Document of The World Bank Report No: ICR2680 IMPLEMENTATION COMPLETION AND RESULTS REPORT (4410-NE) ON A CREDIT IN THE AMOUNT OF SDR 14.4 MILLION (US$23.7 MILLION EQUIVALENT) TO THE REPUBLIC OF NIGER FOR A LOCAL URBAN INFRASTRUCTURE DEVELOPMENT PROJECT July 1, 2013 Urban Development and Services Practice 2 Country Department AFCW3 Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective January 15, 2013) Currency Unit = CFA Franc (CFAF) 1.00 CFAF = $0.0020348 US$1.00 = CFAF 491.45 FISCAL YEAR January to December ABBREVIATIONS AND ACRONYMS AFD Agence Française de Développement – French Development Agency BNC Bureau National de Coordination – National Coordination Office CUM Communauté Urbaine de Maradi – Urban Community of Maradi CUN Communauté Urbaine de Niamey – Urban Community of Niamey ESW Economic and Sector Work FY Fiscal Year GDP Gross Domestic Product ICR Implementation Completion and Results Report IDA International Development Association IEG Independent Evaluation Group IFR Interim Financial Report IRR Internal Rate of Return ISR Implementation Status and Results Report LG Local Government MTR Mid-Term Review MUPH Ministry responsible for Urban Planning and Housing NGO Non-Governmental Organization NIGETIP Agence Nigérienne de Travaux d'Intérêt Public pour l'Emploi – Niger Public Works and Employment Creation Agency PAD Project Appraisal Document PDIL Projet de Développement des Infrastructures Locales – Local Urban Infrastructure Development Project PRIU Projet de Réhabilitation des Infrastructures Urbaines – Urban Infrastructure Rehabilitation Program PRS Poverty Reduction Strategy PSC Project Steering Committee SDR Special Drawing Rights UNDP United Nations Development Program Vice President: Makhtar Diop Country Director: Ousmane Diagana Sector Manager: Alexander E. Bakalian Project Team Leader: Zie Ibrahima Coulibaly ICR Team Leader: Zie Ibrahima Coulibaly ICR Author: Christian Vang Eghoff ii Niger Local Urban Infrastructure Development Project CONTENTS Data Sheet A. Basic Information ................................................................................................ iv  B. Key Dates ............................................................................................................ iv  C. Ratings Summary ................................................................................................ iv  D. Sector and Theme Codes...................................................................................... v  E. Bank Staff ............................................................................................................. v  F. Results Framework Analysis ............................................................................... vi  G. Ratings of Project Performance in ISRs ............................................................. ix  H. Restructuring (if any) ........................................................................................... x  I. Disbursement Profile ............................................................................................ x  1. Project Context, Development Objectives and Design ......................................... 1  2. Key Factors Affecting Implementation and Outcomes......................................... 5  3. Assessment of Outcomes .................................................................................... 11  4. Assessment of Risk to Development Outcome ................................................... 17  5. Assessment of Bank and Borrower Performance ............................................... 18  6. Lessons Learned.................................................................................................. 21  7. Comments on Issues Raised by Grantee/Implementing Agencies/Donors......... 22  Annex 1. Project Costs and Financing .................................................................... 23  Annex 2. Outputs by Component............................................................................ 24  Annex 3. Economic and Financial Analysis ........................................................... 28  Annex 4. Bank Lending and Implementation Support/Supervision Processes....... 32  Annex 5. Beneficiary Survey Results ..................................................................... 34  Annex 6. Stakeholder Workshop Report and Results ............................................. 35  Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR............... 36  Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ................. 48  Annex 9. List of Supporting Documents ............................................................... 49  Map IBRD 35731 .................................................................................................... 50  iii A. Basic Information Local Urban Country: Niger Project Name: Infrastructure Development Project Project ID: P095949 L/C/TF Number(s): IDA-44100 ICR Date: 07/01/2013 ICR Type: Core ICR GOVERNEMENT OF Lending Instrument: SIL Borrower: NIGER Original Total XDR 18.30M Disbursed Amount: XDR 14.28M Commitment: Revised Amount: XDR 14.39M Environmental Category: B Implementing Agencies: Project Coordination Unit (Cellule de Coordination PDIL) Cofinanciers and Other External Partners: Not applicable B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 05/10/2006 Effectiveness: 12/15/2008 12/15/2008 Appraisal: 02/04/2008 Restructuring(s): 12/28/2011 Approval: 05/29/2008 Mid-term Review: 06/14/2010 06/20/2011 Closing: 01/15/2013 01/15/2013 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Substantial Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Unsatisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Moderately Unsatisfactory Satisfactory Implementing Moderately Unsatisfactory Quality of Supervision: Agency/Agencies: Overall Bank Moderately Satisfactory Overall Borrower Moderately Unsatisfactory iv Performance: Performance: C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry Yes None at any time (Yes/No): (QEA): Problem Project at any Quality of Yes None time (Yes/No): Supervision (QSA): DO rating before Moderately Closing/Inactive status: Satisfactory D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) General education sector 15 15 General industry and trade sector 20 20 General public administration sector 15 15 General water, sanitation and flood protection sector 25 25 Urban Transport 25 25 Theme Code (as % of total Bank financing) Infrastructure services for private sector development 20 20 Municipal governance and institution building 40 40 Urban services and housing for the poor 40 40 E. Bank Staff Positions At ICR At Approval Vice President: Makhtar Diop Obiageli Katryn Ezekwesili Country Director: Ousmane Diagana Madani M. Tall Sector Manager: Alexander E. Bakalian Eustache Ouayoro Project Team Leader: Zie Ibrahima Coulibaly Christian Diou ICR Team Leader: Zie Ibrahima Coulibaly ICR Primary Author: Christian Vang Eghoff v F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project development objective was to increase and sustain access of urban residents to basic infrastructure and services, particularly those living in deprived settlements. Revised Project Development Objectives (as approved by original approving authority) The PDO was not revised. (a) PDO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Number of people in urban areas provided with access to all-season roads within Indicator 1: a 500 meter range under the project. 60,862 42,000 60,862 Value Niamey: Niamey: 40,000 Niamey: 52,737 quantitative or 0 additional people 52,737 Maradi: 1,500 Maradi: 6,630 Qualitative) Maradi: 6,630 Dosso: 500 Dosso: 1,495 Dosso: 1,495 Date achieved 04/23/2008 01/15/2013 12/28/2011 01/15/2013 100 percent achieved. Original indicator counted beneficiaries within 250m. At Comments restructuring, the core indicator definition was adopted (beneficiaries within (incl. % 500m). Therefore “actual� surpasses appraisal estimates although the length of achievement) roads was reduced during implementation. Indicator 2: People with access to improved drainage in the areas served by the project. 5,650 11,234 11,234 Value Niamey: 2,000 Niamey: 1,369 Niamey: 1,369 quantitative or 0 additional people Maradi: 2,250 Maradi: 4,524 Maradi: 4,524 Qualitative) Dosso: 1,400 Dosso: 5,341 Dosso: 5,341 Date achieved 04/23/2008 01/15/2013 12/28/2011 01/15/2013 Comments 100 percent achieved. Initial indicator counted beneficiaries within 250m, revised (incl. % indicator added during restructuring included beneficiaries within 500m. achievement) Therefore “actual� surpasses appraisal estimates. Number of people in urban areas provided with access to improved water sources Indicator 3: under the project. 3,500 3,010 3,477 Value Niamey: 1,000 Niamey: 1,215 Niamey: 967 quantitative or 0 additional people Maradi: 1,000 Maradi: 302 Maradi: 1,378 Qualitative) Dosso: 1,500 Dosso: 1,493 Dosso: 1,132 Date achieved 04/23/2008 01/15/2013 12/28/2011 01/15/2013 Comments (incl. % 116 percent achieved. achievement) Indicator 4: Number of people in urban areas provided with access to improved sanitation vi under the project. 4,100 3,250 3,250 Value Niamey: 850 Niamey: 0 Niamey: 0 quantitative or 0 additional people Maradi: 1,000 Maradi: 1,000 Maradi: 1,000 Qualitative) Dosso: 2,250 Dosso: 2,250 Dosso: 2,250 Date achieved 04/23/2008 01/15/2013 12/28/2011 01/15/2013 Comments 100 percent achieved as restructured. Indicator measures access to sanitation due (incl. % to blocks of latrines constructed under the project (not a core indicator, as the achievement) facilities are public). The buildings also contain shower facilities. Effective management system established to operate markets and truck terminals Indicator 5: upon rehabilitation / construction under the project. Value quantitative or 0 n.a. 100% 50% Qualitative) Date achieved 04/23/2008 n.a. 12/28/2011 01/15/2013 Comments 50 percent achieved. No systems are fully in place but all systems in the process (incl. % of being established with managers already nominated. Indicator added for achievement) project restructuring to replace indicator on fees collected from markets. Indicator 6: Direct project beneficiaries. Value quantitative or 0 74,460 97,566 98,032 Qualitative) Date achieved 04/23/2008 01/15/2013 12/28/2011 01/15/2013 Comments 100 percent achieved. Core indicator, not part of original or restructured project, (incl. % added for the ICR as sum of beneficiaries of PDO indicators 1-4 and intermediate achievement) indicator 8. Indicator 7: Female beneficiaries. Value quantitative or 0 49.9% 49.9% 49.9% Qualitative) Date achieved 04/23/2008 01/15/2013 12/28/2011 01/15/2013 Comments 100 percent achieved. Core indicator, not part of original or restructured project, (incl. % added for the ICR. Target and achievement both based on the female part of the achievement) total population of Niger. (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Annual budget allocation on routine road and drainage maintenance within Indicator 1: defined range (% of annual municipal income). Value Niamey: 8.0% Niamey: 9.0% Niamey: 8.9% quantitative or Maradi: 5.1% Maradi: 6.0% n.a. Maradi: 5.5% Qualitative) Dosso: 6.8% Dosso: 8.0% Dosso: 7.8 Date achieved 04/23/2008 01/15/2013 n.a. 01/15/2013 Comments 99 percent achieved by total budget allocation compared to combined municipal vii (incl. % income for the three cities. Total budget allocation in 2012 was FCFA achievement) 1,243,614,945 but should have been FCFA 1,261,052,343 to live up to city contracts. Annual budget actual expenditure on routine road and drainage maintenance Indicator 2: within appropriate range (% of annual municipal income). Value Niamey: 6.0% Niamey: 8.0% Niamey: 5.6% quantitative or Maradi: 2.4% Maradi: 4.5% n.a. Maradi: 4.9% Qualitative) Dosso: 5.8% Dosso: 7.5% Dosso: 3.1% Date achieved 04/23/2008 01/15/2013 n.a. 01/15/2013 71 percent achieved by total actual expenditure compared to combined municipal Comments income for the three cities. Total expenditure in 2012 was FCFA 792,328,201 (incl. % but should have been FCFA 1,111,937,526 to live up to percentages in city achievement) contracts. Indicator 3: Length of drainage network actually maintained (km). 1.0 km 41.0 km 132.1 km Value Niamey: 0.7 km Niamey: 29.0 km Niamey: 119.7 km quantitative or n.a. Maradi: 0.1 km Maradi: 10.0 km Maradi: 10.4 km Qualitative) Dosso: 0.2 km Dosso: 2.0 km Dosso: 2.0 km Date achieved 04/23/2008 01/15/2013 n.a. 01/15/2013 Comments 322 percent. Maintenance expenditures were below the Indicator 2 target in % of (incl. % municipal income but the total municipal income increased six-fold over the achievement) project so a lower than expected % led to higher actual expenditure. Indicator 4: Length of road network actually maintained (km). 2.2 km 114.0 km 364.7 km Value Niamey: 1.5 km Niamey: 66 km Niamey: 179.6 km quantitative or n.a. Maradi: 0.5 km Maradi: 37 km Maradi: 155.6 km Qualitative) Dosso: 0.2 km Dosso: 11 km Dosso: 29.5 km Date achieved 04/23/2008 01/15/2013 n.a. 01/15/2013 Comments 320 percent. Maintenance expenditures were below the Indicator 2 target in % of (incl. % municipal income but the total municipal income increased six-fold over the achievement) project so a lower than expected % led to higher actual expenditure. Indicator 5: Roads rehabilitated, non-rural. 13.82 km Niamey: 11.56 18.5 km 13.82 km Value km Niamey: 17.0 km Niamey: 11.56 km quantitative or 0.0 km Maradi: 1.70 Maradi: 1.0 km Maradi: 1.70 km Qualitative) km Dosso: 0.5 km Dosso: 0.56 km Dosso: 0.56 km Date achieved 04/23/2008 01/15/2013 12/28/2011 01/15/2013 Comments (incl. % 100 percent achieved. achievement) Indicator 6: Additional length of drains built/rehabilitated in targeted areas (km). 3.4 km 3.46 km 3.46 km Value Niamey: 1.0 km Niamey: 0.3 Niamey: 0.3 km quantitative or 0.0 km Maradi: 1.3 km km Maradi: 1.16 km Qualitative) Dosso: 1.1 km Maradi: 1.16 Dosso: 2.0 km viii km Dosso: 2.0 km Date achieved 04/23/2008 01/15/2013 12/28/2011 01/15/2013 Comments 100 percent achieved. Overall baseline and target values correct, but breakdown (incl. % corrected for ICR based on actual feasibility studies. achievement) Indicator 7: Improved community water points constructed or rehabilitated under the project. 14 14 Value Niamey: 3 Niamey: 3 quantitative or 0 n.a. Maradi: 5 Maradi: 5 Qualitative) Dosso: 6 Dosso: 6 Date achieved 04/23/2008 01/15/2013 n.a. 01/15/2013 Comments (incl. % 100 percent achieved. achievement) Indicator 8: Additional number of school pupils benefiting from latrines in targeted areas. Value 19,210 19,210 quantitative or 0 additional pupils Niamey: 14,400 n.a. Niamey: 14,400 Qualitative) Maradi: 4,800 Maradi: 4,800 Date achieved 04/23/2008 01/15/2013 n.a. 01/15/2013 Comments 100 percent achieved. The indicator is distinct from the PDO indicator on access (incl. % to improved sanitation. achievement) Additional number of market stands improved and parking places created in Indicator 9: truck terminals. Value Total: 4,014 Total: 3,924 Total: 3,924 0 additional stands and quantitative or Maradi: 1,930 Maradi: 1,840 Maradi: 1,840 parking places Qualitative) Dosso: 2,084 Dosso: 2,084 Dosso: 2,084 Date achieved 04/23/2008 01/15/2013 12/28/2011 01/15/2013 Comments (incl. % 100 percent achieved. achievement) G. Ratings of Project Performance in ISRs Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 10/20/2008 Satisfactory Satisfactory 0.00 2 04/02/2009 Satisfactory Satisfactory 2.81 3 10/01/2009 Satisfactory Moderately Satisfactory 3.20 4 04/09/2010 Satisfactory Moderately Satisfactory 3.46 Moderately 5 12/15/2010 Moderately Satisfactory 4.02 Unsatisfactory 6 08/10/2011 Moderately Satisfactory Moderately Satisfactory 7.10 7 03/17/2012 Satisfactory Satisfactory 9.60 8 10/28/2012 Moderately Satisfactory Satisfactory 16.35 ix H. Restructuring (if any) ISR Ratings at Amount Board Restructuring Disbursed at Restructuring Reason for Restructuring & Approved Restructuring Date(s) Key Changes Made PDO Change DO IP in USD millions To formalize incorporation of core indicators and down- 12/28/2011 N MS MS 8.70 scaling agreed at the MTR in June 2011. If PDO and/or Key Outcome Targets were formally revised (approved by the original approving body) enter ratings below: Outcome Ratings Against Original PDO/Targets Moderately Unsatisfactory Against Formally Revised PDO/Targets Satisfactory Overall (weighted) rating Moderately Satisfactory I. Disbursement Profile x 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal 1. Niger is a very poor country struggling to get economic growth to keep pace with population increase. At appraisal, 61 percent of Niger’s population of 14 million lived on less than a dollar a day. GDP per capita was US$240 and the high population increase, at 3.4 percent annually, presented particular challenges to economic development and improvement of living conditions. The country ranked 174 out of 177 on the 2006 UNDP Human Development Index. 2. At the time of project design, the urbanization ratio was about 23 percent, but with an annual urban population increase of 6 percent, uneven urbanization pattern and widespread poverty and social exclusion. Niamey had more inhabitants (880,000) than the 7 regional capitals together. Available data suggested that poverty affected 52 percent of the urban population, of which 26 percent was extremely poor. Slums were estimated to be growing at 5.9 percent per year. Widespread income disparities contributed to weakening social cohesion in urban areas. Especially the youth only survived on temporary jobs in the informal sector, creating potential for increased insecurity. Many areas completely lacked access to basic services. Access rates to water in urban areas was about 45 percent and 36 percent of urban households had access to electricity. 