Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00004795 IMPLEMENTATION COMPLETION AND RESULTS REPORT TF015264 ON A SMALL GRANT IN THE AMOUNT OF USD 4.55 MILLION TO THE KINGDOM OF MOROCCO FOR A Local Government Support Program (P144438) August 19, 2019 Social, Urban, Rural And Resilience Global Practice Middle East And North Africa Region Regional Vice President: Ferid Belhaj Country Director: Jesko S. Hentschel Regional Director: Ayat Soliman Practice Manager: Jaafar Sadok Friaa Task Team Leader(s): Anastasia Touati ICR Main Contributor: Lamia Zaki ABBREVIATIONS AND ACRONYMS AFD Agence Française de développement (French Agency for Development) AMO Assistance à maîtrise d’ouvrage (Project Management Assistance) CMU Country Management Unit COPIL Comité de Pilotage (Steering Committee) CPF Country Partnership Framework CPS Country Partnership Strategy CRAMO Centre de Ressources et d’Assistance à la Maîtrise d’Ouvrage (Deconcentrated Support Centers) DAA Direction des Affaires Administratives (Directorate for Administrative Matters) DAJDEC Direction des Affaires Juridiques, de la Documentation, des Etudes et de la Coopération (Directorate for Legal Affairs, Studies, Documentation and Cooperation) DGCL Direction Générale des Collectivités Locales (General Directorate for Local Governments) DLI Disbursement Linked Indicator DPL Development Policy Loan DRSC Direction des Régies et des Services Concédés (Directorate for State-Owned Companies and Concessions) ECI Etablissements de Coopération Intercommunale (Intermunicipal Cooperation Entities) FM Financial Management FY Fiscal Year GoM Government of Morocco IOI Intermediate Outcome Indicator IRI Intermediate Results indicator LG Local Government M&E Monitoring and Evaluation MENA Middle East and North Africa MEF Ministry of Economy and Finance MoI Ministry of Interior MSW Municipal Solid Waste MTR Mid-term Review OI Outcome Indicator PACT Programme d’Appui aux Collectivités Territoriales (Local Government Support Program) PCD Plan Communal de Développement (Municipal Development Plan) PDO Project Development Objective PforR Program for Results PIU Project Implementation Unit PSP Private Sector Participation RF Results Framework SDL Société de Développement Local (Local Joint Ownership Company) SP Société de Patrimoine (Public Asset Company) TOC Theory of Change VAT Value Added Tax TABLE OF CONTENTS DATA SHEET .................................................................................... ERROR! BOOKMARK NOT DEFINED. I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ...................................................................4 II. OUTCOME ..................................................................................................................................9 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME............................................. 16 A. KEY FACTORS DURING PREPARATION ................................................................................ 16 B. KEY FACTORS DURING IMPLEMENTATION.......................................................................... 17 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME ............... 18 V. LESSONS LEARNED AND RECOMMENDATIONS .......................................................................... 20 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................................ 22 ANNEX 2. PROJECT COST BY COMPONENT ........................................................................................ 30 ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ................... 31 ANNEX 4. SUPPORTING DOCUMENTS (IF ANY) .................................................................................. 32 The World Bank DTF: MA-Local Government Support Program (P144438) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P144438 DTF: MA-Local Government Support Program Country Financing Instrument Morocco Investment Project Financing Original EA Category Revised EA Category Not Required (C) Not Required (C) Organizations Borrower Implementing Agency General Directorate for Local Governments, Ministry of General Directorate for Local Government, Ministry of Interior Interior Project Development Objective (PDO) Original PDO The Objective of the Project is to set up a lasting program to provide Local Governments in the Project Area access to decentralized support services and assistance to institutionalize inter municipal cooperation. Page 1 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) FINANCING FINANCE_TBL Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) Donor Financing TF-16151 4,550,000 4,550,000 3,560,974 Total 4,550,000 4,550,000 3,560,974 Other Financing Borrower/Recipient 1,250,000 3,900,000 11,097,000 Total 1,250,000 3,900,000 11,097,000 Total Project Cost 5,800,000 8,450,000 14,657,974 KEY DATES Approval Effectiveness Original Closing Actual Closing 26-Nov-2013 02-Dec-2013 31-Aug-2018 02-Mar-2019 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 22-Mar-2018 1.38 Change in Loan Closing Date(s) KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Moderately Satisfactory Modest RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 17-Apr-2014 Moderately Satisfactory Moderately Satisfactory 0.61 02 12-Aug-2014 Moderately Satisfactory Moderately Satisfactory 0.61 Page 2 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) 03 29-Jun-2015 Moderately Unsatisfactory Moderately Unsatisfactory 0.61 04 21-Aug-2015 Moderately Unsatisfactory Moderately Unsatisfactory 0.61 05 19-Apr-2016 Moderately Unsatisfactory Moderately Satisfactory 0.79 06 24-Jun-2016 Moderately Satisfactory Moderately Satisfactory 0.79 07 17-Feb-2017 Moderately Satisfactory Moderately Satisfactory 1.05 08 29-Dec-2017 Moderately Unsatisfactory Moderately Unsatisfactory 1.35 09 19-Feb-2018 Moderately Satisfactory Moderately Satisfactory 1.38 10 05-Oct-2018 Satisfactory Moderately Satisfactory 1.65 ADM STAFF Role At Approval At ICR Regional Vice President: Inger Andersen Ferid Belhaj Country Director: Neil Simon M. Gray Marie Francoise Marie-Nelly Director: Ayat Soliman Practice Manager: Franck Bousquet Jaafar Sadok Friaa Task Team Leader(s): Francois Boulanger Anastasia Nejma Touati ICR Contributing Author: Lamia Zaki Page 3 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES Context 1. At the time of appraisal in 2012, Morocco was engaged in a decentralization process that had started a few decades earlier. Since the first Municipal Charter (Charte Communale) in 1976, Morocco had gradually been expanding the legal and administrative autonomy of local governments (LGs). In the ten years before appraisal, several laws and decrees had contributed to enhance the decentralization process, including by: (i) eliminating a range of ex-ante controls by the Ministry of Interior (MoI) and the Ministry of Finance (MoF); (ii) improving the transparency of the distribution process for LGs’ 30 percent share of the national Value Added Tax (VAT); and (iii) requiring municipalities to systematically develop participatory Medium Term investment plans (Plans Communaux de Développement, PCDs). 2. In particular, this decentralization process had been further reinforced by the new 2011 Constitution, which enshrines the principles of “free administration� (libre administration) of LGs and of subsidiarity. The constitutional reform confirmed municipalities as the lowest tier of LG. The reform also entrusted them with a wide range of mandates related to the management of key services, including water supply and sanitation, electricity distribution, municipal solid waste collection and disposal, street lighting, and urban transport. The legislation required municipalities to systematically develop their planning function, either through participatory medium-term investment plans (PCDs) or service planning, e.g., in municipal solid waste management. 3. Despite such achievements, municipalities lacked institutional and technical capacity to fully and effectively plan and implement their investments. The quality of planning remained a key challenge for municipalities. In particular, the low indebtedness/cash surplus conjunction pointed to delivery capacity issues, more than to financing issues, as a key cause of insufficient investment in local services. There were also problems with the private provision of infrastructure services, coming in large part from insufficient project and contract management capacity in municipalities. Private provision was suffering setbacks in the form of some operators pulling out of the market, of an accumulation of payment arrears, of service lapses and general recurrent questioning in the media on the “gestion déléguée� model. 4. In a context of sustained urban growth, there was a crucial need to experiment with new service delivery models at the inter-municipal level. The rapid growth of Moroccan cities had led to a situation where few of the essential infrastructure services required in an urban context could be managed at the municipal level. Network synergies or economies of scale required large investments to be made at a metropolitan level. But the institutional arrangements for inter-municipal cooperation had not yet been generalized in all large metropolitan areas. In addition, the reform and modernization of service delivery, especially at the inter-municipal level, required the provision of expertise (Assistance à Maîtrise d’Ouvrage) and incentives. The preparation of the Third Municipal Solid Waste Sector Development Policy Loan (Morocco MSW DPL3) had in particular, initiated a dialogue on the lack of efficient management of public service delegation contracts by municipalities, and the lack of intermunicipal cooperation in a field where this issue was key, particularly for big cities (Report n°74639-MA). The Preparation of a Public Transport Program for Results (PforR) also highlighted the weak municipal capacities for managing private service operators and the need for developing strong vehicles for supervising public transport delegation contracts (Report 101010-MA). 