Document of The World Bank Report No: 65033-NE RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF LOCAL URBAN INFRASTRUCTURE DEVELOPMENT PROJECT CREDIT IDA-44100 APPROVED ON APRIL 23, 2008 TO THE REPUBLIC OF NIGER DECEMBER 6, 2011 Urban and Water Unit (AFTUW) Sustainable Development Department Country Department AFCW3 Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ABBREVIATIONS AND ACRONYMS BEEEI Environment Assessment Bureau (Bureau d’Evaluation Environnementale et des Etudes d’Impact) BNC National Coordination Bureau (Bureau National de Coordination) GoN Government of Niger IDA International Development Association NIGETIP Public Works Agency of Niger (Agence Nigérienne de Travaux d’Intérêt Public) PAPST Transport Sector Program Support Project PDIL Local Urban Infrastructure Development Project (Projet de Développement et d’Infrastructures Locales) PDO Project Development Objective RPF Resettlement Policy Framework SC Steering Committee SDR Special Drawing Rights Regional Vice President: Obiageli K. Ezekwesili Country Director: Ousmane Diagana Sector Director: Jamal Saghir Sector Manager : Junaid Kamal Ahmad Task Team Leader: Zie Ibrahima Coulibaly 2 NIGER LOCAL URBAN INFRASTRUCTURE DEVELOPMENT PROJECT P095949 CONTENTS Page A. SUMMARY ............................................................................................................... 4 B. PROJECT STATUS ................................................................................................. 4 C. PROPOSED CHANGES .......................................................................................... 4 ANNEX 1: RESULTS FRAMEWORK AND MONITORING.................................... 9 3 REPUBLIC OF NIGER LOCAL URBAN INFRASTRUCTURE DEVELOPMENT PROJECT RESTRUCTURING PAPER SUMMARY 1. The proposed changes are (i) reduction of the scope of the Project in order to enable the Recipient to carry out within the original timeframe activities under the Project which better reflect the Government’s current strategy; (ii) as result of the above, reduction of the amount of the financing, the cancelled amount being made available to the Government for the financing of other development needs; (iii) modification of the implementation arrangements; and (iv) revision of key performance indicators. These changes were the result of prior discussions between the Bank’s regional senior management and the Government of Niger to improve performance of the project which was confirmed as relevant. They were also aimed at taking account of new development needs as identified by the new authorities for rapid and tangible impacts after the recent political transition. These changes were further confirmed during the project Mid-Term Review (MTR) held in June 2011. PROJECT STATUS 2. Since effectiveness on December 15, 2008, the project has only reached a disbursement rate of about 22% with about 15 months left to closing. Nevertheless, despite this slow implementation pace, it must be noted that the project has resulted in a higher overall level of competence of local governments resulting in the completion of all first phase investments under these municipalities’ direct responsibility. The project has specifically contributed to the strengthened capacity for annual programming, budgeting and implementation of maintenance activities, as reflected in the achievement of all relevant targets. Moreover, the completion of two strategic studies have resulted in the preparation of (i) the draft of a new law on public contract management and delegation; and (ii) a proposal for a framework for implementing decentralized urban development interventions, including financial transfers and mechanisms to access such funding. 3. At the same time, as a result of constant efforts in support of NIGETIP - the delegated management agency responsible for 85% of the investments under the project - the project commitment rate has drastically increased over the last few months from about 30% in December 2010 to 56% in late September 2011. 