implementation completion and results report (icr)...

Document of

The World Bank FOR OFFICIAL USE ONLY

Report No: ICR00003804

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(IDA-46530)

ON A

CREDIT

IN THE AMOUNT OF SDR 96.60 MILLION US$150 MILLION EQUIVALENT

TO THE

REPUBLIC OF INDIA

FOR THE

IN ANDHRA PRADESH AND TELANGANA RURAL WATER SUPPLY AND SANITATION ( P101650 )

May 28, 2018

Water Global Practice

South Asia Region

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS

(Exchange Rate Effective, November 30, 2017)

Currency Unit = SDR

SDR 0. 706514 = US$1

US$1. 4154 = SDR 1

FISCAL YEAR

April 1 – March 31

Regional Vice President: Ethel Sennhauser (Acting)

Country Director: Junaid Kamal Ahmad

Senior Global Practice Director: Guang Zhe Chen

Practice Manager: Michael Haney

Task Team Leader(s): Raghava Neti

ICR Main Contributor: Miguel Vargas-Ramirez

ABBREVIATIONS

AP Andhra Pradesh

BPL Below Poverty Line

CAS Country Assistance Strategy

CBA cost-benefit analysis

CBO community-based organization

CPS Country Partnership Strategy

DALY disability-adjusted life years

DPR&RD Department of Panchayat Raj & Rural Development

DPSU District Project Support Unit

DWSC District Water and Sanitation Committee

DWSM District Water and Sanitation Mission

EIRR economic internal rate of return

EMF Environmental Management Framework

EMPs Environmental Management Plans

GoAP Government of Andhra Pradesh

GoI Government of India

GP Gram Panchayat, Village Council

GPWSC Gram Panchayat Water and Sanitation Committee

ICR Implementation Completion and Results Report

IEC information, education, and communication

IRR internal rate of return

IUFR Interim Unaudited Financial Report

lpcd liters per capita per day

M&E monitoring and evaluation

MTR Midterm Review

MVS multi-village scheme

MVWSC Multi-Village Water Supply Committee

NBA Nirmal Bharat Abhiyan, Total Sanitation Campaign

O&M operations and maintenance

ODF Open Defecation Free

PAD Project Appraisal Document

PDO Project Development Objective

PGM Participatory Ground Water Management

PIP Project Implementation Plan

PR&RD Panchayat Raj and Rural Development

PRED Panchayati Raj Engineering Department

PSU Project Support Unit

Rs Indian rupee

RWSS rural water supply and sanitation

SBM–G Swachh Bharat Mission – Gramin (Clean India Mission – Rural)

SCADA Supervisory Control and Data Acquisition

SDR special drawing rights

SPSU State Project Supports Unit

SVS single-village schemes

SWSM State Water and Sanitation Mission

VRP Village Resource Person

VWSC Village Water and Sanitation Committee

WSCs Water Supply Committees

WSS water supply and sanitation

WTP willingness to pay

ZP Zila Parishad, District Council

TABLE OF CONTENTS

DATA SHEET ........................................................................................................................... 1

I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 6

A. CONTEXT AT APPRAISAL .........................................................................................................6

B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) ..................................... 10

II. OUTCOME .................................................................................................................... 14

A. RELEVANCE OF PDO ........................................................................................................... 14

B. ACHIEVEMENT OF PDO (EFFICACY) ........................................................................................ 15

C. EFFICIENCY ........................................................................................................................... 20

D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 21

E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 21

III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 23

A. KEY FACTORS DURING PREPARATION ................................................................................... 23

B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 24

IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 25

A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 25

B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE.................................................. 28

C. BANK PERFORMANCE ........................................................................................................... 29

D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 31

V. LESSONS AND RECOMMENDATIONS ............................................................................. 32

ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 34

ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 49

ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 51

ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 52

ANNEX 5: BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 65

SUMMARY OF BORROWER’S END OF THE PROJECT REPORT ................................................. 65

ANNEX 6: SUMMARY OF STAKEHOLDER CONSULTATIONS .................................................... 71

ANNEX 7. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 73

ANNEX 8. INSTITUTIONAL QUALITATIVE ASSESSMENT ......................................................... 74

ANNEX 9. SUMMARY OF THE SUSTAINABILITY ASSESSMENT ................................................ 78

ANNEX 10. MAP .................................................................................................................. 79

The World Bank IN Andhra Pradesh and Telangana Rural Water Supply and Sanitation ( P101650 )

Page 1 of 79

DATA SHEET

BASIC INFORMATION

Product Information

Project ID Project Name

P101650 IN Andhra Pradesh and Telangana Rural Water Supply and

Sanitation

Country Financing Instrument

India Investment Project Financing

Original EA Category Revised EA Category

Partial Assessment (B) Partial Assessment (B)

Organizations

Borrower Implementing Agency

Department of Economic Affairs, Government of India

Rural Water Supply and Sanitation Department,

Government of Andhra Pradesh, Rural Water Supply and

Sanitation Department, Government of Telangana

Project Development Objective (PDO) Original PDO

To assist GoAP in improving rural water supply and sanitation services through progressive decentralization, communityparticipationand enhanced accountability. PDO as stated in the legal agreement

The objective of the Project is to assist the State of Andhra Pradesh improve its rural water and sanitation services, through the progressive decentralization of such services, increased community participation, and improved accountability.


Page 2 of 79

FINANCING

Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$)

World Bank Financing IDA-46530

150,000,000 125,034,608 112,547,853

Total 150,000,000 125,034,608 112,547,853

Non-World Bank Financing

Borrower 30,000,000 24,417,000 22,670,000

Total 30,000,000 24,417,000 22,670,000

Total Project Cost 180,000,000 149,451,608 135,217,853

KEY DATES

Approval Effectiveness MTR Review Original Closing Actual Closing

22-Sep-2009 23-Mar-2010 08-May-2013 30-Nov-2014 30-Nov-2017


Page 3 of 79

RESTRUCTURING AND/OR ADDITIONAL FINANCING

Date(s) Amount Disbursed (US$M) Key Revisions

26-Sep-2013 33.85 Change in Results Framework Change in Components and Cost Cancellation of Financing Change in Implementation Schedule

03-Dec-2014 55.09 Change in Results Framework Change in Loan Closing Date(s) Change in Implementation Schedule

12-Feb-2015 56.67 Change in Implementing Agency Change in Results Framework Change in Financing Plan Reallocation between Disbursement Categories Change in Institutional Arrangements Change in Financial Management Change in Implementation Schedule Other Change(s)

25-May-2016 73.94 Change in Loan Closing Date(s) Change in Implementation Schedule

23-Nov-2016 77.88 Change in Loan Closing Date(s)

25-May-2017 87.43 Change in Loan Closing Date(s)

KEY RATINGS

Outcome Bank Performance M&E Quality

Moderately Unsatisfactory Moderately Satisfactory Modest

RATINGS OF PROJECT PERFORMANCE IN ISRs

No. Date ISR Archived DO Rating IP Rating Actual

Disbursements (US$M)

01 24-May-2010 Satisfactory Satisfactory 15.48

02 11-Dec-2010 Satisfactory Satisfactory 15.48

03 25-Jun-2011 Satisfactory Satisfactory 15.48

04 14-Feb-2012 Satisfactory Moderately Satisfactory 15.48

05 11-Jun-2012 Satisfactory Moderately Unsatisfactory 15.77


Page 4 of 79

06 29-Dec-2012 Satisfactory Moderately Unsatisfactory 18.30

07 25-Jun-2013 Moderately Satisfactory Moderately Satisfactory 22.32

08 21-Dec-2013 Moderately Satisfactory Moderately Satisfactory 38.06

09 10-Mar-2014 Moderately

Unsatisfactory Moderately Unsatisfactory 48.16

10 17-Sep-2014 Moderately


11 05-Jan-2015 Moderately


12 23-Apr-2015 Moderately


13 05-Dec-2015 Moderately


14 17-Mar-2016 Moderately


15 12-Oct-2016 Moderately Satisfactory Moderately Satisfactory 77.71

16 09-Jun-2017 Moderately Satisfactory Moderately Satisfactory 87.92

SECTORS AND THEMES

Sectors

Major Sector/Sector (%)

Water, Sanitation and Waste Management 100

Sanitation 42

Water Supply 42

Public Administration - Water, Sanitation and Waste Management

16

Themes

Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Urban and Rural Development 100

Rural Development 100

Rural Infrastructure and service delivery 100


Page 5 of 79

ADM STAFF

Role At Approval At ICR

Regional Vice President: Isabel M. Guerrero Ethel Sennhauser

Country Director: N. Roberto Zagha Junaid Kamal Ahmad

Senior Global Practice Director: John Henry Stein Guang Zhe Chen

Practice Manager: Junaid Kamal Ahmad Michael Haney

Task Team Leader(s): Smita Misra Raghava Neti

ICR Contributing Author: Miguel Vargas-Ramirez


Page 6 of 79

I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES

A. CONTEXT AT APPRAISAL

Context 1. India has made great strides and significantly improved water supply and sanitation access in recent

decades. However, India still has the highest population of people who defecate in the open. The

Sustainable Development Goals on water and sanitation will not be achieved if there is not significant

progress in expanding both access to and the quality of services in the India, particularly in rural areas,

where the participation of communities and a decentralized approach are key to ensuring scheme

sustainability, thus preventing any slippage in access and services.

2. These key sector issues in the rural water supply and sanitation (RWSS) sector were identified during

project preparation, which highlighted aspects of low coverage and sustainability. In 2008, only 46 percent

of rural villages were considered fully covered, defined as having access to 40 liters per capita per day

(lpcd) in a radius of 1.6 kilometers from the village center at 100-meter elevation. In addition, 40 percent

of habitations were partially covered, and 13 percent were either not covered or did not have access to a

safe water source. Inadequate operations and maintenance (O&M) of rural systems also meant that

access did not guarantee coverage, with about 20 percent of schemes not being fully operational and

requiring rehabilitation, resulting in slippages from the fully covered to the partially covered and not

covered categories. In terms of sanitation, figures at appraisal indicated that 80 percent of the rural

households defecated in the open, and 30 percent of households used latrines, this overlap is due to some

households both having latrines but still defecation in the open.

3. About a decade before the project started, in 1999, the Government of India (GoI) embarked on a

transformation of the RWSS sector, including reforms to support demand-based approaches. The

Swajaldhara Guidelines, followed by the National Rural Drinking Water Program, provided the basis for

RWSS sector reform, including community participation in the planning, implementation, and O&M of

schemes. The role of the government was to be transformed from “service provider” to “facilitator,” in

alignment with the 73rd Constitutional Amendment of 1993 for the devolution of decision-making powers

to the three-tier government (Panchayati Raj Institutions at the district level, Mandal [or Block] at the

subdistrict level, and Gram Panchayat [Village Council, GP] at the village level). The project was designed

after similar interventions in RWSS in the states of Karnakata, Uttar Pradesh, Kerala, Uttarakhand,

Maharashtra, and Punjab, all having varying administrative setups and devolution status. This project was

one of several projects intended to transform the institutional setup of the state for provision of RWSS

services.

4. From the institutional side, in the Government of Andhra Pradesh (GoAP), the Panchayat Raj Engineering

Department (PRED), under the umbrella of the Panchayat Raj and Rural Development Department

(PR&RD), had overall responsibility for planning, designing, and implementing both single-village schemes

(SVSs) and multi-village schemes (MVSs), along with other rural engineering works like roads, buildings,

and other structures. But, before appraisal, the state carved out a separate RWSS Department from the

PRED to exclusively focus on rural water supply and sanitation coverage. The RWSS Department was also

established under the overall umbrella of PR&RD. The PRED continued its focus on other rural


Page 7 of 79

infrastructure besides water. The GoAP also had a vision and commitment to devolve funds, functions,

and functionaries to the district level (Zila Parishad [ZP]) (figure 1).

Figure 1. Institutional Arrangements for RWSS under the Project

Note: DWSM = District Water and Sanitation Mission; GPWSC = Gram Panchayat Water and Sanitation Committee; MVS = multi-village scheme; PD = Project Director; PSU = Project Support Unit; RWSSD= Rural Water Supply and Sanitation Department; SVS = single-village scheme; WSCs = Water Supply Committees; ZP = Zila Parishad.

5. Two demand-driven programs in the sector also marked the context in Andhra Pradesh (AP) during

preparation—the Swajaldhara Program (for water supply), and the Total Sanitation Campaign (for

sanitation). Both programs advocated decentralization of functions to Panchayati Raj Institutions, under

the oversight of the District Water and Sanitation Mission, which in turn were supported by the State

Water and Sanitation Mission and active community participation through capital cost sharing (about 10

percent of capital costs for water projects and about 30 to 50 percent of the costs of toilets) and water

user charges/tariffs for O&M of water supply schemes. Successful piloting of these approaches led the

GoAP to commit to scaling up these principles and approaches statewide.


Page 8 of 79

Theory of Change (Results Chain) 6. The theory of change (summarized in table 1), is clearly laid out in the Project Appraisal Document (PAD),

and is based on expanding RWSS services along the three axes spelled out in the Project Development

Objective (PDO): (a) the decentralization of responsibilities for provision of water services, (b) the

improvement of community participation, and (c) improved accountability. The theory of change assumes

that these three elements are key for the scheme’s sustainability. Decentralization results in the

assumption of more responsibilities by local institutions (both district-mandal levels) and the GP level.

Greater responsibilities in planning, implementation, and O&M would allow better alignment of technical

designs with the community’s needs. When local governments and communities operate and manage their

systems, there is a greater sense of ownership, and thus, greater willingness to mobilize when there are

system failures. When communities’ voices are part of the design and implementation phases, they will

have the ability and responsibility to fix minor system failures, resulting in greater sustainability of the

systems.

Table 1. Theory of Change

Activities Outputs/Outcomes PDO/Outcomes Long-Term Outcomes Assumptions Building of institutional capacity for implementing, managing, and sustaining the project activities, along with sector development studies to inform policy decisions.

(a) Increasing the number of people with access to improved water supply services, (b) increasing the number of people with access to piped water supply throughout the year, (c) increasing the number of people adopting improved hygiene and sanitation practices, and (d) improvements in cost recovery (contributions to capital and O&M cost) and collection efficiency.

To assist the GoAP in improving rural water supply and sanitation services through progressive decentralization, community participation, and improved accountability.

• MDG targets in water, gender equality, and reduction of disease and child mortality.

CAS Goals

• Increasing the effectiveness of service delivery

• Ensuring development is sustainable

• Strengthening capacity for publicly provided services

• Enhancing private sector participation.

Decentralization, accountability, and community participation result in higher sustainability of services. State willing to embrace decentralization approach. Larger percentage of O&M costs collected from users will increase sustainability.

Support investments for improving water supply and sanitation services in the project habitations, including construction of new infrastructure or rehabilitation and augmentation of existing schemes, with safe disposal of wastewater experience.

Note: CAS = Country Assistance Strategy; MDG = Millennium Development Goal.

Project Development Objectives (PDOs) 7. The PDO as stated in the legal agreement which was used for purposes of this evaluation was, “to assist

the State of Andhra Pradesh improve its rural water and sanitation services, through the progressive

decentralization of such services, increased community participation, and improved accountability.”

8. The PDO was not changed during project implementation.


Page 9 of 79

Key Expected Outcomes and Outcome Indicators 9. The project’s key expected outcomes, as stated in the PDO, focused on improving RWSS services. The

means of achieving these outcomes, as stated in the Theory of Change (table 1), was through progressive decentralization, community participation, and improved accountability. Although financial sustainability was mentioned as a key component of the Theory of Change and had one associated PDO indicator, it was not explicitly included in the PDO. On similar lines, improved accountability did not have specific indicators associated to it.

10. Progress on these objectives was to be monitored through the following original outcome indicators: (a) PO1. People/household (number) in project areas with access to/use of improved water sources; (b) PO2. People/household (number) in project areas with access to/use of improved water supply services; (c) PO3. People/household (number) in project areas with access to/use of adequate piped water supply services throughout the year; (d) PO4. People/household (number) in project areas adopting improved hygiene and sanitation practices; and (e) PO5. Improvements in cost recovery (percent): (i) contribution to capital costs, (ii) contribution to O&M costs, and (iii) collection efficiency.

Components

11. The project had four components.

Component 1: Capacity and Sector Development (estimated allocation, US$12 million; actual allocation, US$2.70 million – US$1.82 in Telangana1 and US$0.88 in Andhra Pradesh)

12. This component was subdivided into four parts: (a) Capacity Building; (b) an Information, Education, and Communications (IEC) program; (c) Sector Development Studies; and (d) District Excellence Awards. Capacity Building included training at the state and district levels in sector policy and planning; and general training activities for PRI on scheme design, , procurement, and financial and health and hygiene aspects, as well as training to GPs/committees on O&M aspects. Additional change management training was envisaged to shift from the traditional supply-driven mode to demand-driven community participatory issues. The IEC Program included the development of a Communication Strategy, the development of manuals and handbooks at the district level, and specific IEC to promote behavioral changes in hygiene, such as the empowerment of Panchayati Raj Institutions to undertake their new role. Sector Development Studies included broad topics of the RWSS Sector Program and Policies, Cost-Effectiveness and Sustainability Analysis, Appropriate Technologies for RWSS Schemes, Institutional Models for Service Provision, Groundwater Management by Rural Communities, and Independent Assessments and Project Reviews. District Excellence Awards, the last subcomponent, was aimed at providing incentives to GPs by providing awards for the top 10 GPs in each district, based on the construction schemes with no cost overruns.

