Document of The World Bank Report No: ICR0000351 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-30610 IDA-30611 WBTF-28292) ON A CREDIT IN THE AMOUNT OF SDR 13.5 MILLION (US$ 18.9 MILLION EQUIVALENT) TO THE REPUBLIC OF MOLDOVA FOR A FIRST CADASTRE PROJECT December 18, 2007 Sustainable Development Department Ukraine, Belarus and Moldova Country Unit Europe and Central Asia Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization CURRENCY EQUIVALENTS (Exchange Rate Effective December 18, 2007) Currency Unit = Moldovan Lei US$ 1.00 = 11.48 MDL FISCAL YEAR January 1 ­ December 31 ABBREVIATIONS AND ACRONYMS BCO - Branch Cadastre Office BTI - Bureau of Technical Inventory CAS - Country Assistance Strategy ECA - Europe and Central Asia FMS - Financial Management Specialist GDP - Gross Domestic Product IDA - International Development Association LAS - Land Arrangement Office M&E - Monitoring and Evaluation MAF - Ministry of Agriculture and Food NAGCC - National Agency for Geodesy, Cartography and Cadastre NCB - National Competitive Bidding PAD - Project Appraisal Document PHRD - Japan Policy and Human Resources Development Fund PIO - Project Implementation Office PPF - Project Preparation Facility PRSP - Poverty Reduction Strategy Paper QAG - Quality Assessment Group SALRC - State Agency for Land Relations and Cadastre SAR - Staff Appraisal Report SIDA - Swedish International Development Association TCO - Territorial Cadastre Office TOR - Terms of Reference USAID - United States Agency for International Development VAT - Value Added Tax Vice President: Shigeo Katsu, ECAVP Country Director: Paul G. Bermingham, ECCU2 Sector Manager: Motoo Konishi, ECSSD Project Team Leader: Ellen Hamilton, ECSSD ICR Team Leader: Maha Armaly, ECSSD ii MOLDOVA FIRST CADASTRE PROJECT CONTENTS Data Sheet 1. Project Context, Development Objectives and Design.............................................. 1 2. Key Factors Affecting Implementation and Outcomes ............................................. 4 3. Assessment of Outcomes........................................................................................... 8 4. Assessment of Risk to Development Outcome........................................................ 12 5. Assessment of Bank and Borrower Performance .................................................... 12 6. Lessons Learned ...................................................................................................... 15 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ......... 15 Annex 1. Project Costs and Financing.......................................................................... 17 Annex 2. Outputs by Component ................................................................................. 19 Annex 3. Economic and Financial Analysis................................................................. 25 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 26 Annex 5. Beneficiary Survey Results........................................................................... 28 Annex 6. Stakeholder Workshop Report and Results................................................... 30 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR..................... 31 Annex 8. Comments of Co-financiers and Other Partners/Stakeholders...................... 42 Annex 9. List of Supporting Documents ...................................................................... 44 Annex 10. Project Indicators at A Glance .................................................................... 45 MAP No. IBRD 35771 iii A. Basic Information Country: Moldova Project Name: FIRST CADASTRE IDA-30610,IDA- Project ID: P035771 L/C/TF Number(s): 30611,WBTF-28292 ICR Date: 12/19/2007 ICR Type: Core ICR REPUBLIC OF Lending Instrument: SIL Borrower: MOLDOVA Original Total USD 15.9M Disbursed Amount: USD 18.0M Commitment: Environmental Category: C Implementing Agencies: Agency for Land Relations and Cadastre Cofinanciers and Other External Partners: US Agency for International Development (USAID) Government of Switzerland Government of Japan Swedish International Development Agency (SIDA) Government of Norway B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 05/26/1995 Effectiveness: 03/05/1999 03/05/1999 Appraisal: 02/10/1997 Restructuring(s): 06/16/2005 Approval: 04/23/1998 Mid-term Review: 09/10/2001 Closing: 02/28/2004 06/30/2007 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Low or Negligible Bank Performance: Satisfactory Borrower Performance: Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Satisfactory Quality of Supervision: Satisfactory Implementing Agency/Agencies: Highly Satisfactory Overall Bank Overall Borrower Performance: Satisfactory Performance: Satisfactory i C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Performance Indicators (if any) Rating Potential Problem Project Yes Quality at Entry None at any time (Yes/No): (QEA): Problem Project at any Quality of No Satisfactory time (Yes/No): Supervision (QSA): DO rating before Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 75 75 Sub-national government administration 25 25 Theme Code (Primary/Secondary) Land administration and management Primary Primary Other financial and private sector development Primary Primary Other urban development Secondary Secondary Personal and property rights Primary Primary E. Bank Staff Positions At ICR At Approval Vice President: Shigeo Katsu Johannes F. Linn Country Director: Paul G. Bermingham Roger W. Grawe Sector Manager: Motoo Konishi Ricardo A. Halperin Project Team Leader: Ellen Hamilton Mats Andersson ICR Team Leader: Maha J. Armaly ICR Primary Author: Maha J. Armaly Solvita Klapare F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project's objective is to develop and implement a national unified real estate registration program for urban and rural land, and thereby to establish a system of clear and enforceable ownership rights, so as to promote the privatization of land and the development of real estate markets in Moldova. The real estate registration system ii established under the project will provide: (a) property owners with security of ownership rights such that they can sell or rent real estate at fair market prices and pass on their holdings as inheritances; (b) commercial banks with the confidence necessary to give secured credit against real estate; (c) the real estate market with information on ownership and location of property as needed for the market to function effectively; (d) government agencies and institutions with basic information for urban planning and land management; (e) the real estate market with information on property values; and (f) the private sector with opportunities to develop in areas related to real estate registration (surveyors, notaries, valuers). Revised Project Development Objectives (as approved by original approving authority) Board approved additional financing of SDR 2.0 million (US$3.0 million equivalent) on June 16, 2005. Project's development objective was not revised. (a) PDO Indicator(s) Original Target Formally Actual Value Indicator Baseline Value Values (from Revised Achieved at approval Target Completion or documents) Values Target Years Indicator 1 : Unified Cadastre Agency Implement proposal for Unified national Value consolidation of real estate cadastre quantitative or N/A TCOs with Not revised system for urban Qualitative) oversight of and rural land SALRC established strengthened Date achieved 04/28/1998 02/28/2004 06/30/2007 06/30/2007 Comments Within SALRC, the Cadastre Enterprise is unified with the 38 Territorial (incl. % Cadastre Offices with support from an integrated, financial, reporting and IT achievement) system, which unifies the legal and physical cadastre of land and buildings, in rural and urban areas. Indicator 2 : Develop Real Estate Market Value quantitative or NA As market Not revised Real estate market Qualitative) develops developed Date achieved 04/28/1998 02/28/2004 06/30/2007 06/30/2007 Comments Real estate market developed and fully functional. Owners of houses register (incl. % transactions of sales, rent and inheritance. # of transactions grew from 23.6 achievement) thous.in 1999 to 201.6 thous.in 2006, reaching 1,103 thous.over 9 yrs period. iii (b) Intermediate Outcome Indicator(s) Original Target Formally Actual Value Indicator Baseline Value Values (from Achieved at approval Revised Completion or documents) Target Values Target Years Indicator 1 : Number of urban real estate registrations (in thousand, cumulative) Value (quantitative 5 330 Not revised 834 or Qualitative) Date achieved 04/28/1998 02/28/2004 06/30/2007 06/30/2007 Comments (incl. % Target was exceeded already at original closing date, i.e., 452,000 registrations achievement) as of end CY2003. Indicator 2 : Number of extravillan (rural) real estate registrations (in thousand, cumulative) Value (quantitative 5 300 Not revised 3,280 or Qualitative) Date achieved 04/28/1998 02/28/2004 06/30/2007 06/30/2007 Comments Privatization of agricultural land completed during 1998-2000 with assistance of (incl. % USAID 'Land' Project included issuance of ~2.8 mil. ownership titles, allowing achievement) for mass registration during short period of time. As of end CY2003, 2,942,000 registrations. Indicator 3 : Number of real estate transactions (in thousand, cumulative) Value (quantitative 0.3 15.9 Not revised 1,103 or Qualitative) Date achieved 04/28/1998 02/28/2004 06/30/2007 06/30/2007 Comments (incl. % Target was exceeded already at original closing date, i.e. 455,000 transactions as achievement) of end CY2003. Indicator 4 : New mortgage legislation introduced (laws, regulations) Value (quantitative -- Introduced Not revised Introduced or Qualitative) Date achieved 04/28/1998 02/28/2004 06/30/2007 06/30/2007 Comments (incl. % Law on Pledges passed in 2001. The Law allows for fast foreclosure procedures achievement) available to commercial banks in case of unpaid loans. Indicator 5 : Number of mortgages provided (% of registered properties / thousand) Value (quantitative 1% / (0.1) 3% / (15.9) Not revised 0.3% / (14.6) or Qualitative) Date achieved 04/28/1998 02/28/2004 06/30/2007 06/30/2007 Comments In 2006 # of reg. mortgages increased 9 times (to 14,600) compared to 1999. (incl. % Total # reached 72,800. % of mortgages per year of total reg. properties is less achievement) than SAR estimate since targeted # of reg. properties was significantly exceeded. Indicator 6 : Number of real estate agents iv Value (quantitative 24 40 Not revised 198 or Qualitative) Date achieved 04/28/1998 02/28/2004 06/30/2007 06/30/2007 Comments (incl. % achievement) Indicator 7 : Number of information requests to Territorial and Branch Cadastral Offices (% of registered properties / thousand) Value (quantitative 2% / (0.2) 10% / (53) Not revised 5.4% / (228.9) or Qualitative) Date achieved 04/28/1998 02/28/2004 06/30/2007 06/30/2007 Comments Total # of cadastre information inquiries per year increased by ~9 times (to (incl. % 228,000) compared to 1999. % of inquiries per year of total # of registered achievement) properties lower than planned since targeted # of reg. properties was significantly exceeded. Indicator 8 : Number of cadastral maps produced (thousand sqkm., cumulative) Value (quantitative 4 30 Not revised 14.061 or Qualitative) Date achieved 04/28/1998 02/28/2004 06/30/2007 06/30/2007 Comments (incl. % achievement) Indicator 9 : Number of (examined) training participants (number, cumulative) Value (quantitative 50 250 Not revised 3,578 or Qualitative) Date achieved 04/28/1998 02/28/2004 06/30/2007 06/30/2007 Comments Initial training (1998) for of surveyors of urban and rural areas - 660 participants, (incl. % training during project implementation - 2,300 participants, private sector achievement) participants in cadastral survey training - 323. Property valuation - 295 trainees. Indicator 10 : Relevant property laws, regulations and normative acts introduced (Laws/Regulations) Value (quantitative -- Introduced Not revised Legal system in or Qualitative) place Date achieved 04/28/1998 02/28/2004 06/30/2007 06/30/2007 Comments Law on Real Estate Cadastre (1998) and its secondary legislation; Law on (incl. % Normative Price and Procedure for Sale and Purchase of Land (1997); Law on achievement) Real Estate Formation (2004); Tax Code (Title VI Real Estate Tax (2000); Law on Valuation Activity (2002) Indicator 11 : Valuation procedures introduced (valuation system) Value (quantitative -- Introduced (2nd Not revised Introduced or Qualitative) year) Date achieved 04/28/1998 02/28/2001 06/30/2007 06/30/2007 v Comments Legislation and implementation regulations for property valuation based on (incl. % market values in place. Methodology for mass appraisal developed. Valuation achievement) included in cadastre IT system providing clients with electronic data. Indicator 12 : Licensing system introduced for operation of private real estate agents, surveyors, notaries, valuers etc. Value All in 1st year, (quantitative -- except for valuers Not revised Introduced and or Qualitative) in 2nd year functional Date achieved 04/28/1998 02/28/2001 06/30/2007 06/30/2007 Comments Certification of surveyors by Cadastre Agency stipulated by law. Notaries (incl. % certified by Ministry of Justice. Cad. Agency established Board certifies achievement) qualifications of valuation experts. Prof. associations for surveyors, notaries and valuers operative. G. Ratings of Project Performance in ISRs Actual No. Date ISR Archived DO IP Disbursements (USD millions) 1 06/24/1998 Satisfactory Satisfactory 0.00 2 06/26/1998 Satisfactory Satisfactory 0.00 3 03/24/1999 Satisfactory Satisfactory 0.00 4 06/30/1999 Satisfactory Satisfactory 1.55 5 12/20/1999 Satisfactory Satisfactory 3.10 6 03/22/2000 Satisfactory Satisfactory 3.48 7 06/19/2000 Satisfactory Satisfactory 3.72 8 11/13/2000 Satisfactory Satisfactory 5.20 9 06/25/2001 Satisfactory Satisfactory 6.00 10 12/12/2001 Satisfactory Satisfactory 7.12 11 06/27/2002 Satisfactory Satisfactory 7.87 12 12/04/2002 Satisfactory Satisfactory 8.61 13 06/18/2003 Satisfactory Satisfactory 9.58 14 12/05/2003 Satisfactory Satisfactory 11.02 15 03/25/2004 Satisfactory Satisfactory 11.73 16 06/10/2004 Satisfactory Satisfactory 12.41 17 11/10/2004 Satisfactory Satisfactory 14.00 18 05/18/2005 Satisfactory Satisfactory 15.46 19 01/02/2006 Satisfactory Satisfactory 16.35 20 05/15/2006 Satisfactory Satisfactory 16.49 21 10/17/2006 Satisfactory Satisfactory 16.72 22 06/29/2007 Satisfactory Satisfactory 17.12 H. Restructuring (if any) vi ISR Ratings at Amount Restructuring Board Restructuring Disbursed at Reason for Restructuring & Date(s) Approved Restructuring PDO Change Key Changes Made DO IP in USD millions 06/16/2005 N S S 15.69 Additional financing for scale- up of activities I. Disbursement Profile vii 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. At appraisal in 1997, Moldova had embarked on a successful stabilization program leading to declining inflation from 3 digits in 1994 to about 11.2% in 1997. The new currency, the Lei, established at the end of 1993 began to appreciate against the three major trading partners then, Russia, Romania and Ukraine and stabilized for a period around 4.7 Lei/US$. Economic stabilization came at the expense of declining standards of living as reflected in the continued decline of GDP, which fell by about 60% between 1991 and 1994. Negative growth slowed down to a negative 8% in 1996. In 1997, Moldova became a blend Bank/IDA country eligible for IDA financing. 2. At the time of appraisal, Moldova had already chosen its reform path to a market economy, albeit at a slow and interrupted pace. While the concept of private property was widely accepted, it was applied differently depending on location (urban vs. rural), use (private vs. commercial), and type (buildings vs. land). Land was usually associated with agriculture use rather than with property in general; land use would translate into long-term "right of use", and land values in both urban and rural areas were still drawn up according to principles of fertility and use rather than in terms of location and market price. 3. Privatization of the housing stock started in 1991. By 1997, more than 85% of the housing stock was turned to private ownership. Privatization of buildings belonging to enterprises proceeded at much slower pace. By 1997, about a third of revenue generating activities was in private hands, and the majority of enterprises obtained ownership of their buildings. Privatization of land lagged dramatically behind the privatization of buildings due to government regulations defining a cumbersome and costly process for registration and titling. At the time, about 90% of all land parcels in Moldova still belonged to the state. Privatization of agricultural land was slowed down by the split up of cooperative farms (kolkhozes). 