The World Bank Report No: ISR5984 Implementation Status & Results Armenia Municipal Water and Wastewater Project (P063398) Public Disclosure Copy Operation Name: Municipal Water and Wastewater Project (P063398) Project Stage: Implementation Seq.No: 16 Status: ARCHIVED Archive Date: 03-Jan-2012 Country: Armenia Approval FY: 2004 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Sector Investment and Maintenance Loan Implementing Agency(ies): Contract Monitoring Unit, Armenia Water and Wastewater Company Key Dates Board Approval Date 04-May-2004 Original Closing Date 28-Feb-2009 Planned Mid Term Review Date 31-Oct-2006 Last Archived ISR Date 03-Jan-2012 Effectiveness Date 11-Nov-2004 Revised Closing Date 28-Feb-2012 Actual Mid Term Review Date 02-May-2007 Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective is to improve (i) the quality of services provided to cusotmers in AWSC's service area; and (ii) the sustainability of AWSC. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost AWSC MANAGEMENT STRENGTHENING 8.00 AWSC INVESTMENTS 6.60 INVESTMENTS IN BRANCH SYSTEMS 12.20 Overall Ratings Previous Rating Current Rating Satisfactory Satisfactory Public Disclosure Copy Progress towards achievement of PDO Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Implementation Status Overview 1. Overall implementation has been satisfactory. Disbursements as of February 7, 2012 amounted to US$19.84 million, out of the US$ 20 million Additional Financing, or 99.2% of the credit. All investments have been completed on-time. Ongoing activities to be financed by the Project are management fees for the months of January and February, 2012; and the technical and financial audits of the Project. 2. Key performance indicators have met or exceeded their end-project targets: Page 1 of 7 The World Bank Report No: ISR5984 - The average duration of water supply increased from 6h/day at the baseline to 15.02 h/day (target: 15h/day). - Bacteriological safety compliance increased from 93% (baseline) to 98.2 % now (target 98.1%). - Billing on the basis of metered consumption increased from 40% (baseline) to 82.2% now (target: 77.8%). - Percentage of cities with minimal daily hours of water supply service increased from 68% (baseline) to 94% now (target: 90%). Public Disclosure Copy 3. The management contract included 22 indicators that are being monitored. During the life of the Project these indicators have been showing good progress. According to the Quarterly Report issued by the Operator, as of December 31, 2011, all performance indicators met or exceeded their end-of-Project target values. The PDO indicators and Management report offer strong evidence that the PDO will be met by the closing date. 4. The independent technical auditor will assesses the operator's annual performance upon completion of the contract year. The independent review is in progress, and the Government and the Bank expect to receive the report by end-February 2012. This assessment will enable the counterparts and the Bank to track the performance of the management contractor during the seventh year of the contract. 5. In December 2011 the Government requested, and the team processed, a second level restructuring to extend the closing date for the Additional Financing by two months and to reallocate the credit proceeds. Additional resources were allocated to the consulting services category from savings generated from SDR/USD currency exchange. The intention was to cover the management fee for the operator, SAUR, (for October-December 2011), and to prepare a feasibility study for the rehabilitation of the water networks in Masis and Ayintap. The latter is the first civil works package to be financed under the proposed Municipal Water Project, a repeater Project under preparation. The Bank provided its no- objection to the Request of Expression of Interest to prepare the detailed design for Masis. Furthermore, the counterparts informed the team that in the interest of time and to prepare a good quality design acceptable to the Bank, the Government would fund this activity using retroactive financing. Hence, savings from the Project would be used to pay the management fee to the operator for the months of January-February, 2012. 6. Improving infrastructure service delivery has been a central theme in each of the past CASs throughout the life of the Project, including the current CPS for FY2009-2012. The Project objective was relevant to and consistent with the development priorities of the Government as reflected in the PRSP (2005) and Sustainable Development Program (2008). The Project objective was consistent with the Armenia CAS (2001), a main goal of which was financial and technical rehabilitation of Armenia's water and wastewater systems through (i) improving utility financial discipline with better cash generation and expenditure management, (ii) improving water and wastewater services and rehabilitation of sector infrastructure and (iii) increasing efficiency of water distribution and use. 7. Project activities were carried out according to Government and Bank priorities for the sector. Bank safeguards policies and