1

Document of The World Bank

Report No: ICR2686

IMPLEMENTATION COMPLETION AND RESULTS REPORT (Loan No 7289-AR)

ON AN

ADAPTABLE PROGRAM LOAN

IN THE AMOUNT OF €98 MILLION (US$130 MILLION EQUIVALENT)

TO

THE CITY OF BUENOS AIRES, WITH THE GUARANTEE OF THE ARGENTINE REPUBLIC

FOR THE URBAN FLOOD PREVENTION AND DRAINAGE PROJECT, APL 1 (PO88220), IN SUPPORT OF

THE FIRST PHASE OF THE URBAN FLOOD PREVENTION AND DRAINAGE PROGRAM

February 2013

Sustainable Development Department Argentina Country Management Unit Latin America and Caribbean Region

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

2

CURRENCY EQUIVALENTS

(Exchange Rate Effective November 28, 2012)

Currency Unit = Argentine Peso € 1.00 = AR$ 6.24 AR$ 1.00 = € 0.16

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

APL Adaptable Program Lending CAS Country Assistance Strategy CPS Country Partnership Strategy CBA City of Buenos Aires COE DGRBM

Comité de Emergencia (Emergency Committee) General Directorate of Relations with the World Bank

EIA Environmental Impact Assessment EMP Environmental Management Plan FM Financial Management FMR Financial Monitoring Report INA Instituto Nacional de Agua (National Water Institute) INDEC Instituto Nacional de Estadística y Censos (National Institute of Statistics and Cen-

sus) IWRM Integrated Water Resource Management MoEP Ministry of Economy and Production MoT Ministry of Tourism MoUD Ministry of Urban Development NGO Nongovernmental Organization NPV Net present Value PAD Project Appraisal Document PBA Province of Buenos Aires PDE Plan Director de Emergencias (Emergency Preparedness Plan of the City of Bue-

nos Aires) PDO Project Development Objective PGRH Plan de Gestión de Riesgo Hídrico (Hydrological Risk Management Plan of the

City of Buenos Aires) PIU Project Implementation Unit PPI Proyecto de Protección para Inundaciones (Flood Protection Project) POE Panel of Experts POM Project Operational Manual SGPOMC Subdirrección General de Proyectos con Organismos Multilaterales de Crédito

(Sub-directorate for projects with multilateral agencias, dependent of the public credit directorate within the Ministry of Treasury)

3

SUPCE Sub Unidad para la Coordinación contra Emergencias (Sub-Unit for Emergency Coordination)

TA Technical Assistance TOR Terms of Reference UECBA Unidad Ejecutora de la Ciudad de Buenos Aires (original City of Buenos Aires

Executing Unit, within the Ministry of Tourism) UPEAM Unidad de Proyectos Especiales para el Arroyo Maldonado (City of Buenos Aires

Executing Unit as of April 2005 restructuring, within Ministry of Urban Develop-ment)

Vice President: Hasan A. Tuluy Country Director: Penelope Brook Sector Manager: Wambui Gichuri Project Team Leader: John Morton ICR Team Leader: John Morton

4

ARGENTINA

URBAN FLOOD PREVENTION AND DRAINAGE PROJECT, APL 1

CONTENTS

Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives and Design 2. Key Factors Affecting Implementation and Outcomes 3. Assessment of Outcomes 4. Assessment of Risk to Development Outcome 5. Assessment of Bank and Borrower Performance 6. Lessons Learned 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners Annex 1. Project Costs and Financing Annex 2. Outputs by Component Annex 3. Economic and Financial Analysis Annex 4. Bank Lending and Implementation Support/Supervision Processes Annex 5. Beneficiary Survey Result Annex 6. Stakeholder Workshop Report and Results Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders Annex 9. List of Supporting Documents

MAP

1

A. Basic Information (some fields are entered by the system) Country: Argentina Project name: Urban Flood Prevention and Drainage APL1

Project ID: P088220 L/C/TF Number(s): IBRD-72890

ICR Date: February 6, 2013 ICR Type:1 Core ICR

Lending Instrument: APL Borrower: City of Buenos Aires

Original total commitment: USD 130.00M Disbursed amount: USD 134.01M

Environmental category: A

Implementing Agencies: Unidad de Proyectos Especiales para el Arroyo Maldonado (UPEAM), City of Buenos Aires.

Cofinanciers and Other External Partners: N/A

B. Key Dates (all fields are entered by the system)

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

Concept review: 17-Jun-2004 Effectiveness: 16-Aug-2006 16-Aug-2006

Appraisal: 08-Nov-2004 Restructuring(s): 2-Dec-2010 11-Jun-2012

Approval: 05-Apr-2005 Mid-term Review: 21-March-2011 12-Dec-2011

Closing: 31-Dec-2010 31-Aug-2012

C. Ratings Summary2 C.1 Performance Rating by ICR Outcome: Moderately Unsatisfactory Risk to Development Outcome: Moderate Bank Performance: Moderately Satisfactory Borrower Performance: Highly Satisfactory

C. 2 Detailed Ratings of Bank and Borrower Performance

Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Moderately Satisfac-tory

Quality of Supervision: Moderately Satisfactory Implementation Agen-cy/Agencies:

Highly Satisfactory

Overall Bank Perfor-mance:

Moderately Satisfactory Overall Borrower Performance: Satisfactory

1 Core or Intensive Learning (ILI) ICR. 2 All ratings given by the ICR should use a six-point rating scale (Highly Satisfactory, Satisfactory, Moderately Satisfactory, Moderately Unsatisfactory, Unsatisfactory, or Highly Unsatisfactory), except for the rating of Risk to Development Outcome (or Global Environment Outcome) that use a four-point scale (Negligible to Low, Moderate, Significant, High).

2

C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance Indicators QAG Assessments (if any) Rating

Potential Prob. Project at any time(Yes/No): Yes Quality at Entry (QEA): None

Problem Project at any time(Yes/No): Yes Quality of Supervision (QSA): None

DO[GEO] rating before Closing/Inactive status: Satisfactory

D. Sector and Theme Codes3

Original Actual Sector Code (as % of total Bank financing) 94 94 1. Flood protection 2 2 2. General water, sanitation and flood protection sector 4 4 3. Sub-national government administration Original Priority Actual Priority Theme Code (Primary/Secondary) 1. Access to urban services and housing P P 2. Other urban development P P 3. Water resource management S S

E. Bank Staff

Positions At ICR At Approval

Vice President: Hasan A. Tuluy Pamela Cox

Country Director: Penelope Brook Axel van Trotsenburg

Sector Manager: Wambui Gichuri Jose Luis Irigoyen

Project Team Leader: John Morton Maryse Gautier

ICR Team Leader: John Morton

ICR Primary Author: Julie Biau

Sergio Mora Castro

F. Results Framework Analysis Project Development Objective The proposed APL project, Phase 1, would increase the City of Buenos Aires resilience to flooding through pro-tection of its critical infrastructure and with the introduction of a risk management approach to the government investment program. The project would focus on the issues of risk identification and reduction through preven-tion, mitigation, education and training. 3 There can be a maximum of five Sector Codes (that has more than zero percent) and five Theme Codes (of which at least one must be “Primary”).

3

Revised Project Development Objective

N/A (a) PDO Indicator(s)

Objective Indicator Baseline Value Original Target Values

Actual Values Achieved at Completion or Target Years

Project Development Objective Indicators Increase the City of Buenos Aires resilience to flooding through protection of its critical infrastructure and the introduction of a risk management approach to the government investment program.

PDO Indicator 1: Population aware-ness, preparedness and consciousness assessed through survey.

Survey

Significant change

NOT MET. While awareness of the Project works amongst the target population was high, the end of project perception survey (May 2012) finds only a limited level of aware-ness of the causes of flooding amongst the randomly sampled households, and low adoption of flood preparedness measures. - Awareness of the Project in the Maldo-nado Basin is substantial, with 85% of the population aware of the works. - Regarding awareness of flooding and its causes, only 60% of population within the Maldonado basin is aware of living in a flood zone, and only 22% of these house-holds cite residing in a watershed as the main explanatory factor for flooding. - Regarding preparedness, only 45% of population within the Basin, including the most critical area, takes preventive measures when a storm approaches. - Compared to previous years, the adop-tion of preventive measures in the Mal-donado Basin has stayed the same for 55% of the population and only increased for 1 in 5 households.

PDO Indicator 2: Increment of real estate market value reflecting increment of food protection level.

2006 values

Non-built par-cels: $829/m2; Dwellings: $1343/m2

Non-built parcels: +10% Dwellings: +4.5%.

N/A. It is too early to understand the impact of reduced flooding on real estate values as the tunnels are just beginning to be oper-ated.

(b) Intermediate Outcome Indicator(s)

Objective Indicator Baseline Value Original Target Values

Actual Values Achieved at Completion or Target Years

Intermediate Results Indicators Component 1: Risk Management Scheme Introduce flood risk prevention criteria in planning and decision making processes in both the public and private sectors.

IO Indicator 1a: Improvements of the haz-ard map: Improved reso-lution and accuracy

Unpublished map.

Published map.

PARTIALLY MET. The improved zonation included the incorporation of new data. The offi-cial publication is expected to be available by end 2013.

4

IO Indicator 1b: Adjustments to the regu-latory framework submit-ted to the Government.

Unadjusted framework

Adjusted

framework submitted for

approval.

NOT MET. This is expected for 2013. A draft law has been prepared, and the urban planning code is being discussed by the Ministry of Urban Development and other City agencies.

Population and institutional awareness and preparedness facing storms.

IO Indicator 1c: Efficiency of communica-tion program.

No communica-tion program.

Significant number of

people target-ed.

MET. The target of ‘significant number of people targeted’ was met, with 53,804 views of the Hydraulic Plan website. Awareness of the Project in the watershed significantly increased with 85% aware of the new Arroyo Maldonado hydraulic Works (ac-cording to the May 2012 end of pro-ject perception survey). In spite of the significant number of people targeted however, this survey found less conclusive results in terms of awareness of the causes of flooding and flood preparedness measures.

Increased effectiveness in risk prevention and management.

IO Indicator 1d: Institutional organization and procedures efficiency assessed through an auto perception survey

Auto-perception as-sessment not undertaken.

Auto percep-tion survey undertaken.

NOT MET. Auto perception survey not under-taken.

Introduce flood risk prevention criteria in planning and decision making processes in the public sector.

IO Indicator 1e: Incorporation of results of studies in future TOR for solid waste management.

Measurement not completed.

Measurement completed.

MET. Results incorporated into the envi-ronmental management plan for operation.

IO Indicator 1f: Incorporation of results of studies in planning and management of green areas and urban forestry.

Not incorpo-rated.

Incorporated.

MET. Incidence of urban tree cover and green areas in the runoff coefficient.

Component 2: Development of Key Defense Facilities. Increase Maldonado resilience to floods through the protection of its critical infrastructure for a 10 year return period

IO Indicator 2a: Once in operation, a set of indicators established for the operation of the hy-dro-meteorological net-work show that results are consistent with design.

Level of protec-tion minor. Less

than a return period of 2

years.

Level of pro-tection return period of ten

years.

MET. Completed showing results are con-sistent with design regarding: - Model vs measurements con-

sistency - Total maximum output flow - Street water levels - Additional drainage capacity

Instruments designed to in-crease the City’s resilience to floods and improve the City’s authorities’ capacity for invest-ment decisions.

Instrument designed to increase city resilience to floods and to increase city authorities’ capacity to make informed decision making for investment.

Preliminary sketch for each

basin.

Project studies for other ba-sins complet-

ed.

PARTIALLY MET. Several instruments are available thanks to the Project: Hydraulic plan, Maldonado Basin project, Physical and mathematical models, Agree-ment with La Plata National Univer-sity, SIHVIGILA bidding docu-ments, Master Plans for green areas and urban forestry, and a draft law to adjust building and planning codes. With regards to the target of com-pleting studies for other basins, how-ever, the contract for this work is underway but only 20% of products have been finalized. All products are expected to be completed in 2013 with City of Buenos Aires funds.

