Completion Report

Project Number: 31197-01 Loan Number: 1742(SF) December 2010

Kyrgyz Republic: Community-Based Infrastructure Services Sector Project

CURRENCY EQUIVALENTS

Currency Unit – som (Som)

At Appraisal At Project Completion 30 April 2000 30 April 2010

Som1.00 = $0.021 $0.023 $1.00 = Som48.0 Som42.58

ABBREVIATIONS

ADB – Asian Development Bank CBO – community-based organization CDWUU – community drinking water users’ union EIRR – economic internal rate of return MAWRPI – Ministry of Agriculture, Water Resources, and

Processing Industry NGO – nongovernment organization NWSSC – National Water Supply and Sanitation Committee O&M – operation and maintenance PIU – project implementation unit PMU – project management unit RWSS – regional water supply system SDR – special drawing rights TA – technical assistance WUC – water user committee

GLOSSARY

oblast – province rayon – district vodokanal – urban water supply and sewerage agency

NOTES

In this report, "$" refers to US dollars.

Vice-President X. Zhao, Operations 1 Director General J. Miranda, Central and West Asia Department (CWRD) Country Director R. Hiraoka, Kyrgyz Resident Mission, CWRD Sector Director R. Subramaniam, Urban Services, CWRD

Team leader B. Alimov, Senior Portfolio Management Specialist, CWRD Team members C. Mambetova, Project Implementation Officer, CWRD B. Omurzakova, Assistant Project Analyst, CWRD

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

Page

BASIC DATA ii

MAP vi

I. PROJECT DESCRIPTION 1

II. EVALUATION OF DESIGN AND IMPLEMENTATION 2 A. Relevance of Design and Formulation 2 B. Project Outputs 4 C. Project Costs 8 D. Disbursements 8 E. Project Schedule 8 F. Implementation Arrangements 9 G. Conditions and Covenants 10 H. Related Technical Assistance 10 I. Consultant Recruitment and Procurement 11 J. Performance of Consultants, Contractors, and Suppliers 11 K. Performance of the Borrower and the Executing Agency 12 L. Performance of the Asian Development Bank 12

III. EVALUATION OF PERFORMANCE 13 A. Relevance 13 B. Effectiveness in Achieving Outcome 13 C. Efficiency in Achieving Outcome and Outputs 13 D. Preliminary Assessment of Sustainability 14 E. Impact 14

IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 15 A. Overall Assessment 15 B. Lessons 15 C. Recommendations 16

APPENDIXES

1. Project Framework and Physical Accomplishments 17 2. Geographic Distribution of Water Supply Systems 20 3. Remaining Problematic Subprojects 21 4. Summary of Project Costs 23 5. Utilization of Loan Proceeds 25 6. Project Implementation Schedule 26 7. Organizational Structure for Project implementation 30 8. Status of Compliance with Loan Covenants 31 9. Economic Evaluation 38

BASIC DATA A. Loan Identification 1. Country 2. Loan Number 3. Project Title 4. Borrower 5. Executing Agency 6. Amount of Loan - Original - Net Loan Amount 7. Project Completion Report Number

The Kyrgyz Republic 1742-KGZ(SF) Community-Based Infrastructure Services Sector Project The Kyrgyz Republic Ministry of Agriculture, Water Resources, and Processing Industry SDR27,289,000 SDR26,932,744 PCR:KGZ 1207

B. Loan Data 1. Appraisal – Date Started – Date Completed 2. Loan Negotiations – Date Started – Date Completed 3. Date of Board Approval 4. Date of Loan Agreement 5. Date of Loan Effectiveness – In Loan Agreement – Actual – Number of Extensions 6. Closing Date – In Loan Agreement – Actual – Number of Extensions 7. Terms of Loan – Interest Rate – Maturity – Grace Period

2 February 2000 16 February 2000 3 May 2000 23 May 2000 8 June 2000 1 September 2000 29 November 2000 28 November 2000 None 31 December 2006 27 January 2010 2 1% per year during the grace period and 1.5% per year during the remaining period 32 years 8 years

8. Disbursements a. Dates Initial Disbursement

20 December 2000

Final Disbursement 27 January 2010

Time Interval 121 month

Effective Date

28 November 2000 Original Closing Date

31 December 2006 Time Interval

73 months

iii

b. Amount (SDR million)

Category Original

Allocation

Last Revised

Allocation

Amount

Canceled

Amount

Disbursed

Undisbursed

Balance 01 Civil works 19.892 19.892 0.289 19.603 0.289

02 Equipment and materials 0.080 0.080 0.034 0.045 0.034

03 Design and construction supervision 3.151 3.151 0.027 3.125 0.027

04 Institutional development program 0.098 0.098 0.002 0.095 0.002

05 Hygiene and sanitation education program 0.146 0.146 0.000 0.145 0.000

06 Project management 2.948 2.948 0.004 2.945 0.004

07 Service charge 0.975 0.975 0.000 0.975 0.000

Total 27.289 27.289 0.356 26.933 0.356 Source: Loan Financial Information System. c. Amount ($ million) Category

Original Allocation

Last Revised

Allocation

Amount

Canceled

Amount

Disbursed

Undisbursed

Balance

01 Civil works 13.510 29.089 0.422 28.667 0.422

02 Equipment and materials 15.600 0.100 0.044 0.056 0.044

03 Design and construction supervision 1.600 4.479 0.038 4.441 0.038

04 Institutional development program 0.700 0.143 0.004 0.139 0.004

05 Hygiene and sanitation education program 0.300 0.226 0.000 0.226 0.00

06 Project management 2.700 4.143 0.005 4.138 0.005

07 Service charge 1.900 1.474 0.000 1.474 0.00

Total 36.310 39.654 0.513 39.141 0.513 Source: Loan Financial Information System.

9. Local Costs (Financed) - Amount ($ million) 28.07 - Percent of Local Costs 88.54 - Percent of Total Cost 71.71 C. Project Data

1. Project Cost ($ million)

Cost Appraisal Estimate Actual

Foreign Exchange Cost 20.90 11.07 Local Currency Cost 24.10 40.51 Total 45.00 51.58

iv

2. Financing Plan ($ million)

Cost Appraisal Estimate Actual Implementation Costs Government 6.00 7.07 Asian Development Bank 34.10 37.67 Beneficiaries 3.00 5.37

Total 43.10 50.11

Service Charges ADB Financed 1.90 1.47

Grand Total 45.00 51.58

3. Cost Breakdown by Project Component ($ million)

Component Appraisal Estimate Actual

A. Physical Infrastructure Land 1.0 0.00 Civil Works 15.9 35.74 Equipment 20.0 0.06 Design and Construction Supervision 2.0 4.44 Subtotal (A) 38.9 40.24 B. Capacity Building Institutional Development Program 1.1 5.51 Hygiene and Sanitation Education Program 0.4 0.23 Consulting Services for Project Management Support 2.7 4.14 Subtotal (B) 4.2 9.87 C. Interest during Construction 1.9 1.47

Total 45.0 51.58

Source: Ministry of Agriculture, Water Resources, and Processing Industry and Loan Financial Information System. 4. Project Schedule

Item Appraisal Estimate Actual

Date of Contract with Consultants August 2000 October 2000 Completion of Engineering Designs October 2000 December 2008 Civil Works Contract Date of Award May 2001 January 2002 Completion of Work December 2006 April 2009 Equipment and Supplies Procurement February 2002 February 2002 Completion of Equipment Installation February 2002 February 2002 Trainings and Workshops Date of Signing March 2000 January 2007 Completion of Assignment December 2005 April 2009 Recruitment of Institutional Development Specialists March 2000 March 2006 Hygiene and Sanitation Education Program Date of Signing January 2003 August 2006 Completion of Assignment June 2004 December 2006 Consulting Services for Project Management Support Date of Signing January 2000 October 2000 Completion of Assignment December 2006 February 2006 Extension of the Project

From 31 Dec 2006 to 31 Dec 2008 July 2006 From 31 Dec 2008 to 30 Apr 2009 December 2008

v

5. Project Performance Report Ratings

Ratings Implementation Period

Development Objectives

Implementation Progress

From 31 December 2000 to 30 September 2004 Satisfactory Satisfactory From 1 October 2004 to 31 January 2005 Satisfactory Partly Satisfactory From 1 February 2005 to 31 August 2006 Satisfactory Satisfactory From 1 September 2006 to 31 October 2006 Partly Satisfactory Satisfactory From 1 November 2006 to 30 April 2009 Satisfactory Satisfactory D. Data on Asian Development Bank Missions

Name of Mission

Date

No. of Persons

No. of Person-

Days

Specialization of Membersa

Inception 8–22 Nov 2000 2 15 i, d Review 18–29 Nov 2001 2 12 i, a Review 30 Apr–8 May 2002 1 9 i Review 27 Sep– 4 Oct 2002 4 8 f, g, h, b Review 24–26 Jun 2003 1 3 b Review 11–18 Nov 2003 2 8 i, a Mid-term review 26 May–8Jun 2004 2 14 i, j, Review 2–9 Sep 2004 1 8 i Review 30 Jan–10 Feb 2005 2 11 i, b Review 18–26 Sep 2005 3 9 i, b, j Review 27 Nov–2 Dec 2005 2 6 i, a Review 18–26 Apr 2006 3 9 a, d, c Review 8–14 Jun 2006 4 7 i, a, d, c Joint review with World Bank and DFID

27 Nov–5 Dec 2006 7 13 i, b, k, l, d, c

Review 23 Apr–4 May 2007 2–8 Jun 2007

2 30 b, c

Review 24–29 Sep 2007 5 6 b, d, c, e, a, Review 15–26 Oct 2007 4 12 b, d, c, e Review 5–29 Nov 2007 4 25 g, e, h Joint supervision 26–29 Nov 2007 3 4 b Consultation 12–15 Dec 2007 1 4 b Review 20–27 Feb 2008 3 8 a, b, c, Review 20 Feb–31 Mar 2008 2 20 a, b Special loan review 23 Apr–9 May 2008 6 17 l, m, b, a, n Review 19–26 Jan 2009 3 18 a, c, l Project completion review 25 Sep–26 Oct 2009 3 66 a, c, d DFID = Department for International Development of the United Kingdom. a a = project implementation officer in Kyrgyz Resident Mission, b = senior project implementation officer in the

resident mission, c = project analyst in the resident mission, d = staff consultant, e = senior finance and administrative assistant in the resident mission, f = senior project economist at ADB headquarters, g = director’s advisor, h = senior control officer at ADB headquarters, i = urban economist, j = project analyst at ADB headquarters, k = project administration unit head at ADB headquarters, l = senior urban specialist, m = specialist at ADB headquarters, n = resident mission country director.

Toktogul Reservoir

Andizhan ReservoirLake Chatyr-Kul

Lake Song-Kul

Lake Issyk-Kul

Sary Tash

Daroot-Korgon

Irkeshtam

Gulcha

Naiman

AravanOsh

Jalal-Abad

KokYangak

Torugart

At-BashyBaetovKazarman

Uzgen

Kara-KuljaKara Su

Kochkor Ata

Bazar-Korgon

TashKumyrTerek

Sai

Kanysh-Kiya

ShamaldySai

Toktogul

TalasMaimak

Bakay Ata

Pokrovka

KaraBaltaKayingdy

Shopokov

NovopavlovkaKant

IvanovkaKemin

BISHKEK

Tokmok

Balykchy

Cholpon-Ata

Tyup

Karakol

Dzhergalan

Naryn

Sulyukta

Haidarkan

Batken Frunze

Kyzyl Kiya

Chauvay

Karakul

Kochkor

Chaek

Suusamyr

Arslanbob

Karajigach

ISSYK-KUL

NARYN

TALAS

CHUI

JALAL-ABAD

OSH

BATKEN

PEOPLE'S REPUBLICOF CHINA

UZBEKISTAN

K A Z A K H S T A N

TAJIKISTAN

TAJIKISTAN

Project Oblast

National Capital

Oblast Capital

City/Town

Main Road

Other Road

Railway

River

Oblast Boundary

International Boundary

Boundaries are not necessarily authoritative.

