Document of The World Bank FOR OFFICIAL USE ONLY. Report No IMPLEMENTATION COMPLETION REPORT POLAND ENVIRONMENT MANAGEMENT PROJECT

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT POLAND ENVIRONMENT MANAGEMENT PROJECT Energy, Environment and Transport division Central Europe Department Europe and Central Asia Region (LOAN 3190-POL) May 30, 1997 Report No 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 = Zloty AVERAGE EXCHANGE RATES (April) US$1.00 Zloty 9,500 11,100 13,630 17,000 22, WEIGHTS AND MEASURES Metric System FISCAL YEAR OF BORROWER January 1 - December 31 BITS CAS ECA EU EU Phare GOP ICR IPPC LIU MoEnv National Fund RWMB PIU SAR USAID ABBREVIATIONS AND ACRONYMS Swedish Board for Investment and Technical Support Country Assistance Strategy World Bank's Europe and Central Asia Vice Presidency European Union European Union Assistance Program for Central and Eastern Europe Government of Poland Implementation Completion Report Integrated Pollution Prevention and Control Local Project Implementation Unit Ministry of Environment National Fund for Environment and Water Protection Regional Water Management Board Project Implementation Unit Staff Appraisal Report United States Agency for International Development Vice President Johannes Linn Director (acting) : Hans J. Apitz Division Chief (acting) Henk Busz Task Manager : Helmut Schreiber

3 FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT POLAND ENVIRONMENT MANAGEMENT PROJECT (Loan 3190 POL) CONTENTS Preface Evaluation Report ii Part I. Project Implementation Assessment A. Project Objectives 1 B. Achievement of Project Objectives 2 C. Major Factors Affecting the Project 3 D. Project Sustainability 5 E. Bank Performance 5 F. Borrower Performance 7 G. Assessment of Outcome 8 H. Future Operations 8 I. Key Lessons Learned 10 Part II. Statistical Annexes Appendix: Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8A: Table 8B: Table 9: Table 10: Table 11: Table 12: Summary of Assessments Related Bank Loans/Credits Project Timetable Loan Disbursements: Cumulative Estimated and Actual Key Indicators for Project Implementation Key Indicators for Project Operation Studies Included in Project Project Costs Project Financing Economic Costs and Benefits Status of Legal Convenants Compliance with Operational Manual Statements Bank Resources: Staff Inputs A. Project Implementation Unit Contribution to the ICR B. Letter from Government of Poland, Ministery of Environment on the ICR Map: IBRD 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.

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5 IMPLEMENTATION COMPLETION REPORT POLAND ENVIRONMENT MANAGEMENT PROJECT (Loan 3190 POL) PREFACE This is the Implementation Completion Report (ICR) for the ENVIRONMENT MANAGEMENT PROJECT in Poland, for which loan 3190 POL in the amount of US$18 million was approved in April 1990 and made effective in July The loan was closed on December 31, 1996; December 31, 1994 was the original closing date. It was fully disbursed, and the last disbursement took place in December Cofinancing for the project was provided by the European Union, the United States and Sweden. The ICR was piepared by Mr. Helmut Schreiber], EC2ET, of the Europe and Central Asia Region and reviewed by Mr. Henk Busz, Acting Division Chief and Mr. Franz Kaps, project adviser. The borrower and cofinanciers provided comments that are incorporated in the ICR and included as appendixes to the ICR. Preparation of this ICR took place in March and April It is based on material in the project file. The borrower contributed to preparation of the ICR by preparing its own evaluation, attached as Appendix A, of the project's execution and initial preparation and commenting on the draft ICR. The ICR was drafted by a Bank mission to Poland in March/April 1997 composed of Julia Bucknall, David Hanrahan, Naushad Khan, Stephen Lintner, Piotr Wilczynski and Helmut Schreiber.

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7 IMPLEMENTATION COMPLETION REPORT POLAND ENVIRONMENT MANAGEMENT PROJECT (Loan 3190 POL) EVALUATION SUMMARY Introduction. The objectives of the Environment Management Project (Project) were to provide an umbrella framework for analysis of a selected number of high priority environmental concerns in Poland and to support demonstration of a decentralized approach to environmental management. The Project was designed to provide assistance to Poland, on an accelerated basis, to strengthen its capacity in analysis and design of policy, regulatory, institutional and investment actions to improve environmental quality. It was the first project of this kind in Poland and in the Europe and Central Asia Region (see para. I in the main text.) Project Objectives and Components. The Project addressed key issues at the national level and on operational activities in three officially designated "ecological disaster" areas of Katowice, Krakow and Legnica. It was also intended to serve as a catalyst for effective use of multilateral and bilateral environmental assistance. The Project comprised four components (see para. Iff): Component I - Management Systems and Specialized Support. The Component supported a series of complementary measures to assist the Ministry of Environment (MoEnv) and cooperating parties in the development of new management systems and preparation of model studies. This component was modified during implementation to meet emerging priorities of the MoEnv, in which emphasis was placed on a major review of the structure and functions of the MoEnv and its research institutes; review of its regulatory and enforcement programs; evaluation of the use of economic incentives; assessment of communication and information technology requirements; special studies on management of saline water from coal mines and advisory support for management of mineral and petroleum leasing. * Component 2 - Industrial Efficiency and Environmental Reviews. Through a cooperation agreement with the Ministry of Industry and Trade which served as the implementing agency, the Project supported the introduction of environmental audit techniques in Poland, trained 8 "trainers" and 130 local specialists through practical field based courses, and prepared a series of 22 full and 18 training audits for major industrial and energy facilities in excess of that anticipated. Specialized training at facilities in Denmark, Sweden and the United States was received by 34 Polish specialists. * Component 3 - Air Quality Management. This component established a modem system of air quality monitoring, linked to environmental management programs, for the Katowice and Krakow regions. A network of fully compatible air quality monitoring stations was implemented with 10 stations in Katowice region with Project funding, 2 additional stations in Katowice region with supplemental Polish funding and 6 stations in Krakow region with funding from the United States.

8 Component 4 - Water Resources Management. This component supported demonstration of an integrated approach to water resources management in the Upper Vistula River Basin, and establishment of Regional Water Management Boards (RWMBs) in Katowice and Krakow. Three complete Geographic Information System (GIS) facilities were developed in the RWMBs and in Institute of Meteorology and Water Management in Warsaw. Implementation Experience and Results and Sustainability (see para. 6-12). * Institutional Development. The MoEnv and cooperating parties were successful in strengthening a series of institutions and developing a diverse range of professional skills. The Project enabled a large number of Polish specialists to successfully adapt their knowledge of science and technology to the types of environmental management issues associated with an emerging market economy. * Physical Objectives. The physical objectives of the Project were met and even exceeded. Through the significant cost savings and provision of supplemental funding from the National Fund, EU (Phare) and bilateral donors the project was expanded. * Overall Implementation and Operation. The management units responsible for the Project were fully effective in their implementation activities despite the significant administrative and economic changes which occurred in Poland. * >Costs and Implementation Timetable: While disbursements generally followed the Project Disbursement Plan, the closing date for the Project was extended to December 31, Two extensions were required to allow for implementation of an enhanced program of Project supported activities funded with savings realized through competitive procurement procedures and as a result of supplementary grant resources from EU (Phare) and bilateral donors. The Project stayed within the envisaged cost limits. * Performance of the Bank and the Borrower. The overall performance of the Bank in all stages of the Project was highly satisfactory. Project preparation took place on a compressed cycle with a combined identification and preparation mission in September 1989, followed by an appraisal mission in November Following Board Approval in April 1990, the implementation of Project proceeded smoothly. The overall performance of the Borrower in all stages of the Project was highly satisfactory. Summary of Findings, Future Operations, and Key Lessons Learned. The outcome of the Project is assessed as highly satisfactory since it achieved its major objectives, exceeded its physical objectives and is highly likely to achieve sustainable development results. The Project provided the basis for accelerated demonstration and adoption of new approaches to environmental management in Poland, strengthening of institutions and programs to support their functioning and implementation, and provision of new types of equipment for environmental management at the field level. Future Operations and Recommendations. Follow-up operations, funded domestically, will be undertaken by a number of implementing organizations on a decentralized basis. This will be reflected in the individual work plans of the key organizations based in Katowice, Krakow, Tarnow and Warsaw, which were significantly strengthened under the Project and have the critical human and material resources to undertake their functions provided adequate funding is available for staff salaries, operational activities and equipment operation and maintenance. Key Lessons Learned. iii

9 * The Project benefited significantly from development of a shared vision between the Borrower and the Bank concerning the challenges of integrating environmental issues into the economic transition process. This provided the critical basis for the design and implementation of a Project which focused on "cooperation" rather than "assistance." * The sustained high level commitment by the Borrower and the Bank was critical to the success of the Project. The Borrower, despite several successive Ministers of Environment and changes in local governments, remained strongly committed to the objectives of the Project. Bank management provided adequate resources during all stages of the Project, including supervision, to maintain a core "project team" of experienced Bank staff and highly qualified consultants. * Project preparation was based on a field review process which led to clear identification of institutional and professional priorities; a large number of representatives of these institutions were effectively involved in the process. * A major factor contributing to the sustained quality of the Project during all phases of design and implementation was the careful selection of the primary Borrower and Bank staff and their high level of continuity. * Both\ design and implementation were facilitated by the cooperative development of work plans; including schedules, budgets and procurement plans. Joint preparation of these work plans allowed the Borrower and the Bank to have a clear understanding of the common goals and key actions necessary to achieve successful implementation. * In a technical assistance project, the Bank should expect that intensive support will be required in the early phases of implementation. The successful start-up of the Project involved extensive use of experienced Bank technical and procurement staff. This support proved to be critical in making the transition from the "design phase" to the "implementation phase." * Bank support for technical assistance projects and activities can accelerate the rate at which Borrowers can prepare and implement their environmental management programs and serve as a catalyst for the mobilization of donor resources. * It should be anticipated, given the dynamic conditions in countries in economic transition, that the timely availability of counterpart funds would be a problem even when the Government is highly committed to the Project. * The high level of attention paid to procurement and disbursement issues in the appraisal process and initial phase of the Project, including the training of Borrower staff and preparation of procurement plans, had a significant positive impact on the quality of implementation and resulted in cost savings. * The Project clearly demonstrated that it is possible in the ECA context, when strong professional interest exists and resources are well targeted, to shift the focus of institutions and individuals from applied research to environmental management. * The Project demonstrated that it is possible to compress the cycle for development of technical assistance projects if there is strong Borrower commitment. iv

