Public Disclosure Authorized...2011/12/09 · despite large royalty revenues from La Guajira‟s...
Transcript of Public Disclosure Authorized...2011/12/09 · despite large royalty revenues from La Guajira‟s...
Document of The World Bank
FOR OFFICIAL USE ONLY
Report No: 64938-CO
RESTRUCTURING PAPER
ON A
PROPOSED PROJECT RESTRUCTURING
OF THE
COLOMBIA: LA GUAJIRA WATER AND SANITATION INFRASTRUCTURE AND SERVICE MANAGEMENT PROJECT
(Loan 7434-CO)
TO THE DEPARTMENT OF LA GUAJIRA
WITH THE GUARANTEE OF THE REPUBLIC OF COLOMBIA
November 30, 2011
Sustainable Development Department Colombia and Mexico Country Unit Latin America and the Caribbean Region
This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank’s Policy on Access to Information.
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Abbreviations and Acronyms
EA Environmental Assessment
EMP Environmental Management Plan
EAAB Bogota Water and Sewerage Company
(Empresa de Agua y Alcantarilladlo de Bogotá)
Gerencia Project Management Agency under PDA Program
ISR Implementation Status Report
IPP Indigenous Peoples Plan
IFR Interim Financial Report
MAVDT Ministry of Environment, Housing and Territorial Development
(Ministerio de Ambiente, Vivienda, y Desarrollo Territorial)
MVCT Ministry of Housing, Cities, and Territories
(Ministerio de Vivienda, Ciudades, y Territorio)
NGO Non- Government Organization
OP Operational Policy
PDA Departmental Water Plan
(Plan Departmental de Agua)
PGEI General Strategic Plan of Investments
(Plan General Estratégico de Inversiones)
PDO Project Development Objective
RAP Resettlement Action Plan
SOE Statement of Expenses
SGP General System of Participation
RESTRUCTURING PAPER
COLOMBIA: LA GUAJIRA WATER AND SANITATION INFRASTRUCTURE AND
SERVICE MANAGEMENT PROJECT
TABLE OF CONTENTS
1. Summary ........................................................................................................................................................ 1
2. Project Status and Background ............................................................................................................. 1
3 Proposed Changes ....................................................................................................................................... 2
4. Appraisal Summary ................................................................................................................................... 6 A. Institutional and Implementation Arrangements: .............................................................. 6
B. Implementation Schedule .................................................................................................. 6
C. Financial Analysis: ............................................................................................................ 7
D. Technical Analysis: ........................................................................................................... 7
E. Safeguard Analysis: ........................................................................................................... 9
F. Financial Management ..................................................................................................... 13
G. Procurement: .................................................................................................................... 14
5. Key Risks and Mitigation Measures.................................................................................................. 14
Annex 1: Results Framework and Monitoring .................................................................................. 16
Annex 2: ISR Ratings and Key Milestones for Project Supervision in 2012 .......................... 21
DEPARTMENT OF LA GUAJIRA
WATER AND SANITATION INFRASTRUCTURE AND SERVICE MANAGEMENT
PROJECT
RESTRUCTURING PAPER
DATA SHEET
1. Basic Information
Project ID & Name P096965: CO (APL1) La Guajira Water and Sanit.
Country Colombia
Task Team Leader Greg J. Browder
Sector Manager/Director Guang Zhe Chen
Country Director Gloria M. Grandolini
Original Board Approval Date 03/15/2007
Original Closing Date: 10/15/2011
Current Closing Date 12/31/2011
Proposed Closing Date [if applicable] 10/15/2015
EA Category B-Partial Assessment
Revised EA Category B-Partial Assessment-Partial Assessment
EA Completion Date 02/15/2006
Revised EA Completion Date N/A
2. Revised Financing Plan (US$m)
Source Original Revised
BORR 50.00 50.00
IBRD 90.00 90.00
MUNI 10.20 10.20
OLBC 8.00 8.00
Total 158.20 158.20
3. Borrower
Organization Department Location
Gobernación del Departamento de
La Guajira Colombia
4. Implementing Agency
Organization Department Location
Gerencia Plan Departamental de Agua
de La Guajira Colombia
5. Disbursement Estimates (US$m)
Actual amount disbursed as of 12/02/2011 10.00
Fiscal Year Annual Cumulative
2011 10.00 10.00
2012 0.00 10.00
2013 20.00 30.00
2014 40.00 70.00
2015 20.00 90.00
Total 90.00
6. Policy Exceptions and Safeguard Policies
Does the restructured project require any exceptions to Bank policies? N
Does the restructured projects trigger any new safeguard policies? If yes, please select from the
checklist below and update ISDS accordingly before submitting the package.
N
7a. Project Development Objectives/Outcomes
Original/Current Project Development Objectives/Outcomes
The original PDO is to improve the quality of water supply and sanitation services in urban and peri-urban areas of
the Borrower‟s territory by: (a) supporting utility institutional performance through the use of “specialized
operators”; and (b) delivering the necessary water and sanitation infrastructure.
7b. Revised Project Development Objectives/Outcomes [if applicable]
The PDO has been slightly modified to include rural areas in its geographic scope as follows: “to improve the quality
of water supply and sanitation services in urban, peri-urban, and rural areas of the Borrower‟s territory by: (a)
supporting utility institutional performance through the use of “specialized operators”; and (b) delivering the
necessary water and sanitation infrastructure.”
1
DEPARTMENT OF LA GUAJIRA
COLOMBIA: LA GUAJIRA WATER AND SANITATION INFRASTRUCTURE AND
SERVICE MANAGEMENT PROJECT
RESTRUCTURING PAPER
1. Summary
1. The Project is a US$90.0 million investment loan approved by the Board on March 15,
2007 to the Department of La Guajira (Borrower) with a sovereign guarantee by the Republic
of Colombia. The Project experienced start-up delays which have now been addressed, and
the Regional Vice President has approved the associated Project closing date extension from
December 31, 2011 to October 31, 2015.
2. There has been a fundamental change in Colombia‟s water policy since the Project was
approved. In late 2008, the Ministry of Environment, Housing, and Regional Development
(MADVT)1 issued Decree 3200 which provides the regulations for the national program
referred to as Department Water Plans (Plan Departmental de Agua-PDA). Under the original
Project design, the municipal governments, through their specialized water operators, were
responsible for implementing urban infrastructure investments. In order to align the Project
with national policy and facilitate implementation, it is proposed to modify organizational
arrangements to allow the Department to execute all Project components.
3. This is a proposed first-order restructuring as the PDO description has been slightly
modified, there are adjusted organizational arrangements, and a new safeguard policy, Dam
Safety-OP4.37, was triggered in 2009.
2. Project Status and Background
4. The Project was designed as a pilot to start up Colombia's national PDA program. In
Colombia, water service is the constitutional responsibility of the municipal government, and
the main thrust of the PDA program is to empower the 32 Colombian departments
(intermediate level of public administration, akin to provinces) to play a greater role in the
planning and oversight of for water services. The Project is an important and strategic element
of the Bank‟s engagement in Colombia‟s water sector and, more broadly, is linked to the
critical governance and poverty agendas in Colombia's lagging regions.
