Document of The World Bank
FOR OFFICIAL USE ONLY Public Disclosure Authorized
Report No: 30185
IMPLEMENTATION COMPLETION REPORT (TF-50032)
ON A
GRANT Public Disclosure Authorized IN THE AMOUNT OF US$ 2.0 MILLION
TO
CRNOGORSKO PRIMORJE PEW
FROM THE TRUST FUND FOR SERBIA AND MONTENEGRO
FOR A
MONTENEGRO ENVIRONMENTAL INFRASTRUCTURE PROJECT Public Disclosure Authorized
MARCH 11, 2005
Infrastructure and Energy Sector Unit South East Europe Country Unit Europe and Central Asia Region Public Disclosure Authorized 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. CURRENCY EQUIVALENTS (Exchange Rate Effective September 30, 2004) Currency Unit = Euro (€) € 1 = US$ 1.23 US$ 1 = € 0.81
FISCAL YEAR January 1 - December 31
ABBREVIATIONS AND ACRONYMS CAS - Country Assistance Strategy d.o.o. - Limited Liability Company in Serbian EAR - European Agency for Reconstruction EMP - Environmental Management Plan ERTP - Economic Reconstruction and Transition Program FRY - Federal Republic of Yugoslavia GDP - Gross Domestic Product ICR - Implementation Completion Report IDA - International Development Association FRR - Financial Rate of Return KfW - Kreditanstalt fur Wiederaufbau MEIP - Montenegro Environmental Infrastructure Project MESTAP - Montenegro Environmentally Sensitive Tourist Areas Project MJC - Multi-Municipal Joint Solid Waste Disposal Company NGO - Non-government Organization NIMBY- Not-in-my-back-yard syndrome PAD - Project Appraisal Document PEW - Public Enterprise for Water Supply, Wastewater Treatment and Solid Waste Disposal (Crnogorsko Primorje) PMF - Podgorica Municipal Fund PSR - Project Status Report PViK - Javno Preduzece Vodovod i Kanalizacija (Podgorica Water Supply Company) RoM - Republic of Montenegro SaM - Serbia and Montenegro SFRY - Socialist Federal Republic of Yugoslavia WHO - World Health Organization TSS - Transition Support Strategy
Vice President: Shigeo Katsu Country Director: Orsalia Kalantzopoulos Sector Manager: Sumter Lee Travers Task Team Leader: Manuel G. Mariño
SERBIA AND MONTENEGRO Montenegro Environmental Infrastructure 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 1 4. Achievement of Objective and Outputs 5 5. Major Factors Affecting Implementation and Outcome 8 6. Sustainability 9 7. Bank and Borrower Performance 11 8. Lessons Learned 12 9. Partner Comments 13 10. Additional Information 14 Annex 1. Key Performance Indicators/Log Frame Matrix 15 Annex 2. Project Costs and Financing 16 Annex 3. Economic Costs and Benefits 18 Annex 4. Bank Inputs 19 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 20 Annex 6. Ratings of Bank and Borrower Performance 21 Annex 7. List of Supporting Documents 22 Annex 8. FRR calculation 23 Annex 9. Recipient's Contribution 24 Annex 10. ICR Mission Aide-Memoire 32
Project ID: P074618 Project Name: Montenegro Environmental Infrastructure Team Leader: Manuel G. Marino TL Unit: ECSIE ICR Type: Core ICR Report Date: March 11, 2005
1. Project Data Name: Montenegro Environmental Infrastructure L/C/TF Number: TF-50032 Country/Department: SERBIA AND MONTENEGRO Region: Europe and Central Asia Region Sector/subsector: Solid waste management (68%); Water supply (32%) Theme: Water resource management (P); Pollution management and environmental health (P); Other urban development (P); Infrastructure services for private sector development (S)
KEY DATES Original Revised/Actual PCD: 07/12/2001 Effective: 03/19/2002 03/19/2002 Appraisal: 07/16/2001 MTR: Approval: 11/28/2001 Closing: 09/30/2004 09/30/2004
Borrower/Implementing Agency: FEDERAL REPUBLIC OF YUGOSLAVIA/CRNOGORSKO PRIMORJE PEW Other Partners:
STAFF Current At Appraisal Vice President: Shigeo Katsu Johannes F. Linn Country Director: Orsalia Kalantzopoulos Christiaan J. Poortman Sector Manager: Sumter Lee Travers Motoo Konishi Team Leader at ICR: Manuel G. Marino Manuel G. Marino ICR Primary Author: Michael John Webster
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: SU 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: Context: Serbia and Montenegro (SaM) – formerly the Federal Republic of Yugoslavia (FRY) – succeeded to the membership of the former Socialist Federal Republic of Yugoslavia (SFRY) in the Bank in May 2001. The Bank’s initial support to SaM was governed by a two-phase Transitional Support Strategy (TSS). In the first (pre-membership) phase a US$30 million trust fund was established by the Bank to finance an emergency economic recovery and transition program in FRY. Five projects were financed out of this trust fund, one in Montenegro (this project, i.e., the Montenegro Environmental Infrastructure Project (US$2 million)) and the other four in Serbia, namely, Private Sector Development Technical Assistance Grant (US$6 million), Financial Sector Development Technical Assistance Grant (US$6 million), Electric Power Emergency Reconstruction Project (US$6 million) and Social Assistance Special Financing (US$10 million). The second phase provided a broader program of support for the Economic Reconstruction and Transition Program (ERTP) financed under a three-year exceptional International Development Association (IDA) allocation of up to US$540 million. The first full Country Assistance Strategy (CAS) for SaM, covering FY05-07, was discussed by the Executive Directors in December 2004.
Montenegro is the smaller (0.6 million people) of the two republics comprising the union of Serbia and Montenegro (10.7 million people). The Bank has a long history of support to the water sector in both republics, including the preparation of a water/coastal management project for Montenegro in the early 1990s. In preparing this project -- which was not considered by the Executive Directors because of the change in country circumstances -- the Bank worked closely with Crnogorsko Primorje (Public Enterprise for Water Supply, Wastewater Treatment, and Solid Waste Disposal (PEW)), the government company formed to work on regional water, wastewater and solid waste sector initiatives in Montenegro. The grant for the Montenegro Environmental Infrastructure Project was awarded directly to PEW, and guaranteed jointly by FRY and Montenegro.
Objective: The objective of the project was to improve environmental conditions in the coastal region of Montenegro and to improve the quality of water supply in the Zeta Valley (an area near the republic’s capital, Podgorica). This objective was to be achieved through:
(a) the rehabilitation of key environmental (solid waste) infrastructure in several coastal municipalities in the region of Kotor Bay, a prime tourist zone;
(b) the completion of a water pipeline to replace contaminated water sources in the Zeta Valley; and
(c) technical assistance for engineering services and auditing.
The project was conceived as a quick operation to address urgent problems, leaving for a second operation more fundamental actions and long-term solutions.
Assessment of objective: The objective of the project was clear, simple, realistic and important for the Government of Montenegro (GOM), and a priority for the Bank’s program of support. The project had two distinct objectives in two distinct locations, namely: (i) environmental improvements to the coastal region; and (ii) improved water quality in the Zeta Valley. These two objectives are treated separately.
The TSS argues (as stated in the 2001 TSS, and the 2002 and 2004 TSS updates) that by improving the environmental conditions of the coastal areas, the project would contribute to “stimulating near-term growth and creating the basis for a sustainable supply response” through one of the primary growth drivers in Montenegro: tourism. Montenegro’s coastal areas are a prime source of revenue due to the large influx of tourists during the summer season (up to 500,000 per day); however, environmental degradation, due to
- 2 - historic under-investment, and poor operation and maintenance of sanitary infrastructure has adversely impacted the tourism sector (the Tourist Master Plan for Montenegro (2001) states that improvements in sanitary infrastructure were a precondition for the development of tourism). While the project was expected to have a positive impact on tourism, it was recognized that the linkage between the project outputs and tourism would be difficult to demonstrate and tourist revenues were therefore not taken as an outcome indicator.
During the summer season, all of the six municipalities in the coastal region (Herceg Novi, Kotor, Tivat, Budva, Bar and Ulcinj) experienced water shortages, suffered poor water quality, and did not have adequate facilities for the disposal of wastewater and solid waste. Most solid waste in Montenegro, particularly in the coastal area, was collected and disposed of in wild dumps that were not regarded as sanitary. This posed a threat to public health through the potential contamination of groundwater and the potential build-up of gases. The Bank’s project in solid waste management in three of the six municipalities (Kotor, Budva and Tivat) was envisioned as part of a multi-donor strategy to address these problems. Other key donors supporting the sector were the KfW-financed water supply project and the Government of Austria-financed wastewater project.
Water quality problems, both bacteriological and chemical, were also significant in Montenegro. The Zeta Valley, an area of around 30,000 people south of Podgorica, suffered particularly acute and urgent water quality problems due to industrial contamination from an aluminum factory (affecting primarily the 10,000 inhabitants connected to the distribution system). Both GOM and the Bank viewed the health and environmental problems associated with this contaminated water source as a priority needing urgent attention.
