Document of The World Bank Report No: ICR00001089 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-37980; IDA-H0530) ON A CREDIT IN THE AMOUNT OF SDR 20.3 MILLION (US$28 MILLION EQUIVALENT) AND A GRANT IN THE AMOUNT OF SDR 9.5 MILLION (US$13 MILLION EQUIVALENT) TO THE REPUBLIC OF CONGO FOR AN EMERGENCY RECOVERY AND COMMUNITY SUPPORT PROJECT June 26, 2009 Water and Urban II Country Department AFCC2 Africa Region (Exchange Rate Effective December 31, 2008) Currency Unit = CFA Franc CFA Franc 1.00 = US$0.0021853 US$1.00 = CFA Franc 457.61 FISCAL YEAR January 1 ­ December 31 ABBREVIATIONS AND ACRONYMS ACTED Agency for Technical Cooperation and Development DFA Development Financing Agreement CFAF CFA Franc GDP Gross Domestic Product GNP Gross National Product HIPC Highly Indebted Poor Countries ICR Implementation Completion and Results Report IDA International Development Association IMF International Monetary Fund I-PRSP interim PRSP ISR Implementation Status and Results Report M&E monitoring and evaluation MTR mid-term review n.a. not applicable NGO nongovernmental organization OP Operational Policy OPCS Operational Policy and Country Services PDO Project Development Objective PCIU Project Coordination and Implementation Unit PRGF Poverty Reduction and Growth Facility PRSP Poverty Reduction Strategy Paper PURAC Projet d'Urgence de Relance et d'Appui aux Communautés ­ Emergency Recovery and Community Support Project PURICV Projet d'Urgence de Réhabilitation des Infrastructures et d'Amélioration du Cadre de Vie ­ Emergency Infrastructure Rehabilitation and Living Conditions Improvement Project QAG Quality Assurance Group QEA Quality at Entry Assessment TOR Terms of Reference TSS Transitional Support Strategy UNDP United Nations Development Programme Vice President: Obiageli Katryn Ezekwesili Country Director: Marie Francoise Marie-Nelly Sector Manager: Eustache Ouayoro Project Team Leader: Mahine Diop ICR Team Leader: Christian Eghoff Republic of Congo Emergency Recovery and Community Support Project CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design......................................................1 2. Key Factors Affecting Implementation and Outcomes.....................................................3 3. Assessment of Outcomes...................................................................................................8 4. Assessment of Risk to Development Outcome ...............................................................12 5. Assessment of Bank and Borrower Performance............................................................13 6. Lessons Learned ..............................................................................................................14 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .................15 Annex 1. Project Costs and Financing.................................................................................16 Annex 2. Outputs by Component ........................................................................................17 Annex 3. Economic and Financial Analysis........................................................................21 Annex 4. Bank Lending and Implementation Support/Supervision Processes ...................22 Annex 5. Beneficiary Survey Results..................................................................................25 Annex 6. Stakeholder Workshop Report and Results .........................................................26 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR............................27 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders..............................36 Annex 9. List of Supporting Documents.............................................................................43 Annex 10 (Supplemental Annex). Performance Indicators from the Technical Annex......44 MAP A. Basic Information Rep of Congo Emergency Recovery Country: Congo, Republic of Project Name: and Community Support Project IDA-37980,IDA- Project ID: P081924 L/C/TF Number(s): H0530,TF-52882 ICR Date: 06/27/2009 ICR Type: Core ICR REPUBLIC OF Lending Instrument: ERL Borrower: CONGO Original Total XDR 29.8M Disbursed Amount: XDR 27.6M Commitment: Environmental Category: B Implementing Agencies: DRC MINISTRY OF FINANCE UCEP UNDP ACTED Cofinanciers and Other External Partners: B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 02/15/2003 Effectiveness: 09/16/2003 Appraisal: 05/05/2003 Restructuring(s): 12/11/2007 Approval: 06/24/2003 Mid-term Review: 03/01/2006 11/13/2006 Closing: 12/31/2007 12/31/2008 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Moderate Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Unsatisfactory Government: Moderately Satisfactory Quality of Supervision: Moderately Satisfactory Implementing Moderately Satisfactory i Agency/Agencies: Overall Bank Overall Borrower Performance: Moderately Satisfactory Performance: Moderately Satisfactory C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Performance Indicators (if any) Rating Potential Problem Project Yes Quality at Entry Moderately at any time (Yes/No): (QEA): Unsatisfactory 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) General agriculture, fishing and forestry sector 33 General education sector 30 10 General public administration sector 44 General transportation sector 8 General water, sanitation and flood protection sector 40 Health 30 5 Theme Code (as % of total Bank financing) Conflict prevention and post-conflict reconstruction 100 25 Debt management and fiscal sustainability 20 Decentralization 15 Other rural development 15 Participation and civic engagement 25 E. Bank Staff Positions At ICR At Approval Vice President: Obiageli Katryn Ezekwesili Callisto E. Madavo Country Director: Eustacius N. Betubiza Emmanuel Mbi Sector Manager: Eustache Ouayoro Cadman Atta Mills Project Team Leader: Mahine Diop Xavier Devictor ICR Team Leader: Christian Vang Eghoff ICR Primary Author: Christian Vang Eghoff ii F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) To assist the Borrower in its efforts to accelerate its economic recovery so as to improve living conditions for the Borrower#s population in small municipalities and rural communities across the Borrower#s territory. This statement of the PDO differs in substance from the statement of the PDO in the Technical Annex, which was: #To assist the recovery of communities living in smaller municipalities and rural areas#, as the latter does not specifically include the broader aspect of economic recovery. The phrasing from the Development Financing Agreement is maintained for the purposes of this ICR for two reasons: First, the DFA is the legally binding agreement between the Bank and the Borrower. Second, the DFA version better encompasses the outcome of the capacity enhancement and balance of payment support financed by the project. Revised Project Development Objectives (as approved by original approving authority) PDO was not revised. (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 : Percentage of activities undertaken to rehabilitate community infrastructure under Component A of the Project carried out with sustainable results. Value No baseline (no quantitative or Component A subprojects 80% 78% Qualitative) were carried out before the project) Date achieved 06/24/2003 12/31/2007 12/31/2008 Comments Target achieved with a 2 percent shortfall. (incl. % A total of 107 subprojects were implemented out of 115 subprojects approved achievement) for a completion rate of 93 percent. This is a slight correction to the indicator value (91 percent) reported in the last ISR. Indicator 2 : Number of departments and municipalities in which community subprojects have been carried out under Component B of the Project. Value 0 (no Component B quantitative or subprojects were carried 8 departments and 10 departments and Qualitative) out before the project) 3 municipalities 3 municipalities Date achieved 06/24/2003 12/31/2007 12/31/2008 Comments 125% achievement for departments and 100% achievement for municipalities. (incl. % The project succeeded in implementing community subprojects in all 10 achievement) departments, three of six municipalities, and all 90 Districts. The three major municipalities did not benefit. Indicator 3 : Percentage of community subprojects carried out under Component B of the Project rated by the Borrower as having satisfactorily achieved their stated iii objectives. Value 0 (No Component B quantitative or subprojects were carried 80% 75% Qualitative) out before the project) Date achieved 06/24/2003 12/31/2007 12/31/2008 Comments 5% points below target value or 94% achievement (75%/80%). The number (incl. % reported in the last ISR (90%) refers quantitatively to completed subprojects achievement) (190) compared to approved subprojects (212) and does not fully cover qualitative aspect of objectives. Economic management benchmarks related to: (a) macroeconomic framework; Indicator 4 : (b) PRSP; (c) increase in the amount of fiscal revenues collected in departments and in municipalities, excl. Brazzaville and PN ((1) A (1) Framework in macroeconomic place, IMF PRGF; framework (2) I-PRSP adopted (1) Macroeconomic deemed in September 2004, framework not deemed satisfactory by the full PRSP adopted Value satisfactory; Association is in in April 2008; quantitative or (2) No PRSP; place; (3) Collected Qualitative) (3) 0% (no increase noted (2) PRSP adopted; municipal revenues before the project). (3) Collected increased by 31% annual fiscal between 2003 and revenues increase 2006. No data is by 20%. available for departments. Date achieved 06/24/2003 12/31/2007 12/31/2008 Comments Three sub-indicators fully achieved except for revenue generation in (incl. % departments, for which no information is available. PRGF is in place since achievement) December 2008, based on sound macroeconomic management. (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 : Generation of at least 10,000 person-months of employment. Value 0 (employment was only (quantitative generated by the project 10,000 18,000 or Qualitative) after effectiveness) Date achieved 06/24/2003 12/31/2007 12/31/2008 Comments (incl. % 180 percent achievement achievement) iv G. Ratings of Project Performance in ISRs Actual No. Date ISR Archived DO IP Disbursements (USD millions) 1 12/31/2003 Satisfactory Satisfactory 14.89 2 06/30/2004 Satisfactory Satisfactory 15.60 3 06/30/2005 Satisfactory Satisfactory 25.84 4 12/22/2005 Satisfactory Satisfactory 27.30 5 05/31/2006 Satisfactory Satisfactory 30.83 6 11/17/2006 Satisfactory Satisfactory 31.39 7 05/17/2007 Satisfactory Satisfactory 33.08 8 06/28/2007 Moderately Satisfactory Moderately Unsatisfactory 34.10 9 11/16/2007 Moderately Satisfactory Moderately Satisfactory 35.00 10 04/15/2008 Moderately Satisfactory Moderately Satisfactory 37.24 11 10/15/2008 Moderately Satisfactory Moderately Satisfactory 38.41 12 12/24/2008 Satisfactory Satisfactory 39.34 H. Restructuring (if any) ISR Ratings at Amount Restructuring Board Restructuring Disbursed at Reason for Restructuring & Date(s) Approved Restructuring PDO Change Key Changes Made DO IP in USD millions Extension of project closing 12/11/2007 N MS MS 35.00 date to ensure full implementation of Component C activities. v I. Disbursement Profile vi 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal At the time of project appraisal in 2003, Congo was in the process of consolidating peace after three rounds of violent conflicts between 1993 and 1999. At the height of the crisis, approximately 810,000 people (almost one third of the population) were displaced and the social fabric of the country was severely damaged. Reconciliation efforts were showing results. A new constitution was adopted in 2002 and peaceful presidential, legislative, and senatorial elections were held in 2002. Decentralization was launched with the creation of 10 departments and 6 municipalities and election of local governments. In March of 2003 a peace accord was initiated between the government and the last rebel group, creating hope that the conflict trap could be broken. Social and economic infrastructure had suffered from both fighting and prolonged lack of maintenance. The road network had broken down, isolating large parts of the population. Primary education attendance dropped from 90 percent in 1990 to 40 percent in 2000. It was estimated that 50 percent of agricultural tools and 75 percent of livestock had been lost. Local governments did not have revenues and management capacity commensurate with their new responsibilities, in particular for service delivery. Years of conflicts had crumbled the economy. GNP per capita declined from $1,300 in 1982 to $630 in 2000. Unemployment was estimated to be close to 50 percent and approximately 70 percent of the population was living below the poverty line. Life expectancy had declined from 52 years in the early 1990s to 48.6 years in 2002. Public external debt had accumulated and amounted to 196 percent of GDP in 2001 while domestic debt was about 30 percent of GDP in 2000. Debt service amounted to 68.1 percent of government revenues in 2002. The end of the war coincided with timid but real improvement in the economy. Annual economic growth reached 4.1 percent in 2002 and inflation was curbed to 3.4 percent. Reconstruction needs were huge but efforts to speed up delivery of services and provide peace dividends to the population were hampered by institutional weaknesses and lack of technical capacities in the civil service and the local private sector. Mismanagement of the country's abundant oil resources in the post-conflict context further held up recovery efforts. Government Response The government's recovery program was conceived in the context of the preparation of an interim Poverty Reduction Strategy Paper (I-PRSP). The ambitious program included reforms in areas of economic governance, public finance management, poverty reduction, transparency, financial sector reform, forestry, and normalizing relations with creditors. Implementation was encouraging, although vested interests remained solidly entrenched. The decentralization program was a remedy to the over-centralization of the past and aimed at improving service delivery at the local level and empowering communities. International Response The international community was re-engaging with Congo and shifting focus from humanitarian aid to development-oriented programs. The main donors were involved in a variety of infrastructure rehabilitation, community development, and capacity building programs. However, assistance focused on Brazzaville and Pointe Noire, the two most important urban centers. 1 World Bank Response The Bank had reengaged with Congo through the 2001-2003 Transitional Support Strategy (TSS). Two of the main elements of this strategy were a $37.5 million Post- Conflict Economic Rehabilitation Credit and a $7 million Transparency and Governance Capacity Building Project. The Bank's 2004-2005 TSS aimed at strengthening support to Congo by: (1) Supporting job creation through economic growth and diversification of the economy, (2) helping reposition the public sector and mitigating short- and medium- term risks to the social environment, and (3) assisting in increasing resources for peace and development. The Emergency Recovery and Community Support Project (Projet d'Urgence de Relance et d'Appui aux Communautés ­ PURAC) was an integral element of this strategy. It complemented the Bank-financed Emergency Infrastructure Rehabilitation and Living Conditions Improvement Project (Projet d'Urgence de Réhabilitation des Infrastructures et d'Amélioration du Cadre de Vie ­ PURICV), which focused on reconstruction in Brazzaville and rehabilitating major interurban transport infrastructure. 1.2 Original Project Development Objectives (PDO) and Key Indicators The PDO was stated in the Development Financing Agreement (DFA) as: "To assist the Borrower in its efforts to accelerate its economic recovery so as to improve living conditions for the Borrower's population in small municipalities and rural communities across the Borrower's territory."1 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification The PDO and key indicators were not revised. 1.4 Main Beneficiaries Large sections of the rural population and those living in smaller urban centers were the main project beneficiaries. They would get access to some of the most needed small- and medium-scale socio-economic infrastructure and services through a participatory and demand-driven approach. It was expected that financing of small-scale revenue- generating activities and use of labor-intensive construction methods would provide resources to the communities, develop competencies to support their developmental efforts, and create short term employment, all of which would contribute to consolidating peace. The country as a whole would benefit from: (1) Support to the decentralization process, which was expected to strengthen political inclusiveness and contribute to reconstructing the country's social fabric, (2) support to the broader reform program and its contribution to gradual economic stabilization, and (3) support to addressing the negative balance of payments. 1.5 Original Components (as approved) Component A: Financing of Priority Local Investments (Appraisal: $14 million. Actual: $14.02 million) This component aimed at relieving the economic and social hardship caused by the conflicts in areas that had received little external support over the preceding years. Activities under the component would facilitate the establishment of a participatory mechanism for communities to select investment priorities at the district and department 1See Datasheet for a discussion of differences between PDO statement in the Technical Annex and the DFA. 2 level, fostering local governance. The process included the allocation of financial resources to each department to finance subprojects, with investments not to exceed $200,000. A positive list of eligible investments was defined and included rehabilitation or construction of a broad array of social, economic, and environmental infrastructure. The component would be implemented by ACTED, an international NGO. Component B: Support to Community Organizations (Appraisal: $3 million. Actual: $2.29 million) The objective of this component was to support small-scale local initiatives (not to exceed $20,000) and strengthen social capital as a key element of a successful decentralization and empowerment process. The component would finance: (1) Activities selected and initiated by local NGOs and associations, with focus on revenue generating activities, and (2) programs to enhance technical and managerial capacity of these organizations. The implementing agency for this component was UNDP. Component C: Capacity Enhancement Support (Appraisal: $8 million. Actual: $10.40 million) This component aimed at complementing existing programs and addressing some of the issues associated with the decentralization process and economic reform. The project would particularly assist in improving economic management and transparency in the newly-created departments and municipalities and provide the government with technical assistance and institutional strengthening in support of its reform program on public service, forestry, and posts and telecommunications. Support was also dedicated to the preparation of the country's PRSP. The Project Coordination and Implementation Unit (PCIU) would implement this component and assure overall project coordination and reporting. Component D: Balance of Payments Support (Appraisal: $13 million. Actual: $14.02 million) The objective of Component D was to help the government put in place adequate mechanisms for the transfer of fiscal resources from the central government to the local governments and for monitoring their effective use. Activities under this component were to complement activities under Component C by providing funding to help finance critical imports needed for the effective delivery of basic social services by local governments. The component was to be implemented by the Ministry of Finance. 1.6 Revised Components The components were not revised. 1.7 Other significant changes The project closing date was extended from December 31, 2007 to December 31, 2008 to ensure full implementation of all Component C activities. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry Preparation The project was prepared in response to calls by the government and other stakeholders for the Bank to help expand the reach of reconstruction activities to areas outside Brazzaville and Pointe Noire, creating a strong rationale for the Bank's intervention. Preparation drew on the economic dialogue supported by the Post-Conflict Economic Rehabilitation Credit, the Transparency and Governance Capacity Building Project and the IMF Staff Monitored Program. It took less than six months to prepare the operation 3 within the framework of the TSS. The Borrower was very active and committed during project preparation, agreeing to use delegated contract management to implement project components. This approach was innovative at the time as it had only recently been introduced through the Bank-financed PURICV. Design The PDO was relevant, largely targeting project benefits at the most needy sections of the population, which were excluded from existing programs. Earlier lulls in the conflicts had been followed by renewed fighting. By ensuring inclusiveness of the recovery program and addressing the widespread poverty, unemployment, physical isolation, and lack of access to infrastructure and basic services, the project aimed at minimizing the prospects of renewed conflicts. Over-centralization of the state-managed economy and its poor management was among the deep-rooted causes of the repeated conflicts, and these were among the issues that the project was to address. While complex to implement because of the post-conflict environment, the various components provided a logic set of complementary interventions. Components A and B supported needed investments, revenue generation, and strengthening of social capital. Components C and D aimed at supporting economic reforms and the decentralization process to accompany and stabilize the recovery effort. The project was designed to flexibly respond to the evolving needs of the post-conflict context. Component A was to be implemented in two phases, with the first batch of subprojects to be approved at project outset and the second batch to be approved 18 months after effectiveness, based on lessons learned from the first phase. Component B was designed to