5

G. Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP Actual Disbursements (US$mil.) 01 04/29/2005 Highly Satisfactory Satisfactory 0 02 12/05/2005 Highly Satisfactory 0 03 06/06/2006 Satisfactory Satisfactory 0 04 06/30/2006 Satisfactory Unsatisfactory 0 05 10/04/2006 Satisfactory Satisfactory 0 06 04/16/2007 Satisfactory Satisfactory 0 07 09/04/2007 Satisfactory Satisfactory .33 08 04/17/2008 Satisfactory Satisfactory .33 09 10/30/2008 Satisfactory Satisfactory 8.26 10 05/12/2009 Satisfactory Satisfactory 12.33 11 12/11/2009 Satisfactory Satisfactory 31.62 12 05/14/2010 Satisfactory Satisfactory 43.56 13 02/27/2011 Satisfactory Satisfactory 85.18 14 12/21/2011 Satisfactory Satisfactory 117.05 15 06/27/2012 Satisfactory Satisfactory 131.50

H. Restructuring (if any)

Restructuring Date(s)

Board Ap-proved PDO

Change

ISR Ratings at Re-structuring

Amount Disbursed at

Restructuring in US$m

Reason for Restructuring & Key Changes Made

DO

IP

12/2/2010 S

S 18.73 Closing date extended for eighteen (18) months from December 31, 2010 until June 30, 2012; Loan Agreement amended to accurately re-flect the new administrative structure of the Borrower’s Ministry of the Treasury (MoT) and reflect the incor-poration of the Borrower’s Ministry of Urban Development (MoUD) in the implementation of the Project.

06/11/2012 S S

131.22 Changes to intermediate outcome indi-cators; Closing date extended for two (2) months to August 31, 2012; Reallocation of funds from two of the Loan Agreement disbursement catego-ries (“Non-Consultant Services” and “Goods”) to the “Consultants' Services and Project Audits” category.

If PDO and/or Key Outcome Targets were formally revised (approved by the original approving body) enter ratings:

N/A (no ratings entered)

6

I. Disbursement Profile

1. Project Context, Development Objectives and Design

1.1 Context at Appraisal 1. City and Sector Background. Flooding is a regular occurrence in the City of Buenos Aires, re-ducing the quality of life, causing damage to property and posing public health risks. The City is particu-larly vulnerable to flooding due to the heavy precipitation events throughout the year and flat topogra-phy. Additionally, due to the combined effects of modified precipitation patterns, hydrological conse-quences of urbanization, and the volume of solid waste in the streets, the City’s drainage capacity has not kept up with its growth. The resulting costs are especially severe as the Buenos Aires economy ac-counts for a large share of Argentina's GDP (nearly 24% at the time of project Appraisal in 2004). En-suring connectivity between the greater metropolitan area and the City’s economic center through the protection of key transport routes from flooding hazards is a central piece of the City’s strategy to in-crease productivity and competitiveness. 2. Prior to Appraisal, drainage investments in Buenos Aires had been limited. Flood recurrence was especially problematic in the area around the former Maldonado Creek, which covers a central area of the city and is home to one third of the City’s population. 37 episodes of flooding occurred in the Mal-donado basin between 1984 and 2004, which overflowed almost annually at the time of Appraisal, clog-ging the City’s drainage system and causing flooding at high cost to inhabitants and commuters. The Government of Argentina started addressing flooding issues more aggressively in 1992 in partnership with the City of Buenos Aires and the Littoral Provinces, with the vision of moving from a disaster-response approach to a risk prevention one. The Government’s investment in flood protection between 1992 and 2004 reached US$630 million. In addition, with the help of a study financed through the World Bank’s Flood Protection Project (loan 4117-AR, P006052), several provinces and cities including the City of Buenos Aires developed a risk management strategy and identified flood defense invest-ments.

7

3. At the time of Appraisal, following the 2001-02 economic crisis, Argentina was facing the chal-lenge of restoring sustainable long-term economic growth and alleviating the high levels of unemploy-ment and unprecedented poverty rates (which increased from 25% in 1999 to 54% in 2002). Through disciplined fiscal and monetary policies, the Government had stabilized the economy, which rebounded strongly in 2003 and 2004. The exchange rate of the Peso to the Dollar was relatively stable in 2004 yet inflation was rising steadily, from 2.3% in April 2003 to 9.2% in April 2005 when the Project was ap-proved (inflation eventually reach 12.3% by January 2006). The Government’s strategy at this time was to rebuild an economy that delivered sustained growth within a framework of social equity and fiscal stability. This included a focus on enhancing access to basic services to the poor and removing infra-structure bottlenecks to foster productivity, increase competitiveness and improve social welfare. 4. Rationale for Bank Assistance. At Appraisal, the Bank had already been involved in flood con-trol and prevention in Argentina for twelve years, with the financing of three major projects, two of which were still in their final phases in 2004 (Flood Protection Project Loan 4117-AR P006052 and Emergency Flood Protection Project El Niño 4273-AR P055935). The Bank had also developed a breadth of experience in disaster risk management and had an evolving portfolio in disaster management lending. The World Bank Group’s Country Assistance Strategy 2004-2008 (Report No. 27340-AR, dis-cussed by the Executive Directors on April 15, 2004), stressed three pillars: (i) sustained growth with equity, (ii) social inclusion, and (iii) governance. The CAS included an Adjustable Program Loan (APL) for an Urban Flood Prevention and Drainage Program, which emphasized infrastructure provision as a means to fostering social inclusion and growth. This APL sought to develop a risk management frame-work to increase economic resilience to flooding in the City of Buenos Aires (phase 1) and in provinces subject to flooding (phase 2). The Project currently reviewed is the first phase of this Program (APL1). 1.2 Original Project Development Objectives (PDO) and Key Indicators: 5. The Project Development Objective (PDO) of the APL1 Project aimed to increase the City of Buenos Aires’ resilience to flooding through protection of its critical infrastructure and the introduction of a risk management approach to the government investment program. The Project sought to focus on the issue of risk identification and reduction through prevention, mitigation, education and training. 6. The PDO’s key performance indicators were: (i) population awareness, preparedness and con-sciousness assessed through survey; and (ii) increase of real estate market value reflecting increment of flood protection level. 1.3 Revised PDO and Key Indicators, and reasons/justification: The PDO was not revised during Project implementation and the key indicators were not changed. 1.4 Main Beneficiaries: 7. An analysis at Appraisal indicated that recurrent flooding directly or indirectly disrupted the lives of at least a third of the Buenos Aires population by causing severe damage to private and public property, decreasing real estate values and affecting economic activity due to disruptions to the transpor-tation, electric and telephone services. Of the City’s workforce, approximately 49% of those interviewed regarded their economic activity affected in some way by floods, 35% worked in the basin, and 13% needed to travel through it. Flooding was also found to affect 45% of the city's student population.

8

8. Of the population affected by floods in the City of Buenos Aires, it was estimated that the Pro-ject4 would benefit approximately 1.5 million people, 110,000 of which lived in the most critically ex-posed areas. Additionally, the Project was expected to have an indirect positive effect on those study-ing/working or travelling through the area including at least 161,000 city dwellers and approximately 335,000 peri-urban workers. The survey carried out at the end of the project in May 2012 found that the total number of inhabitants of the critical zone within the Maldonado Basin was 342,968 people, equiva-lent to 11% of the City, which can be considered the Project’s direct beneficiaries at Project closure. 1.5 Original Components: The Project components, as originally planned in the PAD, were: 9. Component 1: Risk Management Scheme - € 4.62 M (US$ 6.14 M equivalent). The non-structural measures component sought to assist the City government to promote a risk management ap-proach in dealing with floods, including prevention, mitigation and response; and to strengthen the exist-ing City Agencies so as to enable the transfer of responsibilities to them from the Project Implementa-tion Unit (PIU) during implementation. Planned activities included: (i) installation of a hydro-meteorological warning system; (ii) development of vulnerability and risk analysis tools; (iii) prepara-tion and diffusion of contingency and emergency plans; (iv) improved solid waste management; (v) studies to increase and improve green areas and an urban forestry program; (vi) a hydrological, envi-ronmental, communication and education program; and (vii) studies for setting up an institutional framework for flood prevention, response to emergency situations, and infrastructure maintenance. 10. Component 2: Development of Key Defense Facilities - € 91.83 M (US$ 121.8 M equiva-lent). The structural measures component sought to finance works for a total of US$ 182 million, includ-ing the construction of two collection tunnels of respectively 9.9 km and 4.7 km (US$ 145.7 million), and 46 km of additional secondary connections (US$ 30.9 million) to improve the functioning of the ex-isting drainage system in the Maldonado Basin. These works were designed to avoid flooding in the area of the City within the Maldonado Basin during rain events of 10 year intervals. The component also planned to finance: (i) additional feasibility studies, such as modeling of the inlet structures connecting the tunnel to the Maldonado culvert, (ii) detailed feasibility studies for the other water basins of the City, (iii) specialized supervision for tunnel construction, and (iv) a Technical Panel of Independent Advisors. 11. Component 3: Project Implementation and Auditing - € 1.55 M (US$ 2.06 M equivalent). This component was designed to cover the cost of Project implementation and annual audits as request-ed under Bank procedures, with the implementation cost expected to decrease progressively over time as the implementation unit transferred responsibility to City agencies according to their capacity. 1.6 Revised Components: No formal revision of components took place during implementation. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design, and Quality at Entry

4 A social assessment was carried out at Appraisal to estimate the impact of the Project on the City and quantify beneficiaries. The City's Annual Household Survey, the National Institute of Statistics and Census (INDEC)’s Permanent Household Sur-vey (2003) and the 2001 Census provided quantitative data, complemented by a public hearing and focus group sessions.

9

12. The Project’s technical design was appropriate given its objective to “increase the City of Bue-nos Aires’ resilience to flooding through protection of its critical infrastructure and the introduction of a risk management approach to the government investment program”. Based on good practice, the Project considered both structural and non-structural measures, so as to improve resilience not only through physical investments and increased protection levels, but also by moving the City towards a risk preven-tion approach in line with the national Government’s strategy. Project preparation recognized the neces-sary planning and due diligence that these measures require and put forth the necessary resources and attention. As discussed below, some of the key factors at preparation that contributed to project achievements include strong ownership of the Project on behalf of the City Government and the effort put into planning and design of the works. On the other hand, the approach to cost estimations and the design of the non-structural measures could have been better adapted to the prevailing economic and institutional context. 13. Government Commitment: At the time of preparation, the national Government as guarantor of the Loan was highly committed to the Project, as the first phase of the nationwide APL for an Urban Flood Prevention and Drainage Program. Likewise, the City of Buenos Aires as Borrower had already demonstrated strong ownership and commitment to implement the Project, and had created a Sub-Unit for Emergency Coordination to facilitate preparation and implementation. Given the effort and resources needed to complete such works, strong government commitment was crucial to their realization. 14. The Project was born from an integrated planning exercise: The framework under which the Project was identified and designed was a four-year study of the Buenos Aires drainage system, funded under the Flood Protection project (4117-AR, P006052). This study identified structural weaknesses in the City’s drainage network and delivered a program of structural and non-structural measures for all its drainage basins; carried out a feasibility study for the Maldonado stream, and delivered executive de-signs for major infrastructure investments in its basin; and designed a Hydraulic Master Plan for the City’s urban drainage system. The complexity of the system and the need for an integrated perspective made this study instrumental in providing a technical solution that would be functional and have high impact. It also provided a vision that built ownership for follow-on activities within the Project.

15. Technical design and due diligence of structural measures: It was recognized that given the complexity of the works and the need to implement technologies that were new to the country, it would be essential to take great care in defining the Project’s technical aspects. The technical approach leading to the identification of the selected structural solution was carried out under Bank supervision of the Flood Prevention project (4117-AR, P006052). This included comprehensive hydrological analysis and hydraulic modeling, a study of 27 different technical alternatives for flood recurrences from 2 to 50 years (including full economic and environmental studies for six of these), and a detailed study of the preferred solution. The selected alternative was chosen on the basis of producing the greatest absolute benefits, cost-benefit analysis, and offering the maximum feasible level of protection. Various construc-tion and operation methods were considered, resulting in the choice of tunnel boring machines. Further-more, the World Bank and the City complemented this work with rigorous due diligence. In addition to its own review and endorsement of the designs and selection methodology, the Bank appointed a tech-nical panel of independent international experts to evaluate the engineering proposal presented by con-sultants and the City of Buenos Aires. The panel reviewed the study of alternatives, the design criteria, the hydrologic study and hydraulic model, the process leading to the selection of alternatives and the final selection, and issued recommendations to reduce risks during construction and implementation.

10

16. Cost estimates: The background study and cost estimates were mostly carried out in 2001. As a result, while the study’s recommendations remained technically sound at Appraisal in 2005, cost esti-mates for the works did not reflect the economic situation prevailing in Argentina, which was extremely volatile (amongst other factors, the inflation rate rose from 2.3% in April 2003 to 9.2% in April 2005 when the Project was approved, and would reach 12.3% by 2006). Cost estimates also did not include sufficient contingencies for exchange rate and inflation risks and the impact of potential delays on cost.

