Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD974 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN IN THE AMOUNT OF US$45 MILLION TO THE REPUBLIC OF GUATEMALA FOR AN URBAN INFRASTRUCTURE AND VIOLENCE PREVENTION PROJECT December 12, 2016 Social, Urban, Rural and Resilience Global Practice Latin America and the Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective November 30, 2016) Currency Unit = Guatemalan Quetzales (GTQ) GTQ 7.51 = US$1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS AECID Spanish Agency for International Cooperation (Agencia Española de Cooperación Internacional para el Desarrollo) CIV Ministry of Communications, Infrastructure and Housing (Ministerio de Comunicaciones, Infraestructura y Vivienda) COCODES Community Development Councils (Consejos Comunitarios de Desarrollo) CODEDES Departmental Development Councils (Consejos Departamentales de Desarrollo) COMUDES Municipal Development Councils (Consejos Municipales de Desarrollo) EMG Environmental Management Guidelines ESMF Environmental and Social Management Framework FAP Fiduciary Action Plan FM Financial Management FSS Social Solidarity Fund (Fondo Social de Solidaridad) GCMA Guatemala City Metropolitan Area GDP Gross Domestic Product GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GRS Grievance Redress Service IBRD International Bank for Reconstruction and Development LAC Latin America and the Caribbean MARN Ministry of Environment and Natural Resources (Ministerio de Ambiente y Recursos Naturales) M&E Monitoring and Evaluation MGCS Mancomunidad Gran Ciudad del Sur MINGOB Interior Ministry (Ministerio de Gobernación) NVCP National Violence and Crime Prevention Policy OM Operations Manual PDO Project Development Objective PIU Project Implementation Unit PPVICG Participatory Planning for Vulnerable and Indigenous Communities Guideline RAP Resettlement Action Plan RPF Resettlement Planning Framework SEGEPLAN Secretariat for Planning and Programming of the Presidency (Secretaría de Planificación y Planeación de la Presidencia) SICOIN Integrated Accounting System (Sistema de Contabilidad Integrada) US United States USAID United States Agency for International Development UNDP United Nations Development Programme VMP Vice Ministry of Prevention ii Regional Vice President: Jorge Familiar Country Director: J. Humberto Lopez Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Practice Manager: Ming Zhang Task Team Leader: Augustin Maria iii GUATEMALA Urban Infrastructure and Violence Prevention Project (P143495) TABLE OF CONTENTS Page I. STRATEGIC CONTEXT .................................................................................................1 A. Country Context ................................................................................................................. 1 B. Sectoral and Institutional Context ...................................................................................... 2 C. Higher Level Objectives to which the Project Contributes ............................................... 4 II. PROJECT DEVELOPMENT OBJECTIVE ..................................................................5 A. PDO.................................................................................................................................... 5 B. Project Beneficiaries .......................................................................................................... 5 C. PDO Level Results Indicators ............................................................................................ 5 III. PROJECT DESCRIPTION ..............................................................................................6 A. Project Components ........................................................................................................... 6 B. Project Financing ............................................................................................................... 9 C. Lessons Learned and Reflected in the Project Design ..................................................... 10 IV. IMPLEMENTATION .....................................................................................................10 A. Institutional and Implementation Arrangements ............................................................. 10 B. Results Monitoring and Evaluation ................................................................................. 11 C. Sustainability.................................................................................................................... 12 V. KEY RISKS ......................................................................................................................12 A. Overall Risk Rating and Explanation of Key Risks......................................................... 12 VI. APPRAISAL SUMMARY ..............................................................................................13 A. Economic and Financial Analysis .................................................................................... 13 B. Technical .......................................................................................................................... 14 C. Financial Management ..................................................................................................... 14 D. Procurement ..................................................................................................................... 14 E. Social (including Safeguards) .......................................................................................... 15 F. Environment (including Safeguards) ............................................................................... 16 iv Annex 1: Results Framework and Monitoring .........................................................................18 Annex 2: Detailed Project Description .......................................................................................21 Annex 3: Implementation Arrangements ..................................................................................29 Annex 4: Implementation Support Plan ....................................................................................46 Annex 5: Crime and Violence Prevention Context ...................................................................49 Annex 6: Economic Analysis .......................................................................................................55 Annex 7: Map of Proposed Project Areas .................................................................................61 v PAD DATA SHEET Guatemala Urban Infrastructure and Violence Prevention Project (P143495) PROJECT APPRAISAL DOCUMENT LATIN AMERICA AND CARIBBEAN Social, Urban, Rural and Resilience Global Practice Report No.: PAD974 Basic Information Project ID EA Category Team Leader(s) P143495 B - Partial Assessment Augustin Maria Lending Instrument Fragile and/or Capacity Constraints [ ] Investment Project Financing Financial Intermediaries [ ] Series of Projects [ ] Project Implementation Start Date Project Implementation End Date 30-Jul-2017 30-Jul-2023 Expected Effectiveness Date Expected Closing Date 30-Jul-2017 30-Jul-2023 Joint IFC No Practice Senior Global Practice Country Director Regional Vice President Manager/Manager Director Ede Jorge Ijjasz- Ming Zhang J. Humberto Lopez Jorge Familiar Vasquez Borrower: Republic of Guatemala Project Financing Data(in US$, millions) [X] Loan [ ] IDA [ ] Guarantee Grant [ ] Credit [ ] Grant [ ] Other Total Project Cost: 45.00 Total Bank Financing: 45.00 Financing Gap: 0.00 vi Financing Source Amount Borrower 0.00 International Bank for Reconstruction and 45.00 Development Total 45.00 Expected Disbursements (in US$, millions) Fiscal Year 2017 2018 2019 2020 2021 2022 2023 Annual 0.5 2 9 9.5 9.5 9.5 5 Cumulative 0.5 2.5 11.5 21 30.5 40 45 Institutional Data Practice Area (Lead) Social, Urban, Rural and Resilience Global Practice Contributing Practice Areas Cross Cutting Topics [ ] Climate Change [X] Fragile, Conflict & Violence [ ] Gender [ ] Jobs [ ] Public Private Partnership Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Co- Mitigation Co- benefits % benefits % Public Administration, Law, and Sub-national 100 10% 0% Justice government administration Total 100 I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this Project. Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Urban development Urban services and housing for 70 the poor vii Social dev/gender/inclusion Other social development 30 Total 100 Proposed Development Objective(s) The Project Development Objective (PDO) is to increase access to basic urban infrastructure and services and mitigate key risk factors of crime and violence in selected communities. Components Component Name Cost (US$, millions) Integrated Package of Small-Scale Urban Infrastructure and 36.1 Violence Prevention Interventions Technical Assistance for Capacity Building 4.3 Project Management, Monitoring and Evaluation 4.5 Systematic Operations Risk- Rating Tool (SORT) Risk Category Rating 1. Political and Governance High 2. Macroeconomic Moderate 3. Sector Strategies and Policies Moderate 4. Technical Design of Project or Program Substantial 5. Institutional Capacity for Implementation and Sustainability High 6. Fiduciary Substantial 7. Environment and Social Substantial 8. Stakeholders Substantial OVERALL Substantial Compliance Policy Does the Project depart from the CAS in content or in other Yes [ ] No [ X ] significant respects? Does the Project require any waivers of Bank policies? Yes [ ] No [ X ] Have these been approved by Bank management? Yes [ ] No [ X ] Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ] Does the Project meet the Regional criteria for readiness for Yes [ X ] No [ ] implementation? Safeguard Policies Triggered by the Project Yes No Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X viii Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways OP/BP 7.50 X Projects in Disputed Areas OP/BP 7.60 X Legal Covenants Name Recurrent Due Date Frequency Project Implementation Unit No 3 months after N/A effectiveness Description of Covenant Schedule 2, Section I.A.1. The Borrower, through the CIV-FSS, shall: (a) establish, and thereafter operate and maintain throughout Project implementation, a PIU; and (b) select and appoint, at least, a procurement specialist and FM specialist for the PIU. Subproject Agreements No Before the N/A implementatio n of any subproject in a Selected Community within a Participating Municipality Description of Covenant Schedule 2, Section I.D.1. To facilitate the carrying out of each Subproject, and before the implementation of any Subproject in a Selected Community within a Participating Municipality Borrower, through CIV-FSS, shall enter into an agreement with said Participating Municipality and MGCS (the “Subproject Agreement”), under terms and conditions approved by the Bank. Technical Committee No No later than N/A one month after the Effective Date Description of Covenant Schedule 2, Section I.E.1. To facilitate the carrying out of the Project activities, no later than one (1) month after the Effective Date, the Borrower, through the CIV-FSS, shall establish and thereafter maintain throughout Project implementation, a technical committee (the “Technical Committee”) with functions and responsibilities acceptable to the Bank, comprised of the PIU’s Project coordinator, and representatives of MGCS and MINGOB, all under terms of reference acceptable to the Bank and set forth in the Operations Manual. ix Evaluation Committee No No later than 3 N/A months after the Effective Date Description of Covenant Schedule 2, Section I.E.2. To facilitate the carrying out of the activities under Part 1(a) of the Project, no later than three (3) months after the Effective Date, the Borrower, through the CIV-FSS, shall establish and thereafter maintain throughout Project implementation, an evaluation committee (the “Evaluation Committee”), with functions and responsibilities acceptable to the Bank, comprised by representatives from the PIU, MGCS, MINGOB and each of the Participating Municipalities, all under terms of reference acceptable to the Bank and set forth in the Operations Manual. Operations Manual Yes N/A Throughout implementation Description of Covenant Schedule 2, Section I.F.1. The Borrower, through the CIV-FSS, shall carry out the Project in accordance with a manual acceptable to the Bank (Operations Manual). Anti-Corruption Yes N/A Throughout implementation Description of Covenant Schedule 2, Section I.G.1. The Borrower, through the CIV-FSS, shall carry out the Project in accordance with the provisions of the Anti-Corruption Guidelines. Safeguards Yes N/A Throughout implementation Description of Covenant Schedule 2, Section I.H.1. The Borrower, through the CIV-FSS, shall carry out the Project in accordance with the EMF, RPF and IPPF. Project reports Yes No later than Every calendar semester 45 days after the end of the period (one calendar semester) covered by each report Description of Covenant Schedule 2, Section II.A.1. The Borrower, through the CIV-FSS, shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 5.08 of the General Conditions and on the basis of the Project indicators set forth in the Operations Manual. Interim Unaudited Financial Reports Yes After the end Every calendar semester of each calendar semester, or such later date as the Bank shall agree. Description of Covenant x Schedule 2, Section II.B.2. The Borrower, through the CIV-FSS, shall prepare and furnish to the Bank as part of the Project Reports after the end of each calendar semester, or such later date as the Bank shall agree, interim unaudited financial reports for the Project covering the pertinent semester, in form and substance satisfactory to the Bank. Audit of the Financial Statements Yes No later than 6 Every fiscal year months after the end of each fiscal year of the Borrower Description of Covenant Schedule 2, Section II.B.3. The Borrower, through the CIV-FSS, shall have the Financial Statements audited and made publicly available in accordance with the provisions of Section 5.09 (b) of the General Conditions. Each audit of the Financial Statements shall cover the period of one fiscal year of the Borrower, or any other period acceptable to the Bank. The audited Financial Statements for each such period shall be furnished to the Bank not later than six months after the end of such period. Hiring of external auditors No No later than 6 N/A months after the Effective Date Description of Covenant Schedule 2, Section V.a. No later than six (6) months after the Effective Date, submit evidence to the Bank’s satisfaction of the selection and hiring of external auditors, under terms of reference and with qualification and experience satisfactory to the Bank, and pursuant to the terms and conditions of this Agreement Update of Procurement Plan No No later than 3 N/A months after the Effective Date Description of Covenant Schedule 2, Section V.b. No later than three (3) months after the Effective Date, update the Procurement Plan into any system recommended by the Bank to the Borrower. Conditions Source Of Fund Name Type IBRD Inter Institutional Agreement Effectiveness Description of Condition The Inter Institutional Agreement has been duly executed by the parties thereto. Source Of Fund Name Type IBRD Inter Institutional Arrangement Effectiveness Description of Condition The Inter Institutional Arrangement has been duly executed by the parties thereto. Team Composition Bank Staff xi Name Role Title Specialization Unit Augustin Maria Team Leader (ADM Sr Urban Urban Development GSU10 Responsible) Spec. Luis Miguel Triveno Team Member Urban Chan Jan Developmen t Specialist Ana I. Aguilera Team Member Urban Urban Development GSU10 Developmen t Specialist Gabriela Grinsteins Legal Counsel Counsel Legal LEGLE Monica Lehnhoff Procurement Specialist Procurement Procurement GGO04 (ADM Responsible) Specialist Lourdes Consuelo Financial Management Sr Financial Financial GGO22 Linares Loza Specialist Management Management Specialist Angelica Nunez del Team Member Sr Urban Urban Development GSU10 Campo Spec. Elena Segura Labadia Team Member Senior Counsel LEGLE Counsel Marisa Garcia Lozano Team Member Consultant Urban Development GSU10 Jimena Garrote Counsel Senior Counsel LEGLE Counsel Joan Helen Serra Team Member Senior GSU04 Hoffman Social Developmen t Specialist Marco Antonio Safeguards Specialist Environment Environmental GEN04 Zambrano Chavez al Specialist Safeguards Chloe Fevre Team Member Senior Social Development GSU04 Social Developmen t Specialist Margarita Puerto Team Member Social Crime and Violence GSU07 Gomez Developmen Prevention t Specialist Maria Virginia Team Member Finance Disbursements WFALN Hormazabal Officer Martin Henry Lenihan Safeguards Specialist Senior Social Safeguards GSU04 Social Developmen t Specialist Nancy Chaarani Meza Team Member Disaster Operations GSU10 xii Risk Management Specialist Perla Rocio Calidonio Team Member Consultant GSU04 Aguilar Jessica Grisanti Team Member Consultant GSU10 Patricia M. Acevedo Team Member Program Team Assistant GSU10 Assistant Extended Team Name Title Office Phone Location Locations Country First Administrative Location Division Guatemala Guatemala Department Municipality of Mixco Guatemala Guatemala Department Municipality of Amatitlán Guatemala Guatemala Department Municipality of Villa Nueva Guatemala Guatemala Department Municipality of San Miguel Petapa Guatemala Guatemala Department Municipality of Santa Catarina Pinula Guatemala Guatemala Department Municipality of Villa Canales Consultants (Will be disclosed in the Monthly Operational Summary) Consultants Required? Consultants will be required xiii I. STRATEGIC CONTEXT A. Country Context 1. Guatemala, with the largest population in Central America, is a lower middle- income country in the process of transitioning from a predominantly rural to a more urban, services-oriented economy. In the aftermath of the 2009 global economic slowdown and natural disasters in 2010 and 2011,1 Guatemala’s national economy has stabilized, with a modest 3.4 percent average growth rate between 2000 and 2015,2 slightly above the Latin American and Caribbean (LAC) average of 3.2 percent. Factor accumulation (labor and capital) has been the main driver of GDP growth, stemming primarily from a growing working-age population and high labor force participation, rather than increases in labor productivity. Other factors impacting the growth of the economy are the expansion in agricultural exports, a growing services sector (particularly financial services), and high private consumption (accounting for over 80 percent of GDP). 2. Despite improvements in macroeconomic stability over the past decade, Guatemala remains one of the poorest countries in LAC and sustaining progress in poverty reduction is an ongoing challenge. Using a US$4 per day poverty line, Guatemala’s poverty rate increased from 53 percent in 2006 to 60 percent in 2014, while extreme poverty (using a US$2.5 per day poverty line) rose from 33 percent to 37 percent. Moreover, shared prosperity was very limited: for the 2000-2014 period, the poorest 40 percent experienced a decline in income. In contrast to LAC, the size of Guatemala’s middle class shrunk from 13.2 percent to 9.4 percent during those same years. Access to basic services remains modest and unequal, limiting the universe of economic opportunities for the most vulnerable. 3. Poverty is increasingly an urban problem. While extreme poverty is most concentrated in rural areas and among indigenous populations, more than 40 percent of Guatemala’s urbanites live in slums. The concentration of extreme poor in urban areas increased from 7 percent in 2000 to 24 percent in 2014. Urbanites became a majority in Guatemala in 2012, a trend expected to accelerate, as the country’s urbanization rate converges towards the regional average.3 Rural to urban migration has been fed by the country’s more than three decade long civil war, natural disasters, and the attraction of better labor opportunities and higher standards of living in urban areas. As migrants have moved towards the Guatemala City Metropolitan Area (GCMA), they have found few options in the formal housing sector and have instead built informal settlements in the urban periphery, many of which lack basic public services and are poorly connected to jobs and economic activities. Municipalities, which are responsible for providing basic public services, such as water, sanitation, road management, and public safety, have strained to keep pace with demand and struggled to create the conditions to generate economic prosperity. Given 1 Natural hazards in Guatemala during these years include: eruption of the Pacaya volcano (May 2010), Tropical Storm Agatha (May 2010), a 5.8 magnitude earthquake (September 2011), and heavy floods (October 2011). 2 World Bank. 2016. Systematic Country Diagnostic: Guatemala, Closing Gaps to Generate a More Inclusive Growth. 3 LAC has an average urbanization rate of 80 percent, but Central America’s rate is much lower at 56 percent in 2010, as reported in the United Nations report: The State of Latin American and Caribbean Cities 2012. 1 that Guatemala’s urban population is projected to grow rapidly,4 the number of poor people living in these vulnerable, peripheral communities will inevitably grow as well. 4. Guatemala struggles with high levels of crime and violence, which impose a heavy burden on the country’s development. These high levels are among the key constraints to investments, productivity, and security of people and property. The economic cost of crime is high, accounting for 7.7 percent of GDP in 2011,5 11.3 percent in 2013,6 and 10 percent in 2014.7 5. Guatemala experienced a decrease in homicide rates from 2009–2011, despite a marked increase in Central America’s Northern Triangle. Although there was a slight increase in 2012 when the rate reached 39.9 per 100,000 people,8 the national murder rate declined overall from 46.4 in 2009 to 29.5 per 100,000 people in 2015,9 a rate that remains above the LAC average and three times as high as the world average. High robbery victimization, increased incidence of sexually related crimes, kidnappings, and gender-based violence have also contributed to the magnitude of the problem.10 In 2015, 615 claims of sexual assault were reported to the police compared to 385 in 2008. In contrast, claims of victimization from domestic violence reported to police decreased from 2,050 in 2008 to 1,861 in 2015.10 6. A disproportionate share of the victims, perpetrators, and populations at risk of violence are concentrated in poor urban settlements.11 These precarious settlements lack access to urban services and economic opportunities and are characterized by low community cohesion and low social capital—factors that make them more vulnerable to various forms of crime and violence. High residential instability (due to natural disasters, migration and violence itself), family disintegration, and low interpersonal trust combine to weaken the capacity of these communities to act collectively to improve their living conditions and manage internal conflicts. B. Sectoral and Institutional Context 7. GCMA12 has the highest concentration of poor people per square kilometer. With a population of 3.2 million or 21 percent of the country,13 GCMA concentrates 60 percent of the 4 The urban population is projected to increase from 8.1 million to 21.1 million by 2050. (United Nations . 2014 . World Urbanization Prospects: The 2014 Revision) 5 World Bank. 2011. Crime and Violence in Central America: A Development Challenge. 6 Fundesa. 2014. El costo de contener la violencia en Guatemala. 7 Institute for Economics and Peace. 2015. Global Peace Index 2015: Measuring Peace, its Causes and its Economic Value. Sydney: Institute for Economics and Peace. 8 https://www.wilsoncenter.org/sites/default/files/FINAL%20PDF_CARSI%20REPORT_0.pdf 9 United Nations Office on Drugs and Crime. 2013. “Global Study on Homicide. Trends, Context, Data.” Vienna: United Nations Office on Drugs and Crime. 10 A 2011 Latin American Public Opinion Project victimization survey showed that Guatemala has overall victimization rates (measuring crime without specifying its type) higher than the regional average. 