94288 Public Disclosure Authorized NEPAL: SECOND RURAL WATER SUPPLY & SANITATION PROJECT (IDA CREDIT No. CR. 391 1-NEP AND IDA GRANT No. H 369-NEP) Implementation Support Review No.15: January 31-February 6,2012 AIDE- MEMOIRE Public Disclosure Authorized I. INTRODUCTION 1. An IDA team- carried out the Fifteenth Implementation Support Review of the Nepal: Second Rural Water Supply and Sanitation Project (RWSSP II), including the Additional Financing, during the period January 31-February 6, 2012. 2. The team had discussions with the Honorable Vice Chancellor and officials of the National Planning Commission (NPC); the Secretary and the officials of the Ministry of Physical Planning and Works (MPPW): officials of Ministry of Finance (MoF); and the Board Members and staff of Rural Water Supply and Sanitation Fund Development Board (the Board). The list of persons met is provided in Attachment 1. The wrap-up meeting, chaired by Mr. Tulasi Sitaula, Secretary, Public Disclosure Authorized MPPW was held on February 6, 2012 at the Ministry and was attended by representatives from MoF, MPPW and the Board Secretariat. The team also made field visits to Dhanusha, Siraha, and Udaypur districts during January 24-27, 2012 and visited a scheme in Dhading on February 5, 2012. The observations from the field are attached as Attachment II. The Aide Memoire and the actions agreed (Annex 1) were discussed and agreed at the wrap up meeting. Annex 2 presents the status of implementation of the actions agreed during the Fourteenth Implementation Support Consultations and the technical review of September 2011. As agreed with GoN, this aide-memoire will be classified as a public document under IDA's Access to Information policy. 3. During the visit the team also discussed the proposed rural water supply and sanitation sector study for the identification of options to increase sustainable access to services. The team has received the go-ahead to issue the Request for Expression of Interest from the Secretary, MPPW while revising the Terms of Reference (ToRs) to incorporate comments received from Public Disclosure Authorized the sector stakeholders. The revised ToRs was shared with the sector stakeholder group through the Sector Efficiency Improvement Unit of MPPW on February 2, 2012 and discussed at a meeting on February 6, 2012 at MPPW. The working committee comprising GoN officials, UNICEF and the Bank formed to finalize the ToRs has discussed and revised the same. The notice Request for Expression of Interest from the firms was published on February 21, 2012. Team members: MmesJMessrs.: William Kingdom, Team Leader, Bigyan Pradhan, Sr. Financial Management Specialist; Kiran Ranjan Baral, Sr. Procurement Specialist; Drona Ghimire, Environment Specialist; Sangeeta Kumari, Social Development Specialist; Silva Shrestha, Research Analyst; Bandita Sijapati Social Development Specialist; Tashi Tenzing, Technical Expert; and Kalyan Nemkul, Team Assistant RWSSPP II- 15' ISMAM 2 March 6, 2012 I. ACHIEVEMENT OF DEVELOPMENT OBJECTIVES3 : 4. Development Objectives (DO): The two Project Development Objectives are likely to be met to a large extent by the project closing date (August 31, 2012). Annex 3 presents a summary of the performance against the key performance indicators. Development Objective 1: "to improve sector institutional performance and mainstream "the Board" approach in the Government's system" is likely to be partially met by the current project closing date when measured against the four key indicators. The Government has in place a national rural water supply and sanitation (RWSS) sector policy (2004) which has established: (i) common minimum guidelines in the sector and (ii) a sector wide minimum cost sharing norm of 20% which could be reduced to 10% for the poor and disadvantaged groups. The third indicator, NPC and MPPW effectively monitor and evaluate the RWSSS sector, is possible as the RWSS Sector M&E/MIS/DSS (Decision Support System) system, which was developed in early December 2009 and formally launched in November 2010, is picking up its operations. However, more and expeditious efforts are required by GoN to ensure the use of the system by the key sector stakeholders. To that end, and to hully operationalize the web-based system, the RWSS Sector M&E Unit has conducted regional workshops for district level stakeholders. These people will be primarily responsible for providing data into the system in all the five development regions. The Unit is assisting the Department of Local Infrastructure and Agriculture Roads (DOLIDAR) to establish district level databases in 37 districts. When the Government effectively monitors the RWSS sector it will be able to implement the fourth indicator i.e. to link budget allocations among competing approaches to evaluated outcomes. Unless GoN, particularly MPPW, commits to make use of the RWSS sector M&E system this objective will not be met fully. In addition the Bill to make the Board a regular sector institution has been under discussion with the Parliamentary Legislative Committee for a final discussion before approval by Parliament. The committee members have held several discussions on the Bill and the Board was also invited to provide clarifications. Some of the Parliamentary Committee members also undertook field visits. The review team understands from the Board that the Legislative Committee members have reached consensus on all but one issue related to the representation of Village Development Committee / District Development Committee (VDC/DDC) associations. Given that the Parliament has bigger national issues to deal with at this time, the approval of the Bill is likely to take more time unless MPPW accords this top priority. Development Objective 2: "to support communities to form inclusive local water supply and sanitation user groups that can plan, implement, and operate drinking water and sanitation infrastructure that delivers sustainable health, hygiene, and productivity benefits to rural households" will be met substantially by the current closing date of August 31, 2012. Current estimates show that both the targeted schemes and target population will be met and is likely to be surpassed. The Board's revised implementation plan expects to meet and surpass the project target of completing 1,463 schemes by the closing date. The key 3/ This Aide-memoire should be read in conjunction with the 1st Trimester Implementation Progress Report (July 16,2011 to November 15, 2011) and its supplemental update up to January 25,2012. Further, to keep the main text of the Aide memoire brief, the specific component/topic related issues will be reported in the Annexes. RWSSPP H- 15' ISMAM 3 March 6, 2012 indicators for this objective show that where schemes have been implemented the impact on access to improved water supply and sanitation services, health, inclusion, income generation etc. are positive. Social capital is developed to a large extent - community empowerment, inclusion and capacity building to plan, implement and operate and maintain their systems are being achieved in the completed schemes. Further, the community managed schemes have proven to exhibit a high degree of sustainability. However, there are concerns that implementation delays may occur partly due to issues on internal management and partially due to circumstances beyond the Board's control. For example, change in Government has affected nomination of Board members which in turn has resulted in delays in decision making at the Board. The replacement of members nominated by the previous government by new members resulted in a court case and the reinstatement of two earlier members; while a court decision on one member is still pending. Thus the Board currently has only six (out of the seven) members and this has affected the election of its chairperson. Further, frequent change at the Joint Secretaries in the Ministries result in changes to the Board membership from the respective ministries- MPPW and MLD. Although the Board Secretariat informed the Bank team that so far this has not been a cause for delays in implementation, it is very unsettling and a need for lot of additional effort in bringing the new members up to speed. III. CURRENT IMPLEMENTATION STATUS: 5. The Project: The Project will finance a total of 1,463 implementation phase schemes covering a base year population of 1.038 million; 450 development phase schemes and 500 pre- development phase schemes4 . So far, 78% of the total revised project cost and 79% of the total IDA funds have been spent. Community contribution is on an average 3% higher than planned. The table below shows the revised financing plan and actual expenditure for the project. Table: Revised Financing Plan and Actual Expenditures: In US$ million Financing Plan Actual Expenditures Source Original Project Additional Total of Percentage Total Balance Original Revised Financing Source of Total Amount Borrower 6.6 11.6 1.2 12.8 17.4 5.9 46 6.9 Community 4.6 4.6 3.9 8.5 11.5 10.54 124 0 DFID 5 0 0 0 0 0 0 0 IDA 25.3 25.3 23* 48.3 71.1 38.05 79 10.25 Total 41.5 41.5 28.1 69.6 100 54.49 78 17.15 * US$ 4 million out of AF of US$ 27 million 6. Overall implementation progress The Board currently has completed 1,168 implementation phase schemes (i.e. construction of water supply and environmental sanitation assets) and 1,542 development phase schemes (i.e. community development activities including detail design of schemes in preparation for implementation). In addition, 338 implementation 4 In June 2011, the project was extended to August 31, 2012 and US$ 4 million was cancelled from the AF. RWSSPP II- 15"' ISMAM 4 March 6, 2012 phase schemes are ongoing.5 The project has provided water supply to a population of 860,000 and 176,941 household latrines have been constructed thus far. By the Project closing date of August 31, 2012, the Board expects to provide access to water supply and sanitation along with health and hygiene education benefits to a population of 1.14 million through construction of 1,480 schemes. 