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World Bank Document Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 50028 - LK PROJECT APPRAISAL DOCUMENT ON A Public Disclosure Authorized PROPOSED CREDIT IN THE AMOUNT OF SDR 33 MILLION (US$50.00 MILLION EQUIVALENT) TO THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA FOR A Public Disclosure Authorized NORTH EAST LOCAL SERVICES IMPROVEMENT PROJECT (NELSIP) April 19, 2010 Sustainable Development Department Urban and Water Unit South Asia Region This document has a restricted distribution and may be used by recipients only in the Public Disclosure Authorized performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective August 2009) Currency Unit = Sri Lankan Rupee US$1 = SLR 115 US$1 = SDR 0.667401 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS ACLG Assistant Commissioner of Local GoSL Government of Sri Lanka Government GPN General Procurement Notice ADB Asian Development Bank GTZ German Technical Cooperation AF Asia Foundation IC Individual Consultants APRC All Party Representatives Conference ICB International Competitive Bidding CAS Country Assistance Strategy IDA International Development CBC Community-Based Contracting Association CBO Community Based Organization IEC Information Education and CDD Community Driven Development Communication CEA Central Environmental Authority IFAD International Fund for Agricultural CFAA Country Financial Accountability Development Assessment IMF International Monetary Fund CLG Commissioner of Local Governments IOM International Organization for CQ Consultants’ Qualifications Migration CWSSP Community Water Supply & Sanitation IPDP Indigenous Peoples Development Plan DA Designated Account ISDS Integrated Safeguards Data Sheet DC Direct Contracting IUFR Interim Unaudited Financial Reports DPS Designated Procurement Specialist JICA Japan International Cooperation DSD Divisional Secretariat Division Agency LA Local Authority EIA Environmental Impact Assessment LADP Local Authority Development Plan EMP Environment Management Plan LAPIM Local Authority Project Implementation ENREP Emergency Northern Recovery Project Manual ESAMF Environmental and Social Assessment LGIIP Local Government Infrastructure Management Framework Improvement Project ESMF Environmental and Social Management LKR Sri Lankan Rupees Framework FAO Food and Agriculture Organization MC Municipal Council FBS Fixed Budget Selection MDTU Management Development and FM Financial Management Training Unit FMIS Financial Management Information M&E Monitoring and Evaluation Systems ML&E Monitoring, Learning and Evaluation FMR Financial Management Report MED Ministry of Economic Development FR Financial Reports MoFP Ministry of Finance and Planning GA Government Agent MOU Memorandum of Understanding GAAP Governance and Accountability MTR Mid Term Review Action Plan NCB National Competitive Bidding GNDs Gram Niladhari Divisions NEA National Environment Act ii NELSIP North East Local Services Improvement SBD Standard Bidding Document Project SEC State Engineering Corporation NGO Non-Governmental Organization SLILG Sri Lanka Institute of Local NIRP National Involuntary Resettlement Plan Government NPA National Procurement Agency SWAP Sector Wide Approach NPC Northern Provincial Council SSS Single-Source Selection NPSC National Project Steering Committee UC Urban Council ODU Organizational Development Unit UNDB United Nations Development OP/BP Operational Policy/Bank Policy Business PAD Project Appraisal Document UNDP United Nations Development PC Provincial Council Program PCN Project Concept Note UNHCR United Nations High Commissioner For Refugees PDO Project Development Objective UNICEF United Nations International Children’s PCU Project Coordination Unit Fund UNOPS United Nations Office for Project PIC Project Implementation Cell Services PM Praja Mandalaya USAID US Agency for International PPC Provincial Planning Development Committee VDP Village Development Plan PS Pradeshiya Sabha WA Withdrawal Application PTF Presidential Task Force WFP World Food Program QBS Quality-Based Selection QCBS Quality and Cost Based Selection RAP Reawakening Project (popular name For Community Livelihoods in Conflict Affected Areas Project) RFP Request For Proposal Vice President: Isabel Guerrero Country Director: Naoko Ishii Sector Director: John Henry Stein Sector Manager: Gajanand Pathmanathan Task Team Leader: Seenithamby Manoharan iii SRI LANKA North East Local Services Improvement Project (NELSIP) CONTENTS Page I STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 A. Country and sector issues.................................................................................................... 1 B Rationale for Bank involvement ......................................................................................... 3 C Higher level objectives to which the project contributes .................................................... 4 II. PROJECT DESCRIPTION ................................................................................................. 4 A. Lending instrument ............................................................................................................. 4 B. Project development objective and key indicators .............................................................. 4 C. Project components ............................................................................................................. 5 D. Lessons learned and reflected in the project design ............................................................ 7 E. Alternatives considered and reasons for rejection .............................................................. 7 III. IMPLEMENTATION ...................................................................................................... 8 A. Partnership arrangements .................................................................................................... 8 B. Institutional and implementation arrangements (see Annex 6) .......................................... 9 C. Monitoring and evaluation of outcomes/results ................................................................ 10 D. Sustainability..................................................................................................................... 11 E. Critical risks and mitigating measures .............................................................................. 11 F. Loan/credit conditions and covenants ............................................................................... 13 IV. APPRAISAL SUMMARY ............................................................................................. 15 A. Economic and financial analyses (see Annex 9)............................................................... 15 B. Technical ........................................................................................................................... 15 C. Fiduciary (see Annex 7, 8 and 10) .................................................................................... 16 D. Social................................................................................................................................. 18 E. Environment ...................................................................................................................... 20 F. Safeguard Policies ............................................................................................................. 20 G. Policy Exceptions and Readiness...................................................................................... 21 H. Supervision Strategy ......................................................................................................... 21 iv Annex 1: Country and Sector or Program Background ......................................................... 22 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ................. 25 Annex 3: Results Framework and Monitoring ........................................................................ 27 Annex 4: Detailed Project Description ...................................................................................... 29 Annex 5: Project Costs ............................................................................................................... 43 Annex 6: Implementation Arrangements ................................................................................. 44 Annex 6A: Supervision Strategy................................................................................................ 48 Annex 7: Financial Management and Disbursement Arrangements ..................................... 54 Annex 8: Procurement Arrangements ...................................................................................... 71 Annex 9: Economic and Financial Analysis ............................................................................. 79 Annex 10: Safeguard Policy Issues ............................................................................................ 83 Annex 10 (a): Social Issues ......................................................................................................... 87 Annex 11: Project Preparation and Supervision ..................................................................... 90 Annex 12: Governance and Accountability Action Plan (GAAP) .......................................... 92 Annex 13: Reconciliation and Conflict Filter ..........................................................................
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