3. Cities generated approximately 45 percent of the country’s GDP and had strong potential to drive economic growth. The development of a network of small and medium-sized urban centers could provide local outlets for consumption and processing of agricultural products, which could in turn slow down population influx to Niamey. This would further support the development, in secondary cities, of a private sector, which would drive investment, local development and employment. Secondary cities were missing out on investments needed to create the enabling environment for increased economic growth, including for the rural hinterlands. 4. The first local government elections were held in 2004, but investments were biased towards rural areas and no effective mechanism for fiscal transfers was in place. External financing accounted for 70 to 90 percent of all public investments, and public investments in rural areas were ten times higher than in urban areas, with less than 8 percent of the national investment budget dedicated to urban infrastructure. Despite the decentralization policy, local taxes collected by the General Directorate of Tax were not fully or timely transferred to local governments. The World Bank had funded the Urban Infrastructure Rehabilitation Program (Projet de Réhabilitation des Infrastructures Urbaines - PRIU, closed March 2003, US$20 million IDA funding) and was by far the largest source of urban investments from 1999 to 2003. 5. Municipalities’ own contribution to urban investment financing to keep up with high demands was very limited, as was their technical capacity. Municipalities invested only 0.6 percent of the total national investment budget. A weak fiscal base and low tax collection capabilities of urban municipalities (with the relative exception of Niamey), combined with low levels of resources transferred from the central government, meant that urban municipalities’ average per capita spending (investment and maintenance combined) amounted to only US$1.78 1 (US$2.94 in Niamey and US$0.65 in the regional capitals). The limited amount of financing also had a direct impact on development of technical capacity though learning-by-doing. Government and Donor Strategy 6. Because of the magnitude of poverty in rural areas, the government and donors had not placed much emphasis on reducing urban poverty, but emphasis was shifting. Recent data had showed that a large proportion of city dwellers were poor and vulnerable and that localized pockets of extreme poverty had developed in the larger cities. The government had recently demonstrated its commitment to urban development through a ministerial reshuffling creating a separate Ministry responsible for Urban Planning and Housing (MUPH, formerly part of the Ministry of Infrastructure). 7. The new priorities were captured in the 2004 national urban development strategy. The major objectives were: (a) improvement of the overall framework for urban management, (b) improvement of local urban governance, (c) local economic development, and (d) social and urban integration. The Local Urban Infrastructure Development Project (Projet de Développement des Infrastructures Locales - PDIL) would support operationalization of the sector strategy and was in line with the strategic orientations of the country’s second Poverty Reduction Strategy (PRS, 2008-2012), focusing on: (a) increasing financial resources for accelerating growth; (b) improving human resources and equity in access to basic services; and (c) promoting a better development framework. Rationale for World Bank Response 8. The PDIL was a natural follow-up to ten years of continuous World Bank involvement in the urban sector in Niger and in line with emerging priorities. The government requested a strong focus of World Bank support on growth through infrastructure investment. The PDIL was fully aligned with the main features of the World Bank’s FY08-11 Country Assistance Strategy (CAS) for Niger, in particular with regard to: (a) improving access to services such as education, health, water, and sanitation; (b) promoting income generating activities; and (c) strengthening local development management capacity. The World Bank was well poised to help address limited institutional and implementation capacity in urban management in combination with an infrastructure program to improve living conditions in poor urban areas and enhance sustainability through capacity building. 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) 9. The project development objective was to increase and sustain access of urban residents to basic infrastructure and services, particularly those living in deprived settlements. The key indicators were: (i) Additional population in targeted areas benefiting from: (a) all-year access to transportation; (b) protection against periodic flooding; and (c) access to water supply and sanitation services. (ii) Additional financial resources collected from markets and truck terminals in the Urban Community of Maradi (CUM) and Dosso. 2 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and Reasons/Justification 10. The PDO was not revised, but key indicators and targets were revised twice; first to align the indicators with new definitions of core indicators and second to adjust targets for beneficiary population following a restructuring and downscale of the project agreed at the Mid-Term Review (MTR) and to make minor reallocations. During the MTR restructuring, the indicator on resources collected from markets and truck terminals was replaced with an indicator on setting in place effective management systems for these facilities, which was deemed achievable within the remaining implementation timeframe for the project. 1.4 Main Beneficiaries 11. The project mainly targeted improved living conditions for low-income communities in the cities of Niamey, Maradi, and Dosso, with key institutions also benefiting. Local governments would benefit from capacity building to deliver better services to the inhabitants, and central government administration (in particular the MUPH) would also be strengthened to better serve local governments (LGs) through improved oversight and policy setting. Secondary benefits would accrue to construction companies and works supervisors trained in project management. 1.5 Original Components (as approved) Component A: Capacity Building Appraisal / restructured / actual cost (US$ million): 1.96 / 1.40 / 1.20 12. The objective of the component was to build and consolidate management capacities for programming, implementing and managing urban infrastructure and basic services. This would happen through support to: (i) Local stakeholders in the targeted cities: The Urban Community of Niamey (CUN) and the five communes of the city, the Urban Community of Maradi (CUM) and the three communes of the city of Maradi, and Dosso (a single LG entity). (ii) Selected central governmental institutions active in the areas of urban management, to strengthen public stakeholders’ capacity in thematic areas covered by the project objectives. (iii) The private sector, mostly local contractors and consultant firms involved in project implementation and NIGETIP. Component B: Municipal Investments for Niamey, Maradi and Dosso Appraisal / restructured / actual cost (US$ million): 20.13 / 18.60 / 18.65 13. The objective of the component was to increase access to basic services in the targeted cities, primarily in low-income settlements and to finance infrastructure aimed at boosting local economic development. The outputs concerned a program of investments for each city, with the envelope determined based on population and LG revenue (see detailed programming developed during project preparation in Annex 2): 3 (i) Niamey: (a) upgrading the East-West Road and secondary roads in densely populated areas, (b) constructing drainage, (c) constructing and upgrading socio-economic infrastructure, and (d) carrying out small infrastructure works to improve living conditions in low-income settlements. (ii) Maradi: (a) upgrading the central warehouses and infrastructure of the central market (Marché Central), (b) constructing a truck terminal, (c) upgrading roads in densely populated areas, (d) constructing drainage, and (e) carrying out small infrastructure works to improve living conditions in low-income settlements. (iii) Dosso: (a) upgrading the central market (Marché Central) and the small market (Petit Marché), (b) constructing a truck terminal, (c) constructing and rehabilitating drainage, and (d) carrying out small infrastructure works to improve living conditions in low- income settlements. Component C: Support to implementation, monitoring and evaluation Appraisal / restructured / actual cost (US$ million): 2.16 / 2.07 / 1.69 14. This component was to finance equipment and operating costs of the National Coordination Office (Bureau National de Coordination - BNC). The PDIL initially shared coordinator and fiduciary staff with the World Bank-funded Road Sector Project, approved at about the same time as the PDIL. 1.6 Revised Components 15. Due to underperformance, the project was restructured and scaled down following the MTR in June 2011. Minor adjustments to the investment program had been effected already shortly after effectiveness to accommodate a Presidential request to reorient the project towards major investments in roads and drainage (details in Section 2.2). Due to delayed implementation and very low levels of disbursements, cost overrun, and underperformance of especially NIGETIP (responsible for implementing 86 percent of the initial investment program), it was agreed at the MTR to restructure the project and maintain only the investments that were certain to be finalized within the original project timeframe and reduce the overall project envelope accordingly. The main investments dropped were (Annex 2 provides details on outputs originally planned, those dropped after the Presidential request for reorientation and after the restructuring, and actual investments): (i) Niamey: 8.4 kilometers of secondary roads, 0.6 kilometers of drainage, upgrading of two secondary markets, and minor socio-economic infrastructure. (ii) Maradi: Construction of a truck terminal, resurfacing of a small road and upgrading a municipal building. (iii) Dosso: No investments were dropped. 1.7 Other Significant Changes 16. During implementation the BNC was administratively moved from the PM’s office to the sector ministry and the CUN and CUM were amalgamated into single LG entities. These two changes were handled without restructuring the project: (a) the BNC was originally attached to the Office of the Prime Minister. Following the MTR, it was administratively moved to the MUPH in February 2011; and (b) the Urban Communities of Niamey and Maradi with their city 4 mayors and total eight constitutive communes were transformed, by legislative means, into two cities and the communes became subdivisions (arrondissements). This meant that key staff previously in charge of the PDIL activities in the communes were reassigned, impacting especially Niamey, but to a lesser extent Maradi, since the three communes of the CUM had already delegated project implementation responsibility to the city level. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry Preparation 17. Preparation of the PDIL started in May 2006, in continuation of previous operations and analytical work. The PRIU had closed in 2003. It was focused on rehabilitation, but had succeeded in implementing instruments for a sector management policy and had positive impacts on temporary job creation and local SME development in the construction sector. Economic and Sector Work (ESW) followed in 2004 to lay the groundwork for a new operation with more focus on institutional aspects. 18. Institutional arrangements of the previous operation were carried over and the beneficiaries were involved in setting investment priorities. The BNC had assured implementation of the predecessor PRIU and was maintained for the preparation of the new operation. The time to prepare the project (21 months), was quite long in spite of all the available documentation. The lengthiness of preparation is principally ascribed to limited capacity of the BNC to assure timely delivery of project preparatory studies and time taken for the BNC and NIGETIP to reach common understanding on their roles in project implementation. The city inhabitants, through local development committees, and local governments were actively involved in diagnosing the situation and selecting the investment programs. Design 19. The overall design built on the recommendations of the 2004 ESW and detailed studies available for each project city to combine infrastructure investments with capacity building and improvements to sector governance and financing. The ESW recommended support for well- balanced urban development through, in particular, the promotion of secondary cities and market centers that would be likely to stimulate local economic development. The secondary cities of Maradi and Dosso were selected for the project, as they are regional centers of trade and commerce. Also, two city development strategies, funded by the Cities Alliance, could serve as basis for selecting investments in these two cities. For Niamey, a household survey carried out in 2005 under a Norwegian Trust Fund and an Urban Reference Plan funded by the French Development Agency (AFD) were used to target investments to the poorest neighborhoods. These investments under Component B were focused on poverty alleviation and employment generation. They were complemented by targeted capacity building to the cities under Component A, based on detailed organizational and financial analysis of each city, and which the cities would use to improve infrastructure maintenance and revenue mobilization. Component A would also fund studies to improve the overall framework for the urban sector and intergovernmental fiscal transfers and support the emergence of a market for delegated contract management. Due to the magnitude of needs and the limited funds available, the project opted for an incremental approach to service improvements, whereby the PDIL would finance only the 5 construction or rehabilitation of the essential parts of some major infrastructures, leaving the option open for service improvements at a later stage, if and when funds became available. The project would help setting in place efficient management systems for market infrastructure, which were providing substantially less revenue for the LGs than the potential. 20. The implementation arrangements were based on mutual and contractual engagements and designed to support the overall objectives and reinforce capacity in the sector to implement projects and provide services. The investments and capacity support measures to be provided by the government and engagements of the cities to improve resource mobilization and maintenance of infrastructure were formalized through signing of city contracts, already piloted under the PRIU, and based on highly positive lessons learned in other countries in the Africa Region. A Project Steering Committee (PSC) was set in place to guide implementation, with participation of the various concerned ministries, representatives of the private sector and NIGETIP, and the cities. The BNC was made responsible for overall coordination and directly implemented Components A and C. 21. Several implementation options were considered for Component B – LGs, the BNC or NIGETIP, and the risks carefully weighted. Ideally, the LGs, as works owners, should be responsible, but given their very limited capacity and experience, they were only made responsible for investments up to a ceiling (US$250,000 for Niamey and Maradi, US$150,000 for Dosso). NIGETIP, the only delegated contract management agency in the country and operating since 1991, was retained to implement Component B investments above this ceiling, and delegated contract management arrangements were signed between each city and NIGETIP. A study on NIGETIP capacity had presented criticism of the agency’s selection of some contractors and resulting poor quality of works. However, given the low capacity of the local government administrations, the only alternative to NIGETIP was to beef up the BNC as a temporary Project Implementation Unit, which was rejected as it was considered more productive to include capacity building for NIGETIP in the project, to the benefit of the sector in the longer term. Targeted modifications were made in the NIGETIP manual of procedures to take into account identified capacity weaknesses. Quality at Entry 22. The overall project concept was based on substantial analysis, including economic aspects, but detailed technical studies for major investments had not been done by appraisal, and some other minor flaws are noted. Feasibility studies for all planned investments were completed during preparation, and included evaluation of expected economic rates of return. A substantial amount of unallocated resources (16 percent of total funds) was included as physical and price contingencies, to take into account the weak capacity environment and mixed performance of the local construction industry. While a reasonable choice was made to have LGs manage detailed technical design for works under their purview to allow them to benefit from training, the project could likely have avoided some of the delays encountered if detailed design studies had been done for all the main investments (roads, markets and truck terminals) before appraisal. It was also initially foreseen to make use of labor-intensive construction techniques whenever feasible, as was the case for the PRIU. However, this did not materialize in the actual project design. On the basis of an overall sound design but considering these shortcomings, the quality at entry is rated moderately satisfactory. 