5. La Guajira is one of Colombia‟s less developed regions with a high incidence of poverty,
low performance in terms of service provision, and public sector management challenges, all
despite large royalty revenues from La Guajira‟s abundant endowment of natural resources,
primarily coal. Water and sanitation coverage rates for the urban areas of La Guajira stand at
68% and 35%, respectively, compared with Colombia‟s average of 88% and 74%. In this
context, the Bank was requested by the national government to help design and supervise a
1 In late 2011, MADVT was split into two ministries, with the new Ministry of Housing, Cities, and Territories
(MVCT) assuming responsibility for the urban water sector. The term MADVT will be maintained in this
Project Paper for consistency.
2
program to improve the quality of service delivery in light of the challenging governance
environment. The operation was seen as a high-risk, high-reward project and the Bank‟s
deliberative process focused on these challenges, particularly in terms of the governance,
fiduciary, and safeguards issues. The project documentation (PAD, etc.) was explicit on the
riskiness of the engagement. The Bank‟s engagement remains important to the Government
which values the Bank‟s implementation support.
6. The key design feature of the Project and the PDA program in general, is the appointment
of an external project management agency (hereafter referred to as the Gerencia) to manage
the sector on behalf of the department. Due to procurement delays, the La Guajira Gerencia
was not mobilized until early 2010 and then performed below expectations. In April 2011,
the Gerencia undertook a fundamental reorganization with new staff and management
oversight. The Department is now programmed to execute approximately US$152 million of
works over the period 2011-2014, a significant percentage of which would be financed with
the Bank loan.
7. As of June 2011, the date of the last financial management report, approximately US$17
million (COP $35 billion) of investment has been accumulated under the Project. The most
recent Implementation Status Report (ISR) ratings show overall implementation as
moderately satisfactory and progress towards PDO as moderately unsatisfactory due to delays
in improving water supply service. The PDO objectives will continue to be achievable after
the Project restructuring and within the proposed period.
3 Proposed Changes
8. All of the proposed changes have been incorporated into the Project Operations Manual
and endorsed by the Project Executive Committee. The Bank has provided its no-objection to
the Operational Manual, contingent on the execution of the Loan Amendment.
9. Project Development Objective: The PDO has been slightly modified to include rural
areas in its geographic scope as follows: “to improve the quality of water supply and
sanitation services in urban, peri-urban, and rural areas of the Borrower‟s territory by: (a)
supporting utility institutional performance through the use of “specialized operators”; and (b)
delivering the necessary water and sanitation infrastructure.” Rural areas were included in the
revised PDO because Component 2: Rural Pilot Projects has been fully defined since the
Project was initially approved. A new PDO indicator for this activity is included in the
Project Monitoring Framework.
10. Closing Date: In September 2011, the MHCP and DNP endorsed the proposed Project
restructuring and recommended a Closing Date extension until October 15, 2015. With this
endorsement, the Borrower submitted a request to the Bank for both a short-term extension
until December 31, 2011 to allow time for Loan Amendment processing and a long-term
extension to October 15, 2015. The Bank notified the Borrower on October 7, 2011 in
response to its request to extend the Loan closing date to December 31, 2011. The Regional
Vice President has approved the associated Project closing date extension to October 31,
2015.
3
11. The Project was originally designed to be implemented in four years, which was
unrealistic given the complexity of the design and the political complications of a change in
administration. The organizational arrangements are now in place for much improved
implementation, but executing the investment program and improving water service
performance is still expected to require an additional four years.
Project Components: Each of the components and proposed changes are described below:
12. Component 1: Urban Water Supply and Sanitation Infrastructure: There are no changes
to this component, although the specific procedures and requirements for urban infrastructure
requirements have been modified as described below.
13. Component 2: Rural Pilots: The original Project design did not identify the specific pilot
projects, as it was recognized that the consultation process with indigenous communities
would take considerable time and was best left to the implementation phase. In 2009, the
Department developed a “small rural reservoir program” consisting of the construction of
approximately 11 small reservoirs to supply water for adjacent indigenous rural communities
in the municipality of Uribia. As of November 2011, ten of the eleven small reservoirs have
been constructed or are in the process of being constructed, and are financed entirely with
counterpart-funding. The Amendment will incorporate the rural reservoirs in the description
of Component 2 as rural pilot projects, and Bank financing will be used to construct ancillary
infrastructure, such as small water treatment plants, conveyance facilities, and storage tanks,
and develop organizational and financial mechanisms to ensure sustainability of the
reservoirs. In addition, the Amendment will require the Borrower to specifically designate one
person reporting to the Gerencia to serve as the coordinator for the rural reservoir program.
14. Component 3: Project Management and Analytical Activities: There is no change in this
component, although the Amendment will explicitly clarify that this component finances the
costs of the Gerencia’s services.
15. Implementation Arrangements: The original Project design called for the Department
of La Guajira to enter a financial support agreement (Convenio) with each participating
municipality. The Convenio would specify the amount of grant financing provided by the
Department for urban infrastructure works in Component 1. Under this scheme, a specialized
water operator—which has a contract with the municipal government, would be responsible
for contracting the infrastructure works. The Department would establish a Project
Implementation Unit (PIU) to supervise and support the specialized water operators.
16. In August 2008, there was a fundamental policy change in the Colombian water sector
when the MADVT issued Decree 3200 which provides the regulations for the national
program referred to as Planes Departamentales de Agua (PDA). Under the PDA program,
which was inspired by the La Guajira Project, department governments were given the right
and encouraged to directly implement infrastructure works in municipalities, provided there
was agreement between the municipality and the department, i.e, a Convenio.
4
17. In late 2008, the Department of La Guajira, through a formal agreement with MADVT,
formally entered into the PDA program. At this point, the Bank-financed Project and the La
Guajira PDA became essentially synonymous. Per the national PDA regulations, the
Department of La Guajira established an external project management agency—the Gerencia.
The fundamental change in implementation arrangements in the Amendment consists in
specifying that Gerencia will supplant the PIU, and the Department with the assistance of the
Gerencia will be responsible for contracting infrastructure works.
18. Since the original Loan Agreement contemplated that the specialized water operators
would be responsible for contracting under the Project, there was a series of additional
requirements, in the form of sub-agreements, between the Department (the Borrower), the
municipalities, and the operators that would bind them follow the provisions of the Loan
Agreement. Since the Borrower is now implementing all aspects of the Project with support
from its Gerencia, the Amendment simplifies that matter and removes these requirements.
19. Procurement: Due to the changes in implementation arrangements, all of the
procurement will be undertaken by the Department through the Gerencia. This arrangement is
consistent with the prevailing national PDA regulations, and will also ensure more efficient
and standardized procurement procedures. Under the original Loan Agreement, all contracts
regardless of size are subject to Bank prior review. The Amendment will allow the
Procurement Plan to specify prior review requirements.
