The World Bank Report No: ISR14130 Implementation Status & Results Honduras HN Water and Sanitation Sector Modernization Project (P103881) Public Disclosure Copy Operation Name: HN Water and Sanitation Sector Modernization Project Project Stage: Implementation Seq.No: 16 Status: ARCHIVED Archive Date: 11-Oct-2014 (P103881) Country: Honduras Approval FY: 2007 Product Line: IBRD/IDA Region: LATIN AMERICA AND CARIBBEAN Lending Instrument: Specific Investment Loan Implementing Agency(ies): Key Dates Board Approval Date 21-Jun-2007 Original Closing Date 31-Dec-2013 Planned Mid Term Review Date 31-May-2011 Last Archived ISR Date 06-Mar-2014 Effectiveness Date 22-Feb-2008 Revised Closing Date 31-Dec-2016 Actual Mid Term Review Date 05-May-2011 Project Development Objectives Project Development Objective (from Project Appraisal Document) Revised project development objective: to support the Recipient to improve: (a) the sustainability, efficiency, and reliability of its WSS services in Eligible Municipalities; (b) the performance of its national WSS sector institutions in the exercise of their respective roles in accordance with the WSS Sector Framework Law; and (c) its capacity to respond promptly and effectively to an Eligible Emergency. Has the Project Development Objective been changed since Board Approval of the Project? ● Yes No Component(s) Component Name Component Cost Component 1: Support to medium-size municipalities to create autonomous service providers and 21.20 invest in efficiency, rehabilitation, Component 2: Tegucigalpa Non-Revenue Water Reduction 4.50 Component 3: Institutional strengthening of national and regional sector institutions 7.20 Public Disclosure Copy Component 4: Project management 1.60 Component 5: IRM Contingent Component 0.00 Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Substantial Implementation Status Overview Page 1 of 6 The World Bank Report No: ISR14130 This ISR presents the project situation as of August 31, 2014 and reports on the main activities and project related events occurred from February to August, 2014. During this period, the Bank team has conducted one supervision mission with the objective to support the implementation of the project and follow up the progress of its activities, held from March 10 to 14, 2014, and two technical visits, a first one with the objective to review aspects of environmental safeguards related with deciding on the inclusion of the municipality of Teupasenti as a new beneficiary municipality of the Project held on February 14, 2014, and the second one to support and provide strategic advice to the AMDC for the transfer of the Public Disclosure Copy water supply and sanitation systems of the Tegucigalpa Central District, held from May 19 to 23, 2014. The Project's progress towards the achievement of its Development Objectives and the implementation pace continue to be moderately satisfactory. To date, almost all original Project funds have been disbursed (98.8% of Project funds). Regarding the AF, US$2.5M has been allocated /committed and US$ 1M (9.71% of AF Project funds) has been disbursed. Component 1: The Project continues to strengthen the capacities of the six municipal service providers and the regional water utility (Mancomunidad) to improve service quality and financial viability, and project activities have started in the two selected new municipalities (San Pedro Tutule and Teupasenti), who formalized their participation in the Project through the signing of their respective institutional agreements in July, 2014. During this period, the utilities have continued to implement the recommendations of the Technical Assistance (TA) provider and have initiated some of the investments activities included in the Immediate Action Plans prepared by the TA consortium. Progress towards achieving the Project’s targets regarding service quality and sustainability is slower than expected, and improvements in these areas in the participating municipalities are still limited. Completion of works that will take place over the following months will allow improved service continuity and reduced operating costs thus enabling the attainment of the targets for the project's indicators. In the coming months efforts will focus on the launching of the new TA contract to continue to provide the necessary technical assistance to the service