technical, economic, financial, social, and institutional considerations were adequately addressed during Project preparation and appraisal. The design of the Project reflected lessons learned from implementation of another Bank- financed project in Yerevan water utility, enrolling public private partnership in managing the water resources. Private sector participation was determined to provide the most feasible solution and proved successful. The performance based management contract introduced sound technical solutions under the Project which led to increased efficiency of the system. Considering the significant progress that has been made under the AWSC management contract from 2004 until December 2011, a more advanced PPP arrangement, Enhanced Management Contract, is planned under the new repeater project with an international private operator, with increased sector performance. 8. Project relied on reliable baseline data, diligent monitoring by the Project Monitoring Unit and by independent Public Services Regulatory Commission for collecting and reporting Public Disclosure Copy data on outcome indicators. During supervision, the task team closely coordinated with other donors involved in the sector. The implementation issues were discussed with the Government counterparts in a constructive manner and appropriate action plans were developed and agreed with the Government. During the life of the Project Government demonstrated strong commitment to achieving development objectives and provided substantial support during preparation and implementation. There has been close coordination and dialogue between Government counterparts and the Bank at all times. 9. The Bank continues preparation of the Project Implementation Completion Report (ICR), the objective of which is to assess (a) the degree to which the project achieved its development objective and outputs as set out in the project documents; (b) other significant outcomes and impacts; (c) prospects for the project's sustainability; and (d) Bank and Borrower performance, including compliance with relevant Bank safeguard and business policies. Furthermore, the Borrower confirmed that it initiated its evaluation of the implementation of the Municipal Water and Wastewater Project, a cost benefit analysis, an assessment of the Bank and the Borrower's performance, and the extent to which the purposes of the credit were achieved. Page 2 of 7 The World Bank Report No: ISR5984 Locations Country First Administrative Division Location Planned Actual Armenia Vayots' Dzori Marz Yeghegnadzor Public Disclosure Copy Armenia Vayots' Dzori Marz Vayk' Armenia K'aghak' Yerevan Yerevan Armenia Aragatsotni Marz Talin Armenia Geghark'unik'i Marz Martuni Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Increased weighted average of the daily hours Text Value 6.04 hours (measured value) 15.02 15.00 hours of drinking water service. Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 Comments End-of-project target met Increased weighted average water Text Value 93.8% (measured value) 98.2% 98.1% bacteriological safety compliance. Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 Comments Exceeded end-of-project target Increased percent of individual subscribers Text Value 40.2% (measured value) 82.2% 77.8% billed on the basis of metered consumption. Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 Comments Exceeded end-of-project target Decreased company working capital. Text Value 194.9% (measured value) 117.8% 118% Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 Public Disclosure Copy Comments Exceeded end-of-project target Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Increased percentage of water disinfected. Text Value 60.9% 97.3% 95.0% Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 Comments Exceeded end-of-project target Page 3 of 7 The World Bank Report No: ISR5984 Decreased total staff per 1000 individual Text Value 9.45 6.0 6.80 subscribers. Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 Comments Exceeded end-of-project Public Disclosure Copy target Decreased total cost of regular and contracted Text Value 70.2% 59.3% 60.0% staff as % of collected revenues. Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 Comments Exceeded end-of-project target Decreased electricity consumption in KWH/m3 Text Value 0.43 KWH/m3 0.26 KWH/m3 0.30 KWH/m3 (efficiency). Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 Comments Exceeded end-of-project target Improved community water points constructed Number Value 0.00 259505.00 259505.00 or rehabilitated under the project Date 03-Jan-2005 31-Dec-2011 28-Feb-2012 Comments connections connections connections End-of-project target met Piped household water connections that are Number Value 0.00 99938.00 99938.00 benefiting from rehabilitation works undertaken Date 03-Jan-2005 31-Dec-2011 28-Feb-2012 by the project Comments connections connections connections End-of-project target met Number of water utilities that the project is Number Value 0.00 1.00 1.00 supporting Date 03-Jan-2005 31-Dec-2011 28-Feb-2012 Comments AWSC AWSC AWSC Number of people in rural areas provided with Number Value 