FOR OFFICIAL USE ONLY Public Disclosure Authorized

Document of The World Bank

Report No: 35790

IMPLEMENTATION COMPLETION REPORT (SCL-42640)

ON A

LOAN Public Disclosure Authorized IN THE AMOUNT OF US$ 200 MILLION

TO THE

REPUBLIC OF POLAND

FOR AN

EMERGENCY FLOOD RECOVERY PROJECT Public Disclosure Authorized June 15, 2006

Environmentlly and Socially Sustainable Development Unit Europe and Central Asia 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 Bank authorization. Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective July 2005) Currency Unit = PLN PLN 3.42 = US$ 1 US$ 0.29 = PLN 1

FISCAL YEAR January 31 December 31

ABBREVIATIONS AND ACRONYMS

CAS Country Assistance Strategy EBRD European Bak for Reconstruction and Development EIB European Investment Bank ERR Economic Rate of Return EIA Environmental Impact Assessment EU-PHARE European Union Assistance Program for Poland and Hungary GIS Georgraphic Informaiton System GoP Government of Poland IBRD International Bank for Reconstruction and Development IGiK Institute of Geodesy and Cartography ICR Implementaiton Completion Report IMGW Institute of Meteorology and Water Management MOE Ministry of Environment MOF Ministry of Finance MFR Ministry of Flood Recovery MTR Mid-Term Review NGO Non Governmental Organization NRMP National Reconstruction and Modernization Program OKI Coordination and Information Center for Flood Management ONDR Office of Natural Disaster Recovery O&M Operation and Maintenance PCU Project Coordination Unit RZGW Regional Water Management Authority SME Small and Medium Enterprise TA Technical Assistance TOR Terms of Reference UNDP United Nations Development Program USAID United States Agency for International Development USIDA United States Trade and Development Agency

Vice President: Shigeo Katsu Country Director Daniela Gressani Sector Manager Benoit P. Blarel Task Team Leader Masood Ahmad

POLAND EMERGENCY FLOOD RECOVERY PROJECT

CONTENTS

Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 5 5. Major Factors Affecting Implementation and Outcome 13 6. Sustainability 15 7. Bank and Borrower Performance 16 8. Lessons Learned 17 9. Partner Comments 18 10. Additional Information 19 Annex 1. Key Performance Indicators/Log Frame Matrix 23 Annex 2. Project Costs and Financing 24 Annex 3. Economic Costs and Benefits 26 Annex 4. Bank Inputs 28 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 30 Annex 6. Ratings of Bank and Borrower Performance 31 Annex 7. List of Supporting Documents 32 Annex 8. Monitoring Forecasting and Warning System (SMOK) 33 Annex 9. Project Implementation Unit in Wroclow - Completion Report 39 Map(s) 34706

Project ID: P053796 Project Name: POLAND FLOOD EMERGENCY Team Leader: Masood Ahmad TL Unit: ECSSD ICR Type: Core ICR Report Date: June 14, 2006

1. Project Data Name: POLAND FLOOD EMERGENCY L/C/TF Number: SCL-42640 Country/Department: POLAND Region: Europe and Central Asia Region Sector/subsector: Central government administration (45%); Housing construction (20%); General water, sanitation and flood protection sector (16%); Roads and highways (12%); District heating and energy efficiency services (7%) Theme: Natural disaster management (P); Water resource management (P)

KEY DATES Original Revised/Actual PCD: 10/24/1997 Effective: 03/17/1998 03/17/1998 Appraisal: 10/29/1997 MTR: 12/06/1999 Approval: 12/18/1997 Closing: 02/28/2001 12/15/2005

Borrower/Implementing Agency: Government of Poland/Ministry of Finance; Government of Poland/Chancellery of Prime Minister; Government of Poland/Ministry of Interior and Administration Other Partners: Ministry of Environment

STAFF Current At Appraisal Vice President: Shigeo Katsu Johannes Linn Country Director: Daniela Gressani Basil Kavalsky Sector Director: Benoit Blarel Kevin Cleaver Team Leader at ICR: Masood Ahmad Piotr Wilczynski ICR Primary Author: Mahwash Wasiq; Barbara Letachowicz

2. Principal Performance Ratings

(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: H Bank Performance: S Borrower Performance: S

QAG (if available) ICR Quality at Entry: S S Project at Risk at Any Time: No 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The two principal objectives of the Project were to assist the Government of Poland in restoring basic infrastructure in municipalities and rural areas affected by the 1997 flood by repairing structures and facilities of economic importance, and restoring lifeline facilities and services; and reducing vulnerability and risk of future flooding through strengthening and modernizing flood management system. The project constituted a major response to the unprecedented flood of 1997, the largest that Poland experienced over two centuries. The 1997 flood resulted in inundation of an area of 650 km2 in three voivodships (administrative regions) of Slaski (Silesia), Opolskie and Dolnoslaskie (Lower Silesia) damaging 37,000 buildings, 866 bridges, over 2,000 km of roads and 129 km of dikes. The estimated damages were about PLN 8.5 billion. It caused the loss of 54 lives; flooding of some 700,000 households, while about 110,000 people had to be evacuated. Given the extent of the flood damages, the recovery efforts were a true challenge for the government. Therefore, extensive financial support was mobilized internationally by various donors. The World Bank in turn led coordination of the flood recovery efforts and also provided USD 200 million through the Emergency Flood Recovery Project (EFRP). The Bank response was appropriate and swift, the Project was prepared in a record time.

Given the emergency nature of the project, it was not listed in the CAS explicitly, nevertheless, it supported the CAS goal to sustain private sector growth, especially in the area of increased private sector participation in infrastructure development, by engaging local vendors, contractors and technical service providers to implement infrastructure rehabilitation and restoration. In addition, the project supported the CAS goal of environmental and social sustainability of reforms by repairing public/communal environmental infrastructure and basic infrastructure necessary for economic activities.

The development objectives were appropriate. The innovative feature of the project was that unlike usual emergency recovery projects it also included elements for reducing vulnerability due to future floods. Considering the recurrence of extreme floods in Poland it was vital to reduce vulnerability due to future floods. Thus incorporating measures to improve the overall flood forecasting, warning and management system in the country, and institutional capacity for better flood management in emergency operation proved profoundly beneficial for Poland. Among other things, this work led to development of a flood protection program for the Odra River Basin.

3.2 Revised Objective: The project objectives were not revised during implementation.

3.3 Original Components: The project was to support the Government of Poland’s strategic program of National Reconstruction and Modernization (NRMP) prepared in response to the 1997 food. The program consisted of implementation of immediate, mid range and long term activities aimed at restoration of damaged areas and facilities and development of an advanced early warning system against natural disasters. The project was designed to support elements of the medium and long term priorities. The project components are as follows:

A. MUNICIPAL & RURAL INFRASTRUCTURE (US$267.7 million planned vs US$295 million actual).

The component was to support enabling basic and normal level of operation of water supply, wastewater treatment, waste management and transportation system, district heating and public and commercial buildings in the target region, and thereby improving health, safety and environmental conditions of the

- 2 - affected population. Under the component, it was planned to restore water supply, sewerage, drainage, and solid waste facilities; local roads and bridges; district heating and gas system; and communal housing and public buildings. At project appraisal, about 74 water supply projects, 86 sewerage projects and 8 solid waste disposal projects were identified. In addition, a number of road rehabilitation projects, heating and gas systems repair and a number of communal housing projects were identified. Proposed subprojects were to be co-financed by other donors, and most importantly by the local gminas (municipalities). Furthermore, necessary technical assistance in areas of procurement and contract management, construction design and supervision was to be provided to the municipal and gmina level administrations, as they were the principle implementers under this component. In addition, the Project Coordination Unit (PCU) was also to provide the necessary oversight and supervision of this component.

B. FLOOD MANAGEMENT AND HAZARD REDUCTION (US$227.5 million vs US$ 226.3 million)

The objective of this component was to improve the existing flood management system, to reduce risk of flood hazard and vulnerability, and reduce the economic cost to the central and local governments from future floods. The component was to focus on flood management problems of the middle and upper Odra River Basin and the upper Vistula River basin. The component was designed to strengthen sustainable long-term flood hazard reduction and management and to support investments in the rehabilitation, modernization and expansion of flood protection infrastructure. The component had the four following subcomponents:

B1. BASIN FLOOD MANAGEMENT PLANNING (USD19.4 million vs $17.8 million). This subcomponent was to support (i) the updating and development of new basin management strategies and plans with emphasis on economic assessment of flood hazard, formulation of alternatives for different level of protection, including both structural and not structural options; (ii) compiling of up-to-date digital terrain model (DTM) and data base to support hydrologic and hydraulic modeling and flood plain management in the Project basin area and development and use of advanced GIS and remote sensing data to support planning and modeling in the Project basin area; and (iii) procuring and installing of computer equipment and software for simulation and forecasting models required for strategic and contingency planning during flood in the responsible basin planning and operational agencies, and establishment of flood information centers (OKIs).

B2. MONITORING, FORECASTING & WARNING (USD71.0 million vs $62.13 million). This subcomponent was to upgrade and modernize the flood forecasting and warning system of the country. This involved installation of: (i) an automatic network of hydrological and meteorological measuring stations that is not vulnerable to disruption by floods; (ii) the acquisition and use of modern meteorological forecasting models and related computer equipment; (iii) a secure system of data transmission, receiving, processing and storage; and (iv) information systems, models and specific programs to put this system into operation in collaboration with regional river basin agencies and local authorities.

B3. INVESTMENT IN FLOOD PROTECTION INFRASRUCTURE (US$126.3 million vs US$141.93). The aim of this sub-component was to invest in the rehabilitation and modernization of high priority flood protection infrastructure including reconstruction and modernization of dikes, embankments and levees. This component was financed in parallel by the European Investment Bank (EIB) and the Council of Europe Development Bank (CEB).

B4. FLOOD HAZARD REDUCTION AND PREVENTION (USD10.9 million vs US$4.43 million). This subcomponent was to focus mainly on emergency response and recovery, flood preparedness, public awareness and participation and training in areas subject to recurrent floods loss and substantive damage.

- 3 - Three main activities were implemented under this subcomponent including: (i) development of detailed flood preparedness and response plans at the pilot voivoship and gmina level together with manuals and training; (ii) feasibility study for flood insurance program; and (iii) expansion of pilot activity to cover additional areas based on lessons learned from the pilot activity.

C. PROJECT IMPLEMENTATION SUPPORT (US$3.0 million vs US$3.12 million)

Under this component, the overall project implementation was to be managed and coordinated with various implementing agencies under the auspices of a Project Coordination Unit (PCU) under the Office of Natural Disaster Recovery (ONDR), then known as Office of the Minister of Flood Recovery (MFR). PCU was to coordinate and supervise procurement, disbursement, financial management, and other administrative services related to project implementation management. 3.4 Revised Components: The components were not revised during project implementation. However there were some minor shifts in the emphasis of some of the activities of the project, and as a result, funds under various components were either slightly under or overused. But the main activities under each component and subcomponent were implemented.

3.5 Quality at Entry: The quality at entry is rated Satisfactory. The project objectives were consistent with the government priorities and met the critical needs of people affected by the 1997 floods; in addition, it was supportive of the CAS goals. The project design was based on lessons learned from previous projects in Poland and Bank assisted emergency recovery projects worldwide. Given the emergency nature of the project, preparation was done with participation of a few individual consultants assisting the Bank team with close cooperation with the government and stakeholders in a relatively short period of time, in about three months. Given the limited time for preparation, detailed design of both emergency and non-emergency components of the project were prepared during project implementation.

For restoration and recovery works under Component A, the criteria developed for selection of the subprojects and a set of broad categories of subprojects were defined. Accordingly, at the appraisal stage, about 615 subprojects were identified. The detailed technical designs of each subproject were developed during project implementation. Agreed selection criteria were subsequently used for including additional subprojects under that component.

As for preparation of component B, the involved implementing agencies had prepared preliminary working papers that in part formed the basis for the project design. These working papers were prepared after a series of consultations held with various donors. While the project team at appraisal was of the view that the implementing agencies and Poland had sufficient technical expertise to prepare the technical design of the project, because of the short time available to initiate the project and the complex technical issues involved in such an extensive modernization of the existing system, a special fund was established under the project to be used during the startup period by each implementing agency to recruit international and Polish expertise to prepare detailed design of the project.

The original closing date for the project was February 28, 2002 (based on project completion date of August 2001, it was mistakenly entered into the system as February 28, 2001), coinciding with the limited three year implementation period for emergency operations. Although the emergency component (component A) of the project was completed during the assigned three year period, component B, addressing reduction of risk and vulnerability to future floods could not have been completed during such a period, therefore the loan was extended to accommodate both proper preparation and subsequent

- 4 - implementation of this component. Given the multidimensional nature of addressing flood risks, the technical complexity of individual tasks and involvement of numerous implementation agencies, detailed design and implementation of the component needed much more time.

4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: The project outcome is rated as satisfactory. The project has achieved its objectives because it has contributed to (i) restoration of municipal and rural infrastructure affected by the 1997 flood; and (ii) reduction of risk and vulnerability to future floods through modernization and expansion of flood management system in the country. Poland’s flood forecasting and warning system is one of the most modern in the world now. The project also supported a feasibility study for flood protection in the Odra River Basin that led to development of the Odra River Basin Flood Protection (ORFP) Project to be financed by GOP, the Bank, Council of Europe Development Bank (CEB) and the EU-Cohesion Fund. In addition, with development of ORFP, the project has contributed to flood protection in the Odra River Basin.

As a result of the 1997 flood, the estimated total damages in the Odra River Basin were about PLN 8.5 billion (US$ 2.3 billion), and loss of 54 lives. The recovery and restoration efforts were financed by the government, the World Bank and many other development partners. Parallel financing was provided by the European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB) and CEB. The objective related to restoration of municipal and rural infrastructure was fully achieved under component A. Restoration efforts included repair/reconstruction of infrastructure such as water supply, waste water collection and treatment systems, landfills, local roads and bridges, district heating and gas networks, communal housing and public facilities such as schools and hospitals. Restoration of the municipal and rural infrastructure exceeded the scope of works identified during project preparation. Similarly, the objective related to reduction of risk and vulnerability to future floods was achieved through modernization of the overall flood management system in the country. As a result of the project, today Poland is equipped with one of the most sophisticated weather and flood forecasting, warning and monitoring systems in the world. Under the new system, hydrological and meteorological data and other parameters are collected and transferred automatically to be processed with the help of supercomputers and advanced hydrological and meteorological forecasting models developed under the project. The forecasts with the help of modern state of the art technologies are then provided to the end users/clients, including the state administration, commercial users, aviation, maritime, water management facilities and authorities, agriculture, local authorities and the public through client connection and IMGW webpage. In addition, historical and up to date data is provided to the crisis management centers and Coordination & Information Centers for Flood Management (OKI) to give early warning to the relevant organizations, local authorities and the public to prepare adequate response in extreme weather situations in order to protect life and property, as well as the economy. Under the project, three OKIs were established one in the city of Krakow, for the upper Vistula river basin, in Gliwice for the upper Odra and in Wroclaw for the middle Odra river basin to improve flood management capacity at the local level. In addition, for strengthening of flood management capacity, supporting tools such as rivers cross sections, digital terrain models and digital topographic maps used for flood waves modeling and identification of inundation areas with various flood frequencies were developed. Under the project, all the Regional Water Management Authorities (RZGWs) in the country were provided with unified computerized GIS hardware and software tools. Finally, the concept of a “basin approach” for water management, consistent with EU Water and Environmental Directive, was strengthened under the project in developing the program for flood protection for the Odra River basin.

- 5 - The overall economic benefits of the project include restoration of economic activities in the flood affected areas by rehabilitation of basic infrastructure, facilities and services crucial for resumption of those activities. In addition, the project had contributed to reducing vulnerability to future floods by developing a modern flood monitoring, forecasting and warning system designed to minimize flood risk and the associated damages to future floods. It is important to note, that it would take some time to fully realize the benefits of modernizing the flood warning system. Actually, a comprehensive study is required to assess how the new system has improved the weather and flood warning in the country and to estimate the economic benefits of better forecasting. Such a study is underway by the government. However, limited measurable indicators demonstrate the efficiency of the modern system in such areas as improved lead time and accuracy of weather forecasting. For example, the reliability of forecasting minimum and maximum temperatures increased from 79% to 83% and 88% to 90% respectively after system upgrade in 2004. This accuracy is to further increase with integration of various systems and improved capacity of the staff working with the modern system. Similarly, a much larger range of information on basic weather parameters can be collected, processed, analyzed, and weather forecasts can now be prepared 78 hours in advance, while previously they could be prepared only 48 hours in advance. Moreover, with the new system of lightening detection, it is now possible to determine the point of lightning strike between 500 m and 1000 m accuracy, thereby facilitating the prompt location of power line damages - forest fire and other material losses caused by thunderstorms, and to determine the electric condition of the atmosphere, thus making it possible to forecast the probability of lightning strike. To illustrate the economic gains from a modern, efficient and reliable forecasting system similar to the one established in Poland, Annex 3 presents the economic benefits of such system in other countries, especially the United States as it relates to the forecasting of the El Niño.

In addition, an evaluation of subcomponent B4 carried out during implementation indicates that as a result of the repair/modernization and upgrade of the existing flood protection systems and structures, increased confidence of the society in their safety and protection was observed, and it was also noted that residents feel safer where flood defense units have been established and or enhanced.

4.2 Outputs by components: The component outputs were fully realized. The details by component are presented below:

Component A: Municipal and Rural Infrastructure.

The output under this component is satisfactory. Restoration and reconstruction of the following general facilities were carried out: water supply and waste water collection and treatment systems, landfills, local roads and bridges, district heating and gas networks, communal housing and public facilities as schools and hospitals. Selection of the subprojects was to be done based on the agreed criteria. Eligible sub-projects covered only repair/reconstruction of infrastructure located within the Odra river basin and in communities which suffered inundation of more than 25% of their territory. Among those eligible, sub-projects of the highest priority such as those associated with prevention of health risks, economic and social importance to the communities, lifeline services and priorities or repairs needed before winter season were selected. A total amount of US$267.7 million equivalent was allocated for this component. At the time of appraisal only 615 subprojects were identified with very rough cost estimates and included in the Project Implementation Plan (PIP) to be financed by all donors. Early during implementation some projects were dropped (by Gminas about 65 subprojects) and some were added (about 57) making a firm list of 607 subprojects. The Government also identified about 142 additional subprojects consisting of two lists (86 and 56 so called list prim and list bis respectively) to be included depending upon the availability of funds. It was expected that a number of subprojects would be financed by the other donors.

- 6 - In the end Bank financing was involved in 881 subprojects in six voivodships and 185 gminas (municipalities) and powiats (counties) listed in the table below. The total cost of the completed works is estimated around PLN 812.4 million, US$202.4 million equivalent (using the exchange rate as of the component closing date, February 28, 2002) and US$216 million using the average exchange rate during implementation. About US$110.0 million were disbursed from the Bank loan for this component while the remaining funds were provided primarily by the Gminas.