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11 IMPLEMENTATION COMPLETION REPORT POLAND ENVIRONMENT MANAGEMENT PROJECT (Loan 3190 POL) PART I: PROJECT IMPLEMENTATION ASSESSMENT A. Project Objectives 1. Introduction. The objectives of the Environment Management Project (Project) were to provide an umbrella framework for analysis of a selected number of high priority environmental concerns in Poland and to support demonstration of a decentralized approach to environmental management. The Project was designed to provide assistance to Poland, on an accelerated basis, to strengthen its capacity in analysis and design of policy, regulatory, institutional and investment actions to improve environmental quality. A major focus was development of a large cadre of Polish specialists with knowledge of new approaches to environmental management and experience with new technologies. The Project addressed key issues at the national level and on operational activities in three officially designated "ecological disaster" areas of Katowice, Krakow and Legnica. It was also intended to serve as a catalyst for effective use of multilateral and bilateral environmental assistance. It should be noted that the Project was developed during the very beginning of the economic transition process in Poland and prior to the availability of significant grant support for technical assistance, training and equipment procurement. 2. Linkage to Priorities. The Government of Poland (GOP) gave high priority to addressing environmental issues as a fundamental element of its economic reform process. Thiswas reflected in the Country Assistance Strategy of the Bank and selected actions were addressed through the Project. Strong support for the Project from the GOP and local governments continued during the entire course of implementation. The objectives of the Project proved to be well formulated and reflected the priorities established by Poland for strengthening environmental protection through adoption of new management techniques and use of innovative technologies. The objectives of the Project were realistically established with regard to the ability of cooperating organizations to upgrade their management and technical capacity at national and local levels. 3. Project Demands. The Project was demanding for Poland in that it required development of a new management structure for design and approval of activities; coordination and supervision of their implementation; and allocation of local and international resources. Completely new procedures for procurement of goods and services, based on a competitive and transparent process, were also necessary. Despite these novel challenges, Polish experts were very well prepared to address the scientific and technical aspects of the Project and proved to be highly successful in applying their existing skills to environmental management issues. 4. Project Complexity. Project complexity was considerable both with regard to the range of priority environmental management and technical actions it covered and their locations, which included Warsaw

12 -2 - and three regions. Project risks included the sustained commitment of the GOP to support environmental measures as a priority, and its willingness to adopt policy and institutional changes and innovations. Another risk was Government commitment to provide counterpart funds in a timely manner and to allocate supplemental funding from EU and bilateral grants for Project activities. Project demands were considered to be within the capacity of Polish counterparts and the risks were viewed as acceptable given overall government and public support for environmental improvements. 5. Flexibility in Implementation. The Bank and Borrower maintained an open dialogue throughout Project implementation. This allowed rapid identification and approval of modifications in project scope and design to reflect both rapid changes occurring in Poland and opportunities stemming from donor interest to provide supplemental funding. During implementation changes occurred in the administrative status of the Project Implementation Unit (PIU), adjustments were made in implementation schedules due to periodic problems with availability of local counterpart funds, and the Project was enhanced and expanded through cost savings and grant funds from donors. B. Achievement of Project Objectives 6. Overview. The Project successfully achieved its overall institutional development and physical objectives. This was especially the case with regard to institutional strengthening, human resources development, adoption of innovative environmental management approaches and the use of new technologies. In addition, the Project helped develop, on a demonstration basis, several complementary institutions at the national and regional level with capacity to collect, analyze and disseminate high quality environmental data. Major activities were conducted in Katowice and Krakow, while limited specialized support and training was provided to Legnica. The design of the Project proved to be appropriate for achieving the objectives. The Memorandum of the President did not provide criteria for judging the achievement of the objectives; however, the primary outputs were quantified. The Project did not include measures to address macroeconomic or financial objectives, poverty or other social objectives, or private sector development. As a technical assistance project, it was not subject to calculation of economic or financial rates of return. 7. Project Management and Coordination. The PIU structure, established under the Project and further expanded by the MoEnv and later the National Fund for Environmental Protection (National Fund), provided a mechanism for coordination and oversight of multilateral and bilateral support. The reputation gained by the PIU for effective management and supervision of foreign funds, including efficient procurement and transparent accounting procedures, allowed for a sustained flow of funds to Poland and their effective use for environmental improvements. The PIU was complemented by a set of Local Implementation Units (LIUs) which coordinated activities at the local level and supported the decentralization of planning and management activities. The provision of office equipment, including computer hardware/software, fax machines, photocopiers and phones, etc., contributed to effective staff performance in the PIU and LIUs. During project implementation, the PIU was transferred from MoENV to the National Fund. The Bank accompanied this critical period constructively. 8. Component 1 - Management Systems and Specialized Support. The Component supported a series of complementary measures to assist the MoEnv and cooperating parties in the development of new management systems and preparation of model studies. This component was modified during implementation to meet emerging priorities of the MoEnv, in which emphasis was placed on a major review of the structure and functions of the MoEnv and its research institutes; review of its regulatory and enforcement programs; evaluation of the use of economic incentives; assessment of communication and

13 - 3 - information technology requirements; special studies on management of saline water from coal mines and advisory support for management of mineral and petroleum leasing. Through a cooperation agreement with the Ministry of Health which served as the implementing agency, activities were undertaken to modernize its ability to evaluate environmental health risks and support was provided for preparation of studies identifying areas of high environmental health risk. The component also included preparation of model studies for management of municipal and hazardous waste. With project savings and through bilateral support, the component funded full computerization and installation of a modern telephone system in the MoEnv. Major advisory support and funding was provided by the United States with supplemental support from the Netherlands and World Health Organization. 9. Component 2 - Industrial Efficiency and Environmental Reviews. Through a cooperation agreement with the Ministry of Industry and Trade which served as the implementing agency, the Project supported the introduction of environmental audit techniques in Poland, trained 8"trainers" and 130 local specialists through practical field based courses, and prepared a series of 22 full and 18 training audits for major industrial and energy facilities in excess of that anticipated. Specialized training at facilities in Denmark, Sweden and the United States was received by 34 Polish specialists. While legislation requiring environmental audits has not been approved by the Parliament to date, a number of the recommendations made in the audits are being implemented, personnel trained under the program are using their skills in their current positions and some are working as auditors outside Poland. A review prepared in late 1994 found that US $5.0 million had been invested at that point by participating industries in implementation of recommendations from audits. It is anticipated that this trend has continued with the continued recovery of the Polish economy. This component was complemented by coordinated operational and training activities and industrial audits funded by Norway and the United States. The cooperation between the Ministry of Industry and the MOEnv, which was established during the implementation of this component, has unfortunately not continued after the completion of this component; the Borrower has not been able to maintain this important objective of the project. 10. Component 3 - Air Quality Management. This component established a modern system of air quality monitoring, linked to environmental management programs, for the Katowice and Krakow regions. A network of fully compatible air quality monitoring stations was implemented with 10 stations in Katowice region with Project funding, 2 additional stations in Katowice region with supplemental Polish funding and 6 stations in Krakow region with funding from the United States. A comprehensive inventory of sources of air pollution was prepared, a review of risks conducted, a data bank of pollution measurements established, and operational management plans developed. Significant support was provided to strengthen the institutional and technical capacities of implementing organizations in Katowice and Krakow. Polish experts participated extensively in preparation of design studies and development of models for system operation. An emergency air pollution warning system was introduced in Krakow and public information programs established in Katowice and Krakow. The component included technical support from Italy, the Netherlands and United States, and major investment support from the National Fund and United States. 11. Component 4 - Water Resources Management. This component supported demonstration of an integrated approach to water resources management in the Upper Vistula River Basin, and establishment of Regional Water Management Boards (RWMBs) in Katowice and Krakow. Three complete Geographic Information System (GIS) facilities were developed in the RWMBs and in Institute of Meteorology and Water Management in Warsaw. It also supported modernized environmental laboratories in Katowice and Tarnow and introduced new computer based quality control systems in these laboratories. New techniques for groundwater monitoring were demonstrated on an operational level, and 10 emergency warning stations and a flood forecasting and management system were established. A successful program

14 -4 - was developed for leak detection and control. An in-country training in regional water resources planning and management was conducted for 45 specialists from all of the RWMBs in Poland. International training in selected issues was provided in France, the Netherlands, Germany, Switzerland and United Kingdom for 65 Polish specialists. The component included technical support from France and Sweden, and major investment support from the National Fund, EU (Phare) and Sweden. 12. Procurement and Disbursement Skills. An important achievement of the Project was the successful introduction and general adoption of competitive and transparent procurement procedures which led to substantial cost savings. Polish counterparts successfully learned to prepare technical specifications, terms of reference, tender documents, and contracts, and developed negotiation and contract supervision skills. They also established procedures for preparation of procurement documents and review of proposals by teams of experts from the PIU and cooperating organizations. The disbursement staff of the PIU also received substantial training in disbursement and general accounting. C. Major Factors Affecting the Project 13. Extension of Closing Date. While disbursements generally followed the Project Disbursement Plan, the closing date for the Project was extended to December 31, Two extensions were required to allow for implementation of an enhanced program of Project supported activities funded with savings realized through competitive procurement procedures and as a result of supplementary grant resources from EU (Phare) and bilateral donors. 14. Factors Not Generally Subject to Government Control. Two legal changes had been anticipated during project preparation which continue to be under review by the Polish Parliament: (a) (b) Water Law. While Parliament has requested the MoEnv to prepare and propose amendments to the existing water law, the absence of an updated law limits full adoption of many planned administrative and financial features of the system of RWMBs established by MoEnv in This situation has affected all the RWMBs and influenced availability of direct financing of the RWMBs in Katowice and Krakow developed under the project. Under an amended law, these offices, which are able to perform a wide range of functions, would not be dependent, as they currently are, on multiple sources of funding. It is not clear, if and when the Water Law will pass Parliament. Mandated Audits. The MoEnv has proposed that the new environment law include provisions for routine environmental audits of industrial facilities. If such legislation were enacted, the public and private sector auditors trained and licensed under the Project would be available to fully utilize their skills as originally anticipated by the Government. In the medium-term, implementation of the EU Directive on Integrated Pollution Prevention and Control (IPPC) and expanded interest of accreditation by industries by the International Standards Organization will increase the demand for preparation of industrial audits and result in expanded implementation of their recommendations. 15. Factors Subject to Government ControL The lack of timely availability of counterpart funds from the national and local governments was the main factor in delaying implementation of selected activities under Components 3 and 4. This affected the acquisition of land and construction of buildings for the air and water monitoring stations. The PIU anticipated these changes and effectively made adjustments in schedules for delivery and installation of equipment and training of personnel. The

15 - 5 - problem of local financing was successfully resolved through mobilization of supplemental bilateral resources by the PIU; provision of government contributions by the National Fund; and careful use of significant cost savings realized under the competitive procurement process. An unanticipated problem was a decision by Polish customs authorities in 1992 to impose duties on scientific equipment, which had not previously been the case. This delayed delivery and installation of selected equipment until the MoEnv was able to resolve this issue in its favor. 16. Factors Subject to Implementing Agencies' ControL Implementation of the Project was not adversely affected by any factors under the control of the MoEnv or other cooperating parties. Project implementation was structured to effectively involve representatives of all concerned parties on a regular basis. This was greatly facilitated by the appointment of four full-time component coordinators within the PIU. One innovation in Project implementation was the conduct of coordination meetings on a rotational basis at different locations: While the PIU had overall responsibility for procurement, it systematically involved all cooperating parties in all phases of the procurement process. D. Project Sustainability 17. Overview. It is likely that Project achievements will be sustained by the MoEnv and cooperating parties given their continued commitment, strengthened institutions with improved planning and management skills, and the considerable interest of key professional and technical staff in the continuation of project initiated activities. A strong potential exists for continued financial support from the MoEnv, cooperating agencies, the National Fund and Wojewodship Environment Funds which collectively have significant resources with which to pay staff salaries, meet operation and maintenance costs and to support new activities and investments on a phased basis. It is important to note that the cooperating agencies have already mobilized funds, from traditional and non-traditional sources, to undertake project related activities and to upgrade and enhance monitoring systems and equipment provided under the Project. The Environmental Laboratory in Katowice, which operates under special authority on a semi-commercial basis, and the regional leak detection program have established markets for their services and should be sustainable under current conditions in Poland. E. Bank Performance 18. Introduction. The overall performance of the Bank in all stages of the Project was highly satisfactory. Project preparation took place on a compressed cycle with a combined identification and preparation mission in September 1989, followed by an appraisal mission in November Following Board Approval in April 1990, the implementation of Project proceeded smoothly. 19. Identifcation and Preparation. The Project was developed consistent with the established priorities of the Government of Poland and the Bank. Identification and preparation was undertaken as an element of ajoint Polish-Bank field based review of major environmental issues. The Project was the first of its kind in the ECA Region and represented an innovative approach in addressing environmental issues as an integral part of the economic transformation process. Rather than focus on large scale investments, the joint Polish-Bank review identified the need to strengthen environmental management capacity at the national and local level in priority areas under environmental stress. The Project provided a range of incentives to the participants including development of management and professional skills; access to new technologies; and opportunities for formal and informal training within and outside Poland.

