Document of

The World Bank

Report No: ICR0000730

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(IDA-36230 IDA-3623A)

ON A

CREDIT

IN THE AMOUNT OF SDR20.8 MILLION

(US$26.00 MILLION EQUIVALENT)

TO THE

UNITED REPUBLIC OF TANZANIA

FOR A

RURAL WATER SUPPLY AND SANITATION PROJECT

December 31, 2008

AFT: Water & Urban 1 Eastern Africa Country Cluster Africa

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CURRENCY EQUIVALENTS (Exchange Rate Effective January 01, 2008) Currency Unit = Tanzanian Shillings (TSH)

TSH 1 = US$ 0.001087 US$ 1 = TSH 920

FISCAL YEAR July 1 - June 30

ABBREVIATIONS AND ACRONYMS

APL Adaptable Program Loan CAS Country Assistance Strategy DC District Council DCA Development Credit Agreement DWSF District Water and Sanitation Fund DWE District Water Engineer DWSP District Water and Sanitation Plan DWST District Water and Sanitation Team EA Environment Assessment EIRR Economic Internal Rate of Return EMP Environmental Management Plan FM Financial Management FMIS Financial Management Information System FMR Financial Management Reports FMP Financial Management Plans TSP Technical Service Provider FSP Facilitation Service Provider GoT Government of Tanzania IBRD International Bank for Reconstruction and Development ICR Implementation Completion and Results Report ISR Implementation Status Report LGRP Local Government Reform Program LIL Learning and Innovation Loan NCB National Competitive Bidding NGO Non-Governmental Organization NPV Net Present Value NRWSSP National Rural Water Supply and Sanitation Program NSGRP National Strategy for Growth and Poverty Reduction MIS Management Information System MOU Memorandum of Understanding MoW Ministry of Water NAWAPO National Water Policy PDO Project Development Objective POM Project Operational Manual PRSP Poverty Reduction Strategy Paper RWSD Rural Water Supply Division QAG Quality Assurance Group RWSS Rural Water Supply and Sanitation SA Social Assessment SIL Specific Investment Loan TAS Tanzania Assistance Strategy TASAF Tanzania Social Action Fund WATSAN Water and Sanitation

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TANZANIA

RURAL WATER SUPPLY AND SANITATION PROJECT

CONTENTS

Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives and Design........................................... 1 2. Key Factors Affecting Implementation and Outcomes .......................................... 4 3. Assessment of Outcomes ........................................................................................ 8 4. Assessment of Risk to Development Outcome. Rating: Moderate....................... 16 5. Assessment of Bank and Borrower Performance ................................................. 16 6. Lessons Learned.................................................................................................... 18 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners....... 19 Annex 1. Project Costs and Financing.......................................................................... 20 Annex 2. Outputs by Component ................................................................................. 21 Annex 3. Economic and Financial Analysis................................................................. 28 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 32 Annex 5. Beneficiary Assessment/Service Delivery Survey Summary Report ........... 34 Annex 6. Stakeholder Workshop Report and Results................................................... 41 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR..................... 44 Annex 8. Comments of Co-financiers and Other Partners/Stakeholders...................... 54 Annex 9. List of Supporting Documents ...................................................................... 55 IBRD Map

Vice President: Obiageli Katryn Ezekwesili Country Director: John Murray McIntire Sector Manager: Jaime M. Biderman Project Team Leader: Francis Ato Brown ICR Team Leader: Francis Ato Brown

ICR Primary Author: Ephrem Asebe

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A. Basic Information Country: Tanzania Project Name:

Rural Water Supply and Sanitation Project

Project ID: P047762 L/C/TF Number(s): IDA-36230,IDA-3623AICR Date: 12/30/2008 ICR Type: Core ICR Lending Instrument: SIL Borrower: GOV. TANZANIA Original Total Commitment:

XDR 20.8M Disbursed Amount: XDR 20.2M

Environmental Category: B Implementing Agencies: Ministry of Water and Livestock Development Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual Date(s)

Concept Review: 08/30/2000 Effectiveness: 06/26/2002 06/26/2002 Appraisal: 12/10/2001 Restructuring(s): Approval: 03/26/2002 Mid-term Review: 03/18/2005 Closing: 06/30/2006 06/30/2008 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Moderate Bank Performance: Satisfactory Borrower Performance: Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Satisfactory Government: Satisfactory

Quality of Supervision: Satisfactory Implementing Agency/Agencies: Moderately Satisfactory

Overall Bank Performance: Satisfactory Overall Borrower

Performance: Satisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance Indicators QAG Assessments

(if any) Rating

Potential Problem Project at any time (Yes/No):

No Quality at Entry (QEA):

None

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Problem Project at any time (Yes/No):

Yes Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Satisfactory

D. Sector and Theme Codes

Original Actual Sector Code (as % of total Bank financing) Central government administration 5 5 Health 5 5 Sanitation 40 40 Sub-national government administration 10 10 Water supply 40 40

Theme Code (Primary/Secondary) Decentralization Secondary Secondary HIV/AIDS Secondary Secondary Other financial and private sector development Secondary Secondary Participation and civic engagement Secondary Primary Rural services and infrastructure Primary Primary E. Bank Staff

