African Development Fund

FINAL REPORT

OPERATIONS EVALUATION DEPARTMENT

ADF/OPEV/2007/04 APRIL, 2007 Original : ENGLISH Distribution : LIMITED

KENYA

EL NINO INFRASTRUCTURE REHABILITATION PROJECT

PROJECT PERFORMANCE EVALUATION REPORT

i

TABLE OF CONTENTS

Page N°

CURRENCY EQUIVALENTS iii ACRONYMS AND ABBREVIATIONS iv PREFACE v BASIC PROJECT DATA vi SUMMARY OF RATINGS viii EVALUATION SUMMARY ix 1. PROJECT BACKGROUND 1

1.1. Country Economic Context 1 1.2. Project Formulation 2 1.3. Objectives and Scope at Appraisal (Logical Framework) 3 1.4. Financing Arrangements –Bank and Others 3

2. THE EVALAUATION 4 2.1. Evaluation Methodology and Approach 4 2.2. Key Performance Indicators 5

3. IMPLEMENTATION PERFORMANCE 5 3.1. Loan Effectiveness, Start Up and Implementation 5 3.2. Adherence to Project Costs, Disbursements and Financial Arrangements 7 3.3. Project Management, Reporting, Monitoring and Evaluation Achievements 8

4. PERFORMANCE EVALUATION AND RATINGS 9 4.1. Relevance of Goals and Objectives and Quality at Entry Assessment 9 4.2. Achievements of Objectives and Outputs: Efficacy 10 4.3. Efficiency 11 4.4. Institutional Development Impact 11 4.5. Sustainability 12 4.6. Aggregate Performance Rating 14 4.7. Borrower Performance 14 4.8. Bank Group Performance 15 4.9. Major Factors affecting Implementation Performance and Outcomes 16

LESSONS AND RECOMMENDATIONS AND FOLLOW-UP ACTION 18 5.1. Lessons 18 5.2. Recommendations and Follow-up Action 20

ii

Annexes N°. of Pages 1. Project MPDE Matrix 2 2. Institutional Arrangements (for Follow-up) at time of PPER - Roads 1 3. Institutional Arrangements (for Follow-up) at time of PPER - Water 1 4. Evaluation Criteria 3 5. Borrower Performance 1 6. Bank Performance 2 7. Factors Affecting Implementation Performance and Outcome 2 8. Documents Reviewed / Consulted 1

This report was prepared by Mr. A. COKER, Principal Evaluation Officer, Operations Evaluation Department, (OPEV). It benefited from the leadership of Mr. M. H. MANAÏ, Chief Evaluation Officer, OPEV, on the mission to Kenya and his subsequent inputs. Any further matters relating to the report may be referred to Mr. D. A. BARNETT, Acting Director, OPEV, on extension 2041 or to Mr. COKER, on extension 3425.

iii

CURRENCY EQUIVALENTS

KES = Kenyan Shillings (National Currency Unit) UA = Unit of Account Appraisal

(May 1998) PCR (August 2004)

PPER (March 2006)

1UA = US$ 1.33536 1.32248 1.44 1UA = KES 80.405 101.086 104.043 Fiscal Year - 1 July to 30 June

iv

ACRONYMS AND ABBREVIATIONS ADB : African Development Bank ADF : African Development Fund AFD : French Development Agency DDC : District Disaster Committee DRC : Disaster Relief Committee EIRP : El Nino Infrastructure Rehabilitation Project ENEP : El Nino Emergency Project ERS : Economic Recovery Strategy GOK : Government of Kenya ICR : Implementation Completion Report IDA : International Development Association KRB : Kenya Roads Board OP : Office of the President PCR : Project Completion Report PMU : Project Management Unit PPER : Project Performance Evaluation Report PSC : Project Steering Committee RMFLF : Roads Maintenance Fuel Levy Fund TOR : Terms of Reference WB : World Bank WSB : Water Services Boards WSP : Water Services Providers

v

PREFACE 1. This paper presents a Project Performance Evaluation Report (PPER) of the El Nino

Infrastructure Rehabilitation Project (EIRP) in Kenya. The project was conceived as a result of a request for funding from the Government of Kenya after abnormally high rains between 1997 and 1998 that caused major floods which affected 46 of the 61 districts in the country. The project was targeted at the rehabilitation of water and roads infrastructure in the affected areas of Western, Nyanza and Eastern provinces. The project resulted in the restoration and increased capacity of the water supply schemes in 33 Towns and the restoration of access to towns and villages through the rehabilitation of 464.7 km of roads.

2. The project which cost UA 14.3 million at appraisal was co-financed by the African

Development Fund (ADF) (UA 11.52 million), the International Development Association (IDA) (UA 1.35 million) and the Government of Kenya (GOK) (UA 1.43 million). On completion the actual cost of the project was 70% (UA 10.01 million) of the appraisal estimate due to among other things local currency depreciations and overestimation. The loan came into force in May 1999 and implementation activities started in August 1999 and were ‘formally’ completed in December 2001. The Borrower PCR was published a year later in December 2002 whilst the Bank’s PCR mission was undertaken in September 2002 and the report published in August 2004.

3. The PPER comes about five years after the formal completion of the project and about

two years after the PCR. It assesses the performances of the project, the Bank and Borrower from implementation to completion. It also draws lessons and recommendations that might be useful for the Bank’s interventions in emergency infrastructure rehabilitation and disaster recovery activities.

4. Since completion the circumstances surrounding the project with regards to national

emergency response, policy and regulation for water, sanitation and roads infrastructure has been undergoing marked changes. The PPER was carried out against these changing circumstances and duly reflected in the findings of the report and subsequent lessons and recommendations in Chapter 5.

5 The PPER is based on the findings of the Bank Group Mission which visited Kenya in

2006. The mission worked with officials of the Ministries of Finance; Roads and Public Works; Water; Local Government, The Kenya Roads Board, Kenya Water Regulatory Board, and former experts of the PMU. The mission also consulted with the IDA co-financiers as well as with relevant multilateral and bilateral partners. Selective visits were made to sub-projects for water and sanitation and roads in the Western and Nyanza provinces.

vi

BASIC PROJECT DATA A. General Information Country : Republic of Kenya Project : El Nino Infrastructure Rehabilitation Loan Number : F/KEN/INF-REH/99/26 or 2100150006942 Borrower : The Government of Kenya (GOK) Beneficiary : The Government of Kenya (GOK) Executing Agency : Project Management Unit (PMU)

El-Nino Emergency Project Office of the President P. O. Box 40213 Nairobi - Kenya

B. Basic Loan Data (ADF) (UA Million) Loan Item Estimate at Appraisal Actual at Completion Loan Amount 11.520 7.093 Interest Rate Service Charge 0.75% 0.75% Grace Period 10 years 10 years Repayment Period 40 years 40 years C. Financing Arrangements (UA Million) Financing Source Appraisal

Estimate % Actual at

Completion %

ADF 11.52 80.6 7.09 70.8 IDA 1.35 9.4 1.05 10.5 GOK 1.43 10.0 1.87 18.7 Total 14.30 100.0 10.01 100.0 D. Project Time Table Key Milestones Appraisal Estimate Actual at Completion Appraisal May 1998 May 1998 Loan Negotiation N/A August 1998 Loan Approval September 1998 November 1998 Loan Signature October 1998 January 1999 Entry into Force November 1998 September 1999 Commencement of Implementation

February 1999 August 1999

Project Completion February 2000 December 2001 PCR N/A August 2004 PPER Mission N/A February/March 2006

vii

E. Project Performance Indicators (ADF Components) Cost Under-run UA 4.29 Million (30%) Time Overrun 22 Months -Slippage on Effectiveness 10 Months -Slippage on Completion Date 22 Months -Slippage on Last Disbursement 21 Months -Number of Extensions of Last

Disbursement Deadline 3

Institutional Performance Satisfactory Contractor’s Performance Satisfactory Consultant Performance Satisfactory FIRR Not estimated at Appraisal and PCR EIRR Not estimated at Appraisal and PCR F. Bank Missions Type of Mission Date Composition and Skills Man Days Preparation/Appraisal May 1998 2 Persons: Water & Sanitation Engineer &

Transport Engineer 30

Supervision April 1999 3 Persons: Water & Sanitation Engineer; Financial Analyst & Environmentalist

6

Supervision November 1999 2 Persons: Water & Sanitation Engineer & Financial Analyst

6

Supervision May 2000 1 Person: Water & Sanitation Engineer 9 Supervision November 2000 3 Persons: Water & Sanitation Engineer;

Financial Analyst & Transport Engineer 30

Supervision April 2001 2 Persons: Water & Sanitation Engineer & Financial Analyst

10

Supervision December 2001 3 Persons: Water & Sanitation Engineer; Transport Engineer & Financial Analyst

36

PCR September 2002 3 Persons: Water & Sanitation Engineer; Transport Engineer & Financial Analyst

30

TOTAL 157 G. Disbursements Appraisal Estimate Actual at Completion Effective Date of First Disbursement February 1999 September 1999 Effective Date of Last Disbursement March 2001 December 2002 Total Disbursed (UA) 7,092,509.90 Undisbursed Balance (UA) 4,427,490.10 Level of Disbursement (%) 61.57

viii

SUMMARY of RATINGS

Evaluation Criteria PCR PCRR PPER Relevance and Quality at Entry Satisfactory Satisfactory Satisfactory

Achievements of objectives “Efficacy” Satisfactory Satisfactory Satisfactory

Efficiency N/A N/A Satisfactory Institutional Development Impact Satisfactory N/A Satisfactory

Sustainability Satisfactory Satisfactory Unsatisfactory

Aggregate Performance Indicator Satisfactory satisfactory Satisfactory

Borrower Performance Satisfactory Satisfactory Satisfactory

Bank Performance satisfactory Satisfactory Satisfactory Note*: PCR ratings were inferred from the PCR report. The criteria for PCR ratings were not the same as the PPER

ix

EVALUATION SUMMARY

Socio-economic and Project Background 1. Kenya’s economic growth rate which has seen a steady rise since 2003, continues to face a host of challenges, typical among which is the acceleration of broad based growth to help reduce poverty and improve the delivery of public services, while securing fiscal discipline and restoring price stability. The resolution of these challenges is embedded in the Governments Economic Recovery Strategy. It aims to promote strong economic growth and increased employment, by providing greater opportunities for productive employment through the rebuilding of sound governance structures, addressing the country’s major macro-economic vulnerabilities, large domestic debt and distressed financial system, and reforming the labour market and the trade system to foster a more competitive private sector. 2. Starting from around the month of October 1997, the “El Nino” phenomenon brought about abnormally high rainfall and extensive flooding during the months of October and November, and continued through January to June 1998. The attendant devastating floods caused extensive damage to vital social infrastructures and other areas such as on agricultural produce and livestock, water, sanitation, roads infrastructure and housing in 46 of the 61 districts in Kenya. 3. The Government of Kenya (GOK) approached the Bank Group and a number of bi-lateral and multi-lateral donors for emergency assistance to restore infrastructure to their pre “El Nino” levels. As a result of this request, the Bank Group together with the IDA as co-financiers came together to finance the EIRP. 4. The EIRP was appraised as a stand-alone entity but was implemented using the same implementation arrangements as the IDA financed El Nino Emergency Project (ENEP)1, but provided additional staff to the Project Management Unit (PMU). It also used IDA financed consultants for the designs, supervision and audits of the Bank Group financed components. 5. The initial total cost of the EIRP was UA 14.30 million. It was co-financed with the IDA and GOK each contributing UA 1.05 million (10.5%) and UA 1.87 million (18.7%) respectively. ADF financed the remaining UA 7.09 million or 70.8%. The Bank’s contribution at appraisal was estimated at UA 11.52 million or 80.6% of the total with the IDA and GOK each contributing 9 and 10% respectively. It was confirmed that the subsequent decrease in the ADF financing (from 80.6% at appraisal to 70.8%) is attributable mainly to changes in the scope of the works to be completed and the depreciation in the value of the Kenyan Shilling against the UA and the transfer of UA 0.29 million from the ADF portion to the GOK as a result of rejected variation orders. 6. The overall objective of the EIRP was to restore vital socio-economic infrastructure in order to counteract the effects of the “El Nino” on the adversely affected population groups in Kenya. The project had four physical and one institutional component. The physical components were i) provision of chemicals, ii) the replacement of components in the national water resources 1 ENEP is a product of the IDA’s El Nino Emergency credit for Kenya which was worth US$ 77.5 Million (≈UA 55 Million). It was set up within the Office of the President and was conceived as a rescue mission to rehabilitate the social economic sectors of water supply, health facilities and roads in the affected districts. The project aimed to: (i) minimize life threatening condition in impacted districts by restoring potable water supply and health facilities; (ii) facilitate improved economic activity through the restoration of key routes badly damaged during the El Nino storms; and (iii) demonstrate streamlined procurement and other managerial techniques which could be more broadly applied within the Government administration.

x

monitoring network, iii) replacement and repair of components and machinery on the water supply system, and iv) the repair of 74 different category of roads. The fifth component was for consultancy services for the final designs, supervision of works, and technical, financial and management audits.