Water SupplySubprojects

PublicBathhouses

Number ofBeneficiaries

OblastSchool

Matrines

Number Constructed/Rehabilitated

104,678

186,199

107,396

79,905

478,178

17

40

25

36

118

Batken

Osh

Jalal-Abad

Chui

Total

5

4

6

5

20

2

1

2

2

7

KYRGYZ REPUBLIC

COMMUNITY--BASED INFRASTRUCTURESERVICES SECTOR PROJECT

(as completed)

0 50 100

Kilometers

N

10

-26

17

HR

42 30'No

42 30'No

78 00'Eo

78 00'Eo

71 00'Eo

71 00'Eo

38 00'No

38 00'No

This map was produced by the cartography unit of the Asian Development Bank. The boundaries, colors, denominations, and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information.

I. PROJECT DESCRIPTION

1. On 8 June 2000, the Asian Development Bank (ADB) approved a loan of SDR27.3 million ($36.0 million) to the Kyrgyz Republic for the Community-Based Infrastructure Services Sector Project. An advisory technical assistance (TA) grant was approved with the loan to help the government refine and implement appropriate management systems for community-based infrastructure services.1

2. Prior to its transition to independence, the Kyrgyz Republic had received sufficient fiscal support to construct, maintain, and rehabilitate infrastructure throughout the country. Subsequently, the government has not been able consistently to provide funds for infrastructure development. As a result, infrastructure facilities are often poorly designed and inadequately maintained. In both urban and rural areas in many parts of the country they have fallen into disrepair. Insufficient and polluted drinking water supplies, combined with poor sanitation and hygiene practices, are directly linked to a significant increase in waterborne diseases. The rural water supply is especially affected. Formerly, an estimated 70% of rural villages had clean, healthy piped water supply. At the time of appraisal, only about 40% of rural villages had working systems. The lack of adequate water supply and sanitation services has a large negative impact on the social economy, and especially the poor.

3. The expected impact of the project was improved general living and health conditions in selected rural and urban communities—in particular for the poor—through the provision of basic infrastructure services. The project was to achieve its impact by (i) assisting the central and local governments in delivering infrastructure services; (ii) supporting sanitation and hygiene education; (iii) improving the technical and financial capacity of local governments and vodokanals (urban water supply and sewerage agencies) in the planning, implementation, and operation and maintenance (O&M) of facilities; and (iv) promoting ownership and community management of both rural and urban community-based infrastructure services. The project was to cover three oblasts (provinces)2 and included two parts:

(i) Part A: Physical Infrastructure. This included six components: (a) rural water supply, (b) rural sanitation, (c) rural flood control and drainage, (d) rural roads, (e) urban water supply, and (f) urban sewerage. The project was to rehabilitate and upgrade existing systems and facilities.

(ii) Part B: Capacity Building. This covered (a) an institutional development program, (b) a hygiene and sanitation education program, and (c) consulting services for project management support.

4. The Ministry of Agriculture and Water Resources, reorganized in December 2000 as the Ministry of Agriculture, Water Resources, and Processing Industry (MAWRPI), was the project’s executing agency.

5. The loan became effective on 28 November 2000, and it was closed on 27 January 2010. The final loan amount was SDR26.9 million ($39.1 million). Two loan extensions, totaling 28 months, were granted in order to complete project works.

1 ADB. 2000. Report and Recommendation of the President to the Board of Directors on a proposed Loan and

Technical Assistance Grant to the Kyrgyz Republic for the Community-Based Infrastructure Services Sector Project. Manila.

2 Batken Oblast was created after separating from Osh Oblast in October 1999, and the draft report and recommendation of the President was not updated. Thus, the project covered four oblasts: Batken, Chui, Jalal-Abad, and Osh.

2

II. EVALUATION OF DESIGN AND IMPLEMENTATION

A. Relevance of Design and Formulation

6. The project was in line with the government’s five-year medium-term framework prepared in 1999 for the development of community-based infrastructure services. ADB and the World Bank coordinated closely in preparing the framework and related policies, which focused on (i) improving services in poor areas; (ii) attaining full cost recovery in 5 years with affordable tariffs for the poorest beneficiaries; (iii) involving communities in planning, implementation, and O&M; (iv) building institutional capacity; (v) facilitating private sector participation; and (v) establishing a water coordination committee. The project also supported the government’s overarching move toward a market economy and decentralization as an integral part of its approach to restoring basic services necessary for economic and social development. 7. The project directly supported ADB’s operational strategy for the Kyrgyz Republic,3 specifically with respect to poverty reduction, sound management of natural resources, and environmental protection for sustainable growth. The operational strategy aimed to (i) support the government’s reform efforts and overall development management through institutional change and improved provision of public services; (ii) enhance the long-term potential of the country by investing in physical infrastructure and human development, as well as selectively intervening to protect and rehabilitate the environment; and (iii) facilitate private sector participation in all these aspects. With its focus on improving basic services and living conditions in poverty affected areas, the project was in line with ADB’s poverty reduction strategy.4 8. The project is in line with the country development strategy (CDS) 2009–2011 focused on improving quality of life through inclusive economic growth, better governance, and sustainable environmental management. It remains consistent with ADB’s country partnership strategy for the Kyrgyz Republic presented in the joint country support strategy for 2007–2010, which supports the development agenda articulated in the CDS.5 It addresses a main challenge to the country’s human development and environmental management: worsening quality of the human habitat that threatens health and overall human development. The project also supports the government’s decentralization process for institutional strengthening of authorities at central and local levels and establishing clear division of responsibilities between them. 9. The project was designed under ADB-financed project preparatory technical assistance in close collaboration with the government.6 The appraisal mission, fielded 2–16 February 2000, reached agreement with the government on technical, financial, and organizational aspects. The TA report, which formed the basis for the project design and prepared 10 core subprojects, was satisfactory although design of some core subprojects had to be revised.

10. The adopted sector approach was appropriate considering that the project was to select, design, and implement 240 small and medium-size rural water supply systems (RWSSs) spread over about two-thirds of the country. However, MAWRPI’s capacity was inadequate for implementing a sector project. Although resources for capacity building were included, inadequate capacity was a main factor for delays and problems in early implementation stages.

3 ADB. 1996. Country Operational Strategy Study: Kyrgyz Republic. Manila. 4 ADB. 1999. Fighting Poverty in Asia and Pacific: The Poverty Reduction Strategy of the ADB. Manila. 5 ADB, Swiss Cooperation, United Kingdom Department for International Development, United Nations Agencies,

and World Bank Group. 2007. Joint Country Support Strategy (2007–2010): Kyrgyz Republic. Manila. 6 ADB. Technical Assistance to the Kyrgyz Republic for Community-Based Infrastructure Services Sector Project.

Manila (TA 3048-KGZ, approved in July, for $600,000).

3

11. The project design was appropriate to provide for strong ownership of the beneficiaries through their mobilization and organization; contributions; and involvement in all stages of identification, design, tendering, implementation, and O&M. Sustainability was a key design factor: the project provided training to community drinking water users’ unions (CDWUUs) and introduced tariff recovery to cover all O&M, repair, and emergency works. To build ownership, the beneficiaries were required to contribute 10% of a subproject cost. In 2001, the financing of subprojects was changed. In accordance with the new arrangements, the government was to finance 80% of the total cost of each subproject (out of which 5% to be recovered from beneficiaries within 7 years), and the remaining 20% of the total cost of each subproject costs to be funded through 5% cash and 15% in-kind contributions made by communities concerned. CDWUUs were to be responsible for O&M. This required strong community mobilization and participation during all stages of the project cycle, which were to be facilitated by project implementation units (PIUs) with assistance from consultants.

12. Despite project design, however, during the early years of implementation (2000–2004), efforts were concentrated on physical accomplishment without adequate prior community mobilization, organization, and consultation. Most design and construction contracts were awarded without proper prequalification or adequate community involvement. Some subprojects were designed without adequate field surveys and investigation. Some contractors selected during this period did not have the required experience, staff, and financial and equipment resources. Without proper community mobilization efforts, it was difficult to collect the beneficiaries’ mandatory up-front 5% cash contribution and 15% in-kind contribution.

13. Poor design, procurement of substandard materials, and poor quality of construction during the early years of project implementation drew wide press coverage and attention of the government and nongovernment organizations (NGOs). A number of cases of mismanagement in implementing design and civil works contracts, and inadequate performance of project staff in procurement procedures were identified. Investigation by the law-enforcement agencies of the government confirmed cases of corruption by contractors, and, by project completion, about 42% of the receivables had been collected from the accused. ADB’s Office of Auditor General also registered some such cases and carried out investigations.

14. To address the project implementation deficiencies, in early 2005, with advice from ADB, a number of remedial measures were implemented: (i) new project management unit (PMU) staff were recruited strictly on merit and adequately trained; (ii) a list of priority subprojects that could be financed out of the project funds was prepared and widely circulated in coordination with relevant government agencies; (iii) only subprojects in the priority list would be taken up for design and construction, and contributions collected by beneficiaries of the non-priority projects would be returned; (iv) efforts were concentrated on community consultation, mobilization, organization, and training; (v) prequalification of the design institutes and contractors was done rigorously by verifying their experience and resources; (vi) awarding of contracts was made transparent (with NGOs participating in evaluation as observers); (vii) beneficiary organizations were involved in selecting design institutes and contractors, and in all stages of design and construction; and (viii) the PMU was required to investigate issues of the completed RWSSs that still did not deliver the intended benefits and to implement remedial measures. These steps eventually helped in gaining beneficiary confidence and improved implementation progress.

15. During project implementation it was discovered that costs for rural water supply rehabilitation would be much higher than envisaged at appraisal due to (i) greater rehabilitation needs, and (ii) significant price escalation for key construction inputs. It was evident that the number of subprojects would need to be curtailed significantly. Physical and price contingencies

4

were not shown separately in the project cost estimates and, for a sector project with a 6-year implementation period, were too low (at around 13%) to cover the increase in the costs of civil works. Consequently, in February 2004, the government decided to focus on rehabilitating RWSSs at the expense of all other components. Four components were cancelled: (i) urban water supply, (ii) urban sewerage, (iii) rural flood control, and (iv) rural roads. Moreover, the rural sanitation component was downsized. Savings from cancelled and downsized components were reallocated for rural water supply civil works. Despite identified cost overruns in the rural water supply component, the project target was increased from 240 to 375 RWSSs in September 2004 citing demand of the participating communities. Increase in project coverage received wide public attention and raised expectations among communities. When the project scope was again changed in February 2005 to reduce the number of subprojects and match the available project funds, therefore, this was difficult to achieve as (i) designs were in advance stages for some dropped RWSSs, and (ii) 5% cash contributions were being collected from many CDWUUs that were eventually dropped.

16. Potential beneficiaries of the dropped subprojects, supported by NGOs, protested to the government about (i) reduced project coverage, and (ii) poor construction quality in some subprojects. Consequently, the government requested ADB to provide additional funds to address these two issues. In response, ADB approved a supplementary grant of $30 million to finance all 122 subprojects dropped due to price escalation in civil works.7 The supplementary grant financing also included $4.0 million to address issues of problematic subprojects and provision of O&M equipment for the subprojects financed under the loan project.

B. Project Outputs

17. With the 2004 and 2005 changes in scope, the completed project achieved its revised outputs. Appendix 1 presents the project’s design and monitoring framework with a list of project accomplishments. The main observations and findings of this report are organized by project component below.

1. Part A: Physical Infrastructure

18. The project was to include 247 subprojects: 240 rural subprojects, covering 730 villages with populations ranging from 500 to 20,000, and 7 small town subprojects each covering populations of 20,000 to 80,000. Each rural subproject was to cover one village or a cluster of two or more villages. The rural subprojects were to include rehabilitation and upgrading of piped water supply systems, sanitation facilities including latrines and bathhouses, flood control and drainage facilities, and local roads. The urban subprojects were to cover rehabilitation and extension of piped water supply services, as well as improvements in sewerage systems including wastewater collection and treatment. The development and expansion of the water supply systems were to include construction and/or rehabilitation of water source intakes, pumping stations, treatment facilities, storage reservoirs, transmission and distribution pipelines, public standpipes, and individual house connections. The subprojects were to derive supplies from different types of water sources. Most were expected to use groundwater and springs, thus requiring rehabilitation, some drilling of deep wells, and constructing spring intakes. 19. Rural Water Supply Component. This was to cover 730 of the 1,403 villages in the three project oblasts. Of the 2.4 million rural people in those oblasts, about 50% were to be

7 ADB. 2008. Report and Recommendation of the President to the Board of Directors on a Proposed Supplementary

Grant to Kyrgyz Republic for Community-Based Infrastructure Services Project. Manila.