Positions At ICR At Approval Vice President: Obiageli Katryn Ezekwesili Callisto E. Madavo Country Director: John McIntire James W. Adams Sector Manager: Jaime M. Biderman Jeffrey S. Racki Project Team Leader: Francis Ato Brown Alain R. Locussol ICR Team Leader: Francis Ato Brown ICR Primary Author: Ephrem Asebe F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The Project's development objective was to ensure access to improved and sustained water and sanitation services in rural communities in Tanzania. This would be accomplished through the implementation of the new Rural Water Supply and Sanitation (RWSS) sector policy and the preparation of a National RWSS program. To this end, the Project would support a decentralized and demand responsive delivery mechanism and

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help build the institutional foundation for implementing the National RWSS Program both at the central and local government levels. Revised Project Development Objectives (as approved by original approving authority) (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Decentralized and demand-based district implementation model for RWSS validated & operational in 12 project districts.

Value quantitative or Qualitative)

0

12 districts implementation models validated and operational

12 districts implementation models validated and operational

12 districts implementation models validated and operational

Date achieved 06/06/2002 12/31/2007 03/31/2005 03/30/2008 Comments (incl. % achievement)

100 % of target met: 12 out 12 demand-based district implementation model validated and operational in 12 (now 14) project districts which cover an area the size of Uganda.

Indicator 2 : Water supply & sanitation conditions improved in about 250 communities

Value quantitative or Qualitative)

0 250 communities

133 communities plus 4 small towns (serving 550,000 people)

138 communities plus 3 small towns (serving 521,630 people)

Date achieved 06/06/2002 12/31/2002 03/31/2005 03/30/2008

Comments (incl. % achievement)

Coverage - 93.3% of the beneficiaries, in 91% of the planned districts, and 75% of the small towns; Distance travel to fetch water reduced significantly raging from 90% to 40% of the original distance in km. Travel time reduced fromm 82.5% to 60%

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : National RWSS Program and Strategy endorsed by key stakeholders. Value (quantitative or Qualitative)

N/A NRWSSP endorsed

NRWSSP endorsed

NRWSSP launched nation-wide in July 2007

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Date achieved 06/06/2002 12/31/2002 03/30/2007 07/31/2007

Comments (incl. % achievement)

100% target met. National RWSS program was endorsed in March 2007 and launched nationwide in July 2007. The NRWSP was enriched by the lessons learned from the pilot Project and is now under implementation and has attracted $390 million of investments.

G. Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP

Actual Disbursements (USD millions)

1 04/10/2002 Satisfactory Satisfactory 0.00 2 12/17/2002 Satisfactory Satisfactory 1.03 3 05/29/2003 Satisfactory Satisfactory 1.39 4 11/17/2003 Satisfactory Satisfactory 2.86 5 05/17/2004 Satisfactory Satisfactory 3.55 6 11/10/2004 Satisfactory Unsatisfactory 4.70 7 04/28/2005 Satisfactory Unsatisfactory 6.55 8 12/14/2005 Satisfactory Moderately Satisfactory 11.20 9 03/17/2006 Satisfactory Satisfactory 11.86

10 06/19/2006 Satisfactory Satisfactory 14.79 11 12/08/2006 Satisfactory Satisfactory 19.17 12 04/19/2007 Satisfactory Satisfactory 22.50 13 11/30/2007 Satisfactory Satisfactory 25.12 14 01/22/2008 Moderately Satisfactory Moderately Satisfactory 26.63 15 06/25/2008 Satisfactory Moderately Satisfactory 28.50 16 06/30/2008 Satisfactory Moderately Satisfactory 28.50

H. Restructuring (if any) Not Applicable

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I. Disbursement Profile

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1. Project Context, Development Objectives and Design

1.1 Context at Appraisal 1.1.1 Country Context. The Rural Water Supply and Sanitation Project was designed to support several key development objectives of the Government of Tanzania as part of the Bank’s Country Assistance Strategy (CAS). The Project supports the CAS objective of reducing poverty and improving the health condition of vulnerable groups in rural settlements, the Government’s Poverty Reduction Strategy Paper (PRSP) and the Tanzania Assistance Strategy (TAS) with regard to increasing Rural Water Supply and Sanitation (RWSS) services coverage. The launch of the Project on October 15, 2002 in Dar es Salaam was planned to coincide with Tanzania’s launching of the National Water Policy (NAWAPO July 2002). NAWAPO was designed to contribute to the realization of Vision 2025 and the National Strategy for Growth and Poverty Reduction (NSGRP) targets. The Project was also designed to contribute to GoT's decentralization policy under the Local Government Reform Program (LGRP) and the development of the private sector in the water and sanitation services as well as contribute to the control of HIV/AIDS and better sanitation. 1.1.2 Structural/Sector Background. Rural water supply service delivery has undergone several phases since the “free water” policy of 1967. In the early 1970s, significant investments were made in the RWSS sector. However, it was only possible to provide access to a reliable water supply service to about 50% of the rural population. Due to poor maintenance arrangements, a significant percentage of RWSS systems built during that era are not currently functioning. In the 1980s, investment levels were low and support by donors was usually provided in a fragmented fashion. Most RWSS projects were implemented directly by the Ministry of Water (MoW1) through programs funded by donors. Schemes were also operated by MoW and later, by default, by communities themselves. The first wave of reforms came about with the National Water Policy (1991). This policy marked a clear departure from the era of “free water” of 1967 and initiated the principle of cost sharing between GoT and communities. The policy also initiated the transfer of responsibility to operate and maintain RWSS schemes to village water communities. This opened up the path for the Revised National Water Policy (2002). The new Policy, on which the current Project is based, emphasizes: (a) a demand-responsive approach whereby communities choose service levels and appropriate technology based on their perceived needs and ability to pay; (b) an upfront contribution of capital costs and full financing of Operation and Maintenance (O&M) costs by communities as a means to foster ownership of the project; and (c) implementation and management of schemes by communities with the assistance of local governments, NGOs and the private sector. A significant contribution of the 2002 National Water Policy was the changed roles for the GoT and the private sector in water supply and sanitation delivery. The disengagement of MoW central operations from direct identification, management, construction and operation of RWSS schemes and the development of capacities within District Water and Sanitation Teams (DWSTs), Non-Governmental Organizations (NGOs), consultants, contractors and suppliers were the key institutional reforms that the Project sought to support. 1.1.3 Rationale for Bank Assistance. Bank assistance in the Sector sought to provide GoT with the supporting framework and resources for sustainable service delivery. The design of RWSS was informed

