World Bank Document · 2016. 8. 29. · PART It PROJECT REVIEW FROM THE BANK'S PERSPECTIVE A....

Document of

The World Bank

FOR OFFICIAL USE ONLY

Repot No. 8642

PROJECT COMPLETION REPORT

MALAWI

LILONGWE WATER SUPPLY ENGINEERING PROJECT(CREDIT 1272-MAI)

MAY 7, 1990

Infrastructure Operations DivisionSouthern Africa DepartmentAfrica Regional Office

This doeument has a restricted distribution and may be used by recipients only In the performance oftheir offiial duties. Its contents may not otherwise be disclosed without World Bank authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS

Currency Unit - Malawi Kwacha (MK)US$1.00 = MK 1.08 (June 1982)US$1.00 - MK 2.73 (June 1989)MK 1.00 - 100 TambalaSDR 1.00 u US$1.11 (1982)

MEASURES AND EQUIVALENTS

1 meter (m) = 3.28 feet (ft)1 millimeter (mm) , 0.039 inch (in)1 kilometer (km) = 0.62 mile (mi)1 square kilometer (km2) = 0.386 square mile (sq mi) - 247 acres (ac)1 liter (1) - 0.26 US gallons1 imperial gallon (Ig) - 1.2 US gallons - 4.55 liters (1)1 cubic meter (m3 ) = 220 ig = 264.2 US gallons1 liter per capita per day (lcd) G 0.2642 US gallons per capita per day1 million imperial gallons per day - 4,546 m31d

PRINCIPAL ABBREVIATIONS AND ACRONYMS

BWB - Blantyre Water BoardDLVW - Department of Lands, Valuation and WaterGOM = Government of MalawiLCSU - Low Cost Sanitation UnitLUB = Lilongwe Water BoardMWS = Ministry of Works and Supplies

(until the end of March 1988, then subsequentlyrenamed Ministry of Works [MOW])

MLG = Ministry of Local GovernmentODA = Overseas Development AdministrationOPC = Office of the President and CabinetPMF a Probable Maximum FloodPMP 3 Probable Maximum Precipitation

FISCAL YEAR (FY)

July 1 to June (1982)April 1 to March 31 (1989)

FOR OFCL US ONLYTHE WORLtD SANK

W.shtton. DC. 20433U.S A

O a CA OItawmtnefl

Kay 7, 1990

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report on MalawiLilongwe Water Supply Engineering Project(Credit . 27 2-MAI)

Attached, for information, is a copy of a report entitled "ProjectCompletion Report on Malawi - Lilongwe Water Supply Engineering Project (Credit1272-MAI)" prepared by the Africa Regional Office with Part II of the reportcontributed by the Borrower. No audit of this project has been made by theOperations Evaluation Department at this time.

Attachment

Thisdocument haansmdi*fbuot andmy be wO byrxpDbmu onlbye pofofnnimeof tetowoAcW dufieaIt conunu may nsotherwin be dfkamd wkoul Worid Bankutau"nsfion.|

FOR OMCIL USE ONLYMALAWI



TABLE CF CONTENTS

Page No.

PREFACE ........................................................... iEVALUATION SUMMARY ................................................ ii

PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE

A. Project Identity ............................................. 1B. Project Background ........................................... 1

Sector Development Objectives and Policy Context ......... 1C. Project Objectives and Description ............................ 2

Project Objectives ...................................... 2Project Components ...................................... 2

D. Project Design ............................................... 3E. Project Implementation ....................................... 4F. Major Results of the Project ................................. 5G. Project Sustainability ....................................... 6H. Bank Performar-e ............................................. 6I. Borrower Performance ......................................... 6J. Project Relationship ......................................... 6K. Consulting Services .......................................... 7L. Project Documentation and Data ............................... 7

PART II: PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE

A. Introduction ................................................. 8B. Project Preparation and Analysis ............................. 9C. Project Implementaiton, Operation and Cost - The Master

Plan for Water Supply and Sanitation ......................... 9The Feasibility Study - Water Supply Stage 1 .... ........ 11Project Detailed Design ................................. 13Provision of Management Staff Support for LWB .... ....... 16Provision of Vehicles and Other Equipment .... ........... 17Urban Low-Cost Sanitation Demonstration Project .... ..... 17Provision of Management Staff Support Costs for OtherSectoral Organizations ................................ 17

Review of Sectoral Training Needs ....................... 17D. Project Costs and Disbursement ............................... 17

Introduction ............................................ 17Cost Comparison - SDR ................................... 17Comments on Expenditures ................................ 18Cost Comparison in Malawi Kwacha ........................ 20On-Lending to Lilongwe Water Board ...................... 21

E. Conclusion ................................................... 22

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

TABLE OF CONTENTS (Cont.)

Page No.

PART IIIs STATISTICAL INFORMATION

1. Related Bank Loans and/or Credits ....... ................. .... 232. Project Timetable ............................................ 243. Credit Disbursements ......................................... 254. Project Implementation ....................................... 265. Project Costs and Financing ............... # .................. 27

A. Project Costs ............ .. ........................ 27B. Project Financing ... ................ ............... 28

6. Project Results ........ ...................................... 29A. Direct Benefits ...................... ............... 29B. Economic Impact ................. ................... 29C. Financial Impact ................. .................. 29D. Studies ............................................ 30

7. Status of Covenants .......................................... 318. Use of Bank Resources ........................................ 32

A. Staff Inputs ................. .. .................... 32B. Missions ........................................... 33

ANNEXES

ANNEX I - Decription of the Project ........ .. ................ 34ANNEX II - Final Cost Analysis - IDA Resources ..... ........... 35ANNEX III - Final Cost Analysis ............... ................. 36ANNEX IV - On-Lending Repayment Schedule ...................... 39

- i -

MALAWI

LILONGVE WATER SUPPLY EN6INEERING PROJECT (CREDIT 1272-MAI)


PREFACE

This is a report on the completion of the Lilongwe Water SupplyEngineering Project in Malawi, for which a credit of SDR 3.6 million(US$4.0 million) equivalent (Credit 1272-MAI) was approved in September1982. The Borrower was the Government of Malawi (GOM). US$3.6 millionequivalent of the credit was on-lent to the Lilongwe Water Board (LWB), theimplementing agency, at 122 per annum (p.a.) interest rate over 25 years,with a 5-year grace period. The credit was closed in June 1987, one yearlater than the original closing date of June 1986. Closing of the creditwas delayed to accommodate revisions in the feasibility study and tocomplete the low-cost sanitation component. At the time of the draft PCRpreparation in early 1987, the project had been completed for more than 18months. There was a cancellation of SDR 257,212 due to some componentseither being omitted or charged elsewhere.

The PCR was jointly prepared by the Infrastructure OperationsDivision of the Africa Regional Office (Preface, Evaluation Summary, PartsI and III) and the Borrower, (Part II).

Preparation of this PCR was started during the Bank's finalsupervision mission of the project in 1987, and is based, inter alia onthe Staff Appraisal Report; the Credit, Guarantee, and Project Agreements;supervision reports; correspondence between the Bank and the Borrower; andinternal Bank memoranda.

- ii -

MALAWI

LILONGWE WATER SUPPLY ENGINEERING PROJECT (CREDIT 1272-MAI)


EVALUATION SUMMARY

ObJective

The project's purpose was to enable the Government of Malawi andLWB to formulate long-range water supply, sewerage and sanitation programsfor Lilongwe. LWB was also to be strengthened through improved management,financial control and cost recovery. The project was also intended toassist the Government of Malawi to develop appropriate technologies forsewerage and sanitation and to assess the sector's organizational, manpowerand training needs.

(page 2, para 4)

Implementation Experience

The components of the project's design give evidence of a well-conceived approach, which was well executed in a timely manner,particularly on the water supply engineering side. Nevertheless, therewere several areas where project design might have been improved withbeneficial results for implementation:

(a) Negotiations with the engineering consultant would probablyhave improved performance for the client if the new LWBmanagement team had been in place prior to negotiation.

(b) The inclusion of low-cost sanitation studies (outside theresponsibility of LUB or LBS's consultant) complicatedadministration of the credit by LWB and _ontributed to thedelay in credit closing.

(c) The terms of reference for the Master Plan component areconsidered by LWB management to have been morecomprehensive than required to address Lilongwe's watershortage.

(page 3, paras 6 & 9)

In general, the technical aspects of the work appear to havebeen very well-handled. However, project implementation was delayed byover six months, as a result of developments following the review of thedraft Master Plan and the draft Feasibility Study. In both instances, thedrafts as presented were technically optimal although there appeared to bean inadequate appreciation on the part of the consultant of affordabilityand financial viability.

(page 4, para 10; page 5, para 16)

- iii -

Results

The Engineering Credit achieved its specific objectivesessentially within budget with respect to Water Supply:

(a) A Master Plan was produced.

(b) A Feasibility Study was carried out.

(c) An engineering design and contraci documents were producedleading to the Phase III Lilongwe Water Supply Project.

(d) An engineer/manager and a financial controller wereemployed.

The credit also supported employment of a low-cost sanitationadviser and the development of a demonstration project, as well as thesupply of equipment and software to LWB.

