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Document of The World Bank

Report No:ICR000034

IMPLEMENTATION COMPLETION AND RESULTS REPORT ( IBRD-70230 )

ON A

LOAN / CREDIT IN THE AMOUNT OF US$ MILLION 78.60

(US$ 78.60 MILLION LOAN)

TO

Algeria

FOR

Ain Temouchent Emergency Earthquake Recovery Project

December 1, 2006

FFPSI Group Alg/Libya/Malta/Morocco/Tun MIDDLE EAST AND NORTH AFRICA

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CURRENCY EQUIVALENTS ( Exchange Rate Effective ) Currency Unit =

1.00 = US$ US$ 1.00 =

Fiscal Year

ABBREVIATIONS AND ACRONYMS

Vice President: Daniela Gressani

Country Director: Cecile Fruman Sector Manager: Hedi Larbi

Project Team Leader: Francois Noisette

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Algeria Ain Temouchent Emergency Earthquake Recovery Project

CONTENTS

1. Basic Information........................................................................................................ 1 2. Key Dates.................................................................................................................... 1 3. Ratings Summary........................................................................................................ 1 4. Sector and Theme Codes ............................................................................................ 2 5. Bank Staff ................................................................................................................... 2 6. Project Context, Development Objectives and Design............................................... 3 7. Key Factors Affecting Implementation and Outcomes .............................................. 6 8. Assessment of Outcomes .......................................................................................... 10 9. Assessment of Risk to Development Outcome......................................................... 13 10. Assessment of Bank and Borrower Performance ................................................... 13 11. Lessons Learned...................................................................................................... 16 12. Comments on Issues Raised by Borrower/Implementing Agencies/Partners......... 17 Annex 1. Results Framework Analysis......................................................................... 19 Annex 2. Restructuring (if any) .................................................................................... 22 Annex 3. Project Costs and Financing.......................................................................... 23 Annex 4. Outputs by Component.................................................................................. 25 Annex 5. Economic and Financial Analysis (including assumptions in the analysis).. 27 Annex 6. Bank Lending and Implementation Support/Supervision Processes............. 28 Annex 7. Detailed Ratings of Bank and Borrower Performance.................................. 30 Annex 8. Beneficiary Survey Results (if any) .............................................................. 31 Annex 9. Stakeholder Workshop Report and Results (if any)...................................... 32 Annex 10. Summary of Borrower's ICR and/or Comments on Draft ICR ................... 33 Annex 11. Comments of Cofinanciers and Other Partners/Stakeholders ..................... 34 Annex 12. List of Supporting Documents .................................................................... 35 Annex 13. Additional Annexes..................................................................................... 36 13.1................................................................................................................................ 36 MAP.............................................................................................................................. 38

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1. Basic Information

Country: Algeria Project Name: Ain Temouchent Emergency Earthquake Recovery Project

Project ID: P069947 L/C/TF Number(s): IBRD-70230 ICR Date: 12/18/2006 ICR Type: Core ICR

Lending Instrument: ERL Borrower: GOVERNMENT OF ALGERIA

Original Total Commitment: USD 83.5M Disbursed Amount: USD 78.6M

Environmental Category:B Implementing Agencies

Ministry of Interior Central Steering Committee Local Steering Committee Project Coordination Unit (PCU) 5 Sector Direct. of the Wilaya of Ain Temouchent:Urban Dvlpt., Educ.,Health, Pub. Works,Hydraulics Public Entity for Housing Central Directorate for Civil Protection (DGPC) Earthquake Research Center Seismic Construction Research Center Cofinanciers and Other External Partners 2. Key Dates

Process Date Process Original Date Revised / Actual Date(s)

Concept Review: 02/04/2000 Effectiveness: 01/17/2001 01/17/2001 Appraisal: 04/10/2000 Restructuring(s): Approval: 06/22/2000 Mid-term Review: 02/12/2002 Closing: 12/31/2003 05/31/2006 3. Ratings Summary 3.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Low or Negligible Bank Performance: Satisfactory Borrower Performance: Satisfactory

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3.2 Quality at Entry and Implementation Performance Indicators Implementation Performance Indicators QAG Assessments (if any) Rating:

Potential Problem Project at any time (Yes/No): No Quality at Entry (QEA): Satisfactory

Problem Project at any time (Yes/No): Yes Quality of Supervision (QSA): Satisfactory

DO rating before Closing/Inactive status: Satisfactory 4. Sector and Theme Codes

Original Actual Sector Code (as % of total Bank financing) Central government administration 10 7 Other social services 26 43 Roads and highways 2 1 General water, sanitation and flood protection sector 6 3 Housing construction 56 46

Original Priority Actual Priority Theme Code (Primary/Secondary) Natural disaster management Primary Primary 5. Bank Staff

Positions At ICR At Approval Vice President: Daniela Gressani Jean-Louis SarbibCountry Director: Cecile Fruman Christian Delvoie