4. Despite these encouraging outcomes, the MTR concluded that the project would unlikely achieve its development objectives (PDO) by the project closing date as a result of some systemic institutional weaknesses and capacity constraints. While the mid-term review mission of June 2011 concluded that the PDO remained relevant it proposed the restructuring of the project to increase its implementation effectiveness while taking into 4 account a prior agreement between the Government and the Bank (during a May 2011 mission by regional senior management) to not extend the project closing date. On the basis of these parameters, the main proposals for project restructuring are (i) a priority program defined to align the project scope to the existing capacities for further implementation1; (ii) the modification of the implementation arrangements to further clarify the roles and responsibilities of the various institutions involved in the project; and (iii) the revision of key performance indicators based on the experience and the priorities confirmed. One of the immediate expectations of the Government from the proposed changes is the re-affectation of any cancelled amount from this project to the financing of other projects in the country. PROPOSED CHANGES 5. The changes indicated above are detailed in this section; they serve as the basis to amend the project Financial Agreement and align it with the agreed revised provisions for improving the implementation effectiveness. • Reduced project scope 6. The Project restructuring will preserve all project components, but result in overall reduction of project scope (in terms of original costs) by about 21% for meeting the agreements, as highlighted above, between the government and the Bank’s management to drop activities unlikely to be completed before the project closing date and affect the corresponding funds to other development needs. The changes proposed have resulted in a reduction of project activities by 28.6% for Component A (capacity building) and 7.6% for Component B (municipal investments in Niamey, Maradi and Dosso). Changes to the Component C (project management, monitoring and evaluation) remain minor with no substantial impact on project scope. 7. Component A will retain activities in (i) support to local authorities: (ii) support to central government entities; and (iii) support to the private sector. The reduction of the component’s scope has been primarily the result of cancellation of seven activities out of about 30 initially planned. The activities proposed to be dropped were either already implemented through other funding or found no more relevant for the project because of an evolving context. 8. With regard to Component B, priority investment programs will be maintained in all three project cities (Niamey, Maradi and Dosso) but with changes in activities scope and reduction by about 85% of the overall physical and financial contingencies amount for investments. In Niamey, the investments to be maintained will primarily consist of roads rehabilitation, but with a reduction of the length of roads to be rehabilitated from 17 to 11.56 kilometers. Drainage works and schools rehabilitation sub-projects will also be preserved in Niamey, while activities initially planned for construction or rehabilitation 1 During the May 2011 mission by Bank management, it was agreed that, because of the impossibility of completing works in the remaining project life, substantial share of investments will be dropped, including about 32% of roads rehabilitation in Niamey and the trucks terminal of Maradi. At the same time, it was agreed to give priority to the Maradi’s central market, which the government was willing to bring at a level of national priority. 5 of health centers and diverse administration buildings are proposed to be dropped. With regard to Maradi, the small infrastructure planned to improve livelihood in low-income settlements will be retained while the envelope for the rehabilitation of Maradi’s central market will be increased and the construction of a trucks terminal dropped. For Dosso, no substantial change has been proposed in the scope of the investments initially planned which will remain focused on the rehabilitation of two markets, the construction of a trucks terminal, and investments to improve livelihood in low-income settlements through works in drainage, standpipes and public latrines. • Results/indicators 9. These changes will lead to the revision of the target values for the specific PDO and the intermediate outcome indicators. Moreover, the indicator initially set to measure fees expected by municipalities from markets and truck terminals upon rehabilitation of these infrastructures has been dropped, the main reason being lack of time to complete the works scheduled and perform collection of such fees before the project closing date. Instead, a new outcome indicator for the setting up of effective management