be demand-driven, targeting the most urgent needs of beneficiaries at the local level. For Component C, needs were to be identified by the government throughout the implementation period based on a list of priority areas, assuring that capacity constraints were addressed as they emerged. Beneficiary participation in selection of investment priorities and implementation of activities was a strong design factor. For Component A, priorities would be set by the communities at the district level and validated by the newly elected departmental assemblies, supporting their empowerment. For Component B, an outreach program would facilitate submission of subproject proposals by local NGOs and associations and provide training to support their implementation. Component D complemented other project activities. Given the economic situation of the country, the balance of payments support was a relevant response. The positive list of imports (see Annex 2: Outputs by Component) included items essential to support the recovery of the economy. The fast disbursing component would make additional foreign exchange available, permitting the continuation of key recovery programs, otherwise likely to be affected by fiscal constraints. At appraisal, counterpart funding generated from private sector imports was expected to be used to support the transfer of resources to local governments, in line with the component objective of assisting the government in setting up adequate mechanisms for the transfer of fiscal resources to local governments and for monitoring their effective use. However, the component was not designed to include concrete actions to support the setting in place of such mechanism. The background analysis highlighted a number of risks to be addressed in the project, but there were some weaknesses in the analysis and implementation arrangements: - Assessment of the implementation capacity of ACTED and UNDP (Components A and B) was not comprehensive enough considering the geographic spread of the activities. Moreover, while ACTED's multiple roles in mobilizing communities and being at the same time executing agency for Component A and 4 supervisor of the same activities contributed to speeding up implementation in a low capacity environment, this arrangement also created a potential situation of conflict of interest. - The risk to sustainability of Component B subprojects due to weak capacity of local NGOs and associations was supposed to be mitigated through managerial and technical capacity building activities and inclusion of micro-project eligibility criteria related to complexity and commitment to operation and maintenance. - Difficulties on the path to reform and a compromised administrative capacity for implementation were identified as risks. It was however unrealistic to assume that the decentralization process could take place in such a short period of time considering the complexity of undertaking decentralization reforms. It was also unrealistic to implement a functional revenue collection system at the local level, capable of assuring a revenue stream commensurate with the responsibilities of the new local government entities in the post-conflict context. Quality at Entry The project had a relevant PDO, built on a sound assessment of needs, and components were designed to flexibly address the most urgent needs in a participatory manner. However, there were significant shortcomings in the analysis of implementation capacity, risk assessment, and design of Component D. In particular, Component D was designed as a balance of payment support and thus did not include activities that could deliver the results outlined in the Technical Annex, which included mechanisms for fiscal transfers to departments and communities to be in place and financed by public resources after project completion. These issues were also picked up in the Quality at Entry Assessment by QAG, which assessed quality at entry as moderately unsatisfactory. This rating is confirmed by this ICR. 2.2 Implementation Apart from the balance of payments component, implementation of the project initially turned out to be challenging. Component D was disbursed in one tranche in November 2003. Implementation of Components A and B was hampered by the geographic spread of subprojects and the lack of passable roads, combined with minor flaws in the implementation setup. This resulted in: (1) Difficulties in providing information regarding the project to the population and raising awareness on the project's participatory approach, which was counterintuitive in a country where top-down approaches had been the norm. Launching activities was further complicated by low beneficiary capacity to develop realistic project proposals. (2) High travel cost and long transport time for UNDP and ACTED staff, all based in Brazzaville. The geographic spread of activities complicated supervision activities and as a result little support was provided to the local technical departments in preparing their investments under Component A. Partial decentralization of ACTED supervision activities in 2006 improved the situation but did not fully resolve the problem. (3) Complicated supply to sites and difficulty in supervising the works were compounded by low technical and financial capacity of construction companies. (4) The importance placed on the speed of project implementation and the lack of experience of ACTED in some types of public works (roads and civil engineering works) resulted in some technical studies having to be redone to include works, which were not initially included. These difficulties were eventually overcome due to continued efforts by the implementing agencies. A trust fund also supported the implementation of Component B 5 activities.2 The PCIU and the government made efforts to finance additional works and equipment for some of the facilities to make them fully functional (e.g. mosquito nets in health facilities, water points in schools). In spite of delays, activities under Component B were finalized by 2006 and works under Component A were finalized by 2007, as planned. While the results are largely sustainable, the time left until project closure could have been used to strengthen the capacities of local NGOs and associations and further enhance project outcomes, which was not the case. The mid-term review (MTR) in November 2006 was used to highlight delays in implementing reforms, and project ratings were subsequently downgraded. Finalization of requests for proposals for studies under Component C was delayed due to the focus on emergency measures, low capacity, and high turnover in government (e.g. four successive ministers in charge of posts and telecommunications had to oversee the reform program). This resulted in difficulties by some beneficiary administrations to draft satisfactory terms of reference. Comments on draft studies were provided with long delays from beneficiaries, further prolonging the total time to finalize studies. The PCIU was actively pursuing the matter, but was unable to speed up the process to any significant extent, in part due to the lack of commitment and limited beneficiary capacity. The MTR was also used to address some of the shortcomings in the M&E framework (see discussion in Section 2.3 below); with an effort being made to collect baseline data and assure that the PCIU had the necessary resources to implement the M&E framework. A technical audit was carried out in June 2007. The quality of works was judged globally satisfactory and it was recommended that recruitment of staff in schools and health centers financed by the project be coordinated at central level. This recommendation was not implemented since no inter-ministerial coordination was set in place. However, local communities have succeeded in recruiting almost all needed personnel. The project extension was requested by the Borrower to ensure the implementation of activities under Component C. As a result, many studies have been finalized and the resulting action plans are available for implementation by the respective ministries. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization Design The M&E framework had several design flaws, specified below. Most importantly, the project lacked a defined methodology to implement the M&E framework, which would work in the post-conflict environment. Furthermore, several indicators were vaguely defined and related to process rather than results (see Annex 10 of the ICR for Technical Annex Indicators). For Component C, only one out of seven indicators was defined in quantifiable and measurable terms. However, the subset of indicators in the DFA were in fact well suited to measure achievement of the PDO and capture the demand-driven aspect of Components A and B, while Component C indicators of the DFA captured the economic recovery process. It could fairly be assumed that beneficiaries would select the most needed investments for Components A and B based on the participatory approach used by the project. The Component A indicator appropriately focused on sustainability of investments, as this was the major concern beyond relevance. One Component B indicator focused on the 2 The trust fund tied to the project (JSDF; TF-52882; $708,400 original amount; $606,789 disbursed) financed activities in support of Component B: strengthening the capacity of community-based organizations to effectively address the needs of the vulnerable groups they serve. The TF was closed on April 30, 2007. A separate Completion Report is available for the TF, dated June 2007, and the Grant Reporting and Monitoring completion activity was approved by August 31, 2007. 6 geographic coverage of the project, a major objective as the project aimed to reach a large section of the population. The other Component B indicator measured achievement of component outcome against the beneficiaries' own definition of subproject objectives and this was highly relevant to the demand-driven nature of the project. The indicators for Component C were relevant to capture the broad coverage of activities under the component. Except for Component C, these indicators fulfill the SMART indicator criteria (specific, measurable, attributable, realistic, and time-bound). Improvements in the quality of the macro-economic framework (indicator for Component C) could not be fully attributed to the limited interventions of the PURAC. One of the weaknesses of the design of the M&E framework was that there was no defined methodology to measure sustainability, progress against the stated objectives of sub-projects, and quality of the macroeconomic framework for Component A, B, and C indicators respectively. Moreover, there was a disconnect between the Component D balance of payments support (financing investments) and its stated objective of putting in place mechanisms for the transfer of resources to local governments and the indicators in the Technical Annex related to budget management in departments. This component exclusively financed imports and yet was to be evaluated against progress in establishing sound procedures for budget preparation and auditing, according to the Technical Annex. Implementation The lack of M&E methodology posed problems. To address the shortcomings, a consultant was initially hired by the PCIU to carry out an M&E study, which in the end proved too complex to implement due to the large number of indicators combined with the lack of reliable data in Congo. Faced with this issue, the MTR suggested a more pragmatic approach with simple questionnaires based on a limited number of indicators, which could be administered to all project sites in spite of the geographic dispersion. This way, the before and after project situation was established and project performance could be measured. Utilization M&E data was only collected and evaluated systematically from the time of the MTR, when most activities had already been prepared or implemented. Therefore, most of the outcome-related studies carried out have solely served the purpose of providing data for the ICR and have not been used to inform decision-making and resource allocation. 