17. Implementation arrangements for non-structural measures: The inclusion of both structural and non-structural measures is an important feature of the Project’s design, and was aimed at ensuring the sustainability of the works and creating an integrated approach to flooding. However, the combina-tion under a single operation of so many activities with such diverse needs - in terms of financing, re-quired technical expertise, and scale - posed an implementation and management challenge for the PIU. This difficulty was reinforced by the low financial value of the non-structural activities (less than 5% of the total Loan) relative to the structural measures. Additionally, given that the mandate for many of the-se non-structural measures lay outside of the PIU, the Project should have included explicit funds for capacity building and coordination within the City’s Agencies, to enable responsibilities to be trans-ferred directly to them as originally planned. As it was, institutional strengthening activities represented under 1% of the Loan and only partially succeeded in transferring responsibilities to the City Agencies. 2.2 Implementation: 18. The exceptional efforts made to ensure technical quality continued through implementation, con-tributing to the quality of the works and the timely execution of the major contract. The implementation of the works was a challenging task given the scale, complexity and novelty of the Project, which was carried out successfully and with high technical standards in spite of severe budget constraints. The re-sulting flood defense infrastructure constitutes an impressive engineering feat: the construction of two drainage tunnels (of length 9.8km and 4.6 km respectively and 6m inner diameter) was carried out un-derneath a working city with minimal disruption. Furthermore, the PIU has engaged in planning the op-erational phase of the works and ensuring their maintenance, and is actively identifying opportunities for replication in other basins. The successful implementation of this integrated approach can be considered good practice for other infrastructure projects. Factors that affected implementation outcomes included: 19. Additional time needed for effectiveness and procurement: The Loan was approved on April 5, 2005, was signed by the Ministry of Finance May 18, 2006, and was declared effective on August 16, 20065. Procurement and contracting of the main works had begun before Effectiveness and the works began on May 21, 2008. The delay in signature the Loan resulted from the additional procedures associ-ated with the presence of two autonomous levels of Government authorities (National and Municipal). The time period required for procurement in contracting of the main works was longer than anticipated due to the complexity and novelty of the works being undertaken, and the time needed for review of the

5 This delay between approval and effectiveness was related to difficulties in the preparation of the guarantee and counter-guarantee agreements by the Federal Government and the City of Buenos Aires, due mainly to fiscal issues related to the choice of currency: the City Indebtedness Law approved before Bank Approval did not specify the Loan amount in Euros.

11

bidding documents and process6. Further delays between bidding and signature of the contract resulted from the need to carry out a detailed evaluation of the hydraulic functioning of the tunnels and the prep-aration of physical models. This additional analysis, recommended by the Panel of Experts, was carried out to address doubts raised after Appraisal over the merits of the technical solution. These delays in ini-tiating the works impacted not only disbursements and the implementation timeframe, but also contrib-uted to increasing the costs of the works, affecting the scope of activities that could be completed under the Loan. To respond to the additional time needed for implementation, the Project was extended twice as part of Project restructurings in December 2010 (18 months) and June 2012 (2 months). 20. Quality of contract supervision and technical review: Once contracted, the works were com-pleted on schedule (lasting 52 months, just two more than the expected 48), and the tunnels’ cost per lin-eal meter was lower than that of other similar works worldwide (US$11,900 vs. US$14,000). The con-tracting by the PIU of a supervision firm for the works and appointment of a technical Panel of Experts undoubtedly contributed to the technical quality of the final work. Additionally the PIU was well-staffed (consisting of 30 people) and underwent very little staff rotation, which helped to keep Project works on track in terms of cost and time. This was also facilitated by the presence of a geotechnical ex-pert and an environmental specialist within the Bank team, who conducted regular site visits and provid-ed periodic guidance to the PIU. The coordinated engagement by the Bank team and the City allowed the Project to proactively address potential bottlenecks in importing critical machinery, or a judicial rul-ing to temporarily halt works, all of which were resolved in parallel to the Project’s continued progress. No excessive extensions were needed, which is a notable achievement for a Project of this complexity. 21. Design change: A design change was proposed by the construction firm after contract signing, consisting of revisions to the design of the access shaft, which represented an increase of 8% over the initial contract value (a US$13 M cost increase). This design change was meticulously assessed by the Bank, the Panel of Experts and the supervision firm, and was found to mitigate construction risks related to the structural and hydraulic stability of the well. By simplifying the works and making them safer to carry out, these revisions allowed the works to proceed more rapidly than originally anticipated and with exceptional security standards; indeed, only one incident occurred during construction, a remarkable record. The design change did not affect the functioning of the works, and hydraulic studies show that the evacuation capacity of the shaft is the same as in the original design, with the principal change being avoidance of siphoning of the Puelche aquifer. This change also allowed works to begin on the short tunnel before the long one, thus gaining 90 days on the expected Project timeframe. Yet the change also increased the costs of the main tunnels, reducing the budget available for other activities.

22. Inflation and exchange rate fluctuations: The cost of the structural works increased due to in-flation adjustments in the contract and currency exchange variations. Between Approval in April 2005 and beginning of the works in May 2008, the total depreciation of the Peso with respect to the Loan cur-rency (Euros) was of approximately 30%, and of 53% between Approval and Project closure in July 2012. In parallel, official inflation figures in the country ranged from 5.3% to 12.3% during this time period, averaging 9.3%, which increased costs of the works and further reduced the available budget. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization:

6 Bidding documents took a full year to be finalized by the Borrower and approved by the Bank, due mainly to lengthy due diligence procedures for this very large contract which required OPRC review. Discussions with the City during ICR prepa-ration indicated that the time needed for review was a preoccupation but that there was significant value added in the process.

12

23. Poor indicator design. While the PDO was well formulated, the PDO indicators are not aligned with it and do not adequately reflect the Project’s objectives or impact. PDO indicator 1 focuses on pop-ulation flood awareness and preparedness, which was affected only by a fraction of Project activities, and PDO indicator 2 focuses on increase in real estate values, which cannot be adequately measured in the available timeframe. Both indicators pose measurement challenges due to their vagueness or com-plexity7, and neither one captures the successful outcomes of the Project in terms of carrying out highly complex works to high technical standards, tripling the drainage capacity of the Maldonado basin, and establishing an integrated flood management approach within the City Government. Additionally, the number of indicators for non-structural measures (representing only 5% of the total Loan) was dispro-portionately higher than those for structural measures. The Bank team missed the opportunity to lever-age Project restructurings to meaningfully modify its main indicators: modifications made to the results framework in June 2012 were not sufficient to provide a reliable set of indicators by which to assess the Project’s impact, and the resulting indicators do not do justice to the Project’s successful outcomes. 24. Difficulties in implementing and utilizing indicators. Owing to the complexity of measuring the Project’s indicators, most of these could not be appropriately tracked during implementation and many were not used until the end of the Project. Indeed, as late as May 2010 the Bank team still could not provide target values or intermediate results for most of the Project’s indicators, and these provided almost no information enabling the monitoring and tracking of the Project’s main works.

25. A useful and effective monitoring system for the construction contract. The City relied on a useful system to monitor the progress of the construction works, which efficiently identified bottlenecks and allowed for proactive management of the works contract. This system was established by the City and the contractor with inputs from the Bank team, and also included a system of regular monitoring of the quality of the works through the supervision contract and regular site visits by the Bank team. 26. A monitoring system for the operation of the works. Although shortage of funding meant that the Project could not achieve the development of a complete hydrological monitoring network for the City8, impressive efforts were made to establish and use a monitoring mechanism capable of determin-ing the impacts of the works on flood prevention. A network of hydro-meteorological and hydrometric stations was established during the works’ construction, and a robust auscultation network already in-forms the operation phase. A partnership was established early in implementation with La Plata National University, which has provided support to the PIU in monitoring rainfall and flows and modeling the tunnels’ behavior. An agreement has been signed to continue this support beyond the Project’s closing date. These arrangements have enabled the PIU to be strongly involved in planning the Project’s opera-tional phase and identifying opportunities for replication, a rare achievement amongst such projects.

7 PDO indicator 1 (“Population awareness, preparedness and consciousness, assessed through survey”), is not sufficiently specific as to suggest a clear measurement method, has a very vague target (“significant change”) and has no baseline; and PDO indicator 2 (“Increase of real estate market values reflecting incremental improvements in flood protection levels”), has a clear target value (“+10% in non-built plots and +4,5% in housing” based on Hedonic Pricing), but has limited measurabil-ity (due to the complex exogenous factors in the real estate market and the timing of the Project, it would be difficult to rig-orously establish a causal link between improvements in flood protection levels and increase of real estate market values). 8 The bidding documents for such a network were prepared by the PIU and the corresponding bidding process launched in May 2012; this process was subsequently declared void, but the City has re-launched the bid and will finance the construction of this network with own funds as part of the priority activities under its hydraulic master-plan (PGRH).

13

2.4 Safeguard and Fiduciary Compliance: 27. Ratings for safeguard compliance remained “Satisfactory” (S) throughout implementation. Social and environmental issues raised by stakeholders during implementation were duly addressed, and an environmental management plan has been initiated for the operation and maintenance of the works. The absence of any environmental issues during implementation is noteworthy for a Project with a Cat-egory A environmental assessment. Further details on safeguard compliance are provided in Annex 10. 28. Financial Management (FM) was rated “Satisfactory” (S) throughout implementation. The Project complied reasonably well with prescribed Financial Management (FM) arrangements and Bank requirements, such as acceptable periodic IFR reporting and up to date accounting records. Those ar-rangements provided reasonable assurance that the loan funds were used for the intended purpose. Pro-ject transactions were mainstreamed into the General Budget of the City of Buenos Aires and subject to the City internal controls. Project transactions were also subject to the external oversight of private audit firms, whose last audit report submitted to the Bank (December 31, 2011) showed unqualified audit opinions on the SOEs Statement and the Designated Account. While a qualified opinion was issued on the Project Basic Financial Statements due to lack of supporting documentation, the issue was not mate-rial nor indicated any accountability issue. Audit reports were reviewed through implementation and always deemed acceptable. The Project audit report for 2012 is expected to be received by the due date. 29. Procurement was rated “Satisfactory” (S) throughout much of implementation with the ex-ception of the December 2011 ISR, in which the rating was “Moderately Unsatisfactory” (MU) due to irregularities in hiring of consultants, time needed for the PIU to address recommendations made through previous Bank procurement reviews, and delays at different stages of contract processing. These challenges were resolved with the PIU through a corrective action plan. This was an isolated incident, as quality of procurement has otherwise been high, with evaluations of proposals for consultant services presented in a clear and professional manner. The Project’s main procurement challenge was the adjudi-cation of the structural works, which followed a lengthy process to develop the bidding documents and award the contract. These delays were justified as part of additional due diligence procedures on behalf of the Bank given the size of the contract, and did not result from insufficient procurement capacity. 2.5 Post-completion Operation/Next Phase: 30. The City of Buenos Aires is well-equipped to carry out the operation and maintenance of the completed investments. The City has contracted the maintenance of existing drainage works to the private sector and has committed itself to extend these contracts to the secondary network once its con-struction is complete. A comprehensive environmental management plan has also been developed for the operation and maintenance phase of the tunnels, and a contract has been signed by the City with a private company for their regular cleaning. Furthermore, the Project has helped the City of Buenos Aires to develop very strong technical capacity for the planning, design, and mathematical simulation of the City’s drainage system, whose performance can be monitored during operation through hydro-meteorological and hydrometric analysis. The designs developed for the Maldonado works are being applied elsewhere in the City – at the planning stage – for other large-scale drainage projects. The PIU’s focus on the Project’s replicability and sustainability in the operation phase demonstrates an integrated approach to urban water management, which other cities in the region are still struggling to implement.

