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Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 25720-ID IMPLEMENTATION COMPLETION REPORT (CPL-38540; SCL-3854A; SCPD-3854S; PPFB-P1701) ON A Public Disclosure Authorized LOAN IN THE AMOUNT OF US$136 MILLION TO THE REPUBLIC OF INDONESIA FOR A KALIMANTAN URBAN DEVELOPMENT PROJECT Public Disclosure Authorized June 24, 2003 Urban Development Sector Unit East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2002) Currency Unit = Rupiah Rp 1 = US$ 0.000112139 US$ 1 = Rp 8,917.50 FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS ACSD - Abolition and Combination, Simplification, Decentralization BAPPENAS - National Development Planning Agency BOD - Biochemical Oxygen Demand DPRD - Local Level Parliament EIRR - Economic Internal Rate of Return FIRR - Financial Internal Rate of Return GOI - Government of Indonesia IPLT - Sludge Treatment Facility IUIDP - Integrated Urban Infrastructure Development Program (or Project) KIMPRASWIL - Ministry of Settlements and Regional Infrastructure KIP - Kampung (poor neighborhood) Improvement Program LARAP - Land Acquisition and Resettlement Action Plan LG - Local Government LKMD - Community Organization MIP - Market Improvement Program MOF - Ministry of Finance MSRI - Ministry of Settlement and Regional Infrastructure NGO - Non-governmental Organization O&M - Operations and Maintenance PDAM - Local Government Water Enterprise Pemda - Local Government PJM - Medium-term Expenditure Program PMO - Local Government Monitoring Office (under the local planning board) PMU - Project Management Unit (under the local department of public works) QCBS - Quality and Cost-Based Selection (of procurement) RIAP - Revenue Improvement Action Plan SAR - Staff Appraisal Report SLA - Subsidiary Loan Agreement TA - Technical Assistance TPA - Final Solid Waste Disposal Site UfW - Unaccounted For Water UPT-PAL - Technical Service Unit - Waste Water Treatment VOC - Vehicle Operating Costs Vice President: Mr. Jemal-ud-din Kassum Country Manager/Director: Mr. Andrew Steer, EACIF Sector Manager/Director: Mr. Keshav Varma, EASUR Task Team Leader/Task Manager: Mr. George Soraya, EASUR INDONESIA KALIMANTAN URBAN DEVELOPMENT 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 16 6. Sustainability 19 7. Bank and Borrower Performance 21 8. Lessons Learned 25 9. Partner Comments 27 10. Additional Information n/a Annex 1. Key Performance Indicators/Log Frame Matrix 30 Annex 2. Project Costs and Financing 33 Annex 3. Economic Costs and Benefits 35 Annex 4. Bank Inputs 45 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 49 Annex 6. Ratings of Bank and Borrower Performance 50 Annex 7. List of Supporting Documents 51 Annex 8. Additional Sectoral Assessment of Solid Waste Management 52 Annex 9. Project Cost Summary by Subsector 53 Annex 10. Technical Assistance 54 Annex 11. Resettlement Experience in KUDP 55 Project ID: P003951 Project Name: KALIMANTAN URBAN DEVELOPMENT PROJECT Team Leader: George Soraya TL Unit: EASUR ICR Type: Core ICR Report Date: June 27, 2003 1. Project Data Name: KALIMANTAN URBAN DEVELOPMENT L/C/TF Number: CPL-38540; SCL-3854A; PROJECT SCPD-3854S; PPFB-P1701 Country/Department: INDONESIA Region: East Asia and Pacific Region Sector/subsector: General water/sanitation/flood protection sector (50%); Roads & highways (20%); Housing construction (10%); Sub-national government administration (10%); Central government administration (10%) Theme: Municipal finance (P); Access to urban services for the poor (P); Other urban development (P); Municipal governance and institution building (S) KEY DATES Original Revised/Actual PCD: 10/10/1989 Effective: 11/02/1995 Appraisal: 03/24/1994 MTR: 10/01/1997 05/10/1999 Approval: 03/21/1995 Closing: 06/30/2001 12/31/2002 Borrower/Implementing Agency: Republic of Indonesia/Participating Cities and their Water Utilities Other Partners: STAFF Current At Appraisal Vice President: Mr. Jemal-ud-din Kassum Mr. Gautam Kaji Country Director: Mr. Andrew D. Steer Ms. Marianne Haug Sector Manager: Mr. Keshav Varma Mr. Anupam Khanna Team Leader at ICR: Mr. George Soraya Ms. Frida Johansen ICR Primary Author: George Soraya 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: M Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: No 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: Introduction. The Indonesia's share of Kalimantan covers