Reconstruction of damaged urban and rural infrastructure exceeded the scope of works identified and included during project appraisal. Total number of projects with breakdown by project type is given in a table below:

Type of sub Voivodship Total project Dolnoslas Lubuskie Malopolskie Opolskie Slaskie Wielkop kie olskie Water Supply 49 19 3 27 10 1 109 Waste Water 42 1 - 14 47 - 104 Treatment systems Roads and 204 26 8 57 63 4 362 Bridges District Heating 25 1 1 3 6 - 36 Solid Waste 20 - - 2 - - 22 Multiple family 4 - 1 3 1 - 9 Houses Public Facility 136 7 2 60 34 - 239 Total- 480 54 15 166 161 5 881 subprojects Total Cost of 543.5 40.5 3.2 124 98.9 2.3 812.4 Subprojects (PLN Millions) US$ Millions 135.2 10.2 0.8 31.1 24.5 0.6 202.4

In addition to Bank financed projects, several sub-projects were funded by other donors, the EBRD being the largest financier. EBRD among other subprojects financed the rehabilitation of infrastructure in the city of Wroclaw. Full information regarding the financing by other donors is not available to the ICR team. However, the team estimates that total financing for rehabilitation of municipal and rural infrastructure by all donors and Government (including Gminas) is about US$295 million exceeding the original allocation of US$267.7 million made at the time of project appraisal.

Wroclaw Municipal Infrastructure Restoration. EBRD provided a loan of EURO 16 million to finance about 44% of total rehabilitation works and restoration of municipal transport services in the city of Wroclaw. This included rehabilitation of 27.6 km of tram tracks located in the main streets of Wroclaw, associated works such as bridges and pavement reconstruction and power systems, rehabilitation of bus and tram depots, and rehabilitation of 5 rectifier stations. The estimated total cost of these works was US$37.36 million equivalent.

Component B: Flood management and Hazard Reduction.

The output under this component and associated subcomponents is satisfactory. Output of various subcomponents is presented below:

- 7 - B1. Basin Flood Management Planning. Under this subcomponent, the following tasks were implemented:

Updating of Basin Management Strategies and Plans. The task was to support preparation of basin management strategies for the Odra and Vistula basins, and it was partially completed. After the 1997 flood, the government of Poland prepared the “Oder 2006 Program"which formed the basis of the flood management strategy in the Odra river basin. In the year 2000, the World Bank studied the plan and accepted it as the strategy for Odra River Basin. The strategy formed the basis for preparing the Odra River Basin Flood Protection Project (OFRP). A similar strategy for the Vistula river basin was not prepared. Although some priorities including feasibility studies for flood retention reservoirs were identified, but this task was never finalized primarily because of frequent changes in the management of the responsible RZGW in Krakow.

Establishment of Flood Information and Management Centers (OKI). The subcomponent supported enhancement of local flood management capacity by compiling a database including river cross sections, digital terrain model (DTM), and advanced GIS and remote sensing data to enable introduction, development and use of hydrological and hydraulic modeling of flood plane for planning and management purposes in the basin. Three regional coordination and information centers for flood management (OKIs) were established under the project. Originally only two of such centers in Krakow and Wroclaw were planned; however, establishment of the center in Gliwice was added during project implementation given the significance of the upper Odra river basin in flood management and protection. This information was used to develop flood hazard maps and modeling of flood waves through the river valleys and areas that may be flooded due to floods of various return periods. Thus building capacity for warning and evacuation of potentially flood affected areas and management of floods and preparation of flood protection measures.

While most of the tasks under this subcomponent were implemented without any problems, the preparation of DTM was delayed resulting in some delays in the OKI task which depended upon the input from the DTM task. The DTM task experienced problems at the tendering stage. Subsequently, implementation of the task was transferred to another implementing agency. In addition, the quality of products from the contractor was questioned by the land surveying company hired to perform quality check. However, in the end, all products were accepted by the employer (RZGW Krakow).

An additional task was included in the project in 2002 to enhance institutional capacity of all RZGWs in flood information, planning, coordination and management. Given the importance of this activity, at a cost of USD 3.0 million, all RZGWs were equipped with the latest information technology (IT) equipment and software. This technology upgrade helped RZGWs to meet the requirements under the new Polish Water Law and also enabled all RZGWs in the country to become compatible with flood management dissemination systems of the OKIs.

Sub-component B2. Hydrological and Meteorological Monitoring, Forecasting and Warning System. This subcomponent was the largest under component B costing around USD62.1 million. The implementing agency for this subcomponent was the Institute of Meteorology and Water Management (IMGW), a semi-independent legal entity reporting to the Ministry of Environment. To achieve precision and efficiency in forecasting, a Monitoring, Forecasting and Warning System (SMOK) was designed with several sub-systems for gathering data from all over the country and transmission to the weather forecast centers, development of forecasts using the supercomputers and advanced models and dissemination of the forecasts. These systems are described briefly below and Annex 8 gives a detailed description.

- 8 - I. Measurement Networks and Data Collection

Telemetric hydrological and meteorological monitoring networks. Close to 1000 remote stations were built all over the country at essential locations to provide appropriate hydro-meteorological forecasting. The measurement data transmission system is based on radio communication (44 radio transmitters) in the southern part of Poland and in the other parts of the country, it is based on GPRS. In addition, 30 Data Collection Stations (DCS) and 7 Regional Branch Offices (RBO) were established, and servers were installed with necessary software for measurement data acquisition, processing and distribution.

Lightning monitoring system. A new lightning detection system was built to provide valuable and needed information on formation and development of thunderstorms. With the new system, it is now possible to: (i) determine the point of lightning strike with between 500 m and 1000 m accuracy, thereby facilitating prompt location of power line damages - forest fire and other material losses caused by thunderstorms; and (ii) determine the electric condition of the atmosphere, thus allowing to forecast the probability of lightning strike with up to few hours accuracy. All IMGW forecasting offices were equipped with system terminals with full analytical functionality; and data transmission. The system is also used for research and development work.

Enhancement of the Weather Radar System POLRAD. A network of 8 weather radars was installed to enhance the quality of forecasting hazardous weather, especially rainfall and strong winds, including assessment of precipitation intensity, continuous monitoring of cloud formation and weather fronts in the country. With the future access to data from Germany, the Czech Republic, Slovak Republic radars, and European CERAD network, the system will allow detection of dangerous atmospheric phenomena with greater advance than before.

Equipment for the measurement and maintenance teams. A new measurement technology was introduced including upgrade of the Mobile Measurement Sets, and the IMGW Central Measurement and Control Laboratory was modernized giving the possibility of accrediting the equipment used in the hydro-meteorological service.

II. Data Transmission, Processing, Analyzing and Preparation of Forecasts

Upgrade of the telecommunication and Information Technology System; Development of Client Service System. The telecommunication network of IMGW was upgraded to efficiently receive hydro-met data and information and to timely distribute it to various systems within IMGW and to the external users through the “Client Service System” established under this task. In addition, the necessary equipment and software was provided and the staff and clients were trained in the use and operation of new system. Also, the system has enabled access to the results of the mathematical and meteorological and hydrology models as well as full fledged connection to the external data processing centers. Introduction of an up-to-date telecommunications and information technology infrastructure including increased capacity of the lines used resulted in accelerated and more robust data transmission both within the IMGW units and between IMGW and external users.

Upgrade of data transmission and processing systems at the Forecasting Offices and Airport

- 9 - Meteorological Offices. This task introduced a new system for preparing forecasts which gave each forecaster in all forecasting and airport meteorological offices access to the full range of observational and forecasting data that is necessary for the preparation of forecasts and warning process. Before the new system, this activity was done centrally, as neither the forecasting offices had access to the observation data, nor had the necessary capability to manipulate and analyze the data to prepare short-term forecasts. In addition, before 2002, the reliability of short-term weather forecasts for Poland generated in the Central Office of Meteorological Forecasting for the minimal temperature was about 79%, and for maximal temperature 88%. In 2004 the reliability of these forecasts was respectively 83% and 90%. Some work is being conducted on the methodology of forecast generation so as to obtain even higher accuracy of the short-term forecasts.

Introduction of meteorological forecasting model into operating practice. Two new non-hydrostatic numerical forecasting models with a high time and spatial resolution were put into operating practice; they enable the system to : (i) receive and process a large range of information on basic weather parameters, and can forecast the weather 78 hours in advance, including precipitation quantitative forecast, in a grid system covering a significant part of Europe; (ii) provide their results to the other models, such as hydrological models or pollution transport models; and (iii) they can be calculated twice per day, using data from automatic measurement network. The calculations of the models are done with the help of supercomputers provided under the project.

Upgrade of the hydrological Monitoring, Forecasting and Warning system. A system of hydrology and a modeling platform was developed to enable collection, processing (including analysis and verification) and distribution of hydro-met data as well as connection to the data base system by integration of the database with the hydrological and hydraulic models working in operational mode. The Modeling Platform is used for preparing forecasts as well as for further analysis. The Modeling Platform integrates the hydro-met database with models of precipitation – runoff, wave transformation in a river bed and the operation of hydro-technical facilities. Preparation of data for calibration of the modeling platform allowed converting a large amount of historical data from analogue into digital form. In addition, with the introduction of the new system, the hydrological forecasting offices were equipped with additional hardware and specialized software, and staff working in the hydrological forecasting offices was trained in the use and operation of the new system.

Sub-component B3. Investment in Flood Protection Infrastructure financed through the European Investment Bank and the Council of Europe Development Bank. This sub-component helped to increase safety and standards of living for the inhabitants of the regions by providing better flood protection measures, and rehabilitation/modernization of social infrastructure such as public roads, river embankments, hydraulic structures and facilities and public healthcare facilities. As mentioned before, EIB and CEB financed this component which comprised of repairs, reconstruction and modernization of flood preventive infrastructure including embankments, levees, channels/river beds, access roads and accompanying hydraulic structures. Most of these works were completed. The ICR team estimates that total expenditures under this component were about US$142 million. CEB has prepared a separate completion report for works implemented under this component using CEB financing.

Sub-component B4 Flood Hazard Prevention and Reduction.

Flood Risk Reduction Planning (FRRP), implementation of FRRPs and expansion of the pilot tested program to other municipalities. The main activity was to strengthen capacity of gminas and voivodships in developing flood preparedness response plans and preparation of appropriate manuals and training for execution before the floods, during the floods and after the floods. The activity was implemented in two

- 10 - stages: the first stage focused on development of local flood management and prevention plans, identification of local laws to be adopted to enable plans implementation, economic initiatives, and educational activities necessary to make the plans operational. These activities were implemented by the local governments and residents with the support of consultants (Technical Support Units) in four municipalities: two in the Vistula river basin, and two in the Odra river basin. Relevant training on the role of media, psychological and sociological aspects of flood crisis in communities, post-disaster psychology treatment, and emergency help models were made available to the participants. The second stage of the activity provided co-financing for reconstruction of hydraulic structures, such as culverts, purchase and installation of water gauges, equipment for communication, warning and alarming, instructions for residents, shields to mark flood plains and equipment for evacuation centers to 8 municipalities. In addition, flood hazard prevention plans for 12 pilots in four gminas were developed.

Originally, flood hazard maps for this component were to be developed using output of the DTM produced under B1. But with delays in implementation of the DTM contract, flood hazard and zoning maps were prepared with the help of historical flood data available to local coordinating teams. All FRRPs along with functional attachments were adopted by municipalities after extensive discussions with local communities. At the second stage, purchase of emergency equipment and some small scale structural measures were carried out and flood hazard prevention plans for 3 powiats and five gminas have been developed. In addition, experiences gained from the activities were translated into a manual on "development of flood risk reduction methodology" which was broadly distributed by the Project.

Flood Hazard Insurance Study. The Flood Hazard Insurance Study planned under this component was cancelled due to contractual and delivery issues with the contractor. Efforts were made to restart this study but there was not much demand for it from the Government side, particularly, due to unforeseen conditions in the sector after Poland’s accession to EU. With Poland becoming a member of the EU and revamping most of its laws and regulations such a study would be useful in modernizing its flood management practices in line with the European customs. The ONDR may undertake such a study in future in this new context with properly defined terms of reference and a qualified team of consultants.

4.3 Net Present Value/Economic rate of return: Not applicable. See Annex 3 for benefits of modernizing weather and flood forecasting system.

4.4 Financial rate of return: Not applicable.

4.5 Institutional development impact: The project’s institutional development impact was high as capacity of all involved institutions, government and non-government agencies and entities, and communities was enhanced although the project did not have an explicit objective in institutional capacity building. Creation of the Office of Natural Disaster Recovery in the Chancellery of the Prime Minister to oversee the flood recovery and protection systems, creation of crisis management centers within each voivodship, modernization of the flood forecasting, monitoring and warning system; creation of community level flood risk reduction planning and management should all ensure that Poland is better prepared to cope with extreme flood events in the future. Details of institutional development impact of the project are given below in the context of project components.

Under component A, all rehabilitation and reconstruction works were co-financed by the municipalities involved, therefore, identification of works, preparation of specifications, preparation of bidding documents and implementation of tendering procedures, including contract award, supervision and financial management were done with direct participation of the local government/municipalities. Under the project,

- 11 - three international consulting firms were recruited to assist the municipalities in preparation of the bidding documents, award, supervision and financial management of all contracts. In addition, there is significant evidence of institutional strengthening of local design consulting and the contracting sectors not only in terms of considerable employment generation but also in the introduction of open tendering procedures and new contract supervision practiced under World Bank and EU loans and grants. The group of consultants recruited by the Project Coordination Unit (PCU) to manage the activities under this component also gained substantial experience in project preparation and contract management and most of them are now working in fields where EU funds are being used for preparation and implementation of various investment projects.

The project institutional building impact under component B was very high. Institutional capacity of the participating RZGWs was strengthened in flood information, planning, coordination and management through introduction of new technologies, and technical training. In particular, establishment of the OKIs, in Krakow, for the upper Vistula river basin, in Gliwice for the upper Odra and in Wroclaw for the middle Odra river basin, with development of the supporting tools such as rivers cross sections, DTMs and flood forecasting and planning models, and flood hazard maps provided the RZGWs with the necessary capabilities in flood management and warning that they lacked before. In addition, the project has contributed to the overall institutional development of all RZGWs in Poland, as all RZGWs were equipped with the latest information technology equipment and software, including GIS tools. This technology upgrade also helped RZGWs to meet requirements under the new Polish Water Law, and the task enabled all RZGWs in the country to become compatible with flood management dissemination systems of those of the OKIs. Moreover, the two RZGWs in the cities of Raciborz and Wroclaw became involved in preparation of the feasibility study for flood protection in the Odra river basin, including feasibility studies for Raciborz Dry Polder and modernization of the Wroclaw Floodway System with the assistance of an international consulting firm. The result of this activity was the preparation of a flood protection project for an amount of Euro 500 million. This has provided the RZGWs with considerable experience in preparation of such projects at a level that can be financed by international financial institutions. In addition, the subcomponent B4 had a considerable impact in capacity building of the local governments and local flood prevention organizations, the participating communities in preparation and implementation of Flood Risk Reduction Planning.

Institutional development impact was particularly high for IMGW, as the project provided an overall upgrade of all systems for a modern and efficient hydro-meteorological monitoring, forecasting, and warning. During implementation of this subcomponent, over 500 staff at the institute were trained in the use of the new technology and operation of the new systems. The training took place both internationally and in Poland. In addition, the users of the information produced by the institute and distributed through their Client Service System were also trained in the use of the new system. Aside from technical and operational capacity enhancement, the institute gained substantial experience in procurement contract management and financial management, including preparation of bidding documents, contract award and supervision, especially given the size of the investment, number of contracts and complexity of modernization. In addition, the project gave the institute visibility in the international arena, and as a result, other countries inspired to upgrade their forecasting system have visited the facilities of the institute and have hired several staff as consultants to advise them on upgrade of their systems. Furthermore, with current capabilities for forecasting, the institute is able to exchange hydro-meteorological information regionally and with WMO, as it is capable of forecasting the weather outside its borders in Europe.

Finally, the project has contributed to institutional strengthening of ONDR in areas of flood risk assessment methodologies and cost benefit analysis of flood risks in development of flood management policies for a modern flood management in the country.

- 12 - 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: There have been no significant externalities outside the control of the government or implementing agency that affected project implementation

5.2 Factors generally subject to government control: There have been no significant externalities outside the control of the government or implementing agency that affected project implementation.

5.2 Factors generally subject to government control:

Project implementation has been satisfactory. However, at the beginning, project implementation experienced considerable delays, given the number of institutions involved in project implementation and the inability of the public institutions in Poland to work well together. In fact from project effectiveness from March 1998 to late 1999 not much was implemented under the project, especially under component B. In addition to the lack of public sector cooperation, lack of initial project design in terms of contract packaging contributed to these initial delays. However, as a result of later efforts by the Office of Natural Disaster Recovery (ONDR) working as the coordinating agency and in close collaboration with the Ministry of Finance, and regular meetings of the project Steering Committee, coordination at the top took place and the implementation process was streamlined.

The other problems affecting implementation were the mechanisms for budget allocation, transfer of funds and accounting for the disbursed funds from the Ministry of Finance to the implementing agencies. Funds from the Special Account were transferred through the normal budgetary allocations from MOF to the implementing agencies which took a very long time. The implementing agencies were making payments and submitting expenditure statements accounting for the funds in order to receive additional funds. Furthermore, at one point, there were several million dollars advanced to the implementing agencies. Upon insistence of the supervision mission, the procedure was streamlined by on-time accounting of the disbursed funds at the implementing agencies before additional funds could be advanced. Nevertheless, despite considerable improvements at the implementing agency level, delays were experienced. In particular, considerable delays were experienced in payments to the international consulting firms, as their expenditures were excessively scrutinized by the financial department of the Ministry of Environment and the PCU. The excessive scrutiny of expenditures was mainly due to a general negative attitude towards foreign contractors, especially consultants and partly because of the periodic inspection of the tax authorities of foreign loans.

Despite being the main implementing agency, the Ministry of Environment (MOE) at the beginning of the project did not play any significant role in project implementation. In particular, the MOE could have played a more positive role in the decision making to speed up the preparation of the strategy for Vistula River which was dropped for not very compelling reasons, and a more proactive role in the contracts that experienced difficulties. However, at a later stage, the MOE took interest in resolving some of the outstanding issues. Furthermore, the limited capacity of the implementing agencies in procurement and contract management was never appreciated initially by the MOE, as provision of contract management consultants was not supported in the beginning, resulting in some delays in implementation.

Finally, a three month long process of Internal Audit of the project by the Supreme Chamber of Audit interrupted and impacted the implementation process, as the attention of the PCU and the implementing agencies were diverted to provide information to the auditors, rather than to project implementation.

- 13 - 5.3 Factors generally subject to implementing agency control: Overall the PCU played a necessary and positive role in implementation of the project, performing its coordination and oversight functions. The institutional structure for implementation and coordination carried out by the PCU was especially seen as positive in the management of component A. However, under component B, the implementing agencies saw PCU as yet another layer of bureaucracy adding to the scrutiny and delays both in approval of procurement documents and in financial management. Initially personality clashes between the implementing agencies and the PCU caused unnecessary delays and problems. However, the working procedures were streamlined after initial difficulties and worked well towards the end of the project. Generally, the PCU provided an excellent role/service in the overall financial management of the project and the necessary checks in procurement.

