Document of The World Bank Report No: ICR00003161 ...documents.worldbank.org/curated/en/794691468062663418/...Document of The World Bank Report No: ICR00003161 IMPLEMENTATION COMPLETION

Document of

The World Bank

Report No: ICR00003161

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(IDA-H3670)

ON A

GRANT

IN THE AMOUNT OF SDR 31.3 MILLION

(US$50 MILLION EQUIVALENT)

TO

NEPAL

FOR AN

EMERGENCY PEACE SUPPORT PROJECT

December 22, 2014

Social Protection and Labor Global Practice

Nepal, Bangladesh, Bhutan Country Cluster (SACBN)

South Asia Region

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CURRENCY EQUIVALENTS

(Exchange Rates Effective November 26, 2014)

Currency Unit = Nepalese Rupee (NPR)

NPR 1 = US$ 0.01

US$ 1.46 = SDR 1

FISCAL YEAR

July 16 – July 15

ABBREVIATIONS AND ACRONYMS

23PA 23 Point Agreement

BPOG Beneficiary Payment Operational Guidelines

CAP Conflict Affected Person

CPA Comprehensive Peace Agreement

CSO Civil Society Organization

DAO District Administration Office

DDC District Development Committee

EPSP Emergency Peace Support Project

ESES Employment and Self-Employment Services

FIM Field Implementation Manual

FM Financial Management

GAAP Governance and Accountability Action Plan

GON Government of Nepal

IDP Internally Displaced Person

LPC Local Peace Committee

MIS Management Information System

MOPR Ministry of Peace and Reconstruction

NGO Non-Government Organization

NPTF Nepal Peace Trust Fund

PD Project Document

PDO Project Development Objective

PMT Project Management Team

TTL Task Team Leader

UN United Nations

VDC Village Development Committee

Vice President: Annette Dixon

Country Director: Johannes Zutt

Sector Manager: Pablo Gottret

Project Team Leader: Yasuhiko Matsuda

ICR Team Leader: Thomas Walker

iii

NEPAL

Emergency Peace Support Project

CONTENTS

Data Sheet

A. Basic Information

B. Key Dates

C. Ratings Summary

D. Sector and Theme Codes

E. Bank Staff

F. Results Framework Analysis

G. Ratings of Project Performance in ISRs

H. Restructuring

I. Disbursement Graph

1. Project Context, Development Objectives and Design ............................................... 1

2. Key Factors Affecting Implementation and Outcomes .............................................. 7

3. Assessment of Outcomes .......................................................................................... 11

4. Assessment of Risk to Development Outcome ......................................................... 15

5. Assessment of Bank and Borrower Performance ..................................................... 15

6. Lessons Learned ....................................................................................................... 17

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 18

Annex 1. Project Costs and Financing .......................................................................... 19

Annex 2. Outputs by Component ................................................................................. 20

Annex 3. Economic and Financial Analysis ................................................................. 23

Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 26

Annex 5. Beneficiary Survey Results ........................................................................... 29

Annex 6. Stakeholder Workshop Report and Results ................................................... 33

Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 34

Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 36

Annex 9. List of Supporting Documents ...................................................................... 37

Annex 10. Original and Revised Project Components (at First Restructuring) ............ 38

MAP

iv

A. Basic Information

Country: Nepal Project Name: Nepal: Peace Support

Project

Project ID: P110762 L/C/TF Number(s): IDA-H3670

ICR Date: 12/22/2014 ICR Type: Core ICR

Lending Instrument: ERL Borrower: GOVERNMENT OF

NEPAL

Original Total

Commitment: XDR 31.30M Disbursed Amount: XDR 22.41M

Revised Amount: XDR 22.85M

Environmental Category: C

Implementing Agencies: Ministry of Peace and Reconstruction

Cofinanciers and Other External Partners: N.A.

B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 03/12/2008 Effectiveness: 09/19/2008 09/19/2008

Appraisal: 02/28/2008 Restructuring(s):

06/02/2010

06/11/2012

01/31/2014

Approval: 05/06/2008 Mid-term Review: 06/21/2011 09/21/2011

Closing: 06/30/2011 06/30/2014

C. Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Moderately Satisfactory

Risk to Development Outcome: Low or Negligible

Bank Performance: Moderately Satisfactory

Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)

Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory

Quality of Supervision: Satisfactory Implementing

Agency/Agencies: Moderately Satisfactory

Overall Bank

Performance: Moderately Satisfactory

Overall Borrower

Performance: Moderately Satisfactory

v

C.3 Quality at Entry and Implementation Performance Indicators

Implementation

Performance Indicators

QAG Assessments

(if any) Rating

Potential Problem Project

at any time (Yes/No): Yes

Quality at Entry

(QAE): None

Problem Project at any

time (Yes/No): Yes

Quality of

Supervision (QSA): None

DO rating before

Closing/Inactive status:

Moderately

Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Central government administration 4 4

General public administration sector 2 2

Other social services 94 94

Theme Code (as % of total Bank financing)

Conflict prevention and post-conflict reconstruction 67 67

Social safety nets 33 33

E. Bank Staff

Positions At ICR At Approval

Vice President: Annette Dixon Praful C. Patel

Country Director: Johannes C.M. Zutt Susan G. Goldmark

Practice

Manager/Manager: Pablo Gottret Mansoora Rashid

Project Team Leader: Yasuhiko Matsuda Philip B. O'Keefe

ICR Team Leader: Thomas Walker

ICR Primary Author: J. Roger Pearson

F. Results Framework Analysis

Project Development Objectives The overall objective of the project is to contribute to the consolidation of the peace

process in Nepal by supporting: (i) Government to meet commitments to selected groups

affected by the conflict, including families of those killed as a result of the conflict,

conflict-related widows and orphans, disabled people, and individual Maoists in

cantonments; (ii) ensuring transparency in implementation of benefits under the Project

for the conflict-affected groups, including the Maoists in cantonments; and (iii)

vi

strengthening of key institutions, which are tasked with policy and implementation

functions in peace building, reintegration and rehabilitation.

Revised Project Development Objectives The overall objective of the project is to contribute to the peace process by providing

interim cash transfers and services to eligible conflict affected groups and by increasing

transparency and accountability in the delivery of these benefits.

(a) PDO Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised Target

Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1 : At least 95% (of estimated eligible 14,800 families of the deceased and 4,700

widows) receive cash payments following the project operational guidelines.

Value

quantitative or

Qualitative)

Zero (no receipt of

benefits)

Zero (no receipt of

benefits)

At least 95 %

identified eligible

families of the

deceased receive cash

payments;

At least 95 %

identified eligible

widows receive cash

payments

At least 95 % (of

estimated eligible

14,800 families of

the deceased

receive cash

payments;

At least 4,700

widows receive

cash payments

14,309 (96.7%)

families of the

deceased have

received cash

payments.

4,568 (97%)

widows have

received cash

payments.

Date achieved 06/30/2014

Comments

(incl. %

achievement)

Introduced with 2010 Restructuring, and modified with 2012 Restructuring.

102% overachieved.

Indicator 2 :

At least 90% of eligible conflict-affected widows, orphans, those disabled in

the conflict, families of those killed in the conflict, families of the

disappeared, Internally Displaced Persons (IDPs), and those abducted

during the conflict, who seek skills and employability rehabilitation services

receive them according to the project operational guidelines; among which

at least 30% are female CAPs.

Value

quantitative or

Qualitative)

Zero (no services

provided)

90% of eligible

beneficiaries to

receive skills and

employability

rehabilitation

services.

90% of eligible

beneficiaries to

receive skills and

employability

rehabilitation

services, thereof

30% females;

99% (14,770

beneficiaries out of

eligible 14,800

families enrolled);

thereof 50%

females (7,347 of

total enrolled).


Comments

(incl. %

achievement)


110% overachieved. The number reported refers to the number of beneficiaries

who actually enrolled in ESES in the pilot phase and phase I. The number trained

exceeds the number of eligible families in the districts where the training was

vii


Original Target

Values (from

approval

documents)

Formally

Revised Target

Values

Actual Value

Achieved at

Completion or

Target Years

offered, which suggests that the training exceeded its coverage target in these

districts.

Indicator 3 : At least 90% for cash benefits recipients and 80% for rehabilitation services

recipients are satisfied with the delivery process.

Zero (no receipt of

benefits)

Zero (no receipt of

benefits)

Satisfaction rate 90%

(cash benefits)

recipients;

Satisfaction rate 90%

(rehabilitation

services) recipients

Satisfaction rate

90% (cash

benefits)

recipients;

Satisfaction rate

80%

(rehabilitation

services)

recipients

Satisfaction rate

91% (cash

benefits),

Satisfaction rate

79% (rehabilitation

services) recipients.


Comments

(incl. %

achievement)


101% overachieved for recipients of cash benefits: At the first third party

monitoring exercise, 91% of the cash benefit recipients were satisfied with the

cash benefits process.

Achieved (99%) for recipients of rehabilitation services: In the second TPM

survey, 79% of beneficiaries reported satisfaction.

Indicator 4:

Summary payment information to families of the deceased and widows is

available on the MOPR website and district disclosure boards and updated

quarterly.

No website

payment

information.

Summary payment

information to

families of the

deceased and widows

is available on the

MOPR website and

district disclosure

boards and updated

quarterly.

Website fully

operational and

disclosure boards

functional.


Introduced with 2010 Restructuring

100% achieved. Records and information of the deceased and widows entered on

the MIS and available online on Ministry's and project's websites. Disclosure

boards are functional.

Indicator 5 : Grievance mechanism operational.

Value

quantitative or

Qualitative)

No grievance

mechanism.

As above. Fully functional

grievance

mechanism in place

and operational


viii


Original Target

Values (from

approval

documents)

Formally

Revised Target

Values

Actual Value

Achieved at

Completion or

Target Years

Comments

(incl. %

achievement)

Introduced with 2010 Restructuring.

Target 100% achieved. Two officers were designated as grievance focal points.

A grievance handling MIS system with toll-free hotline was made operational for

handling grievances.

Original PDO

Indicator 1:

Participation of parties to the peace process in agreed upon structures and

mechanisms addressing the peace at central and district levels.

Value

quantitative or

Qualitative)

(i) NPTF is peace

body in Nepal, and

Peace Commission

and/or 146

Committee do not

exist; and (ii) local

peace committees

in some districts

only

(i) Peace Commission

and/or Article 146

Committee

established and

functioning; and (ii)

local peace

committees active in

majority of Nepal

districts.

Article 146

committee for

resolving situation

of Maoists in

cantonments was

formed but has not

met as regularly as

expected

Date achieved As at 05/27/2009

Comments

(incl. %

achievement)

Assumed dropped with 2010 Restructuring (and not measured following the

restructuring).

Original PDO

Indicator 2 :

Number of specific agreements of the CPA and 23 Point Agreement adhered

to.

Value

quantitative or

Qualitative)

Zero (in sense that

the four specific

articles of the 23

Point Agreement

referred to in PDO2

have not been met.)

Points 6, 8, 11 and 12

under the 23 Point

Agreement

implemented

Very limited

progress on points

6, 8, 11 and 12 in

the 23PA, though

political discussions

and technical

preparations for

implementation of

the points is

underway.


Comments

(incl. %

achievement)

Assumed dropped with 2010 Restructuring (and not measured following the

restructuring).

ix

(b) Intermediate Outcome Indicator(s)


Original Target

Values (from

approval

documents)

Formally

Revised Target

Values

Actual Value

Achieved at

Completion or

Target Years

IO Indicator 1 :

Consultations for development of guidelines for rehabilitation services held

with stakeholders (beneficiaries, civil society and donors and other line

ministries).

