Implementation Completion Memorandum

Project Number: 40217 Grant Number: 9102-PHI November 2009

PHI: Southern Landslide Disaster Assistance Project (Financed by the Japan Fund for Poverty Reduction)

1 JAPAN FUND FOR POVERTY REDUCTION (JFPR) IMPLEMENTATION COMPLETION MEMORANDUM (ICM)

I. BASIC INFORMATION 1. JFPR Number and Name of Grant: JFPR 9102-PHI: Landslide Disaster Assistance Project 2. Country (DMC): 3. Approved JFPR Grant Amount: $3,000,000 4. Grant Type: 5-A. Undisbursed Amount 5-B. Utilized Amount X Project /X Capacity Building $245,165.08 $2,754,834.92 6. Contributions from other sources Source of Contribution: Committed Amount Actual Remark - Notes: Contributions1: DMC Government $ 173,910 $ 176,000 Other Donors (please name) ------Private Sector ------Community/Beneficiaries $ 11,250 $ 1,240

7-A. GOJ Approval Date: 7-B. ADB Approval Date: 7-C. Date the LOA was signed 15 November 2006 15 December 2006 (Grant Effectiveness Date): 15 December 2006 8-A. Original Grant Closing Date: 8-B. Actual Grant Closing Date: 8-C. Account Closing Date: 31 July 2009 31 July 2009 8 December 2009 9. Name and Number of Counterpart ADB (Loan) Project: N/A 10. The Grant Recipient(s): Hon. Gov. Damian G. Mercado Provincial Government of Southern Leyte City, Southern Leyte, Philippines Email: [email protected] Tel.: (053) 570-9018; Fax: (053) 570-9016 11. Executing and Implementing Agencies: Provincial Government of Southern Leyte was the Executing and Implementing Agency for the Project.

Hon. Gov. Damian G. Mercado Provincial Government of Southern Leyte Maasin City, Southern Leyte, Philippines Email: [email protected] Tel.: (053) 570-9018; Fax: (053) 570-9016

Ms. Virginia Lim-Cruz, Project Director Project Implementation Unit – Southern Leyte Landslide Disaster Assistance Project Provincial Government of Southern Leyte Maasin City, Southern Leyte, Philippines Email: [email protected] Fax: (053) 381-4546

1 Provincial Government and communities' contributions have been in Philippines Peso. ADB's 16 November 2009 exchange rate of Php46.77 per US dollar was used for conversion purposes.

2 II. GRANT PERFORMANCE ASSESSMENT 12. Description (Background rationale): The Province of Southern Leyte (Province) is among the 10 most disaster-prone provinces in the Philippines, and is particularly prone to landslides. Almost 50 percent of the barangays in the Province, in which incidence of poverty was 29% in 2006, are exposed to the risk of landslides. In the first half of February 2006 the Province suffered from continuous strong rains, which led to a series of landslides and flash floods causing widespread damages and adversely affecting lives of some 20,731 individuals (5,702 families) in 10 of the 18 towns of Southern Leyte. The tragic culmination of this continuous rainfall occurred on 17 February 2006 when a rockslide-debris avalanche collapsed on Guinsaugon in the municipality of St. Bernard killing 1,112 people, including 250 pupils at the Guinsaugon Elementary School. The immediate damages to the Pprovince's infrastructure were estimated at $3.5 million.

Various international and local institutions' post-disaster assistance was largely focused on development of relocation sites and construction of houses. There was, however, an urgent need to upgrade such key provincial infrastructure as farm-to-market roads, schools, and hospitals, whose condition worsened after the heavy rainfall and subsequent landslides critically affecting their utility to the people. Strengthening local authorities' capacity in disaster risk mitigation measures was also needed. Therefore, in response to the request of the Government of Philippines and the Provincial Government of Southern Leyte, ADB, in close coordination with the Embassy of Japan in , prepared the Southern Leyte Landslide Disaster Assistance Project (Project) to be grant-financed by the Japan Fund for Poverty Reduction (JFPR). The Project was supposed to finance rehabilitation and reconstruction of the priority public infrastructure in the province. In parallel to Project's preparation, ADB processed reprogramming of the unutilized funds from three TAs (TA 3524-PHI: Rural Road Development; TA 3847-PHI: Strengthening the Anti-Money Laundering Regime, and TA 3966-PHI: Regional Capability Building and Governance for an Expanded Autonomous Region of Muslim Mindanao) to support capacity and institutional building of the Provincial Government, the municipalities and barangays of the Province in disaster risk management (DRM). In December 2006, ADB approved allocation of $3 million JFPR grant for the Project, and reprogramming of $300,000 TA resources. 13. Grant Development Objective and Scope: The Project's objective was to rehabilitate and reconstruct key infrastructure facilities in the province of Southern Leyte that were damaged by the February 2006 landslides, and to provide long-term disaster risk mitigation measures.

Specifically, the Project's objective was supposed to be achieved through (i) rehabilitation of farm-to-market roads and construction of an access road; (ii) upgrading the facilities and services of the Provincial Hospital and the District Hospital; (iii) construction of an elementary school with complete facilities in St. Bernard, and provision of additional classrooms to elementary and secondary schools; and (iv) establishment of the Provincial Disaster Management Center (PDMC). Under (i), the Project's planned outputs were the repair and rehabilitation of 27.1-kilometer existing road networks, and construction of a 1-kilometer access road: 1. Upgrade of Poblacion – Lambunao Road in Malitbog (4.4 km); 2. Upgrade of Union–Dao Road in Bontoc (3.5 km); 3. Upgrade of Poblacion – Himakilo – Libas Road in Bontoc (8.6 km); 4. Upgrade of Benit–Esperanza–Pinut-an Road in (6.1 km); 5. Concreting of Bolodbolod–Catmon Road in St. Bernard (4.5 km); and 6. Construction of Pamigsian Access Road (1 km).

The relevant activities of (i) included sub-grade preparation; regravelling; ditching installation of cross drainage structure; widening of some sections; concreting of pavements for some road networks; construction of reinforced concrete box culvert; and construction of 2-lane 1-span slab bridge for some of the road networks; and barangays' training in operations and maintenance of the constructed roads.

Under (ii), the Project's planned output was provision of diagnostic equipment (laboratory/testing) and improvement of the facilities in the Provincial Hospital and the Anahawan District Hospital.

3 The relevant activities of (ii) included construction of additional rooms; creation of separate out-patient facilities; establishment of a women’s and child care facility; setting up of a laboratory facility; and staff training for operating and maintaining the new equipment.

Under (iii), the Project's planned outputs were construction of (a) a new elementary school with complete facilities including 6 classrooms, toilets, tables and chairs, etc. for in-shift classes of about 400 pupils in the relocation site of barangay Mahayag of the municipality of St. Bernard; and (ii) additional 33 classrooms in 16 elementary and secondary schools in the municipalities of Maasin, Bontoc, San Francisco, Liloan, San Ricardo and of the Province. The relevant activities of (iii) included development of classroom designs to enable using the classrooms as evacuation centers in case of natural disasters, consultations with barangays, testing safety of construction site for the new school in barangay Mahayag, construction of a new school building and 33 additional classrooms, and school staff and barangays' training in DRM and organization of evacuation centers.

