85660 Aide Memoire 1. A World Bank mission1 visited Malawi over the period July 31 to August 15, 2013 to carry out an implementation support mission for the Second National Water Development Project2 (NWDP II).The objective of the mission was to undertake a mid-term review of the implementation of the Additional Financing, ahead of the Project closing date of October 31, 2015 in order to assess progress on the Project and agree any necessary mid-course corrections. 2. The mid-term review is based on the mid-term report prepared by the Ministry of Water Development and Irrigation (MWDI) and submitted to the Bank prior to the mission, and other documents submitted by the Program Management Unit (PMU) and Implementing Agencies. The review also draws from a number of previous technical missions and focused reviews such as: post procurement review, independent procurement review and safeguards review. The mission visited many of the project sites in three mission teams to the north, center and south of Malawi. The Bank team met representatives from the Ministry of Finance (MoF), MWDI, PMU, the five Water Boards, District Councils, beneficiary communities, Development Partners, consultants and contractors. A list of people met is in Annex 1. The team very much appreciates the hospitality and cooperation it received from the Malawian authorities. Table 1: Key project data – IDA (credit 43070 and grant 2940) and AF (credit 4946 and grant H690) Board date May 24, 2007 Original amount USD 50 million eq. Additional Finance (AF) board date June 2, 2011 AF original amount USD 120 million eq. Closing date October 31, 2015 Total USD 170 million eq. Time remaining 2 years 2 months Disbursed amount USD 90.8 million Percentage disbursed 55% Data from Client Connections August 11, 2013 3. Overall performance: The Bank team concluded that implementation of the project is satisfactory. The mid-term review assessed that the project is likely to meet its development objectives. Implementation progress is satisfactory and 55% of the total financing has been disbursed and 69% committed. Components A, B and E are rated satisfactory. Component C and D are rated moderately satisfactory due to implementation delays. Procurement, Monitoring 1 The mission comprised Michael Webster (Task Team Leader),Solomon Alemu (Technical oversight and pre- mission leader), Zvikomborero Hoko (Component A), Elias Chimulambe (Component B), Pieter Waalewijn (Component C), Benson Nkhoma (Component D), George Namazinga (Component E), Steven Mhone (Procurement), Lynette Macadam (Procurement Assistant), Trust Chimaliro (Financial Management), Annie Jere (Team Assistant), Kristine Schwebach (Social Safeguards – led a safeguards mission in May 2013), George Ledec (Environmental Safeguards), and Webster Muti (Safeguards). 2 The Project is part of the National Water Development Program which is partially financed from IDA, Africa Catalytic Growth Fund (ACGF), the Government of Malawi and other Development Partners (AfDB, AusAid, EIB, EC, OFID and UNICEF). 1 and Environmental Assessment are all rated satisfactory. Financial management is rated moderately satisfactory as the covenant on arrears is not in compliance. Involuntary resettlement is also rated moderately satisfactory. A summary of the Bank’s internal rating systems is below for information. Table 2: Project ratings Previous This Previous This mission mission mission mission Likelihood of meeting objectives S S Procurement S S Overall implementation progress MS S Financial Management S S Component A MS S Monitoring and Evaluation S S Component B S S Counterpart funding S S Component C MS MS Environmental Assessment S S Component D MS MS Involuntary Resettlement MU MS Component E MS S Overall safeguard compliance MS MS Ratings: HS (highly satisfactory), S (satisfactory), MS (moderately satisfactory), MU (moderately unsatisfactory), U (unsatisfactory), HU (highly unsatisfactory) 4. Project covenants: The Additional Financing amended Financing Agreement revised and restated a number of covenants. While most covenants are in compliance, as summarized in table 3 below, the Project is not in compliance with two key covenants: (i) public sector payments are not in compliance due to significant arrears owed to all Water Boards. This is a recent development and detailed in paragraph 8 and the Minister of Water Development and Irrigation confirmed to the mission that these outstanding arrears would be paid within 6 weeks of the mission; and (ii) one of the five water boards, Central Regional Water Board (CRWB) has an operating ratio is 0.84, significantly less than the required 1.1 which is largely due to outstanding public sector arrears owed to CRWB. Table 3: Project covenants Financing Revised description of condition/covenant Status (August Agreement 2013) Reference Section I, B, The obligation of the Project Implementing Entity to: (A) maintain for each of Partial. 4 Water H its fiscal years after its fiscal year ending on June 30, 2011, a ratio of total Boards have operating revenues to total working expenses not lower than 1.1; complied, but CRWB has not Section I, G The Recipient shall ensure that all expenditures for the use of water incurred Not in compliance. by its ministries and other public institutions are paid to the respective Project MK 1.6 billion Implementing Entity within [90 days] of the date of billing of said arrears to Water expenditures by said Project Implementing Entity. Boards Schedule 2, The Recipient shall maintain, throughout Project implementation, the Project In compliance Section 1 A. 3 Management Unit, with adequate staff, resources and terms of reference, satisfactory to the Association, to be responsible for overseeing and coordinating day to day implementation of the Project. To this end, the Recipient shall ensure that the staff shall at all times include a program manager, procurement specialist, accountant, rural water specialist, water supply and sanitation engineer, community participation specialist, monitoring and evaluation specialist and a water resources management specialist. 5. Project restructuring: As a result of the discussion and agreements during the mid-term review, the Government is likely to send to the Bank a request to restructure the project. The 2 restructuring will be based on three proposed changes: (i) reallocation of funds. The Government is likely to reallocate funds between components and within components to adjust to the exchange rate impact on the project (the project has US$ 6 million less than the amount at appraisal due the strengthening of the US$ against the SDR), actual vs. estimates costs and changes during implementation. A first draft of the likely reallocation between components is show in Annex 10; (ii) adjustments to the Results Framework: due to some of the (minor) changes in scope, the project targets will need to be adjusted; and (iii) the project may need to adjust from an environmental category B to category A to cater for the proposed investment in Lilongwe, the raising of the Kamuzu Dam 1 level. 6. Results: The objectives of the Project are to increase access to sustainable water supply and sanitation services for persons living in cities, towns, villages and Market Centers and to improve water resources management at the national level. A total of 746,860 people have benefited from new and improved water supply against a target of 2,296,825 (33%), up from 697,150 people in November 2012, and 35,525 with improved sanitation against a target of 62,380 (57%). The Government presented to the mission a revised Results Framework, taking into account changes in scope, reallocations, and more realism in monitoring of the indicators. Most of the proposed indicators remain, however, with minor changes in targets. The proposed revised Results Framework is in annex 2, and a summary of a few key indictors is provided in table 4 below. The Government will formally submit a revised Results Framework together with the restructuring request. Table 4: Selected performance indicators cumulative Indicator Target (achieved to- date) People provided with “improved water sources” under the project rural 2,296,825 746,860 33% People provided with access to “improved sanitation” under the project total 62,380 35,525 57% Water Boards maintain a working ratio (collected revenues /cash number 5 4 80% operating expenses) not less than 1.1 Number of Water Users Association established under the project number 21 17 81% Water resources Investment Strategy satisfactorily completed number Yes Yes 100% Project Beneficiaries number 2,395,325 782,385 33% 7. Disbursement: 55% of the combined project funds have been disbursed, up from 22% in November 2012. This represents an increase in disbursement from US$ 45 million to US$ 90 million (doubling) over the past 8 months), a dramatic increase as can be seen from the disbursement graph on the right, and exceeding the projections estimated by the PMU.The closing date for current IDA and Additional Financing is October 31, 2015 and 100% of the funds are expected to be disbursed prior to closing date. 3 Table 5: Disbursement Original Amount Original Amount Approval Date Disbursed (USD) Undisbursed Disbursement Disbursment In SDR (USD Eq) Balance (in USD) November 2012 August 2013 Orginal IDA 33,400,000 50,000,000 24-May-07 43,920,556 6,353,201 66% 87% AF 75,800,000 120,000,000 2-Jun-11 46,830,402 68,650,898 10% 41% TOTAL 109,200,000 170,000,000 90,750,958 75,004,099 27% 55% 8. Public sector arrears owed to the Water Boards: The mid-term report notes that the outstanding public sector arrears owed to the Water Boards as of the report (March 2013 figures) was MK3.4 billion. The mission was pleased to learn that the figure was reduced to MK1.6 billion by June 30, 2013; however this still remains a major issue. One of the key covenants to the Financing Agreement for the Additional Financing is to ensure there is no current government debt to the Water Boards, whereas this issue has been pending for some time. The mission urged the Government to pay all outstanding arrears to ensure compliance with the covenant. 9. Procurement: The mission was pleased to note that most works contracts are progressing well with most under the original financing complete. Most packages under Additional Financing have been procured with contracts signed and implementation is in progress. However procurement in components C and D is lagging behind and there is the possibility that some activities may now be on the critical path. 10. Contract management: The mission noted that most of the works contracts have not been completed in time. Those that are ongoing have a significant portion either already in extension period or progress behind with the potential to go over the initial contract closing dates. The cause for this (among other things) has been (i) poor management of consultants and contractors by the Water Boards and ineffective backstopping/oversight by government; (ii) turnaround time to conclude on specifications especially by consultant (e.g. Walker’s Ferry and Zomba and Mangochi water scheme); (iii) Connection to power supply (Mponela and Kochilira); (iv) absence of key staff of consultants on the ground; and (v) the failure by LWB to stop further work on detailed design and ESIA by the two consultants working on the aqueduct following the indications by the consultant in June 2013 that the implementation of the raw water conveyance system was technically and economically not feasible. The delays in completion of the activities in time have been the main driver for cost overruns and scope reduction in some cases. 11. LWB to drop the aqueduct investment: LWB informed the mission that due to cost issues, they have decided not to continue to seek financing under the Project for the aqueduct intended to protect water quality from the dam. The mission agreed to the request, and confirmed that this change will not impact the achievement of the Project Development Objectives significantly. However, LWB would like to pursue an investment to raise the height of Kamuzu Dam 1 by 5m to increase raw water availability to the city by 30,000 m3/day. The mission agreed that LWB should immediately assess the hydrological and structural viability of the proposal, and if feasible, complete the design and ESIA; however the Government would need to decide whether to finance the investment under this Project depending on competing priorities, budget and the timing of construction. As detailed in the action table, LWB and the Bank agreed to a set of actions necessary in order to decide whether to go ahead with the investment by February 2014 or not, based on the readiness of the project, and the likelihood of completing prior to the closing date. 4 12. Progress on institutional reform component: Both MTR report prepared by the Government and the mission noted that component D is lagging behind and resource commitment is subsequently very low at 9% of its allocation. Key activities such as regulation of the water supply service which currently involves establishing a monitoring and benchmarking system, implementing the revised Corporate Charters between MWDI and the Water Boards, capacity building through training, preparation of the fiduciary framework for the institutionalization of SWAp need renewed focus from the management of the Ministry. The mission stressed the need for improved oversight for component D to ensure that all the planned activities will be completed by the close of the project. The Director of Administration was therefore mandated to champion the delivery of this component. 13. Sector Wide Approach: The sector continues to reposition itself to institutionalize the Sector Wide Approach (SWAp) as part of implementing the Government policy. Currently, the sector undertakes annual Joint Sector Reviews which provide a good opportunity to address the issues with a broad range of stakeholders in the sector. There is need for a clear direction on SWAp, sector decentralization and sector investments post 2015 over the coming period. 14. Financing of new water sources for Blantyre and Lilongwe: Two of the most critical investments in the sector remain the new water sources for Blantyre and Lilongwe Water Boards. Under the Project, designs and EIAs are being prepared for both new sources, however currently there is no financing secured for the investments. The International Finance Corporation (private sector arm of the World Bank Group) recently presented to MWDI a concept for a potential Public Private Partnership for the Lilongwe new water source. The Government should inform the IFC (and World Bank) whether it wishes to pursue this further. 15. Future potential investments: The Government informed the mission of numerous priority investments that would benefit from Bank financing after completion of the Project in 2015. Many of the projects prepared under NWDP – such as the detailed designs of the dams – would need financing, and other activities piloted under NWDP – such as scaling up the rehabilitation of the gravity-fed rural schemes. New activities, in particular catchment management to avoid further degradation of the water sources, would also be a high priority. 16. COMPONENT A: Urban, Towns and Market Center Water Supply. Progress summary: There has been considerable improvement in project implementation since the last mission even though there are still some challenges in contract management, which are being addressed. The performance of component A is thus rated as satisfactory. 17. Original Financing: Procurement of all planned works, goods and consulting services contracts under original financing have been completed under all five Water Boards. Regarding implementation, all contracts under NRWB and LWB have been fully completed; BWB has only one contract (Rehabilitation of Mudi treatment plant), which was signed recently, which is under implementation; for CRWB two works contracts, Kasungu WS which is ongoing and Salima 5 Lakeshore WS Expansion (Lot 1) which has been signed3; and under SRWB, two works contracts are under implementation but with considerable delays. Close follow up is required on the implementation to ensure that there are no further delays. The summary under each WB is shown in the table below: Table 6: Component A procurement – original financing Water Board No. of No. of signed Estimated cost Actual contract planned contracts (USD) amount (USD) contracts Blantyre WB 24 24 4,820,000 4,769,277.81 Lilongwe WB 7 7 2,485,000 2,486,722.65 Central RWB 11 11 6,530,000 6,540,366.70 Northern RWB 15 15 7,380,879 7,344,864.13 Southern RWB 9 9 8,086,133 8,063,739.42 Total 66 66 29,302,012 29,204,971 18. Additional Financing: Procurement of all planned activities under four water boards (BWB, CRWB, NRWB and SRWB) have been completed. Under LWB, there are three outstanding activities yet to be procured – construction of 100 kiosks, installation of pipes for Air-wing project, and construction of raw water conveyance Aqueduct. The first two will be procured shortly following delivery of pipes and fittings while the raw water conveyance aqueduct has been found to be technically and financially not feasible and LWB has proposed its cancellation and instead proposed the use of the resources for raising KDI to increase raw water supply. Before embarking on the raising of KDI, there is need to first carryout a thorough hydrological analysis to ascertain the availability of the 30,000 m3/day that the proposed raising will make available, then carryout a robust design for the raising of the dam and the accompanying ESIA. It was agreed that these tasks for raising the dam will be reviewed before the clearance for commencement of the procurement process of the works for raising the dam will be provided. Out of the signed contracts under Additional Financing, the construction of Mzimba water intake weir and related transmission pipe works under NRWB, and the detailed design and ESIA for the raw water conveyance aqueduct under LWB have been completed. All the other signed contracts in all the Water Boards are at various stages of implementation. Details are provided in Annex 3. The summary under each Water Board is shown in the table below: Table 7: Component A procurement – additional financing Water Board Planned Signed contracts Estimated cost Contract amount contracts (USD) (USD) BWB 4 4 21,020,000 20,970,057.29 LWB 10 8 21,500,000 8,042,744.82 CRWB 5 5 11,770,000 11,342,803.97 NRWB 7 7 12,800,000 12,570,600.00 SRWB 7 7 17,500,000 16,938,410.60 Total 33 31 84,590,000 69,864,616.68 3 See environment section for agreement on requirements for EMP prior to implementation of this contract. 6 19. COMPONENT B: Sanitation and Hygiene: Overall progress on sanitation and hygiene is satisfactory. Dedza school sanitation and hygiene promotion has made significant progress on capacity building and hygiene promotion of which 228 school teacher sanitation masters have been trained. An estimated total of 330 000 pupils and 10,000 guardians have been reached with hygiene messages during the campaigns and hygiene school open days. The team is still in electronic communication with the Ministry over whether the targets for sanitation will need to be amended, and this will be confirmed in the final request from the Government on the restructuring. However on works contracts, all four contracts are behind schedule though the mission was pleased with the quality of works. All consultancy services under this component have been commissioned and results made to date are encouraging. The mission singled out the delay in commencement of rolling out sanitation marketing and hygiene promotion in the cities of Lilongwe and Blantyre and that it may not achieve the targets set in this assignment. The NGO contracted for this assignment is using sanitation marketing approach. The mission advised MWDI to ensure that implementation approaches are within the government policies and regulations to avoid conflicts with other similar programs. Further details are in annex 4. 20. COMPONENT C: Water Resources Management: The component showed significant improvement in progress of activities during the course of the review period, and MWDI has initiated and implemented the actions agreed during the June technical review mission, and has nearly completed a number of important activities from the original financing (Kamuzu Barrage Design Review, Multipurpose Water Investments Framework and Tools, agreement on next steps from Water Resources Investment Strategy). Progress under the component is still rated moderately satisfactory with a more positive outlook. If the pace of procurement and contract management is maintained it is expected that the component will be on-track and achieve the intended objectives. The Government’s MTR Report assessed that there are still procurement delays and expresses concerns on ability to complete the activities. It was agreed that continued concerted effort by the Department of Water Resources on smooth implementation will remain critical. A detailed assessment of issues under this component is provided in Annex 5 and the key highlights are:  The New Water Resources Act 2013 was published in the Government Gazette on 9th April, 2013, which is a critical piece of legislation, enabling many long-planned reforms. Support for establishment of the NWRA is an important piece of this. The Ministry has set up a task force, and is procuring TA for this process. Formal establishment is expected before the end of the calendar year.  Scope of work for follow-up work from the WRIS has been agreed to focus on participatory development of Catchment Management Strategies in hotspot water resources areas in Malawi.  Good coordination with SRBMP has been established regarding the finalization of the design of Kamuzu Barrage, and harmonized ToR for Panel of Experts has been adopted. Tendering is expected in September 2013.  Procurement for consulting services for detailed design and ESIA studies for Diamphwe Water Resource Development is in final stage. Once community concerns have been discussed and resolved, these can proceed without delay. Procurement for Blantyre New Water Intake is at shortlisting stage; if procurement follows critical path it is possible to conclude the study under the project. 7  Aerial survey for the Lower Shire has now commenced and should provide information within the next 3 months.  The Component has made savings within its allocation and during MTR the water resources department proposed to include new activities. This has been agreed at the technical level subject to availability of funds and Government’s prioritization. 21. COMPONENT D: Sector Reform and Program Management: This component is rated moderately satisfactory as many key activities are lagging behind. This component supports, in general, sector reforms, training and capacity development and more specifically program management, institutional and governance framework, Sector-wide Approach (SWAp) management, communication, monitoring, evaluation, among others. Because the component supports the interventions across the sector, Planning Division has been championing its implementation. However, the Division has limited capacity to effectively manage the activities of the component. The Government was requested to refocus its effort in improving the management of the component. Significant progress was recorded in the following areas: (i) Water Sector Investment Plan was prepared; (ii) Water Board revised Corporate Charters were drafted and tariff schedules are being worked out for incorporation by the Boards; (iii) media communication materials were developed and aired on public and private radio stations; (iv) Sector Performance Report for the 2012 Joint Sector Review was prepared under the leadership of Planning Division; (vi) a Training Plan is being implemented and 252 staff members have been trained although it was noted that the key capacity gaps of the Ministry and the Water Boards remain a challenge; and (vii) Preparation of draft Sector Strategic Plan (2012-17). Further details are provided in Annex 6. 