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World Bank Document INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 01/31/2010 Report No.: AC4659 Public Disclosure Authorized 1. Basic Project Data Country: Sri Lanka Project ID: P113036 Project Name: North East Local Services Improvement Project (NELSIP) Task Team Leader: Seenithamby Manoharan Estimated Appraisal Date: January 25, Estimated Board Date: March 30, 2010 2010 Managing Unit: SASSD Lending Instrument: Specific Investment Loan Sector: Roads and highways (60%);Sub-national government administration (20%);Water supply (10%);Irrigation and drainage (10%) Theme: Rural services and infrastructure (25%);Participation and civic engagement (25%);Conflict prevention and post-conflict reconstruction (25%);Decentralization (25%) Public Disclosure Authorized IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 50.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 5.00 Local Communities 2.00 7.00 Environmental Category: B - Partial Assessment Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [X] Public Disclosure Authorized or OP 8.00 (Rapid Response to Crises and Emergencies) 2. Project Objectives The primary development objective of the project is to support local government authorities in the North and East Provinces of Sri Lanka to deliver services and local infrastructure in a responsive and accountable manner. 3. Project Description Component 1: Service Delivery (US$47.0 million): The objective of this component is to enhance the resources available to LAs for improving local service delivery in a transparent and predictable manner. This component will have two subcomponents: (a) Basic Block Grant to all eligible LAs in the North and East that meet core conditions such as clearing an independent annual financial audit, completing a core program of Public Disclosure Authorized capacity building, and establishing and sustaining appropriate systems for participatory planning and budgeting; and (b) Performance-based Grants to a smaller group of LAs that demonstrate higher levels of performance measured on the basis of a set of transparent and objective performance criteria. Further, an Other Grants window will be considered for targeted interventions to support urgent priorities that may arise from time to time (such as rehabilitation of war affected people). The process for selection of Pradeshiya Sabhas and Urban Councils in the first year and Municipal Councils in the third year, will be (i) Conducted an assessment of each LA based on criteria indicated above, and focusing on existing capacity and level of performance; (ii) Based on assessment results, identify the eligible LAs for the first year of implementation; (iii) Prioritize the most eligible LAs for fund transfers as well as ineligible LAs for capacity building for the first year of implementation giving special attention to two criteria: (a) completion of final accounts for the last three financial years (2006, 2007 and 2008) with satisfactory response from the Department of Auditor General and (b) availability of qualified Technical Officers at the LA to undertake the design and implementation of sub projects, which involve construction activities; (iv) Consult Commissioners of Local Government (CLGs) and Assistant Commissioners of Local Government (ACLGs) in the participating districts of the respective provinces regarding the suitability of the selection; and (v) Notify Provincial as well as District Coordinating Committees of the list of selected LAs and table lists at both District and Provincial Coordinating Committees. Any Local Authority that does not qualify for fund transfers will be supported by the project with the assistance of Ministry of Local Government & Provincial Councils (MLGPC) to prepare them for two re-assessments within a time frame of six months. The first tranche of fund transfers to LAs that qualify in the first year will be released in April 2010 to demonstrate that this project intends to assist weaker LAs first, rather than the few capacitated LAs who receive financial assistance from funding agencies at all times. Component 2: Institutionalizing Accountabilities (US$2.0 million): This component aims at ensuring that LAs undertake public expenditures and deliver local services in a transparent and accountable manner. This component will thus strengthen upward and downward accountability systems at the LAs and provincial council levels, and it will support: (a) transparent and independent annual financial audits of LAs to ensure their financial accountability; (b) social and technical audits of public expenditures undertaken by LAs to ensure effective use of funds in line with citizen expectations; (c) systems and processes to bring greater transparency in LA affairs and strengthen citizen voice in planning, budgeting and monitoring of public expenditures and local service delivery. This component will also assist the Local Authorities to complete their outstanding audit issues with assistance from MLGPC. Component 3: Building Capacities (US$4.0 million): This component will strengthen a number of institutions at the local, provincial and central government levels that are essential to an effective local government system. This includes participating LAs at the local level, the CLG, ACLG and the provincial treasury at the provincial level, and the Auditor General, the Finance Commission, the Sri Lanka Institute for Local Government, the Ministry of Nation Building & Estates Infrastructure Development (MNBEID) and the Ministry of Provincial Councils and Local Government (MLGPC) at the central level. It will also support an Information Education & Communication (IEC) campaign aimed at disseminating project related information to different stakeholders at all levels. GOSL will also contract private sector agencies to assist in areas where there are gaps in their capacity. This will provide on-site technical assistance for local government and also contribute to putting in place an improved accountability and good governance system. This component will also assist the Local Authorities to provide minimum staff required to implement the project, since there is a delay in obtaining MSD approval to appoint staff approved by the Cabinet. Component 4: Policy Development and Evaluation (US$1.0 million): This component will support a range of analytical and advisory activities aimed at strengthening the ability of central government to make effective policies related to local government. It will also support activities aimed at monitoring and evaluation of the outputs and impacts of the project through surveys at the start, mid-term and end of project, impact evaluations, social assessments, etc. Component 5: Project Management (US$3.0 million): This component will support agencies at the central, provincial and local levels that are involved in the day to day management of the project to procure necessary consultant, equipment and operational support for the smooth implementation of the project. In particular, this will include agencies such as the MNBEID and MLGPC at the central level; the offices of the CLG at the provincial level and ACLG offices at the district level; and the LAs at the local level. 4. Project Location and salient physical characteristics relevant to the safeguard analysis Project will be located in the North and Eastern Provinces of Sri Lanka. Both provinces are located in the low country dry zone in Sri Lanka. Northen Province: Northern Province has an area of 8,884 square kilometers. The province is surrounded by the Gulf of Mannar and Palk Bay to the west, Palk Strait to the north, the Bay of Bengal to the east and the Eastern, North Central and North Western provinces to the south. The province is divided into two distinct geographic areas: Jaffna peninsula and the Vanni. Jaffna peninsula is irrigated by underground aquifers fed by wells whereas the Vanni has irrigation tanks fed by perennial rivers. Major rivers include: Akkarayan Aru, Aruvi Aru, Kanakarayan Aru, Kodalikkallu Aru, Mandekal Aru, Nay Aru, Netheli Aru, Pali Aru, Pallavarayankaddu Aru, Parangi Aru, Per Aru, Piramenthal Aru, Theravil Aru. The province has a number of lagoons, the largest being Jaffna Lagoon, Nanthi Kadal, Chundikkulam Lagoon, Vadamarachchi Lagoon, Uppu Aru Lagoon, Kokkilai lagoon, Nai Aru Lagoon and Chalai Lagoon. Most of the islands around Sri Lanka are to be found to the west of the Northern Province. The largest islands are: Mannar island, Kayts, Neduntivu, Karaitivu, Pungudutivu and Mandativu. The Northern Province tends to be hot and dry in the dry season (February to September), and moderately cool and wet in the wet season (October to January) when the North-east monsoons takes place. Province’s climate is tropical and therefore during monsoons there is always the chance of a deluge. In the lowlands the climate is typically tropical with the average temperature is around 28º to 30º for the year. Relative Humidity varies from 70% during the day to 90% at night. Annual rainfall is less than 1250 mm in the north west and south east of the Inland. Majority of the people earn their livelihood as farmers, fishers and professionals in the civil and business sectors. Agriculture is the prominent source of livelihood for vast majority of the people. Jaffna peninsula is irrigated by underground aquifers fed by wells whereas the Vanni has irrigation tanks fed by perennial rivers. Agricultural is the
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