Document of The World Bank

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank IMPLEMENTATION COMPLETION REPORT (CL-44250) ON A LOAN/CREDIT/GRANT IN THE AMOUNT OF U$ MILLION TO THE ROMANIA FOR A ROMANIA CULTURAL HERITAGE PROJECT June 21, 2005 Report No: 32488

2 CA Country Assistance trategy ECA Europe and Central Asia GOR Government of Romania LIL Learning and Innovation Loan MOPF Ministry of Public Finance PIU Project Implementation Unit WMF World Monuments Fund CURRENCY EQUIVALENT (Exchange Rate Effective March 2005) Currency Unit = Lei 1 Leu = U$ 0037 U$ 1 = 27,000 Lei FICAL YEAR January 1 December 31 ABBREVIATION AND ACRONYM Vice President: Country Director ector Manager Task Team Leader/Task Manager: higeo Katsu Anand K. eth Benoit Paul Blarel Thomas A. Blinkhorn

3 ROMANIA ROMANIA CULTURAL HERITAGE PROJECT CONTENT Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 4 5. Major Factors Affecting Implementation and Outcome 7 6. ustainability 8 7. Bank and Borrower Performance 9 8. Lessons Learned Partner Comments Additional Information 12 Annex 1. Key Performance Indicators/Log Frame Matrix 13 Annex 2. Project Costs and Financing 14 Annex 3. Economic Costs and Benefits 16 Annex 4. Bank Inputs 17 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 19 Annex 6. Ratings of Bank and Borrower Performance 20 Annex 7. List of upporting Documents 21 Annex 8. Borrower's Evaluation Report 22

4 Project ID: P Team Leader: Thomas Blinkhorn Project Name: ROMANIA CULTURAL HERITAGE PROJECT TL Unit: ECD ICR Type: Core ICR Report Date: June 21, Project Data Name: ROMANIA CULTURAL HERITAGE PROJECT L/C/TF Number: CL Country/Department: ROMANIA Region: Europe and Central Asia Region ector/subsector: Other social services (94%); Central government administration (6%) Theme: Participation and civic engagement (P) KEY DATE Original Revised/Actual PCD: 08/19/1998 Effective: 02/11/ /11/1999 Appraisal: 08/20/1998 MTR: 04/16/ /12/2002 Approval: 12/23/1998 Closing: 12/31/ /31/2004 Borrower/Implementing Agency: Other Partners: GOVERNMENT OF ROMANIA/MINITRY OF CULTURE World Monuments Fund; Local governments;communities TAFF Current At Appraisal Vice President: higeo Katsu Johannes F. Linn Country Director: Anand eth Andrew N. Vorkink ector Manager: Benoit Paul Blarel Kevin Cleaver Team Leader at ICR: Thomas A. Blinkhorn Thomas A. Blinkhorn ICR Primary Author: Thomas A. Blinkhorn 2. Principal Performance Ratings (H=Highly atisfactory, =atisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, U=ubstantial, M=Modest, N=Negligible) Outcome: ustainability: Institutional Development Impact: Bank Performance: Borrower Performance: L M QAG (if available) Quality at Entry: Project at Risk at Any Time: Yes ICR

5 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The objective of the project was to assist the Borrower in: (i) preserving priority cultural heritage sites and objects; and (ii) developing a new national partnership strategy for the cultural sector by testing different approaches with a view to improving its overall management. The objective needs to be considered against the backdrop of Romania s economic and social milieu in the late 1990s, almost 10 years after the country had secured independence from Communist dictatorship. A seriously constrained fiscal situation, with competing demands for scarce public resources, dominated the national agenda. Government officials were increasingly concerned about the deteriorating state of the country s rich cultural patrimony. Cultural assets were in serious disrepair due to lack of public financing and years of neglect. In the circumstances, the Government decided that the historic central role of the state in cultural heritage management needed to be supplanted with new partnership models involving the private sector, international donors, organized community groups and civil society at large. To help formulate a new strategy in this regard, Government requested Bank assistance through a Learning and Innovation Loan to test different approaches. The overall objective remains appropriate. It reflected the importance that Romania attaches to cultural heritage as an essential ingredient for preserving unique national identity during a period of dramatic social and economic transition. The objective also supported a key goal of the Bank s country assistance strategy at the time: To help Romania rationalize the role of the state by strengthening public institutions, fostering partners in the private sector and building local capacity through community mobilization and competitive tendering processes. The flexibility of the Learning and Innovation Loan (LIL) was, in retrospect, well suited to help achieve the overarching objective. The project s co-financing partner, the World Monuments Fund (WMF), participated for the first time in a Bank lending operation, contributing initially $600,000 and eventually much more in grant funding; its involvement helped attract other European partners during the project s life thus providing greater international recognition of, and support for, Romania s patrimony. Community mobilization at historic axon village pilot sites in Transylvania and elsewhere has produced significant income-generating opportunities for some of the country s poor, ethnically-diverse areas through revival of cultural-based tourism. Public institutions at local and national levels have been strengthened through the project s requirements for transparency and accountability in procurement and financial management of project-related activities. The project has also complemented other Bank and donor support for Romania through rural development and social investment fund initiatives. 3.2 Revised Objective: The original project objectives were not revised. At Government request, the Loan Agreement was amended six times to clarify the project description, extend project scope within the original objectives and reallocate Loan proceeds, in light of implementation experience; operating costs were added to categories eligible for financing. The amendments included two extensions of the original Closing Date, December 31, 2002, for one-year periods each, to December 31, Original Components: The project included the following components: (a) Brancusi culptural Ensemble (U$3.7 million total cost, appraisal estimate). This component helped to restore and refurbish one of Romania s most revered artistic complexes, designed by the internationally acclaimed Romanian sculptor Constantin Brancusi, who was born near the Tirgu Jiu complex site, which is northwest of Bucharest, the capital city. The investment, supported financially and with technical assistance by the World Monuments Fund, involved highly specialized restoration activities, including renovation of the Endless Column, Gate of the Kiss, Alley of the tools, Table of - 2 -

