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Document o f The World Bank
FOR OFFICIAL USE ONLY
Report No: 46943-KG
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED CREDIT
IN THE AMOUNT OF SDR 3.8 MILLION (US$5.5 MILLION EQUIVALENT)
AND A
PROPOSED GRANT
IN THE AMOUNT OF SDR 3.1 MILLION (US$4.5 MILLION EQUIVALENT)
TO THE
THE KYRGYZ REPUBLIC
FOR A
SECOND RURAL WATER SUPPLY AND SANITATION PROJECT
March 27,2009
Sustainable Development Department Central Asia Country Unit Europe and Central Asia Region
This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents may not otherwise be disclosed without World Bank authorization.
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CURRENCY EQUIVALENTS
(Exchange Rate Effective November 2008)
Currency Unit = KGS Som KGS41.1620 = US$l US$1.47609 = SDR 1
FISCAL YEAR January 1 - December31
ADB A 0 CDS ccwss CDWUU DA DFID DRWS EMP FMR GAAS GoKR IDA IDF IFR IRR JCSS K A S M&E h4AWRPI MOF MOH MIS NALSG NCB NGO O&M OM PIP PMU PPL RCHP RWSSP SAPPMR SES SDC SWAP UNDP WHO
ABBREVIATIONS AND ACRONYMS
Asian Development Bank AyiI Okmotu (Village Administration - Local Self-Government Body) Country Development Strategy Coordination Council for Water Supply and Sanitation Community Drinking Water Users Union (Association) Designated Account Department for International Development (UK) Department o f Rural Water Supply Environmental Management Plan Financial Monitoring Report State Architecture and Construction Agency Government of the Kyrgyz Republic International Development Association Institutional Development Fund Interim un-audited Financial Report Internal Rate of Return Joint Country Support Strategy Kyrgyz Ayil Suu Monitoring and Evaluation Ministry of Agriculture, Water Resources, and Processing Industry Ministry of Finance Ministry of Health Management Information System National Agency of Local Self-Governance Affairs National Competitive Bidding Non-governmental Organization Operation and Maintenance Operations Manual Project Implementation Plan Project Management Unit Public Procurement Law Republican Center for Health Promotion Rural Water Supply and Sanitation Project State Agency on Public Procurement and Material Reserve Sanitary Epidemiological Surveillance Swiss Agency for Development and Cooperation Sector-Wide Approach project United Nations Development Programme World Health Organization
FOR OFFICIAL USE ONLY
Vice President: Shigeo Katsu, ECAVP Country Director: Motoo Konishi, ECCU8 Country Manager Roger Robinson, ECCKG Sector Manager: Wael Zakout, ECSSD
Task Team Leader: Mirlan Aldayarov, ECSSD
This document has a restricted distribution and may be used by recipients only in the performance o f their off icial duties. I t s contents may not be otherwise disclosed without Wor ld Bank authorization.
KYRGYZ REPUBLIC Second Rural Water Supply and Sanitation Project
CONTENTS
Page
STRATEGIC CONTEXT AND RATIONALE .................................................................. 1 I . A . B . C .
I1 . A . B . C . D . E .
I11 . A . B . C . D . E . F .
I V . A . B . C . D . E . F . G .
Country and sector issues .................................................................................................... 1 Rationale for Bank involvement .......................................................................................... 2
Higher level objectives to which the project contributes .................................................... 2
PROJECT DESCRIPTION .............................................................................................. 3 Lending instrument .............................................................................................................. 3 Project development objective and key indicators .............................................................. 3 Project components., ...................................... .is. ................................................................. -3 Lessons learned and reflected in the project design ........................ !. .................................. 5 Alternatives considered and reasons for rejection. ............................................................. - 6
IMPLEMENTATION ....................................................................................................... 6 Partnership arrangements .................................................................................................... 6
Monitoring and evaluation o f outcomes/results .................................................................. 8 Sustainability ...................................................................................................................... - 8 Critical risks and possible controversial aspects ................................................................. 9
Loadcredit conditions and covenants ............................................................................... 11
APPRAISAL SUMMARY .............................................................................................. 11 Economic and financial analyses ....................................................................................... 11
Institutional and implementation arrangements .................................................................. 7
Technical ........................................................................................................................... 12 Fiduciary ............................................................................................................................ 13
Social ................................................................................................................................. 14
Environment ...................................................................................................................... 15
Safeguard policies .............................................................................................................. 15
Policy Exceptions and Readiness ..................................................................................... -17
Annex 1: Country and Sector or Program Background .......................................................... 18
Annex 2: Major Related Projects Financed by the Bank and/or other Agencies .................. 23
Annex 3: Results Framework and Monitoring ......................................................................... 24
Annex 4: Detailed Project Description ...................................................................................... 29
Annex 5: Project Costs ................................................................................................................ 34
Annex 6: Implementation Arrangements .................................................................................. 37
Annex 7: Financial Management and Disbursement Arrangements ..................................... 41
Annex 8: Procurement Arrangements ....................................................................................... 48
Annex 9: Economic and Financial Analysis .............................................................................. 54
Annex 10: Safeguard Policy Issues ............................................................................................ $60
Annex 11: Project Preparation and Supervision ...................................................................... 70
Annex 12: Documents in the Project File .................................................................................. 72
Annex 13: Statement of Loans and Credits ............................................................................... 73
Annex 14: Country at a Glance .................................................................................................. 75
Annex 15: Map IBRD No . 36804 ................................................................................................ 77
KYRGYZ REPUBLIC
SECOND RURAL WATER SUPPLY AND SANITATION PROJECT
PROJECT APPRAISAL DOCUMENT
EUROPE AND CENTRAL ASIA
ECSSD
Date: March 27,2009 Country Director: Motoo Konishi Sector Director: Peter Thomson (40%) Sector Manager: Wael Zakout
Team Leader: Mirlan Aldayarov Sectors: Water supply (60%); Sanitation
Themes: Rural services and infrastructure (P);Decentralization (S);Rural policies and institutions (S) Environmental screening category: Partial Assessment
Project ID: P110267
Lending Instrument: Specific Investment Loan
[ ] Loan [XI Credit [XI Grant [ ] Guarantee [ ] Other:
For Loans/Credits/Others: Total Bank financing (US$m.): 10.00 - (IDA Credit US$5.5 mill ion equiv.) SDRs 3.8 million and (IDA Grant US$4.5 mill ion equiv.) SDRs 3.1 million. Proposed terms: IDA Credit - Standard IDA Credit Terms, 10 years grace with 40 years to
maturity IDA Grant for Debt Vulnerable Countries.
Source Local Foreign Total Financing Plan (US$m)
~
BORROWEWRECIPIENT 2.04 0.00 2.04 IDA Credit 5.50 0.00 5.50 IDA Grant 3.58 0.92 4.50 UK: British Department for International 6.13 0.20 6.33 Development (DFID) Total: 17.25 1.12 18.37
Borrower: Kyrgyz Republic Responsible Agency: Department o f Rural Water Supply under the National Agency o f Local Self-Governance Affairs Kyrgyz Republic
i
Estimated disbursements (Bank FY/US$m) FY 4nnual Zumulative
2009 2010 2011 2012 2013 2014 0.63 2.34 2.47 2.34 2.01 0.21 0.63 2.97 5.44 7.78 9.79 10.00
[XIYes [ ] N o Does the project meet the Regional criteria for readiness for implementation? Re$ PAD IV. G. Project development objective Re$ PAD II.C., Technical Annex 3 The Development Objective o f RWSSP-2 i s to assist the Borrower in: (i) improving access to potable water for the participating communities; and (ii) to improving hygiene, sanitation and water-related practices at individual, family and institutional levels in the rural areas.
Project description [one-sentence summary of each component] Re$ PAD II.D., Technical Annex 4 The Project consists o f the following four components:
Component A: Water Supply Infrastructure and Equipment. This component will provide financing to local communities represented by Community Drinking Water Users Unions (CDWUUs) to rehabilitate or expand existing village water supply systems. As part o f the civil works contracts, this component will also finance the following: refurbishment or construction o f demonstration sanitation facilities at schools and medical posts; equipment supplied to selected CDWUUs and/or their associations to maintain the water systems; and consultancy services for technical supervision o f construction activities to ensure the quality o f infrastructure financed by the project.
Component B: Sanitation and Hygiene Promotion Program. This component will support village-level promotion o f healthy hygiene and sanitation practices through technical assistance, including sanitary latrine construction.
Component C: Institutional Development. This component will finance consultancy services to assist Government to ensure sustainability o f the rural water supply programs, including support to: (a) endorse and implement the sector strategy prepared under the earlier project; (b) develop or revise legislation to ensure synergies among CDWUUs and local self-governance, including develop and institutionalize new agreements between Ayil Okmotu and CDWUUs; (c) train and assist CDWUUs and Department o f Rural Water Supply (DRWS) to build on the experience and tools developed by RWSSP,
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including ensuring that gender, voice, and choice in participatory processes are taken into account; and (d) strengthen the project Management Information System by adding a GIS interface and consolidating a country-wide database on village-level water supply and sanitation.
Component D: Project Management. The component will finance the following: l imited equipment and vehicles, operating costs (staff salaries, in-country travel, and mandatory employer contributions to the Social Fund o f the Kyrgyz Republic) and training associated with project implementation; monitoring and evaluation activities, including regular impact surveydassessments and annual audits
Which safeguard policies are triggered, if any? Re$ PAD IV . F., Technical Annex 10 Environmental Assessment OP 4.0 1 : RWSSP-2 financing covers no subproject with significant or irreversible environmental impacts, and therefore is classified as Environmental Category "B", Short-term impacts that occur during construction will be minimized through preventive measures, and mitigated by curative actions after the c iv i l works are completed. Use o f construction materials that are hazardous to human health (e.g., asbestos, which i s not illegal in Kyrgyz Republic) will not be permitted. An Environmental Management Framework (EMF) for the project consistent with Environmental Assessment (EA) requirements for both the Kyrgyz Republic and the World Bank was prepared by DRWSPMU and reviewed by the Kyrgyz Forestry and Environment Preservation Agency and found satisfactory to the World Bank.
International Waterways (World Bank OP 7.501: Since the project-supported activities in several instances will take place on the trans-boundary waterways as defined in OP 7.50, the project triggers this policy. Since the proposed activities will neither attempt to modify the course o f waterways, nor significantly increase the volume o f water abstraction, an exception from notification was granted by management. Subprojects financed by the project will not entail any land acquisition, relocation o f population, or restrictions on access to economic resources.
Significant, non-standard conditions, if any, for: Re$ PAD III. F. Board presentation: n/a Loadcredit effectiveness: Adoption o f the Project Operations Manual by NALSG. Covenants applicable to project implementation:
0
0
0
Submit Interim Un-audited Financial Reports to IDA within forty five (45) days o f the end o f each calendar quarter Submit audited Financial Statements to IDA not later than six months after the end o f each fiscal year Submit Project Reports to IDA not later than forty five (45) days after the end o f each calendar semester Submit the first Project Report to IDA on or about February 15,201 0 and review it not later than March 3 1 , 20 10 Submit the report on the execution o f the Project to IDA not later than November 30,2013
... 111
KYRGYZ REPUBLIC SECOND RURAL WATER SUPPLY AND SANITATION PROJECT
I. STRATEGIC CONTEXT AND RATIONALE
A. Country and sector issues
1. The Kyrgyz Republic i s a low-income country with a population o f 5.2 million people. In 2007 the gross national income (GNI) per capita was $600 (Atlas method). This landlocked and mostly mountainous country relies primarily on agriculture; i t s industrial production base i s relatively small. Gold, agricultural products, and hydropower constitute most o f the country’s exports. The Kyrgyz Republic has implemented broad systemic reforms to create the foundations o f a market economy. Some 70 percent o f farm land i s privately owned as a result o f generally equitable land reforms; the economy i s relatively open with a liberalized foreign trade regime and full convertibility o f the Som. The Kyrgyz Republic’s trade and investment policies are arguably the most liberal among member countries o f the Commonwealth o f Independent States. Despite pro-poor growth o f about 5.0 percent on average, the Kyrgyz Republic remains one o f the poorest countries in the world-about 40 percent o f people live below the poverty line, making the country eligible for grant funds from the International Development Agency (IDA), the World Bank’s concessional lending facility.
2. Prior to independence in 1991, rural water supplies were managed by a state service provider, the now-dismantled Kyrgyz Ay i l Suu ( K A S - Rural Water Supply Entity). Water was supplied almost free-of-charge and systems were designed to a high standard, providing sufficient storage and pressure to support f i re hydrants. However, after independence, with the economic difficulties that ensued when the collapse o f the Soviet Union erased economic linkages and centralized budgetary support, K A S became unable to sustain the previous levels o f operation and maintenance and was dismantled. I t was replaced by the Department for Rural Water Supply (DRWS) under the Ministry o f Agriculture, Water Resources, and Processing Industry (MAWRPI). In December 2008, the Government transferred DRWS from MAWRPI to the National Agency o f Local Self-Governance Affairs (NALSG) aiming to ensure more transparent and efficient management o f the sector through closer l inks between DRWS and the rural self-government entities-Ayil Okmotu (AO).
3. In urban areas, assets and responsibilities for water supply and sewerage were passed on to the municipal utilities (vodakanals). Water safety regulation i s now monitored by the Department for State Sanitary and Epidemiological Inspection (DSSEI) under the Ministry o f Health and i t s implementation ann, the Sanitary and Epidemiological Service (SES). In rural areas, the rural state administrations were given general responsibility for water supply services, but these agencies had insufficient financial and human resource capacity to sustain and expand rural water supplies. After services deteriorated substantially, many rural households began to seek water from untreated sources such as shallow wells, irrigation channels, rivers and streams.
4. The poor state o f rural water supplies and sanitation infrastructure led the World Bank to support the Rural Water Supply and Sanitation Project Credit No. 3579-KG and the Asian Development Bank (ADB) to support the Community-Based Infrastructure Support Services
1
Project. Since 2002, these projects have rehabilitated many old systems, but a large proportion o f rural communities s t i l l lack adequate water supply or sanitation services.
5. The Government o f the Kyrgyz Republic has identified a reliable and well-functioning system o f basic infrastructure services as a priority for sustainable national development. Government and Parliament have focused on the rural water and sanitation sector and are seeking World Bank support for a second investment in the sector that would build on the Rural Water Supply and Sanitation Project (RWSSP), completed in October 2008.
B. Rationale for Bank involvement
6. The Bank has assessed a repeater operation o f RWSSP as desirable, fully justified, and the best option to maximize development outcomes based on RWSSP satisfactory implementation performance to date, and projected benefits o f expanded coverage among rural communities. The first project development impacts met and exceeded initial targets set forth in the Project Appraisal Document: the effects o f waterborne diseases such as giardiasis and enterobiasis have been reduced six-fold in villages; some 97 percent o f women interviewed reported that their workload had been reduced as a direct consequence o f the project. These results have generated Government interest and created a demand among non-RWSSP rural communities to extend project coverage as rapidly as possible.
7. The proposed repeater project was discussed and included in the current Joint Country Support Strategy (JCSS) Report No. 39719-KG dated May 23,2007. Further investments in rural water supply infrastructure and capacity building at both national and community levels are needed and crucial for poverty reduction, empowerment o f rural communities, and strengthening the Kyrgyz Republic decentralization process.
8. The f i rs t RWSS project was complemented by parallel grant financing by DFID and a concurrent ADB loan for rural water supply and sanitation in the southern oblasts.' Common goals and progressive harmonization o f the three investment channels led to a single joint Project Management Unit (PIU) for the projects. The proposed second project will build on this collaboration with closely linked joint co-financing by DFID through a multi-donor trust fund, and enhanced coordination with the ADB supported RWSS project. This approach aims to create investment efficiency and opportunities for other donors to provide support within a common strategic framework, and help coordinate support to the Government as it moves from a project- based approach to an integrated national RWSS program.
C. H i g h e r level objectives to which the project contributes
9. The second Rural Water Supply and Sanitation Project (RWSSP-2) would build on Bank, ADB, and DFID experience gained during implementing RWSSP and assisting local governments in the Kyrgyz Republic through related projects. RWSSP-2 will help achieve the objectives o f the JCSS that was submitted to the World Bank Board for discussion April 26, 2007. The JCSS, which includes RWSSP-2, underlines ''. ..an urgent need to stem deterioration in key infrastructure and social services that will reduce non-income dimensions o f poverty" and
Oblast i s a region. Kyrgyzstan has 7 oblasts and 40 rayons, which are the districts.
2
a clear “. . .need to support the Government’s efforts to ensure and enhance the provision of, and access to, essential public services.”
11. PROJECT DESCRIPTION
A. Lending instrument
10. form o f an IDA Grant and Credit.
. The IDA lending instrument for RWSSP-2 i s a Specific Investment Loan (SIL), in the
B. Project development objective and key indicators
11. The Development Objective o f RWSSP-2 i s to assist the Borrower in: (i) improving access to potable water for the participating communities; and (ii) improving hygiene, sanitation and water-related practices at individual, family and institutional levels in the rural areas.
12. The outcomes o f RWSSP-2 will be improved access, quantity, and quality o f water supply services available to rural citizens o f the Kyrgyz Republic. Specifically, the project performance will be assessed against the following indicators:
0 Increase in number o f residents benefiting from regular availability o f safe potable water. A decline in waterborne diseases in project communities
13. The original results framework was updated to reflect the lessons learned from the RWSSP Impact Assessment and recent experiences designing frameworks in other Bank projects. In addition, DFID financed a baseline survey to provide the basis for project monitoring and evaluation. Qualitative and quantitative indicators have been balanced between coverage/access and impact at the local level and sector performance.
C. Project components
14. The total cost o f RWSSP-2 i s estimated at US$18.37 million; o f which US$10 mi l l ion equivalent will be financed by IDA (as a blend o f US$5.5 mi l l ion IDA credit and US$4.5 mi l l ion IDA grant), UKE5.0 mi l l ion (about US$7.15 million) by DFID (out o f which UKE4.7 will be made available for the project), US$1.55 mi l l ion equivalent by Government (15 percent) and US$0.49 equivalent by the participating communities (5.0 percent) to the project c iv i l works component.
RWSSP-2 will consist o f the fol lowing four components that generally fo l low the RWSSP structure. However, component activities are grouped differently and component financing and implementation arrangements are revised (see Annexes 4 & 5 for details):
15. Component A: Water Supplv Infrastructure and Eauipment (estimated component cost US$15.25 million). This component will provide financing to local communities represented by Community Drinking Water Users Unions (CDWUUs) to rehabilitate or expand existing village water supply systems. As part o f the c iv i l works contracts, this component will also finance the following: refurbishment or construction o f demonstration sanitation facilities at
3
schools and medical posts; equipment supplied to selected CDWUUs and/or their associations to maintain the water systems; and consultancy services for technical supervision o f construction activities to ensure the quality o f infrastructure financed by the project.