(page 5, paras 18, 19)

Sustainebility

Not applicable.

Findings and Lessons Learned

Terms of Reference for Master Plans and Feasibility Studies needto be carefully drawn in order to avoid the higher cost of wide-rangingstudies much of which may be peripheral to project purpose. It is alsodesirable to ensure that there is an emphasis on financial viability andaffordability in both the Master Plan and the Feasibility Study.

(page 3, para 9(c); page 10, para 38)

MALAWI

LILON¢WE WATER SUPPLY ENGINEERING PROJECT(CREDIT 1272-MAl)


PART It PROJECT REVIEW FROM THE BANK'S PERSPECTIVE

A. Proiect Identity

- Project Name: Lilongwe Water Supply Engineering Project- Credit Number: 1272-MAI in the amount of SDR 3.6 million

(US$4.0 million equivalent)- RVP Unit: Africa- Country: Malawi- Sector: Water Supply

B. Proiect Background

1. Sector Development Objectives and Policy Context. In the late1970's, the Goverrment of Malawi (GOM) accepted the International DrinkingWater Supply and Sanitation Decade's goal of universal safe water by 1990.While nearly all the population of the major cities of Blantyre andLilongwe was projected to have access to safe water in the mid-1980s, therapid growth of the urban population, estimated to be groving at 7.6Z p.a.,was anticipated to require new investment in water supply systems to meetthe demand of the late 1980's.

2. Lilongwe, in particular, has experienced rapid growth, from apopulation of about 19,000 in 1966 to an estimated 150,000 in 1980, with350,000 projected for the year 2000. This growth has been caused mainly byimmigration to Lilongwe because of its designation in the late 1960's asthe new administrative capital of Malawi and as a focal point for theregion's accelerated development in agriculture, commerce and indastry.

3. The principal organizations in the sector at the time of projectcommencement in early 1983 were the Department of Lands, Valuation andWater (DLVW) under the Office of the President and Cabinet (OPC), and thewater boards in Blantyre and Lilongwe. The Lilongwe Water Board (LWB)operates Lilongwe's water supply system but was dependent upon DLVW fortechnical planning, design and construction management. Although LWB wasestablished in 1947, until 1982 it functioned essentially as a municipaldepartment under the Lilongwe City Council, prior to its establishment as astatutory body under the Department of Statutory Bodies in the Office ofthe President and Cabinet. Sewage collection and treatment and sanitationremain as responsibilities of Lilongwe City Council.

- 2-

C. Proiect Objectives and Descrilption

4. Project Objectives. The project's purpose was to enable theGovernment of Malawi and LWB to formulate long-range water supply, sewerageand sanitation programs for Lilongwe. LWB was also to be strengthenedthrough improved management, financial control and cost recovery. Theproject vas also intended to assist the Government of Malawi to developappropriate technologies for sewerage and sanitation and to assess thesector's organizational, manpower and training needs.

5. Project Components. The Project comprised the followingcomponents:

a) Master plans for the long-range development of water supplyand sewerage and sanitation in Lilongwe;

b) A feasibility study, including field investigation,detailed engineering design and prep&ration of contractdocuments for the next phase (designated as Phase III) ofLilongwe's water supply development;

c) Provision of the services of an experiencedEngineer/Manager and a Chief Accountant for LWB andmanagement support for other activities in the sector;

d) A pilot project to demonstrate low-cost, appropriatesanitation technology in Lilongwe;

e) Procurement of equipment and supplies essential forpreparation of the Lilongwe (Phase III) Water SupplyProject and support of the pilot, low-cost sanitationcomponent;

f) Assessment of the sector's manpower and training needs,including recommendations for a training program;

g) A study of the sector's organization and, if necessary,assistance to Government to develop and review proposalsfor reorganization or improved coordination within thesector.

-3-

D. Proiect Design

6. The components of the project's design give evidence of a well-conceived approach, particularly on the water supply side.

7. The consultant's Terms of Reference were drawn up inconsiderable detail by DVLW with assistance from the Bank and UNDP in 1980.The main objective was "to develop master plans outlining the optimumprogram for the expansion and development of Lilongwe's water supply andsanitation systems to the year 2005 .

8. The project was clearly and logically structured to include:

(a) A Master Plan for water supply in two stages: 1990-1997 and1997-2005.

(b) A Feasibility Study followed by detailed design for thefirst stage of major expansion (Phase III).

(c) Addressing of management needs of the newly-created LWB.

(d) Provision of vehicles and other equipment related toproject execution for LWB.

(e) Recognition that water supply and sanitation are linked, byproviding a low-cost sanitation study and pilot project,including construction materials.

9. Although the project was well-conceived, there are neverthelessa few areas where, in retrospect, the project design might have beenimproveds

(a) It would have been preferable for the new LWB professionalmanagement to have been in place prior to initialconsultancy award. The advantage would have been greaterpractical, professional experience available during thepreparation of the terms of reference and the negotiationof the contract. The disadvantage, however, would havebeen further delays to the project in a period ofanticipated critical water shortage.

(b) The inclusion of low-cost sanitation studies which areoutside the management responsibility of LWB, and were alsooutside the terms of reference of LWB's consultant,complicated the administration of the credit from LWB'sperspective. Delays in the low-cost sanitation programcontributed to the delay in credit closing.

(c) The terms of reference for the Master Plan component areconsidered by LWB management to have been morecomprehensive and wide-ranging than required to address theissue of Lilongwe's water shortage.

-4-

E. Proiect Imlementation

10. Project implementation was delayed by over six months, as aresult of developments following the review of the draft Master Plan andthe draft Feasibility Study.

11. Master Plan development co.mmenced in March, 1983. The draftMaster Plan was completed and presented in October 1983. The Master Planconfirmed a two-stage development of Lilongwe's water supply and sanitationsystems meeting the demand from l990-97 and from 1997-2005. However, theoverall proposal, while technically optimal, was not financiallyaffordable. Following review by a Bank mission in December 1983, theConsultants presented a revised Master Plan in February 1984 which wasapproved in April 1984.

12. Work on the feasibility study for the water supply componentcommenced in April 1984 using the same consultants, and a draft feasibilitystudy was presented in August 1984. The feasibility study includedinvestigation of the need for strengthening the existing Kamuzu Dam andenhancing its flood carrying capacity; in addition, a stop-gap augmentationof water treatment capacity by 5,000 m3/d was included. However, theproposal in the feasibility study which was over-designed was neitheraffordable nor financially viable and necessitated significantmodifications to bring the total capital cost of the Phase III expansiondown to MK26 million from MK 37 million as presented in the feasibilitystudy, including remedial work to the Kamuzu Dam.

13. The reduction in Phase III cost was obtained by:

(a) building the new dam in two stages, with the first stage tolast until 1997 at which time the height would be raised byan additional 5 meters.

(b) downsizing the desi n capacity of the proposed treatmentworks from 42,000 m /d to 32,000 m3/d on the basis of aless optimistic forecast with respect to growth in percapita consumption as a result of conservation awareness.

(c) eliminating a technically desirable western ring main.

(d) reducing treated water storage volumes by 302.

14. The revised cost of Phase III included provisions for therehabilitation of the Kamuzu Dam, but did not include the 5,000 m31denhancement of water treatment capacity.

15. Detailed design of Phase III commenced in March 1985;invitations for prequalification of contractors were advertised with anoutstanding response (over 113 companies from 24 countries) received byOctober, 1985; draft contract documents and cost estimates were virtuallycomplete in February 1986, at which time the proposed Phase III project wasappraised by the Bank.

- 5 -

16. In general, the technical aspects of the work appear to havebeen very well handled. However, there appears to have been an inadequateappreciation on the part of the Consultant of the two related aspects ofaffordability and financial viability although this requirement was clearlyenunciated in the Terms of Reference. This aspect of project design isaccentuated because Lilongwe is a very extensive city geographically with alow population density leading to high transmission and distribution costs;it is also the capital of a nation with one of the lowest per capitaincomes in Africa. Furthermore, the financial condition of LWB wascomparatively weak as it had been only marginally profitable for many yearsprior to achieving autonomy in 1982.

17. A minor delay in project implementation occurred in theappointment of LWB management. It had been anticipated that anEngineer/Manager and a Chief Accountant would be appointed by December1982. Appointments were made to these positions only in April, 1983.Although the Project was initially under DLVW until LWB management were inplace, it was necessary for the Bank to encourage full transfer ofresponsibility from DLVW to LWB.

F. Major Results of the Project

18. The Engineering Credit achieved its specific objectives withrespect to Water Supply -

(a) A Master Plan was produced.

(b) A Feasibility Study was carried out.

(c) An engineering design and contract documents were producedleading to the Phase III Lilongwe Water Supply Project.

(d) An engineer/manager and a financial controller wereemployed.

19. The Engineering Credit also supported the employment of a low-cost sanitation adviser and the development of a demonstration project.Equipment was provided to LWB, including a computer and software support,which enabled LWB to update its billing and inventory control procedures.