5. The Morocco Local Government Support Program was fully aligned with the Government’s priorities at the time of appraisal. The decentralization of services in Morocco had been highlighted in several Royal Speeches setting the Kingdom’s reform agenda. The increase in technical support to LGs from deconcentrated government departments was also one of the key recommendations of the Consultative Committee on Regionalization. Additionally, in the Page 4 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) Development Policy Letter in support of the Third Solid Waste Sector DPL (2012), the Government of Morocco had confirmed the alignment of the activities proposed in this operation with its general development agenda. In the Letter, the Government stressed that its reform agenda includes “the development and implementation, from 2013 onwards, of a national support program for LGs including support to setting up inter-municipal institutions and public asset companies for local public services� and increasing technical support services to LGs. 6. There was a demand for donors to support capacity building activities for LGs and hands-on support. The Government, supported by donors, had been carrying out many capacity building activities with LGs, and donors had also financed projects to support LGs in the decentralization process. But the projects mainly focused on training and awareness raising activities and did not have enough impact. There was then a specific need for hands-on support to implement projects through a comprehensive program assisting municipalities to carry out their service delivery functions. The Program was fully aligned with the Bank’s 2010-2013 Morocco Country Partnership Strategy (CPS), where there was a clear commitment to “support the Government’s objective to […] increase the role of local government, its performance, accountability, and empowerment’’ (Report No 50316-MA). The Program was also consistent with one of the main pillars of the CPS, Pillar 2, on ‘’Service delivery to citizens’’. In addition, the proposed PACT support was fully aligned with the Bank’s framework for engagement in the Middle East and North Africa (MENA) Region through strengthening the governance of local service delivery and improving economic and social equity by providing equal access to local services in urban areas. Lending instrument 7. This Technical Assistance was financed by an Investment Project Financing through a grant from the MENA Transition Fund. Project Development Objectives (PDOs) 8. The project development objective was to set up a lasting program to provide Local Governments in the Project Area1 access to decentralized support services and assistance to institutionalize inter municipal cooperation. Key Expected Outcomes and Outcome Indicators 9. Achievement of the PDO was measured through the following outcome indicators (OIs): OI#1: The Local Government Support Program (PACT) is set-up and operational; OI#2: The financial incentive of the PACT is financed adequately and there is formal commitment to fund the program after grant closure; and OI#3: Number of beneficiaries (male/female) (core sector indicator). Progress towards achievement of the PDO was monitored through the detailed results framework, which included Intermediate Results indicators (IRIs); see Annex 1. 1 The Project Area comprised the regions of Tanger-Tetouan, Fez-Boulmane, Meknes-Tafilalt, Doukkala-Abda, Rabat-Sale- Zemmour-Zaër, Grand Casablanca, Marrakech-Tensift-El Haouz, Gharb-Chrarda-Beni Hsen, and Souss-Massa-Draâ. Page 5 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) Theory of change 10. The theory of change (TOC) of the PACT2 (figure 1) reflects the Government engagement to effectively encourage decentralization through providing tailored support to LGs for the latter to fully take on their local service delivery functions and make them ready for the new decentralization challenges introduced by the 2011 Constitution. The project sought to develop concrete institutional models and provide practical solutions to help municipalities in pilot areas better fulfill their mandates, with a focus on: (i) the creation of deconcentrated support centers to provide LGs with technical assistance to facilitate the planning and implementation of urban infrastructure projects; (ii) the enhancement of intermunicipal institutions through specific consulting services and incentives in order to allow for the delivery of additional and improved services; and (iii) the development of a monitoring and evaluation system to assess the pilot experiences and draw lessons for the design of a final program. The project placed emphasized the development of a participatory approach to design the pilot areas where municipalities would benefit from project activities. 11. The key assumptions were: (A1) target municipalities will ultimately be able to become self-sustained in project preparation and implementation through the capacity and institutional building activities developed; (A2) the development of adequate inter-municipal cooperation arrangements will allow municipalities to reap the benefits of organized metropolitan dynamics through the provision of each service at the optimal delivery scale; and (A3) the strong country ownership will allow the program to be scaled up nationally and to sustain it. 2While explicit Theory of Change was not a standard practice at project appraisal, the team intended to retroactively illustrate the TOC at the ICR stage using the project’s objective and guiding assumptions narrated in the design. Page 6 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) Figure1. Theory of change Page 7 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) Components 12. Component 1: Deconcentrated Local Governments Support Centers (estimated cost3 of US$1,950,000, of which US$900 000 of local contributions; actual cost was US$2,029,438, of which US$993,000 of local contributions). This component financed the program of activities aimed at establishing local single window support centers for LGs in the Project Area. It included: - Sub-component 1.1 - Initial studies and implementation planning. This subcomponent funded the review of implementation options and the organization of the consultative process to determine the legal form, the resources required, the territorial mapping, and the deployment plan of the local single window support centers, all through the provision of technical assistance. - Sub-component 1.2 – Setting-up and operation of LG support centers. This subcomponent funded the establishment of four local single window support centers on a pilot basis in the Project Area. - Sub-component 1.3 – Tools development. This subcomponent funded the inventory of existing resources, making such resources available to LGs in the Project Area, and developed new tools to fill identified gaps as necessary. 13. Component 2: Inter-Municipal Cooperation and Institutional Reform for Local Service Delivery (estimated cost of US$5,950,000, of which US$3,000,000 of local contributions in terms of incentives; actual cost was US$ 11,932,948 of which US$10,104,000 of local contributions in the form of incentives. This component financed a program of activities aimed at accelerating the formation of intermunicipal cooperation structures in the Project Area, including the creation on a pilot basis of Public Asset Companies that the inter-municipal cooperation structures established for planning and financing their infrastructure investments. The program included: - Sub-component 2.1 – Technical assistance. This subcomponent financed the technical assistance provided to a limited number of municipalities for the purpose of creating or expanding inter-municipal cooperation structures. - Sub-component 2.2 - Studies. This subcomponent financed the carrying out of studies to design new institutional and financial models for the sustainable delivery of the municipal services4 transferred to the intermunicipal cooperation structures. - Sub-component 2.3 – Incentive mechanism. This subcomponent funded an incentive mechanism for the formation of new intermunicipal cooperation structures. 14. Component 3: Program Management (estimated cost of US$450,000 + US$100,000 for contingencies; actual cost was US$600,161). This component financed the support provided to the PIU for Project coordination, supervision, financial 3 Total estimated project cost per PAD was US$ 8.45 M (estimated contribution of US$3.9 M from Borrower and US$4.55 M from donor financing). The original amount entered in Bank systems differs from original amount per PAD and can’t be changed in the data sheet. 4 The municipal competencies cover provision of key municipal services, including potable water supply, wastewater collection and treatment, drainage, electricity distribution, municipal solid waste collection and disposal, street lighting, urban transport, traffic signaling and parking management, slaughterhouses, markets, socio/cultural/sports centers, ambulance and funeral services. Page 8 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) management, audits, procurement, monitoring and evaluation. II. OUTCOME A - Assessment of Relevance of PDOs 15. The PDO remains highly relevant to the continuing engagement of the World Bank on local governance support in Morocco, reaffirmed after the constitutional reform of 2011. Strengthening the capacity of municipalities and improving their services was a strategic objective (Result Area 3) of the Morocco 2014-2017 CPS (Report No. 86518-MA). The PDO remains highly relevant to the current (2019-2024) Country partnership Framework (CPF), as part of its third Focus Area on ‘’Promoting Inclusive and resilient territorial development’’, with the objective of ‘’improving performance of key infrastructure service delivery of cities and agglomerations’’ (Report No. 131039-MA). 