6 ilence as well as site management planning and landscaping. International competitive bidding for restoration work on the Endless Column resulted in savings of about U$1.0 million compared to the appraisal estimate. (b) Brancovan Palaces ($1.8 million). The project helped complete restoration of two 18th century Brancovan palaces: one at Mogosoaia, involving entrance hall and interior renovation, landscaping, reconstruction of an historic greenhouse, completion of a nearby cultural center along with preparation of a site development plan; the second at Potlogi, involving emergency repairs to the roof, gutters, windows to prevent further deterioration. Both palaces are located a relatively short distance from Bucharest and are envisioned as part of a future historic and cultural tourism itinerary. The Mogosoaia complex has become a dynamic center for cultural events of all kinds; its fees now cover most of the facility s annual operating costs. (c) Transylvania axon Villages (U$0.4 million). This component tested pilot efforts in selected historic villages in Transylvania to determine options for sustaining cultural heritage preservation and promoting social and inter-cultural cohesion through new income-generating opportunities arising from tourism, infrastructure improvements, craft development and related activities. ocial assessments and community impact studies were conducted before and during project implementation to help ensure an optimum degree of community consultation and decision making. The area has seen significant increases in cultural tourism and has attracted technical and financial support from government and non-governmental agencies in the United Kingdom, Germany, Netherlands, Luxembourg, Denmark. (d) Institutional trengthening (U$1.0 million). upport was provided for (i) capacity building in the new project implementation unit in the Ministry of Culture, (ii) formulation of an improved, long-term national cultural heritage partnership strategy which, among other things, included legislative reforms and implementation of a computerized national cultural heritage inventory. 3.4 Revised Components: At Government request, the Bank agreed to modify the original project description to include additional priority restoration works consistent with the project objective and for which feasibility studies and initial approvals had already been secured. These additional works were not included originally because it was felt at the time that they could not be completed satisfactorily within LIL financing parameters. As it turned out, work on the major project component, the Brancusi ensemble, was completed at significantly reduced cost (about U$1.0 million) thanks to international competitive bidding. These savings helped to finance the additional priority activities along with the necessary financial Government contribution. The additional activities included historic structures involving a total estimated cost of U$1.5 million: Miclauseni Castle (Iasi county), ighisoara Blacksmith Tower (Mures county), ibiu House of Arts (ibiu county), Calnic Tower (Alba county), Tisa wooden church (Hunedoara county) and acalu wooden church (Mures county). ome additional financing was also provided for projects in the axon villages and for elaboration of the national inventory. Again at Government request, the project closing date was extended twice, to December 31, 2004, to enable satisfactory completion of project works (both original and new activities) that had already been initiated or were underway at the time of the original closing date. Delays were occasioned by a variety of factors including additional time required for internal government review and approvals, formulation and approval of the Brancusi Endless Column and landscaping design by the World Monuments Fund and the Bank. For example, early in the project execution process, disagreement emerged within the cultural restoration community, Romanian and international, about the precise nature of the deterioration of the Brancusi Endless Column and appropriate strategies for addressing that deterioration. The World Monuments Fund assembled a team of Romanian-international specialists at - 3 -

