Document of The World Bank FOR OFFICIAL USE ONLY Report No: 59131 - TJ PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF SDR 10.10 MILLION (US$ 16 MILLION EQUIVALENT) TO THE REPUBLIC OF TAJIKISTAN FOR THE SECOND DUSHANBE WATER SUPPLY PROJECT May 6, 2011 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
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Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: 59131 - TJ
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED GRANT
IN THE AMOUNT OF
SDR 10.10 MILLION
(US$ 16 MILLION EQUIVALENT)
TO THE
REPUBLIC OF TAJIKISTAN
FOR THE
SECOND DUSHANBE WATER SUPPLY PROJECT
May 6, 2011
This document has a restricted distribution and may be used by recipients only in the
performance of their official duties. Its contents may not otherwise be disclosed without World
Bank authorization.
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CURRENCY EQUIVALENTS
(Exchange Rate Effective {Date})
Currency Unit = TJ Somoni
TJS 4.4668 = US$1
US$1.5855 = SDR 1
FISCAL YEAR
January 1 – December 31
ABBREVIATIONS AND ACRONYMS
AF CIS
Additional Financing Commonwealth of Independent States
CPS CQS DA DC
Country Partnership Strategy Selection Based on Consultants’ Qualification Designated Account Direct Contracting
DVK Dushanbe Vodokanal DWSP Dushanbe Water Supply Project (on-going. predecessor project) DWSP2 Second Dushanbe Water Supply Project (the Project) EBRD European Bank for Reconstruction and Development ECA EIB
Europe and Central Asia European Investment Bank
EMMP FBS FM
Environmental Management and Monitoring Plan Fixed Budget Selection Financial management
GDP GNI
Gross Domestic Product Gross National Income
GORT Government of the Republic of Tajikistan GPF IC
International Competitive Bidding International Development Association Islamic Development Bank
Investment Facility for Central Asia
Interim Financial Reports
International Standards on Audit KAF Kafarnigan wellfield KMK LCS
Khojagii Manziliyu Kommunali Least Cost Selection
MDG M&E
Millennium Development Goals Monitoring and evaluation
MIDP Municipal Infrastructure Development Project MOF Ministry of Finance MTR Mid-term Review NAP NCB
Napornaya Water Treatment Plant National Competitive Bidding
OPIAP PCU
Operational Performance and Improvement Action Plan Project Coordination Unit
PDO PFS
Project Development Objectives Project Financial Statement
PIP PMC POM PPP QBS QCBS RAP
Priority Investment Program Project Management Consultant Project Operational Manual Public-Private Partnership Quality Based Selection
Quality and Cost Based Selection
Resettlement Action Plan RPF Resettlement Policy Framework SAM Samotechnaya Water Treatment Plant SCADA Supervisory control and data acquisition SIC State Investments Committee SIL SOE SSS SUE
Specific Investment Loan Statement of Expenses Single (or Sole) Source Selection State Unitary Enterprise
SWAP Sector-wide Approach SWW TA
South-West wellfield Technical Assistance
TOR Terms of Reference VAT WHO WSS
Value Added Tax World Health Organization Water Supply and Sanitation
Regional Vice President: Philippe H. Le Houerou (ECAVP)
Country Director: Motoo Konishi (ECCU8)
Sector Director: Country Manager Sector Manager:
Peter Thomson (ECSSD) Marsha Olive (ECCTJ) Wael Zakout (ECSS6)
Task Team Leader: Pier Francesco Mantovani/Anna Cestari (ECSS6)
TAJIKISTAN
SECOND DUSHANBE WATER SUPPLY PROJECT
I. Table of Contents
I. STRATEGIC CONTEXT ................................................................................................. 1
A. Country Context ................................................................................................................ 1
B. Sector and Institutional Context ........................................................................................ 2
C. Higher Level Objectives to which the Project Contributes ............................................... 3
II. PROJECT DEVELOPMENT OBJECTIVES ................................................................... 4
A. Project Development Objectives ....................................................................................... 4
Does the project require any exceptions from Bank policies?
Ref. PAD VI.G. OP7.50 International waterways
Have these been approved by Bank management?
[ X]Yes [ ] No
[ X]Yes [ ] No
Is approval for any policy exception sought from the Board? [ ]Yes [X] No
Does the project include any critical risks rated ―substantial‖ or ―high‖?
Ref. PAD III.E. [ X ]Yes [] No
Does the project meet the Regional criteria for readiness for implementation?
Ref. PAD VI.H. [X]Yes [ ] No
Project development objective Ref. PAD II.A.
Improve water utility performance and water supply services in selected areas of Dushanbe.
Project description Ref. PAD III.A
Component 1. Metering and Demand Management (US$ 7.62 million of which IDA US$ 5.97
million): The component will finance consumption metering and bulk metering of water, for
increased revenue, reduced wastage, and better tracking of losses, including: (i) supply and
installation of 76,500 residential meters (i.e. approximately 46% of DVK users) and installation
of 1,500 apartment building master meters in selected areas of the city; (ii) rehabilitation of
1,500 apartment building service connections; (iii) supply and installation of bulk flow meters at
water production facilities; (iv) supply and installation of a Network Information System (NIS);
(v) communication strategy and public awareness campaigns to promote metering and demand
management; and (vi) installation of SCADA system.
Component 2. Water Quality Improvement (US$ 6.27 million of which IDA US$ 4.91 million): The component will support system upgrades for improved quality of water, including: (i) partial
renewal of filtration capacity at Samotechnaya WTP (SAM); (ii) network cleaning; (iii)
installation of in-network re-chlorination systems; (iv) equipment for water quality monitoring;
(v) reconstruction of pumping station and tanks at the Napornaya WTP (NAP); and (vi)
provision of maintenance equipment.
Component 3. Institutional Strengthening and Capacity Building (US$ 3.34 million of which
IDA US$3.34 million): The component will finance activities to build institutional capacity and
improve utility performance of DVK, which includes (i) Carrying out an assessment of DVK’s
organizational and capacity-building needs; (ii) Installation of modern accounting, billing and
water revenue collection systems; (iii) Provision of technical assistance to the management of
DVK to improve its financial performance; (iv) Provision of technical assistance, and carrying
out of studies to improve the water supply operations of DVK, including studies for hydraulic
modeling, and for design of pressure zones and SCADA system; and (v) Implementation of
training programs for DVK staff.
Component 4. Implementation Support (US$ 1.78 million of which IDA US$ 1.78 million): The component will provide project Implementation support including (i) design and supervision
of works; (ii) project implementation unit operating costs, and (iii) annual project audits.
Safeguard policies triggered?
Environmental Assessment (OP/BP 4.01)
Natural Habitats (OP/BP 4.04)
Forests (OP/BP 4.36)
Pest Management (OP 4.09)
Physical Cultural Resources (OP/BP 4.11)
Indigenous Peoples (OP/BP 4.10)
Involuntary Resettlement (OP/BP 4.12)
Safety of Dams (OP/BP 4.37)
Projects on International Waterways (OP/BP 7.50)
Projects in Disputed Areas (OP/BP 7.60)
X Yes ○ No
○ Yes X No
○ Yes X No
○ Yes X No
○ Yes X No
○ Yes X No
X Yes ○ No
○ Yes X No
X Yes ○ No
○ Yes X No
Significant, non-standard conditions, if any, for:
Board presentation: N/a
Grant effectiveness:
The Subsidiary Agreement has been executed on behalf of the Recipient, the Project
Implementing Entity and the Municipality of Dushanbe.
The Recipient has adopted the Project Operational Manual, satisfactory to the Association.
Covenants applicable to project implementation:
Except as the Association shall otherwise agree, the Project Implementing Entity shall
not incur any debt unless a reasonable forecast of its revenues and expenditures shows
that the estimated net revenues for each fiscal year during the term of the debt to be
incurred shall be at least 1.2 time the estimated debt service requirements of the Project
Implementing Entity in such year on all its debt, including the debt to be incurred.
The Recipient shall take all the necessary measures, including reasonable annual
adjustments of water supply and sewerage tariffs and annual provision of subsidies to the
Project Implementing Entity, in order to maintain for each of the fiscal years of the
Project Implementing Entity after the fiscal year ending on December 31, 2011, a ratio of
total cash operating expenses to total cash operating revenues not higher than 0.90 and to
enable the Project Implementing Entity to collect effectively all operating revenues
related to its operations.
Upgrade/install automated accounting system with capacity to generate IFRs within 3
months of effectiveness
DVK will establish an internal audit unit within 6 months of effectiveness.
1
TAJIKISTAN
SECOND DUSHANBE WATER SUPPLY PROJECT
I. STRATEGIC CONTEXT
A. Country Context
1. Tajikistan is a land-locked country with mountains over 90 percent of its surface. Its
population of 7.3 million people is young and growing rapidly. A severe lack of employment
opportunities has led a large number of workers (up to 40 percent of the working population) to
seek better job prospects abroad—largely in Russia. The resulting dependence on remittances
increases the vulnerability of the Tajik economy. Tajikistan is also prone to natural disasters,
such as floods, mudflows, landslides, avalanches, earthquakes, droughts and epidemics. Heavy
rains in the spring of 2009 claimed lives and destroyed villages and arable land.
2. Immediately after independence, the country fell into a devastating civil war (1992–
1997). With the political stabilization that ensued and with the support of the international
community, economic growth has been robust, averaging 8.6 percent per year between 2000 and
2008. Tajikistan nevertheless remains the poorest country in the Europe and Central Asia (ECA)
region with a per capita gross national income (GNI) of US$560 and 41 percent of the population
below the poverty line. With stability, a more modern government based on democratic
principles has emerged, however, decision making remains centralized and political
accountability is limited.
3. Tajikistan shares a 1,400 km-long border with Afghanistan, and it is only separated from
Pakistan by the narrow Wakhan corridor. Tajikistan’s remoteness, unfavorable geopolitical
location, deteriorating Soviet-era transport networks, and weak governance and regulatory
frameworks pose significant barriers to international trade, connectivity and investment. In
2000–2008 economic growth was driven mainly by the restoration of fiscal discipline and
macroeconomic stability, which stimulated consumption, production and investment and was
facilitated by implementation of structural reforms to liberalize the economy. In the past decade,
positive impacts also resulted from a favorable external environment: world prices for cotton and
aluminium—Tajikistan’s two main export commodities—soared, while growth in Russia and
other partner countries boosted demand for Tajik labor. The resulting remittances fuelled a
consumption boom, which helped support buoyant growth in real gross domestic product (GDP)
during the period. With its dependence on commodity exports, such as aluminium, cotton and
labor, accounting for 51.8 percent of GDP in 2008 (measured through remittances), Tajikistan
was hit hard by the global economic crisis.
4. Despite progress in some areas, it is unlikely that Tajikistan will achieve its Millennium
Development Goals (MDG) by 2015. The indicators related to infant mortality (per 1,000 live
births), under-five mortality (per 1,000 live births), and maternal mortality (per 100,000 live
births) stand at 56, 68 and 97 compared to the 2015 MDG targets of 25, 30 and 30 respectively.
The incidence of tuberculosis and HIV/AIDS has been increasing, whereas the use of
contraception and knowledge of HIV/AIDS prevention remains limited. Social sector
expenditure remains lower than in other Commonwealth of Independent States (CIS) countries.
Despite efforts to improve its social sector, the quality of education and health services remains
2
below Soviet-era levels. A large proportion of the population still has only limited access to basic
services. The social safety-net system established to protect the vulnerable and unemployed is
rudimentary.
B. Sector and Institutional Context
5. Water supply service covers about 59 percent of the population.1 Coverage averages 93
percent in urban areas and is almost universal in the capital Dushanbe. Access to service in rural
areas, however, is inadequate and lags substantially at 47 percent. Water quality in most
communities does not meet national drinking standards, and service interruptions are frequent.
Furthermore, only 14 percent of the population has access to centralized sanitation services (44
percent in urban areas and 3 percent in rural areas). This impacts people’s health negatively and
adds a burden to daily household management, inevitably affecting women and children. Water
supply and sanitation (WSS) infrastructure, largely inherited from the Soviet era, is deteriorating
quickly and is plagued by poor operation and maintenance. In general, sector institutions and
providers have weak capacity. Since decentralization in 1997, institutional arrangements have
changed significantly. Tajikistan lacks a ministry responsible for WSS planning, policy
development and regulation. The central government has transferred virtually all of its
responsibilities for urban water delivery and sewerage services to the municipalities (Hukumats).
A central agency, Khojagii Manziliyu Kommunali (KMK), retains regulatory oversight and
provides operational and investment support to all municipal operators, except for the capital city
Dushanbe.
6. The Dushanbe WSS utility or Dushanbe Vodokanal (DVK) is set up as an independent
―State Unitary Enterprise,‖ operating de facto under close and undivided control by the
Municipality. Dushanbe features a fairly developed yet degraded WSS infrastructure. Decades of
underinvestment with limited technical and managerial capacity have caused water losses and
consumption to reach extremely high levels by international standards with demand approaching
1000 litre/capita/day (l/c/d). Most residents have a home or yard connection, but service is of
poor quality. Pressure is often insufficient, and service frequently discontinued in summer,
especially in the upper floors of apartment buildings. Inadequately treated ―brown‖ water, high
in suspended solids, is occasionally distributed after strong rains increase raw water turbidity in
the Varzob River (which provides 50 percent of DVK’s supplies). DVK’s customer service
performance is particularly weak: door-to-door controllers issue handwritten bills for cash
payment and achieve extremely low collection levels. The extensive sewerage network suffers
substantial degradation and saturation, resulting in chronic sewer overflows. A decrepit
secondary wastewater treatment plant reduces pollution marginally with serious environmental
impacts on the Varzob River.