Under (iv), the Project's planned output was the establishment of PDMC to perform DRM function in the Province, including immediate response to disasters, and provision of training in and equipment for search and rescue operations. The relevant activities of (iv) included construction of a two-story PDMC building; purchase of rescue, communication, and transport equipment; conduct of training on disaster management and response to Southern Leyte Emergency and Rescue Team (SOLERT) and local government units (LGUs); and regular coordination with local and national disaster coordinating councils (DCCs).

Project's design relevance: The Project's design was based on a comprehensive needs assessment conducted by the Provincial Government in areas directly affected by landslides. This assessment resulted in identification of areas and sectors that needed immediate rehabilitation. Requirements of ADB's policy on disaster and emergency assistance (in terms of the application of a systematic approach to disaster management, including measures on disaster risk prevention) have been considered at the design stage as well resulting in an inclusion of a subcomponent on PDMC establishment.

The Project's primary objective was to provide "hardware" post-disaster support to the Province. The Project also aimed at capacity building of the Province's barangays in utilizing the rehabilitated/reconstructed infrastructure in a sustainable DRM-oriented manner. This "hardware"-focused objective of the Project can be considered appropriate because most of the "software" support (institutional strengthening and capacity building of the Provincial Government and municipalities in DRM) was to be provided through the reprogrammed TA. The Project had two components: Component A - Civil Works, and Component B - Project Management and Coordination. The Civil Works Component consisted of 4 sub-components: A.1 – road rehabilitation/upgrade, A.2 – hospitals' upgrade, A.3 – schools/classroom establishment, and A.4 – PDMC establishment. Component A – Civil Works ($2,557,487)2 A.1 Road rehabilitation/upgrade ($1,264,400): In the result of February 2006 landslides 35 kilometers of provincial, municipal, and barangay roads were damaged, making the road network impassable to traffic for rescue and post-disaster support, and adversely affecting the economic condition of the people in the disaster-hit areas (high-cost access to in- and output markets, increased transportation costs for goods and labor, etc.). The Provincial Government and municipalities could rehabilitate only 8 kilometers of roads. The remaining road network of 27 kilometers in 4 municipalities of the Province, which the Project envisaged to rehabilitate, was found by the Mines and Geosciences Bureau (MGB) of the Department of Environment and Natural Resources to be of critical and strategic importance given vulnerability of these municipalities to natural disasters. Therefore, selection of road rehabilitation as the Project's subcomponent was highly appropriate, especially considering the plan to train barangays in operation and maintenance (O&M) of the upgraded roads to ensure sustainability.

A.2 Hospitals' upgrade ($541,800): There were 4 hospitals in the Province with the Provincial Hospital (located in Maasin city) and Anahawan District Hospital being the two biggest ones. Based on the service

2 Amounts in brackets represent estimated cost of the components or sub-components according to the Grant Assistance Report.

4 area, these two hospitals were supposed to provide healthcare services to about 2/3 of the Province's population. According to the needs assessment conducted by the Provincial Government, these two hospitals, in reality, could cover only some 30% of the Province's population. The said hospitals could not accommodate 6,322 persons that needed medical assistance after the February 2006 landslides as their combined bed-capacity was only 150 beds. In addition to that, their technical capacity to conduct proper blood chemistry tests and define diagnosis through imaging techniques was found to be inadequate. In light of this, inclusion of this sub-component into the Project was appropriate as it served the purpose of increasing the hospitals' patient absorption capacity through construction/upgrading of hospitals' buildings, and improving the quality of medical services through provision of the relevant medical and office equipment.

A.3 School/Classroom establishment ($614,735): According to the needs assessment, 1 elementary school for about 400 pupils had to be built in St. Bernard to accommodate reallocation of the Mahayag elementary school, which MGB found to be located on an unsafe land area. Fifty two school buildings (104 classrooms) located in the areas highly susceptible to landslides in several municipalities had to be abandoned as well due to MGB's advice. In the municipalities of Maasin, Bontoc, Liloan, San Ricardo, San Fransisco, and Hinunangan 16 elementary and secondary schools needed additional classrooms to be able to accommodate 1,395 students affected by the landslides. Therefore, it was appropriate to include the sub- component on school/classroom establishment into the Project, which was supposed to provide more reliable and properly furnished school buildings for the students from the affected areas. These school buildings were also supposed to serve as evacuation centers for barangays in time of disasters.

A.4 Establishment of Provincial Disaster Management Center ($136,552): SOLERT's ability to adequately respond to the February 2006 landslides was constrained by the lack of rescue and communication equipment, and transport means for victims' transportation to hospital and provision of goods and medicines to the affected areas. The Provincial DCC, which is a collegial structure coming together in response to disasters, could not be seen as an adequate framework for institutionalization of the DRM function, which should be performed on a continuous basis. To ensure dedicated and permanent implementation of this function there was a need for a disaster management office at the provincial level, which would coordinate disaster risk reduction efforts in the province, and provide capacity building to the LGUs in the Province. Therefore, it was imperative for the Project to help the Province fill in this gap, primarily through "hardware" support. Specifically, it was envisaged under this sub-component to construct a 2-storey PDMC building to serve as the centre for coordinating and monitoring provincial DRM conducted by the Provincial Disaster Management Office (PDMO) established by the Provincial Governor. Rescue, communication, and transport equipment was also supposed to be provided to PDMO to help it perform its DRM function.

Component B – Project Management and Coordination ($239,830): The Provincial Government through the Office of the Provincial Governor was both the Executing Agency (EA) and Implementing Agency (IA) for the Project. It was the first time that the Provincial Government was in charge of managing donor funds itself. Weak project implementation capacity and unfamiliarity with ADB procurement and disbursement procedures posed a significant challenge to the efficient and effective utilization of the grant funding. There was also a need to ensure inclusiveness and community involvement into project implementation. Therefore, it was appropriate to dedicate a separate component for the purposes of project management and coordination. Specifically, this component was supposed to support overall project management, coordination and reporting, ensure a highly participatory project management, and monitor efficiency and effectiveness of project implementation.

Implementation arrangements: The Provincial Administrator was initially appointed as Project Director and the Provincial Engineer was assigned as Project Manager. The Provincial Government established a separate Project Implementation Unit (PIU) to undertake day-to-day implementation activities, and the Project Technical Advisory Committee (PTAC) to provide the PIU with policy directions needed for effective and efficient project implementation. The PTAC, to be chaired by the Provincial Governor, was supposed to comprise Provincial Treasurer, representatives of Sangguniang Panlalawigan (Provincial Council), Provincial Planning and Development Office, Provincial Systems Administrator’s Office, Office of the Provincial Agriculturist, Provincial Engineer's Office, Provincial Social Welfare and Development Office, Provincial Health Office, Community Affairs Office, Office of the National Economic and Development Authority in Region 8, District of the Department of Education, District of the Department of Public Works and Highways, a non-government organization, and communities.

