international development association - World Bank Documents

FOR OFFICIAL USE ONLY Report No: PAD2818

INTERNATIONAL DEVELOPMENT ASSOCIATION

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF EUR 14.6 MILLION

(US$ 16.5 MILLION EQUIVALENT)

TO THE

REPUBLIC OF KOSOVO

FOR A

REAL ESTATE CADASTRE & GEOSPATIAL INFRASTRUCTURE PROJECT

19 November, 2018 Social, Urban, Rural And Resilience Global Practice Europe And Central Asia Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective October 31, 2018)

Currency Unit =

US$ 1 = 0.72 SDR

US$ 1.38 = 1.0 SDR

US$ 1 = 0.88 EUR

US$ 1.13 = 1.0 EUR

FISCAL YEAR

July 1 - June 30

Regional Vice President: Cyril E Muller

Country Director: Linda Van Gelder

Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez

Practice Manager: Jorge A. Munoz

Task Team Leader(s): Aanchal Anand, Kathrine M. Kelm

ABBREVIATIONS AND ACRONYMS

BFD Budget and Finance Department

CEO Chief Executive Officer

CPF Country Partnership Framework

CR Cadastre Reconstruction

CZ Cadastral Zone

DB Doing Business

ESMF Environmental and Social Management Framework

EU European Union

EUSR European Union Special Representative

FDI Foreign Direct Investment

GDP Gross Domestic Product

GRM Grievance Redress Mechanism

GRS Grievance Redress Service

ICT Information and Communication Technology

IRR Internal Rate of Return

KCA Kosovo Cadastre Agency

KCLIS Kosovo Cadastre Land Information System

KPCVA Kosovo Property Comparison and Verification Agency

M&E Monitoring and Evaluation

MFD Maximizing Finance for Development

MCO Municipal Cadastre Office

MESP Ministry of Environment and Spatial Planning

NPV Net Present Value

NSDI National Spatial Data Infrastructure

PPSD Project Procurement Strategy Document

RECAP Real Estate Cadastre and Registration Project

REGIP Real Estate Cadastre and Geospatial Infrastructure Project

RF Results Framework

STEP Systematic Tracking of Exchanges in Procurement

WB World Bank

The World Bank Real Estate & Geospatial Infrastructure Project (P164555)

TABLE OF CONTENTS

DATASHEET ........................................................................................................................... 1

I. STRATEGIC CONTEXT ...................................................................................................... 6

A. Country Context................................................................................................................................ 6

B. Sectoral and Institutional Context .................................................................................................... 7

C. Relevance to Higher Level Objectives ............................................................................................... 8

II. PROJECT DESCRIPTION .................................................................................................... 9

A. Project Development Objective ....................................................................................................... 9

B. Project Components ......................................................................................................................... 9

C. Project Beneficiaries ....................................................................................................................... 10

D. Results Chain .................................................................................................................................. 13

E. Rationale for Bank Involvement and Role of Partners ................................................................... 14

F. Lessons Learned and Reflected in the Project Design .................................................................... 14

III. IMPLEMENTATION ARRANGEMENTS ............................................................................ 16

A. Institutional and Implementation Arrangements .......................................................................... 16

B. Results Monitoring and Evaluation Arrangements......................................................................... 17

C. Sustainability ................................................................................................................................... 18

IV. PROJECT APPRAISAL SUMMARY ................................................................................... 18

A. Economic Analysis .......................................................................................................................... 18

B. Technical ......................................................................................................................................... 19

C. Fiduciary .......................................................................................................................................... 19

D. Safeguards ...................................................................................................................................... 20

V. KEY RISKS ..................................................................................................................... 22

VI. RESULTS FRAMEWORK AND MONITORING ................................................................... 25

ANNEX 1: Implementation Arrangements and Support Plan .......................................... 30

ANNEX 2: Detailed Project Description .......................................................................... 47

ANNEX 3: Economic Analysis ......................................................................................... 56


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DATASHEET

BASIC INFORMATION BASIC_INFO_TABLE

Country(ies) Project Name

Kosovo Real Estate & Geospatial Infrastructure Project

Project ID Financing Instrument Environmental Assessment Category

P164555 Investment Project Financing

B-Partial Assessment

Financing & Implementation Modalities

[ ] Multiphase Programmatic Approach (MPA) [ ] Contingent Emergency Response Component (CERC)

[ ] Series of Projects (SOP) [ ] Fragile State(s)

[ ] Disbursement-linked Indicators (DLIs) [ ] Small State(s)

[ ] Financial Intermediaries (FI) [ ] Fragile within a non-fragile Country

[ ] Project-Based Guarantee [✓] Conflict

[ ] Deferred Drawdown [ ] Responding to Natural or Man-made Disaster

[ ] Alternate Procurement Arrangements (APA)

Expected Approval Date Expected Closing Date

18-Dec-2018 31-Aug-2023

Bank/IFC Collaboration

No

Proposed Development Objective(s)

The Project Development Objective is to increase the quality and availability of land administration and geospatial data and services.


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Components

Component Name Cost (US$, millions)

A: Policy, Legal and Institutional Support 0.28

B: Cadastre Modernization 6.58

C: ICT and Geospatial Infrastructure 8.14

D. Project Management, Capacity Building, Public Outreach, M&E 1.00

Organizations

Borrower: Republic of Kosovo

Implementing Agency: Ministry of Environment and Spatial Planning Kosovo Cadastre Agency

PROJECT FINANCING DATA (US$, Millions)

SUMMARY-NewFin1

Total Project Cost 16.50

Total Financing 16.50

of which IBRD/IDA 16.50

Financing Gap 0.00

DETAILS-NewFinEnh1

World Bank Group Financing

International Development Association (IDA) 16.50

IDA Credit 16.50

IDA Resources (in US$, Millions)

Credit Amount Grant Amount Total Amount

National PBA 16.50 0.00 16.50


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Total 16.50 0.00 16.50

Expected Disbursements (in US$, Millions)

WB Fiscal Year 2019 2020 2021 2022 2023 2024

Annual 0.13 0.93 1.17 3.81 4.84 5.61

Cumulative 0.13 1.06 2.23 6.05 10.89 16.50

INSTITUTIONAL DATA Practice Area (Lead) Contributing Practice Areas

Social, Urban, Rural and Resilience Global Practice

Climate Change and Disaster Screening

This operation has been screened for short and long-term climate change and disaster risks

Gender Tag

Does the project plan to undertake any of the following?

a. Analysis to identify Project-relevant gaps between males and females, especially in light of country gaps identified through SCD and CPF

Yes

b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment

Yes

c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes

SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT)

Risk Category Rating

1. Political and Governance Moderate

2. Macroeconomic Moderate

3. Sector Strategies and Policies Substantial

4. Technical Design of Project or Program Low


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5. Institutional Capacity for Implementation and Sustainability High

6. Fiduciary High

7. Environment and Social Substantial

8. Stakeholders Substantial

9. Other Low

10. Overall Substantial

COMPLIANCE

Policy Does the project depart from the CPF in content or in other significant respects?

[ ] Yes [✓] No

Does the project require any waivers of Bank policies?

[ ] Yes [✓] No

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment OP/BP 4.01 ✔

Performance Standards for Private Sector Activities OP/BP 4.03 ✔

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 ✔

Legal Covenants


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Sections and Description Schedule 2, Section 1, D. The Recipient, through KCA, shall carry out the Project in accordance with the Project Operations Manual, and shall not amend, suspend, abrogate, repeal or waive any provision of the Project Operations Manual without prior approval of the Association.

Sections and Description Schedule 2, Section 1, D. The Recipient, through KCA, shall: (i) not later than January 15, 2019, submit to the Association an annual work plan for calendar year 2019; and (ii) on December 1 of each year, starting on December 1, 2020, submit to the Association for review and approval an annual work plan for the following calendar year, and shall agree with the Association on steps to be taken in the following calendar year.

Sections and Description Schedule 2, Section 1, D. The Recipient, through KCA, shall ensure that the Eligible MCOs abide by the terms of their respective memorandum of understanding with KCA, by which the Eligible MCOs agree to use standardized workflows and procedures for cadastre and registration, in a manner acceptable to the Association.

Conditions

Type Description

Effectiveness The Project Operations Manual has been adopted by the Recipient, through KCA, in a form

and manner satisfactory to the Association. Type Description

Effectiveness The Project Implementation Unit has been established and staffed in accordance with terms

of reference and in a manner satisfactory to the Association, including with a head of PIU, a

procurement expert, a financial management expert, in accordance with terms of reference

and in a manner satisfactory to the Association.


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I. STRATEGIC CONTEXT

A. Country Context 1. Kosovo is the youngest country in Europe—both based on its new statehood and the average age of its

population—with all the accompanying opportunities and challenges. In terms of opportunities, Kosovo is a potential candidate for membership in the European Union (EU). In terms of challenges, post-conflict fragility, including lack of full international recognition, continue to hamper Kosovo’s growth and development to its full potential. Kosovo’s gross domestic product (GDP) grew by an estimated 3.7 percent in 2017, supported by strong domestic demand. Robust domestic consumption drove growth, aided by investment, mostly private and including foreign direct investment (FDI) from the diaspora. The negative contribution from net exports has been a feature of growth but was lower than in previous years due to lower oil prices. Consistent with strong consumption and the need to rebalance towards more export- and industry-driven growth, services were the key driver of growth, followed by agriculture, with lower growth of industry.

2. Kosovo’s economy shrank during the global financial crisis but so did poverty in absolute terms. In the post-global

financial crisis period, the Kosovar economy grew consistently above the Western Balkans’ average, albeit from a low base and reaching only 11 percent of EU average per capita income in 2015. Kosovo’s GDP per capita grew from US$ 1,088 in 2000 to US$ 3,562 in 2015. From 2012 to 2015,1 the poverty rate measured in purchasing power parity (PPP) fell from 5.7 in 2012 to 2.9 in 2015. During the same period, consumption of the bottom 40 percent of the population rose at 3.5% versus 1.6% for the general population, leading to reduced inequality and greater shared prosperity. Despite significant progress, Kosovo is the third-poorest country in Europe, with almost a fifth of the population living below the national poverty line in 2015.2 Therefore, eliminating extreme poverty and promoting the income growth of the bottom 40 percent will remain important goals for Kosovo. Addressing these challenges requires a complex agenda that would bring together improving the efficiency of and access to public services, increasing the degree of formality in the economy, and creating jobs by supporting private sector growth and development.

3. Climate change and related disasters create additional challenges to economic growth and poverty reduction. Climate projections indicate increasing mean annual temperatures and declining annual precipitation for Kosovo, but simultaneously an increase in winter precipitation associated with flooding. Climatic changes have already caused increase in extreme weather events and related hazards, such as droughts, flash floods, river flooding and forest fires, and these extremes are predicted to become more severe and frequent in future.3 Rapid urbanization and building construction together with poorly regulated land use planning and building standards have further exposed population to hazards.4

Also, the agricultural sector is expected to suffer significantly from climate change and related disasters eventually decreasing agricultural production and related income. The Climate Change Framework Strategy of Kosovo aims to improve climate change adaptation by better controlling land uses and building standards, promoting insurances against property damage and improving utilization of information. Well disseminated up-to-date cadastre and registry data is essential for fulfilling these goals, while it also provides tenure security to the population during and after climate related disasters.

1 The most recent period with comparable data. Source: World Bank Poverty and Equity Brief, Kosovo. http://globalpractices.worldbank.org/poverty/Documents/2018SMPEB/Global_POVEQ_KSV.pdf 2 World Bank and Kosovo Agency of Statistics. 2017. Consumption Poverty in the Republic of Kosovo 2012-2015. 3 Ministry of Environment and Spatial Planning. 2014. Climate Change Framework Strategy for Kosovo. 4 Ibid.

http://globalpractices.worldbank.org/poverty/Documents/2018SMPEB/Global_POVEQ_KSV.pdf


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B. Sectoral and Institutional Context 4. Securing property rights remains critical for improving Kosovo’s growth and development as well-defined rights

are the cornerstone of a vibrant market economy. Without a complete and up-to-date cadastre and clearly defined legal rights for men and women, there is significant risk for the private sector and citizens to invest. This risk, in turn, depresses investment, raises interest rates, and fuels the informal economy. Securing property rights also improves state land management which can help the Government take stock of its assets and release unused or underutilized assets to the private sector. This increases domestic and foreign investors’ access to land—an important factor of production—and enhances the allocative efficiency of the economy. Moreover, secure property rights are not only crucial for economic prosperity but also social stability. In a post-conflict country like Kosovo, clear legal rights help stabilize the social situation and facilitate a return to normalcy.

5. Since 2011, with the support of the World Bank and other development partners, the land and property sector in Kosovo has undergone a substantial transformation. Under the Kosovo Real Estate Cadastre and Registration Project (RECAP; closed June 30, 2018), the Kosovo Cadastre Agency (KCA) has made considerable progress in introducing a modernized land administration system, securing property rights, and improving the business environment. While achieving these results has taken some time due to the need to build legal and technical procedures for registration and IT system development, RECAP’s progress means that future investments in land administration and property rights will progress much more expeditiously, now that more solid legal, technical and capacity foundations are in place. The most notable achievements include: (a) a significant improvement in Kosovo’s ranking in the World Bank Doing Business Index for Registering Property from 73 (DB 2012) to 34 (DB 2018); (b) systematic updating of cadastral and registration records (called cadastre reconstruction) has taken place in 30% of the priority cadastral zones of Kosovo5; (c) increased land market efficiency, with the time to register a transaction dropping by 65% from 30 days before RECAP to under 10 days as of June 2018; (d) the development of a centralized IT system, the Kosovo Cadastre Land Information System (KCLIS)6; (e) the IT system at KCA now collects and monitors the data for gender-disaggregated property ownership, an important statistic in understanding and analyzing the current situation for women’s property ownership in the country; and (f) the introduction of a national spatial data infrastructure (NSDI) with an NSDI Strategy approved as well as the establishment of a national Geoportal7 with access to datasets from seven institutions, including the KCA.

6. RECAP has laid the foundation for the next phase of investments and reforms that are planned under the proposed Real Estate Cadastre and Geospatial Infrastructure Project (variously, “Real Estate & Geospatial Infrastructure Project” or “REGIP”). These investments will focus on improving public sector service delivery and strengthening private sector competitiveness through: (a) further cadastre reconstruction to improve the availability and accuracy of correct up-to-date cadastral information and thus enhance the security of tenure; (b) investments to advance ICT and geospatial infrastructure that improve availability, affordability, and transparency of public services in order to better serve citizens and businesses; (c) policy, legal, and institutional support; and (d) capacity building initiatives to improve decision-making, particularly with the use of geospatial data.

7. An important issue for the property market in Kosovo is the pending return of pre-1999 cadastral documents that were removed from Kosovo. On the one hand, the missing documents could help complete the records in Kosovo, leading to a positive effect on the land market. On the other hand, if the process of integrating the pre-1999 cadastral

5 30% of priority cadastral zones corresponds to roughly 15% of the territory of Kosovo. 6 KCLIS is operational in 35 out of 38 MCOs in Kosovo. It has not been rolled out in three northern municipalities due to political reasons. 7 Visit the Geoportal at: http://geoportal.rks-gov.net/

http://geoportal.rks-gov.net/


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documents is not effectively managed, their return could potentially decrease tenure security and cause property market disruptions. Furthermore, it is not possible to estimate the geographic areas that would be affected by the return of the pre-war cadastral documents. At the moment, the impact of the records is expected to be nationwide. The date of return of the pre-1999 documents is not yet known.

8. The agency responsible for processing the pending return of the cadastral documents is the Kosovo Property

Comparison and Verification Agency (KPCVA).8 In December 2016, KPCVA added a mandate, which is to receive and compare the scanned copies of the original pre-1999 cadastral records9 removed from Kosovo with the Kosovo cadastre. If the documents are not properly integrated into the Kosovo cadastre then the process could potentially lead to decreased security of tenure, particularly for third party bona fide owners, and potential land market disruptions. In the context of Bank-financed investments in the Kosovo land sector, this could affect the sustainability of cadastre reconstruction investments done under RECAP and those planned under REGIP.

9. Even though REGIP Project will not support KPCVA directly, US$ 0.5 million will be left unallocated so KPCVA could

potentially be brought in as the second implementing agency at a later date subject to a Project Restructuring. This unallocated amount could, therefore, be used to support KPCVA prepare for the pending return of the pre-1999 cadastral documents with the aim of avoiding property market disruptions and safeguarding the sustainability of investments made under RECAP and those planned under REGIP.

C. Relevance to Higher Level Objectives 10. The main higher-level objective of the Project is to improve security of tenure and enhance the delivery of land

administration and geospatial services in the Kosovo land and property market. Additionally, the proposed project will support two focus areas of the FY17-FY21 Country Partnership Framework. First, it will support ‘Enhancing Conditions for Accelerated Private Sector Growth and Employment’ through the cadastre reconstruction activities that will expand the coverage of updated and accurate property rights and enhance the security of tenure, an important element for private sector development. Cadastre reconstruction will also help increase access to finance and reduce informality in the economy. Both these aspects are expected to have a positive effect on the credit markets and the commercial banking sector. The investments in priority geospatial datasets are expected to support the private sector through access to better location information at a lower cost. This, in turn, could result in higher investments and improved job creation. Second, the proposed project will also support ‘Strengthening Public Service Delivery and Macro-Fiscal Management’ in two ways. The launch of e-services for land administration will improve the availability of services and transparency of data across the country. The investment in geospatial datasets is also expected to create cost savings for Government agencies through data sharing and this would, by extension, help improve the macro-fiscal health of the country.