16. The PDO also remains highly relevant in light of the governmental decentralization policy . The 113-14 Organic Law on Municipalities, issued on July 2015, illustrates the commitment of the Government to improve decentralization and provide a legal basis for an increased autonomy of municipalities through the disappearance of the “tutelle� of the MoI over LGs, and a renewed role of the MoI in providing technical assistance and capacity building (accompagnement) to municipalities – an objective supported by the PACT. Similarly, the inter-municipal management tools (Sociétés de Développement Local – SDL, and Etablissements de Coopération Intercommunale – ECI), which the project supported to improve service delivery at the metropolitan level, have also been confirmed and further institutionalized by Law. B – Assessment of Achievement of Each Objective/Outcome 17. The project development objective was to set up a lasting program to provide Local Governments in the Project Area access to decentralized support services and assistance to institutionalize inter municipal cooperation. 18. The assessment of achievement of each objective/outcome is structured around the two key elements of the PDOs: (1) Setting up a lasting program to provide local governments access to decentralized support; and (2) Providing assistance to institutionalize inter municipal cooperation. The data is based on : the Borrower’s ICR, the minutes of the meetings of the Steering Committee (Copil) and the Project Implementation Unit (PIU), the various deliverables produced under the three components, the aide-memoires and ISRs, the recipient municipalities survey (see Annex 8), discussions with the Wali Director General of Local Governments (DGCL) and the three Governors within DGCL at MoI involved in project implementation, field visits, and interviews with the PIU, as well as interviews with mayors, municipal staff, consultants and contractors. 1 - PDO 1- Setting up a lasting program to provide local governments access to decentralized support (Component 1) 19. This objective has been unpacked and assessed separately as follows: (i) Setting-up a program; (ii) Ensuring its sustainability over time; and (iii) Providing LGs access to decentralized support. (i) Setting-up a program: the conception and establishment of the Deconcentrated Local Government Support Centers 20. One of the main outcomes expected from the project was to set up a program establishing local single window Page 9 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) support centers for LGs to provide them technical assistance to prepare and manage projects. 21. Under Subcomponent 1.1, the project successfully conceived and put in place a new program to provide LGs access to deconcentrated support in the following regions: Casablanca-Settat, Souss-Massa, Oriental and Fès-Meknès. The participatory study developed between November 2015 and May 2016 identified different scenarios for the design and initial set-up of these centers and confirmed through regional workshops the strong demand by LGs for this type of support. Following a decision of the Steering Committee in April 2016, the Support Centers were to be institutionally anchored within the Wilayas (i.e., deconcentrated representations of the MoI at the regional level) to provide them a stable institutional framework and ensure their funding on a sustainable basis. 22. Under Subcomponent 1.2, the project established and operationalized four deconcentrated Local Government Centers (Centres de Ressources et d’Assistance à Maîtrise d’Ouvrage, CRAMO). Between December 2016 and June 2017, four CRAMOs were created (thus exceeding the initial target of three centers for PDO-level indicator ≠1). They were placed under the supervision of the Director of Local Governments within each Wilaya and operationalized through the recruitment of three to five high-level experts in local public service delivery (with specialization in waste management, urban mobility and transport, built heritage, etc., based on demand from the beneficiary municipalities). In all, eighty-four municipalities benefitted from the support of the Centers (exceeding the initial IRI 1.3 target of fifty). These experts provided concrete and practical answers on specific issues, while helping them identify, define and reach out to the expertise needed to address larger issues; see Section (iii) for further details. As a result, the objective of setting up a new program to provide support to LGs was exceeded. Table 1. Creation and Operationalization of the Local Government Support Centers (CRAMOs) CRAMO Official creation (through Appointment of the Head Appointment of other experts prefectoral order) of Center Casablanca-Settat December 15, 2016 April 19, 2018 Expert in Waste Management: September 4, 2017 Expert in Transport and Urban Mobility: September 4, 2017 Souss-Massa April 27, 2017 September 8, 2017 Expert in Local Public Service Management: December 17, 2018 Expert in Procurement: July 9, 2018 Oriental May 11, 2017 September 6, 2017 Expert in Local Public Service Management: July 25, 2018 Expert in Cultural and Built Heritage and Public Space Management: April 26, 2018 Fès-Meknès June 22, 2017 June 22, 2017 Expert in Local Public Service Management: July 24, 2018 Expert in Cultural and Built Heritage and Public Space Management: April 27, 2018 (ii) Ensuring the sustainability of the program over time (setting up a lasting program) 23. The purpose of the PACT was to set up a pilot that would lead to the establishment of a lasting support program Page 10 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) which would go beyond the duration of the project and would be progressively scaled up to the entire country. PDO indicator #2 (the financial incentive of the PACT is financed adequately and there is a formal commitment to fund the Program after grant closure) and IRI 2.3 (lessons learned from the pilot phase) monitored the achievement of this PDO element. 24. Under Subcomponent 1.2, a capitalization and perspective workshop (IRI 2.3) was successfully conducted and enabled the review of the experience of the CRAMOs and to build on the lessons learnt from the pilot phase in order to program further support to municipalities. Organized on January 8, 2019, the event was launched by H.E. the Wali DGCL and attracted 100 participants representing the Wilayas, the pilot municipalities, the ECIs and the Central Government. It highlighted the effective and concrete inputs of the CRAMOs in the planning and management of local public services in the pilot municipalities5. To better showcase the work completed, it was agreed that the deliverables produced by the CRAMOs will be made available online on the LG portal6. Upon project completion, H.E. the Wali DGCL, as well as the Walis Governors of DRSC and DAJDEC, commended the “effectiveness of a flexible institutional mechanism� to “regulate, standardize and harmonize the approaches to support local public service delivery from one region to another� (particularly in the field of public transport). They also praised the CRAMOs as organizations based on a tight team of experienced consultants, that were well accepted by municipalities who are keen to maintain their autonomy from the MoI. 25. The GoM acknowledged that the creation of CRAMOs operating at the subnational level was key for ensuring more efficient support to municipalities by the Central Government. It also expressly acknowledged that the existing needs and increasing demands identified through this pilot phase called for the development of a more ambitious program. Based on the review of the operational costs of the four pilot centers7, it appeared that the scaling up of the program at the national level called for institutional adjustments to reach out to municipalities located in the 12 existing regions on a sustained basis, as creating support centers on a regional basis would not be cost-efficient. Beyond the necessary economies of scale to allow for the successful development of a national program to foster municipal performance, the GoM wanted to link the development of such a program with the deconcentration agenda enshrined in the 2011 Constitution. In December 2018, the GoM requested institutional and financial support from the World Bank and French Development Agency (AFD) to develop this national program, concurrently with the issuance of Decree 2-17- 618 establishing the national Charter for administrative deconcentration. 26. As a result of the pilot phase and in line with the 2018 Charter for administrative deconcentration, the DGCL reaffirmed the strong commitment of the MoI to pursue the experience initiated after grant closure8, drawing on the lessons learned to refine the model tested. This objective was to be included in the action plan currently being finalized by the MoI, and the institutional and financial arrangements for new technical assistance programs for municipalities were to be defined by September/October 2019. It is included as a key element of the proposed Municipal Performance Program for Results (PforR) being prepared by the MoI for Bank and the AFD support. This PforR builds on the PACT Components 1 and 2 through two dedicated Subprograms. The GoM is strongly committed to develop a comprehensive capacity building system to help municipalities better plan and implement their investments and improve service delivery (through Sub Program 3: Enhancing the organization and human capacities of Municipalities of the PforR) to provide training as well as on-demand technical assistance to about 100 target municipalities. DGCL has also confirmed the engagement of the MoI to support inter-municipal cooperation and the development of ECIs. A strategic note was recently 5 See the Stocktaking Note on the workshop in Annex 4.9. 