5

The PIU was staffed by 9 regular staff of the Provincial Government, including the Project Director and Project Manager. There were also 5 PIU consultants hired by the Province and financed out of JFPR: Project Engineer, Project Officer, Monitoring and Evaluation Specialist, Finance and Administrative Officer, and Finance Assistant. There was, however, no dedicated full-time procurement officer recruited despite the contract-intensive nature of the Project, and weak procurement capacity of the Provincial Government. Given weak capacity, it was envisaged that ADB would hire one staff consultant during pre-implementation stage to prepare the Project's implementation manual. Another ADB staff consultant was supposed to be engaged during the implementation phase to monitor implementation progress, and assist in reporting, procurement, disbursement, and overall project management. The project was supposed to be implemented in February 2007 - July 2009, or in 2.5 years.

Given the obviously weak capacity of the Provincial Government in implementing ADB-funded projects and the need to ensure efficiency of project implementation, selection of a temporary PIU (i.e. only for project implementation time) as the Project's implementation mechanism was justified. The PIU arrangement was organized in such a way to ensure transfer of knowledge from ADB and project consultants to the Provincial Government's staff (e.g., initially the PIU was to be physically located in the Office of the Provincial Governor, and later in the PDMC building together with PDMO staff). PTAC, as the Project's oversight body, was supposed to ensure that PIU coordinates its activities with all relevant stake-holders and decisions on the Project are taken collectively to ensure inclusiveness and ownership of the Project.

Overall, implementation arrangements can be considered appropriate, though procurement function was left somewhat uncovered at the Project design stage due to the expectation that it could be performed by the Project's Finance and Administrative Officer with support of the ADB project implementation consultant.

Stakeholder participation: From April to October 2006, series of consultation meetings with the affected barangays were conducted to determine the appropriate response to the occurred disaster and prioritize the rehabilitation needs. The stakeholder consultation process enabled ADB to verify the realism of the needs assessment study, which was conducted by the Provincial Government and was supposed to critically inform the preparation of the proposal for JFPR funding. For the purposes of consultation and coordination among the government agencies, a Technical Working Group (TWG), comprising of representatives of the Provincial Government and key agencies of the national government, was established to help facilitate the preparation of the project proposal. Extensive consultation with development partners active in the Province (e.g., GTZ) or in DRM in the country (e.g. UNDP) were conducted during project preparation in Manila and in Southern Leyte. Therefore, stakeholder participation in project formulation can be considered as appropriate. 14. Key Performance Accomplish- Indicators ments rating Evaluation of each Indicator: (HS,S,PS,U3) Of the envisaged 28.1 kilometers of road rehabilitation, it was planned to rehabilitate 27.1 kilometers of farm-to-market roads, and to construct 1 kilometer of access road in barangay Pamigsian.

Of the planned 27.1 kilometers of farm-to-market roads, 24.88 kilometers or 91.8% were rehabilitated. Construction of 1 kilometer access road in barangay Pamigsian was dropped from the Project i) 28.1 kilometers of as the municipality of Bontoc decided in favor of an alternative rehabilitated and solution that was funded out of the ADB-supported Infrastructure for new farm-to- S Rural Productivity Enhancement Sector (InfRES) Project (L1772- market and access PHI). roads. Accomplishment under this indicator is considered satisfactory as (i) the reduction of scope was objectively caused by higher-than- expected road rehabilitation contract costs, and (ii) availability of alternative solution and funding for the construction of an access road to the new location of barangay Pamigsian (to be completed by end 2009).

3 HS=Highly Satisfactory; S=Satisfactory; PS=Partly Satisfactory; U=Unsuccessful

6 The Project initially envisaged (i) rehabilitation of the building of Provincial Hospital, (ii) construction of an outpatient one-storey building with women-child facilities for Anahawan District Hospital, (iii) procurement of laboratory, diagnostic, and office equipment for both hospitals, and (iv) conduction of trainings for the staff of the two hospitals on the use of this new equipment.

Upgrading of Anahawan District Hospital was fully implemented:  1 out-patient one-storey building with 8 rooms was built;  44 units of medical equipment (including 1 mobile X-ray machine), 1 laboratory equipment (blood chemistry analyzer), 9 computers, 1 printer, 1 LCD projector, 43 units ii) Improved medical of office appliances, and one power transformer were services and procured and are functional; and facilities in the  Staff trained on the use of procured equipment. Provincial PS Hospital of Project's intentions in the case of Provincial Hospital were not fully Southern Leyte realized: and Anahawan  rehabilitation of the building of Provincial Hospital was District Hospital. dropped due to change in the Provincial Government's intention;  only one laboratory equipment (blood chemistry analyzer) and two diagnostic equipment (one mobile and one stationary X-ray machine) procured; but  effectively only the mobile X-ray machine is used by the Provincial Hospital (blood chemistry analyzer was transferred from the Provincial Hospital to Anahawan District Hospital, and the stationary X-ray machine is yet to become functional).

Given this, accomplishment under this indicator is considered partly satisfactory. As the current location of the Mahayag Elementary School in the municipality of St. Bernard was found by MGB to be unsafe, the Project envisaged construction of a new 6-classroom (for about 400 pupils) Mahayag Elementary School in a safe location. The new school was also supposed to be provided with classroom desks, teacher tables, and chairs. However, construction of the new school did not materialize: it was decided to drop the construction of the new Mahayag Elementary School from the Project due to the long time required to solve the land acquisition problem. The Mahayag Elementary School with its 400 pupils is still located in the unsafe iii) One (1) area. elementary school with However, the Project successfully completed construction and PS complete facilities equipment of 33 additional classrooms in 16 elementary and in the municipality secondary schools in Maasin, Bontoc, San Fransisco, Lilolan, San of St. Bernard. Ricardo and Hinunungan of Southern Leyte. These additional facilities significantly helped these schools accommodate pupils from the families that were reallocated to other barangays after the February 2006 land-slides. Moreover, these new class-room building have been designed to also serve as evacuation centers in case of disasters. In addition to that, DRM and evacuation center trainings were conducted in all schools for the school staff and barangay representatives.

This indicator alone cannot reflect the Project's achievements in upgrading the Province's school facilities, where the total number of

7 class-rooms that were supposed to be built and equipped was 39. Of this number only 15% (or 6 class-rooms) was not achieved.

Therefore, partly satisfactory rating is given on this indicator. Two-storey PDMC building was constructed and is operational iv) One (1) functional since April 2008. Transportation, rescue and communication, and provincial disaster office equipment was procured as well. Basic Course on Rope management S Rescue Skills was conducted in September 2008 for SOLERT center in members and PDMO staff. Southern Leyte. Project's intentions related to this indicator have fully materialized resulting in satisfactory rating. 15. Evaluation of Inputs: Project's inputs comprised (i) civil works (rehabilitation of 5 roads, and construction of 33 class-rooms, 1 outpatient hospital building, and a PDMC building); (ii) goods (school furniture for constructed school facilities; medical/office equipment for the provincial and Anahawan district hospitals, and transport/rescue/office equipment for PDMC); (iv) capacity building (trainings on road O&M, disaster management and rescue, evacuation center, and medical equipment use); (v) consultancy for project implementation (PIU consultants, feasibility study); and support for project implementation (honoraria for project staff assigned by the Provincial Government to the PIU, PIU coordination expenses and transportation costs, etc.).

