implementation completion and results report (icr)...

Document of

The World Bank FOR OFFICIAL USE ONLY

Report No: ICR00004414

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(H962-TO, 5477-TO, TF17580)

ON A

IDA GRANT IN THE AMOUNT OF SDR 3.9 MILLION

(USD 6.0 MILLION EQUIVALENT)

IDA CREDIT IN THE AMOUNT OF SDR 3.9 MILLION

(USD 6.0 MILLION EQUIVALENT)

GLOBAL FACILITY FOR DISASTER REDUCTION AND RECOVERY IN THE AMOUNT OF USD 1.8 MILLION

TO THE

KINGDOM OF TONGA

FOR THE

Cyclone Ian Reconstruction and Climate Resilience Project June 12, 2019

Social, Urban, Rural And Resilience Global Practice East Asia And Pacific Region

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS

(Exchange Rate Effective November 30, 2018)

Currency Unit = Tonga Pa’anga (TOP)

TOP 2.12 = USD1

USD 1.55 = SDR 1

FISCAL YEAR

July 1 - June 30

Regional Vice President: Victoria Kwakwa

Country Director: Michel Kerf

Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez

Practice Manager: Abhas Kumar Jha

Task Team Leader(s): Keiko Saito, Michael Bonte-Grapentin

ICR Main Contributor: Priscilla Mary Phelps

ABBREVIATIONS AND ACRONYMS

A1 Project activity providing two-room houses for vulnerable households with destroyed

housing A2A Project activity providing assistance to non-vulnerable households with destroyed housing A2B Project Activity Repairing Damaged Houses A2C Project Activity Providing Climate Resilience Strengthening to Undamaged Houses ACM Asbestos Containing Material ADB Asian Development Bank BI Building Inspector BOQ Bill of Quantity CCA Climate Change Adaptation CRW Crisis Response Window DaLA Damage, Loss and Needs Assessment DRFI Disaster Risk Financing and Insurance DRM Disaster Risk Management EMP Environmental Management Plan GDP Gross Domestic Product GFDRR Global Facility for Disaster Reduction and Recovery GOT Government of Tonga GRM Grievance Redress Management ICR Implementation Completion and Results Report IDA International Development Association IRI Intermediate Results Indicator JNAP2 Joint National Action Plan 2 for Climate Change Adaptation and Disaster Risk Management LDS Church of Jesus Christ of Latter-day Saints M&E Monitoring and Evaluation MEIDECC

Ministry of Meteorology, Energy, Information, Disaster Management, Environment, Climate Change and Communications

MIA Ministry of Internal Affairs MIS Management Information System MOI Ministry of Infrastructure and Tourism MOU Memorandum of Understanding NEMO National Emergency Management Office NGO Non-governmental Organization NBCT National Building Code of Tonga ORAF Operational Risk Assessment Framework PAD Project Appraisal Document PCRAFI Pacific Catastrophe Risk Assessment and Financing Initiative PDO Project Development Objective PMU Project Management Unit POM Project Operational Manual PREP Pacific Resilience Program PST TSCP Project Support Team RF Results Framework

RPF Resettlement Policy Framework SPC Secretariat of the Pacific Community SSR Supported Self-Recovery TA Technical Assistance TCERMP Tonga Cyclone Emergency Recovery and Management Project (P075171) TC Tropical Cyclone TCI Tropical Cyclone Ian TCIRCRP Tonga Cyclone Ian Reconstruction and Climate Resilience Project TDOS Tonga Department of Statistics TFG Task Force Group TIST Tonga Institute of Science and Technology TOP Tongan Pa’anga (currency) TPTRP Tonga Post-Tsunami Reconstruction Project (P120595) TSCP Transport Sector Consolidation Project THRP Tonga Housing Recovery Policy TSDF Tonga Strategic Development Framework II TTL Task Team Leader UNDP United Nations Development Program UNOPS United Nations Office for Project Services USD United States Dollar WBG World Bank Group

TABLE OF CONTENTS DATA SHEET .......................................................................................................................................1

I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ...................................................................5

A. CONTEXT AT APPRAISAL .........................................................................................................5

B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) ..................................... 10

II. OUTCOME ................................................................................................................................ 11

A. RELEVANCE OF PDOs ............................................................................................................ 11

B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 12

C. EFFICIENCY ........................................................................................................................... 19

D. JUSTIFICATION OF OVERALL OUTCOME RATING: Moderately Unsatisfactory ......................... 21

E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 21

III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ............................................. 23

A. KEY FACTORS DURING PREPARATION ................................................................................... 23

B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 24

IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME ............... 27

A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 27

B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 28

C. BANK PERFORMANCE ........................................................................................................... 29

D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 30

V. LESSONS AND RECOMMENDATIONS ......................................................................................... 31

ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................................ 35

ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ...................................... 40

ANNEX 3. PROJECT COST BY COMPONENT ........................................................................................ 42

ANNEX 4. EFFICIENCY ANALYSIS ....................................................................................................... 43

ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ................. 48

ANNEX 6. SUPPORTING DOCUMENTS ............................................................................................... 49

ANNEX 7. ESTABLISHING SECURITY OF TENURE FOR TCIRCRP PROJECT BENEFICIARIES ....................... 52

ANNEX 8. PHOTOGRAPHS OF TCIRCRP–FINANCED HOUSING ............................................................. 56

ANNEX 9. TCIRCRP INDICATORS ....................................................................................................... 58

ANNEX 10. THEORY OF CHANGE ....................................................................................................... 60

ANNEX 11. MAP OF HA’APAI, TONGA ............................................................................................... 61

The World Bank Tonga Cyclone Ian Reconstruction and Climate Resilience Project (P150113)

Page 1 of 61

DATA SHEET

BASIC INFORMATION Product Information Project ID Project Name

P150113 Tonga Cyclone Ian Reconstruction and Climate Resilience Project

Country Financing Instrument

Tonga Investment Project Financing

Original EA Category Revised EA Category

Partial Assessment (B) Partial Assessment (B)

Organizations

Borrower Implementing Agency

Kingdom of Tonga Ministry of Finance and National Planning, Ministry of Infrastructure and Tourism

Project Development Objective (PDO)

Original PDO The project development objectives are to: (i) Restore housing, community facilities, and basic services to the affected populationof Ha’apai; and, (ii) Strengthen the country’s resilience to natural disasters. Revised PDO The objectives of the Project are to: (a) strengthen the climate resilience of housing and selected community facilities for the affected population of Haâ��apai; and (b) strengthen the Recipientâ��s preparedness to recover from future natural disasters.


Page 2 of 61

FINANCING

Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing TF-17580 1,800,000 1,800,000 1,764,252

IDA-54770 6,000,000 5,973,399 5,383,567

IDA-H9620 6,000,000 5,986,192 5,595,315

Total 13,800,000 13,759,591 12,743,134

Non-World Bank Financing 0 0 0

Borrower/Recipient 2,090,000 2,090,000 785,265

Total 2,090,000 2,090,000 785,265

Total Project Cost 15,890,000 15,849,590 13,528,399

KEY DATES

Approval Effectiveness MTR Review Original Closing Actual Closing 28-May-2014 01-Jul-2014 08-Dec-2017 30-Jun-2018 30-Nov-2018

RESTRUCTURING AND/OR ADDITIONAL FINANCING

Date(s) Amount Disbursed (US$M) Key Revisions 14-Dec-2016 9.74 Change in Loan Closing Date(s)

Change in Legal Covenants Other Change(s)

28-Jun-2017 11.01 Change in Project Development Objectives Change in Results Framework Change in Legal Covenants

17-Jun-2018 12.39 Change in Loan Closing Date(s)

KEY RATINGS

Outcome Bank Performance M&E Quality

Moderately Unsatisfactory Moderately Satisfactory Modest


Page 3 of 61

RATINGS OF PROJECT PERFORMANCE IN ISRs

No. Date ISR Archived DO Rating IP Rating Actual

Disbursements (US$M)

01 08-Jul-2014 Satisfactory Satisfactory 0

02 22-Dec-2014 Moderately Satisfactory Moderately Satisfactory 2.44

03 28-May-2015 Moderately Satisfactory Moderately Satisfactory 4.11

04 23-Dec-2015 Moderately Unsatisfactory Moderately Unsatisfactory 7.06

05 24-Jun-2016 Moderately Unsatisfactory Moderately Unsatisfactory 8.75

06 27-Mar-2017 Moderately Unsatisfactory Moderately Satisfactory 10.14

07 15-Nov-2017 Moderately Satisfactory Moderately Satisfactory 12.04

08 16-Dec-2017 Moderately Satisfactory Moderately Satisfactory 12.19

09 05-Jun-2018 Moderately Satisfactory Moderately Satisfactory 12.39

SECTORS AND THEMES

Sectors Major Sector/Sector (%)

Water, Sanitation and Waste Management 18

Sanitation 9 Water Supply 9

Industry, Trade and Services 82

Housing Construction 82 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Finance 25

Finance for Development 25 Disaster Risk Finance 25


Page 4 of 61

Urban and Rural Development 75 Disaster Risk Management 75

Disaster Response and Recovery 25

Disaster Risk Reduction 25

Disaster Preparedness 25

Environment and Natural Resource Management 63

Climate change 63 Adaptation 63

ADM STAFF

Role At Approval At ICR

Regional Vice President: Axel van Trotsenburg Victoria Kwakwa

Country Director: Franz R. Drees-Gross Michel Kerf

Senior Global Practice Director: John A. Roome Ede Jorge Ijjasz-Vasquez

Practice Manager: Michel Kerf Abhas Kumar Jha

Task Team Leader(s): Christopher R. Bennett Keiko Saito, Michael Bonte-Grapentin

ICR Contributing Author: Priscilla Mary Phelps


Page 5 of 61

I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL

Context 1. The Kingdom of Tonga is a Polynesian country located on an archipelago comprising 169 islands with a total land

mass of 800 km2 scattered over 270,000 square miles in the southern Pacific Ocean. Its population of around 104,000 is located on 36 islands. Seventy percent of the population resides on the main island of Tongatapu. Tonga’s small size, geographic dispersion and isolation make it particularly vulnerable to climate change and natural hazards. Catastrophic risk modeling by the World Bank indicates that Tonga is expected to incur, on average, USD15.5 million per year in losses due to earthquakes and tropical cyclones, and losses of up to 14% of Gross Domestic Product (GDP) in years affected by specific disasters.1 For several years, the annual World Risk Report has ranked Tonga as the second most at-risk country from disasters out of 173 countries surveyed.2

2. The Ha’apai Island Group is a chain of 62 volcanic islands about 100 miles north-east of the main island, but only 17 of these islands are inhabited. (See Annex 11 for a map of Ha’apai.) The 2011 national census recorded 6,616 residents of Ha’apai in 1,258 households, and a population declining by about 2.7 percent annually. Public infrastructure in Ha’apai includes a domestic airport on Foa island, roads, coastal protection systems, rudimentary maritime facilities, community buildings such as the Lifuka market, and some government offices. Many of the islands have no electricity or reticulated water systems. Resident income comes principally from agriculture, fishing and remittances from family members living abroad.

3. Institutional context. The National Emergency Management Organization (NEMO) was established by the Government of Tonga (GOT) in 2007 to build capacity of the Tongan community by developing and implementing disaster risk management policies, planning and programs to address threats from disasters. Its powers were further defined in the National Emergency Management Plan, 2010. In 2012, NEMO was moved from the Ministry of Infrastructure (MOI) to the Ministry of Meteorology, Energy, Information, Disaster Management, Environment, Climate Change and Communications (MEIDECC). Both MEIDECC and MOI play important roles in building the country’s climate and disaster resilience and in risk management. However, in 2014, GOT had no government agency responsible for housing policy or social protection. Viewed essentially as infrastructure projects, housing reconstruction projects were traditionally implemented by MOI with support from local authorities.

4. Tropical Cyclone Ian. Tropical Cyclone Ian (TCI) passed directly through the Ha’apai Islands on January 11, 2014. It hit as a Category 5 system with winds exceeding 200 km per hour. Good preparedness and emergency measures put in place with support from ongoing Government efforts and previous Bank and other donor-funded projects allowed for a rapid response. Only one fatality and 14 injuries were recorded. However, as the most powerful storm to hit Tonga at that time, it had a devastating physical impact. The damage and loss assessment (DaLA) undertaken by NEMO in January with support by the Bank and other development partners, estimated that of the 6,616 people living in Ha’apai, approximately 5,500 people in 18 villages across six islands were affected. The

1 Pacific Catastrophic Risk Assessment and Financing Initiative (PCRAFI), 2015, “Tonga Country Note: Disaster Risk Financing and Insurance.” http://documents.worldbank.org/curated/en/251921468291332622/pdf/949860WP0Box38000Country0Note0Tonga.pdf. 2 World Risk Report, Bündnis Entwicklung Hilft and Ruhr University Bochum – Institute for International Law of Peace and Armed Conflict (IFHV). https://weltrisikobericht.de/english-2/.

https://en.wikipedia.org/wiki/Polynesia

https://en.wikipedia.org/wiki/Archipelago

https://en.wikipedia.org/wiki/List_of_islands_and_towns_in_Tonga

https://en.wikipedia.org/wiki/Pacific_Ocean

https://en.wikipedia.org/wiki/Tongatapu

http://documents.worldbank.org/curated/en/251921468291332622/pdf/949860WP0Box38000Country0Note0Tonga.pdf

https://weltrisikobericht.de/english-2/


Page 6 of 61

combined physical damage and economic losses were estimated at USD49.5 million, about 11 percent of Tonga’s GDP. Physical damage (i.e. the additional expenditure required to replace all public and private sector assets), was concentrated in housing, transport infrastructure, and agriculture, and was estimated at USD39.4 million. TCI triggered the first payout from PCRAFI in the amount of US$1.27 million, which was paid within two weeks of the event. 3

5. Prior to TCI, modest growth of around 1.7 percent of GDP was projected for Tonga in 2014, but the World Bank Group (WBG) estimated that TCI could reduce GDP growth by 2.3 percentage points. An income loss of 40 percent was estimated for Ha’apai for 2014, as well as a significant increase in poverty due to impacts on subsistence agriculture, handicraft production, and other business activity. With support from partners, the GOT formulated a three-month National TCI Response Plan, endorsed by Cabinet on January 30, 2014. The Plan outlined the immediate relief and recovery priorities and estimated a need for recovery financing of USD45 million, including USD35 million for the housing sector.

6. Housing impact. The initial building condition assessment conducted by MOI in January 2014 identified 923 residential buildings on Ha’apai that were either destroyed or heavily damaged.4 The National TCI Response Plan identified the need to reconstruct and rehabilitate 800 homes and an urgent priority to move affected families from tents and evacuation centers into safe housing with adequate water and sanitation facilities. At appraisal, housing needs were estimated at 550 homes heavily damaged or destroyed and 400 requiring repairs.

7. In February 2014, the GOT began preparing a TCI-specific Housing Recovery and Reconstruction Policy (HRRP) to guide housing reconstruction.5 The HRRP (which was never formally approved) promoted fostering climate and disaster resilience in the affected areas and “building back better.” It also encouraged using approaches that supported self-recovery in order to ensure a more rapid and community-based program and to allow a more equitable distribution of available funds among affected households, given public budget constraints.

8. At project appraisal in April 2014, it was assessed that 1,100 households living in the Ha'apai group had been affected by TCI. Of these, around 550 households occupied houses that had been destroyed or heavily damaged. The remaining households were occupying houses that had a range of damage between moderate to none. At the request of the GOT, the Bank mobilized USD13.8 million from a combination of International Development Association (IDA) credits and grants and a Global Facility for Disaster Reduction and Recovery (GFDRR) grant for housing reconstruction, repairs and retrofitting.

3 The PCRAFI pilot is an initiative of Japan, the World Bank, the Secretariat of the Pacific Community (SPC), and Pacific island nations. It is testing whether a risk transfer arrangement modeled on an insurance plan can help Pacific island nations deal with the immediate financial effects of natural disasters. 4 The survey covered the islands of Foa, Ha’ano, Lifuka, Lofanga, Mo’unga’one, and ‘Uiha (see map in Annex 6). 5 Kingdom of Tonga/ Ministry of Infrastructure, 2014, “Ha'apai Housing Recovery and Reconstruction Policy,” Draft 2, April 2, 2014.