The Evaluation 7. The post evaluation was carried out through primary and secondary data collection and assessments in Kenya as well as desk reviews and assessments at the Bank. Subsequent analysis and reporting as contained in this report is based on the “Revised Guidelines for Project Performance Evaluation Report (PPER) incorporating evaluative assessments of relevance, efficacy, efficiency, institutional development impact and sustainability 8. The PMU was no longer in operation at the time of the evaluation. Thus, in Kenya the mission team paid visits, conducted interviews and collected data from the relevant ministries and departments. As the EIRP and overarching ENEP involved co-financiers and other donors, data collection and interviews were also carried out at the World Bank, French Development Agency (AFD), the European Union, KFW/ GTZ. There were also interviews and discussions with the former project managers of the EIRP and ENEP. Visits were also carried out to project sites in the 33 affected Towns and 13 Districts to collect data and have discussions with project beneficiaries and staff.

Performance Evaluation and Ratings 9. Relevance is assessed as being satisfactory as the EIRP was compliant and consistent with most of the Bank’s policy and guidelines. In general, the EIRP is deemed to have met the objectives of restoring vital socio-economic infrastructure and services as was also concluded by the Bank PCR. However, the achievement of high rates of compliance was incompatible in some instances with the emergency situation of the project. It would seem that the Bank’s normal lending instruments are not wholly suitable for rapid response to the needs of a project in an emergency situation. 10. A satisfactory rating is appropriate for efficacy in consideration of the fact that actual stated outputs at appraisal (and final agreed works for roads) for the rehabilitation of the network for 74 roads in 8 districts and the restoration of water supply facilities in 33 towns in 13 districts were carried out. The quality of work done for some of those that were examined was good. The remainder may have current defects and problems associated with maintenance and sustainability issues. 11. Institutional development impact is rated satisfactory because amongst other things, the established institutional setting for the EIRP has increased other agencies capacity for planning, policy analysis and service delivery through better definition of programmes, stability, transparency, enforceability and predictability for institutional arrangements. Also, better alignment and capacity of different parties such as the line ministries, Districts Councils and non governmental agencies in the pursuit of their different mandates. 12. The level of preparedness for unpredictable events that could cause widespread disaster is being put into place by the GOK and is being enhanced by policy and procedural innovations that are now being practised as a result of the ENEP and EIRP. 13. The score for sustainability of the EIRP was assessed as being unsatisfactory after discussions with key personnel, a careful review of relevant documentation and in consideration

xi

of the road and water sector reforms that are under way in the country. The conclusion from the review is that there is a well meaning programme in place for the maintenance of the rehabilitated EIRP components but that this is not being implemented particularly in the roads sector. In general, the observed problems regarding the state of repair of all the EIRP rehabilitated roads centres on three areas that have to be solved. The original feasibility and design features, the maintenance regime and maintenance finance. 14. The overall borrower performance is rated as satisfactory but with some qualifications. After initial delays at project start-up due partly to the resistance of GOK to fulfil the conditions precedent to loan implementation, the subsequent implementation support improved greatly. 15. The overall performance of the Bank is rated as satisfactory with some qualifications. Indeed, the Bank responded quickly to the request for assistance from the GOK. The loan was appraised in May 1998 and approved in November of the same year. The project objectives were consistent with the national sectoral strategies and the Bank’s lending policy.

Conclusions 16. The EIRP was a ‘qualified’ success with various components that provide a model for future disaster relief as well as infrastructure projects in the roads and water sectors. The EIRP was relevant to the country situation and the Bank’s assistance strategy. It has achieved all its relevant objectives of rendering back to normality the majority of the devastated infrastructure. The EIRP has also positively impacted the socioeconomic conditions of the affected population. The continued sustainability of the rehabilitated infrastructure remains the negative issue in an otherwise successful project. Action on the ground would need to be strengthened by the GOK even as the new strategies and departments enhance their operations in the sectors but particularly the roads sector.

Lessons 17. The high level commitment of the Government of Kenya to the El Nino Disaster and subsequent PMU situated in the President’s office is an indication of how disaster rehabilitation projects should be handled in the absence of adequate country policies, procedures and systems. However, it must be noted that stable institutions and good leadership are prerequisites to better management of emergency rehabilitation programs. 18. The use of the Banks standard lending instrument and their attendant procurement, disbursement and implementation policies is not suitable for rehabilitation projects after an emergency disaster for which time is of the essence. The achievement of high rates of compliance was incompatible in some instances with the emergency nature of the project. 19. Hence, streamlined procurement and payment procedures, and sound public service contract management are necessary for a smooth implementation of an infrastructure rehabilitation project. They are easily replicable in other disaster or emergency situations. 20. The prompt responsiveness of donors, both IDA and the Bank Group, is an indication of how disaster relief rehabilitation should be approached. 21. Adequate recognition of Country and potential project risks is essential to a reduction in implementation delays.

xii

22. The active participation of communities during the implementation stages of post-disaster rehabilitation projects is a prerequisite for projects such as the EIRP. 23. Unrealistic disbursement deadlines (with regards to the urgency required for a rehabilitation project after an emergency) and lack of coordination of such deadlines with co-financiers could create an opportunity for the underutilisation of project funds. 24. Sustainability of rehabilitated disaster facilities is an issue which should be resolved upfront with adequate transitional arrangements for the rehabilitated facilities. For example, local authorities signed over the completion certificates and are paying their maintenance needs for those roads through the RMLF mechanism.

1. PROJECT BACKGROUND 1.1 Country Economic Context 1.1.1 Kenya’s economic growth rate has been on the rise since 2003 and has averaged 3.5 percent in the preceding two years of 2004 and 2005. The economy however, faces a host of challenges, typical among which is the acceleration of broad based growth to help reduce poverty and improve the delivery of public services, while securing fiscal discipline and restoring price stability. The resolution of these challenges is embedded in the Governments Economic Recovery Strategy. It aims to promote strong economic growth and increased employment, by providing greater opportunities for productive employment through the rebuilding of sound governance structures, addressing the country’s major macro-economic vulnerabilities, large domestic debt and distressed financial system, and reforming the labour market and the trade system to foster a more competitive private sector. 1.1.2 The Republic of Kenya has several neighbours. On the North and North-East of the East African Coast there is Somalia, Ethiopia and Sudan. Uganda is to the west, and Tanzania to the South and South-West. The country has an area of 582,647 square kilometres of which about 2.3 percent is below sea level. About three-fifths of the country in the north and north eastern parts are arid and sparsely populated. Kenya has a wide range of climatic conditions, being on the equator and having wide variations in altitude from the snow-capped top of Mount Kenya at 5000 metres, through the temperate highlands, to the low lying coastal belt. The population is presently estimated at 35 million and the country is estimated to have a high overall population annual growth rate of 2.7%. This cannot be sustained by increased agricultural production in rural areas. Hence the growth in urban population has been higher than the national average with a consequent rise in urban low income groups (estimated at 30% of the urban population or 1.25 million people). 1.1.3 Kenya has two rainy seasons – the ‘long rains;’ lasting from March to June, and the ‘short rains’ from October to December. Average annual rainfall is about 560mm, varying from about 250mm in the drier areas in the north to over 1000mm in the high mountain areas. Kenya has experienced prolong drought intermittently over the years. However, starting from around the month of October 1997, the “El Nino” phenomenon brought about abnormally high rainfall and extensive flooding during the months of October and November, and continued through January to June 1998. The attendant devastating floods caused extensive damage to vital social infrastructures and other areas such as on agricultural produce and livestock, water, sanitation, roads infrastructure and housing in 46 of the 61 districts in Kenya. 1.1.4 The Government of Kenya (GOK) quickly realised the severity of the situation brought about by the “El Nino” disaster. They therefore, approached the Bank Group and a number of bi-lateral and multi-lateral donors for emergency assistance to restore infrastructure to their pre “El Nino” levels. As a result of this request, the Bank Group together with the IDA as co-financiers came together to finance the EIRP. 1.1.5 Prior to the EIRP, the Bank Group had no prior experience in financing emergency operations in Kenya, but has had extensive involvement in the transport and public utilities sectors through its normal lending activities. The experience of the Bank in all Sectors are characterised by long start-up delays in fulfilling the conditions precedent for loan effectiveness, particularly with regards to the acquisition of land.

2

1.2 Project Formulation 1.2.1 The Bank mounted a combined preparation and appraisal mission in May 1998. Following the loan negotiations in August 1998, an African Development Fund (ADF) loan of UA 11.52 million was approved on 12 November 1998 for the EIRP. 1.2.2 Although the project was appraised as a stand-alone entity, it was implemented using the same implementation arrangements as the IDA financed El Nino Emergency Project (ENEP)2, but provided additional staff to the Project Management Unit (PMU). It also used IDA financed consultants for the designs, supervision and audits of the Bank Group financed components. 1.2.3 Since there were a number of sector ministries involved, a PMU was set up at the Office of the President headed by a Project Manager and with a procurement/engineering adviser and financial management adviser recruited from the private sector, supported by experts seconded from the sector ministries. 1.2.4 GOK assembled a group of multi-sectoral specialists from the Ministries of Roads and Public Works, Environment and Natural Resources, Health, Local Government, Finance and Planning and the Office of the President (OP) in December 1997 to assess the damage caused by the rains and to plan for emergency operations in those areas most critically impacted by the flooding. This El Nino Disaster Coordinating Committee was housed within the OP and their initial report formed the basis for the funding proposal to donors. 1.2.5 The selection and prioritisation of sub-projects in the Road and Water sectors was done in close collaboration with the District Disaster Committees (DDCs) chaired by the District Commissioners. The following criteria were used in the prioritisation: (a) reversal of life threatening situations; (b) restoration of essential human services; (c) restoration of vital economic functions and lifeline roads to cut off areas; (d) protection of economic assets at risk; and (e) potential for the creation of jobs during the project life. There were no detailed designs at the time of appraisal, however, in recognition of the emergency nature of the works, it was agreed at the outset that cost estimates could be prepared on the basis of the field assessments. 1.2.6 All the roads that were selected under the project were impassable following the extensive damage caused by the El Nino floods. The roads selected invariably had serious drainage problems and poor soil conditions. The works that were carried out typically included the following activities: (i) light or heavy grading; (ii) gravelling and gravel spot patching; (iii) repair and installation of concrete culverts; and (iv) protection works including the installation of gabions. Mechanical based construction methods were used to rehabilitate the roads. This was found to be appropriate given the emergency nature of the works. The alternative of labour-intensive methods was considered to be ineffective for an emergency situation were timeliness is of the essence.

