The World Bank
Alat and Karakul Water Supply Project (P118197)
REPORT NO.: RES34145
RESTRUCTURING PAPER
ON A
PROPOSED PROJECT RESTRUCTURING
OF
ALAT AND KARAKUL WATER SUPPLY PROJECT
APPROVED ON DECEMBER 13, 2012
TO
REPUBLIC OF UZBEKISTAN
WATER
EUROPE AND CENTRAL ASIA
Regional Vice President: Cyril E Muller
Country Director: Lilia Burunciuc
Senior Global Practice Director: Jennifer Sara
Practice Manager/Manager: David Michaud
Task Team Leader: David Malcolm Lord, Bakyt Arystanov
The World Bank
Alat and Karakul Water Supply Project (P118197)
ABBREVIATIONS AND ACRONYMS
IDA International Development Association
IP Implementation Progress
PCU Project Coordination Unit
PDO Project Development Objective
PMFM Practice Manager, Financial Management
SECO Swiss State Secretariat for Economic Affairs
WFAFO World Bank Group Finance and Accounting, Financial Operations
The World Bank
Alat and Karakul Water Supply Project (P118197)
BASIC DATA
Product Information
Project ID Financing Instrument
P118197 Investment Project Financing
Original EA Category Current EA Category
Partial Assessment (B) Partial Assessment (B)
Approval Date Current Closing Date
13-Dec-2012 30-Jun-2019
Organizations
Borrower Responsible Agency
BUKHARA REGIONAL PRODUCTION ENTERPRISE
Republic of Uzbekistan
SUVOKOVA
Project Development Objective (PDO)
Original PDO
The project development objective (PDO) is to improve the coverage, quality and efficiency of public water supply
service in the two districts of Alat and Karakul in the Bukhara region. The objective will be achieved through the
rehabilitation and expansion of water production, transmission and distribution infrastructure in urban and rural areas.
OPS_TABLE_PDO_CURRENTPDO
Summary Status of Financing
Net
Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed
IDA-51890 13-Dec-2012 18-Jul-2013 13-Feb-2014 30-Jun-2019 82.00 32.56 41.54
Policy Waiver(s)
Does this restructuring trigger the need for any policy waiver(s)?
No
The World Bank
Alat and Karakul Water Supply Project (P118197)
I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING
1. The project was approved by the Board on December 13, 2012 with an IDA commitments of US$82 million
equivalent supporting four components: (A) Improvement of Water Supply Infrastructure; (B) Institutional Strengthening
and Capacity Building; (C) Studies for Future Investments; and (D) Project Management. The project became effective in
February 2014, fourteen months after approval, delayed due in part to lengthy internal Government procedures required
for signing and fulfilling effectiveness conditions.
2. The first Level 2 project restructuring was approved in November 2017 and included an extension of the closing
date by 18 months, until June 30, 2019, and reallocation between disbursement categories. Since restructuring, further
changes in procurement regulations coupled with persistent Government co-financing delays have had negative effects
on overall project progress.
3. The IP rating is currently Moderately Unsatisfactory. Around 85% of the project IDA financing is committed with
eight out of nine large civil works packages contracted and in progress. Total disbursements are at around US$32.2 million
(or 43 percent of total IDA credits). The undisbursed balance remains high, at around US$42.0 million or 57 percent of the
total proceeds. This reflects the large number of civil works contracts to be completed before the current closing date of
June 30, 2019. The current total physical progress of civil works is estimated at around 40 percent. Out of nine signed civil
works contracts, two contracts are nearing completion, two contracts are progressing well, and four contracts are still at
an early stage. Two packages are facing challenges: (i) AK/W/01 for rehabilitation of water treatment plant Dvoinik, which
has seen limited progress due in part to delays in payment of Government counterpart financing, and (ii) AK/W/08R for
construction of distribution network in southern part of Karakul district, which has experienced prolonged delays in
procurement, although contract award is now scheduled for November 2018.
4. Key institutional strengthening activities under Component B, which provide support to the State Unitary
Enterprise of Bukhara Region (Suvokova) are progressing well. An Operational and Performance Improvement Action Plan
(OPIAP) is under implementation. Key activities include capacity building and training for the utility staff in operational
and commercial areas including monitoring information systems and communications. SECO's co-financing for technical
assistance to provide further institutional support to Bukhara Suvokova, which will commence in early 2019, will help to
further improve sustainability of investments and more generally the quality of services across the region.