Value

quantitative or

Qualitative)

None As above 11 consultations

held on the final

guidelines


Comments

(incl. %

achievement)


Several broad consultations held in the past year with stakeholders. Final draft

guidelines were shared with key stakeholders and inputs collected (Jan 2011)

IO Indicator 2 :

Operational guidelines for services to conflict affected groups endorsed by

NPTF Secretariat.

Value

quantitative or

Qualitative)

No guidelines Operational

guidelines for

services to conflict

affected groups

endorsed by NPTF

Secretariat.

Operational

guidelines for

services to conflict

affected groups

endorsed by NPTF

Secretariat


Comments

(incl. %

achievement)


Guidelines for employment services to conflict affected groups approved and

endorsed by NPTF Secretariat (Jan 2010)

IO Indicator 3 :

Guidelines/directives for families of the deceased and widows payments

endorsed by NPTF Secretariat.

Value

quantitative or

Qualitative)

No guidelines Guidelines/directives

for families of the

deceased and widows

payments endorsed

by NPTF Secretariat.

Guidelines/directiv

es for families of

the deceased and

widows payments

endorsed by NPTF

Secretariat


Comments

(incl. %

achievement)


BPOG for widows approved and endorsed by NPTF Secretariat (21 Feb 2011)

IO Indicator 4 :

MOPR communication strategy developed and deployed.

Value

quantitative or

No strategy MOPR

communication

MOPR

communication

x


Original Target

Values (from

approval

documents)

Formally

Revised Target

Values

Actual Value

Achieved at

Completion or

Target Years

Qualitative) strategy developed

and deployed

strategy developed

and deployed


Comments

(incl. %

achievement)


Outreach strategy for ESES approved by MOPR.

Brochures & Pamphlets prepared by IOM for outreaching to beneficiaries

distributed through service providers, LPCs, and other local level stakeholders.

IO Indicator 5 :

Beneficiary Assessments conducted.

Value

quantitative or

Qualitative)

None conducted

Two Beneficiary

Assessments

completed

At least two

Beneficiary

Assessments

completed

Two beneficiary

assessments

completed.


Comments

(incl. %

achievement)


First Beneficiary Satisfaction Survey (BSS) conducted in 14 districts. Second

BSS conducted in 10 other districts. The BSS were conducted jointly with the

TPM (see indicator 10 below).

IO Indicator 6 :

Social audits conducted.

Value

quantitative or

Qualitative)

No social audit

conducted

Two social audits

conducted

At least two

social audit

exercises

completed

First Social Audit

conducted in 5

districts. Second

social audit

conducted in 6

districts.


Comments

(incl. %

achievement)


The social audit covered 20% of deceased families and widows in the selected

districts. Additionally, district level reviews, FGDs from each sampling district

and Key Informant Interviews (KIIs) were conducted.

IO Indicator 7 :

MIS system operational.

Value

quantitative or

Qualitative)

No central MIS MIS system core

elements operational

MIS for ESES

completed and in

use


Comments

(incl. %

achievement)


MIS modules for payment and training were fully operational by the end of the

project. Modules are also being developed for other MOPR programs.

IO Indicator 8 :

Grievance/complaints mechanism introduced and staffed

Value No Basic Grievance/compl Grievance/complai

xi


Original Target

Values (from

approval

documents)

Formally

Revised Target

Values

Actual Value

Achieved at

Completion or

Target Years

quantitative or

Qualitative)

grievance/complai

nts mechanism

grievance/complaints

mechanism

introduced with staff

assigned

aints mechanism

fully functional

for interim cash

transfers and

employment

services

nts mechanism

functional


Comments

(incl. %

achievement)


Target achieved, with 2 officers designated as grievance focal points. A

grievance handling MIS system with toll-free hotline was made operational for

handling grievances.

IO Indicator 9 :

Number of disclosure boards established

Value

quantitative or

Qualitative)

No disclosure

boards Number of ESES

locations establish

disclosure boards

At least 70% of

planned

disclosure boards

in place.

Use of the

disclosure boards at

DAOs and DDCs:

100% in place


Comments

(incl. %

achievement)

Introduced with 2010 Restructuring, and modified with 2012 Restructuring..

IO Indicator

10 :

Value

quantitative or

Qualitative)

No independent

monitoring Third party

monitoring

conducted annually

At least 3 third

party monitoring

[exercises]

conducted

Annual third party

monitoring was

conducted, 3 in all.


Comments

(incl. %

achievement)


Interim third party payment assessment completed (April 2010) Third Party

Monitoring (TPM) and Beneficiary Satisfaction Survey (BSS) conducted in 14

districts (February 2012). Project’s ESES component is being independently

monitored through Citizen Action for Results, Transparency, and Accountability

(CARTA) Program by HELVETAS Nepal mobilizing national CSOs. Second

TPM & BSS for additional 10 districts completed (June 2014).

IO Indicator

11 :

Monitoring and evaluation plan developed

Value

quantitative or

Qualitative)

No monitoring and

evaluation plan

Monitoring and

Evaluation plan

developed

Project

Monitoring and

Evaluation Plan

extends to MOPR

Monitoring and

M&E plan

approved by

MOPR.

xii


Original Target

Values (from

approval

documents)

Formally

Revised Target

Values

Actual Value

Achieved at

Completion or

Target Years

Evaluation.


Comments

(incl. %

achievement)


Original

IO Indicator 1 : Reduction in cease-fire violations

Value

quantitative or

Qualitative)

N.A. N.A. N.A.

Date achieved

Comments

(incl. %

achievement)

Not reported.

Original

IO Indicator 2 :

Level of satisfaction with payments (deceased families, community

members, Maoists in cantonments)

Value

quantitative or

Qualitative)

There is no

baseline value for

Maoists in

cantonments, as

this can only be

done on a recall

basis subsequently.

Similarly, for

families with the

one-time payment.

Majority of Maoists

in cantonments

(19,602) and families

of conflict victims

(14,538) satisfied

with payment

adequacy against

GoN guidelines and

timeliness

Discussions

ongoing on

mechanisms for

measuring

satisfaction among

different client

groups


Comments

(incl. %

achievement)

Dropped with 2010 Restructuring.

Original

IO Indicator 3 : Summary payment information available for public review

Value

quantitative or

Qualitative)

No payment

information

publically

available

All payment data for

all groups available to

public, subject to

confidentiality needs

Payments to

Maoists initiated

and summary

information being

loaded on Ministry

website.


Comments

(incl. %

achievement)


Original

IO Indicator 4 : Unqualified special audit reports on cash payments

xiii


Original Target

Values (from

approval

documents)

Formally

Revised Target

Values

Actual Value

Achieved at

Completion or

Target Years

Value

quantitative or

Qualitative)

No such audits

conducted

All audits unqualified

or qualifications

reflecting only minor

issues or within

threshold of "non-

material"

No audit yet

conducted or due


Comments

(incl. %

achievement)


Original

IO Indicator 5 :

Medium term strategy for reintegration of other conflict affected

populations defined.

Value

quantitative or

Qualitative)

No strategy

existing

Strategy developed by

GoN and adopted

with respect to major

categories of conflict

affected-groups for

whom reintegration

support warranted

None to date but

TOR under

discussion and

Bank technical

support requested


Comments

(incl. %

achievement)


Original IO

Indicator 6 :

Peace Commission constituted and operational1 and agreed multi-party

mechanism in place pending PC formation.

Value

quantitative or

Qualitative)

National

Commission not

established, 24

LPCs established,

some considered

functional

National Commission

functioning and

reviewing key issues

regarding peace, 75

LPCs up, running and

considered effective

National

Commission not

established and

LPCs remain

partially effective


Comments

(incl. %

achievement)


Original IO

Indicator 7:

Peace Ministry executing strategy formulation and coordination of peace

initiatives.

Value N.A. N.A. N.A.

Date achieved

Comments Dropped with 2010 Restructuring.

1 Established with office and secretariat, multi-party membership and meeting regularly as per Cabinet

guidance, providing formal policy guidance to the Ministry of Peace and Reconstruction and other relevant

peace institutions, fulfilling TORs.

xiv


Original Target

Values (from

approval

documents)

Formally

Revised Target

Values

Actual Value

Achieved at

Completion or

Target Years

(incl. %

achievement)

Original IO

Indicator 8:

Regular and effective2 coordination between Ministry and relevant

organizations at center & districts.


Date achieved

Comments

(incl. %

achievement)


Original IO

Indicator 9: Project management rated satisfactory


Date achieved

Comments

(incl. %

achievement)


2 Regular to be defined in relevant coordination body TORs, etc., and effective to be measured by percent

of appropriate participation in coordinating meetings, proportion of key actions agreed upon undertaken,

etc.

xv

G. Ratings of Project Performance in ISRs

No. Date ISR

Archived DO IP

Actual

Disbursements

(USD millions)

1 11/30/2008 Satisfactory Satisfactory 0.00

2 06/23/2009 Moderately

Unsatisfactory

Moderately

Unsatisfactory 3.71


Unsatisfactory Moderately Satisfactory 18.93

4 06/30/2010 Moderately Satisfactory Moderately Satisfactory 19.59



Unsatisfactory

Moderately

Unsatisfactory 22.43







H. Restructuring

Restructuring

Date(s)

Board

Approved

PDO Change

ISR Ratings at

Restructuring

Amount

Disbursed at

Restructuring

in USD

millions

Reason for Restructuring &

Key Changes Made DO IP

05/17/2010 Y MU MS 19.59

Change of PDO; reallocation of

funds from Component 2 to

Component 1.

05/28/2012 N MS MS 24.06 Extension of closing date.

01/31/2014 N MS MS 29.05 Cancellation of remaining

funds.

If PDO and/or Key Outcome Targets were formally revised (approved by the original approving

body) enter ratings below:

Outcome Ratings

Against Original PDO/Targets Moderately Unsatisfactory

Against Formally Revised PDO/Targets Moderately Satisfactory

Overall (weighted) rating Moderately Satisfactory

xvi

I. Disbursement Profile

1

1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

1. Since the middle of the 20th Century, Nepal has undergone a challenging

transition toward greater openness and economic inclusion. This process has been

made more difficult by Nepal’s varied topography and its diversity of castes, ethnicities,

and linguistic groups. Formidable connectivity challenges have left many communities

economically and socially isolated from the rest of the country. The overthrow of the

autocratic Rana regime in 1950 was followed by a period of democratic politics under a

constitutional monarchy, but by 1960, the King had overthrown the government and

dissolved parliament, establishing in its place an authoritarian Panchayat (assembly)

system. Within this system, power remained concentrated in the monarchy and a handful

of elite, high-caste families from Kathmandu, an arrangement which benefited these

elites notably more than it did the poor. By 1990, the first Jana Andolan (people’s

movement) had forced the King to reinstate open national elections and curtail royal

power. But political parties failed to meet popular expectations for change, and patronage

under the Panchayat system continued.

2. In 1996, a rebel Maoist movement took advantage of popular

disenchantment and launched a rebellion. Drawing support from marginalized rural

groups that remained outside of the political system and were disillusioned with the state

as service provider, the Maoists set out to end the monarchy and establish a socialist

republic. The initial response of the police and army to the rebellion led to an escalation

of the conflict. The resulting civil war resulted in approximately 14,000 known deaths,

and many more disabled or ‘disappeared’. Up to 100,000 people were internally

displaced.

3. Following months of difficult negotiations between Maoist and government

groups, a fragile peace agreement was reached in November, 2006. The

Comprehensive Peace Agreement (CPA) aimed to develop a new constitution based on

principles of equity of gender, caste, ethnicity and religion. As a consequence of the CPA,

the country’s two-centuries-old monarchy was dissolved. Maoist and government groups

formed a seven party alliance to manage the country’s transition. An interim legislature

and power-sharing government was established, and a Constituent Assembly was elected

to draft a new constitution.