20. The provision for Sector-Wide Manpower training was notutilized, as it was agreed that this area was already addressed by otherstudies conducted for the GOM. Specific training needs of LWB werereviewed with the assistance of the Bank, and support obtained fromOverseas Development Administration (ODA) to implement the trainingprogram.

21. All of the above was accomplished essentially within budget, theoverall underspending being principally the result of not proceeding withthe sector organization and training needs assessment study.

-6-

6. Pro1ect Sustainabili&Z

Not applicable.

U. Bank Performance

22. The Bank appears to have performed well in terms of itssupervision missions; its role in review of the Master Plan and theFeasibility Study so as to achieve an affordable, financially viableproject was clearly of considerable benefit. The Bank was also ofsignificant assistance to LWB to identify its training needs and to obtainfunding from ODA for implementation of the program that emerged to meetthese needs. There is some question, though, as to the advisability ofincluding under the same credit components that were outside theresponsibility of the executing agency, that is, the low-cost sanitationprogram under DLVW and later the Ministry of Works and Supplies (MWS).Coordination of the program proved to be somewhat difficult.

I. Borrower Performance

23. In general, the Borrower was in compliance with the Credit andProject Agreement covenants and conditions. However, some delays wereexperienced by the Bank in 1983 and 1984 in the receipt of quarterlyprogress reports. Reporting performance subsequently improved afterdiscussions with LWB by the Bank.

J. Project Relationship

24. It was reported in August 1983 that

(a) due to unavoidable delays in appointing Engineer/Managerand Financial Controller of LWB, DLVW commendably initiated '.

and entered into contract with the Consultants. InitiallyDLVW were reluctant to hand over responsibility to LWB (asprovided in the Credit Agreement). DLVW and LWP eventuallyagreed that DLVW would retain overall responsibility forthe Master Plan (Phase I of the Consultancy) and LWB wouldassume full responsibility for the Water Feasibility Study(Phase II) effective November 1, 1983. This and thepreviously mentioned delay in reporting are the onlyevidence of difficulty in project relationships, whichgenerally appear to have been very positive.

(b) The Low Cost Sanitation Unit (LCSU) reported to DLVW untilthe latter was abolished on January 1, 1985. Consequently,LCSU was transferred to the Ministry of Works and Supplies.

-7-

K. Consulting Services

25. The Consultants mobilized rapidly and efficiently. Theydeployed a full range of skills to the field and completed their work onschedule and within budget. The principal reservation is that insufficientattention was paid to affordability and financial viability in thepreparation of the draft Feasibility Study.

L. Project Documentation and Data

26. The President's Report provided a useful framework especially inthe absence of an appraisal report. Other relevant information on theproject was adequately documented; the supervision reports wereinformative. Part II of the PCR, drafted by the borrower, wascomprehensive and well presented.

LILONOWE WATER SUPPLY ENGINEERING PROJECT(CREDIT 1272-NAfl


PART II: PIOJECT REVIEW FROM THE BORROWER'S PERSPECTIVE

A. Introduction

27. This project falls within the Public Utilities Sector. The mainobjective was to study the need to expand and develop Lilongwe's watersupply and sanitation system to the year 2005.

28. The executing agency, Lilongwe Water Board (LWB), is aparastatal organizrtion responsible for public water supplies to the cityof Lilongwe. LWB is a body corporate, incorporated under the WaterworksAct (Cap 72:01), and from 1987 under the Lilongwe Waterworks Act 1986 (Cap72:04). The Board consists of a Chairman and ten members, all of whom areappointed by the Minister.

29. LWB was established in 1947, and was originally composed ofthree Government nominated members. After independence in 1964 the Boardwas re-constituted with 10 members. At that time the Board was under theumbrella of Lilongwe Town Council. In 1982 the Board was separated fromLilongwe City Council and became a statutory body, under the Department ofStatutory Bodies in the Office of the President and Cabinet.

30. Prior to 1983 LWB had limited resources in terms of experiencedprofessional staff and this expertise was provided by the Department ofLands, Valuation and Water (DLVW). Thus it was the DLVW that prepared theterms of reference and was party to the Agreement with the Consultants forthe Master Plan and Feasibility Study.

31. By the time of commencement of the Feasibility Study the LWB hadreceived an infusion of senior professional staff, and from that timeonwards the consultants reported to the Board.

32. Historically, economic development was concentrated in the southof Malawi particularly around the largest urban centre of Blantyre-Limbeand, with the seat of Government being the nearby town of Zomba,development in the Central and Northern Regions tended to lag. Sinceindependence in 1964 the Government of Malawi has sought to redress thisimbalance in numerous ways, including the transfer of the administrativecapital from Zomba to Lilongwe in the Central Region. Prior to thistransfer Lilongwe had been a relatively small regional centre of some16,000 inhabitants but by 1983 it had become not only an administrativecentre but an important focal point for agricultural, commercial,industrial and allied activities with a large, modern international airportnearing completion. The city's population had grown equally rapidly and in1983 was estimated to be some 140,000. This rate of population increase(approximately 8Z per annum) had thrown a heavy strain on the City's watersupply system and the late 1970's and early 1980's were years of increasingshortages and failures in the system.

- 9 -

33. The public water supply system had developed over many yearswith the first being constructed in 1958 using a run of the river source.In 1966, the Kamuzu dam was constructed on the Lilongwe River and a newtreatment plant was built within the city boundary. Further expansion tookplace in the following years and by 1975 water production capacity wasnominally 14,000 m3 /d. This plant continued to serve the city and by 1983,under overload, it was producing some 20,000 m3/d but failing to meetdemand. In 1980, an emergency augmentation scheme had been initiated withthe objective of adding 10,000 m3 /d to the treatment capacity by 1982. Inthe event, due to a variety of factors beyond the control of LWB, thisaugmentation scheme was not commissioned until 1984 by which time 30,000m3/d was barely sufficient to meet the city's peak requirements.

B. Project Preparation and Analysis

34. The dramatic increase in the City's water requirements in the1970's and its implications relating to future needs had not beenoverlooked by those responsible for planning who forecast a population of350,000 at the turn of the century. The first step in the direction awayfrom ad hoc solutions was a report in 1980 by the UNDP entitled "Long TermDevelopment of Lilongwe Water Supply - A Preliminary Appraisal". Thisreport was brief but it highlighted the need for source enhancement,increase in production and distribution capacity, long term planning andmajor strengthening of the Lilongwe Water Board's infrastructure. The UNDPreport was followed in February 1983, by the engagement of Consultants toperform the studies and designs which are the subjects of this report.

35. The project was structured to include the following elements:

(a) Consultancy Services for the production of a masterplan(including sanitation and sewerage), a feasibility study,and detailed design for a construction project to follow.

(b) provision of vehicles and other equipment for LilongweWater Board to carry out its role on the Project.

(c) A low cost sanitation study and pilot project includingconstruction materials.

(d) The provision of management staff support costs for othersectoral organizations.

(e) A review of the sectoral training needs.

C. Project Implementation, Operation and Cost - The Master Plan forWater Supply and Sanitation

36. Initially, Consultants prepared a Master Plan for Lilongwe'swater supply and sanitation needs to the year 2005, it being considered

_ 10 -

that the two facilities are interlinked and cannot be developed entirely inisolation. The draft of this Master Plan was presented in October 1983seven months after the commencement of work and was accompanied by thirty-two working papers. Subsequent to a review of this draft a supplementaryworking paper was produced which embodied suggestions and modificationsagreed during the review.

37. The terms of reference prepared by DLVW set out in considerabledetail an extensive schedule of topics which the Consultints were requiredto study in the preparation of their Master Plan report. In addition, theConsultants were also required to investigate and report upon the safety ofthe existing Kamuzu Dam which had been suspect for a number of years. Theterms of reference were well prepared and left the Consultant with nodoubts as to the extent of his commitments which in turn pei.mittedrealistic and accurate planning prior to commencement.

38. The main objective of the study as described in the terms ofreference may be summarized as being to 'Develop Master Plans outlining theoptimum programme for the expansion and development of Lilongwe's watersupply and sanitation systems to the year 2005.' The use of the word*optimum" in this summary is to be noted as it was to have a considerableimpact on future events. The wide ranging fields of study called for bythe terms of reference required the Consultant to mobilize twentyprofessionals all of whom were in Malawi for some part or all of the periodMarch - October 1983. For the sociological studies the Consultants werefortunate in obtaining the services of two Malawians - one a Professor andthe other a graduate of sociology. All other members of the Consultant'sprofessional staff were expatriates and most had considerable overseasexperience.

39. It is to be noted that whilst the LWB's de jure area of servicew&s limited to the somewhat vaguely defined boundaries of the old town, defacto service areas covered the whole of 'greater' Lilongwe. In physicaldimension Lilongwe is a large city extending from the suburban community ofLumbadzi north of the new airport to the old town boundary some 35 km tothe south and at its widest is nearly 11 km from east to west. The percapita cost of servicing about 450 persons/km2 must inevitably be high andthis became the major factor influencing the development of the project.