7. Environmental and Social Safeguards: the Project is in compliance with the environmental and safeguard requirements and no major issues were found during the review. 8. Environment Management and Water Ouality: The Board has commissioned the testing of water quality for Batch VIII implementation phase schemes as well as that for completed schemes under Batches V to VII to test the samples taken from the source, taps, reservoir (RVT) and households as part of the regular periodic water quality testing. The draft report will be available by April 2012. As tests for iron, manganese and arsenic had not been carried out for quite some time in the completed groundwater schemes, it was agreed during the previous review that such tests would be carried out for the completed schemes. However this action has been delayed and the Board plans to combine this with the assessment of safe yield. The Board has identified six schemes with high lime content and pipe encrustation problems that needs to be rehabilitated using Lime Remedial Treatment Technology. Water Quality monitoring by users, with help from the Support Organizations (SOs) during post-implementation phase is, ongoing. Until now no risks have been reported - the main feedback from the users is related to repairs & maintenance of the schemes rather than water quality risks. During the field visits made in January 2012, it was found that the construction quality was good with provision of necessary protection measures. The water quality test of the implementation phase in five of the schemes visited, however, shows presence of E. Coli, although physical and chemical quality of water is within WHO and Nepal government guidelines. In some places it was found that latrines have been constructed in close vicinity of the shallow tube wells further exacerbating the problem. The users were generally found to be unaware of this fact (Attachment II provides a summary of field observations and measures agreed). 9. Social Safeguards and Community Development Activities: The team noted satisfactory progress on the overall implementation of social issues in the project (Details in Annex 5). The Implementation Progress Report and others reveal the positive contribution that the project has continued to make on the lives of women in terms of time saved and other socio-economic opportunities. Similarly, the level of participation of disadvantaged caste and ethnic groups in the project fold is also encouraging. The last review had made several recommendations to address some of the post-implementation stage concerns that affect the sustainability of the project. These suggestions have been taken into consideration and several strategies such as registering Water Supply and Sanitation User Committees (WSUCs) as cooperatives, linking credit groups with Nepal Rastra Bank (NRB) and assisting them in accessing the Rural Self-Reliance Fund instituted by the NRB, have been initiated. 10. Formal documentation of land donation agreements from Batch VII onwards for structures built on private land in prescribed formats is underway. However, several discrepancies such as s Of these, 168 implementation phase schemes of Batch VI, VII and VIII covering a population of 180,206 are substantially completed. RWSSPP II- 15' ISMAM 5 March 6, 2012 incomplete information in the land donation forms, individuals opting for a signed letter instead of using the form, and failure of SOs to secure such land donation agreement, were noted. A number of remedial actions to address these discrepancies were discussed during the review and it has been agreed that these suggestions will be tabled, and a decision will be made during the Division Chiefs' Meeting and the Technical Appraisal Committee's meeting, both of which will be held by the end of February 2012. 11. Since the last review, progress on the innovative activities undertaken by the Board to link the Women's Technical Support Services (WTSS) groups with mico-credit organizations and help them develop commercial business development opportunities (Jeevika Karyakram) and in ensuring the sustainability of schemes (scheme insurance) has been limited. The Board has not been able to sign the MOU with the IDA assisted livelihoods "JEEVIKA" project in Bihar, India, for community professionals from Bihar to provide back-stopping support to the Jeevika groups in Nepal because of bureaucratic hurdles. While there is a plan to insure 1000 water supply and sanitation schemes against natural disasters the number of schemes insured has not increased beyond 35. 12. Project Studies: Most of the long pending studies under the project have now been either been finalized and submitted to the Bank, or are progressing towards completion. It has been agreed that the "Technical, Operational and Environmental Audit Study for Batch VI and VII" and "Short-term Sustainability Study of Batch V" will be initiated by end of March 2012 while a draft report of the "Long-term Sustainability Study of Batch III and IV" and the published version of the "Annual Report 2010-11" will be ready by end of March 2012. The team also reviewed and provided recommendations on the ToRs prepared to conduct an independent study on Gender and Social Inclusion, and the Indigenous Peoples' Development Plan. It has been agreed that a revised ToR will be prepared and submitted to the IDA for review by the end of February 2012. 13. The special study on water demand consumption and pattern, envisaged under the project, is yet to be initiated. The Board is preparing the ToRs to do a limited study to ascertain the water demand in the scheme areas. 14. RWSS Sector M&E/ MIS system and the Board's Management Information System (MIS): The web centric RWSS sector M&E/MIS at MPPW and the web-based MIS at the Board provide a strong foundation for management of the sector and the project. The team encouraged MPPW to continue to develop the Sector M&E as its main tool for monitoring and planning in the sector. The Bank team discussed with the RWSS sector M&E Unit staff to identify ways in which the existing database can be used to help design the sampling frame for the planned study on performance of different RWSS modalities. 15. The Board's MIS is proving its value with the last trimester report being prepared on time and drawing extensively on the system. During the review the team agreed with the Board on data to be provided to facilitate preparation of the ICRR (see Section IV). 16. Governance and Accountability Action Plan: The Project's GAAP implementation is ongoing as agreed during the additional financing. Since the last review, the Board has posted RWSSPP II- 15h ISMAM 6 March 6, 2012 the following documents in its website: (i) Procurement Plan, (ii) Implementation Progress Report of the second trimester of FY 2010/11; (iii) FY 2009/10 Audit Report, (iv) the Board Manuals, (v) Approved list of schemes; (vi) List of selected SOs and SAs, and (vii) all procurement related documents such as Eol, ToRs, Request For Proposal (RFP), information on award of contracts etc. The Board has also published the Annual Report for 2010 which included audited financial statements for FY 2009/10. At the community level the Board continues to expand Social Accountability Committees in schemes and it is mandatory for communities to have display boards showing physical and financial information. Procurement and Financial Management 17. Procurement: The team reviewed the current procurement status against the procurement plan and the progress as reported in the IPR of January 05, 2012 and the Supplementary IPR updated January 25, 2012. From the report and discussions with the Procurement Official at the Board, most of the planned procurement is in the implementation stage - albeit with delays. However, the revised dates for each milestone and expected revised completion dates need to be incorporated in an updated procurement plan. In addition there are eight (8) key activities for which the procurement process is still ongoing. These activities, and their currently estimated completion dates are: (the number relates to the activity number in the procurement plan) Activity Activity Planned Completion Revised Completion number* Date Date 3 SO Accounts/Audit Review December 28, 2011 August 13, 2012 Development Phase batch IX. 8 Accountant Training to SO July 31, 2011 June 9, 2012 (Batch IX) 11 Technical, operational and July 26, 2011 August 5, 2012 Environmental Audit of Batch VI and VII. Initially planned completion 21 Test Shallow Tubewell August 6, 2011 May 24, 2012 Installation & Training- Batch IX 24 Develop Technical and May 15, 2011 April 14, 2012 operational Manual for Lift System 26 Supervision of deep tubewell of February 9, 2012 August 14, 2012 Batch VIII 46 TS Training to SO staff of Batch May 30, 2011 April 10, 2012 IX. Initially planned completion 69 Sustainability Studies Batch VI. January 12, 2013 August 21, 2012 Initially planned completion - (brought forward) * As in the updatedprocurementplan dated June 2011. 18. While many of these pending activities are optimistically planned to be complete by project closing, they may, in fact, extend beyond August 31, 2012. It is therefore necessary that the Board management critically review all the ongoing as well as pending activities to assess which of these can realistically be completed by project closing. For those that cannot be completed, the RWSSPP II- 15' ISMAM 7 March 6, 2012 Board should identify those that are essential and take action to ensure timely completion. (The Board submitted a revised procurement plan to IDA for approval on February 13, 2012).) 19. One issue brought out in the discussions was the delay in conducting the sustainability study of -3 year old schemes of Batch VI - which now are 5 years old. Due to the delay, there might be additional schemes that have been completed which also need to be included. The team advised that the Board assess the numbers, revise the TOR, cost and time estimates accordingly and incorporate it in the RFP that is to be developed. 