Component 2: RWSS Infrastructure Development (estimated allocation, US$153.5 million; actual allocation, US$113.2 million – US$73.45 in Telangana and US$39.75 in Andhra Pradesh

13. This component included investments required to improve RWSS services and was divided into three subcomponents: (a) new investments in SVSs, MVSs, source strengthening, and piloting new technologies; (b) rehabilitation and augmentation of existing schemes for SVSs, MVSs, and catchment areas; and (c)

1 Andhra Pradesh State was divided into Telangana State and Andhra Pradesh. More details to follow at the Context section.


Page 10 of 79

sanitation and hygiene promotion, including support to governmental Total Sanitation Campaigns, hygiene promotion, and incentives for achieving “open defecation free status” and infrastructure investments for latrines, soak pits, drainage and underground drainage, and solid waste management.

Component 3: Project Implementation Support allocation, US$14.5 million; actual allocation, US$7.90 million – US$5.26 in Telangana and US$2.64 in Andhra Pradesh)

14. Activities under this component facilitated project implementation through the financing of Staffing and Consultancy costs of the State Project Supports Units; Equipment and Miscellaneous Costs; Monitoring, Evaluation (including a Computerized Sector Information System, and M&E System for monitoring the achievement of the RWSS and the Project, including the type and costs of the schemes, service levels, water quality, O&M cost recovery, and collection efficiency), and Impact Analysis, Governance and Accountability Studies, Engineering Support, and Community Support.

B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE)

Revised PDOs and Outcome Targets 15. The PDO was not changed during project implementation to include the Government of Telangana,

despite the division of the Andhra Pradesh State into the Telangana State and the new Andhra Pradesh State in June 2014. At the time of state division, the term “Government of Andhra Pradesh” in the PDO was handled in the legal documents to include its successor states. For this Implementation Completion and Results (ICR) Report, it is understood that the PDO is to be taken as, “to assist the State of Andhra Pradesh improve its rural water and sanitation services, through the progressive decentralization of such services, increased community participation, and improved accountability”. In addition, the later cessation of construction of individual latrines in 2015 and the limiting of the sanitation intervention of promotion campaigns did not result in an associated change to the PDO.

Revised PDO Indicators 16. The PDO indicators were changed twice during the life of the project. The first restructuring at Midterm

Review in September 2013 looked at better aligning the PDO indicators with Core Sector Indicators of the Bank, and at better measuring sanitation outcomes. The indicator PDO1. People/household (number) in project areas with access to/use of improved water supply services, was modified to a Core Sector Indicator capturing similar information. PDO2. People/household (number) in project areas with access to/use of adequate piped water supply services throughout the year, was dropped, as all the schemes built under the project were piped water schemes. PDO3. People/household (number) in project areas adopting improved hygiene and sanitation practices was also replaced with a Core Sector Indicator (People trained to improve hygiene behavior/sanitation practices under the project) and moved as Intermediate Results (IR) Indicator. Sanitation access, which was there as an Intermediate Results Indicator, was moved to the PDO level as Improved latrines constructed under the project. Table 2 presents a summary of the restructuring changes in the Project.

17. The September 2013 restructuring also introduced significant changes to the Intermediate Results Indicators. Two indicators related to decentralization were dropped: (a) percent SVSs constructed in participation with GPs compared to the total target, and (b) percent MVSs constructed in participation with ZPs, and percent MVSs managed by ZPs, compared to the total target. The third set of indicators


Page 11 of 79

that included both, percent of participating GPs meeting the full O&M costs through user charges, and percent participating GPs contributing to O&M costs through user charges, was dropped because a similar revised indicator was there as a PDO indicator. A new indicator, “number of schemes constructed by the community themselves,” was introduced to measure community’s direct involvement, which was piloted later in the project. At the same time, two indicators related to environmental sustainability of the schemes were introduced: (a) number of recharge structures built to strengthen the sources, and (b) number of soak pits constructed under the project to dispose of the sullage.

18. Following the state division and in response to the Bank’s corporate requirement, the second restructuring on February 2015 split the overall targets between the two states, and introduced a new PDO indicator, “People provided with access to improved sanitation facilities – rural.” In practice, these two indicators measured the same reality, since all the interventions are done in rural areas. Also, under this restructuring, part of the PDO indicator, “% of contribution to capital cost” as part of the indicator PO5. Improvements in cost recovery, was dropped, to align with the prevailing conditions in the state-funded programs.

Revised Components 19. No formal revision review of the components took place during project implementation.

Other Changes

20. Other changes aimed at simplification included the elimination of specific subcomponents (as defined in the PAD), definitions, and some intermediate indicators. The September 2013 restructuring was the most comprehensive and included (a) removal of activities related to “safe wastewater disposal and solid waste management,” and (b) changing the “creation of awareness and demand for health, hygiene, and sanitation” for the Nirmal Bharat Abhiyan instead of the original Total Sanitation Campaign. This restructuring also cancelled SDR 16.40 million (approximately US$25 million) from the loan proceeds.

21. Also under the September 2013 restructuring, many intermediate indicators were changed. Five were seen as no longer relevant and were dropped, and two additional ones related to GP or ZP participation were seen as redundant and were dropped. Two other intermediate indicators were reformulated and elevated as PDO indicators, and an additional nine other Intermediate Results Indicators were reworded to better reflect the revised scope at Midterm Review. One additional new indicator was included to measure community participation in the construction of the schemes. However, neither the PDO nor components were changed, creating a disconnect between the PDO and the new indicators. A further restructuring in February 2015 eliminated some of these three intermediate indicators associated with Component 3, namely (a) field-based periodic reviews undertaken by Project Support Units and District Project Support Units, (b) baseline data collected for project villages and midterm and end-term evaluations (project performance evaluation) conducted by independent agencies, and (c) External Audit of Environmental Performance of the project conducted.


Page 12 of 79

22. The February 2015 restructuring was undertaken to reflect the division of Andhra Pradesh into the states of (a smaller territory but using the same name of) Andhra Pradesh and Telangana. See map in Annex 10. This separation included division of the Project and targets between the two states, revision of some of the indicators, and clarification of the implementation arrangements.

Table 2. Summary of Restructuring Changes

DATE OF RESTRUCTURING 26-Sep-

13 3-Dec-

14 12-Feb-

15 25-May-

16 23-Nov-

16 25-May-

17

Change in Results Framework x x x

Change in Components and Cost x

Cancellation of Financing x

Change in Implementation Schedule x x x x Change in Loan Closing Date(s) x x x x

Change in Implementing Agency x

Change in Financing Plan x

Reallocation among Disbursement Categories x

Change in Institutional Arrangements x

Change in Financial Management x

23. Significant policy changes at the national and state level related to sanitation took effect after the 2014 national election. A renewed emphasis on achieving a clean India through the Swachh Bharat Mission resulted in higher national subsidies for latrine construction, and thus reduced states’ desire to finance sanitation investments on their own. This had a direct impact on the use of resources from this project on the initial intended construction of individual latrines. The evolution of water and sanitation national and state policies is depicted in figures 2 and 3.

Figure 2. Evolution of National and State Rural Sanitation Policies, 1999 Onwards


Page 13 of 79

Note: Nirmal Bharat Abhiyan (NBA) = Clean India Campaign (TSC); Nirmal Gram Puraskar = Minister of State; ODF = Open Defecation Free; Swachh Bharat Mission – Gramin = Ministry of Drinking Water and Sanitation.

Figure 3. Evolution of Rural Water Policies, 1972 Onwards

Rationale for Changes and their Implications for the Original Theory of Change 24. The modification in September 2013 regarding the change from the national Total Sanitation Campaign

to the Nirmal Bharat Abhiyan (which again changed to in 2014 Swachh Bharat Mission – Grameen [SBM–G] with much more funding available to states and with the vision of making India Open Defecation Free [ODF] by October 2019) indicates a preference for the project to better align with the national sanitation initiatives. Also, the national strategy for rural drinking water (2012–2022) influenced several technical changes in the design of the SVS and MVS schemes, with an enhanced focus on household connections and improved service delivery, rather than mere coverage.

25. The change of indicators in September 2013 indicates a shift from the previous emphasis on decentralization and accountability toward access outputs, reducing the strength of the theory of change proposed in the PAD but adapting to changing circumstances. The state officials during agitations and before and after bifurcation focused on reconstituting the government and public administration, thus limiting the appetite for changing to decentralized implementation methodologies for provision of RWSS services as envisaged in the original project design. The lack of these indictors after the Midterm Review as proxies for decentralization limited the available information and analysis of this aspect.

26. The other changes associated with the modification of intermediate indicators are an effort to better

reflect project activities and did not have implications for the original Theory of Change.

27. The changes in the Implementation Schedule and Loan Closing Date were introduced in consideration of the difficulties associated with the bifurcation of the state and the long period of political instability that preceded it, and to improve the sustainability arrangements, particularly for the MVS schemes, in order to finalize O&M contracts and ensure that institutional responsibilities were in place.


Page 14 of 79

II. OUTCOME

A. RELEVANCE OF PDO

Assessment of Relevance of PDO and Rating 28. The PDO remains very relevant. Investment in rural water supply and sanitation services remains

relevant, as evidenced in the preeminence of RWSS investments in both the Country Assistance Strategy (CAS) 2009–2013, and the Country Partnership Strategy (CPS) 2013–2017.

29. Under the CAS 2009–2013, RWSS investments fell under Pillar III – Increasing Effectiveness of Service Delivery. Successive World Bank country strategies in India have included service delivery, focusing primarily on human development sectors and water supply and sanitation. Furthermore, this project was an important piece of the strategy in which the World Bank helped to develop an approach to delivering rural water that is now being scaled up through state and central programs.

30. Under the CPS 2013–2017 Development Challenges, Platform for Growth, Spatial Transformation and

Human Potential, RWSS is part of Engagement Area 2: Transformation. The government recognized the need for an equally strong focus on agricultural and rural development. Under this CPS, the strengthening implementation of major centrally sponsored schemes, which cover everything from rural employment and social security to the rural sanitation and water supply, is central to the government’s rural development strategy. In addition, the relevance under this CPS to decentralization is explicit, since it aimed at supporting the decentralization of programs and policies under ongoing RWSS projects.

31. Rural sanitation investments have also gained relevance with the launching of the Swachh Bharat Mission

in 2014, which has emphasized achieving open defecation free status and has affected this project’s targets. Regarding decentralization, the bifurcation of Andhra Pradesh into two states reflects a devolution of more responsibilities to local levels. Also, the subdivision of 9 districts in Telengana into 31 shows a greater political demand for decentralized services. The adoption of the 14th Finance Commission recommendations, leading to transfer of higher level of finances to the Gram Panchayat (Village Council) institutions, is also evidence of the current relevance of decentralization in India (box 1).

Box 1. Devolution Grants as per 14th Finance Commission

The central government and the states of India have adopted the recommendations of the 14th Finance Commission (for 2015–19), which were being implemented starting 1 April 2015. As recommended, the share of the states in the net proceeds of the shareable central taxes was enhanced from 10 to 42 percent. Similarly, the devolution grants to GPs and Urban Local Bodies was also enhanced substantially. However, the existing devolution grants to ZPs were eliminated. In both Andhra Pradesh and Telangana, the GPs were allowed to use part of the grants for water supply and sanitation services. While this helped the GPs bridge the expenditure gaps for O&M of the in-village water supply, the ZPs (asset owners of the MVS schemes) were left with no money to manage the O&M of the MVS schemes. After an initial adjustment period, both states developed mechanisms to provide grants from other sources to ZPs for O&M of MVS schemes.


Page 15 of 79

32. With the alignment of the PDOs to the principal areas of engagement of the CAS 2009–2013 and the CPS

2013–2017, as well as its relevance India-related policies, the relevance of the PDO is rated as High.

B. ACHIEVEMENT OF PDO (EFFICACY)

Assessment of Achievement of Each Objective/Outcome 33. The PDO is to be measured for the results achieved on improvement of both water and sanitation access

and services. The progression in decentralization, accountability, and community participation is also assessed and considered to be a factor in determining the efficacy ratings, as per the Theory of Change. During the earlier restructuring after the Midterm Review (MTR), a few PDO indicators were changed/refined, that is, bringing sanitation access to the PDO level, retaining one indicator for water access, simplifying the indicator for cost recovery for O&M, and considering the latter as the only measure of decentralization, accountability, and community participation. This was done in an effort to adapt to changing circumstances and the counterpart’s reduced interest in providing rural water services in a decentralized manner as originally envisaged. At the time of the restructuring with the new indicators in September 2013, less than 20 percent of loan proceeds had been disbursed. Given that the PDO indicators did not change significantly during the life of the project, it is not required to conduct a split PDO evaluation.

34. One additional factor is considered for the efficacy discussion. The rationale for Bank involvement in RWSS in Andhra Pradesh as initially envisioned at Appraisal stems from three principles of supporting the state(s) in (a) decentralization, (b) scaling up the demand response approach, and (c) building on the previous experience of the three former RWSS projects (thus, building the case and evidence to demonstrate gains on sustainability by decentralization and a demand-responsive approach). Since there is limited evidence that these three principles were followed as intended during the project, the question of efficacy remains given that the project concentrated on achieving mere physical results, without fully achieving the intended changes in policy and implementation established in the Theory of Change.

35. Prior to bifurcation, around MTR, the Government of Andhra Pradesh seemed interested in enacting the

decentralized service approach discussed at appraisal, as evidenced by enactment of government Order No. 4 in January 2013, which specifically mandated that implementation of a Sector-Wide Approach be expanded from the six districts of project implementation to the rest of the districts in the state. Of note is that Order No. 4 cites the five aide-mémoire issued between December 2011 and December 2012. Therefore, the PDO was not changed. However, it seems the Borrower, after bifurcation, had limited uptake of the proposed policies, but this did not trigger a change in the PDO.

36. In addition, the lack of specific sectoral studies seems to support the conclusion that implementation focused primarily on the attainment of the physical outputs, given the emerging circumstances such as complexities of the state being bifurcated, new governments and institutions being formed, and the newly formed State of Andhra Pradesh (a smaller territory with more limited financial resources) struggling to mobilize funds, all of which influenced the project’s capacity to continue with the original objectives of decentralization, scaling up of a demand-responsive approach, enhancing accountability


Page 16 of 79

and community participation.

37. In regard to the outputs for access, the PDO indicator on water service delivery—“Number of people in rural areas provided with access to improved water sources under the project”: 1,984,814 people were reached, exceeding the modified target of 1,890,000 by 105 percent. See map in Annex 10 for geographic distribution of results.

38. Regarding sanitation access, measured as the number of latrines built and people having access to toilets,

79 percent of the indicator was achieved. This result is partial because it was decided in September 2013 to restructure Bank funds for sanitation to be used only to provide support for manpower (mandal and District Resource Persons); information, education, and communication campaigns; and capacity-building expenses, whereas investment support came from the government program of Nirmal Bharat (the predecessor program of Swachh Bharat Mission – Gramin). Consequently, due to attribution factors, it was not possible to count the number of latrines built under these missions as accomplishments of this project, as was reported in the latest Implementation Status and Results.

39. Two sustainability assessments in both states performed between October 2016 and June 2017 provided insights on the service aspect for the SVS systems built. In post-bifurcation Andhra Pradesh, a 10 percent sample revealed that all the schemes performed at the 55 lpcd level; the SVSs, with just a few exceptions, performed system chlorination and elevated tank cleaning; and more than 70 percent achieved satisfactory delivery in terms of quantity, quality, and reliability. In terms of consumer satisfaction, more than 74 percent reported being highly satisfied, and reported almost 21 percent being partially satisfied. In Telangana, a similar 10 percent sample revealed that in all districts except one, there was an improvement of level of service (from stand post to house connections), and all districts reported water appropriate for drinking in all seasons. Similarly, very high marks were obtained in key service parameters such as sufficient water to meet demand (87 percent), delivering water as required at 55 lpcd (85 percent), equal pressure for all households (80 percent), schemes being chlorinated regularly (93 percent), and a sustainable source even in the peak season (78 percent).

40. Only the sustainability report from Telangana provided information on sanitation. While over 88 percent

of the districts reported having toilets in the houses connected to a drainage system, 12 percent of districts reported open defecation. At the end of the project, 528 out of 1,607 (32.8 percent) of GPs were reported to have reached ODF status.

