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Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: 72939-PK
EMERGENCY PROJECT PAPER
ON A
PROPOSED GRANT
IN THE AMOUNT OF US$ 18.0 MILLION
UNDER THE MULTI DONOR TRUST FUND FOR
KHYBER PAKHTUNKHWA, FEDERALLY ADMINISTERED TRIBAL
AREAS AND BALOCHISTAN
TO THE
ISLAMIC REPUBLIC OF PAKISTAN
FOR A
KP SOUTHERN AREA DEVELOPMENT PROJECT
September 28, 2012
This document has a restricted distribution and may be used by recipients only in the
performance of their official duties. Its contents may not otherwise be disclosed without World
Bank authorization.
2
CURRENCY EQUIVALENTS
(Exchange Rate Effective September 19, 2012)
Currency Unit = Pakistan Rupee
94.51 = US$1
FISCAL YEAR
July 1 – June 30
ABBREVIATIONS AND ACRONYMS AAA Analytical and Advisory Activities
ACS Additional Chief Secretary
ADB Asian Development Bank
CAF Crisis Analysis Framework
CDD Community Driven Development
CEIG
CPS
Clustered Economic Interest Group
Country Partnership Strategy
CSO Civil Society Organization
DA Designated Account
DCO District Coordination Officer
DG Director General
DNA Damage and Needs Assessment
EDO-
CDD
Executive District Officer for Community
Driven Development
EIG
EIRR
Economic Interest Group
Economic Internal Rate of Return
ESA Environment and Social Assessment
ESFP Environmental and Social Focal Points
ESMP Environmental and Social Management Plan
ESSAF Environmental and Social Screening and
Assessment Framework
EU European Union
FATA Federally Administered Tribal Areas
FM Financial Management
FR Frontier Region
FY Financial Year
GDP Gross Domestic Product
GoP Government of Pakistan
GPS Global Positioning System
ICT Information Communication Technology
IDP Internally Displaced Person
IRR Internal Rate of Return
ISR Implementation Status and Results Report
IUFR Interim Unaudited Financial Report
KP Khyber Pakhtunkhwa
LGERDD Local Government, Election and Rural
Development Department
M&E Monitoring and Evaluation
MDTF Multi Donor Trust Fund
NCRD National Center for Rural Development
NGO Non-Governmental Organization
O&M Operation and Maintenance
ORAF Operational Risk Assessment Framework
PaRRSA Provincial Reconstruction, Rehabilitation
and Settlement Authority
PARD Pakistan Academy for Rural Development
P&D Planning and Development
PCNA Post Crisis Needs Assessment
PIU Project Implementation Unit
PKR Pakistan Rupee
PMU Project Management Unit
PPP Public-Private Partnership
PPCP Public-Private and Community Partnership
PSC Project Steering Committee
SAR South Asia Region
TA Technical Assistance
UNDP United Nations Development Program
USAID United States Agency for International
Development
WB World Bank
Vice President: Isabel M. Guerrero
Country Director: Rachid Benmessaoud
Sector Director: John Henry Stein
Sector Manager: Shobha Shetty
Task Team Leaders: Tahira Syed and Chukwudi Okafor
2
PAKISTAN
KP Southern Area Development Project (KP-SADP)
CONTENTS
Page
A. Introduction ......................................................................................................................... 6
B. Emergency Challenge: Country Context, Recovery Strategy and Rationale for Proposed
Bank Emergency Project............................................................................................................. 7
C. Bank Response: The Project ............................................................................................. 11
D. Implementation Arrangements.......................................................................................... 18
E. Appraisal of Project Activities .......................................................................................... 21
F. Key Risks and Mitigating Measures ................................................................................. 28
G. Terms and Conditions for Project Financing .................................................................... 28
Annex 1: Detailed Description of Project Components ........................................................... 29
Annex 2: Results Framework and Monitoring ........................................................................ 34
Annex 3: Summary of Estimated Project Costs ....................................................................... 36
Annex 4: Operational Risk Assessment Framework (ORAF) ................................................ 37
Annex 5: Financial Management and Disbursement Arrangements ..................................... 41
Annex 6: Procurement Arrangements ...................................................................................... 48
Annex 7: Implementation and Monitoring Arrangements ..................................................... 55
Annex 8: Project Preparation and Appraisal Team Members ............................................... 66
Annex 9: Environmental and Social Safeguards Framework ................................................ 67
Annex 10: Economic and Financial Analysis ........................................................................... 74
Annex 11: Documents in Project Files ...................................................................................... 76
Annex 12: Statement of Loans and Credits .............................................................................. 77
Annex 13: Country at a Glance ................................................................................................. 79
Annex 14: Maps........................................................................................................................... 81
3
PAKISTAN
(KP-SADP)
EMERGENCY PROJECT PAPER
SOUTH ASIA REGION
Basic Information
Country Director: Rachid Benmessaoud
Sector Manager/Director: Shobha Shetty / John Henry Stein
Team Leaders: Tahira Syed and Chukwudi Okafor
Project ID: P-130835
Expected Effectiveness Date: Oct. 31, 2012
Lending Instrument: Multi Donor Trust Fund
Sectors: Water, sanitation and flood protection 40%; Public Administration, Law, and
Justice 20%; Health and other social services 20%; and Agriculture, fishing, and forestry
20%.
Themes: Participation and civic engagement 50%; Conflict prevention and post-conflict
reconstruction 20%; Rural services and infrastructure 20%; and Other rural development
10%.
Environmental category: B
Expected Closing Date: June 30, 2015
Project Financing Data
[ ] Loan [ ] Credit [ X ] Grant [ ] Guarantee [ X ] Other: MDTF
Financing Plan (US$m)
Source Total Amount (US $m)
Total Project Cost:
Multi Donor Trust Fund:
Borrower:
Other:
Total Project Financing
18.0
18.0
0
0
18.0
Client Information
Recipient: Islamic Republic of Pakistan
Responsible Agencies: KP Secretariat
Contact Persons:
1. Saleem Khan, Secretary Planning and Development
Government of Khyber Pakhtunkhwa, Peshawar
Telephone No.: (091) 9210516
Email: [email protected]
2. Aurangzeb Khan, Secretary Local Government, Election & Rural Development
Local Government, Elections and Rural Development Department (LGERDD)
Government of Khyber Pakhtunkhwa, Peshawar
Telephone No.: (091) 9211450
3. Faiz Muhammad Khan, Project Director
Southern Area Development Project
4
Local Government, Election and Rural Development Department
Government of Khyber Pakhtunkhwa, Peshawar
Telephone No.: (091) 9211450 and 9210596
Email: [email protected]
Estimated disbursements (Bank FY/US $m)
FY 2012/13 2013/14 2014/15 2015/16
Annual 3.3 8.6 6.1
Cumulative 3.3 11.9 18.0
Project Development Objective and Description
Project development objective:
To strengthen the capacity of the poor to improve their livelihood options through access to
social and productive infrastructure using participatory approaches in the selected southern
districts of Khyber Pakhtunkhwa province.
Project description:
The proposed project seeks to address the recovery and rehabilitation needs in three (3) districts
in the Southern KP province i.e. Dera Ismail Khan (DIK), Tank and Lakki Marwat, which are
adversely affected by the crisis. The project components include:
Component A: Community Development Support: This would include facilitating
communities to mobilize into economic interest groups at village and district levels; develop
their capacities, provide advisory services and input support; and finance a communications and
knowledge program. The output of this capacity building and planning process will be a
community action plan (CAP) on which consensus has been reached with members of clustered
economic interest groups.
Component B: Community Driven Investment Program: This component includes three sub-
components that focus on providing the targeted communities with: (i) social infrastructure; (ii)
on-farm and off-farm productive infrastructure for agriculture and its subsectors; and (iii)
provide asset building support for poorest groups. The component will lead to empowering the
communities and households in creating economic opportunity for self-reliance activities.
Component C: Project Implementation Support: This component would include providing
capital and incremental operating costs for implementation of the project; technical assistance
for quality delivery and impact assessments including functional reviews and third party
monitoring; and a functional and well-communicated complaints handling system.
Safeguard and Exception to Policies
Safeguard policies triggered:
Environmental Assessment (OP/BP 4.01)
Natural Habitats (OP/BP 4.04)
Forests (OP/BP 4.36)
Pest Management (OP 4.09)
Physical Cultural Resources (OP/BP 4.11)
[ X ]Yes [ ] No
[ ]Yes [ X ] No
[ ]Yes [ X ] No
[ ]Yes [ X ] No
[ ]Yes [ X ] No
5
Indigenous Peoples (OP/BP 4.10)
Involuntary Resettlement (OP/BP 4.12)
Safety of Dams (OP/BP 4.37)
Projects on International Waterways (OP/BP 7.50)
Projects in Disputed Areas (OP/BP 7.60)
[ ]Yes [ X ] No
[ ]Yes [ X ] No
[ ]Yes [ X ] No
[ ]Yes [ X ] No
[ ]Yes [ X ] No
Does the project require any exceptions from Bank policies?
Have these been approved by Bank management?
[ ]Yes [ X ] No
[ ]Yes [ ] No
Conditions and Legal Covenants:
Description of Condition/Covenant Date Due
KP Government to adopt an Operations Manual for Components A
and B of the Project. KP Government to implement the Project in
accordance with the Operations Manual.
Condition for Bank
approval
KP Government to establish a Project Steering Committee. Within one (1) month
after signing of legal
agreements
KP Government to complete staff hiring and training. KP
Government to ensure the key positions of Project Director, EDO-
CDD and Facilitators are filled with qualified staff and are retained
for the life of Project.
Within three (3) months
of negotiations
KP Government to maintain a Project Management Unit within the
Local Government, Election and Rural Development.
Throughout Project
implementation
KP Government to prepare Annual Work Plans and Budget for the
Project by no later than April 30th of each year.
Throughout the Project.
First annual work plan
and budget within one
(1) month after signing
of legal agreements
Project to be implemented pursuant to the safeguard instruments
(namely, the ESSAF and the Project ESA). Recipient and KP
Government to avoid any involuntary resettlement
Throughout Project
implementation
KP Government to incorporate the Project in to the PIFRA system. Within nine (9) months
after signing of legal
agreements
6
PAKISTAN
KP SOUTHERN AREA DEVELOPMENT PROJECT (KP-SADP)
EMERGENCY PROJECT PAPER
SOUTH ASIA REGION
A. Introduction
1. The Regional Vice President (RVP) of the World Bank agrees to provide a GRANT
under the KP/FATA/Balochistan Multi Donor Trust Fund (MDTF) in an amount of US$ 18.0
million to Pakistan for a KP Southern Area Development Project (KP-SADP).
2. The proposed GRANT would help finance the costs associated with the recovery and
rehabilitation needs in the Khyber Pakhtunkhwa (KP) province as a result of the militancy crisis.
It will help support the Government of KP respond to the crisis in affected areas by financing
investments for community development activities, basic services and small scale productive
infrastructure. The project will be implemented by the Local Government, Election and Rural
Development Department (LGERDD) of KP in collaboration with line departments and the
respective local administrations.
3. The KP-SADP, will cater to the economic rehabilitation needs of local communities in
KP as identified by the Post Crisis Needs Assessment (PCNA)— prepared by the Government
of Pakistan (GOP) with support from Asian Development Bank, European Union (EU), the
World Bank (WB), and the United Nations (UN)—and formally issued in October 2010. The
Bank is targeting its interventions through a Multi Donor Trust Fund (MDTF) established for
KP, FATA and Balochistan. The MDTF became operational in August 2010 and now represents
pledged commitments of $140 million. The MDTF Steering Committee (comprising
representatives of the Federal and Provincial Governments and FATA, ten donors to the MDTF,
and the advisory group) endorsed the Strategic Framework, including its four pillars: (1)
Restoring Damaged Infrastructure and Disrupted Services; (2) Improving Local and Provincial
Service Delivery; (3) Supporting Livelihoods and Creating Job Opportunities; and (4) Capacity
Building and Institutional Strengthening. The guidance from the Steering Committee focused
primarily on ensuring speed in preparation and implementation of the projects; working with a
results framework; seeking the most strategic uses of the MDTF as a funding mechanism, and
ensuring adequate communications within the Steering Committee and with the beneficiaries.
4. The proposed project will finance recovery and rehabilitation needs, under the World
Bank’s Operational Policy 8.0, in three (3) districts in southern KP province—i.e. Dera Ismail
Khan (DIK), Tank, and Lakki Marwat —which have been adversely affected by the crisis. The
selection of these districts is based on several factors including: (i) prevailing low human
development indices even before the onset of the militancy crisis (all three districts are amongst
the poorest 25 districts in the country); (ii) proximity to the Tribal Agencies of FATA (in
particular the South Waziristan Agency that is under ongoing military operation); and (iii) all
three districts were recipients of the largest number of Internally Displaced People (IDPs) that
left the Tribal Agencies during the military operation in 2009. The proposed project is not co-
7
financed by other multilateral or bilateral agencies. However, project activities, will be closely
coordinated with other donors that participated in the PCNA.
B. Emergency Challenge: Country Context, Recovery Strategy and Rationale for
Proposed Bank Emergency Project
Country Context
5. The northwestern region—comprising KP and FATA—has consistently been one of
the poorest parts of Pakistan. Both areas lag behind other provinces on a wide range of social
and economic indicators, with the lag even more pronounced when viewed through a gender
lens. Illiteracy rates are as high as 68 % for women and 33% for men, respectively. The
estimated GDP growth for KP was already slowing in the period leading up to mid-2009,
declining to around 3 percent in 2007/8, compared to 4.2 percent for Pakistan. KP has also
consistently experienced far higher rates of unemployment than the rest of the country (see
Figure 1 below1). The absence of visible progress contributes to a widely-held perception that
existing government institutions lack either the interest or capacity to meet the basic needs of the
population.
Note: NWFP is the former name of KP province.
6. The unemployment amongst young men aged 15-30 is in particular a matter of
concern as this is the main resource pool for militant recruitment. Young men generally lack
access to capital and other avenues to productive livelihoods. The KP and FATA region hosts
among the largest demographic segments of unemployed youth in the country. This age group of
young men was particularly exploited as the most critical human resources pool for rank-and-file
militants. In the absence of substantial competitive economic alternatives, financial incentives
1 Post-Crisis Needs Assessment, 2012
0
2
4
6
8
10
12
14
1992/93 1999/2000 2001/02 2005/06 2006/07 2007/08
(%)
Figure 2: Trends in Unemployment Rates Across Provinces
1992/93 - 2007/08
Punjab
Sindh
NWFP
Balochistan
Figure 1: Trends in Unemployment Rates across Provinces
8
were provided by the militant groups to sway many young men to join their forces. As illustrated
in the Table 1 below2, the stipend for a legal, well-paying unskilled job is half as much as the
typical militant stipend offered by these elements.
7. Acute development disparities create an environment conducive to conflict. Although economic backwardness, low human development and relative poverty do not by
themselves give rise to violence, they do provide the underlying structural conditions that
militant groups can exploit to achieve their goals by promising better opportunities and hope for
social justice and equity. In a permissive environment that provides few economic options (other
than the illicit economy), militants' prospects for success are greatly enhanced. The selected
southern districts of DI Khan, Lakki and Tank are predominantly rural with poor infrastructure,
an acute shortage of basic services, lack of economic opportunities and serious governance issues
that collectively fuel the crisis. Large sections of the population still lack access to electricity,
clean drinking water and sanitation facilities. Even where rudimentary facilities exist, service
levels are barely functional. The three districts identified for implementation under this project
are amongst the poorest 25 districts in the country with poor human and social infrastructure and
development indicators even before the onset of the militancy crisis.
8. Agriculture and livestock are the dominant economic sectors, but unemployment,
especially among young men, is very high. Unemployment among young men aged 15-24
years is 10.5 percent in KP and dramatically higher in tribal areas as compared to the settled
districts. The ranks of the unemployed rose as the crisis intensified in 2009/10, and continue to
rise. Militant groups offer economic incentives for potential recruits that greatly outweigh
alternative available options, thus drawing them into the conflict. Many people depend on the
black economy—drug trafficking and criminal activity—to survive. Over time, militant groups
have become increasingly active in the region, and pushed further east across the settled districts
of KP into Swat.
9. In early 2009, the Government of Pakistan (GoP) launched major military
operations in the KP-FATA to eliminate the local pockets of militants. The conflict has
imposed a huge economic cost, on top of the obvious human tragedy. The crisis affected areas
constitute 15% of the combined area of KP and FATA, are home to about 18% of the population,
and account for some 17% of the value added. The military operations led to significant damage
to physical infrastructure and services while displacing some 3 million people. While the
2 Information provided by communities and other stakeholders during consultations held as part of the PCNA.
Table 1: Income Comparisons for Young Men
9
majority of the internally displaced persons (IDPs) have returned to their places of origin, many
have lost their homes and livelihoods. Those who stayed behind have suffered equally and tend
to be just as poor and vulnerable as the IDPs.3
10. The existing social structures in the KP largely comprises of Jirga which is often
seen as contributing to the local informal decision making and resource distribution
system. While the Jirga (traditional village councils of elders) upholds the traditional Pashtun
Wali (code of life), at time it assumes a self-acclaimed authority as a dispute resolution
mechanism and is subject to elite capture by local influential elements. Nevertheless, the
existence and wide-spread acceptance of the traditional Jirga system makes it an essential
stakeholder for outreach to rural and often remote communities in the region. Also, this system
provides an obvious entry point to community participation as it has the convening power for
rallying communities around issues of common concern e.g. local development and access to
social service delivery structures. The Jirga has also played an important role in the response
from local communities to infiltration by the militancy elements. The Jirga led Lashkar (combat
groups of local men) were formed to partner with the law enforcement agencies in gathering
intelligence as well as carry out boundary patrolling of the local villages during the crisis. The
government (federal and provincial) recognizes the contributions made by the Jirga system in
restoring government’s writ in many parts of KP and FATA. While the development contribution
from Jirga is yet to be fully explored, there is a broad acknowledgement of the existence and
potential for this system to promote participatory approaches for local and remotely located
communities.
11. Local/decentralized systems for service delivery existed in the form of 2001 Local
Government Ordinance, which is currently suspended and a modified form of
decentralized governance structure has been approved by the Provincial Assembly but is
yet to be implemented. In whichever shape or form this system comes, it is critical for effective
and participatory governance for building peace and gaining the trust of citizens and for ensuring
that the government priorities are focused on the wishes of the electorate. The development
planning, while it continues in the KP, will require clarity and strengthening of the role of local
governments in the province as soon as these are formally announced by the Government.
12. Consultations with different stakeholder groups have informed the project
preparation process. These groups included community representative groups from the selected
districts, local opinion makers and district administration officials. Separate consultations were
held with a representative group of women from the local areas. The key feedback from the
stakeholder consultations included: (i) there is consensus on community driven process for
development in these areas; (ii) there is a need for prioritizing activities that directly improve
economic status of the households; (iii) agriculture and livestock are key activities of the local
communities and the focus of this project should remain on building opportunities for economic
growth in these sectors; (iv) the agriculture and livestock sector development should be looked
at in a holistic manner where on-farm and non-farm production cycles are also developed along
value chain approaches; and (v) given the large development gap in the selected districts, social
3 Based on the household survey data analysis reported by ‘Food Security and Market Assessment in Crisis Affected
Areas of KP and FATA’, World Food Program, 2010.
10
service delivery including health, education and water and sanitation should also be included in
the program.
Government Response and Partnership Arrangements
13. The impact of conflicts spurred the GoP and donors to respond in helping KP and FATA
rebuild infrastructure, livelihoods, and governance structures. The GoP requested emergency
World Bank support to address the effects of this conflict. This emergency operation will support
community development activities including reconstruction /rehabilitation of selected priority
infrastructure and livelihood development program.
14. The GoP was quick to initiate the rapid post-crisis recovery and reconstruction efforts in
collaboration with international and national humanitarian agencies. In 2009, the GoP asked the
Asian Development Bank (ADB) and the World Bank to jointly conduct a Damage and Needs
Assessment (DNA) to ascertain the impact on various sectors and local communities. Since the
beginning, donor support has been coordinated by the Planning Commission at the Federal
Level, while, the Provincial Rehabilitation, Reconstruction and Settlement Authority (PaRRSA)
was established to coordinate and implement these initiatives for both KP and FATA. The
Assessment covered the areas first affected by the GoP’s action to combat the militants4.
15. In view of the complex nature of the crisis and in order to address the root causes that
lead to the crisis in a sustainable manner, GoP also requested development partners—WB, the
ADB, the United Nations Development Program (UNDP), and the European Union (EU) to
jointly prepare a PCNA covering post crisis transitional/stabilization, medium term
transformation/institution building, and consolidation/development periods. The PCNA,
completed in 2010, assessed and quantified the short- and medium-term social and economic
needs of the region. Recognizing the need for a harmonized approach to respond to the crisis, the
GoP asked the Bank to administer the MDTF for the recovery and rehabilitation of the crisis
affected areas of KP, FATA, and Balochistan.