20. Financial Management, Disbursement and Audit. Overall the Board has continued to maintain a good financial management system. The team reviewed the system and also reviewed the transactions and records based on the information provided in the first trimester Financial Monitoring Report of FY2011/12, and they were found to be satisfactory. The FMIS system in the Board is fully operational and is reliable. The internal control and checking of financial information has worked well. During the review the team suggested some improvements in terms of keeping the original documents with the vouchers. Based on current progress the team estimates about US$2.50 million would remain undisbursed by the end of the current closing date. These are savings due to exchange gain of US Dollar vis-A-vis Nepalese Rupees, and the actual costs of the works and goods being lower than the estimated prices. (Details in Annex 6). 21. Commitments beyond the Project closing date: As discussed in the previous reviews, the Bank team reiterated that any commitments made for expenditures beyond the closing date of August 31, 2012 will be the government's responsibility. With the project closing at the end of August, two particular issues were identified: (i) Whether to proceed with implementation of Batch IX schemes, and (ii) Whether to proceed with development phase work and predevelopment phase activities of Batches X and XI respectively 22. In the case of Batch IX the Bank would be willing to consider allocation of identified project savings towards those activities subject to the Board being able to confirm financing for the remainder of the total estimated cost of $9.0m. The estimated savings of between $1.8 - $2.5m would have to be disbursed before the end of the project. 23. Proceeding with Batch X and XI will raise expectations amongst beneficiary communities. As such the Bank cautioned against starting such activities without having clarity on availability of financing for the studies and the implementation costs that would arise after project closing. 24. The Bank team met with MoF, NPC and MPPW to urge that the future role and financing of the Board is clarified as soon as possible. 6 Failure to provide clarity will undermine the operation of the Board. 6 The team understands that MPPW has processed a request to MoF for financing for the Board to continue its operations. RWSSPP - 15'h ISMAM 8 March 6, 2012 IV. PREPARATION FOR IMPLEMENTATION COMPLETION & RESULTS REPORT 25. The team discussed with the Board the data requirements, process and timeline for the preparation of the Implementation Completion & Results Report (ICRR) for the project. Given the significant advantages in earlier preparation of the ICRR it was agreed that the preparatory work for the ICRR would start immediately with the objective of completing the ICRR by December 31, 2012. It was agreed that the immediate first step for the preparation of the ICRR is to carry out a review of the project's M&E system to identify possible data gaps (in particular for completed projects) and initiate, if required, the data collection to fill the gaps. The following immediate actions/next steps were agreed: * The Board will submit to IDA by February 15,2012 6 the following M&E data for all Batch V-VIII schemes: (a) technical specification of the scheme; (b) geographic location of the scheme (region, zone, district, ward); (c) number of beneficiaries (population and HH) at pre-development, development and implementation phase, (d) total capital costs (including variations) and cost breakdown by source (community, government and IDA's contribution as applicable); (e) time savings and other benefits; (f) ERR; (g) O&M funds. * The Board will submit by February 15, 2012 to the IDA the Post-Implementation Project (PIP) data collected at six months interval in the two years following the closure of the schemes for all Batch V schemes, including a copy of the Post Implementation Phase reporting format. * The ICRR Task Team will analyze the M&E data and communicate to the Board whether additional data collection is required for the preparation of the ICRR and the updating of Cost-Benefit Analysis, by February 28, 2012. V. KEY ISSUES AND RECOMMENDATIONS OF THE TEAM: 26. Funding Activities Beyond the IDA project closing date: The team has assessed that by the end of the current closing date the Board will have disbursed about US$ 46 million and about US$ 2.5 million would remain undisbursed. The Board estimates that it would need about US$ 9.0 million to complete the implementation phase of Batch IX schemes and requested the Bank if it could use the saving under the project to part finance the implementation phase of Batch IX schemes. The Bank has not yet received any formal request from MoF. In principle, the Bank team was agreeable to the use of the undisbursed funds provided GoN confirms to the Bank by March 15, 2012 that it would provide the Board the balance funds required to complete fully Batch IX implementation phase schemes. 27. Clarity on the Future of the Board Beyond the IDA project closing: The Board is faced with some uncertainty about its future; what will happen to it after the Bank project closes. The team would like to flag this issue as it does affect the decision of the Board with regard to filling current vacant positions in the Secretariat as well as whether it should process contracts for future Batches of schemes like Batches X and XI etc. 6 The Board provided the details to IDA on Feb. 15, 2012 RWSSPP II-15- ISMAM 9 March 6, 2012 28. Internal Management issue: An immediate concern is related to having the full Board of seven members in place. For smooth and timely completion of the Project activities this issue needs to be resolved at the earliest so that there is stability in the Board. 29. Land donation agreement: From Batch VII onwards the Board requires that wherever private land has been donated/acquired, it be recorded in a prescribed format. However, it is found that this requirement is not fully followed as discussed above. The team requests that this be resolved at the earliest. 30. Procurement Delays: The team is concerned that there has been delays in several procurement activities. It appears that the Board's plan shifts with the closing date of the project. The team strongly recommended that the Board review its procurement plan to come up with one that is doable and then proceed to implement it. (The Board submitted the revised procurement plan to IDA for approval on February 13, 2012) 31. Preparation of the ICRR: The team would like to alert the Government and the Board that, to capture the many lessons that the Project could offer, it would be necessary to start the preparation of the ICRR. Now, in this regard the Bank's ICCR team leader has had discussions with the Board and will continue to do so. The Board is recommended to collect and consolidate data for the ICRR. 32. RWSS Sector M&E/MIS System: The challenge ahead is to operationalize the web- based system and have a good mechanism for maintaining and disseminating information. VI. PROPOSED TIMING OF THE NEXT REVIEW 33. The next implementation support review is proposed for August 2012. RWSSPP H- 1 5' ISMAM 10 March 6, 2012 Annex 1 NEPAL: SECOND RURAL WATER SUPPLY & SANITATION PROJECT (CI 391 1-NEP AND IDA GRANT No. H 369-NEP) FIFTEENTH IMPLEMENTATION SUPPORT REVIEW ACTIONS AGREED Sector Monitoring & Evaluation Populate/validate the information in the system with the RWSS M&E Ongoing inputs received from the DWSSCCs trained on the system Unit/ MPPW 1. Internal Management Complete recruitments of all vacant positions (professionals): i. Chief-HRD Division* The Secretariat March 2012 ii. Program Development Officer-HRD Division* The Secretariat March 2012 2. Women's Technical Support Services Finalize the details of the 5 phase program of insurance The Secretariat April 30, 2012 cover for 1000 schemes from July 2011- August 2012 and (HRD and commence insurance of at least 200 schemes Insurance Co.) 3. Social and Environmental Enter information on land donation into MIS The Secretariat March 31, 2012 Test quality of water being delivered by the schemes The Secretariat April 30, 2012 constructed during Batch V, VI and V1l and older Batches Implementation phase water quality test of Batch VIII The Secretariat April 30, 2012 schemes Arsenic, iron and manganese testing in the completed The Secretariat May 31, 2012 groundwater schemes. SA onboard for Lime Remedial Treatment Technology in The Secretariat May 31, 2012 Six identified Schemes SA onboard for "test" drilling in each community/scheme The Secretariat March 30, 2012 opting for groundwater in Batch IX (for determining depth of tube-well and testing quality). 4. Financial Management & Procurement Assess all the ongoing as well as pending activities and The Secretariat March 30, 2012 revise the procurement plan to include (or clearly denote) only activities that can be realistically be completed by project closing Revise the TOR, cost and time estimates for Batch VI The Secretariat February 24, Three Year Sustainability Study 2012 5. Studies and Trainings Initiate: The Secretariat March 30, 2012 (i) Technical, Operational and Environmental Audit (Complete by Study for Batch VI and VII Sept. 30, 2012) (ii)Short-term Sustainability Study of Batch V RWSSPP II- 15 ISMAM 11 March 6, 2012 Draft Report: The Secretariat March 30, 2012 Long-term Sustainability Study of Batch III and IV (Complete by Oct. 30, 2012) Submit revised ToRs for Independent study on Gender and The Secretariat February 29, Social Inclusion 2012 6. Implementation Completion and Results Report (i) Provide to the Bank the following M&E data for all The Secretariat February 15, Batch V-VIII schemes: 2012** (ii) Provide to the Bank the Post-Implementation Project The Secretariat February 15, (PIP) data collected at six months interval in the two 2012** years following the closure of the schemes for all Batch V schemes (iii) Communicate to the Board whether additional data The Bank February 28, collection is required for the preparation of the ICRR 2012 and the updating of Cost-Benefit Analysis __ * This is dependent on GoN decision on the future role of the Board. ** Done RWSSPPHI- 15e ISMAM 12 March 6, 2012 Annex 2 NEPAL: SECOND RURAL WATER SUPPLY & SANITATION PROJECT (Cr. 3911-NEP and IDA Grant No. H369-NEP) STATUS OF ACTIONS PENDING FROM THE FOURTEENTH IMPLEMENTATION SUPPORT REVIEW As o Jan 25, 2012 V Age;dIdAco 1. Sector Monitoring & Evaluation Populate/validate the RWSS October The regional level training on RWSS information in the system M&E Unit/ 30, 2011 M&E/MIS/DSS system to the users at far- with the first set of inputs MPPW western, mid-western, western, eastern received from the DWSSCCs and central regions were completed in trained on the system August 2011. After these trainings, DWSSCCs are in the process of providing data for this system as well as to validate the existing data.