World Bank Documentdocuments.worldbank.org/curated/en/941021530194087129/pdf/Disclosable...PST...

The World BankNP Rural Water Supply and Sanitation Improvement Project (P143036)

REPORT NO.: RES32065

RESTRUCTURING PAPER

ON A

PROPOSED PROJECT RESTRUCTURING

OF

NP RURAL WATER SUPPLY AND SANITATION IMPROVEMENT PROJECT

APPROVED ON MAY 29, 2014

TO

GOVERNMENT OF NEPAL

WATER GLOBAL PRACTICE

SOUTH ASIA REGION

Regional Vice President: Ethel Sennhauser (Acting VP SAR)Country Director: Qimiao Fan

Senior Global Practice Director: Guang Zhe ChenPractice Manager/Manager: Takuya Kamata

Task Team Leader: Jozef Petrus Maria Verhagen, Silva Shrestha

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ABBREVIATIONS AND ACRONYMS

M&E Monitoring and EvaluationD-SOS District Support Organization for SustainabilityD-WASH Units District Water Sanitation and Hygiene UnitsFA Financing AgreementFB Fund BoardHH HouseholdsLG Local GovernmentM&E Monitoring and EvaluationMoDWS Ministry of Drinking Water SupplyMoFALD Ministry of Federal Affairs and Local DevelopmentMoWSS Ministry of Drinking Water Supply and SanitationMTR Mid Term ReviewMWASH Unit Municipal Water and Sanitation UnitODF Open Defecation FreePAD Project Appraisal DocumentPDO Project Development ObjectivePMU Project Management UnitPST Project Support TeamRF Results FrameworkRWSSFDB Rural Water Supply and Sanitation Fund Development Board (Fund Board)VDC Village Development CommitteesWASH Water, Sanitation, and HygieneWUSC Water Users and Sanitation User Committee


BASIC DATA

Product Information

Project ID Financing Instrument

P143036 Investment Project Financing

Original EA Category Current EA Category

Partial Assessment (B) Partial Assessment (B)

Approval Date Current Closing Date

29-May-2014 30-Jun-2020

Organizations

Borrower Responsible Agency

Government of Nepal Rural Water Supply and Sanitation Fund Development Board,Ministry of Water Supply and Sanitation

Project Development Objective (PDO)

Original PDOThe development objectives of the project are to: (i) Increase sustainable access to improved water services and promote improved sanitation and hygiene practices in rural areas; and (ii) Develop and implement a long-term support mechanism to promote the sustainability of water supply schemes in selected districts.OPS_TABLE_PDO_CURRENTPDOSummary Status of Financing

Ln/Cr/Tf Approval Signing Effectiveness ClosingNet

Commitment Disbursed Undisbursed

IDA-54460 29-May-2014 11-Jul-2014 10-Nov-2014 30-Jun-2020 50.00 27.38 18.23

IDA-H9450 29-May-2014 11-Jul-2014 10-Nov-2014 30-Jun-2020 22.00 12.50 7.62


Policy Waiver(s)

Does this restructuring trigger the need for any policy waiver(s)?No

I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING

1. Achievement of PDO and Project Implementation are significantly behind. At Mid Term Review (MTR), 22% of the targeted 1.5 million people were provided with access to improved water points; 13.25% of the Village Development Committees (VDCs) were declared Open Defecation Free (ODF); and, none of the targeted 3,300 schemes were visited by the backstopping facility at the district level (Project Development Objective (PDO) 3). The table below projects a gap between physical and financial progress of at least 12% for Component 1 upon completion of Batch X. Finally, an independent assessment of the quality of the newly constructed water supply schemes under Batch IX found that approximately 20% of the schemes need major repairs and 5% of the schemes are not functioning. Sustainability of older schemes was found to be of concern: of the schemes older than 10 years, 78% of the schemes is in need of major repairs. A field visit to three schemes brought out issues related to progress reporting and implementation supervision by the Fund Board (FB). With a disbursement of 9.06 %, Component 2 is lagging in a similar manner.