16. Component B: Sanitation and Hygiene Promotion Program (estimated cost US$0.68 million). This component will support village-level promotion o f healthy hygiene and sanitation practices through technical assistance, including sanitary latrine construction. Component activities will be coordinated with the Republican Centre for Health Promotion (RCHP) that i s working under the Health and Social Protection Sector-Wide Approach project (SWAP; P084977) to foster health awareness throughout the country. (The refurbishment o f demonstration sanitation facilities at schools and medical posts is included in component A as part o f the infrastructure works.) Component B will be implemented through consulting services (to be provided by a national N G O or firm) and in direct coordination with the RCHP.
17. Component C: Institutional Development (estimated cost US$0.49 million). This component will finance consultancy services to assist Government to ensure sustainability o f the rural water supply programs, including support to: (a) endorse and implement the sector strategy prepared under the earlier project; (b) develop or revise legislation to ensure synergies among CDWUUs and local self-governance, including develop and institutionalize new agreements between Ayil Okmotu and CDWUUs; (c) train and assist CDWUUs and DRWS to build on the experience and tools developed by RWSSP, including ensuring that gender, voice, and choice in participatory processes are taken into account; and (d) strengthen the project Management Information System by adding a GIS interface and consolidating a country-wide database on village-level water supply and sanitation. Detailed Terms o f Reference for Component C will be developed during project implementation.
18. Component D: Proiect Management (estimated cost US$1.95 million). The component will finance the following: l imited equipment and vehicles, operating costs (staff salaries, in-country travel, and mandatory employer contributions to the Social Fund o f the Kyrgyz Republic) and training associated with project implementation; monitoring and evaluation activities, including regular impact surveys/assessments and annual audits.
19. Retroactive Financing (US$0.80 million). Due to cost overruns caused by implementation delays and the l o w capacity o f local contractors during the f i rs t project, the completion o f approximately 16 sub-projects was financed by Government, which has requested retroactive financing to cover these costs.2 Retroactive financing will be included in Component A if Government submits documentation, acceptable for the Bank, confirming actual financing out o f their budget.
* The Ministry of Finance has indicated readiness to provide bridge financing until the proposed IDA financing becomes available. On September 12,2008, the World Bank received a formal request from the Ministry o f Finance for retroactive financing, including the amount, period, and nature of the activities (works, services, operating expenses). World Bank policy allows an eligibility period o f up to 12 months prior to signing and up to 20 percent of Grant and Credit proceeds. For RWSSP-2, the required period i s expected to be 12 months prior to signing and the amount will be up to US$SOO,OOO or 8.0 percent of the proposed Credit and Grant, an amount established as the ceiling for retroactive financing under the project, at Government request.
4
20. Project Preparat ion Advance (PPA), US$O.l5 million for Components A and D was provided to carry out preparatory activities including community mobilization campaigns and feasibility studies.
D. Lessons learned and reflected in the project design
21. subprojects and consultations with beneficiaries, NGOs, Government, agencies, and the PMU:
The following lessons emerged from detailed reviews o f completed and ongoing
Community participation: views and inputs should be collected pr ior to subproject selection and design. Community-based organizations should be formed and mobilized; intensive awareness campaigns should be carried out on subproject selection criteria and post- implementation requirements. In-kind community contributions are impractical. In-kind contributions o f 15 percent, consisting o f labor inputs to project activities should be excluded from subproject eligibility criteria because this idea was found to be unworkable. It caused implementation delays, conflicts with contractors, and resulted in poor-quality construction. Subproject design should be compatible with community management capacity. Successful community-based operations require sufficient capacity to be able to maintain and operate the system. Some ADB-financed subprojects included multiple villages with a total population o f more than 30,000, but the geographic spread was over 80 kilometers apart, which le f t village communities struggling to cope with system maintenance and operations, and dramatically increased related costs. Communities need access to maintenance equipment. The Community Drinking Water Users’ Unions (CDWUUs) had to rent equipment, which in many cases was unaffordable. Most communities were willing to procure equipment on installment financing arrangements and asked the project to help create a revolving fund. A pilot fund will be set up under an ADB-financed project and results will be discussed in year two o f project implementation. CD WUUs need training to operate and maintain the infiastructure. This includes user- friendly operation manuals in local language to ensure sustainable operations. The Ayil Okmotus must be involved f iom identijkation to post-implementation, This should be mandatory to ensure subproject sustainability for back-up support to CDWUUs and to facilitate efficient tariff collection, particularly from defaulters; to help in case o f major equipment breakdowns; and to resolve conflicts among CDWUU members or communities. In May 2008, the Government adopted new legislation that places responsibility for rural water supply exclusively with the Local Self-Government bodies (Ayil Okmotu), which are supervised by the NALSG. In addition, the Impact Study o f the f i rst project confirmed that some participating communities were reluctant to adopt the assets, which then became legal assets o f the Ayi l Okmotus. Under RWSSP-2, to reflect the provisions o f the law, the Ayil Okmotus will own the rehabilitated assets and must be motivated to provide resources and ensure that water supply costs are included in their annual budgets, particularly for longer- te rm financing for system replacement or expansion. Former Soviet Union (FSU) design criteria should be gradually updated to reflect modern construction standards. Improved guidelines recently established by the DRWS should be
5
used as the basis for upgrading, to ensure that the technology adopted i s simple, technically sound, and cost-effective. Needs for water household connections should be considered. A frequent complaint from RWSSP beneficiary communities concerned the loss o f household connections that were available in homes before the Soviet Union collapsed, particularly in some Issyk-Kul Oblast areas where people undertake activities related to seasonal tourism.
22. Based on these lessons, subproject selection and engineering design criteria have been improved to ensure that subprojects are sustainable, simple, technically sound, cost-effective, and strictly demand-driven. To increase beneficiary satisfaction levels, all second-phase subprojects will be designed to accommodate demands for maintaining existing household connections or installing new ones. The number o f household connections will be agreed with the CDWUUs after thorough consultation with the larger community. It i s estimated that some 75 percent o f households will apply for a connection; most applicants are expected from tourist areas, such as Issyk-Kul Oblast.
E. Alternatives considered and reasons for rejection
23. The RWSSP was satisfactory in delivering water supply schemes to rural communities in the Northern oblasts. The proposed approach strikes a good balance between a Community Driven Development (CDD) approach, such as the one for the Village Investment Program, and a centralized provision o f services. The chosen delivery strategy allows the implementation o f larger and more complex schemes, which can supply sufficient drinking water to large villages as well as to small ones. Construction o f large and complex schemes would be very difficult to attain with CDD approach, i.e. limited community grants and local-labor-intensive implementation. However, community participation has advantages over more centralized delivery mechanisms because CDD- better addresses local demands and ensures decentralized operations and maintenance, which i s crucial for project success, especially for remote villages. A repeater project was considered the most appropriate for two primary reasons: (a) the need to introduce critical changes in project design, based on lessons learned from RWSSP and (b) the ability to prepare a repeater operation quickly using existing RWSSP PMU staff resources without compromising the quality o f robust preparatory work.
111. IMPLEMENTATION
A. Partnership arrangements
24. The RWSSP directly benefited from technical assistance and training supported by parallel co-financing from DFID. To increase effectiveness o f donor financing in RWSSP-2, DFID plans to co-finance the project through a Trust Fund arrangement. O f a total UKE5.0 mil, DFID will allocate UKE300,OOO o f the grant for Bank-executed special studies, including TA for project effectiveness and impact assessment, to help analyze project implementation and guide any necessary improvements.
25. Key donors agreed to maintain close collaboration in the sector and enhance harmonization o f donor support. RWSSP covered three northern oblasts and was closely linked
6
to a parallel ADB-financed operation that covered the other four oblasts in the country. The ADB project i s being extended through additional financing, providing an opportunity for increased donor coordination and dialogue in the rural water sector. The two project teams plan close collaboration via joint supervision missions and jointly addressing cross-cutting implementation issues. Complementary support in strategic financing i s being provided by the OECD National Water Policy Dialogue Initiative, and UNDP i s considering support to legislation and capacity building in the sector. Additional bilateral agencies have expressed potential interest in providing additional financial support to the rural WSS sector. Government has established a Coordination Council for the rural and urban water supply sectors that will include participation o f relevant Government ministries and agencies, bilateral donors, and International Financing Institutions (IFIs) active in the sector. Cooperation with all project partners has been satisfactory.
B. Institutional and implementation arrangements
26. The Project will be implemented over four years, beginning in May 2009, the projected effectiveness date o f the IDA Credit and Grant, by a joint P M U that ensures aligned and harmonized donor efforts and i s a unit o f DRWS under NALSG. The Coordination Council w i l l ensure a coordinated implementation approach among sector projects including RWSSP-2.
27. The P M U will assume overall responsibility for project implementation and activities coordination; it i s envisaged as a temporary unit o f DRWS, structured to increase capacity o f NALSGDRWS to take over future work. NALSG, through i ts DRWS, wi l l be a Project Implementing Agency. The P M U will contract out all design, construction supervision, and community mobilization work. Specific recommendations for strengthening PMU capacity were provided by the financial management and procurement capacity assessments. Under the proposed RWSSP-2, greater management capacity i s needed within the PMU, which in the longer term wi l l be transferred to the DRWSNALSG. Other P M U functions, particularly planning, procurement, and contract management, are expected to be implemented in close coordination with the Ayil Okmotu (AO), to build A 0 capacity to perform limited supervision functions during subproject identification and implementation. AOs may support communities for operations and maintenance, potentially with funding from their annual budgets; according to their new role in the provision o f local services assigned by the Law o f the Kyrgyz Republic #99 “On Local Self-Government and Local State Administration”, May 29, 2008. Substantial local- level capacity building i s required and a proposal i s in place to introduce and train engineers and supervision engineers in the field.
28. financial management, procurement, disbursement and safeguards policies.
DRWSPMU will implement the project according to World Bank guidelines, including:
29. A key objective o f RWSSP was to create a more effective Department o f Rural Water Supply (DRWS) from a large and inefficient national rural water supply entity, Kyrgyz Ayil Suu (KAS). The intention was that DRWS would become the key regulatory agency for rural water supply but this objective has yet to be achieved because DRWS was situated in the Ministry o f Agriculture and line ministry support was inadequate. The DRWS has been weak-its budget was inadequate, staff capacity was low, and i t s role in providing rural water and sanitation programs was not clearly acknowledged within Government.
7
30. Government considered various options to increase DRWS effectiveness and long-term sustainability, including establishing an independent water regulatory authority, a new ministry of water resources, or locating DRWS within the National Agency o f Local Self-Governance Affairs (NALSG). Analysis convinced Government to transfer DRWS to NALSG and this new structure will ensure closer l i n k s between the sector and the rural self-government b~d ies .~
C. Monitoring and evaluation of outcomeshesults
3 1. The P M U will be in charge o f continuous monitoring and evaluation (M&E) o f project implementation to (a) ensure project investments are implemented according to procedures satisfactory to the Bank; (b) provide status reports o f project performance in physical progress, socio-economic benefits, and institutional capacity development; (c) alert Kyrgyz authorities and donors to actual or potential implementation problems, so that timely adjustments can be made; and (d) conduct continuous self-evaluations; identify and implement corrective measures. (M&E details are in Annex 3.)
32. During planning and M&E efforts for the f i rst phase o f the two projects (WBDFID and ADB) extensive information was collected on water supply and sanitation across the country but it i s stored in separate databases. A key objective o f RWSSP-2 will be to strengthen i t s Management Information System by including a compiled comprehensive database on village- level water systems and sanitation that will be integrated with a GIS to enhance access and readability, and used to improve water supply and sanitation services planning and management.
33. The results o f M&E activities wi l l be reflected in quarterly and annual progress reports. Progress reports will cover work implementation, institutional activities development, training and studies, performance indicators, and financial management reports. The final quarterly report o f each year will be prepared as an annual report that summarizes results achieved during the year and provides a work plan and budget for the following year. A Project Mid-Term Review (MTR) will be carried out by the Bank no later than May 31, 2011, and should include ADB, Bank, and DFID, and other interested donors, as appropriate.
D. Sustainability
34. The impact assessment and other RWSSP experiences suggest that a key factor for sustainability i s local communities’ capacity to support the provision o f services. Establishing CDWUUs has been effective in this regard and the next phase will continue to use established community mobilization approaches. However, community involvement i s not a panacea for sustainability; affluent communities appear to have fee collections sufficient to ensure future services provision but they represent only about 25 percent o f implemented community schemes. In fact, most communities are likely to face difficulties in fee collections because the second phase o f the project will move to more inaccessible locations. These communities’ ability to pay all costs o f service provision i s doubtful and subsidies may be required. At the same time, with the latest changes in allocations o f budgetary resources, Ayil Okmotu have gained greater financial independence and are considered an important factor in ensuring long-term
Decree o f the President o f the Kyrgyz Republic UP#468 dated December 27,2008 3
8
sustainability o f rehabilitated water systems. Consultations with Government, local-level stakeholders, and donors suggest that the A 0 can best identify needs and budget, and seek national-level funding through the annual budget process (similar to health and education). This wi l l require building A 0 capacity to plan, budget, and monitor water provision implementation. Since local planning effectiveness will depend in part on national-level support, a strong national body i s needed to support AOs to ensure effective service provision. Thus, based on prevailing legal and regulatory frameworks, the WSS service i s likely to be sustainable over the long-term based on the following:
Weak institutional capacity at central, regional and local levels
Social Sustainability. Involvement o f the community and the A 0 along with the DRWS’ project management unit in project planning, designing, financing and implementation i s more likely to result in locally acceptable and sustainable technical solutions. The AO’s participation will ensure smooth asset handover at subproject completion and that AOs acknowledge system components and condition. Technical Sustainability. Simplified technical designs will provide water supply schemes that CDWUUs and AOs can easily manage efficiently and operate reliably. Institutional Sustainability. Since asset ownership will rest with the AO, notwithstanding the community capital expenditure equity contribution, a service delivew agreement (SDA) between the A 0 and the CDWUU i s more likely to deliver efficient services. A sample SDA will be included in the Project Operations Manual, and be a prerequisite for project coverage o f a village/AO. The SDA will specify the rights, roles, and responsibilities o f both parties (A0 and CDWUU) and i s expected to become an important tool to ensure a good balance o f community participation through CDWUUs and financial and institutional support from AOs. A0 financial commitment, especially in case o f a major system breakdown, and long- term capital investment planning will improve the durability o f the schemes. The DRWS may provide technical solutions and oversee asset creation in the long-term subject to A 0 demand for system expansion and capital investment plans. Delegating service delivery to the CDWUUs i s a pragmatic option that deals with the geographical spread o f the villages/communities without the need to strengthen the A 0 with additional human resources or expenditures on personnel management. Financial Sustainability. Current tariffs cover taxes levied on the CDWUU and the debt- servicing component o f capital expenditure. By delegating service delivery responsibility to CDWUUs, the A 0 may assist in securing funding from republican and local budgets to “subsidize” the provision o f rural drinking water. Where the tariffs can cover operational costs, the A 0 may limit i ts role to strategic and financial planning for system breakdown or maintenance, and long-term capital investment planning; arrangements would be negotiated and enshrined in the AO-CDWUU agreement.
E. Critical risks and possible controversial aspects
0
0
0
The project includes activities designed to strengthen
operational efficiency, accountability and transparency. institutional capacity and systems in order to improve M
9
A 0 asset ownership may discourage communities from providing cash contributions because local people might be reluctant to entrust money to the local administration.
Schemes not implemented according to the technical specifications, which could result in poor quality of the assets.
The sector i s characterized by fragmented and somewhat overlapping mandates with several institutions responsible for different aspects of sector performance, including the Department of Rural Water Supply (DRWS) in the National Agency for Local Self-Governance Affairs (NALSG), Ministry o f Health (MOH), Rural Self-Governments (Ayil Okmotu- AO). There i s relatively weak regulatory capacity, and limited formal channels of communication between agencies.
An experienced Construction Management (CM) firm will be contracted to oversee physical implementation.
Limited capacity within DRWS/NALSG and the Project Management Unit (PMU) may lead to delays in implementation of the large investment program. Funds could be diverted from project accounts and from the accounts of the participating communities, affecting the quality of operations and maintenance Local and central government agencies may intervene in (or interfere with) the procurement actions/decisions
Cost overruns occur during project implementation
Communities fail to provide timely counterpart funding Communities do not participate
The project includes enhanced community mobilization and participatory discussions and supervision and specific control systems to monitor sub-project identification and implementation processes. CDWUU, directly elected by and subordinated to the community, will be a main counterpart for the project holding community contributions. Service Delivery Agreements (SDAs) will be developed to clearly define rights, roles, and responsibilities of A 0 and
Local inflation and foreign exchange fluctuations are beyond project control, but project design includes flexibility to adjust subsequent year’s investment programs to available resources PMU will only sign on civil works when all participating communities’ counterpart funding has been made available Participatory approaches and awareness campaigns must precede programmed launch
CDwuU The Project will specifically address institutional weaknesses
-
by developing coordinating mechanisms and through capacity- building measures. By working with DRWS, NALSG, and AOs, the Project will help to ensure consistency in policies and operating procedures, and the Bank will continue to promote dialogue and close coordination between Government stakeholders and external partners.
Mitigation measures include implementation support. Lessons are drawn from the first project and the project implementation team i s strengthened with clearer structure and additional staff. Additional mitigation measures are described under F M and Procurement below. Adequate F M mitigation measures developed for inherent risks - at country, entity and project level, as well as for control risks - budgeting, internal controls, funds’ flow, accounting, reporting, auditing. The Bank procurement procedures (including anti-corruption guidelines and disclosing policies) will be applied for all the procurement activities financed under the project with close Bank monitoring and supervision from the country office. Strict prior and post review (including physical inspections) will be carried out.
S
M
M
M
M
To component results Component A: Water Supply Infrastructure and Equipment Current official design standards for rural water schemes are not financially viable in the current economic environment and are not appropriate for community-managed schemes.
The project will assist the relevant government agencies to develop revised RWSS technical design standards and will facilitate development of a time-bound action plan for introducing the revised technical standards.
Project cannot attract bids from capable contractors to cany out civil works
Civil works contractors have gained experience on RWSSP. Contract durations will be scheduled realistically, based on RWSSP experiences
M
M
M
M
M
N
10
Collaboration with other government agencies namely with the Ministry o f Health. In addition, there may be restrictions in sharing information between the ADB- and WB-financed projects. Component C: Institutional Development A 0 unmotivated to undertake agreement with CDWUU CDWUUs management and water users neglect or underestimate the real cost o f system O&M and keep tariff levels
Project design explicitly focuses on building effectiveness of inter-agency interactions particularly through the Coordination Council with representation of all involved agencies. The implementation structure with a joint P M U and common staff wi l l ensure the data sharing.