41. Community participation, decentralization, and accountability aspects central to the Theory of Change

were measured through two PDO indicators—contribution to O&M costs, and collection efficiency. A third indicator that was part of the PDO indicators at appraisal related to percentage of capital contributions by communities was dropped in September 2013, to reflect the prevailing government policies in the state. The creation of Village Water and Sanitation Committees at the GP level is a sign of decentralization, but no PDO indicator to measure this was included in the PAD or the restructurings. Only a few of the PAD indicators were measured systematically during the life of the project, mostly those related to access, and through an Excel-based system. There is no systematic collection of the project indicators related to decentralization, accountability, and O&M collections/tariffs, given the shortcomings of the M&E systems, the lack of a clearly agreed definition of indicators, and the fact that the RWSS Department did not seek or have regular access to GP information of O&M resources collected


Page 17 of 79

due to competing priorities of Panchayat Raj and Rural Development (PR&RD) in Telangana and Andhra Pradesh.

42. The estimation of the indicator for contribution to O&M presented different challenges. The RWSS Department does not have administrative control over the GPs and hence does not track user fee collection aspects of RWSS schemes. Thus, the number reported for both states is a one-time, sample-based indicator. For Andhra Pradesh, the indicator is estimated2 at 80 percent, above the project target of 70 percent. For Telangana, a different approach3 resulted in an indicator of 85 percent, also above the target. Although, the shared intention at appraisal intended that some GPs would achieve full recovery of O&M costs via tariffs, the MTR restructuring—when including the new indicators—was explicit in denoting that contributions to O&M costs were to come from community contributions and government subsidies (based on prevailing government policies), denoting the tension between the original agreed decentralized approach for service delivery at appraisal and the prevailing position of state officials during implementation.

43. Similarly, the data for the average collection efficiency indicator were not collected in a systematic manner. The collection efficiency for this report was calculated using two methodologies. The first one is calculated comparing the overall revenue requirement to the actual revenue per household. Thus, this indicator is at 80 percent, considering that people pay tariffs only when they have a household connection and that the people accessing standpipes do not pay. The second methodology is based on the amount of tax collected by the Department of Panchayat Raj & Rural Development (PR&RD). Under this approach, the indicator for Andhra Pradesh is 81 percent for FY2016/17 and 94.5 percent for FY2017/18. The indicator is 72 percent for Telangana for financial year 2017–18 (up to 6 March 2018). The corresponding data for AP were not available. Given that it is difficult to establish any correlation between project activities and the indicator (even when collected from other sources), and that the indicator was not regularly monitored by State Project Supports Units to inform the project, the assessment of this indicator is Moderately Unsatisfactory.

44. To complete the efficacy analysis, the elements of the Theory of Change, that is, Progressive Decentralization, District-wide Program and Planning, Community Participation, Improved Accountability, Improved Financial Sustainability, and the Integrated Water Supply and Sanitation Program, are assessed qualitatively, comparing the design at Appraisal with the actions taken during the Project and presented in Annex 8. A summary of this assessment, centered around the key central aspects in the PDO, is presented in table 3.

Table 3. Key Aspects in the Theory of Change as Stated in the PDO

At Appraisal Qualitative Assessment

DECENTRALIZATION

New SVS

GPWSC to participate in planning, designing, and implementation

Limited to implementation in SVS M

Women inclusion/self-help groups Women participation mandated by state policy H

2 Based on the sum of all money collected from the users, as well as the resources resulting from the 14th Finance Commission transferred directly to the GPs. This figure is compared to an average cost of O&M calculated by the RWSS Department at the time of system handover. 3 A sample of 13 SVSs and MVSs showed a mode contribution (water tariff) per household of Rs 30, compared to an estimated cost of O&M of Rs 35.


Page 18 of 79

GP to set tariff for O&M GPs set a fixed tariff for O&M H

New MVS

RWSSD to support DWSC to form MVS-WSCs with participating GPs

RWSSD with Zila Parishad supported the creation of MVS-WSC

S

DMWS sign-off to RWSSD on MVS planning, design, and implementation.

District Collector, part of DMWS sings off on design and cost

M

O&M of MVS responsibility of MVS-WSCs O&M of MVS in charge of Zila Parishad N

Single Design-Build-Operate contract for MVS Not implemented N

MVS commercial orientation through Project Implementation Plan and others

All MVS schemes are under O&M contracts, signed by Zila Parishads

S

Existing SVS and MVS

DMWS to support rehab under common program and policies

World Bank financing has a particular set of rules within the DMWS

N

OVERALL Rating for Decentralization M

COMMUNITY PARTICIPATION

Community participation at all stages of the scheme cycle

Participation was limited in the planning and construction cycle

M

Self-Help Groups to help in reaching out to the communities

Self-Help Groups have played an important role within GPWSC

H

OVERALL Rating for COMMUNITY PARTICIPATION S

IMPROVED ACCOUNTABILITY

Clear separation of Governance and Operational Aspects

RWSSD maintains governance and operational aspects

N

SWSM responsible for overall RWSS policy formulation and budget allocation

n.a.

DWSM responsible for RWSS program and policies implemented by DWSC

DWSM responsible for implementing program and policies

H

RWSSD to enter into a service contract agreement with DWSC for technical support

No contract agreements were undertaken between RWSSD and DWSC

N

O&M service performance criteria agreed and monitored for all schemes

No O&M service performance criteria were agreed N

Robust and transparent procurement and financial with technical and social audits

Bank’s procurement and financial processes used Social audits were taken twice in the project life

H

RWSSD divisions responsible for the technical quality of the district

RWSSD maintained responsibility for technical quality

H

SPSU to carry out independent quality checks and beneficiary assessments

SPSU carried out two independent quality checks and two beneficiary assessments

H

OVERALL Rating for IMPROVED ACCOUNTABILITY M

OVERALL Rating for Decentralization, Community Participation, and Improved Accountability M

Note: Ratings: H= High; M= Moderate; N= Negligible; S= Substantive.; DWSM = District Water and Sanitation Mission; GPWSC = Gram Panchayat Water and Sanitation Committee; RWSSD = Rural Water Supply and Sanitation Department; SPSU = State Project Supports Unit; SWSM = State Water and Sanitation Mission. n.a. = not applicable.

45. The sustainability assessments included information on community participation that seems to

support the Substantial rating in table 4. In Andhra Pradesh, the report reveals almost 20 percent of the districts conduct regular community consultation, and 67 percent consultation “as and when required.” In the Telangana report, the GPWSC meets regularly (86 percent of the districts), addresses issues on time (96 percent), and has regular follow-up for any breakdown (96 percent).

46. A qualitative analysis of the components and subcomponents indicates high achievement for selected subcomponents such as capacity building, and information, education, and communication campaigns, as well as staffing, equipment, and community and engineering support. However, there


Page 19 of 79

are serious shortcomings in the monitoring, evaluation, and impact analysis subcomponent, and in sector development studies (for which there was no interest appetite or capacity on the part of the states to handle), with no products developed under the latter subcomponent, except for an O&M study of Mission Bagheerata, an all-state MVS encompassing scheme in Telangana aimed at reducing water shortages and expanding services across all GPs.

47. A qualitative review of the Swajaldhara principles (as explained in Box 2) embedded in the Sector-Wide Approach (meaning the same policies regardless of source of financing) adopted by the state to undertake this project, which was based on the limited evidence collected during the last Implementation Support Mission and available documents, shows that some steps required to achieve decentralization and community participation were followed, with support of a government order for the PR&RD, but not consistently. However, some of the key steps, such as community contributions, were diluted under the central government policies in the subsequent versions of Swajaldhara program, like the National Rural Drinking Water Programme, and states were given freedom to decide whether to mandate community contributions. Several states, including AP and Telangana, do not have a statewide policy for community contributions, which also impacted this element in the project under review as target communities questioned why they should pay a contribution while others were not doing so. All efforts were made by the project to strengthen the village committees to own the schemes and take responsibility for O&M and service delivery. Therefore, the Theory of Change, to achieve the results as conceived at the time of the design, was only partially followed.

Justification of Overall Efficacy Rating 48. The project fully achieved its objectives for the water supply part of the PDO, and partly achieved

the sanitation objectives of the PDO, with modest achievement on the decentralization, community participation, and improved accountability objective. Given the equal weighting on the water (substantial) and the sanitation (modest) side, as well as the services and institutional outcomes on decentralization, community participation, and accountability, the overall efficacy of the project is rated as Modest.

Box 2. Swajaldhara Program Principles The Government of India launched the nationwide Swajaldhara program, aimed at decentralizing the management of the RWSS sector across the state in 2002, building on lessons drawn from an earlier pilot program (the Sector Reforms Program) implemented in about 72 districts across the nation. The Swajaldhara program advocated three main decentralization principles: (a) community participation at all stages, (b) community contribution for capital expenditure (either as a percent of the scheme cost or a fixed household contribution), and (c) ownership and O&M of the systems by village committees. The project tried to implement these principles, with varying success. Community participation was attempted but was weak during the initial stages. The state government decided that all project communities should contribute about Rs 500 per household for general households and Rs 250 per household for below poverty line families. Of the expected Rs 85.20 million, about Rs 48.59 million (57 percent) was collected. While this was initially a results indicator, it was dropped because there were no statewide policy community contributions, resulting in administrative and social issues in mobilizing the contributions. Almost all schemes were successfully handed over to the Village Water and Sanitation Committees (VWSCs)/Multi-Village Water and Sanitation Committees (MVWSCs) for O&M, and for training and other inputs. The VWSCs for all SVS schemes are well established and trained. The MVWSCs are still in the infancy stage and depend on the state for bulk operations grants, as per prevailing polices.


Page 20 of 79

C. EFFICIENCY

49. An economic analysis was carried out to evaluate economic value of the investments implemented under

the Project. The evaluation was conducted independently for Andhra Pradesh and Telangana States to account for the 2014 bifurcation and creation of Telangana State, as well as for the Project overall. The economic internal rate of return (EIRR) for the Project in Telangana and Andhra Pradesh was 40.9 percent and 34.3 percent, respectively, and 38.0 percent for the Project as a whole. These EIRRs are above the World Bank recommended minimum EIRR for economically viable Projects of 12 percent. These results are conservative estimates of the benefits to the local populations, as they do not capture all benefits created by the Project interventions. Annex 4 provides further detail on the methodology used and a comparison of the results of the evaluation at completion to the evaluation at appraisal, and Annex 4 table A4.2 maps all Project intervention and benefits, including those that are not captured in the EIRR.

50. The EIRR at Project completion, as estimated based on the appraisal stage assumptions and methodology, is higher than the return estimated at appraisal of 21 percent. This is due in large part to changes in the Project scope during implementation that concentrated financing on water supply interventions, which at appraisal and completion were estimated to have a higher EIRR than sanitation. Other factors that affected the overall efficiency rating of the Project included that (a) the overall EIRR for all key areas of intervention in both states indicate that Project expenditures delivered results in excess of the opportunity cost of capital; (b) significant savings in exchange rate coupled with savings on water supply contracts allowed for expanding the scope of the piped water connections; and (c) the introduction of the Swachh Bharat Mission resulted in a large decrease in the scope of the sanitation interventions, as more of those responsibilities were taken on by the government outside of the scope of the Project.

51. Administrative and operational efficiency. Both exogenous and endogenous factors impacted the administrative and operational efficiency of the Project. Over the course of implementation, the Project closing date was extended through four restructurings for a total of three years. These extensions stemmed from political, and largely exogenous, factors, as well as technical considerations. The political factors are related to the 2014 bifurcation of Andhra Pradesh and creation of the state of Telangana, and the subsequent need to incorporate the new institutional structure in Telangana and reorganize the structures in Andhra Pradesh. More endogenous to the Project, additional time was also required to revise village-level water supply planning studies, which had initially not contemplated adequate coverage levels, to improve the equitable distribution of services among beneficiaries (this has subsequently been reflected in the Lessons Learned section of this ICR). It is expected that by the end of the disbursement period on 31 May 2018, all the available funds will be used, including through the reallocation of resources from Andhra Pradesh to Telangana.

Assessment of Efficiency and Rating

52. Based on the high EIRRs in both states and the savings accrued that compensated for both the reduced scope on sanitation and project delays, the efficiency rating for the project is rated Substantial.


Page 21 of 79

D. JUSTIFICATION OF OVERALL OUTCOME RATING

53. Based on a High rating for relevance, a Modest rating for efficacy, and the Substantial rating for efficiency, the project is rated Moderately Unsatisfactory.

E. OTHER OUTCOMES AND IMPACTS (IF ANY)

Gender 54. The PAD emphasized the participation of women’s self-help groups in supporting the mobilization of the

communities. The stakeholder consultations and field visits during the ICR mission attested to the impact on the satisfaction of the women’s self-help groups. There is also an official policy to encourage the participation of women in the Water and Sanitation Committee in the Gram Panchayats. About one-third of the Village Water and Sanitation Committee and GP members are women, as per states’ policies. The project teams monitored the composition of committees and stipulated women’s participation in the committees.

Institutional Strengthening

55. One of the project objectives was to strengthen decentralized institutions (Pachayati Raj Institutions) at

the district, mandal (block), and Gram Panchayat levels. As such, project resources were dedicated to training local officials to undertake their new roles and responsibilities. While there is an extensive record of training provided in both states, there is not a quantitative assessment of its efficacy or impact on the institutional change. Project officials and PRI members (from districts/mandals and GPs) during the stakeholder consultation events attested to the transformational way of doing business that the project instilled, where communities’ concerns were more seriously weighted during project design and implementation. Besides the decentralized institutions, the RWSS Department learned better ways of designing both SVS and MVS schemes in a holistic manner, including providing household connections, adopting advanced technologies like solar power systems, Supervisory Control and Data Acquisition (SCADA), and web-based monitoring systems. RWSS Departments have reiterated that this new capacity is also being applied to other projects. Even though RWSS Departments fell short on implementing the decentralization and community participation principles in the Theory of Change, their enhanced technical capacity can be viewed as a good contribution to the strengthening of institutional capacity of the sector.

Mobilizing Private Sector Financing 56. Although the project engaged the private sector in the operation and maintenance of MVS under a

contract with the state (particularly in Telangana State), there is limited private sector financing for the project. Given the important reliance on transfers rather than tariffs, and the affordability issues, among others, there are limited opportunities in general for private financing of RWSS in India.


Page 22 of 79

Poverty Reduction and Shared Prosperity

57. By bringing water supply and sanitation services to previously unconnected households and communities, the project contributed to sharing prosperity and reducing multidimensional poverty. Finally, the reduction in time spent on water collection that resulted from the water supply interventions under the project disproportionately benefits women and girls, who largely bear the burden of water collection.

Other Unintended Outcomes and Impacts 58. One of the most notable positive outcomes is the pioneering of new technologies for rural water supply.

In both states, the project supported the testing and implementation of providing SCADA for MVS, construction of groundwater recharge structures in selected districts, installation of flow control valves to ensure equal distribution of water, and solar-powered MVS. With respect to water supply, while the project initially aimed to provide household tap connections to only about 50 of the poorest households in each village, subsequent discussions and push resulted in covering about 260,000 households (about 50 percent of total covered population) with tap connections, compared to a target of 42,000, impacting lives of women positively. There are also noteworthy improvements in level of service provision and improved collection of O&M user charges. However, counterfactual evidence about the increased level of service impact on collection is not available. About 927 villages (47 percent of total covered villages) have 100 percent household tap connections.


Page 23 of 79

III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME

A. KEY FACTORS DURING PREPARATION

59. The preparation of the project was very thorough. It built on the experience of earlier projects in Uttarakhand, Karnakata, Kerala, and Maharashtra States based on a decentralized approach and the longstanding World Bank support to RWSS projects in South Asia. The design was anchored in a deep understanding of the institutional setup at the local level, including the Panchayati Raj Institutions.

60. The design agreed at appraisal was used for expanding RWSS coverage in a sustainable manner using the building blocks of decentralization, community participation, and improved accountability. Instruments and tools were prepared in advance in the comprehensive Project Implementation Plan (PIP) (63 Annexures) to conduct the independent audits, the decentralized data collection, the approach for implementation of the Total Sanitation Campaign, the model agreements for contracts among the different PRI institutions, and the step-by-step guidelines for implementation of the SVSs and MVSs, among many others.

61. The baseline for assessing costs was comprehensive and allowed for undertaking a careful estimation of resources required for each of the components, as well as the required economic analysis. However, the fact that physical outputs were mostly achieved even with a cancellation of US$25 million, indicates that there was an overestimation of resources required for the project.

62. The rationale for Bank involvement in financing this project as a contributor to a large-scale, decade-

long transformational agenda of providing a decentralized approach was laid out clearly and included (a) assisting the GoAP in building capacity and pursuing its own goal of increasing decentralized service delivery systems in the RWSS sector; (b) scaling up the demand-responsive approach with policy principles that are consistent with the GoI’s Swajaldhara reform program and the National Rural Drinking Water Program; and (c) building on the experience accumulated in designing and implementing RWSS projects supported by the Bank in India (Kerala, Karnataka, Maharashtra, Uttarakhand, and Punjab) and other parts of the world.