1 The original agreement was with the Ministry of Water and Livestock Development (MoWLD). In 2006, the Ministry became the Ministry of Water (MoW), and in 2008 became the Ministry of Water and Irrigation (MoWI). For consistency in this document, the Ministry shall be referred to as the Ministry of Water (MoW).

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by World Bank experience of what worked elsewhere under similar conditions and would likely work under Tanzanian conditions. Bank involvement was informed by: (a) a review of selected bilateral and NGO managed projects in Tanzania, carried out during the preparation of the RWSS policy; (b) regional experience; (c) lessons from global experience compiled during the global RWSS conference held in Washington in May 1998; (d) results of project preparation work; and (e) inputs from the Bank’s RWSS Thematic Group. The alternative instruments explored included; (i) the use of a Learning and Innovation Loan (LIL); (ii) combining activities under Tanzania Social Action Fund (TASAF), (iii) the use of an Adaptable Program Lending (APL). The use of a LIL in three districts was initially considered. However, given the size of the country as well as the amount of preparatory work carried out, GoT considered that a Project focusing on only three districts would not provide enough lessons for scaling-up to the National RWSSP. Combining activities under TASAF was considered but dropped because Social Action Funds, even though they enable strong community ownership, have proven to be inadequate instruments to reform sectors, develop sector institutions and sector capacity in both the public and private sectors. The use of an Adaptable Program Lending (APL) was also considered, but believed to be a better instrument to implement the National RWSS Program that should follow the proposed Project. With an informed background, the right instrument and the resources needed, the Bank was well placed to support the Project.

1.2 Original Project Development Objectives (PDO) and Key Indicators 1.2.1 The Project's development objective was to ensure access to improved and sustained water and sanitation services in rural communities in Tanzania. This was to be accomplished through the implementation of the new Rural Water Supply and Sanitation Sector Policy and the preparation of a National RWSS Program. To this end, the Project sought to support a decentralized and demand-responsive delivery mechanism and help build the institutional foundation for implementing the National RWSS Program both at the central and local government levels. 1.2.1 Key Performance Indicators (KPIs) were:

• Decentralized and demand-based district implementation model validated and operational in up to 12 districts;

• Water supply and sanitation conditions improved in about 250 communities located in up to 12 Project districts; and,

• National RWSS Program and Strategy endorsed by key stakeholders.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/ justification

1.3.1 No formal restructuring was carried out under the project. At the Mid-Term Review in March 2005, however, it became apparent that some measure of corrective restructuring was needed. The PDO and project components were maintained but a number of key indicators (number of communities and the number of beneficiaries) were adjusted. This was in conformity with the demand responsive nature of the Project and slow start up and capacity constraints encountered. It also became apparent that the initial estimates were ambitious when weighed against interpretational problems with definition of a community. Most communities include 4-6 sub-villages surrounding a core registered community. This definition increased the scope of activities to be carried out in a community and the estimated beneficiaries per community. The sub-project cycle and community consultation process followed by the project, resulted in changes in community preferences from hand pump systems to mechanized piped system which were more expensive. To stay within the Project budget, the target of 250 communities was revised downwards to 133 communities but this did not reduce drastically the targeted beneficiaries. Based on

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this assessment and with the growing number of more complex mechanized piped systems, the Bank approved a GoT request for an 18-month extension of the project. This extended the Closing Date to December 31, 2007. A further extension of the closing date to June 30, 2008 was effected in order to ensure successful completion of the outstanding project activities. It also allowed for extensive capacity building of districts for scaling up of RWSS services under the proposed Water Sector Support Program which was then under preparation.