11 About 50 percent of the country’s violent deaths are concentrated in 5 percent of municipalities, and homicide rates are nearly three times greater in Guatemala City than the national average. 12 Because there is no official Government definition of the GCMA, GCMA is defined here as the Guatemala Department, which comprises 17 municipalities, including Guatemala City and the Mancomunidad del Sur. 2 country’s industry and generates 60 percent of the national GDP, making it the strongest economic region in Guatemala—but also home to the largest proportion of poor citizens. This imbalance is common in many LAC capitals where rising urbanization has led to economic prosperity within central districts, and high poverty levels and vulnerability in the outskirts. GCMA’s growth has manifested horizontally without increases in density, resulting in the sprawl and growth of peri-urban areas. Indeed, most of GCMA’s population growth is expected to occur in the municipalities south of the City, which traditionally have had less technical and financial capacities to plan for and respond to the increased demand for basic services. 8. Limited capacity for urban planning and management amongst municipalities along the urban periphery has resulted in inequitable levels of access to public services and increased vulnerability to crime. In 2010, the Secretariat for Planning and Programming of the Presidency (Secretaría de Planificación y Planeación de la Presidencia, SEGEPLAN) estimated that between 27,000–45,000 families in GCMA live in informal settlements, where improvised housing is often built on steep slopes. These households have, on average, six family members, low educational levels (less than middle school), and low participation by heads of household in the labor market. Community and family instability due to displacement, migration, and deprivation have eroded the social fabric and lowered their capacity to deal with external stresses. Service coverage of these settlements varies: 34 percent of households have access to water only through a community meter, and roughly 60 percent lack solid waste collection services and therefore dispose trash in vacant lots, riverbeds, patios, and/or by burning. 14 These conditions—of accelerated urban growth, poverty, insufficient access to public services and low community cohesion—have made these peri-urban poor communities more vulnerable to urban violence. Over 39 percent of reported homicides15 between 2003 and 2013 occurred within GCMA, which represents about 17 percent of the population.16 9. In late 2012, six municipalities south of GCMA formed the Mancomunidad Gran Ciudad del Sur (MGCS) in a joint effort to address common urban management challenges and improve the living conditions of the urban poor. Mancomunidades have traditionally been formed to implement local economic development initiatives and/or infrastructure projects with a supra-municipal scope. The MGCS municipalities of Mixco, Amatitlán, Villa Nueva, San Miguel Petapa, Santa Catarina Pinula, and Villa Canales face similar challenges, including: (a) high rates of population growth resulting in rapid formation of informal settlements; (b) low coverage of basic services (sanitation coverage varies between 47 percent and 91 percent, and only 35 percent of total waste is systematically collected); (c) high proportion of the population in at-risk areas (steep slopes) and subject to natural disasters; (d) high levels of congestion on the main roads connecting the neighborhoods to downtown Guatemala City; and (e) increased 13 Population estimates from the National Institute of Statistics based on 2002 Census. http://www.ine.gob.gt/np/poblacion/ 14 In contrast, according to SEGEPLAN, 71 percent of the Department of Guatemala receives trash collection services. 15 Data from the National Civil Policy 2012. 16 National Institute of Statistics in 2011. 3 criminal activity.17 These six municipalities comprised 48 percent of GCMA’s population in 2013. 10. Within these municipalities, pockets of informal communities exist that are characterized by deep levels of poverty and high social and economic vulnerability. While homicides remain the most common indicator of violence, other risk factors for violence are prevalent in these municipalities. Examples of such risk factors include lack of social cohesion, lack of opportunities to develop and apply skills, lack of recreational opportunities, deteriorated or abandoned public spaces, and a perception of lack of state presence. 11. The Government has prioritized citizen security, violence prevention, and peaceful co-existence over the last five years. In 2014, the Interior Ministry (Ministerio de Gobernación, MINGOB) through the Vice Ministry of Prevention (VMP) launched the National Violence and Crime Prevention (NVCP) Policy to address major risk factors of violence, such as youth unemployment, domestic violence, single parent households, and child maltreatment. A subsequent executive order established functions across line ministries for the operationalization of the NVCP and is still active. In this context, local governments are instrumental actors in planning and managing the policy at the territorial level, and coordinating with community leaders and stakeholders through existing engagement mechanisms. Accordingly, the VMP sees the operationalization of the NVCP Policy in the MGCS as an opportunity to pilot and validate this community-based model for violence prevention. Piloting this in the largest metropolitan area of Guatemala and documenting this operational learning will benefit the VMP in scaling up the proposed intervention at the national level in the future. C. Higher Level Objectives to which the Project Contributes 13. The proposed Project contributes to the World Bank’s defined goals to end extreme poverty globally within a generation, and promote shared prosperity in the poorer segments of society. The Project will be implemented in some of the country’s poorest, fast- growing urban slums, directly benefiting populations in the bottom 40 percent. A sustainable path toward ending extreme poverty and promoting shared prosperity in Guatemala will require creating an inclusive society, with institutions and processes that empower local communities and promote accountability. Relying on growth alone will not be enough: a range of actions from policies to well-designed interventions will be essential to break the cycle of intergenerational poverty. 14. The proposed Project seeks to respond to some of the critical development challenges outlined in the Systematic Country Diagnostic for Guatemala 18, such as high levels of crime and violence and growing urbanization. Rapid and unplanned urbanization will put further pressure on the already strained public services, such as security, transportation, 17 For example, three of the six municipalities of the MGCS are among the top five municipalities within GCMA with the highest homicide rates in 2012. From 2003 to 2012, Amatitlán had the highest murder rate within the MGCS of 91.5 per 100,000 inhabitants, followed by Villa Canales (78.6) and Mixco (70.4). 18 World Bank, 2016, Guatemala - Closing gaps to generate more inclusive growth : systematic country diagnostic. Systematic Country Diagnostic 4 water, sanitation, or waste treatment capabilities. Moreover, high levels of crime and violence have emerged as a new threat to inclusive development as they limit opportunities for individuals, decrease incentives for private investment and job creation, and undermine victims’ perception of state institutions. The Project is also aligned with the World Bank Group’s Country Partnership Framework for Guatemala for FY2017-2020 (Report No. 103738-GT) discussed by the Executive Directors on November 17, 2016, which seeks to foster social inclusion, including by increasing access to basic services and infrastructure for the most vulnerable, and address bottlenecks to growth, including by expanding infrastructure. 15. The proposed Project will be implemented in close coordination with other World Bank Group-financed projects and complementary operations financed by development partners. Implementation will also be coordinated with a US$1.2 million reimbursable technical assistance for the preparation of basic infrastructure packages in selected communities to the MGCS from the Inter-American Development Bank (IDB) and with key donors involved in violence prevention, such as the United Nations Development Programme (UNDP), the United States Agency for International Development (USAID), the German Agency for International Cooperation (Deutsche Gesellschaft für Internationale Zusammenarbeit, GIZ), and the Spanish Agency for International Cooperation (Agencia Española de Cooperación Internacional para el Desarrollo, AECID). II. PROJECT DEVELOPMENT OBJECTIVE (PDO) A. PDO 16. The PDO is to increase access to basic urban infrastructure and services and mitigate key risk factors of crime and violence in selected communities. B. Project Beneficiaries 19. Direct beneficiaries include (a) residents of selected19 poor urban neighborhoods with high levels of crime and violence and low levels of service provision; and (b) the six participating municipalities of the MGCS. The proposed Project will indirectly benefit national agencies tasked with addressing urban planning and crime and violence prevention, such as SEGEPLAN and MINGOB. Beneficiary feedback during Project Implementation will be collected, recorded and reported, including through the PDO level indicator on perception of safety described below. C. PDO Level Results Indicators 18. Achievement of the PDO will be measured through the following indicators:  People in urban areas provided with access to ‘improved sanitation’ under the Project (number) (core indicator);  People in urban areas provided with access to ‘improved water sources’ under the Project (number) (core indicator); 19 The selection process is outlined in Annex 2. 5  Direct Project beneficiaries of improved urban services in selected urban communities (number), of which female (percentage); and  Increase in the perception of safety by the residents of selected urban communities (percentage). III. PROJECT DESCRIPTION 20. An overarching premise for the proposed Project is that social inclusion of poor and vulnerable urban communities requires a multi-pronged strategy. First, the Project should engage community residents through a well-crafted community mobilization process that builds on the institutional foundations provided by the existing Community Development Councils (Consejos Comunitarios de Desarrollo, COCODES).20 Second, the Project will contribute to the improvement of basic living conditions in these communities through the provision of infrastructure and services that: (a) satisfy basic needs (for example, for potable water, sanitation, and paved roads); (b) enable provision of social and economic services to vulnerable groups (for example, community centers); and/or (c) reduce risks for crime and violence and natural hazards through safer and more resilient built environments. Third, the Project will provide social and economic opportunities for individuals and families to reduce their vulnerability to crime and violence, natural disasters, and poverty. 21. Given the lack of reliable baseline data on the general characteristics of the communities within the MGCS, Component 1 will finance a data collection survey and mapping exercise in Phase 1 to build a baseline of knowledge about the potentially eligible communities. This data includes, for example, housing data, socio-demographic characteristics, and crime and violence risk factors. This Phase will also finance one pilot integrated package in each of the six municipalities, to enable the Project to gain experience in implementing an integrated package of urban infrastructure and social services investments at the community level. Phase 1 will be carried out during the first 18 months of the Project, and the World Bank will perform a technical review the first six packages before their implementation. Drawing upon analyses and lessons learned from the inception phase, the Project will then finance integrated packages of urban and social services and implement them through a community mobilization process. A. Project Components 22. The proposed Project will finance three Components, to be implemented over six years. Component 1 – Integrated Package of Small-Scale Urban Infrastructure and Violence Prevention Interventions (US$36.1 million): 20 Guatemala has a well-established structure for citizen participation in local government decision-making and development planning: its system of Development Councils (COCODES) and Municipal Development Councils (Consejos Municipales de Desarrollo, COMUDES). 6 23. This Component will finance the identification, preparation and execution of integrated packages of small-scale infrastructure and crime and violence prevention activities.21 This includes (a) carrying out of technical assistance, capacity building and community mobilization activities to support the identification and preparation of subprojects in selected communities; (b) carrying out of small-scale infrastructure investments and/or prevention activities (Subprojects) in the territory of the urban or peri-urban (mixto) selected communities. 24. Communities in which the integrated packages will be implemented will be identified based on calls for proposals. This will start with the inception phase consisting in the identification and design of the first six integrated packages mentioned in the previous section, and continue into the main implementation phase, until all Component resources have been allocated. The communities where the six sub-projects will be implemented during the inception phase will be defined based on the prioritization criteria agreed between the Project Implementation Unit (PIU) within the Social Solidarity Fund (Fondo Social de Solidaridad, FSS), MGCS, MINGOB, and the World Bank. During the main implementation phase, the Project will support a demand-driven approach whereby eligible communities will present proposals for participation in the Project. 25. Eligible communities must: (a) be primarily urban or peri-urban with high population density;22 (b) have a functioning COCODES; and (c) be located on either public land, land demonstrably owned by that community, or land that is in the process of becoming regularized. The Project will not fund investments on illegally occupied land that is privately owned, or investments that fall under legal restrictions with respect to public investment in the respective area.23 After a shortlist of eligible communities has been identified, those eligible communities will be invited to present proposals through their respective COCODES. Communities will benefit from information sessions on the preparation of these proposals as well as for identification of their local infrastructure needs, the main drivers of risk for crime and violence, and community priorities. Each community will prepare a proposal for participation in the Project that should provide evidence of effective community organization and a preliminary identification of needs. 26. Submitted proposals will be reviewed by an Evaluation Committee, including representatives of the PIU, MGCS, MINGOB and the planning directors of the six municipalities. Various rounds of proposal evaluation may take place over the course of the Project. The composition of the Evaluation Committee and processes for selection of proposals for financing are described in the Operations Manual (OM). In addition to the quantitative criteria, the Evaluation Committee will conduct field assessments and focus interventions on sub-neighborhoods where poverty, poor services, and high risk for crime and violence are concentrated. Selection criteria will include, among others, total expected beneficiaries; 21 For a list of possible interventions, please see Annex 2. 22 To be defined on the basis of the survey results. 23 Specifically, the investments financed under the integrated packages will have to comply with applicable national legislation regulating public investment in areas exposed to natural disasters such as Governmental Agreement 179- 2001, which identified high risk areas in the Amatitlàn, Villalobos and Michatoya basins. 7 percentage of the community without access to public services, including piped water, sanitation, solid waste collection, public lighting, public recreation spaces and/or community centers; and percentage of the community characterized by known risk factors for crime and violence, such as single-parent households, unemployed dropout youths, homicide rate, and rate of physical assaults. 27. Following the selection of proposals to be financed, a process of prioritization of interventions will take place in each selected community. Under the guidance of the VMP of MINGOB and with the participation of the MGCS and participating municipalities, the PIU will coordinate the application of the Community-based Violence Prevention Methodology adapted for the Project for the identification and prioritization of urban infrastructure and crime and violence prevention interventions to be financed under each integrated package. Under this Component, the Project will finance expenses related to the VMP’s support to the application of this methodology in the selected communities, including: (a) providing guidance and training tools for the application of the community-based model for violence prevention, including focus groups and exploratory walks; (b) developing diagnostic and participatory planning tools to identify violence prevention interventions to be included as part of the integrated packages; (c) providing equipment and technical assistance to the VMP to enhance coordination with local stakeholders; and (d) reproducing and disseminating educational and communications materials related to the strategic pillars of the NCVP Policy, including the prevention of armed violence, violence against women, children, and youth, and road violence and accidents. 28. Within each round, the works identified by the selected communities will be packaged and procured through a small number of contracts to simplify implementation, which will be carried out with community supervision and monitoring. Social and capacity building interventions will be provided in coordination with the infrastructure works and other agencies and/or ministries. Each package is expected to cost between US$1 million and US$1.2 million, including design and supervision. 29. Component 1 may also finance the acquisition of land and provision of compensation as needed (including cash compensation and other assistance paid for involuntary resettlement) related to the implementation of the relevant resettlement plans under the Project’s Resettlement Policy Framework (RPF). The request to finance land expenditures and resettlement compensation with Loan proceeds was approved by the World Bank in April 2014. Component 2 – Technical Assistance for Capacity Building (US$4.3 million): 30. This Component seeks to strengthen the institutional capacity of MINGOB, CIV- FSS, the MGCS, and participating municipalities (through MGCS). It will do so through:  Monitoring and evaluation (M&E), including a baseline survey, community mapping, victimization surveys, and data collection. This Component will support the collection of baseline, mid-term and completion, impact tracking and assessment data as well as an initial baseline survey and community mapping for the Project. In addition, this Component will support the implementation of a victimization and safety perception survey in a representative sample of households in selected communities. 8  Technical assistance to strengthen transparency and community engagement. The Project will finance support to the MGCS in the use of information and communication technology systems to strengthen transparency and community engagement with respect to identification of priority areas for investment and monitoring of Project implementation.  Support to strengthen municipal cadasters. Component 2 will also finance (i) an assessment of participating municipalities’ respective cadaster systems; and (ii) design of a strategy (including an estimated budget) for the strengthening of each of said cadaster systems.  Technical assistance on territorial planning, inter-municipal coordination, and service delivery. The Project will finance support for the MGCS and participating municipalities to (i) develop a territorial coordination strategy; (ii) identify and map communities located in areas exposed to disaster risk, and develop risk mitigation strategies accordingly; and (iii) carry out studies to explore options for strengthening municipal services in participating municipalities, including solid waste collection within the MGCS.  Technical assistance and support for Crime and Violence Observatories. Finally, this Component will finance a) provision of technical assistance to MINGOB to strengthen the national crime and violence observatory, including developing a web-based system to collect data; and carrying out capacity building activities for said national crime and violence observatory’s staff to analyze and disseminate collected data; and b) provision of support to MINGOB, MGCS and participating municipalities for the design and development of municipal crime and violence observatories in each of the participating municipalities and an inter-municipal crime and violence observatory within the MGCS. Component 3 – Project Management, Monitoring and Evaluation (US$4.5 million): 31. Component 3 will provide support to the PIU for Project management, coordination and evaluation activities through, inter alia: (a) carrying out project audits; (b) conducting Project outreach activities; (c) carrying out mid-term and impact evaluation surveys in order to evaluate the Project’s impacts; (d) providing technical support on procurement, safeguards and financial management (FM) requirements, including the hiring of the PIU’s staff; and (e) financing operating costs. The Government is expected to cover the costs of staffing for key positions of the PIU. Finally, while data collection will be undertaken under Component 2, day- to-day M&E activities will be financed by Component 3. B. Project Financing 32. The proposed investment project financing would be financed by an IBRD loan in the amount of US$45 million. Table 1: Project Cost and Financing Project Components Project Cost IBRD % (US$, millions) Financing Financing 1. Integrated Package of Small-Scale Urban 36.1 36.1 100 Infrastructure and Crime and Violence Prevention Interventions 2. Technical Assistance for Capacity Building 4.3 4.3 100 9 3. Project Management, Monitoring and Evaluation 4.5 4.5 100 Total Costs 44. 9 44.9 100 Front end Fees 0.1 0.1 100 Total Financing Required 45.0 45.0 100 C. Lessons Learned and Reflected in the Project Design 33. The World Bank has a history of involvement in urban slum upgrading projects and violence prevention. This Project’s design builds on prior research and lessons learned, which have collectively demonstrated that a community’s quality of life can be improved through integrating both infrastructure and community capital investments. Lessons include:  Extensive and continuous community participation. World Bank experience with comparable urban upgrading programs in Jamaica, Brazil and Honduras points to the need for extensive community participation in project preparation, implementation, and monitoring as well as for the need to manage expectations related to project execution given that community-driven projects tend to have slow initial implementation periods. Strong community engagement has been found to enhance community readiness and post-project sustainability and reduce the risks of violence in vulnerable groups. Guatemala has established structures for community participation to facilitate identification of community needs.  