5

covered by the 240 rural subprojects (420 villages were to receive new systems, and 310 to have their systems rehabilitated). Each covering 2–9 villages, about 170 subproject systems will utilize groundwater sources, 50 systems spring sources, and 20 systems surface water. 20. The original targets were not met mainly due to increases in construction costs. Despite reallocation of funds from cancelled components (para. 15) and from the rural sanitation component, the revised funds were still not enough to meet the original targets and the scope of rural water supply facilities had to be curtailed. At project completion, only 118 RWSSs (21 newly constructed and 97 rehabilitated) were financed to serve 478,000 beneficiaries in 302 villages (Appendix 2). The cost per beneficiary was $86 at completion, compared to $28 per beneficiary envisaged at appraisal. 21. Rehabilitation of distribution systems involved mainly replacing pipes, and not just their linings, as widely practiced in a similar project financed by the World Bank. Although it was more expensive to replace pipes than linings, this did not decrease the water flow delivery, which was a priority for communities with significant population increases since first constructing the systems. The increase in construction costs was due to (i) price escalation of key construction inputs, and (ii) increase in scope of rehabilitation at subproject level. The project originally envisaged not full but only partial rehabilitation of RWSSs to enable them to work again. Because some RWSSs had been constructed more than 20 years ago and had not had proper maintenance, however, partial rehabilitation could not ensure that in a few years non-rehabilitated parts would not become nonoperational again. In some cases, additional rehabilitation needs were discovered after awarding contracts (i.e., during the actual civil works). Thus, many contracts were increased by contract variations. Due to failure promptly to revise the investment plan after the price escalation was discovered, about $1.0 million was collected from RWSSs that were later dropped. About $1.2 million was spent on the design of such systems. On the other hand, cash contribution for the RWSSs included in the plan fell short by about $600,000. 22. Subprojects selection was to be based on the PIUs’ rapid assessment of the needs and capacities of the communities, local governments, and vodokanals. These reports were to be reviewed by the PMU in light of the selection criteria and recommendations sent to the National Water Supply and Sanitation Committee (NWSSC) for decision. For selected subprojects, the PIUs together with community-based organizations (CBOs) and NGOs were to mobilize the communities and prepare socioeconomic surveys. After the ability of the communities to contribute 5% in cash and 15% in kind was assessed as satisfactory, a subproject was to be designed and implemented. After completion, a simple business plan was to be prepared to suggest tariff, institutional arrangements, and staff level for O&M.

23. Without prior community mobilization, especially during the early implementation years, it was difficult to collect the mandatory up-front contributions from the beneficiaries. The decision made in 2001 to raise the required contribution from beneficiaries from original 10% of a subproject cost to 20% created implementation delays and conflicts among the contractors, communities, and PIU staff because (i) without proper mobilization, it was difficult to collect 5% of subproject cost in cash up front, and communities had no sense of ownership for the systems and hence were reluctant to participate in construction activities; (ii) in many schemes with long conveyance systems, the construction sites were many kilometers from settlements and hence it was difficult to bring the required number of people for work at the prescribed place and time; and (iii) in many cases, the skill mix required for the task was not available from the communities. Following this lesson, the requirement of 15% in-kind contribution was dropped for the supplementary grant.

6

24. By end-2007, 45 subprojects still had unsatisfactory performance due to problems relating mainly to poor design, construction, and O&M. After a 2008 project review mission, issues pertaining to 43 subprojects were resolved and CDWUUs and village administrations confirmed their satisfactory completion. At project completion, of the 118 subprojects financed, all completed subprojects had operational RWSSs with exception of three (Kulatov, Markaz and Aral) that still had pending issues (Appendix 3).

25. Rural Sanitation Component. This component was to cover about 90 villages in each of the three project oblasts and provide 70,000 households with improved family latrines. About 250 school latrines and 750 public bathhouses also were to be improved. At project completion, only 20 school latrines and 7 bathhouses were rehabilitated and/or constructed. The component was downsized to save funds for cost overruns in the rural water supply component (para. 15). 26. Rural Flood Control and Drainage Component. Approximately 30 subprojects covering about 100 villages were to be undertaken to protect rural water supply facilities from flood damage. The component was cancelled in February 2004 (para. 15). 27. Rural Roads Component. About 20 kilometers of village roads were to be improved to enable easy access to secondary roads leading to rayon centers. The component was cancelled in February 2004 (para. 15). 28. Urban Water Supply Component. This envisaged rehabilitating and constructing reservoirs, transmission mains, networks, public standpipes, bulk flow and consumer flow meters, and valves in seven small towns. It was cancelled in February 2004 (para. 15). 29. Urban Sewerage Component. Three of the seven small towns covered under the urban water supply component were to have their sewerage systems rehabilitated, including repair and replacement of deteriorated sewers. The component was cancelled in 2004 (para. 15).

2. Part B: Capacity Building

30. Institutional Development Program. The program was to establish training centers and to train staff and board members at central and local governments, water user committees (WUCs), and vodokanals to strengthen capacity to efficiently implement, operate, and maintain the systems. The focus was to be on four areas: (i) O&M, with emphasis on reducing unaccounted for water; (ii) gradual expansion of the organizational structure, including to assist local governments, WUCs, and vodokanals in identifying required expertise of key staff to be hired; (iii) developing planning, engineering, and financial capabilities at local governments, WUCs, and vodokanals; and (iv) depending on vodokanals’ size and development level, computerizing administrative, accounting, billing and collection, engineering, and financial operations. About 16,000 central and local government and vodokanal staff were to be trained. 31. Almost all 80 CDWUUs established in the early years were weak, had poor knowledge and capacity to perform, and did not have the confidence and support of their communities. An innovation was introduced in 2006 to associate local village administrations with CDWUUs in managing RWSSs. By virtue of their authority as local administrators, the village administrations facilitated effective coordination with communities and made resources available in cases of emergencies. They also helped in tariff collection and provided financial support in paying tariffs to students, schools, kindergartens, and local health facilities. In some cases, they provided loans to CDWUUs for emergency repairs that were paid back after collecting tariffs from the beneficiaries. To further improve capacity building efforts, in 2006 a comprehensive plan was

7

prepared. The plan covered (i) CDWUU capacity building, (ii) financial management, (iii) budget and tariff development, (iv) social partnership and mobilization, (v) water quality control, (vi) O&M, and (vii) tariff collection improvement methods. Capacity building for CDWUUs was rated highly successful by the trainees. They stated that the structure of the training was highly relevant and that it was conducted effectively. They particularly appreciated the modules on O&M, tariff calculation and collection, and budgeting.

32. At project completion, 124 CDWUUs were established (including two associations of CDWUUs) for the 118 RWSSs financed under the project in 301 villages and benefiting 613,000 persons. All CDWUUs are registered with the Ministry of Justice and have accounts in commercial banks. Women are actively participating, both informally and as board members, and at project completion 16 CDWUUs were headed by women.

33. The training program was adjusted due to (i) cancellation of four components, including both urban water and sewerage components; and (ii) overall reduction in RWSS targets. The scope of capacity building was curtailed, and only 8,337 persons were trained versus the target of 16,000. Training for vodokanal board members and staff was not conducted since both urban components were cancelled. Training was done for central government staff and CDWUUs members and focused on various factors to ensure sustainable provision of water in rural areas. 34. Hygiene and Sanitation Education Program. The program intended to help the beneficiaries improve their understanding of the close interrelationship between hygiene, water, sanitation, and health. As part of a comprehensive information dissemination and education drive of the government to improve health conditions, the program was to be formulated and implemented by the Ministry of Health. It was to be implemented in 90 villages and focus on safe drinking water, hand washing, proper use of toilets, and need for adequate wastewater disposal. About 540 local government staff and 14 staff of vodokanals were expected to be trained in health education principles and methods. 35. While the urban sewerage component was cancelled and the scope of rural sanitation was curtailed, the hygiene and sanitation education program was a big success as it covered all subproject areas selected under the revised project scope, conducted training at all schools in the subprojects, and trained 1,275 trainers against the appraisal target of 554 persons. This had a visible positive social impact (para. 70).

36. Consulting Services. Consultants were to help implement the project and provide project management support. They were also to augment the implementation capacity of the sector agencies concerned. CBOs and NGOs were expected to be involved by consultants in socioeconomic surveys and community consultations. The consulting services were expected to cover (i) project management and monitoring, (ii) feasibility studies and design of subprojects, (iii) construction of subprojects, (iv) preparation and implementation of the hygiene and sanitation education program, and (v) planning and implementation of the institutional development program. 37. Consultants were selected with no significant delay and in accordance with the original terms of reference. The project management consultants were engaged through advance action and were in accordance with the envisaged schedule (para. 55). However, the performance of the consultants was less than satisfactory (para. 59).

8

C. Project Costs

38. At appraisal, the cost was estimated at $45.0 million, comprising $20.9 million in foreign currency and the equivalent of $24.1 million in local currency. ADB was to finance the entire foreign exchange cost plus $15.1 million of the local currency cost, while the government and beneficiaries were to finance the remaining local currency cost of $9.0 million. The actual cost at loan closing was $51.6 million, consisting of $11.1 million in foreign exchange cost and $40.5 million in local currency cost. The civil works costs were much higher than envisaged at appraisal due to (i) greater needs for rehabilitation and (ii) significant price escalation of key construction inputs. Cost overruns eventually led to significant reduction in project scope. Appreciation of the Som against the dollar also contributed to higher actual project cost in dollar equivalent terms. At appraisal, the exchange rate was Som48 to $1.00 and during implementation it fell below Som36. ADB financed 100% of the foreign exchange costs and $28.0 million of the local currency costs,8 while the government and beneficiaries covered the remaining $12.4 million. The net loan amount was SDR26.9 ($39.1 million) after cancelling the unused loan balance of SDR0.4 million ($0.5 million) at loan closing. Appendix 4 compares appraisal and actual project costs, by component. 39. As the project scope was curtailed, four reallocations were approved to reallocate funds from the equipment, urban water supply and sewerage, rural flood control, and rural road subcomponents to various activities of rural water supply and sanitation.

D. Disbursements

40. A total of $39.1 million was disbursed under the loan. While ADB financing remained unchanged in SDR terms, in dollar terms it exceeded the planned amount by $3.1 million (9%) due to som appreciation against the dollar. On the loan closing date, a surplus of SDR0.4 million ($0.5 million) was cancelled. The first and last disbursements were made on 20 December 2000 and 27 January 2010, respectively. An imprest account of $25,000 was originally established for the project. In January 2002, the imprest fund ceiling was increased to $50,000, and in 2004 to $2.0 million to expedite disbursements. However, lack of attention to fiduciary controls led to cases of financial mismanagement, revealing, in September 2007, discrepancies amounting to $1.2 million in imprest account management during 2003-2005. These related to over-replenishment of the imprest account as a result of borrowing from the CDWUU contributions account. The overpayments were corrected in the course of the imprest account’s replenishments in 2008. The imprest account’s average turnover ratio was 2.17. Yearly utilization of loan funds is shown in Appendix 5.

E. Project Schedule

41. The appraisal implementation schedule envisaged completing project works within 6.5 years from June 2000 (Appendix 6). Completing project preparation activities for 10 core subprojects under the project preparatory TA was to ensure that the project would start fast and smoothly. Initial delays in implementation were due to weak performance of the executing agency, ADB, and project consultants during the early years of project implementation.

8 ADB approved an increase in the local currency cost ceiling from the original $16.146 million to $28.017 million on

10 February 2004.

9

42. At the request of the government, two loan extensions, totaling 28 months, were granted to complete the project.9 The extensions in the loan closing date were necessary to rectify the problems arising from poor design, procurement of substandard materials, and poor quality of construction, and particularly in RWSSs implemented during the early years of implementation. Implementation of the hygiene and sanitary education program and rural sanitation started with a delay in mid-2006.

F. Implementation Arrangements

43. The implementation arrangements proposed at appraisal were appropriate at the time of appraisal but were not strictly followed. The Ministry of Agriculture and Water Resources, reorganized in December 2000 as MAWRPI, was the project’s executing agency. A PMU to coordinate and manage all project activities was to be established at the ministry in Bishkek, while PIUs were to be established at oblast level. The PIUs were to be responsible for community consultation, preparing tender and bid documents, evaluating bids, awarding contracts, procurement, construction supervision, monitoring and quality control, maintaining project accounts, and clearing environmental examinations. At the national level, a National Water Supply and Sanitation Committee (NWSSC) was to be formed to provide policy guidance, as well as to monitor and supervise project implementation.

