Belize Municipal Development Project (P111928)

Third Implementation Support Mission – April 23 – 27, 2012

Aide-Memoire

I. Introduction

1. A World Bank team comprising Yoonhee Kim, Team Leader, Stephen Brushett, Lead Transport Specialist, Yingwei Wu, Sr. Procurement Specialist, Afef Haddad, Sr. Country Officer, Maritza Rodriguez, Sr. Financial Management Specialist, Csilla Horvath, Social Safeguards Consultant, and Stamatis Kotouzas, Land Analyst Consultant undertook an implementation support mission of the Project from April 23 to 27, 2012. The mission team held discussions with Ms. Yvonne Hyde, CEO, Ministry of Finance and Economic Development, Mr. Godwin Hulse, Minister of Labor, Local Government, Rural Development and NEM, Ms. Candelaria Saldivar-Morter, CEO MLLGRDNN, Ms. Beverly Castillo, CEO MNRA, Mr. Wilbert Vallejos, Land Commissioner MNRA, Mr. Crispin Jefferies, Chief Transport Officer, the newly elected mayors of Belize City, Benque Viejo del Carmen, Dangriga, Orange Walk, and Punta Gorda as well as the Project Implementation Unit (PIU). The mission expresses appreciation for the kind support extended to the Bank team during the mission (A detailed list of people met is provided in Annex 2). A wrap-up meeting was held with Ms. Hyde and the PIU staff to discuss the key mission findings. The next full mission is planned for the last quarter of 2012. A technical mission focusing on environmental safeguards supervision is planned to take place before the end of June 2012.

2. This aide-memoire summarizes the findings, recommendations and agreements reached during the mission and it is subject to confirmation by World Bank management. The aide- memoire will be publically disclosed once finalized.

3. Key Project data and Performance Rating

Key Project Data Key Performance Ratings

Previous Current Rating Rating Board Approval September Progress towards Satisfactory Satisfactory Date 16, 2010 achievement of Project Development Objectives Effectiveness January 25, Overall Implementation Satisfactory Moderately Date 2011 Progress Satisfactory

Closing Date November Disbursed US$ 0.91 30, 2015 million Loan Amount US$15 % Disbursed 6% million

II. Implementation Status Overview

4. Since the last supervision mission in November, 2011, the mission notes that the Project continues to be on its track to meet the development objectives. The first Phase 1 work contract for building rehabilitation in Punta Gorda was awarded and actual work began early April, 2012. The second Phase 1 contract for Dangriga’s town market is expected to be awarded, subject to the Bank’s review, by May 11, 2012. A bidding process for street works in the remaining six TCCs is expected to commence shortly and a contract award for the first batch of street work is planned for the first week of June, 2012. Revenue enhancement TA is proceeding satisfactorily and demonstrating concrete results and impact on the ground. The scope of other TA components has also been agreed and a procurement process for the TA components will commence shortly. However, the mission also notes challenges associated with keeping the project’s implementation plan and disbursement on target. In particular, there is a room to improve project management and procurement capacity within the PIU. In order to address adequately an increasing demand for the project’s engineering review and procurement process, it was agreed that additional engineer and a procurement officer will be recruited.

III. Implementation Status by Project Component

Component 1: Municipal Infrastructure Investments

5. Phase 2 Investment The mission discussed the importance of mobilizing Phase 2 investment preparation and starting a consultation process to prioritize municipal investment, in line with the project cycle outlined in the operations manual, before the end of 2012. It was agreed that the PIU will engage with the TCCs for investment prioritization shortly after the procurement process for the first batch of street works (shopping) is completed during the third quarter of 2012, so that the PSC approval for subprojects could be realized during the last quarter of 2012. It was also discussed that BSIF will propose to the Bank a revised index for Phase 2 allocation and updated figures by September, 2012.

6. Review of Street Design and Procurement Process for Works The mission reviewed Interim Report No. 1 dated April 2012 provided by the design consultant ATA, further to which the Bank issued its no objection to the recommendations of this report. The mission

provided recommendations in regard to the packaging and sequencing of the works further to which BSIF developed the proposal at Annex 4. The proposal provides for a mix of contracts of interest to small and medium scale contractors through respectively shopping and NCB procurement. A first round of shopping will start its bidding process by May 4, 2012 (within the revised ceiling of $150,000 per package). There will be two NCB packages of around $1,300,000 with a further round of shopping. All the street works packages will be contracted out by early September, 2012. The BSIF will provide a final proposal for the packaging and sequencing to the Bank for the Bank team’s information. It is recognized that though this is an efficient and economic solution for the works, it is likely to increase in the time requirement for supervision services. Based on agreement reached during the mission, BSIF will present two NCB bid packages to the Bank for procurement prior review by May 21, 2012 and June 4, 2012 respectively.