Sector Manager: Hedi Larbi Jean-Claude Villiard

Project Team Leader: Francois Noisette Piotr M. Wilczynski

ICR Team Leader: Sateh Chafic El-Arnaout

ICR Primary Author: Francois Noisette

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6. Project Context, Development Objectives and Design (this section is descriptive, taken from other documents, e.g., PAD/ISR, not evaluative) 6.1 Context at Appraisal (brief summary of country macroeconomic and structural/sector background, rationale for Bank assistance) The macro-economic stabilization program launched in the mid-1990s improved the macro-economic situation of the country but did not substantially improve the livingconditions of the 20% of the Algerian population who still lived in poverty. Rapidurbanization had complicated the issues on housing and urban services provision while significant exposure of the country to recurrent natural risks of earthquakes and floodingincreased the vulnerability of the economic infrastructure and the livelihood of thepeople, mainly the poor. Natural calamities resulted in recurring loss of human lives, social, financial and economic well-being, and the need to shift resources from productive investment to fund recovery and reconstruction had significantly curtailedAlgeria's attempts to stabilize its economic and social situation. Disaster response in Algeria, organized under the 1985 Decree, established a legalstructure for civil protection and decentralized authority and responsibility to the wilayas(Provinces) and their Walis (Governors). This was done to enable a response to local emergency situations, although all levels of government were directed to establishemergency preparedness plans and emergency response protocols and procedures,following common operational priorities and guideline The moderate-level earthquake of December 22, 1999 in the Wilaya of Ain Temouchentin Western Algeria, about 75 km from the city of Oran, caused substantial damages infour communities, where residential units collapsed and twenty-seven people died and 274 were injured. About 7,000 housing units were damaged, as well as water supplysystems, roads, schools, health facilities and government offices. The cost of physicaldamages was estimated at US$ 100-120 million Civil protection performed ably in the hours following the earthquake, with officials following established protocols and mounting immediate efforts to rescue trapped victimsand provide medical assistance. Temporary shelters were in place within hours and thedamage assessment process was well coordinated and timely. Despite these successes, the Government of Algeria was mindful that the Ain Temouchent was a moderate-sized earthquake with limited impacts and decided that its system for disaster response requiredreinforcement As part of its disaster and risk management strategy, Algeria had legislation whichprovides that Government will protect and support the lives of the population affected bynatural disasters. Government intends to supplement this with measures to improve thedisaster response system, institute a national earthquake insurance program and improveits capacity to monitor construction practices and enforce compliance with buildingcodes.

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The Bank's assistance aimed to bring international experience in the area of naturalhazard response and management to help Algeria manage its vulnerability to naturalhazards. The Bank's focus on disaster prevention comprised: (a) assisting clients inimplementing measures to minimize the likelihood of occurrence of natural and man-made disasters; (b) integrating disaster mitigation into development efforts; and (c)building a national culture of prevention and preparedness. 6.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) The overall Project Development Objective was to restore normal functioning of communities damaged by the December 22, 1999 earthquake in the region of Ain Temouchent and to increase national preparedness for future disasters. The cost of the damage was estimated in the US$100-120 million range. The objective would be reached by:

- strengthening the capacity to disaster response of the civil protection entities; - strengthening of the existing system of earthquakes monitoring and studies; - strengthening the guidelines for para-seismical design and control of

construction; - promoting risk coverage, specially insurance, to reduce the financial impact of

disaster on the national budget; - supporting the government for the construction of durable housing units in the

earthquake affected area; - Restoring the essential urban services (drinkable water, sewage, roads); - Rebuilding the public social equipments for education, health, and

administration. 6.3 Revised PDO and Key Indicators (as approved by original approving authority), and reasons/justification Project objectives have not been revised. 6.4 Main Beneficiaries, original and revised (briefly describe the "primary target group" identified in the PAD and as captured in the PDO, as well as any other individuals and organizations expected to benefit from the project) The beneficiaries of the project were the earthquake-affected population in Ain

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Temouchent, as well as the whole Algerian population which would benefit through strengthening of the country's disaster management system. DGPC (the Central Directorate for Civil Protection) and the other entities on charge of seismic monitoring and disaster management would also benefit from the project in terms of institutional strengthening and improved facilities to conduct their work. 6.5 Original Components (as approved) The project included five components: Component A: Disaster Organization and Risk Management (US$9.37 million). The component's objectives were to strengthen the institutional capacity of emergency management inAlgeria and promote a nationwide and comprehensive risk management strategy. The component was expected to enhance the capacities of various agencies and functions as follows: (i) the Algerian Civil Protection to carry out essential initial emergency response activities; (ii) national communications and information management; (iii) national seismic monitoring; and (iv) enforcement of building codes and monitoring of construction practices. The component also sought to develop policy alternatives, including use of insurance to moderate the impact of disasters on public finance. The component provided for the acquisition of specialized equipment and training, the construction of facilities for the Civil Protection Directorate in the region, the completion of seismic risk assessment, the review of standards and practices in building codes and an assessment of an insurance system covering disaster risks and other risk transfer mechanisms. Component B: Housing (US$65.78 million) to assist in (i) the reconstruction of about 3,400 social housing units; and (ii) to provide materials and technical assistance to beneficiaries in rural areas for the construction of 800 individual housing units financed by the Government. Component C: Technical Infrastructure (US$8.39 million) to restore essential infrastructure, including water supply and sewerage system and roads and to build a new wastewater treatment plant. Component D: Social Infrastructure (US$26.78 million) to reconstruct facilities, including nine primary schools, two middle schools, and one high school for 1,400 students; five health care units, one hospital of 240 beds, and government offices (court, post office and a handicraft center). Component E: Project Implementation (US$1.69 million) to support the creation and operation of a Project Coordination Unit.

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6.6 Revised Components Components have not been revised. 6.7 Other significant changes (in design, scope and scale, implementation arrangements and schedule, and funding allocations) The Government of Algeria requested the cancellation of non-committed funds amounting to US$0.79 million (0.95% of the loan amount) as of February 1st, 2006 and an additional amount of US$ 4.07 million was not disbursed. These cancellations did not have an impact on the project completion because the Ministry of Public Health had allocated Algerian funds for the remaining items of non-medical equipment and works. The construction of the sewerage plant (included in Component C) and the acquisition of communication equipments for Civil Protection were not completed by the end of the project; however, the Government is completing these with funding from its own budget (outside the project). 7. Key Factors Affecting Implementation and Outcomes 7.1 Project Preparation, Design and Quality at Entry (including whether lessons of earlier operations were taken into account, risks and their mitigations identified, and adequacy of participatory processes, as applicable)

Key factors affecting the satisfactory outcome of project implementation include the following:

(i) The project was in line with the 1996-97 CAS (Country Assistance Strategy) forAlgeria which, among other objectives, emphasized poverty alleviation and the protection of vulnerable groups. The project supported interventions such as emergency public and social services and improved housing which significantly improved the living conditions and life of the poorest inhabitants of the affected region.