5.4 Costs and financing: The project provided a framework for the program of flood damage recovery in which several development partners participated. It is difficult to have accurate figures of total expenditures because of changing exchange rates as funds were provided by different partners at different times in various currencies. However, the bulk of the expenditures were in PLN. The ICR team has collected information in PLN and equivalent amounts in USD and Euro currencies and converted to USD equivalent. Based on these estimates the total cost of the reconstruction program is about US$524.5 million equivalent. Details are provided in the table below.

Cost of Reconstruction Program and contributions by Donors (USD Million)

Financiers Appraisal Estimates Actual IBRD 200.00 199.00 EIB 117.90 37.29 EU-PHARE 25.20 65.40 USAID 3.00 0.17 EBRD 26.00 16.00 SIDA 2.00 2.00 CEB - 92.31 Gminas (Municipalities) 103.00 96.00 Government of Poland 21.00 16.24 TOTAL 498.1 524.45

Most of the funds from development partners were used for reconstruction of municipal and rural infrastructure damage due to the floods. The CEB funding though expected was not envisaged at the start of the project. CEB funds were used primarily for flood protection measures such as reconstruction of embankments, and hydraulic infrastructure.

Cost and expenditures under the Bank loan are given in Annex 2. More than 50% of the Bank loan (US$111.) million were used for Component A and the remaining amount for Components B and C. The use of loan funds for B2 component for modernization of SMOK was higher than original estimates (US$62.13 million against US$54.6 million) while a lesser amount was used in B4. The funds used for component C were slightly higher than the original estimates because of extended duration of the project and the addition of a category for incremental operating cost during the project implementation.

- 14 - 6. Sustainability 6.1 Rationale for sustainability rating: Achievement of the principal development objective of the project, including restoration of municipal and rural infrastructure affected by the 1997 flood; and reduction of risk and vulnerability to future floods through modernization and expansion of flood management system in the country is likely to be sustained.

Financial Sustainability. The long-term sustainability of infrastructure and the effectiveness against future floods depend upon continuous funding of maintenance works and the support of institutions established to operate and maintain the systems. All facilities rehabilitated, reconstructed and restored under the project have been transferred for operation and maintenance to the responsible organizations that receive the appropriate budget allocations for their operations and maintenance. Therefore, financial sustainability is not an issue.

However, operation and monitoring and maintenance of the various technical systems developed under the project require an ongoing government financial commitment. In that respect, activities implemented under subcomponent B1, B3, and B4 all have appropriate budget allocation for their financial sustainability. Provision of adequate budget allocation for operation and maintenance of SMOK (B2) was an issue over the last two years as the major parts of the system were becoming operational. However, the Ministry of Finance has allocated a budget line to provide appropriate annual funds from the National Environmental Fund, a semi independent agency with extra budgetary funds from the EU under the Ministry of Environment.

Further, it appears that the attitude towards insurance coverage has not changed as a result of the floods. Private property insurance is not obligatory and there is no evidence of take-up, as the premiums are expensive and most people especially in the rural areas cannot afford them. Moreover, for a flood of the magnitude of 1997, it is not clear that any insurance industry without government intervention could survive or provide meaningful payout. However, provision of flood insurance would be helpful for recurrent floods of lesser magnitude.

Technical Sustainability. With regards to technical sustainability of the project, the majority of the works implemented under component A are simple, and design standards that were applied are well proven and technically sustainable. However, the operation, maintenance and monitoring of the more complex and highly technical works under component B would require technically competent operators to respond properly to any unfolding disaster. As mentioned in sections above, sufficient technical skills have been developed within the agencies to operate and manage the systems as evidenced from the running of the systems so far. However, for further upgrades the agencies may need additional assistance which can be mobilized as part of the modernization projects.

Institutional Sustainability. As for institutional sustainability, as discussed in Section 4.5, the Polish government has strengthened the institutions involved in flood protection and management from the national and regional water management institutions to the voivodship and local authorities, suggesting that institutions are sustainable and sufficiently focused on flood protection. Preparation of the proposed Odra Rive Basin Flood Protection Project had also contributed in institutional development of the involved RZGW, preparing a project of such a size and complexity that can be presented to international financial institutions for investment.

6.2 Transition arrangement to regular operations: The rehabilitated infrastructure and systems are already being utilized. The flood forecasting and warning

- 15 - system is operated by the IMGW which was the primary designer of the modernization program and was intimately involved in systems upgrade and testing during implementation. There are no issues regarding the transition of facilities to regulation operation.

7. Bank and Borrower Performance Bank 7.1 Lending: The Bank’s performance during project preparation was satisfactory and actually crucial to the project’s success. The preparation team was competent and balanced, and covered the skills needed for successful preparation. The team responded very quickly to the GoP’s request for project preparation. Preparation efforts were flexible with full participation of the client to ensure responsiveness to their needs. During project preparation and appraisal the Bank took appropriate account of the adequacy of project design, including technical, financial, and institutional, as well as procurement and financial management aspects.

7.2 Supervision: The Bank performance during implementation of the project was Satisfactory. Sufficient budget and staff resources were allocated, and the project was adequately supervised and closely monitored. The Bank supervision was particularly instrumental in implementation startup of the component B that initially suffered delays. In addition, the Bank was also responsive in getting part of the project related to flood planning, forecasting and hazard reduction due to future floods (non-emergency recovery part) extended appropriately to complete implementation of these works and to prepare the follow-up project i.e. ORFP.

Aide-memoires were regularly prepared and transmitted, flagging outstanding issues and underscoring benchmarks for actions. These alerted the government and the implementing agencies to problems with project execution and facilitated remedies in a timely manner. The Government was highly appreciative of the Bank missions in both highlighting issues to the highest level and proposing solutions to address them as well as in supporting government’s efforts in resolving disputes with the contractors. The Project Status Reports (PSRs) and the subsequent Implementation Status Reports (ISRs) realistically rated the performance of the project both in terms of achievement of development objective and implementation. The Bank paid sufficient attention to the project’s likely development impact. The quality of advice, the follow-up on agreed actions were adequate. Loan covenants were complied with effectively.

7.3 Overall Bank performance: TThe Bank’s overall performance is rated satisfactory,with good project design backed by sound supervision performance and follow up.

Borrower 7.4 Preparation: Borrower performance in preparation is considered satisfactory. Despite the emergency situation, the number of development partners, and implementing agencies, and the short period available for preparation, the government provided adequate support and worked closely with the Bank team in project preparation. There was a central coordination office, namely ONDR, and the associated PCU, and together with the Bank and teams of other partners, identified about 615 subproject to be implemented. They also managed to provide the necessary financial assistance and guidance to the implementing agencies to begin design of the non-emergency component of the project.

7.5 Government implementation performance: The government implementation performance was satisfactory, especially for the restoration and

- 16 - reconstruction activities of the project. It maintained its commitments consistently throughout implementation. The steering committee which was representing the implementing agencies and the coordinating bodies through its regular monthly meetings provided the necessary oversight and guidance to advance the implementation process. The committee was responsive for taking corrective implementation measures and effective in dealing with outstanding issues. Appropriate levels of review and approval were in place; financial accountability and follow-up was observed; and documentation was maintained properly for periodic review. The audit reports were available on time, and had no major accountability issues. Although the counterpart funding were available generally, the process by which it was getting to the implementing agencies was rather cumbersome and it caused some delays in project implementation. Given its importance, a more proactive role of MOE in the beginning of the project may have helped in early startup and implementation of the Component B. However, towards the end of the project, the MOE played a significant role in streamlining the work of its implementing agencies, RZGWs and IMGW in implementation of Component B and resolving outstanding issues

7.6 Implementing Agency: Performance of the implementing agencies’ is rated satisfactory. ONDR had the overall responsibility for project implementation, represented by the Project Coordination Unit (PCU), while responsibility for implementation of specific components and tasks was born by various other actors and entities, including, the municipalities for implementation of components A and B4; MoE, and its associated agencies such as IMGW for implementation of B2 and RZGWs (Wroclaw, Poznan, Gliwice, and Krakow) for implementation of B1 and B3; and Ministry of Agriculture and Rural Development (MARD), and Ministry of Health for implementation of B3. The PCU as the main coordinating body for the project was instrumental in quick project preparation. During implementation it provided generally proactive follow-up to mitigate any implementation bottleneck. The PCU was organized and effective in dealing with disbursement, procurement, preparation of progress reports, and in maintaining proper records of the project. Financial management procedures were conducted in line with the Bank’s guidelines. PCU staff was receptive to the Bank advice, and collaborative with all respects of implementation.

7.7 Overall Borrower performance: Overall Borrower performance is rated satisfactory

8. Lessons Learned l A quick and measured Bank response to recovery and reconstruction after a natural disaster is necessary for providing meaningful help to the countries, affected people and building a longer term relationship with the Government. This was particularly evidenced in this project as the Government appreciated the Bank’s role in coordinating the flood recovery efforts and its support during project implementation resulting in a long term relationship in the flood sector leading to a broader program in providing flood protection in the Odra River Basin; l The emergency recovery project should not be limited to restoration efforts only. In its design, due consideration should be given to longer term perspective and causes of these disasters. The project may include appropriate measures and plans for reduction of hazards and protection against recurrence of such disasters in future. Component B addressing flood hazard reduction and planning under this project served the most useful purpose in this regard; l The implementation period of an emergency recovery project should not be limited to three years. Instead, implementation period should be determined based on the scope and scale of restoration works,

- 17 - complexities involved and capacity of the country and implementing agencies. Perhaps a longer implementation period may be allowed when justified, in particular if the project includes measures for minimizing risks against recurrence of such disasters in the future. l To the extent possible, funds from development partners/financiers should be pooled together and disbursed using a simplified/unified procurement and disbursement procedures in order to speed up the implementation of recovery efforts and their completion in a timely manner. l Contract packaging and procurement planning is extremely crucial for early startup and timely implementation of the project. To the extent possible, works should be packaged into large contracts attracting qualified contractors and reducing the time required for contract management. Given the scope of work in restoration immediately after a natural disaster, the government agencies generally do not have sufficient staff to manage such works. The consultants should be made available to the implementation agencies for technical designs, procurement planning, contract management and supporting overall management and supervision of the project. l The implementation of sophisticated weather/flood forecasting systems should be done through contracts for integrated systems based on final functionality instead of installation of subcomponents of the system and then integrating them in to functional systems. These systems require a wide ranging expertise in several technical areas for preparing state of the art specifications, supervising their implementation, and functional testing. The implementing agencies cannot have all the skills required in managing the installation of such systems. Therefore, technical consulting firms should be recruited before starting the project to support preparation of system specifications, checking the compatibility of various subsystems, supervision during implementation and final testing of the systems. The technical and coordination consultants to IMGW played a crucial role in the installation of SMOK, without their technical assistance completion of SMOK may not been possible. An enhanced role of the technical consultants in preparing specifications and construction supervision would have made implementation of SMOK faster and smoother.

9. Partner Comments (a) Borrower/implementing agency: The PCU has prepared an implementation completion report that is attached in Annex 9 to this report. The borrower comments on the project that include comments from the PCU, and the implementing agencies and are included below:.

Component A

The PCU organized a survey of beneficiary opinions by asking questions to representatives of two major beneficiaries of the Project, the cities of Wroclaw and Opole, and to a few urban and rural communes. The local governments’ opinions and comments focused on the following issues: l The communes had to wait for funds very long and therefore they were forced to use their own resources to pay contractors or suppliers in due time or to stop contracted work due to the lack of funds. l The communes found it difficult to estimate the value of losses in the initial phase and afterwards were challenged by the need to secure higher amounts of the required own contribution than originally envisaged in Funding Agreements. l The Bank and the Government withdrew from the option of back financing (of projects carried out after the Loan Agreement had been concluded but before the Funding Agreements were signed),

- 18 - thus causing serious financial problems especially for the Municipality of Wroclaw l The possibility of shifting Loan funds from one subproject to another was highly appreciated as it ensured efficient utilization of almost all allocated funds. l The World Bank’s Guidelines were found too extensive. In the local government’s opinions, subprojects of smaller values should have been subject to more concise, less complicated and less detailed guidelines. l A majority of local governments were not of high opinions of the services delivered by individual consultants and the PCU in early 1998, and highlighted difficulties in obtaining reliable information. Decided improvement in quality of the services came, in commune and county epresentatives’ opinion, after three consulting firms had been hired l The local governments emphasized very good cooperation from 1999 with PCU consultants, who showed, in the opinion of those surveyed, active involvement knowledge, understanding and will to solve any problems during the implementation of the Project. l The initial tranches of Loan funds were planned improperly (statements of planned expenditure also covered those subprojects that had not been prepared for implementation yet) and caused delays in the implementation of the Project as the funds could not be accounted for within a reasonable time. l The communes were of the opinion that if Loan funds had been utilized to finance major subprojects only, they would have found the Project less difficult; a number of minor subprojects, long fund disbursement periods and rather complicated procurement procedure strongly impacted the negative assessment of the Project by contractors and suppliers. l Each of the beneficiaries strongly emphasized that the local communities positively assessed the outputs of the subprojects and were very grateful for the quick recovery of normal life in the flood-affected urban and rural areas.

Additional comments

In view of the geographical distribution and the number of beneficiaries, everybody involved would have benefited a lot, if there had been a chance to engage a consulting firm during the initial phase of the Project and avoid long-lasting international tendering. This would have been possible, if the Bank had identified and selected consulting firms in advance and then put them at the Borrowers’ disposal.

The consultants who were involved in the implementation of the Project (Component A) could be engaged in successive World Bank projects in Poland and share their experience at as early a stage as the preparation of draft loan agreements. Then, they could deliver training to project staff and also help to organize structures of offices properly.

Component B

1. RZGW Poznan, as one of the implementing agencies under Subcomponent B.1., draws attention to the following problems:

Significant involvement on the part of employees of this agency in the Project implementation, who assumed additional duties and great responsibility. The performance of additional work often forced them to go beyond their contractual working time, without any additional compensation. Hence the suggestion that implementation procedures for projects financed from foreign loans should provide for the possibility of compensating employees of implementing agencies. But now RZGW suggests that the possibility should be considered of giving all Project participants a thank-you souvenir, in the form of a plaque, diploma or statute, as symbolic appreciation of their contribution in the Program implementation.

- 19 - RZGW stresses very good cooperation with the PCU and the World Bank representatives. The PCU assisted in conducting all procedures, both required under the Polish law and required by the World Bank. It helped to obtain quickly the World Bank’s decisions, to secure the Loan proceeds and counterpart funds in due time (there had been some problems with that in the past), all decisions which could help in the timely implementation of the task were taken quickly. In the opinion of RZGW this fact needs to be emphasized, since the PCU was sparsely staffed, but its personnel was thoroughly component and well managed. Special assistance was provided during financial accounting for tasks.

In turn, the World Bank representatives demonstrated far-reaching understanding of the implementing agency’s problems, what in effect resulted in “no objections” being given quickly at each stage of the implementation. In the opinion of RZGW, both the PCU management and the World Bank representatives deserve special appreciation for fast approval of direct contracting procurement of software and for assistance in the implementation of additional procurements, in spite of procedural doubts. Thanks to a sensible approach to this matter, it was possible to carry out procurements and the Loan proceeds were utilized.

Fluctuations of the US dollar exchange rate against the local currency were also a problem. When the US dollar exchange rate was on the rise, there was no problem, but when it was dropping, a problem arose. Such situations should be taken care of, since implementing agencies unrightly bear the consequences of agreements so concluded.

2. RZGW Kraków (the implementing agency for a part of Subcomponent B.1. tasks):

It is of opinion that cooperation with the PCU came down primarily to approval of statements of expenditures in technical, formal and accounting terms. But substantive and technical support for the implementing agency was lacking.

It also suggests that the system of accountings should be simplified and information flow should be streamlined, e.g., through the participation of implementing agencies in meetings of the Steering Committee and also through the building of a system of substantive and technical consultancy for implementing agencies.

3. IMGW Warsaw, the implementing agency for Subcomponent B.2., draws attention to the following issues:

For many years IMGW faced problems with financing the Service, and it was only when the Government of the Republic of Poland took out a loan at the World Bank that it was possible to modernize the Hydrological and Meteorological Service provided by the Institute of Meteorology and Water Management.

Management and administration of the project involving the expansion and modernization of the National Monitoring and Protection System in accordance with the Bank’s rules and procedures provided IMGW with valuable, new knowledge and allowed it to formulate, based on its own experience, opinions which we hope will be taken into consideration in the preparation of any possible further projects.

In order to ensure an efficient project implementation and to fulfill contractual obligations by IMGW, it is very important to provide smooth financing and timely transfer of funds from the budget; to this end, it is necessary to simplify the Bank’s procedures for account-making and obtaining new funds, and to streamline the transfer of funds to IMGW. Disruptions in project financing caused most problems during

- 20 - the performance of contracts.

Permanent access to funds for maintenance and development is of key significance in order to ensure the continuity of operation and maintenance of all elements of the modernized State Hydrological and Meteorological Service. Securing funds in a sufficient amount and for a period longer than the current year is the greatest worry of IMGW management.

The Project Coordination Unit supported the Institute through, in particular, advisory services and financial coordination, contributing to proper financial control of the entire project. Nevertheless, we expected, especially at the beginning of the project, greater procedural assistance in the organization of the bidding process.

Consultant services were of particular significance at the initial phase of contract performance when IMGW was starting to gain experience and skills in project management and technical support in implementation of construction works, since the Institute does not employ specialists who could supervise construction works.

In future projects IMGW would expect small support from consultants in project quality management and technical support, only in the event that exceptionally complicated technical problems occur.

We are of opinion that IMGW’s participation in a project of this scale and importance was an excellent opportunity to gain practical experience in preparation of the bidding process and contracts in accordance with the Bank’s procedures and, in particular, in management of implementation of very complicated projects involving the construction of systems based on advanced technologies.

Technical knowledge of IMGW employees at the highest world level and new skills acquired during the project implementation will allow IMGW to offer the provision of consulting services by its employees in similar projects.

Component C

The Bank’s and Borrower’s performance in lending is assessed as satisfactory. There was close cooperation at the time of preparation between the Government and the Bank, and the clear vision of the goal which the Project is designed to serve ensured the appropriate and fast preparation of the Program for Poland.

Thanks to efficient cooperation of persons involved in the Program on the side of the Bank, the Government and the coordinating agency, the PCU, as well as the implementing agencies, the intended objectives and outputs were achieved. In spite of the discontinuation of the implementation of certain tasks, which were of peripheral importance to the main goals of the Project, an integrated flood management system was created covering two main basins of the country.

In spite of some difficulties faced during the Project implementation, the Project was successfully completed. The dollar exchange rate fluctuations, complicated (used for the first time by some agencies) procurement procedures of the World Bank, as well amendments in Polish laws all resulted in the prolongation of the Project closing date and failure to complete it within the originally expected time limit.

From the Bank’s side appropriate staff was assigned to lending activities, with several key members maintained throughout the whole supervision period. Supervision missions included specialists with the

- 21 - required high expertise and experience, and Project activities were monitored by local staff throughout the Project on an on-going basis. One of the most positive aspects was the Bank’s flexibility in responding to the PCU’s and implementing agencies’ proposals, e.g., regarding approval of proposed modifications in the contracts already made.