14

31. The City of Buenos Aires has signaled its commitment to finish uncompleted activities. The authorities of the City of Buenos Aires have confirmed their commitment to proceed with the implemen-tation of the PGRH, under which the top priority measure was the execution of drainage improvements in the Maldonado basin. The subsequent investments in order of priority are to develop a superior plan for the City, under which the Project’s non-structural measures would be continued, and to carry out the drainage improvements identified by on-going studies for the Vega basin. While there is no budget cur-rently identified for the execution of these works, the City of Buenos Aires legislature passed a law in late 2012 allowing the City to incur debt in order to finance drainage interventions. The City has further informed that it will request the National Government to prioritize the sector in future Bank funding. The Borrower also recognizes the need to carry out the following activities with its own funds: works for all six groups of secondary drainage networks; the implementation of the PGRH (encompassing all planned non-structural measures); the consultancy for projects in other basins; and the establishment of inter-institutional arrangements for the adequate functioning and sustainability of the works. The neces-sary next steps for each of these measures have been laid out in the Project’s Aide Memoires, and the City’s commitment to proceed with these activities has been verified by the contracting of consultants for designing executive projects in other basins, and by the allocation of funds from the 2012 City Budget for the construction of two of the six planned groups of secondary networks (groups A and B), for which works are underway. However, the execution of all these measures is estimated to require an additional US$90M, for which funds have not been identified. The risk that this magnitude of funds may not become available poses a potentially serious threat to the sustainability of the Project’s investments. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 32. The PDO was relevant at Appraisal: The Project’s development objectives were highly rele-vant to national priorities and to the Bank’s Country Assistance Strategy at Appraisal, and this continues to be the case at the Project’s closing. Both the World Bank Group’s Country Assistance Strategy for 2006-2008 (Report No. 34015-AR, discussed by the Executive Directors on May 4, 2006) and for 2010-2012 (Report No. 48476-AR, discussed by the Executive Directors on May 6, 2009) emphasize the three pillars established in the 2004 CAS, namely sustained growth with equity, social inclusion, and im-proved governance. Both documents include urban flood prevention and drainage infrastructure as one of the main focus areas for the Bank’s investment lending within the ‘social growth and equity pillar’. 33. The Objectives continue to be relevant: Flood prevention and drainage remains a top priority both within the national Government and the Government of the City of Buenos Aires. At the national level, the Urban Flood Prevention and Drainage Program’s APL2 is still underway in a number of Prov-inces, and the Government remains committed to its objective of promoting the country’s move from a disaster response approach to a risk prevention one. At the City level, there is strong awareness within the Government and the citizenry of the need for flood prevention, the role the Project has played, and the potential impact that the planned future investments would have. Furthermore, heavy precipitation and flooding continue to affect the country on a regular basis, as was made clear by the heavy material damage caused by the 2012 rains. The public response to these floods and to their reduced occurrence in the Project Area, as evidenced in the press and eyewitness accounts, further highlights relevance of the Project and the continued need for investment.

15

The ICR consequently rates the relevance of the Project as “high”. 3.2 Achievement of Project Development Objectives: 34. The PDO was to increase the City of Buenos Aires resilience to flooding through protection of its critical infrastructure and the introduction of a risk management approach to the government invest-ment program. Overall, the project did not meet the PDO indicators; however it contributed to the objec-tives as stated in the PDO. 35. The Project contributed to the protection of critical infrastructure by carrying out a very complex and unprecedented public work within high technical standards, and encouraged an integrated approach to flood prevention within the City of Buenos Aires (as demonstrated by the proactive involvement of the PIU in planning the operational phase of the works, identifying opportunities for replication, and im-plementing the PGRH with own funds). Moreover, based on the performance witnessed during heavy rain events in 2012, the Project works are already improving flood protection in the Project area, thereby directly benefitting an estimated 342,968 people by reducing the intensity and frequency of flooding in the Maldonado Basin. 36. The Project only partially contributed the objective of “introducing a risk management approach to the Government investment program” as some activities could not be completed in the lifetime and budget of the Project, the Project provided the City Government with a toolkit of vulnerability and risk analysis mechanisms; strengthened technical capacity within the City of Buenos Aires for the planning, design, and mathematical simulation of the City’s drainage system, enabling it to develop plans for oth-er basins within the City and setting the basis for future investments in risk management; and developed an integrated approach to flood management within the City of Buenos Aires, which the City is commit-ted to implement within the PGRH. 37. The achievement of the PDO and its indicators can be analyzed in two parts, as follows:

Protection of critical infrastructure: 38. The completed works have protected the project area from flooding: The major effort under-taken by the Project to protect critical infrastructure was the construction of two drainage tunnels (9.8km and 4.6 km long) and the upgrading of the secondary drainage network attached to them. At the time of this ICR, both tunnels have begun operation, and the secondary drainage network is only partially com-pleted (works underway in 2 of 6 of the proposed areas), with the remainder expected to be completed with City funds. Since the operation of the tunnels began, severe rain events have occurred in the City, during which the works successfully protected the Project area and its infrastructure from flooding. Dur-ing the intense rainfall events in March, November and December 2012 (of which the December 2012 rains were equivalent to a 50 to 100-year event, with rainfall of 177mm in some areas), repeated press coverage and testimonies from Buenos Aires inhabitants clearly indicate that while flooding was signifi-cant in other parts of the City, it was minimal in the Project area and only found in some areas. The lack of accumulation of water in historically floodable areas was verified by the PIU, for example at the in-tersection of the Juan B. Justo and Santa Fe Avenues, and the PIU estimates that the overall system (in-cluding secondary drainage networks) triples the drainage capacity of the Basin in accordance with the

16

expected design. The City attributes the limited flooding observed in the Project area to the fact that the affected areas were not served by the upgraded secondary drainage works, still under construction and bidding. Annex 9 provides simulations illustrating the area impacted by the works. 39. The end of project survey also suggests that the works have had a positive impact on the inhabit-ants of the Maldonado basin in terms of reducing the frequency and intensity of flood events. Finalized in May 2012, this survey assessed the perceptions of impact of the heavy rains that took place in early 2012, when the first tunnel went into operation. The survey found that in the Maldonado basin the per-centage of households exposed to water entry into the house due to flooding decreased by 5.8 percentage points in the Maldonado Basin population in 2012 compared to previous years (from 26.5% to 20.7%). By contrast in the control Vega Basin, in which 200 households were surveyed, the percentage of inhab-itants reporting entry of water into their households in 2012 was 6.6 percentage points higher than in previous floods (from 21.2% to 27.8%). This pattern is also reflected in questions inquiring about mate-rial losses flooding, which affected 11% fewer households in the Maldonado basin in 2012 than in pre-vious years. Finally, 84% of those living in the Maldonado Basin stated that they had suffered worse floods than those of 2012 in the past. 40. As the tunnels only began to be operated in mid-2012 it is too early to assess whether the operation of the works has resulted in increased real estate values (PDO indicator 2). The time range needed to measure this indicator is too long to enable an accurate quantification of results at Pro-ject closure. As the tunnels only began to be operated in early to mid-2012, at the time of the ICR it was too early to tell if there will be any effect on real estate values. 41. Preparedness for storms did not increase: To complement the works, it was anticipated that awareness programs would be implemented to help increase preparedness for storms in the Project area and further protect critical infrastructure (PDO indicator 1). As this was only partially completed and represented only a fraction of the Project’s activities, the Project’s outcome on this dimension was not significant, with only a limited level of awareness and preparedness existing at the end of the Project. The end of project perception survey in the watershed completed in May 2012 indicated that while awareness of the Project works amongst the target population was high, there was only a limited level of awareness of the causes of flooding amongst the Maldonado Basin inhabitants, and low adoption of flood preparedness measures. Only 60% of population within the Maldonado basin was aware of living in a flood zone; and only 45% of inhabitants, including the most critical area, took preventive measures. Introduction of a risk management approach to the government investment program: 42. Through its non-structural measures, the Project aimed to introduce flood risk prevention criteria in planning and decision making processes in the public and private sectors; increase effectiveness in risk prevention and management; and design instruments to increase the City’s resilience to floods and improve the City’s authorities capacity for investment decisions. This was partially completed. 43. Several instruments to increase resilience to floods and improve capacity for investment decisions are being used by the City Government: The most significant outcome was the develop-ment by the City of the Hydraulic Plan (PGRH), an integrated flood risk management plan that has al-ready used the vulnerability and risk analysis mechanisms developed by the Project as inputs for the elaboration of investment plans for the City’s other basins. These tools have improved the City’s capaci-

17

ty to make investment decisions, putting the City in a position to plan for future investments using the works completed under the Project as a demonstration, and leveraging the success of the first tunnel and the studies produced to mobilize funding. This effort could have a transformative impact on flood pre-vention in the City and form the basis for a broader risk management approach to investments.

44. Flood risk prevention criteria in planning and decision making have been introduced in the City Government: The Project introduced flood risk prevention criteria in planning and decision mak-ing in the public sector, through: (i) measuring the impact of solid waste on the drainage system and in-corporating this into the operational plan of the works, and (ii) incorporating the results of the study on urban tree cover and green areas in urban runoff estimates. Other efforts to this end that aimed to influ-ence both public and private sector planning, in particular the improvement and publication of the haz-ard map and regulatory framework, were not completed at the time of the ICR. The City is finalizing the improvements to the hazard map and plans its publication for 2013. Discussions around urban build-ing codes are taking place between several City agencies and a draft law is available, to be finalized once the hazard map is published. On the other hand, the planned improvements in the effectiveness of risk prevention and management (in particular the assessment of institutional efficiency) were only par-tially completed and the resulting improvements in procedures were not applied.

Overall efficacy

45. The overall efficacy of the Project is rated as “modest” due to the fact that the project did not meet the PDO indicators and only partially implemented the non-structural measures. Efficiency 46. At Appraisal, a detailed economic analysis found the Project to be economically feasible. The results showed that the Project would generate net benefits of US$33 million using the avoided costs method or US$ 13 million using the hedonic pricing method. Sensitivity and risk assessments showed that the likelihood of a negative economic output was almost non-existent. The avoided cost analysis was updated in 2007. This 2007 economic analysis was updated at the time of the ICR taking into ac-count the actual works schedule; the lower than anticipated level of completion of the works and associ-ated reduced impact; and using updated prices and exchange rates. The results found an NPV of US$16.7 million and Internal Rate of Return of 14%9. 47. The ICR Team rates the Project’s efficiency as “substantial” given the results of the economic analysis, which are above the opportunity cost of capital. 3.3 Justification of Overall Outcome Rating: Rating: Moderately Unsatisfactory 48. Despite the “high” relevance and “substantial” efficiency, the ICR Team rates the project as “Moderately Unsatisfactory” as the Project could not meet targets for its PDO indicators and only par-tially implemented the non-structural measures. 9 The updated estimates used December 2012 prices and exchanged rates and assumed conservatively based on estimates of the city that the lack of completion of the distribution systems reduced the impact to 66% of the design.

18

3.4 Overarching Themes, Other Outcomes and Impacts: (a) Poverty Impacts, Gender Aspects, and Social Development 49. The flood protection benefits brought about by the Project are likely to provide quality of life improvements to a large percentage of urban poor in the City of Buenos Aires. The baseline socioeco-nomic assessment of the Project area showed that the Maldonado Basin in 2004 was home to 24% of the city's poor (110,000 people), of which 12,400 were extremely poor (2%). This assessment estimated that in addition to the Project’s direct beneficiaries, 21,000 poor residents of the City would benefit from the Project as they worked, studied or needed to pass through the basin to go to work or attend school, in addition to another 85,500 poor peri-urban workers. In total, it was estimated that the Project would pos-itively affect at least 215,000 poor beneficiaries. The total number of poor people benefitting from the Project’s intervention is expected to have declined somewhat from this estimate due to a overall de-crease in poverty, yet the impact on the poor remains significant10. (b) Institutional Change/Strengthening: 50. The Project significantly improved the ability of the City of Buenos Aires to plan and implement investments of this scale and complexity, giving the City the track record and vision to plan and under-take the necessary resource mobilization for future works. In particular, through the Hydraulic Plan (PGRH), the City government has developed investment plans for the remaining basins in the City of Buenos Aires and is actively looking for funds. There has also been demand from the national govern-ment and in the press for these investments, based on the success of the Project works. Additionally, through its partnership with the La Plata National University, the City of Buenos Aires has developed very strong technical capacity for the planning, design, and mathematical simulation of the City’s drain-age system. This expertise should enable it to take informed investment decisions in other basins. The Project also provided physical and mathematical models, Master Plans for green areas and urban forest-ry, an environmental management plan for the operation phase of the tunnels, and integration of the im-pact of solid waste on the operation of the City’s drainage system.

51. On the other hand, the Project’s design included a mismatch of activities that did not correspond to the institutional mandate of the executing unit (UPEAM). The Project’s activities would have benefit-ed from a stronger emphasis on cross-sectoral collaboration in order to strengthen the implementation of the planned non-structural measures. The implementation and sustainability of many non-structural measures suffered from the absence of explicit incentives for such collaboration among relevant groups. (c) Other Unintended Outcomes and Impacts: 52. The City has undertaken regular communications activities to increase flood awareness and un-derstanding of the Project’s intervention, and there has been continuous press attention on the Project throughout its construction. Beneficiary surveys carried out in 2012 have shown that a large portion of

10 According to the perception survey completed in May 2012, the rate of vulnerability to poverty in the Maldonado basin dropped by 8 percentage points between 2003 and 2011. Even when taking this improvement into account, however, 590,897 inhabitants of the Maldonado basin currently live in vulnerable households, of which 200,557 are in the basin’s critical area.