16. The PCNA provides the underpinning for long term peace building in affected parts
of the KP province. Drawing on extensive stakeholder consultations, the PCNA identifies key
crisis drivers and the consequent priority areas that need to be addressed to support a coherent
and durable peace-building strategy. These have been organized into four strategic objectives
related to political and governance reform, employment and livelihood opportunities, provision
of basic services, and efforts for counter-radicalization and reconciliation.5 The KP-SADP
responds to the Strategic Objectives 2 and 3 of the PCNA.
17. The proposed Project supports the government’s strategic objective to enhance growth in
rural on-farm and non-farm sectors to generate employment, ensure income diversification and
reduce poverty; as well as improve productive capacity and access to services to achieve
sustainable livelihoods. This will be achieved by increased organization and inclusion of the poor
4 Four districts in KP: Swat, Upper and Lower Dir, Buner, Shangla; and two agencies in FATA: Mohmand, and
Bajaur. 5 The key strategic objectives of the PCNA are: (i) enhance responsiveness and effectiveness of state to restore
citizen trust; (ii) stimulate employment and livelihood opportunities; (iii) ensure provision of basic services; (iv)
counter-radicalization and reconciliation
11
including women, youth, disabled and ultra-poor households – in community institutions and
their (a) enhanced participation in economic activities, (b) skill enhancement for taking-up
higher value employment, (c) increased asset base to improve productivity and incomes, and (d)
improved infrastructure and market linkages. The Project has mainstreamed gender into its
objectives and design. The Project will provide financial support to the recovery of subsistence
and commercial agricultures (inputs, rehabilitation etc) for livelihoods as well as its long term
restructuring to build growth and employment.
18. The primacy of agriculture and livestock in employment and livelihoods is
maintained in the KP province. Being predominantly an agrarian economy (approximately
79%), the livelihoods in almost all parts of KP are largely based on agriculture and livestock.
The PCNA consultations emphatically identified these sectors as the most critical in restoring
employment and livelihood opportunities across the region. In KP agriculture accounts for 22%
of the provincial GDP, but almost 44% of the employment in the province. Some 80% of the
population relies upon agriculture for a large part of their income6. Since many men work away
from home, a large number of women are also engaged in agricultural activities although often
without access to the associated extension and support services. Due to the agro-climatic
conditions prevalent in the region, the rural economy is mainly pastoral with agriculture practices
in valleys and two distinct farming systems i.e. irrigated and rain-fed. In arid areas, livestock
hold more importance for livelihoods than cropping. In these areas, households keep up to 3
cows/buffalos, 5-8 sheep or goats, and 6-10 poultry. Women maintain an important role in caring
for the livestock as much of their income derives from this. During the consultations, clear
priority was placed on quick revival of agriculture through replacement of basic lost asset such
as livestock, feed, seeds, fertilizers and farm tools. Equal importance was accorded to facilities
for basic agriculture support services including advisory services, access to rural finance,
extension services e.g. animal health and fruit, forest and fish nurseries with interventions geared
to the needs and requirements of specific agro-ecological areas. Additionally, given that most
farmers in KP have small plots of less than 5 acres (2 ha) of land with a few livestock, the KP-
SADP design is conceived to respond to the needs of these farmers. In areas, where good land
and water resources are scarce, agriculture cannot provide income and employment without
associated interventions. Some level of skill development for better employment of youth from
these areas would directly contribute to remittances for sustained livelihood and prosperity.
C. Bank Response: The Project
Brief Description of Bank’s Strategy for Emergency Support
19. The proposed Project is in line with the Bank’s operational policy OP/BP 8.00 and
addresses the key challenges of restoring and creating systems for basic service provision in
southern districts KP that were adversely affected from the crisis. KP-SADP is adapted to the
emergency's particular circumstances as also reflected in the Bank’s Country Partnership
Strategy (CPS), which recognizes that conflict and insecurity represent major obstacles to
economic development and poverty reduction. It contributes to the CPS objectives under Pillar 3:
“Improving Infrastructure to Support Growth” and Pillar 4: “Improving Security and Reducing
the Risk of Conflict”.
6 NWFP (renamed as KP) Economic Report, 2005.
12
20. In response to the DNA and PCNA, the World Bank has established and is administering
an MDTF that will finance critical investments in support of reconstruction and peace building in
the crisis affected areas. It finances stand-alone, flexible projects or program activities, including
those co-financed by the government, bilateral or multilateral agencies7. In the first phase, the
MDTF has US$ 140 million in pledges from ten donors: Australia, Denmark, Finland, the EU,
Germany, Italy, Turkey, UK, USA and Sweden.
21. In addition to the US$18 million allocated from the MDTF to support the livelihoods and
community infrastructure rehabilitation the Bank has also approved the KP and FATA Economic
Revitalization project (US$20 million), which aims to create employment opportunities and
sustainable jobs for the people of KP and FATA. Additionally, the Bank has approved the KP
and FATA Governance Support Project (US$ 6 million), which aims to improve the delivery
efficiency of the PCNA program through institutional strengthening and support of the KP and
FATA, while responding to priority needs of the PCNA governance program. The GoKP has
also prepared the Revitalizing Health Service in KP (US$ 16 million) to improve the availability,
accessibility and delivery of primary and secondary health care services at the district level in six
crisis (militancy & floods) affected districts of KP. Additionally, the KP Roads Project (US$ 8
million) has been launched and another KP Value Chain project (US$ 9 million) has been
approved by the MDTF Steering Committee.
22. The Bank continues to provide advisory support, critical for the success and sustainability
of the overall response to the crisis. This includes sharing best practices in terms of institutional
arrangements to ensure the best possible delivery mechanisms and sound governance
arrangements including tracking of fund flows, procurement practices, grievance mechanisms,
and monitoring and evaluation systems, to ensure accountability and transparency.
Rationale for Proposed Bank Emergency Project
23. The KP-SADP supports the government’s strategic objective to strengthen on-farm and
non-farm income generating activities for the southern most districts of the KP province. These
districts are characterized by poverty and poor development indicators and faced the brunt of
militancy crisis. A large population of the internally displaced persons (IDPs) arrived in these
districts and further burdened the limited economic and natural resources available to the local
populations. The KP-SADP directly responds to the needs of the local population for improved
productivity through sustainable livelihoods in the agriculture and associated sectors. The project
also makes a conscious effort to reach out to the ultra-poor including women, youth, disabled
and elderly households by providing asset building intervention and promoting their participation
in economic activities with skill enhancement for the youth. The KP-SADP operation will
support the financing and implementation of three main components designed to transfer
financial and technical resources to the beneficiary groups in: (i) Community Development
Support; (ii) Community Driven Investment Program; and (iii) Project Implementation Support.
24. The use of the Community Driven Development (CDD) approach in implementation of
KP-SADP as an option for development assistance is well-placed, given good results and strong
7 The priority financing areas of the MDTF are (i) restoration of damaged infrastructure and disrupted services; (ii)
local service delivery; (iii) provincial governance and service delivery; (iv) livelihoods; (v) capacity building and
(vi) institutional strengthening.
13
experience with this approach in Pakistan8 and the South Asia region. In particular, there are
strong examples of successfully using CDD approaches in post-conflict and fragile contexts9
where funds are channeled to the communities who democratically decide on their priority
development plans and manage implementation of these through village/community councils that
are supported through training and technical assistance by local governments and civil society.
Strategic Choices
25. The main strategic choices made in project design include the following:
a. Appropriateness of CDD approaches for demand based development: The PCNA identifies
the significance of CDD approaches in enabling the local communities demand services while
self-identifying the sequence and quality of services needed as part of their development process.
However, while CDD approaches contribute to the self-determination of development priorities
for communities, these need to be complemented with additional interventions that directly
enable communities to become aware of and exercise their rights and voice. In doing so the
communities are increasingly able to hold the government’s delivery mechanisms accountable
for delivering demanded services and with adequate quality. The higher level objective for this
project will provide the complementary interventions of training, technical assistance and
participatory monitoring for inclusive development.
b. To restore citizen trust in government: The PCNA identified citizens’ lack of power and,
voice and the poor access to basic services as constraints to peaceful co-existence and conflict.
The CDD approach used in this Project will empower the poor to effectively organize themselves
to access the goods and services that meet their needs and immediate priorities. This approach
will ensure accountability in delivery of services at the provincial and district levels through
broad-based participation by the poor in the strategies and decisions that affect them. The
Project’s Facilitators will enable the Economic Interest Groups (EIG) to contribute towards
improved governance, institutions, and policies so that provincial and district governments,
NGOs, and the private sector can respond to community demands.
c. To improve livelihood opportunities: The Project will support productive activities, technical
assistance and investment in assets and advisory services identified by communities as relevant
to generation of higher incomes and better livelihoods.
d. To promote socially-inclusive and community-based approaches: Integration of social
inclusion and community-driven principles has proven to be cost-effective, responsive to local
priorities and effective in reducing conflicts within communities. This proven approach10
has
demonstrated that the key to promoting investments that bring both private profitability and
public benefits is to empower people to take charge of their development, improve governance,
and enhance security of the poor.
8 The Community Infrastructure Project phases I and II used the CDD approaches for strengthening local
government systems and making these responsive to the demands and priorities identified by the communities. 9 For instance the National Solidarity Program in Afghanistan, which since 2003 has used CDD approaches to
channel more than US$ 1 billion in funds. 10
For example: Brazil (Parana and Santa Catarina), China Loess Plateau, Fadama II, and Afghanistan (NSP).
14
e. Sustainability issues “what would be left behind”: The investments in building strong social
capital is intended to contribute towards citizen-state trust building. For achieving this intended
higher level objective, the quality of social capital being developed through the community
development support needs to be maintained. It is these Economic Interest Groups (EIGs) that
are likely to evolve into micro and medium enterprises that can tap into the rural finance and
micro credit programs being offered by other projects/programs (e.g. Economic Revitalization
and PPAF etc.). Investing in building a sound capacity, for both exercising their voice and
complying with adequate level of fiduciary performance, would be critical in enabling these
EIGs graduate into bank-able enterprises that are at an advanced level of achieving their
livelihoods objectives beyond this Project. Additionally, given the limited funds available, care
would be needed in village selection process to avoid planting the seeds for conflict if some
communities feel excluded from Project benefits. The scalability of successful pilots would be
prioritized in communities that demonstrate interest but may not be catered in the first phase of
this Project. The scale up could be vertical (i.e. covering additional areas in the same location)
or horizontal (i.e. additional/neighboring locations). Similarly, the KP-SADP intends to adopt an
innovative approach to disseminating information regarding funds flow to the communities with
the use of ICT based banking technologies. Lessons from this innovation would directly feed
into future programs and follow on projects.
Project Description
26. This Project aims to reach the unserved and underserved low income communities in
southern districts of KP. Under this Project, implementation will happen in three (3) districts of
DIK, Tank and Lakki Marwat in order to concentrate coverage, effectively monitor processes
and impacts, and demonstrate the potential of the approach. The selection of these districts is
based on several factors including: (i) prevailing low human development indices even before
the onset of the militancy crisis (all three districts are amongst the poorest 25 districts in the
country); (ii) proximity to the Tribal Agencies of FATA (in particular the South Waziristan
Agency that is under ongoing military operation); and (iii) all three districts were recipients of
the largest number of Internally Displaced People (IDPs) that left the Tribal Agencies during the
military operation in 2009.
27. The key principles for Project design are flexibility, scalability and community
participation. The Project will directly reach out to the communities at village/settlement levels
to create a demonstrable impact of the Project interventions. Based on emerging results from the
pilot interventions initiated during implementation, the potential for scaling up vertically and
horizontally will be identified. The beneficiary selection process would be informed by the
existing data available through the poverty score card completed for the three districts11
. This
information is available through the Bank financed Benazir Income Support Program (BISP) and
will be used in particular for the asset building support for ultra-poor groups.
28. The Project aims to provide opportunities for livelihood support to vulnerable groups and
the poorest households, building social capital—in particular, through skill development and
organization of youth groups, and delivery of cost effective productive infrastructure. The
11
Poverty Score Card exercise has been completed in all three districts and data is available through the BISP Data
Sharing Protocol. Detailed information and the complete Protocol is available at www.bisp.gov.pk.
15
Project interventions would be specifically adopted to reach out to vulnerable groups including
women, girls, young men, as well as elderly and disable persons.
Project Development Objectives
29. The Project responds to the recovery and rehabilitation needs in three (3) southern
districts of the KP province i.e. Dera Ismail Khan (DIK), Tank and Lakki Marwat that are
adversely affected by the crisis. The Project Development Objective is to strengthen the capacity
of the poor to improve their livelihood options through access to social and productive
infrastructure using participatory approaches in the selected southern districts of Khyber
Pakhtunkhwa province.
30. Key Performance Indicators: The Key Performance Indicators (KPIs) to measure the
results and Project impact would include:
Support to at least100,000 Project beneficiaries, of which 30% women
Change in % of population accessing social infrastructure improved by the Project
Change in % of population accessing productive infrastructure and services provided
through this Project
Process indicators for achieving the KPIs will include:
Establish and/or revitalize 1000 Economic Interest Groups (EIGs) and aggregate them
into about 200 Clustered EIGs (CEIGs) at Tehsil level
At least 80% of CEIGs use participatory planning and implementation (Community
Action Plans – CAPs)
At least 50% of CAPs have established arrangements for community engagement for
O&M
Summary of Project Components
31. This Project aims to reach the un-served and underserved low income communities in
southern KP. The project coverage and monitoring for quick impacts and demonstrative effects is
ensured through limiting the implementation to three districts. The Project provides opportunities
for livelihood support for vulnerable groups and poorest households and builds social capital – in
particular through skill development and organization of youth groups, delivery of cost effective
productive infrastructure, and capacity building of beneficiaries. Additionally, while focusing on
the agriculture and livestock sectors, the Project would also provide complementary investments
for extension services (in particular for implementing the components A and B). The Project
comprises of following three components:
32. Component A: Community Development Support (US$ 1.5 million): The objective of
this component is to help the communities mobilize into Economic Interest Groups (EIGs) and
federate at Tehsil level into Clustered Economic Interest Groups (CEIGs). A parallel or advanced
Technical Assistance for Implementation Readiness is being procured to: (i) prepare the
Operations Manual; (ii) identify and recruit staff (Facilitators and EDO-CDD); and (iii) provide
training to all tiers of Project staff ahead of implementation stage. The TA should ideally be
16
launched ahead of Project approval and lead up to identification of staff that are selected through
a competitive process and are in a ready state after receiving training and understanding of the
Project objectives, implementation arrangements and Operations Manual, to begin
implementation once the Project is approved and signed. The Component A has following sub-
components:
33. Sub-component A1 – Facilitation: The Project would hire and train Facilitators to guide
the EIGs and CEIGs to undertake social mobilization, capacity building and community planning
process through inclusive transparency, participatory planning process leading to developing
Community Action Plan (CAP) which will be the basis on which subproject will be financed.
The CAP will comprise at a minimum: (a) an agreed list of priority private and public
infrastructure subprojects that are technically and economically feasible, environmentally and
socially sustainable, and will contribute towards raising the productivity and incomes of
participating EIGs; (b) a list of constraints and opportunities to be addressed through advisory
services with respect to enterprise production and marketing; (c) agreed mechanisms for
financing the operations and maintenance of subproject investments; (d) a plan for training and
building the capacity of CEIGs in financial management, community-based procurement, social
and environmental impact screening of subprojects, conflict mitigation and management and
other aspects of organization and management of the associations; (e) identification of recipients
for an asset building grant if applicable; and (f) an agreed mechanism to manage and resolve
conflicts, especially concerning user group rights.
34. The communities in the selected districts of KP have some level of prior knowledge
and/or experience in self-organization. There are some community groups at village and higher
levels that may already exist although the likelihood is that these may not fully functional and/or
may be limited in their scope. The KP-SADP would work to reorganize/revitalize or form new
groups with the specific requirement for mutual economic interests. Nevertheless, the quality of
facilitation will be important to ensure that the information provided to communities is clear
enough to promote participatory planning where priorities are being identified based on
community needs and not based on the amount available to them.
35. Sub-component A2 – Advisory Services and Input Support: The Advisory Services
would be provided to the farmers (organized into various EIGs) and their federations (CEIGs).
The Project would provide support to empower EIGs comprising of crop farmers or livestock
farmers and other economic affinity based groups, working within their own villages and through
their respective CEIGs, to purchase advisory services from both public and private sources. The
Input Support would include access to new technology and farm inputs (mainly seeds, fertilizers,
farm tools, etc.). The Project would provide training to CEIGs and their constituent EIGs, to
equip them to access Advisory Services and Input Support. This training support will also give
them the skills and know-how to carry out participatory planning as well as to implement,
operate and maintain subprojects.
36. Additionally, the EIGs and CEIGs would be provided with economic mobilization to
perform their economic development roles and manage their advisory and enterprise
development needs. This would be done through a TA at Tehsil level for the CEIG and
individually for EIGs that are more active and are assessed with the potential for evolving into
micro-enterprises. Business development service providers would be identified and contracted to
17
provide these advisory services for individual EIGs to strengthen know-how (enterprise
production) and address market linkage constraints for individual EIGs and help to establish
sustainable linkages between them and other actors involved in complementary activities, such
as input supply distribution, processing, marketing and credit (in support of possible supply/value
chain development).
37. Sub-component A3 – Communications and Knowledge Program: The sub-component
would also finance a communications and knowledge program to reach the local communities
and other stakeholders and will include the use of print and electronic media including FM radio,
sensitization meetings, advocacy visits to communities, use of handbills and posters, use of
traditional institutions, and use of folk songs, street theatre, cultural displays, etc. The target
groups for the communication education program will include community members, opinion
leaders and traditional authorities, religious leaders, CBOs, NGOs, district government and
councilors, etc. Additionally, managing expectations of communities that are not included in the
first round of Project investments would require a clear and well-defined communications and
awareness program.
38. Component B: Community Driven Investment Program (US$ 14 million): This
component has three sub-components that respond to the social infrastructure, productive
infrastructure and addressing the asset building needs of the ultra-poor and most vulnerable
groups including women headed households, disabled, elderly, and other socially and
economically marginalized groups. A clear distinction between public and private infrastructure
would derive from social and productive nature of these infrastructures. The social infrastructure
would mostly include public goods e.g. schools, health facilities, water, sanitation, access/feeder
roads. Whereas the productive infrastructure has a larger menu that revolves around productive
activities leading to livelihood opportunities. A positive list of schemes aligned to the productive
nature of infrastructure would be identified in the Operations Manual. In addition, in order to
manage expectations there will be clear knowledge available to the communities on the amount
available for individual CAPs. A ceiling of US$ 10,000 would be initially set for individual
EIG’s CAPs. This approach will be reviewed at the first Annual Review stage to assess the
effectiveness and introduce any changes if needed. Component B has following sub-
components:
39. Sub-Component B1 – Social Infrastructure (US$ 4.4 million): This would include
rebuilding, improving and/or developing social service infrastructure. The Project would finance
social infrastructure identified in the CAPs that are public-good subprojects for example minor
repairs of local schools, feeder roads, culverts, bridges, drifts and stock routes, boreholes (with or
without pumps), community health facilities, potable water supply facilities, rural electrification,
community water storage tanks, etc.
40. Sub-Component B2 – Productive Infrastructure (US$ 8.2 million): This sub-component
would operate on an open menu and provide infrastructure as engine of economic growth in the
affected communities. The Project would finance small scale physical and socio-economic
infrastructure, income-earning assets and extension service-type subprojects. In addition, sub-
component will also cater to provision of one to three key infrastructures that may be a collective
demand for the selected districts for instance inter-districts link roads, etc. But most of the
subprojects will revolve around livelihood related activities in the agriculture and livestock
18
sectors with on-farm and off-farm activities. The examples may include vocational training/skill
development centers, community grain storage facilities, community agro-processing facilities,
cattle trough, small to medium irrigation schemes, resting points (along stock trading routes),
livestock water pools, etc. Additionally on-farm technology improvement such as solar convergence
of water pumps, drip and sprinklers for small scale irrigation, agricultural machines (power tillers
and processing equipment e.g. maize shellers, oil press, rice thresher, drying platforms, fruit
processing/packaging equipment, etc.) would be financed.
41. Sub-Component B3 – Asset Building for Ultra-Poor (US$ 1.3 million): This would
focus on specifically addressing the development needs of the ultra-poor and most vulnerable
groups in the targeted villages, particularly groups not covered by the government safety net
programs. Emergency assistance to vulnerable groups would include re-acquisition of lost asset e.g.
home/shelter or income source (livestock, poultry, etc.). The objective would be to relieve the stress
from the vulnerability in order for these groups to regain their lost assets and rejoin the economic
activities. The assessment of vulnerability and guidelines for categories of asset related subprojects
will be specified in the Operations Manual.
42. Component C: Project Implementation Support (US$ 2.5 million): This component
would include: (i) project management through establishing an efficient, effective and responsive
entity for successful Project implementation at the provincial, district and sub-district level; (ii)
development of a communications strategy together with a governance and accountability
framework to ensure that adequate and appropriate mechanisms are in place to monitor and
support Project implementation; and (iii) development of an effective monitoring and evaluation
system that will take regular stock of Project performance and inform any course correction.