Page 7 of 61

Theory of Change (Results Chain) at entry under original PDO

(see Annex 10 for a larger version)

Original Project Development Objectives (PDOs) and PDO-level Indicators 9. The PDO for the Tonga Cyclone Ian Reconstruction and Climate Resilience Project (TCIRCRP) in the World Bank’s

Project Appraisal Document (PAD) was to: (a) restore housing, community facilities, and basic services to the affected population of Ha’apai; and (b) strengthen the country’s resilience to natural disasters.

10. The original PDO-level indicators were: (1 & 2) direct project beneficiaries, of which female; (3) eligible households accessed supported self-recovery funding; (4) project dwellings in Ha'apai built, repaired or retrofitted to resistant standard; and (5) national resilient recovery institutional arrangements developed for Cabinet endorsement. (See Annex 9 for a table of Project indicators before and after restructuring.)


Page 8 of 61

Components 11. Component A: Housing and Key Community Facilities Repair, Reconstruction and Climate Resilience (original

cost: USD12.98 million; actual cost: USD9.29 million). The Project was designed to facilitate the recovery of housing, key community facilities and services in TCI-affected areas by improving upon past experience with owner-managed recovery. Under this model, called Supported Self-Recovery (SSR), households were to receive subsidies and technical assistance (TA) to reconstruct or repair their own housing, by providing the labor themselves or hiring contractors. Because funding was limited, only the 200 most vulnerable households were eligible for a contractor-built two-room “cyclone house,” similar to those provided following prior disasters. Vulnerable households were those whose recovery was likely to lag, as agreed with the community, and included those on more remote and heavily-affected islands. “Building back better” principles were promoted through resilient construction and repair standards, construction supervision and inspection by building inspectors (BIs) and participation of the affected households in reconstruction. Care was also taken to ensure proper siting of new houses. Four types of housing assistance were included (A1-A2), as described below.

12. A1 Housing for vulnerable households. Provision of a contractor-built two-room climate-resistant dwelling for up to 200 vulnerable households (housing cost per unit up to USD18,000 / TOP32,500 per household).

13. A2–A4 Owner/Community-Driven Repairs and Reconstruction. Subsidies for replacement, repairs, or retrofitting of buildings. Funding levels were to be linked to damage levels and funding would be transferred to households (or communities, for community facilities) in tranches, linked to construction milestones and compliance with agreed building standards. There were two areas of SSR:

i. Housing Reconstruction and Climate Resilience. Subsidies defined at entry for:

Category Subsidy purpose # HH USD TOP A2A Home reconstruction of destroyed or severely

damaged main dwellings 350 USD9,000 TOP16,500

A2B Repairs and retrofitting for reparable damage to main dwellings

400 USD2,750 TOP5,000

A2C Small retrofitting and building strengthening for undamaged buildings

150 USD750 TOP1,400

ii. Reconstruction and Resilience Strengthening of Community Facilities

Category Subsidy purpose # USD TOP A3 Repairs and climate resilience for community or

public facilities for towns 18 USD6,000 TOP11,000

A4 Reconstruction and resilience strengthening of large public facilities such as Lifuka market

1 or 2 USD100,000 (total)

TOP180,000 (total)

14. A5 Disposal of building debris and demolition rubble. (a) Up to 1,100 cash transfers to households (~USD150/ TOP270) to assist with collection and processing of building debris and (b) safe collection and disposal of construction and demolition waste, including asbestos-containing materials, at a registered landfill in Tongatapu.


Page 9 of 61

15. A6 Household supplementary potable water and sanitation facilities. Water tanks, guttering, and sanitation for up to 1,100 households and selected community buildings (average ~USD1,800 / TOP3,300 per household).

16. A7 Logistical support (USD0.23 m). Purchase of a barge to transport personnel and building materials.

17. Component B: Technical Assistance and Training for Enhanced Disaster and Climate Resilience (original cost USD1.57 million; actual cost USD1.74 million). Components B and C were meant to ensure the application of “building back better” principles in both reconstruction activities and the longer-term national recovery framework.

18. B1 Resilience strengthening for safer homes and communities (USD1.35 million). Capacity strengthening through the development of systems, tools and guidance material, which would support both the Project’s investment activities (Component A) and strengthen the country’s capacity to manage future post-disaster housing recovery projects. It included the following:

B1A: Mobilization and Building Advice. Support to SSR households, including: (i) establishing a ‘Recovery Center’; (ii) preparing building plans and toolkits; (iii) communications; and (iv) mobile advisory units.

B1B: Climate Resilience Training. Formal training and on-the-ground mentoring of tradespeople, Building Inspectors, and other stakeholders to ensure the use of climate resilient building practices.

B1C: Improve Building Code Application. Updating the National Building Code of Tonga (NBCT), and design and implementation of a public awareness campaign.

B1D: Hazard Mapping. Risk assessment and mapping of coastal hazards to inform reconstruction planning and resilience building within the Ian-affected areas.

19. B2 Disaster Recovery and Reconstruction Framework (USD0.22 m)

Operationalize and institutionalize recovery and reconstruction. Activities included: (i) documentation of lessons learnt from past reconstruction projects; (ii) update of legislation and institutional arrangements; (iii) development of an operations manual detailing recovery implementation arrangements; and (iv) consultations on the draft Housing Recovery and Reconstruction Policy (HRRP) prior to Cabinet adoption.

Improved post-disaster mapping capacity and damage assessments was supported with resources for equipment and information tools to facilitate future disaster response and recovery efforts.

20. Component C: Project Support (original cost: USD1.34 million; actual cost USD1.74million). This component provided resources to: (i) hire technical support for construction activities including Building Inspectors; (ii) support procurement, financial management, contract and project management; and (iii) provide safeguards oversight and project monitoring and evaluation.


Page 10 of 61

B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE)

Revised PDOs and Outcome Targets 21. The PDO was modified as part of the Level 1 restructuring approved in June 2017 as follows: (a) to strengthen the

climate resilience of housing and selected community facilities for the affected population of Ha’apai; and, (b) to strengthen the Recipient’s preparedness to recover from future natural disasters. The target for number of Project dwellings rebuilt was reduced slightly from 1,100 to 1,021 and the number of direct beneficiaries from 5,800 to 5,400, reflecting the results of the beneficiary selection process; the indicator on households accessing self-recovery funding was dropped. The indicator for PDO(b) was amended to “national resilient reconstruction and recovery mechanisms and standards developed.” (Annex 9 shows all Project indicators before and after restructuring.)

22. The revision to the PDO(a) and outcome targets was intended to clarify that the Project’s purpose was to support various forms of cyclone recovery, rather than to provide rights to housing and land that did not exist prior to TCI. The clarifications applied to households who qualified for Project subsidies for reconstruction (A1) or major repairs (A2A) and who occupied housing in Ha’apai at the time of the cyclone under informal arrangements (verbal agreements with private landholders or unregistered leases). The restructuring also removed references and targets for basic services (see para. 46). The revised PDO (b) was more specific about building Tonga’s disaster recovery capacity, as a key aspect of resilience.

Revised Components 23. Component A was revised to remove the provision of basic services. [See para. 46-48.]

Other Changes 24. The Project was restructured three times as shown in Table 1.

Table 1. List of Restructurings and Justifications

Level of Restructuring Date % Disbursed (USD million) Key Changes Justification

Level II, CD approved Dec. 14, 2016 9.49 (74%) Extend the closing date of the GFDRR trust fund grant from December 31, 2016 to June 30, 2018.

Aligned the closing date of the GFDRR grant with the closing of the IDA Grant and IDA Credit.

Level I, Board approved June 28, 2017 10.51 (82%) Revise the PDO; amend the RF; amend covenants in the FA; amend the Resettlement Policy Framework; update the appraisal analysis.

Clarified rights and responsibilities related to beneficiary land tenure security and adjusted scope of project investments. Refer to Key Factors and Annex 7 for details.

Level II, CD approved June 17, 2018 11.0 (86%) Extend the closing dates of the GFDRR trust fund grant by 5 months from June 2018 to November 2018.

Allowed completion of several technical assistance activities that contributed to government’s preparedness for future disasters, in particular because Cyclone Gita in February 2018 disrupted implementation schedules.


Page 11 of 61

Rationale for Changes and Their Implications for the Original Theory of Change 25. In 2015, the GOT pointed out that the requirements of the Project with respect to "security of occupancy" were

inconsistent with Tonga's customary land occupancy arrangements and also created rights and obligations under the Project that were inconsistent with Tongan law. Rapid project preparation and reliance on arrangements from a prior project were contributing factors. Consequently, these requirements were contributing to delays in securing consent from landholders for reconstruction activities to occur and creating uncertainty for beneficiaries in categories A1 and A2A. (See Annex 7 for a detailed description of the land consent issue and how it was resolved.) Removal of the reference to providing basic services reflected a budgetary shortfall in the Project that developed as the result of increased expenditures per household over those contemplated at appraisal. Reductions in the housing and beneficiary targets aligned them with counts determined by recent assessments.

26. Implications for Theory of Change. Security of tenure was a precondition for providing housing assistance, but not a developmental outcome of the Project per se, and therefore not part of the TOC. Removing the results chain for basic services was the only significant modification to the TOC.

II. OUTCOME A. RELEVANCE OF PDOs

Assessment of Relevance of PDOs and Rating

27. The PDO of TCIRCRP was highly relevant to the post-disaster situation and to the fiscal and policy context. Given the frequency of tropical cyclones, and Tonga’s extreme vulnerability to them, the Project was designed to address both short-term (reconstruction) and longer-term (resilience-building) objectives.

28. At completion, the Project supports and informs key national development frameworks, which increasingly emphasize the importance of climate change adaptation (CCA) to Tonga’s survival. The “Tonga Strategic Development Framework II (2015-25),” (TSDF) calls for integrating disaster risk management (DRM) and climate change into all program planning and implementation.6 Of its seven national outcomes, Outcome F envisions “a more inclusive, sustainable and effective land administration, environment management, and resilience to climate and risk.” TSDF's Organizational Outcome 2.7 seeks “Better care and support for vulnerable people that ensures … [they] continue to be supported and protected despite…changing social institutions” and Organizational Outcome 5.4 seeks “Improved national and community resilience to the potential disruption…to wellbeing, growth and development from extreme natural events and climate change…..” Other organizational outcomes reflect the country’s movement toward a more representative and participatory democracy, emphasizing the role of local organizations in the nation’s development.

29. Tonga’s “National Infrastructure Investment Plan 2013–2023” stresses the integration of CCA and DRM in infrastructure planning and investments and promotes resilience as an underlying pillar of infrastructure

6 Government of Tonga/ Ministry of Finance and National Planning, 2015, “Tonga Strategic Development Framework II (2015-25).”


Page 12 of 61

development.7 It also identifies urgent gaps in water and sanitation policy and the need for a strategy that addresses the full water cycle.

30. The Project supports the “Tonga Climate Change Policy: A Resilient Tonga by 2035”and the updated “Joint National Action Plan 2 for Climate Change Adaptation and Disaster Risk Management” (2018) (JNAP2), a 10-year action plan of climate change and DRM initiatives that support the Policy.”8 JNAP2 focuses on the unique roles of government, the private sector and civil society in building resilience in Tonga. Among its many relevant goals are Objective 1, which seeks to mainstream climate change in specific sectors and Objective 3, which calls for establishing mechanisms so that key entities working in those sectors can coordinate effectively.

31. Bank interactions with Tonga are guided by the “Regional Partnership Framework”, which covers nine Pacific island countries, including Tonga.9 The Framework emphasizes the strategic importance of addressing climate risks, particularly under “Focus Area 3: Protecting incomes and livelihoods.” One of the risks to implementation of the Framework rated as “substantial” is Institutional capacity for implementation and sustainability. Measures put in place by TCIRCRP should help to reduce this risk in respect of Tonga.

32. The Project design was fully aligned with current Bank housing sector policies and strategies, in promoting post-disaster resilience building using principles of building back better and owner-and community-managed reconstruction. This guidance includes Safer Homes, Stronger Communities – A Handbook for Reconstruction after Natural Disasters10 and the “Housing and Settlements Recovery Note.”11

B. ACHIEVEMENT OF PDOs (EFFICACY)

Assessment of Achievement of Each Objective/Outcome 33. Given that the PDO was revised in a Level 1 restructuring in 2017, at which point 80 percent of the financing had

been disbursed, this Implementation Completion and Results Report (ICR) is using a split evaluation for efficacy. The PDOs have been disaggregated as seen in Table 2.

7 Government of Tonga and Pacific Region Infrastructure Facility (PRIF), 2013, “Tonga National Infrastructure Investment Plan, 2013 -2023.” 8 Government of Tonga/ Ministry of Meteorology, Energy, Information, Disaster Management, Environment, Climate Change and Communications (MEIDECC), 2016, “Tonga Climate Change Policy: A Resilient Tonga by 2035” and MEIDECC, 2018, “Joint National Action Plan 2 on Climate Change Adaptation and Disaster Risk Management 2018-2018 (JNAP 2).” 9 World Bank, 2016 (Report #120479), “Regional Partnership Framework for Kiribati, Republic of Nauru, Republic of The Marshall Islands, Federated States of Micronesia, Republic of Palau, Independent State of Samoa, Kingdom of Tonga, Tuvalu, and Vanuatu.” 10 Abhas K. Jha, et al, 2010, Safer Homes, Stronger Communities : A Handbook for Reconstructing after Natural Disasters, World Bank. 11 World Bank / Global Facility for Disaster Reduction and Recovery, 2017, “Housing and Settlements Recovery Note” (Disaster Recovery Guidance Series).


Page 13 of 61

Table 2. Definition of the original and revised PDOs (disaggregated)

PDO Definition Original (80% of disbursements) PDO1a To restore housing to the affected population of Ha’apai PDO1b To restore community facilities to the affected population of Ha’apai PDO1c To restore basic services to the affected population of Ha’apai PDO2 To strengthen the Recipient’s resilience to natural disasters Revised (20% of disbursements) PDO3a To strengthen the climate resilience of housing for the affected population of

Ha’apai PDO3b To strengthen the climate resilience of selected community facilities for the

population of Ha’apai PDO4 To strengthen the Recipient’s preparedness to recover from future natural

disasters

34. PDO-level indicators 1 & 2, which measured the number of people served by restoration of housing, community facilities and basic services, were “direct beneficiaries, of which female.” For the purposes of PDO1a-c and PDO3a-b, all direct beneficiaries were residents of the Ha’apai Island Group since repair and reconstruction activities occurred only on these islands.

Efficacy Rating Based on Original PDO (80% of project disbursements): Modest (see Table 5)

PDO1a: To restore housing to the affected population of Ha’apai. Rating: Modest

35. For both PDO1a and PDO3a, the Project established a beneficiary selection process that identified all households living in Ha’apai at the time of TCI whose housing was destroyed or damaged and used data that indicated household vulnerability (dependency ratio, female-headed household, etc.) to identify the more vulnerable households. The 200 most vulnerable households were to be provided a contractor-built two-room house (A1). A tentative list of all households, along with their housing damage category and those identified as vulnerable, was posted in Town offices in order to notify beneficiaries of their proposed status and seek any corrections to the list. The Project used communications media to inform beneficiaries of the Project’s parameters.

36. To provide housing to beneficiaries in the A1 group, the Project Management Unit (PMU) procured four local contractors through shopping to build 196 two-room houses of 34.56 m2. Contractors were assisted with the logistics of materials delivery and to manage relationships with the households. In September 2014, the GOT decided that rather than providing subsidies to the 204 households with destroyed or heavily damaged houses but not categorized as vulnerable (A2A), contractors would be hired to build them one-room houses of 17.28 m2.

37. PDO-level indicator 3 [See para. 10] measured “the number of households accessing supported self-recovery funding,” set at 900 households in Intermediate Results indicator (IRI) 2 (“Funding for SSR disbursed") [See Annex 9]. Originally, beneficiaries eligible for reconstruction and repair subsidies (A2A, A2B and A2C) were to have access to a Recovery Center and mobile advisory units through which they would receive technical assistance and training from an SSR firm, in order to ensure the use of building back better principals and resilient standards. When the decision was made to hire contractors to build one-room houses for A2A beneficiaries in September 2014, the SSR firm procurement was canceled. Support to the remaining SSR households was provided in a more


Page 14 of 61

fragmented fashion by the Deputy Project Manager, additional Building Inspectors, and a Community Liaison Officer in Ha’apai. Assisted by the PMU, contractors were also hired to carry out repairs for 294 households who signed Memorandums of Understanding (MOUs).

