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World Bank Document Document of The World Bank Public Disclosure Authorized Report No: ICR00001377 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-72260 TF-54882) ON A Public Disclosure Authorized LOAN IN THE AMOUNT OF EURO 40 MILLION (US$47.54 MILLION EQUIVALENT) TO THE REPUBLIC OF CROATIA FOR A COASTAL CITIES POLLUTION CONTROL PROJECT Public Disclosure Authorized IN SUPPORT OF THE FIRST PHASE OF THE COASTAL CITIES POLLUTION CONTROL PROGRAM May 20, 2010 Public Disclosure Authorized Sustainable Development Department Southeast Europe Country Unit Europe and Central Asia Region CURRENCY EQUIVALENTS (Exchange Rate Effective) March 2010 Currency Unit = Croatian Kuna (HRK) 1.00 HRK = US$0.19 US$1.00 = 5.36 HRK FISCAL YEAR (January – December) ABBREVIATIONS AND ACRONYMS APL Adaptable Program Lending MEPPPC Ministry of Environmental BOD Biochemical Oxygen Demand Protection, Physical Planning and CAS Country Assistance Strategy Construction CCPCP Coastal Cities Pollution Control MoF Ministry of Finance Program MRDFWM Ministry of Regional CPS Country Partnership Strategy Development, Forestry and Water d.o.o. Limited Liability Company Management (Croatian) MWSC Municipal Water and Sewerage EF Environmental Framework Company EIA Environmental Impact Assessment ‘NIMBY’ ‘Not in my backyard’ EIFF Environmental Infrastructure NPV Net Present Value Financing Facility O&M Operation and Maintenance EMP Environmental Management Plan OM Operations Manual EU European Union PAD Project Appraisal Document FMS Financial Management System PDO Project Development Objective GA Grant Agreement PE Population Equivalent GEF Global Environment Facility PIE Project Implementing Entity HRK Croatian Kuna PIU Project Implementation Unit HV Hrvatske Vode (Croatian Waters) PP Procurement Plan HVJP Hrvatske Vode Jadranski Projekt SA Social Assessment (HV Adriatic Project) SEA Strategic Environmental IBRD International Bank for Assessment Reconstruction and Development SLA Sub-Loan Agreement IFR Interim Financial Reports SOE Statements of Expenditure ISR Implementation Status Reports SPSC Special Purpose Subsidiary LA Loan Agreement Company LARAP Land Acquisition and Resettlement SS Suspended Solids Action Plan STAP Scientific and Technical Advisory LARPF Land Acquisition and Resettlement Panel Policy Framework WWTP Wastewater Treatment Plant Vice President: Philippe Le Houerou Country Director: Peter Harrold Sector Manager: Wael Zakout Project Team Leader: Michael Webster ICR Team Leader: Sanyu Lutalo CONTENTS COASTAL CITIES POLLUTION CONTROL PROJECT – PHASE I Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design............................................... 1 2. Key Factors Affecting Implementation and Outcomes .............................................. 6 3. Assessment of Outcomes ............................................................................................ 9 4. Assessment of Risk to Development Outcome......................................................... 15 5. Assessment of Bank and Borrower Performance ..................................................... 16 6. Lessons Learned........................................................................................................ 17 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners........... 18 Annex 1. Project Costs and Financing.......................................................................... 19 Annex 2. Outputs by Component.................................................................................. 20 Annex 3. Economic and Financial Analysis ................................................................. 25 Annex 4. Bank Lending and Implementation Support/Supervision Processes............. 29 Annex 5. Beneficiary Survey Results ........................................................................... 32 Annex 6. Stakeholder Workshop Report and Results................................................... 33 Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR ..................... 34 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders....................... 44 Annex 9. List of Supporting Documents ...................................................................... 