Additionally, this sub-component would explore introduction of new/innovative approaches for
community-government partnerships. Examples of these innovations may include introducing
ICT-based technologies for monitoring and community O&M.
43. Detailed description of each component is provided in Annex 1.
D. Implementation Arrangements
44. The KP-SADP will have a dedicated Project Management Unit (PMU) for overall
implementation and management of this project. The detailed implementation arrangements are
as following:
45. Provincial Level Project Management and Coordination: The Local Government,
Elections and Rural Development Department (LGERDD) of the Government of KP (GoKP)
will be the main implementing agency for this Project. The Project Management Unit (PMU)
will be housed in the LGERDD. The PMU would be headed by a Project Director and would
also have dedicated staff available for overall management, coordination and fiduciary
compliance for this Project. A provincial level Project Steering Committee chaired by the
Additional Chief Secretary would provide overall decision making and policy guidance for
Project implementation.
46. Facilitation: The Facilitators will be hired with preference for candidates who are locally
based from within the same communities where Project implementation takes place. These
19
Facilitators would comprise men and women (preferably in equal numbers, but flexibility is kept
in view of local cultural norms). The Facilitators would be hired by and report to the PMU and
EDO-CDD. Primarily these Facilitators would be responsible for identification and formation of
EIGs, CEIGs and development of CAPs.
47. District Level Project Implementation: The District Coordination Officer (DCO)
would be the de facto project manager at the district level. A new position of the Executive
District Officer for Community Driven Development (EDO-CDD) would be created. This
position would report to the PMU and under the administrative reporting of the DCO, the office
of the EDO-CDD would serve as the secretariat of the District Review Committee (DRC).
48. District Review Committee (DRC): The DRC is established by the PMU, with the
assistance of project-supported Facilitators. The DRC would be chaired by the DCO and the
EDO-CDD would be the Secretary of this Committee. The DRC would include representatives
from key line departments including agriculture, livestock, irrigation and works and services. A
key aspect of the DRC would be the community representation. At least two traditional or
community leaders designated by the Clustered Economic Interest Groups would be members,
one of which would also serve as the deputy chairperson of the DRC.
49. Clustered Economic Interest Groups (CEIGs): This would be an apex organization of
economic interest groups which derive their livelihood in the communities within the Tehsil.
CEIGs are entities created for the Project and will be registered according to existing local and
district laws. They identify, prepare, implement, operate and maintain their subprojects, assisted
by Facilitators and technical specialists whom they contract either through the relevant district
sectoral departments or directly, and through technical assistance and training made available by
the PMU.
50. Economic Interest Groups (EIGs): These are the primary beneficiaries of the Project.
The size of an EIG may be between 5 and 10 households and as such, may comprise from 40 to
80 individuals. The EIGs may be comprise of members from existing groups of farmers or
community organizations or may be formed anew where no groups exist.
51. Project Implementation Procedures: The Project will adopt a phased approach to
implementation of CAPs and associated subprojects. Whether or not a CAP will be multi-year or
annual and/or across villages/Tehsils is an issue that will be resolved using participatory
approaches to describe the socioeconomic setting of the community and the social-mapping,
construct the livelihood profiles, identify the relevant technical, physical, environmental, and
institutional constraints, leading to the development of a set of proposals designed to overcome
these constraints. The first batch of subprojects is expected to include relevant details in terms of
subproject sites, scale, and detailed design and cost estimates. This approach will give flexibility
in the implementation of the Project allowing for continuous adjustments in response to change
in production, market, or policy environment, thereby contributing towards achieving the PDO.
52. Overall implementation of the Project will be done according to detailed procedures
defined in the Operations Manual. A user-friendly Operations Manual has been prepared and
will be made available to the CEIGs.
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53. Details of implementation and monitoring arrangements are provided in Annex 7.
Eligibility for Processing under OP/BP 8.0
54. The main reason for the application of OP/BP 8.00 in this context is the urgent
operational support needed for peace building efforts, including the preservation of human and
social capital through economic reintegration of crisis-affected population. Although Pakistan
cannot be considered a typical “conflict-affected” country, several aspects of the ongoing
situation in the northwestern areas require a rapid response as the one provided by the proposed
Project. The volatile nature of the situation in the KP and FATA areas makes it difficult to
predict when conflict might resume. Military efforts by the Pakistan forces against the militants
may have helped to break the militant hold over some of the areas. This in turn would have a
positive effect on overall regional security by facilitating a number of mutually reinforcing
initiatives, including peace building initiatives. Given the significant inflow of IDPs back to
their communities, a timely response to the Government’s request for support is clearly
warranted. The application of BP 8.0 is appropriate given the clear link that the Project would
contribute to overall peace and security in the region through addressing the recovery and
rehabilitation needs as well as improve livelihoods and services in selected districts.
Consistency with MDTF Administration Agreement
55. The KP-SADP is supporting the counterparts in executing activities outlined in the
MDTF Administration Agreement, such as restoring livelihoods of local communities through
access to productive assets and skill development opportunities as well as restoring and
developing rural infrastructure. As an administrator of the Trust Fund, the Bank is providing
technical advice to, and coordinating capacity building activities for KP Government.
Consistency with Country Partnership Strategy
56. The Pakistan CPS for FY10-13 recognizes that conflict and insecurity represent major
obstacles to economic development and poverty reduction. The proposed Project is fully aligned
with the CPS and contributes to the objectives under Pillar 3: “Improving Infrastructure to
Support Growth” and Pillar 4: “Improving Security and Reducing the Risk of Conflict”. Under
these pillars the CPS considers that addressing the longstanding economic deprivation and social
inequities among the population in the northwestern region is critical to dealing with conflict as
well as avoiding conflict relapse. The Project therefore has a strong focus on rehabilitating as
well as developing rural infrastructure and associated services. The Project also addresses the
strategic priority of increased responsiveness and effectiveness of the state. Lastly, the capacity
building of various public sector departments in KP is envisaged to directly contribute to one of
the expected outcomes of CPS, i.e. ‘Strengthened capacity and strategic reform of governance
institutions’ under Pillar 4.
Expected Outcomes
57. The overall Project goal is to create livelihood opportunities through providing
infrastructure and associated services for the rural population. The KP-SADP would support this
outcome through rehabilitation and provision of rural infrastructure affected or damaged by the
conflict, as well as new infrastructure identified by the local communities. The Project would
21
support Economic Interest Groups (EIGs) to plan and prioritize their development needs through
a participatory process. This would strengthen the community-based planning and
implementation processes in the region while ensuring that local communities remain in charge
of their own development agenda. The community driven approach would also ascertain
involvement of women and other marginalized groups. The agriculture and livestock based
livelihoods would be strengthened also through a community oriented demand-and-participation
process. Rehabilitation of infrastructure – including water and sanitation, irrigation, and
agricultural inputs – is envisaged to support the economic growth of the region that is essentially
an agro-economy.
58. The Project, on the whole, would indirectly enhance the capacity of the KP Government
to take on community driven and demand based livelihoods and infrastructure provision in
Southern KP, and address the issues of trust-deficit in state’s capacity for service delivery and
citizen interaction with government for demanding quality services.
E. Appraisal of Project Activities
Technical
59. The Project will make full use of community infrastructure design guides prepared under
other Bank funded projects in the region. Designs, technical specifications, and procurement
documents will be prepared by experienced staff of the government supported by independent
evaluation of quality of design. Civil works will be constructed to established national standards,
and supervised by experienced consultants. Since the actual number and type of infrastructure
would be driven by communities’ own priority setting, the productive infrastructure component
remains an open menu with a positive list of schemes that can be financed through this Project.
Where applicable, the technical design for schemes would be prepared and evaluated by the line
departments. The third party monitoring arrangements together with community participation
would ensure quality. It is expected that most, if not all, works shall be of a nature that can be
resourced locally by the communities.
60. Given the overall CDD approaches adopted for Project implementation, the technical
soundness of social and productive infrastructure support, would require a well-functioning and
well-communicated Grievance Redressal Mechanism (GRM). The GRM would be designed on
the principles of raising awareness on the Project objectives, the interventions designed there in
(eligibility, selection criteria, process flow, and positive lists, etc.). The GRM will adopt ICT
based tools with service standards for tracking complaints, processing time included.
Economic and Financial Analysis
61. The Project would support demand driven physical investments, likely to have significant
economic benefits for the population, as well as strengthen local institutional systems. A
straightforward economic analysis of the Project is not presently possible as investments in
infrastructure and services under the Project are not a-priori known. Nevertheless, since the
schemes will be initiated and supported by the local communities, experience in similar
interventions shows that desired benefits in social uplift, institutional strengthening, and
economic impacts on the community will likely be high. Some of the expected economic
22
benefits of the agriculture sector that may result from the community driven schemes may
include: (i) increased operating efficiency at farm level (through improvements to production and
marketing process, logistics and market institutions), (ii) extended value addition at farm and/or
post-farm level with greater integration between producers, traders and processors along the
value chains and (iii) increased market access and reduction in economic losses due to
inadequate storage capacity and for management.
Financial Management and Disbursement Arrangements
62. The Project FM Risk is assessed “High” that will be reassessed once the designed
implementation arrangements are in place. The PMU will have the primary responsibility for
maintaining the appropriate financial management system whereas EDOs CDD and EIGs will
also have the financial management responsibility. The budget preparation process will be
governed by the GoKP’s rules and regulations and annual budget of the Project will be a part of
GoKP’s annual development budget. A segregated Designated Accounts (DA) in US Dollars will
be established and disbursements will follow the ‘report-based’ principle. DA will be operated by
the PMU and disbursements will be based on quarterly Interim Financial Reports that will be
submitted to the Bank within 45 days of the close of the quarter. A revolving fund advance
equivalent to 3 months budgeted expenditure will be allowed to EDOs CDD for administrative
expenses that will be replenished quarterly. Grants to EIGs will be transferred directly by PMU
to their bank accounts on the basis of DRC approval. PMU will make a corporate level
agreement with a commercial bank to provide banking services to the EIGs. PMU will initially
maintain manual books and National FMIS will be implemented within 9 months of
effectiveness. EDOs CDD and EIGs will maintain manual Cash Books and will prepare
simplified periodic reports. Project financial statements will be prepared using Cash Basis IPSAS
and will be audited by the Auditor General of Pakistan. Audited financial statements will be
submitted to the Bank no later than 6 months of the close of the financial year. The designed
Project implementation arrangements contain a strong internal control framework that includes
Operations Manual, Financial Management Manual, Third Party Monitoring and Internal Audit.
Procurement Arrangements
63. Procurement for the proposed Project would be carried out in accordance with the World
Bank’s “Guidelines: Procurement Under IBRD Loans and IDA Credits” dated January 2011; and
“Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated
January 2011, as well as the provisions stipulated in the Grant Agreement. The general
description of various items under different expenditure categories are described in Annex 6. For
each contract to be financed by the Grant, the different procurement methods or consultant
selection methods, estimated costs, prior review requirements, and time frame are to be agreed
between the Recipient and the Bank Project team in the Procurement Plan. This plan is yet to be
developed. The Procurement Plan will be updated at least annually or as required to reflect the
actual Project implementation needs and improvements in institutional capacity. A General
Procurement Notice is not envisaged to be published as no contracts subject to international
competition are identified.
23
64. There is a component of livelihood support which envisages the use of funds for
community based interventions in works and goods. The selection criteria for the beneficiaries
(community groups or individuals) is agreed and documented in the project papers.
Environmental and Social Safeguards
Social Aspects:
65. Inequality, social exclusion and deprivation are some of the social development
challenges that face the target areas, and the knowledge of these challenges informed the design
and operational relevance of this Project. The Project design ensures that the voices of different
economic interest groups including users groups that are traditionally marginalized by gender,
income, age, religion and class are fully heard and that their interests are reflected in the CAPs
and in all Project activities. The social guidelines in the PIM will ensure that vulnerability is
addressed in subproject targeting, and that elite capture is prevented.
66. Broad-based participatory and extensive consultative process with stakeholders at both
the provincial, district and community levels including representatives from public, private, non-
governmental, and representatives of beneficiary communities have provided much of the
information used for the design of the Project. The key result of public consultations with
stakeholders showed that communities are highly sensitized and are capable of organizing
themselves to address risks to community welfare. It is envisaged that public consultation would
be an on-going activity throughout the entire Project cycle.
67. In light of the scope of works, which comprise rehabilitation of existing social
infrastructure such as roads, schools, and health centers, and establishment of small-scale
productive physical and socioeconomic infrastructure, income-earning assets, and extension
service-type activities, the risks of triggering negative social impacts in the project areas are
minimal. Further, OP4.12 on Involuntary Resettlement is not triggered as the project does not
anticipate any involuntary land acquisition. While the project footprint remains to be determined
during the course of project implementation, the project anticipates that land requirement for sub
project activities, however small, will be met through voluntary land donation through direct
purchase using the principles of willing-buyer willing-seller. As part of the subproject selection
process, the screening will include an assessment of whether there are potential land acquisition
and/or involuntary resettlement issues. All such sub-project locations requiring involuntary land
acquisition shall be avoided without compromising the project development objectives. The
screening checklists and the selection criteria will be fully explained in the Operations Manual
along with procedures for documenting voluntary contribution in the form of land.
68. In accordance with OP8.0, the Bank team had already prepared an Environmental and
Social Screening and Assessment Framework (ESSAF) that would govern safeguards screening
and compliance activities during and under the MDTF’s implementation, which will be applied
in this Project as discussed and agreed with the client.
69. To ensure effective application of the World Bank’s safeguard policies and the national
regulatory requirements, the ESSAF provides guidance on the approach to be taken during the
selection and design of projects/subprojects and the planning of mitigation measures, specifically
24
it contains guidelines for land acquisition and resettlement planning as well as involuntary
resettlement screening checklist to be used to ensure social safeguards compliance of Project
activities. Further, all proposed operations are subject to resettlement impact screening. If any
resettlement impacts are expected to occur, OP4.12 is to be triggered; and Resettlement Plans
(RPs) for specific subprojects are to be prepared and approved before initiating the civil work.
This Project has followed this approach.
70. The Environmental and Social Assessment (ESA) of the Project prepared by the KP
Government in accordance with the above-mentioned ESSAF includes an Environmental and
Social Management Plan (ESMP) setting forth measures to address the adverse environmental
and social impacts of the subprojects. Compliance with the ESA is a legal requirement under the
KP-SADP. Further, each subproject under the Project is required to be screened for potential
environmental and social impacts and where needed subproject specific ESMPs are to be
prepared to mitigate any potential adverse social and/or environmental impacts.
Environmental Aspects:
71. Rebuilding/improving of social infrastructure, constructing/establishing productive
infrastructure, and asset building for ultra-poor under the Component B of the Project may
potentially cause negative environmental and social impacts, such as changes in land use and
landform, soil erosion, water and soil contamination, air quality deterioration, damage to natural
vegetation, and safety and health hazards for workers and surrounding population. However,
most of these impacts are not likely to be irreversible, wide-spread, or unprecedented, and can be
addressed with the help of appropriately designed and effectively implemented mitigation plan.
Therefore the Project has been classified as Environment Category B, in accordance with the
WB Operational Policy 4.01. No other safeguard policy is presently triggered. However, further
clarity and confirmation on safeguards policies would be sought during implementation for
instance, if agriculture inputs support is being provided, which may lead to the need for
developing a pest management plan.
72. To address the potentially negative environmental and/or social impacts associated with
the projects under MDTF, the Bank has prepared an Environmental and Social Screening and
Assessment Framework (ESSAF), in accordance with the OP 8.00 for emergency operations.
Since the KP SADP is being proposed under MDTF, ESSAF is applicable to it also. A summary
of ESSAF has been given in Annex 9. The ESSAF has been shared with the Government of KP
(GoKP). It has been disclosed locally by the GoKP on March 28, 2012 and also at the World
Bank’s InfoShop on the same date.
73. In accordance with ESSAF requirements, the GoKP has prepared a Project-specific
Environmental and Social Assessment (ESA). The ESA identifies the negative environmental
and social impacts that are likely to be caused by the Project during its various phases, and
proposes mitigation measures to address these impacts. The ESA also proposes the institutional
arrangements to manage the environmental aspects of the Project, lists environmental monitoring
requirements to ensure the effective implementation of the mitigation measures, identifies staff
training needs, and also specifies the reporting and documentation requirements. All subproject
investments will be subject to environment and social screening as per ESA study at the design
stage. The adverse environment and social impacts associated with the subprojects will be
25
mitigated through the ESMPs developed under ESA for the related subproject. The ESA has
already been sent for Bank’s clearance, and will be disclosed locally by the GoKP on its website
as well as on the InfoShop of the World Bank after the clearance.
Lessons Learnt and Reflected in Project Design
74. The Bank has extensive experience in supporting CDD operations in post-conflict
situations in the region12
. Some key lessons from these operations that apply to this Project are
the following:
Government commitment and ownership for rebuilding peace is critical for success of
interventions that are directed towards impacting the quality of life for population returning
to their communities after the conflict/crisis. An active role by the government is also critical
for ensuring rebuilding of citizen-state trust that gets impacted as a consequence of conflict.
This needs to be reciprocated by communities becoming able to demand quality services
from their government and exercise self-organization and voice to ensure that development
process is transparent and accountable.
Promoting community participation generates greater ownership amongst local population
for taking charge of their own development in a post-conflict situation. Motivation and
sensitization of staff of implementing agencies in a gainful participation in project activities
is one of the key ingredients for successful project performance and sustainable capacity
building.
Flexibility and scalability of design in post-conflict situation are important parameter for
achieving intended results. The project design should be flexible with all components closely
aligned with the PDOs with specific mechanisms to quickly reflect on what is working well
and hence could be scaled up. Implementing projects in environments that are highly
insecure need to have a flexible design and use locally trusted organizations to allow changes
in approach.
Monitoring for quick impacts in a post-conflict environment is critical. The re-construction
efforts should target interventions that yield quick returns, with appropriate attention to
putting in place basic building blocks to support transition from emergency recovery to
medium to long term reconstruction and development.
Alternatives Implementation Arrangements Considered and Proposed Arrangements
75. CDD approach versus government’s regular programs – involving communities in
development planning and implementation may be a long drawn process with higher risks
associated then is the case for government’s program delivery. On the other hand, the persisting
weak capacities and inability of government programs being designed on the bases of actual
needs, renders CDD an appropriate mechanism of delivery for this Project.
12
E.g. Afghanistan NSP, Sri Lanka Gemi Dirya, Nepal PAF, etc. More recent examples include the India North East
Rural Livelihood Program, launched in 2011.
26
76. Direct fund flow versus indirect Fund flow – while involvement of District administration
in managing funds for onwards disbursements to the community groups (CEIGs/EIGs) may
strengthen the District government’s role working directly with communities, this fund flow may
create administrative issues and delays in funds disbursements. Instead identifying a clear role of
the District administration in oversight, review and approval process ensure that their buy-in is
maintained in the Project implementation while communities receive funds in the most direct and
timely manner from the PMU.
Bank Implementation Support and Monitoring Arrangements
77. Given the prevailing security situation in the Southern Area of the Khyber Pakhtunkhwa
Province, the access to the intervention areas will be limited for World Bank staff in supervision.
Adoption of alternative arrangements for implementation supervision, in particular for field
monitoring and verification arrangements would be essential, and to be developed during the
implementation depending on the evolution of the security level. A Project supervision plan
would be developed which outlines the role of the PMU and of possible external independent
parties for field supervision (i.e.: the third party to be involved not only in the evaluation, but
also on the regular M&E and in monitoring specific aspects such as the impact on livelihoods).
The supervision and monitoring arrangements for KP-SADP would include the following:
Annual Review missions that will consist of detailed review of implementation progress
of all components as well as Project management quality including fiduciary and
safeguards compliance, implementation of Operations Manual and lessons learnt during
implementation that require any adaptation in implementation strategy. The outcome of
the Annual Review will provide the basis of the subsequent Independent Assessment and
Joint Government/World Bank project performance and implementation progress to be
used for re-planning the Project activities and intervention packages over the remaining
Project life; re-allocation of funds where necessary; and re-designing Project approaches
and implementation modalities, if required, as an input into the scaling up of the Project
in other districts.
Regular implementation support and supervision mission by the World Bank team –
every six months or more frequently if required visits to the KP Secretariat at Peshawar
or Islamabad.
Participatory M&E with community and beneficiary involvement through surveys,
community scorecards, Project feedback fora, interactive case study, etc. and restitution
of the M&E analysis to the beneficiaries.
Well defined complaint handling system, which is widely communicated.
Involving neighboring Universities or other parties in data analysis as Progress Review
Partners; youth and student could collaborate on data collection for scientific purposes,
too.
27
Independent third party evaluation for quality assurance and cross evaluation, for mid-
term and final evaluations. The tasks of asset verification, quality control of works and
supervision of all investments will be the responsibility of the Project and the MDTF’s
Monitoring Agent will complement through sample based monitoring.
Use of ICT based technologies including Global Positioning System (GPS) enabled
cameras for geo referencing and cellular devices/smart phone technologies for monitoring
quality and physical verification of all Project interventions.