During implementation (a) construction of new elementary school in barangay Mahayag, (b) construction of 1- kilometer access road to new location of barangay Pamigsian, and (c) rehabilitation of the Provincial Hospital were dropped from the Project. As the result, major change in scope was processed in March 2009.

Dropping of items (a)-(c) from the Project led to, as Table 1 below shows, some $245,000 (8%) of unutilized grant funding. As the same table shows, the only expenditure category that was slightly over-spent is the consultancy category. This was due to the one month extension of PIU consultants needed to properly complete project reporting and on-going civil works. Despite the fact that items (a)-(c) above had been dropped, civil works category was underspent by 5%. Construction of one classroom has cost on average $15,200 vs. the budgeted ~$14,600. On average, gravel upgrading and concreting of 1 kilometer of road have cost around $49,000 (vs. ~$28,000 budgeted) and $108,000 (vs. $100,000 budgeted), respectively. [For comparison purposes: in InfRES project the cost of gravel upgrading of rural roads lies within the range of $63,000-$84,000. The cost of rural road concreting lies between $84,000 and $126,000. Amounts were calculated assuming Bangko Sentral ng Pilipinas' average exchange rate of Php47.7/$ for January-November 2009.] Higher-than-budgeted actual costs of road upgrading is due to the change in design, additional works and materials needed to complete the roads, and appreciation of Peso against $ (from ~Php50/$ in 2006 at Project's preparation to the average of Php44.5/$ and Php47.7 in 2008 and 2007, respectively, when road rehabilitation was actually taking place).

Table 1. Planned vs. actual project cost (by expenditure category; $) March 2009 % of Category Appraisal Actual Reallocation absorption (1) (2) (4) (3) (4)/(3) 1. Civil Works 2,177,393 2,217,927 2,116,880 95% 2. Goods 363,154 493,920 398,716 81% 3. Capacity Building 28,780 23,590 21,918 93% 4. Consulting Services 158,140 156,837 158,867 101% 5. Project 69,850 77,811 58,451 Management/Coordination 75% 6. Contingencies 202,683 29,915 --- 95% Total 3,000,000 3,000,000 2,754,834 92%

Works under the Project were procured on the basis of National Competitive Bidding with an abbreviated bidding period to take into account the disaster response nature of the Project. PDMC building construction

8 contract was procured using direct contracting method. Procurement of goods was done using shopping as the procurement method. Project consultants were hired using single source selection method due to the small amounts of contracts, lack of interest of consultants in working in the Province, and time pressure to fast-track project implementation.

Performance of Executing/Implementing Agency: By March 2007 (two months after effectiveness) the Project Implementation Unit (PIU) comprising staff of the Provincial Government and locally recruited consultants was fully operational. Provincial Administrator and Provincial Engineer were assigned the responsibilities of Project Director and Project Manager, respectively. PTAC was also established through the issuance of an executive order describing its functions, composition, roles, and working arrangements. PTAC was supposed to be chaired by the Provincial Governor; however this was rarely the case due to Provincial Governor's busy schedule. Separate Bids and Awards Committee (BAC) was established by the Provincial Governor to avoid delays in procurement decision making. This separate BAC, however, never became functional. In April 2007 Project Implementation Manual developed with assistance of ADB consultant was adopted providing the necessary, though not sufficient, description of the implementation process. At the instruction of the Provincial Government the Provincial Engineering Office (PEO) engaged the services of an engineering firm to prepare engineering surveys for the 5 rural roads to be rehabilitated under the Project. To speed up preparation of detailed engineering designs for road rehabilitation by the PIU, the Provincial Government deployed additional engineers and an architect from PEO to support the PIU in this task. Nevertheless, the detailed engineering design preparation was delayed as the 3 engineers working on the roads' designs were also addressing engineering and procurement issues pertaining to classroom building construction and hospitals' upgrade. After the May 2007 elections, it took some 3 months for the new Provincial Government to get acquainted with the Project. Provincial Planning and Development Coordinator was appointed as the new Project Director. The Provincial Engineer remained Project Manager contributing to project implementation continuity. New Provincial Government's BAC was established. Due to lack of detailed description of the procurement process and absence of dedicated procurement specialist, the PIU in several instances could not properly coordinate and agree on the technical specifications of the procured civil works contracts and goods with the end-beneficiaries. This was particularly the case with the stationary X-ray machine and the proposed spillway of the Poblacion-Lambonao road, where the chief of the Provincial Hospital and Municipal Engineer of Malitbog Municipality, respectively, were not adequately coordinated with on the technical specifics of the to-be-procured equipment and construction. In the case of the stationary X-ray machine, this resulted in the objection of the Provincial Hospital to accept it. After the Project's closure in end July 2009 the Provincial Government ensured staff continuity that enabled proper finalization of the remaining Project's transactions such liquidation of the imprest account's advances and organization of the audit of 2009 financial statement of the Project. Specifically, the Finance Officer's activities were extended till end September 2009. Project Director and Project Manager were tasked to finalize all project activities before they could disengage from the Project. The Provincial Government and the PIU satisfactorily adhered to the provisions of the JFPR Letter of Agreement. Regular project performance reports were timely submitted to ADB. PIU staff and consultants regularly visited project sites to ensure that quality and timeliness of the civil works contracts, though not always effective as can be seen from Table 2 below showing significant delays, especially in completion school facilities' construction. PIU staff have been always accurate and timely in their interaction with ADB.

This was the first time for the Provincial Government to act as EA/IA that was in charge of managing such significant project funding. As shown above the Provincial Government had ensured timely setting up of all project implementation structure and adoption of relevant executive orders. It also adequately provided financial and staff resources to support the Project, which was always on the priority agenda of the Provincial Government. While there was certainly space for better performance as shown in some specific examples above, overall, the Provincial Government performed satisfactorily as EA/IA.

ADB Performance: Given the weak project management capacity of the Provincial Government, ADB has provided extensive support both at project preparation and implementation. At the project development stage, ADB staff have visited the Province in April and October 2006. ADB staff consultant visited the province in July 2006 to review and validate the needs assessment exercise undertaken by the Provincial Government. During project implementation in 2007-2008 total of 4 ADB consultants, including TA consultants on DRM and Civil

9 Works Inspection and Monitoring Consultant, were engaged with project supervision and support to PIU. These ADB consultants, in addition to 6 ADB supervision missions, conducted monthly field visits to the Province providing hands-on support on various aspects project execution.

To strengthen PIU capacity, Finance and Administration Officer and Assistant Provincial Engineer, and Project Manager and Finance Assistant participated at ADB's Country Project Implementation and Administration workshops in 2007 and 2008, respectively. During project life there were three ADB Project Officers (PO) supervising the project. PhCO was the responsible Project Management Unit. Transfer of project supervision from one PO to the other was conducted in a way to ensure continuity of the supervision process: e.g. joint missions to the province by the out-going and in-coming PO. Provincial Government's Project Completion Report mentions that "project reports, engineering designs, bid documents, bids evaluation reports, and progress billings were regularly reviewed and immediately acted upon by the ADB".

Performance of ADB is rated satisfactory.