38. The remaining SSR households began receiving housing assessments, building plans, and bills of quantity (BOQs), in March 2015. In August 2017, approximately 10 percent of households were still awaiting deliveries of materials. Deliveries were coordinated by the PMU. Some SSR households received assistance with repairs from non-governmental organizations (NGOs) or His Majesty’s Armed Forces (HMAF). While still observing the per-household budget ceiling, around 40 households requested materials for a one- or two-room cement block house instead of for repairs.

39. PDO-level indicator 4 [See para. 1010] measured “the number of Project dwellings in Ha'apai built, repaired or retrofitted to resistant standards,” and relates to PDOs 1a, 1b, 3a and 3b. Building standards were enforced for contractor-built houses by providing contractors with detailed pre-approved housing plans prepared by the Project and tested at 70 m/s windspeed at James Cook University in Australia.12 The houses are elevated on reinforced concrete footing against flooding and built with lumber treated to resist rotting and termites. Repair plans were developed that ensured that all elements (roof sheets, purlins, rafters / trusses, wall plates, etc.) were tied down with proper tension connections and that deteriorated timber members and hardware were replaced. Building standards for both contractor-built housing and homeowner-managed repairs and construction were enforced through supervision and inspection by BIs. Training on safe building practices was mostly provided to SSR households informally by the Master Builder and BIs in the field. Forty-two households were reimbursed for work done prior to the availability of repair funds; all works were inspected to ensure resilient building standards had been applied.

40. Communications with beneficiaries took many forms throughout the Project (IRI 1, “Communications strategy prepared and implemented.”), including through radio broadcasts, distribution of written material and establishment of an online grievance redress system.

41. The Project was largely successful at delivering its objective of restoring housing to households affected by TCI, as shown in Table 3. However, the number of households in each damage category and the amount of assistance received by the households in each category differed from the figures anticipated in the PAD. [See para. 61.]

12 It is worth noting that the proposed National Building Code revisions reduce the windspeed requirement for housing to 66 m/s, based on more recent research. As a result, once these revisions are enacted, Project beneficiaries will have housing that exceeds the Tonga Building Code for dwellings.


Page 15 of 61

Table 3: TCIRCRP: Households assisted by damage level

Table 4 shows the cumulative completion of housing interventions and community facility repairs over time.

Table 4. Cumulative targets and outputs achieved

Cumulative Target Values Baseline 2015 2016 2017 2018 End Target Housing Original cumulative targets 0 400 800 1,000 1,100 1,021 Cumulative outputs achieved 0 658 703 991 1,031 1,031 Percent of target 165% 88% 99% 94% 101% Community facilities 0 N/A N/A 9 18 100%

42. Per PDO-level indicator 4 [See para. 10], a total of 1,031 housing units were built, repaired or retrofitted to resistant standards in Ha'apai, a reduction from original target of 1,100 by 6 percent. Per PDO-level indicator 1 [See para. 10], the related outcome is that 5,400 direct beneficiaries have restored housing compared to the original target of 5,800 or a 9 percent reduction. (These two changes resulted from having more precise beneficiary data obtained during Project implementation.) Per PDO-level indicator 2 [See para. 10], the percentage of direct female beneficiaries is 27 percent, compared to the target of 40 percent.16 All new housing units meet a 70 meters per second (m/s) windspeed resistance standard, although in some cases this required post-construction retrofitting. Virtually all of the housing built under the Project was occupied as of the final beneficiary survey submitted in November 2018.17 Pictures of housing types are found in Annex 8. The achievement of PDO1a is Modest.

PDO1b: To restore community facilities to the affected population of Ha’apai. Rating: Substantial

43. For community facilities (PDO 1b and PDO 3b), the PMU coordinated with Town Officers or other owners to prepare or review building plans and BOQs and facilitated the delivery of materials. Resilient standards were implemented through the quality control of plans and the supervision and inspection of the works by BIs.

44. The PAD quantified the number of community facilities targeted for repair and strengthening at 18 small facilities and 1-2 large facilities. The Project successfully completed repairs and strengthening of 18 small community facilities (mostly town halls)-nine by year-end 2017 (50 percent) and 18 by Project close (100 percent). Rehabilitation work on the one large community facility assisted by the Project–the Lifuka market–could not be completed due to the Project’s budget shortfall. However, the damage assessment and rehabilitation plan were

Housing Damage

Estimated (PAD)

Actual (end of Project)

With Water

13

With power14

A1 Level 4 Destroyed or heavily damaged / vulnerable 200 196 125 98 A2A Level 4 Destroyed or heavily damaged / other 350 204 0 80 A2B Level 3 Moderate damage repair 400 314 0 0 A2C Level 2 Minor damage repair 150 275 0 0 Reimbursement for repairs15 NA 42 0 0 TOTAL 1,100 1,031 125 178


Page 16 of 61

prepared under the Project, after which construction was funded by the Asian Development Bank (ADB) and completed in July 2017. The market is now used regularly, especially by residents of Pan’gai and Foa districts (3,800 beneficiaries).

45. The Project also removed asbestos-containing materials (ACM) from Ha’apai, through implementation of an asbestos removal plan (IRI 3) [See Annex 9] carried out by local workers overseen by a specialist licensed in the handling of ACM. (These materials were removed principally from community facilities.) The achievement of PDO1b is Substantial.

PDO1c: To restore basic services to the affected population of Ha’apai. Rating: Negligible

46. Basic services were to have been restored to the affected population of Ha’apai through the provision of gutters and water tanks for rainwater harvesting and either flush or composting toilets. The Project budget included resources to provide or restore water and sanitation to all 1,100 housing units. These services were omitted from the original housing contracts but were added later for some houses through change orders. Water tanks and guttering were installed in 125 units (11 percent). No sanitation facilities were installed.

47. Subsequently, changes in housing specifications and cost ceilings and expanded use of contractors created a budget shortfall. Prior to the level 1 restructuring, the GOT agreed to assume responsibility for installing water and sanitation services and PDO 1c was eliminated in the restructuring in June 2017. The Results Framework (RF) did not contain targets to measure achievement of this objective. The procurement of water and sanitation services by the GOT was ongoing at closing. Therefore, the achievement of PDO1c is Negligible.

48. Electrical service was not shown in the Project budget per se or included in the original housing design. Considering electricity a basic service, the Bank approved a contract to install it in the first 178 contractor-built houses (including solar units in the outer islands), after which this activity was also dropped for budgetary reasons.

PDO2: To strengthen the Recipient’s resilience to natural disasters. Rating: Modest

49. PDO-level indicator 5 [See para. 10] corresponded to PDO2, which measured “national resilient recovery institutional arrangements developed for Cabinet endorsement.” These consultancies were originally scheduled to occur in parallel with the construction activities. However, contracting lagged as MOI and PMU staff focused on the implementation challenges of Component A. All Component B activities were ultimately completed, but the time remaining before Project close was insufficient to gain approval by higher government bodies in those cases where such approval was required. [See para. 57.]

13 The original goal was to provide water and sanitation; however, only water systems (gutters and water tanks) were installed. 14 Electrical services were not mentioned in the PAD but were added for some houses under a separate contract. 15 An innovation introduced during implementation was the reimbursement of beneficiaries who had carried out repairs with their own resources before assistance from the Project was available. Repairs were first inspected for safety and a reduced grant was given. 16 In the Implementation Supervision Reports (ISR) the number of direct female beneficiaries is stated as 40% which should have been 27%. 17 Kingdom of Tonga/ Ministry of Infrastructure, 2018, “Safeguards Completion and Results Report, TCIRCRP,” November 2018.


Page 17 of 61

50. The following outputs were completed:

The Tonga Housing Recovery Policy (THRP) was developed in a participatory process involving all key government agencies over a 9-month period in 2017-18. The final output provides a framework for designing future housing recovery programs and covers the policy, legal, financial and operational aspects of recovery, as well as guidance on risk reduction and readiness for housing recovery.18 (This output was monitored by IR indicator 5. [See Annex 9.]) This was not presented for Cabinet approval before Project close.

A House Identification Guide, prepared during 2017-18, is a compilation of designs and other technical information from past Tonga housing reconstruction projects. It is now available to MOI in hard copy and electronic form to serve as a reference for future resilient small housing designs financed by government or private owners.19

The National Building Code of Tonga (NBCT) update consultancy was conducted in a participatory manner with the public and private sector and produced a draft Domestic Dwelling Structural Supplement to the NBCT, modifications to other sections of the NBCT, and a final report that laid out recommendations for its enactment and for the strengthening of regulatory processes.20 (This output was monitored by IR indicator 6.) [See Annex 9.] This was not presented for Cabinet approval before Project close.21

Post-disaster response was also strengthened through the acquisition of equipment and software that will facilitate future post-disaster building assessments. The United Nations Office for Project Services (UNOPS) was hired to digitally adapt a tablet-based system to collect damage data and monitor housing recovery, originally designed for Haiti and Nepal earthquake recovery to reflect MOI's internal procedures.

51. At closing, the GOT is judged to be more resilient to natural disasters than it was before the Project due to the development of the technical, policy and regulatory tools supported by this component, as well as by the extensive participation of key government officials in the Tonga Building Code. Tonga lacks an overall DRM law; the emphasis in laws and policies has historically been on emergency response to hydrometeorological disasters. However, this is changing, and the Housing Recovery Policy and other outputs of this component are expected to serve as examples of the types of sector-specific instruments required throughout the government. The achievement of PDO2 is Modest.

18 Kingdom of Tonga/ Ministry of Infrastructure, June 2018 (Rev 2/2019), “Tonga Housing Recovery Policy: Housing Recovery that Builds Resilience.” MOI/TCIRCRP/CON26. Priscilla M. Phelps, Consultant. 19 Kingdom of Tonga/ Ministry of Infrastructure, 2018, “Tonga Hurricane House Identification Guide (1982 – 2017),” V2.0 Final, MOI/TCIRCRP/CON23 & CON24. Mikael Gartner, PE and Ringo K. Fa’oliu, Consultants.

20 The Domestic Dwelling Structural Supplement is a sub-section of the NBCT that will provide deemed-to-satisfy criteria for the design of single-story residential structures. Previously, the code included structural requirements that were in excess of what is necessary or practical for residential construction. 21 Kingdom of Tonga/ Ministry of Infrastructure, 2018, “Review, Strengthening & Update of the Tonga Building Code: Completion Report, Final, and draft Building Code Supplement,” 30 November 2018, MOI/TCIRCRP/CON 25. Arup, Consultants.


Page 18 of 61

Other Project changes

52. The Project was originally designed to build Tonga’s ability to manage owner-driven reconstruction.22 Bank experience with housing recovery programs has shown that programs utilizing a participatory approach such as the Project’s SSR design strengthen resilience at the community level and generate more satisfaction than projects with minimal community involvement and contractor-executed repairs and reconstruction. Training of builders and homeowners strengthens human capital and community collaboration improves preparedness for future shocks and capacity to recover from them. Households also contribute more financially to complement government resources with the SSR approach, as was needed in TCIRCRP. (This is analyzed further in Annex 4. Efficiency Analysis.) However, governments need to build the capacity to manage these types of projects, which occurred only marginally in TCIRCRP.

53. With the number of SSR households reduced from 900 to 339, the SSR-related indicators PDO 3 (“eligible households accessed supported self-recovery funding“) [See para. 10] and IRI 2 (“Funding for SSR disbursed") [See Annex 9] were considered partially completed. While the Bank team did its best to explain good practice and preserve the original project design, GOT priorities had changed. It was assumed by the Bank that budget overruns arising from the changes in approach would be covered by the GOT. The ICR team judged that even though the count of housing units assisted was not affected by this shift in focus, it reduced the impact of the Project in building resilience at the community level and mobilizing local resources.

54. There were also some minor reductions in the scope of the Project not reflected in the RF. Housing-related debris removal was supported by the United Nations Development Program (UNDP) and NGOs and contracted out to firms hired for housing reconstruction under change orders to their contracts. (As a result, cash transfers to households were eliminated.)

Efficacy Rating Based on Revised PDO (20% of project disbursements): Modest (see Table 5)

PDO3a: To Strengthen the Climate Resilience of Housing. Rating: Modest.

55. The project restructuring approved by the Board on June 15, 2017 reduced the target numbers of housing units to be strengthened and the number of direct beneficiaries to reflect the final number of qualified households and beneficiaries: 1,021 project dwellings for 5,400 residents (revised PDO-level indicators 3 and 1 respectively [see Annex 9]), while reworking the PDO to emphasize climate resilience. Ultimately, 1,031 housing units in the Ha’apai Island Group were reconstructed or repaired according to approved plans and resilient standards, slightly exceeding the final revised target, but with a higher proportion of repairs relative to reconstruction. The procedures for ensuring the climate resilience of repairs and reconstruction were the same as those described in para. Error! Reference source not found..

PDO3b: To Strengthen the Climate Resilience of Community Facilities. Rating: Substantial.

56. The larger community facilities were removed in the restructuring so that the target to repair and strengthen 18 smaller church halls and other community facilities (referred to in the revised RF as “selected community

22 “This project introduces a more systematic approach to owner-managed repairs and reconstruction than has been applied in prior reconstruction projects in Tonga. Owner-managed activities of this kind have been shown in other countries to accelerate recovery, lower costs, and reduce risks.” TCIRCRP Project Appraisal Document, p. 5


Page 19 of 61

facilities”) was completed per IRI 2 [see Annex 9]. The repairs to these facilities were also supervised by the BIs to ensure climate resilience and the facilities are now in use for various religious and community functions.

PDO4: Strengthen the Recipient’s preparedness to recover from future natural disasters. Rating: Modest.

57. The restructuring revised PDO-level indicator 4 to “national resilient reconstruction and recovery mechanisms and standards developed” [see Annex 9] with the target, as reflected in revised IRI 4 and 5, of the THRP and the NBCT revisions developed and submitted to the Task Force Group (TFG) for endorsement.23 The two outputs were completed by Project close (along with other outputs described in Para 50), but at that time the TFG was no longer meeting regularly and could not endorse them.

58. With respect to approval of the THRP and the NBCT modifications, the agencies that composed the TFG served in advisory roles during preparation of both and are therefore well aware of the content of both. (Reaching consensus is an important aspect of policy-making in Tonga.) For the NBCT modifications, approval by Cabinet requires a series of steps including public communications and a transition period of six months. MOI has prepared a plan to advance this process. The involvement of key government agencies in the development of both outputs makes it likely that they will be approved within the next year, but the timing cannot be predicted.

Justification of Overall Efficacy Rating: Modest 59. Project Efficacy is rated as Modest each for the original PDO and revised PDO (see table 5). For PDO1a and 1b,

the ratings are assessed as Modest as overall targets achieved on time but with compromises in quality and a larger proportion of repairs versus reconstructed houses. PDO1c is rated negligible due to the lack of resources to restore basic services to a large proportion of repaired and reconstructed houses. PDO2 is rated Modest due to the quality of the outputs, although approval of the NBCT modifications by Cabinet is still pending. For the revised PDOs 3a and 3b, the PDO-level indicator targets were achieved on time with compromises in quality and a larger proportion of repairs versus reconstructed houses and were therefore rated as Modest. The Activities under PDO4 received a 5-month extension and produced quality outputs, but with approval of the THRP and the NBCT modifications still pending, this PDO is rated Modest.

C. EFFICIENCY

Assessment of Efficiency. Rating: Modest [See Annex 4. Efficiency Analysis] 60. The rating of Modest for Efficiency reflects the judgment that the efficiency was below expectations when

measured against other post-disaster housing reconstruction operations, including those implemented previously in Tonga. The original unit costs for house reconstruction and repair were based on costs from the 2002 World Bank-financed Tonga Cyclone Emergency Recovery and Management Project (TCERMP/ P075171) in Vava'u. Completed in 2003, the project entailed the construction of 470 two-room houses by an international firm and third-party supervision by a separate international firm. The unit cost for the TCERMP two-room house was USD9,471 (TOP16,670). The TCIRCRP unit cost estimate in the PAD was nearly twice this amount, at USD 18,000 (TOP32,500), based on a costing exercise carried out by MOI during preparation, and excluding a contingency of USD700 thousand. The logistical and land ownership issues in TCERMP were similar to those in TCIRCRP, including the challenge of getting land consents, which caused delays that resulted in compensation for some contractors.

