Document of The World Bank FOR OFFICIAL USE ONLY Report No: 22281 IMPLEMENTATION COMPLETION REPORT (CPL-41460; PPFB-P2940) ON A LOAN IN THE AMOUNT OF US$10 MILLION TO THE REPUBLIC OF KAZAKHSTAN FOR A REAL ESTATE REGISTRATION PILOT PROJECT June 1, 2001 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective March 19, 2001) Currency Unit = Tenge 1 Tenge = US$ 0.007 USS 1 = 145.5 Tenge FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS BTI Bureau of Technical Inventory CEL Committee for External Loans CIS Commonwealth of Independent States CRS Committee for Registration Services GIS Geographic Information System GISKhAGI State Institute for Agricultural Aerophotogeodetic Research GosNPCzem State Scientific Research Center for Land GPS Global Positioning System ICB International Competitive Bidding IT Information Technology Land Committee State Committee for Land Relations and Land Management, later reorganized into the Republican Agency for Management of Land Resources MOJ Ministry of Justice NGO Non-government organization OED Operations Evaluation Department of the World Bank PIU Project Inplementation Unit PPF Project Preparation Facility QAG Quality Assurance Group of the World Bank RDBMS Relational data base management software TOG Technical Oversight Group of the Project Implementation Unit Vice President: Johannes Linn Country Manager/Director: Kiyoshi Kodera Sector Manager/Director: Joseph Goldberg Task Team Leader/Task Manager: Edward Cook FOR OFFICIAL USE ONLY KAZAKHSTAN KAZAKHSTAN REAL ESTATE REGISTRATION PILOT PROJECT CONTENTS Page No. I. Project Data 1 2. Principal Perfornance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 4 5. Major Factors Affecting Implementation and Outcome 13 6. Sustainability 14 7. Bank and Borrower Performance 15 8. Lessons Learned 17 9. Partner Comments 18 10. Additional Information 22 Annex 1. Key Performance Indicators/Log Frame Matrix 23 Annex 2. Project Costs and Financing 24 Annex 3. Economic Costs and Benefits 26 Annex 4. Bank Inputs 27 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 29 Annex 6. Ratings of Bank and Borrower Performance 30 Annex 7. List of Supporting Documents 31 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. Project ID: P046044 Project Name: KAZAKHSTAN REAL ESTATE REGISTRATION PILOT PROJECT Team Leader: Edward C. Cook TL Unit: ECSSD ICR Tvpe: Core ICR Report Date: June 13. 2001 1. Project Data Name: KAZAKHSTAN REAL ESTATE REGISTRATION L/C/ITFNumber: CPL-41460; PILOT PROJECT PPFB-P2940 Country/Department: KAZAKHSTAN Region: Europe and Central Asia Region Sector/subsector: AG - Agency Reforn; BI - Institutional Development; UM - Urban Management; VM - Natural Resources Management KEY DATES Original Revised/Actual PCD: 01/26/1995 Effective: 08/16/1997 08/11/1997 Appraisal: 06/28/1996 MTR: Approval: 04/03/1997 Closing: 06/30/1999 12/31/2000 Borrower/lImplementing Agency: REPUBLIC OF KAZAKHSTAN/MINISTRY OF JUSTICE Other Partners: STAFF Current At Appraisal Vice President: Johannes Linn Johannes Linn Coutntry Manager: Kiyoshi Kodera Yukon Huang Sector Manager: Joseph Goldberg Michael Gould Team Leader at ICR: Edward Cook Edward Cook ICR Primary Author: Edward Cook; Gavin Adlington 2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S SustainabilitN: L Institutional Development Impact: SU Bank Performance: S Borrower Pe7formiance: S QAG (if available) ICR Qualitv at Entry: S Project at Risk at Any Time: No 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The original objective of the Project was to support, on a pilot basis, the establishment of a national registration system of real estate rights and transactions in accordance with the Presidential Decree with force of law On Registration of Dec. 25, 1995 (Registration Law), so as to provide tested and elaborated procedures for eventual nationwide implementation. Introduction of the system should result in increased sales, lease, and mortgage transactions involving real estate, thereby contributing to the economic development of the country. The project will also test the use of digital maps in support of the registration system for potential wide application in the future. A decision was taken by the Bank and the Govemment during preparation to limit the Project to a Pilot basis, focusing on key areas of the country (Almaty Oblast, Almaty City, Akmola Oblast, and Astana City). The tasks facing the Government following the adoption of the Registration Law were two-fold: (i) physically set up the registration offices under the Ministry of Justice and build implementation capacity within the Ministry of Justice; and (ii) elaborate procedures for the functioning of the registration system, including a plan for information sharing with other agencies and a delineation of the longer-term role of these agencies in the functioning of the registration system. Given the obstacles faced in establishing the new registration offices, and the need to elaborate registration procedures and inter-agency working relations, and the need to test the system quickly, the Pilot approach was adopted. The Government and the Bank were both committed to finding low-cost, pragmatic solutions to the problems posed by establishing the registration system. A good deal of information on land and real estate existed at the time of Project preparation. By going with a Pilot approach with a more limited implementation timeframe than a typical full project, there was greater emphasis on utilizing the existing and available information, lather than investing large sums of money in the generation of new information. These Project design decisions greatly enhanced the chances of satisfactory completion of the Project objectives. 3.2 Revised Objective: The original objective was not revised, except to add the testing of additional mapping technologies for potential wide application in the future. 3.3 Original Components: Component; Cost; Rating INSTITUTION BUILDING; $2,000,000.00; S REGISTRATION SYSTEM; $7,900,000.00; S MAPPING; $700,000.00; S REFINANCE OF PPF; $1,500,000.00; NR The Institution Building Component included training, technical assistance, and establishment and operation of the Project Implementation Unit (PIU). The training program was to consist of three tracks. The first was to focus on legal specialists in registration (both the registrars in the local offices and specialists at the oblast and national levels) providing in-depth training in the existing legislative base and case-studies of complicated situations or problems in registration of rights in immovable property, as demonstrated by the experience of other countries. The second training program was to focus on operation staff at the local level and to cover operational procedures, interaction with the client, data base - 2 - management, as well as providing basic coverage of the legal issues and legal implications of the registration system. The third training program was to address computer software, with general training for operational staff and more in-depth training for those staff responsible for system maintenance. Two training centers were to be established, one in Almaty and one in Astana. The technical assistance program was to consist of a team of foreign consultants providing expertise in the areas of operations of registration systems, legal issues, land cadastre, information technology, and real estate market development. Local consultants were to be hired to assist in drafting legislation and regulatory documents, in the development of the information technology system, and in project management and implementation. These consultants were to function within the context of the PIU, which was to be attached to the Ministry of Justice. The PIU was to function to bridge the gap between the Ministry of Justice and other agencies involved in implementation of the Project. The Head of the PIU was to be staffed by a legal expert, with other positions allocated for land cadastre and real estate specialists. Within the PIU, a technical oversight group (TOG) was to be established to manage the information technology aspects of the Project. The Registration System Component was to establish the registration offices of the Ministry of Justice and to define the linkages between those offices and the corresponding offices of the State Land Committee and the Ministry of Construction in the efficient functioning of the new registration system. The component entailed locating premises and staff for the new registration offices, elaborating procedures for the operation of the registration offices, defining operational procedures for the Land Committee and Ministry of Construction (architects') offices in support of the registration system, and elaboration and testing of automation of the registration system. The Project was to first elaborate the functioning of the registration system on a paper basis, and then address conversion to an automated system. Under the automated system the cooperating organizations were to be linked by a Local Area Network (LAN). Oblast registration offices were to be established to support implementation of the Project at the rayon level and to serve as information centers on the basis of linkages with the automated data bases in the rayon offices. A national level registration unit was to be established subordinate to the Ministry of Justice. The Mapping Component was designed to test on a limited scale digitization of maps. The objective was to elaborate methodologies for utilization of digital maps, train staff in this area, and examine the economic costs and benefits of shifting from paper-based to digital maps. During implementation of the Pilot Project, Government was to undertake a thorough assessment of the adequacy of existing maps, and the need for production of new base maps over the medium to longer-term in support of the registration system. 