44. The placement of the PMU in MAWRPI was not appropriate, as the ministry gave greater staff and budgetary support to the irrigation sector and hence rural water supply remained neglected. Therefore, in 2006, the Department of Rural Water Supply under MAWRPI was designated as the executing agency and the PMU and PIUs were to work closely with the local units of the National Agency for Local Self-Governance. After considering various options to strengthen the Department of Rural Water Supply and make it more effective, the government, as per Presidential Decree UP468 dated 27 December 2008, placed the Department of Rural Water Supply under the National Agency for Local Self-Governance.

45. Adequate resources were allocated to build the executing agency’s capacity and support it in implementing the project, but these measures could not work properly because PMU and PIU staff were poorly recruited and inadequately trained. Subsequently, all originally recruited PMU and PIU staff had been replaced by 2006. Since no government agency was responsible for the various aspects of water management, NWSSC’s coordinating role should have been crucial. Its coordination and guidance were weak, however, and it did not meet regularly.

46. After identifying in 2006 that 23 of the 80 completed subprojects had serious institutional and technical problems, the government and ADB agreed to recruit 20 institutional development consultants to mobilize and organize communities in order to develop their ownership for the RWSSs, as well as to help establish CDWUUs and train their leaders to ensure sustainable O&M. Soon after starting these activities, the executing agency realized that community mobilization and capacity building activities would be more effective and efficient if carried out at oblast level and hence the institutional development positions were delegated to the four PIUs.

47. As recommended by a 2007 joint country portfolio review, a joint PMU was established in January 2008 to implement projects financed by ADB and the World Bank in line with donor harmonization. The joint PMU continues to operate after project completion and is responsible for implementing ADB’s supplementary grant for the project and World Bank’s second water and

9 The first extension for 2 years was approved on 25 July 2006, and the second extension for 4 months was

approved on 5 December 2008.

10

sanitation project. The new implementation arrangements have proven efficient and effective. The joint PMU implemented new subprojects and successfully addressed the problems of the subprojects already implemented. Appendix 7 shows the joint PMU’s organization.

48. A project performance monitoring system was established, and progress in achieving the project indicators was reflected in quarterly reports. As envisaged at appraisal, the project involved no major land acquisition but did require small areas of land for locating deep wells, water storage, sewage treatment, and pipeline rights-of-way. Community-owned land was used for these purposes and entailed no resettlement or relocation of people in the project area. Initial environmental examinations were prepared for all subprojects and their requirements were met.

G. Conditions and Covenants

49. Twenty four out of 30 loan covenants have been complied with; one covenant on selection of urban subprojects was cancelled after cancellation of all urban components in February 2004; and compliance with five covenants has been partial. Partial compliance was observed with poor designs of subproject at the early stages of project implementation. Partial compliance with two covenants related to operation of the NWSSC. After its establishment, the NWSSC did not meet regularly and did not fully perform the intended functions of regular review of reports, monitoring, and supervision of implementation activities, which deprived the PMU of policy guidance during the critical early stages of implementation. Partial compliance was also observed with irregular submission of quarterly progress reports, and not strictly following the criteria for selection of the water supply subprojects, especially during the early stages of project implementation. The covenant on financing of subprojects was not amended following the government decree in 2001 (para. 11), however it is considered as complied with, as the decree of 2001 was supported by ADB both in terms of not having raised objection to the different ratios in the decree, and in confirming compliance of the covenant in subsequent back-to-office reports (Appendix 8).

H. Related Technical Assistance

50. An advisory TA was approved in association with the project. Its total cost was estimated at $765,000, with $650,000 financed by ADB on a grant basis and the $115,000 balance committed by the government in the form of counterpart funds. The TA’s main objective was to strengthen the sector institutions and create management systems appropriate for the project’s smooth implementation. 51. The consultants were fielded on 30 October 2000, even before the loan became effective (on 28 November 2000). Inputs were complete by September 2001 and the TA was closed on 31 January 2005. According to the TA completion report, the international consultant input was increased from 18 to 20 and domestic from 40 to 56 person-months.10 A total of 13 training workshops were conducted for 544 participants, which included community leaders, NGO trainers, CDWUU board members, government officials, design engineers, financial analysts, quantity surveyors, contractors, and project management staff. The TA also helped in establishing the first 50 CDWUUs. The TA completion report evaluated the performance of both the executing agency and ADB as satisfactory, and the TA was rated successful overall.

10 ADB. 2003. Technical Assistance Completion Report on the Institutional Strengthening for Community-Based

Infrastructure Services Project. Manila

11

52. At project completion, it is assessed that the TA implementation started too early and without prior community mobilization and organization. The project staff recruited during early stages was replaced during 2005–2006 (due to various reasons, including professional incompetence and lack of integrity). Hence some of the TA capacity building efforts did not serve the intended purpose. Thus, the TA is considered only partly successful.

I. Consultant Recruitment and Procurement

53. The project envisaged using 846 person-months of consulting services. In total $5.3 million was provided for consulting inputs comprising $1.6 million for physical infrastructure design and construction supervision, $0.7 million for the institutional development program, $0.3 million for the hygiene and sanitary education program, and $2.7 million for project management support.

54. The Project engaged international and domestic consultants in accordance with ADB’s Guidelines on the Use of Consultants. Actual consulting services’ input totaled $8.5 million compared to the original provision of $5.3 million. At project completion, the consulting services inputs comprised $4.4 million for design and construction supervision of physical infrastructure, $0.1 million for the institutional development program, $0.2 million for the hygiene and sanitary education program, and $3.8 million for project management consultancy.

55. A project management consultant was recruited using advance contracting procedures and fielded on 8 November 2000. The project provided for about 1.5 years of continuous input starting from the beginning and with short, intermittent inputs thereafter.

56. Eleven design institutes were hired during May 2002–October 2005 to conduct field surveys and investigations, prepare detailed designs, and supervise construction for the proposed 240 RWSSs. In May 2006, the design institutes’ contracts were terminated because of their poor performance and the PMU took full responsibility for the supervision work. A total of seven technical supervision engineers were recruited.

57. In 2005, a team comprising one international and one local specialist was hired to study CDWUUs’ social, financial, organizational, and legal sustainability. After ADB’s special review mission in May 2008, a special team of four engineers was recruited by ADB during May–December 2008 to support the PMU in design and technical supervision work for 45 problematic subprojects. Two NGOs were recruited for the hygiene and sanitary education program in the four project oblasts.

58. Procurement of civil works followed national competitive bidding procedures, as the size of contracts was relatively small (less than $1 million). There were 132 civil works contracts implemented under the project. The executing agency could not properly supervise and monitor numerous contracts implemented in different parts of the country.

J. Performance of Consultants, Contractors, and Suppliers

59. The project management consultants failed to advise and assist the executing agency to anticipate or address the high cost escalation, revise the investment plan, select suitably qualified design institutes and contractors, and properly manage the project. Most of the cost overrun of $1.38 million (51%) on project management consultancy relates to unnecessarily prolonged dependence on international consultants rather than using them only during the initial period and gradually shifting to domestic consultants, as envisaged at appraisal. Performance of

12

the design institutes was poor. The significant cost overrun of $2.17 million (by 109%) in design and construction supervision was due to additional costs to redesign and supervise the poorly designed subprojects. Performance of consultants improved after 2006. Thus, consultants’ performance over the entire implementation period was partly satisfactory.

60. The performance of contractors and suppliers over the entire implementation period was partly satisfactory. During early stages of project implementation, poor procurement capacity of the executing agency led to poor selection and consequently poor performance of the selected contractors. Twenty criminal cases were filed by the national prosecutor’s office against some contractors for poor construction or mismanagement of funds from beneficiaries’ 5% financial contributions. The performance of contractors and suppliers selected after the 2006 PMU reorganization was satisfactory.

K. Performance of the Borrower and the Executing Agency

61. The performance of the Borrower was satisfactory. The government established the necessary imprest account and met counterpart fund requirements.

62. The executing agency lacked capacity to implement a complex, community-based sector project. The weak implementation was accompanied by the selection of incompetent project staff and poor performance of consultants. The executing agency had not ensured effective operation of the NWSSC. This in turn deprived the PMU of quality policy guidance during the critical early stages of implementation. Major overhaul of the implementation arrangements in 2006, capacity building thereafter, and establishing the joint PMU improved the situation and helped complete the project. Although the performance of the executing agency significantly improved after 2006, its overall performance is rated partly satisfactory.

L. Performance of the Asian Development Bank

63. ADB’s project administration until the end of 2004 was relatively weak. Identification of the important issues was not prompt, while preparation and implementation of the corrective measures was not timely. Emphasis on physical accomplishment without prior community mobilization and organization, which are key to community-based projects, was a main implementation problem. Inconsistency in addressing cost overruns raised expectations among beneficiaries that were not fulfilled. The financial covenant regarding government contribution has been amended in practice without the requisite internal approval or related documentation of the amendment (para. 49).

64. Significant disbursement delays were reported until 2005. This improved after the Kyrgyz resident mission of ADB began screening the withdrawal applications. Review missions in 2004 and 2005 helped change the project scope in line with the available project funds, reorganize the PMU and PIUs, revise the consulting services package, and address the problems in some completed subprojects. In 2007, ADB transferred responsibility for project administration from the headquarters to the resident mission. That led to stronger coordination with the executing agency and improved project administration. At completion, some project administration files from 2000 to 2006 could not be found due either to improper prior filing or their misplacement during the transfer of administration responsibility to the resident mission. In 2008, ADB addressed the issues of the 45 problematic subprojects and started preparing the $30 million supplementary grant to implement the 122 subjects dropped from the project. ADB’s Office of Auditor General conducted several investigations related to project implementation. At present, all projects in the country are implemented through an effective joint venture arrangement

13

between the resident mission and headquarters, with seamless coordination through joint teams. Overall, ADB’s performance is rated partly satisfactory.

III. EVALUATION OF PERFORMANCE

A. Relevance

65. The proposed outcome was consistent with the country’s development priorities and ADB’s country and sector strategies, both at appraisal and at evaluation. The project addressed one of the most critical challenges for the country’s rural population—access to safe drinking water. The community-based development approach of empowering communities to manage and operate the RWSSs supports the government strategy of governance and transparency in public administration and its overarching objectives to move toward a market economy and decentralization. However, the project did not appropriately identify the extent of rehabilitation needs at subproject level and did not have necessary contingency provisions to mitigate the risk of input price escalations. The sector project modality was appropriate for achieving the desired outcomes, but it should have been accompanied by a strong executing agency. Therefore, despite high relevance of its envisaged outcomes, the project was rated only relevant overall. B. Effectiveness in Achieving Outcome

66. The project’s outcome as originally defined was partly achieved. Significant rise in rehabilitation costs led to a change in scope in 2004, reallocating funds from other project components to the rural water supply component to cover cost overruns. Even so, the original targets for rehabilitated RWSSs were only partly achieved. The capacity building component was reduced to match the physical infrastructure component. At project completion, the revised targets were adequately achieved: of 118 RWSSs financed, 115 were fully functional. Weak implementation in early stages led to poor sequencing of project activities and inadequate monitoring of project works. Therefore, the project is rated less effective in meeting its outcome. C. Efficiency in Achieving Outcome and Outputs

67. The mission estimated that base-case economic internal rate of return (EIRR) for the overall project was 11.4%, which is lower than appraisal EIRR estimates for 10 core subprojects ranging from 13% to 38% (Appendix 9). However, the health benefits, which could not be quantified and reflected in the analysis at either appraisal or completion stages, have been significant. Cost overruns in the project were not only related to the significant price escalation for construction inputs but also to an extended scope of rehabilitation works at each subproject level, which allowed achieving desired outcomes at subproject level.

68. Some project resources were wasted during early implementation stages when capacity building activities were started without adequate prior community mobilization, and design and construction contracts were awarded without proper prequalification of design institutes and contractors. As a result, 23 out of 80 subprojects completed by the end of 2006 were nonfunctional and project resources had to be directed to fixing the related problems. In the end, all technical and institutional issues were resolved satisfactorily by project completion and the three RWSSs not fully functional had that status because of damage from a natural disaster and nonpayment of the mandatory beneficiary contribution and not because of design or construction flaws. The project is rated less efficient in achieving outcome and outputs.

