The World Bank Integrated Land Administration System Project (P122219) REPORT NO.: RES31675 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF INTEGRATED LAND ADMINISTRATION SYSTEM PROJECT APPROVED ON AUGUST 4, 2011 TO MINISTRY OF FINANCE SOCIAL, URBAN, RURAL AND RESILIENCE GLOBAL PRACTICE EUROPE AND CENTRAL ASIA Regional Vice President: Cyril E Muller Country Director: Arup Banerji Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Practice Manager/Manager: Jorge A. Munoz Task Team Leader: Camille Bourguignon-Roger The World Bank Integrated Land Administration System Project (P122219) I. BASIC DATA Product Information Project ID Financing Instrument P122219 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 04-Aug-2011 30-Apr-2018 Organizations Borrower Responsible Agency Ministry of Finance Ministry of Justice,State Geodetic Authority Project Development Objective (PDO) Original PDO The objective of the proposed Project is to modernize the land administration and management system to improve the efficiency, transparency and cost effectiveness of government services. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-80860 04-Aug-2011 17-Aug-2011 15-Nov-2011 30-Apr-2018 23.80 18.06 1.71 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The World Bank Integrated Land Administration System Project (P122219) A. Project Status The project is due to close on April 30, 2018, 93 percent of the loan proceeds have been disbursed, and the implementing agencies are on track to meet the PDO. Since 2016, the Joint Information System (JIS) is in operation in all Land Registry Offices (LROs) and Cadastre Offices (CO). The JIS is a fully centralized web-based system. It is interoperable with other key registers and allows the implementing agencies to track activities in COs and LROs in real time. Various e-services have been introduced and the percentage of requests lodged online has increased from 0 to 5.2 percent. An additional 22 ministries and government agencies are sharing spatial data with the SGA and MoJ, and the implementing agencies have maintained customers’ satisfaction above 4.5, on a scale of 1 to 5. Average registration times in LROs has decreased from 46 days to 12.7 days, processing time in COs has been reduced from 30 days to 8 days, and Croatia’s Doing Business rank in the ease of registering properties has improved from 111 to 59. Building on these achievements, and with a view to moving to more efficient and a fully paperless system, additional investments are required to support the continued automation of land administration services, further reduce registration times in COs and LROs, increase the number of customers who use e-services, improve the quality of real property data, and advance the integration of cadastre and land registration services. Specific areas of investment are also required. For instance, the Zagreb LRO needs to be relocated from its current premises at the National Library and the Ministry of Justice (MoJ) plans to establish a central archive for LROs. While the implementing agencies intend to use funds from the European Union, they have identified financing gaps and needs for bridge financing. Discussions about a possible Additional Financing (AF) were initiated during the mission of October 2017. The AF was formally requested on February 22, 2018, along with an extension of the current loan's closing date. B. Changes and Rationale for Making Them The objective of the proposed restructuring is to extend the loan closing date from April 30, 2018, to December 31, 2018. The extension is required to allow for the funds under the original loan to be fully used. Specifically, the extension will allow the Borrower to use the loan proceeds to complete the following two critical activities: (i) Renovation of the Sisak CO building – Contract signing was delayed because the lowest bid received was 30 percent higher than the estimated cost. As a result, the State Geodetic Administration had to seek an independent opinion. The contract was signed late 2017 and the building renovation is on schedule to be completed by July 2018, and; (ii) Preparation of the joint strategy for cadastre and land registration – The preparation of the strategy was delayed following a shift in the government’s vision for the sector. In view of this recent development, and considering that the implementing agencies have received only one bid for this contract, the Bank has recommended to rebid the contract and expand the tender to an international bidding process. The extension is also required to provide sufficient time to process the AF and sustain implementation momentum while the AF becomes effective. The preparation of the AF is progressing well. The AF Decision Meeting was held on February 5, 2018, and the AF was appraised from February 19 to 21, 2018. Technical Discussions were successfully conducted on March 28 and 29, 2018, and the Bank has issued the invitation to negotiate. However, it will not be possible to process the loan by the current closing date of April 30, 2018. This is the third extension of the loan closing date, resulting in an extension of three years and two months beyond the original loan closing date. The loan closing date was extended by 18 months in 2015 to allow the roll-out of the JIS The World Bank Integrated Land Administration System Project (P122219) nationwide and by an additional 12 months in 2017 to allow the implementing agencies to further reduce processing times in COs and LROs as well as to increase the percentage of customers making requests online. C. Financial Management and Audits Financial Management continues to be adequate and there are no overdue audits. The quarterly Interim Financial Reports (IFRs) have been submitted to the Bank for review in the agreed time frame and no significant discrepancies have been identified. The latest submitted IFRs were submitted for the fourth quarter of 2017 and the reports have been found acceptable to the bank. III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 30-Apr-2017, 30-Apr- IBRD-80860 Effective 31-Oct-2015 31-Dec-2018 30-Apr-2019 2018