M
N A partnership approach i s essential to the nature and form o f agreement Project design provides detailed and substantive evidence to water users on real O&M costs, consequences (financial and social) o f inadequate O&M financing, and benefits o f S
36. While the project will be implemented in an environment of high perceived risk, adequate measures are in place, including implementation arrangements when the P M U will comprise full-time dedicated financial management staff that will manage project funds, including the Designated Accounts; maintain accounts and have them audited o n schedule; and promptly resolve issues raised by auditors. The P M U will ensure that project resources are managed to maximize economy, efficiency, and effectiveness, and that project funds are used only to achieve project objectives..
Overall Risk Rating
F. Loadcredit conditions and covenants
M
37. Effectiveness Conditions
0 The N A L S G formally adopts the Project Operations Manual.
IV. APPRAISAL SUMMARY
A. Economic and financial analyses
38. Since capital investment distribution is unknown among subprojects using various water supply systems, project economic analysis was conducted for two types o f water supply systems-a borehole with hand-pump, and a standpipe system. Total project investment costs were assumed to be 80 percent networks with stand posts, and 20 percent hand pumps.
39. The project’s main economic benefits to around 100,000 beneficiaries include savings related to time, potable water costs, health sector and individual expenditures on treatment for waterborne infectious diseases; and the economic value o f a lower number o f lost persoddays due to waterborne infectious diseases. The project’s main economic costs are investments in rehabilitating existing water supply systems and related operation and maintenance costs.
40. Rehabilitating existing water supply systems and/or constructing new ones will reduce average water collection time, which potential beneficiaries can reassign to value-added economic activities. Potential beneficiaries without functioning water supply systems now have to meet their potable water demand through higher-cost, less-effective alternatives. The project
11
will generate direct health benefits by reducing health sector costs linked to hospitalization for waterborne infectious diseases; and reducing individual patient costs. The project’s indirect health benefit i s higher value-added by fewer lost persoddays.
41. The economic analysis yielded a N e t Present Value o f US$12.9 million and an internal economic rate o f return (EIRR) o f 32 percent. Since a standpipe water supply system i s more economically viable, the share increase o f investments in the standpipe system will raise the overall project EIRR (see Annex 9).
42. Separate financial analyses were carried out for two types o f subprojects: a borehole with hand-pump, and a standpipe system. Unlike economic analysis, financial analysis utilizes market prices to quantify costs and benefits and incorporates the impact o f taxes. Primary financial benefits for both types o f subprojects include the value o f “convenience” time savings, lower potable water prices, and fewer lost persoddays linked to waterborne illnesses. Primary financial costs o f subprojects are capital investments in water system construction and/or rehabilitation and O&M costs. Financial analyses o f investments in a borehole with hand-pump system yielded FIRR o f 22 percent; and for a standpipe system, FIRR was 30 percent.
B. Technical
43. Achieving these objectives requires selecting sound investments and technical solutions while reducing long-term operating costs to the lowest possible level. The solution must be based on technical and economic criteria that identify the least-cost alternatives for infrastructure services in the Kyrgyz Republic, where investment needs now exceed available financing. Priority will be given to investments that address the most urgent needs and contribute to f i rst- stage, interim improvements to the current situation. Given that all infrastructure and equipment must be certified by Kyrgyz authorities before being put into operation, all technical designs have been developed to satisfy Kyrgyz standards and international best practice.
44. Engineering designs for RWSSP water supply systems were based on parameters that maximized equitable coverage o f household beneficiaries among villages within the available financial resources envelope. The P M U mobilized consultants to work with the State Architecture and Construction Agency (GAAS) and agree on modified rural water supply building standards based on deviations established in RWSSP. Ultimately, the PMU should prepare comprehensive standard engineering designs, approved by G U S , and included in the Operations Manual to ensure that contractors adhere to national standards; and the PMU should collaborate with GAAS to obtain information about contractor qualifications and experience.
45. Suggested Technical Parameters for Final Designs: 0 The project will focus on rehabilitating existing systems, which consist o f ground
water exploitation, transmission to storage reservoirs, gravity transmission l ines from the reservoirs to distribution networks and standpipe delivery points that serve several families. I t i s expected that some communities may choose hand pump systems. Since most existing standpipe systems were oversized and did not consider operation and maintenance costs, the project will focus on cost-effectiveness and low-maintenance, GAAS will be consulted on standards and best practices to align system designs with
12
affordable service levels, and materials that are new to Kyrgyz Republic will be promoted, such polyethylene (PE) pipes instead o f asbestos-cement pipes, and chlorination instead o f ultra-violet (UV) treatment to disinfect water.
To maximize coverage o f basic water services, RWSSP built systems with public standpipes within 250 meters o f all beneficiaries, without household connections. Systems were designed for average water consumption o f 50 LiterKapitdDay. The 2007 impact assessment determined that most project beneficiaries would be willing to pay for individual household connections. It i s recommended that all RWSSP-2 piped water systems are designed assuming household connections within the design l i fe o f the system. The project should offer to provide individual metered household connections during system construction for households or communities that agree to pay incremental costs o f connections.
Basic sanitation facilities coverage continues to be high but the unimproved pit latrines are neither safe nor adequate enough to meet Millennium Development Goal targets, and fewer than 50 percent o f households have access to “sanitary latrines.” The RWSSP-2 will provide technical assistance under the sanitation and hygiene component to promote household construction o f sanitary latrines, including developing standard design options and “sanitation choice” guides that inform rural households about design and construction o f affordable sanitation options (e.g., ventilated improved pit (VIP) latrines, sanplats, communal septic tanks, among others).
0
0
C. Fiduciary
46. Procurement (See Annex 8). On July 28, 2008, the Kyrgyz Republic enacted a new Public Procurement Law (PPL) that introduced significant improvement over the 2004 PPL, including removing the requirement for prior approval o f procurement documents and decisions by the State Agency on Public Procurement and Material Reserve (SAPPMR). Whi le the new PPL provides for transparent and competitive procurement, implementation and enforcement capacities remain weak. The SAPPMR has published standard bidding documents, and the National Procurement Training Center (supported by a Bank Institutional Development Fund (IDF) (Cr. 4560-KG and Gr. H462-KG) grant) i s building government procurement capacity at all levels. Nevertheless, weak implementation capacity o f procurement law means that the country risk rating i s s t i l l high.
47. A project procurement capacity assessment was carried out in August 2008. The project wilI be implemented by the existing joint P M U under the DRWSNALSG. The P M U managed the DFID/WB and ADB investment operations and has two procurement specialists with adequate procurement knowledge and experience in National Competitive Bidding (NCB) or “Shopping” who wi l l work as a team; international and national technical consultants will assist in procurement and project management (to develop technical specifications, evaluate bids, and supervise construction).
48. The overall project procurement risk i s rated moderate after mitigation. To further mitigate identified potential risks, procurement training wi l l be provided during project implementation and Bank good governance and anticorruption guidelines will be adhered to.
13
Additionally, the PMU will prepare a detailed basic procurement manual and organize brief information seminars for c iv i l works contractors, especially in bid preparation and construction and contract management.
49. Financial Management. In August 2008, the Bank conducted an assessment o f P M U financial management (FM) arrangements to determine whether existing systems are acceptable. The assessment reviewed systems o f accounting, financial reporting, auditing, internal controls, budgeting, and staff capacity. The P M U that has been implementing RWSSP will continue to be responsible for the proposed project FM system. However, the Bank found that the FM system under the f i rs t project was unsatisfactory because the P M U utilized an obsolete version o f 1-C accounting software with insufficient capacity to generate interim financial reports (IFRs) in a format satisfactory to the Bank or the Ministry o f Finance. The internal control policies and procedures were found to be weak and the FMM will be revised by the project effectiveness; and PMU staff members were inconsistent in following correct procedures. A time-bound action plan was developed and agreed with the Borrower that included plans to strengthen FM arrangements through the fol lowing actions: (a) revise financial and accounting procedures manual by effectiveness; (b) enhance staff capacity by adding an experienced senior disbursement specialist to be hired during the project implementation as a need arises, in consultation with the Bank. Implementation o f this activity i s in progress. .The action plan that included update o f the accounting software, addressing internal control weaknesses, refund o f ineligible expenses incurred during the course o f the f i rs t project, etc. was implemented that ensured satisfactory project financial management arrangements before Negotiations, except for FM manual update (as a part o f the POM) that will be done before the project effectiveness.
The overall financial management risk for the project before mitigation measures is substantial and moderate after mitigation measures.
Fiduciary risk at the Country level: The fiduciary risk at the country i s high before mitigation measures and substantial after mitigation measures. RWSSP-2 will be implemented by existing PMU, currently implementing ADB- and Bank-financed projects; the P M U will be strengthened by recruiting an experienced Disbursement Specialist to ensure that satisfactory FM arrangements are in place
D. Social
50. Extensive documentation on project experience and impact was reviewed and field visits were carried out to meet with several established CDWUUs and assess capacity-building results. The RWSSP demonstrated effective community mobilization including: clear and transparent criteria for village selection to ensure equity; comprehensive community involvement in project planning, tendering, construction, and completion; and follow-up support to community structures set up to operate and maintain the rehabilitated water schemes-the Community Drinking Water Users Unions (CDWUUs).
5 1. The 2006 impact assessment o f the RWSSP indicated the project successfully created a sustainable community-based model to deliver water, sanitation, and hygiene. The project changed attitudes towards village water problems and now communities accept responsibility for
14
managing and running their own water schemes. These experiences and lessons learned from the project will be incorporated into RWSSP-2. While the project focuses on access for all, water supply and sanitation upgrading has differential benefits for rural women in terms o f their health and increasing their contributions to family well-being. Since the dynamics o f gender are not well understood in the decision-making processes concerning sustaining water and sanitation in rural Kyrgyzstan, the project will offer an opportunity to develop such an understanding through data collection and associated studies and research to ensure that female and male contributions and inputs are optimized. Community mobilization will be implemented through the following:
Use RWSSP processes for community mobilization; use time and milestone guidelines for each stage. Commit to gender equality in community mobilization, similar to RWSSP, and continue to build understanding o f gender dynamics to inform approaches, and improve results and outcomes for females and males. Build on RWSSP approaches to establish new CDWUUs and improve their organizational, technical, financial, and mutual support capacities.
0 Build networks o f self-support for CDWLTUs through local-, rayon-, and higher-level CDWUU associations for support in maintaining rehabilitated water systems, and accessing consultancy services for quality technical supervision o f construction activities. Develop and formalize CDWUU l inks with village-level partners and with AO- and rayon-level government institutions.
0
0
0
E. Environment
52. RWSSP-2 will not finance any subproject with significant or irreversible environmental impacts, and therefore i s classified as Environmental Category "B". Short-term impacts that occur during construction will be minimized through preventive measures, and mitigated by curative actions after the civil works are completed. Use o f construction materials that are hazardous to human health (e.g., asbestos,) will not be permitted. An Environmental Management Framework (EMF) for the project consistent with Environmental Assessment (EA) requirements for both the Kyrgyz Republic and the World Bank was prepared by DRWSPMU and reviewed and approved by the Kyrgyz Forestry and Environment Preservation Agency and found satisfactory to the World Bank. A Russian-language version o f the EMF was disclosed in- country on November 5, 2008 and the English-language version was received by the Bank and sent to the Bank Infoshop on December 11 , 2008. The EMF will be incorporated into the OM. All investments must obtain the clearances required by Kyrgyz national regulations. An EMF summary i s in Annex 10. For each investment under the Component A, DRWSFMU will prepare an Environmental Management Plan (EMP) describing likely impacts and strategies to address or mitigate them.
F. Safeguard policies
Safeguard Policies Triggered by the Project Yes N o Environmental Assessment (OP/BP 4.01) [I Natural Habitats (OP/BP 4.04) Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.1 1)
[XI [XI [XI
15
Involuntary Resettlement (OP/BP 4.12) [ I [XI Indigenous Peoples (OP/BP 4.10) [I [XI Forests (OP/BP 4.36) [ I [XI Safety o f Dams (OP/BP 4.37) 11 [XI Projects in Disputed Areas (OP/BP 7.60) [I [XI Projects on International Waterways (OP/BP 7.50) [XI 11
53. International Waterways (World Bank OP 7.50). Some water supply systems scheduled for rehabilitation under RWSSP-2 may draw small amounts o f water from rivers that are international waterways shared by the Kyrgyz Republic and neighboring Kazakhstan, Tajikistan, and Uzbekistan. Project interventions are not expected to adversely affect water quality or quantity to downstream riparian states. Infrastructure rehabilitation and modernization and water supply management improvements should increase system efficiency, thereby generating water savings and providing users with a reliable water supply. The project i s exempt from notifying riparian governments because proposed activities do not attempt to modify waterways, nor significantly increase water abstraction volumes, leaving the water rights o f other riparian countries unaffected.
54. Exception to the notification requirements o f O.P. 7.50 has been granted because the project only supports investments for abstractions o f water from (a) locally confined (non- transboundary) aquifers, (b) smaller, detached springs and small rivers. Only about 30 percent o f the ca. 100,000 population served by the project will be supplied from the surface water network (ca. 30,000 people). The estimated per day per capita water consumption i s 80-100 l/c/d, or total annual water consumption (and thus abstraction from rivers) o f 550,000 m3.
55. The project will be spread over three river basins, Chui, Naryn, and Talas. An assessment o f estimated relative project impacts in each basin, assuming 10,000 users each, was carried out during preparation. Annual water discharges for the three basins at or near the Kyrgyz national boundaries were obtained and these flow volumes compared with the projected total annual volume o f water use under this project. (sources: UNH/GRDC, http://www.grdc.sr.unh.edu/index.html) Detailed results are shown in Annex 10. On an annual basis the total volume o f abstracted water to the total basin discharge has a ratio o f 1:10,960 for Talas, 1:32,000 for Chui, and 1:63,000 f o r Naryn.
56. Involuntary Resettlement (World Bank OP 4.12) The project will not trigger OP/BP 4.12 as it deals exclusively with rehabilitation/repair/upgrading o f existing infrastructure and installations on existing premises or new routes on public rights o f way, none o f which entail land acquisition, human relocation, or restrictions on access to resources. Cases with new construction are neither expected nor were any identified and included in the first year investment plan. In the event that this would be proposed to change in the course o f implementation, for example to provide water supply infrastructure to a village where it currently does not exist, the Bank will review the proposed subproject or subprojects and determine whether an amendment to the Financing Agreement i s required and what if any measures are required to comply with the safeguard policies o f the World Bank. Such measures might include: updating o f the project's Environmental Management Framework; preparation o f a Resettlement Policy Framework, Resettlement Action Plan(s) or Abbreviated Resettlement
16
Plan(s); and/or notification o f riparian States in the event that the change would involve new or increased abstraction o f water f rom a transboundary river or tributary o f a transboundary river. Any required amendments to the Financing Agreement and any measures required for compliance with the Bank’s safeguard policies will be completed prior to approval o f any such subprojects.
G. Policy Exceptions and Readiness
57. RWSSP-2 triggers O.P. 7.50 “International Waterways” but exception to notification requirements was granted (paragraphs 53-55); the project requires no other pol icy exceptions and will comply with applicable Bank policies. The project i s programmatic by definition, so it i s anticipated that the investment program would not be fully identified by appraisal. However, an investment program pipeline i s being developed; designs and procurement documents for the first-year-investment program will be completed by the IDA CredWGrant effectiveness date. The implementing agency i s fully operational and has developed a comprehensive Project Operational Manual. The project is ready for implementation.
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Annex 1: Country and Sector or Program Background Kyrgyz Republic: Second Rura l Water Supply & Sanitation Project
Country and Economic Setting
1. The Kyrgyz Republic i s a low-income country with a population o f 5.2 mill ion people. In 2007 the gross national income (GNI) per capita was $600 (Atlas method). This landlocked and mostly mountainous country relies primarily on agriculture; i t s industrial production base i s relatively small. Gold, agricultural products, and hydropower constitute most exports.
2. The Kyrgyz Republic has implemented broad systemic reforms to create the foundations o f a market economy. Some 70 percent o f farm land i s privately owned as a result o f generally equitable land reforms; the economy i s relatively open with a liberalized foreign trade regime and full convertibility o f the Som. Kyrgyz Republic trade and investment policies are arguably the most liberal among member countries o f the Commonwealth o f Independent States.
3. Recently the country has made considerable progress in attaining macroeconomic stability. Average annual gross domestic product (GDP) has grown at about 5.0 percent since 1996 and since 2000, high poverty rates have started to decline. However, despite pro-poor growth, the Kyrgyz Republic remains one o f the poorest countries in the world-about 40 percent o f people live below the poverty line, making the country eligible for grant funds from the International Development Agency (IDA), the World Bank concessional lending facility. Almost 75 percent o f poor people live in rural and mountainous regions, and over the past 15 years, despite steady growth in agricultural production, access has deteriorated to basic public services such as running water, public sewerage, health, and education. During 2007, the sudden rise in external inflation did not disturb the steady growth rate o f 8.2 percent, which was maintained during first eight months o f 2008, before finally declining to 7.4 percent. During August 2007, the external shock o f increased food and fue l prices pushed up the annual inflation rate to 20.1 percent by the end o f 2007, and by August 2008, inflation had reached 29.5 percent.
4. The IMF Poverty Reduction and Growth Framework Program, approved in 2005, was successfully completed by May 2008; Government and the IMF have agreed to launch a new 18- month program.
Sector Background
5. During the last 15 years, Kyrgyzstan has experienced significant upheaval. Following the dissolution o f the Soviet Union and independence from Russia, the country adopted major political, institutional and governance reforms, which have fundamentally changed l i fe in Kyrgyzstan. The Kyrgyz-Ayil-Suu closed (Village Repair and Development Agency) ending large-scale government provision o f rural water supplies and since then most rural water supply schemes have fallen into serious disrepair, eroding health indicators among rural people.
6. Since 2001, two rural investment projects financed by the World Bank with technical assistance provided by DFID and the Asian Development Bank (ADB) facilitated communities to manage rehabilitated systems through Community Drinking Water User Unions (CDWUUs). A Department for Rural Water Supply (DRWS) was set up to assist the CDWUUs and to create and drive new policies for water supply. The two projects have created many CDWUUs, and many water supply schemes have been rehabilitated or built.
18
7. Recently, the Kyrgyz Republic government and citizens have been faced with fundamental changes to governance and responsibility for supplying services such as water and health. The legal framework and government systems have shifted and community responsibilities for management have increased substantially. The Bank- and ADB-funded projects have provided support--community training and institutional capacity building-but a serious concern remains about the long-term effects o f skill and capacity gaps among communities and all levels o f government to manage rural water supply schemes. Wider .government financial commitments exist under the Comprehensive Development Framework and Country Development Strategy.