6 See the PIU Completion report for the detailed list of the deliverables produced by the CRAMOs (in Annex 4.7). 7 According to the simulation presented by the PIU at the Steering Committee of December 14, 2017, the operation cost of one CRAMO amounted to MAD 2 million (on a yearly basis) (see Annex 4.10). 8 See Aide memoire of the last PACT supervision mission organized from February 26-28, 2019 (Annex 4.5) Page 11 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) developed9 with the support of the Bank and Subprogram 2: Operationalization of a sustainable inter-municipal cooperation bodies (ECI) framework of the PforR is dedicated to ECI support. Two Disbursement Linked Indicators (DLIs) are being defined, confirming the ownership of the Ministry to: (i) develop a National Plan for LG cooperation; and (ii) provide a long-term operational framework for the financing of ECIs through the development of an adapted contractual framework defining the participation of LGs. 27. The project leveraged substantial incentive funds from the Government during the program period (in a cumulative amount of US$8.48 million, thus largely exceeding the PDO-level indicator # 2 end target of US$3 million. In addition, Sub Programs 2 and 3 of the proposed Municipal Performance Program for Results reflect the commitment to continue to fund the support provided by the Program after grant closure. The ongoing Bank loan to the Municipality of Casablanca also illustrates the impact of the PACT over the medium and longer term through its support to increase investment capacity, improve the business environment within the Municipality, and enhance access to basic services. These recent developments provide a very good indication of the commitment of the Government to continue this experience over the long term. The PACT has been recognized and embraced within the context of de-concentration and its sustainability is likely. (iii) Providing local governments with effective access to decentralized support 28. Under Subcomponent 1.2, the CRAMOs provided support to the municipalities and ECIs on a wide range of technical issues based on demand at the local level 10 (i.e., Directors of Local Governments within the Wilayas). The centers have provided support to the targeted municipalities in three main areas (especially for the Oriental, Fes-Meknes and Casablanca centers): (i) management of local public services (support to project management – assistance à maîtrise d’ouvrage) through : the development of tender documents (e.g, ToRs, technical specifications) on various topics (including management of green spaces, solid waste management, public transportation, public lighting and parking spaces) and support to the procurement process (participation in bid openings); (ii) development of analytical notes and advisory services, including on municipal finance, solid waste management, urban development, and urban mobility; (iii) enhancement of communication between LGs on municipal management (through the participation in and/or organization of conferences on various issues, and the organization of assessments). 29. The survey conducted by the PIU in April 2019 on a random sample of municipalities that benefitted from the services provided by the CRAMOs further illustrates the success of the experience: more than 83% of the 24 municipalities which responded to the survey were satisfied with the services provided by the support centers, and half of these municipalities insisted on the need for additional support after grant closure11. 30. Under Subcomponent 1.3, an inventory of existing resources, deliverables and productions of CRAMOs is currently being finalized by the MoI and will be made publicly available on the LG portal in the coming months. Training for municipal staff on contract development and project management (maîtrise d’ouvrage) was also conducted between October 2018 and mid-February 2019, which benefitted around 165 municipal staff in the pilot regions. 31. The Program also successfully mobilized the support of several Government Departments (exceeding the IRI 1.2 end target of 3) through the established support centers. The experts of the four CRAMOs worked in coordination with the following departments: DGCL and DRSC at the MoI, as well as regional representatives of the Department of Environment (Casablanca-Settat), Directorate of State Domains in Agadir (under the authority of the MEF), and Curator 9 Ministère de l’Intérieur, DGCL, 2019, Projet de note sur une stratégie concernant les ECI (Annex 4.11). 10 See Annex 4.9 for the detailed list of types and areas of interventions of the CRAMOs. 11 See Annex 4.8 for the Survey form sent to the beneficiary LGs and the synthesis of their feedback. Page 12 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) of Ancient Monuments in Fes (under the Ministry of Culture). In particular, the Government Departments supported the CRAMOs missions by providing documentation, as well as legal and technical advisory services in various areas, including solid waste management, urban development and architectural heritage. 32. By Program closure, 84 municipalities12 (while the IRI 1.3 end target was 50) and more than 11.45 million users of municipal services (while the PDO-level indicator #3 end target was 3 million) had benefitted from the centers’ support through enhanced service delivery. Due to the slow start of the program, the local support centers started to provide support only from June 2017, while the initial target date was 2016. In addition, of the twelve CRAMOs experts and heads of centers recruited as part of the program, six were recruited less than a year before program closure. The support centers thus provided support for a relatively limited period, compared to plans in the program design and despite the six month grant closing date extension. Nevertheless, CRAMOs delivered considerable results, especially in solid waste management and public transportation. On balance, while this objective was essentially achieved, the benefits could have been achieved to a greater extent had the CRAMOs been in operation as initially planned. 33. To summarize, through the establishment and operationalization of the four CRAMOs, the project successfully set up a new program to provide LGs access to decentralized support. The CRAMOs successfully provided decentralized support to municipalities on a wide range of technical issues. In addition, the proposed Bank and AFD supported Municipal Performance Program for Results (scheduled to be approved by the Board in 2019) reflects the commitment of the MoI to continue to fund the support provided under the program after grant closure. As a result, this PDO element of setting up a lasting program to provide local governments access to decentralized support has been achieved . 2 - PDO 2 - Providing assistance to institutionalize inter municipal cooperation (Component 2) 34. The objective of the technical assistance under Subcomponent 2.1 was to allow municipalities to put in place institutional arrangements to fully benefit from the economic and financial impact of decentralization and to improve their capacities in terms of local public service management. The TA was more specifically aimed at providing tailored support for LGs to accelerate the formation of inter-municipal cooperation structures and the creation of new and operational service delivery models in four initial pilot regions of Casablanca, Rabat, Tangier, and Agadir. 35. The target of four conurbation associations created and/or expanded with clear/sustainable legal, financial, governance, and staffing arrangements has been met in the target regions (IRI 2.1). They have also been sustained post project. As illustrated in Table 2 below, these ECIs have been provided legal, financial, governance and staffing arrangements to ensure sustainable action. The technical assessment supported this achievement through providing the newly created ECIs with key background information and documents, especially pertaining to organizational and institutional aspects (e.g., development of tailored organic charters, job description for all ECI staff), as well as for contractual arrangements (development of different templates and recommendations). The TA also conducted key raising awareness events and sensitization among municipalities in the four pilots on the role of Local Joint Ownership Companies (Sociétés de Développement Local, SDL), the advantages of their creation (IRI 2.2 was achieved) as well as the remaining responsibility of the ECI in the organization of the service. Two SDLs have been created for two ECIs in the pilot areas (against the IRI 2.2 target of 3): one SDL for the Al Assima ECI (Société du Tramway de Rabat Salé, STRS in charge of urban transport on behalf of the ECI); one SDL for the Grand Agadir ECI (for waste management and urban transport). These creations, while largely benefitting from the technical assistance provided under Subcomponent 2.1, were also achieved through activities conducted by the MoI outside of the PACT. Because of political considerations, El Jadida was integrated in March 2018 to the perimeter of the study to replace the city of Tangier, hence allowing the realization of 12 See Annex 4.9 for the entire list of beneficiary municipalities Page 13 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) the target of four pilots. Table 2. Creation/ Extension of ECIs in