16 Team Development. The identification/preparation process was used to establish an effective interdisciplinary team of Polish and international specialists. The Polish team members were nationally recognized experts with broad experience in their field of expertise who had a deep commitment to achieving successful results. Bank staff and consultants were carefully selected for their professional knowledge, experience in environmental issues, and ability to work effectively with counterpart personnel. The quality of the team, strong interest of all cooperating parties and high level commitment allowed preparation to be successfully completed in a short period of time. 21. AppraisaL The Polish and international team which participated in the identification/preparation mission continued to work together during appraisal and was expanded to include additional specialists in key technical areas and procurement. The use of the same core team permitted more effective use of time, higher quality design of components and faster agreements between the parties. The ability of Polish experts to undertake management, scientific and technical aspects of the Project was confirmed during appraisal. During the period between the identification/preparation and appraisal a senior local consultant provided interface support between Polish authorities and the Bank. 22. Working Papers and Procurement Packages. During appraisal detailed working papers and procurement packages were developed for each component, including descriptions of activities, implementation and procurement plans, cost tables, and an illustrative schedule. These were key tools for the PIU Director, Project Coordinators and their counterparts in the cooperating agencies. The plans were used by the PIU for organization of activities and for tracking implementation progress. Formal training of Borrower personnel in Bank procurement and disbursement processes was also initiated. During the appraisal the Borrower and Bank identified and defined Project needs in goods and services, packaged them in suitable contracts, agreed on appropriate procurement methods and developed detailed procurement plans. These efforts allowed the PIU to start procurement activities immediately after loan effectiveness. 23. Resource Mobilization. The Project was designed to provide adequate funding for a series of complementary demonstration activities that could be expanded if supplemental funds became available from EU (Phare) and bilateral donors. It was agreed during appraisal that the Government would have the option of using EU (Phare) and bilateral grants to fund Bank approved elements of the Project. The appraisal team received support from the Governments of France, Sweden and the United States. In conjunction with the appraisal mission, the Government of Poland and the Bank held consultations concerning the Project with representatives of various donor organizations. 24. Supervision. Bank management recognized that the project would require extensive supervision, especially during the early phases of implementation, and made adequate provision for use of both Bank staff and consultants for this purpose. In particular, special resources were allocated for the start-up phase so that Bank staff and senior level Polish experts could facilitate establishment of an effective management structure and launch the components. Once the Resident Mission was established in Warsaw, regular support was also provided by the specialist assigned to coordinate energy and environmental activities. Furthermore, the PIU allocated funds to retain senior-level project advisors who were Polish expatriates with significant operational experience in Western Europe and North America. These advisors provided an interface between the Polish and OECD countries' experience in management and technical aspects of project implementation. 25. Mid-Term Review. The mid-term review was conducted by a joint PIU and Bank team that included individuals involved in the preparation and appraisal process. The review noted the significant progress achieved in strengthening institutions and implementing technical aspects of the components.

17 -7 - The major issues identified during the mid-term review included: the timely availability of local currency for implementation of.components 3 and 4, which was addressed through provision of supplemental funding from the National Fund and EU (Phare); and the need to develop procedures to allow the MoEnv to legally transfer ownership of the equipment procured under the project to Wojewodship governments, RWMBs, and environmental laboratories. 26. Reporting. The PIU submitted progress reports regularly on implementation progress, procurement and disbursement activities. The highly interactive relationship between the Borrower and Bank staff responsible for the project led to extensive and regular formal and informal communications that assisted in early identification and resolution of potential implementation issues. The ratings provided in Form 590 accurately reflected the implementation status of the project. As the Project proceeded, Bank task managers and other specialists worked closely with PIU staff to adjust the scope of activities in different components, allowing more effective implementation and incorporation of lessons learned. F. Borrower Performance 27. Project Preparation. Overall performance of the Borrower in all stages of the Project was highly satisfactory. The Project has greatly benefited from the sustained strong commitment of the MoEnv, National Fund and the cooperating parties throughout preparation and implementation. The Borrower allocated all necessary resources for Project preparation, and in full collaboration with the Bank, prepared the required documentation on an accelerated basis. The direct leadership of the preparation process by the Minister of Environment with active participation by the Deputy Governors of the concerned regions demonstrated the high level of Borrower commitment. The GOP made available a wide range of highly qualified specialists who worked as members of teams responsible for identification of priorities, development of working documents and preparation of estimated budgets for local expenditures. An innovative and helpful element of the preparation process, in 1989, was the series of review meetings held in key locations, at which representatives of the MoEnv, cooperating parties and the Bank publicly reviewed and discussed the scope and objectives of the Project with administrators, technical experts, local NGOs and the media. 28. Project Implementation. (a) (b) Institutional Development. The MoEnv and cooperating parties were successful in strengthening a series of institutions and developing a diverse range of professional skills. The Project enabled a large number of Polish specialists to successfully adapt their knowledge of science and technology to the types of environmental management issues associated with an emerging market economy. Participating institutions at the national and regional level successfully established modern management systems, adopted new approaches, and effectively used new types of equipment in an operational context. The Borrower successfully used competitive procurement, combined with careful supervision, to achieve cost savings, later used to expand the Project. Significant skills in donor coordination were developed, attracting additional funds to support the Project. Physical Objectives. The physical objectives of the Project were met and exceeded, through the significant cost savings and provision of supplemental funding from the National Fund, EU (Phare) and bilateral donors. All Project supported equipment is installed and operating, with the exception of two warning stations which will be installed

18 -8- (c) (d) following completion of an on-going land acquisition process. Additional equipment, beyond the original plans of the Project, has been procured and placed in operation. Overall Implementation and Operation. The management units responsible for the Project were fully effective in their implementation activities despite the significant administrative and economic changes which occurred in Poland. A major factor in the success of Project implementation was the general continuity of staff in the PIU and key counterparts in implementing organizations. The PIU Director only changed twice during Project implementation and in both cases the incumbent was succeeded by a highly experienced deputy. All three technical components of the Project benefited significantly from having the same PIU coordinator during their entire course of implementation. Similar benefits in procurement and disbursement occurred due to the stability of personnel responsible for them. The cooperative agreements with the Ministry of Health and Ministry of Industry were successful in making these parties effective partners in the Project. LIUs and RWMBs provided effective support for decentralization of the Project. Counterpart Funds. The timely provision of counterpart funds was an issue which emerged at the mid-point of Project implementation, reflecting the complex changes occurring in the Polish economy and the development of new relationships between the national and local governments. To address this problem, the PIU took a series of actions including successful mobilization of funds from the National Fund and EU (Phare), well designed revisions in delivery and installation schedules for equipment, and effective work with local governments concerning the purchase of land required for air and water monitoring stations. G. Assessment of Outcome 29. The outcome of the Project is assessed as highly satisfactory since it achieved its major objectives, exceeded its physical objectives and is highly likely to achieve sustainable development results without major shortcomings. The Project provided the basis for accelerated demonstration and adoption of new approaches to environmental management in Poland, strengthening of institutions to support their implementation, and provision of new types of equipment for environmental management at the field level. The availability of additional funds from cost savings and donor support allowed the Project to exceed its anticipated physical objectives. In addition, the Project successfully introduced the use of competitive bidding procedures and new financial management techniques that were adopted by the participating organizations. H. Future Operations 30. Plan for Future Operation. Future operation of the Project will be undertaken by a number of implementing organizations on a decentralized basis. This will be reflected in the individual work plans of the key organizations based in Katowice, Krakow, Tarnow and Warsaw, which were significantly strengthened under the Project and have the critical human and material resources to undertake their functions provided adequate funding is available for staff salaries, operational activities and equipment operation and maintenance. Given the size of these units and their diverse functions it is not appropriate for individual plans to be developed and reviewed by the Bank.

19 In order to maximize Project benefits, it is recommended that the GOP undertake the following actions: (a) (b) (c) Passage of Proposed Legislation. The Bank recommends that the MoEnv continue to work with Parliament to secure the passage of the amended Water Law, in order to more fully empower the operational and financial authority of the existing national system of RWMBs. Support for Operation and Maintenance. The Bank has asked the MoEnv and cooperating organizations to fund the operation and maintenance of the equipment provided and installed under the Project. The National Fund and Wojewodship Environmental Funds should continue to provide adequate funding of air and water monitoring systems and a portion of the costs of the environmental laboratories. Tarnow Laboratory. The MoEnv should give serious consideration, as previously recommended by the Bank, to authorizing the Tarnow Laboratory to operate under regulations similar to those of the Katowice Laboratory. This would allow it to operate on a semi-commercial basis and diversify its sources of funding. As the first fully accredited environmental laboratory in Poland, the Tarnow Laboratory should expand its service area and provide specialized testing services. 32. Performance Indicators. To date the monitoring and evaluation of the Project has been done by the PIU and later the National Fund. This has focused on implementation of institutional strengthening activities, human resource development programs, and installation and effective use of specialized equipment. In the future a revised set of indicators should be used by the National Fund to assess the sustainability and further development of these investments. The key performance indicators recommended for future monitoring and evaluation activities supported under the Project include: (a) (b) (c) (d) (e) (f) National Fund. Sustained ability of the National Fund, as the successor organization to the PIU, to effectively supervise and support Project assisted environmental management initiatives; Ministry of Environment. Continued effective operation and maintenance of computer, telecommunication and GIS systems, including their upgrading and enhancement; Environmental Departments and RWMBs in Katowice and Krakow. Maintenance of their capacity to plan and undertake environmental management activities, effective use of Project trained personnel and equipment, effective use of scientific and technical knowledge in decision making; Air Monitoring Systems in Katowice and Krakow. Continued effective operation and maintenance of systems, expansion of coverage, enhancement of capacity and use of data in decision making; Water Monitoring and Flood Forecasting Systems in Upper Vistula River Basin. Continued effective operation and maintenance of systems, expansion of coverage, enhancement of capacity and use of data in decision making; and Environmental Laboratories in Katowice and Tarnow. Continued effective operation and maintenance of laboratories, sustained quality control programs, upgrading of their analytical capacities and diversification of their range of clients. 33. Recommended Bank Follow-Up

