Document of The World Bank Report No: ICR00001287 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-7262 IDA-4001) ON A LOAN AND CREDIT IN THE AMOUNT OF US$ 10 MILLION EQUIVALENT TO GRENADA FOR THE HURRICANE IVAN EMERGENCY RECOVERY PROJECT IN SUPPORT OF THE FOURTH PHASE OF THE ORGANIZATION OF EASTERN CARIBBEAN STATES EMERGENCY RECOVERY AND DISASTER MANAGEMENT PROGRAM December 14, 2009 Urban, Water and Disaster Risk Management Unit Caribbean Country Management Unit Latin America and Caribbean Region CURRENCY EQUIVALENTS (Exchange Rate Effective November 3, 2009) Currency Unit = Eastern Caribbean Dollar (EC) US$ 1.00 = [2.68 EC] FISCAL YEAR January 1 to December 31 ABBREVIATIONS AND ACRONYMS APL Adaptable Program Loan CAS Country Assistance Strategy CDEMA Caribbean Disaster Emergency Management Agency CDERA Caribbean Disaster Emergency Response Agency CDRU Caribbean Disaster Relief Unit CMS Central Medical Stores CMU Country Management Unit DRM Disaster Risk Management ECLAC UN Economic Commission for Latin America and the Caribbean ERDMP Emergency Recovery and Disaster Management Project ERL Emergency Recovery Loan ERP Emergency Recovery Project FMR Financial Monitoring Report HIERP Hurricane Ivan Emergency Recovery Project IBRD International Bank for Reconstruction and Development ICR Implementation Completion Report IDA International Development Association IDF Institutional Development Fund ISR Implementation Status Report LCSUW Latin America and Caribbean Urban and Water cluster M&E Monitoring and Evaluation MOE Ministry of Education MOH Ministry of Health NERO National Emergency Response Organization NADMA National Agency for Disaster Management Assistance OECS Organization of Eastern Caribbean States PAD Project Appraisal Document PAHO Pan American Health Organization PCU Project Coordination Unit PDO Project Development Objective PIU Project Implementation Unit SOE Statement of Expenditures TA Technical Assistance USAID U.S. Agency for International Development Vice President: Pamela Cox Country Director: Yvonne Tsikata Sector Manager: Guang Z. Chen Project Team Leader: Niels Holm-Nielsen ICR Team Leader: Nara C. Meli GRENADA Hurricane Ivan Emergency Recovery Project CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design ............................................... 1 2. Key Factors Affecting Implementation and Outcomes............................................... 4 3. Assessment of Outcomes .......................................................................................... 10 4. Assessment of Risk to Development Outcome......................................................... 16 5. Assessment of Bank and Borrower Performance...................................................... 16 6. Lessons Learned........................................................................................................ 18 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners........... 20 Annex 1. Project Costs and Financing .......................................................................... 21 Annex 2. Outputs by Component.................................................................................. 22 Annex 3. Economic and Financial Analysis ................................................................. 25 Annex 4. Bank Lending and Implementation Support/Supervision Processes............. 27 Annex 5. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 28 Annex 6. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 33 Annex 7. List of Supporting Documents....................................................................... 34 A. Basic Information Grenada Hurricane Ivan Country: Grenada Project Name: Emergency Project IBRD-72620,IDA- Project ID: P092692 L/C/TF Number(s): 40010,TF-55936 ICR Date: 12/15/2009 ICR Type: Core ICR GOVERNMENT OF Lending Instrument: ERL Borrower: GRENADA Original Total USD 10.0M Disbursed Amount: USD 9.8M Commitment: Revised Amount: USD 10.0M Environmental Category: B Implementing Agencies: Project Coordination Unit Cofinanciers and Other External Partners: B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 10/15/2004 Effectiveness: 02/15/2005 02/15/2005 Appraisal: 09/27/2004 Restructuring(s): Approval: 11/17/2004 Mid-term Review: 07/15/2007 07/15/2007 Closing: 06/30/2008 06/30/2009 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Low or Negligible Bank Performance: Satisfactory Borrower Performance: Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Highly Satisfactory Government: Moderately Satisfactory Implementing Quality of Supervision: Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Satisfactory Satisfactory Performance: Performance: i C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry No None at any time (Yes/No): (QEA): Problem Project at any Quality of No None time (Yes/No): Supervision (QSA): DO rating before Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Health 25 25 Other social services 25 25 Primary education 25 25 Secondary education 25 25 Theme Code (as % of total Bank financing) Natural disaster management 100 100 E. Bank Staff Positions At ICR At Approval Vice President: Pamela Cox David de Ferranti Country Director: Alan G. Carroll Caroline D. Anstey Sector Manager: Guang Zhe Chen John Henry Stein Project Team Leader: Niels B. Holm-Nielsen Francis Ghesquiere ICR Team Leader: Nara C. Meli ICR Primary Author: Nara C. Meli F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project aims at supporting the recovery efforts of the Government of Grenada through the financing of critical imports and rehabilitation activities in key social sectors. Financing is provided on an emergency basis to avoid the usual time lag between the end of the relief period and reconstruction. ii Due to the catastrophic losses in the education and health sectors, and their core importance to Grenadian society, the focus of this project will be to rehabilitate infrastructure in these areas. Specific objectives include: (1) Supporting the Government's overall reconstruction program through the financing of critical imports; (2) Restoring school infrastructure to an operational level and ensure a prompt return of children to schools; (3) Supporting the rehabilitation of the healthcare infrastructure to ensure adequate access to quality health services throughout the island. Revised Project Development Objectives (as approved by original approving authority) (a) PDO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Indicator 1 : Disbursement of Quick Disbursing Component Value quantitative or 0% 100% disbursed Qualitative) Date achieved 11/19/2004 06/30/2009 Comments (incl. % achievement) Indicator 2 : School Rehabilitation Program Completed Value 100% restoration quantitative or 0 of secondary Qualitative) school facilities Date achieved 11/19/2004 06/30/2009 Comments (incl. % achievement) Indicator 3 : Health Sector Rehabilitation Program Completed 15% of critical Value 0% of critical health health quantitative or infrastructure restored infrastructure Qualitative) restored Date achieved 11/19/2004 06/30/2009 Comments (incl. % achievement) iii (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Indicator 1 : Total Spent on critical imports Value US$2,000,000 (quantitative US$0 disbursed disbursed or Qualitative) Date achieved 11/19/2004 06/30/2005 Comments (incl. % achievement) Indicator 2 : Number of Schools Rehabilitated Value (quantitative 0 19 or Qualitative) Date achieved 11/19/2004 06/30/2009 Comments (incl. % achievement) Indicator 3 : Number of Health Centers Rehabilitated Value 5 critical facilities (quantitative 0 restored or Qualitative) Date achieved 11/19/2004 06/30/2009 Comments (incl. % achievement) G. Ratings of Project Performance in ISRs Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 12/22/2004 Satisfactory Satisfactory 0.00 2 04/29/2005 Satisfactory Satisfactory 0.03 3 11/11/2005 Satisfactory Satisfactory 3.03 4 01/03/2006 Satisfactory Satisfactory 3.95 5 04/27/2006 Satisfactory Satisfactory 4.88 6 12/12/2006 Satisfactory Satisfactory 5.93 7 06/15/2007 Satisfactory Satisfactory 5.93 8 08/31/2007 Moderately Satisfactory Moderately Satisfactory 7.03 9 03/18/2008 Satisfactory Satisfactory 9.83 10 10/16/2008 Satisfactory Satisfactory 9.83 iv 11 04/06/2009 Satisfactory Satisfactory 9.83 H. Restructuring (if any) Not Applicable I. Disbursement Profile v 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal Background 1. Grenada is a 133-square-mile island (including the islands of Carriacou and Petit Martinique) with a population of about 100,000 situated at the southern end of the Windward Islands chain. Located in the southern margin of the hurricane belt, between the Atlantic Ocean and the Caribbean Sea, Grenada is vulnerable to a variety of natural hazards, particularly hurricanes, flooding, and occasionally, volcanic and seismic activity. 2. On September 7, 2004, the eye-wall of Hurricane Ivan, a category 3 storm (as rated on the Safford-Simpson scale), passed over Grenada, bringing sustained winds of 120 mph, with gusts in excess of 135 mph. The hurricane affected the entire island, particularly the southern portion ­ including the capital, St. Georges ­ and more than 80 percent of building structures were affected. Wind damage was the most severe, amounting to an estimated US$ 900 million in losses1, more than twice the country's GDP. 3. Public infrastructure, in particular school buildings and health facilities suffered major losses. Seventy three out of the island's 75 primary and secondary schools 1 Post-Disaster Damage Assessment, UN-ECLAC/OECS, 2004. 