The two objectives of GOM were combined into one project because each was relatively small and both objectives could be implemented by PEW, with the Podgorica Municipal Fund (PMF) support for the Zeta Valley pipeline. During project preparation it was questioned whether the Zeta Valley component would delay implementation, due to legal questions about the liability for the contamination from the aluminum plant; however, GOM and the Bank rightly argued that it was worthwhile to retain this component for the following reasons: (i) the contaminated water posed a severe and urgent health threat to an important segment of the population of Zeta Valley; and (ii) engagement in the Republic’s capital, and in an important economic region (Zeta Valley contributes significantly to agricultural exports), would increase the Bank’s ability in policy dialogue on Republic-wide reforms in the water sector.
3.2 Revised Objective:
The objective was not revised.
3.3 Original Components:
The total project cost was estimated at US$2.8 million, of which, US$2 million was to be funded by the Bank grant and US$0.8 million was to come as counterpart funding from GOM. The project comprised three components.
Component I. Coastal Environmental Infrastructure (US$1.55 million, 55% of total costs)
· Landfill Rehabilitation. The project was designed to finance the rehabilitation of the multi-municipal Kotor landfill to meet sanitary standards. The landfill, which served the municipalities of Kotor, Budva and Tivat, was in use until 1992, when it was abandoned
- 3 - during the conflict with Croatia. Since that time, three informal ("wild") dumps had been put into use in all three of these municipalities. The project would finance civil works and equipment needed to rehabilitate and operate the Kotor landfill and permanently close the wild dumps in an environmentally sound manner.
· Solid Waste Equipment. In addition to the rehabilitation of the physical site, the project was designed to finance collection equipment as well as equipment to maintain and manage the Kotor landfill and institute long-term environmental monitoring.
Component II. Zeta Valley Water Supply (US$1.10 million, 39% of total costs)
· Water Main Construction. To address the lack of safe water in the Zeta Valley the project was to finance the completion of the construction of a water supply pipeline to replace contaminated water sources in the Zeta Valley with water from the Podgorica municipal water supply system.
Component III. Technical Assistance (US$0.15 million, 5% of total costs)
· Engineering Services and Auditing. To support project implementation, the project was to provide funding for the completion of engineering services and for auditing of the project accounts.
PEW was responsible for the entire project (as Grant Recipient). However, PMF, the premier agency for financing and implementing infrastructure projects in Podgorica, was responsible for implementing Component 2 as agreed in a Technical Implementation Agreement signed between PEW and PMF.
Assessment of project design and components: The project design reflected a credible means of achieving the project objectives. The design was simple and clearly formulated. The components were directly related to meeting the project objective and reflected the priorities of GOM. This simplicity in design and implementation arrangements, combined with the need for strong supervision and financial controls, are lessons applied from other projects in the water and waste sector. The PAD convincingly argued that the project should focus on urgent investment needs as an entry point for future policy dialogue, a strategy that has proved successful, and one that is being carried into the follow-up project, the Montenegro Environmentally Sensitive Tourist Areas Project (MESTAP).
The project identified three moderate risks: (i) unwillingness to pay for services; (ii) liability issues with the aluminum plant in the Zeta Valley delaying the project; and (iii) weak implementation capacity. Each risk was mitigated, as far as possible, through consultation with all stakeholders and the planned strong support during implementation. The project design adequately considered the capacity of PEW and PMF. Neither PEW nor PMF had prior experience with Bank procurement procedures (although both agencies had experience implementing projects financed by several European donors), therefore the project contained only eight relatively small goods, works and consulting services contracts to be procured.
3.4 Revised Components:
The components were not revised; however, as discussed in section 5.1, de facto changes were made to the components due to the 24 percent loss in the total resources available to the project from the depreciation of the US dollar relative to the Euro.
- 4 - 3.5 Quality at Entry:
Satisfactory. The quality at entry is rated satisfactory for the following reasons: (i) the project objectives were a priority for the GOM and the Bank; (ii) the project design was appropriate in its simplicity and reflection of the capacity of the Recipient; and (iii) all safeguards and risks were adequately considered.
The GOM and the Bank both viewed the project as a priority. As documented in the TSS, improved solid waste management in the coastal areas was seen as a means to improving tourism, a key growth driver in the Republic (which according to the Ministry of Tourism could contribute up to 25 percent of GDP {Gross Domestic Product}in future)., while addressing water contamination in the Zeta Valley was considered important for public health.
In summary, the objective of the project was appropriately modest, and the project design was clear and achievable. The project responded effectively to the need for emergency support, while opening the dialogue necessary to address broader policy issues at a later stage. The only safeguard triggered by the project was “Environmental Assessment”. An Environmental Management Plan was prepared and made public prior to appraisal. As discussed in section 3.3, all critical risks were identified and mitigation measures were incorporated into the project design.
4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective:
Satisfactory. The project is rated satisfactory as it achieved most of its objectives and is expected to have significant developmental impact, beyond its modest size. The most important objective of the project was improving the environment in the coastal area of Kotor Bay through the construction and operation of a regional landfill serving the three municipalities of Kotor, Budva and Tivat. This is the first sanitary landfill in Montenegro and, even in the early stages of operation, is proving to be an effective demonstration to other municipalities that solid waste can be disposed of in an environmentally friendly and financially self-sustaining manner. By successfully constructing the landfill, and giving some of the municipalities who benefit from the landfill a stake in the company that operates it, the project has found a potentially sustainable solution to a perennial environmental problem in Montenegro.
All of the solid waste intended for the landfill, i.e., the domestic, non-toxic waste that is within the jurisdiction of the Municipal Communal Companies, is now being collected and disposed of in a sanitary manner. The wild dumps that were used prior to the project are no longer in use (however, as described in section 4.2, further work in rehabilitating the sites will be completed under MESTAP). Thus the primary objective -- sanitary disposal of waste and the associated environmental improvements -- has been achieved.
The project has had a significant republic-wide impact in demonstrating the value of improved solid waste management, and of sanitary landfills. Prior to the implementation of the project, GOM did not have an up-to-date policy on solid waste management; however, partially as a result of the project, a national strategy has been developed (The republic-level Waste Strategic Master Plan) that adopts many of the approaches used in the project for replication across Montenegro.
Water quality in the Zeta Valley has improved significantly. Of the 30,000 inhabitants of the Zeta Valley, the 10,000 consumers previously supplied by water contaminated by the aluminum plant are now supplied with water satisfying WHO standards from the Podgorica Municipal supply through the transmission main
- 5 - financed under the project. The remaining 20,000 inhabitants – who were never connected to a distribution network (they rely primarily on private wells and other alternate sources) – will be connected to the Municipal supply once the distribution network has been extended to the rest of the valley. As indicated in the Operational Plan, the Municipality of Podgorica plans to begin construction of this distribution system in 2005 for final completion in 2010. No systematic testing has been done of the water quality in the alternate sources (which are primarily private wells) since 1993. There is scant data since 1993 and insufficient to make robust conclusions; however, the few tests that have been conducted by the Institute of Health over the last decade (mainly in response to reports of poor water quality) show significant bacteriological contamination.
4.2 Outputs by components:
Summary:
Component Appraisal estimate Actual (US$m) Rating (US$m) 1 Coastal Environmental 1.45 1.79 S Infrastructure 2 Zeta Valley Water Supply 1.05 1.03 S 3 Technical Assistance 0.15 0.15 S
Contingencies / Miscellaneous 0.15 0.06 TOTAL 2.80 3.03
Component 1 (Coastal Environmental Infrastructure). Satisfactory. The primary achievement of the project was the construction of a regional sanitary landfill that now serves the three municipalities. The landfill has been designed according to European Union (EU) specifications and the quality of construction was satisfactory. All EU directives for landfill design have been followed, such as leachate and gas collection and minimum depth between the floor of the landfill and the groundwater table. The Municipal Communal Companies bring their waste to the site (whereas this waste was previously dumped at no charge in the “wild dumps”) and pay a fee for dumping in the landfill. Construction was completed within the project life; however, only 77 percent of the cost of the landfill was financed out of the project due to the depreciation of the US dollar relative to the Euro (as discussed in section 5.1). The remainder was financed out of MESTAP.
The one activity within this component that was not fully achieved as planned is the closure of the wild dumps. While all three sites are closed (i.e., they have barriers in front of the sites and they are not being used as dump sites, none of the sites have been closed following fully the “environmentally sound manner” described in the PAD yet (including gas collection systems, drainage systems and a secure fence) due to insufficient funds. However, according to the Operational Plan, rehabilitation of the wild dumps will be completed under MESTAP. The current status of the three wild dumps is as follows: (i) part of the Lovanja wild dump (approximately 70 percent) has been covered with soil (under MESTAP, the entire wild dump will be fully rehabilitated); (ii) the Budva wild dump has recovered naturally after dumping of waste was halted, and is now covered by vegetation (it is assumed that no further action is required to rehabilitate this site, but this will need to be confirmed by an Independent Reviewer); and (iii) the Tivat wild dump will be rehabilitated under MESTAP. Once degassing and drainage measures are completed, after a stabilization period of two to three years, a permanent soil cover, including planting, is foreseen in these landfills.
- 6 - The portion of the Lovanja wild dump that has not been covered with soil contains a small Roma community that recycles waste from the wild dump. Once the location of the landfill was changed to Lovanja (this occurred after appraisal, as discussed in section 5.1), a Lead Social Scientist was included in the Bank’s supervision team to advise on the best approach to dealing with this issue. Under MESTAP, a recycling plant will be constructed at the new landfill (next to the old wild dump site) that will allow this community to recycle waste under safer, more controlled conditions. This is expected to have a beneficial impact on the livelihood of this community that might otherwise have been negatively affected by the closure of the site.