2 ENEP is a product of the IDA’s El Nino Emergency credit for Kenya which was worth US$ 77.5 Million (≈UA 55 Million). It was set up within the Office of the President and was conceived as a rescue mission to rehabilitate the social economic sectors of water supply, health facilities and roads in the affected districts. The project aimed to: (i) minimize life threatening condition in impacted districts by restoring potable water supply and health facilities; (ii) facilitate improved economic activity through the restoration of key routes badly damaged during the El Nino storms; and (iii) demonstrate streamlined procurement and other managerial techniques which could be more broadly applied within the Government administration.

3

1.2.7 The project suffered from many implementation delays that could be attributed to both the GOK and the Bank. A 7 months delay in fulfilling loan effectiveness by the GOK could have been avoided if the Bank had ensured that critical conditions were fulfilled at the appraisal or negotiations stages. The delays were compounded by the absence of a dedicated roads expert from the Bank and the stipulation by the Bank of unattainable deadlines such as that relating to the 28 days deadline for effecting payments. Also, the implementing experts at the PMU had procedural knowledge gaps as they were not involved in the negotiations for the EIRP. At the outset, these negotiations were conducted primarily with the Finance Ministry. 1.2.8 The PPER assesses that despite the delays encountered prior to project start-up, the methods adopted in the formulation of the project were satisfactory. The use of the existing arrangements for the ENEP and IDA financed consultants increased the timeliness of the intervention and made the project more cost-effective. 1.3 Objectives and Scope at Appraisal (Logical Framework) 1.3.1 The overall objective of the EIRP was to restore vital socio-economic infrastructure in order to counteract the effects of the “El Nino” on the adversely affected population groups in Kenya. The Methodology of Project Design and Evaluation (MPDE) matrix is presented in Annex 1 and it details the project goals, objectives, outputs and activities. 1.3.2 The main purpose of the project was to support the Government’s efforts to mitigate the serious effects of flooding attributed to the El Nino phenomenon on the road and water sectors. In the road sector, the long term goal is to improve the efficiency of road transport systems in the country. In the water sector the long term goal is to provide water supply of good quality in sufficient quantity and in close proximity to the Kenyan populace. The project was deemed to have been a close fit for the long term goals in the sectors by ensuring that resources are put into rehabilitation of existing infrastructure before investing in new ones. 1.3.3 At appraisal, the project components were selected from an inventory of all the destruction caused by the “El Nino” which had been prepared by the relevant government ministries with the assistance of the affected communities and United Nations agencies in Kenya. The key priorities were – reversal of life threatening situations; restoration of essential human services; restoration of vital economic functions and of life-line roads to cut off areas; and the protection of economic assets at risk. 1.3.4 The project had four physical and one institutional component. The physical components were i) provision of chemicals, ii) the replacement of components in the national water resources monitoring network, iii) replacement and repair of components and machinery on the water supply system, and iv) the repair of 74 different category of roads. The fifth component was for consultancy services for the final designs, supervision of works, and technical, financial and management audits. See Annex 1. 1.4 Financing Arrangements - Bank and Others 1.4.1 The initial total cost of the EIRP was UA 14.30 million. It was co-financed with the IDA and GOK each contributing UA 1.05 million (10.5%) and UA 1.87 million (18.7%) respectively. ADF financed the remaining UA 7.09 million or 70.8%. The Bank’s contribution at appraisal was estimated at UA 11.52 million or 80.6% of the total with the IDA and GOK each contributing 9 and 10% respectively. It was confirmed that the subsequent decrease in the ADF financing (from 80.6% at appraisal to 70.8%) is attributable mainly to the depreciation in

4

the value of the Kenyan Shilling against the UA and the transfer of UA 0.29 million from the ADF portion to the GOK as a result of rejected variation orders. 1.4.2 There was a subsequent marked increase in the GOK’s contribution due to rejected variation orders and their increased support for the PMU. Their contribution increased from 10% to 18.7%. There was also an undisbursed ADF loan balance of UA 4.4 million that was eventually cancelled. An overview of the financing plan at appraisal and completion can be found under basic project data at the start of the report.

2. THE EVALUATION 2.1 Evaluation Methodology and Approach 2.1.1 The post evaluation was carried out through observations, primary and secondary data collection and assessments in Kenya as well as desk reviews and assessments at the Bank. Subsequent analysis and reporting as contained in this report is based on the “Revised Guidelines for Project Performance Evaluation Report (PPER). 2.1.2 The PMU was no longer in operation at the time of the evaluation. Thus, in Kenya the mission team paid visits, conducted interviews and collected data from the relevant ministries and departments. These were at the office of the President, under which the now disbanded PMU was located; the ministries of Finance, Roads and Public Works, Water and Irrigation, and Local Government. Data was also collected from the Water Services Regulatory Board, Kenya Roads Board and the Lake Victoria South Water Services Board. As the EIRP and overarching ENEP3 involved co-financiers and other donors, data collection and interviews were also carried out at the World Bank, French Development Agency (AFD), the European Union, KFW/ GTZ There was also interviews and discussions with the former project managers of the EIRP and ENEP. Visits were also carried out to project sites in the 33 affected Towns and 13 Districts to collect data and have discussions with project beneficiaries and staff. 2.1.3 Primary data collection entailed “key informant interviews” with personnel from the various selected sources. A set of semi-structured questions for three separate areas of Roads Rehabilitation, Water and Sanitation and General Economic and Emergency relief crafted for each of three separate groups of - Former PIU Experts, Relevant Ministries and Multilaterals/Co-financiers. Data was also collected through field visits to sub-projects in the Nyanza and Western provinces were over 90 percent of the rehabilitation works took place. A total of 7 grades D and E roads out of a total of 25 and 1 grade C road out of a total of 3 were evaluated. A total of 265 km out of 464.7 km that was rehabilitated was evaluated. Three were selected on the predetermined basis of good, mediocre and bad. The remainder were selected at random. For water and sanitation, 6 sub-projects out of 36 were also evaluated. 2.1.4 Secondary data collection entailed the collection of compiled statistics, program documents, reports, records and other data from the selected sources. All data was compiled and analysed in order to obtain evaluative assessments on the basis of compliance and consistency with Bank policy and guidelines, what worked and what didn’t and sustainability issues. 2.2 Key Performance Indicators

3 See footnote 2 above.

5

2.2.1 The performance indicators for the EIRP at appraisal and what eventually obtained are presented in Annex 1. Because of the way in which the EIRP was conceived, adequate data was made available during and after project completion that enabled the verification of indicators of the project goal, objectives, output and activities. 2.2.2 There were some marked variations between indicators at appraisal and what was achieved on completion. For project objectives, the time line for the completion and benefit to the people of all the sub-projects slipped by two to three years from 2000 to 2003. The objectives were however, eventually achieved. Several project outputs were not adequately quantified at appraisal. There were a series of over estimations of variation orders that however, resulted in the achievement of greater outputs than were previously envisaged. This was particularly the case for the water and sanitation projects. The over estimations allowed for additional security features to be undertaken that was not previously planned to water treatment facilities as well as the construction of staff residences and sanitation facilities. By contrast there was some under estimation for the rehabilitated roads. So that on completion, there was a smaller number of roads rehabilitated than previously envisaged, although for a longer network – 405Km planned and 464 delivered. There was also an over estimation of the financial requirements of the EIRP. Verifiable indicated cost estimates at appraisal for all five components were over estimated at appraisal; this subsequently led to the cancellation of 44 percent of the loan at completion. 2.2.3 The evaluation team discovered that the feature of the EIRP regarding over estimation was borne out of amongst other things, necessary urgency at appraisal, the absence of adequate baseline data and a 26% drop in the value of the Kenyan shilling relative to the UA between appraisal and completion. This situation is not acceptable as the estimated amounts could have been channelled to the rehabilitation of a larger number of damaged infrastructures. The performance indicators for judging achievements were therefore not adequately quantified at appraisal although it did not lead to the failure of the project. 3. IMPLEMENTATION PERFORMANCE 3.1 Loan Effectiveness, Start Up and Implementation 3.1.1 The Bank’s PCR has provided essential details about the implementation performance of the EIRP. The assessments of the Bank’s PCR, the IDA’s ICR as well as the findings of this PPER, lead to the overall conclusion that the project’s implementation performance was satisfactory. This PPER’s satisfactory rating however, comes with some qualifications notably with regards to the implementation and other delays that could be attributed both to the GOK and the Bank. 3.1.2 The PCR indicates that the conditions precedent to first disbursement was all fulfilled by the time the loan was declared effective. These conditions were: (a) opening and maintaining a special foreign exchange account in which the proceeds of the loan were to be deposited; (b) establishment of an operational Project Steering Committee (PSC) chaired by the Permanent Secretary/Secretary to the Cabinet and Head of the Civil Service and comprising other government officials; (c) establishment of a Project Management Unit (PMU) comprising a Project Manager, a Procurement and Engineering Adviser, a Financial Management Adviser, an Urban Roads and Drainage Engineer, a Rural Roads and Bridges Engineer, a Water and Sanitation Engineer, a Health Specialist, a Supplies and Procurement Specialist, and a Finance Specialist; (d) secondment of a Water and Sanitation Engineer, a Transport Engineer and a Procurement Specialist to the PMU in addition to the professionals mentioned in (c)

6

above; and (e) provision of evidence of the entry into force of the IDA loan agreement and confirmation that IDA would finance the consulting services under the Project. 3.1.3 The loan was signed on 29 January 1999 and declared effective on 7 September 1999, a delay of about 7 months. The principal reason for this crucial delay in an “emergency project” was attributable to the initial resistance by the Government to the establishment of an independent Project Management Unit in terms of the selection of project management staff, the relationship between the PMU and the project steering committee; and issues relating to the secondment of staff from the Ministries. It is believed that this delay could have been avoided if some of the conditions were fulfilled at the appraisal or negotiation stages. 3.1.4 The procurement for goods and works contracts was carried out using the relevant standard bidding documents for the Bank. As such standard Bank procedures were followed. National Competitive Bidding (NCB) procedures were used by the Bank in good faith as it was supposed to have ensured faster procurement and subsequent implementation. However, this method of procurement and the way it is applied by the Bank contributed to implementation delays because the sixty days tendering period was deemed to be too long. This is so because the NCB method of procurement is suitable for smaller contracts and for local contractors who would need less time to prepare and submit bidding documents. A scenario that would have been most suited to the emergency nature of the project. The sixty days period is ideal for ICB method of procurement which attracts International Bidders and involves larger contracts. Indeed the PCR indicates that the GOK requested and obtained from the Bank approval for the reduction of bidding periods from 60 to 45 days for the goods contracts to accelerate project implementation. 3.1.5 Further delays were caused by the incompatibility of the Bank’s standard rules with that for a project in an emergency situation. Bank rules were also deemed to be overly optimistic in the assessment of the time line for the tendering process. The appraisal report estimated an average of five months from the date of approving the tender documents to the award of contract. The actual average turned out to be 9.5 months. The procurement review of the EIRP in 2001 also found that the use of the Bank’s standard bidding documents for the procurement of vehicles “was heavy and that the use of simpler documents would have helped in avoiding delays”. 3.1.6 It is of note that the project did not have a dedicated roads expert from the Bank. The expert dealing with the EIRP issues was a water engineer. Technical issues regarding the roads were dealt with by the consultants’ technical units with the PMU. As such, the water sector encountered much fewer problems at implementation than the roads sector.