8 The KPCVA is the institutional successor to bodies established to address real property issues in the wake of the 1999 conflict—the Housing Property Directorate (HPD) and the Kosovo Property Agency (KPA). As a result, the KPCVA’s original mandate is to complete the return of properties to owners, many of whom were displaced during the war. In August 2018, KPCVA added another mandate to formalize informal transactions that took place between 1989 and 1999. 9 This applies to: (a) private property, (b) private commercial property, and (c) the private property of religious communities. KPCVA’s mandate does not include any public property.


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II. PROJECT DESCRIPTION

A. Project Development Objective

PDO Statement


PDO Level Indicators 11. The PDO has two main objectives: quality and availability of land administration and geospatial data and services.

The quality of land administration and geospatial data and services will be measured through expanded coverage and improved accuracy of data. Without good coverage and accurate information, the resulting lack of good quality data in the IT system and Geoportal hamper the overall quality of data and services used in the property market. Therefore, by improving coverage and accuracy, the Project will increase the quality of land administration and geospatial data and services in Kosovo. Similarly, availability of land administration and geospatial data and services will be measured through greater access to and transparency of these data and services. Lack of availability leads to low levels of transparency and access in the property market, and, therefore, by increasing access and transparency, the Project will increase the availability of land administration and geospatial data and services in Kosovo.

12. Therefore, the PDO will be measured by four indicators listed below. The baseline and target values are indicated in brackets. Objective 1: Quality of land administration and geospatial data and services.

• Number of properties updated, validated, or registered in the digital cadastre register (0; 300,000)

• Target land area in priority cadastral zones with user or ownership rights recorded/updated as a result of the Project (30%; 60%)

Objective 2: Availability of land administration and geospatial data and services.

• Number of e-services implemented (0;3)

• Number of datasets available through the Geoportal (10;30)

B. Project Components 13. The PDO will be achieved through four components, which will be implemented by the KCA.

14. Component A. Policy, Legal and Institutional Support (US$ 0.28 million): The objective of Component A is to provide

policy, legal, and institutional support to KCA.

15. This component will finance the provision of support to: (a) develop an updated KCA strategy and business plan; (b) support the preparation and implementation of Kosovo’s cadastre legal and regulatory framework10; and (c) conduct land market studies and analyses.

10 Whenever possible, the cadastre legal and regulatory framework will be shaped to include provisions that promote women’s property rights.


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16. Component B. Cadastre Modernization (US$ 6.58 million): The objective of this component is to continue the modernization of the cadastre in Kosovo, which commenced under the RECAP project.

17. This component will finance the provision of support to continue the modernization of Kosovo cadastre through: (a) the carrying out of cadastre reconstruction; (b) data quality improvement; (c) development of a utility cadastre; (d) development and update of the Kosovo’s building register; and (e) the carrying out of reengineering of eligible MCOs.11

18. Component C. ICT and Geospatial Infrastructure (US$ 8.14 million): The objective of this component is to make important IT and geospatial investments in the Kosovo land and property market, and to support the implementation of KCA’s IT and NSDI Strategies.

19. This component will finance the provision of support to carry out IT and geospatial investments in the Kosovo land

and property market including, inter alia: (a) the upgrade of KCLIS-SOA12; (b) investments in KCA’s digital archive; (c) development and implementation of the KCA IT Strategy and NSDI Strategy; (d) investments in NSDI; and (e) enhancement of the national geodetic framework.

20. Component D. Project Management, Capacity Building, Public Outreach, and Monitoring & Evaluation (US$ 1.0 million): The objective of this component is to ensure the smooth and timely implementation of the Project and support activities related to capacity building, public outreach, and monitoring and evaluation (M&E).

21. The component will finance the provision of support for project implementation and donor coordination, including,

inter alia: (a) strengthen the capacity of the PIU; (b) carrying out of Project monitoring and evaluation activities; (c) carrying out of customer satisfaction surveys; (d) carrying out of public outreach and the maintenance of the Project’s grievance redress mechanism; (e) carrying out of capacity building activities for KCA and KPCVA; and (f) the establishment of KCA and KPCVA joint working group.

C. Project Beneficiaries 22. The Project’s direct beneficiaries include the citizens in the 30% of the priority cadastral zones that will undergo

cadastre reconstruction. Additionally, IT system upgrades and the launch of e-services will benefit all citizens and businesses of Kosovo as more information and services will be available online. IT system roll-out and e-services would also be discussed for the politically sensitive northern municipalities, which to-date have not connected to national systems and for which service provision tends to be low. E-services geared towards specialized users such as commercial banks, notaries and private surveyors will benefit these users and also have a positive impact on the speed, quality, and accuracy of service delivery. Investments in the priority geospatial datasets and the Geoportal will benefit the public and private sectors in Kosovo as the use of these datasets is expected to reduce the time and cost of decision-making while also improving the quality of these decisions. This investment can also help Kosovo diversify its economy, support job creation, and provide valuable input for disaster risk management.

23. Additionally, REGIP beneficiaries will include those that benefit from the gender, citizen engagement, and climate

11 Eligible MCOs are defined as MCOs that sign an MOU with KCA. 12 Under RECAP, the Kosovo Land Information System (KCLIS) was enhanced towards a Service Oriented Architecture (KCLIS-SOA). The SOA allows KCLIS to re-combine existing functions to meet changing customer requirements, to develop new functions rapidly, and to scale operations to meet different levels of demand. SOA upgrade under REGIP would, therefore, include the launch of e-services, streamlining of business process and other activities.


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change mitigation and adaptation benefits of the Project. These three themes and the relevant activities and benefits are discussed below.

24. Gender: REGIP will benefit the women of Kosovo by continuing to support the KCA’s and the Government of Kosovo’s

efforts to promote gender equity in property rights. REGIP will reinforce and enhance the work that was started under RECAP,13 and move forward in three specific directions.

25. First, REGIP will continue to rely on and upgrade, when necessary, the IT systems at KCA that collect and monitor the

data for gender-disaggregated property ownership, an important statistic in understanding and analyzing the current situation for women’s property ownership in the country. At the time of RECAP closing in June 2018, 16.8% of properties were either wholly or jointly owned by women. This will allow Kosovo to meet the requirement for gender disaggregated property data for the Sustainable Development Goals, and specifically for target 1.4.2.14

26. Second, the percentage of women with rights to land and property will be monitored by KCA and tracked through

the Results Framework (RF). One of the lessons emerging from RECAP is that the percentage of women’s property ownership remained steady despite several public awareness campaigns and market-based policy interventions e.g. KCA and the Agency for Gender Equality worked together to register marital property in the names of both spouses free of charge for a targeted period of time. This shows that improving women’s land rights is a slow process against prevailing social and cultural norms. At the same time, it is a worthwhile process as studies have linked women’s property rights to greater income and agricultural productivity, increased access to finance, reduced gender-based violence, and increased health and education opportunities for children.15 Under RECAP, a randomized control trial done to test the effectiveness of current messaging on women’s property rights during cadastre reconstruction found that men were more open to jointly registering their spouses when the discussion centered around benefits to the children rather than the economic security of the wife. Such customized messaging may be able to boost women’s property ownership given the social norms in Kosovo. A big achievement of RECAP was the commitment with which KCA began approaching the issue of gender-sensitivity in the field of property rights. KCA now applies the gender lens to all activities, including tracking the percentage of women that engage with KCA on the Agency’s Facebook page. Incidentally, women’s engagement on social media channels is about 20%, which mirrors the ownership figure of 16.8%. Therefore, the combination of monitoring, awareness campaigns during cadastre reconstruction, and engagement with KCA’s women clients will continue even when the percentage ownership increases only gradually. Improvement in women’s property rights will be monitored through a dedicated indicator in the Results Framework.

27. Third, the rich data and field knowledge available to KCA through various channels will be used for making evidence-based policy to promote women’s property rights. For example, under REGIP, new market-based incentives, like free joint registration of spouses, could be considered following customized messaging that link women’s property rights to children’s economic security. Similarly, whenever possible, cadastre legislation and regulatory framework will be shaped to include additional provisions that promote women’s property rights.

28. Citizen Engagement: REGIP will also benefit the citizens of Kosovo through the citizen engagement practices that will be implemented through this Project. Several socially inclusive citizen engagement tools will continue to be

13 In addition to using project funds, RECAP was also able to leverage complementary funding through World Bank Trust Funds for Innovation, the Umbrella Fund for Gender Equality (UFGE), and the Korea Trust Fund for Economic and Peace-Building Transitions (KTF) to further study and promote women’s property rights in Kosovo. 14 SDG indicator 1.4.2 is: Proportion of total adult population with secure tenure rights to land, with legally recognized documentation and who perceive their rights to land as secure, by sex and by type of tenure 15 A Place of Her Own: Women’s Right to Land, https://www.cfr.org/blog/place-her-own-womens-right-land

https://www.cfr.org/blog/place-her-own-womens-right-land


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mainstreamed into different sub-components: (a) public displays (specifically inviting people from vulnerable groups having particular difficulties in registering property, including ethnic minority groups such as Serbian, Roma, Ashkali, Egyptians, Gorani and Turks) will strengthen the public awareness campaign and ensure that all citizens have a formal process in which they can voice opinions and raise concerns about aspects like property boundaries before cadastre reconstruction is finalized; (b) participatory data validation and monitoring through Cadastre Reconstruction Commissions that involve members of the public and support cadastre reconstruction activities in the target priority cadastral zones (aiming to also involve representatives from ethnic minority groups, such as Serbian, Roma, Ashkali, Egyptians, Gorani and Turks in those cadastral zones with larger minority population); (c) a comprehensive Grievance Redress Mechanism (GRM) set up at KCA to collect, monitor, and respond to citizen complaints; (d) three customer satisfaction surveys (at the beginning, mid-term and close to the end of the Project) to gather feedback about customer satisfaction with KCA and MCO services; and (e) continuation of the use of the helpdesk (online and telephone) to provide customer support and the use of social media channels (e.g. KCA Facebook Page) to provide regular updates on KCA’s work to engage citizens.

29. The three customer satisfaction surveys will ensure to take samples from cadastral zones known to be characterized by a Serbian majority as well as other ethnic minority groups (such as Roma, Ashkali, Egyptians, Gorani, and Turks), and to contain additional questions targeted to the concerns of these groups (e.g., language, lack of awareness, fear of discrimination, political objections). If the survey results reveal an unwillingness to participate in registration activities in cadastral zones that are ethnically mixed or characterized by ethnic minorities, follow-up focus groups and stakeholder meetings are supposed to be conducted locally to examine the reasons behind this unwillingness and to identify possible responses to help overcome these concerns. Finally, the disability dimension will be taken into account in case of any reengineering of MCOs to make them more accessible and e-services will allow for improved access to land administration services for all.

30. Climate Change: REGIP will benefit all citizens of Kosovo as several of REGIP activities can be linked to climate change

adaptation and mitigation. Six such activities have been identified under Components B and C. First, cadastre reconstruction under Component B will support the certification of private land rights. This has climate change adaptation benefits as it improves post-disaster recovery in cases of temporary resettlement or parcel boundary disappearance. More secure tenure will also mean that owners and occupants feel secure enough to leave their land and property in case of severe conditions and they would be assured that they could come back to the same land or property or get adequate compensation for it in case of any permanent damage that may occur. Second, updating cadastral data is required for monitoring land use planning and building standards, which is requested by the Climate Change Framework Strategy of Kosovo. This activity will help in collecting land use information, which would enable monitoring and controlling land use. Under Component B, establishing utility cadastre will enhance climate disaster preparation, response, and recovery, as it will allow analysis of utilities under climate disaster threats and targeting of essential utility reparation activities during disaster response and recovery. Additionally, establishing building registers will allow controlling and monitoring land use zoning regulations, and it will facilitate climate disaster recovery as it will allow property holders to legally reconstruct buildings they had on their property before disasters. Third, cadastre reconstruction would increase incentives in rural areas for long-term investments in climate-smart agriculture techniques and increase incentives in urban areas for long-term investments in high quality building materials and proper connections to water and electricity networks that are essential for climate resilience. Fourth, the geospatial investments under Component C are essential for climate change adaptation as datasets related to elevation, flood levels, topography etc. improve disaster risk management and expedite post-disaster recovery. Such datasets will be included in Component C. Fifth, the establishment of NSDI will make accessible reliable, well-managed cadastre data for the development of climate disaster early warning systems, systematic evaluation of


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disaster damage, and the development of climate disaster compensation and insurance schemes. Dissemination of such cadastral data also allows for better monitoring of land use planning and building standards as planned for in Kosovo’s Climate Change Strategy. Sixth, e-services that will be launched under Component C would reduce the use of paper, which, in turn, would support afforestation, reforestation, and biosphere conservation efforts in Kosovo and countries from where it imports paper.

D. Results Chain

Component Activity Output Outcome Objectives

Develop KCA strategy and business plan New KCA Strategy and Business Plan

Support preparation and implementation

of the cadastre legal and regulatory

framework

Draft Cadastre Law and other regulations

Develop land market studies and analyses Land market studies and analyses

Cadastral Reconstruction

Cadastral information updated,

validated, or registered in 30% of priority

zones

Increased coverage of up to date cadastral records

Data Quality Improvement Reduced errors in cadastral database Improved accuracy of cadastral information

Utility Cadastre Utility cadastre in 3 citiesIncreased coverage/availability of services under

KCA's mandate

Building Register Development of Building RegisterImproved coverage and up-to-date information for

urban planning and property tax collection etc.

Office Reengineering Reenginnering of MCOs, including

northern Serb majority municipalitities

Improved work environment and customer

experience, increased service availability to

vulnerable minority communities

KCLIS SOA UpgradeState of the art Land Information System

with Service Oriented Architecture

Increased availability of land administration data

and services

KCA Digital Archive Advancement of KCA digital archiveIncreased transparency and availability of past

transactions and registration information

Support to KCA IT and NSDI StrategiesLong-Term Sustainability of IT systems

and targeted investments in NSDI

Improved sustainability beyond life of project and

targeted investments to support land market

Support to NSDI

Geospatial datasets, standards,

procedures, and technical training of

Government agencies

Increased availability of reliable and accurate

geospatial data and increased usage among

Government agencies

Enhancement of the National Geodetic

FrameworkAdditonal ground control points Improved accuracy of measurements

PIU and Donor CoordinationProject implementation and donor

coordination

Improved efficiency of project implementation and

greater coordination in dealing with land sector

challenges in Kosovo

M&E Results Framework and AnalysisImproved knowledge of issues with project

implementation leading to corrective action

Customer Satisfaction SurveysCustomer satisfaction surveys in Years 1,

3, and 5 of the Project

Increased transparency of project activities and

increased citizen engagement with respect to

feedback to improve KCA and MCO services

Public Outreach and GRM Public Awareness Campaigns and GRMImproved understanding of KCA services and

increased transparency and accountability of Project

Capacity Building of KCA and KPCVA Technical trainings and study visits Increased capacity of KCA and KPCVA staff

Joint KCA KPCVA Working GroupFormal mechanism for coordination

between the two agencies

Improved coordination for land sector activities and

better management of property market-level risks

Cooperation between KCA and MCOs and municipalities

Consistent use of KCLIS-SOA, CR Tool, and digital archive across MCOs

Cooperation between KCA and external registers e.g. eGateway, Civil Registry etc.

Participation of different Government agencies in discussions to determine priority geospatial datasets

Feedback from citizens and specialized users (notaries, surveyors etc.) to improve service delivery

Government investment in maintenance of KCA's IT systems and NSDI in the absence of vertical structure for organization of cadastral services

Key

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Component C

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Improved operating environment, enhanced KCA

strategy and procedures, and better understanding

of land market challenges


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E. Rationale for Bank Involvement and Role of Partners 31. Land administration is an essential public service that underpins economic growth and poverty reduction.16 A 2014

study17 on completed land registration projects concluded that public sector investment in land registration systems is highly beneficial to the economic development of the country with a high rate of return on public investment. In addition, increased access to geospatial data will not only have a direct impact on public sector management and decision making, but also provide new opportunities for small enterprises to generate value-adding services and jobs. At the same time, the cost of land administration services remains high, making registration usually out of the reach of ordinary Kosovars. Additionally, Kosovo has a high degree of economic informality, which means property ownership often remains informal. Therefore, the Bank’s financing and technical expertise are critical to furthering the land rights agenda in Kosovo, formalizing property rights, developing a building register, and boosting the real estate and related sectors e.g. mortgage lending, construction etc. In doing so, REGIP investments will also contribute to the agenda of maximizing finance for development (MFD) or mobilizing private sector capital. For example, clarification of property rights and increased security of tenure can be seen as de-risking interventions that promote increased private sector activity domestically and increase the appetite for foreign direct investments. Similarly, geospatial investments can provide more information for private sector decision-making, thus opening new markets. For example, geospatial information shared with insurance providers can significantly reduce the due diligence costs of the private sector and make it cheaper for insurance providers to launch and/or scale crop insurance products, which may otherwise not be available at reasonable rates to farmers.18

Value added of Bank’s support: 32. The World Bank has several decades of experience in supporting land administration systems and systematic

registration-cadastre projects around the world. The Bank also has extensive experience in the Europe and Central Asia region where it has invested in land administration systems since the fall of communism. This demonstrates that the Bank is uniquely qualified to address the challenges of post-communist states and young democracies like Kosovo. In addition, the Bank has been involved in the land sector in Kosovo since 2010 and understands well the key challenges and opportunities. The Bank’s unparalleled value-add is driven by this combination of understanding the local context and bringing regional and international global practices. In partnership with the Food and Agriculture Organization, the Bank will also bring experience implementing the Voluntary Guidelines on the Responsible Governance of Land, Forests and Fisheries, a global tool for best practices in land governance.