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D. Preliminary Assessment of Sustainability

69. The sustainability of a community-based project to be run by CBOs largely depends on how well the CBOs are organized and trained, their capacity to operate and manage the system, capacity and willingness of the beneficiaries to pay tariffs, and efficiency in tariffs collection. After learning lessons from poor implementation during early stages, the project RWSSs were adequately completed and the CBO personnel fully trained. The beneficiaries are satisfied with the service and willing to pay the tariffs. The average collection efficiency increased from 31% in 2006 to 46% in 2007 to 54% in 2008. Collection during the first 9 months of 2009 was estimated to exceed 60%. Considering that most of the systems have become fully operational only recently, this level of collection is satisfactory and the overall trend is encouraging. The village administration support in collecting tariffs and in other financial and administrative matters is very helpful. A key outstanding issue is lack of O&M equipment, particularly for RWSSs with long conveyance, although equipment is always available for rent. The supplementary financing includes a plan to provide O&M equipment to the RWSSs financed under the project, and it should greatly improve sustainability. A study under the project in 2009 shows that, by end-2008, about 76% of CDWUUs were assessed as sustainable. The project is rated likely sustainable.

E. Impact

70. The project has had positive social, gender, and environmental impacts. The rural beneficiaries, who enjoyed clean drinking water at their doorsteps, mostly through stand pipes, during Soviet Union times, went through much hardship in fetching poor quality water from distant sources when the water supply systems were dysfunctional during the country’s early years of independence. The project helped once again to deliver drinking water to rural villages across four oblasts. The project targeted the poor, as poverty incidence in project areas was 50% (higher than the overall incidence of 40%). Women and children have particularly benefited, as time saved from fetching water permits women to pay more attention to their families and livelihood activities and children to their education.

71. The hygiene and sanitary education program conducted through NGOs in all schools in project areas improved personal hygiene habits, leading to health and environmental improvements. Sociological surveys showed that the availability of wash stands at public places grew from 31% to 63%, hand washing with soap rose from 19% to 68%, and the number of dirty toilets fell from 41% to 19%. Waterborne diseases have been eradicated or significantly reduced. Laboratory reports show that incidence of giardiasis in children decreased from 48% to 18% and enterobiasis from 76% to 22%.

72. The project activities adhered to ADB safeguard policies. The Project was anticipated to have minimal negative environmental impact and was rated as Category B based on ADB’s classification system. An initial environmental examination was undertaken for each subproject, and the subprojects were designed and implemented in conformity with the Borrower’s national environmental impact standards (Appendix 8). Involuntary resettlement did not occur during project implementation. Community-owned land was used for communal water supply facilities in accordance with ADB’s Involuntary Resettlement Policy (1995) and applicable local laws.

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IV. OVERALL ASSESSMENT AND RECOMMENDATIONS

A. Overall Assessment

73. While the project delivered safe drinking water to almost a half million rural residents, project implementation suffered from cost overruns and weak administration. Significant rise in construction costs led to cancellation of four infrastructure components and downsizing of another. The funds saved were reallocated to the rural water supply component, which at the end achieved about half of its original targets. Weak administration contributed to poor selection and consequently to poor performance of consultants, design institutes, and contractors. By its completion, however, the project had corrected all deficiencies. Supplementary financing will help ensure sustainability of project investments and achievement of the original project targets.

74. Based on ADB’s project performance rating assessment criteria, the project is rated as partly successful.11

B. Lessons

75. The following lessons were learned from implementing the project:

(i) If there are many small subprojects, the sector project modality should be adopted only with an executing agency having strong implementation capacity.

(ii) Improving the quality of the feasibility study will minimize uncertainty in identifying subprojects and lead to more precise cost estimates. When subproject cost estimates are uncertain, adequate physical contingencies should be provided in sector projects to mitigate against potential cost overruns.

(iii) Procurement problems can be reduced by introducing prior review of procurement documents. In a sector project with many small subprojects, contracts should be grouped into larger packages to reduce the number of civil works contacts. This will help the PMUs as well as ADB to concentrate more effectively on fewer contracts. Use of clear and stringent evaluation and qualification criteria in selection of contractors should be mandatory, and establishing consortia of contractors should be encouraged.

(iv) Community participation in all stages of implementation, from identification to design to construction processes, is critical for the success of investments.

(v) The introduction of in-kind beneficiaries’ contributions should be carefully evaluated in projects where the works are done by contractors and not by the communities themselves.

(vi) Community-based projects should be implemented with more involvement of local administrations than of just the central government.

(vii) CBOs should be provided basic O&M kits to ensure sustainability of project activities.

(viii) Establishing a joint PMU at sector level can be a more efficient and cost-effective solution and help ensure a harmonized approach among the financing institutions.

11 In accordance with ADB’s Guidelines for Preparing Performance Evaluation Reports for Public Sector Operations

(2006), the overall project performance was rated based on the four core evaluation criteria (relevance, effectiveness, efficiency, and sustainability).

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C. Recommendations

1. Project Related

76. Water Quality. The Ministry of Health should ensure regular monitoring of water quality and allocate more resources on a consistent basis for this purpose.

77. Problematic Subprojects. The Ministry of Emergency Situations and Ministry of Natural Resources, in coordination with the Ministry of Finance, should address damages to RWSSs in the remaining three problematic subprojects (Appendix 3).

78. Sustainability. To ensure sustainability, the executing agency (i) along with local administration should ensure tariff adjustments over time, as well as efficiency in tariffs collection and use of collected resources for O&M; (ii) should help in organizing associations of CDWUUs while providing them support and ensuring coordination among them; and (iii) needs to ensure the provision of O&M equipment, financed by the supplementary grant, to the subprojects by 31 December 2011. 79. Timing of the Project Performance Evaluation Report. The project performance evaluation should be undertaken after completion of the project implementation financed under the supplementary grant, planned in 2013. That will provide a better picture as to the likelihood of achieving the project’s envisaged impact.

2. General

80. Key general recommendations for future community-based rural water supply projects include the following:

(i) The executing agency’s capacity for managing sector projects should be carefully evaluated.

(ii) Establishment of a joint PMU at the sector level should be encouraged. (iii) Resident mission staff should be involved in project preparation and

administration. Greater coordination at the sector level between the headquarters and resident missions through joint-venture type arrangements should be encouraged.

Appendix 1 17

PROJECT FRAMEWORK AND PHYSICAL ACCOMPLISHMENTS

Design Summary

Performance Indicators/Targets

Assumptions and Risks Accomplishments

Goal (Impact) Improve living conditions and health of the rural and urban communities by providing safe water supply and proper sanitation, and improving rural infrastructure in the three project oblasts.

Increase population coverage with access to safe and adequate water supply from existing 40 to 80% in 2006 in the project villages and towns on a self-sustainable basis. Of the 1.2 million rural and 0.3 million urban residents to be covered, about 70% are below the poverty line.

Institutional

capacities Legal changes Willingness of

communities to pay

Direct project

beneficiaries totaled 478,000 rural residents in poor areas.

The project did not cover urban areas.

Purpose (Outcome) Using a community participation approach, provide safe, adequate, and easily accessible water supply and sanitation to selected rural communities and urban towns. Improve rural infrastructure in flood control and local roads.

In the rural areas provide safe water supply to about 730 villages where there is no provision of safe water and improve water supply in seven towns including sewerage in three of these towns.

Infrastructure is not

properly managed, operated and maintained

Short construction season

Adequate time available to develop community participation

In the rural areas,

safe water supply was provided in 302 villages.

No water supply and sanitation activities were implemented in urban areas.

Outputs Part A: Physical Infrastructure Rural water supply Urban water supply Rural sanitation Urban sanitation

Flood control Local Roads

Rehabilitate and construct

water supply systems in 240 rural subprojects covering 730 villages, including 420 new systems and 310 rehabilitated systems.

Rehabilitate and improve water supply in seven towns, covering 0.3 million urban population.

Introduce proper sanitation facilities in 90 villages in each oblast. Improve 70,000 family latrines and 250 school latrines.

Rehabilitate and construct 730 public bathhouses in subproject villages.

Rehabilitate and extend the sewerage network and treatment plant in 3 towns, and improve septic tank construction and tanker purchase in two towns.

Construct flood control facilities as appropriate to protect water supply systems in 100 villages.

Improve 20 kilometers of local roads in selected villages.

Failure to set

adequate tariffs Failure to collect

tariffs

Cooperation of

community Lack of funding

available from village or rayon budget

Failure to set adequate tariffs

Failure to collect tariffs

Standards too high and too expensive

Constructed and

rehabilitated were 118 subprojects in 302 villages, including construction of 21 subprojects (in 34 villages) and rehabilitation of 97 subprojects.

Urban water supply was not implemented.

Rural sanitation was implemented in 223 villages.

Just 20 school latrines were constructed and rehabilitated.

Urban sanitation was not implemented.

Flood control was

not implemented. Local roads were

not implemented.

18 Appendix 1

Design Summary

Performance Indicators/Targets

Assumptions and Risks Accomplishments

Part B: Capacity Building Institutional development program Hygiene and sanitation education program Consulting services for project management support

Establish the National

Water Supply and Sanitation Committee (NWSSC).

Establish training facilitation centers.

Train 16,000 community

leaders, local governments, and vodokanal board members and staff.

Develop hygiene education program, and disseminate program in 90 villages in each oblast.

Inadequate support

by all ministries and departments

Failure to find educational institutes interested in participating

NWSSC was

established. Training facilitation

centers were established and 1,275 trainers trained.

Total of 8,337 community leaders and local government staff were trained.

Hygiene education program was developed and implemented in 223 villages.

Activities Part A: Physical Infrastructure Rural Water Supply Appointment of

consultants and non-governmental organizations (NGOs)

Community consultations

Physical infrastructure surveys, investigations, and designs

Construction and rehabilitation of rural water supply and sanitation facilities

Appoint and train management staff

Urban Water Supply and Sewerage

Urban water supply and sewerage surveys, investigations, and designs

Community consultations

Water supply and sewerage rehabilitation

Establish vodokanal board and train staff

730 communities to be

served 310 settlements with new

water supply systems 420 rehabilitated and new

management systems created

Seven town with rehabilitated and extended water supply systems and new management systems created, three sewerage systems extended and rehabilitated

Lack of experienced

domestic consultants Lack of suitable

NGOs Lack of experience

in ADB procurement procedures

Lack of competent construction companies

Lack of specified equipment and materials in the country

Delays in delivery and clearance of imported materials

Cooperation of

community

Training was

provided in 302 communities served.

Urban water supply and sewerage component was cancelled.

Appendix 1 19

Design Summary

Performance Indicators/Targets

Assumptions and Risks Accomplishments

Rural Sanitation Need assessment of

school toilets, public bathhouses rehabilitation or provision, domestic toilets and sludge disposal

Community consultation

Rehabilitation and construction

Other Infrastructure Need assessment of

community Survey of roads Engineering design Construction and

supervision

Program for improvement and construction of 70,000 family toilets, 250 school latrines, and rehabilitation of 730 public bathhouses Construction of flood control facilities in 100 villages and 20 kilometers of local roads in selected villages

Community cooperation and participation Community cooperation and participation

223 communities served

No family toilets constructed

20 school latrines constructed or rehabilitated

7 public bathhouses rehabilitated

No other

infrastructure (flood control or rural roads) were covered under the project.

Part B: Institutional Development Capacity Building Program

Hygiene and Sanitation Education Program Consulting Services for Project Management Support

Establishment of NWSSC

and training centers; 16,000 local governments and vodokanal staff trained

Hygiene education carried out in 90 villages in each oblast

Establish steering

committee and project monitoring unit (PMU)

Establish oblast level project implementation units (PIUs)

Train PMU and PIU staff in project management and procedures and help ADB ensure successful project implementation

Delays in

establishing PMUs and PIUs

Lack of suitable consultants willing to work in remote areas

Costs of consultants Delays in setting up

offices Project coordinator

not competent Consultants not

competent Lack of counterpart

staff

NWSSC and

training centers were established, 1,275 trainers trained, and 8,337 local government officials trained.

Hygiene education was carried out in 223 villages.

Steering committee and joint PMU were established.

PIUs were established.

PMU and PIU staff were trained.

Inputs A. Physical Infrastructure $ million

1. Rural Water Supply 23.9 2. Rural Sanitation 2.7 3. Rural Flood Control 0.7 4. Rural Local Roads 1.0 5. Urban Water Supply 5.8 6. Urban Sewerage 4.8 Subtotal (A) 38.9 B. Capacity Building

1. Institutional Development Program 1.1 2. Hygiene and Sanitation Education Program 0.4 3. Consulting Services for Project Management Support 2.7

Subtotal (B) 4.2 TOTAL 43.1 Source: Asian Development Bank.