6 2.2 Implementation 23. The project encountered significant problems and difficulties due to the socio-political environment, marked by a coup d’état, change of mayors, cost overruns, and because of the limited capacity of NIGETIP to assure project implementation. A project restructuring following the MTR assured that the majority of initially foreseen investments could be completed before the originally planned project closing date. Details of main implementation events, their impact on project performance, and resolution of problems follows below. 24. Immediately following effectiveness, the President of Niger requested the project to focus more on major structuring investments. In response, activities related to capacity building were reduced and minor investments removed from the project in order to focus more on structuring investments (especially roads and drainage), still in line with the overall project concept. These were in reality minor adjustments, and did not entail a formal restructuring or changes to the results framework. The funding for Component A was slightly reduced and investments in neighborhood markets in Niamey, administration buildings and a health center were removed from Component B. However a lot of energy was spent on reorganizing the project, which resulted in signing of amendments to city contracts and the delegated contract management contracts. The freed-up funds were not directly reallocated but kept in reserve to be reallocated following the MTR. 25. NIGETIP and local governments had difficulties to implement timely procurement, which resulted in substantial delays. Shortly after effectiveness, NIGETIP saw the arrival of a new General Manager and three new project managers, which were not familiar with the project and with World Bank procedures. Further the Technical Director and Chief Financial Officer were replaced within the first year of implementation. As a result, procurement processing times were not acceptable, and the time taken between bid opening and contract award varied between 114 and 145 days. The LGs initially had problems to assure timely procurement, with between 42 and 160 days spent between bid opening and contract award. The World Bank also at times took long time to provide no-objections, but this was essentially due to the poor quality of documentation received. The time taken to finalize detailed technical studies and procure works meant that the first work sites did not open until May 2010, two years after project approval. The general price hikes brought about by the global 2008 financial crisis was reflected in price increases for many infrastructures and cost overruns. The large number of small contracts (in part due to works contracts being sized to allow LGs to manage funds) also did not help on disbursement rates, with a total of 140 contracts signed under the project. 26. Other difficulties resulted from the coup d’état in February 2010, following which the project was implemented under a transitional military government until April 2011. The project cities had already seen the suspension of mayors due to governance issues prior to the coup d’état. With the military transition, non-elected administrators were nominated to head the LGs and all but one LG secretary general were replaced. Municipal councils were renewed after the return to constitutional order and local government elections in January 2011. Each project city was under the authority of at least three executives during the project and often key staff would change with the executive. In fact, in all three cities, only one key technical local government staff saw the project through from start to end. 7 27. The MTR was planned in the PAD for June 2010, but could not be held during the military transition. It was held on June 20-24, 2011, after return to constitutional order and to allow the participation of the newly elected mayors (taking office in July), which was important to assure participation and ownership of the restructured project. The combination of lack of detailed studies, project reorganizing, capacity constraints, and coup d’état combined to limiting disbursements to only 21 percent at the time of the MTR, after 62 percent of implementation time. Prior to the MTR, it was considered to close the project, but substantial efforts were being made to improve the situation, supported by four implementation support missions. By the MTR, 51 percent of project funds were committed and disbursement was realistically expected to increase rapidly. Since LGs had relatively few activities to implement, investments under their responsibility were well under way by the time of the MTR, and the average procurement time was down to 50 days. As the situation was set to improve, it was decided to continue the project, but require a restructuring and dropping all activities that could not be implemented by the original project closing date and to require additional efforts by all parties to assure project success. 28. Following the MTR the project was scaled down, NIGETIP and the BNC were reinforced, and support to the private sector was focused on works organization and implementation, the most pressing issue, but contractors continued to show weaknesses. The dropping of investments that could not be completed meant reducing the project envelope by US$6.3 million, which was reserved for other projects in Niger. To improve project performance, the shared management responsibilities for the World Bank-funded Road Sector Project and the PDIL were split, to allow two separate coordinators to focus more on critical aspects of each project. Also, the position of infrastructure specialist was split into three, with two full-time staff responsible respectively for technical assistance to LGs and project M&E and a part-time staff dedicated to safeguards. The two projects continued, however, to share fiduciary staff. Two engineers were recruited by NIGETIP dedicated to supervise implementation of the works on the East-West Road and Maradi Marché Central, the two most substantial contracts, which did not start until after the MTR. The changes were formalized through the restructuring on December 28, 2011. 29. The MTR and subsequent restructuring effectively provided momentum to the project, with efforts made by all parties to adhere to the new implementation plan. However, as construction activities picked up, additional challenges were posed by contractors, who had presented adequate references in the bids, but in reality had very limited technical and financial capacity to implement works, with absence of required technical staff and equipment, disrespect of planning, and inability to supply sites timely. This meant that works execution delays were often doubled compared to contractual dates. Works supervisors also lacked experience and thoroughness in works supervision. As a result, the main infrastructures (East-West Road and Maradi Marché Central) continued to experience implementation delays, but close supervision and last-minute efforts assured that they were received before the project closed. 30. Institutional changes to the organization of local governments meant further difficulties to implement the project. Niamey and Maradi experienced institutional changes due to the transformation, in June 2011, of the CUN and CUM into single local government entities with administrative subdivisions (arrondissements). This resulted in reassignment of key personnel that had already been trained, which could not be foreseen at the MTR. Due to budget constraints 8 of the restructured project no new training could be programmed and the BNC stepped in and scaled up their support to the city administrations. 31. The project closed with the restructured program of works completed and strategic recommendations for the future of the sector available. The only infrastructure which is not operational is the Marché Central in Maradi, for which the PDIL funded, as foreseen, a renovation of the central warehouses as well as improvement of the market infrastructure. The government has allocated funds for the construction of the enclosing shops, which were not part of the original PDIL design; this work is set to commence shortly. As problems related to works took a lot of time and not least efforts to resolve, focus was on completing infrastructures. Market and parking facilities were finalized only just before project closing, but the LGs have taken steps to nominate managers (provisional management in Maradi, while construction is completed) with a mandate to assure the expected management systems will become fully operational. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization Design 32. The PDO indicators in the Project Appraisal Document (PAD) focused on the additional population benefiting from infrastructure, coupled with an indicator on additional fees collected from markets and truck terminals to measure the additional revenues raised to help sustain this access. The intermediate indicators on budget ratios for maintenance further provided good measures of the effort to allocate funds to maintain infrastructure, and the actual maintenance was monitored. The M&E framework did not contain specific indicators designed to monitor the part of the PDO related to targeting urban residents living in deprived settlements. This was not a real shortcoming, however, as the process of selection of works had already focused on deprived settlements, based on prior studies. The collection method was based on reporting by LGs, to be aggregated by the infrastructure specialist, also in charge of the M&E function. Implementation 33. Initial M&E reporting was inadequate and it took until well into the project for the BNC to establish an actual M&E methodology. The local governments were also not used to collect and report regularly on M&E data, and took some time to fully develop this ability, which was complicated by the several changes in local government executives. M&E data collection, consolidation and evaluation by the BNC improved after the MTR, when a specialist dedicated to the M&E function was recruited. However, data continued to be of mixed quality and quarterly reports did not contain analytically based recommendations to improve project performance. Also, the project M&E did not pick up on cost overruns. The results framework was revised following the MTR, to suit it better to the restructured project and place more focus on results that could realistically be achieved within the original project timeframe. Also, new city contracts were signed with the new city authorities in December 2011, which resulted in difficulties to adequately monitor the priority maintenance programs (since several budgets were merged into one). 9 Utilization 34. The M&E framework was used to make minor adjustments to project implementation, but could have been used more actively to flag cost overruns and analyze linkages between budget ratios and implementation of maintenance activities. 2.4 Safeguard and Fiduciary Compliance Safeguards compliance 35. Despite difficulties faced by the project during implementation to respect safeguards instruments, all issues had been resolved by project closing. The project was rated category B as no major environmental impacts were identified and triggered the safeguard policies on Environmental Assessment (OP4.01) and Involuntary Resettlement (OP4.12). The project was generally implemented in compliance with safeguards policies, but in several cases did works start with sites still occupied by affected persons, or compensation of affected persons was not assured before commencement of works. A safeguards focal point was nominated in each LG, but did not contribute substantially to monitoring safeguards. Further, a convention had been signed at the beginning of the project with the National Environmental Agency to monitor environmental aspects, but this was only made effective after the MTR, with two rounds of site visits carried out. The Bank Task Team worked actively with the BNC and LGs to resolve these problems as soon as they transpired and following the MTR, the BNC recruited a part-time consultant to supervise safeguards implementation. At the time of finalizing this ICR, all issues raised during project implementation support missions and in technical audit reports have been fully resolved and proof of adequate compensation of all project affected persons has been provided to the World Bank. A total of 2,712 persons were affected by the project, the vast majority being traders (2,586) affected by the temporary and voluntary relocation of the Marché Central in Maradi. Fiduciary compliance 36. The Bank’s fiduciary safeguards have been complied with. In general, financial management arrangements have been rated Satisfactory and post procurement reviews did not reveal irregularities. Audited financial statements have been submitted timely, the external auditors expressed unqualified audit opinions and management letters did not include significant observations. There were no overdue external audit reports and IFRs at the time of the project closing date. Two IFRs were submitted with delay due to the temporary vacancy of the FM position in the BNC. Post procurement reviews did not reveal any cases of misprocurement or non-compliance. A technical audit carried out in January 2013 confirmed that procurement methods and thresholds in the delegated contract management agreements have been respected. NIGETIP experienced serious problems to assure timely procurement; this is discussed in section 5.2 on Borrower Performance. Two technical audits were carried out: the first informed the project restructuring and the second was undertaken some time before project closing. They raised problems of organization of construction sites but did not reveal any problems of quality of works. 37. The award process of the paving blocks contract for road works in Niamey Commune V led to a complaint before the national procurement regulatory body, which eventually concluded on no evidence of mismanagement of the process. This was consolidated by a no objection received from the General Directorate of Public Procurement Control as the process was Bank 10 post-review. Despite these positive outcomes from the main bodies in charge of procurement regulation and control in the country, a World Bank mission observed a persistent climate of suspicion among the main administrative players and then eventually recommended the undertaking of a technical review study to assess the quality of as well the documentation used as the award processing. A technical review mission did not find evidence of fraud or corruption. 2.5 Post-completion Operation/Next Phase 38. All infrastructures are operational, with the exception of the Maradi Marché Central. Some minor works (cabling, transformer stations, connecting fire hydrants to the water network) for the market and parking facilities in Dosso and a health center in Niamey were assured by the beneficiary LGs after the project closed, testifying to the ownership of the facilities. Further, the city of Dosso has decided to construct lodging for the truck drivers at the truck terminal, increasing the economic potential of the investment and providing better services for the users. 39. The process to construct the remaining shops to serve as enclosing for the rehabilitated Maradi Marché Central is ongoing. In the initial PDIL design, the project would finance the central warehouses and improved infrastructure. However, after the military transition the new government decided to finance the construction of the shops for about US$6 million. At the time of finalizing the ICR, the contracts had been signed and construction was set to begin in July 2013. 40. The government is implementing the recommendations from two key studies. (a) The decrees on the setting in place of a framework for creating a competitive market for delegated contract management are in the process of being adopted. However, the market is very limited and since the experience of the LGs means they are likely unwilling to use the services of NIGETIP in the going forward, the future of delegated contract management arrangements in general and NIGETIP in particular is unclear in the absence of a strategy to develop the market. (b) On a framework for the urban sector and fiscal transfer mechanism. The government has nominated the Director of the agency charged with managing fiscal transfers and incorporated implementation of the recommendations of the study (which include revision of the legal and regulatory framework of the urban sector, operationalization of urban management tools, local economic management) in its 2012-2015 PRS. 41. Preparation of a follow-up operation (Disaster Risk Management and Urban Development Project, US$100 million IDA funding) is ongoing and will build on the achievements of the PDIL, drawing on the urban management tools developed under the project. This operation will include activities to solidify the culture of maintenance instilled by the PDIL and will make use of the drainage master plans financed by the PDIL. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation Rating: Substantial Objectives 42. The objectives of the PDIL remain relevant, in spite of changes to context and shortcomings in implementation, which ultimately led to the project being restructured to assure 11 continued relevance and adequacy of indicators. The urbanization ratio continues to increase – it is estimated at about 28 percent in 2013 and projected to reach 43 percent in 2030, necessitating the vulgarization of the urban management tools provided by the PDIL. An estimated 80 percent of city populations live in slum; in spite of this, the cities continue to provide opportunities for the rural population, and rural-urban migration remains high. The urban context continues to be marked by numerous under-serviced neighborhoods, significant lack of infrastructure and the need to develop capacity at the decentralized level to support economic growth and poverty reduction. There is also still a need to develop the economic potential of secondary cities to counterbalance the attractiveness of Niamey. Regarding the FY13-16 Country Partnership Strategy (CPS), the World Bank will continue to be involved in the urban sector, with an indicative allocation of US$100 million for an operation to be approved in FY14. The culture of maintenance, which the PDIL has helped instill through a mix of infrastructure investments and accompanying capacity building measures, supports the focus of the CPS on an integrated approach to building resilience of communities by improving urban and land-use planning. One of the longer term outcomes of the PDIL is more sustainable urban development as well as competitive and productive cities, specifically recognized under Pillar One of the World Bank Africa Strategy as a key driver of wealth and jobs going forward for Africa. The government’s 2012-2015 PRS foresees operationalization of outcomes of the strategic studies, specifically implementation of the framework for the urban sector and the mechanism for fiscal transfers. Design 43. There were moderate design shortcomings, and the project was implemented under very difficult circumstances. The changes made at the MTR contributed to assuring relevance against the development priorities and prevailing circumstances. This was achieved by restructuring the project and removing the activities which could not be implemented, thereby freeing up funds and reducing the workload on implementing agencies to enable finalization of retained investments in the best possible conditions. The choice made at appraisal to opt for gradual improvements to the level of service offered by infrastructures financed by the project proved correct, as testified by the construction of lodging for truck drivers at the Dosso truck terminal and new shops for the Maradi Marché Central. The project has thus leveraged additional funds for continued service improvements. The use of NIGETIP as implementing agency for Component B was justified by the evaluation of alternatives. In spite of the implementation difficulties encountered by NIGETIP, the actual performance of LGs and the BNC during implementation shows that the alternatives would not necessarily have been better. Further, NIGETIP is now strengthened and with the ongoing liberalization of delegated contract management in Niger, is the first player in a new market. 44. The restructuring provided the necessary adjustments and momentum to the project, through refocusing the project on the most rewarding and realistic investments, requiring provision of additional staff by NIGETIP and the BNC and assuring increased attention to the project by the government. The timing of the restructuring contributed to assuring continued ownership on the part of LG councils, following the LG elections in 2011. The PDO and components were not changed and remained relevant throughout. The restructuring was further adequate judged by the disbursement of 99 percent of the restructured project amount (in SDR terms). 12 3.2 Achievement of Project Development Objectives 45. The project development objective was to increase and sustain access of urban residents to basic infrastructure and services, particularly those living in deprived settlements. The PDO did not change, but one PDO indicator was revised during the project restructuring and targets for other PDO indicators were adjusted. For this reason a split evaluation of achievement of PDO is carried out based on: (i) the results achieved against the PDO indicators and targets at the time of restructuring and (ii) the results achieved against the PDO indicators and targets at the end of the project. For both parts of the split evaluation, it is considered that investments targeted deprived settlements, since the project was designed and investments selected based on studies that had shown which settlements were the most deprived. Original PDO Efficacy Rating: Low to Modest 46. PDO indicators 1 to 4 in the datasheet measure access to services and infrastructure and remained for the duration of the project, but targets were formally revised during the project restructuring. Targets for access to roads and drainage were in fact revised upwards during the restructuring, in spite of the reduction in scope of works. This was due to a change in methodology to correspond to the definition of World Bank core project indicators. The targets for access to water and sanitation were revised to correspond to the revised program of works. The original PDO indicator 5 measured additional fees collected from market places and truck terminals by municipalities. The achievement of these indicators, at the time of the restructuring and against the original target values, is presented in the table below. Table 1: Achievement of original key indicators Key Indicator (PDO Indicator) Original Achievement at the time of project restructuring target value (December 28, 2011)1 1. Number of people in urban areas provided 42,000 4,067 – 10%. (ISR#7 states 8,125, but this is for with access to all-season roads within a 250 beneficiaries within a 500 meter range. Original meter range. methodology retained for ICR to measure achievement against original indicator values). 2. People with access to improved drainage 5,650 3,125 – 55%. (ISR#7 states 6,250, but this is for in the areas served by the project within a beneficiaries within a 500 meter range. Original 250 meter range. methodology retained for ICR to measure achievement against original indicator values) 3. Number of people in urban areas provided 3,500 3,010 – 86%. with access to improved water sources under the project. 4. Number of people in urban areas provided 4,100 2,250 – 55%. with access to improved sanitation under the project. 5. Additional fees collected from market FCFA 260 FCFA 95 million – 37%. places and truck terminals by municipalities. million 1 Numbers taken from ISR#7 filed in February 2012, for which data corresponds to the time of restructuring. 13 47. As can be seen from the above, the original target for access to water was almost met, targets for access to drainage and sanitation were more than 50 percent met, collection of fees from markets was not substantially progressing while access to roads was far behind target. The latter were the main reasons for restructuring the project. The disbursement rate was 39 percent. The PDO part on access to services was progressing unevenly, but the revenue collection, destined to sustain access to basic infrastructure and services, was not progressing. Overall progress towards achieving PDO was low to modest as measured against the original PDO indicators and targets. Revised PDO Efficacy Rating: Substantial to High 48. The achievement of the PDO, evaluated against the revised PDO indicators and targets in the datasheet, is rated Substantial to High. The PDO part on access to services was fully achieved as measured by the restructured PDO indicators 1 to 4 in the datasheet. The setting in place of effective management systems for markets and the truck terminal (PDO indicator 5), intended to improve revenue generation, was only partially achieved, but progressing well at project closing and is a minor shortcoming, given that LGs are actively setting in place these management systems as foreseen, following completion of construction. According to the feasibility studies the potential annual revenue to LGs from the rehabilitated markets and truck terminal, with effective management systems, is over US$1 million. 49. The positive evaluation of outcome is supported by the intermediate outcome indicators in the datasheet, which show that the LGs learned to program investments and maintain infrastructure during the project, contributing to sustaining access of urban residents to basic infrastructure and services. Although the percentage of annual budget actual expenditure on routine maintenance did not achieve the target (intermediate outcome indicator 2), the underlying budget numbers improved, from total combined municipal revenue of US$4.2 million in 2006 to US$29.5 million in 2012. This lead to substantially higher budget allocations and actual expenditure for maintenance (up from US$235,503 in 2006 to US$1,612,225 in 2012) and more maintenance being carried out compared to expectations. A combined total of 496.8 kilometers of drainage and roads networks received maintenance during the last year of the project, against a combined target value of 155 kilometers. While the improvements in underlying budget numbers are not fully attributable to the PDIL 2 , the effort to improve programming and implementation of maintenance is. The first exercise was very problematic, but by 2010, due to the training and technical assistance provided by the project, the LGs had got a grip on the process and there was a strong link between programming, budgeting and actual implementation. Overall, in spite of an extremely challenging implementation environment, the project has managed to set in place key building blocks for improved municipal management by LGs and MUPH, laying the groundwork for continued improvements to the overall local government system. At the end of the project the LGs are maintaining infrastructure much better than before the project and better able to sustain access of urban residents to infrastructure and services. 2 The PDIL financed training for all LGs and accounting software for Dosso, but a major factor behind the improved LG revenues was support from the AFD to the city of Niamey in the form of a local tax manual and support to its implementation. 14 50. The upgrading of the East-West Road (11.56 kilometers) had significant benefits for the 52,737 beneficiaries. According to the project impact evaluation conducted by the BNC, it reduced the distance to public transport for the beneficiary population in the densely populated neighborhoods on the Northern fringe of the city from 1,000 to 400 meters and serves 13 schools, a main livestock market and two neighborhood markets, and a main mosque. It further offers an alternative to another main road (Mali Béro) which is particularly congested during peak hours. The economic benefits to the population are also substantial. The impact evaluation estimates that land value has doubled along the road, that 164 new shops have been created along the road and that in the area of 500 to 900 additional full-time jobs have been created. 51. Access to water and sanitation in poor neighborhoods increased, and infrastructures generate revenues to LGs, further contributing to sustaining services. A total of 6,727 people gained access to water and sanitation through the project through the construction of water kiosks and public latrines (which also contain shower facilities). According to the impact evaluation, this has reduced the price of water for beneficiaries. The project has also assured additional revenue to Dosso and Maradi from latrines, since they receive a monthly fee from operators of these facilities. Maradi has also introduced payment from water kiosks at a manageable level for operators. 52. Construction of health centers in poor neighborhoods benefited about 30,000 people, according to the impact study. The construction of the Lossogoungou health center reduced distance to the nearest health facility by at least 3 kilometers for the 11,000 inhabitants of the Western part of Niamey I commune. The Dar Es Salam health center reduced distance to a health services by at least 1 kilometer for the 19,000 inhabitants of the Northern part of Niamey II commune. 53. School infrastructures and schooling conditions were improved significantly through construction of classroom, latrines, and school enclosures. The construction of 86 classrooms benefits 3,440 pupils who previously received teaching in straw huts. 19,210 pupils benefited from construction of latrines in the targeted schools. Enclosing was constructed around 13 schools, of which 2 along the East-West Road, which means that, according to headmasters, pupils are safer, parents are more likely to send girls to school, and vegetable gardening has started in several schools, without risk of destruction by stray animals, and has been integrated into teaching. 54. Other benefits include an increased number of improved market stands and improved waste removal. The Marché Central in Maradi will increase the number of stands from 1,900 to 3,600 and the upgraded Petit Marché in Dosso will also increase the number of stands, so that a total of 3,924 new or improved stands will be constructed by the project (including the 40 parking places in Dosso). Finally, the provision of 15 solid waste containers to Niamey has increased the capacity to remove waste by 25 tons per month. 3.3 Efficiency Rating: Substantial 15 55. Ex-ante economic analysis suggested good economic rates of return on investments, which is confirmed by analysis carried out for the ICR. The economic justification in the PAD was based on the quantifiable benefits and ex-ante economic analysis was carried out on the main investments (East-West Road in Niamey, a sample of secondary roads in all cities, markets and truck terminals in Maradi and Dosso). The analysis covered US$8.66 million of investments, which was found to have IRRs ranging from 17 to 42 percent and total NPV of US$31.64 million. For the ICR, the economic analysis is updated for the investments initially analyzed and actually implemented, based on actual figures. The updated economic analysis confirms the economic justification of the initially analyzed program of investments, with IRRs of 10 to 57 percent and NPV of US$27,512,227 for investments of US$11,375,767 (corresponding to 61 percent of all investments). This is based on conservative estimates and without quantifying benefits from increased economic activity in the markets and truck terminal. Disbursement of 99 percent of the restructured project amount is also indicative of implementation efficiency. The full justification of the efficiency rating can be found in Annex 3, including details on assumptions. 3.4 Justification of Overall Outcome Rating Rating: Moderately satisfactory 56. The overall outcome is rated moderately satisfactory. The outcome rating against the original PDO indicators is moderately unsatisfactory, which is a result of the combined evaluation of substantial relevance, low to modest efficacy and substantial efficiency. Against the revised PDO indicators, the project outcome is rated satisfactory as a result of substantial relevance, substantial to high efficacy, and substantial efficiency. The table below provides the weighted average of outcome ratings against the proportion of funds disbursed before and after the restructuring. Table 2: Overall outcome evaluation weighted against original and restructured PDO indicators Against Original PDO indicators Against Revised PDO indicators Overall Rating Moderately Unsatisfactory Satisfactory Rating Value (a) 3 5 Weight (% disbursed before and after 39% 61% 100% restructuring)3 (b) Weighted value (a*b) 1.17 3.05 4.22 Final Rating Moderately (rounded) Satisfactory 57. The rating is further justified by the satisfactory achievement of the PDO at the end of the project, to which the highly relevant restructuring contributed. The PDO was relevant at the time of appraisal to ensure improvements to the LG system and remains relevant at the time of 3 On a rating scale from 1 to 6 with 1 being highly unsatisfactory, 6 being highly satisfactory. 16 the ICR. The restructured project achieved most PDO indicator targets, and the indicators most relevant to measure the ability to sustain improvements are either fully achieved or in the process of being achieved (actual maintenance was greatly surpassed and efficient management systems are in the process of being implemented), proving that a culture of maintenance is taking hold. These results were achieved in spite of the project being implemented in extremely challenging circumstances, due to the coup d’état, changes of ministers and mayors, reorganization of city institutions, and reassignment of key staff at all levels. Timing and content of the restructuring was opportune. The economic analysis demonstrates overall substantial economic benefits of the project. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 58. There was a communication deficit on the part of LGs, which resulted in limited ownership of project investments by the beneficiaries. A lack of good quality M&E data also made it difficult for the BNC to communicate adequately with the LGs, and the beneficiaries were not sufficiently involved in implementation. 59. The project targeted investments in the areas showed by the city development strategies and household survey to be the poorest areas. However, the dropping of the road investments in Niamey Commune V was unfortunate, as the local populations were expecting these investments and had already voluntarily relocated temporarily, but also unavoidable given cost overruns and long process to treat the complaints regarding the procurement of paving blocks. 