Implementation Completion and Results Report - Haiti Rural Water and Sanitation Project

Document of The World Bank Report No: ICR00002944 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-H2700, TF093527) ON IDA AND SPF GRANTS IN THE AMOUNT OF SDR3.4 MILLION AND US$5 MILLION (A TOTAL OF APPROXIMATELY US$10 MILLION) TO THE REPUBLIC OF HAITI FOR A RURAL WATER AND SANITATION PROJECT May 30, 2014 Water and Sanitation Unit Haiti Country Management Unit Latin America and the Caribbean Region Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized ii CURRENCY EQUIVALENTS (Exchange Rate Effective: November 30, 2013) Currency Unit = Gourdes (HTG) HTG 1.00 = US$ 0.02 HTG 43.85 = US$ 1.00 FISCAL YEAR July 1 – June 30 ABBREVIATIONS AND ACRONYMS AIC Average Incremental Cost CAEP Com i té d’Approvisionnement en Eau Potable (Drinking Water Supply Committee) CAEPA Com i té d’Approvisionnement en Eau Potable et Assainissement (Drinking Water Supply and Sanitation Committee) CDD Community - Driven Development COPRODEP Conseil de Projet de Développement Participatif (CDD Project Development Council at the Municipal Level) DINEPA Direction National e de l’Eau Potable et de l’Assainissement (National Water and Sanitation Directorate) EIRR E conomic I nternal R ate of R eturn EPAR Programme Eau Potable et A ssainissement en Milieu Rural ( Haiti Rural Water Supply and Sanitation P roject ) GDP Gross Domestic Product HTG Haitian Gourde IDA International Development Association IDB Inter - American Development Bank ICR Implementation Completion and Results Report ISR Implementation Status and Results Report LICUS Low - Income Countries Under Stress NGO Non - G overnmental O rganization NPV Net Present Value O&M O perations and M aintenance OREPA Offices Régionaux d’Eau Potable et Assainissement (Regional Water and Sanitation Offices) iii PAD Project Appraisal Document PDO Project Development Objective PRODEP World Bank - assisted Community - Driven Development project in Haiti PSDH Plan Stratégique de Développement d’Ha ïti ( Haiti’s Strategic Development Plan ) SNEP Service National d’Eau Potable (National Drinking Water Service ) SPF State and Peace - Building Fund TEPAC Techniciens en Eau Potable et Assainissement Communaux (Communal Water and Sanitation Technicians) URD Unités Rurales Départementales ( Departmental Rural Units ) WSP Water and Sanitation Program of the World Bank WSS Water Supply and Sanitation Vice President: Jorge Familiar Calderon Country Director: Mary Barton-Dock Sector Manager: Wambui Gichuri Project Team Leader: Christophe Prevost ICR Team Leader: Jean-Martin Brault ICR Author: Elizabeth Kleemeier iv Haiti Rural Water and Sanitation Project CONTENTS Data Sheets A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design ................................ ........................... 1 2. Key Factors Affecting Implementation and Outcomes ................................ ........................... 6 3. Assessment of Outcomes ................................ ................................ ................................ ........ 9 4. Assessment of Risk to Development Outcome ................................ ................................ ..... 1 3 5. Assessment of Bank and Borrower Performance ................................ ................................ .. 14 6. Lessons Learned ................................ ................................ ................................ .................... 1 5 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ....................... 1 7 Annex 1. Project Costs and Financing ................................ ................................ ...................... 1 8 Annex 2. Outputs by Component ................................ ................................ .............................. 1 9 Annex 3. Economic and Financial Analysis ................................ ................................ ............. 2 4 Annex 4. Bank Lending and Implementation Support/Supervision Processes ......................... 30 Annex 5. Beneficiary Survey Results and Stakeholder Workshop Report and Results ............ 3 2 Annex 6 . Summary of Borrower's ICR and/or Comments on Draft ICR ................................ . 3 3 Annex 7 . List of Supporting Documents ................................ ................................ ................... 3 4 MAP v IDA Grant and SPF Trust Fund Data Sheets A. Basic Information Country: Haiti Project Name: Haiti Rural Water and Sanitation Project Project ID: P089839 (IDA) P114936 (SPF) L/C/TF Numbers: H2700 - HT (IDA) TF093527 (SPF) ICR Date: May 30, 2014 ICR Type: Core Lending Instrument: Investment Project Financing Borrower: Republic of Haiti Original Total Amount: SDR 3.4 million - US$ 5 million equivalent (IDA) US$ 5 million (SPF) Disbursed Amount: US$ 5,217,304 (IDA) US$ 4,630,027 (SPF) Total = US$ 9,847,331 Revised Amount: No change Environmental Category: B Implementing Agency: DINEPA (Direction Nationale de l’Eau Potable et de l’Assainissement) Co - Financiers and other External Partners: None B. Key Dates Process Date Process Original Date (planned) Revised/Actual Date Concept Review: December 8, 2005 (IDA) November 12, 2008 (SPF) Effectiveness: August 1, 2007 (IDA) April 2, 2009 (SPF) August 1, 2007 (IDA) April 2, 2009 (SPF) Appraisal: September 22, 2006 (IDA) November 18, 2008 (SPF) Restructuring: - December 31, 2010 (IDA) July 18, 2012 (SPF) Approval: January 30, 2007 (IDA) November 25, 2008 (SPF) Mid - Term Review: October 13, 2010 (IDA and SPF) October 13, 2010 (IDA and SPF) Closing: December 31, 2011 (IDA) December 31, 2011 (SPF) December 31, 2011 (IDA) November 30, 2013 (SPF) vi C. Ratings Summary C.1 . Performance Ratings by ICR Category Rating Outcomes: Satisfactory Risk to Development Outcomes: Moderate Bank Performance: Satisfactory Borrower Performance: Satisfactory C.2 . Detailed Ratings of Bank and Borrower Performance Bank Rating Borrower Rating Quality at Entry: Satisfactory Government: Satisfactory Quality of Supervision: Satisfactory Implementing