7. Compliance with eligibility criteria for Phase 2 Investment: The mission observed that most of TCCs have complied with the eligibility criteria such as sending monthly reports to the MLG and publishing their budgets or reducing overdraft facility maintained by the TCC. However, it was also noted that other eligibility criteria such as the adoption of municipal growth plans or asset management plan and budget may not be feasible considering current status of the procurement process for the relevant TA consultancy. Hence, the revision of the criteria may be warranted, for instance, from ‘adoption’ of municipal growth plans, to ‘initiating’ the formulation of municipal growth plans. In addition, it was discussed that the eligibility criteria related to monthly council meetings should be clarified and modified so that it is consistent with the existing national law. Finally, it was agreed that the eligibility criteria for Phase 2 investment will be further reviewed and agreed during the next supervision mission planned for the last quarter of 2012.

8. Technical review of ongoing works

a. Pilot Works in Belmopan and San Ignacio/Santa Elena (W1/W2 and C1) The mission carried out a site visit on April 26. The pilot projects have helped to bring about site specific traffic management improvements and also provided useful lessons to be applied in the design and contracting of the street improvement works. Specific note is made of the following: redesign and construction of the vehicle ramps has been completed to provide a more acceptable gradient based upon the experiences in Santa Elena; and pending task to redo street marking in Belmopan and San Ignacio/Santa Elena due to deficiencies in the quality of paint.

b. Punta Gorda Town Hall Building Improvement (C2 and W3) and Dangriga Town Market Improvement and Expansion (C3 and W5). Work on the reconstruction of the Punta Gorda town hall and administrative buildings began April

10 with Coleman Construction Ltd as the contractor. The contractor has raised the need for increased work on the roof, but this will fall within the current line items and provisional sum provided in the contract. Agreement has been reached with the council to vacate the buildings during construction which should help to keep construction on time schedule. For the rehabilitation and extension of the Dangriga market, the procurement process is still ongoing (see Procurement section for more). Since the previous mission the design has been revised and the decision was made to complete the project in one rather than in several phases with an estimated cost of BZ$1.47 million.

Component 2: Technical Assistance and Capacity Building for TCCs, MLLGRDN and MNRA

9. Revenue Enhancement TA The mission was pleased to note an excellent progress in the implementation of revenue enhancement TA. The mission was informed that revenue enhancement work plan will be first implemented in Dangriga as a pilot and the same will be rolled out to the remaining municipalities. Next mission for the international consultant is planned for the third quarter of 2012. Furthermore, during the meeting with the newly elected mayors, the mayor of Belize City expressed a keen interest in receiving the Bank’s support on accessing to local capital market. To continue to support the credit worthiness of Belize’s TCCs, the Bank team will explore mobilizing additional resources through a Trust Fund (e.g. PPIAF) by August, 2012.

10. Asset Maintenance Plan The mission reviewed the terms of reference which had previously been agreed. The mission recommended that the activity be pursued as a two phase process – a first phase to focus on the institutional and legal dimension in order to properly and fully identify infrastructure for which the municipalities are responsible and for which national government is responsible, and also to analyze the existing draft national maintenance plan; a second phase to carry out the required inventory and estimations. BSIF will submit end of first week of May the revised TOR and proposed work plan for no Bank objection. There is no change to the overall budget for the activity.

11. Municipal Growth Plans. The mission was informed that consulting service for “development of growth plan” under QCBS procedures is pending with finalizing short- listing report by BSIF, since receiving 16 EOIs on February 9th, 2012. BSIF will expedite the process and submit both the report and draft RFP for Bank’s clearance by May 11, 2012.

12. Traffic Management TA. The mission reviewed the status of the proposed TA with BSIF, Local Government Officer and Chief Transport Officer. Further and final changes to the TOR were discussed. BSIF are to submit by end of first week of May the revised TOR for

Bank no objection as well as prepare an EOI notice. It was agreed that public education and awareness as regards to road safety should be retained. It was also agreed that team composition should change to better align with the expected outputs of the consultancy, i.e team leader to be a traffic management specialist transferring some responsibility to a junior consultant for the production of manuals and guidelines, combine the social communications and education roles. There is likely to be a reduction in the budget for the activity as a result of the changes.

13. National Land Use Policy Planning Framework and Urban Boundaries. The Mission discussed with the MNRA the National Land Use Policy and Integrated Planning Framework, which was endorsed by the Cabinet in November 2011. The Planning Framework provided for the establishment of a National Land Use Policy Office and Local Land Use Planning Committees to draw National and Local Land Use Plans respectively. The MNRA shared some concerns about the costs and capacity constraints of adopting the framework in its entirety and further indicated that its Policy Planning unit will outline which recommendations can be implemented within the existing structures of the MNRA. The mission was informed that the progress has been made towards the expansion of urban boundaries in every TCC, other than Belize City and Belmopan. The mission was pleased to note that the initiative of the MLLGRDNN CEO led to the Physical Planning Section of the MNRA forwarding the proposed urban boundary maps to the MLLGRDNN for further submission to the Cabinet.

