The Project Dovetails and Expands on Efforts by the Donor Community to Assist Government in the Decentralization Process
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Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 52139-DO PROJECT APPRAISAL DOCUMENT ON A Public Disclosure Authorized PROPOSED LOAN IN THE AMOUNT OF US$20 MILLION TO THE DOMINICAN REPUBLIC FOR A MUNICIPAL DEVELOPMENT PROJECT Public Disclosure Authorized December 16,2009 Sustainable Development Department Caribbean Country Management Unit Latin America and the Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Public Disclosure Authorized Bank authorization. CURRENCY EQUIVALENTS Exchange Rate Effective - December 10,2009 Currency Unit = Dominican Peso 36.59 = US$1 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS ADM Eastern Regional Municipal Association AECI Spanish Agency for International Cooperation ARCS Audit Reports Compliance System AROMA Municipal Association for the Development of the Rio Macasias Basin BCRD Central Bank of the Dominican Republic CAFTA Central America Free Trade Agreement CAPGEFI Center for Financial Policy and Management CAS Country Assistance Strategy CD Project Management Committee CDD Community-Driven Development CDM Municipal Development Counsel CNS National Counsel for Salaries CONARE National Counsel for the State Reform CONAU National Counsel ofUrban Matters CP s Country Partnership Strategy cso Civil Society Organization DA Designated Account DGCP General Directorate of Public Contracting DGDF Dominican Border Development Agency DGODT General Directorate of Territorial Development DGIP General Directorate of Public Investment DGDES General Directorate of Economic and Social Development DIA Declaration of Environmental Impact DOP Dominican Pesos DM Local District, a division of the municipality with limited autonomy EAR Environmental Assessment Report EC European Commission EIA Environmental Impact Assessment EMP Environmental Management Plan ESMF Environmental and Social Management Framework FEDOMU Dominican Federation of Municipalities FM Financial Management FMS Financial Management System FOGAM Forum for Municipal Environmental Management FS Financial Statements GoDR Government of the Dominican Republic GTZ German Agency of Technical Cooperation GTA Technical Support Group of the Project HR Human Resources IAD Dominican Agrarian Institute IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding IDA International Development Association IDB Inter-American Development Bank i FOR OFFICIAL USE ONLY IFAC International Federation of Accountants IFAD International Fund for Agricultural Development I-NAPA National Institute of Potable Water and Sewer System INIFCHI National Institute of Water Resources IPEP USAID Project for Strengthening Environmental Protection Policies ISDS Integrated Safeguards Data Sheet ISR Information Systems Renewal IUFR Interim Unaudited Financial Report LIGA Dominican Municipality League LIP Local Investment Plan LMD Dominican Municipality League MDC Municipal Development Council MDP Municipal Development Plan M&E Monitoring and Evaluation MEA Municipal Environmental Analysis MI Municipal Investment MTR Mid Term Review NBI Unsatisfied Basic Necessities NCB National Competitive Bidding NGO Non-governmental organization OE Operational Expenditures OM Operations Manual ONAPRES National Office of Budgeting ONAPLAN National Planning Office (was replaced by SSEPLAN) ONE National Statistics Office ONFED Office of the National Director of European Funds for Development OPP Provincial Planning Office OTP Provincial Technical Office OTUyR Rural and Land Management PARME Reform and Modernization of the State Program Support PC Project Coordinator PAD Project Appraisal Document PCN Project Concept Note PCU National Project Coordination Unit PE Personal Expenditures PEFA Project Expenditures and Financial Accountability PFM Public Financial Management PFPNE Strengthening ofNortheast Provinces Program PGAM Environmental Municipal Management Plan PID Project Information Document PIP Project Implementation Plan PM Participant Municipalities PMAA Environmental Management and Adequacy Plan PMD Municipal Development Plan POA Annual Operating Plan PROCOMUNIDAD Promotion to Community Initiative, PRODEM Dominican Republic Municipal Development Project PROPESUR Small Producers of the Southwest Region Program RVP Regional Vice President SA Social Assessment SAP Systems, Applications and Products in Data Processing SBD Standard Bidding Document sc Steering Committee SCG Governmental Accounting System SEA Secretariat of Agriculture SEE Secretariat of Education This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. SEEPYD Secretariat of Economy, Planning and Development SEH Secretariat ofFinance SEMARENA Secretariat of Environment and Natural Resources SESPAS Secretariat ofHealth and Social Assistance SIAFE Integrated System for Government Financial Administration SIGEF Integrated System ofFinance Management SIFMUN Municipal Finance System SNPIP National Public Planning and Investment System SOE Statements ofExpenditure SOPEC Secretary ofPublic Works and Communications SRFP Standard Request for Proposals SSEMP Strengthening Social and Environmental Management Plan SSEPLAN Sub-secretariat of Planning STP Technical Secretariat ofthe Presidency TA Technical Assistance and Training TN National Treasury UAM Environmental Municipal Unit UEPEX Automated Country System for Units with External Donor Resources UNAP Health Primary Attention Unit WB World Bank WFP World Food Program TOR Terms ofReference W&A Works and Assets Vice President: Pamela Cox Country Director: Yvonne Tsikata Sector Director: Laura Tuck Country Manager Roby Senderowitsch Sector Manager: Ethel Sennhauser Task Team Leader: Mark A. Austin ... 111 DOMINICAN REPUBLIC Municipal Development Project CONTENTS Page I. STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 A . Country and sector issues .................................................................................................... 1 B. Rationale for Bank involvement ......................................................................................... 3 C . Higher level objectives to which the Project contributes .................................................... 4 I1. PROJECT DESCRIPTION ................................................................................................. 4 A . Lending instrument ............................................................................................................. 4 B. Project development objective and key indicators.............................................................. 4 C . Project components ............................................................................................................. 7 D. Lessons learned and reflected in the Project design ........................................................... 8 E. Alternatives considered and reasons for rejection .............................................................. 9 I11. IMPLEMENTATION ........................................................................................................ 10 A . Partnership arrangements (if applicable) .......................................................................... 10 B. Institutional and implementation arrangements. ............................................................... 10 C . Monitoring and evaluation ofoutcomes/results ................................................................ 12 D. Sustainability..................................................................................................................... 13 E. Critical risks and possible controversial aspects ............................................................... 14 F. Loan conditions and covenants ......................................................................................... 15 IV. APPRAISAL SUMMARY ................................................................................................. 17 A . Economic and financial analyses ....................................................................................... 17 B. Technical ........................................................................................................................... 18 C . Fiduciary ........................................................................................................................... 19 D. Social................................................................................................................................. 19 E. Environment...................................................................................................................... 21 F. Safeguard policies ............................................................................................................. 22 G. Policy Exceptions and Readiness...................................................................................... 22 iv Annex 1: Country and Sector or Program Background ............................................. 24 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ..... 38 Annex 3: Results Framework and Monitoring ............................................................ 40 Annex 4: Detailed Project Description.........................................................................