the southern three-quarters of the island of Borneo. It comprises 30% of Indonesia's total land mass, but includes only 5% of the country's population. In 1990, about 2.5 million people lived in Kalimantan's urban areas, of which 1.9 million lived in the five largest cities of Pontianak, Banjarmasin, Balikpapan, Samarinda, and Palangka Raya. Urban services in these five cities were significantly backlogged. Local water entreprises (PDAMs) supplied between 25-50% of the population with water, either through house connections (28-38%) or public taps (2-8%). Service tended to be rather unreliable, especially in the dry season. Most people depended on low quality water from shallow wells, rivers and canals as well as rain water and high-priced vendor water. Only 50-60% of the population had solid waste collection. Flooding was a major environmental problem in the low-lying cities. Motorized traffic was growing quickly; however roads are narrow, rights-of-way were experiencing encroachment, and traffic management was inadequate. Together, these resulted in frequent traffic congestion. Other typical urban deficiencies such as inadequate budgetary provision for operations and maintenance (O&M) and inadequate revenue generation. With these problems in the back-drop, in 1990, the Government of Indonesia (GOI) requested Bank support for the Kalimantan Urban Development Project (KUDP), designed using GOI's Integrated Urban Infrastructure Development Project (IUIDP) approach. This approach was developed in the mid-1980s and integrated the development of urban infrastructure investments in urban transport, water supply, sewerage and sanitation, flood control, drainage, solid waste management and kampung (poor neighborhood) improvements under one package. The main objectives of KUDP were: (a) to improve the provision of urban infrastructure and services and the efficiency of urban investments; (b) to promote stronger, more autonomous, and financially more independent municipal governments; and (c) to contribute towards urban poverty reduction, mainly through better access to essential services and an improved urban environment; and to improve the urban environment. Assessment of Objectives. The objectives were clear and consistent with GOI's Five-Year Development Plan (Repelita V) in meeting the basic service delivery and local government capacities, and also fully consistent with the Bank Group’s 1994 CAS, which emphasized interregional equity, delivering higher levels of services and enhancing competitiveness in a climate of macroeconomic stability which reigned at the time. The project was relatively complex. It covered five cities and at least seven components in each city. Geographically, the project sites were widely dispersed, covering four provinces on Borneo. However, the cities chosen were medium-sized cities, which made coverage of multiple components more manageable. Overall, the project risks were acceptable. 3.2 Revised Objective: There were no major changes in the project objectives during implementation. - 2 - 3.3 Original Components: The project was to support a five-year program of high priority expenditures in the five cities of Balikpapan, Banjarmasin, Palangka Raya, Pontianak and Samarinda. These expenditures were allocated for water supply, urban roads, solid waste management, sanitation, a Kampung (poor neighborhood) Improvement Program (KIP) and a Market Improvement Program (MIP), and drainage. Institutional support and training complemented the physical investments. A brief description by component follows. Water Supply (US$44 million). This component included investments for water treatment plants and transmission and distribution networks, investments in rehabilitation and leakage control, and increased operations and maintenance. Expected achievements were five new reservoirs, 105,000 new connections to the piped water system, more reliable services, and better quality water. Urban Roads (US$55.9 million). The five cities had an urban road network of some 1000 km including national, provincial and local roads. The project was to improve their routine maintenance, contribute to the periodic overlays/rehabilitation of 125 km of roads and improve (widen, upgrade or other works) some 280 km more. In addition, the project would assist in constructing 30 km of new major roads needed
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