7. To date, the World Bank, the European Bank for Reconstruction and Development
(EBRD) and the Swiss Cooperation are Tajikistan’s main partners for water supply
rehabilitation. The World Bank-financed improvements to urban services have mainly focused
on water supply through two ongoing operations, the Dushanbe Water Supply Project (DWSP)
and the Municipal Infrastructure Development Project (MIDP), targeting eight provincial towns.
1 MDG target for 2015 is 79 percent
3
8. DWSP implementation, launched in 2002 and due to close in June 2011, has had major
delays linked to DVK capacity and governance weaknesses, as well as the termination of the
management contract operator responsible for project implementation and utility operations
improvement. More recently import restrictions on equipment and materials shipped via
Uzbekistan have also delayed DWSP completion. Implementation challenges aside, it is
generally accepted that DWSP will have contributed2 to tangible improvements in the reliability,
safety and quality of Dushanbe’s water supply. Almost 40 km of pipe network were replaced,
pumping facilities for groundwater extraction upgraded, energy-efficient equipment installed,
filter and chlorination systems partially renovated, and production and consumption meters
purchased. DVK’s technical and managerial capacity as modern utility, however, has only
improved marginally.
9. In Dushanbe, the need for vast infrastructure upgrades remains unattended. A
comprehensive 2010 feasibility study of WSS rehabilitation, renewal and expansion
requirements3 assesses the 2011-2035 investment needs at about US$400 million, including the
development of new remote water sources and the extensive upgrading of sewage collection and
treatment systems. Over the period 2010-2017, urgent unfunded needs have been assessed to
exceed $40 million. In this seven-year horizon, targeted rehabilitation is needed to strengthen
water supply reliability and quality, including the critical renewal of pumping and storage
facilities, as well as filtration and chlorination capacity. In a medium-term strategic perspective,
multi-year system-wide demand management investments are needed to reduce losses and
wasteful water uses, improve operational cost efficiency, and foster DVK's long-term
sustainability.
10. On the institutional side, DVK continues to feature weak technical and managerial
capacity, limited focus on customer service and cost recovery, and hands-on involvement by the
Municipality in utility decision making. Stronger management capacity, performance incentives
and institutional governance are needed to bring about change.
C. Higher Level Objectives to which the Project Contributes
11. For the period FY10-13, water, including the improved provision of WSS services, is a
priority in the Country Partnership Strategy (CPS) between the Government of the Republic of
Tajikistan (GORT) and the Bank, together with improvements in public service governance.
12. Dushanbe continues to feature one of the worst water supply services among CIS
capitals, constraining the fulfilment of the city’s economic potential. The project will afford
critical improvements in water and service quality, as well as in revenue collection and financial
sustainability. These will, in turn, improve health outcomes and quality of life for Dushanbe's
population, while facilitating economic activity and freeing municipal resources for other
productive investments. Importantly in the medium term, the project is expected to promote
greater accountability in water usage and utility management, setting DVK on a path of more
sustainable and efficient service and resource management. Given its limited funding against
vast program needs, the project is also likely to leverage fruitful collaboration with other donors.
2 Along with other investments by the Islamic Development Bank
3 GWCC and TBW Tajikistan, 2010
4
II. PROJECT DEVELOPMENT OBJECTIVES
A. Project Development Objectives
13. The proposed project development objective (PDO) is to improve water utility
performance and water supply services in selected areas of Dushanbe.
14. The PDO is the result of project scope maturation with DVK and the Municipality. It
reconciles the city’s pressing dual imperatives for safe and satisfactory public service and for
improved financial performance. Considering the scale of rehabilitation and upgrade needs and
the limited available funding, the targeted improvements cannot be achieved system wide but
rather in selected DVK service areas. The objective is to be attained through (i) water treatment
and distribution infrastructure upgrades to achieve water quality and service improvements
noticeable by customers, (ii) metering programs and improved billing and collection systems to
quickly enhance revenue generation while improving customer service, and (iii) technical
assistance and capacity-building activities to strengthen DVK’s management and operational
performance. Achievement of the objective will be measured through improvements in water
quality for selected areas of Dushanbe, in service satisfaction and in revenue collection and
financial viability of DVK.
Project Beneficiaries
15. The project beneficiaries are the people of Dushanbe connected to the water supply
network and receiving DVK services. Most of Dushanbe’s 700,000 inhabitants, regardless of
their income level, face hardship caused by inadequate water supply services. Given the very
high rate of connection to the water supply network, tangible improvements in the quality,
delivery and efficiency of potable water services are expected to benefit the great majority of the
population, including its poorer segments. The social analysis and customer survey done during
project preparation and through implementation will be an important means to inform and
involve beneficiary groups and to address their needs.
16. The intermediate project beneficiary is the Dushanbe Vodokanal (DVK). The provision
of targeted technical assistance throughout project implementation aims to improve management,
operational and technical knowledge within the utility. Furthermore, project activities and
investments will help set DVK on a path of improved compliance, customer service and financial
viability.
17. Effective metering and billing practices are expected to reduce water demands and bring
associated economic and environmental benefits. Improvements in drinking water quality and
water supply system operation are expected to bring health benefits and respond to a priority
expressed clearly by the population.
PDO-level Results Indicators
18. The Project Development Objective will be measured by the following main indicators:
5
Indicator one: Water quality in the network. This indicator is measured through the most
relevant three parameters for the Dushanbe water supply systems: turbidity in the network,
concentration of residual chlorine in the network and bacteriological water quality.
Indicator two: Customer satisfaction with water supply service. Currently DVK has no
technical means to describe city service levels in detail (hourly duration of regular supply,
average number of ad hoc service interruptions and network water quality on the consumer
side). Indicators will be measured through customer satisfaction surveys (baseline, first
follow-up survey at midterm and yearly surveys to follow), which should target about 10
percent of system customers (about 1,600 households). The survey will measure main
indicators: number of people satisfied with water quality and number of people receiving
continuous water supply (24-hour service).
Indicator three: Improvement of DVK's financial performance. This indicator will be
measured through the following parameters: financial operating ratio,4 increase in the
number of registered customers in DVK's billing database, increased billing and collection
rates as reflected in improved accounts receivable collections (as percent of revenue)
19. These indicators will provide information on DVK's service quality and performance
(water safety and quality, customer satisfaction, and improved revenue and cost recovery) in
Dushanbe. Other indicators to be monitored during the project are intermediate results indicators
specific to various project components. The measurement will be done in accordance with the
project implementation schedule.
III. PROJECT DESCRIPTION
A. Project Components
20. The project includes four components:
Component 1. Metering and Demand Management (US$ 7.62 million of which IDA US$
5.97 million): The component will finance consumption metering and bulk metering of
water, for increased revenue, reduced wastage, and better tracking of losses, including: (i)
supply and installation of 76,500 residential meters (i.e. approximately 46% of DVK users)
and installation of 1,500 apartment building master meters in selected areas of the city; (ii)
rehabilitation of 1,500 apartment building service connections; (iii) supply and installation
of bulk flow meters at water production facilities; (iv) supply and installation of a Network
Information System (NIS); (v) communication strategy and public awareness campaigns to
promote metering and demand management; and (vi) installation of SCADA system.
Component 2. Water Quality Improvement (US$ 6.27 million of which IDA US$ 4.91
million): The component will support system upgrades for improved quality of water,
including: (i) partial renewal of filtration capacity at Samotechnaya WTP (SAM); (ii)
4 The working ratio, as defined in the financing agreement (ratio of cash operating expenditures/cash operating
revenues) is to be less than 0.9.
6
network cleaning; (iii) installation of in-network re-chlorination systems; (iv) equipment for
water quality monitoring; (v) reconstruction of pumping station and tanks at the Napornaya
WTP (NAP); and (vi) procurement of maintenance equipment.
Component 3. Institutional Strengthening and Capacity Building (US$ 3.34 million of
which IDA US$3.34 million): The component will finance activities to build institutional
capacity and improve utility performance of DVK, which includes (i) Carrying out an
assessment of DVK’s organizational and capacity-building needs; (ii) Installation of modern
accounting, billing and water revenue collection systems; (iii) Provision of technical
assistance to the management of DVK to improve its financial performance; (iv) Provision
of technical assistance, and carrying out of studies to improve the water supply operations of
DVK, including studies for hydraulic modelling, and for design of pressure zones and
SCADA system; and (v) Implementation of training programs for DVK staff.
Component 4. Implementation Support (US$ 1.78 million of which IDA US$ 1.78
million): The component will provide project Implementation support including (i) design
and supervision of works; (ii) project implementation unit operating costs, and (iii) annual
project audits.
21. Operational Performance Improvement Action Plan. The above project investments may
not suffice to achieve the sought-after transformation of DVK into a well-performing service
provider unless the Municipality and DVK are also committed to an Operational Performance
Improvement Action Plan (OPIAP). DVK and the Municipality have agreed to follow such an
OPIAP and will submit it to Bank approval as a condition to negotiations. Indicative OPIAP
tasks are outlined in Annex 2, Part B. The OPIAP will be further detailed and updated at project
inception with the support of the Project Management Consultant (PMC).
B. Project Financing
22. The project is a stand-alone US$19 million investment operation to be funded by a
US$16 million IDA 15 grant and US$3 million co-financing from the Municipality. The Ministry
of Finance would transfer the IDA $16 million to DVK as a grant for the exclusive benefit of the
project with no requirement for repayment of principal or interest. In exchange the Ministry of
Finance (MOF) expects the Municipality to provide counterpart co-financing of US$3 million.
GORT thus seeks to help DVK improve its dire financial situation, while inducing stronger
municipal oversight and accountability for DVK performance. MOF and the Municipality agreed
that such a short term loan from the Municipality to the DVK would carry no interest.
23. The Second Dushanbe Water Supply Project (DWSP2) investment scope was selectively
excerpted from a proposed DVK Priority Investment Program (PIP) estimated at US$47 million
(before taxes)1 and fully described in section VI-D and Annex 2 of this PAD. Additional funding
remains to be secured by DVK to finance other PIP needs. European donors, including EBRD,
the European Investment Bank (EIB) and the Investment Facility for Central Asia (IFCA) have
expressed interest to that effect. In November 2010, a joint World Bank, EBRD and EIB
preparation mission took place; however, as of March 2011, no European financing commitment
had been formalized.
7
Lending Instrument
24. The lending instrument is a Specific Investment Loan (SIL) in the form of a US$16
million IDA grant to GORT.
25. MOF has agreed to pass the grant through to DVK on the same grant terms (unlike the
previous project, no interest or principal repayments are due to MOF from DVK), whereas co-
financing funds will be made available from the Municipality to DVK on soft terms. A
Subsidiary Agreement acceptable to the Bank will be entered into between MOF, DVK and the
Municipality to reflect these arrangements.
26. The Municipality will provide the US$3 million co-financing to DVK on soft terms with
a commitment fee and repayment of principal. As a performance incentive, the commitment fee
may be softened if DVK satisfies certain financial performance milestones agreed with the
Municipality. Improvements sought may include increased billing and collection; registering and
billing all DVK customers by the end of the project's first year; overhaul and automation of the
billing and accounting departments; and streamlining the role of collectors no later than the
project's second year.
Project Cost and Financing
Table 2 Investment by Component 2011-2016 (US$ million)
Note: 7 percent contingency has been included in each component
Component
Total Cost
US$m
IDA US$ % IDA
Component 1: Metering and Demand Management 7.62 5.97 78
i) Consumption metering : Installation of 76,500 residential meters and 1,500 master meters;
ii) Rehabilitation of apartment building connections.
iii) Bulk metering
iv) Supply and installation of a Network Information System (NIS)
v) Communications strategy and public awareness campaign.
vi) Installation of SCADA
Component 2: Water quality improvement 6.27 4.91 78
i) SAM filters reconstruction
ii) Network cleaning
iii) In-network rechlorination systems
iv) Water quality monitoring units;
v) Reconstruction of pumping station and tanks at NAP
vi) Procurement of maintenance equipment (hydraulic excavator)
Component 3: Institutional strengthening and capacity building 3.34 3.34 100
i) Institutional Assessment
ii) Modernization of accounting and, billing and collection systems
iii) Technical Assistance for corporate development and financial performance
iv) Technical Assistance and studies for operational improvements
v) Training programs
Component 4: Implementation Support 1.78 1.78 100
i) Design and supervision of works
ii) Project management operating costs
iii) Annual audits
Totals (may not sum up due to rounding) 19.00 16.00 84
8
C. Lessons Learned and Reflected in the Project Design
27. There are several lessons to be learned from the first IDA financed project:
Governance Assessment: A Governance Assessment carried out by the World Bank as part
of project preparation confirms a critical need to improve DVK’s institutional capacity and
management quality if project outcomes are to be achieved in a timely manner in the short
term. More importantly DVK's sustainability and its future operations will be jeopardized if
steps are not taken to improve its overall governance, particularly in instituting improved
managerial accountability, operational transparency, staff incentives, and internal and
external communication. The Governance Assessment revealed the following issues
plaguing DVK performance (refer to Annex 8 for details): i) poor management capacity; ii)
lack of motivating performance incentives for staff; iii) weak accountability; iv) lack of
access to information; v) nonpayment or underpayment of user fees; and vi) lack of a
monitoring and evaluation (M&E) system. Within this context and given the limited project
funding, it is pertinent that the Municipality and DVK commit to improving DVK's
governance and overall performance in parallel with project implementation to ensure DVK
sustainability in the future
Alternative Approaches to Promote DVK and Project Performance. DWSP2 success is
dependent on better DVK performance in the areas of project implementation, utility
management and institutional governance. Based on client consultations, DWSP supervisory
experience, and the findings of a governance factors5 analysis (see Annex 8), project design
opts for different implementation arrangements than in DWSP. With the express support of
the Municipality, all project implementation oversight tasks and technical assistance will be
entrusted to a single Project Management Consultant (PMC) firm with relevant international
experience. The PMC will support and report to DVK. By comparison, since termination of
its service contract private operator, DWSP has been implemented by DVK with the support
of a Project Coordination Unit (PCU) of locally hired individual consultants reporting to the
Municipality. Utility operations will remain DVK's full responsibility with the support of
limited advisory resident technical assistance provided by the PMC and without the
introduction of a private public partnership with a management contract operator. DVK’s
commitments to improve utility operations will be embedded in the OPIAP. Finally, the
project deems it is premature to seek fundamental reforms of DVK status and by laws as a
means to reduce municipal interference with utility decision making. Rather, the project
recognizes the Municipality’s control of DVK and seeks to promote transparency, capacity
building and performance incentives for DVK managers and for DVK as a service provider
to render less frequent municipal involvement.