7

3.2 Adherence to Project Costs, Disbursements and Financial Arrangements 3.2.1 One unique feature of the EIRP is the excessive cost-under runs and some cost-over runs that occurred over the life of the project. The roads component accounted for 40.8% of the actual cost compared to 52.8% at appraisal. The water component accounted for 81% of the appraisal estimate. Budget set aside for the support of the PMU accounted for 6.5% of the total compared to 1.4% at appraisal. 3.2.2 Discussions with relevant staff in Kenya and a review of the PCR and other documents reveal that the appraisal figures were arrived at from the estimates of the sector ministries prior to the design reports from the technical consultants. Thus, when the design reports were made known with revised cost estimates, a number of sub-components of sub-projects were removed or reduced prior to the consultants bidding. This situation was compounded by further revised changes in the scope of the work as there were further variations in the road sector within individual sub-projects during the construction period. The scope of the work for five sub-projects (PR30, 31, 35, 36 and 39) were changed from spot improvements of several roads to full rehabilitation of fewer roads at the request of the DDCs. The justification given for the changes in scope was that from the time of the initial damage assessment the roads continued to deteriorate to the extent that spot improvements were no longer viable. It was later decided to have shorter road lengths rehabilitated to standard specifications as opposed to spot improvements with portions in between sections, which were impassable. Another reason given was that due to the lapse of time between appraisal and the actual start of the project, some of the project roads originally earmarked for rehabilitation under EIRP were rehabilitated by the Ministry of Roads and Public Works using the fuel levy funds. This resulted in some of the project roads being substituted with others or removed from the sub-projects. 3.2.3 The change in scope during construction did not however lead to changes in the original contract amounts because the four consultants’ technical units fitted the revised scope of work to the budgetary allocations. However, because these variations were implemented without the Bank’s prior “no objection” they were rejected by the Bank despite two appeals from the Government and the auditors recognition that the variations were necessary and that the PMU could not have waited for all approvals before issuing instructions since the contractors were already on site. This among others increased the cost of the project to the GOK and may have been avoided if the Bank had an officer ‘in-Country’ as was the case of the IDA’s parallel ENEP. The issue was pronounced at the time due to the problems engendered by the relocation of the Bank Group. 3.2.4 There were delays in implementation for the EIRP that led to further increases in the cost of the project to the GOK. The disbursements which were expected to be completed over a three year period from 1998 to 2001 started in 1999 and were completed at the end of 2002 resulting in a 22 months delay. This translates into 3 extensions in June 2001, December 2001 and 2002. The need for the extensions is put down to delays in the start up of the project implementation due to delays in loan effectiveness; and longer implementation and completion times for final accounts and payments. 3.2.5 Bearing in mind that the IDA were responsible under the terms of the EIRP agreement for consultancy services, another issue was related to the fact that the IDA and the Bank did not synchronise disbursements deadlines or their extensions. Thus on two occasions during implementation both the Bank and the IDA took decisions to extend their last disbursement deadlines without reference to each other. If the IDA had taken the decision not to extend their last disbursement deadline, this would have required the Bank to take up the

8

financing of the consultancy services, an activity not allowed for under the loan. The PPER is in agreement with the PCR that there is need for more consultations in future between co-financiers. 3.2.6 The Bank stipulated a 28 days deadline for effecting payments. During implementation, this deadline was never achieved and was also incompatible with the 44 days deadline set by the IDA co-financiers which was achieved. As such the Bank’s deadline was unrealistic even though it was set in good faith at appraisal to reflect the emergency nature of the project. The subsequent delays caused by this increased the amount of interests paid to the contractors up to the level of 0.114 Million UA, representing an increase of 8% of the expenses of GOK. 3.2.7 Prompt updates were not being provided on disbursements by the Bank. In some instances the PMU resorted to inquiring from the contractors as to whether payments had been made. Thus, during the Bank’s final mission, reconciled documents and figures were not available. These problems were possibly caused by the absence of staff responsible for disbursement in critical operations and audit missions. 3.3 Project Management Reporting, Monitoring and Evaluation Achievements 3.3.1 The executing agency was the Project Management Unit (PMU) under the Office of the President (OP). The PPER agrees with the overall satisfactory rating for the PMU from the IDA’s ICR and the PCR. 3.3.2 The PMU had adequate and qualified professional, technical and support staff who were dedicated in managing the project well to completion. The majority of the technical staff from the relevant line ministries were of a high technical calibre and worked long hours in achieving an ambitious set of targets. They Delivered 26 Bank financed civil works contracts and 116 IDA financed civil works contracts totalling about US$ 90 million within a three year period. The ability of the PMU to effectively coordinate and manage the line ministries, district authorities, beneficiaries, consultants, contractors, and donors was essential to the successful delivery of the project outputs. This PPER is of the opinion that the above average dedication could certainly be attributed to the quality of staff seconded from the line ministries and those recruited from the private sector and also possibly due to the salary incentives given to the seconded staff as well. PMU technical staff visited samples of the contract sites regularly to ensure that contracts were being implemented on a timely basis and to the required specifications. They oversaw the work of the technical units who were responsible for the day to day supervision of the works contracts. 3.3.3 The quality of the progress reports was of a high standard and they were submitted regularly to the Bank in accordance with the requirement of the General Conditions of the Loan. A total of 16 quarterly and 33 monthly progress reports were submitted. The progress reports covered the most salient aspects of the project including status of fulfilment of loan conditions, procurement, physical implementation and disbursements. The reports also highlighted the problems encountered during implementation of the project and brought to the Bank’s attention those problems that require the Bank’s attendance. 3.3.4 Financial, technical and management audits were conducted by a private firm which reported on the financing, implementation progress, procurement, quality of works, capacities of the PMU, consultants and contractors on a quarterly basis. Audit reports were regular and informative and raised important issues in time for corrective action to be taken. A total of 14 such quarterly audits were conducted. The reporting regime of the PMU is replicable for other similar projects.

9

4. PERFORMANCE EVALUATION AND RATINGS 4.1 Relevance of Goals and Objectives and Quality at Entry Assessment 4.1.1 A satisfactory rating is awarded for relevance as the EIRP was compliant and consistent with most of the Bank’s policy and guidelines. In general, the EIRP is deemed to have met the objectives of restoring vital socio-economic infrastructure and services as was also concluded by the Bank PCR. However, the achievement of high rates of compliance was incompatible in some instances with the emergency situation of the project. It would seem that the Bank’s normal lending instruments are not suitable for rapid response to the needs of a project in an emergency situation. 4.1.2 The project’s overall objective of restoring vital socio-economic infrastructure in order to counteract the effects of the “EL Nino” on the adversely affected population groups was important for achieving the national sectoral aims of good water supply in sufficient quantities and in close proximity to the population as well as the sectoral aim of improving the efficiency of the road transport system. This was particularly pertinent at the time as the GOK is still in the process of reforming both sectors. 4.1.3 The PPER has awarded a satisfactory rating with some qualifications for Quality at Entry. It is considered that there were four fundamental categories of design considerations which were critical during the preparation stage of the EIRP as well as ENEP. These were: i) a geographic focus for the possible relief and rehabilitation interventions; ii) identification criteria and process for selecting the beneficiaries; iii) the critical sectors for interventions; and iv) the institutional arrangements for the management of the emergency and rehabilitation operations. These were taken into consideration and addressed by the GOK and the Bank Group before and during appraisal. 4.1.4 The selection of the geographic focus for the interventions was carried out through a comprehensive damage assessment of the areas impacted by the floods. There was inclusion of all relevant multi-sectoral specialists from the Ministries of Roads and Public Works, Environment and Natural Resources, Health, Local Government, Finance and Planning, and the Office of the President. During the assessments, several criteria for determination of the districts were developed and the number of districts broadened to be as inclusive as possible within the set criteria. Sub-projects were also prioritised and the beneficiaries targeted by a ranking hierarchy including the restoration of essential services, economic activities and saving of existing assets. Districts were then required to present their priorities with justifications following the set criteria. These were verified by independent consultants and subsequent adjustments were made to the priority lists based on a fine tuning of the application of the pre-determined criteria. The highest infrastructure priorities were correctly identified at the outset as being the rehabilitation of urban and rural roads and the restoration of water supply services. 4.1.5 The risk of weak institutional capacity was addressed by making the establishment of the Project Steering Committee (PSC) and the Project Management Unit (PMU) and its staffing conditions including additional staff precedent to first disbursement. Also, the risk of possible delays in the release of counterpart funds was addressed through the condition that payments would only be made by the Bank Group upon submission of proof from GOK that local payment obligations had been met. Even though these measures mitigated against the risk of start-up delays in fulfilling the conditions precedent to loan effectiveness, the Bank Group did not fully exploit prior experience of these delays in financing infrastructure projects in Kenya. The GOK lacked essential knowledge about Bank procedures and time limits for conditions

10

precedent to loan disbursement. Drawing the GOKs attention on several occasions to these details prior to implementation would have gone some way to reducing start-up delays. 4.1.6 The design by the technical consultants for each of the sub-projects in the water sector was adequate as it resulted in the achievement of better outputs than initially planned. However, for the roads sub-projects, designs for some of the rehabilitated roads were inadequate for the rainfall pattern of the districts and the usage of the roads. The absence of culverts on some of the roads and the issue of abrupt changes of road profile at locations of cross culverts are cases in point. 4.2 Achievements of Objectives and Outputs: “Efficacy” 4.2.1 A satisfactory rating is deemed appropriate for efficacy in consideration of the fact that actual stated outputs at appraisal (and final agreed works for roads) for the rehabilitation of the network for 74 roads in 8 districts and the restoration of water supply facilities in 33 towns in 13 districts were carried out. The quality of work done for some of those that were examined was good. The remainder may have current defects and problems associated with maintenance and sustainability issues. 4.2.2 The unique characteristics and implementation methodology of the EIRP created conditions that allowed officers seconded to the PMU to gain vital experiences. Experts from the line ministries were absorbed into the PMU and allowed to work independent of GOK with other expert consultants and the steering committee. This created the right atmosphere for the development of more efficient methods for among others, procurement, contracts and disaster relief policies that have filtered back down to the Ministries for other projects implementation and disaster relief policies and procedures. 4.2.3 The issue of socio-economic and environmental impacts assessment for the Bank is tenuous. This is because of the near absence of baseline data at the onset of the EIRP. However, socio-economic impact assessment carried out on selected sub-projects by the World Bank (WB) co-financiers in 2003 and the other before and after changes on some sub-projects examined during the PPER mission indicate that the EIRP had an impact on the affected populations. Motorized transport of goods and commuter services are currently on-going on the roads which were completely impassable prior to the EIRP. The improvements would have therefore increased accessibility, reduced travel times and as indicated by the WB study, also reduce vehicle maintenance costs. 4.2.4 Water supply and its access were also increased. Data from the Victoria South Water Services Board indicate that the 11 water supply units rehabilitated under the EIRP increased production by 24% from 4800 to 6344 m3/day before and after the EIRP with current production showing a further 4% increase. This is in line with the WB study that has further assessed that there was an increase of between 25 to 55% in access to water supply and a decrease of over 60% in distances travelled and time spent collecting water. 4.2.5 In the roads sub-sector, access to farms, markets, schools, and clinics in towns and villages were restored on immediate completion of the project. According to the IDA impact study, there has been a 45% reduction in the transportation cost of farm inputs and a 30% reduction in transportation cost of farm produce, significant reductions in transportation delays with reductions in deterioration of produce and improved prices in some areas financed by the World Bank. Vehicle operating costs also decreased by between 5% and 33% per month, commuter fares decreased by between 10% and 50% while transportation revenue

