The World Bank Rural Infrastructure in Armenia
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30312 Public Disclosure Authorized The World Bank Rural Infrastructure in Armenia: Addressing Gaps in Service Delivery Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Infrastructure and Energy Services Department Europe and Central Asia Region 1st September 2004 FINAL REPORT: 1st September 2004 Disclaimer: This paper is published to communicate the results of the Bank’s work to the development community with minimum delay. The typescript of this paper, therefore, has not been prepared in accordance with the procedures appropriate to formal printed texts and the World Bank accepts no responsibility for errors. Some sources cited in this paper may be informal documents that are not readily available. The findings, interpretations, and conclusions expressed here are those of the authors and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank cannot guarantee the accuracy of the data included in this report. The boundaries, colors, denominations, and other information shown on any map in this work do not imply on the part of the World Bank any judgment of the legal status of any territory or the endorsement or acceptance of such boundaries. © 2004 International Bank for Reconstruction and Development (IBRD), The World Bank. ii FINAL REPORT: 1st September 2004 CONTENTS Abbreviations And Acronyms vi Acknowledgments vii Overview and Summary of Recommendations 1 Introduction 5 Why did we do this Study?........................................................................................................................................5 What are the Specific Objectives of the Study?.........................................................................................................6 What was the Approach? ...........................................................................................................................................6 The Rural Environment in Armenia 8 Why is Rural Infrastructure Important in Armenia?..................................................................................................8 What are the Characteristics of Rural Poverty? .......................................................................................................10 Is the Institutional Context Supportive of The Rural Sector? ..................................................................................12 The Lessons of Earlier Initiatives In Rural Infrastructure 15 What were the Findings from Earlier Projects?.......................................................................................................15 What are the Main Lessons from Earlier Studies?...................................................................................................19 What are the Key Points? ........................................................................................................................................21 The Main Findings from the Qualitative and Quantitative Surveys 22 What did we Discover?............................................................................................................................................22 What is the Coverage, Condition and User Satisfaction with Existing Services?....................................................22 What are the Preferences of Local Communities towards Infrastructure Investments?...........................................35 What are the Factors that Influenced the Sustainability of Prior Investments? .......................................................42 The Implications for the Development of Rural Infrastructure in Armenia 46 A Coherent Rural Infrastructure Strategy for Armenia?..........................................................................................46 What are the Key Issues that A Rural Infrastructure Strategy should Address?......................................................48 What can be done to make Rural Infrastructure Investments Sustainable? .............................................................53 How should Rural Infrastructure Investments be Prioritized?.................................................................................58 How can the Action Plan be Financed? ...................................................................................................................62 References 67 Annex A – The Methodology of the Study 69 Annex B - The Outcomes of the Pilot Interviews 71 Annex C – The Guidelines to interviewers and Questionnaires used in the study 75 Annex D – The Institutional Context of Service Delivery 92 Annex E - The Main Findings from Previous Programs/Studies 101 Annex F– The Coverage, Condition and User Satisfaction With the Existing Services 109 Annex G – The Decision Matrix 143 Annex H - The Cost Estimates in the Decision Matrix 145 Annex I – An Example of The Output from the Decision matrix 157 Annex J – The Sampling Strategy 158 Annex K – The Delphi Approach 160 Annex L – Universal Access in the Telecoms Sector 161 iii FINAL REPORT: 1st September 2004 LIST OF TABLES AND FIGURES Table 1 Real GDP Growth, Aggregate and by Sector (per cent change over previous year), 1998-2003 9 Table 2 A schematic representation of rural poverty 11 Table 3 Current Monetary Incomes of Households by Main Sources of Income (AMD) 1999-2002 11 Table 4 Summary of groups of communities with various levels of poverty 16 Table 5 The condition of the irrigation infrastructure (2003) 23 Table 6 The area of irrigated land (2003) 23 Table 7 A schematic representation of irrigation availability 24 Table 8 Respondent assertion of crop losses due to absent or inadequate irrigation 24 Table 9 Proportion of communities who had experienced output losses due to absent/inadequate road infrastructure 25 Table 10 The pavement of rural roads by ownership category 26 Table 11 The condition of the road infrastructure in the marzer (2003) 27 Table 12 Condition of drinking water infrastructure at marz level 29 Table 13 The condition of the drinking water infrastructure by ownership type 30 Table 14 Average annual electricity consumption per household, per community in Kwh (1999-2003) 31 Table 15 Respondent satisfaction with the provision of electricity 32 Table 16 A schematic representation of the distribution and number of subscribers for gas 33 Figure 1 The number of communities with telecoms in each marz 34 Table 17 Proportion of votes cast towards each infrastructure type 36 Table 18 Respondent satisfaction towards electricity supply (%) 40 Table 19 The sectoral share of the highest 50 interventions in the DM 61 Table 20 State allocations to public infrastructure sectors (US$ Mill) 65 Table 21 Required allocations and sources to meet needs of rural infrastructure sectors (US$ Mill) 66 Table 22 Structure of Central and Local Government in Armenia 92 Table 23 Selected Characteristics of Armenian Marzer 93 Table 24 Drinking water and sewerage tariffs (US cent/cubic meter) 96 Table 25 Wholesale irrigation tariffs (US cent/cubic meter) 97 Table 26 Wholesale irrigation tariffs (US cent/cubic meter) 98 Table 27 Gas tariffs (US cent/cubic meter) 98 Table 28 Telecom tariffs (US cent/minute) 99 Table 29 Summary of groups of communities with various levels of poverty 102 Table 30 The condition of the irrigation infrastructure (2003) 110 Table 31 The area of irrigated land (2003) 110 Table 32 A schematic representation of irrigation availability 111 Table 33 Community access to irrigated land (2003) 112 Table 34 Respondent assertion of crop losses due to absent or inadequate irrigation 112 Table 35 Respondent satisfaction with the quality of irrigation supply 113 Table 36 Proportion of irrigation season when water is supplied 113 Table 37 Proportion of communities who had experienced output losses due to absent/inadequate road infrastructure115 Table 38 An indication of the relationship between poverty and community ‘remoteness’ 116 Table 39 The pavement of rural roads by ownership category 117 Table 40 A schematic representation of the condition and type of the road network, by area 117 Table 41 Investments in Rural Roads, by Marz, over the period 1999-2003 (US$) 118 Table 42 The condition of the road infrastructure in the marzer (2003) 119 Table 43 Condition of drinking water infrastructure at marz level 122 Table 44 Households with taps as a proportion of total households 123 Table 45 A schematic representation of the distribution of households with taps 123 Table 46 Proportion of communities, by marz, and hours of drinking water supply. 124 Table 47 Investment requirements of drinking water infrastructure by ownership type 125 Table 48 Source of community water supply, by provider category 125 Table 49 Average annual electricity consumption per household, per community in Kwh (1999-2003) 128 Table 50 The condition of the electricity infrastructure, by marz 128 Table 51 Respondent satisfaction with the provision of electricity 129 Table 52 A schematic representation of the distribution and number of subscribers for gas 131 iv FINAL REPORT: 1st September 2004 Table 53 Availability and access to gas supply by marz 132 Table 54 Access to gas supply by rural households 132 Table 55 Average annual gas consumption by households, by marz (m3) 133 Table 56 The condition of the gas infrastructure in the rural communities 134 Table 57 Access to telecommunications services, by marz 136 Table 58 The percentage of households with telephone subscriptions as a proprtion of total households 137 Table