3.4 Revised Components: The major changes in Project design consisted of the following. Very early in implementation it was decided to remove the Ministry of Construction (architects') offices from the Project. This was due to the increasingly limited value that these offices could provide to the functioning of the registration system and the complications associated with having to coordinate the functions of a third agency. It also became clear that the Ministry of Construction was no longer in a position to manage or control the local architects' offices. Project design was also influenced by changes in administrative boundaries, as the former Taldy-Kurgan Oblast was amalgamated into Almaty Oblast, Astana (former Akmola) was given independent status vis a vis Akmola Oblast, the administrative center of Akmola Oblast was moved to the city of Kokchetau, and three rayons from the former Kokchetau Oblast were added to Akmola Oblast. There was also amalgamation of rayons within these Oblast structures. The - 3 - net effect was to increase the number of rayon registration offices to be established from 34 to 39 and to add an additional city office for Astana (with the movement of the Akmola Oblast office to Kokchetau). A decision was also made to downgrade the capacity of the file servers and number of computers, particularly at the rayon level, based on accumulating problems in utilization of GIS at these locations, and more reliable information on the number of daily transactions in these locations. The Mapping Component was expanded to test some additional technologies, including the production of overlays for the entry of cadastral information onto existing base maps, production of new base maps for the city of Astana, and scanning of existing 1 :10,000 maps, to serve as a basis for index maps for rural settlements. 3.5 Qualitv at Entry: There was not a standardized QAG assessment of quality at entry for this Project. Particular efforts were made to ensure that the Project was ready for implementation. As a condition of effectiveness for the Loan, the Government was required to resolve the issue of staffing and premises for the new registration offices. This was solved by transferring the existing Bureau of Technical Inventory (BTI) offices to the Ministry of Justice. In addition to staff and premises, this also provided a relatively good data base on real estate. The decision was also taken that the new registration system would operate on a fee for service basis, in accordance with the practice of most countries around the world, thereby reducing the counterpart financing requirements coming from the national budget. The Pilot Project made use of a Project Preparation Facility (PPF) that allowed for consultants to be selected and hired well ahead of implementation and to assist in the latter stages of project preparation. Italian Trust Funds were utilized to provide technical assistance for procurement, including in the preparation of bidding documents. At the time there were no formalized financial management requirements for negotiations or Board presentation. While these issues were addressed over time, more could have been done during preparation of the Project in setting up the Project reporting formats, and financial management system. During preparation of the Project a tripartite agreement was signed among the Ministry of Justice, the State Land Committee, and the Ministry of Construction concerning their commitment to the objectives of the Project and their willingness to cooperate in its implementation. In retrospect, this agreement proved to be of limited value in practice. More could have been done during preparation to actively engage the Land Committee in project design and agreement on detailed steps of project implementation. The relatively simple design of the Project allowed for establishment of straightforward indicators of progress on both project implementation and impacts. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: The primary objectives of the project have been met successfully and achievements have gone beyond the scope of the original design. Registration offices are successfully established across the whole country, not just the Pilot project Oblasts. They are financially secure, well managed at Republic and Oblast level and catering for an ever-increasing number of transactions. Increases in real estate market activity, including information services, sales, leases and mortgages, were 29% over the period from 1998 to 2000. This is - 4 - evidence of increased investment, even though the economy was negatively impacted by the Russian financial crisis of August 1998 and a drop in world oil prices during this period. The project has had its most significant impact in urban areas where there is a reasonable level of investment, economic activity and collateral for mortgages. There has not been the hoped for development of agricultural land policy, and indeed of agricultural profitability per se, that would support the more active development of sales and mortgage markets in rural areas. For the time being, rural land markets remain depressed and real estate values are low. There is weak incentive for the rural population to be involved in real estate transactions, and in many cases they are unable or unwilling to travel and pay fees for surveys, documentation or registration. (i) Support on a pilot basis the Borrower's efforts to establish a national registration system Market economies rely on the ability to use real estate for economic development. There is a basic requirement for businesses or industry to own or lease properties in order to operate and obtain capital, and for the general public to own or rent premises for living. A registration system is essential support to enable this to be possible. The system should be accurate, reliable, simple to understand, inexpensive and quick to be able to provide the services needed. The registration system in Kazakhstan meets the above criteria in most cases. There have been very few cases of errors and the public generally accepts the need to register and believes in the security it provides. Fees for registration are reasonable, although they were reduced by roughly 10-15 percent in early 2000 following the passing of a new law on budget and discussions with the anti-monopoly commission. Registration occurs within ten days by law, this is a reasonable time frame compared with other countries, but it could be improved (to one day) in order to provide a better service to the clients. The costs associated with transactions remain excessive. The general requirement for inventory if one has not been completed within the last six months and the cost of production of a State Akt for land when no field survey is involved increase costs and are unwarranted. It is still common to produce a second State Akt for land for clients when there is a sale, even though this is unnecessary. (ii) Test the use of digital mapping in support of the registration system Cadastre maps are an essential component of the registration system. Automated systems are in use in most economically developed countries for storing, retrieving and updating these maps. The project tested production of digital maps by scanning existing maps, comparing them with recent photography and doing field updates where necessary. This was as planned for the project. The results showed considerable differences between the different sources and it was difficult to produce a final product. The Contractors found the work more time consuming and technically complicated than they had envisaged. The results were not integrated into the Almaty City Land Committee digital mapping system. A second trial, which was not envisaged in the Staff Appraisal Report (SAR), was conducted for Astana City. In this experiment new photography was acquired and photomaps were produced. These were then used as the base for plotting boundary information. A complete set of index maps was thus produced. The contract highlighted numerous cases where the original cadastre information was in error and it was possible to correct the faults before legal disputes arose. A very useful by-product of the Astana trial was the demonstration of the usefulness of the mapping for City authorities for their general information and planning in all other departments. This trial clearly showed the best future methodology. It has been adopted and already other cities outside the pilot have adopted the methodology. - 5 - Many settlements had no maps of any sort or maps that were extremely old. It is expensive to produce new maps and as there are very few transactions in smaller towns and settlements, it is difficult to justify the expense. A third set of trials was carried out with scanning existing aerial photography and producing a photo mosaic in which properties could be uniquely identified and cadastre identifier numbers issued. This provided a basic cadastre map at very little cost and also information for local administrations. These settlement plans were also greatly appreciated by both the Land Committee offices and local administrations. 