63. Risks and key institutional issues identified to be addressed for implementation of the required

decentralized approach were clearly stated in the PAD, namely the conflicting roles of governance and execution, links with water & sanitation missions, centralized decision making in approval and sanction of schemes, limited involvement of community, and awareness and capacity building. However, in retrospect, as stated earlier, the PR&RD departments could have been given a more active role in project implementation, in order to materialize the proposed decentralization, complementing the heavy technical bias of the RWSS Department.


Page 24 of 79

B. KEY FACTORS DURING IMPLEMENTATION

64. The main factor affecting implementation delays was the setting up of the Project Support Units and

payment systems at the beginning of the project. The delay in the appointment of the project director and in setting up an alternate payment mechanism for goods and services (because construction works are usually paid by the Pays and Accounts Office system), meant an initial delay of about 12 months. Lack of full staffing at the district level reported in the aide-mémoire up to September 2013 was also a crucial factor delaying speed of implementation. A decision to recruit dedicated staff with competitive remuneration to undertake project responsibilities at the district level solved this issue.

65. The delay for political reasons in calling for elections scheduled for local governments prior to and after bifurcation impacted the quality of community and local government participation during a critical project period, because the methodology for implemented the decentralized service delivery approach agreed at Appraisal depended so heavily on consultation, endorsement, and participation of local government.

66. The actual bifurcation of the state into Telangana and Andhra Pradesh was also disruptive for project

implementation. The agitations prior to the bifurcation in 2013, particularly in Telangana, resulted in serious delays in reaching the communities for design and construction due to road blockages, absenteeism from work, and general strikes in the state public administration. The reorganization and transferring of staff at the implementation units from Hyderabad (which became the capital of Telangana) to Vijayawada (the new interim capital of Andhra Pradesh) after official bifurcation on 2 June 2014, resulted in a need to retrain staff and adapt to the new working conditions, affecting mostly the Andhra Pradesh implementation unit. However, since three project districts were in each of the two new states, the separation of funds and targets was straightforward and, under the allocation formula, Andhra Pradesh received 45 percent of the funds and Telangana 55 percent.

67. The concurrence of national sanitation programs, first the Total Sanitation Campaign, to the Nirmal Bharat Abhiyan (NBA) and its successor the Swachh Bharat Mission – Gramin (SBM–G), meant competing policies for individual household latrine financing. The Total Sanitation Campaign, which was operative from 2009 until 2011–2012, contributed Rs 5,500 per household for construction of individual household latrines, after which the NBA increased this contribution to Rs 10,000, and finally the SBM–

G program increased it again to Rs 15,000 in Andhra Pradesh and Rs 12,000 in Telangana. With the launch of SBM–G in 2014, in order to adjust to the dynamic financing policies thus far, and to avoid the difficulty of tracking of contributions from the state and the project, the Bank team agreed to let the financing for construction of toilets come from government programs, and only support soft activities through the project.

68. While SVS construction was well known and managed by both states’ RWSS agencies, the design and implementation of MVSs, especially the extension schemes (23 out of the total 46 MVSs), posed technical challenges to the project. Extension schemes used the bulk infrastructure built previously, and extended water supply to more habitations; this is different from the simple augmentation schemes for SVSs. During the construction of extension infrastructure, several gaps in the original bulk infrastructure (like pumping machinery, treatment plants, and main pipelines) came to light, and they were to be


Page 25 of 79

addressed to ensure sufficient water quantity to the original habitations and to the new ones, under the project. This took additional time, financial resources, and technical and managerial efforts. In comparison, in a new MVS, all the bulk and retail infrastructure was new, with none of the uncertainty associated with existing schemes. Since MVSs are designed for a group of habitations that do not have local groundwater in sufficient quantity, surface water has to be brought in from long distances. However, the hydrogeological conditions to justify economically larger investment from distant surface sources was justified in only about half of the cases using the Hyderabad Institute Report hydrogeological study. This resulted in MVSs—which required larger capital investments—producing three to four times more costs per capita. In addition, the lack of a comprehensive design for the MVS resulted in changes in the original design through many variation orders and the issuing of contract amendments that delayed the completion of the works.

IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME

A. QUALITY OF MONITORING AND EVALUATION (M&E)

M&E Design 69. The project design agreed at appraisal was specific about the Project’s intention to finance an M&E

mechanism that was not based on infrastructure creation but rather on the provision of services. Five elements made up the M&E system described in the PAD: (a) a specific M&E system was to be established for the Bank-funded project to gather the baseline data, the project inputs, outputs, and outcomes for monitoring implementation, and to generate the indicator values required by the World Bank systems; (b) periodic reviews based on field experience, including independent technical and financial audits for randomly selected schemes; (c) social audits and beneficiary assessments to be undertaken by NGOs and the community-based organization (CBO) to ensure adherence to project guidelines and participatory assessments of service delivery improvements; (d) sustainability monitoring and evaluation based on specially designed indicators; and (e) sector information systems to consolidate data at the state level to monitor overall progress and link up with the Indian Department of Water Supply, Monitory Information System (table 4).

70. The design envisioned in the PAD appropriately covered project objectives, and some instruments for data field collection at the district and Gram Pachayat level were included in the Project Implementation Plan.

M&E Implementation 71. Of the five elements, four were partially implemented (see table 4), including the social audits and

sustainability assessment. Three sustainability assessments took place during the life of the project, one close to the Midterm Review and the other two toward the end of the project. In addition, third-party audits by consultants, as well as internal financial and technical audits performed by the quality control branch of each of the RWSS Departments, shed light on the implementation of the project. District peer-to-peer reviews proved to be an innovative methodology for learning and raising awareness about project


Page 26 of 79

implementation.

Table 4. The Five Proposed PAD M&E Elements

PAD/Project Implementation Plan Achieved

(a) A specific M&E system was to be established for the Bank-funded project, to gather the project baseline; project inputs, outputs, and outcomes for monitoring implementation; and to generate the indicators required by the World Bank systems.

A series of 6 Excel sheets allowed district officials to collect information to be compiled at the state level and generate some indicators for the Results Framework.

(b) Periodic reviews based on field experience, including independent technical and financial audits for randomly selected schemes.

Information was reviewed every month. The RWSS Department’s independent Quality Control wing undertook audits of all schemes. In addition, independent quality audits were also conducted through consultants.

(c) Social audits and beneficiary assessments to be undertaken by NGOs and the CBO to ensure adherence to project guidelines and participatory assessments of service delivery improvements.

Social audits of all the SVSs and in-village schemes (under MVSs) were carried out by District Project Support Unit staff during the traditional handover (Atmarpan) process. NGOs/CBOs were not hired due to contracting processes and capacity of local NGOs. The traditional Atmarpan process involved explaining the project details to GP/Village Water and Sanitation Committee members and other community representatives; inspecting, along with them, the quality and functionality of the infrastructure built; addressing concerns, including about O&M costs; and announcing the handover in a general assembly. Thereafter, the GP passed a resolution formally taking over the scheme and agreed to take care of O&M. A set of drawings, technical details, and O&M calculations were also handed over to each committee. This social audit differs significantly from other World Bank RWSS projects, where social audit committees are set up before project implementation and have a voice and influence before and during construction.

(d) Sustainability monitoring and evaluation based on specially designed indicators.

Two sustainability assessments, covering about 20 percent of SVSs were undertaken in Telangana in October 2016 and June 2017, and one evaluation covering 10% of schemes was undertaken in AP in April 2017. These evaluations were carried out by established consultant firms, hired through a competitive selection process.

(e) Sector information systems to consolidate data at the state level to monitor overall RWSS program progress and link up with the Indian Department of

No such sector information systems were developed under the project. Watersoft systems existing in both states prior to the project do not receive systematic


Page 27 of 79

Water Supply, MIS (Management Information System).

information from the Project. However, project information is being integrated manually with the Mission Bagheeratha information system.

M&E Utilization 72. Project indicators had to be computed manually for the series of Implementation Status and Results. The

baselines for key indicators were never computed in some cases, and at project closing, some methodological questions remain on how those indicators related to improvement in cost recovery are calculated. PDO indicator methodology was also still being debated during the last implementation support mission, reflecting a lack of closure on the definitions for the indicators that would have been addressed if an M&E system were implemented. However, project progress was well monitored through the internal Excel-based monitoring systems developed by the State Project Supports Unit. The number of projects, progress, contracting status, and costs and expenditure, and coverage were well monitored and helped in making several decisions on effective spending, prioritizing investments, and reaching additional people, as the pace of implementation increased.

73. The sustainability assessments also provided useful information on service levels, community participation, and consumer satisfaction. However, since they were completed within six months of project closing, there were limited opportunities to implement the reports’ recommendations.

74. Other data collection efforts were undertaken by State Project Supports Units (SPSUs) and include collection

of regular data on physical and financial progress, gathering of service delivery information, technical audits, regular field visits by SPSU teams, environmental audits, water quality monitoring, district-to-district reviews, exit checklists before scheme completion, and gathering of service delivery data through SCADA and web-based monitoring. These technical inputs were useful to the technical departments to address particular issues on project implementation.

Justification of Overall Rating of Quality of M&E 75. The rating is modest, based on (a) the lack of implementation and utilization of the M&E elements, particularly

for the M&E system for the World Bank Project Monitoring and the Sector Information System; and (b) the absence of instruments to measure the decentralized approach proposed in the Theory of Change. While the Excel-based project monitoring provided a good basis to monitor project implementation, and the social audits and the periodic scheme reviews have been well implemented, they have not been integrated with the state’s overall M&E systems.


Page 28 of 79

B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE

76. Environment. The environmental safeguard policies triggered during project preparation were OP/BP 4.01

(Environmental Assessment) and OP/BP 4.36 (Forests).

77. OP/BP 4.01 (Environmental Assessment): An Environmental Management Framework (EMF) was developed during project preparation that included a screening and appraisal process for the water supply schemes (a simplified environmental assessment instead of a full-fledged Environmental Impact Assessment), institutional arrangements, and plans for capacity building and monitoring. Environmental screening and assessment were undertaken for all schemes. The mitigation measures implemented included source protection works, disinfection, clearing of construction waste, construction of compound walls for storage reservoirs, and testing of backwash water for compliance with regulatory norms. Drying up of bore well sources of SVSs emerged as a significant issue during the drought years during the project (2015–16). However, project action on groundwater recharge was limited. Implementation of mitigation actions was monitored through an internal peer-review-based supervision process and an external audit. Source sustainability was monitored throughout project duration, and more than 98 percent of the sources were reported to have adequate yield. Regular water quality monitoring was undertaken in both states, and more than 98 percent of the schemes comply with the prescribed water quality standards.

78. OP/BP 4.36 (Forests): No schemes in the project involved forestland. The screening process helped in identifying schemes involving forestland. The initial design of the Motlaguda MVS required forestland for laying of a power line, but this was later changed to on-site solar power generation that did not involve any forestland. Another scheme, the Manthani MVS, involved forestland at the source/headworks, but this was subsequently shifted out of the project to the government’s Water Grid program.

79. A good practice that emerged in the project was the internal environmental supervision process. This

involved district teams visiting a sample of schemes in other districts to review implementation of environmental management aspects and recommend improvements. This process helped in peer learning and in monitoring compliance. A key learning is that when technical staff are also responsible for environmental safeguards, mainstreaming mitigation measures into the technical aspects is smoother. The overall project environment safeguard performance was rated Moderately Satisfactory.

80. Social impacts and implementation. A Resettlement Policy Framework, a Tribal Development Plan, and a

Social Assessment Report were prepared in the project preparation stage. The social safeguards implementation under the project was generally satisfactory, with no issues related to land acquisition or implementation of the Tribal Development Plan.

81. Fiduciary. The project’s overall financial management system is rated as Moderately Satisfactory. An integrated project management system was maintained for accounting, financial reporting, and disbursement purposes throughout implementation. However, due to staff turnover and inadequate data entry, not all the required financial reports were provided on time for some reporting periods. The required audit reports with unqualified audit opinions have been submitted to the World Bank. General financial management issues included slow implementation, lack of counterpart funds during the early stages of the project, and contract payments. The noncompliance issues have been rectified by SPSUs, as requested. Issues related to counterpart funding have been addressed through project restructuring. The financial


Page 29 of 79

audits were done by the Central Ministry – Comptroller and Auditor General of India, for any government loans. Audits were submitted on time before nine months after the close of the fiscal year every March.

82. The Financial Management counterpart was efficient and proactive in responding to queries, and the District Project Support Unit was properly staffed with one accountant and one financial manager for each State Project Support Unit in Telangana and Andhra Pradesh.

83. Procurement. The overall project procurement performance was rated as Moderately Satisfactory. The procurement process of the project has generally complied with World Bank procurement rules and procedures, even though minor deviations were identified and rectified during the project implementation period, such as delayed payments due to internal management inefficiency and other contract management-related issues. The project implementation agencies, that is, the PMUs at the state level, demonstrated a reasonable capacity for conducting the project procurement activities in a satisfactory manner, including procurement planning and the bidding process. However, better planning and timely payments could have avoided the contract management issues, including delayed completion of contracts. Continuous staff rotation meant proactive support by the PMU and the Bank team often supporting the capacity building of district officials. Also, the lack of appropriate cost estimates and deficient District Resource Person for MVSs resulted in multiple amendments and extensions to ongoing contracts.

C. BANK PERFORMANCE

Quality at Entry

84. The World Bank teams incorporated relevant lessons from previous RWSS projects in the design of the project and ensured that the objectives were fully aligned with the issues highlighted in strategic documents, namely the 2009–13 CPS, as well as state policies such as the District Water & Sanitation Missions, the Swajaldhara Program, and the Total Sanitation Campaigns. The Project’s design was also flexible to allow the incorporation and piloting of upcoming technologies and management systems. The World Bank ensured that a team of specialists was mobilized to address all relevant project aspects, including technical aspects, social and environmental specialists, and M&E. Particular emphasis was devoted to the planning of the social mobilization required for the creation of water and sanitation committees within the GPs, and to train GPs on issues of importance regarding financial contributions and O&M arrangements.

85. The perceived risks of states not following the decentralized approach was mitigated by production of a detailed Project Implementation Plan that detailed the tools and instruments to be applied by the districts on monitoring and following up project implementation according to the theory of change.

Quality of Supervision

86. The World Bank team provided timely advice to counterparts to address implementation issues on contract execution. Advice from the World Bank team focused on the delivery of SVSs and MVSs to ensure functionality in a participatory manner. Further, the team’s advice was focused on overcoming delays and inconsistencies, and expediting administrative steps to keep up with the implementation schedule. However, the Bank team could have further adjusted to reflect the fact that the Swachh Bharat mission was


Page 30 of 79

substituting the project for latrine construction.

87. The World Bank provided ongoing implementation support on fiduciary and safeguard issues during project implementation. It provided advice to counterparts on satisfactory implementation of the Resettlement Policy Framework and compliance with World Bank policies on procurement and financial management (see section B). Project ratings in the Implementation Status and Results Reports were candid. The aide-mémoire described the issues encountered in sufficient detail, and recommendations to address issues were agreed upon with the implementing agencies. Urgent issues were promptly brought to the attention of management.

88. The World Bank further conducted regular supervision missions with frequent field visits to construction sites, forest areas, and other project areas to ensure that effective mechanisms for quality control and compliance with World Bank requirements were in place. The project changed Task Team Leaders only once, ensuring consistency and continuity of the project’s approach. The World Bank’s multidisciplinary teams, many of whom stayed for the entire project (with skills in financial management, procurement, institutional development, economics, project evaluation, and just-in-time technical expertise) reviewed all relevant documents before, during, and after the supervision missions.

89. The state and district training, as well as the study tour to other states in India (Karnataka and Maharashtra), and to Brazil, provided opportunities to the Bank to inform policies regarding service provision, particularly for the O&M of MVSs. The Bank assisted both clients in organizing two O&M workshops, in each state, to discuss O&M issues, and recommended a set of policy directions to both the states.

90. The World Bank conducted a Midterm Review in May 2013, followed by a restructuring in September 2013, which identified the adjustments needed for the project to achieve its objectives. The World Bank also responded quickly after the bifurcation took place in June 2014, with a restructuring that allocated resources and responsibilities in December 2014.

91. During implementation, the task team had to make difficult trade-off decisions between adhering to the proposed Theory of Change that was in line with similar RWSS interventions in other states, and which was perceived as the added value of the Bank but not owned by the state, OR focusing their energies on producing the physical deliverables in the face of very adverse circumstances on the ground that were related to delayed SPSU formation, trouble-shooting payment procedures, staff recruitment, and bifurcation of the state.

Justification of Overall Rating of Bank Performance

92. Based on the quality of the World Bank’s performance at entry and at supervision, the missed opportunities on the restructuring to adjust the PDO and indicators to take into account the reduced sanitation component (that is, not financing toilets), and the reduced appetite to redress the client’s limited uptake for institutional reform and sectoral studies, the overall rating of the World Bank’s performance is Moderately Satisfactory.