20. Requirements for Municipal Participation in the Project: The basic requirement in
the original Loan Agreement for municipalities to participate in the Project will be maintained
and are as follows:
i. the municipality must enter into a Financial Support Agreement (Convenio) with the
Department that meets PDA requirements;
ii. the municipality must have an acceptable contract with a specialized water operator;
and
iii. the contract with the specialized water operator must include acceptable performance
standards consistent with the increased investment and technical assistance provided
by the Project.
21. In every single case, a municipality must meet the first requirement and enter into a
Convenio with the Department in order to participate in the Project. In practice, quickly
meeting the second and third requirements has in some specific circumstances proved
difficult. Therefore the Amendment will allow the Project Executive Committee, with the
approval of the Bank, to temporarily relax the second and third conditions to allow for more
flexibility in implementing in the Project.
22. The table below shows that as of this date only five of the 15 La Guajira municipalities
have entered into Convenios with the Department. Fortunately, this includes the two largest
municipalities, Riohacaha and Maicao, which collectively account for 75% of the urban
population in La Guajira. It is anticipated that at least 3 more municipalities will participate in
the Project.
5
N. Municipality Urban PDA PDA PDA Convenio: Specialized
Operator
Service
Standards Population Invest.
(US$Mil)
Invest.
(COP
M)
% Municipality
Department
Municipalities with Convenios as of November 2011
1. Riohacha 178,162 42,864 81,441 28% Yes Aguas la Guajira
No
2. Maicao 97,109 22,944 43,594 15% Yes Aguas de Peninsula
Yes
3. Fonseca 19,84 9,152 17,388 6% Yes Aguas del Sur Yes
4. Manaure 12,423 13,844 26,303 9% Yes EAAA de Manaure No
5. Uribia 10,080 12,742 24,210 8% Yes AAA de Uribia
No
Municipalities without Convenios as of November 2011
6. Barrancas 15,247 4,956 9,417 3% No Aguas del Sur No
7. Distracción 4,286 3,064 5,822 2% No Aguas del Sur
No
8. El Molino 5,711 1,612 3,062 1% No Aguas del Sur
No
9. Hatonuevo 11,285 3.159 6,001 2% No Aguas del Sur No
10. San Juan
Cesar
22,643 14,949 28,403 9% No Aguas del Sur
No
11. Villanueva 18,836 9,418 17,895 6% No Aguas del Sur
No
12. Albania 11,962 1,906 3,621 1% No APC de Albania
No
13. Urumita 8,842 2,840 5,397 2% No EAAA Urumita
No
14. Dibulla 4,286 398 757 0.3% No Aguas de Dibulla
No
15. La Jagua 2,212 673 1,279 0.4% No ESP de La Jagua
No
16. Others 7,576 14,395 5%
TOTAL 422,924 152,097 288,985 100%
Total Convenios 317,614 101.546 192.936
% Convenios 75,10% 66,76% 66,76%
Safeguards:
23. Dam Safety Policy: The Dam Safety Policy (OP4.37) was not originally triggered by the
Project, but the inclusion of the rural reservoir program as pilot projects in Component 2
activated the policy in 2009. As of November 2011, ten of the eleven small reservoirs have
been constructed or are in the process of being constructed, and are financed entirely with
counterpart-funding provided by the Department. The Amendment will incorporate the rural
reservoirs in the description of Component 2 as rural pilot projects, and Bank financing will
be used to construct ancillary infrastructure, such as small water treatment plants, conveyance
and storage facilities, and develop institutional mechanisms to ensure sustainability of the
reservoirs and their associated dams. All of the dams in the program are defined as small
dams requiring generic dam safety measures (See Section 4.E for more information).2
2 The International Commission on Large Dams (ICILD) defines a large dam as: i) a dam over 15 meters in
height; or ii) if the dam is between 10-15 meters and reservoir capacity more than 1 million m3.
6
4. Appraisal Summary
A. Institutional and Implementation Arrangements:
24. During the first year of the Gerencia in 2010 there was considerable confusion and lack
of clarity between the role of the Department and its Gerencia. The Gerencia is a consortium
led by the Bogota Water and Sewerage Company (EAAB) and its subsidiary consulting
company, Aguas de Bogotá. In September 2011, the final version of the Operation Manual
was submitted to the World Bank which clearly defines the roles and responsibilities of the
Department and the Gerencia. Elections at the departmental and municipal level in Colombia
took place on Oct. 30, 2011 and new administration in La Guajira will assume office in
January 2012. The continuity of the Gerencia should help ensure a smooth transition between
administrations.
B. Implementation Schedule
25. The Regional Vice President has approved a closing date extension until October 15,
2015 contingent on Board approval of Project restructuring. Based on the analysis of the
implementation schedule conducted by the Bank, as well as analysis of the Colombian
National Planning Department (DNP), the Loan closing date would need to be extended by
approximately four years to October 15, 2015 in order to allow adequate time to
implementation of works as well as the necessary technical assistance to ensure improvements
in water services, the primary development objective of the Project. In addition, the new La
Guajira administration will serve until the end of 2015 and the proposed extension will allow
time for all the work to be completed within the term of the next administration.
26. The foundation of the investment program is based on the General Strategic Investment
Plan (Plan General Estrategico de Inversiones-PGEI) which was prepared by the Gerencia
and approved by the PDA Executive Committee (which includes MAVDT) in June 2010. The
PGEI presents a sector diagnostic, goals, and a strategic investment plan with a total cost of
approximately US$152 million (COP 288,955 million).
27. The analysis shows that the work program for the Project is well defined with most of the
works planned, designed, and packaged into specific contracts in the Procurement Plan. The
Bank-approved August 2011 procurement plan contains 31 works contracts worth US$80
million (US$25 million in execution) and an additional 32 consultant contracts worth US$22
million (US$9 million in execution). In total, the Procurement Plan (2012-2014) accounts for
approximately US$100 million of works and consultancies which will be implemented over
the period 2012-2014. Many of the consultancy contracts in the Plan are designed to prepare
an investment program for the period 2014-2015, which is tentatively estimated at US$40
million. Annex 2 contains the key milestones for 2012, which will be closely monitored to
ensure that the Project is proceeding as planned.
7
C. Financial Analysis:
28. Department Level: The delays in project implementation and extension in the Loan
closing date will modify the Borrower‟s forecast repayment schedule. The principle payments
will be lower than originally forecast between 2011 and 2014, and higher between 2014 and
2022 at the end of the repayment period. Counterpart funds for the project are pledged by the
Government of La Guajira through its royalty transfers from the Government of Colombia
and are controlled by an independent fiduciary agent. The Department of La Guajira should
therefore have sufficient funds for counterpart payments and loan repayments, only the timing
of the payments would change under the proposed extension.