providers, particularly to the two new utilities. Component 2: The NRW contract will end on September 2014. All commercial activities and physical works planned under Phase II of the contract were concluded with the exception of the leak detection and network rehabilitation activity which were carried out only in a limited length of the network due to water distribution operational constraints. At the request of SANAA the scope of the NRW contract was extended to incorporate the provision of a water meter test station. The knowledge transfer activities foreseen under Phase III were also finalized including the opening of SANAA’s regional Customer Service Center. Preliminary results showed significant improvements in service continuity and commercial efficiency in the contract service area. The target set for continuity was only achieved in 93%, while the indicator on revenues/m3 was overachieved. Final results will be evaluated during the next supervision mission, scheduled for the third week of September 2014. A report on the lessons obtained from the performance based contract is being prepared by the Supervision and a video of the pilot experience is being produced by the PIU. Component 3: The preparation and hiring of the first activities for the institutional strengthening of the national WSS sector entities (ERSAPS, CONASA and SANAA) are ongoing. In the context of the benchmarking activities led by ERSAPS, during the last Bank mission held in early March, a nation-wide workshop to promote the reporting to IBNET by the service providers was held with the support from WSP. All the service providers supported by the Project have committed to report their performance indicators to IBNET by 2015. With the assistance of WSP, a final draft of the Financing Policy for the WSS sector was completed by CONASA and it is being build up with the analysis and proposal of alternative financial mechanisms. Regarding SANAA TA Pilot, the institution has identified a list of municipalities where to pilot the provision of TA for the setting-up, training, and strengthening of autonomous municipal service providers. Under the TA for the transfer/decentralization in Tegucigalpa the completion of the last consultancy is ongoing. SANAA and Municipal authorities have prepared a tentative work plan aiming at the completion of the transferring of Tegucigalpa’s WS system to the Municipality, the creation of the municipal provider and the strengthening of SANAA as a technical assistance institution. The final dates, modality and financing of the transfer are being discussed at both political and technical levels, Public Disclosure Copy among the key actors. In the meantime the WS Municipal Committee has been created as one of the first conditions established in the Framework Law to move forward with the transferring of the system. The Project is in satisfactory compliance with safeguard policies. Regarding fiduciary aspects, the Project Procurement performance was upgraded to Satisfactory after the findings and results of the PPR held in May 2014. Locations Country First Administrative Division Location Planned Actual Honduras Departmento de Francisco Morazan Tegucigalpa Page 2 of 6 The World Bank Report No: ISR14130 Results Project Development Objective Indicators Public Disclosure Copy Indicator Name Core Unit of Measure Baseline Current End Target 6 of the WSS utilities reach cost recovery (ratio Number Value 4.00 4.00 7.00 total revenue / total operative cost equal to Date 31-Dec-2006 31-Aug-2014 31-Dec-2016 one). Comments Baseline's date ranges from 2008 to 2009. At least 5 of the WSS utilities increase their Number Value 0.00 0.00 5.00 service continuity rating by one category Date 31-Dec-2009 31-Aug-2014 31-Dec-2016 defined by ERSAP#s performance indicators Comments (note: definition on the Category A, B, C, and D on service continuit At least 50% of the SANAA systems financed Percentage Value 0.00 100.00 50.00 under the Project are transferred to the Date 18-May-2007 31-Aug-2014 31-Dec-2016 municipalities. Comments At least 50% of municipal service providers Percentage Value 0.00 67.00 50.00 (non-SANAA WSS systems that are operated Date 31-Jul-2013 31-Aug-2014 31-Dec-2016 directly by municipalities) supported by the Comments Project are converted into autonomous municipal service providers. CONASA issues the new financial policy of