14. In addition, a cadastral information-sharing Memorandum of Understanding (MoU) between the MNRA and TCCs is currently being developed. The MoU will delineate the roles and responsibilities of both the MNRA as well as the TCCs, including the protocol for TCCs cadastral database requests (especially land registry information) and the frequency of cadastral updates available. The mission emphasized the pertinence of up-to-date, high- quality, and efficient cadastral information-sharing for the upcoming urban growth plans as well as for the TCCs revenue enhancement efforts.

Component 3: Project Management

15. Project Management. In order to ensure an effective project management, the mission emphasized the importance of better defining the roles and responsibilities between the Project Coordinator and the Procurement Officer. It was discussed and agreed that the PC will take a more proactive and leading role in all procurement process, by monitoring ongoing procurement processes and keeping the process on schedule; providing technical input and cost estimates in each process of compiling the procurement documents; and organizing and leading the work by Evaluation Committee with PO’s guidance. Similarly, PO is

responsible for drafting key bidding documents and ensuring overall quality and compliance with the process/documents. BSIF Executive Director agreed to provide additional and closer supervision to the overall project implementation in the next few months when work contracts and consulting services are procured and mobilized.

16. Recruitment of Procurement Officer and Engineer. The mission reviewed the existing capacity of the PIU to implement the project’s procurement process and found that there is room to improve procurement capacity especially with the growing procurement workload within the PIU. As a solution to strengthen the capacity of procurement, it was agreed that the PIU would recruit additional procurement officer. In addition, the mission noted that hiring of contract management staff as recommended in PPR report will be completed by end May, 2012. Similarly, it was agreed that additional engineer (preferably with previous experiences in environmental management) would be recruited consistent with the original project’s design. The PIU will send the ToRs for the procurement officer and engineer by May 4, 2012.

17. Communication Strategy. The mission and BISF discussed developing a communications strategy for BSIF to better promote and sensitize activities supported under the MDP among public (direct and indirect beneficiaries of town councils as well as political representatives). It was agreed that a draft communications strategy will be submitted to the Bank for review by May 12, 2012. The strategy should outline the overall objectives, identify target audiences to cover under the strategy, articulate key messages to deliver for different audiences throughout the communications campaign, and specify a methodology and various instruments to reach out to target audience. The Bank team will seek and mobilize additional support to assist BSIF in drafting the communications strategy and also bring an expert to review and provide a set of recommendations on the implementation of the strategy.

18. Training of Projects’ Staff The Bank team recognizes the potential benefits of providing off-site training to PIU staff in the areas of project management, advanced procurement, financial management and other related subjects. The Bank team will inform the PIU of possible training opportunities in the near future including one that is being planned for fiduciary staff in the region before the end of June, 2012.

Procurement Management

19. Procurement Plan (PP) The mission reviewed the progress of the procurement plan and agreed to the proposed updates by BSIF based on the need for the implementation of the project. The updated PP incorporating the agreements shall be submitted to the Bank for no- objection and publication by May 4, 2012.

20. Procurement Progress Report. The progress of each package in the PP should be included in the Project Monthly Progress Report to be prepared by PC. It was agreed that any activities to be planned by the PIU before next updates of PP (other than the infrastructure packages) should be cleared by the TTL via correspondence in terms of procurement method with cost estimates and included in the monthly report.

21. Procurement Supervision. The mission reviewed the on-going procurement processes and contracts and detailed summary is provided in Annex 5.

22. Procurement Post-review. The procurement post-review (PPR) was conducted during the mission in November 2011. NCB contracts of under USD300,000 and all contracts via shopping will be subject to post review by the Bank.

Financial Management

23. Internal Controls: The mission found the overall financial management of PIU and BSIF satisfactory. The project’s financial monitoring reports have been submitted to the Bank on time, reconciled with Client Connection and made public in the BSIF webpage. The mission reviewed the selected supporting documents and found them adequate, including original invoices with “paid” stamp and the evidence of reception acknowledged by authorized officers. The Project’s internal control looks sound and follows the Project Operating Manual.

24. To further enhance internal control, the mission suggests that the FM staff be included in the Bid Evaluation Committee, in order to ensure the adequate analysis of bidders’ financial proposals and other related information in the financial proposal. The mission noted a need to fully document the project files by inserting the payment and delivery clauses of the contracts. This task will be retroactively done, to be completed by May 4th.

25. Disbursement: Withdrawal applications (WAs) are timely submitted, although the implementation progress measured by disbursement is low. As of March 31st, the Project has disbursed US$919,531.53 or 6%, excluding commitments and $616,317.51 advanced to the Designated Account, and commitments. Use of funds by category as of March 31st is provided in Annexes 7, 9 and 10. E-disbursement / e-signature program is soon to be implemented, estimated by July 2012 and the Bank team will provide necessary guidance to set up the e-disbursement/signature program by July, 2012. The mission notes that the electronic system is faster, safer, and provides enhanced features.

