The World Bank Water and Sanitation in Tourist Areas (P054221)
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- Camilla Kelly
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1 Public Disclosure Authorized Public Disclosure Authorized The World Bank RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF WATER AND SANITATION IN TOURIST AREAS APPROVED ON APRIL 2, 2009 TO THE DOMINICAN REPUBLIC REPORT NO.: RES29512 Public Disclosure Authorized WATER GLOBAL PRACTICE LATIN AMERICA AND CARIBBEAN REGION Public Disclosure Authorized Regional Vice President: Country Director: Senior Global Practice Director: Practice Manager/Manager: Task Team Leader: Jorge Familiar Calderon Tahseen Sayed Khan Guang Zhe Chen Rita E. Cestti Marco Antonio Aguero
2 ABBREVIATIONS AND ACRONYMS AOB: APL: CMU: CORAAPPLATA: DDO: DR: EA: GP: IBRD: ICR: ID: IP: ISR: MEPYD: MS: OP/BP: PASCT: PDO: Absence of Objection Adaptable Program Loan Country Management Unit Puerto Plata s Water and Sanitation Utility (Corporación de Acueductos y Alcantarillados de Puerto Plata) Deferred Drawdown Option Dominican Republic Environmental Assessment Global Practice International Bank for Reconstruction and Development Implementation Completion and Results Report Project Identification Code Implementation Progress Implementation Status and Results Report Ministry of Economy, Planning and Development (Ministerio de Economía Planificación y Desarrollo) Moderately Satisfactory Rating Operational Policy and Bank Procedures Water and Sanitation in Tourist Areas Project Project Development Objective
3 BASIC DATA Product Information Project ID P Original EA Category Full Assessment (A) Approval Date 02-Apr-2009 Financing Instrument Investment Project Financing Current EA Category Full Assessment (A) Current Closing Date 31-Mar-2018 Organizations Borrower Dominican Republic Responsible Agency Unidad Ejecutora del PASCT,Ministerio de Economía Planificación y Desarrollo (MEPyD) Project Development Objective (PDO) Original PDO The objectives of the first phase of the proposed APL (the Project, APL I) are: (i) strengthening and consolidating the policy framework of the water and sanitation sector in the Dominican Republic; (ii) improving and expanding access to sanitation and wastewater treatment and disposal services in the Puerto Plata region; (iii) improving the financial and operational performance of CORAAPLATA, the regionâ s water utility; and (iv) enhancing operational and commercial performance of other regional utilities and preparing them to participate in the second phase of the Program (APL II). Summary Status of Financing Ln/Cr/Tf Approval Signing Effectiveness Closing Net Commitment Disbursed Undisbursed IBRD Apr Sep Feb Mar Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No
4 I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Project Status 1. The US$27.5 million IBRD loan was approved on April 2, 2009 and was declared effective on February 25, The current closing date is March 31, The Project has retained the IP and DO ratings of Moderately Satisfactory (MS) over the past three ISRs, which reflect a positive progress on achieving the PDO and its indicators. At present, the PDO and IP ratings, as well as ratings for all other components are rated "MS" or higher. 3. Since the last extension granted in June 2017, disbursements have improved and now stand at 96 percent, up from percent in June 2017, and all loan proceeds have been committed. As of November 13, 2017, a total of US$ 1.07 million still needs to be disbursed by the end of June The remaining funds are allocated to the two ongoing construction contracts: (i) the Submarine Outfall in Puerto Plata, and (ii) the Pretreatment Plant and Sewerage of Neighboring Areas. Project works are in the final stage, and the project is expected to be fully completed before the closing date. The Project has also contributed to improve the commercial and financial performance of the three utilities participating in the Project. It is worth highlighting the progress in the implementation of the Single Treasury Account for this Project, selected as part of a pilot for projects financed with external resources; this implementation continues to proceed smoothly without slowing down the execution of the Project. B. Rationale for Restructuring 4. As expressed in the Government's restructuring request of October 25, 2017, the Dominican Republic Water and Sanitation in Tourist Areas Project (Loan No DO) and the water sector in general, have a high priority in the national agenda, and it is of the authorities best interest to complete the project in a satisfactory manner. The Government has requested to adjust the PDO and results framework, by removing all references related to the APL instrument. Delays during the early stages of the project implementation, forced the client to drop the second phase of the APL, deciding to prioritize efforts to complete the designs and infrastructure works of the submarine outfall and the wastewater pretreatment plant, as they are key to the Project s success. 5. The proposed Level II restructuring complies with the Articles of Agreement of the Bank, and with the updated OP/BP 10.00, where all World Bank investment instruments are now consolidated Investment Policy Financing