Target Regions ECI Extension Legal, financial, governance and staffing arrangements Geographic Sector extension extension Al Assima From 10 to 24 Transfer of a new activity The ECI has an operational structure with 4 (Rabat-Salé- municipalities in (water and sanitation) in administrative officials and 6 agents Temara) 2015 addition to urban transport It benefits from pooled resources in 2015 Grand Agadir Extension to 9 Transfer of a new activity The ECI has an operational structure (with the municipalities (on waste treatment) in appointment of a Director of inter-municipal addition to the services) management of public transport Al Baida Operational only on The ECI (created in 2015) has an operational mobility/public transport structure (with the appointment of a Director of inter-municipal services) Grand Nador Operational on urban public The has an operational structure (with the transport and solid waste appointment of a Director of inter-municipal management services) 36. A significant improvement in ECI staffing was witnessed, especially in Agadir and Casablanca, during the last year of the TA implementation, when municipalities seconded staff to support the ECI as financial and technical directors. This is largely due to the work of the consulting firm to clarify the general missions of the ECI and the particular missions of its main agents, and to the preparation of an organization chart (organigramme) and of job descriptions for each ECI. The work on the financial modelling of the services managed by the ECI also allowed the raising of awareness on the financial issues at stake and the importance of revising the financing mechanisms of ECIs. The work conducted on the contractual structuring of the relations between ECI-SDL and the private delegated entity enabled the production of complete models to better organize the different services and define the roles and responsibilities of each stakeholder. These tools are available to local and national stakeholders for testing and use. 37. The sustainability of this aspect of the program will be ensured by the development of a dedicated Subprogram (Subprogram 2: Operationalization of a sustainable inter-municipal cooperation bodies (ECI) framework) as part of the proposed Municipal Performance Program for Results. 38. Other major results from Component 2 activities include: ➢ The Assessment of Transport Fare Integration in the Greater Rabat/Sale/Temara region for the newly created inter-municipal cooperation authority (Al Assima). The study explored ways to ensure the financial sustainability of the urban transport system and provided potential solutions to promote intermodal transport for the benefit of users. The second phase of the study, comprising operational support to the ECI and operators for the effective implementation of fare integration, will be completed and implemented through direct funding from the ECI. ➢ The study of the regulation of wholesale markets in Casablanca delivered to a development plan based on Page 14 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) a vision of the strategic evolution of the operating entity in the fruits and vegetables chain. The final report of the study was approved by the Steering Committee on February 26, 2019 and a Local Joint Ownership Company (SDL) in charge of regulating the wholesale market and implement the recommendations of the study is expected to be operational by September 2019. 39. In summary, technical assistance under Subcomponent 2.1 provided tailored support to LGs to accelerate the formation of inter-municipal cooperation structures and the creation of new and operational service delivery models in four pilot agglomerations. The target of four conurbation associations created and/or expanded was met. As a result, this PDO element of providing assistance to institutional inter-municipal cooperation has been achieved. C- Efficiency 40. No economic analysis was carried out at appraisal because of the nature of the activities. For the same reason, no quantitative economic analysis has been carried out at the ICR stage. However, competitive bidding and Bank active reviews ensured value for money through: (i) a systematic review of Terms of Reference for the activities conducted; (ii) ensuring that the hiring of consultants and firms followed Bank guidelines; and (iii) reviewing the reports of consultants and firms to ensure compliance with ToRs and that the reports, in particular the recommendations, were of good quality. 41. Utilization of the Grant. The project provided flexibility to the MoI to further identify studies to be financed under Component 2.2, beyond those included at appraisal. In addition to the main technical assistance work under Component 2.1, the MoI was provided US$1,950,000 for Sub-component 2.2 to launch on-demand analytical work based on the needs identified and on topics which could contribute indirectly to meet the program indicators; this explains why the PDOs as well as most of the IRI targets could be reached despite the cancellation of some studies and partial completion of others. This led to the studies under Component 2.2 to be defined late (the first approval was during the first Steering Committee meeting in April 2016) – and thus to the late budgeting of the grant funds – as well as to subsequent redefinition of the studies. Eventually, two studies were cancelled (the study on updating the law on delegated management and the information system for the monitoring of delegated public service activities) and two activities (the study on assessing options to restructure electricity, water and sanitation in the Souss-Massa region and the assessment of transport fare integration in Greater Rabat/Sale/Temara) were still in process at grant closing date. The depreciation of the Moroccan Dirham from MAD8.28 to US$1.00 at appraisal to MAD9.5 to US$1.00 at grant closure13, also resulted in savings, with 22% of the total grant amount remaining undisbursed. In sum, the project achieved its objectives overall, though the grant could have been better utilized. 42. Operation and implementation efficiency. The cancellation and non-completion of some activities are also largely due to the delays pertaining to procurement issues (mostly linked to the lack of expertise on the specific issues on local public service delivery addressed through the project activities). In addition, delays in the launch of some activities prevented them in reaching their full potential. This was particularly the case for the CRAMOs, which could have been operational – and thus could have benefitted municipalities in the target areas – for a longer period and qualified experts could have been engaged earlier. 43. In addition, the project was able to leverage US$ 11.097 million of counterpart funds (2.8 times the amount 13 Estimated costs in the PAD were in US dollars for all components, based on the original amount of US$4,550,000. An amount of MAD33 million was made available at project launch at an exchange rate of MAD7.25 for US$1 by a decree of the Ministry of Economy and Finance dated February 19, 2014. With the subsequent depreciation of the MAD, an additional amount of MAD8.2 million was made available to the project, for a total of MAD41.2 million. Page 15 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) anticipated at appraisal). Overall Outcome Rating 44. Based on the discussions above on (i) relevance of the PDO, (ii) achievement of PDO elements, and (iii) efficiency, the overall outcome of the project is rated Moderately Satisfactory. Other Outcomes and Impacts 45. Deepening the engagement on supporting the decentralization process in Morocco. The PACT enabled the Bank to pursue a technical and operational dialogue with the MoI on decentralization in Morocco through structural reforms. This directly led to a request from the MOI and the Ministry of Economy and Finance (MEF) for the preparation of a US$400 Municipal Support Program. This upcoming operation represents a continuation of the work initiated through the PACT, as it will include two subprograms which will build on work initiated through the PACT: a subprogram focused on developing a comprehensive capacity building system for municipalities including on demand TA, building on the lessons learned on component 1 of the PACT; another to support the development of a strengthened regulatory and policy environment framework for ECIs. The Program will also provide technical support to identify institutional/financial arrangements to further strengthen existing ECIs and potentially establish new ECIs. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION 46. The project design incorporated relevant lessons of engaging municipalities to provide them tailored support to improve local service delivery. The creation of pilot single-window support centers enabled the design and testing of new structures for supporting municipalities to prepare and manage projects. Based on a thorough study, which involved broad consultations and a thorough participatory process, this pilot approach aimed at ensuring the sustainability of the newly created structures, while building on existing entities (i.e., the different Government departments at the central and/or regional levels). 47. PDO Statement. The PDO statement could have been more focused, with a definition of the term “lasting�. The second part of the PDO focuses on an input, i.e., “assistance to institutionalize inter municipal cooperation�. 