(Pending) 2. Internal Management Complete recruitments of all vacant positions (professionals): iii. Chief-HRD Division* The August 15, Vacancy for various positions announced Secretariat 2011 in two stages on March 28 and May 13, 2011 in national daily. A SA was hired in August 2011 to support the recruitment of staff. However, the recruitment process is delayed; it is now expected to be completed by March 2012. (Pending) iv. Program Development The August 15, Vacancy for various positions announced Officer-HRD Division* Secretariat 2011 in two stages on March 28 and May 13, 2011 in national daily. A SA was hired in August 2011 to support the recruitment of staffs. However, the recruitment process is delayed; it is now expected to be completed by March 2012.(Pending) 3. Women's Technical Suppo t Services Launch the remittance The August 15, Done on October 09, 2011. The remittance program in Janakpur Secretariat 2011 program was also launched in Surkhet and (HR has started doing transactions. Division) Identify the Jeevika groups The July 15, (i) Among Identified 21 Jeevika Groups, that meet the NRB MF Unit's Secretariat 2011 12 groups have been affiliated with established criteria and (HR existing Cooperatives and 3 groups identify the extra training Division) are preparing documents to register as needs of the groups Cooperative. At the same time, proposal on relaxation in NRB MF Unit's criteria for service to newly RWSSPP II- 15' ISMAM 13 March 6, 2012 i~~Areed*cbto .. -Cs it-a&PD. registered Cooperative has been sent to NRB. (ii) Once the Groups are affiliated with Cooperative, identified training will be imparted to the members. Sign the MoU with BRLP The July 30, Mails with Draft MoU have been sent and Secretariat 2011 thereafter even telephone conversation (ED with with CEO of BRLP has been made to support from finalize the MoU. However, the Board has the HRD) not yet received any comments on MoU. The date for coordinating meeting with BRLP nearby Nepal's Boarder for further clarification towards finalization of MoU is not fixed yet.(Pending) Finalize the mechanism to The July 30, (i) Five meetings on different issues of partner with Nepal Rastra Secretariat 2011 partnership building were held with Bank MF Unit and develop (HRD with NRB. roll-out action plan. NRB MF (ii) MoU for developing partnership Unit) mechanism was prepared and shared with NRB. The approval from the NRB's top management is still under process. Implement the iCRP program The August 15, This will proceed after the MoU including of CRPs from Bihar to train Secretariat 2011 an action plan is signed with BRLP. and provide assistance to at (ED with least 4 identified Jeevika support from groups in Nepal the HRD) Conduct training for SOs on The July 1-2, 160 focal persons (TLlChairpersons) of the Insurance Initiative Secretariat 2011 SOs were trained on July 01- 02, 2011 on (HRD and Insurance. One session for insurance is Insurance already introduced with the regular Co.) training module of CAP training for SO Staffs, so that the SO staffs will get acquainted with different process involved in the insurance policy of the schemes. Finalize the details of the 5 The July 20, As per the phase-wise plan, 200 schemes phase program of insurance Secretariat 2011 of Central and Western Regions (focused cover for 1000 schemes from (HRD and regions) were planned to be insured within July 2011- August 2012 Insurance December 201 and remaining 800 Co.) schemes will be insured within July 2012. The insurance company has finalized documents for 179 schemes till date. 4. Social and Environmental Formal documentation of The August 30, Private Land Transfer Format has been private land transfers as Secretariat 2011 distributed to SOs and the SOs are prescribed, in all the schemes submitting the documents on regular basis, from Batch VII onwards where the transfer of private land is required. RWSSPP II- 15' ISMAM 14 March 6, 2012 Arsenic & iron status in the The October ToR prepared, cost estimated and the short completed groundwater Secretariat 30, 2011 listing process of SA is in under process. schemes Test quality of water being The October Water Labs have been hired and mobilized delivered by the schemes Secretariat 30, 2011 in December 2011. constructed during Batch V, VI and VII and older Batches 5. Financial Management & Procurement Submit the third trimester of The August 31, Submitted on August 30, 2011 and cleared FY2010/l1 Secretariat 2011. by the WB on Sep 12, 2011 without any major comments. Submit unaudited accounts of The October Submitted on Oct 14, 2011 and already FY2010/11 Secretariat 15, 2011 accepted by the WB on Oct 18, 2011 without any comments. Submit audited accounts The January Delayed due to late start (Dec 21, 2011) of Secretariat 15, 2012 Audit work. Expected to submit it within March 2012 (Pending) Submit the revised The July 20, Revised Procurement Plan (Oct 1, 2010 to procurement plan Secretariat 2011 July 30, 2012) submitted on July 14, 2011. 6. Studies and Trainings Conduct: (i) Immediate CDA Impact The July 15, Completed on July 15, 2011. Study (Batch-VI and Secretariat 2011 Batch-VII) (ii) Technical Operational The July 7, Completed on July 14, 2011. and Environmental Study Secretariat 2011 (Batch-V) (iii) Long Term Sustainability The December Consultant hired and mobilized. The Study (Batch-III & Batch- Secretariat 15, 2011 assignment will be completed by March IV) 2012. (iv) CAP HSE including The September Training completed. Conflict Management Secretariat 30, 2011 Training (Batch-IX) 7. Expediting Implementation (iv) Complete remaining 20 The August 30, Out of 20, 4 schemes fully completed, 16 schemes of Batch-VI Secretariat 2011 schemes are substantially completed. Implementation Phase (v) Complete 90 schemes of The August 30, Out of 90, 21 schemes are fully Batch-VII Secretariat 2011 completed, 52 schemes are substantially Implementation Phase completed. (vi) Complete contracting of The August 30, Contract of 55 schemes done. 55 remaining schemes of Secretariat 2011 Batch-VIII Implementation Phase schemes RWSSPP II- 15" ISM AM 15 March 6, 2012 J. 1 AgtflWActo.'.:D - V (vii) Complete 52 schemes The August 30, Out of contracted 389 schemes, 119 of Batch-VIll Secretariat 2011 schemes fully completed and 100 schemes Implementation Phase I are substantially completed. (viii) Complete contracting The August 30, Development Phase contracted for 450 of all Batch-IX Secretariat 2011 schemes to old SOs and 144 schemes Development Phase under process of contracting for new SOs. * This is dependent on GoN decision on the future role of the Board RWSSPP H- 15' ISMAM 16 March6, 2012 Annex 3 NEPAL: SECOND RURAL WATER SUPPLY & SANITATION PROJECT (CR. 391 1-NEP AND IDA GRANT NO. H 369-NEP) Key Performance Indicators: 1. Project Development Objective 1: To improve rural water supply and sanitation sector institutional performance and mainstream "the Board" approach in the Government's system. I- m ~ota&roj ct.TFWet1$ i) Establish a common set of Establishment of guidelines for all projects in Does not Done 2004 common set of the sector. et guidelines. FJ ii) A sector wide minimum cost Does not Done 2004 Preparation of a recovery norm of 20% and exist common set of 10% for poor and minimum cost recovery disadvantaged groups. norms, iii) NPC and MPPW effectively Not taking The RWSS sector M&E/ MIS Effective monitoring monitor and evaluate the place system was officially launched and evaluation system sector. in December 2010. The data in in place. the system is being validated and efforts to populate the system new data are ongoing. Once this is done, the system can be used for monitoring and evaluation of the sector. iv) Government links budget Not Performance based budget Establishment of allocation among competing Applicable system in place and budget performance based approaches to the evaluation releases are based on outputs. budget allocation outcomes, system. Project Development Objective 2: To support communities to form inclusive local water supply and sanitation user groups that can plan, implement, and operate drinking water and sanitation infrastructure that delivers sustainable health, hygiene, and productivity benefits to rural households. i ~ ~um la a npIm ndi rs i) % increase in number of house- holds with improved access to water supply. O 120%0/0 100% ii) % increase in number of households with access to improved sanitation facilities. 12% 88% 100% RWSSPP II- 15' ISMAM 17 March 6, 2012 ii feme I ou paetin & O _ - S ( ~prete) functioning satisfactorily with community O & MA O 1168 1463 iv) % decrease in the prevalence of diarrheal disease morbidity among young children. 86%* 80% v) % increase (from baseline) in the number of individuals that practice hand washing with soap at critical junctures e. g before eating, after defecation, after cleaning child's bottoms, and before child feeding. 