Relevant Level of Implementation Support is Required. The project combines infrastructure
investments with delicate institutional strengthening and capacity-building activities in a
challenging low capacity and weak governance environment. Supervision by the Bank will
require a relevant mix of technical expertise, spanning water supply engineering and utility
management and operations, as well as fiduciary expertise, with adequate frequency of
5 Supported by Governance Progress Facility in place for Tajikistan.
9
missions. During the first two years of the project, supervision missions will be needed at
least three times a year and subsequently twice a year.
IV. IMPLEMENTATION
A. Institutional and Implementation Arrangements
28. The recipient of the grant is the Ministry of Finance (MOF). The Dushanbe Vodokanal,
operating under the control of the Municipality of Dushanbe, is the implementing agency for the
project and the manager of project assets. The Municipality of Dushanbe will provide co-
financing for the project.
29. An internationally recruited Project Management Consultant (PMC) firm will provide
project management tasks, as well as technical assistance and capacity building for DVK. The
PMC will be responsible for managing and overseeing all project implementation tasks,
including (i) oversight of project procurement activities; (ii) oversight of project financial
management activities; (iii) oversight of detailed design preparation; (iv) works supervision; (v)
reporting; and (vi) training program coordination. The PMC will also oversee the delivery of the
institutional assessment. Finally, the PMC will provide a team of resident and short-term senior
experts and advisors qualified to provide utility management and operations technical assistance
to DVK’s director and managers. DVK will be responsible for collecting all data required for
project M&E and reporting.
30. The overall project financial management function, including budgeting, accounting,
reporting, internal control, funds flow and audit, will be the responsibility of DVK with support
of the PMC. This arrangement differs from DWSP and its additional financing in which the
PCU, established by DVK and the Municipality, has been responsible for fiduciary
responsibilities and implementation of the project. There will be limited ring fencing of the
fiduciary functions, including the use of dedicated Designated Account, maintenance of project-
specific financial management system and independent audit by auditors satisfactory to IDA.
B. Results Monitoring and Evaluation
31. The Results Framework and indicators for DWSP2 have been designed to be realistic and
measurable. DVK will retain the responsibility of data collection for the monitoring and
evaluation activities of DWSP2. The baseline data are available as collected during the DWSP
implementation and by the feasibility study prepared for DWSP2. Monitoring and evaluation of
project outcomes and results during its implementation will follow standard World Bank
practice. DVK will collect the data, and the PMC will compile the updated data in regular project
reports (quarterly and yearly) and in conjunction with World Bank missions. Indicators, which
require additional data or surveys (for example, the social and customer satisfaction survey) for
their measurement, will be collected at least three times during the course of the project: a
baseline survey currently under implementation for DWSP, a mid-term survey and an end-of-
project survey. The reports shall be published in a form accessible to DVK management,
Municipality of Dushanbe and other interested stakeholders. Core indicator number 4 has been
included as the number of household connections affected by the project rehabilitation works
(and metering) will be measurable. Given the already very high rate of connectivity to the main
10
network in Dushanbe, Core indicator number 1, as defined by the World Health Organization
(WHO) parameters, is not expected to provide relevant progress information.
32. DVK will be responsible for data collection for measuring the indicators: engineers will
be responsible for assessment of technical indicators; DVK financial staff will be responsible for
assessment of the state of DVK's financial viability and reporting on the financial indicators in
the progress reports. Financial data and assessments, including covenants, will be verified in the
annual audits. The overall responsibility for collection of data and issuance of the M&E reports
will be with an M&E specialist hired under the project. The assessment methodology has been
developed under the DWSP by a dedicated M&E consultant.
33. The Mid-term Review (MTR) will be conducted after completion of the project's second
year and will be focused on the review of results achieved under the project, as well as validation
of planned activities for the each project component.
C. Sustainability
34. DWSP2 will build on the achievements and experience of predecessor DWSP to improve
the sustainability of project investments and of DVK operations. The following include several
dimensions of sustainability that are taken into account:
Sustainability of project investments: Investments were prioritized to respect the client’s
paramount objective of increasing operational revenue, thus benefitting from a high level of
client ownership. The quality of design and works will be improved by reliance on an
internationally recruited PMC resident within DVK for the entire project duration. The
operation and maintenance of the infrastructure, equipment and systems provided under the
project will be relatively simple and manageable by duly-trained DVK personnel. The
project will further promote adequate private sector involvement in tasks with more
substantial ―modernization‖ contents, such as the turnkey delivery and initial operation of
rapid sand filters at SAM and the outsourcing of telephony-based billing, collection and
payments systems.
Institutional sustainability and performance of DVK: Despite some inefficiencies associated
with the institutional capture of DVK by the Municipality exemplified by hands-on
involvement in utility management and investment decision making, the project will not
pursue institutional reform of DVK as a condition for performance improvement. By
adopting simple and modest performance objectives focused on delivering potable water, on
improving billing and collection, and on metering consumptions (objectives that are
understood by DVK and the Municipality and are within their capabilities with outcomes
that customers will feel immediately), the project opts to empower gradual self-
improvement of utility performance. By providing advisory PMC technical assistance to
DVK’s management and operations, the project relies on client leadership to effect change
in DVK through project-funded investments. A DVK-supplied OPIAP embodies DVK’s and
the Municipality’s commitment to such discrete performance improvement steps. The
project further assumes that increased managerial capacity, coupled with new performance
incentives and relevant communication of performance goals, will not only result in service
quality and performance gains but will also reduce the need for municipal interference. In
11
the process, the frequent advisory support of Bank supervision missions will play an
important role. Beyond DWSP2’s strategic seeding, continued investment in DVK
infrastructure, systems and capacity modernization will be essential to sustain and expand
such gains. As a corollary activity to the project, the Bank will also seek to initiate and
mobilize funding for a South-South knowledge transfer partnership between DVK and the St
Petersburg Vodokanal.
Financial sustainability of DVK. In addition to the above, the new project should afford a
net gain in financial sustainability because its investments, although largely revenue
generating, will be financed by a grant. The mobilization of substantial unbilled and
uncollected revenues is expected to provide quick results for DVK, deferring the need for
substantial tariff adjustments. On a more fundamental level, the project will introduce
systematic metering in parts of Dushanbe, initiating the transition to accountable water
service—essential for the long-term financial sustainability of any utility.
D. Conditions for Effectiveness
35. The following are conditions for effectiveness:
The Subsidiary Agreement has been executed on behalf of the Recipient, the Project
Implementing Entity and the Municipality of Dushanbe.
The Recipient has adopted the Project Operational Manual satisfactory to the Association.
V. KEY RISKS AND MITIGATION MEASURES
36. The overall project risks are rated medium, impact-driven (M-I) and considered
manageable through planned mitigation measures. Potential risks are summarized in the
Operational Risk Assessment Framework (see Annex IV).
37. Implementation risks, such as associated with low DVK technical, management and
fiduciary capacity, are mitigated by relying on a private PMC to oversee project implementation
tasks, including procurement, disbursements and reporting, managing the design and works
supervision tasks, and providing technical assistance to DVK operations. Committing DVK and
the Municipality to the OPIAP will further mitigate utility management weaknesses and
municipal interference with the project and utility decision making. Component 3 of the project
focuses on institutional assessment and strengthening of DVK, as well as technical assistance
and training to build DVK's technical, financial and managerial capacity. A governance
assessment study financed through the Governance Partnership Facility (GPF) of the World
Bank also recommended measures to achieve better DVK corporate governance and lessen direct
Municipality influence in utility operations and investments to ensure results.
38. Dushanbe water users express high demand for improved quality of water supply service,
as well as reduced tolerance for service disruptions. In general users accept well the minor tariff
adjustments applied annually by DVK. More substantial increases, such as in 2008, do not cause
open discontent if preceded by noticeable service improvements. Acceptance of meter-based
billing and of new tariffs will be assessed by the GORT through ad hoc user surveys and
supported by relevant wide public information campaigns and focused interventions to ensure
effective asset rehabilitation with limited disruptions to service.
12
39. Project objective risk to DVK's financial sustainability lies in any backtracking on
commitments or delays in improving the billing and collection of the vodokanal, as the
installation of the payment system is a dated covenant. This would also impact the project’s
objective to reduce high wastage in the system. Relying on tariff increases will not ensure
sustainability without improvements in services and equity in payments. This risk is mitigated by
a high awareness among officials and their commitment to improved billing and collections.
Additionally a sustained public information and outreach program must accompany the
investments to highlight the water supply services improvements, spread awareness of bill
payment to maintain the system, and advise on avoiding water wastage, along with other public
health messages. Another project risk is the increased indebtedness of DVK that might make it
difficult for the company to reach the financial indicators. A covenant in the legal agreement and
agreement of the Government to pass the grant to DVK mitigates this risk.
40. There is also a risk that the project may negatively affect certain vulnerable consumer
groups through the higher tariffs and more stringent usage monitoring and collection system. The
social analysis and consumer satisfaction survey is designed to identify such potential groups and
mitigate the negative impacts. This risk is not expected to be high as all households in Dushanbe
are already included in the water authority's current billing network.
VI. APPRAISAL SUMMARY
A. Economic and Financial Analysis
41. Financial Analysis – Current Situation. DVK’s financial situation is weak. On the
revenue side, DVK bills its customers on a per capita norm consumption basis, and households
increasingly underreport the number of users. DVK currently registers (and bills) about 48
percent of Dushanbe citizens receiving its service, which is neither sustainable nor equitable.
Accounts receivable are about 25 percent of annual revenues and can be improved. Despite the
reported decline in consumers, DVK increased its revenue through substantial tariff increases
when tariffs doubled in 2008 and increased by about 15 percent in 2009. Budgetary and
commercial customers, however, pay three and seven times more than households respectively.
On the expenditure side, DVK operates at very low production cost levels, and it is not likely
that such costs can be reduced further. Production staff salaries are very low at 15 percent of total
cost of goods sold, while electricity costs (30 percent) are high due to unnecessarily high
volumes of produced and wasted water (about 75 percent). Other nonproduction costs (including
administrative and selling costs) are very high, and in 2009 reached 44 percent of DVK’s total
operating costs, resulting in negative income. The current cash operating ratio (an indicator) is
1.07, meaning expenditures exceed revenues (before payment of interest). This situation can be
corrected once the billing and collection system is operational. Technical assistance provided in
the project will recommend adjustments to align costs and focus resources on the greatest needs.
42. Debt. The Government’s decision to pass on the IDA grant terms to DVK (without
requiring DVK to repay principal or interest) is absolutely necessary to put DVK on a
sustainable path to financial recovery. Currently DVK is responsible for repaying MOF the
principal of the credit and the grant of DWSP. MOF also charges interest, which will soon reach
5 percent. The debt repayment (interest and principal) is estimated to reach 2.6 million TJS in
13
2011 on the existing DWSP credits and grant. DVK’s debt situation is critical and does not meet
tests such as the debt/asset ratio at 1.04 in 2009, which indicates its debt is just about equal to its
assets. A recommended healthy ratio is not more than 50 percent. Additionally in the long term,
DVK is exposed to a foreign exchange risk with the debt denominated in US$. Any additional
debt to DVK should be evaluated carefully to ensure the Bank’s covenant on debt/service ratio is
met and to ensure the long-term viability of DVK.
43. Projections and NPV calculations. Behind the financial and economic analysis, the main
assumption for project success in achieving financial sustainability is the improvement in
recording, billing and collection from the vast majority of customers. It is assumed that this will
be accomplished in the project's first year given the high level of awareness among officials at
both local and central government levels. Advanced steps are being taken to achieve these
actions. Projections of DVK income, expenditure and cost recovery tariffs are based on
estimated water demand increases, reductions in water waste, and improved billing and
collections. Major cost items added to the projections include depreciation and maintenance
costs of the new investments. Based on the assumption that DVK, with the support of the
Municipality, undertakes the actions prescribed under the project (improvements in billing and
collection, including alignment in the internal organization, debt relief and tariff increases) and
the very soft IDA financing terms, the financial net present value of the investments are high and
reach TJS 183 million and the financial rate of return approaches 30 percent.