48. Results Framework. The original results framework was expected to be refined and strengthened during implementation by an M&E specialist to be hired within the PIU. In the event, the M&E specialist was hired with delay (in March 2017), so that the results framework eventually lacked a PDO indicator that measures the achievement of the second part of the PDO (“assistance to institutionalize inter municipal cooperation�). As a result, achievement of this element of the PDO was based on IRIs. 49. Complex institutional arrangements and changes in leadership. At preparation and pursuant to an MoI decision dated November 15, 2013, it was established that the PIU would be managed by a Project Committee comprised of representatives from several different Directorates. This arrangement and the fact that at appraisal several MoI director positions were vacant, including in key Program Directorates such as the DRSC, led to a sub-optimal governance of the Program. Page 16 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) 50. Risk identification and mitigation. The overall risk to achieve the PDO was appropriately rated Moderate. The main risks were correctly identified, including stakeholder risks, given the need to get the buy-in of pilot municipalities and given the relative mistrust in the model of private delivery of local public services. The risks were adequately mitigated through: timely outreach to municipalities after elections; continuous consultations and their strong involvement in the project; a focus on municipalities that had already started or planned to form inter-municipal arrangements; broad consultations with an array of stakeholders on the results of studies and the design of the Program; and an approach, which started with a few departments and gradually expanded. However, the issue of the complex institutional arrangements for project implementation and monitoring may have been underestimated at the design stage, as it had a strong impact on the project and largely explains the initial delays in the setting up of the PIU. 51. Sensitive political context. The project was prepared in a post-Arab Spring context, when the GoM was engaged in adjusting the legal framework to the newly adopted Constitution (2011). This placed an additional burden on the DGCL, which was responsible for drafting the Organic Laws and implementation texts on Municipalities, Provinces and Regions. The Department in charge of preparing this work (the Direction des Affaires Juridiques within DGCL/MoI (DAJDEC)) was also in charge of coordinating overall Grant implementation, at times diverting MoI staff in the PIU from monitoring the project. B. KEY FACTORS DURING IMPLEMENTATION 52. Difficulties in coordinating several Directorates and Divisions within the MoI caused initial delays in implementation. While Components 1 and 3 were led by the DAJDEC14, Component 2 was led by DRSC, which did not report directly to the Wali DGCL, the highest authority at the head of the Program Steering Committee. This caused delays in the effective launch of the program, and also created difficulties throughout the life of the program, especially on the ownership and governance of Component 2. 53. Procurement and hiring Issues. Delays during project implementation were largely due to the issues encountered in hiring the key consultants for the PIU. The contract of the Assistant Project Manager (a key function within the PIU) was terminated within few months, and the new Assistant Project Manager was hired in May 2015. The M&E specialist was recruited only in March 2017. Longer than expected preparation times for key contracts outlining the framework for Component 1 and Component 2 were experienced due to: (i) the counterpart’s lack of experience with Bank procedures; (ii) structural administrative hurdles in processing commitments, payments and disbursements within the MoI; and (iii) the lack of available expertise for hiring CRAMOs experts. Significant efforts were made by the Bank team to support program management throughout its implementation. PIU procurement experts were trained by the Bank team to facilitate their familiarization with the procedures applicable to the project. With support from the Bank team, a procurement plan for the program was developed and updated on a regular basis. 54. Lack of responsiveness of the target municipalities at project start. The municipalities were very keen on support from the project; however, they struggled to define their needs and to work with consultants in order to co-produce and ensure ownership of potential institutional reforms. It was particularly an issue for the technical assistance under Component 2, which required strong engagement of municipalities for the definition of new institutional models for service delivery at the inter-municipal level. 55. Thanks to a reinforced PIU team and strengthened Bank supervision, implementation picked up significantly at 14 Component 3 was co-led by DAJDEC and DAA (Direction des Affaires Administratives (Directorate for Administrative Matters) Page 17 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) the end of 2015, as evidenced by regular meetings of the high-level project Steering Committee15 and the acceleration of procurement activities. The Program overcame initial implementation delays, thanks to: • The hiring of key PIU experts. By the end of 2014, recruitments of the PIU financial management specialist, the Assistant Project Manager and the Institutional Expert were finalized. The recruitment of the new Assistant Project Manager in May 2015 was key to the pick-up of activity in the PIU. • The continued sensitization of municipalities. A national level workshop gathered representatives of over 50 LGs on October 2014 to sensitize the LGs on the objectives of the Program and to select the regions where the support centers to the municipalities were to be set up. During the workshop, Casablanca authorities expressed a specific interest in Casablanca also being included in the first batch of project beneficiaries. • The organization of regular follow-up meetings by the PIU to monitor progress of implementation closely. The frequency of these meetings (which included at least three Directorates of the MoI) increased by the end of 2015 to one per month (with the Bank team attending most of them). A detailed Action Plan was developed after the mid-term review, which was updated on a regular basis. This renewed engagement was combined with reaffirmed political buy-in at the highest level of MoI through the organization of several Steering Committees (COPILs). • Support provided by the Bank team on procurement helped resolve recruitment issues through flexible solutions, including through direct contracting. 56. Weakness of the M&E system. The M&E expert in charge of refining the project results framework was hired only in March 2017. The M&E expert fell also behind schedule on his first deliverables on the definition of and methodology for the M&E system (finalized in September 2017) and the deliverables could have been better. This weakness in the project M&E persisted sporadically until grant closure but was mitigated by the engagement of other members of the PIU (especially the Assistant Project Manager and the Institutional Expert) who contributed to clarify the definition of the intermediate results. 57. The Program was extended by six months from August 31, 2018 to March 2, 2019 to provide time to complete studies under Component 2. These studies were to set the basis for future reforms on inter municipal cooperation. The extension also extended the financing of the four CRAMOs, which were established later than initially planned. This allowed the CRAMOs to better demonstrate their operating model and contributed to convince the MoI to include their further development in the new action plan of the Ministry. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME Quality at Entry 58. The Bank provided efficient support during project preparation and guidance in the project design. In particular, the Bank team: (i) conducted a contextual study to identify the key project components; (ii) incorporated global lessons 15Five Steering Committees (COPIL) were organized on April 28, 2016; September 22, 2016 ; December 20, 2016; December 14, 2017, and February 2, 2019. Page 18 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) in the design; (iii) conducted fiduciary and institutional assessments; (iv) appropriately identified risks and mitigation measures; and (v) helped design the initial M&E system, which was to be further refined by the PIU during the first year of implementation. The main structure of the PIU was set-up during preparation and the remaining consultants were to be hired during implementation. Project appraisal ensured that the Bank’s financial management, procurement and safeguards policies were complied with. As noted earlier, the PDO statement could have been clearer and outcome focused. In addition, there were weaknesses in the results framework. 59. Risk identification and mitigation related to institutional arrangements. The PAD identified the risks linked to the complexity of Moroccan administration and developed associated mitigation measures; however, the two key project components were coordinated by two different directorates. Due to these complex institutional arrangements, the process of decision making to reach consensus was often difficult and sometimes delayed the implementation of the pilot projects. The two components were deeply interconnected and needed to be advanced together, and this ambitious strategy led to concrete and tangible results, as evidenced by both components being further developed into subprograms in the proposed Municipal Performance PforR. Quality at Supervision 60. The Bank team conducted a proactive and hands-on supervision of the project to help the PIU in the daily management of the project and provided support in resolving issues identified during the life of the project. Bi-monthly meetings were organized with the PIU to ensure smooth progress of the project. The first three TTLs of the project were all based in Rabat, while 2-3 Bank experts were mobilized over the project implementation period to support the PIU (including in assessing the quality of the analytical deliverables produced). There were a total of 15 official supervision missions and technical visits involving Bank consultants, along with regular meetings between the PIU and the Bank Team over the six years of implementation. Six thorough implementation status reports and 11 aide-memoires were timely produced (see Annex 4.5 and Annex 4.6) which included candid ratings and relevant action plans to address issues identified. Implementation problems were identified as early as possible and communicated to the GoM and appropriate actions were identified, including at the Mid Term Review, and timely communicated to Bank Management. 