0.00 34748.00 34748.00 access to Improved Water Sources under the Date 03-Jan-2005 31-Dec-2011 28-Feb-2012 project Comments inhabitant inhabitants inhabitants End-of-project target met Number of people in urban areas provided with Number Value 0.00 285055.00 285055.00 Public Disclosure Copy access to Improved Water Sources under the Date 03-Jan-2005 31-Dec-2011 28-Feb-2012 project Comments inhabitant inhabitants inhabitants End-of-project target met Decreased electricity costs as % of revenue Text Value 72.6% 23.2% 40.0% collected in systems with pumping or treatment Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 plants. Comments Exceeded end-of-project target Page 4 of 7 The World Bank Report No: ISR5984 Increased percentage of cities with minimal Text Value 68.1% 94% 90% daily hours of water supply service. Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 Comments Exceeded end-of-project Public Disclosure Copy target Increased percentage of block apartment Text Value 38.6% 82.1 75.0% buildings with individual or common block Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 meters. Comments Exceeded end-of-project target Increased revenue collected from domestic Text Value 166 502 260 subscribers per registered inhabitant (dram per Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 month). Comments Drams/month Exceeded end-of-project target Increased collection ratio excluding budget Text Value 47.9% 100.8% 80.0% organizations. Date 30-Nov-2005 31-Dec-2011 28-Feb-2012 Comments Exceeded end-of-project target Decreased percentage of subscribers with Text Value 79.5% 26.0% 78.0% more than 4 months debt. Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 Comments Exceeded end-of-project target Increased average domestic metered Text Value 81 l/c/d 94 l/c/d 70 l/c/d consumption per metered registered inhabitant Date 30-Nov-2005 31-Dec-2011 28-Feb-2012 (in liters per capita per day (l/c/d). Comments Exceeded end-of-project target Increased average price of m3 metered and Text Value 100.41 AMD/m3 179.8 AMD/m3 180.00 AMD/m3 billed to domestic subscribers. Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 Comments End-of-project target met Growth of total collected revenue from base Text Value 114.568 166.8% 200% Public Disclosure Copy year excluding budget organizations (in 1000 Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 AMD per month). Comments Close to the target Increased ratio of water volume billed on the Text Value 25.0% 85.8% 65% basis of metering to the total metered and Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 normative billed volume. Comments Exceeded end-of-project target Page 5 of 7 The World Bank Report No: ISR5984 Increased average daily production per Text Value 668 l/c/d 670 l/c/d 670 l/c/d equivalent registered inhabitant (in l/c/d). Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 Comments End-of-project target met Public Disclosure Copy Increased ratio of metered final consumption Text Value 6.8% 13.7% 7.8% (m3) to water production at water catchments Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 levels. Comments Exceeded end-of-project target Decreased working ratio for branches with Text Value 89.7% 63.5% 80.0% gravity systems. Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 Comments Exceeded end-of-project target Decreased working ratio for branches with Text Value 223.3% 123.3% 120% pumping stations or treatment plants. Date 30-Nov-2004 31-Dec-2011 28-Feb-2012 Comments Close to the target Data on Financial Performance (as of 26-Jan-2012) Financial Agreement(s) Key Dates Project Loan No. Status Approval Date Signing Date Effectiveness Date Closing Date P063398 IDA-38930 Closed 04-May-2004 14-Jun-2004 11-Nov-2004 31-Dec-2011 P063398 IDA-45140 Effective 30-Oct-2008 24-Nov-2008 20-Apr-2009 28-Feb-2012 Disbursements (in Millions) Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P063398 IDA-38930 Closed XDR 15.40 15.40 0.00 15.37 0.03 100.00 P063398 IDA-45140 Effective XDR 12.80 12.80 0.00 12.78 0.02 100.00 Disbursement Graph Public Disclosure Copy Page 6 of 7 The World Bank Report No: ISR5984 Public Disclosure Copy Key Decisions Regarding Implementation Despite an abundance of water resources in the country, water was only available a few hours a day in most cities and villages and at low pressure. With IDA support over the past decade, Armenia has succeeded in improving access, reliability and quality of drinking water service with increased use of public-private partnerships (PPP), which has brought about higher efficiency and improvements in quality of service to customers. The Project is making a good progress. Overall implementation is satisfactory. Major investments under the Project are for improvements in the water supply and wastewater collection/disposal system in Hrazdan city. All works in the city of Hrazdan have been completed on time. The Project is scheduled to close on February 28, 2012. Restructuring History Level two Approved on 27-Jan-2011, Level two Approved on 28-Dec-2011 Related Projects Public Disclosure Copy P107614-ADDITIONAL FINANCING FOR THE MUNICIPAL WATER AND WASTEWATER PROJECT Page 7 of 7