1.4 Main Beneficiaries 1.4.1 The primary beneficiaries of the Project were to be about 650,000 people living in about 250 rural communities and small towns of less than 15,000 in 12 districts, covering an area the size of neighboring Uganda. Women and children who typically spent long hours fetching water of doubtful quality would be the prime beneficiaries of the Project. An additional benefit for the Project was the creation of an enabling environment and capacity for launching a National RWSS Program. As noted above, both the number of rural communities and the initial target beneficiaries were scaled down from 250 to 133 and from 650,000 to 550,000 respectively at Mid-term Review.

1.5 Original Components (as approved). The Project had three main components: 1.5.1 Component 1 - Establishment of the District Implementation Model. (estimated at US$1.20 million): This component was initially started in the three districts of Rufiji (Coast Region), Mpwapwa (Dodoma region), and Kilosa (Morogoro Region), and gradually expanded to 9 other districts out of Tanzania's 113 (now 136) districts. Activities included: (a) support to the establishment and strengthening of operational capacity (equipment support and training) of District Water and Sanitation Teams (DWSTs) to prepare district RWSS plans and to appraise RWSS sub-projects proposed by communities; (b) support to the establishment of district RWSS funds (a sector conditional grant system) to finance the construction of new RWSS schemes, the rehabilitation and expansion of existing systems and other water related small scale investments, and (c) assistance to communities in the proper management and operation of these systems as well as promoting HIV/AIDS mitigation and prevention activities. 1.5.2 Component 2 - Construction of RWSS Community Sub-Projects. (estimated at US$21.30 million): This component consisted of sectoral conditional grants to about 250 (revised to 133) communities located in 12 districts to improve the WSS service. These included (a) construction or the rehabilitation of existing dug or drilled wells, (b) boreholes equipped with hand pumps or powered pumps, and (c) spring tapping, piped systems, household latrines and community sanitation facilities. DWSTs would employ facilitation service providers (NGOs) for community Facilitation Services Providers (FSPs) and Technical Services Providers (TSPs) for sub-project design and construction supervision. This component was also to support the setting up of a network of private retail outlets for the distribution of spare parts for hand pumps. In addition, a network of certified maintenance hand pumps agents were also to be deployed in the beneficiary districts. The component also included an "innovation window" for exploring community contracting where possible, or technologies and management arrangements not tested in Tanzania. 1.5.3 Component 3 - Institutional strengthening and development of a National RWSS Program. (estimated at US$3.55 million). This component includes; (a) support to stakeholder consultative process on the strategy for scaling up towards a National RWSS Program; (b) technical assistance to the preparation of the National RWSS Program; (c) the development of a Management Information System (MIS) for tracking lessons learned from the proposed Project; (d) assistance to the restructuring of RWSS sector institutions within MoW and (e) the building of the capacity of key stakeholders (MoW, NGOs, consultants, contractors, suppliers of equipment and service providers). This component also included

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dedicated RWSS sector capacity building support to the IDA-financed Tanzania Social Action Fund (TASAF) project districts; as well as assistance to MoW for overall management of the Project.

1.6 Revised Components 1.6.1 All three components were maintained. However, the relative shares of resources originally allocated to the Project components were revised in light of the shift in community demand from the hand pumps to mechanized piped systems as well increased demand for capacity building ahead of the scale up of the National RWSS Program.

1.7 Other significant changes 1.7.1 The Development Credit Agreement (DCA) was amended thrice for the following reasons: • To raise the Special Account Allocation to accommodate the increased project activities from 3 to 12

districts. The authorization allowed an amount equivalent to US$ 3.0 million to be withdrawn from the Credit Account and deposited in Special Account (December 02, 2005).

• To extend the Closing Date and to address: (a) change in the name of the implementing agency resulting from the splitting of the Ministry of Water and Livestock Development into two ministries; (b) re-allocation of the Credit Proceeds among the eligible categories as well as support of preparation activities towards the scaling up of rural water supply and sanitation activities country-wide under the proposed follow-on operation in FY 07 (Water Sector Support Program); and (c) revision of the Performance Monitoring Indicators from 250 communities to 133 communities (March 8, 2006).

• To Extend the Closing Date to June 30, 2008 as per Section 2.03 of the credit agreement (July 17, 2007).

2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry. ICR Rating: Satisfactory. This Project was not assessed by Quality Assurance Group (QAG) for quality at entry. Supporting evidence of the rating is as below; 2.1.1 Adequacy of the Government Commitment. RWSS was identified by GoT as one of the pillars for poverty alleviation and rural development. The National Water Policy’s core principles (efficiency, subsidiarity and integration) were supportive of the objective of the decentralized delivery of water and sanitation services. Furthermore, MoW had taken the initiative to reorganize its Rural Water Supply Division (RWSD) to fit its new role as facilitator and coordinator. A preliminary institutional analysis aimed at restructuring the RWSD was carried out. MoW successfully prepared the project including: Environmental and Social Assessment and Mitigation Plans; Financial Management Plans (FMP), procurement documents and Project Operation Manual (POM); detailed project management arrangements; and identification of sub-projects to be implemented during the first year in the first 3 districts. The first three pilot districts demonstrated their commitment to the Project by actively participating in preparation and by substantially strengthening their DWSTs. Communities also demonstrated commitment to the RWSS program. Due to past efforts, most communities in Tanzania already had a WSS committee and a WSS Fund in a local bank.

