REPUBLIC OF UZBEKISTAN

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank IMPLEMENTATION COMPLETION AND RESULTS REPORT (Loan No ) ON A LOAN IN THE AMOUNT OF US$24.0 MILLION TO REPUBLIC OF UZBEKISTAN FOR THE TASHKENT SOLID WASTE MANAGEMENT PROJECT March 28, 2007 Environmentally and Socially Sustainable Development ECCU8 Europe and Central Asia Region Report No. ICR This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

2 CURRENCY EQUIVALENTS Currency Unit = Soum Soum 1.00 = US$0.001 US$1.00 = 1, Soum (Exchange Rate Effective December 20, 2006) UZBEKISTAN FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS CAS EBRD IBRD IDA ICB IMF PAD PDO PIU QAG Country Assistance Strategy European Bank for Reconstruction and Development International Bank for Reconstruction and Development International Development Agency International Competitive Bidding International Monetary Fund Project Appraisal Document Project Development Objective Project Implementation Unit Quality Assurance Group Vice President Country Director Sector Director Sector Manager Task Team Leader Shigeo Katsu (ECAVP) Annette Dixon (ECCU8) Peter Thomson (ECSSD) Juergen Voegele (ECSSD) Janis Bernstein (ECSSD)

3 UZBEKISTAN TASHKENT SOLID WASTE MANAGEMENT PROJECT CONTENTS A. Basic Information...i B. Key Dates...i C. Ratings Summary...i C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)...i C.3 Quality at Entry and Implementation Performance Indicators...ii D. Sector and Theme Codes...ii E. Bank Staff...ii F. Results Framework Analysis...ii G. Ratings of Project Performance in ISRs...v H. Restructuring (if any)...v I. Disbursement Profile...vi 1. Project Context, Development Objectives, and Design Context at Appraisal (brief summary of country and sector background, rationale for Bank assistance) Original Project Development Objectives and Key Indicators Revised Project Development Objectives and Key Indicators, and Reasons/Justification Main Beneficiaries Original Components (as approved) Revised Components Other Significant Changes Key Factors Affecting Implementation and Outcomes Project Preparation, Design, and Quality at Entry Implementation Monitoring and Evaluation (M&E) Design, Implementation, and Utilization Safeguard and Fiduciary Compliance Post-completion Operation/Next Phase Assessment of Outcomes Relevance of Objectives, Design, and Implementation Achievement of Project Development Objectives Efficiency Justification of Overall Outcome Rating Overarching Themes, Other Outcomes and Impacts Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops Assessment of Risk to Development Outcome Assessment of Bank and Borrower Performance Bank Performance Borrower Performance Lessons Learned Comments on Issues Raised by Borrower/Implementing Agencies/Partners...22

4 Annexes Annex 1: Results Framework Analysis...23 Annex 2: Project Costs and Financing...25 Annex 3: Outputs by Component...27 Annex 4: Economic and Financial Analysis...30 Annex 5: Bank Lending and Implementation Support/Supervision Processes...34 Annex 6: Beneficiary Survey Results...37 Annex 7: Stakeholder Workshop Report and Results...39 Annex 8: Summary of Borrower s ICR and/or Comments on Draft ICR...40 Annex 9: Comments of Cofinanciers and Other Partners/Stakeholders...50 Annex 10: List of Supporting Documents...52

5 A. Basic Information Country: Uzbekistan Project Name: Tashkent Solid Waste Management Project Project ID: P L/C/TF Number(s): IBRD ICR Date: 03/20/2007 ICR Type: Core ICR Lending Instrument: SIL Borrower: Original Total Commitment: Environmental Category: B Implementing Agencies: Hokimiyat of Tashkent TASHKENT MUNICIPALITY USD 24.0M Disbursed Amount: USD 21.4M Cofinanciers and Other External Partners: European Bank for Reconstruction and Development (EBRD) B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 04/17/1997 Effectiveness: 05/13/ /13/1999 Appraisal: 01/13/1998 Restructuring(s): Approval: 05/21/1998 Mid-term Review: 09/18/2001 Closing: 12/31/ /30/2006 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Risk to Development Outcome: Bank Performance: Borrower Performance: Satisfactory Moderate Satisfactory Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Satisfactory Quality of Implementing Satisfactory Supervision: Agency/Agencies: Satisfactory Overall Bank Performance: Satisfactory Overall Borrower Performance: Satisfactory i