1 sustained significant damage. The largest hospital (St. Georges', 240 beds) was affected but remained functional, while Princess Alice Hospital (the island's second largest, 60 beds) was more than 70 percent destroyed. Other affected sectors included power, with an estimated 80 percent loss of the distribution grid; tourism, with close to 70 percent of its infrastructure rendered uninhabitable; and agriculture, where nutmeg crop, the island's principal agricultural export, was destroyed. Other crops such as banana and plantain were also damaged by the storm. 4. The national capacity was overwhelmed: Government ceased to function, with most Government buildings damaged or destroyed, and civil servants suffering serious personal losses as well. The communications system (phone and internet) was down for three weeks; radio and television systems were off the air and the population relied on stations broadcasting from other islands for information. 5. The Caribbean Disaster Relief Unit (CDRU) was mobilized and provided post disaster management services (security, relief management, other basic services) for over three months. The National Emergency Relief Organization (NERO) had not yet moved into the recently completed Emergency Operation Center, and the communications equipment purchased under the Emergency Recovery and Disaster Management Project (ERDMP), the ongoing disaster risk management program supported by the Bank in the country, was not yet ready. The extensive damage and the lack of immediate liquidity available for recovery needs led the Government of Grenada to request the assistance of the Caribbean Disaster Emergency Response Agency (CDERA). CDERA provided logistical support for emergency assistance (for receipt and dispatching of relief supplies) through the CDRU. The Caribbean Development Bank post-disaster relief facility was also triggered, providing US$1.5 million for immediate clean-up operations. Rationale for Bank Assistance Country Level 6. At the request of Grenada's Ministry of Finance, the World Bank was involved in the early stages of the recovery. A Bank team was on the first commercial flight to the country, less than a week after the hurricane. The team prepared a rapid needs assessment (including aerial surveys and interviews) covering the affected sectors in the country to help establish priority reconstruction activities. This assessment was soon followed by a comprehensive Organization of Eastern Caribbean States (OECS)-United Nations Economic Commission for Latin America and the Caribbean (UN-ECLAC) joint damage and loss assessment. 7. The Bank's leading role in the needs assessment and its immediate presence in the aftermath of the Hurricane made the Government rely on the Bank for assistance with the preparation of an overall reconstruction plan. Between September and November 2004, the Bank team provided significant support to the Government's efforts by requesting funding from the donor community and organizing recovery efforts. 2 8. In October 2004, during the IMF/World Bank's Annual Meetings, the Government, with the assistance of the Bank team, organized a donors meeting to present the findings of the OECS-ECLAC damage and loss assessment. The objective was to raise awareness in the donor community on the severity of the emergency, and appeal for additional funding for the reconstruction phase. 9. One year after the Hurricane, the Bank assessed the reconstruction and economic recovery in Grenada, detailing the impacts of the Hurricane in the sectors, the recovery efforts, the macroeconomic situation, and the role of donors in the reconstruction. The assessment reported substantial reconstruction to date (October 2005) due to the large- scale efforts from the international and local communities. Project Level 10. The Hurricane Ivan Emergency Recovery Project (HIERP) was principally designed to respond to the recovery and reconstruction needs in the Health and Education sectors, as identified in the post-disaster assessment, and requested by the Government. The project was designed, prepared and approved by the Bank's Board in a record eight weeks' time. 11. The HIERP received initial funding in the amount of US$ 10 million, and was implemented in parallel with phase two of the Emergency Recovery and Disaster Management Project (ERDMP), a four-phase Adaptable Program Loan (APL). The objective of APL 2 was "to strengthen Grenada's resilience, preparedness and response to natural disasters"2 and aimed to "support disaster mitigation and institutional strengthening activities in Grenada."3 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) 12. The objective of the project was to support the recovery/reconstruction efforts of the Government of Grenada through (a) the financing of fuel necessary for power generation, (b) the rehabilitation of public schools to allow children to return to class as soon as possible (and limit the long-term impact on education), and (c) the rehabilitation of critical public health facilities in order to provide access to essential health care facilities throughout the island. 13. Key Outcome Indicators as specified in the Technical Annex4 are: (i) Successful import of low-sulfur diesel fuel for energy production and transportation, as well as other critical goods such as construction materials and equipment needed for the overall reconstruction effort5; (ii) Number of students who have returned to school, on a quarterly basis; and (iii) Number of hospital beds that have been rehabilitated to an operational level, on a quarterly basis. 2 ERDMP ICR, p.3. 3 ERDMP ICR, p.2. 4 The indicators listed as `outcome indicators' in the Technical Annex are actually output indicators. 5 Only low-sulfur diesel was financed, because it was most urgently needed. 3 14. Intermediate Outcome Indicators (same as original ISR indicators) as defined in the Technical Annex were: (i) Total spent on critical imports; (ii) Number of schools rehabilitated; and (iii) Number of health centers rehabilitated. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and Reasons/Justification 15. The PDO was not revised. 1.4 Main Beneficiaries 16. The main beneficiary of the project was the population affected by Hurricane Ivan in the education and health sectors: mostly primary and secondary students (1,566 primary school students, and 3,916 secondary school students, over the five-year lifetime of the project) followed by faculty (94 teachers at the primary school level, and 245 at secondary school level), 666 health practitioners as well as the population of patients. 1.5 Original Components (As Approved) 17. The four main components were: (i) Financing of critical imports, such as of low sulfur diesel necessary for electricity (US$ 2.0 million); (ii) Assistance to the recovery of the education sector, through the rehabilitation and reconstruction of schools (US$ 5.0 million); (iii) Assistance to the recovery of the health sector, through the restoration of the island's general hospital (St. Georges'), and regional health facilities (US$ 2.5 million); (iv) Support to project management and supervision (US$ 0.2 million). 1.6 Revised Components 18. Project components were not restructured. 1.7 Other significant changes 19. The project's closing date was extended by one year at the request of the Government to ensure the completion of works. This was due to the addition of the EU grant (a total of about US$ 13.4 million), which increased the number of schools to be rehabilitated under the project, and therefore the amount of works to be carried out (See Section 2.1). 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry 4 20. Reallocation Exercise: As the needs of the education and health sectors were determined, the Bank moved quickly to start a fast and efficient provision of funds, by reviewing its existing portfolio in Grenada with the aim to reallocate funds from on-going projects to emergency recovery. 21. Three ongoing Bank projects were tapped: · Emergency Recovery and Disaster Management Project (ERDMP) (P069922), US$ 10.7 million Bank-financed. US$ 450,000 was reallocated to finance sulfur diesel. · OECS/ Grenada Education Development Project (P077759), US$ 25.05 million total, US$ 23.7 million Bank-financed. US$ 5 million was reallocated for school reconstruction. · HIV/AIDS Prevention and Control Project (P076715), US$ 14.04 million total, US$ 12.96 million Bank-financed. The Project was restructured to allow for US$ 1.3 million to be dedicated to the rehabilitation of healthcare infrastructure. The initial reallocation exercise explains why the HIERP did not begin disbursing until the fall of 2005, nine months after its approval. 6 Table 1: Bank Funds Allocated to the Recovery Program HIERP Project Reallocation of Funds from on- Hurricane Ivan Components going Bank projects* Emergency Project Critical Imports US$ 450,000 from Emergency US$ 2.0 million Recovery Disaster Management project (ERDMP) Education US$ 5.0 million from OECS US$ 5.3 million Rehabilitation Education project Health US$ 1.3 million from HIV/AIDS US$ 2.5 million Rehabilitation project *In addition, approximately US$ 2.95 under the on-going ERDMP was already allocated for the rehabilitation of schools and shelters, and to further strengthen the disaster management capacity of the country. 