Agency: Satisfactory Overall: Satisfactory Overall: Satisfactory D. Sector and Theme Codes D.1 . Sector Codes (as percentage of total Bank financing) Sector Original Percentage Revised/Actual Percentage Other Social Services 12 9 Water Supply 25 7 Sanitation 63 84 D.2 . Theme Codes (as percentage of total Bank financing) Theme Original Percentage Revised/Actual Percentage Administrative and Civil Service Reform 25 10 Other Human Development 25 19 Rural Services and Infrastructure 50 71 vii E. Bank Staff Position At ICR At Approval (2007) Vice - President Jorge Familiar Calderon Pamela Cox Country Director Mary A. Barton - Dock Caroline D. Anstey Sector Director Ede Jorge Ijjasz - Vasquez Makhtar Diop Sector Manager Wambui G. Gichuri John Henry Stein Task Team Leader Christophe Prevost Manuel Schiffler ICR Team Leader Jean - Martin Brault ICR Author Elizabeth Kleemeier F. Results Framework Analysis F.1. Project Development Objectives (from Project Appraisal Document) PDO: Increase access to and use of WSS services in participating rural communities. Specific objectives: -Increase the sustained and effective use of safe drinking water in participating communities; -Improve use of effective sanitation and hygiene practices in participating communities; and -Strengthen the capacity of the implementing agency, local water committees, and professional operators in cooperation with local government. F.2. Revised Project Development Objectives (as approved by original approving authority) The PDOs were not revised. (a) PDO Indicator(s) Indicator Baseline Value Original Target Value Formally Revised Target Value Actual Value Achieved at Completion Indicator 1: Number of people provided with access to improved water sources under the target Unit = People 30,000 Baseline + 21,000 51,000 59,367 Dates Achieved 10/31/2008 10/31/2008 12/31/2010 11/30/2013 Comments (incl. % target achieved) 116% target achievement : Based on 2008 population extrapolated by various growth rates. For some communities a household count was viii (a) PDO Indicator(s) Indicator Baseline Value Original Target Value Formally Revised Target Value Actual Value Achieved at Completion completed just prior to system construction. Indicator 2: Number of households using basic sanitation systems in participating localities Unit = H ouseholds 3,060 Baseline + 1,890 4,060 4,964 Dates Achieved 10/31/2008 10/31/2008 12/31/2010 11/30/2013 Comments (incl. % target achieved) 122% target achievement: The number of beneficiaries (HHs) is the estimated number of HH s in the 7 communities where sanitation campaign s were conducted (“participating localities”), calculated with the baseline and adding the number of HHs that have built and are using a latrine in the last 5 years (27.5%, see results survey). (b) Intermed iate Outcome Indicator ( s ) Indicator Baseline Value Original Target Value Formally Revised Target Value Actual Value Achieved at Completion Indicator 1: Proportion of CAEPAs which meet the requirements stated in the Standard Minutes of Comm. Meeting to Accept Project Unit = Percentage of committees 0 Not defined 90% 100% Dates Achieved 10/31/2008 10/31/2008 12/31/2010 12/31/2011 Comments (incl. % target achieved) 100% target achievement: 15 CAEPAs were created in line with the 2009 sector framework law. Indicator 2: Proportion of communities using professional operators with signed contracts with professional operators Unit = Percentage of communities 0 100% 100% 100% Dates Achieved 10/31/2008 10/31/2008 12/31/2010 12/31/2011 Comments (incl. % target achieved) 100% target achievement: the 9 communities using a professional operator have a signed contract with them. Indicator 3: Proportion of Operators trained in Financial Management, technical O&M, and community relations Unit = Percentage of operators 0 100% 100% 100% Dates Achieved 10/31/2008 10/31/2008 12/31/2010 10/31/2012 Comments (incl. % target achieved) 100% target achievement: All 9 private operators were trained in financial management, technical O&M, and community relations. ix (b) Intermed iate Outcome Indicator ( s ) Indicator Baseline Value Original Target Value Formally Revised Target Value Actual Value Achieved at Completion Indicator 4: Number of water utilities that the project is supporting Unit = Water Utilities 0 1 1 1 Dates Achieved 10/31/2008 10/31/2008 12/31/2010 12/31/2012 Comments (incl. % target achieved) 100% target achievement: The Project supported DINEPA. Indicator 5: Number of water systems rehabilitated or newly built Unit = Water System 0 Not defined 11 15 Dates Achieved 10/31/2008 10/31/2008 12/31/2010 11/30/2013 Comments (incl. % target achieved) 137% target achievement: 8 piped systems were rehabilitated, 4 new piped systems were constructed, and 3 communities were served with a total of 8 handpumps. Each of these communities with handpumps is considered a system. Indicator 6: New piped household water connections that are resulting from the project intervention Unit = On - premise household connection 0 N ot defined 200 1,598 Dates Achieved 10/31/2008 10/31/2008 12/31/2010 11/30/2013 Comments (incl. % target achieved) 799% target achievement: the revised estimate was set at a low value to reflect uncertainty about demand for private connections, but the demand ended up being high. Indicator 7: Improved community water points constructed or rehabilitated under the project Unit = S tandpost or kiosk 0 Not defined 40 159 Dates Achieved 10/31/2008 10/31/2008 12/31/2010 11/30/2013 Comments (incl. % target achieved) 400% target achievement : Of the 159 kiosks and communal water points constructed, 89 were in operation as of March 2014. Others had been closed by the operators due to a lack of demand for the kiosks (not profitable to keep a kiosk operator on site), or users did not shut faucets of communal water points (standposts). x (b) Intermed iate Outcome Indicator ( s ) Indicator Baseline Value Original Target Value Formally Revised Target Value Actual Value Achieved at Completion Indicator 8: Percent of target audience receiving training on hygiene and sanitation in communities Unit = Percentage 0 Not defined 80 13 Dates Achieved 10/31/2008 10/31/2008 12/31/2010 12/31/2012 Comments (incl. % target achieved) 16% target achievement: “Target audience” is defined as the estimated 2012 population (34,011) in the 7 communities that benefitted from the promotion campaign. 