26. Reporting: Project reporting is on track, using the agreed format and reconciled with Client Connection. Jointly with the Project FM staff, the mission team developed a template for user friendly budgetary reports to further enhance monitoring of quarterly, yearly, and life of Project’s financial information. This will complement the financial reports to be posted on BSIF website as well for public access.

27. FM IT System: BSIF continues to use QuickBooks for recording Project transactions. It was agreed to enhance the integrated financial management information system by installing Quickbooks procurement module and getting an upgraded version. This task is expected to be completed o/a August 31st. This would allow to record transactions on accounts payable and to keep records according to International Accounting Standards for the Public Sector. Furthermore, management would have on-line information on Project commitments. It is a key to maintain comprehensive information of all aspects of the financial management cycle.

28. External Audit: The Project Audit Report for last period April 2010/March 2011 is already published on BSIF webpage, and in Bank’s extranet (consistent with the access to information policy). The mission notes that the PIU adequately implemented recommendations made by the auditors to enhance the BSIF’s internal control. Currently all of them resolved and closed. Attached Updated Action Plan for the period as of April 11/March 12.

Social Safeguards

29. Site visits to subprojects in Belmopan and Dangriga and the review of the Corozal Town subproject confirmed that the subprojects in TCCs have made important progress in adequately addressing the needs of the affected stakeholders in line with the Bank's resettlement policy. The BSIF previously presented advanced drafts of the Abbreviated Resettlement Plans (ARP) for all three subprojects. Accordingly, the ARP for the Corozal Town subproject is now considered finalized after agreements between the five affected stakeholders and the new Town Council were signed and submitted to the Bank (dated 03/27/2012). The mission reiterated that none of the vendors will suffer from income loss during and after their temporarily relocation and they will be provided adequate assistance during the process.

30. For the Dangriga subproject, the mission reconfirmed that none of the 38 affected vendors will suffer from income loss due to temporary and/or permanent displacement of their businesses. 8 people (4 families) who otherwise would have faced loss of income under the local 'one stall per family' policy, will be provided with one additional stall each. To facilitate a fair process and address some vendors' concerns about their final stall location in the new market extension, the Town Council is proposing a lottery process. The Dangriga subproject

ARP is now considered finalized after all outstanding issues were clarified and the new Mayor endorsed (dated 04/02/2012) the previously signed agreements between affected stakeholders and the former mayor. The mission was informed about the new Town Council's future PR media strategy to regularly inform and consult the general residents about the subproject, to commence early-mid May. The creation of a local project monitoring is underway in all town councils while mediation committee is being formulated in the town councils where the ARPs are being prepared.

31. Affected stakeholders of the Belmopan subproject signed an agreement with the Mayor and the Chief Transport Officer about overall arrangements of their temporary and permanent relocation during and after the works. The BSIF agreed to make final revisions on the plan, specifically: i) to update the actual number and identity of all affected taxi drivers, to be submitted by May 15, 2012 ii) to carry out a new and complete census of all affected stakeholders, incl. taxi drivers earlier not listed in the ARP, in order to better understand each person's income vulnerability. The data would also inform a transparent decision-making process in selecting which stakeholders need to relocate permanently after the works. Final data to be submitted by June 1st, 2012.

32. It was agreed that BSIF will work with the Belmopan City Council to ensure an equitable process in selecting the stakeholders for permanent relocation. To this end, the mission recommended again to offer stakeholders particular incentives to make a permanent relocation more attractive. The suggestion is a waiver of accruing annual license fee payments for a reasonable time period (1-2 years), which BSIF agreed to suggest to the City Council. The mission also visited three alternative permanent relocation sites for the taxi drivers in Belmopan to better assess the sites' feasibility for future income restoration. It was agreed that BSIF will continue to discuss these and other possible options with the City Council and the drivers as to identify the most feasible long-term alternatives for affected stakeholders.

33. In order to properly document the ongoing consultation process and facilitate community participation, BSIF agreed to incorporate stakeholders' concerns and comments in future meeting reports and share those with all parties involved. It was also agreed that BSIF will discuss with the TCCs the need for assembling a monitoring and grievance committee with the key participation of local community members.

34. Environmental Safeguards The Bank team will confirm the timing of next supervision of environment safeguards by May 11, 2012.

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Yvonne S. Hyde Yoonhee Kim CEO Ministry of Finance and Task Team Leader, World Bank Economic Development