4.2 Outputs by coinponents: 1. Institution Building (a) The Project Implementation Unit. The Project Implementation Unit carried out its basic functions (accounts and record keeping, procurement, and monitoring) in a satisfactory manner. There were significant delays with the procurement of information technology (IT) due to difficulties in finalizing the technical specifications, the processing and clearance requirements of the Committee for Extemal Loans (CEL), and the complications of the ICB procedures. The staff and consultants dealing with legislation and registration performed their tasks with great success. Many of the weaknesses of the Project with regard to cadastre and information system development (see comments below) were directly a result of inadequate work, inadequate consultant input, poor management and failure to act on issues and weaknesses reported in the Aide Memoires. The PIU functioned for the major part of the Project without a Director and following the move of the Government to Astana, the Ministry of Justice did not provide the necessary oversight and supervision. A criticism from the major registration and cadastral offices was that their opinions were not taken into account when equipment purchases were made or software developed. This is more relevant to the larger offices where equipment needed to conform to existing systems and software functionality is more critical. Criticism of the equipment and software provided included: * computer and periphery equipment were 'old stock' by the time they arrived, they lacked local support; and supplies were expensive or only available extemally (this criticism only came from Almaty City offices); * the photocopying machines were of poor quality and constantly break down; * the equipment could all have been bought more cheaply locally and would have the benefit of local support; * there was no, or little, notice taken of user requirements when the software was under development; and * software delivered was untested and needed considerable work to make it usable, the developers were no longer available to give assistance once the PIU disbanded. Fumiture supply has been much appreciated and is of good quality. The information technology that was to be produced under the project was only marginally successful. A system for registration was produced and is in use in most rayon offices, but there is no graphic component developed. Very little of the high-end relational database management or GIS software purchased has been used. The Technical Oversight Group responsible for development of the IT system were extremely slow in - 6- developing the software and took very little notice of the user's requirements. Development was expected to take a year but in fact took the complete length of the project and was completed without the necessary functionality, testing or manuals. No linkage between the registration offices and Land Committee offices was developed. The purpose of the Project was to set up the system for registration of rights. When the former BTI offices were transferred to the Ministry of Justice to serve as the basis for the registration system, they retained their earlier functions, including physical inventory of residential structures, and appraisal. The software developed for the Project was designed to handle registration of rights and not the other functions of the former BTIs. This lack of additional functionality and other perceived weaknesses with the software developed by the Project resulted in the Almaty City registration office keeping the software they had developed in-house. All other offices use the software and are fairly satisfied with it. The Almaty City Land Committee retained their own software and have numerous packages of Oracle database and GIS software that have not been utilized. The Astana City Land Committee have made good use of the Oracle and GIS software provided, but had to develop their own applications. Input from the PIU in this area was of little help. The PIU was designed to bridge the gap between the Ministry of Justice and the Land Committee, with a good portion of the staff of the PIU earlier associated with the Land Committee and its related organizations. While the PIU did function as a communication link between the two agencies, the link with the Land Committee was never sufficiently strong to carry out the intended coordination functions. This was in part due to the position of the Land Committee that the PIU was not "theirs". The prime requirements of the project were achieved thanks to work completed by the registration and legal specialists of the PIU and excellent work by senior staff in the individual registration offices. Overall, the work of the PIU and the TOG was only marginally satisfactory. (b) Technical Assistance Assistance in legislation and registration was critical to success of the project and overall achievement of the objectives. Legal and registration advice played a critical role in ensuring that training, registration procedures and practice were of a high quality. This was the primary activity necessary to meet the overall objectives of the project and it was extremely successful. Four different persons were used for cadastral assistance, but none achieved the required results. This was in large part due to the fact that they had little support or cooperation from the Land Committee, and the PIU was unable to effectively bridge this gap. When issues were identified by the consultants, these were not acted upon either by the PIU or the Land Committee, and many good recommendations were ignored. A final consultancy to help prepare cadastral standards was completed and accepted, however at the close of the Pilot Project they were still stuck in the process of bureaucratic clearance. Technical assistance for registration was extremely effective and was largely responsible for ultimate success of the project, but the consultant team as a whole must bear some of the responsibility for not providing sufficient project management guidance to the PIU and not more actively addressing the problems associated with the cadastral and IT activity. (c) Training Programs Registration training was provided in over 30 seminars and other classes with full involvement of the consultants and the PIU. Training was comprehensive and successfully enabled all registration offices to establish and operate. A comprehensive registration manual was provided for continued reference material and guidance. The principles and courses were used when the Committee for Registration Services - 7 - implemented training across the country. Registration software has been installed throughout the rayons of Almaty Oblast and in a few of the rayons in Akmola Oblast. Adequate training has been given to operate the software. Training in cadastre did not start until the latter part of 1998 and then was short and inadequate. Most training for Land Committee staff has concentrated on the use of survey equipment or GIS software but the procedures for operating a cadastre office and maintaining cadastral maps and archives have been largely ignored. No manual has been produced for these functions. Survey equipment training was also too brief. It was generally provided by suppliers and not subject specific (i.e. related to cadastre). Most users in rayons could not operate the survey equipment at all when they returned to their bases. Some of the larger offices and Oblast offices do make good use of the equipment, but rarely has the full capacity of the equipment been utilized, especially with regard to the software provided to automate data gathering, computation and plotting. (This was only in evidence in Astana City and was due to the innovation and self-study of the staff concerned). This is not considered a serious issue as the Land Committee has realized the problems and better use has been made of the equipment over the last year. The leaming process continues and the Land Committee has the resources to fully utilize the equipment. GIS and RDBMS training has been given, but there has been very little use of any GIS software in the country. In all, 301 person-courses have been conducted covering all aspects of the software and system management. The courses were generally too brief and follow-up courses are needed. GISKhAGI and the Astana City Land Committee offices are making some use of their GIS capacity, but not to its full extent and a much less expensive package could have done the same work. Astana City have the commitment, resources and ability to make good use of the equipment and software provided, but additional courses in Oracle and ArcInfo should have been provided to get maximum benefit from such expensive software. By far the majority of the $620,000 spent on GIS software has been unutilized. Again, the deficiencies have been realized by the Land Committee and there are plans to make better use of the software. However, if there is no follow-on project it is not clear how this will be accomplished. Training equipment and cadastre courses were established at Schuchinsk in Akmola Oblast during the project, but have now been removed to Astana and the equipment is being used in daily production work. The Land Committee does not have the funds to continue the training even though they realize its importance. In Almaty the cadastre training centre at GISKhAGI remains and continues to conduct courses. The two training centres for registration in Astana and Almaty are still operational and well utilized. Training in registration was highly satisfactory, but training in cadastre and GIS was unsatisfactory. 