22. COMPONENT E: Rural Water Supply: There has been significant progress in the implementation of component E, particularly on works under Additional Financing, and therefore the component has been upgraded from moderately satisfactory to satisfactory. There is improved contract management and supervision has been enhanced by MWDI. Works contracts are on track and quality is also commendable. There is need however to speed up installation of reticulation in all schemes to avoid delays encountered in the rainy season. A few activities are still outstanding due to inadequate financial resources. The mission supported the proposal by MWDI to reallocate funds to enable execution of these important planned activities, if the Government sees this as a priority and subject the funding being available. Further details are provided in Annex 7. 23. Procurement: The overall project rating of procurement performance has continued to be satisfactory. Under the original NWDP II US$ 38,124,369 has been committed in contracts whilst under Additional Financing the commitment of US$78,879,895 has been reached and this represents 66%. The Bank congratulates the Government for this commendable work and urges for continued monitoring of existing contracts and completes the remaining procurements under both original NWDP and Additional Financing under the remaining time of the project. 8 24. Financial Management: Financial Management (FM) is rated Satisfactory. The FM Residual Risk Rating remains Moderate. The following were the objectives of the mission: (i) to assess the continued adequacy of the NWDP II FM system, (ii) review the financial status of the five Water Boards. This included assessing their capacity to satisfy the financial covenants to clear trade debtors’ arrears and maintaining current trade receivables and of the Water Boards ability to meet all cash operating costs from collected revenue with effect from 2011/2012. This was a modification of the original covenant which required operating revenue to cover all costs including depreciation and interest payable. It was concluded that the NWDP II Financial Management system was working well as designed. 25. Public sector debt: While all the five Water Boards original arrears had been cleared as at June 2008, all the Water Boards had not managed to stay current on trade receivables as they had started to accumulate new arrears immediately thereafter. As at June 30, 2013 total government debt amounted to MK1.6 billion of which MK852.3 million is 90 days and over. All water boards have substantial government debts in arrears with all of them having more than fifty percent in 90 days and over category. The covenant to clear arrears of water bills and remaining current has not been satisfied. The affected Ministries, Departments and Agencies (MDAs) contend that they are not making regular settlements of water bills because of inadequate funding but Treasury position is that the MDAs are funded and should be able to settle the bills- as a consequence there is an element of ambiguity as to who is responsible for settlement of water bills including arrears. The Ministry of Irrigation and Water Development has proposed that settlement of the water bills including arrears for the affected MDAs should be the responsibility of Treasury and settlement requests should accordingly be directed to Treasury with endorsement from the MDAs. 26. Private sector debt: Total private debt stands at MK2.9 billion as at June 30, 2013, of which MK2.2 billion (78%) is 90 days and over. Even though there is no direct covenant covering private debt, it has a direct impact on the cost recovery covenant which is derived using cash revenue. If private debt can improve to current status only, the cost recovery ratio will improve substantially. All the water boards should endeavor to significantly reduce private debts to current status and consequently increase the cost recovery ratio. 27. On cost recovery ratio covenant, all the water boards achieved a ratio of at least 1.1 except CRWB which has a ratio of 0.84 as at June 30 2013. The CRWB ratio is provisional as the process of compiling the accounts for year ended June, 30, 2013 is still underway. The reason given for the low ratio is the problem of public debts that have significantly accumulated from MK170 million last year to MK317 million this year. 28. Environmental and Social Safeguards: The mission now considers the project’s overall Safeguards rating to be moderately satisfactory. As noted in the recent Social Safeguards Review and Mid-term Review reports, some projects have been undertaken before the required safeguards documents were completed. To ensure more timely compliance with safeguards requirements (thereby promoting improved environmental and social outcomes), the mission indicated that henceforth the Bank expects all No-Objection requests for civil works bidding documents to be accompanied by detailed draft or final versions of the following safeguards documents (whenever they are actually required for the project in question): (i) 9 Environmental Management Plan (when needed, based on the Environmental and Social Screening Form previously filled out for each civil works project); (ii) Resettlement Action Plan (when land acquisition or compensation for assets is needed); and (iii) documents indicating final or pending approval from the Environmental Affairs Department (EAD) (when required under Malawian law) and Forestry Department (when civil works would be within Forest Reserves). To provide advance notice to prospective civil works contractors about safeguard requirements, the mission advised that future No-Objection requests for Expressions of Interest should include standard language that the contract would be subject to the requirements of an EMP and/or RAP, in addition to EAD and/or Forestry approval, as applicable. The mission confirmed that approximately US$ 129,000 remain available following the MTR budget re-allocation for environmental and social safeguards expenses (excluding consultancies), such as in-house formulation of EMPs and RAPs, implementation of EMP recommendations, and environmental and social monitoring during project construction. The mission was advised that the Community Participation Specialist has been assigned as the PMU Environmental and Social Safeguards Coordinator. The mission recommended that the Water Boards and other project Implementing Entities should also appoint staff to implement environment and social safeguards within their areas of jurisdiction. 29. With respect to environmental and social safeguards within specific projects under the NWDP-AF, the mission highlighted the following findings (details in Annex 11): a. Kamuzu Dam 1. The proposed raising of the dam height by 5 meters would lead to the inundation of forested land, although the surface area of incremental permanent flooding still needs to be specified. Unless the incremental area of flooded land is very small, this project is likely to be classified as Category A (requiring a full ESIA) by the World Bank. One environmental issue that will need special attention in the ESIA is whether—and to what extent--the forest area to be flooded should first be cleared and the wood removed, to avoid harming water quality from decaying wood underwater. b. Diamphwe Dam. To take a key step towards addressing the persisting social tensions among people living in the proposed Diamphwe Dam project area, a high-level meeting is planned for 16 August 2013, to include officials from MWDI, Lilongwe Water Board, other Government agencies, District officials, and Traditional Authority leaders, among others. The mission suggested designating a “point person” (perhaps from Lilongwe Water Board) to coordinate the day-to-day details of community relations at the Diamphwe site. c. Shire River Intakes. The planned new Shire River intake for Blantyre’s water supply appears to be quite suitable from an environmental and social standpoint. The construction of this new intake, as well as the planned rehabilitation of the existing Walkers Ferry intake, should use the best available equipment to minimize fish entrainment. d. Salima Water Supply. The RAP has been prepared and revised in response to comments received from the Bank. Preparation of the required EMP is still underway; the mission was advised that the EMP should be completed before the end of August 2013. It was agreed that the civil works would begin only after (i) the EMP is sent to the Bank for review (as required in the NWDP-AF Financing Agreement) and (ii) written approval is received from the 10 Forestry Department (for works within the Forest Reserve). Among other environmental issues, the EMP should specify a precise, environmentally suitable alignment for the new access road to a hilltop storage tank site; the road alignment through this steep, environmentally sensitive area should not simply be chosen by the civil works contractor (who would have an incentive to cut costs). e. Mzuzu Water Pipeline. With respect to a wetland crossing area for a water pipeline in the Mzuzu area, the mission advised NRWB to wait until the wetland is at its driest (within the next few months) before completing this construction. f. Mvula Rural Water Supply (Dedza District). The EMP for this project has yet to be completed, even though the project is in mid-construction. The mission was advised that the EMP would be completed by November 2013, using the safeguards budget currently available in the NWDP-AF. 30. Safeguards Training. The mission announced that the World Bank is organizing a Safeguards Training Workshop in Lusaka, Zambia during 16-20 September 2013, open to project staff from Malawi (as well as Zambia and Zimbabwe). This event promises to be a good opportunity for NWDP staff from the PMU, MWDI, Water Boards, and other implementing entities to acquire further knowledge on applying the Bank’s Environmental and Social Safeguard Policies. The mission asked the PMU Program Manager to compile a list of NWDP staff that are interested, fully available, and would substantially benefit from this training, and to forward this list to the Bank by 19 August 2013. Participation in this workshop will be free of charge, while travel-related expenses could be covered under the NWDP Training Plan (Component D). 31. Catchment Management. As highlighted in the MTR Report, catchment protection and management is a key issue for the sustainability of much of Malawi’s water supply infrastructure. Deforestation, poor hillside cultivation practices, and inappropriate waste disposal methods are degrading water quality and increasing the sedimentation of water supply works. Indeed, many of the water intakes and other works supported by NWDP are at risk from inadequate catchment management; some intakes need to be re-built further upstream because of siltation and poor water quality at the pre-existing intake. It was therefore agreed that a more concerted effort would be made during the remainder of this NWDP-AF, as well as in any future (post-2015) program, to incorporate catchment management efforts within project activities. In the special case of those water supply works located within (or at the border of) Forest Reserves, the mission discussed the potential benefits of more systematic collaboration between the Forest Department and the respective Water Boards and MWDI. As a next step, the mission agreed to review the TOR for upcoming water resources planning and environmental and social impact assessment (ESIA) studies, with a view towards addressing catchment management issues during future projects. The TOR which could be modified to assess catchment management options are those for the Diamphwe Dam ESIA, Kamuzu Dam 1 Upgrading ESIA, and Catchment Management Strategy Development for Selected River Basins (under Component C). The mission agreed to provide to the PMU, by 30 August 2013, any suggested modifications to the TOR of the above-mentioned studies. This mission discussed with MWDI the potential to hire a 11 consultant to provide technical assistance to MWDI to frame the catchment management issue more clearly for potential future support. Meeting with Development Partners: The mission met with members of the Development Partner group that supports the water sector, currently chaired by DFID. The mission informed the DPs of the findings of the mid-term review and discussed issues of coordination in the sector. The following issues were raised by the DPs: (i) Water supply to peri- urban areas in Blantyre remain problematic. In addition to intermittent water supply being experienced in some areas, some residents are unable to pay the charges levied by the Water User Associations and are reverting to using unprotected sources which poses a health hazard for water borne diseases including cholera; (ii) the role of the Sanitation Department in MWDI needs to be reviewed in order to ensure complementarity with the Ministry of Health for sanitation and Ministry of Education for school sanitation; (iii) there was widespread support for the continued assessment of the potential and modalities for a sector wide approach. Action By Whom By When General 1 Submit restructuring request, including budget MoF September 30, reallocation and revised results framework 2013 Component A 2 LWB to formally make a proposal for reallocation of LWB September 30, funds from the raw water conveyance to the proposed 2013 Kamuzu Dam I raising and justification 3 LWB to hire a consultant for dam safety assessment LWB October 31, including assessment of system hydrology for the 2013 proposed raising of Kamuzu Dam I and notify the Bank of the feasibility of the raising of the dam 4 Government to review the progress made by LWB PMU Feb 28 , 2014 towards implementation of the raising of Kamuzu Dam and expansion of the water works and make a decision on use of remaining funds reallocated to this package 5 LWB to negotiate and agree with the consultants for LWB September 30, detailed design and ESIA for the raw water conveyance 2013 system on termination of the contracts and payable fees 6 Resolve the issues affecting progress of the work SRWB/PMU September 30, packages under Zomba and Mangochi being 2013 implemented by SRWB, review implementation schedules and make necessary contract extensions 7 BWB to deal with the issues relating to the failure by BWB September 30, the consultant for Chileka Pump Station and Walkers 2013 Ferry to resolve technical issues and deploy staff agreed in the contracts 8 BWB to share documentation relating to the RAP BWB September 30, under the contract for Construction of three Additional 2013 12 Reservoirs, booster stations, pipelines and associated works Component B 9 Government to inform the Bank about the proposed MWDI September 30, transfer of responsibility of urban sanitation to the 2013 Water Boards Component C 10 Establish the National Water Resources Authority MWDI December 27 2013 11 Contract consultant to support the Transboundary MWDI November 29, Water Resources Management Unit (TWRMU) 2013 12 Contract consultant to support Catchment Management MWDI December 30, Strategy 2013 13 Meeting of PoEs to discuss Revised Detailed Design MWDI September 6, Report for Upgraded Kamuzu Barrage PoE 2013 14 Final RAP for Upgraded Kamuzu Barrage project MWDI September (including Property Valuation Report) ready for use 6,2013 15 Diamphwe Dam detailed design and ESIA contracts MWDI September 30, signed 2013 16 Establishment of grievance redress mechanism September 30, following consultation with local stakeholders on 2013 Diamphwe Dam 17 New Water Source for Blantyre detailed design and MWDI November 29, ESIA contracts signed 2013 18 Complete aerial survey for Lower Shire River basin MWDI November 30, 2013 19 Launch Licensing Reform Campaign MWDI November 30, 2013 20 Develop detailed proposal and ToR for potential Water MWDI September 30, Resources Monitoring Training activity 2013 21 Develop ToR and budget breakdown for proposed MWDI September 30, groundwater and water quality mapping 2013 Component D 22 Submission of draft ToRs for the preparation of GoM/PMU September 30, Fiduciary Framework for institutionalization of SWAp 2013 23 Road map for the institutionalization of SWAp agreed GoM/PMU September 30, by the Sector 2013 24 Consultant recruited to prepare Communication GoM/PMU October 18, Strategy 2013 25 Submission of draft ToRs for the preparation of GoM/PMU September 13, Benchmarking Framework for Water Boards 2013 26 GoM to inform the Bank on the direction on GoM December 31, Regulatory Framework for the Water Supply Services 2013 27 Approval of Sector Strategic Plan by Sector Working GoM/PMU September 30, Group 2013 28 Submit to the Bank a review of the Training Plan GoM/PMU September 30, 13 2013 29 MWDI to provide assurance to the Bank that either the MWDI September 30, engineering oversight is pursued or alternative 2013 arrangements are made to improve project and contract management. Component E 30 Conclude the closure of the Nkhamanga Contract MWDI September 30, 2013 Safeguards and fiduciary 31 Submit Revised Procurement Plan PMU September 30, 2013 32 Submit comments on Independent Procurement Report PMU September 30, 2013 33 Government to clear public sector arrears MoF September 30, 2013 34 Treasury to take direct responsibility for settlement of MoF MDAs water bills 35 Submit audit report for FY 13 on time PMU When due 36 Provide to PMU any suggested modifications for Bank September 30, catchment management to TOR of Diamphwe ESIA, 2013 Kamuzu Dam 1 ESIA, and Catchment Management Strategy Development Study (Component C) 37 Completion of EMP for Salima Water Supply Project CRWB Before start of civil works (expected by September 13, 2013) 38 Completion of EMP for Mvula Rural Water Supply MWDI September 30, Project 2013 39 Next Implementation Support Mission Government/ February 2014 Bank List of Annexes: Annex 1: List of persons met Annex 2: Results Framework Annex 3: Component A: Detailed Review Annex 4: Component B: Detailed Review Annex 5: Component C: Detailed Review Annex 6: Component D: Detailed Review Annex 7: Component E: Detailed Review Annex 8: Procurement Annex 9: Financial Management Annex 10: Proposed budget reallocations Annex 11: Safeguards Annex 12: Field Trip Report 14 Annex 1: List of key persons met Ministry of Finance 1. Mr. Davie Wirima Deputy Director Ministry of Water Development and Irrigation 2. Hon. B.J. Mpinganjira Minister 3. Sandram.C.Y. Maweru Principal Secretary I 4. Erica Maganga Principal Secretary II 5. Duncan S. Chione Director of Administration 6. Steve K. Mwanza Director of Water Supply Services 7. Modesta B. Kanjaye Director of Water Resources 8. Mr. M.G. Mpasa Director of Sanitation and Hygiene 9. S.J. Milanzi-Kalemera Director of Human Resources 10. Alick W.Y. Mphande Deputy Director of Finance 11. Fumbani Sichinga Deputy Director of Administration 12. Emma Mbalame Deputy Director of Water Supply (OMME) 13. Timothy S.W. Mkandawire Deputy Director of Water Supply (PDC) 14. Prince W. Mleta Deputy Director of Water Resources (Ground) 15. Pepani W.R. Kaluwa Deputy Director of Water Resources (Surface) 16. Pichesi Phiri Deputy Director of Water Resources (Water Quality) 17. Richard F. Malata Chief Economist 18. Peter Chipeta Regional Water Development Officer (Central) 19. Owen L. Phiri Acting Regional Water Development Officer (South) 20. Frank M. Mtambo Regional Water Development Officer (North) 21. Andrew Joloza Civil Engineer 22. Hyde Sibande Principal Hydrologist I/Desk Officer 23. Peter Kadewere Principal Hydrologist II 24. Rex Kanjedza Principal Water Resources Officer 25. Dwight D. Kambuku Principal Hydrogeologist 26. Charles Zimba Civil Engineer 27. John M. Kumwenda Water Development and Irrigation Officer 28. Mike Msonkho Human Resources Planning Officer WATER BOARDS Lilongwe Water Board 1. Gabriel M. Gonani General Manager 2. Gladwell Mphande Financial Controller 3. Alfonso Chikuni PIU Manager 4. Sinosi Maliano Assistant Project Engineer Central Region Water Board 1. Patrick D. Makonyola Chief Executive Officer 2. Ernest Mtawali Acting Director of Finance and Administration 3. Maclenan Nyang’wa PIU Manager 15 Northern Region Water Board 1. Titus C. Mtegha Chief Executive Officer 2. Asumani Ungwe PIU Manager 3. Francis Mtawali Financial Controller Southern Region Water Board 1. Martin Chizalema Chief Executive Officer 2. Edward M. Mbesa Director of Planning 3. Hendrix Napolo Financial Controller 4. Jacqueline Dias PIU Manager Blantyre Water Board 1. Andrew Thawe Chief Executive 2. Henri Bakuwa Director of Finance and Administration 3. Booker Waya Projects Manager Project Management Unit 1. Prof. Zachary M. Kasomekera Programme Manager 2. Barnett A.N. Phiri Programme Accountant 3. Prisca J. Kutengule Community Participation Specialist 4. Eng. Dr. Charles Maliseche Water Supply and Sanitation Engineer 5. Lazarus B. Phiri SCE/RWSS Focal Point Officer 6. Hastings Chipungu Monitoring and Evaluation Specialist 7. Anthony Msendema Procurement Specialist 8. Rhoda Chisuwo Administrative Support Development Partners 1. James Mambulu DfID 2. John Pinfold UNICEF 3. Robert Stroud Pump AID (representing WES NGO NETWORK) 4. Lucy Mwase Pump AID (representing WES NGO NETWORK) 5. Mercy Masoo WaterAid 6. Duncan Mcnicholl Engineers Without Borders of Canada 16 Annex 2: Results Framework The Results Framework is an aggregate of the results agreed for the original IDA credit/grant, the Additional Financing credit/grant at the ACGF grant. The Results Framework below includes the revision proposed by GoM – and discussed with the mission – to be finalized once the project is restructured. Revision to the Results Framework Comments/Rationale for Change Original Revised Achieved- % Target target June 2013 achieveme nt Project Development Objective (PDO): Increase access Project Development Objective (PDO): Maintained to sustainable water supply and sanitation services in Increase access to sustainable water target areas and improve water resources management at supply and sanitation services in target national level areas and improve water resources management at national level PDO Level Results Indicators PDO Level Results Indicators 1. People provided with access to “Improved Water Sources” 1. People provided with access to “Improved Maintained, but the target has been revised downwards 2,296,825 2,099,700 746860 36% under the project Water Sources” under the project after taking into account status of works in component A, and the dropped Nkhotakota scheme, as well as revisions under component E. _In Urban Areas _In Urban Areas Maintained 1,632,505 1,571,400 463780 30% In Rural Areas In Rural Areas Maintained 664,320 528,300 283080 54% 2. People trained to improve hygiene behavior or sanitation 2. People trained to improve hygiene behavior Maintained,but the number has been revised downwards 38,130 10,000 3269 33% practices under the project or sanitation practices under the project because the initial plan was that all pupils in primary schools in Dedza would be trained. However, only 10 pupils per school have been trained and others are support groups both for urban and rural sanitation 3. People provided with access to “Improved Sanitation” under 3. People provided with access to “Improved 62,380 70,000 35525 51% the project Sanitation” under the project _In Urban Areas _In Urban Areas The target has been revised downwards based on the 24,250 20,000 2610 13% revision of its associated output under intermediate result 5. In Rural Areas In Rural Areas The target has been revised upwards because current 38,130 50,000 32915 66% target is already around 30,000 and there will be around 20,000 more to be reached through Dedza School Sanitation project. 4. Water Boards maintaining a working ratio (collected revenues 4. Water Boards maintaining a working ratio Maintained 5 5 4 80% / cash operating expenses) not less than 1.1 (collected revenues / cash operating expenses) not less than 1.1 5. Number of Water Users Association established under the 5. Number of Water Users Association Maintained, but target to be reduced by 4. 21 17 17 100% project established under the project 6. Water Resources Investment Strategy satisfactorily completed 6. Water Resources Investment Strategy Maintained Yes Yes yes satisfactorily completed 7. User satisfaction rating of at least 70 % for Proposed new indicator, to capture feedback from the None 70% 0 0% water supply in project areas using community demand side of the project scorecards [proposed new indicator] Increased raw water availability Beneficiaries Beneficiaries Project beneficiaries Project beneficiaries 2,359,205 2,169,830 782385 36% 7. Of which female beneficiaries 7. Of which female beneficiaries 17 Intermediate Result 1: Increase sustainable access to Intermediate Result 1: Increase water supply services in cities and towns sustainable access to water supply services in cities and towns 1. New piped household water connections that are resulting 1. New piped household water connections that Maintained, but the target has been revised downwards 65,476 59,400 26522 45% from the project intervention are resulting from the project intervention after taking into account status of works in component A, and the dropped Nkhotakota scheme. 