4,406 people were trained, attended events, or received home visits, a much lower number than planned, given the reduction in the firm’s original scope. Indicator 9: Number of masons trained in latrine construction Unit = M ason 0 Not defined 40 14 Dates Achieved 10/31/2008 10/31/2008 12/31/2010 12/31 /201 2 Comments (incl. % target achieved) 35% target achievement: This activity was scaled down due to the change in sanitation policy, procurement delays and subsequent lack of time and funds, but the target value was not changed. G. Ratings of Project Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 04/16/2007 Satisfactory Satisfactory 0 2 10/10/2007 Satisfactory Satisfactory 0 3 03/26/2008 Satisfactory Satisfactory 0.59 4 10/16/2008 Satisfactory Satisfactory 0.59 5 04/01/2009 Satisfactory Satisfactory 1.27 6 07/16/2009 Satisfactory Satisfactory 1.80 7 10/14/2009 Satisfactory Satisfactory 2.31 8 04/13/2010 Satisfactory Satisfactory 2.97 9 02/22/2011 Satisfactory Moderately Satisfactory 4.70 10 09/08/2011 Satisfactory Moderately Satisfactory 5.70 11 03/13/2012 Moderately Satisfactory Moderately Satisfactory 6.56 12 11/12/2012 Moderately Satisfactory Satisfactory 7.82 13 11/30/2013 Satisfactory Satisfactory 9.48 xi H. Restructuring Restructuring Date(s) Board Approved PDO Change ISR Rating at Restructuring Amount Disbursed at Restructuring in USD millions Reason for Restructuring & Key Changes Made DO IP 12/31/2010 N S S 4.60 (1) change the implementing agency, (2) forego building capacity in Participatory Project Development Councils, (3) integrate and revise results framework for IDA and SPF grants, (4) forego counterpart funding 07/26/2012 N MS MS 6.92 Extend closing date of SPF Grant by 11 months I. Disbursement Profile 1 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. Country Context. At project appraisal, Haiti was going through a transitional period following the abrupt end of the Aristide regime in 2004. More than three-quarters of its 8.6 million population was living below the poverty line, as well as 54 percent in extreme poverty, and the absence or poor state of basic rural infrastructure led to high rural-urban migration. The State and Peace-Building Fund (SPF) application noted in addition that Haiti was in crisis in 2008 due to the devastation of three hurricanes and a tropical storm, with total damages estimated at 15 percent of the Gross Domestic Product (GDP). Public institutions remained weak, despite progress on democracy, security, economic governance and institutional reform in 2006-2008. Haiti further suffered from setbacks in political stability in April 2008, when riots broke out over rising food and fuel prices, highlighting the need to improve socio - eco nomic conditions a nd provide basic services to reduce the risk of social unrest . 2. Sector Context. Access in rural areas to improved water supply and sanitation (WSS) was the lowest in the Western Hemisphere with 54 and 16 percent, respectively, and institutional capacity for rural WSS provision was low. The National Drinking Water Service (SNEP), the main institution for water supply outside Port-au-Prince, focused its limited capacity on intermediate cities of more than 10,000 people and the Ministry of Health had a small and inactive unit for hygiene and water supply due to lack of funds. No institution was charged with the responsibility of rural sanitation at the time. Without an institutional presence in rural areas and with little knowledge about levels of coverage and needs, it was thus difficult to prioritize investments which were, as a result, carried out in a piecemeal manner and did not necessarily reach the neediest citizens. 3. The Government had drafted legislation for a new institutional setup for rural WSS, which would be in place after project effectiveness. This legislation included decentralization of the responsibility for water supply provision to communes, creation of regional water and sanitation companies, and delegation by the communes to third party water service providers, which could be the regional companies, the private sector or community water associations. The legislation became law in 2009, creating the National Water and Sanitation Directorate (DINEPA) and replacing SNEP, as well as other national entities. 4. Rationale for Bank Involvement. The Project would support objectives in the World Bank Group Transitional Support Strategy for Haiti FY05-FY06 (Report # 30541), as well as the Interim Strategy Note for Haiti FY07-FY08 (Report # 37720-HT), discussed by the Executive Directors on December 10, 2004 and December 14, 2006, respectively, specifically to deliver quick wins in basic service provision, building public-private partnerships to promote inclusion and restore credibility in public institutions, and to deepen good governance and institutional reforms. 5. Also, a World Bank-assisted pilot project for rural water supply, school sanitation, and hygiene education had been implemented by SNEP in 2005-2007, using US$855,000 from a Low-Income Countries Under Stress (LICUS) grant. The LICUS project had been successful in building SNEP ’s capacity, testing in 3 schemes a new approach to service provision using professional operators, as well as selling water by volume through metering household connections and converting communal standposts to water kiosks. 1 1 Standposts ( fontaines in Haiti) distribute water freely, while kiosks sell water by the bokit (5 US gallons or 18.9 liters). 