19

the population is well aware of and largely approves the construction and improvements of the drainage system, in spite of the “invisibility” of the construction (mostly consisting of underground structures). 4. Assessment of Risk to Development Outcome Rating: Moderate 53. The risk to the Project’s development outcomes is “moderate”. Although sound arrangements for maintenance of the works are in place and continued implementation of the Project’s non-structural measures has substantial ownership from the groups implementing them, there is some risk that the City may not succeed in securing funding for carrying out these remaining activities under the PGRH. 54. Risk to development outcomes of works completed: In spite of its complexity, the City of Buenos Aires is well-equipped to carry out the operation and maintenance of the Project’s completed investments. The completed works were handed over to the General Directorate for the rainfall network (Dirección General de Red Pluvial) within the Ministry of Environment and Public Spaces, along with the auscultation system linked to the hydro-meteorological monitoring network to ensure the works’ ad-equate operation. The City has contracted the maintenance of existing drainage works to the private sec-tor, and a comprehensive environmental management plan has also been developed for the operation and maintenance phase of the tunnels. The main risk that may affect the operation of the tunnels in the long term is associated with poor urban planning. These risks can be mitigated by pursuing the City’s pro-posal to develop a cross-sectoral management system (Sistema de Gestión Sectorial) to coordinate the efforts of different City Agencies on flood prevention and drainage, including those responsible for ur-ban planning, solid waste management, and education. The City plans to move towards the consolida-tion of this entity as part of the PGRH. 55. Risk to outcomes as a result of non-structural measures completed: The outcomes of the non-structural measures relate most directly to the role of the City in the planning, design and risk man-agement of its infrastructure, which the City has great interest in continuing. The tools developed by the Project include designs for the City’s other basins; capacity to manage the works’ construction; incorpo-ration of green spaces and solid waste risks in drainage planning and management; and the ability to mathematically simulate the City’s drainage system. As these outcomes have strong ownership within the UPEAM and are important to the future works being proposed by them, the risk that they will not be utilized is low. UPEAM will continue working on the implementation of the City’s integrated hydraulic plan (PGRH) as part of the Ministry of Urban Development’s General Directorate for Infrastructure. There is nevertheless a risk that if the US$90M necessary to finance the remaining non-structural measures and the City’s other investment proposals are not mobilized, this interest may dissipate. Insuf-ficient coordination between City agencies may also limit the scope of this integrated framework. 5. Assessment of Bank and Borrower Performance 5.1 Bank Bank Performance in Ensuring Quality at Entry Rating: Moderately Satisfactory

20

56. The Bank team performed a comprehensive background analysis at Appraisal, recognizing the complexity of the Project, and carried out high-quality due diligence during the preparation phase. The overall framework for the Project’s activities and the technical analysis for the structural measures were developed under a Bank project on-going at the time of Preparation (4117-AR, P006052), in addition to which the Bank appointed a technical panel of independent international experts to evaluate the engi-neering proposal. Both of these measures can be considered best practice and contributed to the quality of the works, which represented the Project’s most significant outcome. Fiduciary due diligence, risk assessment, and compliance with environmental and social safeguards were also adequately carried out. 57. Nonetheless, several shortcomings in Project design proved to be sticking points in its implemen-tation, impeding the full achievement of its development objectives. In particular, the cost estimates from the background study did not provide adequate contingencies for price, exchange rates and cost increases, and were not revisited at Appraisal. In addition the combination under a single operation of both structural and non-structural measures with diverse characteristics and needs - in terms of financ-ing, required technical expertise, institutional mandates and scale - posed an implementation and man-agement challenge. Finally the inadequate design of the Project’s results indicators did not accurately reflect its impact, tarnishing its ‘overall outcome’ rating in spite of the Project’s evident success. Bank Performance in Quality of Supervision Rating: Moderately Satisfactory 58. The project had 4 different task managers during the 7 year supervision period. The Bank’s ap-proach to supervision included the presence in-country of a highly qualified task team, which enabled the Bank to undertake close supervision during and between official missions. The Bank team conducted regular site visits and provided periodic guidance to the PIU, permitting the timely progress of the works and their compliance with environmental and technical standards. The technical advice proved useful in addressing the design changes proposed for the main works and in guiding the Borrower through pro-curement requirements, delays in importing critical machinery, a judicial ruling to halt works, and stakeholder complaints. The Bank addressed the majority of such problems while reducing or eliminat-ing their impact on the pace of implementation, which progressed in insulation from these hurdles. Two aspects that could have improved supervision and implementation included implementing a more proac-tive and aggressive restructuring to address the impact of the shortfall in resources on the Project’s scope and outcomes; and leveraging the Project’s two restructuring opportunities to make more meaningful changes to its indicators. On the first point, the lack of progress on non-structural measures should have been reflected in the Implementation Progress rating (which was consistently rated Satisfactory in im-plementation status reports) so as to alert management to the Project’s restructuring needs. The Bank team made a proactive push for implementation of the non-structural measures towards the end of im-plementation, whereas a more pragmatic approach would have entailed reducing the Project’s scope to what the available funds could realistically achieve. On the second point, by undertaking only slight modifications to the intermediate indicators and neglecting to modify the outcome indicators in spite of their lack of measurability and poor connection to the PDO, the Bank team left the Project with indica-tors that do not reflect its impact and impressive performance. Justification of Rating for Overall Bank Performance: Rating: Moderately Satisfactory

21

59. The Bank’s performance at entry and its supervision are both rated as Moderately Satisfactory, on account of the robust due diligence carried out, the proactive response of the task team to the majori-ty of the implementation challenges experienced, and the close technical supervision carried out. This leads to a combined rating of Moderately Satisfactory. 5.2 Borrower Performance Government Performance Rating: Moderately Satisfactory 60. The Government in the case of this Loan should be distinguished between the National Govern-ment (the Guarantor), which provided the Guarantee for this Loan, and the Government of the City of Buenos Aires (the Borrower), to which the Loan was made. There was generally high government own-ership and strong commitment to achieving the Project’s development objectives at both the national and the City levels; counterpart funding from the City was provided in full and the City appointed a well-staffed PIU with high technical capacity, which underwent very little rotation. The main shortcoming in the Government’s performance regarded the creation of an enabling environment for the Project in terms of institutional coordination and legislation. The 18-month effectiveness delay, while not wholly within the Borrower’s control, resulted from legal difficulties in obtaining the signature of the Guarantee Agreement from the National Government; the implementation of non-structural measures could have been facilitated by further inter-institutional collaboration; and the publication of the flood hazard map and updating of urban building codes could have progressed faster with stronger explicit support from the City. However, these shortfalls did not prevent the successful implementation of the Project’s main activities; moreover, the City has established clear plans for the carrying out the Loan’s remaining activ-ities in the context of the PGRH. Implementing Agency Performance Rating: Highly Satisfactory 61. The implementing agency (PIU) UPEAM in the City of Buenos Aires was proactive in facilitat-ing Project implementation, beginning the preparation of bidding documents for the Project’s main works prior to effectiveness, contributing to quality assurance by setting up a new Panel of Experts for the construction period, and assisting in the resolution of unforeseen implementation hurdles. In particu-lar, the PIU demonstrated far-sightedness in its response to the design changes proposed by the contrac-tor of the main works. This design change contributed to cost savings in terms of the timeliness and safety of the works. Likewise, the PIU’s response to the financing gap was highly appropriate and stra-tegic in light of the Loan’s available resources: the PIU prioritized the excavation of the main tunnels at the expense of the non-structural measures and secondary drainage networks, as the Project would have certainly failed in its objectives had the tunnels been left incomplete, and their estimated contribution to the City’s drainage was significantly greater than that of the Project’s auxiliary activities. By keeping sight of the Project’s final objectives and making difficult and strategic decisions, the PIU was able to implement works of great technical complexity using a novel technology previously untried in Argenti-na, with a safe, high-quality and on-time construction. The PIU also maintained procurement and finan-cial management arrangements compatible with Bank standards, successfully navigated the OPRC pro-cess for large contracts, and complied with the requirements of the Bank’s safeguards throughout im-

22

plementation. The PIU is currently engaged in planning the operation phase of the works and identifying opportunities for replication, which should further enhance the Project’s sustainability and impact. Justification of Rating for Overall Borrower Performance Rating: Satisfactory 62. Overall Borrower performance is rated as Satisfactory, on account of the quality of the Borrow-er’s continued commitment to the Project’s objectives, the proactive response of the PIU to the imple-mentation challenges experienced, and the timeliness and high technical quality of activities carried out. 6. Lessons Learned 63. For complicated works that are new to a country or sector, robust background analysis is crucial to a high-quality outcome, and could require a feasibility analysis as part of a separate project. The fact that the APL1 was born from an integrated planning exercise through a four-year study funded by a previous operation (4117-AR, P006052) suggests that project preparation teams need to be highly realistic about the technical and financial resources and the timeline required for the planning process. The appointment of a panel of experts, contracting of a technical supervisor, and carrying out of thorough background analysis contributed greatly to the technical quality of works and to the appropri-ate management of the Project’s environmental assessment category (A). Additionally for complicated works such as these, where there may be value added for the contractor to provide inputs or adjust the designs, design-build contracts might be considered. 64. A combination of structural and non-structural measures is a necessary but challenging feature of integrated flood management projects, which requires specific implementation ar-rangements to incentivize the prioritization of both dimensions. The design of non-structural measures should recognize that their lower costs relative to works and potential mismatches in institu-tional mandates may affect their priority and execution. While non-structural measures such as educa-tion programs and the revision of urban planning codes are crucial to the success and sustainability of any integrated risk management program, their implementation often requires the presence of inter-disciplinary staff within the PIU, and cannot be adequately carried out in the absence of institutional co-ordination mechanisms across sectors (such as drainage, sanitation, water, urban planning, and educa-tion). Most importantly, there is often a disproportion between their cost and dimension, relative to those of physical investments. The design of non-structural measures should consider the practical implica-tions of institutional mandates; relative contribution to the PDO and allocation of funds between struc-tural and non-structural measures; and incentives for the satisfactory completion of non-structural measures. Options for incorporating non-structural measures more effectively into infrastructure projects could include incorporating these activities into the performance contracts of contractors, assigning re-sponsibility for non-structural measures to an agency with the appropriate mandate, ensuring that the process of definition and prioritization of non-structural measures in the planning phase is as technically robust as the engineering component, and strengthening inter-agency coordination mechanisms (with high-level involvement from Government institutions) within Project activities. 65. Approaches to providing cost contingencies should be tailored to specific economic and project contexts. Both delays in implementation and the economic environment in Argentina contribut-ed to the financing gap that hindered full achievement of the Project’s objectives. In addition to costs

23

not having been updated at Appraisal, the traditional approaches to cost and price contingencies failed to capture the reality of the Project’s pace and the prevailing economic conditions. To avoid financing gaps in similar situations, financial analysis that allows conservative assumptions on contingencies could be undertaken.

66. Restructuring should be proactively used during implementation to address weaknesses in the results framework, particularly addressing weak or poorly designed indicators. The implemen-tation of the Project’s non-structural measures was limited partially due to a low understanding of the expected outputs and associated indicators. The Project’s indicators should have been revised more meaningfully during implementation, as they concentrated on non-structural measures not prioritized within the original Loan allocation, were either overly complex or too vague, and were disconnected from the Project’s PDO, distorting the overall outcome rating.

67. Pre-emptive action should be taken by Project teams to identify potential for institutional friction between local and national government levels, which should be addressed prior to Ap-proval to minimize consequences on implementation. The delay required to obtain signature of the Guarantee Agreement by the National Government led to an 18-month effectiveness delay for this Pro-ject, which was a contributing factor to cost increases associated with inflation and exchange rate fluctu-ations during this time. To avoid such complications, a concrete recommendation for future projects in the country might be to host technical consultations between the National and City governments, possi-bly showcasing the Project’s results, so as to foster a working partnership between both parties. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies: NA

24

ANNEXES Annex 1. Project Costs and Financing (a) Project Cost by Component (in US$ million equivalent)

Components Appraisal Estimate (US$ million)

Actual /Latest Estimate (US$ million)

Percentage of Appraisal

Component 1: Risk Management Scheme 6.14 2.81

46%

Component 2: Development of Key Defense Facilities 121.80 131.17 108%

Component 3: Project Implemen-tation and Auditing 2.06 0.03 1%

Total Baseline Cost

Physical Contingencies 0

Price Contingencies 0

Total Project Costs 130.00 131.01 131.22

Project Preparation Facility (PPF)

Front-end fee (IBRD only)

Total Financing Required 130.30 131.01 101% (b) Financing

Source of Funds Type of Financing Appraisal Estimate

(US$ million)

Actual/Latest Esti-mate

(US$ million)

Percentage of Ap-praisal

Borrower (City of Buenos Aires)

59.00 59.00 100%

IBRD 130.00 134.0111 103%

11 The originally approved loan amount of €98.000.000 was equivalent to US$130.000.000 at the exchange rate prevailing at that time; due to variations in the exchange rate since approval, the approved amount currently stands at US$134.014.224 equivalent.