systems for markets and truck terminal has been proposed. Furthermore, these systems will help contribute to the improvement of municipal fees collection and overall management of the assets with a clear expected impact on local economic development. The end-of- project outcomes - as they will be actually achieved - will now be measured against the revised target values. • Safeguards 10. The current MS rating for safeguards was found to be the result of limited ability to manage the environmental and social impacts of project implementation. A consultant will be hired to support the BNC in monitoring and reporting on the implementation of the environmental and social aspects of the project to assure full compliance with safeguards requirements. • Institutional arrangements 11. The proposed changes in the institutional arrangements are intended to strengthen project coordination capacity and improve its implementation effectiveness. They involve clarification in the roles and assignments as well as capacity strengthening for key institutional stakeholders, including the oversight ministry, the Ministry of Urban Development, Housing and Sanitation (Ministère de l’Urbanisme, du Logement et de l’Assainissement - MULA); the Steering Committee; the local governments for Niamey, Maradi and Dosso; the project coordination unit (Bureau National de Coordination - BNC) and the public works delegation agency of Niger (Agence Nigérienne de Travaux d’Intérêt Public - NIGETIP). Role of the Government 12. The MULA will be directly responsible for project implementation in place and lieu of the Office of the Prime minister that has been so far the project oversight institution. In particular, the MULA will be responsible for overall project coordination, supervision and M&E and will be relying on the Steering Committee (SC), as strengthened, for fulfilling its core mandate. The BNC, now under the oversight of the MULA, will be ensuring that the project delivers results of a high quality. 6 13. The SC will continue to have the following principal functions: (a) provide the project with overall guidance; (b) facilitate coordination of project operations; (c) ensure coherence between the project and other GoN and donor-supported programs in the urban and local government sectors, and (d) approve the annual action plans, budgets and reports to be consolidated and submitted by the BNC. As a result of the project MTR, the composition of the SC will be revised to focus on administration entities at central and local levels with actual potential to contribute to the improvement of project implementation effectiveness. This revision has taken into account the need to preserve the authority of the SC’s chair by removing from the committee’s membership representatives from the Office of the Prime minister and the Presidency respectively. The details on these arrangements are given in the Arrêté No 0107/MUL/A/PDIL signed by the oversight minister on August 9, 2011 to define the institutional framework for project implementation. 14. The BNC will plan project activities for approval by the SC and will further coordinate for timely and effective implementation of all project activities either by self, through the communes or other selected partners (by delegation or outsourcing). Specifically, the BNC will ensure that: (a) all other project activities are undertaken on a timely basis; (b) external audits are carried out on a timely basis; and (c) project implementation completion report is delivered on due time. The BNC will also be directly responsible for fiduciary aspects of the project, for consolidating the annual programs in consultation with the targeted local governments and other stakeholders, for preparing the quarterly implementation reports, and for liaising with IDA and other development partners. The BNC will ensure that social and environmental safeguards are put in place and properly operationalized. The BNC’s staffing will be reorganized as agreed during MTR with the creation of additional positions( M&E specialist and technical capacity support specialist), the recruitment of a dedicated coordinator for the project – hence no more sharing of the same coordinator with the existing PAPST (Project in support of the transport sector program) - as well as the replacement of the procurement specialist who resigned during the project MTR and dropping of the infrastructure specialist position that was assessed as no more relevant.. The financial management and procurement positions will remain shared between the present project and the PAPST. 