7 its (WMF) expense to review all analyses and formulate an agreed restoration strategy/program. This took much more time than was originally envisioned. In addition, changes in management and staffing in the project implementation unit as well as changes in key government ministries following a national election resulted in implementation delays. 3.5 Quality at Entry: Quality at entry is rated marginally satisfactory. There were a number of excellent elements in the original design, but other parts could have been strengthened while still others required more detailed professional examination. The project objective was consistent with the Government s development agenda and the Bank s country assistance strategy. The project design benefited significantly from close collaboration with other organizations experienced in cultural preservation such as the World Monuments Fund and the Council of Europe. The project design and institutional configuration also drew on lessons learned from other Bank-financed cultural heritage activities in nearby countries i.e. the Institutional Development Fund grant for Vilnius, Lithuania; preparation of the Georgia Cultural Heritage project. The Bank s Quality Assessment Group did not assess the project s quality at entry. The project appraisal document realistically highlighted the significant risks facing the project. These included the pressures of an economy in transition and the understandable tendency of government officials to focus primarily on crisis management rather than longer term improvement of management of cultural patrimony; inexperience in a largely state-controlled society with a Bank operation in a new sector (the Romania culture project was one of the first in the ECA region) that aimed to encourage new private sector partnership opportunities; open consultation at the community level on public policy matters relating to cultural heritage preservation. The appraisal document also flagged, again realistically, potential controversial aspects regarding the specialized technical assistance relating to materials to be used in renovating components of the Brancusi sculptural ensemble as well as potentially sensitive social and community issues involved in attempting to foster greater cohesion in the ethnically diverse axon villages. Project design could have been stronger in certain aspects. First, more attention could have been paid to appropriate mechanisms needed to galvanize broad-based community decision making in the pilot axon villages and to best options for transferring funding effectively for restoration and income-generating activities in those villages. This omission resulted in inordinate delays and stop-start implementation practices. The four year projection for implementation also proved to be unrealistic, especially given the pilot nature of the operation and the fact that it was a new sector for the Bank and Government. However, it should be noted that the implementation was also affected adversely by the relatively rapid turnover of managers and staff in the project implementation unit of the Ministry of Culture (4 project managers during the life of the project). The plan for the monitoring and evaluation component was inadequately articulated, resulting in a draft by an international consultant that was less than satisfactory. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: Achievement of the project objective is rated satisfactory. With respect to (i) the preservation of priority cultural heritage sites and objects, this has been realized through: (a) completion of all agreed project activities at the Brancusi Ensemble at Tirgu Jiu, main project component, carried out in collaboration with government (national and local specialists) as well as international experts retained by the World - 4 -

8 Monuments Fund, project co-financing agency; (b) restoration of the Mogosoaia Brancovan Palace outside Bucharest and completion of work to prevent further damage to the historic palace at Potlogi; and (c) restoration and rehabilitation of historic churches and community structures in the axon villages of Mosna, Biertan and Viscri in Transylvania. With respect to (ii) the development of a new national partnership strategy for the cultural sector through the testing of different approaches with a view to improving overall management, this has been achieved in the following ways: (a) key elements of an improved national cultural heritage strategy are in place, including two new laws passed in 2000 regulating management of cultural assets; in addition, (b) a new national cultural inventory, using digital data and customized software, is well underway with assistance from the project. The inventory is another critical element in the overall national strategy and will help enhance overall management of the national patrimony. Based on experience gained through work at the various project sites, carried out in collaboration with local, national and international partners, the Government, particularly the Ministries of Culture and Finance, now appear committed to testing different partnership approaches, including introduction of new user fees, to the preservation of priority cultural sites and assets. This should also help improve overall management in a more sustainable manner. 4.2 Outputs by components: Brancusi culptural Ensemble. This component is rated atisfactory. Despite unexpected delays due to internal Government approval of various project designs and a protracted dispute between the Government and the main Romanian contractor over the total cost for refurbishing the Endless Column, the output of this component has been satisfactory, and the work was completed in less than one year. Restoration work on the Column and the stone sculptures (Gate of the Kiss, Table of ilence and Alley of Heroes) has been completed to top international standards through the work of local and international specialists and the close collaboration of the World Monuments Fund. Extensive landscaping work has been done and older concrete walkways have been replaced with a softer stone material used in many of Europe's most famous parks and memorial sites; the stone material needs time to set properly and this is covered under the landscaping contract's guarantee period. The entire effort related to the Brancusi ensemble has attracted additional international support for construction of a visitor s center and museum. Tourism is increasing. Brancovan Palaces. This component is rated atisfactory. All restoration work has been completed satisfactorily at the Mogosoaia palace complex outside Bucharest. Project interventions included: restoration of paintings and doors; reconstruction of an 18th century greenhouse; renovation of adjacent park area with stone carvings, hedges, various plantings; sewerage works; endowments for the palace s Villa Elschingen, and a conference center. The palace ensemble and park are now highly valued by the local and international communities who increasingly visit the site and book a variety of cultural and social performances there, as reported by the ensemble management; children from the surrounding area participate regularly in a variety of art and cultural activities sponsored by educational institutes and the Palace administrators. The international diplomatic community in Bucharest also uses the ensemble more frequently for special exhibits, dinners and presentations. Facilities are now almost fully booked for a variety of cultural events, art shows and other activities. Fees charged for these events now cover most of the center s annual operating costs. Emergency repair works at the nearby Potlogi palace have also been completed satisfactorily. The interventions included a new roof, rain gutters, windows and floors. These emergency measures have not only stopped further deterioration of this historic ensemble but have increased the possibility of its becoming an important community and tourism destination along the lines of Mogosoaia. axon Villages. This component is rated atisfactory. Although one of the four original pilot villages, Cincu, had to be dropped from the program because of inadequate project plans, all works at the other villages Viscri, Biertan and Mosna have been completed fully satisfactorily. These works included - 5 -