2.4 Safeguard and Fiduciary Compliance Safeguard compliance. The project was rated Category B because it did not entail major adverse environmental impacts. In accordance with emergency lending policies (OP 8.50 - Emergency Recovery Assistance), the safeguard documentation was to be prepared during implementation, and no later than six months after credit effectiveness. An Environmental and Social Impact Assessment was carried out and project activities have not resulted in any resettlement or loss of economic activity. Fiduciary compliance. The project complied with Bank fiduciary safeguards. A case of false certification of delivery of goods was revealed under Component A and the government has reimbursed the corresponding amount ($86,000). Regular financial management and post procurement reviews did not reveal any other irregularities. 2.5 Post-completion Operation/Next Phase Post-completion operation of project outputs is largely assured, although some concerns related to maintenance funds and planning capacity remain, and some studies financed under Component C remain unutilized. 7 Schools and health facilities financed by the project have most of the personnel they need to operate and 85 maintenance staff are involved in the regular maintenance of the 15 markets financed under Component A. Maintenance of roads is complicated by the unclear division of responsibility between the Road Fund and the decentralized entities. Activities financed under Component B should in principle be self-sustaining, given that 88 percent of investments went into productive activities. However, as discussed in the Datasheet, some difficulties were encountered to sustain a small number of activities. A follow-up operation is under preparation under the current Country Partnership Strategy and this project will address the capacity of local governments to finance and manage the delivery of services and look at how the participatory approach developed under the project can be streamlined into the decentralization process. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation PURAC development objectives remain relevant to the current development priorities of Congo. Although GDP at constant prices almost doubled from 2002 to 2008, poverty in peri-urban and rural areas remains high at 67.4 and 64.8 percent respectively and the project objective of improving living conditions continues to be relevant. Strengthened fiscal discipline and debt management as supported by the project has played a key role in Congo's recovery. At the policy level, the current 2008 PRSP has five pillars, four of which were supported by the PURAC: (1) Consolidation of peace, security and good governance. This was promoted in the project via the reintegration of previously isolated areas and the support to decentralization and broad economic reforms. (2) Advancement of growth and macroeconomic stability. This has been supported by the PURAC through the Component C capacity enhancement support and the Component B revenue-generating activities. (3) Improved access to basic social services was supported through the social and economic infrastructure constructed under Component A. (4) Improvement of the social environment and integration of vulnerable groups was supported through the participatory approach to selecting investments, prioritizing revenue-generation activities for women, and the overall efforts to rebuild the social fabric of the country. Only pillar (5) fighting HIV/AIDS was not supported by the project. The design of the project included support to the household survey, which informed the PRSP and was a key element in the process. The participatory approach was another strong design factor, as this approach remains relevant and is being generalized by the government through other programs. There were some shortcomings in the design of Component A and B activities in terms of mitigating lack of capacity of local governments and community organizations to assure sustainability of investments and the M&E implementation arrangements to follow up on this issue, just as the lack of clarity on Component D objectives counts against the project. The gradual selection of Component C capacity building activities during implementation assured the project's continued relevance to support the country's economic recovery and growth. This component was able to support elements critical to Congo reaching its HIPC decision point in March 2006. Throughout the project lifetime, the Pool region, the area of the last active rebel group, has received relatively more support, thus contributing to promoting peace in that area and therefore in the country. 3.2 Achievement of Project Development Objectives The PURAC essentially achieved the two elements of its objective: improving living conditions for the targeted population and accelerating economic recovery. In spite of an 8 especially difficult implementation environment, the project was able to produce results that impacted 40 percent of the population in some way (those living outside the main urban centers), and to jump-start economic activities to the benefit of the population. This was achieved through: (1) reinforcing the decentralization process and stimulating a participatory development process, (2) providing access to services and infrastructure, (3) creating temporary jobs, (4) revitalizing under-developed economic activities, (5) instilling a culture of transparency and respect of contractual obligations, and (6) consolidating peace. The achievements are further underscored by the fact that the project was able to contribute substantially to four of the five pillars of the current PRSP. The objectives of the project were essentially achieved, with only minor shortcomings, as measured through the project outcome indicators and detailed in the Datasheet. The indicator for Component A was met and the two indicators related to Component B were met with few shortcomings on the number of subprojects having achieved their stated objectives. The indicator for Component C was met, except for the revenue generated in departments. The contribution of Component D to the achievement of the PDO has been estimated as satisfactory by evaluating its contribution to the balance of payments and the overall fiscal situation. Improved Living Conditions The main indicators used to measure progress in improved living conditions have been met with minor shortcomings. The percentage of activities undertaken to rehabilitate community infrastructure under Component A of the project carried out with sustainable results largely achieved the target of 80 percent. Component B covered ten departments against the eight foreseen at appraisal, but the 75 percent of Component B subprojects having reached their stated objectives presents a slight shortfall of the target of 80 percent. Component A subprojects were mainly in education (40 percent), rural roads (26 percent), and health (19 percent). Other projects covered markets and public lighting. -Education. Investments in school infrastructure contributed to improving schooling conditions for 39,000 primary school pupils, corresponding to 12 percent of all pupils outside of Brazzaville and Pointe Noire. Enrollment increased by 42 percent in the rehabilitated schools, while the number of teachers increased by 17 percent. While there is no data on the resulting quality of education in the targeted schools (which will need more time to measure than the duration of this project), 86 percent of respondents in a beneficiary satisfaction survey estimated that the project activities had a positive impact on school outcomes. -Health. The PURAC reached 15 percent of integrated health centers outside of Brazzaville and Pointe Noire, increasing the number of assisted births by 36 percent and the total number of hospital beds by 51 percent. -Roads. The rehabilitation of 17 rural roads over a total length of 563 kilometers has improved access for 189 previously isolated villages with a total population of 91,000. -Markets. The construction of 15 markets and market extensions in six departments provided an additional 2,430 covered points of sale. -Public lighting. The electrification of four towns benefits 74,601 people. Component B benefited 190 community organizations in all 90 districts and 10 departments of the country, against a target of 8 departments. Productive investments made up 88 percent of total financing. The activities initiated under the component created a total of 4,839 permanent jobs (67 percent for women) and training was provided to 1,325 persons in general management competence and specific investment-related 9 technical skills. More than 75 percent of beneficiaries have judged the impact of the component as positive. Economic Recovery The 18,000 person-months of work generated by the project (against an appraisal target of 10,000 months) had an immediate effect on economic recovery at the local level. Component C studies and technical assistance have contributed to strengthening and sustaining the reform agenda in all key areas of the economy: oil, forests, posts and telecommunications, and financial governance. The PURAC covered five socio- economic sectors, eight ministries, twelve national administrations, and five public companies. The 10 legal and regulatory documents related to the decentralization process, prepared with the assistance of the PURAC, fill the regulatory gap in relation to fiscal and budget aspects for local governments. The texts have not yet been promulgated. An evaluation of public finance management identified the capacity building needs and was the basis for development of a training and capacity building program for the Local Government Administration. The training given to 488 local government officials and the strengthening of the regulatory framework contributed to improved budget management processes and raising municipal revenues by 31 percent against a target of 20 percent. The selectivity and focus of studies financed by the PURAC have helped reshape the regulatory environment and improve the conditions for private sector participation in the economy as follows: (1) The study on certification of forestry revenue laid the foundations for transferring revenue collection from the Ministry of Forest Economy to the Treasury, allowing for a better traceability and management of forestry revenues. (2) The reform of the legal and regulatory framework in the posts and telecommunications sector was made possible by the project. The package of