PHYSICAL PROGRESS FINANCIAL PROGRESS

PDOBudget (IDA, US$ million)

Actual Disbursement

% of budget disbursed

Component 1People with access to improved water points

# of VDCs declared ODF

R&R Earthquake 106,405 3.00 1.92 64%

Batch IX 334,901

10.26 5.53 54%

Batch X (projected) 398,800 53 11.92 30.02 252%

Target/Allocation 1,502,000 400 61.01 37.46 61.40%

Projected Achievement 48.85% 13.25%

2. Component 1: Access to Improved Water Supply and Sanitation and Promotion of Improved Sanitation and Hygiene Practices. The progress at MTR is summarized below:

(a) Batch IX: 358 water supply schemes (out of 376 schemes) completed benefiting 335,000 people in 260 VDCs. (b) Batch X: Development Phase for 562 water supply schemes is completed, 15 schemes were dropped for not meeting the

Fund Board criteria such as minimum community contribution. Implementation of 482 schemes has started, potentially benefitting 0.4 million people. There is a projected price escalation of 252 % vis-à-vis the initial cost estimates at appraisal for Batch X schemes. The FB has been requested to provide detailed documentation of this price escalation that will be reviewed by the team.

(c) Rehabilitation of earthquake affected schemes in 14 districts: Design and cost estimates were finalized for 386 schemes, and minor rehabilitation work was completed for 168 schemes benefiting 106,000 people.

(d) Sanitation: 53 of the targeted 147 VDCs have been declared ODF, benefiting 46,000 households. Additional activities related to total sanitation – such as personal and household hygiene, solid waste management, targeting some 250 VDCs are progressing well but are currently not captured in the results framework.

(e) To achieve the original PDO target of 1.5 million people with access to improved water points, an additional 923 schemes need to be initiated and completed within the remaining project period.

(f) Deadlines for agreed actions have continued to be missed.

3. Component 2: District Level Institutional Strengthening. At MTR activities have progressed but with slow pace. Progress and implementation of Component 2 is likely to be affected by the ongoing Federal restructuring in Nepal.

(a) The design of web-based Monitoring and Evaluation (M&E) system has been completed and will be implemented by the District Support Organization for Sustainability (D-SOS) in coordination with the Project Support Team (PST) in the 5 districts for collection of scheme level information and reporting on the functionality and sustainability of schemes.


(b) Combined technical and financial evaluations for 4 out of 5 D-SOSs were submitted to the Bank for review. Signing of the contracts was completed in January 2018 for a period of 2 years and 4 months.

(c) Terms of references were developed for: (i) procurement of consulting services for development of WASH Plans in 70 districts; and (ii) D-WASH Units.

(d) Strategy for WASH networking and marketing was formulated by the Project Support Team (PST). (e) MOU between Ministry of Water Supply and Sanitation (MoWSS) and Ministry of Federal Affairs and Local Development

(MoFALD) was prepared to formally establish D-WASH Units, but needs revision considering the ongoing federal restructuring in Nepal.

4. Component 3; Technical Assistance/Capacity Building, and Project Management – The Project Management Unit (PMU) of MoWSS has a new Project Director at Joint Secretary level, a full-time and dedicated Deputy Project Director, and two technical staff. The Deputy Project Director is not yet fully available to manage Component 2. Through the amendment of the FB’s formation order the Government of Nepal has recently aligned the composition of the Board of the FB with Nepal’s Federal structure. Currently, the FB is fully staffed (48) and hires additional consultants as portfolio managers required for supervising project implementation. FB urgently needs to improve the quality and consistency of its reporting, strengthen internal checks and balances on financial and physical, and community-level procurement and accounting.