2.1.2 Stakeholders’ Involvement. The Project, from its inception, benefited from extensive dialogue with the GoT and stakeholders, starting as far back as 1996. The process initially concentrated around the studies leading to the revision of the National Water Policy in 2002. GoT exhibited strong ownership in formulating the National Water Policy in a participatory manner. A Technical Advisory Committee

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(TAC) was set up to provide oversight at preparation and this function was carried out through Project implementation.

2.1.3 Soundness of the Background Analysis. The preparatory activities underpinning the Project design focused on two key elements; (i) core principles arising out of the National Water Policy and (ii) extensive field studies and surveys. The core principles (efficiency, subsidiarity and integration) are all derived “best practice” lessons from the sector over the last two decades. Detailed field studies and community surveys were also carried in the first three districts to refine the sub-project cycle, test the tools for community engagement and detail out the indicative first year investment program. The structuring of the project to start first in 3 districts before expansion to additional 9 districts proved to be an important design feature of the Project.

2.1.4 Assessment of the Operation Design and the Risks. Given the change from centralized and supply-driven project environment to decentralized and demand responsive implementation arrangements, anticipated risks were identified as follows; (i) potential limited commitment of the RWSD to its new role as facilitator and support agency; (ii) limited implementation capacity of the DWST and private sector; (iii) delays in the release of counterpart funds. Mitigating measures were put in place to reduce these anticipated risks in the course of implementation. Nevertheless, most of these risks materialized during implementation in one form or the other. One risk which was not anticipated was that, with a typical decentralized demand responsive project, one cannot predict accurately community preferences and choices. The assumption that communities will rationally prefer cheaper hand pumps as opposed to more expensive mechanized piped schemes proved to be the reverse. As a result, within the budget envelope, the Project had to work in fewer communities and achieved fewer water points even though the correspondent decrease in population served was not drastic.

2.2 Implementation. ICR Rating: Moderately Satisfactory 2.2.1 Steep Learning Curve. Given the novel nature of the decentralized implementation approach, the Project faced a steep learning curve. As anticipated in the risk assessment, project implementation started slow. Disbursement by Mid-Term Review was 22%. This initial underperformance was attributed to teething problems and to the nature of the demand driven process. The fact that the area covered by the Project is about the size of neighboring Uganda and that some of the sub-project sites were inaccessible during rainy seasons represented some logistical challenges. Some of the boreholes drilled did not yield adequate water or were dry. This contributed to the extended delays and cost overrun. However, it is in the nature of demand responsive projects for things to pick up slowly. The multiple impacts of the new policy principles meant that one needs to spend more time with communities as well as creating the environment for private sector delivery of goods and services which was not available in numbers and quality desired. It is apparent that one cannot definitively predict community preferences and choices especially in an environment where communities share in capital cost and have to take responsibility for operation and maintenance. DWSTs were new institutions and thus experienced slow capacity development. The severe capacity constraints manifested themselves initially in; weak coordination between MoW and districts; inadequate coordination between DWST and service providers and implementing agents and MoW; delays in fund flow management; weak procurement administration as well as slow adaptation of implementation agents (MOW staff, district officials, local consultants, NGOs and contractors) to the scale and pace of the Project. 2.2.2 Proactivity - Learning and Adjusting to Implementation Conditions. After the slow start, MoW found it necessary to introduce changes, to provide time and resources for the extensive capacity building at the local government level not only for the Project but also to meet the challenges due to the scaling up of RWSS services under the proposed Water Sector Support Program. This was accomplished in two parts; (i) technical audit and evaluation of performance leading to the corrective restructuring at Mid-

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Term Review. The Implementation Progress status was downgraded to “Unsatisfactory” in November 2004. The target number of communities was revised downward to focus the effort on a manageable number of communities without a significant decrease in the targeted beneficiaries; and (ii) the re-organization of the RWSD and mainstreaming of the Project into the working arrangements of the RWSD. This brought the full force of the MoW institution for rural water supply to bear on the implementation of the Project and by extension prepared the MoW for the roll out of the National RWSS Program. Implementation results started becoming evident after the Mid-Term Review. The action plan yielded more positive results; disbursement improved; construction activities picked up speed; and the Project was mainstreamed into the activities of the RWSD of the MoW. Consequently, the project’s implementation progress was upgraded first to “Moderately Satisfactory” in December 2005 and subsequently to “Satisfactory” in March 2006. Despite the difficulties, the implementation phase of the Project led to improved capacity building and successful achievement of the expected outputs and outcome with positive impact. The strategy of starting in 3 districts before expanding into all the 12 districts made its mark. The prize is a good project outcome but the cost is an extension of 2 years to have it accomplished. The project duration of 6 years is however not unreasonable for projects of this nature, taking into account the weak institutional base and the spread of activities over a large area.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization. ICR Rating: Moderately Satisfactory 2.3.1 Project Monitoring and Reporting Tools. From inception, the Project management team developed and deployed to all districts and for use of the head office, templates for technical and financial monitoring. These templates were included in the Project Operational Manual. These were field tested and updated for inclusion in both the Community Training Manual and the District Operational Manual. All DWSTs, FSP, TSP and Community Water and Sanitation Committees were trained in the use of the templates. These templates cover (i) project application forms, (ii) Facility Planning and Management forms, and (iii) monthly reporting forms. These were used by communities to report to the district level, DWSTs to report to the MoW and for the MoW to report to the Bank as and when needed and during supervision missions. 2.3.2 Computerised MIS Development. The Project assisted MoW with the development of MIS and M&E protocol. Installation was completed at MoW head office and in 9 districts where they are now operational. Training has been carried out in all 12 districts and baseline data collected for most of the communities in the 12 districts. Data input, however, was very slow, thus limiting the full potential of the MIS in effective planning and M&E. Most districts continue to use spreadsheets as well as the project monitoring and reporting tools mentioned above as a back up and are thus able to report on activities as and when needed without the benefit of full automation. 2.3.3 Annual Technical and Financial Audits. Annual technical and financial audits were designed into the Project as an additional monitoring instrument to measure quality of processes, systems and facilities implemented under the Project.