2. Piped household water connections affected by rehabilitation 2. Piped household water connections affected Maintained, but the target has been revised downwards 96,951 100,000 32201 32% works undertaken under the project by rehabilitation works undertaken under the after taking into account status of works in component project A, and the dropped Nkhotakota scheme. 3. Improved community water points constructed or rehabilitated 3. Improved community water points constructed Maintained, and target increased owing to an increase in 472 500 389 78% under the project (Kiosks) or rehabilitated under the project (Kiosks) the target by LWB 4. Working ratio (collected revenues / cash operating expenses) 4. Working ratio (collected revenues / cash Maintained of the Water Boards operating expenses) of the Water Boards -Northern Regional Water Board -Northern Regional Water Board 1.1 1.1 1.2 109% -Lilongwe Regional Water Board -Lilongwe Regional Water Board 1.1 1.1 1.2 109% -Central Regional Water Board -Central Regional Water Board 1.1 1.1 0.84 76% -Blantyre Regional Water Board -Blantyre Regional Water Board 1.1 1.1 1.1 100% -Southern Regional Water Board -Southern Regional Water Board 1.1 1.1 1.2 109% 5. Average hours of water supply service per day in utilities Proposed to be dropped due to inconsistency/ difficulty targeted by the project in measuring -Northern Regional Water Board -Lilongwe Water Board -Central Regional Water Board -Blantyre Regional Water Board -Southern Regional Water Board 6. Water utilities that the project is supporting 6. Water utilities that the project is supporting Maintained but the target changed because the initial 4 5 5 100% targeting was in anticipation a proposed restructuring of the water boards 7.Additional quantity of water produced in utilities Proposed new indicator to capture the changes in water 73,200 13,939 19% targeted by the project (m3/day) production capacity for the utilities targetd by the project. The target is a total of additional volumes of water which will be produced after completion of works under component A. Intermediate Result 2: Improve water resources Intermediate Result 2: Improve water management resources management 2. Detailed design and Environmental/Social Impact Assessment 2. Detailed design and Environmental/Social Maintained 3 3 3 100% of for critical water resources infrastructure approved by the Impact Assessment of for critical water resources MoIWD infrastructure approved by the MoIWD Intermediate Result 3: Support sector management and Intermediate Result 3: Support sector urban water sector reform management and urban water sector reform 1. 2012-2016 Sector Strategic Plan approved by the Ministry 1. 2012-2016 Sector Strategic Plan approved by Maintained the Ministry Intermediate Result 4: Increase sustainable access to Intermediate Result 4: Increase water supply services in rural areas sustainable access to water supply services in rural areas 1. Improved community water points constructed or rehabilitated 1. Improved community water points constructed Maintained 3,931 2,790 2359 85% under the project or rehabilitated under the project 2. Number of Water Users Association established under the 2. Number of Water Users Association Maintained, but target reduced since in mitundu and 21 17 17 100% project established under the project Linthipe, no WUAs will be formed as the schemes are now part of CRWB, while 2 schemes under RWSS were dropped. 3. Other water service providers that the project is supporting 3. Other water service providers that the project Maintained, target revised downwards since the initial 19 17 6 35% is supporting target included Linthipe and Mitundu which have been taken over and are part of CRWB. 4. Number of WUAs having contracted a private operator for the 4. Number of WUAs having contracted a private Maintained, target revised downwards since the initial 19 17 6 35% operations of the water supply system operator for the operations of the water supply target included Linthipe and Mitundu which have been system taken over and are part of CRWB. Intermediate Result 5: Increase sustainable access to Intermediate Result 5: Increase sanitation services sustainable access to sanitation services 1. Improved latrines constructed under the project 1. Improved latrines constructed under the Maintained 5,475 6,900 3052 44% project Urban Urban Target reduced because the contract duration for the 4,850 4,000 261 7% NGO has reduced from the planned 36 months to 30 months Rural Rural The target has been revised upwards because already 625 2,900 2791 96% ACGF results reached 2791, and the Dedza school sanitation will construct 200 latrine holes. 2. People reached with sanitation and hygiene Proposed new indicator, included as it emanates from - 330,000 340,000 103% messages one of the most common and important activities under the project Urban - 30,000 0 0% Rural - 300,000 340,000 113% 18 Annex 3: Component A: Urban, Town and Market Center Water Supply – Detailed Review A1. Blantyre Water Board (BWB) 1. Status of outstanding activities under original credit: All activities planned under BWB are complete except the rehabilitation of Mudi Pumping Station, the status of which is indicated below. i. Rehabilitation of Mudi treatment works: the contract was signed and commencement date was July 29, 2013. Supervision will be in-house by BWB for which a team of three engineers has been assigned. Completion is expected by the closing date of 30th July 2014.BWB reported that the original scope of this contract has been reduced by taking out the pipeline interconnecting the two pumping stations. 2. Status of Activities Under Additional Financing: Procurement of all planned activities has been completed. The status of implementation of ongoing activities is as follows: i. Construction of three Additional Reservoirs, booster stations, pipelines and associated works: the contract was signed on November 13, 2012, and commenced on March 25, 2013. Works are progressing on all three sites. The 12 month contract will close on March 25, 2014. Supervision is in-house by BWB. Progress is behind and some factors causing delays include land issues for example at one of the reservoir sites (Kameza), which is on private land, the problem of access to the site delayed commencement of works. This is an issue that needs to be properly resolved not only for construction but for unimpeded access to the tank during operation and maintenance. BWB indicated that the social safe guards issues had been resolved and promised to share the documentation with the Bank during the mission. ii. Rehabilitation and Capacity Increase of Walker’s Ferry Treatment Plant: The contract was signed on February 6, 2013, and commencement date was April 2, 2013. The contract duration is 16 months, and will close on August 2, . Works are in progress with construction works on the dosing house underway. Progress is very low at 10% according to BWB. It is reported that delays by the supervising consultant in review and approval of component design and modifications submitted by the contractor is affecting progress of works. This needs to be resolved without delay. The consultant has also not fully deployed key staff. During a field visit in this mission, the Bank Team noted that very minimal work has been carried out which includes desludging and cleaning one of the primary sedimentation tanks and construction on the new chlorine dosing tanks which is in progress. The mission was informed that the resident Engineer was not full time on the site and occasionally visits the site. BWB indicated that the supervision was now largely being done by their staff which they had seconded to the project. The Mission advised BWB to ensure the consultant adheres to contract provisions including taking the leading role in supervision. BWB staff seconded to the consultant should work under the consultant as counterpart staff and not take over supervision to avoid confusion and ensure the professional liability remains with the consultant. BWB was advised to ensure roles and responsibilities of the contractor and consultant are clear and according to contract especially as they relate to design and specification of components/equipment for the permanent works. 19 iii. Rehabilitation and Renewal Works at Chileka Pumping Station: The contract was signed on November 23, 2012 and commencement date was March 1, 2013. The duration of the contract is 18 months. Timely approval of design modifications and specifications is particularly critical for this activity since there is need for lead time in manufacturing of some of the elements. This contract is also supervised by the consultant for Walker’s ferry TP, and is facing similar problems with the consultant including delays in reviews and approvals of submissions by the contractor. iv. Construction Supervision of the Walker’s Ferry TP and Chileka Pumping Station: This consultancy contract for combined supervision of the two works contracts was signed on February 6, 2013, before the commencement of both works contracts. However, the consultant is not performing well from the start. This is posing two critical challenges – delays in responding to requests by contractors to design and specification modifications, and changes to the consultant’s key personnel. BWB reported that the Project Manager has been absent from site for some time and that the consultant had not positively responded to requests by BWB for a suitable replacement for a long time until recently. The Bank urged BWB to urgently resolve this issue to ensure quality control of the works. The PMU offered to assist BWB in resolving this problem. A2. Lilongwe Water Board (LWB) 1. Status of activities under Original Credit All planned activities have been completed. The following are some of the activities completed recently. (i) Supply of essential equipment spares for Electrical and Mechanical works, pipes and fittings, and domestic meters and install 4 pumps – All planned procurement of goods (OSEC plant, 4 pump sets for TW2, water meters, pipes and fittings and office equipment have been completed . As of September 2011, a total of 28,000 additional people were served through 5,760 new water connections. (ii) Preliminary design for raw water aqueduct – The consultant Hydroplan has, after long delays and extensions of contract completed the feasibility study and ESIA and the final report submitted. (iii) Kamuzu Dam Hydrographic survey – The survey has not been carried out due to the excessively high quotations (compared to the budget) from shortlisted firms. It has been decided by MoIWD to carry-out the survey under the consultancy for detailed design of new water source for Lilongwe (Diamphwe dam). (see Component C – Water Resources Development). 2. Status of activities under Additional Financing All planned contracts under AF have been signed except two contracts – construction of 100 kiosks and installation of pipes for Air-wing project. The status of ongoing activities is as follows: Detailed Design and Construction Supervision for Lilongwe's Raw Water Conveyance System: A 5- month contract for the detailed design was signed on February 25, 2013, and the contract commenced on March 11, 2013. The mission learnt that LWB had not instructed the Detailed Design Consult to stop further work on the detailed design following indications by the Consultant in June 2013 that it was 20 technically and economically not feasible to implement the aqueduct project. During the short technical review meeting of June 2013 the mission held discussions with the Consultant and LWB in two meetings in which it was pointed out that the implementation of the raw water conveyance system was not technically feasible as the Consultant had established that the levels or elevation difference between the proposed weir site and the existing raw water pump house had a 10 m error, and as such it was not feasible to gravitate water from the proposed weir site to the water works. . Instead the consultant went on to submit a draft design report on July 15, 2013 and LWB provided comments to the consultant for inclusion in the final report. The mission was informed that a new alternative which includes pumping from near the new weir site has been proposed. This is against a background where the World Bank mission of June 2012 had requested LWB to reassess the potential savings from water quality improvements and the justification for this investment. After further follow up by the Bank, LWB stated that they were satisfied by the findings of the feasibility study by Hydroplan and was of the view that the project was worthwhile. Options suggested by SMEC to make the water flow by gravity which include the raising of the proposed weir to some 7 meters or so, though still not very technically sound, would result in costs increasing to over USD 20 million for the least cost option compared to the budgeted USD 8 million. It was agreed during the June 2013 mission that LWB should ask SMEC to submit a detailed report on their findings including a financial analysis on the feasibility /merits of the raw water conveyance against operating costs. During the June 2013 mission, LWB had made initial proposals to use the funds for a “more beneficial alternative” of raising Kamuzu Dam I. To date the LWB has invited proposals/quotations from individual consultants to have preliminary assessment for this alternative suggesting that the aqueduct was no longer on the plans. There is an urgent need for LWB to conclude on this package in view of the remaining period from the project closing date. ESIA for Lilongwe's Raw Water Conveyance System - A 5 months contract for the preparation of the ESIA commenced in April 2013. All reports were submitted and the final reports on the ESIA and the RAP were awaiting completion of the detailed design report for finalization. The mission was concerned by the fact that LWB had not taken a decision to stop further work on the ESIA and negotiate with the consultant on fees following indications in the June 2013 mission that it was not technically and financially possible to implement the raw water conveyance system. Construction supervision for construction of two new RC storage tanks and associated works at Air-wing: A 12 month-contract was signed and commenced in March 2013. It is reported that supervision is on-going satisfactorily. Construction of storage facilities at Air Wing, Supply and Installation of pumping main from Mtunthama to Air Wing, and Supply, installation and commissioning of pump sets at Mtunthama, Air Wing and Mwenda – A 12-month contract was signed and works commenced on March 15, 2013. Progress was initially affected by the presence of crops on the site and the failure of the concrete mix design to meet the specification required for water retaining structures. The mix design was eventually satisfactory following improvements in the quality of cement and fine aggregates which had to be sourced elsewhere. The progress is now reported to be satisfactory. Updates on key sub-activities are below: 21 (i) Procurement of Pipes, Fittings and Meters for Chikungu and Air-wing Water Supply – 3 supply contracts were signed during mid-February and early March 2013 for the packages in 6 lots, and delivery of the goods has commenced. (ii) Supply and install cone valves for KDII, and penstocks at TW2 – a 6-month contract was signed on October 18, 2012 and goods have since been manufactured in Spain. Delivery is expected in August 2013, with installation to be completed within two months after delivery. LWB reported that a team of officials from LWB and the Ministry of Irrigation and Water Development had visited the factory where the valves and penstocks were being manufactured and was satisfied by the findings. A3. Southern Region Water Board (SRWB) 1. Status of outstanding activities under Original Credit Procurement of all planned activities has been completed. The status of implementation of ongoing activities is as follows: i. Mangochi and Zomba water supply rehabilitation works: Two works contracts – Zomba (Lot 1) under IDA financing, and Mangochi (Lot 2) under OFID financing. a) Zomba water supply (Lot 1): contract was signed on October 10, 2011. However due to delays in advance payments, the commencement date was December 26, 2011. The completion date for this 12 month contract was December 24, 2012. The contractor has been working without an extended contract. b) Mangochi water supply (Lot 2): contract was signed in October 21, 2011. However due to delays in advance payments, the commencement date was February 19, 2011. The completion date for this 12-month contract was February 18, 2013. The contract has not been formally extended. Both lots are at 60% complete while the contracts expired (in December 2012 and Feb 2013 respectively). It is reported that the contractor requested extension to October 2013, but SRWB took time to respond to the request. Reasons cited by SRWB include the failure by the consultant and contractors to agree on the costs related to the delays being proposed by the contractors. This is an unacceptable situation that needs to be rectified without delay. This is particularly of concern to the mission given that in the November/December 2012 mission, the bank Team raised similar concerns on the serious delays on this contract and held meetings with SRWB, the consultant and contractor, and agreed on a way forward which included closer follow up and concrete resolution of sticky issues by SRWB. In the June 2013 short technical mission, the Bank Team was assured by SRWB that the contract was now on track and that the contractor was largely meeting set and agreed milestones. During the field visits of this mission, the Bank Team noted that there has been some improvements in progress (an increase of about 40%) although not commensurate with the time elapsed since the last mission (i.e. 8 months). During discussions with the contractors and consultants on site, it was clear that the working relationship between the consultant and contractors was still an issue to be resolved by the water board. The contractor indicated that works would be completed by February 2014 and the client (SRWB) appeared not aware of this planning. 22 ii. Mangochi and Zomba construction supervision: the consultant is on board since November 2011, but much ahead of mobilization of the contractor who mobilized in March 2012. The performance of this consultant needs to be assessed against the poor contract management of the two works contracts indicated above and allegations by the contractor that there have been delays in finalization of specifications and recurrent revision of the specifications. The contractor alleges that this has caused delays and excessive increases in cost of construction. A similar request to review the performance of the consultant was made by the mission in November 2012 and SRWB had then promised to look into this. iii. Neno expansion works: SRWB signed a contract on April 25, 2013 and the contractor commenced work on May 2, 2013. This 12-month contract is due for completion on May 1, 2014. Progress of works is currently at 13%, against 17% elapsed time. The contract is slightly behind. iv. Neno supervision of works: An individual consultant was recruited and the contract was signed on April 9, 2013. The consultant commenced work when the contractor mobilized. v. Sanitation Study for Balaka, Mwanza and Mulanje Towns: The consultant submitted final documents. A workshop to present findings to various stakeholders was conducted on February 21 and 22, 2013. The consultant has submitted the revised final documents incorporating comments from stakeholders which were accepted by the water board. 2. Status of Activities Under Additional Financing Procurement of all planned activities has been completed. The status of implementation of ongoing activities is as follows: i. Mangochi and Zomba WS works upgrading: a single contract covering both towns WS upgrading was signed on November 23, 2012. The contract commencement date was December 7, but was delayed to 28th February 2013 due to delays in advance payment. . This 12-month contract will close on 27th February, 2014. Progress of works is at 14-20% against 33% elapsed time as at June 30, 2013. Close follow up is required to ensure that adequate resources are deployed by the contractor who should also submit a revised work plan for the execution of the works. ii. Mangochi and Zomba WSP supervision consultancy: The consultancy contract was signed on 17th August 2012. This is the same consultant that is supervising works under the original financing. The performance needs to be closely followed up by SRWB. iii. Nsanje Water Supply expansion works: The contract was signed on October 23, 2012, and work commenced on January 28, 2013, and completion date is January 27, 2014. As of June 30, 2013, overall progress of works was 77% against elapsed time of 43%. The contract is on track and currently ahead of schedule. iv. Nsanje Water Supply expansion works supervision: The contract was signed on December5, 2013. Supervision of the contract that commenced on January28, 2013 and is ongoing. 23 v. Balaka Water Supply Expansion works:The contract was signed on February 26, 2013. Commencement date was May 2, 2013. The 12-month contract will close on May 1, 2014. Overall progress is 16% against an elapsed time of 23%. The contract is slightly behind schedule. SRWB reported that the MWDI has refused to allow SWRB to connect at the point proposed in the design. The MWDI has suggested that the connection should be at a different point 14 km away from the design point. This would result in an increase in costs of about USD 1.3 million. SRWB was asked to discuss further with the MWDI given the background that there was not much funds under the unallocated due to the exchange losses from SDR to USD which the PMU estimates at USD 6 million. vi. Construction supervision of Balaka water supply Expansion: Contract for the supervision was signed on March 13, 2013, and supervision commenced on time. A4. Northern Region Water Board (NRWB) 1. Status of activities under Original Credit – All planned activities under the original financing have been fully completed. There are no outstanding issues. 