15. In addition to the overall project implementation on behalf of the MULA, the BNC will be responsible for implementation of project Component A (capacity building) and Component C (support to implementation, monitoring and evaluation). Studies and technical assistance under Components A and C will be contracted out to consultants, with the responsibility for technical oversight and implementation of action plans clearly left to the relevant ministries or entities. Role of the urban local governments 16. The three cities targeted by the project will be maintained and their respective local governments will continue to play a major role in the implementation of Component B (municipal investments for the cities of Niamey, Maradi and Dosso) in terms of programming, implementation, management, and maintenance of investments. The ongoing contractual agreements (Contrats de ville) will be updated and signed between the MULA and the following local authorities: (i) for Niamey, the Mayor of the Ville de 7 Niamey; (ii) for Maradi, the Mayor of the Ville de Maradi; and (iii) for Dosso, the Mayor of the Commune urbaine de Dosso. The contracts will set forth the details of the investment and capacity building programs, the mutual obligations for their effective implementation, as well as the continued efforts for further improving local governments’ overall performance. They will be approved by the SC before their signing by parties. To consolidate the capacity gains so far achieved by these urban local governments, a specific technical assistance program – tailored to the needs of each local government - will be put in place, and implemented under the responsibility of the BNC in the remaining implementation period. 17. To continue coping with the risks associated with procurement activities while meeting the needs for consolidating local capacities, the urban local governments will continue to be responsible for direct procurement up to the already applied ceiling of US$250,000 for Niamey and Maradi, and US$150,000 for Dosso. Operations above these ceilings will continue to be procured and implemented through NIGETIP which benefitted from strengthening over the project implementation period prior to MTR. NIGETIP has agreed to take additional measures to improve its capabilities, including the hiring of experienced engineers for effective supervision and follow-up of infrastructure works as agreed on during project MTR. 8 • Financing o Project Costs Project Costs (US$m.) Components/Activities Current Proposed Component A: Capacity building A.1: Support to local authorities 1.07 0.57 A.2: Support to central government entities 0.73 0.73 A.3: Support to the private sector 0.16 0.10 TOTAL COMPONENT A 1.96 1.40 Component B: Municipal investments in Niamey, Maradi and Dosso B.1: Ville de Niamey 12.89 10.00 B.2: Ville de Maradi 5.00 6.48 B.3: Commune Urbaine de Dosso 2.24 2.12 TOTAL COMPONENT B 20.13 18.60 Component C: Support to implementation, monitoring and evaluation (i) Equipment costs for BNC 0.14 0.04 (ii) Operating costs for BNC 1.66 1.62 (iii) Technical and financial audits 0.16 0.18 (iv) Support to monitoring and evaluation 0.12 0.13 (v) Information, Education and Communication 0.08 0.10 TOTAL COMPONENT C 2.16 2.07 PPF Refinancing 0.90 0.90 Physical contingencies 1.61 0.34 Financial contingencies 3.24 0.39 TOTAL COST OF THE PROJECT 30.00 23.70 o Cancellations 18. Project restructuring will result in the reduction of project scope by about US$6.3 million, mainly because of the dropping of part of roads investments in Niamey and cancellation by about 85% of the overall physical and financial contingencies amount for investments. The level of reduction of project scope was determined from the priority activities as confirmed at project MTR and based on the likelihood of having their implementation fully completed before the project closing date of January 15, 2013. 