F. Lessons Learned and Reflected in the Project Design 33. The World Bank has funded land administration projects across the globe with particular attention to Europe and

Central Asia region (ECA) just after the collapse of the Soviet Union given the need to secure property rights in order to develop well-functioning market economies. Over forty land administration projects were completed in ECA since 1991. Before Bank-financed projects, ECA countries did not have good property registers or cadastres, and the land administration sectors were operationally and institutionally fragmented, paper based and bureaucratic. Moreover, of the Bank-financed land projects implemented in ECA, many were implemented in the Western Balkans, including the previous RECAP project in Kosovo and, therefore, provide valuable lessons on issues like technical investments,

16 Deininger, K. 2003. Land Policies for Growth and Poverty Reduction. Washington, DC: The World Bank. 17 Economic Impact of 20+ Years of ECA Land Registration Projects; Satana, Adlington, Torhonen, Anand; Annual World Bank Land and Poverty Conference 2014. 18 Based on the experience of the DFID-funded Ethiopia Land Investment for Transformation (LIFT).


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training and capacity building, and the importance of citizen engagement to help maximize the impact of investments in activities like cadastre reconstruction. Today, many of these countries operate fully digital systems for land and property registers and cadastres19, and are moving to the next generation of services with geospatial data, compliance with EU’s INSPIRE Directive, and the launch of electronic services and interoperability as part of the e-government initiatives. Therefore, the Bank’s strong foundations and track record in ECA, and particularly the Western Balkans, helped to gather the right experience for REGIP project design.

34. Overall, this project design has incorporated the following lessons learned from the Bank’s experience in land

projects: a. Policy and legal reforms need to be conducted alongside technical investments to achieve strategic goals

and harness the complete benefits of investments; b. Public awareness and participation is critical for success, and public awareness and education campaigns

add important value. Results of customer surveys are a valuable channel for feedback from public and suggests important corrective actions for agencies;

c. Investments in transparency (e.g. publication of procedures and datasets) are important to gain the trust of the public and provide a good level of service delivery;

d. Communication and training need to reach out to multiple stakeholders including different social groups including vulnerable groups and women considering their priorities and varying ways they access information; and

e. Addressing gender inequality in access to formal property rights is important even if the law prescribes equal rights. Providing access to gender disaggregated data and including gender specific messages in public awareness campaigns, training, and education can have significant positive impact. Tailoring project activities to men and women when appropriate can help to prevent unintended biases and mitigate against negative gender impacts.

35. In addition, country-specific lessons learned from the RECAP project have also been incorporated. These key design

lessons include: a. Cadastre Reconstruction Commissions can help increase the rate of updating the cadastral information

and increase the number of registrations and are also a good mechanism for citizen engagement; b. Public display of survey data and focused awareness raising campaign can help to minimize errors in data

collected during cadastre reconstruction and boost the overall accuracy of the cadastral information and should be designed as a “crowd-sourcing” activity to increase public participation around CR activities;

c. An update of the current Cadastre Reconstruction process, especially moving to enhanced automation of data collection, would help improve quality assurance, data quality and get the feedback of specialized users like commercial banks and private surveyors that rely on accurate cadastral information; and

d. A big achievement of RECAP was the commitment with which KCA began approaching the issue of gender-sensitivity in the field of property rights. KCA now applies the gender lens to all activities, including tracking the percentage of women that engage with KCA on the Agency’s Facebook page. Incidentally, women’s engagement on social media channels is about 20%, which mirrors the ownership figure of 16.8%. Therefore, the REGIP and other projects should target the gender sensitization of the implementing agency as this helps to mainstream gender into regular agency operations and ensures the drive for and sustainability of gender-related outcomes beyond the life of the Bank-financed project; and

e. The Bank team was able to secure money from a Bank-Executed Trust Fund, which were used alongside

19 In Doing Business 2019, ten ECA countries (Lithuania, Georgia, Belarus, Estonia, Kyrgyz Republic, Slovak Republic, Russian Federation, Armenia, Azerbaijan, and Kazakhstan) were ranked in the top 20 countries on Registering Property.


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RECAP-financed CR activities, to design and conduct a randomized control trial20 to inform the messaging in the field to facilitate the recording of both the husband and wife as co-owners. It was seen that public outreach activities will seek to raise women’s awareness of their property rights and the importance of including their name as co-owner. Such complementary BETF activities should, therefore, be sought and implemented to improve the achievement of the Bank’s corporate commitments. At the same time, the client should be included in the design and implementation of the activities so as to ensure a high degree of client ownership.

III. IMPLEMENTATION ARRANGEMENTS

A. Institutional and Implementation Arrangements

36. The proposed Project will replicate the implementation arrangements that have been successfully put in place under the previous Bank-financed RECAP Project (closed June 30, 2018) with KCA as the implementing agency. During RECAP, the KCA has had a good record with Procurement and Financial Management as well as the management of Environmental and Social Safeguards, and the Project’s performance was deemed Satisfactory.

37. KCA will implement the Project in close cooperation with the Ministry of Environment and Spatial Planning (MESP; KCA’s line ministry), and Municipal Cadastre Offices (MCOs). Other stakeholders such as the Ministry of Finance (MOF), the Ministry of Public Administration21, the KPCVA, and other public and private sector institutions producing and managing geospatial data will be involved as needed.

38. A Project Implementation Unit (PIU) will be established at KCA and will report to the KCA Chief Executive Officer (CEO). The PIU will be staffed with a PIU Head, Procurement Specialist, FM Specialist, and technical experts or specialists on cadastre, IT, NSDI, and legal issues. In order to utilize the capacity built under RECAP, this may be done through direct contracting with respect to the staff that were engaged under RECAP. Otherwise, competitive selection will be used. The PIU will be responsible for day-to-day implementation and for providing specific technical oversight to project activities. The PIU will be responsible for procurement, financial management, monitoring and evaluation, and safeguards (including GRM) under the Project. Other activities include: preparation of annual work plans, donor coordination, public awareness campaigns, and maintaining close cooperation with eligible MCOs.

39. Furthermore, the Acting CEO of the KCA will also appoint staff members who will act as component/subcomponent

leads and work in close cooperation with the PIU staff. KCA's experience in implementing the World Bank-financed RECAP project (2011-2018) has put in place good institutional capacity to implement the Project. Therefore, overall implementation readiness is considered high. The Bank team also stands ready to provide hands-on implementation support to KCA as needed.

40. The Inter-Ministerial Committee on Land Administration (IMCLA) was established in 2009 by a Government Decision. The IMCLA consists of KCA, KPCVA, MESP, PMO, Ministry of Finance, Ministry for Public Administration, Ministry of Local Administration, Ministry of Agriculture, Forestry and Rural Development and others. The invitation to IMCLA meetings is dynamic and can include agencies and ministries as needed to improve coordination efforts where they

20 The randomized control trial looked at the difference in joint registration rates where messaging on women’s land rights was given. When it found such messaging to not be effective due to strong traditions, it tested the messaging on the property rights of children and this messaging was found to be more effective in making joint ownership possible. 21 Ministry in charge of the eGateway.


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are needed most. With the support of the RECAP Project, the IMCLA met twice a year. REGIP will maintain IMCLA to facilitate broader strategic dialogue on land and geospatial issues in Kosovo as well as provide KCA a platform to share Project developments and results.

41. In terms of collaboration and synergies among external parties, Statens Kartverk, which has been supporting activities

at KCA for several years and also funds the joint KCA-KPCVA Working Group, remains a close and natural partner for the World Bank. Coordinated policy on land and geospatial matters and investments related to IT and NSDI will be continued. The REGIP Project will also work closely with USAID, which has finished the Kosovo National Property Rights Strategy with the Ministry of Justice. Finally, REGIP will plan to continue dialogue with KPCVA and KPCVA’s Board to ensure that Kosovo’s two land sector agencies, KCA and KPCVA, are well coordinated.

42. Retroactive Financing. The Government has allocated resources from its own budget for KCA to prepare some Project

activities in advance of Board approval. The amount of retroactive financing will be EUR 500,000 (US$ 565,000 equivalent) for payments made for eligible expenditures from November 14, 2018 until the date of signing of the Financing Agreement. To be eligible, (a) activities to be financed by the retroactive financing must be included in the Project description; (b) the payments must be for items procured in accordance with applicable Bank procurement procedures; and (c) activities must comply with relevant Safeguards policies. In general, Retroactive Financing will finance provision of support for activities such as: support to Draft Cadastre Law, improving CR procedures, contracting CR, data quality improvement, creating inventory of the utility cadastre, updating standards for the building register, upgrade of KCLIS-SOA, upgrade of NSDI Geoportal, development of e-services, and technical training.

B. Results Monitoring and Evaluation Arrangements 43. Project monitoring will include two areas: a) regular output monitoring of project performance and evaluation system

to be established in the first few months of project implementation and this system will monitor the PDO and intermediate indicators; and b) biennial customer surveys that will monitor customer satisfaction and provide a platform for citizen engagement and an important feedback loop for the Project. In total there will be three surveys conducted during the life of the Project. The survey results will influence further capacity building efforts at KCA and MCOs, and the relevant customer suggestions or complaints will guide further improvements of registration services. Survey results and feedback that has been taken on board will be disseminated to the wider public in a user-friendly format. A baseline survey will be conducted during the first year of project implementation.

44. Under RECAP, no formal Grievance Redress Mechanism (GRM) was set up at the time of Project design as this requirement did not exist in 2010. However, RECAP closely monitored the issue of complaints related to the environmental management of rehabilitation works for my minor civil works that took place. These mechanisms were announced through Environmental Management Plans (EMPs) and no complaints were received. Under REGIP, a formal GRM will be set up at KCA to monitor the feedback received from beneficiaries, including citizens, specialized users (e.g. commercial banks, private surveyors, notaries), and relevant Government agencies. The GRM will be supported by an information campaign and training for relevant KCA staff. KCA will respond to all feedback, and the information gathered will also be used to improve services provided and to mitigate any negative social impacts on citizens. The GRM will increase transparency and accountability and with this intends to reduce the risk of Project’s possible unintended adverse effects on citizens. The GRM will also serve as an important feedback and learning mechanism for improving project impact and reducing risk.

45. A dedicated PIU expert will be assigned with the M&E function to provide not only statistical reports but also analysis


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for the quarterly progress reports, which will be provided to KCA and the Bank team.

C. Sustainability 46. On the level of the Project, REGIP will continue to focus on the sustainability of land administration services in Kosovo.

Due to the strong decentralization that was introduced as part of independence, cadastral services, revenues and investments are mixed between central and local government. An imbalance exists at the central level (KCA), which is responsible for investments and maintenance of the cadastral data and systems, while the cadastral service revenues are generated at MCOs and go to the municipalities. This creates a mismatch in revenues and expenditures as KCA often does not have its own resources or reserve funds for essential items like software upgrades and, therefore, relies on Government budget allocations, which may not always suffice. In addition, cadastral staff are appointed by the mayors, creating a large turnover after elections and associated challenges with capacity. These issues were analyzed and initial reform options were presented under RECAP, with the previous government initiating a vertical organizational structure and partial self-financing, as presented in the Government Concept Note drafting the new Law on Cadastre. REGIP will continue to support the preparation and implementation of the new law, focusing on a more sustainable land administration system in Kosovo.

47. In the context of Bank-financed investments in Kosovo, long term sustainability of cadastral services could be

challenged if KCA and KPCVA are not well coordinated on the issue of pre-1999 cadastral documents and their integration into the Kosovo cadastre. If the integration of these documents is not done properly, it could call into question the cadastre reconstruction done under RECAP (EUR 12 million) in approximately 30% of the priority zones of Kosovo. Furthermore, since the return of pre-1999 cadastral documents is still pending and there is no clarity on the timeline of their return, this mandate could also threaten new cadastre reconstruction that is planned under REGIP (EUR 14.6 million) for an additional 30% of the priority zones.

IV. PROJECT APPRAISAL SUMMARY

A. Economic Analysis 48. One of the major challenges Kosovo’s economy and property market face is high levels of informality. The ability to

provide more transparent and higher quality land administration services is contingent on bringing more properties and property owners into the formal system. Therefore, the Economic Analysis of REGIP will focus on the benefits created by cadastre reconstruction, the systematic updating of cadastral information. Once cadastre reconstruction is done, KCA and MCOs put this data on KCLIS, making it available through the formal system in Kosovo. E-services planned under REGIP will be based on KCLIS-SOA and the greater the number of properties recorded or registered in KCLIS, the greater the usability and impact of e-services will be. Similarly, the Geoportal will benefit from a more complete and accurate data set. To summarize, cadastre reconstruction along with data quality improvements and data entry and usage in KCLIS would help improve the quality and transparency of land administration and geospatial data and services in Kosovo. The majority of the Project’s direct benefits are driven by this.

49. Investments in the digital archive will also have a direct economic impact in two ways. First, it will help improve the

productivity of KCA and MCO staff as they will no longer have to spend hours searching documents in paper archives and instead can search transaction records and history quickly using their computers. Second, the digital archive will


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allow citizens, businesses, and specialized users (e.g. notaries, banks, courts) to save time as they will no longer have to travel across the country to get their documents or wait for MCO staff to do the same for them. Instead, they will be able to access them in their nearest MCO. For the purpose of the Economic Analysis, it is easier to estimate the ex-ante benefits of the digital archive on productivity savings at KCA and MCOs than to estimate the time savings for KCA and MCO customers. Therefore, the direct benefits analysis takes into account only minimal productivity savings at KCA and MCOs.

50. Based on these assumptions and benefits and a discount rate of 12.5%, the Project NPV, IRR, and cost-benefit ratio

summary is:

Since the NPV estimate of EUR 10.12 million is greater than zero and the IRR estimate of 38.3% exceeds the discount rate of 12.5%, the Project represents a sound investment. Details of the benefits, calculations, and sensitivity analysis are presented in Annex 3. The full economic analysis is available in the Project files.

B. Technical 51. REGIP builds on the solid foundations laid by the previous RECAP project. REGIP, therefore, represents the next phase

of investments and reforms that would focus on improving public sector service delivery and strengthening private sector competitiveness through: (a) investments to advance ICT and geospatial infrastructure that improve availability and transparency of public services in order to better serve citizens and businesses; (b) further cadastre reconstruction to improve the quality and availability of correct up-to-date cadastral information and thus enhance the security of tenure; (c) policy and legal reforms that help improve the operating environment; and (d) capacity building initiatives to improve decision-making, particularly with the use of geospatial data. Given RECAP’s experience and the evolving needs of the Kosovo property market, REGIP investments can be said to be both ground-tested and essential for meeting the PDO and also furthering the higher-level objective of improving the security of tenure and the delivery of services in Kosovo. For details, see Section II.D on Results Chain.

C. Fiduciary 52. Financial Management (FM) An FM assessment was carried out to determine the FM implementation risks of KCA,

and to help establish adequate FM arrangements for the proposed Project. Fiduciary responsibilities for the Project will remain with the KCA. The KCA demonstrates apt capacity to maintain adequate FM systems in compliance with the World Bank policies based on: (a) the FM arrangements proposed are similar to those of RECAP financed project implemented by KCA; and (b) continuous compliance with Bank reporting and disbursement requirements was observed during the implementation of RECAP, with accurate and reliable project accounting records, and adequate controls over processing of payments and invoices, and (c) the KCA FM staff are by now familiar with implementation of the Bank-financed projects.

53. There are areas that can be strengthened before Project implementation starts, such as: a. establish financial management and disbursement procedures, including internal controls and roles and

responsibilities of the different institutions involved during the Project implementation and document as

Net Present Value EUR M 10.12

Internal Rate of Return % 38.31%

Benefit-to-Cost Ratio (Undiscounted) x 2.53x

Benefit-to-Cost Ratio (Discounted) x 1.78x


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part of the POM; b. recruitment of a PIU will similar composition as the previous RECAP. A qualified FM specialist would be part

of the PIU to support KCA Budget and Finance Department (BFD) in the implementation of FM requirements for the Project;

c. provision of continuous training and support on Bank FM and disbursement procedures for both the FM specialist and staff in the BFD.

54. The credit proceeds will be disbursed based on the regular IPF disbursement mechanism using traditional

disbursement methods such as reimbursement and direct payments. The KCA’s budget would pre-finance Project expenditures for the respective activities, which will later be reimbursed from IDA credit proceeds, based on Statement of Expenditure (SOEs) documenting such expenditure.

55. As the risk pertaining to insufficient or untimely budgetary appropriation and allocations is substantial, the MESP And KCA should carefully manage the budget planning process to ensure that Project budgets and forecasts re correctly reflected into the Medium-Term Expenditures Framework (MTEF) and the Annual Budget Law, beginning in the year 2019 when the Project is expected to become effective. Project budget appropriations should meticulously reflect the nature of expected expenditures and implementation plan.

56. Quarterly cash-basis IFRs covering all Project activities will be submitted for the Bank’s review within 45 days from the end of the quarter. The annual audit reports on the Project financial statements would be provided to the Bank within six months after the end of each fiscal year. The audit reports would be made publicly available, as per the WBG Policy on Access to Information.

57. Procurement. Procurement will be carried out in accordance with the requirements in the Procurement Regulations

for IPF Borrowers: Goods, Works, Non-Consulting Services and Consulting Services dated July 1, 2016, revised November 2017 and Aug 2018; ‘Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants’ revised as of July 1, 2016; and provisions stipulated in the Financing Agreement.