2. Establishment of the Registration System (a) Establishment of Registration Offices The registration offices have been successfully established throughout the pilot project sites. Both the registration and Land Committee offices have been renovated, provided with furniture and equipment, and operate in a modem and comfortable environment. Staff morale and operating procedures have been greatly improved with this assistance. -8 - * S491,600 was expended on furniture and photocopiers. These are a minimum requirement even for small rayon offices that work on a paper base and have made operations possible throughout the Pilot area. * Renovations were undertaken using Government counterpart funds, with the goal of co-locating the registration and Land Committee offices where possible, but not all offices under the pilot project were renovated. This is a problem more generally related to access to government counterpart funds throughout the project, which became a particularly severe problem from the latter half of 1998 on. * $415,700 was expended on survey equipment (GPS and Total Stations). This equipment is now generally put to good use, (there was a long 'lead time' before the equipment was effectively used because training was inadequate). The equipment has enabled the Land Committee to perform more cadastral surveys and more accurate cadastral survey work. Some of the smaller rayons received the equipment, but have not been able to use it. * $1,656,700 was expended on computers and ancillary equipment. This equipment is generally put to good use. The majority of the pieces are used for general office procedures. Some of the smaller rayons received the equipment but have not been able to use it. * $748,800 was expended to purchase RDBMS and GIS packages. Very little of this is in use and it is probable that much simpler and cheaper packages could have performed the same tasks. The Astana City Land Committee, the two Oblast Land Committee centres and GISKhAGI have made some use of the software, but by far the majority of this expenditure has not been utilized. * $295,900 was expended on mapping and mapping equipment. This has been valuable work and more could easily have been spent. However, results of trials were not achieved until fairly late in the project and there was insufficient time to expend more in these areas. In all $3,608,711 was expended on the above goods. This was nearly $2 million less than budgeted. The savings mainly accrued from the numbers and costs of computer equipment. The registration offices have the income and resources to maintain and replace equipment and facilities as they are needed. Unfortunately this is probably not true for the Land Committee and sustainability of Land Committee services is an issue that needs to be addressed. Manual linkages between the registration and Land Committee offices have been created, and there are procedures that have been developed to sustain and improve on those links. The links are not automatic or foolproof and could be further improved. It is still possible for clients to obtain State Akts for land and other documents at the Land Committee, but fail to register their rights in accordance with the law. During implementation of the Project, the Bank has proposed establishment of obligatory linkages between the work of the Land Committee and registration offices. For example, that the Land Committee would not be allowed to issue final versions of documents until the rights in question had been duly registered. These recommendations have not been acted upon by Government. Notaries are required to ensure that registration at the registration offices has occurred before notarizing a second transaction, but there have been mistakes and the system does not pick them up. There are cases where cadastre numbers are duplicated or where the same property has more than one number, but these are located by the registration software and rectified when registration occurs. -9- Committeefor Registration Services (CRS) When the project commenced the Ministry of Justice (MOJ) had no offices or capacity to fulfill essential registration services. Shortly before the project commenced they took over the BTIs, and have since converted them all into registration offices, while they retain other functions of the former BTIs. In the larger cities, these offices have allocated space on their premises to notarial services, and also provide legal advice. The project concentrated on the establishment of registration offices in Almaty and Akmola Oblasts and the cities of Almaty and Astana, however, the Committee for Registration Services (CRS) have used the regulations, procedures, training schemes and manual developed under the Pilot to establish a registration system throughout the country. A national CRS has been established during the project period and Oblast level affiliates of the CRS have been established. These offices support and direct the various city and rayon offices within the Oblast. Initially there were 34 rayons within the two Oblasts, but there was some amalgamation of Oblasts and some amalgamation of rayons. Taldykorgan Oblast was included within Almaty Oblast and part of Kochetau Oblast was included within Akmola Oblast. This increased the area covered by the project. By the end of the project a national headquarters, Oblast offices in Almaty and Kochetau, City offices in Almaty and Astana and 39 rayon or city offices were renovated, furnished and equipped. All pilot offices for registration received training and a comprehensive manual was distributed. An automated registration is in use in most offices and good services at a reasonable price are provided to the public. The offices began by using paper technology and the regulations require paper records. However, as most offices are now automated the paper records are often superfluous and unused. In Almaty it is a great expense to keep updating and maintaining paper records for no apparent purpose and the requirement should now be removed from the regulations. Various supporting forms and documents had to be designed for the registration system to flmction effectively. These includes regulations on fees, the form of the register, cadastral numbering and the allocation of land parcels and condominium land parcels. In total more than 20 government and department normative documents were developed and approved. These included schemes, agreements, regulations and the comprehensive and very important registration manual. This work has progressed very effectively and enabled an efficient and effective registration system to be developed. Work has continued throughout the project on developing a full Law on State Registration of Rights to replace the Decree of the President of the Republic of Kazakhstan with a Force of Law "On State Registration of Real Estate Rights and Transactions" dated December 25, 1995. The new draft Law on Registration has not received adequate support from the Ministry of Justice in terms of submitting it to Parliament for consideration. After a long period of delay, it was placed on the agenda of the Parliament not by normal channels of Government submission, but by action of the Parliamentary deputies themselves. It is still awaiting action by the full Parliament. The CRS is financially self-sustaining and appears to have a secure and sustainable future. Although the CRS is not a profit organization it has made a reasonable profit in each of the last four years. The work under this section is highly satisfactory. Land Committee offices Most of the rayon Land Committee offices have been provided with base maps, and cadastre blocks have - 10 - been defined and plotted on these maps. Some of the rayon offices do not keep information for rural lands as this is managed at the Oblast level. All rayons maintain maps for the settlements, issue cadastre parcel numbers, print State Akts for land and provide a customer service facility. Some of the smaller rayons were not given survey equipment and do not undertake surveys. Although there is some justified criticism of the way in which cadastre maps are maintained and archived (see below), there has been a great improvement in services to clients and coordination with the registration offices during the course of the project. Land Committee offices existed across the country prior to the Pilot Project. They are still budget-financed and are severely underfunded for the services they are expected to perform. The Project has emphasized the transfer of functions from the oblast to the rayon level. This has improved customer service. The rayon Land Committee offices are now generally located in the same building, or very close to, registration offices and this has helped with coordination of activity and the prevention of duplication of records or records that contradict each other. Offices have been renovated, furnished, equipped and now utilize unique cadastral numbering systems and automated State Akt issuance software. The provision of computers, survey equipment and office equipment has had a marked effect on the quality of service provided to the public. Cadastre index maps are required to support the registration activity and to ensure that parcels are not duplicated, do not overlap or are improperly identified. The underfunding mentioned above and a reluctance to accept new procedures has resulted in a service that is expensive to the public and generally (there are some notable exceptions) does not provide adequate index maps. The index maps are often of poor quality or on materials that are not durable, properly archived or indexed. The proposed Roll-Out Project would include more base mapping and index mapping than was possible in the Pilot, allowing these problems to be rectified. The linkage between the CRS and the Land Committee offices One of the objectives of the project was to demonstrate how Land Committee and registration offices could be linked on line to: ensure that all land parcels were registered; ensure conformity of records; have rapid access to each other's database for updates of information or dealing with enquiries and disputes; and make operations simpler, more convenient and more efficient for the clients. This has not been achieved in any location and this aspect of the Project must be considered unsatisfactory. (b) Database Management Practices This sub-component was adversely affected by delays in production of the software, the lack of a graphics module for the software and failure to link the cadastral and registration data. These have been referred to above. Database management is now the responsibility of Oblast registration offices or the City registration offices of Astana and Almaty. Twenty-three people attended a course in RDBMS administration and 30 people attended courses on network and system administration. The courses were considered useful but insufficient. Each of the Oblast and City offices have suitable system administrators. Although there are existing system administrators and a database management system in each office, the system does not have all the functionality that was required under the project. Thus, this sub-component is only marginally satisfactory. 