Transparent processes for determining community eligibility and selection. Eligibility criteria and selection criteria are outlined in the OM and will be made widely available, including through outreach by the MGCS. The original idea was to prescreen and/or preselect communities to receive interventions using eligibility criteria to measure poverty levels, access to services, and indicators of crime and violence. However, reliable quantitative data about population characteristics, poverty, and access to services and crime and violence is limited. Thus the Project will carry out a pre-implementation community survey and mapping exercise to identify eligible communities based on agreed-upon criteria.  Rigorous M&E. Given lack of data, the Project will conduct baseline, mid-term, and completion assessments of selected and control communities to measure results. Strong baseline data are critical for the eligibility and selection processes, as well as for overall monitoring of progress. As such, the Project has been designed to dedicate the first 12–18 months to robust data collection.  Integrated and evidence-based approaches. Packages of interventions to simultaneously address multiple risk factors of violence have shown positive results in violence reduction. The adaptation and implementation of rigorously evaluated programs, along with other promising and innovative approaches, can also yield significant positive results. IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 34. The proposed Project will be implemented by the Ministry of Communications, Infrastructure and Housing (Ministerio de Comunicaciones, Infraestructura y Vivienda, CIV), through the FSS in close coordination with the MGCS and MINGOB. Through a PIU 10 that will be established no later than three months after effectiveness, the FSS will be responsible for all aspects of implementation, including procurement, disbursement, accounting and financial reporting, safeguards, auditing, and M&E. A Technical Committee with representation from the FSS, MGCS, and MINGOB will provide technical oversight and validate key decisions related to the selection of communities and approval of integrated packages. The MGCS will coordinate implementation with participating municipalities while MINGOB will provide technical support for the participatory diagnostics. Details on the implementation arrangements are included in Annex 3. 35. Although FSS does not have experience managing World Bank-financed projects, it does have experience executing urban infrastructure improvement projects, including those financed by multilateral organizations.24 The FSS was established in 2009 through Governmental Decree (Acuerdo Gubernativo) 71-2009 as an executing agency within CIV to undertake programs, projects and works under CIV’s mandate. The FSS will hire a technical PIU team acceptable to the World Bank, which will include a PIU coordinator, an infrastructure and environmental management coordinator, a M&E specialist, an environmental specialist, a social specialist, a procurement specialist and a FM specialist, who will have signing authority (“cuentadancia”) to facilitate timely implementation. Until the PIU is legally established, FSS will designate four line staff with signing authority, who on a transition basis will be responsible for initial technical and administrative processes to avoid delays in implementation. The FSS may also make any necessary temporary appointments prior to Loan effectiveness. 36. While the PIU will be responsible for overall Project management, the MGCS, MINGOB, and the six participating municipalities, will be the key implementation actors. Implementation of Component 1 will require close coordination between the above-mentioned institutions to ensure that implementation is carried out in accordance with the OM. The role of MINGOB is to provide technical support and guidance to the implementation of the Community- based Violence Prevention Methodology in the selected communities. The MGCS will coordinate (a) determination of eligibility through community eligibility and selection processes; (b) formulation of proposals by the eligible communities; (c) prioritization of interventions; and (d) implementation of the integrated packages. Coordination between MINGOB and the MGCS will be facilitated by the recruitment of three liaison officers funded under Component 3 to be located in the offices of MINGOB (one) and MGCS (two) and reporting to the relevant PIU coordinators. The OM details the roles and responsibilities of the various actors. B. Results Monitoring and Evaluation 37. The PIU will be responsible for M&E. The PIU will include an M&E specialist, who will be responsible for consolidating all reports and providing information on implementation progress, including qualitative and quantitative information on the execution of selected interventions, procurement and contractual decisions, accounting and financial recording, progress towards outcomes, safeguards management, outputs and monitoring of indicators, as 24 The FSS recently executed the Inter-American Development Bank-financed Program Against Urban Poverty which supported improvements in urban infrastructure and delivery of social services in selected settlements in the GCMA. 11 well as other operational and administrative matters. Component 2 will finance the initial data collection and community mapping, as well as targeted M&E studies of selected indicators for eligible communities at mid-term and completion. Component 2 will also support the implementation of a victimization and safety perception survey in a representative sample of households in eligible communities. Component 1 will finance community-level victimization surveys in the selected urban communities (one at the beginning of the community mobilization process, one at mid-term, and one at the end of the intervention in each community). The Project’s results framework will be updated during implementation based on the baseline survey and the outcome of the community-driven identification of interventions. C. Sustainability 38. Project design focuses on establishing key building blocks to ensure sustainability . These include building technical capacity of key partner institutions, such as the PIU, MGCS, and MINGOB, through provision of technical training and support to the PIU and MGCS. The integrated Crime and Violence Prevention Information System to be funded under Component 2 will establish information management systems and inter-governmental agency coordinating mechanisms with respect to local data. Because low municipal fiscal capacity is a typical challenge that urban upgrading programs face, Component 2 will provide support to municipalities to identify opportunities to strengthen the completeness and reliability of their respective cadasters to enable municipalities to improve local revenue collection and thereby have more resources to pay for ongoing maintenance and operations. Lastly, working within the existing COCODES structure and fostering citizen engagement, the Project is designed to maximize community commitment and buy-in, increasing the probability that infrastructure upgrades will be maintained over time. For example, when installing solid waste containers, the Project will educate local communities about the need for community maintenance. 39. Climate change considerations. Vulnerability to disaster risk is one of the key challenges of the poor urban neighborhoods that will benefit from the Project, and climate change is increasing the Hazard risk related to extreme weather events such as floods and landslides. Disaster risk reduction investments such as drainage and slope stabilization works are part of the menu of investments that can be included in the integrated packages of small works under Component 1. The specific content of each integrated package will be determined during Project implementation, however, it is expected that the Project’s climate change adaptation co- benefits related to the carrying out of drainage and slope stabilization investments in the selected poor urban neighborhoods will represent 10% of the Project amount. V. KEY RISKS A. Overall Risk Rating and Explanation of Key Risks 40. The overall implementation risk is substantial due to the substantial fiduciary and high Political and Governance and Institutional Capacity for Implementation Risks. Successive Guatemalan administrations have been characterized by low levels of transparency, accountability and participation, and persistent corruption cases, hindering the country’s development. With respect to institutional and fiduciary risk, the FSS has no prior experience in 12 the execution of World Bank-financed Projects, and coordination with the MGCS and MINGOB and other institutions may prove challenging. To mitigate this risk, the FSS has committed to hire a technical PIU team acceptable to the World Bank and has agreed on a Fiduciary Action Plan (FAP) to build operational capacity and mitigate fiduciary risks, including transparency- related activities and complaints mechanisms. The World Bank will work closely with the PIU to ensure that it builds robust fiduciary and safeguards management processes, and provide technical assistance and training as needed. Moreover, the Project’s OM details the relationship, roles and responsibilities of all actors as well as fiduciary processes. 41. Technical design, environmental and social and stakeholder risks are considered Substantial. The Project is intervening in areas characterized by high levels of crime and violence, low levels of social cohesion and organization, high levels of vulnerability to natural disasters, and limited access to basic social services. Risks include intra and intercommunity conflict over access to Project resources, and disruption of Project activities due to outbreaks of crime and violence, or natural disasters. The Project also faces the challenge of lack of data about communities within the MGCS and that specific communities that will receive the infrastructure and crime and violence prevention interventions cannot be preselected before effectiveness. Given that this is a new Project and the MGCS is a relatively new institution, there is also a risk that communities become concerned about their inclusion/exclusion from participating in the process of community selection for funding. The Project has been designed to mitigate technical and stakeholder risks, with an emphasis on strengthening municipal capacity through the activities proposed under Component 2, and the promotion of strong social engagement in the identification and design of the community-based crime prevention strategies under Component 1. VI. APPRAISAL SUMMARY A. Economic and Financial Analysis 42. Given the demand-driven nature of the proposed Project, actual costs and numbers of beneficiaries are not yet known, and therefore a precise economic rate of return could not be estimated. Instead, two levels of analyses were conducted: a novel approach called ‘Robust Decision-Making’25 to estimate benefit-cost ratios for the proposed water and sanitation investments under uncertainties about implementation; and, in parallel, an economic cost-benefit analysis was calculated through hedonic pricing. Both confirmed that the proposed interventions would have positive outcomes. A literature review of similar water and sanitation investments confirmed that the net economic benefits of improved water and sanitation investments have been validated as positive. This desk review cited a 2012 World Health Organization report26 that calculated that every dollar invested in improved sanitation yields an average US$5.5 return globally. Further, through the ‘Robust Decision-Making’ methodology, the analysis used 100 25 Robust Decision-Making is an analytic framework that helps identify potential robust strategies, identify those strategies’ vulnerabilities and evaluate trade-offs among them. It is typically used to aide decision-makers in policy areas of "deep uncertainty" in which relationships among actions, consequences and probabilities are unknown. 26 World Health Organization, and UN Water. (2012). UN-Water Global Analysis and Assessment of Sanitation and Drinking Water. The Challenge of Extending and Sustaining Services. Geneva 13 model simulations over 11 uncertain variables, and determined that such a proposed intervention is economically sound as long as costs are less than US$2,000/household, suggesting that water and sanitation investments envisaged in the proposed Project are robust. 43. An economic cost-benefit analysis was estimated through hedonic pricing, a common method used in urban upgrading projects. This analysis estimated the economic value of three types of small-scale infrastructure works, namely water, sanitation, and street lighting. The analysis sought to estimate housing price increases resulting from these types of investments and found the results to be positive (i.e. housing prices increase as a result of investments). The analysis also confirmed that projects that address the perception of security (for example, improved street lighting) improve the value of people’s properties, reflecting a better quality of life. The analysis is presented in further details in Annex 6. B. Technical 44. The proposed Project relies on approaches and methodologies appropriate for the Guatemalan context and is based on best practices and lessons learned regarding urban community upgrading and crime and violence prevention. Specifically, the design of the Proposed Project benefitted from the experience of the Barrios de Verdad program in Bolivia supported by the World Bank through the Bolivia Urban Infrastructure Project (P083979). In addition, capacity building and technical assistance activities proposed under Component 2 have been designed to directly support the implementation of the Project. C. Financial Management 45. FSS will be responsible for Financial Management (FM) for the proposed Project. FM tasks include budget formulation and monitoring, cash flow management, accounting, financial reporting, internal controls and external audits. FSS will also be responsible for implementing the governance and transparency aspects of the Project. To properly support FM tasks, the PIU will include a qualified FM team that will coordinate with FSS’ Coordinación Financiera and CIV’s Administrative and Financial Unit, as needed. 46. While FSS is the responsible implementing entity, Project implementation requires the FSS to interact with the MGCS, the main technical counterpart, and MINGOB. Moreover, although the FSS has the basic FM arrangements in place and extensive experience in the implementation of infrastructure Projects, it is not familiar with World Bank requirements, and its internal administrative and finance arrangements may become cumbersome. As a result, a FAP was agreed upon to build the PIU’s operational capacity and mitigate fiduciary risks, including transparency-related activities and complaints mechanisms. More details are included in Annex 3. D. Procurement 47. Procurement activities will be carried out by the PIU. An assessment of the PIU found certain deficiencies in terms of weaknesses related to available procurement staff and resources to deal with the large number of contracts required by the Project. Key issues and risks 14 include: (a) PIU implementation capacity given the expected high workload; (b) poor coordination of activities between different institutions involved in the Project; (c) Contraloria’s interventions before signature of contracts, which may cause bottlenecks; (d) local procurement regulations that include practices that are not acceptable to the World Bank; and (e) high country procurement risk. 48. A series of mitigation and corrective measures have been agreed upon. These include: (a) recruitment of experienced procurement staff acceptable to the World Bank; (b) recruitment of an international procurement specialist (full or part time, as needed) acceptable to the World Bank, to coach and support the procurement staff of the PIU and contribute to quality control; (c) implementation of the Project in accordance with an OM acceptable to the World Bank; (d) carrying out of national open competitive procurement using bidding documents agreed upon with the World Bank and included in the OM; and (e) use of Guatecompras, a national contracting and procurement information system, in accordance with the OM and in alignment with the World Bank’s Procurement Regulations for Borrowers under Investment Project Financing (July 2016). E. Social (including Safeguards) 49. The proposed Project is expected to have a beneficial social impact. Integrating basic infrastructure investments with capacity building and violence prevention measures in poor urban communities that are highly vulnerable to crime and natural disasters has the potential to transform quality of life for all residents. The resulting benefits include improvements in citizen security, connectivity and mobility, environment conditions, access to basic services and recreational facilities, and economic opportunities. These impacts will be further enhanced through use of citizen engagement and participation methodologies, the COCODES and the Violence Prevention Commissions. The Results Framework includes an indicator on community empowerment and the Project will explore the use of information and communication technologies to support citizen engagement (for example to prioritize investments and collect feedback on the quality of investments). 50. Gender-sensitive tools will be used during the participatory planning process to ensure that the voices of both men and women influence Project selection. The Project will support public awareness campaigns on gender equity issues, training to address gender differentials in high rates of school drop-outs, and community-based training on gender-based violence. Where feasible, results indicators have been disaggregated by gender. 51. The main adverse social impact anticipated is related to limited requirements for resettlement, including the purchase or donation of land, associated with the construction of public infrastructure in the selected neighborhoods. The zones of intervention are characterized by densely populated informal settlements, with potentially structures occupying the right of way to be used for linear infrastructure. 52. The proposed Project will support a range of integrated packages, some of which may require minor resettlement impacts. Although integrated packages must take place on 15 public land, or land demonstrably owned by the community, the World Bank's Policy on Involuntary Resettlement (OP/BP 4.12) is triggered given that implementation will take place in densely populated settlements where residential structures may have encroached on public land or the right of way. Therefore, an Environmental and Social Management Framework (ESMF) was prepared by the Borrower and approved by the Bank, which includes the RPF,27 and was consulted upon during a stakeholder workshop on April 30, 2014, attended by 150 people representing the COCODES of the six municipalities and civil society. Because the specific location of investments is not yet known, the ESMF also includes a Resettlement Policy Framework, that was reviewed and re-disclosed on the Government’s (May 6, 2016) and the World Bank’s (May 10, 2016) websites. 53. The Indigenous Peoples (OP/BP 4.10) policy is also triggered. Although the zones of intervention are highly urbanized, there is one indigenous community in Mixco. Because the exact location of investments is not yet known, the ESMF includes an Indigenous Peoples Planning Framework (IPPF)28, which was prepared by the Borrower, approved by the Bank, disclosed and consulted upon during a stakeholder workshop on April 30, 2014. As part of the ESMF, the IPPF was reviewed during appraisal and re-disclosed on the Government’s (May 6, 2016) and the World Bank’s (May 10, 2016) websites. 54. Public consultations were conducted on all the Project’s safeguards instruments29 with representatives of the six MCGS municipalities, and local civil society and community-based organizations on April 30, 2014. Over 150 people participated in this meeting. Minutes of stakeholder meetings, including measures proposed to address grievances, are included as an Annex to the EMG. During the consultation workshop, participants asked questions about the process of eligibility and selection of communities and sub-projects, as well as the timing of implementation. No comments/questions that required changes in safeguards documents were made. F. Environment Safeguards 55. The proposed Project is classified as Category B in accordance with Environmental Assessment Policy (OP/BP 4.01). Given the technical characteristics of the works proposed, the communities’ urban location, and the magnitude of works, no significant environmental negative impacts are foreseen. The proposed work are expected to have a positive environmental impact through the improvement of basic services including water supply, sanitation, drainage, and road paving. Limited adverse impacts can be expected from the construction and operation of the proposed works. Among other activities, the Project will finance improvement or rehabilitation of local roads, provision of potable water, drainage works, public street lighting, construction of local recreational parks, school and community centers, and slope stabilization works. In the case 27 The Project’s RPF is the the Borrower’s Resettlement and Land Acquisition Guidelines ( Guía de Reasentamiento y Adquisiciones de Tierras). These Guidelines specify how the Project will comply with the World Bank’s Policy on Involuntary Resettlement, and the steps to be taken to prepare site specific Resettlement Action Plans. 28 The Projects IPPF is the Borrower’s Participatory Planning for Vulnerable and Indigenous Communities Guidelines (PPVICG) included in the ESMF. 29 Including the ESMF, and its three annexes : (i) Environmental Management Guidelines (EMF), Resettlement Policy Framework (RPF), and Indigenous Peoples Planning Framework (IPPF). 16 of local roads, for example, rehabilitation, improvement, and maintenance activities will be completed on existing roads and will not change the character of the roadways. Improvements to potable water and drainage systems will be small-scale, and public lighting improvements are expected to be made in existing right-of-ways with minimal impact to existing residences and businesses. Because the specific location of investments is not yet known, the ESMF includes the Environmental Management Guidelines (EMG). All integrated packages will require an Environmental Management Plan or, in the case of integrated packages with low environmental risk, the application of the Good Environmental and Social Practices Guidelines developed by the Ministry of Environment and Natural Resources (Ministerio de Ambiente y Recursos Naturales, MARN) and the International Union for Conservation of Nature. The EMG was disclosed on April 30, 2014 both through a public consultation meeting and on the websites of the MGCS municipalities, and was re-disclosed on the Government’s (May 6, 2016) and the World Bank’s website on May 10, 2016. 56. The Physical Cultural Resources (OP/BP 4.11) policy is triggered because of the potential impact on cultural resources during construction. The ESMF includes Chance Find Procedures and measures to screen for and manage potential impacts on cultural heritage or property that could be affected by neighborhood development plans. G. World Bank Grievance Redress 57. Communities and individuals who believe that they are adversely affected by a World Bank supported Project may submit complaints to existing Project-level grievance redress mechanisms or the World Bank’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address Project-related concerns. Project affected communities and individuals may submit their complaint to the World Bank’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of World Bank non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and World Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate GRS, please visit http://www.worldbank.org/GRS. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. 17 Annex 1: Results Framework and Monitoring GUATEMALA: Urban Infrastructure and Violence Prevention Project (P143495) Results Framework Project Development Objective (PDO): The PDO is to increase access to basic urban infrastructure and services and mitigate key risk factors of crime and violence in selected communities. PDO Level Indicators Cumulative Target Values Data Source/ Responsibility Description (indicator definition Unit of End Target Indicator Name Core Baseline YR1 YR2 YR3 YR4 YR5 Frequency Methodology for Data etc.) Measure (YR6) Collection Number of people in Number of sanitation urban areas provided connections financed by the with access to Project multiplied by the Number 0 0 3240 9720 9720 12960 16200 Annually Project reports FSS/MGCS Improved Sanitation average household size (4.5 under the Project persons) at the Department of Guatemala City Number of people in Number of water connections urban areas provided financed by the Project with access to multiplied by the average Improved Water Number 0 0 3240 6804 6804 9072 11340 Annually Project reports FSS/MGCS household size (4.5 persons) at Sources under the the Department of Guatemala Project City Direct Project Number of residents in selected beneficiaries of urban communities where the improved urban integrated urban infrastructure services in selected 6480 19440 19440 25920 32400 improvements have been Number 0 0 Annually Project reports FSS/ MGCS urban (3240) (9720) (9720) (12960) (16200) completed (disaggregated by communities (of which gender) female) Increase in the At the start and at Percentage of residents in perception of safety by +10% the end of each Community MGCS/ selected urban communities Percentage tbd - - - residents of selected variation community level Survey MINGOB who perceive improved levels urban communities engagement of safety 18 Intermediate Results Indicators Cumulative Target Values Data Responsibility Description (indicator Unit of Source/Metho for Data definition and so on) Indicator Name Core Baseline End Target Frequency Measure YR1 YR2 YR3 YR4 dology Collection YR5 (YR6) Intermediate Results Indicators - Component 1 Number of safe public spaces constructed or rehabilitated Number of additional through the Project (including safe public spaces schools, community centers, Number 0 tbd tbd tbd tbd tbd tbd Annually Project reports FSS/ MGCS constructed or parks, etc.) following the rehabilitated Crime Prevention Through Environmental Design methodology Kilometers of paved road surface rehabilitated and Length of additional maintained through the paved road surface Km 0 tbd tbd tbd tbd tbd tbd Annually Project reports FSS/ MGCS Project. Number of rehabilitated and beneficiaries will also be maintained estimated Positive change in Percentage of residents in attitude towards selected urban communities gender-based violence showing lower tolerance At the start and at in selected urban towards gender-based violence the end of each Community MGCS / communities: Percentage tbd +15% community level survey MINGOB percentage of residents engagement showing lower tolerance towards gender-based violence Increased positive use Percentage of young males of free time: percentage At the start and at and females (ages 12-25) who of young males and the end of each Community MGCS/ report being actively engaged Percentage tbd +15% females who report community level survey MINGOB in community activities (as being actively engaged engagement opposed to being idle) in community activities Number of parents, Number of parents, teachers, Project reports teachers, and students and students who participated who participated in Number 0 30 60 90 120 150 180 Annually FSS/ MGCS in school violence prevention School school violence initiatives registers prevention initiatives 19 Cumulative Target Values Data Responsibility Description (indicator Unit of Source/Metho for Data definition and so on) Indicator Name Core Baseline End Target Frequency Measure YR1 YR2 YR3 YR4 dology Collection YR5 (YR6) Intermediate Results Indicators - Component 2 Preventi Violence Observatory for the Two Agreem on MGCS is created and preventio ent of strategy functioning, in coordination n the underta with the Municipalities of the strategies Project reports MGCS Violence ken by MGCS Functioning Violence Violence undertake from the PIU / for Observat MGCS Observatory for the Observator - n by the Annually Violence FSS/ MGCS creation ory based MGCS y MGCS Observatory of creation on based on data Observa Violenc Crime tory e Observat Observa ory tory Violence Observatory for each Functioning Crime and FSS/ participating municipality is Violence Observatory Number 0 0 1 3 5 6 6 Annually Project reports MGCS created and functioning, in at the municipal Level coordination with the MGCS and National Observatories Number of MGCS MGCS staff, municipal staff, municipal officials and community FSS/ officials and representatives benefitting Number 0 60 120 135 150 150 150 Annually Project reports MGCS community from training/capacity representatives building. Information will be trained disaggregated by gender 20 Annex 2: Detailed Project Description GUATEMALA: Urban Infrastructure and Violence Prevention Project (P143495) 1. The proposed Project aims to support increased access to basic urban infrastructure and services that will contribute to improvements in quality of life, and mitigation of risk factors for crime and violence in precarious urban areas within the MGCS municipalities. The Project also intends to contribute to the technical and institutional capacity of MGCS municipalities to engage their communities in participatory decision-making related to needed community investments, engage in urban planning, and generate additional revenue from more complete and current municipal cadasters. 2. Legally established in May 2012, the MGCS is an autonomous agency that includes six municipalities in the south of the Department of Guatemala, namely the Municipalities of Amatitlán, Mixco, San Miguel Petapa, Santa Catarina Pinula, Villa Canales and Villa Nueva. All of these municipalities are located on the urban periphery, and serve as dormitory communities for workers commuting into the capital city. The MGCS was created for the broad purpose of creating efficiencies in implementing local economic development initiatives and/or infrastructure projects with a supra-municipal scope. While the municipalities vary in population from about 85,000 to 500,000 inhabitants, they share similar challenges of: (a) growing population of informal settlements; (b) low coverage of basic services (sanitation coverage varies between 47 percent and 91 percent, and only 35 percent of total waste is systematically collected); (c) pockets of each municipalities living in at-risk areas (on steep slopes) prone to natural disasters; (d) high levels of congestion on the main roads connecting the neighborhoods to downtown Guatemala City; and (e) higher than average criminal activity.30 Table A.2.1. Municipalities of the MGCS % of Homicide % % of Population Rates per Populat Population with Access to 100,000 Number of Population ion Area with Access to Municipality Improved Inhabitants Communities (2010) Below (km2) Improved sources of (2013) Poverty Sanitation Drinking Line Systems Water Amatitlán 50 105,738 18% 204 92.5 78.6 66 Mixco 701 474,421 9% 132 84.9 90.6 42 San Miguel Petapa 146 156,790 12% 30 91.1 85.8 37 Santa Catarina Pinula 59 85,290 13% 48 78.0 61.7 63 Villa Canales 92 139,449 23% 353 80.2 47.2 63 Villa Nueva 524 501,395 13% 114 82.0 81.7 55 TOTAL/Average 1572 1,463,083 15% 881 84.8% 74.3% 51 Sources: Diagnóstico Territorial: Región Central, SEGEPLAN (2012); MARN (2010) 3. Table A.2.1 provides a snapshot of the six MGCS municipalities, which together comprise about 48 percent of the population of the GCMA. The aggregated numbers by 30 SEGEPLAN (Secretaría de Planificación y Planeación de la Presidencia ). 2012. Diagnóstico Territorial Tomo 1: Región Central – Una oportunidad para la competitividad y el desarrollo del país. 21 municipality obscure the existence of pockets of informal communities characterized by deep levels of poverty and high social and economic vulnerability. Through the baseline mapping survey to occur in the initial phase, this Project will identify and, once selected, focus resources on these most vulnerable communities. 4. An overarching premise for the Project is that social inclusion of poor and vulnerable urban communities requires a multi-pronged strategy. First, the Project should engage community residents through a well-crafted community mobilization process that builds on the institutional foundations provided by the existing COCODES. Second, the Project will contribute to the improvement of basic living conditions in these communities through the provision of infrastructure and services that: (a) satisfy basic needs (for example, for potable water, sanitation, and paved roads); (b) enable provision of social and economic services to vulnerable groups (for example, community centers); and/or (c) reduce risks for crime and violence and natural hazards through safer and more resilient built environments. Third, the Project will provide social and economic opportunities for individuals and families to reduce their vulnerability to crime and violence, natural disasters, and poverty. 5. The proposed Project will be implemented in two phases, over a six-year period. An initial or inception phase will focus on implementing a pilot integrated package in each municipality and carrying out a comprehensive data gathering exercise that will enhance the ability of the FSS and MGCS to carry out the Project. This phase is expected to be carried out during the first 18 months. The second or main implementation phase will finance the additional integrated packages through a demand-driven approach with significant community participation, as described below. 6. Inception phase. Given the lack of reliable baseline data on the general characteristics of the communities within the MGCS, the Project will finance a data collection survey and mapping exercise to build a baseline of knowledge about the potentially eligible communities (for example, housing data, sociodemographic characteristics, and crime and violence risk factors). The survey and community mapping will build on the work of the recent Multi-donor Trust Fund for Sustainable Urban Development, which financed the development of a Geographic Information System cartography for the GCMA. This phase will also finance one pilot integrated package in each municipality, to enable the Project to gain experience in implementing an integrated package of urban infrastructure and social services investments at community level. This phase will be carried out during the first 18 months of the Project, and the World Bank will review the first six packages before their implementation. 7. Main implementation phase. Drawing upon analyses and lessons learned from the inception phase, the Project will then finance integrated packages of urban and social services defined and implemented through a community mobilization process. This has been the trademark of successful initiatives such as the Urbanismo Social that transformed the most violent and marginalized communities in Medellin, Colombia. Project Components Component 1 – Integrated Package of Small-Scale Urban Infrastructure and Violence Prevention Interventions (US$36.1 million): 22 8. This Component will finance the identification, preparation and execution of integrated packages of small-scale infrastructure and crime and violence prevention activities. This includes (a) carrying out of technical assistance, capacity building and community mobilization activities to support the identification and preparation of subprojects in selected communities; (b) carrying out of small-scale infrastructure investments and/or prevention activities (Subprojects) in the territory of the urban or peri-urban (mixto) selected communities. Project funds will be distributed between participating municipalities as follows: 83 percent will be allocated equally to each municipality, 10 percent based on population, and 7 percent based on number of communities. The communities where the six integrated packages will be implemented during the inception phase will be defined on the basis of prioritization criteria agreed between the PIU within the FSS, MGCS, MINGOB, and agreeable to the World Bank. During the main implementation phase, the Project will support a demand-driven approach whereby eligible communities will present proposals for participation in the Project. 9. For communities to be eligible, they must meet certain criteria. These include that they must: (a) be primarily urban or peri-urban with high population density; (b) have a functioning COCODES; and (c) be located on either public land, land demonstrably owned by that community, or land that is in the process of becoming regularized. The Project will not fund investments on illegally occupied land that is privately owned. 10. After a shortlist of eligible communities has been identified, eligible communities will participate in a community-driven diagnosis. Communities will be invited to participate in a community-driven diagnosis to identify their local infrastructure needs, the main drivers of risk for crime and violence, and priorities. The MGCS, in coordination with MINGOB and the six municipalities, will support the respective COCODES through this process, and ensure that each community’s plan is aligned with municipal and regional development programs. 11. Each community will prepare a proposal of an integrated package for financing. The proposal should provide evidence of effective community organization and preliminary identification of needs (including in-kind contributions from the community). The menu of possible interventions includes, among others: a) widening, rehabilitation and paving of existing roads and pedestrian walks; b) construction or rehabilitation of storm water drainage; c) installation of water supply and sanitation household connections; d) construction of primary waste water treatment. The Project will not finance treatment plants; e) installation of electricity connections and public lighting. The Project will seek environmentally and financially sustainable solutions, and will pay particular attention to spaces used by women where the risk of assault is high; f) construction of small-scale stabilization walls in areas vulnerable to natural disasters; 23 g) rehabilitation (including reforestation) of public spaces and other physical improvements to the community that enhance aesthetic appeal through the incorporation of Crime Prevention through Environmental Design principles;31 h) construction of multi-purpose community centers (where programs for conflict mediation and youth skills development, for example, could take place); i) installation of containers for solid waste management; j) beautification of selected communities through: (i) implementation of cleanup programs; and (ii) strengthening of public awareness programs to improve cleanliness and infrastructure maintenance of selected communities; k) carrying out of public awareness and education campaigns to promote attitudes and norms that foster peaceful coexistence, conflict resolution and gender equality; l) conducting job preparation training aimed at improving job readiness skills, particularly for youth; m) carrying out of gender-sensitive training to address high rates of school dropouts, such as after school and recreational activities, tutoring, and mentorships; n) conducting after-school programs that combine mentoring, recreational, and cultural activities (for example, youth leadership, music and art programs, skills development courses, and tutoring services); o) conducting capacity-building training in schools for the purpose of school violence prevention, such as conflict resolution and mediation, and cleaning school public spaces; p) training community-based networks on domestic violence prevention; and q) training parents on parenting and effective communication, and teaching strategies for consistent discipline for the purpose of preventing child abuse. 12. Primary waste water treatment will be eligible for financing under Component 1 subject to review and approval by the World Bank on a case-by-case basis. The World Bank’s review will take into consideration the technical, topographic and financial specifications of the integrated package as well as the population density and the demographic characteristics of the communities. In particular, the World Bank will review the integrated packages to ensure there is no risk of contamination of sources of drinking water, population densities do not exceed the maximum recommended, and the integrated packages do not increase risks to natural disasters. The Project will not finance sewerage treatment plants. 13. Submitted proposals will be reviewed by an Evaluation Committee, including representatives of the PIU, MGCS, MINGOB and the six municipalities. As many as four semi-annual rounds of proposal evaluation may take place over the course of the Project. The composition of the Evaluation Committee and processes for selection and endorsement of proposals for financing are described in the OM. In addition to quantitative criteria, the Evaluation Committee will conduct field assessments and focus interventions on sub- neighborhoods where poverty, poor services, and high risk for crime and violence are concentrated. Selection criteria will include, inter alia, total expected beneficiaries; percentage of the community without access to public services, including piped water, sanitation, solid waste 31 Crime Prevention through Environmental Design is a multi-disciplinary approach to deter criminal behavior through environment design. The goal of this approach is to prevent crime by designing a physical environment that positively influences human behavior. 24 collection, public lighting, public recreation spaces and/or community centers; and percentage of the community characterized by known risk factors for crime and violence, such as single-parent households, unemployed dropout youths, homicide rate, and rate of physical assaults. 14. Following the selection of proposals to be financed, a process of prioritization of interventions will take place in each selected community. Under the guidance of the VMP of MINGOB and with the participation of the MGCS and participating municipalities, the PIU will coordinate the application of the Community-based Violence Prevention Methodology adapted for the Project for the identification and prioritization of urban infrastructure and crime and violence prevention interventions to be financed under each integrated package. Each participating community will have to develop a crime and violence prevention plan that identifies the main risks for violence as well as vulnerable groups. The Community Violence Prevention Commissions and COCODES, based on local diagnoses elaborated in the plans, will be able to identify and select from the Project’s menu of interventions the most appropriate combination of activities to be implemented in their communities. 15. The use of information and communication technology tools will be explored to enhance citizen engagement in the prioritization process. For example, a web-based system of preference prioritization (pair-wise voting) may be customized to each of the selected communities. To overcome the challenges associated with the digital divide, outreach activities may be conducted using handheld devices to collect feedback from the population. As an option, information and communication technology tools may also be used to collect feedback from residents of selected areas on the quality of urban and social services delivered. This system enables the simultaneous implementation of targeted surveys with direct beneficiaries (for example, according to area, sector, gender), allowing for real-time data collection and analysis. The analytical tools will enable the identification of emerging trends and problems, ultimately allowing adjustments whenever appropriate. 16. Under this Component, the Project will finance expenses related to the VMP’s support to the application of the Community-based Violence Prevention Methodology in the selected communities. This includes: (a) providing guidance and training tools for the application of the community-based model for violence prevention, including focus groups and exploratory walks; (b) developing diagnostic and participatory planning tools to identify violence prevention interventions to be included as part of the integrated packages; (c) providing equipment and technical assistance to the VMP to enhance coordination with local stakeholders; and (d) reproducing and disseminating educational and communications materials related to the strategic pillars of the NVCP Policy, including the prevention of armed violence, violence against women, children, and youth, and road violence and accidents. 17. The works identified by the selected communities will be packaged and procured through a small number of contracts to simplify implementation, which will be carried out with community supervision and monitoring. Social and capacity building interventions will be provided in coordination with the infrastructure works and other agencies and/or ministries. Each package is expected to cost between US$1 million and US$1.2 million, including design and supervision. 