4. Under the ceasefire, the Maoists were disbanded and put into cantonments while processes were put in place for either their integration into the regular national

army, or demobilization. During this time, the Maoists were to be paid a regular

allowance. Another aspect of the peace settlement (later called the 23 Point Agreement,

or 23PA) was a commitment by the Government of Nepal (GON) to pay reparations to

conflict-affected persons (CAPs) and their families. These actions followed international

best practice, and were considered essential to sustain the level of trust and confidence

built during the peace process.

5. A Ministry of Peace and Reconstruction (MOPR) was established with

responsibility to implement all elements of the peace process, including: (i)

reconstruction of physical infrastructure damaged during the conflict; (ii) relief and

2

rehabilitation of conflict victims; and (iii) management of the cantonments. The Ministry

was also charged with oversight of a Truth and Reconciliation Commission to investigate

and document war crimes.

6. It was in this context that the GON requested World Bank assistance to

support the peace process. The intention was to help the GON build trust between

citizens and the State in the post-war environment, via support to the MOPR, and to

ensure that the transition to peace happened smoothly. To this end, the World Bank

agreed to co-finance the cost of allowances to the Maoists in cantonments and reparations

to CAPs and their families. The project was prepared under OP/BP 8.00: “Rapid

Response to Crises and Emergencies”. The World Bank Board approved the Emergency

Peace Support Project on May 6, 2008.

1.2 Original Project Development Objectives (PDO) and Key Indicators (as

approved)

7. The original PDO was “to contribute to the consolidation of the peace process in

Nepal by supporting: (i) Government to meet commitments to people affected by the

conflict, including families of the deceased, orphans, widows and disabled people, and

Maoists in cantonments; (ii) ensuring transparency in implementation of benefits under

the Project for the conflict-affected groups including the Maoists in cantonments; and (iii)

strengthening of key institutions which are tasked with policy and implementation

functions in peace building, reintegration and rehabilitation.”

8. Key indicators, according to the original Project Document (PD) main text3, were:

Proportion of eligible Maoists in cantonments and families of deceased receiving

timely due payments on an individual basis;

Regular and effective coordination between the MOPR and other relevant

agencies at the central and district levels;

Acceptable audit reports on payments and compliance with agreed payment

procedures;

Medium term strategy for economic reintegration of selected conflict-affected

populations; and

Inclusion of selected conflict-affected populations in programs providing support

for reintegration.

PDO indicators as indicated in the original PD, Annex 2, Project Results Framework and

Monitoring, and also reported as PDO indicators in ISRs 1 and 2, were:

Participation of parties to the peace process in agreed upon structures and

mechanisms addressing the peace at central and district levels; and

3 Please note that these Key Indicators were not reflected under PDO indicators in Annex 2, Project Results

Framework and Monitoring, of the original PD, and not reported in the first two ISRs reflecting the original

design. They constitute a compilation (and in one case reformulation) of ‘Component Outcome Indicators’

(considered Intermediate Indicators in this ICR), and ‘Component Outputs’ included in Annex 2.

3

Number of specific agreements of the CPA and 23 Point Agreement adhered to.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators,

and reasons/justification

9. In May 2009, less than a year after the project’s approval, a video was published

in which a Maoist leader made comments to party supporters implying that the money

paid by the GON to Maoist ex-combatants would be used for purposes inconsistent with

the peace process, and that the reported number of soldiers in the camps had been inflated.

Although payments to Maoists had been made by the GON, no withdrawals had yet been

made against project funds for these expenses. The World Bank task team reacted quickly,

consulting senior management regarding the proper actions to be taken to avert any risk

that World Bank funds might be used (or be perceived as being used) in a manner

inconsistent with the financing agreement. It was decided to disallow expenditures under

Component 1, an action that necessitated a Level 1 restructuring. A second objective of

the restructuring was to realign the original PDO with the revised role of MOPR, which

had originally been expected to assist with conflict management, truth finding and

reconciliation in addition to delivering GON commitments to conflict-affected groups.

The restructuring was therefore expected to improve the relevance of the project given

the changed circumstances.

10. The Level 1 restructuring was approved by the World Bank Board on June 2,

2010. The revised PDO was to “contribute to the Peace Process by providing interim cash

transfers and services to eligible conflict-affected groups and by increasing transparency

and accountability in the delivery of these benefits.”

11. Under the revised PDO, the original key and intermediate project indicators were

replaced4 by streamlined and more precise indicators, while mechanisms for monitoring

were enhanced. The new PDO outcome indicators were:

At least 95% of identified eligible families of the deceased and widows receive

cash payments following the operational guidelines of the project;

At least 90% of the eligible conflict-affected widows, orphans, those disabled in

the conflict, families of those killed in the conflict, families of the disappeared,

Internally Displaced Persons (IDPs), and those abducted during the conflict who

seek skills and employability rehabilitation services in the targeted districts

receive them according to the project operational guidelines;

At least 90% of surveyed recipients are satisfied with the MOPR benefit delivery

process (cash payments and rehabilitation services);

Summary information on payments to families of the deceased and widows is

available on the MOPR website and local disclosure boards are established and

updated quarterly; and

4 Please note that the restructuring document neither mentions the ‘Key Indicators’ (listed in the main

document) nor the PDO indictors (mentioned in Annex 2) of the original PD. For the purpose of this ICR

these are assumed to have been dropped together with the original ‘Component Outcome Indicators’.

4

An MOPR grievance mechanism is operational.

1.4 Main Beneficiaries

12. The original PD identified the following beneficiary groups for direct support

through cash transfers: Maoists in cantonments during the transition period; families of

people killed as a result of the conflict; and other conflict-affected groups (i.e., people

disabled in the conflict, IDPs, families of people who had disappeared, minors involved

in the conflict, orphaned children and widows). It also identified the following groups to

benefit from capacity development: the MOPR; the Project Management Team (PMT);

other actors in the peace process as needed, including the Peace Commission once

formed, the Peace and Conflict Management Committee if required; Local Peace

Committees; and other groups such as parliamentarians and possibly other bodies related

to the peace process.

13. The main beneficiaries of the project following the first restructuring were

essentially the same, except for the Maoists in cantonments, and identified as: (i) conflict-

affected widows, orphans, those disabled during the conflict, and families of those killed

in the conflict; (ii) IDPs and those abducted during the conflict; and (iii) the MOPR,

which received support through capacity building and technical assistance under

Component 3. Maoists in cantonments were removed as project beneficiaries, although

they continued to receive payments from the GON using other funds.

1.5 Original Components

14. The project originally comprised three major components:

Component 1: Transitional safety net payments to Maoists in cantonments during the

transition period (US$18.55 million). Under this component, 19,602 Maoists placed

in twenty-eight cantonments would receive regular cash allowances, and the project

would reimburse the GON for those payments made between July 2007 and mid

January 2009. The eligible Maoists were registered and verified by a two stage

process involving the two parties to the conflict and the United Nations (UN). This

component was intended to directly support the process of demobilizing the Maoist

forces in fulfilment of the 23PA.

Component 2: Benefits to families of those killed as a result of the conflict and

reintegration support to other conflict-affected populations (US$28.23 million).

Under this component:

o Sub-component 1 would finance benefit payments to families of people killed as

a result of the conflict. This comprised compensation payments to 14,000-plus

families in the amount of NPR 100,000 per person killed as per a GON decision

taken in March 2008. This would be paid as a lump sum, though payment would

be spread over several months to achieve national coverage.

o Sub-component 2 would provide support for reintegration assistance to other

conflict-affected groups: people disabled in the conflict; IDPs; families of persons

who had disappeared; minors involved in the conflict; orphaned children; and

widows. This could take a variety of forms (e.g. training, legal and counselling

services, rehabilitation services for disabled people, and piloting of interventions),

5

and would be elaborated by the GON with technical assistance (TA) provided

under the Component 3 and in close consultation with other development partners

through the Nepal Peace Trust Fund (NPTF).

Component 3: Capacity building of key institutional structures in support of the

peace process and project management support (US$3.2 million).5 This support was

essential to the implementation of the project, and was defined quite broadly in light

of the evolving peace process. Among the activities planned for this component were:

(i) capacity building and technical assistance to MOPR to perform its core functions

more effectively. This included developing a management information system (MIS),

developing internal procedures, communication campaigns for beneficiaries of

project-financed payments, monitoring, reporting and beneficiary satisfaction

surveys; (ii) support of core project implementation tasks of the Project Management

Team (PMT) such as procurement, financial management (FM), including evaluation

of project interventions through surveys and other assessment tools; and (iii) training,

workshops and technical assistance for other actors in the peace process as needed,

including the Peace Commission once formed, the Peace and Conflict Management

Committee if required, Local Peace Committees (LPCs), and other groups such as

parliamentarians and possibly other bodies related to the peace process envisaged in

the 23PA.

1.6 Revised Components

15. At the Level 1 restructuring, the original Component 1 was dropped for the

reasons described in Section 1.3. The overall budget for the project was unchanged,

however, as were the basic activities of the project for all beneficiary groups except for

those originally envisaged under Component 1. The original Component 1 was replaced

by the original Sub-component 2.2, and benefited from an increased budget, a change that

shifted the focus of the project towards longer-term peace building and rehabilitation of

CAPs. The original Sub-component 2.1 became Component 2. A summary of changes to

the allocations is provided in Annex 10. The revised components were as follows:

Component 1: Rehabilitation support to conflict-affected families and individuals

(US$14.5 million). This component provided (i) assistance in the design of service

packages (to include needs identification, psycho-social counselling, health and

nutrition counselling, occupational consultations, skill training, formal educational

scholarships, microfinance and job placement); and (ii) support for a phased roll out

in selected districts of skills development and employability services, including

occupational consultations, education and skill training and job placement (an

initiative called Employment and Self-Employment Services, or ESES).

Component 2: Cash benefits to families and widows of those killed as a result of the

conflict (US$31.8 million). This component would finance: (i) payment of

5 In the main body of the original Emergency Project Paper, the total budget for Component 3 is reported as

US$3.22 million, with US$28.23 million allocated for Component 2. This appears to be an error. The

correct allocations (reported in Annex 3 of the project paper and in all subsequent documents) are

US$28.25 million for Component 2 and US$3.2 million for Component 3.

6

NPR 100,000 each to 18,000 families of those killed in the conflict (identified and

confirmed by the government); and (ii) payment to 9,000 eligible widows of an

additional NPR 25,000.

Component 3: Capacity building of key institutional structures in support of the

peace process and project management support (US$3.2 million). This component

and budget were left unchanged from the original project design. It comprised (i)

capacity building and technical assistance for MOPR to perform its core functions

more effectively; (ii) support for core project implementation tasks of the PMT,

which included implementation of the Governance and Accountability Action Plan

(GAAP) and revamped monitoring and evaluation arrangements; and (iii) training,

workshops and technical assistance for other actors in the peace process as needed,

including LPCs, the Peace Committee, the Truth and Reconciliation Committee, and

others once formed.

1.7 Other significant changes

16. Significant improvements were noted in all aspects of implementation following

the Level 1 restructuring. During the April 2012 supervision mission, it was noted that

interim cash benefits had been provided to 13,877 families; the MOPR had made rapid

progress in implementation of the ESES component; most of the governance and

accountability actions had been completed; and project monitoring and evaluation had

been improved. A Level 2 restructuring was approved on June 11, 2012, to address the

following issues:

Extension of project closing date. The ESES program had been well received in the

12 districts covered in the pilot phase, and it was noted in the restructuring document

that “there is strong demand from CAPs and other stakeholders, including local peace

committees, for employment services and capacity building which goes beyond one-

time cash relief.” MOPR had gained insight and experience in implementing the

program, and it was proposed that this would enable the program to be expanded to

the remaining 61 conflict-affected districts. MOPR proposed to implement the

expansion in two phases: Phase I, covering 42 districts, and Phase II, covering 19

districts.