(ii) Project preparation was thorough and consultative. The inventory of

damages was prepared by the Government, reviewed by independent consultants and provided a good basis for identifying the works to be implemented. The project was prepared in close cooperation with the local authorities and excellent participation of the affected people who were represented by an association created after the earthquake. These measures considerably facilitated implementation of the project.

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(iii) The decision to provide retroactive financing for the housing component enabled an early launch of the reconstruction effort.

(iv) Lessons from Bank experience in earthquake relief projects were taken into

account, including the need to:

• keep the project design simple; • include, within the recovery and rehabilitation program, design measures

intended to increase resistance and reduce the damage from future such disasters (e.g. ensure that buildings are more earthquake resistant);

• ensure that buildings are adequately maintained to minimize the impact of future such earthquakes;

• build partnerships between the central and local agencies, and devolve implementation and detailed coordination to the local authorities who can more effectively monitor and ensure that the project is implemented according to plan.

(v) Overall, the project risks were accurately assessed, including the 'substantial'

risk of shortfall of Government funds for operation and maintenance of the disaster response system, which the project addressed by financing needed additional equipments and training. All other risks were rated as 'modest'; they included the failure to use earthquake resistant building standards, the shortage of building materials, the failure to provide suitable sites for construction, and the weak capacity of local building firms. One risk which was not fully anticipated were the several delays in project implementation (e.g. the loan became effective six months after Board approval, the implementation unit was put in place about seven months after effectiveness and the closing date was extended twice). For a rapidly-prepared emergency operation, however, these delays due to the need to coordinate among the activities and bureaucracy of nine implementing and sectoral agencies are not excessive and project management was able to rally and still largely meet its targets (see sections 8 and 10 below).

Two sub-components that perhaps could have been better appraised, had there been

more than the two months available for project preparation, were a new hospital to serve regional needs and the proposed wastewater treatment plant. The new hospital was a bold venture to build and equip a regional facility to serve the population in the area, using facilities afforded under the project. Project authorities managed to implement this sub-project successfully although the project had to be extended two times to secure all the approvals required from the Ministry of Health and the logistics to enable the completion of this ambitious but much-needed sub-component. Arrangements for managing and funding the waste-water treatment plant

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required many decisions between the central and provincial Government authorities and could not be completed in time for construction under the project. Government and the Bank subsequently agreed that thtis sub-component would be financed and implemented by the Government, outside of the project period.

7.2 Implementation (including any project changes/restructuring, mid-term review, Project at Risk status, and actions taken, as applicable) Overall, the factors that contributed to the successful implementation of the project included effective decentralization of decision making and implementation overview to the local level, competent project leadership and a local Steering Committee headed by a committed local leader (in this case, the Wali or Governor of Ain Temouchent Province) who enjoyed the confidence of the central and sectoral agencies and was empowered to take decisions. The fact that the PMU was located in the Wali's Wilaya also helped the coordination process immensely. Factors outside the control of government or implementing agency No event outside the control of the government has negatively affected implementation of the project. The Boumerdes earthquake which occurred during the project period (May 2003) actually reinforced the determination of the Government to build up its capacity to prepare for and manage the consequences of large-scale emergencies. Factors generally subject to government control The central and local governments took all necessary measures to ensure the smooth implementation of the project. The central government provided the financial resources required on time and their local representatives were at the forefront of reconstruction efforts, ensuring close consultation with local beneficiaries and the quality of construction. The Wali was heavily involved in ensuring that building materials would be provided to the sites on time. The Algerian Bank for Development (Mascara branch) set up special procedures to ensure that contractors would be paid without undue delays. Delays in establishing the Project Coordination Unit did not result in inordinate delays in project implementation as much planning and design was undertaken in the interim and the subcomponents were being implemented by the existing public sector agencies. Factors generally subject to implementing agency control The nine agencies in charge of project implementation worked hard to complete the reconstruction of facilities as rapidly as possible and within estimated budgets. The local procurement committee met as needed on urgent procedures. Land needed for reconstruction was made available immediately. The Wali visited the worksites at least

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once a week. Contractors were paid on time and had priority for being supplied needed construction materials (cement, gravel, etc) from public plants. Except for the hospital which was completed two years later than (unrealistically) targeted, and the waste-water treatment plant which was dropped from the project , all the damaged utilities and buildings (including the housing units) were rebuilt on time. 7.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization A Monitoring and Evaluation system was set up and used to report on inputs, outputs and implementation progress. At the provincial level, the PCU successfully arranged the weekly coordination meetings (which were chaired by the Governor) among all concerned agencies and stakeholders. It also monitored project progress against the agreed monitoring and performance indicators, and produced quarterly reports on implementation progress. At the national level, the Central Steering Committee monitored implementation progress at least once a month. At the local level, the elected local authorities and the Associations which were created to represent the local project beneficiaries diligently monitored and ensured the timely relocation of affected families into their new homes and their access to basic facilities and services provided under the project. Being an emergency operation, the project did not manage to set up a monitoring and evaluation system to evaluate longer-term developmental outcomes. Even so, it was clear that the local population was highly appreciative of the project's contribution to their immediate security, safety and well-being. Government agencies gained valuable experience of the close collaboration and clarity of monitoring and reporting required for decision-making and to achieve timely and effective results on the ground; they also learnt to participate in stock-taking of needed project inputs and how to effectively deliver the promised outputs in a timely manner. The funds were effectively used for the purposes intended. 7.4 Safeguard and Fiduciary Compliance (focusing on issues and their resolution, as applicable) Safeguard and fiduciary requirements were met. Relocation of affected persons in new rental housing units was done properly and in consultation with local (Association) representatives and the elected local authorities. The environment around of the newly-constructed buildings was improved by the construction of additional public facilities such as markets, administrative offices, gardens, stadiums, tree plantations along the streets, schools and health centers provided under the project and financed by the national budget. 7.5 Post-completion Operation/Next Phase (including transition arrangement to post-completion operation of investments financed by present operation, Operation & Maintenance arrangements, sustaining reforms and institutional capacity, and next phase/follow-up operation, if applicable) . The new replacement facilities created under the project are being operated and managed as the