2. Status of activities under Additional Financing Procurement of all planned activities has been completed. The status of implementation of ongoing activities is as follows: i. Mzuzu water supply system- Supply and installation of distribution pipelines: The contract was signed on February 21, 2012. The works commenced on March 15, 2012 with expected completion on September 15, 2013. Progress to date is about 94% against elapsed time of 92%. According to NRWB, the outstanding works will be completed by the contractual completion date. ii. Mzimba water supply system- Construction of water intake weir and related pipe works: The contract was signed on February 21, 2012. The Contractor commenced work on July 30, 2012. The works were completed and commissioned on March 16, 2013 and are currently under defects liability period. While the new intake can supply up to 5,700 m3/day, the water treatment plant and the facilities downstream can only produce and supply a maximum of 2,000 m3/day. Hence there is need for upgrading the treatment plant and other facilities to exploit the full potential. However the non-availability of funds under the unallocated (targeted for funding this) which has been caused by the reallocation of USD 2.8 million to BWB to finance shortfalls in a works contract and the exchange losses of about USD 6 million on the project may mean no funding available for the proposal by NRWB under the current IDA funded project. iii. Construction of Songwe water supply system: The contract was signed on June 14, 2013 and work commenced on July 1, 2013. It is expected that works will be completed within the contractual completion date. iv. Supply and delivery of pre-paid water meters for a pilot project: Contract for supply of 1,210 prepaid water meters of 15 mm diameter was signed on December 11, 2012. Another contract for 24 supply of 36 bulk meters was signed on March 21, 2013. All 1,246 meters were delivered and installation commenced in April 2013. By end of July 2013, 600 meters had been installed. The piloting has generated wide spread interest among NRWB customers. A5. Central Region Water Board (CRWB) 1. Status of outstanding activities under Original Credit Procurement of all planned activities has been completed. The status of recently completed and implementation of ongoing activities is as follows: i. Kasungu - Works under OFID were re-tendered after cancellation of a non-performing contract. A new 9-month contract was signed on June 16, 2012 and commenced on August 1, 2012. This contract was extended twice and the current completion date is now October 31, 2013. Overall progress to date is 73%. Supervision is being carried out by a consultant under Additional Financing since the original consultancy contract ran out of funds. Given the track record of this contract, CRWB needs to follow up closely on this contract to avoid any further delays. ii. Mponela (Phase 1)– Construction was substantially completed by March 8, 2012, with power connection by ESCOM being the only outstanding sub-activity. Connection to power was made after a long delay and was completed in mid-July 2013 and works fully commissioned subsequently. iii. Salima Lakeshore water supply expansion (Lot 1)– after 9 months of procurement process, a 14-month contract was signed on April 18, 2013. Delayed commencement will be mid- September 2013 after completion of the recruitment of the supervising consultant that has taken about a year to complete. According to CRWB, the reasons for the delay have been mainly due to the internal processes at CRWB and delays in responding to Bank queries/suggestions by CRWB. iv. Kochilira-Kamwendo – The works contract was signed on February 2, 2012. Works were substantially completed by December 14, 2012, with power connection as the only outstanding sub-activity. Power connection was made after long delays and the works were fully commissioned in June 2013. In terms of new individual connections, the first 150 applicants await connection. 2. Status of activities under Additional Financing Procurement of all planned activities has been completed. The status of implementation of ongoing activities is as follows: i. Kasungu WS system rehabilitation and extension works – CRWB signed an 8-month works contract with Unipumps Nigeria Ltd JV BMK Pvt on March 8, 2013, the commencement date was April 1, 2013. Progress is 28% against an elapsed time of 50%. Close follow up is required to complete the works within the contractual period. ii. Mponela WS system rehabilitation and extension works (Phase 2)- the works contract commenced on July 1, 2012. All works were fully completed by February 2013. Design and supervision was in-house. 25 iii. Salima Lakeshore WS expansion works (Lot 2)– a 14-month contract was signed on April 18, 2013 (together with Lot 1, see above, which is to be financed under original credit). Delayed commencement will be mid-September 2013 after completion of the recruitment of the supervising consultant. 26 Annex 4: Component B: Sanitation and Hygiene – Detailed review This Aide Memoire reflects Mid Term Review component discussions and field visit to Dedza. IDA support in sanitation and hygiene under the Ministry of Water Development and Irrigation include (1) development of sanitation and hygiene legislation, (2) development and refinement of Sanitation and Hygiene messages, (3) technical assistance for capacity building of masons and sanitation marketing and hygiene promotion,(4)National Communication campaign for the newly established Department of Sanitation and Hygiene and (5)Construction and supervision of sanitation facilities and sanitation and hygiene promotion in Dedza. Status of implementation Goods: procurement of various goods (computers and accessories, and vehicles) were completed and finalized in June 2012 and two vehicles bought under this component are being used in the implementation of project activities. In particular, a double cabin pick up vehicle is being used to support in the implementation of Dedza school sanitation and hygiene promotion while the other vehicle is used by the Director of Sanitation and Hygiene who is responsible for oversight of this component. Works Contracts: IDA is financing construction of 60 VIP latrines with urinals and hand washing facilities and also attached in particular to girls VIP latrines are the menstrual hygiene facilities. The VIP latrine facilities will benefit 20,732 pupils (10,497 boys and 10235 girls) and 192 teachers (137 male teachers and 55 female teachers). The works contracts are divided into 4 lots with each lot having equal number of facilities to be constructed. The district council engaged 4 small contractors with initial 60-day works contracts. The values of the four contracts are: lot 1 Pabe worth MK51, 824,500.00, Lot 2 Winjile worth MK66, 164,000.00, Lot 3 Luwebuli worth MK65, 604,000.00, and Lot 4 GEM worth MK63, 114,000.00. All the works contracts were officially commissioned on t June 1, 2013 and were originally planned to be completed by July 31, 2013, however the council granted all the contractors a 30-day extension period having realized that the initial 60 days were not sufficient. During the mission (at component discussion and at a meeting with the district council team during a field visit), the Bank team noted that all the 4 contractors are behind schedule and that it is unlikely that they will complete the works within the extension period. The mission was satisfied with the good quality of construction works. However, the mission noted that the status of the progress is at 55% ( and is lower than reported by the PMU during the review of the component) against time laps of 80%. The mission is of the view that supervision of construction works is insufficient and ineffective. Contract management is another challenge in the pilot project. The mission also found out that the extension granted to the contractors was not based on analysis on the status of the construction works. The mission recommends the ministry to consider reassessing all the lots and establish a realistic extension period. The lack of effective supervision was due to the absence of the Director of Public Works (Engineer) on the ground since the commissioning of the construction works. The mission advised the ministry and PMU to immediately consider deploying one civil engineer from Ministry’s Department of Sanitation and Hygiene to Dedza District council on a full time basis until completion and handover of construction works. The Engineer will have overall responsibility for the supervision and contract management and this will provide streamlined responsibility for supervision, decision making and certification of works. At present there are so many stakeholders involved in supervision and overseeing the project. The District Council, the PMU and the Department of Sanitation are of the opinion that the roles and responsibilities regarding supervision have been agreed and are clear including to the contractors. However discussions with some of the contractors during the field visits confirmed the reservations that the mission had earlier 27 raised on the clarity of responsibility of the many players in the project from Government, District council and key staff of the schools were the works are being implemented. Table 8: Summary of progress on construction of sanitation and hygiene facilities (VIP latrines and urinals with hand washing facilities) as of August 6 2013 Lot Contractor Contract sum ( Total Progress Contract end Contract extension No. MK) % facilities ( date period end date overall) 1 Pabe 51,824,000.00 15 55% 30th July,2013 30th August,2013 2 Luwembuli 65,604,000.00 15 50% 30th July,2013 30th August,2013 3 GEM 63,114,000.00 15 40% 30th July,2013 30th August,2013 4 Winjiri 66,164,000.00 15 45% 30th July,2013 30th August,2013 Total number of 20,732 pupils (10,497 boys and 10235 girls) and 192 teachers (137 male Beneficiaries teachers and 55 female teachers). Capacity building, Sanitation and hygiene promotion: The mission noted the positive achievements made as a result of the software activities of the project in particular the capacity building and hygiene promotion activities. The District Council reported that 53 extension workers were trained as Core- trainers on School Sanitation and Hygiene promotion using the Ministry of Education National School Sanitation and Hygiene training guidelines who in turn trained 228 teacher Sanitation Masters from all the 228 primary schools in Dedza. The Teacher Sanitation Masters facilitated establishment of pupil sanitation clubs and sanitation & hygiene promotion campaigns in all the 228 schools with an aim of encouraging school pupils and guardians to practice the three key elements of hygiene practices: a) proper use of improved latrine; b) washing hands with soap during the five critical times and; c) drinking safe water. An estimated total of 330 000 pupils and 10,000 guardians received the hygiene messages during the campaigns and hygiene open days. The Mission observed that apart from reporting on capacity building indicators there are some process indicators on promotion that are not being reporting in the project results framework. The mission advised the ministry to consider adding some more process indicators such as number of pupils and guardians reached with hygiene practices messages. The Ministry agreed to come up with additional process indicators to report on. Consultancy assignments: 1. Development of Legislation (Sanitation Act, Standards, Guidelines, Rules and Regulations): This consultancy contract was signed on March 11, 2013. The assignment is being undertaken by a local legal firm, Kainja and Dzonzi company. The Ministry reported that the consultant has produced Inception Sanitation and Hygiene status report. The status was established through consultations with key government stakeholders. The Mission requested the ministry to share a copy of the sanitation and hygiene status report with the Bank. The next stage on this assignment is development of a Draft National Sanitation and Hygiene Promotion Bill and Regulations. The mission further advised ministry to ensure that the process is conducted through consultations with all key sector stakeholders and that senior government department officials from other related ministry are continuously involved in all stages of the process. The mission was informed that the assignment is expected to be completed by December, 2013. 2. Development and refinement of Sanitation and Hygiene messages and implementation of sanitation and hygiene promotion: The main aim of the consultancy assignment is to provide dissemination, communication and public relations services that will help the two water boards and city councils create demand for improved sanitation products and services and stimulate hygiene practices in LIAs and/or PUAs of Lilongwe and Blantyre. FD Communications (ad 28 Agent) was contracted to develop sanitation and hygiene messages and review the existing public relations and communication plans. The assignment commenced on March 8, 2013. The ministry reported that the draft communication and public relations plans have been submitted for review. The plans will form the basis for the development of sanitation and hygiene communication messages. The mission was informed that the Ad Agent and the NGO will next develop a joint a program of rolling out the Sanitation Marketing and Hygiene Promotion in the targeted Low Income Areas in Blantyre and Lilongwe. The mission advised the ministry to ensure that messages to be reviewed, developed and rolled out and including the existing messages being implemented in some low income areas by other stakeholders. 3. Strategic Sanitation Planning: Development of Sanitation Plans for peri-urban areas under BWB and LWB, in liaison with the Ministry, is being undertaken by a local consultant. An inception report has been submitted, reviewed and accepted by the water boards. The consultant is currently working on a socio-economic study and base line assessment (see component B – sanitation and hygiene) and has delivered the study. 4. Technical assistance for capacity building of masons and sanitation marketing and hygiene promotion: Technical Assistance for capacity building of masons and sanitation and hygiene promotion is being undertaken by a local NGO, Hygiene Village Project and the contract value is USD 496,000. The NGO has prepared an inception report, baseline, situation and sanitation mapping study reports. The NGO is currently working on a joint program with the Advertising Agent to roll out Sanitation Marketing and Hygiene Promotion in the low income areas. It is expected that a total of 4,850 improved latrines will be constructed as a result. The NGO proposed to use sanitation marketing approach to establish small scale sanitation businesses and create demand within residence of the low income communities in the two cities. The MTR highlighted that it is unlikely that the NGO will be able to achieve this target due to delay in commencement of the assignment. However, the mission advised the ministry to ensure that this approach does not conflict with the government policies and regulations. The Ministry is considering revising the target due to the change in the contract period and the fact that the sanitation marketing approach may take longer period to achieve benefits. The contract period for this assignment is now 30 months compared to the original 36 months. 5. National Communication campaign for the newly established Department of Sanitation and Hygiene: The development of materials for a National Communication Campaign for the newly established Directorate of Sanitation and Hygiene is being conducted by a local communication firm, Go Bright Media and CC Networks. The contract value for this assignment is USD57, 273.75. The contract period was initially 3 months but was extended by three more months. The consultant is expected to prepare documentaries, scripts, programs and communication materials while the Government will do the communication campaign using electronic, print media and public open campaigns. The mission advised the government and PMU to ensure that monitoring strategies are put in place in monitoring electronic media institutions such radios and television stations. 6. Technical Assistance Support to the process of transferring of responsibility for the management of waterborne sanitation facilities to the Utilities and provision of on-site sanitation services: The 29 mission was informed that decision on whether to continue with the proposed assignment has not been made. The Department of Sanitation and Hygiene is waiting for decision from the government on the way forward. However, the mission observed that the funds meant for this assignment have already been reallocated within the component. During the component discussions, the mission was informed that the ministry is still interested in pursuing the assignment. The Mission advised government to quickly reach a decision as to whether it would want to pursue or drop this activity. 30 Annex 5: Component C: Water Resources Management – Detailed Review This section provides details on current status and proposed actions under Component C: both the original financing and the additional financing agreements. 1. The previous mission rated the component moderately satisfactory, noting that disbursements were lagging behind significantly and required re-doubled effort to get back on track. A detailed plan of action was developed and updated during the technical review missions and was followed up with diligence by the Department of Water Resources. Thus, the component showed significant improvement in progress of activities during the period under review. The Ministry has initiated and implemented the agreed action points, and has nearly completed a number of important activities from the original financing. Progress under the component is still rated moderately satisfactory with a more positive outlook: If the current pace of procurement and contract management is maintained it is expected that the component will be back-on-track and achieve the intended objectives. The Government’s MTR Report assessed that there are still procurement delays and raises concerns on ability to complete the activities, and it is agreed that continued concerted effort by Department of Water Resources on smooth implementation will remain critical. It is the mission’s conclusion that many critical milestones were reached and decisions made, and if these are diligently pursued and slippages avoided, the component will return to satisfactory performance. 2. Enabling Legislation and institutional reform: The new Water Resources Act 2013 was published in the Government Gazette on April 9, 2013. The mission was informed that the date for the Act to become operational is yet to be decided and gazetted, and that the MoJ advised to start rolling-out institutional reforms to operationalize the act. This enactment represents a major milestone, and enables long anticipated critical reforms including the establishment of the National Water Resources Authority. Recruitment of a consultant to support the establishment of the NWRA is at an advanced stage, and the Ministry has formed a taskforce to work with the consultant on the actual establishment. Recruitment of a CEO for the NWRA is expected soon, and HR implications are being discussed. It is expected that the NWRA can be formally established (even though not fully operational) before the end of the calendar year. A budget of US$ 600,000 has been proposed for support to the actual establishment (goods: equipment, furnishing, office setup/initial rent). This may be considered once the NWRA is actually established. 3. A newly introduced activity last year was the operationalization of the Trans-Boundary Water Resources Management Unit (TWRMU). This activity involves recruitment of a TA to facilitate and support the operationalization of this unit within the Water Resources Department in the Ministry and enable improvement documentation, planning, knowledge and strategic engagement of Malawi within the international arena, especially in the Zambezi Basin. The consultancy is currently at shortlisting stage. 4. Water Resources Investment Preparations: The Ministry has decided to pursue development of Catchment Management Strategies for selected river basins in Malawi, as a follow up to the national Water Resources Investment Strategy. This is a critical step in coming up with integrated planning for development and conservation of critical hotspot water resources areas in the country and the activity also supports rolling out of stakeholder based integrated river basin planning, supporting the formal “catchment management strategies” as called for in the Water Resources Act. The scope of work has been intensively discussed and agreed. The catchments tentatively selected for the study are North Rukuru- Lufira, Linthipe-Lilongwe and Lake Chirwa. The consultancy has been advertised and it is expected that the Ministry will soon submit the ToR for the Bank’s formal review and No Objection, as the timeframe under the project is quite short for the scope of work. During this mission it was highlighted that catchment degradation was an issue that needed serious consideration following findings of the MTR. As 31 such it was agreed that the Department of Water Resources Management would consider possible ways of including development of appropriate catchment protection strategies under this assignment. 5. The Multipurpose Water Investments Framework and Tools consultancy was completed. The Ministry has since received PPP Commission’s comments on the draft report. These are mainly technical on the multi-criteria and financial models proposed by the consultant. As far as these comments refer to the proposed models for Blantyre and Lilongwe new water source development, these should be shared with the transaction advisor, once arranged. It is also recommended that the comments are shared with the consultant for their response and if possible incorporation. The mission learnt that no one in the Department had been trained in using these tools. 6. Kamuzu Barrage Upgrading: The consultant submitted a final report. The design has been revised taking into account geotechnical investigation results, which led to a redesign of the foundation of the barrage. The Dam Safety Review Panel is still to verify the revised design and bidding documents so that they can be concluded and submitted to the Bank for review before tendering under the Shire River Basin Management Program (SRBMP). The activity is planned in the first week of September 2013. This is an urgent activity as it is on the critical path for construction under the SRBMP. It is advised that the September 2013 meeting be geared towards concluding the design stage and tender documents. There is improved coordination regarding the Barrage between NWDPII and SRBMP, and it is important to maintain this in the next months. 7. On the Independent Panel of Experts, there is a near final draft of a harmonized ToR for the (re)establishment of the Panel of Experts. The PoE will next meet in September 2013 to review the Barrage designs. Under the NWDPII the ToR also covers review of Diamphwe design, and depending on next steps on KD1 Dam, it is advised that its scope is expanded to also cover this dam raising activity. Since one member of the Panel has resigned, the panel needs to be complemented, especially in the field of mechanical engineering, and it is suggested that the September meeting should be used to identify the required profile for this consultant. 8. The ESIA consultant submitted a Final Resettlement Action Plan (RAP), taking into account comments provided. The RAP provides final agreed total compensation for PAPs, along with an awareness and early warning system development. More details are provided in the Safeguards Section. The Government has included provision for compensation payments in the 2013/2014 budget. 9. Development of new/raw Water Sources by Water Boards: The study for the new surface water sources by CRWB and SRWB is ongoing, with the consultant now carrying out preliminary designs for the selected water source for each town. The groundwater feasibility study consultant has submitted to the Ministry a final Baseline Environmental and Social Assessment Report and a draft Baseline Report. For this and other study reports, it is advised that reports are shared timely with the Bank for comment and appropriately filed in the Ministry archives. 10. Detailed design of the New Water Source for Blantyre: The ToR for the detailed design study for the new intake and the upgrading of existing infrastructure at Walkers Ferry for Blantyre Water Board was finalized and the study was advertised. Shortlisting report is expected to be sent to the Bank, for review, shortly. The ESIA procurement is at the same stage. For both, it is advised to draw up a procurement calendar and proactively follow this to avoid slippage given the short period remaining under the project to complete the activity. During the procurement review, it was proposed that government should consider transferring the responsibility of the procurement and implementation of this activity to Blantyre Water Board given the change in scope of work from a dam to an intake on the Shire River. The Director of Sanitation who chaired the session agreed to take up the issue with the relevant office. 32 11. Detailed design of the New Water Source for Lilongwe: Negotiations are at an advanced stage with the consultant, and the Ministry is finalizing comments received from the Bank, prior to completion of the negotiations. These include the issue of aerial survey of the dam site, as well as the discussion with local stakeholders/communities/traditional leaders on the proposed dam design, the provision of adequate information and a grievance redress mechanism for potentially affected people. More details are provided in the safeguards section. The ESIA consultancy is in the same stage. For both consultancies, it is critical that the Ministry closely manages the contract and follows up on progress and interactions with the communities. 