22. HIERP Design: Project design and preparation were based on the Bank and ECLAC's damage and loss assessments conducted after Hurricane Ivan. While funds were being reallocated and disbursed quickly, the Bank team began preparing the Hurricane Ivan Emergency Recovery Project to secure additional funding to continue recovery and reconstruction activities. HIERP was designed and initially implemented as an emergency operation, focusing on recovery needs in the priority sectors, using the Bank's streamlined OP/BP 8.5 procedures, and measuring progress with output-focused indicators.7 The project was approved in mid-November 2004, and became effective on February 15, 2005. 6 From HIERP's Technical Annex, p. 14. 7 OP/BP 8.5 did not allow the establishment of an Emergency Recovery Loan additional financing. This procedure is now possible under OP/BP 8.0. 5 23. Although HIERP was an Emergency Recovery Loan (ERL), its design included aspects of long term development; the project did not simply finance the reconstruction of damaged infrastructure, it invested in permanent reconstruction, integrating hurricane resistant standards in the designs. The Bank was already involved in building hurricane resistant infrastructure in the Caribbean, and in Grenada specifically (the two schools that resisted Hurricane Ivan were financed under the OECS/Grenada Education Development Project), so the Bank team was highly experienced in integrating mitigation measures in rehabilitation projects. The project thus had a long-term view, and directly contributed to the reduction of the vulnerability of Grenada's public infrastructure to future disasters, an objective that was also supported by the ERDMP. 24. In September 2005, seven months after effectiveness, the Government of Grenada received a grant of Euros 8.14 million from the European Union (TF055936), which had manifested interest in providing financing to assist with school reconstruction and rehabilitation. It was agreed to tie the EU money to the HIERP, since the development objective of the grant ("assist Grenada (the Recipient) in carrying out critical rehabilitation and reconstruction activities in the education sector as part of the Recipient's post-Hurricane Ivan recovery efforts"8) was similar to that of the education component of the Bank project. This influx of funds enabled the Bank to increase the number of schools targeted under the project, through co-financing. Another tranche of 1.68 million Euros was later added, for a total grant of Euros 9.8 million, (about US$ 13.4 million). 2.2 Implementation 25. Four main factors affected project implementation: (i) Delays in school identification and selection by the Ministry of Education (MOE). The MOE was responsible for the selection of the schools to be included in the project. As this was a process of consultation and prioritization with various political stakeholders, the list went through several iterations before reaching its final version, in December 2005. (ii) The completion of the final designs for rehabilitation from the MOE's consultant took 6 months longer than expected, as the consultant continued to produce new school designs in response to requests and changes in Ministry priorities while also producing reconstruction designs under the originally contracted production schedule. The delays in decision-making negatively affected the work of the consultant. (iii) Lengthy standard processing times with Tender Board. Grenada has a Tender Board, which reviews all contracts with the Government. Once the Tender Board finalizes its review, recommendations are passed to the Cabinet for final review. This process, at times, took months for final contract approval, which caused delays, particularly at the beginning of the project. 8 Administrative Agreement between the EU and the World Bank, November 17, 2005. 6 (iv) Low availability of materials. The early construction phase of the project coincided with a serious scarcity of building materials and components. The OECS was hosting the ICC Cricket World Cup in the spring of 2007, so construction activity for new stadiums and tourism infrastructure increased between 2005 and 2006. This led to regional shortages of building materials (particularly cement), in the region, as countries prepared for the event. These delays contributed to the project's closing date being pushed back to June 30, 9 2009, a year after the original date. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization Design: 26. Emergency projects mostly focus on reconstruction and rehabilitation, thus their main results tend to be outputs. Project objectives were realistic and relevant at the time of design, but only one out of the three indicators (critical imports10) was monitored consistently during implementation. Given the important project focus on the education sector, the inclusion of additional indicators to measure the changes the project brought in this area would have provided a more comprehensive perspective. 27. Project indicators were slightly modified by the 9th ISR (in March 2008), to percentage-based measurements: 1) total percentage disbursed on critical imports, 2) critical health infrastructure restored (0 percent baseline, and 15 percent as the target), and 3) restoration of secondary school facilities (0 percent baseline, 100 percent as the target). 28. The Technical Annex does not specify baseline or target values for the indicators. These values are present in the data sheet, however, PDO indicators and intermediate indicators are essentially the same (the first set measures success in terms of percentage, the second set in terms of numbers and amount disbursed). 29. PDO indicators as stated in the Technical Annex (see footnote 10 below) are different from the indicators specified in the Data Sheet (see paragraph 27). From the outset, the choice of indicators for the education and health components was inappropriate, which became apparent during implementation. For the education sector, the government used temporary facilities while the Bank financed permanent reconstruction, so the children were back in school en masse, which would have meant 100% achievement for the objective before any resources were spent on the component. For the health sector, the number of beds was quickly restored, which would have also 9 The EU grant will disburse until December 31, 2009. 10 From HIERP Technical Annex: (i) the successful importation of low-sulfur diesel fuel for energy production and transport, as well as other critical goods such as construction materials and equipment needed for the overall reconstruction effort; (ii) the number of students who have returned to school, on a quarterly basis; and (iii) the number of hospital beds that have been rehabilitated to an operational level, on a quarterly basis. 7 meant 100% achievement immediately, while the rehabilitation effort concerned the health facility, which took longer to rebuild. This shows the wrong focus of the indicators, which do not measure progress in project implementation. The team thus monitored progress on the works, and changes in the indicators were not formally made until March 2008. Implementation and Utilization: 30. The Midterm Review (July 2007) does not discuss the second and third indicators (see footnote 10), but only progress on the schools and health facilities reconstruction. In other words, the units of measurement of the indicators (schools, hospitals) were changed from the original design (children, beds). Only the first indicator, the financing of diesel fuel, is reported as per the Technical Annex. 31. Monitoring was done through active supervision, as well as progress reports that were produced by the PCU and sent to the Bank quarterly, including (i) a brief description of the project's objective and components; (ii) an explanation of progress on performance (project) indicators; (iii) an explanation of commitments versus disbursements; and (iv) an action matrix. The PCU and project team based their decisions and actions on these progress reports. Retroactive Outcome Indicators 32. The project indicators that were designed during project preparation did not capture the results achieved comprehensively. To help show the project's achievements, the ICR team included two outcome indicators, in an effort to measure the qualitative changes brought on by the project. The indicators take into account the information available from the PCU and NADMA and measure change that is directly attributable to the project. (i) Increase in the number of public schools in Grenada with hurricane resistant standards vs. total number of schools in the country, before the project began (2004) and now (2009). This indicator shows the direct contribution of the project to the number of hurricane resistant public schools on the island. (ii) Number of hurricane resistant health facilities in 2004 vs. 2009. This indicator measures the infrastructure quality of the health facilities in terms of their resistance to hurricanes ­ before and after the project. 