60. All market infrastructures rehabilitated by the project are now equipped with fire hydrants, a substantial safety improvement as urban markets in Niger have previously been prone to fires. (b) Institutional Change/Strengthening 61. The project focused on improving management capacity in LGs, and learning by doing allowed the project LGs to develop ability to implement investments. (c) Other Unintended Outcomes and Impacts (positive or negative) 62. There were no other unintended outcomes. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 63. Not applicable. 4. Assessment of Risk to Development Outcome Rating: Significant 64. The risk that improvements to local governance and accountability achieved by the PDIL will not be maintained is rated Significant. Overall, it is likely that project outputs will continue to provide benefits in the project LGs, which have demonstrated clear ownership of investments and improved capacity to plan and implement maintenance. Implementation of the recommendations from the institutional study is only beginning, and will necessitate changes to the overall LG system, which can create resistance. A follow-on operation is in the pipeline for Bank financing, which can potentially lessen risks, but given the prevailing context with overall 17 weak capacity in the government apparatus and recent history of political instability, a “significant� risk rating is justified. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Satisfactory 65. The Bank’s main contribution through the lending phase consisted in developing the overall concept and focusing investments in line with sector priorities, making use of existing studies and ESW, and also proposing implementation arrangements most likely to mitigate identified capacity constraints. The Bank should have assured that detailed design studies had been done for major investments prior to appraisal, but costs were estimated based on feasibility studies. It could not be foreseen that the 2008 financial crisis would result in cost increase throughout the region. (b) Quality of Supervision Rating: Satisfactory 66. The Bank was actively supervising the project throughout, and was instrumental in overcoming the main project difficulties relating to changes in central and local government. Missions were regular. A total of 14 implementation support missions were carried out, of which seven to support the continued advancement of project activities during the military transition period from February 2010 to April 2011 and four alone to assist in preparing and participating to the MTR. The Bank actively pushed the government to make all infrastructures operational and continually followed up with the BNC to make sure management systems would be in place for the market and parking facilities. The Bank also worked with the government to find resources to commence construction of the Maradi market, following the decision to have the shops financed by the government. 67. The Bank could have downgraded project ratings earlier in ISRs to improve realism, but in the end the restructuring was carried out as soon as possible following the end of military transition and considering the timing of inauguration of newly elected mayors. The Bank repeatedly drew the attention of the government to the need to assure adequate follow-up to the two key studies on delegated contract management and sector framework and transfer mechanism. In the extremely difficult implementation circumstances and with the underperformance of especially NIGETIP, the Bank could not realistically have contributed more to assuring project results. (c) Justification of Rating for Overall Bank Performance Rating: Moderately Satisfactory 68. The shortcomings at appraisal notwithstanding, the Bank did consistently provide an adequate level of implementation support and assisted the client to carry out a restructuring that could realistically be implemented given the time allowed. The MS rating at appraisal and S rating for implementation combine into an overall Bank performance rating of MS. 18 5.2 Borrower Performance (a) Government Performance Rating: Moderately Unsatisfactory 69. Rating government performance poses several difficulties due to the fact that the constitution was suspended during the coup d’état. The project was therefore implemented within a very difficult environment. The request from the President to reorient the project right after effectiveness shows limited coordination between the executive and the government during project preparation and limited government involvement in project design. 70. The Project Steering Committee did not adequately fulfill its role to regularly follow up on activities and take necessary steps to correct underperformance of the project. The PSC met regularly, but participation of the key members was irregular. In the beginning the mayors of Niamey were often absent, while throughout the project, the secretary general of the LG oversight ministry did not participate. 71. Following the transfer of the project oversight from the Prime Minister’s office to the MUPH, the latter did not fully respect the Project Implementation Manual and interference in in the management of investments in Niamey V was the reason for dropping these investments. The oversight ministry did participate actively in all project missions following the MTR, but the government was not able to make substantial progress on implementing recommendations from key studies before the project closed, although this is happening post-completion. Overall, the government performance was moderately unsatisfactory during preparation, unsatisfactory to moderately unsatisfactory until the MTR and moderately satisfactory following the MTR, justifying an overall MU rating. (b) Implementing Agency or Agencies Performance Rating: Moderately Unsatisfactory 72. The ICR rates the performance of BNC, NIGETIP, and LGs separately. The BNC Rating: Moderately Satisfactory 73. The BNC had mixed performance during preparation and implementation. To start off with, project preparatory studies were not delivered on time, which led to a lengthy preparation period. During implementation, the activities implemented directly by the BNC (Components A and C) were all completed and the BNC scaled up support to LGs when new, untrained staff arrived. However, the BNC did not fully fulfill its role as coordinating entity and did not react timely to cost overruns and had shortcomings on M&E and follow-up on safeguards issues, including the involvement of the National Environment Agency. Another shortcoming relates to timely follow-up on implementation of management systems for market and parking facilities. The fact that the project actually ended up being implemented, in spite of the challenging environment, is in large part due to the BNC, which improved performance following the MTR and actively supervised the performance of NIGETIP. Although the performance is mixed, the 19 improved performance of the BNC following the MTR, with a coordinator dedicated to the PDIL, justifies a rating of Moderately Satisfactory. NIGETIP Rating: Unsatisfactory 74. The performance of NIGETIP was unsatisfactory, as the agency was the primary reason for implementation delays, leading to restructuring and downscaling of the project and did not communicate well with its clients. During implementation, the BNC often had to provide additional support to NIGETIP, although this agency was hired to fully handle procurement and contract management for a large part of the investment program, and received payment to that effect. NIGETIP was given the responsibility to conduct activities aimed at strengthening the private sector. However, as the project evolved, focus was rather placed on strengthening capacity of NIGETIP. The LGs expressed a high level of dissatisfaction with their collaboration with NIGETIP, as they did not feel properly informed of project advancement, in spite of being the client of NIGETIP, which further allowed revisions to contract amounts, exceeding the available envelopes without consulting the client (the LGs). This is an essential reason for the cost overruns and reduction in the activities implemented. NIGETIP was regularly requested to improve communication with both the BNC and local governments, but communication only improved towards the BNC. The operating cost of NIGETIP was 5 percent of investments, a standard level of payment for delegated contract management. However, the service delivered was substantially below what was to be expected, although improving towards the end of the project. Local Governments Rating: Moderately Satisfactory 75. The LGs also had mixed performance during preparation and implementation, partially explained by the context. The city authorities were actively involved in project preparation, but had difficulties to implement the parts of Component B under their responsibility, with long procurement delays. This is partly explained by the lack of prior knowledge of this type of activity and the changes to context, which was out of the hands of the LG authorities. The cities did make substantial efforts to live up to engagements in the city contracts, and did allocate a substantial amount of resources for maintenance activities leading to the actual maintenance on the ground surpassed what was foreseen. However, the LGs did not assure that focal points for monitoring social safeguards were playing their prescribed role. (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Unsatisfactory 76. Both the government and implementing agencies experienced challenges that impaired their performance during preparation and implementation, placing the project at risk for extended periods of time. The government has not yet implemented key recommendations, the BNC only substantially improved performance following the MTR, NIGETIP substantially underperformed throughout the project, which was the main reason for the restructuring, and the LGs had mixed performance, justifying an overall rating of Moderately Unsatisfactory. 20 6. Lessons Learned 77. Projects in Niger need a strategic, robust, and multifaceted approach to training and capacity building. The project showed that in spite of identification of capacity gaps in the BNC, LGs, NIGETIP, and the construction industry in general, and inclusion of substantial capacity building activities, the starting point is very low and the project was vulnerable to institutional and organizational changes. For this reason, training and capacity building should be provided for all project stakeholders, designed to start during project preparation and continue throughout the implementation period in anticipation of elections, institutional changes, and staff turnover. Effectiveness could be further enhanced by developing demand through providing performance incentives for the various stakeholders to make adequate use of the training provided. 78. The link between the operation and the project context determines how far reforms can be pushed; care should be taken not to lose momentum. Any support to reforms should be based on a thorough analysis of the country’s political economy. Institutional changes take time, and MUPH will need further support to be able to fully drive sector reforms – future projects need to reflect on the use of national procedures and existing capacities in central and local government to support this objective. Care should be taken to avoid that the time-gap between operations necessary to analyze results and design the follow-on does not result in loss of momentum gained, leaving the sector without support in the meantime. 79. Delegated contract management has the potential to mitigate capacity shortcomings in project implementation, but the approach needs to be institutionalized and scaled up to succeed. In other countries in the region, central and local governments alike freely make use of delegated contract management in areas where they do not have expertise. In Niger, the government is poised to adopt the regulatory framework for delegated contract management, which will open up the market to new service providers and free competition. However, the regulatory framework alone will not do the job, since the reputation of delegated contract management is in tatters in Niger, after the performance of NIGETIP, and the market will only materialize through a coordinated approach between the government and donors to create the market, and which should also in parallel consider developing a market for support to works owners. 80. The contractual approach to results through city contracts is useful but its full potential as a tool for public participation and accountability of local governments should be developed. A recommendation was made already during the first project mission to implement real consultative forums at the neighborhood or city level to facilitate more direct and ongoing involvement of the population in setting investment priorities, participate in operation and maintenance and monitor local government performance. This recommendation should have been followed up, and could potentially have meant stronger pressure on LGs to assure timely implementation of efficient management systems for markets and truck terminals and would have facilitated involvement of beneficiary populations during the process of restructuring the project. The links between the city contracts and the envisaged fiscal transfer mechanism need to be explored and clarified. 81. Attention needs to be paid up-front to M&E aspects and early warning systems. M&E was a relatively new concept to most project participants, and no local expertise exists. Therefore training, systems support and adequate human and financial resources need to be assured to link 21 monitoring of progress of works, safeguards implementation, disbursements, achievement of indicators, implementation of recommendations and action plans, and sustainability of results. 7. Comments on Issues Raised by Grantee/Implementing Agencies/Donors (a) Borrower/Implementing agencies 82. The draft ICR, translated into French, was shared with the Borrower twice for comments. Overall, the Borrower found the tone of the initial draft to be too negative. The comments were incorporated. Borrower’s substantial comments on the advanced draft concerned details on the process surrounding the reconstruction of the Maradi Marché Central, commissioning of infrastructures, communication between the BNC and NIGETIP, and involvement of beneficiaries. These comments have been incorporated in the final draft, as detailed in Annex 7. (b) Cofinanciers/Donors 83. There were no cofinanciers. (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society) 84. There were no other partners or stakeholders. 22 Annex 1. Project Costs and Financing (a) Project Cost by Component (in US$ Million equivalent) Appraisal Restructured Percentage of Actual (c) Percentage of Components Estimate (a) Estimate (b) Restructured (US$ M) Appraisal (c/a) (US$ M) (US$ M) (c/b) A: Capacity building 1.96 1.40 1.20 61.1% 85.6% B: Municipal investments in 20.13 18.60 18.69 92.6% 100.3% Niamey, Maradi and Dosso C: Support to implementation, 2.16 2.07 1.69 77.3% 80.6% monitoring and evaluation Total Baseline Cost Unallocated (price and physical 4.85 0.73 0.00 0.0% 0.0% contingencies) Total Project Costs PPF refinancing 0.9 0.9 1.03 114.0% 114.0% Total Financing Required 30.00 23.70 22.54 75.1% 95.1% (b) Financing Appraisal Restructured Percentage of Actual (c) Percentage of Source of Funds Estimate (a) Estimate (b) Restructured (US$ M) Appraisal (c/a) (US$ M) (US$ M) (c/b) IDA 30.00 23.70 22.54 75.1% 95.1% 23 Annex 2. Outputs by Component 1. Below is a list of outputs by component with some explanatory notes on links to project outcomes, complementing the description in the main text. Component A: Capacity building Appraisal cost: US$1.96 million. Percentage of appraisal cost: 6.5%. Restructured cost: US$1.40 million. Percentage of restructured cost: 5.9%. Actual cost: US$1.20 million. Percentage of actual total project cost: 5.3%. 2. Component outputs are as follows: (i) Local governments:  Technical assistance to local governments: o Procurement: Recruitment of a consultant to develop a simplified procurement manual. o Solid waste management: Study on evaluation of existing practices and improvement plan for each city. o Management of income-generating facilities: Study on evaluation of existing practices and development of terms of reference for improved management system. o Infrastructure Maintenance programs: Consultant to help local governments identify PMPs for 2009 and 2010, linking programmed activities to the budgets for the first time. o Maradi Market: Support to help the LG find investors for the remaining and necessary construction, which was not included in the PDIL and setting in place a management agent.  Training: o Project management: 5 modules dispensed in 2009 and 2010 for about 100 LG employees. o Financial management: 2 sessions in 2010 and 2011 on budget preparation and execution for 55 key LG staff. o Procurement: 1 session in 2010 for 20 directors of LG technical departments and procurement staff. o Procurement: 1 session for 10 NIGETIP staff in 2010. o Contract management: 1 session in 2011 for 13 directors of LG technical departments and NIGETIP staff. o IT: 1 session in 2012-2013 for 20 MUPH staff on use of technical software (AUTOCAD, ARCHICAD, ARCGIS). o Study tour in 2010 to Benin and Togo for 10 representatives of LGs, ministerial staff, and the BNC to learn about public participation in project implementation.  