20 - 10- (a) (b) (c) Monitoring of Project Operation. The Bank has a significant interest in monitoring the continued progress of selected elements of the Project in order to gain "lessons learned" which can be transferred to other countries. It also has an interest in reviewing the operation of the RWMBs following future passage of the amended Water Law given the broad interest in this issue within ECA. It is recommended that Bank staff, in full coordination with the MoEnv and National Fund, conduct field reviews of selected activities in the future, if this is requested by the Government and included in the CAS. Potential Follow-Up Projects. (i) (ii) Poland. Several potential follow-up projects have been identified by the MoEnv and other parties that could be considered for Bank support. These activities could be conducted as a second phase of the Environment Management Project, as small lending operations, if requested by the Government and included in the CAS; or as elements of related projects which are planned for Bank support. Potential follow-up activities could be conducted at the national level, in the Katowice and Krakow regions and in support of RWMBs in the Upper Vistula River Basin or elsewhere with strong linkages to the EU accession process. ECA Region. A major opportunity for potential follow-up is for the Bank and Poland to work together in transferring the experience gained from design and implementation of the Project to other countries in ECA. Project supported institutions have the capacity to provide practical training to personnel from other countries. In addition, the monitoring systems and laboratories supported by the Project provide operational examples of modem environmental management systems developed under representative conditions in the ECA Region. This experience also provides an opportunity to demonstrate decentralized approaches to environmental management in a practical manner. Future OED Evaluation. The demonstration nature of the Project makes future impact evaluation by OED of interest to a number of parties within and outside the Bank. The optimum timing of an evaluation would be in the year 2000 since this would allow for medium-term review of: (a) sustainability of institutional development activities supported by the Project; and (b) assessment of the ability of cooperating parties to effectively utilize, maintain and enhance the analytical and monitoring systems. I. Key Lessons Learned 34. Development of a Shared Vision. The Project benefited significantly from development of a shared vision between the Borrower and the Bank concerning the challenges of integrating environment into the economic transition process. This provided the critical basis for the design and implementation of a Project which focused on "cooperation" rather than "assistance." The shared vision was reinforced by the early development and continued maintenance of good interpersonal relationships and effective communications between key Borrower and Bank personnel. 35. High Level Commitmentfrom the Borrower and Bank. The sustained high level commitment by the Borrower and the Bank was critical to the success of the Project. The Borrower, despite several successive Ministers of Environment and changes in local governments, remained strongly committed to the objectives of the Project. Bank management provided adequate resources during all stages of the Project, including supervision, to maintain a core "project team" of experienced Bank staff and highly

21 qualified consultants. The willingness of the Borrower to establish an autonomous PIU and LIUs allowed for development of dedicated teams who focused their efforts on Project implementation; 36. Clear Identification of Institutional and Professional Interests. Project preparation was based on a field review process which led to clear identification of institutional and professional interests and their effective involvement in the process. An important element was the extensive use of technical review meetings which facilitated the participation of a broad range of representatives from cooperating agencies in the preparation process and reduced potential conflict in the implementation phase. Project preparation included the use of senior local experts who were highly effective in facilitating an on-going dialogue on key issues and resolving outstanding issues. 37. Selection and Continuity of Key Staff A major factor contributing to the sustained quality of the Project during all phases of design and implementation was the careful selection of the primary Borrower and Bank staff and their high level of continuity. The Polish experts who worked on the Project were chosen for their demonstrated capabilities, interest in learning and their commitment. These values were reinforced by incentives including opportunities for professional development, in Poland and abroad. 38. Development of Work Plans. Both design and implementation were facilitated by the cooperative development of work plans; including schedules, budgets and procurement plans. Joint preparation of these work plans allowed the Borrower and the Bank to have a clear understanding of the common goals and key actions necessary to achieve successful implementation. The plans provided a framework for Project management and allowed for clear understanding of the modifications and adjustments made during the course of implementation. 39. Intensive Supportfor Early Project Implementation. In a technical assistance project, the Bank should expect that intensive support will be required in the early phases of implementation. The successful start-up of the Project involved extensive use of experienced Bank technical and procurement staff. This support proved to be critical in making the transition from the "design phase" to the "implementation phase." It also assisted in strengthening the PIU, LIUs and RMWBs through advisory support and informal training. The use of carefully selected expatriate consultants of Polish origin was also very successful in addressing key technical issues. 40. Accelerated and Enhanced Implementation. Bank support for technical assistance projects and activities can accelerate the rate at which Borrowers can prepare and implement their environmental management programs and serve as a catalyst for the mobilization of donor resources. Participation of the Bank can assist in the identification of phased programs of improvements which can be realized within financial constraints and serve to facilitate the adoption of measures for quality control of data developed from monitoring systems and environmental laboratories. 41. Timely Availability of Counterpart Funds. It should be anticipated, given the dynamic conditions in countries in economic transition, that the timely availability of counterpart funds would be a problem even when the Government is highly committed to the Project. Careful monitoring of the availability of such funds allows for adjustments in delivery of major equipment to avoid unnecessary storage, demurrage and potential damage prior to customs clearance and installation. During Project preparation and implementation it is important to regularly review potential sources of supplemental funding which could substitute for local counterpart funds as necessary. 42. Procurement and Disbursement. The high level of attention paid to procurement and disbursement issues in the appraisal process and initial phase of the Project, including the training of

22 - 12- Borrower staff and preparation of procurement plans, had a significant positive impact on the quality of implementation and resulted in cost savings which allowed an expansion of the Project's scope. Participation of cooperating parties in all phases of procurement resulted in greater ownership of Project supported activities. The continuous cooperation between Project and Bank procurement staff allowed for upgrading of Polish skills on an incremental basis and introduction of new techniques. 43. Changes in Taxes and Customs Duties. Many countries in economic transition are experiencing changes in tax codes and the application of customs duties which may affect the implementation of projects by increasing requirements for counterpart funds to meet these costs. Cost estimates for projects should include adequate contingencies in the local budget to cover these potential changes and developments should be monitored as part of the supervision process. 44. From Applied Research to Environmental Management. The Project clearly demonstrated that it is possible in the ECA context, when strong professional interest exists and resources are well targeted, to shift the focus of institutions and individuals from applied research to environmental management. In the case of Poland, the strong existing knowledge of science and technology available at the start of the Project allowed the successful assimilation management skills, new approaches to analysis and the effective use of new equipment. 45. Compression of the Project Cycle. The Project demonstrated that it is possible to compress the cycle for development of technical assistance projects if their is strong Government commitment and the Bank and Borrower are both able to provide highly qualified professional experts who are able to work effectively together. Bank support for this type of Project can accelerate the design and implementation of Borrower programs to achieve long-term objectives and contribute to the quality and level of innovation in such programs.

23 IMPLEMENTATION COMPLETION REPORT POLAND ENVIRONMENT MANAGEMENT PROJECT (Loan 3190 POL) PART II: STATISTICAL ANNEXES Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8A: Table 8B: Table 9: Table 10: Table I 1: Table 12: Summary of Assessments Related Bank Loans/Credits Project Timetable Loan Disbursements: Cumulative Estimated and Actual Key Indicators for Project Implementation Key Indicators for Project Operation Studies Included in Project Project Costs Project Financing Economic Costs and Benefits Status of Legal Convenants Compliance with Operational Manual Statements Bank Resources: Staff Inputs ECA C:\DATA\WB\POL-TA\ICR\1CR07.DOC 97/ :18 AM

24 Table 1: Summary of Assessments A. Achievement of Objectives Substantial Partial Negligible Not applicable Macro Policies El El la Sector policies 0 El 0 Financial objectives E11 E l Institutional development El El E Physical objectives g El1 Poverty reduction l E El Gender issues E El E 0 Other social objectives 0 E 0 Environmental objectives 0 E E E Public sector management 0 El E E Private sector management El 0 El Private sector development E] ElE Other (specify) nee 0 B. Project Sustainability Likely Unlikely Uncertain 0 Ol El C. Bank Performance Highly Satisf. Satisfactory Deficient Not applicable Identification / Preparation / 0 E E E Appraisal Supervision El El D. Borrower Performance Highly Satisf. Satisfactory Deficient Not applicable Preparation 0 E E E Implementation 0 E E o Covenant compliance El Operation 0 El El El E. Assessment of Outcome Highly Satisf. Satisfactory Unsatisfactory Highly Unsatisf. El El El

25 Table 2: Related Bank Loans/Credits Loan/Credit Title Purpose Year of Status Approval L32150 Polish Oil and Gas Energy Development 1990 Implementation Company L33820 District Heating Entity Heat Supply Restucturing 1991 Implementation L33820 District Heating Entity Heat Supply Restucturing 1991 Implementation L33790 District Heating Entity Heat Supply Restucturing 1991 Implementation L33780 District Heating Entity Heat Supply Restucturing 1991 Implementation L34660 Republic of Poland Health 1992 Implementation L36410 Govt. of Poland Forestry Development 1994 Implementation L39090 Republic of Poland Katowice Heat Supply 1995 Implementation L40321 Bielsko-Biala Aqua Bielsko-Biala Water 1996 Implementation SA L40320 Bielsko- Biala Aqua Bielsko- Biala Water 1996 Implementation SA L39590 Polish Power Grid Power Transmission 1996 Implementation

26 Table 3: Project Timetable Steps in Project Cycle Date planned Date actual Identification (Executive Project Summary) 09/ /1989 Appraisal 11/ /1989 Negotiations 03/ /1990 Board Presentation 04/ /1990 Signing 05/ /1990 Effectiveness 07/ /1990 Project completion (IDA credit only) Credit closing * 12/ /1996 * Extension authorized to allow for expenditure of funds from cost savings due to use of competitive procurement procedures

27 Table 4: Loan Disbursements: Cumulative Estimated and Actual (US$ thousands) IBRD Fiscal Year Appraisal Estimate Actual Actual As Percentage (US$ Million) of Estimate 06/90 12/ / / / / / / / / / / / / Notes: 1. Figures may not total due to rounding. 2. Original closing date: December 31, Revised closing date: December 31, 1996

28 Table 5: Key Indicators for Project Implementation / page I Table 5: Key Indicators for Project Implementation Overall Project: Environment Management Project Objectives: Expected Cost: Actual Expenditure: To provide a framework for high priority environmental concerns and to support demonstration of a decentralized approach to environmental management. To strengthen capacity in analysis and design of policy, regulatory, institutional and investment actions to improve environmental quality. US$27.3 mn of which US$18.0 million from World Bank loan. US$24.9 mn of which US$18.0 mn from World Bank Loan; US$2.3 mn from counterpart funds; US$4.7 mn from international grant funding and substantial amounts of in-kind support from international agencies. Component 1: Policy, Management and Program Coordination Component Objective: Expected cost: Actual Expenditure: To improve the Ministry of Environment's ability to perform its duties efficiently and effectively US$3.8 mn of which US$2.6 mn from World Bank loan US$5.0 mn of which US$3.6 mn from World Bank loan; US$0.5 mn from counterpart funds; US$0.9 mn from US TDA grant; US$0.5 mn from US EPA and support in kind from the Government of the Netherlands and the World Health Organisation. Objective and description Outputs Outputs Achieved Impacts Expected Impacts Achieved Expected Activity A: Institutional Development Objective: to improve Improved work (i) Comprehensive review of management Increased efficiency of Expected impacts achieved, although mechanisms management of MoEnv -- program and and organization of the MoEnv and its local and national were different from those originally planned, and through a Policy Advisory budget system; associated research institutes prepared. environmental some of the outcomes were not fully realized. Team to advise on the work MIS operating; This included a technology review and programs; economic program; budget and MIS; monitoring several topical studies. Computer and incentives to reduce (i) Env implemented some of the procedural development of a monitoring strategy telecommunications equipment based environmental recommendations, but not those relating to the strategy, regulations and developed; on recommendations purchased and damage. reorganization the Ministry. Several changes of economic policy. criteria for installed. A monitoring strategy was Minister reduced high-level commitment to project developed independently. Mltrrdcdhg-ee omtett evaluation major organizational changes. The new Early in project developed, equipment improved internal and external implementation, the scope of P (ii) Licencing system for Geological communications. Recommendations of certain the activity was changed to Licence Office developed, staff trained, policy studies implemented or piloted (e.g.