9 repairs to historic churches and community centers as well as help for village museums. In Viscri, the project financed emergency repairs of the fortified axon church (roof, drains), a axon museum and an information center. In Mosna, emergency interventions were completed on the axon church tower and surrounding fortified walls. In Biertan, the project financed rehabilitation of the community square and facades of surrounding historic houses. Viscri has become a model of what is possible through coordinated effort and strong village leadership. There is growing evidence of increased income-generating activities based on tourism and crafts developments. About 2,500 tourists from Germany, France, Italy and the United Kingdom visited the village during 2004, slightly more than the 2,200 in Roma families in Viscri are actively involved in rural tourism (i.e. bed and breakfasts as well as crafts, such as knitting of socks and sweaters). Biertan also offers good quality rural tourism opportunity; in addition, the village now hosts a research unit for natural pharmaceutical products, using plants grown in the unique micro-climate surrounding the village. A number of European government and non-governmental agencies are now actively working in the region, providing both technical and financial support for community conservation and development. For example, the Mihai Eminescu Trust, under the patronage of Britain s Prince of Wales, is providing help in crafts training and development as well as funding for sanitary facilities in village bed and breakfasts. The World Monuments Fund and the German-based iebenburgishe-achsische tiftung ( Transylvanian axon Foundation) jointly supported repairs to the fortified Evangelical Church in Biertan, providing a total of $140,000 to survey and document humidity problems of the church walls and foundations, to make repairs to the roofing and water collection system, and to restore inappropriate prior interventions. Additional Project Activities. This component is rated atisfactory. even additional project activities, involving restoration of historic structures, were requested by Government and agreed by the Bank to be included in the project: Miclauseni Castle (Iasi county); ighisoara Blacksmith Tower (Mures county); ibiu House of Arts (ibiu county); Calnic Tower (Alba county); Bucharest historic house; Tisa wooden church (Hunedoara county) and acalu wooden church (Mures county). Two of these restoration of the historic wooden churches at Tisa and acalu have been completed in exemplary fashion by Romanian specialists. Restoration of the Calnic Tower (Alba county) as well as the other project interventions have also been completed satisfactorily; the Bucharest historic house was dropped from the project because of the lack of detailed plans and government approvals. The additional project activities, requested by the Government, were financed by savings from the Loan and through Government financial contribution. The savings of about U$1.0 million resulted from successful international competitive bidding for the main works on the Brancusi Endless Column; a Romanian contractor won the bid. The Government was keen to use the savings for priority cultural restoration activities which were not included in the original project description but which had received requisite feasibility studies and international approvals. Institutional trengthening. The overall rating of this component is Modest. The key aspects of this component, relating to the formulation of a national partnership strategy in heritage preservation, including the institution of an inventory of national heritage, have been completed satisfactorily. Two new cultural laws were approved in 2000 to provide an enabling framework for improved management of the country s heritage, including partnership arrangements. The Bank team provided feedback on initial drafts and discussed the overall approach with the Ministry team writing the legislation. Most important, Ministry of Culture officials had contacts with key officials in the Council of Europe in trasbourg who have extensive experience in modern cultural preservation laws and regulations that are common throughout Europe. The Council of Europe provided strategic assistance to the Romanian officials just as they had done earlier in the case of the Georgia cultural heritage project. This assistance, instigated by the Bank, was said to be very helpful. Work on the national inventory of Romanian cultural assets, involving specially developed software and about 75 computers that have been installed in 56 nodes or cultural branches throughout the country, is, by most standards, a model for transition countries in Eastern Europe and has received - 6 -