5. Restructuring. The MTR concluded that it is highly unlikely that at the current rate of implementation and with the available resources, the PDO of the project will be achieved. Restructuring of the project was recommended at the MTR to; (1) scale down the PDO targets to a level that can be realistically achieved by project closing and with the financial means available; (2) address issues related to improved supervision of and reporting on community level activities; and, (3) address issues related to the ongoing Federal restructuring in Nepal such as the increased importance of Local Governments and possibly name changes of implementing agencies.

II. DESCRIPTION OF PROPOSED CHANGES

6. Revision of Results Framework Component 1: The MTR observed that the results and intermediate outcome targets for Component 1 as noted in the Financing Agreement (FA) are no longer feasible within the remaining project period and funds available. Hence, it is proposed to revise the project’s Results Framework (RF) for project Component 1 as follows:

Results Indicator(a) Indicator 1: People provided with access to improved water points; of which, female (percentage). To be reduced from

1,502,000 to 810,000.(b) Indicator 2: The number of Village Development Committees (VDCs) declared ODF by the districts. To be reduced from

400 VDCs to 130 VDCs.

Intermediate Outcome Indicators:(a) Indicator 4: Improved community water points constructed (new, expansion, rehabilitated under the project). To be

reduced from 37,400 to 11,170. (b) Indicator 5: Number of water supply schemes completed and in operation for at least six months1; of which (Jagaran

Committee established). To be reduced from 1,840 to 954. (c) Indicator 6: Number of Water Users and Sanitation Committees (WSUCs) formed; (those with at least 3 women

members). To be reduced from 1,840 to 854.(d) Indicator 7: Improved public latrines constructed under the project in schools and health posts. To be reduced from 1,200

to 200.

1 Six-monthly citizen scorecards will be used to measure whether schemes are fully operational or not.


(e) Indicator: People provided with improved water supply through rehabilitation of schemes in earthquake affected districts. To be increased from 220,000 to 372,000.

(f) New indicator: Number of household yard connections (new or rehabilitated under the project). Target: 48,000.(g) New indicator: Number of newly constructed schemes provided with post-construction support by the project. Target:

854(h) New indicator: Number of households (HHs) to achieve total sanitation. Target 150,000 HH.

7. Revisions to Results Framework Component 2: The MTR observed that the results and intermediate outcome targets for Component 2 as noted in the FA are no longer feasible within the remaining project period and funds available. This requires a reduction of the PDO and intermediate outcome targets. Secondly, under the new Federal structure in Nepal, the mandate of the Local Government (LG) for local water and sanitation projects has been strengthened significantly. Hence, the focus on the efforts to institutional strengthening needs to focus on the newly formed LGs (municipalities) instead of district-level entities. Hence, it is proposed to revise the project’s RF for project Component 2 as follows:

Results Indicators:(a) Indicator 3: Number of schemes visited by the backstopping facility at the Municipality level; of which (percentage of

schemes non-functioning). To be reduced from 3,300 to 1,000.

Intermediate outcome indicators:

(a) New indicator: Water and Sanitation units in Municipalities (MWASH Unit) formally established under the Local Government with defined functions as defined in the Project Appraisal Document (PAD) for the district WASH units. Target: 8 Local Governments.

(b) Indicator 10: District level monitoring and evaluation (M&E) system established. Dropped.(c) New indicator: Local Government Level M&E system established and 25% of detected functionality issues addressed.

Target: 8 Local Government.(d) New indicator: Number of WASH professionals and community volunteers trained. Target: 7,000.

8. Amendment of Financing Agreement (FA): The following amendments will be made to the FA:

The Project Description (Schedule 1) of the FA, Part 1b development and implementation of Schemes will be amended to include the provision of ‘post construction support’ and will read as follows: development and implementation of Schemes, including construction, minor rehabilitation, and post-construction support of gravity flow systems, installation of shallow and deep tube wells, dug wells, lift schemes, rainwater harvesting, and catchment protection.