2 6. Contribution to Higher Objectives. The Project would contribute to 4 higher level objectives: (i) Improved governance and public sector capacity: Build SNEP capacity; introduce transparent procedures for allocating infrastructure investment; (ii) Greater social stability and state credibility: Demonstrate quickly and effectively state capacity to provide jobs and services to vulnerable populations; (iii) Social cohesion: Improve community capacity to mobilize inhabitants to obtain and sustain water services; (iv) Improved health: Reduce diarrhea, particularly in children and infants, through integrated water supply, hygiene, and sanitation services. 1.2 Original Project Development Objectives (PDO) and Key Indicators ( as approved ) 7. The IDA and the SPF grants were different sources of funding, and therefore had different guidelines and objectives. The practice at the time of project design (for IDA) was to list PDOs together with specific project objectives, while the format of the SPF proposals did not include the definition of the PDO in the main text. The PDO for SPF was instead expected to be included in the Results Framework. Table 1: PDO, Specific Objectives and Indicators IDA Grant Indicators 2 - PDO: Increase access to and use of WSS services in participating rural communities. - Specific objectives:  Increase the sustained and effective use of safe drinking water in participating communities;  Improve use of effective sanitation and hygiene practices in participating communities; and  Strengthen the capacity of the imp lementing agency, local water committees, and professional operators in cooperation with local government. - Number of beneficiaries gaining access to and using sustainable water systems in participating localities - Number of beneficiaries gaining access to and using basic sanitation systems in participating localities SPF Grant Indicators 3 - PDO:  Increased access to safe and continuous water supply;  Increased use of sanitary facilities;  Enhanced credibility of the government, as proven by its ability to deliver water and sanitation services to participating communities. - Increase in the number of beneficiaries receiving improved water service (access, continuity, and safety) - Increase in the number of beneficiaries using sanitary facilities - Positiv e beneficiary perception of government support for WSS service provision 8. Additionally, while for SPF grants, indicators only reflected the PDOs, the initial IDA Results indicators reflected both the PDO and the specific objectives. See Table 1 for the exact wording of the development objectives and indicators in the original documents. 2 The PAD defined “sustainable” as: tariffs at a level that finances O&M; 80% minimum of revenue collected; water committees meet regularly; professiona l operators fulfill their contractual obligations. The PAD also defined “basic sanitation systems” as any system that met the WHO -UNICEF Joint Monitoring Program definition of improved basic sanitation. 3 The SPF grant application stated that the given indicators were preliminary results, and the final versions would be part of the project’s operation manual. The project operation manual gave (in French) the indicators shown in this table. 3 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification 9. The Project was restructured on December 2, 2010, primarily to put in place a single, common set of PDO- and intermediate-level indicators for both grants. As a result, (i) the SPF development objective of enhanced government credibility would now be measured only by increased access to water and sanitation services; and (ii) sustainability as an objective was dropped entirely. After restructuring, for all practical purposes, the Project had now one objective, to increase the number of improved WSS facilities, and the target for beneficiaries of improved water supplies was revised upwards, while the target for beneficiaries of improved sanitation facilities was revised downwards, as explained in Table 2. Table 2: Revised PDO-level Indicators 4 for IDA and SPF Grants Revised PDO - level indicators Comments REVISED: People provided with access to “Improved Water Sources” under the project (number) This indicator was revised to be consistent with Bank - wide Core Sector Indicator s REVISED: Number of households using basic sanitation systems in participating localities The target value for sanitation was revised downward mostly due to delays in recruit ing a consultant or firm to lead the hygiene promotion and sanitation activities. DROPPED: Positive beneficiary perception of government support for WSS service provision This indicator was deemed as impractical to measure in a meaningful way, and thus a poor indicator for the intended outcome 1.4 Main Beneficiaries 10. Poor and vulnerable citizens: The social analysis for the IDA grant concluded that the Project would benefit the poorest and most underserved of Haiti’s citizens, particularly women and c hildren, by virtue of the Proje ct’s geographic focus on rural areas. The rural populations, roughly two-thirds of the total population, were the poorest people in Haiti with 86 percent living on less than US$2 a day and 69 percent on less than $1 a day. 11. Selected communities located in the Sud Department : The beneficiaries would be located in the Sud and Nippes departments where an IDB study had identified 40 communities eligible to be considered for the project based on technical criteria. Eligibility criteria included: (i) the number of inhabitants had to be less than 10,000; (ii) availability of a nearby, sufficiently productive, good quality source of water; (iii) protection of the source or indication of willingness and likelihood that the source would be protected; (iv) estimated per capita costs of less than US$150; (v) acceptance to pay volumetric tariffs covering operation and routine maintenance (O&M) costs; (vi) acceptance of the professional operator model; and (vii) payment of an up-front financial contribution (equivalent to an estimated 3 months of O&M costs) into a fund managed by the water committee. If the above criteria did not reduce the number of eligible communities sufficiently, the following additional criteria would be applied: lowest unit cost, and greatest average walking distance to current sources. 