Equipment: o Complete computer equipment to all project LG technical departments. o Internal network for Dosso. o Provision of 15 solid waste containers for Niamey for the East-West Road. 24 (ii) Central and deconcentrated ministries:  Drainage master plans for Maradi and Dosso.  Finalization of urban reference plan for Dosso.  Study on the legal framework for delegated project management: law and decrees of application. After submission to the parliament, it was found that a law was not needed and that the government could adopt the proposed measures through sector regulation. This adoption is pending.  Study on a national framework for the urban sector and fiscal transfer mechanism. The framework is foreseen implemented as part of the 2012-2015 PRS.  Urban management tools: development of a manual on urban, organizational, and financial audits, urban reference plans and city contracts, available in 500 examples. The vulgarization should have happened before project closing but the TORs were not prepared on time by the MUPH.  IT and software: o Basic IT kit to the five ministerial departments involved in project implementation. o MUPH: full IT kit (15 computes, 2 photocopiers, video projector, small equipment and technical software), internal network and development of a website to improve visibility of the ministry. (iii) Private sector:  Recruitment in 2012 of two consultants to supervise the contractors and consultants executing works in Niamey and Maradi. The activity was originally planned to be broader support to the private sector (see below, for the planned but not implemented activity). 3. Activities that were dropped at the MTR restructuring and were not implemented are:  Follow-up missions to implement recommendations from the solid waste management study – not implemented due to funding constraints.  Series of training on bidding practices (price calculation), works site organization, works supervision, and socio-environmental aspects – not implemented due to non-performance of the consultant recruited. Component B: Municipal investments in Niamey, Maradi and Dosso Appraisal cost: US$20.13 million. Percentage of appraisal cost: 67.1%. Restructured cost: US$18.60 million. Percentage of restructured cost: 78.5%. Actual cost: US$18.69 million. Percentage of actual total project cost: 82.7%. 4. All infrastructures retained at the project restructuring were completed at project closing. Component outputs are as follows: 25 Niamey:  Upgrading of the East-West inter-communal road (serving the communes Niamey I, II, III, and IV) and Avenue Manga (11,560 meters total).  Construction of drainage in Saga (300 meters).  Construction of 3 water kiosks.  Construction of 52 classrooms.  Construction of 36 school latrines.  Construction of 17 water points in schools.  Construction of 6,855 meters of school enclosing for 15 schools.  Construction and equipment of two health centers (Lossogoungou and Dar Es Salam). Maradi:  Resurfacing of Rue Bagalam 20, Rue Sabongari 34 and Rue Mokoyo 8 (1,700 meters total).  Reconstruction of the drainage canal of Bagalam (1,160 meters).  Upgrading of the Marché Central on 7.5 hectares with construction of 4 transformer stations, 8 sanitary blocks, 8 water fountains, 4 areas for prayer, 11 warehouses, 1,590 internal paved roads, 12,000 square meters for parking and external traffic, public lighting and fire hydrants, rehabilitation of two storehouses, of which one into a butchery).  Construction of 5 water kiosks.  Construction of 3 public latrines and shower facilities.  Construction of 34 classrooms.  Construction of 10 school latrines. Dosso:  Paving of Rue Simbeye and Rue Oudounkoukou (560 meters).  Construction of Koiratégui and Paierie-CM-Siège ANDP drainage canals (1,800 meters).  Upgrading of the Marché Central – redeveloping the old butchery and construction of two additional warehouses.  Upgrading of the Petit Marché, specialized in meats and vegetables.  Construction of the truck terminal on 4 hectares.  Construction of 6 water kiosks in Koiratégui.  Construction of two blocks of latrines and showers in Koiratégui. 5. Activities that were dropped formally at the restructuring following the MTR and were not implemented are: Niamey:  Roads (8,400 meters total): o Paving of Avenue Tahoua, Avenue Diffa, Rue KI47, Rue Collectrice Zarmagandeye, Rue BB36, Rue TJ29, Avenue de Gamkallé, Tchanga road and CSI-Aéroport road. o Resurfacing of Rue LZ54, Rue 174 and Rue RF2.  Construction of drainage of Rue NM9 (605 meters). 26  Upgrading two secondary markets – dropped already after the request from the President of Niger to focus on structuring investments.  Upgrading and provision of equipment for 3 youth centers.  Improvement of a municipal building – dropped already after the request from the President of Niger to focus on structuring investments.  Fencing for a library – dropped already after the request from the President of Niger to focus on structuring investments. Maradi:  Resurfacing of Rue Bagalam 21 (650 meters).  Construction of the truck terminal – chosen essentially because Maradi wanted to focus resources on the construction of the Market.  Upgrading a building for technical services – dropped already after the request from the President of Niger to focus on structuring investments. Dosso:  All infrastructures foreseen for Dosso were constructed. Component C: Support to implementation, monitoring and evaluation Appraisal cost: US$2.16 million. Percentage of appraisal cost: 7.2%. Restructured cost: US$2.07 million. Percentage of restructured cost: 8.7%. Actual cost: US$1.69 million. Percentage of actual total project cost: 7.4%. 6. Component outputs are as follows:  Operating cost (payment of BNC consultant salaries, IT equipment and software, transport, consumables, etc.).  Annual external financial audits.  Two technical audits.  Impact evaluations at MTR and end of project.  Project workshops  Information, communication and education campaigns. 27 Annex 3. Economic and Financial Analysis 1. The economic analysis carried out for the ICR follows the methodology presented in the PAD and used at appraisal to evaluate cost and benefit for part of the initially planned program of investments. Economic justification 2. Most of the investments (road networks for access to poor districts, drainage works, construction of classrooms, health facilities, etc.) in the project provide non-quantifiable economic benefits, comprising social and environmental gains expected in the targeted cities. Investments provided the following quantifiable and non-quantifiable socioeconomic gains:  Strengthened capacity of local governments to provide services within their mandate.  Job creation and promotion of private sector participation in service provision.  Service to isolated poor districts.  Increased revenues for the communities through increased revenue from market and parking facilities.  Reduction in vehicle maintenance and transport costs, owing to improved road conditions and shorter distances to public transport services.  Improved quality of life in the targeted areas, as a result of better living conditions.  Development of activities in areas currently without service.  Improvement in health and household incomes, owing to the reduction in waterborne diseases and health costs.  Reduction in income spent on water due to construction of water kiosks. 3. Given the disparity among the interventions for the three cities, reflecting the differences in conditions related to access to services and their physical characteristics, the overall ERR and the overall NPV was not calculated at appraisal and is not calculated for the ICR. Roads 4. The economic analysis of the urban road networks was conducted at appraisal and for the ICR using the HDM-IV model. This model reflects road conditions, represented essentially by deterioration indicators (the most important being road roughness) on vehicle consumption and operating conditions (change in annual number of kilometers). This produces a calculation of the vehicle operating cost on the section of the road studied, along with its condition indicators. The International Roughness Index (IRI) values used at appraisal and for the ICR were 12 for a “without project� scenario and 3 for a “with project� scenario. Both studies (ex-ante and ex-post) use a 20 year lifespan of investments and a 12 percent discount rate. Maintenance costs are estimated to be five percent of the actual investment costs, and assumed to be allocated every five years. 5. The estimate of economic benefits is the difference between the vehicle operating costs in both cases (“without project� and “with project�). The analysis quantifies the combined gains in vehicle operation, the volume of which (measured in terms of vehicle x kilometers) is reduced 28 because of the project. Lower road maintenance costs for the community (costs lowered by a reduction in vehicles x kilometers) as well as time savings (in relation to a “without project� scenario) for project users are disregarded (for the appraisal calculations as well as for the ICR) to provide a conservative estimate. Benefits accruing to the community and attributable to the East-West Road were taken into account and estimated at US$6 per unit and per year. This assumption is deemed to be still relevant and accurate based on the impact evaluation and field visits to the East-West Road, which showed that economic activity has picked up along the road, construction of at least 30 buildings was ongoing and shared transport services (taxis) were available (which was not the case before the project). 6. For the ICR, the analysis was repeated for the main investments, the East-West Road and Avenue Manga, which were constructed together, and which account for 36 percent of Component B. Average traffic flows was based on updated traffic counting for the ICR and generated and diverted traffic estimated to be zero (against 50 and 30 percent respectively for the appraisal analysis). While the ex-ante economic analysis had estimated a total of 5,133 average annual daily traffic units in the first year after operation, the ex-post economic analysis is based on the actual of 5,903 average annual daily units. 7. The benefits are monetized and linked to investment and operating costs, which results in the calculation of indicators that measure the project's socio-economic impact from various perspectives, including: The current net benefit or Net Present Value (NPV), which is the difference between current benefits and current investments over a twenty-year period, at a rate of return of 12 percent. The Internal Rate of Return (IRR), which is the value of the theoretical discount rate calculated so as to equalize the present value of cost with that of benefit. 8. The calculations give the results in the table below. We note that in spite of higher than expected investment cost, IRR is also higher than at appraisal, due to higher than estimated traffic volumes. The East-West Road and Avenue Manga are analyzed as one for the ICR, since they intersect and were carried out as one investment. Investment Appraisal ICR Estimated Actual investment NPV (US$) IRR investment NPV (US$) IRR cost (US$) cost (US$) East-West Road 3,086,000 26,383,262 42% (Niamey) 6,668,679 25,645,193 57% Avenue Manga 649,110 2,199,382 26% (Niamey) Facilities 9. As for the roads, the economic analysis of facilities uses the cost-benefits method. In this case, an effort is made to assess the impact of market facilities on the economy, for the community in the broadest sense. The benefits are defined as all new revenue allocated to the domestic agents, to which the increase in domestic consumption may possibly be added. Wages, for example, which are categorized as costs in the financial analysis, become benefits (income distribution). 29 10. Thus, within the context of the assessment of the benefits to be taken into account for these market and parking facilities, a distinction is made between direct benefits, which include revenue, and all the effects brought about by the construction of these facilities on the economy. Since the estimates of revenues and other benefits have not changed from appraisal (none of the infrastructures were in operation at the time of finalizing the ICR), the economic analysis was updated using unchanged assumptions but actual cost. For each facility, the investment lifespan was set to 25 years, 12 percent discount rate, and income accruing to the local government from market fees was set to increase by 3.5 percent every three years. Markets 11. Rehabilitation works on the Marché Central in Maradi and Petit Marché in Dosso will help to increase capacity and improve the levels of service. Feasibility studies estimated that direct revenue following rehabilitation works will be US$120,000 annually. This revenue, which was calculated based on financial analysis, included only revenue from rent, storage, and various services. 12. The Marché Central in Maradi was run-down and no longer met safety requirements at appraisal. Internal networks (roads, drainage, electricity, water) and facilities (parking, sanitation) were nonexistent or inadequate, thereby creating hygiene, health, and safety problems. Despite this situation, the market's tax potential (without any development) stood at US$170,000 annually, demonstrating the importance of commercial activities conducted there, but this potential was not being realized. The financial analysis of the development variables conducted as part of the feasibility studies estimated direct revenue (after development of the internal networks and the rehabilitation of central warehouses) at approximately US$277,000 annually. Truck Terminals 13. In addition to providing parking facilities, the proposed works will, once operational, contribute to the development of related commercial activities and make the facilities more attractive to users and merchants, thus providing an additional source of revenue for the commune. In this case, direct revenue, which is also assessed in the feasibility studies, is on the order of US$85,000 annually, for a parking volume of 30 to 40 vehicles each day. There is however some uncertainty as to the level of revenues, since the LG and transport operators had not finally agreed on a fee at the time of updating the economic analysis. 14. Beyond the revenue generated by the construction of facilities, it bears noting that the urban community of Maradi and the urban commune of Dosso will have a pleasant living environment. Hygiene, sanitation, and safety, key components for city management, will be improved through the rehabilitation of the markets and construction of truck terminals. 15. The benefits taken into account in the economic evaluation of markets and the truck terminal include only the revenue generated by the improvements, as well as taxes, based on the feasibility studies. These benefits alone, albeit partial, account for the viability of investments made, as presented in the table below. The increased economic activity generated is not quantified in the analysis, providing for a very conservative estimate of NPV. 30 Investment Appraisal ICR Estimated Actual investment NPV (US$) IRR investment NPV (US$) IRR cost (US$) cost (US$) Dosso Markets (Marché 590,205 389,224 22% 577,774 534,328 21% Central, Petit Marché) Maradi Market (Marché 1,732,500 578,573 17% 3,709,361 988,634 10% Central) Dosso truck 321,090 480,349 34% 439,953 344,072 19% terminal 16. The poorer than expected result for the Maradi Market is explained by the higher than expected investment cost, combined with the fact that no income will be generated for the local government for at least two years more while the enclosing shops are being constructed. The market and parking facilities together account for 25 percent of Component B investments. Conclusion 17. The economic justification in the PAD was based on the quantifiable benefits and ex ante economic analysis was carried out on the main investments (East-West Road in Niamey, a sample of secondary roads in all cities, markets and truck terminals in Maradi and Dosso). The analysis was based on “without project� and “with project� scenarios and using a 12 percent discount rate. The analysis covered US$8.66 million of investments, which was found to have ERRs ranging from 17 to 42 percent and total NPV of US$31.64 million. 18. The updated economic analysis confirms the economic justification of the initially analyzed program of investments, with IRRs of 10 to 57 percent and total NPV of US$27,512,227 for investments of US$ 11,375,767 analyzed. The cost-benefit analysis was carried out on 61 percent of Component B investments. 19. Since this is a conservative comparison, which only incorporates quantifiable benefits and does not include non-quantifiable benefits, the cost-benefit analysis is found to be satisfactory. 