29. Municipal Level: In order to enter into the La Guajira PDA/Project, the most important
step is signing the Department-Municipality Convenio. As of June 1, 2011 five municipalities
have signed Convenios with the Department government, accounting for 75% of the urban
population and 73% of the overall estimated overall PDA budget. It is expected that more
municipalities will join the PDA/Project in the coming years. Some municipalities are
reluctant to join the PDA, primarily because they must pledge future national government
transfers for water, through the Sistema General de Participacion (SGP), to an independent
fiduciary which is supervised by MAVDT and the Department through the PDA program.
This reduces local control over the financial transfers which some municipalities are reluctant
to agree to.
30. Operator Level: There are currently three main operators in La Guajira: i) Aguas de la
Guajira (Riohacha); ii) Aguas de la Peninsula (Maicao); and iii) Aguas del Sur (seven small
municipalities in the south). Aguas de la Peninsula and Aguas del Sur are owned by the same
group of investors, and have the same management team. All three operators are suffering
financially, have fragile working ratios and rely on supplementary revenue from construction
supervision services and municipal subsidies.
31. Financial forecasts indicate that Aguas de la Guajira and Aguas del Sur can achieve
financial equilibrium by improving water service, supported by the project investment and
better operational, commercial and social practices. Aguas de la Peninsula faces a
fundamental challenge due to lack of raw water supply, which limits the amount of water it
can sell. The Project will explore various alternatives to augmenting Maicao‟s water supply
(as well as Manure and Uribia). However, in both Manaure and Uribia the operators are
sustained only through municipal subsidies that prevent tariff increases. The operator in
Uribia recently undertook internal restructuring and could achieve financial equilibrium with
investment projects and enhanced operational, commercial and social practices. Conversely,
Manaure requires a complete structural reform of operational framework (e.g. mixed capital,
concession) given the company‟s serious service problems which have resulted in significant
liabilities and led to its current state of insolvency.
D. Technical Analysis:
32. Component 1: The proposed extension is intended to allow the operators to complete the
necessary investments and improve operational performance in order to meet the agreed-upon
8
performance indicators shown in Annex 1. In addition to the physical investments, it will be
necessary to improve operational performance. The Gerencia is providing technical support to
the specialized operators to help them meet their performance objectives.
33. The general conceptual approach is to move from intermittent water supply where
customers rely on household tanks or cisterns, to continuous supply 24 hours per day seven
days a week. Water supply systems are designed to provide continuous supply but without
proper maintenance and operation, critical components can deteriorate thus forcing the
operator to shift to intermittent supply generating a host of technical problems including poor
water quality and customer dissatisfaction—typically resulting in insufficient payment which
reduces operator revenues and reinforces the vicious circle.
34. The strategy for moving towards continuous service includes removing infrastructure
bottlenecks (raw water supply, treatment, conveyance, and distribution mains), sectorization
of the distribution network, pressurizing and employing micro-meters in one sector at time to
provide 24 hour continuous service, and a vigorous social outreach program to restore
confidence in the water service and encourage payment. The Gerencia will also work with
operators to improve their commercial systems, including metering, billing, and collection.
The recently completed ICR for the Colombia Water Sector Reform Assistance Project
(P065937) demonstrated that this is a viable approach and that a number of cities along the
Caribbean coast, generally with strong operators, have achieved resounding success with this
methodology
35. Component 2: Rural Water Pilot Program: In 2009, the Department and the National
Government developed a “small rural reservoir program” consisting of the construction of
approximately 11 small reservoirs in the municipality of Uribia. The rural reservoir program
is a priority national project to attend to the severe water shortages affecting indigenous
communities in La Guajira. As of November 2011, ten of the eleven small reservoirs
(Jotomana has not yet been constructed) have been constructed or are in the processing of
being constructed, and are financed entirely with counterpart-funding. The basic technical
features of the reservoirs are presented below:
9
36. There was an extensive consultation process with the indigenous communities, organized
by a non-governmental organization (Corporación para el Desarrollo Sostenible Ambiental-
CORDES) and the national government. The communities expressed strong demand and
support for the reservoirs during the consultation process. After the program had been
technically and environmentally approved by MAVDT, the Department requested the Bank to
include the program in the Project under Component 2 in order to enhance the program and its
sustainability. The reservoirs are located in Uribia municipality in upper La Guajira and are
difficult to access with no paved roads, frequent washouts of the dirt trails leading to the sites,
and persistent security concerns.
37. The rural reservoir program has been divided into two phases. The first sub-component is
the actual construction of the reservoirs which is being financed entirely by the Department
through funds provided by the national government. In order to ensure a sustainable program,
it was agreed that the reservoir program would be incorporated into the Project as the pilot
projects under Component 2, which would finance the second phase which focuses on
providing sustainable water supply and sanitation services and includes construction of
ancillary facilities (treatment, storage tank, distribution, etc.) and developing institutional and
financial arrangement to ensure sustainability of the project. The Cerrejon Fundacion de
Agua has signed an agreement with the Department to help provide technical assistance
related to the second phase. Cerrejon is one of the largest coal mines in the world, and has
established the Fundacion de Agua to provide support to indigenous communities in its area
of influence. The Fundacion de Agua will work closely with the Gerencia in the
implementation of the rural pilot projects.
E. Safeguard Analysis:
38. The Project ISDS has been updated and disclosed to reflect the issues below. The
restructuring operation will have an environmental category of "B" which is the same as the
original operation.
AMULAMANA 7 7.2 223,363 450 306,283
LA GRAN VIA 11.75 4.4 184,769 304 425,190
PUERTO VIRGEN 60.75 8.7 1,671,622 800 812,175
UTAIKALAMANA 22.05 9 245,086 652 378,636
SHAPURRAITU 10.87 6.3 146,252 500 310,422
JOTOMANA 5.1 12 231,450 1500 725,488
MAIWO 10,60 12 475,622 450 766,057
WUINMUCHASTIRRA 1,38 6.52 20,413 350 367,611
MORROCOMANA 25,89 8.81 787,113 550 522,352
KAIWA 1,55 98,447 831 718,831
MAURARU 11,57 7.5 257,244 750 707,763
Total 7,137 6,040,808
Volume (m3)
Cost (US$)
Population BenefitedHeight (m)Reservoir
Area (Ha)Reservoir
10
39. Indigenous Peoples Policy (OP/BP 4.10): The Borrower prepared an Indigenous
Peoples Planning Framework in 2007 to meet the Bank´s appraisal requirements. During
Project implementation, three sub-projects have triggered this policy:
i) Rural reservoir program in Component 2 involving 11 small reservoirs for indigenous
communities with a total beneficiary population of around 7,000 people. The Borrower
has prepared and Indigenous Peoples Plan (IPP) for the rural reservoir program which has
been approved by the Bank and disclosed in the Infoshop on June 15, 2011 and locally on
August 2, 2011.
ii) Wastewater treatment lagoons in Riohacha, requiring the resettlement of approximately
100 indigenous families. The Borrower has also prepared a document which serves as
both an IPP and a Resettlement Action Plan (RAP) for the Riohacha wastewater treatment
lagoons which has been approved by the Bank and disclosed in the Infoshop on August
12, 2011 and locally on August 2, 2011.
iii) New wastewater treatment lagoons in Maicao, potentially affecting approximately 25
indigenous households. The Borrower is in the process of formulating the IPP for this
subproject. Finalization of the IPP will depend on the results of consultations and
agreement reached between the Ministry of Interior and Justice and the potentially
affected indigenous community. One of the considerations in these consultations will be
the determination of the area of environmental influence of lagoons which the regional
environmental authority, Corpoguajira, is currently studying. The Gerencia is in close
communication with the municipal water operator, the Ministry of Interior, and
Corpoguajira on these issues.