Page 31 of 79

D. RISK TO DEVELOPMENT OUTCOME

93. The Theory of Change called for decentralization, community participation, and improved accountability

to increase the sustainability of the RWSS schemes. These elements, difficult to ascertain from the limited M&E system, calls for a sustainability that is now measured on the assessment of the likelihood that recurrent O&M costs are covered. Resources from the water tax (which represented a percentage of the house or property tax), as well as national transfers from the 14th Finance Commissions, complements the water fee collected from users. This approach is the traditional business as usual, and the weakness of the model relies on the fact that (a) there is no connection between actual costs and collection for services; (b) water users are removed from the decision on how much to finance water services; (c) there is a general account at the GP level without separate line items for water supply and sanitation (WSS) services, which does not allow proper monitoring of water expenditures; and (d) discretionary decisions at the GP level to invest on other sectors outside WSS while faced with limited resource transfer means the WSS O&M expenditure may be compromised. In addition, the quality of record keeping (asset registers, repairs registers, ring-fenced accounts, complaint redress records, and so forth) is poor and does not allow for systemic understanding of the quality of service delivery, except for the surveys undertaken as part of the sustainability assessment.

94. Thus, the snapshot information provided by the sustainability assessments shows a positive trend from the 10 percent sample of the recently built systems. The methodology for the assessment used a 100-point system based on technical (40), financial (30), institutional (20), and social aspects (10). In Andhra Pradesh, 16.4 percent of the district systems ranked 90 or above (sustainable, delivering services as expected), and 64.2 percent ranked 75 to 90 (sustainable with community action). In Telangana, 16 percent of the district systems ranked 90 or above, and 69 percent ranked 75 to 90.

95. The Zila Parishads (ZPs) are the asset owners of MVSs, and their O&M is the responsibility of the ZPs. While ZPs were eligible for grants under 13th Finance Commission grants (2010–2015), they have been removed under 14th Finance Commission grants (2015–2020). Neither state has a policy for charging for bulk water, and the entire cost was borne by ZPs through finance commission grants. As the grants stopped in 2015, the states started making ad-hoc arrangements to address this new challenge. This could hinder the O&M of MVSs in the near term, until a robust solution is applied. On the positive side, both states created state-level centralized SPVs to manage their bulk water supply, and these institutions are being equipped with staff, systems, and finances. This could resolve the risks in O&M of MVSs in the near future.

96. Another dimension to be considered in the Risk to Development outcome is the management and technical capacity of the SPSU. On the positive side, transfer of SPSU experienced personnel to the RWSS Department, and permanence of staff at the district level familiar with the project approach, can be considered an asset in terms of human capital for the states. However, project implementation, particularity at the GP level, was too heavily invested in consultants, particularly for M&E; information, education, and communication; and social and capacity building. This means that the added value brought by the project by introducing greater community participation will no longer be with the RWSS Department after project closure.


Page 32 of 79

V. LESSONS AND RECOMMENDATIONS

97. Water resources analysis is a key component for RWSS services planning and sustainability. Both SVSs and

MVSs showed how dependent the sustainability of continuous supply is on a proper source assessment. This should be an integral part of the pre-feasibility studies. Deciding on providing services to habitations by MVSs rather than SVSs should also come with a watershed holistic approach that justifies economically extending the transmission pipes for large distances to surface water, and ensuring the proper hydro-geological expertise at public institutions and design consulting firms. Better understanding of available water resources is required to scale-up investment in RWSS access.

98. Shifting service delivery to a decentralized system requires careful consideration of the political economy of service provision. Bank support was critical in assisting the states in managing the investment program for access expansion. However, a parallel type of intervention/influencing may have been required to change the entrenched way of providing service delivery in a centralized approach. Bank teams need to establish careful tradeoffs that balance the need to disburse proceeds with providing value to the client in terms of policy reform.

99. Scaling up RWSS requires considering a territorial approach. The current state policy is to fully cover only some habitations in a GP and some households in a habitation. As the states are moving to invest in scaling up RWSS, careful consideration and analysis is required to determine whether the optimal way is to attempt full coverage of the habitations in the GP or the current approach to cover more GPs but fewer habitations per GP. Such analysis should consider economic, water resource, political, and equity factors, among others. Also, quality of service delivery at the household level rather than capacity of the RWSS systems in liters per capita is a better indicator for investment planning and assessment of the subsector.

100. Connecting 100 percent of households to water sources seems to increase sustainability and payment for services; however, further evidence is needed. Although a rigorous quantitative analysis would be required, different sources of information, including field visits, stakeholder consultations, including GPs, counterpart officials, and Bank team testimony, agree that collection rates increase as people feel more inclined to pay their monthly water contributions for a higher level of service (from stand post to household connection), which they own and control, and for which they could be certain about the amount of water consumed. Since household connections appear to increase residents’ inclination to pay water contributions, and if this is confirmed by further research, this critical aspect could be an input into public policy to enhance systems’ sustainability.

101. Delivery of water allows the community and the GP to move on to sanitation (a prerequisite of open defecation free status). Collective efforts from both the community and the GP focus on obtaining reliable access to water. Once this is achieved, communal efforts have shifted to achieving open defecation free status. Users have also reported that it is easier to maintain latrines once water is available to keep them clean. These two factors, combined with the fact that water is used for cleaning after defecation, seems to support the hypothesis of higher latrine use once water access is guaranteed. Further research on this will contribute greatly to policy design.

102. Enacting sector reform requires institutional transformation. Projects need to focus on designing institutions that have both the technical and social skills needed to advance the decentralization agenda,


Page 33 of 79

and on putting in place incentives for effective functioning of such structures. Creating a department with technical staff within a PIU with a weak mandate and limited structures and skills to enact change will be neither effective nor sustainable..


Page 34 of 79

ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS

A. RESULTS INDICATORS A.1 PDO Indicators

Objective/Outcome: To assist GoAP in improving rural water supply and sanitation services

Indicator Name Unit of Measure Baseline Original Target Formally Revised

Target

Actual Achieved at Completion

Number of people in rural areas provided with access to Improved Water Sources under the project

Number 0.00 2150000.00 1890000.00 2101309.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

Andhra Pradesh Number 0.00 967500.00 860000.00 1413803.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

Telangana Number 0.00 1182500.00 1030000.00 1209288.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

Comments (achievements against targets): There is no "original target' value for Andhra Pradesh and Telangana, since at appraisal no bifurcation had taken place. A theoretical allocation between the State was calculated following the 45% Andhra Pradesh, 55% Telangana distribution. Final results: 111% achievement, 164% in Andhra Pradesh and 117$ in Telangana.


Page 35 of 79


Target


Improved latrines constructed under the project

Number 0.00 12000.00 12000.00 9362.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

Comments (achievements against targets): Final Results : 78% Achievement , 105% in Andhra Pradesh, 63% in Telangana,


Target


People provided with access to improved sanitation services

Number 0.00 60000.00 60000.00 41899.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

People provided with access to “improved sanitation facilities”- rural

Number 0.00 60000.00 60000.00 41899.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

Andhra Pradesh - people Number 0.00 21250.00 21250.00 22255.00


Page 36 of 79

provided with access to "improved sanitation facilities"

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

Telangana - People provided with access to "improved sanitation facilities"

Number 0.00 38750.00 38750.00 19644.00

31-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

Comments (achievements against targets): Final Results : 70% Achievement, 70% in Improved Sanitation Facilities, 105% in Andhra Pradesh, 51% in Telangana.

Objective/Outcome: progressive decentralization of [rural water and sanitation services], increased community participation,


Target


Improvement in cost recovery (%): (i) average contribution to O&M cost; and (ii) average collection efficiency

Text 0.00 (i) 50% of households contribute to O&M Cost, (ii)50% of collection efficiency

(i) 70% of O&M cost recovery(iii) 70% average collection efficiency

(i)69%(ii)74,5%

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

Andhra Pradesh - (i) Contribution to O&M Cost

Percentage 0.00 50.00 70.00 80.00

23-Mar-2010 30-Nov-2014 30-Nov-2017

Andhra Pradesh - (ii) collection efficiency

Percentage 0.00 50.00 70.00 80.00

23-Mar-2010 30-Nov-2014 30-Nov-2017


Page 37 of 79

Telangana - (i) contribution to O&M cost

Percentage 0.00 50.00 70.00 60.00

23-Mar-2010 30-Nov-2014 30-Nov-2017

Telangana - (ii) collection efficiency

Percentage 0.00 50.00 70.00 70.00

23-Mar-2010 30-Nov-2014 30-Nov-2017

Comments (achievements against targets): The interpretation of the contribution to O&M changed after the 2016 Restructuring to mean the total of resources collected from households as compared to the theoretical cost of monthly O&M costs, rather than the original indicator that captured the % of households contributing to O&M costs.

A.2 Intermediate Results Indicators

Component: Component 1: Capacity and Sector Development


Target


Number of persons trained through capacity building programs

Number 0.00 0.00 75000.00 165275.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


Page 38 of 79

Comments (achievements against targets): Final Results : 220% Achievement, 269% in Andhra Pradesh, 170% in Telangana.


Target


People trained to improve hygiene behavior/sanitation practices under the proj

Number 0.00 0.00 200000.00 316206.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

People trained to improve hygiene behavior/sanitation practices - female

Number 0.00 0.00 120000.00 171510.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

Comments (achievements against targets): Final Results : 158% Achievement, 143% in People trained to improve hygiene behavior/sanitation practices - female.

Component: Component 2: RWSS Infrastructure Development


Target


Direct project beneficiaries Number 0.00 2150000.00 1890000.00 2101309.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

Female beneficiaries Percentage 0.00 0.00 40.00 46.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

Comments (achievements against targets): Final Results : 111% Achievement


Page 39 of 79


Target


Number of other water service providers that the project is supporting

Number 0.00 0.00 1521.00 1378.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017



Target


Number of Water Supply Schemes constructed by the community themselves

Number 0.00 0.00 150.00 1431.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


Page 40 of 79



Target


New piped household water connections that are resulting from the project intervention

Number 0.00 0.00 42000.00 268077.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

Comments (achievements against targets): Final Results : 638% Achievement, 751% in Andhra Pradesh, 540% in Telangana


Target


% of schemes constructed yielding required quantity and quality of water: (i) SVS, (ii) MVS

Percentage 0.00 0.00 80.00 93.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

Andhra Pradesh Percentage 0.00 0.00 80.00 96.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


Page 41 of 79

Telangana Percentage 0.00 0.00 80.00 90.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017



Target


Number of recharge structures built to strengthen the sources

Number 0.00 0.00 250.00 141.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017



Target


Number of soakpits constructed under the project to dispose off the sullage

Number 0.00 0.00 12700.00 8371.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


Page 42 of 79


23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

Comments (achievements against targets): Final Results : 66% Achievement, 100% in Andhra Pradesh, 46% in Telangana


Target


% of constructed schemes which have carried out quality checks, audits, evaluations

Percentage 0.00 0.00 100.00 100.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017

(i) Independent Construction Supervision quality checks

Percentage 0.00 0.00 100.00 100.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 30-Nov-2017


23-Mar-2010 30-Nov-2017

(ii) Community Monitoring Percentage 0.00 0.00 100.00 100.00


Page 43 of 79

and Social Audits 23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 30-Nov-2017


23-Mar-2010 30-Nov-2017

(iii) Sustainability Evaluations

Percentage 0.00 0.00 50.00 56.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 30-Nov-2017


23-Mar-2010 30-Nov-2017


Component: Component 3: Project Implementation Support


Target


% of constructed schemes which have carried out quality checks, audits, evaluations

Percentage 0.00 0.00 100.00 100.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


Page 44 of 79

(i) Independent Construction Supervision quality checks

Percentage 0.00 0.00 100.00 100.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 30-Nov-2017


23-Mar-2010 30-Nov-2017

(ii) Community Monitoring and Social Audits

Percentage 0.00 0.00 100.00 100.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 30-Nov-2017


23-Mar-2010 30-Nov-2017

(iii) Sustainability Evaluations

Percentage 0.00 0.00 50.00 56.00

23-Mar-2010 23-Mar-2010 30-Nov-2014 30-Nov-2017


23-Mar-2010 30-Nov-2017



Page 45 of 79

23-Mar-2010 30-Nov-2017



Page 46 of 79

B. KEY OUTPUTS BY COMPONENT

To assist the Government of Andhra Pradesh in improving its rural water supply and sanitation services through progressive decentralization, community

participation, and improved accountability.

Outcome Indicators

1. Number of people in rural areas provided with access to improved water sources under the project 2. Improved latrines constructed under the project 3. People provided with access to “improved sanitation facilities” under the project 4. People provided with access to “improved sanitation facilities”– rural 5. Improvements in cost recovery (a) contributions to O&M cost 6. Improvements in cost recovery (b) average collection efficiency (Percentage) 7. [DROPPED] People (number) in project areas with access to/use of improved water supply services 8. [DROPPED] People (number) in project areas with access to/use of adequate piped water supply throughout the year 9. [DROPPED] People (number) in project areas adopting improved hygiene and sanitation practices

Intermediate Results Indicators

1. Number of other water service providers that the project is supporting 2. Number of water supply schemes created by the communities themselves 3. Direct Project Beneficiaries 4. % female 5. Number of persons trained through capacity-building programs 6. New piped household water connections resulting from project intervention 7. % of schemes constructed yielding required quantity and quality of water: (a) SVS, (b) MVS 8. Number of recharge structures built to strengthen the sources 9. Number of soak pits constructed under the project to dispose of the sullage 10. People trained to improve hygiene behavior/sanitation practices under the project 11. People trained to improve hygiene behavior/sanitation practices under the project practices – female 12. % of constructed schemes that have carried out quality checks, audits, and evaluations, (a) Independent Construction Supervision quality checks 13. % of constructed schemes that have carried out quality checks, audits, and evaluations, (b) Community Monitoring and Social Audits 14. [DROPPED] Number of water utilities the project is supporting


Page 47 of 79

15. [DROPPED] Improved community water points constructed or rehabilitated under the project 16. [DROPPED] New piped household water connections resulting from project intervention 17. [DROPPED] Piped household water connections that are benefiting from rehabilitation works undertaken by the project 18. [DROPPED] % SVSs constructed in participation with GPs compared to total target 19.[DROPPED] (a) % MVSs constructed in participation with ZPs; (b) % MVS managed by ZPs compared to the total target 20. [DROPPED] (a) % participating GPs meeting the full O&M costs through user charges; (b) % participating GPs contributing toward O&M costs through user charges 21. [DROPPED] % households having access to safe sanitary latrines

Component 1: Capacity and Sector Development

In Andhra Pradesh 1. 843 “Kalajathas” or cultural processions 2. 17 Telecast of “Audio-Visual spots” 3. 36 Broadcast of “Audio Spots/ Jingles” 4. 514 wall paintings, display of boards 5. 80 Activities at School and “Anganwadi” or rural creches 6. 539 Boarding and banners (Flexies) put up 7. 95,000 Stickers at various public locations 8. 57 Compact Disks distributed by UNICEF on sanitation 9. 4 Exhibitions during “Jatara” or Seasonal market festival In Telangana 1. At state Level – 12 training modules comprising 85 sessions 2. At district Level – 19 training modules comprising 599 sessions 3. At village Level – 16 training modules comprising 39,925 sessions 4. Stage plays (“Burrakathas”), the material developed for these activities to include pamphlets, posters, manuals, hoardings, etc., in the local language 5. 836 GPWSCs formed in Telangana 6. 528 GPs achieving ODF status in Telangana

Component 2: RWSS Infrastructure Development

1. 670 SVSs and 20 MVSs in Andhra Pradesh, 795 SVSs and 26 MVSs in Telangana 2. 4551 Individual Sanitation Latrines built in Andhra Pradesh, 4911 in Telangana 3. 4650 Soak Pits built in Andhra Pradesh, 3721 in Telangana 4. 377 Augmentation Schemes built by communities, 560 in Telangana 5. 138,625 house connections in Andhra Pradesh, 121, 566 in Telangana


Page 48 of 79

6. 104 point-recharge structures in Andhra Pradesh, 31 in Telangana 7. 2 Sub-surface dykes in Andhra Pradesh, 1 Recharge pit in Telangana 8. 2 check dams (diversion weirs) in Andhra Pradesh, 1 check dam across the Okachetti Stream in Telangana


Page 49 of 79

ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION

A. TASK TEAM MEMBERS

Name Role

Preparation

Supervision/ICR

Raghava Neti Task Team Leader(s)

Priti Jain Procurement Specialist(s)

Anantha Krishna Karur Financial Management Specialist

Maruthi Mohan Dhrmapuram Team Member

Suryanarayana Satish Social Safeguards Specialist

Nirmala Chopra Team Member

Venkata Ramana Murty Jonnalagadda Team Member

Anil S.V. Das Team Member

Pyush Dogra Environmental Safeguards Specialist

Tripti Chopra Team Member

B. STAFF TIME AND COST

Stage of Project Cycle Staff Time and Cost

No. of staff weeks US$ (including travel and consultant costs)

Preparation

FY07 13.397 53,569.00

FY08 24.382 96,226.27

FY09 33.486 139,473.34

FY10 12.160 90,123.03


Page 50 of 79

Total 83.43 379,391.64

Supervision/ICR

FY09 0 0.00

FY10 5.675 28,524.73

FY11 16.680 81,759.90

FY12 34.793 193,188.10

FY13 30.543 274,210.57

FY14 27.612 118,947.15

FY15 17.250 81,951.46

FY16 18.919 67,939.92

FY17 19.977 96,376.89

FY18 23.053 165,729.58

Total 194.50 1,108,628.30


Page 51 of 79

ANNEX 3. PROJECT COST BY COMPONENT

Components Amount at Approval

(US$M) Actual at Project Closing (US$M)

Percentage of Approval (%)

Capacity and Sector Development

12.00 2.70 22.5

Infrastructure Development 153.50 113.20 73.74

Project Implementation Support

14.50 7.90 54.4

Total 180.00 123.80 68.77


Page 52 of 79

ANNEX 4. EFFICIENCY ANALYSIS

Introduction

1. The Andhra Pradesh and Telangana Rural Water Supply and Sanitation Project was approved in 2009 for SDR 96.6 million (US$150 million equivalent) and closed in 2017. The Project sought to assist the Government of Andhra Pradesh in improving rural water supply and sanitation services through progressive decentralization, community participation, and improved accountability. The state of Andhra Pradesh was bifurcated in 2014 into the states of Andhra Pradesh and Telangana, and the Project was accordingly restructured to split investment between the two states. This analysis examines the efficiency of the Project in turning financial inputs into results in both Andhra Pradesh and Telangana, as well as aggregated for both states.