58. The proposed Project will use the Systematic Tracking of Exchanges in Procurement (STEP) system. STEP is a planning

and tracking system, which would provide data on procurement activities, establish benchmarks, monitor delays, and measure procurement performance.

59. Based on procurement capacity assessment conducted for KCA as implementing agency, it was determined that the

procurement risk is High. The identified risks and the mitigation measures are detailed in the PPSD, which is summarized in Annex 1 of this PAD.

60. A Project Procurement Strategy for Development (PPSD) was prepared to outline the selection methods to be

followed by the borrower during Project implementation in the procurement of goods, works, and non-consulting and consulting services financed by the Bank. The underlying Procurement Plan will be updated at least annually or as required to reflect the actual Project implementation needs and improvements in institutional capacity.

D. Safeguards 61. The Project has been classified as Category B mainly for minor civil works related to office renovation under

Component B.


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(i) Environmental Safeguards. The Project triggers Environmental Assessment (OP/BP 4.01) because of the

minor civil works during the course of the proposed project. The associated environmental impacts would typically include: dust, noise, on-site safety and waste management. The above impacts are to be successfully mitigated through application of the good engineering and construction practices, and with mitigation and monitoring measures to be specified in the project Environmental and Social Management Framework (ESMF) prepared by KCA and approved by the World Bank. This document will provide the necessary environmental and social conditions, guidelines and measures to be taken by the small works contractors to ensure that health, safety and environmental standards were met. Site-specific Environmental and Social Management Plans (ESMPs) or Checklist EMPs will be prepared in accordance with the ESMF provisions aiming to mitigate any environmental and social impacts, to provide the necessary conditions, as well as guidelines and measures to be taken by small works to ensure that health, safety and environmental standards were met.

(ii) Social Safeguards. Similar to RECAP, the Project activities do not require any relocation or resettlement, nor will they cause any physical or economic displacement. Most of the investments consist of the provision of goods and services, as well as minor works for rehabilitation of small-scale infrastructure. Although the Project does not support any activities related to the actual process of receiving, verifying, and comparing the pre-1999 cadastral documents (which will be within KPCVA’s role), it recognizes the potential risks that such activities may entail, including those related to increased insecurity of tenure and possible land market disruptions if pre-1999 cadastral documents are not properly integrated into the Kosovo cadastre. There is no indication when these documents may return, and it may not happen during the lifetime of this Project. With regard to mitigation measures, public awareness activities, meaningful consultations, and establishment and maintenance of project level Grievance Redress Mechanism (GRM) under Component D play an important role. Some of these mitigation measures are financially supported through the project components to ensure their adequate implementation. Detailed procedures for GRM are reflected under the ESMF.

(iii) Environmental Assessment OP/BP 4.01 will also be the basis for developing a comprehensive

communications and consultations strategy and carry out adequate consultations with various stakeholders and setting up a viable grievance redress mechanism addressing both environmental and social impacts of the Project. The ESMF was disclosed to the public in three languages (English, Albanian, and Serbian) on October 26, 2018 and was subject to public consultations on November 2, 2018.

(iv) Involuntary Resettlement OP/BP 4.12 is not triggered as the proposed project does not finance any activities that would require or entail any involuntary taking of land or restrictions of access that may cause economic and social impacts. Additionally, OP 4.12 does not apply to this project as most of the risks are associated with disputes that may arise between private parties in land titling projects (footnote 8).

(v) Other Safeguards. No other safeguard policies are triggered for the Project.

(vi) Grievance Redress Mechanisms. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected


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communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org

V. KEY RISKS

62. Overall Project Risk is rated Substantial. Even though the proposed project is largely a repeater project and reflects

the accumulated experience and lessons learned from RECAP, and it enjoys a high level of Government support and political commitment, the overall risk is considered substantial due to the underlying issues and uncertainties with the KPCVA discussed in this section.

63. The Technical Design and Environmental Risks are considered Low. The Political and Governance, and Macroeconomic Risks are considered Moderate. All other risks are considered Substantial or High and are discussed, along with mitigation measures, in the following paragraphs.

64. Institutional Capacity for Implementation and Sustainability. During RECAP implementation, KCA developed strong institutional capacity for Project implementation. At the same time, Sustainability Risk is rated High due to the following three factors.

65. First, in December 2016, the KPCVA Law was passed, changing the nature of the former Kosovo Property Agency and

creating the new Kosovo Property Comparison and Verification Agency. Since then, one of the Agency’s mandates is to process the pending return of pre-1999 cadastral documents. The return of these documents could help fill certain gaps in the Kosovo cadastre. At the same time, if the pre-1999 documents are not properly integrated into the Kosovo cadastre, it could potentially decrease tenure security (particularly for third-party bona fide property owners) and cause disruptions in the property market. This, in turn, could affect the sustainability of cadastre reconstruction investments already made in 30% of Kosovo’s priority CZs under RECAP as well as new CR investments planned under the REGIP project. During REGIP preparation, several discussions took place to potentially include KPCVA as an implementing agency under REGIP so these risks could be better managed. However, these discussions were inconclusive. Therefore, as a mitigation measure, REGIP has unallocated funds in the amount of US$ 0.5 million that could be used to support KPCVA at a later date subject to a Project Restructuring. Additionally, REGIP has planned a strong engagement with KPCVA through a joint KCA-KPCVA Working Group under Component D so that Kosovo’s two land sector agencies—KCA (REGIP implementing agency) and KPCVA—have a formal mechanism to coordinate and work on land sector issues. Finally, REGIP will also support training and capacity building at KPCVA, also through Component D.

66. Second, KCA’s institutional capacity with respect to issues like self-financing and driving uniform practices through MCOs is weak due to the absence of a vertical organization of cadastral services in Kosovo under KCA. In other words, MCOs report to their respective municipalities, which in the past led to issues like staffing of MCOs and the uniform use of software to enter and maintain data in KCLIS. Furthermore, MCO revenues go entirely to the respective

http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service

http://www.inspectionpanel.org/


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municipalities and KCA remains dependent on budget from MESP for the maintenance of IT systems and CORS network etc., which affect property market service delivery across Kosovo. As a mitigation measure, REGIP has incorporated activities related to policy and legal and regulatory support (e.g. support to prepare and implement the draft law on cadastre) to tackle the issue of sustainability of cadastral services in Kosovo.

67. Third, under RECAP, the loss of KCA and PIU staff, especially personnel with strong IT expertise, posed a risk to the

successful implementation of RECAP. If similar trends continue, such a risk can be expected to affect the implementation of REGIP, particularly Component C on IT and NSDI. As a mitigation measure, REGIP will continue to support technical training and capacity building at KCA and PIU with a focus on IT and NSDI.

68. Social. The Project’s Social Risk is rated Substantial. As described above, if pre-1999 cadastral documents are not integrated properly into the Kosovo cadastre, it could lead to social risks such as decreased security of tenure, particularly for third party bona fide owners, and potential land market disruptions. In terms of mitigation measures, the Project will support improved coordination between KCA and KPCVA through the joint working group supported by Component D. Additionally, policy dialogue on the issue of pre-1999 cadastral documents may be facilitated by a Bank-Executed Trust Fund, which among others, will support the preparation of case studies focused on market-level impacts of the pending return of the pre-1999 documents. Finally, social risk will be mitigated through the establishment of a GRM and the use of public awareness campaigns.

69. Stakeholder. The Project’s Stakeholder Risk is rated Substantial. Despite strong commitment from the Government

of Kosovo, the sustainability of REGIP will be driven by the coordination between KCA, KPCVA, and other key players in the Kosovo land sector, including MESP and donors such as Norwegians (SK) and USAID. Given the number of stakeholders involved in the process, the stakeholder coordination will remain critical throughout the life of the Project. As a mitigation measure, the Project will support stakeholder consultations through the IMCLA meetings and other channels to facilitate an open discussion, information sharing, and consensus-building among the various stakeholders. With the support of SK, a joint working group between KCA and KPCVA has already been established. REGIP will continue to support this Working Group under Component D. Additionally, the Bank team will continue its high-level dialogue with the new Board of the KPCVA, which consists of representatives from the UK Embassy, Political Office of the US Embassy, and the EU Special Representative (EUSR) in Kosovo.22

70. Sector Strategies and Policies. Similar to the issue described under Stakeholder Risk, REGIP sustainability and overall property market risk in Kosovo will depend on coordinated Sector Strategies and Policies, particularly the work between KCA and KPCVA. For this reason, the risk is rated Substantial. As a mitigation measure, the Project will support stakeholder consultations through the IMCLA meetings and other channels to facilitate an open discussion, information sharing, and consensus-building among the various stakeholders. Similarly, REGIP will ensure strong donor coordination between the World Bank, SK, USAID, EU, and others.

71. Fiduciary. The fiduciary risk is considered High, and this risk is driven by different factors. First, Kosovo is prone to corruption and this is an issue that affects the entire portfolio. Considering the general operating environment and country risk, the fiduciary risk is rated High. As a mitigation measure, the Project will include the use of standard accounting software as well as training and capacity building measures that can help reduce this risk. Second, there may be an additional risk related to KCA’s capacity on the application of the new procurement policy framework of the Bank. As a mitigation measure, the Project will include the recruitment of Procurement and Financial

22 The new KPCVA Board members were appointed in October 2018. They represent the 3 internationals representatives on the KPCVA Board. 2 local representatives are yet to be appointed. The Bank team will reach out to them as soon as the appointments as finalized.


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Management experts as part of the PIU to support KCA; development of clear procedures for project management, financial management and procurement; and training and capacity building measures that can help reduce this risk.

.


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VI. RESULTS FRAMEWORK AND MONITORING

Results Framework COUNTRY: Kosovo

Real Estate & Geospatial Infrastructure Project

Project Development Objectives(s)


Project Development Objective Indicators

RESULT_FRAME_T BL_ PD O

Indicator Name DLI Baseline End Target

Quality of land administration and geospatial data and services.

Number of properties updated, validated, or registered in the digital cadastre register (Number)

0.00 300,000.00

Target land area in priority cadastral zones with user or ownership rights recorded as a result of the Project (Percentage)

30.00 60.00

Availability of land administration and geospatial data and services.

Number of e-services implemented (Number) 0.00 3.00

Number of datasets available through the Geoportal (Number) 10.00 30.00

PDO Table SPACE


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Intermediate Results Indicators by Components

RESULT_FRAME_T BL_ IO

Indicator Name DLI Baseline End Target

Policy, Legal, and Institutional

KCA strategy and business plan developed (Yes/No) No Yes

Cadastre Modernization

Number of priority cadastral zones reconstructed as a result of the Project (Number) 162.00 302.00

Number of cities for which inventory of utility data has been completed (Number)

0.00 3.00

Number of MCOs with building footprints captured for the building register (Number)

0.00 12.00

Percentage of properties updated, validated, and registered in the name of women (Percentage) 16.80 20.00

Percentage of cadastral zones undergoing CR with local participation on CR Commission (Percentage) 0.00 90.00

ICT and Geospatial Infrastructure

Number of key registers with which KCLIS-SOA is interoperable (Number) 0.00 4.00

Number of annual hits on the NSDI Geoportal (Number (Thousand))

750.00 1,000.00

Number of MCOs with digital archive completed (Number) 16.00 35.00

Project Management, Capacity Building, Public Outreach, Monitoring & Evaluation

User satisfaction with KCA and MCO services (Percentage) 0.00 70.00

Number of KCA/MCO and KPCVA staff receiving training (Number)

0.00 300.00

IO Table SPACE


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UL Table SPACE

Monitoring & Evaluation Plan: PDO Indicators

Indicator Name Definition/Description Frequency Datasource Methodology for Data Collection

Responsibility for Data Collection

Number of properties updated, validated, or registered in the digital cadastre register

This indicator measures the number of properties updated, validated, or registered in the digital cadastre register in KCLIS through the process of cadastre reconstruction under the REGIP Project

Semi-annual

KCA/MESP, PIU

KCA IT systems and CR process

KCA/MESP, PIU

Target land area in priority cadastral zones with user or ownership rights recorded as a result of the Project

This indicator measures the percentage of priority cadastral zones where cadastre reconstruction has been completed.

Semi-annual

KCA/MESP, PIU

CR process

KCA/MESP, PIU

Number of e-services implemented This indicator measures the number of e-services launched under the Project.

Semi-annual

KCA/MESP, PIU

KCA IT systems

KCA/MESP, PIU

Number of datasets available through the Geoportal

This indicator measures the number of new or updated datasets available on the Geoportal

Semi-annual

KCA/MESP, PIU.

National Geoportal

KCA/MESP, PIU

ME PDO Table SPACE


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Monitoring & Evaluation Plan: Intermediate Results Indicators

Indicator Name Definition/Description Frequency Datasource Methodology for Data Collection

Responsibility for Data Collection

KCA strategy and business plan developed Semi-annual

KCA/MESP, PIU

KCA IT systems

KCA/MESP, PIU

Number of priority cadastral zones reconstructed as a result of the Project

This indicator measures the number of priority cadastral zones where cadastre reconstruction is conducted

Semi-annual

KCA/MESP, PIU

CR process

KCA/MESP, PIU

Number of cities for which inventory of utility data has been completed

This indicator measures the number of cities for which the inventory for utility cadastre has been completed

Semi-annual

KCA/MESP, PIU

KCA IT systems and utility cadastre

KCA/MESP, PIU

Number of MCOs with building footprints captured for the building register

This indicator will measure the number of MCOs where building footprints are captured for the building register

Semi-annual

KCA/MCOs

KCA/MCOs

KCA/MESP, PIU

Percentage of properties updated, validated, and registered in the name of women

This indicator measures the percentage of properties owned jointly or solely by women as confirmed by cadastre reconstruction process

Semi-annual

KCLIS

KCLIS

KCA/MESP, PIU

Percentage of cadastral zones undergoing CR with local participation on CR Commission

This indicator measures the percentage of cadastral zones (where cadastre reconstruction will take place) with local

Semi-annual

KCA/MESP, PIU

CR data

KCA/MESP, PIU


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participation on CR Commission

Number of key registers with which KCLIS-SOA is interoperable

The indicator measures the number of external key registers with which KCLIS-SOA is interoperable.

Semi-annual

KCA/MESP, PIU

KCLIS-SOA

KCA/MESP, PIU

Number of annual hits on the NSDI Geoportal

This indicator measures the number of annual hits on the Geoportal

Semi-annual

KCA/MESP, PIU

Geoportal

KCA/MESP, PIU

Number of MCOs with digital archive completed

This indicator measures the number of MCOs for which digital archive is completed

Semi-annual

KCA/MCOs

KCA/MCOs

KCA/MESP, PIU

User satisfaction with KCA and MCO services

Semi-annual

Customer surveys in Years 1, 3, and 5

KCA IT systems

KCA/MESP, PIU

Number of KCA/MCO and KPCVA staff receiving training

This indicator measures the cumulative number of (non-unique) KCA/MCO and KPCVA staff receiving training over the lifetime of the Project. This indicator will be gender-disaggregated.

Semi-annual

KCA/MCOs, KPCVA

KCA/MCOs, KPCVA

KCA/MESP, PIU

ME IO Table SPACE


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ANNEX 1: Implementation Arrangements and Support Plan

COUNTRY: Kosovo

Real Estate & Geospatial Infrastructure Project Project Institutional and Implementation Arrangements

1. The proposed Project will replicate the implementation arrangements that have been successfully put in place under

the previous Bank-financed RECAP Project (closed June 30, 2018) with KCA as the implementing agency. During RECAP, the KCA has had a good record with Procurement and Financial Management as well as the management of Environmental and Social Safeguards, and the Project’s performance was deemed Satisfactory.

2. KCA will implement the Project in close cooperation with Ministry of Environment and Spatial Planning (MESP; KCA’s line ministry), and Municipal Cadastre Offices (MCOs). Other stakeholders such as Ministry of Finance (MOF), Ministry of Public Administration (eGateway), KPCVA and other public and private sector institutions producing and managing geospatial data will be involved as needed.

3. A Project Implementation Unit (PIU) will be established at KCA and will report to the KCA CEO. The PIU will be staffed with a PIU Head, Procurement Specialist, FM Specialist, and technical experts or specialists on cadastre, IT, NSDI, and legal issues. The PIU will be responsible for day-to-day implementation and for providing specific technical oversight to project activities. In order to utilize the capacity built under RECAP, this may be done through direct contracting with respect to the staff that were engaged under RECAP. Otherwise, competitive selection will be used. The PIU will be responsible for procurement, financial management, monitoring and evaluation, and safeguards (including GRM) under the Project. The Acting CEO of KCA will also appoint staff members who will act as component/subcomponent leads and work in close cooperation with the PIU staff. KCA's experience in implementing the World Bank-financed RECAP project (2011-2018) has put in place good institutional capacity to implement the Project. The Bank team also stands ready to provide hands-on implementation support to KCA as needed.

4. The REGIP Project will be implemented in accordance with the Project Operations Manual (POM), which will include: (a) a detailed description of Project components and their implementation arrangements; (b) detailed Project cost estimates; (c) procurement, financial management and disbursement arrangements; and (d) roles and responsibilities of staff working on the Project; and (e) roles and responsibilities of the agencies/stakeholders involved in the Project implementation. The POM will be amended periodically to incorporate adjustments during Project implementation, in agreement with the Bank. Other integral Project documents include the PPSD, Procurement Plan, and ESMF.