Performance of consultants: In the first quarter of 2008 ADB recommended to the Provincial Government to restructure the PIU given the Project's overall poor performance: procurement and execution of contracts under Batch 1 of the school buildings was severely behind schedule; preparation of the bid evaluation report for Batch 2 of the school buildings was taking months; drafting of the detailed engineering design for the rural roads took almost a year; and training programs were not developed. As a result, by 1 July 2008 new Project Engineer, M&E Officer, Project Officer, and Finance and Administrative Officer were engaged. The new set of PIU consultants had a challenging task of helping the Project catch up with its implementation schedule. It was the good performance of the new set of PIU consultants that contributed, to a significant extent, to timely completion of the Project that could still generate most of the agreed project outputs. Continuous support of ADB staff consultants recruited specifically for the purposes of facilitating project implementation on the ground was also a decisive factor in timely delivery of project outputs.

Overall, performance of PIU consultants is rated partly satisfactory.

Performance of Contractors and Suppliers: As can be seen from Table 2 below the contractors that worked on the rehabilitation of the five rural roads performed generally satisfactorily: for instance, the contractor for the concreting of Bolodbolod-Catmon Road, and rehabilitation of Union-Dao Road and Benit-Esperanza roads was either on time or ahead of agreed completion dates. Primary factor for such timely performance was the efforts of the contractor to ensure adequate provision of equipment and manpower, and guaranteed timely delivery of construction materials to the construction site. Only in the case of the Poblacion-Lambonao Road there was a delay of 2.5 months. The contractor for the construction of the PDMC building performed well: just after three months of the construction start the building had been declared substantially complete.

Table 2. Timeliness and efficiency of selected civil works contracts % of Actual minus deviation planned Subproject Title/Description from original completion contract (months) amount ROADS Concreting of Bolodbolod-Catmon Road -1 9 Rehab of Poblacion-Lambonao Road 2.5 5 Rehab of Poblacion-Himakilo-Libas Road 0.3 4 Rehab of Union-Dao Road 0 0 Rehab of Benit-Esperanza-Pinutan Road -1.5 10 SCHOOLS Construction of Lanao ES (2-classroom bldg) 5 Construction of Bactul II PS (2-classroom bldg.) 5 0 Construction of Malapoc Norte ES (2-c/rm bldg) 5 Construction of Sn Rafael NHS (3-classrm bldg) 5.5 0

10 Construction of Tigbawan IS (2-classroom bldg) 5 0 Construction of Timba ES (2-classroom bldg) 5 Construction of Bahay ES (2-classroom bldg) 5 0 Construction of Lanao PS (2-classroom bldg) 5.5 Construction of Sn Vicente ES (2-classroom bldg) 0.5 1.8 Const’n of Libas National HS (2-classroom bldg) 0.5 Construction of Bongbong ES (2-classroom bldg) 3 1.4 Construction of Esperanza ES (2-classroom bldg) 1 Construction of Nava NHS (2-classroom bldg) 3 0 Const’n of Hinunangan NHS (2-classroom bldg) 0.5 Construction of Olisihan ES(2-classroom bldg) 3 1.9 Construction of Lawgawan ES (2-classroom bldg) 3 PROVINCIAL DISASTER MANAGEMENT CENTER Construction of PDMC building (2-storey bldg) 0 0 ANAHAWAN DISTRICT HOSPITAL Construction of 1-storey out-patient building 4.5 1.1

Construction of the classrooms and Anahawan hospital's out-patient building posed serious concern to project implementation. Table 2 above shows that, on the average, the school buildings were completed 3-4 months from the expected completion dates. In case of the construction of Anahawan District Hospital's out-patient building the delay was 4.5 months. In the result the Project imposed liquidated damages on the contractor of Batch 2&3 classrooms and Anahawan District Hospital building. At the PTAC meeting the possibility of blacklisting this contractor by DPWH Southern Leyte Division (primary source of civil works contracts in the province) was discussed; this apparently has encouraged the contractor to take relevant actions for fast completion of the delayed civil works.

The suppliers that provided the required equipment under the Project performed well with the exception of the suppliers for the fabrication and delivery of school furniture for Batch 2&3 school buildings, and stationary X- ray machine for the Provincial Hospital. Full delivery to the nine school sites was completed 4 months from the agreed completion date of March 2009. The stationary X-ray machine delivered by the supplier to the Provincial Hospital has not become functional yet partly also due to the failure of the supplier (despite several written requests by the PIU) to send technicians for the calibration and testing of the X-ray machine. Overall, performance of the suppliers and contractors is rated partly satisfactory.

11 16. Evaluation of Outputs and Results:

Component A – Civil Works

Sub-component A.1 – Road rehabilitation/upgrade: Of the envisaged 28.1 kilometers of road rehabilitation, the Project intended to rehabilitate 27.1 kilometers of farm-to-market roads, and to construct 1 kilometer of access road. Out of planned 27.1 kilometers of farm-to-market roads, 24.88 kilometers (91.8%) were rehabilitated: 1. 4.02 kilometers (vs. planned 4.5 kilometers) of Bolodbolod-Catmon Road in St. Bernard concreted; 2. 3.95 kilometers (vs. planned 4.4 kilometers) of Poblacion-Lambonao Road in Malitbog upgraded; 3. 8.2 kilometers (vs. planned 8.6 kilometers) of Poblacion-Himakilo-Libas Road in Bontoc upgraded; 4. 3.32 kilometers (vs. planned 3.5 kilometers) of Union-Dao Road in Bontoc upgraded; and 5. 5.38 kilometers (vs. planned 6.1 kilometers) of Benit-Esperanza-Pinutan Road in San Ricardo upgraded.

The segment of road 1 required concreting since gravelling, though less expensive, was not considered feasible. The upgrading of roads 2-5 involved rehabilitation of existing dirt road segments into an all-weather gravelled road. This reduction in scope of road rehabilitation was due to the changed road rehabilitation designs that reflected the most recent rehabilitation needs in the selected project sites. In March 2009 the Municipal Engineer of Bontoc communicated to PIU and ADB his concern about several segments of the Union-Dao road being narrower than required by the technical specifications of the contract. Engineering District of the Department of Public Works and Highways, upon request of the PIU, confirmed that some segments of the road were, in fact, not as wide as required by the road design. As the result, required corrective measures were completed by the contractor in July 2009 before the Project's closure. To increase sustainability of the Project's investments, residents of 25 barangays directly benefiting from the 5 roads were trained by the Provincial Office of the Department of Agrarian Reform in operations and maintenance of the rehabilitated farm-to-market roads. All 5 roads have been accepted by and turned over to the Provincial Government. O&M of the roads would be a joint responsibility of the barangays, municpalities, and the Provincial Government depending on the scope of O&M works. Construction of 1 kilometer of access road to connect the old site of barangay Pamigsian in Bontoc with its new location (in the result of reallocation after the land-slide) was dropped from the Project. This access road was supposed to connect new location of barangay Pamigsian with the rest of the municipality of Bontoc through old Pamigsian. However, later the municipality of Bontoc decided to go for construction of an access road that would directly connect the municipality with the new location of barangay Pamigsian. Construction of this direct access road was proposed to the Department of Agriculture (DA) for funding under the InfRES Project. The construction of this road commenced in 2008 and is expected to be completed by the end of this year. Therefore, construction of 1 kilometer of access road between the old and new locations of barangay Pamigsian was dropped from the Project to avoid duplication between the Project and InfRES will little adverse affect on the beneficiaries. Additionally, this allowed the Project to accommodate the increased cost of rehabilitation of the other 5 road mentioned above. Total number of direct beneficiaries of the Project's road rehabilitation is estimated at around 20,000 individuals (~ 4,000 households). The beneficiaries reported that road rehabilitation provided them with short- term employment opportunities as some of the members of the communities were hired by the contractors as construction workers for up to 6 months. This helped them augment their regular income from agricultural activities. The Project also fostered communities' economy: some barangay residents could provide selected road rehabilitation inputs to the contractors, and others were engaged in selling goods and food to the construction workers. However, more importantly, residents noted a significant improvement in the level of accessibility measured in terms of number of trips made and average travel time. In the case of Union-Dao Road in Bontoc and Poblacion-Lambonao Road in Malitbog, it is reported that the number of habal-habal (improvised single motorcycles for passenger and good transportation within and between barangays) trips has increased by at least 200 percent, and the average travel time has been reduced by 30-50%. Beneficiaries of the other rural roads also reported a major reduction in average travel time improving their access to the basic services available in the nearest urban centers. Implementation of this sub-component can be considered satisfactory.