5 (IPF). The Bank is also not contemplating a follow-up operation for the current project as it was envisaged in the original APL. In addition, if the PDO would remain unchanged, it could potentially downgrade the Project s performance, despite the good progress made to date. Notwithstanding the above, the team is proposing to remove the APL references in the PDO and Results Framework, to allow a clear alignment of the Project s objectives and results to the current policy, at the same time reflecting the Project s priorities, which progress can now be accurately evaluated through the Implementation Completion and Results Report. 6. DESCRIPTION OF PROPOSED CHANGES 6. The current PDOs are: i) strengthening and consolidating the policy framework of the water and sanitation sector in the Dominican Republic; (ii) improving and expanding access to sanitation and wastewater treatment and disposal services in the Puerto Plata region; (iii) improving the financial and operational performance of CORAAPPLATA, the region s water utility; and (iv) enhancing operational and commercial performance of other regional utilities and preparing them to participate in the second phase of the Program (APL II). Associated with above numeral (iv), the current Results Framework also includes references to the APL II related to preparation activities for the APL II. 7. The proposed restructuring would entail specifically a change in the PDO s fourth objective: (iv) enhancing operational and commercial performance of other regional utilities and preparing them to participate in the second phase of the Program (APL II). The team is recommending to remove the reference related to the APL II in objective number iv as well as the associated references in the Loan Agreement and the Results Framework. The proposed revised PDO for the fourth objective would read as follows: iv) enhancing operational and commercial performance of other regional utilities. The remaining objectives at the PDO level remain unchanged. 8. The last Intermediate Outcome Indicator (vii) of the Results Framework has also been revised to remove all references to the APL instrument. The original intermediate outcome indicator was defined as: 70% of loan committed and 50% disbursed by the expected start of APL II, and the proposed indicator would read as follows: project successfully implemented in targeted utility. 9. The proposed restructuring fully complies with OP/BP as: (a) the Project is not subject to suspension of disbursements; (b) the Borrower does not have any outstanding audit reports nor there are audit reports, which are not satisfactory to the Bank; and (c) no additional safeguards will be triggered.
6 II. SUMMARY OF CHANGES Changed Change in Project's Development Objectives Not Changed Change in Results Framework Change in Implementing Agency Change in DDO Status Change in Components and Cost Change in Loan Closing Date(s) Cancellations Proposed Reallocation between Disbursement Categories Change in Disbursements Arrangements Change in Disbursement Estimates Change in Systematic Operations Risk-Rating Tool (SORT) Change in Safeguard Policies Triggered Change of EA category Change in Legal Covenants Change in Institutional Arrangements Change in Financial Management Change in Procurement Change in Implementation Schedule Other Change(s) Change in Economic and Financial Analysis Change in Technical Analysis Change in Social Analysis Change in Environmental Analysis
7 PDO_IND_TABLE The World Bank IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_PDO_TABLE PROJECT DEVELOPMENT OBJECTIVE Current PDO The objectives of the first phase of the proposed APL (the Project, APL I) are: (i) strengthening and consolidating the policy framework of the water and sanitation sector in the Dominican Republic; (ii) improving and expanding access to sanitation and wastewater treatment and disposal services in the Puerto Plata region; (iii) improving the financial and operational performance of CORAAPLATA, the regionâ s water utility; and (iv) enhancing operational and commercial performance of other regional utilities and preparing them to participate in the second phase of the Program (APL II). Proposed New PDO The objectives the Project are: (i) strengthening and consolidating the policy framework of the water and sanitation sector in the Dominican Republic; (ii) improving and expanding access to sanitation and wastewater treatment and disposal services in the Puerto Plata region; (iii) improving the financial and operational performance of CORAAPPLATA, the regional's water utility; and (iv) enhancing operational and commercial performance of other regional utilities. OPS_DETAILEDCHANGES_RESULTS_TABLE RESULTS FRAMEWORK Project Development Objective Indicators Setting-up of the Water Sector Council Unit of Measure: Yes/No Value No Yes Yes No Change Date 14-May May Mar-2018 Development and adoption by the Water Sector Council of a National Strategy for the WSS sector Value Partially met: a strategy was developed with Project financing, but was not officially Strategy developed No WSS has been adopted by the Water and adopted by the developed Sector Council (given that Water Sector Council passing the Water Law No Change was deemed as a necessary condition to adopt it). A new