Equipment for the operation of the landfill (bulldozer and compactor) was purchased by the project; however, collection equipment and trucks for the communal companies were not purchased as originally envisaged in the PAD due to the shortfall in funds described in section 5.1. Additional collection equipment is to be financed under MESTAP.
Component 2 (Zeta Valley Water Supply). Satisfactory. As described in section 4.1, this component was designed to finance the procurement of pipes to supplement a larger government implemented project. Out of the 7.5 km of pipeline originally envisaged, 1 km was procured by GOM and the remaining 6.5 km was satisfactorily procured by the project. All the pipes procured under the project have been laid and are in operation (part of the transmission main for the Zeta Valley Water Supply) and have led to improved water quality for the 10,000 people served by the current distribution system.
Component 3 (Technical Assistance). Satisfactory. Three studies were financed out of this component: environmental impact assessment, social assessment and institutional study. PEW and the Bank reviewed each study as satisfactory. In addition to the studies required under MEIP, each of the consulting assignments included a component that contributed to the preparation of the MESTAP; for example, the environmental study assessed the environmental impacts of the two regional landfill sites, one for each project. This project also financed the audit of the project accounts.
4.3 Net Present Value/Economic rate of return:
Economic analysis during appraisal assessed the cost effectiveness of the investment. The net present value (NPV) of the project was not calculated during appraisal, and has not been calculated at completion; however, Annex 3 presents a discussion on the economic costs and benefits, and section 4.4 presents the financial rate of return (FRR) and NPV for the regional landfill site.
4.4 Financial rate of return:
The FRR was not calculated during appraisal due to the urgent nature of the project (as argued in the PAD); however, an attempt has been made to calculate the FRR of the landfill in this report. Given that the landfill investment cost is financed to a substantial extent (77 percent) by grant financing, and taking into account the need to ensure that the resulting costs of services to the final beneficiaries, including households, remained within affordable limits, the tariffs for the landfill services were based on the full recovery of operational expenses rather than on generating a financial rate of return on total investment. The resulting cash flow from operations is adequate for the landfill company to carry on its operations efficiently, although the FRR on total investment (i.e., without taking into account the element of grant financing) is - 5 percent. If the total investment were to be reduced by the amount of the grant financing, the resulting FRR is estimated at 11 percent. However, for the reasons explained, neither measure of FRR is considered an appropriate indicator for this investment. The FRR calculation is attached in Annex 8.
- 7 - 4.5 Institutional development impact:
Substantial. The primary institutional development impact of the project has been the provision of a model for efficient and effective disposal of solid waste in an environmentally and financially sustainable manner. This approach, in particular the concept of Multi-Municipal Joint Solid Waste Disposal Companies (MJC), has been endorsed by other donors, and more important, adopted by the GOM in the republic-level Waste Strategic Master Plan for replication throughout Montenegro. The GOM also decided to close all wild dumps in Montenegro to encourage municipalities to use sanitary landfills and outlaw illegal dumping. In addition, as a result of the project the first MJC Lovanja d.o.o. (limited liability company) was established to operate the Lovanja landfill. The company is owned by some of the municipalities that it serves and PEW, and operates on a commercial basis. The operation of Lovanja d.o.o. is discussed more fully in section 6.1. PEW was also strengthened as a result of the project: four more staff were employed to assist in the management of the project, and technical expertise was built amongst these staff, and the agency in general, in solid waste management.
5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency:
The two most significant factors affecting project implementation and outcome are: (i) the depreciation of the US dollar relative to the Euro; and (ii) public opposition to the location of the regional landfill.
During implementation of the project the US dollar depreciated relative to the Euro significantly (from € 1.13 in Nov 2001 to €0.81 in Sept 2004), resulting in a loss of resources to the project of over €550,000 (equivalent to 24 percent of the grant value). The impact of the reduced budget was that the Lovanja landfill could only be partially financed by the project and the wild dumps were not fully rehabilitated. However, as discussed in section 4.2, completion of both these activities is covered under MESTAP.
Public opposition to the location of the regional landfill resulted in delays to the project of over a year; however, PEW and the Bank followed all due process in resolving the issues. During project preparation, it was agreed that the old landfill site in Tresnjicki Mlini (in the Grbalj field, Municipality of Kotor) would be rehabilitated and used as the site for the new regional landfill (this site was designated in the Urban Plan of the Municipality of Kotor for the location of a regional landfill). However, due to protests by a new NGO called the “Ecological Society of Grbalj,” the municipality of Kotor reversed its decision and removed the proposed site from the Urban Plan in December 2001 (shortly after the project was approved) without proposing an alternative. The reason for the opposition to the landfill appears to be the “not-in-my-back-yard” (NIMBY) syndrome common to the location of “undesirable” environmental infrastructure such as landfill sites and wastewater treatment plants. The municipality of Kotor then proposed a new location at Lovanja and the Bank assisted the municipality in appraising this option. An NGO in this valley, European Home (with collaboration from residents of Tivat and Kotor), opposed the Lovanja site for the same reasons (NIMBY). PEW and the municipality of Kotor obtained endorsement and appropriate clearances from the GOM and from the courts on all challenges (for example, claims on the ownership of the land and queries about the potential disruption to the airport) and followed all Bank environmental assessment, social assessment and public disclosure procedures. The Lovanja site was initially given a three-year temporary license and the Municipality of Kotor (with support from PEW) has applied for a long-term license for this site (as documented in the Operational Plan), and purchased the land adjacent to Lovanja for possible expansion of the site under MESTAP. This land purchase has been made in full compliance with all Bank policies and procedures. It has not yet been determined whether the land adjacent to the current site will have sufficient capacity to ensure a long-term solution; however, a study is
- 8 - envisaged under MESTAP to make this assessment.
5.2 Factors generally subject to government control:
Factors subject to government control can be separated into republic-level issues and municipal-level issues. At the republic-level, the GOM did not have any up-to-date legislation or guidelines over the location of landfill sites or the approval steps necessary to design and construct a landfill. At the municipal level, the removal of Tresnjicki Mlini from the Kotor Urban Plan without an alternative also delayed project implementation, and enabled other disgruntled stakeholders to further express their concerns over the Lovanja site. As discussed in section 4.1, the reduction of the municipal budget to the water sector in the Zeta Valley has had significant impact on completion of the scheme.
5.3 Factors generally subject to implementing agency control:
See sections 5.1. and 5.2.
5.4 Costs and financing:
As most of the project costs were incurred in Euro, and the impact of the devaluation of the US dollar relative to the Euro was significant (24 percent of the grant), not all of the planned activities could be fully financed out of the project (as discussed in section 5.1.); however, all are being finalized under MESTAP.
6. Sustainability 6.1 Rationale for sustainability rating:
Likely. The benefits accruing from the solid waste component are likely to be sustained due to the following: (i) the GOM is committed to ensuring adequate solid waste disposal in all municipalities in the republic (as recommended in the republic-level Waste Strategic Master Plan); (ii) the Ministry of Environmental Protection and Urban Planning, PEW and all the municipalities are all capable and committed to ensuring that the landfill in Kotor is sustainable (as stated in the Operational Plan); and (iii) the follow-up project, MESTAP, consolidates many of the project activities and reinforces the project concept through replication in the neighboring municipalities of Bar and Ulcinj.
The main determinant of the sustainability of the project is the sustainability of the Lovanja landfill, which, in turn is determined by the sustainability of Lovanja d.o.o., the MJC created to operate the landfill. The company is jointly owned by two of the three municipalities (Kotor and Budva) and PEW. Shares have been apportioned based on inhabitants (including tourists) and financial contributions (land (Kotor), and taxes and duties (PEW)). The resultant division of shares is: Budva 28.69 percent, Kotor 46.36 percent, and PEW 24.95 percent. The municipality of Tivat opted out of the MJC when the company was formed; however, it participates in the landfill as a user.
The sustainability of Lovanja d.o.o. is dependent on the following three factors:
· Permanent licensing of the landfill: Currently, the landfill operates under a three-year temporary license (the landfill began operations in July 12, 2004 and the license will expire on July 12, 2007), as it is not registered in the Urban Plan of the Municipality of Kotor (registration is necessary under the law for permanent licensing). As stated in the Operational Plan, all measures to ensure a permanent solution are being pursued, in particular, an application has been submitted to the Ministry of Urban Planning and Environmental
- 9 - Protection for permanent licensing and for registration, land surrounding the site has been purchased in anticipation of establishing a long-term landfill, and processes are advancing in the Municipality of Kotor to designate the site for the location of a regional landfill in the Urban Plan. The technical capacity of the landfill has been designed for three years, however, with relatively minor construction work this can be extended to 10 years.
· Financial viability of Lovanja d.o.o. The estimated revenue stream for Lovanja d.o.o. is presented in Annex 8. At the current tariff of €13/ton the company can meet all projected operational expenses. The company plans to increase the tariff to €16/ton in year 4 in order to service the loan repayment for the additional investment required to extend the economic life of the site by 10 years. All three communal companies are regularly paying their monthly bill for dumping at the landfill; however each company generated a debt during the first three months of operation (the arrears of the three companies at the time the ICR was drafted were Kotor € 19,700, Budva €40,000 and Tivat €4,200). The reason for the initial nonpayment is that none of the municipalities or communal companies had allocated funds from their budgets for the dumping charges; however allocation have now been made in each municipal budget. Each company has agreed to fully service its debts by March 2005.