Sub-component A.1 – Hospitals' Upgrade: Intentions of the Provincial Government in respect with the

12 rehabilitation of the Provincial Hospital have changed several times during project implementation. In July 2007 it was indicated that, instead of hospital rehabilitation, the Project needs to consider financing construction of a separate building in front of the existing Provincial Hospital. In July 2008, the provincial governor informed ADB that the poor structural condition of the existing Provincial Hospital does not warrant its rehabilitation. Therefore, the intention became to construct a new Provincial Hospital in barangay Dongon in Maasin City. The Project was considered to provide funding for these purposes. However, in September 2008 the Provincial Governor informed that instead of rehabilitation/construction, the Project should consider acquisition of additional medical equipment for the Provincial Hospital. Therefore, the Project's plan to rehabilitate the Provincial Hospital building did not materialize leaving its patient absorption capacity insufficient, especially in case of disasters. Though with a 4.5-month delay, 1-storey out-patient building was constructed for the Anahawan District Hospital with the Project's funding. This building, which was accepted and turned over to the Anahawan District Hospita's administration on 15 May 2009, helped move out-patient services from the main building of the hospital thus increasing its in-patient absorption capacity, particularly critical in disaster times. Both hospitals' upgrade also included procurement of medical and office equipment to enhance their service capacity. The procurement of equipment was carried out in two phases. At the first phase, imaging equipment (mobile and stationary X-ray machines for the Provincial Hospital, and a mobile X-ray machine and blood chemistry analyzer for the Anahawan District Hospital) was procured. This equipment is currently functioning in the two hospitals, except for the stationary X-ray machine at the Provincial Hospital delivered in August 2008. Insufficient consultations of the PIU with the Provincial Hospital in the process of procurement of the X- ray machine led to continuous disagreements between the Provincial Hospital, PIU, and the supplier after its delivery to the delivery of the X-ray machine. There were a 380 volt step-up transformer, TV system components for fluoroscopy procedures, and a chest cassette stand for chest X-ray procedures additionally obtained to make the X-ray machine functional. However, calibration and testing of the X-ray machine has not taken place yet due to (i) concern of the Provincial Hospital of being given a possibly outdated X-ray machine, and (ii) reluctance of the supplier, despite numerous request of the PIU, to send their technicians again to the Provincial Hospital in light of the previous resistance of the Provincial Hospital to grant the supplier's technicians access to the X-ray machine. During the ADB's Implementation Completion Memorandum mission to the province on 10-13 November 2009 it was agreed with the Governor that he would communicate with the supplier to send their technicians to the Provincial Hospital as soon as possible to assemble and test the X-ray machine. If, in the result of the testing, the X-ray machine remains unfunctional, further necessary actions would be undertaken by the Provincial Government in respect with the supplier in accordance with the established practice and rules. The second phase involved procurement of additional medical, computer, and office equipment for the Provincial Hospital and Anahawan District Hospital in lieu of rehabilitation of the Provincial Hospital's building. While Anahawan District Hospital received the requested additional medical and computer equipment by July 2009, procurement of equipment for the Provincial Hospital did not materialize. This occurred as the results of the procurement of medical equipment were not endorsed by the Provincial Hospital, which opined that equipment specifications submitted by the prospective supplier were inconsistent with their preferred specifications.

In light of this development, only the patients served at Anahawah District Hospital could benefit from the procured medical equipment. For instance, the blood chemistry analyzer at the Anahawan District Hospital has already benefited 986 in- and out-patients living in the Pacific area of the Province for such procedures as tests of fasting blood sugar (FBS), T-cholesterol, triglyceride, etc. The mobile X-ray machine has been used to help 861 in- and out-patients, 62% of which benefited from its chest X-ray procedures. Importantly enough, service fees collected for these procedures at the Anahawan District Hospital are lower than those charged by the private hospitals and clinics. This has enhanced access of the beneficiaries to the services of the Anahawan district hospital. Unfortunately, this cannot be said in the case of the Provincial Hospital, where only the mobile X-ray machine is used.

Overall, implementation of this subcomponent is rated partly satisfactory, as the service capacity of the Provincial Hospital was only marginally improved by the Project. Sub-component A.3 – School/Classroom establishment: The Project financed construction of additional 33 classrooms or 16 school buildings in the secondary and elementary schools in Maasin City, and municipalities of Liloan, Malitbog, Bontoc, Hinunangan, San Francisco, San Ricardo, and Sogod. All newly built classrooms were fully equipped as well: 1710 classroom desks, 33 teachers tables and 33 teachers'