40. The Master Plan report was accompanied by four volumes ofappendices containing the working papers with each volume containing agroup of papers on closely allied subjects vizs

Vol 1 Base data and water resources (7 papers)Vol II Water supply. Existing, stop gap requirement

and future (8 papers)Vol III Sanitation. Existing and future (10 papers)Vol IV Financial, organization and management (7 papers)

41. The Master Plan concluded that water supply development shouldbe implemented in two stages (though three stage development was consideredas an option). The first should be operational by 1990 and reach its

- 11 -

design capacity by 1997 with the second stage commissioned in 1997 and besufficient until 2005. In addition a stop gap measure was necessary tomeet demands until 1990. It was recommended that the proposal for thefirst stage development should be carried into a feasibility study withoutdelay and that immediate steps be taken to reinforce the LWB's managementby means of recruitment and training. The principal areas of studyrecommended to be developed at feasibility level were:

(a) strengthening and repair of the existing Kamuzu Dam;

(b) enhancement of the water source as the risk of failure ofthe Kamuzu reservoir was unacceptably high even at the thencurrent levels of abstraction;

(c) detailed descriptions and preliminary designs of allcomponents of a new treatment works, pumping stations,reservoirs and pipelines to serve the city until 1997;

*d) refinement of the managerial, organizational and legalrequirements of the LWB;

*e) financial and economic analysis of capital and operationalcosts.

42. In their draft Master Plan the Consultants had, in accordancewith their brief, devised an optimum scheme for the development of thecity's water supply in terms of sizing, staging of construction, technicalquality and long term overall economy. However, in the course of formalreview in December 1983 a number of issues were raised some of which wereof sufficient importance in the view of the World Bank and clients towarrant re-appraisal of certain aspects of some of the working papers.Further, at this time the World Bank representatives intimated that adeferment of post feasibility financing until the financial year 1987 couldnot be avoided and that, consequently, project implementation would have tobe re-scheduled. The most important issues arising from the review of theworking papers were the population projections, growth rates in per capitawater consumption in the various population sectors and the affordabilityof both the proposed route of the transmission lines linking the southernand northern sections of the city and proposed service reservoircapacities. These constraints were duly taken into account in asupplementary working paper submitted in February 1984 which was formallyapproved in April 1984 and became the basis for the Feasibility Study.This scheme was inevitably less than the optimum envisaged by theConsultants in terms of flexibility and security of supply but neverthelessrepresented a sound beginning to long term development of the city's watersupply.

43. The Feasibility Study - Water Supply Stage 1. TheConsultants commenced work toward the end of April 1984 with their briefcalling for a study of the first stage to 1997 of a two-stage water supplydevelopment with design criteria as approved in the Master Plan

- 12 -

supplementary working paper. Also included was a study of the existingKamuzu Dam. Sanitation studies did not proceed beyond the Master Plan.

44. Work proceeded expeditiously as the Consultants staff were verylargely those who had prepared the Master Plan. A major component of thestudy was the selection of the most advantageous dam site from sixteenalternatives which had been identified previously and to ensure that theelimination of other possible sources, e.g. Lake Malawi, was justified.Four dam sites were eventually selected as having sufficient merit towarrant detailed study. A water treatment plant having a design capacityof 45,000 m3/d was brought to preliminary design stage with its proposedlocation adjacent to and upstream of the existing waterworks. Thetransmission pipe system, booster pumping stations and reservoirrequirements were also brought to a similar level of refinement. KamuzuDam was further investigated and it was confirmed that there was an urgentneed for strengthening the concrete spillway structure and that its floodcarrying capacity probably needed enhancement to meet current estimates ofmaximum floods. Finally cost estimates were prepared and subjected tofinancial analysis.

45. The draft was presented in August 1984, some seventeen monthsafter project initiation and the expenditure of one hundred man-months ofConsultants' input. Since the study had been made in Malawi wLth veryclose liaison betwef the LWB and the Consultants the engineering designaspects of the study were well established and acceptable at the time ofpresentation. Financially, the proposed scheme was less acceptable as therevised cost estimates indicated that capital expenditure (totalling MK37million in December 1983) would demand tariff increases beyond the abilityto pay of most of the population and beyond the Goverranent's permissiblemaximum.

46. There followed a period of intensive technical review in whichfive modified versions of the proposed scheme were prepared. Each of theseversions embodied modifications and/or omissions designed to reduce capitalcosts whilst still providing for the city's water needs at a reasonable ifnot ideal level. After comparative evaluation of these options a sixthversion was developed from them and this was found to be acceptable bothfinancially and technically. Essentially the deviations from the draftproposals were:

(a) the dam would be built in two stages with the first toserve until 1997. The long term wisdom of this is open toquestion as the initial saving was estimated to be a modestMKl.l million and the cost of raising the height of the damby 5m post 1997 will be many times this amount;

(b) per capita water consumption was assumed to remain constantuntil 1991 and thereafter growth rates would be lower thanpreviously projected. This permitted the design capacityof the proposed treatment works to be reduced from 45,000m3/d to 32,000 m3/d;

- 13 -

(c) wherever possible component construction should be stagedand every non-essential component or part of a componentshould be excised;

(d) the technically desirable western ring main was finallyeliminated and reliance placed upon a central north-southspine main. Provision for fire flows would be reduced anda 102-152 drop in supply pressures would be accepted duringdaily peak demand hours;

(e) treated water storage volumes would be reduced by about30S.

47. These modifications were duly applied to the scheme proposed inthe draft Feasibility Study and resulted in a scheme with an estimatedtotal cost of MK26 million in constant December 1983 Kwacha. This sumincluded the remedial work to the Kamuzu Dam which has been incorporatedinto the project but excluded the cost of the stop gap scheme to bridge theperiod up to commissioning of Stage I construction. The time required forimplementation was estimated to be one and a half years from commencementof detailed design to award of the first construction contract followed bya two- or three-year construction period. The scheme thus modified wasaccepted as being the best possible in the circumstances but it wasrecognized by all concerned that technically it was less than ideal.However, the modified scheme would produce water meeting all appropriatestandards of quality and would be adequate in terms of quantity well intothe next decade. It would permit standards of service during its earlyyears equal to those set out in the Feasibility Study but these standards,as regards pressure and adequacy of supply, would decline in the mid-1990sif either the population projections or per capita demands have been underestimated. Operationally, the scheme will be less flexible and less securethan the originally proposed scheme and it will require higher standards ofsupervision to achieve optimum overall efficiency.

48. The project moved into the detailed design phase in March 1985with the same Consultants being re-appointed to act for the LWB. Includedin the Consultants' brief was the design of the stop-gap scheme which wasto take the form of a 5,000 m3/d permanent extension to the existingwaterworks using as far as possible surplus equipment remaining from theaugmentation scheme which had been commissioned in 1984.

49. Project Detailed Design. The Consultants commenced work inMarch 1985 mobilizing a team of eight professionals in Malawi whosefunction was to carry out investigations and surveys and prepare basicdesigns and documents which would then be refined and detailed to contractdocument level in the Consultants' head offices in Canada and Australia.

50. Extensive site investigations confirmed that the preferred damsite had been well chosen structurally, and that the abundance of suitableearth, sand and rock virtually on site would make a zoned earthfillstructure impounding 9 x 106 m3 most attractive economically. Previous

- 14 -

detailed hydrological work and operation studies had established thereliability of the Lilongwe River's resources as more than adequate tosupply the citv well into the next century given proper regulation but thatthe existing Kamuzu Dam with an active storage of 4.5 x 1 0 m3 had a 1 in 6years risk of serious shortfall with a water supply demand of 30,000 m3/d.(A serious shortfall being defined as the ability to supply only 75Z ofdemand over a period of three peak months). During the Master Plan andFeasibility studies spillway design floods had received less rigorousattention, it being considered that the traditional approach was sufficientat those stages, i.e. an extrapolation of the frequency analysis ofobserved floods to the 10,000 year flood. This approach yielded a flood of1,100 cumecs and was in fair agreement with the design capacity of 1,300cumecs believed to have been used for the Kamuzu Dam spillway 6 kmupstream. However, there is always uncertainty associated with thistraditional approach which is caused by the need to extrapolate the curveto a point far beyond any observed data and therefore the more modernconcept of the Probable Maximum Flood (PMF) resulting from the ProbableMaximum Precipitation (PMP) was used to estimate the spillway design flood.This approach also requires subjective judgments but does take into accountrecorded extreme events which could conceivably be translated to theLilongwe catchment such as the cyclonic storm which precipitated over SOOmmof rain in Zomba on 14 December 1946. The PMF thus estimated was 2,300cumecs and this was the design flood adopted for both the new dam and themodification of Kamuzu Dam. The design of the new treatment works followedconventional lines with vertical spindle pumps drawing river water from wetwells. Two forebays only were allowed for as opposed to three asoriginally proposed but sizing is such that forebay and well will serveefficiently for very much larger future pumps. A raw water pre-settling/balancing tank has been provided but the design of the treatmentprocess was to be the subject of a separate contract against a performancespecification with the associated civil work being carried out as aprovisional item in the civil construction contract. Booster pumpingstations, transmission mains and reservoirs are of conventional design withtank designs and capacities being replicated as far as possible.Transmission main design was assisted by a computer analysis of thereticulation system. The major work required at Kamuzu Dam was determinedto be the raising of the embankments by 1.5 m and the insertion of eighteenvertical, stressed tendons along the spillway crest plus grout injectionthroughout the length of the mass concrete spillway body and thereplacement of the bucket at the spillway toe. No work was done in 1985 onthe 5,000 m3/d extension to the existing waterworks, this being largely dueto the uncertainty of finance availability.