44. Economic Analysis. Without the project, the main economic costs will include continuous
waste of water and electricity at high levels of water production. Lack of maintenance will
accelerate the deterioration of the water supply facilities in the city and erode benefits currently
accruing from the present system, while maintaining a weak billing and collection culture. In
broader economic terms, not undertaking the project will have substantial economic costs on
DVK as a provider of basic services to the capital of the country and on Dushanbe’s economy
and future development and growth prospects. With the project, additional capital investment
costs and larger operations and maintenance costs will be required. On the benefits side, the
project will allow for (a) reduction in electricity costs; (b) reduction of losses of economically
valuable water; and (c) increase of water supply to additional Dushanbe residents. Using these
assumptions and a discount rate of 10 percent, the project is economically justified with an
internal rate of return approaching 100 percent. Increases in costs and reductions in benefits of
20 percent each will keep the economic rate of return high at an estimated 75 percent. The
project includes other benefits that are difficult to quantify. There are costs to securing a clean
and reliable water supply, including fetching, boiling or other treatment. Water borne diseases
continue to be reported in Dushanbe due to inadequately treated water. Information on these
external economic costs is not available in a manner sufficient to attribute to the costs of
inadequate water supply (e.g., handwashing and other hygiene measures contribute directly to
reductions in water borne diseases but need the supply of clean water). Nevertheless these costs
are real to the beneficiaries and to the economy and providing clean water can reduce them.
45. Affordability. At the current tariff rates and using 2009 Tajik monthly poverty line and
extreme poverty line (TJS 162 and 104 respectively), household expenditures on water are
affordable (for a family of four) at 0.87 percent and 1.36 percent of these poverty rates
respectively. The average full coverage tariff, however, will require tariff increases that would
14
make household expenditure on water difficult to afford for very poor one-income families at 2.9
and 4.5 percent of the mentioned poverty lines. Nevertheless as mentioned above, the households
pay less than the average tariff, while budgetary and commercial units pay three to seven times
higher tariffs. In general, projected average cost recovery tariff is about three times current
tariffs. The Municipality and GORT’s Anti-Monopoly Committee will review annually DVK's
financial situation based on actual data of revenues, collections and costs to determine the
appropriate tariffs, subsidy levels and other actions required to ensure its sustainability. Tariff
adjustment proposals may also benefit from an updated social assessment and periodic customer
surveys, as well as from expert advisory technical assistance by the PMC.
46. Fiscal Impact. As a grant with no repayment requirements, the IDA grant repayment will
not have a fiscal or affordability impact on the national or municipal government budgets. The
Municipality of Dushanbe will be required to contribute US$3 million equivalent over the five-
year life of the project. Based on figures provided by the Municipality, the municipal budget is
growing by about 30 percent over 2010-2011. The largest part of this growth has been in capital
expenditures, while growth in current expenditure remained at a modest 10 percent. The total
contribution required from the Municipality is about 2 percent of its total budget and 4 percent of
its capital expenditure budget, and will not represent a significant burden on its financial
capacity.
B. Technical
47. The project can only cover a limited portion of DVK’s Priority Investment Program
(PIP). Targeting investments for the available US$16 million IDA grant amid overall PIP needs
estimated at US$47 million is a delicate process. The proposed scope is the result of extensive
optimization consultations with DVK and the Municipality, accounting for the uncertainty
affecting the potential availability of other sources of parallel financing, such as that envisioned
with European donors.
48. IDA investments will maximize meter installation for revenue generation and demand
management, which is expected to allow the metering of about 40 percent of DVK’s customer
base. Critical rehabilitation investments to improve water quality are retained in the project to the
extent that they are necessary to avoid blockage of meters by turbid water. Visible water quality
improvements will also create customer goodwill to accept new metering, billing and collection
practices. The project scope, will also fit investments for optimization of network operation
(pressure zoning, energy efficiency, SCADA systems), which would accelerate improvement of
service pressure in high apartment building during summer months.
49. By renewing filters at SAM, the project will complete the restoration of DVK’s filtration
capacity initiated by DWSP with the installation of Napornaya Water Treatment Plant (NAP) filters
and will ensure the lasting distribution of filtered, non turbid water in Dushanbe. The project opts
to renew only 50 percent of the SAM filtering capacity with the assumption that all water savings
gains induced by metering and demand management programs across DVK’s service areas will
translate in reduced demand for SAM production.
50. Project component implementation will apply all modern materials and technology.
Accurate designs and selection of appropriate solutions will precede physical investment.
15
Modern and adequate quality materials and equipment will be purchased for the rehabilitation
works and installations. Capacity building and technical assistance will be sought from
competent experts with extensive international experience in the field of utility management and
service provision.
C. Financial Management
51. The financial management arrangements established for the ongoing DWSP are
satisfactory and can be replicated for the proposed DWSP2. Under the ongoing DWSP (which
will close in June 2011), the PCU is responsible for the financial management function. DVK is
involved in the payments process through approval of invoices and works completion statements,
as well as payment requests prepared by the PCU. Both DVK and PCU have installed automated
accounting system, using the 1C accounting software. The accounting system has limited utility
as the installation was only about 60 percent complete. At DVK the accounting system is used
mainly for cash, bank and payroll transactions. All reports by DVK and PCU are prepared
manually.
52. Based on the assessment of DVK’s financial management capacity, it was determined
that the DWSP financial management arrangement will change, and DVK would be able to
maintain the project accounting system for the proposed project. The chief accountant of DVK
would be responsible for the project financial management system but would require the
assistance of a financial management consultant to be provided by the PMC to establish an
effective project accounting system and to maintain the system during project implementation.
To meet the minimum financial management requirements of the World Bank, DVK would need
to implement the following actions: (i) install a new accounting system, preferably the latest
version of 1C software (8.0); (ii) fully document the financial management procedures
(budgeting, accounting, reporting, internal control, audit) in a manual of financial procedures;
and (iii) receive the support of a financial management consultant to assist the chief accountant
in handling day to day project financial management and disbursement functions.
53. The project operating manual (POM) has to be updated to reflect activities under the
proposed project and the changes to the financial management responsibilities. DVK will submit
unaudited interim financial reports on a quarterly basis, and the project and entity financial
statements will be subject to audit by independent auditors and under Terms of Reference (TOR)
satisfactory to IDA. The project will also be subject to risk-based financial management reviews,
initially after every six months as part of the project implementation support. The entity financial
statements will be required to monitor financial performance and as part of DVK's institutional
strengthening, including the modernization of accounting and of billing and collection systems.
D. Procurement
54. The PMC shall absorb functions fulfilled by the currently existing PCU established for
implementation of the ongoing DWSP, including responsibility for carrying out project
procurement. The PMC will work in close collaboration with DVK staff to ensure knowledge
transfer to DVK procurement staff through on-the-job training and to build procurement capacity
within the water supply service. A procurement capacity assessment was carried out at DVK,
revealing little existing procurement capacity and no established internal procurement
16
procedures. Procurement delays due to these factors were identified as a main procurement risk.
Experience with DWSP indicates that procurement in the country does not attract adequate
competition. To mitigate these risks, experienced procurement consultants of PMC should be
engaged to support the DVK procurement team. The Bank team will closely supervise and
monitor the procurement processes and provide support to facilitate capacity development in
procurement. Procurement packages will be developed to ensure competition in line with the
market of procured items. More details on procurement arrangements are provided in Annex 3.
55. Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by
IBRD Loans and IDA Credits and Grants, dated October 15, 2006 and updated in January 2011,
shall apply to this project.
E. Social (including safeguards)
56. The project's social development objectives focus on (a) ensuring that the water supply
service needs and constraints of all categories of customers are addressed; (b) specifically
ensuring that the needs and constraints of the economically and socially vulnerable sub-groups
are recognized and addressed; and (c) putting in place mechanisms for customer information,
feedback and involvement in relevant aspects of the service provided.
57. To facilitate achievement of these objectives, the project focuses on both the demand and
supply side of water provision. The main tool used is a Customer Satisfaction and Social
Analysis Study, which will be completed at the beginning of the project and will be repeated
annually during implementation. The main purpose of this study is to develop a baseline on
customer satisfaction, willingness and capacity to pay, and perceived needs and gaps in current
service provision. It will also feed into completing the evaluation of DWSP. The study findings
will specifically provide guidance on the following aspects of project design: (a) identify specific
areas and customers who may be more disadvantaged and underserviced; (b) specify priorities of
customers that link to their willingness and ability to pay; (c) inform indicators for project
monitoring on beneficiary impact; (d) provide information to better target the awareness
campaign on reducing water usage; and (e) highlight preferences linked to improving the image
of the service provider. In addition, the study will inform activities in the sector, such as tariff
structure and payment procedures, which will impact project outcomes.
58. The study uses a mix of quantitative and qualitative data, supplementing interviews with
some focus group discussions across the different user groups. The methodology ensures that a
comprehensive set of criteria are used to cover (a) users of different income levels; (b) the four
different water sources; (c) categories of housing (house versus apartment block); (d) floor of
residence (top versus ground); (e) different geographical regions of the city; (f) views of
nonhouseholds, particularly businesses, on water services and tariffs; and (g) peak and low water
seasons.
59. The study will serve as a baseline to measure project impact, as well as to provide a
framework within which ongoing project impacts on customers are monitored. It is expected that
follow up data will be collected once or twice a year during each year of project implementation,
so the impact of project activities initiated in that year and the resulting changes in customer
satisfaction can be captured. The follow up studies are expected to be conducted in a shorter
17
period: they will focus only on specific issues and will target the users affected by specific
activities implemented in that period.
60. The final survey at the end of project will be more comprehensive to capture
improvements in customer satisfaction and overall project impacts, both those directly linked to
project-financed activities and those with indirect impacts resulting from the general
improvement of the utility and sector.
61. Involuntary Resettlement OP 4.12 is triggered. Since these detailed impacts will only be
known once project implementation commences and technical designs are finalized, the
possibility of land acquisition and restrictions in access cannot be ruled out at this stage. The
project has developed and disclosed a Resettlement Policy Framework (RPF), which will inform
all activities involving land acquisition, restriction of access to land or services and loss of assets.
The completed prefeasibility studies indicate that the project will largely be limited to
rehabilitation of existing structures. The planned filters at SAM and the water pumping station
and tanks at NAP will be built on the premises of DVK where there are no activities or
residences. However, as project design is further detailed, there is a possibility that some
construction may exceed available land and may have to take place on sites not yet identified.
Further, some land within residence compounds may have to be temporarily used or accessed for
works, such as excavation of trenches. In addition if sanitary protection areas need to be
established to avoid water source contamination at the water treatment plants, the identified areas
will need to be cleared of settlements (if any) and existing structures. Further, certain polluting
and quality threatening activities will be restricted (e.g., livestock access) in the designated
sanitary protection area. This activity will also include some mitigation measures, such as
installation of fences, septic tanks and drains.
62. The RPF identifies the possible impacts from project activities, describes the range of
potential impacts (temporary and permanent) to land use, access and structures, and specifies the
compensation rates and procedures for the same. Where there is a gap between national and
World Bank procedures, the latter will prevail for all activities financed under this project. The
RPF will serve as a screening device to ascertain if there will be any impacts resulting from
project activities. If any impacts are identified, the Borrower will develop relevant Resettlement
Action Plans as described in the RPF, which will detail the specific impact and compensation
and present it to the World Bank for approval. No civil works will commence until the World
Bank approves such plans. The RPF will be implemented by DVK with the support of the PMC
and with assistance from the Municipality who has authority on land acquisition issues in
Dushanbe.
F. Environment (including safeguards)
63. The project is qualified as category B and would support rehabilitation works equivalent
in nature to those of the predecessor DWSP on water supply systems (rehabilitation of pumping
station facilities and water reservoirs; renovation of the chlorination facilities and of rapid sand
filters; replacement of distribution network; and rehabilitation, replacement or installation of
production water meters), which are not expected to generate significant environmental and
social impacts. Potential adverse impacts relate to (i) inappropriate disposal of water treatment
sludge; (ii) safety hazards from the chlorination process; (iii) pollution by construction site run
18
off; (iv) disturbances during construction, including by dust, noise, vibration, access restriction,
closure of roads and increased traffic; (v) improper disposal of demolition debris; (vi) damage to
existing utility services during pipe repairs and installation; (vii) safety hazards from
construction activities; (viii) spillage of fuel and oil from construction; and (ix) damage to trees
and vegetative cover. At the same time, the project is expected to bring significant environmental
and health benefits, such as improvements in public health through better quality and availability
of treated water and improvements in the sustainability of raw water sources through reductions
in losses and wastage.
64. As the nature of the work to be financed under the project does not change compared to
DWSP, the current Environmental Management and Monitoring Plan (EMMP) for DWSP will
be applied. The document specifies required mitigation measures for the project activities that
are standard and widely used in construction projects. The EMMP stipulates all contracts for
construction works will include requirements for implementation of the specific measures, as per
EMMP provisions and good construction practices. Furthermore, daily control and monitoring of
construction works will be part of responsibilities of the PMC. The quality of drinking water
supply will be monitored according to national standards, using new laboratory equipment to be
financed by the project.
65. The project does not impact cultural property or natural habitats. The Borrower and DVK
are familiar with the World Bank's Safeguard Policies. The Bank team will continue to closely
monitor EMMP implementation, providing relevant assistance and capacity building. The
EMMP has been disclosed locally and in the InfoShop.
G. Other Safeguards Policies triggered (if required)
66. The project, as it predecessor DWSP1, continues to finance investments in rehabilitation
of water supply and sanitation infrastructure within the Amu Darya river watershed which
extends into Uzbekistan and Turkmenistan. Accordingly the project triggers O.P. 7.50
―International Waterways‖. The Bank has considered these aspects and is satisfied that because
of its rehabilitation and demand management focus the project will not (i) cause appreciable
harm to the other riparians as it will not adversely change the quality or quantity of water flows,
and (ii) it will not be appreciably harmed by the other riparians' possible water use. Thus an
exception to the notification requirements has been granted on the grounds that the project
involves rehabilitation or reconstruction of currently operating schemes (including the pumping
station and tanks at Napornaya WTP, which are required to replace decaying assets. The project
investments will not increase the volume of water abstraction, nor affect the rights of other users.