11

has increased by between 10% and 50%. Overall travel time has also decreased by between 25% and 70% and school lateness and absenteeism also decreased. 4.2.6 The project did not set out specific objectives for the development of the private sector. However, the improvement in road transport has greatly enhanced economic activity in several ways such as the restoration of transport links for movement of agricultural produce. In the water sector, timeliness and the reduction in water borne diseases enhances economic activity in the affected districts. In general, the insistence of the PMU on good performance and the prompt termination of contracts for poor performance helped to raise the standard of delivery of private sector contractors. The project also helped to enhance their resource capacities. 4.3 Efficiency The use of quantitative indicators of efficiency is redundant for the EIRP as an infrastructure rehabilitation project in the context of an emergency. Cost effectiveness indicators would have been appropriate to calculate, but again this is made redundant by the fact that a good qualitative assessment can be made in this case on the extent to which the project has achieved its sectoral goals and objectives and subsequently whether the benefits are sustainable. A qualitative assessment is possible because the EIRP was indeed cost effective as only 61.57% of the appraisal estimate was utilised to achieve all of the envisaged outputs. 4.4 Institutional Development Impact 4.4.1 Institutional development impact is rated satisfactory because amongst other things, the established institutional setting for the EIRP has increased other agencies capacity for planning, policy analysis and service delivery through better definition of programmes, stability, transparency, enforceability and predictability for institutional arrangements. Also, better alignment and capacity of different parties such as the line ministries, Districts Councils and non governmental agencies in the pursuit of their different mandates. 4.4.2 The level of preparedness for unpredictable events that could cause widespread disaster is being put into place by the GOK and is being enhanced by policy and procedural activities that have spurn out of the El Nino disaster. This is particularly so as the institutions which were set up for the ENEP and EIRP are being adapted for general disaster management. At the time of the PPER mission, the new draft disaster management policy was on the last stages of being ratified through parliament, although some of the institutions that will be run on this policy are already operational. The overarching body would be the Disaster Management Agency which will coordinate activities between a 24 hour national disaster operations centre (operating as an early warning system), the Arid Lands Resource management project and the Kenya Food Security Steering Group that will bring together line ministries. Kenya’s preparedness would be further enhanced through benefits from the International Strategy for Disaster Reduction at the UN. This is because Kenya’s special programmes and operations is the focal point of this strategy. The sustainability of the policies and strategy being developed is underscored by the fact that the disaster policy will reflect the strategic plan of the Ministries which draws information and issues from the Economic Recovery Strategy (ERS). All of this auger well for the alleviation of problems in case of another emergency such as the El Nino Phenomenon.

12

4.5 Sustainability 4.5.1 The score for sustainability of the EIRP has been rated unsatisfactory after discussions with key personnel, a careful review of relevant documentation and in consideration of the road and water sector reforms that are under way in the country. The conclusion from the review is that there is a well meaning programme in place for the maintenance of the rehabilitated EIRP components but that this is not being implemented particularly in the roads sector. Annex 2 and 3 details the financial and administrative follow-up mechanisms and issues that were supposed to be in place at the time of the PPER mission. 4.5.2 The reality on site was somewhat different. The rehabilitated roads sub-projects that were visited were mostly in need of some form of maintenance. Half were in a state of disrepair with one in particular, the D285 (Kaptama-Chebambi-Kamokina road, 14.1 Kms) being barely passable (at an average of less than 20km/hr in some places), bearing in mind also that rocky outcrops on the road surface would render it impassable and dangerous to vehicles during average to high rainfalls. It would appear that the long-term sustainability of a good proportion of the rehabilitated roads is currently not assured. In general, the observed problems regarding the state of repair of all the EIRP rehabilitated roads centres on three areas that have to be solved. The original feasibility and design features, the maintenance regime and maintenance finance. 4.5.3 Design Features: The state of the roads seemed to reflect the way in which they were re-designed for the rehabilitation bearing in mind the possibility for high rainfall in the area. This is particularly so for the gravelled types D and E roads that forms more than 90% 0f the EIRP roads sub-projects. Those without adequate side drainage and culverts that had been cleared and / or well constructed culverts seemed to be worse off. Furthermore, on the E215 (Pala-Kodula road, 11.5Kms) considerations regarding the soil type in the re-design would have reduced the possibility of virtually the entire road disappearing and being now impassable in some sections after recent rains. There was however, evidence of current work being done to make it passable. By contrast, the E1262 (Mbale-Magaba Road) which has a full drainage and culvert system that had been cleared was good and easy to pass at an average of more than 50km/hr. 4.5.4 Maintenance Regime: The maintenance of all Class D and E roads is under the District Roads Committees (DRC). The maintenance regimes are mixed. There is one that allows for checks on the roads every month with the possible provision of repairs every six months. The other regime allows for checks and subsequent repairs every year. However, in either case the roads will only be repaired if they are deemed to be bad enough for inclusion in the annual work plan. All roads outside of the work plan for a specific year are not maintained. All of these roads are maintained by contractors procured through competition. For gravel roads in high rainfall areas, annual resurfacing and quarterly drainage and culverts clearance would be the minimum expectations for achieving adequate medium term sustainability. In the meantime however, the absence of a system to regulate ‘axle overloading’, is leading to further destruction of the rehabilitated roads that could lead to the need for eventual reconstruction. 4.5.5 Maintenance Finance: Finance for the EIRP roads is sourced from the Road Maintenance Levy Fund (RMLF) and tolls from vehicles crossing over into Kenya. Currently 10% of the fund is allocated to all constituencies in Kenya from the Kenya Roads Board (KRB) for road maintenance. A further 24% of the RMLF is allocated equitably to the DRCs for Class D and E roads, 60% for Class A, B and C roads to the Roads Department and 1% for the Kenya Wildlife Trust for maintenance of roads within the Wildlife Parks. KRB’s administrative expenses are drawn from part of the remainder. The KRB is also free to source funds outside of the RMLF. Though these proportions may appear to be adequate, the problem lies in the actual

13

amounts available to the various maintenance groups. The area-heads of maintenance groups indicated that the annual budgets for maintenance fell far short of the ideal and hence the poor state of the EIRP roads. This is borne out by the figures from the KRB that indicate an approximate 91% shortfall in the required budget for an ideal national road network. In 2007/08, the projected deficit will stand at 4 billion Kshs after the RMLF had been taken into consideration. The upshot from this therefore, is that there are not enough funds to achieve medium term sustainability of the EIRP rehabilitated roads. 4.5.6 Maintenance in the water sub-sector projects that were visited was average to good. In general, inlet points, treatment works, storage facilities and machinery were well conceived and appropriately placed within the water works compounds, most of which are now fenced off using EIRP funds. This provides a good base for future maintenance of the facilities. However, some features to do with the maintenance regime and the current state of readiness of the water boards threaten the sustainability of the rehabilitated facilities. 4.5.7 Maintenance regimes at each of the plants visited were stated as being daily. However, there was evidence in some that huge algae deposits had been allowed to develop over a substantial period of time that could eventually lead to costly and time consuming repairs if this leads to eventual blocking of water ways, pipes or sieves. Worn out parts have not being replaced and in some instances were replaced by make shift items that caused excessive leakages. At the Mbale Water sub-project, a main inlet valve was out of operation and was gushing out large amounts of water. As a result, a section of the Town was not being supplied and at the facility itself, the effectiveness of the system could not be determined due to this loss. There was also a facility in which there was no water being provided due to the lack of fuel for running the pumps and another in which one of two new machines provided by the EIRP had burnt out with no immediate prospects for a replacement. 4.5.8 Data from the Lake Victoria South Water Services Board indicates that there is a water loss – UFW range of about 60%. This is compounded by a monthly billing of Kshs. 8.7 million for monthly revenues of Kshs. 5.7 million, a 35% loss in revenue. 4.5.9 The Water Act of 2002 calls for the management of community water schemes by community groups and the establishment of the Water Services Regulator that will oversee Water Services Boards (WSB) that will be responsible for the management of all piped water schemes in rural, small and medium towns. They will in turn be required to contract out the service provision to competent Water Service Providers (WSP). That arrangement is still not fully functional. Only one community scheme was currently under an established community group. For the WSB’s, the Lake Victoria South Board for example was only established in March 2004 and to date have only contracted out 2 water supplies to WSPs. As such the Boards are now required to fund maintenance from their revenues for water facilities within their zones of influence. They complain of being overstretched and lack good monitoring capabilities and hence the poor state of maintenance of some of the facilities. 4.5.10 In the medium to long-term, environmental viability may be sustainable for the water sector facilities, but for the rehabilitated roads, the lack of repair and maintenance could engender environmental problems such as flooding. Similarly, the absence or near absence of coherence and efficiency in both sectors reduces resilience to other external factors. 4.5.11 The current circumstances indicate that the long term sustainability of the EIRP water sub-projects is dependent on the successful implementation of the water reforms that are currently being implemented. However, this is provided that the WSBs would undertake rigorous inspections and the WSPs would put in place adequate maintenance regimes. It is of

14

note that the one community scheme in operation had no negative maintenance issues as is also the case for one of the facilities under the Kericho WSP. 4.6 Aggregate Performance Rating 4.6.1 The project’s aggregate performance rating is based on the simple averaging of the ratings under the five evaluation criteria of relevance, efficacy, efficiency, institutional development impact and sustainability. Overall, the EIRP was satisfactory in four of the criteria. However, the fifth criteria of sustainability of the rehabilitated works in both sectors but particularly the roads sector could not be ascertained at the time of the PPER despite the new institutional arrangements being implemented. 4.6.2 Overall, the project achieved all the physical outputs and in the water sector these were exceeded. The main problem of underestimation did not affect the implementation of the project that much and as such even though this component was unsatisfactory, the overall score for efficacy was still maintained at satisfactory. Institutional development impact of the EIRP is fully satisfactory as there are many spin-offs regarding better procurement methods and project management now being practised in line ministries. In addition, the new disaster and emergency management policies being coordinated by the office of the President are a direct result of the experiences gained from the EIRP and ENEP. 4.7 Borrower Performance 4.7.1 The overall borrower performance is rated as satisfactory but with some qualifications. At the outset, the borrower or GOK had already conducted considerable project preparation work through an emergency response unit established in the office of the President before requesting Bank Group and IDA assistance. This unit had been established to assess the “El Nino” storm damage and to identify the priority rehabilitation works. During this preparation, the various sector departments of the GOK collaborated very closely with the Bank and provided all the necessary background information. 4.7.2 The GOK was partly responsible for the 7 month delay in implementation due to their initial attempts to alter the qualifications required for the position of Project Manager following the dismissal of the first Project Manager. There were also further delays due to a deviation from the structure and procedure originally outlined in the conditions precedent to loan implementation for the procurement of engineering design and the selection of the engineering consulting firms. 4.7.3 After initial delays at project start-up due partly to the resistance of GOK to fulfil the conditions precedent to loan implementation, the subsequent implementation support improved greatly. GOK put in place as stipulated the PMU and seconded adequate and qualified officers from the various line ministries. The project Manager was selected based upon competitive selection from over 100 candidates who replied to the regionally advertised position. The procurement specialist and Financial Adviser were also selected in the same competitive manner. 4.7.4 GOK also established the Project Steering Committee with members comprised of nine permanent Secretaries from the respective sector ministries. This assisted in reducing some of the normal bureaucratic and lengthy procedures which enhanced the operations of the PMU. GOK complied with all loan conditionalities and was very forth coming in settling all additional costs and publication of the borrowers PCR on completion of the project.