Reallocation of grant proceeds. Tracer studies and outreach activities undertaken

during 2011 revealed that the original estimates of beneficiary numbers were too high,

implying a reduction in associated indicator targets. The revised estimate of the

number of eligible beneficiaries under Component 2 decreased to 14,800 families

(compared to 18,000 originally) and 4,700 widows (original estimate 9,000). Due to

these revisions, and the extension of the ESES to the remaining 61 conflict-affected

districts, the total grant under Component 1 and Component 2 was reallocated.

Revision of the results framework. The results framework was revised with updated

targets based on the revised beneficiary numbers. Additionally, the revisions

improved the phrasing of the indicators and included a target for female participation

in the ESES.

Changes to Relief Policy In September 2011, the GON amended its relief policy,

increasing the cash relief amount to the families of deceased from NPR 100,000 to a

7

maximum of NPR 300,000 per family. Based on the available project funds, it was

agreed that the project would finance these additional payments for 2,900 families.

17. The first phase of the expansion of ESES, to 42 districts, was completed

successfully. However, the final phase of ESES, intended to cover 19 districts, started too

late. The PMT advertised a call for proposals in early 2013, and received an unexpectedly

large number of applications. Due to the limited capacity of staff in the PMT, and the

secondment of project staff to assist with the Constituent Assembly elections that year,

the review of training provider applications took longer than expected and training would

not have concluded before project closure. Although the GON requested another project

extension to finish the work, this was denied due to the already long duration of the

project. The remaining project funds, amounting to SDR 8.45 million, were

accordingly cancelled on January 31, 2014.6

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

18. Project preparation took place in a fragile political setting, in which World

Bank support was requested to facilitate a comprehensive peace settlement between the

GON and rebel groups. Recognizing the importance of a rapid and flexible response, and

the MOPR’s inchoate administrative capacity to design and implement the initiatives

agreed under the 23PA, the World Bank elected to prepare the project as an Emergency

Operation under OP/BP 8.00. The project preparation team comprised highly experienced

Nepalese and international professionals, who brought both understanding of the local

political context and experience from other post-conflict environments. This expertise

was crucial, as there had been no previous operations of this nature in Nepal.

19. Design. The inherent riskiness of the operation was well understood by the

project team. It was acknowledged in the PD that this was “a ‘high risk, high reward’

operation.” Internal discussions were held with the Country Director, Regional Vice

President and Managing Director regarding the likely risks, and these were well

documented in the PD and the minutes of the concept review meeting. It was

acknowledged that the risk to the PDO (i.e., the sustainability of the peace process) was

high, and could not realistically be mitigated under the project. The most significant risk

to materialize—the videotape revelation—was indirectly anticipated in the PD as

“Bank…viewed as providing support to Maoist party instead of individual Maoists.”

Various measures, including the use of strict Beneficiary Payment Operational

Guidelines (BPOG) and payment by individual check (later, individual bank account

deposits), were put in place to diminish this reputational risk.

20. Quality at Entry. The project’s original Components 1 and 2 were designed with

direct reference to the 23PA, and the World Bank’s financial and technical support in

these areas made a crucial contribution to the peace process. There was a certain degree

6 These funds would have comfortably covered the cost of the final training, and also included some

savings due to exchange rate gains and unutilized contingencies.

8

of ambiguity in the design of Sub-component 2 of Component 2 (support for

reintegration assistance to other conflict-affected groups), the clarification of which was

deliberately postponed until a higher level of implementation capacity had been

developed in the MOPR. This ambiguity was ultimately not resolved until the first

restructuring, but the revised Component 1 was subsequently well implemented and

highly relevant to the PDO. Component 3 was originally designed to be broad in scope,

covering a range of possible roles for the evolving MOPR in addition to project

management. In the initial stages of the project, it supported the adoption of the BPOG

and verification of beneficiary lists, necessary conditions for the disbursement of funds

under Components 1 and 2.

2.2 Implementation

21. The most important factor affecting the implementation of the project was the

videotape revelation and associated Level 1 restructuring. The actions taken were

reasonable under the circumstances, although it should be noted that the GON initially

opposed the disallowance of Component 1 payments (and continued to pay them in the

absence of reimbursement by the World Bank). The restructuring substantially changed

the nature of the project, from one focused on maintaining the ceasefire agreement, to one

that supported the longer-term rehabilitation and reintegration of CAPs into society.

However, this change led to delays in the disbursement of funds under the revised

Component 1, which were conditional on the design and contracting of training programs.

22. Project management capacity at the MOPR was a major constraint, especially

during the project’s early days. While the team involved in preparation was aware of

these limitations, their intention was to build the necessary capacity while at the same

time implementing activities urgently required due to the circumstances described above.

In the 2012 Restructuring Paper it was noted that “up to October June 2011 [sic], the

project suffered from limited capacity and frequent change in project directorship and

Ministry senior management leading to significant delays.” These delays were ultimately

overcome with the appointment of a proactive Joint Secretary to the PMT leadership in

2011, who remained in the position until project closure and substantially improved

progress on the project.

23. Additional commitments made by the government. As described in Sections 1.6

and 1.7, the restructured project financed additional compensation payments to 2,900

families of conflict victims in support of a GON commitment to raise the compensation

from NPR 100,000 to NPR 300,000 per family. The GON subsequently made a further

commitment to raise the level of compensation, this time to NPR 1 million per family. At

the time of project closure, the additional compensation was yet to be paid to some

beneficiaries. Although the additional compensation was never covered under the project,

beneficiaries were unsurprisingly not aware of these details. Around 45% of respondents

in the second beneficiary satisfaction survey reported dissatisfaction with the payment

process in protest of their outstanding entitlements. In assessing the third outcome

indicator, we disregard this survey result on the basis that it is biased by this exogenous

factor.

9

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

24. Design. In the original project design, M&E was central to the verification of cash

transfer beneficiaries. Joint verification by the UN and GON was used to identify and

validate ex-combatant beneficiaries. Families of victims were identified by the GON and

verified by local civil society groups. Independent surveys were used to track the

quantitative results indicators.

25. Social audits and third party monitoring were part of the original project design.

During restructuring, monitoring arrangements were significantly enhanced, comprising:

(i) development of an MIS; (ii) third-party monitoring in the form of beneficiary

assessment surveys and social audits; and (iii) financial management reviews and audits

conducted by the World Bank. These enhancements were reflected in more relevant

outcome indicators, the first three of which were tracked using MIS data and results from

the beneficiary assessments.

26. Implementation. The M&E processes were generally adequate in scope and rigor,

and were well used for project monitoring. The use of spot checks led to a substantial

reduction in the number of identified beneficiaries versus the original estimates. Opinion

surveys reflected a high degree of beneficiary satisfaction with the cash payment process,

and the existence of such monitoring likely influenced performance of local bodies

delivering the funds as well.

27. Utilization. The project made ample use of the data collected for refinement of

the outputs. In the case of the ESES program, for example, the beneficiary satisfaction

survey results and trainer reports on job placement of beneficiaries during the pilot phase

were used to refine the contracting procedure and training model.7 Certain aspects of the

M&E system, including the MIS, will have utility for the MOPR beyond the project.

2.4 Safeguard and Fiduciary Compliance

28. There were no deviations or waivers from the Bank safeguards and fiduciary

policies and procedures during the implementation of the project. No safeguard policies

were triggered by the project.

29. Financial management. The overall financial management (FM) performance of

the project is rated as satisfactory. Initially, the overall risk rating of the project was high,

but this was later mitigated with FM improvement actions. Being a new ministry, the

MOPR took some time to establish FM arrangements. Frequent turnover of accounts staff

also impacted FM compliance at this time. As a result, there were delays in the

submission of trimester financial and audit reports, and this led to a downgrading of the

FM rating to unsatisfactory in June 2010. In the January 2011 ISR, it was noted that

“financial management performance remain[ed] unsatisfactory as trimester reports [were]

overdue, ineligible expenses [had] not been refunded, and [the] overall financial control

7 An impact evaluation was planned for the final phase of ESES, but could not proceed due to the

cancellation of this component.

10

system [was] weak.” The project was not able to maintain financial records for a long

time, as a result of which the FM rating remained unsatisfactory until 2012.

30. During FY10 and FY11, disbursements were suspended due to overdue audit

reports. Later, with the change of staff within the PMT and the hiring of FM consultants,

significant improvements were observed. Backlogs of accounts were cleared, and

registers were updated and maintained until project closure, resulting in the timely

submission of financial and audit reports. Monitoring of expenditures at the district level

was also strengthened. As a result of this turnaround, the FM rating was upgraded to

satisfactory.

31. Procurement. The overall procurement management rating is satisfactory, and

remained so for the duration of the project with one exception. Though the procurement

for the project was burdensome given the need to contract a large number of service

providers to deliver ESES to the CAPs, preparation and implementation of a Field

Implementation Manual (FIM) facilitated the smooth implementation of procurement

activities and the project overall. At the outset of the ESES, activities were delayed due to

a lack of clarity regarding the process and activities to be implemented. However, the

existence of the FIM and the provision of several rounds of orientation programs to

project staff and participating service providers (which covered procurement among other

topics) helped to expedite the implementation process.

2.5 Post-completion Operation/Next Phase

32. This was an emergency project designed to support the peace process, and the

implementing ministry was not expected to endure beyond the peace process. Thus no

second phase was planned, and many of the key project staff were consultants hired for

the term of the project only. Since all deliverables were either completed or cancelled,

there was no need to provide for maintenance or ongoing monitoring.

33. For the time being, the MOPR continues to operate. Since the closure of the

project, the MOPR has continued to develop its plans for psychosocial counselling of

CAPs (design of which was funded under the revised Component 1), and is planning to

conduct ESES training in the remaining 19 districts not reached by the project. These

activities are continuing with support from other donors including the NPTF.

34. The MOPR, and the GON more broadly, have derived residual benefit from the

capacity built through the project, including: (i) a clear framework for the delivery of

basic employment services; (ii) a performance-based contracting model for efficient

delivery of services; (iii) a cadre of NGOs and CSOs with depth of experience as service

providers; and (iv) capacity building of personnel at the DAO and LPC level to monitor

project implementation. The Borrower ICR explicitly mentions the continuous benefits of

the MIS, policy documents, tool and instruments developed and established under the

project, as well as significant benefits of learning from project implementation, which the

Ministry is determined to embed into future activities. All these achievements will

enhance the quality of future government service delivery.

11

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

Relevance of Project at Appraisal

35. The GON urgently sought international support to fulfil the conditions of the

23PA in a fair and transparent manner. This was crucial to the credibility of the peace

process and the country’s long-term development outlook, and it is important to note that

at appraisal the country was still experiencing significant instability despite the ceasefire.

Moreover, the newly-formed MOPR had been established to deliver on the agreed

programs, and needed technical assistance to establish itself and undertake the task of

restitution and reconstruction. In such an environment, it was reasonable to expect that

the World Bank’s support to the smooth execution of the 23PA would materially

contribute to the peace process. The project’s objectives were fully consistent with the

World Bank’s post-conflict transitional support strategy for Nepal (as outlined in the

Interim Strategy Note, 2007), and resonate with the latest Country Partnership Strategy

(2014-18), which emphasizes the importance of sustaining the peace process.

36. Although the PDO was appropriate given the fragile political situation and the

need to provide immediate assistance under the 23PA, some of the original PDO and

Component Outcome indicators8, though pertinent to the broader peace process, had

limited attribution to the overall project design, and were subject to influences beyond the

scope of the project. Given the project’s lack of direct political capacity or peace building

components, the link in the results chain between the project’s components and these

indicators is tenuous.

37. On balance, project relevance prior to restructuring is rated as substantial. The

pre-restructuring PDO relevance was high, but design relevance was only modest given

the above shortcomings.