Annex 1: Action Plan

Relevant Activities Recommendation/Action Responsible Due Date Agency 1 Project Start bidding process for the first PIU By May 4, Implementation round of shopping for street 2012 works 2 Send to the Bank a final Bid PIU By May 11, Evaluation Report for Dangriga 2012 Town Market Works 3 Complete the procurement PIU By first week process for first batch of street of June, 2012 works (shopping) 4 Send to the Bank for no- PIU/WB By May 21, objection the two NCB Bid 2012 and packages June 4, 2012 respectively 5 Propose to the Bank a revised PIU By Index for Phase 2 Allocation and September updated figures 12, 2012 6 PSC approval for subproject of PSC/PIU Last Quarter works for Phase 2 Investment of 2012 7 Complete procurement process PIU/WB No later than for all Phase 1 street works September, packages 2012 8 Propose the revised eligibility PIU Last Quarter criteria for Phase 2 Investment of 2012 for discussion with the WB 9 Revenue Explore and mobilize additional WB No later than Enhancement resources through a Trust Fund August, 2012 (e.g. PPIAF) 10 Asset Maintenance Submit revised Asset PIU By May 4, Plan Maintenance ToR and proposed 2012 work plan for no Bank objection 11 Municipal Growth Submit report and draft on PIU By May 11, Plans municipal growth plans RFP for 2012 Bank’s clearance 12 Traffic Management Submit Final ToR and EOI PIU/WB By May 4, Notice for Traffic Management 2012 TA 13 Project Management Send the ToR for procurement PIU/WB No later than

officer and engineer May 4, 2012 14 Complete hiring of procurement PIU/WB By end of officer and engineer August, 2012 15 Complete the hiring of Contract PIU/WB No later than Management position end of May, 2012 16 Communications Submit a draft communications PIU No later than Strategy strategy to the Bank for review May 12, 2012 17 Mobilize additional support in WB By end of assistance to BSIF June, 2012 communications strategy 18 Training of Project’s Explore possible training WB Ongoing Staff opportunities for PIU staff

19 Procurement Submit updated Procurement PIU No later than Proposals with incorporated May 4, 2012 agreements for no-objection 20 Financial Fully document the Project files, PIU No later than Management by inserting the payment and May 4, 2012 delivery clauses of the contracts. 21 Implement e-disbursement, e- PIU/WB No later than signature program end of July, 2012

22 Upgrade and Integrate financial BSIF On or About management information system the end of –QuickBooks August, 2012

23 Send a disbursement projection BSIF By May 11, for the rest of the year 2012

24 Social Safeguards Update the actual number and BSIF No later than identify all affected taxi drivers May 15, 2012 25 Carry out a new and complete BSIF No later than

census of all affected June 1, 2012 stakeholders for a review of income vulnerability

Annex 2: List of People Met

Belize Social Investment Fund Daniel Cano, Executive Director Ernest N. Raymond, Project Coordinator Lemuel Palacio, Procurement Specialist Christine Lopez-King, Sr. Accounts Officer Evan Dakers, Social Specialist Nellie Trench, Finance Unit Coordinator Lionel Jimenez, Engineer Clifford King, Local Government Officer Keisha Rodriguez, Urban Planner

Ministry of Finance and Economic Development Yvonne Hyde, CEO

Ministry of Labor, Local Government, Rural Development and NEM Godwin Hulse, Minister Candelaria Saldivar-Morter, CEO

Ministry of Natural Resources and Agriculture Beverly Castillo, CEO Wilbert Vallejos, Land Commissioner Gina Young, Physical Planning Section (Lands Department)

Ministry of Works and Transport Crispin Jefferies, Chief Transport Officer

Mayors Darrell Bradley, Mayor, Belize City Miguel Velasquez, Mayor, Benque Viejo del Carmen Gilbert Swaso, Mayor, Dangriga Anthony Fuentes, Mayor, Punta Gorda Kevin Bernard, Mayor, Orange Walk

Town Councils Howard Melendrez, Councilor, Dangriga

Fedelis Mejia, Works Manager, Dangriga Miley Garcia, City Administrator, Belmopan James Robinson, Technical Adviser, Belmopan Kevin Jones, Municipal Traffic Manager, Belmopan Michael Moore, Supervisor of Bus Terminals, Belmopan Candice Burke, City Administrator, Belize City Alberto Guerra, Town Administrator, Orange Walk

Annex 3: List of site visit locations and dates

Belmopan – April 26, 2012 Santa Elena – April 26, 2012 Dangriga - April 24, 2012

Annex 4: Suggested Packaging for Street Works

Order ofName procurement of packages Procurment Type Name of Streets in Package Estimated Cost of Streets (US$)Timeline

First W4 Shopping Belmopan - Bus 1 way 85865 make longSend list Qual Inf Form Qualification EvaluationInvite bids Evaluate Bids Sign Contract Belmopan - Bus Parking east 58217 30-Apr 2-May 14-May 16-May 30-May 5-Jun

W6 Shopping San Ignacio - 18th 120937

W7 Shopping Orange Walk - Avilez 56575 Orange Walk - Tangerine 46078

W8 Shopping Corozal - Zuzuc 118766 DevelopBank document review bid doc advertise Start work Second W9 NCB Benque - Church 186358 7-May 14-May 21-May early-mid aug Benque - Burns 166856 Benque - Churchill 212251 San Ignacio - Eden 271789 San Ignacio - West 152696

Punta Gorda - Robert Penel 166675 Punta Gorda - Pampano 156272

Third W10 Shopping Orange Walk - San Ignacio 117826 mid juneearly july mid july

Fourth W11 NCB Belmopan - Nim Li Punit 226942 Belmopan - Hummingbird 55295 Belmopan - Racoon 136850