15

4.8 Bank Group Performance 4.8.1 The overall performance of the Bank is assessed as being satisfactory with some qualifications. Indeed, the Bank responded quickly to the request for assistance from the GOK. The loan was appraised in May 1998 and approved in November of the same year. The project objectives were consistent with the national sectoral strategies and the Bank’s lending policy. 4.8.2 The lending instrument and method that was chosen was satisfactory although it could have been made more relevant by ensuring certain caveats were in place that recognises the emergency nature of the intervention. However, the identification of project risks at appraisal was satisfactory as the Bank used its prior experience in the finance of infrastructure projects in the Country to stipulate several conditions precedent to loan disbursement. The risk of weak institutional capacity was addressed by making the establishment of the PSC and PMU and its staffing conditions precedent to loan disbursement. However, the Bank could have been more proactive in improving the sensitisation of GOK over details on the conditions precedent to loan implementation that had been stipulated. 4.8.3 Supervision visits from the Bank were fairly regular. Six of these were carried out at about six monthly intervals over the implementation life of the project. The Bank did not provide for an M&E unit and relied solely on Monitoring and Evaluation consultants hired by IDA. The oversight did not affect the project negatively as the consultants allowed for an improvement of the quality assurance of the PMU as they added another layer for internal supervision of the project. 4.8.4 The IDA Audit consultants also undertook quarterly audits that contributed to the timely identification and solution of potential problems and enhanced the performance of the PMU, consultants, contractors as well as the quality of their outputs. 4.8.5 The provision of expertise for the EIRP was partly problematic due to human resource issues as there was no dedicated roads expert from the Bank to oversee the roads component of the project. As such the water engineer was responsible for both components of the project and possibly resulting in slightly better outcomes for the water sector rehabilitated facilities. 4.8.6 The Bank did not provide prompt updates to the PMU on all disbursements but particularly on disbursements to the engineering contractors. This presented a problem for the PMU as they found it difficult to reconcile data regarding the projects disbursements from the Bank. This problem was compounded by the absence of disbursement staff in critical Bank audit missions that would have provided clarity. Further compounding this situation was the absence of a desk officer or field office in Kenya. It meant that critical decisions regarding the project particularly with regards to required Bank consultation on variation orders could not be taken promptly. A case in point is the 5 contract variation orders that had to be paid for by the GOK as the PMU could not adequately consult with the Bank when they occurred. Also, delays could not be solved in Kenya such as the delay in the settlement of payments due to requisitioning funds from the special account to the ‘Kenyan Shillings operating account’ of the project. This was due partly to logistical problems in Abidjan at a time when the Bank was preparing to relocate to Tunis. 4.8.7 The Bank also imposed the use of a software for Financial and Technical Management that could not be fully utilised because of its limitations in terms of the scope of the EIRP and ENEP. It was not locally developed and did not suit the local conditions and

16

changes required in the system were difficult to implement especially as the source code was not readily available. As such it was problematic and initially delayed the work of the PMU. 4.8.8 The Bank group had little coordination with the co-financiers. Contact was limited to a stipulation before implementation from the Bank that the GOK provides evidence that the IDA loan agreement had entered into force and that the IDA had agreed to provide financing for consulting services under the project. The loan balance was not used and subsequently cancelled because of the lack of coordination between the IDA and Bank Group leading to the possibility of an earlier closing date of the IDA loan. 4.8.9 The use of the Banks stipulated 28 days deadline for effecting payments shows a lack of flexibility for a project that was in an emergency situation. During implementation, this deadline was never achieved and was incompatible with the 44 days deadline set by the IDA co-financiers which was achieved. 4.9 Major Factors affecting Implementation Performance and Outcomes 4.9.1 Factors Not Subject to Government Control 4.9.1.1 One of the factors outside the GOKs control was the Bank Group’s performance which affected the project in several ways. The Bank responded quickly to the request for assistance and made stipulations in the conditions precedent to loan implementation in order to mitigate against the risk of start-up delays. However, the Bank Groups implementation schedules were unrealistic for an emergency operation and caused unnecessary delays that led to interest charges that were later absorbed by the GOK. This was in addition to problems encountered with the Banks Procurement timelines that also caused delays. It was all compounded by the absence of an officer in-country that could resolve problems as and when they occurred. The Financial and Management System – “Powerworks” that was used for both the EIRP and ENEP was imposed on the Government by the Bank Group. This was counterproductive to the outcome of the project for several reasons. The software could not be fully utilised due to its limitations. Since it was not locally developed, it had no local support, no source code and could not be modified except by the developers who would have had to fly from Gambia and back. 4.9.1.2 Another factor was the contractors and consultants. Their work was largely satisfactory as all the outputs were achieved. However, the poor performance of two of the consultants to deliver the contractual detailed designs for 5 of the roads once the work had commenced resulted in the subsequent underestimation, the loan resources not being fully utilised and the cost of the variations increasing the cost to GOK. 4.9.2 Subject to Government Control 4.9.2.1 Factors under GOK control includes the Government’s commitment, the appointment of key staff, counterpart funding and administrative capacity. The Government was fully committed to ENEP and EIRP and hence had the PMU within the office of the President (OP). In addition, the Public Service Commission (PSC) comprising of nine permanent secretaries was brought together every month to serve an additional oversight function. All counterpart funding as well as additional unbudgeted costs were met on time and in full. 4.9.2.2 Two levels of staff were appointed to the PMU. Competent technical professionals from all related line ministries and project management staff from outside of the public service through a competitive recruitment process. The administrative capacity of the PMU was enhanced through excellent provision of resources on request.

17

4.9.2.3 The initial institutional differences between the Project Steering Committee (PSC) and the Project Management Unit (PMU) led to unnecessary implementation delays. 4.9.3 Subject to Executing Agency Control 4.9.3.1 Factors subject to executing agency control are Management, Staffing, Use of Technical Assistance, Monitoring and Evaluation, and Beneficiary Participation. At the outset, the beneficiaries of the infrastructure to be rehabilitated at the district level were involved in the initial assessments and subsequent selection of the sub-project to be rehabilitated. The DDCs identified the subprojects from the affected districts and prioritised them in all sectors for the PMUs acceptance in line with the budgetary provisions. The participation and active involvement of the DDCs especially the District Commissioners through the Provincial Administration and Sector Ministries in the projects implementation is not worthy. 4.9.3.2 Technical assistance for the PMU was in the form of six engineering consulting firms that were engaged from the start and assigned to six geographic areas to review submitted priorities, undertake detailed designs of agreed sub-projects, develop the associated tender documents, support the PMU during the tender process including evaluation of bids, and monitor/supervise the selected contractors from mobilisation to the completion of the contract. 4.9.3.3 The staffing of the PMU was multi-faceted in having both public servants and private sector individuals. Their management involved time-bound work programmes, strict adherence to the conditions of the contracts and effective on-site supervision. 4.9.4 Other Factors affecting Implementation 4.9.4.1 The change in project scope and design is one issue that threatened the successful outcome of the project and subsequently contributed to the delays and cost under-runs that were observed. It occurred primarily because the appraisal figures were arrived at from the estimates of the sector ministries prior to the design reports from the technical consultants. It was compounded by further revised changes in the scope of the work for a number of sub-projects in the roads sector. The deficiencies in estimating physical inputs and base unit costs emanate from these problems. The same is true for the inadequacies of price and physical contingencies. 4.9.4.2 The devaluation of the Kenyan shilling also contributed to the cost under-runs, but could be said to have contributed positively to the outcome of the project. This is because it allowed for accrued funds at project completion that with initiative could have been used for rehabilitation of more infrastructures instead of being cancelled. One of the objectives for the creation of the PMU was to ensure prompt payment to contractors, suppliers, consultants and other service providers. This was primarily achieved in most cases. However, delays were experienced in settlement of payments due to the high level threshold set for direct payments and the turn around time needed for requisitioning funds from the Special Accounts to the projects Kenyan Shilling Account.

18

5. LESSONS AND RECOMMENDATIONS AND FOLLOW-UP ACTION The EIRP was a ‘qualified’ success with various components that provide a baseline for

future disaster relief as well as infrastructure projects in the roads and water sectors. The EIRP was thus a wake up call to cope with rehabilitation, disaster and emergency situations. The EIRP was relevant to the country situation and the Bank’s assistance strategy. It has achieved all its relevant objectives of rendering back to normality the majority of the devastated infrastructure. The EIRP has also positively impacted the socioeconomic conditions of the affected population and provided the basis for more sustainable operations and maintenance within the new institutional framework in the roads and water sectors that has subsequently been implemented by GOK after the project.

Even though the performances of the parties (GOK, Bank and Co-financiers) were satisfactory in providing timely and adequate response to the country needs in an emergency situation, there were coordination and flexibility issues that may need to be addressed in similar future operations. The Bank could have been more active in playing its advisory role in limiting the burden of the GOK which has increased its contribution by 8% to the project and also in using the remaining balance of the loan. The continued sustainability of the rehabilitated infrastructure remains the negative issue in an otherwise successful project. Action on the ground would need to be strengthened by the GOK even as the new strategies and departments enhance their operations in the sectors but particularly the roads sector. 5.1 Lessons 5.1.1 The high level commitment of the Government of Kenya to the El Nino Disaster and subsequent PMU situated in the President’s office is an indication of how disaster rehabilitation projects should be handled in the absence of adequate country policies, procedures and systems. However, it must be noted that stable institutions and good leadership are prerequisites to better management of emergency rehabilitation programs.

● The establishment of the centralized PMU within the OP was extensively discussed during project preparation and agreed upon as a condition precedent to loan implementation. The rationale for placing a single centralized PMU within the OP was related to the urgent nature of the response time required and not to the multi-sectoral dimensions of the interventions. In terms of lessons learning, the important thing is more that the PMU was allowed to function with streamlined procurement and payment procedures, and less, where it was placed within the government’s structure. ● The open and competitive recruitment of the 3 project management staff from outside of the public service contributed significantly to the improved project management and timely outputs of the project. Time-bound work programs; strict adherence to the conditions of the contracts; and effective engineering supervision consultant firms to provide for the detailed designs, bidding documentation and award adjudication, and contract supervision have all lead to the successful completion of the contracts before the project closing date. These are good management practices which can be replicated within any of the Government ministries/departments. The replication of the PSC as an oversight entity cannot be easily established for future operations. Having nine permanent secretaries brought together at least once a month over the course of 30 months is not a practical arrangement. However, the function they served to provide can be replicated at a less executive level.

19

5.1.2 The use of the Banks standard lending instrument and their attendant procurement, disbursement and implementation policies is not suitable for rehabilitation projects after an emergency disaster for which time is of the essence. The achievement of high rates of compliance was incompatible in some instances with the emergency nature of the project.

● Several implementation delays were caused by these policies. For example, some of the procurement and disbursements functions carried out by the Bank in Abidjan could have been delegated to the PMU in this case as there were adequate oversight and safeguards. Indeed, the PCR also indicated that some of the IDA financed contracts; approvals for procurement and disbursement up to a certain limit were delegated to the PMU and were not referred to Washington. The result was that the PMU was able to process 120 IDA procurement packages during the same time they processed 30 of the Bank’s.

5.1.3 The use of private firms for financial and technical quarterly audits ensures the streamlining or adjustment of procurement and payment procedures without sacrificing proper oversight of the expenditure of public funds

● The role of the independent audit firm played a pivotal and positive role in the professional management of both EIRP and ENEP. Although they were mandated by the boards of the Bank in approving the loan, these quarterly financial and technical audits were recognized by GOK as an important extra layer of project management supervision demonstrating GOK’s commitment to having an efficiently managed project. The audit firm was hired on a competitive basis and financed from the IDA loan. The PMU was able to rely on the technical audit reports to support their positions of quality control and later assisted the Bank Groups audit function.

5.1.4 Streamlined procurement and payment procedures, and sound public service contract management are necessary for a smooth implementation of an infrastructure rehabilitation project. They are easily replicable in other disaster or emergency situations.

● The streamlined procurement and payment procedures within the GOK systems in order to meet the agreed upon implementation schedules done for the overarching ENEP was good. It allowed GOK to reduce the turn-around time for the award on IDA contracts by an average of 50%.

