The Community Based Infrastructure Services Sector Project (the initial Project) follows a sector lending approach and supports the main objective of the Government of Kyrgyz Republic (Government) of human development by providing: (i) improved community-based infrastructure services; and (ii) training programs to develop institutional capacity. The Project area covers four oblasts (provinces) - Chui, Jalal-Abad, Osh, and Batken. The Project was designed to provide basic infrastructure services in 730 villages and seven small towns to about 1.5 million persons, of whom approximately 70% were living below the poverty line.
The proposed supplementary grant is required to meet the financing gap that has emerged due to significant increases in construction costs during the implementation period. As a result, the water supply systems in 118 subprojects were prioritized out of the originally planned 240 subproject. The proposed supplementary grant will implement the remaining 122 subprojects by providing much-needed water supply and sanitation services for the rural population as prioritized by the Government. Based on the lessons learned from the initial Project, proposed changes include: (i) simplification of the subproject selection criteria to ensure the selection of community-owned demand-driven and cost effective subprojects; (ii) improvement of technical design criteria for implementing simple, technically sound and cost effective subprojects; and (iii) improvement of implementation arrangements to achieve efficiency and quality during project implementation.
|Project Rationale and Linkage to Country/Regional Strategy
The main reasons for increase in construction cost are attributed to (i) an unexpected surge in the price of the following commodities steel, cement, pipes, and petroleum products. Consequently, the average per capita cost of construction of water supply infrastructure increased from $20 to $80, between the period of the initial Project design and contract awards; and (ii) climatic changes and droughts limited the use of springs and groundwater sources located close to villages and thus, the networks had to be connected to distant water sources. Consequently, the overall scale and cost of subprojects increased manifold.
Despite cash and in kind contributions solicited from many communities, total funding provided under the initial Project was inadequate to meet the original target. Unless additional funding is provided, many communities which had high expectations of benefiting from the Project will remain without safe water supply and sanitation.
The proposed project will implement the remaining 122 subprojects and address the critical water supply and sanitation problems of about 300,000 people, who could not be covered under the initial Project. The project will also cover all the identified rectification works and include the procurement of much needed operation and maintenance tools for sustainable operations.
The World Bank/DFID-assisted Rural Water Supply and Sanitation Project (RWSSP) for the remaining three provinces of the Kyrgyz Republic is scheduled for completion by end-2008. The RWSSP also experienced similar price escalations and the World Bank and DFID are jointly considering additional financing for meeting the planned benefits and impacts.
The initial Project was scheduled to close in December 2006 but due to start-up delays of about two years, the loan closing date was extended to 31 December 2008. Overall progress of the initial Project until 2005 had been slow and the quality of works in some subprojects needed improvements, which was due to weak performance of the project management unit and the consultants. The Government rectified the situation by replacing the entire Project team. The new team streamlined the Project implementation by working on the rectification of previous subprojects, which is currently ongoing, and also completing the remaining new subprojects. To further ensure the quality of all the subprojects in line with the communities' requirement, ADB, in 2008, conducted an extensive field survey of a large number of completed and ongoing subprojects and provided specific solutions to the Government for rectifying all major or minor problems. The initial Project will be completed by end-2008.
Based on the lessons learned, both from ADB and the World Bank/DFID assisted projects, subproject selection criteria and engineering design criteria have been improved, which will ensure selection of strictly demand-driven subprojects, and use of simple, technically sound, and cost effective approaches. The improved implementation arrangements include mandatory steps to ensure communities' involvement at all stages, including identification, selection, planning, design, and implementation of subprojects. A new team of the technical supervision consultants will finalize the detailed engineering design of the subprojects in the light of modified selection and design criteria and provide Project management and implementation support. Besides safe drinking water supply, the Project will focus on rural sanitation, expand the hygiene education program, and ensure intensive training of community organizations on sound financial management, and operation and maintenance practices.