· Institutional continuity: Municipalities have joint roles as board members of Lovanja d.o.o. and owners of the communal solid waste companies that use and pay for the services of the landfill. Therefore, they face dual incentives: one to raise tariffs to improve the financial viability of the company; and the other to lower tariffs so that communal companies face lower charges. The project was successful, against great odds, at achieving the level of collaboration between the municipalities that was achieved (except for the municipality of Tivat), and now that stakeholders share a financial stake in the company, future collaboration should be easier. In addition, under MESTAP, the Bank team continues to work with all of these stakeholders and should help consolidate the existing relationships.
Significant environmental benefits are anticipated due to the improved collection and disposal of solid waste, and more important, halting the practice of wild dumping on the project site. In addition, the Environmental Management Plan details a strategy for the environmental monitoring of all wild dumps closed under the project. One environmental concern that was outside the scope of the project --but which clearly needs to be part of the overall solid waste strategy -- is the disposal of hazardous waste, in particular, industrial and healthcare waste. Hazardous waste is a problem throughout SaM (however, it is a relatively small problem for the coastal region) as currently no permanent storage or disposal facilities exist in either republic. To address this issue, the republic-level Waste Strategic Master Plan outlines a strategy for dealing with all hazardous waste and recommends that the Environmental Protection Agency be responsible for industrial waste and the Department of Health be responsible for healthcare waste. Currently, certain hazardous waste, in particular batteries and animal waste, is disposed in a sanitary manner in special cells constructed in the Lovanja landfill for this purpose.
The transmission main in the Zeta Valley is in operation, and the sustainability of the investment itself is likely. As stated in the Operational Plan, the expansion of the distribution system to supply all 30,000 consumers from this new pipeline should be completed in 2010. In other service areas of Javno Preduzece Vodovod i Kanalizacija (the Podgorica Water Supply Company (PViK)) the tariff collection rate is high and all operation and maintenance costs are recovered. It is assumed that once service delivery is extended in the Zeta Valley similar collection rates will be achieved.
- 10 - 6.2 Transition arrangement to regular operations:
The Operational Plan details all operating plans for the investments made under this project. The Lovanja landfill has operated since July 2004 and has performed satisfactorily since then. Operation of the Zeta Valley pipeline has been transferred from PMF to PViK and the pipeline is in operation.
7. Bank and Borrower Performance Bank 7.1 Lending:
Satisfactory. The performance of the Bank team during project identification, assistance to the recipient in project preparation and project appraisal was satisfactory. Project identification responded to the high priority given by the GOM and the Bank to improving tourism through environmental protection and addressing the urgent environmental issue in the Zeta Valley. The project was prepared by the GOM in four months, in a large part, due to the efficient and effective assistance given by the Bank team. The resultant appraisal document is a concise, simple, yet thorough document. All relevant technical, institutional, environmental and social issues were addressed commensurate with the project’s small size, brief implementation period, and urgent nature of the investments. The procurement arrangements were particularly simple and well designed. As discussed in section 3.3, all critical risks were adequately identified and measures to mitigate these risks were adopted.
7.2 Supervision:
Satisfactory. The Bank’s performance during supervision is rated satisfactory for the following reasons: (i) adequate reporting of project implementation progress; (ii) timely, comprehensive and realistic Project Status Reports (PSRs); (iii) the quality of advice given to the Recipient; and (iv) the regular and appropriately staffed supervision missions and correspondence with the Recipient. There were no extensions to the project closing date. The project experienced cost overruns due to the exchange rate (as detailed in section 5.1); however, the shortfall in funds was covered by MESTAP. A mid-term review was not carried out due to the relatively short implementation period and the fact that the project did not need restructuring or significant mid-course correction. During the first 18 months, the project experienced disbursement delays due to the opposition to the location of the landfill. These delays did not require an extension of the closing date; however, did contribute towards the project not being able to finance all components which might have been completed prior to the devaluation of the dollar. The Bank team effectively managed to offer useful technical advice, for example, by hiring the services of a neutral expert to advise on the technical merits of one site over another. As both sites were deemed to be technically sound, the Bank did not try to prejudice the decision, in order to ensure that the decision was entirely the responsibility of the municipality. The Bank fielded frequent missions with the requisite skill sets, and responded in time to all requests.
7.3 Overall Bank performance:
Satisfactory. On balance, the Bank’s performance is rated satisfactory.
Borrower 7.4 Preparation:
Satisfactory. Project preparation, including all aspects of the design and relevant sectoral issues, was of satisfactory quality. During project preparation, the need for improved solid waste management became a
- 11 - higher priority for the GOM, as demonstrated by the commissioning of republic-level Waste Strategic Master Plan. The Recipient participated adequately in all Bank missions and performed satisfactorily in all preparation work.
7.5 Government implementation performance:
Satisfactory. The GOM, through the Ministry of Environmental Protection and Urban Planning and PEW, implemented the project in a timely and satisfactory manner. The Ministry was particularly helpful in solving the complaints about the location of the landfill. All counterpart funding from the GOM, PEW and the Municipality of Kotor, in particular, tax exemptions, duties and the value of the land allocated to the landfill site, were provided in a timely manner.
The counterpart funding for the Zeta Valley transmission main from the Municipality of Podgorica (the Bank financed all goods and the municipality financed the works) was provided. However, the financing of phase two of the project, which would extend the distribution network to the entire area (an additional 20,000 customers), was not forthcoming due to budget constraints (the municipality was not able to commit any new expenditures to the water sector over the past three years).
7.6 Implementing Agency:
Satisfactory. PEW performed satisfactorily in implementing all aspects of the project. All reporting has been timely and of adequate quality. The core staff in PEW has remained largely consistent throughout the project and the agency has taken on four new staff dedicated to solid waste management. PEW supervised the PMF contract for the Zeta Valley Water Supply component satisfactorily.
7.7 Overall Borrower performance:
Satisfactory. On balance, the Recipient’s performance is rated satisfactory.
8. Lessons Learned
l The Bank should actively promote the regional landfill model, i.e., multiple municipalities disposing their solid waste in a regional sanitary landfill run by companies owned by the municipalities and national government, for replication throughout Montenegro.
l Agreeing to a landfill location is a complicated and prolonged process, and the Bank can be instrumental in helping stakeholders reach a solution that maximizes the benefits. When locating a landfill, some stakeholders win and others lose. In Montenegro, to agree on a landfill location, the site concerned: (i) needs to be in the GOM Master Plan; and (ii) needs to be in the Urban Plan of the concerned Municipality. Multi-municipal landfills need greater involvement by national government. Patience and advise from the Bank is critical to ensure that due process is followed. Throughout the process, the Bank should offer its services as an honest broker, but avoid being drawn into the fight that will inevitably occur during the process.
l All stakeholders need to be involved and consulted extensively, particularly the local communities that will bear most of the costs. These costs include the potential drop in land value near the landfill site and the nuisance factors such as noise, birds, and odor. The project should ensure that all consultation is properly carried out, and that the land for the chosen site is secured. However, even if all that is done (as it was under the project), it is still possible to
- 12 - experience delays because of opposition to the landfill location.
l The Bank can help reach a solution in its capacity to draw on international independent experts that offer non-biased technical opinions on the basis of the latest knowledge. A consultant credible to all parties must complete all technical aspects and environmental and social impact assessment. The consultants’ Terms of Reference should be publicized before their services are employed, and the final proposal which should contain two to three potential sites, and a recommendation on the best technical option, should be presented to all the stakeholders. The final decision should be made by the municipality and confirmed by the national government.
9. Partner Comments (a) Borrower/implementing agency:
PEW has submitted the Recipient’s Completion Report, on behalf of the GOM. The full text of the report is included in Annex 9.
In addition to the report, the Minister of Environmental Protection and Urban Planning has commented on the overall Implementation Completion Report as follows:
“The aims defined by the MEIP Project: (i) improvement of conditions of environmental protection on the Montenegrin coast, and (ii) improvement of water supply and water quality in the Zeta plane, were successfully and fully realized by its implementation. The Ministry for Environmental Protection and Urban Planning believes that total effects of this project are of manifold importance and that they will contribute to more quality prerequisites for the development of tourism, besides more efficient environmental protection and improvement of water supply.
In the scope of the Project was built the first temporary, regional, sanitary rubbish dump “Lovanja” in Montenegro, for the municipalities of Kotor, Tivat and Budva. Expenses in this part were somewhat higher than planned: the reason for this was the slowed-down schedule of implementation caused by protests of a number of citizens and the fall of the value of the US Dollar. For other activities in the scope of the Project (purchase of equipment and pipes for water supply of the Upper Zeta) there were no unforeseen expenses, therefore this issue was evaluated as satisfactory.
Factors that had an impact on implementation of the Project can be divided to: l Legislation and procedures related to obtaining necessary permits; l The need for relocation from the primary location “Tresnjicki mlini” to the location “Lovanja”; l Protests of one part of local population; and l Fall of the value of the Dollar.
The Agency for implementation of the Project, Public Enterprise “Regional Water Company Montenegrin Coast” met all obligations foreseen by the Project (reports were submitted on time to all necessary subjects). The sustainability of the Project also depends on activities anticipated by the future realization of the project “Montenegro Environmental Sensitive Tourist Area Project” – MESTAP through which, besides building regional rubbish dumps, will also be revitalized illegal rubbish dumps and purchased necessary equipment. Besides the financial and institutional part, it is important to define a permanent location for rubbish dump for the three above mentioned municipalities.