5. Component C, which supports the preparation of feasibility studies for the development of wastewater
management solutions in the project area, has been completed. The Sanitation Investment Proposal was prepared and
presented to the stakeholders in late February 2018 and finalized on April 11, 2018.
6. Progress towards achievement of PDO is currently rated Moderately Unsatisfactory. While indicators related to
the quality and efficiency of service delivery are on track to be substantially achieved, it is projected that the target value
for coverage is unlikely to achieved by the current project closing date, due to above mentioned implementation delays.
The project was designed to reach 232,000 people in Alat and Karakul districts who will directly benefit from water supply
investments, as reflected in revised/original PDO indicators below and Annex 1, PAD.
7. The responsible agency has overdue entity audit reports for 2017 due to delayed procurement and
implementation of auditing services. However, audited project financial statements were submitted to the Bank on
October 10, 2018. The Government authorities were notified of this issue and potential remedial actions in the Bank’s
Management Letter dated September 7, 2018. Following this, a time bound action plan for completing the auditing
activities was prepared, jointly by the implementing entities and the auditor, and submitted to the Bank. The auditing
activities are in progress and as per the action plan schedule, the audited entity financial statements for the year ending
The World Bank
Alat and Karakul Water Supply Project (P118197)
December 31, 2017 are to be submitted before the end of December 2018. PMFM and WFAFO manager clearance has
been obtained to proceed with restructuring notwithstanding overdue audits.
II. DESCRIPTION OF PROPOSED CHANGES
8. This restructuring package is part of broader portfolio improvement plan covering on-going water sector projects
in Uzbekistan, which has proposed a combination of cancellations, extensions and changes in disbursement percentages
under projects in order to improve implementation progress. The proposed action plan will help to address the situation
of three on-going water and sanitation projects that were heavily impacted by frequent changes in procurement
regulations, institutions and authorizing environment since 2017, and is expected to bring the overall portfolio to
satisfactory status.
9. The proposed restructuring includes an extension of the closing date by 12 months, until June 30, 2020, or a
cumulative extension since the original project of 30 months. Additionally, the Government has requested to increase the
percentage of remaining expenditures to 100 percent from the IDA resources to resolve co-financing issue in project
implementation, to which the Bank has agreed. These adjustments will allow full utilization of IDA funds, free-up
budgetary resources for redeployment to other priority programs within the sector and enable sufficient time to complete
on-going works. The increase in financing percentage is proposed to be effective from the date of the Government's
request, i.e., September 10, 2018.
10. The requested adjustment will be complemented by a course of other actions agreed with the Government
required for remedy of the situation. These actions include enhanced supervision and contract management to ensure
timeliness for completion of on-going civil works, a remedial action plans for financial and safeguards management,
strengthening the PCU capacity, commitment to contract all remaining activities under the project prior to December 31,
2018 and other measures discussed and communicated during the mission in June 2018.
11. Given the proposed changes and commitment of the Government to implement remedial actions, the task team
believes the PDO is likely to be substantially achieved by the proposed project closing date.
III. SUMMARY OF CHANGES
Changed Not Changed
Results Framework ✔
Loan Closing Date(s) ✔
Reallocation between Disbursement Categories ✔
Disbursement Estimates ✔
Implementation Schedule ✔
Implementing Agency ✔
DDO Status ✔
Project's Development Objectives ✔
Components and Cost ✔
The World Bank
Alat and Karakul Water Supply Project (P118197)
Cancellations Proposed ✔
Disbursements Arrangements ✔
Overall Risk Rating ✔
Safeguard Policies Triggered ✔
EA category ✔
Legal Covenants ✔
Institutional Arrangements ✔
Financial Management ✔
Procurement ✔
Other Change(s) ✔
Economic and Financial Analysis ✔
Technical Analysis ✔
Social Analysis ✔
Environmental Analysis ✔
IV. DETAILED CHANGE(S)
OPS_DETAILEDCHANGES_LOANCLOSING_TABLE
LOAN CLOSING DATE(S)
Original Revised Proposed Proposed Deadline
Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal
Applications
IDA-51890 Effective 31-Dec-2017 30-Jun-2019 30-Jun-2020 30-Oct-2020
OPS_DETAILEDCHANGES_REALLOCATION _TABLE
REALLOCATION BETWEEN DISBURSEMENT CATEGORIES
Financing %
Current Allocation Actuals + Committed Proposed Allocation
(Type Total)
Current Proposed
IDA-51890-001 | Currency: XDR
iLap Category Sequence No: 1 Current Expenditure Category: WORKS
42,290,000.00 16,347,508.46 42,290,000.00 69.20 100.00
The World Bank
Alat and Karakul Water Supply Project (P118197)
iLap Category Sequence No: 2 Current Expenditure Category: GOODS
3,210,000.00 394,311.42 3,210,000.00 69.20 100.00
iLap Category Sequence No: 3 Current Expenditure Category: CS incl AUD, TR, IOC
7,700,000.00 4,559,179.43 7,700,000.00 100.00 100.00
Total 53,200,000.00 21,300,999.31 53,200,000.00
OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE
DISBURSEMENT ESTIMATES
Change in Disbursement Estimates
Yes
Year Current Proposed
2013 917,826.00 0.00
2014 4,547,310.00 120,000.00
2015 7,299,312.00 630,000.00
2016 11,462,042.00 4,335,387.61
2017 16,676,914.00 11,862,050.72
2018 17,296,424.00 11,947,271.00
2019 16,667,976.00 20,957,529.82
2020 7,132,196.00 24,000,000.00
.