2.4 Safeguard and Fiduciary Compliance Financial Management: 33. The Financial Management was well handled by the PCU, which sent quarterly reports to the Bank. When the EU grant was processed, the PCU used the same report format on both accounts. The FM specialists in the PCU demonstrated high capacity, and there were no issues during implementation. Procurement: 34. The project was processed under OP/BP 8.5, on Emergency Recovery Assistance. The team was proactive in streamlining the Bank's internal procurement procedures, 8 leading to most contracts being initially awarded through Shopping and Direct Contracting, instead of the International Competitive Bidding (ICB) or National Competitive Bidding (NCB). Shopping is generally reserved for procuring "readily available off-the-shelf goods, or standard specification commodities or small value."11 It is also considered a rapid procurement method - faster than ICB or NCB ­ and can be used under OP/BP 8.5 and now OP/BP 8.012 as an emergency procedure to deliver urgent goods and services. The Shopping threshold was set at US$ 3 million for value of works, and US$ 500,000 for goods, which are extraordinarily high thresholds, allowing for maximum flexibility. NCB was set at US$ 4 million for works, and US$ 1 million for goods. Preference to domestic contractors was given, to stimulate the local economy and maximize the impact of Bank-provided financing in the country. 35. In October 2006, the Bank and the Grenadian Government mutually agreed to change procurement procedures to standard operations13, even though this was not amended in the Legal Agreement. National Competitive Bidding became the preferred method of procurement over Shopping. According to the Aide-Memoire of the mission when this was decided, this was done due to inadequate numbers of responsive bids obtained through the Shopping procedures. Shopping was not an appropriate procedure for complex school-related procurement. Bank procurement rules do not allow it to accept recommendations to award contracts using Shopping procedures without three responsive bids. Following this agreement, seven schools were tendered under NCB, of which three were being re-tendered (they had previously been tendered under Shopping). Additionally, some changes were made to Clause 5.3 of the Bank's Standard Bidding Documents for Small Works (2005 version), to reflect the realities experienced by local contractors in Grenada and allow capable local firms to meet bidding requirements. It was also decided that for all future documents, Clause 5.3 (a) would not include any cumulative financial requirements.14 36. Finally, several procurement items were moved from post-review to prior review. The responsiveness and adaptability of the Bank team and the Government with regards to fiduciary matters during implementation are testimonies of the high degree of cooperation and understanding of the changing situation. 11 World Bank Guidelines for Procurement under IBRD Loans and IDA Credits, May 2004, III. Other Methods of Procurement, Sec. 3.5, Shopping. 12 The Bank's emergency policy under which the Project was processed was slightly changed and was reformulated as OP/BP 8.0 in March 2007. 13 See Aide-Memoire for October 4-6, 2006, mission. 14 Clause 5.3 (a) states: If the Employer has not undertaken prequalification of potential bidders, all bidders shall include the following information and documents with their bids in Section III, unless otherwise stated in the Bid Data Sheet: (i) copies of original documents defining the constitution or legal status, place of registration, and principal place of business of the Bidder; and (ii) written power of attorney of the signatory of the Bid to commit the Bidder. 9 Safeguards: 37. The needs assessment evaluated the works to be completed, and concluded that the type of works considered fell under the environmental classification Category C (likely to have minimal or no adverse environmental impacts). The project was given a Category B rating (potential adverse environmental impacts on human populations or environmentally important areas) however, to accommodate the possibility that additional environmental work might be required, should the scope of the works change significantly during the life of the project. 38. Environmental impacts were associated with the reconstruction phase, and safeguard compliance focused on contractor activities at the work site. The rehabilitation of the hospitals did not include new construction, and biomedical waste was not an issue in the project. A screening procedure and standardized environmental contract clauses were included in the project Operations Manual for application during the construction works. These included site security, hygiene, waste management, noise control, and chance discovery of cultural and historical artifacts. 39. More specifically: · No population relocation issues arose. · There was no use of hazardous materials apart from fuel and paint products. · No pesticide application was required. · No pollution impacts were identified apart from those appropriately addressed by debris management. · Activities were limited to reconstruction on existing sites. During implementation, the Bank team conducted regular visits to various construction sites, and contractor performance was satisfactory. 2.5 Post-Completion Operation/Next Phase 40. The HIERP performed well both in the early emergency recovery stages, and when its scope was modified with the EU grant. The positive longer term development impact of the operation prompted the Government to request the Bank's support for a follow-up project and discussions are ongoing. The next operation's objective (also long term) would aim to strengthen the hurricane resilience of the remaining schools on the island, and to relocate three vulnerable schools currently in high risk areas. There is a strong desire on the part of the Government to continue investing in disaster mitigation and vulnerability reduction. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation 41. The project remained relevant and adapted to country priorities throughout its implementation. While HIERP was an emergency recovery project, it included mitigation aspects that emphasized a longer-term perspective. Furthermore, the project was also in 10 line with Grenada's efforts to realign its education services to accommodate the changing demographics of the island. Thus the school designs, while hurricane resistant, were also produced to allow for future expansions of the target schools (as identified under the OECS education project), indicating that once the country recovered from the disaster, it would move forward with its school realignment and modernization objectives. 42. The scope of the project is also in line with the need ­ identified in the Bank's Country Assistance Strategy (2001) ­ to "complement the rebuilding of damaged infrastructure with comprehensive disaster mitigation measures, such as regular maintenance, appropriate zoning, hazard mapping, establishment/enforcement of construction codes and disaster information mechanisms."15 The ERDMP program in the OECS incorporated disaster-resistant standards for public sector infrastructure constructed with Bank financing. The success of these actions is evident in this case by the fact that the two Grenadian schools that survived Hurricane Ivan were built with these standards. These efforts were furthered under this project with the reconstruction and rehabilitation of the schools and health facilities with the same hurricane resistant standards. 3.2 Achievement of Project Development Objectives 43. Despite delays in the procurement/tendering process, the project development objective has been largely achieved (see output tables in Annex 2 and outcome ratings in Section 3.4 for a breakdown). A. Financing of Critical Imports (Estimated: US$ 2 million, Actual: US$ 2 million). The project successfully financed the purchasing of low sulfur fuel necessary for electricity production. The US$ 2 million was fully disbursed upon project effectiveness. B. Assistance to the Recovery of the Education Sector (Estimated: US$ 5 million, Actual: US$ 4.8 million). The project financed the restoration and rehabilitation of 18 schools. During project design, the exact number of schools to be targeted was not yet available, as engineering studies and the evaluation of the damages were still being carried out. A year into effectiveness, an EU grant was added to the project, and the funds were channeled towards co-financing school rehabilitation and reconstruction. The number of schools was increased from the original projections (which only received Bank funding), to 18 total. At the time of writing, 17 out of the 18 schools had been completed; the one remaining was solely financed by the EU grant. C. Assistance to the Recovery of the Health Sector (Estimated: US$ 2.5 million, Actual: US$ 2.5 million). The project rehabilitated the island's two main hospitals, St. Georges' and Princess Alice, as well as three regional health facilities ­ Princess Royal Hospital, the Central Medical Stores, and the Vector Control Building. Patients benefited from renewed access to services and proper medical supplies storage on the island. 15 CAS (2001), pg. 15. 11 D. Support to the Project Management and Supervision (Estimated: US$ 0.2 million, Actual: US$ 0.425 million). The doubling of the resources used under this component is due to the increased activity deriving from EU trust fund management and activities. 3.3 Efficiency 44. The project was efficient as the team focused on maximizing value for money, and ensured that the funds were used for quick and permanent reconstruction efforts, and not for temporary structures, as often occurs in disaster recovery. 