2.4 Safeguard and Fiduciary Compliance 2.4.1 Safeguards (Environment). ICR Rating: Moderately Satisfactory. An Environmental Assessment (EA) and a Social Assessment (SA) were conducted for the three pilot districts (Kilosa, Mpwapwa, and Rufiji) prior to project appraisal. These assessments covered potential impacts from drilling of boreholes and expansion and rehabilitation of existing facilities as well as current waste disposal situation and the incremental effects of increased water supply in the communities. Based on these assessments, mitigation measures in the related safeguards were developed for the three initial districts and the Project in general. The Environmental Management Plan (EMP) was part of the Project

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Operational Manual and included an EA checklist for screening community sub-projects as well as a checklist of monitoring indicators. The EMP was applied to all project districts. Each supervision mission especially after the Mid-Term Review included a detailed Annex on monitoring of EA and SA safeguards. Overall, districts followed adequate environmental screening during site selection and sub-project implementation. 2.4.2 Procurement. ICR Rating: Moderately Satisfactory. Procurement requirements were complied with but significant delays experienced on some sub-projects. Contracts which were not subjected to prior review were subjected to post review. For post review contracts, relevant documents were retained by both districts and MoW for Bank’s review during supervision missions or audit by a consultant selected by the Bank. A major procurement post review was also conducted in June 2007 and confirmed good practice overall despite some noted delays in processing and inadequate filling in some cases. 2.4.3 Financial Management. ICR Rating: Moderately Satisfactory. Financial management reviews at the district level were carried out by MoW periodically and confirmed during Bank supervision missions. The objective of the reviews was to ascertain the status and adequacy of the Project’s financial management arrangements and its compliance with legal covenants related to financial management. During the reviews, the following aspects of the Project’s financial management arrangements were covered: budgeting, staffing, accounting system, accounting policies and procedures, record keeping, financial reporting, internal control systems, internal and external auditing arrangements, flow of funds (including banking arrangements). The Borrower met it counterpart financing obligation. Project funds transferred to districts were largely accounted for. However, during the course of implementation, some districts experienced delays in funds transfer which hampered timely execution of works in some instances. 2.4.4 Disbursement Management. ICR Rating: Satisfactory. Despite initial delays, progress in disbursement progressively improved after the Mid-Term Review. The entire Credit was used up by the Project closing date and within the stipulated period for settlement of claims within the defects liability period.

2.5 Post-completion Operation/Next Phase 2.5.1 Consolidation of the District Implementation Model. The establishment of the district implementation model proved demanding. With concerted effort, most of the weaknesses were mitigated and substantial institutional capacity has been created to the point that satisfactory performance was observed at closing. However, strengthening institutions should be seen as an ongoing process with a significant learning curve. Some communities in the districts have devised better operational arrangements which promise sustainable funding of operational and maintenance arrangements. The operational arrangements likely to be sustainable include those which allow the community to hire an operator to operate and maintain the water pump and collect the water user fees. Water and Sanitation Committees and Water Funds as well as arrangements for collecting user fee to meet operation and maintenance needs of built systems are now an established practice in all Project beneficiary communities. 2.5.2 Continuity under the Water Sector Development Program. The change in policy from “provision of RWSS services”, which did not work in the past, to the “facilitating and financing of RWSS services”, which has been successfully tested using a district implementation model, has not been easy. The latter has so far proved promising and could deepen the decentralized provision of sustainable water and sanitation services in which the community has a stake in the planning, design, and efficient operation of the services. While attaining sustainability requires protracted and constant learning and adaptation, the institutionalization of the district implementation model is expected to provide over the medium-term, a more sustainable model than the tried and failed centralized model of provision of RWSS services,

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provided the policy incentives continue to be appropriate. The roll out of Project results under the National RWSS Program which is part of the follow-on Water Sector Development Program represents a strategic opportunity for consolidation of “best practices” generated under the Project and an even greater opportunity to continue with needed capacity enhancement of DWSTs and community groups. The consolidation of the private sector’s role in the delivery of maintenance support services will also benefit from this continuity.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation. ICR Rating: Satisfactory

The Project has proven relevant and consistent with the current Tanzanian Country Assistance Strategy. The relevance has been demonstrated over the life cycle of the project as follows: • The new National Water Policy’s core principles (efficiency, subsidiarity and integration) have been

validated through the implementation model developed and tested in the 12 districts. The model has been adopted in the National Water Sector Development Strategy (2007) and has been the basis of the RWSS component of the Water Sector Development Program.