Further, the project aims to improve efficiency of water use and to substantially reduce
Dushanbe’s high water consumption rates.
H. Readiness:
67. This is a repeat project, the objectives and scope of which are defined and agreed with the
Client. The feasibility studies are very thorough in their technical and cost estimates. The PCU of
DWSP1 is drafting the TOR for the detailed engineering designs. The draft revision of the POM
to include updated financial management chapters was finalized before negotiations. The Client
19
also submitted their draft OPIAP. The task team is working with the Client on the preparation of
the PMC's TOR to accelerate its recruitment and selection will be completed by the end of 2011.
20
Fig. 1 Project Implementation Plan
A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
1 Preparatory Works/Tender Preparation
1.1 Preparation of ToR for the PMC and tendering
1.2 Preparation of the TOR for detail designs SAM filters
1.3 Preparation of TORs for design of pumping station and reservoir at NAP
2 Implementation Support
2.1 PMC hired
2.2 Tendering works for cleaning the water supply system
3.2 Feasibil ity Study, Designs, Tender Documents and tendering for SAM filters
4.2 Designs, tender docuemnts and tendering of NAP pumping station
5.2 Detailed Designs, Tender Documents and tendering for Chlorination Plants
6.2 Tendering of Laboratory Equipment
7.2 Tendering Phase for Procurement of Water Meters and Service Connections
8.2 Preparation of tech. spec. and tendering for SCADA
9.2 Supervision of Works
2.9 Audits
3 Component 1 -- Metering and Demand Management
3.1 Procurement and installation of Bil l ing Software
3.2 Procurement of consumption water meters
3.2 Installation of Water Meters and Service Connections
- Pilot Zone
- Groundwater Zones (SWW/KAF)
3.4 Procurment and installation of Production Meters
3.5 Installation of SCADA
4 Component 2--Water Quality and Efficiency Improvement
4.1 Maintenance Works for cleaning the water supply system
4.2 Construction of Filters at SAM Treatment Plant
4.3 Installation of rechlorination units
4.4 Reconstruction of NAP pumping station and tank
4.5 Water Quality Monitoring/Laboratory equipment
4.6 Procurment of hydraulic excavator
5 Component 3 -- Institutional Strengthening
5.1 Institutional assessment
5.2 Procurement of Software NIS/Hydraulic modelling
5.3 TA for water quality monitoring unit and Laboratory
5.4 TA for Operational Performance Improvement (Long-term)
5.5 TA for Operational Performance Improvement (Short term expert pool)
5.6 TA on SCADA and Hydraulic Modelling and pressure zones
5.7 Training
5.8 TA for Corporate Development and Finance
5.9 Development of a demand management strategy
5.10 Development of a metering and bil l ing strategy and program
5.11 Tariffs, planning and budgeting, Financial modelling
5.12 Support Accounting department
5.13 Implementing bil l ing and metering program
5.14 Capacity building in HR management
5.15 Customer Relationship Management
5.16 Support of Legal department
2012 2013 2014 2015
Year 2 Year 3 Year 4Preparation Year 5
E
F
F
E
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T
I
V
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Corporate Development & Financial Performance Improvement
Operational Performance Improvement
TasksN°Year 1
2011
21
Annex 1: Results Framework and Monitoring
TAJIKISTAN DUSHANBE SECOND WATER SUPPLY AND SANITATION PROJECT
Results Framework
Project Development Objective (PDO): Improve water utility performance and water supply services in selected areas of Dushanbe.
PDO Level Results Indicators*
Co
re Unit of
Measure Baseline
Cumulative Target Values**
Frequency
Data
Source/
Metho
dology
Responsi
bility for
Data
Collectio
n
Descriptio
n
(indicat
or
definiti
on, etc.)
YR 1 YR 2 YR3 YR 4 YR5
Indicator One: Water quality in
the network:
Parameter 1: Turbidity in the
network
Mg/l; 2009: 40%
of samples
comply
with the
standard
(MAC* is
2mg/l)
To start the
design of
the SAM
filters
To start
constructio
n of SAM
filters
To start
operation
of the
SAM
filters;
99% of
samples
comply
with the
standard
99% of
samples
comply
with the
standard
99% of
samples
comply with
the standard
Accessed
annually,
based on
daily
measureme
nts by
DVK
DVK
laborat
ory
DVK/
PMC
Improvement of
indicators is
subject to
successful
operation of
NAP filters,
construction and
operation of
SAM filters, and
partial washing
of the network.
Parameter 2: Residual chlorine
in the network:
% 2009: 98%
of samples
show
residual Cl
Design and
installation
of
rechlorinati
on
equipment
in the
network
Completion
and start up
of the re
chlorinatio
n
equipment
in the
network
99% of
samples
show
residual
Cl
99% of
samples
show
residual Cl
99% of
samples
show
residual Cl
Accessed
annually,
based on
daily
measureme
nts by
DVK
DVK
laborat
ory
DVK/
PMC
Note: sensitivity
of the test is
0,02 mg/l of Cl
concentration-
this is a
traceable
border.
The indicator is
subject to
installation of
rechlorination
systems and
general
reduction of
turbidity in the
network.
Parameter 3: Bacteriological
water quality:
% 2009: 96%
of samples
comply
Subject to
improveme
nt of water
Subject to
improveme
nt of water
99% of
samples
comply
99% of
samples
comply
99% of
samples
comply with
Accessed
annually,
based on
DVK
laborat
ory
DVK/
PMC
The indicators
are subject to
reduction of
22
with the
standard
(MAC* is 3
coli
forms/l)
treatment at
SAM and
NAP and re
chlorinatio
n in the
network
treatment at
SAM and
NAP and re
chlorinatio
n in the
network
with the
standard
with the
standard
the standard daily
measureme
nts by
DVK
turbidity in the
network and
presence of
residual Cl in
the network.
Indicator Two: Customer
satisfaction with water supply
services
In the absence of relevant technical data on the
quality of water supply services in DVK (due to the
lack of relevant technical means), the selected
parameters and characterizing customer’s opinion on
water quality were selected as indicators to measure
the project progress.
Parameter 1: Improved water
quality (in general) - Percentage
of customers, satisfied with water
quality
% 2010 TBD
by the
Customer
Satisfaction
Survey,
conducted
under the
DWSSP 1
No changes
are
excepted
No changes
are
expected
Improved Improved Improved Measures
annually
starting
year 3 of
the project
Survey
by
PMC/
DVK
DVK/
PMC
Note: the target
value will be set
after the
baseline will be
determined
under the
DWSSP 1.
Parameter 2: Availability of ws
services- Percentage of customers
with 24h of ws service per day
% 70% of
population
have 24h
per day
access to
ws
services; to
be revised
based on
the results
of 2011
Customer
Satisfaction
Survey
(DWSSP) 2
No changes
are
excepted
No changes
are
expected
Improvem
ents due
to
installed
meters
Improveme
nts due to
installed
meters
90% of
customers
receive 24h
services; the
final target
will be
revised after
hydraulic
model is in
place
Before the
start of the
project;
progress is
measured
in the
middle and
at the end
of the
project
Survey
by
PMC/
DVK
and
data
from
hydrau
lic
model
DVK/
PMC
Hydraulic
model will be
developed by
the project.
Indicator Three: Improvement of
financial performance of DVK
Parameter 1: Cash operating
ratio has improved
ratio 2009: 1,07
Setting of
project
accounts,
no target is
imposed
To reach 1 Not
higher
than 0,9
Not higher
than 0,9
Not higher
than 0,9
Annually PMC/
DVK
DVK/P
MC
Financial
working ratio of
total cash
operating
expenses
(excluding
interest and
other charges
on debt) to total
cash operating
23
revenues;
ideally should
be less then 1;
improvement of
ratio means
increase of
revenues (if
revenues grow
faster then
expenses).
Parameter 2: Number of
residential customer registered
and billed.
Num
ber
2009:
154,000
residential
customers
or 340 495
people
Intensive
inventorying
of customers
should take
place
By the end of
2011 the
baseline
number
should be
increased to
cover reflect
the actual l
population of
Dushanbe
(plus the
service area
in Rudaki
rayon)
To reach
actual
population
of the DVK
service area
To reach
actual
population
of the DVK
service area
To reach
actual
population
of the DVK
service area
Annually PMC/
DVK
DVK/P
MC
Officially,
population in
Dushanbe is
720,000 people,
plus the
population in
the service area
in Rudaki rayon
should be
reflected.
The baseline
data are taken
from the
feasibility study
report.
Parameter 3: Accounts
receivable as % of revenue
% 25% Gradual
decrease
towards
15%
Gradual
decrease
towards
15%
15% 15% 15% Annually PMC/
DVK
DVK/P
MC
Reaching the
target by the
end of the year
3 is subject to
overall
improvement of
water quality in
the system.
INTERMEDIATE RESULTS
Component 1: Demand management
component
Intermediate Result indicator 1: Number
of household connections impacted by
the project: (Installation of meters and
rehabilitation of service connections in
the pilot area)
core
in
dic
ato
r
Num
ber of
meter
s
instal
led
2887
individual
residential
meters;
about 700
non
residential
consumers
are billed
on the pipe
Preparation
of the
component
Implementa
tion is in
progress
Implemen
tation is in
progress
Implementa
tion is in
progress
76,500
meters
installed in
ground
water area
and about
1500 service
connections
are
rehabilitated
In
accordance
with
project
implementa
tion
schedule
PMC/
DVK
DVK/P
MC
Nonresiden
tial
consumers
should be
encouraged
to install
meters at
their own
expense.
Service
24
diameter
basis
connection
is from the
network to
the
apartment
building.
Intermidiate result indicator 2:
Installation of SCADA and NIS with
technical assistance
Syste
ms
instal
led
and
functi
oning
Partial
hydraulic
modeling
in pilot
zones only
Preparation
of technical
specification
s
Procureme
nt and
installation/
training
TA and
training
continued
System in
operation
System in
operation
In
accordance
with
project
implementa
tion
schedule
DVK DVK
Component 2: Water quality and
reliability improvement
Intermediate Result Indicator1:
Improvement of water turbidity at the
outlet of SAM
% 2009: 90%
of samples
do not
comply
with the
standard
(MAC is
2mg/l)
To start the
design of
the SAM
filters
To start
constructio
n of SAM
filters
To start
operation
of the
SAM
filters;
99% of
samples
comply
with the
standard
99% of
samples
comply
with the
standard
99% of
samples
comply with
the standard
Accessed
annually,
based on
daily
measureme
nts by
DVK
DVK
laborat
ory
DVK/
PMC
Intermediate result indicator 2:
Improvement of water turbidity at the
outlet of NAP
% 2009: 70%
of samples
do not
comply
with the
standard
MAC
(2mg/l);
At the end
of the year
filters are
in
operation,
99% of
samples
comply
with the
standard
99% of
samples
comply
with
standard
MAC
99% of
samples
comply
with
standard
MAC
99% of
samples
comply
with
standard
MAC
99% of
samples
comply with
standard
MAC
Accessed
annually,
based on
daily
measureme
nts by
DVK
DVK
laborat
ory
DVK/
PMC
Illustration:
max daily
average in
2009 was
8,6 mg/l.
Intermediate result indicator 3:
Operational improvement of DVK:
Parameter 1: Per person water
production in the system
m3/p
erson
2009: 938
lcd
No changes
are
expected
No changes
are
expected
About
40% of
population
will
reduce
their
Same as for
year 3;
To be
reduced by
50% for
these 40% of
the
population
Annually DVK/
PMC
PMC 2009:
246700
000m3 per
about
720000 p-n
(without
25
consumpti
on by
50% as a
result of
metering;
system
wide
reduction
by 20% is
expected
who will be
metered;
system wide
reduction of
consumption
by 20% is
expected
Rudaki
rayon).
Parameter 2: Yearly energy
consumption (only ws services)
kWh 2009 (ws
system
only): 112
037 073
kWh
No changes
are
expected
No changes
are
expected
To be
reduced
by 10%
systems
wide
Same as for
year 3
To be
reduced by
10% systems
wide
Annually DVK/
PMC
PMC Total
energy
consumptio
n 2009 (ws
and
sewerage):
116 257 21
0 kWh.
Intermediate Result indicator 4:
Construction and commissioning of
SAM treatment plant
Fact
of
opera
tion
2010: not
available
Design of
the filters
Start of
constructio
n of filters
at SAM
Start of
the
operation
of filters
at SAM
Filters are
in
operation
Constructed
and in
operation
In
accordance
with
project
implementa
tion
schedule
PMC/
DVK
PMC
Intermediate Result indicator5:
Introduction of rechlorination systems
in the network
2010:
New
disinfection
(Cl) system
at SAM
Preparation
of the
component;
Implementa
tion has
started
Implemen
tation is
completed
3 reservoirs
in the
network
stations
have new
re-
chlorinatio
n
equipment
3 reservoirs
in the
network
stations have
new
rechlorinatio
n equipment
In
accordance
with
project
implementa
tion
schedule
PMC/
DVK
PMC 3 reservoirs
(zone III,
Bahar and
Suhrob).
Intermediate Result indicator 6: Supply
of modern water testing laboratory
equipment to DVK
Fact
of
suppl
y and
com
missi
oning
Current
outdated
equipment
used by
DVK
laboratories
Procureme
nt is
prepared
Equipment
is
purchased;
New
equipment
is
functionin
g;
New
equipment
is
functioning
New
equipment is
functioning
to support
required
water testing
In
accordance
with
project
implementa
tion
schedule
PMC/
DVK
PMC New
equipment
is aimed at
the support
of the
existing
testing.
