Public Disclosure Authorized. Public Disclosure Authorized. Public Disclosure Authorized. Public Disclosure Authorized. Report No.

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1 Report No. PID6856 Project Name Romania-Cultural Heritage Project (+) [Learning and Innovation Loan] Region Sector Project ID Borrower Implementing Agency Environment Category Europe and Central Asia Environmentally and Socially Sustainable Development ROPE58284 Romania Date This PID Prepared September 14, 1998 Projected Appraisal Date October 12, 1998 Projected Board Date Country and Sector Background Ministry of Culture Mr. Sergio Nistor, Executive Director Project Implementation Unit Piata Presei Libere No. 1 Bucharest, Romania Tel: (401) Fax: (401) B December 15, 1998 (Est.) 1. Romania ranks as a lower middle-income country, with a GDP per capita of some US$1,450 in Its population of 23 million ranks second amongst the Central Eastern European states. The chemical, refinery, and machine-building, metallurgical and synthetic textile sectors have a significant presence, originally built in the communist period. Agriculture is the second largest sector, accounting for about one-fifth of GDP and an estimated 35 percent of formal and informal employment is dependent upon it. 2. Poverty has grown sharply during the early years of economic transition and remains a serious problem. Against this background, pressures have increased on the country's social expenditures, including on the health and education systems. 3. Much of Romania's cultural heritage is in serious disrepair due to lack of public financing and years of neglect. The constrained current fiscal situation and competing demands for scarce public resources continues to limit financial support for cultural heritage protection and management. Thus, difficult choices need to be made about national priorities in the near term. Government has decided that the historic central role of the state in cultural heritage needs to be replaced with new partnership models with the private sector, international donors, organized community groups, and civil society at large. A strategy to achieve this objective is evolving. Description 4. The project includes the following five components:

2 a) Support for the renovation and restoration of the internationally acclaimed Brancusi Sculptural Ensemble in the town of Tirgu Jiu, northwest of Bucharest. The ensemble is one of Romania's most revered artistic complexes, designed by the Romanian sculptor Constantin Brancusi, who was born near Tirgu Jiu and was a student of Rodin. The investment involves highly specialized restoration activities, including renovation of the Endless Column, Gate of the Kiss, Alley of the Stools, and Table of Silence. It will also entail site management planning, including landscaping and tourism development. This component has been designated by Government as Romania's Millennium project. b) Emergency assistance for the National Library in Bucharest. This would involve, in the first phase, renovation/completion of two floors in the new national library building, currently under construction, to permit immediate storage of thousands of rare and historic volumes that are now deteriorating in a moisture-laden underground garage in Bucharest as well as re-design of the structure. The second phase of assistance would include support for redesign of the new library, which has been partly finished in a substandard manner, and assistance for a future fund raising strategy plus some essential structural elements such as utilities (i.e. energy efficient heating and electrical systems). c) Assistance to help (i) complete restoration of the 18th century Brancovan Palace at Mogosoaia and (ii) develop a site development plan and community support program for a second Brancovan palace at nearby Potlogi, along with assistance for structural stabilization. Both palaces are a relatively short distance from Bucharest and are envisioned as part of a future historic tourism route. Restoration work at Mogosoaia will involve installation of a fire alarm system at the palace (almost completely restored), renovation of the entrance hall, and completion of a nearby Convention Center and small hotel. d) Support for a Saxon Village and Transylvania development component for pilot efforts in selected historic Saxon Villages to determine options for sustaining cultural preservation and promoting social cohesion through tourism, craft development, and/or small-scale agriculture improvements. Four villages are expected to be involved, based on criteria which include motivation among ethnic groups to work together. The program will include: i)a social assessment as a learning and monitoring tool; ii) a small community fund to support priority, demand-driven repairs of cultural assets; and (iii) technical assistance for crafts development in the Transylvania region, including market linkages. e) Assistance for Institutional Strengthening involving (i) capacity building in the new project management unit in the Ministry of Culture, including training and study tours. (ii) formulation of a national cultural heritage preservation strategy that will help establish future priorities and involve possible legislative reform; (iii) public education and awareness-raising campaign to help build stronger civic understanding of, and support for, the importance of cultural heritage in the nation's future development;and (iv) a monitoring and evaluation program. Financing 5. The total project cost is estimated at $6.7 million. This includes a IBRD loan of $4.9 million (73%), government co-financing of $1.2 million (18%), and $600,000 (9%) from the World Monuments Fund. Additional trust funds are being - 2 -

3 raised. Implementation 6. Implementation will be carried out by a Project Implementation Unit in the Ministry of Culture supported by local consultants and periodic foreign technical advisors. Sustainability 7. Several key assumptions underlie the issue of project sustainability: (a) Local communities at the project sites can be galvanized to support renovation work, take sufficient pride in the restored heritage results that they will provide requisite action to maintain sites and react creatively to tourism development opportunities; (b) The testing of new fee mechanisms at cultural centers (Brancusi) and Brancovan palace (Mogosoaia) will prove successful and lead to establish of more permanent financing support facilities -- both at project sites and elsewhere; (c) Pilot efforts at establishing new publicprivate sector partnerships in cultural heritage management (i.e. Brancusi; Brancovan; Saxon villages) will, in the fullness of experience, reveal appropriate models that can be replicated more widely in the society; (d) Public awareness and education efforts will help fortify the current Government impulse to pursue a new national cultural heritage that sets future priorities within a reform legal framework and political leaders(national and local) will support this effort. 8. The risks involved are formidable and relate to the countervailing pressures of an economy in transition that tend to focus official minds on crisis management; inexperience in a largely state-controlled society with new private sector opportunities and responsibilities; unfamiliarity or resistance by officialdom to the kind of information sharing and open consultation on public policy matters relating to cultural heritage preservation that are being tested and promoted in the project. The proposed project has been designed with these risks in mind and the LIL offers an unusual opportunity to test different approaches in the pursuit of agreed reform objectives. Support for the project from key reform-minded officials in critical agencies such as the Ministry of Culture and on important parliamentary committees gives hope that the risks can be mitigated to some extent. Environmental Aspects 9. The project is proposed for "B" classification. Generally, the project is expected to have an overall positive environmental impact through site management and conservation planning, landscape improvements, redesign of the National Library in Bucharest, small fund to finance priority repairs in selected Saxon villages. An environmental analysis will be included for each major investment, and an environmental checklist will be used for sub-projects supported by the proposed community repair fund in the Saxon Villages. Contact Point: The InfoShop The World Bank 1818 H Street, N.W. Washington, D.C Telephone No. (202) Fax No. (202)

4 Thomas A. Blinkhorn; Task Team Leader, ECSSD The World Bank 1818 H Street N.W., h Washington, DC Telephone No.: (202) Fax No.: (202) Note: This is information on an evolving project. Certain activities and/or components may not be included in the final project. Processed by the InfoShop week ending September 18,

5 Annex Because this is a Category B project, it may be required that the borrower prepare a separate EA report. If a separate EA report is required, once it is prepared and submitted to the Bank, in accordance with OP 4.01, Environmental Assessment, it will be filed as an annex to the Public Information Document (PID). If no separate EA report is required, the PID will not contain an EA annex; the findings and recommendations of the EA will be reflected in the body of the PID.