4. Overall, Moldova's economic development was impeded by insecurity of property ownership and related institutional arrangements resulting in a lack of collateralized credit and difficult real estate transaction procedures. Order and stability of the real estate market was needed to optimize the uses of land and property. At the same time, due to privatization and economic changes, real estate transactions were on the rise, but overall the market was hampered by lack of tenure security. Transaction costs were high due to lack of information. 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) 5. The project's original objective was to develop and implement a national unified real estate registration program for urban and rural land, and thereby to establish a system of clear and enforceable ownership rights, so as to promote the privatization of land and the development of real estate markets in Moldova. 6. At the time of project appraisal and negotiations, formal indicators through the logical framework approach were not explicitly required for projects. Nevertheless, the following outcomes were defined where the project would provide: (i) property owners with security of 1 ownership rights such that they can sell or rent real estate at fair market prices and pass on their holdings as inheritances; (ii) commercial banks with the confidence necessary to give secured credit against real estate; (iii) the real estate market with information on ownership and location of property as needed for the market to function effectively; (iv) government agencies and institutions with basic information for urban planning and land management; (v) the real estate market with information on property values; and (vi) the private sector with opportunities to develop in areas related to real estate registration (surveyors, notaries, valuers). 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification 7. The Project Development Objectives were not revised. The Board of Executive Directors approved additional financing of SDR 2.0 million (US$3 million equivalent) on June 16, 2005. Additional financing was requested by the Government to help finance the costs associated with scaling up activities to enhance the impact of a well performing project. 1.4 Main Beneficiaries 8. The Staff Appraisal Report (SAR) identifies the direct beneficiaries of the project to be existing and prospective private owners of real property. The project also encourages private sector developments in areas involved in project implementation, including private surveyor industry, private notaries and private real estate valuers, fiscal cadastre and effective environmental land management. 1.5 Original Components (as approved)1 9. Component I. MAPPING PROGRAM (Cost: US$6.9M, Credit: US$3.6M): The project finances production of new maps and updating existing maps in the thirty six rayons and municipalities (i.e. except Transnistria). Financing would be for selective surveying in support of mapping activities to facilitate registration of real property ownership. This component was to cover about 50% of urban land and 20% of privatized rural land. 10. Component II. URBAN CADASTRAL SERVICES PROGRAM (Cost US$8.6M, Credit US$7.2M). This component finances urban cadastral services to provide the institutional basis for registration in urban and intravillan areas, and storage and administration of ownership information to be readily available to all potential users. Two subcomponents are: (a) Real Estate Registration Program: finances registration of ownership rights in urban and intravillan areas and storage and administration of ownership information to be available to users. This includes: (i) reorganizing and strengthening the existing 12 former Bureaus of Technical Inventory (BTIs) in the largest municipalities into Territorial Cadastre Offices (TCOs); and (ii) support of these offices in ownership registration, title conversion and maintenance of the legal cadastre. The project expected to register 330,000 or 50% of urban and intravillan properties. 1Each component cost factors in physical and price contingencies 2 (b) Information Services Program: In urban areas, this component finances: (i) installation of cadastral databases in twelve TCOs, including development and maintenance; (ii) collection and registration of cadastral information; and (iii) transfer, consolidation and maintenance of the data to the National Agency for Geodesy, Cartography and Cadastre (NAGCC), later renamed and referred to hereafter as the State Agency for Land Relations and Cadastre (SALRC) allowing users to access the information. 11. Component III. RURAL CADASTRAL SERVICES PROGRAM (Cost US$3.7M, CreditUS$2.8M). This component finances activities to provide the institutional basis for registration of ownership rights in rural (extravillan) areas and storage and administration of information to be readily available to all potential users. Two subcomponents are: (a) Real Estate Registration and Title Issuing: This part finances in rural areas: (i) adjustment of registration techniques used in rural primarias and Land Arrangement Offices (LAS); (ii) reorganization of former BTIs into Branch Cadastre Offices (BCOs) and establishment of new BCOs for a total of 24 BCOs, and integrating LAS activities into BCOs; (iii) issuance of title deeds in the context of farm privatization; and (iv) registration of ownership rights to real estates. The project expected to register 200,000 or 20% of privatized rural land. (b) Information Services Program: This part finances in rural areas: (i) installation of appropriate cadastral databases in twenty four BCOs; (ii) collection and registration of cadastral information in these databases; and (iii) transfer, consolidation and maintenance of the data to SALRC to allow users throughout Moldova to access information. 12. Component IV: INSTITUTION AND CAPACITY BUILDING PROGRAM (Cost: US$5.4M, Credit US$2.3M). This component supports institutions participating in project activities. It includes training, technical assistance, and establishment of the Project Implementation Office (PIO). (a) Training: (i) in project implementation to SALRC, TCO and BCO offices, including training in modern registration methodologies and institutional reorganization; (ii) for information technology specialists; (iii) in property valuation for real estate valuers and SALRC staff administering real estate valuation through the TCOs; (iv) study abroad for a geodetic engineer and photogrammetrist; (v) one year study abroad for university lecturers in cadastre, geodesy, topography, cartography, notarial law, and property valuation; and (vi) training equipment for SALRC and the Technical and Agricultural Universities in Chisinau. (b) Technical Assistance to develop and expand institutional knowledge and capacities in: (i) project implementation; (ii) information systems; (iii) procurement; (iv) accounting; (v) legal development; (vi) training; (vii) property valuation; (viii) public information; (ix) mapping/photogrammetry; (x) digital mapping; (xi) land registration; (xii) cadastral surveying; and (xiii) global positioning systems. (c) Project Implementation Office to coordinate, oversee and implement the various project components. 1.6 Revised Components 13. The contents of the project components were not revised, except for re-allocation of credit proceeds amongst the different components, particularly from technical assistance to urban 3 and rural surveying given donor financing for the former activities. In June 2005, an additional SDR 2 million (US$3.0 million equivalent) was provided to the project to upscale activities under urban and rural cadastral services program components by: (i) additional surveying and registration of an estimated 400,000 - 450,000 objects; and (ii) upgrade of the existing information system. 1.7 Other significant changes 14. Project design focused on the urban cadastre registration and surveying where housing privatization had progressed sufficiently by appraisal. The rural component was initially designed to be small to test developments in the privatization of agricultural land. Policy discussions were still ongoing regarding rural/agricultural privatization given the primacy of the agriculture sector in Moldova, the concern of the Government at that stage about the impact of potential change in ownership of an important productive sector, and the competing political demands. By the early stages of implementation, the Government, with support from the international community in general, and from the World Bank and the USAID Land Project in particular, took the decision to move forward with farm privatization and the break up of collective farms. The Government requested and the Bank agreed that the project could register rural land parcels privatized under the Land Project, and not financed by USAID. 15. There were two amendments to the IDA credit, which extended the project closing dates by 21 months until November 2005. The extensions allowed for the signature and completion of pending surveying contracts and use of the re-allocated funds from equipment and TA activities that were provided by other donors to the main surveying and registration activities under the project. The second extension was necessary to overcome delays in the procurement and implementation of the scheduled surveying contracts, as well as to finalize the delayed registration of properties in the capital Chisinau due to complexities related to registration of the land in excess of privatization entitlements. To scale up the activities of the project and to enhance the development impact, additional financing of SDR 2 million (US$3.0 million equivalent) was approved in June 2005. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 16. Project preparation was extensive, and supported by two Project Preparation Facilities (PPF-P2870 for US$700,000, IBRD-P2871 for US$1 million), two PHRD Grants (JPN-29498 for US$681,500, and JPN-27118 for US$396,500) and IDF Grant (WBTF-28292 for US$195,000). Activities financed with these funds helped to set up the Project Implementation Office with appropriate skills and to establish business procedures for the project. These funds helped establish business procedures for the SALRC, and initiate an extensive public information programs. Project implementation procedures were strengthened through pilot programs in three test areas involving mapping, surveying and registration activities, which served as a basis to develop adequate methodology and project design. 17. At the time of appraisal, there was a risk in undertaking this project due the far reaching reform pursued while Moldova was undergoing a new environment of privatization and transition to the market economy, and given the nature of the coalition government at the time, which had different opinions on the pace of reform, particularly in the privatization of agricultural land. The Bank and the Government succeeded in furthering essential reforms that were necessary to 4 establish private property ownership as a crucial step towards transition to a market economy. This was in full compliance with the Country Assistance Strategy (CAS) and continues to be a theme in strengthening the transition and private sector development. The quality of the project was further strengthened by the provision of training, and grant technical assistance by Sweden and Switzerland. 18. While a quality at entry review was not undertaken, the Quality Assessment Group (QAG) assessment of the project during supervision (September 2004) confirmed that the project design at entry was satisfactory with sound basic parameters, specially the impact monitoring indicators. During preparation, the task team collaborated across sectoral boundaries with ECA Agriculture Group, which had a special interest in rural cadastral work in Moldova and experience in rural cadastral work in other ECA countries. This collaboration was assessed as a strong element of project preparation and supervision. 19. Project was rated as potential problem project for a period in 2000/2001. The reason for this rating was mainly related to problems that were common to the portfolio, including lack of counterpart funding due to Moldova's deteriorating budgetary situation, as well as some reversals in reform that gave the country a risk flag. The budget/counterpart funding problem was solved at the country level with counterpart funding provided by a Dutch Grant to Moldova to co-finance Bank supported operations. 2.2 Implementation 20. Project implementation arrangements were well established during the preparation of the project through the pilot testing. At the beginning of the project, the financial management capacity at the SALRC and the PIO was limited. Technical assistance was provided and a financial management software `1 C' produced in Russia and broadly used in the region, was introduced satisfactorily to the project, and Bank financial management requirements were met. In procurement, at the beginning of the project, the PIO opted to use small contracts (small works and then NCB) for surveying to first address the need to strengthen a relatively skilled surveying industry, but one that had little experience in the market. This worked well in providing the necessary work experience for local companies, and was supported with training. Firms bought necessary equipment and updated their staff skills to carry out the project. However, the process proved to be too slow to achieve the project objectives in the time frame. The Bank worked with the PIO to start larger surveying contracts using ICB procedures. Foreign firms entered the market and, while the per parcel cost was higher than earlier works by small local firms, the management experience and increased competition contributed to project progress, as well as to the development of the market. Foreign firms sub-contracted to local ones and improved the work environment that Moldovan firms needed to work within and adapt to a more competitive environment. The mapping program was to be implemented by INGEOCAD, the mapping arm of the agency, which was the recipient of Swiss funding in the form of sophisticated mapping equipment, technical assistance and training. However, INGEOCAD could not keep up with the demands of the project in a timely manner, largely due to loss of its well trained staff (for abroad). With this delay, the NAGCC opted to have more mapping done by ground methods at cheaper rates, though unfortunately at poorer quality, and therefore does not show under the mapping component. 21. The project was operating in a difficult political environment, from reform minded coalition governments that were changing often, to a more stable Government, which, however, was more hesitant about sudden and far reaching reform. As a result, there was pressure on the 5 SALRC and attempts to change its reporting requirements to specific ministries, rather than the recommended independent office of the Deputy Prime Minister. The Bank took quick action to stop such attempts and to keep the project on track. At the same time, and due to similar political pressures, turnover of agency management increased. In most cases adverse impact was averted due to strong ownership of Central Government, particularly non-sectoral ministries, such as Ministries of Finance and the Economy. The final agreement not to replace the PIO manager and continue with the effective management of the Deputy Director of the PIO was a step in the right direction to stop such attempts and to keep the project on track and forward looking. 22. The East Asian and later Russian financial crisis, which occurred in the late 90's contributed to deterioration in the economic situation in Moldova. Counterpart funding became more difficult to obtain. The situation was solved with the Dutch Government grant to support the Bank portfolio in Moldova, which was necessary during 2000-2002. From then on, while there were some delays in government counterpart financing, the problems were often solved expeditiously. 