to prepare their own bidding documents for the recruitment of operators. This option (PPP and its promotion) taken up by the RWSSP has had a highly positive impact on all the water supply systems in the country's different districts such that, by the end of 2007, 24% percent of the water supply systems were managed by private operators and the PPP had become the preferred management model to guarantee the sustainability of the WSS installations. One- third of the managers are women. 37 Water rates depend on the type of system (gravity with or without treatment, pumped, or protected spring). The rate for a 20-litre jerry can varies from FR2.5 (gravity system) to FR15 (pumped system), which is equivalent to US$0.24 per m3 to US$1.4 per m3. The households with house connections pay FR185 to FR600 per m3 (pumped and/or treatment). A system of tokens purchased in advance (model applied to the Ngenda water supply system) is used to make it easier for households to pay in advance. Vulnerable families identified by the population are exempt from paying for water. Water consumption varies from 10 to 13 liters per person drawing water from the standpipe, and stands at 20 liters per person per day for households with house connections. The daily consumption for people using protected springs is 8 liters per person. Although water quality may have improved significantly, the distance traveled to draw water remains the same and plays a significant role in quantities consumed. The private management model applied during the project, and thereafter nationwide, is currently attracting other of the region's countries, which are visiting for exchanges of experience to see how to adapt it to their own countries. In late 2007, the project hosted two delegations from Mali and Burkina Faso and the RWSSP team was invited to India to present Rwanda's experience in managing WSS systems. The beneficiary institutions manage the sanitation infrastructures, especially the school latrines wherein each school's HAMS committee (made up of parent, teacher and pupil representatives) supervises sound maintenance. The October 2007 evaluation found 80 percent of the latrines to be extremely well maintained. 9. CONSOLIDATION OF PRIVATE MANAGEMENT Given that management by private operators is a new model, the RWSSP, via the provincial engineers, assisted the districts with operator supervision. However, it also oversees the management organization, especially technical, of these operators. A national forum of private operators was set up under the name of the Forum of Private Water and Sanitation Operators of Rwanda [Forum des Exploitants Privés de l'Eau et de l'Assainissement au Rwanda ­ FEPEAR]. The training provided to technicians has solved the human resources problem, and the capacity of the districts is sufficient to oversee the operators. Nevertheless, MINERENA will still have to provide assistance for monitoring and evaluation. Likewise, WSP is interested in continuing to assist private operators and in recruiting new operators for systems not yet managed by the private sector. In this regard, a WSP-funded training course for 33 private operators was held in April 2008. 10. SECTOR DECENTRALIZATION The RWSSP prompted widespread decentralization in the Water Supply and Sanitation sector with its successful fund transfers. All the sub-project funds were transferred to and managed soundly by the districts. The districts themselves managed the contracting process and works supervision with the assistance of the Provincial Engineers and Project coordination Unit. The sector financing facility in the districts is based on the principle of the decentralization of funds such that 30 percent of the budget allocated to the sector in 2007 was decentralized. 38 11. PROGRAM APPROACH To smooth the way for the program approach, the RWSSP drew up standard bidding documents for the studies and works, and a technical and financial implementation manual for the sub- projects. 12. WORLD BANK PERFORMANCE The World Bank regularly and conscientiously monitored the implementation of the RWSSP with twice-yearly supervision missions conducted by the Bank's team and managed by the Task Team Leader (TTL). Each of these supervision missions gave the Bank an opportunity to assess the Project Coordination Unit with a view to improving its performance. The supervision missions were underpinned by videoconferences (twice a year) for the parties, the Bank and Rwanda via the Project Coordination Unit, to discuss project progress on the whole, but also and above all to review the schedule of activities decided on for a given supervision mission. These conferences provided an effective framework for the regular monitoring of activities and firm support to the RWSSP's Project Coordination Unit. In addition to the missions and videoconferences, project supervision by the TTL was also the subject of close and regular contacts by telephone and e-mail. The appointment of a new TTL in late 2006 changed nothing, since the new TTL had followed the project from the start and taken part in the various supervision missions. It therefore proved useful to keep the same team from start to finish, an approach recommended for all projects. Responses to the various non-objection requests sent by Rwanda to the Bank were extremely prompt: the average response lead-time was one week at the most. As the 2004 mid-term review found the approach to be rigid, the Bank showed flexibility in discussing streamlining to be adopted with the Rwandan party, including the implementation of pre-feasibility studies which, initially conducted by the partner organizations, were assigned to the provincial engineers who have also been given responsibility in the new districts chosen. The Bank team in charge of the project was the driving force behind the RWSSP's inception of private operator management of the infrastructures, whereas the initial idea for the project was to assign management to the water user associations (Régies Associatives). Financially speaking, the disbursement services did their best to regularly credit the special account. Telephone calls and e-mails to and from the project kept the information flowing and prevented any hold-up in communications. 