25

Annex 2. Outputs by Component ARGENTINA: URBAN FLOOD PREVENTION AND DRAINAGE PROJECT, APL 1 As of January 14, 2013 Component / Activity Status Borrower

financing (US$)

IBRD fi-nancing (US$)

TOTAL (US$)

Component 1: Risk Management Scheme Installation of a hydro-meteorological warning system

In progress A basic network of hydro-meteorological and hy-drometric stations was established during imple-mentation, and bidding documents are ready for the construction of a more sophisticated system (SIH-VIGILA), which has so far been bid out once but failed. The City of Buenos Aires has signalled its intent to finance the consultancy with own funds.

4,898,375 (planned)

0 4,898,375 (planned)

Development of vulner-ability and risk analysis tools

In progress The instruments developed under the Project in-clude the Hydraulic plan (PGRH), physical and mathematical models, an Agreement with La Plata National University, Master Plans for green areas and urban forestry, an environmental management plan for the operation phase of the tunnels, and solid waste management ToRs. The publication of an updated flood hazard map and the passing of a new building code are expected for 2013, once further inputs have been incorporated to the map. A draft law has been prepared to this effect, and the urban planning code is being discussed by the Ministry of Urban Development and several City agencies.

476,629 (actual) + 4,898,375 (planned, above)

2,812,380 (includes some activi-ties listed below)

8,289,101

Preparation and diffu-sion of contingency and emergency plans

Completed The City of Buenos Aires has a Master Plan for Metropolitan Civil Defense, dating from 1999, which was complemented in August 2009 by the elaboration of an Emergency Master Plan (Plan Di-rector de Emergencias), legislated by way of Decree 695. UPEAM considers that this plan has sufficient information and organization of technical, human and economic resources to serve as a Contingency Plan for the Project works, to be complemented by the risk maps currently pending publication.

NA 0 0

Solid waste manage-ment measures

Completed TORs have been finalized for strategic studies cov-ering prevention of entrance of solid waste into the drainage system, creation of incentives and mecha-nisms to extract waste obstructions rapidly from the sewer system, identification of critical build-up points, and prevention of the sub-optimal function-ing of the tunnels through periodic cleanings. No physical investments were outlined in the PAD.

NA 0 0

Studies to increase and improve green areas,

In progress A first draft of the green areas and urban forestry

101,716 1,932,617 2,034,334

26

and an urban forestry program

studies is available and being revised, with the PIU expecting to receive the remaining products in the coming months. The findings are being incorporated into the flood hazard map.

Hydrological, environ-mental, communication and education program

Not completed This activity was delayed due to misunderstandings as to its intended scope and late preparation of the bidding documents in the Project cycle, and the ed-ucation program was redesigned late in implementa-tion. In the meantime, an awareness center has been built, and videos on the hydraulic plan have been developed by the City, with 53,804 views so far. The City of Buenos Aires has reduced the scope of this program from a City-wide initiative to a pilot project focusing on the Maldonado Basin, and has been coordinating since 2011 with the Ministry of Education and the General Directorate for Educa-tional Planning to carry out basic activities with own fund.

NA 0 0

Studies for setting up an institutional framework for flood prevention, emergency situation, and infrastructure maintenance

Not completed The PIU has been working since late 2011 on the development of a cross-sectoral management system (Sistema de Gestión Sectorial), which would serve as a platform for the integration and harmonization of the City’s existing hydraulic works master-plan (PGRH) by laying out the responsibilities of differ-ent Agencies in implementing different aspects of the PGRH at a City-wide level, including civil de-fense, education, and hydro-meteorological moni-toring. This structure has not yet been created.

0 0 0

Component 2: Development of Key Defense Facilities Construction of two collection tunnels

Completed Construction of both tunnels (9,8km and 4,6 km length respectively) has been finalized and both are in operation, with performance tests completed. The completed works were handed over to the General Directorate for the rainfall network (Dirección Gen-eral de Red Pluvial) within the Ministry of Envi-ronment and Public Spaces, along with the ausculta-tion system linked to the hydro-meteorological monitoring network to ensure adequate operation.

72,126,390 119,875,182 192,001,572

Construction of 46 km of additional secondary connections

In progress Overall 15% of the anticipated distribution network was completed at the time of the ICR. Works for two of six groups of secondary drainage networks (groups A and B) are under through construction, with 80% physical progress on Group A and 7% progress on Group B. These two groups accounting for 1/3 of the network are expected to be completed in the next 14 months.. The supervision of these works will be carried out by the Ministry of Urban Development. The Bank and the City have agreed on the importance of continuing with the construc-

26,594,549 0 26,594,549

27

tion of all planned secondary network groups (C,D,E,F), but possible funding alternatives have not yet been identified.

Detailed project feasi-bility studies for the other water basins of the City

In progress Studies have been contracted and are underway for identifying executive flood prevention projects in other Basins, funded from the City’s budget, and four of the expected products have been completed to date, representing 20% of total agreed outputs. This study will cumulate in the delivery of execu-tive projects for each of the City’s other basins.

2,833,142 0 2,833,142

Additional feasibility studies12

Complete

1,849,023 7,963,300 9,812,324

Component 3: Project Implementation and Auditing Audits Complete 20,000 62,500 82,500 Institutional strengthen-ing

Complete 0 468,000 468,000

12 Such as modelling of the inlet structures connecting the tunnel to the Maldonado culvert, contracting of a specialized team to supervise tunnel construction, and appointment of a Technical Panel of Independent Advisors.

28

Annex 3. Economic and Financial Analysis (including assumptions in the analysis)

1. Overview: A detailed economic analysis was completed at appraisal and thoroughly updated in 2007. The 2007 analysis included a survey of houses, detailed item by item cost estimates for damaged property and was supported by a hydrologic model and cadastral information for the area. This analysis indicated the project would have an NPV was US$48 million with an internal rate of return of 18.7%. 2. For the ICR, the 2007 analysis was updated using December 2012 reference prices and exchange rates and taking into account the actual costs of the works as completed and resulting lower impact of the works when compared to the design. The approach is summarized below and the details of the 2007 study can be found in the project files. 3. Costs: The costs of the works completed under the project (the two tunnels and a portion of the distribution network) were based on the actual disbursements schedule for the works taking into account the counterpart funds and subtracting the taxes levied on the works. 4. Benefits (Avoided costs): The analysis estimated the avoided damage costs to housing units in the project area using historical data for flood return periods. In particular the damage costs developed unit prices for damages considered the types of both single family homes and multifamily homes and characterized them by type, area, characteristics of the floors-especially bottom floor, type of appliances and furniture. The analysis costed the expected damage to the buildings and their contents using pre-vailing prices in 2007 which were adjusted using reference prices for 2012. A similar analysis was done for commercial and industrial buildings.

5. The structures and contents affected were calculated using information on the inundated area and level of water under flood recurrence periods of 2, 5, 10, 20, 50 and 100 years based on a hydrodynamic model and cadastral data. This was calculated for the case with and without the project as designed, with the avoided damage being the difference. To account for the fact that under the final project, many of the distribution networks were not completed and there were areas observed with some flooding during the events of 2012, it was conservatively assumed that the avoided damage was 1/3 less than the original design. The avoided costs annually were then calculated over a period of 50 years by combining this damage with the unit costs of the structures affected.

6. Operation, maintenance and reinvestment: The operation, maintenance and reinvestment costs were based on the estimates made in 2007 updated to 2012 prices and exchange rates.

7. Results: The results showed that the project as constructed had an NPV was US$16.7 million with an IRR of 14%

29

Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/ Specialty

Lending

Ventura Bengoechea Maria Marcela Silva Gerard Liautaud Zeinab Partow Mila Freire Jose Barber Andre's Mac Gaul Paul Sisk Reynaldo Pastor Rodrigo Archondo-Callao Marco Zambrano Melanie Glass Joseph Fomoso Vivien Foster James Parks Jose Luis Irigoyen Juan Gaviria Juan Sanguinetti Herber Farrer Ann Mitchell Dieter Schelling Miriam Allen Silvia Delgado

Senior Water Specialist Transport Specialist Senior Highway Engineer Consultant Country Economist Regional Adviser, Urban Housing Sr. Transport Specialist Procurement Specialist Financial Management Specialist Sr. Counsel Technical Specialist Environmental Consultant Junior Professional Associate Sr. Finance Officer Sr. Economist Lead Economist Sector Manager Sector Leader Fiscal Consultant Water and Sanitation Consultant Poverty Consultant Lead Transport Specialist Program Assistant Program Assistant

LCSFW LCSFT LCSFT LCSPE LCSFP LCSFT LCOPR LCOAA LEGLA TUDTR LCSFT LCSFT LOAGl LCSFP LCC7A LCSFT LCSFP AFTTR LCSFT LCSFW

TTL Co-TTL Procurement Specialist Financial Management Specialist

Supervision

Maryse D. Gautier Alcira I. Kreimer Juan D. Quintero Luz Maria Gonzalez Juan Carlos Linares Nicola Ruggero Saporiti Carolina Marcela Piedrafita Miguel Vargas-Ramirez Andres Mac Gaul Manuel G. Marino Gustavo Saltiel David N. Sislen Alejandro Roger Solanot Francis Ghesquiere Augustin Maria Ignacio M. Urrutia Duarte Daniel Chalupowicz Marcelo Hector Acerbi Maria Lucy Giraldo Senior

Manager, Portfolio and Operations Consultant Consultant Consultant Consultant Senior Investment Officer E T Consultant Sr Water & Sanitation Spec. Sr Procurement Spec. Lead Water and Sanitation Spec. Program Manager Sector Leader Sr Financial Management Spec. Manager Urban Specialist Junior Professional Associate Financial Management Specialist Senior Environmental Specialist Senior Procurement Specialist Senior Urban Environment Spec.

LCSUW Consultant Consultant Consultant Consultant LCSPT LCSFM LCSUW LCSUW LCSFM LCSPT

TTL Procurement Spec. TTL Financial Management Spec. Financial Management Specialist Environmental Specialist Procurement Specialist

30

(b) Staff Time and Cost (from SAP)

Stage of Project Cycle Staff Time and Cost (Bank Budget Only)

No. of Staff Weeks US$ Thousands (including travel and consultant costs)

Lending FY4 0.83 16,651.03

TOTAL: 0.83 16,651.03 Supervision/ICR

FY5 28.52 307,484.08 FY6 13.15 65,591.92 FY7 24.4 75,897.94 FY8 8.3 50,876.98 FY9 17.09 82,751.36

FY10 25.89 82,298.63 FY11 15.36 57,429.45 FY12 16.21 102,418.33 FY13 13.14 67,143.06

TOTAL 162.06 891,891.75

John Morton Patricia Lopez Martinez Sergio Mora Castro Ricardo Eduardo Lugea Maria Catalina Ramirez

Senior Infrastructure Finance Spec. E T Consultant Senior Procurement Specialist E T Consultant

LCSUW LCSUW LCSPT

TTL TTL Procurement Specialist

31

Annex 5. Beneficiary Survey Results

1. The Government of the City of Buenos Aires through the Implementing Agency (UPEAM) hired an independent consulting firm to develop the Project’s end project survey (Informe evaluacion de re-sultados e impacto social Maldonado 2012), concluded in May 2012. The aim of this report was to up-date and deepen the analysis carried out in 2004 during the Project’s initial phases (“Evaluación del Im-pacto social del Plan Director de Ordenamiento Hidráulico y Proyecto Ejecutivo para la Cuenca del Ar-royo Maldonado 2004”), which determined the possible social impacts of the APL1 Project based on the 2003 household survey for the City of Buenos Aires and on interviews and focal group discussions held with beneficiaries and civil society organizations. The 2012 report seeks to analyze the works’ results on the inhabitants of the Maldonado basin, considered the Project’s direct beneficiary population, and iden-tify the positive and negative impacts of the Projects based on beneficiary perception. The methodology used to conduct this analysis consisted of the 2011 household survey for the City of Buenos Aires and a telephone survey by which a semi-structured questionnaire was administered in May 2012 to a probabil-istic and representative sample of households, 200 of which are located in the critical area within the Maldonando Basin, 200 of which are located in the rest of the Maldonado Basin, and 200 of which con-stitute a control group and are located in the Vega Basin. 2. Chapter 1 of the report provides a brief explanation of the flooding phenomenon in Buenos Aires and of its principal causes and consequences. It also summarizes the history of flood risk in the City of Buenos Aires and the context leading to the creation of the Hydraulic Plan (Plan Integral Hidráulico or Plan de Gestión Integral del Riesgo Hídrico, PGIRH). This Plan had the objective of managing the City’s infrastructure in such a way as to make the City resistant to 10-year flood events, reducing the probability of flooding from 50% to 10%. The first integral hydraulic study of the City of Buenos Aires was begun in 2001 and its recommendations included the construction of two tunnels in the Maldonado basin. The report mentions that in 2012, the total number of inhabitants of the critical zone within the Maldonado Basin was 342,968 people, equivalent to 11% of the City, which can be considered the Project’s direct beneficiaries. 3. Chapter 2 of the report provides the socio-demographic profile of the Project’s direct beneficiaries, based on the 2011 household survey data. It identifies the vulnerable population in the Project’s intervention area based on a selection of indicators including insertion in the labor force, access to healthcare, gender of head-of-household, presence of old people or infants, and dependence on public assistance programs, among other house-hold characteristics. This section concludes that the rate of vulnerability in the Maldonado Basin has dropped by 8 percentage points between 2003 and 2011 (equivalent to 20,000 fewer vulnerable households), and the vulnerabil-ity index within the Maldonado basin in 2012 did not differ significantly from that of the wider City of Buenos Aires. Even when taking this improvement into account, however, 590,897 inhabitants of the Maldonado basin currently live in vulnerable households, of which 200,557 belong to in the basin’s critical flood area. The total proportion of vulnerable households in the Maldonado Basin is 52%, with notable differences between house-holds to the East of Avenida Córdoba (37.8% vulnerable households) and those to the West of it (60% vulnerable households). 4. Chapter 3 of the report carries out a social evaluation of the Project, based on beneficiary perceptions, obtained via a telephone survey with a 600-person sample. The aspects considered by this survey included (i) so-cial perception of the flooding phenomenon in Buenos Aires, particularly in zones where the beneficiaries live; (ii) consequences of flooding on the sample; (iii) preventive behavior within the population when faced by storm risks; and (iv) knowledge and perception of the Maldonado works.