12. SNEP and CAEPs: Project documents identified public sector institutions as beneficiaries, because the Project would work through government to strengthen sustainable service delivery. At project appraisal, SNEP was the public sector institution which would receive assistance from the Project, the scope of which 4 Intermediate outcomes indicators and target values were also revised but for different reasons: the difficulty in measuring them; to harmonize the SPF and IDA indicators; and delays due to the 2009 hurricane and January 2010 earthquake. 4 would be based on a 2005 technical audit concluding that : (i) SNEP’s water service delivery capacity was inadequate due to limited human and financial resources, particularly to the rural population, and due to the lack of a control system for service quality. Donors generally concentrated their financial resources on infrastructure, leaving SNEP with insufficient public resources to finance operation, management and maintenance; (ii) management capacity in SNEP was deficient; and (iii) local water committees (CAEPs) often did not receive support from SNEP to manage local water systems. Both the PAD and SPF documents also highlighted the importance of providing support to these CAEPs, which later became water and sanitation committees (CAEPAs), as well as to professional operators. 1.5 Original Components ( as approved ) 13. The IDA Grant had two components and the SPF Grant had four. This difference was due to the latter defining smaller and more specific components. This section describes in turn each IDA component, along with its corresponding SPF components. The SPF Grant divided the water supply and sanitation/hygiene activities into two distinct components. 14. Component 1: Capacity Building and Project Management. The IDA activities under this component comprised: (i) technical assistance and resources for the SNEP regional office in the Sud Department; (ii) financing for SNEP to finalize and disseminate the national rural water and sanitation strategy developed under the LICUS project; (iii) financing for project management, documentation, reporting, information technology, environmental management, and financial audits; and (iv) financing for monitoring and evaluation (M&E) surveys to measure indicators. 15. The SPF capacity-building activities would finance training for: (i) community water and sanitation committees (CAEPAs) and the community organization members formed under the Bank’s Community- Driven Development (CDD) Project, PRODEP, in communication, community mobilization, conflict resolution, and the roles of the various stakeholders under a professional operator management model; (ii) professional operators (and CAEPAs if they choose to act as operators) in billing and accounting, meter reading and repair, water disinfection, plumbing, community relations, and conflict resolution; (iii) members from umbrella associations of the community organizations (COPRODEPs or Participatory Project Development Councils) in how to form a water and sanitation sub-committee; and (iv) service providers under the CDD and rural water projects in the form of annual departmental workshops to exchange experiences. The SPF component for project management and M&E would fund consultant services, equipment, and operating costs for SNEP. 16. Component 2: Water Supply, basic sanitation and hygiene promotion. Water schemes, sanitation facilities, and hygiene promotion activities would be in the approximately 12 communities selected to receive the water schemes. The Project would finance interventions in:  Water Supply : The Project would construct or rehabilitate piped water schemes, as well as boreholes equipped with handpumps, and put in place the professional operator management model. Water would be sold based on volume consumed through household connections and kiosks, at tariffs that would at a minimum, cover routine O&M costs. The Project focused on supporting SNEP in small towns of 1,000 to 10,000 people. Preliminary designs, social mobilization and supervision of works would be provided by an engineering firm throughout project implementation;  Household Sanitation: The IDA Grant included financing for household latrine construction, including a subsidy, whereas the SPF grant specifically excluded any direct financing or subsidy for household latrines. Both grants would support activities to promote demand for household latrines. SPF would also finance training for local masons in household latrine construction; 5  Institutional Sanitation: Both grants would support the construction of ‘’ latrine blocks ’’ or blocs sanitaires 5 in schools and health centers;  Hygiene Promotion: The service provider (private firm or NGO) in charge of sanitation activities would also conduct hygiene promotion campaigns in the project communities. The SPF application specified that this should include training for teachers, women leaders, water committee members, and the community organizations participating in the CDD project. 1.6 Revised Components 17. Change in national sanitation strategy. With the creation of DINEPA came a new sanitation strategy which prohibited household latrine subsidies, encouraging households to build, use and maintain their own sanitation facilities, through the development of various incentive mechanisms, awareness and education campaigns and training of local masons. This strategy had been under discussion and preparation since at least 2008 and explains why the SPF Grant did not follow the IDA Grant component in subsidizing household latrines. The household latrine construction aspect of the Project was dropped, and the focus shifted to the construction of institutional latrines, as well as to hygiene and sanitation promotion. 