23. While not required under the project, the Ministry of Finance required repayment of the credit from the SALRC. The SALRC paid the commitment charges, which were very low, in the first five years of the project. The long term assessment by the PIO indicated that payment of principal would need substantial tariff increases, which were being resisted by some stakeholders, including from within the Government. The tension created by these conflicting demands on the SALRC encouraged it to be versatile, innovative, and to take the lead in the discussions on financial sustainability of the cadastre system. With the regular progress and financial reports, the PIO was able to show the difficulty of satisfying these competing demands without cooperation from other stakeholders. Government agencies were not paying for the services they were increasingly demanding from the cadastre system. The PIO was also able to show that the strategy of low tariffs (advocated to develop rural and agricultural land markets) was being undermined by notaries, who increased their fees many fold as they exercised a form of monopoly. Additionally, the PIO monitored the increased tax revenues due to improved cadastre, both at the local and central level, and argued that since cadastre benefits accrue both at the national and local levels, all private and public users and beneficiaries should bear the cost of developing and maintaining the system. As a result, the PIO was able to convince the Government to change the requirements to: (i) regulate notary fees; (ii) make Government agencies pay for the services required; (iii) increase the income of the Cadastre Enterprise from other sources by providing services to banks, real estate agents, valuers and others; (iv) request an exemption from 18% value added tax; and (v) change the base of fees to be the value of the property whereby wealthier real estate holders can shoulder more of the costs. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 24. The appraisal Monitoring and Evaluation plan was prepared during the early stages of the Bank's emphasis on a proper monitoring and evaluation system. The project preparation was launched before the logical framework became a standard attachment of Project Appraisal Documents (PAD) (August 1997). The Staff Appraisal Report identified a list of outcome/impact indicators in its Annex 4 that were monitored by the PIO throughout project implementation, despite the fact that some of the indicators were not important for the tracking of the project. For example, the number of laws passed does not indicate good progress if one does not look into the quality of the laws and their implementation. On the contrary, too many laws do not necessarily mean good progress. For this reason, and with project implementation experience, the M&E concept began to be better understood by the Bank and Government teams. In January 2000, an easy-to update one page `Project at a Glance' table was introduced to inform decision makers on 6 the project progress and to help the task team follow progress in a more informative manner (see Annex 10). The monitoring indicators tracked the usefulness of the system, the progress in survey and registration work by location (rural and urban), as required by the project, but also by type, such as transactions including encumbrances, as well as users (banks, valuers, government), which gave good indication as to the development of the real estate market. The PIO supervised the survey work very closely and worked with contractors and met with them regularly to solve problems. The PIO maintained very close ties with registration offices in the local governments, provided training and ensured efficient and correct exchange of data through extensive training and monitoring by its skilled technology team. 2.4 Safeguard and Fiduciary Compliance 25. Safeguards. There were no safeguard risks in the project (Category C). No social risks due to the project arose during implementation. 26. Financial management faced some hurdles at the beginning of the project, given the renewed emphasis and requirements by the Bank and the lack of experience in Moldova. Financial staff were hired and trained. A software acceptable to the Bank and utilized in the region was implemented at the PIO and staff were able to manage the system satisfactorily. Quarterly financial reports have been prepared by the PIO staff and submitted to the Bank, generally with little or no delays and with no significant discrepancies. Audit reports were undertaken annually with little or no delays. Audit reports had unqualified opinions, except for the audits of FY 2004-2005. The qualification received was explained as to the inability of the new auditor to verify project cumulative accounts (not usually in auditor's TOR), i.e. accounts of previous years since audits were done by different audit firms. Annual audited project statements, however, were found to be acceptable. The auditors mentioned a few internal control issues and recommendations to address those. PIO/SALRC management followed up on the recommendations of the auditor to the best of its abilities. The final audit of the project financial statements, due June 30, 2008, will be undertaken after the end of grace period (i.e. after October 2007). 27. Procurement was well established as the PIO gained experience and technical assistance during preparation and the early stages of implementation. Staffing was generally stable throughout project implementation with limited turnover. PIO management opted to utilize small contracts to strengthen the bidding survey industry, which was technically competent, but lacked the necessary managerial skills to operate under competitive procedures. In order to expedite project implementation, the Bank insisted on initiating ICB procedures. Foreign firms entered the market and sub-contracted to local firms, thus helping the development of the local surveying contractors. While some hurdles and complaints arose as to the use of foreign contractors and their higher costs, the knowledge transfer and progress of work became apparent. The number of complaints increased in the last few years of the project, mainly a reflection of increased knowledge of Bank procedures by contractors. Complaints were resolved by the PIO after consultation with the Bank, but largely with minimum Bank interference. One case was reported to the Department of Institutional Integrity. There was suspicion of collusion amongst contractors, including changes made to bids after they were submitted. These charges were communicated to the PIO, but were extremely difficult to prove irrevocably and in a timely manner. The Bank gave the PIO the option to proceed with the same proposed bid award with the potential for further investigation and declaration of misprocurement/cancellation of part of loan if any wrongdoing was proven, or to go through rebidding. The PIO selected to rebid. Progress reports regularly included progress on procurement and updated the procurement plan. 7 2.5 Post-completion Operation/Next Phase 28. The provision of additional financing to the First Cadastre Project gave the SALRC/PIO time to prepare for the Bank's exit. Efforts in the last 3 years focused on the sustainability of the project and plans beyond Bank assistance. SIDA, in particular, provided focused support for these activities and assisted the PIO in preparing a business plan and strategy for the cadastre system. Earlier actions and discussions on fees also prepared for financial sustainability. In 2005, a corporate network was established to connect all 38 regional databases into a single centralized database of cadastre. This became the basis for the establishment of the Cadastre Enterprise encompassing the central office at the SALRC, with PIO and other staff, and the 38 regional offices. The corporate plan includes steps to expand services, upgrade and maintain the system and to improve its security and reliability. The PIO has been successful in developing the strategy and in bringing together several stakeholders inside and outside the government for its support. In 2007, the Parliament enacted amendments to the Cadastre Law stipulating that access to the central database of cadastre shall remain free for public institutions, whereas all operational costs related to the issuance of hardcopy information shall be covered from the state budget; and approved a Tariff Methodology stipulating the recovery of operational costs for the Cadastre Enterprise and its branch offices. By 2006, specialized customers, such as commercial banks, real estate agents, brokers and private surveyors could access the centralized database. About 50 subscribers to the system pay 350 leis per month for access. By 2006, mass registrations (financed by the credit) constituted only 6% of the revenue of the Cadastre Enterprise, and the remainder was generated from other activities mainly from individual registrations and information requests paid for by customers as well as from requests for valuation of individual properties. 29. Moldova is firmly on the road to a market economy. The physical and legal cadastre supports this route by recording private ownership and establishing the essentials for the development of the real estate and free markets. Support for the objective of the project from several stakeholders is anchoring sustainability. Owners are registering their properties and transactions. Banks are using cadastre data to verify ownership and to register encumbrances. Private investors request data from cadastre to verify property ownership before taking investment decisions. Local governments are utilizing cadastral data to improve collections of property taxes and to improve their planning. National Government is providing funding to expand the utilization of the system to develop addressage and fiscal cadastre. 30. More than 82% of real estate objects in Moldova are now surveyed and registered. While the SALRC attaches high priority to completing the surveying and registration of all properties, it is also focusing on ensuring the development, maintenance and security of the system to avoid obsolescence. The SALRC, through the Cadastre Enterprise, continues to attract bilateral support. SIDA plans to continue support to the SALRC, particularly to expand the use of the cadastre system as the basis to complete the fiscal cadastre. SIDA also continues its support in the business plan and strategy development. Norway has expressed interest in providing support for photogrammetry. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 31. The project development objectives as stated in the SAR are clear and important to the agreed CAS between the Bank and the Government of Moldova. A modern secure cadastre and 8 registration system forms a basis for Moldova's objective of strengthening policies to develop a competitive market economy. The project outcomes continue to be relevant to the support of the current CAS priority to sustain growth and improve access to services and infrastructure, in addition to supporting Moldova's aspiration to strengthen its private sector and adapt its legal and institutional framework to approach EU standards. The First Cadastre Project outcomes are crucial to the development of the private sector in Moldova, which continues to be an important theme in the development of strategic agreements between the Bank and the Government (CAS and PRSP). 3.2 Achievement of Project Development Objectives 32. The project's primary development objective to establish a national unified real estate registration program for urban and rural land has been achieved successfully. The cadastre system and its supporting legal framework is based on modern practices and establishes clear and enforceable ownership rights that are necessary for developing a real estate market. The monitoring indicators recorded throughout implementation and achieved by the end of project implementation show the progress in these areas. The State Agency for Land Relations and Cadastre and its legal, economic cadastre, geodetic, cartography and mapping departments received training and institutional strengthening. Within SALRC, the Cadastre Enterprise is unified with the 38 territorial cadastre offices with support from an integrated, financial, reporting and IT system, which unifies the legal and physical cadastre of land and buildings, in rural and urban areas. 33. The secondary objectives have also been successfully achieved. These objectives included ensuring that: (i) property owners with security of ownership rights such that they can sell or rent real estate at fair market prices and pass on their holdings as inheritances; (ii) commercial banks with the confidence necessary to give secured credit against real estate; (iii) the real estate market with information on ownership and location of property as needed for the market to function effectively; (iv) government agencies and institutions with basic information for urban planning and land management; (v) the real estate market with information on property values; and (vi) the private sector with opportunities to develop in areas related to real estate registration (surveyors, notaries, valuers). The cadastre system provides owners with security and enables them to make transactions with confidence backed by legal registered records. Mass urban registrations are about 2.5 times the planned numbers and are at about 51% of the estimated number of real estate objects in urban areas. About 82% of estimated total plots have been registered. In addition, selective registrations based on transactions reached 1.1 million. Commercial banks, notaries, valuers and real estate agents now request information from the cadastre to verify transactions and other information for their customers. The number of inquiries increased from about 25,000 in the beginning of the project and surpassed 200,000 inquiries in the last three years of the project reflecting increased usefulness and trust of the system and a maturing of the real estate market and its actors. A fiscal cadastre has been developed, and the property tax law has been revised. Property tax collections have improved based on the better information provided by the system. 3.3 Efficiency 34. At appraisal, the project was expected to spur economic growth through: (i) providing guarantee of ownership and security of tenure; (ii) facilitating the functioning of real estate markets; (iii) supporting privatization in the agricultural sector by providing mechanisms for facilitating the restructuring of Kolkhozes; and (iv) supporting effective urban planning and 9 private sector development. Such benefits were difficult to estimate then and remain difficult to quantify given the complexity of the development process that occurred in Moldova during implementation, and the many other factors that impact such benefits, which would make it difficult to isolate the impact of the project by itself. For the financial analysis, the SAR projected costs and benefits for the life of the credit; i.e. 35 years, based on cost estimates at the time. Financial benefits were expected to emerge throughout the period through incomes from fees for registrations, provision of information and royalties from the sales of maps. The project's financial rate of return calculated based on appraisal estimates reached 8.5%, but given the public goods nature of the project, the economic rate of return was expected to be higher. 35. The SAR assumptions and projections were simulated using data and information provided by the PIO. According to this data, the majority of revenues to the project came from providing information to the private sector (commercial banks, valuers, real estate agents and notaries). Other important revenues due to the project are revenues from selective registration. Computer and other equipment were assumed to be replaced every fourth year. Based on these assumptions, the estimated financial rate of return on the project is estimated to be 24%. 36. At the time of the SAR, a fiscal cadastre was not envisioned (beyond a study). The cadastre system assists to better identify real estate objects and their development (10-20% more identified according to the PIO). In addition, a value based fiscal cadastre has been adopted which further increases the accuracy of market values of properties, thus increasing the potential for the public sector to recover the costs and continue to replace investments and to maintain and improve the system. These potential benefits are not included in the analysis above, given the lack of data and the need for further investments, the costs of which are not known at this stage. (Data provided on increase in collection of local property tax does not verify a 10-20% increase in collection). However, it is expected that these public revenues make the overall cost recovery for the cadastre system and its maintenance a real possibility. Benefits of the system will continue for the future, and further estimates or attempts to quantify the impact remain speculative at best. The necessity of a real estate registration system in any market economy is indisputable, and the benefits that could derive from such a system remain to be further tapped in Moldova. 