The World Bank
Alat and Karakul Water Supply Project (P118197)
.
Results framework
COUNTRY: Uzbekistan
Alat and Karakul Water Supply Project
Project Development Objectives(s)
The project development objective (PDO) is to improve the coverage, quality and efficiency of public water supply service in the two districts of Alat and
Karakul in the Bukhara region. The objective will be achieved through the rehabilitation and expansion of water production, transmission and distribution
infrastructure in urban and rural areas.
Project Development Objective Indicators by Objectives/ Outcomes
RESULT_FRAME_TBL_PDO
Indicator Name DLI Baseline Intermediate Targets End Target
1 2 3 4 5 6 7
Improved coverage of public water supply service in the districts of Alat and Karakul (Action: This Objective is New)
Direct project
40,456.00 40,456.00 40,456.00 59,500.00 125,600.00 125,600.00 125,600.00 125,600.00 232,000.00
beneficiaries (Number)
Rationale:
Action: This indicator
End date has been changed to reflect project extension.
has been Revised
Female beneficiaries
50.68 50.68 50.68 50.65 50.68 50.70 50.70 50.70 50.70
(Percentage)
Action: This Rationale:
indicator has been End date has been changed to reflect project extension.
Revised
Improved quality of public water supply service in the districts of Alat and Karakul (Action: This Objective is New)
Percentage of
regulatory water 53.00 98.00
samples meeting
The World Bank
Alat and Karakul Water Supply Project (P118197)
RESULT_FRAME_TBL_PDO
Indicator Name DLI Baseline Intermediate Targets End Target
1 2 3 4 5 6 7
potable quality
standards (Percentage)
Rationale:
Action: This indicator
End date has been revised to reflect project extension.
has been Revised
Percentage of
regulatory water
samples meeting
53.00 53.00 53.00 53.00 98.00 98.00 98.00 98.00 98.00
potable quality
standards in Alat
District (Percentage)
Action: This Rationale:
indicator has been End date has been revised to reflect project extension.
Revised
Percentage of
regulatory water
samples meeting
potable quality 57.00 57.00 57.00 57.00 98.00 98.00 98.00 98.00 98.00
standards for
Karakul District
(Percentage)
Action: This Rationale:
indicator has been End date has been revised to reflect project extension.
Revised
Improved efficiency of public water supply service in the districts of Alat and Karakul (Action: This Objective is New)
Bill collection ratio
46.00 80.00
(Percentage)
The World Bank
Alat and Karakul Water Supply Project (P118197)
RESULT_FRAME_TBL_PDO
Indicator Name DLI Baseline Intermediate Targets End Target
1 2 3 4 5 6 7
Rationale:
Action: This indicator
End date has been changed to reflect project extension.
has been Revised
Bill Collection Ratio -
46.00 60.00 65.00 70.00 75.00 80.00 80.00 80.00 80.00
Alat (Percentage)
Action: This Rationale:
indicator has been End date has been changed to reflect project extension.
Revised
Bill Collection Ratio -
Karakul 58.00 60.00 65.00 70.00 75.00 80.00 80.00 80.00 85.00
(Percentage)
Action: This Rationale:
indicator has been End date has been changed to reflect project extension.