6 C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments (if Indicators Performance any) Potential Problem Project at any time (Yes/No): Problem Project at any time (Yes/No): DO rating before Closing/Inactive status: No No Satisfactory Quality at Entry (QEA): Quality of Supervision (QSA): Rating None Satisfactory D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Solid waste management Theme Code (Primary/Secondary) Environmental policies and institutions Primary Primary Municipal governance and institution building Primary Primary Pollution management and environmental health Primary Primary E. Bank Staff Positions At ICR At Approval Vice President: Shigeo Katsu Johannes F. Linn Country Director: Annette Dixon Ishrat Husain Sector Manager: Juergen Voegele Michele E. de Nevers Project Team Leader: Janis D. Bernstein Roger J. Batstone ICR Team Leader: ICR Primary Author: F. Results Framework Analysis Janis D. Bernstein Wendy Schreiber Ayres Project Development Objectives (from Project Appraisal Document) The project's development objectives were to (a) return the existing municipal solid waste management system to a satisfactory level of service, and (b) improve the technical, financial, and institutional basis for its future operation and development. The project would achieve these objectives (called specific development objectives in the project appraisal document) by: Ensuring that adequate collection infrastructure in the form of collection bins and vehicles exist to provide basic municipal solid waste management services to the residential, commercial, institutional, and industrial sectors. Improving access and sanitation at public and residential collection points. ii

7 Upgrading infrastructure at the city s long-term landfill including landfill practices and operations to improve efficiency and reduce environmental impact. Providing for the closure of two existing landfills within the city. Developing four transfer stations to optimize long-term use of the remaining landfill facility. Providing interim capability for the safe handling of biomedical waste. Initiating actions to place the system on a stable financial footing in terms of cost recovery and the ability to finance on-going operations and equipment replacement. Upgrading institutional capacity to manage the system as an independent, selffinancing utility suitable for privatization in the medium term. Developing a strategic plan for the system s future development, including identification of major capital facility requirements and business structure options for the system s financing and operation. Providing for comprehensive public consultation in developing and operating the system. Neither the Loan Agreement nor the Project Agreement included a set of key indicators. This was not standard practice at the time the project was approved in The project appraisal document, however, contained a set of monitoring indicators and targets in annex 1 that served as the basis for the project s monitoring and evaluation system. Revised Project Development Objectives (as approved by original approving authority) The project development objectives were not revised. (a) PDO Indicator(s) Indicator Indicator 1 : Value quantitative or Qualitative) Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Population satisfied with solid waste collection service 30% (based on initial household survey) There was no target established Actual Value Achieved at Completion or Target Years 60% city-wide 80% those receiving highest service level Date achieved 03/14/ /31/ /31/2005 Comments (incl. % achievement) Indicator 2 : Spetstrans accounts receivable - average days of billing - residential clients Value quantitative or Qualitative) Date achieved 03/14/ /31/ /31/2005 Comments (incl. % achievement) iii

8 Indicator 3 : Spetstrans accounts receivable - average days of billing - industrial and commercial organizations Value quantitative or Qualitative) Date achieved 03/14/ /31/ /31/2005 Comments (incl. % achievement) Indicator 4 : Spetstrans accounts receivable - average days of billing - budget organizations Value quantitative or Qualitative) Date achieved 03/14/ /31/ /31/2005 Comments (incl. % achievement) The average days of billing rose for budget organizations because they were not receiving adequate budget allocations from the government to pay for their operations, including solid waste management services. (b) Intermediate Outcome Indicator(s) Indicator Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Indicator 1 : Availability of collection vehicles -- % of total that are operational Value (quantitative or Qualitative) Date achieved 12/12/ /31/ /29/2006 Comments The international standard for average vehicle availability is between 80 and 90 (incl. % percent. achievement) Indicator 2 : Number of transfer stations in operation Value (quantitative or Qualitative) Date achieved 12/12/ /31/ /29/2006 Comments (incl. % achievement) Indicator 3 : Spetstrans operational ratio Value (quantitative or Qualitative) Date achieved 12/12/ /31/ /31/2005 Comments (incl. % achievement) iv

9 Indicator 4 : Utility accounting systems (percent implemented) Value (quantitative or Qualitative) Date achieved 12/12/ /31/ /29/2006 Comments (incl. % achievement) G. Ratings of Project Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 07/02/1998 Satisfactory Satisfactory /14/1999 Satisfactory Satisfactory /27/1999 Satisfactory Satisfactory /17/1999 Satisfactory Satisfactory /19/2000 Satisfactory Satisfactory /21/2000 Satisfactory Satisfactory /10/2000 Satisfactory Satisfactory /23/2000 Satisfactory Satisfactory /22/2001 Satisfactory Satisfactory /23/2001 Satisfactory Satisfactory /12/2001 Satisfactory Satisfactory /03/2002 Satisfactory Satisfactory /08/2002 Satisfactory Satisfactory /19/2002 Satisfactory Satisfactory /11/2002 Satisfactory Satisfactory /27/2003 Satisfactory Satisfactory /30/2003 Satisfactory Satisfactory /29/2004 Satisfactory Satisfactory /31/2004 Satisfactory Satisfactory /08/2004 Satisfactory Satisfactory /16/2005 Satisfactory Satisfactory /24/2006 Satisfactory Satisfactory /29/2006 Satisfactory Satisfactory H. Restructuring (if any) Not Applicable v