- 13 - Experiences acquired during construction of the regional rubbish dump “Lovanja” are valuable and very important for further more efficient realization of projects in this field. Functioning of the rubbish dump is a good example of how activities related to disposal of solid waste may be organized in a contemporary manner that meets directives and standards that are effective; it is an example for other municipalities in Montenegro which can organize these activities in a similar way. These experiences will also be used for the purpose of avoiding problems when realizing similar projects, in the part that refers to defining the location, prior informing the citizens etc.
Given that all participants in the Project have satisfactorily met their obligations, the Ministry is giving a positive opinion to the ICR, expressing great pleasure with the cooperation to date and hoping that cooperation in the future will continue to the mutual pleasure.” (b) Cofinanciers:
No co-financing was provided for the project. The GOM and the Bank actively consulted other donors involved in the sector, in particular, the European Agency for Reconstruction and KfW. (c) Other partners (NGOs/private sector):
NGOs with an interest in the project were regularly consulted during project preparation, implementation and for this completion report.
10. Additional Information The Bank’s team who worked on this project consisted of the following members: · Andreas Rohde · Gennady Pilch · Jennifer M. Ngaine · Joseph Paul Formoso · Kishore Nadkarni · Manuel G. Mariño · Maria Teresa R. Lim · Michael Gascoyne · Michael John Webster · Norval Stanley Peabody · Salim Benouniche · Xavier Chauvot De Beauchene
- 14 - Annex 1. Key Performance Indicators/Log Frame Matrix
Outcome/Impact Indicators
Note: End-of-project projections at appraisal are shown in parentheses next to each item
Indicator/Matrix Projected in last Actual/Latest PSR Estimate *1 Percentage of solid waste produced that is collected and disposed 100% 100% in proper facilities (100%) *2 Percentage of population in Zeta Valley supplied with water 30,000 30,000 complying with WHO standards (30,000)
Output Indicators
Indicator/Matrix Projected in last Actual/Latest PSR Estimate *3 Rehabilitation of the regional land fill (in Kotor) successfully 90% 100% completed (100%) *4 Number of illegal dumps properly closed (3) 2 0 *5 Construction of 7.5 km remaining of the Zeta pipeline completed 7.5 7.5 (7.5)
Notes:
1. It is assumed from the PAD that only domestic, non-toxic waste is intended for disposal. If we consider all waste, we assume that approximately 90 percent of waste produced is collected (the remaining 10 percent is from the rural areas (and not economically feasible for the communal companies to collect), or is not accepted by the landfill, for example, rubble (other sites exist for disposal of rubble), healthcare waste and other toxic waste). 2. Of the 30,000 people in the supply area, 10,000 receive water from the Municipal supply (tested to WHO standards) and the remainder use alternate sources. Once the distribution network is completed, all 30.000 people will receive water from the distribution network. No systematic testing has been done of the water quality in the alternate sources (which are primarily private wells) since 1993. There is scant data since 1993 and insufficient to make robust conclusions; however, the few tests that have been conducted over the last decade (mainly in response to reports of poor water quality) show bacteriological contamination in most wells. 3. Construction and commissioning of the landfill was completed within the project; however, only 77 percent of the cost was financed out of project, the balance is financed under MESTAP. 4. Three dumps closed to illegal use. One dump and 70% of another dump are closed and covered with soil. However, zero dumps are completely rehabilitated, i.e., environmentally soundly closed (by adding air vents, drainage and fencing) as described in the PAD, due to lack of funds. All dumps will be finalized under MESTAP. 5. Of the 7.5 km of pipeline constructed, 6.552 km was procured by the project, the remaining 1 km was procured by RoM.
- 15 - Annex 2. Project Costs and Financing
Project Cost by Component (in US$ million equivalent) Appraisal Actual/Latest Percentage of Estimate Estimate Appraisal Component US$ million US$ million I. Coastal Environmental Infrastructure 1.45 1.79 123 II. Zeta Valley Water Supply 1.05 1.03 98 II. Technical Assistance 0.15 0.15 102 Miscellaneous (Bank charges, etc.) 0.06 Total Baseline Cost 2.65 3.03 Physical Contingencies 0.00 Price Contingencies 0.15 Total Project Costs 2.80 3.03 Total Financing Required 2.80 3.03 Note: These figures come from Annex 3 of PAD. Table on page 6 in PAD gives a slightly different breakdown.
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 0.85 0.00 0.00 0.32 1.17 (0.85) (0.00) (0.00) (0.00) (0.85) 2. Goods 0.46 0.00 0.59 0.12 1.17 (0.46) (0.00) (0.59) (0.00) (1.05) 3. Services 0.00 0.00 0.10 0.05 0.15 (0.00) (0.00) (0.10) (0.00) (0.10) 4. Miscellaneous 0.00 0.00 0.00 0.31 0.31 (0.00) (0.00) (0.00) (0.00) (0.00) 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 1.31 0.00 0.69 0.80 2.80 (1.31) (0.00) (0.69) (0.00) (2.00)
Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent) 1 Procurement Method Expenditure Category ICB 2 N.B.F. Total Cost NCB Other 1. Works 0.73 0.00 0.00 0.42 1.15 (0.73) (0.00) (0.00) (0.00) (0.73) 2. Goods 1.07 0.00 0.00 0.20 1.27 (1.07) (0.00) (0.00) (0.00) (1.07) 3. Services 0.00 0.00 0.13 0.02 0.15 (0.00) (0.00) (0.13) (0.00) (0.13)
- 16 - 4. Miscellaneous 0.00 0.00 0.06 0.39 0.45 (0.00) (0.00) (0.06) (0.00) (0.06) 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 1.80 0.00 0.19 1.03 3.02 (1.80) (0.00) (0.19) (0.00) (1.99)
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.
Project Financing by Component (in US$ million equivalent) Percentage of Appraisal Component Appraisal Estimate Actual/Latest Estimate Bank Govt. CoF. Bank Govt. CoF. Bank Govt. CoF. I. Coastal Environmental 1.15 0.30 1.18 0.61 102.6 203.3 Infrastructure II. Zetta Valley Water 0.60 0.45 0.63 0.40 105.0 88.9 Supply III. Technical Assistance 0.10 0.05 0.13 0.02 130.0 40.0 Total Baseline Cost 1.85 0.80 1.94 1.03 104.9 128.8 Physical contingencies 0.00 Price contingencies 0.15 0.0 Miscellaneous 0.06 Total Project Costs 2.00 0.80 2.00 1.03 100.0 128.8 Note: These figures are derived from Annex 3 of the PAD which, lists local and foreign costs, assuming that the Bank is financing all foreign costs and the Govt. is financing all local costs.
- 17 - Annex 3. Economic Costs and Benefits
During project appraisal, the economic internal rate of return was not calculated as it was argued that due to the urgent nature of the project (preparation took four months) economic analysis should focus on least cost analysis. While significant economic benefits are expected from the project – for example, environmental improvements, health improvements and elimination of barriers to tourism – most benefits are difficult to quantify, and even more difficult to demonstrate that they are accruing as a direct result of the project. In addition, as the landfill only began operation in July 2004, it is too early to predict its impact. Therefore, rigorous analysis is not possible; however, we can provide some anecdotal indicators of the expected economic costs and benefits.
Economic costs include the financial costs (capital investments and operational costs), and the broader impact on the economy. The net impact on land values near to the landfill is estimated to be neutral, as the negative impact of the landfill is offset by the positive impact of closing the wild sites. In addition, while waste will be more concentrated in one area – with all the potential hazards associated with waste, e.g., odor, noise, birds, aesthetic, etc. – the new landfill is designed to be more sanitary than the wild dumps it replaces and mitigates these hazards. The value of the land used for the landfill itself is relatively low (the land was valued at €10/m2 compared to industrial land in nearby areas that is typically double this amount) as there is little commercial activity in the area. Based on the social impact assessment, the project is assumed to have neutral (and possibly beneficial) impact on the Roma community who derived part of their livelihood from recycling waste in the wild dumps. Under MESTAP a recycling facility is to be built that will make this waste available to this community for recycling in a more regulated way.
Economic benefits are expected from improvements to the environment through the discontinued use of the wild dumps, and the sanitary disposal of waste in the new landfill. By solving the problem of solid waste and unsightly wild dumps the project is expected to improve tourist revenues. This is particularly significant as the Tourist Master Plan is estimating increase of two to five percent per year in tourist beds. The operation of the landfill itself will create positive net present values (if the grant is discounted), 15 full-time jobs and a number of part-time employment opportunities for the recyclers, and has provided an access road to the 19 properties neighboring the landfill. The improved water quality in Zeta Valley has provided benefits to the 10,000 people currently connected to the system and the additional 20,000 that will benefit once the distribution system is completed.