45. The cost of Project Management and Supervision more than doubled; however, this is commensurate with the additional resources provided by the EU grant. Originally, US$ 0.2 million were assigned to manage the Bank's US$ 10 million, but with the EU's US$ 13.4 million, Project Management and Supervision increased reasonably, and do not represent an inefficient management of resources. 46. The Bank team was efficient in swiftly designing the ERL, which was the appropriate instrument in this situation: the immediate disbursement of the US$ 2 million for critical imports (Component 1) would not have been possible under standard Bank procurement rules. In addition, the Bank worked quickly to reallocate funds from ongoing operations to speed up the implementation of the recovery activities on the ground. Finally, the Bank also used streamlined emergency procedures to speed up internal fiduciary requirements and allow for quicker disbursement. The quick influx of cash into the country lessened the liquidity crisis it faced after the hurricane, and reduced the interruption of business. 47. The disbursement schedule for the project also shows it was efficient in the implementation of recovery activities. As seen in the graphs below, the project's disbursement rate is higher than the projected rate and continued smoothly during implementation. The curve is higher than the original because of the EU additional funds. 12 Difference due to EU funds. The graph below shows the steady rise in disbursements during implementation. 3.4 Justification of Overall Outcome Rating Rating: Satisfactory. 48. The project was highly relevant and well-adapted to the post-hurricane context of the island. It was designed to address the Government's priority sectors, health and education, and in both sectors focused on the rehabilitation and reconstruction of the key infrastructures. 49. In terms of outputs, the project completed all the intended works. The EU grant was leveraged to allow the expansion of the number of schools covered under the project through co-financing with the Bank. 13 50. Since the project did not contain outcome (but rather output) indicators16, the ICR team decided to retrofit some indicators to better capture and present the qualitative changes attributable to the project. The first indicator focuses on the safety improvements of the schools (hurricane resistant vs. not hurricane resistant), before and after the project. The second indicator focuses on the quality improvement of the health facilities targeted under the project. Table 2. Retrofitted Outcome Indicators Outcome Indicator Baseline 200417 2009 Result Increase in number of public 2 out of 75 20 out of 75 There are 10 times schools18 in Grenada with primary and primary and more hurricane hurricane resistant standards vs. secondary secondary resistant schools in total number of schools in the (2.6%) (26.6%) Grenada now than country, before the project in 2004. began (2004) and now (2009). Out of 75 (total number of primary and secondary public schools in Grenada) Increase in number of hospitals 1 4 There was only one that are hurricane resistant in hurricane resistant 2004 vs. 2009. hospital in Grenada in 2004. The project contributed to the other 3 reaching the same standards. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development 51. The 2004 OECS/ECLAC damage assessment report shows that 52 percent of Grenadian households are headed by women. This means that providing for children and the elderly often is women's responsibility. In 2004, the rate of female unemployment was at 13 percent, and 38 percent of women participated in the labor force ­ which may not include informal labor. To provide for their family, women depend on public services, such as daycare, school, and healthcare. Damages to daycare centers, such as in the Parish of St. Georges, which reported some 480 children without the care of the guardian they had been accustomed to, affected female-headed households disproportionately. Indeed, 70 percent of the daycare children's households were headed 16 See footnote 4. 17 This data has been collected by the Ministry of Education Statistics Department, and the Ministry of Health. 18 Primary and secondary levels only. 14 by a woman. Similarly, when children are in school, female heads of households can seek employment (formally or informally) to provide for the children and elder members of their households. With 73 out of the 75 schools of the island affected by Hurricane Ivan, one can only imagine the additional burden on women. 52. Children with disabilities require particular attention and care, if they are not in school or in daycare, which may prevent mothers from working at all. Included within the project's 18 schools, was Grenada's only School for the Deaf, i.e., the project also focused on special-needs children. By supporting the rehabilitation of schools, as well as the restoration of functioning health facilities, HIERP enabled women to remain in or re- enter the labor force and contribute to the well-being of their households. (b) Institutional Change/Strengthening 53. Pre-Ivan, the most recent hurricane-related disaster in Grenada was in 1963, with Hurricane Flora, which caused six deaths in the country. Having been spared from major hazards for several decades, the country was unprepared to deal with the heavy impact of Hurricane Ivan. Due to the seriousness of the damages, the PCU staff was incapacitated or could not perform their regular functions, as they attended to their own homes and families. Over time, as the emergency subsided and through the Bank's extensive support to the Government, the PCU was strengthened, and was able to manage projects again. (c) Other Unintended Outcomes and Impacts (Positive or Negative) 54. During the donors meeting organized to raise awareness on the impact of Hurricane Ivan in Grenada, the Grenadian Government's lack of immediate liquidity post-hurricane was discussed among the Caribbean countries, and recognized as a common recurring problem in the region. Following the OECS/ECLAC damage and loss assessment presentation, Caribbean Ministers of Finance discussed the need for a financial loss mitigation mechanism, to pool resources and risk. CARICOM made an official request to the Bank for its assistance in designing what became the Caribbean Catastrophe Risk Insurance Facility (CCRIF), in 2006. 55. In parallel with its work on the Hurricane Ivan Emergency Project, the Bank team was also in ongoing discussions with the Operations Policy and Country Services (OPCS) unit on the revision of the emergency lending procedures ­ OP/BP 8.5 to OP/BP 8.0. The team provided substantive input in the revision of the policy, as it was implementing the HIERP, in terms of lessons learned from the project. 56. Additionally, the experience of Grenada with Hurricane Ivan was the basis for the design of an Institutional Development Fund (IDF) grant in 2007, which would focus on Caribbean Emergency Legislation. The Bank team took the lead in designing this project working with the Caribbean Disaster Emergency Management Agency (CDEMA, the former CDERA), which would examine legal and institutional framework triggered in case of emergency in various countries in the region. The project would bring best 15 practices that are most suited for the region, and recommend improvements to the national frameworks. 57. Finally, the extent of the damage caused by Hurricane Ivan, and the success of the HIERP led the Grenadian Government's request for a comprehensive disaster vulnerability reduction project. This follow-on operation would focus on mitigation measures to reduce vulnerability to future disasters. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops None conducted. 4. Assessment of Risk to Development Outcome Rating: Negligible to Low 58. The risk to project outcomes ­ safer (hurricane resistant) schools and health facilities ­ is low. The new infrastructure is stronger, and will resist damage better from future hurricanes. Furthermore, both the Ministries of Education and Health have maintenance budgets: the Ministry of Education has a budget of US$ 154,000 for school maintenance, and the Ministry of Health EC$ 283,000 (about US$ 98,000) for the community health centers ­ which includes the Vector Control Building financed under the project, and EC$ 750,000 (about US$ 280,000) allocated to the Hospital Executive Management Account, to provide goods and services. This amount is distributed to all hospitals according to size, with the General Hospital (St. Georges) with the largest share. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Highly Satisfactory 59. The Bank's presence in the country post-Ivan was immediate and proactive, allowing the team to quickly gain a comprehensive understanding of the damage caused by the hurricane. This engagement was reflected through various actions the Bank took in project preparation and designs to expedite its own internal procedures, most notably: - The Bank's steady presence created a constructive dialogue with the Government, which helped design a project that responded well to the needs of the country and the context, as well as set the stage for the fast resolution of issues. - Project indicators were kept at the level of output indicators, to reflect the emergency nature and scope (on reconstruction and rehabilitation) of the project. - The initial use of Shopping for contracts that would typically have been processed under National Competitive Bidding (NCB) reduced delays. 