Access to water supply and sanitation services
8. Published sources differ widely in their assessments o f what proportion o f rural people have access to safe drinking water, but all sources agree that good water supply and sanitation are essential for health and well-being, and that in the Kyrgyz Republic, rural provision o f safe drinking water lags urban areas and needs to be improved significantly. Some 65 percent o f the rural Kyrgyz population faces the complex challenge o f improving access to safe drinking water. In 2006, WHO and UNICEF figures suggested that 66 percent o f rural people have access to improved water supply but only 27 percent have household connections and only 51 percent o f rural people have access to improved sanitation (Table 1). However, in 2006, a report by the Kyrgyz Republic National Statistical Committee suggests that coverage o f access to ‘improved drinking water sources’ i s 81.9 percent in rural areas, and 98.6 percent in urban areas. Improved drinking water sources are defined as piped water, public tap water, boreholehbe well water, protected well water, and protected spring water; there are clear regional variations in levels o f access (from 68 percent in Batken to 84 percent in Jalal-Abad).
9. The Country Development Strategy states that low levels o f access to safe drinking water, sanitation, and improved hygiene characterizes poverty in the Kyrgyz Republic. However, many other poverty characteristics are linked to lack o f access to sanitation and a safe water supply, including rising infant mortality rates and increasing deaths and lost productivity among people contracting infectious diseases (especially typhoid and acute intestinal infections).
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Improved Drinking Water Coverage
Improved Sanitation Coverage
Population Total Urban Rural
House Year House
YO
Total Urban Rural Total connection (thousands) Yo Yo Yo
10. Service sector quality does not always meet required standards and many households receive limited quantities o f water or intermittent water services. Nearly 20 percent o f the overall rural population and 30 percent o f the rural population living in high mountainous areas use water directly from rivers or irrigation canals, which poses serious health risks. Table 2 shows population with access to a water supply prior to the World Bank and ADB projects, and names the source o f that supply based on poverty status defined in the NPRS and location.
1990
Table 2: 2001Water Supply Sources by Poverty Status (%), Poverty Status Running Street Well Spring River,
water water canal tap
Total 33.9 45.6 3.4 1.1 16.0
4,395 38 62 78 47
_r
Non-poor 43.5 40.6 2.3 1.2 12.4
Poor 23.4 51.2 4.5 0.9 19.9
98
98
- Of these, extremely poor
79 66 27 60 75 51
79 66 27 59 75 51
16.9
2004
54.6
5,204 34 66 77 45
6.0 0.7 21.8
Urban 72.4 26.0 1 .o 0.1 0.5
Rural 13.3 56.2 4.6 1.6 24.3
High Mtn. areas 5.1 55.3 2.7 5.8 31.0
Lower Mtn. areas 19.8 63.8 3.1 1.3 12.1
' Plains ' 40.8 40.9 3.5 0.3 14.5
P -
Source: National Poverty Reduction Strategy (2002)
1 1, Government i s pursuing a policy o f streamlining local government structures, which may abolish at least one tier o f government (rayon and/or oblast level) thus increasing the power o f the Ayil Okmotu. Managing rural water supplies at the local level aligns with this objective.
12. Many rural settlements are experiencing substantial out-migration, particularly among wage earners, a trend that not only reduces the number o f water consumers but also erodes household incomes, which must be considered in tariff pricing and payment plans for rural water supplies. Table 3 shows Kyrgyz Republic population figures for each oblast and the proportion
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l iving in poverty (based on 2001 census). Out-migration i s significant from Osh and Jalal-Abad oblasts; poverty incidence i s highest in Naryn, the smallest population o f the seven oblasts.
I I I Source: 2001 census data. Total does not equal 100 percent because Bishkek City i s not included in Chui Oblast figures
Government commitment
13. The Government o f the Kyrgyz Republic has committed itself, through the National Poverty Reduction Strategy (2002), the Comprehensive Development Framework (200 1 ), and the draft Country Development Strategy (2006) to improve the general well-being o f the population and to improve the overall economic status o f Kyrgyzstan. Within the Comprehensive Development Framework (CDF) Government has already identified several key national objectives requiring investment in the rural water supply sector:
Gradually rehabilitate central water supply and sewerage systems, and Improve access among remote and local communities to communication facilities, road and transport services, fresh drinking water, repaired or newly constructed medical and educational facilities.
14. The government intends to pursue these objectives by:
Rehabilitating water supply and sanitation systems Increasing rural access to safe drinking water Revising existing state register on water collecting and water supplying facilities (under the Water Code 2005)
0
0
0
15. Under ‘Guaranteed access to social infrastructure’ in the Country Development Strategy (2006), Government commits to improving access to rural water supply and sanitation. The Government also states, “ In provision of the majority of these services in Kyrgyzstan the state, its local bodies, and institutions of local self-government play the central role, which must guarantee access to critical elements of social inJFastructure and provide appropriate quality of these services to the citizens.”.
16. Government has also demonstrated commitment to increase the portion o f the population with access to safe water supply to 90 percent by 2015 under the Joint Sector Support Strategy, Goal 3.4 Ensuring the guaranteed provision of, and access to, key public services. Under the
21
JCSS Goal 3.4 there i s also a commitment to increase access to improved sanitation to 40 percent by 2015. To operationalize this commitment, the government has, with support from DFID, drafted a Long-term Strategy for the rural water supply and sanitation sector.
Institutional and financing issues
17. The biggest obstacles to providing improved water supply and sanitation services are weak institutional capacity to manage and regulate the process, and high levels o f rural poverty. Since K A S was disbanded, rural water supply improvements have been achieved through donor support, such as World Bank and ADB projects. National-and local-level governments have contributed scant implementation and support work-except for the Ministry o f Health, through SES, which has implemented i ts regulatory function; state institutional ownership o f the water supply improvement process has been limited. Management (and ownership in many cases) o f water supply systems was transferred from state-elected to community-elected bodies-the Community Development Water User Unions (CDWUUs), under Bank and ADB projects, with l i t t le formal participation o f the Local Se l f Government and Administration institutions.
18. Institutional capacity i s already weak and this i s exacerbated by national economic difficulties that diminish institutional resources, including salaries for government employees, which are woefully low. Resolving institutional capacity and authority i s at the heart o f sustainable delivery o f rural water supplies and i s given close attention in the draft o f the Rural Water Sector Development Strategy.
19. Through the f i rs t projects, ADB covered 302 subprojects and World Bank, 200, serving over a million people. By the end o f the ADB project, at least another 98 villages are expected to have water supplies in place-about 31 percent o f people wi l l be served (ranging between 69 percent served in Naryn to about 15 percent in Chui).
Table 4: Progress made as of December 2007 under the World Bank and ADB Projects Oblast Population Assumed Current Remaining Percentage
currently cost ($ to be sewed
("/.I sewed million) sewed
('000) ('000) ('000)
Batken 3 12.6 133.4 8.03 179.2 42.7
Jalalabad 730.9 196.4 8.04 534.6 26.9
Issyk Kul 302.1 117.7 6.08 190.0 39.0
Naryn 208.0 133.1 7.77 81.1 64.0
Osh 945.5 252.9 11.40 692.6 26.7
Talas 166.4 83.6 3.06 88.9 50.2
Chui 588.4 86.2 5.23 502.2 14.6
Total 3,253.9 1,003.3 $49.61 2,268.6 30.8%
22
Annex 2: Major Related Projects Financed by the Bank and/or other Agencies
KYRGYZ REPUBLIC: Second Rural Water Supply & Sanitation Project
Rural Water Supplv and Sanitation Project: Cr. 3579-KG, SDR 12.0 million, (US$l5.0 million), approved 12/04/200 1 , effective 04/26/2002, closed.
The project focuses on villages in the Issyk-Kul, Naryn and Talas oblasts and seeks to (a) improve access to potable water from water supply systems which the communities own, operate maintain and manage in a sustainable manner; and (b) improve hygiene, sanitation and water- related practices at individual, family and institutional levels in the rural areas.
The project was implemented by the Department o f Rural Water Supply o f the Ministry o f Agriculture and Water Resources. Current ISR rating for D O i s S.
Village Investment Proiect (VIP): Gr. H-0700; SDR 10.5 mill ion (US$15.1 million); approved 12/16/2003, effective 03/04/2004, closed
The project objective was to contribute to the alleviation o f rural poverty by (a) improving governance and capacity at the local level; (b) strengthening the provision of, and access to, essential infrastructure services; and (c) supporting private small-scale group enterprise development.
The project was implemented by ARIS. Current ISR rating for D O i s HS.
Second Village Investment Pro-iect (VIP 11): Gr. H-2500; SDR 10.1 million (US$15.0 million); approved 08/03/2006, effective 12/05/2006, implementation ongoing
The project aims to alleviate rural poverty by empowering communities to improve access to social and economic infrastructure services, and employment opportunities through capacity building and community empowerment, and training.
The project i s implemented by ARIS. Current ISR rating for D O i s S.
Small Towns Infrastructure and Capacity Building Project (STICBP): Cr. 401 6-KG/Gr.H139- KG; SDR 10.3 million (US$15.0 million), approved 12/14/2004, effective 02/05/2005, implementation ongoing.
The project development objective i s to improve the availability, quality, and efficiency o f local infrastructure services for the population o f 23 small towns.
The project i s implemented by ARIS. Current ISR rating i s S.
Land and Real Estate Registration Proiect: Cr. 3370-KG; SDR 7.1 million (US$9.4 million); approved 06/06,2000, effective 09/14/ 2000, ongoing
The project development objective i s to support development o f markets for land and real estate and the more intensive and effective use o f land and real estate by introducing a reliable and well-functioning system for registration o f rights in immovable property.
The project i s implemented by the State Registration Agency (GOSREGISTER). Current ISR rating for DO i s HS.
23
Annex 3: Results Framework and Monitoring
KYRGYZ REPUBLIC: Second Rura l Water Supply & Sanitation Project
*Percentage of people reporting using soap for washing hands after using the toilet.
*Percentage of people reporting using soap for washing hands before handling foodwashing children's hands.
PDO
*To verify that hygiene practices improve in the participating villages.
*Based on the verified outcomes, take appropriate corrective measures.
0 Provide improved access to potable water to the participating communities.
Improve hygiene, sanitation and water- related practices at individual, family and institutional levels in participating communities.
@Improved capacity among national and
*Percentage o f people with access to drinking water in the network (for at least 4 days a week / I 2 hrs a day) as a result of the project.
Percentage of households reporting distance to the nearest improved water source at 500/1000 meters or less.
0 Level o f Operation and Maintenance cost recovery in utilities targeted by the project (percent)
Proxy indicators for improved hygiene , sanitation and water related practices:
*Percentage of SES water quality tests that meet national standards for drinking water .
*Rate of incidence of Water Supply & Sanitationzrelated illnesses (giardia andor hepatitis A ) in communities that DarticiDate in the Droiect.
*Number of DRWS' personnel trained in Provide support to the
L "
Results Indicators Use of Results Monitoring
Component A: Water Supply and Sanitation Infrastructure and Equipment
*Increased access to improved water *Number of water supply schemes
*Number of pilot sanitation facilities in 0 Improved sanitation at schools and public buildings implemented by the
supply services in participating implemented by the project. communities.
medical posts in participating project. communities. *Number of equipment procured for
operation and maintenance o f the schemes.
Component B: Sanitation and Hygiene Promotion Program
Improved hygiene and sanitation practices.
Component C: Institutional Development
Use of Outcome Information
*Ascertain that project i s on track to achieving development objective.
*To verify satisfactory progress in improving water supply services in participating villages.
*Based on the verified outcomes, take appropriate corrective measures.
Number of village-campaigns on hygiene and sanitation carried out by the project.
*To verify satisfactory progress in improving hygiene and sanitation services in participating villages.
local governments and communities to develop and maintain their WSS services in participating communities.
0 Improved management capacity in the WSS sector.
*Increased clarity o f roles and responsibilities in the WSS sector.
management and planning for rural water supply and sanitation.
*Number o f CDWUUs trained in fee collection and management o f the water and sanitation schemes.
*Number o f CDWUUs service agreements signed
*Number o f CDWUUs with sufficient revenues (from fees collection and other sources) to cover at least O&M.
*Number o f villages for which information on water supply and sanitation i s included in the national database.
Government in strengthening the WSS sector.
To ensure that local government and stakeholders are consulted and involved in the operation and maintenance o f WSS systems.
*To assess the local financial sustainability o f the schemes.
*To assess that the national WSS database i s populated and updated.
25
-rr 2 2 2 T tt-
f o o m W W W
g 00
d W
m VI
g m
g VI
g 3
a\ VI
-
m VI
-
3 z 3 z
C .e
Arrangements for results monitoring
Introduction
1. The project wi l l build on monitoring and evaluation (M&E) practices developed under RWSSP, which combined the work o f the M&E specialists in PMU and PMC that enabled M&E o f the project and the CDWUUs. RWSSP-2 will work closely on M&E issues with the ADB-financed rural water project, which shares the same development objectives and implementation PMU.
M&E Components
2. following main processes:
Project monitoring and evaluation requires identifying outcomes arising from the
Rehabilitation o f some 70 CDWUU-managed water supply systems and subsequent benefits arising from the rehabilitation works; Introduction o f revised maintenance identification, planning, and costing procedures, leading to CDWUUs setting higher levels o f water supply service fees to ensure that systems are sustainable. These procedures are to be introduced on all rehabilitated systems, irrespective o f IDA or ADB funding source for rehabilitation work. About 70 rehabilitated CDWUU systems are anticipated by the end o f the project.
Organization of Monitoring and Evaluation
3. The P M U M&E team will work on both ADB- and WB-financed projects with a substantial degree o f integration o f the data collection, processing, and analysis between the two projects, which should be unproblematic because both projects are under the overall management o f PMU and DRWS.
4. I t i s anticipated that the RWSSP team will transfer to RWSSP-2, thereby avoiding complications normally associated with project start-up. The lead M&E specialist wi l l be supported by a junior M&E specialist. The M&E team will coordinate and collate monitoring information generated by management and operational staff on project physical performance and progress, from which most results-based monitoring information will be drawn. Results-based monitoring wi l l also include an annual one- page questionnaire for CDWUU members related to service delivery by the CDWUU management. This survey will be carried out by rayon DRWS staff.
5. The RWSSP-2 project intends to expand beneficiaries’ role in the monitoring and evaluation process. This will be achieved in schemes where rehabilitation i s to be carried out, by project oblast CDWUU support group (OSG) working with CDWUU management, to identify indicators and collect data for measurement o f project impacts. Together with the OSG staff, the CDWUU management will monitor agreed indicators at
27
identified locations in the C D W U U to measure the impact o f project interventions, and feed this information back to water users through the Representative/General Assembly.
6. The M&E team will oversee development and implementation o f survey project instruments including internal performance monitoring, C D WUU performance monitoring, C D W U U monitoring surveys, special studies, and the management and coordination o f al l monitoring and evaluation activities, including the work o f external consultants, for example on impact studies. The M&E team will also liaise closely with PMU project engineers on planning project activities. Internal monitoring activities will rationalize, coordinate, and compile summaries and further analyze progress reports from each project component coordinator.
Data collection, Analysis, and Use of Information
7. M&E data will be drawn from internal project documents and records, available secondary data sources, and custom-designed surveys and studies, using interviews and participatory techniques. The main instruments will include internal monitoring by CDWUUs, C D W U U survey, and baseline surveys and impact evaluation.
8. Internal monitoring by CDWUUs. As discussed above, the M&E team will ensure that the C D W U U Oblast Support Group works with C D W U U management to accurately identify baseline water access prior to rehabilitation.
9. CDWUSurvey. RWSSP (though PMC) carried out regular surveys o f CDWUUs to monitor their performance in detail. These surveys have been valuable in enabling the DRWS and the RWSSP to monitor and report on the CDWUUs performance. Under RWSSP-2 these procedures will be further developed so that data can be used to identify less wel l performing CDWUUs, so the C D W U U OSGs can provide further strengthening and better target their interventions.
10. Baseline Surveys and Impact Evaluation. Prior to any rehabilitation work agreement with an identified CDWUU-managed system, the project will prepare a report on the existing situation, including a description o f work to be carried out. A mid- implementation impact study is proposed at RWSSP-2, which will use baseline studies detailed above, household surveys, and interviews with key stakeholders, and incorporate lessons learned from the RWSSP final impact survey.
11. Good M&E capacity f rom RWSSP will transfer to RWSSP-2; underdeveloped M&E capacity within the CDWUUs will be strengthened under RWSSP-2.
28
Annex 4: Detailed Project Description
KYRGYZ REPUBLIC: Second Rural Water Supply & Sanitation Project
1. The project objectives are: (i) to improve access to potable water to the participating communities; and (ii) to improve hygiene, sanitation and water-related practices at individual, family and institutional levels in the rural areas. The outcomes o f RWSSP-2 will be improved access, quantity, and quality o f water supply services available to rural citizens o f the Kyrgyz Republic. Specifically, the project performance will be assessed against criteria such as the following: (a) increase in number o f residents benefiting from regular availability o f safe potable water and (b) a decline in waterborne disease in project communities.
2. This objective will be achieved through implementation o f the fol lowing four components:
0
0
0 Component C: Institutional Development a Component D: Project Management
Component A: Water Supply and Sanitation Infrastructure and Equipment Component B: Sanitation and Hygiene Promotion Program
3. US$15.25 million; o f which IDA financing US$8.57 million)
Component A: Water Supply Infrastructure and Equipment (estimated cost
This component will rehabilitate and expand water supply systems serving approximately 100,000 villagers in the oblasts o f Issyk-Kul, Naryn, Talas, and Chui, who will receive improved water supply and sanitation. The DRWS and C D W U U staff will benefit from project capacity building. Around 70 subprojects will be implemented with RWSSP-2 financing, a reduced proportion compared to the number o f subprojects under RWSSP, because second-phase schemes will be designed to accommodate community demand for household connections (see lessons learned from RWSSP). Although each household will be responsible for network connection costs, the system will be designed to provide sufficient discharge and pressure to allow normal functioning under peak demand.
Preparation o f detailed designs and bidding documents (US$0.43 million) will be outsourced to national engineering firms. Most design work is expected to take place during the first 18 months o f project implementation.
Technical supervision o f construction activities to ensure the quality o f infrastructure financed by the project (US$0.98 million), including the certification o f completed subprojects, will be the responsibility o f a firm with mix o f international and local experience that will report directly to the PMU, to ensure greater transparency o f the implementation. The supervision team will comprise international engineers based in Bishkek, and local engineers who would receive on-the-job training to build capacity in supervision o f rural water supply projects.
29
Component objectives will be achieved by implementing the following activities: (i) Rehabilitate and expand existing village water supply systems and improve
sanitation. This subcomponent will refurbish or construct demonstration sanitation facilities at schools and medical posts. Supply equipment to selected CDWUUs and/or their associations to maintain the water systems (US$ 0.98 million).