20 Appendix 2

GEOGRAPHIC DISTRIBUTION OF WATER SUPPLY SYSTEMS

Number of Cost

Oblast Rayon SubprojectsVillages served

People served

($ per beneficiary)

Batken Batken 5 10 34,304 82 Kadamjai 5 16 14,953 99 Leilek 7 33 55,421 97 Rayon Total 17 59 104,678 93 % of Total 14 20 22 Osh Alai 8 17 23,135 117 Aravan 2 2 3,243 106 Chong Alai 1 2 4,000 55 Nookat 9 42 52,346 55 Osh 1 8 7,000 53 Uzgen 5 10 21,579 74 Kara-Suu 11 35 54,171 62 Kara-Kulji 3 5 20,725 65 Rayon Total 40 121 186,199 86 % of Total 34 40 39 Jalalabad Aksy 5 11 19,954 94 Bazar-Korgon 3 10 24,097 54 Chatkal 1 1 288 78 Nooken 8 14 17,398 87 Suzak 4 14 29,568 96 Toguztoro 2 3 13,221 96 Toktogul 2 2 2,870 98 Rayon Total 25 55 107,396 87 % of Total 21 18 22 Chui Alamdun 5 13 21,436 51 Sailyk 1 2 877 83 Jail 6 9 9,891 116 Kemin 7 12 12,182 103 Panfilov 8 11 10,091 117 Sokuluk 4 14 16,993 71 Yssykatyn 4 5 8,215 109 Moskov 1 1 220 48 Rayon Total 36 67 79,905 96 % of Total 31 22 17

Project Total 118 302 478,178 86

Sources: Ministry of Agriculture, Water Resources, and Processing Industry and joint project management unit.

Appendix 3 21

REMAINING PROBLEMATIC SUBPROJECTS A. Markaz Subproject, Kadamjai Rayon, Batken Oblast

1. The subproject was designed to provide potable water to 8,518 people in 4 villages of Markaz Village Administration. The combined construction and rehabilitation was begun in June 2003 and completed in December 2004. After completion, three villages still had shortage of water. Therefore, in 2008 the subproject was determined to be problematic and additional funds were provided to replace the faulty 4.58 kilometers of the main transmission line. As a result, the subproject was able to supply water to all intended beneficiaries. The total cost was Som14.0 million. 2. In July 2009, the water intake was washed away by a mud torrent. No flood protection for the system had been provided for in the original design, prepared in 2002 by Joint Stock Company Kyrgyzkommunproekt, as this had not been considered necessary. 3. At the request of the village administration and community drinking water users’ union (CDWUU), the rayon and oblast administrations approached the Ministry of Emergency Situations to seek funds for rehabilitating the damaged infrastructure. The Ministry, however, refused to provide funds on the basis that the original design should have provided for protection against floods. 4. The restoration of the damaged main pipeline and works to protect against recurring floods are estimated to cost Som4.2 million. It is recommended to finance these works out of funds allocated for remedial works in the new grant project, otherwise the investment made to date will have been wasted. B. Kulatov Subproject, Nookat Rayon, Osh Oblast

5. The construction was begun in June 2003 and partly completed in 2007 at a cost of Som21.8 million. The main transmission line 17.6 kilometers long provides water to 54,000 people living in 32 villages in 4 village administrations. At present, due to the lack of a regulating reservoir of 1,000 m3 capacity and a chlorination facility, the people of two village administrations (Kok-Jarsky and Toolosky) face water shortages. The incomplete works represent the 15% in-kind contribution not provided by the community. Also, the communities have not fully paid the mandatory 5% cash contribution. Of the Som1,026,000 to have been paid only Som360,000 has so far been contributed. 6. In addition to construction of the regulating reservoir and chlorination facility, some parts of the main pipeline also need to be rehabilitated and protected. The total cost of these works is estimated at Som6.0 million. 7. In July 2008, a scheme was developed to address the issue and the CDWUU, according to Asian Development Bank’s criteria, was required to collect the 5% cash contribution. After the collection, the joint project management unit (PMU) would facilitate construction of the three works. The beneficiaries have not so far collected their cash contribution in full and hence the works have not been undertaken. It is recommended that a deadline be given for collecting the full cash contribution. Then, if the funds are assembled in a timely manner, the proposed works would be financed out of the remedial funds earmarked under the new grant project.

22 Appendix 3

C. Aral Subproject, Kara-Suu Rayon, Osh Oblast

8. The subproject construction was started in April 2003 and completed in March 2004 at a cost of Som3.9 million. The system was supposed to provide potable water to Aral, Bargy, and Kodogochun villages in Papansky Village Administration. The total number of potential beneficiaries is 2,380. After completion of the subproject in 2004 the water did not fully serve the beneficiaries because of poor operation and maintenance by the CDWUU, the staff of which had not been adequately trained. A few months after commissioning, the power was disconnected due to nonpayment and later the pumping facility was stolen. Actually, the area is surrounded by two rivers and there is an abundance of water. Therefore, the beneficiaries were never keen about the facility, and the 5% cash contribution was not collected in full. The Government of the Kyrgyz Republic had wanted to implement the system, as the incidence of waterborne diseases in the subproject villages was high, but the community never developed a sense of ownership. 9. In 2008, an Asian Development Bank review mission visited this subproject and included it into the list of problematic subprojects. The CDWUU was required to collect the 5% community contribution, estimated at Som197,000. A tripartite memorandum was signed among the joint PMU, CDWUU, and village administration, pursuant to which the CDWUU and village administration would collect the 5% cash contribution after which the joint PMU would proceed to rectify all defects in the system. According to a detailed field survey of the system and design, the following works are required to make the system fully operational: (i) rehabilitation of the well and installation of pumping equipment, (ii) rehabilitation of the distribution network, and (iii) repair of the old standpipes. The total cost is estimated at Som1.9 million. 10. Up to July 2009, the CDWUU and the village administration could not collect the 5% community contribution and therefore the EA decided to abandon the remaining works, and this was communicated to the village administration and CDWUU. 11. It has been reported that in September 2009 the 5% initial community contribution was fully collected. Therefore, it is recommended that the joint PMU undertake the required works from the fund allocated for remedial measures in the new grant project.

Appendix 4 23

SUMMARY OF PROJECT COSTS

Table A4.1: Project Cost Estimates and Financing Plan by Source at Appraisal

($ ‘000)

Government and

CommunitiesTotal Total

Total ProjectCost Cost

A. Phisical Infrastructure1. Rural Water Supply 9.8 6.1 15.9 8.0 14.1 23.92. Rural Sanitation 1.2 1.5 2.7 0.0 1.5 2.73. Rural Flood Control 0.2 0.5 0.7 0.0 0.5 0.74. Rural Local Roads 0 0.7 1 0.0 0.7 1.05. Urban Water Supply 2.9 2.9 5.8 0.0 2.9 5.86. Urban Sewersge 2.6 2.2 4.8 0.0 2.2 4.8

Subtotal (A) 17 13.9 30.9 8.0 21.9 38.9

B. Capacity-Building

1.Institutional Development Program

0.1 0.0 0.1 1.0 1.0 1.1

2.Hygiene and Sanitation Education Program

0.0 0.4 0.4 0.0 0.4 0.4

3.Consulting Services for Project Management Support

1.9 0.8 2.7 0.0 0.8 2.7

Subtotal (B) 2.0 1.2 3.2 1.0 2.2 4.2

C. Interest During Construction

1.9 0.0 1.9 0.0 0.0 1.9

TOTAL 20.9 15.1 36.0 9.0 24.1 45.0

Appraisal Estimates

ADB

Item Foreign Exchang

Local Currency

Local Currency

Local Currency

Source: Asian Development Bank.

24 Appendix 4

Table A4.2: Actual Project Cost Estimates and Financing Plan by Source

($ ‘000)

Government and

CommunitiesTotal Total

Total ProjectCost Cost

A. Phisical Infrastructure1. Rural Water Supply 7.07 26.10 33.17 7.07 33.17 40.242. Rural Sanitation 0.00 0.00 0.00 0.00 0.00 0.003. Rural Flood Control 0.00 0.00 0.00 0.00 0.00 0.004. Rural Local Roads 0.00 0.00 0.00 0.00 0.00 0.005. Urban Water Supply 0.00 0.00 0.00 0.00 0.00 0.006. Urban Sewersge 0.00 0.00 0.00 0.00 0.00 0.00

Subtotal (A) 7.07 26.10 33.17 7.067 33.17 40.24

B. Capacity-Building

1.Institutional Development Program

0.02 0.12 0.14 5.37 5.49 5.51

2.Hygiene and Sanitation Education Program

0.00 0.23 0.23 0.00 0.23 0.23

3.Consulting Services for Project Management Support

2.29 1.85 4.14 0.00 1.85 4.14

Subtotal (B) 2.32 2.19 4.51 5.365 7.56 9.88

C. Interest During Construction

1.47 0.00 1.47 0.00 0.00 1.47

TOTAL 10.86 28.29 39.15 12.43 40.73 51.58

Local Currency

Local Currency

Actual

ADB

Item Foreign Exchange

Local Currency

Sources: Asian Development Bank and audit firms’ estimates.

Appendix 4 25

UTILIZATION OF LOAN PROCEEDS ($ ‘000)

Category 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total

01 Civil Works 0.000 0.000 1.743 6.346 6.075 6.293 1.951 3.550 2.533 0.192 -0.016 28.667

02 Equipment 0.000 0.000 0.056 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.056

03

Design and Construction

0.000 0.043 1.255 0.720 0.985 1.044 0.000 0.054 0.340 0.000 0.000 4.441

04 Institutional Development Program

0.000 0.007 0.023 0.003 0.022 0.037 0.000 0.000 0.047 0.000 0.000 0.139

05

Hygiene and Sanitation Education Program

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.149 0.077 0.000 0.000 0.226

06 Consulting Services 0.538 0.704 0.459 0.431 0.418 0.454 0.083 0.164 0.828 0.059 0.000 4.138

07

Interest Charge 0.000 0.007 0.020 0.077 0.165 0.239

0.290 0.332 0.344 0.000 0.000 1.474

Total 0.538 0.761 3.556 7.577 7.665 8.067 2.324 4.249 4.169 0.251 -0.016 39.141 Percentage to Total 1.37 1.94 9.09 19.36 19.58 20.61 5.94 10.86 10.65 0.64 -0.04 100.00 Source: Asian Development Bank.

25 Appendix 5

26 Appendix 4

PROJECT IMPLEMENTATION SCHEDULE

Activity 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

A. Preparatory Activities

1 Recruitment of consultants

2 Preliminary appraisal and selection of subprojects

B. Rural Infrastructure Rural Water Supply

1 Approval by ADB of selected rural subprojects

2 Evaluation of selected subprojects

3 Water supply; WUC formation and registration

4 Feasibility studies

5 Detailed engineering designs and tender documents

6 Procurement of equipment and materials

7 Approval by ADB of tender documents

8 Tendering for civil works contracts

A

ppendix 6 26

Appendix 4 27

Activity 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

9 Construction/rehabilitation of water supply works

Rural Sanitation

1 Selection of pilot sanitation activities in each oblast

2 Preparation and dissemination of improved latrine designs

3 Construction/rehabilitation of latrines and bathhouses

4 Evaluation of pilot sanitation improvements

Flood Control Measures

1 Selection of subprojects requiring flood control improvements

ACTIVITY CANCELLED

2 Preparation of designs and tender documents and approval

ACTIVITY CANCELLED

3 Construction of flood control facilities

ACTIVITY CANCELLED Local Roads

1 Selection of local roads requiring improvements

ACTIVITY CANCELLED

27 Appendix 6

28 Appendix 4

Activity 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

2 Preparation of designs and tender documents and approval

ACTIVITY CANCELLED

3 Construction of local roads improvements

ACTIVITY CANCELLED C. Urban Infrastructure

1 Approval by ADB of selected urban subprojects

ACTIVITY CANCELLED

2 Preparation of feasibility studies for five urban towns

ACTIVITY CANCELLED

3 Preparation of detailed engineering designs and tender documents

ACTIVITY CANCELLED

4 Prequalification of urban water and sewerage contractors

ACTIVITY CANCELLED

5 Approval by ADB of tender documents and prequalified contractors

ACTIVITY CANCELLED

6 Tendering for works and goods contracts

ACTIVITY CANCELLED

7 Construction/rehabilitation of urban water supply and sewerage works

ACTIVITY CANCELLED

Appendix 6 28

Appendix 4 29

Activity 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

D. Institutional Development

1 Training of municipal governments and vodokanals

ACTIVITY CANCELLED

2 Training of village governments, community leaders and WUCs

3 Development of project management staff

4 Collection and analysis of benchmark information

5 Project completion report 6 Consulting services

Legend: Appraisal Actual Source: Asian Development Bank.