29 Table 5: Key Indicators for Project Implementation / page 2 Objective and description Outputs Outputs Achieved Impacts Expected Impacts Achieved Expected meet the Ministry's changing equipment purchased. 3 model pollution fees revised, emissions trading management priorities. agreement for oil gas and mineral leases piloted). developed and in use (iii) Study on disposal of saline water from mines completed. Promotional seminars given for 89 mines and institutes... (ii) Polish capacity to successfully negotiate major international contracts strengthened, ensuring more favorable lease terms for the govemment. (iii) Perceived impacts on miners' employment makes this issue politically difficult. The National Furd for Environmental Protection is currently supporting implementation of related investments. Activity B: Environmental Health Objective: to improve ability * Quality (i) Cooperative agreement between Better understanding Expected impacts achieved MoEnv is using health to set accurate human health- control program Ministry of Health (MOH) and MoEnv of priorities for data to set priorities and MOH now able to verify and based environmental in operation by developed and implemented. environmental policies update earlier assessments of environmental health priorities -- through end and investments; risks. MoEnv and MOH both have access to reliable improving the quality control improved ability to data that meets international standards. MOH staff system for environmental (ii) Quality control study completed and detect and treat have increased professional capacity and have access monitoring and reporting; h Improved seminarconducted System environmental to specialized analytical tools. analyzing health effects of infrm satin illnesses. areas of areas environmental environsystem of inomtn ilrmbn hazards; and training chronic operain (iii) Study on health impacts of (i) Improved integration of work of MoEnv and mov intran as StrengthEne and disease epidemiologists environmental pollution and training relationship with WH SeO. abroad completed. * Chronic... (ii) Quality control system stimulated MOH d(sease in 1992C initiative to rationalize government laboratory epidemiologists system. based on those labs that are performing trained and well. twinned. (v) Chronic disease epidemiologists trained and twinned. Activity C: Solid and Hazardous Waste

30 Table 5: Key Indicators for Project Implementation / page 3 Objective and description Outputs Outputs Achieved Impacts Expected Impacts Achieved Expected Objective: to develop cost- Least cost (i) Five model studies developed for use in Blueprint for Expected impacts partially achieved Developing a effective strategy for investment planned investment projects: municipal implementing cost- national strategy was not possible or appropriate handling municipal and strategies waste in Warsaw; program for isolating effective systems to given the changing legal situation. Activity did result hazardous solid waste developed for toxic wastes in Lodz; methane recovery manage solid waste in model studies for cost-effective implementation of three cities in Krakow; management of sludges in and reduce chemical hazardous and solid waste projects. In the early stages of (Warsaw, Tychy Katowice steelworks; and water and hazards; rational landimplementation, legal and Leczya) for wastewater management in Zgierz. use planning Parliament is still considering legislation that will authority for waste shifted subsequent delineate formal levels of responsibility for waste, at from national to local replcation (ii) Polish specialists trained in preparing which point a national strategy may become governments. The focus of elsewhere solid waste management studies through appropriate again. the activity thus changed to membership in consultant teams and preparing model studies for participation in seminars. local authority implementation..

31 Table 5: Key Indicators for Project Implementation / page 4 Component 2: Industrial Efficiency and Environment Reviews Component objective: Expected cost: Actual expenditure To reduce harmful emissions from major polluting industries US$3.4 mn of which US$3.0 mn from World Bank loan US$3.0 mn of which US$3.0 mn from World Bank loan; US$0.001 mn from counterpart funds. Component coordinated with complementary programs supported by Norway and the United States Objective and description Outputs Expected Outputs Achieved Impacts Expected Impacts Achieved Activity A: Training in Environmental Reviews Objective: improve local 4 local trainers and (i) Cooperative agreement Increased environmental benefits Expected impacts achieved. Component capacity to design industrial 120 environment established with Ministry of from industrial restructuring supported dissemination of international good restructuring programs that review staff available Industry (MOI), who programs. practice in industrial environmental also improve environmental to industry by mid supervised component management. It encouraged substantial performance -- through implementation. voluntary investment in pollution training in industrial management. It also improved ability and efficiency and environmental (ii) 8 trainers and 124 Polish readiness of MOI to integrate environmental reviews. experts trained issues into their operations and provided reliable information to environmental authorities for environmental policy-making. (iii) 7 seminars for managers of participating industries. Activity B: Environmental Reviews of Highly-Polluting Industries Objective: to assist * Diagnostic reviews * Diagnostic reviews conducted in * Diagnostic reviews replicated in Expected impacts achieved 11 of the 30 economically viable but for 10 industrial 10 plants. other enterprises in the sector. plants that underwent detailed reviews highly-polluting enterprises enterprises available voluntarily implerhented the resulting identify least cost ways to by mid Dtiereiwcodtdinealdrvesldtoeued recommendations. Investments ranged from move into compliance with b2* Detailed reviewsconductedin i ad ater pst l d to d tuc US$18,000 to US$3,700,000. mostly ftnanced environmental standards -- * Detailed reviews of solid wastes resulting from locally. The implementation rate was through conducting model (investment action improved operating practices in substantially higher for the reviews conducted diagnostic and detailed plans) for 12 *Trainees conducted reviews in major polluting industries, by the trainees, as the reviewers were usually

32 Table 5: Key Indicators for Project Implementation / page 5 Objective and description Outputs Expected Outputs Achieved Impacts Expected Impacts Achieved reviews in selected enterprises industrial enterprises an additional 18 plants by April employed by the plant and the level of to serve as a basis for available by mid- 93. * Improved potential for involvement was therefore higher. These subsequent replication intemationalfinancialsupportfor results date from With the improved Polish industry. economic situation at present, additional plants may have implemented the recommendations. Activity C: Training Abroad Objective: to improve About 50 industry * 49 people received 3-4 weeks Industry and government staff Expected impacts achieved The project interaction between industry and government staff training abroad (USA, Denmark, exposed to practices and supported effective dissemination of and government on design and receive training in Sweden). procedures of agencies and international good practice of environmental enforcement of environmental environmental enterprises in other countries thus management in industry. regulations -- through foreign agencies and Promotional publications able to play a more active and training in industrial pollution industrial enterprises pred and pu I for I80 informed role in environmental The project also supported a cadre of trained management and control. in selected foreign participants from industry, banks, policy-making.d and enforcement in P eeie kd ps teiohe li seor n countries by mid- public sector, etc.. usg ther skills in the public sector, in industry and in the growing private environmental consulting sector, according to a follow-up study carried out in 1994.

33 Table 5: Key Indicators for Project Implementation / page 6 Component 3: Air Quality Management Component objective: Expected cost: Actual cost: To reduce impacts on public health from air pollution, initially by supporting the development of a comprehensive air pollution abatement strategy for the Katowice and Krakow region. US$6.4 mn of which US$4.5 mn from Bank loan US$ 3.6 mn of which US$2.9 from Bank loan, US$0.7 mn from counterpart funding and US$ 1 mn from US EPA. In-kind assistance received from the Netherlands, Italy and US EPA Objective and Outputs Expected Outputs Achieved Impacts Expected Impacts Achieved description Activity A: Ambient Air Quality Monitoring System To provide Installation of a 10 station * 16 automatic monitoring stations installed and Real time air quality Expected impacts achieved Project financed information for monitoring network in in operation. 2 additional stations installed and management system the establishment of one of the largest policy-making and Katowice and a (bilaterally- operating with local finance. established, automatic air monitoring systems in Europe, to protect public funded) 6 station monitoring contributing to local which allows effective management of highly health from air network in Krakow by mid-. and national polluted airshed. Specific enforcement pollution -- through enhancementeo models.aenvironmental policy. activities regularly result from information developing a real- now available. Local authorities also use time ambient air monitoring information to change the quality monitoring operation of polluting plants in high pollution system in the periods. The information also contributes to Katowice-Krakow environmental policy-making. region. Hardware and software fully compatible to allow future integration of systems in Katowice and Krakow. Activity B: Point Source Pollution To promote * 4 mobile units and manual * 4 mobile units in operation and 20 teams trained * Improved control Expected Impacts Achieved. Monitoring and reduction of point equipment by mid by end of point sources survey information used for policy-making source air pollution leading to specific and enforcement activities. Monitoring data -- through emission local survey teams By mid-1992,.4 emissions inventories conducted enforcement actions. used for establishing exact levels of pollution

34 Table 5: Key Indicators for Project Implementation / page 7 Objective and Outputs Expected Outputs Achieved Impacts Expected Impacts Achieved description monitoring and trained, 80 emissions for 36 enterprises in Katowice and 26 in Krakow fees, rather than basing fees on calculations. plant-specific inventories and control increased emission control conducted by mid-... *Inrae semissionycontrol evaluations conducted by*mid. Emissions database in place and in use. investment in control Specific (local and foreign) investment in surveys and prevention of pollution prevention and control has been industrial air substantial. pollution, particularly through increased support from the international community. Activity C: Training To increase local * 100 staff trained locally and (i) 20 people trained locally Improved design and Expected Impacts Achieved. capacity for 20 trained abroad by end implementation of air Polish scientific and technical personnel have managing air quality (ii) Smog emergency response system established quality management developed new skills in system design, management in Krakow including public warnings of programs. operation, maintenance and analysis. programs -- through. Equipment and training to extreme smog conditions, and strategy for local and foreign training in air improve capacity for emergency mitigation measures. Similar Increased integration Emergency smog warning system quality management dispersion modeling, regional system under development in Katowice. of health effects in air demonstrated successfully and currently techniques. air modeling and management quality management being replicated in Katowice. techniusdecisions, by end (iii) ystems for permanent public display of real- decisions. time information on ambient pollution Extensive media interest on ambient * Installation and operation of concentrations established in Krakow and concentrations. a management system for Katowice. extreme air quality conditions (smog alerts) by end (iv) Health risk assessment prepared. * Health risk assessment available by end Activity D: Air Pollution Control Strategy To develop a policy Least cost analysis available S02 emission, dispersion and optimization model Increased Expected Impacts partially achieved Local and investment for review by late developed for investments in air quality control, international support and foreign financing for investment in

35 Table 5: Key Indicators for Project Implementation / page 8 Objective and Outputs Expected Outputs Achieved Impacts Expected Impacts Achieved description strategy for regional which enables the introduction of tradeable for investment in air pollution prevention and control has been air pollution control. emission permits. pollution substantial. management. Pilot tradeable permit scheme adopted in Katowice area, with some success, but not adopted nationally. Activity E: Weather Forecasting Additional * Purchase and installation of a weather radar Authorities now have the capacity to conduct equipment procured system, advanced weather forecasting in real time and through savings and ability to integrate the information into air contingency budget. * Purchase of equipment for regional weather pollution management activities, particularly forecasting centers, for smog alerts.