(ii)
4. component cost US$0.68 million; o f which IDA financing US$O.OO million)
Component B: Sanitation and Hygiene Promotion Program (estimated
This component will support healthy hygiene and sanitation practices in the communities through extensive technical assistance for village-level hygiene promotion and promotion o f sanitary latrine construction in rural homes. Activities under this component will be coordinated with the Republican Centre for Health Promotion (RCHP) that i s working under the Health and Social Protection Sector-Wide Approach project (SWAP; P084977) to foster health awareness throughout the country.
Refurbishment and construction o f demonstration sanitation- facilities at schools and medical posts are to be implemented under civil works subcomponent o f component A.
RWSSP-2 will aim to integrate this component with ongoing national programs to build on successful approaches and maximize resource use. Specifically, the following activities will be implemented under the hygiene and sanitation component in direct coordination with the Republican Centre o f Health Promotion's (RCHP) national program:
(i) Core operational activities o f Village Health Committees (VHCs), rayon-level VHC federations, and support for them by rayon Health Promotion Units in the oblasts where RWSSP-2 wi l l be supported;
(ii) Technical assistance to strengthen coordination and mutual support among CDWUUs and VHCs to promote sanitary latrine construction, and develop and operationalize effective strategies to manage school sanitation facilities.
5. ComDonent C: Institutional Development (estimated component cost US$0.49 mill ion o f which IDA financing US$0.20 million)
This component aims to ensure RWSSP sustainability, including RWSSP activities and the ADB-financed project. The following consultancy services to assist Government wi l l be financed under the component. (i) Support endorsement and implementation o f the sector strategy, taking into
account that DRWS i s now housed within NALSG; this subcomponent wi l l finance consultancy services to help the NALSG develop legislation and systems to implement i t s new mandate; Help develop new legislation and revise existing legislation to ensure synergies among CDWUUs and local self-governance, including develop and institutionalize new agreements between Ayil Okmotu and CDWUUs. The
(ii)
30
(iii)
(iv)
No.
component will help establish linkages between the NALSG (including rayon level), the Ay i l Okmotus and CDWUUs, including legislative work and organizational development assistance toward longer-term technical and financial sustainability; Finance training and other assistance to CDWUUs and other stakeholders, building on the experience and tools developed by RWSSP. This sub-component will finance procurement training for CDWUUs and DRWS staff, plus technical and other advisory support for project design and implementation supervision; and Strengthen project Management Information System, by adding a GIS interface and consolidating a country-wide database on village-level water supply and sanitation. All stakeholders agree that reliable and updated information i s needed to make decisions, estimate costs, and shape water supply policies. The RWSSP-2 will support creation o f a country-wide village database, which will form part o f the project MIS system, and provide a stand-alone information bank to be operated in full coordination with DRWS. This database should be a “living” tool, constantly updated, with capacity to add urban water supply information. The GIS interface will facilitate database consultation and visualization to ease RWSS planning and policy making.
Preliminary estimate WSS) Scope of works Oblast
6. Component D: Proiect Management (estimated component cost US$1,95million, o f which IDA financing US$O. 17 million.
The component will finance the following subcomponents: (i) Limited acquisition o f equipment and vehicles for operations and maintenance o f
implemented subprojects, which will be donated to the CDWUUs and CDWUUs networks to perform routine and extraordinary maintenance on the water schemes in the expectation that this will foster networking among CDWUUs and support sustainable and affordable maintenance for the sub-projects. PMU staff salaries, including mandatory employer contributions, and training associated with RWSSP 2implementation. Community mobilization prior to and during sub-project implementation. Monitoring and evaluation activities, including regular impact surveys/assessments and annual audits Operating costs associated with project activities.
(ii)
(iii) (iv)
(v)
7. First-Year-Investment-Program for Component A o f a total cost estimated at US$ 1,465,000 has been identified and engineering studies and tender documents prepared with funding from project Preparation Advance (PPA) Q6250-KG.
I I 1st Year Investment Program
I I Civil Works I I I
31
The CDWUU i s registered. Works w i l l include: (i) rehabilitation at the water intake - construction o f a new borehole and a 150 m3 reservoir; the construction o f a pumping station with disinfection plant; construction o f a sentry box, toilet and sanitary protection zone. (ii) Rehabilitation o f existing distribution network (6 000 m) and i ts extension (3 800 m).
1 Y Ssyk-Kul Baltabay 119,000
The CDWUU i s registered. Works include: (i) rehabilitation o f the water intake - construction o f a new borehole and a 150 m3 reservoir, construction o f a pumping station with disinfection plant, .sentry box, toilet, and rehabilitation o f sanitary protection zone. (ii) Rehabilitation o f transmission main (1200 m), distribution network (5 400 m) and extension (7 100 m l
2 Y Ssyk-Kul Jele-Dobo 128,000
The CDWUU i s registered. The works w i l l include: (i) rehabilitation o f the water intake - excavation o f a new borehole, construction o f a 200 m3 reservoir, construction o f a pumping facility and disinfection plant, sentry box and toilet and rehabilitation o f sanitary protection zone. (ii) Construction o f a transmission l i ne (1 50m), rehabilitation o f the distribution network (2 300m) and i t s extension (5 700m).
3 Y Ssyk-Kul Ak-Kochkor 176,000
The CDWUU i s registered. Works w i l l include: (i) construction o f a new spring box with water collection manholes and transmission line to the reservoir; rehabilitation o f a 200m3 reservoir; construction o f a chlorination plant, sanitary protection zone, sentry box and toilet. (ii) Rehabilitation o f the transmission main (2 000m) distribution network (3 000 m) and i ts extension (1 200 m).
The CDWUU i s registered. Works w i l l include: (i) at the intake - construction o f a new spring box with water collection manholes and transmission line to the reservoir. The 300 m3 reservoir requires rehabilitation; construction o f a chlorination plant, sanitary protection zone, sentry box and toilet. (ii) Rehabilitation o f the transmission main (1 500 m), distribution network (12 000 m) and i ts extension (3 600 m).
4 Yssyk-Kul Koochu 226,000
Uch-Emchek 5 Talas 28 1.000
The CDWUU i s registered. Works w i l l include: (i) at the intake, construction of a new borehole, a 200 m3 reservoir, construction o f a pumping station wi th disinfection plant, a sentry box, a toilet and a sanitary protection zone. (ii) Rehabilitation o f the distribution network (5 500m) and i ts extension (2 000 m).
6 Tugol-Sai 170,000
32
Total
Korumdu
Temir, Kashat
Chelpek
243,000
95,000
27,000
1,465,000
Works w i l l include: (i) Rehabilitation o f the borehole and underground chamber, construction o f a pumping station and sentry box; installation o f transformer and wiring; construction o f a 300 m3 reservoir, sentry box and toilet; construction o f a chlorination plant, enclosure o f sanitary protection zone. (ii) Rehabilitation o f distribution network and i ts extension. Works were already undertaken under Phase 1 o f project but stopped due to shortage o f funds. Rectification o f defects at water intake and distribution network. Works were already performed under Phase 1 o f project. Rehabilitation o f filtration chambers for intake. Works were already undertaken under Phase 1 o f project but stopped due to shortage o f funds.
33
Annex 5: Project Costs
KYRGYZ REPUBLIC: Second Rural Water Supply & Sanitation Project
Totals may not add up due to rounding Local Foreign Total Project Cost by Component andlor Activity US $ million US$ million US$ million
Component A: Water Supply Inftastructpre and Eguipment 11.95 0.72 12 67
Component B: Sanitation and Hygiene Promotion 0.56 0.00 0 56
Component C: Institutional Development 0.36 OM 0.40
Component D: Project ManageFnt 1.44 0 16 1 60
14.31 0 92 15 23
Pnce Contlngencies 200 0.14 2 14
TotalBas@inz Cost ~ _ _ I_
Physical Contingencies ~ 0.94 " 0.06- 100
_ I I
Total Project Cost 17.25 1.12 18.37 Interest during Construction
F ron tad Fee Total financing Required, 17.25 1.12 18.37
Based on RWSSP experience and international market volatility, physical contingencies are set at 7.0 percent and price contingencies, 12 percent.
Identifiable taxes and duties are US$ 2.2 million, and total project cost, net o f taxes, is US$16.2 million. Therefore, the share o f project cost net o f taxes is 88 percent. The 12 percent applicable tax rate has been discussed with the Ministry o f Finance o f the Kyrgyz Republic. Unlike RWSSP, Government will provide no tax exemption for project activities; Government will provide i t s contribution in cash.
34
3 vie 0
" a 3 -
$ ' 8 0 1 0 I
I -
I
0 E: 0 m ch
vi I- m s
I " I _ , . _ " )
i 0 f-4
I 3 v m
W
W m
0 0
v i m v!v!
Year 1 Year 2 Year 3 Year 4 j ~ o t a ~
Component A: Water Supply Infrastructure and Equipment -3.52 3.99 3.87 3.87 A 15.25 IComponent B: Sanitation and Hygiene Promotion 0.16 0.18 0.20 . 0.15 0.68 Component C: Institutional Development 0.10 0.15 0.10 0.15 0.49
$Component D: Project Management 0.63 0.47 0.38 0.47 1.95
1 Project Cost by Component and/or Activity US $ million
8
TotalCostbyyear 4.41 4.79 4.54 4.63 18.37 Totals may not add up due to rounding ' Cost including contingencies
36
Annex 6: Implementation Arrangements KYRGYZ REPUBLIC: Second Rural Water Supply & Sanitation Project
-
The project will be implemented by a joint PMU that ensures donor efforts are aligned and harmonized. A Coordination Council, established by Government and consisting of relevant Government ministries and agencies, donors, and civil society representatives will ensure a coordinated approach to implementing projects in the sector; including RWSSP-2.
Project Management Unit Ayil Okmotu I _ _ I I I
P M U ) CDWUUs
Second Rural Water Supply & Sanitation Project Implementation Chart ""1
t Construction Manager (Intl Firm)
\ \
National Agency of Local Self-Governance Affairs
(NALSG) and its Department of Rural Water
Supply (DRWS)
-
\
Civil Works Contractors
(Component A)
I I
Consultants - __ (Component C)
/ Project Implementation Team
The PMU will assume overall responsibility for project daily implementation and activities coordination; it i s envisaged as a temporary government body, structured to increase DRWSNALSG capacity to assume future work. The PMU will contract out al l design, supervision, construction, and community mobilization work with the DRWS/NALSG overseeing PMU work. Specific recommendations for strengthening PMU capacity were provided by the Financial Management and Procurement Capacity Assessments. Under the proposed RWSSP-2, greater management capacity i s needed (trained staff) within the PMU; in the longer term this capacity will be transferred to the DRWSNALSG. Other PMU
37
functions, pahicularly related to planning, procurement, and contract management, are expected to be implemented in close coordination with the Ayil Okmotu (AO), to build local capacity to perform limited supervision functions during subproject identification and implementation. Potentially, AOs may support communities with fknding from their annual budget in line with their new role in providing local services specified under the Law of the Kyrgyz Republic #99 “On Local Self-Government and Local State Administration,” May 29, 2008. Substantial local-level capacity building i s required and a proposal i s in place to introduce and train region-level engineers and oblast-level supervision engineers. Detailed descriptions of stakeholders’ roles will be defined in the Project Operations Manual.
Component A: Water Supply Infrastructure and Equipment
Selection process
1. Original criteria for subproject selection were developed in 2002 at the start of RWSSP, and improved during project implementation. Four basic criteria include: (a) need for water; (b) level of poverty; (c) village involvement; (d) technical and economic feasibility. These criteria are attached in the Operational Manual (OM).
Community Mobilization Arrangements
2. The WBDFID RWSSP relied on the DFID-financed Project Management Consultants (PMC) to carry out community mobilization in the northern oblasts, but the first ADB project hired individual consultants as regional-level PMU staff. RWSSP-2 will take on individual institutional consultants as PMU staff at the national and regional levels to carry out immediate and longer-term community mobilization, and retain flexibility to take on consultancy f i r m s or NGOs to assist when project workloads increase.
3. Early stages of social mobilization will be directly linked with hygiene and sanitation awareness campaigns, requiring close coordination among institutional development and hygienehanitation coordinators, in particular, for local-level project activities.
Preparation of Technical Final Designs
4. After completing the mobilization campaign, communities will submit expressions of interest confirming their intent to participate in the project and provide the 5.0 percent cash contribution. At this stage, final subproject designs will need to be developed by local design institutes. The 2-3 multi-year, unit-price contracts will be concluded with local design institutes and will include strong quality-control indicators.
5. The preparation of the final designs will include the following steps:
0 Collect data 0
0
0
6. The PMU, through i t s Community Mobilization component, will be responsible for ensuring that each community participates in reviewing and selecting options. In addition, the CDWUUs will be involved in ongoing monitoring of construction and expenditures; the scheme budget will be posted in the CDWUU office, where a chart will map expenditures against progress of works.
Develop preliminary design with at least two options, for community review Complete community review and select design option Develop final design and prepare cost estimates
38
7.
8.
9.
The Technical Council, established by the Ministry o f Agriculture for RWSSP and responsible for approving subproject design, will transform into an Advisory Council at DRWS to review project technical solutions and be responsible for interaction with the State Agency for Architecture and Construction (GAAS) and i t s design expertise department (UGE) and construction supervision tool (GASN). GAAS i s responsible for ensuring that al l national infrastructure construction conforms to established national standards. For water supply systems, the standards adopted have been inherited from the Soviet past or recently developed with Russian design institutes support. These standards call for a system design robust enough to resist seismic disturbances but unaffordable, with scant attention to cost-effectiveness, GAAS, through GASN, also evaluates contractors and maintains a roster o f qualified (andsunqualified) for construction works.
For most construction, GAAS requires review and clearance o f engineering designs and cost estimates, contractor selection, construction supervision, and final approval o f completed works-a multi-stage process that i s staff- and time- intensive and GAAS charges fees for documents and supervisory/inspection services. However, under Government Resolution #71, donor-financed projects are exempt from these fees.
Engineering designs for water supply systems were developed under RWSSP on parameters that would maximize equitable beneficiary coverage among villages, and households, within available financial resources.
Construction of Rural Water Schemes
10. Construction involves building or rehabilitating facilities and providing equipment and materials by private sector contractors. Communities will be involved in a l l stages o f the construction process. Bid amounts for most construction works are expected to be below the National Competitive Bidding (NCB) threshold, therefore, local contractors wil l be engaged to construct the water schemes. Goods or works will be procured under Bank N C B (National Competitive Bidding), MW (Minor Works) or N S (National Shopping) depending on the estimated amounts. The P M U will provide technical assistance to communities for construction supervision. However, major problems include lack o f capacity among contractors, poor construction quality, inadequate equipment, lack o f expertise and skills, and scant knowledge o f contractual liabilities. The PMU will provide additional training on contract management and good contractor performance will be recorded and considered in the selection process.
Construction Supervision
11. Weak capacity among the local construction industry and the widespread practice o f political interference means that high-caliber supervision i s essential to achieve quality construction and accurate works assessment. Close supervision o f each construction site wil l need to be carried out by a reputable firm selected for experience working in the local context, substantial international expertise, and experienced team members fluent in Russian and/or Kyrgyz. The consultancy firm, in line with conditions o f the contract between the CDWUU and the contractor, will act as Contract Manager on behalf o f the community. Responsible for the following tasks at each site:
0 Supervise construction 0
0
Approve any extensions to duration o f construction Approve al l requests for payment prepared by contractors
39
12. The Contract Manager will work closely with PMU oblast supervision engineers and during construction, will also ensure timely discussion and approval o f design changes with the design consultants. In addition to Contract Manager supervision, GASN must supervise any state construction, an additional quality-control measure that should be welcomed, except for the recognized weak capacity o f GASN territorial supervision engineers. Furthermore, the project i s exempt from fees for GASN supervision services as per Government resolution #71. Participating CDWUUs and Ayil Okmotu are expected to help the Contract Manager and PMU oblast engineers to carry out construction supervision and training will be provided by the PMU.
Component B: Sanitation and Hygiene Promotion Program
13. RWSSP-2 will be integrated to the extent possible with successful ongoing national programs to build on successful approaches and maximize effective use o f resources. Consulting services (to be provided by a national NGO or firm) will be contracted by the PMU to implement this component’s activities. The technical assistance described in Item 2 would be executed by a Hygiene and Sanitation Coordinator in the PMU, along with short-term consultant input for specific activities.
Component C: Institutional Development
14. The component will be implemented through various consultancy assignments to be contracted by PMU.
40
Annex 7: Financial Management and Disbursement Arrangements
KYRGYZ REPUBLIC: Second Rural Water Supply & Sanitation Project
Country level
(see text below) Weak project FM institutions
1. Background: In August 2008, RWSSP-2 financial management arrangements were assessed in conjunction with financial management supervision. The RWSSP P M U will also be responsible for RWSSP-2 financial management. This PMU implements Bank/DFID and ADB projects and some financial staff; in particular, the Financial Manager and Cashier work do not fully commit their time to Bank Project activities. During the 2001 RWSSP preparation, the PMU installed an accounting system based on the 1-C software for project accounting and reporting that became obsolete and lacked sufficient capacity to generate quality interim financial reports (IFRs) in the format required by the Bank, or reports required by the Ministry o f Finance. The obsolete version o f the 1-C software was required to be replaced by the latest version o f 1-C software, which can meet Bank requirements. The internal control system’s limitations noted during assessment included weak segregation o f duties, incomplete recording o f accounting transactions, lack o f FM-side monitoring, and inadequate back-up arrangements that lead to the loss o f data, among others shortcomings. The FM manual lacks templates for primary documents, and internal control procedures for reconciling bank statements against project bank account records and preparing required reports for government agencies and the Credit Agreement; the manual should be revised to include these.
H RWSSP-2 will be implemented by existing PMU, S currently implementing ADB and Bank-financed projects; the PMU will be strengthened by recruiting an experienced Disbursement Specialist to ensure that
2. Conclusion: Based on the assessment and past RWSSP supervision, the FM arrangements for the proposed Project, including systems for budgeting, accounting, financial reporting, auditing, and internal controls were found not fully satisfactory to the Bank. There was a need for replacement o f the FM system, including 1-C accounting software by new software that can generate Bank-required reports. The PMU has procured the new version o f 1-C accounting software that has functionality to produce WB required financial reports. The P M U has updated established internal control procedures, and the Financial Manager has been given full access to accounting software and closely monitors project FM arrangements. A time-bound action plan has been developed and agreed with the Borrower, for strengthening FM arrangements. The action plan was implemented that ensured satisfactory project financial management arrangements before Negotiations, except for FM manual update (as a part o f the POM) that wil l be done before the project effectiveness.
3. FM risks. Overall FM risk i s substantial before mitigation measures and moderate after. Although RWSSP-2 will be implemented in a perceived high-corruption context, adequate mitigation measures will ensure that residual risks remain acceptable to the Bank through close monitoring during supervision; any corruption incidents will be dealt with promptly, including notifying law enforcement agencies. Table 7.1 summarizes FM assessment and risk ratings.