In addition, process monitoring will be an important area given the CDD nature of this
Project and to capture evidence that the voices of the vulnerable and ultra-poor are
included.
78. At the project level, the overall responsibility for M&E is assigned to the Project
Management Unit (PMU). The M&E comprises of one dedicated Deputy Director at PMU in
Peshawar with three M&E officers at District levels. The Facilitators will have the responsibility
of M&E data collection at household level; they will interact with beneficiaries and ensure their
inclusion in the M&E system, through data collection and communication of reports and analysis
through appropriate tools. Community participation in M&E will be ensured through the EIGs
and CEIGs.
Communications Strategy
79. The communications and knowledge (CK) strategy will address three elements critical to
meeting the Project Development Objective. First, it will help re-establish trust between the
people and their government, which the PCNA identified as a critical deterrent to recovery, by
establishing channels for dynamic communication among community members, government
officials, NGOs, and the private sector. Second, it will create informed actors among the Project
stakeholders to facilitate transparent management and informed decision-making at the
community, cluster, district, and Project levels. Finally, the strategy will provide the technical
knowledge necessary for creating and managing high quality investments with maximum impact
at the community level. Each component will have its own particular focus:
In Component A, each district will have a communications campaign targeting the
broad population in the Project area to explain the Project, its goals, and processes (the
“rules of the game”). The Project will establish and notify the target population of
feedback mechanisms for queries and grievances—including how to access the system
and service standards (expected response times). A training plan for social mobilization
and Project sensitization has been prepared to facilitate stakeholder participation at all
levels of Project implementation.
Component B will add communications relevant to achieving quality in subproject
investments—e.g., technical, managerial, market, etc. This would include personal
technical assistance, materials reinforcing messages from training, exposure visits were
appropriate, meetings, and media. The focus is to maximize the impact of infrastructure,
assets, and services by ensuring high quality and relevance from the outset.
28
Component C includes the implementation of the overall CK strategy. This covers
dissemination of Project information—vision, goals, activities, implementation progress,
successes, and lessons—to key stakeholders who have an influence on the Project’s
enabling environment. As part of this, the person charged with communications in the
PMU, the EDO-CDD, and communities themselves, will regularly gather good practices,
innovations, and lessons learned from problems in subprojects to increase learning within
the Project system and understanding of the Project outside of the system.
F. Key Risks and Mitigating Measures
80. The KP-SADP is rated as high risk, and therefore the Bank team and counterparts have
incorporated mitigation measures in the Project design. While a detailed Operational Risks
Assessment Framework will be developed as part of the Project preparation, some key risks
include: (i) deterioration in security situation due to which access to some parts of the selected
districts may become challenging; (ii) given the remoteness of the some parts of the selected
districts, there may be certain areas which would remain far more difficult to reach than others;
and (iii) limited access to the districts for supervision and quality assessment. These risks would
be mitigated through adopting a sound supervision strategy that includes remote supervision and
designing appropriate feedback and communication systems including and effective and well-
functioning grievance handling system. Additionally, the Project design is based on the premise
that not addressing the development deficits in Southern KP poses a greater risk of relapse into
crisis. An effective feedback system would also mitigate the risks of misunderstanding or
perceived favoritism by the government and managing raised expectations and impatience with
delivery delays.
G. Terms and Conditions for Project Financing
81. KP-SADP would be financed by a US $ 18.0 million MDTF Grant, with 100 percent
disbursement percentage. Retroactive financing will be available against the approved
procurement plan for eligible expenditures, incurred on and after May 1, 2012 up to US$ 1.5
million.
82. The closing date of the Project is 30 June 2015.
29
Annex 1: Detailed Description of Project Components
PAKISTAN: KP Southern Area Development Project (KP-SADP)
83. This project aims to reach the unserved and underserved low income communities in
Southern KP. Implementation will happen in three (3) districts of DIK, Tank and Lakki Marwat
in order to concentrate project coverage, effectively monitor processes and impacts, and
demonstrate the potential of the approach. The selection of these districts is based on several
factors including: (i) prevailing low human development indices even before the onset of the
militancy crisis (all three districts are amongst the poorest 25 districts in the country); (ii)
proximity to the Tribal Agencies of FATA (in particular the South Waziristan Agency that is
under ongoing military operation); and (iii) all three districts were recipients of the largest
number of Internally Displaced People (IDPs) that left the Tribal Agencies during the military
operation in 2009.
84. The key principles for project design are flexibility, scalability and community
participation. The project will directly reach out to the communities at village/settlement levels
to create a demonstrable impact of the project interventions. Based on emerging results from the
pilot interventions initiated during implementation, the potential for scaling up vertically and
horizontally will be identified. The beneficiary selection process would be informed by the
existing data available through the poverty score card completed for the three districts. This
information is available through the Bank financed Benazir Income Support Program (BISP) and
will be used in particular for the asset building support for ultra-poor groups.
85. The project aims to provide opportunities for livelihood support to vulnerable groups and
the poorest households, building social capital—in particular, through skill development and
organization of youth groups, delivery of cost effective productive infrastructure, and where
possible capacity building of local governments. The project interventions would be specifically
adopted to reach out to vulnerable groups including women, girls, young men, as well as elderly
and disable persons.
86. The KP SADP will therefore support the empowerment of communities to develop,
implement and monitor micro productive and social infrastructure subprojects (public and
common pool goods); and help vulnerable groups with special Needs to improve their standards
of living by increasing their access to well-targeted and effective social care services.
Project Description – by Components:
87. The project aims to provide opportunities for livelihood support for vulnerable groups
and poorest households, building social capital – in particular through skill development and
organization of youth groups, delivery of cost effective productive infrastructure, and capacity
building of beneficiaries. Additionally, while focusing on the agriculture and livestock sectors,
the project would also provide complementary investments for extension services (in particular
for implementing components A and B). The KPSADP has three major components:
88. Component A: Community Development Support (US$ 1.5 million): The objective of
this component is to help the communities mobilize into Economic Interest Groups (EIGs) and
30
federate at Tehsil level into Clustered Economic Interest Groups (CEIGs). A parallel or advanced
Technical Assistance for Implementation Readiness is being procured to: (i) prepare the
Operations Manual; (ii) identify and recruit staff (Facilitators and EDO-CDD); and (iii) provide
training to all tiers of Project staff ahead of implementation stage. The TA should ideally be
launched ahead of Project approval and lead up to identification of staff that are selected through
a competitive process and are in a ready state after receiving training and understanding of the
Project objectives, implementation arrangements and Operations Manual, to begin
implementation once the Project is approved and signed. The Component A has following sub-
components:
89. Sub-component A1 – Facilitation: The project would hire and train Facilitators to guide
the EIGs and CEIGs to undertake social mobilization, capacity building and community planning
process through inclusive transparency, participatory planning process leading to developing
CAP which will be the basis on which project financing will be funded. The CAP will comprise
at a minimum: (a) an agreed list of priority private and public infrastructure subprojects that are
technically and economically feasible, environmentally sustainable, and will contribute towards
raising the productivity and incomes of participating EIGs; (b) a list of constraints and
opportunities to be addressed through advisory services with respect to enterprise production and
marketing; (c) agreed mechanisms for financing the operations and maintenance of subproject
investments; (d) a plan for training and building the capacity of CEIGs in financial management,
community-based procurement, social and environmental impact screening of subprojects,
conflict mitigation and management and other aspects of organization and management of the
associations; (e) identification of recipients for a grant if applicable; and (f) an agreed
mechanism to manage and resolve conflicts, especially concerning user group rights.
90. The communities in the selected districts of KP have some level of prior knowledge
and/or experience in self-organization. There are some community groups at village and higher
levels may exist although the likelihood is that those that may exist in past may have become
dysfunctional and/or may be limited in their scope for community development. The KP-SADP
would work to reorganize/revitalize or form new groups with the specific requirement for mutual
economic interests.
91. Sub-component A2 – Advisory Services and Input Support: The Advisory Services
would be provided to the farmers (organized into various EIGs) and their federations (CEIGs).
The project would provide support to empower EIGs comprising of crop farmers or livestock
farmers and other economic affinity based groups, working within their own villages and through
their respective CEIGs, to purchase advisory services from both public and private sources. The
Input Support would include adoption of new technology by the farmers to enhance their
financial capacity to purchase farm inputs (mainly seeds, fertilizers, farm tools, etc.). The
project would build capacity of CEIGs and their constituent EIGs, so that they are equipped to
access Advisory Services and Input Support. This training support will also give them the skills
and know-how to carry out participatory planning as well as to implement, operate and maintain
subprojects.
92. Additionally, the EIGs and CEIGs would be provided with economic mobilization to
perform their economic development roles and manage their advisory and enterprise
development needs. This would be done through a TA at Tehsil level for the CEIG and
31
individually for EIGs that are more active and are assessed with the potential for evolving into
micro-enterprises. Business development service providers would be identified and contracted to
provide these advisory services for individual EIGs. to strengthen know-how (enterprise
production) and address market linkage constraints for individual EIGs and help to establish
sustainable linkages between them and other actors involved in complementary activities, such
as input supply distribution, processing, marketing and credit (in support of possible supply/value
chain development).
93. Sub-component A3 – Communications and Knowledge Program: The sub-component
would also finance a communications and knowledge program to be used to reach the local
communities and other stakeholders and will include the use of print and electronic media
including FM radio, sensitization meetings, advocacy visits to communities, use of handbills and
posters, use of traditional institutions, and use of folk songs, street theatre, cultural displays, etc.
The target groups for the communication education program will include community members,
opinion leaders and traditional authorities, religious leaders, CBOs, NGOs, district government
and councilors, etc. Additionally, managing expectations of communities that are not included in
the first round of project investments would require a clear and well-defined communications
and awareness program.
94. Component B: Community Driven Investment Program (US$ 14 million): This
component has three sub-components that respond to the social infrastructure, productive
infrastructure and addressing the asset building needs of the ultra-poor and most vulnerable
groups including women headed households, disabled, elderly, and other socially and
economically marginalized groups. A clear distinction between public and private infrastructure
would derive from social and productive nature of these infrastructures. The social infrastructure
would mostly include public goods e.g. schools, health facilities, water, sanitation, access/feeder
roads. Whereas the productive infrastructure has a larger menu that revolves around productive
activities leading to livelihood opportunities. A positive list of schemes aligned to the productive
nature of infrastructure would be identified in the Operations Manual. In addition, in order to
manage expectations there will be clear knowledge available to the communities on the amount
available for individual CAPs. A ceiling of US$ 10,000 would be initially set for individual
EIG’s CAPs. This approach will be reviewed at the first Annual Review stage to assess the
effectiveness and introduce any changes if needed. Component B has following sub-
components:
95. Sub-Component B1 – Social Infrastructure (US$ 4.4 million): This would include
rebuilding, improving and/or developing social service infrastructure. The Project would finance
social infrastructure identified in the CAPs that are public-good subprojects for example minor
repairs of local schools, feeder roads, culverts, bridges, drifts and stock routes, boreholes (with or
without pumps), community health facilities, potable water supply facilities, rural electrification,
community water storage tanks, etc.
96. Sub-Component B2 – Productive Infrastructure (US$ 8.2 million): This sub-component
would operate on an open menu and provide infrastructure as engine of economic growth in the
affected communities. The Project would finance small scale physical and socio-economic
infrastructure, income-earning assets and extension service-type subprojects. In addition, sub-
component will also cater to provision of one to three key infrastructures that may be a collective
32
demand for the selected districts for instance inter-districts link roads, etc. But most of the
subprojects will revolve around livelihood related activities in the agriculture and livestock
sectors with on-farm and off-farm activities. The examples may include vocational training/skill
development centers, community grain storage facilities, community agro-processing facilities,
cattle trough, small to medium irrigation schemes, resting points (along stock trading routes),
livestock water pools, etc. Additionally on-farm technology improvement such as solar convergence
of water pumps, drip and sprinklers for small scale irrigation, agricultural machines (power tillers
and processing equipment e.g. maize shellers, oil press, rice thresher, drying platforms, fruit
processing/packaging equipment, etc.) would be financed.
97. Sub-Component B3 – Asset Building for Ultra-Poor (US$ 1.3 million): This would
focus on specifically addressing the development needs of the ultra-poor and most vulnerable
groups in the targeted villages, particularly groups not covered by the government safety net
programs. Emergency assistance to vulnerable groups would include re-acquisition of lost asset e.g.
home/shelter or income source (livestock, poultry, etc.). The objective would be to relieve the stress
from the vulnerability in order for these groups to regain their lost assets and rejoin the economic
activities. The assessment of vulnerability and guidelines for categories of asset related subprojects
will be specified in the Operations Manual.
98. Component C: Project Implementation Support (US$ 2.5 million): This component
would include: (i) project management through establishing an efficient, effective and responsive
entity for successful project implementation at the provincial, district and sub-district level; (ii)
development of a communications strategy together with a governance and accountability
framework to ensure that adequate and appropriate mechanisms are in place to monitor and
support project implementation; and (iii) development of an effective monitoring and evaluation
system that will take regular stock of project performance and inform any course correction.
Additionally, this sub-component would explore introduction of new/innovative approaches for
community-government partnerships. Examples of these innovations may include introducing
ICT-based technologies for monitoring and community O&M. Other activities to be funded
include equipment, vehicles, operations and maintenance costs, and minor civil works for office
rehabilitation at the participating districts. It will finance specialized technical assistance and
training of the project staff.
99. Community lead identification, prioritization, decision-making and implementation will
remain the guiding province in implanting all parts of the Components A and B. While the
detailed village selection criteria based on inclusion and exclusion parameters would be
developed as part of the operational plan for implementing this component, the scheme
development cycle with various stages is presented in the following process flow diagram for the
KP-SADP:
33
Scheme Development Flow Chart
Facilitation (EIGs)
(Community consultation and mobilization)
Needs Identification
(Consultative process leading to needs
assessment and prioritization)
Prioritization
(Assessing eligibility for project
support as per criteria)
Development of Community Action Plan (CAP)
(Communities undertaking detailed assessment, walkthrough surveys, design and cost discussions, and community contribution
and O&M arrangements before DRC consideration)
DRC review and feedback to EIGs/CEIGs
(Technical/financial review and approval for fund release)
CAP approved
(subject to scheme type, contract awarded with specified role of all
parties involved)
Implementation Supervision and Quality Control (by community and District with 3rd party verification)
Scheme Completion
(Formally inaugurated by community and district
administration and handed over to community for O&M)
34
Annex 2: Results Framework and Monitoring
PAKISTAN: KP Southern Area Development Project (KP-SADP)
Project Development Objective: To strengthen the capacity of the poor to improve their livelihood options through access to social
and productive infrastructure using participatory approaches in the selected districts of southern Khyber Pakhtunkhwa province.
Project outcome indicators
Co
re13
Baseline14
Cumulative Targets Data collection and reporting
YR1 YR2 YR3 Frequency of
Reports
Data Collection
Instruments
Responsibility for
Data Collection
Support at least100,000 project beneficiaries, of which 30% women
0 F 10,000 20,500 30,000 Annually
(Quarterly
from YR2)
Field surveys DD M&E,
Facilitators, M&E
officers 0 M 20,000 40,000 70,000
Change in % of population accessing social infrastructure improved
by the project
0 F 5% 10% 30% At start,
middle and end
of project
Perception survey DD M&E, third
party monitors 0 M 10% 20% 50%
Change in % of population accessing productive infrastructure and
services provided through this project
0 F 5% 10% 30% At start,
middle and end
of project
Perception survey DD M&E, third
party monitors 0 M 10% 20% 50%
Process Indicators for KPIs:
Establish and/or revitalize 1000 Economic Interest Groups (EIGs)
and aggregate them into about 200 Clustered EIGs (CEIGs) at
Tehsil level
0 200 500 300 Quarterly Field reports DD M&E,
Facilitators,
beneficiaries 0 50 100 50
At least 80% of CEIGs use participatory planning and
implementation (Community Action Plans – CAPs)
0 10% 50% 80% Quarterly,
Annually
Field reports, case
studies, impact
evaluation
DD M&E, EDO,
Facilitators,
beneficiaries
At least 50% of CAPs have arrangements for community
engagement in post project sustainability or O&M
0 F 0% 35% 50% Annually
(Quarterly
from YR2)
Field survey and
Reports, case studies
DD M&E,
Facilitators, M&E
off, benef. 0 M 0% 40% 60%
Intermediate Outcomes Indicators
Component A: Community Development Support
60% beneficiaries (disaggregated by gender) confirm project
investments have reflected their needs.
0 F 0% 50% 60% Quarterly Field Survey DD M&E,
Facilitators,
beneficiaries 0 M 0% 60% 70%
50% of EIGs members (disaggregated by gender) benefitting from
technical assistance15.
0 F 0% 35% 50% Quarterly Field survey and
Reports
DD M&E,
Facilitators, 0 M 0% 40% 60%
13
Core Sector Indicators – Results Platform 14
At project startup date (2012).
35
Project outcome indicators
Co
re13
Baseline14
Cumulative Targets Data collection and reporting
YR1 YR2 YR3 Frequency of
Reports
Data Collection
Instruments
Responsibility for
Data Collection
beneficiaries
90% of CAPs approved by the District Review Committee
0 10% 80% 90% Quarterly,
Annually
Field reports, case
studies, impact
evaluation
DD M&E, EDO,
Facilitators,
beneficiaries
Component B: Community Investment Program
60% of approved CAPs completed in time after receipt of grant,
and published in the project website.
0 0% 50% 60% Quarterly,
Annually
Field reports, case
studies, impact
evaluation
DD M&E,
Facilitators,
beneficiaries
Number EIG members (disaggregated by gender) benefiting from
social infrastructure
0 F Quarterly Field survey and
reports
DD M&E, Field
Facilitators 0 M
Number EIG members (disaggregated by gender) benefiting from
productive infrastructure
0 F Quarterly Field survey and
reports
DD M&E, Field
Facilitators 0 M
Number of ultra-poor16 EIG members (disaggregated by gender)
benefitting from reacquisition of lost assets17
0 F Quarterly Field survey and
reports
DD M&E, Field
Facilitators 0 M
Component C: Project Implementation Support
Monitoring system established and functioning: timely reporting
against activity and output indicators.
0 85% 95% 100% Annual Annual reports DD M&E, EDO,
all project’s staff
70% of project staff, disaggregated by gender, utilizing knowledge
and skills gained through capacity development activities.
0 50% 60% 70% Quarterly Staff questionnaires18 DD M&E, EDO,
all project’s staff
70% of grants disbursed timely to CEIGs out of the total approved
CAP.
0 50% 60% 70% Quarterly Reports and field
survey
DD M&E, EDO,
Facilitators,
beneficiaries
*Please indicate whether the indicator is a Core Sector Indicator (see further http://coreindicators)
**Target values should be entered for the years data will be available, not necessarily annually
15
Technical assistance refers to (i) advisory services; and (ii) input support. 16
Ultra-poor are defined as households that are directly impacted from the crisis and have lost their economic assets e.g. livestock, etc. These groups may
comprise of women headed households, disabled, elderly, and other socially or economically marginalized groups. etc. 17
This indicator will provide also information on the “share of vulnerable and marginalized people of total project beneficiaries”, Core WB Indicator for social
Inclusion. 18
Combined assessment based on pre-training/ capacity development event, immediately after-training, and six months after the training.
36
Annex 3: Summary of Estimated Project Costs
PAKISTAN: KP Southern Area Development Project (KP-SADP)
100. Project cost summary – component wise:
Cost Including Contingencies (US$ Million)
Component
Year
1
Year
2
Year
3
Total
US$
%
A. Community Development Support 0.279 0.720 0.452 1.452 8.1
B. Community Infrastructure and Services 2.387 7.071 4.508 13.966 77.6
B 1. Social Infrastructure 0.752 2.258 1.401 4.411 24.5
B 2. Productive Infrastructure 1.477 4.126 2.632 8.235 45.8
B 3. Asset building for ultra-poor 0.158 0.687 0.475 1.320 7.3
C. Project Implementation Support 0.633 0.872 1.077 2.582 14.3
Total Project Costs 3.300 8.663 6.037 18.000 100
37
Annex 4: Operational Risk Assessment Framework (ORAF)
Project Development Objective(s)
To strengthen the capacity of the poor to improve their livelihood options through access to social and productive infrastructure using participatory
approaches in the selected districts of southern Khyber Pakhtunkhwa province.
PDO Level
Results
Indicators:
1. Support at least100,000 project beneficiaries, of which 30% women
2. Change in % of population accessing social infrastructure improved by the project
3. Change in % of population accessing productive infrastructure and services provided through this project
1. Project Stakeholder Risks Rating Substantial
Description: Presence of other development partners in the
region may lead to overlap between the Bank project and other
ongoing programs as well as duplication of efforts.
Consultative and participatory planning may be resisted by the
traditional decision making structures of Jirga and may be
seen as questioning traditions of local culture.
Risk Management: Regular meetings and coordination with the development partners to check overlap
and duplication. Mapping of activities by the government and various development partners.