71%* 100% vi) % of population in the project area with access to water supply points (tap stand, hand pump, well etc) that can be reached within a 15 minute round trip walk from their residence. 0 81% 100% vii) % of population in the project area with access to hygienic sanitation facilities within 30 meters of their residence. 10% 86% 100% viii) Fit between the caste and ethnic profile of Upper Caste: 48% Upper Caste:37% households in the catchment's area (. e. area Adv. IP: 5 % that the water supply scheme could A Target cannot be technically cover) as measured in the initial IP : 36 % Disadv. IP: 31% quantified as the social mapping and the caste and ethnic DP: 13 % Dalits: 14 % scheme area may profile of the households actually served by Others Excluded:3 Other Excluded: 12% or may not have the system.** % specific caste/ Religious ethnicity Minority: 1% representation ix) Number of WSUCs with at least 3 women Minimum members. requirement of 3 women members achieved in all 1557 schemes contracted thus far- this target surpassed in 585 schemes 1463 *Basedon CDA Impact Study of Batch VII **Shows currentprofile ofthe households includedin the schemes. Needs to be validatedagainstthe catchment area profile 15 ISMAM R WSSPP II- 18 March 6, 2012 Annex 4 NEPAL: SECOND RURAL WATER SUPPLY & SANITATION PROJECT (CR. 3911-NEP AND IDA GRANT NO. H 369-NEP) ACHIEVEMENTS AND IMPLEMENTATION STATUS 1. Scheme Implementation Progress: From the start of the Project to date, the Board has contracted 2,042 schemes for development phase and 1,557 schemes for the implementation phase. Of these 1,542 schemes have completed the development phase and 1,168 schemes have completed the implementation phase. The Board has completed 46 schemes carried over from Batch IV of RWSSP 1. Of the 315 Batch V schemes contracted for the implementation phase, 300 schemes serving a population of 221,976 have been completed. Under Batch VI, of the 357 schemes contracted for implementation phase, 3 have been dropped and 2 deferred. 336 Batch VI schemes serving a population of 249,000 are completed. Of a total of 445 schemes contracted for the implementation phase under Batch VII, 366 serving a population of 275,000 are completed (4 dropped/ 6 deferred). Of the 389 schemes of Batch VIII contracted for implementation phase, 119 schemes serving a population of 77,000 have been completed. In total, 1,168 schemes serving a population of 860,000 have been fully completed and an additional 141 schemes serving a population of 142,000 have been substantially completed. 2. The achievements under the project so far are quantified in the following tables. I. SCHEME IMPLEMENTATION STATUS Table 1.1: Scheme Implemen ation Progress ( n terms of No. of Schemes): Additional Total Actual Actual Actual Actual and/or Batch Original PAD Projected Financing Planned Contracted Completed Completed Projected Pl d(t otal) (to ( Phase Dev Imp Dev Imp Dev Imp Dev Imp Dev Imp Dev Imp Dev Imp IV* 48 47 0 47 48 47 100 V 360 244 342 315 342 315 342 318 342 300 100 95 VI 360 330 380 350 380 350 389 357 367 336 97 96 VII 396 359 437 169 231 437 400 445 445 432 366 99 92 VIII 396 374 400 351 400 351 416 389 401 119 100 34 IX 450 450 0 450 X 450 0 Total 1,512 1,355 1,559 881 900 582 2,009 1,463 2,042 1,557 1,542 1,168 77 80 *Carried over from RWSSP-I **With the Additional Financing (AF), the PAD targets are revised; the target used here is the Actual and/or Projected for RWSSP 11 plus that for the AF. *** In addition, 253 implementation phase schemes are ongoing of which, 141 implementation phase schemes of Batch VI, VII and VIll covering a population of 142182 are substantially completed RWSSPP II- 15"' ISM AM 19 March 6, 2012 Table 1.2: Scheme Implementation Progress (In terms of Population Covered): In thousands Actual Actual Completed Original and/or Additional Actual Actual against Batch PAD Projected Financing Total Planned Contracted Completed Target (%) Phase Dev Imp Dev Imp Dev Imp Dev Imp Dev Imp Dev Imp Dev Imp IV 29 36 36 36 36 100 V 216 146 233 234 0 0 233 234 231 236 218 222 93 95 VI 216 198 267 246 0 0 267 246 274 274 260 250 97 101 VII 238 215 316 122 0 162 316 284 354 354 323 275 102 97 VIII 238 224 280 0 0 246 280 246 330 332 341 78 1 32 Ux 0 0 0 0 280 0 280 0 298 0 0 0 X 0 0 0 0 280 0 280 0 0 0 0 0 Total 907 813 1,097 638 560 407 1,657 1,045 1,486 1,232 1,142 860 69 82 *Carried over from RWSSP-I **With the Additional Financing (AF), the PAD targets are revised; the target used here is the Actual and/or Projected for RWSSP II plus that for the AF. *** In addition, 253 implementation phase schemes are ongoing of which, 141 implementation phase schemes of Batch VI, VII and VIII covering a population of 142182 are substantially completed THE BOARD SECRETARIAT STAFFING STATUS Table 2.1 Board Secretarial Staff Status - Vacant and Filled Positions: TOTAL POSITIONS Provisioned FILLED VACANT Executives 7 6 1 Professional 23 22 1 Support Staff 18 17 I Total 48 45 3 I. COMMUNITY DEVELOPMENT ACTIVITIES Table 3.1 WSUC Members and Female Treasurers: Total No. of WSUC Member No. of Female Treasurer in Female WSUC Description No. of Male Female in WSUG %o VU Regstered Total % of WSU Target Actual % Actual Target Actual Female per Members Scheme As ofMar. 14, 1563 16,836 11021 5815 5815 35% 4 1563 1533 98% 2011 As of Jan 25, 1961 22,704 14952 7752 7752 34% 4 1961 1,885 96% 2012, Progress 398 5,868 3,931 1,937 1,937 398 352 RWSSPP II- 15' ISMAM 20 March 6, 2012 Table 3.2 Community Training/Orientation: Description Male Female Total Asof Asof Asof Asof As of Jan Mar. As of Jan Mar. Jan Mar.2011 2012 Progress 2011 2012 Progress 2011 2012 Progress Orientation/ Training to Communities 25,557 34,473 8,916 36,967 42,859 5,892 62,524 77,332 14,808 SO Staffs 7,074 7,686 612 2,234 2,492 258 9,308 10.178 870 SA Staffs 1,010 1,086 76 94 112 18 1,104 1,198 94 Table 3.3 WTSS Formation and Members: Group' Women FB Grant Saving Description Formed Involved (NRs.) (NRs.) Total (NRS) Activities GR, PF, Cumulative up to S/C, KG, Jan 2012 2,812 99,839 16,650,239 10,117, 9 00 26,768,139 IW GR, PF, Cumulative up to S/C, KG, Dec. 2011 1,563 59,318 11,480,000 7,918,500 19,398,500 LW Progress* 1,249 40,521 5,170,239 2.199,400 7,369,639 Note: GR= Goat raising, PF= Poultry Farm, S/C= saving and credit, KG= Kitchen Garden, IW= Iron work for blacksmith, NTFP- Non-timber forest produce Table 34 Construction of Household Latrines: HHs with HH Latrine built HH Self-Help Total HH No. of Total Latrine Remaining Using SRLF Latrine Latrine Description Scheme HHs (Baseline) HHs No. % No. % No % Cumulative up to Jan 25, 2012 1961 196,100 4 153±58 57,529 37% 76,894 50% 134,423 88% Cumulative up to Mar. 2011 1561 156,100 31,610 124,490 42,023 34% 59,607 48% 101,630 82% Progress * 400 40,000 10,908 29,092 15,506 17,287 32,793 Table 3.5 Construction of Institutional Latrines: No. of Latrines Total School Latrines Proposed in Schools Constructed in School No. of No. of Demanding With Without With Without Description Schemes Schools latrine Urinals Urinals Total Urinals Urinals Total Cumulative up 1961 1284 1025 757 268 1025 725 to Jan 25, 2012 1 Cumulative up 1561 961 820 590 230 820 433 211 644 to Mar. 2011 Progress* 400 323 205 167 38 205 81 RWSSPP II- 15 ISMAM 21 March 6, 2012 Table 3.7 Status of Mother Child Ta) Stand Groups and VHPs: VHP Target Actual Female HSE Session Description MCT Group Conducted Cumulative up to Jan 25, 2012 29,666 1961 1903 1903 19,348 Cumulative up to Mar. 2011 22,084 1563 1563 1563 18,694 Progress 7 398 340 340 654 Table 3.8 Status of Heathy Home Survey: Target Actual Description Dev. Phase Imp. Imp. Phase Phase Cumulative up to 346,500 260,070 244,871 237,109 Jan 25, 2012 Cumulative up to 241,440 229,240 186,100 144,800 Mar. 20111 Progress 105,060 30,830 58,771 92,309 Table 3.9 NFE Classes: Proposed Started Completed No of Description Classes classes Classes Graduates Remarks Cumulative up to 2119 2096 1987 45205 Jan 25, 2012 22.75 women per Cumulative up to 1354 1249 1249 29190 class Mar.2011 Progress -765 847 738 16015 _ RWSSPPII115' ISMAM 22 March 6, 2012 Annex 5 NEPAL: SECOND RURAL WATER SUPPLY & SANITATION PROJECT (CR. 3911-NEP AND IDA GRANT NO. H 369-NEP) SOCIAL DEVELOPMENT AND SOCIAL SAFEGUARDS 1. This Annex summarizes the outcome of discussions held with the Board officials, findings from the field visit undertaken from January 24-26, 2012, and review of the implementation progress report and assessment reports on community development and social safeguards aspects of the project implementation from social development and social safeguards perspective. Based on the discussions, a set of future actions were agreed. (See Section V below). . Gender and Social Inclusion 2. The Board has, and continues to pay significant attention to issues of gender and social inclusion, and equity concerns in all program activities especially by adopting the Revised Livelihood and Social Inclusion (LSI) methodology. This has resulted in visible improvements in the representation and participation of the socially excluded groups in project activities as well as their implementation and management. According to the Implementation Progress Report (I' Trimester, FY 2011/12), by November 2011, 1,561 WSUGs comprising of 18,303 members were formed in which the representation of marginalized groups like Dalits, Janajatis and other deprived caste/ethnic groups has been around 63 percent. Similarly, among the total beneficiary households, around 57 percent are from these excluded groups. With mandatory requirement introduced for women's involvement in the decision making positions, mostly as treasures, women's confidence in institutional representation has been made strong and I1 percent of WSUCs have women as Chairpersons and 98.21 percent as Treasurers. Similarly, 29 percent of WSUC Chairpersons are Dalits and from other disadvantaged groups. Besides improving representation, the schemes have also allowed women to save, on average, almost three hours of their time in fetching water which has been effectively used in child care, income generation activities, and other household responsibilities.8 Further, more than 45 thousand women have graduated from Non-Formal Education (NFE) classes; 9 around 1,900 females are currently working as Village Health Promoters (VHPs);'o and more than 99 thousand female members have mobilized more than NRs. 26 million in income generating activities." To ensure access of services to remote areas where households from deprived communities primarily reside, more than 33 percent of the schemes selected are located beyond 8 km from all weather roads. 