The participation of the PCU consultants in the preparation for implementation of the next investment project, “Odra River Basin Flood Protection” Project, under task B.1.7 of this Project, proved to be a good move. The PCU employees and consultants served with their experience already in the phase of preparation of the project in technical terms, as well as in the preparation of the loan agreement itself. Having adequate experience, preparation and expertise on the new Project, they were able to participate in its implementation and during its performance.” (b) Cofinanciers:

10. Additional Information

- 22 - Annex 1. Key Performance Indicators/Log Frame Matrix

Outcome / Impact Indicators: 1 Indicator/Matrix Projected in last PSR Actual/Latest Estimate Restoring basic infrastructure in 881 subprojects were rehabilitated The project has rehabilitated a large amount municipalities and rural areas affected by the of municipal and rural infrastructure in the flood affected areas, restoring the lifeline for resumption of all economic activities in the affected areas Reducing vulnerability and risk of future About 95% of the modernization has been As a result of the project, the system for flood floods, and strengthening and modernizing completed with the development of SMOK monitoring, forecasting, and warning in flood management system system. Poland involving various agencies and organizations within the country was modernized with visible benefits

Output Indicators: 1 Indicator/Matrix Projected in last PSR Actual/Latest Estimate Repair of flood damage 881 subprojects were rehabilitated Repair of 100% of sub-projects identified at project preparation completed by February 2002 and exceeded by about 20% due to increased number of sub-projects included into the Project due to cost savings Production of flood hazard maps Flood hazard maps were prepared under OKI Flood hazard maps were prepared under the and under component B4 OKI (B1) and for B4 component (local flood mgt plans).

Feasibility studies for major new flood Feasibility study completed in early 2004 Feasibility study for Raciborz dry polder and management investments Wroclaw Flood Way System completed in early 2004

Development of flood forecasting and About 95% of the modernization has been The system is completed and operational warning system completed with the development of SMOK since June 2005 system. Establishment of data transmission, Modern communication systems were Data transmission, communication and communication, and computer systems established for IMGW, RZGWs and OKIs computer system operational at IMGW, RZGWs and OKIs

1 End of project

- 23 - Annex 2. Project Costs and Financing

Appraisal Actual/Latest Percentage of Estimate Estimate Appraisal Component US$ million US$ million A 267.7 295.0 110% B1 19.4 17.78 92% B2 71.0 62.13 88% B3 126.3 141.93 112% B4 10.9 4.43 41% C 3.0 3.12 104% 105% Total Project Costs 498.2 524.31 IBRD Financing 200.0 199.0 99.5%

· IBRD funding for B2 at appraisal was US$54.6 million while actual is US$62.13 million. · Component B3 was fully financed by other donors such as CEB and EBRD, while B1, B4, and C were fully financed by IBRD. · Component A was financed by IBRD (US$114.7 m at appraisal vs US$113.8 m actual) and other donors.

Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent) 1 Procurement Method Expenditure Category ICB 2 N.B.F. Total Cost NCB Other 1. Works 36.00 83.10 57.00 153.40 329.50 (17.10) (45.30) (48.40) (0.00) (110.80) 2. Goods 66.20 0.00 34.40 11.10 111.70 (38.20) (0.00) (25.50) (0.00) (63.70) 3. Services 0.00 0.00 44.10 10.30 54.40 (0.00) (0.00) (22.50) (0.00) (22.50) 4. PIU Operations 0.00 0.00 3.00 0.00 3.00 (0.00) (0.00) (3.00) (0.00) (3.00) 5. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 6. Miscellaneous 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) Total 102.20 83.10 138.50 174.80 498.60 (55.30) (45.30) (99.40) (0.00) (200.00)

Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent)

1 Procurement Method Expenditure ICB Total Cost NCB 2 N.B.F. Category Other 1. Works 20.77 80.40 75.85 213.54 390.56 (14.94) (48.03) (36.68) (99.65) 2. Goods 66.39 (0.00) 34.21 100.76

- 24 - (55.52) (0.00) (16.00) (71.52) 3. Services (0.00) (0.00) 24.07 24.07 (0.00) (0.00) (20.27) (20.27) 4. PIU Operation 0.00 (0.00) 7.36 7.36 (0.00) (0.00) (6.39) (6.39) 5. Miscellaneous 0.00 (0.00) 1.45 1.45 (0.00) (0.00) (1.14) (1.14) Total 87.32 80.40 142.94 524.30 (70.46) (48.03) (80.48) (199.00) l PIU Operation costs include US$4.67 million paid for consultants for component A. 1/ Figures in parenthesis are the amounts to be financed by the Bank Loan. All costs include contingencies. 2/ Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units.

- 25 - Annex 3. Economic Costs and Benefits The project supported establishment of a sophisticated Monitoring, Forecasting and Warning System (SMOK) that covers all elements of the hydro-met service operations, starting from measurement and observations through system of telecommunications, data processing, forecasting and warning down to the user information system. The establishment of SMOK has resulted in creation of a credible meteorological and hydrological system to protect the national economy and the society in Poland by ensuring: l Earlier and more accurate flood hazard warning, tailored to the specific nature of the local conditions. This is of particular interest for the cities, administrative districts, arable land, industrial facilities and national heritage, threatened by floods; l Earlier and more accurate warning on dangerous phenomena such as flood, sea storms, gales, thunderstorms and showers. The warning issued in advance many prevent substantial material losses and reduce threat to human life; l Better warning and hydrological and meteorological forecasts for specific users such as aviation, maritime economy, water engineering and management, agriculture and industry; l Reduction of risk of erroneous forecasts and warning, thereby increased user trust in meteorological and hydrological services; and l Longer notice of medium-range forecasts, hence better protection of society and economy.

As mentioned in section 4.1 above, there are preliminary indicators demonstrating efficiency of the new system over the old, but so far, the economic benefits of the efficiency improvement of the system has been evaluated. Important to note that given the “Public Good” nature of the forecasting service, measurement of the economic and financial benefit is not a very simple task. To measure the precise economic benefits of the system, a specific study would need to be carried out for that purpose. As mentioned before, such a study is being carried out by the government.

However, to demonstrate the economic benefits of similar systems such as the SMOK in other places/countries, below table provides a number of indicators on the agriculture sector. The tables in this Annex are taken from, “The Economic Benefits of Weather Forecasts: Implications for Investments in Rusohydromet Services, ”by Laurie L. Houston, Richard M. Adams, and Rodney F. Weiher, May, 2004 – a report prepared for NOAA and the World Bank under NOAA contract OG 1330-04-SE-0052.

- 26 -

Table 1. Agriculture: value of long-term weather forecasts Type of Information Value of Weather Information % of Sector Source Precipitation forecasts Imperfect: $11/ha-yr Abawi et al. perfect: $19/ha-yr derived from implementing wheat (1995)* harvest strategies such as early harvesting, drying, and contract harvesting ENSO early warning Imperfect: $20-31 million/yr 0.3-2% of crop Adams et al. system Perfect: $59-79 million/yr from 5 important production value (2003) agricultural states in Mexico in the 5 states ENSO predictions Imperfect: $168 million/yr 1-2% of net Adams et al. Perfect: $254 million/yr from Southeast U.S. income of U.S. (1995)* agricultural region farmers Precipitation and Imperfect: $848-$2,276 Bowman et al. temperature forecasts Perfect: $1,314-$2,800 derived from wool producers (1995)* in Victoria Australia Changes in ENSO $482-$592 million per year Chen et al. frequency and strength From global agriculture’s use of an ENSO (2002) monitoring and early warning system ENSO predictions Imperfect: $507-$959/yr million Chen et al. Perfect: $1,768 million/yr from US agriculture (2002)* Southern African Imperfect: $178 million Harrison and seasonal forecasts Perfect:$0.72 billion Graham (2001) Precipitation, Imperfect $0-$102/ha-yr from Texas sorghum Hill et al. temperature, and producers (1999)* radiation forecasts Precipitation, Imperfect: $0-11/ha-yr Hill et al. temperature, and Perfect:$10-57/ha-yr from planning fertilizer (2000)* radiation forecasts applications on US and Canadian wheat fields Precipitation and Imperfect: $-159-$5/section-yr Jochec et al. temperature forecasts Perfect:$-49-129/section-yr from livestock ranchers (2001)* in Texas Maximum and minimum Imperfect $6-$17/ha-yr from corn, soybean, Messina et al. temperature, sunflower, and wheat producers in Argentina (1999)* precipitation, and radiation forecasts Precipitation, Perfect: $1.4-$3.2 billion over 10 years from making Mjelde and temperature, and fertilizer application decisions in the Corn Belt Penson radiation forecasts region (2000)* Precipitation forecasts Imperfect: $1,170-14,520/farm Mjelde et al. Perfect: $19,900/farm from crop type, nitrogen (1996)* application, Federal Farm Program participation, and crop insurance decisions Precipitation forecasts Imperfect: $1.2-2.3/acre from fertilizer application Mjelde et al. level, planting date and seeding rate decisions (1997)* ENSO predictions Imperfect: $297-$329 million/yr 1-2% of net Solow et al. Perfect: $400 million/yr from US agriculture income of U.S. (1998)* farmers *Values were obtained from Exhibit A.2. of Stratus Consulting report by Lazo et al. 2003.

Note: For ease of comparison, all values were converted to 2004 US dollars using the CPI from the Economic Research Service and historical exchange rates from http://www.x-rates.com/.

- 27 - Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, 1 FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation 08/10/1997 9 SENIOR ECONOMIST (1); S S WATER MGT. SPECIALIST (2); INFRASTRUCTURE (4); ENVIRONMENTAL SPECIALIST (1), EXT. AFFAIRS (1)

Appraisal/Negotiation 10/29/1997 8 SENIOR ECONOMIST (1); S S WATER MGT. SPECIALIST (1); PROCUREMENT (1); INFRASTRUCTURE (3); ENVIRONMENTAL SPEC. (1); CONSUEL (1); Supervision 06/06/1999 4 SANITARY ENGINEER U S (1); ENVIRONMENTAL SPECIAL. (1); IRRIGATION ENGINEER (1); SENIOR ECONOMIST (1); PROCUREMENT (1) 12/06/1999 2 FLOOD MAN. SPECIALIST U S (1); TEAM LEADER (1 02/21/2000 3 TEAM LEADER (1); WATER U S MANAGEMENT SPEC. (1); ENGINEER (1) 06/14/2000 5 TEAM LEADER (1); WATER S S SPECIALIST (1); ENGINEER (1); CONSULTANT (1); FIN. MANAGMENT SPEC (1) 08/03/2001 4 WATER RESOURCES SPEC S S (1); ECONOMIST (1); FMS (1); ENVIRONMENTAL ENGINEER (1) 05/09/2002 3 TEAM LEADER (1); S S ENVIRONMENTAL ENGINEER (1); ECONOMIST (1) 02/06/2003 4 TEAM LEADER (1); S S ENVIRONMENTAL ENGINEER (1); ECONOMIST (1); FINANCIAL MGMT SPEC. (1) 11/21/2003 MISSION LEADER (1); S S

- 28 - ENVIRONMENTAL ENGINEER (1); CONSULTANT (1) 03/24/2004 4 WATER RESOURCE TTL (1); S S ECONOMIST (1); ENVIRONMENTAL SPECIALIST (1) 11/08//2004 3 MISSION LEADER (WATER S S RESOURCES SPECIALST) OPERATIONS OFFICER/ECONOMIST (1);

ICR 06/02/2005 2 MISSION LEADER S S (WATER SPECIALST (10; OPERATIONS OFFICER/ECONOMIST (1))

(b) Staff:

Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) Identification/Preparation 488.6 Appraisal/Negotiation Supervision 855.1 ICR 77.5 Total 1,421.2

- 29 - Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating Macro policies H SU M N NA Sector Policies H SU M N NA Physical H SU M N NA Financial H SU M N NA Institutional Development H SU M N NA Environmental H SU M N NA

Social Poverty Reduction H SU M N NA Gender H SU M N NA Other (Please specify) H SU M N NA Private sector development H SU M N NA Public sector management H SU M N NA Other (Please specify) H SU M N NA

- 30 - Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory)

6.1 Bank performance Rating Lending HS S U HU Supervision HS S U HU Overall HS S U HU

6.2 Borrower performance Rating Preparation HS S U HU Government implementation performance HS S U HU Implementation agency performance HS S U HU Overall HS S U HU

- 31 - Annex 7. List of Supporting Documents BOARD DOCUMENTS

Project Appraisal Document, Report No. 17200 POL Loan Agreement 4264-POL Aide Memoires Project Status Reports Implementation Status and Results Documentation on loan extensions Documentation on amendment to Loan Agreement to add Operational Expenditure category Documentation of amendment to Loan Agreement to allocate funds among expenditure categories

OTHER DOCUMENTS

Report on completion of Phase I of Component B4, Flood Prevention and Risk Reduction, Project Coordination Unit, July 2000 Poland: Wroclaw Municipal Infrastructure Flood Damage Repair Project, BDS98-22, European Bank for Reconstruction and Development, 25 March 1998 Monitoring Report for Wroclaw Municipality, Wroclaw Municipal Infrastructure Flood Damage Repair, European Bank for Reconstruction and Development, April 2005 Ex Post Evaluation Report for Flood Prevention and Social Infrastructure Investments, Poland, Project F/P 1325, Council of Europe Development Bank, May 2005 Project Implementation Plan, 1997 National Reconstruction and Modernization Project, Chancellery of Prime Minister, Flood Recovery Office, August 2002

- 32 - Additional Annex 8. Monitoring Forecasting and Warning System

The primary goal of the upgrade and modernization of the Monitoring, Forecasting and Warning System (SMOK) is to protect the citizens and the national economy in Poland and to effectively and accurately warn the public on hazardous natural phenomena by predicting precisely the time and place of their occurrence and updating on their development. The B2 subcomponent covers all elements of the service operations starting from measurement and observations through the system of telecommunications, data processing, forecasting and warning down to the user information system. The implementing agency for this subcomponent was the Institute of Meteorology and Water Management (IMGW), a semi-independent legal entity reporting to the Ministry of Environment. To achieve the necessary accuracy and precision in forecasting, an advanced measurement network systems that feed real-time information on precipitation, air temperature, humidity, wind speed and direction and water levels in rivers and lakes with the help of the automated telemetry network; on rainfall and direction of movement of rain zones with the help of the radar network; and on detected lightning and direction of storm cells movement with the help of the thunderstorm/lightning detection and location network was established. The data in turn is transmitted with the help of a modern telecommunication networks and is processed, manipulated and analyzed with the help of super computers, models are run and forecasts are prepared and distributed using internet through the Client Service System to the clients and the public. A description of the various subsystems upgraded is presented below:

I. Measurement Networks and Data Collection

Upgrade of the Measurement Networks. Provision of continuous data flow is the most important element of the measurement network and the system was designed to ensure existence of this element. Modernization and upgrade of the data collection measurement networks has resulted in establishment of a sound robust system, providing hydrological and meteorological measurements and observations which is inputted to various models for forecast preparation.

Telemetric hydrological and meteorological monitoring networks. Close to 1000 remote stations were built at locations essential to provide appropriate hydro-meteorological forecasting. The measurement data transmission system is based on radio communication (44 radio transmitters) in the southern part of Poland and in the other parts of the country, it is based on GPRS. In addition, 30 Data Collection Stations (DCS) and 7 Regional Branch Offices (RBO) created, where servers with necessary software for measurement data acquisition, processing and distribution were installed. Establishment of the system has resulted in provision of a sound, robust and to a large degree independent from weather conditions system providing hydrological and meteorological measurement and observation. The system configuration enables access to measurement data with a pre-determined interval and raster, adequate to the potential and existing threats. The system feeds data to the complex meteorological and hydrological models, delivered under other sub-systems to produce accurate forecasts.

Thunderstorm/Lightning monitoring system. A new lightening observation system was built to provide valuable and needed information on formation and development of thunderstorms. The objective of this task was to provide information regarding severe weather and storm types to the public for their safety. As mentioned above, with the new system, it is now possible to: (i) determine the point of lightning strike with between 500 m and 1000 m accuracy, thereby prompt location of power line damages - forest fire and other material losses caused by thunderstorms; (ii) determine the electric condition of the atmosphere, thus forecast the probability of lightning strike with up to few hours accuracy; and (iii) the thunderstorm detection system will be complementary to the radar system and the system of automated, telemetry

- 33 - precipitation stations, thus forming a coherent system for comprehensive real-time monitoring of atmospheric phenomena responsible for intense showers and lightening hazards. All IMGW forecasting offices were equipped with system terminals with full analytical functionality; in addition to the data transmission capabilities. The system is also used for research and development work.

Enhancement of the Weather Radar System POLRAD. Under the project, a network of 8 weather radars has enhanced the quality of forecasting hazardous weather, especially rainfall and strong winds, including assessment of precipitation intensity, continuous monitoring of cloud formation and weather fronts in the country. In addition, with the future access to data from Germany, the Czech Republic, Slovakia radars, and European CERAD network, the system will allow for detection of dangerous atmospheric phenomena with greater advance than previously possible. This system is also used for research and development work. The effects of the system include: l The capacity to continuously monitor the entire area of the country in terms of such atmospheric phenomena like intense precipitation, thunderstorms, atmospheric fronts and cloud cover; l Combined with the data coming from the surface networks, the thunderstorm detection system, and the satellites, it will enable a comprehensive diagnosis of the atmospheric conditions which is the basis for credible meteorological and hydrological forecasting; l Implementation of the methodology for comprehensive precipitation area analysis with the use of the data received from the radar and fixed networks and satellites will allow for credible area precipitation forecasting in advance of 6 hours. This will enable immediate analysis of the situation in the case of particular threat caused by intense precipitation and taking the appropriate precautions; and l The radar system has increased input of data volume for mezoscale and local meteorological and hydrological models, which substantially improve hydrological forecast’s quality.

Installation and Implementation of the Upper-air Sounding System with Hydrogen Generators. Complete systems for vertical upper air sounding have been implemented in three cities. The existing infrastructure has been adapted to conduct routine, continual upper air sounding (including determination of the vertical profiles of temperature, humidity, wind direction and velocity and ozone content of the atmosphere) in line with safety regulations in the country.

Equipment for the measurement and maintenance teams. Under this task, a new measurement technology was introduced including upgrade of the Mobile Measurement Sets, and The IMGW Central Measurement and Control Laboratory was modernized giving the possibility of accrediting the equipment used in the hydro-meteorological service. The effect of the new system include · Greater efficiency and mobility of measurement teams, which is crucial in case of natural disaster; · Reduced workload of measurement teams with more capable and modern equipment; · Increased credibility of observations of the standard and signaling networks; and · Increased reliability of stations, posts and measurement instruments.

II. Data Transmission, Processing, Analyzing and Preparation of Forecasts

Upgrade of the telecommunication and Information Technology system and Development of Client Service System. The telecommunication system in IMGW performs a very important function in the overall operation of the organization. Under the project, the network was upgraded to efficiently receive the hydro-met data and information through establishment of the “Client Service System” that enables automatic and timely delivery of the products to the clients. Under this task, the needed equipment and software was provided and the staff and clients were trained in the use and operation of the new system.

- 34 - Introduction of an up-to-date telecommunications and information technology infrastructure including increased flow capacity of the lines used has resulted in accelerated and more robust data transmission both within the IMGW units and between IMGW and external users. The efficient and upgraded telecommunications and IT technology infrastructure has provided for IMGW Personnel an efficient electronic data interchange with other domestic and international meteorological units. In addition, the system has enabled access to the result of mathematical and meteorological and hydrology models as well as full fledge connection to the external data processing centers.