- 18 - 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 06/13/2001 2 TTL, Economist
Appraisal/Negotiation 07/16/2001 2 Engineer (2)
Supervision
04/27/2002 3 TTL. ENGINEER (1); S S ENGINEER (1); SOLD WASTE SPECIALIST (1) 08/03/2002 3 TEAM LEADER, ENGINEER S S (1); SOLID WASTE SPECIALIST (1); ENGINEER (1) 11/20/2002 5 TEAM LEADER (1); S S ENGINEER (1); CONSULTANT (3) 12/12/2003 1 ENGINEER (1) S S 05/21/2004 2 ENGINEER (1); S S ENVIRONMENTAL SPEC. (1) 07/28/2004 3 TEAM LEADER (1); S S ENGINEER (1); CONSULTANT (1)
ICR 10/08/2004 2 WATER & SANITATION SPECIALIST (2)
(b) Staff:
Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ ('000) Identification/Preparation Appraisal/Negotiation 15.5 61.0 Supervision 16.3 131.4 ICR Total
- 19 - 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
- 20 - 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
- 21 - Annex 7. List of Supporting Documents 1. Aide-Memoires, BTORs and PSRs (1 to 8) 2. DEG (2001) Touristic Master Plan for Montenegro 3. Operational Plan 4. Economic Commission for Europe (2003) Environmental Performance Review – Yugoslavia 5. Federal Republic of Yugoslavia (June 2001) Transitional Support Strategy. TSS Update (July 2002). TSS Update (February 2004) 6. GOPA (2003) Recommendations for the Location of Sanitary Landfill for the Region of Kotor, Budva, and Tivat with Regard to the Danger of Bird Strikes at Tivat Airport 7. GOPA (2004) Republic-level Waste Strategic Master Plan. EAR-Funded Study 8. Hydrometeorology Institute of the Republic of Montenegro (2003) Environmental Impact Assessment Study 9. Operational Manual 10. PEW. Environmental Management Plan 11. PriceWaterhouseCoopers d.o.o. (Belgrade) (June 2004) Auditor’s Report of Project 12. Procurement Capacity Assessment of PEW and PMF 13. Project Appraisal Document (November 27, 2001) 14. TARGET (2003) Social Assessment Study 15. Technical Agreement Between PEW and PMF for the Implementation of the Zeta Valley Water Supply Component 16. Trust Fund Grant Agreement (December 20, 2001) 17. Trust Fund Guarantee Agreement (December 20, 2001) 18. World Bank (2003) Montenegro Environmentally Sensitive Tourist Areas Project – PAD 19. World Bank (2003) Serbia and Montenegro: Country Environmental Analysis
- 22 - Additional Annex 8. Financial Rate of Return Calculation (for Lovanja d.o.o.)
All values are in Euro Annual operating revenue Years 1-3 Years 4-13 Average Tariff Total Tariff Total tonnage ton/day days Tones Euro/ton Euro/year Euro/ton Euro/year Summer 100 120 12,000 13 156,000 16 192,000 Winter 40 245 9,800 13 127,400 16 156,800 21,800 283,400 348,800 Annual operating cost Operating cost (salaries, fuel, electricity etc.) 140,000 140,000 Depreciation (compactor & dozer, Euro 350,000 over 8 year economic life) 54,000 54,000 Repayment of additional investment (500,000 Euro over 10 years) 50,000 194,000 244,000 Revenue stream for economic life of asset Capital costs Annual Annual Operating Revenue-cost Revenue - cost operating cost operating revenue - cost without grant revenue Year Grant (under Credit (under Total MEIP) MESTAP) 0 1,113,901 305,867 1,419,768 (305,867) (1,419,768) 1 194,000 283,400 89,400 89,400 89,400 2 194,000 283,400 89,400 89,400 89,400 3 500,000 500,000 194,000 283,400 89,400 (410,600) (410,600) 4 244,000 348,800 104,800 104,800 104,800 5 244,000 348,800 104,800 104,800 104,800 6 244,000 348,800 104,800 104,800 104,800 7 244,000 348,800 104,800 104,800 104,800 8 244,000 348,800 104,800 104,800 104,800 9 244,000 348,800 104,800 104,800 104,800 10 244,000 348,800 104,800 104,800 104,800 11 244,000 348,800 104,800 104,800 104,800 12 244,000 348,800 104,800 104,800 104,800 13 244,000 348,800 104,800 104,800 104,800
FRR = -5% 11% NPV = (EUR 990,265) EUR 22,373 Notes: 1. Part of the capital investment (€ 1,113,901) in the landfill was financed by a grant (under MEIP) and the remainder out of an IDA credit (€ 305,867). The additional investment in order to increase the capacity of the landfill for an additional 10 years (€ 500,000) is assumed to be financed out of an IDA credit to be repaid within 10 years. Dumping tariffs are increased from € 13 to € 16 in year 4 to include repayment of the upgrading loan. 2. Annual operating revenue and expenses, and volume serviced are extrapolated from data from the first four months of operation, as provided by Lovanja d.o.o. 3. It is assumed that the landfill equipment (bulldozer, compactor) has an economic life of eight years. 4. NPV calculations assume the cost of capital as 10%. 5. The rate of return of the investment, if we include the original grant, is negative. This is acceptable, as the grant is not being repaid. Similar investments have produced low rates of return (around 2 percent).
- 23 - Additional Annex 9. Grant Recipient's Completion Report
The following is the Grant Recipient’s own evaluation report, received from PEW on November 15, 2004.
2. Principal Performance Ratings
Outcome: S Sustainability: HL Institutional Development Impact: SU Bank Performance: S Borrower Performance: S
3. Assessment of Development Objective and Design
3.1 Original Objectives:
The Montenegro Environmental Infrastructure Project was designed to improve the environmental conditions in the coastal area of the Republic of Montenegro and to improve the quality of water supply in the Zeta Valley, the region near Podgorica, the capital of Montenegro (at the time of Project preparation and approval, the Republic of Montenegro was part of the Federal Republic of Yugoslavia, and presently with Serbia it forms a State Union of Serbia and Montenegro).
The improvement of environmental conditions in the coastal area was focused on three municipalities (Kotor, Budva and Tivat) forming a region receiving the highest proportion of tourists during the year, in respect to the whole republic. The contradiction is that, in fact, this region has a severe lack of infrastructure services, such as lack of potable water during the summer season, insufficient collection and low treatment of wastewater and inadequate services of solid waste collection and especially nonexistence of proper solid waste disposal facilities. Since the Government of Montenegro, at the time, had already made the efforts to improve the situation in the water supply and wastewater sector, the objective of the Project to invest in the solid waste sector was very reasonable and absolutely indispensable. The plan was to rehabilitate the abandoned landfill into a modern sanitary landfill, to invest in sealing of present uncontrolled dumpsites in these three Municipalities, and to finance the procurement of new equipment for the communal companies responsible for solid waste collection.
The second part of the Project was aimed at improving the water supply of the Zeta Valley. The pollution of principal water supply sources in Zeta Valley, caused by industrial discharges, demanded urgent completion of the construction of a water supply pipeline, which would connect the Podgorica water supply system with rural areas in the Zeta Valley.
The objectives (improve environmental conditions on the coast, and water quality in Zeta Valley) have been satisfactorily met; however some of the outputs (closing of wild sites, equipment) were not fully achieved. During project implementation the outputs that were further developed are related to component I, part of the Project financing the improvement of environmental conditions in the coastal area. Originally, this part of the Project was designed to finance several outputs in order to make an overall improvement in the sector:
· The rehabilitation of the multi-municipal landfill in Kotor (in the location of Tresnjicki Mlini) to meet the sanitary standards, including the procurement of equipment for normal operation of
- 24 - the landfill · Permanent sealing of uncontrolled dumpsites in the Municipalities of Kotor, Tivat and Budva · Procurement of solid waste collection equipment – containers and trucks, to be used by the local communal companies in three municipalities.
Although the investments financed by both the Bank and the Government of Montenegro were significant, it was not possible to cover all the investments, which those objectives required. One of the reasons for the insufficient funds was the depreciation of the currency of the Project, which was the US dollar in respect to the currency in use in the Republic of Montenegro, the Euro. On the date of effectiveness of the Project (March 19, 2002) the value of US$1 was € 1.1366, while on July 14, 2004 (the date of one of the latest disbursements from the Special Account) the ratio was US$1 = € 0.8066. Even though this difference developed during the time of project implementation, and the funds were disbursed on a favorable exchange rate than at the end of the Project, certain loss was borne. According to calculations made at the end of the Project, this sum exceeds € 560,000. Besides, as noted before, the objectives were too general and that is why they were divided as follows: · Construction of the sanitary landfill location in Lovanja (near the former dumpsite) in the municipality of Kotor to serve the municipalities of Kotor, Tivat and Budva, including the procurement of equipment for normal operation of the landfill · Permanent sealing of uncontrolled dumpsite in the municipality of Kotor.
Although the physical works on construction of the sanitary landfill in Lovanja were completed in total, financially only 78 percent was disbursed from the MEIP and the remaining 22 percent was paid from a new Project financed by the Bank as well, called the Montenegro Environmentally Sensitive Tourists Areas Project (MESTAP). Sealing of the dumpsites in the municipalities of Tivat and Budva and procurement of the trucks and containers were excluded from MEIP, but, as necessary, they were also included as part of MESTAP.
3.2 Original Components
There were three components originally designed.
Component I: Coastal Environmental Infrastructure
This component consisted of two sub-components: (i) Landfill rehabilitation; and (ii) Procurement of solid waste equipment.