12. Aerial Survey for the Lower Shire River Basin: The Ministry informed the mission that the survey commenced on August 12, 2013. There was a delay due to delays in obtaining clearance from the Civil Aviation Department. It is advised that the Ministry closely follows progress and obtains reports on areas mapped, even if data is not fully analyzed, prior to the surveying plane’s departure to ea sily correct any issue that might arise. 13. Licensing reform campaign: The licensing reform campaign has had to be re-advertised due to low response to the REOI. This was done in June 2013, and the RFP was since issued to shortlisted firms on August 5, 2013. It is advised also here to maintain momentum by setting up and implementing a procurement calendar for this activity. 14. Proposed new activities in water resources management: Themission discussed a number of new proposed activities that are priorities for Water Resources Department. In principle budget and scope are feasible in the remainder of the project, but it remains critical to closely follow up on all these activities to ensure their timely procurement. The ministry may propose these activities subject to availability of resources. These include:  the earlier mentioned support to the physical establishment of the NWRA (600k US$),  an additional allocation of 500k US$ to cover the new scope of work for the catchment management strategy development consultancy.  support to Water Resources Monitoring, especially on hands-on training and support to supervision of installation of new hydromet equipment that was procured under AfDB financing under the NWDP. The modalities, budget and alignment with the AfDB financing should be discussed urgently, but it is agreed that this is an important activity to sustain the important work carried out on WRM monitoring under the AfDB financed part of the NWDP II. The maximum envelope is approximately 200k US$). The Ministry is advised to present a budget, a ToR and a procurement justification to the Bank for review.  implementation of National Groundwater and Water Quality Mapping, including exploratory drilling and water quality testing. The purpose of this assignment is to improve and update the 1986 information to support improved planning for water security related to groundwater use, which is becoming more important with increased borehole drilling and expansion of towns that do not have reliable surface water sources. During the discussion it was agreed that the study should focus only on the central and northern region (excluding the Shire Basin) as financing for the Shire Basin is readily available under the SRBMP. The two consultancies (under SRBMP and NWDPII) would then have identical ToRs and one of them would be tasked with the integration into a national product. This is an important activity, but it will depend on the speed of procurement whether this can be effectively implemented in the remaining period. The reduction in scope will make that easier, but still procurement needs to be proactively followed. It is advised that the Ministry provides a detailed breakdown of the 900k US$ proposed for this activity, as well as a revised ToR, based on the shared workload with SRBMP. 33 Annex 6: COMPONENT D: Sector Reform and Program Management – Detailed review Activities under Original Financing 1. All planned procurement of goods/equipment, consulting services have been completed and the goods and services delivered. The only activity that is under implementation is Sanitation Planning in low income areas for cities of Blantyre and Lilongwe. Water Sector Wide Approach (SWAp) 2. The sector continues to reposition itself to institutionalize the Sector Wide Approach (SWAp) as part of implementing Government policy. The aim is for the sector actors (Government, Development Partners, Private Sector and Civic Society Organizations), to operate within an agreed and joint Sector Planning and Investment Program using a common guiding plan financed from pooled resources. The mission was informed that the Government would like to operationalize SWAp by 2015. Three agreed key frameworks required for the institutionalization of SWAp are: Sector Investment Plan (SIP), Fiduciary Framework and Monitoring and Evaluation Framework. 3. IDA supported the development of the SIP which was finalized and adopted in May 2012. However, the uploading of the relevant support data base for the SIP model is still to be done and hence this has limited the full use of the SIP as a sector planning tool. It was not clear how the SIP was used as a planning tool in the preparation of the 2013/14 budget. 4. The Monitoring and Evaluation framework is being developed with Technical Assistance engaged using financial resources from the Africa Water Facility through the African Development Bank. It is expected that the framework will be finalized by December 2013. 5. The initial plan was the outputs of a Study on Sector Financing Mechanisms for Strengthening the Irrigation, Water and Sanitation SWAp in the context of Decentralization in Malawi that is being supported by the AfDB, would contribute to the input for developing the Fiduciary Framework. However, it was noted that the commencement of the study had delayed and the Ministry has decided under AF to proceed in engaging the consultant to prepare the Fiduciary Framework. The mission was informed that after the sector endorses the draft ToRs, the Ministry will submit the same to the Bank by September 30, 2013. Being the last framework to be prepared for the institutionalization of SWAp, the mission advised the Ministry to expedite the recruitment process for the consultant. 6. The mission was informed that with support from WaterAid/DfID, a road map for institutionalization of SWAp has been prepared and was shared with the mission. The road map was yet to be discussed and agreed with the stakeholders in the sectors. The mission was advised that the road map will be presented and agreed at a meeting that will be convened by the Sector Working Group by end of September 2013. 7. In view of limited capacity of the Planning Division, the mission was not sure how the Ministry will institutionalize the SWAp. In addition, the Ministry continues to experience high levels of vacancy of around 70% which seem to constrain the delivery of the mandate of the Ministry. The Government is aware of this and in order to address this challenge, the Ministry requested the Bank to support the preparation of Capacity Development Strategy. The Strategy will build up on the Training Needs Assessment and Training Plan that is being implemented and will also address the capacity needs in the Ministry to take over the functions of the PMU. The mission advised the Government to put in place transition arrangements for taking over the functions of the PMU. 34 8. The sector has been holding annual Joint Sector Reviews (JRS) since 2008 and is viewed as one way of demonstrating the essence of a SWAp and this year’s JSR is planned for December 2013. The Planning Division with support from the Technical Working Groups is now responsible for the production of the annual Sector Performance Report (SPR) that is presented at the JSR. The first SPR produced by Planning Division was for 2011/12. Implementation Support 9. The Program Management Unit (PMU) continues to be in place and manage the implementation of the project. All positions except that of Water Resources Specialist and Rural Water Supply Specialist were filled. The Engineer from the Ministry seconded to PMU for the rural water supply component continues to support its implementation. Furthermore, supported by AfDB/AusAID, the PMU has additional pool of expertise including Sanitation and Hygiene whose expertise is available for any particular activity for the entire NWDP II Program. However, because the AfDB/AusAID Program component will be phasing out in December 2013, the mission agreed with the Ministry for the need to maintain the Sanitation and Hygiene Specialist to continue supporting the implementation of Component B in order not to disrupt the activities which include implementation of a pilot sanitation and hygiene project in Dedza. 10. The mission was informed that while there is Government directive to phase out all PIUs/PMUs, the NWDP II PMU will continue to support the implementation of the project to completion in October 2015. The Government will continue to provide oversight management of the program while making arrangements to understudy the PMU. The Government will meanwhile be working towards building capacity within the Ministry to be able to manage the implementation of projects and programs. The mission advised the Government to develop a clear and elaborate strategy on how to achieve building capacity within the Ministry with support from the project. Activities under Additional Financing Sector Reforms and Program Management SWAp management 11. The institutionalization of SWAp in the sector remains a challenge. It was noted that the deliverables under this component were “projectized” thus limiting the inclusiveness of the sector progression. The Government shared the draft road map for the institutionalization of SWAp by 2015. While the draft road map received input from other Development Partners, e.g. UNICEF, the mission noted it was not finalized and the direction was not clear. The mission advised the Government to ensure that a clear direction on how the sector should evolve in the next one to two years on the institutionalization of SWAp. Media Communication and Publicity 12. The mission was informed that a total of 14 radio programs, 4 jingles and 8 plays were finalized and were being aired on both public and private radio stations. TV documentaries were being aired on the public TV station. Apart from informing the public about the NWDP, the radio and TV programs and plays are aimed at effecting behavior change in target communities and focus on such issues as discouraging vandalism of water assets and impress on positive actions towards sustainable resource use among others. The mission advised the Government to review and document the impact of such an initiative including developing appropriate methodologies to get feedback and impact. 35 Communication Strategy 13. It was noted that only three individual consultants responded to the first call for expression of interest (EoI) for preparation of the Communication Strategy. Of the three, two were disqualified because they submitted their EoI as firms. However 12 individuals however responded to the second call for EoI and the Ministry will prepare a shortlist by 22nd August and it is expected that the consultant will be engaged by mid of October 2013. Regulation of Water Supply Services 14. Following the Government’s decision not to proceed with the establishment of a Malawi Water and Energy Regulatory Agency (MWERA), the Ministry reverted back to Corporate Charters to facilitate the monitoring of the performance of the Water Boards. The concept of the Corporate Charters was endorsed by Cabinet after a legal review by the Ministry of Justice and Constitutional Affairs (MoJCA). The mission was informed that the Corporate Charters were finalized and submitted to management of the Ministry for final endorsement. The mission was further informed that before the Corporate Charters are signed and operational, there are several processes within Government that need to be duly followed including endorsement by the MoJCA, the Office of the President and Cabinet. The Government could not ascertain as to when the Corporate Charters will be operational. In the meantime Water Boards will use the existing Corporate Charters, while paying special attention to all provisions of the new Corporate Charter’s Essential Performance Indicators especially relating to key Customer Services. 15. As part of monitoring performance of the Water Boards, the Ministry agreed to work with the Water Boards to prepare benchmarking. The benchmarking exercise has delayed since there has been a lot of discussions on which institution will be responsible for benchmarking the Water Boards. Because of conflict of interest, Water Services Association of Malawi (WASAMA), an association of water utilities in the country could not carry out the exercise. The mission was informed that the Ministry’s Administration Department will be responsible for the exercise. The Ministry will therefore finalise the terms of reference (ToRs) for the engagement of the consultant to assist in the process of benchmarking and submit to the Bank by 30 August 2013. The PMU and Ministry will update the procurement plan to include the benchmarking consultant. While the decision was made for the Administration Department to be responsible for benchmarking the Water Boards, the mission was not sure if the prerequisite capacity to undertake such an exercise was available within the Administration Department. 16. In view of other players in the water supply sector apart from the Water Boards that include Water Users Association and the Private Sector, the mission advised the Government to reconsider the establishment of a robust regulatory framework for all players. While the establishment of regulatory framework for the water resources is essentially advancing, there is need to refocus and seriously consider establishing a similar regulatory framework for the water supply services. The Ministry committed to consult widely and inform the Bank by December 2013 on the Government direction on the establishment of a regulatory framework. Review/development of Sector Strategic Plan 17. The review of the 2006 - 2011 Ministry’s Strategic Plan was completed and provided input to the preparation of 2012 - 2017 Sector Strategic Plan which is underway. The overview of the Sector Strategic Plan was in June 2013 presented to the Sector Working Group (SWG) for comments. The mission was informed that the consultant submitted the final draft of the Sector Strategic Plan to the Ministry on August 2, 2013for further processing after incorporating comments and inputs from the SWG. The Ministry further informed the mission that the Sector Strategic Plan will be submitted to the Bank by 30 September 2013 after endorsement by the Sector Working Group. It is expected that the Development Partners will present their final comments after the final draft is circulated for review. 36 Water Sector Investment Plan 18. The Water Sector Investment Plan (WSIP) was finalized in May 2012, however the mission noted that there is little use of the Plan by the sector. Being a key document on the financing for the sector, it is important for the Ministry to demonstrate its use in national budgeting and guiding for future investments. The mission advised the Government to consider profiling the WSIP and demonstrate its use on budgeting in addition to the contributing to the Joint Sector Review. Training and Capacity Building 19. The Training Plan which spans to 2015 and was approved by the Bank in July 2012 continued to be implemented. To date, a total of 252 staff members from the Ministry, PMU and the Water Boards have been trained. These include short term trainings (107), Long term trainings (27), and study tours (118). A total of US$ 905,541.20 out of US$ 2.0 million has been utilized since the approval of the Training Plan representing 45% of the total allocation. Table 1 below presents a summary of training and capacity building activities undertaken. M & E training evaluation forms are being used to provide feedback on the training undertaken. However the mission advised the Government to institute an assessment framework for impact of training. The Ministry informed the mission on the challenge for the beneficiaries for long-term training programs to secure places in regional universities and most of the regional universities require that students undergo an honors degree program before commencing into Master’s Program, which takes long but also does not fit the available allocated resources. Table 9: Summary of Trainings and Capacity Building Activities Undertaken Implementing Entities Short Short Long Long Study Total term term In- term Off- term In- Tours/ off- Country Shore Country Workshops shore Water Supply 2 3 1 2 3 11 Sanitation and Hygiene 2 0 1 0 0 3 Water Resources 3 0 0 6 52 61 Irrigation services 7 0 0 0 0 7 Administration 6 11 0 0 29 46 Human Resource Management 5 0 0 6 30 41 &Development Internal Finance Management 4 0 0 6 0 10 Planning 8 0 0 0 0 8 NWDP-PMU 4 4 Northern Region Water Board 17 1 18 Central Region Water Board 19 4 23 Lilongwe Water Board 12 4 16 Southern Region Water Board 4 4 Blantyre Water Board 0 0 Grand total 93 14 7 20 118 252 20. While the training plan provided the broad spectrum for capacity building for the staff in the Ministry, PMU and Water Boards, the mission was further informed that the training plan is not fully 37 addressing the key capacity needs of the Ministry and Water Boards. In view of this and as noted above, the Ministry requested the Bank to support the preparation of Capacity Development Strategy for the ministry. The proposal was for the Strategy to build up the Training Needs Assessment and Training Plan being implemented and also to address the capacity needs in the Ministry for taking over the functions of the PMU. The mission however, advised the Government to urgently review the Training Plan and assess the key capacity needs required in the Ministry and Water Boards in order to revise the Training Plan to address them. Under the leadership of Human Resources Director, the Ministry committed to review and submit the revised Training Plan to the Bank by 30th September 2013. TA for Engineering Oversight 21. A provision of US$ 3,000,000 for technical assistance for improvements in the technical expertise of the Water Boards was made during appraisal of AF. However, no action was taken to recruit a consultant who could provide quality assurance services to the technical project documentation. The mission requested MWDI to provide assurance to the Bank that either the engineering oversight is pursued or alternative arrangements are made to improve project and contract management by September 30, 2013. Engineering Software and Training for MWDI and Water Boards 22. The mission was informed that the Government and Water Boards had agreed on the three engineering software packages i.e. WaterGEMS (water distribution modeling application), WaterCAD (water distribution modeling program) and Water Hammer (software used to calculate pressure surges in pipe lines). Based on these requirements, a supplier was identified in South Africa who provided a quotation of about US$ 157,500 including training of the package but excluding travel, accommodation and subsistence provision for the trainees. The mission was further informed that 12 staff, 2 from each Water Board and Ministry were being proposed to benefit from the training in South Africa on all the three packages for 10 days. The three packages were considered to be important to the Ministry and Water Boards to enhance their engineering capabilities and the Bank cleared the Government request to change procurement method from open tendering to single sourcing. In order to increase the value for money for this activity, the mission advised the Government to consider for the Supplier to conduct the training in the country to enable more staff from MWDI and the Water Boards to benefit from the training. 38 Annex 7: Component E: Rural Water Supply – Detailed Review 1. Works Contracts- (Refer to detailed progress attached in table below). A total of 7 works contracts were awarded on individual scheme basis and progress is at an average of 48%. Completion rates range from 100% to 10%. On one extreme the replacement of media in Chikwawa East Bank schemes was completed and the contractor has been assigned additional works while on the lower extreme of progress the Mkhamanga contractor has completed a mere 10% only. The contractor’s under performance is attributed to lack of capacity, a situation which resulted in MWDI resolving to terminate the contract. The other contracts are on track but there is need to speed up in order to complete in time. During a field visit to Mvula, the mission noted good quality of works and significant progress at the treatment work construction site despite tough site conditions. On the other hand, installation of pipe reticulation and associated works were assigned to the community with the guidance of a Technical Service Provider (TSP). These are yet to start. According to the MWDI, these works were planned to commence upon delivery of pipes and recruitment of the TSP. The Mission recommends speedy engagement of the TSP to enable works to start immediately. This will enable completion of works before the rainy season and avoid complexities that may arise due to excavation of trenches in gardens with crops. Overall, works are of good quality and on track. It was observed that contract management has improved tremendously. Supervision has been enhanced with placement of site engineers to each project and monthly support visits from the MWDI. The mission perceives completion of the contracts within the scheduled time except for the Mkhamanga project. 2. Goods Procurement- procurement of goods commenced a few months ago and delivery is in progress for both PVC and GI pipes. Delays were observed for Misuku and Usisya schemes because of poor access caused by continued rain fall. On the proposed list of goods, the MWDI has yet to purchase 11 motor vehicles, office equipment and furniture to support WUA operations. It emerged during discussions that these goods are awaiting completion of WUA offices as well as financial resources to be re-allocated following the MTR exercise. The Mission recommends that support items for WUAs are a necessity and should be provided to WUAs whose offices are completed. This will give them more time to learn and appreciate usage especially of the computer equipment. 3. WUA Offices – MWDI let out contracts for construction of offices for WUAs in all the 7schemes. It is observed that construction is various stages across the schemes. The mission managed to visit the Mpira- Balaka and Zomba East office construction sites during the field trips. Construction of the Mpira Balaka office is complete and the contractor was putting finish touches. The boundary wall is also complete and was at time of the visit awaiting main gate installation. In Zomba East, the contractor was constructing the boundary wall and had not commenced construction of the office building. The mission recommended that a simple pipe shed be constructed within the boundary walls to avoid heaping pipes in the sun. 4. Consultancy Services – The MWDI had let out consultancy contract for WUA registration and Business Plan development for the rehabilitated schemes. The contract is currently on-going. Meanwhile procurement is underway for consultancy on updating the RWS investment plan. The MWDI intends to open financial proposals on Friday 16th August. Lastly the assignment on conducting Social and Environmental Impact Assessment for piped water systems has been put on hold. The assignment will wait for results on updating of the RWS investment plan. 5. Outstanding Activities – The MWDI has been tracking costs on the RWS component and lately noted a short fall of about US $500,000 to execute all planned activities. In light of this revelation, a few activities remain outstanding. The mission observes that the bulk of these activities are of capacity 39 building nature and very essential for sustainability of the schemes. The MWDI was therefore advised to prioritize these activities and consider re-allocating sum money within the program to cover the costs. 