The Maicao water operator (Aguas de la Pennisula) currently operates existing
wastewater treatment lagoons within the urban area of Maicao; the existing lagoons are
undersized and generate an environmental nuisance for the surrounding community. The
Operator is under court order to close down the existing lagoons, and construct new
lagoons outside of the existing urban area. The Operator has purchased a suitable plot in a
rural area, and the local indigenous community has permitted to construction to proceed
while consultations are underway. The Gerencia has initiated the IPP preparation for this
subproject and will rapidly finalize the IPP after the Ministry of Interior completes their
consultations. The Loan Amendment shall include a covenant requiring the IPP to be
completed before the Maicao wastewater treatment lagoons are put into operation.
40. Involuntary Resettlement Policy (OP/BP 4.12): The Borrower prepared a Resettlement
Policy Framework in 2007 to meet the Bank‟s appraisal requirements. During Project
implementation, the wastewater treatment lagoons subproject in Riohacha, involving the
resettlement of approximately 100 indigenous families, activated the policy. The Borrower
has prepared an acceptable RAP for the subproject which has been approved by the Bank and
disclosed in the Infoshop on August 12, 2011 and locally on August 2, 2011.
11
41. Projects on International Water Ways (OP 7.50): Although the Bank task team has
determined with the Gerencia that the Project will not affect the quantity or quality of waters
to other riparian states, OP 7.50 requires that all riparian states be informed of the planned
investments under Bank-financed projects. The municipality of Maicao in La Guajira lies
within the Carraipla-Paraguachon watershed which is shared by Colombia and Venezuela.
During Project preparation, it was envisioned that the Project would finance small water
supply and sanitation works in Maico. In compliance with OP 7.50, on September 28, 2006
the Government of Colombia, through MADVT, notified the Government of Government of
the proposed Project. There has been no response from the Venezuelan government.
42. The Project will finance wastewater collection works in the La Guajira municipality of
Maicao. The collected wastewater will be conveyed to a new wastewater treatment lagoon
system located on the outskirts of the Maicao. The lagoons are expected to become
operational in 2012. The treated effluent from the lagoons, with an average flow of
approximately 0.18 m3/s, will be discharged into a normally dry stream bed which runs
northward in Colombian territory before terminating in the desert still within Colombia. The
dry stream bed is generally parallel to the Venezuelan border which is approximately 1-2
kilometers to the east. There is not expected to be any measurable impact on water quality or
quantity in Venezuela due to the treated effluent. The Colombian government, through the
Ministiy of Foreign Affairs, notified the Venezuelan government on February 17, 2011 of the
proposed Maicao wastewater treatment lagoons and offered to provide additional technical
information upon request. To-date, the Venezuelan government has not responded to the
notification.
43. Safety of Dams (OP4.37): In 2009, the Department and the National Government
developed a “small rural reservoir program” consisting of the construction of approximately
11 small reservoirs in the municipality of Uribia. The rural reservoir program is a priority
national project to attend to the severe water shortages affecting indigenous communities in
La Guajira. As of November 2011, ten of the eleven small reservoirs have been constructed or
are in the process of construction, and are financed entirely with counterpart-funding.
44. The original design for the reservoir dams was prepared by local NGO (CORDES) and
approved by the MADVT. During the first Bank site visit to the two of the reservoirs in
February 2010, it was clear that there were deficiencies in the construction supervision and
design. The reservoir civil works contract was suspended until these issues could be
addressed. In mid-2010, the Gerencia‟s contract was modified to include design review and
construction supervision of the rural reservoir program. In order to comply with OP 4.37, the
Gerencia has prepared a Dam Safety report which summarizes how the design and
construction issues are being addressed, and provides a general framework for future dam
safety operations and maintenance. The Dam Safety report has been found to be acceptable by
the Bank. In general, no major embankment stability problems have been identified, however
there are deficiencies in the design of the spillways and the water intake structures which are
being corrected. The long-term maintenance of the structures is a concern due to limited
capacity of the communities, and the Loan Amendment includes a covenant requiring the
Borrower to ensure the formulation and implementation of a Dam Management and
Sustainability Plan for the Rural Reservoir Program by no later than December 31, 2013.
12
45. Environmental Assessment (OP4.01): In 2006 as a condition of Project approval, the
World Bank approved the Project Environmental Assessment Report, which included the
Environmental Management Plan. The Report was disclosed in the Infoshop on January 1,
2007 and locally on June 26, 2007. In addition, the Gerencia has developed an environmental
management system based upon its experience with water and sanitation projects in Bogota.
The main document governing the environmental management system is the “Guide for
Managing Environmental Impacts in Urban and Rural Areas for the La Guajira PDA.”
Construction contracts will include the relevant environmental management requirements, and
a Construction Supervision Manual has been prepared by the Gerencia which specifies how
environmental management actions are to be monitored and confirmed. As of mid-2011, the
Gerencia is still in the process of incorporating good environmental practices into its
construction and supervision contracts. The Bank is closely monitoring the Projects
environmental management activities and offering technical assistance as required.
46. Specific subprojects under the Project require Environmental Assessments under
Colombian law, which must be approved by the relevant environmental authorities. To date,
the Riohacha and Maicao wastewater treatment lagoons have required environmental license
from the regional environmental authority, Corpoguajira. The Department completed its
environmental assessment for the Riohacha wastewater treatment lagoons and received its
environmental license from Corpoguajira in 2004 (Resolución No.049). The environmental
license was provided before the Bank-financed project was even conceptualized. After
approval of the Bank project in 2007, the Bank requested the Department of La Guajira to
undertake a study of wastewater treatment alternatives, including submarine disposal with
preliminary treatment. The Riohacha Wastewater Treatment Study (September 2007)
confirmed wastewater treatment lagoons as the preferred alternative.
47. The Maicao wastewater treatment lagoons subproject received its environmental license
from Corporguajira in 2008 (Resolución 1382). During the initial stages of construction,
however, local indigenous communities requested that the discharge point for the treated
effluent be moved to another location. The specialized water operator for Maicao (Aguas de la
Peninsula) is currently investigating other discharge points, which would necessarily require a
modification of the environmental license.
48. The rural reservoir program was also subjected to environmental review and is under the
environmental management of the Gerencia. The selection and project preparation for each of
the 11 reservoirs was undertaken by a local NGO (CORDES) in consultation with the local
communities and with the guidance of the regional environmental authority, Corpoguajira.