5. Given the importance of KCA and KPCVA’s work for the land market in Kosovo, a joint KCA-KPCVA Working Group on property market in Kosovo was established with the support of the Norwegian Mapping Authority (Statens Kartverk). This group will be continued under the Project and it will facilitate official collaboration between the KCA and KPCVA.

6. The Inter-Ministerial Committee on Land Administration (IMCLA) was established in 2009 by a Government Decision.

The IMCLA consists of KCA, KPCVA, MESP, PMO, Ministry of Finance, Ministry for Public Administration, Ministry of Local Administration, Ministry of Agriculture, Forestry and Rural Development and others. The invitation to IMCLA


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meetings is dynamic and can include agencies and ministries as needed to improve coordination efforts where they are needed most. With the support of the RECAP Project, the IMCLA met twice a year. REGIP will maintain IMCLA to facilitate broader strategic dialogue on land and geospatial issues in Kosovo as well as provide KCA a platform to share Project developments and results.

Financial Management 8. Financial Management (FM). An FM assessment was carried out to determine the FM implementation risks of KCA,

and to help establish adequate FM arrangements for the proposed Project. Fiduciary responsibilities for the Project will be with KCA. The KCA demonstrates apt capacity to maintain adequate FM systems in compliance with the World Bank policies based on: (a) the FM arrangements proposed are similar to those of RECAP financed project implemented by KCA; and (b) continuous compliance with Bank reporting and disbursement requirements was observed during the implementation of RECAP, with accurate and reliable project accounting records, and adequate controls over processing of payments and invoices; and (c) the KCA FM staff are by now familiar with implementation of the Bank-financed projects.

9. There are areas that can be strengthened before Project implementation starts, such as: a. establish financial management and disbursement procedures, including internal controls and document as

part of the POM (project effectiveness condition), b. recruitment of a qualified FM specialist, part of the PIU, to support BFD in the implementation of FM

requirements for the project c. provision of continuous training and support on Bank FM and disbursement procedures for both the FM

specialist and staff in the BFD.

10. Use of country systems. The Project would rely extensively on elements of Kosovo’s public FM systems, including (i) planning and budgeting, (ii) internal control, (iii) flow of funds and payments, and (iv) accounting and reporting. Kosovo has participated in a number of detailed reviews of its PFM, among them a series of central government PEFA assessments (2007, 2009, and 2015); a municipal PEFA (2011); a country fiduciary review (2012); annual EU-SIGMA reviews; and other analyses by the World Bank. The various reviews have plotted the significant progress Kosovo has made in improving PFM. The Country Fiduciary Assessment conducted in March 2012 showed that key strengths include the sound legal framework, the integrated central Treasury system, and an increasingly effective external audit office. The strengths are offset by limited professional capacities and gaps in implementation. There is considerable scope for improving budget planning and preparation, internal financial control, audits, debt management, and capital investment management. The authorities are aware of these limitations, and progress is occurring with support from donor community. Lagging areas include (i) limited coordination of budgets, MTEF, sector plans, and budget ceilings; (ii) budget preparation that is not fully linked with Treasury systems; and (iii) FM control and audits that are not fully effective.

11. MTEF and the Annual Budget Law are the two main documents presented for assembly review and approval. Public FM in Kosovo is highly centralized in relation to budget policy and institutional control. The annual budget at the beginning of 2016 covered 16 ministries, 8 agencies, approximately 30 independent institutions, reserved powers, and 38 municipalities (although 3 municipalities only partially participate) - excluding resources and activities funded by Serbia.

12. Budget execution is controlled by setting allocation limits, which are based on forecasts of available resources and the individual needs of the spending institution, with due regard for seasonality of revenues and expenditures. The Treasury manages allocations through the year and controls budget execution and cash management based on the


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cash plan submitted by the budget organizations themselves. The Kosovo Financial Management Information System (KFMIS) is an important tool in executing the budget. In general, internal control procedures are well-understood. The Treasury is serviced through the Single Treasury Account (STA) with the Central Bank of Kosovo (CBK), through which all government revenues and expenditures are recorded. Reconciliations between CBK and Treasury records are performed daily. The financial information is entered into the KFMIS, which produces reports. Records and information are produced, maintained, and disseminated to fulfill decision-making control, management, and reporting purposes as needed. Budget execution reports are organized by structure of the budget and present fund balance commitment on a monthly and quarterly basis for each category.

13. Implementing agencies and the FM staff: The Project’s FM will be the responsibility of the Division of Budget and Finance (BFD) in KCA. KCA is a subordinated agency under the MESP. KCA has its own Budget and Finance department and manages payments and financial reporting separately, but consolidated budget and financial statements with MESP. In 2017, MESP issued a new regulation for internal organization in MESP in which centralization of payments in KCA was foreseen. A working group was established to reconsider and reevaluate the process of reorganizing and systematization of jobs, however to date no conclusion was drawn. In case of reorganization of KCA during implementation, MESP and KCA should ensure a smooth transition process, so that project operations and financial management would not be disrupted. MESP Budget and Finance Department has been engaged in previous Bank financed projects.

14. KCA has demonstrated adequate FM capacity for previous RECAP and has generally been in compliance with WB requirements. Support by an experienced FM consultant, part of the PIU, has been provided to KCA’s BFD, and the same arrangements will be adopted for the proposed Project.

15. The FM Specialist will report to the head of BFD and the PIU Head and will work closely with other finance staff on preparing commitments, ex-ante controls in payment of Project expenditures, planning and budgeting of Project, preparation of quarterly IFRs and withdrawal applications. The PIU FM Specialist will have access in KFMIS, to view and generate Project reports. Even though finance staff have attended trainings and workshops on Bank fiduciary and disbursement in the past, continuous trainings and workshops would be delivered in the future.

16. Budgeting. In general, the mechanisms for budgeting and opening the budget (release of funds) in KCA are considered adequate for the needs of the proposed Project. The MoF budget instructions guide budget and planning preparation process. Project budgets and forecasts would reflect inputs from the technical departments and will be based on approved procurement and implementation plan. These budgets would form the basis for allocating funds to Project activities and, after expenditures are paid, for requesting funds from the Bank. To facilitate reporting and planning activities, a unique Project code would be assigned, and all Project activities would be captured by this code. Annual budgetary ceilings monitored by MoF limit the inclusion of the Project activities in the MESP and KCA budget, especially for those items that are not regulated by the investment clause. To mitigate the risk pertaining to insufficient or untimely budgetary appropriation and allocations, KCA should cautiously steer the budgetary planning process and ensure a realistic Project budget and forecast, prepared as above, is included in the MTEF and the Annual Budget Law, beginning in the year the Project is expected to become effective. Project estimates have been included in the draft annual budget for 2019. The annual budget preparation process will be monitored by the KCA, PIU, and the Bank team.

17. Internal controls. General government regulations for processing transactions and approving contracts exist. When gaps are identified, additional measures are put in place for Project activities. Recent external audit reports demonstrate that MESP and its subordinate agencies including KCA is generally in compliance with PFM regulation. For the proposed Project, the KCA is committed to maintaining an effective internal control system to ensure that


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Project expenditures are properly verified and authorized; supporting documents are maintained; accounts are reconciled periodically; and Project assets, including cash, are safeguarded. The Financial Management Manual, part of the POM, will describe the FM, disbursement and internal controls policies and procedures, intended to guide staff and minimize the risk of errors and omissions, as well as delays in recording and reporting. These written standards are to clarify segregation of duties and responsibilities, including level of authority, clear control over funds and assets, and it ensures timely and accurate financial reporting.

18. Accounting System. KCA’s BFD, supported by the PIU, will maintain Project financial records (budget appropriations, allocations, commitments, and actual expenditure) in the KFMIS (Free balance system) on cash basis. The Project chart of accounts would be based on the KFMIS. Project funds and expenditures would be accounted separately and identified by the unique Project code. KFMIS is able to generate Project reports by the nature of expenditure, institution, and program. However, the existing chart of accounts does not enable recording of Project expenditure by activity. The FM specialist would be required to maintain parallel contract monitoring financial data. The data would be cross-checked periodically to KFMIS generated statements.

19. Financial reporting. The Interim un-audited Financial Reports (IFRs) will be submitted on a quarterly basis to the Bank within 45 days after the end of each quarter. These reports will be prepared based on the financial information registered in the KFMIS, and will contain at least the following: (i) statement of sources and uses of funds (with expenditure classified by disbursement category), (ii) statements of sources and uses of funds (with expenditure classified by component), (iii) contract monitoring, and (iii) KFMIS budget execution reports. Annual Project financial statements (AFS) would be prepared for the Project and will be based on IPSAS cash basis. The financial statements would cover the government’s fiscal year, which coincides with the calendar year. The functional and reporting currency is Euro. Support will be provided by the PIU FM specialist in preparation of IFRs and AFS.

20. Audit. The Project’s financial statements, as described above, would be audited annually by Kosovo’s National Audit Office, under terms of reference acceptable to the Bank. The audits of the Project financial statements would be conducted by private auditors acceptable to the Bank and the audit fees would be financed from Project resources, in case the performance of the audits of National Audit Office is not satisfactory to the Bank. The audited financial statements shall be presented to the Bank no later than six months after the end of the fiscal year and would be made publicly available in a timely manner acceptable to the Bank. There are no overdue audits from the KCA on closed projects. Disbursements

21. The Project would be financed entirely by an IDA credit. The credit proceeds will be disbursed on the basis of the

regular IPF disbursement mechanism using traditional disbursement methods: reimbursement and direct payments.

22. While advances are not opted by the MoF, the preferred method of disbursement is reimbursement of funds pre-financed from the budget to finance Project expenditures. Therefore, no Designated Account will be used. In addition, direct payments to third parties (consultants, suppliers, and contractors) can be used. The FM specialist would prepare all relevant documents in support of applications for withdrawal. KCA and MoF authorized official would act as authorized signatures.

23. Bank funds disbursed using the reimbursement method would be documented by Statement of Expenditures (SOEs) to support applications for withdrawal. Upon receipt of each application for withdrawal from the credit account, the Bank shall, on behalf of the recipient, withdraw from the credit account and deposit into the Single Treasury Account


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an amount equal to the amount requested.

24. For direct payments, the Bank would require copies of the original documents evidencing eligible expenditures in such form and substance as specified in the Disbursement Letter. Records include such documents as invoices and receipts. KCA is required to maintain original documents evidencing eligible expenditures, making them available for audit or inspection. These documents should be maintained for at least two years after receipt by IDA of the audit report and for a period required by local legislation.

Procurement

13. Procurement will be conducted according to the World Bank’s Procurement Regulations for IPF Borrowers’ (the Regulations), issued in July 2016, and revised November 2017 and August 2018 for the supply of goods, works, and non-consulting and consulting services, and the Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants, dated October 15, 2006 and revised in January 2011 and as of July 1, 2016. Under the Regulations the Project Procurement Strategy for Development (PPSD) is used to analyze and determine the optimum procurement approach to deliver the right procurement result. The PPSD carried out for the project entailed a strategic assessment of the operating context and beneficiaries’ capabilities, as well as the market, the different stakeholders, and the risks impacting procurement processes, and it informed the Procurement Plan.

14. Most of the technical services would involve open and International Competition (under Request for Bid method), but during project life a few packages may also involve the use of and Request for Quotation. The project will use the online tool STEP (Systematic Tracking of Exchanges in Procurement).

15. Project Procurement Strategy Development. As per the requirement of the Regulations, a Project Procurement Strategy Document (PPSD) has been developed and finalized after review by the Bank. Extensive market analysis has been carried out for different packages of procurement and based on the findings, decisions on packages and lots are finalized for goods and technical services to ensure adequate participation of bidders. Consultancy contracts are also framed based on market research and packaging of the same in terms of scope of services are decided. Based on the PPSD, the procurement plan has been prepared to set out the selection methods to be followed by the Borrower during project implementation in the procurement of goods, technical services and consulting services financed by the Bank.

16. Project Procurement Development Objectives (PPDO). The project procurement development objectives are the following:

(a) To ensure procurement efficiency and ensure value for money that contributes to Systematic registration activities that will also increase access to finance and reduce informality in the economy; (b) To ensure appropriate market participation in relatively low to medium value technical services that are critical for realizing project development objectives; and (c) To ensure effective contract management that facilitates the market access for launch of e-services for land administration that will improve the availability and quality of services across the country procured through the project.

17. Project Procurement Result Indicators. The achievement of the PPDO will be measured by the following indicator: (a) Timely completion of major contracts by 75 percent.


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18. Key procurement under the project. The following procurement methods are anticipated under the project: (a) Procurement of Goods, Works, and Non-Consulting Services. Goods and works required under the project would

include goods contracts such as IT hardware, equipment to support scanning, reengineering of MCOs etc. There are technical services anticipated for implementation of Components B and C. To implement these components several packages of technical services are planned to support cadastre reconstruction, scanning of documents as well Orthophoto.

(b) Information and Communication Technologies (ICT) procurement: Several packages of ICT procurement are anticipated to support IT system upgrades and the launch of e-services including procurement of IT hardware and software.

(c) Selection of Consultants: Consulting services will be procured for Implementation of NSDI strategy, Support for drafting of KCA regulations, Public awareness campaign for Cadastre Reconstruction etc. Short lists of consultants for services estimated to cost less than US$300,000 equivalent per contract may be composed entirely of national consultants in accordance with the provisions ECA Regional Procurement Thresholds. Individuals will be selected in accordance with Regulation for Borrowers. All Terms of References (TORs) are subject to the Bank’s prior review irrespective of prior/post review status.

19. Advertisements: A General Procurement Notice (GPN) will be published online on the UNDB website. Specific Procurement Notices (SPN) will be published as the corresponding bid documents become available. All these advertisements shall be made through STEP system.

20. Debarments: The Borrower will respect debarment decisions by the Bank and will exclude debarred firms and individuals from the participation in the competition for Bank-financed contracts. Current listing of such firms and individuals can be found at the following website address: http://www.worldbank.org;/debarr.

21. Assessment of the Agency’s capacity to implement procurement: The Bank team has carried out an assessment of

the procurement capacities of KCA, which will be the implementing agency. The proposed project will replicate the procurement arrangements that have been successfully put in place under the previous Bank-financed RECAP Project (closed June 30, 2018) with KCA as the implementing agency. During RECAP, the KCA has had a good record with Procurement, and the procurement capacity was deemed Satisfactory. The procurement assessment, based also on the implementation experience of RECAP Project, concluded that:

(i) The KCA has gained experience on World Bank procurement procedures. (ii) Beside showing satisfactory performance on RECAP project implementation and procurement

activities, some issues were observed such as delays on procurement process, some equipment purchased were found still on boxes (not installed), etc. In overall, the procurement risk under RECAP Project was substantial;

(iii) The KCA PCO staff were involved on a part-time basis until RECAP Project was closed; (iv) Hiring of new PCO staff with experience under the Bank procedures would be a challenge given the

MoF Decision issued on June 2016 in regard to the salaries of the civil servants, as it may reduce the interests of qualified staff to participate in competition.

(v) Kosovo environment has been identified with high risk on corruption; pressure of height level officials to influence in the results of the selection/tendering process is an issue identified in the Bank’s project portfolio.

(vi) Differently from the RECAP project, the REGIP procurement activities shall be conducted based on new procurement Regulations, and all procurement activities shall be conducted through STEP.

http://www.worldbank.org;/debarr


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Based on the above, the procurement risk is assessed as High. To reduce the identified risk, the following measures are proposed to mitigate the procurement risk rating to Substantial: (a) The PIU staff shall be hired under full time basis, to respond to the demands of the REGIP project; (b) additional technical staff to support KCA/PCO on technical matters, shall be hired; (c) (e) The KCA should set up in timely manner the evaluation committee for evaluation of bids/proposals; committee members should have solid knowledge in the field of the assignment. The KCA PCU is familiar with the Bank’s bidding documents and procedures while some additional training on the new procurement Regulation is needed, and when local bidding is conducted, the standard documents will be reviewed to be acceptable to the Bank.

22. Frequency of Procurement Supervision. In addition to the prior review supervision to be carried out by the Bank

team, the capacity assessment of the Implementing Agency recommends supervision missions every six months during the first year of implementation, and once every subsequent year. Post reviews will be carried out regularly with a minimum sampling of two into ten.

23. Procurement methods and thresholds: Procurement thresholds and prior review thresholds. The procurement plan shall set forth those contracts which shall be subject to the World Bank’s mandatory Prior Review. It is proposed to follow the procurement thresholds applicable effective July 2016, as part of the new procurement framework.

