ICRR 10288
                                                                                            Report Number : ICRR10288
                    ICR Review
                    Operations Evaluation Department




1. Project Data :
             OEDID:
             OEDID :    C1895
         Project ID :   P010305
      Project Name :    Punjab Urban Development
            Country :   Pakistan
             Sector :   Other Urban Development
       L/C Number :     C1895
  Partners involved :   ODA
       Prepared by :    Anna Amato,, OEDST
      Reviewed by : Ronald S. Parker
    Group Manager : Gregory K. Ingram
       Date Posted : 04/29/1999

2. Project Objectives, Financing, Costs and Components :
The project financed priority physical investments at provincial and city level in urban infrastructure and
institutional and financial improvements in the sector agencies. The principal objectives were: (a) to improve
technical, financial and management performance of key urban institutions in Lahore, and to strengthen local
government institutions in Gujranwala, Sialkot and Multan; (b) to improve cost recovery in the four participating
cities, achieving sustainable resource utilization; (c) to demonstrate the value of coordinated area upgrading; (d) to
reduce urban service deficiencies in water supply, sewerage and drainage, traffic control and shelter; (e) to improve
the quality of life and productive capacity of the urban poor, and to protect the urban environment; and (f) to prepare
the framework for a future Punjab intermediate cities project. The loan (US$90 million) was approved in April 1988
and closed in March 1998. Total project cost was US$135.2 million. The co-financier was the U.K. ODA. Project
components included:
       water supply, sewerage, and stormwater drainage improvements;
       roads, footpaths and street lighting;
       cultural heritage conservation including preservation of historic buildings;
       comprehensive improvements to low-income neighborhoods; and
       institutional strengthening and project management assistance.

3. Achievement of Relevant Objectives :
The project's physical objectives were partially achieved after substantial delay . Key institutional development
objectives were not achieved . The achievement of financial objectives was substantial, and the major implementing
agency significantly improved its performance .

4. Significant Achievements :
 About 300,000 low-income people in Lahore, Gujranwala, Sialkot, and Multan benefited from the
upgrading components. Institutional development was very successful for the Lahore Development
Agency's Urban Development Wing and the Traffic Engineering and Planning Agency. The traffic and
transportation component in Lahore was also successful, with improvement of 21 major roads and the
installation of new traffic signals and street lighting. Conservation of the cultural heritage in the Walled
City of Lahore improved the quality of urban life.

5. Significant Shortcomings :
The local municipalities are not likely to carry out the O&M required, and uncollected solid waste
accumulates in sewers and drains, reducing the full benefit of the upgrading. The construction of
stabilization ponds for sewage treatment in Lahore was dropped and deferred to a later project. In
general terms, IDA overestimated LWASA's capacity for contract management and project
implementation and did not identify the risk of the Borrower's insufficient commitment to institutional
development components. Appropriateness of the designs and implementation plans for some
components should have been analyzed more carefully at appraisal.


6. Ratings :               ICR                  OED Review                Reason for Disagreement /Comments
               Outcome : Satisfactory           Marginally Satisfactory   Among the indicators of less than
                                                                          fully satisfactory performance are:
                                                                          time of completion, lack of attention
                                                                          to O&M, suboptimal targeting of
                                                                          training opportunities, Borrower's
                                                                          insufficient commitment to
                                                                          institutional development
                                                                          components.
    Institutional Dev .:   Partial              Modest                    These ratings are largely equivalent .
        Sustainability :   Uncertain            Uncertain
   Bank Performance :      Satisfactory         Satisfactory
      Borrower Perf .:     Satisfactory         Satisfactory
       Quality of ICR :                         Satisfactory


7. Lessons of Broad Applicability :
Agencies responsible for O&M should, at a minimum, be involved in the project planning stages. Future project
operation--including especially the financial and human resources for O&M--should be secured before
implementation completion. While over-complex projects are to be avoided, the minimum necessary conditions for
project success need to be identified during appraisal and taken into account when components are being designed:
if uncollected solid waste is likely to block sewers and drains, ensuring collection prevents costly damage to
expensively constructed roads and other infrastructure. Spot-checks of procurement practices reduce corruption, as
does increased transparency (disclosing more information to the general public).

8. Audit Recommended?            Yes      No
         Why?

9. Comments on Quality of ICR :
The ICR gave adequate coverage to important subjects and the analysis presented was generally sound . Borrower's
input to ICR was also satisfactory .