Intermediate Result Indicator 7:
Reconstruction of Napornaya pumping
station and tanks
Fact
of
opera
tion
2010:
reached its
limit
Preparation
of designs
Tenders
and works
begin
Works
continued
commissio
ning
New
pumping
station and
tanks are in
operation
In
accordance
with
project
implementa
PMC/
DVK
PMC
26
tion
schedule
Component 3: Institutional
strengthening
Intermediate Result indicator1:
Improvement in billing
Fact
of
impro
veme
nt
Billing
software is
not used by
DVK; the
billing is
based on
norms and
assumption
s
Setting of
accounts
and transfer
to billing
systems;
Billing is in
operation
Billing is
in
operation
Billing is in
operation
Billing is in
operation
In
accordance
with
project
implementa
tion
schedule
PMC/
DVK
PMC
Intermediate Result indicator 2.
Completion of the water supply master
plan
Fact
of
comp
letion
Not
developed
in DVK
Works
have
started
Works are
in progress
Works are
in
progress
State of the
progress
Water
supply
master plan
is completed
In
accordance
with
project
implementa
tion
schedule
PMC/
DVK
PMC
Intermediate Result indicator 3.
Completion of training in monitoring
of energy costs and energy audit
Fact
of
comp
letion
DVK
doesn’t
have the
methodolog
y for
conducting
the energy
audit
No changes
are
expected
Training
and audit
have
started
Training
is in
progress
Completed
and in use
by the staff
of DVK
Completed
and in use
by the staff
of DVK
In
accordance
with
project
implementa
tion
schedule
PMC/
DVK
PMC
*Please indicate whether the indicator is a Core Sector Indicator (see further http://coreindicators)
**Target values should be entered for the years data will be available, not necessarily annually.
1. This annex is divided in two parts: Part A ―Detailed Description of Components,‖ and
Part B ―Operational Performance Improvement Action Plan.‖
Annex 2 - PART A: Detailed Components Description
2. This section discusses the tasks and investments in each component, including
implementation aspects.
Component 1. Metering and Demand Management (US$ 7.62 million of which IDA US$
5.97 million): The component will finance consumption metering and bulk metering of
water, for increased revenue, reduced wastage, and better tracking of losses, including: (i)
supply and installation of 76,500 residential meters (i.e. approximately 46% of DVK users)
and installation of 1,500 apartment building master meters in selected areas of the city; (ii)
rehabilitation of 1,500 apartment building service connections; (iii) supply and installation
of bulk flow meters at water production facilities; (iv) supply and installation of a Network
Information System (NIS); (v) communication strategy and public awareness campaigns to
promote metering and demand management; (vi) installation of SCADA system.
Subcomponent 1a: Consumption Metering (partial coverage): The project will finance
procurement and installation of 76,500 residential meters, allowing metering of about 46
percent of DVK's individual customers. About 1,500 master meters are already procured and
available to DVK will also be installed to measure volumes entering apartment buildings
before distribution to individual apartments, which will cover about 50 percent of
Dushanbe’s apartment buildings. The project will also provide for the any required
rehabilitation of the master service connections linking the apartment buildings being
metered to the network. The very high water consumption in Dushanbe is due to water
wastage, undeclared consumption by customers, and water losses within the buildings and
house connections. It is important to note, however, that little information is available
regarding the quantity of water lost and its distribution to the above mentioned loss and
wastage components. According to DVK’s assessment (GWCC report 2010) about 77
percent of the total water losses are attributable to service connections and internal
plumbing. Per capita consumption measured at apartment block buildings amounts up to
1,000 liters/capita/day. As part of a demand management program, the project will thus
tackle the difficult problem of reducing losses associated with leaks in the common piping in
apartment buildings, upstream of individual apartment meters and plumbing. Once losses in
common areas are measured, the Municipality is prepared to make the apartment building
associations and residents accountable to pay for leaked volumes or to repair leaking pipes
in their building common areas.
Subcomponent 1b: Bulk Metering: To address the water balancing in the Dushanbe system,
the project will install flow meters at all four production stations (NAP, SAM, KAF and
SWW) so that DVK can start measuring what is produced and correlate this with distributed
volumes to better assess water losses.
28
Subcomponent 1c: Communication and Public Awareness Campaign: Installation of meters
and the subsequent improvement in billing and collection under the project will require a
change in consumer habits. Improved water supply service will result in an increase in
consumption levels, which will require public awareness campaigns promoting good water
consumption and hygiene practices. The project will finance the development and
implementation of a communications strategy for DVK that will aim to promote DVK’s
image in improving water services in Dushanbe. As part of this effort, the project will
finance the establishment of a DVK website to improve transparency and public access to
information on current and on-going projects undertaken by the utility and to manage pubic
discontentment with regard to increased tariffs, etc. This subcomponent will also finance
multimedia awareness campaigns.
Subcomponent 1d: Installation SCADA with associated Technical Assistance. In order to
optimize the metering and demand management component the project will finance the
installation a SCADA system. This hardware will be accompanied by specific TA provided
by the PMC to build the capacity of DVK to operate and maintain the systems installed.
Component 2. Water Quality Improvement (US$ 6.27 million of which IDA US$ 4.91
million): The component will support system upgrades for improved quality of water,
including: (i) partial renewal of filtration capacity at Samotechnaya WTP (SAM); (ii)
network cleaning; (iii) installation of in-network re-chlorination systems; (iv) equipment for
water quality monitoring; (v) reconstruction of pumping station and tanks at the Napornaya
WTP (NAP); and (vi) procurement of maintenance equipment.
DVK faces chronic difficulties in providing potable water to its customers because of the
lack of working filtration capacity at the SAM and NAP water treatment plants. While the
situation has improved with the rehabilitation of SAM sedimentation ponds and the pending
commissioning of NAP filters under DWSP, high water turbidity associated with storms can
still get through the treatment plants and enter the network, resulting in ―brown‖ water being
distributed to clients. These accidents have historically also led to the silting of some areas
of the network and of most network storage tanks. The situation must be corrected not only
to ensure potable water service for customers, but also to avoid blockage of newly installed
meters by silt and sand particles. The project, therefore, will clean by flushing selected parts
the water supply network and the reservoirs, which silted up during previous years with the
high content of suspended solids that existed when SAM and NAP sedimentation and
coagulation ponds were out of operation. During the past two years, only a small part of the
network and reservoirs has been cleaned due to DVK's limited resources. Cleaning of the
network is a compulsory step before introducing demand management, as water meters
cannot be installed in water with a high content of suspended solids. Chlorination can only
work effectively to improve water quality if the network has been cleaned. Therefore,
outsourcing the cleaning works to a contractor as soon as possible is recommended.
Subcomponent 2a: Renovation of SAM: Although water quality has been improved
considerably at the SAM outlet during the past five years (renovation of sedimentation pond,
construction of new chlorination plant), the key element in the treatment chain, namely the
29
rapid sand filter station has not yet been renovated. High turbidity at SAM (20 mg/l) is due
to (i) poor performance of coagulation and sedimentation treatment step and (ii) lack of
operational rapid sand filters. The high turbidity rates are causing (i) high chlorine
consumption; (ii) ineffective disinfection with related health risks for consumers; (iii)
production of carcinogenic chlorine by-products; and (iv) injection of suspended solids into
the distribution system, causing tank sedimentation, pump, valve and meter dysfunctions.
Rapid sand filter units are clogged, and buildings (for example, roofs) are in poor structural
condition. Automation equipment and valves have been dismantled (IDB financing) but
have not been replaced; IDB decided not to continue financing of this investment
component. Metering and demand management programs are expected to substantially
reduce water consumption within the next decade. Accordingly, it is expected that part of
the existing production capacities (SAM, NAP, KAF, SWW) might no longer be required to
their full extent. There is, however, an imperative need to improve water quality from SAM
as early as possible to cover Dushanbe’s short- and medium-term water demands. As SAM
is the main production unit in Dushanbe and has the advantage of supplying water by gravity
to most of the supply area, DVK does not intend to cease its operation in the near future. It is
noteworthy that this investment component will enhance the demand management
component and allow more meters to be installed, as high turbidity in the network would
block consumption water meters. In summary, the SAM renovation is needed to improve
water quality and is an indispensable accompanying measure for metering and water
consumption reduction. Because of the uncertainty about the evolution of water demand in
Dushanbe, however, only 50 percent of SAM filtration capacity will be renewed.
Subcomponent 2b: Network Cleaning: DVK estimates that about 50 percent of the total
network (which corresponds to a length of about 370 km) has to be cleaned by flushing and
other hydraulic or mechanical means. Discrete segments of the network will be cleaned until
the purged water meets relevant turbidity and color criteria. This will apply mainly to
network sections that are supplied with surface water treated in SAM and NAP. An
estimated nine reservoirs with a total capacity of about 60,000 m³ and an estimated quantity
of sludge of 12,000 m³ also have to be cleaned. This subcomponent should include all
necessary auxiliary works for cleaning of about 40 percent of these pipes and reservoirs,
such as dismantling of valves, cutting and welding of dead-end pipes, sludge transport to a
landfill, etc. The works should be implemented with full mitigation of service disruptions,
including effective advance communications to the affected neighborhoods, streets and
customers, as well as effective management and disposal of liquid and solid waste to avoid
any flooding or soiling of streets or properties.
Subcomponent 2c: In-network Rechlorination Systems: This component will finance the
installation of secondary chlorination systems at selected distribution storage tanks to ensure
adequate residual chlorine levels are maintained in the distribution system. The systems will
rely on robust chlorinated lime dilution and mixing technology with none of the risks
associated with liquid or gas chlorination.
Subcomponent 2d: Water Quality Monitoring Equipment: This subcomponent will provide
for mobile water quality monitoring crews established to sample and test water quality
parameters in situ in the network, as well as laboratory equipment for DVK facilities.
30
Subcomponent 2e: Reconstruction of the pumping station and tanks at Napornaya WTP. The
existing pumping station in general is in very poor condition and has to be abandoned. The
building was constructed in 1932 and is in very bad shape (all civil works and in particular
the roof). The current structural condition of the building does not allow renovation of the
building. For this reason it is proposed to construct a new building at the location of the
existing warehouse. Pumps and other electromechanical equipment have already been
procured under DWSP 1. In addition to the new pumping station, the location of which
determines the new hydraulic layout, two new feeder reservoirs with a volume of 2,000 m³
(due to seismic regulations the second reservoir is required as reserve capacity) will be
necessary as equalizing tank between the filter building and the pumping station. One of the
existing reservoirs (1000 m³ and 500 m³) will be used to provide additional storage volume
in emergency cases.
Subcomponent 2f: Procurement of hydraulic excavator. The sedimentation ponds at SAM
and NAP station require regular cleaning but only SAM station has hydraulic excavators for
removal of sludge in the sedimentation pond. Manual cleaning is difficult to perform and
carries substantial health risks for workers involved (skin and respiratory infections due to
coagulants). It is a priority for DVK to acquire an excavator to be deployed at NAP WTP.
Component 3. Institutional Strengthening and Capacity Building (US$3.34 million of
which IDA US$3.34 million): The component will finance activities to build institutional
capacity and improve utility performance of DVK, which includes (i) Carrying out an
assessment of DVK’s organizational and capacity-building needs; (ii) Installation of modern
accounting, billing and water revenue collection systems; (iii) Provision of technical
assistance to the management of DVK to improve its financial performance; (iv) Provision
of technical assistance, and carrying out of studies to improve the water supply operations of
DVK, including studies for hydraulic modelling, and for design of pressure zones and
SCADA system; and (v) Implementation of training programs for DVK staff.
While the PMC will play a direct managerial and operational role in project implementation,
it will also oversee the delivery of the following subcontracted tasks under this component:
development of detail design, institutional assessment and staff training.
Subcomponent 3a: Institutional Assessment will be carried out to evaluate the current
capacity of DVK, its organizational structure and the operating environment influencing its
current non performance in delivering water service efficiently. This activity will include the
hiring of an international consultant to perform the assessment and recommend options for
DVK reorganization, modernization of management and operating procedures and
information systems, changes in staffing needs based on a functional review, improvements
in monitoring and evaluation, and options for mainstreaming performance incentives. The
assessment will also review compensation structures and performance incentive options. The
institutional assessment will build on the findings and recommendations of the Governance
Assessment of DVK carried out by the World Bank (attached as Annex 8).
31
Subcomponent 3b: Modernization of Accounting and Billing will be pursued through (i)
implementation of the automated system to assist DVK to effectively manage its customer
database, enhance its billing and collection processes for all customers, including those
provided by vendors of billing, collection and kiosk payment services, and (ii) the upgrade
and modernization of automated accounting system at DVK with built-in controls and
enhanced functions to meet operational requirements of improved business processes due to
the introduction of the automated billing/collection system and ensure reliability and
timeliness of financial reporting. Implementation of the subcomponent C1 will go along
with a functional review of DVK’s billing and collection operations and staffing.
Subcomponent 3c: Technical assistance (TA) for corporate development and financial
performance improvement includes support in the following areas: (i) corporate
development and finance; (ii) accounting department; (iii) accounting and customer
service/billing software; (iv) planning and budgeting of tariffs; (v) billing and metering
program; (vi) human resources functions; (vii) customer relationship management; and (viii)
measures to improve transparency, accountability and financial autonomy. This activity will
also pilot instituting performance-based incentives (monetary and nonmonetary) at DVK to
retain good staff, encourage better staff performance and improve overall DVK operational
performance. DVK modernization will be pursued through the reorganization of
management and operational capacities, modernization of procedures, promotion of utility
management performance, staffing of new operational needs, and outsourcing of some
utility functions.