• The key operational arrangements of the Project (decentralized participatory implementation management, redefinition of the role of MoW; capacity building at the district level; and, enhanced role for the private sector) are now established practice in Tanzania.

• The Project experience has also impacted the implementation of the National RWSS Program which was formulated under the Project. The Program is now operational in most districts and implemented under the Water Sector Development Program since July 2007. This is a major contribution to GoT’s National Strategy for Growth and Poverty Reduction.

• The experience gained under the Project has significant importance to Country Assistance Strategy not only to Tanzania but also in the rest of Africa where Bank implementation assistance remained important in guiding the transition of changing roles of central government, local governments and communities in the provision of sustainable service delivery.

3.2 Achievement of Project Development Objectives. ICR Rating: Satisfactory 3.2.1 Overall Project Outcome. The highlights of the achievements of the Project are summarized below. The contribution of each component to the project objective is also summarized under each Project component:

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3.2.2. Component 1: Establishment of the District Implementation Model (estimated at US$1.20 million; ICR US$2.01 million). Rating: Satisfactory. Activity 1.1: Support to the establishment and strengthening of operational capacity (equipment support and training) of DWSTs to prepare district RWSS plans and appraise RWSS sub-projects proposed by the communities. Rating: Satisfactory.

• Demand-based district implementation model validated and operational in 12 project districts (now 14 due to split of 2 districts) - 100 % of target met

• National RWSS program was endorsed in March 2007 and launched nationwide in July 2007 - 100 % target met.

Activity 1.2: Support to the establishment of district RWSS Funds (a sector conditional grant system) to finance the construction of new RWSS schemes, the rehabilitation and expansion of existing systems and possibly other water related small scale infrastructure investment. Rating: Moderately Satisfactory.

Table 2: RWSS Community Contributions under the FYIP and SYIP

District

Expected Community

Contribution (TShs)

Actual Community Contribution (Nov

07) (TShs)

Outstanding Amounts

(TShs)

Actual Contribution

as % of expected amount

FYIP 119,293,430.85 119,293,430.85 0.00 100.00%SYIP 712,372,208.83 418,783,981.82 293,588,227.01 58.79%

Overall 831,665,639.68 538,077,412.67 293,588,227.01 64.70% First Year Investment Program (FYIP) districts paid 100 % of the expected contribution while Second Year Investment Program (SYIP) paid 59 % of their contribution; overall, the contribution rate was 65 %.

Table 1: RWSSP, Targets and Achievements

Project Development

Objective

Outcome/Impact Indicator (as in the PAD)

Target per the MTR/Action Plan for Extension of

closing date

Actual 06/30/2008

Demand-based district implementation model validated and operational in 12 (now 14) project districts

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Water supply and sanitation conditions improved in about 250 communities 12 in project districts (serving around 650,000 people)

133 communities plus 4 small towns (serving 550,000 people)

121 communities plus 3 small towns (serving 521,630 people)

Improved and sustained access to WSS services in rural communities

Stakeholder agreement and endorsement of the national RWSS program and strategy

National RWSS program endorsed

National RWSS program endorsed in March 2007 and launched nation-wide in July 2007

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Activity 1.3: Assistance to communities in the proper management and operation of these systems through appropriate hygiene education as well as promoting HIV/AIDS mitigation and prevention activities Rating: Satisfactory.

Table 3: Sanitation Activities

District Artisans Trained Slabs Built Slabs Sold Slabs Installed Total 535 2,829 1,615 (57%) 1,208 (75%)

Activities have been on-going in all districts for both school/community sanitation and sanitation marketing. These outputs helped the formation of hygienic habits and the capacity to meet the demand created by the awareness. The main activities include: • School Hygiene and Sanitation: construction of demonstration latrines and hand washing facilities;

formulation and training for school and community health and sanitation clubs as part of hygiene and sanitation education.

• Household Sanitation Marketing: extensive training of fundis (artisans) in manufacturing and installation of hygienic sanitation slabs (SanPlats). During the training, the activities included; (i) Development of training package (training manuals, posters, and leaflets), (ii) Training of over 540 fundis from all 12 districts, (iii) Production of almost 3,000 SanPlats with over 1,600 installed (43%), and (iv) Formation of 30 SanPlat production centers.

3.2.3 Component 2: Construction of RWSS community sub-projects (estimated at US$21.30 million; ICR: US$ 21.78 million). Rating: Moderately Satisfactory This component had four activities and all were satisfactorily implemented and their outputs contributed to the overall outcome of the project. However, it took an additional 18 months extension of the Project to complete most of the activities. The implementation of this component helped reduce distance and travel time to fetch water and increased coverage of water and sanitation services.