Resp: Client & Bank Stage: Prep & Imp Due Date : Status: Ongoing
Risk Management: Use the traditional structures of Jirga for local level group formation based on clan
/ kinship affinity. Incorporate local cultural norms in the communications campaign to introduce
transparency and collective action. In addition, information about the project would be disseminated
widely including processes for activity selection, expenditure reporting and O&M.
Resp: Client Stage: Imp Due Date: Status: Not yet due
2. Implementing Agency Risks (including fiduciary)
3.1. Capacity Rating: High
Description: The PMU will require strengthening in terms of
implementation capacity (procurement, contract management,
and FM) and ability of timely decision making. There is a
general lack of technical and managerial capacities as well as
availability of staff willing to work in remote areas of the
Southern KP.
Risk Management: The project will have a focus on building the capacity for procurement, contract
management, safeguards, FM and technical and managerial issues as well as CDD approaches.
Continuous training of staff would be provided to handle staff turn-over in Peshawar and at the District
level through knowledge sharing and exposure to other Bank CDD operations.
Resp: Client Stage: Imp Due Date: Status: Not yet Due
3.1.1 Financial Management Rating: High
Description: Misappropriation of funds.
Limited physical access to project areas may result in weak
oversight and verification for expenditures incurred at District
and Tehsil level.
Turnover and weak capacity of FM staff leading to delays in
Risk Management: The adoption of a Financial Management Manual and use of the country FMIS
should result in implementation of a comprehensive internal control framework, including segregation
of duties, multi-tiered approval of payments and expenditures and minimum cash handling. In addition,
the financial management will be centralized at the PMU to avoid fragmentation of bank accounts and
dilution of payment controls. In addition, the Operations Manual will embed specific internal control
measures in each activity type.
Resp: Client Stage: Implementation Due Date: Status: Not yet Due
38
reporting and inadequate accounting records. Risk Management: Oversight of project activities and verification of the authenticity of expenditures
will be ensured through the involvement of local staff, communities and also third party monitors. All
supporting records related to payments and any advances given, will be kept at the PMU.
Resp: Client & Bank Stage: Implementation Due Date: Status: Not yet Due
Risk Management: Hiring of dedicated FM staff for the project is being fast-tracked through the TA on
Implementation Readiness. In addition to hiring of dedicated staff for this project, the project can utilize
services of the FM staff available at the LGERDD. Additionally, there is dedicated FM staff available
under the Implementation Support Unit (ISU) of the Governance Support Project (GSP), which is
mandated to support all MDTF financed projects. These arrangements will ensure that delays in
implementation are avoided. The Bank team will maintain close coordination with the project
management and the Office of Accountant General to ensure that any vacancies are promptly filled with
competent staff. Bank staff will also provide regular guidance and training to the project staff to ensure
adequate FM arrangements remain in place.
Resp: Client & Bank Stage: Implementation Due Date: Status: Not yet Due
3.1.2 Procurement Rating: High
Description: Delayed and inefficient procurements and
contract management.
Lack of interest from consultants, NGOs and contracting firms
in participating.
Uneconomical and non-transparent procurements.
Risk Management: Procurement staff shall be hired and Bank shall impart training.
Resp: Client Stage: Prep Due Date: Status: Effectiveness
Risk Management: Adequate packaging and dissemination.
Resp: Client Stage: Imp Due Date: Status: Not yet Due
Risk management: Web based dissemination and complaints redressal mechanism.
Resp: Client Stage: Imp Due Date: Status: Not yet Due
3.2. Governance Rating: High
Description: Possibility of political interference during the
planning and implementation of project.
The Project’s effectiveness depends on the ownership of its
public sector counterparts in KP. Any shift in the key positions
within these two set ups can adversely affect the Project
milestones.
Risk Management: A Project Steering Committee (PSC) will be established which will be chaired by
the Additional Chief Secretary (ACS) KP. The PSC will not only oversee project’s performance but will
also make policy decisions as and when required. In addition, public disclosure of project documents
and progress reports along with third party monitoring will minimize this risk.
Resp: Client Stage: Imp Due Date : Status: Not yet Due
Risk Management: While it is difficult to mitigate this risk at the KP, however, as these positions are
always occupied by trained public sector officials, the project’s continuity would not be impacted. In
addition, any change to key positions in the PMU would be done in consultation with the Bank.
Resp: Client Stage: Imp Due Date : Status: Not yet Due
4. Project Risks
4.1. Design Rating: High
Description: Inadequate information on baseline data
including household income levels, agriculture and livestock
Risk Management: Initially the project preparation will be based on available information from
government and other sources. These will be considered for initial planning purposes but detailed
39
assets, etc. may affect the project preparation especially
designing of actual interventions.
Given the post-crisis scenario, there may be greater levels of
demand generated by the local communities than can be
addressed through the project.
Given the prevailing security situation of the region, the Bank
team may not be able to physically supervise the project
interventions for some time.
District administrations may not fully own the project due to
proposed direct fund flows to the communities.
Involving the local Jirga system may lead to elite capture of
project interventions, particularly those activities where
women’s participation is required.
assessments of project areas for needs and ongoing interventions on agriculture including irrigation,
livestock and associated sectors will be collected within six months of project implementation.
Resp: Client Stage: Prep & Imp Due Date : Status: Ongoing
Risk Management: The project adopts a flexible design approach to respond to demands generated
from the communities. Additionally, the project will geographically concentrate in an area to provide
adequate coverage before moving to new areas. The geographic concentration will also ensure
generating demonstrative effect and lessons that are incorporated in the project implementation.
Resp: Client Stage: Impl Due Date : Status: Ongoing
Risk Management: The M&E system for the project will incorporate technology based supervision
techniques as well as third party monitoring and regular consultations with project beneficiaries. The
communications campaign will incorporate information from the M&E systems in order to widely
disseminate project results as well as promote CDD approaches.
Resp: Client Stage: Imp Due Date : Status: Not yet Due
Risk Management: While it is difficult to mitigate this risk, the project will provide capacity building
and training on CDD approaches to the District officials for them to understand the paradigm shift as
they will be responsible for approval of the CAPs.
Resp: Client Stage: Imp Due Date : Status: Not yet Due
Risk Management: Consultation with all stakeholders will be intensified to ensure local ownership and
buy in through communications to mobilize and sustain community efforts.
Resp: Client Stage: Imp Due Date : Status: Not yet Due
4.2. Social & Environmental Rating: Moderate
Description: The schemes to be implemented under
Component B of the project may potentially cause negative
environmental and social impacts. The nature and significance
of these impacts will depend upon the type, size and location
of these interventions.
Risk Management: To assess the nature and significance of the potentially negative environmental and
social impacts, and to determine appropriate mitigation measures environmental screening of the
schemes would be carried out during the proposal/design phase. The implementing agency has also
prepare an ESA to ensure compliance with the WB OP and national environmental requirements. The
ESSAF defines the environmental and social assessment requirements for all MDTF financed projects
and the KP-SADP implementing agency will also need to fulfill the same.
Resp: Client Stage: Imp Due Date : Status: Not yet Due
Risk Management: The PMU will appoint Environment and Social focal points to follow screening
procedures for social and environmental impacts against scheme specific checklists, and implementation
of ESMP. The ESMP will include capacity building programs to enhance the capacity of staff for
effective implementation. The PMU will also engage consultants for external monitoring of ESMP.
Resp: Client Stage: Imp Due Date : Status: Not yet Due
4.3. Program & Donor Rating: Substantial
Description: There could be delays in seeking approvals from
the GoP and Bank procedures on various actions including
release of funds and clearance of requests necessary for the
commencement of certain activities under the project.
Risk Management: MDTF Secretariat is housed in the Bank’s Country Office in Islamabad. The
services of the same Secretariat will be requested to pursue desired approvals and actions from the GoP
on fast track basis. Bank’s internal procedures have already been streamlined under OP 8.0 to enable
project preparation and approval on fast track basis.
40
Presence of multiple development partners engaged in post-
crisis rehabilitation and development activities in KP may
create coordination issues.
Resp: Bank & Client Stage: Prep Due Date : Status: Ongoing
Risk Management: Coordination meeting with donors will be carried out to exchange information
about the post-crisis related rehabilitation and development activities being financed in KP. Information
from coordination meetings and monitoring of various projects and programs will also be shared.
Resp: Bank & Client Stage: Prep Due Date : Status: Ongoing
4.4. Delivery Monitoring & Sustainability Rating: High
Description: Project implementation through a separate PMU
may not sustain the project activities after the PMU is
dismantled, which may limit the extension of similar programs
involving CDD approaches.
Limited capacity for monitoring and evaluation in the PMU
may impact the measurability and monitoring of results.
There may remain the likelihood of escalation in security
situation of the project areas.
Due to prevailing lack of trust between citizens and state,
communities may not be readily willing to participate in the
project and may see it as a government’s business-as-usual
intervention.
Risk Management: Before the close of this project sufficient coordination mechanisms will be
introduced within KP Government for inter-line department coordination and joint planning and the
staff hired in the PMU may be available for future projects.
Resp: Client Stage: Imp Due Date : Status: Not yet Due
Risk Management: The project has a dedicated sub-component for M&E capacity building and
implementation. In addition, monitoring and measurability of project indicators will also be effectively
managed through supervision effort and designating staff at the implementation level.
Resp: Client Stage: Imp Due Date : Status: Not yet Due
Risk Management: Mitigating this risk will require careful planning and implementation with
flexibility to adapt or change plans and rely on credible local organizations already working in the
project areas.
Resp: Client Stage: Imp Due Date : Status: Not yet Due
Risk Management: Communities’ ownership will remain the key to sustainability. Identification,
prioritization, implementation and monitoring of all project activities will be done by the communities
themselves in socially inclusive manner.
Resp: Client Stage: Imp Due Date : Status: Not yet Due
5. Overall Risk Following Review
5.1. Preparation Risk Rating: High 7.2 Implementation Risk Rating: High
Comments: The proposed rating takes into account the risks identified above as well as the team’s knowledge of the capacity of KP Government’s Planning and Development Department and the line departments at the time of project preparation.
41
Annex 5: Financial Management and Disbursement Arrangements
PAKISTAN: KP Southern Area Development Project (KP-SADP)
Country Issues
101. The Bank has carried out extensive analytical work on public financial management
(PFM) systems in the country, both at national and sub-national levels. In May 2007, Public
Financial Management and Accountability Assessments (PFMAA), using the PEFA19
PFM
Performance Measurement Framework, were completed for Balochistan, Punjab, and KP and a
Federal level PFMAA using the same framework was delivered in June 2009. It noted that
reforms underway have contributed towards improvements in PFM systems. Most notable are
the ones initiated under the Bank-funded Project for Improvement of Financial Reporting and
Auditing (PIFRA) and the implementation of a Medium Term Budgetary Framework (MTBF)
which is supported by DFID. Donor-funded projects and a number of self-accounting entities
currently remain outside the government FMIS. The government is yet to develop an effective
internal audit function and continuing efforts are needed to improve effectiveness of tax
collection and the management of cash balances impacting the predictability in availability of
funds. Specific diagnostic and analytical work has not been done for FATA where Federal PFM
systems are applicable.
Existing FM Arrangements at the Local Government, Elections and Rural Development
Department (LGERDD)
102. A brief FM Assessment of LGERDD was carried out that identified that though various
financial management reforms are being implemented but the department’s capacity to manage
its financial matters is limited. Output Based Budget has been extended to the department but the
outputs are not systematically monitored; the department has been provided National FMIS
access to view its financial reports and monitor budget outturns but usage is limited; there are
two separate sections one each for current and development budget and preparation of current
and development budget are distinct activities that lack coherence. At present, LG&RDD is the
administrative department of 31 development projects that also include foreign funded projects;
however, the department has not implemented any Bank funded project.
103. Primary responsibility for the project’s financial management will rest with the PMU
whereas LGERDD will have a facilitation as well as oversight role. Communication between the
project and any government department related to financial matters like request for opening of
designated/ assignment accounts and annual budget estimates will be channeled through
LGERDD. The project audit results will be a part of the overall audit report of LGERDD and
will be discussed in the Departmental Accounts Committee and Public Accounts Committee.
The project outputs will be a part of the LGERDD Output Based Budget and the department will
monitor the project performance through quarterly financial and progress reports.
19
Public Expenditure and Financial Accountability
42
Project FM Arrangements
104. The Project Management Unit (PMU) will have the overall responsibility to maintain an
appropriate financial management system for the project. However, the Executive District
Officer Community Driven Development (EDO CDD) in the three districts and each Economic
Interest Group (EIG) will also have a financial management responsibility. The following table
summarizes the key FM responsibilities of the entities involved.
Area PMU EDO CDD EIG
Transactions
to be handled Monthly payroll including
the official at district level.
Payments to EIGs as
approved by DRC
Funds transfer to EDO CDD
for administrative expenses
Payment for goods, services
and consultancies procured
or contracted by PMU as
well as administrative
expenses of PMU
Administrative/ operating
expenses of EDO CDD,
DRC and the line
departments incurred for the
purpose of the project.
Expenditure as per the
approved CAP
Staffing Full time FM staff
One accountant A member to act as treasurer
Budgeting Prepare annual consolidated
budget of the project on the
basis of data provided by
EDOs CDD and the work
plan of the activities to be
carried out by PMU.
Prepare annual district level
budget by consolidating fund
requirements of all EIGs as
well as funds required for
administrative expenses.
Annual fund requirements
will be included in the CAP
of each EIG that will be the
annual budget of the EIG
Funds Flow Open and maintain the
designated/ assignment
account of the project for
receipt of funds from the
Bank.
Enter into a corporate level
agreement with a
commercial bank to open
accounts for EIGs and EDOs
CDD.
Transfer funds to EIGs on
the basis of approval by
DRC in three tranches.
Transfer funds to EDO CDD
for administrative expenses
on the basis of quarterly
forecast.
Maintain a commercial bank
account for administrative
expenses where the PMU
will transfer funds.
Receive funds from PMU in
the commercial bank
account and will make
payments for the expenditure
as per the approved CAP.
Maintain a commercial bank
account where the PMU will
transfer funds.
Accounting Maintain accounts on cash
basis as per government
accounting procedure i.e.
New Accounting Model
Implement National FMIS
within 9 months of
Simplified accounting
records to be maintained for
administrative expenses.
Cash book and supporting
documents to be maintained.
43
Area PMU EDO CDD EIG
effectiveness.
Financial
Reporting Prepare and submit quarterly
IFRs to the Bank.
Prepare and submit annual
financial statements of the
project to the Auditors.
Complying with government
reporting requirements
Prepare a simplified
financial report on monthly
basis and submit to the
PMU.
Prepare a quarterly receipt &
payment report and submit
to EDO CDD.
Internal
Control
Framework
Government Financial Rules
Operations Manual
FM Manual
Government Financial Rules
Operations Manual
FM Manual
Operations Manual
Audit Auditor General of Pakistan will carry out annual audit of the project. The audit scope will cover
the PMU, EDOs CDD and the EIGs. The audit will also include field visits to EIGs and physical
verification of assets created or the work financed from the grant proceeds.
Staffing:
105. The financial management team at the PMU will be headed by a Deputy Director
(Finance) who will be supported by an Accounts Officer and an Accounts Assistant. The FM
staff will be hired under TORs agreed with the Bank by the start of project implementation
(although this is not an effectiveness condition) through Technical Assistance for
Implementation Readiness that is processed in parallel. Each EDO CDD will appoint an
accountant to maintain accounts and at each EIG a member will be nominated as treasurer who
will have the responsibility to write the cash book, maintain supporting documents and prepare
reports. Component A of the project will finance relevant financial management trainings for
EIG members. Financial management capacity is assessed ‘weak’ as communities are not yet
organized into EIGs and the literacy level in the implementing districts is also low.
Budgeting:
106. PMU will prepare the annual budget of the project that will be a part of GoKP’s annual
development budget. The budget preparation process will be governed by the GoKP’s rules and
regulations; however, the preparation of realistic budget estimates based on planned activities
will require extensive coordination between PMU and EDO CDD of each district. EDO CDD
will prepare a detailed work plan and cash plan for the district and PMU will prepare a
consolidated work plan and cash plan for the project that would form the basis of the budget. The
Operations Manual of the project will provide detailed guidance to PMU and EDO CDD on
planning and budgeting. Project activities will be totally financed through the Grant and budget
allocation for counterpart funds will only be required to envelop the emoluments of civil servants
deputed to the Project. The Government of Khyber Pakhtunkhwa has rolled out Output Based
Budgeting (OBB) to the line departments and the project outputs will be included in the annual
OBB of LG&RDD.
44
Accounting:
107. PMU will maintain separate books of accounts, on cash basis, for the project activities
using the Chart of Accounts under the New Accounting Model (NAM). Sufficient subsidiary
records will be kept to facilitate preparation of quarterly reports and annual financial statements
providing details of receipts and expenditures by project components and activities. Manual
books of accounts will be maintained, including:
(a) Cash/ Bank Book – to record all cash/ bank receipts and payments
(b) General Ledger – to record all receipts and payments by object code
(c) Appropriation Register – to monitor expenditure against budget allocation
(d) Asset Register – to maintain upto date record of assets procured
(e) Invoice Register – to track payments
(f) EIG Payment Register – to record EIG wise payments
108. After Effectiveness, the PMU will work with the PIFRA Directorate for incorporation of
the project in the National Financial Management Information System (FMIS) and will prepare
an action plan to ensure that the same is completed within nine (9) months of Project
Effectiveness, unless otherwise agreed with the Bank. Once the PMU has live access to the
National FMIS, manual books will be discontinued and only a Cash Book will be maintained.
109. EDOs CDD will maintain a Cash Book in a manner sufficient to render the classified
account to the PMU on periodic basis for preparation of consolidated project financial reports.
Certified cash book and vouchers/ receipts for the expenditures incurred will be kept by the
respective EDO CDD for the purposes of annual audit.
110. Each EIG will maintain a simplified Cash Book to record all payments. For this, special
training programs with adequate post-training performance evaluation would be provided to the
EIGs and CEIGs. The facilitation officers will also be trained in maintaining cash book so that
they can provide on job training to EIG members in maintaining Cash Book.
Internal controls:
111. The internal control framework for the project will include the Operations Manual and
Financial Management Manual. In addition a third party monitoring agent and an internal auditor
will also periodically review control activities.
112. A generic Financial Management Manual (FMM) has been developed and has been
approved by the Controller General of Accounts for use by all MDTF funded projects that will
be adopted by the project. The FMM includes a comprehensive internal control framework by
defining preventive, detective and corrective controls for different processes and transactions.
For each process, FMM defines key tasks, responsibilities, specific steps and timelines so it also
serves as a benchmark for management to measure its performance.
113. The Operations Manual of the project, under preparation, will include guidance on
internal controls for each set of project activities. Grants to communities will be approved and
monitored by a District Review Committee headed by the District Coordination Officer and the
Operations Manual will clearly specify eligibility and approval criteria. Field Officers will be
45
working with the communities to facilitate implementation and the Operations Manual will
provide relevant guidance to the field officers to review community operations.
114. A third party monitoring agent being hired by MDTF Secretariat will cover the entire
project activities. The project activities will also be subject to internal audit and a firm of
chartered accountants for internal audit of all MDTF projects is being hired by the Governance
Support Project. The Terms of Reference of third party monitoring agent and internal auditor
include review of the transactions, processes, procedures and performance as well as any other
aspects of the project activities as may be considered necessary to provide assurance regarding
the fiduciary controls, risk management and monitoring mechanisms in place.
Funds Flow Arrangements:
115. A segregated Designated Account (DA) in US Dollars will be established at the National
Bank of Pakistan for receipt of funds from the Bank. The DA will be operated by PMU and there
will be joint bank signatories. Disbursements will be report based and the project will mainly use
the advance method of disbursement where the funds will be front-loaded into DA based on 6
months cash forecast. Initial advance into DA will be provided by the Bank on the basis of
projections for the first two quarters. Subsequent advances will be based on actual expenditure
incurred and forecast for the following two quarters as reported in the quarterly Interim Financial
Reports that will be submitted by PMU to the Bank within 45 days of the close of each calendar
quarter.
116. For the implementation of Component B, PMU will provide advances to EIGs on the
basis of CAPs approved by District Review Committees (DRC). The funds will be released in
three tranches; 1st and 3
rd tranches will be equivalent to 30% of the approved CAP amount and
2nd
tranche will be of 40%. The subsequent tranche will be released to the EIG on the basis of
actual expenditure verified by the facilitation officers and recommendation of the DRC.
117. PMU will enter into a corporate level agreement with a commercial bank having presence
in the implementing districts to provide banking services to the EIGs. All EIGs will open their
accounts with a commercial bank and PMU will transfer the funds directly to EIG bank accounts,
once payments are approved by DRC and communicated to PMU by EDO CDD. As part of the
agreement, the commercial bank will also provide monthly district wise and EIG wise reports of
the receipts and payments to the PMU for all districts and EIGs. Each EDO CDD will be
provided details of the receipts and payments of the EIGs of its district by the commercial bank.
It was also agreed that possibility of mobile alerts to EIG members on receipt and payment from
EIG account will also be discussed with the commercial bank. This will improve transparency
and social accountability that will be a deterrent to fraud and corruption.