Subcomponent 3d: TA for operational improvement includes i) resident TA for operation
and maintenance performance improvement; ii) hiring of short-term specialists for TA on
specific technical needs, i.e. hydraulic modelling, pressure zones and SCADA system
design.; iii) developing an assessment of seismic risks for SAM; iv) TA for a process
diagnostic and optimization study of the SAM coagulation/sedimentation ponds.
Subcomponent 3e: Staff Training will be performed by highly qualified institutional
development consultants. A training program will be developed and delivered based on the
results of the institutional assessment. The program could include on-the-job training,
technical training, and knowledge sharing with performing utilities either through video
conferences and/or study tours. Staff will also receive training on energy efficiency, water
quality monitoring, communications and customer service, among other things. To this end,
the training measures will contribute to improved operational performance (reduction of real
water losses, energy efficiency, proactive operation and maintenance, etc.) and to improved
service levels (water pressure, availability and reliability of water supply, water quality).
As a corollary activity to the project, the Bank will also facilitate the development and
funding of a South-South knowledge transfer and capacity-building partnership between
DVK and the St Petersburg Vodokanal.
Component 4. Implementation Support (US$ 1.78 million of which IDA US$ 1.78
million): The component will provide project Implementation support including (i) design
32
and supervision of works; (ii) project implementation unit operating costs, and (iii) annual
project audits.
The following tasks are included in this component:
• Supervision of network cleaning operations
• Engineering and supervision for SAM
• Tendering and supervision for demand management component
• Annual project audits
33
Annex 2 - Part B
Operational Performance and Improvement Action Plan (OPIAP)
1. Project investments may not suffice to achieve lasting performance outcomes unless
DVK organization and operations are also improved. In the absence of a contractual public-
private partnership (PPP) mechanism, such transformations cannot be directly affected by the
PMC but must be implemented by DVK and the Municipality.
2. DVK and the Municipality have thus agreed to develop and commit to an Operational
Performance Improvement Action Plan (OPIAP).
3. The following is a preliminary draft OPIAP outline based on commitments formulated by
DVK with key steps or tasks organized as strategic tasks. The Municipality and DVK will
provide management, staff and operating budgets for plan implementation. IDA will finance
investments and technical assistance. The indicative OPIAP outlined below remains to be
completed with other steps and tasks to be determined by the Municipality and DVK and
detailed with milestones, dates, responsibilities, resources needed and funding sources.
4. Submittal of an OPIAP outline by the Municipality and DVK, which is acceptable to the
Bank, will be a condition to engage IDA grant negotiations. The OPIAP will be adjusted,
detailed and finalized at the start of the project with the help of the PMC and periodically
updated as part of implementation. Once adopted, the OPIAP will be used to guide and monitor
DVK progress.
34
April 11, 2011 DRAFT
Second Dushanbe Water Supply Project
OPERATIONAL PERFORMANCE IMPROVEMENT ACTION PLAN (OPIAP)
Submitted for the development of SUE «Dushanbevodokanal»
Actions / Activity Responsible Implementation
date6
Description of follow-up actions / Comments
(i) Financial recovery of the DVK 1.1 Strategy for water use
management DVK, with PMC
support November 2011-
February 2012 1. Assessment of current situation, 2. Development of goals and objectives, 3. Development of strategy for achieving the goals and objectives, i.e.
installation of 65000 meters, master meters throughout all stations
of water production, rehabilitation of connection to house water
supply systems, supervision of works, operation and maintenance. 4. Procurement and installation of Network Information System (NIS)
with subsequent training. 5. Development and implementation of public information campaigns. 6. Assessment of resources for implementation. 7. Timeline for implementation.
1.2 Institutional assessment of
DVK Municipality, DVK
with PMC support October 2011-April
2012 1. Assessment of DVK management structure 2. Assessment of DVK performance and operations 3. Analysis of corporate culture of DVK 4. Analysis of performance incentives. 5. Analysis of HR management.
6. Assessment of costumer relations and public information 7. Assessment of resources required for implementation of
improvement strategy. 8. Timeline for implementation.
1.3 Technical support for
improving financial efficiency DVK, with PMC
support December 2011-
December 2013 1. Enhancement of financial management control system. 2. Development of a program aimed at reducing production costs. 3. Analysis of the causes of losses (physical and commercial) of the
6 Assuming that the Project becomes effective in August 2011.
35
enterprise, and development of action plan for reduction; 4. Develop and implement training programs for financial
improvement. 1.4 Tariffs Municipality, DVK
with support by
PMC
Analyses and
review every 6
months
1. Review of tariffs for all categories of consumers in order to prevent
over-consumption; 2. Optimization and update of structure of tariffs towards reduction of
water consumption (e.g. block tariffs). 3. Training of DVK staff to use, update and optimize the new tariffs
structure. 1.5 Implementation of the billing
and collection system
DVK, with PMC
support January 2012 -
December 2012 1. Inventory of consumers and registering newly identified
subscribers. 2. Purchase and installation of an automated payment system for DVK
by local company; 3. Procurement and implementation of new billing software,
accompanied by relevant training package; 4. Upgrade and modernize the customer database (including the
installation of new water meters). 5. Training for controllers and operators.
1.6 Support of Accounting
Department - Reform of accounting
system; - Systematization of
information; - Recover Lost Data (bad
debts); - Introduction of modern
methods of accounting and
reporting; - Automation system.
DVK, with PMC
support November 2011-
December 2015 1. Reorganization of financial management structure of the DVK. 2. Restructuring of financial management staffing scheme. Staff
development through trainings, certifications; 4. Develop and implement a system of performance rewards for
employees; 5. Setting service standards for the preparation of financial records and
financial statements. Control over the implementation deadlines; 6. Ordering the accounting system - the constant monitoring, careful
checking and rechecking reflect transactions in the account; 7. Development, approval and conformance of documents; 8. Rechecking of all analytical data accounting, ordering arisen
deviations and alignment with the necessary adjustments in
accordance with the data of analytic accounting and the ledger; 9. Full inventory of assests and fixed assts. 10. Based on the existing previously installed software 1C: Enterprise
7.7 introduced an updated version of 1C: Enterprise 8.0. 11. Continuation of training of employees of the enterprise accounting
under IFRS;
36
12. Support for accounting department. Short-term experts on specific
tasks (i.e., specialists in learning to use the software) should support
the company in improving the overall efficiency of the department. 13. Annual independent audit of projects and enterprises in the
submission of audit reports to the World Bank. 1.7 Development of human
resources capacity
DVK, with PMC
support June-July 2012 follow up activities
between January
2013- February
2015
1. Develop recommendations for improved management of human
resources; 2. Develop short, medium and long term strategies and plans for
capacity building to solve the urgent need to improve the capacity of staff of DVK. 3. Introduction salary schemes and incentives toward attracting and
retaining qualified staff. 4. Training
(ii) Improvement of Customer Service and Customer
Relationship
2.1 Managing relationships with
customers (including
consumer surveys and legal
support).
Municipality, DVK,
with PMC advice January 2012-
December 2013 1. Develop of recommendations for improving the management of
relations with consumers. 2. Develop short, medium and long-term strategy to address existing
weaknesses. 3. Capacity building to carry out consumer surveys regularly. 4. Strengthening of the legal department. 5. Training employees in professional approach with consumers. 6. Improve call center for receiving account/bill inquiries. 7. Improve call-in system to receive calls for service problems. 8. Report on changes in service and image of the company
(information campaigns, logo, website, uniform of controllers) 2.2 Public communication
strategy
Municipality, DVK,
with consultant
assistance
January 2012-
December 2015 1. Develop communication strategy to inform customers of:
DVK recovery goals,
New modernized billing/collection/metering practices
Investment program for water quality improvement
Service interruptions due to works
DVK news
etc.. 2. Establish DVK website 3. Conduct periodic customer surveys to assess the improvement of
service and of customer satisfaction
37
4. Communicate to the public results of service and performance
improvements (e.g. water quality, pressure, service interruptions, leaks
repaired, meters installed). (iii) Improving Water Supply Services 3.1 Reconstruction of filters on
Samotechnaya water station DVK with support of
PMC September 2011-
December 2013 1. Preparation of surveys , designs and tender documentation; 2. Tender; 3. Project Implementation; - demolition of existing nonfunctioning rapid sand filters; - Construction of new rapid filters; - supervision of works; - commissioning and operation.
3.2 Cleaning network and
reservoirs DVK and
Municipality with
support of PMC
September 2011-
June 2013 1. Survey and detection of the most silted sections of water supply
network and reservoirs; 2. Preparation of technical specifications, scope and tender documents 3. Tender; 4. Clean-up works; 5. Supervision of works.
3.3 Re-chlorination DVK with support of
PMC March 2012-
March 2013 1. Survey and preparation of technical specifications for equipment re-
chlorination and tender documents for the 5 reservoirs; 2. Tender; 3. Purchase and installation of equipment; 4. Supervision of works; 5. Exploitation.
3.4 Water quality equipment DVK with support of
PMC October 2012-
February 2013 1. Determination of the required laboratory equipment; 2. Preparation of specifications and tender documents; 3. Tendering and procurement of equipment; 4. Application.
3.5 Training of DVK staff to
operate and maintain the new
installations
DVK with support if
PMC September 2012 –
June 2014 1.Training on O&M of filters 2. Training on O&M of re-chlorination 3. Training on water quality monitoring 4. Training on O&M of water meters
3.6 Technical studies DVK with support
with PMC September 2011-
December 2013 1. Study for optimization of coagulation and sedimentation process at
SAM. 2. Study of seismic risk assessment & mitigation at SAM
M-L Public discontent with meter-based billing, and increased tariffs, and service interruption (while rehabilitating works under the project). DVK employees and managers may resist operational, management and administrative changes, and unions may aggravate the situation. Qualified staff may leave in the face of these changes, especially with existing low salaries.
Project design includes focused intervention to ensure Regular Social Analysis and Customer Satisfaction Survey (SACSS) will be carried out to monitor the social situation and to prepare adequate measures. The project includes financing of public information campaigns and focused interventions to ensure effective rehabilitation of assets with limited disruptions to service. The project aims at strengthening the complaints and dispatch center in DVK. The selection of target communities to be covered under the limited scope of the project is based on technical criteria, while the identification and monitoring of potential vulnerable sub-groups is done though social analysis and follow up surveys As part of the OPIAP the municipality and DVK will have to commit to instituting staff incentives including carrying out a Compensation Review.
Implementing Agency Risks
High Implementation may fall behind schedule due to weak managerial strategic planning, implementation capacity at DVK.
The project will benefit from the services of a project Management Consultant internationally recruited, including TA and CB activities. Smooth transition between PCU and PMC will be monitored. As project
7 This is the version that should be used for Negotiations and submission for Board Approval.
53
implementation progresses gradual transfer of managerial responsibilities from PMC to DVK.
Project Risks
Design
Medium- I
Any backtracking or delays on improvements to the financial operations of the vodokanal may jeopardize or delay the rebounding of the financial health of the vodokanal, disappoint officials, and risk achievement of the financial sustainability objective. Demand management component is new for the country and needs further discussion with Client. There may also be public discontent with the meter installation and introduction of billing. Project may face delays and cost overruns before meeting its objectives.
Actions to ensure improvements in the billing and collection received support from all levels of Government and activities to address them (complete inventory of customers, software and mechanisms to improve billing and collection among others) are scheduled to be accomplished in the first year of the Project. These measures will be supported by public information and awareness raising. i) Studies will be carried out to better define and design demand management (DM) activities. ii) Supervision team will include experts experienced in water DM and utility capacity building. iii) Implementation consultation will be in place to assist with project implementation unlike DWSP1. iv) Institutional component will finance communication strategy and public awareness campaign. The hired PMC should jump-start capacity building actives. While the World Bank – and possibly other donors- will continue the dialogue with the GORT to strengthen the utility.
Social and Environmental
Low
i) Unexpected social opposition to the water demand management plan may result in decrease or reversal of Govt. commitment to demand management. ii) Risk that perhaps some vulnerable groups will be negatively impacted. The Project risks (category B) are linked to short term
A Social Analysis and Customer Satisfaction Survey (SACSS) is being carried and preliminary data is expected prior to Negotiations. Vulnerable groups will be captured under this survey. In addition, annual CSSs will be undertaken during the life of the project An awareness campaign and consultations with the stakeholders including local NGOs and CSOs will be included in project design. The project will begin with improving billing and collection, before altering the tariffs structure. This with the aim that those who can, and currently do not, start to pay. Further, the project will ensure that the applicable safety net for the most vulnerable apply, so that hardship risk is mitigated for these groups. EMMP provisions/measures will guide all contracts for
54
environmental impacts related to reconstruction and rehabilitation. Stipulated mitigation measures will be not implemented and monitoring activities could be not adequate.
construction works. Utility will monitor and control construction works The quality of drinking water supply will be monitored according to international and national standards. The WB team will closely monitor EMMP implementation, providing relevant environmental and social safeguards capacity building and assistance. DVK will develop and have the Resettlement Policy Framework agreed with the Bank.
Program and Donor
Low Unavailability of parallel financing for the PIP would reduce project’s impacts. Delayed/differed entry of other donors may negatively affect synchronization of activities
The project has been thoroughly fine-tuned as a stand-alone operation to strike a balance among priorities. The comprehensive feasibility study allows clear division of intervention, in a way that can facilitate a modular approach even at different times. Coordination with other potential donors is continued through frequent exchanges of information.
