38182 Progress Report to the Board of Executive Directors on the Implementationof the Management's Action Plan inResponseto the Inspection PanelInvestigation Report on the Cartagena Water Supply, Sewerage and EnvironmentalManagement Project Introduction On June 24, 2005, the Inspection Panel submitted its Investigation Report No. 32034-CO on the Cartagena Water Supply, Sewerage and Environmental Management Project to the Board. On July 29, 2005, Management submitted its Report and Recommendations in response to the InspectionPanel's Investigation Report. Chapter V of the Management Report contained an Action Plan proposed to follow up on the Panel's findings, for further strengthening o f the Project. This Action Plan i s presented inAnnex 1. On November 8, 2005, the Board discussed the Inspection Panel Investigation Report and Management's Report and Recommendations in Response to the InvestigationReport. The Board endorsedthe Action Plan proposed by Management as an adequate response to the Inspection Panel's findings, requested to proceed with project implementation while implementing, in parallel, the proposed Action Plan, and asked that Management report back on the progress in implementing this Action Plan. The Board also asked that Management resolve with the Panel outstanding questions on the importance o f and the carrying-out o f three-dimensional modeling o f the risk of contamination at the outfall site. The present report i s aimed at providing information to the Board regarding the progress inimplementingthe Action Planproposedby Management, and the discussions with the Inspection Panel regarding three dimensional modeling. Progress Achieved on each Activity of the Action Plan The following table provides information on the implementation o f the Action Plan. - 2 - ProgressinImplementingthe Action Plan (as of September4,2006) ISSUEIFINDING PROPOSEDACTION IMPLEMENTATION PROGRESS OD4.01 -EnvironmentalAssessment - 3 - lSSUE/FINDING PKOf'OSED ACTION IMPLEMEN'I'A'llON PROGRESS Risk of Inresponseto the Panel's ~ ~ ~ grccommendedthat t e ~ e ~ Diapirisn (mud suggestionandgiven the ACUACAR carry out a side scan volcanism) utility m d relatively low sonarsurvey. ACUACARhired a cost of sucha survey, consultant and carried out the side- Nmagement has scan sonar study. The study was recommendedthat completed by April 2006. As part ACUACAR undertakea o fthe study the consultant side scan sonar survey. discussedthe results with another ACUACAR plans to carry marine geologyexpert. ACUACAR out the surveyby also discussedthe report with the December 3I,2005. consultant that carried out the original diapirism analysis, to obtain hisopinion and recommendations.As a result of the study and consultations, ACUACAR decidedto changethe routeo fthe outfall so as to further redwe diapirismrisks. The project consulting engineer, E-frlzenand Sawyer, has completcd thc correspondingadjustmentsto the outfall des@. - 4 - Disposalof Inresponse to the Panel's A comprehensive study o fanalysis Solids finding, AGUACAR will of"alternatives for disposal methods carry out an analysis of ofthe screened nlatei-ial was alternative disposal completed and submitted to thc methods for the screened Rank in Febnrary2006. The study material. AC'IJACAR plans concluded that the method sclcctcd to submit the completed undcr thc project is the best analysis to the Bank by alternative for disposal of the December 31,2005, screened material. - 5 - - 6 - ISSUEYE'INDING PROPOSEDACTION IMPLEMENTATION PROGRESS Social Impact The pipedwater, under The water supply system to the Assessment and construction, is plannedto north zone was completed andthe Benefitsfor be deliveredto the North northzone ~ o ~ ~ u I i arei e ~ i t Afro-Colombian Zone communitiesprior to receiving potablewater o fhigh Communitiesin or during the last quarter o f quality, continuously 24 hours per the North Zone 2005. These investments day, 365 days per year as ofAu&?jst were originally to be 2006. This refers not only to Punta financed by the District, Canoa, Manzanillo, Arroyo de accordingto the Loan Piedraand LaBoyuilla butalso to Agreement. Dueto Project other communities inthe North cost savings, these Zone. The users in Punta Canoa investmentswill now be have receivedin-houseconnections financed by the Loan, free ofany infixstructure or freeing up municipal connectioncharge. budget for other uses. 174in-house sanitation units were Moreover, as part ofthe installedinLa Boyuilla axid 141in Pro-ject,in-house sanitation ManzaniXlodel Mar, InPunta i s underconstruction in La Canoa, in-house sanitation units Boquillaand Mmzanillo were installed in f 80 homesby del Mar, a~idunderbidding August 2006. An additional 30 for PunfaCmoa,where homesare to receive services, delivery is projected for where the families originally did April 2006. not want to participate inthe La Boquilla has already program, but have since changed beenconnectedto the their minds after seeingthe benefits sewer network. provided to the other 180homes. ACUACAR has committed The in-housesanitation units have to extendthe network to enabled inthe households of Punta PuntaChnoa, Manzanillo Cmoa and Mamanillo del Mar to del MarandArroyo