Orange Walk - Santa Familia 312609 DevelopBank document review bid doc advertise start work Corozal - 1st North 318808 late mayearly june early june early september Corozal - Punta Gorda 242787

Annex 5: Detailed Review of Procurement Plan

For Component 1, all packages under Phase 1 have been agreed with confirmed methods for procurement implementation in the procurement plan. The progresses are supervised and next step implementation agreed with PIU as following:

C1 Consulting services for design and technical inspection has been extended in accordance with the amendment of W1/2 contract, with no change in contract conditions and price. W1/W2 Civil works for two pilot TCCs contract under shopping was signed on Aug 25, 2011 and the scope of work was amended in January 12, 2012 cleared by the Bank at addition of BZ$10,288.60. Completion of work is rescheduled for May 2012. C2-3 Consulting services for design and technical inspection for buildings is on-going, with design completed. The supervision is started, but duration of the contract requires extension for construction 12 months period for W5 for Dangriga. W-3 Civil works contract for PG under NCB procedures was signed on March 22, 2012 at USD212,575, with completion period of 4 months. W-5 Four bids for the civil works for Dangriga under NCB procedures were received on April 5, 2012. Post qualification for the lowest evaluated bid, which is within the cost estimate, is expected to be completed by the PIU in mid of May 2012.

For Component 2, C5-10 For consulting services on design of six TCCs’ street rehabilitation, the no-objection to signing the contract by the Bank was given on Oct 31, 2011 and the contract was signed on November 28, 2011. Design has been largely completed by ATA and the consultancy is on schedule. C5-10 The selection of consulting services for technical Supervision of six TCCs’ street rehabilitation was carried out under QCBS. Only 3 firms out of the 6 short listed eventually submitted proposals. The Bank provided No Objection to the final revised Bid Evaluation Report on April 26, 2012.

The procurement of computer equipment for pilot TCCs under NCB procedures subject to post- review has been changed from WB financing to GOB financing. Technical service for installing and connection for network will start for procurement based on technical preparation. The direct contracting for quick book is under preparation of contract subject to Bank’s prior review. Physical asset maintenance consultancy is added to PP under QCBS, for which TOR and cost estimate should be approved with Bank on the technical side.

For Component 3, contract for two vehicles for PIU site work at US$49,300 under NCB procedures. The goods have been delivered (used by PIU coordinator and BSIF driver).

Annex 6: Status of Audit Recommendations

Issue Audit Recommendation 2011 SIF Response April 2011 – March 2012 1. Accounting treatment Debit interest income (not the interest Agreed. BSIF prepared journal entries Resolved and closed. of interest income & expense usage account) and credit the to make adjustments and now the administrative respective bank account when funds are accounting records show accurate info income needs to returned to GoBZ. On subsequent receipt related to interest and administrative improve. of the funds from GoBZ, the respective income. bank account should be debited and the administrative income account should be credited. 2. Minutes of the WB Minutes be signed in a timely fashion as SIF commits to instituting the practice Resolved and closed – all PSC PSC and SIF BOD evidence of approval of the respective of having the minutes signed within 2 meeting minutes have been signed meetings need to be minutes. weeks after confirmation of the minutes after approval at subsequent signed by designated at the subsequent PSC and BOD meeting. signatories. meetings. 3. Funds reimbursed by GoBZ should provide the necessary SIF will engage in discussions with the Resolved and closed - GoBZ has CDB to SIF should funding to SIF in order to allow relevant Ministries to ensure timely provided the necessary funding to be returned to reimbursements on a timely basis. allocation of subvention. allow reimbursements on a timely Government on a basis. timely basis. 4. Monies from Monies from respective funds should not SIF will engage in discussions with the Resolved and closed – GOB has respective funds are be co-mingled. relevant Ministries to ensure timely provided necessary subvention to being co-mingled. allocation of subvention to avoid the avoid practice of co-mingling. practice of co-mingling. 5. Formalize its Arrangement between the GoBZ and SIF The CDI program will be concluded Resolved and closed – Program has management of be formalized in respect of usage of during 2011/2012 financial year. For concluded. projects funded funds under the CDI Program. remaining projects Caribbean through the Development Bank guidelines will be