36 Table 5: Key Indicators for Project Implementation / page 9 Component 4. Water Resou-ces Management Component Objective: Expected cost: Actual Expenditure: To improve the quality of surface and ground water, to improve efficiency of investments in water pollution control and in water supply by increasing the regional authorities' capacity to manage water resources. US$ 9.4 mn of which US$5.7 mn from Bank loan US$12.0 mn of which US$8.4 from Bank loan; US$1.9 mn from counterpart funds; US$1.2 mn from EU-Phare; US$ 1.0 mn from the Government of Sweden and in-kind support from the Governments of France and Sweden. Objective and Outputs Expected Outputs Achieved Impacts Expected Impacts Achieved description Activity A: Regional Water Management Boards Increase economically Two offices of a * Offices established and operating in * Increased capability Expected impacts partially achieved RWMBs functioning, but and environmentally water management Katowice and Krakow with defined to manage water taking less of a role than expected. National system of 7 efficient management council for the work programs, and functioning teams resources of a specific RWMBs has been established, although some units have of water resources-- upper Vistula river of qualified scientific, engineering and catchment area developed more rapidly than others. This is largely because through establishment basin by mid 1991 technical staff. efficiently. Parliament has not yet approved MoEnv proposals to transfer of a demonstration to serve as models * integrated river authority for water management to RAWMBs, whose role and Regional Water for the rest of the * Local training on regional water basin approach to responsibilities are thus restricted to basin planning and Management Boards country. resources planning and management water resource management. The voievodships are responsible of (RWMBs). for 45 participants from a117 RWMBs management reinforcement, collection of fees and fines and public in Poland, and foreign training for 35 demonstrated in investment decisions. The debate continues about the extent to participants. Additional foreign course Poland. which RWMBs will become involved in the financial aspects of trained 6 specialists in river basin * Regional water water management. Activity B: Water Monitoring and Leak Detection management. management institutions adopted in other parts of Poland. Project activities exposed a large number of Polish experts from the Upper Vistula River Basin and other areas to intemational best practice. Provide information * Network of 20 (i) Hydrometeorological station * Enhanced capability Expected impacts achieved for making effective monitoring successfully established in to manage quality and water management stations established Krakow, personnel trained in quantity of surface (i) Substantially improved ability to manage stored water to policy -- through by late using equipment. and groundwater. assess flood risks in real time, reduce flood impacts, and to

37 Table 5: Key Indicators for Project Implementation / page 10 Objective and Outputs Expected Outputs Achieved Impacts Expected Impacts Achieved description establishing a network take remedial action if floods do occur -- damage from 10 of water monitoring * 4 sets of (ii) en warning stations to monitor * Reduced risk of year flood experienced in 1996 was greatly reduced stations and equipment for ambient water quality contamination of because of system. developing a water groundwater continuously established and domestic water demand reduction sampling. operating and 12 personnel trained supply. (ii) Water quality monitoring system enables authorities to program. in France in its operation. Eight protect municipal water supplies in the region. * training and additional stations will be * Increased efficiency equipment for constructed using funds from of water supply (iii) Regular, reliable information available on groundwater managing stream savings and contingencies by June facilities and reduced quality for use in policy-making. flow, especially demand for new floods. supply infrastructure. (iv) unicipal authorities and utilities aware of importance of reducing unaccounted for water. Demand for leak * 11 sets of (iii) Four mobile groundwater detection services growing. Problems diagnosed in most equipment for monitoring stations in place by systems and leakage rates reduced in many. monitoring municipal and industrial effluents (iv) Leak measurement equipment and * leak detection training for 12 people installed by and demand 1991 and expanded in Leak reduction program detection team works with in operation by municipal utilities to demonstrate early techniques, on semi-commercial basis. 16 utilities have commissioned specific leak detection studies. Activity C: Environmental Laboratories and GIS Systems Improve information * Upgrading 2 * Laboratory designs prepared, Increased capability to Fxpected impacts achieved. High quality, laboratories in available to policy environmental training provided on laboratory assess causes and operation and undertaking standardized, reliable tests, with makers, plant laboratories by management, equipment obtained, and develop strategies to effective quality control for analytical procedures and data managers, and mid Laboratory Infonrmation Management control water and air management. Equipment is being properly maintained. enforcement offices -- System (LIMS) installed to ensure pollution. Laboratory in Tarnow received ISO 9000 certification and that through establishing * Creating 3 GIS consistency of results. Suppliers in Katowice operating on a semi-commercial basis. environmental centers by late trained staff in operation and laboratories and maintenance of equipment. geographic The Institute of Meteorology and Water Resources in Warsaw infonnation systems. * Establishing an * 3 GIS systems installed and in and both RWMBs effectively using GIS tools for planning.

38 Table 5: Key Indicators for Project Implementation / page 11 Objective and Outputs Expected Outputs Achieved Impacts Expected Impacts Achieved description Activity D: Investment Analysis public awareness operation (Warsaw, Katowice and analysis, decision-support and presentation of studies and data. program Krakow) by early All 3 systems being properly maintained and the Institute of Meteorology has upgraded its system with its own finance. Systems are being used as an integral part of water resources planning and management activities. Support development Least cost analysis Several management plans completed Potential for more Expected impacts partially achieved Technical assessment of a strategy for available by late by RWMBs in Katowice and Krakow. rapid disbursement of achieved. Investment strategy not appropriate without passage efficient investments in 1992 international funds to of amended water law. RWMBs supporting planning and local water pollution control Overall evaluation of investments for control water pollution investment decisions on a sub-basin level in cooperation with -- through a least cost Vistula Basin prepared at pre-feasibility local governments. policy and investment level prepared under Baltic Sea analysis. Environment Programme.

39 Table 5: Key Indicators for Project Implementation / page 11 Objective and Outputs Expected Outputs Achieved Impacts Expected Impacts Achieved description Activity D: Investment Analysis public awareness operation (Warsaw, Katowice and analysis, decision-support and presentation of studies and data. program Krakow) by early All 3 systems being properly maintained and the Institute of Meteorology has upgraded its system with its own finance. Systems are being used as an integral part of water resources planning and management activities. Support development Least cost analysis Several management plans completed Potential for more Expected impacts partially achieved Technical assessment of a strategy for available by late by RWMBs in Katowice and Krakow. rapid disbursement of achieved. Investment strategy not appropriate without passage efficient investments in 1992 international funds to of amended water law. RWMBs supporting planning and local water pollution control Overall evaluation of investments for control water pollution investment decisions on a sub-basin level in cooperation with -- through a least cost Vistula Basin prepared at pre-feasibility local governments. policy and investment level prepared under Baltic Sea analysis. Environment Programme.

40 Table 6: Key Indicators for Project Operation Included in Table 5

41 Table 7: Most Important Studies Included in Project COMPONENT 1: I. Reports on Ministry of Environment Managment Issues Prepared by United States Environmental Protection Agency 2. Report Prepared on Environmental Monitoring by RIVM of the Netherlands 3. Reports Prepared by Ministry of Health on Environmental Health 4. Reports on Geological Leasing 5. Model Contract for Geological Leasing 6. Reports on Saline Water Disposal 7. Feasibility Studies for Hazardous and Solid Waste Management COMPONENT 2: 1. Training Manuals for Courses 2. Diagnostic Audit Reports 3. Detailed Audit Reports 4. Training Audit Reports 5. Power and Coal Co-generation plant "LEG," Krakow Co-generation plant "LUBIN," Lubin (Legnica) Co-generation plant "BEDZIN," Bedzin (Katowice) 6. Coke and Cement Cement works "WIEK," Ogrodzieniec Metal Works "SKAWINA," Krakow Cement Works "PODGRODZIE," Reaciborowice 7. Organic Chemistry Synthetic Works, "KRYWALD-ERG," Knirow, Katowice Tobacco Works, Krakow Household Chemicals Works, "POLLENA, " Jawor (Legnica) 8. Inorganic Chemistry Glass and Ceramics Institute, Krakow Refractory Materials Works, Rogoznik, Katowice

42 Sulphuric Acid Plant, Legnica 9. Non-Ferrous Metals Iron-Casting Department of "SENDZIMIR" Steel Works, Krakow Metallurgical Works, "PRZEMKOW," Legnica Metallurgical Works, "SILESIA," Katowice 10. Manufacturing Leather Works "PROSKOR," Prochowice, Legnica Wire and Rope Works "LINODRUT," Bytom, Katowice Mineral Wool Plant, POLINOWA," Gliwice, Katowice 11. Ministry of Environmental Protection, Natural Resources and Forestry Environmental Audits: List of Specialists Prepared to Carry Out Audits COMPONENT 4: 1. Concept of the Monitoring System of Water Quality Tests and Warning Stations (Biuro Projekt6w Budownictwa Komunalnego in Cracow 2. Study and Design of the Hydrometeorological Monitoring System for Upper Vistula River (IMGW - Cracow) 3. General Concept of Cracow and Katowice RZGW Organization ("HYDROPROJEKT") 4. Technical Specification and Justification of the Investment Task for OBiKS Laboratory Equipment in Tarn6w (OBiKS Tarn6w) 5. Development of the Methodology of Measurements for Leak Diagnostics on Water Networks. 6. Establishment of the Regional Water Management System in Water Basin Arrangement ("HYDROPROJEKT") 7. Technical Specification and Justification for the Implementation of Undertakings Resulting from the Provision of Additional Equipment for OBiKS Laboratory - Katowice (OBiKS - Katowice) 8. The System of Water Quality Monitoring and Warning Stations for Water Intakes and Water Marks for Upper Vistula River Basin (Documentation to be annexed to the location adjudication request) ( 9. Concept of Underground Water Quality Monitoring and Technical Specification of the Equipment for Field Monitoring Services (Biuro Projekt6w Budownictwa Komunalnego in Cracow) 10. Feasibility Study for Underground Water Quality Monitoring for the lb Subregion of Upper Vistula River Basin. (AGH - Cracow). 11. Feasibility Study for Underground Water Quality Monitoring for the lb Subregion of Upper Vistula River Basin. (AGH - Cracow). 12. System/Contour Maps for 6 Warning Stations - Water Quality Monitoring System (Biuro Projekt6w Budownictwa Komunalnego in Cracow)

43 13. Identification of Principal Problems Related to Water Management Within the Operation Area of RZGW-Katowice (CBSiPBW - "Hydroprojekt" - Katowice Division) 14. Opinion on the Study "Concept of Water Quality Management System in the Warning Station and Water Mark Group of the Upper Vistula River Basin (NFGW - Warsaw) 15. Foundations of the Uniform Structure of Data base for RZGW. (Technical University, Cracow). 16. List of Priorities for Undertakings Related to Water Quality Improvement in Upper Vistula River Basin (Technical University, Cracow). 17. Determination of the Condition for Specific Uses of Water Resources of the Upper Vistula River Basin in la and Ib Subregions. (CBSiPBW "Hydroprojekt" - Cracow Division) 18. Identification of the Principal Issues on Water Management in the Upper Vistula River Basin - lb Subregion. (CBSiPBW - Cracow Division). 19. Updating of the Storage Reservoirs Control Instructions (CBSiPBW "Hydroprojekt" - Warsaw) ("HYDROPROJEKT" Sp. z o.o.) 20. The System of Water Quality Monitoring as well as Warning Stations and Water Marks of Water Intakes for the Upper Vistula River Basin. Single Stage Technical Design for 7 Warning Stations.(Biuro Projekt6w Budownictwa Komunalnego, Cracow). 21. The System of Water Quality Monitoring as well as Warning Stations and Water Marks of Water Intakes for the Upper Vistula River Basin. Concept for 7 Warning Stations.(Biuro Projekt6w Budownictwa Komunalnego, Cracow). 22. The Methodology of Establishing the Uniform Water Balances and Long Term Programmes. (CBSiPBW "Hydroprojekt) (since "HYDROPROJEKT" W-wa Sp. z o.o.) 23. Provision of precise definition of the substantial information gathered and processed in for the purpose of data base proposal for the needs of RZGW - Cracow and Katowice in connection with the expected tasks.(hydroprojekt" - W-wa) 24. The System of Water Quality Monitoring as well as Waming Stations and Water Marks of Water Intakes for the Upper Vistula River Basin - Study of the Possible Use of STORK Portable sondes in the Monitoring Stations. (Biuro Projekt6w Budownictwa Komunalnego, Cracow) 25. Privatisation and Water management Financing Problems in the Upper Vistula River Basin. (Technical University, Cracow). 26. Problem of Rural Area Sanitation in the Upper San River Basin - Principles and Lines of Approaches with Particular Regard to the Utilisation of Waste Water Using Biogas Method and Identification of its Energy-Efficiency. (Instytut Budownictwa, Mechanizacji i Elektryfikacji Rolnictwa, Warsaw) 27. Software for RZGW Revenue Planning Related to the Charges for Specific Use of Water. Establishment of Software Inter-connections in the Data Processing System of RZGW.(NFGW, Warsaw) 28. Technical Specification and Task Justification for Portable Water Quality Control Equipment - Polish-English Version. ("MEDEKO" - Przedsiebiorstwo Us 3 ugowe Ochrony (Erodowiska, Katowice). 29. Problems of Flood Control with Particular Regard to the Mining Damage in the RZGW - Katowice Operation Area. (CBSiPBW, Katowice Division).