5. With respect to the social perception of flooding, the study finds that flooding does not rank highly on the list of problems that inhabitants perceive within the City (it is in fourth place after security, cleanliness of the

32

City, and traffic). Regarding the population’s awareness of flooding, only 60% of the sampled inhabitants living within the Maldonado Basin are aware of living in a flood zone, and 70% of home owners did not know that this was a floodable area when they purchased their homes. Of those aware of living in a flood zone, only 22% of re-spondents attribute flooding to being located inside a watershed (this percentage is 27% in the most frequently flooded area of the Basin and 30% amongst those having already being affected by floods). Other causes cited include lack of maintenance of drainage system (35%), clotted sink holes (21%), and geographical location (22%). In terms of flood preparedness, the responses are equally weak, with only 45% of households within the Maldonado Basin and the most critical area taking preventive measures when a storm approaches. Only half of the sample recalls having heard about such prevention measures, and just 60% was informed through communica-tions carried out by the City Government. In total, this means that only about one-third of the population in the Maldonado Basin was informed of flood prevention measures by the City Government. On the other hand, the study finds some evidence of a greater increase in the adoption of prevention measures during the Project’s life-time in the Maldonado Basin than in the Vega basin. 6. The survey also qualitatively assessed the impact of Project activities on frequency and intensity of flood events. Based on questions asking inhabitants to recall flood events having occurred in the three years prior to the 2012 floods, and material losses incurred during the 2012 floods, the survey finds that in the Maldonado basin the percentage of households exposed to water entry into the house due to flooding decreased by 5.8 percentage points in the affected population in 2012 compared to previous years (from 26.5% to 20.7%). By contrast in the Vega Basin, the percentage of inhabitants reporting entry of water into their households in 2012 was higher than in previous floods (a 6.6 percentage point increase in the affected population, from 21.2% to 27.8%). This pattern is also reflected in questions inquiring about material losses resulting from flooding, which affected 11% fewer households in the Maldonado basin in 2012 (45.095 affected households) than in previous years (58,811 affected households). Finally, 84% of the sample living in the Maldonado Basin state that they have suffered worse floods than those of 2012 in the past. This proportion was higher within the Basin’s critical area (90.1%) and lower in the Vega Basin (78%). The report thereby infers that the works have had a positive impact in the intervention ar-ea, both in terms of frequency and impact of flood events in the last years. 7. The final section of Chapter 3 report considers the awareness of Project activities amongst the beneficiary populations, and finds positive results both in terms of awareness and acceptability. According to the survey, 68% of the population living in the Maldonado Basin is aware of improvements being carried out on the drainage sys-tem, 85% is aware of the Arroyo Maldonado hydraulic Works, 82% believes that the investment is justified, and the level of satisfaction with the hydraulic works is 71%. However, the population’s perception of the works’ ex-pected impact is not always realistic. The report therefore recommends that the City of Buenos Aires adopt a communications strategy that explains to the population the real scope of the works and their expected impact.

8. Chapter 4 of the report consists of an analysis of the sample’s use of different communication media, and finds the Internet to be the leading source of information. Access to computers is only slightly greater among youth than in other age categories, and more than 65% of the Basin’s population uses computers daily. Use of email and SMS is also stronger amongst youth but would still reach at least 50% of the population over 60. How-ever, use of social media is not prevalent at all amongst the sample’s older age categories.

33

Annex 6. Summary of Borrower’s ICR and/or Comments on Draft ICR 1. This is a summary of the Closing Report on the Urban Flood Prevention and Drainage APL1 project (Loan 7289-AR). The Closing Report consists of an explanation of the existing organizational structure for the execution of the hydraulic plan (PGRH), a chronological account of the Project’s implementation history and a summary of the status of the Project’s different activities in February 2013. 2. Early organizational structure for execution of the Hydraulic Plan (Programa de Gestión del Riesgo Hídrico, PGRH). The hydraulic plan for the City of Buenos Aires is the City’s first integrated planning document for hydraulic issues. It guides the Government’s strategic vision in order to improve the level of protection of the City’s inhabitants and mitigate the negative impacts of flooding. The underlying study was adjudicated in the con-text of the World Bank loan 4117 (P006052) through an international bidding process to a consortium consisting of three consulting firms from England, the United States and Argentina, which elaborated the plan over a period of 5 years beginning in March 2001. The PGRH was developed on the basis of this study and approved by Law 1660, as part of the World Bank Loan 7289-AR. It includes the design of structural and non-structural measures for all of the City’s basins including the executive works projects for the Maldonado Basin. The first executing agency for the PGRH implementation was the Ministry of Planning through its General Directorate of Relations with the World Bank (DGRBM), which included a specialized technical unit dedicated to the implementation of the APL1 project (Subunidad de Coordinacion para la Emergencia, SUPCE). The unit’s team consisted of spe-cialists in hydraulic, civil, agronomic, and system engineering, as well as geologists, ecologists, sociologists, economists, lawyers, environmental and procurement specialists, and administrative staff, all contracted by the Government of the City of Buenos Aires. SUPCE contracted a supervision firm for the duration of the Project works, given their technical complexity. The bidding documents and bidding process for the works was carried out by a Mixed Specialized Commission between the Ministry of Planning and the Ministry of Public Works, led by the General Hydraulic Director and the Technical Coordinator of SUPCE. These entities also participated in supervision and coordination of the Project’s non-structural measures in several parts of the city. These responsi-bilities were transferred from the Subunit for Coordination for Emergencies directly to DGRBM in December 2007 through Decree 2075/07.

3. Implementation and institutional reorganization. With the objective of enhancing the efficiency of the PGRH, enabling the use of its resources, and allowing necessary control and monitoring, the competencies as-signed to the Ministry of Planning were modified in 2010. Decree 609/10 created a Project Implementation Unit (Unidad de Proyecto Especial del Arroyo Maldonado, UPEAM) housed within the Ministry of Urban Develop-ment, to which the staff and budget of the SUPCE-DGRBM were transferred. The SUPCE was dismantled but the initial staff was maintained throughout implementation with very little rotation, and consisted of four civil engi-neers, a hydraulic engineer, an electromechanical engineer, an architect, two lawyers, an economist, a planning and landscaping student, two secretaries, and outside collaborating professionals from various areas of the City Government. The UPEAM finalized the construction works for both main tunnels and is currently carrying out the execution of the secondary drainage networks. Progress is also being made in terms of the Project’s non-structural measures, as described below. Both the SUPCE and the UPEAM carried out all functions described in the Pro-ject’s Operating Manual, including by serving as a permanent link between the Bank and the City of Buenos Aires on all matters related to the Project, and general procurement, implementation, supervision, monitoring and re-porting responsibilities. Some services, goods and operational costs of these units were financed by the Bank, as was its audit processes and the hiring of several individual consultants. 4. Structural measures: main tunnels. Construction is complete for the two tunnels in the Maldonado Ba-sin (of 9.8km and 4.6km length respectively and 6.9m internal diameter). The execution period was of 52 months, which coincides almost perfectly with the planned execution timeframe when taking into account various delays occasioned by climatic conditions, a judicial hurdle in 2009, various changes in the programming of complemen-tary works, the resolution of interferences with water and sewer works in the Basin, and the obtaining of various licensing amongst other contracting adjustments. Due to their complexity, the modeling of these works was car-

34

ried out with the assistance of the Hydraulic Laboratory of the National University of La Plata (UNLP); some of this modeling was done prior to or during the bidding process for the main works, in order to better inform their design, with geotechnical information going up to a 40m depth. The design change later proposed by the contrac-tor – consisting of a single shaft at Punta Carrasco – was analyzed and documented by UPEAM in light of this modeling and in terms of its structural, geological, geotechnical, environmental, planning, economic and technical merits. The technical advantages of the design change were determined with absolute clarity, and the design change additionally had benefits in terms of geology of the location and lower risks (construction, environmental and logistical), which significantly reduced the possibility of eventual delays during implementation. The shaft at Punta Carrasco was the first work in the Republic of Argentina to use this particular technology (hidrofresa). Construction took place until a depth of 54m, with tests carried out to ensure that there would be no contamina-tion of the surrounding Puelche aquifer. The design change did not affect the functioning of the works, and hy-draulic studies show that the evacuation capacity of the shaft is the same as in the original design, with the princi-pal change being that siphoning of the aquifer is avoided. This change also allowed works to begin on the short tunnel before the long one, thus gaining 90 days on the expected Project timeframe. 85% of inhabitants inter-viewed had a positive opinion of the works. 5. Structural measures: secondary drainage networks. In order to complete the drainage system in the Basin, it is necessary to complete the construction of the secondary drainage networks connected to these tunnels, which would triple the total capacity of the drainage system in the Project area. At the time of the ICR 15% of the distribution works were completed. The execution of two network groups (groups A and B) is currently underway and construction is expected to finish in February 2013 for Group A and during the next 14 months for Group B (which will include an open-air section between Avenida Juan B. Justo and Avenida Raúl Scalabrini Ortiz, with the rest of works occurring below ground).

6. Structural measures: observed impact. The lack of accumulation of water in historically floodable are-as was verified, for example at the intersection of the Juan B. Justo and Santa Fe (Pacifico) Avenues. Overall, the system triples the drainage capacity of the Basin in line with the expected design parameters. Certain streets demonstrated high water levels and no secondary drainage networks are contemplated there, however, and special efforts will need to be taken to improve their superficial capacity.

7. Executive projects in other basins of the City. A consortium of consultants was contracted to elaborate executive projects in pluvial drainage systems in several basins of the City (Boca – Barracas, Elía - Ochoa, Erézcano, Cildañez y Larrazábal – Escalada), including the hydrological and hydrodynamic study and a map of flood risk for the Riachuelo area, as receptor of the resulting drainage. Six bids were received on June 24 2009, and the process was adjudicated following a rigorous evaluation to the SERMAN-GRIMAUX-ATEC-DHI con-sortium, for which contract signature took place on August 25 2011. The contract has a total value of 200,984 Eu-ros and an implementation period of 14 months, and is currently being financed by City of Buenos Aires funds with 20% progress to date in terms of products presented, approved and paid, and additional products being re-vised by UPEAM or currently being presented by the consortium.

8. Non-structural measures. The non-structural measures contemplated under the Project include the fol-lowing: (i) monitoring network and early warning system, (ii) risk management and contingency plan, (iii) urban planning norms and building codes, (iv) solid waste management, (v) green spaces and trees, (vi) hydro-environmental communication and education campaign, and (vii) institutional strengthening. The status of each of these measures as of February 2013 is as follows:

(a) Monitoring network and early warning system: bidding documents were prepared in May 2008 and final-ized by end of 2009; improvements were made to the terms of reference by UPEAM until November 2011 to incorporate technological improvements; the call for bids took place in May 2012 but no bids were received. The City of Buenos Aires hopes to re-bid the process in the coming months.