Thresholds for Procurement Approaches and Methods (US$ thousands)

As of June 15, 2016

Works

Goods, IT and non-consulting services

Shortlist of national consultants

Country Region

Open internation

al ≧

Open national

<

RfQ

≦

Open internation

al ≧

Open national

<

RfQ

≦

Consulting

services <

Engineering & construction supervision

Kosovo ECA 5,000 5,000 200 1,000 1,000 100 300 N/A


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Contract Title,

Description Category

Estimated

Costs (US$)

Bank

Oversight

Procurement

Approach Selection method Evaluation Method

Contract

signature

date

Contract

completion

date

Component A: Policy, Legal, and Institutional

Development of an

updated KCA strategy

and business plan

100,000 Post Open Consultant’s

Qualification Shortlisting 5/20/2019 4/30/2020

Support and

implementation of

cadastre legislation



Land market studies and

analyses 80,000 Post Open

Consultant’s


Component B: Systematic Registration

Local expert for

improving CR process 30,000 Post Open Individual Consultant Shortlisting criteria 2/30/2019 7/30/2019

Local expert for updating

administrative

instructions and manual

70,000 Post Open Individual Consultant Shortlisting criteria 4/30/2019 4/30/2019

Local legal expert for

amending CR laws 50,000 Post Open Individual Consultant Shortlisting criteria 4/30/2019 4/30/2020

Services for cadastre

reconstruction (multiple)

in 140 cadastral zones

3,360,000 Prior Open

Request for Bids

(One-Envelope

Bidding Process)

Qualifying criteria-

the lowest evaluated

cost

11/30/2019 5/30/2023

Unmanned aerial vehicle

(including software and

training)

120,000 Post Open

Request for Bids

(One-Envelope

Bidding Process)



cost

6/30/2019 9/30/2019

Training for KCA and

MCO staff 60,000 Post Open

Consultant’s


Public Awareness and

communications strategy

and plan to maximize

turnout



Implementation of public

awareness strategy plan 160,000 Post Open

Consultant’s



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Training for KCA and

MCO staff 30,000 Post Open

Consultant’s


Analysis of activities to

improve DQI 35,000 Post Open Individual Consultant Shortlisting criteria 9/30/2020 10/10/2022

Strategy and

implementation plan for

DQI

80,000 Post Open Individual Consultant Shortlisting criteria

03/302019 30/10/2019

Development of standard

for digital cadastre

elaborate


Qualification Shortlisting

04/15/2020 09/11/2020

Development of software

for DQI 170,000 Post Open

Request for Bids

(One-Envelope

Bidding Process)



cost

02/04/2020

05/12/2020

Data correction 380,000 Post Open

Request for Bids

(One-Envelope

Bidding Process)



cost

06/15/2020

04/15/2021

TA support for updating

existing or creating new

manuals and Admin

instructions for QC



Quality control of CR

contractors 520,000 Post Open

(Quality and Cost

Based Selection)


the combined

Technical and

financial evaluation

11/30/2019 5/30/2023

Support to create policy

guidelines, legal analysis,

strategy and

implementation plan,

business processes,

metadata, technical

specifications (in line

with INSPIRE)



06/15/2020

07/25/2021

Creating an inventory of

existing utility data held

by the municipalities



01/02/2019 06/15/2019

Creating technical/ admin

guidelines 30,000 Post Open Individual Consultant Shortlisting criteria 4/01/2020 3/30/2021


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Processing utility data

from Pristina municipality

into the utility cadastre as

a pilot


Refine procedures etc

based upon pilot and then

populate the utility

cadastre with data from 3

cities


Update of Building

Register (BR) standards 30,000 Post Open Individual Consultant Shortlisting criteria 8/30/2019 2/30/2022

Enhance and test the

maintenance procedures

for the building register


Convert, upload and

update in KCLIS-CM

under BCC projects


Complete BR in previous

RECAP BCC work (3

MCOs in north)



Architectural design and

supervision of

construction works



Renovation work for 4

MCOs (North Mitrovica,

Zubin Potok, Leposaviq,

Zvecan)

80,000 Post Limited Shopping the lowest evaluated

cost 2/15/2020 7/15/2020

IT equipment (PCs,

scanner, printer) 65,000 Post Limited Shopping


cost 5/01/2020 7/30/2020

Component C: ICT and Geospatial Infrastructure

Analyses of the KCLIS-

SOA data model review

for compliance with the

LADM



KCLIS-SOA further

development and 1,100,000 Post Open

Request for Bids

(One-Envelope


the lowest evaluated 6/10/2019 6/10/2023


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interoperability with other

registers and systems, e-

services development,

upgrading of business

processes and

modifications to cover

registration

Bidding Process) cost

Cadastre Reconstruction

module - Upgrade of

KCLIS SOA to integrate

CR Tool

150,000 Post - Direct contract - 10/01/2019 6/30/2021

Supply of hardware

(equipment for data

centres etc.) and standard

licenses

1,080,000 Post Open

Request for Bids

(One-Envelope

Bidding Process)



cost

11/15/2019 3/30/2023

KCLIS-SOA

modification to cover the

registration of utility

cadastre (including

interoperability with

KCLIS and NSDI

Geoportal); Phase I

(development of system

prototype) and II (system

development)

440,000 Post Open

Request for Bids

(One-Envelope

Bidding Process)



cost

5/20/2020 8/30/2021

Development of modules

for surveyors to download

data, including digital

format

115,000 Post Open

Request for Bids

(One-Envelope

Bidding Process)



cost

10/10/2019 4/10/2023

Awareness campaign and

training of external users

for e-services



05/05/2020 05/03/2022

Archive and Document

Management Strategy, an

action plan and a

scanning and indexing

standard




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Scanning of old archive

of priority offices 1,720,000 Prior Open

Request for Bids

(One-Envelope

Bidding Process)



cost

11/30/2019 3/10/2023

Scanning and metadata

entering operators and for

updating the indexes of

the existing digital

archive as per the

standard including

modifications of existing

software

275,000 Post Open

Request for Bids

(One-Envelope

Bidding Process)



cost

11/30/2019 3/10/2023

ITC strategy update 80,000 Post Open Individual Consultant Shortlisting criteria 8/01/2022 6/30/2023

ICT Strategy

Implementation

(Sustainable Governance

Structure and Maximizing

Investment Efficiency)

240,000 Post Open (Quality and Cost

Based Selection)


the combined

Technical and


12/15/2019 2/15/2023

ICT Technical Training 140,000 Post Open Individual Consultant Shortlisting criteria 5/30/2020 5/30/2022

QA/QC, IT Contracts,

and Project Management 70,000 Post Open

Consultant’s


Socio-Economic Benefits

Analysis 70,000 Post Open

Consultant’s


Kosovo NSDI Strategy

and Action Plan

(including Engagement

Strategy and Action Plan)


Support NSDI Strategy

implementation and KCA

data harmonization with

INSPIRE

350,000 Prior Open (Quality and Cost

Based Selection)


the combined

Technical and


12/15/2019 2/15/2023

NSDI Geoportal upgrade

and further development 410,000 Post Open

Request for Bids

(One-Envelope

Bidding Process)



cost

2/15/2020 6/30/2023

Orthophoto 780,000 Post Open

Request for Bids

(One-Envelope

Bidding Process)



cost

10/01/2019 4/30/2023

Technical services for 900,000 Post Open Request for Bids Qualifying criteria- 3/01/2020 2/30/2023


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data

digitization/harmonisation

including licenses

(One-Envelope

Bidding Process)


cost

Replacement & upgrade

of GNSS equipment,

including software,

licenses and equipment

275,000 Post Open

Request for Bids

(One-Envelope

Bidding Process)



cost

7/01/2019 6/30/2022

Component D: Project Management, Capacity Building, Public Outreach, Monitoring and Evaluation

PIU staff 640,000 Post N/A Direct Selection N/A

M&E 50,000 Post Open Consultant’s


Customer satisfaction

survey (three) 90,000 Post Open

Consultant’s


Operating cost (including

training/workshops,

stakeholder meeting, etc)

260,000 - - - -


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Environmental and Social (including safeguards 24. The Project has been classified as Category B mainly for minor civil works related to office renovation under

Component B. 25. Environmental Safeguards. The Project triggers Environmental Assessment (OP/BP 4.01) because of the minor civil

works during the course of the proposed project. The associated environmental impacts would typically include: dust, noise, on-site safety and waste management. The above impacts are to be successfully mitigated through application of the good engineering and construction practices, and with mitigation and monitoring measures to be specified in the project Environmental and Social Management Framework (ESMF) prepared by KCA and approved by the World Bank. This document will provide the necessary environmental and social conditions, guidelines and measures to be taken by the small works contractors to ensure that health, safety and environmental standards were met. Site-specific Environmental and Social Management Plans (ESMPs) or Checklist EMPs will be prepared in accordance with the ESMF provisions aiming to mitigate any environmental and social impacts, to provide the necessary conditions, as well as guidelines and measures to be taken by small works to ensure that health, safety and environmental standards were met.

26. Social Safeguards. Similar to RECAP, the Project activities do not require any relocation or resettlement, nor will they cause any physical or economic displacement. Most of the investments consist of the provision of goods and services, as well as minor works for rehabilitation of small-scale infrastructure. Although the Project does not support any activities related to the actual process of receiving, verifying, and comparing the pre-1999 cadastral documents (which will be within KPCVA’s role), it recognizes the potential risks that such activities may entail, including those related to increased insecurity of tenure and possible land market disruptions if pre-1999 cadastral documents are not properly integrated into the Kosovo cadastre. There is no indication when these documents may return, and it may not happen during the lifetime of this Project. With regard to mitigation measures, public awareness activities, meaningful consultations, and establishment and maintenance of project level Grievance Redress Mechanism (GRM) in Component D play an important role. Some of these mitigation measures are financially supported through the project components to ensure their adequate implementation. Detailed procedures for GRM are reflected under the ESMF.

27. Environmental Assessment OP/BP 4.01 will also be the basis for developing a comprehensive communications and consultations strategy and carry out adequate consultations with various stakeholders and setting up a viable grievance redress mechanism addressing both environmental and social impacts of the project. The ESMF was disclosed to the public in three languages (English, Albanian, and Serbian) on October 26, 2018 and was subject to public consultations on November 2, 2018.

28. Involuntary Resettlement OP/BP 4.12 is not triggered as the proposed project does not finance any activities that would require or entail any involuntary taking of land or restrictions of access that may cause economic and social impacts. Additionally, OP 4.12 does not apply to this project as most of the risks are associated with disputes that may arise between private parties in land titling projects (footnote 8).

29. Other Safeguards. No other safeguard policies are triggered for the Project. Monitoring and Evaluation


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30. Monitoring and Evaluation (M&E) will be essential in determining the effectiveness of the project. Project monitoring will include two areas: 1) regular output monitoring of project performance and an evaluation system to be established in the first few months of project implementation. This system will monitor the PDO and intermediate indicators; and 2) Biennial customer satisfaction surveys (a total of three surveys during the life of the project) will monitor customer satisfaction. A baseline survey will be conducted during the first year of project implementation to establish starting points for targets. In cases where the indicators are yes/no indicators, interim checkpoints will be set to monitor progress towards the achievement of the respective indicator.

31. An M&E officer will be appointed to conduct M&E functions at KCA. The M&E officer will provide statistical reports as well as an analysis of the statistics produced within the quarterly progress reports to support corrective action, if needed. These reports and analyses will be provided to KCA and the Bank team.

Role of Partners 32. In terms of collaboration and synergies among external parties, Statens Kartverk, which has been supporting activities

at KCA for several years and also funds the joint KCA-KPCVA Working Group, remains a close and natural partner for the World Bank. Coordinated policy on land and geospatial matters and investments related to IT and NSDI will be continued. The REGIP Project will also work closely with USAID, which has finished the Kosovo National Property Rights Strategy with the Ministry of Justice. Finally, REGIP will plan to continue dialogue with KPCVA and KPCVA’s Board to ensure that Kosovo’s two land sector agencies, KCA and KPCVA, are well coordinated.

Strategy and Approach for Implementation Support 33. The Implementation Support Plan (ISP) describes how the World Bank will support the implementation of the risk

mitigation measures identified in the Systematic Operations Risk-rating Tool (SORT) and provide the technical advice necessary to facilitate the implementation of project activities for achieving the project development objective. The main objective of the ISP is to ensure timely award of contracts, quality of consultants’ outputs including timely review and decision-making on outputs by the KCA, effective knowledge transfer, and adherence to the implementation schedule.

34. The ISP also identifies the minimum requirements to meet the World Bank’s fiduciary obligations. Emphasis will be placed on upstream reporting, auditing and accountability, and technical compliance measures to ensure early detection and remedy of problems.

35. The KCA will prepare and submit to the Bank a project implementation progress report on a biannual basis, which will provide the status of project activities and identify implementation issues. These reports combined with site visits will be used as the basis for undertaking substantive reviews of implementation progress and reaching agreement with the client on: (i) the outcome of the reviews, (ii) project areas requiring strengthening and more targeted capacity building, (iii) approaches for the resolution of implementation issues, and (iv) revision of the implementation schedule and verification of consistency between the project activities as planned and the financing plan, if needed. The PIU will also submit a joint annual workplan, updated budget, training requirements, and procurement plan at the end of the calendar year for World Bank non-objection for the following year.

36. The Bank’s task team will provide timely and effective support through a combination of regular check-ins with the client via audio/video means and visiting the country at least twice a year to conduct implementation support missions. An effort will be made to have a project focal person in the Country Office in Prishtina to provide more effective supervision and timely implementation support to KCA.


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Implementation Support Plan and Resource Requirements 37. Technical inputs. Technical knowledge of cadastre reconstruction, IT, NSDI, geographic technical standards and

engineering works and site supervision are required for reviewing bid documents to ensure fair competition through proper technical specifications and fair assessment of the technical aspects of bids/contracts. During project implementation, technical supervision is required to ensure contractual obligations are met. The Bank’s task team and the KCA staff along with the PIU will conduct regular site visits to ensure cadastre reconstruction and the case studies are progressing according to plan.

38. Fiduciary requirements and inputs. Training will be provided by the Bank’s Financial Management Specialist and the Procurement Specialist during project implementation. The team will support both KCA and the PIU in their financial management capacity and to improve procurement management efficiency. Procurement supervision will be carried out on a timely basis as required by the client. Supervision of financial management arrangements will be carried out semi-annually as part of the project supervision plan and support will be provided on a timely basis to respond to client needs. The Bank will conduct risk-based financial management implementation support and supervision within six months from the project effectiveness date, and then at appropriate intervals, as part of its project implementation and supervision missions. During project implementation, the Bank will supervise the project’s financial management arrangements in the following ways: (i) review the project’s quarterly IFRs as well as the project’s annual financial statements and the auditor’s management letters and remedial actions recommended in the auditor’s management letters; and (ii) during the Bank’s implementation support missions, review the following key areas: (a) project accounting and internal control systems; (b) budgeting and financial planning arrangements; (c) disbursement arrangements and financial flows, including counterpart funds, as applicable; and (d) any incidences of corrupt practices involving project resources.

39. Environmental and Social Safeguards: KCA is adequately staffed and has experience in safeguards implementation and monitoring gained from RECAP. The PIU will have a designated specialist covering the issues of environmental safeguards, including preparation and/or review of the prepared checklists, completed screening and successful integration of the checklists into the bidding documents and contracts for works and supervision. The Bank’s Environmental and Social Safeguards Specialists will provide regular support in strengthening the safeguards management capacity of KCA.

Time Focus Skills Needed Resource Estimate Partner Role

First twelve months

Initial consultations to improve CR processes and effectiveness; Start-up of CR contracts, and review of bidding documents; start-up of individual consultants contracts and review of ToRs; M&E arrangements/ defining baselines; Support with case study preparation

Operations Management; Cadastre; IT and NSDI; M&E; Legal; FM; Procurement; Social and Environmental Safeguards

US$ 800,000


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12-48 months

Other

Skills Mix Required

Skills Needed Number of Staff Weeks

Number of Trips

Comments

Task Team Leader Cadastre Specialist ICT and NSDI Specialist Procurement Specialist Financial Management Specialist Environmental Safeguards Specialist Social Safeguards Specialist

10 5 5 3 4 2 2

3 3 3 2 2 2 2

Based in DC Based in ECA Based in ECA Based in DC Based in ECA Based in ECA Based in DC

Partners

Name Institution/Country Role

Kåre Kyrkjeeide Statens Kartverk Partner

Zana Berisha USAID Partner


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ANNEX 2: Detailed Project Description

COUNTRY: Kosovo


1. Component A: Policy, Legal, and Institutional (US$ 0.28 million): The objective of Component A is to provide legal and institutional support to KCA. This component would include the development of an updated KCA strategy and business plan that would inform and guide the future development of cadastral and geospatial data and services in Kosovo.23 Such a strategy and plan would include the vision, aims and objectives of the KCA, and quantify the resources required, the technology and organizational structure, and any legal changes that may be required in order to produce the products and services needed for an ever-increasing range of users. There is evidence to suggest market demand already exists and this can be exploited to move towards a self-financing agency, reducing KCA’s dependence on the Government budget and potentially allowing it to be a revenue-generator for the Government. The component would also support KCA develop the new draft Cadastre Law (and other cadastre legal and regulatory support), a process that began under RECAP with a focus on introducing a vertical organization structure whereby municipal cadastral office staff would be moved under the authority of the KCA authority, for more sustainable cadastral services. If possible, the Law will be shaped to include additional provisions to promote women’s property rights.

2. Component B: Cadastre Modernization (US$ 6.58 million): The objective of this component is to continue the cadastre reconstruction work (updating of cadastral records) that was started under RECAP. So far, approximately 36% of priority zones (estimated at 450 cadastral zones) representing 12% of the land parcels in the territory of Kosovo have undergone cadastre reconstruction. This component aims to add another 33% of priority zones or 12% of land parcels, taking the total number of priority zones to 60% and parcels with updated cadastral information to almost 25% of the total land area. The component would also provide additional support to the national geodetic framework, the initial development of a utility cadastre, further work to develop the buildings cadastre that was started under RECAP, and refurbishment for the remaining cadastral offices. Additionally, activities financed under this component (e.g. utility cadastre, building register, and reengineering of MCOs) will support climate disaster preparation, response and recovery. This component has six subcomponents, which are described below. B1. Cadastre Reconstruction

3. B1.1 Improvement of procedures for the CR process: Building on RECAP’s work, REGIP will focus not only on CR coverage but also the quality of CR. Therefore, this subcomponent will focus on the improvement of CR procedures, incorporating the lessons from RECAP and updating the procedures to reflect the latest international best practices. Cross-organizational working groups will be used to improve the cadastre reconstruction processes and updated procedures will be supported where necessary with appropriate investments. Experience from previous cadastre reconstruction under RECAP has shown that by far the biggest obstacles to completing the register (and matching the situation on the ground) are issues connected with inheritance and informal transactions, so these problems will be assessed and measures taken to address them. Experience has also shown that citizen engagement is a crucial success factor so the subcomponent will seek ways to better inform citizens of the benefits of registration and to provide on-site support during the cadastre reconstruction fieldwork to ensure maximum completion of the register.