de evacuatetheir wastewater to septic Piedrain the next 24 tanks as o f September 2006. In months, inparallel with the Punta Chnoa, all residents now construction o fthe outfhll. havecontinuous water supply and PuntaCanoatias confirmed are connected to septic tanks: they its interest in a Cotnniunity enjoy full water supply and Center, which is plannedto sanitation services. beprovided by April 2006. The community center in A plant nursery has been Manzanillo del Marwas completed establishedinPuntaCanoa, inJune2004. The community to be managed center of L a Roquilla was cooperatively by the completediiiSeptember 2006. cornniunity, to createjobs ACUACAR ran into difficulties in and supply trees to the identifying an appropriate lot with Project. legal title for purchase for the site o fthe PuntaCanoacommunity Supervisionwill focus on center. This problem was recently the early delivery ofthe resolvedand the lot was purchased. benefits under the social The designofthe center has been * . * . ... - 7 - - 8 - ISSUEi'FINDING PROPOSEDACTION 1MPL.EMENTATIONPROGRESS OP 10.04 -Economic Evaluationof Investment Operations Economic Managementwill update Evaluation of the results of the ccoiiomic AIternatives analysis to take into account the additional investments requiredby the ciivironmcntai license that would needto be operational in2015, and adjust landvalues. OD4.15 Poverty Reduction OPlBP 10.02 - FinancialManagement - 9 - ISSUEYFINDING PROPOSEDACTION IMPLEMENTATION PROGRESS ThreeDimensionalModelingof the Impactofthe Submarine Outfallon Sea Water Contamination A t the Board discussion o f the Panel's findings and Management Response, the Board requested that Management and the Panel propose to the President within four weeks a decision on use o f a 2D or 3D model for assessingdiffusion patterns and shoreline concentrations related to the submarine outfall. After the Board meeting on November 8, 2005, a meeting was held between the Inspection Panel, Panel consultants, the project team, and representatives o f ACUACAR. It was agreedthat ACUACAR would undertakethree-dimensional modeling o f the outfall discharge using the model developed by the Panel consultant, with an estimated time o f one month to carry out the analysis. A team was hired to carry out the three-dimensional modeling. The team consisted o f Prof. Philip Roberts, who carried out the earlier two- dimensional modeling o f the discharge, and Beatriz Villegas, a graduate student o f the Panel's consultant. These agreementswere reportedto Mr.Wolfowitz on December 6,2005. The three-dimensional modeling effort took five months longer than anticipated; however, it yielded results pertinent to the discussion. The results o f the modeling were sent to the InspectionPanel on August 11, 2006. As an additional effort to assure the optimal design, the project team contracted additional modeling work by a researcher of the University of Karlsruhe, using an alternative three-dimensional model. Both three-dimensional modeling efforts confirmedthat the 2.85 kmlong submarine outfall i s adequate for the Cartagena project. Status ofProjectImplementation - 10- The Project consists of eight components: 0 Component A. Expansion o fthe Water Supply System; Component B.Expansion o fthe Sewer System inthe Ciknaga Basin; 0 Component C. Construction o f the Main Conveyance System o f the Wastewater to the Treatment Plant; 0 Component D. Constructiono f Treatment Installations; Component E. Constructiono fthe Submarine Outfall; 0 Component F.IndustrialWastewater Discharge Control; Component G.Environmental and Social Component; and Component H. Project Management, Technical Assistance, Studies, Design and Supervision o fWorks. The Project has been effective for approximately six and a half years. As o f August 31, 2006, 56 percent o fthe Loan had been disbursed. The works of Component A (Expansion o f the water supply system) and Component B (Expansion o f the sewerage system in the Cihaga basin) have been completed. All the respective contracts have been closed. Components F, G and H are well advanced, and will continue for the entire implementation period, as planned. The water supply works for the North Zone, originally the responsibility o f the District o f Cartagena, have been constructed and funded by the Project, due to savings achieved in the implementationo f Component A. The North Zone now receives continuous water supply. The implementation o f Components C, D, and E, which constitute the wastewater management system, including the submarine outfall, has suffered delays due to the lengthy authorization o f an environmental license for these works, an unsuccessful bidding process that has required rebidding, and delays in contracting pending the findings o f the Panel and the subsequent three-dimensional modeling. The works under these three components have been divided into four contracts: (i) Paraiso pumping station; (ii) onshore pressure pipeline; the the (iii) wastewatertreatmentplant; and(iv)thesubmarineoutfall.Contracts(i),(ii) (iii) the and have been awarded and are under construction. Contract (iv) is inthe process o f bid evaluation; four bids were received on September 