1 8According to the report, "Achievements of Rural Water Supply and Sanitation Projects Implemented by the RWSSFDB" submitted in July 2011, women have used around 30 percent of their saved time on economic activities (e.g., farming, livestock raising and cottage industries) followed by 16 percent in household chores (child rearing, cleaning, kitchen gardening), and the remaining 54 percent of their time to take rest and attend socio-cultural events. 9"Supplementary Implementation Progress Report," Second Rural Water Supply and Sanitation Project, Updated up to 25 January 2012. '0"Supplementary Implementation Progress Report," Second Rural Water Supply and Sanitation Project, Updated up to 25 January 2012. 11"Implementation Progress Report (I" Trimester, FY 2011/12)," Second Rural Water Supply and Sanitation Project, November 2011. 12 "Implementation Progress Report ( 1St Trimester, FY 2011/12)," Second Rural Water Supply and Sanitation Project, November 2011. RWSSPP II- 15"' ISM AM 23 March 6, 2012 4. While the achievements made thus far are significant, the team has expressed concerns over: (i) long-term sustainability of these gains especially after the post-implementation stage; (ii) variations in the utilization of existing provisions13 to aid the poor and disadvantaged communities from scheme to scheme; (iii) differences in representation of HH from disadvantaged groups especially in heterogeneous communities 4 ; (iv) linkages with other institutions, including local government; and (v) low representation of females and those from other disadvantaged groups among the Village Maintenance Workers, SOs staff and SA staffs. II. Social Safeguards 5. On the issue of social safeguards, a standard format for land donation agreement in prescribed formats was introduced from Batch VII onwards for structures built on private land that were voluntarily donated. The Board has developed software for land donation agreement in web-MIS, and it has been agreed that data entry of collected form in MIS will be initiated by March 2012. 6. While the documentation process is underway, a review of Batch VII schemes reveals that the procedures have not been followed through for a substantial number of cases even though during the last review in June 2011 it had been agreed that the formal documentation of land procedures would be completed by end-July 2011 (see Table below). Further, several discrepancies such as incomplete information in the land donation forms, individuals opting for a signed letter instead of using the form, and failure of SOs to secure such land donation agreement, were noted. 7. So far, no formal complaints have been lodged over disputes regarding land issues in the project and the schemes in batch VII have successfully reached post implementation stage. However, during the field visit, it was observed that in some cases, tensions among community members are brewing especially over issues of elite capture of the water points (scheme ???) (e.g., the problem of private land owner barring access or providing only limited access to a particular dug wellto others, private land owners single handedly deciding to change the location of the shallow tube well after a decision taken by the beneficiaries, etc). 8. The team alerted the Board about these problems and suggested that to avoid future disputes among community members, immediate actions are required to formalize the private land donation. A number of remedial actions to address these discrepancies were discussed during the review: (i) quick collection of information from all schemes and analysis of land donation agreements of Batch VII for further action; (ii) mandatory provision to include the standard land donation agreements from Batch VIII for Post-implementation phase contracts that is also tied up with payments; (iii) inclusion of land donation agreements in the training content of the remaining Team Leaders and Field Coordinators of Batch IX schemes. It has been agreed that these suggestions will be tabled, and a decision will be made during the Division Chiefs' Meeting and the Technical Appraisal Committee's meeting, both of which will be held by the end of February 2012. Table: Progress Status of Land Donation Agreement (Batch VII onwards) F 14th ISM 15th ISM Cumulative Progress as of Progress Progress February 3, 2012 " The Board provides 50 percent subsidy to poor and disadvantaged communities in cash contribution. '4 While in total, the representation of households/members from disadvantaged groups like Dalits and Janajatis has been significant, it is a relative proportion that depends to a large extent on the composition of beneficiary population in the settlements covered by the project. RWSSPP I- 15' ISMAM 24 March 6, 2012 1 Source 0 2 2 2 Reservoir Tank (RVT) 40 6 46 3 Intake 16 8 24 4 Break Pressure Tank (BPT) 0 4 4 5 Interption Chamber(IC) 0 1 1 6 Distribution Chamber 0 1 1 7 Section Valve 0 2 2 8 Tap 101 241 342 9 Overhead Tank 0 0 0 10 Deep Tube well Tank 0 4 4 11 Dug well 0 0 0 12 Shallow Tube well 0 106 106 Total 157 375 532 III. Project Studies 9. Most of the long pending studies under the project have now been either finalized and submitted to the Bank, or are progressing towards completion (See Table below). It has been agreed that the "Technical, Operational and Environmental Audit Study for Batch VI and VII" and "Short-term Sustainability Study of Batch V" will be initiated by end of March 2012 while a draft report of the "Long- term Sustainability Study of Batch III and IV" and the published version of the "Annual Report 2010-11" will be ready by end of March 2012. However, the special study on water demand consumption and pattern, envisaged under the project, is yet to be initiated. 10. The team also reviewed and provided recommendations on the ToRs prepared to conduct an independent study on Gender and Social Inclusion, and the Indigenous Peoples' Development Plan. The need for such an analysis was identified in the recommendations from the recently completed report, "Impact of RWSS II Efforts for Social Inclusion and Gender Equity." It has been agreed that a revised ToR will be prepared and submitted to the IDA for review by the end of February 2012. Table: Status of the Social Assessment Studies Study topic Target date for Draft Target date for submission of submission of report revised report draft report shared (14" ISM) during the 151 ISM Impact Assessment Studies for June 2011 Yes Revised report shared on July 31, entire project (Batch V to Viii) 2011 Independent Study on Gender and July 15, 2011 Yes Final Report shared on August 15, social Inclusion Completed. 2011 Impact Assessment Report on Draft ToRs shared No Finalized ToR by end-February Gender and Social Inclusion 2012 Immediate CDA impact study for Draft report Yes Study completed and submitted to batch VI and VII expected by June the IDA along with the Executive 20, 2011. Summary Technical, operational and June 2011 Yes Report completed and submitted RWSSPP II- 15"' ISMAM 25 March 6, 2012 Study topic Target date for Draft Target date for submission of submission of report revised report. draft report shared (14 ISM) durin the 15' ISM environmental Audit study - to the Bank Batch V Technical, operational and June 2011 No September 2012 environmental Audit study - [Delayed. Batch VI and VII However, RFP issued, and study will be initiated by end of March 2012] Long Term sustainability study RFP was issued No Draft Report by end-March 2012 Batch Ill and IV and field work Final Report by October 2012 ongoing Short Term sustainability study ToR being No Study to be initiated in March Batch V finalized, RFP 2012 issued. Annual Report 2010 Complete. Yes Annual Report 2011 to be I I_ I published before mid-March 2012 IV. ImprovingProjectSustainability 11. The last review had made several recommendations to address some of the post-implementation stage concerns that affect the sustainability of the project including: (i) ensuring that all essential documents belonging to the community and WUSC is in their possession; (ii) conducting refresher training on WSUC rules and charters, community roles and responsibilities in maintaining the infrastructure, water quality monitoring, etc; (iii) linking credit groups with Banks and markets; (iv) up- scaling of pilot insurance of WS schemes; e) strengthening participatory monitoring and evaluation by communities. These suggestions have been taken into consideration and several strategies such as registering WSUCs as cooperatives, linking credit groups with Nepal Rastra Bank (NRB) and assisting them in accessing the Rural Self-Reliance Fund instituted by the NRB, have been initiated. However, progress on the innovative activities undertaken by the Board to link the women's (WTSS) groups with mico-credit organizations and help them develop commercial business development opportunities (Jeevika Karyakram) have been limited. The Board has not been able to sign the MOU with the IDA assisted livelihoods "JEEVIKA" project in Bihar, India, for community professionals from Bihar to provide back-stopping support to the Jeevika groups in Nepal. 