10 favorable recognition elsewhere. More than 30,000 monument records have already been transferred from the legacy database and about 900,000 more record entries are being installed in the inventory data base by the Institute for Cultural Memory, providing up to date information on Romanian monuments, historic objects, archeological sites, cultural assets of all kinds. This information, to be made accessible publicly via the internet, is regarded as an essential tool for research and education as well as the future management of the country s extensive patrimony. However, less than satisfactory progress has been made in strengthening the project implementation unit in the Ministry of Culture with respect to overall management capacity including monitoring and evaluation capacity. This has been due largely to frequent changes in management and staff of the PIU. Despite these difficulties, the PIU has developed important skills in competitive tendering for important restoration works as well as accounting and coordination of implementation tasks with local communities. This experience has been helpful to other restoration activities supported by other international donors. The public education and awareness campaign never got off the ground beyond an initial feasibility report that focused on limited targets. The original plan for a feasibility study of the use and destination of the National Library building in Bucharest was dropped from the project at Government request. These were relatively less important activities at the time, and the project outcome was not affected adversely by their elimination. 4.3 Net Present Value/Economic rate of return: An estimate for net present value or economic rate of return was not included in the original appraisal mainly because appropriate methodologies for achieving this were not developed at the time. It might have been possible to formulate an initial methodology using proxies for components and activities not easily quantifiable; however, this would have taken more time and cost than were available to teams preparing the first family of Learning and Innovation Loans. 4.4 Financial rate of return: A financial rate of return estimate was not included in project preparation or appraisal since few of the specific project activities were expected to generate revenues quickly or directly. It was hoped, nonetheless, that key project activities would benefit indirectly by stimulating tourism and economic growth in adjacent areas. This is in fact happening (e.g. Mogosoaia, axon Villages). 4.5 Institutional development impact: Modest institutional development has been achieved. Legislative reforms and institution of a new digitized national cultural inventory have effectively established a new framework for the improved management of national patrimony in future. Communities and local officials involved in carrying out the project in Tirgu Jiu, Mogosoaia and the pilot axon villages have benefited from the new transparency and accountability introduced and fostered by the project through careful planning of subprojects, competitive bidding for works and services, greater consultation with a wider group of stakeholders. The project has been less than successful in instituting strong institutional development within the project unit in the Ministry of Culture. This is mainly because of the rapid turnover of managers and staff during the project life. It must be said, however, that the current PIU director, the fourth, has progressed significantly, particularly in helping to instill at local government levels (i.e. Tirgu Jiu and axon Villages) greater understanding and support for community consultation as well as stronger transparency and competitive procedures in the design and execution of civil works. In addition, the PIU director has been called on periodically by her Ministry to help with the management of other donor-financed projects. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: - 7 -

11 One main factor outside government or implementing agency control affecting project implementation and outcome is that tourism development did not materialize as robustly as expected during the early stages of the project. This was due in part to uncertainties resulting from the inherent difficulties, such as macro economic weakness and other social problems, faced by an economy in transition. Also, project implementation was affected by changes in management at the national and local levels following elections. Officials and managers who had been associated with the project preparation and early implementation were replaced by others who knew very little about the Bank, much less the project. 5.2 Factors generally subject to government control: Government support for the Project Implementation Unit has been mixed at best. Recruitment of PIU directors proved to be weak and the directors chosen proved to be too inexperienced. There were frequent turnovers (four directors during the project life). Low salary levels contributed to the problem. More recently, the Ministry of Culture has generally succeeded in giving the PIU the consistent support it needed. Also, the decision of the Ministry of Culture to engage in a protracted dispute over unit prices with the main Romanian contractor for the Brancusi Endless Column even though unit prices had earlier been agreed resulted in inordinate disbursement and other delays. 5.3 Factors generally subject to implementing agency control: The last, and current, director of the PIU is a dedicated, hard-working individual who has been committed to the project s objective and outcomes. However, she has had difficulty in attracting and keeping reliable staff to help with project execution, largely because of inadequate salary levels; this factor, together with others beyond her control, have tended to have an adverse effect on project implementation. 5.4 Costs and financing: At appraisal, total project cost, including contingencies, was estimated to be U$6.9 million over four years with the WB loan contribution of U$5.0 million. The loan was fully disbursed (100%) by the end of the grace period (April 30, 2005); Government counterpart funds as well as the WMF grant were also available, as planned. Additional project activities totaled an estimated U$1.5 million of which about U$ 1.2 was financed from the Bank loan and the rest by the Government. Detailed figures are presented in Annex 2. During the grace period, the Ministry of Culture PIU reported that, due to the recent sharp decrease of the U$, some contracts' guarantees could no longer be paid from the project budget and would be covered from other Ministry funds. 6. ustainability 6.1 Rationale for sustainability rating: The key project investments Brancusi sculptural ensemble; Mogosoaia Brancovan palace; pilot axon village activities are likely to be sustainable, largely because of the broad-based support (international, national and community) that has been generated. Restoration of the Brancusi Endless Column was widely regarded as a signal achievement by most Romanians. The fact that a Romanian contractor, supported by local and international entities, was able to complete the work in record time and in accordance with requisite international standards, has helped revive national pride. Equally important, the Brancusi experience has tended to galvanize local community support to sustain the restored complex through regular maintenance and care, financed in part by local government revenues and tourism fees. Local authorities will need to be particularly vigilant in assuring that such maintenance is provided reliably. The Brancusi component is also regarded as a centerpiece of the cultural heritage preservation work of the World Monuments Fund, which has been promoting its significance and tourism value internationally. imilar broad-based support is evident at the Mogosoaia palace, where expanding cultural programs have - 8 -