Table 7.1: Financial Management Assessment and Risk Ratings
Risk Mitigating Measures I Residual I
41
Entity Level Risk o f political interference in entity’s management Project Level RWSSP-2 i s medium-sized; most activities implemented by
Risk lssessment
M
H
H regional support groups 0 VERA LL INHERENT RISK
Risk Mitigating Measures
satisfactory F M arrangements are in place
PMU structure will provide for independence o f the entity
Implementation arrangements are in place and will be monitored closely, including a centralized accounting system that allows PMU to closely monitor activities. Risk-based FM supervision, interim reports, and annual audits
CONTROL R I S K S Budget Accounting. The system installed for ongoing project i s not used optimally and does not generate financial reports
Internal Controls, including internal audit. Several weaknesses are highlighted in management letters; follow-up actions have been inadequate to address them. FundsJIow
Financial Reporting. Required interim reports for RWSSP have been submitted irregularly, late, and are of inadequate quality.
Auditing -.Performance of the auditor has been satisfactory. Audit reports have been qualified, detailing weaknesses in the Management Letter OVERALL CONTROL RISK
RESIDUAL RISK RATING Legend: H - High; S - Substanti
pending from the previous years has been
sses highlighted in the
s usually are disbursed on timely basis
ing software and will
; M- Moderate; L -Low
Residual Risk
S
S
L M
S
M
M
M
M
M
4. Country Issues: Capacity among accounting professionals in the country i s s t i l l low, professionally qualified accountants are scarce, and among public and private sector accountants knowledge i s l imited about internationally recognized accounting and auditing standards, such as IFRs, PSAs, ISA. Most project implementing entities use cash-basis accounting, which i s not in accordance with IFRs, but i s allowed under IPSAs, and in many cases, sufficient for accurate project accounting. Internal audit functions exist in a small but growing number o f institutions; and external audit i s practiced by individuals and a few audit f i rms. Typically, most audits required by international donors have been performed by the big four international audit firms that have staff members based in Almaty, Kazakhstan.
5. The Bank regularly assesses local audit firm capacity to audit Bank-financed projects and three f i rms in the Kyrgyz Republic are now eligible. Audit f i rms are required to be
42
licensed to conduct audits in the Kyrgyz Republic, which limits the number o f audit firms that may participate in tenders for auditing Bank-financed projects in the country. The Bank i s providing support to strengthen the capacity o f the supreme audit institution, the Chamber o f Accounts; it i s anticipated that the Bank will eventually rely more on audits conducted by the institution.
Weakness
Existing F M Manual does not fully reflect the F M aspects o f the proposed project.
6. Corruption i s widely acknowledged as a major issue in the public sector. In addition to the risk mitigation measures summarized above, the project will emphasize full disclosure, transparency, and strengthened complaint handling mechanisms for procurement activities.
Remedy/Action Responsibility BY Revise FM manual (as part PMU Management BY o f POM) to align with proposed project
Effectiveness
7. Implementation arrangements: The PMU will implement al l project activities. The PMU will comprise full-time dedicated staff, including a project manager and professional FM staff, and be responsible for ensuring that project activities are implemented according to the legal documents, procurement plan, and FM manual; reporting on project progress; and ensuring that procurement i s timely and in accordance with World Bank guidelines. The PMU will manage project funds, including the Designated Account; maintain accounts and have them audited on schedule; and promptly resolve issues raised by auditors. The PMU will ensure that project resources are managed to maximize economy, efficiency, and effectiveness, and that project funds are used only to achieve project objectives.
9. Staffing o f FM function: The PMU staff includes five FM specialists: accountantl disbursement specialists working full-time for IDA, cashier and financial manager working part-time for each IDA/DFID and ADB projects, and the PMU manager, who provides general FM oversight to ensure compliance with established procedures. The Financial Manager and disbursement specialist are familiar with the IDA procedures from their experience with other Bank-financed projects and have attended Bank-sponsored training in the region and abroad.
10. The PMU will retain current FM staff and recruit an experienced Senior Disbursement Specialist to strengthen the FM system. The Financial Manager will be responsible for overall project FM-maintaining project books and accounts; preparing and disseminating financial statements, including interim un-audited financial reports; and ensuring timely audit o f the project financial statements. The Financial Manager will have full access to the 1-C
43
accounting system, and be responsible for effective systems o f accounting and internal controls; ensuring adherence to established financial procedures; and safeguarding project resources and assets, with assistance from the Senior Disbursement Specialist.
11. Internal control systems and internal audit: The P M U will take further actions to improve generally weak internal controls, (with no proper segregation o f duties, lack o f regular reconciliation o f bank accounts, inadequate record-keeping, and no internal audit function). The P M U will update i ts 2004 Financial Management Manual that was prepared in 2004 and should be amended as it does not to fully reflect the FM aspects o f the proposed project. The revised version wil l specify accounting and internal control mechanisms to be followed for the PMU to apply and to the use o f project funds during the implementation. The manual will specify and describe key internal control mechanisms to be followed for the PMU to follow in use for use o f project funds, with specific focus on ensuring completeness o f accounting transactions and, reliability o f accounting data; safeguarding o f assets o f the projects, including safe custody o f cash; , fixed and other assets, proper monitoring o f contracts, ensuring appropriate payroll and budgeting procedures; proper authorization and documentation o f al l project expenditures; and fully accountability o f for project funds. The manual will reflect the project structure that allows for adequate segregation o f functions; defined job descriptions with different authority levels; as well as the f low o f funds to support project activities, such as proper managing the bank accounts, including regular reconciliations o f bank statements with project records; and bank account signing mandate that requires at least two signatures to withdraw cash from the bank. The manual wil l contain the project’s chart o f accounts; describe those procedures aimed for ensuring an effectiveness and reliability o f the 1 -C computerized accounting system, including back-up and recovery procedures. There wil l be regular financial reporting to ensure close monitoring o f project activities, as well as the f low o f funds to support project activities. Revised Financial Management Manual will be used by the PMU staff in the proper way.
12. Accounts and records: The P M U accounting system under the first project was based on outdated 1 -C accounting software for record-keeping and reporting that cannot generate required formats for financial reports required by the Ministry o f Finance and the Bank. All financial reports are prepared in Excel spreadsheets with adequate local back-up service arrangements, but FM staff does not regularly back up data on a relevant external data storage. Primary documents, such as contracts, invoices, supported by goods delivery notes and acts o f acceptance o f services, payment orders, etc., are used as source data for information entered in the 1-C system. The PMU will maintain project accounts and records using a project accounting system capable o f producing interim financial reports (IFRs) in formats agreed with IDA, using the version o f 1-C software used by other IDA-financed projects in the country and suitable to ensure accurate tracking o f resources and expenditures. All transactions will be recorded on a cash basis o f accounting, with supporting documentation accessible by auditors and staff from implementation support missions o f the World Bank. The project chart o f accounts wil l tracking project transactions and report by sources o f financing, project components, and type and category o f expenditures.
13. Interim un-audited financial reports. PMU Financial Monitoring Reports required under the ongoing project have been submitted irregularly, although they were reviewed and found satisfactory to the Bank. The PMU will be responsible for submission o f un-audited interim financial reports (IFRs) that incorporate financial information relating to the IDA Credit and Grant funds, generated by project 1 -C accounting system, based on formats agreed with IDA. The IFRs will include: (a) Project Sources and Uses o f Funds; (b) Uses o f Funds
44
by Project Activity, (c)Project Balance Sheet; (d) Designated Account Statements and e) SOE Withdrawal Schedule. The reports will be submitted to IDA within 45 days of the end of each quarter; the first reports under the RWSSP-2 will be submitted within 45 days after the end of the first full quarter following initial disbursement.
14. Planning and budgeting. The PMU i s responsible for preparing project annual budgets based on procurement plans and in line with the Project Implementation Plan. These budgets are the basis for allocating funds to project activities and for requesting government funds for counterpart contributions. Budgets will be prepared in accordance with the IFR format (disbursement categories, components and activities, and account codes, broken down by quarter). Annual Budgets will be agreed with IDA before they are submitted to the Ministry of Finance for final approval. Approved annual budgets will be programmed by quarters, entered into the accounting system, and used for periodic comparison with actual results as part of interim financial reporting.
15. External audits: The RWSSP has been audited regularly, the audit reports were submitted to IDA on time, and are of acceptable quality. However, the audit reports have had qualified opinions and for the past three years Management Letters have highlighted internal control and accountability weaknesses that have not yet been fully addressed by the PMU. Issues that caused qualification of the audit opinion have been brought forward from previous years but remain unresolved. PMU management must resolve these prior to negotiations.
16. The PMU will continue annual audits of project financial statements, performed by independent auditors acceptable to IDA, in accordance with International Standards on Auditing (ISA) and World Bank guidelines on auditing: Financial Management Practices in World Bank-Jinanced Investment Operations (November 2005) and other guidance that may be provided by IDA. Auditor TORs will be prepared by the PMU, cleared by IDA, and the tender will be announced for auditor engagement. TORs will include auditing of financial transactions for the IDA Credit and Grant, an assessment of the operation of the project accounting system, and a review of the internal control policies and procedures.
17. Annual audit reports will include an opinion on project financial statements, incorporating: a) Project Balance Sheet; b) Project Sources and Uses of Funds; c) Funds by Project Components; d) Designated Accounts Statements; e) SOE Withdrawal Schedule; f) Notes to the Financial Statements; g) Reconciliation Statements and a management letter. Audit reports will be submitted to IDA no later than six months after the end of the fiscal year to which they relate (i.e., June 30). Audits costs will be eligible for financing from the IDA Credit. The PMU will provide the auditor with full access to project-related documents, records, and information required for the audit.
18. Flow o f funds and disbursement arrangements: Proceeds of the IDA Credit and Grant will be disbursed over four years, or for such longer period as will be agreed with IDA. Credit and Grant funds will flow to the project via disbursements to the Designated Accounts (DA), opened and maintained by the PMU. The project will follow transaction-based, Le. traditional Bank disbursement procedures (Advance to the DAY documentation o f the Advance based on full documentation and Statements of Expenditure (SOEs), direct payments, reimbursements, and special commitments). Withdrawals from the Credit and Grant Accounts will be requested in accordance with the guidance in the Disbursement Letter. Withdrawal applications will be signed by two persons: (i) an authorized
45
representative of the Recipient (Ministry of Finance) and (ii) the PMU Manager or designate authorized by written delegated authority from the Ministry of Finance.
19. The PMU will be responsible for keeping all documentation supporting project expenses, especially those reported through SOEs, and for making them available to IDA supervision missions and the auditors.
Documentation:
20. Designated Account: To facilitate timely disbursements for eligible expenditures on works, goods and services, the Recipient will open and operate, under terms and conditions acceptable to IDA, two DAs in US dollars in a commercial bank acceptable to IDA. The PMU will be responsible for accounting for the funds deposited into this account, for reporting on the use of these funds, and for ensuring that they are included in the audits o f the financial statements. The PMU will also report on the status of this account through withdrawal applications submitted to IDA. The authorized ceilings of the DAs are US$270,000 for the IDA Grant and US$300,000 for the IDA Credit. The PMU will be responsible for submitting withdrawal applications on a monthly basis, and these applications will be supported by appropriate documentation, including detailed bank statements. Additional details are provided in the Disbursement Letter.
2 1. Documentation o f Expenditures: Full documentation will be submitted against contracts above, the following limits and Statement of Expenditures will be used against contracts below these limits, and against training, study tours, and operating costs:
0 works under contracts costing more than US$500,000 equivalent each; 0 goods under contracts costing more than US$lOO,OOO equivalent each; 0 consulting contracts with firms, costing more than US$lOO,OOO equivalent each; 0 consulting contracts with individuals, costing more than US$50,000 equivalent each;
Documentation in support of SOEs will be retained by the PMU for at least one year after IDA has received the audit report for the fiscal year in which the last withdrawal from the GranVCredit Account was made. Al l withdrawal applications for expenditures above SOE thresholds specified above will be supported by full documentation, Le., contracts, etc.
22. Direct payments. The Minimum Application Size for direct payments and for issuance of Special Commitments for the IDA Grant and the IDA Credit i s provided in the Disbursement Letter. Al l withdrawal applications for direct payment, or for issuance of special commitments, will be supported by full documentation.
23. into the project account opened in the local Treasury branch and managed by the PMU.
Project account: Any counterpart funds provided by the recipient will be deposited
24. Supervision plan: As part of its project supervision missions, ADB and Bank project teams make an effort to arrange joint FM supervision missions to share experience and jointly address cross-cutting issues in implementation. Teams will conduct risk-based FM supervisions, initially after six months and thereafter at appropriate intervals depending on the level of risk. Supervisions will pay particular attention to: (i) project accounting and internal control systems; (ii) budgeting and financial planning arrangements; (iii) review of the Un-audited Interim Financial Reports; (iv) review of audit reports, including financial statements, and remedial actions recommended in auditor Management Letters; (v) disbursement management and financial flows and counterpart funds, as applicable. F M
46
supervision wil l pay particular attention to any incidents o f corrupt practices involving project resources, including resources provided by the Recipient and other donors.
25. 7.2 below.
Proposed Credit and Grant amounts for financing disbursement categories i s in Table
Table 7.2: Proposed Disbursement Amounts per Category
I D A Financing by Category o f Expenditures (US% million)
Financing Percentage
(Including Taxes)
Amount ofthe Amount of the Credit Allocation Grant Allocation
Expenditure Category
(1) Goods under Part A and D of the Project 10,000 100%
(2) Works under Patt A o f the Project 5,s 00,000 1,600,000 8 o?h
(3) Consultant services including audits and training
100% for local expenditures and
1,560’000 90% for foreign expenditures
(4) Operational costs 1,180,000 100%
(5) PPF Refinancing 150,000 100%
Total 5,500,000 4,500,000
47
Annex 8: Procurement Arrangements KYRGYZ REPUBLIC: Second Rural Water Supply & Sanitation Project
A. General
1. Procurement for the proposed project would be carried out in accordance with World Bank “Guidelines: Procurement under IBRD Loans and IDA Credits” (dated May 2004, and revised October 2006); and “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” (dated May 2004, revised October 2006) and the provisions stipulated in the Financing Agreement. Items under different expenditure categories are described in general below. For each contract to be financed under the project, procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements, and time frame are discussed and agreed between the Implementing Agency and the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect actual project implementation needs and improvements in institutional capacity. A General Procurement Notice (GPN) will be published before the release of any bidding documents.
2. Procurement o f Works: Works to be procured under this project would include rehabilitation and expansion of existing village water supply systems and refurbishment of demonstration sanitation facilities at schools and medical posts. No ICB i s envisaged at the time of project appraisal. Procurement will use bidding documents agreed with or satisfactory to the Bank for al l NCB and Shopping packages.
3. Procurement of Goods: Goods to be procured under this project would include maintenance equipment for water supply systems for selected Community Drinking Water Users Unions (CDWUUs); and limited equipment and vehicles for project management. Procurement will be conducted using Bank SBD for all ICB packages or bidding documents agreed with or satisfactory to the Bank for al l Shopping packages.
4. Procurement of Non-consulting Services: Not envisaged at the time of appraisal.
5, Selection of Consultants: Consultant services required under the project would include: (i) design studies, development of bidding documents, and construction supervision; (ii) technical assistance for village-level hygiene promotion, promotion of sanitary latrine construction in rural homes; (iii) assistance to Government in ensuring sustainability of the rural water supply program, including support in refining the sector strategy for approval; developing new legislation and revising existing legislation to ensure linkage with local self- governance and trainings; (iv) monitoring and evaluation activities, including regular impact surveys/assessments; and (v) project management support and annual audits. Short lists of consultants for services estimated to cost less than US$lOO,OOO equivalent per contract may be composed entirely of national consultants in accordance with the provisions of paragraph 2.7 of the Consultant Guidelines.
6. The project will finance incremental operation costs incurred under the project. The PMU will prepare an annual budget for operation costs to be agreed with the Bank before implementation.
Operating Costs:
48
7. Training and Study Tours: The PMU will prepare annual training plans and submit them to the Bank for no-objection prior to implementation. Institutions for trainingstudy tours will be selected based on analyses of suitability, availability, duration, and affordability.
Establish a project coordination and implementation committee to work closely with the PMU, led by a Deputy Head o f Agency and comprising department heads and regional and local administration representatives.
Use existing PMU procurement capacity and hire international and national consultants to assist in project management, including procurement and contract management.
The PMU should prepare a simple detailed procurement manual (as a part o f the Project Operational Manual to be prepared by the time o f negotiations). The manual should include
B. Assessment of the Agency’s Capacity to Implement Procurement
Moderate
Substantial
8. The project will be implemented by the existing joint PMU under the Department of Rural Water Supply (DRWS) of the National Agency of Local Self-Governance Affairs (NALSG). The joint PMU i s now managing two ongoing investment operations financed by DFID/WB and ADB. The PMU has two procurement specialists with adequate knowledge and experience in handling procurement through NCB or Shopping, who will work as a team. International and national technical consultants will be hired to assist in procurement and project management (particularly for developing technical specifications, bid evaluation, and construction supervision).
9. In August 2008, a procurement specialist carried out a capacity assessment that reviewed project staff procurement capacity and PMU organizational structure. The report, which concluded that the two existing procurement specialists are adequate for project implementation, i s available in the project file.
C. Risk Mitigation, Governance and Anti-Corruption
10. Details are provided in the table below.
Overall project procurement risk i s rated as “moderate” after mitigation measures.
Risk Description
NALSGDRWS coordination and implementation capacity may be inadequate, including capacity to conduct procurement,
Procurement delays (including contract approval and signature procedure) would seriously affect timely project implementation.
Rating
High
High
~ ~ ~ _ _
Mitigation Measures Rating after
Mitigation
49
NALSGDRWS officials involved in project procurement through Tender Committees may be unfamiliar with World Bank procurement procedures.
Although the construction industry in Kyrgyz Republic i s improving, the many civil works contracts to be awarded within a short period may exceed industry capacity and the nature and value of civil works would be unlikely to attract international interest.
Perceived corruption levels in the country are s t i l l very high. According to the 2008 Transparency International Corruption Perception Index (CPr) , the Kyrgyz Republic has a rating of 1.8, at the very bottom o f the Central Asia Region and 166'h in the world.
High
High
High
NALSGDRWS should establish ad hoc tender commissions, that receive basic procurement training, using the services of the National Procurement Training Center (Bishkek).
The PMU should be proactive-arganize brief information seminars well in advance with civil works contractors, especially in project areas, to raise awareness about opportunities so contractors can prepare to tender.