3.4 Justification of Overall Outcome Rating Rating: S 37. The overall outcome rating is based on a combination of the achievement of objectives, relevance and efficiency. The relevance of the project development objective is significant. The project objectives were clear yet broad, and have been achieved. The main objective of developing and implementing a national unified real estate registration program for urban and rural land, and establishing clear enforceable ownership rights has been fully achieved in a satisfactory manner. Moldova has established one of the most efficient cadastre systems in the region. It is a unified system where a real estate transactions and information are secured in one system under the responsibility of the Cadastre Enterprise. The secondary objectives have also been achieved. The legal and infrastructure basis for a real estate market has been developed and is the cornerstone for consolidating land in rural areas through sales and leases. Owners of real estate objects are using the system to undertake transaction of sales, rent and inheritance. Commercial banks have expressed their confidence in the system and their desire to have more immediate access to the relevant data for them to expedite their own procedures. The Government has initiated the use of the available system as a base for the further development of a fiscal cadastre system for property taxation. The surveying industry has benefited from this project 10 which enabled it to consolidate to more efficient entities and provided the necessary jobs for the industry to mature. Moldovan surveyors were able to compete and win in international competition. Public sector surveyors remain employed by municipalities, but all project activities were done by the private sector, which practically did not exist before the project. The development of valuation service industry is in its early stages and is being strengthened with the development of the fiscal cadastre. The notary industry developed with hick ups, sometimes demanding fees that were too high, but the issue was also addressed by the PIO/SALRC raising it to higher Government levels. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 38. While the project did not specifically target poverty, it had a profound impact by creating a market and facilitating transactions for real estate assets. With the economic hardships of the disintegration of centralized planning, the change and loss of currency values, savings and employment, land and housing were the immediate real assets that were transferred to the population following the fall of centralized planning and state ownership. These assets maintained their relative value and use during the difficult times and conditions improved significantly soon as Moldova's economy picked up momentum. Socio-economic impact assessment carried out in mid-2003 indicates that household utilized their real estate assets as part of their wealth to weather economic hardships and/or to expand their economic potential through lease or sale of such assets. As the economy in Moldova recovers and is on a growth path, the real estate sector is expected to play a role as a growth pole and to attract investments. The cadastre system helped create the foundations of a more efficient and secure market to trade real estate assets and/or create new ones. The real estate ownership framework in Moldova treats all citizens equally and is gender and ethnicity blind. (b) Institutional Change/Strengthening 39. Institutionally, the project successfully achieved its objective in establishing a modern institutional and legal framework for real property registration in Moldova. The legal framework has been introduced and strengthened. The single agency model is based on best practices by international standards that facilitates the transactions for the consumer and avoids duplication among different institutions. The SALRC has started to make the cadastre system useful for several other purposes such as the establishment of a cadastre of addresses, and the development of fiscal cadastre. The cost recovery requirement in the project has put the pressure on the SALRC to improve efficiency and to open dialogue with government and other stakeholders on the benefits of well maintained and responsive cadastre system. Strong skills and capacities have been built in the SALRC, particularly in management, surveying, technical advances, and valuation. Training had also been instituted in the Technical and Agricultural Universities that participated in training abroad, particularly in Sweden. SALRC provides training, certification and licensing for valuers and surveyors. Associations of cadastre professionals (real estate, valuation, surveyors) have been established with an eye on keeping professional standards of the industry. (c) Other Unintended Outcomes and Impacts (positive or negative) 40. Outcomes were largely as intended, but some surpassed expectation. In particular, the number of parcels surveyed and registered went beyond appraisal estimates, largely due to 11 SALRC integrating the work of several donors to the benefit of the cadastre system. The advance in the development of the fiscal cadastre with SIDA's assistance was also beyond expectation. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 41. This ICR does not require a Beneficiary Survey. A social impact assessment was carried out in mid-2003 to assess opinions of several stakeholders. A team of international and local social scientists carried out field research throughout Moldova, including discussions with 185 stakeholders and key informants. The work included an extensive literature review, qualitative interviews, a quantitative survey of some 600 respondents, and a series of focus groups. The study was undertaken during a difficult period of Moldova's development when the country had just started to experience positive growth, yet the impact of more than a decade of economic decline remained strong. The study noted difficult circumstances such as declining secondary cities, deteriorating housing stock, out-migration and human trafficking, corruption, agricultural fragmentation. The study warned against the continuation of such an environment on the long term development of the cadastre system. Despite the difficult environment, the direct impact and society's perception of the project and the future role of the cadastre system remained positive. Households as well as businesses found the system fair and workable, and were able to utilize their real estate holdings to enhance their livelihoods. 4. Assessment of Risk to Development Outcome Rating: L 42. Moldova is well on its way to a market economy, where private property forms the cornerstone. Privatization has largely been completed, a real estate market is prospering and society as a whole has bought into the system and depends on it for economic activities. The system has grown to encompass other functions such as fiscal cadastre, as well as infrastructure planning and monitoring. The cadastre system will continue to strengthen Moldova's market orientation. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Satisfactory 43. The Bank's performance during project preparation was satisfactory. Bank intervention was timely and successful in introducing fundamental important reforms in privatization even when there was still debate on privatization of rural land in the country. This was in line with the Bank Country Assistance Strategy, to support of privatization and transition to a market economy. The Bank team mobilized resources, two PHRDs, two PPFs and an IDF grant to initiate the process, review experiences and test hypotheses until a system was agreed that was best fitted to Moldova's situation. The Bank supported the concept of a unified cadastre system - which is now considered best practice internationally, and provides efficient registration procedures for property owners, and allows for expansion of the system for multiple uses. Pilot testing during preparation helped develop practical methodologies for project implementation, and provided useful on the job training to PIO staff in all aspects of project implementation. 12 44. Project risks and their mitigation measures were identified in detail during preparation/appraisal. They included the institutional and regulatory framework for having a unified agency treating all types of properties in Moldova. This was mitigated prior to project implementation through requirement for essential laws to be passed prior to Board approval. The acceptance of the system by the population and the demand for information by other stakeholders were important risks. A public information program was included in the responsibilities of the agency as well as training for stakeholders. 45. Project preparation included coordination with other donors. In addition to mobilizing Japanese PHRD grants to provide essential funding for the Government to prepare the project, the preparation team sought other funding from interested donors, particularly Sweden, which continued throughout project preparation. Switzerland maintained a long term relationship in the early years and provided valuable equipment and training, which released resources for use in more surveying and registration activities. Norway provided funding during preparation for the public information program. The team remained in close contact with and cognizant of the operations of the USAID in rural areas throughout project preparation and implementation. 46. Preparation utilized lessons learned from other operations. The Moldova First Cadastre Project was prepared at a time when several other similar projects were prepared in the region (e.g. Romania, Kazakhstan, Armenia, Georgia, Russia and Ukraine). There was a lot of learning amongst these projects, though the design of the projects was not the same and took into consideration country circumstances and government desires. Reciprocal exchange study visits were conducted between Moldova and Georgia cadastre projects in mid-term implementation involving about 15 members for each trip. (b) Quality of Supervision Rating: Satisfactory 47. The Bank supervised the project closely with an average of two missions a year. Procurement specialist joined missions regularly, and at least one FM supervision mission was undertaken a year. In addition, the Bank mobilized specialized skills in surveying and cadastre development, training and legal framework and used them at critical stages of the project, and in mid-term for assessment purposes. Independent consultants from neighboring countries were brought in to assess progress on developments in the valuation and notary sectors, before deciding on canceling the proposed studies indicated in the project documents. 48. The Bank kept in close contact with other major stakeholders, including the Ministry of Finance and the Deputy Prime Minister, to whom the SALRC was reporting during implementation. The Bank team effectively used and cooperated with the management of the Bank's country office in Chisinau to avert unnecessary interferences that might have impacted the direction of the project. The Ministry of Finance support in these matters was extremely fruitful. The Bank continued to cooperate with major donors, including USAID and SIDA and helped mobilize funding from Norway. 49. A Quality of Supervision Assessment was undertaken in September 2004 and found Bank supervision performance to be satisfactory with elements of best practice. The task team's collaboration across sectoral boundaries with ECA Agriculture Group, which had a special interest in rural cadastral work in Moldova and experience in supervising rural cadastral work in other ECA countries, was assessed as a strong element of supervision process. Focus on Development Effectiveness was rated highly satisfactory to reflect the efforts of the task team to 13 shift longer term issues of governance and sustainability well in advance of project completion. Condor and Realism of Project Performance Ratings was also rated highly satisfactory, given the full and explicit discussion on issues and careful calibration of ratings. Supervision of Fiduciary/Safeguards Aspects and Adequacy of Supervision Inputs and Processes were rated satisfactory. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory 50. Bank played a key role in supporting the Government in the development and implementation of this project. The Bank mobilized resources for project preparation and development, and coordinated with other donors to mobilize training and technical assistance. The Bank supported the Government's efforts to mobilize additional donor funding and worked closely, particularly with SIDA to continue and expand its support. In addition, the Bank worked with USAID to increase registration in rural areas as the opportunity developed. 5.2 Borrower Performance (a) Government Performance Rating: Satisfactory 51. The Government remained committed to the project, and provided the counterpart funds necessary to ensure implementation. The Government monitored the project individually and within its mandate for monitoring the World Bank portfolio. The Ministries of Finance and Economy provided strong support and balanced independent views on project implementation and direction at critical junctures when strong decisions were needed to ensure continued progress of the project. (b) Implementing Agency or Agencies Performance Rating: Highly Satisfactory 52. The PIO remained part and parcel of the Agency for Land Relations and Cadastre, and was not an additional or separate entity. The PIO drew upon the professional staff of the SALRC to implement the project. A procurement specialist and additional accounting staff were recruited to satisfy Bank requirements. This proved very useful in utilizing and augmenting existing technical skills that remain with the SALRC. Despite turnover in the management of the SALRC and the PIO in the beginning of the project, there was little overall staff turnover and the managerial situation stabilized. The stable staffing ensured the continuous good implementation of the project. Staff received state of the art training in Moldova and Sweden and developed professional skills in IT, legal, geodesy, cartography, finance and property taxation that remain valuable and necessary for the workings of a real estate market. The knowledge of the PIO of the Moldovan environment, its adaptation to World Bank procedures and requirements, and its steadfastedness in resolving problems and improving the overall system is exemplary and deserves high praise. The final decision to appoint the deputy manager of the PIO as the acting manager for the project for the last 3-4 years of project implementation was a good example of the cooperation between the Bank and the Government to stop political infighting. The deputy manager was capable of maintaining PIO staff morale, keeping excellent contact with all donors and Government agencies, and mobilizing additional financing from the Bank and other donors. 14 (c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory 53. Overall support of the Government for the project was satisfactory. Counterpart funds were provided largely on time, at the same time, good oversight on expenditures and progress was kept. The Government intervened at critical junctures to make decisions to keep the project on track, such as in the appointment of PIO manager, as well as to stop attempts to change the independence of the SALRC from sectoral ministries. The performance of the SALRC and the PIO, their adaptation of Bank requirements, and their leadership in preparing the sustainability strategy and discussions with the Bank and the government are good examples of the satisfactory performance. 6. Lessons Learned 54. The project benefited from the Bank's experience in developing cadastre systems, but also from the knowledge of the counterpart of the situation in their country. Cadastre projects need a long period and sustained effort for their preparation and for the implementation results to become apparent. The Bank needs to be flexible and adaptable. The PIO's continued strong public information campaign sustained the interest of the population and the success of the registration program. 55. A unified cadastre system that is not tied to sector ministry eases the necessary coordination process and avoids specialized interests or a focus on a particular sector at the expense of other (e.g. urban vs. agricultural properties). While agricultural land constitutes the larger part in terms of absolute area or plot numbers, the value of the system and its future development potential is likely to be skewed towards urban real estate properties because of their higher market value, the potential for use in urban development and the fiscal cadastre system. 