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previous facilities were prior to the earthquake, except that the new facilities were designed to be more resistant to seismic shock and would therefore more durable and sustainable. All project components were satisfactorily completed except for the waste-water treatment plant (see para 7.1 above). The project did an excellent job in deferring construction until decisions were finalized between the central and local government agencies about the sustainable institutional arrangements for its operation and management. It was finally decided that this sub-project will be taken out of the project and constructed and financed by the national budget. The management of the new hospital is being privatized and this is also expected to improve its prospects for post-completion operation and financial sustainability. Following the successful experience of this project, a Bank-financed urban natural hazard vulnerability reduction project was designed in response to the Bab-El-Oued flooding in Algiers ; this is another step in strengthening Government's capacity to undertake disaster mitigation and management. 8. Assessment of Outcomes 8.1 Relevance of Objectives, Design and Implementation (to current country and global priorities, and Bank assistance strategy) The project objectives were in line with the 1996-97 CAS which was then being updated to support the transition ofAlgeria to a market economy, while ensuring proper attention to poverty relief and the protection of vulnerable groups. The project components were relevant to the project objective of restoring normal functioning of communities damaged by the earthquake and strengthening national preparedness for future disasters. As an emergency operation, the project responded in a timely way to complement the Government's efforts to rapidly rebuild the social and economic infrastructure of the earthquake-damaged area. Government essentially designed the program and requested the Bank's support in financing, technical advice and implementation. Implementation of the project by the concerned existing sector agencies with coordination at the local (Wilaya) and central levels proved to be the most effective strategy for implementation as the agencies had the capacity to implement their part of the project and could be immediately operational. The project components and costs were reflected in the government's development plans and budgets. The one sub-component which was eventually dropped from the project was the waste- water treatment plant which would have met a longer-term need (currently, only one or two plants are working, out of a total of some 60 treatment plants in the country) and required much more study and consultation (between central and local government agencies over institutional arrangements) than could be completed within the project. Government has since agreed with the Bank to complete this plant with its own resources outside of the project period.

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8.2 Achievement of Project Development Objectives (including brief discussion of causal linkages between outputs and outcomes, with details on outputs in Annex 4) Overall rating: Satisfactory The first objective of the project was to restore normal functioning of communities affected by the earthquake. All three indicators used to assess implementation of the first objective were rapidly achieved:

(a) all 4,200 families displaced by the earthquake were relocated into permanent housing by September 2002 and had access to services at a level at least equivalent to the one they had before; (b) all essential technical infrastructure were operational by February 2002; and (c) most social facilities were in place and fully operational by the end of 2002.

The second objective of the project, to enhance national preparedness for future disasters was also achieved. All but one of the components aiming to achieve this objective were successfully implemented (please indicate which of the following were "achieved are far above the project objectives") :

(a) civil protection facilities for the Wilaya were constructed and equipped; (b) risk identification of the areas around Ain Temouchent was completed; (c) the earthquake monitoring network was enhanced; (d) "special earthquake" equipment was provided for 25 Wilaya site rescue teams which will minimize loss of human lives in future earthquakes; (e) measures were taken by the government to enhance the implementation of construction code relating to safe construction; (f) a risk insurance system was set up by the Government, following the recommendations of studies completed under the project. The study carried out under this project provided the basis for enacting mandatory insurance legislation on insurance which has had huge impact on risk management strategy inAlgeria. At present, some 0.3 million out of a total of 3.0 million, houses are insured in Algeria, a healthy start on an important and ambitious program, compared to other the achievement of other similar Bank-funded projects.

The enhanced communication systems for the Civil Protection Directorate was not implemented in time due to procurement issues (lack of specialized consultants responding to the consultation. 8.3 Efficiency (Net Present Value/Economic Rate of Return, cost effectiveness, e.g., unit rate norms, least cost, and comparisons; and Financial Rate of Return) The economic and financial analysis was not computed for this emergency reconstruction project. However, the economic value of the infrastructure destroyed by the earthquake

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that was reconstructed or replaced by the project is indisputable. Financially, the project was able to achieve considerable cost savings over the appraisal estimates forall components, except for the hospital. Both the PMU and the Wali exercised excellent supervision over the building and implementation processes and were flexible enough to make on-the-spot adjustments where necessary to facilitate operations. The cost of investments were deemed to be lower than similar other investments elsewhere in the country, for instance, the cost of construction of housing units and schools was about 10% to 15% lower than the current prices in the region. Two major reasons for this was the use of small and medium sized local contractors as well as the availability of construction materials from factories located close to the worksites which considerably reduced transportation costs of the materials. 8.4 Justification of Overall Outcome Rating (combining relevance, achievement of PDOs, and efficiency) Rating: Satisfactory The overall outcome is rated 'satisfactory' in view of the relevance of the PDO to the country situation and the appropriateness of the components, the efficiency of implementation under very difficult circumstances, the proper utilization of the facilities by the people and the achievement of project outputs and assets within the planned budget and on time for almost all the components. The project ended with a total cancellation of US$4.9 million (5% of the original loan amount). 8.5 Overarching Themes, Other Outcomes and Impacts (if any, where not previously covered or to amplify discussion above) (a) Poverty Impacts, Gender Aspects, and Social Development Most of the persons affected by the earthquake were the poor living in precarious shelters. The project improved their living conditions by relocating them in best-practice examples of durable housing units in new developed sites equipped and integrated with improved urban and social infrastructure and facilities. The significant improvements in primary, middle and high school graduation rates in Ain Temouchent have been attributed to the new schools, the improved housing and social environment created under the project. (b) Institutional Change/Strengthening (particularly with reference to impacts on longer-term capacity and institutional development) The project was successful in creating a decentralized coordination structure at the provincial level which contributed to speedy implementation, local ownership, the application of local knowledge and resources, effective use of existing capacity of different ministries rather creating a separate implementation capacity and greater opportunities for beneficiary participation in decision-making. In this project, the Wali's leadership was the single most important factor in ensuring effective implementation of the project. The project also successfully strengthened the earthquake monitoring institutions and networks and the civil protection units, as well as enforced construction codes relating to safe construction;