legislation is in the final stage of adoption by parliament, fulfilling one of the HIPC triggers. (3) Taxes on telecommunications activities were reviewed, and an integral plan for the development of the postal sector was prepared. (4) A number of strategic reform options have been delineated for the Société des Postes du Congo, which the government has not yet implemented. (5) Subsequent to the sector-wide audit, the insurance sector has been reorganized and the regulatory framework updated to approach conformity with the Inter- African Conference on Insurance Markets. (6) The internal debt has been reduced significantly, enhancing the private sector's confidence in the government to adhere to principles of transparent management of public resources. The plan to clear arrears financed by the PURAC and support to implementing it has resulted in reduction of outstanding debt from $280 million in 2004 to $57 million in 2008, with $92 million repaid and the rest cancelled after a transparent settlement process. The above results have contributed to Congo reaching its HIPC decision point in 2006, significantly reducing external debt. A contributing factor to this result was the government's use of the project to implement, with its own funds, three activities related to HIPC triggers: (1) Technical and financial audit of investments and transfers on the national budget for 2006. (2) Diagnostic study on a marketing strategy for crude oil by the Société Nationale de Pétrole du Congo. (3) Audit of the procedures for attribution of an oil concession (Marine XI). After reaching the HIPC decision point, public external debt has been reduced to 169 percent of public revenues at the end of 2007, compared to 661 percent in 2004. At the time of this ICR, it was projected to fall further to 94.5 percent at the end of 2008. Component D had an immediate impact on improving the overall fiscal situation. The current account balance improved by $19.8 million (from -11.6 million to 8.2 million) in 10 the fourth quarter of 2003, when the balance of payment support was disbursed. The balance of payment support further allowed Congo to cope with financing needs over the 2004-2006 period, as the support contributed to the government's efforts to regain credibility with donors and negotiate and adhere to debt clearance plans with each donor. Overall Development Effort The household survey co-financed by the PURAC, UNDP, and the government provided the first comprehensive understanding of the level and determinants of poverty in the country, and was essential for the preparation of the PRSP. The household survey continues to be the point of reference for the current system of monitoring and evaluation of poverty in Congo. The project heralded a new participatory approach to programming and investment, which gave credibility to the embryonic decentralization process and resulted in the population regaining some measure of confidence in the state. The participation of beneficiaries was also highlighted as a noteworthy achievement in the government's comments on the draft ICR. Needs were identified at the local level through a pioneering participatory approach and investment priorities decided in district assembly meetings open to the civil society. Proposals were in turn approved in special sessions of the departmental councils with the participation of an average of 89 percent of elected representatives. These results could have been strengthened further if the project had included activities to deliver on the stated objective of putting in place mechanisms for the transfer of fiscal resources to local governments. 3.3 Efficiency The project was prepared under OP 8.50 - Emergency Recovery Assistance and no economic evaluation was carried out at appraisal. A comprehensive economic analysis is excluded by the small size and diverse nature of subprojects combined with the many unquantifiable benefits from these activities and the lack of complete data and comparative unit costs from similar locations. As an alternative to an economic analysis, the ICR quantifies efficiency in terms of: (1) time taken to implement activities and (2) geographic coverage. Time-efficiency. Components D, A, and B were completed on time in 2003, 2006, and 2007 respectively, showing highly efficient project implementation from a time perspective. This was especially important given the project's emergency nature. In contrast, a few Component C activities were not fully implemented in spite of the one year project extension requested by the government, resulting in time-efficiency being evaluated as satisfactory overall. Coverage-efficiency. With an investment of only $41 million, the project succeeded in implementing activities in all 90 districts, exceeding appraisal expectations. The project impacted the lives of the population living outside of the main urban centers and created renewed visibility of the state. The parts of the population not directly benefiting from project-financed activities still gained from the project's contribution to accelerating economic recovery and preventing eruptions of new violence. Coverage-efficiency is rated satisfactory. 3.4 Justification of Overall Outcome Rating Rating: Satisfactory The satisfactory rating is based on: (1) Achievement of three out of four outcome indicators with minor shortcomings for Components B and C. This in itself warrants a satisfactory rating, also supported by the evidence of the many benefits accruing to the population in general and the ability of the project to quickly deliver results at a critical 11 time. (2) The shortcomings in Component D design did not prevent the component from delivering relevant results. (3) The continued relevance of the project substantiates a satisfactory rating. (4) The project efficiency is rated as satisfactory, also strengthening the argument for a satisfactory rating. (5) The shortcomings in project design and M&E framework count against the project, but some corrective measures were taken during implementation and the impact of these shortcomings has been limited in comparison with the many demonstrated achievements of the project. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development During the implementation period, the PURAC was the only government program of significance covering the whole country in the education and health sectors and in community support. It has taken long for peace to stabilize following the signing of the 2003 peace accord between the government and the last active rebel group in the Pool region, and disarmament of this group only began in February 2009. The Pool region received comparatively more financing under Component A, and although the progress towards peace cannot be attributed solely to the PURAC, the project was certainly a contributing factor. (b) Institutional Change/Strengthening (particularly with reference to impacts on longer- term capacity and institutional development) Non-transparent procurement was a major problem in Congo following years of conflict and sole sourcing was the only method used. Building on the positive experience of the Bank-financed PURICV, contracts were enforced and penalties amounting to $188,000 were applied to contractors due to delays in delivering works on some of the roads. The introduction of open procurement has resulted in improved transparency of the procurement process and capacity of local enterprises to bid on contracts and is slowly being generalized in Congo with the support of the donor community, which has since supported the preparation and adoption of a new modern procurement code. (c) Other Unintended Outcomes and Impacts (positive or negative) There were no other unintended outcomes or impacts. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops The beneficiary survey showed that more than 75 percent of respondents are satisfied with project results, which has contributed substantially to improving the quality of life. Other findings of the beneficiary survey have been mentioned above. 4. Assessment of Risk to Development Outcome Rating: Moderate The evidence shows that investments under Component A are largely sustainable with the exception of roads, which accounted for only 8 percent of total project investments. However, discussions are ongoing on the establishment of a Road Fund to cover maintenance costs. The majority of Component B activities continue to operate several years after support to the community organizations has ended, although some difficulties in sustaining activities have been observed. The activities under Component C are being consolidated or continued under other Bank-financed operations. Risk to Component D is not rated but current risks to macroeconomic stability are minimized by a prudent fiscal policy in response to a projected decline in oil revenue.3 The above analysis supports a risk rating of moderate. 3See: "Republic of Congo Economic Report. Spring 2009. World Bank, AFTP3. 12 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry (performance through lending phase) Rating: Moderately Unsatisfactory The Bank responded with flexibility to government requests for a large-scale and broad- ranging reconstruction support. The PURAC was an integral part of this effort, as the Bank was strongly involved in discussion with all stakeholders (government, civil society, political parties, etc.) during the preparation of the 2003 TSS. Appraisal was essentially focused on strategic relevance and setting in place the mechanisms to deliver solutions to the identified problems under Components A, B, and C. Component D was relevant, as also highlighted by the QAE. There was a strong background analysis and poverty focus, building on the Bank's experience and reengagement portfolio in Congo. The PURAC was prepared in six months as an emergency operation and so could not be expected to fully address sustainability issues. However, the implementation design had significant flaws in terms of analysis of implementation capacity, assessment of risks, developing an operational M&E framework and methodology to guide project implementation, and defining mechanisms for transfer of resources to local governments in the longer term, as otherwise stated in the Technical Annex. The Bank did not fulfill its role in supporting the Borrower in these aspects. (b) Quality of Supervision (including of fiduciary and safeguards policies) Rating: Moderately Satisfactory The Bank had regular supervision missions and supported the PCIU in the preparation of TORs. Fiduciary issues were dealt with appropriately. Up until the MTR, there was no evidence in the project files that the Bank was following up on development impact and achievement of project objectives, as no M&E data was available from the PCIU. It is therefore difficult to see how the initial ratings for DO were evaluated for the ISRs. Following the MTR, the supervision efforts became more focused. The Bank increased its dialogue with the PCIU and followed up on the shortcomings in the M&E framework and implementation of the reforms supported by the capacity building activities. This was central to addressing some of the shortcomings in project design, specifically concerning the M&E framework, along with the beneficiary assessment which allowed a number of lessons to be drawn from the project. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory Combining the two ratings, the overall rating for Bank performance is between moderately satisfactory and moderately unsatisfactory. In this case, according to the ICR guidelines (OPCS, August 2006, last updated on April 16, 2007), the outcome rating in the satisfactory range is the deciding factor in rating the overall Bank performance, also taking into account enhanced supervision since MTR, including support to the client to address most of the design flaws. 5.2 Borrower Performance (a) Government Performance Rating: Moderately Satisfactory The government was actively involved in project preparation and quickly undertook the necessary measures to set in place the project unit. The government was also quick to mobilize additional funds to finance auxiliary works and equipment ($864,000 worth of 13 mosquito nets, water posts in schools, and various other equipment) for Component A subprojects and it reimbursed the ineligible expenditures. There has been slow but steady progress on the reforms coming out of the studies, and the government made good use of the project by implementing activities related to HIPC triggers with its own funds. On the negative side, the government was not able to adopt the decentralization reforms before the end of the project, even though this was the reason for the requested project extension. (b) Implementing Agency or Agencies Performance Rating: Moderately Satisfactory Implementing Performance Agency Component A Moderately satisfactory. ACTED was active in disseminating the participatory ACTED approach but could have had more presence on the ground which would have facilitated follow-up and resolution of technical issues. Component B Moderately satisfactory. UNDP was able to support the community organizations UNDP in the selection of activities, but did not have the required presence in the field to follow up and fully assure sustainability of project activities. This is partly explained by the large geographic spread of activities. Component C Satisfactory. The PCIU assisted the beneficiary organizations in the preparation (and overall of TORs for studies and leading the work of the various steering committees, but coordination) could not be responsible for the delays in adoption of study recommendations. PCIU The financial audits and quarterly project reports were produced and transmitted on time. The PCIU also supported Component A and B implementing agencies in terms of tax exemption for suppliers and contractors, but lacked the personnel to fully follow up on the delegated contract management arrangements for ACTED and UNDP. The efficiency and relevance of the PCIU is underscored by its continued operation, managing HIPC funds for the government. Component D Moderately unsatisfactory. The ministry was able to implement Component D Ministry of and disburse the balance of payment support. However, the ministry has not Finance provided any evidence of the effects of the funds directly related to the project objective, partly because the M&E framework was not fully functional. The ministry has not made progress on implementing decentralization reforms. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Satisfactory The overall rating for Borrower performance is derived by combining the two moderately satisfactory ratings for government and implementing agencies. 6. Lessons Learned A weak project environment calls for a powerful champion to assure progress on implementing reforms. A project implemented in a weak institutional environment needs a powerful champion in the administrative and political apparatus if far reaching reforms addressing multi-sectoral needs have to be implemented. There was a window of opportunity at the end of the conflicts for launching some critical reforms, and the project successfully laid the groundwork for a number of improvements to the institutional environment. However, the PCIU did not have the means to facilitate the dialogue and complete the reform process. An inter-ministerial committee regrouping all the involved ministries, and presided by e.g. the Prime Minister, could have advanced adoption of the reforms and their implementation. The delays in implementing decentralization reforms also show that reforms should be implemented incrementally and in well defined phases. 14 The post-conflict environment can be used to create conditions for inclusiveness and build a solid base for private sector participation in the reconstruction efforts and for launching reforms. The PURAC worked on two levels: (1) Delivering benefits directly to the population and creating confidence in the ability of the state to deliver security and improve living conditions. (2) Laying the groundwork for increased private sector participation in reconstruction efforts and in the economy more generally while strengthening the macro-economic framework. These two components together provided the base for a steady rebuilding of the social fabric of the country. Gradual mainstreaming of project activities into initially weak sector ministries is necessary to assure sustainability. Local governments and community organizations were the final recipients of Components A and B outputs and the direct interlocutors of the implementing agencies, while the sector ministries lacked capacity, especially at the outset of the project, and continued to be regarded as simple structures of technical support during implementation. Ensuring sustainability of activities requires gradual mainstreaming of project activities into sector ministries, as they will have to play a more prominent role in implementing and operating these services in the future. This approach is even more crucial in a post-conflict environment when all the state institutions are short of capacity and resources and when the rebuilding of the credibility of these institutions is imperative. M&E is often overlooked in emergency projects. The project was confronted with the difficult exercise of developing an M&E framework to address sustainability and demand-based needs in a post-conflict environment. OP 8.50 ­ Emergency Recovery Assistance allowed the PURAC to prepare a coherent set of interventions in only six months, but with more focus on the physical reconstruction effort than on monitoring impact. Lack of baseline data is another difficulty that teams have to tackle when a country's statistical system is not operational. The use of surveys to capture the views of the population before, during and after the project is one way to overcome these difficulties. Following the MTR, most of the weaknesses in the M&E framework were corrected, but proactive restructuring of projects with inadequate M&E systems is another option that should be kept in mind. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies The draft ICR was translated into French and comments were received from ACTED, UNDP, and the government (see Annexes 7 and 8). ACTED's comments have been fully incorporated in the text. In its comments, UNDP agrees with the evaluation in the ICR. The only government's comment that warrants specific treatment is the mention of mismanagement of oil resources in the context section. The government finds this evaluation excessive and has pointed out that progress has been made in that regard. The ICR has maintained this position, since the situation described in the ICR was the one prevailing at the time of appraisal. (b) Cofinanciers There were no cofinanciers. (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society) The comments received from ACTED, the international NGO implementing Component A, have been included in sub-section (a) above. Conclusions from the beneficiary survey have been incorporated in the evaluation of project outcomes and do not warrant further elaboration. 15 Annex 1. Project Costs and Financing (a) Project Cost by Component (in US$ million equivalent) Appraisal Actual Estimate Percentage of Components (US$ (US$ Appraisal millions) millions) FINANCING OF PRIORITY LOCAL 14.00 14.02 100.16 INVESTMENTS SUPPORT TO COMMUNITY 3.00 2.29 76.25 ORGANIZATIONS CAPACITY ENHANCEMENT FOR CENTRAL AND LOCAL 8.00 10.40 130.01 GOVERNMENTS BALANCE OF PAYMENT SUPPORT 13.00 14.02 107.87 Total Baseline Cost 38.00 40.73 107.20 Physical Contingencies 0.50 0.00 0.00 Price Contingencies 0.50 0.00 0.00 Unallocated 2.50 0.00 0.00 Total Financing Required 41.00 40.73 99.35 (b) Financing Appraisal Actual Type of Estimate Percentage of Source of Funds (US$ Cofinancing (US$ Appraisal millions) millions) Borrower 0.00 0.00 0.00 IDA n.a. 28.00 26.71 95.40 IDA Grant for post- n.a. 13.00 14.02 107.86 conflict 16 Annex 2. Outputs by Component Component A: Financing of Priority Local Investments Cost: Appraisal: $13.00 million. Actual: $14.02 million. 34.4 percent of actual total project cost. Education · 77 classrooms constructed. · 92 classrooms rehabilitated. · 31 residences for school directors constructed. · 194 latrines constructed in schools. · 44 water points constructed in schools. · 484 classrooms equipped with furniture. · 14,138 tables with benches provided. Health · 12 integrated health centers constructed. · 9 health centers rehabilitated. · 1 hospital rehabilitated. · 13 residences constructed for doctors. · 109 latrines constructed in health centers. · 23 water points installed. · 800 beds provided. · 600 mosquito nets distributed. Rural roads · 17 rural roads rehabilitated (563 kilometers total), including treatment of critical points. · 94 crossings constructed (bridges, culverts). · 2 landing docks for river transport. Public lighting · 4 villages electrified with 23 kilometers of cable and 343 light posts. Markets · 15 markets constructed or extended, for a total of 2,430 market stalls. · 20 storage facilities constructed. · 60 latrines constructed in markets. Component B: Support to Community Organizations Cost: Appraisal: $3.00 million. Actual: $2.29 million. 5.6 percent of actual total project cost. Training for community organizations · 41 training sessions held. · 1,325 persons trained. 17 190 Micro-projects implemented in the following sectors: · Agriculture and market gardening: 69. · Animal and poultry farming: 52. · Fish pond farming: 18. · Access to water: 10. · Fishing: 9. · Small-scale industrial processing: 9. · Construction of boats: 6. · Small access roads and drainage: 4. · Markets and storage: 4. · Education: 3. · Health: 2. · Support to micro-credit: 1. · Beekeeping: 1. · Communal park: 1. · Electricity generation: 1. Component C: Capacity Enhancement Support Cost: Appraisal: $8.00 million. Actual: $10.40 million 25.5 percent of actual total project cost. Poverty Reduction Strategy · Household survey (60 percent IDA financing), with the government and the UNDP, feeding into the PRSP process. General economic management and public sector reform · Audit of the General Tax Directorate to define and set in place a plan to evaluate revenues. · Audit of the performance of the Customs Department to evaluate and reduce evasion of customs and fiscal revenue. · Audit of the Treasury and the Debt Department to evaluate fiduciary risks and possible improvements. · Inventory of real estate property of the national electricity and water utilities (Société Nationale d'Electricité and Société Nationale de Distribution d'Eau) and study on debt settlement of the water utility, as basis for restructuring the two utilities. Decentralization · Study on local financial management to identify training needs. · Finalization of 10 legislative and regulatory documents pertaining to decentralization. · Development of three training modules for local governments (financial resource management, budget cycle, and process and norms for budget preparation and accounting). · Printing of 500 training manuals. · Training of 18 trainers of trainers. 