3. Map Production - 11 - The pilot project did not intend to produce maps, only to identify needs and the methods for production. Trials were conducted as outlined in section 4.1 (ii). This has resulted in a satisfactory methodology being developed and a clear direction for future mapping activity. Plans for the Roll-Out Project include a full plan for new base mapping, index mapping and the use of alternative methods where the cost of new mapping cannot be justified. The survey equipment necessary to augment the mapping has also been detailed. GISKhAGI have benefited from the equipment supplied and the experience gained in the Astana contract work. After several years of under-employment and the danger of closing down altogether they are now confident that they can continue activity and supply services to clients. The samples produced from the Astana mapping and settlement photomaps are being used for marketing their products and they have received many orders for similar work. They have already produced maps for Pavlodar City, which were paid for by the city budget, and are producing settlement plans for Pavlodar Oblast. The Astana office of GosNPCzem, a state enterprise affiliated with the Land Committee, is producing similar maps and services for North Kazakhstan Oblast cities and settlements, also for profit. Many other clients are in the process of locating funds for similar services. This is a direct result of the Pilot Project. GISKhAGI are also providing the Almaty based training, which continues, and they are now in the position to benefit from the additional equipment and mapping contracts envisioned under the Roll-Out Project. An issue that arose during the project concerned the parcel numbering for condominiums. This requires agreement from city authorities, participation from residents and survey of the boundaries. This work is required to help establish condominium associations for the maintenance and management of common areas and for providing a cadastral number for registration of apartments or other units within a multiple-ownership block. This issue requires attention during the Roll-Out project and has been fully planned and included within the implementation plan for that Project. 4.3 Net Present Value/Economic rate of return: not applicable 4.4 Financial rate of return: not applicable 4.5 Institutional developmnenit impact: The project has had a major institutional development impact. Not only were the Republican CRS, and oblast and rayon registration offices established in the regions included in the Pilot Project, but such offices have been established nationwide. A comprehensive procedure manual and supporting legislation developed under the Project assist them in their everyday operations. The example set by the Pilot Project has been used by the CRS to establish the remaining Oblast offices in the country. Rayon and city level registration offices in the Pilot area have been transformed into efficient and effective offices providing a good service to the community. Land Committee offices have also been greatly assisted. The equipment, training and systems developed under the Pilot Project have helped to create a more modem and effective service in all Pilot rayons and cities. The development is hampered by lack of funds to build on the improvements or to spread the effects across the country. - 12 - 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control oJgovernment or implementing agecvy: The Russian financial crisis of August 1998 had a detrimental effect on the economy in general, and real estate prices and investment in particular. Similarly, the economy was negatively impacted by low energy prices during the middle of the Pilot Project. Although there was growth in real estate activity during this time, it would probably have been greater if it were not for these problems. A revised draft Land Code was prepared with the participation of the legal consultants to the PIU that would have granted greater economic rights in agricultural land, particularly through the introduction of sales markets of such land. This draft was submitted to Parliament, but had to be retracted following severe political criticism of it by some factions of Parliament and various NGOs. While the rural economy remains depressed for a large number of reasons, adoption of this more pro-market legislation would have been a step in the right direction. 5.2 Factors generally subject to government control: Project success was largely a result of allowing the registration offices to be financially autonomous and thus be in position to recruit good quality senior management and to support office operations. The dependence of the Land Committee on budget funding made it impossible for them to provide the level of support mapping required for producing registration maps and had an impact on their ability to fumction in accordance with the plan for the Project. Govenmment failed to respond in a comprehensive manner to warnings repeated in supervision mission Aides Memoire conceming the lack of effective coordination between the Land Committee and registration offices, particularly the lack of a guaranteed link between maintenance of the land cadastre and the records in the registration system. Counterpart funding ceased in mid-1998. This effectively halted renovation works and made many activities impossible to complete. 5.3 Factors generally suibject to implementing agency control: Over the course of project implementation, four different persons were appointed as Director of the Committee for Registration Services of the Ministry of Justice. The position of Head of the PIU was left vacant for most of the Project, with limited control exercised over the functioning of the PIU by the CRS. This situation became particularly acute following the move of the CRS to Astana in 1998, while the PIU remained in Almaty. Accountability for day-to-day functioning of the PIU from this point on was very limited. The CRS and PIU took insufficient action on a number of important issues raised in the Aide Memoires, particularly concerning simplification of procedures associated with transactions, formulation of appropriate cadastral standards and operating procedures, and shortcomings in the development and implementation of the automated aspects of the Project. Much of the loan was earmarked for implementation and support of the automated registration system. The system itself was very late in production and large amounts of software were purchased that remained unused, because the system was not ready and training not completed before the project closed. 5.4 Costs andfinancing: During the first half of the Project, counterpart financing was strong, and a good deal of office renovation work was carried out. From roughly mid-1998 on, counterpart financing from the budget was radically - 13 - reduced, to the point where the Government's share of incremental operating costs was not financed. Budgetary support to the Land Committee also declined during the life of the Project. Substantial Government contributions in the form of premises and staffing of the registration offices were financed through collection of fees for service. Due to declining prices for automated equipment, the elimination of the Ministry of Construction and architects' offices from the Project, and scaling back the IT capacity to be supplied to low-volume rayons, substantial savings were recorded in use of Loan funds in comparison with the appraised values. The Bank informed Government of this situation, proposed consideration by Government of cancellation of some of these savings, and agreed to proposals by Government to finance additional Project activities, primarily training of staff from outside the Pilot Project regions, producing new base maps for Astana, and undertaking testing of some additional cadastral mapping methods. 