51. In all, draft contract documents were prepared for eightcontracts viz:

Contract A Dam Construction and Remedial Works to the KamuzuDam

Contract B Construction of Civil Works at Water TreatmentSite

- 15 -

Contract C Supply and Installation of Water Treatment Plant

Contract D Supply and Installation of Pumps, Motors andAssociated Equipment

Contract E Construction of Reservoirs, Water Towers andPumping Stations

Contract F Supply of Pipes, Valves and Fittings forTransmission Mains (Steel or Ductile Iron)

Contract G Supply of Pipes, Valves and Fittings forDistribution Mains (PVC1

Contract H Installation of Transmission Mains

The Conditions of Contract in each case were the appropriate FIDIC documentand the World Bank/ADB Sample Bidding Documents were used as guidelinesthroughout tender document preparatiou. Concurrently, an invitation topre-qualify was prepared covering all eight contracts and this -asadvertised internationally in August and September 1985, with applicationsbeing required to conform to the FIDIC standard pre-qualification form. ByOctober 15, valid applications totalled 350 from 113 companies representing24 different countries. At the end of November an appraisal report waspresented to the LWB in which 182 applications from 19 countries wererecommended for approval. This recommendation was accepted and laterendorsed by the World Bank.

52. The draft contract documents and cost estimates were virtuallycomplete at the beginning of February 1986 and during that month anappraisal mission from the World Bank visited Lilongwe. At the same time,as required by the World Bank two independent experts were brought toLilongwe by the LWB with assignments to examine the design of the proposeddam and the associated hydrology. The criticisms resulting from theexamination of the new dam design were generally minor but constructive andafter discussion with the Consultants, a suggestion that the internaldrainage system be increased was agreed and the cross sections of thechimney and finger drains were accordingly slightly modified. Thehydrological examination addressed the issues of the reservoir evaporation,sedimentation, spillway design flood magnitude, operational analysis andthe optimization of the conjunctive use of Kamuzu Dam and the new dam. Theconclusions reached concurred with those of the Consultants in all issuesexcept that of probable maximum flood which in the experts' opinion shouldbe in the order of 1,900 cumecs, i.e. 400 cumecs less than the Consultants'estimate. However, both parties admitted to a degree of uncertainty and itwas agreed that the higher flood magnitude should stand. In the otherareas of the Project the Consultants' draft designs attracted very littleadverse criticism.

53. Financial aspects of the proposed scheme were studied inconsiderable detail by the appraisal mission and whilst their conclusionwas favorable to Project implementation it contained the proviso that a

- 16 -

six-year construction/disbursement profile should be adopted and that the5.000 m3 /d extension to the existing waterworks should be in operation byJune 1988. The introduction of a six-year construction programmenecessitated considerable re-planning as previously three years had beenallowed for construction with final disbursements being made at the end ofthe fourth year. For the new programme a two-phase approach was proposedwith the dam being constructed in the first phase spanning the three years1987-89 and the balance of the work being started in 1990 withcommissioning in the third quarter of 1992. Also, in consequence of thechange, Consultants' input had to be re-scheduled to take into account thetwo-year lag in contract award and the extended period of supervision.

54. Tenders for the construction of the new dam and repairs to theKamuzu Dam (Contract A), were invited in June 1986 and from the twenty-fourpre-qualified contractors fourteen bids from eight countries were receivedon 7 August. The spread of bid prices was wide, ranging from MK12.0 toMK23.9 million with five bids being only slightly above or less than theConsultants' estimate of MK14.7 million. A tender evaluation report wasprepared by the Consultants and submitted to the LWB in the first week ofSeptember 1986. The Consultants' recommendation that Contract A should beawarded to the lowest bidder was accepted by the LWB and endorsed by themto the Malawi Government and the World Bank. The formal contract betweenthe LWB and the recommended contractor was executed in February 1987 with acompletion period of twenty-two months and a commitment to commence storagein the wet season of 1988/89.

55. In June 1986, the Consultants began to investigate in detail theproposed 5,000 m3/d extension to the existing waterworks which was tobecome known as Section D. Preliminary work required a considerable amountof on site checking as the new work had to marry with the older which hadnot been designed to accept an extension. The utilization of surplusequipment remaining from 1980/84 augmentation scheme proved complicated assome items were incomplete and others in an unusable condition. TheConsultants then recommended that a contract be negotiated with a supplierto provide and install the balance of the equipment required for theclarifiers and filters. This recommendation was based upon the need forhaste and the fact that the original designer and supplier of the surplusequipment F'ad once been part of the same group. This procedure wasapproved and a contract was negotiated with and awarded in March 1987 withoffshore funding being provided under the IDA credit. The Consultantsprepared the contract documents for the civil works and from locallyestablished contractors received only one tender in July 1987. This tenderwas accepted and the contract awarded in September 1987 with a completionperiod of seven months. At this point the two contracts for Section D werehanded over to the LWB who then undertook the supervision of constructionusing their own staff.

56. Provision of Management Staff Support for LWB. The creditfinanced the salaries and benefits for an expatriate Engineer/Manager andFinancial Controller over the 4-year period commencing in April 1983.

- 17 -

57. Provision of Vehicles and Other Equipment. Initially the mainitem bought under this provision was the computer for the billing system.As it subsequently became clear that funds remained available the followingadditional items were purchased:

(a) two pick-ups

(b) water meters for the replacement programme

(c) water meters test bench

(d) mobile leak detection meter

58. Urban Low-Cost Sanitation Demonstration Project. The Governmentof Malawi and the World Bank agreed to undertake an Urban Low CostSanitation Demonstration Project, executed through the Department of Water,in the Ministry of Works and Supplies, and the Technology Advisory Group atthe World Bank. A full time Sanitation Advisor was attached to theproject, and the component is continuing under the on-going Second LilongweWater Supply Project (Cr. 1742-MAI).

59. Provision of Management Staff Support Costs for Other SectoralOrganizations. During the credit negotiation stage, it was

agreed by IDA and the Malawi Government that this provision in part D (ii)of Schedule 2 of the Credit Agreement was unnecessary, and no funds weretherefore expended on it.

60. Review of Sectoral Training Needs. This element in part E ofSchedule 2 of the Credit Agreement, was also agreed to be unnecessary inthe light of other reports commissioned independently by Malawi Governmenton the subject.

D. Project Costs and Disbursement

61. Introduction. The project was financed by an IDA credit to GOMin the amount of SDR 3,600,000 which at that time approximated to USS4,000,000. Of this amount, up to USS 3,600,000 was to be on-lent to LWB byGOM in Malawi Kwacha at historic rates of exchange, at 122 p.a. interestrate over 25 years, including a 5-year grace period.

62. Cost Comparison - SDR. Actual disbursements in SDR against theSDR 3.6 million credit have been compared to the amounts allocated inSchedule 1 of the Credit Agreement with Government dated 25 May 1982.The results of this comparison are:

- 18 _

AMOUN (§OR)NUMBER ITEM DESCRIPTION ALLOCATION SP UHDER/(OVER)

1. Supply of:

(a) construction mateirlal 70,000 0 70,000

(b) vehileso, flow meteringequipment and miscel-lInous equipment andsupplies 860,000 281,412 98,568

2 Consultants' and advisors'services and managomntstaff support:

(a) for Perts A, B, andD (1) of the Projoct- th Prle ents 2,490,000 2,977,791 (487,791)

(b) for Parts C, 0 (2) andE of the Project- Sanitation and otherelements 80,000 103,686 22f,414

8 Unallocated 860,000 0 360,000

8,600,000 8,842,789 297.2-'

A description of the project as set out in Schedule 2 of the aboveAgreement has been attached as Annex I and detailed expenditure schedulesas Annexes II and III. In June 1988 the World Bank statement indicated anundisbursed balance of SDR 257,212.04 which was then formally cancelled.This relates to the actual total under-expenditure above.

63. Comments on these expenditures are as follows:

(a) Construction Materials: These relate to the low costsanitation project and, although funds were expended, noreimbursements were claimed through this project.

(b) Vehicles, etc.: Because of the high costs incurred onconsultancy, and the strength of the US Dollar against theSDR, expenditure on equipment, other than the computer forthe billing system, was delayed to ensure that the otherelements of the project could be fully funded. In 1986187it became clear that funds would be available anddisbursements were made, but time did not permit theexpenditure of the full allocation.

- 19 -

tc) ConsultancZ and Management Staff Support - LWB: These maybe broken down as followss

SDRAllocated Spent Under/(Over)

Consultancy - 1,339,000 1,612,294 (273,294)Study

DetailedDesign 857,000 1,006,440 (149,440)

ManagementStaff Support 294,000 359,057 (65,057)

TOTAL 2,490,000 2,977,791 (487,791)

These figures have been derived from prorating the more detailedfigures in the World Bank President's Report dated May 26, 1982.