31 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Lending Christian Diou Senior Municipal Engineer, TTL AFTU2 Sylvie Debomy Senior Urban Specialist AFTU2 Chantal Reliquet Senior Urban Specialist AFTU2 Zié Ibrahima Coulibaly Water/Infrastructure Specialist AFTU2 Alicia Casalis Urban Infrastructure Specialist AFTU2 Hélène Bertaud Senior Counsel LEGAF Wolfgang Chadab Finance Officer LOAG2 Mamadou Yaro Senior Financial Management specialist AFTFM Africa Eshogba Olojoba Senior Environmental Specialist AFTEN Abdoul-Wahab Seyni Social Development Specialist AFTCS Eric Yoboue Lead Procurement Specialist AFTPC Ibrah Rahamane Sanoussi Procurement Specialist AFTPC Alphonse Soh Civil Engineer AFTU2 Connie Kok Shun Senior Program Assistant AFTU2 Supervision/ICR Zié Ibrahima Coulibaly Senior Infrastructure Specialist, TTL AFTU2 Christian diou Senior Municipal Engineer AFTU2 Sylvie Debomy Senior Urban Specialist AFTU2 Ibrah Rahamane Sanoussi Senior Procurement Specialist AFTPW Abdoul-Wahab Seyni Senior Social Development Specialist AFTCS Africa Eshogba Olojoba Senior Environmental Specialist AFTEN Beth Wanjeri Mwangi Financial Management Specialist AFTMW Hélène Bertaud Senior Counsel LEGAM Wolfgang Chadab Senior Finance Officer CTRLA Alphonse Soh Civil Engineer AFTU2 Hadidia Diallo Djimba Program Assistant AFMNE Salifou Noma Team Assistant AFMNE Connie Kok Shun Senior Program Assistant AFTU2 Christian Eghoff Consultant, ICR author AFTU2 32 (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle US$ Thousands (including No. of staff weeks travel and consultant costs) Lending FY06 39.5 65.8 FY07 40.8 85.2 FY08 35.8 160.1 Total: 116.1 311.1 Supervision/ICR FY09 25.4 77.4 FY10 19.1 74.3 FY11 15.4 78.5 FY12 20.0 52.7 FY13 12.0 72.3 Total: 91.9 355.2 33 Annex 5. Beneficiary Survey Results (N/A) 34 Annex 6. Stakeholder Workshop Report and Results (N/A) 35 Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR (a) Summary of the Borrower’s ICR The ICR Team’s translated summary of the original French Borrower ICR is presented below. Start summary 1. INTRODUCTION This report provides an evaluation of the project while evoking the performance of the various stakeholders in the implementation of the project, its impact and the lessons learned. 2. PROJECT IMPLEMENTATION 2.1. Objectives and the overall description of the project The development objective of PDIL is to increase and sustain access of urban residents to basic infrastructure and services, particularly those living in deprived settlements. The project has three components: (a) Capacity Building (b) Municipal Investments for Niamey, Maradi and Dosso, and (c) Support to implementation, monitoring and evaluation. The project is funded entirely by IDA, including taxes. For municipal investments, the envelopes for each of the project cities are based on the relative weight of population and municipal revenues collected. The allocation of funding for municipal investments was recorded in city contracts signed between the beneficiary cities and the BNC on behalf of the government. These city contracts include three programs: - The Priority Investment Program (PIP) for municipal investments, fully funded by PDIL. - The Institutional Support Program (ISP) containing capacity building activities, also fully funded by the PDIL. - The Priority Maintenance Program (PMP) fully funded from the budget of the recipient municipality and devoted to the maintenance municipal of infrastructure and equipment. In addition to the responsibility for the overall implementation of PDIL, the BNC is directly responsible for the execution of Components A and C. The cities of Niamey, Maradi and Dosso are responsible for the implementation of Component B, with use of delegated contract management through NIGETIP for investments over a ceiling (US$150,000 for Dosso and US$250,000 for Niamey and Maradi). 2.2 Project Performance 2.2.1 PDO achievement The achievement of PDO is measured through the outcome indicators. The situation is: - With regard to the indicator No. 1, 60,862 inhabitants were provided with access to all-season roads within a 500 meter range under the project in 2012, meeting the target. - As for indicator No. 2 on drainage, 11,254 inhabitants have gained improved their access to drainage in the cities of Niamey, Maradi and Dosso in 2012. - The indicator on the number of people provided with access to improved water sources under the project was met, with 3,477 beneficiaries in 2012. 36 - Regarding the number of people provided with access to improved sanitation under the project, the result is 3,250. - Finally, with regard to the establishment of an effective management system for commercial facilities, a temporary administrator was appointed for the Maradi Central Market and the managers of the small market and truck terminal were appointed in Dosso. The establishment of a delegated management arrangement cannot intervene for the central Maradi market before the construction of shops initiated by the government. In Dosso, also there is a management in-house for a period of 12 months to get a clear idea of the revenue generated by the equipment before proceeding to delegated management. This means that overall the project has been effective because it has achieved its PDO as measured through the performance indicators. 2.2.2 Component A For indicator 1 (programming of maintenance cost), for the most part, municipalities have met this criterion on the first three years of operation. But in 2012, some shortcomings were noted in the programming of maintenance costs, which can be explained by the fact that the amounts considered in 2012 (after the MTR) are only related to the maintenance of roads and drainage unlike other years when these amounts also incorporated expenditure on maintenance of other infrastructure. Also in 2012, the programs considered are those contained in the budgets of cities (case of Niamey and Maradi), as opposed to the previous communes. For Indicator 2 (annual amount of actual expenditure for the maintenance of roads and drainage), the situation is satisfactory until 2011. For 2012, the partial4 data seem to indicate that the target will not be achieved for the same reasons mentioned above. Regarding maintenance of roads and drainage systems, the three cities showed good performance. For the target of 41 km in 2012, 107.8 km of drainage received maintenance. Likewise the target of 114 km of roads to maintain was surpassed with a result of 194 km, an outstanding performance. 2.2.3 Component B In terms of roads 13.82 km of roads were upgraded in accordance with the intended targets. As for drainage, 3.46 km have been constructed to a target of the same order. Regarding the creation of water points, 14 units were produced for the same target. In addition, the construction markets in Dosso and Maradi is completed, with an estimated 3,924 market stands and parking places created: 2,084 in Dosso and 1,840 in Maradi. 2.3. Outputs by component and sub-component 2.3.1 Component A The component objective is to establish and strengthen management capacity in terms of programming, implementation and management of urban infrastructure and services. 4 The government ICR was prepared before final data was available for LG infrastructure maintenance activities. 37 Component A1. Support to LGs Technical assistance to: - Procurement. To mitigate the weak capacity of municipal services in the field of procurement (raised during the preparation of the project), a consultant was hired to develop a simplified procurement guide and provide training for municipal staff. - Municipal solid waste management. This assistance was provided to assess current practices and capacities of beneficiary cities for household waste management and propose improvements. - Management of income generating infrastructure. The TA analyzed the various possible forms of management and developed draft contract specifications for delegated management. - Development and implementation of maintenance programs for infrastructure. A consultant was hired to help municipalities identify their PMP for 2009 and 2010 and ensure that budgeted amounts corresponded to actual pre-identified activities as opposed to the previous practice consisting in only determining the amounts and then implement maintenance based on the available budget. - Management of Maradi Central Market. This mission helped the city of Maradi in contacts with potential partners for financing market shops which was not initially provided by the PDIL and secondly for the establishment of a market management structure. Training Training provided to LGs focused on: - Project cycle management, provided in 2009 and 2010 in five modules with twenty participants. - Financial management. Two sessions in 2010 and 2011 for 55 people total. - Procurement training for approximately twenty people, completed in April 2010. - Procurement training for NIGETIP staff, completed in May 2010 for ten people. - Contract management training for the directors of municipal technical services and NIGETIP staff in June 2011 (13 people). - Training in the use of technical software (Autocad, Archicad and Arcgis) for twenty officials of MUPH in December 2012 - January 2013. In addition, a team composed of representatives of municipalities, the BNC and ministries made study trips to Togo and Benin in July 2010 to learn from their experience in community involvement in project implementation. Provision of municipal management tools - Development in 2010 of a municipal anti-corruption action plan. - Implementation of the Dosso financial management software. Supply of equipment - The eleven communes of the three project cities each received a complete computer kit for the technical services. - Acquisition of fifteen garbage containers of 5.5 m3 for Niamey for the East-West Road, which allowed the monthly removal of about 25 tons of garbage. 38 Sub-component A.2 Support to central and decentralized entities Sector studies on the development of drainage master plans for Maradi and Dosso and finalization of the urban reference plan for Dosso. These documents include, inter alia, priority projects whose implementation will protect the cities against floods. Strategic studies on: (i) development of a law on delegated contract management with implementation decrees, and (ii) development of a national framework policy for the urban sector and a fiscal transfer mechanism. The first study resulted in the proposal of a law and its implementing decree, which are pending adoption, and leading to liberalization and better regulation of delegated contract management in Niger. The second study proposed a national framework for intervention in the urban sector and a mechanism to transfer resources to the local level. The operationalization of this policy framework will happen through the Economic and Social Development Plan.5 The establishment of urban management tools resulted in a guide for the implementation of urban, organizational and financial audits, urban reference plans and city contracts. Provision of equipment and computer software for five central government entities involved in the implementation of the project. Also, the MUPH benefited from the implementation of an intranet and a website, which has improved the flow of information between departments and provided outside visibility to Department activities. Component A3: Private Sector Support Recruitment of two consultants (one in Niamey and Maradi) to provide implementation guidance to contractors and consultants directly on the ground. While this activity has been an undeniable contribution to the implementation of the works during the execution phase, it is however regrettable that the recruitment of these consultants did not happen upstream of the commencement of work which would allowed them to better assist in development and monitoring of works schedules, for which lack of control has been a major cause of delays. Thus, Component A has resulted in substantial capacity building. Indeed, beyond the material and training support provided, Niger now disposes of two strategic studies that will help modernize its urban policy going forward. 2.3.2 Component B All investments retained after the MTR restructuring have been made, with construction of: - Over 13 km of tarred roads in Niamey and Maradi: 11.5 km in Niamey (East-West Road and Manga Avenue) and 1.7 km in Maradi. - 559 meters of paved roads in Dosso. - 3.5 km of drains in Dosso, Maradi and Niamey. - 14 water fountains in Niamey, Maradi and Dosso. 5 ICR author’s note: This is the Poverty Reduction Strategy, PRS 2012-2015. 39 - 5 toilet blocks in Dosso and Maradi. - 86 classrooms fully equipped with furniture in Niamey and Maradi. - 46 blocks of school latrines in Niamey and Maradi. - 2 fully equipped integrated health centers in Niamey. - 6,855 meters of school enclosures in Niamey (more than 10 schools). In addition, the project has enabled the development of: - The small market in Dosso specialized in butchery and sale of vegetables and condiments. - The large market in Dosso (redevelopment of the former butchery, construction of two warehouses and two additional buildings). - Truck terminal in Dosso, about 4 ha. - Maradi Central Market on 7.5 ha (with the installation of four 630 KVA transformers, eight sanitary blocks, eight fountains, four areas for prayer, eleven warehouses, 1,590 meters of internal paved road, 12,000 square meters of parking and external circulation, street lighting and fire safety and the rehabilitation of two existing storehouses, including one into a slaughterhouse). Thus both structuring project activities namely the development of the East-West Road and Avenue Manga (about 3 billion FCFA) and the development of the Maradi Central Market (about 1.6 billion FCFA ) were carried out. The East-West Road and Avenue Manga are used by on average more than 6,500 vehicles per day. Furthermore, their development increased the value of the surrounding land, and has led to development of economic activities. In the Maradi Central Market, the state has budgeted the funds for the construction of shops, which will at the same time serve as enclosure for the market. Contracts for the construction of these shops are pending signature for a total of about 2.9 billion FCFA and the start of work is expected from the opening of corresponding appropriations. The start of commercial operations at the market will ensue upon the completion of the works, expected to last 18 months. 2.3.3 Component C In addition to the operating costs of the project, Component C has allowed the following activities: - Four annual audits of project accounts. - Two technical audits of work at MTR and end of project. - Two assessments of the economic and social impacts of the project at MTR and end of project. - IEC activities based on a project communication strategy developed in 2010. 2.4 Financing and Management of Project Funds After only a little over 20% disbursement during the first 30 months of the project (more than 60% of the project period), the disbursement rate gradually improved after the MTR to reach 79.31% on January 15, 2013.6 This performance is due to appropriate decisions taken during the MTR and the implication of all project stakeholders in implementation of all retained activities in a timely manner, since an extension of the project was not considered. 6 ICR authors’ note: this number does not include disbursements during the grace period, which is the number retained in the main text. 40 The project has established a financial management system that produces timely financial statements with the required reliability. It should be noted, however, that reports of the third and fourth quarters of 2012 showed a slight delay due to the departure of the financial manager and the late arrival of his replacement. Obligations for audits have been met during the project. The audit reports were regularly provided to the Bank in a timely manner. No abnormalities were recorded in these annual audits. The recommendations focused on general elements of the internal control and implementation was verified during the following audits. 3. Background and Performance of Actors 3.1. Background The implementation of the project was dependent on the prevailing political, institutional and technical environment. The political and institutional environment The project implementation period (December 15, 2008 - January 15, 2013) was characterized by significant political events that brought Niger from the 5th to the 7th Republic, through a military transition period of about 15 month (February 18, 2010 to April 6, 2011). In each project city, there were at least three mayors or administrators to manage the project. These changes in the leadership of cities sometimes affected the entire municipal administration involved in project activities. This instability both in cities and the state has certainly negatively influenced the implementation of the project, without being the main factor for the delays in the first phase. In addition, the erection of urban communities in Niamey and Maradi into communes with special status has resulted, in Niamey, in the divestiture of the former mayors of communes that were signatories of city contracts for the benefit of the City. This was accompanied by a mobility of most staff of the former communes initially trained by the project to city of Niamey without, however, assigning them to PDIL activities. For the city of Maradi, the impact was less due to the fact that the communes at the time already had delegated the management of the project to the urban community. Technical Project implementation was affected by the following: -Renewal of part of key NIGETIP staff early in the project had an impact on the work started under delegated contract management, leading to the low disbursement during the first phase of the project. In addition, the lack of understanding of actors’ roles also caused a delay in the start of activities under delegated contract management, particularly with regard to procurement. - The large number of small contracts (in accordance with the approach) generated a large volume of procurement activities. - The majority of contractors, although providing acceptable references in bids, showed technical and financial weaknesses. - The consulting engineers and works supervisors have also shown some weaknesses that result in deficiencies in technical studies and a lack of rigor in supervising the work. 3.2. Performance of the government authorities 3.2.1. The Steering Committee 41 Its role was to provide overall strategic direction, to supervise the implementation of the project by the BNC, strengthen inter-sectoral cooperation between the various actors, approve work programs and annual budgets and to examine the progress and audit reports. Although the steering committee has improved its performance, it is nevertheless clear that the participation of members with the required level of responsibility has not always been assured, leading to some important decisions not being taken on time. The steering committee met regularly, often in Niamey but once in Dosso and once in Maradi. Meetings in the target cities were utilized to visit the achievements and give the necessary guidance. 