10 I. Disbursement Profile vi

11 UZBEKISTAN TASHKENT SOLID WASTE MANAGEMENT PROJECT Loan No Project Context, Development Objectives, and Design 1.1 Context at Appraisal (brief summary of country and sector background, rationale for Bank assistance) Country and sector background. At the time when preparations for the project began in 1996, Uzbekistan had been independent from the Soviet Union for only five years. During the period following independence, the government launched an ambitious program to reform the housing and municipal services sector, leaving the responsibility for municipal solid waste management and other urban services largely decentralized. Service provision responsibilities were transferred in large part to the local governments. Tashkent is Uzbekistan s largest city with a population of 2.2 million people, nearly 10 percent of the country s population. It had been an important administrative center for the central Asian republics during the Soviet period, and remained the home of the central government administration at independence. However, the city was struggling to provide services at the levels enjoyed during its years as a Soviet republic due to reductions in the subsidies that it had been receiving under the former arrangements. As with other services, solid waste collection and disposal services had declined significantly since independence, leading residents and businesses to dump and burn solid waste in unauthorized piles throughout the city. According to a 1997 social assessment the people of Tashkent were growing increasingly dissatisfied with the solid waste situation. 1 More than half of the respondents in a citywide household survey indicated that they were not satisfied with their solid waste services and would be willing to pay considerably more for their collection service if it were improved. Reflecting the priority the government assigned to improving solid waste conditions in the capital city, the authorities sought advice and financial assistance from the World Bank and the European Bank for Reconstruction and Development (EBRD) in establishing a more market-oriented approach to delivery of solid waste services, upgrading collection infrastructure (vehicles, bins, collection points), constructing transfer stations, closing in-city landfill sites, and improving operations at a landfill outside of city boundaries. The total estimated cost of the project was US$56.0 million, requiring a World Bank loan of US$24.0 million, EBRD loan of US$19.2 million, and a local contribution of $10.7 million. Rationale for World Bank involvement. The World Bank s involvement in the project was important for several reasons. First, the Bank offered unbiased advice on choice of technologies, and enabled the city authorities to resist pressures by foreign suppliers of expensive, but inappropriate high technology approaches. Second, it provided assistance to strengthen the operational and financial management of Spetstrans the publicly-owned 1 Bernstein, Janis with support from Network of Social Scientists from the Aral Sea Region Uzbekistan: Tashkent Solid Waste Management Project Social Assessment. Unpublished manuscript. June. 1

12 service provider with the long-term aim of establishing a financially self-sustaining entity. Third, it helped in providing for public consultations in designing and operating the system. Fourth, the World Bank helped to upgrade environmental management at Tashkent s main landfill. Fifth, the Bank helped to secure resources from a parallel financier, the EBRD. Contribution to higher-level objectives. The project s objectives were consistent with the Country Assistance Strategy (CAS) , discussed by the World Bank s Board of Directors on March 10, 1998, particularly the CAS s strategic component calling for the removal of inefficiencies in resource utilization in municipal services and infrastructure. The project directly addressed this concern by supporting the rehabilitation and reorganization of the solid waste management sector of Uzbekistan s largest city, and as such, increasing the operational efficiency and financial sustainability of providing solid waste management services. 1.2 Original Project Development Objectives and Key Indicators The project s development objectives were to (a) return the existing municipal solid waste management system to a satisfactory level of service, and (b) improve the technical, financial, and institutional basis for its future operation and development. The project would achieve these objectives (called specific development objectives in the project appraisal document) by: Ensuring that adequate collection infrastructure in the form of collection bins and vehicles exist to provide basic municipal solid waste management services to the residential, commercial, institutional, and industrial sectors. Improving access and sanitation at public and residential collection points. Upgrading infrastructure at the city s long-term landfill including landfill practices and operations to improve efficiency and reduce environmental impact. Providing for the closure of two existing landfills within the city. Developing four transfer stations to optimize long-term use of the remaining landfill facility. Providing interim capability for the safe handling of biomedical waste. Initiating actions to place the system on a stable financial footing in terms of cost recovery and the ability to finance on-going operations and equipment replacement. Upgrading institutional capacity to manage the system as an independent, selffinancing utility suitable for privatization in the medium term. Developing a strategic plan for the system s future development, including identification of major capital facility requirements and business structure options for the system s financing and operation. Providing for comprehensive public consultation in developing and operating the system. Neither the Loan Agreement nor the Project Agreement included a set of key indicators. This was not standard practice at the time the project was approved in The project appraisal document, however, contained a set of monitoring indicators and targets (see annex 1) that served as the basis for the project s monitoring and evaluation system. The key indicators related to the number and availability of each type of waste collection vehicles and landfill operating equipment, amount of waste collected and delivered to the 2