56. The modular approach to the development of the IT system was beneficial to the project. The development of the IT system was undertaken by the PIO staff themselves with international design support and advice at critical times, but the full development of the system was not contracted out. The contracting process for IT was found to be too expensive, complex and lengthy, with little fall back for the PIO to correct errors. The IT staff was resourceful, understood the needs of the system, and was appropriately trained on an on-going basis to be able to develop and upgrade the system. Skills and ownership were higher and retained at the PIO (while some turnover took place as those skills became very valuable in the market). 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies 57. The Bank received the Government's report on the completion of the project through the Ministry of Finance on August 8, 2007. The summary of the report is provided in Annex 7, and the full report available in the files. The completion report assesses all project objectives relevant and achieved. After closing of the project, the Government has put a strong emphasis on the future sustainability of the cadastre system. A Strategy for Sustainable Development of Cadastre has been developed with specific actions and timelines for its implementation. Support from donors (SIDA, Norway) has been secured to implement the strategy. 15 58. The completion report has identified possible internal and external risks related to the future development of the cadastre system. These relate to (i) dependency of the financial sustainability of the system on economic growth and land market development; (ii) continuous political support to undertake such initiatives as reducing transaction costs, simplifying procedures and increasing transparency of the register to the public; (iii) public trust related to ensuring security and reliability of the system; and (iv) continuous cooperation with external donors. 59. The final draft ICR was sent to the Government in November 2007, and a letter of acknowledgement and agreement with conclusion was received on December 17, 2007 and is attached to the Annex 7. (b) Cofinanciers 60. The Swedish Aid Agency SIDA remained engaged throughout project preparation and implementation. In 2004, prior to the Bank's provision of the additional financing, SIDA prepared a completion report of its activities within the project and in preparation for further support to SALRC. SIDA's completion report is available in the files, and a summary is presented in Annex 8. 61. The draft ICR was provided to SIDA on November 6, 2007. Comments were received by email on December 1, 2007 (available in project files). SIDA agreed with satisfactory rating of project outcomes - moreover, it views Moldova First Cadastre Project as one of the most successful among cadastre projects in Eastern Europe. Donor coordination was considered to be a large success factor contributing to the achievement of the project objectives. Design of the organizational structure, including establishment of a new unified cadastre; and opting for centralized organization, given the size of the country, was the most appropriate choice. 62. SIDA, however, indicated that progress in the private sector development in areas related to property surveying was below expectation or potential. Monopolistic behavior from the state companies still exists. Errors in surveying measurements that arose due to the speedy procedures (mainly in rural areas) remained a problem that needs to be addressed. (c) Other partners and stakeholders (e.g., NGOs/private sector/civil society) 63. Bank missions, with PIO staff consistently visited and consulted with private sector surveyors, orthophoto mapping companies, IT professionals, valuers, banks and real estate professionals to gauge their views of the project and its development. The PIO also solicited views of the system users, including banks, valuers and notaries to determine their needs. 16 Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent) Appraisal Estimate Actual/Latest Components Percentage of (USD millions)1 Estimate (USD millions) Appraisal MAPPING PROGRAM 6.20 4.48 72.26 URBAN CADASTRAL SERVICES PROGRAM 7.70 11.65 151.30 RURAL CADASTRAL SERVICES PROGRAM 3.30 5.45 165.15 INSTITUTION AND CAPACITY BUILDING 4.80 9.15 190.63 PROGRAM Total Baseline Cost 22.00 30.73 139.68 Physical Contingencies 1.50 0.00 0.00 Price Contingencies 1.10 0.00 0.00 Total Project Costs 24.60 30.73 124.92 Project Preparation Fund 1.702 1.253 73.53 Front-end fee IBRD 0.00 0.00 0.00 Total Financing Required 24.60 30.73 124.92 1Appraisal estimate does not include additional financing 2The PPF refinancing is included in the above component costs 3The PPF refinancing is included in the above component costs 17 (b) Financing Appraisal Actual/Latest Percentage Source of Funds Type of Estimate Cofinancing (USD millions) Estimate of 4 (USD millions) Appraisal SWEDEN, Govt. of Parallel financing 1.80 3.48 193.33 International Development Association (IDA) 15.90 17.95 112.895 NORWAY, Gov. of (except for Parallel Ministry of Foreign Affairs) financing 0.10 0.10 100.00 SWITZERLAND: OFF. OF FOR.ECON. AFF.& SWISS Parallel 2.80 2.80 100.00 AGEN.OF DEV. & CO financing JAPAN6 Parallel financing 1.10 N/A USAID Parallel financing 0.21 N/A Other Parallel financing 0.05 N/A MOLDOVA, Govt. of 3.96 5.07 128.03 Total Financing 24.56 30.76 125.24 4Appraisal estimate does not include additional financing 5IDA credit and additional financing was denominated is SDR which explains change in USD figures 6Japan, USAID and `Other' data as provided separately by the borrower 18 Annex 2. Outputs by Component The table below lists the outputs planned for each component and compares appraisal estimates with project achievements. Totals include foreign donor contributions. Component/Output Appraisal Estimate1 Actual ­ June 2007 Component I: Mapping Component Cost- total $6.9 M $4.48 M Credit $3.6 M $1.15 M Cover 50% of urban land 50% 56% Cover 20% of privatized rural land 20% 85 % Component II: Urban Cadastral Services Program Cost-total $8.60 M $11.65 M Credit $7.20 M $10.49 M TCOs refurbished strengthened 12 12 Urban Registrations 330,000 or 50% of urban 834 thous. parcels Installation of IT in TCOs Completed / Updated Component III. Rural Cadastral Services Cost-total $3.70 M $5.45 M Credit $2.80 M $4.43 M BCOs refurbished/strengthened 24 29 Titles registered 200,000 3,324,784 20% of privatized rural land Installation of IT in BCOs Continued / Updated Component IV: TA and Capacity Building Cost-total $5.4 M $9.15 M Credit $2.3 M $1.88 M No. of Trainees in: Project Implementation 15 IT 6 Geodesy 1 Valuation 1 Study abroad: Geodetic Engineers 1 Study abroad: Photogrammetrists 1 2 One year study abroad for university 1/ lecturers in Cadastre, Geodesy, Topography, Cartography, No. of Persons 26 Notary Law, and Property Valuation. 1Physical and price contingencies are included in component costs at appraisal stage 19 Project Costs Monitoring: Actual aggregate costs in the Project by November 19, 2007 Credit: 3061 MD Currency: US$ Actual aggregate costs in the Project by November Allocated as per Credit 19 , 2007 (1997-2007) Allocated as on June 1, Agreement nr.3061 dated 2004+G21 Item of Expenditure June 8, 1998 Credit nr. 3061-MB SDR US$ SDR US$ WB GRM Total 1 2 3 8 9 10 11 12 Civil Works 170,000 235,042 547,811 740,802 740,244.86 205,710.85 945,955.71 Goods 3,630,000 5,018,838 1,766,332 2,390,296 2,374,226.90 290,551.59 2,664,778.49 Technical Services 4,000,000 5,530,400 5,466,648 7,674,346 7,712,938.03 0.00 7,712,938.03 Consultants' services and training 450,000 622,170 231,836 326,043 271,941.67 0.00 271,941.67 Operational Costs 1,550,000 2,143,030 2,572,764 3,491,279 3,497,091.51 3,658,634.03 7,155,725.54 PPF P 2870/2871 1,350,000 1,866,610 914,609 1,252,279 1,252,279.00 141,651.54 1,393,930.54 Non-allocated 350,000 483,910 0 0 0.00 SA-A -26,326 0.00 Total 11,500,000 15,900,000 11,500,000 15,848,719 15,848,721.97 4,296,548.01 20,145,269.98 20 Project Costs Monitoring: Actual Aggregate Costs in the Project by November 19, 2007 Credit: 3061-1 MD Currency: US$ Allocated as per Actual Aggregate Project Costs by November 19, Agreement amending 2007 the Development Allocated as amended by Credit Agreement the WB on March 9, 2007 Item of Expenditure nr.3061-1 dated 7 July, 2005 SDR US$ SDR US$ WB GRM Total 1 2 3 4 5 6 7 8 1 Civil Works 0.00 2 Goods 67,000 100,500 424,000 642,080 612,713.54 612,713.54 3 Technical Services 1,933,000 2,899,500 1,576,000 2,386,600 1,627,234.45 1,627,234.45 4 Consultants' Services and Training 6,873.22 6,873.22 5 Operational Costs 769,933.74 769,933.74 6 PPF P 2870/2871 0.00 7 Non-allocated 0.00 8 SA-A 0.00 Total 2,000,000 3,000,000 2,000,000 3,028,680 2,239,947.99 776,806.96 3,016,754.95 21 Project Costs Monitoring: Actual Aggregate Project Costs by November 19, 2007 Credit: 3061 MD+3061-1 Currency: US$ Actual aggregate project costs by 19.1.07 (1997- Allocated initially: as per 2007) Allocated as per amendments to Credit Agreement nr.3061 credit 3061 and 3061-1 Item of Expenditure and 3061-1 SDR US$ SDR US$ WB GRM Total 1 2 3 4 5 6 8 9 10 1 Civil Works 170,000 235,042 547,811 740,802 740,244.86 205,710.85 945,955.71 2 Goods 3,697,000 5,029,338 2,190,332 3,032,376 2,986,940.44 290,551.59 3,277,492.03 3 Technical Services 5,933,000 8,429,900 7,042,648 10,060,946 9,340,172.48 0.00 9,340,172.48 4 Consultants' services and training 450,000 622,170 231,836 326,043 271,941.67 6,873.22 278,814.89 5 Operational costs 1,550,000 2,143,030 2,572,764 3,491,279 3,497,091.51 4,428,567.77 7,925,659.28 6 PPF P 2870/2871 1,350,000 1,866,610 914,609 1,252,279 1,252,279.00 141,651.54 1,393,930.54 7 Non-allocated 350,000 483,910 0.00 8 SA-A -26,326 0.00 Total 13,500,000 18,810,000 13,500,000 18,877,399 18,088,669.96 5,073,354.97 23,162,024.93 22 Detailed Project Cost (excluding donations) Credit 3061-MD / 3061-1 MD Currency: US$ Allocated as per Credit Agreement Actual aggregate project costs by June 30, 2007 (1997- November 19, 2007) nr.3061dated June 8, 1998 and Credit amending the Credit Agreement nr.3061-1 WB GRM Total Item of Expenditure MD Total WB 3061-MD 3061-1MD 3061-MD 3061-1MD 3061-MD 3061-1MD WB GRM Total 1 2 3 4 5 6 7 8 9 10 11 1 Civil Works 740,802 740,802 740,244.86 205,710.85 740,244.86 205,710.85 945,955.71 1.1 Office Rehabilitation 740,802 740,802 740,244.86 740,244.86 205,710.85 945,955.71 2 Goods 3,032,376 2,390,296 642,080 2,374,227 612,714 290,552 0 2,986,940 290,552 3,277,492.02 2.1 Computers and systems 2,114,376 1,472,296 642,080 1,458,077.88 612,713.54 122,734.25 2,070,791.42 122,734.25 2,193,525.67 2.2 Mapping Equipment 0 7,486.08 0.00 7,486.08 7,486.08 2.3 Training Equipment 177,000 177,000 176,548.73 46,311.62 176,548.73 46,311.62 222,860.35 2.4 Other office equipment 480,000 480,000 479,522.80 97,989.67 479,522.80 97,989.67 577,512.47 2.5 Cars 261,000 261,000 260,077.48 16,029.97 260,077.48 16,029.97 276,107.45 3 Technical services 10,060,946 7,674,346 2,386,600 7,712,938 1,627,234 0 0 9,340,172 0 9,340,172.48 3.1 Contracts for aerial photography 247,040 247,040 247,040.00 0.00 247,040.00 0.00 247,040.00 3.2 Contracts for cadastral surveys 9,813,906 7,427,306 2,386,600 7,465,898.03 1,627,234.45 0.00 9,093,132.48 0.00 9,093,132.48 4 Consultants' services and training 326,043 326,043 0 271,942 0 0 6,873 271,942 6,873 278,814.89 4.1 Contracts for consultant's services 150,000 150,000 124,234.65 376.20 124,234.65 376.20 124,610.85 4.2 Staff training 176,043 176,043 147,707.02 147,707.02 0.00 147,707.02 6,497.02 0.00 6,497.02 6,497.02 5 Operational costs 3,491,279 3,491,279 3,497,092 0 3,658,634 769,934 3,497,092 4,428,567.77 7,925,659.28 including 5.1 Mapping development costs 344,017 344,017 344,017.04 797,361.12 344,017.04 797,361.12 1,141,378.16 5.2 Registration and titling 1,961,491 1,961,491 1,961,490.98 1,461,707.07 430,303.51 1,961,490.98 1,892,010.58 3,853,501.56 5.3 PIO' operational costs 1,127,663 1,127,663 1,133,475.38 1,202,031.10 333,806.15 1,133,475.38 1,535,837.25 2,669,312.63 5.4 Staff training 26,373 26,373 26,372.94 29,936.21 26,372.94 29,936.21 56,309.15 5.5 Public information 11,768 11,768 11,768.29 28,912.86 11,768.29 28,912.86 40,681.15 5.6 Project audit 0 0.00 57,907.74 0.00 57,907.74 57,907.74 5.7 Exchange rate difference 3 3 2.65 28,002.82 41.09 2.65 28,043.91 28,046.56 5.8 Bank service charges 19,964 19,964 19,964.23 52,775.11 5,782.99 19,964.23 58,558.10 78,522.33 6 PPF P 2870/2871 1,138,368 1,138,368 1,138,367.51 141,651.54 1,138,367.51 141,651.54 1,280,019.05 7 Servicing PPF 113,912 113,912 113,911.49 0.00 113,911.49 0.00 113,911.49 8 Non-allocated (contingencies) 0 0.00 0.00 0.00 9 SA-A -26,326 -26,326 0.00 0.00 0.00 Total 18,877,399 15,848,719 3,028,680 15,848,721.96 2,239,947.99 4,296,548.01 776,806.96 18,088,669.95 5,073,354.97 23,162,024.92 23 Project Cost (1998-2007) Credit: 3061 -MD / 3061-1MD Currency: M USD Actual aggregate project costs by November 19, 2007 Total Cost estimated as GRM GRM Implementation Programs PPF WB WB Foreign per SAR* Total contribution Contribution P 2870/ 2871 (credit 3061) (Credit 3061-1) Donors (to cr. 3061) (to cr. 3061-1) Mapping Development Program 6.20 4.48 0.56 0.59 0.81 0.00 0.00 2.52 Urban Cadastre Services Program 9.54 11.65 0.43 7.95 1.11 2.11 0.00 0.05 Rural Cadastre Services Program 4.48 5.45 0.02 4.41 0.81 0.00 0.00 0.21 Institution and Capacity Building 4.80 9.14 0.24 1.64 1.56 0.00 0.78 4.93 Total Base Costs 25.02 30.73 1.25 14.59 4.29 2.11 0.78 7.71 Unforseen physical expenditures 1.50 Unforseen price expenditures 1.10 Total Project Costs 27.62 30.73 1.25 14.59 4.29 2.11 0.78 7.71 Note: Total Cost estimated as per PAD/SAR (Project Assessment Report) includes additional financing from the Credit amending the Development Credit Agreement nr.3061-MD 24 Annex 3. Economic and Financial Analysis 1. At appraisal, the project was expected to spur economic growth through (a) providing guarantee of ownership and security of tenure; (b) facilitating the functioning of real estate markets; (c) supporting privatization in the agricultural sector by providing mechanisms for facilitating the restructuring of Kolkhozes; and (d) supporting effective urban planning and private sector development. Such benefits were difficult to estimate then and remain difficult to quantify given the complexity of the development process that occurred in Moldova during implementation, and the many other factors that impact such benefits, which would make it difficult to isolate the impact of the project by itself. For the financial analysis, the Staff Appraisal Report projected costs and benefits for the life of the credit; i.e. 35 years, based on cost estimates at the time. Benefits are to emerge throughout the period. Incomes are from fees for registrations, provision of information and royalties from the sales of maps. The project's financial rate of return calculated based on appraisal estimates reached 8.5%, but given the public goods nature of the project, the economic rate of return is expected to be higher. 2. The SAR assumptions and projections were simulated using data and information provided by the PIO. According to this data, the majority of revenues to the project come from providing information to the private sector (commercial banks, valuers, real estate agents and notaries) for which the Cadastre Enterprise charged an average of 25 Leis. This revenue is additional and did not exist prior to or without the project. Revenues accrue to the project and to the Cadastre Enterprise as a result of streamlining of registration procedures and involving professional practitioners within the real estate market to give the system its legitimacy and security. These services did not exist in a centralized planning environment, where real estate was owned by the state, and a real estate market did not exist. Other revenues due to the project are revenues from selective registration. This service is largely additional to the project. Very few transactions took place under Moldova's centralized system. Private property was limited to rural dachas, while land was owned by the government. The analysis assumes 80% of the revenue are due to the institution of registration for private property. Project costs were projected based on revised costs under the project. Computer and other equipment were assumed to be replaced every fourth year. When using the SAR methodology using credit repayments over 35 years, the rate of return is high at 24% reflecting to a large extent the benefit of the long repayment period and the IDA financing. 