25 18. Component 1 may also finance the acquisition of land and provision of compensation as needed (including cash compensation and other assistance paid for involuntary resettlement) related to the implementation of the relevant resettlement plans under the Project’s RPF. The request to finance land expenditures and resettlement compensation with loan proceeds of the Project was approved by the World Bank in April 2014. Component 2 – Technical Assistance for Capacity Building (US$4.3 million): 58. This Component seeks to strengthen the institutional capacity of MINGOB, CIV- FSS, the MGCS, and participating municipalities. It will do so through: a) M&E activities, including a baseline survey, community mapping, victimization surveys and data collection. This Component will support the collection of baseline, mid-term and completion, impact tracking and assessment data as well as an initial baseline survey and community mapping for the Project. This exercise will be carried out early in Project implementation (months 1-6) and to enable the MGCS to obtain the necessary information to implement the Project effectively. In addition, this Component will support the implementation of a victimization and safety perception survey in a representative sample of households in selected communities. MINGOB will coordinate with the National Institute of Statistics to apply tools developed for the national victimization survey in the MGCS and in communities selected for the Project (one at the beginning and one at closing). b) Technical assistance to strengthen transparency and community engagement. The Project will finance support to the MGCS to build its capacity in the use of information and communication technology tools to strengthen transparency of its activities and promote robust community engagement with respect to the identification of priority areas for investment and monitoring of Project implementation. Investing in this organizational capacity will be useful beyond the scope of this Project, enabling the MGCS to replicate lessons learned from this initiative in future community investments. c) Support to strengthen municipal cadasters. In general, participating municipalities will bear the responsibility for maintaining Project-funded investments after completion. However, municipalities have limited operating budgets, as they are highly dependent on central Government transfers and have low revenue collection capacity, largely because of inadequate cadastral systems. In Guatemala, property tax revenue flows to municipalities, who are wholly responsible for the administration and collection of this tax. Assuming that the fiscal transfers upon which municipalities depend remain largely constant, an option for municipalities to access additional resources will be through strengthening their respective local cadasters for the purpose of increasing revenue collection and thereby, the amount of resources available to maintain Project investments. To that end, the Project will support: (i) an assessment of participating municipalities’ respective cadaster systems to identify gaps in data collection and standardization; and (ii) design of a strategy (including an estimated budget) for the strengthening of each of said cadaster systems. Improving the cadaster will benefit participating municipalities with respect to revenue collection, land use planning capacity, and thereby strengthen the Project’s capacity for fiscal sustainability. Currently, the 26 six municipalities vary with respect to existing capacity to leverage their cadasters. Amatitlán, for example, does not have a functioning cadastral management system, satellite imaging or orthophoto with which to manage the municipal cadaster; Villa Canales has a system most recently updated with Geographic Information System data in 2006 that captures only 50 percent of the municipality; and San Miguel Petapa’s cadaster data covers only 30 percent of the municipality, and its land registry team uses spreadsheets in the absence of available satellite and a more robust data management system. Even Mixco, one of the larger and relatively more capable municipalities, reports that its cadastral database currently reflects only 60 percent of properties. The Project will leverage lessons learned from the World Bank-financed Land Administration II Adaptable Program Loan in Guatemala (P087106, approved on December 14, 2006), which has been engaged in – among other activities – building efficient, accessible cadastral services in targeted municipalities (none of which are located within the MGCS). d) Technical assistance on territorial planning, inter-municipal coordination, and service delivery. The Project will finance support for the MGCS and participating municipalities to (i) develop a territorial coordination strategy; (ii) identify and map communities located in areas exposed to disaster risk, and develop risk mitigation strategies accordingly; and (iii) carry out studies to explore options for strengthening municipal services in participating municipalities, including solid waste collection within the MGCS. Building on SEGEPLAN’s 2012 Territorial Diagnosis of the Central Region, the Project will provide support to the MGCS and participating municipalities for the development of a Territorial Coordination Strategy, including a suggested list of specific MGCS-level Projects that could be undertaken. This activity will build on the recently completed work to develop an integrated metropolitan cartography for the Department of Guatemala. The Project will also explore options to improve service delivery, including solid waste collection within the MGCS, which represents an important challenge but also a natural area for opportunity for a supra-municipal body such as the MGCS. e) Technical assistance and support for Crime and Violence Observatories. Finally, this Component will finance a) provision of technical assistance to MINGOB to strengthen the national crime and violence observatory, including: (i) developing a web-based system to collect data; and (ii) carrying out capacity building activities for said national crime and violence observatory’s staff to analyze and disseminate collected data; and b) provision of support to MINGOB, MGCS and participating municipalities for the design and development of municipal crime and violence observatories in each of the participating municipalities and an inter-municipal crime and violence observatory within the MGCS. The Project will support development of a “Crime and Violence Information System” to collect and store basic information on specific types of crimes (i.e., homicides, domestic violence, and sexual assaults)32 for the six MGCS municipalities. Data will be collected, validated, and analyzed by relevant entities of each municipality (such as hospitals and local police) and then aggregated into an integrated web-based system. This system will offer the capability of generating reports and geo-referenced maps (for example, by type of incident), and will be 32 These categories were some of the most prevalent, according to the directors of the Citizen Security Commissions, in the six municipalities. 27 coordinated with the National Violence Observatory supported by the VMP. Observatory staff will be trained in data management, analysis and preparation of periodic reports. These reports will be presented to local authorities to support the design and evaluation of prevention and crime control interventions. In addition to the municipal level Crime and Violence Observatories, the Project will support the development of an Inter-Municipal Observatory within the MGCS, and the strengthening of the National Violence Observatory. Component 3 – Project Management, Monitoring and Evaluation (US$4.5 million): 19. Component 3 will provide support to the PIU for Project management, coordination and evaluation activities. It will do so through, inter alia: (a) carrying out project audits; (b) conducting Project outreach activities; (c) carrying out mid-term and impact evaluation surveys in order to evaluate the Project’s impacts; (d) providing technical support on procurement, safeguards and financial management (FM) requirements, including the hiring of the PIU’s staff; and (e) financing operating costs. The Government will cover the costs of staffing for the following key positions of the PIU, including: the PIU coordinator, an infrastructure and environmental management coordinator, a procurement specialist and a FM specialist. Finally, while data collection will be undertaken under Component 2 as described above, day-to-day M&E activities of the PIU will be financed by Component 3. 20. This Project will be implemented in close coordination with other complementary development partner support. The PIU will coordinate implementation of the proposed Project with IDB, currently implementing a complementary US$1.2 million technical assistance to the MGCS supporting the design of infrastructure improvement interventions in selected communities. The World Bank and the MGCS will also coordinate with key donors, such as the UNDP, USAID, GIZ, and AECID, which all have ongoing activities on crime and violence prevention. Specific areas for coordination include: (a) a UNDP program to improve information systems on violence prevention, support and attention to victims of violence, and conflict resolution mechanisms at the local level; (b) USAID activities targeting youth at risk, community policing, and strengthening criminal justice institutions through citizen engagement; (c) a GIZ initiative on youth employment; and (d) an AECID program to prevent violence against women. 28 Annex 3: Implementation Arrangements GUATEMALA: Urban Infrastructure and Violence Prevention Project (P143495) I. Overview of Implementation Arrangements 1. The Project will be implemented by the CIV, through the FSS. The FSS was established in 2009 through Governmental Decree (Acuerdo Gubernativo) 71-2009 as an executing agency within CIV to undertake programs, Projects and works under CIV’s mandate. Overall, the FSS is a well-established entity with key technical and fiduciary staff and has in place the necessary basic arrangements for the implementation of infrastructure projects, including experience with other development agencies. Figure A.3.1. Overview of Implementation Arrangements Technical Committee Project specific committee with representation from the FSS, MGCS and MINGOB Role: Technical oversight and validation of community selection process and integrated packages Implementing Agency CIV through the FSS) supported by a dedicated PIU Role: Project execution including procurement, disbursement, accounting and financial reporting, safeguards, auditing, and M&E Support received: Dedicated PIU financed under Component 3. MINGOB MGCS VMP Role: Coordinate the Project implementation with the participating Role: Provide technical assistance municipalities for the development of the participatory diagnostics through Support received: Incremental operations costs under Component 1. TA the implementation of the under Component 2. Dedicated liaison officer financed under ministry’s Community-based Component 3. Violence Prevention Methodology Support received: Equipment and incremental operations costs Participating Municipalities under Component 1. TA under Six municipalities composing the MGCS Component 2. Dedicated liaison Role: Support community engagement in their respective eligible officer financed under communities. Operations and maintenance of the Component 3. Support received: Capacity building of eligible communities and integrated packages in selected communities under Component 1. TA under Component 2. 29 2. Given that FSS has no experience managing World Bank financing, it has committed to hiring a technical PIU team acceptable to the World Bank and has agreed on a FAP to build operational capacity. This is expected to help mitigate fiduciary risks, including transparency related activities and complaints mechanisms. The World Bank will work closely with the PIU to ensure that it builds robust fiduciary and safeguards management processes, and provide technical assistance and training as needed. 3. The implementation of the Project will be undertaken in coordination with three groups of institutions, which have different roles and responsibilities under the Project (Figure A.3.1). The first group is the MGCS, which comprises the municipalities of Amatitlán, Mixco, San Miguel Petapa, Santa Catarina Pinula, Villa Canales and Villa Nueva. Second includes the municipalities that comprise the MGCS. Finally, the third is MINGOB, specifically the Crime and Violence Prevention Unit of the VMP. The working relationships and roles and responsibilities of the PIU within the FSS, CIV, MGCS, the six MGCS municipalities, as well as the coordination with MINGOB are spelled out in detail in the Project’s OM. 4. The Ministry of Public Finance will sign the Project’s Loan Agreement with the World Bank for the Project to be implemented by CIV through FSS. CIV-FSS will then enter into a Subproject Agreement with the MGCS and the Participating Municipalities to ensure their participation in the Project and their commitment to operate and maintain the investments supported under the Project. In addition, CIV-FSS will enter into an Inter Institutional Agreement with the MGCS and an Inter Institutional Arrangement with MINGOB, respectively, to specify the roles and responsibilities of each institution in Project implementation. Both the Inter Institutional Agreement and the Inter Institutional Arrangement will be duly executed by the parties thereto prior to Loan effectiveness. II. Organizational Structure and Roles and Responsibilities 5. CIV will establish a PIU within FSS for the day-to-day oversight of Project implementation. Though a ministerial resolution, CIV will establish a PIU within the FSS no later than three months after effectiveness, to be responsible for all aspects of implementation, including procurement, disbursement, accounting and financial reporting, environmental and social safeguards, auditing, and M&E, coordinating as needed with FSS’ line units. The PIU’s organizational structure (Figure A.3.2) includes a PIU coordinator to oversee Project implementation, including: (a) technical Project management (including design and execution of the Project); (b) fiduciary aspects of the Project (including budgeting, financial management, accounting and procurement); and (c) social and environmental management of the Project (including community outreach and the implementation of safeguards instruments). Other key PIU positions include an infrastructure and environmental management coordinator, a M&E specialist, an environmental specialist, a social specialist, a procurement specialist and a FM specialist. These positions will be selected under terms of reference included in the OM and approved by the World Bank. The procurement and FM specialists are expected to be appointed within three months of Loan effectiveness. The Government will cover the costs of staffing for the key PIU positions outlined above, estimated at around US$2 million for the Project implementation period. They will have signing authority (‘cuentadancia’) to facilitate timely implementation. Until the PIU is legally established and key positions are hired, the FSS will 30 designate four line staff with signing authority, who on a transition basis, will be responsible for initial technical and administrative processes to avoid delays in implementation. If necessary, the FSS may also make any necessary temporary appointments prior to Loan effectiveness. Figure A.3.2 Structure of the PIU within the FSS 6. While the PIU will be responsible for overall Project management, including fiduciary aspects, the MGCS, MINGOB and the six participating municipalities will be the key implementation actors as well as the beneficiaries of Project activities. Specifically, the implementation of Component 1 will require close coordination between the above-mentioned institutions to ensure that implementation is carried out in accordance with the OM. The MGCS, MINGOB, and participating municipalities will be beneficiaries of technical assistance and equipment under Component 2. The PIU and MGCS will also coordinate with the Crime and Violence Prevention Unit of the VMP of MINGOB on the implementation of guiding principles on community-based violence approaches in the identification, prioritization, implementation, and oversight of violence prevention interventions supported by the Project. Coordination between the PIU within the FSS and MGCS, MINGOB, and the Municipalities, and a clear understanding of the roles of each institution, will be crucial to ensure sound implementation. The Project’s OM clearly outlines the relationship, roles and responsibilities of all actors. 7. A high-level Technical Committee, with representatives of the FSS, MGCS, and MINGOB, will be created within one month of effectiveness to oversee Project 31 implementation. The Technical Committee will include the PIU coordinator, the President and/or Manager of the MGCS, as well as representation from the VMP of MINGOB, and will meet quarterly to review and approve annual work plans and discuss strategic-level issues related to the Project. The detailed description of the role of the Technical Committee is included in the Project’s OM. 8. Implementation of Component 1 will be the responsibility of the PIU, in close coordination with the MGCS, MINGOB and technical experts from the six municipalities, to ensure the coherence of interventions with municipal development plans and crime and violence prevention strategies. The PIU, in coordination with the MGCS and MINGOB, will manage the competitive process of selection of proposals to be financed under this Component (including outreach at the community level with COCODES, and clarifying neighborhood eligibility criteria, among others). An Evaluation Committee will be created within three months of effectiveness to select proposals for financing and will include representatives from the PIU within FSS, MGCS, MINGOB and the six municipalities. Following the selection of proposals to be financed under Component 1, a process of prioritization of activities will be undertaken by the PIU, in coordination with the MGCS and MINGOB, as detailed in the Project’s OM. The PIU will then procure services for the preparation of technical specifications and terms of reference for the civil works. After agreement with the communities (through their COCODES) and the relevant municipality on the detailed scope of works to be carried out, the PIU will prepare the appropriate bidding documentation and carry out the procurement process, and contract out the supervision of works. The PIU will also be responsible for managing environment and social safeguards aspects of the Project, as well as Project reporting, and M&E. The PIU will also coordinate aspects related to environmental legal compliance with the MARN to obtain environmental permits (Autorización Ambiental) for Component 1 interventions, when required. 9. The Rural and Urban Council Law (2002) decentralizes the implementation of regional and local development plans. This Law aims to facilitate citizen engagement in the design and oversight of local development plans while also promoting the alignment of national and sectoral policies at the territorial level. Under this Law, communities identify development problems, set priorities, and propose actions through their COCODES. The COCODES, in turn, share the information and advocate to the Municipal Development Councils (Consejos Municipales de Desarrollo, COMUDES), which are, in turn, responsible for submitting community action plans to the Departmental Development Commissions (Consejos Departamentales de Desarrollo, CODEDES). 10. The VMP within MINGOB developed the Community Violence Prevention Model (2012) to provide guiding principles to COCODES and COMUDES on crime and violence prevention plans with a territorial perspective. This methodology further establishes the creation of Violence Prevention Commissions within COCODES. The Project will use existing community and municipal consultation mechanisms to prioritize integrated packages on crime and violence prevention. Each participating community will develop a crime and violence prevention plan consistent with the methodology that identifies the main risk factors for violence and vulnerable groups. The COCODES, based on local diagnoses elaborated in the plans, will be able to identify and select the most appropriate combination of activities to be implemented in their communities from the Project’s menu of interventions outlined in the OM. 32 11. The PIU and MGCS will coordinate closely with the VMP and the Community Violence Prevention Unit of MINGOB. This coordination is particularly necessary for the implementation of the guiding principles on community-based violence model in the identification, prioritization, implementation, and oversights of violence prevention interventions supported by the Project. Table A.3.1. Participation Framework under the Urban and Rural Development Law Level Composition Responsibilities under the Crime and Violence Urban and Rural Prevention Responsibility Development Law CODEDES  Governor of the -Prioritize development needs, Design departmental Department problems and solutions at the policies on violence  Mayors departmental level; formulate prevention and promote  Departmental Head policies, plans, programs and municipal organization. of SEGEPLAN development Projects in line  Representatives of with municipal development Promote inter-institutional indigenous groups plans; present departmental coordination of Projects at in the department plans to the National and the municipal level and  Representatives of Regional Council. propose to the CODEDE the women’s groups in -Supervise implementation of needs in the area of citizen the department development Projects and take security for the department.  Representatives of corrective measures, if needed. other organizations -Maintain record of MINGOB at the departmental maximum public pre- Identify financing sources level investment and investment for the implementation of budgets. plans with the assistance of the VMP. COMUDES  Mayors -Promote integrated municipal Assess interventions on  Deputy-mayors development programs and violence prevention for and council Projects for children, municipalities. members as adolescents, youth and women. determined by the -Ensure that development Facilitate inter-institutional municipal Projects/programs are coordination as well as corporation formulated on the basis of needs inter-municipal synergy on  Representatives of prioritized by the COCODES. prevention activities. the COCODES, -Provide follow up on the up to 20, as implementation of Projects and designated by the programs and propose Supervise and support coordinators of the corrective measures, when community participation, COCODES needed. through the identification of  Representatives of -Propose fund distribution for needs at the community the public public pre-investment and level and inform the institutions with a investment on the basis of CODEDE on needs local presence resources available and on prioritized.  Representatives of COCODES needs. selected civil organizations COCODE  Community -Formulate development Identify potential prevention Assembly, policies and Projects, based on interventions, based on comprised by prioritized needs by community problems, needs and 33 residents and proposed them to the opportunities identified by  Coordinating COMUDE. the community, so as to Entity -Follow up and evaluate the foster social cohesion implementation, effectiveness among residents and and impact of development promote community policies and programs. participation in municipal commissions. Comisiones  Community -Formulate community Formulate community Comunitarias residents preventions plans using the preventions plans using the de Community Violence Community Violence Prevención Prevention Methodology of the Prevention Methodology of UPCV. the UPCV. III. Financial Management, Disbursement, and Procurement Financial Management Arrangements 12. The FSS, through the PIU, will be responsible for FM for the proposed Project. FSS, through the PIU, will be directly in charge of FM tasks, in coordination with the FSS’ Coordinación Financiera and CIV’s Administrative and Finance Unit, as needed. These tasks include inter alia: (a) budget formulation and monitoring; (b) cash flow management (including processing payments and submitting loan withdrawal applications to the World Bank); (c) maintenance of accounting records (including the administration and maintenance of an inventory of Project assets); (d) preparation of in-year and year-end financial reports; (e) administration of underlying information systems; and (f) arranging for execution of external audits. In addition, the FSS will be responsible for implementing the governance and transparency aspects of the Project. To properly support FM tasks, the PIU will include a FM specialist under terms of reference approved by the World Bank. 13. On the basis of a FM assessment carried out by the World Bank, the Project’s overall FM risk was assessed as substantial. While FSS is the responsible implementing entity, Project implementation requires the FSS to interact with the MGCS, the main technical counterpart, and MINGOB. Moreover, although the FSS has the basic FM arrangements in place and extensive experience in the implementation of infrastructure Projects, it is not familiar with World Bank requirements, and its internal administrative and finance arrangements may become cumbersome. However, key PIU positions will have signing authority (cuentadancia) which will facilitate timely implementation. 