44 30. Data Bank Documentation for RZGW - Cracow and Katowice. (IMGW, Cracow Division) 31. Principles and Policies of Underground Water Protection in the Upper Vistula River Basin. (Przeds. Us 3. "ALS", Cracow). 32. Documents for Location Adjudication Request for 3 Water Marks. (Biuro Projekt6w Budownictwa Komunalnego, Cracow) :500 Base Maps and Discharge Section Lines for Localities of Siewierz, Wojkowice Koscielne, Majscowa, Ocewiecim-Brozkowice, Strumiefi, Czaniec, Sieniawa. (Biuro Projekt6w Budownictwa Komunalnego, Cracow) 34. 1:500 Base Maps and Discharge Section Lines for Localities of Siewierz, Wojkowice Kocecielne, Majscowa, Oaewiecim-Brozkowice, Strumiefn, Czaniec, Sieniawa (Biuro Projekt6w Budownictwa Komunalnego, Cracow) 35. Water Quality Monitoring System as well as Warning Stations and Water Marks of Water Intakes for the Upper Vistula River Basin - Electrical Power Supply to Warning Stations in Kunkowice and Zarzecze. (Biuro Projekt6w Budownictwa Komunalnego, Cracow) 36. Start-up of the Leak Control and Water Losses Analysis System for Water Networks for Control Point No 1. (Instytut Gospodarki Przestrzennej i Komunalnej, Cracow) 37. Start-up of the Leak Control and Water Losses Analysis System for Water Networks in the Area of Upper Vistula River Basin, and dissemination of results obtained. (Instytut Gospodarki Przestrzennej i Komunalnej, Cracow). 38. Programme for Setting Out Priority Undertakings in the Scope of Water Quality Improvement under Protection Scheme of Upper Vistula River. (Technical University, Instytut Inzynierii i Gospodarki Wodnej, Cracow). 39. Problems of Flood Control with Particular Regard to the Mining Damage in the RZGW - Wroc 3 aw Operation Area within the Katowice Voivodship Boundaries - Methods and Policies of Mining Damage Prevention. ("HYDROPROJEKT" W-wa Sp. z o.o., Pracownia Sosnowiec). 40. Translations ("LANGHELP" - Sp.z o.o.) 41. Translation and Interpretation into English language (5 hours). (LANGHELP" Sp.z o.o.) 42. Translation into English language. (LANGHELP" Sp.z o.o.) 43. Development of 6 Detailed Concepts for Water Intakes. (ODGW, Cracow). 44. Consulting Services for the Data Processing System related assistance. ("POLNISAX" Sp. z o.o., Warsaw) 45. Comments on the 1st Stage of the "Study and Final Design of the Hydrometeorological Monitoring System of the Upper Vistula River. (Ekol. Biuro Konsult. NFOS, Warsaw). 46. Technical Specification and Justification of the Investment Task for "Environment Protection Planning using GIS". (Ekol. Biuro Konsult. NFOS, Warsaw) 47. Preparation of the English version of Tender, Commercial and Technical Documents for Ecological Laboratories in Katowice and Tarn6w and for the Leak Control and Recording Equipment for Water Networks. (Ekol. Biuro Konsult. NFOS, Warsaw). 48. Drawing and finishing work. (CBSiPBW "Hydroprojekt", Cracow Division) 49. Translation of the document "Final Design" into English language. ("LIDEX" Biuro Pumaczefi)

45 50. Installation of Polish Characters in the Printers (ODGW, Gliwice). 51. Preparation of the Tender Documents in English Language for Equipment Purchase ("MEDEKO", Przeds. Us 3 ug. Ochr. CErod., Katowice) 52. Preparation of the Tender Documents in English Language for the Supply of the Apparatus and Equipment Set for Underground Water Quality Monitoring and the Equipment for the Water Intakes Warning Stations In the Upper Vistula River Basin. ("MEDEKO", Przeds. Us 3 ug. Ochr. CErod., Katowice). 53. Implementation of the Electronic Modules of Telemetric Measurement Stations for Hydrometeorological Monitoring System of Upper Vistula River. ("A-STER", Z-d Elektroniki i Automatyki Przemys 3 owej, Cracow). 54. Implementation of the Equipment Elements and Selected Measuring Detectors for the Network of Hydrometeorological Monitoring Stations of Upper Vistula River Basin. (Wytw6rnia Sprzetu Zootechniczn. "ZOOTECHNIKA", Cracow). 55. Implementation of the Accessories of Telemetric Measurement Stations for Hydrometeorological Monitoring System of Upper Vistula River. (Z-d Konstrukcji i Urz'dzefn "STALKON", Cracow). 56. Implementation of 120 pieces of casings for the telepluviograph transmitter of TPL 891 type. (Zd Przetw6rstwa Tworzyw Sztucznych, Krosno). 57. Mobilisation for the implementation of 30 pieces of duplex radio retransmitters for the Hydrometeorological Monitoring System of Upper Vistula River. (Z-d Us 3 ug Elektronicznych "ERDEX", Cracow). 58. Travel costs - training for 12 persons in Germany and France. (LOT). 59. Preparation of the Tender Documents and Technical Specifications in English Language for Instantaneous Water Quality Measurement Equipment. ("PROEKO" Spz o.o., Warsaw) 60. "Preparation of the Technical Description of the Investment Task in English and Polish Languages Related to the Additional Equipment for the Regional Hydro-meteorological System" (IMGW, Cracow). 61. "Technical and Organisational Servicing of two International Open Tenders financed from the World Bank Loan: 62. Integrated Water Management Information System (preparation of the Final Design, purchase of the software and hardware) 63. Purchase of the Weather Radar, computer equipment for Hydrometeorological monitoring and regional forecast centers, accessories for the satellite digital data receiving stations. (Polimex- Cekop). 64. "Co-finanzing of the 3d stage of Underground Water Quality Monitoring in the Upper Vistula River Basin - Regional Monitoring of Underground Water Quality. (AGH, Cracow)

46 Table 8A: Project Costs Item Appraisal estimate Actual Total (US$ million equivalent) (US$ million equivalent) Local Foreign Total Local Foreign Total Costs Costs Costs Costs 1. Policy, Management and Program Coordination 2. Industrial Efficiency and Environment Reviews 3. Air Quality Planning and Management 4. Water Resources Planning and Management Base Cost Physical Contingencies Price Contingencies Total Project Costs Note: Figures may not total due to rounding

47 Table 9: Economic Costs and Benefits No economic analysis of project estimated at appraisal Table 10: Status of Legal Covenants No legal covenants Table 11: Compliance with Operational Manual Statements Statement number and title Describe and comment on lack of compliance No lack of compliance was observed

48 Table 12: Bank Resources: Staff Inputs Stage of project cycle Planned Actual Weeks US$ Weeks US$ Preparation to appraisal Appraisal Negotiations through Board Approval Supervision FY90 N/A 5.3 FY91 N/A FY92 N/A FY93 N/A FY94 N/A FY FY FY Completion Total

49 APPENDIX A: Project Implementation Unit (PIU) Contribution to the ICR' SUMMARY OF EVALUATION REPORT PROJECT IMPLEMENTATION UNIT In April 1990 the Government of the Republic of Poland concluded a loan agreement with the World Bank for the implementation of the "Environmental Management Strategy" Program. The target of the Program was to improve the tools for environmental protection in Poland and to initiate reconstruction of environment management institutions in the direction of solutions positively tested in the market economy. It was assumed that the Program to be introduced with participation of the World Bank experts and include, apart from purchase of equipment, also personnel training, specialist training and exchange of personnel with foreign institutions. The aim of the Program was to implement the new effective environment management systems, existing in the Western countries and its practical development in the Katowice and Krak6w provinces as well as in the upper Vistula Basin. This Program was assuredly geared to introduction of novel concepts into environmental management in system transformation conditions and covered four problem packages, the so-called Components, namely: Component 1 - Institutional strengthening of the environmental policy making sector Component 2 - Environmental/economic review of selected industrial enterprises Component 3 - Air quality management Component 4 - Water resources planning and management Total amount of loan for all the a/m Components was USD ,- along with the Polish commitment to disburse the so-called support fund (a total sum of PLN equivalent of USD 9,000,000) for investment, studies and implementation. The Program implementation period was fixed for but under an additional agreements this period was extended till December 31, 1996 to ensure utilization of all the accumulated reserves and savings generated over the project implementation period. The Program was geared to create a general framework identifying the crucial ecological issues in Poland and facilitating transition to a decentralized environment management system. The Program was to serve as a catalyst supporting environment management and creation of institutional, legal and information basis for immediate remediation measures and long-term investment processes supported by bilateral and multilateral assistance. Investments implemented under this Program in the area of southeastern Poland are model to industrial, water and air protection management which should be replicated in other regions of the country according to financial capacity. Ad COMPONENT ) "INSTITUTIONAL STRENGTHENING OF THE ENVIRONMENTAL POLICYMAKING SECTOR (This chapter has been given to the Bank Mission by the Implementing Agency. It has not been edited by the Mission.)