Part 1 (c) of Schedule 1 of the FA will be amended to read as follows: provision of sanitation sub-grants to VDCs for the purpose of total sanitation promotion activities and construction of toilets in schools, health posts and other institutions.

Project Description (Schedule 1) of the FA, the heading of Part 2 District Level Institutional Strengthening will be amended to read as follows: Institutional Strengthening of Local Government.

Schedule 2, section 1 A1 of the Financing Agreement MoUD to be replaced by MoDWS. The Table Nepal IDA Credit No. 5446-NP; IDA Grant No. H945-NP Withdrawal Schedule will be amended to reflect the

proposed amendments of the RF for Component 1 and Component 2. A new Paragraph 48 in the Appendix of the Financing Agreement is added to read as follows: “‘Post Construction Support’

means non-monetary support provided to communities to strengthen the management of their drinking water scheme.” Paragraph 25 in the Appendix of the Financing Agreement to be amended to read as follows: “‘MoDWS’ means the Recipient’s

Ministry of Drinking Water Supply, or any successor thereto.”


III. SUMMARY OF CHANGES

Changed Not Changed

Change in Results Framework ✔

Reallocation between Disbursement Categories ✔

Change in Implementing Agency ✔

Change in DDO Status ✔

Change in Project's Development Objectives ✔

Change in Components and Cost ✔

Change in Loan Closing Date(s) ✔

Cancellations Proposed ✔

Change in Disbursements Arrangements ✔

Change in Disbursement Estimates ✔

Change in Overall Risk Rating ✔

Change in Safeguard Policies Triggered ✔

Change of EA category ✔

Change in Legal Covenants ✔

Change in Institutional Arrangements ✔

Change in Financial Management ✔

Change in Procurement ✔

Change in Implementation Schedule ✔

Other Change(s) ✔

Change in Economic and Financial Analysis ✔

Change in Technical Analysis ✔

Change in Social Analysis ✔

Change in Environmental Analysis ✔

IV. DETAILED CHANGE(S)

OPS_DETAILEDCHANGES_RESULTS_TABLE

RESULTS FRAMEWORK

Project Development Objective Indicators


PDO_IND_TABLE

Number of people in rural areas provided with access to Improved Water Sources under the projectUnit of Measure: NumberIndicator Type: Custom

Baseline Actual (Current) End Target Action

Value 0.00 338610.00 810000.00 Revised

Date 16-Jul-2014 28-Feb-2018 30-Jun-2020

Number of VDCs declared ODF by the Districts.Unit of Measure: NumberIndicator Type: Custom


Value 0.00 105.00 130.00 Revised

Date 16-Jul-2014 28-Feb-2018 30-Jun-2020

Number of schemes visited by the backstopping facility at the District level; of which (percentage of schemes non-functioning).Unit of Measure: NumberIndicator Type: Custom


Value 0.00 0.00 1000.00 Revised

Date 16-Jul-2014 28-Feb-2018 30-Jun-2020

Intermediate IndicatorsIO_IND_TABLE

Improved community water points constructed or rehabilitated under the projectUnit of Measure: NumberIndicator Type: Custom


Value 0.00 9569.00 11170.00 Revised

Date 16-Jul-2014 28-Feb-2018 30-Jun-2020

Households provided with improved and rehabilitated latrines in the earthquake affected districts.Unit of Measure: NumberIndicator Type: Custom



Value 0.00 12924.00 22000.00 No Change

Date 31-Jul-2015 28-Feb-2018 31-Mar-2017

People provided with improved water supply through rehabilitation of schemes in earthquake affects districtsUnit of Measure: NumberIndicator Type: Custom


Value 0.00 179639.00 372220.00 Revised

Date 31-Jul-2015 28-Feb-2018 30-Jun-2020

Number of water supply schemes completed and in operation; of which (Jagaran Committee established).Unit of Measure: NumberIndicator Type: Custom