Upgrade of data transmission and processing systems at the Forecasting Offices and Airport Meteorological Offices. This task introduced a new system of preparing forecasts which gives each forecaster in all forecasting offices and the airport meteorological offices access to full range of observational and forecasting data that is necessary for the preparation of forecasts and warning process. Before the new system, this activity was done centrally, as neither the forecasting offices had access to the observation data, nor had the necessary capability to manipulate and analyze the data to prepare short-term forecasts. In addition, before 2002, the reliability of short-term weather forecasts for Poland generated in the Central Office of Meteorological Forecasting for the minimal temperature was about 79%, and for maximal temperature 88%. In 2004 the reliability of these forecasts was respectively 83% and 90%. Some work is being conducted on the methodology of forecast generation so to obtain even higher accuracy of short-term forecasts and for processing of these data aiming at achieving additional information having influence on the quality of elaborated weather forecasts and warnings against hazardous phenomena.

Introduction of meteorological forecasting model into operating practice. Under this task, two new non-hydrostatic numerical forecasting models with a high time and spatial resolution were put into operating practice and which enables the system to : (i) receive and process a large range of information on basic weather parameter, and so forecast the weather 78 hours in advance, including precipitation quantitative forecast, in a grid system covering significant part of Europe; (ii) provide its results to the other models, such as hydrological models or pollution transport models; and (iii) calculate models twice per day, using data from automatic measurement network. The calculations of the models are done with the help of supercomputer provided under the project.

The live operations of the system of numerical weather forecasts for the country coupled with the extensive program of scientific research and close international cooperation had enabled participation of the Polish meteorological community in the world mainstream research and application.

Upgrade of the hydrological Monitoring, Forecasting and Warning system. This task included design of a system of hydrology and development of a modeling platform to enable collection, processing (including analysis and verification) and distribution of hydro-met data as well as connection to the data base system by integration of database with hydrological and hydraulic models working in operational mode. The Modeling Platform is used for preparing forecasts as well as further analysis. The Modeling Platform integrates the hydro-meteo database with models of precipitation – runoff, wave transformation in a river bed and the operation of hydrotechnical facilities. Preparation of data for calibration of the modeling platform allowed converting a huge part of historical data from analogue into digital form. In addition, with the introduction of the new system, the hydrological forecasting offices, these offices were equipped with additional hardware and specialized software, and staff working in the hydrological forecasting offices were training in the use and operation of the new system.

Implementation of SMOK has resulted in establishment of an up-to-date technical and methodology base for accurate and credible meteorological and hydrological protection of the national economy and the society through (i) early and more accurate flood hazard warning, tailored to the specific nature of the local

- 35 - conditions. This is of particular importance for the cities, administrative, districts, arable land, industrial facilities and national heritage, threatened with inundation; (ii) early and more accurate phenomena such as flood, sea storms gales, thunderstorms and showers. This warning issued several minutes in advance many prevent substantial material losses and reduce threat to human life; (iii) better warning and hydrological and meteorological forecasts for specific users such as aviation, maritime economy, water engineering and management, agriculture and industry; and (iv) longer notice of medium-range forecasts, hence better protection of society and economy.

- 36 - - 37 - - 38 - Additional Annex 9. Project Coordination Unit in Wroclaw - Completion Report

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT LOAN NO 4264 POL

EMERGENCY FLOOD RECOVERY PROJECT

IMPLEMENTATION COMPLETION REPORT AS AT MAY 15, 2006

POLAND PROJECT COORDINATION UNIT IN WROC·AW

Country : Poland

Region : Europe and Central Asia Sector: Infrastructure, Flood Protection Lending instrument: IBRD Loan 4264 POL Project : Emergency flood recovery ICR Type: ILI

- 39 - INTRODUCTION

In July 1997, Poland was hit by a catastrophic flood with a scale not recorded for 200 years. Responding to the flood disaster, the Polish Government prepared and adopted “The National Reconstruction and Modernization Program”, which included a program of action for immediate implementation and a medium- and long-term program of flood recovery. The objective of the Emergency Flood Recovery Project was to support the implementation of the medium- and long-term component of the National Reconstruction and Modernization Program. The Project’s implementation was started on an emergency basis on January 13, 1998. The Project was completed on May 15, 2006.

The mission of the Emergency Flood Recovery Project is to reconstruct damages caused by the flood and to implement comprehensive prevention solutions which will result in taming the flood phenomenon and ensuring flood management of the highest world quality.

In the Proposed Emergency Flood Recovery Project – in the Project Implementation Plan, adopted on November 19, 1997, total expenditures of US$498 million was allocated for the flood recovery, of which the amount of US$200 million came from the World Bank loan. The final Project cost, which included expenditures accounted for through the Project Coordination Unit in Wroc·aw, was US$310,667,032.95 (without funding from other foreign financial institutions), including the amount of US$198,968,435.56 from the World Bank loan.

The scope of this World Bank’s Project, coordinated by the Project Coordination Unit in Wroc·aw, covered the reconstruction of urban and rural infrastructure in flood-hit areas, the implementation of scientific and technological solutions aimed at reducing flood risks in the future, and preparation of local communities for organized flood management actions. Investments associated with flood protection infrastructure (the reconstruction of embankments and regulation of rivers), in the original amount of US$126 million, without any share of the World Bank funds, were carried out under a separate project and, therefore, they are not covered by this Report.

Under the Emergency Flood Recovery Project, preparations were also started for the Odra River Basin Flood Protection Project; its main goal is to modernize the Wroc·aw Floodway System and to construct the Racibórz Dolny dry reservoir.

The Project was composed of the following components:

A. Urban and rural infrastructure - which included technical support, the preparation and implementation of investment projects aimed to reconstruct infrastructure at the gmina (commune) level - Water supply systems, sewage systems, and waste disposal facilities - Local roads and bridges - District heating and gas systems - Municipal and public buildings B. Flood management and flood risk reduction, which included technical support, designing and urgent investments aimed to modernize hydraulic infrastructure, modernization of flood management systems, as well as improvement of forecasting and planning - Basin flood management planning - Monitoring, forecasting and warning - Flood protection infrastructure investments

- 40 - - Prevention and flood risk reduction C. Project administration and technical support, the creation of the Project Coordination Unit (PCU) in order to, among other things, support the implementation of procurements and disbursements associated with the Project

Loan beneficiaries were as follows: l 164 gminas (communes) and 21 poviats (counties) within 7 voivodships (provinces) l Regional Water Management Boards in Wroc·aw, Pozna· and Kraków l Institute of Meteorology and Water Management (IMGW) in Warsaw l Project Coordination Unit in Wroc·aw

The Project Coordination Unit (PCU), an appropriately staffed and equipped agency, was established specifically to implement the Project.

The PCU was responsible for coordinating all efforts under the Project, especially for supporting implementing institutions, administration, accounting and financial management, for providing technical support to the gminas and poviats in public procurement, for coordinating and supervising procurements, monitoring and evaluation, as well as reporting.

COMPONENT A Urban and rural infrastructure

A. Project Data

Emergency Flood Recovery Project Component A (the Project) covered rehabilitation of infrastructure damaged by the 1997 Flood in regions located in the vicinity of the Odra River in Poland.

The rehabilitation of the infrastructure consisted in repair of structures and facilities of significant economic importance, in restoration of operational capabilities of rescue services and in provision of assistance for those who had to desert their places of residence, in both urban and rural areas.

Water-pipe networks, sewerage systems, landfill facilities, local roads and bridges, district heating systems, municipal and public buildings have been reconstructed as part of the Component.

The Project Coordination Unit (PCU), an appropriately staffed and equipped agency was established specifically to implement the Project. The agency’s operation was supervised directly by the Plenipotentiary of the Government for Flood Recovery in the rank of Minister, at present the Chief of the Chancellery of the Prime Minister. The PCU was responsible for coordinating all efforts leading to the implementation of the Project, especially for supporting implementing institutions (local governments in communes (gmina) and counties (powiat)), for providing technical assistance to the communes and counties in public procurement, for coordinating and supervising tendering procedures and also for administration, financial accounting and management, monitoring, evaluation and reporting. Summary data on the Project:

Implementing units 185 units, including: 164 communes and 21 counties in the area of 7 provinces

- 41 - Conclusion of Funding Agreements with from 27th May 1998 to 31st July 2001 implementing units Technical Support Units Consulting firms: Booz · Allen & Hamilton Inc., Proeko Ltd., Halcrow Rural Management Number of sub-projects, including: 881 § Basic List 739 § Additional List prim 86 § Additional List bis 56 Total value of sub-projects US$200 771 520.81 Including: § Basic List US$179 541 218.99 § Additional List prim US$13 072 868.69 § Additional List bis US$8 157 433.13 Loan total accounted for at the PCU level US$106 627 013.67 Including: § Basic List US$91 457 409.04 § Additional List prim US$8 927 108.65 § Additional List bis US$6 242 495.98 Number of sub-projects by sectors DH - District Heating DH – 22 HR - Buildings HR – 36 PF - Public Facilities PF – 239 RB - Roads and Bridges RB – 362 SS - Sewage System SS – 104 SW - Solid Waste SW – 9 WS - Water Supply WS – 109

In spite of the scale and complexity of the Project (881 sub-projects accomplished in the area equal to about 1/3 of Poland’s area), the final cost of the Project approximates the figure projected in the Loan Agreement.

All contractual liabilities of the implementing institutions had been paid for before the four months’ grace period of the Project Closing Date elapsed.

B. Major Performance Measures

In view of the Project outputs, which are described in section D, the Project performance is considered satisfactory. The approach to the rehabilitation of infrastructure, as a combination of reconstruction and modernization in both urban and rural areas, resulted in the achievement of the effect of up-to-date and sustained infrastructure. As the Loan Agreement for Component A was targeted on divisions of local governments (communes) exclusively, the Loan funds had been utilized to meet the most urgent local communities’ needs. A vital factor was that communes and counties had been given a chance to indicate projects by themselves in consultation with the local communities. The projects were selected by commune and county councils, which knew social needs and expectations best. The relevance of choices is confirmed by the public acceptance the subprojects enjoy in society. Since the rehabilitation finished, the Government, PCU and consulting firms have not heard any adverse opinion from the inhabitants or the media.

Thanks to the implementation of the Project, clerks of 185 commune and county councils in Poland had a

- 42 - possibility to learn how to apply and qualify for foreign aid. They could also become acquainted with the Bank’s procurement procedures and the application thereof in practice. While receiving the World Bank’s Monitoring Missions, a dozen or so beneficiaries were directly communicated the Bank’s assessments of, suggestions and comments to work progress in the implementation of local subprojects. The level of knowledge of projects funded by international institutions was changing sensibly and gradually in the course of time among the implementing units’ staff. The Project sensitized the staff to issues of importance for the institutions they worked for and contributed to institutional development by helping a part of the staff to divert to other jobs. In major cities such as Wroclaw and Opole it also resulted in establishing separate sections within the structures of the administration offices to cope exclusively with issues related to the gaining of aid funds for the cities and to implementation of successive projects.

The cooperation of the Bank’s staff, the Government and PCU during the Projects was satisfactory. Its final effect was the success consisting in the completion of the entire Project on the projected schedule, in terms of both the scope of work and funding (all funds put at the Government’s disposal were fully employed).

C. Assessment of Development Objective and Design and of Quality at Entry

The Project was of emergency nature and its objective was to support efforts of the Government of Poland to rehabilitate basic infrastructure in flood-affected communes in urban and rural areas. Soon after the 1997 flood had abated, the Government of Poland took very intensive recovery measures. At that time two aid projects were funded in Poland almost in parallel, the World Bank Project referred to in this Report and the EU PHARE-funded Reconstruction Project. Communes declared their readiness to accept the aid and to secure the required contribution of their own resources. Within a very short period they compiled lists of indispensable subprojects to be implemented in compatibility with their long-term development strategies. The required own contributions came from the Communes’ own funds, subsidies or low-interest loans from the National or Provincial Funds for Environmental Protection and Water Management and also from credits from other sources, if need was.

At that time the financial position of the Communes was rather good, most of the communes were not or only slightly indebted, so they were capable of securing the required part of own finance and thanks to this, of receiving aid funds.

Therefore there was a chance to implement subprojects whose values qualified them for International Competitive Bidding - 3 subprojects, International Shopping – 9 subprojects, National Competitive Bidding - 136 subprojects, National Shopping – 25 subprojects and Major Works – 590 subprojects. The communes also tried to improve their institutional capabilities in order to win funds from international institutions by providing additional staff (or divert the existing clerks to new jobs) and making them responsible for the implementation of subprojects, in particular for procurement and financial accounting.

The Government of Poland amended the existing regulations, thus offering a possibility of applying simplified procedures to the preparation of capital projects. Such approach significantly reduced the preparatory phase and facilitated quick implementation of the subprojects. The Council of Ministers urgently prepared and issued regulations on (i) the possibility that most construction and erection work could be performed on the basis of an application only, with no need for obtaining building permits or preparing detailed technical designs, and for making all otherwise required agreements and (ii) the possibility that public funds could be spent with the omission of a part of the provisions of the Public Procurement Law, which in turn speeded up commissioning of designs (if such designs were needed due to complexity and technicalities of the work).

- 43 - D. Achievement of Objectives and Outputs

The objectives and outputs of the Infrastructure Rehabilitation Project implemented in the flood-affected urban and rural areas were achieved to the satisfactory degree.

The assessment is slightly hindered by the lack of prioritization of objectives or specification of performance indicators in the Project Implementation Plan.

Priorities were defined exclusively in terms of subproject eligibility criteria. There were the following major eligibility factors: (i) priority given to the subproject by the local community, (ii) impact of the subproject on the reduction of risk to the people’s health, (iii) recognizing the subproject as important for the community from the economic point of view (improvement in transport, basic municipal services), (iv) applicability of the object to be constructed under the subproject in emergency situations, (v) the need to repair flood-affected buildings before the coming of winter. The PCU was of the opinion that the communes properly qualified subprojects and the implementation thereof was in the communes and inhabitants’ interests.

However, flood–affected buildings were not repaired before the coming of 1999 winter to a significant degree although high priority was given to the subprojects.

The communes rehabilitated housing buildings in a comprehensive way, which required preparation of design documentation and adjustment of the documentation to the new then applicable regulations. The approach enabled them to repair the buildings thoroughly to future tenants’ advantage, and the results of approach of this kind were expected as much as possible by local communities in towns and cities.

The infrastructure rehabilitated within urban areas falls into all sectors specified in Section A Project Data. The Project outcomes certainly brought sustained benefits for the local communities, as the subprojects involved modernization and not only reconstruction. The infrastructure thus modernized and reconstructed meets the current norms and standards which do not depart from world standards. Also financial capabilities of the towns and cities ensure that the infrastructure such as roads, housing buildings, schools, nursery schools and kindergartens, and also water-pipe networks and sewerage systems will be maintained and kept in suitable technical condition and fully operational.

Wroclaw and Opole, two major urban beneficiaries of the World Bank’s Loan, took advantage of the aid in a way that is visible and sensible for the dwellers. Aid funds were spent on rehabilitation of infrastructure such as roads, housing buildings, schools, nursery schools and kindergartens, district heating infrastructure, and also community centers, libraries, the ZOO (in Opole) and the Music Hall (in Wroclaw).

The infrastructure rehabilitated within rural areas falls mostly into the WS, SW and RB sectors. A trade-off was identified between the immediate and visible result from geographical distribution of infrastructure subprojects and the longer term benefits of intensive work to built the infrastructure into the areas’ future development strategies.

It is worth emphasizing that the local governments in rural areas chose subprojects for implementation carefully in broad consultations with the communities and in a great majority of cases the rehabilitated infrastructure will have a significant impact on long-term development of the flood-affected areas.

The rehabilitation of the infrastructure in rural areas also involved modernization, which consisted in

- 44 - construction of new water-pipe networks instead of previous water intakes in individual households and of sewerage systems instead of cesspools or septic tanks and also in rehabilitation of flood-affected roads and bringing them to higher standards. Such improved infrastructure forms the basis for development of the regions in the future.

There is no exaggeration in the statement that both the objectives and outputs of the Project in these areas are in fact greater that those projected at the time when the Loan Agreement was concluded.

E. Major Factors Affecting Implementation and Outcome

Factors beyond the control of the Government or implementing agency (PCU)

First of all, there were changes in local authorities, and some of them were trying to amend the Funding Agreements by canceling subprojects or their parts or by replacing the approved subprojects with new ones. As the subprojects had been subject to eligibility procedure and detailed reviews by PCU consultants before the Funding Agreements were concluded, proposals of new local authorities were considered carefully and the Funding Agreements were amended very rarely and exclusively for technical reasons.

The reduction of the number of public orders in Poland, due to decrease in the capital expenditure budget, resulted in lowering of bids by the bidders. In consequence this was the reason for difficulties at the stage of implementation in enforcing the contractors to assure appropriate quality of workmanship.

The need for following the World Bank’s procurement procedure, especially international procurement procedure, by the beneficiaries and PCU was often a delaying factor. On the other hand, the possibility of selecting contractors and suppliers by the application of the procurement procedure contributed to transparency of the tendering process and to selection of the most advantageous bid out of a range of offers from practically the whole world, thus giving a chance to gain the most up-to-date technologies.

The Project outcome had been affected by fluctuations in zloty to dollar exchange rates, which varied significantly during the Project implementation period, reaching 3.4 in 1997, 3.5 in 1998, 4.0 in 1999, 4.5 in 2000 and 4.1 in 2001. As the Bank’s funds were disbursed to the communes in Polish zlotys, such great exchange differences reduced the spending of the Bank’s funds which consisted of a certain amount of US dollars. Owning to this, savings occurred and the Project was enlarged by two new lists of subprojects. The first list, also called additional list prim, covered 86 subprojects, while the second, so called additional list bis covered 56 subprojects. Both lists contained subprojects that were implemented by communes and counties. Counties were new divisions of local governments formed after the Loan Agreement had been concluded. The enlargement of the Project by 21 subprojects to be implemented in the counties resulted in rehabilitation, first of all, of county-level roads of fundamental importance for local transport among communes.

Factors generally in control of the Government

Firstly, delays during the initial phase of the implementation of the Project in establishing and authorizing the PCU. This factor forced the communes to finance a part of the subprojects originally planned to be co-financed by the World Bank’s funds, by the communes’ own resources or the PHARE-funded Reconstruction Project.

The positive aspect of the above situation for local authorities and communities was the opportunity to

- 45 - review over a longer period of time both the communes’ financial abilities and the subprojects proposed as replacements. In effect, in many cases the infrastructure could not only be rehabilitated but modernized, as well. The modernization required more time to get design documentation prepared.

Secondly, delays in disbursing funds to communes. According to the PCU’s report, the average fund transfer time was 43 days of the date of application by a commune. Occasionally, this time happened to be as long as seven months.