12 provided a foundation for new user fees that cover about 80% of the facility s annual operating costs. Increased tourism and broad-based community and European support also help ensure the sustainability of project investments in the pilot villages of Viscri, Biertan and Mosna. These villages have become models for similar developments elsewhere in Transylvania. Benefits of investments in capacity building related to the afore-mentioned activities, as well as to those related to the national cultural inventory, are likely to be sustained, again through broad-based support and the generally positive track record to date. Whether investments in such activities as the Potlogi emergency repairs or some of the additional project activities i.e. wooden churches or capacity building in the Ministry of Culture can be sustainable are open to question. 6.2 Transition arrangement to regular operations: At the time of project closing, no transition arrangements to regular operations had been made with the exception of the new cultural laws which govern all activities in the sector. However, given the importance of cultural heritage to Romania and the strong interest in preserving that patrimony as an essential element of national identity as well as a source of potential tourism, discussions are underway to consider how best to mobilize continued support, possibly to scale up the outcomes of the Cultural Heritage Project through a larger scale intervention that would further address cultural heritage preservation within the context of a more community development framework relying on a bottom-up approach and greater engagement of the civil society. This could be envisaged under a multi sector program rather than a stand-alone cultural operation. 7. Bank and Borrower Performance Bank 7.1 Lending: Performance of the Bank in lending was satisfactory. Given the social and economic context in which the Government requested Bank assistance for cultural heritage development, use of the Learning and Innovation loan proved to be the right kind of instrument at the right time and with sufficient flexibility to respond to perceived needs and priorities in a new sector. The project design was influenced to some extent by the experience from the Institutional Development Fund grant to the city of Vilnius, Lithuania for cultural strategy development as well as from the Cultural Heritage Loan (also a LIL) to Georgia. 7.2 upervision: Bank performance in supervision was satisfactory. Regular supervision missions were fielded during the project s six years of implementation. These missions took place about every six months during 1999 and Missions lasted up to two weeks each and typically comprised three or more members, including foreign and local consultants as well as one or more representatives of the World Monuments Fund. The latter, at its expense, recruited a team of internationally recognized specialists (metallurgy, art historian, sculptors etc.) to advise on the detailed design for restoration of the Brancusi Endless Column and to monitor initial stages of work. The WMF also hired an internationally reputed landscape consulting firm to help design the Brancusi landscaping work in collaboration with Romanian specialists. upervision also adapted to the evolving needs of the Government. 7.3 Overall Bank performance: Overall, the Bank s performance was satisfactory. Given the project s small size and experimental nature, the use of a Learning and Innovation Loan was the best realistic lending option. Engaging a world class co-financing partner with the international experience of the World Monuments Fund also proved to be a fortuitous initiative; it was the first time the WMF had become involved in a Bank-financed project. Given the limited budget support available to Bank teams supervising the LIL, extraordinary efforts were made to secure trust fund resources throughout the life of the project to hire international specialists to aide with the - 9 -