Value 0.00 359.00 954.00 Revised

Date 16-Jul-2014 28-Feb-2018 30-Jun-2020

Number of WSUCs formed; (those with at least 3 women members).Unit of Measure: NumberIndicator Type: Custom


Value 0.00 964.00 854.00 Revised

Date 16-Jul-2014 28-Feb-2018 30-Jun-2020

Improved latrines constructed under the projectUnit of Measure: NumberIndicator Type: Custom


Value 0.00 104.00 200.00 Revised

Date 16-Jul-2014 28-Feb-2018 30-Jun-2020

People trained to improve hygiene behavior/sanitation practices under the projUnit of Measure: NumberIndicator Type: Custom


Value 0.00 1454513.00 2400000.00 No Change


Date 16-Jul-2014 28-Feb-2018 30-Jun-2020

People trained to improve hygiene behavior/sanitation practices - femaleUnit of Measure: NumberIndicator Type: Custom Breakdown


Value 0.00 712711.00 1200000.00 No Change

Date 16-Jul-2014 28-Feb-2018 30-Jun-2020

People trained on improved hygiene behavior, and sanitation practices - StudentsUnit of Measure: NumberIndicator Type: Custom Breakdown


Value 0.00 87270.00 1000000.00 No Change

Date 16-Jul-2014 28-Feb-2018 30-Jun-2020

Water and Sanitation units ((DWASH Unit) formally established under the DDC with defined functions.Unit of Measure: NumberIndicator Type: Custom


Value 0.00 5.00 5.00 No Change

Date 16-Jul-2014 28-Feb-2018 30-Jun-2020

District level M&E system established.Unit of Measure: NumberIndicator Type: Custom


Value 0.00 0.00 5.00 Marked for Deletion

Date 16-Jul-2014 28-Feb-2018 30-Jun-2020

Annual report prepared by DWASH Unit capturing results of M&E plans for subsequent year, and sections on scheme performance & sustainability.Unit of Measure: NumberIndicator Type: Custom



Value 0.00 0.00 5.00 Marked for Deletion

Date 16-Jul-2014 28-Feb-2018 30-Jun-2020

Number of household yard connections (new or rehabilitated under the project)Unit of Measure: NumberIndicator Type: Custom


Value 0.00 48000.00 New

Date 01-Jun-2018 30-Jun-2020

Number of newly constructed schemes provided with post-construction support by the project.Unit of Measure: NumberIndicator Type: Custom


Value 0.00 854.00 New

Date 01-Jun-2018 30-Jun-2020

Municipal Water and Sanitation Units (MWASH Unit) formally established under the Local Government with defined functionsUnit of Measure: NumberIndicator Type: Custom


Value 0.00 0.00 8.00 New

Date 01-Jun-2018 01-Jun-2018 30-Jun-2020

Local Government Level M&E system established and 25% of detected functionality issues addressedUnit of Measure: NumberIndicator Type: Custom


Value 0.00 0.00 8.00 New

Date 01-Jun-2018 01-Jun-2018 30-Jun-2020

Number of WASH professional and community volunteers trainedUnit of Measure: NumberIndicator Type: Custom



Value 0.00 7000.00 New

Date 01-Jun-2018 30-Jun-2020

Number of households (HHs) to achieve total sanitation. Target 150,000 HH.Unit of Measure: NumberIndicator Type: Custom


Value 0.00 150000.00 New

Date 01-Jun-2018 30-Jun-2020

OPS_DETAILEDCHANGES_REALLOCATION _TABLE

REALLOCATION BETWEEN DISBURSEMENT CATEGORIES

Current Allocation Actuals + Committed Proposed Allocation Financing %(Type Total)

Current Proposed

IDA-54460-001 | Currency: XDR

iLap Category Sequence No: 1A Current Expenditure Category: Gds,Wks,NCS-Prt 1b Dev Phase

3,440,000.00 2,580,070.68 2,627,979.00 100.00 100.00

iLap Category Sequence No: 1B Current Expenditure Category: Gds,Wks,NCS-Prt 1b Imp Phase