Due to the relatively small size of the reservoirs, a formal environmental license was not
required. However, for each reservoir CORDES prepared an environmental management plan
which was reviewed and approved by Corproguajira. The Gerencia is currently supervising
the implementation of the environmental management plan by the contractors constructing the
reservoirs. In addition, to managing the construction environmental impacts, there are also
some potential operational environmental issues, particularly with respect to water quality and
salinity, control of aquatic vegetation, and maintenance of the reservoir embankments. The
13
Gerencia will continue to monitor the environmental conditions during the operation phase
and take mitigation actions where necessary.
49. Natural Habitats (OP4.04). According to the EA and the Gerencia’s „Guide for
Managing Environmental Impacts,” if any natural habitats (as defined by OP 4.04) could
potentially be significantly degraded or converted either directly or indirectly as a result of the
Project, the screening criteria will assess for this possibility, and accompanying environmental
management guidelines ensure that sub-projects would be in compliance with OP 4.04. To
date, no subproject has triggered this policy.
50. Cultural Property (OP4.11). In accordance with Bank‟s policies, the Project has
adapted and will apply existing good practice guidelines for screening of sub-project locations
and chance find procedures. The procedures are codified in the Gerencia’s „Guide for
Managing Environmental Impacts,” are in compliance with OP4.11. To date, no subproject
has triggered this policy.
F. Financial Management
51. The Gerencia has overall responsibility for financial management under the Project,
including forecasting cash flow, authorizing payments, Bank reporting, and auditing. The
Department of La Guajira has contracted an independent Fiduciary, FiduBogota, under terms
of reference acceptable to the Bank, to manage fund flows, keep project accounting and
reporting in coordination with the Gerencia and the Department. Only FiduBogota handles the
loan funds, not the Gerencia or the Department. The Bank‟s financial management updated
review concluded that the ongoing FM arrangements among the Department, the Gerencia
and FiduBogota, provide proper assurance that the project funds are being executed under
Bank FM policies and procedures.
52. A comprehensive action plan for strengthening the Project‟s Financial Management
system was agreed from early 2011, and has been substantially complied with, by the
Gerencia and FiduBogota; the Financial Director of the Gerencia‟s lead consortium company
(Aguas de Bogota), has been a key staff in the process of FM action plan compliance. In
September 2011, the Gerencia‟s recent appointed finance sub-director resigned, creating a gap
in the local organizational structure, The Gerencia is in the process of hiring a new Financial
Sub-director. The Gerencia is also in the process of installing a Project Management software
system, which is expected to be fully operational by the end of 2011. The audit for the period
from the first Bank disbursement (December 2010) to the close of December 31, 2011 is in
process to be contracted. The overall financial management risk is considered to be
substantial.
53. The original 2007 Disbursement Letter specified the use of Financial Management
Report (FMR) as the mechanism for documenting expenses. Based upon the 2011 financial
management review of the Project, it was agreed to justify the expenses using the “Statement
of Expense” (SOE) procedure and the Disbursement Letter is being modified accordingly. In
addition, since FidoBogota cannot open the Project Account in US Dollars, the Bank loan
14
funds in US dollars deposited into the Designated Account, and then are converted to
Colombian pesos and transferred to FidoBogota‟s account.
G. Procurement:
54. A formal Bank evaluation of the procurement capacity of the Borrower was initiated in
mid-2011 and concluded that the Gerencia has adequate capacity to undertake the Project
procurement functions, although the overall procurement risk is still considered to be high.
Under the original Loan Agreement, all contracts regardless of size are subject to Bank prior
review. The Loan Agreement will be modified to allow the Procurement Plan to specify prior
review requirements. However all ICB contracts for works and goods and consultants‟
services above $200,000 shall be subject to Prior Review by the Bank. Nevertheless, given
the high procurement risk, the Procurement Plan will continue to specify that all contracts are
subject to prior review until a revised formal Procurement Assessment in the future
determines that the procurement risk has been reduced.
55. The Operations Manual contains a detailed description of the different procurement
procedures and functions, and the Gerencia is fully staffed with the necessary technical and
procurement staff, including a new procurement specialist. However, since most of the key
personal are still relatively new to the Project, the efficiency of the procurement system in the
Gerencia is still developing. Although the Gerencia has primary responsibility for carrying out
the procurement functions, the contracts are ultimately signed by the Governor of La Guajira,
and at times reviewed by different La Guajira government departments, creating
complications and duplication of effort. Although the procurement procedures are well
articulated in the Operations Manual, in practice there is a need to ensure better coordination
between the Department and the Gerencia.
5. Key Risks and Mitigation Measures
56. Exceptions to Bank Policy: No exemptions to Bank policy are requested.
57. Risk: The table below summarizes the proposed risks and mitigation measures. The
Project will remain a high-risk, high-reward project that will require intensive Bank (and
MVCT) supervision, resulting in well above average supervision costs. The potential rewards
include the provision of improved water and sanitation services to over 300,000 urban
residents and over 7,000 rural indigenous people. As importantly, a successful Project in La
Guajira would demonstrate that the PDA program can function successfully in a relatively
underdeveloped department such as La Guajira, which has historically suffered from
governance issues and low capacity. A successful Project would help support as well shape
future water policy in Colombia.
Annex 2 contains the key milestones for Project implementation in 2012, which will be
closely monitored by the Bank task team, MVCT, and the DNP. In the event the Borrower
cannot substantially meet these key milestones the Bank will consider taking appropriate
action on the Project, in consultation with the national government.
15
Description of Risk Risk
Rating
Mitigation Measure Residual
Rating
New LG Department Administration
(2012-2016) does not support
PDA/Project;
S LG has formally committed to PDA
through the Departmental Assembly
(ORDENANZA Nº 268 DE 2009)
LG has commitment with municipalities
through Convenios, including Riohacha
No reason to opt out of smoothly
performing project
M
Poor performance by Gerencia S Close supervision by World Bank and
MAVDT
Commitment by EAAB and Aguas de
Bogota to successful project
Stable Gerencia team in place
S
Dissatisfaction and complaints by
Indigenous Communities over
reservoir management and
sustainability issues
H Ensure reservoir construction quality
Implement IPP
Provide close supervision of reservoir
program
Support of Cerrejon Fundacion de Agua
S
Infrastructure investments will not
result in improved water and
sanitation service
H Gerencia will focus on both infrastructure
and technical assistance
Existing proven methodology for
improving service in Colombia
Close Bank and MAVDT supervision to
ensure an emphasis on service
improvement
Potential modification of Gerencia contract
to include incentive for improved service
performance.
S
Overall Risk Rating S
H = High; S = Substantial; M = Moderate; L = Low
16
Annex 1: Results Framework and Monitoring
Colombia: La Guajira Water and Sanitation Infrastructure and Service Management Project
Original Project Development Objective (PDO): Improve the quality of water supply and sanitation services in urban, peri-urban, of the Borrower‟s
territory by: (a) supporting utility institutional performance through the use of “specialized operators”; and (b) delivering the necessary water and sanitation
infrastructure.”