118. For administrative expenses of EDOs CDD, an imprest account will be maintained and
PMU will provide advances equivalent to three months forecast that will be replenished on
quarterly basis.
119. The funds provided into DA as well as advances from DA to EIGs and EDOs CDD
would only be used to meet the eligible expenditures under the project.
46
Allocation of Grant Proceeds
Disbursement Category Amount of Grant
(USD)
Percentage of
Expenditures to be
Financed
Subproject Grants, Goods, Works, Non-
Consulting Services, Consultants’ Services
(including for audits), Training, and Incremental
Operating Costs
18,000,000
100%
TOTAL AMOUNT 18,000,000
120. The MDTF financing is inclusive of import duties and taxes.
Incremental Operating Costs:
121. Incremental operating costs will cover operating expenditure that would not have been
incurred in the absence of the Project excluding salaries and salary supplements of the employees
of Government of Pakistan and Government of Khyber Pakhtunkhwa.
Retroactive financing:
122. The project may require retroactive financing to meet eligible expenditures incurred
starting May 1, 2012 up to the date of the signing of the Grant Agreement. The retroactive
financing is for costs incurred to start-up the implementation related activities. Amount allowed
is USD 1.5 million.
Financial Reporting:
123. PMU will prepare and submit quarterly Interim Financial Reports (IFRs) to the Bank
within 45 days of the end of each calendar quarter. The format and content of these reports will
be agreed during project negotiations. Annual financial statements for the Project will be
prepared by PMU in accordance with Cash Basis International Public Sector Accounting
Standards. These financial statements will include details of expenditure incurred by Project
components and activities and will be submitted to the auditors within 2 months of the close of
the financial year.
124. EDOs CDD will prepare simplified monthly financial reports that will include details of
receipts, payments and bank balance that will be submitted to PMU within 7 days of the close of
the month. Each EIG will prepare a quarterly receipt and payment statement that will be
submitted to the respective EDO CDD as well as to the members of the EIG.
125. The government financial rules and regulations require a project to submit certain
financial reports to various offices. PMU will be responsible to provide the financial reports of
the projects to the relevant government offices.
47
Auditing:
126. External audit of the project will be conducted by the Supreme Audit Institution, i.e., the
Office of the Auditor General of Pakistan which is acceptable to the Bank. The audit scope will
cover PMU, EDOs CDD and EIGs. The audit will also include field visits to EIGs to review their
financial reports and physical verification of assets created or the work financed from the grant
proceeds. Acceptable audited financial statements of the project will be submitted within 6
months of the close of each financial year. Currently there are no unsettled ineligible
expenditures and overdue audit reports in respect of the project implementing entity.
Audit Report Type Due Date
Project Financial Statements for Financial Year
ended June 30 each year
December 31 each year.
48
Annex 6: Procurement Arrangements
PAKISTAN: KP Southern Area Development Project (KP-SADP)
127. Procurement for the proposed Project would be carried out in accordance with the World
Bank’s “Guidelines: Procurement Under IBRD Loans and IDA Credits” dated January 2011; and
“Guidelines: Selection and Employment of Consultants by World Bank Borrowers” dated
January 2011, as well as the provisions stipulated in the Grant Agreement. The general
description of various items under different expenditure categories are described below. For
each contract to be financed by the Grant, the different procurement methods or consultant
selection methods, estimated costs, prior review requirements, and time frame are to be agreed
between the Recipient and the Bank Project team in the Procurement Plan. This plan is yet to be
developed. The Procurement Plan will be updated at least annually or as required to reflect the
actual Project implementation needs and improvements in institutional capacity. A General
Procurement Notice is not envisaged to be published as no contracts subject to international
competition are identified.
128. There is a component of livelihood support which envisages the use of funds for
community based interventions in works and goods. The selection criteria for the beneficiaries
(community groups or individuals) is agreed and documented in the project papers.
Procurement of Works
129. Civil works of various sectors are expected under the components B and C of the project.
These would include simple works for irrigation, water supply and livestock sectors. Total cost
of these components is US $ 10.409 million (which also includes goods, non-consulting services,
consultants’ services (including for audits), and training), and the costs of individual works
contract is not expected to exceed US $ 1 million. All contracts estimated to cost more than US $
200,000 shall be procured using NCB process, and contracts estimated to cost upto US $ 200,000
may be procured using shopping procedures. Works upto US $ 100,000 may be awarded based
on community contracts. A sample contract shall be agreed and documented in the project
manual. Direct contracting may be used to carry out emergency works (if any), after prior
approval of the Bank. Bank’s agreed bidding documents shall be used for NCB.
Procurement of Goods
130. There could be some requirements of office equipment (furniture, and computers) and
field equipment, besides machinery/vehicles for the participating sectors. Contracts for goods
under ICB are not expected at this stage. Procurement methods for goods under the Project will
consist of shopping for contracts costing up to US$200,000, NCB for contracts up to
US$300,000, and ICB for contract costing more than US$300,000. Direct contracting may be
used for any urgently required goods after prior approval of the Bank. Operational vehicles
would be procured using shopping procedure regardless of cost. The Bank’s SDBs for ICB and
agreed bidding document for NCB shall be used.
49
Additional Provisions and Procedures for National Competitive Bidding (NCB)
131. When procuring goods, non-consultant services and works pursuant to the provision of (i)
Rules 5 and 20 through 36(a) of the Federal Public Procurement Rules (2004) (S.R.O.
432(I)/2004), it shall be ensured that the following additional provisions are applied:
(i) Invitations to bid shall be advertised in at least one (1) national newspaper with a
wide circulation, at least thirty (15) days prior to the deadline for the submission
of bids.
(ii) Bid documents shall be made available, by mail or in person, to all who are
willing to pay the required fee.
(iii) Foreign bidders shall not be precluded from bidding and no preference of any
kind shall be given to national bidders in the bidding process.
(iv) Bidding shall not be restricted to pre-registered firms.
(v) Qualification criteria shall be stated in the bidding documents.
(vi) Bids shall be opened in public, immediately after the deadline for submission of
bids.
(vii) Single bids shall also be considered for evaluation.
(viii) Bids shall not be rejected merely on the basis of a comparison with an official
estimate without the prior concurrence of the World Bank.
(ix) Before rejecting all bids and soliciting new bids, the World Bank’s prior
concurrence shall be obtained.
(x) Contracts shall not be awarded on the basis of nationally negotiated rates.
(xi) Contracts shall be awarded to the lowest evaluated and qualified bidder.
(xii) Post-bidding price negotiations shall not be allowed with the lowest evaluated or
any other bidders.
(xiii) Bids shall be solicited and works contracts shall be awarded on the basis of unit
prices and not on the basis of a composite schedule of rates.
(xiv) Draft NCB contract would be reviewed by the World Bank in accordance with the
prior review procedures.
(xv) A firm declared ineligible by the World Bank, based on a determination by the
World Bank that the firm has engaged in corrupt, fraudulent, collusive, coercive
or obstructive practices in competing for or in executing a World Bank-financed
contract, shall be ineligible to be awarded a World Bank-financed contract during
the period of time determined by the World Bank.
50
(xvi) Each contract financed from the proceeds of the Grant shall provide that the
suppliers, contractors and subcontractors shall permit the World Bank, at its
request to inspect their account and records audited by auditors appointed by the
World Bank. The deliberate and material violation by the supplier, contractor or
subcontractor of such provision may amount to obstructive practice.
(xvii) State-owned enterprises shall be eligible to bid only if they can establish that they
are legally and financially autonomous, operate under commercial law, and are
not a dependent agency of the Recipient.
(xviii) The World Bank shall declare a firm ineligible, either indefinitely or for a stated
period, to be awarded a contract financed by the World Bank, if it at any time
determines that the firm has, directly or through an agent, engaged in corrupt,
fraudulent, collusive, coercive, or obstructive practices in competing for or
executing a contract financed by the World Bank.
Procurement of Non-Consulting Services
132. No such requirements are identified at this stage. If any such procurement is agreed, the
Banks sample documents for such procurements shall be used.
Selection of Consultants
133. The major consultancy assignments would be for supervision and M&E. Contracts with
consulting firms will be procured in accordance with Quality and Cost Based Selection
procedures or other methods given in Section III of the Consultants’ Guidelines. Consulting
services selection would be carried out through Quality and Cost Based Selection (QCBS) for
contracts with consulting firms costing more than US $300,000 equivalent, and through
Consultants Qualification (CQ) for contracts costing up to US $300,000. Other methods as
mentioned in Section III of Consultants’ Guidelines shall be used as required.
Individual Consultants
134. This is envisaged to include any full-time or part-time technical assistance required for
the Project. Services for assignments that meet the requirements set forth in paragraph 5.1 of the
Consultant Guidelines may be procured under contracts awarded to individual consultants in
accordance with the provisions of paragraphs 5.2 through 5.3 of the Consultant Guidelines,
which stipulate that the selection should be made through comparison of at least 3 CVs that meet
the requirements of the Terms of Reference including those for qualifications and experience.
Under the circumstances described in paragraph 5.4 of the Consultant Guidelines, such contracts
may be awarded to individual consultants on a sole-source basis.
135. Assessment of the Agency’s Capacity to Implement Procurement
136. PP&I staff (located at P&D) supported the project preparation. As per the general
implementation arrangements of this project there shall be a PMU who will be responsible for
the management of this project. After the appraisal mission in May 2012 the Government
informed that the project will be managed by the LGERRD. The Bank staff conducted an
51
assessment of the department. LGERRD is headed by Secretary Local Government. It is reported
that department is following General Financial Rules (GFR) for processing, however the Public
Procurement Rules are in place but the concern staff is unaware of it. At the central level of
LGERRD there is very small amount of procurement for operating items like stationary etc.,
which is conducted by Deputy Secretary Administration reporting to Secretary. The major
procurements are conducted at the field level under Donor Projects. The annual workplan of field
level procurements is reviewed by the Project Steering Committee. The committee comprises of
Additional Chief Secretary, 6 Secretaries from Provincial Government, PCNA Coordinator,
Project Director(s), and Chief Rural Development Sector. There is no specific Procurement
function with adequate capacity present at LGERRD. Whenever a project is initiated by a Donor,
a PMU is formed headed by a Project Director with the support of a Procurement Specialist, and
at the close of project the PMU staff has to leave and the developed capacity is not retained.
Donors like USAID, DFID, IFAD etc. are working with the LGERRD on different project. The
Bank was also involved in Community Infrastructure Project (CIP), the second phase of the
project was closed in the year 2009. The staff involved in this project has left after the closure of
the project. As there is no retention of capacity and absence of central Procurement unit, there
are no standard procedures and documents available for Procurement. There is a dire need to
build LGERRD own procurement capacity and formation of their own Procurement unit.
Communities have been engaged in Procurement with Bank and other Donors. There are some
Community Groups which are formally registered and have experience of conducting
Procurements with Donors. Other communities which have no formal organization will register
as per the requirement of forming EIG.
137. For this project LGERRD will form a PMU and will hire a well experienced Procurement
Specialist who shall report to the Project Director. The Procurement Specialist should be hired
by effectiveness (although this is not a condition of effectiveness). The Bank will conduct a
training workshop for the project staff soon after the hiring of Procurement Specialist. Once
PMU is setup there is a need for formulating SOP for PMU internal Procurement Function.
There could be a limited number of participating contracting firms, while consulting firms may
be reluctant to participate in the project given the law and order situation. The assignments shall
be developed in a manner that local as well as external participation is encouraged and the
contract sizes are large enough to solicit good response. There shall be adequate dissemination
of the opportunities. PMU should setup a website and all procurement notices, bid documents
/RFPs, evaluation reports, and award data shall be posted on the website. These websites shall
also be used for posting of grant evaluations, awards, and performances. Bank’s guidelines on
publication of award paragraph 2.31 of consultancy guidelines and 2.60 of the procurement
guidelines shall be followed for disclosure. PMU shall manage the complaint handling system.
This system would include documentation and addressing of complaints within a period of 7
days. As discussed during preparation with the PP&I (at P&D) due to security and access issues
in the project areas, there shall be an Interactive Voice Response system (in local language) for
complaint registration at community level. For community procurements there will be an SMS
based solution for tracking their funds flow. A GPS based monitoring system shall also be in
place for verification of procurement output by the communities.
52
Table 1: Procurement Actions (Summary of the above identified issues and agreed actions)
Issues Action Timeline Responsibility
i. Capacity of PMU and
line agencies
Hiring of respective
Procurement staff
Training session of
PMU
Before effectiveness*
After hiring of staff
KP
Bank
ii. Procedural clarity
SOP for PMU’s
internal approval
procedures
Sample contract forms
for CBCs
Before effectiveness*
Before works
commence
PMU
iii. Complaints Setting IVR based
complaint registration
system in local
language for
community complaints
2 months after
effectiveness
PMU
PMU
iv. Community
Procurement
Simplified Guidelines
for Community
Procurement
Before initiating
Procurements
PMU/Bank
v. Transparency Develop web site
Disclosure on website
With in1 month after
effectiveness
As required
PMU
vi. Monitoring SMS/ GPS based
solution for verification
of Procurement outputs
at Community level.
2 months after
effectiveness
PMU
Procurement Plan
138. The Recipient has developed a Procurement Plan for Project implementation which
provides the basis for the procurement methods. Procurement plan will be made available in the
Project’s database, Project website, and the Bank’s external website. The Procurement Plan will
be updated in agreement with the Project Team annually or as required to reflect the actual
Project implementation needs and improvements in institutional capacity Frequency of
Procurement Supervision.
139. In addition to the prior review supervision to be carried out from Bank offices, the
capacity assessment of the Implementing Agency has recommended frequent supervision
missions to visit the field to carry out post review of procurement actions.
53
Review of Procurement by the Bank
140. Thresholds for prior review of contracts under eligible expenditures are given in the table
below. All other contracts will be subject to Post-Review by the Bank. PMU will send to the
Bank a list of all contracts for post-review on a quarterly basis. Post-reviews as well as the
implementation reviews would be done six monthly. Such review of contracts below threshold
will constitute a sample of about 15-20 percent of the contracts.
Table 2: Thresholds for Procurement Methods and Prior Review
Aligned with The Rapid Response to Crisis and Emergencies:
Streamlined Procurement Procedures
Prior Reviews Identified in Approved Procurement Plan
Expenditure
Category
Contract Value
(Threshold)
US $
Procurement
Method
Contracts Subject to
Prior Review
US$ thousand
1.Civil Works
>,200,000 NCB First Contract
<200,000 Shopping First contract
2. Goods >300,000 ICB All
<300,000 NCB First Contract by all entities
<200,000 Shopping First contract by all entities
Regardless of value Direct Contracting All
3. Consulting Services All TORs and Training Programs
to be reviewed by Bank’s TTL
-3.A Firms QCBS,CQS,
QBS,FBS,LCS,
First contract by any process and
thereafter as provided in Proc.
Plan
Regardless of value Single Source All
Individual Consultants Comparison of 3 CVs First contract
Note: ICB = International Competitive Bidding; NCB = National Competitive Bidding; QCBS = Quality- and
Cost-Based Selection; QBS = Quality-Based Selection; FBS = Fixed Budget Selection; LCS = Least-Cost Selection;
CQS = Selection Based on Consultants' Qualifications; TOR = Terms of Reference.
141. Details of the Procurement Arrangement involving International Competition.
Goods and Works and non-consulting services:
142. List of contract Packages which will be procured following ICB and Direct contracting:
Ref
No.
Contract
Description
Estimated
Cost (US$)
Procurement
Method
PQ Domestic
Preference
Review
by Bank
(Prior /
Post)
Expected
Bid-
Opening
Date
Comments
No ICB Procurements
Consulting Services
143. List of Consulting Assignments with short-list of international firms:
54
1 2 3 4 5 6 7
Ref.
No.
Description
of Assignment
Estimated
Cost
Selection
Method
Review
by Bank
(Prior / Post)
Expected
Proposals
Submission
Date
Comments
No QCBS Procurement
55
Annex 7: Implementation and Monitoring Arrangements
PAKISTAN: KP Southern Area Development Project (KP-SADP)
Provincial Level Project Oversight and Coordination
144. The Planning and Development Department, as the project implementing entity, will
have primary responsibility for project implementation, and will ensure that the World Bank’s
guidelines and procedures are adhered for all fiduciary aspects (procurement management,
financial management, monitoring and evaluation), and reporting to the World Bank and other
relevant agencies (such as MDTF).
145. Project Steering Committee (PSC): The PSC would provide overall policy guidance to
the project and perform tasks including approval of annual workplan and review of project’s
financial reports and audit reports (internal and external). The PSC would be chaired by the
Additional Chief Secretary (ACS), KP province, and its members would include:
Secretary Planning and Development, KP
Secretary Finance, KP
Secretary Agriculture and Livestock, KP
Secretary Local Government, Election and Rural Development, KP
Secretary Social Welfare and Women Development
Chief Foreign Aid, P&D, KP
Divisional Commissioners from DIK and Bannu
Coordinator PCNA-ISU
146. The KP-SADP Project Director is the secretary to the PSC.
Provincial Level Project Management
147. Project Management Unit (PMU): the overall project management functions would be
performed by the Project Management Unit (PMU), established in the Local Government,
Election and Rural Development Department under the Planning and Development Department
(P&DD) within the KP Secretariat. The PMU would be responsible for the implementation of the
project as well as the coordination with involved line departments for (sectors), for the
implementation of the three components of the project. The PMU would have the overall
responsibilities for planning, implementation, coordination, monitoring and reporting. The PMU
would also perform the overall fiduciary management tasks, including procurements and
financial management for all project components. The PMU would be strengthened with
additional staff for technical and support functions through new recruitments as well as inter-
departmental secondment.
District Level Organization for Project Coordination and Micro-project Approval
148. The DRC is established by the PMU, with the assistance of project-supported Facilitators.
The DRC would be chaired by the DCO and the EDO-CDD would be the Secretary of this
Committee. The DRC would include representatives from key line departments including
agriculture, livestock, irrigation and works and services. A key aspect of the DRC would be the
community representation. At least two traditional or community leaders designated by the
56
Clustered Economic Interest Groups would be members, one of which would also serve as the
deputy chairperson of the DRC.
149. Responsibilities of the DRC are as follows:
(i) Review and approve CAPs which have been screened against a checklist of criteria by the
EDO-CDD.
(ii) Review and approve proposed micro-projects from the CEIGs.
(iii) Transmit approved micro-projects to the PMU for funding.
(iv) Harmonize agricultural projects within the District to avoid duplication and ensure
judicious use of scarce resources.
District-Level Project Implementation
150. The District Coordination Officer (DCO) would be the de facto project manager at the
district level. A new position of the Executive District Officer for Community Driven
Development (EDO-CDD) would be created. This position would report to the PMU and under
the administrative reporting of the DCO, the office of the EDO-CDD would serve as the
secretariat of the District Review Committee (DRC).
151. Responsibilities of the EDO-CDD are as follows:
(i) Collection of CAPS submitted by the CEIGs.
(ii) Screening of the CEIGs to ensure that they conform to the checklist of criteria specified
in the PIM, submitting the screened CEIGs which have been cleared to the DRC, or
returning rejected CAPs to the CEIGs with specific recommendations on how these can
be improved with a view to resubmission.
(iii) Convening meetings of the DRC to review and approve CEIGs.
(iv) Monitoring of community mobilization efforts.
(v) Ensuring that CEIG priorities are reflected in the CAPs;
(vi) Helping to coordinate technical assistance from relevant ministries to support the input or
advisory services activities of the Project.
Community-Level Project Implementation: Clustered Economic Interest Groups (CEIGs)
152. At the Tehsil level the Clustered Economic Interest Groups (CEIGs) are an apex
organization of economic interest groups which derive their livelihood from the shared natural
resources in the communities within the Tehsil. The CEIGs are entities created for the Project
and will be registered according to existing local and district laws. They identify, prepare,
implement, operate and maintain their micro-projects, assisted by Facilitators and technical
specialists whom they contract either through the relevant district sectoral departments or
directly, and through technical assistance and training made available by the PMU.
153. The role of the CEIGs is to link EIGs with the project resources to facilitate capacity-
building, advisory services and investment financing for their development activities. To gain
such access, CEIGs must meet specific eligibility criteria and follow specific procedures. Once
micro-projects are approved by the DRC, CEIGs can access a share of the costs for design and
implementation.
57
154. Subproject agreements are signed between the PMU and CEIGs. Resources are then
transferred directly from the PMU level Special Account to a district level special account
different from the normal district account (dedicated account for the CEIGs).
155. The responsibilities of the Tehsil level Clustered Economic Interest Group (CEIG) are as
follows:
(i) Become registered as a legal entity in accordance with existing local and district laws.
(ii) Elect a management committee, including a monitoring committee.
(iii) Assign representatives to DRC meetings.
(iv) Identify, through a consensus-building process, priority investments for the members they
represent.
(v) Use technical assistance, if needed, to prepare micro-project proposals that deal with
members' priority concerns.