Commonwealth Debt used. Initiative Program. 6. BNTF Operations Appendix 5.18 “Consultant’s Procedures SIF proposes for BNTF OM to be BSIF raised it with CDB and BSIF Manual (OM) should Flow Chart” of the BNTF OM be amended to allow for both evaluation will follow-up with donor until be amended. amended to reflect current practice. modalities presently permitted by CDB amendment is completed. 7. Supporting Each of the steps undertaken by SIF be The absence of preliminary Resolved – TOR for SIF project documentation not documented and maintained in the assessments from a file indicates officers were amended in 2011 to maintained in respective sub-project files. weakness in the filing of documents by address this issue. BMDP has its respective sub-project SIF Officers as opposed to a deviation own Admin Assistant to ensure files. from the project cycle. proper doc. filing. 8. Procurement Procurement procedures should be duly World Bank no objection and Resolved and closed – WB no procedures not followed. Contractor General concurrence were objection and contractor general followed. sought retroactively in one instance. concurrence are received before contract signing. 9. Updating of SIF’s SIF should upload the required project SIF website is now operational and Resolved and closed - all relevant website. documentation to its website. content now being uploaded. BMDP information are posted on BSIF website. 10. Bid Evaluation The same committee from BSIF should The Bid Evaluation Committee as Resolved and closed. Committee not not be used for WB projects. specified in OM is now being adhered established per OM, to. BMDP.

Annex 7: Monitoring and Evaluation

Data Collection Matrix Target Values Data Collection and Reporting Project / Data Intermediate Baseli Frequen Responsibil Collection Comments Outcome ne YR 1 YR 2 YR 3 YR 4 YR 5 cy and ity for Data Instrume Indicators Reports Collection nts Direct Direct Direct Direct Direct Mal Fema Mal Fema Mal Fema Mal Fema Mal Fema The data Number of e le e le e le e le e le collected beneficiaries with 49 51% in year 1 is access to improved % for the quality of basic Sub- - - - - two(2) municipal 31,916 projects 0 Annual PIU-BSIF Pilot infrastructure(direct Indirect Indirect Indirect Indirect Indirect completio Projects in and indirect project n reports Mal Fema Mal Fema Mal Fema Mal Fema Mal Fema Belmopan beneficiaries(numb e le e le e le e le e le and San er),of which is 49 Ignacio/Sa female(percentage). 51% % nta Elena

- - - - 146,172 Number of towns End of successfully phase 1 Project completing 0 - - - - - and end Completio PIU-BSIF investments in first of the n Reports and second phases project

Compilati on of At least four different TCC’s each have progress achieved four out reports of seven 0 - - - - - Annual such as PIU-BSIF intermediate financial outcome indicators reports of component 2 submitted to MLLGRDN N Data Responsibi Intermediate Frequen Collectio Baseli lity for Outcome YR 1 YR 2 YR 3 YR 4 YR 5 cy and n ne Data Indicators Reports Instrume Collection nts Sub- Km of drainage Semi- projects financed under the 0 - - - - - PIU-BSIF annual completio project n reports Sub- Km of rehabilitated Semi- projects roads under the 0 - - - - - PIU-BSIF annual completio project n reports The data collected Number of Sub- for year 1 improved Semi- projects 0 5 - - - - PIU-BSIF reflects intersections under annual completio only the the project n reports pilot projects

The data collected Sub- Number of traffic for year 1 Semi- projects signs financed 0 26 - - - - PIU-BSIF reflects annual completio under the project only the n reports pilot projects Number of towns and cities that Sub- comply with terms Semi- projects 0 - - - - - PIU-BSIF and conditions of annual completio subproject n reports agreement Minutes Number of towns Semi- of Town MLLGRD and cities that have 0 - - - - - annual Hall N adopted MGP Meetings Local Financial revenu Reports Number of towns e Semi- submitted MLLGRD increasing own - - - - - collect annual to N revenue collection ed in MLLGRD 2009 N Towns and Belize Councils City and Number of towns Semi- submit MLLGRD San Pedro with qualified 0 6 - - - - annual informatio N Town accountants on staff n to need to be MLLGRD included N Financial Belize Number of towns Semi- Reports MLLGRD City and submitting required 0 7 - - - - annual submitted N San Pedro financial reports to Town

MLLGRD need to be N included

Belize Number of towns City and using a Reports Semi- MLLGRD San Pedro computerized 0 1 - - - - submitted annual N Town financial reporting to PIU PC need to be system included Number of towns Financial with a physical Reports asset maintenance Semi- submitted MLLGRD 0 - - - - - plan and annual to N corresponding MLLGRD budgets N Number of towns Reports Semi- with roads and 0 - - - - - submitted annual safety procedures to PIU PC Number of towns and city councils that have received Reports MLLGRD Semi- training from the 0 - - - - - submitted N and annual Local Government to PIU PC MNRE and Urban Planning Officers Number of TCC’s provided with MNRE Semi- spatial data sets 0 7 - - - - Internal MNRE annual showing land Reports parcels

Percentage of subprojects that BSIF PIU meet BSIF’s Semi- 0 - - - - - Internal PIU-BSIF service standards in annual reports accordance with the OM Procurement and BSIF PIU FM duties are Internal executed in Semi- 0 yes - - - - reports/ PIU-BSIF accordance with annual Financial national and World Audits Bank guidelines