18. COPRODEPs. The first restructuring, approved in December 2010, changed the SPF capacity building component by eliminating the proposed training to prepare COPRODEPs to establish water and sanitation sub-committees for their councils and prepare communal water and sanitation investment plans. COPRODEP funding was dropped in order to align the Project with the new institutional structure for the sector which did not assign investment planning responsibilities to the COPRODEPs. Rather, CAEPAs and the regional offices of the new DINEPA were supposed to cooperate in planning and procuring water and sanitation investments, as well as promoting household sanitation. 1.7 Other significant changes 19. Other significant changes included:  SPF Funding. The SPF funding was approved two years after the IDA Grant was appraised, and came with a slightly different development objective, as well as additional indicators;  Change in implementing agency, from SNEP to DINEPA. The 2010 restructuring approved the change in the project implementing agency, resulting from the new law in 2009 creating DINEPA, but the transition led to delays in implementation;  Forego counterpart-funding. The January 2010 earthquake made government financing difficult and the requirement to provide US$250,000 in counterpart funding was foregone. This did not affect the achievement of the PDO;  Change in Results Framework to consolidate monitoring for IDA and SPF financing. This change was part of the 2010 restructuring, and is further described in Section 2.3;  No-cost extension of project closing. The World Bank approved a no-cost extension to the SPF Grant twice, to December 31, 2012 and November 30, 2013, respectively, to allow works to be completed. The completion of water supply and sanitation works had been delayed by: (i) natural disasters and the cholera epidemic; (ii) administrative delays from an extensive sector reform, and change in management of DINEPA; and (iii) political instability. The closing date extensions contributed to the achievement of project targets. 5 A bloc sanitaire is a concrete structure with toilets and basic water supply fixtures in two compartments, one for men/boys and one for women/girls. 6 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design, and Quality at Entry 20. The project design for water supply drew on the positive experience of Bank projects in Madagascar and Rwanda supporting new management models for piped water schemes, including service delegation to a local private operator by the beneficiary community through a lease contract as well as the Haiti LICUS Project. Given that the LICUS Project was quite limited (3 schemes), this project was basically designed to test the management model at a larger scale. 21. The new management model for piped water schemes was fully in line with the sector reforms that were under discussion during project preparation and enacted during project implementation. The government decision to seek an alternative management solution with professional operators was based on the deteriorating performance of the community management of piped water schemes as revealed by a national sector diagnostic and analysis carried out by the Government in 2005. 22. The IDB had prepared a similar project (approximately US$15 million) in three adjoining departments, which was approved in September 2006. Both projects were designed to use the same implementing agency, operational manual and coordinator. 2.2 Implementation 23. The Project was financed by two sources, namely a SDR3.4 million IDA Grant (P089839) approved in December 2006 and a complementary US$5 million SPF Grant (P114936) approved in November 2008. The first phase of implementation was dedicated to feasibility studies and social mobilization activities prior to construction and rehabilitation of water systems. 24. The new management model for water supply with professional operators proved promising. Two reasons that communities accepted the professional operators were: (i) the role given to communities in selecting their operators, and (ii) the operators being members of the community. The initial planning did not include sufficient resources for social mobilization after construction, as capacity-building for professional operators and CAEPAs, but this deficiency was eventually corrected during implementation. Despite the communities expressing general acceptance of the new model in public meetings, several factors can explain resistance in the first years of implementation:  An indirect consequence of the earthquake, bringing in a number of organizations providing free services as relief, which in turn had a negative impact on community attitudes toward a management model based on paying for water according to volumes consumed;  Some local politicians campaigned on promises to reduce the tariff or provide free water; and  The professional operators lacked clear directives and support from DINEPA or the mayors regarding disconnection of water services due to nonpayment. Furthermore, recruitment of operators was initially slowed down by the lack of interest from the private sector (firms), and the approach had to be reformulated to focus instead on local candidates. 25. The selection procedures for communities also worked well, but it was noted that some aspects needed to be improved such as: (i) how to accommodate the demand and interest from initially reluctant communities, as they watch implementation proceed in the selected communities, and (ii) how to integrate water source protection activities and incentives into the model. 7 26. The engineering firm implemented social mobilization activities prior to construction, 6 and SNEP/DINEPA provided capacity-building support to the CAEPAs and professional operators during and after construction. In addition, the Project recruited an international consultant to support the professional operators and the then German Development Service (DED) provided technical assistance to support operator training and CAEPA capacity-building. 