6. Capacity Building- The MWDI has intensified activities in this area lead by the Community Participation Specialist from the PMU. WUA’s from 4 schemes being constructed under the additional financing have undergone preconstruction training while Local Utility Operators have been recruited in 5 schemes completed under ACGF. At the same time WUA’s for 4 market centre schemes have also undergone a mentoring training. MWDI also plans to conduct community mobilization for the schemes currently under rehabilitation/construction to encourage community participation especially for trench excavation of feeder line. 7. Observations- through discussions and field trips, the mission observed the following issues that needs attention of the MWDI- a. Following design reviews for Usisya scheme, the GI pipe distance to cover the rocky sections was reduced from 5km to around 3km. These pipes require additional financial resources to be procured. The cost is not reflected among the list of outstanding activities and therefore urgent attention is required if they are to be covered during re-allocation of resources. b. While the MWDI has provided intensive training to WUAs and arranged more support by engaging LUOs for each scheme, the Mission recommends specific attention to maintenance of treatment works. Maintenance can be challenging with lack of support and proper organization. c. The full completion of the schemes largely depends on the network installation. This exercise needs to start as soon as possible to avoid prolonged delays. Table 10: COMPREHENSIVE PROGRESS OF RURAL GFS REHABILITATION WORKS ON 7 SCHEMES - JULY 2013 LO Project Description Specific ESTIMATED Target Unit Progre T (Activity, Location, Activity/Output/Milesto Remarks/ Comments COMPLETION Qty s ss Qty. No. Qty) nes RATE Concrete intake 2 No 2 Works completed. constructed. Screening Tanks Works Completed for new- to 1 No 1 Rehabilitation Constructed rehabilitate old ones Works Completed-to realign the and extension Excavations on the main 11.6 Km 11.6 parts of the line due to being Transmission Line 1 of Misuku Piped Water Treatment works 1 Item 0.8 close to sanitation facilities All works completed, contractor currently to haul filter media for 90% Supply construction. the SSF Scheme. 50m3 Clear water tank Works completed 1 No. 1 construction Storage Tank Works Completed 3 No. 3 Rehabilitation Concrete intake Rehabilitation constructed. 2 No. 2 Works completed and extension Screening Tanks 2 No. 2 Works completed of Constructed 2 Usisya/Usingin i Rural Piped Excavations on the main Works started and good progress made. However progress is hampered by a lot 24% 24 km 18 Water Supply Transmission Line of excavation in rock-contractor yet to install pipes which are yet Scheme. to be delivered 40 Works started and roughing filters(Usisya only) have been Treatment works 2 Item 1 completed. Works currently on rehabilitation. the slow sand filters Only excavations and part of Construction of Slow base slab have been achieved 1 No 0 Sand Filter for both Usisya and Usingini side Only excavations and base Construction of 150m3 1 No 0 slab(reinforcement) have been Storage Tank fixed Construction of 50m3 Works started on one site only- 2 No 0 Storage Tank excavation complete Rehabilitation of Storage Works completed- remaining 1 No 1 Tank with connections Concrete intake 5 No. 5 Works Completed constructed. Screening Tanks 5 No. 5 Works completed Constructed Excavations on the main Construction Transmission Line 24 Km 16 Excavation Works in progress of Mvula Rural Sedimentation Tank Construction of sedimentation 3 Piped Water Supply construction. Construction of Clear 2 Item 1 tanks almost complete Works have just started and 38% 1 Item 0 excavation works have just Scheme. Water Tank (230m3) started. Construction of 50m3 1 Item 0 Works not yet started Storage Tank Construction of 30m3 Works currently on wall 1 Item 0 Storage Tank concreting Network analysis 100 % 100 Works completed Concrete intake 2 No 2 Works completed constructed. Screening Tanks 2 No 2 Works completed Rehabilitation Constructed Excavations on the main and extension Transmission Line 12.6 Km 7 Works in progress 4 of Chapananga Rural Piped Construction of Roughing Filters 1 Item 0 Excavations for foundations and blinding concrete completed Works in progress. All old filter 41% Water Supply Rehabilitation of media has been removed. Scheme. 1 No. 0.3 Treatment Works Haulage of filter media is in progress Storage Tank Works not yet started 3 No. 0 Rehabilitation Crossings construction. 10 No. 0 Works not yet started Excavation Works have just Construction Construction of 1 No. 0 almost complete but far behind of Treatment Roughing Filters schedure works for 5 Excavation Works have just Nkhamanga Construction of Slow 10% 1 No. 0 almost complete but far behind Sand Filter Rural Piped schedure Water Supply Pipes and Fittings 1 LS 1 Works not yet started Scheme. 41 After testing the existing structure, there were leakages. Rehabilitation of These are being rehabilitated Treatment Works for 2 No. 1 and are almost complete. Ntonda Some modifications have been worked on. Construction Works in progress. Base concrete has been achieved in of Treatment three sites and ground clearing Construction of Slow 6 Works for Lizulu and Sand Filters for Lizulu 4 No. 0 works in progress on the fourth site. Contractor has mobilised enough materials for the 40% Ntonda Rural subsequent works. Piped Schemes Works in progress. Wall concrete has been achieved in Construction of one sites and ground clearing Sedimentation Tanks for 4 Km 0 works in progress on the fourth Lizulu site. Contractor has mobilised enough materials for the subsequent works. Rehabilitation of Treatment Originally planned works completed and contractor was 7 Works for Chikhwawa Rehabilitation of treatment Works 3 No. 3 given additional work - inclusion of rehabilitation of roughing 100% East Rural sand filters Piped Schemes 42 Annex 8: Procurement 1. NWDPII Original: Only two procurements are still remaining in the Procurement Plan of the Original NWDP and these are falling under Component C Water Resources Management. Most contracts have been signed and activities have been completed. The only remaining activities whose contracts have been signed include BWB Rehabilitation of Mudi Treatment Works (US$ 1,959,657), CRWB Construction of Mponela Water Supply Rehabilitation (US$1,899,000), Construction Extension of Kochilira Water Supply (US$ 1,693,000), Preliminary and Detailed Design and Construction Supervision for Kasungu Water Supply (US$267,103), Construction of Integrated and Expansion of Salima Lakeshore Water Supply (US$ 1,800,000), and SRWB construction of Neno Water Supply System (US$815,010). Studies still underway under Water Resources Management include Development of Multipurpose Water Investment Framework and Tools (US$424,970), Lake Malawi Level Control: Detailed Design of upgraded Kamuzu Barrage (US$2,207,424), Lake Malawi Level Control; Independent for Kamuzu Barrage (US$ 602,551.00, Feasibility Studies and Preliminary Design for Multi-Purpose Surface Raw Material Sources Development (US$1,042,550) and Feasibility Studies and Drilling of Exploratory Boreholes for Ground for Central and Southern Region Water Boards (US$ 592,039) and Sanitation Planning in Low Income Areas for Cities of Blantyre and Lilongwe (US$ 99,016). 2. Additional Financing: Most contracts have been signed and remaining contracts not yet signed include under Lilongwe Water Board: Construction of 100 Kiosks at Chikungu Development Project awaiting delivery of materials, and Works for Installing Pipes and fittings for air wing project. The construction of Raw Water Conveyance will not be pursued further by Lilongwe Water Board as costs outweigh benefits. 3. The Mission noted that under Water Resources Management only one contract has been signed which is the Aerial Survey for Lower Shire River as seven contracts under consultancy services are still outstanding and these include Detailed Design of new water intake on Shire River for Blantyre Water Board, Social and Environmental Impact Assessment for new water intake on Shire River for Blantyre Water Board, Detailed design of new water source for Lilongwe Water Board- Diamphwe River, WRM Institutional & Technical Support Licensing Reform Campaign, Independent Panel of Experts for design of Kamuzu and Dams and Operationalization of the Trans boundary Water Resources Management Unit(TWRMU). 4. Under Sector Reforms and Program Management contracts for Supply, Installation and training of technical application software (submitted during mission for direct contracting), Establishment of a monitoring and benchmarking system for Water Boards(ToRs being developed), Development of Sector Communication Strategy(under shortlisting) are still outstanding. 5. The mission noted that a lot of progress has been made under the Rural Water Component as many contracts have been signed and the few remaining contracts include procurement of vehicles to support the WUAs, consultancies for social & environmental impact assessment for piped water system and consultancy to update the Rural Water Supply Investment Plan. The mission was informed that the contract for Construction of Treatment Works for Nkhamanga (Katizi) in Rumphi is being considered for termination due to non-performance. 6. The Mission urges the Government to closely monitor the remaining activities in order that contracts are implemented before closing date of the project, costs are within budget including those for contract variations. 43 7. Review of Procurement Plans: A comprehensive review of the agreed procurement plan for both NWDP II and Additional Financing was undertaken during the mission. In both procurement plans, contract packing and scheduling is good. Lilongwe Water Board has submitted a proposal to drop the construction of the raw water conveyance system due to high cost estimated at US$24million and instead it is proposing the raising of Kamuzu dam I and extension of TW 2. 8. Contract Management and Cost Estimates: The mission noted that there was need to improve contract management in order to ensure that actual costs for each contract are within budget and savings should be realized. 9. It was reported relations between the consultant and contractor under SRWB under the works contract for Zomba and Mangochi Water Supply project has deteriorated and the Govt was requested to resolve the issues between the two parties including contract extension for the works contract which has been made only up to October, 2013. 10. Staffing: The project has maintained the services of both the Procurement Specialist and Assistant Procurement Specialist. 11. Post Procurement Reviews: Before the mission, PPRs had been undertaken and in all the implementing institutions processing of documents followed the correct procedures and the overall risk rating is low. Delays in paying contractors and suppliers beyond the agreed periods were noted in some Water Boards. Record keeping is generally good except in a few isolated cases where documents are kept in two different locations. No cases of misprocurement were noted. 12. Independent Procurement Reviews: An Independent Procurement Review was carried during the month of April 2013 in all the implementing agencies. The findings of the report were submitted to the project and comments are expected by August 23, 2013. 44 Annex 9: Financial Management The Second National Water Development Program Project Name: (NWDP II) Project ID: P 096336 IDA Credit/Grant No.: H 2940-MAI and Cr 4307/H6900 andIDA4946 Implementing Agency: Ministry of Irrigation and Water Development Effectiveness Date: November 14, 2007 Closing Date: October 31, 2015 Application Deadline: February 28, 2015 Credit/Grant Amount: XDR 109 million Program Duration Remaining Period to Closing 2 years 2 Months Disbursed Amount: XDR 60 million Cancelled Amount XDR 525,038 Period Covered by Review: January 2013 to August 2013 Previous ISR Rating: Satisfactory Current ISR Rating: Satisfactory Current FM Risk Previous FM Risk Rating: Moderate Moderate Rating: 1. Budgeting: The project prepares annual plans and budgets that guide the implementation of activities. 2. Accounting: The project and Water Boards use Tompro Accounting package for processing transactions and reporting. A new version of the package is being procured to replace the current one. The new version is credited with better reporting functionalities. 3. Funds Flow and Disbursements: Disbursement has significantly accelerated after all major contracts in all Water Boards have been signed: As at end of November 2012 disbursements for original and additional financing were 62% and 4% respectively. The table below shows current disbursement levels. Table 11: NWDP II Disbursements as at 30 June 2013 Source of Funds Project Amount Amount Balance at Disbur Disbursed source of sement funds Rate (%) NWDP II (IDA) (XDR) 33,400,000 29,230,174 3,169,826 87.5% NWDP II(IDA)- AF(XDR) 75,800,000 30,738,695 45,061,305 40.6% NWDP II (ACGF) $25,000,000 $25,000,000 0 100% 4. Financial Reporting: The project has consistently produced interim financial reports on time and in the agreed format and content. 45 5. External Audit: All audit reports due have been submitted to the Bank. The project has always produced audited financial statements with a clean audit opinion. The audit report for year ended June 30, 2013 will be due on December 31, 2013. 6. Pubic arrears: After the government cleared the Water Boards’ arrears in May 2008, they started accumulating almost immediately thereafter and they have since not been eliminated. As at June 30, 2013 total government debt totaled MK1.6 billion of which MK852.3 million is 90 days and over. All water boards have substantial government debts in arrears with all of them having more than fifty percent in 90 days and over category, an indication that government is not keen to clear the arrears. The covenant to clear arrears of water bills and remaining current has not been satisfied. The affected MDAs contend that they are not making regular settlements of water bills because of inadequate funding but Treasury position is that the MDAs are funded and should be able to settle the bills, as a consequence there is an element of ambiguity as to who is responsible for settlement of water bills including arrears. It is recommended that settlement of the water bills including arrears for the affected MDAs should be the responsibility of Treasury and settlement requests should accordingly be directed to Treasury with endorsement from the MDAs. The details of individual water boards are outlined below. 7. On cost recovery ratio covenant, all the water boards achieved a ratio of at least 1.1 except CRWB which has a ratio of 0.84 as at June 30 2013. The CRWB ratio is provisional as the process of compiling the accounts for year ended June, 30, 2013 is still underway. The reason given for the low ratio is the problem of public debts that have significantly accumulated from MK170 million last year to MK317 million this year. Table 12: All water boards Summary as at June 30 2013(MK,000) current 30 days 60 days 90 days Over 90 total Government 272,676 283,457 234,926 755,116 77,144 1,623,319 Private 406,250 144,746 84,351 1,918,574 315,326 2,869,246 Total 678,927 428,203 319,277 2,673,689 392,470 4,492,566 Table 13: Blantyre Water Board 2013 2012 2011 2010 Government 403,916 154,263 55,328 73,174 Private 1,544,219 1,199,654 1,144,082 1,139,537 Total 1,948,135 1,353,917 1,199,410 1,212,711 Debtors dys 131 171 102 172 30 dys and over 334,087 114,248 32,089 35,168 government 90 dys and over 201,218 52,783 29,880 32,744 Table 14: Lilongwe Water Board 2013 2012 2011 2010 Government 264,061 191,208 210,069 Private 700,022 364,755 307,359 Total 964,083 555,963 517,428 Debtor dys 92 208 96 Gov, 30 dys and 136,799 87,074 72,552 over 46 Gov, 90 dys and 126,220 100,490 138,616 over Table 15: Central Region Water Board 2013 2012 2011 2010 Government 316,797 170,282 101,448 51,183 Private 120,922 64,246 97,822 58,030 Total 437,719 234,528 199,271 109,213 Debtor dys 118 109 92 70 Gov, 30 dys and 263,324 135,557 83,074 37,721 over Gov, 90 dys and 168,506 75,456 49,772 15,002 over Table 16: Northern Region Water Board 2013 2012 2011 2010 Government 233,458 139,023 90,033 67,214 Private 105,535 82,508 15,888 88,517 Total 338,993 221,531 105,921 155,731 Debtor dys 86 137 78 Gov, 30 dys and 190,160 73,611 51,467 over Gov, 90 dys and 116,041 43,678 19,920 over Table 17: Southern Region Water Board 2013 2012 2011 2010 Government 405,088 285,890 276,252 Private 398,547 337,336 253,058 Total 803,635 623,226 529,310 Debtor dys 198 207 151 Gov, 30 dys and 349,129 246,840 212,091 over Gov, 90 dys and 220,275 181,359 176,694 85,471 over 47 Updated FM Risk Assessment Residual Risk Rating Brief Explanation of Changes and any New Type of Risk Previou Mitigation Measures Current s INHERENT RISK Country Level H H Entity Level S S Program Level M M OVERALL INHERENT S S RISK CONTROL RISK Budgeting M M Accounting M M Internal controls M M Funds Flow M M Financial M M Reporting Auditing S S OVERALL CONTROL M M RISK Financial Accounting and Reporting: Topic Rating1 Comments/recommendations Staffing S Internal controls, including MS weak internal audit accounting policies and procedures Record Keeping S Internal Audit MU No report from Internal Audit Financial Reporting and Monitoring4 S Budgeting Systems S Information Systems S Funds Flow Arrangements Topic Rating1 Comments/recommendations Funds Flow between Donors and S . government and within government Banking Arrangements S 48 Audit Arrangements S Timely reports5 NA Audit results: (1) Nature of audit opinions, reasons for any qualifications/disclaimers/adverse opinions (2) Management letter and internal S control issues (3) Timeliness and adequacy of S management corrective action Compliance with related FM U Public debt arrears have not been cleared covenants inc. laws and regulations, conditionalities in adjustment operations Recommended overall rating1: Satisfactory 5 An audit report more than 4 months late at the time of rating the project normally indicates a “U” or “HU” rating. 49 Annex 10: Proposed budget reallocation The following is the first draft of the proposed budget reallocation. A final proposal will be submitted to the Bank by the Ministry of Finance, together with a restructuring request. COMMITTED TOTAL EXP & (CONTRACT EXPENDITURE TO COMMITMENTS + RE- Activity BALANCES) & Cost (USD) DATE PROJECTIONS BALANCE / ALLOCATED PROJECTIONS OCT 2013 DIFFERENCE MOVEMENT AMOUNT remarks OCT 2013 Component A: Urban, Towns and Market Center Water Supply Blantyre Water Board A4101 Rehabilitation and capacity increase of Walkers Ferry Treatment Plant 625,555 2,493,628 3,119,183 4,000,000 880,817 (820,000) 3,180,000 Construction of 3No reservoirs (Kameza, Chigumula and Chilobwe) and A4103 extension of reticulation system in Blantyre 2,146,861 7,212,987 9,359,848 9,200,000 (159,848) 160,000 9,360,000 A4102 Rehabilitation and Renewal works at Chileka pumping station 1,968,283 5,889,579 7,857,861 7,820,000 (37,861) 40,000 7,860,000 Construction Supervision for Rehabilitation and Renewal works at Walkers A4103 Ferry Treatment Plant and Chileka pumping station 27,565 578,035 605,600 (605,600) 620,000 620,000 Total 4,768,264 16,174,229 20,942,492 21,020,000 77,508 - 21,020,000 The shortfall will be financed from tax waiver Lilongwe Water Board - A4201 Procurement of pipes, fittings and meters for Chikungu water supply project 607,471 648,579 1,256,050 2,500,000 1,243,950 (1,105,500) 1,394,500 A4202 Supply of 4 pump sets - - 700,000 700,000 700,000 A4203 Cone valves for KDII, piezometers for KDI, and penstocks in TWII 686,707 268,708 955,415 850,000 (105,415) 105,500 955,500 A4204 Construction of 100 kiosks - - 300,000 300,000 300,000 A4205 Construction of 2 new RC tanks 1,020,713 3,923,010 4,943,723 5,650,000 706,277 5,650,000 A4206 Construction and supervision of water conveyance system 787,373 100,184 887,557 11,500,000 10,612,443 11,500,000 Total 3,102,263 4,940,481 8,042,745 21,500,000 13,457,255 (1,000,000) 20,500,000 Original reduced by $1m moved to the xchange loss and across Northern Regional Water Board - - A4301 Laying of distribution pipelines for Mzuzu 5,080,486 753,592 5,834,077 7,000,000 1,165,923 7,000,000 A4302 Supervision of the laying of distribution pipelines for Mzuzu 465,653 293,701 759,354 800,000 40,646 800,000 A4303 Construction of water intake weir and related pipe works for Mzimba 2,509,373 434,147 2,943,520 2,500,000 (443,520) 2,500,000 A4304 Construction of Songwe water supply system 1,050,577 2,196,880 3,247,456 2,500,000 (747,456) 2,500,000 Total 9,106,088 3,678,319 12,784,407 12,800,000 15,593 - 12,800,000 Within allocation, to closely check on tax payments Central Regional Water Board A4401 Rehabilitation and expansion of Kasungu water supply system 601,564 1,772,885 2,374,449 2,950,000 575,551 (500,000) 2,450,000 A4402 Rehabilitation and expansion of Mponela water supply system 798,991 410,022 1,209,013 1,250,000 40,987 1,250,000 A4403 Construction / expansion of Salima Lakeshore water supply system 1,491,028 4,908,235 6,399,263 7,570,000 1,170,737 (1,110,000) 6,460,000 A4404 Construction Supervision of water supply system for Salima - 304,200 304,200 0 (304,200) 310,000 310,000 Total 2,891,584 7,395,342 10,286,926 11,770,000 1,483,074 (1,300,000) 10,470,000 Moved to Xchange loss and Unallocated - Tax waivers - Southern Regional Water Board - A4501 Construction of Zomba water supply system 1,157,725 5,607,943 6,765,668 2,350,000 (4,415,668) 4,500,000 6,850,000 A4505 Construction supervision for Zomba and Mangochi water supply system 97,416 341,501 438,917 150,000 (288,917) 300,000 450,000 A4502 Construction of Neno water supply system 141,741 728,083 869,824 6,000,000 5,130,176 (5,060,000) 940,000 A4506 Construction supervision for Balaka water supply system 11,208 183,384 194,591 300,000 105,409 (100,000) 200,000 A4503 Construction of Nsanje water supply system 1,386,792 2,582,324 3,969,117 4,000,000 30,883 - 4,000,000 A4507 Construction supervision for Nsanje water supply project 108,489 195,761 304,250 200,000 (104,250) 110,000 310,000 A4504 Construction/expansion of water supply system for Balaka town 1,248,243 3,147,801 4,396,044 4,500,000 103,956 (50,000) 4,450,000 Total 4,151,614 12,786,797 16,938,411 17,500,000 561,589 (300,000) 17,200,000 Moved to Xchange loss and Unallocated - Tax waivers Total for Component A 24,019,813 44,975,168 68,994,981 84,590,000 15,595,019 (2,600,000) 81,990,000 50 Component B: Sanitation and Hygiene - - B4101/2 Sanitation in Lilongwe and Blantyre 185,085 573,295 758,380 800,000 41,620 (40,000) 760,000 B4201 Sanitation sector reform (MoIWD) 229,420 214,675 444,095 870,000 425,905 (200,000) 670,000 B4202 Schools sanitation 300,177 480,500 780,676 1,000,000 219,324 (95,000) 905,000 - Total for Component B 714,682 1,268,470 1,983,152 2,670,000 686,848 (335,000) 2,335,000 - - - Component C: Water Resources Management - - C2103 Detailed design for Blantyre new water source - - 3,600,000 3,600,000 (1,500,000) 2,100,000 C2104 Social and environmental impact assessment for Blantyre new water source - - 750,000 750,000 (50,000) 700,000 C2203 Detailed design for Lilongwe new water source - - 3,400,000 3,400,000 - 3,400,000 C2204 Social and environmental impact assessment for new water source - - 450,000 450,000 - 450,000 C2204 Independent panel of experts (for dam and barrage) 30,000 30,000 300,000 270,000 - 300,000 C2401 Supervision and transaction advisor for new water sources - - 500,000 500,000 (500,000) - C2301 Aerial survey for the Lower Shire Valley - 469,560 469,560 800,000 330,440 (300,000) 500,000 Licensing Reform Campaign - 1,000,000 1,000,000 - 1,000,000 Operationalisation of the transboundary WRM Unit (TWRMU) 469,560 - - - 300,000 300,000 Total for Component C 30,000 939,120 499,560 10,800,000 10,300,440 (2,050,000) 8,750,000 Component D: Sector Reforms and Program Management - D3101 SWAP management 108,091 - 108,091 230,000 121,909 230,000 D3102 Communication strategy 86,595 - 86,595 305,000 218,405 305,000 D3103 Support for the establishment of the regulatory framework 17,418 - 17,418 300,000 282,582 (200,000) 100,000 MOVED TO OPERATING COST D3104 Review / Development of Sector Strategic Plan 83,022 10,893 93,914 115,000 21,086 115,000 D3105 Monitoring and Evaluation 152,628 - 152,628 350,000 197,372 350,000 D3106 Capacity Building (as per approved Training Plan) 494,317 1,005,683 1,500,000 2,000,000 500,000 - 2,000,000 D3107 TA for operational imporovements in Water Boards - - - 3,000,000 3,000,000 (3,000,000) - Moved to Comp E D3108 PMU operational costs (salaries) 545,811 1,741,300 2,287,111 3,000,000 712,889 (712,890) 2,287,110 MOVED TO OPERATING COST D3109 PMU operational costs (operational expenses) 871,905 1,788,000 2,659,905 1,000,000 (1,659,905) 1,060,000 2,060,000 D3110 Engineering software and training for Ministry & Water Board - 300,000 300,000 (300,000) - Dropped D3111 OPERATING COST MWDI 27,072 27,072 (27,072) 100,000 100,000 Moved from respective components D3112 COMP B: SANITATION & HYGIENE OPERATING COST 18,702 18,702 - (18,702) 315,000 315,000 Moved from respective components D3113 COMP C: WATER RESOURCES MANAGEMENT OPERATING COST 42,715 42,715 - (42,715) 520,000 520,000 Moved from respective components D3114 COMP E: RURAL WATER SUPPLY OPERATING COST 126,336 800,000 926,336 - (926,336) 950,000 950,000 Moved from respective components D3115 SAFEGUARDS - 71,100 71,100 - (71,100) 200,000 200,000 New provision - Total for Component D 2,574,612 5,416,976 7,991,588 10,600,000 2,608,412 (1,067,890) 9,532,110 Component E: Rural Water Supply E1101-15 Rehabilitation and expansion of 9 piped rural water supply schemes 1,183,147 5,310,370 6,493,517 4,100,000 (2,393,517) 2,000,000 6,100,000 From D3107 E1201 Formation and training of WUAs 357,731 357,731 700,000 342,269 600,000 1,300,000 E1301 Studies and assessments (technical and safeguards) 71,117 71,117 400,000 328,883 400,000 Total for Component E 1,611,995 5,310,370 6,922,365 5,200,000 (1,722,365) 2,600,000 7,800,000 Total (all activities) 28,951,102 57,910,103 86,391,645 113,860,000 27,468,355 (3,452,890) 110,407,110 Unallocated /(not committed) 91,048,898 33,608,355 6,140,000 9,592,890 Unallocated - $6m lost to exchange difference ($3,592,890) is actaual un-allocated Grand Total 120,000,000 120,000,000 120,000,000 Signed 120,000,000 Revised total LOSS (6,000,000) Exchange loss SDR/USD Available 114,000,000 No new proposals to be accepted 51 Annex 11: Environment and Social Safeguards Review 1. Timely Safeguards Documents and Project Approvals. The Financing Agreement (Schedule 2, Section I.F.1) for the (Second) National Water Development Project-Additional Financing (NWDP-AF) indicates that civil works can be initiated only after the Bank approves the Environmental Management Plan (EMP) and/or Resettlement Action Plan (RAP) for any projects for which such documents are required. However, as noted in the recent Social Safeguards Review and Mid-term Review reports, some projects have been undertaken before the required safeguards documents were completed. To ensure more timely compliance with safeguards requirements (thereby promoting improved environmental and social outcomes), the mission indicated that henceforth the Bank expects all No-Objection requests for civil works bidding documents to be accompanied by detailed draft or final versions of the following safeguards documents (whenever they are actually required for the project in question): (i) Environmental Management Plan (when needed, based on the Environmental and Social Screening Form previously filled out for each civil works project); (ii) Resettlement Action Plan (when land acquisition or compensation for assets is needed); and (iii) documents indicating final or pending approval from the Environmental Affairs Department (EAD) (when required under Malawian law) and Forestry Department (when civil works would be within Forest Reserves). To provide advance notice to prospective civil works contractors about safeguard requirements, the mission advised that future No-Objection requests for Expressions of Interest should include standard language that the contract would be subject to the requirements of an EMP and/or RAP, in addition to EAD and/or Forestry approval, as applicable. 