(b) Risk management and contingency plan: The City of Buenos Aires has a Master Plan for Metropolitan Civil Defense, dating from 1999, which was complemented in August 2009 by the elaboration of an

35

Emergency Master Plan (Plan Director de Emergencias), legislated by way of Decree 695. UPEAM con-siders that this plan has sufficient information and organization of technical, human and economic re-sources to serve as a Contingency Plan for the Project works. These will be complemented by the risk maps currently pending publication.

(c) Urban planning norms and building codes: The flood risk maps developed in 2005 by a consultancy fi-nanced by the Project have undergone several rounds of revisions to incorporate the results of the green spaces study, the impact of the physical works undertaken since then, and further technological improve-ments using the Mike Urban hydraulic modeling software. One maps of the entire City will have been up-dated, the maps will be officially published (estimated for December 2013) and the process of modifying urban planning norms and building codes will begin. A draft law has been prepared to this effect, and the urban planning code is being discussed by the Ministry of Urban Development and several other City agencies.

(d) Solid waste management: Terms of reference have been established to propose an integrated management of the City’s solid waste, which would allow the City of Buenos Aires to reduce its waste production by 75% by 2017. UPEAM also contracted the carrying out of an environmental impact study for the opera-tion phase of the Maldonado drainage tunnels and secondary networks, which includes measures for man-agement of solid waste within the drainage system. This plan will be implemented by the Pluvial System Directorate, which will be responsible for general maintenance of the works. The City of Buenos Aires has also reached an agreement with the Province of Buenos Aires regarding a plan to reduce by 78% the 6,000 tons of waste sent daily by the City to the José León Suárez landfill, which is expected to be achieved through a system of intermediary targets until June 2014.

(e) Green spaces and trees: The corresponding consultancy was adjudicated to the CONCOL-IATASA con-sortium and the majority of expected products have been finalized. These products include new altimetric and soil composition data, which are important inputs for the hydraulic computational model. The City of Buenos Aires hopes to receive the pending products from the consortium over the coming months.

(f) Hydro-environmental communication and education campaign: A first attempt at contracting this work was carried out between 2005 and 2006, but was interrupted by a change in focus of the campaign associ-ated with institutional changes in the Ministry of Environment at this time. The project was re-launched and its objectives re-defined in 2008, and several rounds of discussion took place with the Bank regarding the desired content until an agreement was reached in 2011. By this time, however, the contemplated ac-tivities could no longer be implemented as the necessary funds had been consumed by the structural measures. The City of Buenos Aires decided to reduce the scope of this program from a City-wide initia-tive to a pilot project focusing on the Maldonado Basin, and has been coordinating since 2011 with the Ministry of Education and the General Directorate for Educational Planning to carry out basic activities with own funds. Educational materials have been elaborated to this effect and will be submitted to the General Directorate for Educational Planning shortly.

(g) Institutional strengthening: UPEAM as the Project’s PIU has developed solid technical knowledge of the field and as part of the Ministry of Urban Development’s General Directorate for Infrastructure, it will be able to continue the implementation of the City’s integrated hydraulic plan. UPEAM staff also attended a number of workshops and capacity building activities as part of the Project’s Component 3, which also fi-nanced the financial and procurement audits for 2009, 2010 and 2011 and the contracting of individual consultants to strengthen the PIU.

36

Annex 7. List of Supporting Documents

1. Project Concept Note, February 2004 2. Project Appraisal Document, March 2005 3. Project Information Document, February 2005 4. Environmental Assessment, February 2005 5. Loan Agreement L7289-AR, May 2006 6. Guarantee Agreement L7289, May 2006 7. Restructuring Paper, December 2010 8. Restructuring Paper, June 2012 9. First Amendment to Loan Agreement L7289, December 2010 10. Second Amendment to Loan Agreement L7289, June 2012 11. Update of economic analysis, November 2007. 12. ICR of Borrower, February 2013. 13. Informe evaluación de resultados e impacto social Maldonado, June 2012 14. Diagnóstico del Riesgo de Inundación, January 2005 15. Aide Memoires Aide Memoire – March 2004 Aide Memoire – August 2004 Aide Memoire – November 2004 Aide Memoire – October 2005 Aide Memoire – May 2006 Aide Memoire – October 2006 Aide Memoire – August 2007 Aide Memoire – October 2008 Aide Memoire – March 2009 Aide Memoire – April 2010 Aide Memoire – November 2011 Aide Memoire – December 2011 Aide Memoire – April 2012 16. ISRs Implementation Status Report 1 – April 2005 Implementation Status Report 2 – May 2005 Implementation Status Report 3 – June 2006 Implementation Status Report 4 – June 2006 Implementation Status Report 5 – October 2006 Implementation Status Report 6 – April 2007 Implementation Status Report 7 – September 2007 Implementation Status Report 8 – April 2008 Implementation Status Report 9 – October 2008 Implementation Status Report 10 – May 2009 Implementation Status Report 11 – December 2009 Implementation Status Report 12 – May 2010 Implementation Status Report 13 – February 2011 Implementation Status Report 14 – December 2011 Implementation Status Report 15 – April 2012

37

Annex 8. Environmental and Social Safeguards Annex 1. Environmental Management Plan Implementation. The project implemented a robust EMP which was based on a series of procedures set out in the Environmental Management Plan of the work proposed by the Con-tractor and approved by the inspection based on the Technical Specifications and the previous environmental studies of the project. The EMP implementation followed a methodology recommended for an area where the construction phase was planned to happen in sector with a very high preexisting human intervention and dense land uses. The EMP implementation has generated useful information for future endeavors of this nature. 2. The contractor’s EMP was comprised by twenty programs covering monitoring, waste management, safe-ty and health, dredging management, transit, environmental monitoring, etc. The main components of the EMP were those related to the mitigation of the two most significant negative impacts according to the type of work: generation of a large amount of excavated material and physical intervention by the passage of a tunnel in an ar-ea of aquifers. The potential effects of tunneling has been estimated by a comprehensive monitoring sys-tem validated by experts, which so far has concluded in the absence of contaminated soil to the depth of excavation. In terms of water quality, data collected as part of the monitoring has confirmed no direct impacts on the Puelche and Pampeano aquifers. In addition, the EMP focused attention on compliance with all local and national environmental standards. The EMP suggests that the works have been fin-ished with a net positive balance with respect to social and community benefits, without unexpected af-fectation in physical environment. 3. Both the Bank and the contractor in charge of the project’s environmental supervision have agreed that the monitoring of potential effects on aquifers could be enhanced during the operation phase of the tunnel. Agreements include the following (i) repeat monitoring activities on the aquifers during the first operation year of the project, (ii) monitor the quality of the flowing in the system, (iii) monitor the water quality of the Arroyo Maldonado, (iv) set up a clean-up frequency for the tunnel, (v) supervise the structure of the tunnels to detect cracks, leaks, etc. and to ensure the “tightness” (estanqueidad) in its operation, (vi) analyze sediment deposits, and (vi) identify and repair eventual pollution points. In addi-tion, they would protect monitoring wells from vandalism and deterioration, and to strengthen their pro-tections against infiltration by surface runoff into the wells. It would be advisable for the operational stage to include the identification of sites within the watershed but outside the area of direct impact. Fi-nally, they would implement a Quality Assurance / Quality Control program linked to sampling and ana-lytical activities given the size of the project and the complexity of the sampling efforts. 4. Changes in design during implementation and environmental implications. During implementa-tion the City proposed a change in the Project design which was assessed under Bank environmental standards. The change in the technical design consists in several modifications of the access shaft locat-ed in Punta Carrasco near the opening of the current Maldonado channel on the Rio de la Plata. During construction, the access shaft is to be used to assemble the tunneling machines and start the excavation of the tunnels. During exploitation, the shaft will function as a reception and evacuation chamber for the flows coming from the two tunnels. The proposed change would (i) bring a reduction in the environmen-tal risks associated to the access shaft both during construction and operation, (ii) reduce the engineering risks linked to the shaft excavation, (iii) facilitate the assembling of the tunneling machines and reduce the project execution time frame, and (iv) improve the overall functioning of the Tunnels during opera-tion. The assessment of this change has involved a panel of experts according to the Category A given to this Project.

38

5. Operations & maintenance phase. By closure, the project has submitted draft TOR to prepare an EMP for the operational phase. They would: (i) develop a plan to operate and maintain the tunnel including environmental aspects such as clean-up implications and monitoring, (ii) include the operational implications of the legal framework, (iii) define a clear scope of the environmental monitoring related to the accumulation of waste and sediments in the tunnels, (iv) include a robust institutional coordination program (including institutional strength-ening) to ensure a realistic cooperation between different sectors in the city, and in particular with those agencies related to urban solid waste management. This is one on the main challenges to the system during the operational phase. 6. Social. Social issues related to the project during implementation were mainly focused in its impact and perception. A specific report was requested by the PIU to assess the social impact. The reports concluded that (i) works carried out in the Maldonado creek have begun to generate some effect requiring concrete impact mitiga-tion within the area of influence, (ii) the invisibility of the floods problem is a limitation to the execution of a ded-icated program for flood risk prevention, and (iii) most of the population is not aware of the status of implementa-tion of works and tends to over-dimension the results. The study recommended strengthening communication efforts around the Project to improve the existing knowledge around it and to optimize its immediate and long term impacts.

7. Communications. The Project has benefited from a communication campaign during the imple-mentation of the work which has been useful to disseminate information about the project description, its impact, the implementation progress and to collect questions and complaints. The campaign was mainly based on a website which is still operational (http://www.buenosaires.gob.ar/maldonado/) and has also used other social media tools and hosted specific dissemination events. Disclosure of safeguards documents has been limited to those prepared at Appraisal. However, access to specific information has been provided by the PIU and the Bank’s team in response to requests. The Bank team has recommend-ed the City of Buenos Aires to disclose the information from the environmental monitoring in order to demonstrate the project’s physical impact. Disclosure by the city has focused mainly in the progress of the physical works for the tunnel.

8. Complaints. The Asociación Vecinal Lago Pacifico (AVLP) has raised concerns about the Pro-ject since its inception and during implementation, proposing an alternative which was analyzed by the City and its technical advisors during project preparation. The AVLP includes residents of the Palermo area (relatively affluent neighborhood within the Maldonado basin) and supports the project of rehabili-tating an abandoned industrial complex as a recreational park, including a lake to be used as a retention basin during floods. During project implementation, the City and the Bank team have continued to hold regular exchanges with AVLP to provide information and clarifications.

9. Environmental sustainability. Non-structural measures included under Component 2 will bring benefits in terms of sustainability in the City of Buenos Aires. The instruments developed under the Pro-ject include the Hydraulic plan (PGRH), physical and mathematical models, Master Plans for green are-as and urban forestry, an environmental management plan for the operation phase of the tunnels, and Terms of Reference for a study on measures to mitigate the impact of solid waste on the City’s drainage.

39

Annex 9. Simulations of flooded area for 10-year flood event in the Maldonado Basin

40

MAP SECTION

M E D R A N O

R A D I OA N T I G U O

EREZCANO

C I L D A Ñ E Z

OCHOAELIA

PUERTOS

B O C A -B A R R A C A S

REFERENCIAS

M A L D O N A D O

R í od e

l aP l a t a

Riac

huelo

34°40'

34°40'

58°30' 58°20'

58°30' 58°20'This map was produced by the Map Design Unit of The World Bank.The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

0 1 2

0 1 2 3 Miles

3 Kilometers

ARGENTINA

URBAN FLOOD PREVENTION AND DRAINAGE APL1

PROJECT:

SHORT TUNNEL

LONG TUNNEL

PATH OF THE EXISTINGMADLONADO RIVER

EXISTING DEVIATION TOTHE CILDANEZ CANAL

WATERSHED BOUNDARIES

MAIN ROADS

CAPITAL FEDERAL AREA

IBRD 33860

MARCH 2005

Area ofMain Map

BUENOS AIRES

ENTRE RIOS

U R U G U A Y

R i o d e l aP l a t a

Rio Parana

58°30'59°00' 58°00'

35°00'

34°30'

35°00'

34°30'

57°30'

58°30'59°00' 58°00' 57°30'

PA

CIF

ICO

CE

AN

A T L A N T I C

O C E A N

FALKLAND ISLANDS(MALVINAS)

A DISPUTE CONCERNING SOVEREIGNTY OVER THE ISLANDS EXISTS BETWEEN ARGENTINA WHICH CLAIMS THIS SOVEREIGNTY AND THE U.K. WHICH ADMINISTERS THE ISLANDS.

C

H

I L

E

BOL IV IA

PARAGUAY

URUGUAY

BRAZIL

30°

70°

40°

50°

30°

40°

50°

70° 60°

Buenos Aires

ARGENTINA