61. The Bank provided extensive technical support to the PIU on M&E. Despite the close monitoring of the WB team to ensure the timely hiring of the PIU M&E expert, the latter was eventually recruited only in March 2017. Several meetings were also organized with the Bank team to review and clarify the content of the M&E reports. However, the Bank could have addressed the weaknesses in the PDO and the results framework (discussed under Quality at Entry) during project implementation. 62. Additional support was mobilized to help the PIU manage project activities effectively, including for the technical validation of various studies and the sustainability of the program. Various inputs were provided by the Bank team to support the PIU, including: (i) technical review of the ToRs for hiring experts to support the PIU or private firms to implement program components; (ii) technical review of most of the reports for Component 1 and Component 2 (which enabled an in-depth dialogue on the solutions/processes at stake); and (iii) technical review of the progress reports developed by the PIU. In addition, the task team discussed the sustainability of the program and of its major achievements on numerous occasions. This resulted, among other things, in the GoM requesting support to fund the national municipal performance program in the form of a Program for Results. 63. Procurement and financial management. All contracts were procured in compliance with the Bank’s Procurement and Consultant Guidelines. Adequate FM arrangements were in place during project implementation to ensure the proper use and accountability of project funds. The Bank fiduciary specialists guided the client and conducted capacity Page 19 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) building trainings on procurement, financial management and disbursement (including on NPF and STEP) to address the fiduciary challenges of the project. The FM team ensured close monitoring of project financial implementation by the PIU through: (i) regular financial management capacity building trainings; (ii) support to speed up payments and disbursements; (iii) resolving the different bottlenecks in the budgeting and yearly allocation of projects’ funds jointly with the MEF and the PIU; (iv) support for the preparation of realistic payments forecasts; (v) enabling the production of regular documentation and reconciliation statements of the designated account; (vi) support for the production of acceptable Interim Unaudited Financial Reports (IUFRs); and (vii) support the development of an annual action plan to implement the recommendations of the audit reports. 64. The last audit report for 2017 highlighted the need for compliance with procurement guidelines, such as adherence to the Procurement plan approved by the Bank, as well national regulations of public procurement in terms of developing precise terms of reference and contracting procedures. The main procurement challenges of the project were (i) the limited knowledge and experience of the PIU with Bank procurement procedures, particularly in the selection of consultants, and (ii) the difficulty of finding qualified consultants in the project area. The Bank team provided support on procurement through flexible solutions (including through Single Source Selection). Justification of Overall Rating of Bank Performance 65. Bank performance is rated Moderately Satisfactory, based on the above discussion of Quality at Entry and Quality of Supervision. Bank performance, together with the client’s strong efforts to implement the program after the Mid- term review, was critical to the moderate satisfactory outcome of the project in the context of weak capacity and the complex institutional arrangements for the overall management of the project. Risks to development outcome 66. The main risks pertain to the sustainability of the program and the ability of the GoM to provide continued technical support to municipalities (in order for the latter to better plan and implement their investments) and to encourage effective inter-municipal coordination. These risks are mitigated by: a) The preparation of a Municipal Performance PforR (to be negotiated in the coming months), which comprises subprograms that largely echo the objectives of the PACT to strengthening the institutional framework for inter-municipal cooperation and enhance the organization and human capacities of municipalities. b) DGCL reaffirming the strong engagement of the MoI to build on the experience with the CRAMOs, drawing on the lessons learned to refine the model tested under PACT. V. LESSONS LEARNED AND RECOMMENDATIONS a) Having clear institutional arrangements upfront and clarifying beneficiary / Government obligations for project management is key. Coordination of the two main components of this program being entrusted to two different Directorates within the MoI contributed to the important delays registered. The clarification of responsibilities regarding daily project management and technical validation process would have avoided such delays. b) Ensuring adequate resources to define a robust monitoring and evaluation framework at the design stage is essential for efficient monitoring of project results. Several targets of the results framework indicators remained to be set at the design stage, while some results themselves were to be further defined by the PIU during the early stages of project implementation. This had a strong impact on the assessment of the project as the hiring of the Page 20 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) M&E expert was significantly delayed due to procurement and hiring issues. c) The capacity of the PIU to implement project activities needs to be assessed and the supervision budget should be tailored to the specific needs of the client. The grant funded technical assistance activities focused on complex issues requiring specific and significant expertise. The program was challenging to supervise, as the PIU regularly sought Bank support to monitor and assess the analytical work pursued, while the Bank supervision budget remained very limited. d) Taking moderate risks on nascent topics proved successful in developing dialogue with the client. The development of inter-municipal cooperation was not a priority for the Government when the project was prepared. This objective is now clearly an MoI agenda and has been included as a subprogram of the PforR that is under preparation. e) Operational arrangements with limited involvement of the MoI ensured the success of the CRAMOs. The project was designed as a mechanism to provide support to municipalities in fulfilling their mandates for local service delivery, investment planning and implementation, and successfully supported the PIU in this regard through the CRAMOs. This operational arrangement proved successful: the use of external consultants (as opposed to MoI staff) represented for the municipalities a pledge of independence vis-à-vis the Central Government. This happened to be beneficial for the extensive use of the support provided to LGs; future projects may consider such arrangements to ensure effective use of deconcentrated support by the municipalities. . Page 21 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: To set up a lasting program to provide Local Governments in the Project Area access to decentralized support services Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion The Local Government Support Yes/No N Y Y Program (PACT) is set-up and operational. 09-Dec-2013 31-Aug-2018 02-Mar-2019 Comments (achievements against targets): The objective is achieved : the project successfully conceived and put in place a new program to provide LGs access to deconcentrated support in the following regions: Casablanca-Settat, Souss-Massa, Oriental and Fès-Meknès. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion The financial incentive of the Amount(USD) 0.00 3000000.00 8475842.40 PACT is financed adequately and there is a formal 09-Dec-2013 31-Aug-2018 31-Aug-2018 commitment to fund the Program after grant closure. Page 22 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) Comments (achievements against targets): Actual % target achieved : 282%. The financial incentive of the PACT is adequately funded: this figure includes the total financing supported by the FART (a fund to support the creation of inter-municipal structures specialized in the management of public transport). Objective/Outcome: To provide Local Governments in the Project Area assistance to institutionalize inter municipal cooperation Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Direct project beneficiaries Number 0.00 3000000.00 11451229.00 09-Dec-2013 31-Aug-2018 31-Aug-2018 Female beneficiaries Percentage 0.00 40.00 50.07 09-Dec-2013 31-Aug-2018 31-Aug-2018 Comments (achievements against targets): Actual % target achieved: 381%. The final figure includes the inhabitants of all the target municipalities which benefitted from component 1 and component 2 of the PACT. For the ECIs benefitting from PACT activities (Al Assima, Al Baida, Greater Agdir and Greater Tata), the beneficiaries correspond to the total population of each municipality constituting the ECI. A.2 Intermediate Results Indicators Component: Component 1: Deconcentrated Local Governments Support Centers Page 23 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Local Government support Number 0.00 3.00 4.00 centers established. 