20, 2006 and opened on the same day. Technical evaluation and validity o f the received bids i s underway and is expected to be sent to the Bank for no objection in late December 2006. It i s expected that works will begin, as anticipated, in January 2007. The current Loan closing date i s June 29, 2007. It i s expected that the closing date will be extended by at least one year to complete project implementation. Due to the delay in Project implementation and the continuous flow of poor immigrant families to Cartagena, thirty-seven families settled during2000-2003 on District property on the planned route o f the onshore pressure pipeline, near the Paraiso pumping station. Although - 11- resettlement activities were not expected during Project preparation, it i s now necessary to resettle twenty-four of these families due to construction o f works. A Resettlement Action Plan was prepared and disclosed in accordance with Bank policies. New homes have been constructed and will be officially delivered to the families on December 20,2006, at which time the families will be resettled, incompliance with Bankpolicies. Next Steps Management has taken action on all items inthe action plan, and action plan follow up hasbeen substantively completed. As noted inthe Action PlanTable, there are two pendingactivities: (i) installationof the 30 in-house sanitation units inPunta Canoa for those residents which changed their mind after seeing the benefits provided to other residents; and (ii) the completion o f construction o f the Punta Canoa community center inearly 2007 as a result o f delays ingettinglegal title for the lot purchased. As part o f routine Bank supervision, the Bank will continue: (i)oversight of the quality o f ACUACAR's outreach activities; (ii) review and filing o f L a Previsora's (the Trust Fund Administrator) annual audit reports; and (iii) confirmation with CARDIQUE (the regional environmental authority) that ACUACAR is fulfilling the conditions o f its environmental license. Based on the implementationo f the management actionplan, the requested consultation with the Panel on modeling of the outfall discharge impacts, the positive results of additional actions taken, and the submission o f this report, Management proposes taking no further action on this matter. - 12- Annex 1 ProposedManagementAction Planas PresentedintheManagementReport and RecommendationsinResponseto the InspectionPanel's InvestigationReport ManagementAction Plan ISSUEiFINDING PROPOSEDACTION OD4.01 -EnvironmentalAssessment Risk ofDiapirism Inresponseto the Panel's suggestionaxid giventhe utilitymd (mud volcanism) rdativcly low cost of such a survey, ~ a n a ~ eh;zse ~ t ~ recommendedthat ACUACAR undertakea side scan sonar survey. ACUACAR plansto aut the surveyby December31, 200s. Overland Pipeline Design DisposalofSolids In responseto the Panel's finding, ACUACAR will carry out an analysis of alteniittivc disposal methods for the screened matcrial, ACUACAK plansto submit the completed analysis to the Bankby Dccember3I,2005, Project Impactson I,ocallyAffected Communities- Fishing - 13 - Managenletit Action Plan SocialImpact The pipedwater, under construction, is plannedto be delivered to Assessmentand the North Zone communiticsprior to or duringthe last quarter of Benefitsfor Afro- 2Q05.These investnientswere originally to be financed bythe Colombian District, accordingto the LoanAgreement. Dueto Project cost Communitiesinthe savings, these investmentswill now be financedby the Loan, North Zone frceing upmunicipalbudget for other uses, Moreover, as part of the Project, in-housesanitation isunder construction inLa Boyuilfaand Mmz,anillo delMar, andunder bidding for Punta Canoa, where deliveryi s projected for April 2006. La Boyuillahas already been connectedto the sewer network. ACUACAR has committed to cxtendthe network to PuntaCanoa, ManzaniXlodel Mar and Arroyo de Piedra inthe next 24 months, inparallelwith the construction ofthe outfall, PuntaCama has confirmed its interest ina Community Center, which is plannedto be provided by April2006. A plant nurseryhas been establishedinPunta Canoa, to bemanagedcooperatively by the corximunity, to create jobs and supplytrees to the Project. Supervision will focus on the early delivery ofthe benefits under the social program. - 14- OP 10.04 -EconomicEvaluationof InvestmentOperations Economic Management will update the results ofthe economic analysis Evaluationof to take into account the additional investments requiredby the Alternatives environmental license that would need to be operational in 2015, and adjust land values. OD 4.15 Poverty Reduction Poverty Reduction Pertinent actions arc covered above under Project Impactson Locally Affected Cotnmunities .- Fishingand Social lriipact Assessment and Benefits for Ako-Colombian Communities in the NorthZone. OPlSP 10.02 Financiat~ a ~ a ~ ~ r n e ~ t - OTHER International CARDIQCE, the regional cnvironmcntal authority, is Agreements responsible to nioriitor the conditions and the obligations ofthe environmental liccnsc that it has granted to ACUACAR. As part of its routinesupervision, the Rank \vi11 confirm that ACUAC'AR is fulfilling conditions ofthe liccnsc.