13 chairs were procured and installed. However, delivery of furniture for the Lanao, Olisihan, and Lawgawan primary schools and Hinunangan National High School was delayed till end July 2009 despite the school year start on 1 June 2009. The class-room buildings were accepted by the Department of Education and turned over to the schools' administrations. This sub-component has also provided capacity building to barangays in order to enhance their capacity to mitigate and respond to natural disasters such as landslides, flooding, and earthquakes. Specifically, the objectives of the capacity building were to (i) understand the basic DRM concepts, (ii) raise awareness on the different DRM aspects in the local, national, and global contexts, (iii) learn the basic DRM skills, (iv) know the importance of a community-level disaster response systems, (v) develop an evacuation management plan for the community, and (vi) come up with an agreement on school building/evacuation center security and maintenance. 16 trainings were conducted for barangays in each of the school buildings built under the Project. The training program resulted in initiating the establishment of a community-based disaster response team to be in-charge of the execution of the evacuation management plan. Through the training the evacuation management plan, which outlines the communities’ strategic actions based on their early warning system, was prepared. Finally, required actions were agreed for the maintenance and safe keeping of the constructed school buildings/evacuation centers. Construction of school buildings in different areas of the Province also produced benefits to the host barangays and communities. Aside from the employment opportunities for barangay residents, the construction of school buildings has contributed significantly to the improvement in the student-classroom ratio in schools. Prior to the construction of the Project's school buildings, the average classroom-student ratio for the 16 schools was 1:38, or 1 classroom for 38 students. Once the new school buildings became available, the ratio has improved to 1:28, what is likely to lead to better academic performance of the students. School staff appreciated the improved physical environment for learning and teaching – spacious and well-lighted class-rooms together with water-supplied comfort rooms. In total, the Project-funded school buildings are being used by 609 elementary pupils and 573 high school students. This subcomponent originally also envisaged construction and equipment of a new 6-classroom elementary school in barangay Mahayag of St. Bernard municipality to accommodate about 400 pupils. This new school was supposed to be built on a geologically safe land lot as the area, on which the current Mahayag Elementary School is located, was found unsafe by MGB. This Project's intention, however, did not materialize due to the land acquisition problem. The land lot, which was identified by MGB as safe and selected by the St. Bernard municipality for the construction of the new school, was owned by a deceased beneficiary of the Comprehensive Agrarian Reform Program (CARP). According to the guidelines of the Department of Agrarian Reform (DAR), the Provincial Agrarian Reform Adjudicator (PARAD) was supposed to process cancellation of a CARP-issued land title. After that DAR needed to issue a Deed of Transfer (to be signed by DAR Secretary) on the land lot in favor of the Department of Education. Provincial Office of DAR applied to PARAD only in May 2008 as, according to Provincial Office of DAR, this was the first time for them to process CARP-issued land title cancellation. Given the expectation that further processing of the land title cancellation would require significant amount of time, which the Project did not have, in September 2008 PTAC decided to drop construction of the new Mahayag Elementary School from the Project. As the result, Mahayag Elementary School still remains located in an unsafe area. According to the latest information, the land lot has been finally returned to DAR, which intends to provide it for school construction purposes depending upon availability of funding. This sub-component's implementation is rated partly satisfactory, as it could not deliver a new and disaster- safe elementary school to the beneficiaries in the municipality of St. Bernard that was mostly hit by the February 2006 landslides. Sub-component A.4 – Establishment of Provincial Disaster Management Center: The Project has provided the basic inputs necessary for functioning of PDMO, which was created by the Executive Oder of the Provincial Governor (No. 04, series of 2007). The Project financed construction of a two-storey building, in which PDMO is located now, and provision of the rescue, communication and transport equipment essential for PDMO's operations. Specifically, the Project funded procurement of one 4-wheel drive pick-up van, two all terrain motor bikes, various search and rescue equipment, and radio communication units. The constructed building and the procured equipment were formally turned over to the PDMO in August 2009. This subcomponent has also provided training to the SOLERT members and PDMO staff on the use of rescue

14 equipment procured under the Project. PDMO is currently organizationally located within the Office of the Provincial Governor. It is headed by a Provincial Disaster Management Officer, who is supposed to be supported by 5 staff. However, of the 3 staff currently working at PDMO 2 have been seconded to it from other offices of the Provincial Government. Such arrangement poses risk to PDMO's sustainability. DRM capacity building activities, and SOLERT and PDMO institutional building efforts of the reprogrammed TA have critically supported implementation of this component and contributed to its sustainability. For instance, PDMO staff – using the equipment and infrastructure provided by the Project and PDMO Operations Manual and training tools developed under TA – are currently conducting disaster management trainings in the barangays of Southern Leyte and help them develop Community-Based Risk Maps and Contingency Plans. So far, 18 barangays have been covered by the training, which is expected to cover all Province's barangays by end June 2010. In light of the above mentioned, overall implementation under this sub-component is rated satisfactory. Overall, implementation of Component A – Civil Works can be rated satisfactory as the Project could deliver most of the expected outputs without the need for extension.

Component B – Project Management and Coordination: Overall, the designed project implementation structure proved functional and could deliver most of the expected outputs of the Project despite the significant implementation delay in 2007. PIU management (through the Director and Project Manager) together with the "second generation" PIU consultants who came on-board in July 2008 made up an effective project team. Regular project performance reports have been submitted to ADB on time. Audits of the Project's financial statements have not found any significant issues on financial management and adherence to ADB procedures. PIU ensured that after the physical completion of the Project, an inventory of all procured equipment under this component was undertaken and it was subsequently turned over to the Provincial Government. However, in several instances insufficient coordination with the Project's beneficiaries (like with Provincial Hospital in the case of the stationary X-ray machine) and LGUs (like with Municipality of Malitbog in the case of the spillway design for the road Poblacion-Lambonao) resulted in less effective and efficient project implementation. Overall, implementation of this component is rated satisfactory.

17. Overall Assessment and Rating (HS,S,PS,U):

Criterion Description Rating 1. Relevance The Project provided an unplanned quick, but, at the same, systematic Relevant response to the natural disaster at the provincial level of the country, which is highly prone to natural calamities. The Project is in-line with Mid-term Philippines Development Plan (MTPDP) for 2004-2010. Specifically, it directly contributed to MTPDP's goals related to agribusiness development, education, natural resources and environment protection. The Project was largely consistent with ADB's Country Partnership Strategy (CPS) 2005- 2007: it directly contributed to the two CPS pillars of private investment facilitation (through road infrastructure rehabilitation), and MDG attainment (through enhancing service capacity of provincial health facilities). The Project's design was relevant as it suitably combined the strengths of the reprogrammed TA and JFPR grant to provide systematic post-disaster support to the Pprovince. 2. Almost all project deliverables, as modified during implementation, have Effective Effectiveness been achieved. The only insufficiently achieved result is the enhancement of capacity of the Provincial Hospital through provision of medical equipment (only the mobile X-ray machine is functional). If compared to the original project deliverables, two major outputs have not been delivered: construction of the new Mahayag Elementary School for 400 pupils in

15 the safe location, and rehabilitation of the Provincial Hospital building. 3. Efficiency Except for the Provincial Hospital service capacity enhancement, all modified Efficient outputs of the Project were delivered by the closing date, which was never extended. Though about 8.5% of the grant was spent on project management and coordination, such high proportion is justified by the need to ensure efficiency in a weak implementation capacity environment and timeliness in a disaster response project. Civil works contracts exceeded the projected budget given the changes in designs, need for additional works and materials to complete the contracts, and Philippines Peso appreciation against $ after grant approval. Overall, conversion of the Project's resources into outputs was economically efficient. 4. Roads, school buildings, Anahawan District Hospital's out-patient building, Less likely Sustainability PDMC building, as well as all procured equipment were accepted and turned over to the relevant authorities, which assured ADB of their intention to provide the necessary O&M funding. There were, however, reports on the possible lack of funding for, e.g., adequate and timely provision of inputs or spare parts for the procured medical equipment in the Anahawan District Hospital. In several schools the problem of insufficiency of O&M funds was also reported to be the major risk to sustainability of the Project's school investments. PDMO has been organizationally placed under the Office of the Provincial Governor and Provincial Disaster Management Officer has been appointed. However, its institutionalization remains incomplete as it still lacks comprehensive terms of reference, where its roles, responsibilities, composition, relationship with other provincial offices, and budget would be clearly defined. Significant capacity building, which should be backed by budget allocations, is still required for PDMO in disaster risk mitigation aspects. OVERALL ASSESSMENT Success- ful