(vi) Ensure that all required procedural and substantive elements are contained in the CAPs,
particularly to ensure that a broad range of constituents have participated in CAP
preparation;
(vii) Ensure that all members receive appropriate training.
(viii) Prepare draft CAPs, following a participatory and socially-inclusive process and ensure
timely submission to the EDO-CDD.
(ix) Sign any necessary agreements with the Project and with service providers.
(x) Open a specific bank account to receive subproject funds.
(xi) Open a specific account for deposits of CEIG members’ funds for a revolving investment
recovery fund.
(xii) Carry out approved and agreed upon activities, with responsibility for members'
contributions to the financing of such activities.
(xiii) Contract goods and technical assistance to develop operation and maintenance programs
and techniques.
(xiv) Operate and maintain micro-projects, with responsibility for collecting user fees that
ensure the resources needed for the operation, maintenance and future replacement of
financed investments are available.
(xv) Be equipped with physical and financial control instruments.
(xvi) Keep records of bookkeeping and other relevant information for project supervision
missions.
156. Membership of the CEIG management committee is not to exceed nine (9) persons. The
CEIG will have a management committee, consisting of:
• a Chairperson;
• a Treasurer;
• a Secretary;
• a Maintenance sub-committee (2 persons);
• a monitoring and evaluation sub-committee (2 persons); and
• a procurement sub-committee (2 persons).
157. The committee should be transparently elected and should include representatives of
different user groups. To ensure the representation of women on the committee, it is stipulated
58
that at least one quarter of the membership of the CEIG management committee should be
reserved for women.
Community-Level Project Implementation: Economic Interest or User Groups
158. Members of Economic Interest or User Groups (EIGs) are the primary beneficiaries of
the Project. A user groups would be defined by the members themselves. The size of a Economic
Interest Group is projected to be between 8 and 10 households and as such, may comprise from
80 to 100 individuals.
159. Members of various communities in the district are engaged in different types of on or off
farm activities for income generation. In the context of this project, the EIGs may be organized
along the following economic activities.
• Orchid growers associations
• pastoralists (sedentary or nomad)
• hunters
• fishermen
• gatherers of edibles and non-edible plants
• food and crop processing, marketing and distribution
• other economic interest groups
160. Each user group would have an association that represents its interests with the following
responsibilities:
(i) select a management committee, including a monitoring sub-committee.
(ii) Represent members at the CEIG level and sign any necessary agreements.
(iii) Identify, through a consensus-building process, priority investments for the members they
represent.
(iv) Use technical assistance, if needed, to prepare micro-project proposals that deal with
members' priority concerns.
(v) Be equipped with physical and financial control instruments.
(vi) Operate and maintain micro-projects, with responsibility for collecting user fees to fund
the resources needed for the operation, maintenance and future replacement of financed
investments.
(vii) Keep records and other relevant information for project supervision missions.
161. The EIG should have a management committee not exceeding three (3) persons,
consisting of:
• a chairperson
• a treasurer
• a secretary
Facilitators
162. EIGs should require project assistance to constitute CEIG as their apex organization and
they later should require assistance in community needs assessment and rural participatory
appraisal. Facilitators should be hired by and report to the PMU and EDO-CDD on performance
contracts.
59
163. Responsibilities of Facilitators are as follows:
(i) Introduce and sensitize EIG members to the goals and procedure of the project.
(ii) Assist with the formation of CEIGs.
(iii) Liaise with the EDO-CDD Desk.
(iv) Facilitate needs assessments for EIGs;
(v) Preparation of CAPs.
(vi) Raising awareness about the environmental implications of micro-project
implementation.
164. The implementation arrangements and funds flow chart is provided below.
165. Project implementation procedures: The Project will adopt a phased approach to
implementation of CAPs and associated subprojects. Whether or not a CAP will be multi-year or
annual and or across district is an issue that will be resolved using the Participatory Rural
Appraisal (PRA) approach, which will describe the socioeconomic setting of the community and
the social-mapping, construct the livelihood profiles, identify the relevant technical, physical,
environmental, and institutional constraints, leading to the development of a set of proposals
designed to overcome these constraints. The Report of the Community Needs Assessment
(CNA) will be the source of information for the collective identification of the development
priorities of the communities by the CEIGs and the translation of those priorities into investment
subprojects and other activities to be funded under the Project. The first batch of subprojects is
60
expected to include relevant details in terms of subproject sites, scale, and detailed design and
cost estimates. This approach will give flexibility in the implementation of the Project allowing
for continuous adjustments in response to change in production, market, or policy environment,
thereby contributing towards achieving the PDOs.
Overall implementation of the Project will be done according to detailed procedures defined in
the PIM. A user-friendly Operations Manual will be available to the CEIGs. Preparation and
adoption of the Operations Manual is condition for presentation of the project for RVP approval.
Monitoring arrangements
166. This section aims to set the ground to identify the Project’s Results Framework and other
M&E tools as required. In particular, this section includes: (i) principles and aims of the M&E
system of KP-SADP; (ii) overview of the project results; (iii) specific M&E arrangements; and
(iv) indicative list of required M&E tools.
i. Principles and Aims of the Monitoring and Evaluation System
167. The M&E system will be guided by the following principles: (i) participation of
beneficiaries at all levels of project M&E the assessment of the project implementation and of
their livelihoods; (ii) enhanced accountability through transparency and open availability of the
data and analysis, promoting a culture oriented towards knowledge sharing and enlarging the
outreach of the project’s results; (iii) simplicity of the system and of its indicators, in order to
facilitate the data collection and analysis, both by the PMU and other parties; (iv) ownership by
PMU, through its involvement in the formulation of the Operations Manual; (v) consistency with
the existing M&E government systems.
168. Beneficiaries’ participation will be ensured at all levels, through specific tools such as
community scorecards, project feedback fora, interactive case studies. The underlying principle
of the involvement of beneficiaries is not only to make them participating in the assessment of
the quality of interventions, but also to involve them in the restitution of their contributions after
the project’s analysis. This principle and approach will be reflected also in the communication
strategy.
169. The aim of the M&E system is three-fold, comprising the following main objectives:
a. To document implementation progress and guide project implementation in taking
corrective actions for improvement. The M&E system will provide regular
information about the project implementation giving directions to the PMU on the
needs to reorient the activities and approaches. Such regular monitoring would also
allow the World Bank to supervise progress on a regular basis, identify
implementation bottlenecks in a timely manner and ensure that the project remains
on track to achieve its PDO.
b. To provide the basis for project evaluation and to draw lessons from implementation.
The M&E system will ensure that appropriate information is collected throughout
implementation so that the third party evaluation and the ICR Report can assess the
success of project implementation as well as beneficiary-level impact.
61
c. To develop a knowledge sharing and dissemination outlet, as a cross cutting aim,
through the publication of the Annual Reports and of the Community Action Plans.
Knowledge sharing will be done at all levels and with the most appropriate tools,
from the beneficiaries, to the targeted institutions, to external users and the open
public.
ii. Project results:
170. The results framework of the project focuses on both longer-term developmental results
(Project Development Objective – PDO) and medium-term effects of the interventions’ outputs
(outcomes/ intermediate outcomes). These categories of results are measured during the course
of project implementation and complemented by specific studies carried out with by a Third
Party Evaluation. In support of the project objective, three project outcome indicators and twelve
intermediate outcome indicators have been identified that constitute the project’s Results
Framework for which the project will be accountable (Annex 2).
171. At PDO level, the project will measure the changes in share of population that access
social infrastructures and productive infrastructures in turn improved and provided by the
project. This aspect is measured through three indicators, which inform also on the possibility to
scale-up the project’s investments, and to assess the involvement of communities. Three
additional indicators will measure the process towards the achievement of the PDO, focusing
on the establishment or revitalization of existing Economic Interest Groups (EIG), on their use of
CAP as participatory plans, and on the arrangements for community engagement in post project
sustainability or O&M (this only where relevant). Given the CDD nature of the project,
monitoring the process is an important area to capture evidence that the voices of the vulnerable
and ultra-poor are included.
172. The interventions are likely to improve the livelihoods of targeted beneficiaries through
their enhanced utilization of social services, improved access to productive infrastructure and
through the implementation of community-based action plans (CAPs) funded by the project.
Despite a significant part of the investment foreseen by the project are expected to contribute to
improving targeted households livelihoods, this aspect is not part of the regular monitoring. At
this pilot stage of CDD in KP Province, the priority is to focus on the increased access and
utilization of productive infrastructure and social services. The impact on income will be studied
in separate ad hoc studies (e.g.: mid-term/ final evaluation).
173. At the intermediate outcome levels, the project will generate three main results,
corresponding to the three components:
A. The communities are able to prioritize their needs and to produce accordingly their
development plans (Community Action Plans) through a participatory process. This
result will be monitored through three indicators. Monitoring the progress towards
the expected targets will also inform about the effectiveness of the adopted approach
and the potential increase of the outreach of the project within the given timeframe.
B. The capacity of the communities (both at Tehsil and lower levels) to increase their
incomes and access to services are enhanced through the use of funds and
implementation of the CAPs. This result is monitored through four indicators.
62
Analyzing the content of the CAP and the share between sub-components activities
will inform about the composition of the target groups and will inform the analyses
on the potential increase of income and improvement of livelihoods.
C. Trained human resources (project’s staff and government officials directly involved
in implementation) are able to provide financial and technical support to
beneficiaries through transparent management and monitoring system. Through three
indicators, this result will measure the increased knowledge and skills of KP staff (ie:
EDO, and additional M&E officers) and inform about the capacities available to
respond to the targeted population needs in view of a possible increase of the
activities’ outreach.
174. he activities being financed will likely have different impact on
the different categories of beneficiaries: poor versus ultra-poor and marginalized households and
women compared to men headed households. For this reason, the majority of indicators – where
specified in the Results Framework will be measured with gender disaggregation. Where
appropriate, for Component B, the disaggregation will comprise also the socio-economic
categories, types of services and type of infrastructure that is supported through project
interventions.
iii. Monitoring and Evaluation arrangements
175. The reporting system of the M&E is expected to inform on one side the official
Government system – the monitoring of the ADP projects, to which KP-SADP will adapt
producing monthly reports on physical and financial progress against set targets; and, on the
other side, the project requirements, focusing on results, against the agreed Monitoring and
Evaluation results framework (Annex 2). The overall responsibility for the functions related to
M&E is assigned to the Project Management Unit (PMU). More specifically, within the PMU:
a) One dedicated Deputy Director with M&E functions, at PMU level, in Peshawar,
will be responsible to manage the overall M&E system, will prepare or clear the
formats and tools to be used for data collection, ensuring farmers participation at all
stages, organizing data systematization through a dedicated Monitoring Information
System, carrying out data analysis and reporting, ensuring the communication of the
analyses at all levels;
b) Three newly created Executive District Officers/CDD, at District level, will be
increasingly involved in the preliminary analysis of results. This activity will serve as
learning-on-the-job for the newly created government officials.
c) Three M&E officers at District level will coordinate the data collection, carrying out
sample field visits and will be responsible for the preliminary analysis of results. The
M&E officers will ensure that basic information for the regular reporting are
provided to the DD/M&E.
d) 60 field Facilitators (social mobilization staff, 30 male and 30 female) at Tehsil level,
will have the responsibility of M&E data collection at household level; they will
63
interact with beneficiaries and ensure their inclusion in the M&E system, through
data collection and communication of reports and analysis through appropriate tools;
e) Beneficiaries, part of the M&E process at all stages, will keep record of the activities
at Economic Interest Group level (EIG), as well as at aggregated into Tehsil CEIGs;
they will contribute to the evaluation of the activities through appropriate tools and
through regular facilitations (quarterly). They will receive feedback of the reporting
done at aggregated level, as a restitution of their contribution and as a learning
exercise.
176. Outside the PMU, the M&E system will involve in its reporting the M&E Directorate of
the Planning and Development Department; this will serve as basis for reciprocal development of
capacities on M&E reporting focused on results.
Responsible Role/ Responsibility Action Frequency Output
PMU/ Peshawar
Deputy
Director
M&E
Coordination of M&E
system, ensure
involvement of
beneficiaries
Supervision of M&E
system and MIS,
coordination of districts,
analysis, reporting,
communication
Quarterly,
Annually, end
of project
Regular reports, with
indication of
beneficiaries
involvement, by gender
Regular Government
Reporting
Clearance of reports and
submission Monthly
Monthly report; upload
on web20
District
Executive
District
Officers/CDD
Supervision of staff,
ensuring regular data
collection and
reporting.
Coordination of staff.
Increasing participation in
reports review and
analysis. Sample field
monitoring visits
Quarterly
Draft Monthly Reports
submitted to PMU on a
time to be agreed that
ensures sufficient time
for PMU review
Monitoring
Officer
Coordination of field
officials, data
collection and
reporting, plus
preliminary analysis
Regular field visits; data
entry in MIS; preparation
of draft district monthly
M&E reports.
Monthly and
Quarterly
Monthly reports drafted;
Data on M&E system
collected and in MIS.
Information for quarterly
reports prepared.
Tehsil
Field
Facilitators
Data collection at HH/
EIG/ CEIG levels
Field based, continuous
visits. Data collection,
facilitation of beneficiaries
evaluations
Quarterly
Formats filled and
submitted to District
M&E Officers
Village/ field
Beneficiaries
(EIG and
CEIG)
Maintenance of
registers
Collection and
maintenance of information
on EIG/ CEIG,
memberships, CAP and
cash accounts
On need/
meeting basis
Registers ready to be
consulted and open to
anyone in the
community
20
M&E Directorate of the P&D Department has established an on-line system for monitoring project
implementation.
64
iv. Indicative list of Monitoring and Evaluation tools
177. The project is going to measure its indicator through a set of M&E tools to be developed
by the PMU at the beginning of project implementation. Among other tools, the project will
establish:
Monitoring Information System (MIS), to record all data and progress towards results
at all levels.
Formats for baseline information: A specific format to gather information on
household beneficiaries. Source of specific information on the targeted area will be the
database created by, e.g., the Benazir Income Support Project, to which the Bank is
providing technical assistance, or other available surveys (Government Household
Survey).
Perception surveys, to measure the satisfaction and relevance of investments to the
needs of farmers, to be carried out prior, during and after the investments are completed.
Capacity development outcome questionnaire, through a combined assessment on
knowledge and skills of PMU staff based on three phases: (i) pre-learning event, (ii)
immediately after-training, and (iii) six months after the training.
178. Participatory Baseline: The targeting of beneficiaries and the gathering of information
regarding the beneficiaries reached by the project will be done in a participatory manner. The
beneficiaries will participate in the selection of the criteria and will then self-select themselves,
providing information on poor/ ultra-poor within the community. The format for monitoring
beneficiaries involved in the project (i.e.: EIG members) will include, among others: name of
Village, pop of village, head of households, number of HH members, how many members work/
generate income, main economic activity within the HH, secondary economic activity, assets
owned at date of survey.
65
Information flow and communication line of findings and results within PMU/ beneficiaries
Information flow
Project Steering Committee
Project Management Unit
District Offices
Tehsil level: facilitators and CEIG
Households Beneficiaries and EIG
Other institutions
Third party evaluation
66
Annex 8: Project Preparation and Appraisal Team Members
PAKISTAN: KP Southern Area Development Project (KP-SADP)
Name Title Unit
Tahira Syed Co-Task Team Leader
Senior Rural Development Specialist SASDA
Chukwudi Okafor Co-Task Team Leader
Senior Social Development Specialist
ECSSD
Uzma Sadaf Sr. Procurement Specialist SARPS
Khalid Bin Anjum Procurement Specialist SARPS
Syed Waseem Kazmi Financial Management Specialist SARFM
Anwar A. Bhatti Financial Analyst SACPK
Sameena Dost Sr. Counsel LEGES
David J. Steel ORAF Reviewer
Consultant SARDE
Kamal Siblini Results Framework Reviewer
Sr. Operations Officer OPCS
Jong A. Choi Results Framework Reviewer
Operations Officer OPCS
Javaid Afzal Sr. Environment Specialist SASDI
Salma Omar Sr. Social Development Specialist SASDS
Syeda Maheen Zehra Sr. Institutional Development Specialist SAWSP
Melissa Williams Sr. Rural Development Specialist SASDA
Winston Dawes Rural Development Specialist SASDA
Tommaso Alacevich Economist / M&E Specialist FAO
Mohamad Omar Khalid Environment Consultant SASDI
Altaf Iqbal Economic Analysis Consultant SASDA
Robert Bou Jaoude Program Manager MDTF SASPK
Chau-Ching Shen Sr. Finance Officer CTRFC
Shabir Ahmad Sr. Program Assistant SASDO
Lilac Thomas Program Assistant SASDO
Afzal Mahmood Program Assistant SASDO
Shahnaz Meraj Program Assistant SASDO
Parmesh Shah Peer Reviewer
Lead Rural Development Specialist
SASDA
Meena Munshi Peer Reviewer
Senior Livelihoods Specialist AFTAR
Abimbola Adubi Peer Reviewer
Senior Agriculture Specialist AFTAR
Hugh Riddle Peer Reviewer
Senior Operations Officer OPCFC
Jean Mazurelle Peer Reviewer
Ex-Country Manager, Afghanistan OPCSC
67
Annex 9: Environmental and Social Safeguards Framework
PAKISTAN: KP Southern Area Development Project (KP-SADP)
179. To address the potentially negative environmental and/or social impacts associated with
the projects under MDTF, the Bank has prepared an Environmental and Social Screening and
Assessment Framework (ESSAF), in accordance with the OP 8.0 for emergency operations.
Since the KP-SADP Project is being proposed under MDTF, the ESSAF is applicable to this
project also. The key aspects of the Framework are summarized below.
180. Impact Screening, Assessment and Mitigation Planning. While preparing any
operations or projects for financing under the MDTF, the ESSAF will be followed to screen
environmental and social impacts and plan any required mitigation measures. The screening
process and its findings as well as the proposed mitigation measures will be documented as part
of the project/subproject package. The following guidelines, codes of practice and requirements
will be followed in the selection, design and implementation of any operations financed under
the MDTF.
a. Environmental impact assessment will be conducted for all projects/subprojects under
MDTF, during the project implementation. Criteria for the type of assessment to be
conducted for individual projects/subprojects are provided in Table 1. Full Environmental
Assessments (EAs) will need to be conducted and clearance obtained from the Bank prior to
initiating environmental category ‘A’ projects/subprojects. Environmental and Social
Management Plans (ESMPs) will need to be prepared and clearance obtained from the Bank
prior to initiating environmental category ‘B’ projects/subprojects. The EAs and ESMPs
will also be submitted to the relevant EPA for obtaining No Objection Certificate (NOC)
before commencing the project/subprojects implementation, in line with the national
regulatory requirements in the Country. For smaller subprojects, environmental and social
screening and assessment will be conducted with the help of checklists (a typical checklist is
provided in the ESSAF).
b. Each implementing agency for the projects under the MDTF will appoint/designate an
environmental and social focal point (ESFP), who will be responsible for ESSAF
implementation within his/her organization, and also for the preparation and submission of
quarterly monitoring reports to the Bank on the screening of and the rationale for the
proposed environmental categorization of each project.
c. While conducting environmental assessment, cumulative impacts of a large number of
projects/subprojects will also be considered.
d. All projects/subprojects will be screened for need of land acquisition and resettlement. If
confirmed, necessary planning efforts will be carried out to develop mitigation measures. A
guideline for land compensation and resettlement planning is provided in ESSAF.
e. All projects/subprojects will be screened for impacts on physical cultural resources and
necessary mitigation measures. Procedures for the protection of cultural property, including
the chance discovery of archaeological artefacts, unrecorded graveyards and burial sites are
outlined in ESSAF.
68
f. All construction contracts for the projects/subprojects financed by the MDTF will include
appropriate clauses to ensure effective implementation of the mitigation measures identified
in EA/ESMP/Checklist. A sample environmental safeguards procedure for inclusion in the
technical specifications of contracts is provided in ESSAF.
g. The Environment, Health and Safety Guidelines developed by the International Finance
Corporation (IFC) and the World Bank will also be applicable to the activities under the
emergency projects/subprojects. The Guidelines are provided in ESSAF.
h. The procurement plans for the proposed projects/subprojects will include milestones for
preparation of EA/ESMP/Checklist, and obtaining clearance from the Bank.
i. Subject to the needs as determined by the Bank’s safeguards’ team, the implementing agency
will engage an independent consultant or consulting firm to conduct an annual environmental
and social audit as third party validation, of the subprojects undertaken during each year of
the Project implementation.
181. Consultations. Consultations will be mainstreamed in the preparation of new operations
under the MDTF. For environmental Category ‘A’ and ‘B’ operations21
, the implementing
agencies will consult the potentially affected groups and local nongovernmental organizations on
the project environmental and social aspects, and will take their views into account. The
implementing agencies will initiate these consultations as early as possible, and for meaningful
consultations, will provide relevant material in a timely manner prior to consultation, in a form
and language(s) that are understandable and accessible to the groups being consulted.