23 The Task Force Group was an inter-ministerial body that served as the Steering Committee for the Project.


Page 20 of 61

TCERMP also provided matching grants for repairs up to TOP5,000 to 368 beneficiaries.

61. The financial analysis shows that in TCIRCRP there was an overall reduction of 6 percent in the number of households assisted from 1,100 to 1,031 as the result of finalizing the beneficiary qualification process. Within the total, there were changes in each category. The count of two-room contractor-built houses for vulnerable families decreased from 200 to 196 (-2 percent) while the unit cost increased from original estimates by 29 percent. The count of households receiving assistance for reconstruction or major repairs (A2A) decreased by 42 percent from 350 to 204, and increased in unit cost by 51 percent, from TOP16,500 to TOP24,909 as the implementation approach changed from fixed subsidies to contractor-built housing. The number of beneficiaries receiving A2B and A2C repairs increased by 15 percent from 550 to 631, while the average repair cost increased by 94 percent from TOP4,018 to TOP7,806. [See Annex 4, Table 1]

62. Several factors contributed to unit costs increases, including: (i) design changes following a wind load assessment of the A1 two-room house and the A2A one-room house; and (ii) government decisions to: (a) engage contractors to build one-room houses for all beneficiaries in category A2A, rather than providing subsidies to households; (b) engage contractors to carry out the first phase of A2B and A2C repairs; (c) increase the maximum assistance for repairs to TOP8,000 and TOP12,000 and change to an “as-needed” costing from a fixed subsidy approach. Collectively, these changes increased the cost of each output.

63. The original TCIRCRP project design also embraced the concept of households funding a portion of repair and reconstruction costs and characterized the Project’s support as a subsidy to households that was to be leveraged with the household’s own financial or in-kind contributions. This feature of the Project was diminished with the increase in contractor-built reconstruction and repairs and cancellation of the SSR firm. The Project’s repair reimbursement subcomponent demonstrates the use of public funds to leverage private contribution. Households who received repair subsidies that averaged TOP5,200 had spent an average of TOP7,700, representing an additional 50 percent household contribution. A number of A1 and A2A recipients also added onto their units immediately following their handover (see Annex 8, photos 5 and 9). However, there was no entity (such as the SSR firm) to encourage and coordinate household contributions.

64. The Project's implementation efficiency was affected by several factors, as discussed in Annex 4. These included: (i) high staff turnover in the PMU, (ii) weak project management systems, (iii) the reduction of the SSR component and elimination of the SSR firm; and (iv) procurement and land consent issues that absorbed considerable staff time to resolve.

65. There are not yet sufficient data to analyze the economic return of government's (or households') investments in resilient housing in Tonga, using expected loses with and without the investments. However, the pattern of housing reconstruction from previous cyclones provides some evidence of a high rate of return. Ha'apai has been one of the islands that has received the most government assistance with reconstruction since 1977, having received 42 percent of all housing units reconstructed nationally, while representing less than 7 percent of the country’s population. The analysis conducted under Component B showed that houses constructed after Tropical Cyclone (TC) Isaac in 1982 and TC Waka in 2001 that are still occupied and when properly maintained continue to withstand cyclones, even as the severity of storms has increased, suggesting a design life of 20 to 30 years.


Page 21 of 61

D. JUSTIFICATION OF OVERALL OUTCOME RATING: Moderately Unsatisfactory

66. The PDO was highly relevant to the country’s situation and needs as a small island nation that is highly susceptible to natural disasters. The Project’s original design concept was sound; however, delays were experienced addressing the beneficiary tenure security issue that was resolved through a Level 1 restructuring.

67. The total number of repair and reconstruction outputs was similar to that originally planned, although the proportion of houses that were reconstructed or received major repairs was lower than planned. Unit costs of reconstruction and repairs generally exceeded original estimates, in some cases by a considerable margin and compromises were made that eliminated basic services to accommodate budget overruns. While the Project received more than 1,000 complaints during implementation, beneficiaries reported being satisfied with the overall outcomes. The experience gained in TCIRCRP has motivated Tonga to put in place policies and operational approaches that will improve future housing recovery efforts. Table 5 shows the application of the split assessment, with the overall outcome as Moderately Unsatisfactory.

Table 5: Table showing the individual and overall ratings

Before Restructuring After Restructuring

1 Relevance of Objective High High 2 Efficacy Modest Modest PDO1a Modest

PDO1b Substantial

PDO1c Negligible

PDO2 Modest

PDO3a

Modest PDO3b

Substantial

PDO4

Modest 3 Efficiency Modest Modest Outcome rating Moderately Unsatisfactory Moderately Unsatisfactory Numerical value of outcome

ratings 3 3

Disbursement $11.01 M $2.8 M Share of disbursement 80% 20% Weighted value 2.4 (3x0.8) 0.6 (3x0.2) Final Outcome Rating 2.4+0.6=3 =MU

Gender 68. This was not a gender-tagged operation and the Project had no clear results chain leading to improved outcomes

for female-headed households. The RF indicator on female beneficiaries was designed to capture the proportion of beneficiary households with female heads, which is simply demographic information. Overall, 278 female-headed households received Project support (27 percent of all households). This exceeds by almost 15 percent

E. OTHER OUTCOMES AND IMPACTS (IF ANY)


Page 22 of 61

the number of female-headed households enumerated in the 2011 census.24

69. Vulnerability criteria were used to determine the type of assistance beneficiaries received. The Project provided a two-room, contractor-built house for the 196 most vulnerable households, determined by considering factors such as the gender of the head of household. There is no evidence in the beneficiary survey that female heads of household were disadvantaged by this process, although gender was not the only criteria. However, monitoring the representation of women in the vulnerable group, the level and timing of assistance provided to them, their participation in training and their satisfaction would have been useful from a gender perspective.

70. The Project’s requirement to get consent from land owners before building exposed women to the discretion of their husbands’ family or their brothers, but all consents were ultimately secured. The beneficiary list validation process undertaken in May 2015 revealed that widowed female beneficiaries preferred the option of moving to alternative land provided by the government, because widowed females normally have no access to land in Tonga.25 Ultimately, this option was not available to these beneficiaries as long as alternatives could be found. It would have been advantageous for women if land tenure insecurity had been included among the vulnerability criteria. Future housing projects in Tonga should include more detailed consideration of gender issues.

Institutional Strengthening 71. Building Inspectors: The Project funded the hiring of six BIs to be trained and deployed to Ha’apai to develop

repair plans, supervise repairs, and inspect the work of contractors. Following the completion of their Project contracts, all six BIs became MOI staff.

72. Capacity enhancement: MOI and the GOT have tools in hand to strengthen the country’s capacity for risk reduction and recovery as a result of the activities carried out under Component B, including the draft THRP and the updated NBCT. Equipment and protocols for building damage assessments have also been updated.

Mobilizing Private Sector Financing 73. Not applicable.

Poverty Reduction and Shared Prosperity

74. The Project focused on reducing the length of time affected households were displaced. Studies show that disasters can have negative economic and social effects on households for years afterwards and that the sooner recovery begins, the better chance there is of minimizing long-term impacts.

75. Vulnerable households were defined in the PAD as those whose recovery was likely to lag behind other affected households without additional assistance, as agreed with the community, and included all those on more remote and heavily affected islands. The Project provided a two-room, contractor-built house to the 196 most vulnerable households, determined by considering factors such as the gender of the head of household and dependency

24 According to the 2011 Tonga Census of Population and Housing, there were 6,616 residents in 1,266 households in 2011, for an average household size of 5.2 persons. Of these, 243 households or 19% were headed by females. 25 Kingdom of Tonga/ Ministry of Infrastructure, 2015, “Land Consent & Validation Report, June – July 2015.” Civil Society Forum of Tonga.


Page 23 of 61

ratio.

76. At closing, the beneficiary survey showed that 90 percent of Project beneficiaries were satisfied with the support provided by the Project.26 Most beneficiaries were still living in their repaired or reconstructed houses.27 It was not possible to evaluate the impact of the Project on poverty indicators.

Other Unintended Outcomes and Impacts 77. Delays and disputes provoked by process to ensure tenure security. The process to secure signed land consent

forms for beneficiaries eligible for assistance under components A1 and A2A that required 25-35 year security of occupancy affected relationships among some family members and between land holders and tenants where the tenant was under an informal arrangement with the land holder, e.g. house-sitting whilst the owner was working overseas. At least one dispute resulted in legal action. [This issue is described in detail in Annex 7.]

78. Houses constructed for ineligible households. In spite of an arduous beneficiary selection process, four houses were built for beneficiaries who were not eligible, and some beneficiaries were assigned the wrong benefit. These cases were all largely resolved, either by adjusting the benefit or seeking a reimbursement from the beneficiary or the government. These houses were removed from the list of project outputs.

79. Success of reimbursement subcomponent. A number of households in Ha’apai made repairs on their own prior to knowing whether they qualified for assistance from the Project. Household that would have qualified were permitted to apply for reimbursement of up to TOP6,000 under an activity added during project implementation. In all, 42 households received this reimbursement.

III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION

80. Rapid project preparation and inadequate stakeholder input. The post-disaster context and the perceived need to approve the Project quickly were the prime factors that affected preparation. GOT staff participated in the two preparation missions, but they were also very occupied with post-disaster response and early recovery activities. The missions also met with religious organizations, non-governmental agencies, including those of the United Nations Group and bi-lateral delegations, but made limited contact with local government officials, local NGOs or community members. GOT officials interviewed for the ICR referred to the “mixed blessing” of rapid project preparation. The chief benefit was that the GOT knew quickly that it would have resources for housing reconstruction and could communicate that to the public; however, the drawback was a lack of input and buy-in to the project design from key stakeholders, including affected households, local government officials and NGOs in Ha’apai, which later complicated implementation.

81. Misunderstanding of local tenure arrangements. As described in Annex 7, the Bank required that all households eligible for a two-room house (A1) or for subsidies for major repairs (A2A) have a reasonable period of post-

26Kingdom of Tonga/ Ministry of Infrastructure, 2018,“Safeguards Completion and Results Report, Tropical Cyclone Ian Reconstruction and Climate Resilience Project (TCIRCRP),” November 2018. 27 The one-room and two-room houses built by the project were 17.28 M2 and 34.56 M2, respectively.


Page 24 of 61

reconstruction occupancy security, in line with previous housing reconstruction projects in Tonga. However, the arrangements established at appraisal were not feasible and were inconsistent with Tonga land law. Once the problem was identified, extensive discussions between the Bank and the GOT and within the Bank on the best resolution delayed the delivery of Project benefits and absorbed excessive time from all parties. Ultimately, the GOT’s view prevailed, following which the PDO was reformulated and the Financing Agreement and the social analysis updated in the Level 1 restructuring of June 2017.

82. Response to political context. The GOT made ambitious commitments to the affected population regarding the speed with which reconstruction would occur. In trying to be responsive, the Bank agreed to GOT’s goals, such as completing all house reconstruction within eight months, underestimating the time required to finalize the beneficiary lists and establish the systems and procedures to ensure smooth implementation.

83. Choice of MOI as implementing agency. MOI was given responsibility for housing reconstruction, since there is no housing ministry in Tonga and MOI had assumed this role in previous disasters. Consequently, the Bank’s Transport Sector Consolidation Project (TSCP) became a convenient source of human and financial resources for MOI to prepare TCIRCRP and the Task Team Leader (TTL) of that project, a transport engineer, led the preparation of this Project. These factors contributed to a perspective that housing reconstruction is principally a physical construction challenge, when Bank experience shows that effective housing reconstruction projects–especially those that require household and community support--depend heavily on managing the social dimension. Managing social mobilization was recognized as a risk at appraisal, and thus the SSR firm was included in the Project design, although this procurement was canceled during implementation.

B. KEY FACTORS DURING IMPLEMENTATION

Factors under government and/or implementing agency control

84. Delayed finalization of the beneficiary list. The Financing Agreement fixed August 31, 2014–three months after Board approval--as the date by which the beneficiary list should be completed; however, the list was not officially finalized until August 2017. Many factors contributed to delays: (i) uncertainty resulting from the land consent process; (ii) inconsistent household and housing damage assessment data, although (or possibly because) multiple surveys were conducted; (iii) failure to authorize an objective third party to prepare the list (leaving the TFG to serve this role, rather than acting only as the final arbiter); and (iv) irregularities in the qualifications process that took time to resolve. The lack of a final list delayed the delivery of housing solutions and created confusion for contractors and beneficiaries. (For instance, almost 60 percent of the grievances received by the Project were related to the qualification process, four houses were built for unqualified recipients and six occupants had a landholder’s house built at a new location, creating the need to build additional houses for landholders.)

85. Poor communications with beneficiaries. The Bank emphasized the need for two-way communications with beneficiaries during preparation. In fact, the TSCP Project Support Team (PST) contracted the first communications specialist even before Project approval. Yet, over the implementation period, communications tasks were assigned to the Governor, the local PMU, the BIs, and the Community Liaison Officers. Well into implementation, eligible households were unaware of their damage or vulnerability category, or proposed


Page 25 of 61

benefits.28 While the need for better communications is mentioned repeatedly in aide memoires, and numerous efforts were undertaken, no systematic resolution (such as appointment of a communications chief) occurred.

86. Participatory aspects of Project cut back. The PAD anticipated the creation of “Town Committees,” local validation of beneficiary lists, creation of household groups to manage SSR activities, and—most importantly—contracting a firm to coordinate all SSR activities. The SSR firm was to establish a Recovery Center, organize training, provide technical supervision to households, support the Governor’s office, and manage the resolution of grievances. While local actors were involved in specific activities (the initial beneficiary lists were posted locally, several large community meetings were held, and the Governor’s office served as an interface with affected households on certain issues), the full SSR vision was not realized largely because procurement of the SSR firm was canceled. More than two-thirds of funds budgeted for household subsidies were then used to pay construction firms. At the time, the reasons for this change were given as speed and the lack of response to the SSR firm procurement. However, the procurement process for the SSR firm was well underway when it was cancelled in late 2014. Instead, the Project decided to utilize the building contractors already onsite in Ha’apai to carry out some of what were originally planned to be SSR activities. These contractors were experiencing delays with A1 house construction due to problems securing land consents. It may have appeared more efficient to expand contractor workloads than to set up the SSR system. However, retreating from the SSR approach ultimately contributed to the cost overruns that made it necessary to eliminate basic services in the 2017 Level 1 restructuring.

87. Organizational arrangements and turnover. The Project’s organizational arrangements included the TFG (an inter-ministerial steering committee), project management responsibilities split between two management units in MOI (TSCP TSP and TCIRCRP PMU) and a satellite PMU in the field. Project management was located in the capital until a Deputy Project Manager and Master Builder were hired for Ha’apai in July 2015 and September 2015, respectively. While not unusually complex, these arrangements did not always operate smoothly. Aide memoires repeatedly request that the PMU clarify responsibilities for decision making and lines of communication. High staff turnover was also a factor, as was limited use of the Project Operations Manual (POM) as a project management tool.

88. Budget shortfalls. The ISR of December 2015 reported that the Project was facing a funding shortage of USD4.13 million due to two main factors: (a) design changes, including the addition of electrical service and water and sanitation and an increase in the wind resistance to 70 m/s for new construction to comply with the Tonga Building Code; and (b) over-reliance on contractor-led construction and repairs. Implementation progress was downgraded to Moderately Unsatisfactory in 2015 as the result of this situation.

Factors subject to World Bank Control

89. Sensitivity to cultural context. Culture has great influence on housing reconstruction projects, affecting how households manage shocks; relate to the land; situate and design their houses; and participate in community governance. Due to the abbreviated preparation period, cultural practices and preferences were not sufficiently investigated or taken into account in project design. The situation with occupancy arrangements and views on

28 Kingdom of Tonga/ Ministry of Infrastructure, 2015, “Validation of Cyclone Ian Beneficiary Lists Report, December 2014 – February 2015.” Civil Society Forum of Tonga, Consultants.