The component, with value of US$1.25 million financed from the Grant and additional US$0.30 million financed by the Government to cover the taxes and other duties, was designed for the overall improvement of the solid waste sector in three municipalities. At the time of Project preparation, the location of Tresnjicki Mlini was selected for the sanitary landfill, since it was the area originally designated for a landfill by the urban plan of the municipality of Kotor. This location has been used as a landfill until 1992, but since it did not operate properly, it was closed. In other two municipalities, a location for landfill was not defined by their urban plans, at all. From 1992, waste was disposed on three municipal dumpsites whose closing was also proposed in scope of this component. Level of services provided by communal companies was low, so the procurement of new solid waste equipment was also included in this component.
- 25 - Component II: Water Main Construction in the Zeta Valley
The value of this component was US$0.65 million financed from the Grant, and US$0.45 million financed by the Government and local Podgorica Municipal Fund (PMF). On the base of already existing design for the Zeta Valley transmission main (length of 7.5 km, from which 1 km was constructed), this component was designed to finance the procurement of material (part financed by the Bank and partially by the Government – taxes and other duties) and works (part financed by the PMF and partially by the Government) needed for completion of the pipeline. The assets of the existing Zeta Valley distribution network were to be transferred from Podgorica Aluminum Plant to Podgorica Water Utility for operation and maintenance.
Component III: Technical Assistance
This component was designed to support the Project implementation in sense of engineering services and auditing, including the financing of environmental impact assessment study for the location of the future landfill, social assessment study and institutional study (preparation of legal framework for the future company managing and operating the landfill). This part of the Project was related to component I of the project due to its complexity, since the procurement of goods under component II was done by simple procurement procedures, while the works under the same component were within the scope of liabilities of PMF and their own procurement procedures.
Although the PAD was never officially revised, the components were adjusted during Project implementation. In principle, this refers to the reduction of sub-projects to be financed under component I, and partially to component III which was slightly expanded. The largest intervention in the structure of component I was the relocation of the future sanitary landfill from proposed site in Tresnjicki Mlini to the new location Lovanja near the existing dumpsite in the municipality of Kotor. Although the project, geological studies and environmental impact assessment study which were prepared for the old landfill in Tresnjicki Mlini had adequate technical quality, the selection of this location caused a strong NIMBY syndrome, mainly due to inadequate operation of the landfill in the past. These protests were institutionalized through the formation of NGO Ecological Society of Grbalj with whom both representatives of the Bank and PEW had several meetings. The municipal Assembly of Kotor has, by its Decision No. 01/4685 from December 7, 2001, amended the physical plan for the municipality and eliminated the proposed landfill in Tresnjicki Mlini, while it did not propose a new location. This Decision prevented the rehabilitation of the landfill as initially proposed. However, the Ministry of Environmental Protection and Urban Planning had challenged the validity of this decision on the Constitutional Court, and the claim was adopted, but the municipal Assembly did not change its decision. In parallel with these developments, residents from the areas close to the municipal dumpsites in Budva and Tivat have blocked the entrances to these dumps forbidding the waste disposal on these locations and the waste accumulated in the streets, creating an important aesthetic and health hazard, especially since it happened during the tourist season. In order to resolve this situation, it was decided to propose the new location – Lovanja, for the sanitary landfill and to make all the necessary studies (financed under component III) for this site. A cross-analysis was made by independent expert engaged by the Bank, comparing the two locations and with conclusion that rehabilitation of the current Lovanja disposal site and construction of a temporary landfill, at a site located 1.2 km from the coastal highway, on land owned by the municipality of Kotor in the industrial area, is feasible regarding volume and location. Based on this study, mayors of all three municipalities (Kotor, Budva and Tivat) signed an agreement that they will solve solid waste disposal issue on regional level. In principle, landfill is of a temporary status due to the fact that according to the law of the Republic of Montenegro, a specific landfill must be registered in the urban plan as such. Since such a
- 26 - location did not exist in the area of three municipalities, and the landfill had to be built as the situation in the sector escalated, landfill was treated as a temporary industrial facility, which could have a permit of operation valid for three years. During the three-year-period, a study will be made to assess all the possible permanent locations for the landfill. If Lovanja landfill is assessed positively, then the amendments to the municipal urban plan have to be made, and accordingly the sanitary landfill would not be dislocated. On the contrary, the new location will be proposed, and all the equipment from Lovanja landfill will be transferred to operate on this site.
The capacity of the sanitary landfill Lovanja was designed for the period of three years, but with some additional works, this capacity can be increased so that the landfill at this location could be a permanent solution. The funds for additional works on Lovanja, or the works on construction of the permanent regional sanitary landfill on new location, are already allocated under MESTAP.
Component III of the Project has undergone an adjustment, too. Since, at the time, a new project (MESTAP) was already in preparation, which foresaw the rehabilitation of the solid waste sector in the whole coastal area, the decision was made to assess not only the location Lovanja for the municipalities of Kotor, Budva and Tivat, but also the location Goran, which was the proposed landfill for the municipalities of Bar and Ulcinj. The assessment of the location Goran was also a necessary precondition for the approval of MESTAP itself.
4. Achievement of Objectives and Outputs
4.1 Outcome / Achievement of objectives
The construction of the sanitary landfill in Lovanja had a very positive impact on environmental conditions in the municipalities of Kotor, Budva and Tivat. All three uncontrolled municipal dumpsites are closed for the waste disposal, and nearly all collected waste is disposed properly on the landfill. It is estimated that, at the moment, the communal companies collect 90 percent of produced municipal waste. The remaining 10 percent is mainly produced in areas that are not receiving the services from communal companies, but these are rural areas with considerable distances from town centers, and the composition of solid waste is mostly based on organic waste. From the total quantity of waste collected by the communal companies, the company operating the sanitary landfill accepts approximately 90 percent according to their management plan (the rest is demolishing material, lead acid batteries, industrial process waste etc.). This means that approximately 81 percent of total municipal waste quantities is disposed on landfill Lovanja.
The achieved results regarding the sealing of dumpsites can be assessed as satisfying. The immediate threat of fires, bad smells, and possible diseases spread by the birds and rodents were prevented. In the first case, in Kotor, it was done by sealing with inert material, in the second case, in Budva, natural processes partly recovered the former dumpsite.
The second objective of the Project, the water supply of Zeta Valley population with water complying with WHO standards, was achieved. The 6.5 km pipeline was actually constructed, and today the population of 10,000 receives the water not from the contaminated wells owned by Podgorica Aluminum Plant, but from the municipal water utility, and their own sources, regularly monitored. When second phase of the pipeline is finished, it will supply the population of 30,000.
4.2 Outputs by components
According to component I of the Project, the sanitary landfill was constructed on the location Lovanja
- 27 - completely according to the corresponding European Directive No. 31/1999. All the modern standards set forth by the Directive were followed. The ground protection was achieved through lining of the high-density polyethylene membrane laid on the clay bottom. The landfill body is equipped with gas collection system and also with a drainage system for leachate. Leachate is collected and treated in a special treatment plant. Waste is daily covered with inert material to prevent bad smells and bird hazard. Vehicles carrying the waste are measured twice: when entering the landfill and when leaving, in order to calculate the amount of waste disposed. The local communal companies are charged 13 € per ton of disposed waste; this amount covers the complete costs of operation of the landfill. The landfill was officially opened on July 8, 2004 and since July 12, 2004 it receives waste from all three municipalities. The impact on the environment is lowered to the minimal level. The monitoring of environmental conditions of the area near the landfill, and on the landfill itself, set forth by the mentioned EU Directive, and which is going to be conducted during the period of operation of the landfill, will show more accurate data.
Regarding the sealing of the uncontrolled dumpsite in the municipality of Kotor, it can be said that the first phase of the foreseen works has been completed. These works include leveling and compacting of the upper level of the dumpsite and covering with the cca 0.5 m layer of inert material. The second phase of the works (treatment of gas and leachate) will be financed under MESTAP. In Budva, the waste was dumped downhill from natural slope, on location that is hardly accessible by people. From the moment of closure of this site, the natural recovery of this area occurred through vegetation.
Regarding component II of the Project, its achievements were already assessed as very satisfactory. The constructed pipeline is in function and 10,000 inhabitants of Zeta Valley are supplied with water complying with WHO standards. The pipeline was put in function on December 19, 2003. Presently, the consumers are not charged for the water, according to the agreement between the municipal authorities and local community. The Podgorica water Utility is charging the municipality for the invoiced quantities of water. This benefit will be in force until the completion of the second phase of the Zeta Valley water supply system.
Component III financed the preparation of the three studies: environmental impact assessment study, social assessment study and institutional study for both locations in the coastal area designated for construction of the regional landfills. The first two studies assessed the locations of Lovanja and Goran, and the possible impact on local population, while the third study, in fact, was the preparation of legislative acts for registration and operation of multi-municipal joint companies for management of the regional sanitary landfill, one for Kotor, Budva and Tivat, and one for Bar and Ulcinj.
4.3 Institutional Development Impact
The implementation and sustainability of the Project depended on institutional arrangements, which had to be made between the municipalities, and financial arrangements between the Bank and the Government.
Regarding the financial implementation of the Project, the major issue was the exemption from custom duties and VAT. The Government proclaimed that the Projects financed by international donors and/or the Government, were exempt from customs duties. Regarding the exemption from the VAT, this tax was not applied in Montenegro at the beginning of the Project. As it was introduced during the Project implementation, the Government through the Ministry of Finance issued the exemption from VAT for the whole Project. These two exemptions represented the contribution of the Government to the Project and through PEW, as the government owned enterprise, the Government was meant to have a certain amount of shares in both regional multi-municipal companies for Kotor, Budva and Tivat and for Bar and Ulcinj.