5d) Master Plan and Feasibility Study: The contract awardedfor the consultancy for the master plan and feasibilitystudy was much more costly than anticipated. This appearsto have come about due to a possible misinterpretation ofthe World Bank guidelines for the selection of consultants.A two-stage procedure was adopted, but the financialproposals do not appear to have been adequately considered.The fees accepted were thus very high. The extent of thestudy is also considered to have been too wide ranging withno account taken of previous similar studies. These twofactors combined to result in a very expensive consultancy.Savings were made against the original contract whichreduced the over-expenditure here to 202.

Ie) The Detailed EngineerinR Design Consultancy was negotiatedby LWB (as opposed to the situation above where GOMnegotiated the agreement). Significant reductions in unitcosts in real terms were achieved. Additional items suchas the design of the Section D works were also included(SDR 23,000) which reduced the over-expenditure on thisphase to 142, which, given the strength of the inflationfactor since the time of the original estimates, is notunreasonable.

(f) Management Support Costs

Ci) Denomination of the US Dollar for theEngineer/Manager's contract when the US Dollar wasstronger than originally forecast. The original

- 20 -

project costing was at SDR 1 - US$ 1.10 which slippedto 1.06 in July 1983, 1.02 in July 1984, 0.95 inMarch, 1.01 in July 1985, before weakening in 1986.

(ii) The necessity of paying the salary and benefits (SDR11,000) for the Financial Controller for 4 months in1987 from this credit because of the lateeffectiveness of the following credit (Cr. 1742-MAI).

(g) Low Cost Sanitation: Only one claim was made for thiselement of the project throughout its life, amounting toUS$ 105,000 or SDR 103,586. This was due to the failure ofthe mechanisms within Government for claiming reimbursementof expenditure incurred by Government Departments.

64. Cost Comparison in Malawi Kwacha: The estimated expenditure onthe project in Malawi Kwacha terms was derived from an annex to the WorldBank President's Report dated 26 May 1982. On these estimates the creditfigure of US$ 4 million or SDR 3.6 million was based, using an exchangerate of US$ 1 - MK 1.8.

The outturn costs are set out as:

Number Item Description Estimate Actual Cost Under/(Over)Local Foroipr Local Foreign Lo I cFaoreign

1 Consultancy:(a) Master Plan and

Feasibilliy Study 201 1848 472 2119 (271) (771)(b) Detale d DesIgn 100 862 261 1989 (161) (1127)

2 Managment Statt Support(a) Lilongwe Water Board 67 296 110 681 (43) (385)(b) Other Sector

Organizations 21 98 0 0 21 98

8 Equipment and Supplies 0 806 111 646 (111) (340)

4 Sector Organizationand Training NeedAssement 10 91 0 0 1 0 91

6 Low Cost Sanitation 80 274 n/a 189 80 a8

Base Costs 479 8276 944 6824 (465) (2348)

Contingencies:Phyiecal 69 409 0 0 59 409Price 148 716 0 0 148 718

Tot.al Costs 68e 4400 944 s624 = t122I

(a) In general, foreign costs are very much higher in Kwachaterms because of the numerous devaluations over the period.These resulted in an average SDR/MK exchange rate of 1.68against the original figure of 1.22 giving rise to over-expenditure on foreign costs incurred of K1.5 million.

- 21 -

This figure reconciles to the net over-expenditure above ofMK1.2 million if the under-expenditure in SDR of 257,000 at1.22 is taken into account.

(b) Local expenditures have in general been under-estimatedtaking into account the very high levels of inflation inMalawi over the period 1983 to 1986.

In addition vehicles worth MK111,000 were purchased by GOM from localresources rather than IDA funds as originally envisaged.

65. On-Lending to Lilongwe Water Board: Under the on-lendingagreement LWB was expected to repay to GOM full costs of the project withthe exception of those relating to sanitation and other sectoralprogrammes. Following the LWB's budget discussions in February/March 1988it was agreed that the Government would take over all costs in respect ofthe Master Plan and Feasibility Study. This decision, whilst pragmatic inthat it allowed a lower tariff increase to be awarded, also recognized thatthese studies took in areas which did not only relate to LWB, such as thesanitation master plan, and were far more ambitious and costly than wouldhave been undertaken by the Board on purely commercial grounds.

66. In assessing the amount to be borne by Government the costs ofconsultancy, management support and vehicles relating to these studies werededucted from the on-lending. Amounts funded by Government in respect ofthe Design stage were added into the on-lending. Interest has beencapitalized on the IDA input to provide the Government loan principal whichmay be summarized as follows:

MKTotal drawn down from IDA 5,624,101.59Total Malawi Government expenditure 633,381.81

6,257,483.40Less Borne by GOM:

Relating to master plan and feasi-bility study -2,775,244.23

Relating to sanitation -189,429.92

3,292,811.25

Add capitalized interest 637,584.28

3,930,395.53

A repayment schedule for the revised loan from GOM is attached as Annex IV.

- 22 -

E. Conclusion

(a) the initial consultancy for the Master Plan and FeasibilityStudy is considered to have been excessively wide rangingand expensive, and could have been negotiated down.

(b) it would have been more appropriate if the ManagementSupport Staff could have been in post before theformulation of the terms of reference for the consultancyand its award.

(c) it would have been preferable to have avoided the inclusionin the credit of organizations and programmes outside theresponsibility of the executing agency.

- 23 -

MALAWI

LILONGME WATER SUPPLY ENGINEERING PROJECT(CREDIT 1272-MAl)

PART IIIs STATISTICAL INFORMATION

1. Related Bank Loans and/or Credits

LoanlCredit Year ofTitle Purpose Approval Status Comments

Credit 711-MAI Increase 1977 Completion ClosingBlantyre Water Blantyre in July 1984 date Sept.Supply Project Water Supply 30, 1983.

Projectclosed in1984; PCRin June,1986.

Credit 1742-HAI Expand Lilongwee's 1986 In progressSecond Lilongwe water supply toWater Supply meet the demandProject to 1997

_ 24 -

2. Proiect Timetable

Item Date Date DatePlanned Revised Actual

Identification 08/80(Executive ProjectSummary)

- Preparation 09/81

- Appraisal Mission 04182 n.a.

- Credit Negotiations 05/82 05/24-26/82

- Board Approval 05/82 06124182

- Credit Signature 06/82 09127/82

- Credit Effectiveness 07/82 12/17/82 02102/83

- Award consulting 02/831/ 03/31/83services contractfor engineering

- Consultants submit 09/83 10/21/83draft Master PlanReport

- Consultants submit 10/84 08/84draft FeasibilityReport

- Consultants begin 01/85 03/85 03/85detailed design

- Consultants complete 07/85 08/85 02/86design andpreparation ofdocuments

- Credit Closing 06/30/86 06/30/87

- Credit Completion 12/31/85 12/31/86 10/27/87

1/ All subsequent dates based on Attachment to Agreed Minutes of Negotiations.

- 25 -

3. Credit Disbursements

Disbursements (US $ '000)

Appraisal Actual Actual Z ofBank Fiscal Year Estimate Cumulative Estimated

1983 400 0 0

1984 1,500 1,300 86.7

1985 3,200 1.700 53.1

1986 4,000 2,998 75.0

1987 - 3,340 83.5

1988 3.606 90.2

Date of Final Disbursement 10127187

- 26 -

4. Project Implementation

Appraisal Actual (orIndicators Estimate PCR Estimate

Rate of Return Not applicable Not applicable

- 27 -

S. Prolect Cost. and Ftnanela

A. Proltct Cst.

Awrailso Estimate Actual

LocI Exchange Total Local Exchange TOTALcat" coot. Coot cost Cost COSTS

Mastor Plan StdiesWater supply St 412 658 - 62S 525Spg. and Sanitation 92 1SS 107 - lOt 1Os

Feassb I ty StwdyWater Supply 107 604 711 174o 1,145 1,819

Engineering Osigm 107 824 931 142 1,101 1,248

Oe_mtrtlon Project 82 1S5 187 - -Ibnagmnt sat se 830 428 64 $9; 469

Sector Orgnlantion andTraining Needs Assessmn 11 67 98 - 20 20

Equlpent and Supplies _4 865 489 54 816 870

ASE COSTS 525 8,012 8,587 484 3,607 4,041

Physical Contingeetes 64 87s 442 - - -Price Contlngencies 161 610 771 -- - -

TOTAL COSTS 750 4,000 4,750 484 3,607 4,041

o Include Magur Plan local coo".

- 28 -

B. Prolect Financing

Planned(Credit

Source Agreement) Final Conments(US$'000) (US$'000) (Z)

IDA 4,000 3,607 90.2

Government of Malawi 750 434 57.9*

Total 4,750 4,041 85.1

* Actual Local expenditure of MK693,000 compares with MK810,0000 planned.

_ 29 -

6. Proiect Results

A. Direct BenefitsThis sectiou is *Not Applicable* as this is an Engineering Credit.

B. Economic ImpactThis sectien is -Not Applicable* as this is an Engineering Credit.

C. Financial Iv2actThis section is "Not Applicable' as this is an Engineering Credit.

_ 30 -

D. Studies

Purpose asDefined at Impact ofAppraisal Status Study

Master Plan

Water Supply compare costs and Completed Formed basisbenefits of for Feasibilityalternatives. Study.Recommend optimumprogram of long-term supply.