14. The FSS has agreed to a FAP including procurement and FM measures to ensure adequate FM capacity is in place for Project execution. The FAP includes measures related to staffing, internal control procedures, accounting, financial reporting and transparency mechanisms to strengthen capacity at the Project level and mitigate risks. With the implementation of the FAP, the FSS will have the required capacity to carry out FM tasks. The FAP includes the following FM risk mitigation measures: (i) Hiring of trained staff who possess the experience and credentials required to ensure responsible Project management; 34 (ii) Description, in detail, of FM and procurement related procedures and operational responsibilities in the OM; (iii) Inclusion of contract management mitigation measures in the OM; (iv) Preparation of semi-annual interim FM reports linking physical progress and financial execution; (v) Hiring of external auditors acceptable to the World Bank within three months of Project effectiveness with an expanded scope of work and interim internal control reports to be available to the World Bank; and (vi) Inclusion of a complaint mechanism based on social audit for integrated packages. Programming and Budget 15. Overall, budget preparation will be carried out following local requirements. The PIU will be in charge of preparing the Annual Operating Plan and budget, in close coordination with the MGCS and MINGOB, which will then be approved by the Project’s Technical Committee and incorporated into FSS’ and CIV’s annual budget. The approved Annual Operating Plan and budget will become the basis for the preparation of the annual Procurement Plan. For Project monitoring purposes, the budget composition (Estructura Programática) to be included in Guatemala’s integrated accounting system (SICOIN) will use the Project’s Component/category classification. The OM includes specific procedures for the preparation of the annual Annual Operating Plan and budget, coordination mechanisms with the MGCS and MINGOB, as well as internal mechanisms for approval, including related budget modifications. Accounting and Financial Reporting 16. Accounting Policies and Procedures and information system . The accounting regulatory framework for the Project has three components. These are: (a) Guatemala’s laws on budget management applicable to the FSS; (b) the FSS’ institutional regulations and the Project’s OM; and (c) budgetary and accounts classification to be used for Project accounting. The financial activities of the Project (especially budget and budget execution) will be recorded in SICOIN. Information recorded in SICOIN – classified by Project component and cost category, as described above —will be used for the preparation of financial reports and statements for the World Bank using Excel. The Government’s budgetary classification will be used as a chart of accounts for accounting. Adequacy of procedures followed for the preparation of financial reports will be closely reviewed by the World Bank, mainly to ensure the integrity and reliability of financial information. 17. Processes and procedures. Overall, the FSS has well-established processes and procedures, which will be used for the proposed Project. However, there is a need to ensure timely and smooth interaction with the MGCS and MINGOB, and internally in the FSS, among the PIU, the FSS’ line units (for example, Coordinación de Operaciones and Coordinación Financiera), and CIV’s Administrative and Finance Unit. While there are clear roles and responsibilities, the interaction among different units may become cumbersome, and lead to excessive requirements of supporting documents, especially for payment processing. The FSS is streamlining certain procedures, as reflected in the Project’s OM. These will need to be carefully revised during the first year of Project implementation. 35 18. Financial Reports. On a semi-annual basis, the FSS will submit to the World Bank, an unaudited interim financial report, as well as annual financial statements. These reports will contain at least: (a) a statement of sources and uses of funds and cash balances; (b) a statement of budget execution per activities (with expenditures classified by the major budgetary accounts); and (c) a statement on physical progress linked with financial execution by integrated package/work. The interim reports will be submitted not later than 45 days after the end of each semester. On an annual basis, the FSS will prepare Project financial statements, including cumulative figures of the interim financial reports. The financial statements will include explanatory notes in accordance with national accounting standards as well as confirmation that Loan funds were used in accordance with the intended purposes as specified in the Loan Agreement. These financial statements, once audited, will be submitted to the World Bank not later than six months after the end of the Government’s fiscal year (which follows the calendar year). The supporting documentation of the semester and annual financial statements will be maintained on FSS’ premises and made easily accessible to the World Bank implementation support missions and to external auditors. Documentation should be maintained at least until three years after Project closing or the submission of the last audit report, whichever is latest. 19. Flow of Funds. The FSS will open a segregated Designated Account, or Cuenta Secundaria, under the Multilaterals’ Single Treasury Account system in the Ministry of Public Finance in United States dollars, to be used exclusively for deposits and withdrawals of Loan proceeds for eligible expenditures. Following the existing procedures for the processing of payments, as expenditures arise, funds deposited in the Designated Account will be withdrawn to a secondary tier operational account held at a Commercial Bank acceptable to the World Bank from which payments will be made to suppliers. After Loan effectiveness and after the Designated Account has been opened, the FSS will submit its first disbursement request to the World Bank up to the established ceiling that will provide adequate financing for the next six months of forecasted expenditures. For subsequent withdrawals, the FSS will submit the disbursement request, along with the supporting documentation (Statements of Expenditures), as established in the Disbursement Letter. 20. Loan proceeds will be withdrawn by the FSS using the advance method supported by documentation showing that the Loan proceeds previously withdrawn have been used to finance eligible expenditures. Supporting documentation will be in the form of Statement of Expenditures. The use of special commitment procedures for the proposed Project will not be needed. However, should the need arise during implementation, the World Bank will evaluate it and if granted, agree to their use through an amendment to the Disbursement Letter. The Project may also use reimbursement or direct payments. 21. The disbursement deadline date is four months after the closing date specified in the Loan Agreement. 22. Table A.3.2. shows disbursement by Expenditure Category. Table A.3.2. Disbursement by Expenditure Category 36 Category Amount of the Loan % of Expenditures Allocated to be Financed (expressed in US$) (inclusive of taxes) (1) Goods, works, non-consulting services, consulting 36,120,000 100 services, Training and Land Acquisition and Compensation under Part 1 of the Project (2) Goods, non-consulting services, consulting services 4,267,500 100 and Training under Part 2 of the Project (3) Goods, non-consulting services, consulting services 4,500,000 100 (including Project audits), Training and Operating Costs under Part 3 of the Project (4) Front-end Fee 112,500 Amount payable pursuant to Section 2.03 of the Loan Agreement in accordance with Section 2.07 (b) of the General Conditions TOTAL AMOUNT 45,000,000 Audit Arrangements 23. Internal audit. The organizational structure of the FSS includes an Internal Audit Unit. It is expected that in the course of its regular internal audit activities related to the institutional budget, the internal auditors may include Project activities in their annual work plans. Such audits performed by FSS’ Internal Audit Unit will be available to the World Bank 24. External audit. The annual Project financial statements prepared by FSS will be audited following International Standards on Auditing by an independent firm and in accordance with terms of reference, both acceptable to the World Bank. The audit opinion covering Project financial statements will contain a reference to the eligibility of expenditures, and will include physical inspection of works and according to World Bank policies will be public. Audit terms of reference will include an interim semi-annual internal control memoranda (“management letters”), including review of compliance of procurement processes with the OM and World Bank procedures. The audit work described above will be financed with Loan proceeds. External auditors shall be hired no later than three months after effectiveness. Each audit engagement is expected to cover at least three years. IV. Strengthening Contract Management 25. Despite improvements over previous decades in public FM and transparency, challenges to sound expenditure management remain throughout the Project cycle. Based on experience with infrastructure Projects, both in Guatemala and throughout the LAC region, the World Bank team identified several areas of Project management and control that have been historically weak in similar Projects: (a) contracting processes; (b) contract management; and (c) ensuring transparency throughout the Project cycle. Actions within these three areas have been incorporated into the design of the Project and are included in the OM. 37 V. Fiduciary Action Plan 26. The FAP is presented in Table A.3.3. Table A.3.3. FAP Action Timing Resp. Entity 1. Appointment of qualified procurement specialist based on terms Within 3 months of FSS of reference satisfactory to the World Bank Project effectiveness 2. Preparation of a Procurement Plan (for the first 18 months of the Project) defining the procurement processes subject to prior Completed FSS review. 3. Update of the Procurement Plan and inclusion into relevant Within 1 month of Project FSS systems effectiveness 4. Inclusion of contract management, procurement and FM procedures and mitigation measures in the OM, including for Completed example, selection processes and committee composition; contract FSS formats for works, goods and services; tender participants background information; and external audit terms of reference 5. Appointment of qualified FM specialist based on terms of Within 3 months of FSS reference satisfactory to the World Bank Project effectiveness 6. Training for FSS staff on World Bank policies and OM World Completed procedures to Bank 7. Contract external auditors, based on short list satisfactory to the Within 6 months of FSS World Bank Project effectiveness VI. Procurement Arrangements 27. Procurement for the proposed Project will be carried out by the PIU in close coordination with the MGCS and MINGOB. Procurement will be carried out in accordance with the provisions of the Loan Agreement, the World Bank’s Procurement Regulations for Borrowers under Investment Project Financing (July 2016), and the OM. 28. A Project Procurement Strategy for Development was prepared by the Borrower for the proposed Project. It describes how the procurement for this operation supports the development objectives of the Project and delivers Value for Money under a risk-based approach. It also provides adequate justification for the selection methods and thresholds in the Procurement Plan. Open competitive procurement is the World Bank’s preferred procurement approach, whenever possible, to maximize fairness of opportunity to bid, and approaching the international market is appropriate for situations where the participation of foreign firms will increase competition and may enhance the achievement of best Value for Money and fit for purpose results. 29. Works to be financed under this Project are small-scale infrastructure. These include refurbishments as well as minor works such as widening, rehabilitating and paving existing roads, sidewalks, stairways, improving water drainage, installing water supply and sanitation connections for households, building stabilization walls, and construction of multi- purpose community centers, and recreational areas. Civil works will be financed under 38 Component 1 for which individual communities will compete for the use of funds based on eligibility and selection criteria described in the OM. Open international competitive procurement will be used, except for contracts estimated to cost below the equivalent of US$5,000,000 which may be procured following national open competitive procurement. Improvement of public lighting (utility services) may be justified as direct contracting with the only provider available in the municipalities of this Project. 30. Goods to be financed under this Project include school materials for extra- curricular activities and teaching, solid waste containers, vehicles, office and information technology equipment, including computers, servers and software, among other. Open international competitive procurement will be used, except for contracts estimated to cost below the equivalent of US$500,000, which may be procured following national open competitive procurement. 31. Non-consulting services to be financed under this Project include printing services, media campaigns, data collection, and other services. Contracts estimated to cost below US$500,000 will be procured following open national competitive procedures. 32. Bidding Documents are included in the OM. Open international competitive procurement will be bid using the World Bank’s Standard Bidding Documents for Works and Goods, and the World Bank Sample Bidding Document for the Procurement of Non-Consultant Services. Procurement under national open competitive and request for quotation procedures will be conducted using bidding documents agreed with the World Bank and included in the OM. Request for quotation will only be permitted for contracts for goods and non-consultant services estimated to cost below US$30,000 and for civil works below US$50,000. 33. Consulting Services to be financed under the Project are for supervision of works, baseline studies, auditing, urban land planning, youth empowerment programs, technical assistance, web-based development, and training, among other services. These services will be rendered either by firms or by individuals, as indicated in the Procurement Plan. For contracts with firms estimated to cost below $300,000, the short list may be composed entirely of national consultants. 34. Operating costs refer to reasonable recurrent expenditures that would not have been incurred by the implementing agency in the absence of the Project. The Project will finance operating costs, such as office supplies, communication and advertising costs, computers and equipment maintenance, and per diems for local and international staff, among other operational expenses. The Project will also finance costs of training courses, travel and per diem of trainers and trainees, and rental of facilities. 35. All procurement procedures are described in detail in the OM, published on the FSS’s web page. The OM includes model bid evaluation reports and model reports for the preparation of short lists. 36. Procurement activities will be carried out by the PIU, however, procurement risk is rated Substantial. With respect to procurement, the PIU is in charge of consolidating 39 procurement plans, overseeing procurement processes and ensuring compliance with the procurement and consultant regulations. An assessment of the PIU found certain deficiencies in terms of weaknesses related to available procurement staff and resources to deal with the large number of contracts required by the Project. Key issues and risks include: (a) PIU implementation capacity given the expected high workload; (b) poor coordination of activities between different institutions involved in the Project; (c) Contraloria’s interventions before signature of contracts, which may cause bottlenecks; (d) local procurement regulations that include practices that are not acceptable to the World Bank; and (e) high country procurement risk. As such, the procurement risk for this Project is considered Substantial. 37. A series of mitigation and corrective measures have been agreed upon. These include: (a) recruitment by FSS of at least two experienced procurement staff with terms of reference and qualifications acceptable to the World Bank, to be responsible for the Project’s procurement function; (b) recruitment by FSS of a full or part-time international procurement specialist, as needed, with terms of reference and qualifications acceptable to the World Bank, to coach and support the PIU’s procurement staff and contribute to quality control, especially for high–cost contracts; (c) implementation of the Project in accordance with an OM acceptable to the World Bank; (d) carrying out of national open competitive procurement and requests for proposals using bidding documents agreed upon with the World Bank and included in the OM; (e) use of Guatecompras, a national contracting and procurement information system, in accordance with the OM and in alignment with the World Bank’s Procurement Regulations for Borrowers under Investment Project Financing (July 2016); and (f) adoption of risk mitigation measures in the Project Procurement Strategy Document (PPSD) based on the market analysis carried out for the preparation of this document. 38. The Borrower has developed a Procurement Plan for the first 18 months of Project implementation. It may be updated in agreement with the World Bank annually or as required to reflect the actual Project implementation needs and improvements in institutional capacity. The Procurement Plan will be published in the Systematic Tracking of Exchanges in Procurement System within 30 days of Loan Effectiveness. 39. In addition to prior review supervision, annual supervision missions will be conducted to carry out post reviews of 1:5 procurement actions. Details of the Procurement Arrangements Involving International Competition (i) Works, goods and non-consulting services 40 Table A.3.4. Contract Packages following Open International Competitive Procurement for civil works, goods and non-consulting services 1 2 3 4 5 6 7 Domestic Review Expected Contract Estimated Procurement Preferenc by Bank Bid- P-Q (Description) Cost (US$) Method e (Prior/ Opening (Yes/No) Post) Date Civil works 9,600,00 Open international N Prior June 2017 0 competitive procurement Vehicles 642,000 Open international N Prior May 2017 competitive procurement 40. The following procurement processes for works, goods and non-consultant services are subject to prior review by the World Bank:  All contracts estimated to cost above US$5,000,000 for works;  All contracts estimated to cost above US$500,000 for goods and non-consultant services;  The first national open competitive procurement and request for quotation process for works, goods and non-consultant services regardless of the amount. All other contracts will be subject to procurement post review unless otherwise identified in the Procurement Plan;  Direct contracting processes estimated to cost US$50,000 for works, unless otherwise identified in the Procurement Plan; and  Direct contracting processes estimated to cost US$10,000 for goods and non-consultant services, unless otherwise identified in the Procurement Plan. For all direct contracting processes that are prior review, the justification shall be submitted to the World Bank jointly with the Procurement Plan, and the justification of the reasonableness of price along with the draft contract will be subject to prior review. (ii) Consulting services Table A.3.5. Consulting Services with Short-list of International Firms 1 2 3 4 5 6 Review Expected Ref. No. Description of Estimated Selection by Bank Proposals Assignment Cost (US$) Method (Prior / Submission Post) Date C-2017- June 2017 Base line 700,000 QCBS Prior 1 240,000 2017 Design and C-2017- 480,000 2018 planning of civil QCBS Prior 2 240,000 2020 works 240,000 2021 360,000 June 2017 C-2017- Supervision of 720,000 June 2018 QCBS Prior 3 civil works 360,000 June 2020 360,000 June 2021 41 1,200,000 June 2017 C-2017- Crime prevention 2,400,000 June 2018 QCBS Prior 4 consultancy 1,200,000 June 2020 1,200,000 June 2021 National C-2018- US$1.3 communication QCBS Prior May 2018 1 million strategy 41. The following consultant services processes are subject to prior review by the World Bank:  All contracts with firms estimated to cost above US$200,000. All other contracts will be subject to procurement post review unless otherwise identified in the Procurement Plan;  All contracts with firms estimated to cost below US$300,000, the short list may be composed entirely of national consultants;  Selection of individual consultants estimated to cost above US$100,000. All other contracts will be subject to procurement post review unless otherwise identified in the Procurement Plan and/or considered strategic or high risk activities; and  For all direct contracting, activities below US$100,000 will not be subject to procurement prior review. All activities foreseen as direct contracts shall be agreed and identified in the Procurement Plan prior to implementation. VII. Environmental and Social Safeguards Safeguard Policy Issues 55. Because the specific locations of investments is not yet known, an ESMF was prepared for the Project by FSS and MGCS, and approved by the Bank. The ESMF includes the following guidelines: a) EMG; b)RPF; and c) PPVICG. The ESMF will ensure social and environmental sustainability of the integrated packages as well as compliance with applicable national laws and the World Bank’s safeguard policies. The EMG of the ESMF includes, among others: a) the legal and institutional framework related to the environmental and social context in the different sectors that the Project will support; b) the main potential environmental and social impacts of the provision of the integrated package (access road, electrification, water supply and waste water systems, and others), and general measures to minimize, mitigate, and/or compensate any negative impacts; c) the environmental and social management process (including methodologies, tools, and procedures) for the identification and execution of urban infrastructure Subprojects; and d) the environmental and social management procedures that the PIU and, specifically, its environmental and social specialists should take into account during the “Project cycle” to ensure compliance with national laws to obtain the respective Environmental Authorization from MARN, and the World Bank’s safeguards policies. Safeguards Triggered 56. The Project is classified as Category B in accordance with Environmental Assessment (OP/BP 4.01). Given the technical characteristics of the works proposed and their 42 magnitude, and the communities’ urban location, no significant environmental negative impacts are foreseen. The Project is expected to bring great benefits to the quality of life of MGCS residents. Among other activities, the Project will finance improvement or rehabilitation of local roads, provision of potable water, drainage works, public street lighting, construction of local recreational parks, school and community centers, and slope stabilization works. In the case of local roads, for example, rehabilitation, improvement, and maintenance activities will be completed on existing roads and will not change the character of the roadways. Improvements to potable water and drainage systems will be small-scale, and public lighting improvements are expected to be made in existing right-of-ways with minimal impact to existing residences and businesses. All works require an environmental license or authorization to be issued by MARN; however, MGCS and MARN agreed on simplified procedures for obtaining Environmental Authorizations by package of investments (rather than for individual investments) to ensure environmental legal compliance. Moreover, the first three integrated packages will require the World Bank’s no-objection from the environmental and social point of view. Starting with the fourth integrated package, the World Bank’s no-objection will be required only for integrated packages classified as A or B according to the methodology established in the EMG. These agreements are outlined in the EMG and the Project’s OM. 57. The Indigenous Peoples (OP/BP 4.10) policy is also triggered. Given that the exact location of investments is not yet known, the Borrower prepared the PPVICG as part of the ESMF. These Guidelines outline the steps to be taken at the community level in order to identify and prepare Community Development Plans that can be funded by the Project.33 The PPVICG also serve as an Indigenous Peoples Planning Framework (IPPF), and include recommendations on how the process can be adapted in the case of indigenous communities, so that Community Development Plans can serve as Indigenous Peoples Plans, and thus conform to the requirements of the World Bank’s policy on Indigenous Peoples (OP/BP 4.10). The Community Development Plans will be reviewed by the World Bank prior to approval of the integral packages for communities, in order to assess their conformity with the Guidelines, and where necessary, the World Bank Policy on Indigenous Peoples. The five main phases for participatory planning are as follows: a) Stakeholder mapping. This involves the identification of the relevant community structures which will be responsible for preparing the Community Development Plans. In the case of this Project, these structures will be the COCODES. b) Capacity building of COCODES and Violence Prevention Commissions. In many cases, the COCODES may not have the necessary skills or experience to engage in a participatory planning process, may not have established dedicated Violence Prevention Commissions, or may not yet have formally registered with a municipality. Therefore, it will be important to provide training and advisory support to the COCODE members on the participatory planning process, the role of the COCODES in the community development process, and on leadership skills. 