6. Sustainability 6.1 Rationale for sustainability rating: In operational terms, the registration system is firmly established with operational procedures defined in the registration manual and legislative changes embodied in the draft revised Law on Registration, currently being considered by Parliament. Continued efforts will be required to assess performance of the registration offices and provide follow-up training as necessary. For the system to function more effectively, greater effort will be required to coordinate with notaries and other professionals involved in immovable property to ensure that unnecessary duplication of functions is eliminated and that information flows smoothly in a manner to support the further development of markets in immovable property. Continued lack of direct coordination between the land and legal cadastres could lead to increasing discrepancies over time tha.t will impact the functioning of the system of registration of rights. While there has been improvement in this area during the latter half of the Pilot Project, there is still the possibility of developing dual systems for treating rights in land -- particularly in rural areas -- one official in the registration offices and one unofficial but tacitly functioning on the basis of documents produced by the Land Committee offices. The service they currently provide is not sufficient to ensure that there will be an effective cadastre and is !Icely to lead to legal disputes over boundaries and ownership. This situation needs to be addressed, and the ability of the Land Committee offices to carry out fully and effectively their functions as stipulated in the Presidential Decree with force of Law of December 25, 1995 and in the draft revised Law on Registration, must be ensured. In financial terms, the registration offices are fully self-financing and have a secure future providing services to a growing real estate market that relies on their services. This should continue so long as the registration offices can retain their self-financing status. It should be noted that there is a proposal to shift to budgetary funding. The success of the project and the system as a whole has been highly reliant on the quality of personnel that the registration offices have been able to hire, especially senior management and IT specialists, and the investments they have been able to make. If their status is changed to a government funded enterprise they will most likely lose these people and it could result in collapse of the system. This would be detrimental to the investment in real estate and probably entail loss of revenue to the Government. With the current financing arrangements, it is unlikely that Land Committee offices will be able to address problems identified during implementation of the Pilot Project and will have a difficult time sustaining the level of technology provided under the Project. The Land Committee are capable of performing the task and should either be given sufficient budget to operate, which is unlikely under the current financial strictures, or, preferably, be merged with the CRS. Merger with the CRS would help to ensure fnancial sustainability - 14 - of both services and ensure the linkage that has proved difficult to implement under the Pilot Project. 6.2 Transition arrangement to r egular operations: Activity of the Pilot Project was wound down during the last year of its implementation. The PIU was abolished and its functions transferred to the staff of the CRS. While this was a positive step in more directly integrating the functions of the Project with those of the implementing agency, there is a danger that the unique expertise on registration of rights that was developed as part of the PIU may no longer be drawn upon by the CRS. Govemment should be alert to potential problems in this area. The technical assistance provided under the Pilot Project was justifiably concentrated in the first half to two-thirds of implementation, with limited and targeted intervention in the last year of the Project. The self-financing status of the registration offices should allow them to address basic operating requirements of the system, though not necessarily to address in a timely manner weak aspects of how the registration system operates. 7. Bank and Borrower Performance Bank 7.1 Lending: The Bank invested a good deal of effort and expense in 1994 and 1995 in assisting in building a consensus within Kazakhstan of the importance of rights in immovable property for the functioning of a market economy and how those rights should be handled. This included seminars held in Kazakhstan and study trips to selected countries in Europe, including Albania and the Netherlands. The Bank also provided input, under a tight time constraint, to preparation of the Presidential Decree with force of Law "On State Registration of Rights and Transactions in Immovable Property" of December 25, 1995. Prior to undertaking preparation of the Project, the Bank insisted that two prior conditions be satisfied. Namely, that a viable legislative basis for registration be put in place (which occurred with issuing of the above-mentioned Presidential Decree), and that institutional responsibilities for running the registration system be decided. Once this latter question was decided, the Bank moved promptly to work with the Government to complete preparation and appraise the Project in the course of roughly 6 months, thereby responding to the requirements placed before Government by the President to accelerate implementation of the Decree. Quality of the Project at entry could have been enhanced with greater input from financial management and procurement specialists. Overall, Bank performance in the lending phase is rated as satisfactory. 7.2 Suipervision: The Bank undertook regular supervision missions for the Project, in the latter stages in conjunction with discussion with Government of the Roll-Out Project. The Bank paid particular attention to the operation of the registration system, linkages between the land and legal cadastres, the implementation of the automated systems, the linkage between the registration system and transactions in immovable property, and the impact of the Project on economic development of the country. Frequent visits were made to rayons included in the Project to assess the situation on the ground. Mission findings were carefully enumerated in the supervision Aides Memoire, and when necessary issues were brought to the attention of Government by the Country Director for Kazakhstan and/or the Resident Representative. The Bank took the lead in reducing unnecessary expenditures in the automated systems, when additional information came to light after appraisal on capacity requirements at the rayon level. An area where the Bank should have done more - 15- during supervision was in procurement. While there was technical assistance available, and it was used, more active involvement of Bank staff in procurement issues would have been beneficial. There was also some uncertainty about the process of filing withdrawal applications with the Bank, which was addressed during the course of Project implementation. OED reviewed the quality of supervision for the Project for 1999 and found it to be satisfactory. Bank performance in the supervision phase is rated as satisfactory. 7.3 Overall Bankperformance: The Project has met its output and developmental indicators, and some of its important benefits have been spread beyond the Pilot Project regions to the rest of the country. The Bank demonstrated flexibility when a change in Project design was warranted. The Bank's established procedures for procurement of information technology thorough ICB contributed to problems experienced in this area during Project implementation. Overall Bank performance is rated as satisfactory. Borrower 7.4 Preparation: The Government was faced with a challenging task of addressing in a new way the issue of rights in immovable property with the transition away from the command-administrative economy. This task was handled effectively and reflected on the quality of the Borrower's contribution to the preparation of the Project. Critical pre-conditions were met first to undertake preparation of the Project (legal and administrative basis for the registration system) and then for Board presentation (solving the problem of staffing and premises for the registration offices). A Project Preparation Unit was established and included specialists linked with the Ministry of Justice, the Land Committee and the Ministry of Construction. A tripartite agreement among these three on support for the Project was signed. Project preparation could not have moved as swiftly as it did without solid commitment from Govemment. There was strong ownership for the Project in the MOJ and in higher levels of Govemnment. The major stumbling block during preparation from the Borrower's side was the proposal for an excessively costly IT program, which put technical interests ahead of the true economic and business requirements for automation for the new registration system. This point of view had to be constantly countered, though in the end it wound up having an impact on the Project (see Lessons Learned, below). Borrower performance during preparation of the Project is rated as satisfactory. 7.5 Government irnplelnentation performance: Government took the necessary measures to allow the Project to be successfully implemented. Of particular importance was the decision to allow the registration system to function on a self-financing basis, in line with the experience of most well-functioning systems worldwide. The areas where Government performance could have been stronger were counterpart financing from the budget, which was brought down to virtually nothing beginning in the second half of 1998, and resolution of inter-agency coordination issues between the Land Committee and the CRS. Overall, the Government's implementation performance is rated as marginally satisfactory. 