Delivery Quality Medium-I GORT fails to improve its billing and collection, and later to enforce a tariff policy compatible with DVK’s financial viability and demand management goals. Contract management is still a challenge.
Team is having on-going discussions with the Municipality and GORT. Study tour to St. Petersburg vodokanal for senior GORT and Municipal managers is being organized in summer 2011. (iii) Water Sector note was prepared and discussed with GORT.
Overall Risk Rating at Preparation
Overall Risk Rating During Implementation
Comments
M-I M-I
55
Annex 5: Implementation Support Plan
Strategy and Approach for Implementation Support
1. The strategy for implementation support (IS) has been developed based on many years of
experience gained during preparation and implementation of the DWSP1. This project will
require effective and robust management for it to achieve its development objective. To support
a weak implementing agency, the project design envisions an internationally recruited Project
Management Consultant (PMC), which will be a firm of national and international experts
contributing to project implementation from inception until the end. The IS will be supported by
the highly decentralized staff located in country, thus offering better opportunities for more
frequent field visits and daily interaction with the counterparts.
2. Technical: The World Bank will do a technical review of the procurement packages
(most expected to be ICBs for works, goods and consulting services) and will follow up with
technical review missions on a regular basis.
3. Procurement: Implementation support will include a) provision of support to DVK
capacity development; b) reviewing procurement documents and providing timely feedback to
DVK and the PMC; c) providing detailed guidance on the Bank’s Procurement Guidelines to
DVK and PMC; and d) monitoring procurement progress against the detailed procurement plan
through the two supervision missions are expected to take place per year, during which ex-post
reviews will be conducted for the contracts that are not subject to Bank prior review.
4. Financial Management: As part of its implementation support missions, the World Bank
will conduct risk-based financial management supervisions, initially after every six months and
thereafter at appropriate intervals, depending on the level of assessed risk. These will pay
particular attention to (i) project accounting and internal control systems; (ii) budgeting and
1. The Republic of Tajikistan is to receive a Grant from the International Development
Association (IDA) toward the cost of the Second Dushanbe Water Supply Project (DWSP2). The
overall objective of the project will be to improve water supply service delivery and efficiency in
selected areas of Dushanbe. This will be achieved through (i) urgent reconstruction and
rehabilitation works; (ii) installation of meters, leakage reduction and demand management
programs; and (iii) utility capacity building for improved customer service, HR management and
investment planning. As part of preparation (and subsequent implementation) of the project, the
Government of the Republic of Tajikistan will carry out a Customer Satisfaction and Social
Analysis Study (CSSS) (activity A of this TOR) in Dushanbe before, during and after the
investments are completed. These terms of reference provide a brief description of the project, as
well as the objectives and scope of work for the consultant firm who will carry out the tasks.
Project context and scope
2. The project will finance the following components: (i) Metering and Demand Management;
(ii) Water Quality Improvement; (iii) Institutional Strengthening and Capacity Building, and (iv)
Implementation Support. Depending of funding available, the components may include:
(a) Metering and Demand Management: Water demand management will aim to reduce
the volume of water produced per capita to a reasonable level. This will include (i) the
introduction of water metering for each household, (ii) a strategy for reducing the leaks within
residential buildings with common internal networks, (iii) a connection replacement program,
and (iv) a public communication and awareness campaign.
(b) Water Quality Improvement: Priority rehabilitation works will support urgent design,
repairs and rehabilitations to improve the reliability of water supply and its compliance with
drinking water standards. The component will cover two or more of the following activities: (i) a
new pump station facility and reservoir for the Napornaya water treatment plant (NAP); (ii) the
renovation of chlorination facilities in three production stations (NAP, Kafarnigan Wellfield
(KAF)-east, KAF-west and Southwest Wellfield (SWW); (iii) the renovation of rapid sand filters
at Samotechnaya water treatment plant (SAM); (iv) the renewal of around 7 percent of the
distribution network due to the high number of pipe breaks, which cause frequent supply
interruptions and water losses; and (v) rehabilitation, replacement or installation of production
water meters. Priorities will be selected with the Client during project preparation, accounting for
available cofinancing.
(c) Institutional Strengthening and Capacity Building. Management strengthening and
capacity building of DVK will aim to improve DVK operational performance and build its
strategic planning capacity. It will include (i) building DVK’s capacity for modern and effective
HR management, (ii) procuring maintenance equipment, (iii) implementing a Water and
Sanitation Master Plan and financial model, (iv) improving and updating the customer database
78
and introducing billing based on metered consumption, (v) an energy audit of DVK operations,
and (vi) implementing a training plan.
(d) Implementation Support. Project implementation support will cover staff, equipment
and operating costs of the PCU and of an international implementation consultant.
The contract will require distinct types of activities, each of which is described below.
Customer Satisfaction and Social Analysis Study (CSSS)
General Background and Objectives
3. The purpose of a CSSS is to obtain quantitative and qualitative data to inform an indicator of
project achievement—improved potable water supply service as assessed through customer
satisfaction. In general terms, the CSSS is used both as a benchmark for project baseline and as
an input to project design. It presents an opportunity to gather data from project beneficiaries to
inform both project design and implementation. The CSSS will be based on an overall
understanding of the social and institutional context of the project and its proposed interventions.
It will assess current needs, concerns and expectations of project stakeholders (including
customers). This ensures project activities respond to the needs of the target groups, identifies
specific concerns of vulnerable groups and provides an avenue to articulate the concerns of the
range of stakeholders. During implementation this tool will monitor project impacts by assessing
the immediate and long-term effectiveness of implemented activities. The CSSS will make
practical, concrete recommendations regarding ways to increase the positive impact of the
project and mitigate any negative impacts with a special focus on ensuring that no subgroup is
rendered unduly vulnerable, isolated or ignored.
Methodology
4. The Customers Satisfaction and Social Survey will be conducted during project preparation to
serve as a baseline and inform project design. This study will be adapted to be repeated annually
(or on a different scheduled is so agreed with the client) during project implementation to inform
activities and assess their impacts. It will also be the primary tool to inform about the baseline
against which progress will be measured at the end of project (evaluation). This contract will
only be for the first CSSS, which includes the designing of the subsequent annual studies but not
carrying them out. These will be contracted separately. The study will use a combination of
quantitative and qualitative research methods, including household surveys, focus groups and
case history. Each methodology will focus on the range of focus issues (see below) most relevant
to that set of informants. While the focus will be on the customer groups, key informants
(interviews and focus groups) in the Municipality and DVK will also be targeted to ensure a
comprehensive understanding of the issues.
5. Sampling: The sample size is expected to be approximately a 1 percent (1,600
households/commercial enterprises) of the current customer base. In order that the sample is
representative, the criteria for selection of households should take the following into
consideration: a) type of habitat (house, apartment building or commercial enterprise); b) height
of apartment, specifically the floor (30 percent of samples should be at the 1st floor and 70
79
percent at the highest floors of the building—top 2 floors; c) service area/source of potable water
(SAM, NAP, SWW, KAF); and d) socioeconomic status (to be assessed by living standards,
channels to voice concerns, use of informal procedures, job profile, etc.) in the case of
households and size of enterprise (small, medium, large) in the case of commercial enterprises;
d) household connection or public standpost.
6. Focus Issues of the CSSS: Includes elements of potable water supply services relating to users
and service provider. The indicators that will be used to determine the success of the project are
(a) coverage and reliability of public water supply, (b) quality of drinking water treated, (c)
efficiency, (d) collected revenue from sales to domestic and commercial customers, (e) ability to
effectively meet demands of vulnerable sub-groups, and (f) percentage of customers satisfied
with the service.
To promote the continuous improvement of potable water supply service to users the following
issues should be highlighted in the study:
i. Access to water supply and waste water services for the different subgroups of customers
ii. Provision of service
a. Application for service – time to establish new service provisions, repairs and price of
service.
b. Drinking water supply – quantity of drinking water supply, pressure of drinking water
supply, continuity of drinking water supply(hours per day/fluctuations in seasonal
availability), coverage and availability of drinking water services.
c. Drinking water quality (purity, color, taste, odor) and aesthetic aspects of water.
iii. Contract management and billing
a. Service agreement – availability of a clear service agreement.
b. Billing – accuracy of billing, response to billing complaints, clarity of billing and
methods of payment.
c. Unit of billing – how billing is organized in apartment blocks, tallying actual usage
with reported number of users, adjusting for fluctuations in use due to migrant
workers and other factors.
iv. Promoting a good relationship and channels of communication between the water authority
and users
a. Contact with users – written contacts, telephone contacts, user visits to the offices of
the water utility, visits of authority personnel to the user, notification of restrictions
and interruptions and availability of information, gaps or specific issues where
information is lacking.
b. Grievance channels – ease of access and time for processing enquiries, complaints
and requests.
c. Channels of communication to public – accessibility of information on DVK services,
information to public on planned works and disruption.
v. Safety and emergency management – channels to alert on emergencies, time and
effectiveness of the response.
80
vi. Identification of different user subgroups – disaggregated by socio-economic status for
household and enterprise size for commercial enterprises, housing type/location of housing,
channels to voice concern, access to reliable service, etc.
vii. Informal channels and procedures in use – alternative channels of sources/access to water
for underserviced areas, informal means to cut queues for new connections, manipulation of
meter readings and bill payments, etc.
viii. Ability and willingness to pay – suitability of current tariff, conditions under which increase
tariff would be acceptable, etc.
ix. Expenses incurred due to lack of availability of potable water, such as in house purification
filters, boiling water, purchase/borrowing of water from neighbors, alternative sources or
informal vendors, health costs due to infections linked to impure water. etc.
x. Trust in water institutions and understanding the roles of water institutions.
7. The above issues will be covered as relevant to the different user groups, using the range of
techniques mentioned in the methodology section. Some areas will be better addressed through
the individual surveys (e.g., ability to pay), whereas others like trust in water institutions and
public information channels will be discussed in the focus group discussions. The case histories
will be done on select informants with focus on relevant issues.
Composition of Team:
8. The consultant will propose the composition of the core team and field supervisors. It is
suggested that the core team include at least the following: applied sociologist/anthropologist,
statistician, survey specialist and institutional specialist. It is suggested that field teams should be
trained together to assure consistency and quality. The consultant will decide how many field
teams the core team can successfully train and supervise to obtain quality field data.
It is recommended that the team proceed with its work in the following stages:
Brief field visits to few sites
Draft common instruments for interviews, focus groups and case history and submit for
review
Determine sample as per criteria and submit for review
Field training and field test instruments and approach on a sample (one week)
Complete field investigations and collate data (two weeks)
Draft reports
Submit draft reports for review
Deliver final report
Output
9. The social scientists whose services are procured through this contract will produce the
following:
i) An inception report, which will include a work plan for the duration of the consultancy, a
detailed methodology, sample questionnaires for the range of stakeholders, focus group
81
discussion guiding points, a rationale for the choice of sample, field staffing, focus issues for the
analysis and a plan for data storage, handover and ongoing study during implementation. The
World Bank will review the methodology and questionnaire.
ii) A draft, which the World Bank will review and comment on, and then a final report on the
assignment, including executive summary, methodology used, analysis of findings for each focus
topic in the study, operational recommendations for project design and implementation. The
report will also include the design (methodology and focus issues) for the repeater annual studies
planned during project implementation, taking into account the sequencing of project activities
and the resource constraints. The report will give consideration to specific context of the
investment and relevant topics identified as elements of the drinking water services relating to
users to identify and assess risks and to develop recommendations for maximize benefits from
the design and implementation of the project. The reports must be brief and readable so that they
can be understood and used by project staff, design contractors, local leaders, staff of the local
water company and the general public. The data will be handed over and relevant training given
so it can be used as a monitoring tool during project implementation.
Deliverables
10. The consultant will conduct this first survey and produce outputs as outlined in the section
above (output).
11. Subsequent surveys and assessments will be contracted out separately during project
implementation and will follow this schedule approximately: surveys over a period of 4.5 years
and produce 4 or 5 reports. The first survey and report will be used as the baseline to measure
progress and impacts made by the projects. The second survey will be administered after two
years of project implementation and will be completed with a full analytical report of the
progress made and the impacts achieved by the investment. Finally, the consultant will
administer two subsequent surveys—annually on year three and four of implementation and the
final survey (year four) will be used to prepare the final report, which will summarize project’s
impacts.
12. The report for this first survey (scope of this consultancy) will be prepared in Tajik (or
Russian) and in English both in hard copy and electronic version, along with qualitative and
quantitative data (SPSS format) and a codebook. Draft documents are to be submitted to DVK as
they are prepared. DVK will forward the copy of the report to the financiers, allowing two weeks
for comments before preparing the final versions of the reports.
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Annex 10: Map
KAF
SAM
NAP
SWW
DushanbeAirport
Varzob RiverLushob River
Gissar Canal D
ushanbe ska River
Kafir
nigan
Rive
r
ISMAIL SOMONI
KARAMOVA
RUDAKI
RUDAKI
ACADEMIC GHAFUROV
NABIEV
NABIE
V
DJAMI
ABAYA
SHESTOPAVLOV
AINI
TITOV
DRUZHBA NARODOV
KORGAR
BORB
AD
NEGM
ATA
KARA
BAEV
A
HAFIZA SHEROZI
PROF
SIUZO
V
RUDAKI
AINI
AHMED DONISHKARAMOVA
0 1
0 1 2 Miles
2 Kilometers
TAJIKISTAN
SECOND DUSHANBE WATER SUPPLY PROJECTMain Components of Water Supply System
WATER TREATMENTPLANTS AND WELLFIELDS
THIRD STAGE PUMPING STATIONS
TREATED WATER STORAGE
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