9 ANNEX 1: Results Framework and Monitoring NIGER: LOCAL URBAN INFRASTRUCTURE DEVELOPMENT PROJECT Project Development Objective (PDO): Increased and sustained access of the urban population, particularly those living in low-income settlements, to basic infrastructure and services. Revised Project Development Objective: NO D=Dropped Cumulative Target Values** C=Continue PDO Level Results Indicators* Core N= New Unit of Baseline Frequency Data Source/ Responsibility fo R=Revised Measure (2008) YR 1 YR 2 YR 3 YR4 Methodology Data Collection (2009) (2010) (2011) (2012) Indicator One: Number of Feasibility study people in urban areas provided 0,000 0,000 8,125 60, 862 (*) MTR and and survey of BNC with access to all-season roads R Number N: 0,000 N: 0,000 N: 0,000 N: 52,737 end of served areas within a 500 meter range under M: 0,000 M: 0,000 M: 6,630 M: 6,630 project the project. D: 0,000 D: 0,000 D: 1,495 D: 1,495 Indicator Two: People with MTR and Feasibility study access to improved drainage in R Number 0,000 0,000 11,254 11,254 end of and survey of BNC the areas served by the project N: 0,000 N: 0,000 N: 1,389 N: 1,389 project served areas M: 0,000 M: 0,000 M: 4,524 M: 4,524 D: 0,000 D: 0,000 D:5,341 D:5,341 Indicator Three: Number of Feasibility study people in urban areas provided R Number 0,000 0,000 3,010 3,010 MTR and and survey of BNC with improved water sources N: 0,000 N:0,000 N:1,215 N: 1,215 end of served areas under the project. M: 0,000 M: 0,000 M: 302 M: 302 project D: 0,000 D: 0,000 D: 1,493 D: 1,493 Indicator Four: Number of Feasibility study people in urban areas provided R Number 0,000 0,000 2,550 3,250 MTR and and survey of BNC with improved sanitation under M: 0,000 M: 0,000 M: 300 M: 1,000 end of served areas the project. D: 0,000 D: 0,000 D: 2,250 D: 2,250 project Indicator Five: Additional fees collected from market places and D D D D D D D D D D truck terminals by municipalities. Indicator Six: Effective Percentage management system established N of sites 0 0% 0% 100% End of Feasibility study BNC / to operate markets and truck developed M: 0 M: 0% M: 0% M: 100% project and project Municipality terminals upon rehabilitation / with D: 0 D: 0% D: 0% D: 100% implementation construction under the project. established reports system INTERMEDIATE RESULTS Intermediate Result (Component One): Capacity building Revised Intermediate Result (Component One): NO Intermediate Result indicator Percentage N: 8.0% N: 8.0% N: 9.11% N: 7.37 % N: 9.0% Municipal budget One: Annual budget allocation C of annual M: 5.1% M: 5.1% M: 8.92% M: 7.06% M: 6.0% Annual reports (compte de BNC / on routine road and drainage municipal D: 6.8% D: 6.8% D: 8.38% D: 8.61% D: 8.0% gestion, compte Municipality maintenance within appropriate income administratif) range Intermediate Result indicator Percentage N: 6.0% N: 7.05% N: 7.22% N: 7.22% N: 8.0% Municipal budget Two: Annual budget actual C of annual M: 2.4% M: 11.13% M: 7.09% M: 7.09% M: 4.5% Annual reports (compte de BNC / expenditure on routine road and municipal D: 5.8% D: 15.26% D: NA D: NA D: 7.5% gestion, compte Municipality drainage maintenance within income administratif) appropriate range Intermediate Result indicator Annual Annual reports Three: Length of drainage C Kilometer 1.0 21.0 31.0 BNC / network actually maintained Municipality Intermediate Result indicator Annual Annual reports Four: Length of road network C Kilometer 2.2 40.0 114.0 BNC / actually maintained Municipality Intermediate Result (Component Two): Municipal investments for Niamey, Maradi and Dosso. Revised Intermediate Result (Component Two): NO Intermediate Result indicator One: Roads rehabilitated, Non- R Kilometer 0.00 0.00 2.26 13,82(*) MTR and end of Quarterly BNC/Municipalit rural N:0.00 N:0.00 N:0.00 N:11.56 project reports NIGETIP M: 0.00 M: 0.00 M: 1.70 M: 1.70 D: 0.00 D: 0.00 D: 0.56 D: 0.56 Intermediate Result indicator Two: Additional length of C Kilometer 0.00 0.00 3.46 3.46 (*) MTR and end of Quarterly BNC/Municipalit drains built/rehabilitated in N:0.00 N:0.00 N: 0.30 N:0.30 project reports NIGETIP targeted areas M: 0.00 M: 0.00 M: 1.16 M: 1.16 D: 0.00 D: 0.00 D: 2.00 D: 2.00 Intermediate Result indicator R Number 0.00 0.00 11 14 MTR and end of Quarterly BNC/Municipalit Three: Improved community N: 0.00 N: 0.00 N: 3.00 N: 3.00 project reports water points constructed or M: 0.00 M: 0.00 M: 2.00 M: 5.00 rehabilitated under the project D: 0.00 D: 0.00 D: 6.00 D: 6.00 Intermediate Result indicator Four: Additional number of C Number 0.00 0.00 12,380 19,210 MTR and end of Quarterly BNC/Municipalit 11 pupils in school equipped with project reports latrines in targeted areas. Intermediate Result indicator Five: Additional number of C Number 0 0 3,924 MTR and end of Quarterly BNC/Municipalit market stands improved and project reports NIGETIP park places created in truck terminals. N: Niamey M: Maradi D: Dosso (*): target values revised as result of project restructuring 12 13