16 - The Bank conducted numerous missions to assist the Grenadian Government with the definition and implementation of a recovery and reconstruction plan between September and November 2004. These missions not only enabled the borrower to manage the aftermath of the disaster, set priorities and request funding from the donor community, but they also determined the role of the Bank as a lead supporter and provider of technical assistance to the country. The Bank worked with the Government to guide donors into priority sectors that needed assistance, so as to avoid overlap and complement donor-financed activities. (b) Quality of Supervision Rating: Satisfactory 60. Regular and in-depth supervision helped to address issues at several levels. At the fiduciary level, supervision was well adapted to the emergency nature of the project; while lower procurement thresholds for the purchase of goods and works meant a higher risk to the Bank, frequent missions reduced this risk and ensured the timely resolution of any issues during implementation. The Bank assisted the PCU in working with the Grenadian Tenders Board, which moved slowly due to cumbersome internal legal procedures. The Bank's active supervision and collaboration with the PCU helped to move the tendering process forward and reduce additional delays. 61. Supervision was crucial at the project management level: starting from before the hurricane, the PCU had begun losing staff, due to problems with the PCU coordinator, and was barely operational by the time Ivan hit the country. In the aftermath of the hurricane, the Bank team provided close assistance to the PCU, which needed to be reconstituted with new leadership and staff. This led to an operational PCU by November of 2004. The Bank also assisted the PCU with the prioritization of works and facilitated communications with the Ministries of Planning and Education. 62. Finally, the Bank provided technical supervision of the engineering guidelines, designs, and construction standards during implementation. 63. The Bank team, however, did not modify the project indicators to measure outcomes at the Midterm Review. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory 64. The Bank team was present for a week immediately after Ivan, followed by a month between October and November 2005, in preparation for the donors meeting and donors' conference. Then, from 2005, visits were at least twice a year. This active supervision enabled the Bank to help the Government of Grenada identify and target the sectors it most needed assistance with, and move forward with the execution of activities. 17 5.2 Borrower Performance (a) Government Performance Rating: Moderately Satisfactory 65. The Bank collaborated with the Ministry of Finance in assessing the damage and identifying the principal sectors needing immediate assistance. Throughout the duration of the project, key staff in the Government was responsive and action-oriented. 66. The Government, however, was not able to prioritize works: It took nearly ten months for the Ministry of Education to finalize a list of schools needing rehabilitation and reconstruction. In 2005 and 2006, when faced with a shortage of cement and other building materials, the Government allowed the continuation of construction works for the Cricket Cup despite the reconstruction needs of the education and health sectors. (b) Implementing Agency or Agencies' Performance Rating: Satisfactory 67. The PCU's capacity19 was put under heavy pressure after Hurricane Ivan in managing ongoing projects, the increased donor activity, with flows of new funds into the country, as well as the demands of the recovery phase, and the establishment of the emergency recovery project (HIERP). When the PCU was originally established in 2002, it only managed two projects, and it was initially unprepared for the sudden increase in number and size of projects, which caused pressure on the agency. Furthermore, the PCU had already been weakened due to poor leadership before the HIERP, and had begun shedding staff even before Hurricane Ivan. Within a few weeks of the Hurricane, however, adequate staff was in place, and the PCU was better able to respond to these increased demands. The PCU provided timely supervision reports on the HIERP. (c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory 68. The Borrower demonstrated its commitment and ownership of the project through its responsiveness, its regular reporting on the progress of the project, and its open collaboration with the EU and the World Bank. Accounting for the extent of the damage caused by Hurricane Ivan on private and public infrastructure, the local institutional and contracting capacity and the level of demands on civil servants during the recovery period, the Borrower performed satisfactorily. 6. Lessons Learned 19 Currently staffed by eleven officers: a Project Coordinator, a Financial Management Specialist, a Planner/Programmer, a Procurement Specialist, a Procurement Assistant, a Portfolio Manager (for the education projects), two Accountants, a Procurement Officer, an Administrative Officer, and a Filing Clerk. 18 This project offers some important lessons for the execution of emergency operations. 69. Immediate and active presence and attention to the post-disaster needs are essential in meeting the recovery needs of the country, and establishing a good dialogue with the counterpart. The Bank's rapid response in the immediate aftermath of the disaster enabled it to provide assistance to the country in its recovery efforts and in the preparation of the emergency project targeting key sectors. Furthermore, it ensured a joint commitment to the project's objectives and resolution of issues during implementation. 70. The Bank should work closely with the PCU and key ministries to target needs and respond with appropriate assistance. The project illustrates that line ministries, such as Education and Health, have little construction experience and greatly benefit from the Bank's technical assistance for designing and implementing reconstruction/rehabilitation programs. 71. Emergency procurement is useful in the context of immediate recovery needs. The length of time before switching from flexible to regular procurement methods would depend on the magnitude of the disaster, the damages incurred, and the pace of implementation on the ground. The HIERP successfully demonstrates this example, as procurement processes were reverted to standard procedures by the end of 2006, adapting to the situation in the country. A flexible design that allows accommodating the changing needs of disaster management enables better tracking and understanding of the breadth of the operation. 72. Because of the short preparation time and the nature of emergency operations, ERLs are riskier than standard Bank operations. This is particularly true concerning expediency and controls over procurement processes, and it is important to consider measures that mitigate risk. One of them is having a procurement consultant on staff closely following the project throughout its lifetime. This implies having a relatively large supervision budget, where a good percentage may be used to pay for a procurement specialist. 73. Streamlined procurement processes in emergency situations both on the country and the Bank sides are essential in ensuring faster delivery times. While the Bank adopts OP/BP 8.0 to fast-track procedures internally, borrowing countries often do not have emergency procurement processes. To this effect, the Organization of American States (OAS) is currently implementing a World Bank Institutional Development Fund (IDF) grant for the Caribbean Emergency Legislation Project. 19 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies The Borrower did not provide comments. (b) Cofinanciers The European Commission did not provide comments. (c) Other partners and stakeholders 20 Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD Million Equivalent) Actual/Latest Appraisal Estimate Percentage of Components Estimate (USD (USD Millions)20 Appraisal Millions)21 Critical Imports 2 2 100% Assistance to the Recovery 5 4.8 96% of the Education Sector Assistance to the Recovery 2.5 2.5 100% of the Health Sector Project Management 0.2 0.425 212.5%* Total Baseline Cost 9.7 9.735 Contingencies 0.280 0.250 Front End Fees 0.030 0.025 Total Financing Required 10.01 10.01 * Due to additional EU funds. See Section 3.3, p.12. (b) Financing Appraisal Actual/Late Type of Estimate st Estimate Percentage Source of Funds Cofinancing (USD (USD of Appraisal Millions) Millions) EU 13.4 13.4 0% IBRD 5 5 50% International Development 5 5 50% Association (IDA) 20 From Technical Annex, p. 22. 