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enforcement and control over the quality of construction of public buildings was excellent though it was harder to validate the practices in private construction. The new system to insure against earthquake risks will reduce the burden on public expenditures for reconstruction necessitated by any future natural disasters. Overall, the project played a significant role in preparing national and provincial governments to respond to other similar disasters. A case in point is the 2003 Bourmedes earthquake, a much bigger earthquake which resulted in greater damage (2,266 lives lost; economic losses of approximately US$5 billion) and which occurred during the project period. Greater national preparedness was evident in the Ministry of Interior and the General Directorate of Civil Protection which had better-equipped search and rescue teams, better facilities for civil protection as well as trained staff, who were well prepared and were very effective on the ground.

(c) Other Unintended Outcomes and Impacts (positive or negative, if any) The housing component had a positive impact in developing small and medium consulting and construction firms and in local job creation. The decision to drop the construction of the waste-water treatment plant from the project and have it built by the Government itself was useful in that the discussions triggered healthy debate about sustainable options for its operation and management after construction; the subsequent decision by Government to do it within a nation-wide waste water treatment program is a positive and more sustainable outcome for the management of this sub-sector in the country. 8.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops (optional for Core ICR, required for ILI, details in annexes) None 9. Assessment of Risk to Development Outcome Rating: Low or Negligible The awareness of the Government, the local authorities and of all the population regarding disaster prevention and management is very high. The capacity developed under the project for earthquake monitoring and disaster management would make durable the development outcome of the project. The new hospital is totally equipped and staffed, training is underway and the hospital will be fully operational by the beginning of 2007, serving a region that desperately needs such a facility. Even the component that was dropped, the waste-water plant, is being financed by the government. 10. Assessment of Bank and Borrower Performance (relating to design, implementation and outcome issues) 10.1 Bank

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(a) Bank Performance in Ensuring Quality at Entry (i.e., performance through lending phase) Rating: Satisfactory The Bank responded quickly to the disaster. The project was consistent with the CAS. The dialogue with local authorities during the preparation phase was excellent. The project design was simple and the decision to use country systems for project implementation was well taken. The selection of emergency management measures was appropriate. The risks were adequately assessed. On the other hand, the short two month period for project design did not permit a full appraisal of the cost and time needed for building two major new facilities which were strongly requested by the Wilaya – the regional hospital and the waste-water treatment plant. Also underestimated was the difficulty of obtaining local clearances for technical designs and time needed to clarify and resolve all the decisions that had to be agreed on between central and local government agencies regarding the operation and management of the waste-water treatment plant. The environment management plan also did not sufficiently focus on specific and sensitive issues such as wastes from building sites and the quality of sewerage networks. (b) Quality of Supervision (including of fiduciary and safeguards policies) Rating: Satisfactory The Bank was flexible and prompt in responding to government requests. Throughout the life of the project, it provided strong support to the agencies in charge of project implementation and helped to create a team of local consultants who have ensured the regular monitoring of project management and provided guidance as appropriate. The Bank stressed the importance of applying high construction standards and facilitated the reallocation of funds to the most pressing requirements. Despite a high turnover of Task Team leaders, succession was well planned with overlap of time to ensure smooth transitions. Supervision missions were well staffed (see Annex 6) and always supported by an environmentalist and social scientist. Attention was paid to fiduciary and safeguard requirements and the candor and quality of performance tracking and reporting. The Task Teams enjoyed a high level of trust in their relations with the local authorities. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory The project was prepared in close consultation with central and local authorities and the beneficiaries. The project was well supervised by competent and problem solving Bank teams (see para above) and was clearly successful in restoring quickly the living conditions of the families affected by the earthquake. Bank management was fully supportive of the project task teams supervising this complex project. 10.2 Borrower (a) Government Performance

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Rating: Satisfactory The Government was highly committed to the project. Both the national and provincial level steering committees were established at the start of the project and provided excellent guidance to project implementation, helping to address issues and remove bottlenecks. In particular, they ensured that (i) adequate resources were allocated to the project; (ii) contractors had access to building materials and imports of equipment; and (iii) contractors were paid within reasonable time. The two committees helped to develop and implement a comprehensive program of actions based on the results of two studies, one on building regulations and the other on disaster insurance. Annual reports on project implementation and financial statements were generally not submitted on time, however. (b) Implementing Agency or Agencies Performance Rating: Satisfactory Implementing Agency Performance

Ministry of Interior

Nine agencies were involved in the implementation of the project.

At the regional level, six agencies were responsible for the implementation of the reconstruction program, including five regional directorates of central ministries (Health, Urban development, Housing, Water works, and Public works) and the Public Office for Estate Management. All agencies worked efficiently under the supervision of the Wali (Governor). These agencies were able to mobilize adequate resources and establish close cooperation with the Project Coordination Unit.

At the national level, the Ministries of Housing and Finance were responsible for the implementation of a large part of the institutional component (sub-components A7 and 8). They took the required action to implement the recommendations of the two studies on building regulation and disaster insurance. The two research centers under the supervision of the Ministry of Higher Education and Research, implemented sub-component A6 (seismic monitoring network upgrades) in a very satisfactory manner; indeed, Algeria has become a leader in the region in terms of its seismic risk reduction program, observation and data collection network. The Civil Protection Directorate implemented sub-component A1 (emergency response and rescue equipment) in a satisfactory manner but did not launch the study on its communications equipment on time, resulting in the delay of sub-component A4 (upgrading of

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communications systems).