23 The current KCA strategy covers the period 2016-2021 but this needs to be revised to look further ahead and to reflect changing circumstances, for example a possible new organizational structure in line with the vertical organization of cadastral services in Kosovo.


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In particular, the subcomponent would support: (a) working groups and workshops to recommend improvements to the CR process, including the Quality Control process; (b) establishing a digital flow line for data updates, maximizing the benefits of digital technology with digital data transfer between agencies and contractors24; (c) updating of Administrative Instructions and the Cadastral Manual to reflect improved procedures agreed by the working group set up for this purpose; (d) preparation of draft amendments to laws and approval of amendments to regulations, where necessary; and (e) contracting specialist support for the processing of UAV derived data.

4. B1.2 Cadastre Reconstruction: This subcomponent will finance CR in 130 cadastral zones that have been selected on the basis of: (a) real estate market activity; (b) planned infrastructure development locations; and (c) age and completeness of existing cadastral records. The choice of cadastral zones is intended to provide the greatest impact in terms of facilitating transactions, expanding access to finance, and decreasing informality in the economy. Lessons learned from using innovative UAV technology in pilot areas25 will be used to design an updated workflow for data capture for those areas where the method is deemed suitable.

5. B1.3 Public Awareness Campaign (including CR): Experience from previous CR has shown that citizen engagement is

a crucial success factor. The degree to which the cadastral records and registration are completed is highly dependent on citizens making claims based upon complete documentary evidence. Public awareness will include a thorough communication campaign for citizens in the target cadastral zones, as well as internal training of KCA staff, MCO staff, and contractors, to reinforce the need for high quality service delivery. The campaign would use innovative methods to reach as wide an audience as possible in Kosovo and around the world to capture the diaspora. The public awareness campaign will be improved by the findings of the working groups mentioned in B 1.1. Special attention will be paid to women’s property rights and outreach to ethnic minorities such as Serbian, Roma, Ashkali, Egyptians, Gorani and Turks. The subcomponent would support: (a) a public awareness and communications strategy and plan; (b) support for CR implementation for KCA and MCO staff and contractors; and (c) publication of public awareness materials in Albanian and Serbian languages.

6. B2. Services for Data Quality Improvement: This subcomponent will support the improvement of data quality by addressing two specific aspects of data quality. First, it will address the problems associated with the quality of data that was in the register before REGIP started (“stock of errors”). Second, it will set standards and controls to assure the quality of new data entering the register under REGIP (“flow of errors”). These standards and controls will be available for use by KCA even after REGIP closes.26 Activities under this sub-component will help to improve the quality of cadastral and land use data, which will improve the monitoring and control of land use.

7. B2.1 Services for Data Quality Improvement: This subcomponent will finance data quality improvement of existing errors in the cadastre. Types of error will be classified and data quality improvement methodologies developed and implemented for each category. The subcomponent would also support a public awareness campaign to encourage citizens to submit missing data (e.g. using crowd sourcing methods), as well as other forms of mass data acquisition.

8. B2.2 Services for Data Quality Control for CR: Under this subcomponent, KCA will provide quality control (QC) to

24 The software changes and processes will be developed in Component C and should be available for sporadic as well as systematic CR updates. 25 UAV technology for cadastral mapping was piloted under a 2016 World Bank Innovation Grant. 26 A preliminary analysis of KCLIS data records showed that the data format is not consistent (standardized), which is partially a consequence of data migration from different software solutions (some municipalities are still using analog records and different graphical software). The data quality issue may generally be divided in three categories: a) incorrect data (legal/textual content and/or graphical positioning); b) data entered with correct content, but not in standardized format, which makes queries more difficult (e.g. old addresses); and c) missing data, such as missing personal number of citizen or address change and not updated. Furthermore, missing personal IDs have been filled in during the data migration and at the time of migration with automatically generated personal ID numbers, different from the Civil Register.


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ensure that all data emerging from the CR process are verified in accordance with Kosovo standards before they are integrated into official records and the KCLIS database. The QC process that was set up under RECAP will be further refined and streamlined under REGIP. The subcomponent would support: (a) the enhancement and further development of QC procedures, including moving to digital workflows; (b) updating existing or creating new manuals and Administrative Instructions; (c) QC of CR contractors – procedures and cadastral data (contracted out). B3. Utility Cadastre

9. B3.1 Utility Cadastre: The Law on Cadastre requires KCA to build and maintain a utility cadastre27 but to date this work has not started. This subcomponent will support the formulation of a strategy to create and maintain the infrastructure/utility cadastre. This will include technical specifications, the definition of procedures, standards, and data collection requirements etc. The KCLIS data model will be extended to include the utility cadastre. Policy guidelines will be created to support the strategy for developing and maintaining the utility cadastre. Further support will facilitate populating the database with utility data from Pristina and 2-4 other large cities over the course of the 5-year REGIP project. The subcomponent would support: (a) creating policy guidelines and a strategy for the utility cadastre, including an implementation plan; (b) creating technical specifications, based on the data model in line with the LADM and to INSPIRE technical specifications for utility (extension to current cadastre data model), metadata, and defining business processes; (c) creating an inventory of existing utility data held by the municipalities; (d) make adjustments to the current legal/regulatory framework, instructions etc.28; (e) creating technical and administrative guidelines, and Standard Operating Procedures, for working and exchanging data between institutions, and permitting access to the data; (f) integrating the utility cadastre within the KCLIS and the NSDI; (g) processing utility data from Prishtina municipality (where there has already been collected data form and posted on the NSDI Geoportal) into the utility cadastre as a pilot; (h) refine procedures and workflows etc. based upon pilot and then populate the utility cadastre with data from 3 cities.29 Establishing utility cadastre can help to enhance climate disaster preparation, response and recovery as it will allow analysis of utilities under climate disaster threats (preparation) and targeting of essential utility reparation activities during disaster response and recovery. Utility cadaster will also improve monitoring and controlling land use as requested by the Climate Change Framework Strategy of Kosovo. B4. Building Register

10. B4.1 Building Register: Initial development of the Kosovo building register took place under the previous World Bank BETA and RECAP projects.30 In parallel, the ProTax2 project has been implemented in the Kosovo Property Tax Office, jointly financed by Sida (Sweden) and the Ministry of Finance. The project ended in 2017 and has made changes to the Property Tax system involving land and buildings. Under REGIP, the sub-component will support: (a) further changes to develop standards; (b) enhance the maintenance procedures for the building register to ensure that once completed it will be kept updated; and c) data digitization, including building footprints of all existing buildings on the 2018 orthophoto. Component C covers the extension of the cadaster data model with the building register and the interoperability of the building register with the NSDI Geoportal, TAX Department and the Civil Register. T(this is under C). The legalization law currently being finalized will guide the specifications, and the new orthophoto

27 Utilities represent one of the four components of the Kosovo cadastre, the others being cadastral parcels, buildings and parts of buildings. 28 The new law on cadastre has some provisions but these need to be strengthened. Kosovo would benefit from having a law that requires municipalities to register new utility items. 29 KCA is expected to share the names of these cities by appraisal. 30 During those projects the following was achieved: (a) text and some graphic data for public buildings in all 30 major urban areas were collected (not private buildings); and (b) MCOs have maintained text data on a sporadic basis for the building register, not all graphic data was complete, and the register has been systematically updated during CR.


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being created later in 2018 can be used to help with the updates. Establishment of a building register will allow controlling and monitoring land use zoning regulations as requested by the Climate Change Framework Strategy of Kosovo. It will also facilitate climate disaster recovery, as it will allow property holders to legally reconstruct buildings they had on their property before disasters. B5. Office Renovation

11. B5.1 Office Reengineering: A number of the district MCOs were reengineered under RECAP and this helped improve the work environment and create a better customer service experience. Under REGIP, this subcomponent will provide support to reengineering of the remaining MCOs, particularly the three Serbian-majority municipalities in the north. The subcomponent will finance renovation (minor civil works with possible dust and noise impact) and the purchase of furniture and IT equipment for the offices. The renovation would be done in using energy efficient approaches.

12. Component C: ICT and Geospatial Infrastructure (US$ 8.14 million): This component’s objective is to support the implementation of the recent KCA IT strategy and the Kosovo NSDI strategy that were developed towards the end of RECAP. Both strategy documents show the vision for: (a) the further simplification of the business processes, (b) increase data standardization and data accessibility that would improve the efficiency of staff and offices, (c) increase transparency and accountability, (d) provide equal access to information, (e) increase the use of the geospatial and other data and services for developing new products and services, and (f) minimize opportunities for corrupt practices. The systems will also provide gender and other disaggregated data for evidence-based decision making and to support the monitoring process of tenure governance towards achieving the 2030 Agenda.31 It will provide new opportunities to the Government, municipalities, non-government organizations, research, academia and the private sector to develop new innovative services and products.

13. On the KCA IT strategy, the component will make investments in further development of the Kosovo Land

Information System towards a Service Oriented Architecture32 (KCLIS-SOA) to support the simplification of business processes, the implementation of the legal changes and the institutional reform over the project period, development of e-services, greater interoperability with other government systems and registers, including the Open Data portal through the government e-Gateway, support to data quality improvement of key data sets under the KCA responsibilities, technical assistance to support the ICT governance, change management and resourcing, quality assurance, quality control and improve cybersecurity, hardware and licenses supply and technical training. The component would support the updating of the IT Strategy and the NSDI strategy to cover the longer period and the development and implementation of an archive and document management strategy and an action plan. The component will the development of a standard for digital archive, data digitalization as well as development of e-services from the central digital archive.

14. On the Kosovo NSDI strategy, investments will be made in technical assistance to update and support the implementation of the National Spatial Data Infrastructure (NSDI) Strategy, which will improve the availability and quality of the services in the country and ensure that multiple agencies and the private sector have an avenue to

31 On 25 September 2015, the UN’s 193 Member States adopted new global goals at the UN Sustainable Development Summit in New York: Transforming our world: the 2030 Agenda for Sustainable Development. 32 The Service-Oriented Architecture (SOA) allows to re-combine existing functions to meet changing customer requirements, to develop new functions rapidly and to scale operations to meet different levels of demand.


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share information, work together and build up new products and services. The subcomponent will support the updating of the NSDI Strategy and the development of a NSDI action plan in line with the endorsed by the United Nations Part 1 of an Integrated Geospatial Information Framework (IGIF) in August 2018, which provides a strategic guidance that enables country specific action plans to be prepared and implemented. Direct benefits will include encapsulating new and innovative approaches to national geospatial information management, implementing integrated evidence based decision-making solutions, and maximizing and leveraging national information systems that are tailored to individual country’s situations and circumstances. The subcomponent will also support the NSDI compliance with the EU INSPIRE Directive for points such as data harmonization with the INSPIRE Technical Specifications for data sets under the KCA responsibilities, metadata, data access and data sharing.

15. The component aims at increasing KCA’s capacities to manage the IT systems and NSDI further implementation over

the long-term and establishment of a new sustainable business model for further development and maintenance of the IT systems in place. Additionally, activities financed under this component (e.g. investments in NSDI) will support climate disaster preparation, response and recovery. This Component has four subcomponents, which are discussed below.

16. C1. KCLIS-SOA Upgrade: KCLIS is a fully centralized, web-based system, which covers cadastre and registration processes, scanning of incoming documents, generation of various statistical reports, including gender disaggregated data on property ownership and is interoperable with the KCA digital archive and the Address Register. The system is in production in 35 MCOs. Under RECAP, KCLIS has been upgraded to a Service Oriented Architecture (SOA) – called KCLIS-SOA, tested and accepted and training of trainers provided. The upgraded system is interoperable with the Civil Register and Business Register in addition to the digital archive and the Address Register. A technical quality audit has been completed with the RECAP support in December 2017. The KCLIS-SOLA roll out to the 35 MCOs started during the project preparation and was completed at the time of the project design, except in the north municipalities. The aim is to put the system in operation in all MCOs, including the three on the north, if that would be possible. KCA has two data centers: the main data center is located at KCA premises and the disaster recovery data center is located at the e-government data center, which is hosting several other systems, such as customs, Civil Register, Business Register, and Taxation. KCA plans and receive each year government funding for system operation and maintenance.

17. The subcomponent will support the development of a module for the licensed surveyors to download data and upload digital cadastre elaborates in a standard GML format33 or to submit the digital elaborates in standard digital format at the local offices, development of e-services for the government and municipal institutions, businesses, specialized users such as commercial surveyors, notaries, banks and for the general public. The subcomponent will support KCLIS-SOA interoperability with other government and municipal systems and registers, including the Open Data Portal thought the Government e-Gateway, such as utility cadaster, building register and property tax system and will be ready for establishing interoperability with the forestry management system, wine cadaster, the system for agricultural subsidies (LPIS) – the actual interoperability will depends on the readiness of the other institutions to connect via government e-Gateway. This subcomponent will also support the upgrade of the ICT system for CR as well as daily maintenance.

18. The subcomponent will finance an analysis of the KCLIS-SOA data model for compliance with the Land Administration Domain Model34, its upgrade, as needed, and extension to cover the utility cadaster (and subsystem)

33 Geography Markup Language File (GML) is used by geographers for storing geographical data in a standard interchangeable format. It has been created by Galdos Systems and supported by the Open Geospatial Consortium. 34 ISO 19152:2012, Geographic information - Land Administration Domain Model (LADM). The new data model will cover all areas under the RGA’s


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and building register. If it proves necessary, the KCLIS-SOA data model will be upgraded.

19. The subcomponent will provide financial resources for KCLIS-SOA’s further development, technical training, hardware supply and technical assistance for systems quality assurance, quality control and to improve cybersecurity.

20. C2. KCA Digital Archive: This subcomponent would support the development and implementation of an archive and document management strategy and an action plan, development of a standard for digital archive, data digitalization and design of e-services from the central digital archive. KCA plans to complete its digital archive and to establish a central archive during the next five to seven years.35 There are 21 MCOs, which archives have to be scanned, including the MCOs on the north. At the time of the project design 35 MCOs have been digitizing the incoming documents, using the KCLIS functionalities. There are several months gaps in the digital archives of the 12 MCOs, as the module for scanning of incoming documents have been implemented after the massive scanning has been completed. Those remaining paper records will be scanned and indexed under the project. The offices can use the existing equipment and KCLIS functionalities and hire scanning operators or the scanning can be outsourced. With the support from the Government of Norway the methodology for scanning and indexing will be reviewed and amended and a standard developed to improve the interoperability of the digital archive with KCLIS-SOA and cost estimation provided for the needed improvements to the already existing digital archive metadata.

21. The subcomponent will support the scanning and indexing of the cadaster reconstruction commissions’ reports for the properties for, which the process has not been completed due to different reasons, for example missing documents at the time of the process completion. The scanned data will be integrated within the digital archive to allow access through a new KCLIS-SOA service, which will provide statistics and fast access to the records to allow the process to be completed, when the barriers are removed. This may require legal changes. The completion of the digital archive would contribute to the reduction in the time to process transactions and would allow simplification of working procedures and optimization of KCA’s and MCOs business operation.

22. The project will finance scanning and metadata entering, including improving of indexes of the already scanned data, equipment supply and technical assistance for development of an archive and document management strategy and an action plan and design e-services for the external users. The e-services from the digital archive will be developed under sub-component C1.

23. C3. ICT Governance, change management and resourcing: This subcomponent would support the establishment of a new business model for the support of the ICT Governance, change management and resourcing, as described in the KCA IT Startegy. The KCA’s Information Technology (IT) Directorate has 7 staff members. At the time of the project design KCA has been planning and receiving government financing on a year base for basic maintenance activities and support to the infrastructure upgrade.

24. A financial mechanism for the long-term support of the IT Directorate would be developed as part of the strategic and business planning activities. In addition, the business plan would cover IT service and performance standards and staff and training policies. This subcomponent would support the implementation of the business plan, including development of detailed job descriptions, training programs (targeting also users) and training modules for key

competency and will be proposed as a national core data model to can be used by other institutions, which can extend it to cover the missing elements for their areas of competency. 35 Under the RECAP the archives of 12 MCOs have been scanned and indexed and the Government of Kosovo has been financing the scanning of the archives of another 5 MCOs.


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users.

25. This subcomponent would also finance temporary technical assistance, where needed, to support IT quality assurance and quality control, ICT contract management and ICT technical training. The assistance would be used for updating of the ICT Strategy for the period after 2021 and for drafting service level and data sharing agreements.