27. The Project was strategically restructured in 2010 to simplify and update the results framework as well as to adapt to DINEPA’s new sanitation strategy. The Project shifted from household latrine subsidies to institutional latrine construction as well as hygiene and sanitation promotion. Procurement delays in selecting the firm in charge of the sanitation activities also limited the construction of institutional latrines in only a portion of the communities served by the water schemes. 28. Other factors affecting implementation:  Natural disasters and epidemics: Hurricanes, the 2010 earthquake and the subsequent cholera epidemic required government agencies to place priority on emergency activities. This led to a considerable amount of project funding being reallocated to emergency responses. Additionally, some local construction firms had suffered losses or had demobilized following these events;  Passage of the 2009 Water Framework Law: The transfer of staff and authority from SNEP to DINEPA delayed project implementation. The final transfer of authority and amendment of subsidiary agreements were completed in March 2011. Political uncertainty in Haiti exacerbated this problem. 29. It is important to note that, despite the natural disasters, cholera epidemic and political instability, DINEPA ’s institutional response was strong and maintained the project on track throughout implementation. 2.3 Monitoring and Evaluation (M&E) Design, Implementation, and Utilization 30. The system for monitoring construction and activity implementation functioned adequately. This system comprised reports from the implementing agency and frequent World Bank supervision missions. However, the system for monitoring PDO and intermediate results suffered from a number of indicators impractical to measure over the life of the project, overly ambitious initial targets, as well as the initial lack of harmonization between the different indicators for the IDA and SPF results frameworks. 31. M&E Design. The M&E design suffered from two main problems: (i) separate sets of indicators for the IDA, SPF, and IDB financing of the program; and (ii) poorly defined indicators in some cases. Initial project design planned for consultants to design and implement surveys to collect most of the required data, offering little prospect for putting in place a sustainable M&E system. 32. M&E Implementation. The 2010 project restructuring allowed harmonization of the results framework from the different sources of financing, consolidating targets and simplifying monitoring arrangements. The revised framework was more pragmatic and indicators were more easily measurable and relevant to the reality on the ground. No indicators for institutional sanitation were included, despite this becoming the major focus of the sanitation and hygiene promotion activities. The Results indicators were also aligned to the Bank’s core sector indicators in 2010 and targets were revised, at a time when the first waterworks had been completed, and sanitation activities had not yet started. Also, DINEPA had plans to develop a sector M&E system with which the project ’s system would be aligned. Despite the initial 6 Consulting communities on their acceptance of the management model based on payment by volume and a professional operator, and forming CAEPAs. 8 problems with the design and lack of clarity on some results indicators (for example “Percent of target audience receiving training on hygiene and sanitation in communities” ), the M&E design had no negative impact on project implementation. 33. The final figures for the PDO- and intermediate-level indicators were agreed upon by the DINEPA Coordinator and ICR Team based on a review of information gathered in supervision missions and the hygiene and sanitation consultant reports, supplemented by the Coordinator’s first -hand knowledge of the schemes and interactions with the various professional operators. 34. M&E Utilization. Information on progress from reports and supervision missions was closely reviewed and used to take actions to deal with implementation delays. Data on the various results indicators were systematically used to inform decision-making or resource allocation in the course of the Project. 2.4 Safeguard and Fiduciary Compliance 35. Safeguards. The Project triggered the safeguard policies on environmental assessment, natural habitats, and cultural property, and was classified as Category B. An Environmental Assessment report and an Environmental and Social Management Framework were prepared. In December 2009, the environmental management frameworks for the IDA, SPF and IDB projects were consolidated. The implementation of potential environmental and social impacts mitigation measures which, for all sub- projects were only minor, went well, but overall safeguards compliance was rated “ Moderately Satisfactory ” as monitoring and documentation were not performed systematically. 36. The main environmental concerns were to: (i) protect the catchment area and source from pollution and degradation; (ii) select scheme sites that were safe from flooding, washouts and landslides; (iii) control wastage of water water points; (iv) mitigate pollution, nuisance and accidents during construction; and (v) take proper measures in case of archeological discoveries and in protected areas. To address these concerns, each feasibility study had to include an environmental management plan. DINEPA’s environmental safeguards monitoring capacity throughout implementation depended heavily on the engineering firm which developed the feasibility studies. No dedicated DINEPA environmental specialist was in place. 37. A December 2011 supervision mission noted a number of environmental issues, namely: (i) lack of protection of areas around the source in Arniquet and Cavaillon; (ii) inadequate drainage around the kiosks and standposts; (iii) faucets left continuously open at some standposts, exacerbating the drainage problem; and (iv) guidelines on latrine location were not disseminated. These issues were later fixed and helped to improve the remaining works financed under the Project. Completed works throughout the Project also did not interfere with natural habitats or physical cultural resources. 