09-Dec-2013 31-Aug-2018 31-Aug-2018 Comments (achievements against targets): Actual % target achieved : 133%. Support Centers were established and operationalized in 2017-2018. The upcoming Municipal Support PforR co-funded by the WB will allow to scale up and systematize this type of deconcentrated TA for Moroccan municipalities. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Government Departments Number 0.00 4.00 5.00 offering services through the established support centers. 09-Dec-2013 31-Aug-2018 02-Mar-2019 Comments (achievements against targets): Actual % target achieved : 125%. The centralized and deconcentrated services of 4 Departments provided support to municipalities in coordination with the CRAMOs (MoI; Department of Environment), Directorate of State Domains (under the authority of the MEF), and Curator of Ancient Monuments in Fes (under the Ministry of Culture). Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Page 24 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) Municipalities benefiting from Number 0.00 50.00 84.00 support of the LG Support Centers 09-Dec-2013 31-Aug-2018 02-Mar-2019 Comments (achievements against targets): Actual % target achieved :168%. The municipalities having benefitted from effective/concrete TA of the CRAMOs (through the development of ToRs, requirement specifications, delegated management contract, etc.) is significantly higher than expected, thus illustrating the high demand for this type of support. Component: Component 2: Inter-Municipal Cooperation and Institutional Reform for Local Service Delivery Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Conurbation associations Number 0.00 4.00 4.00 created and/or expanded (geographically or in sector 09-Dec-2013 31-Aug-2018 02-Mar-2019 terms) with clear/sustainable legal, financial, governance, and staffing arrangements. Comments (achievements against targets): Actual % target achieved : 100%. Three ECIs (Al Assima, Grand Agadir and Al Baida) and the ''Grand Jadida'' Local Government Grouping (Groupement de collectivités territoriales) have operation structures with an appointed Director general of Services (Directeur Général des Services). Page 25 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Conurbations with operational Number 0.00 3.00 2.00 public asset companies or similar institutional 09-Dec-2013 31-Aug-2018 02-Mar-2019 arrangements. Comments (achievements against targets): Actual % target achieved : 66%. The two ECIs of Al Assima and Grand Agadir both have their own public asset company (for public transport management and solid waste management). Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Lessons learnt from the pilot Yes/No N Y Y phase drawn and program to further support to inter- 09-Dec-2013 31-Aug-2018 02-Mar-2019 municipal cooperation developed. Comments (achievements against targets): The IRI was fully achieved. A capitalization workshop was organized to take stock of the experience of the CRAMOs. The deliverables of the support centers will be made available on the official LG portal in the coming months. Page 26 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) Component: Component 3: Program Management Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion The monitoring and evaluation Yes/No N Y Y system for the Program is operational. 09-Dec-2013 31-Aug-2018 02-Mar-2019 Comments (achievements against targets): The IRI is achieved. The M&E system was established during implementation due to the late hiring of the M&E expert within the PIU. Page 27 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) B. ORGANIZATION OF THE ASSESSMENT OF THE PDO Objective/Outcome 1: To set up a lasting program to provide Local Governments in the Project Area access to decentralized support services 1. The Local Government Support Program (PACT) is set-up and operational 2. The financial incentive of the PACT is financed adequately and Outcome Indicators there is a formal commitment to fund the Program after grant closure. 3. Direct project beneficiary (% of which is female) 1. Local Government support centers established (IRI 1.1) 2. Government Departments offering services through the established support centers (IRI 1.2) 3. Municipalities benefiting from support of the LG Support Intermediate Results Indicators Centers (IRI 1.3) 4. Lessons learnt from the pilot phase drawn and program to further support to inter-municipal cooperation developed (IRI 2.3). 1. Consultations held to define the model for support centers 2. 4 Local Government support centers established 3. 11 Experts recruited Key Outputs by Component 4. 5 Government Departments offered services through the (linked to the achievement of the Objective/Outcome 1) established centers 5. 84 Municipalities benefited from support of the LG Support Centers 6. One Capitalization workshop conducted Page 28 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) 7. Inventory of the resources (existing and developed by CRAMOs) developed and in the process of being made publicly available on the online portal 8. Incentive funds from the Central Government Leveraged Objective/Outcome 2: To provide assistance to institutionalize inter municipal cooperation. 1. Direct project beneficiaries Outcome Indicators 1. Conurbation associations created and/or expanded (geographically or in sector terms) with clear/sustainable legal, financial, governance, and staffing arrangements. (IRI 2.1) 2. Conurbations with operational public asset companies or Intermediate Results Indicators similar institutional arrangements. (IRI 2.2) 3. Lessons learnt from the pilot phase drawn and program to further support inter-municipal cooperation developed 1. 4 Conurbation associations created and/or expanded (geographically or in sector terms) with clear/sustainable legal, financial, governance, and staffing arrangements. 2. 2 Conurbations with operational public asset companies or Key Outputs by Component similar institutional arrangements. (linked to the achievement of the Objective/Outcome 2) 3. One Capitalization workshop conducted 4. Adequate Institutional models for creating/expanding inter- municipal cooperation structures designed Page 29 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) . ANNEX 2. PROJECT COST BY COMPONENT Table 1. Project cost by Component Amount at Approval Actual at Project Percentage of Approval Components (US$M) Closing (US$M) (US$M) Deconcentrated Local 1.95 2.02 104 Government support centers Inter-municipal cooperation and institutional reform for 5.95 11.93 201 local service delivery Program Management 0.45 0.60 133 Contingencies 0.10 0 0 Total 8.45 14.55 172 16 Project cost by component includes all funding sources (grant amount and recipient co-financing). The estimated project cost at approval US$8.45 million (with an estimated contribution of US$3.9 million from Borrower and US$4.55 million from donor financing). The original amount entered in Bank systems is different from original amounts per PAD and can’t be changed in the data sheet. The project was able to leverage US$11.097 million of counterpart funds, as detailed in Table 2 below. Table 2. Share of local contributions in total financing Amount at Approval Actual at Project Components (US$M) Closing (US$M) Component 1 – Donor 1.05 1.03 Financing Component 1 – Local 0.90 0.99 contribution Total Component 1 1.95 2.02 Component 2 – Donor 2.95 1.83 Financing Component 2 – Local 3.0 10.10 contribution Total Component 2 5.95 11.93 16The difference between figures reported in the ICR and data from the system comes from the difference in exchange rates: ICR final project costs were provided by the PIU and converted to US$ based on July 24, 2019 exchange rate, while throughout the life of the project, MAD figures were converted to US$ by the system each time a disbursement was made by the Bank. Page 30 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS The team engaged with the recipient throughout the ICR preparation process. The list below presents key topics/queries on which recipient’s comments were requested: f) Beneficiary municipalities feedback survey; g) Financial details on project component costs and local financial contribution; h) Methodology used for the calculation of beneficiaries. The recipient also shared all the deliverables produced by the CRAMOs as well as all final deliverables produced as part of the two component activities. After several rounds of discussion during the ICR preparation process, the recipients indicated (per their email dated July 26th, 2019) that they had no particular comments on the draft ICR document, other than minor technical edits. Page 31 of 32 The World Bank DTF: MA-Local Government Support Program (P144438) ANNEX 4. SUPPORTING DOCUMENTS (IF ANY) 1. Project Concept Note 2. Project Appraisal Document 3. Project Legal Agreement 4. Project operations manual 5. Aide Memoires 6. Implementation Status Reports 7. Borrower’s Implementation Completion Report (Borrower’s ICR) and Annexes 8. Beneficiary feedback survey form and synthesis of the feedback 9. Stocktaking note on the Capitalization and perspectives workshop 10. Minutes of the Steering Committee organized on December 14, 2017 11. Ministère de l’Intérieur, DGCL, 2019, Projet de note sur une stratégie concernant les ECI. Page 32 of 32