18 · Training of 488 local government officials involved in budget and fiscal management. · Equipment for the Local Government Administration to assure minimum capacity for preparing legal and regulatory documents. Forestry Sector · Verification of forestry income. · Organizational audit of the forestry administration and preparation of organizational layout based on the findings. · Training of 71 forestry and water agents in cartography, photo interpretation, timber identification, forest mensuration, and botany. Posts and telecommunications · Support to revision of the legal and regulatory framework. · Preparation of draft statutes on posts and telecommunications. · Preparation of draft law on the Posts and Telecommunications Regulatory Agency. · Study on taxation of telecommunications. · Study on strategic options for the Postal Company of Congo (Société de Postes du Congo). Domestic Debt · Support to operationalizing the action plan for paying off domestic debt, including inventory of existing debt obligations, recruitment of a negotiator and recruiting of a commercial bank to handle payments. · Audit of pension funds for public and private employees (Caisse de Retraite des Fonctionnaires and Caisse Nationale de Sécurité Sociale), to lay the analytical foundations for a reform of these institutions. · Support to carrying out two studies financed by the state: (1) Technical and financial audit of a sample of investment expenditures and transfers for 2006, which feed into an action plan for management of public investments, currently being finalized. (2) Operational audit of the National Petrol Refining Company (Congolaise de Raffinage), which brought to light major dysfunctions and facilitated the setting in place of restructuring program of the company, being implemented at the time of project closure. Insurance Sector · Financial and accounting audit of Insurance and Reinsurance Company of Congo (Assurances et Réassurances du Congo), appraising the company's assets. · Insurance sector audit, leading to finalization of 7 documents to improve the legal and regulatory framework, 4 of which have been adopted. · National Insurance Administration audit (Direction Nationale des Assurances), being finalized at the time of project closure. Component D: Balance of Payment Support Cost: Appraisal: $13.00 million. Actual: $14.02 million 34.4 percent of actual total project cost. The positive list of imports: 19 · Agricultural equipment and inputs, including fertilizer and excluding pesticides and insecticides. · Petroleum and fuel products. · Construction materials. · Transport vehicles and spare parts. · Livestock, animal products, and veterinary supplies. · School supplies and equipment. · Medical supplies and equipment. · Construction equipment, industrial machinery, and spare parts. · Electrical equipment, machinery, and parts. 20 Annex 3. Economic and Financial Analysis No economic or financial analysis was carried out at appraisal. An economic evaluation of markets was attempted, but the consultant hired by the PCIU was unable to gather sufficient information to make the exercise meaningful. As noted in the main text, a comprehensive economic analysis is excluded by the small size and diverse nature of subprojects combined with the many unquantifiable benefits from these activities and the lack of complete data and comparative unit costs from similar locations. As an alternative, the ICR quantifies efficiency in terms of time taken to implement activities and geographic coverage. The full text of this evaluation can be found in the main text. 21 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Responsibility Names Title Unit / Specialty Lending Xavier Devictor Senior Country Officer AFC09 TTL Alassane Diawara Country Manager AFC09 Not Jacques Bure Consultant available Not T. Mpoy-Kamulayi Lead Counsel available Not Albert Osei Consultant available Not Mwelu Ndeti Consultant available Marie-Chantal Operations Analyst AFC09 Uwanyiligira Monique Piette Program Assistant AFC09 Renée Desclaux Finance Officer LOAG1 Not Abdoul Adji Consultant available Financial Management Jean-Charles Kra AFC09 Specialist Henri Aka Procurement Specialist AFTPC Luc Lapointe Procurement Specialist AFTPC 22 Supervision/ICR Xavier Devictor Country Program Coordinator MNCA3 TTL Maurice Adoni Procurement Specialist AFTPC Jerome Bezzina Regulatory Economist CITPO Nadege J. X. Marthe Executive Assistant AFMCG Bicoumou Monthe Bienvenu Biyoudi Economist AFTP3 Jacques Bure Sr Highway Engineer ECSSD Sr Financial Management Alain Jean Catalan AFTFM Specia Sr Financial Management Nestor Coffi AFTFM Specia Bourama Diaite Senior Procurement Specialist AFTPC Mahine Diop Senior Municipal Engineer AFTU2 TTL ICR team Christian Vang Eghoff Operations Officer AFCF1 leader Mbaye Mbengue Faye Consultant AFTEN Jean Charles Amon Kra Country Officer AFCRI Paul Jonathan Martin Sr Environmental Spec. AFTEN Pierre Morin Senior Procurement Specialist AFTPC Gaspy Gedeon Muanda E T Consultant AFTFM Mamadou Sevede Consultant AFTWR Giuseppe Topa Lead Specialist AFTEN Marie-Chantal Senior Country Officer AFCCD Uwanyiligira (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) US$ Thousands Stage of Project Cycle No. of staff weeks (including travel and consultant costs) Lending FY03 1 5.68 FY04 5 34.91 Total: 6 40.59 Supervision/ICR FY03 0 0.00 FY04 17 109.76 FY05 24 110.06 FY06 21 91.72 FY07 19 62.02 23 FY08 21 44.63 FY09 13 47.82 Total: 115 466.01 24 Annex 5. Beneficiary Survey Results The results of the beneficiary satisfaction survey are incorporated in the main text of the ICR. 25 Annex 6. Stakeholder Workshop Report and Results No stakeholder workshop was carried out, in accordance with ICR Guidelines for a core ICR (OPCS, August 2006, last updated on April 16, 2007). 26 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR (a) Summary in English of the Borrower's ICR Context at Project Preparation 1. The Emergency Recovery and Community Support Project (PURAC), was prepared at a time when the Republic of Congo was emerging from a decade of armed conflicts and political unrest, and significant progress had been noticed in the reconciliation efforts. The government, building on newly established institutions, launched an important program of economic reforms supported by the Bretton Woods institutions. It had launched large-scale structural reforms based upon economic governance, management of public expenses, poverty alleviation, transparency, the financial sector, and public or state-owned enterprises. In addition to these, the government had also initiated a huge program of decentralization with the setting up of ten (10) departments/regions and six (6) municipalities split into local administrative areas governed by council members elected by popular vote and with extended responsibilities in several economic and social sectors. 2. In response to the Congolese government's efforts, the World Bank in particular supported, in the framework of the Transitional Support Strategy (TSS), the funding of various emergency activities such as: (i) the Post-conflict Economic Recovery Credit; (ii) the Emergency Project of Demobilization and Reinsertion of Ex-combatants; (iii) the Transparency and Governance Capacity Building Project; and (iv) the Emergency Infrastructure Rehabilitation and Living Conditions Improvement Project. 3. However, aid from the international community was targeted to the Brazzaville and Pointe Noire regions. It was imperative to launch activities that would make it possible for the whole country to benefit from the impact of the reforms and to help turn political and economic stability into sustainable peace and economic recovery. Project Objectives 4. As defined in the Financing Agreement, the project's development objective was to help the government of the Republic of Congo speed up the country's economic recovery so as to improve living standards in both rural communities and small municipalities throughout the territory. 5. Specific objectives/goals for the four components were presented as follows: Component A - Financing of priority local investments: To rehabilitate community infrastructures at the level of departments/regions, municipalities, and villages, using labor intensive works to provide jobs to marginal groups such as ex-combatants, youth and women. Component B - Support to community organizations: (i) To provide beneficiary communities with micro­financing in order to support the implementation of capacity building activities of organizations located in communities, with the choice of development priorities to be made at the level of these communities. Another objective of this component was to design and implement community subprojects that aim at alleviating poverty at the local level, and to build the operational and management capacities of communities thanks to the provision of services of relevant and adapted technical counseling, in order to ensure that decentralization was sustainable and that local communities were given the opportunity to self-govern. 27 Component C - Capacity Enhancement Support: To build the capacities of economic management of services of the government of the Republic of Congo both at the central level and at decentralized levels thanks to the provision of relevant and appropriate technical assistance. Component D - Balance of Payments Support: To help the government of the Republic of Congo set up relevant mechanisms for the transfer of budgetary resources to local administrative areas and the follow-up of their use. Achievement of project objectives and outcome 6. Comprehensive assessment of the achievement of objectives. The project's results are satisfactory and, to a large extent, the objectives were achieved. The general population, the civil society organizations and local communities were fully involved in the participatory approaches used to identify community priorities according to well defined criteria. These approaches, new in the country, were highly appreciated. Throughout the implementation period, the project was virtually the only large-scale government program that covered the education, health, and community support sectors over the entire national territory. In several areas totally abandoned during the conflict, the project was viewed as a real return of the state to those areas. The project has notably enabled the improvement of access to social services on the entire national territory, particularly in the fields of education and health. 