3. At the time of the SAR, a fiscal cadastre was not envisioned (beyond a study). The Cadastre system assists to better identify real estate objects and their development (10-20% more identified according to the PIO). In addition, a value based fiscal cadastre has been adopted, which further increases the accuracy of market values of properties, thus increasing the potential for the public sector to recover the costs and continue to replace investments in the system. These additional benefits are not included in the analysis above, given weak data and the possible need for further investments, the costs of which are not known at this stage. Data provided by the PIO does not show a significant increase in the collection of property taxation by municipalities. Nevertheless, it is likely that future improvements in the fiscal cadastre will further strengthen the cost recovery and efficiency of the cadastre system as a whole. Benefits of the system will continue for the future, and any further estimates or attempts to quantify the impact remain speculative at best. The necessity of a real estate registration system in any market economy is indisputable, and the benefits that could derive from such a system remain to be further tapped in Moldova. 25 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Responsibility/ Specialty Lending Mats Andersson Sr. Urban Management Specialist EASUR Task Management Lynn Holstein Consultant ECSSD Cadastre Specialist Monika Weber-Fahr Manager CESSB Co-Team Leader Others Supervision/ICR Maha J. Armaly Sr. Urban Finance Spec. ECSSD Task Management Ellen Hamilton Sr. Urban Planner ECSSD Task Management Bogdan C. Constantinescu Sr. Financial Management Financial Specialist ECSPS Management Solvita Klapare Operations Analyst ECSSD Salim Benouniche Sr. Procurement Specialist ECSPS Procurement Sandu Ghidirim Operations Officer ECSSD Local Support Ahmet Gokce Sr. Procurement Specialist ECSPS Procurement Lynn C. Holstein Consultant ECSSD Cadastre Specialist Lawrence Hannah Lead Economist FEU Steven Butler Consultant Legal Issues Mihaly Kopaniy Sr. Infrastructure Specialist SASDU Fiscal Specialist Vladimir Eftimov Consultant Valuation, Surveying Wladyslaw J. Brzeski Consultant Delphine A. Hamilton Sr. Program Assistant ECSSD 26 (b) Staff Time and Cost1 Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands No. of staff weeks (including travel and consultant costs) Lending FY94 0.00 FY95 0.00 FY96 0.00 FY97 0.00 FY98 410.41 FY99 8.38 FY00 0.00 FY01 0.00 FY02 0.00 FY03 0.00 FY04 0.00 FY05 3 12.43 FY06 0.5 7.57 Total: 3.05 438.79 Supervision/ICR FY94 0.00 FY95 0.00 FY96 0.00 FY97 0.00 FY98 17.09 FY99 72.62 FY00 0.00 FY01 0.00 FY02 0.00 FY03 0.00 FY04 0.00 FY05 18 77.78 FY06 17 46.55 FY07 21 72.72 FY08 9 23.99 Total: 65 310.75 1Missing data not provided by SAP 27 Annex 5. Beneficiary Survey Results 1. This ICR does not require a Beneficiary Survey. A social impact assessment was carried out in mid-2003 to assess opinions of several stakeholders. A team of international and local social scientists carried out field research throughout Moldova, including discussions with 185 stakeholders and key informants. The work included an extensive literature review, qualitative interviews, a quantitative survey of some 600 respondents, and a series of focus groups. The study was undertaken during a difficult period of Moldova's development when the country had just started to experience positive growth, yet the impact of more than a decade of decline remained strong. The study noted difficult circumstances such as declining secondary cities, deteriorating housing stock, out-migration and human trafficking, corruption, agricultural fragmentation. The study warned against the continuation of such an environment on the long term development of the cadastre system, yet the direct impact and society's perception of the project remained positive. The international community, including the World Bank in the context of the country assistance strategy and work program, pay specific attention to these problems and provide Moldova with measures to mitigate and alleviate those macro social and economic risks. The economy of Moldova is now experiencing sustained positive growth which reached up to 7% in 2005-2006. Households as well as businesses are increasing their utilization of their real estate assets to improve their lives and contribute to economic growth. The impact and perceptions provided during the study during 2003 were as follows. 2. Impacts on Households: The direct impacts of the cadastre and registration system on households have been quite significant and overwhelmingly positive. These include: widespread mass registration of rural properties and apartments; ease and affordability of selective registrations; provision of security of tenure; enabling of inheritance; simplicity and cost- effectiveness of transactions; realization of profits/revenues from some properties (e.g., through sale and rental); and potential for using properties to leverage credit. The protection of their property rights may be one of the few firm and reliable benefits that have accrued to Moldovans, who are facing many risks and challenges as they try to cope with everyday life under difficult conditions. The registration system was also found to be relatively free of corruption, and no one reported any activities such as rent-seeking related to its use. 3. Impacts on Businesses: In terms of business development in general, some of the larger businesses are reportedly using their properties as collateral for loans to expand their operations, particularly in the cities of Chisinau and Balti, where land values are higher and markets are stronger. Limitations to overall land market activity, have served to limit growth in associated businesses as a result of a lack of demand. Real estate companies, for example, are few in number as only some 10% of the population uses such services. The study noted that reliance on family and networks for loans, property sales (as general corruption, which makes businesses difficult to start and succeed) play a large role in curtailing the growth of commerce. 4. Impacts on Municipal Land Use Planning Capabilities: On a technical level, the cadastre system has reportedly had a very positive impact on local land planning and management activities, providing much improved mapping and parcel ownership data. The study was conducted at the end of the long period of negative economic growth, particularly in secondary cities outside Chisinau and Balts. Social problems, including human trafficking, corruption and a deteriorating housing stock were difficult issues. While several of these issues were beyond the reach of the Project, the study highlighted the impact they could have on the sustainability of the 28 Project. The World Bank with other donors, were and continue to be engaged in such issues, including consolidation of agricultural land, anti-corruption, and counter trafficking efforts. 5. Overall, the results of the impact assessment process have indicated clearly that the impacts of the cadastre/registration system itself on the stakeholders have been very positive. The system is working effectively, in a technical sense. Most people have been, or will shortly be, registered as part of "mass" registration processes that involve no cost or time commitment to the individuals. Individuals and businesses who want to make transactions are using the system regularly and report very few concerns. The system is trusted, and is seen as providing security for property rights. 29 Annex 6. Stakeholder Workshop Report and Results Not applicable 30 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR The Bank received the government's report on the completion of the project through the Ministry of Finance on August 8, 2007. The full report is available in the files. The report is summarized below. Project Genesis 1. The Government of Moldova requested, in autumn 1995, World Bank assistance for the preparation of a project to address the fundamental lack of ownership information and security with respect to real estate in Moldova. Project preparation was carried out jointly with the National Agency for Geodesy, Cartography and Cadastre (now known as SALRC) and supported through a PHRD grant (US$681,500) made available to SALRC in spring 1996, and a Project Preparation Facility of $700,000. Other Government agencies, such as the Ministry of Agriculture and Food (MAF), Ministry of Privatization and Management of Public Assets, Bureau of Technical Inventory (BTI), Ministry of Finance, the Ministry of Justice, and several municipalities were consulted. In order to establish consensus among different Government and foreign financing agencies involved in the sector, a Memorandum of Understanding was drawn up and signed in 1996 by the Government, the Bank, and USAID. 2. As part of project preparation, SALRC initiated a pilot program in three test areas, involving mapping, surveying, and registration activities, as a basis for methodology development and project design. Project preparation initially focused on the establishment of an urban cadastre, due to unresolved institutional issues concerning rural land registration. However, a rural component was later integrated into project design due to the importance of real estate registration in rural areas during the ongoing farm privatization process. To ensure project quality at entry, a second Project Preparation Facility (PPF) (US$1 million) and a second PHRD grant (US$396,500) financed technical assistance for: (i) the establishment of a Project Implementation Office (PIO); (ii) civil works and equipment for Territorial Cadastre Offices; (iii) finalization of project arrangements for rural areas; (iv) assistance with the establishment of appropriate business procedures in SALRC and; and (v) related training for involved staff. 3. Extensive public information activities initiated by the SALRC, including regular radio and television broadcasts and printed media have contributed significantly to awareness-raising and public education about: (i) the importance of land reform and the implementation of the new registration system, (ii) the role of individuals and public authorities within the system, (iii) property-related rights and obligations. A special newsletter has been published with recommendations and advice provided by PIO staff, representatives of SALRC, TCOs, Ministry of Justice, commercial banks, notaries, real estate brokers, etc. Achievement of Objectives and Outputs 4. The objective of securing property rights was fully achieved. A unified system for registration of real estate and ownership rights has been established and operates through a Specialized Cadastre Enterprise with 38 branches (territorial cadastre offices) across the country (except for regions located on the left bank of the Nistru River). Each territorial cadastre office (TCO) provides registration services within its coverage area defined by the State Agency for 31 Land Relations and Cadastre (SALRC)** (covering, on average, 300 - 600 sq. km) and keeps the property register comprising information about the real estate (parcel, constructions, separate premises), ownership and other real rights. 5. The real estate registration system is based on and supported by appropriate legislation comprising the Civil Code passed in 2002 and the Law on Real Estate Cadastre adopted in 1998. The Government passed all normative acts supporting the Law on Real Estate Cadastre thereby ensuring efficient operation of the system. The registration system supported by appropriate legislation (Civil Code adopted in 2002, Law on Real Estate Cadastre passed in 1998, Law on Pledges adopted in 2001, Law on Normative Price and Procedure for Sale and Purchase of Land adopted in 1997, Law on Real Estate Formation of 2004, etc.) provides full security for the registered rights. a) a property right is considered valid upon its registration; b) a property right is lost upon its removal from the Real Estate Register. Once registered, the property right may be deleted from the Register only with the consent of the property owner or by an irrevocable court decision; c) records in the Real Estate Register are considered valid and complete until proven otherwise (evidence to the contrary has to be confirmed by a court decision); d) the Registrar alone may decide on the registration and he/she is an independent person subject to the law; etc. 6. Conveyance procedures are simple and relatively short. When the real estate is already registered, the conveyance procedure is carried out in three steps, taking up to 11 ­ 20 days in total and including: i) issuance of extract from the register (3 days); ii) certification at the notary of property conveyance deed (1 day); iii) registration of ownership in the newly acquired real estate (up to 7 days). The registration period, however, may also be extended up to 20 days. 7. Tariffs for the registration of property rights are exempted of Value Added Tax (VAT) while the total cost per transaction is approximately 3,6 % of the property value ­ a good indicator by international standards. Total cost per transaction in the EU' countries is, on average, 5-10% of the property value. However, when we compare the ratio "total transaction cost / average monthly salary" the picture will be different: in the EU this ratio is 4-5 and in Moldova 7- 8, i.e. twice as high. 8. Moldova put in place an innovative system for accelerated registration procedures including: i) the application of a tariff adjustment factor of 0.25 for registrations taking more than 7 days; and ii) the application of tariff adjustment factors for urgent services (factor of 5 for services provided within 1 day and 3 ­ within 3 days (for TCO Chisinau and Balti)). 9. Of particular relevance are issues related to: i) number of steps a buyer /seller has to take during a transaction (5-7 steps under selective registration); (ii) conveyance period; iii) parallel maintenance of paper-based and computer-based registers; iv) quality of cadastre data; and v) total cost of conveyance. The Agency has undertaken specific steps to address these issues and, in particular: **The State Agency for Land Relations and Cadastre is the successor organization for the National Agency for Geodesy, Cartography and Cadastre. 32 i. The Parliament approved amendments to the legislation stipulating a decrease of notary fees from 1% to 0.1% of the property value recorded in cadastre. ii. The Government initiated changes to the Tax Code, stipulating the cancellation of taxes on income obtained from property conveyance. Following these changes, the total cost per transaction will drop to 0.8% of the property value. iii. The Government approved an Action Plan to finalize the development of cadastre in 2008-2010. This plan provides for the (a) completion of cadastral surveys and registration of all properties in the country; (b) improving the quality of the register, (c) correction of errors in land arrangement projects. iv. Amendments are being introduced in the laws simplifying registration procedures and raising the security of transactions. 10. During 1999-2007, the Project has registered about 85% of all properties in the country (5.5 million) or 4.7 million real properties, including 4.2 million through the mass procedure and 0.5 million through the selective procedure. Actual indicators are almost eight times greater than those envisaged by SAR. 11. Privatization of agricultural lands was completed successfully with the implementation of the National "Land" Program during 1998 ­ 2000, including the issuance by private and public entities of almost 2.8 million ownership titles. Records on all agricultural plots shall be kept in cadastre. Simple procedures for mass registration of agricultural lands were developed under the Project and USAID program, allowing for the registration within a relatively short period of time (1999 ­ 2001) of over 2,8 million titles. USAID-funded program came in with financial assistance for the registration of such agricultural plots, thereby saving the public budget about 18 million MDL. The First Cadastre Project also strongly boosted the privatization of household plots and gardens. During 1998-2007, cadastral surveys were performed in about 900 communities (in total there are 1550 communities) and approximately 1.1 million titles for such properties were issued. Table1: Mass Registration of Real Estate (`000 properties) Indicator Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 Total No of urban plan 5 47 78 98 102 - - 330 registrations real 11 31 94 130 186 139 93 60 90 834 No of rural plan 5 15 30 65 85 - - 200 registrations real 195 1 775 619 201 151 127 158 34 120 3380 plan 10 62 108 163 187 - 530 Total real 206 1 806 713 331 337 266 251 94 210 4214 % 2060% 2913% 660% 203% 180% 12. The real estate market continues to expand each year ­ a positive trend shown in table 2 which suggests a growing number of registered transactions (increase of 8 times), leases (40 times increase). Table 2: Real Estate Transactions Registered (`000) Indicator Year 1999 2000 2001 2002 2003 2004 2005 2006 Nr. property 23.6 53.3 104.8 123.9 166.6 177.4 191.1 201.6 transactions 33 13. The market for real estate is witnessing high growth rate both in rural and urban areas while the market for residential properties has been booming. Almost 50% of all transactions with urban properties are in the capital (Chisinau) and such geographical distribution of the property market is typical for other countries in Central and Eastern Europe. 