Such long fund transfer periods resulted from the adoption of a complicated procedure where to many governmental institutions were involved in the processing of disbursement applications. The disbursements of funds were also delayed due to the need for the Council of Ministers to prepare and issue a directive and a list of communes on a yearly basis in order to form legal grounds for subsidizing maintenance and operation of infrastructure in the communes in a given year. The 1999 directive did not appear until July, the 2000 directive until May and the 2001 directive until February. Without this document there were no legal grounds for disbursing funds to the units even though the communes had submitted properly prepared applications and funds had been secured by tranches of the loan transferred by the World Bank to an account at the National Bank of Poland.

In addition, the territorial division of the country changed in 1999 and a number of legal documents needed changing, thus generating further delay. The quoted example of the ,,way" to be covered by the application illustrates practically reasons for the delay referred to above: l A commune submits its application to the consulting firm hired by the PCU l The application and the consulting firm’s acceptance come to the PCU l The PCU forwards the application (together with other applications of this kind) to the Flood Recovery Office in Warsaw (BUSP Warsaw) twice a month l BUSP Warsaw forwards the application for approval to the Minister of Economy via the Chief of the Chancellery of the Prime Minister (either decision, even disapproval, have no impact on further process of transferring funds to the beneficiaries) l The approved (or disapproved) application is returned by the Minister of Economy to the Chief of the Chancellery l The Chief of the Chancellery forwards the application to the Ministry of Finance Aid Fund Department l Having expressed its opinion, the Aid Fund Department forwards the application to the Budget Department, which prepares an appropriate fund allocation document to be signed by the Minister of Finance l The document signed by the Minister of Finance is forwarded to the Provincial Governor, who has jurisdiction over the applicant l The document forms grounds for the Provincial Governor’s decision on allocation of funds to the beneficiary l The decision is followed by the transfer of funds to the beneficiary’s bank account, once the Province has received the funds from the Ministry of Finance.

The delays resulted in interruption of work, as the Contractors had not been able to work unpaid for such a long time. During the implementation of the Project, the general economic situation of the communes and counties aggravated, thus reducing the local governments’ capacity to invest and ability to secure the required contribution of their own funds. Forced to wait for the funds for a long time, the communes and counties often used their liquid assets and were not able to pay advances to contractors and suppliers or invoices in compliance with contractual terms any longer.

- 46 - Nevertheless, huge involvement of the Governors, regional representatives of the government, in the implementation of the Project needs to be emphasized decidedly in this place.

Factors generally in control of the implementing agency (PCU)

Active involvement of the PCU strongly contributed to the closure of the Project on agreed schedule and to the achievement of the projected objective of the rehabilitation of the flood-affected infrastructure in terms of both the scope of work and the financial arrangements provided by the Funding Agreements, in spite of the delay that had occurred in the initial phase of the Project.

Three consulting firms did the PCU a good service. They had been hired by the PCU to assist communes in implementing subprojects.

Each of them serviced 1/3 of the entire Project or about 270 subprojects in a clearly defined territory. Each firm established its office in a different town at the central point of the serviced territory in order to ensure easy and quick access to beneficiaries.

The hiring of professional firms that had experience of implementing projects of this kind and of following the World Bank’s procurement procedure and that employed consultants specializing in a variety of engineering professions, finance and procurement proved effective for the efficient implementation of the Project.

The firms were responsible for assisting the communes and counties on an on-going basis in every phase of the implementation of subprojects: from conducting feasibility studies, if those were needed, through choosing the appropriate method, procuring, preparing amendments to Funding Agreements, evaluating bids and selecting the winning bidders, writing disbursement applications, to participating in final acceptance and helping in financial accounting.

The firms delivered training to beneficiaries in implementing the subprojects efficiently. Each firm made about 30 short and long-term consultants available to 60 communes and counties, equipped the consultants with means of communications, IT equipment and means of transport and delegated to work with the beneficiaries in the communities. In this way problems were tackled at source and the PCU was contacted whenever it was necessary. The consultants also supervised the quality of construction work performed on sites. The firms proved very helpful for the two-consultant staff assigned to the Project by the PCU. Good and efficient cooperation of the PCU with consulting firms and communes contributed to the successful implementation of the Project.

F. Long-term Sustainability of the Project The sustainability of the Project needs to be considered in two aspects: (i) rehabilitated infrastructure and (ii) institutional development and staff capacity building for servicing similar projects in the future.

(i) Rehabilitation of urban and rural infrastructure was combined with modernization. The infrastructure meets high standards and requirements and complies with the regulations. For the technical point of view, the infrastructure should serve the local communities over a long period of time. The rehabilitated or newly constructed water-pipe networks, sewerage systems and sewage treatment plants offer some spare capacities and will serve more households in the future, thus making grounds for future development of the region. The same applies to rehabilitated roads which are part of fundamental infrastructure and may impact decisions of potential investors on putting their capital into the region. Higher quality life of the dwellers is possible thanks to public

- 47 - buildings such as schools, nursery schools and kindergartens, surgeries, theaters, libraries and other buildings of culture, which have been rehabilitated and modernized as part of the Project. Their present standard makes everyone convinced that they will serve the public for many years. The district heating sector was modernized to a significant degree as part of the Project. Major subprojects were implemented by the Municipality of Wroclaw, where the entire district heating system was modernized in two districts of the city populated by 630 000 people. The durability of the system is estimated for at least 50 years.

(ii) The implementation process involved participation of many people representing local and central administration, among them 185 communes, the implementing agency (PCU) and ministries. This caused the persons to work out a common institutional framework for utilizing Loan funds quickly and efficiently. They had to get acquainted with the World Bank’s procurement and financial accounting procedures that were applied to the Project. By the time of the Project, foreign aid of this kind in Poland was targeted on a much narrower group of institutions, therefore this Project (along with the PHARE-funded Project) can be considered the first one that enabled so many clerks to gain experience and knowledge that might be shared in the case of other foreign aid in the future.

G. Overall Bank and Borrower Performance

Borrower

Preparation The Borrower’s performance in lending is assessed as satisfactory. There was close cooperation at the time of preparation between the Government and the Bank, and the clear vision of the goal of the Project ensured that the entire program was appropriate to Poland’s needs.

Government implementation performance

The Government’s implementation performance is assessed as satisfactory. The Government fulfilled all key conditions of the Loan Agreement. It accomplished its tasks by assigning its duties to appropriate institutions which were able to implement the Project.

Implementing agency (PCU) performance

The implementing agency’s performance is assessed as satisfactory. In spite of delays in the initial phase of the implementation after Contracts for Consultants’ Services had been concluded and new personnel assigned to Component A within the PCU, progress in the implementation of the Component improved significantly, and the Project was completed on schedule. The PCU’s proposal to add to the Project 142 new subprojects only slightly extended the entire Project, but on the other hand it ensured reasonable allocation of funds saved and efficient utilization of the Loan.

Overall Borrower performance

The overall performance of the Borrower during the Project is assessed as satisfactory.

Bank

The Bank’s overall performance was satisfactory. Appropriate staff was assigned to lending activities, with

- 48 - many members maintained throughout the supervision. Supervision missions included specialists with the required expertise. Project activities had been monitored by local staff throughout the Project on an on-going basis. One of the most positive aspects was the Bank’s flexibility in responding to the PCU and implementing units’ proposals for modifying subprojects after the Loan Agreement had been concluded and in approving the amendments quickly. The Polish initiative to add two additional lists of subprojects to the Project also met with the Bank’s understanding. The Bank’s consent to the application of the NCB and MW procurement procedures after the Polish Public Procurement Law had been amended facilitated the tendering and definitely speeded up the commencement by the communes of the procurement of works and supplies.

H. Lessons Learned

The rehabilitation of infrastructure should have been conducted in parallel with broadly understood flood management, especially with rehabilitation and construction of hydro-technical facilities. In the local governments’ opinion, the reconstruction of flood-control dykes and hydro-technical facilities still progresses too slowly and this may lead to recurrent flooding and involve rehabilitation costs.

More attention should be given to consultations with society before programs are initiated. Some subprojects happened not to enjoy the communities’ acceptance, although the PCU was of the opinion that the proper eligibility criterion of the communes’ interest was met. It is worth while emphasizing in this place that for the first time local communities were given a chance to impact on the choice of subprojects and this was secured by community and county councils through holding consultation with the communities.

Consideration could be given to the idea of establishing in Poland an implementing agency, whose staff would be properly trained both by the World Bank (in the Bank’s procurement procedure) and the Government (in the Polish legislation and cooperation with other governmental agencies) and would have the required experience of the implementation of earlier projects for efficient execution of other World Bank projects in Poland. The World Bank’s loan funds would be disbursed to beneficiaries via the implementing agency instead of via a number of ministries. This way of transferring funds might be much more efficient and would enable quicker disbursements. But the realization of the above mentioned idea would require the applicable law to be amended.

In view of the lack of such a specialized implementing agency at that time and the need to establish a new body (PCU) to coordinate all Project-related efforts, it was very difficult to implement the Project in its initial phase and delays occurred. In that situation not only Polish qualified staff was missing but also the World Bank’s delegated personnel who would have worked together with the PCU staff on the Project in Wroclaw over the period of about 3 or 4 months. Efforts should have been made to ensure continuity of services of Polish and Bank staff throughout the entire Project implementation period.

I. Partner Comments

The PCU organized a survey of beneficiary opinions by asking questions to representatives of two major beneficiaries of the Project, the cities of Wroclaw and Opole, and to a few urban and rural communes. The local governments’ opinions and comments focussed on the following issues: l The communes had to wait for funds very long and therefore they were forced to use their own resources to pay contractors or suppliers in due time or to stop contracted work due to the lack of funds l The communes fount it difficult to estimate the value of losses in the initial phase and afterwards were challenged by the need to secure higher amounts of the required own contribution than originally

- 49 - envisaged in Funding Agreements l The Bank and the Government withdrew from the option of back financing (of projects carried out after the Loan Agreement had been concluded but before the Funding Agreements were signed), thus causing serious financial problems especially for the Municipality of Wroclaw l The possibility of shifting Loan funds from one subproject to another was highly appreciated as it ensured efficient utilization of almost all allocated funds l The World Bank’s Guidelines were found too extensive. In the local government’s opinions, subprojects of smaller values should have been subject to more concise, less complicated and less detailed guidelines l A majority of local governments were not of high opinions of the services delivered by individual consultants and the PCU in early 1998, and highlighted difficulties in obtaining reliable information. Decided improvement in quality of the services came, in commune and county representatives’ opinion, after three consulting firms had been hired l The local governments emphasized very good cooperation from 1999 with PCU consultants, who showed, in the opinion of those surveyed, active involvement, knowledge, understanding and will to solve any problems during the implementation of the Project l The initial tranches of Loan funds were planned improperly (statements of planned expenditure also covered those subprojects that had not been prepared for implementation yet) and caused delays in the implementation of the Project as the funds could not be accounted for within a reasonable time l The communes were of the opinion that if Loan funds had been utilized to finance major subprojects only, they would have found the Project less difficult; a number of minor subprojects, long fund disbursement periods and rather complicated procurement procedure strongly impacted the negative assessment of the Project by contractors and suppliers l Each of the beneficiaries strongly emphasized that the local communities positively assessed the outputs of the subprojects and were very grateful for the quick recovery of normal life in the flood-affected urban and rural areas.

J. Additional comments

The consultants who were involved in the implementation of the Project (Component A) could be engaged in successive World Bank projects in Poland and share their experience at as early a stage as the preparation of other projects. Then, they could deliver training to project staff and also help to organize structures of offices properly.

COMPONENT B Flood management and flood risk reduction

A. Project data

Subcomponent B of the Emergency Flood Recovery Project covered Flood management and flood risk reduction and it included: technical support, designing and urgent investments aimed to modernize hydraulic infrastructure, modernization of flood management systems, as well as improvement of forecasting and planning.

- 50 - Under this Component, three Subcomponents were implemented: B.1. - Basin flood management planning B.2. – Monitoring, forecasting and warning B.4. – Prevention and flood risk reduction.

Subcomponent B.3. – Flood protection infrastructure investments - is excluded from this report due to its financing from the European Investment Bank funds.

Under Subcomponents B.1. B.2. and B.4., a number of tasks were implemented which were introduced to the Project under the Component B Implementation Plan. In order to systematize the implementation of particular tasks, the Component B Specific Implementation Schedule was prepared, which was adopted and approved by the Steering Committee. With the passage of time, it was modified by introducing or abandoning particular tasks. Each modification of the Schedule also required approval by the Steering Committee. In accordance with the last Component B Implementation Schedule, approved on October 28, 2005, the following tasks were implemented under Component B:

Subcomponent B.1.

B 1.1.2 Flood Management Coordination and Information Centers B.1.2.2.1 Individual consultant for preparation of technical specifications for B.1.2.2.2 and supervision over implementation of this task. B.1.2.2.2 Development of cross sections B.1.2.3.1 Individual consultant for preparation of technical specifications for B.1.2.3.2 and supervision over implementation of this task. B.1.2.3.2 Digital terrain models and digital topographic maps. B.1.3.1 Individual consultant for preparation of bidding documents for task B.1.3.2. B.1.3.2 Development of a flood protection strategy for the Upper and Middle Odra river and a strategy for the Upper Vistula river. Implementing agency: RZGWs Wroc·aw and Kraków - ABANDONED: the Steering Committee’s decision of May 9, 2002 B.1.3.3 Preparation of a feasibility study for the Racibórz flood control reservoir on the Odra River expanded to include a feasibility study on modernization of the Wroc·aw Floodway System B.1.3.4 Operating expenses B.1.5 Development of flood protection plans for the Upper Vistula river and a feasibility study - TASK ABANDONED: the Steering Committee’s decision of February 18, 2004 - upon the motion of the Director of the MoE Water Resources Department B.1.6 Additional equipment for RZGW in order to meet obligations resulting from the new water law, with special attention to the Flood Management Coordination and Information Centers’ needs B.1.6 Package I Supply and installation of computer equipment, IT networks, peripheral equipment, together with training B.1.6 Package IIa Supply, installation and technical support of GIS software B.1.6 Package IIb Additional supply and installation of GIS software, Intergraph type, and necessary users training B.1.6 Package III Supply of ORACLE license B.1.7 Preparation for implementation of the Odra River Basin Flood Protection Project

Subcomponent B.2.

B.2.1 Construction and implementation of the telemetric hydrological and meteorological measurement

- 51 - network B.2.1.1 Individual consultant for preparation of RFP B.2.1.2 Design of the telemetric hydrological and meteorological measurement network B.2.1.3 Construction of the telemetric hydrological and meteorological measurement network B.2.2 Upgrade of hydrological warning and forecasting system B.2.2.1 Individual consultant for preparation of RFP B.2.2.2 Design of hydrological warning and forecasting system B.2.2.3 Software and implementation of IT system for the warning and forecasting system B.2.2.4 Development of alternative forecasting models for mountainous areas. Adaptation of existing models to the new system [B.2.2.5] B.2.2.5 Purchase of computer equipment, accessories and application software B.2.2.5 A Purchase and installation of ORACLE database B.2.2.5 B Upgrade of IMGW’s IT infrastructure for the Hydrology System B.2.2.5 C Uninterruptable power supply for IMGW units and connecting regional observation and measurement stations to the IMGW wide area network. Purchase of computer equipment and software for the State Meteorological and Hydrological Service systems. B.2.2.5 D Purchase of office equipment for meteorological and hydrological forecasting offices B.2.3 Upgrade of data transmission and processing systems in forecasting offices and airport meteorological offices B.2.3.1 Consultant for preparation of technical specifications B.2.3.2 Upgrade of data transmission and processing systems in forecasting offices and airport meteorological offices B.2.4 Implementation of the meteorological forecasting model into operational practice B.2.4.1 Consultant for preparation of technical specifications B.2.4.2 Implementation of the meteorological forecasting model into operational practice - B.2.5 Upgrade of IMGW’s IT system and the Customer Service System and implementation of task B.1.1.2 [communications of Coordination and Information Centers] B.2.5.1 Consultant for preparation of technical specifications B.2.5.2 Upgrade of IMGW’s IT system and the Customer Service System B.2.7 Equipment for surveying and maintenance teams B.2.7.1 Consultant for preparation of technical specifications B.2.7.2 Purchase of geodetic instruments for surveying teams B.2.7.3 Purchase of computer equipment for surveying and maintenance teams - B.2.7.4 Equipment for surveying and maintenance services B.2.7.5 Purchase and installation of equipment and accreditation of control laboratory for instruments B.2.8 Installation and implementation of an automated lightning detection and location system B.2.8.1 Consultant for preparation of technical specifications B.2.8.2 Construction and implementation of an automated lightning detection and location system B.2.9 Development of the POLRAD weather radar system B.2.9.1 Consultant for preparation of technical specifications B.2.9.2 Development of the weather radar system B.2.10 Subcomponent B.2 management B.2.10.1 First furnishings for the office of the Subcomponent Technical Support Team B.2.10.2 Operating expenses B.2.11 Not assigned B.2.12 Technical support relating to quality supervision B.2.12.1 Individual consultant for preparation of RFP B.2.12.2 Consulting firm for technical support relating to quality supervision together with consultations [B.2.11 and other consultants]

- 52 - B.2.13 Technical support for technical and construction supervision B.2.13.1 Selection of individual consultant for preparation of RFP B.2.13.2 Consulting firm for technical and construction supervision B.2.15.2 Preparation of assumptions for IMGW restructuring – TASK ABANDONED: the Steering Committee’s decision - upon the motion of IMGW dated December 16, 2002 B.2.16.2 Modernization of aerological measurements system B.2.16.2A Modernization of aerological measurements - construction adaptation works B.2.16.2B Modernization of aerological measurements - purchase and installation of instruments

Subcomponent B.4.

B.4.1 Local Flood Management Units (BLOP) in Wroc·aw and Kraków - Technical Support Units (TSU) B.4.1.1 Development of principles of organization and operation B.4.1.2 Selection of consultants for BLOPs (TSUs) in Wroc·aw and Kraków B.4.1.4 Furnishings for two offices B.4.1.4.1 Vehicles B.4.1.4.2 Furniture B.4.1.4.3 Office, presentation and computer equipment B.4.2 Preparation of guidelines supporting the development of flood loss reduction and flood prevention plans and publication of handbooks B.4.2.1 Determination of types of flood risk zones necessary to implement subcomponent B.4. B.4.2.2 Development of methods of flood loss reduction and publication of handbooks B.4.3 Local flood loss reduction and flood prevention plans B.4.3.1 Selection of pilot units (Phase II) and evaluation of local plans for Phase I and Phase II B.4.3.2 Conduct of training and education and information in pilot units – Phase I and II - ABANDONED by the Steering Committee’s decision of May 7, 2001 B.4.3.3 Organization of local teams coordinating preparation of local flood loss reduction and flood prevention plans B.4.3.3.1 Phase I B.4.3.4 Consulting services to support preparation and implementation of plans in Phase I and II B.4.4 Analysis of options to implement a flood insurance system in Poland - ABANDONED by the Steering Committee’s decision of February 27, 2002 B.4.5 Implementation of local flood loss reduction and flood prevention plans B.4.5.1 Goods procured for the needs of achieving readiness and ways of responding to hazards (partly grants depending on B.4.3.1) B.4.5.1.1 Phase I B.4.5.1.2 Phase II B.4.5.2 Minor works (partly grants depending on B.4.3.1 outputs) B.4.5.2.1 Phase I B.4.5.2.2 Phase II B.4.6 Short-term consulting services to support preparation and implementation of local flood loss reduction and flood prevention plans B.4.6.1 Reviews - at the level of the implementing agency (PCU)

Implementing agencies for Subcomponent B1 were Regional Water Management Boards (RZGWs) in Wroc·aw, Kraków and Pozna·, for Subcomponent B.2. - the Institute of Meteorology and Water Management in Warsaw, whereas for Subcomponent B.4. the implementing agency was the PCU. These agencies were responsible for the implementation of Component B tasks.