13 landfill, tariff levels for each category of consumer, accounts receivables, and Spetstrans operating ratio. 1.3 Revised Project Development Objectives and Key Indicators, and Reasons/Justification The project s development objectives were not formally revised during implementation. The loan agreement, however, was amended once to reduce the number of in-city landfills that would need to be closed in fulfillment of a condition of the loan agreement from two to one. Under the amendment, the hokimiyat of Tashkent (city administration) would not be required to close the Zangiota landfill because it is located outside the city s jurisdiction. 1.4 Main Beneficiaries (original and revised; briefly describe the the primary target group identified in the PAD and as captured in the PDO, as well as any other individuals and organizations expected to benefit from the project) The primary target beneficiaries were the 2.2 million residents of Tashkent and nonresidents who work in or visit the city. The project specifically targeted: (a) residents in high-density housing and private single-family homes where limited waste collection was leading to unsanitary and unsightly conditions, (b) women and children who are in general responsible for handling household waste disposal, and (c) people living in the vicinity of the Hasanbay landfill. Other important beneficiaries of the project included the city administration, which would benefit from strengthened procurement, fiduciary, and project management practices, and Spetstrans, which would benefit from improved managerial, operational, financial, and strategic planning systems. 1.5 Original Components (as approved) The project comprised two main components: investment, and institutional support. The World Bank financed only investment in equipment (bins, waste collection vehicles) and the transfer stations. The World Bank s financing partner, the EBRD, financed both investment and, largely on a grant basis, technical assistance. The technical assistance helped the city administration and the service provider, Spetstrans, to improve financial and operational management of solid waste services and to develop a strategy for the future development of the sector. It also assisted the municipality in developing capacity for project management. The financier for each component is indicated in the description of the components below. Investment Component The investment component was to finance the upgrading of the basic waste collection capacity of the municipal solid waste management system, modernization of the long-term landfill facility, closure of the two in-city landfills, and development of four strategically located transfer stations, in order to bring the system up to a reliable level of service. Investments covered: 3

14 (a) Collection Infrastructure (IBRD). This subcomponent would finance the procurement of a variety of types of collection bins to serve residences (both single family houses and multistory residential buildings owned and maintained by the housing authorities), business, government offices, and others. These included 750 liter metal collection bins, suitable for use by both side and rear loading vehicles, and 1,100 liter bins having wheels for transfer from secure collection points to rear loading vehicles and small plastic or metal residential bins (100-liter and 240-liter) for use by single family residences. In addition, the subcomponent was to finance procurement of prefabricated concrete slabs for the nonsecure collection points, designed to facilitate user access, litter control, and bin washing. (b) Collection Vehicles (IBRD) and Support Equipment (EBRD). The subcomponent would bring the Spetstrans fleet up to 610 collection and support vehicles from 433 by the end of 1998, allowing for expansion and improved efficiency of services. Most of the new vehicles were to be three-ton rear and side loading compactors and five-ton dump trucks, both of which are suitable for service within the city and for hauling of waste to transfer stations. A number of ten-ton roll-off type container trucks would be introduced to serve large commercial and industrial users and haul trash to the landfill. In addition, the project would supply a number of vacuum trucks, service vehicles, bin washing vehicles, and tractors. To ensure that newer existing vehicles were able to remain in service, the project included spares for 100 trucks purchased in (c) Vehicle Park Development (EBRD). The project would finance the upgrading of all existing district service centers plus the development of a central repair workshop for major repairs. The district centers would provide running maintenance, while the central facility would be responsible for major maintenance and overhaul of vehicles and landfill equipment. The central facility would be located at either an existing district service center or at the Zangiota waste processing facility. (d) Landfill Modernization (EBRD). The project would finance the upgrading of the Akhangaran highway landfill, the city s long-term disposal facility. This would involve procurement of new bulldozers, landfill compactors, excavators, and support equipment for maintenance and transport of staff. The project would also support investments to improve the operation of the landfill, including construction of site maintenance shops and a service building, upgrading of access roads and utilities, strengthening of capacity for environmental monitoring, and closing filled-in areas of the landfill while opening new sections for disposal of waste. The government would be responsible for improving the turning access from the main four-lane highway to the landfill. (e) Landfill Closure (EBRD). The project would finance the equipment and civil works required to close the Zangiota and Hasanbay landfills in an environmentally-sound manner, and the strengthening of capacity for long-term environmental monitoring. The equipment initially acquired for this work would be assigned to the Akhangaran landfill operation once the other landfills were closed. (f) Transfer Stations (IBRD) and Transfer Vehicles (EBRD). The project would finance four transfer stations, each handling an equal portion of the estimated 1.1 million tons per year of waste that would be disposed of at the Akhangaran landfill. Each transfer station, developed on a turnkey basis, would be designed to handle up to 280 incoming 4