33 Community Development Plans are plans prepared at the community level that describe the Integrated Package of Small-Scale Urban Infrastructure and Violence Prevention Interventions. 43 c) Community-based diagnostics. The community-based diagnostic phase involves participatory research on community priorities, through group consultations with key stakeholders at the community level. d) Planning and implementation. Following the identification of community investment and crime prevention priorities, technical experts from the municipalities and the PIU will work with the COCODES to prepare specific integrated package proposals, which can be integrated into packages for design and implementation, following selection. e) M&E. The M&E phase will use the same tools of participatory research from the diagnostic phase, but with an emphasis on identifying the results and impacts of the integrated packages financed under the Project. 58. The process of preparing a Community Development Plan will be adapted for indigenous communities. These adaptations include screening for indigenous people, consulting traditional authorities, and collecting data on the socio-economic characteristics of indigenous people at the diagnostic phase; mobilizing an indigenous peoples advisory council to the COCODE at the community mobilization phase; adapting planned investments or prevention activities to ensure they are culturally appropriate at the planning phase; and consulting with traditional authorities and other indigenous stakeholders on the results of the integrated packages at the M&E phase. The PPVICG also make provisions for the inclusion of women and young people in the community decision-making process, as well as for the resolution of conflicts and grievances that may arise during the process. The Project’s social specialist will be responsible for ensuring that the community development teams of each municipality follow the requirements of the PPVICG, and will work with these teams and the relevant community organizations to prepare Indigenous Peoples Plans acceptable to the World Bank, if required. The Project’s social specialist will also monitor the implementation of these plans, and will provide regular reports to the World Bank on their execution. 59. The Project will support a range of integrated packages, some of which may require minor resettlement impacts. Although these packages will have a small physical footprint, there are communities where there may be significant encroachment on the right-of-way of roads, sidewalks, and other public spaces that may be rehabilitated under the Project. In addition, certain types of integrated packages, such as community centers, may require the purchase of small amounts of land. Therefore, the World Bank policy on Involuntary Resettlement (OP/BP 4.12) applies, and the Government has prepared, consulted and disclosed the Resettlement Policy Framework and RPF. These Guidelines specify the following implementation arrangements: a) The respective municipality’s community development and public works departments will: identify the properties and assets likely to be affected by the integrated package; take an inventory of the assets likely to be affected; document the socio-economic characteristics of the affected people; assess the replacement value of the assets affected and associated costs; and notify and consult with the affected people on the likely impacts and their rights under the RPF. b) The PIU’s social specialist then evaluates the data provided by the municipality on the resettlement impacts of the Project and verifies whether a resettlement plan is necessary, whether it would be possible to redesign the integrated package to minimize resettlement impacts. 44 c) The PIU’s social specialist works with the community development department of the relevant municipality to prepare and disclose a Resettlement Action Plan (RAP) that provides details on the assets affected, the characteristics of the households affected, as well as compensation and other resettlement assistance to be provided. d) The World Bank task’s team social development specialist reviews the RAP, and provides guidance on how to ensure it conforms to the provisions of OP/BP 4.12. e) Following revision after comments from the World Bank, the RAP is disclosed on the Project website, in a location accessible to the Project’s affected people, and in the World Bank’s website. f) Once the RAP has been agreed and disclosed, and the necessary compensation and assistance has been provided to the Project affected people,34 civil works can commence on the affected properties. g) The PIU’s social specialist, along with the community development departments of the relevant municipality, will be responsible for monitoring and evaluating the implementation of the RAP, and providing regular reports to the World Bank. The PIU’s social specialist will also be responsible for ensuring the steps outlined in the grievance redress process of the resettlement policy guidelines are followed in cases where affected people are not satisfied with the compensation or assistance provided. This process involves the use of independent mediators following an initial attempt to facilitate an agreement by the community development team of the municipality. All grievances, and their solution, should be recorded in a complaints log. 60. The Physical Cultural Resources (OP/BP 4.11) is triggered. This policy is triggered because of the potential impact on cultural resources during construction, especially during movement of material. The ESMF includes Chance Find Procedures as well as measures to screen for and manage potential impacts on cultural heritage or property that could be affected by neighborhood development plans. 61. Capacity to implement the ESMF is mixed. During Project preparation, the FSS and MGCS had the support of the environmental specialists of the municipalities that are part of the MGCS. However, for Project implementation, it will be necessary to hire a dedicated Environmental specialist and a Social specialist in the PIU, to ensure compliance with the ESMF and its guidelines and effective implementation. At the municipal level, implementation capacity is mixed with larger municipalities, such as Villa Nueva and Mixco, having environmental specialists, a large community development team, and a well-developed network of COCODES. However, some of the smaller municipalities will not have access to sufficient staff, and it may be necessary to use Project resources to hire consultants to assist these municipalities during implementation. One issue that municipalities face is financing constraints to pay for compensation for expropriation and associated resettlement costs. Therefore, it will be necessary to use funds from the World Bank loan to cover these costs. Prior to Project implementation, a training workshop for the PIU, the MGCS and the municipalities is planned, in order to build capacity in the use and application of the safeguards instruments. 34 People affected by the Project through land acquisition or resettlement. 45 62. Public consultations were conducted on the ESMF including the RPF, EMG, and IPPF annexed to the ESMF with representatives of the six MCGS municipalities, and local civil society and community-based organizations on April 30, 2014. Over 150 people participated in this meeting. Minutes of stakeholder meetings, including measures proposed to address grievances, are included as an Annex to the EMG. During the consultation workshop, participants asked questions about the process of eligibility and selection of communities and sub-projects, as well as the timing of implementation. No comments/questions that required changes in safeguards documents were made. 63. The ESMF, including the Resettlement Policy Framework, the RPF and IPPF, was disclosed to the public on April 30, 2014 both through the public consultation meeting and on the websites of the MGCS municipalities. Revised versions were subsequently disclosed on May 6, 2016. The final versions were disclosed through the Government’s (May 6, 2016) and the World Bank’s website on May 10, 2016. VIII. Monitoring and Evaluation 64. The PIU within the FSS will be responsible for M&E of Project outcomes and results. The PIU will include a M&E specialist, who will be responsible for consolidating all reports and providing information in implementation progress and to the World Bank, including qualitative and quantitative information on the execution of selected interventions, procurement and contractual decisions, accounting and financial recording, progress towards outcomes, safeguards management, outputs and monitoring of indicators, as well as other operational and administrative matters. Component 2 will finance the initial data collection and community mapping, as well as targeted M&E studies of selected indicators for eligible communities at mid- term and completion. Component 2 will also finance the implementation of victimization and safety perception survey in a representative sample of households in eligible communities. Component 1 will finance community-level victimization surveys in the selected urban communities (one at the beginning of the community mobilization process, one at mid-term, and one at the end of the intervention in each community). Project indicators will leverage the survey, as appropriate. The Project’s results framework will be updated during implementation based on the baseline survey and the outcome of the community-driven identification of interventions. 46 Annex 4: Implementation Support Plan GUATEMALA: Urban Infrastructure and Violence Prevention Project (P143495) Strategy and Approach for Implementation Support 1. The strategy for implementation support was developed based on the nature of the proposed Project and its risk profile. This strategy aims to support the Government of Guatemala in achieving the PDO. The Implementation Support focuses on risk mitigation measures identified in the Systematic Operations Risk-rating Tool and standard World Bank implementation support (including technical, institutional, environmental and social safeguards) and fiduciary aspects (FM and procurement). Implementation Support Plan 2. For the execution of the implementation support plan, the World Bank will provide timely, efficient, and effective support to the implementing partners. The World Bank will also conduct semiannual implementation support missions and field visits to follow up on Project implementation. Detailed inputs from the World Bank are outlined below.  Strategic. Formal implementation support missions will meet with the PIU within FSS, and with MGCS and MINGOB to: (a) review Project activities; (b) reconfirm strategic alignment of the Project’s multi-sector aspects; and (c) ensure the necessary coordination across respective stakeholders.  Technical. The first priority will be to support the completion of a survey and mapping of the communities potentially eligible to receive Project investments. Next, focus will be on supporting the PIU and MGCS in conducting an effective, transparent community selection process. Subsequently, focus will turn to implementation of the civil works, crime and violence prevention interventions, and institutional strengthening defined under Components 1 and 2. Regular field visits will serve to verify compliance with the Project’s OM and encourage required adjustments to Project activities as needed, given results on the ground. The World Bank may bring additional technical support if necessary, such as short-term external technical experts. The World Bank will review technical inputs, including terms of reference and bidding documents to ensure adequate technical specifications. In addition, support on FM and procurement aspects will ensure proper preparation of requests for proposals, bidding documents, and eventual evaluation of bids and proposals.  Safeguards. The World Bank worked with and advised the PIU and MGCS on the preparation of, and consultation for, the social and environmental safeguards instruments for the Project. This support will continue throughout Project implementation with regard to the investments financed under the Project. The Project is required to fully implement the social and environmental management plans/systems according to the World Bank safeguard policies and in line with the Project’s OM. There will be multiple construction contracts and associated works under Component 1 that require adequate supervision.  Fiduciary. The World Bank evaluated the PIU’s capacity and proposed a FAP, which was agreed with the PIU to ensure adequate procurement and FM capacity is in place for Project execution. It was also agreed that specific and timely targeted training will be provided by the World Bank on FM and procurement aspects during the period prior to Project 47 effectiveness to ensure readiness for contracting of civil works once the Project is declared effective. Continued support will be provided through technical support and field visits by the World Bank during Project implementation. Implementation support site visits for the Project’s financial and procurement management arrangements will be conducted semi- annually and as needed in response to client needs.  Client relations. The World Bank Task Team Leader will: (a) coordinate World Bank support to ensure consistent Project implementation, as specified in the Loan Agreement and the Project’s OM; and (b) meet regularly with the PIU, MGCS, MINGOB and Ministry of Public Finance representatives to monitor Project progress (including the mid-term review) in achieving the PDO and address implementation roadblocks, as they may arise. 3. The main focus with regards to support to implementation during the first 12 months and thereafter is described in Table A.4.1. Table A.4.1. Estimated Implementation Support Time Focus Skills Needed Resource Estimate (Staff Weeks/Year) First 12 Survey / mapping of communities Urban Economist 12 months Procurement training, Procurement review of bidding 3 Procurement Specialist documents Technical review of terms of reference, technical reports and 4 Technical Specialists bidding documents FM training and implementation support FM Specialists 3 Social safeguards – implementation support and training Social Specialist 2 Environmental safeguards – implementation support and Environmental 2 training Specialist Public safety enhancement – implementation support and Crime and Violence 4 training Specialist Project management and Project implementation support 10 Task Team Leader coordination After Procurement review of bidding documents Procurement Specialist 2 month Technical review of the terms of reference, technical reports 5 Technical Specialists 13 and bidding documents FM training and implementation support and training FM Specialists 2 Social safeguards – implementation support and training Social specialist 2 Environmental safeguards – implementation support and Environmental 2 training Specialist Public Safety Enhancement – implementation support and Crime and violence 4 training Specialist Project management and Project implementation support 8 Task Team Leader coordination 48 Annex 5: Crime and Violence Prevention Context GUATEMALA: Urban Infrastructure and Violence Prevention Project (P143495) Drivers and Dynamics of crime and violence 1. Guatemala struggles with high levels of crime and violence, which impose a heavy burden on the country’s development, and are among the key constraints to investments, productivity, and security of people and property. Guatemala saw a decrease in homicide rates from 2009-2011, despite a marked increase in Central America’s Northern Triangle. Although there was a slight increase in 2012 when the rate reached 39.9 per 100,000 people,35 the national murder rate has declined overall from 46.4 in 2009 to 29.5 in 2015.36,37 Still, research shows that country rates are above the LAC average, and three times as high as the world average.38 Figure A.5.1. Guatemala’s Homicide Rate per 100,000 Inhabitants 1996-2015 50 45.2 4646.4 42 43.3 41.5 Homicide Rates (per 100,000) 45 38.1 38.6 40 35.4 36.4 35.1 34.234 35 30.9 30.8 31.2 28.1 29.5 30 25.9 24.2 25 20 15 10 5 0 1990 1995 2000 2005 2010 2015 2020 Year Source: National Civil Policy and National Institute of Statistics 2. High robbery victimization, increased incidence of sexually related crimes, kidnappings, and violence-related injuries have also contributed to the magnitude of the problem. In 2015, 615 claims of sexual assault were reported to the police compared to 385 in 2008. In contrast, claims of victimization from domestic violence reported to police decreased 35 https://www.wilsoncenter.org/sites/default/files/FINAL%20PDF_CARSI%20REPORT_0.pdf 36 United Nations Office on Drugs and Crime. 2013. Global Study on Homicide. Trends, Context, Data. Vienna: United Nations Office on Drugs and Crime. 37 2016 Reporte Estadístico: Secretaria Técnica del Consejo Nacional de Seguridad 38 Research Triangle Institute. 2014. Factors Affecting Homicide Rates in Guatemala 2000 –2013: A Study of the Municipalities of Guatemala, Mixco, and Villa Nueva. Research Triangle Institute. 49 from 2,050 in 2008 to 1,861 in 2015.39,40 Around 45.8 percent of Guatemalans identify security as a main problem of the country.41 3. Young people, particularly young men, comprise the bulk of both perpetrators and victims of violence. Since 2012, the homicide rate in Guatemala among youth has been more than double the rate of the general population, about 74 murders per 100,000 young people.42 4. The fact that violence disproportionately affects men, however, should not diminish the importance of preventing violence against women. The overlapping manifestations of gender-based violence against women in Guatemala include domestic violence, rape, child marriage, sexual harassment, and violence and discrimination against indigenous women.43 Statistical data on the magnitude of the problem of domestic violence is particularly elusive44 due to limited recordkeeping and lack of reporting on the part of victims.45 5. Drug trafficking is one of the external drivers of violence in Guatemala. A 2011 Bank report on crime and violence in Central America shows that drug trafficking is the main factor behind rising violence levels in the region, including Guatemala. Hotspot drug trafficking areas tend to experience crime at rates more than 100 percent higher than non-hotspot areas.46 6. Although gang members are commonly assumed to be the main perpetrators of violent crimes, little empirical evidence exists regarding their contribution to crime, including drug trafficking.47 The Central American and Caribbean Commission of Police 39 Eguizabal et al., 2015. Crime and Violence in Central America’s Northern Triangle. Washington, DC: Wilson Center. 40 Corporación Latino barómetro (2012). La Seguridad Ciudadana. El Problema Principal de América Latina . Lima, Perú. 41 Corporación Latino barómetro (2011). Informe 2011. Santiago de Chile. 42 Data from the National Police Office, 2013. 43 According to the National Institute of Forensic Sciences, in the first half of 2013, 403 women suffered violent deaths, an increase of 66 compared to the same period in 2012. The Inter-American Commission on Human Rights describes an overlap between domestic violence and Guatemala’s epidemic rates of femicide. For every ten women killed, three previously either reported violence or were granted restraining orders, and 24 percent died as a result of domestic violence. 44 Inter‐American Commission on Human Rights, Access to Justice, supra note 3 at paragraph 188. 45 Advocates and the Human Rights Ombudsman report testimated 90 percent of domestic violence incidents in Guatemala are unreported (Adriana Beltrán & Laurie Freeman, Washington Office on Latin America, Hidden in Plain Sight, Violence Against Women in Mexico and Guatemala 6 2007) available at http://www.wola.org/sites/default/files/downloadable/Central%20America/past/ViolenceAWomen.pdf; Center for Gender & Refugee Studies, U.C. Hastings Coll. Of Law, Getting Away with Murder: Guatemala’s Failure to Protect Women and Rodi Alvarado’s Quest for Safety 6 (2005). 46 World Bank. 2011. Crime and Violence in Central America: A Development Challenge . 47 The two major gangs in Central America, the Mara Salvatrucha (MS13) and 18th Street, have their roots in the US, where nearly a million Central Americans fled during the civil conflict in the region during the 1980s. A small percentage of those immigrants became involved with gangs, including the 18th Street, a primarily Mexican gang established many years prior to the wave of Central American immigration. Later other immigrants formed MS13. During the mid-1990s, many Central Americans, including some gang members, were deported to their countries of birth, where some became involved in criminal activity and replicated the 18th Street and MS13 gang structures. In response, governments implemented a variety of mano dura policies that emphasized repression and law enforcement, and minimized prevention, rehabilitation and social reintegration of gang members. 50 Chiefs estimates that there are about 14,000 gang members affiliated with about 434 gangs in Guatemala.48 However, available data is not conclusive regarding the overall contribution of gangs to violent crimes in the country. 7. Crime and violence affect specific populations and specific geographic areas disproportionately. About half of violent deaths in the country take place in only five percent of the country’s municipalities. For instance, over 39 percent of national homicides49 between 2003 and 2015 were reported to have occurred within the metropolitan area of the Department of Guatemala, which represents about 17 percent of the population.50 Other regions with the highest homicides rates —such as Izabal, Chiquimula, El Petén, Zacapa, and Jutiapa—are located along the borders with El Salvador, Honduras, Mexico, and Belize. While this is indicative of the likely link between violence and transnational organized crime such as drug trafficking, currently there are no studies that establish this causality. 8. Although drug trafficking is one of the external drivers of violence in the country,51 a combination of social, economic, and governance conditions have exacerbated and amplified its impact. These conditions include socioeconomic factors such as social inequality and a lack of social and economic opportunities. With a Gini coefficient for consumption of 0.39 in 2011, Guatemala ranks among the countries with the highest levels of income inequality in the region.52 The country also has the second highest percentage of youth who are not studying or working in Central America, estimated at 25 percent.53 In this regard, a lack of social and economic opportunities for youth are among the key factors of violence in the country. 