13 work. Borrower 7.4 Preparation: The Borrower s performance in preparation is assessed as satisfactory. Thorough background material had been prepared and there was close cooperation at the time of preparation between the Government and the Bank as well as the World Monuments Fund. Leadership and vision provided by key government officials at the time ensured that the project was responsive to Romania s perceived needs. 7.5 Government implementation performance: Government s implementation performance, though generally satisfactory at the beginning and towards the end of the project, was only marginally satisfactory in between. In the six year implementation period, there were two unsatisfactory ratings by the Bank that were subsequently upgraded to satisfactory. Overall implementation performance was adversely affected by changes of managers and staff of the project implementation agency, occasioned by changes in the leadership of the Ministry of Culture as a result of a national election. This was compounded by a protracted dispute with the main Brancusi contractor over project cost as well as delays by the Ministry of Culture in providing adequate support to the PIU. This was largely rectified during the last year of the project implementation when increased staff salaries were approved. Overall, all project activities were carried out satisfactorily, although two additional years were needed for completion. 7.6 Implementing Agency: Progress of the implementing agency was marginally satisfactory and for a time unsatisfactory. This was due largely to the rather frequent changes in staff and managers, most of whom had no experience with a Bank-financed project. Towards the end, the situation improved because of the commitment and dedication of the current PIU director, who worked diligently despite lack of staff support. Project performance was rated by the Bank as satisfactory during most of the six-year implementation period with the exception of one unsatisfactory rating in 2003 relating to delays in government approvals of essential project activities as well as the execution of key works. The rating was subsequently upgraded to satisfactory. The project financial statements have been audited annually by independent auditors. The audit report for the first year was qualified and there were certain internal control issues mentioned by the auditors in the initial years of the project. The PIU has strengthened the project financial management arrangements and addressed the issues, so that the most recent audit reports have been unqualified and with no internal control issues mentioned. The project financial statements for the final 16 months period are now being audited by the existing independent auditors and the audit reports will be submitted by June 30, Overall Borrower performance: The overall performance of the Borrower was satisfactory. Project targets and objectives were achieved in all project activities, The government demonstrated its commitment to the broad objectives of the project and the innovative approaches, despite execution delays and one brief unsatisfactory implementation rating by the Bank. The Ministry of Public Finance provided valuable support and guidance throughout; this was particularly important in view of the fact that this was an unfamiliar sector for both the Bank and the Government and it was the first involvement of the Ministry of Culture with a Bank-financed activity. Although the performance of the Project Implementation Unit was mixed and sometimes marginally satisfactory, largely because of frequent staff changes, in the final years of implementation the PIU director and staff demonstrated strong commitment to the project and worked hard to secure appropriate Government approvals for key works and to ensure that tendering and procurement were carried out in a transparent manner, consistent with Bank guidelines

14 8. Lessons Learned The piloting nature of a Learning and Innovation Loan proved to be particularly appropriate in a new sector and an uncertain setting where experimentation and testing of innovative approaches i.e. especially in the axon village development are essential. However, the selection process for pilot villages would have benefited from a more comprehensive community consultative effort earlier in the process including clearer selection criteria. Fostering community consultation in an effort to encourage community consensus, particularly in small, poor, ethnically diverse areas, can be a slow, painstaking process that, while essential, can often conflict with the rapid response features of a Leaning and Innovation Loan. A stronger community consultation and engagement effort should have been built into the project at the beginning and throughout implementation. Monitoring and evaluation systems must be carefully designed to ensure that monitoring efforts produce data that are useful in assessing project outcomes and impact. Given the nature of Learning and Innovation Loans, with their emphasis on relatively fast preparation and appraisal, it is often necessary to give far more support for supervision (financial and technical) than current Bank parameters allow. Bank procurement procedures and requirements are sometimes difficult to apply in unfamiliar situations under a cultural heritage project (such as restoration of historic painted doors at the Mogosoaia Palace or specialized pressurized recoating of cast iron modules on the Brancusi ensemble). Despite a slow implementation and disbursement experience the project has had significant multiplier effects in key areas such as attracting other partners and donors (government and non-government) to assist and provide support in community conservation and development (i.e. axon villages in Transylvania and the Brancusi ensemble at Tirgu Jiu). This was achieved largely through the combined efforts of the Government, the Bank and the World Monuments Fund to publicize in Europe and elsewhere the potential that the new project held for constructive collaboration in the culture sector. This possibility was not recognized at appraisal but only became clear while the project gpt started. the lesson is that significant multiplier effects can be secured if project partners are willing to respond quickly and creatively to unforeseen opportunities. Given the importance and uniqueness of cultural assets, and the patrimony regulations that govern their management and use in most countries, there are inevitable and understandable clearance and approvals at various levels that result in unexpected execution delays. The nature of these processes are significantly different from those experienced in most Bank-supported sectors; for example, the processes involve several layers of review by art historian, restoration experts and other specialists inside and outside the Government. This factor must be taken more into account in initial project design. With respect to the use of the Learning and Innovation Loan instrument, (i) for the Bank, it proved effective in responding quickly to a Borrower s strong priority and in attracting support from other donors for direct investments (i.e. the World Monuments Fund, a first time co-financier in a Bank operation); (ii) for the Government, an excellent tool to test different partnership approaches for more effective management of cultural patrimony. Even though additional time two years was required to complete implementation, use of the LIL instrument was, in retrospect, an appropriate instrument because of its responsive, client-oriented nature which appealed both to Romania (and other countries emerging from a difficult economic/social transition), as well as to other donors and cofinancing partners. 9. Partner Comments (a) Borrower/implementing agency: The Ministry of Public Finance, General Directorate for External Public Finance, reviewed the ICR and sent a letter to the Bank (dated June 2, 2005) confirming on the Bank document and attaching the