Sewerage and Compare costs and Completed Basis of low-Sanitation benefits. Recommend cost pilot

pilot study. sanitationprogram.

Feasibility Study - identify Phase III Completed Formed basisWater Supply Vater Supply for Engineering

Project, incl. Design.financingstructure.

Engineering Design prepare detailed Completed Phase IIIengineering Projectdesigns and commenced -bidding documents Credit 1742 -for Phase III MAI.Project.

Demonstration Project construct and Completed Construction ofdemonstrate sanitarylow-cost low-cost wastesanitation disposal

systems inprogress.

Manpower Development recommend training Not proceeded LWB needs wereand Training Study measures for LiB; with. identified with

sector-wide Bank assistancetraining strategy and funded

through ODA.

- 31 -

7. Status of Covenants

Brief Description Sectionof Covenants Applicable Compliance Remarks

The Borrower was generally incompliance with all applicablecovrenants.

- 32 -

S. Use of Bank Resources

A. Staff Inputs(Staff weeks)

Stage of Planned Revised FinalProject Cycle 09 Field HQ Field HQ FlO£a Comments

Through Appraisal -- -- -- -- 16.7 9.8

Appraisal ThroughBoard Approval -- -- -- -- 4.5 --

Board ApprovalThrough Effectiveness -- -_ -- -- 2.1 --

Supervision -- -- -- -- 30.7 10.4

Total -- -- -- -- 54.0 20.2

- 33 -

8.* Ulesions

Stago of Month/ mholer of Doyl in Specialization Pertoranme Types ofProject Cycle Year Persons Field Roeresented Ration Status Problems

IdentificationThroghEffectivoness

02/79 1 6

08/79 1 1 Sanitary Enneer -sr

08/80 1 S Sanitary Engineer -

02/01 1 S Sanitary Engineer -

04/O 1 1 4 Sanitary Engineer -

07/81 1 C Sanitary Engineer -

08/81 1 1i Financial Analyst ASanitary Engineer -

Supervision

Supervislon 1 02/03 1 3 Sanitary Engineer 1

Supervision 2 07/83 2 2 Financial nalyst a 1 ManagementSanitary Engineer

Supervision 8 12/83 2 7 Financial nalyst I 1Sanitary Engineer

Supervision 4 02/84 1 6 Sanitary Engineer 1

Supervision C 12/34 1 a Sanitary Engineer 1



Supervision 5 07/85 1 2 Training Specialist -

Supervision 9 08/8C 2 4 Financial Analyst & 1Sanitary Engineer

- 34 -

ANNEX I

MALAWI


DESCRIPTION Or THE PROJECT

The project consists of studies to assist in the future development of theborrower's water supply and waste disposal sector and is comprised of thefollowing main components:

Part A A master plan for the long-range development of water supply,sewerage and sanitation in Lilongwe;

Part B A feasibility study - including field investigation, detailedengineering designs and preparation of contract documents forthe initial stage of a Lilongwe water supply project;

Part C A pilot project to demonstrate appropriate low-cost sanitationfacilities and practices;

Part D Provision of management staff support for:

a. Lilongwe Water Board, and

b. Other entities in the water supply and waste disposalsector;

Part E Studies to assess the needs of the Borrower's water supply andwaste disposal sector relative to organization, manpower andtraining.

- 35 -

AIE II

MALAWI

LILONOWE WATER ENGINEERING PROJECT(CREDIT 1272Z-AI)

FINAL COST ANALYSIS - IDA RESOURCES

_ US SOR MK

Consultancy -Master Plan end Feasibility Study 1,669,719.77 1,695,116.69 2,110,908.29

Consultency -Detlled Design 1.100.746.38 1.008.440.34 1.9658134.92

Total Consultancy 2,770,468.10 2,601,566.93 4,072,042.92

Management Support Costs 395,187.98 859,057.44 881,821.92

Sundry Equipment 815,810.94 261,410.84 646,118.87

Others 19,918.71 17177.63 85,1956.46

Total Lilongw. Water Board Portion 8,501,338.72 3,239,201.84 6,434,673.67

Sanitation 10S.000.7 _ 103.S86.12 189.427.92

Total Expenditure from IDA Funds !A=& = .69

FINAL COST ANALYSIS - LOCAL RESOURCES

me LWB TOTALM1 MK UK

Consultancy -Master Plan 220,687.49 .00 220,887.49Feasibility Study 216,685.84 34,643.18 21.1328.00

Total Consultancy 437,372.33 84,648.16 472,015.49

Management Support Costs 84,692.52 24,968.89 109,661.41

Sundry Equipment 111,816.96 .00 111,816.96

Others .00 .00 .00

Total Lilongo Water Board Portion 888,881.81 59,612.05 692,993.88

Sanitation .00 .00 .00

Total Expenditure from Local Funds 2 ! IMM!!:05

MALAWILILONGWE WATER SUPPLY ENGINEERING PROJECT

(CREDIT 1272-MAI)

FINAL COST ANALYSIS

DATE CLAIM PAYEE DESCRIPTION EXPENSE US$ SOR NUNO. TYPE

11.07.83 162 RobertsonLapp4er May/July Salarles N/Supp 16827.01 15827.80 19186.4607.07.83 3 Stanley Int. Working Capital Advance Cons.NP 454232.00 426937.96 517534.2023.08.83 4 Stanley Int. Local Involce Incorrectly Cons.nP 6159.29 5855.51 7098.05

paid, deducted from claim 1024.08.83 5 Stanley Int. Invoices 1:3 Cons.MP 288241.85 273217.61 331194.3906.09.83 687 Robertson/Lapper Aug/Sept Salarles "NSupp 11192.16 10710.71 12983.51

8 Number omitted from series21.09.83 9 Stanley Int. Invoice 4 Cons.1nP 85704.4fl 81412.86 105189.5907.10.83 10 Stanley Int. Invoice S Cons.nP 48159.90 45199.34 58399.8707.11.83 11112 Robertson/Lapper Oct/Nov Salaries n/Supp 10693.06 10174.28 13813.6207.11.83 13 Stanley Int. Invoice 6 Cons."P 102476.04 97504.30 132381.5906.12.83 14t15 Robertson/Lapper Dec/Jan Salaries N/Supp 10674.97 10218.60 13873.7928.12.83 16 Stanley Int. Invoice 7 Cons. NP 105732.07 101442.08 137727.91

17 Number omitted from series24.02.84 16819 Robertson/Lapper Feb/nor Salaries N/Supp 10496.21 9942.47 13826.45 w15.03.84 20 Stanley Int. , Invoice a:1O Cons.MP 193438.71 181562.69 252489.3616.04.84 21&22 Robertson/Lapper Apr/Nay Salaries N/Supp 10595.15 10016.31 14065.8718.05.84 23 Stanley lot. Involce 11:13 Cons.NP 5192.76 50032.55 70617.5725.ut.84 24625 Robertson/Lapper Jun/Jul Salarles N/Supp 10463.13 10172.61 14443.0710.07.84 25a L.W.B. Relbursement n/Supp 1644.50 1609.43 2316.45

26 Number omitted from series17.0a.84 27 Statley Int. Invoice 14 Cons.NP 66138.07 64821.54 95170.992S.07.84 28 Stanley Int. Involce 15 Cono.NP 55304.70 54390.93 78991.9512.09.84 29 Stanley Int. Involee 16 Cons.JP 94100.42 93748.86 138682.6912.09.a4 30 Lapper Aug/Sept Salary w/Supp 3713.29 3699.42 5472.5512.09.84 31 Robertson AugJSept Salary "ISupp 6666.67 6641.76 9825.1601.10.84 32633 Robertson/Lapper Oct/Nov Salaries N/Supp 10379.96 10450.66 15571.4801.10.84 34 Stanley lat. Ijvolce 17 Cons.MP 30985.93 31196.98 46483.5023.11.84 35636 Robertson/Lapper Dec/Jan Salaries n/Supp 10126.53 10138.44 15173.1913.02.85 37138 Robertson/Lupper Feb/Mar Salaries N/Supp 9968.17 10381.40 16008.12