The NALSG/DRWS to take the following steps to ensure that project proceeds are used economically and for the purposes intended:
Publish tender notices and contract award information in the national press, the public procurement bulletin, and the NALSG website in addition to publication required by Bank Procurement and Consultant Guidelines,
Prepare a note on ethical standards based on applicable legislation, for NALSG PMU staff and make hard copies o f this document available to al l departments and publish i t on the Website. NALSG may also consider organizing brief staff meetings to discuss and highlight ethical standards.
Require a signed statement from procurement staff and each member o f a tender committee that his or her involvement creates no conflict of interest. (Le,, relationship with suppliers or consultants, etc.)
Implement mechanisms to ensure that suppliers and contractors are paid according to the contract terms and without delay.
Alert the Bank promptly to every single complaint received from suppliers or consultants relating to procurement processes, and resolve complaints promptly.
Maintain up-to-date project records and make these available to Bank staff, auditors, etc.
3verall Procurement Risk Rating: 3: High; S: Substantial; M: Moderate; L : Low.
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Moderate
Moderate
Substantial
Moderate
D. Procurement Plan
1 2 3 4 5 6 7 Procure Domestic Review Expected
Methnd Q (vestno) (Priormost) Date '- Preference by Bank Bid-Opening Contract ment Ref.
No. (Description)
11. In January 2009, the P M U developed an initial procurement plan (PP) for the entire project implementation that was updated at negotiations; the PP will be updated annually or as required in agreement with the Bank team to reflect actual project implementation needs and improvements in institutional capacity. The PMU and the Bank Team agreed on this plan at negotiations and it i s available at the PMU office in Bishkek; later it will be available in the project database and on the Bank external Website.
8
Comments
E. Project Preparation Advance and Retroactive Financing
1
2
3
4
12. A Project Preparation Advance (PPA) for US$150,000 has been provided to fund ('jointly with US$60,000 Government budget) some project preparation activities. Eligible expenditures under several existing c iv i l works contracts awarded following the Bank procurement procedures under the first RWSSP will be financed from the proposed project (RWSSP-2) on a retroactive basis once the project i s approved and declared effective. Total retroactive financing will not exceed SDR542,OOO (US$800,000 equivalent or 8.0 percent o f the total IDA financing) and the cut-off date i s M a y 31,2008.
Office Furniture S H No No Post April 28, 2009
Office Equipment S H No No Prior April 28, Agreed 2009 First SH
(goods) for prior
review Vehicles ICB No No Prior May 07,
Purchase of software $H N o No Post Jan 12,2009 IC
2009
F. Frequency of Procurement Supervision
13. In addition to the prior reviews to be carried out from the Bank offices, the Bank procurement staff will j o in regular supervision missions to review procurement progress and address any procurement issues. Furthermore, ex-post review o f procurement actions will be conducted during supervision missions or at least once a year to cover not less than 20 percent o f the contracts that are not subject to prior review. The Bank supervision missions should also cover physical inspections o f goods and c iv i l works. At least 10 percent o f contracts will be physically inspected during supervision missions.
G. Details of the Procurement Arrangements
(1) Goods, Works, and Non Consulting Services
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Works 5
6
7
8
9
10
11
12
13
(c) For Works, al l ICB contracts (if any), the first two NCB contracts (regardless o f value), the first Shopping contract, and all direct contracting contracts (if any) will be subject to Bank prior review.
Rehabilitation o f rural NCB No No Prior June 0 1, First NCB water supply system 2009 in Ak-Kochkor v. Rehabilitation o f rural NCB No No Prior June 01, First NCB water supply system 2009 in Jele-Dobo v. Rehabilitation o f rural NCB No No Post June 16, water supply system 2009 in Baltabai v. Rehabilitation of rural NCB No N o Post June 16, water supply system 2009 in Koochu v. Rehabilitation o f rural NCB No No Prior June 16, First SH water supply system 2009 (works) in Chelpek v. Rehabilitation o f rural NCB No N o Post July 06, 2009 water supply system in Uch-Emchek v. Rehabilitation of rural S H No No Post July 06,2009 water supply system in Tugol-Sai v. Rehabilitation o f rural SH No No Post July 06, 2009 water supply system in Temir, Kashat v. Rehabilitation ofrural NCB No No Post July 20, 2009 water supply system in Korumdu v.
(2) Consulting Services
Ref. No.
(a) L i s t o f consulting assignments during the initial project implementation period (2009):
Review Expected Description of Assignment Selection by Bank Proposals 1 Comments 1 I Method 1 fPriorl 1 Submission
52
(b) Consultancy services estimated to cost above US$lOO,OOO for firms, and US$50,000 for individuals, per contract, and al l single-source consultant selection and all TORS (regardless o f value), wil l be subject to Bank prior review.
(c) Shortlists composed entirely o f national consultants: Shortlists o f consultants for services estimated to cost less than US$lOO,OOO equivalent per contract may be composed entirely o f national consultants in accordance with provisions o f paragraph 2.7 o f the Consultant Guidelines.
H. Thresholds for Procurement Methods and Bank Prior Review
Procurement Method
Notes: a/ Shortlist may compose entirely o f national consultants for assignments o f less than US$lOO,OOO equivalent per contract.
bl As appropriate, these methods may be adopted for assignments costing less than $200,000.
ICB - International Competitive Bidding NCB -National Competitive Bidding SH - Shopping DC - Direct Contracting QCBS - Quality and Cost Based Selection QBS - Quality Based Selection LCS - Least Cost Selection FBS - Fixed Budget Selection CQS - Selection Based on Consultants’ Qualifications SSS - Single-Source Selection (for firms), or Sole-Source Selection (for individuals) IC - Individual Consultants
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Annex 9: Economic and Financial Analysis KYRGYZ REPUBLIC: Second Rural Water Supply & Sanitation Project
Item Share o f standpipe system investment costs Share o f borehole with hand-pump system
Estimated average per capita cost o f
Estimated average per capita cost o f
investment costs
investment for standpipe system
investment for bore-hole with hand-pump svstem
The project will invest in rural water facilities servicing around 100,000 beneficiaries in rural communities. Government will provide 20 percent counterpart financing o f the project, consisting o f 5.0 percent cash contribution from the participating communities and 15 percent from the state budget. To ensure equitable distribution o f project resources and promote construction o f affordable and sustainable water schemes, a per capita investment ceiling approach i s used-for a subproject, US$lOO for the first year o f implementation, adjusted annually. The per capita ceiling i s based on the size o f the village to account for higher construction costs in smaller villages.
Value 80% 20%
US$80
US$ 100
Project economic and financial analysis i s based on key assumptions below:
cost for standpipe system Estimated average annual per capita O&M
Table 1 : Key assumptions underlying economic and financial analysis
US$ 1.3
Estimated average water collection time ‘without project’ Estimated average water collection time
I Estimated average annual per capita O&M I US$ 1.4 I
1.1 hour
0.3 hour ‘with project’ Average daily cost o f in-hospital treatment
I cost for bore-hole with hand-PumP-svstem I I
US$24
project ’ Discount rate 12%
The project economic and financial analysis was conducted for a 10-year period since the mechanical parts o f the standpipe systems and the hand pumps are expected to have 10-year economic life, based on assumptions that water consumption from all pre-project sources i s replaced post-project with consumption from rehabilitated or constructed water systems.
Economic analysis: Since the distribution o f capital investments among subprojects using various water supply systems i s unknown in advance, the project economic analysis was done
54
for two types o f water supply systems, a borehole with hand-pump and a standpipe system. The total project investment cost was assumed to be divided between 80 percent network with stand posts and 20 percent borehole with hand pump. The main project economic benefits are the economic value o f time savings, savings from reduced purchases o f potable water from other sources (e.g., water vendors), reduced health sector expenditures, reduced individual expenditures on treatment o f water-related infectious diseases, and economic value o f recovering person days that were lost due to water-related infectious diseases. The main economic costs are the investment and O&M costs.
The economic value o f the time savings under the project was assessed using per capita GDP in the country. The valuation o f time savings also includes the value o f leisure time assumed to equal per capita GDP. When estimating time savings, use o f per capita GDP instead o f formal minimum salary i s more justified since the earnings from low-skilled labor are l ikely to be above the officially stipulated minimum salary level and project beneficiaries are l ikely to have non-salary income from other sources.
The economic benefit o f reduced cost o f potable water was assessed as the difference between costs o f potable water available from stand-pipes and borehole water supply systems and the average cost o f potable water from other sources (e.g., water vendors).
The healthcare-related economic benefits o f the project were estimated by assessing the costs and benefits related to infectious diarrhea since waterborne diseases account for the greatest proportion o f the water supply-related disease burden. Infectious diarrhea includes several types o f intestinal infections; the assessment o f the healthcare costs and benefits o f this project was based only on types o f infectious diarrhea for which data were available (cholera, salmonellas, shigellosis, lambliasis, and amoebiasis). The incidence o f infectious diarrhea ‘with project’ scenario was estimated using relative risk tables o f different exposure scenarios elaborated by WHO researchers. The baseline for infectious diarrhea disease incidence among potential project beneficiaries was established assuming that al l reported cases o f infectious disease diarrhea occur among communities lacking organized water service.
The water supply and sanitation practices improvements under the project will yield direct and indirect health benefits. Direct healthcare benefits include reduced health sector expenditures measured as daily per capita in-hospital treatment costs and reduced personal expenditures on treatment o f infectious diarrhea diseases. Some direct health sector costs, such as fewer visits o f medical personnel to out-patients, were not quantified in this analysis due to lack o f reliable data.
Indirect healthcare benefits o f the project include the economic value o f recovered person days that were formerly lost to infectious diarrheal disease. The economic costs o f lost person days include time parents spend caring for sick children. Some indirect economic benefits, such as transportation and other costs associated with hospital visits, are not quantified in this analysis due to lack o f reliable data.
The project economic analysis yielded an economic NPV o f US$12.9 mi l l ion and an ERR o f 32 percent. Since a standpipe water supply system i s economically more viable, the increase in the share o f investments in the standpipe system will increase the project overall EIRR. In particular, if investments in the standpipe system increase to 85 percent o f the total (from the base case assumption o f 80 percent); then the project economic NPV will be US$13.1 mil l ion
55
and EIRR, 32 percent. If the project finances only standpipe water supply subprojects, the project will yield an economic NPV o f US$14.5 million and an EIRR of 35 percent.
Sensitivity Analysis: The sensitivity analysis determines the impact of uncertainty or variation in key parameters o f interest on the project economic appraisal. Investment cost i s the key parameter that may significantly affect project economic viability. The impact o f defined variation in this parameter i s presented in the following table.
Financial Analysis: Financial analysis was conducted for two types o f water supply technologies: a borehole with hand-pump and standpipe system.
Unlike economic analysis, financial analysis relies on market prices to assess costs and benefits and incorporates the impact o f taxes. The main financial benefits of the borehole with hand-pump and standpipe water supply systems are time savings, potable water cost savings, reduced individual healthcare costs, and financial value of reduced lost person days. The main financial costs are investment costs to rehabilitate and/or construct a new supply system, and the O&M costs. Financial analysis yielded an FIRR o f 22 percent for the borehole water system, and 30 percent for the standpipe water system; the major difference i s investment costs.
The key parameter that may significantly affect the financial viability o f a borehole with hand-pump and standpipe water supply systems, i s investment costs. The impact o f defined variation in this parameter i s presented in the following table.
56
I I I I I I I I I
~ m
C)
l- cc SI CI cc
vi 1 W
N -- E - CI
In d N
I m N -
2 N
\o 0 N -
e 2
m t;
m 3
rn * N
\5 c N -
t 51:
c: s -
c: I- r
Annex 10: Safeguard Policy Issues
KYRGYZ REPUBLIC: Second Rural Water Supply & Sanitation Project
A EMF - Overview
1. The Environmental Management Framework (EMF) will form the section o f the Operations Manual that defines environmental safeguards responsibilities and procedures that DRWSPMU will apply to subprojects considered for support under this project. The procedures will meet regulatory requirements for environmental assessment (EA) o f the Kyrgyz Republic and the EA safeguard policy requirements o f the World Bank.
B Environmental Assessment (EA)
B.l. General
2. Under Kyrgyz law, all RWSSP-2 subprojects wi l l be subject to review by the Kyrgyz State Agency for Environment Protection and Forestry. NALSGPMU wi l l be responsible for observing Kyrgyz ecological legislation. According to World Bank policies and environmental assessment, RWSSP-2 subprojects are classified as Category (B) since the anticipated impacts o f subprojects to be implemented are not significant or irreversible and can be prevented or reduced through appropriate preventive measures. Based on their low-level risk, subprojects w i l l require only Environmental Management Plans (EMPs), which will be prepared using the format provided in the project Operations Manual and will contain all environmental documentation information requirements necessary to satisfy both the Kyrgyz Republic EA regulations and World Bank EA policies.
3. and subsequently described in detail:
Key elements o f the EA process to be used in the RWSSP-2 are identified below
Preparation and Construction Phase
Publicly Disclose EMPs
Prepare draft Environmental Management Plans (EMPs) for subprojects Conduct Public Consultation on the draft EMPs Carry out EMP Review and Approval
Assign Related Conditions and Responsibilities
Implementation Phase
Conduct Supervision and Reporting Establish Organizational Arrangements for Environmental Management
B.2. Preparation and Construction Phase
Environmental Assessment Documentation
60
4. PMU i s responsible for preparing all EA documentation required by Kyrgyz law and World Bank EA policies and procedures. The P M U will prepare an EMP for each subproject under RWSSP-2 using the format specified in the Project Operations Manual and submit it concurrently to the Kyrgyz Forestry and Environment Preservation Agency and the Bank for ex post review.
5. Table 1 l is ts issues or impacts and mitigating measures normally associated with the types o f subprojects that will be considered under RWSSP-2, although actual impacts may vary depending on site-specific conditions; additional issues may be introduced during public consultations, or fewer issues may actually arise for a particular subproject. (see Appendix A)
Table 1: Typical Issuesdmpacts and Mitigating Measures Associated with RWSSP-2 Subprojt Potential Impacts
Damage to ecosystems, endangered plant species
Pollution of soil and surface water at construction site with oil and oil products
Noise pollution in nearby towns
Dust
Reduced amenity values of the area
Archaeological “chance find”
Is: -Laying New Pipelines Mitigating Measure
Select pipeline route to avoid habitats of endangeredplant and animal species
Daily check of machinery for leaking of oilhbricants, ban on-washing machinery at construction site
Works performed strictly during daytime hours
Water construction site, particularly during dry, windy weather
Proper landscaping and replanting of construction area after completion ofpiping works
Stop works and notifi responsible local authorities and experts
Phase
DesigdConstruction
Construction
Construction
Construction
Construction
Construction
Responsibility
Design Consultant
Construction Contractor
Construction Contractor
Construction Contractor
Construction Contractor
Construction Contractor
61
Repair of Existing Pipelines
Potential Impacts Mitigating Measure
Digging of soil, damage to endangered plant species
Check for endangeredplant species on construction site. Iffound, replant
I
Pollution of soil and surface water at construction site with oil and oil products
Littering of construction site with removed pipe portions and insulating materials
Daily check of machinery for leaking of oilhbricants, ban on washing machinery at construction site
Instruct contractor on correct landfill site for waste disposal. If insulation or pipelines contain asbestos, workers must wear protective measures-such as respirators
Dust
Reduced amenity values of the area
Noise pollution in nearby towns
Water construction site, particularly during dry, windy weather
Landscape and replant construction area after completion ofpiping works
Works performed strictly during daytime hours
Archaeological “chance find ’’
Stop works and notify responsible local authorities and experts
Phase
DesigdConstruction
Construction
Construction
Construction
Construction
Construction
Construction
Responsibility
Design Consultant and
Contractor
Construction Contractor
Construction Contractor
Construction Contractor
Construction Contractor
Design Consultant and Construction
Contractor
Construction Contractor
62
Change of Pumps at Pumping Station
Potential Impacts
Generation of construction waste
Mitigating Measure
Prompt collection and disposal of construction waste in a designated landfill
Dispose of removedpumps by delivering them to scrap metal collection sites, or to special storage
Dispose of removed asbestos material to designated hazardous waste disposal site
Phase
Construction
Responsibility
Contractor
Public Consultation
6. Prior to completion o f the EMP, the PMU wi l l be responsible for organizing and conducting at least one public consultation with subproject-affected groups such as local residents and NGOs. The public consultation aims not only to inform affected groups about the subproject and offer an opportunity for them to ask questions or voice concerns about environmental impacts, but also to provide a feedback loop for subproject implementation so that all legitimate issues raised at the public consultation can be included in the EMP.
7. Typically, public consultations are meetings but other methods include surveys, questionnaires, or radio and television call-in shows.
8. Public consultation i s a two-way flow o f information: subproject sponsors describe the activity to local people, who then have the opportunity to ask questions and raise their concerns.
9. Documenting the outcomes o f public consultations outcome i s critical and i s included in the EMP (EMP, Section D, Project Operations Manual)
EA Review and Approval
10. The PMU will submit the EMP to the Forestry and Environment Preservation Agency for “Ecological Expertiza”. N o subproject will be permitted to start construction until a favorable official written response i s received. Documentation o f successful “Ecological Expertiza” should be placed in the subproject fi le. Concurrently, the PMU wi l l prepare an EMP that will be submitted to the Bank for ex post review.
Related Conditions and Responsibilities
11. are included in the construction contractor bid document.
PMU will be responsible to ensure that construction-related activities o f the EMP
63
B.3. Implementation Phase
Organizational Arrangements for Environmental Management
12. The PMU, through the Project Management Consultant, will have overall supervision responsibility to ensure that EMP-indicated measures are properly performed. The PMU, in collaboration with the relevant Ayil Okmotus and the Forestry and Environment Preservation Agency, will perform subproject environmental monitoring during construction and operation phases as specified in the EMP monitoring plan. Cases with new construction are neither expected nor were any identified and included in the f i rst year investment plan. In the event that this would be proposed to change in the course o f implementation, for example to provide water supply infrastructure to a village where it currently does not exist, the Bank will review the proposed subproject or subprojects and determine whether an amendment to the Financing Agreement is required and what if any measures are required to comply with the safeguard policies o f the World Bank. Such measures might include: updating o f the project’s Environmental Management Framework; preparation o f a Resettlement Policy Framework, Resettlement Action Plan(s) or Abbreviated Resettlement Plan(s); and/or notification o f riparian States in the event that the change would involve new or increased abstraction o f water f rom a transboundary river or tributary o f a transboundary river. Any required amendments to the Financing Agreement and any measures required for compliance with the Bank’s safeguard policies will be completed prior to approval o f any such subprojects.
Supervision and Reporting
13. Initially, the PMU will make site visits at least once per month during subproject implementation to review E M P compliance. More frequent visits may be necessary if there are significant environmental issues associated with subproject operation, if not, supervision frequency can be reduced to quarterly, semiannually, and eventually, annually.
14. Regular subproject progress reports should include a section on “Environmental Management,” which should be brief and provide a condensed description o f monitoring activities, any issues identified, and their resolution.