14. The market for agricultural parcels has been very active. The completion of privatization and consolidation of agricultural lands through sale and lease transactions have played a key part in growth. There has been a 600% growth of the market for agricultural land plots with an even geographical distribution across the country. 15. The objective of providing commercial banks with the confidence necessary to give secured credit against real estate was achieved. An appropriate legal framework has been prepared for the registration of mortgages and records on mortgages are now included in the real estate register. The registration system thus provides commercial banks with the confidence to provide secured credits against real properties. Such efficient legislation (Collateral Law passed in 1996 was replaced by Law on Pledges of 2001) allows for quick and secure foreclosure procedures available to commercial banks in case of unpaid loans. The registration system stipulates the conveyance of property rights to commercial banks, third parties, the state, etc. when obligations secured by real estate are not fulfilled. The number of mortgages registered has increased 9 times. Table 3: Registration of mortgages Indicator Year 1999 2000 2001 2002 2003 2004 2005 2006 Nr. of registered thou 0.1 1.1 3.6 8.6 15.9 mortgages (000) / Estimated % 1.0 1.5 2.0 2.5 3.0 % of those planned Actual thou 1.2 3.6 7.3 10.7 10.8 10.2 14.4 14.6 for registration % 11.7 5.0 4.1 3.2 2.1 16. The objective of providing the real estate market with information on ownership and location of property as needed for the market to function effectively has also been achieved. Information from cadastre is open to the public and any willing person, upon the payment of the relevant fee, may obtain information about real estate within 1 or 3 days. 17. Since information from cadastre is provided at a reasonable cost, the number of applications has been steadily growing (10 times increase in applications from clients who pay). Cadastre offices also receive each year 35-40,000 requests for information from public authorities, courts, law enforcement bodies, etc. The legislation also mandates TCOs/BCOs to provide on a quarterly basis, free information to local public authorities and tax bodies about changes in land ownership and leases for agricultural plots. Annual costs incurred by the TCO/BCO for providing free information to public authorities are estimated at 500,000 MDL. The number of requests for information is expected to increase significantly after the establishment of the central database and development of the information system of cadastre. 34 Table 4: Number of applications for cadastre information Indicator Year 1999 2000 2001 2002 2003 2004 2005 2006 Nr. of inquiries Estimated thou 0.2 2.8 10.8 27.4 53.0 to TCO (,000) / % 2 4 6 8 10 % of properties Actual thou 25.0 61.5 120.1 147.9 196.8 203.0 223.7 228.9 planned for registration) % 250 85 67 43 37 18. Information from cadastre (graphical and descriptive) is delivered free of charge to local public authorities who use these materials for: (i) mapping out the properties owned by the state and administrative &territorial entities; (ii) urban planning, rural development (Consolidation of agricultural lands, settlement of land disputes, etc). Central public authorities (Ministry of the Environment, Agency for Constructions and Territorial Development, Ministry of Transport) are showing greater interest in graphical information aiding them in the development of specialized cadastres. Cadastral plans may also be used in the future for creating a national GIS system. Table 5: Cadastral plans produced Indicator Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 Cadastre plans Planned 0.03 0.2 0.6 1.2 1.8 produced Actual 0.07 0.7 12.3 12.9 13.4 13.7 14.0 14.1 14.2 ('000 sq. km) 19. The objective of providing central and local public authorities with a basis for revenue generating mechanisms through property taxation was also achieved. The Project has developed the necessary legislation and implementation regulations for the new property valuation system based on market values. The key pieces of legislation are the Tax Code (Title VI "Real estate tax" (2000) and Law on Valuation Activity (2002). The Government of Moldova approved a package of measures aimed at implementing the new system of property valuation for taxation designed to implement the valuation of all property categories during 2004-2011. The Swedish consultant "Swedesurvey" assisted in the development of a methodology for mass appraisal of residential properties, single-family houses and vacant lands. The system has been automated to ensure the smooth operation of appraisal activities and to create a database comprising technical descriptions of properties. The valuation system under the Project is based on modern information technologies and is included in the information system of cadastre providing clients with electronic data. In 2004, all residential properties (about 350 000) and separate premises were valuated through the mass procedure for taxation purposes. In 2005, all single-family residential houses in urban areas were appraised en masse. The development of the mass valuation methodology was accompanied by market monitoring and analysis and information has been collected on sale prices for real estate. SIDA is expected to continue with technical assistance for mass valuation methodology for commercial properties and a Laws have been amended and starting with 2007 costs for delivering cadastre information to local governments shall be covered from the budgets of these authorities whereas access to the cadastre database shall remain free 35 methodology for re-appraisal of real estate. The Project has put particular emphasis on professional training of TCO personnel in mass valuation for taxation. 20. An important project objective was to promote private sector development in areas related to property registration (cadastral surveys, property appraisal, notaries). Cadastral surveys are no longer a state monopoly. The National "Land" Program and the WB-supported Project represented a strong stimulus for the development of a vibrant sector for cadastral surveys. Great technological progress was achieved in a relatively short period of time. Geodetic reference data are not secret any longer while surveyors are certified by the Agency as stipulated by the legislation. Private surveyors compete with the TCOs for services provided under selective registration. Surveying services are currently provided by 35 ­ 40 private firms. 21. The Agricultural and Technical Universities of Moldova provide education in geodesy and cadastre while continuous training is offered by the Project Implementation Office (PIO). The Agency certifies the qualifications of cadastre engineers. A certification committee may withdraw the certificate in cases of professional misconduct. Surveyors have their own professional association ­ The Employers' Association of Cadastre, Geodesy and Soil Protection. 22. Private notaries have been active on the real estate market of Moldova since 1998. The new version of the Notary Law passed in February 2003 provides for the operation of public notaries alongside the private sector. In addition to the operation of private and public notaries, some notary functions may be performed by local authorities as defined in the law. This is to encourage competition among notaries in the rural areas. Notaries are certified by the Ministry of Justice (MJ) which regulates the number of private and public notaries (currently there are about 250 notaries). All private notaries are members of any of the two professional associations. 23. The valuation activity in Moldova is subject to licensing. The Cadastre Agency has established a Board to certify the qualifications of valuation experts. This Board may withdraw the certificate if the valuation specialist violates the rules of professional conduct. These qualification certificates serve as basis for the issuance of licenses to valuation firms. Such licenses are issued by a special body. The Technical University of Moldova educates sufficient well-qualified specialists in property valuation. Professional training courses in valuation are organized by various training centers. There are two professional associations of valuers, which operate in Moldova since 1990. The time periods for appraisals and the quality of valuation reports can be improved by providing better access to the database of cadastre. 24. The Project did not have specific objectives as related to poverty reduction, gender equality or social issues. The establishment of a secure documentation system for property rights provides women and other social categories of the population with important legal protection for the real estate they own. The Moldovan legislation, including cadastre regulations, guarantees equal rights for all citizens without regard to their gender. Property acquired in marriage belongs to both spouses and it does not matter that the title contains the name of one of the spouse or both of them. However, property donated to or inherited by one of the spouses is exempt from the above legal provision and such property shall belong only to the spouse who inherited or received it as a donation. The legislation requires that property acquired in marriage be recorded in the Register in the name of both spouses even though the title contains the name of only one of them, subject to the above exceptions (donation, inheritance, marriage contract). 36 Achievements by Project component 25. Mapping development program: Four aerial photography campaigns were performed during 1998-2001 for 173 localities covering an area of 1 494 sq. km. INGEOCAD produced orthophoto for 655 sq. km and contour maps for 450 sq. km. Cadastral surveys and production of cadastral plans were implemented by private firms. It is a very notable project achievement that a highly competitive and professionally competent private surveying industry was so successfully promoted. Table 6: Surveying & mapping activities supporting the project Activities Unit Total 1. Geodesy & mapping 1.1 Geodetic network Points 6 127 1.2 Densification of network Localities 900 1.3 Aerial photography sq. km 1 494 1.5 Mapping sq. km 1 128 2. Production of cadastral plans sq. km 14151 2.1 Updating of maps sq. km 154 2.2 Photogrammetry sq. km 250 2.3 Classic surveying sq. km 1652 2.4 Land planning projects sq. km 12 070 2.5 Planning for perennials sq. km 25 26. Urban/Rural cadastral surveys program: The Project successfully developed the institutional framework for the system of property registration in urban and rural area. The establishment of cadastral offices was originally planned in stages over a period of 4 years (1999 ­ 2003). But actually all 12 TCOs and 28 BCOs were created by the end of 1998 as self-sufficient state enterprises reorganized on the basis of former BTIs and with a well defined service area. The Central Bureau of Technical Inventory and Cadastre Databank were merged to create the Central Information Office "Cadastre". All TCOs /BCOs have been rehabilitated and received vehicles, geodesy equipment and computers. TCO staff is well trained and the clients are satisfied with the quality of services. Most applications for registration are processed within 7 days as compared with 20 days stipulated by the legislation. Registration services may be provided within 1 day upon the request of the client. 27. Local specialists with the assistance of international consultants in 1998 have developed software (LegalCad) for the processing of descriptive data. Two versions of this software were developed: DataBase Server ­ which was installed in 12 TCOs and WorkStation ­ installed in 28 BCOs. Copies of all databases (39) are delivered monthly to the CIO for storage and data processing. The clients are not satisfied with the frequency of data updating in the central database. At the end of 2003 a study was carried out concerning the establishment of a unified information system of cadastre. 37 28. Capacity building and staff training: (a) Training was implemented throughout project implementation with some notable achievements: i) Prior to the implementation of the new registration system PIO organized initial training for staff employed with TCO / BCO as well as notaries, regional privatization agencies, surveyors with a focus on legislation, registration procedures, compilation of records for registration, etc. Together with the Institute for Management and Advanced Training in Agribusiness training courses were organized in 1998 for surveyors of rural and urban area with a total of 18 courses and participation of 660 specialists. ii) Training in project implementation was organized at PIO and SALRC with a total of 15 courses for 2,300 specialists: managers, registrars, surveyors, operators, accountants, etc.) and with a focus on cadastre legislation, procedures for mass and selective registration, production of cadastral plans, real estate formation, making records in the register, correction of errors, settlement of land disputes, automated registration system. Training was also provided to private firms, which implement cadastral surveys with a focus on production of digital cadastral plans, performance of field works, use of new technologies, collection of legal data about property owners. iii) IT training included courses for PIO staff in various training centers abroad: FORS in Moscow and St. Petersburg (Russia) with a focus on: "ORACLE DBA Fundamentals I" and "ORACLE DBA Fundamentals II", CISCO "CIT" and "CVOICE, Database Advanced Replication, Java Programming, Technologies for Java Programmers, Develop Web Services. iv) Crash courses in property valuation were organized for valuation specialists employed with TCOs with a total of 13 courses and 295 trainees. Valuers active in the private and public sector were trained by foreign teachers from UK and Sweden. This had a positive impact on private sector development and establishment of a public association of valuation specialists. PIO organized regional workshops in valuation (mass valuation for taxation; market valuation of properties). v) One-year trainings abroad. Study visits are a key element of the training component and the Royal Institute of Technology of Sweden has offered such opportunities with financial assistance from SIDA. vi) (a) Equipment for training in project implementation included computers for a training laboratory at the SALRC. Similar computer laboratories were established at the Technical and Agricultural Universities of Moldova where geodetic equipment was also installed. (b) Technical Assistance covered 13 areas such as: (i) project implementation; (ii) information systems; (iii) procurement; (iv) accounting; (v) legal development; (vi) training; (vii) property valuation; (viii) public information; (ix) mapping /photogrammetry); (x) digital mapping; (xi) land registration; (xii) cadastral surveys; (xiii) GPS. Since 1997, the Swedish International Development Agency (SIDA) has been providing financial assistance for 11 program components; Norway has supported public information while Switzerland stepped in to support mapping and delivery of geodetic equipment. 38 (c) Project Implementation Office (PIO) was established in 1998 and comprises of approximately 30 staff members experienced in areas necessary for successful project implementation: i) legal development; ii) information technologies; iii) procurements; iv) property valuation; v) cadastre and registration; vi) economics and accounting; vii) public information; viii) training; ix) administrative staff. The Agency has exercised general oversight while PIO managed the operational, financial and procurement activities of the project. Credit funds were disbursed and used in full conformity with the guidelines and IDA procedures and project records were maintained properly and audited. Project implementation was monitored and assessed. Key information about major performance indicators concerning the number of transactions on the market, prices for properties and market trends is regularly collected and published by the Agency in a specialized newsletter "Cadastre", which is distributed to central and local public authorities, educational institutions and libraries, notaries, commercial banks and other agencies. There is regular monitoring and assessment and reports are presented on a quarterly basis to public authorities and the World Bank. 29. Impact on institutional development: The project has successfully established an efficient and reliable cadastre and title registration system for immovable properties, a modern map production capability, and a highly competitive and professionally operating private sector in registration related areas. The Project has become an appropriate tool for effective land administration. Surveying and mapping activities have facilitated rural and urban planning and will therefore spur economic development. 