26. C4. Support to the National Spatial Data Infrastructure: In August 2018, the United Nations endorsed Part 1 of an Integrated Geospatial Information Framework (IGIF), which provides a strategic guidance that enables country specific action plans to be prepared and implemented. Direct benefits will include encapsulating new and innovative approaches to national geospatial information management, implementing integrated evidence based decision-making solutions, and maximizing and leveraging national information systems that are tailored to individual country’s situations and circumstances. In Kosovo, the Law on Cadaster requires KCA to act as the national NSDI coordinator. The draft NSDI Law, which is based on the EU INSPIRE36 Directive, has been submitted to the Parliament more than a year ago, but sent back to the government for repeating the process of consultations after the recent elections. The adoption of the NSDI Law is critical for the NSDI further development, NSDI Strategy completion, establishment of working groups, improvement of representation in the NSDI governing body, data standardization and other critical activities. The NSDI Strategy has already been developed, but not adopted, and is now becoming out of date. With the support from the World Bank an NSDI Diagnostics Tool an evaluation has been completed, and will be used to update the draft NSDI Strategy and to develop an Action Pan in order to increase the benefits of investments in NSDI. With a strong donor support in the recent years, particularly from the Kingdom of Norway, the NSDI Geoportal has been developed and is operational, providing users with increasing amounts of geospatial data. The geoportal need an upgrade and further development.

27. The subcomponent would support: (a) updating the draft NSDI Strategy in line with the UN Integrated Geospatial Information Framework and EU INSPIRE Directive, development of an action plan and support for implementation; (b) review of the NSDI legal framework37; (c) development and implementation of engagement strategy and awareness raising to maximize usage; (d) technical training; (e) review and update of the NSDI business model38; (f) development of the NSDI technical framework, achieved by upgrading the NSDI Geoportal with network services for discovering, viewing, transformation, and download; (g) the introduction and support for implementation of international standards for spatial information; (h) the acquisition of a new orthophoto39; (i) support to the upgrade and interoperability of the NSDI Geoportal with the building register, utility cadastre and other priority datasets as identified by the Government; (j) interoperability of the NSDI Geoportal with the Open Data Portal, once the latter is operational; and support the development of innovative solutions and promote entrepreneurship using NSDI, e.g. hackathons, crowdsourcing and machine learning.

28. The subcomponent will also finance technical assistance, supply of licenses for the KCA GIS department (currently different licenses with old versions are in use for the transformation services, producing of topographic maps and geospatial analyses), awareness raising, capacity development, including study visits to EU member states and participation in EU INSPIRE annual conferences and other relevant international and national events, organization

36 Directive 2007/2/EC of the European Parliament and of the Council of 14 March 2007 establishing an Infrastructure for Spatial Information in the European Community (INSPIRE). 37 This would include: including data licensing, intellectual property rights for Geospatial Information, cyber security as well as development of development of regulations to support the NSDI law implementation and data sharing agreements. 38 This would include: financing model, pricing policy, spatial data sharing and distribution among stakeholders, licensing, cost-benefit analysis, spatial data and services access for emergencies. 39 The current orthophoto is from 2012 and the government is planning to deliver a new orthophoto in 2018-2019. The project will finance the supply of orthophoto towards the end of the project.


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of NSDI annual national conferences, upgrade of the existing technical infrastructure and the NSDI Geoportal, as needed, hardware and licenses, supply and installation, and the acquisition of an orthophoto towards the end of the project.

C5. Support for the national geodetic framework

29. C5.1 Services to support GNSS: The Global Navigation Satellite System (GNSS) investments made in the RECAP project will be further strengthened over the 5 years of the REGIP by providing funds to maintain and enhance the current KOPOS (Kosovo Positioning System). The KOPOS system provides a Continually Operating Reference System (CORS). The output from this system provides surveyors (KCA, their contractors and other private users40) with a correction service that allows very accurate positioning using GPS and other GNSS systems. As such it is an essential support tool for cadastral surveying for KCA purposes, and all other surveying applications. KOPOS services provide important revenues for the Government budget and maintaining the system is essential if the services and fees are to be sustainable. This subcomponent would support: (a) replacement and upgrading of GNSS equipment, including some minor re-positioning, where necessary; (b) purchase of three additional licenses for network processing and network adjustment to complete linking and harmonizing the Kosovo GNSS network with neighboring networks; (c) contingency for changing the location of one of the receiver stations, in case they are located in buildings scheduled for renovation or rebuild; (d) upgrading the software for the monitoring receiver stations, administration and monitoring of users, and online support; and (e) purchase of one robotic Total Station for monitoring the positioning of control points in the terrestrial reference network. Support for surveying of gravimetric and leveling networks is planned by Norway so it will not be covered under REGIP.

30. Component D: Project Management, Capacity Building, Public Outreach, Monitoring & Evaluation (US$ 0.7 million):

31. D1. Project Implementation Unit and Donor Coordination: This subcomponent will support the Project

Implementation Unit (PIU) as well as donor coordination with projects financed by the Norwegian and Swedish Governments and other donors who are operating in Kosovo’s land sector and areas touching the land sector.

32. D2. Monitoring and Evaluation: This subcomponent will finance the initial survey to determine an accurate baseline and the appropriateness of targets set in the Results Framework. Ongoing monitoring and evaluation will be carried out to determine REGIP progress and take corrective action should a need emerge.

33. D3. Customer Satisfaction Surveys: This subcomponent will finance three customer satisfaction surveys during the duration of the Project. The first will take place at the beginning of the Project, along with the baseline survey. The subsequent surveys will help determine improvements in customer satisfaction as a result of improvements at KCA and MCOs. Since REGIP will focus on launching e-services for citizens and specialized users, the surveys will shed light on which improvements prove successful and which additional ones may be needed to improve the delivery of cadastre services at KCA. The customer surveys will be designed to specifically seek feedback on the customer experience of the local participatory committees for CR if CR was done in their cadastral zone. Gender-disaggregated data will be collected to better understand women’s service needs and if they face any specific constraints in accessing KCA and MCO services. Whenever possible, the survey sample size and/or targeted focus groups will also gather feedback from ethnic minorities such as Serbian, Roma, Ashkali, Egyptians, Gorani and Turks.

40 There are currently 155 registered users of KOPOS


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34. D4. Public Outreach and GRM. The subcomponent will finance public awareness campaigns as well as a grievance

redress mechanism to collect any complaints and, therefore, increase the transparency and accountability of the Project.

35. D5. Capacity Building: This subcomponent will finance training and capacity building activities at KCA and the MCOs,

which is vital not only to improve public service delivery but also to maximize the impact of investments across the different components. Early in the project, a thorough skills base and training needs assessment will be conducted, based upon whether there is a KCA / MCO joint organization (vertical structure), and a training strategy and detailed long-term training plan prepared, with specific training plans prepared annually. The training strategy will include (a) an assessment of current staff skills and knowledge; (b) an overview of the current and expected future training and education needs, (c) options for training delivery (for example using external or in-house trainers); (d) scope and content of the training programs or activities, (e) an explanation of how each training program or activity is expected to contribute to achieving the objectives of the project; (f) the budget to be made available therefore, taking into account considerations of economy and efficiency; (g) the criteria for the selection of the beneficiaries and the providers of training; and (h) the schedule for implementation of the training activities. Training needs will include training specifically required to support project components, for example CR, IT, NSDI, marketing, but it is also required for subjects that will support the successful operation of the KCA – for example management. Where appropriate, private sector professionals (e.g. surveyors, valuers, real estate agents, lawyers, notaries) will be invited to take part in project supported training sessions, particularly around the launch of e-services. Additionally, training to KCA and MCO staff will include sensitization towards women and ethnic minorities. KPCVA will also benefit from training and capacity building activities.

36. D6. Joint KCA and KPCVA Working Group. The subcomponent will finance the establishment and maintenance of a joint KCA and KPCVA Working Group so the two land agencies have a formal mechanism of coordination and cooperation on land sector issues in the country.


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ANNEX 3: Economic Analysis

COUNTRY: Kosovo


1. The Project Development Objective is to increase the quality and availability of land administration and geospatial data and services.

2. One of the major challenges Kosovo’s economy and property market face is high levels of informality. The ability to provide more transparent and higher quality land administration services is contingent on bringing more properties and property owners into the formal system. Therefore, the Economic Analysis of REGIP will focus on the benefits created by cadastre reconstruction, the systematic updating of cadastral information. Once cadastre reconstruction is done, KCA and MCOs put this data on KCLIS, making it available through the formal system in Kosovo. E-services planned under REGIP will be based on KCLIS-SOA and the greater the number of properties recorded or registered in KCLIS, the greater the usability and impact of e-services will be. Similarly, the Geoportal will benefit from a more complete and accurate data set. To summarize, cadastre reconstruction along with data quality improvements and data entry and usage in KCLIS would help improve the quality of land administration and geospatial services in Kosovo. The majority of the Project’s direct benefits are driven by this.

3. Investments in the digital archive will also have a direct economic impact in two ways. First, it will help improve the

productivity of KCA and MCO staff as they will no longer have to spend hours searching documents in paper archives and instead can search transaction records and history quickly using their computers. Second, the digital archive will allow citizens, businesses, and specialized users (e.g. notaries, banks, courts) to save time as they will no longer have to travel across the country to get their documents or wait for MCO staff to do the same for them. Instead, they will be able to access them in their nearest MCO. For the purpose of the Economic Analysis, it is easier to estimate the ex-ante benefits of the digital archive on productivity savings at KCA and MCOs than to estimate the time savings for KCA and MCO customers. Therefore, the direct benefits analysis takes into account only minimal productivity savings at KCA and MCOs.

4. REGIP’s investments, particularly in IT and NSDI, are expected to result in significant benefits for citizens, businesses,

and specialized users. For example, given the experience of other countries, investments in NSDI datasets and the Geoportal can be used by start-ups to create new products that both create jobs and bring much-needed services to the market. It is difficult to make ex-ante assumptions regarding these benefits. However, the Project will aim to gather relevant data through stakeholder meetings, customer surveys, and focus groups to determine such Project benefits. At this stage, however, they are not quantified and not used to estimate the net present value (NPV) and internal rate of return (IRR) of the Project.

5. The NPV and IRR estimates of the Project are based on the following assumptions:

a. Only direct benefits from cadastre reconstruction and digital archive-driven minimal productivity gains at KCA and MCO are used to calculate Project benefits;

b. The Project benefits are based on a 10-year analysis, 5 years of Project implementation and 5 years of post-project period, as many of the benefits, though not all of them have been quantified, appear for years after the close of land projects e.g. productivity gains from digital archive. This is done to present a more accurate picture and to potentially capture some benefits from e-services and NSDI at a later stage when ex-post data becomes available;


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c. The Project costs are taken as US$ 16.5 million (EUR 15.0 million equivalent assuming a EUR/US$ exchange rate of 1.1). While disbursement will be done over a 5-year implementation period, the NPV and IRR are estimated based on the conservative assumption that all costs are incurred in the first year; and

d. A discount rate of 12.5% is assumed to calculate the Project NPV.

6. Based on the aforementioned assumptions, the Project NPV is estimated at EUR 9.78 million and the IRR is estimated at 37.0%. Since the NPV is greater than zero and the IRR exceeds the discount rate of 12.5%, the Project represents a sound investment. Details of the benefits, calculations, and sensitivity analysis are presented in the next section. Direct Project Benefits (Used for NPV and IRR Calculations)

7. This section delves into detailed explanations of Project benefits as well as sensitivity analysis to show the robustness of the estimates.

8. Cadastre reconstruction financed by REGIP will update the cadastral information for and register 300,000 parcels between 2019 to 2023 (Year 1 to 5 of the Project).41 The cost of sporadic registration of one parcel in Kosovo EUR 150—representing 50% of average monthly wage and even a higher percentage of income of the bottom 40 percent. Therefore, cadastre reconstruction paid for by REGIP will be crucial in clarifying the property rights associated with 300,000 parcels and formalizing the ownership of these parcels, which can then be linked to improvements in the quality and availability of land administration and geospatial data and services.

9. The estimates for the benefits emanating from cadastre reconstruction are based on the following assumptions:

a. 300,000 parcels as the target for CR. b. 80% achievement of target. c. CR starts in Year 2 of Project and is completed in Year 5. d. CR is done at the pace of 10%, 20%, 30%, 40% of total target in Years 2-5 of the Project. e. Sporadic cost of CR is EUR 150 per parcel.

10. This represents EUR 36.0 million cumulative savings for citizens that did not have to pay sporadic registration costs

but will get the benefits of registration.

11. Digital Archive completion financed by REGIP are expected to lead to productivity gains for KCA and MCO staff as they will no longer have to spend hours searching documents in paper archives and instead can search transaction records and history quickly using their computers. Time savings can range from 1 hour for simple sale extracts, 2-4 hours for historical extracts, and sometimes weeks for more complex cases requiring travel to other parts of Kosovo. For the sake of simplicity, a 2-hour time saving per transaction is assumed over transaction requests to KCA/MCO.

12. The estimates for the benefits emanating from the digital archive are based on the following assumptions:

a. 2 hours saved per transaction. b. The average hourly wage in 2019 is estimated at EUR 1.81 based on EUR 320 per month, 8-hour work day,

and 22 working days in a month. c. Number of transactions range from 25,000 in Year 1 of Project and just over 30,000 in Year 5 after which

they stay steady at just over 30,000. While the number of transactions and transaction-related requests in

41 This is a target based on the previous project RECAP, which over a 7-year period registered 330,000 parcels.


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Kosovo far exceed this number, these numbers are taken to remain conservative and given the experience of the previous RECAP project, which showed that the number of transactions and requests (e.g. extracts) where the digital archive would save time could be affected by macroeconomic fluctuations.

d. Digital archive completeness: 30% baseline (RECAP close) and 95% target under REGIP. e. Benefits are calculated from Year 1-10, 5 years of Project implementation and 5 years of the post-Project

period to capture medium-term benefits of investments in the digital archive.

13. This represents EUR 0.96 million productivity savings due to investments in the digital archive.

14. Based on these assumptions and benefits, the Project NPV, IRR, and cost-benefit ratio summary is:

15. The detailed calculations for Project benefits are presented in the table on the next page.

16. The NPV estimate robustness is tested over the percentage of CR target completed (from 50% to 80%) and the discount rate (from 12.5% to 25.0%). The sensitivity analysis below shows that the Project remains a sound investment (i.e. NPV remains positive) for a variety of scenarios, even with lower target achievement and higher discount rate assumptions. The Project NPV estimate of EUR 10.12 million is based on 80% achievement of CR target and 12.5% discount rate.

17. The IRR estimate robustness is tested over the percentage of CR target completed (from 50% to 80%) and the sporadic cost of CR (EUR 100 to EUR 150, as this is a key assumption driving Project benefits). The sensitivity analysis below shows that the Project remains a sound investment (i.e. IRR remains above the discount rate of 12.5%) for a variety of scenarios, even with lower target achievement and lower cost of sporadic registration. The Project IRR estimate of 38.3% is based on 80% achievement of CR target and sporadic registration cost of EUR 150.





NPV Sensitivity (EUR M)

% of CR Target Achieved

10.12 50.00% 60.0% 70.0% 80.0% 90.0% 100.0%

12.50% 1.63 4.46 7.29 10.12 12.95 12.59

15.00% 0.70 3.30 5.90 8.50 11.10 10.75

17.50% -0.10 2.29 4.68 7.07 9.47 9.13

20.00% -0.81 1.40 3.61 5.82 8.02 7.69

22.50% -1.42 0.62 2.66 4.70 6.74 6.41

25.00% -1.97 -0.07 1.82 3.71 5.60 5.28Dis

cou

nt

Rat

e %

IRR Sensitivity (%)

% of CR Target Achieved

38.3% 50.00% 60.0% 70.0% 80.0% 90.0% 100.0%

100.00 2.9% 8.9% 14.5% 19.7% 24.7% 29.4%

110.00 5.9% 12.3% 18.2% 23.7% 29.0% 34.0%

120.00 8.9% 15.6% 21.8% 27.6% 33.1% 38.3%

130.00 11.7% 18.7% 25.2% 31.3% 37.0% 42.5%

140.00 14.5% 21.8% 28.5% 34.8% 40.8% 46.5%

150.00 17.2% 24.7% 31.7% 38.3% 44.5% 50.5%Spo

rad

ic C

R c

ost


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Project Implementation Period Post-Project Period

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Cumulative

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Cadastre Reconstruction

Cadastral Reconstruction Cost (Sporadic) EUR 150 150 150 150 150

Parcels Targeted # 30,000 60,000 90,000 120,000 300,000

% of Target Achieved 80% 80% 80% 80% 80%

Parcels Reconstructed 0 24,000 48,000 72,000 96,000

"Savings" on CR EUR M 0.00 3.60 7.20 10.80 14.40 0.00 0.00 0.00 0.00 0.00 36.00

Digital Archive

Number of employee hours/transaction saved as a result of DA# 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0

Average Hourly Wage EUR 1.81 1.85 1.88 1.92 1.96 2.00 2.04 2.08 2.12 2.16

Average productivity gains/transaction EUR 3.62 3.69 3.77 3.84 3.92 4.00 4.08 4.16 4.24 4.33

Number of transactions (where digital archive helps)# 25,000 26,250 27,563 28,941 30,388 30,388 30,388 30,388 30,388 30,388

% of transactions benefiting from digtial archive% 20% 40% 60% 80% 100% 100% 100% 100% 100% 100%

Number of transactions where digital archive applies# 5,000 10,500 16,538 23,153 30,388 30,388 30,388 30,388 30,388 30,388

Productivity Gains EUR M 0.02 0.04 0.06 0.09 0.12 0.12 0.12 0.13 0.13 0.13 0.96

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Cumulative

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Total Project Benefits (Direct Only) EUR M 0.02 3.64 7.26 10.89 14.52 0.12 0.12 0.13 0.13 0.13 36.96

Total Project Cost EUR M -14.60 -14.60

Net Project Benefits EUR M -14.58 3.64 7.26 10.89 14.52 0.12 0.12 0.13 0.13 0.13 22.36

Discount Rate % 12.5%