12. Similarly, to ensure the sustainability of schemes, a plan had been developed to insure 1,000 water supply and sanitation schemes against natural disasters (i.e., scheme insurance). A brochure on insurance of schemes was ready by the time of the review. However, the number of schemes insured has not increased beyond 35. Some of the reasons mentioned included: lack of adequate incentives for insurance agents because of limited business volume, lack of interest among community members, etc. To address this concern, the Board is revisiting its approach by seeking linkages with insurance companies, RWSSPP II- 15" ISMAM 26 March 6, 2012 making scheme insurance mandatory for schemes under the implementation phase, and sensitizing community members on the values of having both life- and non-life insurances. V. Agreements and Follow-up Actions Activities/Actions A reed Dates 1. Enter information on land donation into the MIS Completed by end-March 2012 2. Decision on outstanding land donation forms End-February 2012 3. Draft ToRs for Gender and Social Inclusion Impact Assessment End-February 2012 4. Technical, Operational and Environmental Audit Study (Batch September 30, 2012 VI and VII) Draft Report by end-March 5. Long-term Sustainability Study (Batch III and IV) 2012, and final report by October 2012 6. Short-term Sustainability Study (Batch V) Study initiated by March 2012 Published before mid-March 7. Publication of Annual Report 2011 2012 RWSSPP II- 15* ISMAM 27 March 6, 2012 Annex 6 NEPAL: SECOND RURAL WATER SUPPLY & SANITATION PROJECT (CR. 3911-NEP AND IDA GRANT NO. H 369-NEP) Financial Manaaement 1. Budget for FY2011/12 and Estimated Expenditures as of May 31, 2011: The approved budget for the Rural Water Supply and Sanitation Fund Development Board for FY2011/12 is NRs.1,060.94 million, which is about 7% less than the FY2010/11 allocation. IDA financing in FY2011/12 has been reduced by 2%, and the government's share increased by about 10%. Of the total proposed budget, NRs.1,011.48 million (95%) is to be funded by an IDA grant and NRs.49.46 million (5%) by GON, as counterpart funding. ThePproposed counterpart fund allocation is to finance 85% of incremental operating costs. The Board's budget is allocated under the new budget codes as follows: Recurrent Budget 337173 and the Capital Budget 337134. The budget also includes the implementation phase of Batch IX which is not covered under the project scope of the IDA Grant H369-NEP. The category-wise allocation is as follows: NRs. Million IDA GRAND % Change Category Grant GON TOTAL over FY2010/11 1 (a) Development Phase 197.81 0 197.81 37% 1 (b) Implementation Phase 635.19 0 635.19 -13% 2 Goods, Consulting Services, 169.75 0 169.75 9% Studies, Training, Workshop and Study Tours 3 Incremental Operating Costs 8.73 49.46 58.19 10% TOTAL: 1,011.48 49.46 1,060.94 -7% 2. The team noted that the counterpart fund allocation is adequate. The credit allocation (Cr.391 I- NEP) of the Project has been fully utilized. 3. Total expenditures as of January 25, 2012 are only NRs.38.9 million, which is about 3.7 % of the approved budget. With this trend and based on implementation progress, by the end of fiscal year, only about 60% of the approved budget is expected to be spent. In view of the fact that the project is closing on August 31, 2012, the Board will have to place top priority to ensure that all committed contracts complete the jobs by the end of the closing date so that the funds committed can be disbursed. IDA Disbursements and Expected Scenario by the Current Closing Date: 4. As of January 31, 2012, total disbursements from the IDA credit are about US$ 26.15 million. This is 100% disbursement from the credit allocation which has been fully utilized and documented. Total disbursements from the IDA grant are about US$17.25 million or about 79% of the grant allocation. Excluding the outstanding advances in the Designated Accounts, the actual use of grant funds is only about 41%. Combining credit and grant allocation, the total resources used is about 90%; but when netted against the remaining advances in the Designated Accounts, the actual use of funds is about 72%. Based on current progress, the team estimates about US$2.50 million would remain undisbursed by the end of the current closing date of August 31, 2012. The savings are due to exchange gain of US RWSSPP II- 15" ISM AM 28 March 6, 2012 Dollar vis-i-vis Nepalese Rupees, actual costs of works and goods being lower than the estimated prices. All physical targets of the Project are expected to be completed by the closing date. 5. Financial Management: Overall, the Board has continued to maintain a good financial management system. The team reviewed the system as well as the transactions and records based on the information provided in the first trimester Financial Monitoring Report of FY2011/12. They were found to be satisfactory. The FMIS system in the Board is fully operational and is reliable. The internal control and checking of financial information has worked well. During the review, the team suggested some improvements in terms of keeping the original documents with the vouchers. 6. In order to improve overall financial management, the Board discussed/agreed with the Bank team the following: * The Board has now amended the Operational and Financial Management Manual based on the recommendations of the impact study. The Manual has also been translated into Nepali. * The Board will carry out the training program more frequently tying it up with the contract awards, and it was agreed that a trainingplan would be preparedand sharedwith IDA 7. InternalAudit: The Board extended the contract of the existing Internal Auditor for FY2011/12. The team reviewed the internal audit report of FY20 10/11. The report has suggested the following actions: (1) Improve the budget control system to ensure that expenditures do not exceed approved budget, (2) Any deviation from adopted accounting policy should be disclosed in the accounting policies, (3) Procurement of goods and services should be done from the suppliers registered with the Inland Revenue Office, (4) Deduct tax at source as per the provisions of the Income Tax Act, and (5) Ensure compliance with the Accounting Manual related to making payments through accounts payee checks, and checking controls on advances to staff. The Board management has committed to address these shortcomings. The first internal audit report of FY2011/12 has not yet been completed, and is expected to be completed in February. 8. Implementation Progress Report: There are no outstanding progress reports. The review team discussed the first trimester financial monitoring report of FY2011/12. The team made some comments on the draft report, and the revised financial report will be submitted by February l O. The first trimester report will not trigger any disbursement as there are sufficient fund balances in the Designated Accounts. The review team reminded that the second trimester report for FY2011/12 is due on April 30, 2012. 9. Audit Reports: The audit report of FY2010/11 is now overdue 5 . The review team was informed that the audit has been completed and the report is expected by the end of February, 2012. The team reviewed the preliminary observations and no significant issues have been raised. The review team also reminded the Board that the unaudited accounts of FY2011/12 is due on October 15, 2012, and the audited accounts on January 15, 2013. 15 A warning letter was issued on February 10, 2012. RWSSPP II- 15"' ISMAM 29 March 6, 2012 Attachment I NEPAL: SECOND RURAL WATER SUPPLY & SANITATION PROJECT (CR. 391 1-NEP AND IDA GRANT No. H 369-NEP) LIST OF PEOPLE MET National PlanningCommission (NPC) 1. Hon'ble Vice Chairman, Dr. Deependra B. Kshetry 2. Mr. Gopi Nath Mainali, Joint Secretary 3. Bhagwan Aryl, Under Secretary a. Ministry ofPhysicalPlanningand Works (MPPW) : 4. Mr. Tulasi Prasad Sitaula, Secretary 5. Mr. Hari Prasad Sharma, Joint Secretary/ Board Member 6. Mr. Ramesh Bista, Joint Secretary 7. Mr. Puma Upadhyaya, Divisional Engineer/Chief RWSS Sector M&E Unit b. Ministry of Finance (MoF): 8. Mr. Lal Shankar Ghimire, Joint Secretary, FACD 9. Mr. Yugal Kishor Gautarn, Section Officer, FACD 10. Ms. Sushila Acharya, Section Officer, FACD c. Rural Water Supply and SanitationFundDevelopment Board: 11. Mr. Ramesh Dhamal, Board Member 12. Mr. Ram Adhar Kapar, Board Member 13. Ms. Pramila Gachhadar, Board Member 14. Mr. Maheshwar Prasad Yadav, Executive Director 15. Mr. Manoj Kumar Lal, Deputy Executive Director 16. Division Chiefs, Regional Managers, Portfolio Managers and other Staff of the Board RWSSPP I- 15' ISMAM 30 March 6, 2012 Attachment II NEPAL: SECOND RURAL WATER SUPPLY & SANITATION PROJECT (CR. 3911-NEP AND IDA GRANTNO. H 369-NEP) FIELD VISIT 1. A Bank team comprising Mmes./Messrs.: Silva Shrestha, Drona Ghimire, Bandita Sijapati and Tashi Tenzing visited Batch VII and VIII schemes in Dhanusha, Siraha and Udaypur districts of Central and Eastern Development Regions between January 24-27, 2012. The Bank team was accompanied by Maheshwar Yadav, Executive Director, Harish Chandra Neupane, Regional Manager and the respective portfolio managers of the Board Secretariat. Respective Support Organization Staff joined the team in the field. Similarly, Messrs. William Kingdom and Tashi Tenzing visited a scheme in Dhading District on February 5, 2012. Messrs/Mmes. Ramesh Bista, Joint Secretary, MPPW, Bhagwan Aryal, Under Secretary, NPC; Sushila Acharya, Section Officer, MoF and the Executive Director and other relevant staff/consultant of the Board Secretariat also visited this scheme. Mr. Ramesh Dhamal, Board Member representing NAVIN, representatives of DDC and VDC also joined the field visit program in Dhading. The details of the schemes visited are as follows: Parsuran Aarubastar Yagyabhumu Bagaha Chaufal Chaundadi talaw Darimtar Scheme Name WSS WSS WSS WSS WSS WSS Batch VII VII VII VIII VIII VIII District Dhanusha Siraha Udayapur Udayapur Dhanusha Dhading Village Development Mithilesh Salang Committee Yagyabhumi Karjanha Triveni Chaundadi wor Wards covered 1&9 6&7 2 4 3,4 & 5 7&9 No of Households 265 273 121 100 286 56 11/20/2011 Scheme one month completion earlier than date/ongoing 12/3/2010 planned Support Organization WDSC RUCC SBYCB SWG PRDAPS SKSSL The main observations of the team during the field are as follows: 2. Yagyabhumi