7.6 Implementing Agency: Commitment to the Project declined within the MOJ during the implementation period. Interest from the top level of the Ministry was instrumental in getting preparation of the Project successfully completed and implementation launched. After the move of the Ministry to Astana, and the placing of the CRS on solid footing, the MOJ became noticeably less involved. The MOJ failed to take active steps to introduce the revised draft Law on Registration onto the agenda of Parliament. This declining involvement was to the detriment of the Project. The CRS generally functioned well, but control over the activity of the PIU was a particular weak point. Performance of the PIU, especially with respect to land cadastre and automation, suffered as a result. There was inadequate effort from the CRS or the MOJ to open up and maintain a - 16- stable dialogue with the Land Committee on issues of implementation of the Project. The CRS took critical steps to overhaul the management of the former BTIs and to hire office directors with professional legal training. There were also initiatives to provide legal advice, notaries services, and other related services within the premises of the busier offices. Efforts to improve the quality of service continue, with some recent advances in offices such as Almaty city and Astana. In the future, even more attention should be paid to the development of a culture of improving client service and to building linkages with other real estate professionals on a transparent and open basis. Overall, the implementing agency's performance is rated as satisfactory. 7. 7 Overall Borrower performance: The Borrower performed adequately to allow the basic output and developmental objectives of the Pilot Project to be met. The two primary obstacles keeping the Project from being more successful was the difficulty in getting different agencies to work together in an active and open manner and shortfalls in counterpart financing. The overall Borrower performance is rated as satisfactory. 8. Lessons Learned The Project confirmed a number of principles that have been demonstrated in other Bank-financed projects. Among these are the following: (1) Project quality can be enhanced by listening to clients -- In retrospect, the automated systems developed under the Project would have benefited if input from those who would eventually use the system was more actively sought and incorporated. Similarly, while the functioning of the registration offices (particularly the large urban offices) has been improving gradually during implementation, this could have been accelerated and have proceeded farther if there were a more systematic process for collecting the opinions of clients of the registration offices conceming office operations. (2) Self-financing is beneficial to the quality of the reeistration system -- Most good registration systems around the world function on the basis of fees for service. Kazakhstan has followed this example, and it has proved beneficial to the quality of the system. Those aspects of the Project that depended on financing from the budget have been significantly weaker. In the future, the Govemment should maintain careful scrutiny over the fee structure, with the aim of raising the standards for the operation of the system, reducing the costs, and commensurately reducing the fees charged. (3) PIUs need to be under the strict control of the implementing agency -- To the extent that PIUs are utilized, they need to be tightly monitored by the implementing agency with respect to the plan for implementation of the Project and day-to-day operations. If PIUs are not utilized, due weight needs to be given to the additional workload posed by the Project and sufficient additional staff hired (including consultants) to effectively get this work done. In this regard, the Government of Kazakhstan in 1999 began implementation of a policy to eliminating PIUs in favor of shifling these functions directly to the implementing agencies, where necessary supplemented by the hiring of individual consultants. In addition, there were a number of lessons leamed that are more specific to the CIS countries. Among these are the following: (4) Effective inter-agency cooperation is problematic -- Project design that depends on active, on-going cooperation among agencies is likely to encounter problems in implementation. A higher-level "charnpion" of the Project, with sufficient leverage over the agencies involved, should be identified. The use of a working level organization, such as a PIU, is not likely to be effective in this regard. - 17 - (5) A strong bias toward technology can lead to inefficient use of resources -- There was a strong tendency from the Borrower's side to push for over-specified and excessively powerful automated systems, that were inconsistent with the true business needs of the registration system, and will likely prove to be unsustainable from an economic point of view. Substantial amounts of money under the Pilot were spent on GIS software, and on hardware, that has not been utilized to anywhere near its capacity. This is a result of the strong technical tradition of the CIS region, combined with a weak business tradition. In the future, system design should be based solely on the actual practical demands, and capabilities, of end users, rather than on an abstract technical conceptualization. Lastly, conceming the design of the Project, while it was advantageous to focus on development of procedures and establishing functioning offices, with a bit more time, much more territory of the country could have been included. In fact, the benefits of the Pilot Project have been broadly shared across the country. The elements that require substantial time, and therefore a full project, are improvements to the land cadastre, further elaboration and modification of how the system operates, and improving linkages between the registration system and other organizations involved in land and real estate markets. 9. Partner Comments (a) Borrower/implenmenting agencyv: The following letters were received from the Ministry of Finance, the Ministry of Economics and Trade, and the Agency for the Management of Land Resources (the former Land Committee) conceming the Real Estate Registration Pilot Project and the draft version of this report.. Ministry of Economy and Trade Republic of Kazakhstan # 2-1322/3 May 10, 2001 WVB Resident Mission Almaty Kazakhstan Dear Sirs: I would like to thank you for having submitted to us the Project Completion Report for the Kazakhstan Real Estate Registration Pilot Project and inform you of the following: In general the Ministry of Economy and Trade agrees with the main conclusions regarding the efficiency of the implementation of the above project and with the assessment of the Bank's and the Government agencies' performance. At the same time we consider it necessary to note that in accordance with the 1999 decision of the Government of Kazakhstan the implementing Government bodies of the Republic started the process of liquidating the Project Implementing Units (PIUs). Today the consultants who carry out projects implementation enter into direct individual contracts with the implementing agencies. The implementing agencies, in its turn, allocate a certain number of it staff to provide project management. - 18 - In view of this, the conclusion that PIUs need to be under the strict control of the implementing agency made in part 8 of the PCR, in our opinion, should be modified in accordance with the above comment. We would also like to note that certain comments have been made by the Ministry of Finance and the Land Resources Management Agency of the ROK (see attached letters). For a more effective implementation of the roll out project included in the World Bank CAS for Kazakhstan for FY 2002 it would be needed to maintain closer coordination with the Ministry of Economy and Trade in the process of this project preparation and implementation. Sincerely, A.Andruschenko Vice-Minister - 19- Ministry of Finance Republic of Kazakhstan #32-3-3/5367 April 26, 2001 The Ministry of Finance Republic of Kazakhstan The Ministry of Finance of the ROK, as requested in the letter of B.Utlkelov, economist of the WB Resident Mission in Kazakhstan, as of April 4, 2001, has reviewed the Project Completion Report for the Kazakhstan Real Estate Registration Pilot Project (PCR) and would like to inform you of the following: In part 4. Achievement of Objective and Outputs, Institution Building (a) The Project Implementation Unit in the following sentence " There were significant difficulties...." we propose to take out "the bureaucratic interventions of the Committee for External Loans". The interventions of the presently liquidated Committee for External Loans in the process of project implementation and procurement procedures were immediately connected with its functions and responsibilities. In view of the above, the MOF considers that the PCR conveys realistic information on the project implementation and its completion and does not have any comments in this regard. B. Zhamshiev First Vice-minister - 20 - Land Management Agency Republic of Kazakhstan April 28, 2001 Re: The Letter of the WB as of April 4, 2001 re. PCR for Pilot Registration Project Department of Investment Policy Ministry of Economy and Trade Republic of Kazakhstan The Land Management Agency of the ROK The Agency for Land Resources Management has reviewed the Project Completion Report for the Real Estate Registration Project and would like to inform you of the following: The objective of the Pilot project to establish, on a pilot basis, a national registration system of real estate rights and transactions has been achieved. The system of real estate rights registration has resulted in increased sales, lease and mortgage transactions involving real estate (including transactions with land plots). The process of implementing the pilot project involved equipping of the registration offices of the Ministry of Justice and regional (city) committees for land management in Almaty, Akmola oblasts and the cities of Almaty, Astana. At the same time in the process of the Pilot implementation digitization of maps has not been completed as well as provision of mapping technologies for the entry of cadastral information, especially, index maps for distant rural settlements. The Mapping Component intended to produce maps including new base maps has not been implemented to the full. Still many settlements do not have updated maps and this