Page 26 of 61

the fairness of assistance schemes were not detected during preparation but later had wide-ranging repercussions. [See para.77.] During implementation, the local population was not adequately consulted on the decision to build one-room houses, which were considered culturally inappropriate.29 A social assessment would have helped in identifying and ensuring sensitivity to cultural factors. Substantive community involvement would have made it more likely that cultural concerns would be surfaced and addressed during implementation.30

90. Inadequate project management systems. MOI lacked project management systems capable of tracking both financial and physical progress as well as data on beneficiary households. Both the Tongatapu and Ha’apai PMUs had internet access, but they lacked a shared system for storing, accessing and backing up information. BIs maintained inspection information on laptops provided by the Project but these were not backed up. Most Project data were shared using Excel spreadsheets or hard copy reports. A management information system design and a cloud-based application called Reconstruction Management Database were worked on early in the Project but were never implemented. However, a cloud-based grievance management database, also designed by the Project, was used extensively and provided quality data while recording just over 1,000 grievances.

Factors largely outside the control of government and/or implementing entities 91. Political context. A transition toward more representative government, snap elections, and other political

pressures affected the stability of Project staffing and the ability of the GOT to implement the Project according to the agreed design. In interviews, the ICR team heard that there was an expectation that the World Bank would have better anticipated these risks ex-ante and managed them when they arose.

92. Logistical challenges of remote location. The Ha’apai Island Group is located 180 km north of the main island of Tongatapu, from where all project staff, equipment, and building materials were dispatched. Tonga itself imports nearly all construction materials and so delays and stockouts occur regularly. Transport between Nuku’alofa and Ha’apai is somewhat irregular and maritime infrastructure is limited. Internet access was unreliable for some time after TC Ian. In addition, BIs and other local staff needed to move expeditiously among the islands to supervise contractors and homeowners participating in SSR. These factors increased logistical and supply challenges and costs. A barge was procured under the Project and some improvements were made to local marine infrastructure; however, breakdowns and delays hampered implementation. Contractor payments were often delayed until a specific item was delivered to complete a house or SSR material delivery. Illogically, given the context, no motor boat was provided to the Ha’apai PMU; instead they relied for four years on hiring services to travel between islands. With better planning, better equipment, and possible hiring of a logistics expert, it appears that these risks could have been better managed.

93. Summary. The challenges in obtaining the land consents for the reconstructed house for occupants under informal arrangements resulted in a Level 1 restructuring, approved by the board in June 2017, where the security of occupancy was reduced from 30 years to 4 years. (See Annex 7 for details.) Once the land consent and security of occupancy issues were resolved in June 2017, the pace of reconstruction and repair picked up. Due to progress

29 The ICR team received extensive feedback concerning the design of the assistance scheme and the form in which housing benefits were provided. In some cases, this feedback called into question normal Bank practices. For example, while Bank projects normally provide uniform assistance to all or preference to lower-income households, Ha’apai residents expressed concern that without adequate support to recover their housing, higher income families who form the backbone of the local economy could leave the islands. 30 Sample terms of reference for a social assessment are included in the draft Tonga Housing Reconstruction Policy as Annex 4.


Page 27 of 61

on the technical assistance for PDO2 and PDO4 and the improvements in the reconstruction and repair implementation, the Project was upgraded to MS in December 2017.

IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E)

M&E Design 94. The GOT rapid damage assessment results were already available during the scoping mission in February 2014.

These included estimates of houses damaged and destroyed. The numbers were refined over the next six months based on 11 additional surveys including a household survey (“mini-census”) conducted by the Tonga Department of Statistics (TDOS). Survey data were used to categorize housing damage and household vulnerability.

95. The PDO and PDO-level indicators developed at entry had some weaknesses. While the PDO1a “restore housing” had an associated indicator, PDO 1b and 1c “restore community facilities and basic services” did not have PDO-level indicators. As there was no gender results chain in the Project, the PDO-level indicator “direct beneficiary of which female” was not a meaningful measurement. “Number of eligible households that accessed the SSR funding” should have been an IRI, not a PDO-level indicator. The original PDO-level indicator target for the national housing reconstruction policy “policy implemented” was ambitious, although the policy was ready for Cabinet submission at closing. The RF should have measured the number of tradespeople, community members and GOT staff (especially BIs) who received training related to PDO2. Finally, the M&E design did not consider any beneficiaries other than households, so owners and users of community facilities were not assessed for their level of use and satisfaction.

M&E Implementation

96. The data collection approaches for project monitoring were outlined in the POM and contemplated a management information system (MIS) as the key tool to be used by the PMU. Instead Excel spreadsheets were the principal monitoring tools. This approach did not allow for easy tracking, cross-referencing or validation of project data.

97. Both the PDO and intermediate indicators were revised at restructuring to better reflect the PDO, implementation changes, and adjusted outputs. However, this did not affect the data collection on the physical reconstruction.

98. When the GOT canceled the procurement of the SSR Firm in late 2014, its household monitoring responsibilities were in effect transferred to the Ha’apai PMU. Staffing transitions in both the PMU and the Bank’s task team around that time led to notable gaps in the monitoring and reporting of the status of beneficiary households.

99. After the first 18 months on implementation, MOI’s detailed physical progress reports to the Bank became more irregular. Safeguards reports containing basic physical progress data were prepared on schedule (although not always forwarded to the Bank). The BIs collected inspection and physical progress data that were consolidated in Excel spreadsheets and reported monthly to the PMU. Data on physical and financial progress and grievances were consolidated by the PMU and presented in hard copy at TFG meetings. Approximately 48 TFG meetings occurred between February 2014 and August 2017 (just over one per month); after which time the meetings appear to have ceased.


Page 28 of 61

M&E Utilization 100. The task team used monitoring reports, TFG meeting minutes, and data collected during frequent implementation

support missions to assess and report on progress via aide memoires. These project monitoring data, particularly the TFG minutes, allowed the GOT and the Bank to assess progress against the indicator targets, and identify implementation issues, ranging from contract management to fiduciary issues including procurement, financial management and safeguards.

Justification of Overall Rating of Quality of M&E 101. Overall rating of Quality of M&E is Modest. There were challenges in monitoring both the construction progress

and the results indicators due to the lack of enforcement of standardized data collection mechanisms for the construction and repairs.

B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE Environmental Safeguards Compliance

102. The Project triggered two safeguards policies on Environmental Assessment and Involuntary Resettlement and was a Category “B” Project. An Environmental Management Plan (EMP, Report #E4513 REV) was developed and disclosed to the Infoshop on April 14, 2014 and locally on May 8, 2014. The main environmental risks related to the handling of construction and demolition waste, including ACM and treated lumber, and the contamination of groundwater. During implementation, the Project’s Safeguards and M&E experts visited Ha’apai regularly to monitor construction and to ensure compliance with the EMP. No major environmental issues arose except for delays in completing asbestos removal. Asbestos, construction and demolition waste, and toxic material were managed using methods consistent with the EMP. The contractor staging sites were rehabilitated post-construction. Between October 2017 and June 2018, the Safeguards Expert was, for unknown reasons, restricted by the Implementing Agency from travelling to Ha’apai. While construction had mostly been completed, this may have affected the quality of the final safeguards report. Both policies were complied with satisfactorily.

Social Safeguards Compliance 103. To comply with the Involuntary Resettlement Policy triggered for this Project, a Resettlement Policy Framework

(RPF, Report #1621 REV) was prepared and disclosed in country and in the InfoShop on April 14, 2014. The principal safeguards issue identified in RPF was the taking of land for (a) the relocation of beneficiaries to address environmental or tenure security issues on their current plot or (b) the establishment of a landfill site. “Affected persons” were those who involuntarily relinquish land or assets to accommodate the relocation of beneficiary households.

104. The RPF also established that if the Project resulted in minor involuntary resettlement impacts, the GOT would prepare abbreviated resettlement plans (ARAPs). No land acquisition or involuntary resettlement took place during the Project, and no ARAPs were prepared.

105. The principle reasons for relocation (possibly resulting in involuntary resettlement) included the refusal of a land


Page 29 of 61

holder to provide consent for an occupant of his land who was affected by TCI to rebuild onsite. [See Annex 7 for an explanation of how issues related to land consent affected the Project.]

106. A grievance redress management system (GRM) was established to monitor beneficiary complaints. For those unable to access the online GRM, the PMU’s Community Liaison Officer would log grievances. When discontinued in September 2017, the GRM contained over 1,000 records.

Procurement and Fiduciary Compliance 107. All procurement of Bank-financed activities was carried out in accordance with the World Bank’s Procurement

Guidelines. No major procurement issues were encountered during the Project. Project procurement was rated moderately satisfactory throughout implementation, largely as the result of slow implementation.

108. In Spring 2015, irregularities in construction contract payments were identified. The GOT hired an attorney to conduct an initial investigation, followed preparation of a GOT audit in May 2015. In total, overpayments had been made to four contractors based on fraudulent document that were submitted and approved. Of the four firms, three reimbursed the Project. The GOT reimbursed the Project USD400,000 (TOP965,737) for the remaining unreimbursed overpayment. This contractor was subsequently barred by the World Bank following an INT investigation. Weaknesses in internal controls and site inspection procedures were identified, and measures were taken to improve inspection protocols. Overall, the Bank and the GOT collaborated well once the problem was detected.

109. In relation to the overpayments described under this section, there were cases where payment documents were not correctly signed off by the accountant. Otherwise, financial management covenants were met and IFRs and audits were conducted and submitted on time. The opinions on all audits were “unqualified”.

C. BANK PERFORMANCE

Quality at Entry 110. Tropical Cyclone Ian struck Tonga on January 11, 2014. A scoping mission was held from January 30 to February

4, 2014, during which time the team managed to visit nine affected islands. A joint project preparation and pre-appraisal mission followed from March 17 to April 4, 2014. The IDA Crisis Response Window (CRW) grant and credit were approved on May 8, 2014, three and a half months after the scoping mission. The GFDRR grant was approved in March 2015. A decision was made to leverage the existing TSCP PST to expedite the delivery of this emergency recovery project. The Project team was based in Sydney, which--combined with the short preparation duration--kept preparation costs to USD239,000.

111. The World Bank team considered lessons learned from the previous housing reconstruction projects in Tonga, especially the 2009 TPTRP/ P120595 and 2002 TCERMP. These lessons included ensuring good supervision of contractors and using proven cyclone-resilient house designs, and global good practices on promoting owner-managed recovery to ensure a more equitable distribution of available resources and to build social capital and resilience.

112. However, the Bank’s urgency to prepare the Project resulted in some key stakeholders feeling inadequately


Page 30 of 61

consulted. The Bank team’s fast-moving appraisal also did not fully appreciate Tonga’s land tenure and informal occupancy arrangements. At negotiations, the GOT shared its concerns about the feasibility and legality of requiring that the GOT provide a 30-year security of occupancy for all beneficiaries with informal occupancy arrangements. This obligation subsequently caused significant delays in implementation and ultimately led to the Level 1 restructuring in June 2017. [See Annex 7.]

113. In hindsight, the PAD’s Operational Risk Assessment Framework (ORAF) correctly identified the risks that manifested during implementation. The task team might have mitigated these risks by using the ORAF as a monitoring tool during implementation.

Quality of Supervision

114. From the beginning, the Project’s emergency nature and concerns about its operating context motivated extensive supervision by the task team. Delays in identifying beneficiaries and obtaining land consents, concerns about the PMU set-up, and other challenges required consistent oversight. Political uncertainties, including a snap election in November 2017, led to two instances when key personnel at the PMU were replaced. The task team responded to this and other challenges in a flexible manner and was able to work with GOT counterparts to adjust the Project so that, in the end, physical outputs were delivered on schedule.

115. Supervision of safeguards and other fiduciary aspects were also provided adequately and frequently. Aide memoires were candid about the issues arising and covered them in detail. The Project saw three TTLs over 4.5 years, however, as there was an adequate period where these TTLs were involved in the Project as team members prior to assuming the TTL role, these hand-overs generally caused minimum disruption.

Justification of Overall Rating of Bank Performance

116. The Bank team mobilized very quickly and delivered the Project in about four months. However, issues not tackled in preparation fell to the task team for resolution during implementation. The task team provided frequent, close project monitoring and hands on support, and worked with the GOT to resolve the land tenure issues with a major restructuring. The team operated flexibly in a complex, high-pressure environment. Given this mixed performance, the World Bank’s overall performance is rated Moderately Satisfactory.

D. RISK TO DEVELOPMENT OUTCOME

117. The following risk factors and mitigation actions were considered.

Risk Factors Mitigation New and rebuilt houses are not maintained to climate resilient standards.

The Bank will continue to support MOI on monitoring of the condition of the houses through the ongoing Pacific Resilience Program (PREP Tonga, P154840). Given the interest from the GOT in mobilizing grant funds to support approval, dissemination, and implementation of the Housing Recovery Policy, including retrofitting and risk reduction activities, opportunities will be sought.


Page 31 of 61

Ha’apai residents, including those who received project assistance, leave the island due to concerns about local climate change effects (e.g. sea level rise, coastal erosion).

PREP-SPC project (P147839) work plan includes the generation of a Digital Elevation Model of the whole country. A study will be conducted to further assess the risk of the Ha’apai island group from the effects of climate change. NEMO and MIA should continue to support the local DRM committees who are working to strengthen local risk management capabilities. A grant for HRP implementation could include support to the local DRM committees for dissemination of the Policy at the local level.

The draft updated Tongan Building Code is not approved or implemented.

The Bank will support MOI on the implementation through the ongoing Pacific Resilience Program. This could include organizing stakeholder workshops to review the proposed revisions and consultant recommendations in detail.

The draft National Housing Reconstruction Policy is not approved by the relevant authority or implemented.

World Bank IDA18 DPL operation has longlisted the (policy direction) approval of this policy as a prior condition.

Loss of trust in institutions due to experience with the Project.

Given Ha’apai’s vulnerability, its residents’ well-being depends on following the advice of institutions such as MOI, NEMO and the Meteorological Agency. MOI is continuing to carry out activities deferred from implementation, including the installation of water systems. NEMO is building new offices in Ha’apai that will allow it to work more closely with local officials and communities on DRM. The THRP establishes a more central role in housing reconstruction for the Ministry of Internal Affairs (MIA), whose mandate includes coordination with local governments and NGOs.

V. LESSONS AND RECOMMENDATIONS

118. Housing recovery projects are about more than infrastructure reconstruction, especially in a changing climate. In most countries, housing is a private good, and the involvement of government in the sector--even to support reconstruction—can have long-term consequences. Tonga illustrates the political and fiscal implications of governments assuming too much responsibility for risk management in the housing sector. Government’s generous support to housing reconstruction over the years—along with the increasing severity and frequency of storms--are creating an enormous contingent liability that is now reinforced by the public expectation that housing reconstruction will always be publicly funded. Like other governments in this situation, Tonga needs to create incentives that begin to shift the financial and technical risk back to households and to develop risk mitigation strategies through training and hands-on involvement of homeowners and communities in risk reduction. Financial tools such as insurance, that shift risk to a third party, are also needed. The Housing Recovery Policy developed under the Project and the GOT’s preparation of a disaster risk financing and insurance (DRFI) strategy can both help the GOT to confront this situation. However, an opportunity was lost when the SSR aspects of the Project were significantly reduced.


Page 32 of 61

119. Recommendation: Bank project teams should be prepared to explain the long-term consequences of various housing recovery project designs and the need for each project to contribute to longer-term reduction and rebalancing of risk between households and governments. This is easier to do when countries have policy frameworks for post-disaster housing reconstruction and DRFI in place that embody these goals. Outside of recovery projects, the Bank should assist governments of highly-exposed countries to develop policies and instruments for housing risk reduction that rebalance housing risk over time and produce more sustainable and effective responses when disasters occur.

120. Post-cyclone housing recovery projects can rarely be completed before the next cyclone season. The original post-Ian housing recovery policy advised that transitional sheltering solutions (not temporary housing) be supported, given the time that would be required to properly implement the Project. This could have included cash grants to hosting families or assistance to reinforce tents or other emergency shelters and more collaboration with NGOs. In the end, some families waited up to three years for assistance. A housing recovery strategy that considers interim housing conditions should accompany and support a recovery project. This will take some pressure off the implementing agency and permit a more regular and disciplined approach to project implementation.