Considerations on OP 7.50:
Exception to the notification requirements o f O.P. 7.50 has been granted because the project supports only investments for abstractions o f water f rom (i) locally confined (non- transboundary) aquifers, (ii) smaller, detached springs and small rivers. Furthermore, the project will serve an existing rural population in the project area that i s already consuming water from the same sources that the project will use. Therefore, project abstractions do not constitute increased water use or abstraction in affected areas. In fact, project activities should lead to reduced water use because water system losses will decline and water resources protection will improve through the promotion o f improved, environmentally safe on-site sanitation infrastructure. Under the project, water provided will be primarily for domestic use, but include very l imited agricultural use for watering household livestock and kitchen gardens. N o water will be exported from the basins involved.
64
The project encompasses three river basins, Chui, Naryn, and Talas. The Bank estimated the relative impact o f the project in each basin, under a simplified assumption o f 10,000 users each. Annual water discharges for all three basins across Kyrgyz national boundaries came from gauging stations. (sources: UNWGRDC, http://www.rzrdc.sr.unh.edu/index.html) or published literature (htto://enrin.arida.no/htmls/kyr~hiz/soe2/enrz1ish/waters.htm) and these flow volumes compared with the projected total annual volume o f water used under this project. Results appear in the table below. Total annual volumes o f abstracted water to total basin discharge i s a ratio o f about 1:10,960 for Talas, 1:32,000 for Chui and 1:63,000 for Naryn.
water users est. water use mean annual est. water use in basin per head discharge in Basin (No.) (m3/d) (km3/a) (km3/a>
ratio use I discharge
River Basin Name
Naryn 10,000 0.05 11.51 0.000183 63,072
Talas 10,000 0.05 2.00 0.000183 10,959
Chui 10,000 0.05 5.83 0.000 183 3 1,945
Because water volumes and potential impacts are seen as negligible, a waiver to notification requirements was granted. However, DRWSPMU will maintain dialogue with the Bank for additional guidance on any actions as per OP 7.50 that would apply to any investment that could potentially raise this issue.
65
VI I.....
a,
vl Y 2
. . e . .
e . . .
e . . .
e . . .
d 0 E 3 w E
C. INSTITUTIONAL ARRANGEMENTS
Action
Monitoring Data Collection
Construction
Operation ~~ ~ ~
Data Analysis
Construction
Operation
Environmental Report Preparation
Construction
Operation
Institutional Responsibility
Construction (from “Monitoring Plan”)
Operation (from “Monitoring Plan”)
Construction
Operation
Construction
Operation
Environmental Report ReceiptlFrequency (Who receives reporthow often)
Construction
Operation
Management Action
Construction
Operation
Construction
Operation
68
D. CONSULTATION WITH LOCAL NGOS AND PROJECT-AFFECTED GROUPS Provide documentation o f the following:
e
e e
e Who was invited: Name, Organization or Occupation, TelephoneFade-mail
e Who attended Name, Organization or Occupation, TelephoneFade-mail
e e
Manner in which notification o f the consultation was announced: media(s) used, date(s), description or copy o f the announcement Date(s) consultation(s) was (were) held Location(s) consultation(s) was (were) held
number/address (home and/or office)
number/address (home and/or office) Meeting ProgrdSchedule What i s to be presented and by whom Summary Meeting Minutes (Comments, Questions and Response by Presenters)
L i s t o f decisions reached, and any actions agreed upon with schedules, deadlines and responsibilities.
69
Annex 11: Project Preparation and Supervision
KYRGYZ REPUBLIC: Second Rural Water Supply & Sanitation Project
Planned Actual PCN review 03/21/2008 Initial PID to PIC 08/1 8/2008 Initial ISDS to PIC 08/19/2008 Appraisal 02/13/2009 Negotiations 03/04/2009 Board/RVP approval 04/2 1/2009 Planned date o f effectiveness 05/3 1/2009 Planned date o f mid-tern review 05/3 1/2011 Planned closing date 05/31/2013
Key institutions responsible for project preparation: National Agency o f Local Self-Governance and i t s Department o f Rural Water, Supply including Project Management Unit. Bank staff and consultants who worked on the project include:
Name Title Unit Mirlan Aldayarov Task Team Leader ECSSD
Jonathan Kamkwalala Richard Pollard
Anna Cestari Christophe Bosch
Kenneth K. Mwenda Hannah M. Koilpillai
Irina Novikova Nargis Ryskulova Janna Ryssakova
Wolfhart Pohl Ani Balabanyan
John Ogallo Galina Algardova
Yuling Zhou Nurbek Kurmanaliev
Irina Goncharova Maria Teresa Lim
Milane Reyes Aida Japarova
Lead Financial Analyst Sr. Water and Sanitation Specialist Water Resource Specialist Country Sector Coordinator Sr. Counsel Sr. Finance Officer Social Scientist (Consultant) Operations Analyst Social Development Specialist Sr. Environmental Specialist Operations Officer Sr. Fin. Mgmt. Specialist Fin. Mgmt. Specialist Sr. Procurement Specialist Procurement Specialist Program Assistant Program Assistant Program Assistant Team Assistant
ECSSD ECSSD ECSSD ECSSD LEGEM LOAFC ECSSD ECSSD ECSSD ECSSD ECSSD ECSSD ECSSD ECSPS ECSPS ECSPS ECSSD ECSSD ECCKG
Bank funds expended to date on project preparation: 1. Bank resources: US$107,240.45 2. Trust funds:US$00.00 3. Total: US$107,240.45
70
Estimated Approval and Supervision costs: Remaining costs to approval: 50,000.00 Estimated annual supervision cost: 90,000.00
71
Annex 12: Documents in the Project File KYRGYZ REPUBLIC: Second Rural Water Supply & Sanitation Project
1. Technical Reports
Water Code o f the Kyrgyz Republic (Law No. 8, published on January 12,2005); Law o f Local State Administrations and Local Self-Governments (Law No. 99, published on May 29,2008); Baseline Survey Report; Draft o f Long Term Strategy for the Rural Water Supply and Sanitation Sector in the Kyrgyz Republic, January 21 , 2008; Impact Assessment Study o f the RWSSP, June 2007; Asian Development Bank’s Report and Recommendation o f the President to the Board o f Directors for the Proposed Supplementary Asian Development Fund Grant for the Kyrgyz Republic: Community Based Infrastructure Services Sector Project (Asian Development Bank Project No. 3 1 197, September 2008); and Various Quarterly Progress Report for the (first) Rural Water Supply and Sanitation Project.
2. Bank Staff Assessments
0
0
0
0
0
Various aide memoires for the (first) Rural Water Supply and Sanitation Project (2001- 2008); Mid-Term Review o f the (first) Rural Water Supply and Sanitation Project (November 2004); Special Review Panel Report and Minutes o f Meeting o f the proposed Second Rural Water Supply and Sanitation Project (March 21,2008); Procurement Capacity Assessment (August 2008); Financial Management Assessment Report (September 2008); and Preparation Aide Memoires for the preparation missions o f the Second Rural Water Supply and Sanitation Project (May-September 2008).
72
Annex 13: Statement o f Loans and Credits KYRGYZ REPUBLIC: Second Rural Water Supply & Sanitation Project
Difference between expected and actual
disbursements Original Amount in US$ Millions
Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d
CAPACITY BLDG ECON MGT 0.00 3.00 0.00 0.00 0.00 P108525 2009 P108178 2009
P104994 2008
PO96993 2008 PO98949 2007 PO96409 2007 PO87811 2007
PO99453 2006 PO88671 2006 PO84977 2006 PO83377 2005 PO78976 2005 PO49724 2005 PO83235 2004 PO74881 2004 PO71063 2003 PO36977 2002 PO69814 2000 PO49719 2000
SECOND LAND & REAL. ESTATE REGISTRATION BISHKEK AND OSH URBAN INFRASTRUCTURE AISP V P 2 OP-2 RED TECH BARRIERS FOR ENTREPR & TRADE AVIAN FLU (AICHPPCP) WATER MGMT JMPRVMT HEALTH & SOC PROT SMALL TOWNS INFRA & CAP BLDG RURAL EDUC AGRIBUSINESS & MARKETING DISASTER HAZARD MITIGATION PYMNTBANK SYST MOD GOV TA RURAL WS & S A N CONSLD TA LAND REGISTRATION
0.00
0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
5.85 0.00 0.00
12.00 0.00 0.00
9.00 0.00 0.00 15.00 0.00 0.00 16.00 0.00 0.00 5.00 0.00 0.00
4.00 0.06 0.00 19.00 0.00 0.00 15.00 0.00 0.00 15.00 0.00 0.00
15.00 0.00 0.00 8.10 0.00 0.00 6.90 0.00 1.00 9.00 0.00 0.00 7.78 0.00 0.00
15.00 0.00 0.00 5.00 0.00 0.00 9.42 0.00 0.00
0.00
0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3.09 5.88
11.81
13.30 0.89
15.98 5.19
2.67 20.15 15.21 4.85 6.14 4.60 5.18 4.58 7.37 0.02 2.78 0.00
0.00 0.00 0.00 0.00
-0.50 0.00
0.23 0.00 -4.25 -2.97 -0.72 0.00 2.61 0.00
0.70 0.00 2.34 0.00 0.78 0.00 0.62 0.00 4.18 1.54 0.53 0.00 3.08 0.00 4.08 0.00 5.93 -0.10
-2.78 0.00 2.18 -0.28
-0.60 -0.63
Total: 0.00 195.05 0.00 1.00 0.00 129.69 18.41 - 2.44
KYRGYZ REPUBLIC STATEMENT OF IFC’s
Held and Disbursed Portfolio In Millions o f U S Dollars
Committed Disbursed
IFC IFC
FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic.
2004 AKB Kyrgyzstan 2006 Bai Tushum 1996 Demirbank Kyrgyz 2003 Demirbank Kyrgyz 2001 FINCA 2004 Ineximbank
KKB Kyrgyzstan 2001 SEF Akun Ltd.
1.50 1.20 0.00 0.00 0.00 1.50 2.00 0.91
0.00 0.00 0.00 0.00 0.45 0.00 0.11 0.00 1 .oo 0.00 0.00 0.00 0.00 0.00 0.00 1 .oo
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1.50 0.00 0.00 1.20 0.00 0.00 0.00 0.45 0.00 0.00 0.11 0.00 0.00 1 .oo 0.00 1.50 0.00 0.00 1.60 . ’ 0.00 0.00 0.91 0.00 1 .oo
0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00
73
2005 SEF Altyn-Ajydar 1 .oo 0.00 0.40 0.00 0.30 0.00 0.40 0.00 2000 SEF KICB 0.00 1.40 0.00 0.00 0.00 1.40 0.00 0.00 2005 SEF KICB 2.50 0.00 0.00 0.00 1 .oo 0.00 0.00 0.00
Total portfolio: 10.61 2.96 1.40 0.00 8.01 2.96 1.40 0.00
Approvals Pending Commitment
FY Approval Company Loan Equity Quasi Partic.
2006 Bai Tushum 0.00 0.00 0.00 0.00 2006 GeoPark 0.02 0.00 0.00 0.00
Total pending commitment: 0.02 0.00 0.00 0.00
74
Annex 14: Country at a Glance KYRGYZ REPUBLIC: Second Rural Water Supply & Sanitation Project
POVERTY and SOCIAL Europe 6
Kyrgyr Central Low- Republic
5 2 490 2 5
2006 Population, m id-year (mlllio ns) GNI percapita (Atlas method, US$) GNI (Atlas method, US$ billions)
Average annual growth, 2000.06
Population (Sy 0 9 Laborforce (%) 16
M o s t recent e8t lmate ( latest year avallable, 2000-06) Poverty (% 0 f populatio n below natio nal po verty line) 41 W a n population (%of total population) 35 Life e m t a n c y a l birth (pars) 68 Infant mortality (per 10001lve blrihs) 56 Child m alnutnlio n (%of children under 5) 7 Access to an improvedwaler source (%ofpopulation) 77 Literacy (%ofpopuleflon age 159 Gross primary enrollment 96
M ale 96 Female 97
KEY ECONOMIC RATIOS and LONG-TERM TRENDS
1986 1996
GDP (US$ billions) 18
Exports of goods and services/GDP
Gross national sevings/GDP 18
Interest paymenls/GDP 19
Total debt servicdexports BO
Gross capital formation/GDP 25 2 307
Gross domestic savingslGDP -06
Current account balance/GDP -23 2
Total debt/GDP 62 2
Present value of debtlGDP Present value of debtlexports
1988-96 1996-06 2006 (average annualgrowth) GDP -56 4 2 -02 GDP per capita -87 3 1 -12 Exports of goods and services 18 -no
Asla Income
460 4.796 2206
00 0 5
64 69 28
5 92 97 0 2 0 3 0 0
2006
2 6 8 4
383 -2 1 82
-83 0 9
62 6 9 6
59 9 M 1
2 403 650
1562
19 2 3
30 59 75
75 61
0 2 0 8 96
2006
2 7 0 4
39 3 -9 8 -82
- 0 7
2006 2006-10
2 7 6 4 16 5 2
-0.3 15.6
Deveio pment dlamo nd' I Life expectancy I
GNI Gross
capita enroilmenl per primary
Access to improved water source
-Kygp Republic
Economlc rat ios '
Trade
Domestic Capital savings formation
Indebtedness
- Kyrgp Republic
STRUCTURE o f the ECONOMY
(%ofGDP) Agriculture Industry
Services
Household final consumption expenditure General gov't final consumplion expenditure Imports of goods and services
M anufacluring
(average annual gro wth) Agriculture industry
Services
Household final consumption expenditure General gov't final consumption expenditure Gross capital formation imports of goods and services
Manufacturing
1986 1996
49 7 8 3 6 5
32 0
62 1 8 5
566
1986-96 1996-06
-2.3 3.9 -14.5 15 -22.2 2.5 -3.4 5.6
-12.2 6.5 -6 .7 15 -0 .7 -0.4
.. 3.8
2006
319 22 4 144
45 7
845 l i 5 566
2006
-4 2 -9 6
- 8 8 6 4
6 3 -2 7 a 7 6 5
2006
33.0 20.1 12.9
46.9
00.6 8 . 9
76.5
2006
15 -7.4
-12.8 3.6
22.1 0.4 0.2
38.7
Growth o f capl ta l and GDP (K) I
Note 2006 data are preiiminaryestimates This tablewas producedfrom the Development Economics LDB database 'Thediamonds showfour key indicators inthecountry(in boid)compared withits Income-group average I dataare missing, thediamondwii
be incomplete
75
B A L A N C E o f P A Y M E N T S
(US$ miLonsJ Eqor ts of goods and services Imports of goods and services Resource balance
Net income Net current transfers
Current account balance
Financing items (net) Changes in net reserves
1986
M e m o : ReSeNeS including gold (US$ mil/ions) Conversion rate (DEC, local/US$)
E X T E R N A L D E B T and RESOURCE FLOWS
(US$ millions) Total debt outstanding and disbursed
1986
IBRD IDA
Totaldebt service IBRD IDA
Composition o f net resource flows Official grants Official creditors Private creditors Foreign direct investment (net inflows) Portfolio equity(net inflows)
World Bank program Commitments Disbursements Principal repayments Net flows Interest payments Net transfers
1996
563 1032 -469
-39 64
-425
423 2
127 P.8
1996
107 0
197
74 0 1
45 a 7
7 47 0
99 61 0
61 1
60
2005
942 1397 -455
-8 1 332
-204
297 -93
6P 410
2006
2,032 0
565
2 7 0 9
M 60
0 43 0
20 34 4
29 5
25
2006
too 1726 -626
-23 362
-288
382 -94
707 42.0
2006
0 6P
0 11
0 26 6 19 5 ‘6
Cur ren t accoun t ba lance t o GDP (%)
0
5
i o
-is 1
C o m p o s i t i o n o f 2005 debt (USS mill.)
1 565
E 571
c na
D: 533
A - IBRD E-Bildwal B-IDA D-Othermltilateral F-Private C-IMF G - Stwrl-term
Note:This tablewas producedfrom the Development Economics LDB database. 9/28/07
76
TT ii aa nn SS hh aa nn
KK uu nn gg ee yy -- AA ll aa tt aa uu MM tt ss ..
Peak PobedyPeak Pobedy7439 m7439 m
B AB AT K E NT K E N
J A L A L - A B A DJ A L A L - A B A D
C H U I C H U I
O S H O S H SulyuktaSulyukta
Kyzyl-KiyaKyzyl-Kiya
Tash-KumyrTash-Kumyr
Kara-Kul Kara-Kul
At-BashyAt-Bashy
KirovKirovKara-BaltaKara-Balta Tokmok Tokmok
ChaekChaek
Barskaun Barskaun
Kara-Say Kara-Say
Sary-TashSary-Tash
Daraut-Daraut-KorganKorgan
Gul'chaGul'cha
ToktogulToktogul
TunukTunuk
TyupTyup
EnilchekEnilchek
ShyirakShyirak
OshOsh
Jalal-AbadJalal-Abad
BatkenBatken
NarNarynyn
TTalasalasKarakolKarakol
B AT K E N
TA L A S
J A L A L - A B A D
C H U I
I S S Y K - K U L
O S H
N A R Y N
BISHKEKBISHKEK
Sulyukta
Kyzyl-Kiya
Tash-Kumyr
Kara-Kul
At-Bashy
KirovKara-Balta Tokmok
Balykchi
Chaek
Cholpon-Ata
Barskaun
Kara-Say
Sary-Tash
Daraut-Korgan
Gul'cha
Toktogul
Tunuk
Tyup
Enilchek
Shyirak
Osh
Jalal-Abad
Batken
Naryn
TalasKarakol
BISHKEK
T A J I K I S T A N
UZBEKISTAN
C H I N A
K A Z A K H S T A N
Chatkal
Chu
Naryn
Aksay
Kyzyl Suu
Kurshab
Lake Issyk-Kul
ToktogulReservoir
Lake Sonkul
LakeCharyi-Kel'
To Panfilov
To UshtobeTo
Burylbaytal
To Shymkent
To Tashkent
To Bukhoro
To Murghab
To Hotan
T i a n S h a n
K u n g e y - A l a t a u M t s .
Peak Pobedy7439 m
72°E 74°E 76°E 78°E 80°E
70°E 72°E 74°E 76°E
78°E 80°E
44°N
42°N42°N
40°N40°N
KYRGYZREPUBLIC
This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.
0 25 50 75
0 25 50 75 Miles
100 Kilometers
IBRD 36804
MA
RCH
2009
KYRGYZ REPUBLICSECOND RURAL WATER SUPPLY
AND SANITATION PROJECT
PROJECT OBLASTS
SELECTED CITIES AND TOWNSOBLAST CAPITALSNATIONAL CAPITALRIVERSMAIN ROADSRAILROADSOBLAST BOUNDARIESINTERNATIONAL BOUNDARIES