In 2002, two supervision missions rated the DO and IP of the project 'unsatisfactory' due to the long delays over approvals of the Ministry of Health of the hospital design; though this was subsequently resolved, it caused significant delay in implementation and necessitated an extension of the project period.

Central Steering Committee Local Steering Committee Project Coordination Unit (PCU)

5 Sector Direct. of the Wilaya of Ain Temouchent:Urban Dvlpt., Educ.,Health, Pub. Works,Hydraulics

Public Entity for Housing Central Directorate for Civil Protection (DGPC)

Earthquake Research Center Seismic Construction Research Center

(c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory Overall, the Government and the implementing agencies were strongly committed to the project, and more generally to mitigate the consequences of the earthquake as rapidly as possible. The Borrower is to be commended on two particular counts: the effective mobilization of the resources required for the maintenance of the new hospital and the social housing units, and the upgrading of communications systems for the Civil Protection Directorate which is essential for an early response to disasters. 11. Lessons Learned (both project-specific and of wide general application) It is important to ensure that the proposed investments are aligned to the PDO. There was some debate about whether a project for emergency reconstruction such as this should have included a new waste water treatment plant in the first place. The plant was proposed by local authorities who seized the opportunity to also upgrade the local infrastructure such as a new wastewater treatment plan and a new hospital to serve the entire northern and westernAlgeria region, which lacks proper health infrastructure. These new facilities are clearly needed to address long-standing problems and is justified in terms of the second half of the Project Development Objective, "to increase national

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preparedness for future disasters". However, as discussed in Section 7.1 above, they required more extensive studies, multiple clearances and detailed coordination arrangements than was fully appreciated at appraisal and that the two month project preparation allowed. This should have been more fully recognized as a risk at appraisal. To the credit of the Government and the Bank, the project did what it could within the time and resources available: the hospital was completed with an extension of the project period, while the waste-water treatment facility was dropped (see discussion in Section 10.1 above).

It is important to carefully select the appropriate procurement and implementation procedures. An assessment of local resources is required to ensure that the best procurement procedures are adopted under the circumstances. The decision to divide the housing reconstruction program into small lots was essential for the mobilization of a number of small contractors. The program was also implemented efficiently at a lower cost than initially estimated. Payment procedures were adjusted to facilitate payment of contractors without undue delays. An additional lesson that can be learnt here is that the project could have included the formulation of a generic kit comprising tested operational procedures and training modules as a template from which to design location-specific programs for local authorities facing future such emergencies. It is important that emergency operations such as this project be able to depend on decentralized implementation through existing sectoral institutions and capacity which is much more appropriate and effective than using a centrally-located project management unit or other ad hoc implementation arrangements (see also para 7.2 above). Finally, it is important to use the lessons identified from local project monitoring to inform national level decision-making and policy making. Although the local-level Steering Committee responded extremely well to the emergency, the project could have provided for a more systematic evaluation of experience and a managed transfer of learning outcomes to benefit specific areas of policy development in the area of natural disaster management. The project may have missed an opportunity to help government to develop a national strategy for disaster management to address the disaster risks in all provinces prone to disasters, (ii) strengthen inter-ministerial coordination at the apex level through a national agency for the disaster mitigation and management in Algeria. Though these aspects were not fully built into project design, this is a lesson that has also become evident from other emergency projects in the area - for example, in Iran where the lessons from Manzil were not applied to other provinces so that the Bam earthquake caught everyone in Iran unprepared, and in India where the lessons from Latur were not applied in other provinces so that there was poor readiness for the Bhuj earthquake, when it happened. 12. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies

18

The main issue raised by the Borrower is the delay in project implementation due to Bank procedures on procurement, and the lack of experience of the implementing agencies on Bank procedures (and also on national procedures). Procurement procedures were streamlined for civil works where almost all the contracts were under NCB and below the threshold for Bank prior review, except for equipments and the construction of the hospital which used ICB procedures. (b) Cofinanciers N/A (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society)

During meetings with Bank missions, the "Association des sinistrés du séisme d'Ain Témouchent" expressed their satisfaction with the relocation process of the affected persons to the new houses. Satisfaction was also expressed on the high quality of the new housing units, the new schools, and the public buildings like the health centers and the post office which were built under the project.

19

Annex 1. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The overall Project Development Objective was to restore normal functioning of communities damaged by the December 22, 1999 earthquake in the region of Ain Temouchent and to increase national preparedness for future disasters. The cost of the damage was estimated in the US$100-120 million range. The objective would be reached by:

- strengthening the capacity to disaster response of the civil protection entities; - strengthening of the existing system of earthquakes monitoring and studies; - strengthening the guidelines for para-seismical design and control of

construction; - promoting risk coverage, specially insurance, to reduce the financial impact of

disaster on the national budget; - supporting the government for the construction of durable housing units in the

earthquake affected area; - Restoring the essential urban services (drinkable water, sewage, roads); - Rebuilding the public social equipments for education, health, and

administration. Revised Project Development Objectives (as approved by original approving authority) Project objectives have not been revised. (a) PDO Indicator(s)

Indicator Baseline Value Original Target Values (from approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Families displaced by the earthquake move into permanent housing Value (quantitative or Qualitative)

4200 families have been displaced by the earthquake

4200 families have been relocated in new housing

Date achieved 12/22/1999 09/30/2005 Comments (incl. % achievement)

100% achieved in excellent conditions

Indicator 2 : replacement for technical infrastructure Value (quantitative

Water (main tank and pipes, wells)

100 % of infrastructures repair or rebuild: water System (main

20

or Qualitative)

and wastewater systems and main roads (45km) need to be repaired or rebuild.

tank and pipes, wells), wastewater pipes, and main roads (45km), except waste water treatment plant that was withdrawn from the project.

Date achieved 12/22/1999 09/30/2005 Comments (incl. % achievement)

The wastewater plant was underestimated and was an improvement of the sewage system.