Water Supply and Sanitation Scheme -16 dug-wells fitted with hand pumps have been constructed to cater to 265 Households (one dug-well typically serves about 15 households) under this scheme. The quality of construction of all wells visited were found to be satisfactory - each well has a raised apron around it and is covered to protect the water from being contaminated. However, the system is not properly used. All the wells visited had the cover partially open to allow a rope and bucket system or a submersible electric motors (more than one) installed to haul/pump water from some of the wells. The users informed the team that as the water table in a few wells had gone down, the hand pumps was found to be ineffective; thus they are using either the bucket and rope system to haul water or motorized pumps. One issue reported was that the washer of the Mark III handpump wears out after 3 to 4 RWSSPP I- 15l'ISMAM 31 March 6, 2012 months and the community is unable to purchase the washer locally. The drawdown of the water table could be an indication of the potential risk of the well drying up in the future. The team observed that while the water from the dug-wells may not be inadequate for drinking it becomes inadequate as there is demand for irrigation water. This is aggravated by in-migration to the community from other villages which could lead to future conflict in the scheme area- The quality of water has been tested. Test results show that arsenic, iron and manganese are within permissible limits, however, E. Coli is present in the water from almost all wells. This has not been communicated to the users nor has measures, such as in- home treatment or disinfection at the source (well), to deal with the bacteriological quality of water have been considered in the community so far. The infrequent meeting of the WSUC and the fact that efforts to collect regularly a fee from the households for O&M are of concern. The community had received NRs. 50,000 from the VDC for the scheme which was put in as part of community contribution. 3. Bagaha water Supply and sanitation Scheme. The scheme consists of 29 Shallow Tube-Wells (STWs with handpumps serving 279 households). Some houses in the community were using STWs before this scheme by tapping the first aquifer at a depth ranging between 15 ft to 25 ft. Water from these aquifers contain high level of iron. The handpump tube wells provided under the current scheme draws water from deeper aquifers at 30 m to 40 m and until now the water from this depth has not been found to contain iron. These handpump tube wells were constructed quite well with tidy looking platforms. However, there were no drainage pipes to drain the wastewater away. Water quality tests shows that physical and chemical quality is satisfactory (within WHO and Nepal government standard). However, biological quality shows presence of E- Coli. The users were unaware of this and so are not taking any measures, such as boiling, to deal with the quality issue. It was also observed that some of the toilets constructed were too close to the existing tube wells. An institutional latrine has been provided for the school (with separate provisions for girls and boys). One concern related to the school toilet is its cleaning and maintenance. The team observed that the community also had many private handpumps and the location of the tubewells constructed under the project may not be convenient for all beneficiary households. 4. Chaufal Water Supply and Sanitation Scheme. This is a lift scheme using a sump-well serving 121 households with 20 community taps. A 6 m deep sump well has been constructed by the Kali Khola. The sump area is protected by barbed-wire fence. Removable wooden planks, with holes in it, are provided as a cover for the sump well. From a hole made on the side of the sump well a pipe is fitted to pump water to a school across the river. The holes on the side of the sump well and cover greatly increases the possibility of external pollution of the sump well (source) water by elements such as dust, leaves, insects as well as run-off water entering the sump well. Water quality tested in the implementation phase shows that physical and chemical quality of water is satisfactory, but the bacteriological quality is not satisfactory - there is E- Coli present. The consumers are unaware of the quality of water. It has also been noted that the sump-well location is prone to possible river bank cutting by flood. The issue has been discussed with the community. The community is pumping and distributing water only for I hour per day primarily because of the high electricity cost for pumping. The team also observed that some tapstands have been added in the system after the scheme completion. This raises a question of about the participatory need assessment that should have been done in the Development Phase when the number and location of tapstands should have been agreed. Indiscriminate addition of tapstands could affect the equitable distribution of water and thereby the technical sustainability of the scheme. 5. Chaudandi Water Supply and Sanitation Scheme. This is a gravity scheme in the hill with 23 community taps serving 100 households. The spring source is fenced to protect it from unauthorized entry by human beings and animals. A gabion wall protects it against flood from the stream. The source has excess water which is shared with a downstream community. The review team advised the community to have a clear written agreement with the downstream community on the allocation of the water from this source in order to avoid possible future disputes. The toilets tidily constructed under the schemes were RWSSPP I- 15' ISMAM 32 March 6, 2012 well maintained. The tapstands provided with platforms and drainage pipes were also found to be tidy. The quality of water is yet to be tested after completion of the scheme. (The test during development phase shows acceptable quality of water as per WHO guidelines and Nepal Government Standards). A part of the transmission main passes through a spot with risk of landslide. Two WTSS groups have been formed in the scheme- one with 24 members and the other with 31 members. The first group was re- formed by adding members to an already existing group in the community. However, the new members to this group had to pay the total amount already collected by the existing members. The team believes that this stipulation could have limited the access of many households to the WTSS group. Also, the community has an active Jagaran (Social Accountability) committee. It was, however, not clear whether the committee members were provided adequate orientation/training on their roles. This community has been declared Open Defecation Free. 6. Parsurantalaw Water Supply and Sanitation Scheme. The scheme consists of 47 Shallow Tube-Well (STW) with handpumps serving 279 households. A tubewell and an institutional latrine (with cubicles and urinals for boys and girls) have also been provided to the school situated in the community. There was tremendous appreciation by the school of the contribution to it under the scheme. However, at the community, how the locations of the handpump tubewells were decided was a matter of concern to the team. Many of the handpump tubewells were placed within the private property and the neighboring households, (beneficiary households of the same handpump tubewell) were drawing water from another location further away from their houses. It was also apparent that only few households had provided cash contribution in the implementation phase. Social mobilization was found to be weak. The team learnt that rather than collecting equal contribution for a handpump tubewell from all the beneficiary households, the installation of the handpump tubewell proceeded when the total amount (NRs. 3,500/=) was collected, even if it was provided by one individual. This has resulted in a certain level (to some extent perceived) capture of the facility. The team discussed this with the Board staff and requested them to address this issue. The team strongly recommends that the Board ensures that during the milestone monitoring of the schemes, the process monitoring aspect also be given equal importance to avoid such situations. 7. Aarubastar-Darimtar Water Supply and Sanitation Scheme. This is a gravity system with metered yard connections for each of the 56 households. The Board has piloted providing yard taps instead of standposts. During the field visit, the people were extremely happy with the services; ownership of the scheme was very high. In fact, the community had purchased the water source and had the land legally transferred to the water supply and sanitation group (WSUC had the Lal Purja). The community contributed some NRs. 871,000/= additional for a GI suspended crossing, to increase the capacity of two ferro-cement tanks (from 4 and 5 cum to 12 cu m. each) and the size of pipes over that designed for standpost supply, and for construction of individual yard tapstands. The community has also mobilized cash from the VDC. The WSUC was lead by the youth of the village and they demonstrated exuberance of youthful energy for the development of their village. All the 56 houses had constructed toilets and some of them were connected to biogas plants. There are two WTSS groups with 56 women members and the group is making use of its funds for income generation activities. Two VMWs have been recruited and are being paid NRs. 750/= per month. Each household pays a flat sum of NRs. 10/= per month for O&M and NRs. 30/= per month for consumption upto 20 units; thereafter, the tariff is NRs. 5/= per unit of water consumed. Coordination with the DDC and VDC was also good; the VDC had contributed NRs. 100,000/= for the scheme. The WSUC was very appreciative of the support provided by the SO, Sana Kisan Sahakari Sanstha. This scheme is a successful model and is expected to be sustained as the youth leaders are committed to the scheme and development of the village.