15 vehicles and 30 outgoing vehicles per day. Each facility would employ two fixed compaction systems that would fill containers of 30 cubic meters. Two containers per trip would be transported on a flat bed truck and trailer combination. The transfer stations would be located on the perimeter of the city, each serving roughly a city quadrant and would be sited for convenient access to the ring road system leading to the Akhangaran highway. Selection of the sites to be used would be undertaken by the municipality as a prerequisite to project initiation. (g) Biomedical Waste Facilities (EBRD). The project would support the establishment of an interim biomedical waste facility to allow the separate collection and disposal of medical waste until a lasting solution is found (medical waste is currently commingled with other waste at landfills). It would also finance procurement of dedicated vehicles and containers to be used to collect the waste from generators, and the construction and operation of a segregated cell to be developed at the Akhangaran landfill for its disposal. Institutional Support Component (EBRD) EBRD was to finance on a grant basis technical assistance for project management and institutional strengthening aimed at ensuring the sustainability of the services following the end of the project. This would ensure that implementation of the project proceeded in concert with longer-term system planning and institutional strengthening. (a) Project Management Support. During project preparation, it was envisaged that this subcomponent would support the establishment and operation of two project implementation units (PIUs), which, with the support of the project management consultant, would supervise the project s implementation. The central PIU would be located within the Ministry of Macroeconomics and build on an existing PIU that had a proven track record in managing Bank projects, including financial management. The subsidiary PIU, staffed with two professionals, would be located in the solid waste management department of the municipality. The project would finance procurement of computer and office equipment, office upgrading, PIU staff costs, and support related to procurement and disbursement. (b) Institutional Strengthening. This subcomponent would support a range of planning and other technical assistance activities, including the preparation of a strategic plan for the medium and long-term development of the system. The plan would cover the longer-term approaches, initiatives, and investments required to maintain services, modernize waste processing facilities, improve hazardous waste management, and introduce measures to minimize and recycle waste. It would also provide for the development and implementation of a modern financial management system, including the necessary support equipment and training. It would facilitate the corporatization and the ultimate privatization of Spetstrans, as appropriate. In addition, the subcomponent would provide direct technical assistance and training related to collection operations, landfill operation and closure, and design of future landfill expansion. Finally, the subcomponent would support periodic beneficiary assessments and preparation and implementation of a public participation and education plan aimed at facilitating public consultations on landfill design and closure, promoting public participation in strategic planning, and raising public awareness of the service improvements. 5

16 1.6 Revised Components The components were not revised. 1.7 Other Significant Changes (in design, scope and scale, implementation arrangements and schedule, and funding allocations) In response to new information, several elements of the original project design were changed during project implementation. First, once the project-financed weighbridge produced more accurate data on how much waste the city actually generated, the hokimiyat, Spetstrans, and international experts agreed that three rather than four transfer stations would be sufficient for handling the city s waste. Moreover, the hokimiyat and Spetstrans were planning for a carbon finance solid waste composting project, which, if approved, would further reduce the need for a fourth station by reducing the amount of waste that would go through the transfer stations. Thus the hokimiyat decided not to build the fourth transfer station. Second, the Zangiota landfill was discovered to be outside of the city s jurisdiction, and therefore could not be closed by the city. Third, a decision was made to involve one, rather than two PIUs, in managing the project because of concerns that decision-making would be unnecessarily complicated with two PIUs. Instead, capacity of the PIU in the solid waste management department of the municipality would be strengthened with EBRD-financed technical assistance to enable it to manage all aspects of the project. All these changes were widely discussed with Bank and country experts, but were not formally approved by Bank management because they did not affect the ability of the project to meet its objectives. The project closing date was extended twice. The first extension to December 31, 2005 was granted to allow completion of procurement of waste collection equipment, construction of two transfer stations and remaining local works, and achievement of key institutional reforms through EBRD-financed technical assistance to the hokimiyat and Spetstrans. The extension was needed due to the one and a half year delay associated with EBRD s financing of its four technical assistance packages. The second extension to June 30, 2006 was granted to complete procurement of equipment (value of US$6.5 million, or 27 percent of the total loan) purchased out of project cost savings. The vehicles and equipment (including 100 five-ton collection trucks and 6,000 waste bins) were needed to improve system efficiency and viability. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design, and Quality at Entry (including whether lessons of earlier operations were taken into account, risks and their mitigation identified, and adequacy of participatory processes, as applicable) Quality at entry was satisfactory. The project is rated satisfactory overall in each of the main areas of quality at entry: relevance, design, government ownership, and appropriateness in relation to implementation capacity. The project was relevant because it addressed a priority of the municipality and fit well within the CAS, particularly its goal of improving public sector efficiency. The project was well designed, covering all aspects of solid waste management from operations (collection, transfer, and disposal) to financial management, to planning for future expansion and adoption of modern approaches, such as 6