29 Appendix 6

30 Appendix 7

ORGANIZATIONAL STRUCTURE FOR PROJECT IMPLEMENTATION

Central Level Oblast Level Source: Ministry of Agriculture, Water Resources, and Processing Industry and Asian Development Bank.

Steering Committee

Executing Agency

Joint Project Management Unit

Four Oblast Project Implementation Units

Village Administrations

Community Drinking Water Users’ Unions

Appendix 8 31

STATUS OF COMPLIANCE WITH LOAN COVENANTS

Covenant

Reference in Loan

Agreement

Status of Compliance

General 1. The Borrower shall make available, promptly as needed, the funds, facilities, services, land and other resources which are required, in addition to the proceeds of the Loan, for the carrying out of the Project and for the operation and maintenance of the Project facilities.

Section 4.02

Complied with.

2. In the carrying out of the Project, the Borrower shall cause competent and qualified consultants and contractors, acceptable to the Borrower and ADB, to be employed to an extent and upon terms and conditions satisfactory to the Borrower and ADB.

Section 4.03 [a]

Complied with.

3. The Borrower shall cause the Project to be carried out in accordance with plans, design standards, specifications, work schedules and construction methods acceptable to the Borrower and ADB. The Borrower shall furnish, or cause to be furnished, to ADB, promptly after their preparation, such plans, design standards, specifications and work schedules, and any material modifications subsequently made therein, in such details as ADB shall reasonably request.

Section 4.03 [b[

Partial compliance. In the early stages of implementation designs were inadequate.

4. The Borrower shall ensure that the activities of its departments and agencies with respect to the carrying out of the Project and operation of the Project facilities are conducted and coordinated in accordance with sound administrative policies and procedures.

Section 4.04 Complied with.

5. The Borrower shall make arrangements satisfactory to ADB for insurance of the Project facilities to such extend and against such risks and in such amounts as shall be consistent with sound practice. Without limiting the generality of the foregoing, the Borrower undertakes to insure, or cause to be insured, the goods to be imported for the Project and to be financed out of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable to replace or repair such goods.

Section 4.05 Complied with.

6. The Borrower shall maintain records and accounts adequate to identify the goods and services and other items of expenditure financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect, in accordance with consistently maintained sound accounting principles, the operations and financial condition of the agencies of the Borrower responsible for the carrying out of the Project and operation of the project facilities, or any part thereof.

Section 4.06 [a]

Complied with.

7. The Borrower shall (i) maintain separate accounts for the Project; (ii) have such accounts and related financial statements audited annually, in accordance with appropriate auditing standards consistently applied by independent auditors whose

Section 4.06 [b]

Complied with. Audits were done by: Auditing & Consulting Company

32 Appendix 8

Covenant

Reference in Loan

Agreement

Status of Compliance

qualifications, experience, and terms of reference are acceptable to ADB; (iii) furnish to ADB, 6 months after the end of each related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto (including the auditors’ opinion on the use of loan proceeds and compliance with the covenants of this Loan Agreement, as well as on the use of the procedures for imprest account/statement of expenditures), all in the English language; and (iv) furnish to ADB other information concerning such accounts and financial statements and the audit thereof.

“Marka Audit Bishkek”. (28 Nov 2000 – 31 Dec 2006) CJSC “W. Jacobs – Audit” (1 Jan 2007 – 30 Apr 2009)

8. The Borrower, upon ADB’s request, discuss the Borrower’s financial statements for the Project and its financial affairs related to the Project from time to time with the Borrower’s auditors, and shall authorize and require any representative of such auditors to participate in any such discussions requested by ADB, provided that any such discussion shall be conducted only in the presence of an authorized officer of the Borrower unless the Borrower shall otherwise agree.

Section 4.06 [c]

Complied with.

9. The Borrower shall furnish, to ADB reports and information as ADB shall reasonably request concerning (i) the Loan, and the expenditure of the proceeds and maintenance of the service thereof; (ii) the goods and services and other items of expenditure financed out of the proceeds of the Loan; (iii) the Project; (iv) the administration, operations, and financial condition of the agencies of the Borrower responsible for the carrying out of the Project and operation of the project facilities, or any part thereof; (v) financial and economic conditions in the territory of the Borrower and the international balance-of-payments position of the Borrower; and (vi) any other matters relating to the purpose of the Loan.

Section 4.07 [a]

Complied with.

10. The Borrower shall furnish ADB quarterly reports on the carrying out of the Project and on the operation and management of the project facilities.

LA, Section 4.07 [b]

Partial compliance. Submission of the reports was irregular.

11. Promptly after 3 months of physical completion, the Borrower shall prepare and furnish to the Bank a report on the execution and initial operation of the Project, including its cost, the performance by the Borrower of its obligations under this Loan Agreement, and the accomplishment of the purposes of the Loan.

Section 4.07 [c]

Complied with.

12. The Borrower shall enable ADB’s representatives to inspect the Project, the goods financed out of the proceeds of the Loan, and any relevant records and documents.

Section 4.08 Complied with.

13. The Borrower shall ensure that the project facilities are operated, maintained, and repaired in accordance with sound administrative, financial, engineering, environmental, and maintenance and operational practices.

Section 4.09 Complied with.

Project Implementation 14. Project Management Unit (PMU) The PMU shall be responsible for the overall implementation of the Project, including awarding of contracts in coordination with the project implementation units (PIUs). The Borrower shall ensure that the PMU is headed by a full-time project coordinator

Schedule 5 [b]

Complied with. The PMU was transformed into the joint PMU in 2008 to manage both ADB-

Appendix 8 33

Covenant

Reference in Loan

Agreement

Status of Compliance

and supported by an adequate number of staff with expertise in project implementation, engineering, financial management, community participation, and capacity building.

and World Bank-financed projects.

15. Project Implementation Units The PIUs shall assist the PMU in all aspects of project implementation and shall be the focal point for execution of the Project. The PIUs shall coordinate closely with the technical departments and agencies concerned at the oblast level. The PIUs shall initiate and coordinate key project implementation activities such as community consultations, detailed engineering designs, preparation of tender documents, evaluation of bids, awarding of contracts, procurement, construction supervision, monitoring and quality control, maintenance of project accounts, and clearance for environmental examinations.

Schedule 5 [C] [a]

Complied with. The structure was improved in 2006 by appointing a regional Deputy Director for the Southern Region.

16. Each PIU shall be headed by a project director who shall be seconded from the oblast administration concerned. The project directors shall be assisted by full-time project managers. In addition, the Borrower shall ensure that an adequate number of technical staff, whose skills are acceptable to ADB, shall be seconded to the PIUs, as needed, to assist with the rehabilitation of water supply, sanitation, flood control and drainage systems, and local roads.

Schedule 5 [C] [b]

Complied with.

17. National Water Supply and Sanitation Committee The Borrower shall establish the National Water Supply and Sanitation Committee (NWSSC) at the central level to provide policy guidance and assistance in monitoring and supervision of the overall project implementation activities.

Schedule 5 [D] [a]

Complied with delay. NWSSC was established in late 2001.

18. The NWSSC shall review the reports to be provided by the PMU and provide guidance and instructions.

Schedule 5 [D] [b])

Partial compliance. NWSSC’s coordination and guidance were weak, however, and it did not meet regularly.

19. The Borrower shall maintain the NWSSC, with composition and terms of reference satisfactory to ADB, through the project implementation period.

Schedule [D] [c]

Partial compliance. NWSSC did not meet regularly.

20. Decree on Project Implementation Within six months after the Effective Date, the Borrower shall issue a decree on project implementation, clearly specifying (i) the respective roles and responsibilities of the Ministry of Finance, MAWRPI, oblast administrations concerned, and other relevant agencies in implementation of the Project; (ii) flow of funds between such parties; and (iii) cost recovery arrangements. 21. Selection of Subprojects The Borrower shall select subprojects for subsequent appraisal in accordance with the following criteria:

Schedule 5, para. 5) Schedule 5, para. 6 [i]

Complied with. Partial compliance. During early stages of implementation

34 Appendix 8

Covenant

Reference in Loan

Agreement

Status of Compliance

A. Criteria for Selection of Subprojects I. For Rural Communities

(i) Majority of the population in the community shall have low incomes below the poverty level established by the Borrower;

(ii) Water supply schemes shall be serving multiple villages through a single water supply source;

(iii) The community shall demonstrate willingness and commitment to (a) participate in the Project and provide the necessary land, (b) establish a WUC, (c) pay for the capital cost of the water supply works in kind (labor) or cash, and (d) assume responsibility for operation and maintenance of the facilities and pay for water charges;

(iv) Water supply shall be severely limited or lacking; (v) High incidence of waterborne and excreta diseases,

poor sanitation conditions, and willingness to improve sanitation shall be demonstrated;

(vi) Use of appropriate and low-cost technology shall be preferred (e.g., development of spring sources and groundwater over surface water); and

(vii) Minimum financial internal rate of return shall be 1 percent.

the selection criteria were not strictly followed. Internal rates of return were not calculated for subprojects.

II. For Urban Communities (i) Majority of the population in the urban community

shall have low incomes below the poverty level established by the Borrower;

(ii) Vodokanals shall demonstrate willingness to participate in the Project and commit the necessary funds and land;

(iii) Water needs shall be demonstrated by (a) poor water quality, (ii) insufficient water quantity, (c) high incidence of waterborne and excreta related diseases, and (d) satisfactory initial environmental examination;

(iv) Wastewater treatment capacity per capita and substandard discharge for final effluent shall be low; cost of effective solution to problems per capita shall be low: a) minimum economic internal rate of return shall

be 12 percent; and b) minimum financial internal rate of return shall be

1 percent.

Schedule 5, para. 6 [ii]

This subcomponent was deleted due to scarcity of funds as a result of high price escalation and because priority was given to rural subprojects.

Appendix 8 35

Covenant

Reference in Loan

Agreement

Status of Compliance

22. Appraisal and Approval of Subprojects Subprojects with higher aggregate sums shall be given priority for inclusion in the Project, subject to the subsequent appraisal and approval procedures stated in the following paragraphs. Upon selection of a proposed subproject under Part A, the Borrower shall:

(i) submit to ADB an application for approval containing a description and appraisal of the proposed subproject, in each participating oblast, (a) the first large subproject, which in each instance cost in excess of the equivalent of $500,000; and (b) for the initial two proposed small subprojects, which cost, in each case, less than the equivalent of $500,000; and

(ii) for all other proposed subprojects which are small, cause the PMU to appraise such subprojects and then submit an application for approval to the NWSSC.

Schedule 5, para. 7 and 8

Complied with. A weighting system was used, and only subprojects with highest weights were selected.

Financial Matters 23. Financing of Subprojects The Borrower shall finance 90 percent of the total cost of each subproject and such financing, including the proceeds of the Loan, shall be provided through regular budgetary allocations. The remaining 10 percent of the total cost of each subproject shall be funded through cash or in kind contributions made by the communities concerned.

Schedule 5, para. 11

According with the government resolution No. 25 of August 2001, the beneficiaries’ contribution was increased. The Borrower financed 80%, while beneficiaries contributed 5% in cash and 15% in-kind. The de facto amendment to the covenant has not been reflected in any amendment letter to the Loan Agreement. While the covenant is technically not complied with, the actions of ADB over the project implementation period have in effect amended the covenant. On that basis, the covenant is treated as in effect having been amended, and complied with accordingly by the government.

36 Appendix 8

Covenant

Reference in Loan

Agreement

Status of Compliance

24. Operation and Maintenance (O&M) The Borrower shall ensure that the local governments at village level, vodokanals, and WUCs concerned operate and maintain the completed subproject facilities for water supply, sanitation, flood control and drainage, and local roads in accordance with sound administrative policies and procedures through efficient collection of user charges and other local taxes.

Schedule 5, para. 12

25. Tariffs The Borrower shall ensure that each local government concerned at village and town levels completes (i) annual reviews of the level and structure of its water tariffs and furnishes the results thereof to ADB within one month of completion of each such review; and (ii) revises its water tariffs as necessary.