Revised Project Development Objective: Improve the quality of water supply and sanitation services in urban, peri-urban, and rural areas of the Borrower‟s
territory by: (a) supporting utility institutional performance through the use of “specialized operators”; and (b) delivering the necessary water and sanitation
infrastructure.”
PDO Level Results Indicators* Co
re
D=Dropped
C=Continue
N= New
R=Revised
Unit of
Measure Baseline
Cumulative Target Values**
Frequency Data Source/
Methodology
Responsibility for Data
Collection 2012
2013
2014 2015
Indicator One:
Number of Municipalities with Specialized Operators Participating
in the PDA/Project with Adjusted
Performance Standards
N
o
N
Number
0
2
4
5
6
Annual
Aide Memoires
Gerencia
Indicator Two:
Level of water service as measured
by the core indicators in Annex 1.
No
R
See Annex
1
U MU MS MS S Annual PAEI Gerencia
Indicator Three: Satisfaction Level of Indigenous
Communities with Reservoirs
N
o
N Satisfaction Level
N/A MS S After Construction
and End of
Project
Beneficiary Survey
Social Consultants for Reservoir PPI
PDO Indicator 2: Service Level Rating
1. Highly Satisfactory-HS: All Targets Achieved
2. Satisfactory-S: Improvements in All Indicators and At Least 5 Targets Achieved For Indicator Numbers 3-9
3. Moderately Satisfactory-MS: Improvements in all Indicators At Least 3 Targets Achieved For Indicator Numbers 3-9
4. Moderately Unsatisfactory-MU: Improvement in At Least 4 Indicators For Indicator Numbers 3-9
5. Unsatisfactory-U: Improvement in Less than 4 Indicators For Indicator Numbers 3-9
PDO Indicator 3: Satisfaction Level of Indigenous Communities with Rural Reservoir Program :
1. Highly Satisfied: Expectations realized with respect to water availability and quality
2. Satisfied: Expectations realized with respect to water availability, and partially with respect to quality
3. Moderately Satisfied: Expectations partially realized with respect to water availability and quality.
4. Moderately Unsatisfied: Expectations partially realized with respect to water availability but not quality.
5. Unsatisfied: Expectations not realized with respect to water availability and quality.
INTERMEDIATE RESULTS
17
Revised Intermediate Result (Component One): Construction of Water Supply and Sewerage Infrastructure
Intermediate Result indicator
One: Value of water supply and sewerage works constructed
N
o
New US$ millions 0 10 40 80 100 Annual Financial
Management Reports
Gerencia
Revised Intermediate Result (Component Two): Rural Water Supply Pilot Projects: Rural Reservoir Program
Number of Rural Reservoirs Constructed
N
o
C No. 4 (11)
8 (12)
11 (13)
11 (14)
11 (15)
Part 1-PDO 2: Core Indicators for Water and Sanitation Service Delivery:
Source: FINAL TARGET PDAG (Metas finales ajustadas), 25 August 2011. The goals correspond to the population-weighted values for the five
municipalities participating in the Project: Riohacha, Maicao, Fonseca, Uribia, and Manure. In the event that other municipalities join the Project
they will be accounted for in the same manner.