30. This institutional framework eliminates the need for title insurance, and the associated costs for property owners. Some issues, however, had a negative impact on project implementation: - Frequent reshuffling of personnel, particularly at the initial phase of project implementation and in 2002; - Tendering procedures for cadastral works in 2000 were delayed by up to 6 months; - Procurement of computer equipment in 2000 was delayed and this has affected staff training, and the capacity of TCO to check digital maps produced by private firms; - The production of the cartographic base was delayed by INGEOCAD and, therefore, private firms had to change the technology of works agreed upon during the pilot project and shift to ground surveying. 31. Next steps for the development of the national registration system. Moldova has made accession to the EU as its main strategic objective. However, a key requirement for joining is for the aspiring nation to have a market economy and the rule of law. Property registration and cadastre system represents an important element of the market economy, providing security of tenure and contributing to economic growth. The Agency has developed a Strategy for Sustainable Development of Cadastre aimed at assuring an efficient operation of the whole system after the completion of the First Cadastre Project. The Strategy includes the following activities: · Complete privatization and registration of household plots as needed to develop the property market; · Complete evaluation of all properties and implementation of re-valuation for taxation purposes; 39 · Institutional strengthening of cadastre and assuring financial and institutional sustainability; · Development of an integrated information system and improved public access to cadastre information; · Improved access for public authorities to cadastre information; · Improved quality, trust and reliability of cadastre as needed to facilitate transactions · Public information and developing human capacities. 32. Lessons Learned (a) The team of local experts should be involved in project preparation. This team should get proper training. An exit strategy and aspects of sustainability after Project completion need to be considered from the outset. (b) The Project benefited from being implemented by a single agency associated with good coordination efforts. Missions' recommendations were implemented without the need to balance the conflicting interests of different agencies. Strong and committed leadership is an essential precondition for successful project implementation. (c) Learning from similar projects in other countries is essential for improvements at home. (d) Problems and deficiencies can be effectively addressed if they are correctly identified and documented and the Bank provides recommendations. (e) It's important for TCO services to be user-friendly and the system efficient, offering high legal protection and accepted by the society. (f) A systematic cadastre is necessary for an effective and equitable property tax administration. After completion of mass registration, systematic monitoring of real estate will update the database following the identification of new unregistered properties and their inclusion in the tax base. 40 41 Annex 8. Comments of Co-financiers and Other Partners/Stakeholders 1. The Swedish Aid Agency (SIDA) remained engaged throughout project preparation and implementation. In 2004, prior to the Bank's provision of the additional financing, SIDA prepared a completion report on its activities within the project and in preparation for further support to SALRC. SIDA's completion report is available in the files, and a summary is presented below. 2. SIDA supported a technical assistance to Moldova First Cadastre Project (FCP) since its beginning in 1997. The first stage of this assistance was successfully completed in 2001. SIDA decided in November 2001to extend its technical assistance through the project "Moldova: First Cadastre Project - Fiscal Cadastre and Training". Most of the planned project activities were completed. 3. The main goal of the Swedish support has been to assist the State Agency for Land Registration and Cadastre (SALRC) in the implementation of the First Cadastral Project. The first stage of SIDA's support was successfully finalized in 2001. Following the first phase, the Swedish support was extended till December 2003. In March 2004, another prolongation of the Swedish support was made until August 31, 2005. The main objectives of the continued technical assistance were: to support the development of a real estate registration that will supply information on ownership and values of real property to the taxation authorities; to develop and carry out advanced courses for a wider spectrum of stakeholders and; to develop the business plan for the State Agency for Land Resources and Cadastre, SALRC, and the TCOs in order to support the sustainability of the unified cadastral system established in Moldova. In summary almost all planned project activities were carried out professionally and according to plan and have met with the intended objectives and results. 4. The consulting companies carrying out the project since 1997 have been Swedesurvey AB and HIFAB International AB, cooperating closely with the Moldovan counterparts at the State Agency for Land Resources and Cadastre, SALRC. 5. A number of activities have been planned and properly implemented during Project implementation. The results and achievements of the Project were presented in an International Seminar held in Chisinau at the end of September 2004. The Project has contributed substantially to the implementation of the World Bank financed First Cadastral Project and to an overall success of the unified cadastral system in Moldova. 6. The project activities were organised on a basis of short-term visits of consultants, which provided assistance and technical support to the Moldovan experts. SIDA consultants supported the preparation of guidelines, recommendations, training courses and seminars etc. Cost efficiency could have been enhanced if consultant visits were longer. This was also indicated by the client with less and more consolidated reports. 42 7. The project implementation has established a good basis for further development of the Fiscal Cadastre: recommendations and methodologies for different types of properties valuation are drafted and discussed; proposals for data structure and exchange of information are developed; pilot-projects to test different methods of data collection are implemented; different methods of data collection for property valuation were also tested in different pilot projects. 8. The training component directly contributed to human capacity building and increased professional level in the cadastral organisations. The project has supported many international seminars in Moldova, study visits of Moldovan experts to other countries, training courses etc. Modern training facilities are also established with the support of the project at the premises of State Agency for Land Resources and Cadastre, SALRC. Implemented activities give a new vision and facilitate the development of a strategy for the cadastral sector. The long-term training program Master of Science in Land Management for Moldovan students and experts is successful and its continuation is also recommended. 9. The general conclusion of the project evaluation mission is highly positive both regarding the project itself as well general development in the cadastral sector in Moldova. Despite highly positive achievements of the establishment of a unified cadastral system, especially in comparison with other countries of the region, Moldova faces a lot of challenges in the land management sector. These challenges are related to the fact that only the first steps are made in the creation of a completely new institution, lack of professionals in this area, proper experience, traditions and culture in the land management sector and the severe economic situation in the country. One of the most critical challenges to address is the sustainability of the development of the unified cadastral system as the important element to establish land tenure security in the country. For this reason Moldova needs the extension of support and assistance in the land management sector. 10. The project supported the preparation of a strategy for the cadastral sector and development of a Business Plan for Legal Cadastre in Moldova. The developed Business Plan is a comprehensive document and the measures proposed are directed to convert the cadastral system into a self-financing organisation. 43 Annex 9. List of Supporting Documents Staff Appraisal Report: Republic of Moldova ­ First Cadastre Project (March 24, 1998) Development Credit Agreement Project Paper: Proposed Additional Financing of SDR 2.0 Million to the Republic of Moldova for the First Cadastre Project (May 23, 2005) Quarterly Project Reports Supervision Reports, Aide Memoires and ISRs Quality of Supervision Assessment Report (QSA6) (October 18, 2004) Impact Assessment: Property Rights Reform in Moldova. Blackstone Corporation. Resource Management Consultants. November 15, 2003. Fiscal Cadastre and Training Technical Assistance: Project Evaluation Report and Recommendations for further Support. Prepared for SIDA by UConsult Sweden AB. June 29, 2005. (SIDA completion/assessment report) SIDA representative comments on draft ICR (December 1, 2007) Government Completion Report (July 2007), received August 2007 44 Annex 10. Project Indicators at A Glance Item Unit 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Total Pilot, PPC cumulative Real Real Real Real Real Real Real Real Real Real Real Legal framework approved 11 5 3 5 2 4 3 1 34 drafts 2 7 9 4 1 10 5 3 1 42 TCO and BCO opened number - 38 1 39 Rehabilitated offices number 2 12 19 4 1 1 39 Computerized offices - TCO number 5 7 12 BCO number 8 19 27 Training seminars 3 6 6 2 2 2 21 Cadastre Agency courses 18 36 34 21 6 15 3 7 3 2 145 trainees 660 421 598 682 94 350 97 362 214 20 3,498 Private Sector courses 5 6 6 1 2 20 trainees 78 158 47 40 37 360 Procurement total contracts, including number 16 50 184 35 25 7 34 54 6 411 cadastral surveys number 28 46 15 8 4 13 31 5 2 152 additional agreements to contracts number 24 120 3 147 First time registration number 267,412 1,869,024 785,776 390,085 396,937 318,032 308,632 133,610 51,754 4,521,262 Mass parcels 206,425 1,806,526 712,721 330,884 337,596 264,397 251,345 93,749 34,752 4,038,395 Intravilan parcels 4,813 27,831 93,653 107,594 92,394 106,753 70,168 60,215 16,440 579,861 including Chisinau parcels 1,000 807 9,351 6,350 4,256 6,389 12,478 770 41,401 social & cultural properties number 206 529 104 839 other parcels number 7,438 4,365 11,803 apartments number 6,794 2,852 55 21,656 93,792 24,516 18,310 167,975 gardens parcels 116 6667 37056 51,380 77,203 117,111 96,055 33,534 18,312 437,434 "Land" Project parcels 194,702 1,769,176 581,957 150,048 73,678 8,579 62,343 2,840,483 Correction of errors parcels 23,277 1,452 24,729 Selective parcels 60,987 62,498 73,055 59,201 59,341 53,635 57,287 39,861 17,002 482,867 Intravilan number 16,138 20,634 23,687 23,693 20,828 23,642 26,477 18,683 7,304 181,086 of which Chisinau number 594 2,192 4,921 6,767 5,726 3,250 10,235 6,488 2,369 42,542 Separate premises number 38,221 19,627 29,831 24,585 24,115 13,988 15,920 8,916 3,649 178,852 Extravilan( art.12, gardens, ect) number 6,628 22,237 19,537 10,923 14,398 16,005 14,890 12,262 6,049 122,929 Transactions total 23,649 53,266 104,784 123,859 166,561 177,389 191,122 201,584 61,077 1,103,291 sale number 17,907 33,363 55,240 58,679 82,927 81,670 89,495 91,221 26,121 536,623 Donation, exchange number 2,325 8,027 18,610 22,141 26,888 29,591 31,204 33,038 9,852 181,676 Inheritance number 3,347 11,260 29,838 41,422 54,677 63,131 65,629 67,345 19,751 356,400 Other number 70 616 1,096 1,617 2,069 2,997 4,794 9,980 5,353 28,592 Encumbrances total 1,457 8,241 16,019 24,041 30,327 25,646 42,651 26,336 7,537 182,255 Mortgage number 1,168 3,574 7,346 10,685 10,837 10,192 14,357 14,649 4,262 77,070 Lease number 289 4,667 8,673 13,356 19,490 15,454 28,294 11,687 3,275 105,185 Mapping and geodesy - Geodetic network points 78 402 500 693 2918 1536 6,127 Densification settlements 4 150 110 72 110 127 573 Aerial photography sq. km 56 271 821 346 1,494 Contour maps sq. km 142 196 106 29 473 Orthophoto maps sq. km 655 655 Cadastral maps, total sq. km 6 65 660 11600 623 420 337 300 40 10 14,061 Updated sq. km 4 10 40 80 20 154 photogrammetry sq. km 20 80 100 50 250 Cadastral surveying sq. km 2 5 50 240 303 300 322 300 40 10 1,572 land arrangement projects sq. km 50 550 11200 200 70 12,070 Horticultural projects sq. km 15 15 Valuation - laws and regulations drafts 4 2 3 4 1 14 approved 1 3 4 training courses 4 1 2 4 2 13 trainees 70 40 30 60 95 108 403 Pilot projects settlements 2 3 2 2 2 2 13 Funding - Total TCO' revenues, '000 lei 9755 17241 19546 17329 28345 39960 44151.6 56009 232,337 Total funding (USD): 2734694.5 4972778.3 3562698.52 2895508.79 3023903.4 3738558 4078180.9 2703170.18 1324519.4 228456.12 29,262,468 WB (cr.3061-MD) 1322554.9 1624225.7 2275464.48 1748954.67 1635526.7 2479744 3130107.2 1630596.91 1546.22 15,848,721 WB (cr.3061- 1MD) 40987.16 632008.5 148066 821,062 GRM 141651.53 322546.6 333805.13 602277.98 649230.88 819429 644494.76 783111.15 514701.07 80329 4,891,577 Donations total, including 1270488.1 3026006 953428.91 544276.14 739145.8 439384.6 303578.9 248474.96 176263.62 7,701,047 Switzerland 1063147.4 1254957.9 356557.75 125262 2,799,925 Sweden 207340.68 619538.44 491784.83 340933.71 698280.86 429572 299210.74 234757.02 158203.67 3,479,622 France 22129.83 22,130 Norway 49081 49,081 Japan 1078300 1,078,300 TACIS 1998.8 1001.24 3,000 USAID/Booz ALLEN 103499.71 103,500 USAID/PFAP 69445.13 32463.86 1605.7 103,515 USAID/LPSP 9240.36 18044.3 27,285 other sources (tender) 585.38 8635.3 8401.08 9812.59 4368.16 2871.88 15.65 61.12 34,751 interest earned 1215.91 1,216 Technical assistance - Sweden weeks 50 152 80 60 58 50 48 24 12.8 535 Switzerland weeks 9 8 8 1 26 45 IBRD 35771 27°E 28°E 29°E 30°E Dnestr To Vinnytsya UKRAINE To Chernivtsi Moghiliov-Moghiliov- To Vinnytsya OcnitaOcnita Podolski Podolski BriceniBriceni MOLDOVA B Donduseni Donduseni To Chernivtsi e EdinetEdinet SorocaSoroca s Drochia Drochia 48°N s CamencaCamenca 48°N RīscaniRīscani a FlorestiFloresti Nistru Costesti Costesti SoldanestiSoldanesti r GlodeniGlodeni a Balti Balti RībnitaRībnita RezinaRezina Balatina Balatina Prut r SīngereiSīngerei To Voznesens'k FalestiFalesti a Telenesti elenesti Chiperceni Chiperceni 0 10 20 30 40 Kilometers b ROMANIA OrheiOrhei 0 10 20 30 Miles SculeniSculeni i Dubasari Dubasari TRANSNISTRIATRANSNISTRIA To Pascani Mt. Balanesti Mt. Balanesti a Calarasi (430 m) (430 m) CriuleniCriuleni UngheniUngheni Straseni GrigoriopolGrigoriopol NisporeniNisporeni StauceniStauceni To Zhmerynka 47°N CHISINAUCHISINAU 47°N LapusnaLapusna Ialoveni Ialoveni AneniiAnenii Noi Noi Tiraspol iraspol Bender Bender LeuseniLeuseni HīncestiHīncesti (Tighina) (Tighina) SloboziaSlobozia Cainari Causeni To Odesa Plain Cimislia Cimislia This map was produced by the Map Design Unit of The World Bank. Nistru The boundaries, colors, denominations and any other information To Birlad shown on this map do not imply, on the part of The World Bank Leova Leova Group, any judgment on the legal status of any territory, or any Bugeac Stefan-Voda endorsement or acceptance of such boundaries. Comrat Comrat Basarabeasca Basarabeasca To Birlad Cantemir Cantemir 27°E MOLDOVA GAGAUZIA GAGAUZIA FIRST CADASTRE UKRAINE Ceadīr-Ceadīr- To Artsyz PROJECT LungaLunga 46°N SELECTED CITIES AND TOWNS Prut 46°N AUTONOMOUS TERRITORIAL UNIT Cahul Cahul Taraclia araclia CAPITALS GAGAUZIA GAGAUZIA RAIONS OR MUNICIPALITIES CAPITALS* Vulcanesti ulcanesti NATIONAL CAPITAL RIVERS MAIN ROADS RAILROADS To Imayil Black AUTONOMOUS TERRITORIAL UNIT BOUNDARIES To Bucharest Sea RAIONS OR MUNICIPALITIES and Constanta BOUNDARIES INTERNATIONAL BOUNDARIES *Names of the raions or municipalities are identical to their capitals. 28°E 29°E 30°E NOVEMBER 2007