9. Structural inequalities between women and men are also risk factors driving intimate partner and sexual violence.54 In the most recent national Reproductive Health Survey (2008–2009) 24.5 percent of women between the ages of 15 to 49 reported experiencing physical violence from their partners. Regarding sexual violence, 12.3 percent reported experiencing it from a partner, and 4.8 percent reported experiencing it in the past 12 months. 10. The proliferation of firearms in Guatemala is another risk factor for violence. The Geneva-based Small Arms Survey conducted in 2008 highlighted the significant correlation between firearms and violent crime in the country.55 Firearms were overwhelmingly present in all reported incidents. Of those participating in the survey, 31 percent said they owned some kind of firearm and one-third said they owned handguns. A more important challenge appears to be 48 World Bank. 2011. Crime and Violence in Central America: A Development Challenge. 49 Data from the National Civil Policy, 2012. 50 According to Project Projections by the National Institute of Statistics in 2011. 51 Drug trafficking is the main factor behind rising violence levels in the region. Hotspot drug trafficking areas tend to experience crime at rates more than 100 percent higher than non-hotspot areas. Crime and Violence in Central America. A development Challenge, The World Bank, 2011. 52 World Bank. 2012. Guatemala - Country Partnership Strategy for the period FY2013-2016. 53 International Labor Organization 2013. Decent Work and Youth in Latin America, Policies for Action. 54 World Health Organization 2010.Preventing Intimate Partner and Sexual Violence Against Women. Taking Action and Generating Evidence. Geneva. 55 Small Arms Survey y Centro de Recursos para el Análisis de Conflictos (2011). Guatemala en la Encrucijada. Panorama de una Violencia Transformadora. 51 that in 2015, 8 out of 10 firearms seized in Guatemala were illegal and 9 out of 10 crimes were being committed with illegal firearms.56 11. Crime and violence impose a heavy burden on the country’s development. The economic cost of crime is high, accounting for 7.7 percent of GDP in 2011,57 11.3 percent of GDP in 2013,58 and 10 percent of GDP in 2014.59 Of this, health care costs account for the largest single share of the added financial burden for the country (4.3 percent of GDP). An additional 1 percent is explained by the added financial burden on public security and administration of justice, an additional 1.5 percent is spent on private security costs, and 0.8 percent goes to insurance payments for destroyed property. Beyond these direct costs, crime and violence significantly affects the business investment climate, reducing incentives for firms to invest productively, create jobs, and expand. The amount of private sector investments is affected by resources being diverted towards crime prevention activities instead of towards productive, growth-enhancing investments. Indeed, according to World Bank Enterprise Surveys, crime in Guatemala is among the top five constraints to productivity and growth identified by Central American firms. Sectoral and Institutional Response at the National Level 12. The importance of crime and violence prevention has led to national efforts on the policy and program levels. The constitution recognizes the protection of citizens as the central axis for peace and security. In addition, the peace agreements signed in 1996 also highlight active and continuous citizen engagement as key elements of security and development. 13. The Government of Guatemala has prioritized a focus on citizen security, violence prevention, and peaceful co-existence over the last five years. In 2014, the MINGOB through the VMP launched the NVCP Policy to address major risk factors of violence, such as youth unemployment, domestic violence, single parent households, and child maltreatment. A subsequent executive order established functions across line ministries for the operationalization of the NVCP and is still active. 14. On the programmatic side, initiatives such as Municipio Seguro and Barrio Seguro60 were launched during the second half of 2012 in order to support community-based approaches to violence prevention. In addition, a number of joint actions and task forces between MINGOB, the prosecutor’s office, and the judiciary are being implemented in about 30 municipalities to address illegal activities such as homicides, kidnappings, and extortion, among others. 56 Eguizabal et al. 2015. Crime and Violence in Central America’s Northern Triangle. Wilson Center. 57 World Bank. 2011. Crime and Violence in Central America: A Development Challenge. 58 Fundesa. (2014). El costo de contener la violencia en Guatemala. 59 Institute for Economics and Peace. 2015. Global Peace Index 2015: Measuring Peace, its Causes and its Economic Value. Sydney: Institute for Economics and Peace. 60 The Barrio Seguro is a program of social interventions for disadvantaged and unsafe neighborhoods coordinated by MINGOB and implemented in coordination with selected communities. 52 15. Although national-level efforts aimed at addressing crime and violence, such as the National Prevention Policy, have been undertaken, institutional limitations represent an obstacle to their effective implementation. For example, the lack of timely and reliable information on crime and violence limits the analysis of the drivers and dynamics of crime that could inform the formulation of better prevention interventions. Crime and Violence in the MGCS 16. Four of the six municipalities of the MGCS61 ranked among the top five municipalities, out of 17, in the Department of Guatemala with the highest homicide rates in 2015. As in the rest of the country, violence in the Mancomunidad disproportionally affects youth. Over 57 percent of homicides that occurred in the Mancomunidad between January and June 2013 had as victim young men and women between the ages of 15 and 29. Figure A.5.2. Average Homicide Rates of the Guatemala Department per Municipality, 2014-2015 80 75.53 Rate of Violent Deaths (per 100,000) 70.29 70 61.27 60 58.22 58.26 54.48 50 48.64 44.95 40.38 43.02 40 2015 29.76 27.52 30 2014 20 10 0 Villa Nueva Mixco Villa Santa Amatitlan San Miguel Canales Catarina Petapa Pinula Municipality Source: National Civil Policy and National Institute of Statistics. 17. During the last decade, in both Villa Nueva and Santa Catarina Pinula, crimes against property have registered the highest number of victims. These include both robberies and extortion, with the latter more prevalent in municipalities with a higher presence of gangs such as Mixco and Villa Nueva. Further in-depth analysis is needed to better understand the dynamics and trends of crime and violence at local levels. 18. The participatory development process established in the Rural and Urban Development Councils Law (2002) decentralizes the implementation of regional and local development plans, including crime and violence prevention activities. The participatory 61 The MGCS in the metropolitan area of Guatemala City, includes municipalities of Mixco, Amatitlán, Villa Nueva, San Miguel Petapa, Santa Catarina Pinula and Villa Canales. 53 mechanism introduced by the Rural and Urban Development Councils Law aims to facilitate citizens’ inputs in local development plans while also facilitating the alignment of national and sectoral policies. 19. Under this decentralized mechanism, citizen security commissions have been established at the municipal level. These commissions have, as their main objective, the participatory design and coordination of local violence prevention plans. Communities identify problems related to crime and violence, set priorities, and propose actions under the COCODES to COMUDES. COMUDES, through their respective municipal citizen security commissions, are responsible for coordinating violence and crime prevention interventions, supervising and supporting community engagement, and submitting action plans to CODEDES based on inputs provided by the community. 20. Municipalities within the MGCS have developed programs and invested municipal resources to address crime and violence. These include citizen security commissions, municipal offices for women, and local violence prevention programs. However, central Government support to local governments for crime and violence prevention activities has been uneven, and as a result, the capacity of localities varies with respect to crime control measures. 21. One of the key challenges faced by the MGCS in addressing crime and violence is the absence of disaggregated data that would allow for accurate, timely, and action- oriented analysis of risk factors for violence. The lack of institutional resources and capacity to collect and analyze data is also a structural problem that affects the formulation and evaluation of effective and targeted violence prevention policies. Similarly, the creation of standards for such analysis is important to allow for the collection and comparison of information at the department and national levels. 54 Annex 6: Economic Analysis GUATEMALA: Urban Infrastructure and Violence Prevention Project (P143495) 1. Given the demand-driven nature of the Project, and that actual costs and numbers of beneficiaries are not known at this stage, a precise Economic Rate of Return could not be estimated. Instead, two levels of analyses were conducted. The ‘Robust Decision-Making’ method estimated benefit-cost ratios for the proposed water and sanitation investments and an economic cost-benefit analysis was calculated through hedonic pricing. Both confirmed that the proposed interventions are expected to be positive. 2. This economic analysis focuses on water and sanitation investments. They are integral to meeting Millennium Development Goals and may be the most expensive component of the Project’s investment portfolio. Explanation of Benefits and Costs of Water and Sanitation Investments 3. The economic value of improved water and sanitation investments has been widely established in the literature (WHO 2012; Haller et al. 2007; Prüss-Üstün et al. 2008; Hutton and Haller 2004). The World Health Organization, for example, has demonstrated that the net economic benefits of improved water and sanitation interventions are strongly positive (WHO 2012; Hutton and Haller 2004). Benefits include avoided cases of disease, health care costs, and avoided time spent to access water and sanitation facilities. Its most recent analysis of interventions around the world finds that investments needed to meet the Millennium Development Goals in water and sanitation would have benefit-cost ratios ranging from 2.8 in Sub-Saharan Africa to 8.0 in East Asia. It further argues that, globally, every dollar invested in improved sanitation yields a US$5.5 return (WHO 2012). 4. Communication with stakeholders and results of a household survey suggest that many underserved people in the MGCS principally receive water from private truck service and have latrines or share toilets. Project interventions seek to provide these citizens with piped water and sewerage connections. It is anticipated that connected private sewerage offers several benefits over latrines or shared toilets. The benefits include the following:  Improvements in health, particularly reductions in diarrheal and other disease associated with poor sanitation;  Potential time savings for those who would otherwise use shared facilities;  Local environmental benefits from improved sanitation;  Security and safety from being able to use in-house facilities; and  Intangible gains such as greater privacy. 5. The benefits from piped water rather than water delivered by trucks include the following: 55  Substantial cost savings for beneficiaries, given that water from private trucks is much more expensive than water from municipal connections;  Potential time savings from having water piped into homes rather than waiting to fill cisterns from trucks; and  Improved reliability of water service, given that private companies may not provide reliable service. 6. The benefits from these investments are similar but not the same as those studied in the literature. For instance, piped water is not expected to confer the health benefits often described in the literature, because the quality of water delivered by the municipalities is not expected to be of higher quality than water provided by private trucks. The key costs of these interventions include (i) initial capital costs of building the water and sewage infrastructure; and (ii) ongoing operations and maintenance of the system. Summary of Economic Analysis Results 7. Several Project characteristics make it challenging to estimate its economic impact. These include:  The Project is demand-driven: decision-makers and potential beneficiaries will influence which specific interventions and neighborhoods are chosen after the Project is approved;  Many social benefits are diverse, indirect, and therefore difficult to quantify; and  Little data is available on costs of interventions. 8. All of the benefits that households are expected to receive from these interventions cannot be quantified. Instead, the analysis quantifies the subset listed in Table A.6.1, for which the literature offers well-developed methodologies. However, there are significant data gaps and uncertainties in quantifying these costs and benefits. The analysis treats the 11 parameters listed in 9. 10. 11. Table A.6.2 in the economic model as uncertain and generates a Monte-Carlo-like sample of 100 cases across them. Because the Project is demand-driven, the scale of interventions is not yet known. Measures such as the net present value would be misleading. Instead the analysis used the benefit-cost ratio to measure the economic performance, because it is independent of Project scale and because it is widely used in the literature on economic analysis of water and sanitation projects. Table A.6.1. Summary of Costs and Benefits assessed in the Economic Analysis Benefits of sewerage connections  Productivity gains from avoided illness and mortality  Productivity gains from added convenience  Avoided public and private healthcare expenditures Benefits of piped water  Cost savings to beneficiaries  Productivity gains from added convenience Costs of water and sewerage  Initial capital costs Interventions  Annual operations and maintenance 56 Table A.6.2. Parameters Treated as Deeply Uncertain in the Economic Model Parameter Description (Minimum, Maximum) Cases of diarrheal illness These parameters determine the baseline health (0.1, 1.5) per capita per year impacts of poor sanitation, and the reduction in Deaths per 1000 people per morbidity and mortality provided by the (0.001, 1) Health Risk year from poor sanitation intervention. Health impacts have both a direct Health risk reduction from economic impact and a productivity impact (0.1, 0.3) intervention measured by the value of time. They are uncertain, with different sources offering significantly different values. A wide range is used for each parameter. Time saved per capita per These parameters determine the direct time savings (0, 0.75) day (hours) from Project interventions and how the time saved Time Value Value of time - children is valued, as a percent of GDP per capita per day. (7.5%, These are uncertain because there is little data on 22.5%) Value of time - adults time savings from water and sanitation in the (15%, 45%) MGCS,62 and there are many ways of valuing time. The assumed time value of infants and seniors is 0. Cost of intervention per These parameters define the key cost and lifetime (100, 1500) household (US$) time characteristics of the intervention. Because the Intervention Costs Annual operations and intervention is demand driven, and because there is (2.5%, 10%) maintenance cost as little data on similar interventions, these parameters percent of initial are treated as uncertain. intervention cost Years to construct (2, 5) intervention Lifetime of intervention (20, 60) (years) Discount rate The discount rate is uncertain: it is a political (4%, 12%) Other choice over which there is often little consensus. 12. Figure A.6.1 shows a histogram of the benefit-cost ratio in 100 model simulations in which each of the eleven uncertainties are varied simultaneously. Of the 100 simulations over the plausible range of values, 98 have a benefit-cost ratio of at least 1, 81 have a benefit- cost ratio of at least 1.5, and 66 have a benefit-cost ratio of at least 2. This analysis suggests that the intervention is economically sound under nearly all assumptions about the uncertain parameters. Moreover, the analysis may understate the actual benefit-cost ratio, given that the economic model does not include all types of benefits. This does not suggest that the probability of realizing a benefit-cost ratio of 1 is 98 percent (or that the probability of a benefit-cost ratio of 62 Although some time savings is expected from in-home water and sanitation, the household survey offers little data on time spent filling water, which may reflect missing data, blank responses, or that in practice little or no time is spent filling water. The survey does not ask about time spent on sanitation activities. 57 1.5 or 2 is 81 percent and 66 percent, respectively). The analysis assigns no probability distribution to the range of uncertain parameters. Such a range would not be defensible given the data gaps and uncertainties faced. Instead, it demonstrates that the intervention is economically robust, achieving high gains no matter what the assumption about the future is. Figure A.6.1. Histogram of the Benefit-Cost Ratio of 100 Latin Hypercube Simulations Frequency (out of 100 simulations) Benefit-Cost Ratio Key Drivers and Vulnerabilities of Economic Performance 13. A closer analysis of the benefits reveals that the key drivers of benefits are the timesaving from more convenient water and sanitation (on average, 39 percent of total benefits) and households’ reduced expenses on water (on average, 52 percent of total benefits). 14. 15. Figure A.6.2 shows a boxplot of this metric over the full 100 simulated cases. This suggests that during implementation, decision-makers should give added consideration to neighborhoods for which convenience and water-expense benefits are expected to be significant. Figure A.6.2. Boxplot of Percent of Total Benefits Derived from Added Convenience (left) and Cost Savings (right) 58 Percent of Total Benefits Convenience Benefits Water Expense Benefits 16. The analysis also assessed the cost threshold at which the Project no longer meets economic performance targets. A second simulation was conducted, this time increasing the potential range of costs to US$3,000 per household, much higher cost than any estimate in the literature or provided by the MGCS stakeholders. A data mining analysis of these 100 simulations reveals that the cost-benefit ratio of Projects was at least 1 as long as the initial cost of the intervention was below US$2,000 per household. This threshold serves as a useful benchmark during implementation – decision-makers should seek to keep costs below US$2,000 per household and give added consideration to neighborhoods where the intervention can be implemented below this threshold. Equally importantly, the analysis reveals that other uncertain parameters – for example, related to health outcomes, discount rates, value of time – are much less important in distinguishing between when the water and sanitation interventions meet or fail to meet economic performance targets. The economic vulnerabilities and strengths of the proposed water and sanitation interventions can be understood without knowing the values of these parameters. This helps to focus attention on the parameters that matter for decision- making: the convenience benefits, cost benefits, and initial implementation costs. These parameters also help identify some of the characteristics that decision-makers should consider when selecting neighborhoods and designing the proposed interventions. 17. In sum, the analysis shows that:  the water and sanitation interventions are robust – having a cost-benefit ratio of at least 1 under nearly all plausible assumptions about deeply uncertain parameters;  the convenience benefits from sanitation and the water expense savings from municipal piped water make up the large majority of total benefits; and  the water and sanitation interventions must cost less than US$2,000 per household – a threshold well above the costs documented in the literature – in order to have a cost-benefit ratio of at least 1. 59 15. In addition to the analysis presented above, a rigorous economic cost-benefit analysis was calculated thorough hedonic pricing, a common method used in urban upgrading projects. It reveals the estimated marginal benefits, per house, for each of each goods or services improved by the Project. Ideally, hedonic pricing models use an updated cadaster to produce reliable results. While efforts were made to obtain reliable data of sufficient granularity, only the 2010 Household Survey provided reliable and detailed data. The survey collects data on property attributes, access and quality of public services, and household expenditures, including rent (paid or estimated, if property is owned). The costs and beneficiaries were obtained from two actual contracts for executed works that contained the required information and were also similar to interventions likely to be financed by the Project: a water and sanitation project in Villa Nueva benefitting 409 households, and the replacement of 3,887 street lamps in Villa Canales, relating it to increased sense of safety. 16. The hedonic pricing model revealed that having a water connection, waste collected, an own toilet and perception of security all had a positive effect on the value of a property. The net present value of the water intervention in a ten-year horizon was positive and estimated at GTQ 22,817 equivalent to over US$2,900, while that of the street lighting project was also a positive GTQ.7,984, or US$1,025. Depending on the interventions ultimately financed by the Project, it is expected to increase water coverage and water quality, reducing out-of-pocket expenditures for households while also translating into more valuable properties. Safety is a huge concern in the area, and projects that address the perception of security will also improve the value of people’s properties, reflecting a better quality of life. 17. Sensitivity and risk analyses were performed. The first proved robust even after changing several variables at the same time. The risk analysis was performed in collaboration with the office of the Chief Economist of Sustainable Development Network. It proved that the intervention is economically sound under nearly all assumptions. Moreover, the analysis may understate the actual benefit-cost ratio, given that the economic model does not include all types of benefits. 18. The World Bank’s added value is threefold, providing the MGCS and the country with: (a) an integrated approach in urban upgrading interventions; (b) improved public institutions and processes that can be replicated by other Mancomunidades; and (c) competitive funding. These investments will accrue benefits over a long period of time and will not crowd out the private sector, hence the importance of a long-term partner to advocate for, and finance, their provision. The rationale for public involvement stems from the inherent nature of water and sanitation and security as public goods. As such, regular market structures and incentives do not apply, and it is necessary for the public sector to provide these services, or complement the private sector where these services are already present. Even in the case of water provision, where coverage is high and the private sector’s presence is strong, their service is considerably more expensive, and of the same quality. In addition, it is only the public utility that provides sanitation services, likewise with street lighting. Public health and safety concerns thus justify public sector involvement. 60 Annex 7: Map of Proposed Project Areas GUATEMALA: Urban Infrastructure and Violence Prevention Project (P143495) 61