- 28 - The important part of the Project implementation was the institutional arrangement between the municipalities and PEW needed for the proper management of the landfill. The first step, in that sense, was the Decision signed by the mayors of Kotor, Budva and Tivat about the joint solution to solid waste problem in the region. Afterwards, the municipal parliaments had to pass the Decision about the formation of multi-municipal joint company “Lovanja” Ltd. that would operate the landfill. Members of parliaments of Kotor and Budva passed this Decision, but the municipality of Tivat did not express any opinion. This was the reason why the shares of “Lovanja” Ltd. were divided between the municipalities of Kotor and Budva and PEW (46.36 percent for Kotor, 28.69 percent for Budva and 24.95 percent for PEW). The division was made taking in consideration the number of inhabitants and tourists, and additionally the municipality of Kotor received the shares on account of the value of the land for the landfill. The part of shares for PEW represents the contribution of the Government to the Project.
The management of the “Lovanja” Ltd. has signed the contracts with the local communal companies of Kotor and Budva for solid waste disposal for the price of 13 € per ton. The contract under same conditions was signed with the local communal company of the municipality of Tivat, although this municipality does not have any shares in the company. On this way, all three municipalities and their citizens have become the beneficiaries of the Project.
Regarding the other institutional impacts of the Project, the Government of Montenegro, influenced by the MEIP, and through the financial support of the European Agency for Reconstruction (EAR) implemented the Master Plan for solid waste for the whole republic. Master Plan is based on construction of eight regional sanitary landfills, from which two are foreseen for the coastal region, as designed by MEIP and MESTAP. Additionally and also influenced by MEIP, the Government has made the Decision on closure of all uncontrolled dumpsites, in order to encourage and impose the local authorities to begin solving the problem of solid waste disposal in accordance with European standards.
Regarding the assets and water supply services being part of component II, they were transferred from local communal company of Zeta Valley to the Podgorica Water Utility, and in such a manner water supply improved significantly.
5. Major Factors Affecting Implementation and Outcome
5.1 Factors outside the control of government or implementing agency
Since the public presentation of the Project, especially the part regarding the construction of the sanitary landfill, PEW experienced numerous complaints from different structures, political, religious and civil. This refers mainly to the location of the sanitary landfill (NIMBY syndrome), which, according to the original design, was Tresnjicki Mlini, and afterwards Lovanja, near the Kotor’s uncontrolled dumpsite. Negative effect was also caused by the bad experience regarding inappropriate management and disregard of the prescribed technology of operation of the former landfill in Tresnjicki Mlini. After dislocation of the landfill to Lovanja, even the physical protests begun, and the works on construction of the landfill were interrupted for six 6 months. The formal reason for the protests was the claim of the inhabitants of area surrounding the landfill and Roman Catholic Church that the land on which the landfill was to be constructed is, in fact, their property. Even before the location Lovanja was selected for the landfill, PEW has obtained the evidences from the Real Estate Agency that the land is the property of the municipality of Kotor. This was the subject of the long court cases, between local population and church on one side and municipality of Kotor and PEW on the other side. Finally in February 2004, the court passed the decision in favor of PEW and the municipality of Kotor. The protests were ended and the contractor, which had been for six months disabled to proceed with the works, continued the activities on construction of the
- 29 - landfill. By the date when this report was created, all court cases have been passed in favor of PEW and municipality of Kotor and only one case is still in legal process.
5.2 Factors generally subject to government control
The major problem regarding the implementation of components I and III arises from the fact that the present law in both the Republic of Montenegro and in State Union of Serbia and Montenegro regarding waste disposal, is very old (1983) and it does not recognize the term sanitary landfill, but only the term dumpsite. Therefore, through the realization of the project, PEW had to implement the corresponding European Directive about “landfilling” (EU Directive 31/1999). This created a lot of problems during the process of providing the licenses for the project. The other problem was the fact that neither of three municipalities had in their Urban Plan the location for the landfill on the signing date of the project. Therefore, during project implementation the new location had to be selected.
5.3. Factors generally subject to implementing agency control
Considering the fact that this is the first sanitary landfill in Montenegro, the existing personnel of PEW was not thoroughly prepared to realize all the obligations set forth by the Grant Agreement. Consequently, during implementation of this Project, the personnel obtained necessary skills and significantly enforced its capacities. Throughout the Project implementation, PEW staff attended several training programs that referred to the solid waste management, which resulted in them gaining the necessary experience for further implementation of the activities in this sector.
6. Sustainability
The formation of “Lovanja” Ltd. created an institutional framework for operation of sanitary landfill. The fact that the Grant financed the construction of the landfill, made the price of landfilling affordable (13 €/t). The breakdown of this tariff shows that average monthly cost of waste disposal is 0.33 € per capita. This makes the project sustainable and in the same time affordable to customers.
7. Bank and Borrower performance
7.1. Bank’s performance
The overall Bank performance can be assessed as satisfactory, both in lending and in supervision of the project. The number of Bank supervision missions was sufficient. Bank staff and experts hired by the Bank took part in all major meetings with all interested parties (government, municipalities, NGOs, etc.) and gave key contribution to resolving all capital issues. Also through the whole project, the Bank staff had intensive communication via e-mail, faxes, etc. with PEW and other interested parties through which they shared their views and experiences obtained during implementation of other projects regarding the certain issues. During procurement procedures, the Bank experts responded regularly with detailed and extensive comments regarding the submitted tender documentation.
7.2. Borrower’s performance
Under the circumstances that for both the Government and PEW this was the first project with the World Bank in almost ten years, and due to the fact that part of the project was not covered by national legislation, performance of the borrower can be described as satisfactory. PEW sufficiently improved during the project implementation and it was able to implement it although from the very beginning the
- 30 - project was rated as high risk. On the other hand the Government of Montenegro and particularly Ministry of Environmental Protection and Urban Planning took major part in solving critical issues as they occurred, especially at the end of the project.
8. Lessons Learned
Only with involvement of both central and local authorities and their commitment to regional approach in capital investments, these kinds of projects can be satisfactorily implemented. Capital investments have as a result the benefit for the whole local population and therefore, should not be treated as a political issue. This project was implemented in a very complicated political situation and its success is a great achievement regarding this aspect.
For implementation of all high-risk projects from environmental point of view, the domestic institutional and legislative framework has to be adopted. This also includes a wide public information and public awareness campaign, so that each citizen of the beneficiary country realizes all the benefits and all the risks of the certain project. This campaign has to be realized prior to or at the beginning of implementation of the project.
- 31 - Additional Annex 10. ICR Mission Aide-Memoire
1. A World Bank mission comprising Messrs Andreas Rohde, Michael Webster and Xavier Chauvot de Beauchene visited Montenegro from October 8 to 13, 2004 to conduct the Implementation Completion Mission of the Montenegro Environmental Infrastructure Project (MEIP). The mission acknowledges the support and collaboration extended by all the authorities and local representatives. A list of authorities met is attached to this Aide-Memoire in Annex 1.
2. The mission reviewed all relevant documentation, met with representatives from all relevant stakeholder groups, and conducted all necessary site visits in order to undertake the analysis of the project necessary to draft the Implementation Completion Report (ICR). The assessment of component I (Coastal Environmental Infrastructure) will rely on data collection and interviews conducted in Budva and Kotor, and the assessment of component II (Zeta Valley Water Supply) will rely on reports collected and interviews conducted in Podgorica.
3. The mission interviewed key agencies in central government, local government, implementation agencies, local communities and relevant donors to solicit a broad range of views on the project. The mission met with the representatives of PEW, the implementing agency, to review in detail all relevant project documentation. Site visits were conducted to the regional landfill site in Lovanja, and the wild dumpsites in Kotor and Budva.
4. The mission agreed with representatives from PEW that PEW would forward a copy of its own final evaluation report, to be included in the draft ICR, by November 15, 2004 (this was received on November 15). A possible format for this report was discussed. The draft ICR will then be sent by the Bank’s Country Unit to PEW and the Ministry of Urban Planning and Environmental Protection for formal comment by January 15, 2004. The ICR will be available for public distribution after March 31, 2004.
List of Authorities Met
Ministry of the Urban Planning and Environmental Protection Mr. Sinisa Stankovi·, Deputy Minister
Crnogorsko Primorje (PEW) Mr. Predrag Bjelobrkovi·, Director Mr. Punisa Pavicevi·, Technical Director
Agency for Development and Construction in Podgorica (former Podgorica Municipal Fund, PMF) Mr. Vlado Uugoša, Head of Technical Department Ms. Olga Žarkovi·, Finances
Javno Preduzede Vodovod i Kanalizacija (PViK) (Podgorica Water Supply Company) Mr. Nikola Simovi·, Civil Engineer Mr. Rajko Vujoševi·, Civil Engineer
European Agency for Reconstruction (EAR) Mr. Neil Bolland, Operations
- 32 - Municipality of Kotor Mr. Nikola Samardži·, Mayor
Lovanja d.o.o. Petar Živkovi·, Executive Director Mr. Davor Biskupovic, Accountant, Kodex (bookkeepers for Lovanja d.o.o.)
Representatives of the Kava· Local Community Mr. Vojislav Vu·eti·, President of Council of Kava· Community
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