21 From PCU Budget Unit. 21 22 Annex 2. Outputs by Component Component 1. Financing of Critical Imports Goods Total Cost (as of July 13, 2009) Low-Sulfur Diesel Fuel 2,000,000.00 Component 2. Assistance to the Recovery of the Education Sector: Rehabilitation and Reconstruction of Schools (US$5 million) The project financed the reconstruction and rehabilitation of the education sector: Works Bank Financed EU Trust Total Cost (as (IBRD/IDA) Fund of July 13, 2009) 1 Repairs to Presentation 265,861.26 174,770.86 440,632.12 Brothers College 2 Repairs to School for the 34,658.03 63,886.50 98,544.53 Deaf 3 Rehabilitation to Mac Donald 72,622.06 0.00 72,622.06 College ­ Laboratories 4 Repairs to St. Joseph 322,015.51 172,605.98 494,621.49 Convent 5 Rehabilitation to T. A. 182,678.00 0.00 182,678.00 Marryshow Community College 6 Rehabilitation to Mac Donald 174,732.23 183,825.30 358,557.53 College 7 Rehabilitation of St. 32,119.99 64,746.20 96,866.19 Georges' Anglican School 8 Rehabilitation of Happy Hill 113,256.83 203,807.69 317,064.52 Secondary School 9 Rehabilitation of St. Paul's 1,328,950.86 0.00 1,328,950.86 Government School 10 Rehabilitation of St. 277,258.69 737,002.00 1,014,260.69 Andrew's Anglican Secondary School 11 Rehabilitation of St. 112,779.58 523,366.13 636,145.69 Georges' Methodist School 12 Rehabilitation of Boca 428,272.79 351,937.52 780,210.31 22 Information obtained through PCU. 22 Works Bank Financed EU Trust Total Cost (as (IBRD/IDA) Fund of July 13, 2009) Secondary School 13 Rehabilitation of Anglican 218,227.50 704,410.45 922,637.95 High School 14 Rehabilitation of Birchgrove 31,660.99 286,948.88 316,609.87 R. C. School 15 Repair/Rehabilitation of 39,406.40 354,457.69 393,386.09 Hermitage Government School 16 Repair/Rehabilitation of J.W. 52,515.12 472,377.74 524,892.86 Fletcher Memorial School 17 Repair/Rehabilitation of St. 235,496.10 880,010.31 1,115,506.41 John's Christian Secondary School 18 Repair/Rehabilitation of Holy 35,532.72 302,028.12 337,560.84 Innocents Anglican School 19 Repair/Rehabilitation of 62,322.14 541,521.30 603,843.44 Hillsborough Secondary School TOTAL Works 4,020,366.78 6,015,702.67 10,036,069.45 Goods School Furniture 251,258.23 Vehicles 25,853.73 Science Equipment 72,000.00 TOTAL Goods 349,111.96 Consultants Consultants 409,321.93 Component 3. Assistance to the Recovery of the Health Sector Works Total Cost (as of July 13, 2009) Repairs to General Hospital 133,477.48 Repairs to Central Medical 418,914.19 Stores Building Retrofitting of Princess Royal 381,357.43 Hospital Reconstruction of Vector 252,140.28 Control Building Repairs/Rehabilitation of 655,673.40 Princess Alice Hospital 23 TOTAL Works 1,841,562.78 Goods Oxygen Tanks 36,713.78 Lab Equipment ­ Scientific 136,517.72 Supplies and Technology Inc. Vehicle 22,319.77 Fork Lift & Pallet Jack 48,970.00 Generator 59,481.94 Emergency Equipment 440,775.34 Geriatric Beds and Patient 38,683.12 Lifts Chiller/Freezer 44,992.33 TOTAL Goods 828,454.00 Component 4. Support to Project Management and Supervision Goods Total Costs (as of July 13, 2009) Office Equipment and 19,976.22 Furniture Computer Equipment 10,027.16 TOTAL Goods 30,003.38 Consultants PCU Staff 261,524.44 Financial Audit 13,500.00 TOTAL Consultant Services 275,024.44 Operating Expenses 79,740.40 HIERP Total Expenditure 9,833,585.67 Original Project Indicators (From Technical Annex): (i) The successful importation of low-sulfur diesel fuel for energy production and transport, as well as other critical goods such as construction materials and equipment needed for the overall reconstruction effort; (ii) The number of students who have returned to school, on a quarterly basis; and (iii) The number of hospital beds that have been rehabilitated to an operational level, on a quarterly basis. 24 Annex 3. Economic and Financial Analysis 74. There was no cost-benefit analysis conducted for this project, as it was an emergency project. 75. However, the Bank's 2006 Policy Note "Not If but When: Adapting to Natural Hazards in the Pacific Islands Region" provided some guidance as to how to value the investments in disaster mitigation achieved under the project. The Policy Note includes a table on Caribbean islands, where it compares the original project costs, the reconstruction costs, and the risk management of natural hazard (RMNH) costs as a percentage of both. The table below shows the differences in costs of prevention vs. reconstruction in the Caribbean (in US$), and illustrates how prevention is much less costly than reconstruction. Infrastructure Deepwater Port Troumasse Norman Manley Grand (Dominica) Bridge Law School Palazzo (St. Lucia) (Jamaica) Hotel (St. Thomas) Original project 5,700,000 185,000 685,000 28,000,000 cost Reconstruction 2,310,000 32,000 28,800 5,308,000 costs after disaster Reconstruction as 40.7% 17.4% 4.2% 19% % of original construction cost RMNH costs as % 11.5% 10.8% 1.9% 0.1% of original construction costs RMNH costs as % 28.0% 62.4% 45.0% 0.5% of reconstruction costs The Hurricane Ivan Emergency Project invested in hurricane resistant designs, and project works were built to higher standards (hurricane resistant) than the pre-existing ones. It is likely that in the occurrence of another Ivan-like hurricane, the targeted schools and health facilities will be much less affected than in 2004. 76. The ICR follows a methodology used in the Implementation Completion Report for the Samoa Cyclone Emergency Recovery Project (P088246) called Value for Money Assessment (VFMA), which can be applied to the HIERP to reflect qualitative benefits gained with regard to economy and quality. The criteria used to rate the VFMA of the project is listed below, with supporting evidence from the project: (a) Project investment objectives: The project met its objective satisfactorily; it responded to the reconstruction and recovery efforts in the country and was relevant in addressing the requests of the Government. 25 (b) Financial, human and physical resources consumed: The actual project management costs were higher than at appraisal, but this is explained by the additional demands of managing the EU trust fund by the PCU. There was no total budget overrun, and the PCU hired necessary staff to meet its increased workload. (c) Processes for rules and regulations: Bank rules and regulations were respected during implementation, initially under OP/BP 8.5, and then as the project changed to standard Bank operations procedures. (d) Quality of reconstruction: Outputs finished under this project (schools, health facilities) were built with higher and safer standards. Good supervision during implementation, with numerous site visits from both the PCU and the Bank team allowed the verification of the quality of works as they progressed. (e) Impact and utilization of investments: The impact and utilization of the outputs is as expected at appraisal. The children are back in their rehabilitated schools, and health facilities have been functioning and serving patients. Princess Alice Hospital patients now have access to emergency services within proximity. 77. The benefit of the project in large part is that the student population in the targeted schools is now in safer, hurricane resistant schools. Furthermore, with the Government's interest in furthering this initiative to other schools ­ retrofitting them with mitigation measures ­ it is that even more Grenadian children will be safer in the future. 78. The team explored, but did not delve into a more in-depth economic analysis based on life earnings for children, which would be hard to estimate, as children were not off school for an extended period of time (so long as it would visibly affect their life earnings), as they were schooled in temporary shelters while rehabilitation was ongoing. It would be difficult to measure how being schooled in temporary establishments would directly affect the learning (and later, earning) rates. 79. Similarly for the health sector benefits, estimating how the earning or productivity levels of the patients were affected through the rehabilitation of the hospitals and other health facilities would require a more in-depth analysis of the typology of the patients (medial needs and wage levels, access to health services, for instance) against a baseline that was not estimated at the beginning of the emergency project. 26 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team Members Responsibility/ Names Title Unit Specialty Lending Francis Ghesquiere Task Team Leader LCSUW Marc Forni ET Consultant LCSUW Gerald Meier Environmental Specialist LCSUW Norma Rodriguez Procurement Specialist LCSUW Hazard Risk Management LCSUW Joaquin Toro Specialist Svetlana Klimenko FM Specialist LCSUW Supervision/ICR Gerald Meier Environmental Specialist LCSUW Nara C. Meli ET Consultant LCSUW Ulrich Myboto ET Consultant LCSUW Niels Holm-Nielsen Task Team Leader LCSUW Francis Ghesquiere Task Team Leader LCSUW Disaster Risk Management Joaquin Toro LCSUW Specialist Seyoum Solomon Procurement Specialist LCSUW (b) Staff Time and Cost Staff Time and Cost (Bank- Staff Time and Cost (Bank Budget Only) Stage of Project managed EU TF) Cycle No. of Staff USD Thousands (including USD Thousands (including Weeks travel and consultant costs) travel and consultant costs) Lending FY05 3.48 85,945 Total: 3.48 85,945 Supervision/ICR FY05 4.37 46,993 FY06 8.73 82,229 10,611 FY07 7.70 47,413 14,995 FY08 6.03 32,195 61,713 FY09 20.73 54,970 67,664 FY10 6.80 49,183 39,781 Total: 54.36 312,985 194,814 Total Bank+EU Staff Costs 507,799 27 Annex 5. Summary of Borrower's ICR and/or Comments on Draft ICR General Objectives The general objective of the Project was to support the recovery efforts of the Government of Grenada through the financing of critical imports and rehabilitation activities in key social sectors. Specific Objectives The specific objectives of the Project included: (1) Supporting the Government's overall reconstruction efforts through the financing of actual imports. (2) Restoring school infrastructure. (3) Supporting the rehabilitation of health-care infrastructure to ensure adequate access to quality health-care facilities. Quality of Entry Early assessments