45 MAP A. Basic Information Coastal Cities Pollution Country: Croatia Project Name: Control Project (APL) Project ID: P065416 L/C/TF Number(s): IBRD-72260,TF-54882 ICR Date: 05/20/2010 ICR Type: Core ICR GOVERNMENT OF Lending Instrument: APL Borrower: CROATIA Original Total USD 47.5M Disbursed Amount: USD 53.9M Commitment: Revised Amount: USD 46.6M Environmental Category: F Implementing Agencies: Croatia Ministry of Environmental Protection, Physical Planning, and Construction Mr. Jadranko Husaric, General Manager, Hrvatske Vode (HV) Cofinanciers and Other External Partners: B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 03/18/2002 Effectiveness: 12/17/2004 12/17/2004 Appraisal: 02/09/2004 Restructuring(s): Approval: 06/01/2004 Mid-term Review: 04/05/2007 03/27/2007 Closing: 11/30/2008 11/30/2009 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Low or Negligible Bank Performance: Moderately Satisfactory Borrower Performance: Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Satisfactory Implementing Quality of Supervision: Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Moderately Satisfactory Satisfactory Performance: Performance: i C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry No None at any time (Yes/No): (QEA): Problem Project at any Quality of No None time (Yes/No): Supervision (QSA): DO rating before Moderately Closing/Inactive status: Satisfactory D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 10 10 General water, sanitation and flood protection sector 5 5 Sewerage 85 85 Theme Code (as % of total Bank financing) Access to urban services and housing 33 20 Environmental policies and institutions 17 17 Other urban development 17 17 Pollution management and environmental health 33 46 E. Bank Staff Positions At ICR At Approval Vice President: Philippe H. Le Houerou Shigeo Katsu Country Director: Peter C. Harrold Anand K. Seth Sector Manager: Wael Zakout Sumter Lee Travers Project Team Leader: Michael John Webster Manuel G. Marino ICR Team Leader: Sanyu Sarah Senkatuka Lutalo ICR Primary Author: Sanyu Sarah Senkatuka Lutalo F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) To improve the quality of Croatia's Adriatic coastal waters to meet EU ambient quality standards in the participating municipalities, in a financially and operationally sustainable manner. ii Revised Project Development Objectives (as approved by original approving authority) The project development objective was not revised. (a) PDO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Percentage of samples from monitoring bathing and shellfish areas water quality Indicator 1 : complying with EU standards in participating municipalities. 97.9 Reliable baseline data was not available during Value appraisal as the there was quantitative or no reliable sea water 98 98.5 Qualitative) quality monitoring system in place at the time -- actual value was assumed to be lower. Date achieved 07/01/2004 11/30/2009 11/30/2009 Early in implementation, it was confirmed up to 97.9% samples in Comments bathing/shellfish areas met required standards, rendering this indicator not very (incl. % useful. 98.5 % of samples complied with standards in participating achievement) municipalities, exceeding target. Technical and financial situation of MWSC in the participating municipalities as Indicator 2 : indicated by sewerage network coverage rate (average). Value quantitative or 56 65 68 Qualitative) Date achieved 07/01/2004 11/30/2009 11/30/2009 Comments The average sewerage coverage rates improved in the participating cities and met (incl. % the target. Five of the cities exceeded the targeted coverage rate. achievement) Technical and financial situation of MWSC in the participating municipalities as Indicator 3 : indicated by operating ratio (average). Value quantitative or 0.99 >1.1 0.97 Qualitative) Date achieved 07/01/2004 11/30/2009 11/30/2009 Operating ratio is defined as operating revenue divided by operating costs, Comments including adequate maintenance costs. Number presented is average of (incl. % Operating Ratios from 9 MWSCs (one exceeded target, 5 within 10% margin) -- achievement) see Annex 2 for individual results Technical and financial situation of MWSC in the participating municipalities as Indicator 4 : indicated by debt service ratio (average) Value quantitative or 4.7 >1.5 8.16 Qualitative) iii Date achieved 07/01/2004 11/30/2009 11/30/2009 Comments Number presented is average Debt Service Coverage Ratio for 8 MWSCs with (incl. % data available, of which 5 exceeded target and one within 10 % margin.
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