50 APPENDIX A: Project Implementation Unit (PIU) Contribution to the ICR page 2 The objective of this component was to help to establish an effective environmental management system in Poland. The basic elements of this component included training for the Ministry of Environmental Protection Natural Resources and Forestry (MEPNRF) and regional units staff, purchase of hardware and software packages and foreign consultant assistance. Tasks which required studies (consultant assistance, pre-investment documentation) were funded with the use of a USA Governmental grant. Component I consisted of three sub-components: * Management and Policy, * Environmental Health, * Municipal Solid and Hazardous Wastes. Tasks implemented under this component resulted in establishment of environmental management system at the level of the Ministry of Environmental Protection mainly. Support for the Bureau of Geological Concession at the Ministry geared to efficient system of granting concessions for oil and gas exploration and production. Component was also focused on improvement of monitoring system for data on health impacts of environmental pollution. Model studies on municipal solid waste management and toxic wastes for five cities in Poland were developed. Component I was the most dynamic one and many modifications were made during its implementation. Ad COMPONENT 2 "ENVIRONMENTAL/ECONOMIC ENTERPRISES". REVIEW OF SELECTED INDUSTRIAL Introductio,i of ecological and economic review of enterprises into the environmental management system in Poland as a proven tool effectively applied in market economy countries was the basic objective of Component 2. A proper ecological and economic review should soon become and essential element helpful in the process of privatisation, granting financial assistance by banks and ecological funds for the up-grading, extension and pro-ecological investment projects. It should also provide the most advantageous method for harmonisation production activities with ecological standards. It was agreed that implementation of the component included: * training of a staff of Polish experts on the techniques and organisation of reviews, and * completion of a number of reviews in pre-selected industrial plants. Planned tasks and objectives have been reached: * 124 Polish experts were trained in techniques and organisation of ecological and economic reviews. The list of trainees was presented in a publication entitled: "Ecological Reviews in Industrial Plants" * overall ecological and economic reviews were carried out in 10 industrial plants * detailed ecological and economic reviews were carried out in 12 industrial plants * training participants carried out reviews in 18 industrial plants * training abroad was provided for 46 persons. Implementation of Component 2 was terminated by a promotion seminar focused on presentation of skills and potential of Polish experts trained under this Component. The seminar was attended by invited

51 APPENDIX A: Project Implementation Unit (PIU) Contribution to the ICR page 3 prospective users i.e. those companies and persons who use the reviews in their day-to-day work, namely representatives of industry, banks, insurance companies, Ministries and local authorities. Ad COMPONENT 3,,Air Quality Management (Pilot Project for the Katowice-Krak6w region)" Activities within Component No.3, concerned with air quality management, were targeted at the voivodships of Katowice and Krak6w and, to much lesser extent, the voivodship of Legnica. Initially a proposal for a common air quality management system for the Katowice-Krak6w region was formulated, basing on the assumption that the region constitutes a spatial entity within which pollutant dispersion occurs. Following an in-depth analysis of the existing condition, a decision was made to establish two twin systems which could be coupled quickly and without problems immediately after the legal situation permits such a fusion. With these assumptions made, the scope of the air quality management Component was defined as including the establishment of an Air Quality Management System in the Krakow and Katowice voivodships, basing on existing foreign systems. The Air Quality Management System was to perform two basic functions: * to permit the optimization of long-term investment schemes aimed at air pollution abatement; * to secure effective air quality management in smog situations. Component 3 of the World Bank Project was the first attempt to apply an integrated approach to regional air quality management in Poland. Component 3 resulted in the development of the following: 1. The largest modem automatic air monitoring system in Central and Eastern Europe (the Katowice voivodship), which may be linked with the Krak6w network to form a regional system consisting of 18 automatic monitoring stations. 2. A comprehensive concept of a smog emergency response system, including forecasting and proclaiming states of emergency and a set of countermeasures aimed at operational emission reduction in smog emergency situations. 3. Data bank on emission of air pollutant a tool for effective monitoring and updating emission data through measurements (mobile laboratories with equipment for measurement of pollutant emission). 4. A set of computer programs for optimization of investments in air quality control on voivodship level and enabling the introduction of the transferable emission permit mechanism as a tool for attaining environmental goals at lowest possible cost. This decision support system so far has no equivalent in of the Central and Eastern European countries. Ad COMPONENT 4,,WATERRESOURCESPLANNINGAND the Upper Vistula River Basin) " MANAGEMENT(PilotProjectfor In according to plans to introduce integrated water management system in Poland based at the catchment level, this Component is served as a model for integrated river basin management in the pilot upper Vistula River basin. The Regional Water Management Offices in Krakow and Katowice (i.e. upper

52 APPENDIX A: Project Implementation Unit (PIU) Contribution to the ICR page 4 Vistula River basin) were established which work with the national government and local wojewodships in planning and implementing improved approaches to the management of surface and ground water resources with regard to both quantity and quality. The upper Vistula river basin, which has been chosen to serve as a demonstration for all the other seven river basins, has been divided into two sub-basins on the grounds of varying specificity of economic problems, different levels of infrastructure development and different economic characteristics. The main objectives of this component were to: (a) (b) support the development of an improved water resources planning and management system for the upper Vistula River basin; serve as a demonstration of integrated river basin management in Poland. The project assisted in the improved management of water quantity and quality. It was: (a) (b) (c) review measures in improved water management; review demand reduction to reduce the investment and operational budget for water supply; and assist in the designs of a shared least-cost investment program for reduction of point and non-point source water pollution in the area. Performance of the Component 4 led to initiation of many work targeted in improvement of managing and financing of water management. In the course of the Component 4 the work on the new water low was undertaken. All completed research studies, implemented technical solutions revealed faults of the present development of water resources. The documents worked out as a part of the studies shown the directions for improvements. The complete realization of targets will be possible after creating the legal basis enabling the water resources to be managed in the basin layout. An achievement of the Program was equipping RZGW in Krakow and Katowice and other units as well with the specialized research equipment, which created conditions for cooperation and information exchange and in some cases enabled to widen area of RZGW activity defined by the Ordinance of the Ministry of Environmental Protection, Natural Resources and Forestry (MEPNRF). Execution of the Component 4 met series of difficulties. At first place were the financial problems, since execution coincided with the economic crisis and transformation of economic and political system in Poland. Thus the tasks were implemented when the national budget was suffered to deep deficit. This is why it was necessary to look for alternative source of finance in the form of aim funds (The National Fund of Env. Protection, PHARE etc.) Organizational and legal difficulties resulted from the delayed acceptance of new water low. The gained experiences and obtained results connected with implementation of the Component4 clearly indicate necessity to popularize its Program. In the course of performance of the Component 4 the numerous meetings with representatives of foreign companies and institutions engaged in water management in many countries, including those from the Eastern Europe, were organized in Krak6w and Katowice. At RZGW the special training on procedures and task resulting from implementation of the Component 4 was also held. The visits of the World Bank representatives, last in January and March 1997, emphasized the necessity to conduct such popularization of achieved effects. Component 4 of the Project,,Water Management and Planning" is a consistent, comprehensive project supporting the introduction of a modern water management system in Poland, a system that is based on river basin management.

53 APPENDIX A: Project Implementation Unit (PIU) Contribution to the ICR page 5 The role, importance and effects achieved during the implementation of Component 4 have been recognized by the Minister of Environmental Protection, Natural Resources and Forestry and a special ministerial committee which was to recommend further tasks to be funded by the reserves and economies achieved in the whole World Bank Project indicated to tasks implemented under this very Component 4 as the most valuable and most recommended for continuation. The Minister of Environmental Protection, Natural Resources and Forestry approved that choice of the committee. KEY ASSUMPTIONS AND RISKS RATINGS. Under the agreement, the project was to be implemented in co-operation with the Ministry of Environmental Protection, Natural Resources and Forestry (MEPNRF), Ministry of Health and Social Assistance (MHSA), Ministry of Industry (MI), Ministry of Territorial Planning and Construction and local authorities of Katowice, Krak6w and Legnica. The main responsibility for implementation of all the project components was borne by the MEPNRF, exclusive of that relating to Ecological and Economic Reviews in Industrial Works (i.e. Component 01), which was coordinated by the Ministry of Territorial Planning and Construction. Under Component 04, i.e. Water Management and Planning co-operation included eleven provinces and their activities were coordinated by the Upper Vistula River Basin Board which has two branch offices. For management and project implementation control purposes it was planned to establish a Project Steering Committee headed by the Minister of Environmental Protection, Natural Resources and Forestry with the participation of representatives of the following institutions: MEPNRF, MHSA, MI and MTPC, Voivode Offices in Katowice, Krak6w and Legnica, the Upper Vistula River Basin Board and nongovernmental Polish ecological organizations. An PIU was established with the MEPNRF, i.e. a team for all-project implementation, whereas at regional levels three of the four project "components" were supervised by Local Implementation Teams. For the purpose of the fourth component two Water Management Offices were established besides the Upper Vistula River Basin Board, pending the establishment of Regional Water Management Offices in Krak6w and Katowice. In view of the circumstances described above the institutional and legal settlements for the project were complete and considered in detail. Delay in the establishment of Regional Water Management Offices postponed the implementation of the whole Component 04 of the Project. Moreover, with time and significant changes in the central and regional authorities, involvement of e.g. Voivode Offices in project implementation started to decrease. It should also be noted that the adopted principle on payroll and overhead expense in the Project Implementation Unit and Local Implementation Teams, recovered by the MEPNRF and local govemment budgets respectively, was not a correct principle. During the Project Component 03 implementation under the US Environmental Protection Agency (USEPA) program, initial works were carried out in Krak6w on putting into operation a system of air pollution reduction in smog conditions. In view of the fact that such a smog emergency system is of an innovative nature in Poland and there is no explicit legal basis for its execution, it was decided in 1991 to develop, under a WB program, such a system for Krak6w only and to deem the results a pilot program, to be replicated primarily in the province of Katowice. Such approach was approved and accepted by the World Bank. Other examples, of a slightly different nature but approved by the WB, are presented by solutions under the Component 04 relating to EEC (PHARE - Phase I) grant support for "Implementation of the Hydrometeorological and Underground Water Monitoring Systems" task, totalling ECU and

54 APPENDIX A: Project Implementation Unit (PIU) Contribution to the ICR page 6 non-repayable financial support from the Swedish Government for the implementation of "Development and Putting into Operation the Quality Register for Ecological Laboratories, Adaptation and Putting into Operation the LIMS System Included" task, amounting to SEK; these tasks have been excluded from those initially planned for implementation under the WB loan, thus increasing the project financial reserves allocated to additional tasks (the process itself and the titles of these additional tasks were negotiated separately and achieved WB approval). The majority of Polish institutions, before the Project were not ready to proceed in accordance with international tender procedures. This fact brought numerous difficulties in overriding barriers mainly in the sphere of habits, routines and former everyday practices. Familiarization of these institutions with such international procedures and achievement of a more advanced understanding of these issues was one of the crucial goals and hence achievements of the whole Project. The Project Implementation Unit and Local Implementation Teams have been shifted to other structures - from the MEPNRF to the National Fund for Environmental Protection and Water Management and from Voivode Offices into a new form of Limited Liability Partnerships respectively. In the latter case the Provincial Funds for Environmental Protection and Water Management hold the majority of shares. Transformation of Water Management Offices into Regional Water Management Offices and their introduction into the new organizational structure in Poland is also among the Project achievements. RECOMMENDATIONS from the PIU to the World Bank: Firstly: a better location of the Project Implementation Unit - greater prerogatives, more freedom and independence in operation (though not uncontrolled). Secondly: exertion of greater pressure by the WB on discharge of the following commitments by the Polish party: financial (i.e. the so-called counterpart - the share of the central budget in project associated actions; legislative (assurance on exemption from duties and taxes on devices and equipment imported under the loan), and organizational (improved administrative co-operation at central and regional levels, i.e. the Ministry versus Voivode Offices). FINAL CONCLUSIONS: The World Bank Project objective was to fund technical assistance, training and equipment supporting the implementation of tasks grouped into four Components with particular focus on the most ecologically degraded regions of Poland. The priority objective included assistance in definition of the most essential ecological problems and participation in the process of decentralization of the environment management system in Poland. The project served as a catalyst reinforcing the environmental management and supporting the establishment of institutional, legal and IT basis for the current remediation measures and long-term investment supported by bi- and multi-lateral assistance. Investment projects implemented under this Project in the a/m regions shall become models for industrial plant, water and air protection management and may be successfully reproduced in other parts of the country gradually with increasing funds. Moreover, this approach may be considered as model within the framework of the Polish administrative structure. This structure, promoting local authorities at the cost of