Methodology Economic Analysis at Appraisal 2. The economic analysis conducted at appraisal evaluated the single-village schemes (SVSs) and multi-village

schemes (MVSs) for potable water supply and sanitation interventions envisioned under the Project. It estimated internal rate of return (IRR) for interventions based on the expected Project costs at appraisal (see table A4.1).

Table A4.1. Project Costs by Component at Appraisal (Re, millions)

Component A – Capacity and Sector Development 576.0

A1. Capacity Building 384.0

A2. Program Information, Education, and Communication (IEC) 38.4

A3. Sector Development Studies 52.8

A4. District Awards 100.8

Component B – Infrastructure Development 7,368.0

B1. New Investments 5,640.0

a. SVS 3,566.4

b. MVS 1,958.4

c. Rainwater Harvesting 33.6

d. Pilot-Testing New Technologies 81.6

B2. Rehabilitation and Augmentation 676.8

a. SVS 475.2

b. MVS ―

c. Recharging Groundwater Sources 201.6

d. Protecting Catchment Area ―

B3. Sanitation and Hygiene Promotion 1,051.2

a. Individual Sanitation Latrines and Below Poverty Line Households

321.6

b. Solid and Liquid Waste Management in Major GPs 187.2

c. Soak Pits 134.4


Page 53 of 79

d. Underground Drainage and Soil and Liquid Waste Management in Mandal headquarters

369.6

e. Hygiene Promotion 38.4

Component C - Project Implementation Support 696.0

C1. Staffing and Consultancy 273.6

C2. Equipment and Cost 96.0

C3. M&E 38.4

C4. Governance and Accounting Costs 28.8

C5. Engineering Support 158.4

C6. Community Support 100.8

Total Project Costs 8,640.0

Note: — = not available.

3. The economic analysis at appraisal was based on data gathered through a representative survey of 3,256

households in the Project area. The analysis sought to estimate benefits associated with the following four parameters: (a) value of time saved in water collection; (b) value of incremental water supply; (c) value of savings in recurring and capital costs (costs incurred to maintain the existing supply of water in the “without” Project situation); and (d) value of health benefits due to reduction in incidence of diarrhea, fluorosis, gastroenteritis, and malaria. Findings from the economic analysis at appraisal estimated an overall IRR for the Project of 21 percent, with a design life of 22 years.

Economic Analysis at Completion 4. The economic analysis at completion sought to follow the methodology used at appraisal to the extent

feasible. To that end, a cost-benefit analysis (CBA) was carried out that monetized the four benefit types that had been estimated at appraisal, as described below. The aggregate cost of the interventions evaluated at completion corresponds to approximately 92 percent of total Project expenditures. Table A4.2 offers a notional mapping of intervention and benefit types, including how monetized benefits were assigned to interventions in the CBA. a. Time saved in water collection. The single-village schemes (SVSs) and multi-village schemes (MVSs) to

improve reliable access to potable water for beneficiaries. The SVS and MVS interventions carried out under the Project reduced the amount of time beneficiaries spend to collect water on a daily basis. This parameter seeks to capture the opportunity cost of time that beneficiaries would spend to collect water in the absence of the Project. The analysis uses estimated time saved in collection multiplied by the prevailing wage rate. It attempts to account for only those beneficiaries that would realize time savings because of Project interventions, rather than those residents who previously sourced water from a quick (but costly) method such as a tanker truck.

b. Benefits from incremental water supply. The water supply interventions under the Project increased water consumption from an average of 20 liters per capita per day (lpcd) to 55 lpcd.4 This parameter seeks to capture the value that beneficiaries place on the increased quantity of water that they consume as a result of the Project. Ideally this value would be estimated as beneficiaries’ willingness

4 Note that 55 lpcd is a conservative estimate of water consumption after the Project, as some locations in Telangana saw water consumption levels of up to 100 lpcd. This evaluation considers 55 lpcd as a lower bound on benefits.


Page 54 of 79

to pay (WTP) for potable water. In the absence of a thorough WTP study, however, the beneficiaries’ WTP is proxied through the cost of water (including capital and O&M costs).5

c. Savings on recurring and capital costs. In the absence of this Project, intermediate capital investment will be required to maintain the current level of water supply for beneficiaries. The analysis captures this savings in terms of costs of the least costly alternatives to provide the same amount of water delivered by the Project, including maintaining previously existing hand pumps and bore wells, or purchasing bottled water or from tanker trucks.

d. Health benefits from reduction in gastroenteritis and diarrheal and malarial diseases. The water supply and sanitation interventions carried out under the Project are thought to reduce the incidence of waterborne diseases in beneficiary neighborhoods. The analysis estimated benefits of a reduction in gastrointestinal and diarrheal diseases attributed to improved water supply, and a reduction in malaria attributed to improved sanitation (particularly the decrease in standing water). Health benefits are captured by the reduction in incidence of disease as expressed through two channels: (1) the cost of medication and lost time due to illness or caring for an ill child; and (2) analysis of disability-adjusted life years (DALYs), a global measure of the burden of disease.6 This estimation of the health impacts associated with the Project follows the methodology used at appraisal and offers a notional estimate of benefits. A thorough epidemiological study would be required to disentangle the myriad factors at play in determining health outcomes.

5. The Project generated additional benefits for residents and sector institutions that are not captured in

monetary terms in the cost-benefit analysis and resulting economic internal rate of return. Table A4.2 identifies some of the Project benefits that were not possible to include in the CBA, and box A4.1 provides a qualitative example of benefits that accrued to local residents but were not incorporated in the CBA. While benefits have been mapped to a specific intervention for the purposes of the CBA, many are, in reality, mutually reinforcing and driven by various interventions. In the case of health benefits, the reduction in gastrointestinal and diarrheal diseases is attributed to the water supply interventions, while in practice the sanitary latrines and behavior change interventions also contribute to improved health outcomes far beyond a reduction in malaria. Similarly, the impact of behavior change campaigns has not been estimated in isolation, though it is thought to contribute to the benefits realized from the structural interventions.

5 Asian Development Bank, “Handbook on the Economic Analysis of Water Supply Projects,” 1998; https://www.adb.org/documents/guidelines-economic-analysis-water-supply-projects. 6 DALYs is a summary health measure that accounts for the gap between current health status and an ideal scenario where the full population lives to old age disease free. Data are from the World Health Organization, which calculates DALYs at the country level, disaggregated by disease type, disease burden, and mortality estimates. See http://www.who.int/healthinfo/global_burden_disease/estimates/en/index2.html.

https://www.adb.org/documents/guidelines-economic-analysis-water-supply-projects

http://www.who.int/healthinfo/global_burden_disease/estimates/en/index2.html


Page 55 of 79

Box A4.1. Groundwater Recharge and Associated Benefits for Small Agricultural Producers Okachetti Weir The Project financed the construction of aquifer recharge infrastructure in both states, the largest of which was in Telangana with the construction of the Okachetti Weir. The weir (or check dam), located approximately 2.5 kilometers from the village of Pamapuram in Wanaparthy District, creates 1,000 million cubic feet of surface storage, which in turn recharges the local aquifer. While thorough studies on the impact of the weir, including groundwater and hydrological modeling, were not carried out, local residents report that the groundwater table has risen significantly since the completion of the weir. Local small-scale farmers report that the subsequent increase in groundwater quantity has allowed them to increase planning and harvesting from once per year to twice per year. Similarly, the water quality in bore wells is reported by local residents to have improved. Data were not available to quantitatively estimate the value of increased in-situ groundwater as a result of Project activities, though it does appear to have qualitatively improved conditions for local residents. Photo credit: Client report.


Page 56 of 79

Table A4.2. Mapping of Interventions and Benefits

Benefits Estimated in PAD and ICR Economic Analysis Benefits not Quantified in PAD or ICR Economic Analysis

Intervention Type

1. Time saved in water

collection

2. Value of incremental

water supply

3. Savings on recurring and capital costs

4. Health benefits from reduction in

gastroenteritis and diarrheal and malarial

diseases

Human Development

Gender Implications

Institutional Environmental or Ecosystem

Greenhouse Gas

Implications

Water Supply (SVSs and MVSs)

• Household water connections reduce the time required to collect water.

• Household water connections allow beneficiaries to increase their use of water for cooking, cleaning, and personal hygiene.

• The water supply interventions supported by the Project generated savings for beneficiaries in terms of maintaining existing water systems.

• Reduction in coping costs associated with poor water service, including the purchase of bottled water or water from tanker trucks.

Reduction in the incidence of waterborne gastrointestinal and diarrheal diseases through improved water quality.

Safe drinking water contributes to myriad health and human development indicators that are not fully captured in the EIRR. A reduction in disease from clean drinking water allows children more time to attend school and promotes human capital.

Water supply interventions likely disproportionately benefit women and girls, as they are predominately responsible for water collection. The time saved in water collection as a result of the Project will afford them additional time for work or school.

Supported the GoI’s decentralization process.

Reduction in GHG emissions by replacing tanker trucks with piped water.

Sanitation (Latrines)

Reduction in the incidence of

Sanitation interventions

Improved privacy. Reduced pollutant


Page 57 of 79

malaria due to a decrease in standing water

yield many benefits beyond a reduction in malaria and impact a range of health and human development indicators. For children, other benefits include a reduction in stunting and improved cognitive skills, both of which will have important effects on income generating potential later in life.

inflows to watercourses, likely improving water resource quality in and downstream of villages

Soak Pits • Reduced standing water, which decreases the vectors of waterborne diseases including malaria.

Recharge Structures

• Facilitated aquifer recharge and increased in-

• Potential reduction in energy required for


Page 58 of 79

situ groundwater available for abstraction.

groundwater pumping due to higher water table.

Behavior Change

Campaigns

• The impact of behavior change is not estimated in isolation, though it is thought to reinforce all the benefits of the water supply and sanitation interventions carried out under

the Project, most notable the health and human development aspects.


Page 59 of 79

6. Indicator values used in the economic analysis at appraisal were used in the analysis at exit when feasible, and were updated with new data when appropriate, as outlined in table A4.3. The economic analysis relied on secondary data sources corroborated by field visits undertaken by the Project Support Unit and its consultants. All investments considered in the economic analysis at completion were carried out under Project Component B.

Table A4.3. Assumptions at Appraisal and Completion

Parameter Appraisal Completion

1. Time saved in water collection

Time savings for water collection after the project (hours/household/day)

0.66 0.66

2. Benefits from incremental water supply

Water consumption at baseline (lpcd) 16 20

Water consumption after Project (lpcd) 40 55

Incremental water consumption (lpcd) 24 35

Cost of per kiloliter of water (Re) 9.55 10.69

3. Savings on recurring and capital costs

Value of a hand pump, Rs (least-cost alternative to maintain existing system)

5,000 5,500

Drill a new bore well (Re) 10,000 35,000

Annual energy costs with existing schemes (Re) 500 700

Well repair (Re) 2,300 3,000

Annual cost to purchase bottled/tanker truck water (Re) 2,250 3,650

4. Health benefits from reduction in gastroenteritis and diarrheal and malarial diseases

Diarrhea medication (Re) 72 120

Gastroenteritis medication (Re) 275 275

Malaria medication (Re) 247 247

Reduction in diarrhea from project 21% 21%

Reduction in gastroenteritis from project 39% 39%

Reduction in malaria from project 38% 38%

Foregone workdays per incidence of diarrhea 1 1

Foregone workdays per incidence of gastroenteritis 2 2

Foregone workdays per incidence of malaria 4 4

Wages

Working days per year 250 250

Wage rate – Telangana (Re/day) Rs 92 to Rs 116/day 129

Wage rate – Andhra Pradesh (Re/day) Rs 92 to Rs 116/day 132

Population Growth and Discount Rates


Page 60 of 79

Population growth rate 1.3% 1.3%

Discount rate 12% 12%

Project life (years) 22 20

7. Assumptions regarding the parameters involved in estimating Project benefits were maintained from the

analysis at appraisal, with the exception of the updates made to the estimation of wage ranges and per capita water consumption and costs, as described below.

8. Wage rates. The wage rates used in the economic analysis differ slightly from those at appraisal to account

for changes to the local wage structures in the intervening years, and to disaggregate wages in Telangana from Andhra Pradesh. Wages in both Andhra Pradesh7 and Telangana8 are calculated as a weighted average of employment at the minimum wage for agricultural work and employment under the Mahatma Gandhi National Rural Employment Guarantee Act program9 at the prevailing wage rate in the respective state. All wages were transformed to 2009 prices from the nominal values presented in table A4.3 to 2009 prices to account for inflation, which was significant, and allow for comparison with costs at appraisal.

9. Per capital water consumption and costs. The average incremental water consumption after the Project was

revised up from 24 liters per capita per day to 35 liters per capita per day based on the actual output from the water systems built under the Project. In addition, the price level was adjusted from Rs 9.55 per kiloliter to Rs 10.69 per kiloliter to reflect the actual O&M costs associated with the water systems built under the Project.

Economic Evaluation of Water Supply Interventions

10. The Project supported two types of water supply interventions: single-village schemes (SVSs) and multi-village schemes (MVSs). The Project financed the construction of new water systems and the augmentation, or rehabilitation, of existing water systems. SVSs intend to provide one village (or “habitation”) with a reliable supply of safe drinking water. These systems are generally supplied by groundwater and have four elements: (a) a bore well, (b) a storage facility such as a small reservoir, (c) chlorination to improve water quality, and (d) household distribution of treated water. A total of 640 SVSs were carried out in Andhra Pradesh and 795 were carried out in Telangana. MVSs use primarily surface sources when the quantity or quality of local groundwater are inadequate. These schemes convey and supply water to as few as three or four villages and up to as many as 50 villages. Conveyance infrastructure was built to transfer water from the source to each village—up to a distance of 40 kilometers—and in each village, infrastructure was built to store, treat, and distribute water in a manner similar to the SVSs. Twenty MVSs were built in Andhra Pradesh and 26 in Telangana.10 The CBA at completion estimated benefits of the water supply interventions associated with (a) time savings in water collection, (b) incremental water supply, (c) savings on recurring and capital costs, and (d) health benefits from a reduction in the incidence of gastroenteritis and diarrhea, as follows.

7 Per day wage 2016, Agriculture, Government of Andhra Pradesh; http://labour.ap.gov.in/documents/Max_Min_Wage_Rates_in_Part-I_II_Scheduled_Employments/Maximum_Minimum_wage_in_Part_I_Part_II_wef_01102015.pdf. 8 Average basic wage for casual agriculture, Government of Telangana, 2013; https://labour.telangana.gov.in/content/minimumWages/01042017/Part2/1Agriculture.xls. 9 Revised wage rates under Section 6(1) of the Mahatma Gandhi NREG Act; 2016; http://nrega.nic.in/Netnrega/WriteReaddata/Circulars/1517Revised_wage_rate.pdf. 10 Consistent with the economic analysis at appraisal, the analysis at completion does not estimate benefits associated with augmented schemes due to the heterogeneity in the scope of the augmentation interventions.

http://labour.ap.gov.in/documents/Max_Min_Wage_Rates_in_Part-I_II_Scheduled_Employments/Maximum_Minimum_wage_in_Part_I_Part_II_wef_01102015.pdf

http://labour.ap.gov.in/documents/Max_Min_Wage_Rates_in_Part-I_II_Scheduled_Employments/Maximum_Minimum_wage_in_Part_I_Part_II_wef_01102015.pdf

https://labour.telangana.gov.in/content/minimumWages/01042017/Part2/1Agriculture.xls

http://nrega.nic.in/Netnrega/WriteReaddata/Circulars/1517Revised_wage_rate.pdf


Page 61 of 79

11. To estimate the time savings in water collection, the analysis assumes that one member per household is involved in water collection. This is likely a conservative estimate. The time savings attributable to the Project estimated at appraisal of 0.66 hours per day per household is maintained in the analysis at exit. The opportunity cost of time is valued at the prevailing local wage rate per state, which is a simplification to account for both forgone employment opportunities and school or study time.