3.2.2 Line Ministry The supervision of PDIL was initially under the Prime Minister before being transferred to the MUPH following the MTR. This decision stems from the need to link the project to the government department in charge of urban development. This change in oversight a new dynamic, in particular through the mobilization of the MUPH for the East-West Road and the Maradi Central Market, the two main activities of the restructured PDIL. Thus, the change of oversight allowed the project to be conducted under optimal conditions, effectively tending to all project issues that needed to be brought to the Government for decision making. However, despite the strong commitment of the oversight ministry, the fact remains that the operationalization of strategic studies including the urban sector framework and the mechanism of transfer of resources to the local level remains to be implemented. Moreover, the process of adopting the law on delegated contract management is still not complete, the text is still with the General Secretariat of the Government. 3.3. Performance of implementing agencies (BNC, NIGETIP, cities) 3.3.1 The BNC The implementation of the project was carried out under the overall coordination of the BNC, which was also responsible for the management and fiduciary aspects of the implementation of Components A and C. During the first phase, the BNC faced many difficulties in project implementation. Weaknesses were noted regarding follow-up on technical, environmental and social issues as well as communication on the project. The MTR restructuring had an aimed to address identified deficiencies and ensure better implementation. Thus, the project was provided with its own coordinator (instead of coordinator shared between projects) and the position of infrastructure specialist was split into three positions: technical support, monitoring and evaluation, and monitoring of environmental and social aspects (the latter part-time). These changes have helped to implement project activities within the prescribed time. Specifically, the coordination performance succeeded in bringing together different actors and creating a new dynamic that allowed the project to achieve significant results. Similarly, there has been a greater consideration of environmental and social aspects. However, despite the implementation of some activities (posters and documentary films on the project) the BNC could not fundamentally change the situation in terms of communication, as expected by the MTR. Moreover, some shortcomings persisted in the area of monitoring and evaluation. 3.3.2 NIGETIP The choice was guided in part by weak technical capacity of municipal services and secondly by the fact that NIGETIP was the only Nigerian institution at the time of the evaluation of the project with experience in project management support, having practiced in this area since 1991. 42 Before the MTR NIGETIP was the subject of numerous complaints from other partners, including non-compliance with delegated contract management agreements, weak monitoring of construction sites and of environmental and social aspects, weaknesses of communication with municipalities, difficulties in ensuring procurement in a timely manner and recurring cost overruns of projects even though the amounts were not variable. In short, the agency was criticized for capacity weaknesses, which influenced negatively on the performance of the project, even though the project was based on the assumption of a certain capability, on the part of NIGETIP, to conduct the project in acceptable conditions. Today, the situation has improved with NIGETIP taking action to improve its operational effectiveness. These include the recruitment of two engineers assigned to the East-West Road and Manga Avenue and to the Maradi Central Market, in accordance with the decisions of the MTR. In addition, delegated project management is experienced as problematic by cities, which find they are insufficiently informed by NIGETIP to the point of giving them the impression that they are not the actual contracting authority. 3.3.3 Cities LGs have fully participated in regular meetings to monitor the implementation of project activities organized by the BNC and the meetings of the Steering Committee. The cities budgeted adequate resources for their PMPs, as well as those necessary for the implementation of the resettlement action plans, as compensation for project affected persons was the responsibility of cities. The LGs were involved in project communication with their populations, especially those affected. Contacts were regular, especially with organized civil society groups. Before the MTR the LGs showed low capacity in procurement, in preparation of TORs, approval of engineering studies and monitoring projects, which led to significant omissions, often the causes of delays. However, most of the work under city oversight was completed before the MTR. The second phase was marked by institutional changes with a consequent loss of the expertise gained in the old communes of Niamey, which resulted in long delays in procurement and inadequate project monitoring, especially since the city technical services were weak in monitoring these projects. 3.4. SMEs, Consultants and other partners Several shortcomings were noted in technical studies and works supervision for the engineering consultants, coupled with difficulties to perform the work within acceptable time limits for the contractors. In fact, besides the lack of financial capacity, companies had problems of organization and human resources. The workshop, funded under the PDIL, on the issue of the roles and responsibilities of stakeholders in the implementation of works provided valuable avenues to explore. 3.5 Performance of the Bank The World Bank has assured its participation in the implementation of PDIL by: - The provision of funds to finance activities. - Conducting periodic missions to support the implementation of the project, including provision of consultants on specific issues. 43 - Ongoing exchanges with the BNC for the smooth running of the project through e-mail or video or audio conferences whenever necessary besides the contributions of staff of the resident mission in Niamey. 4. Impacts of the project 4.1. Impacts on the lives of people The project has resulted in a significant improvement in the lives of the target populations, including those living in poor neighborhoods, through improved access to urban transport, proper sanitation and drainage system and drinking water. These positive impacts are reflected in the achievement of performance indicators, already addressed above. Moreover, although the impact was not measured in the results framework of the project, the construction of infrastructure such as classrooms, fencing of schools and health centers also had impacts. Thus the construction of classrooms allowed the replacement of classes in straw huts, contributing to the improvement of working conditions of more than 3,440 students and their teachers, while fencing of schools has contributed to securing children as it has enabled them to perform certain activities such as vegetable gardening or raising poultry as an integral part of the school curriculum. The construction of health centers has contributed to improving the health of populations in the affected areas. 4.2. Institutional Impact 4.2.1 Impacts on LGs Local governments have a new culture of priority maintenance programs, which are prepared annually in targeted cities. The city contracts and delegated contract management agreements became normal working documents, receiving rigorous monitoring by municipalities. Local institutions were reinforced through provision of equipment, budget management software, and training, and confirm having improved their financial management. Through actual experiences in procurement and contract management, despite initial difficulties, they have gradually build capacity in the field, to be further capitalized in the future. 4.2.2. Central government The central directorates of the MUPH and the General Directorate of Territorial Administration and Local Communities were the main beneficiaries. The project has provided tools for urban planning and programming and two strategic studies. Through the development of a national framework for the urban sector and a mechanism for transferring resources to the local level, plus the law on delegated contract management, elaborated by PDIL, Niger disposes of a basis for the implementation of its future urban policy. The Intermediary Framework Program for Government Action7 and Economic and Social Development Plan are the vessels to implement the proposals of the two studies. Thus the “urban development improvement program� includes provision of urban planning and management tools to urban centers, establishing a synergy between stakeholders (through the implementing a framework for intervention in urban areas) and the establishment of a funding mechanism for urban areas. 7 ICR author’s note: This framework was presented to the donors in February 2012. 44 4.2.3. Private Sector Through the activities and experience gained in the implementation of activities of the project, SMEs were assisted to master procedures to better organize and monitor their projects and take into account environmental issues, the importance of which has been enhanced in the context of this project. Thus, companies have learned to develop and implement the ESMP under the supervision of the BNC and control of the National Environmental Agency. 4.3. Economic Activity The roads and commercial facilities were substantial factors of development. Indeed, the construction of two roads in the city of Niamey for example, has led to the creation of 164 new economic activities (mobile phone centers, hair salons, repair and sale of laptops, reprographic centers, sewing workshops, garages, service stations, food shops, fish stores and motorcycle shops). The various commercial facilities created or upgraded led to development of economic and commercial activities. 4.4. Employment The project has been a source of job creation, for example on the East-West Road and Manga Avenue, shops installed after the road works have created an estimated 477 to 954 additional jobs. In addition, garages, major providers of jobs alone have generated an estimated 75 to 179 jobs. 4.5. Municipal finances The project has had a positive impact on municipal finances. Indeed, commercial facilities and roads, for example, will allow authorities to collect taxes, tariffs, and various service fees. In addition, for the sanitary facilities in Dosso and Maradi, a fee of 20,000 FCFA is paid monthly per facility and in Maradi, each water kiosks will contribute 5,000 FCFA per month. According to the feasibility studies, the Maradi Central Market will generate an annual income of at least FCFA 136 million for the municipality. In Dosso, annual revenues from the commercial facilities are estimated as respectively FCFA 60 million for the small and large market and more than FCFA 40 million FCFA for the truck terminal. 4.6. Economic potential of the sub-projects In addition to the direct revenue to people from economic activities, the land along the East-West Road has more than doubled in value, wholly attributable to the road works. Moreover, the traffic counts conducted on the East-West Road and Avenue Manga revealed that on average, around 6,544 vehicles use road per day, which is an exceptional level of traffic and enough to make the investment economically viable. 5. CONCLUSION After a relatively difficult initial phase characterized by a low disbursement rate, project implementation was steadier after the MTR, due to the decisions taken at that time. The important physical and institutional achievements resulting from the project should now be sustained. 45 5.1. Sustainability In order to ensure long-term sustainability of works and institutional outcomes of the project, the following should be done: - Completing auxiliary works for some infrastructures as well as the constructing the enclosing shops for the Maradi Central Market, building accommodation for the truck drivers at the truck terminal in Dosso. - Support the maintenance culture through the institutionalization of PMPs and generalization of city contracts. This should involve the adoption of legislation on the minimum amount to be included in municipal budgets for infrastructure maintenance and the establishment of a mechanism for monitoring the implementation of commitments. - The pursuit of public awareness by the authorities for a rational use of infrastructure to prevent deterioration. - The swift operationalization of infrastructure including the establishment of management bodies wherever required. - Appropriation and implementation of strategic studies and the generalization of the use of urban management tools. 5.2. Lessons for the future Following the implementation of the project the following key lessons can be drawn: - Institutionalize the public procurement function in LGs in order to have a minimum of experience to use for further action. - Develop tender documents for sub-projects as well as TORs for complex engineering studies during project preparation, to facilitate disbursements immediately following project effectiveness. - Create the institutional conditions for the liberalization of delegated contract management. - Avoid cancellation, during the project, of structuring sub-projects such as paved roads in Niamey, which were canceled for an amount of about 2 billion FCFA. - Leave the contracting authority the flexibility to choose the delegated contract management agency. - Ensure that certain activities to strengthen the capacity of stakeholders (SMEs, engineering consultants, municipal technical services) with a view to improve achievements are effectively dispensed upstream before launching these activities. - Consider the specific issues of water and electricity connections through better estimates of cost of connections and integration into works costs in the form of provisional amounts. - Formally involve regional directorates of urbanism, closest to cities, to assist in project management. These services can provide assistance to LGs or even delegated contract management. - Implement support for urban and municipal development over a long period with successive stages in order to avoid discontinuity after project closing. - Continue to place emphasis on major structuring infrastructure and facilities (roads, drainage, commercial facilities) without abandoning the improvement of access to basic services. End summary 46 (b) Comments received from the government on draft Bank ICR Two rounds of comments were received from the government. An initial draft ICR was translated into French and shared with the government for comments. The government found the tone of the initial draft to be too negative in spite of the demonstrated results of the project. To support this claim, it provided additional information notably on readiness to have diverse infrastructure shortly put in operation for delivering the services expected through the project. The ICR team incorporated the government’s comments and provided an updated draft, in French, for review. 47 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders There were no cofinanciers or other partners/stakeholders. 48 Annex 9. List of Supporting Documents The following documents are in the project file:  Project Appraisal Document (April 23, 2008).  Back to Office Reports and Aide-Memoires for 19 project missions: May 2006 through February 2013.  Financing Agreement 4410-NE, dated June 26, 2008 and amendment dated December 8, 2011.  Project Restructuring Paper (December 6, 2011).  Project Implementation Status and Results Reports (ISRs, sequence 1-9; 2009-2013).  Technical audit reports (2010, 2012).  Socio-economic impact evaluation (January 2013).  Study on the definition of a national framework for the urban sector and a mechanism for transfer of resources to the local level (February, 2011).  Borrower ICR (March 2013).  Safeguard studies. 49 NIGER 10°E 15°E L I B YA LOCAL URBAN INFRASTRUCTURE To Djanet To Tajarhi DEVELOPMENT PROJECT ALGERIA NIGER PROJECT CITIES SELECTED CITIES AND TOWNS Madama DEPARTMENT CAPITALS NATIONAL CAPITAL RIVERS MAIN ROADS DEPARTMENT BOUNDARIES T é To Tamanrasset INTERNATIONAL BOUNDARIES 20°N n é Mont Greboun (1,944 m ) A G A D E Z r é This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any Air Mts. D e endorsement or acceptance of such boundaries. Arlit Bilma 0 50 100 150 200 Kilometers s e r 0 50 100 150 Miles t MALI Agadez Ingal TA H O U A D I F F A To Tchin- Gao Tabaradene 15°N ZINDER CHAD Tahoua Tanout 15°N Keïta TILLABÉRI To Tillabéri Illéla Dakoro Bouza Ouahigouya Téra Filingué MARADI S a h Gouré e l Nguigmi Mt s. Nig Birnin a NIAMEY Konni ng er Zinder a NIAMEY Aguié M Kollo Maïné- Diffa Maradi Soroa Dosso 1963 Level To Magaria 1973 Level Lake BURKINA DOSSO Kontagora 2001 Level Chad FASO OCTOBER 2007 IBRD 35731 To Ouagadougou NIGERIA To 0° BENIN 5°E Kaduna 10°E 15°E