182. For Category ‘A’ projects/subprojects, the implementing agencies will consult these
groups at least twice: (a) shortly after the environmental screening and prior to finalization of the
terms of reference for the EA and Resettlement Plan (RP); and (b) once a draft EA report and RP
are prepared. For the initial consultation, the implementing agencies will provide a summary of
the proposed subproject's objectives, description, and potential impacts. For both Category ‘A’
and ‘B’ projects, the implementing agencies will provide these groups with a summary of the EA
report and RP (including the conclusions of the assessment). In addition, the implementing
agencies will make the draft reports publicly available to project-affected groups and local
nongovernmental organizations.
183. Planning, Review and Approval. The entire environmental and social screening and
assessment procedure described above will be integrated within the preparation of the operations
under the MDTF. To this end, the screening and planning to address environmental and social
impacts would be initiated during the operation preparation phase. The operation preparation
agencies will be responsible for the screening and planning of any environmental and social
action plans required in line with this Framework. The EA or ESMP and RPs will be submitted
to the project approving authority as part of the project/subproject application package. The
implementation agencies will assign specialists to review the environmental and social safeguard
action plans, such as screening report, EA, ESMP and RP. The implementation agencies will
submit the safeguard documents for World Bank’s review and clearance, in accordance with the
procedures as described earlier in the Annex. The implementation agencies will not approve the
proposed operations until the required environmental and social safeguard action plans are
21
As defined in World Bank Operational Policy 4.01, Environmental Assessment.
69
cleared for compliance with the Framework by the World Bank. A simplified flow chart for
subproject preparation, approval and execution along with the EA/ESMP/Checklist requirements
is provided below.
184. The implementing agencies will implement the projects under MDTF in close
coordination with the relevant line departments, local governments, and district administration.
Each implementing agency and in turn, each line department, will be responsible for applying the
safeguard screening and mitigation requirements to its own projects. Separate environmental
and social focal points (ESFPs) will be identified in each of the implementing agencies, with
responsibility for overseeing the implementation of the ESSAF. The provincial EPAs (for KP
and Balochistan), and Federal EPA (for FATA projects) will be responsible for environmental
clearance for operations or projects/subprojects that require statutory environmental clearance, in
accordance with the law. Although the national/provincial environmental clearance procedures
are adequate and fairly reliable, the Bank will still review a samples of the EAs/ESMPs prepared
under each subcomponent and provide necessary concurrence for the approval of disbursements
of funds.
185. All agencies and departments who are preparing and will implement operations under the
MDTF will appoint officers as the environmental and social focal points (ESFPs), who will liaise
and coordinate with relevant agencies to ensure compliance with this Framework.
186. Capacity-Building and Monitoring Of ESSAF Implementation. As part of the
capacity-building to be provided for implementation of the proposed operations, the ESFPs and
relevant staff of the concerned line departments will also receive training in ESSAF’s
application. The World Bank will monitor and provide guidance in the implementation of the
ESSAF. The World Bank will also assist in this capacity-building in the implementation of
approved safeguard action plans.
187. The implementing agencies through their ESFPs will be responsible, besides other
functions, to monitor and supervise the implementation of any safeguard action plans. For this
purpose, the implementing agencies will establish a monitoring mechanism as part of the project
management system over the implementation of agreed safeguard action plans. In addition, the
implementing agencies will also engage external monitors over the implementation of agreed
safeguard action plans. The monitoring mechanisms should be detailed in the required action
plans.
Subproject
identification
Subproject
preparation
Determine
type of assessment
required per
criteria in Section VI
Conduct EA,
prepare ESMP, or fill
Checklist
;prepare RP
per criteria in
Section VI
Review and
approval of EA, ESMP or
Checklist; and
RP by EPA
and WB
Project /
subproject
approval by Competent
Authority
Project /subproject
implementation.
Implementation
of social and
environmental mitigation
measures as
identified in EA/ ESMP/Checklist
/RP.
70
188. Disclosure. This ESSAF has been shared with all relevant agencies, line departments of
the provincial and federal governments, concerned nongovernmental organizations, and
development partners. Subsequently, it has also been disclosed in Urdu and English by the
implementing agencies, and also made available at the websites of GoP, GoKP, FATA
Secretariat, GoB and the relevant line departments. Copies of ESSAF have also been sent to
Federal EPA, KP EPA, and Balochistan EPA. The document is also disclosed at the World
Bank’s InfoShop. Relevant project specific safeguard documents/mitigation plans to be prepared
subsequently will also be disclosed in a similar manner.
TABLE 1: CRITERIA FOR TYPE OF ENVIRONMENTAL INSTRUMENT
Type of Subproject
Category A
Projects/Subprojects
Full EA Required
Category B
Projects/Subprojects
ESMP Required
Smaller
Projects/Subprojects
Environmental
Screening Required
Infrastructure (such as
water supply, sanitation,
solid waste
management, access
roads, drainage, and
street lighting)
Cost: Rs 25 million or
above
Cost: less than Rs 25
million, but more than 1
million
Cost: up to 1 million
Roads Cost: Rs. 50 million or
above
Cost: less than Rs 50
million, but more than 2
million
Cost: up to 2 million
Schools and health care
facilities
Cost: Rs. 50 million or
above
Cost: less than Rs 50
million, but more than 2
million
Cost: up to 2 million
Note: These criteria may need to be customized for individual projects under MDTF and approval
obtained from the Bank.
Project-specific Environmental and Social Impact Assessment
189. Construction/rebuilding/improvement of infrastructure as well as operation of these
facilities under Component B of the project may potentially cause negative environmental
impacts, such as changes in land use and landform, soil erosion, water and soil contamination, air
quality deterioration, damage to natural vegetation, and safety and health hazards for workers
and surrounding population. In order to address these potential impacts and in accordance with
ESSAF requirements described earlier, the GoKP will conduct a project-specific Environmental
and Social Assessment (ESA). The key elements of this ESA are listed below.
(a) Baseline description
(b) Regulatory and policy review
(c) Analysis of alternatives
(d) Potential impacts of the project activities on soils, air, water, natural vegetation,
wildlife, and people
(e) Mitigation measures to address the above impacts
71
(f) An Environmental and Social Management Plan (ESMP), which defines institutional
arrangements for the environmental management of the project.
(g) Monitoring mechanism to ensure the implementation of the mitigation measures
during the implementation of the Project.
(h) Reporting and documentation protocol for environmental and social management.
(i) Environmental training and capacity building requirements.
190. The ESA y will be made part of the construction contracts, making its effective
compliance as one of the contractual requirements. The ESA is included in the legal covenants
of the agreement between the GoKP and the Bank. The ESA has been disclosed locally as well
as at the InfoShop.
191. To manage the preparation and implementation of ESA, a safeguards focal point will be
appointed within PMU at the provincial level. In addition, an appropriate officer such as EDO-
CDD will be designated as district safeguard coordinator to ensure ESA implementation within
each district. Roles and responsibilities of these personnel will be detailed in the ESA.
Environmental Aspects:
192. Rebuilding/improving of social infrastructure, constructing/establishing productive
infrastructure, and asset building for ultra-poor under the Component B of the project may
potentially cause negative environmental and social impacts, such as changes in land use and
landform, soil erosion, water and soil contamination, air quality deterioration, damage to natural
vegetation, and safety and health hazards for workers and surrounding population. However,
most of these impacts are not likely to be irreversible, wide-spread, or unprecedented, and can be
addressed with the help of appropriately designed and effectively implemented mitigation plan.
Therefore the proposed project has been classified as Environment Category B, in accordance
with the WB Operational Policy 4.01. No other safeguard policy is presently triggered. However,
further clarity and confirmation on safeguards policies would be sought during implementation
for instance, if agriculture inputs support is being provided, which may lead to the need for
developing a pest management plan.
193. To address the potentially negative environmental and/or social impacts associated with
the projects under MDTF, the Bank has prepared an Environmental and Social Screening and
Assessment Framework (ESSAF), in accordance with the OP 8.00 for emergency operations.
Since the KP SADP is being proposed under MDTF, ESSAF is applicable to it also. A summary
of ESSAF has been given in Annex 9. The ESSAF has been shared with the Government of KP
(GoKP). It has been disclosed locally by the GoKP on March 28, 2012 and also at the World
Bank’s InfoShop on the same date.
In accordance with ESSAF requirements, the GoKP has prepared a Project-specific
Environmental and Social Assessment (ESA). The ESA identifies the negative environmental
and social impacts that are likely to be caused by the Project during its various phases, and
proposes mitigation measures to address these impacts. The ESA also proposes the institutional
arrangements to manage the environmental aspects of the Project, lists environmental monitoring
requirements to ensure the effective implementation of the mitigation measures, identifies staff
training needs, and also specifies the reporting and documentation requirements. All subproject
72
investments will be subject to environment and social screening as per ESA study at the design
stage. The adverse environment and social impacts associated with the subprojects will be
mitigated through the ESMPs developed under ESA for the related subproject. The ESA has
already been sent for Bank’s clearance, and will be disclosed locally by the GoKP on its website
as well as on the InfoShop of the World Bank after the clearance.
Social Aspects:
194. Inequality, social exclusion and deprivation are some of the social development
challenges that face the target areas, and the knowledge of these challenges informed the design
and operational relevance of this Project. The project design ensures that the voices of different
economic interest groups including users groups that are traditionally marginalized by gender,
income, age, religion and class are fully heard and that their interests are reflected in the CAPs
and in all project activities. The social guidelines in the PIM will ensure that vulnerability is
addressed in subproject targeting, and that elite capture is prevented.
195. Broad-based participatory and extensive consultative process with stakeholders at both
the provincial, district and community levels including representatives from public, private, non-
governmental, and representatives of beneficiary communities have provided much of the
information used for the design of the Project. The key result of public consultations with
stakeholders showed that communities are highly sensitized and are capable of organizing
themselves to address risks to community welfare. It is envisaged that public consultation would
be an on-going activity throughout the entire project cycle.
196. In accordance with OP8.0, the MDTF team had already prepared an Environmental and
Social Screening and Assessment Framework (ESSAF) that would govern safeguards screening
and compliance activities during and under the MDTF’s implementation, which will be applied
in this project as discussed and agreed with the client.
197. To ensure effective application of the World Bank’s safeguard policies and the national
regulatory requirements, the ESSAF provides guidance on the approach to be taken during the
selection and design of projects/subprojects and the planning of mitigation measures.
198. ESA implementation: All sub-project investments will be subject to environment and
social screening at the design stage, comprehensive environment and social screening reports
detailing the procedures and evidences will be prepared, and disclosed prior to initiating
implementation. The adverse environment and social impacts will be mitigated through the
environmental and social management plan developed under ESA for all interventions.
199. In light of the scope of works, which comprise rehabilitation of existing social
infrastructure such as roads, schools, and health centers, and establishment of small-scale
productive physical and socioeconomic infrastructure, income-earning assets, and extension
service-type activities, the risks of triggering negative social impacts in the project areas are
minimal. Further, OP4.12 on Involuntary Resettlement is not triggered as the project does not
anticipate any involuntary land acquisition. While the project footprint remains to be determined
during the course of project implementation, the project anticipates that land requirement for sub
project activities, however small, will be met through voluntary land donation through direct
73
purchase using the principles of willing-buyer willing-seller. As part of the subproject selection
process, the screening will include an assessment of whether there are potential land acquisition
and/or involuntary resettlement issues. All such sub-project locations requiring involuntary land
acquisition shall be avoided without compromising the project development objectives. The
screening checklists and the selection criteria will be fully explained in the Operations Manual
along with procedures for documenting voluntary contribution in the form of land.
74
Annex 10: Economic and Financial Analysis
PAKISTAN: KP Southern Area Development Project – (KP SADP)
200. Open menu: The difficulty in undertaking ex-ante cost/benefit or cost/effectiveness
analysis for this type of project is due to the key strength of the project design, i.e. the project
will implement a devolved and decentralized demand-driven “open-menu” approach for
subproject selection. It is difficult to quantify the benefits because the types of services and
related infrastructure investments in subprojects will not be known with certainty, until the KP-
SADP is well underway and specific decisions have been made at the local level by the
communities.
201. Expected benefits: It is also difficult to quantify the economic benefits as the extent and
types of services and related infrastructure investments in subprojects are not known with
certainty before implementation starts. However, the project design indicates that all subprojects
will be initiated and implemented by the local communities therefore their sustainability will
expected to be high. Experience from similar operations also indicates that overall expected
benefits in terms of social uplift, institutional strengthening, and economic impacts on the
communities are likely to remain high. The project intends to focus on agriculture and its sub-
sectors including irrigation, livestock, income generating activities for the unemployed youth,
and would invest in rehabilitation as well as development of the local infrastructure. The type
and extent of exact interventions and investments will be known only after the start of project
implementation. Therefore, the economic analysis will be carried out for given subprojects as
part of the planning and approval process for selection of these subprojects.
202. The key indirect economic benefits are also expected to result from investments in
agricultural sector. These benefits may likely include: (i) increased operating efficiency at farm
level (through improvements to production and marketing process, logistics and market
institutions); (ii) extended value addition at farm and/or post-farm level with greater integration
between producers, traders and processors along the value chains; and (iii) increased market
access and reduction in economic losses due to inadequate storage capacity and for better
management. In addition, the planned activities (e.g. advisory services and training) may also
provide further indirect benefits in the form of stronger farmer/community groups able to
actively and profitably engage with the market, more market oriented and active agribusinesses
with stronger links to producers, as well as more structured planning for value chain
improvements at district and village levels.
203. Potential Subprojects for Social and Productive Infrastructure: The expected
demand for subprojects under the social and productive infrastructure complements may include
the following:
A. Social Infrastructure
a. School rehabilitation (rooms/boundary wall/ water and sanitation facilities)
b. Health facilitate rehabilitation (building repairs/sanitation facilities)
c. Village streets/lanes (rehabilitation and repairs)
d. Street lighting facilities
e. Village sanitation and solid waste management
75
B. Productive Infrastructure
a. Irrigation infrastructure (watercourses, tubewells, solar conversion of pumps, etc.)
b. Farm to market access roads and access bridges connecting to segments
c. Rain/flood water harvesting (e.g. spate irrigation, water storage tanks etc.)
d. Drip and sprinklers for small scale irrigation
e. Rehabilitation of livestock sheds and poultry farms
f. Community grain storage facilities
g. Community agro-processing facilities
h. Tunnel farming of high value crops
i. Livestock (including dairy and meat) management and processing
j. Purchase of agricultural machinery and farm tools22
204. The above list is only indicative as the demand for infrastructure will be generated
through community mobilization and decision making process. Therefore, while economic
analysis has not been carried out for the above mentioned infrastructure investments, there are
substantial social and economic benefits expected from these investments. Additionally, other
indirect and non-quantifiable benefits like generation of employment, start of multiple economic
activities and uplift of the society are also expected.
205. Subproject selection process: The selection of subprojects will take place at village
level. The subproject selection process will be driven by the priorities of the communities
involved in the project. The Economic Interest Groups (EIGs) will adopt a participatory process
to agree on the subproject proposed for financing through the Project. The EIGs will prepare a
Community Action Plan (CAP) with agreed/prioritized social, productive and asset building
subprojects. The selection of social and productive subprojects that include infrastructure
rehabilitation and/or development of new infrastructure will also include a detailed economic
analysis based on the specifications of the infrastructure being proposed. The economic benefits
expected from the proposed infrastructure schemes will carry specified weight for consideration
of the overall CAP at the time of review and approval by the District Review Committee (DRC).
Based on the detailed economic analysis provided for each infrastructure scheme proposed as
subproject, the DRC will conclude its decision regarding approval of the proposed subprojects.
206. The Operations Manual will include the formats and guidelines for carrying our
economic analysis for infrastructure schemes by the communities. The Project Management
Unit (PMU) will ensure that these guidelines and formats are made available to the EIGs at the
time they prepare their CAPs and are available in a form that is user friendly and easy to
comprehend by the communities. Additional technical support and training will be provided by
the Project staff to raise knowledge and understanding of the EIG members in using the
economic analysis guidelines and formats and adopt these for future proposals.
207. Overall Economic Analysis: Based on the data of specific types of infrastructure
schemes, the assessment of the Project’s economic rates of returns will be updated at the stage of
annual reviews and at mid-term.
22
It includes power tillers and processing equipment e.g. maize shellers, oil press, rice thresher, drying platforms, fruit
processing/packaging equipment, etc.
76
Annex 11: Documents in Project Files
PAKISTAN: KP Southern Area Development Project (KP-SADP)
WB and ADB, 2009, Damage and Needs Assessment (DNA)
2010 Post Crisis Needs Assessment Report (PCNA) – WB, ADB, EU, UN and Development
Partners
Country Partnership Strategy 2010-2013 – WB
Project Appraisal Document of the Community Infrastructure Project Phase II (CIP-II)
NWFP Economic Report (December 2005) – WB
Doing Business in Pakistan 2010 – WB
2010 KP, FATA and Balochistan MDTF – Administration Agreement
77
Annex 12: Statement of Loans and Credits
PAKISTAN: KP Southern Area Development Project (KP-SADP)
Original Amount in US$ Millions
Difference between
expected and actual
disbursements
Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d
P125999 2012 PK:Punjab Irrigated Agriculture Producti 0.00 250.00 0.00 0.00 0.00 248.21 0.00 0.00
P125958 2012 PK: Punjab Education Sector II 0.00 350.00 0.00 0.00 0.00 340.11 0.00 0.00
P115893 2012 PK:Tarbela 4th Extension Hydropower
Proj
400.00 440.00 0.00 0.00 0.00 831.50 0.00 0.00
P120589 2012 PK: Natural Gas Efficiency Project 100.00 100.00 0.00 0.00 0.00 199.85 0.00 0.00
P112902 2011 PK: Karachi Port Improvement Project 115.80 0.00 0.00 0.00 0.00 115.51 0.00 0.00
P118177 2011 PK: Skills Development Project 0.00 21.00 0.00 0.00 0.00 20.70 2.76 0.00
P118779 2011 PK: Tertiary Education Support Project 0.00 300.00 0.00 0.00 0.00 253.45 37.32 0.00
P096745 2011 PK: Punjab Barrages Improvement II Proj 145.60 0.00 0.00 0.00 0.00 119.52 -25.65 0.00
P125105 2011 PK: Flood Emegency Cash Transfer Project
0.00 125.00 0.00 0.00 0.00 51.24 12.32 0.00
P107300 2009 PK: Sindh Education Sctr Project (SEP) 0.00 350.00 0.00 0.00 0.00 35.12 -25.63 23.30
P105075 2009 PK: PPAF III 0.00 250.00 0.00 0.00 0.00 138.26 -74.72 0.00
P114508 2009 PK: 3rd Partnership for Polio Erad. 0.00 115.68 0.00 0.00 0.00 0.11 -44.68 0.00
P103160 2009 PK: Social Safety Net 0.00 210.00 0.00 0.00 0.00 160.02 0.50 0.00
P102608 2009 PK: Punjab Education Sector Project 0.00 400.00 0.00 0.00 0.00 44.01 -16.43 33.68
P101684 2009 PK:Second Trade & Transport Facilitation 0.00 25.00 0.00 0.00 0.00 22.37 12.27 0.00
P084302 2008 PK: Sindh Water Sector Improvement Proj
0.00 150.20 0.00 0.00 0.00 89.90 34.33 0.00
P089378 2008 PK: Balochistan SSIP 0.00 25.00 0.00 0.00 0.00 14.91 13.01 0.00
P095982 2008 PK:Electricity Distribution & Transmissi 173.60 83.10 0.00 0.00 0.00 160.30 161.06 -91.37
P110099 2008 PK: Water Sector Capacity Buidling Proj 0.00 38.00 0.00 0.00 0.00 17.29 7.49 10.13
P090501 2007 PK:Land Records Mgmt & Information
Syst.
0.00 45.65 0.00 0.00 0.00 33.37 31.19 0.00
P076872 2006 PK: PIFRA II 0.00 108.50 0.00 0.00 0.00 32.58 5.52 7.32
P083929 2006 PK:Punjab Municipal Services Improvement
50.00 0.00 0.00 0.00 0.00 10.17 10.17 6.50
P094086 2006 PK: Balochistan Educ Support Project 0.00 22.00 0.00 0.00 0.00 8.58 7.18 6.53
P078997 2004 PK: Sindh On-Farm Water Management Proj
0.00 111.14 0.00 0.00 4.12 34.13 -12.03 0.00
P010556 2004 PK: HIGHWAYS REHAB 215.00 280.00 0.00 0.00 0.00 56.94 -257.53 -92.53
Total: 1,200.00 3,800.27 0.00 0.00 4.12 3,038.15 -
121.55
- 96.44
78
PAKISTAN
STATEMENT OF IFC’s
Held and Disbursed Portfolio
In Millions of US Dollars
Committed Disbursed
IFC IFC
FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic.
Total portfolio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Approvals Pending Commitment
FY Approval Company Loan Equity Quasi Partic.
Total pending commitment: 0.00 0.00 0.00 0.00
79
Annex 13: Country at a Glance
PAKISTAN: KP Southern Area Development Project (KP-SADP)
80
81
Annex 14: Maps
PAKISTAN: KP Southern Area Development Project (KP-SADP)
Map No. PAK39649