Indicator 3 : Replacement of social infrastructure destroyed by earthquake are in use Value (quantitative or Qualitative)

12 schools have been destroyed 12 schools rebuilt

Date achieved 12/22/1999 09/30/2005 Comments (incl. % achievement)

100%

Indicator 4 : Replacement of social infrastructure destroyed by earthquake are in use

Value (quantitative or Qualitative)

Five health centers and 3 public buildings (Court House, Post Office and Folk Art Center) have been destroyed

Five health centers and 3 public buildings are rebuilt

Date achieved 12/31/2003 09/30/2005 Comments (incl. % achievement)

100%

Indicator 5 : Replacement of social infrastructure destroyed by earthquake are in use Value (quantitative or Qualitative)

The city hospital was partially destroyed

New hospital of 240 beds built, equiped and operational

Date achieved 12/22/1999 05/31/2006 Comments (incl. % achievement)

This hospital was not a replacement of the existing hospital(as this damaged building was repaired) but was an additional hospital for the region of Ain Temouchent which was requested by the Government and built 100%

Indicator 6 : The Government's emergency system is strengthened

Value (quantitative or Qualitative)

Rescue equipment and seismic monitoring network upgrades are in poor state

Rescue equipment and seismic monitoring network upgrades are completed and in use

Date achieved 12/22/1999 12/31/2005 Comments (incl. % 100% Additional Training of the civil protection staff was provied by other donors

21

achievement) (b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target

Values

Actual Value Achieved at Completion or

Target Years

Indicator 1 : Identification of reconstruction sites, detailed studies of equipment and infrastructures to be built under Dzioua Dam Dzioua Dam safety are completed

Value (quantitative or Qualitative)

project to be designed

100% of studies completed

Date achieved 12/22/1999 05/31/2006 Comments (incl. % achievement)

100%

Indicator 2 : Identification of reconstruction sites, detailed studies of equipment and infrastructures to be built under the project, and Dzioua Dam safety are completed

Value (quantitative or Qualitative)

project to be designed

100% of studies completed

Date achieved 12/22/1999 05/31/2006 Comments (incl. % achievement)

22

Annex 2. Restructuring (if any)

Not Applicable

23

Annex 3. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent)

Components Appraisal

Estimate (USD M)

Actual/Latest Estimate (USD M)

Percentage of Appraisal

COMPONENT A: DISASTER ORGANIZATION AND RISK MANAGEMENT

9.37 6.67 71.18

COMPONENT B: HOUSING 65.78 48.42 73.61 COMPONENT C: TECHNICAL INFRASTRUCTURE 8.39 3.81 45.41

COMPONENT D: SOCIAL INFRASTRUCTURE 26.78 49.22 183.79

COMPONENT E: PROJECT IMPLEMENTATION 1.69 0.17 10.06

Total Baseline Cost 112.01 108.29 Physical Contingencies 0.00 Price Contingencies 0.00

Total Project Costs 112.01 Front-end fee PPF 0.00 0.00 0.00 Front-end fee IBRD 0.84 0.84 0.84

Total Financing Required 112.85 109.13

(b) Financing

Source of Funds Type of Cofinancing

Appraisal Estimate (USD M)

Actual/Latest Estimate (USD

M)

Percentage of Appraisal

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

83.46 78.60 94.18

LOCAL: BENEFICIARIES 25.40 30.53 120.20 (c) Disbursement Profile

24

25

Annex 4. Outputs by Component Component A: Disaster organization and management. The component is rated as satisfactory The seismic monitoring systems in the Ain Temouchent region have been enhanced through improved risk assessment, strengthening of monitoring networks, and construction of facilities for civil protection. Twenty five regions have been provided with special rescue equipment. The Government has taken measures to enforce and monitor new earthquake resistant building standards. It has also established a compulsory insurance system to cover the risk of earthquakes, as a follow up to the studies financed under the project. On the other hand, the Government has not initiated the study on how to reinforce communication systems of the Civil Protection Directorate, and cancelled the related equipment sub-component. Modernization of communication systems was considered as essential, however, for reducing the delays experienced in mobilizing resources from other regions after the Ain Temouchent earthquake. Component B: Housing. The component is rated as highly satisfactory All the housing units (3,400 social renting units and 800 individual units) have been built up to earthquake resistant standards, and delivered between September 2002 and December 2003. The decision made to build the 2,000 renting units on a single site, known asnew city of Othmane, was well taken. The new city is considered as a best practice for urban quality, architectural diversity and the level of equipment. This decision has facilitated implementation of the component, and helped reduce unit cost. Construction was split into packages of less than 200 units. This allowed small contractors to participate in the reconstruction and eased the issue of building materials availability. It was more complicated to administer, however, but was better adapted to the context. The individual housing sub-component was delayed because of the funding mechanism selected, entailing a leasing scheme with a down payment, which was too high for the poorest families. Eventually it took off and was well managed. It was financed by the government and the beneficiaries. Overall, the actual cost of the housing component is 7 percent lower than estimated. Component C: Technical infrastructure. The component is rated as satisfactory The rehabilitation of road, water, and sewerage networks was fully completed in December 2002. The component was well managed, resulting in savings, which have been allocated to an additional sewerage works completed in October 2003. On the other hand, the wastewater treatment plant was not built, because its cost had been under

26

estimated. Funds for its construction were allocated in the 2006 government budget. The project was to finance a study for stabilizing the Dzioua water reservoir. However, only the first phase of the study was completed, because of delays in procurement procedures. The second phase will be financed by the Algerian Government. Component D: Social infrastructure. The component is rated as satisfactory All social facilities have been completed on time, with the exception of the new hospital which was completed with delay. Schools were completed on time for the beginning of the new school year in September 2001. Construction of the health centers took longer, however. They were all delivered by the end of 2002. The cost of the hospital and the time needed for its construction were underestimated. The hospital is expected to be operational shortly. Contracts have been signed for the maintenance of medical equipment. Overall the quality of infrastructure is much better than what existed before the earthquake. Component E: Project Management. The component is rated as satisfactory The Inter-ministerial Steering and Monitoring Committee was established and provided strong guidance to the reconstruction efforts. The two successive governors in charge of the region were heavily involved in facilitating project implementation. The Project Coordination Unit, which had the responsibility of coordinating nine implementing agencies, was established with much delay. Its procurement capacity was weak. Its resources were sharply reduced at the end of 2004. However, it is worth noting the commitment and the efficiency of the team and the implementing agencies which have executed the project under the coordination of the Wali of Ain Temouchen and the Chairman of the CICS.