15 Borrower's Evaluation Report prepared by the PIU under the Ministry of Culture and Religious Affairs. The Borrower's Evaluation Report is presented in Annex 8. (b) Cofinanciers: Comments received from Ms. Bonnie Burnham, President of the World Monuments Fund are copied bellow: "The Learning and Innovation Loan offered a valuable opportunity for the World Monuments Fund and the Romanian Government to work together toward mutual goals that could not have been accomplished without the availability of World Bank funding. The loan program allowed the government to substantially complete the restoration of one of the country s most prestigious cultural complexes - the Brancusi Endless Column ensemble - and to improve the condition of other priority sites, which will most certainly play a role in helping to build tourism to the country in the future. Tourism development is a key component in the government s strategy to produce revenue and local employment. All the parties who worked together to complete this program national and local authorities, researchers, contractors, and NGOs recognized the importance of this precedent as a new paradigm for collaborative financing and were eager to capitalize on the opportunity. The magnitude of the undertaking produced both a will to succeed and a certain amount of misapprehension amongst a group of players each seeking to control aspects of the program while lacking knowledge of each others procedures and objectives. In a country where there is virtually little history of open and transparent cooperation amongst various stakeholders, all the participants had a great deal to learn about how to reach consensus on specific issues and how to translate this consensus into effective action. In the end, the goals of the program were accomplished, but the exercise will have failed to realize its potential, in terms of the investment made in this learning process, unless it is redeployed as a framework for future financing partnerships. From beginning to end the program was highly visible, attracting both local and international press. While public commentary within Romania was often shaded by the political agendas of the various media outlets, there was a constant public awareness of the program, which must be seen as evidence of a strong public interest and support for the preservation of the national heritage. Hopefully this interest will be translated into citizen participation in the future planning for these sites." (c) Other partners (NGOs/private sector): n/a 10. Additional Information The ICR team included: Thomas Blinkhorn, TTL Mariana Moarcas, Operations Officer, ECHD Cristina Zirimis, Program Assistant, ECCRO

16 Annex 1. Key Performance Indicators/Log Frame Matrix Outcome / Impact Indicators: Indicator/Matrix Projected in last PR 1 Actual/Latest Estimate 1. Completed long-term national partnership 100% 100% strategy for cultural heritage management, including priority action plan and national inventory. 08/00 2. Completion of high quality restoration 100% 100% works. 3. Ministry of Culture strengthened in project 100% 80% management capability, strategy formulation, private sector relationships. 4. Effective partnerships at targeted 100% 100% restoration sites including broad-based stakeholder representation. 5. Local residents in axon villages actively 100% 100% collaborating on pilot tourism, crafts development, small scale agriculture and other community-based activities. 6. New site fee mechanisms and other revenue-generation measures in place. 50% 80% Output Indicators: Indicator/Matrix Projected in last PR 1 Actual/Latest Estimate 1. Tendering documents completed for major components - Brancusi Ensemble. 6/1/00 2. Modalities for on-lending to axon Villages completed and approved. 10/1/00 3. National trategy planning underway. 08/00 100% 100% 100% 100% 100% 100% 1 End of project

17 Annex 2. Project Costs and Financing Project Cost by Component (in U$ million equivalent) Appraisal Estimate Actual/Latest Estimate Percentage of Appraisal Component U$ million U$ million Brancusi Ensemble Brancovan Palaces axon Villages Institutional trengthening Restoration of Other Historical Monuments 1.44 Total Baseline Cost Physical Contingencies 0.70 Total Project Costs Total Financing Required Project Costs by Procurement Arrangements (Appraisal Estimate) (U$ million equivalent) Expenditure Category ICB Procurement Method 1 NCB Other 2 N.B.F. Total Cost 1. Works (3.80) (0.40) (4.20) 2. Goods (0.30) (0.30) 3. ervices (0.50) (0.50) 4. Miscellaneous Miscellaneous 6. Miscellaneous Total (3.80) (1.20) (5.00) Project Costs by Procurement Arrangements (Actual/Latest Estimate) (U$ million equivalent) Expenditure Category ICB Procurement Method 1 NCB Other 2 N.B.F. Total Cost 1. Works (2.06) (0.49) (1.43) (3.98) 2. Goods (0.67) (0.67) 3. ervices (0.31) (0.31) 4. Miscellaneous

18 (0.04) (0.04) 5. Miscellaneous 6. Miscellaneous Total (2.06) (0.49) (2.45) (5.00) 1/ Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 2/ Includes civil works and goods to be procured through national shopping, consulting services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs. Note: the NCB procurement method should be read as MW. Project Financing by Component (in U$ million equivalent) Component Appraisal Estimate Actual/Latest Estimate Percentage of Appraisal Bank Govt. CoF. Bank Govt. CoF. Bank Govt. CoF. Brancusi Ensemble Brancovan Palaces axon Villages Institutional trengthening Restoration of Other Historical Monuments TOTAL