INDICATORS Unit 2011 2012 2013 2014 2015
1. Urban Population Hab. 327.635 337.876 348.354 359.050 378.403
2. Potential Subscribers # 69.444 71.538 73.678 75.858 80.873
3. Unaccounted for Water % 68,6% 58,7% 49,9% 41,8% 40,0%
4. Revenue Collection Rate % 35,1% 49,1% 56,3% 63,1% 63,1%
5. Water Supply Infrastructure Coverage % 67% 71% 77% 82% 86%
6. Continuity of Water Supply Service H/Day 8,8 10,5 13,7 18,7 19,7
% 37% 44% 57% 78% 82%
7. Household Micro-Metering # 14.532 29.950 41.255 51.881 64.122
% 21% 42% 56% 68% 79%
8. Wastewater Treatment Rate % 15,6% 22,7% 33,3% 73,2% 73,6%
9. Sewerage Infrastructure Coverage % 50% 53% 60% 62% 72%
10. Subscribers Water Supply Infrastructure # 46.446 51.116 56.488 62.178 69.687
11. Subscribers Sewerage Infrastructure # 34.484 37.798 44.450 46.829 58.344
18
Part 2-PDO Indicator 2 - ANNUAL GOALS BY MUNICIPALITIES
INDICATORS UNIT 2011 2012 2013 2014 2015
FONSECA
1. Urban Population Hab.
20.103 20.395 20.715 21.064 21.093
2. Potential Subscribers #
5.975 6.062 6.157 6.260 7.081
3. Unaccounted for Water %
80,0% 70,0% 55,0% 45,0% 40,0%
4. Revenue Collection Rate %
40,0% 48,0% 54,0% 65,0% 65,0%
5. Water Supply Infrastructure Coverage % 78,0% 84,0% 88,0% 90,0% 90,0%
6. Continuity of Water Supply Service (hrs/d) H/Day 14,0 18,0 24,0 24,0 24,0
7. Household Micro-Metering # susc 1.165 5.092 5.418 5.634 6.373
% 25,0% 100,0% 100,0% 100,0% 100,0%
8. Wastewater Treatment Rate % 30,0% 50,0% 80,0% 80,0% 80,0%
9. Sewerage Infrastructure Coverage % 60,0% 65,0% 75,0% 81,0% 81,0%
10. Subscribers Water Supply Infrastructure # 4.660 5.092 5.418 5.634 6.373
11. Subscribers Sewerage Infrastructure # 3.585 3.940 4.618 5.071 5.736
MAICAO
1. Urban Population Hab. 99.383 101.567 103.671 105.665 116.622
2. Potential Subscribers # 23.456 23.972 24.469 24.939 27.525
3. Unaccounted for Water % 60,0% 55,0% 50,0% 45,0% 40,0%
4. Revenue Collection Rate % 34,5% 44,5% 54,5% 63,0% 63,0%
5. Water Supply Infrastructure Coverage % 78,5% 82,0% 87,0% 90,0% 90,0%
6. Continuity of Water Supply Service (hrs/d) H/Day 7,0 7,0 10,0 12,0 12,0
7. Household Micro-Metering # susc 6.003 11.794 12.773 13.467 20.313
% 32,6% 60,0% 60,0% 60,0% 82,0%
8. Wastewater Treatment Rate % 30,0% 50,0% 80,0% 80,0% 80,0%
9. Sewerage Infrastructure Coverage % 51,4% 55,0% 75,0% 75,0% 75,0%
10. Subscribers Water Supply Infrastructure # 18.413 19.657 21.288 22.445 24.773
11. Subscribers Sewerage Infrastructure # 12.057 13.185 18.351 18.704 20.644
19
URIBIA
1. Urban Population Hab.
10.456 10.846 11.251 11.670 12.103
2. Potential Subscribers #
2.078 2.155 2.236 2.319 2.405
3. Unaccounted for Water %
100,0% 70,0% 60,0% 40,0% 40,0%
4. Revenue Collection Rate % 10,0% 30,0% 45,0% 63,0% 63,0%
5. Water Supply Infrastructure Coverage % 82,8% 79,9% 89,5% 100,0% 100,0%
6. Continuity of Water Supply Service (hrs/d) H/Day 2,0 7,0 10,0 16,0 16,0
7. Household Micro-Metering # susc 0 0 1.000 1.500 1.800
% 0,0% 0,0% 50,0% 64,7% 74,8%
8. Wastewater Treatment Rate %
60,0% 60,0% 60,0% 60,0% 70,0%
9. Sewerage Infrastructure Coverage % 80,1% 77,2% 80,5% 81,9% 83,2%
10. Subscribers Water Supply Infrastructure # 1.721 1.721 2.000 2.319 2.405
11. Subscribers Sewerage Infrastructure # 1.664 1.664 1.800 1.900 2.000
MANAURE
1. Urban Population Hab.
12.886 13.367 13.866 14.383 14.900
2. Potential Subscribers #
3.196 3.316 3.440 3.568 3.696
3. Unaccounted for Water %
100,0% 70,0% 60,0% 40,0% 40,0%
4. Revenue Collection Rate %
10,0% 45,0% 58,0% 63,0% 63,0%
5. Water Supply Infrastructure Coverage % 15,0% 30,1% 43,6% 75,7% 86,6%
6. Continuity of Water Supply Service (hrs/d) H/Day 2,0 7,0 10,0 16,0 16,0
7. Household Micro-Metering # susc
0 0 1.000 2.200 2.700
% 0,0% 0,0% 66,7% 81,5% 84,4%
8. Wastewater Treatment Rate %
70,0% 70,0% 70,0% 70,0% 70,0%
9. Sewerage Infrastructure Coverage % 31,1% 29,9% 28,9% 27,8% 50,0%
10. Subscribers Water Supply Infrastructure # 480 997 1.500 2.700 3.200
11. Subscribers Sewerage Infrastructure #
993 993 993 993 1.848
20
RIOHACHA
1. Urban Population X Hab. 184.807 191.701 198.851 206.268 213.685
2. Potential Subscribers X # 34.738 36.034 37.378 38.772 40.166
3. Unaccounted for Water
Dificil % 68,0% 58,0% 48,0% 40,0% 40,0%
4. Revenue Collection Rate
Dificil % 38,0% 53,0% 58,0% 63,0% 63,0%
5. Water Supply Infrastructure Coverage
Facil % 60,9% 65,6% 70,3% 75,0% 82,0%
6. Continuity of Water Supply Service (hrs/d)
Dificil H/Day 10,1 12,0 15,0 22,0 24,0
7. Household Micro-Metering
Dificil # susc 7.364 13.064 21.064 29.079 32.936
% 34,8% 55,2% 80,1% 100,0% 100,0%
8. Wastewater Treatment Rate
Facil % 0,0% 0,0% 0,0% 70,0% 70,0%
9. Sewerage Infrastructure Coverage
Facil % 46,6% 50,0% 50,0% 52,0% 70,0%
10. Subscribers Water Supply Infrastructure # 21.171 23.649 26.282 29.079 32.936
11. Subscribers Sewerage Infrastructure # 16.185 18.016 18.688 20.161 28.116
21
Annex 2: ISR Ratings and Key Milestones for Project Supervision in 2012
Recent ISR Ratings: The last three Implementation Status Ratings for the Project are
provided below.
ISR Date Implementation Progress Progress Towards PDO
October 4, 2011 Moderately Satisfactory Moderately Unsatisfactory
February 10, 2011 Moderately Unsatisfactory Moderately Unsatisfactory
May 14, 2010 Moderately Unsatisfactory Moderately Unsatisfactory
Project Monitoring Framework for 2012: Given the recent poor ISR ratings, the Project
will be closely monitored in 2012 to ensure performance and provide confidence that Project
Development Objectives can be achieved by the proposed closing date of Oct. 15, 2015.
Three dimensions will be monitored: i) local government commitment; ii) procurement
efficiency; and iii) construction progress and financial management. To facilitate monitoring
and reporting, an assessment will be undertaken every four months.
Indicator 1—Local Government Commitment: The new Governor shall send to the Bank
and DNP an official letter demonstrating his administration‟s commitment to the Project and
to following the requirements set forth in the Loan Agreement no later than April 30, 2012.
Indicator 2—Procurement Efficiency: The Bank-approved August 2011 procurement plan
contains 31 works contracts worth US$80 million (US25 million in execution) and an
additional 32 consultant contracts worth US$22 million (US$7.5 million in execution). All
contracts are expected to be completed no later than mid-2015. The key activities which will
be monitored in 2012 to ensure the progress of the Project are:
A. Construction Supervision: Contacting and mobilizing the Project-wide construction
supervision consultants (two contracts worth US$3.1 million in total). To-date construction
supervision contracts are being split into smaller contracts for groups of works.
B. Communication and Outreach: Consultant contract (US$436,000) to socialize the Project
in the Department of La Guajira and specific municipalities.
C. Riohacha Water Supply Works: Works contract (US$26 million) to reconfigure the
Riohacha water supply system, including dividing the distribution network into sectors, with
macro and micro metering.
D. Safeguard Consultant: Consultant contract (US$752,000) to implement the IPP the Rural
Reservoir Program. To-date implementation of IPP is being undertaken by the Gerencia and
through small consultant contracts.
The dates presented are conservative estimates and actual implementation could proceed more
rapidly provided there are no procurement complications.
22
First Trimester: April 30, 2012
Activity Milestone
A. Construction Supervision Technical Evaluation Report Submitted
B. Communication and Outreach Technical Evaluation Report Submitted
C. Riohacha Water Supply Works Bank approval of Bidding Documents
D. Safeguard Consultant Technical Evaluation Report Submitted
Second Trimester: August 31, 2012
Activity Milestone
A. Construction Supervision Consultant Contracted
B. Communication and Outreach Consultant Contracted
C. Riohacha Water Supply Works Contractor Selected
D. Safeguard Consultant Consultant Contracted
Third Trimester: December 31, 2012
Activity Milestone
A. Construction Supervision Consultant Working
B. Communication and Outreach Consultant Working
C. Riohacha Water Supply Works Contractor Working
D. Safeguard Consultant Consultant Working
Indicator 3—Construction Progress and Financial Management: The following table
shows the accumulated investment under the Project and the accumulated recorded expenses
in the Bank‟s Client Connection. The lag between accumulated expenses and registered
expenses are due to: i) the Borrower has decided to use counterpart funding for the some
initial projects; and ii) the Borrower has been waiting to record the eligible expenses in the
Bank system until the revised Disbursement Letter was revised (in November 2011):
Item Nov. 1, 2011 April 30, 2012 August 31, 2012 Dec. 31, 2012
Accumulated Investment
Per FM Reports
US$17 million US$20 million US$25 million US$30 million
Registered Expenses in
Client Connection
US$0.0 US$5 million US$10 million US$15 million