5. The prompt responsiveness of donors, both IDA and the Bank Group, is an indication of how disaster relief rehabilitation should be approached. 6. Adequate recognition of Country and potential project risks is essential to a reduction in implementation delays. 7. The active participation of communities during the implementation stages of post-disaster rehabilitation projects is a prerequisite for projects such as the EIRP. 8. Unrealistic disbursement deadlines and lack of coordination of such deadlines with co-financiers could create opportunity for the underutilisation of project funds. 9. Sustainability of rehabilitated disaster facilities is an issue which should be resolved upfront with adequate transitional arrangements for the rehabilitated facilities. For example, local authorities signed over the completion certificates and are paying their maintenance needs for those roads through the RMLF mechanism.

20

5.2 Recommendations and Follow-up 5.2.1 For the Borrower 5.2.1.1 Sector reforms, Disaster policy and improvement and effectiveness of GOK organisations involved in emergency operations should take into account the sustainability issue surrounding rehabilitated facilities. 5.2.1.2 The high calibre of experts assembled in the PMU and PSC but drawn from line ministries and put outside the organisational structure of GOK (President’s Office) is not to be ‘ordinarily’ replicated. It may be suitable only in cases of emergencies or evidence of mismanagement in public service delivery. 5.2.2 For the Bank 5.2.2.1 The Bank needs to develop an alternative project design with flexible rules and implementation policies that would fall between the current emergency policy and the standard lending instrument for projects such as the rehabilitation of facilities after a disaster. 5.2.2.2 The use of quarterly or bi-annual technical, financial and management audits was very productive and useful for this project. As such, the Bank should consider putting this in place for all projects financed in RMCs. 5.2.2.3 For construction projects, the Bank should ensure that Project Management Units (PMUs) are structured with adequate technical staff to check, verify and challenge the technical consultants if any, on documentation and accuracy of conditions at project sites. This will help avoid changes in project scope and minimize project variations. 5.2.2.4 Efforts should be made for disbursement timelines to be more realistic to the Country situations in order to avoid large numbers of extensions on bank financed projects, especially when co-financiers are involved. 5.2.2.5 The Bank should do all it can to facilitate the establishment of M&E functions at different levels (sector or line ministry, Central Disaster agency, local authorities, etc) in country in order for real-time tracking of achieved results and potential effects of the project on the communities and institutions. 5.2.2.6 The conclusions and lessons from the EIRP and ENEP should be considered for application on rehabilitation projects in Fragile States.

Annex 1 Page 1 of 2

PROJECT MPDE MATRIX – KENYA: EL NINO INFRASTRUCTURE REHABILITATION PROJECT

Narrative Summary (NS) Verifiable Indicators (OVI) Means of Verification (MOV) Important Assumptions

Goal: 1.To provide clean water and sanitation services to all Kenyans 2.Improve the efficiency of the road transport systems

1.1 Improved water and sanitation coverage statistics 1.2 Lower incidence of water related diseases and associated health costs. 2.1 Lower vehicle maintenance costs. 2.2 Improved road access in area. 2.3 Easier transportation of goods.

1.1 Central statistics Division Reports

(Goal to supergoal): 1.Government ensures sustained investments in the sectors 2. Government implements sector reforms.

Appraisal Actual / PPER Projects Objective: 1. To restore vital socio-economic infrastructure to counteract the effects of the El Nino.

1.1 Water, sanitation and roads infrastructure back in service and benefiting the people by February 2000.

1.1 Infrastructure rehabilitated by December 2001 with the following impacts by September 2003: a) Coverage increased by 25 to 55% ; b) Distance to source and collection time decreased by 60%; c) Water borne diseases decreased by over 35%

1.1 Final reports of the

completed works. 1.2 Consultants’ final

reports. 1.3 Quarterly and Annual

Audit Reports. 1.4 Bi-monthly Progress

Reports. 1.5 Project Completion

Report.

(Project Objective to Goal): 1. Government remains committed to improving water and sanitation and transportation needs of the people

Outputs: 1. Water supply for 33 towns/villages in 13 districts of 3 provinces restored to pre-El Nino levels. 2. Water treatment chemicals procured and utilized. 3. Hydromet equipment replaced. National water resources monitoring network restored. 4. 405 km of 74 roads in 8 districts of 2 provinces rehabilitated.

1.1 4 River intakes rehabilitated, 17 reconstructed and protected; 41 km of transmission and distribution pipelines, 3 elevated storage tanks, 3 modular water treatment plants constructed; 3 pump houses rehabilitated and pumping equipment, generators and electric panels replaced in 33 towns, 13 districts of 3 provinces. 2.1 About 390 tons of Alum and 124 tons of TCI provided for water treatment 3.1 205 no. Staff Gauges, 200 no. Poles and Struts, and 12 no. Current meters procured and installed. 4.1 405 km of 2 no. class A roads, 9 no. Class C roads, 21 no. Class d roads, 31 no. Class E roads, 11 no. rural access roads, 1 no. Class L road and 1 no. CD road rehabilitated.

1.1 3 river intakes and 1 lake intake rehabilitated, 17 river intakes reconstructed and protected, 6 new spring sources, 6 boreholes, and 4 wells constructed and fitted with pumps; 41 km of transmission and distribution pipelines relayed, 3 elevated storage tanks, 3 modular water treatment plants constructed, 3 pump houses rehabilitated and pumping equipment, generators and electric panels replaced in 36 water facilities in 33 towns, 13 districts of 3 provinces. 2.1 390 tons of alum and 124 tons of Tropical chloride of lime (TCI) provided; 3.1 239 staff gauges, 200 poles and struts and 12 current meters in the national water resources monitoring network replaced; 4.1 464.7 km of 3 no. class C roads, 17 no. class D roads, and 8 no. class E roads. Impacts: a) 35% and 45% reduction in transportation costs of farm produce and inputs; b) 5-33% reduction in vehicle operating costs; c) 10-50% reduction in commuter fares; d) 10-50% increase in transportation revenue;

1.1 Final reports of the

completed works 1.2 Quarterly and Annual

Audit Reports 1.3 Bi-monthly Progress

Reports. 1.4 Project Completion

Report 1.5 Direct observations at

evaluation

(Output to Project Objective): 1. GoK implements its strategies for operation and maintenance of water, sanitation and roads infrastructure

Annex 1 Page 2 of 2

e) 25-70% reduction in travel time; f) up to 50% reduction in school lateness

Activities: 1. Preparation of detailed designs, cost estimates and bidding documents and approval by the Bank. 2. Secondment of additional local staff to PMU. 3. Procurement of the goods and works;

1. Inputs ( million UA) Appraisal 1.1 Chemicals 0.15 1.2 Hydro. Equipt. 0.19 1.3 Water Works 4.86 1.4 Road Works 7.55 1.5 Consultancy 1.55 Total 14.30 2. Resources: ADF 11.52 IDA 1.35 GoK 1.43 Total 14.30

Actual

0.14

0.15

3.93

4.09

1.70

10.01

7.09

1.05

1.87

10.01

1.1 Appraisal estimates 1.2 Approved Government

Budgets 1.3 Progress reports 1.4 Supervision reports 1.5 Technical, Financial and

Management Audits 1.6 Disbursement records 1.7 PCR

(Activity to Output): 1. ENEP project will finance preparation of detailed designs, tender documents, supervision of works, and audits. 2. All procurement action will be implemented on time. 3. GoK will provide local counterpart funding in timely manner, processing and payment of invoices will not be delayed. 4. Loan effectiveness is not delayed. 5. Implementation schedule is adhered to.

Annex 2

INSTITUTIONAL ARRANGEMENTS (FOR FOLLOW-UP) AT TIME OF PPER - ROADS

Road projects and type

Operation structure and Programmes

Financial provision for maintenance of projects

Administration provision for continued operation

3No. Class C roads

EIRP through the District Roads Committee (DRC)

24% of the Fuel Levy funds collected to be issued to the District Roads Committees involved in sustenance.

The fund is continuous hence so long as the district Roads Committee includes these roads in their annual maintenance programmes; the maintenance operation will be sustainable.

17No. Class D roads

EIRP through the District Roads Committee (DRC)

16% of the Fuel Levy funds collected to be issued to the District Roads Committees involved at a rate of Kshs. 5 million per constituency.

The fund is continuous hence so long as the district Roads Committee includes these roads in their annual maintenance programmes; the maintenance operation will be sustainable.

8No. Class E roads

EIRP through the District Roads Committee (DRC)

16% of the Fuel Levy funds collected to be issued to the District Roads Committees involved at a rate of Kshs. 5 million per constituency.

The fund is continuous hence so long as the district Roads Committee includes these roads in their annual maintenance programmes; the maintenance operation will be sustainable.

Other comments

Responsibility for construction, maintenance and ownership of roads in Kenya lies with the Government. Compensation for the land on which such roads were constructed was made to communities, thus alienating them from any further involvement in roads maintenance. However, the communities are becoming increasingly aware of the need to conserve and sustain roads.

Annex 3

INSTITUTIONAL ARRANGEMENTS (FOR FOLLOW-UP) AT TIME OF PPER - WATER Water projects ownership

Operation structure and programmes

Financial provision for maintenance of projects.

Administration provision for continued operation

GOK The GOK Operation Structure requires that there exists an enhanced participation by various water users. The GOK is also putting in place appropriate policies and regulations.

Financial provision is through 1. Budget provisions. 2. Water sales. 3. Encouragement of private sector participation. 4. Cost sharing.

The administration at the district level technical officers in the water supplies.

Local Authorities

Local Authorities have employed technical staff for operations of water projects. The GOK is also supporting Local Authorities to review their procedures and attitude towards operation.

Financial provision is through 1. Budget provisions. 2. Water sales. 3. Private sector participation.

1. Local Authorities have plans to hand over some water supplies to private companies. 2. Local Authorities have improved their technical personnel for better operations.

Local Communities

The communities form committees who are sensitized about principles of good management by equipping them with the necessary knowledge and skills through local training programmes.

Community projects are maintained through 1. Cost sharing. 2. Water sales 3. Membership contributions. 4. Private sector participation. 5. NGOS

The GOK has undertaken to continuously train the communities on issues related to operation and maintenance. The district level assists the community in major operations.

Other Comments

The Ministry concerned with Water apportionment and management is putting in place structures to involve water users/beneficiaries at all stages of the water supply development process for eventual take over and ownership. (As regards the present ownership of water supply projects, the Baseline Study done on Monitoring and Evaluation 35% of ADB/IDA financial projects revealed that communities own and manage 40% of the water projects sampled.) The Department of Water Development will eventually prepare the local communities on good water management and operation principles.

Annex 4 Page 1 of 3

EVALUATION CRITERIA

No. Component Indicators Score (1 to 4)

REMARKS

1 Relevance and quality at entry assessment

3

Satisfactory

i) Consistency with country overall development strategy

3 The EIRP was in line with the sectoral strategies in the water and roads sectors. The project also forms the basis of the new disaster management policy. These strategies are part of the Countries overall development strategy

ii) Consistency with Bank Assistance Strategy

3 The EIRP fulfilled the conditions for the intervention as stated in the Bank’s assistance policy

iii) Macro-economic Policy 3 The project addressed the macro economic policies of Kenya with additional employment opportunities in the affected districts particularly in the short-term, improved the road transport network and shorter water collection times.

iv) Sector Policy 3 The project improved the efficiency of the transport system as well as the provision of safe and accessible water supply, all of which contribute indirectly to economic growth.

v) Public Policy Reform 3 Procurement and management process methodologies that were tried out in the ENEP and EIRP have been incorporated into the activities of GOK ministries.

vi) Poverty reduction NA

vii) Social and Gender equality NA

viii) Environmental Concerns 3 The project fulfilled its environmental mandate and there were no known adverse fallouts from the rehabilitation exercises in either sector

ix) Human Resources Development 3 In the short-term, the project provided employment and much needed skills improvement to the work force involved in the construction. In the longer-term, staff seconded to the PMU took back with them new skills and now assist in the implementation of new procurement and project management techniques.

x) Institutional Development 3

Enhanced procurement methods and project management techniques now being used in the GOK departments are improving their efficiencies

xi) Private Sector Development 3 No extensive involvement, but the insistence of the

Annex 4 Page 2 of 3

No. Component Indicators Score (1 to 4)

REMARKS

PMU on good performance and prompt termination of contracts for poor performance has helped to raise the standard of delivery of private sector contractors. The EIRP also enhanced their capacities.

xii) Regional Economic Integration NA

xiii) Quality at entry (including level of demands, complexity, risks, etc.)