121. Recommendation: Because a Bank investment project does not represent the entire recovery process, housing recovery programs should be accompanied by housing recovery strategies that focus on recovery outcomes important to affected households, identify realistic recovery times and actual sheltering options available to households beginning immediately after the disaster, and help governments manage the overall recovery process. This may include supporting transitional sheltering.

122. Culture provides not only the context for recovery but the means for survival. Major interventions like a reconstruction project should take pains to support, not undermine local cultural practices. With respect to housing and community recovery, culture influences everything: practices of ownership and use, housing design and construction, and the use of space inside and outside the home, etc. While the Project’s quick approval was greatly appreciated, misperceptions about land occupancy patterns, vulnerability, and what religious institutions could contribute, for example, created the impression that the Bank did not understand or care to understand the real Tonga.

123. Recommendation: Local expertise is needed to design housing projects and implementation approaches that not only are sensitive to cultural matters but take advantage of community resources and cultural practices. Project teams should take advantage of the flexibility that Bank procedures afford when modifications are required such as co-TTL ship arrangements for recovery projects that bring together expertise from the relevant sectors.

124. Households and communities always drive their own recovery – the question is whether Bank projects support or undermine this. Some changes made during implementation were intended to accelerate progress but had the effect of creating uncertainty and reducing the agency of beneficiaries and other local actors. Home owners had limited means to interact with Project staff and were sometimes reduced to submitting grievances to get attention to their concerns. The best way to speed up a reconstruction project and improve satisfaction with the outcome is to equip and empower those with the most interest in recovery – affected households.


Page 33 of 61

125. Recommendation: “It’s more efficient to have [1,000] households each concerned about one house, than to have 100 experts concerned about [1,000] houses.”31 Project design and implementation processes also need to avoid sidelining local officials and other potential local partners and thereby disincentivizing local initiatives.

126. Housing projects require enormous quantities of data, which can become a burden if not managed well. This includes data on households, housing, land, and damage as well as on the cost and timing of the recovery project. Spatial and census data are also critical for housing recovery projects. Systems for handling these data are both management tools and the means to provide transparency and predictability to stakeholders. The Project was an opportunity to demonstrate how data and information technology could make housing recovery more effective and efficient. It succeeded in some cases – such as the GRM database and the acquisition of the damage survey equipment for MOI. But other opportunities were missed, such as the installation of an integrated project management system with access for stakeholders, which left beneficiaries with no easy way to confirm their assistance options or when they would receive support.

127. Recommendation: Project management systems should be fit for purpose and supported with sufficient training until fully integrated with Project decision making. Time is needed to identify data needs and plan data collection and management protocols, ensuring that all survey data are geo-referenced to facilitate data integration. The Bank should help countries put coordinated data collection and management tools and systems in place before disasters, in order make recovery more efficient.

128. Reconstruction in remote locations presents special challenges, but these can be anticipated. Remoteness both increases vulnerability and undermines responses to shocks. Reconstruction projects in remote locations need to have operational strategies that specifically address the realities of working in these areas. Challenges related to logistics, communications, costs, and delays will all affect project planning and implementation, especially in small island states. It is also worth questioning whether the SSR approach is relevant in remote contexts. The ICR team assessed that the remote location did not necessarily make owner-driven reconstruction infeasible, only that it requires facilitation to ensure access to trained labor and materials. In fact, residents of remote locations tend to be more self-sufficient and to have few training opportunities normally. A housing project of the Church of Jesus Christ of Latter-day Saints (LDS) in Ha’apai that built 177 houses mostly for LDS members trained over 100 local residents–mostly heads of affected households, including from outer islands--with the assistance of the Tonga Institute of Science and Technology (TIST). LDS housing construction was completed well before that of the Project and some of those trained have formed their own construction enterprises.

129. Recommendation: Bank teams should carefully evaluate the impact of remote locations on reconstruction projects and include mitigation strategies to overcome the additional risks these locations create. National disaster risk management strategies should explicitly address the challenges of running disaster and climate-related operations in hard-to-reach locations. A social assessment should be conducted that

31 George Soraya, Lead Municipal Engineer, World Bank Indonesia office quoted in Abhas K Jha, et al, 2010, Safer Homes, Stronger Communities: A Handbook for Reconstructing after Natural Disasters (World Bank). https://openknowledge.worldbank.org/handle/10986/2409.


Page 34 of 61

explicitly analyzes the resources available for SSR projects, if this approach is being considered.


Page 35 of 61

ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS

A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Restore housing, community facilities, and basic services to the affected populationof Ha’apai

Indicator Name Unit of Measure Baseline Original Target Formally Revised Target

Actual Achieved at Completion

Direct project beneficiaries Number 0.00 5800.00 5400.00 5400.00

17-Jun-2014 30-Jun-2018 30-Jun-2018 30-Nov-2018

Female beneficiaries Percentage 0.00 40.00 40.00 40.00

17-Jun-2014 30-Jun-2018 30-Jun-2018 30-Nov-2018

Comments (achievements against targets): Target achieved. The revised target following restructuring reflects the number of final beneficiaries which was estimated for the original target.



Project dwellings in Ha'apai built, repaired or retrofitted to resistant standard

Number 0.00 1100.00 1021.00 1031.00

17-Jun-2014 30-Jun-2018 30-Jun-2018 30-Nov-2018


Page 36 of 61

Comments (achievements against targets): Target achieved. The revised target following restructuring reflects the number of final beneficiaries which was estimated for the original target. The proportion of the various support options provided to the beneficiaries changed during implementation. Please see main text for details. Objective/Outcome: Strengthen the country’s resilience to natural disasters



National resilient reconstruction and recovery mechanisms and standards developed

Text No policy Policy implemented Mechanisms and standards developed and submitted to Task Force Group for endorsement

Mechanisms and standards developed and submitted to Task Force Group for endorsement

17-Jun-2014 30-Jun-2018 30-Jun-2018 30-Nov-2018

Comments (achievements against targets): Target Partially Achieved. The Housing Reconstruction Policy and revised National Building Code was ready to be approved by the task force group, however due to factors out of control of the task team, the task force group was not being held regularly towards the end of the project.

A.2 Intermediate Results Indicators

Component: Strengthen the climate resilience of housing and selected community facilities for the affected population of Ha'a��pai



Communications strategy Text No strategy Communications strategy fully

Communications strategy fully

Communications strategy fully


Page 37 of 61

prepared and implemented implemented. implemented implemented.

17-Jun-2014 30-Jun-2018 30-Jun-2018 30-Nov-2018

Comments (achievements against targets): Target Achieved. This intermediate indicator was not revised during the project.



Community facilities repaired to a cyclone resilient standard

Number 0.00 0.00 18.00 18.00

17-Jun-2014 15-Jun-2017 30-Jun-2018 30-Nov-2018

Comments (achievements against targets): Target fully achieved. This indicator was added after restructuring in June 2017.



Effective implementation of asbestos removal plan and removal of asbestos containing materials undertaken in accordance to the plan

Text No policy or plan Removal of asbestos-containing materials identified by the asbestos removal plan completed.

Removal of asbestos containing materials identified by the asbestos removal plan

Removal of asbestos-containing materials identified by the asbestos removal plan completed.

17-Jun-2014 30-Jun-2017 30-Jun-2017 30-Nov-2018

Comments (achievements against targets): Target Achieved. This intermediate indicator remained the same during the course of the project. Component: Strengthen the Recipient's preparedness to recover from future natural disasters


Page 38 of 61



Development of a national post-disaster housing policy to support recovery from future disasters

Text No policy Policy implemented Policy developed and submitted to the Task Force Group for endorsement

Policy developed and submitted to the Task Force Group for endorsement

17-Jun-2014 30-Jun-2017 30-Jun-2017 30-Nov-2018

Comments (achievements against targets): Target partially achieved - the national housing recovery policy is ready to be approved by the Task Force Group. Due to factors beyond task team control, the TFG was not being held regularly towards the end of the project which prevented the policy to be approved by TFG. A post-Cyclone Gita housing reconstruction policy that stemmed from this national policy was approved in May 2019. This indicator was revised from "Development of the Ha’apai post-disaster housing eligibility policy that maximizes a supported self-recovery approach (public private partnership)" to "Development of a national post-disaster housing policy to support recovery from future disasters".



Tonga Building Code compliance strengthened

Text 0 0 Building Code revisions submitted to the Task Force Group for endorsement

Building Code revisions submitted to the Task Force Group for endorsement

17-Jun-2014 30-Jun-2017 30-Jun-2018 30-Nov-2018

Comments (achievements against targets): Target Partially Achieved. Draft submitted to the Building Code Authority within the Ministry of Infrastructure for approval at project closing. Due to factors beyond task team control, the Task Force Group was not meeting regularly towards the end of the project, which prevented the policy from being approved by the TFG before closing.


Page 39 of 61

B. KEY OUTPUTS BY COMPONENT

Objective/Outcome 1

Outcome Indicators 1. Direct Project Beneficiaries , of which percent female 2. Project Dwellings in Ha’apai built, repaired or retrofitted to resistance standard

Intermediate Results Indicators

1. Communications strategy prepared and implemented 2. Community facilities repaired to a cyclone resilient standard 3. Effective implementation of asbestos removal plan and removal of asbestos containing materials undertaken in accordance to the plan

Key Outputs by Component (linked to the achievement of the Objective/Outcome 1)

1. 1,031 houses reconstructed/repaired to a resilient standard 2. 5,400 beneficiaries reached, with 27% head of household being female 3. 18 community facilities repaired/reconstructed

Objective/Outcome 2

Outcome Indicators 1. National resilient reconstruction and recovery mechanisms and standards developed

Intermediate Results Indicators 1. Development of a national post-disaster housing policy to support recovery from future disasters 2. Tonga Building Code compliance strengthened

Key Outputs by Component (linked to the achievement of the Objective/Outcome 2)

1. National Housing reconstruction policy developed, ready for submission to Task Force Group/Cabinet 2. Tonga Building Code updated, training to local construction industry provided


Page 40 of 61

ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION

A. TASK TEAM MEMBERS Name Role

Preparation

Christopher Bennet Task Team Leader

Cristiano Costa e Silva Nunes Sr. Procurement Specialist

Stephen Paul Hartung Financial Management Specialist

Colleen Mary Gollach ST Consultant Housing and Program Design Specialist

Anil H. Somani Environmental Specialist

Beverley Ann McLean Social Specialist

MacKenzie Fillow ST Consultant Legal

Marjorie Mpundu Senior Council

Michael Bonte Grapentin Sr. Disaster Risk Management Specialist

Monica Moldovan Junior Professional, Civil Engineer

Nora Weisskopf ST Consultant Infrastructure

Renee Walmsley ET Consultant Social and Urban

Ross Butler Sr. Social Development Specialist

Shruti Pandya ET Temporary ACS

Supervision/ICR

Keiko Saito, Michael Bonte-Grapentin Task Team Leader

Cristiano Costa e Silva Nunes Sr. Procurement Specialist

Andrew James Hurley ST, Civil Engineer

Stephen Paul Hartung Financial Management Specialist

Colleen Mary Gollach ST Consultant Housing and Program Design Specialist

Rachelle Marburg Social Specialist

Felix Taaffe Environmental Specialist


Page 41 of 61

Wolfhart Pohl Lead Environmental Specialist

John A. Lowsby Team Member, ST Senior Engineer

Artessa Saldivar-Sali Team Member

Penelope Ruth Ferguson Team Member

Monica Augustina Cristina Moldovan Team Member

Ross James Butler Social Specialist

David William O'Meara Team Member

B. STAFF TIME AND COST

Stage of Project Cycle Staff Time and Cost

No. of staff weeks US$ (including travel and consultant costs)

Preparation FY14 10.690 140,269.07

FY15 28.560 69,312.61

FY16 13.553 29,272.00

FY17 0 0.00

Total 52.80 238,853.68

Supervision/ICR

FY15 4.602 102,251.27

FY16 4.831 179,085.48

FY17 17.527 176,323.04

FY18 20.183 133,247.52

FY19 0 53,348.61

Total 47.14 644,255.92


Page 42 of 61

ANNEX 3. PROJECT COST BY COMPONENT

Components Amount at Approval (USDM)

Actual at Project Closing (USDM)

Percentage of Approval (USDM)

Component A: Housing and Key Community Facilities Repair, Reconstruction and Climate Resilience

11.2 9.29 83%

Component B: Technical Assistance and Training for Enhanced Disaster and Climate Resilience

1.5 1.74 116%

Component C: Project Support 1.1 1.74 158%

Total 13.80 12.76 92%


Page 43 of 61

ANNEX 4. EFFICIENCY ANALYSIS

No economic analysis was prepared for TCIRCRP, due to its emergency nature. This analysis focuses principally on cost-effectiveness in terms of unit costs relative to the quality and quantity of physical outputs, as well as the factors that affected costs and other options that could have been considered.

The rating of Modest for Efficiency reflects the judgment that the efficiency was below expectations when measured against other post-disaster housing reconstruction operations, including those implemented previously in Tonga. The original unit costs for house reconstruction and repair were based on costs from the Bank’s 2002 Tonga Cyclone Emergency Recovery and Management Project (TCERMP/ P075171) in Vava’u. The project, completed in 2003, entailed the construction of 470 two-room houses by an international firm and third-party supervision by a separate international firm. The unit cost for the TCERMP two-room house was USD9,471 (TOP16,670). The TCIRCRP unit cost estimate in the PAD was nearly twice this amount, at USD 18,000 (TOP32,500), based on a costing exercise carried out by MOI during preparation, excluding a contingency of USD700 thousand. The logistical and land ownership issues in TCERMP were similar to TCIRCRP, including the challenge of getting land consents, which caused delays and resulted in compensation for them. Matching grants for repairs were also available up to TOP5,000, and 368 beneficiaries received them. The Bank accommodated these changes, assuming that the GOT would cover project cost overruns. Additional financing was also discussed; however, given the slow implementation at the time, this would have been challenging to approve.

Project outputs and unit costs. Table 1 shows categories of assistance and summarizes the number of outputs in each category for TCIRCRP versus those estimated at appraisal.

Table 1: TCIRCRP Categories of Assistance and Unit Costs, Appraisal versus End of Project

Table 1 shows there was an overall reduction of 6 percent in the number of households assisted from 1,100 to 1,031, compared to estimates in the PAD. Changes in outputs were concentrated in category A2A, which decreased by 42 percent in the number served, from 350 to 204, and increased in unit cost by 51 percent, from TOP16,500 to TOP24,909. These changes reflected government's decision to transform the subsidy for non-vulnerable families with severely damaged housing into a contractor-built one-room house. The number of two-room houses for vulnerable families (A1) increased in unit cost by 29 percent

32 The weighted average cost of A2B and A2C benefits was originally TOP4,018.

At appraisal At end of project Variation

Project Component/Subcomponent Unit cost

TOP PAD units Unit cost

TOP Actual Units

% Change Unit Cost

% Change Unit Count

1 A1 2- room house for vulnerable household

32,500 200 41,797 196 29% -2%

2 A2A Severe damage / house destroyed 16,500 350 24,909 204 51% -42% 3 A2B Moderate damage repair 32 5,000 400 4 A2C Retrofitting 1,400 150 5 2B/A2C Major/minor damage repair 7,806 631 94% 15% 6 A6 Water and sanitation 3,273 1,100 125 -89% TOTALS 1,100 1,031 -6%


Page 44 of 61

and fell in number by 2 percent from 200 to 196. The average repair cost (A2B and A2C collectively) increased by 94 percent from TOP4,018 (see footnote) to TOP7,806 while beneficiaries increased by 15 percent from 550 (400 + 150) to 631.

Several factors contributed to unit costs increases, including: (i) government decisions to: (a) engage contractors to build one-room houses (rather than to provide subsidies) for all households in category A2A and to carry out the more expensive repairs, and (b) to increase in the maximum repair subsidy; and (ii) design changes following a wind load assessment of the A1 and A2A houses. Collectively, these changes reduced project efficiency by increasing the cost of each output and shifting more financial responsibility from the household to the government, thus reducing the potential contribution of private (household) funds.