Relevance of Project Following Level 1 Restructuring

38. The revised results framework was considerably more restrained, reflecting a

more realistic assessment of the implementation capacity of the MOPR. Based on results

of a tracer survey, the funds allocated to the original Component 1 were redirected

towards scaled-up support for the economic reintegration of conflict-affected families,

reflecting an advancement in the peace process from demobilization and immediate

survival of CAPs to the rebuilding of the economy and citizen trust in government. The

8 Original indicators with dubious relevance to the project include: Participation of parties to the peace

process in agreed upon structures and mechanisms addressing the peace at central and district levels;

Number of specific agreements in the CPA and 23PA adhered to; Reduction in cease fire violations; and

Peace Commission constituted and operational and agreed multi-party mechanism in place pending Peace

Commission formation.

12

PDO’s relevance remained high, while design relevance increased to substantial. On

balance, the restructured project’s relevance is rated as high.

3.2 Achievement of Project Development Objectives and Outcomes

39. The efficacy of the original PDO is rated as modest. The original PDO indicators

were on their way to achievement at the time of restructuring, and the peace process has

continued since (albeit slowly) without significant reversal.

40. The efficacy of the revised PDO, in contrast, is rated as substantial with minor

shortcomings. Supporting this conclusion, four of the revised PDO level results indicators

were met and one was partially met. (i) Cash payments for identified eligible families of

those deceased due to the conflict and widows were delivered to 14,770 out of an

expected 14,800 eligible families (99% coverage against the target of 95%). (ii) The

delivery of skills and employability rehabilitation services to [beneficiaries] who seek

[them]” was technically met in the 61 districts where ESES was offered (pilot phase and

phase 1). (iii) The target beneficiary satisfaction rate for cash payments and rehabilitation

services) of 90% was met for cash benefits (with surveys showing 91% satisfaction), and

also fully achieved for rehabilitation services (79% satisfaction against a target of 80%

following the 2012 restructuring). The target female participation rate of 30% was

substantially exceeded, with half of trainees being female. (iv) At the end of the project,

the MOPR website was fully operational. Records and information of the deceased and

widows were entered on the MIS and available online on the Ministry’s project website.

District disclosure boards were functional and updated quarterly. Finally, (v) the outcome

to have appropriate grievance mechanisms operational had been achieved as well. Two

officers were designated as grievance focal points, and a grievance handling MIS system

with a toll-free hotline was made operational for handling grievances.

41. It seems reasonable to conclude that the project contributed to advancing the

peace process in Nepal. It is true that, while the peace process has not broken down, it has

taken longer and been less conclusive than was anticipated at the time of appraisal.

However, many factors have had a more significant bearing on this outcome than the

project itself. Given the project’s strategic relevance and delivery of the bulk of

anticipated outputs, the Bank’s decision to support cash payments and employment

services in conflict-affected areas made a real difference to the lives of beneficiaries and

thereby helped promote social inclusion and restore economic activity and confidence in

the GON. This is evidenced by the findings of the beneficiary assessments (see Annex 5).

Moreover, the project contributed to capacity building within the MOPR and at the local

institution level, which has arguably supported sustained peace in Nepal.

3.3 Efficiency

42. The ICR did not undertake a full economic analysis of the program due to lack of

impact evaluation data and the short-term nature of the project (focused on peace and

rehabilitation). Furthermore, fiscal sustainability of the program is not an issue as it

supported short-term cash transfers to CAPs rather than provision of a permanent safety

net. A basic economic analysis is provided in Annex 3.

13

43. The basic economic analysis concludes that the efficiency of the project prior to

restructuring was substantial, on both economic and cost grounds. However, the project

took significantly longer than usual for an emergency project (with IDA funds), and

ultimately just under one third of the funds were cancelled due to the dropped ESES

Phase II. These considerations imply a significant amount of money tied up for many

years with no resulting output. Taking this into account, the rating for efficiency after

restructuring is downgraded to modest.

3.4 Justification of Overall Outcome Rating

Rating: Moderately Satisfactory

44. Based on the above

assessment, and applying the

Bank’s guidance on weighted

rating for projects with

formally revised objectives,

the final outcome rating

would be subject to a split

assessment, before and after

restructuring. Whereas the

project’s overall rating prior to restructuring was moderately unsatisfactory due to its

modest efficacy, its relevance and efficacy were high and substantial, respectively, after

restructuring, and the rating increased to moderately satisfactory. Constructing weights

based on the share of funds disbursed prior to (US$19.4 million, as of RP, corresponding

to 56%), and post (US$14.7 million, corresponding to 43%) restructuring, out of a total

disbursement of US$ 34.1 million (after cancellation of US$12.3 million) would suggest

a borderline moderately unsatisfactory rating overall (Table 1).9

45. However, in light of the fact that the project achieved its PDO in a very

challenging environment, and exceeded two of its five outcome indicators, the team

concludes that the project outcome should be rated moderately satisfactory. As an

emergency project that was developed during a time of considerable uncertainty and

political change, the project’s risks were recognized explicitly upfront and discussed

extensively with management. The project was designed with adequate controls to

mitigate these risks, and early restructuring—a response to situations where risks

materialize—is common in emergency projects. The project did not change a lot in terms

of its major activities and PDO following the restructuring, while the revised project

design adapted the project to the needs of beneficiaries in an evolving peace process. The

revised PDO and PDO indicators were achieved for the most part, as shown above. Had

the final cancellation of funds not been necessary, the weighting breakdown above would

9 The 2012 Restructuring will not be subject of a similar split rating exercise, since only the targets of some

indicators were changed and the overall DO ratings immediately pre and post restructuring (MS), did not

change. Hence another weighted rating calculation would have no effect on the outcome of the previous

exercise.

Table 1. Application of Ratings Formula

Pre-

restructuring

Post-

restructuring Overall

Weight 0.56 0.44

Relevance Substantial High

Efficacy Modest Substantial

Efficiency Substantial Modest

Outcome

indicator MU (3) MS (4) MU (3.44)

14

have been 41% prior to restructuring and 59% post restructuring, resulting in a clear

moderately satisfactory rating.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

46. Poverty Impacts. Beneficiary assessments indicate that the compensation

payments and training services provided to CAPs and their families had a substantial

impact on their welfare. Such families are ordinarily considered highly vulnerable to

falling into poverty, especially in the aftermath of a civil war and given the global

economic downturn that coincided with the project’s inception. During a field visit, the

ICR team interviewed a number of beneficiaries who had used the training to find new

employment opportunities. Some beneficiaries were people with disabilities as a result of

the conflict, while others were family members of the deceased or disabled who now

needed to work in order to replace the latter’s lost income. According to the results of the

beneficiary assessments and training provider reports, between 50% and 60% of those

individuals who received training under the program found employment, although it was

not possible to evaluate whether this employment was sustained given the short time span

between conclusion of training and the evaluation.

47. Gender Aspects. The project was sensitive to gender issues. First, the majority of

cash transfer beneficiaries were women. Additional compensation payments were made

to widows of war victims, typically a highly vulnerable group. Second, the ESES

program set a participation target of 30% female students for the training, but the actual

share was 50%. As a result of the training, 10% of female training beneficiaries migrated

for employment following the training according to the first third-party monitoring

survey.10

48. Social Development. One of the key objectives of the project was to support the

peace process by reintegrating ex-combatants, CAPs and their families. While the project

ultimately could not support the former group, CAPs and their families received cash

transfers and employment services. Beneficiary assessments indicate that these

interventions had a positive impact on the welfare of a majority, and social standing of a

minority, of beneficiaries. An improvement in social interactions such as participation in

social and cultural functions was reported by 22.5% of respondents. About 8.6% noted

that their neighbors were friendlier after they received the support, 4.9% of respondents

felt happier, and 5.2% felt harassed by their neighbors asking for loans. These impacts

were greater among women than men.

(b) Institutional Change/Strengthening

49. For a number of reasons, the capacity building component of the project ended up

being used primarily to support implementation. However, the project also contributed to

enhanced capacity and standing of local institutions (DAOs and LPCs); a grievance

redress mechanism was set up for MOPR program beneficiaries; and an MIS was

10 This survey was conducted in ten program districts, and 20% of beneficiaries in each district were

interviewed. The total sample of training beneficiaries was 292 females and 206 males.

15

developed for the Ministry. Finally, the project mandated the use of third-party

verification and BPOG for the payment of cash transfers. These practices all set a

precedent for future government programs.

(c) Other Unintended Outcomes and Impacts (positive or negative)

N.A.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

50. See Annex 5 for a summary of the Beneficiary Assessment findings. No

stakeholder workshops were held.

4. Assessment of Risk to Development Outcome

Rating: Low or Negligible

51. The final PDO was “to contribute to the peace process by providing interim cash

transfers and services to eligible conflict affected groups and by increasing transparency

and accountability in the delivery of these benefits.” Since the cash transfers and services

have been delivered (with the exception of Phase II of ESES), and have served their

purpose of contributing to the peace process, there is no risk of future events impacting

this outcome.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Satisfactory

52. The Bank fielded a team of local experts to advise on political and economic

circumstances, and international experts on social protection and post-conflict

reconstruction. The team drew on the Bank’s extensive international experience with

demobilization and reparation, while remaining sensitive to local circumstances and the

need to honor the 23PA.

53. Considering the circumstances under which it was written, the PD was

comprehensive in scope. Some flexibility was left in terms of implementation

arrangements, but this was deliberate given the evolving political situation, and the

overall intent of the project was clear. The internal controls put in place to manage the

cash transfers were very effective, and reflected the Bank’s learning in other country

contexts. However, there were shortfalls in the realism of some of the outcome indicators

and their link to the PDO. These precluded a higher rating for quality at entry.

54. Risks were moderately well anticipated and mitigated. Recognizing the fluidity

and fragility of the political economy at the time of preparation, the project appraisal

team undertook a risk assessment that recognized the potential for risks and proposed

adequate mitigating measures. While a major political risk did materialize, the strong

fiduciary controls built into the project prevented this event from damaging the Bank’s

reputation. On the other hand, the team did not explicitly cite the limited capacity of the

MOPR as a risk to the PDO, and conditioned the project’s disbursements on the rapid

implementation of new procedures in a relatively new ministry and a generally unstable

16

political environment. This slowed down disbursement and ultimately contributed to the

cancellation of project funds.

(b) Quality of Supervision Rating: Satisfactory

55. Disbursement of funds under the project did not commence for over a year.

However, the supervision team was quick to respond to allegations that payments made

to ex-combatants might be used in a manner inconsistent with the project objectives. The

resulting Level 1 restructuring was serendipitous, since it improved the clarity and

pragmatism of the project design, and arguably strengthened the linkage between the

project’s outputs and the PDO.

56. Following restructuring, the Bank team focused on helping the MOPR to develop

the operating procedures for the ESES component and to build the capacity of the PMT.

The Bank team and new PMT strengthened their partnership following the mid-term

review, and the results were evident in the rapid scale-up of ESES incorporating learning

from the pilot. In addition to project specific activities, the TTL maintained

communication with the NPTF and shared experiences on a regular basis. A higher rating

was precluded due to the slow rate of disbursement and ultimate cancellation of funds,

which might have been averted had proactive measures been taken.

(c) Justification of Rating for Overall Bank Performance


57. Overall Bank Performance is rated as moderately satisfactory. While the team

did well given the emergency context, the original design could have been improved by

more closely conforming the PDO and results framework to the project’s outputs, being

more realistic regarding what was achievable in the emergency context, and by exercising

more attentive supervision regarding the ESES component.

5.2 Borrower Performance

(a) Government Performance


58. The performance of the Borrower is rated as moderately satisfactory. Progress

was slow during early stages of project implementation due to lack of capacity within the

MOPR and frequently changing leadership of the PMT. The GON could probably have

done more to ensure that the MOPR was adequately staffed and procedures put in place

to accelerate disbursements. In the later stages of the project, PMT management and

project support improved, although slow fiduciary processes remained a constraint on

project progress and may have contributed to the cancellation of the final phase of ESES.