were carried out following Hurricane Ivan, a category 3 storm, which struck the island on September 7th, 2004. The hurricane almost completely devastated the country's educational infrastructure, with only two (2) of the seventy-five (75) primary and secondary schools surviving intact. These two schools were constructed under the Basic Education Reform Project, a previous Bank-financed project, were located in safe (protected) areas, and were designed and constructed in accordance with hurricane resistant standards. The project was designed as an immediate to short-term response with a focus on assisting the Government of Grenada to return to normal schooling within the shortest possible time frame. The overall economic context was defined by a significant decline in Government revenue which limited the capacity of the Government of Grenada to finance the immediate needs of the education system. The Government's early recovery efforts were therefore very limited in scope and impact. There was an urgent need for technical and financial scope from the region and international donor and financing community. Early intervention and commitments to assist in the recovery process came from the World Bank, the Caribbean Development Bank, the European Union as well as regional and International Governments. With specific reference to the education sector, the World Bank quickly agreed to the restructuring of the ongoing OECS Educational Development Project with a view to 28 enabling the project to provide a more effective response to the country's post hurricane needs. This was complemented by the Caribbean Development Bank which also restructured an ongoing Education Development Project of which physical improvements of schools was a major component. Achievement of Objectives and Outputs Outputs by Components Critical Imports The project provided US$ 2.0 million for the procurement of critical imports of low sulfur diesel fuel to enable the resumption of power supply throughout the country. This was supplemented by an additional US$ 450,000 which was reallocated from the Emergency Recovery and Disaster Management Project. School Rehabilitation Eighteen (18) Government Primary and Secondary Schools were refurbished / rehabilitated through the proceeds of the project for a total cost of US$ 5.3 million. This amount was complemented by US$ 5 million from the OECS Education Development Project. Rehabilitation of Medical Facilities Five medical facilities were rehabilitated by the project at the cost of US$ 2.5 million. This was complemented by US$ 1.3 million from the HIV/ AIDS Prevention and Control Project, which was used for rehabilitation of medical facilities and renovation / construction of homes of people living with HIV and AIDS. Implementation and Supervision Project Management was carried out by the Project Coordination Unit of the Ministry of Finance with technical support from the Ministry of Education and the Ministry of Communication and Works. Technical support in the areas of design, preparation of tender documents, tender evaluation and construction supervision was provided by a consulting firm which was contracted for this purpose. World Bank staff provided strong support through regular supervision missions and through technical advice from Washington. Bank staff also facilitated quick turn-around on request for "No Objection" advice, etc. Institutional Development Impact 29 At the date of effectiveness of the project, a Project Coordination Unit, with responsibility for the coordination of World-Bank-financed projects had already existed within the Ministry of Finance. This Unit was tasked with the responsibility of coordinating the implementation of the Project. Project staff at the PCU and support personnel at the Ministry of Education and the Ministry of Works benefitted from knowledge of Bank procedures and guidelines and regular interaction with Bank staff. Major Factors Affecting Implementation and Outcomes Factors Outside of the Control of the Government and the Implementation Agency In the first two years following the passage of Hurricane Ivan, the country was affected by an acute shortage of skilled construction labor as well as a shortage of building materials, in particular cement. This had a negative impact on the rate of implementation of several of the projects. The Implementation Agency (the PCU) was negatively affected by the extended period of time it took the Ministry of Education to select beneficiary schools. Although this tardiness in decision­making was partly the result of the gap between available resources and needs, it nonetheless results in a later than originally expected start-up of some projects. Factors Generally Subject to Government Control (1) The list of approved schools was revised several times. This had a negative impact as regards the commencement of the procurement process and eventually the implementation of the works. (2) The repeated revision of the list of schools negatively affected the works of the consultants. In some cases, designed work which had already started had to be abandoned in view of new priorities. (3) The requirements of the contact award approval process, which includes approval by both the Tenders Board and Cabinet, resulted in prolonged delays in the approval of recommendations for award of contract. In some cases the recommendations of the consultant (and the PCU) were reversed by either the Tenders Board or Cabinet resulting in further delays. Bank / Borrower Performance The Bank Lending 30 The Bank facilitated the Project preparation process and obtained Board approval at a quicker than normal rate as a result the emergency nature of the situation, with a view to facilitating speedy implementation. The Bank also relaxed its procurement requirements delivering direct contracting in specific circumstances. Supervision Bank staff made regular supervision missions and in general kept themselves informed on project implementation processes and issues through electronic mail and the telephone. This was a means of valuable support to the PCU during the entire implementation process. Overall Bank Performance Overall, the support and guidelines provided by the Bank from project identification through to implementation were of the highest quality and need to be commended. The Borrower Implementation Performance The Project implementation was negatively impacted by slow decision-making at different levels of Government operation including the Ministry of Education, the Tenders Board and the Cabinet. The slow decision-making negatively affected the work of the consultants and the project coordination efforts of the PCU and ultimately contributed to a slower than expected rate of Project implementation. Overall Performance In spite of the above-mentioned implementation problems, both the development and specific objectives of the Project were achieved. It should be noted that relevant Government agencies were fully aware of relevant Project implementation issues at all times. The major problem was the lack of timely decision-making. Lessons Learnt Very significant lessons were learnt in relation to all the phases of the project cycle. These include the following: (1) It is important, as much as possible, to make firm decisions during the project preparation and approval process. Post-approval decisions relating to the selection of schools and the allocation of resources took considerably more time than originally expected. 31 (2) A lack of appreciation of Bank procedures and Guidelines among key functionaries and decision-makers can slow project implementation. This was the case with this project. Measures need to be taken to sensitize relevant officers. (3) A high level of official interest in the outcome of the procurement process can place persons involved in the process under unnecessary pressure. 32 Annex 6. Comments of Cofinanciers and Other Partners/Stakeholders The Project Coordination Unit expressed substantial agreement with the results of the Implementation Completion Report. 33 Annex 7. List of Supporting Documents Project Technical Annex Project Memorandum to the President Implementation Status Reports HIERP Mid-Term Report PCU Activity Report Bank Procurement Guidelines HIERP Loan Agreement OECS/ECLAC 2004 Assessment ERDMP Implementation Completion Report "Grenada, A Nation Rebuilding. An assessment of reconstruction and economic recovery one year after Hurricane Ivan", World Bank. Washington, DC. 2005. World Bank. 2006. "Not If But When. Adapting to Natural Hazards in the Pacific Islands Region." Policy Note - East Asia and Pacific Region Pacific Islands Country Management Unit. Washington, D.C. 34 Annex 8. Images Image 1. Hurricane Ivan over Grenada. (NOAA, National Hurricane Center) Image 2. Hurricane Ivan as it approached the Windward Island, September 5, 2004. (NASA Terra Satellite Image). 35 Images 3-4. General damage on the island (World Bank team photos) 36 Images 2-3. Wesley College. (World Bank team photos) September 14, 2004 August 21, 2005 37 Image 9. Anglican High School post Ivan (World Bank team photo) Images 10-11. Anglican High School, 2009 (Government of Grenada photos) 38 Image 7. Princess Alice Hospital (60 beds) (World Bank team photo) 90 percent of the roof lost, most of the equipment, furniture and supplies were either destroyed by water damage or looted. Image 8. Princess Alice Hospital (2009) rehabilitated. (World Bank team photos) 39 40