17 recycling. The project was designed in close collaboration with the EBRD, which was a parallel financier. Drawing on lessons of experience with solid waste management projects in other countries of the former Soviet Union and in countries with levels of income similar to those of Uzbekistan, the project team (a) identified a consistent counterpart team with the authority to make implementation decisions, (b) created mechanisms for interagency coordination, (c) established an implementation unit early and trained staff in Bank procurement and disbursement procedures, and (d) involved local institutes in designing the project. In addition, a Bank-supported social assessment influenced the design of collection points and the technical specifications of bins (specifically, their height). The social assessment also revealed that people were willing to pay substantially higher tariffs for improved solid waste collection. This finding was decisive in ending an impasse with the hokimiyat, which had thought that raising tariffs to cover costs of services would be politically unacceptable. Such social assessments are considered good practice under OECD good practice guidelines for evaluation. 2 The project appraisal document noted alternative approaches, the trade-offs between them, and the rationale for the final decisions. The project incorporated a monitoring and evaluation (M&E) framework that facilitated project management and supervision. The project logframe, however, contained far too many indicators, many of which were not readily monitorable. To compensate for this deficiency, the project appraisal document included a table of monitoring indicators, with baselines and targets, which, although mainly focused on outputs rather than outcomes, provided a reasonable framework for monitoring project implementation performance. The project was classified appropriately as environmental category B. Government commitment to the project was strong. The President of Uzbekistan personally requested the project when he met with the World Bank vice president in Tashkent in 1996 to discuss the Bank s lending program in the country. The hokimiyat of Tashkent subsequently demonstrated its commitment with its investments in works, including improvements in the access road from the highway to the landfill, improvements to the landfill, construction of nonsecure and secure collection points, establishment of the central facility for vehicle maintenance and repair, and the closing of the Hasanbay landfill. The hokimiyat increased tariffs for services prior to the start of the project as a first step towards Spetstrans financial self-sufficiency. This action signaled borrower commitment and reduced project risk. The design of the project was appropriate in relation to the implementation capacity of the municipality. Designers chose to rely on conventional landfill and transfer station-based technology for waste management a technology with which the Uzbeks were familiar which simplified implementation. In addition, considerable preparation took place prior to project effectiveness. For example, all main bidding documents for goods packages (bins, vehicles, concrete slabs for nonsecure collection points) were drafted by the time of loan negotiations. One weakness in the quality at entry was that IBRD proceeded with loan signing (November 1998) before the EBRD had agreed its project conditionality with the authorities. Ultimately, the EBRD s agreement included four triggers for disbursement of 80 percent of its US$19.2 million loan, which were not coordinated with those of the 2 See OECD Best Practice Guidelines, 1998, at 7

18 IBRD. The EBRD eventually revised the triggers, but not until significant delays in procuring goods and technical assistance had occurred. The project appraisal document realistically appraised the risks the project would face. In particular, it identified as a risk the lack of sustained political will to increase tariffs and enforce payment. The document did, however, underestimate this risk as low to medium. An assessment of the environmental impact of the project identified potential risks and specified measures to mitigate any negative impacts that could arise from the project. A thorough appraisal of procurement and financial management arrangements helped to ensure that resources were used as intended. Dated covenants included in the loan agreement were appropriate, although too numerous and with unrealistic deadlines. The borrower complied with all the covenants, although with some delays. Loan effectiveness conditions executing a subsidiary loan agreement on behalf of the Borrower and the hokimiyat of Tashkent, and executing and delivering EBRD s loan agreement as well as fulfilling all its conditions of effectiveness were appropriate. The inclusion of the cross effectiveness condition related to EBRD s loan agreement ensured that the resources of both loans would be available simultaneously. QAG No QAG at entry. 2.2 Implementation (including any project changes/restructuring, midterm review, project at risk status, and actions taken, as applicable) Implementation was generally satisfactory. All procurement arrangements for the major World Bank-financed investments were ready by the time of project effectiveness, allowing procurement to proceed smoothly. Terms of reference for the technical assistance assignments were also ready. However, EBRD s disbursement conditions led to delays in the procurement of investments (such as trucks needed to bring waste from the transfer stations to the main landfill) needed to ensure that the project met its objectives. To minimize disruptions arising from these delays, all parties agreed to guidelines that were laid out in the Working Document to Guide Joint Efforts in the Implementation and Supervision of the Tashkent Solid Waste Management Project (July 1999). The World Bank also included US$4 million unallocated in the project procurement plan that could be used to cover the cost of the transfer station vehicles in the event EBRD financing would not be available. Notwithstanding the delays associated with the EBRD conditionality, the financial resources and technical assistance it provided to the hokimiyat and Spetstrans proved to be significant in upgrading the city s solid waste management system. A midterm review prepared in September 2001 helped in addressing key issues that were slowing progress towards the project s development objectives. For example, by showing that Spetstrans was not receiving the full revenues being collected through tariffs, it encouraged the government to thoroughly reform the process of financing solid waste services, giving Spetstrans direct responsibility for collecting solid waste tariffs. It also led to adoption of numerous measures for reducing costs and improving the operational efficiency of the solid waste management system. Several beneficiary assessments informed the project team of the extent to which the project was meeting people s expectations for 8