(b) Implementing Agency or Agencies Performance


59. Performance of the implementing agency was also mixed. Implementation was

relatively slow during the first few years of the project, reflecting both the project

management arrangements and the capacity limitations of the new ministry. Financial

management was also problematic at times during the project. Following the appointment

of a new Project Coordinator (who remained in the job until the end of the project) and an

17

expanded PMT in November 2011, there was a significant improvement in the pace and

quality of project activities. Outstanding fiduciary issues were resolved. The objectives

and responsibilities of project participants were clearly documented in a FIM. The PMT

organized capacity building workshops for district and local government officers, service

providers, and other project participants, and an MIS was rapidly developed by a team of

consultants.

60. The performance of the implementing agency after the 2012 extension was only

compromised by the late commencement of contracting for the second phase of ESES.

The remaining phase had to be cancelled as a result, and it is arguable that the PMT could

have anticipated this and started the contracting process earlier to ensure all training was

completed before the project closing date. The PMT argues that they had assumed they

would get another one-year extension on the project, but the ICR team found no evidence

that such a commitment was made by the Bank.

(c) Justification of Rating for Overall Borrower Performance


61. Overall Borrower performance is rated as moderately satisfactory. Initial project

implementation was weak due to a lack of capacity among the project management and

the MOPR more generally. Following restructuring, there was a gradual improvement in

implementation and development of strong capacity within the PMT due to dedicated and

committed leadership. A higher rating was precluded by the factors leading to

cancellation of Phase II of ESES.

The Borrower prepared a detailed and comprehensive own Project Completion Report,

the executive summary of which is attached in Annex 7.

6. Lessons Learned

62. Teams preparing emergency operations should be encouraged to be more

conservative with planned outputs than they would for a standard investment

project, especially in a low-capacity setting and with new processes. In this project,

overly ambitious objectives regarding the capacity of a new ministry to roll out a training

program nationwide contributed to the ultimate cancellation of project funds.

Furthermore, the original project objectives were overly ambitious and difficult to

measure. Given the high levels of risk and sensitivity, weak capacity and leadership that

are typically present in emergency project situations, the goals of such projects should

accordingly be more conservative, and more focused on building capacity than on

meeting stretch targets or deadlines. It would be useful to develop special guidance for

the preparation and evaluation of emergency projects that explicitly takes these

constraints into account.

63. Operations in a post-conflict situation should anticipate a high level of risk

and political sensitivity. The videotape revelation precipitated a restructuring of the

project to avoid misuse of funds and adverse reputational consequences. The risk of this

occurring was acknowledged at preparation and mitigated through the use of BPOG. A

reliable process was put in place to identify genuine beneficiaries, minimizing grievances

and the risk of leakage, while close supervision and a timely response from the Bank

team averted any reputational impact from the videotape revelation. A high level of risk

18

is likely in emergency operations, and this should not be a deterrent to such projects.

Rather, task teams should manage this risk by strengthening borrower capacity for

oversight and fiduciary control, ensuring transparency of processes, and maintaining

close supervision during implementation.

64. The capacity of the implementing agency and the quality of its leadership can

make or break an operation. Prior to 2011, the project made slow progress, hampered

by the restructuring and the limited capacity of the MOPR. Leadership turnover was

frequent. The appointment of a strong Project Coordinator in 2011, who remained in the

position until the project’s closure, was evidently a factor in the successful completion of

the cash transfer program and implementation of the ESES component. A commitment to

capacity building for project functions also helped. Project teams should be mindful that

even with a well-designed project and government commitment to the PDO, the quality

and processes of the PMT can have a significant bearing on project outcomes. It is

imperative to ensure at the project design stage that the PMT will be well structured,

staffed and skilled for the life of the project.

65. Good processes strengthen program performance. While the ESES program

was slow to start and had its share of weaknesses, it is notable that a new ministry

managed to design and implement a relatively successful skills training and employment

program in only three years. This can be attributed to the use of strong program processes,

including performance-based contracting and public-private partnerships. Service

providers were required to achieve a minimum 50% post-training employment rate in

order to receive the final contract payment. This mechanism ensured the relevance and

quality of training and improved outcomes. The program also employed a ‘learning from

experience’ model, relying on a small pilot to refine the design for the main phase.

Finally, capacity building was central to the success of ESES, with workshops used to

inform local government officials and interested providers. Combined with a clear

proposal evaluation framework, this enabled the PMT to identify and select competent

service providers. Many of these service providers scaled up as a result of the project,

leaving a residual body of experienced trainers that will serve as a resource for future

programs.

66. Teams should anticipate delays during implementation, and have a plan to

deal with them. Projects often encounter delays that hamper progress against the PDO,

and this was the case both in the early stages of ESES and immediately following

restructuring. While some of these delays are unavoidable, such as the need to develop

operations manuals before commencing the work, others (such as the delay in

commencing Phase II of ESES) might have been identified and mitigated earlier with

closer supervision and more proactive planning.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

N.A.

19

Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD million equivalent)

Components

Appraisal

Estimate

PAD,

April 2008

USD

millions

Appraisal

Estimate

Revised,

April 2010

USD

millions

Appraisal

Estimate

Revised,

May 2012

USD

millions

Appraisal

Estimate

Revised,

Jan 2014

USD

millions

Actual /

Latest

Estimate

USD

millions

Percentage

of Appraisal

Component 1 18.55 14.50 17.74 6.56 6.24 95.1%

Component 2 28.25 31.80 28.60 23.24 22.31 96.0%

Sub-component 1 - 28.20 27.44 22.33 21.43 96.0%

Sub-component 2 - 3.60 1.16 0.91 0.88 96.0%

Component 3 3.20 3.20 3.20 3.62 3.04 84.0%

Total Baseline Cost

Physical

Contingencies 0.00 0.00 0.00 0.00 0.00

Price Contingencies 0.00 0.50 0.46 0.00 0.00

Total Project Costs 50.00 50.00 50.00 33.46 32.78 98.0%

Front-end fee PPF 0.00 0.00 0.00 0.00 0.00

Front-end fee IBRD 0.00 0.00 0.00 0.00 0.00

Total Financing

Required 50.00 50.00 50.00 33.46 32.78 98.0%

(b) Financing

Source of Funds Type of

Cofinancing

Appraisal

Estimate

USD millions

Actual/Latest

Estimate

USD millions

Percentage of

Appraisal

Borrower 0.00 0.00

IDA Grant 50.00 32.78 65.6%

20

Annex 2. Outputs by Component

Component 1. Employment and Self-Employment Services (ESES) (total actual cost

US$6.24 million)

This component was designed to be implemented in three phases – a pilot phase in 12

districts, followed by two additional phases to cover the remaining 61 conflict-affected

districts. Based on estimated costs of program design and delivery, provision was made

for the delivery of employment services to an estimated 25,000 CAPs.

During the pilot phase, employment-linked training was offered in 19 different trades. A

majority of beneficiaries enrolled in construction-related trades, such as plumbing (15%;

459 beneficiaries); building electrician (14%; 420) and masonry (11%; 319). The

construction trades attracted many candidates because these skills were seen to be of high

demand in the Gulf countries where many Nepalese job seekers aspire to migrate for

work. Although not a contractual requirement, training program graduates were provided

with an opportunity to take a National Skill Board examination, with the cost of the test

being borne by the project. Of the 2,315 beneficiaries who took the test, 1,778 passed.

During the pilot phase, 2,964 beneficiaries completed the respective ESES training

programs and 1,789 (60%) found employment.

Building on outcomes and lessons learned from the pilot phase, Phase I of ESES was

rolled out in 42 districts. Eighteen service providers were selected from 93 applications,

and between them they received 295 contracts for the delivery of training to 11,740

beneficiaries (of whom 11,693 enrolled). Female participation in the ESES program was

encouraged in both phases. In the pilot phase, 40% (1,200) were females, with female

participation reaching 53% (6,147) in Phase I. Accordingly, the PDO indicator of 30%

female participation was substantially exceeded. Female enrolment was encouraged by

the provision of training in female-oriented trades such as tailoring and hand embroidery.

Phase I offered training programs for 27 different trades; 13 new trades were introduced,

while 5 trades were dropped from the pilot phase. Off-season vegetable farming had the

largest number of participants (19%; 2,159) followed by building electrician (14%;

1,596) and tailoring (11%; 1,238). Of the total 295 contracts awarded, the project

received Employment Completion Reports (ECR) for 276 contracts; according to these

reports, 55.3% of trainees in Phase I found employment 6 months or less after completing

the training. Third-party verification confirmed 206 of these ECRs, and found an

employment rate of 56.3%. Of the 11,693 beneficiaries who enrolled in training

services in Phase I of the program, 11,540 completed the training.

Phase II of ESES was intended to cover the remaining 19 districts. The MOPR received

948 proposals from interested training providers, an unexpectedly large number that

overwhelmed the capacity of the bid evaluation team. The situation was worsened by the

secondment of PMT staff at this time to work on the Constituent Assembly elections. The

PMT expected to receive an extension of 5 to 6 months to complete Phase II. Following

notification that further extensions would not be granted, evaluation of proposals was

cancelled and bidders were advised accordingly. Since the closure of the project, the

PMT has submitted a proposal to the NPTF to support the implementation of Phase II.

21

The ESES component also supported the design of a psychosocial counselling program to

CAPs. This program was intended to assist the reintegration of CAPs by helping them

deal with the traumas resulting from the conflict. The design of the counselling was

successfully completed and MOPR is now seeking financing from the NPTF for its

implementation.

Component 2. Cash benefits to families of widows of those killed as a result of the

conflict (total actual cost US$22.31 million).

The objective of Component 2 was to provide interim relief payments to families of those

killed as a result of the conflict. The revised component covered: (i) a NPR 100,000

payment to 14,800 families of conflict victims; (ii) a further NPR 200,000 to 2,900

families; and (iii) an additional NPR 25,000 payment to 4,700 widows of those killed in

the conflict (and not covered by army or police compensation arrangements). Results

from the first Third Party Monitoring survey found high levels of satisfaction with and

impact from the transfers, hence the component exceeded the targets set at the June 2012

restructuring. Payments to families of those killed in the conflict were delivered to 14,309

out of an estimated 14,800 eligible families (97% coverage against the target of 95%).

Payments were received by 4,568 eligible widows against a target of 4,700 (97% against

the target of 95%). At the second Third Party Monitoring, satisfaction was considerably

lower (54%), however as discussed in Section 2.2 we believe this result was biased by an

unrelated grievance regarding other government commitments to CAPs.

Further details on these results are presented in Annex 5.

Component 3. Capacity building of key institutional structures in support of the

peace process and project management support (total actual cost US$3.04 million).

Component 3 provided resources for project management, institutional capacity

development and training. Guidelines were developed for payment and ESES services in

support of Intermediate Outcome (IO) indicators 2 and 3, through a consultative process

involving the NPTF and stakeholders (also supporting achievement of IO indicator 1).

Training, orientation, and information sessions outlining operating procedures, roles and

responsibilities related to the project were conducted for MOPR personnel, LPC and

DAO staff, training service providers, and beneficiaries. These training sessions were

reinforced through media and communication campaigns (supporting achievement of IO

indicator 4). A grievance mechanism was introduced and handled a large number of

grievances about the cash payment and ESES processes (achieving outcome indicator 5

and IO indicator 8). This substantially increased the social accountability of the project,

as did the use of disclosure boards (satisfying outcome indicator 4 and IO indicator 9).