2. Funding of Safeguards Work. The mission confirmed that sufficient budget remains available following the MTR budget re-allocation for environmental and social safeguards expenses (excluding consultancies), such as in-house formulation of EMPs and RAPs, implementation of EMP recommendations, and environmental and social monitoring during project construction. This funding allocation will help to cover the travel and other operational costs (excluding salaries) involving project- specific safeguards for involved staff from the PMU, MWDI, Water Boards, District Councils, Forestry Department, etc. 3. Environmental and Social Safeguards Staffing. The mission was advised that Prisca Kutengule has been named as the PMU Environmental and Social Safeguards Coordinator. The mission recommended that the Water Boards and other project Implementing Entities should also appoint staff to implement environment and social safeguards within their areas of jurisdiction. The mission also discussed the importance of Implementing Entity managers promoting the proactive participation of environment and social safeguards staff to ensure the timely formulation of EMPs, RAPs, and Screening Forms; contractor induction; site inspections; attendance at progress review meetings; and submission of reports as coordinated by the PMU. 4. Catchment Management. As highlighted in the MTR Report, catchment protection and management is a key issue for the sustainability of much of Malawi’s water supply infrastructure. Deforestation, poor hillside cultivation practices, and inappropriate waste disposal methods are degrading water quality and increasing the sedimentation of water supply works. Indeed, many of the water intakes and other works supported by NWDP are at risk from inadequate catchment management; some intakes have needed to be re-built further upstream because of siltation and poor water quality at the pre-existing intake. It was therefore agreed that a more concerted effort would be made during the remainder of this NWDP-AF, as well as in any future (post-2015) program, to incorporate catchment management efforts within project activities. In the special case of those water supply works located within (or at the border of) Forest Reserves, the mission discussed the potential benefits of more systematic collaboration between the Forest Department and the respective Water Boards and MWDI; this would help ensure that future infrastructure investments also help sustain the important service provided by the Forest Reserves in maintaining reliable, high-quality water supplies. As a next step, the mission agreed to review the TOR 52 for upcoming water resources planning and environmental and social impact assessment (ESIA) studies, with a view towards addressing catchment management issues during future projects. The TOR which could be modified to assess catchment management options includes those for the Diamphwe Dam ESIA, Kamuzu Dam 1 Upgrading ESIA, and Catchment Management Strategy Development for Selected River Basins (under Component C). The mission agreed to provide to the PMU, by 30 August 2013, any suggested modifications to the TOR of the above-mentioned studies. 5. Kamuzu Dam 1. The mission visited Kamuzu Dam 1 (KD1), which is proposed to be raised in height by 5 meters to augment available water supplies for Lilongwe. This project would lead to the inundation of forested land that surrounds the existing KD1; the surface area of this additional permanent flooding still needs to be specified. Unless the incremental area of flooded land is very small, this project is likely to be classified as Category A (requiring a full ESIA) by the World Bank. Including the civil works for this project within the existing NWDP-AF would therefore imply re-classifying the overall NWDP-AF from Category B to Category A, as part of the Level 1 Restructuring that will take place in any event following the MTR. In accordance with Malawian Law, the raising of KD1 would also need to be approved by the Environmental Affairs Department, prior to the start of civil works. One environmental issue that will need special attention in the ESIA is whether—and to what extent--the forest area to be flooded should first be cleared and the wood removed, to avoid harming water quality from rotting wood underwater. If the ESIA determines that some or all of the biomass to be flooded should first be cleared, this activity would need to be specifically planned, budgeted, contracted, and completed prior to raising the KD1 water level. If, on the other hand, the ESIA indicates that KD1 water quality would be adequate even with the flooded forest, then advance clearing would not be needed. (Flooded trees tend to provide a good habitat for fish, birds, and other wildlife.) Among the other environmental and social issues that should be specifically mentioned in the TOR for the ESIA are (i) upstream catchment protection, including appropriate assistance to strengthen management of the Dzalanyama Forest Reserve and the designation of a new forested buffer zone around the expanded reservoir; (ii) measures to work with villagers just below KD1 (not to be affected by raising the dam) to reduce water pollution, including from laundry washing and careless waste disposal; (iii) demolition of at least two houses in the new inundation zone, with resettlement and compensation to be addressed as needed within a Resettlement Action Plan (RAP); and (iv) relocation of a power distribution line (several hundred meters). The project will also need to comply with the Bank’s Safety of Dams Policy (OP 4.37), which requires engaging a Dam Safety Panel of Experts; the same Panel already established for the Kamuzu Barrage on the Shire River could be used. 6. Diamphwe Dam. To take a key step towards address the persisting social tensions among people living in the proposed Diamphwe Dam project area, a high-level meeting is planned for 16 August 2013, to include officials from MWDI, Lilongwe Water Board, other Government agencies, District officials, and Traditional Authority leaders, among others. The PMU Environmental and Social Safeguards Coordinator will attend the meeting, explain the environment and social safeguards policies that are applicable to the project and assure the participants that the welfare of the environment and community are a high priority for the World Bank. A follow-up lower-level meeting within the project area is being considered, to help prepare the local community for the ESIA and RAP processes that will be undertaken by the appointed consultants. The mission suggested designating a “point person” (perhaps from Lilongwe Water Board) to coordinate the day-to-day details of community relations at the Diamphwe site. 7. Shire River Intakes. The mission visited the site of the planned new Shire River intake for Blantyre’s water supply, which appears to be quite suitable from an environmental and social standpoint. For the planned section of water pipeline (parallel to the Shire River) between the new intake and the Walkers Ferry treatment plant, some private or community land will be needed for the right-of-way (ROW), although the most productive farmland can be avoided by aligning the ROW above the river’s flood zone; also, existing houses in this stretch can be completely avoided through careful pipeline 53 alignment. One specific environmental issue to be addressed in the construction of the new intake as well as the planned rehabilitation of the existing Walkers Ferry intake is minimizing fish entry into the intake, which is notable at Walkers Ferry. This will require installing screens with the optimum mesh size, along with regular inspection and maintenance of the screens and any other equipment that would serve to minimize fish entrainment. 8. Salima Water Supply. For the Salima Lakeshore Water Supply Scheme, a RAP has been prepared and revised in response to comments received from the Bank. Preparation of the required EMP is still underway; the mission was advised that the EMP should be completed before the end of August 2013. The most significant environmental issue in this project appears to be a new access road through steep terrain within the Senga Hills Forest Reserve, to enable the construction of a new hilltop water storage tank. To minimize erosion and the loss of trees, the EMP should specify a precise, environmentally suitable alignment for this access road. The mission noted that the road alignment through this environmentally sensitive area should not be selected by the civil works contractor, who would have an incentive to minimize his costs. The EMP should also address (i) control of vehicle use on the new access road, to prevent induced negative impacts on the Forest Reserve (such as possible transport of illegally cut wood); (ii) adequate erosion control and drainage works on this access road; (iii) decommissioning of the access road following water tank construction; (iv) location and rehabilitation of borrow pits and disposal areas for excavated earth and construction wastes (to be located outside the Forest Reserve); (v) keeping the water pipeline ROW to the minimum width needed, in order to minimize tree loss within the Forest Reserve; (vi) erosion control measures along steep sections of the pipeline, particularly between the intake and water treatment plant; (vii) high-quality screens and other equipment to minimize fish entrainment at the intake (Lake Malawi has many unique fish species found nowhere else); and (viii) site selection criteria for any construction camps (which should be located outside the Forest Reserve). It was agreed that the civil works would begin only after (i) the EMP is sent to the Bank for review (as required in the NWDP-AF Financing Agreement) and (ii) written approval is received from the Forestry Department (for works within the Forest Reserve). 9. Mzuzu Pipeline. With respect to a wetland crossing area for a water pipeline in the Mzuzu area, the mission advised NRWB to wait until the wetland is at its driest (within the next few months) before completing this construction. 10. Mvula Rural Water Supply (Dedza District). The mission visited this project, which includes 6 intakes on very small streams within the Dedza Mountain Forest Reserve. The mission noted that the (mostly simple) environmental aspects of this project are being managed reasonably well by the contractor and supervising engineer. However, the EMP has yet to be completed, even though the project is in mid-construction. The mission was advised that the EMP would be completed, using the safeguards budget currently available in the NWDP-AF. Among the environmental issues to be addressed within this EMP are (i) techniques for decommissioning a contractor-built short access road up a steep slope within the Forest Reserve and (ii) potential further collaboration with the Forestry Department for ensuring adequate catchment protection above the new water intake points. 11. Safeguards Training. The mission announced that the World Bank is organizing a Safeguards Training Workshop in Lusaka, Zambia during 16-20 September 2013, open to project staff from Malawi (as well as Zambia and Zimbabwe). This event promises to be a good opportunity for NWDP staff from the PMU, MWDI, Water Boards, and other implementing entities to acquire further knowledge on applying the Bank’s Environmental and Social Safeguard Policies. The mission asked the PMU Program Manager to compile a list of NWDP staff that are interested, fully available, and would substantially benefit from this training, and to forward this list to the Bank. Participation in this workshop will be free of charge, while travel-related expenses could be covered under the NWDP Training Plan (Component D). 54 Annex 12: Field Trip Report 1. The report presents summary findings to project sites under Component A, B and C. The summary under each component is as follows: Component A: Urban Town and Market Center Water Supply and Sanitation 2. During the period 8-10 August 2013, the mission visited selected sites of projects sites being implemented by the Central, Northern, Southern and Blantyre water boards in the company of PMU staff, the Ministry of Water and Irrigation Development and met at each of the sites with representatives of the water boards, the contractors and consultants. The summary of findings at each of the sites visited is presented below. Some of the key issues have been included in the main text of the aide memoire. Balaka Water supply scheme(SRWB) 3. The mission visited the sites where a ground reservoir is being constructed, the SRWB Balaka sub office where an office block is being constructed, 3 out of the 6 borehole sites and a section of the distribution network where backfilling was on going. 4. The progress on the reservoir at around 15 % based on the assessment by the Bank Team. The columns have been casted and base has been casted and reinforcement for the walls has been fixed. The contractor was at stage of preparing for the first lift. The construction of the office and staff houses at the tank site is at advanced stages and nearing roof level. The mission was pleased with the level of human, material and plant deployment at the site. At the time of the visit the contractor’s staff was busy working on the formwork and other preparatory works for the first lift. At the SRWB sub- office the mission noted that the office was near roof level. The mission raised concerns on the quality of bricks that were being used and also the quality and size of the columns supporting the 300mm concrete beam. 5. The drilling of the boreholes is progressing well. The mission visited three of the borehole sites. Two of the boreholes had been drilled and cased while the contractor was preparing to drill on the third site. For the two boreholes drilled the yields were reported to be 2.5 l/s and 10 l/s respectively. These were deemed to have met the minimum requirements. The water board highlighted that they had addressed all safeguards issues following queries by the Bank Team whether these had been addressed since some of the boreholes were in fields. The Bank team then visited a site where the contractor’s staff was backfilling a pipeline. 55 Figure 1: construction of ground water reservoir in Balaka Mangochi water supply scheme (SRWB) 6. The mission visited the water treatment scheme which is being constructed by Fargo and PME Joint venture. The Bank Team noted that there has been some improvements in progress (an increase of about 40%) although not commensurate with the time elapsed since the last mission in November 2012 (i.e. 8 months). During discussions with the contractors and consultants on site, it was clear that the working relationship between the consultant and contractors was still an issue to be resolved by the water board. The contractor indicated that works would be completed by February 2014 and the client (SRWB) appeared not aware of this planning. The Bank had earlier during the technical review discussions during the current mission to reassess the adequacy of the extension of time to October 2013 given the delays in the response to the request for the extension made by the contractors in December 2012 . The mission asked SRWB to confirm whether the scope of the works that are being implemented are as per the contract. 7. The mission also visited the intake works were the second contractor Offshore Pvt Ltd is working on other components of the water supply system which include the intake works, pumping mains, reservoirs, main and minor distribution works. To date the contractor has constructed a brick fence to protect the intake works which is nearly complete and possibly at 95%. The contractor has laid about 18 km of the 26 km of the distribution works. The works on the reservoirs has not started. The contractor reported that the components of the tanks including panels will be delivered in the next few days. The Bank Team then visited the contractor’s yard and observed that a significant portion of the pipes was stored at the plant yard. The mission advised SRWB to ensure the uPVC pipes are stored properly after observing that a lot of pipes were exposed to sun (UV-light), an undesirable condition for such pipes. The mission also observed that the level of plant and equipment mobilization by the contractor could be on the low side but was assured by the SRWB that for the nature of the task and the soil conditions, the mobilization was adequate. 56 Zomba Water Supply scheme (SRWB) 8. In Zomba the Team visited the water works were upgrading and rehabilitation works are being carried out. The team then also visited Naisi Spar Booster pump and reservoir, Namilongo Booster Pump house and Namilongo reservoir. 9. The works at the water works include rehabilitation and upgrading works at the inlet, installation of an aerator, new flocculators for the old and new plant, upgrading of inlets to the sedimentation an fliters and rehabilitation/upgrading of the chemical dosing plant. The civil works have progressed significantly although the progress falls short of what would have been expected since the last mission in November 2012. At the old plant the civil works are almost complete while at the new plant construction is in progress with the other part of the flocculators still at base level. The mission again raised concerns pointed out during the last mission as to whether the size of the flocculation chambers that are comparable to the sedimentation tanks in area is not over-designed and also as to how the plant output would be increased only by installing flocculators and increasing the inlets to the sedimentation tanks and filters. The consultant did not give a clear response on this. The pipe work and mechanical installations are very behind. One of the reasons pointed out by the consultant is the delays in fabrication of pipes by the contractor. 10. The Naisi booster station is largely complete and now awaits connection to power supply, final finishes on painting and touch ups on fencing according to the water board. However the mission could not assess progress on the electrical and mechanical installations as the contractor did not bring keys to the pump house. The reservoir has been completed and only minor works remain including covers to the access holes. The area around the booster and reservoirs which are close to each other has already been reinstated and landscaped. 11. The civil works at Namilongo booster pump station are substantially complete except finishes including the final coat of paint. What remain at the booster pump station are the electrical and mechanical installations. The mission was informed that the electrical and mechanical equipment have already been delivered. 12. The Namilongo reservoir has largely been completed. What remains is the installation of some pipes including the completion of valve and meter chambers. The flow control instrumentation and the level gauges are also still to be installed. The pipe line to the reservoir for Namilongo booster pump Station is still to be completed. The mission noted that some sections of this pumping main have remained open since the last mission in November 2013, thus creating a danger to traffic and humans. 