Revised
Reliability of water
4.00 4.00 6.00 8.00 10.00 20.00 20.00 20.00 20.00
supply service (Hours)
Rationale:
Action: This indicator
End date has been changed to reflect project extension.
has been Revised
PDO Table SPACE
The World Bank
Alat and Karakul Water Supply Project (P118197)
Intermediate Results Indicators by Components
RESULT_FRAME_TBL_IO
Indicator Name DLI Baseline Intermediate Targets End Target
1 2 3 4 5 6 7
Component A: Improvement of Water Supply Infrastructure (Action: This Component is New)
New piped household
water connections that
are resulting from the 0.00 0.00 0.00 3,500.00 15,700.00 35,400.00 35,400.00 35,400.00 35,400.00
project intervention
(Number)
Rationale:
Action: This indicator
End date has been changed to reflect project extension.
has been Revised
Piped household water
connections that are
benefiting from
0.00 0.00 0.00 3,700.00 7,400.00 7,400.00 7,400.00 7,400.00 7,400.00
rehabilitation works
undertaken by the
project (Number)
Rationale:
Action: This indicator
End date has been changed to reflect project extension.
has been Revised
Number of connections
with operating water 0.00 0.00 0.00 11,000.00 23,200.00 42,900.00 42,900.00 42,900.00 42,900.00
meters (Number)
Rationale:
Action: This indicator
End date has been changed to reflect project extension.
has been Revised
Number of breakage
1.00 1.20 1.40 1.00 0.20 0.20 0.20 0.20 0.20
per km of water
The World Bank
Alat and Karakul Water Supply Project (P118197)
RESULT_FRAME_TBL_IO
Indicator Name DLI Baseline Intermediate Targets End Target
1 2 3 4 5 6 7
transmission mains
(Number)
Rationale:
Action: This indicator
End date has been changed to reflect project extension.
has been Revised
Number of breakage
per km of water
1.20 1.40 1.60 1.20 0.80 0.40 0.40 0.40 0.40
distribution networks
(Number)
Rationale:
Action: This indicator
End date has been changed to reflect project extension.
has been Revised
Component B: Institutional Strengthening and Capacity Building (Action: This Component is New)
BVK Cash Working
1.57 0.90
Ratio (Number)
Rationale:
Action: This indicator
End date has been changed to reflect project extension.
has been Revised
BVK Cash Working
Ratio - Alat 0.90 1.00 1.00 0.90 0.90 0.90 0.90 0.90 0.90
(Number)
The World Bank
Alat and Karakul Water Supply Project (P118197)
RESULT_FRAME_TBL_IO
Indicator Name DLI Baseline Intermediate Targets End Target
1 2 3 4 5 6 7
Action: This Rationale:
indicator has been End date has been changed to reflect project extension.
Revised
BVK Cash Working
Ratio - Karakul 1.18 1.00 1.00 0.90 0.90 0.90 0.90 0.90 0.90
(Number)
Action: This Rationale:
indicator has been End date has been changed to reflect project extension.
Revised
Percent of households
for whom water is a
85.00 20.00
priority problem
(Percentage)
Rationale:
Action: This indicator
End date has been changed to reflect project extension.
has been Revised
Percent of
households for
whom water is a 75.00 75.00 75.00 75.00 50.00 20.00 20.00 20.00 20.00
priority problem -
Alat (Percentage)
Action: This Rationale:
indicator has been End date has been changed to reflect project extension.
Revised
Percent of
households for 85.00 85.00 85.00 185.00 50.00 20.00 20.00 20.00 20.00
whom water is a
The World Bank
Alat and Karakul Water Supply Project (P118197)
RESULT_FRAME_TBL_IO
Indicator Name DLI Baseline Intermediate Targets End Target
1 2 3 4 5 6 7
priority problem -
Karakul
(Percentage)
Action: This Rationale:
indicator has been End date has been changed to reflect project closing date.
Revised
Number of water
utilities that the project 0.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
is supporting (Number)
Rationale:
Action: This indicator
End date has been changed to reflect project extension.
has been Revised
Number of BVK staff
recruited, and trained
for Alat and Karakul 0.00 1.00
water supply service
needs (Number)
Rationale:
Action: This indicator
End date has been changed to reflect project extension.
has been Revised
Non revenue water
51.00 40.00 35.00 25.00 25.00 25.00 25.00
(Percentage)
Rationale:
Action: This indicator
End date has been changed to reflect project closing date.
has been Revised
The World Bank
Alat and Karakul Water Supply Project (P118197)
RESULT_FRAME_TBL_IO
Indicator Name DLI Baseline Intermediate Targets End Target
1 2 3 4 5 6 7
BVK Participation in
IBNET for water and
0.00 1.00
sanitation utilities
(Number)
Rationale:
Action: This indicator
End date has been changed to reflect project extension.
has been Revised
IO Table SPACE
The World Bank
Alat and Karakul Water Supply Project (P118197)