- 53 - B1 B2 B4 Implementing Regional Water PCU reporting to the Institute of Project Coordination agencies Management Boards Ministry of Interior Meteorology and Unit in Wroc·aw (RZGWs) – in and Administration Water Management reporting to the Head Wroc·aw, Kraków Preparation of the (IMGW) in Warsaw of the Chancellery of and Pozna· reporting Odra River Basin supervised by the the Prime Minister to the Ministry of Flood Protection Ministry of Environment Project Environment Date of signing April 1, 1999 July 2003***** May 19, 1999 April 2, 1999 orders to carry out the work scheduled for implementation under subcomponent B.1 and the Agreement relating to the implementation of Subcomponent B.2. Number of tasks to be implemented under separate World Bank procurement 10 tasks ** 7 tasks 29 tasks**** 38 tasks procedures in acc. with the Implementation Schedule for Component B, approved by the Steering Committee on August 25, 2004 Estimated value of the World Bank US$ 16,365,509 US$ 2,100,000 US$ 63,334,491 US$ 4,430,962 Loan necessary for implementation of tasks Number of tasks ------launched

Number of tasks 10 tasks 7 tasks 29 tasks 38 tasks completed

Total Loan amount US$ 4,430,961.84 paid out for the US$16,646,353.18 US$1,234, 966.11 US$63,339,068.03 implementation of tasks

- 54 - Total Loan amount allocated for the US$16,643,772.45 US$ 1,081,904.38 US$63,069,582.94 US$ 4,430,961.84 implementation of tasks and accounted for at the PCU level Scheduled date of December 15, 2005 Dec. 15, 2005 Dec. 15, 2005 Nov. 14, 2002.*** completion of the implementation of tasks * The date given relates to the establishment of two technical support units – BLOP Wroc·aw and BLOP Kraków, which supported the implementation of B.4 Subcomponent tasks. **Additionally - three tasks were abandoned by the Project Steering Committee’s decisions (B.1.1.1, B.1.3.2, B.1.5) *** This date indicates the date of final accounting for the last task implemented under B.4 subcomponent **** Additionally - two tasks were abandoned by the Project Steering Committee’s decision (B.2.15.1 and B.2.15.2). *****The date indicated relates to the approval by the Head of the Chancellery of the Prime Minister of amendments in the PCU Organization Rules which allowed the “Racibórz Reservoir" Project Preparation Unit to be formed.

Basin flood management planning (Subcomponent B.1) consisted in creating a modular geographic information system for flood prevention needs, emergency planning and preparation of preventive measures. IT systems (GIS, databases) applied here and digital technology allowed a huge amount of data on flood risk areas to be collected and digital topographic maps and the digital terrain model (DTM) to be developed. It enables the simulation and hydrodynamic modeling of the flood extent in case of dike failures, large water discharge from retention reservoirs or large run-offs resulting from precipitation, in accordance with pre-defined different scenarios. The database of the system is fed with information from the digital terrain model, information from topographic and thematic maps, as well as with data from meteorological and hydrological monitoring systems. Outputs of mathematical models, aerial and satellite photos and digital maps are used for their operations by three Flood Management Coordination and Information Centers (OKI Centers), established under this Subcomponent, which operate within the area of the main basins of the country. Equipped with modern equipment which enables a situation analysis to be made upon the occurrence of any flood risk, as well as flood management planning in the period when there are no flood risks, specialist personnel of the Coordination and Information Centers make graphic analyses, interpret events and work out relevant decisions. Under this Subcomponent, the Feasibility Study for the Racibórz flood control reservoir on the Odra river and the study for the Wroc·aw Floodway System were also prepared, as well as the “Odra River Basin Flood Protection” project was prepared for implementation. It comprises two large investment projects: the construction of the Racibórz reservoir and the modernization of the Wroc·aw Floodway System. “Monitoring, forecasting and warning” (Subcomponent B.2.) involved the creation of a system for monitoring hydrological and meteorological conditions within the territory of Poland, which would facilitate forecasting and warning against dangerous natural phenomena, as well as the collection and dissemination of information and outputs relating to the current state of the hydrosphere and atmosphere. This system is linked in a certain way to outcomes and outputs of Subcomponent B1 tasks, in particular, with respect to the development of the digital terrain model or the preparation of all river channel cross sections.

From August 31, 2000 until June 15, 2005 all planned tasks were performed relating to supplies, installation works and IT works under Subcomponent B2 – the National Monitoring and Protection System

- 55 - (SMOK System), which in practice covered the modernization of main areas of operation of the State Hydrological and Meteorological Service of the Institute of Meteorology and Water Management. The implementing agency for all Subcomponent B2 tasks was IMGW Warsaw. In total, 26 contracts for a total amount of about PLN300,000,000 were implemented. 33 contractors and consortium members, as well as 57 subcontractors and suppliers, participated in the modernization.

In effect, the process of modernization of the State Hydrological and Meteorological Service of the Institute of Meteorology and Water Management was completed, and the system built is being implemented for operational practice at the Institute. The telemetric system of the measurement network is made up of 989 posts. Along with the construction of the network, network management software was developed, that is, among others, data collection, processing, archiving and visualization and the provision of data to other modules of the National Monitoring and Protection System. The territory of the whole country is covered with monitoring, but with different degrees of saturation with installations.

The modernization process, whose scale and implementation time are unique world-wide, led to the creation of the technically and technologically very modern State Hydrological and Meteorological Service of the Institute of Meteorology and Water Management.

“Prevention and flood risk reduction” (Subcomponent B.4.) consisted in flood mitigation by means of organizational and legal measures, i.e., the so-called non-structural methods which included: the preparation of flood warning systems, protection of structures located in floodplains and the preparation of residents and land users in floodplains for flood. Gminas and poviats were provided with support in the preparation of their own flood mitigation programs, incorporating primarily nonstructural methods of flood loss reduction. These methods included, inter alia, the preparation of floodplain maps for the base flood, the expansion of knowledge and awareness of local communities, technical assistance how to prepare for flood and how to respond to it, addressed to local governments and administration, as well information policy how to create individual conditions to reduce risks to human life and property. Pilot Local Flood Loss Reduction and Flood Prevention Plans were prepared and implemented. Such pilot local flood loss reduction and flood prevention plans were implemented in two phases. In the first phase, programs for four local government units were prepared and implemented, whereas in the second phase, for the next eight units. The program implementation was supported by two Technical Support Units operating under the name of Local Flood Management Units (BLOP) in Wroc·aw and Kraków, whose operations covered the Upper and Middle Odra river and the Upper Vistula river.

B. Major Performance Measures

The Project performance is considered satisfactory. The implementation of Subcomponent B.1. tasks led to improvement of the flood management system, and to a large extent it reduced flood risks. Thanks to the implementation of this program, the Flood Management Coordination and Information Centers were formed and implemented in Kraków, Wroc·aw and Gliwice, and they were furnished with the most modern computer and logistic equipment, as well as necessary software and simulation models. Activities of these Centers are chiefly related to flood prevention and management. Their operations cover the Odra and Vistula river basins. They support administrative and operational actions undertaken during draughts, as well as during floods. The database provides access to any necessary information relating to flood forecasting, flood management and measures designed to mitigate flood effects. The construction of the Digital Terrain Model and the use of digital maps enable the identification of threatened zones and structures, adjustment of spatial development plans for these zones, identification of weak points in existing flood protection structures and support of emergency actions. A complete set of planning documentation was prepared, necessary for the implementation of the Odra River Basin Flood Protection Project.

- 56 - Under Subcomponent B.2., a comprehensive system was created which streamlines and also facilitates forecasting and warning against dangerous natural phenomena, as well as the collection and dissemination of information on the current state of the hydrosphere and atmosphere. A system for automatic monitoring and forecasting of conditions of the hydrosphere and atmosphere was created. The comprehensive presentation of the current hydrological and meteorological situation is provided to the Coordination and Information Centers operating attached to basin management boards, which in turn take relevant decisions based on it. The technically and technologically very modern State Hydrological and Meteorological Service of the Institute of Meteorology and Water Management was also created.

The implemented Subcomponent B.4. produced materials in the form of guidelines, studies and experiences which can be used by gminas not participating in the program. Effective flood loss reduction methods and preventive measures in this area were tested in practice and selected in Polish conditions. Principles of constructing local flood warning systems were developed and implemented in pilot gminas. Adequate information dissemination structures were also created, which incorporate cooperation with the media through, among other things, publications and websites on the Internet. A series of 7 handbooks was published under the common title “Flood mitigation in local scale”.

The joint achievement of all Subcomponents under Component B is trained specialized personnel necessary for the correct operation of the flood management systems created under the Project and personnel at the decision-making level. The implementing agencies were furnished with appropriate computer equipment which allows them to perform their tasks efficiently. The flood warning system was also streamlined, what in effect minimizes losses before, during and after flood.

A delay in the implementation of Component B was primarily attributable to problems associated with the Project implementation in the first phase of implementation, since the initially prepared Project Implementation Plan (PIP) for Component B proved to be wrong and impossible to be implemented. The work on the implementation of Component B tasks was launched only after the new Implementation Plan was prepared in 2001. Initially, the application of the World Bank procedures, generally new to the implementing agencies, in the selection of contractors also proved to be a difficulty. Another reason which contributed to the prolonged time of implementation of tasks was significant amendments in Polish laws.

C. Assessment of Development Objective and Design and of Quality at Entry

Almost immediately after the 1997 flood had abated, the Government of Poland took very intensive recovery measures. The implementation of the Emergency Flood Recovery Project was launched on an emergency basis on January 13, 1998. In the Project Implementation Plan, prepared on November 19, 1997, a US$80mn allocation was made for Component B purposes. The Project was of urgent nature, and its aim was to support the Polish Government’s actions designed to reduce threats and risks of any possible floods in the future through the carrying out of most urgent repairs in the flood management system and improvement in policy and institutional capabilities in the implementation of a more efficient flood management system.

The measure of performance of the central government and voivodships located within the Odra river catchment was the creation of a more effective flood management system which would reduce effects of future floods. The implementation of Subcomponent B tasks was assigned to such implementing agencies as: IMGW, RZGWs in Wroc·aw, Krakow and Pozna·, and in the case of Subcomponent B.4., the PCU. The Project Coordination Unit was the agency which coordinated the entire project.

- 57 - The selection of contractors and consultants, which proved to be necessary in the implementation of articular contracts, was carried out in accordance with the World Bank requirements.

The flood exposed poor technical and organizational capabilities of important centers responsible for the information and decision-taking side in the case of the occurrence of such a large threat which the said flood was. An important element in the operation of the Regional Water Management Boards (RZGWs) is the water management IT system introduced in the Water Law, amended in 1997, which cannot operate without appropriate equipment and software. The economic situation prevailing then in the country made it impossible for almost every RZGW to start the implementation of the IT system due to the lack of adequate equipment and GIS software. With regard to flood protection, where procedure algorithms for modeling flood events were known, tools for their implementation were lacking. Under the Emergency Flood Recovery Project, several tasks were formulated designed to radically change the above described situation. The aim of one of these tasks (B.1.6) was to create such a technical level and training level which would enable the Water Law provisions to be implemented. Its implementation aimed to equalize the level of all RZGWs in terms of IT equipment and personnel training. During the development of the implementation plan for the Emergency Flood Recovery Project in the years 1998 –1999, the main assumption for the IT system was: a. to equip all RZGWs with the most modern equipment and software in a quantity which would enable a large and coherent IT system to be created b. to develop a user-friendly application of the full water management IT system and to implement it in all RZGWs c. to utilize computing capabilities of the system for the creation of the Water Management IT System (not to be satisfied with only the flood protection module) d. to treat all RZGWs on equal terms

Among other things, it was planned to procure equipment and software for all RZGWs, to develop the digital terrain model (DTM) and digital topographic map for all valleys of Poland’s main rivers and all larger tributaries of the Upper Vistula river and the Upper Odra river, to develop cross sections for most rivers in Poland, a GIS application supporting flood protection tasks carried out by the Coordination and Information Centers. This application was to form the basis for the water management IT system.

As a result of different twists and turns under the Emergency Flood Recovery Project, implemented since December 1997, changes in the conceptual design of this project, changes of the implementing agencies, etc., it was only in 2002 that the concept to equip all RZGWs with modern equipment and software was revived.

IMGW, as the implementing agency for Subcomponent B2, also needed co- financing from aid funds to streamline its operations. This subcomponent of the Project envisaged the creation of the National Monitoring and Protection System – SMOK System. The Upper Vistula Hydrological Protection System “VISTEL”, built at the beginning of the 90s, served as a model for this system. This system repeatedly proved efficient during floods with different intensity. However, due to its power supply dependence on the power grid and the location of posts too low above the water-table, it could fail during the occurrence of such a large flood as in 1997. Streamlining the provision of information to the State authorities and enhancing the operational effectiveness of the State Hydrological and Meteorological Service of the Institute of Meteorology and Water Management during natural disasters, through the upgrade of the Service’s technical facilities, were also of great importance.

The PCU was the implementing agency responsible for implementation of Subcomponent B.4., designed to

- 58 - provide support to gminas in the preparation of their own flood mitigation programs. They primarily included nonstructural methods of flood loss reduction. Until then, these methods had not been used in Poland in a systematic and well-thought-out way. There was a need to raise the public awareness and expertise of persons involved in the implementation of Local Flood Loss Reduction and Flood Prevention Plans. The preparation and implementation of these plans was the main objective of this Subcomponent.

D. Achievement of Objectives and Outputs.

Objectives and outputs of Subcomponent B, Flood Management and flood prevention, were achieved to the satisfactory degree. The system covered two main basins of the country: the basins of the Odra and Vistula rivers. Although the scope of the project was extremely far-reaching and complicated, most of Subcomponent B tasks were implemented successfully.

Under Subcomponent B.1, a basin flood management planning system was created. Three Flood Management Coordination and Information Centers were formed, furnished with modern computer and logistic equipment, as well as software (GIS, Geomedia package, ARCGIS package and Oracle database) and simulation models. The aim of the operation of the Coordination and Information Centers is to collect, process and provide information related to flood protection. This information is based on the Digital Terrain Model and topographic maps. Flood risk maps were also prepared by means of hydrodynamic modeling. The level of all Regional Water Management Boards was equalized, and they were furnished with the most modern IT equipment and their personnel were adequately trained. As a result, a system was created which enables: - identification of threatened zones and structures, adjustment of spatial development plans for these zones and preparation of people, - identification of weak points in existing flood protection structures, - support of emergency and rescue actions, verification of new investment projects for hydraulic structures.

During the Project implementation, the Steering Committee took a decision to discontinue two tasks included in Subcomponent B.1.; the first one related to: Development of a flood management strategy for the Upper and Middle Odra river and a strategy for the Upper Vistula river, whereas the other one: Development of flood management plans for the Upper Vistula river and a feasibility study. The delayed work under task B.1.2.3.2 (DTM) made it impossible to use the Digital Terrain Model and digital topographic maps for verification and calibration of the Odra river model for Wroc·aw which was under construction and for activities included in the work on the feasibility study for the Wroc·aw Floodway System. Thus, the authors of the study made use of the Odra valley model constructed based on surveying measurements, valley cross sections and other specific data for the city of Wroc·aw.

Under task B.1.1.2 (Coordination and Information Centers), a part of procurements was abandoned due to the lack of funds resulting from a low exchange rate of the US dollar at that time.

Under Subcomponent B.2., all planned tasks were performed relating to supplies, installation works and IT works, except for task B.2.15.2 Preparation of assumptions for IMGW restructuring; the Polish side discontinued its implementation upon the motion of IMGW. The National Monitoring and Protection System (SMOK System) was created, which in practice covered the modernization of main areas of operation of the State Hydrological and Meteorological Service of the Institute of Meteorology and Water Management. The system built is being implemented for operational practice at the Institute.

- 59 - The aim of this project was to create in the country a comprehensive, modern system for monitoring, forecasting and warning against dangerous natural phenomena (floods, strong winds, storms, etc.), as well as for collection and dissemination of information on the current and expected state of the hydrosphere and atmosphere. The system covers the whole territory of Poland. Although the National Monitoring and Protection System is chiefly orientated towards flood management, but its main assumptions also include monitoring, forecasting and warning against other phenomena such as storms, very strong winds, sea storms. This system will also operate effectively in case of prolonged draughts, frosty winters with heavy snowfalls, pollution of running waters and radioactive contamination of air.

In effect, modern technical facilities and a methodological base were created which enable precise, reliable meteorological and hydrological protection of the national economy and society.

Under Subcomponent B.4., Local Flood Loss Reduction and Flood Prevention Plans were prepared and implemented in twelve territorial self-government units. Measures taken under local flood mitigation plans had the following effects: construction developments in floodplains were restricted, structures located in floodplains were modernized and protected against flooding; systems were prepared which enable people, firms and institutions to be warned against coming threats; flood response systems were prepared which enable organized and efficient protection or rescue actions. Methods were also defined and handbooks on flood mitigation methods were prepared in territorial self-government units. The effect of all these activities was to enhance the society’s and the authorities’ capability to reduce their susceptibility to flood risks.

Under this Subcomponent, the Steering Committee took a decision to abandon the task relating to Conduct of training and education and information in pilot units. The Committee also took a decision to discontinue the task Analysis of options to implement a flood insurance system in Poland, since the material presented by the Contractor proved to be unacceptable.

E. Major Factors Affecting Project Implementation and Outcome

Factors beyond the control of the Government or PCU

The need for following the World Bank procurement procedures, especially international procurement procedures, by the beneficiaries and PCU was often a delaying factor in the implementation. On the other hand, the possibility of selecting contractors and suppliers by the application of these procedures contributed to transparency of the tendering process and to selection of the most advantageous bid out of a range of bids from practically the whole world, thus giving a chance to gain the most up-to-date technologies.

The Project outcome was affected by fluctuations in PLN to US dollar exchange rates, which varied significantly during the Project implementation period ranging between 2.9845 and 4.6975. In 2005 the low US dollar exchange rate caused a part of tasks to be limited.

In the course of the Project implementation, the construction law provisions were amended, inter alia, with respect to the obtaining of building permits, what caused long delays in the implementation of certain tasks

- 60 - under Subcomponent B.2.

Factors generally in control of the Government

The Government was responsible for releasing funds for the Project implementation upon the PCU’s application.

The Special Account was maintained by the Ministry of Finance. The transfer of funds was different for Subcomponent B4, for which the PCU was the implementing agency, than for Subcomponents B1 and B2, supervised by the Ministry of Environment.

Under all Subcomponents, applications for funds were submitted via the PCU. Funds were released by the Ministry of Finance, for Subcomponent B4 through the Chancellery of the Prime Minister, and for Subcomponents B1 and B2 through the Chancellery of the Prime Minister (later on, the Ministry of Interior and Administration) and the Ministry of Environment.