57 Figure 2: Construction of flocculators at the new water treatment plant in Zomba Construction of three Additional Reservoirs, booster stations, pipelines and associated works (BWB) 13. The mission visited part of the site for the construction of the reservoirs in particular the Chimwankhunda Booster pump house and the Chimwankhunda reservoir sites. Work is behind schedule and was reported to have been affected by the land issues which needed to be resolved. Supervision is by staff of BWB while construction is by a contractor. At the booster station, excavation has been made and the contractor was fixing the steel for the base slab. At the reservoir site the contractor was making excavations. The delay in progress for this reservoir was among other things due to the need to cut off unsuitable material and import a suitable fill which had to be compacted. Figure 3: fixing of steel for slab base at Chimwankhunda booster pump house 58 Prepaid meter project (BWB) 14. The team visited a few houses where BWB has installed prepaid meters from their own funding. The mission noted that the quality of installations was good. The mission also made inquiries on whether the display unit (LCD) would not be affected by sun light as elsewhere LCDs for pre-paid meters have been affected by sunlight. Discussions with users at the properties visited indicated that the system was complex and inconvenient. The perception of the meter being an inconvenience was mainly centered on the availability of vending points in the neighborhood and the current business time of the vending points that are currently operational. BWB promised the users that the issue of vending points would be addressed in the next few days. Walker’s Ferry Treatment Plant (BWB) 15. The mission then visited walkers ferry treatment works. The Bank Team noted that very minimal work has been carried out. At the time if the visit the contractor’s staff was working on the chlorine dosing house. The floor slab and columns for the chlorine house have been casted and the contractor was working on the brick work. The other activity carried out to date was the desludging of one primary sedimentation tank. Overall the works are very behind. Some of the reasons cited included the delays by the consultant to review and approve designs/modifications submitted by the contractor. The mission was informed that the resident Engineer was not full time on the site and occasionally visits the site. BWB indicated that the supervision was now largely being done by their staff which they had seconded to the consultant. The Mission advised BWB to ensure the consultant adheres to contract provisions including taking the leading role in supervision. BWB staff seconded to the consultant should work under the consultant as counterpart staff and not take over supervision to avoid confusion and ensure the professional liability remains with the consultant. BWB was advised to ensure roles and responsibilities of the contractor and consultant were clear and according to contract especially as they relate to design and specification of components/equipment for the permanent works. The mission was then taken around the plant starting from the raw water intake on the Shire River and followed the whole treatment process. This was in order for the mission to fully appreciate the problems at the plant. The mission noted that most of the infrastructure was very old and needed urgent rehabilitation and modernization since the plant was constructed in 1963. Much of the needed rehabilitation works are included under the project funded by the Bank. The Bank noted that the operational approach was generally good including monitoring of water quality of which key parameters are displayed periodically in the control room. The mission also noted that the level of pumping as inferred from the massive equipment installed was very high thus creating a potential for high operation costs stemming from operation and maintenance of the equipment including energy reported to be in excess of USD 100, 000 per month. Visit to Mponela town – CRWB 16. The rehabilitation and expansion works for the water supply system in Mponela was carried out in two phases – Phase I (under original financing) and Phase II (under Additional Financing). 17. The activities under the combined two phases involved: Source development by siting and drilling of 6 boreholes; supply and installation of 6 submersible pumps; construction of pumping station; supply and installation of 4 surface pumps; supply and installation of transmission and 59 distribution pipelines; supply and installation of 2 No 350 m3 steel elevated tanks, construction of 6 No communal water points and construction of an office building. 18. The contract for phase I commenced on 27th May, 2011 and that for Phase II commenced on 23rd July, 2012. Both contracts have been fully completed and commissioned following long delays due to delays in connection to ESCOM power supply. 19. The mission visited the boreholes, the pumping station, the two elevated steel tanks, and two communal water points and met with communities to whom the management of the CWPs has been transferred. The mission was impressed with the quality of construction and the proactive effort by the contractor (Aquabor) in facilitating the ESCOM connection in close collaboration with CRWB. This scheme was designed and supervised by the water board. Figure 4: communal water point in Mponela Visit to Kasungu Town Water Supply Scheme(CRWB) 20. The mission visited the Kasungu water supply scheme under CRWB. The rehabilitation and expansion works for the water supply system in Kasungu is being carried out in two phases – Phase I (under original financing) and Phase II (under Additional Financing). 21. Phase I: the scope is construction of raw water intake from Nguluyanawambe Dam and transmission main to treatment plant; water meter chamber, clarifiers, filter and pipe gallery; clear water transmission pipeline to T2, Nguluyanawambe tank, elevated reservoir, and Chiwengo junction; reservoir at Nguluyanawambe and elevated tank at T2; pump station and guard house; electro- mechanical works; and electrical cables, control equipment and transformer for connection to power supply. This 9-month contract commenced on July 30, 2012, and after extensions the current completion date is 30th November 2013. At the time of the site visit the completion rate was about 70%. 60 22. Phase II: The scope under this phase is supply and installation of new distribution network; construction of communal water points; operator’s dwelling; laboratory building; and office building. This is an 8-month contract that commenced on April 1, 2013 with a completion date of November 30, 2013. Progress of works during the site visit was about 30%, with 50% elapsed time. 23. The mission expressed concern about the likelihood of completion of the remaining works by the current completion date. The consultant and the contractor expressed confidence that this is possible since the remaining works are pipe laying and building construction works that will be accomplished as per the revised work plan and with provision of additional resources. Close follow up is required to avoid any further delay in completion of works. Visit to Songwe Town Water Supply Project – NRWB 24. The mission team visited Songwe town water supply project site in Northern Region on Aug 9, 2013 accompanied by PMU and MoIWD staff, Regional Water Development Officer, RE (NRWB staff) supervising the works and Director of Technical Services NRWB. 25. The implementation of Songwe water supply sub-project is in two phases, the implementation status of which is described below. 26. Phase I: Source development – this involved the siting and drilling and development of 5 boreholes (initially 3 boreholes were drilled and then additional 2 were drilled to increase the yield to the projected demand), this has been completed. The combined yield of the five boreholes is 20.2 l/sec, which at 18 hrs pumping is expected to supply about 1,300 m3/day 27. Phase II : Construction of water supply system –this contract was signed on June 14, 2013 and the contractor mobilized on July 10, 2013. This 12-month contract has the following scope: supply and install 5 submersible pumps for the BHs, supply and install 2,6 km of 150 mm transmission line, construction of a 500 m 3 tank and disinfection equipment, distribution pipelines one 2.4 km to north part of the town and 10.6 km to southern part, construction of 7 CWPs, and an operating building. The mission was informed that since commencement of works, confirmation surveys have been carried out, 30% of transmission main trench excavated, and about 1.5 km of pipes and fittings delivered. 28. The mission received confirmation from the Resident Engineer that there are no land issues on the various project sites as these are on Government owned land and permission was obtained from lands department. During discussion on site, the contractor (Plem Construction) expressed confidence that the contract will be completed well before the completion date. The mission advised that communication with ESCOM for power connection needs to start right away to avoid delays in power connection for the pumps as experienced in other schemes under the project. Visit to project sites in Mzuzu Town 29. NRWB has nearly completed the construction of distribution pipelines for Mzuzu Water Supply System. The contract commenced on March 15, 2012 and is due to complete on September 30, 2013. 61 Progress is on track. 62km of pipeline have been laid and sites inspections confirmed that construction quality seems adequate. The mission discussed a remaining wetland crossing (220m of pipeline required to cross a water-logged wetland) and options for completing the contract within the contract period. Visit to Prepaid Water Meter Pilot Project in Mzuzu 30. The NRWB has been implementing a prepaid meter pilot project since May 2013. To-date, a total of 450 meters have been installed at various consumers in the selected pilot areas and some commercial and institutional customers as follows: Customer Category Description of Customers Number Individual households 441 Commercials and Institutional Ilala Lodge, Mphiri Lodge, Chatonda Lodge, Mzuzu Club, Hilltop 6 customers Gardens Lodge, Care Clinic Major commercial and Mzuzu Government Secondary school, Grand Palace Hotel, 3 institutional customers St Johns Hospital Total 450 31. During the project period, NRWB has ensured that customers do not suffer if they ran out of units and have no ready money to purchase top-up units. This is particularly important where there is delay in releasing of funds for public institutions which usually rely on funding from their respective head offices. In these circumstances, an arrangement is made to still provide units on credit to the institution which then arranges to pay when funding is available. 32. NRWB also recognizes that there are some public institutions with leaks of varying magnitudes. These leakages normally eat up the loaded units, reducing the time before next top-ups. The Board therefore periodically inspects these institutions to identify signs of any possible leaks, and advises the institutions accordingly. 33. Following the change in strategy of installing pre-paid meters through voluntary application, NRWB has to date received 479 applications for pre-paid meters. Of the applications received: 56 are for the target pilot areas, 389 are individual applications outside the target areas, and 34 are commercial and institutions. The applications in the target areas are low because most customers didn’t see the need to make an application since to them; they were already included in the li st of beneficiaries of the project for the time NRWB did the sensitization prior to the commencement of the project. NRWB will have to visit these customers and encourage them to apply. 34. It is expected that all prepaid meters will be installed in the target pilot areas as well as commercial institutions by September 30, 2013 and the pilot phase will be completed on December 31, 2013. 35. NRWB plans to undertake the following activities: 1. Continue to prioritize the selected piloted areas for installation of prepaid meters 2. As per voluntary application, prepaid meters shall be installed at the following public and commercials customers: Mzuzu Central Hospital, Mzuzu Technical College, Mzuzu University, Mphatso Motel, Viphya Secondary school, Mary Mount Secondary School, Katoto Secondary School, Luwinga Secondary school. 62 3. Sensitise customers on the significance of the reserve units and customers care contact details on the smart cards 4. Setting up of more vending points in the vicinity of the targeted customers 5. Establish a robust monitoring and evaluation system – contracted out to a third party – to assess the merits of the pilot before considering scaling up. Visit to Mzimba water Intake and Related Pipe Works Project Site (NRWB) 36. The mission visited Mzimba water intake and related pipe works and met with the representatives of the contractor (Plem Construction), PMU staff, RE from NRWB and representatives of NRWB. The project was financed under Additional Financing. The contract was signed on February 21, 2012 and commenced on July 30, 2012. The works involved construction of a concrete weir across the Mzimba River, a 12 km long 300 mm diameter DI and PVC transmission pipeline and associated fittings, valve chambers etc. The design was carried out in-house by NRWB technical staff and also supervised in house. The works were fully completed and commissioned on 16th March 2013. It is currently under defects liability period. The mission visited the new completed intake, parts of the transmission pipeline, and the existing treatment plant. NRWB informed the mission that while this new supply source has greatly improved the reliability and quality of supply to Mzima, the quantity which is limited to 2,000 m3/day by the capacity of the treatment plant will not be sufficient to satisfy the demand. The new intake supply has a capacity of 5,700 m3/day. Hence there is need for an urgent expansion of the capacity of the treatment plant and downstream facilities to fully utilize capacity of the source. The mission concurs with this observation and advised NRWB to prepare the designs for these and submit the request to MWDI for a priority consideration for future financing. The mission also advised NRWB to secure the access road to the intake for easy access for maintenance of the intake and the pipeline, provided that NRWB reaches agreement with the Forestry Department to provide support for maintaining the road and controlling illegal access to the forest reserve. Figure 5: Mzimba weir intake 63 Conclusions and recommendations 37. Under the Central Region Water Board, the mission found the quality of work in Mponela as of high standard. However Kasungu is lagging behind as such closer follow up is needed to speed up progress 38. Schemes under Northern region water board have a high quality of works and are generally on track with some already completed. 39. Schemes under the Southern Region Water Board need closer follow up and resolution of issues affecting progress especially for Mangochi Water Works and Zomba Water Supply system. SRWB should demand the contractor to improve mobilization to allow work to proceed in parallel at all project sites in Zomba and Mangochi. SRWB has to intensify oversight and improve on the management of consultants and contractors. Work in Balaka is progressing very well and appears generally of high quality. The contractor has an impressive mobilization of human resources, materials and equipment. 40. For Blantyre Water Board the works are behind schedule. Land issues affected the progress on construction of new reservoirs while the failure by the consultant to deploy staff agreed in the contract and timely review and approval of specifications is contributing to slow progress for Walker’s Ferry Water treatment works. BWB needs to urgently resolve this and ensure contract provisions are adhered to in view of the importance of the works and value. Component B : sanitation and hygiene promotion summary of field visits 41. Members of the mission team visited Dedza District Council where a meeting with Dedza District Council officials and some officials from the Ministry of Irrigation and Water Development were held at the council chamber. The district council made a presentation on the status of the school sanitation and hygiene activities. The mission noted the positive achievements made on the software activities of the project in particular the capacity building, hygiene promotion activities and the involvement of all key project stakeholders in project management and supervision. However the mission in regard to construction of VIP latrines, urinal and hand washing facilities was concerned with slow progress as evidenced by the current status of construction works (overall at 55%) attached is the status as reported by the Dedza council Building Technician – building supervisor. 42. The Mission observed that the absence of Director of Public Works (District Supervising Engineer) responsible for supervision has adversely affected progress on constriction of sanitation facilities due to insufficient supervision and contract management of the project. The Mission advised the District Council and Ministry to put in place effective mechanism to ensure that supervision is carried out professionally and issues of contract management are being followed up. The mission was informed that government has filled the vacant position of the Director of Public Works who is expected to be deployed to Dedza soon. The Mission advised Government in the meantime to deploy one civil engineer from ministry’s department of Sanitation and hygiene to Dedza District on a full time basis up to the completion of construction works. 64 43. Later the mission was split into two teams (Sanitation and Rural water supply) and visited field construction activities. The Sanitation team comprised of Elias Chimulambe (World Bank), Michael Chimaliza (PMU), Chrispin Naphiyo (Dedza District council Public Works Technician), --- (Dedza District council Building Technician) visited seven schools from two educational zones. The Mission team observed the following: Visit to Maonde zone A schools Maonde Primary School (Contractor: Pabe ) 44. Construction of Two VIP latrine blocks (1 four hole pit for boys with urinals and hand washing ; 1 four hole pit for girls with urinals and hand washing) 1 two hole pit for male and female teachers are at superstructure level representing 65% completion. The team was impressed with the quality of construction works. The mission also noted that the contractor has mobilized most of required materials on site. Following discussion with the contractor, Pabe building contractors, and district building technician, the mission feels the contractor will be able to complete construction and handover facilities within the extension period time (August 31, 2013) Figure 6: Double VIP latrine with urinals & handwashing facility at superstructure level Lobi Kainja FP school (Contractor: Pabe) 45. Construction of Two VIP latrine blocks (1 four holes pit for boys; 1 four holes pit for girls; 1 two hole pit for male and female teachers) are at superstructure level representing 65% completion. The contractor has mobilized enough materials on site. The mission feels the construction of the structures may not be completed within the remaining extension period (up to August 31, 2013) unless the contractor deploys more builders and other unskilled staff. 65 Figure 7: Double VIP latrine with Urinal& hand washing facilities at superstructure level Mchenga Primary School (Contractor: Winjiri) 46. Most of the construction works for all the VIP latrines and urinals are at slab level. Progress is at 50%. The mission confirmed of the availability of materials on site. However, the contractor has not mobilized enough skilled and unskilled staff to complete the structures within the extension period (August 31, 2013). It is unlikely that the construction will be finished and handed over within the extension period. Figure 8: Double VIP Latrine at superstructure level 66 Chowo FP School (Contractor: Winjiri) 47. Latrines at this school for all the facilities are under excavation. The mission observed and confirmed that the area is water logged. During the visit to this site, the mission established that there was no construction activity taking place. The mission also noted the lack of safety measures of some structures such as the open pits that were left without any safety warnings. This is dangerous to the safety of pupils and children within the schools. Progress is at 20% and construction of facilities will not be completed within the extended period of 30 days. Figure 9: Double VIP latrine under excavation ( this is at a water logged area) Visit to Chimwangala Zone: Thete Primary school (Contractor: GEM) 48. Construction works for all the facilities are under substructure level ( pit lining is underway) Progress at this site/school is slow and very unlikely that the contractor will complete construction works and handover by August 31, 2013. The Mission acknowledged that all the capacity building activities for pupils, teachers and school management committees have been fulfilled. Gundadzuwa FP school (Contractor: GEM) 49. Construction works for all the facilities are at slab level. Progress at this site/school is slow. The contractor’s workforce is not adequate and very unlikely that the works will be completed by August 31, 2013. Progress is at 45%. The mission also observed that the contractor is not putting up safety measures at the structures under construction as warning to the public. The school has active sanitation club which is taking a leading role in all school pupils’ sanitation and hygiene activities. 67 Figure 10: Double VIP latrine at slab level. Chule school (Contractor: GEM) 50. Construction works for all the facilities are at superstructure level. Progress is at 55%. The mission noted of good quality construction works. Construction may not be completed within the extension period unless the district council and ministry intensify supervision. The mission also noted the availability of adequate materials on site All capacity building activities have been completed and hygiene promotion activities such as school hygiene open days, extracurricular activities for pupils are being carried out as planned. Conclusions  Generally , over half of the construction works will not be completed within the extension period of 30 days ( i.e up to 31st August,2013)  Lack of effective supervision and contract management are negatively affecting the progress on almost all the construction sites  Overall quality of construction works are within Ministry of Education standard and based on the specified designs.  The contractors are not following safety measures required for such type of construction works to warn and prevent accidents that can result due to unavailability of safety warnings.  Capacity building activities have been completed in all the target schools  Hygiene promotion activities are being carried out according to plan and pupils are leading in the promotion. Parents and guardians are also taking part in some of the hygiene promotion activities. Recommendations  MWDI Department of Sanitation and Hygiene should immediately attach one of its civil engineers to the district council to support the district council team in supervision and contract management on a full time basis up to completion of all construction works  The District Council and Ministry should status of completion of facilities in all lots and then establish realistic extension period 68  Supervision of construction works should be intensified and be systematic. Component E Rural Water Supply Mvula gravity Flow Scheme 51. Part of the Mission and some officials from the Ministry of Water Development and Irrigation visited the Mvula GFS in Dedza to assess progress of work on this new scheme. The MWDI arranged that all civil works and installation of the main pipeline be undertaken by a contractor. The distribution, feeder lines and tap units will be installed by a Technical Service Provider together with the community. 52. The contractor has so far completed 38% of the works against 54% of time elapsed on the contract. The contractor has already submitted a revised program and hopes to complete the remaining works in time. In presenting the progress of work, the contractor attributed delays to site conditions encountered during excavations. Piles of rocks were evident on the site resulting from blasting that was carried out during excavations. 53. The contractor has so far constructed 5 out of 6 intakes and was installing the transmission lines at the time of the visit. The sedimentation tanks are nearly complete but connections are yet to be done. The quality of work is good so far. Construction of slow sand filters was in progress with all steel installed for the main slab. Meanwhile it was observed that the contractor has mobilized most of the materials and should make reasonable progress within the rescheduled program. 54. On the other hand, the mission noted that completion of the entire scheme will largely depend on engagement of the Technical Service Provider who will work with community to install the distribution and feeder lines. The MWDI is encouraged to speed up recruitment to avoid delays that often arise when community meets competing demands once the farming season approaches. Clearing and excavation of trenches now will also avoid compensating for crops since the fields are free at the moment. 55. The mission also learnt that pipes were now being delivered to different sites within the scheme and recommends proper storage records to avoid shortfalls in future. 56. The mission noted that there are a lot of fields under irrigation that are fed by gravity pipelines and small canals getting water from the Dedza Mountain on which the 6 intakes for the Mvula water supply scheme will be located. The mission advised the MoIWD to ensure necessary steps needed to avoid conflicts with the villagers are taken to avoid vandalism and other complications during operations. 69 Figure 11: Sedimentation tanks under construction 70