18. Major Lessons Learned: Procurement process and capacity should have been paid adequate attention. Project Implementation Manual did not provide for a detailed description of the procurement process, which should have reflected ADB procurement guidelines through the light of the Provincial Government and Project's institutional arrangements. The problem with the acceptance of the stationary X-ray machine by the Provincial Hospital, and with the spillway of the Poblacion-Lambonao road is rooted in the absence of clear and detailed description of the consultations and agreements between the PIU and end-users at each stage of the procurement process. This Project can be considered as procurement-intensive given the significant amount of rather small contracts that were supposed to be concluded. Nevertheless, procurement function was not allocated a dedicated staff at the PIU (either as consultant or Provincial Government staff): procurement work was largely done by the Finance and Administrative Officer with support of the Finance Assistant. This resulted in, e.g., delayed submission of bid evaluation reports for ADB's review; and the need for ADB to recruit in 2007 a Civil Works Inspection and Monitoring Consultant in light of some concerns regarding the efficiency of procurement for the construction of the school buildings. Project's oversight structure should have been designed in a more practical way to reflect local specifics. Though PTAC conducted regular monthly meetings to assess project implementation and find solutions to the emerging issues, it happened to become a consultative and information sharing forum of peers. Provincial Governor, due to his busy schedule, could not attend PTAC meetings. However, PTAC meetings' minutes with the recommended solutions could have been provided to the Provincial Governor for his executive decision, and accountability of those responsible for implementation. A good example of PTAC's insufficiency in problem solving is the issue with stationary X-ray machine procured for the Provincial Hospital. PTAC's composition was also less conducive to its efficiency, as only one mayor of the 5 municipalities benefiting from the Project was its member.

16

Roles and responsibilities of each project stakeholder should have been explicitly defined. Project Implementation Manual (PIM) did not provide for the description of the roles and responsibilities of such project stakeholders as the offices of municipal mayors and municipal engineers. The same concerns administrations of the Provincial Hospital and Anahawan District Hospital, and management and Parents and Teachers Associations of the beneficiary schools. For instance, neither of the offices of municipal mayors had a focal point tracking developments of the Project in their respective municipalities to timely inform the mayors of any emerging issues. In several cases this led to misunderstandings and complaints, as, e.g., in the case of the Municipal Engineer of Bontoc, who raised the issue of some segments of the upgraded Union-Dao road to be narrower than designed. As the later examination of this concern showed in most instances the "under-width" parts of the road where caused by the fact that the available right-of-way was narrower than the suggested road design. The Bontoc Municipality facilitated PIU's dialogue with the land owners, who finally agreed to costless removal of some coconut trees that were in the way of road construction. If Municipal Engineer's Office had been better involved into engineering design and construction administration, the risk of such misunderstanding would have been significantly lower. PIM was not reviewed for its relevance or incorporation of lessons learned during project implementation. PIM was seen as a rather static document, which it should not be. Alternative solutions to deliver important planned project results should have been pro-actively sought. One of the initially planned critical deliverable of the Project was construction of a new 400-pupil elementary school on a safe land lot in barangay Mahayag in St. Bernard municipality, which was most severely hit by the February 2006 landslides. Due to delays in resolving the land title issue it was decided to drop this construction from the Project. However, an alternative solution could have been to augment capacities of the neighboring schools through construction of additional class-room buildings, the design of which was ready. This could have solved the ultimate problem – reallocation of 400 pupils from the high risk land area to safer locations. Role of consultants should have been clearly defined and communicated to the Provincial Government. Consultants' support to Project was certainly critical given weak project implementation capacity of the Provincial Government. However, over-reliance on the consultants' support might have reduced the initiativeness of the Provincial Government, according to which sometimes there was an impression that "the consultants took over the Project". It was reported that in some cases content of Provincial Government's communications was changed by the consultants with the motivation of ADB's likely disapproval of Provincial Government's proposals. This seems to be the case with the search for an alternative solution to the Mahayag school problem, as, according to the Provincial Government and PIU management, their impression was that no changes to the Project design would be allowed by ADB. Outsourcing of engineering work facilitated project implementation. Given the constrained capacity of the Provincial Engineer's Office, the Provincial Government opted to outsource the conduct of engineering surveys for the rural roads using its own resources. This accelerated project implementation and allowed other engineering and design work to be conducted by the Provincial Engineer's Office in parallel to the outsourced engineering activities.

19. Recommendations and Follow-up Actions: 1. PDMO's institutionalization needs to be completed by the Provincial Government. Experience of other provinces, in which PDMOs are successfully functioning and DRM has been mainstreamed into provincial policies, should be studied and suitably implemented in the Province. In addition to that, Provincial Government needs to allocate sufficient budget resources for PDMO's staff capacity building; 2. PDMO needs to start implementing 2008 NEDA guidelines on mainstreaming disaster risk reduction in sub- national land use / physical planning; 3. Effectiveness of such projects largely depends on the continuous "software" support to LGUs. Therefore, for future similar projects ADB might consider use of cluster TA approach to programmatic institutional and capacity building of the selected LGUs; 4. For future disaster response projects, it is advisable to include ADB staff working in disaster risk reduction and climate change adaptation (CCA) into the project teams given the specificity of DRR and CCA work; 5. ADB's catalytic role should be fully explored to attract other donor financing. For that, however, future operations need to include development of a comprehensive DRR investment plan for the selected LGUs, which could then be used as a platform for coordinated (and possible ADB-led) donor support to the LGUs

17 in question; 6. In future operations project oversight structures should be designed not only to provide overall coordination and performance monitoring, but also to be a mechanism for pro-active problem solving. In this respect an assessment of the institutional, social, and political environment surrounding future project would be necessary at the early project design stage. Also formal and informal processes within the EA/IA and problem solving mechanisms need to be assessed and reflected in the design of the project oversight structure. 7. Detailed PIM should be developed before project start-up to provide LGU with clear description of the procurement process at each stage. PIM should undergo revision by the project stake-holders on an annual basis to learn from the issues that have already emerged during implementation. Review of PIM relevance and possible update could become a requirement for project annual reporting. Dedicated procurement specialist(s) should be provided by the Project, if necessary. 20. Additional Remarks, Comments and Suggestions: None

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III. PREPARATION AND APPROVAL Name of Person and designation / Name of Prepared by: Date Institution / Signature 1. Manager, JFPR-GIU4: /signature/ ______7 December 2009 Ms. Virginia Lim-Cruz Project Director/Provincial Development and Planning Officer Provincial Government of Southern Leyte 2. Project Officer,

ADB: /signature/ ______4 December 2009 Aziz Haydarov Young Professional (Economics) Philippines Country Office Southeast Asia Regional Department

Name of Person and designation / Name of Approved Date Institution / Signature 1. Director General, Department, ADB: /signature of OIC/ ______4 December 2009 Arjun Thapan Director General Southeast Asia Regional Department 2. Division/Country Director, ADB: /signature/ ______4 December 2009 Neeraj Jain Country Director Philippines Country Office Southeast Asia Regional Department 3. Head of the Recipient/Executing /signature/ Agency: ______9 December 2009 Hon. Damian G. Mercado Provincial Governor Provincial Government of Southern Leyte

4 GIU=grant implementation unit (formerly called PIU=project implementation unit)