Table 2 shows original project costs in USD versus actual disbursements, by funding source. The Project budget was affected by an SDR/TOP gain of TOP1.6 million as well as a USD/SDR loss of approximately USD1 million, which essentially offset each other in US dollar terms. The foreign exchange gain in TOP was just over TOP1.6 million, as shown in Table 2A and Table 2B. Local inflation increased by only about 3 percent (cumulatively) over the period of end 2013 to end 2016, by which time most construction contracts had been awarded. This gain provided an additional 6 percent of local currency to the Project budget.

Table 2A. Original Project Costs and Actual Disbursement by Funding Source in USD

Original Amount Actual Disbursed World Bank Financing TF-17580 1,800,000 1,785,489 IDA-54770 6,000,000 5,383,567 IDA-H9620 6,000,000 5,595,315 Total 13,800,000 12,764,371 Foreign exchange gain 843,525 Total expenditures 13,800,000 13,607,896 Non-World Bank Financing 0 0 Government of Tonga 2,090,000 785,265 Total 2,090,000 785,265 Total Project Cost 15,890,000 14,393,161

Table 2B. Original Expenditures and Actual Disbursements in USD and TOP

Original Amount Actual Disbursed Total expenditures USD 13,800,000 13,607,896 Total expenditures TOP 25,058,466 26,664,119

Table 4 shows the budget and actual expenditures in TOP and how the changes were distributed by component (“percent change total cost”). It shows an increase of 26 percent in A1 expenditures (including expenditures on water services), a decrease of 12 percent in A2A and an increase of 123% on A2B and A2C repairs. Other notable changes are the decrease in TA and training costs by 89 percent and an increase


Page 45 of 61

in project support by 83%. Expenditures on policy framework activities increased USD1.2 million or nearly 300 percent.

Quality of outputs. The Project’s cost-effectiveness was reduced when basic services to the houses were cut back. To save costs, sanitation was eliminated from all units (originally budgeted for 1,100 units) and water tanks and gutters were provided only to the first 125 A1 and A2 units. These services may be added using government funding in the future, but in the meantime beneficiaries’ quality of life and health status could be affected.

Household contributions. Housing reconstruction projects are most cost-effective from a public investment standpoint when private (household) funds are matched by with public contributions. This leverage can be attained by requiring a household contribution and assisting households to mobilize funds from their own salaries, savings, family remittances, or other sources. (This practice was used for repairs in TCERMP.) Households also “contribute” by providing labor or incrementally expanding their houses, often starting immediately after they are built. Resilient standards are more likely to be maintained if either public and household funds are commingled when the original construction occurs, or houses are designed to allow extensions that maintain resilient standards.33 These approaches are incorporated in the draft Housing Recovery Policy, but not utilized in TCIRCRP.

The motivation of households to contribute is greater when households are directly involved in reconstruction and are allowed to modify the repair or construction based on their available resources. The original TCIRCRP project design embraced this concept and characterized the Project’s support as a subsidy to households that would be matched. Households were to be assisted by the SSR firm in deciding within a menu of options that met the Project’s resilience objectives. This feature largely disappeared with the increase in contractor-built reconstruction and repairs.

However, the repair reimbursement subcomponent may demonstrate the use of leverage. Households received repair reimbursements that averaged TOP5,200, but had spent an average of TOP7,700, representing an additional 50% household contribution. No data was collected on household extensions of TCIRCRP houses as shown in Annex 8. It is highly likely that the reduction in SSR support decreased the level of household financial contributions.

Supported self-recovery (SSR). The elimination of the SSR firm had other effects on project efficiency. These included: (i) increasing the costs for A2A households when subsidies were converted to one-room houses, (ii) delaying SSR repairs due to reduced support and (iii) “unbundling” several project support activities that were later contracted and supervised individually by the PMU.34 These activities included beneficiary communication, training, management of the beneficiary database, and coordination

33 See Annex 8 for photographs of housing constructed by the Project. Photos 5 and 9 demonstrate how households use their own resources to expand new housing units. Photo 9 shows an expansion along the same plane as original the house. Photo 5 shows a posterior expansion in which the roof pitch needed for full 70 m/s wind resistance has already been compromised. A better approach is to blend household and government resources and build a safe structure at the beginning, ideally one that can be safely expanded over time. . 34 It is important to note, however, that the Project implementation period was not extended; all Component activities were completed according to the original Project schedule.


Page 46 of 61

between beneficiaries and the PMU. TCERMP had previously demonstrated the benefit of bundling and contracting out these types of services.

Implementation efficiency. High staff turnover in the PMU and gaps in staffing at times affected Project efficiency. These were complicated by weak project management systems. The task team originally contemplated implementing several systems to support project management. The grievance redress management (GRM) system was implemented and worked well, but a system to track individual households never became operational, nor was the Operations Manual kept up-to-date. The reduction of the SSR component and elimination of the SSR firm reduced implementation efficiency due to the fact that most of the functions were still required and had to be either carried out by Project staff in an ad hoc manner or contracted out and supervised separately, rather than by a single firm. The lack of the SSR firm also reduced the efficiency of beneficiary participation in recovery activities. Additional factors affecting efficiency were procurement problems and land consent issues that both delayed project implementation and absorbed considerable staff time to resolve.

Table 4 shows the result of the elimination of the SSR firm. The TA and training activity (line 10) was reduced by TOP1.7 million with the elimination of the contract. Project support expenditures (line 11) then increased by more than TOP2.5 million, going from 12 percent of project costs to 21 percent. Although the cancellation of the SSR contract is not the only reason for these changes, it suggests that contracting out a bundle of specialized tasks, such as managing SSR, could have been more cost-effective.

Return on government investment. There are not yet sufficient data to conduct an analysis of the economic return of government’s (or households’) investments in resilient housing, using expected losses with and without these investments. However, housing reconstruction from previous cyclones provides some evidence of a high rate of return, as shown in Table 3. Ha’apai has been one of the islands receiving the most government reconstruction assistance since 1977, with a 42% share of all housing units reconstructed. Analysis conducted by the Project showed that housing constructed after TC Isaac in 1982 and TC Waka in 2001 is still occupied and (if maintained) capable of withstanding current-day cyclones, suggesting a useful life of 20 to 30 years.35

Table 1: Total Houses Reconstructed with Government Assistance by Island Group, 1977-2018

Island Group Houses Reconstructed % Share Tongatapu Island 723 25% Eua Island 27 1% Ha'apai Islands 1,250 42% Vava'u Islands 840 28% Niau Fo'ou Island 116 4% Niua Toputapu & Tafahi Island 0 0% TOTAL 2,956 100%

35 Kingdom of Tonga/ Ministry of Infrastructure, 2018, “Tonga Hurricane House Identification Guide (1982 – 2017),” V2.0 FINAL, Ministry of Infrastructure. MOI/TCIRCRP/CON23 & CON24. Mikael Gartner, PE and Ringo K. Fa’oliu, Consultants.


Page 47 of 61

Table 4: TCIRCRP Project Cost Comparison, Project Appraisal versus End of Project36

Table 5: Project Cost Distribution and Change in Total Cost Project Cost Distribution Appraisal End of Project Variation as % of Budget % Change Total Cost

1 A1 Two room house (A1) for vulnerable household (Contractor) 26% 31% 5% 26% 2 A2A Severe damage / house destroyed (SSR) 23% 19% -4% -12% 3 A2B Moderate damage repair (SSR) 8% 0%

4 A2C Retrofitting (SSR) 1%

5 A2B/A2C Major/minor damage repair (Contractor)

18% 10% 123%

6 A6 Water and sanitation 14%

7 A3/A4 Community buildings 2% 1% -1% -35% 8 Other Project costs 5% 3% -2% -35% 9 Component A Total 78% 72% -6% -2%

10 B TA and training 8% 1% -7% -89% 11 C Project support 12% 21% 9% 83% 12 B Housing recovery framework 2% 6% 5% 298% 13 Component B/C Total 22% 28% 6% 38% 14 TOTAL 100% 100% 0% 6%

36 The total project cost shown in Table 4 excludes amounts reimbursed to the Project by the GOT for ineligible expenditures. 37 No sanitation services were provided. Water tanks and gutters were included in A1/A2 cost for 125 units. Electrical service was provided to 178 of 400 A1 and A2 units.

Project Appraisal End of Project (EOP) Variations

Project Component/Subcomponent PAD unit cost TOP PAD units

Budget '000 TOP

Unit cost TOP

Actual Units

Total Cost '000 TOP

% Change Unit Cost

% Change Unit Count

% Change Total Cost

1 A1 2 room house for vulnerable household (Contractor) 32,500 200 6,500 41,797 196 8,192 29% -2% 26% 2 A2A Severe damage / house destroyed (SSR) 16,500 350 5,775 24,909 204 5,081 51% -42% -12% 3 A2B Moderate damage repair (SSR) 5,000 400 2,000

4 A2C Retrofitting (SSR) 1,400 150 210

5 A2B/A2C Major/minor damage repair (Contractor) 7,806 631 4,926 94% 15% 123% 6 A6 Water and sanitation37 3,273 1,100 3,600

125

-89%

7 A3/A4 Community buildings 382

249 -35% 8 A5 Other Project costs 1,162

750 -35%

9 Component A Total 19,629 19,199 -2% 10 B TA and training 1,961

224 -89%

11 C Project support 3,051

5,579 83% 12 B Housing recovery framework 418

1,662 298%

13 Component B/C Total 5,429 7,466 38% 14 TOTALS 1,100 25,058

1,031 26,664 -6% 6%


Page 48 of 61

ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS

The Government of Tonga agrees with the overall project rating. We particularly agree that although the project had many challenges, it provided the opportunity to identify areas for improvement and prepare better for future disasters which the ICR team identified as one of the core outcomes of this project. The government has been working to improve aspects of recovery planning and implementation. For instance, since Cyclone Ian, the sector-based cluster system has been introduced to the government system. For each cluster, the stakeholder ministries work together to meet the needs of the cluster (sector). The Shelter cluster is now led by Ministry of Infrastructure, with the Ministries of Internal Affairs (community issues), Land and Natural Resources (for land title issues) all involved to cover the entire spectrum of issues pertaining to housing, an approach that was missing from TCIRCRP. This ICR is very relevant and timely for the current ongoing housing sector recovery efforts by the Government following Tropical Cyclone (TC) Gita that hit the Kingdom of Tonga in February 2018. The housing reconstruction strategy for Cyclone Gita is incorporating lessons learnt from TCIRCRP, which include putting more emphasis on the self-support recovery aspect where the households take initiative of the recovery of their own houses. The national housing reconstruction policy that was drafted through TCIRCRP technical assistance provides the framework and options to develop an event specific housing recovery strategy. TCIRCRP produced many lessons learnt, which the report captures well. One key lesson is to manage expectation of the beneficiaries well by having a clear and transparent policy that enables the beneficiaries to be identified in a transparent manner from very early on in the recovery phase which the government sticks to throughout. Beneficiary lists need to be closed early on, as it creates uncertainty in terms of available budget/unit cost for the reconstruction, at the same time ensuring that the vulnerable households are given priority. In this regard, communication strategies are important to ensure a consistent messaging to the affected households, to manage expectations, another area that could have been managed better. The government is currently also of the opinion that support from the government on housing reconstruction is a privilege, not a right, which is guided by the availability of funds. The Government recognizes that the lack of a good project management system that monitored the progress of works on the ground allowed the overpayments to the contractors and ineligible expenses to occur. It is important for the government to put measures in place to avoid a repeat of this in future events. For Cyclone Gita, the monitoring system put in place through TCIRCRP technical assistance within the Ministry of Infrastructure is expected to be used for contract management and to avoid the repeat of a similar situation occurring. The report is candid in admitting the areas in which there were shortfalls. In particular the provision of security of land occupancy issue is a key area where the subsequent delays in signing the land consent forms by the landlords could have been avoided, had the task team that designed the project been more aware of the local customs and sensitivities surrounding land occupancy and informal arrangements that are prevalent in Tonga. The high turnover rate of the Project Management Unit which led to inefficiencies in implementation of the project is something that the post-TC Gita housing recovery will try to avoid, as it is expected that a PMU will be hired and formed for TC Gita recovery.


Page 49 of 61

ANNEX 6. SUPPORTING DOCUMENTS Project-Related Documents

Project Information Document. TCIRCRP P150113, May 8, 2014, 86952.

Project Appraisal Document, TCIRCRP P150113, May 12, 2014, 88003.

Restructuring Paper, TCIRCRP P150113 : (English), November 3, 2016, RES23181.

Restructuring Paper, TCIRCRP P150113 : (English), June 15, 2017, RES27493.

Restructuring Paper, TCIRCRP P150113 (English), June 17, 2018, RES32193.

Recommendation of Statutory Committee for Credit 5477-TO and Grant H962-TO (Closing Package) (English), May 20, 2014, Statutory Committee Report.

Financing Agreement for Credit 5477-TO and Grant H962-TO (Closing Package) (English), June 11, 2014.

Supplemental Letter Ref. Financial Data for Credit 5477-TO and Grant H962-TO (Closing Package) (English), June 11, 2014, Side Letter.

Disbursement Letter for Credit 5477-TO and Grant H962-TO (Closing Package) (English), June 11, 2014.

Amendment to the Financing Agreement for Credit 5477-TO and Grant H962-TO (English), August 3, 2017.

Amendment to the Financing Agreement for Credit 5477-TO and Grant H962-TO and Extension of Closing Date for the GFDRR Grant Agreement for TF017580 (English), June 21, 2018.

Environmental management plan TCIRCRP P150113 (English), April 14, 2014, E4513.

Integrated Safeguards Data Sheet TCIRCRP P150113, April 17, 2014, 87160.

Integrated Safeguards Data Sheet (Restructuring Stage) - TCIRCRP- P150113 (English), May 30, 2017, ISDSR22288.

Resettlement policy framework TCIRCRP P150113 (English), April 14, 2014, RP1621.

Resettlement policy framework (Restructuring Stage) TCIRCRP: P150113 (English), March 28, 2017, SFG3388.

Implementation Status and Results Report (ISR) TCIRCRP P150113 - No : 01 (English), July 8, 2014, ISR15412.

ISR TCIRCRP P150113 - No : 02 (English), December 22, 2014, ISR16258.

ISR TCIRCRP P150113 - No : 03 (English), May 28, 2015, ISR19100.


ISR TCIRCRP P150113 - No : 05 (English), June 24, 2016, ISR24135.

ISR TCIRCRP P150113 - No : 06 (English), March 27, 2017, ISR25292.

ISR TCIRCRP P150113 - No : 07 (English), November 15, 2017, ISR28677.


ISR TCIRCRP P150113 - No : 09 (English), June 5, 2018, ISR32811.

Audit Opinion 30 June 2016 (English), March 26, 2017, AUD0008159.

Audit Signed Account 2016-17 (English), January 15, 2018, AUD0010273.

Audit TCIRCRP P150113 (English), December 24, 2018, AUD0018191.

Aide Memoires for missions (beginning dates): 1/30/2014 (scoping), 3/17/2014 (preparation and pre-appraisal), 6/12/2014, 8/4/2014, 10/10/2014, 11/24/2014, 3/5/2015, 6/9/2015, 7/20/2015, 9/28/2015, 11/24/2015, 1/21/2016, 5/2/2016, 7/25/2016, 9/26/2016 (MTR), 7/2017 (ISM), 10/9/2017 (Technical), 11/21/2017, 4/19/2018. [Aide memoires missing for other missions.]

Kingdom of Tonga/ Ministry of Infrastructure, 2014, Project Operations Manual (POM), December 2014.

Kingdom of Tonga/ Ministry of Infrastructure, 2014, TCIRCRP Operational Manual, Annex 1: Supported Self-


Page 50 of 61

Recovery (SSR), August 2014.

Kingdom of Tonga/ Ministry of Infrastructure, 2014, “Ha'apai Housing Recovery and Reconstruction Policy (HRRP),” Draft 2, April 2, 2014.

Kingdom of Tonga/ Ministry of Infrastructure, 2015, “Validation of Cyclone Ian Beneficiary Lists Report, December 2014 – February 2015.” Civil Society Forum of Tonga, Consultants.

Kingdom of Tonga/ Ministry of Infrastructure, 2015, “Land Consent & Validation Report, June – July 2015.” Civil Society Forum of Tonga, Consultants.

World Bank, 2002, Technical Annex, Tonga Cyclone Emergency Recovery and Management Project, Washington, DC: World Bank.