7. The granting of micro grants to 190 basic community organizations shared out among 90 districts and 10 departments, for the achievement of 190 micro projects of diverse nature (agriculture, farming, fish farming, poultry farming, waterway transportation, etc.) made it possible to inject important sums of money into local economies, thus contributing to their recovery. Despite a set of difficulties, a great deal of these activities continues to be carried out and continue to grow. 8. Studies of organizational diagnosis, operational audits and capacity building activities that have been funded by the project have contributed to creating conditions required for the methodical continuation of economic reforms carried out before the project, and a consolidation of the decentralization process. The main sectors of the Congolese economy (crude oil, forestry, telecommunications, and financial administration) have been subject to organizational diagnosis and audits. 9. As far as consolidation of the decentralization process is concerned, the whole program of capacity building has not been achieved due to the lack of time. However, important training sessions have been organized and held for 488 agents of deconcentrated administrations and local governments in ten (10) departments, with the help of tailored educational booklets that have been elaborated in the framework of the project. Moreover, the design and the adoption of ten implementation decrees on decentralization have made it possible to fill the regulatory void on fiscal and budgetary of local government administration. The Local Government Administration and its various branches have been supplied with computing equipment, office automation materials (software and stationery) and office furniture, to help them modernize their management. 10. Resources allocated to Component D enabled the improvement of assets in currencies and balance sheets, and reduced the external debt. Acquired materials and furniture have improved the functioning of administrative structures and local governments. 28 Sustainability of the project's outcome 11. The following findings are from the succinct impact studies carried out in 2007 and 2008 for the bulk of investments under Component A and a sample of Component B sub-projects: · Schools and health facilities (CSI and hospital) rehabilitated or reconstructed and equipped under the PURAC do not yet have a full contingency of staff to assure maximum improvement of services expected by such investments. · For local governments, markets that are built by the PURAC are important sources of additional revenue, and their correct use will assure the sustainability of investments through a good maintenance program. 85 agents have already been recruited locally to handle the maintenance of the fifteen markets built by the project. · There is no maintenance program of road infrastructures rehabilitated or built under PURAC for the time being. · The management of electricity supply networks and of streetlights developed in 4 cities will be under the guidance/control of SNE. It is too early to appreciate the sustainability of the services to be supplied. · The sustainability of activities funded under Component B to support communities normally depends on beneficiary organizations, given that what the project essentially financed productive investments (more than 88% of sub- projects). It is difficult to appreciate the sustainability for farming and fishing exploitations, although many of them show positive signs or signals of sustainability. Two problems related to sustainability were pointed out after the conduction of partial surveys. Sustainability seemed to be problematic because of the following reasons: (i) the small industrial units (five only) are handicapped by difficulties and costs related to fuel supplies; (ii) stock and poultry farming activities have suffered from recent epidemics and the lack of animal feed supply resulted in difficulties to feed the animals. 12. For economic reforms and capacity building, the ongoing process that has been started with the Bretton Woods Institutions is encouraging, and should be continued. Lessons Learned 13. The most significant positive lessons The participatory process of identifying priority activities · The participatory process used to identify priority activities based on criteria and financial resources known in advance, was highly appreciated by the general public, organizations, communities and local governments that were involved for the first time. · Competition between enterprises and suppliers through a bidding process widely circulated or published and the concern of transparency in the selection of the successful bidder at all levels (central administration and local government) is good practice that can help reduce costs. 29 Application of delay-based penalties · Applying delay-based penalties to enterprises and suppliers in the implementation of Component A ­ which is something new in contract management in Congo ­ highly boosted the completion of certain works within reasonable costs and deadlines. 14. The most significant negative lessons · A poor engagement of local authorities and communities in the selection of NGOs. Departmental councils, deconcentrated authorities (prefectures and sub- prefectures) and even populations did not express the desire to be involved in the selection of organizations to benefit from project financing, coming from public resources that served essentially for achieving private productive investments. · Poor inclusion of sector administrations. Those services are not obliged to take into account the investments of the project in the elaboration of their priority programs and plans and the management of their human resources to enable immediate functioning and operation of equipment. For support to community organizations, the implementation agency did not have the needed technical capacities and means to enable a close follow-up of 190 activities covering 10 departments. Activities that have had the support and technical assistance of departmental sector administrations were more successful than those that have received none such support. · Confusion in allocation of project management and of implementing agency. For Component A, the implementation agency had the dual mission of supervision and implementing agency; and such confusion did not facilitate smooth implementation and assure good quality control of studies and the supervision of works. These two missions should normally be assigned to separate entities, with clear definition of responsibilities. · Absence of a high-level steering committee, given that it was a multi- dimensional project. To guarantee immediate operation of equipment and sustainability of results of a multidimensional project such the PURAC, it was a must to have a high-level steering committee made up of ministers in charge of the sectors or fields involved, or at least their senior civil servants, and chaired by the Minister of Economy, Finance and Budget or his Cabinet Director. · Excessive importance given to the quick execution of investments. The emphasis on the quick implementation of investments partly explains the poor quality of some studies (numerous inaccuracies and unexpected additional works), which seriously delayed works. (b) Comments received from the government on draft Bank ICR The full text in French is reproduced below. In the cover letter, the government expresses thanks for the collaboration between the government and the Bank in the implementation of the PURAC and hopes that the activities can be multiplied and the experiences replicated. The comments on the actual ICR essentially concern editing changes. The exception is a comment that the ICR is excessive in stating, in the context section of the 30 ICR, that "mismanagement of the country's abundant oil resources further held up recovery efforts." This statement is found excessive since progress has been made since then. 31 32 33 34 35 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders (a) Comments received from ACTED, implementing agency for Component A The full comments in French are included below. The comments pertain to: (1) A request for adding text to the effect that the multiple roles played by ACTED in project implementation contributed to speeding up implementation, although also creating conflict of interest. (2) Clarification that the ACTED Project Agreement did not contain activities or a budget related to M&E activities. (3) Lack of fully covering supervision was a result of the large geographic spread of activities combined with centralization of ACTED staff in Brazzaville. This was addressed by the establishment of a decentralized supervision office in Dolisie in 2006. (4) Correction of the background for false certifications, which was not the result of lack of presence of ACTED in the field, as stated in the draft ICR, but rather resulted from actions of a single ACTED employee, who was not acting in the best interest of ACTED. 36 37 38 (b) Comments received from UNDP, implementing agency for Component B The comments of UNDP, reproduced in full below, in essence agree with the analysis contained in the ICR and do not contain any points that warrant a specific response. 39 40 41 42 Annex 9. List of Supporting Documents · Memorandum and Recommendation of the President and Technical Annex (Project Document). · Development Financing Agreement. · Project aide-mémoires. · Mid-term review report. · Impact studies: 1. Rural roads (two studies covering separate geographic areas). 2. Economic evaluation of markets. 3. Impact studies for Components A and B (including beneficiary survey). · Technical audit of Component A. · Audits and studies financed by the PURAC. · Implementation Status and Results Reports (ISRs). · Government Implementation Completion Report. · Official correspondence concerning additional financing, restructuring, and extension of project closing date. · Transitional Support Strategy (2000). · Transitional Support Strategy (2003). · Interim Support Strategy (2007). · Country Partnership Strategy (2009). · Poverty Reduction Strategy Paper (2008). 43 Annex 10 (Supplemental Annex). Performance Indicators from the Technical Annex 44 45 46 IBRD 33390 14°E 16°E 18°E C E N T R A L A F R I C A N 4°N R E P U B L I C 4°N CONGO C A M E R O O N To Batouri Ibenga Bétou To Ebolowa Motaba 2°N Souanké Ngoko L I K O U A L A 2°N Sembé Ouésso Impfondo Epéna S A N G H A Congo C o n g o To Likouala Lambaréné Mambili Lengoué Sangha W E S T E R N G A B O N C U V E T T E 0° Etoumbi To Booué C U V E T T E Likouala Ubangi 0° Owando Kouyou Liranga Lake Ewo B a s i n Tumba To Alima Mossaka Lambaréné Okoyo P L AT E A U X NkénGamboma i 2°S Congo DEMOCRATIC 2°S Mbinda Louéssé REPUBLIC Ngo Lake OF CONGO Mai-Ndombe Djambala Zanaga N I A R I B a t é k é Fimi Mossendjo P l a t e a u Kwa Ngabé é LÉKOUMOU 0 20 40 60 80 100 Kilometers Makabana DjouP O O L KOUILOU 4°S Nkola Kouilou Niari Sibiti 0 20 40 60 80 100 Miles 4°S Dolisie Madingou BRAZZAVILLE 18°E BOUENZA Kayes Kinkala CONGO To Kikwit Pointe-Noire ATLANTIC SELECTED CITIES AND TOWNS OCEAN CABINDA (ANGOLA) REGION CAPITALS To Matadi To This map was produced by Lusanga NATIONAL CAPITAL the Map Design Unit of The World Bank. The boundaries, RIVERS colors, denominations and To any other information shown M'banza Congo 6°S MAIN ROADS on this map do not imply, on the part of The World Bank Group, any judgment on the A N G O L A RAILROADS legal status of any territory, or any endorsement or REGION BOUNDARIES a c c e p t a n c e o f s u c h boundaries. 12°E 14°E 16°E INTERNATIONAL BOUNDARIES SEPTEMBER 2004