12. The value of incremental water consumption was estimated based on average water consumption before and after the Project. These volumes have been derived from field visits to the beneficiary’s communities and small focus groups with residents. It was not possible to carry out a willingness-to-pay survey in the Project area, so the value of incremental water consumption was taken to be the O&M costs of the water systems. The value incorporated in the CBA corresponds to the incremental volume of water provided as a result of the Project multiplied by the value of water.

13. The savings on recurring and capital costs associated with previously existing assets generated by the water

supply interventions under the Project are estimated in terms of the least-cost alternative activities or maintenance that residents would have undertaken to maintain existing systems or to otherwise cope with deficient water supply service. Maintenance costs include the value of a hand pump (which were prevalent in the Project area prior to the intervention), repairing an existing well, drilling a new well, and the energy costs associated with the operation of existing systems. It is assumed that previously existing assets would require replacement in the 4th and 14th year of the design life of the Project. Coping costs include the cost to purchase water from a tanker truck or in bottles for 25 percent of the population.

14. The health benefits associated with the water supply interventions are assumed to be a reduction in the incidence of gastroenteritis and diarrhea as a result of improved water quality. In the absence of a thorough epidemiological study to estimate the reduction in incidence of disease due to the Project, the economic analysis at completion maintains the assumptions from appraisal (themselves derived from the literature in India): a 39 percent reduction in the incidence of gastroenteritis and a 21 percent reduction in the incidence of diarrhea. Similarly, the analysis at completion maintains the appraisal estimates of two missed workdays per incidence of gastroenteritis, and one missed workday per incidence of diarrhea (it is assumed that a parent will miss work to care for a sick child). The cost of gastrointestinal treatment is assumed to be Rs 275 and the cost of diarrheal treatment Rs 120. The analysis uses the 2015 value of DALYs from the World Health Organization for diarrheal diseases, and value of DALYs at the labor opportunity cost.11

15. Results. The results of the analysis found the water supply interventions overall to have been economically viable, with an IRR of 38.5 percent, as indicated in table A4.4. MVSs are more costly to construct due to the added need of conveyance infrastructure to move water from distant water sources to villages. The MVSs in Andhra Pradesh have a relatively lower return due to lower populations in some beneficiary villages, though these have been constructed in such a way that additional villages can be added at low cost to the existing trunk infrastructure in the future. In addition, in both states, benefits accrue to the other habitations connected to the MVSs in terms of improved bulk water supply due to trunk infrastructure improvements, though this is not captured in the analysis. These additional costs are justified by equity and poverty reduction considerations when less costly (and generally closer) water sources are not feasible.

11 Disease burden and mortality estimates, World Health Organization; http://www.who.int/healthinfo/global_burden_disease/estimates/en/index2.html.



Page 62 of 79

Table A4.4. Results of the Economic Analysis of Water Supply Interventions at Completion

Intervention At Appraisal Completion

Telangana Andhra Pradesh Overall

Overall

25%

41.5% 34.8% 38.5%

SVS 55.1% 58.8% 56.6%

MVS 24.6% 11.0% 18.3%

Economic Evaluation of Sanitation Interventions

16. The Project supported two sanitation-related interventions. Under the first pillar of the sanitation interventions, the Project supported the construction of 4,551 and 4,911 individual latrines at beneficiaries’ households in Andhra Pradesh and Telangana, respectively, that provide additional privacy and improve sanitary conditions. The second pillar of the sanitation interventions involved the construction of approximately 1-meter-square soak pits to allow grey water from household bathing, cooking, and washing (but not from latrines) to safely infiltrate into the ground without collecting in puddles. A total of 4,650 soak pits were constructed in Andhra Pradesh and 3,721 were constructed in Telangana. The scope of soak pit intervention was scaled back and, together with their not having been included in the economic analysis at appraisal, is not estimated in the analysis at completion. The benefits of the latrines completed under the Project is estimated as the reduction in incidence of malaria as follows.

17. The economic analysis incorporates the health benefits associated with the construction of latrines in terms

of a reduction in the incidence of malaria based on the premise that latrines will reduce standing water, which will reduce the habitat for the mosquitos that transmit malaria. The benefit is valued in terms of the treatment costs and missed work due to illness or to care for an ill child resulting from a case of malaria in a household. Maintaining the assumptions used in the appraisal stage analysis, it is assumed that the intervention will reduce the incidence of malaria by 38 percent. Each case of malaria is assumed to result in four lost workdays and a treatment cost of Rs 247. The analysis uses the 2015 World Health Organization value of DALYs for malaria, and values DALYs at the labor opportunity cost.12

18. Results. The results of the economic analysis of the construction of latrines is presented in table A4.5. The

analysis does not indicate a positive return on the latrines constructed under the Project, though it is important to note that the methodology used to estimate the benefits of latrines (namely, a reduction in the incidence of malaria) does not fully capture many benefits. The literature widely concurs that sanitation interventions, such as the latrines constructed under the Project, contribute to a range of other health and human development indicators that are not captured in the EIRR for sanitation, most notably gastrointestinal and diarrheal diseases, and their knock-on impacts thorough people’s lives (see table A4.2). Thus, the EIRR reported here underestimates the true benefits of this and other sanitation interventions.

12 Disease burden and mortality estimates, World Health Organization;

http://www.who.int/healthinfo/global_burden_disease/estimates/en/index2.html.



Page 63 of 79

Table A4.5. Results of the Economic Analysis of Latrines at Completion



Sanitation 20% -20.7% -18.2% -19.4%

19. The large decrease in the EIRR from appraisal to completion is driven by the low-cost technology envisioned

at appraisal. Best practices for latrine construction in India evolved over the course of implementation, and the Project adapted accordingly to finance a more effective alternative, yet at a higher cost. The analysis at appraisal assumed a unit cost of approximately Rs 3,500 per latrine, which reflects an assumption that only latrine pits would be constructed. However, the Project ultimately followed the revised best practices in India and financed enclosed structures above each latrine pit at a unit cost of approximated Rs 10,000. The magnitude of benefits at completion is in line with what was expected at appraisal, thus the change in technology accounts for the reduction in return calculated at completion.

Results of the Economic Analysis 20. The economic analysis conducted at completion found that the Project generated economic returns above

the opportunity cost of capital. The overall EIRR was 38.0 percent, as indicated in table A4.6. The findings of the CBA indicate that Project interventions in Telangana were slightly more efficient than those in Andhra Pradesh on account of the slightly higher overall EIRR. This is in part an artifact of higher unit costs for MVS water supply interventions in Andhra Pradesh, as discussed above. Moreover, the EIRR for sanitation interventions is artificially low as it captures only benefits from a reduction in malaria, while sanitation interventions are thought to yield a much broader range of benefits (see table A4.2). Indeed, it is methodologically difficult to disentangle some of the benefits of sanitation from water supply (for instance, the reduction in gastrointestinal and diarrheal diseases). Thus, the overall Project-level EIRR most accurately captures the range of interlocking benefits of the water supply and sanitation interventions.

Table A4.6. Project-Level Economic Analysis Results



Potable Water

25%

41.5% 34.8% 38.5%

SVS 55.1% 58.8% 56.6%

MVS 24.6% 11.0% 18.3%

Sanitation 20% -20.7% -18.2% -19.4%

Total 21% 40.9% 34.2% 37.9%

21. The EIRR at Project completion, as estimated based on the appraisal stage assumptions and methodology, is

higher than the return estimated at appraisal of 21 percent. This is due in large part to changes in the Project scope during implementation that concentrated financing on water supply interventions, which at appraisal and completion were estimated to have a higher IRR than sanitation. Other factors that affected the overall efficiency rating of the Project included (a) the overall EIRR for all key areas of intervention in both states


Page 64 of 79

indicate that Project expenditures delivered results in excess of the opportunity cost of capital; (b) significant savings in exchange rate coupled with savings on water supply contracts allowed for expanding the scope of the piped water connections; and (c) the introduction of the Swachh Bharat Mission resulted in a large decrease in the scope of the sanitation interventions, as more of those responsibilities were taken on by the government outside the scope of the Project.

Administrative and Operational Efficiency 22. Both exogenous and endogenous factors impacted the administrative and operational efficiency of the

Project. Over the course of implementation, the Project closing date was extended through four restructurings for a total of three years. These extensions stemmed from political, and largely exogenous factors, as well as technical considerations. The political factors are related to the 2014 bifurcation of Andhra Pradesh and the creation of the state of Telangana, and the subsequent need to incorporate the new institutional structure in Telangana and reorganize the structures in Andhra Pradesh. More endogenous to the Project, additional time was also required to revise village-level water supply planning studies, which had initially not contemplated adequate coverage levels, to improve the equitable distribution of services among beneficiaries (this is reflected in the Lessons Learned section of this ICR). At the time of the ICR, approximately 4 percent of the revised loan amount was undisbursed.

Efficiency Rating

23. The efficiency rating at completion is Substantial.


Page 65 of 79

ANNEX 5: BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS

The Andhra Pradesh and Telangana Rural Water Supply and Sanitation Departments (RWSSD) had the opportunity to comment on the draft of this ICR Report. Although the Andhra Pradesh RWSSD had no comments, the Telangana RWSSD did have comments related to the fact that the World Bank has rated project outcome as “Moderately Unsatisfactory,” and Bank Performance as “Moderately Satisfactory.” The TSRWSSD expressed the view that, since the [the recommendations included] during World Bank Mission visits and in the aide-memoire were followed almost [in their entirety], the agency expected the [Project Outcome] rating to be “Moderately Satisfactory.”

Summary of Borrower’s End of the Project Report

1. Introduction

The World Bank supported the Government of Andhra Pradesh (GoAP) in the design and implementation of the Andhra Pradesh Rural Water Supply and Sanitation Project from March 2010 to November 2017. The Project Development Objective was “to assist GoAP in improving rural water supply and sanitation services through progressive decentralization, community participation, and improved accountability.” In 2009, only about 46 percent of habitations were fully covered with water supply,13 and about 80 percent of people practiced open defecation in AP. The original estimated project cost was Rs 864.25 crores (about US$150 million), which was later restructured to Rs 792 crores (about US$125 million), including cancellation of about US$25 million.

During implementation, the State of Andhra Pradesh was bifurcated into two states—Andhra Pradesh and Telangana—in June 2014. Accordingly, the project was also split into two components, one for each state, without changing the key objectives. The financial allocations and targets were distributed across both states (in a ratio of about 52:48 for AP and Telangana), each having three project districts.14 AP got an allocation of Rs 405.72 crores and Telangana was allocated Rs 386.54 crores.

The project had three components:

A. Capacity and sector development

B. Infrastructure development, consisting of single-village water supply schemes (SVSs), multi-village water supply schemes (MVSs), augmentation schemes, household latrines, soak pits (for sullage management), and source strengthening measures

C. Project implementation support.

While all these targets remained almost the same during the project period, the household latrines component was substantially downsized due to more state funds being available under the Swachh Bharat

13 Forty-six percent of habitations were “fully covered” (all had access to at least 40 lpcd), 40 percent of habitations were “partially covered” (with access of 20 to 40 lpcd), and about 13 percent were “not covered” (having less than 20 lpcd). 14 The districts are Kadapa, Prakasam, and Visakhapatnam in AP; and Adilabad, Karimnagar, and Mehaboobnagar in Telangana. The three districts in Telangana were later further reorganized into 12 districts as a part of an overall state reorganization, but there was no change in project villages.


Page 66 of 79

Mission – Gramin (Clean India Mission – Rural, SBM–G) program initiated in 2014 by the Government of India (GoI).

2. Project Timelines and Milestones

The Project was sanctioned by the World Bank on 28 October 2009 and was set for completion on 30 November 2014. The project received several extensions and finally ended on 30 November 2017. Figure A5.1 provides a snapshot of the project timelines and its major milestones. Figure A5.1. Project Timelines and Major Milestones

Note: DPR = Department of Panchayat Raj; FCV = Full Covered Villages; GPWSC = Gram Panchayat Water and Sanitation Committee; HH = household; IHSLs = Individual Household Sanitation Latrines; MVS = multi-village scheme; PSUs= Project Support Unit; SVS = single-village schemes.

3. Institutional Arrangements The following institutional arrangements were made for overall project management and to promote progressive decentralization so that there is a sense of community involvement and ownership of the assets created.


Page 67 of 79

At the State Level

A State Project Supporting Unit (SPSU) was formed under the leadership of the Engineer-in-Chief, with one of the Chief Engineers of the RWSSD appointed Project Director. The Project Director was made responsible for providing oversight of the Project, monitoring participation of Panchayati Raj Institutions, appointing state-level independent construction quality surveillance, drawing and disbursing funds under the project components, and organizing Comptroller and Auditor General audits for the project

At the District Level

District Project Support Units (DPSUs) were constituted in all the districts, and the Superintending Engineer (SE) of the district Rural Water Supply and Sanitation Department (RWSSD) was put in charge of the DPSU, holding an “additional charge” as Project Manager and functionally reporting to the Project Director at the PSU, and administratively reporting to the Collector of the district, who was the Program Director for the district.

The District Water and Sanitation Committee (DWSC) was also constituted under the chairmanship of the District Collector to facilitate decision making on all district RWSS activities, including design and implementation of all schemes and sanitation programs through concerned GPs, administrative sanctions, and capacity building; information, education, and communication programs; and management and monitoring of all district projects.

The Zila Parishads (ZPs) are the asset owners of the MVSs and were responsible for O&M of bulk water supply, through Multi-Village Water and Sanitation Committees (MVWSCs), headed by the President of the ZP. The ZPs used devolution grants available under the 13th Finance Commission, but faced several problems because the ZP grants were removed in the 14th Finance Commission grants.

At the Village Level

The Gram Panchayats (Village Councils, GPs) and the Water and Sanitation Committees (GPWSCs) are responsible for active involvement at all stages of the scheme cycle, and provide endorsements during various stages of the scheme cycle. The GPs/GPWSCs were asset owners for SVSs and were responsible for service delivery and O&M of the schemes. This involved tariff fixation, collection, accounts audits, and general management of the schemes. The GPs also received devolution grants under the 13th and 14th Finance Commission grants, and part of these grants were also used for O&M of the schemes. As the state could not hold elections to local bodies, there were no GPs and committees in the initial period, and the activities were carried out by designated special officers. However, after elections in 2013–14, all GPWSCs were formed and adequately trained for their roles. 4. End of the Project Achievements

4.1 Achievements compared to PDO indicators are provided in table A5.1


Page 68 of 79

Table A5.1. Status of Key PDO Indicators Aspect No. Key Indicator Target Project End Status

(by Nov. 2017) Remarks

Improved access to water supply and sanitation

1 Number of people in rural areas provided with access to improved water sources under the project

1,890,000 (AP – 860,000; TS – 1,030,000)

1,984,814 AP – 912,814 TS – 1,072,000

The states exceeded the targets

2 Improved latrines constructed under the project]

12,000 (AP – 4,250; TS – 7,750)

9462 AP – 4,551 TS – 4,911 Balance through SBM–G+ project’s IEC & capacity-building support

In addition, about 253,263 latrines were built through SBM–G funds in project villages; while the project extended support of IEC, capacity building, and human resources (Mandal Resource Persons, District Resource Persons, etc.): AP – 109,039 TS – 144,224

3 People provided with access to “Improved Sanitation Facilities” under the project – rural

60,000 (AP – 21,250; TS – 38,750)

47,355 AP – 22,755 TS – 24,600

Community Participation, Decentraliza-tion and Accountability

4 Improvements in cost recovery (a) average contribution to O&M cost (b) average collection efficiency (through all sources: tariffs + local govt subsidies, e.g., GP funds)

(a) 70% (b) 70% Target is the same in both states

In AP/ TSa: AP – (a) 80%/ (b) 80% TS – (a) 80%/ (b) 80%

Note: a. Based on data collected by state teams and sustainability evaluation. AP= Andhra Pradesh; IEC = information, education, and communication; SBM–G = Swachh Bharat Mission – Gramin; TS= Telangana State.

4.2 Achievement compared to physical targets (Component B)

Almost all single-village schemes (SVSs) and most of the multi-village schemes (MVSs) have been completed, except for some which dropped out. Physical progress at the time of project closing is indicated in table A5.2.