27

Annex 5. Economic and Financial Analysis (including assumptions in the analysis) NA

28

Annex 6. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members

Names Title Unit Responsibility/SpecialtyLending Supervision/ICR Claude H. Archambault Consultant MNSIF

Elisabetta Capannelli Senior Infrastructure Speciali MNSIF

Hocine Chalal Sr Environmental Spec. MNSRE

Natasha Hafez E T Temporary MNSIF

Souhila Harchouche Financial Management Specialis MNAFM

Abdelghani Inal Consultant MNAPR Mayumi Kato Sr Urban Mgmt. Spec. EASUR Georges Raphael Khoury-Haddad Consultant MNAPR

Thouria T. Nana-Sinkam Temporary MNCA4

Francois Noisette Sr Urban Mgmt. Spec. MNSIF Bekhaled Taibi Consultant MNSIF Ai Chin Wee Sr Operations Off. MNSRE Ghada Youness Sr Counsel LEGMS (b) Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP Actual Disbursements (USD

M) 1 06/30/2000 Satisfactory Satisfactory 0.00 2 12/06/2000 Satisfactory Unsatisfactory 0.00 3 02/20/2001 Satisfactory Satisfactory 5.83 4 09/28/2001 Satisfactory Satisfactory 12.03 5 11/13/2001 Satisfactory Satisfactory 13.52 6 03/07/2002 Satisfactory Satisfactory 17.76

7 08/09/2002 Unsatisfactory Unsatisfactory 25.87

8 11/15/2002 Unsatisfactory Unsatisfactory 33.59

9 04/09/2003 Satisfactory Satisfactory 39.62 10 05/01/2003 Satisfactory Satisfactory 39.62

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12 11/20/2003 Satisfactory Satisfactory 41.81 13 04/12/2004 Satisfactory Satisfactory 53.33 14 10/14/2004 Satisfactory Satisfactory 56.89

15 03/29/2005 Satisfactory Moderately Satisfactory 64.52

16 07/22/2005 Satisfactory Moderately Satisfactory 65.61

17 09/28/2005 Satisfactory Satisfactory 68.40 18 03/09/2006 Satisfactory Satisfactory 70.75 19 05/02/2006 Satisfactory Satisfactory 74.66 (c) Staff Time and Cost

Staff Time and Cost (Bank Budget Only)

Stage of Project Cycle No. of staff weeks

USD Thousands (including travel and

consultant costs) Lending

FY00 51 358.22 FY01 0.66 FY02 1 1.25 FY03 0.00 FY04 0.00 FY05 0.00 FY06 0.00 FY07 0.00

Total: 52 360.13 Supervision/ICR

FY00 2.60 FY01 25 110.85 FY02 9 101.27 FY03 11 68.76 FY04 18 85.13 FY05 22 99.05 FY06 11 49.13 FY07 2 9.06

Total: 98 525.85

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Annex 7. Detailed Ratings of Bank and Borrower Performance

Bank Ratings Borrower Ratings Ensuring Quality at Entry: Satisfactory Government: Satisfactory

Quality of Supervision: Satisfactory Implementing Agency/Agencies: Satisfactory

Overall Bank Performance: Satisfactory Overall Borrower

Performance: Satisfactory

31

Annex 8. Beneficiary Survey Results (if any) None

32

Annex 9. Stakeholder Workshop Report and Results (if any) None

33

Annex 10. Summary of Borrower's ICR and/or Comments on Draft ICR

34

Annex 11. Comments of Cofinanciers and Other Partners/Stakeholders None

35

Annex 12. List of Supporting Documents

36

Annex 13. Additional Annexes 13.1 Procurement Arrangements:

Project Cost by Procurement Arrangement (Appraisal Estimate)

(US$ million equivalent)

Expenditure Category ICB NCB Other NBF Total Cost1- Works 7.49 61.69 7.03 76.21 (6.15) (52.38) (5.71) (64.24)2- Goods 5.83 6.21 3.97 16.01 (4.49) (4.90) (0.00) (9.39)3- Consultant services 10.92 0.43 11.35 (8.50) (0.00) (8.50)4- Beneficiaries 3.97 3.97 (0.00) (0.00)5- Front end fee 0.84 0.84 (0.84) (0.84)6- Operating cost 0.54 0.75 1.29 (0.49) (0.00) (0.49)7- Housing maintenance (3.18) 3.18 (0.00) (0.00)Total 13.32 61.69 25.54 12.30 112.85 10.64 52.38 20.44 0.00 (83.46) ICB : International Competitive Bidding NCB : National Competitive Bidding Other : Consultants, shopping, sole source NBF : Not Bank financed Project Cost by Procurement Arrangement (Actual Latest Estimate)

(US$ million equivalent)

Expenditure Category ICB NCB Other NBF Total Cost1- Civil works 22.62

(18.10)

53.53

(42.82)

10.58 86.73

(60.92)2- Goods 10.85

(10.85)

1.04

(0.83)

0.14

(0.11)

2.98 15.01

(11.79)

37

3- Consultant services 5.02

(5.02)

1.50 6.52

(5.02)4- Beneficiaries 0.005- Front end fee 0.84

(0.84)

0.84

(0.84)6- Operating costs 0.03

(0.03)

0.03

(0.03)7- Housing maintenance 0.00 0.00 Total 33.47

(28.95)

54.57

(43.65)

6.03

(6.00)

15.06 109.13

(78.60)

38

MAP