The component supported the development of an M&E plan as described in Section 2.3,

which satisfied IO indicator 11. Beneficiary assessments and social audits were financed

and conducted on an annual basis, satisfying IO indicators 5, 6 and 10.

A key outcome from Component 3 (supporting the achievement of IO indicator 7) was

the development of the MIS, which contained data on all CAPs, the project accounting

system, program budget modules, and all elements of the ESES program. At the time of

project closure, the MIS team was developing additional modules to support the

implementation of other MOPR programs as well. In order to ensure the system was

22

usable at all levels, MIS training was provided to DAO, DDC, and LPC officials. While

the project-supported activities are now completed, the MIS will have ongoing relevance

for the MOPR as it continues with peace-related interventions in ESES, psychosocial

counselling and the payment of remaining obligations to beneficiaries.

23

Annex 3. Economic and Financial Analysis

A full economic and financial analysis was not done during preparation, and was also not

possible at the ICR stage. This is because the intention of the Emergency Recovery Loan

was to support a peace process and stabilize a very tenuous peace settlement. The overall

economic return of the project is therefore impossible to quantify. While the project did

have outputs with a direct economic benefit, it was not possible at the ICR stage to

measure the direct welfare impact of these outputs, since no impact evaluations were

conducted and data from the beneficiary assessment were inadequate for such an exercise.

However, looking at the outputs, it can be concluded that the project’s components had a

substantial economic benefit:

First, it can be assumed that the benefit of the targeted cash transfers was

extremely high, given they were provided to households that had lost family

members or were caring for people with disabilities.

The employment and self-employment services were similarly delivered to very

needy individuals, and employment rates were reasonable (60%) in comparison to

other training programs in the region.

Finally, it is important to factor in the social and community-wide impact of

greater economic and social agency promoted by the project, a factor to which it

is not possible to assign a precise value.

The project was also relatively cost efficient:

Analysis of cost data for Phase 1 of the ESES program shows an average program

cost of NPR 20,825 or NPR 231 per trainee per day (see Tables A3.1, A3.2 and

A3.3). 11 This is relatively low compared to comparator programs. 12 Factors

contributing to efficiency include: (i) the utilization of NGOs and CSOs as

training service providers; (ii) the adoption of competitive, performance-based

contracting; (iii) the development and delivery of orientation workshops to

potential bidders; (iv) clarity and transparency of the bid evaluation process; and

(v) multilevel performance monitoring of training program delivery.

Component 2 was delivered with a high degree of efficiency. Contributing factors

included the development of clear BPOG, engagement of LPCs and DAOs in

program oversight, and the adoption of a broadly based communication campaign.

Processing of claims was conducted by existing staff as part of their ongoing

responsibilities thus incurring no incremental salary costs.

On balance, the team therefore concludes that the project’s economic efficiency as

designed was substantial. As described in Section 3.3, eventualities during

11 Program costs include staff and administrative costs, rental costs for training delivery sites, non-durable

goods and consumables, and depreciation of fixed assets. 12 In addition to training program delivery costs, this figure includes a beneficiary allowance of NPR 4,600

per month for lodging and meal expenses during the training period, plus NPR 1,500 per month for daily

transport costs to and from the training worksite.

24

implementation detracted from the overall economic efficiency, which is therefore

downgraded to moderate once these factors are taken into account.

(a) Total Costs and Outputs for Component 1

Item Pilot Phase Phase I

a. Total staff and administrative cost

and fees 24.28 142.62

b. Total rent and utilities 5.17 19.30

c. Non-durable goods and

consumables 21.23 68.94

d. Depreciation of fixed assets 1.72 13.63

Total Service cost 59.20 276.27

Total Service cost,

excluding V.A.T 52.39 244.49

Total Number of training provider

contracts 76 295

Total Number of beneficiaries 3,030 11,740

Training days per beneficiary 90 90

(b) Average Training Costs under Component 1

Item Pilot Phase Phase I

Average total contract value to Service

Provider for the contracted training

period (NPR)

17,292 20,825

Contract value (NPR per training day) 192.13 231.39

Trainee travel and per diem cost per

training day (NPR)13 78.88 78.88

Staff administrative cost and fees

(NPR per training day) 269,773.33 1,584,679.72

Rent and utilities (NPR per training

day) 57,411.11 214,453.33

Non-durables goods and consumables

per training day 235,864.44 765.994.44

13 Participants Allowances: All participants in training services received:

(i) A lump sum of NPR 1,000 for initial travel costs;

(ii) NPR 4,600 per month for lodging and meal expenses during the entire service period; and

(iii) NPR 1,500 per month for daily transport expenses to and from the organization conducting the services.

25

(c) ESES Ministry-Level Cost Estimates (Phase I)

Task Personnel Level of

effort (days)

Cost

(NPR)

Procedure development 20 28 110,000

RFP development 1 7 49,000

Call for proposals, screening &

collection 3 1 250,00014

Proposal evaluation 6 60 876,000

Contract negotiation 6 12 116,800

Implementation/Monitoring -

Kathmandu 2 60 600,000

Supervision/Monitoring - Field 10 60 1,500,000

Employment verification - Kathmandu 2 40 400,000

Employment verification - Field 7 40 1,000,000

Data base development 5 140 525,000

14 Includes logistics support and conference charges.

26

Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/

Specialty

Lending

Mohamed Ihsan Ajwad Senior Economist SASHD

Simon Arthy DfID, Nepal Peer reviewer

Roshan Darshan Bajracharya Senior Economist SASPR Co-TTL (prep-

2009)

Ian Bannon Manager AFTCS Peer reviewer

Kiran R. Baral Senior Procurement

Specialist SARPS

Deborah Bateman Country Program

Coordinator SACNA

Stephanie Borsboom E T Consultant

Sean Bradley Senior SD and Post-Conflict

Specialist AFTCS

Gertrude Cooper Program Assistant SASHD

Susan Goldmark Country Director SACNA

Bernard Harborne Lead Specialist AFMC1 Peer reviewer

Hiroko Inamura Senior Counsel LEGES

Philip O’Keefe Lead Social Protection

Specialist SASHD

Co-TTL (prep-

2009)

Rajashree Paralkar Senior Country Officer SACNA

Bigyan B. Pradhan Senior FM Specialist SARFM

Sushila Rai Program Assistant SASHD

Rajib Upadhya Sr. External Affairs Officer SAREX

Kishor Uprety Senior Counsel LEGES

Supervision

Afrah Alawai Al-Ahmadi Sr. Social Protection

Specialist GSPDR TTL (2011-2013)

Samvita Reddy Arikatla Senior Finance Officer CTRLN

Ramesh Raj Bista E T Consultant

John D. Blomquist Program Leader SACIN TTL (2009-2011)

Lauren M. Cato Senior Program Assistant LEGES

Michelle Lisa Chen Program Assistant GSURR

Dilip Kumar Prusty Chinari Finance Analyst CTRLN

Amit Dar Director GEDDR

Sajit Das Consultant

Brigitte Duces Consultant

Phoebe M. Folger Operations Officer GHNDR

27

Pablo Gottret Practice Manager GSPDR

Maria E. Gracheva Senior Operations Officer GHNDR

Julie-Anne M. Graitge Program Assistant GEDDR

Savinay Grover Financial Management

Specialist GGODR

Hassine Hedda Senior Finance Officer CTRLA

Indike Kandanearatchy Financial Analyst CTRLS

Minneh Mary Kane Lead Counsel LEGES

Jaya Karki Team Assistant SACNP

Shakila Pareen Khan Senior Program Assistant SACBD

Gloria Avershima Kwembe Program Assistant GGODR

Iffat Mahmud Operations Officer GHNDR

Yogesh Bom Malla FM Specialist GGODR

Yasuhiko Matsuda Sr. Public Sector Specialist GSPDR TTL (2013-close)

Furzana Banu Jamal Mohamad Finance Analyst CTRLN

Nagendra Nakarmi Senior Program Assistant SACNP

Kalyan Nemkul Team Assistant SACNP

Jyoti Maya Pandey Junior Professional Associate GSPDR

Rajashree S. Paralkar Senior Operations Officer OPSPQ

Bigyan B. Pradhan Senior Operations Officer SACNP

Rajalakshmi Rajagopalan Consultant

Jasmine Rajbhandary Social Protection Specialist GSPDR

Radha Raju Finance Analyst CTRLN

Janardhanan Ramanujam Senior Finance Assistant CTRLN

Fadia M. Saadah Manager OPSPQ

Kesh C. Shrestha Office Assistant SACNP

Neena Shrestha Procurement Assistant GGODR

Satish Kumar Shivakumar Finance Officer CTRLN

Shashi K. Shrivastava Consultant

Oleksiy A. Sluchynskyy Senior Economist GSPDR

Jennifer K. Thomson Chief FM Officer OPSOPR

Shambhu Prasad Uprety Procurement Specialist GGODR

Alejandro Welch Program Assistant GEDDR

Sunita Kumari Yadav Program Assistant GGODR

Johannes C.M. Zutt Country Director SACBN

ICR Team

Priyanka Malla Consultant

J. Roger Pearson Consultant Lead Author

Thomas Walker Economist GSPDR ICR TTL

Barbara Weber Senior Operations Officer GPSOS

28

(b) Staff Time and Cost

Stage of Project Cycle

Staff Time and Cost (Bank Budget Only)

No. of staff weeks

USD Thousands

(including travel and

consultant costs)

Lending

FY08 10.0 151.33

Total: 10.0 151.33

Supervision/ICR

FY09 16.6 95.30

FY10 26.6 260.32

FY11 18.6 109.49

FY12 17.8 116.55

FY13 14.0 82.30

FY14 18.8 109.37

FY15 8.6 23.24

Total: 121.0 796.57

29

Annex 5 . Beneficiary Survey Results

Third Party Monitoring and Beneficiary Satisfaction Surveys were conducted in 2012 and

2014. This section provides an overview of the process and results.

The First Third Party Monitoring and Beneficiary Satisfaction Survey was

conducted in 2012, in 14 sampled districts. 34 percent of beneficiaries of Component 1

were selected randomly for the survey. The table below shows the distribution of the

sample over the 14 districts.

(a) First Beneficiary Assessment Sample Breakdown by District

District Total No. of

Beneficiaries

Survey

Sample

Panchthar 180 62

Morang 237 81

Udaypur 115 40

Sindhupalchowk 290 99

Chitwan 205 70

Shinduli 218 74

Gorkha 375 128

Parbat 88 30

Nawalparasi 212 72

Jumla 259 88

Rolpa 932 317

Bardiya 355 121

Kailali 523 178

Dadeldhura 139 48

Total 4,128 1,408

Key Findings

Awareness

37% of respondents stated that they received the information from the local media;

33% from local political party leaders; 17% from the VDC or municipality; and the

remaining 14% from social workers and other beneficiaries.

The majority of beneficiaries (75.3%) were aware of the amount they were supposed

to receive. The participants of Morang (98.8%) expressed the highest level of

awareness while the participants of Dadeldhura (5.3%) expressed the least.

Application process

About 51.5% of respondents said they did not face any problems while applying for

the cash payments. 32% said they faced problems in compiling supporting documents

like relationship verification certificates, death certificates, and citizenship certificates.

16.5% said they had difficulty in meeting the VDC secretary.

30

The average time taken for application processing varied across districts. On average,

it took about 15 months to receive payments after filing the application. The

beneficiaries had to visit the district headquarters 11 times on average to follow up on

the process. 81.5% of respondents stated that the government officials were friendly

in processing their application once the proper documents had been submitted.

Only a small number (12%) of respondents thought that the location of the bank was

suitable. In Morang, only 1.2% of those interviewed said that the bank was close to

them. In districts like Kailali (81.0%), Bardiya (59.8%) and Dadeldhura (73.7%), a

significant number of beneficiaries had trouble accessing the banks.