results in the delays of the registration process and land cadastre maintenance. It should be noted that registration fees are high especially for rural areas. The cost of the preparation and the issue of the Acts for land ownership and permanent land use, in general, include real cost of verifying borders in the field and inputting land cadastre data into the automated data base. Processing and issuing of a State Act in the secondary market is carried out only at the request of land owners and users. GIS packages are used only in big cities (Almaty, Astana), and rarely ever used in oblasts and regions. It would be necessary to carry out training courses in the field because training courses were too short and were not regular enough. Territory Land Management offices in pilot oblasts received substantial assistance with equipment, furniture, staff training that formed a base for upgrading services in the field. Now it is necessary to roll out the outputs of the project nationwide. The main procedures of land records (cadastre) for registration purposes were developed on the basis of the World Bank Recommendations. At the same time efficient implementation of this work has been delayed (to a certain degree) due to the absence of land management services for oblasts and raions in many towns. There are no specialists of this kind either in rural settlements or in rural areas. It is in the settlements that major volume of work in issuing land documents is done. For this reason the implementation of the Land - 21 - Cadastre Component has lagged behind. For this reason it is necessary to increase budget financing of the land management work. The Agency is absolutely against its merging with the Committee for Registration Services of the Ministry f Justice because these agencies have different functions, objectives and mandates. Under a roll out project it would be possible to provide needed linkages between land and legal cadastre, to link a land cadastre component to the Real Estate Registration Project, and to produce upgraded cadastre maps based on the digital technologies, etc. Considering the above, the Land Agency of the Republic of Kazakhstan would support the roll out of the Pilot Registration Project nationwide taking into account already existing experience and solving hindering problems in a joint manner in the process of roll out implementation. C. Ospanov President (b) Cofinanciers: n/a (c) Other partners (NGOs/private sector): n/a 10. Additional Information None. - 22 - Annex 1. Key Performance Indicators/Log Frame Matrix Outcome / Impact Indicators: N at u Ped Ri .' PRait Elaboration of registration procedures for New Law on Registration submitted to Registration procedures have been fully nationwide roll-out. Parliament and associated procedures fully elaborated and are being implemented In all elaborated. regions of the country. New Law on Registration submitted to Parliament. Increased number of transactions in land and A 13 percent increase in the number of real estate. registrations of rights in 2000 compared with 1998. A 66 percent increase in the number of mortgages in 2000 compared with 1998. Output Indicators: Functioning of rayon/city registration offices. Automated system tested in all rayon/city All registration offices filly functional and offices. meeting the needs of dients. Paper-based system has been tested and revised. Automated system tested In all rayon/city ofices, and being used most intensively In the large urban offices. Testing of mapping techniques. New base mapping for Astana produced, Digital mapping test completed, plus testing testng of map scanning techniques for rural of the use of map overlays for producing settlements. cadastral maps on the basis of existing topographic maps, testing of map scanning techniques for rural settlements, and new base maps produced for Astana End of project - 23 - Annex 2. Project Costs and Financing Project Cost b Con onent (in US$ million uivalent) Institution Building 2.06 1.65 Registration System 7.91 4.89 Mapping 0.73 0.95 Refinance of PPF 1.50 0.48 Total Baseline Cost 12.20 7.97 Physical Contingencies 0.03 Price Contingencies 1.05 Total Project Costs 13.28 7.97 Total Financing Required 13.28 7.97 Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) [1. Wrks 0.00 0.00 0.00 0.32 0.32 I: = ~~~~~~~(0.00) (0.00) (0.00) (0.00) (0.00) 12. Goods 6.06 0.00 0.10 0.00 6.16 (6.06) (0.00) (0.10) (0.00) (6.16) 3. Services 0.00 0.00 1.89 0.00 1.89 and Training (0.00) (0.00) (1.89) (0.00) (1.89) 4. Miscellaneous 0.00 0.00 0.45 2.96 3.41 Operating Costs (0.00) (0.00) (0.45) (0.00) (0.45) 5. Miscellaneous 0.00 0.00 1.50 0.00 1.50 PPF Refinancing (0.00) (0.00) (1.50) (0.00) (1.50) 6. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 6.06 0.00 3.94 3.28 13.28 (6.06) (0.00) (3.94) (0.00) (10.00) NBF operating costs includes the value of staff and premises contributed in kind for registration. - 24 - Project Costs by Procurem Arrangements Actual/Latest Estimate US$ million equivalent) Procurwmnt Method' Expe"Wre Caftgwy Ice NCB NOB.F. Total Cost 1. Works 0.00 0.00 0.00 0.70 0.70 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 3.61 0.00 0.00 0.00 3.61 (3.61) (0.00) (0.00) (0.00) (3.61) 3. Services 0.00 0.00 1.43 0.00 1.43 and Training (0.00) (0.00) (1.43) (0.00) (1.43) 4. Miscellaneous 0.00 0.00 0.19 1.56 1.75 Operating Costs (0.00) (0.00) (0.19) (0.00) (0.19) 5. Miscellaneous 0.00 0.00 0.48 0.00 0.48 PPF Refinancing (0.00) (0.00) (0.48) (0.00) (0.48) 6. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 3.61 0.00 2.10 2.26 7.97 (3.61) (0.00) (2.10) (0.00) (5.71) " Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. D Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. ject Financing by Component (in US$ million equivalent) Percentage of ApprsJu Componlem App sti m AcuatUAlAIt Estimate --.. 8s_____________ Bank Go t_ CoF. Bask G&vL C. Bak Gov' C*F. Institution Building 2.05 0.05 1.64 0.01 80.0 20.0 Registration System 5.67 3.23 3.42 2.25 60.3 69.7 Mapping 0.78 0.95 121.8 Refinance of PPF 1.50 0.48 32.0 - 25 - Annex 3: Economic Costs and Benefits No formal evaluation of economic costs and benefits was made during the project appraisal. - 26- Annex 4. Bank Inputs (a) Missions: , , , _, _. _ , _, Stage of Pro gclN of Peron CY specalto f Petrformanc:-eRatig 2 EDBMS, I FMS etc) bnplenittion Dcvdkprnt Month/Year Count Spec_a* y Progress 'ONective Identification/Preparation Nov. 1995 3 2 economists, I cadastre specialist March 1996 4 1 economist, I registration spec., 1 cadastre specialist, I IT specialist Appraisal/Negotiation July 1996 3 1 economist, I cadastre specialist, I IT specialist November 1996 3 1 economist, I Lawyer, I operations officer Supervision April 1997 4 1 economist, I procurement, S S I training specialist, I cadastre specialist October 1997 5 I economist, I procurement, I IT S S specialist, I registration specialist, I cadastre spec. February 1998 3 1 economist, 1 procurement, I S S registration/cadastre specialist June 1998 3 1 economist, I registration/cad. S S specialist, 1 IT specialist November 1998 2 1 economist, 1 registration/cad. S S specialist April 1999 2 1 economist, 1 registration/cad. S S specialist June 1999 4 1 economist, 1 FMS, 1 S S registration/cadastre spec., I training specialist November 1999 4 1 economist, I FMS, I S S registration/cadastre spec., I training specialist February 2000 2 1 economist, I registration/cad. S S specialist July 2000 2 1 economist, I registration/cad. S S specialist October 2000 2 1 economist, I registration/cad. S S specialist ICR February 2001 2 1 economist, I S S registration/cad. specialist - 27 - (1) Staff: 1 Stg of S*dProject CycleS0 02 0-4 0: 0 i. Actl/aetsthimte: 0i 0 4:Tft ;:S: 0 _________ No0. 'Staff weeks S$C..... _T X00:........ Identification/Preparation 75.0* Appraisal/Negotiation 78.4 Supervision 229.8 ICR 35.0** Total 418.2*** * Broken out from preparation of an earlier project ** Preliminary estimate *** Does not include $51,000 trust fund resources. - 28 - Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating l Macro policies O H OSUOM O N * NA F Sector Policies O H *SUOM O N O NA I Physical O H * SU O M O N O NA O Financial O H * SU O M O N O NA Z Institutional Development 0 H * SU O M 0 N 0 NA L Environmental O H OSUOM O N * NA Social OI Poverty Reduction O H OSUOM O N * NA Z Gender O H OSU*M O N O NA 0 Other (Please specify) O H OSUOM ON * NA O Private sector development 0 H 0 SU * M 0 N 0 NA O Public sector management 0 H * SU 0 M 0 N 0 NA O Other (Please specify) 0 H O SU O M 0 N * NA - 29 - Annex 6. Ratings of Bank and Borrower Performance (HS-=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bank performance Rating I Lending OHS OS OU OHU F Supervision OHS OS OU OHU Z Overall OHS OS O U O HU 6.2 Borrower performance Rating • Preparation OHS OS O U O HU • Government implementation performance O HS O S 0 U 0 HU Z Implementation agency performance OHS OS O U O HU Z Overall OHS OS O U O HU - 30 - Annex 7. List of Supporting Documents (1) Staff Appraisal Report (No. 15994-KZ) -- Real Estate Registration Pilot Project, March 6, 1997 (2) Aide Memoires of supervision and the ICR missions (3) Annual auditor's reports for the Project (4) Report on the pace of implementation of the Real Estate Registration Pilot Project, March 1999, prepared by the PIU (in Russian) (5) Real Estate Registration Pilot Project Social Assessment -- Summary Report, June 1999, Bilesim International, Almaty (6) Report on Completion of Project Implementation, February 2001, prepared by the Committee for Registration Services of the MOJ (7) Project Implementation Plan for the Real Estate Registration Roll-Out Project, prepared by the PIU and updated by the Committee for Registration Services of the MOJ - 31 -