Page 69 of 79

Table A5.2. Physical Progress (November 2017) No. Details State Target Revised

Target Completed

(%) Commis-

sioned (%) Handed Over (%)

Remarks

1

Single- Village Schemes (SVSs)

AP 671 670 670 (99%) 670 (99%) 670 (99%) One dropped due to court

case

TS 810 795 (98%) 795 (98%) 795 (98%)

Total 1,481 1,465 (99%)a 1,465 (99%) 1,465 (99%)

2

Augmenta-tion Schemes

AP 415 377 377 (100%) 377 (100%) n.a. Others implemented

through other govt programs

TS 627 ― 627 (100%) 627 (100%) n.a.

Total 1142 1,142 (100%) 1,142 (100%)

n.a.

3

Multi-Village Schemes (MVSs)

AP 20 20 20 (100%) 19 (95%) 19 (95%)

TS 26 26 26 (100%) 26 (100%) 26 (100%)

Total 46 46 (100%) 45 (98%) 45 (98%)

4

Household Tap Connections

AP 19,500 ― 138,625

TS 22,500 ― 121,566

Total 42,000 260,191 (620%)

5

Household Latrinesb

AP 4250 ― 4,551 (108%) from Project

109,039 (under

SBM–G)

TS 7750 ― 4,911 (63%) from project,

144,224 (under

SBM–G)

Total 12,000 9,462 (79%) under project,

253,263 (under

SBM–G)

Note: a. The remaining 3 SVSs in Andhra Pradesh and 15 SVSs in Telangana were dropped for various reasons. b. It was agreed during earlier project restructuring to use Swachh Bharat Mission funds for investment support to toilets, while the Project continues to support IEC capacity building of manpower. n.a. = not applicable; – = not available.

4.3 Key Service Delivery Results are as follows:

• The project benefited about 2 million people in both states

• About 50 percent of the 260,000 households in project villages were provided with household tap connections, a first in both states


Page 70 of 79

• About 47 percent of total project habitations were provided 100 percent tap connections, also a first in both states

• More than 80 percent of project habitations are providing water supply for more than two hours daily

• Gram Panchayat Water and Sanitation Committees (GPWSCs) have been formed and schemes successfully handed over, after due social accountability (Atmaprpanam) processes

• Independent sustainability assessments ranked more than 80 percent of SVSs as fully sustainable, and only about 3 percent need external support to sustain operations

• Innovations like using SCADA, web-based monitoring, solar power, and large check dams were successfully adopted

• Most of these successful approaches are being scaled up in other government-funded RWSS projects as well.

5. Lessons Learned

• At the preplanning stage, consultations with beneficiaries are required for better planning of the scheme.

• There should be dedicated staff from the beginning of the project until project closure for successful and timely completion of the project.

• Detailed estimates of cost from source to household are required without piecemeal additions to contract costs. This may avoid deviations in the scope of work in the agreement.

6. Borrowers’ assessment

• The guidance of World Bank officials on technical, financial, and social issues was encouraging for future projects in AP state. The various activities taken up in the Project are valuable and useful for improving in-house staff capacities.

• The procurement clearances (non-objections) required to be provided by the World Bank shall be as per the need of the state.

• The tendering system and execution process required to be provided by the World Bank shall be as per the procedures followed by the state.


Page 71 of 79

ANNEX 6: SUMMARY OF STAKEHOLDER CONSULTATIONS

1. The Bank mission held stakeholder meetings in Hyderabad, Telangana (2 November 2017), and Vijayawada,

Andhra Pradesh (6 November 2017). The key participants included senior officers from the RWSSD, PMUs, departments of the Ministry of Panchayati Raj, Zila Parishads, elected representatives from Zila Parishad and Mandal Parishads, and members from GPs, Village Water and Sanitation Committees (VWSCs), and Self-Help Groups of the project villages.

The key messages from both meetings are as follows:

• The households in project villages started experiencing improved water supply at their doorstep through taps, a new experience for several households, and are happy with the services.

• In several villages, 100 percent of households got water taps within their premises, a first in both states, and this has become a formal policy in Telanagana (Mission Bhageeratha) and an informal policy in Andhra Pradesh, in the form of directions from ministers to design future schemes along the same lines, irrespective of funding source.

• Women and men in the villages have shared how their overall quality of life improved due to the project interventions in terms of time saved, convenience, and no need to carry water on their heads. They felt that it is the village responsibility, from now on, to sustain these levels of service delivery through good O&M, failing which they would have to resort to the earlier practice of carrying water on their heads.

• The participating Sarpanches (GP and VWSC elected heads) also opined that they are able to approach households for O&M tariffs due to improved and reliable service, and are gradually seeing improved collection rates.

• The Sarpanches also shared the opinion that it would have been better if the project covered the entire GP instead of selected habitations within the GP, as now only some habitations have improved services (100 percent household connections) and other habitations have inferior services (public stand post connections), and they are being critized from such non-project habitations.

• Representatives from some villages where there are established water vendors selling treated water from reverse osmosis (RO) plants, shared that the local vendors are spreading false information that the tap water is bad for health (in order to maintain or improve their business), and there is a need to educate the residents in such villages about the benefits of tap water.

• In some villages, especially in the MVSs, people feel that river water is dirty and that it is not good to drink, and are not using the tap water for drinking and cooking. They are either buying RO treated water (where available and affordable) or other sources. The Sarpanches from such villages urged the RWSSD/ZPs to undertake a special awareness drive about the treated water supplied in the MVS projects.

• Some Sarpanches, especially those from MVSs, expressed dissatisfaction with the delays in project implementation.


Page 72 of 79

• Several project villages also achieved the distinction of becoming the villages with 100 percent household toilets and drinking water tap connections, again a first in both states. The representatives from such villages said that this was a dream come true. Most participants also felt that the availability of water at doorstep led to sustainable use of toilets.

• The GPs/VWSCs were happy with the consultations that were held with them and the training provided to them and the operators. However, they felt that there is a need to conduct new/refresher trainings in villages where some committee members have changed, and also where operators have changed.

• It is the opinion of the district officers that the achievements under the project were of immense help to them in the overall development agenda, especially in reducing health burden and empowering women, and thanked the Bank for its vision, guidance, and assistance.

• The WSSD/PMU senior officers shared that they have gained experience in planning and delivering projects that aim at 100 percent coverage and use advanced technologies for O&M in MVSs.


Page 73 of 79

ANNEX 7. SUPPORTING DOCUMENTS (IF ANY)

• Project Appraisal Document

• Project Implementation Plan

• Aide-Mémoire of Implementation Support Missions 2009–2017

• Implementation Status Reports 2009–2017

• Restructuring Papers

• Monitoring Reports from State and District Level

• Borrower’s End of the Project Reports (Telangana and Andhra Pradesh)

• India CPSs FY2009/FY12 and FY2013/FY17

• Sustainability Reports, October 2016, and April and June 2017.


Page 74 of 79

ANNEX 8. INSTITUTIONAL QUALITATIVE ASSESSMENT

KEY ASPECTS IN THE THEORY OF CHANGE

In the PAD Qualitative Assessment

DECENTRALIZATION

New SVSs

For new SVSs, GPWSC to participate in planning, designing, and implementation of SVS and intra-domiciliary connections.

The delayed election of local bodies hampered the full participation of the GPWSC in the overall cycle of SVS construction. Intra-domiciliary connections were hired with private companies.

M

Inclusion of women and self-help groups on GPWSCs.

A minimum percentage of GPWSCs is composed by women and self-help groups.

H

GP to set tariff for O&M. GPs set a fixed tariff for O&M. H

New MVSs

For MVS, RWSSD to support DWSC to form MVS-WSCs with participating GPs.

RWSSD supported the creation of MVS-WSC, with assistance from Zila Parishads (district local self-governments), who are owners of the assets.

S

For MVS, DWMS sign-off to RWSSD on scheme planning, design, and implementation.

RWSSD undertakes scheme planning, design, and implementation – but the design and its cost is approved by the DWMS mission, headed by the District Collector.

M

O&M of MVS responsibility of MVS-WSCs. O&M of MVS in charge of Zila Parishad.

N

Single Design-Build-Operate contract for MVS Not implemented. N

MVS commercial orientation through Performance Improvement Plans, construction and maintenance contracts, bulk water metering.

MVS implements bulk-meter as a good commercial practice. All MVS schemes are under O&M contracts, signed by ZPs. SCADA/web-based monitoring is also a good practice for better O&M.

S

Existing SVSs and MVSs

DWMS to support rehab under common program and policies.

World Bank financing has a particular set of rules within the DWMS.

N

OVERALL Rating for Decentralization M

DISTRICT-WIDE PROGRAM AND PLANNING

The DWSC under the District Collector will be responsible for implementing the district program and policies.

The DWSC in all districts, including project districts, played a key role in implementing district programs. The RWSS Department district officer should report and seek approval of the committee for selection of project villages, costs, additional

S


Page 75 of 79

costs, etc.

Planning and prioritization of water supply schemes will be based on demand for SVSs from GPs (bottom-up) and reconciled with proposals identified by the DWSC for MVSs (top-down).

RWSSD has identified priority investments based on needs (Not Covered or Partially Covered).

N

Sanitation programs will be specially designed, taking into consideration the need for IEC and hygiene promotion activities.

Sanitation programs have fully incorporated IEC and hygiene promotion.

H

Capacity will be built with the DWSC for implementing the district program.

DWSC has successfully implemented the project.

S

OVERALL Rating for DISTRICT-WIDE PROGRAM AND PLANNING M

COMMUNITY PARTICIPATION

The project supports community participation at all stages of the scheme cycle, with the GPWSC ensuring representation from the participating habitations.

GPWSC is handed over systems at Atmarpan. Its participation is limited in the planning and construction cycle.

M

The existing Self-Help Groups, which are powerful and well-established women’s groups under various ongoing programs in AP, will help the GPWSC in reaching out to the communities.

Self-Help Groups have played an important role within GPWSC.

H

OVERALL Rating for COMMUNITY PARTICIPATION S

IMPROVED ACCOUNTABILITY

Clear separation of Governance and Operational Aspects, with clear mandates and relationship structures among the various sector agencies, institutions, and stakeholders.

RWSSD maintains governance and operational aspects.

N

SWSM will be responsible for overall RWSS policy formulation and budget allocation.

n.a.

DWSM will be responsible for the RWSS program and policies, which will be implemented through the DWSC.

DWSM is responsible for implementing programs and policies, as decided by the state government.

H

The RWSSD Divisions will enter into a service contract agreement with the DWSC to provide technical support for designing and implementing the schemes.

No contract agreements were undertaken between RWSSD Divisions and DWSC.

N

The O&M service performance criteria will be agreed and monitored for all schemes.

No O&M service performance were agreed.

N

The use of robust and transparent procurement and financial processes along with technical and social audits will enhance accountability.

The project was consistent in using Bank procurement and financial processes. Social audits were taken twice during the project life.

H

RWSSD Divisions will be responsible for the technical quality of the district subprojects.

RWSSD maintained responsibility for technical quality.

H

State-level PSU will carry out the independent quality checks and beneficiary assessments.

The State Project Unit carried two independent quality checks (besides those by the independent RWSSD arm) and two beneficiary assessments.

H


Page 76 of 79

OVERALL Rating for IMPROVED ACCOUNTABILITY M

IMPROVED FINANCIAL SUSTAINABILITY

Participating districts will adopt district-wide policies on capital cost contributions and O&M cost recovery based on agreed affordability criteria.

Policies on capital costs were abandoned after MTR in compliance with the state policy, and O&M tariff only partially covers costs.

M

The capital cost contributions will be applicable to all new schemes, while O&M cost recovery will be applicable for all schemes (existing and new).

O&M policies did not include full cost recovery, but were consistently applied throughout the schemes.

M

Contribution to Capital Costs: The GP will contribute toward the cost of all new investments (amount not to exceed 10% of capital cost or Rs 500 per household, whichever is lower), through beneficiary household contributions. The community contribution for the Scheduled Caste (SC)/Scheduled Tribe (ST)/Below Poverty Line households will be on a concessional basis (amount not to exceed 5% of capital cost or Rs 250 per household, whichever is lower). The above contributions may be in cash or labor, as decided by the GP.

Policies on capital costs were abandoned after the MTR. However, about 57% of the expected capital contributions to the projects in both states was collected.

M

Contributions to O&M Costs: The O&M costs for all investments (SVSs and MVSs) will be fully recovered through user charges, subject to an affordability ceiling. The O&M charges for all new schemes will be fixed prior to the commencement of the scheme. For MVS, the DWSC will decide the bulk water charges prior to approval of the MVS. In case of high-cost schemes, the amount exceeding household affordability level (Re 45 per month) will be subsidized by the GP for SVSs and ZP for MVSs.

No affordability ceiling in place, and user charges only partially cover the O&M costs. Subsidies through the 14th Financing Commission cover gaps as per state policies. Given this context, the project could not have a separate policy of fully recovering O&M costs through tariffs.

N

OVERALL Rating for IMPROVED FINANCIAL SUSTAINABILITY M

INTEGRATED WATER SUPPLY AND SANITATION PROGRAM

The water supply investments will be made in an integrated manner, with source strengthening and catchment area protection activities, rainwater harvesting systems, sanitation programs for construction and use of individual household latrines, safe disposal of wastewater, solid waste management, and community health and hygiene awareness programs for improved and sustainable benefits across the community.

Although the liquid and solid waste activities were dropped in the MTR restructuring, source strengthening, recharge structures, and soak pits were introduced and implemented by the project.

S


Page 77 of 79

Note: Ratings: H = High; M = Moderate; N = Negligible; S = Substantive. DWSM = District Water and Sanitation Mission; GPWSC = Gram Panchayat Water and Sanitation Committee; IEC = information, education, and communication; MTR = Midterm Review; MVS = multi-village scheme; O&M = operations and maintenance; RWSSD = Rural Water Supply and Sanitation Department; SCADA = Supervisory Control and Data Acquisition; SVS = single-village schemes; SWSM = State Water and Sanitation Mission; WSCs = Water and Sanitation Committees.

The sustainability of water and sanitation systems will be strengthened through improved design, construction, and O&M practices.

An O&M Manual was developed for both states. Bank supervision contributed to improved design and construction practices.

H

OVERALL Rating for INTEGRATED WATER SUPPLY AND SANITATION PROGRAM H


Page 78 of 79

ANNEX 9. SUMMARY OF THE SUSTAINABILITY ASSESSMENT

1. Both Andhra Pradesh and Telangana undertook sustainability audits of SVSs. In AP, the sustainability audit was done once covering about 67 schemes (10 percent sample) in early 2017, and in Telangana the audit was done twice covering about 181 schemes (total 20 percent sample) in late 2016 and second quarter of 2017 (total thus becomes 30 percent of SVSs across the project). The samples of schemes studied have been scored for various indicators broadly divided into technical, financial, institutional, and social aspects. Schemes scoring more than 75 percent were treated as sustainable and/or to have minor issues that the GPs can address themselves. Schemes with scores between 60 and 75 are classified as having major issues that could be addressed by GPs with assistance from districts. Schemes scoring below 60 were rated as not sustainable and necessarily needed higher interventions. Highlights of the key findings of the AP Sustainability Audit15 and Telangana Sustainability Audits16 are presented in table A9.1.

Table A9.1. Highlights of Key Findings of the AP Sustainability Audit and Telangana Sustainability Audits

Issue Rating – AP Rating – Telangana

Schemes studied 67 181

Sustainable/have minor issues (scoring more than 75%)

80% 80%

Not sustainable (scoring less than 60%)

3% 3%

Schemes having operators 97% 100%

Schemes with trained operators 97% 93%

VWSCs that received trainings No data were available 81%

Average tariff (connection/ month) Re

10–50 25–50

Schemes where tariff is being regularly collected

39% 80%

Overall record keeping Average. Needs to be improved

Average. Needs to be improved

Note: VWSCs = Village Water and Sanitation Committees.

2. It is noteworthy that about 80 percent of schemes are evaluated as sustainable at the end of the project.

VWSCs were constituted in all villages and most hired an operator who received training after being hired. However, a few critical gaps exist, the main being non-regularity in tariff collections in AP and poor record keeping in both states. Another critical issue is the higher rate of dependency on grants from 14th Finance Commission grants, amounting to about 50 percent of O&M costs. In the MVSs, the O&M of the bulk water management is entirely dependent on state grants, while the village water distribution follows the same arrangements as in SVSs, affecting the sustainability of the schemes. Though both states have set up state-level corporations to manage the bulk water distribution across the state, they are at a nascent stage.

15 Sustainability Audit of SVS schemes in APRWSP, Andhra Pradesh, Samaj Vikas Development Support Organization, Hyderabad, April 2017. 16 Sustainability Audit of SVS schemes in APRWSP, Telangana, CVK Mind Source Consulting Pvt. Ltd, Bangalore, October 2016 and June 2017.


Page 79 of 79

ANNEX 10. MAP

implementation completion and results report (icr)...

Documents