3 Mostly adequate preparation and recognition of risks helped to reduce the perennial problem of implementation delays associated with Bank Group projects in Kenya.

2 Achievement of objectives & Outcomes (“Efficacy”)

2.7(≈3) Satisfactory

i) - Water Sector Policy goal of water supply of good quality in sufficient quantity and in close proximity of the population

- Road Sector Policy goal to improve the efficiency of Road Transport Systems

3 The project did improve the road network in a short time span. It contributed significantly to the realization of the water sector policy on the provision of portable water within reach of a majority of the populace.

ii) Physical objectives (outputs) 3 The outputs in the roads and water and sanitation facilities that were repaired were good and in the water sector, the targets were exceeded.

iii) Financial Objective 2 The proceeds of the loan were used in accordance with the conditions of the loan agreements and with due attention to economy and efficiency. Initial cost estimates were mostly grossly over budget. GOK also paid an additional 8.7% more than budgeted towards the EIRP

iv) Institutional Development Objectives

National, Sectoral and Executing Agencies Capacity

3 EIRP and ENEP created the enabling capacity for staff from ministries to acquire valuable experience in the administration and handling of emergency and other projects within their respective Ministries in the future.

v) Social Objectives and Targets 3 IDA impact studies indicate an improvement in social impacts on the population

vi)

Environmental Objectives

3 Absence of baseline data, although the project reduced the possibility of future flooding in affected areas as well as reducing the prevalence of water borne diseases by improving access to safe water supply.

vii) Private Sector Development Objectives

3

Improvement in road transport has greatly enhanced economic activity particularly in the restoration of transport links for agricultural produce.

Annex 4 Page 3 of 3

No. Component Indicators Score (1 to 4)

REMARKS

3 Efficiency 3 Satisfactory

i) Cost-Effectiveness Indicators 3

EIRP was cost effective as only 61.57% of the original estimate was utilised.

4 Institutional Development Impact (ID)

3 Satisfactory

i) National Capacity 3 More streamlined procurement methods and efficient project management processes of the line ministries involved with the EIRP

ii) Executing Agency

3 New emergency policies and better coordination of relevant departments being planned.

5 Sustainability 2 Unsatisfactory

i) Technical Soundness (including O&M facilitation, availability of recurrent funding)

2 Sustainability is more effective by preventive/routine maintenance rather than repair as is now practiced. Recurrent funding is not assured.

ii) Continued Borrower Commitment (including legal/regulatory framework)

2

Degrees of negligence was observed even for simple operations like drainage maintenance

iii) Socio-political Support (including beneficiary participation)

2 Beneficiary support is high but in practice ineffective. Policies are in place for possible future improvement.

iv) Economic Viability 2 Not assured

v) Financial Viability 2

This not assured as current and potential funds fall short of that required

vi) Institutional arrangements (organisational and management)

2

Because of other problems it is uncertain whether new institutional arrangements would improve sustainability

vii) Environmental viability 2 Sustainable for the water sector, but for the roads, the lack of repair and maintenance could engender environmental problems such as flooding.

viii) Resilience to exogenous Factors 2 Absence of coherence and efficiency reduces resilience to other external factors.

6 Aggregate Performance Indicator

3 Satisfactory

Annex 5

BORROWER PERFORMANCE

Component Indicators Score (1 to 4)

Remarks

1. Quality of Preparation:

- Ownership, Beneficiaries participation

- Government commitment

- Macroeconomic & Sector policies

- Institutional Arrangements (counterpart funding)

3

3

3

3

Satisfactory

Satisfactory, see 4.6 etc.

Straight forward and achievable

Satisfactory

2. Quality of Implementation - Assignment of Key Staff - Managerial Performance of Executing

Agency - Use of Technical Assistance - Mid-Course Adjustments - Adherence to time schedule & costs

3 3 3 3 2

Initial problems later resolved satisfactorily Satisfactory Satisfactory Mid-Course adjustments were adequately handled although as a result, time schedule and costs could not be adhered to.

3. Compliance with Covenants 3 Generally satisfactory after initial problems were resolved

4. Adequacy of Monitoring & Evaluation and Reporting

3 In regular intervals and Borrower PCR was promptly produced at the end of the project.

Overall Borrower Performance 2.9 (≈3) Satisfactory

Annex 6 Page 1 of 2

BANK PERFORMANCE

Component Indicators Score (1 to 4)

Remarks

At Identification - Project consistency with government

development strategy - Project consistency with Bank strategy

for country - Involvement of government/beneficiaries - Project Innovativeness

3 3 3 3

The Bank’s response to El Nino was triggered by GOK request to improve economic activity in affected areas. Yes and satisfactory The Bank incorporated GOK disaster committee assessments into appraisal Citing the PMU within the OP but with independent control and with the involvement of the private sector.

At Preparation of Project

- Relevance of Bank support

- Timely Bank support

3

3

Relevant and timely

At appraisal

- Quality of technical, economic, financial, institutional, social, environmental analyses

- Relevance of Conditions and covenants

- Adequacy of lending instrument

- Financial package adequacy

- Quality of co-ordination with other donors/partners

- Implementation & Supervision plans (including performance indicators, M&E requirements)

3

2

3

3

3

3

Mostly satisfactory except for over estimations

Not all were relevant for emergency situation of the project. See 3.1

Adequate

Adequate, although grossly over estimated leading to substantial cancellation

Fairly satisfactory although could have been improved through better coordination of disbursement time lines

Satisfactory

At Supervision - Adequacy of Bank staff (skills, time &

continuity) - Problem solving - Responsiveness to changing conditions

3 3 3

Mostly adequate, although could have been improved by a better skills mix for supervision missions Satisfactory Satisfactory, although required better

Annex 6 Page 2 of 2

- Adequacy of Follow up on

recommendations/decisions - Realistic ratings at CPPR/APPR - Attention to likely social development

impact - Attention to sustainability issues

3 NA 3 2

coordination of disbursement issues Adequate NA Satisfactory Unsatisfactory, as PCR rated sustainability as satisfactory at a time when it was obvious that there was going to be sustainability problems.

Overall Assessment of Bank Performance 2.9 (≈ 3) Satisfactory

Annex 7 Page 1 of 2

FACTORS AFFECTING IMPLMENTATION PERFORMANCE AND OUTCOME

Factors affecting positively (+) or negatively (-) the implementation and achievements of major objectives Factors Substantial Partial Negligible N/A Remarks 1. Not subject to Government Control

1.1 World Market prices ● 1.2 Natural events + No new events during rehabilitation 1.3 Bank Performance + The Bank’s response and subsequent

supervision contributed to the success of the EIRP

1.4 Performance of contractors/consultants

- Though generally good, two sub-contracts were bad and threatened the success of the project

1.5 Civil war ● 2. Subject to Government Control

2.1 Macro policies ● 2.2 Sector policies + Straightforward sector policies

contributed to a good achievement of the objectives of the project

2.3 Government commitment

+ The GOK was keen and put all structures in place to ensure the EIRPs success

2.4 Appointment of key staff

+ Independent appointment of the Manager and other key staff

2.5 Counterpart funding + GOK was efficient in this area with prompt payments

2.6 Administrative capacity + Was good and was key to success 3. Subject to Executing Agency Control

3.1 Management + Time bound work programs, strict adherence to contract conditions and engineering supervision

3.2 Staffing + Both from the best of the public service and the private sector.

3.3 Use of technical assistance

- Problems of oversight in the review of specifications by TAs was partially responsible for two variation orders that could have derailed the project

3.4 Monitoring & Evaluation

+ Good M & E on the site of each sub-project in addition to PMU oversight

3.5 Beneficiary Participation

+ District committees involved in the selection of sites to be rehabilitated

4- Factors Affecting Implementation

4.1changes in project scope/scale/design

- Changes in project scale threatened the outcome of the project

4.2 Deficiency in estimating physical inputs, the base unit costs

- Poor estimations caused cost under-runs

4.3 Inadequacy of price/physical contingencies

- Poor estimations caused cost under-runs

Annex 7 Page 2 of 2

4.4 changes in exchange rates, in financial and institutional arrangements

+ The devaluation of the Kenyan Schilling enhanced the project cash flow

4.5 Unrealistic implementation schedule

- The Bank Group set timetables that were unachievable and did not adequately recognise the emergency nature of the project

4.6 quality of management including financial management

+ Qualified personnel used innovative procurement and other project management methods

4.7 Delays in selecting staff/consultants/ contractors and in receiving counterpart funds

- Initial delays in the selection of new project managers and for GOK to accept structure and procedure for selection of consulting firms.

4.8 Inefficient procurement and disbursement procedures

- Procedures were efficient

Annex 8

DOCUMENTS REVIEWED / CONSULTED 1. African Development Bank / OECD; African Economic Outlook, 2005/2006 2. African Development Fund; Proposal for an ADF Loan of UA 14.30 Million to finance “El Nino” Infrastructure

Rehabilitation Project, 9 September, 1998; ADF/EC/BD/WP/98/18 3. African Development Fund and Bank; Emergency Assistance Policy Guidelines, 11 August 1998;

ADF/BD/WP/98/41 4. African Development Fund; “El Nino” Infrastructure Rehabilitation Project, Project Completion Report, 20th August

2004, ADF/BD/IF/2004/131 5. Government of Kenya; “El Nino” Infrastructure Rehabilitation Project, Project Completion Report – Borrowers

Contribution; ADB Credit F/KEN/INF-REH/99/26 6. The World Bank; El Nino Emergency Project; Implementation Completion Report, 24th June 2002. 7. The World Bank; Staff Appraisal Report; Kenya Urban Transport Infrastructure Project, 03 January 1996; 8. Performance Contract (01/07/2005 to 30/06/2006) Ministry of Roads and Public Works 9. Road Sub-sector Reform Document 10. Brief on ADB Support to the Roads Sub-Sector 11. National Classified Roads Network Summary 12. Kenya Roads Board: Annual Public Records Programme (Financial year 2005/2006)

13. World Bank, ENEP Social Impact Assessment Report 14. M & E Socio-economic Impact Assessment Report 15. Kenya Roads Board: Annual Public Roads Programme (2005/2006) 16. Kenya Urban Transport Infrastructure Project – Procedures followed to implement contracts for KUTIP project 17. Financial Audit Report (EIRP) (10/07/03 – 31/12/03) – Price Waterhouse – Coopers. 18. Kenya Roads Board (KRB) – Strategic Plan 2003-2008 19. Kenya Gazette Supplement No. 107 – ACTS, 2002 – The Water Act 20. Legislative Supplement No. 38 – The Water Act (Plan of Transfer of water services Rules, 2005) 21. Draft Services provision Agreement between Lake Victoria South Water Services Board and Kericho Water and

Sanitation Company, Kenya. 22. A Handbook on the Water Sector Reforms, Kenya. 23. National Disaster Management Policy – 11/2004, Office of the President, Kenya.