13. BORROWER PERFORMANCE The Project Coordination Unit: CEPEX made evaluations of the activities conducted, followed by recommendations to the Project Coordination Unit to improve performance and achieve the targets set. CEPEX holds quarterly meetings with the project units to closely monitor the projects. The Borrower disbursed all the counterpart funds, even though there were delays in the payment of these funds in the initial years of the project. 39 14. BENEFICIARY PERFORMANCE Excellent participation in the studies, giving rise to a multiannual investment plan for all the WSS sub-projects. Close cooperation with the project personnel and partner organizations. Land for works provided free of charge The beneficiaries set up a supervisory committee to monitor works execution on a daily basis. Once the works have been completed, this same committee supervises, alongside the district, the private operator managing the WSS systems. The beneficiaries contributed to the investment by means of their financial participation and also shared in the works. The local authorities soundly managed the funds allocated to the sub-projects, contracted works in a totally transparent manner, and regularly monitored the works with the control mission and the provincial engineer recruited by the project. 15. LESSONS LEARNED Participatory approach It was observed that this approach involves the beneficiaries, who ultimately own the outcomes of their requested sub-projects. The different methods used to get the population involved (validation meetings for the water and sanitation sector of the Community Development Plan (CDP), consultation during the studies, presentation of study findings and collection of beneficiaries' comments to include them in the final report, and setting up of a supervisory committee made up of representatives of the beneficiaries) created the conditions for perfect participation. The population took a large part in the actual works and really feels as if it owns the sub-projects. Decentralization Decentralization forms a development framework wherein all stakeholders take part in deciding on the actions to improve living conditions. The district authorities really took responsibility for the project activities, and planned in order to meet the demands of the populations to whom they are accountable. Public-private partnership Following several years of unsuccessful community-based management, transferring the management of the WSS systems to the private sector was found to be the surest way of guaranteeing their sustainability. To improve on this positive development, the contract should be clear and should detail the responsibilities of each party where the beneficiary is concerned (consumer-responsive). PPPs also create jobs for local technicians and generate a district water account credited by the fees paid by the managers. 40 16. POST-PROJECT The project made available the studies and bidding documents for the water supply systems in the Lava Region to the Government. It also conducted all the WSS sub-project studies in the geographic area of action and drew up the corresponding bidding documents. The project's limited budget was such that not all the studies could give rise to works. Some of the works proposed by the studies and the remaining bidding documents are being executed by means of budget support and other donors. Lava major water supply system The AfDB is financing the Mutobo Basse water supply rehabilitation work underway for a total of FR3.65 billion. This water supply system will supply 78,000 people. The Government is financing the Mutera water supply rehabilitation work, for a total of FR600,000,000. The Mutera water supply system supplies 38,000 people. The public-private partnership has given rise to financing from PWN (Dutch) to rehabilitate the Yungwe-Bikoré plant (6,000 m3/day) and the Mizingo plant (1,000 m3/day). AQUAVIRUNGA, set up in partnership with PWN, AQUARWANDA and the district of Rubavu, will manage the plants following their rehabilitation. Sub-projects The works for the sub-projects not yet executed are currently financed by means of Budget Support, which increases each year: 2006 (US$1.2 million) and 2007 (US$6.3 million). In 2006: three new 46 km-long systems, serving 11,175 people, and extensions to two existing water supply systems in order to supply two large schools with more than 1,000 pupils. In 2007: five water supply systems, covering four new 183 km-long systems (two pumped and two gravity), with 156 standpipes and one rehabilitated 35 km-long system with 45 standpipes. They serve 78,066 people. Construction of 120 public ECOSAN latrines along the main asphalted roads. The work for the remaining studies conducted will also be financed either by the Government, by means of budget support, or by assistance from the different donors. Moreover, private operator supervision and new operator recruitment for the new infrastructures will remain the sector's priority to guarantee the sustainability of the WSS systems. 41 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders 42 Annex 9. List of Supporting Documents Project Design and Execution Project Appraisal Document for the Rwanda Rural Water Supply and Sanitation Project; World Bank; Report No. 20419 (May 2000) Project Implementation Manual Aide-mémoire Mid-term Review Mission; IDA (May 2004) Aide-mémoire Supervision Mission; IDA (October 2005) Aide-mémoire Supervision Mission; IDA (November 2006) Aide-mémoire Supervision Mission; IDA (May 2007) Aide-mémoire Completion Mission; IDA (December 2007) Assessments Evaluation de la participation des districts et des bénéficiaires ; PADEAR (February 2004) Revue de l'expérience de la gestion des systèmes ; DEA, Section de mobilisation sociale (April 2004) Rapport d'évaluation des installations sanitaires réalisées avec l'appui du PEAMR; HAMS (October 2007) Audit technique du Projet Eau et Assainissement en Milieu Rural ­ Rapport final; Hydro-R&D International (December 2007) Impact study Facilities Management Contrats opérateurs privés Contrat Mayaga Gestion d'eau potable dans le district de Nyamasheke; BEGC (April 2007) Exploitation privée des systèmes d'alimentation d'eau potable dans le district de Gisagara ; Association Twifashe (April 2007) RWSS Sector Development EDPRS Joint Review ­ Water and Sanitation Sector; MINITERE (November 2006) Scaling up Investment and Reforms through National Program and Performance Contracts (Rwanda Presentation to the SDN Water Week); MINITERE (March 2008) 43 MAP 44