Annex 8: Use of Funds by Disbursement Category

GOVERNMENT OF BELIZE - IBRD Belize Municipal Development Project (Proj. 79580 BZ) INTERIM UN-AUDITED FINANCIAL REPORT USE OF FUNDS BY DISBURSEMENT CATEGORY - Amounts in US'00 - Actuals for and as of quarter ending March 31st, 2012 Quarter Cummulative - Year to Date Life of Project (LOP) CATEGORY Budget - Jan - Actual - Jan - Variance Budget - Year Actual- Year Variance Actual- Variance Allocation Mar 12 Mar 12 Amount % to Date to Date Amount % Cummulative Amount %

1. CS & Non-CS Serv Part A $45,000.00 $91,436.03 $46,436.03 203% $360,000.00 $161,688.33 ($198,311.67) 45% $1,322,500.00 $183,107.60 ($1,139,392.40) 14%

2. GO and Works Part A $271,150.00 $31,427.41 ($239,722.59) 12% $2,310,650.00 $78,167.17 ($2,232,482.83) 3% $10,120,000.00 $78,167.17 ($10,041,832.83) 1%

3. GO, CS, Non-CS, TRN Part B $177,000.00 $22,864.84 ($154,135.16) 13% $708,000.00 $67,241.54 ($640,758.46) 9% $1,050,000.00 $101,739.49 ($948,260.51) 10%

4. GO,CS, Non-CS, OP, TRN Part C $74,534.17 $114,756.88 $40,222.71 154% $384,160.00 $358,305.58 ($25,854.42) 93% $1,670,000.00 $419,660.38 ($1,250,339.62) 25%

5. PPF Refinancing $800,000.00 $359,842.05 ($440,157.95) 45%

7. Premium for Caps/Collars

8. FEF Front End Fee $37,500.00 $37,500.00 $0.00 100% TOTAL $567,684.17 $260,485.16 ($307,199.01) 46% $3,762,810.00 $665,402.62 ($3,097,407.38) $0.1818% $15,000,000.00 $1,180,016.69 ($13,819,983.31) $0.088%

BMDP Counterpart Funding 2.1 Works - GOB Town Councils $4,900.00 $1,978.89 ($2,921.11) 40% $86,850.00 $1,978.89 ($84,871.11) 2% $303,600.00 $1,978.89 ($301,621.11) 1%

4. 1 OP, TRN Part C-counterpart funding$4,218.75 $5,133.00 $914.25 122% $49,405.00 $16,426.13 ($32,978.87) 33% $84,375.00 $16,426.13 ($67,948.87) 19% Subtotal BMDP Counterpart $9,118.75 $7,111.89 ($2,006.86) 78% $136,255.00 $18,405.02 ($117,849.98) 14% $387,975.00 $18,405.02 ($369,569.98) 5% GRAND TOTAL $576,802.92 $267,597.05 ($309,205.87) 46% $3,899,065.00 $683,807.64 ($3,215,257.36) 18% $15,387,975.00 $1,198,421.71 ($14,189,553.29) 8%

Annex 9: Use of Funds by Category

GOVERNMENT OF BELIZE - IBRD BELIZE MUNICIPAL DEVELOPMENT PROJECT (IBRD 79580 - BZ) INTERIM UN-AUDITED FINANCIAL REPORT USE OF FUNDS BY PROJECT CATEGORY - Amounts in US'00 For Quarter ending March 31st, 2012

Client Amount BSIF's Books- % Disbursement Category Allocation Connection- Variance Disbursed - Explanations Undisbursed Disbursed Undisbursed US'00

1. CS & Non-CS Serv Part A $ 1,322,500.00 $ 1,139,392.40 $ 1,230,828.43 $ (91,436.03) $ 91,671.57 6.9% Expenditure from Jan - Mar 2012($91,436.03)

2. GO and Works Part A $ 10,120,000.00 $ 10,041,832.83 $ 10,073,260.24 $ (31,427.41) $ 46,739.76 0.5% Expenditure from Jan - Mar 12 ($31,427.41)

3. GO, CS, Non-CS, TRN Part B $ 1,050,000.00 $ 948,260.51 $ 971,125.35 $ (22,864.84) $ 78,874.65 7.5% Expenditure from Jan - Mar 12 ($22,864.84)

4. GO,CS, Non-CS, OP, TRN Part C $ 1,670,000.00 $ 1,250,339.62 $ 1,365,096.50 $ (114,756.88) $ 304,903.50 18.3% Expenditure for Jan - Mar 12 ($114,756.88)

5. PPF Refinancing $ 800,000.00 $ 440,157.95 $ 440,157.95 $ - $ 359,842.05 45.0% Closed 31/1/2011

7. Premium for Caps/Collars $ 37,500.00 $ - $ - $ - $ 37,500.00 100.0%

TOTAL $ 15,000,000.00 $$ 13,819,983.31 13,379,825.36 $ 14,080,468.47 $ (260,485.16) $ 919,531.53 6% Advance to Designated Acccount $ (616,317.51) Total undisbursed $ 13,464,150.96 Total Disbursed $ 1,535,849.04 10.24%

Annex 10: Comparison Graphics