World Bank, 2008, Implementation Completion and Results Report, Report No: ICR0000602, Tonga - Cyclone Emergency Recovery And Management Project, Washington, DC: World Bank Group.

Project Outputs

Kingdom of Tonga/ Ministry of Infrastructure, 2016, Mid-term Review Beneficiary Survey.

Kingdom of Tonga/ Ministry of Infrastructure, 2015-18, Safeguards reports.

Kingdom of Tonga/ Ministry of Infrastructure, 2018, “Safeguards Completion and Results Report, TCIRCRP,” November 2018.

Kingdom of Tonga/ Ministry of Infrastructure, 2018, “Tonga Hurricane House Identification Guide (1982 – 2017),” V2.0 FINAL, Ministry of Infrastructure. MOI/TCIRCRP/CON23 & CON24. Mikael Gartner, PE and Ringo K. Fa’oliu, Consultants.

Kingdom of Tonga/ Ministry of Infrastructure, 2018, Review, “Strengthening & Update of the Tonga Building Code: Completion Report, Final.” MOI/TCIRCRP/CON 25. 30 November 2018. Arup, Consultants.

Kingdom of Tonga/ Ministry of Infrastructure, 2018, “Domestic Dwelling Structural Supplement: National Building Code of the Kingdom of Tonga 2018,” December 2, 2018.

Kingdom of Tonga/ Ministry of Infrastructure, June 2018 (Rev 2/2019), “Tonga Housing Recovery Policy: Housing Recovery that Builds Resilience,” Ministry of Infrastructure. MOI/TCIRCRP/CON26. Priscilla M. Phelps, Consultant.

Kingdom of Tonga/ Ministry of Infrastructure, 2018, “Final report on the development of damage assessment and building construction monitoring tool for Ministry of Infrastructure, Tonga.” UNOPS, Consultant.

Other References

Abhas K Jha, et al, 2010, Safer Homes, Stronger Communities : A Handbook for Reconstructing after Natural Disasters, World Bank.

Government of Tonga and Pacific Region Infrastructure Facility (PRIF), 2013, “Tonga National Infrastructure Investment Plan, 2013 -2023.”

Kingdom of Tonga/ Ministry of Finance and National Planning, 2015, “Tonga Strategic Development Framework II (2015-25).”

Kingdom of Tonga/ Ministry of Meteorology, Energy, Information, Disaster Management, Environment, Climate Change and Communications (MEIDECC), 2018, “Joint National Action Plan 2 on Climate Change Adaptation and Disaster Risk Management 2018-2018” (JNAP 2).

Kingdom of Tonga/ MEIDECC, 2016, “Tonga Climate Change Policy: A Resilient Tonga by 2035”

Pacific Catastrophic Risk Assessment and Financing Initiative (PCRAFI), 2015, “Tonga Country Note: Disaster Risk Financing and Insurance.”

World Bank/ Global Facility for Disaster Reduction and Recovery, 2017, “Housing and Settlements Recovery Note” (Guidance Disaster Recovery Guidance Series).


Page 51 of 61

World Bank, 2016, “Regional Partnership Framework for Kiribati, Republic of Nauru, Republic of The Marshall Islands, Federated States of Micronesia, Republic of Palau, Independent State of Samoa, Kingdom of Tonga, Tuvalu, and Vanuatu.”

World Risk Report, Bündnis Entwicklung Hilft and Ruhr University Bochum – Institute for International Law of Peace and Armed Conflict (IFHV). https://weltrisikobericht.de/english-2/.

https://weltrisikobericht.de/english-2/


Page 52 of 61

ANNEX 7. ESTABLISHING SECURITY OF TENURE FOR TCIRCRP PROJECT BENEFICIARIES

Because post-reconstruction displacement from housing is not uncommon in post-disaster reconstruction projects, the Bank required government to ensure that all beneficiaries had a reasonable period of tenure security, as has been done in previous housing reconstruction projects in Tonga and elsewhere. Good practice is to ensure a level of tenure security similar to that which existed at the time of the disaster (land titles for owners and a reasonable period of secure occupancy for tenants). Additional measures are taken for informal occupants at risk of displacement or displaced households that must be relocated.

The measures proposed during TCIRCRP project preparation to establish secure tenure and to document ownership and consent created difficulties during implementation and disagreements between the Bank and the government of Tonga. The issues that arose and the resolution that was eventually reached may be instructive for other project teams.

Background. Tonga is a constitutional monarchy and a parliamentary democracy. The key pieces of legislation governing land are the Act of Constitution of Tonga 1875 (the Constitution) and the Land Act 1903.The King, the royal family, nobles and chiefs enjoy certain privileges and responsibilities. Nobles and chiefs hold hereditary land estates.

Almost all types of land tenure in Tonga are created or transferred through registration. Unlike many countries in the Pacific, Tonga does not have a dual system of customary ownership and registered ownership. Nevertheless, communal and/or familial sharing of land assets underpins many of the traditional land management and occupancy arrangements in the country. The forms of tenure in Tonga are shown below.

Table 2: Forms of Land Tenure in Tonga38

Tenure Key Features Document Crown land Land owned by the King and administered by the Minister of Lands as the representative

of the King. n/a

Hereditary estate

A life interest held by a Noble (tofia) or Chief (matapule) and passed down from father to son.

Tofia certificate

Hereditary Town allotment

A life interest used for residential purposes. Passed down from father to son. Rarely held by women. Located on hereditary estate or Crown Land.

Deed of Grant

Hereditary Tax allotment

Same as town allotments but used for agriculture. Deed of Grant

Lease May be granted over Crown land, hereditary estates or allotments. May be transferred or sub-leased. May be held by women or foreigners. Maximum duration of 99 years for hereditary town allotments; maximum duration of 20 years for hereditary tax allotments. Nobles may grant a lease of 99 years over a tax allotment.

Form of Lease

Sublease May be granted over the duration of a lease. Form of Sub-Lease

Non-Registered Sub-lease

Similar to leases but not required to be registered if for 3 years or less. Form of Sub-Lease

38 International Federation of Red Cross and Red Crescent Societies (IFRC) and Australian Red Cross, 2017, “Housing, Land and Property Law in Tonga.”


Page 53 of 61

Tenure Key Features Document Permit Similar to leases but landholder retains greater degree of control because permits cannot

be transferred or sub-leased. Form of Permit

Tenancy agreement

Written or verbal agreement. Written agreement is not normally registered. Most tenancy agreements are not legally enforceable.

n/a

License Verbal permission to use land and/or housing. Commonly granted to family or friends. Not capable of being registered and very difficult to enforce (requires court case and evidence of landholder's conduct).

n/a

Loan preparation and negotiation. The land tenure security issue was mentioned in various project-related documents. Some of the concepts employed reflected misinterpretations of Tongan law and custom.

The Ha’apai Housing Recovery and Reconstruction Policy drafted by the government (April 2, 2014) mentioned the need for certain households to relocate because of environmental risks or lack of secure occupancy. It explains that the government would work with occupants to confirm occupancy rights, including renewing leases or land registration, and assigned the responsibility for finding any relocation site to the household, the community and/or the government, but without stipulating any conditions at the alternative site. It mentions that if a household chooses to remain in its current site in spite of risks or uncertain occupancy status, housing assistance might be postponed, modified, or withheld. The Policy did not point out that some households owned the house but not the land, nor discuss whether tenure security should be confirmed for all households or only those with specific levels of damage or destruction.

The Resettlement Policy Framework (RPF) (April 14, 2014) identified “Affected Persons” as a landholder who involuntarily relinquish land or assets to accommodate the relocation of the Project’s beneficiary households. The probability of there being any Affected Persons was judged to be low, because most reconstruction and repair would occur in situ and it was assumed that any household needing to be relocated would be given Crown or Noble land (see Table 2).

The RPF identified two groups among potential beneficiaries: (1) those whose lands have clear title in favor of the beneficiaries (allotment, registered lease, etc.) (80%39) and (2) those occupying land without formal occupancy arrangements. Among the second group, it was assumed that in some cases the title holders could be contacted and that consent to occupy and rebuild could be secured. In other cases, it might not be possible to locate the title holder, or the title holder might withhold consent to occupy and repair/reconstruct. This latter group was the only one at risk in RPF terms, but it ultimately included the largest share of beneficiary households (40%).

The RPF established that for this at-risk group, “the GOT will consider other measures to provide security of occupancy to the beneficiary such as a lease or license agreement which can be created under Tongan Law in favor of the beneficiary.” It also mentions that these measures were not expected to provide a “permanent title”40 but should “ensure that the beneficiary has security of occupancy for period of time; possibly in the order of 25 – 35 years (the approximate design life of the house).”

The RPF included confusing language that seemed to suggest that beneficiaries were the Affected Persons

39 Estimated at project design stage through a simple survey. Subsequently at the MTR, an extensive survey was carried out that revealed the true proportion of beneficiaries who have clear land title to be 40% rather than the initial estimate of 80%. The RPF was revised to correct the percentage. 40 The concept of “permanent title” does not exist in Tonga law.


Page 54 of 61

subject to the Resettlement Policy, which was not the case. Affected Persons were those whose land might be taken in order to relocate the beneficiaries.

Measures could be taken by the government to provide a period of tenure security that would be consistent with Tongan law. These measures might include providing a permit or tenancy agreement. But imposing a 25 to 35-year occupancy period on an existing land holder would have triggered the Project’s RPF. The RPF did not distinguish between beneficiaries eligible for repair or reconstruction or mention ownership of houses separate from land. The logic of transferring to house occupants a home owner’s right of occupancy of their house for its entire useful life is not explained, although this could be justified when the land occupant owned the damaged house.

The Integrated Safeguards Data Sheet stated that the “likelihood of land [being required] for housing outside existing allotments….is considered to be very low,” and notes that “if land is required, alternative sites will be identified…based on the requirements of the agreed Resettlement Policy Framework.”

The Bank’s Financing Agreement (signed June 11, 2014) identified a date (June 30, 2016) by which the government was obligated to "Facilitate" the provision of alternative land to any beneficiary for whom a house has been constructed under Parts 1(a) and (b) of the Project 41 but, who has no title to the land. For purposes of this paragraph, the term "Facilitate" means that the measures taken by the Recipient shall result in a Security of Occupancy provided/issued to said beneficiaries for a period of at least 30 years.” [emphasis added]

This clause affected the government’s obligation in several ways, it: (i) introduced confusion about whether the government had to provide alternative land or could provide Security of Occupancy in some other form; (ii) suggests that any beneficiary of a house without land title should be extended a 30-year Security of Occupancy (even if the house belonged to the land holder and the land holder was willing to provide consent for the occupant to remain); (iii) fixes the minimum period of tenure security at 30 years; and (iv) (by using past tense) seems to suggest that security of occupancy might not be confirmed until after the houses were constructed.

Implementation. Problems with the land consent process were documented in aide memoires beginning soon after the start of implementation in 2014. Not only did the requirements of the RPF and the Financing Agreement not conform to the Land Act, providing occupants with a 30-year occupancy of the house and land amounted to a taking of land holder’s property rights without compensation.

The government developed land consent forms in Tongan that were distributed to beneficiaries eligible for new houses that were not fully consistent with the RPF and Financing Agreement. There were difficulties getting the consent forms signed: in some cases, beneficiaries were not aware of the requirement or did not have the means to contact the land holders, and in others, land holders refused to sign because of the extended period of occupancy they accorded to occupants. Contractors arriving in Ha’apai could not get access to land, which caused delays and resulted in disputes and penalty charges.

Resolution. In June 2015, a mission aide memoire includes an agreement to amend the land consent forms to: (i) provide 5 years of occupancy; and (ii) reduce the likelihood of the need to identify “alternative land” and the potential negative impacts associated with land acquisition. In October 2015, discussions of a 15-year occupancy permit were also documented. By June 2016, agreement had been reached on a 5-year

41 This included houses constructed under A1. Housing for vulnerable households and A2B-D. Supported self-recovery activities.


Page 55 of 61

occupancy guarantee, which was awaiting Cabinet approval.

The Bank approved a level 1 restructuring in June 2017 to address the tenure security issue. Two new consent forms were introduced that granted tenants who did not own the land or the house security of occupancy for four (4) years if the house was being rebuilt in-situ on private land. After the four years, the land holder and the tenant would renegotiate the terms of tenancy. In only those cases where the land holder was not able to provide land consent, a second land consent form would be used under which the GOT agreed to find land where a new house could be built and provide 30-year tenure security.

The majority of households under informal land occupancy arrangements owned their cyclone-damaged house. The restructuring introduced other options for these households at the end of the 4-year minimum period of secure tenancy. These included: (i) the landholder permits the house owner to continue living in the rebuilt house on the site where it was constructed; or (ii) if the landholder did not agree to this: (a) the land owner could purchase the house at an appropriately depreciated value; or (b) the house owner could remove the building and vacate the land.


Page 56 of 61

ANNEX 8. PHOTOGRAPHS OF TCIRCRP–FINANCED HOUSING


Page 57 of 61


Page 58 of 61

ANNEX 9. TCIRCRP INDICATORS

TCIRCRP PDO-level and Intermediate Indicators: Original

42 In the ISRs, this number often is recorded as 51%, which is the proportion of the females who benefited from the project in Ha’apai.

Original PDOs

Original PDO

Indicators Original End

Targets Achieved

Original Intermediate

Indicators Original End

Targets Achieved Objective 1. Restore housing, community facilities, and basic services to the affected population of Ha’apai

1. Direct project beneficiaries (Number)

5,800 5,400 1. Communica-tions strategy prepared and implemented.

Communications strategy fully implemented

Fully implemented 30 June 2018

2. Direct project beneficiaries of which are female (Percentage)

40% 27% female heads of household (278)42

2. Percentage of funding for supported self-recovery disbursed.

100 36%

3. Eligible households accessed supported self-recovery funding (Number)

900 339 3. Effective implementation of asbestos removal plan and removal of asbestos containing materials undertaken in accordance to the plan

Removal of asbestos-containing material, identified by the asbestos removal plan

Completed 30 June 2016

4. Project dwellings in Ha'apai built, repaired or retrofitted to resistant standard (Percentage)

1,100 1,031 4. Coastal hazard and risk maps developed for the affected islands.

Maps developed and in use

Activity eliminated

Objective 2. Strengthen the country’s resilience to natural disasters.

5. National resilient recovery institutional arrangements developed for cabinet endorsement (Policy)

Policy Implemented

Not endorsed 5. Development of Ha’apai post-disaster housing eligibility policy that maximizes a supported self-recovery approach (public- private partnership)

Policy Implemented

Partially implemented

6. Tonga Building Code compliance strengthened

Revised Building Code in use

Code revisions completed, not in use


Page 59 of 61

TCIRCRP PDO-level and Intermediate Indicators: Post Level-I Restructuring

Revised PDOs

Revised PDO

Indicators Revised End

Targets Achieved

Revised Intermediate

Indicators Revised End

Targets Achieved 1. Strengthen the climate resilience of housing and selected community facilities for the affected population of Ha’apai

1. Direct project beneficiaries

5,400 5,400 1. Communica-tions strategy prepared and implemented

Communica-tions strategy fully implemented

Fully implemented 30 June 2018

2. Direct project beneficiaries of that are female

40% 27% female heads of household

2. Community facilities repaired to a cyclone resilient standard

18 18

3. Project dwellings in Ha'apai built, repaired or retrofitted to resistant standard

1,021 1,031 3. Effective implementation of asbestos removal plan and removal of asbestos containing materials undertaken in accordance to the plan

Removal of asbestos containing materials identified by the asbestos removal plan

Completed 30 June 2016

2. Strengthen the Recipient’s preparedness to recover from future natural disasters.

4. National resilient reconstruction and recovery mechanisms and standards developed

Mechanisms and standards developed and submitted to Task Force Group for endorsement

Not submitted 4. Development of a national post-disaster housing policy to support recovery from future disasters

Policy developed and submitted to the Task Force Group for endorsement

Not submitted

5. Tonga Building Code compliance strengthened

Building Code revisions submitted to the Task Force Group for endorsement

Not submitted


Page 60 of 61

ANNEX 10. THEORY OF CHANGE


Page 61 of 61

ANNEX 11. MAP OF HA’APAI, TONGA