19 improved waste management services, providing important feedback for improving project effectiveness. Implementation arrangements were satisfactory. Although the project team initially planned to involve two PIUs in implementation, the decision to involve only one situated at the hokimiyat proved effective. Estimates of project costs were reasonable, given assumptions about needed system capacity that were based on Soviet norms. The project design was flexible enough to allow the savings from the application of international competitive bidding, and funds that were not needed for transfer stations or other goods and services to be used instead for vehicles and equipment to replace stock that had reached the end of its useful life. An assessment of the environmental impact of the project identified potential risks and specified measures to mitigate any negative impacts that could arise from the project. A thorough appraisal of procurement and financial management arrangements helped to ensure that resources were used as intended. 2.3 Monitoring and Evaluation (M&E) Design, Implementation, and Utilization As discussed in section 6.2, the project documents did not clearly specify a set of key outcome indicators. The project appraisal document did, however, contain a logframe with some outcome indicators that the team did track on a periodic basis. These included: Increased public confidence and reduction in complaints Reversal of trends in ad hoc and illegal dumping Regular adjustment of tariffs according to increases in input cost Operation of effective management and accounting systems. Early during implementation the team added a key outcome indicator to the project s monitoring framework: proportion of the population satisfied with solid waste collection services. The team tracked progress with this indicator through periodic household surveys that were part of comprehensive beneficiary assessments carried out at the midpoint and completion of the project. The project team used information from the beneficiary assessments to justify financing a larger number of 1,100 liter bins than originally planned to serve the larger number of secure collection points built by the city both of which were important improvements in the project design. Many other indicators in the logframe were not readily monitorable and were ignored. The project appraisal document also contained a separate table of monitoring indicators with baseline values and targets, most of which focused on outputs rather than outcomes. The project team reported on progress with these indicators in its semiannual progress reports and in the project supervision reports (later called implementation supervision reports). The team and city authorities used the information to address various implementation issues. For example, noting that the average days of billing for budget organizations increased dramatically in the later years of project implementation, the project team raised the issue with hokimiyat officials to understand the reasons and seek a solution. Although many of the targets are useful, others are not. For example, the targets for tariffs were not presented in real terms nor adjusted for inflation over time, so do not 9

20 provide a useful guide for project implementers. A more useful target would have been the proportion of costs to be covered through tariffs. In addition to semiannual progress reports, a midterm review that drew on information from the M&E system proved instrumental in encouraging policy reforms to improve the operational and financial performance of Spetstrans. The use of the midterm review is described in greater detail in sections 7.2 and Safeguard and Fiduciary Compliance The project complied with all safeguard policies, including fiduciary aspects. An assessment of supervision by the Quality Assurance Group found supervision to be satisfactory overall, with some areas of concern that were being addressed by the time of the midterm review. 2.5 Post-completion Operation/Next Phase (including transition arrangement to post-completion operation of investments financed by present operation, operation & maintenance arrangements, sustaining reforms and institutional capacity, and next phase/follow-up operation, if applicable) Transition arrangements to regular operations have been completed. The staff of the PIU, who are civil servants, have been absorbed into the regular operation of government. Spetstrans will continue operations under the current arrangements. A proposed Community Benefit Carbon Finance Tashkent Solid Waste Composting Project, if approved, is expected to reinforce and build on the achievements of the Tashkent Solid Waste Management Project. The composting project would reduce the amount of emissions of methane gas, which would make Tashkent eligible for carbon finance revenues through the World Bank s carbon finance business. These revenues could be used to expand the composting operation and make further improvements in the city s solid waste management system. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design, and Implementation (to current country and global priorities, and Bank assistance strategy) The project s overall objectives were, and remain, relevant. They reflect the importance the government and the population of Tashkent assign to improving Tashkent s solid waste conditions. At the time the project was conceived and prepared, the country had been independent from the Soviet Union for only six years and the institutions for delivering urban services were undergoing dramatic transformation. Both the government of Uzbekistan and the hokimiyat of Tashkent (city administration) considered improving municipal solid waste management to be a priority to improve the quality of life in the city. More than half of the respondents in a citywide household survey indicated that they were not satisfied with their solid waste services and would be willing to pay considerably more for their collection service if it were improved. 10