The number of institutions involved in the process of releasing financial resources prolonged the time necessary for processing an application, what sometimes put at risk the financial liquidity of the Project with the pool of funds restricted to the authorized allocation limit.

At the same time, the national system for budgetary transfers, which the World Bank loan proceeds were also subjected to, made it impossible to use such facilities as direct disbursements from the Loan account or special commitments.

Factors generally in control of implementing agencies

During the implementation of certain tasks, the implementing agency changed (sometimes even twice). There were also tasks for which it was not easy to select a procurement procedure, what sometimes caused its change in the course of the bidding process. For most of Subcomponents B.1 and B.2. tasks, individual consultants were selected to prepare bidding documents, which was a factor supporting agencies responsible for the implementation of these tasks. In the course of the implementation of Subcomponent B.2., IMGW also cooperated with consulting firms in quality supervision and technical and construction supervision.

Similarly the PCU, as the implementing agency in the Subcomponent B.4. implementation, based itself on cooperation with consultants of the Local Flood Management Units in Wroc·aw and Kraków, the consultant who technically supported the development of digital models of flood risk zones for pilot gminas, consultants-coordinators for organization of local teams coordinating the preparation of Local Flood Loss Reduction and Flood Prevention Plans, and field consultants who provided expert’s reports supporting the implementation of Local Flood Loss Reduction and Flood Prevention Plans.

The cooperation of the implementing agencies with contractors was generally satisfactory. However, in the case of one conflict relating to a Subcomponent B.4. task, it was necessary to settle the said dispute through international arbitration. This matter ended in success for the contracting authority under the Project, represented by the PCU. But the other conflict, related to the implementation of a Subcomponent B.1. task, can be referred to arbitration in the near future; the contracting authority under the Project will be represented by RZGW Kraków.

- 61 - F. Long-term Sustainability of the Project

In the case of such a complex and wide-reaching Project in terms of its scope, made up of different flood management systems, such as: systems for flood management planning, monitoring, forecasting and warning against dangerous meteorological and hydrological phenomena, as well as local flood protection systems utilizing nonstructural procedure methods, the long-term sustainability of the Project will be affected by different factors, but the most important factor will be funds for their maintenance.

Very modern equipment and software with very high operational parameters were procured for the needs of effective operation and implementation of the programs of the Coordination and Information Centers, as well as RZGW and IMGW units. It can be assumed that in spite of the fact that progress in IT is very fast, the purchased equipment guarantees that it will remain modern for at least a 5-year period of use. With the lowering technical parameters, due to natural aging, this equipment and software may still serve another 3-5 years. Worth noticing are high computing capabilities of the delivered equipment and software which can be used for any needs arising in the relevant units - beneficiaries of the Project.

In the case of the implemented Subcomponent B.2 and the modernization of the State Hydrological and Meteorological Service carried out thereunder, which lasted about 5 years, it has already turned out that some systems and equipment are obsolete and depleted, and this process is taking place very fast. A good example is a supercomputer, which has been in operation since 2001, and processors used in it are already withdrawn from production. It was predominantly a computing and IT project, and a very dynamic development of technologies in these areas causes such systems and installations to age technically and morally very quickly.

It turns out that the abovementioned implemented projects, such as the Coordination and Information Centers and DTM, are only the first step in building the defined system. The further development and usefulness of the work completed or procurements will depend on financial possibilities of the maintenance of trained personnel and investments in their further development, as well as on the maintenance of tools (equipment, software - upgrade, etc.).

G. Overall Bank and Borrower Performance

Borrower

The Borrower’s performance in lending is assessed as satisfactory. There was close cooperation at the time of preparation between the Government and the Bank, and the clear vision of the goal which the Project is designed to serve ensured the appropriate and fast preparation of the Program for Poland.

Government implementation performance

The Government’s implementation performance is assessed as satisfactory. The Government fulfilled all key provisions of the Loan Agreement. It accomplished its tasks by assigning its duties to appropriate institutions which were able to implement the Project.

Performance of implementing agencies The implementing agencies’ performance is assessed as satisfactory. In spite of many difficulties which the implementing agencies faced during the Project implementation, the Project was successfully completed. The dollar exchange rate fluctuations, complicated (used for the first time by some agencies) procurement

- 62 - procedures of the World Bank, as well amendments in Polish laws all resulted in the prolongation of the Project closing date and failure to complete it within the originally expected time limit.

Most of the implementing agencies entered into a direct contact with the World Bank, what facilitated communications and agreement-making between both parties.

Overall Borrower performance The overall performance of the Borrower during the Emergency Flood Recovery Project related to the July 1997 flood is assessed as satisfactory.

Bank The Bank’s overall performance was satisfactory. Appropriate staff was assigned to lending activities, with several key members maintained throughout the whole supervision period. Supervision missions included specialists with the required high expertise and experience, and Project activities were monitored by local staff throughout the Project on an on-going basis. One of the most positive aspects was the Bank’s flexibility in responding to the PCU’s and implementing agencies’ proposals, e.g., regarding approval of proposed modifications in the contracts already made.

H. Lessons Learned

The rule that all expenditures are accounted for at the US dollar exchange rate prevailing on the date of withdrawal of funds from the Special Account and the separate accounting for foreign exchange gains/losses each time proved to be a great problem. This rule caused the amount of performed accounting operations and recorded data to be multiplied, with the simultaneous lack of appropriate computer software.

I. Partner Comments

1. RZGW Pozna·, as one of the implementing agencies under Subcomponent B.1., draws attention to the following problems: - significant involvement on the part of employees of this agency in the Project implementation, who assumed additional duties and great responsibility. The performance of additional work often forced them to go beyond their contractual working time, without any additional compensation. Hence the suggestion that implementation procedures for projects financed from foreign loans should provide for the possibility of compensating employees of implementing agencies. But now RZGW suggests that the possibility should be considered of giving all Project participants a thank-you souvenir, in the form of a plaque, diploma or statute, as symbolic appreciation of their contribution in the Program implementation.

- RZGW stresses very good cooperation with the PCU and the World Bank representatives. The PCU assisted in conducting all procedures, both required under the Polish law and required by the World Bank. It helped to obtain quickly the World Bank’s decisions, to secure the Loan proceeds and counterpart funds in due time (there had been some problems with that in the past), all decisions which could help in the timely implementation of the task were taken quickly. In the opinion of RZGW this fact needs to be emphasized, since the PCU was sparsely staffed, but its personnel was thoroughly component and well managed. Special assistance was provided during financial accounting for tasks.

- 63 - In turn, the World Bank representatives demonstrated far-reaching understanding of the implementing agency’s problems, what in effect resulted in “no objections” being given quickly at each stage of the implementation. In the opinion of RZGW, both the PCU management and the World Bank representatives deserve special appreciation for fast approval of direct contracting procurement of software and for assistance in the implementation of additional procurements, in spite of procedural doubts. Thanks to a sensible approach to this matter, it was possible to carry out procurements and the Loan proceeds were utilized.

- fluctuations of the US dollar exchange rate against the local currency were also a problem. When the US dollar exchange rate was on the rise, there was no problem, but when it was dropping, a problem arose. Such situations should be taken care of, since implementing agencies unrightly bear the consequences of agreements so concluded.

2. RZGW Kraków (the implementing agency for a part of Subcomponent B.1. tasks): - it is of opinion that cooperation with the PCU came down primarily to approval of statements of expenditures in technical, formal and accounting terms. But substantive and technical support for the implementing agency was lacking.

- it also suggests that the system of accountings should be simplified and information flow should be streamlined, e.g., through the participation of implementing agencies in meetings of the Steering Committee and also through the building of a system of substantive and technical consultancy for implementing agencies.

3. IMGW Warsaw, the implementing agency for Subcomponent B.2., draws attention to the following issues: - the continuity of operation of the new system is at risk due to disruptions in access to funds necessary to ensure the sustainability / continuity of the operation of the SMOK system. Permanent access to funds for maintenance and development is of key significance in order to ensure the continuity of operation and maintenance of all elements of the modernized State Hydrological and Meteorological Service. Therefore, securing funds in a sufficient amount and for a period longer than the current year is the greatest worry of IMGW management.

- in order to ensure an efficient project implementation and to fulfill contractual obligations by IMGW, it is very important to provide smooth financing and timely transfer of funds from the budget; to this end, it is necessary to simplify the Bank’s procedures for account-making and obtaining new funds, and to streamline the transfer of funds to IMGW. Disruptions in project financing caused most problems during the performance of contracts.

- the Project Coordination Unit (PCU) supported the Institute through, in particular, advisory services and financial coordination, contributing to proper financial control of the entire project. Nevertheless, at the beginning of the Project, IMGW expected greater procedural assistance in the organization of the bidding process, and repeatedly it had to handle itself arising problems.

- consultant services were of particular significance at the initial phase of contract performance, when IMGW was starting to gain experience and skills in project management and technical support in implementation of construction works, since the Institute does not employ specialists who could supervise construction works.

- 64 - In future projects IMGW would expect small support from consultants in project quality management and technical support, only in the event that exceptionally complicated technical problems occur.

- IMGW’s participation in a project of this scale and importance was an excellent opportunity to gain practical experience in preparation of the bidding process and contracts in accordance with the Bank’s procedures and, in particular, in management of implementation of very complicated projects involving the construction of systems based on advanced technologies.

- Technical knowledge of IMGW employees at the highest world level and new skills acquired during the project implementation will allow IMGW to offer the provision of consulting services by its employees in similar projects.

J. Additional information

COMPONENT C

Project administration

Project Coordination Unit

In accordance with the provisions of the World Bank Loan Agreement No. 4264 POL of December 23, 1997 and the Project Implementation Plan of November 19, 1997 the Project Coordination Unit (PCU) in Wroc·aw was formed in order to ensure project administration and technical support.

The Project Coordination Unit was established based on the ordinances no. 1/98 and 2/98 of the Minister – Member of the Council of Minister, Jerzy Widzyk, of November 13, 1997, and May 4, 1998, issued in connection with the Loan Agreement No. 4264 POL made on December 23, 1997 between the Republic of Poland and the International Bank for Reconstruction and Development, relating to the Emergency Flood Recovery Project. The Project Coordination Unit was established for the period of implementation of projects financed under the Loan Agreement No. 4264 POL.

Initially, the Project Coordination Unit was reporting to the Head of the Chancellery of the Prime Minister, whereas after the coming into effect of the decree of the Prime Minister of December 23, 2004, amending the decree regarding the specific scope of operation of the Minister of Interior and Administration (Dz. U. ( Journal of Laws) of 2004, No. 283, item 2818), and the ordinance No. 118 of the Prime Minister of December 23, 2004, amending the ordinance regarding the grant of charter to the Chancellery of the Prime Minister (M.P. (Polish Monitor) of 2004 No. 56, item 953), the ordinance No. 120 of the Prime Minister of December 23, 2004, amending the ordinance regarding the grant of charter to the Ministry of Interior and Administration (M.P. of 2004 No. 56, item 954) – the Project Coordination Unit was reporting to the Ministry of Interior and Administration.

- 65 - The Project Coordination Unit coordinated all Project activities through (i) supporting the implementing agencies; (ii) administration, accounting and financial management; (iii) providing technical support to the implementing agencies in the carrying out of public procurements; (iv) monitoring and evaluation, and (vi) reporting.

In particular, under the task of (i) supporting the implementing agencies, the PCU prepared work programs under the Project. Work programs were modified to reflect the actual state of implementations and modifications of objectives and needs.

Under Component A, in addition to the basic list included in the Project Implementation Plan of November 19, 1997 two additional lists were prepared: the prim and bis lists. The PCU hired external individual consultants and consulting firms, which supported the PCU in the coordination and supervision of the Component A implementation.

Under Component B, the Component Implementation Schedule was prepared, which was later regularly updated. The last version of the Schedule was approved by the Steering Committee on October 28, 2005. The PCU participated on a current basis in the settlement of disputes arising in the course of implementation of tasks, provided information on procedures, eligibility criteria and other World Bank regulations and the interpretation thereof, provided access to the World Bank guidelines, as well as it represented the implementing agencies in matters requiring the World Bank’s acceptance.

With respect to (ii) administration, accounting and financial management, the PCU prepared for the implementing agencies procedures for obtaining the World Bank loan proceeds for financing tasks covered by work programs and procedures for technical and financial accounting for expenditures incurred from these funds and from state budget counterpart funds.

Accounting for Component C expenditures was kept in accordance with the requirements of national legislation and the World Bank criteria, as well as records were kept for expenditures incurred under Components A and B in accordance with the World Bank criteria and requirements.

Funds were released to the implementing agencies in accordance with the provisions of Annex H to the Project Implementation Plan. The PCU did not maintain the loan Special Account. The Special Account was maintained by the Ministry of Finance. The World Bank loan proceeds were released by the Ministry of Finance, for Component A through the Chancellery of the Prime Minister and further Voivodes (Governors), for Component B through the Chancellery of the Prime Minister (later on, the Ministry of Interior and Administration) and further the Ministry of Environment, for Component C the Chancellery of the Prime Minister (later on, the Ministry of Interior and Administration).

The PCU produced to the World Bank accountings for all expenditures incurred from funds released under 50 withdrawal/replenishment applications. Expenditures accounted for were audited on an annual basis by an independent auditor selected in accordance with the World Bank criteria, who conducted audits in accordance with the Terms of Reference (ToR) recommended by the World Bank.

Technical support to the implementing agencies in the carrying out of public procurements (iii) was effected chiefly through the preparation of implementation schedules, consultancy in the selection of procurement procedures, expressing opinions and consultancy in the preparation of bidding documents, if necessary, the participation of the PCU representatives in the work of evaluation commissions, expressing opinions and consultancy in the preparation of contracts and amendments thereto.

- 66 - With respect to monitoring and evaluation, (iv) the PCU approved technical and financial accountings for expenditures incurred by the implementing agencies under all Components of the Project, verified their compliance with the World Bank eligibility criteria and provisions of the national legislation, as well as their compliance with work programs. Progress in implementations was monitored on an on-going basis and work programs were modified accordingly, taking into account verified objectives and the availability of funds. The main factor affecting modifications in the schedule was amendments in Polish legislation (amendments in construction law, the Water Law Act) and fluctuations of the PLN exchange rate against the US dollar.

The PCU fulfilled its reporting obligations (v) to government institutions, i.e., the Chancellery of the Prime Minister, and later on the Ministry of Interior and Administration, Ministry of Environment and Ministry of Finance, in accordance with the requirements defined at the beginning of the Project implementation, as well as to the World Bank in accordance with rules applied by the WB. Quarterly reports submitted to the World Bank and government institutions were the basic reporting document. Furthermore, reporting which was the basis for release of funds was carried out on an on-going basis. In order to release funds to the implementing agencies, reports were submitted to government institutions, whereas replenishment applications submitted to the World Bank were the basis for replenishment of the Special Account.

The World Bank missions were conducted in Poland more or less twice a year, and special reports on Project implementation were also prepared for these missions.

In addition, the PCU was the implementing agency for task B.7, coordinating all activities associated with the preparation of a complete set of documents defining implementation conditions for the Odra River Basin Flood Protection Project, as well as it participated in the process of interdepartmental agreements of conditions for Project implementation and in drafting agreements with the Council of Europe Development Bank and the International Bank for Reconstruction and Development.

The PCU was also the implementing agency for Subcomponent B4.

The Component C cost was US$7,115,200.75 from the World Bank loan proceeds, including the amount of US$4,666,120.40 which was the cost of support in supervision over Component A implementations provided by consulting firms. The Component C cost, including the Polish side’s share, was US$8,287,091.41.

The Steering Committee

The Steering Committee was also appointed; it was composed of representatives of the Ministry of Finance, Ministry of Environment, World Bank, PCU Director, and it was chaired by a representative of the Head of the Chancellery of the Prime Minister, and later on, a representative of the Minister of Interior and Administration.

The task of the Steering Committee was to facilitate activities required for the Project implementation and related to decisions of political nature, as well as to take decisions strategic to the Project.

- 67 - - 68 - IBRD 34706

14° 16° 18° 20° 22° 24°

RUSSIAN Baltic Sea Gulf of Gdansk POLAND FEDERATION LITHUANIA

, EMERGENCY FLOOD RECOVERY Gdansk PROJECT

54° 54° POMORSKIE l , l l

l WARMINSKO - Augustowski l l SEVERELY FLOODED AREAS

Canal l l l

l l

ZACHODNIOPOMORSKIE l

l MAZURSKIE l

l l FLOODED AREAS l

Olsztyn l l

Pisa R. Vistula R. Nysa SEVERELY AFFECTED CITIES Szczecin PODLASKIE RIVER BASIN BOUNDARIES RIVERS

l KUJAWSKO -

l Bialystok l l llllllllllll l BELARUS l l POMORSKIE CANALS l Drweca R. l

l Bydgoszcz

l l l l l l l l l l l l l l l l l l l l Odra R. , Notec R. Torun PROVINCE (VOIVODSHIP) CAPITALS Narew R. Gorzów NATIONAL CAPITAL Wielkopolski Warta R. LUBUSKIE MAZOWIECKIE DISTRICT (POWIAT) BOUNDARIES

Canal

ODRA PROVINCE (VOIVODSHIP) BOUNDARIES l

, l Bug R.

Vistula R. l

WIELKOPOLSKIE l l

l Poznan

Zeran-Zegrze l l l

l INTERNATIONAL BOUNDARIES l

l Warsaw l l (Warszawa) Krosno Odrzanskie 52° 52° Odra R. Zielona Góra l l Nowa Sól Vistula l l l l l l

l GERMANY 0 50 100 150 200 KILOMETERS

, , l l l BASIN Lodz l l l

R. l

N l 05025 75 100 MILES e LUBELSKIEl is l s l e Lublin l

, VISTULA l Wieprz-

Wieprz R. l

l Krzna l

DOLNOSLASKIE˛ LÓDZKIE l Canal

l This map was produced by the Map Design Unit of The World Bank.

l The boundaries, colors, denominations and any other information shown

l on this map do not imply, on the part of The World Bank Group, any

l Wroclaw l judgment on the legal status of any territory, or any endorsement or Warta R. l

Jelcz Laskowice l acceptance of such boundaries. Brzeg Strzegom OPOLSKIE Kielce Swiebodzice Odra Swidnica , BASIN NORWAY ESTONIA Walbrzych DzierzoniowKlodzkoNysa Opole SWIETOKRZYSKIE˛ BystrzycaBielawa SWEDEN RUSSIAN Nowa Ruda FEDERATION Klodzka R. , North PODKARPACKIE Sea LATVIA KrapkowiceSLASKIE˛ Baltic Sea Kedzierzyn-KozleRacibórz ‘ Vistula R. San R. Bug R. DENMARK l l l l l Glucholazy l l l l l l l l Rzeszów l Gliwice l Area of map LITHUANIA Canal Katowice RUSSIAN MALOPOLSKIE FED. 50° 50° BELARUS CZECH Kraków Kety Warsaw REPUBLIC UKRAINE POLAND GERMANY

UKRAINE CZECH REP.

SLOVAK MOLDOVA REP.

AUSTRIA ROMANIA 14° 16° 18° SLOVAK 20 ° REPUBLIC 22° 24° SWITZ. LIECHT. HUNGARY AUSTRIA JUNE 2006