15,710,000.00 4,536,560.54 15,049,277.00 70.00 70.00

iLap Category Sequence No: 1C Current Expenditure Category: Gds,Wks,NCS-Prt 1b Inst Toilets

2,960,000.00 1,696,974.46 2,768,767.00 100.00 100.00

iLap Category Sequence No: 2 Current Expenditure Category: CS,Trg, Gds-prt 1 and 3a of project

4,200,000.00 2,427,189.23 3,735,372.00 100.00 100.00

iLap Category Sequence No: 3 Current Expenditure Category: IOC of PIE prt 1 & 3a of project

760,000.00 326,596.05 760,000.00 40.00 40.00


iLap Category Sequence No: 4 Current Expenditure Category: Sanitation Sub Grants part 1c

490,000.00 240,067.11 348,605.00 100.00 100.00

iLap Category Sequence No: 5 Current Expenditure Category: CS,Trg,Gds Prt 2 & 3b

4,700,000.00 510,256.44 4,700,000.00 100.00 100.00

iLap Category Sequence No: 6 Current Expenditure Category: IOC of MOUD prts 2 & 3b

140,000.00 14,692.95 140,000.00 40.00 40.00

iLap Category Sequence No: 7 Current Expenditure Category: Emergency Exp for CER component

0.00 0.00 0.00 100.00 100.00

iLap Category Sequence No: 1D Current Expenditure Category: Gds,Wks,NCS-Prt 1b Imp Phase

0.00 0.00 2,270,000.00 100

Total 32,400,000.00 12,332,407.46 32,400,000.00

IDA-H9450-001 | Currency: XDR

iLap Category Sequence No: 1A Current Expenditure Category: Gds,Wks,NCS-Prt 1b Dev Phase

1,300,000.00 1,186,176.73 1,186,200.00 100.00 100.00

iLap Category Sequence No: 1B Current Expenditure Category: Gds,Wks,NCS-Prt 1b Imp Phase

5,960,000.00 3,231,215.04 5,494,220.00 70.00 70.00

iLap Category Sequence No: 1C Current Expenditure Category: Gds,Wks,NCS-Prt 1b Inst Toilets

1,120,000.00 805,064.34 1,240,718.00 100.00 100.00

iLap Category Sequence No: 2 Current Expenditure Category: CS,Trg, Gds-prt 1 and 3a of project


1,590,000.00 528,736.02 1,089,046.00 100.00 100.00

iLap Category Sequence No: 3 Current Expenditure Category: IOC of PIE prt 1 & 3a of project

290,000.00 165,848.55 290,000.00 40.00 40.00

iLap Category Sequence No: 4 Current Expenditure Category: Sanitation Sub Grants part 1c

190,000.00 108,749.24 151,445.00 100.00 100.00

iLap Category Sequence No: 5 Current Expenditure Category: CS,Trg,Gds Prt 2 & 3b

1,800,000.00 299,316.91 1,800,000.00 100.00 100.00

iLap Category Sequence No: 6 Current Expenditure Category: IOC of MOUD prts 2 & 3b

50,000.00 6,349.67 50,000.00 40.00 40.00

iLap Category Sequence No: 7 Current Expenditure Category: Emergency Exp for CER component

0.00 0.00 0.00 100.00 100.00

iLap Category Sequence No: 8 Current Expenditure Category: Refinancing of PPA

0.00 0.00 0.00

iLap Category Sequence No: 9 Current Expenditure Category: Gds,Wks,CS,NCS Prt 1(d)

2,000,000.00 837,287.37 2,005,787.00 100.00 100.00

iLap Category Sequence No: 1D Current Expenditure Category: Gds,Wks,NCS-Prt 1b Post Construction Support

0.00 0.00 992,584.00 100

Total 14,300,000.00 7,168,743.87 14,300,000.00

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