38. DINEPA’s capacity in monitoring the Project’s social aspects was adequate. The I nvoluntary Resettlement policy was not triggered and no specific problems were identified, but documentation of resolved issues, such as negotiating the price of water with residents living close to water sources, was not systematically performed and was done on an ad-hoc basis. 39. Fiduciary Compliance. Financial management was rated “ Moderately Satisfactory ” throughout the project period. The problems affecting the management of project funds included: (i) continued use of Excel, rather than the DINEPA financial accounting software (ACCPAC), due to technical problems; (ii) late submission of audit reports; (iii) budget management based on the global allocation of annual funds to the project, rather than a budget for the estimated cost of implementing activities; and (iv) a delay in the bank account reconciliation. In addition, a 2011 supervision mission observed that professional operators 9 needed more training in financial management. Procurement was also rated “ Moderately Satisfactory ” throughout project implementation, mainly due to delays related to the preparation of bidding documents. 2.5 Post-Completion Operation/Next Phase 40. A key goal of the Project was to introduce a new water management model based on professional operators, which will have greater prospects for sustainable water services. A new project (estimated US$30 million) is under preparation, which will build on the lessons learned from the implementation of this model and expand to other regions of Haiti, particularly in zones affected by cholera. Additionally, the World Bank, through the Water and Sanitation Program (WSP) financed a study tour to Benin so that stakeholders could learn from the implementation of a national strategy for supporting private operators for rural water supply. The new operation will seek to include the main findings from the Benin trip and adapt them to the Haitian context, including: (i) gradually decentralizing planning and execution to local government levels; and (ii) preparing the WSS sector for a shift from a project approach to a programmatic approach. A budget support operation 7 with inputs for the water sector will also strengthen the enabling environment for the project. A similar World Bank-assisted budget support operation in Benin in the early 2000 ’ s was instrumental in laying the foundation for the expansion of private operators for rural piped schemes. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation Rating: Substantial 41. Increased access to improved water supplies and basic sanitation remain priorities, especially given the Bank’s interest in contributing to the elimination of cholera from Haiti. The PDO-level indicator for water services began with the dual goals of increasing access and sustainability, but it was eventually reinterpreted to focus on access. The thrust of the Project, however, was to put in place a management model that would deliver sustainable water services. 42. Although the PDO related to sanitation was successfully achieved, the strategy and approach toward sanitation proved more challenging, given DINEPA ’s change in sanitation strategy during project implementation which ruled out household latrine subsidies. As a result, a stronger emphasis was given to institutional over household sanitation, and hygiene and sanitation promotion were implemented on a smaller scale than originally planned. 43. Water and sanitation remain highly relevant to Haiti’s current development priorities, as indicated in t he Government of Haiti’s Strategic Development Plan (PSDH) to become an emerging country by 2030 and 3-year investment plan for 2014-2016. Additionally, by increasing access to drinking water and sanitation, the Project’s objectives are consistent with the current World Bank Group’s I nterim Strategy Note for Haiti FY13-FY14 (Report # 71885-HT) discussed by the Executive Directors on September 27, 2012, particularly with regards to reducing Haiti’s vulnerability to cholera. The Project also supports the World Bank’s twin goals of reducing po verty and promoting shared prosperity, as reflected by its objective of increasing access to basic services in rural areas where the highest poverty levels are still found. 7 Haiti Reconstruction Fund (HRF) Grant for Strengthening Governance in Education and Water Sectors (P147166). 10 3.2 Efficacy Rating : Substantial 44. Increased access to water supply services. The Project has successfully increased access to water services in participating rural communities, by providing 59,367 people with access to improved water supplies in 15 communities. This corresponds to a 116 percent target achievement. Additionally, 8 piped systems were rehabilitated, 4 piped systems were constructed, and 3 communities were served with a total of 8 handpumps. This corresponds to a 137 percent target achievement. 45. Increased level of service. As a result of the Project, 1,598 new piped household water connections were installed and 159 improved community water points were constructed or rehabilitated. Over 20 percent of the households in the project area now have a private connection to the water network, compared with 8 percent in 2008. This also favorably compares with the rural proportion of Haitians with a household connection to a piped system (5 percent in 2011). 8 Additionally, an evaluation of project results estimated that the average water consumption at household connections was 30 liters of water per capita per day (lpcd) and 19 lpcd at kiosks. For this consumption, households paid between 150 and 250 gourdes per month (between US$3.50 and 5.75 per month), a rate which allows operators to cover operating and maintenance costs. 46. Sustained quality of drinking water. As a result of the Project, every drinking water system constructed or rehabilitated under the Project is equipped with a chlorinato