SUBTOTAL CARRIED FORWARD 1706007.03 1627307.lO 2138521.38

0QZ

o~ H

DATE CLAIM PAYEE DESCRIPTION EXPENSE US$ SDR "KNO. TYPE

SUBTOTAL BROUGHT FORWARD 1706007.03 1627307.10 2138521.3804.03.85 39 Stanley Int. Invoice 18 Cons.MP 31590.00 33086.47 51379.9824.04.85 40&41 Robertson/Lapper Apr/May Salaries n/Supp 10030.69 10118.85 17791.9803.06.85 42&43 Robertson/Lapper Jun/Jul Salarieo M/Supp 10030.69 10040.15 17845.3630.07.85 44 Stanley Int. Invoice 19 Cons.nP 55563.55 54705.91 95566.6507.08. a5 45 Robertson Aug/Sept Salary n/Supp 6666.67 6518.95 11466.3507.0a.85 46 Robertson Oct Salary & Gratuity etc. MI/supp S1410.26 50271.12 88423.1907.08.85 47 Lapper Aug Salary & Gratuity etc. H/Supp 22491.34 21P92.98 38684.0308.08.85 48 Stanley Int. Invoice 19 ConB. DE 383318.10 373367.85 659287.6619.09.85 49 Stanley lat. Invoice 20 Cons.DE 22845.37 22280.94 40745.3420.09.85 50 U.s. Claim no.1 Sanit. 105000.00 103586.12 189427.9222.10.85 51 Stanley Int. Invoice 21 Cons.DE 110251.29 103480.56 189338.3829.11.85 52 Stanley Int. Invoice 22 Cone.DE 74046.42 69026.27 126821.9f29.11.85 53 I.C.L. Computer Equip. 77979.31 72692.52 133557.9413.12.85 54 Stanley Int. Invoice 23 Cone.DE 7375.75 6814.90 12467.18 103.01.86 55 Lapper School Fees U/Supp 2408.00 2261.96 4159.97 w31.12.85 56 Lapper Nov/Jan Salary H/Supp 4556.23 4164.40 7658.75 -.31.01.86 57 Stanley lat. Invoice 24 Conos.DE 76046.33 69506.39 127829.1931.01.86 58 Robertson Jan/har Salary N/Supp 6666.67 5996.57 11168.01 131.01.86 59 Lapper Feb/har Salary n/Supp 3044.20 2738.22 5099.6624.03.86 60 Robertson Apr/May Salary P/Supp 6666.67 5806.19 11306.9726.03.86 61 Jolly Hydrologist 0th 9412.60 8308.12 16179.2302.04.86 62863 Stanley Int. Invoice 25&26 Cons.DE 168139.72 147982.54 293848.9325.04.a6 64 Lapper Apr/May Salary M/Supp 2842.44 2430.82 5039.6S06.05.86 64a Lapper . School Fees N/Supp 5250.12 453a.a4 9445.7405.05.a6 65 L.W.B. Vehicles Equip. 14521.98 12554.56 26127.2930.04.86 66 Robertson May/Jun Salary n/Supp 6666.67 5734.39 11916.0628.05.86 67 Stanley Int. Invoice 27 Cons.DE 35823.90 30970.51 65257.9604.06.86 68 Castle Meters Meters Equip. 31503.66 273,05.21 57794.2130.06.86 69 Xent neters Waste Trailer Equip. 5714.96 4853.la 10413.4727.06.86 70 Flonic Meters Equip. 2170.63 l855.51 3964.67

SUBTOTAL CARRIED FORWARD 3056041.23 2902298.10 4478535.14

o HM H

DATE CLAIM PAYEE DESCRIPTION EXPENSE US$ SDR xKNO. TYPE

SUBTOTAL BROUGHT FORWARD 3056041.23 2902298.10 4478535.1410.07.86 71 Costaz Dam Expert 0th 10506.11 8869.51 19016.2326.06.8G 72 Lapper Jun/Jul Salary I/Supp 2802.92 2396.03 5119.6017.07.a6 73 Stanley Int. Invoice 28 Cons.DE 21019.30 17634.82 37962.4831.07.86 74 Stanley Int. Invoice 29830 Cons.DE 67355.53 55956.61 121202.0228.07.86 75 Robertson Jul/Aug Salary H/Supp 6666.67 5599.75 12129.0621.0a.86 76 Lapper Aug/Sept Salary I/Supp 2853.04 2355.28 5247.8015.09.86 76a Stanley Int. Involce 32 Cons.DE 11620.21 9599.04 23024.2629.08.86 77 Lapper School Fees n/Supp 3124.91 2589.23 6274.4823.09.86 78 Stanley Int. Invoice 31 Cons.DE 14722.80 12194.31 29143.1823.09. 86 79 Lapper Oct/Nov Salary M/Supp 2595.22 2149.52 5137.1423.09. 86 80 Robertson Nov/Dec Salary & Gratuity H/Supp 25897.43 21449.81 51262.9019.12.86 81 Lapper Dec Salary & Gratuity M/Supp 9971.96 8292.55 19825.8307.10.86 82 Robertson Sept/Oct Salary h/Supp 6666.67 5496.24 13158.5520.11.86 83 Stanley Int. Invoice 33L34 Cons.DE 67313.73 56028.47 134020.1016.01.87 84 Robertson Jan/Mar Salary 8 Gratuity n/Supp 14807.69 11793.54 28014.3720.02.87 85 Stanley Int. Invoice 35 Cons.DE 10597.76 8404.92 24740.7224.02.87 86 George Kent Flowmetera Equip. 23831.41 18900.32 55568.a313.03. 87 87 Lapper Feb/Mar Salary M/Supp 3566.50 2846.29 a318.8513.03.87 88 Lapper School Fees W/Supp 3535.49 2805.81 8200.5431.03. 87 89 Lapper General Salary Increase W/Supp 1924.48 1508.a2 4397.4606.04.87 90 L.W.B. Reimbursement nlSupp 22695.36 17352.05 49993.8822.04.87 91 Lapper Apr/May Salary N/Supp 3728.49 285o.67 8303.7206.05. 87 92 Lapper School Fees W/Supp 3413.97 2610.20 7584.9808.05.87 93 George Kent C.V.T. For Meters Equip. 1020.a7 78o.52 2268.1127.07.87 5. Portals Equipment for Section D Equip. 125882.00 96026.49 279475.4915.09.87 94 Robertson General Salary Increase W/Supp 5411.55 4200.99 12221.1015.09.87 95 5.S.W.W.C. Computer Equipment Equip. 23520.40 18681.71 54346.9617.09.87 96 L.W.B. Reimbursement W/Supp 15284.17 10163.33 29566.1419.10.87 97 Kent Meters Installation oi Flowmeters Equip. 8303.36 6666.93 19411.4319.10.87 98 Kent Meters Freight of Waste Trailer Equip. 1362.38 1093.89 3184.9727.10.87 99 Stanley Int. Invoice 36 Cons.DE 30272.12 23192.21 67445.27

TOTAL EXPENDITURE FROM I.D.A. FUNDS 3606335.73 3342787.96 5624101.59

0B-4w )

- 39 -

AJEXIV

MALAWI

LILONCIE WATER SUPPLY ENOINEERING PROJECT(CREDIT 12?2-UAI)

ON-LENDING REPAYMENT SCHEDULE

First Interesl Installments InsallmentsPayment U P.-. Number P.O. Principal

01/07/es 12.00 82.00 2.00 3930395.53

InterestX per Insallments

Installment K

6.00 279067.27

Inst. go. Balance b/i Principal Interest Balance c/f

01/07/es 3930395.53 43243.64 235823.73 3887161.9901/01/89 8887151.99 46883.15 238229.12 3841313.8401/07/89 8841313.84 4s858.44 230478.83 3?89272.4001/01/90 8792725.40 61603.75 227683.62 8741221.6801/07/90 8741221.66 64698.97 224473.30 8ss8827.6901/01/91 3866e27.69 67889.61 221197.68 3628758.0801/07/91 8826758.08 61341.78 217725.48 3867418.2901/01/92 36W7416.29 86022.29 214044.98 3802394.0001/07/92 3502394.00 88923.683 210143.64 3433470.3701/01/98 3433470.37 73069.05 206008.22 8860411.3301/07/93 3360411.83 77442.69 201624.68 3282968.7401/01/94 3282968.74 82089.14 198978.12 8200879.6901/07/94 8200879.69 87014.49 192052.78 8113886.1001/01/95 8118885.10 92286.88 188831.91 3021629.7401/07/96 8021629.74 97789.49 181297.78 2923880.2501/01/98 2928860.25 103836.65 175431.62 2820224.6001/07/96 2820224.60 109853.79 169213.48 271037c.8001/01/97 2710370.80 116446.02 162622.26 2693926.7801/07/97 2593926.78 126481.72 156638.65 2470494.0601/01/98 2470494.06 130887.68 148229.84 2839656.4301/07/98 2338965.43 138887.88 140379.39 2200968.6501/01/99 2200968.65 147009.16 132058.11 2063969.3901/07/99 2058959.89 1556829.71 123237.66 1896129.6901/01/00 1898129.89 186179.49 113887.78 1732950.2001/07/00 1782950.20 176090.26 103977.01 1667869.9401/01/01 1567859.94 186596.67 93471.60 1872264.2701/07/01 1872264.27 196781.41 82336.86 1175632.8601/01/02 1176532.88 208636.30 70631.97 966997.6501/07/02 986997.66 221047.42 68019.85 745960.1601/01/08 745950.15 284810.26 44757.01 511639.8801/07/08 611689.86 248a68.98 80698.39 263271.0101/01/04 283271.01 263271.01 15796.26 .00

World Bank Document · 2016. 8. 29. · PART It PROJECT REVIEW FROM THE BANK'S PERSPECTIVE A....

Documents

Transcript of World Bank Document · 2016. 8. 29. · PART It PROJECT REVIEW FROM THE BANK'S PERSPECTIVE A....