8 sanitation strategy is currently under review by the Water Council and will likely be approved. Date 14-May May Mar-2018 Consumers that receive access to improved or new sanitation and to wastewater treatment and disposal services in the Puerto Plata region Value ,000 No Change Date 14-May May Mar-2018 Consumers that receive access to network sanitation in the Puerto Plata region Breakdown Value ,000 No Change Date 14-May May Mar-2018 Percentages of consumers and hotels that are connected to the sanitation network in Puerto Plata Value 60% for consumers and 80% for consumers Data under preparation No Change 50% for hotels and 70% for hotels Date 14-May May Mar-2018 CORAAPPLATA has identified 100% of its potential consumers and has made operational an active registry of at least 40,000 users, covering at least 60% of its operational areas Value No cadastre was No Change available Partially met: CORAAPPLATA has identified 100% of potential consumers, current active registry CORAAPPLATA has identified 100% of its potential consumers and has made operating an active
9 increased from 8,200 to 16,100 connections (from approx. 27,000 people to 53,000, assuming 3.3 people/household - see ONE Censo 2010) registry of at least 40,000 users, covering at least 60% of its operational areas The CORAA's commercial system is now operated under a contract by a private firm (AAA). Goal will be likely met during 2017, but not at project closing date. Date 14-May May Mar-2018 Compliance agreements have been signed on improving of cadastre, commercial systems, administrative and financial systems of CORAAPPLATA, CORAAMOCA and COAAROM, as well as an sewerage systems O&M stre Value Partially met: compliance Compliance agreements with the agreements have been three CORAAs have been signed on improving of signed, but have not cadastre, commercial been monitored or systems, No compliance enforced. Nevertheless, administrative and agreement or sewerage this has not affected financial systems of O&M strengthening their performance. The No Change CORAAPPLATA, program has been strengthening program CORAAMOCA and signed or developed. for sewerage O&M with COAAROM, as well as CORAAPPLATA is under an sewerage systems preparation and is O&M strengthening expected to be in place program for by project closing. CORAAPPLATA Date 14-May May Mar-2018 Intermediate Indicators IO_IND_TABLE Completion of business and modernization plans for regional utilities
10 Value Business and Business and N/A modernization plans modernization plans No Change completed completed Date 14-May Nov Mar percent of consumers are connected to network sanitation in Puerto Plata. Value 60% Partially met: almost 100% in the city center of Puerto Plata and 60% of consumers are connected to networks in the PP area. 80% No Change Date 14-May Nov Mar percent of the occupancy capacity of hotel in the Puerto Plate region are connected to communal sanitation networks. Value 50% Data being gathered by CORAAPPLATA, but target likely not to be met by project closing. The largest hotel complexes will not be connected to CORAAPPLATA's network, but rather to either their own private sewerage systems or shared networks. 70% No Change Date 14-May Nov Mar-2018
11 Cadastre operational Value N/A Cadastre operational Cadastre operational No Change Date 14-May Nov Mar-2018 Metering coverage reaches 12% of all consumers in CORAAPPLATA Metering coverage has reached 26% of all domestic users and 100% of large consumers in CORAAPPLATA YR1 5%; YR2 4%; YR3 Value 3% operational areas. 4%; YR4 12% Target Metering has improved revised during last No Change significantly under rrestructuring) project financing as well as under the delegation contract with a private operator (AAA). Date 14-May Nov Mar % of domestic and 60% of hotel sector consumers are 'Satisfied' or 'Highly Satisfied' with CORAAPPLATA performance based on results from consumer satisfaction surveys Value Customer survey not yet No particular target N/A No Change started as per restructuring Date 14-May Nov Mar-2018 The project was succesfully implemented in targeted utility
12 Value N/A Most likely to be implemented successfully; to date 3 utilities have been supported through the project, CORAAPPLATA. COAAROM and CORAMOCA. Project successfully implemented in targeted utility. Date 14-May Nov Mar-2018 Revised
13 Note to Task Teams: End of system generated content, document is editable from here.
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