the Text Value No No Yes sector. Date 18-May-2007 31-Aug-2014 31-Dec-2016 Comments A final draft of the Financing Policy for the WSS sector was completed by CONASA and it is being build up with the analysis and proposal of alternative financial mechanisms Public Disclosure Copy Number of other water service providers that Number Value 0.00 9.00 9.00 the project is supporting Date 18-May-2007 31-Aug-2014 31-Dec-2016 Comments Time taken to disburse funds requested by Weeks Value 0.00 0.00 4.00 Government for an eligible emergency Date 31-Jul-2013 31-Aug-2014 31-Dec-2016 Comments Intermediate Results Indicators Page 3 of 6 The World Bank Report No: ISR14130 Indicator Name Core Unit of Measure Baseline Current End Target Number of people in urban areas (covering Number Value 0.00 3786.00 3700.00 semi-urban or small urban areas) provided with Date 18-May-2007 31-Aug-2014 31-Dec-2016 Public Disclosure Copy access to improved sanitation under the Comments project. Piped household water connections that are Number Value 0.00 1907.00 2000.00 benefiting from rehabilitation works undertaken Date 18-May-2007 31-Aug-2014 31-Dec-2016 by the project Comments At least 6 design proposals of autonomous Number Value 0.00 7.00 9.00 service providers approved by ERSAPS. Date 18-May-2007 31-Aug-2014 31-Dec-2016 Comments 5 of the WSS utilities increase by 20% the ratio Number Value 0.00 5.00 6.00 of revenues per volumetric unit of water Date 18-May-2007 31-Aug-2014 31-Dec-2016 produced. Comments People trained to improve hygiene behavior/ Number Value 0.00 710.00 5000.00 sanitation practices under the proj Date 31-Jul-2013 31-Aug-2014 31-Dec-2016 Comments People trained to improve hygiene behavior/ Number Value 0.00 245.00 3000.00 sanitation practices - female Sub Type Date 31-Jul-2013 31-Aug-2014 31-Dec-2016 Breakdown Comments Percentage of grievances redressed Percentage Value 0.00 70.00 75.00 satisfactorily by utilities per year Date 31-Jul-2013 31-Aug-2014 31-Dec-2016 Comments At least 6 of the WSS utilities share indicators Number Value 0.00 0.00 6.00 in the regional benchmarking database of Date 31-Jul-2013 31-Aug-2014 31-Dec-2016 IBNET according to their protocols Comments Urban areas covered by the contract increase Text Value C B Public Disclosure Copy service continuity by one category Date 31-Jul-2013 31-Aug-2014 31-Dec-2016 Comments Percentage increase of collection per cubic Percentage Value 0.00 25.00 20.00 meter of supplied water to the project area. Date 18-May-2007 31-Aug-2014 31-Dec-2016 Comments Page 4 of 6 The World Bank Report No: ISR14130 SANAA has at least one regional unit operating Text Value No No Yes under the new model. Date 18-May-2007 31-Aug-2014 31-Dec-2016 Comments Public Disclosure Copy Indicators regarding utilities' performance are Text Value No Yes Yes published by ERSPAS. Date 18-May-2007 31-Aug-2014 31-Dec-2016 Comments At leat 5 utilities have published their financial Number Value 7.00 9.00 statements in a Website. Date 18-May-2007 31-Aug-2014 31-Dec-2016 Comments Not available. SANAA / Tegucigalpa has complied with legal Text Value No No Yes requirements for transfer to municipality. Date 18-May-2007 31-Aug-2014 31-Dec-2016 Comments Cumulative percentage of disbursement Percentage Value 0.00 98.80 100.00 targeted according to disbursement plan is met. Date 18-May-2007 31-Aug-2014 31-Dec-2016 Comments The project has disbursed 98.8% of the original credit and 9.71% of the Additional Financing IRM established and ready to provide access Number Value 0.00 to financial resources to Honduras in case of Date 31-Aug-2014 an eligible emergency Comments Data on Financial Performance (as of 31-Jul-2014) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P103881 IDA-43350 Effective 21-Jun-2007 16-Nov-2007 22-Feb-2008 31-Dec-2013 31-Dec-2016 Public Disclosure Copy P103881 IDA-52700 Effective 19-Jun-2013 12-Jul-2013 09-Oct-2013 31-Dec-2016 31-Dec-2016 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P103881 IDA-43350 Effective XDR 19.80 19.80 0.00 19.56 0.24 99.00 P103881 IDA-52700 Effective XDR 6.70 6.70 0.00 0.65 6.05 10.00 Disbursement Graph Page 5 of 6 The World Bank Report No: ISR14130 Public Disclosure Copy Key Decisions Regarding Implementation None Restructuring History There has been no restructuring to date. Related Projects P144357-HN AF WSS Modernization Public Disclosure Copy Page 6 of 6