Schedule 5, para. 13

26. Cost Recovery The Borrower shall cause the local governments concerned to ensure that (i) revenues from water tariffs cover capital and operations and maintenance costs, including depreciation; and (ii) full cost recovery of the subproject facilities is achieved in a staged manner over a five-year period after the completion of such facilities.

Schedule 5, para. 14

27. Billing and Collection The Borrower shall ensure that the vodokanals and WUCs take appropriate measures to effect proper collection of outstanding water bills and protect their water resources and facilities through vigorous prosecution for violations such as water meter tampering or water theft.

Schedule 5, para. 15

Complied with. Community drinking water users’ unions (CDWUUs) were trained in O&M plus tariff calculation and collection. Their performance is satisfactory. Tariff collection is improving. Tariffs are reviewed annually and are being increased gradually to fully recover costs. Social and legal means are being used against thefts and defaulters.

Other Matters 28. Water Supply to the Poor The Borrower shall ensure that each local government at village and town levels increases the supply of water to those persons who are below the poverty levels established by the Borrower by expanding the public standpipes program.

Schedule 5, para. 16

Executing agency focused on development in poor areas and widely installing public standpipes.

29. Participation by NGOs, CBOs, and Women The Borrower shall ensure that (i) relevant NGOs and CBOs are involved at all stages of subproject planning, design, construction, and operations and maintenance, and actively assist in the capacity-building, including health and hygiene components of the Project; (ii) women’s community groups participate in all relevant project-related decision-making activities; and (iii) adequate opportunities for employment of women in vodokanals and WUCs and for related activities under the Project are make available.

Schedule 5, para. 17

Complied with. Since 2006, beneficiaries actively involved in all stages of development. NGO involved in hygiene and sanitary education training. Broad participation by women, and some CDWUUs are headed by women.

30. Environmental Concerns (i) The Borrower shall ensure that (a) the subprojects are designed and implemented, and the subproject facilities operated and maintained, in strict conformity with the Borrower’s national environmental impact standards; (b) an initial environmental examination (IEE) is undertaken for each subproject in accordance with ADB’s relevant environmental

Schedule 5, para. 18 [a])

Complied with. Initial environmental examinations were prepared for all subprojects and legal requirements

Appendix 8 37

Covenant

Reference in Loan

Agreement

Status of Compliance

assessment requirements and environmental review procedures; (c) in any case, a determination is made whether or not the subproject is environmentally sensitive; and (d) the necessary governmental permits are obtained promptly. In case there are extensive concerns, an environmental impact assessment shall be prepared. (ii) The Borrower shall also ensure that the environmental examination and monitoring procedures established under a previous ADB-financed technical assistance project (TA 2934-KGZ) shall be fully utilized.

Schedule 5, para. 18 [b]

were met.

31. Project Performance Monitoring The Borrower shall ensure that the implementation of the Project, the benefits resulting from the Project, and the overall operations of the project facilities are monitored and evaluated on an annual basis. Within six months after the Effective Date, the Borrower shall further refine the project performance monitoring system, in a manner satisfactory to ADB, including the use of relevant financial and technical monitoring indicators and information.

Schedule 5, para. 19

Complied with. A project performance monitoring system was established, subprojects were monitored quarterly.

32. Project Reviews A comprehensive review of the implementation arrangements, including the role of MAWRPI and vodokanals as well as project startup experience, shall be undertaken by the Borrower and ADB one year after the Effective Date. An assessment shall be made regarding the possibility of using more decentralized implementation approach allowing the oblast administrations to gradually assume full responsibility for physical implementation of the subprojects. In addition, a comprehensive midterm review shall be undertaken three years after the Effective Date. These reviews shall focus on the impact on poverty alleviation, implementation arrangements, community involvement, physical implementation, design and technology, operation and maintenance arrangements, institutional aspects including training, hygiene and sanitation education, and the role of women. The reviews shall also assess the Project’s progress and achievement of its objectives, identify any problems encountered, and recommend any required remedial measures.

Schedule 5, para. 20

Complied with. Loan reviews were conducted regularly – annually during early stages and more frequently during later stages. Midterm review was conducted from 27 May to 8 June 2004.

33. Audit of Accounts For the purpose of complying with the requirements of the Loan Agreement regarding annual submission of audited financial statements, proceeds of the Loan may be used to finance expenditure for private sector auditors and translations of auditors’ reports into English, provided that (i) such auditors have qualifications, expertise, and terms of reference acceptable to ADB, and (ii) recruitment process is acceptable to ADB.

Schedule 5, para. 21

Complied with. Project accounts were audited annually by: Auditing & Consulting Company “Marka Audit Bishkek”. (2000 – 2006) CJSC “W. Jacobs – Audit” (2007 – 2009)

ECONOMIC EVALUATION 1. The economic evaluation was undertaken on the basis of the methodology used during appraisal to allow for comparison between the targets set at appraisal and those achieved at project completion. This analysis was undertaken only for rural subprojects (as the urban components were cancelled) and compares the costs and benefits in the cases with and without the project. The economic internal rate of return (EIRR) is estimated for the project as a whole. The analysis was based on data obtained from the Government of the Kyrgyz Republic’s project completion report, project surveys, and field visits undertaken by the project completion review mission. A. Major Assumptions 2. The economic analysis is based on the assumptions outlined in the following sections: 1. Prices 3. All prices are expressed at world market levels in the national currency. The actual and forecast farm gate commodity prices are based on world market prices published by the World Bank. These prices are adjusted to constant 2009 prices using the World Bank Manufactures Unit Value index.1 Local costs have been adjusted to constant 2009 prices based on the consumer price index for the Kyrgyz Republic2 while foreign costs have been similarly adjusted using the Manufactures Unit Value index. 4. The price of labor is assumed at Som1,000 per day, which was the prevailing price found at project completion. Taking into account the relatively high and increasing underemployment of labor, labor costs have been shadow-priced at 0.85 of the wage rates. Other inputs have been adjusted by the standard conversion factor of 1.0, following the appraisal methodology. 2. Period of Analysis 5. The project’s economic life is assumed to be 25 years, from 2001 to 2025, as at appraisal. The major project activities were implemented over 6 years, from 2003 to 2008.

3. Project Costs 6. The economic costs for the total project are based on actual investment costs incurred from 2001 to 2009 and projected recurrent costs for operation and maintenance (O&M) of project facilities. The actual investment costs were higher than at appraisal in dollar equivalent terms, primarily due to som appreciation against the dollar. Costs are expressed in economic prices by excluding taxes and duties and applying the standard conversion factor of 1.0 to the local component of costs. Investment costs are expressed in constant 2009 base prices by adjusting the local cost element by the consumer price index and the international cost component by the Manufactures Unit Value Index. O&M costs cover labor, power and fuel, and miscellaneous expenses. The average annual O&M costs are assumed to be $1.4 per beneficiary and based on the costs incurred during actual operation.

1 World Bank. 2009. Manufactures Unit Value Index. Washington. 2 ADB. 2010.Outlook 2010: Macroeconomic Management Beyond the Crisis. Manila.

38 Appendix 9

Appendix 9 39

4. Project Benefits

7. The project benefited almost 500,000 rural residents, which is fewer than the appraisal estimate of 1.2 million rural and 0.3 million urban residents. Project benefits have been derived from results of the project surveys and data on the project achievements. 8. The economic cost savings brought about by the subproject and consumer surplus likely to be generated by the schemes are part of the economic benefits. Due to insufficient data, other quantifiable benefits (such as health benefits) were not specifically quantified in the economic analysis. These can be considered part of the economic cost savings, however, since improving the health of rural people in the coverage area is a benefit from the potability of water provided by the schemes. Revenues from the imposition of water tariffs have been added to the benefit stream as consumer surplus. The water tariff was projected to increase by 10% every second year over a period of 10 years. It was assumed that, on average, it took 1.1 hours to fetch water without the project, and 0.3 hours with the project. B. Economic Performance 9. Results of the economic analysis are summarized in Table A9.2. The base-case EIRR for the entire project is estimated at 11.4%, which is lower than the 12% opportunity cost of capital. At appraisal, the EIRR was computed for 8 rural and 2 rural subprojects. For rural subprojects EIRRs ranged from 13% to 38.2%. The low EIRR is mainly due to significant cost escalation. The cost per beneficiary was $86 at completion, compared to $28 per beneficiary envisaged at appraisal. Some project resources were wasted during early implementation stages when capacity building activities were started without adequate prior community mobilization, and design and construction contracts were awarded without proper prequalification of design institutes and contractors.

40 Appendix 9

Table A9.1: Project Economic Cost and Benefits, constant 2010 Prices

(KGZ Som million )

Item 2001 2002 2003 2004 2005 2006 2007 2008 2009Number of People Served 15,870 59,313 151,879 245,521 344,074 372,466 424,375 475,307 478,178Average Annual Tariff per Person 72.372 72.372 79.609 79.609 87.570 87.570 96.327 96.327 105.960Gross Revenues 1.149 4.293 12.091 19.546 30.131 32.617 40.879 45.785 50.668 Less: Bad Debts 0.446 1.666 4.691 7.584 11.691 12.655 15.861 17.765 19.659Net Revenues 0.703 2.627 7.400 11.962 18.440 19.962 25.018 28.020 31.009 Less: O&M Expenses 1.076 3.897 9.299 14.673 19.758 20.927 22.142 24.353 28.735Net Income Before Depreciation -0.373 -1.270 -1.899 -2.711 -1.318 -0.966 2.876 3.668 2.273

Item 2010 2011 2012 2013 2014 2015 2016 2020 2025Number of People Served 482,960 487,789 492,667 497,594 502,570 507,596 512,672 533,488 560,701Average Annual Tariff per Person 105.960 116.556 116.556 128.212 128.212 141.033 141.033 170.650 227.135Gross Revenues 51.174 56.855 57.423 63.797 64.435 71.588 72.304 91.040 127.355 Less: Bad Debts 17.399 16.602 14.011 12.504 9.536 7.159 7.230 9.104 12.735Net Revenues 33.775 40.253 43.412 51.293 54.899 64.429 65.073 81.936 114.619 Less: O&M Expenses 29.023 29.313 29.606 29.902 30.201 30.503 30.808 32.059 33.694Net Income Before Depreciation 4.752 10.940 13.806 21.391 24.698 33.926 34.265 49.876 80.925

Source: Project Completion Review Mission’s estimates.

Appendix 9 41

Table A9.2: Economic Internal Rate of Return (EIRR) (KGZ Som million)

Item 2001 2002 2003 2004 2005 2006 2007 2008 2009Investment 82.851 207.494 394.722 391.952 396.996 111.071 188.675 186.893 12.150O&M Cost 1.076 3.897 9.299 14.673 19.758 20.927 22.142 24.353 28.735Total Cost 83.927 211.391 404.021 406.625 416.754 131.998 210.817 211.246 40.885Consumer Surplus 1.149 4.293 12.091 19.546 30.131 32.617 40.879 45.785 50.668Economic Cost Savings 6.006 22.555 57.772 93.886 131.615 143.302 163.334 184.100 189.961Time saved 0.580 2.275 6.118 10.385 15.281 17.369 20.779 24.436 30.484Savings on water purchase 5.426 20.279 51.654 83.501 116.334 125.934 142.555 159.664 159.477Total Benefits 7.154 26.847 69.863 113.432 161.745 175.919 204.213 229.885 240.629

Net Benefits -76.773-

184.544-

334.158-

293.194 -

255.009 43.921 -6.604 18.640 199.744

Item 2010 2011 2012 2013 2014 2015 2016 2020 2025

Investment 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000O&M Cost 29.023 29.313 29.606 29.902 30.201 30.503 30.808 32.059 33.694Total Cost 29.023 29.313 29.606 29.902 30.201 30.503 30.808 32.059 33.694Consumer Surplus 51.174 56.855 57.423 63.797 64.435 71.588 72.304 91.040 127.355Economic Cost Savings 193.400 195.674 199.363 201.742 205.707 208.202 212.474 227.464 248.040Time saved 32.328 34.284 36.358 38.558 40.891 43.364 45.988 58.168 78.026Savings on water purchase 161.072 161.390 163.004 163.184 164.816 164.838 166.486 169.296 170.014Total Benefits 244.574 252.529 256.786 265.540 270.142 279.790 284.777 318.504 375.395

Net Benefits 215.552 223.216 227.180 235.637 239.941 249.286 253.969 286.445 341.700 EIRR 11.40%

Source: Project Completion Review Mission’s estimates.

Appendix 9 41