21 The project s objectives also were clearly in line with the concerns of the inhabitants of Tashkent. As noted in section 6.1 above, more than half the residents surveyed considered inadequate solid waste collection to be a priority environmental problem, ahead of air pollution, sanitation, and unsafe drinking water. 3 Moreover, the project s objectives also were consistent with the Country Assistance Strategy (CAS) The overall design of the project was appropriate for the country circumstances. The project focused on upgrading basic solid waste collection and disposal technologies that are well established and with which the beneficiary was familiar, rather than introducing expensive high technology approaches. 3.2 Achievement of Project Development Objectives (including brief discussion of causal linkages between outputs and outcomes, with details on outputs in annex 2) The project met its two project development objectives. Tashkent s solid waste management system has been restored to a satisfactory level of service, greatly improving the quality of life in the city. Prior to the project, waste was accumulating in unauthorized piles around Tashkent and the solid waste management system was nearing collapse. An initial social assessment indicated that only 30 percent of households surveyed were satisfied with the waste collection services. A follow-on survey conducted as part of a beneficiary assessment at midterm review revealed that 70 percent were satisfied. At the end of the project, the beneficiary assessment showed that 60 percent of respondents overall were satisfied, while 80 percent of those receiving the highest level of service were satisfied. More than 90 percent of the respondents indicated that they are paying for their collection service. The same percentage also expressed general satisfaction with the accessibility of the collection points for household waste. The technical, financial, and institutional basis for the future operation and development of solid waste services in Tashkent has been improved. The technical basis of Tashkent s solid waste management services has been enhanced through the provision and operation of modern vehicles, bins, and transfer stations and through upgrades in infrastructure and facilities at the city s main landfill. The institutional and financial basis of the system has been thoroughly transformed with the support of the project. Under the Decision of the Tashkent City Hokim 596, on improvement of the solid waste management structure, issued on December 26, 2001, the hokimiyat: Abolished Tashkent s Sanitary Cleaning Board and its ten ordering departments (excluding the ordering department in the Yunusabad district). Spetstrans was made responsible for collecting solid waste tariffs and depositing them into one centralized bank account. Transferred all equipment procured with IBRD and EBRD funding to the Tashkent Territorial Association of Communal Utilities and Spetstrans on the basis of a restructured on-lending agreement. 3 Bernstein, Janis with support from Network of Social Scientists from the Aral Sea Region Uzbekistan: Tashkent Solid Waste Management Project Social Assessment. Unpublished manuscript. June. 11

22 Restructured the financial agreement, with Spetstrans being made responsible only for repaying the loan principal at the fixed currency exchange rate set at the date of equipment transfer, rather than for the entire loan principal and interest at the market exchange rate. The hokimiyat was made responsible for bearing the foreign exchange risk as well as interest and expenses related to the loan. Directed the Sanitary Cleaning Board and raion ordering departments to pay all amounts due to Spetstrans from tariff revenues, together with late penalties and other compensation for payment arrears. Endorsed Spetstrans s adoption of a uniform tariff for industrial, commercial, budget, and communal clients in all districts of Tashkent. Authorized Spetstrans to propose increases in the tariff up to 8 percent per year for solid waste services. The local authorities did, however, retain the right to approve any tariff increases that Spetstrans proposed. These reforms have been instrumental in increasing the reliability, frequency, coverage, and efficiency of solid waste management services in Tashkent. They have also helped to create the basis for placing Spetstrans on a sounder financial footing than previously, helping to ensure their sustainability once the project ends. One concern, however, is the unwillingness of the municipality in recent years to approve proposed tariff increases. The tariff has not been adjusted to reflect inflation since 2003 despite efforts by both the IBRD and EBRD to convince the hokimiyat of the need for an increase (the real value of the tariff eroded from 250 sum at the beginning of 2003 to 169 sum by the end of 2005). This has not yet caused financial difficulties for Spetstrans due to its success in increasing system efficiency and due to the financial relief it has received from the hokimiyat through exemptions of leasing fees and of release of responsibility for payment of principal and interest and other expenses related to the loan. However, the continued delivery of quality services in the future will require either increases in tariffs or other sources of revenue, such as budgetary allocations. The hokimiyat is aware of the challenges and has issued a letter to the IBRD laying out its plans to ensure that Spetstrans is able to mobilize sufficient resources to maintain adequate services in the future. 3.3 Efficiency (Net present value/economic rate of Return, cost effectiveness, e.g., unit rate norms, least cost, and comparisons; and financial rate of return) ECONOMIC ANALYSIS Given project investment costs of US$43.23 million, Spetstrans s actual financial performance since 2000, net transfers from the government for debt service on the loans from IBRD and EBRD, and projections of a 10 percent real increase in revenue in 2007, the project has a net present value of US$1.1 million (assuming a discount rate of 10 percent), and an internal rate of return of 11.4 percent. The company has submitted a request to the hokimiyat for a rate increase to take effect in The key assumptions of the analysis are: (a) the capital costs are incurred between 2000 and 2006; (b) the lifetime of the project is 10 years, starting in 2000; (c) the real annual revenues of the utility rise by 10 percent in 2007 and are constant thereafter; (d) resources to service the IBRD and EBRD project loans come from government transfers rather than from internally generated funds, and (e) total operations and maintenance costs remain constant in real terms between 2006 and More on the analysis appears in annex 4. 12