Among the beneficiaries surveyed, 74.8% were satisfied with the time they had to

spend to receive the support; 80.0% and 80.7% were satisfied with the process they

had to go through to deal with DDC/DAO/VDC officials and local political party

leaders respectively; and 65.8% were satisfied with the ease with which they could

reach the bank.

The vast majority of survey participants (85%) said they were satisfied with the

overall service delivery process. About 2% stated that they were highly satisfied,

about 8% said they were not satisfied and 6% said they were very dissatisfied. Most

of those who were not satisfied complained that the service delivery process was too

long and they had to spend a lot of money (up to NPR 20,000 in Morang, Bardiya and

Kailali districts) to receive the support funds.

Impact

The survey asked about the social impacts felt by beneficiaries as a result of receiving

the payments. About 58% said they did not feel any change, while 22.5% stated that

social interactions such as participation in social and cultural functions increased.

About 8.6% felt their neighbors were friendlier after they received the support; 4.9%

felt happier; and 5.2% felt harassed by their neighbors asking for loans.

The relief support has helped increase the confidence of many widows and close

family members. This, in turn, has encouraged them to improve their livelihood by

purchasing property (11% of males and 9% of females); repaying loans (16% of

males and 15% of females); and repairing their houses (9% of males and 7% of

females). 15% of males and 13% of females are saving the relief support for future

use. 20% of females and 15% of males invested the money in education.

Monitoring

According to the regulations, the DAO was supposed to conduct a field verification.

In the sampled 14 districts only 15% respondents said the DAO visited for

verification.

A significant number of beneficiaries (48.4%) thought that the government should use

VDCs to develop prompt and reliable service mechanisms. Similarly, about 43.4%

beneficiaries felt that the government should develop more simple, prompt and

reliable systems to support disadvantaged people.

31

The Second Third Party Monitoring and Beneficiary Satisfaction Survey was

conducted in 2014 in 10 sample districts. 20 percent of beneficiaries of Components 1

and 2 were selected randomly for the survey. The table below shows the breakdown of

the sample by district.

(b) Second Beneficiary Assessment Sample Breakdown by District

District Component 1 Component 2 Total

Bens

Survey

Sample Total Sample Families Widows Total Sample

Jhapa 357 72 248 162 410 83 767 155

Taplejung 200 40 256 161 417 83 617 123

Saptari 219 44 139 89 228 47 447 91

Sarlahi 220 29 168 123 291 62 511 91

Dolakha 240 50 215 153 368 74 608 124

Kavre 364 73 342 225 567 119 931 192

Gulmi 80 15 145 103 248 50 328 65

Palpa 140 29 111 85 196 40 336 69

Surkhet 435 90 327 263 590 119 1,025 209

Jajarkot 280 56 482 356 838 167 1,118 221

Total 2,535 498 2,433 1,720 4,153 844 6,688 1,342

Key Findings

Component 1

Situation before training

Graduates were asked their geographic location before and after participating in the

training. Prior to attending the training, about 70% of graduates said they were living

in rural areas, 21.7% in urban areas, and 6% in semi-urban areas. Their geographic

location after graduating from the training was 64.3% in rural areas, 9.2% in semi-

urban areas, 26.3% in urban-areas, and 0.2% overseas.

Impact

61.6% participants evaluated the training as ‘moderate’, 34.1% as ‘good’, and 4.3%

as ‘weak’.

Prior to training, about 75.3% of participants were unemployed (of which 61.8% were

females and 38.2% males), 16.5% of participants were engaged in other types of

business, and 7% were engaged in further training.

After the training, 29.4% of graduates were working in the same trade in which they

had received training and 16.6% were working in a different trade. 54% were

unemployed at the time the survey was conducted. The main reason for the low

observed employment rate (relative to the higher post-training employment rate

reported in the results indicators) is because this survey was conducted earlier and

many trainees had only just graduated.

Participants were asked about the change in their socio-economic conditions after

participating in the skill training programs. About 50.6% reported an improvement,

32

and the remaining 49.4% reported no change. In terms of ethnic group, the most

positive changes were observed among Adivasi/Janajati (25.5%), followed by Chhetri

(23%) and the lowest amongst the most disadvantaged castes and groups (9.9%).

Graduates were asked about their overall satisfaction from the training program.

About 79% said they were satisfied with the training. Major reasons for their

satisfaction were: expectations fulfilled (32.6%); good facilities provided (17.1%);

sufficient teaching materials (10.4%); increase of employment opportunities (34.6%);

and market-oriented training (5.2%).

Component 2

Process and overall satisfaction

About 99.5% of eligible families received the main payment of NPR 100,000, while

90.7% received the additional payment of NPR 200,000. 81.9% of widows received

the cash benefit of NPR 25,000.

The Beneficiary Satisfaction Survey reported that 54.4% respondents were satisfied

with the cash distribution process. Major reasons stated were timely receipt of cash

benefits (54.4%); behavior of staff (27.9%); support from political parties (27.5%);

and good cooperation from LPC members (19.2%).

45.6% of beneficiaries were dissatisfied with the payment process, due to the

following reasons: length of the process (42.9%); effort required to provide

documentation (39.2%); cost of obtaining documentation (20.9%); insufficient benefit

amount (52.1%); and other reasons (12.0%).

31.5% of respondents lodged complaints regarding the cash transfer process. 36.4%

of males and 28.9% of females lodged complaints.

Impact

When asked how the beneficiaries spent the cash support, 52.7% said they invested it

in fixed assets; 50% used it for their children’s education; 38.4% spent it on food;

17.9% spent it on income generating activities; 36.5% used it to settle debts; and

6.8% spent it on other activities.

The majority of the respondents (52.1%) stated that cash benefits helped them

improve their welfare. About 17.9% of respondents said the support helped them

increase their social recognition and reintegrate. The figures were higher among

female beneficiaries: 76.2% of women reported increased social recognition, and

68.2% reported improved living conditions.

33

Annex 6. Stakeholder Workshop Report and Results

A stakeholder workshop was not held as part of the project or ICR.

34

Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR

Executive Summary of

Project Completion Report

for

Emergency Peace Support Project

Prepared by Government of Nepal

Ministry of Peace and Reconstruction

Emergency Peace Support Project (EPSP), a project under the Ministry of Peace and

Reconstruction (MoPR), with the grant support from the World Bank (WB) closed on

30th June, 2014. The project targeted relief and rehabilitation of Conflict Affected

Persons under 3 components namely 1) Rehabilitation support to the conflict-affected

families and individuals; 2) Cash benefits to the families and widows of those killed as a

result of conflict; and 3) Capacity building of key institutional structures in support of

peace process and project management support.

The project aimed at 1) At least 95 % (of estimated eligible 14,800 families of the

deceased and 4,700 widows) receive cash payments, following the operations guidelines;

2) At least 90% of eligible (estimated 25,000) conflict-affected widows, orphans, those

disabled in the conflict, families of those killed in the conflict, families of the disappeared,

Internally Displaced Persons (IDPs), and those abducted during the conflict, who seek

skills and employability rehabilitation services receive them and according to the project

operational guidelines; among which at least 30% are female CAP;

At the end of the Project, records from various districts indicates that 1) 14,375 eligible

families received NPR 100,000.00; 2) 1,882 eligible families received NPR 200,000.00;

3) 4,640 widows of the deceased received NPR 25,000.00 under component I, whereas

14,770 Conflict Affected Persons of different categories received various technical and

vocational education training under component II. Capacity building of the related

stakeholders under component III helped support the procurement of goods, services and

some operating costs to expedite operations under component I and II.

Initial estimated cost of the Project was USD 50 Million which was restructured on Dec 7,

2013 with Reallocated Project cost to be USD 36.5 Million.

The total spending of the project was NPR 5,685,812,048.41 of which NPR

2,912,830,287.25 (i.e. 51.23%) was borne by the Government of Nepal and the rest NPR

2,772,981,048.41 (i.e. 48.77%) by the World Bank under IDA Grant No. H367 Nep.

Component-wise expenditure of IDA Grant indicates NPR 630,797,575.20 under

Component I, NPR 1,782,876,729.00 under Component II A and NPR 74,379,165.33

under Component II B and NPR 284,928,291.63 under Component III.

Piloting of Employment/Self-Employment Service (ESES) was quite successful and its

roll out to additional 42 was excellent. Procurement proceedings for further roll out of the

ESES Services to 19 districts were almost completed but could not operationalized due to

35

insufficient time available to complete the activity cycle after denial of time extension

from the World Bank. Such proceedings were, later, cancelled with the consent of the

Bank.

A robust Management Information System (MIS) is established in the Ministry; tracing

of victim's information in 20 districts completed; capacity building of supporting peace

institutions were operationalised; social audit and third party monitoring and beneficiary

satisfaction surveys were completed are some of the key achievements of the project

though the testing of our efforts through impact evaluation could not be completed.

Several policy documents, tools and instruments like Field Implementation Manual;

Monitoring Guidelines etc. were developed through this project and are in use as policy

documents.

Learning from the project implementation have immense potentials and shall be

materialized to implementing similar service in the remaining 19 districts for

employment/self-employment service and all 75 districts for psychosocial counselling

service. The Ministry is very much convinced to sustainably embedding its learning for

future activities.

Finally, our assessment of the implementation of the project is relatively successful

though project was a bit delayed due to some unavoidable circumstances in the country.

36

Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders

N.A.

37

Annex 9. List of Supporting Documents

23 Point Agreement between Seven Party Alliance, December 2007.

IDA Interim Strategy Note for Nepal, January 22, 2007. Report No. 38119-NEP.

Implementation Status and Results Report, Nepal: Peace Support Project. Various, 2009-

2014.

Emergency Project Paper, Nepal: Peace Support Project. Report No. 43172-NP.

EPSP Project Completion Report by the Government of Nepal, Ministry of Peace and

Reconstruction. Mimeo, December 2014.

Project Restructuring Paper, Nepal: Peace Support Project, 2010. Report No. 54421-NP.

Project Restructuring Paper, Nepal: Peace Support Project, 2012. Report No. 69820 v1.

Nepal Country Partnership Strategy, 2014-18. Report No. 83148-NP.

38

Annex 10. Original and Revised Project Components (At First Restructuring)

Original Components Original

(US$ m)

Revised Components Revised

(US$ m)

Component 1.

Transitional safety net payments

to Maoists in cantonments during

the transition period

Component 1.

Rehabilitation support to conflict-

affected families and individuals

(a) Cash payments 18.0 (a) Implementation in select

districts

14.0

(b) Incremental recurrent costs 0.55 (b) Incremental recurrent costs 0.5

Component 2.

A. Benefits to families and

widows of those killed as a result

of the conflict

Component 2.

Benefits to families and widows

of those killed as a result of the

conflict

(a) Benefit payments to

survivor families of people

killed as a result of the conflict

22.8 (a) Benefit payments to

survivor families of people

killed as a result of the conflict

27.5

(b) Incremental recurrent costs 0.45 (b) Payments for widows of the

deceased

3.6

B. Reintegration support to other

conflict-affected groups

5.0 (c) Incremental recurrent costs 0.7

Component 3.

Capacity building of key

institutional structures in support

of the peace process and project

management

Component 3.

Capacity building of key

institutional structures in support

of the peace process and project

management

(a) Capacity building and

technical assistance for the

MOPR to perform their core

functions more effectively

(b) Training and technical

assistance for other actors in

the peace process

2.8 (a) Capacity building and

technical assistance for the

MOPR to perform their core

functions more effectively

(b) Training and technical

assistance for other actors in

the peace process

2.8

(c) Support for core project

implementation tasks of the

PMT including evaluation of

project interventions and goods

0.4 (c) Support for core project

implementation tasks of the

PMT including evaluation of

project interventions and goods

0.4

Contingencies 0.5

Total Project Cost 50.0 50.0

39

MAP