District No. of villages

No. of sub-

villages

No. of completed schemes

Water points to be developed

No. of completed

water points

Pop. To be served

Pop. Currently

Served Rural Districts

138 790 121 1,909 1,848 468,640 445,469

Small Towns 4 3 588 609 90390 86160 Total 2,497 2,457 559,030 521,629 % Achieved 98.4% 93.3% Activity 2.1: Community Sub-projects; Rating: Moderately Satisfactory. Based on the results summarized in Table 3, a total of 91 % of the districts, 75% of the small towns; and 93% of the beneficiaries have their water condition improved. In terms of absolute number 121 communities plus 3 small towns serving 521, 630 people in the 12 districts compared to the revised plan 133 communities plus 4 small towns serving 550,000 people in the 12 districts. • A total of 138 villages’ sub-projects and 4 small towns identified, appraised, and constructed with

funds from DWSF. • 90% environmental screening of sub-projects • 10 innovative sub-projects appraised, implemented and commissioned • Distance to fetch water reduced: Kiteto from 10 km to 4km; Handeni / Kilindi from 3 km to 0.6km;

Kondoa from 4 km to 0.4km; Morogoro/ Mvomero from 1 km to 0.6km.

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• Travel time reduced: Manyoni from 2 hrs to 15 minutes; Kiteto from 5hrs to 2 hrs; Rufiji from 5 hrs to 2 hrs; Morogoro/ Mvomero from 6 hrs to 1 hrs.

• Coverage (Water service increased): Singida Rural from 49.4% to 55.4%; Iramba from 32% 39.4%; in Manyoni from 31% to 45%; Kiteto from 37% to 50.4%; Rufiji from 47.7% to 74.6%; Handeni / Kilindi 41% to 51%; Kondoa from 32% to 35%; Morogoro/Mvomero from 55% to 60%.

• Coverage (Sanitation service increased): Singida Rural from 70% to 75%; Iramba from 70% to 75%; Igunga from 5% to 12%; Kiteto from 52% to 62%; Rufiji from 65.4% to 86.6%; Handeni/Kilindi 38% to 50%; Kondoa from 49% to 60%;

Activity 2.2: Supply Chain-Hand Pump and Spare Parts Supply. Rating: Moderately Satisfactory. The supply chain was designed to cover 3 Business Units. Morogoro Municipality, Dodoma Municipality and Singida Town were selected as central zonal depots to serve the nearest districts. Certified technicians have been appointed and trained for each of the districts. This activity is related to the sustainability of the outcome and impact of the project by deepening the local market for post construction after-sales services and spare parts provision. The activity experienced significant delay and therefore the Project did not realize its full impact by the closing date but is receiving attention under follow up Water Sector Development Program which seeks to establish a national network beyond the boundaries of the Project. Activity 2.3: Supervision, Design and Construction Supervision. Rating: Satisfactory. The design and construction supervision activities are critical for the quality, efficiency and sustainability of the water and sanitation sub-projects. Over 10 consulting firms (TSPs) and extension support NGOs (FSPs) were engaged by districts to support communities and DWSTs in preparing sub-projects, carry out the detailed designs and supervise the construction. In some districts, support to experimentation of post-construction management was realized. Mpwapwa district’s innovation in local operators for piped schemes is noteworthy. Their experimentation is one that should be nurtured and emerging lessons and experiences widely disseminated to other districts and communities. In some districts some cost overruns resulted with the extension of the sub-project completion time but overall the activity was successfully and professionally carried out. Activity 2.4: Support to Innovation Window Program. Rating: Moderately Satisfactory. In November 2005, the MoW signed contracts with 10 consultants/service providers to implement 10 sub-projects under the Innovation Window, which are collectively considered to be the applied research and development component of the Project. The sub-projects focused on: sanitation and health; information and communication technology; management of water supply and productive use of water. Progress to completion was reported to be 98%. Although the selected offers were apparently the best at the time of selection, some of the sub-projects lack innovativeness. Furthermore, ownership and information dissemination of the results of any innovations as originally planned, needs to be followed up by MoW. 3.2.4 Component 3: Institutional Strengthening and Development of the National RWSS Program (estimated at US$3.55 million). Rating: Satisfactory The activities under Component 3 were designed to lay the necessary foundation for sustainability and scale up of the project outcome and made a positive contribution to the outcome of the project. Activity 3.1: Support to Stakeholder Consultative Process. Rating: Satisfactory. The Project was formally launched with a stakeholder workshop on October 15, 2002 in Dar es Salaam. To ensure the engagement of stakeholders, the Technical Advisory Committee (TAC) comprising multi-sector and disciplinary stakeholders has been active during the life of the Project. About 10 TAC meetings were conducted during the life of the Project. The TAC was mainstreamed into the work of Water Sector Working Group (WSWG) and the Thematic Groups in July 2006. This is part of the sector dialogue mechanism set up for the Water Sector Development Program.

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Activity 3.2: Technical Assistance to the Preparation of the National RWSS Program. Rating: Satisfactory. The Project Management Support (PMS) consultant was mobilized in May 2003. The consultant assisted GoT to undertake: demand assessment; prepare the capital and O&M costs and investment forecasts; training and capacity building strategy; training manuals; and carry out annual technical audits as well as provide guidance for the mainstreaming of the Project into the activities of the MoW. All these culminated into the drafting of the National RWSS Program as well as the preparation of the consolidated Water Sector Development Program. The consultant also prepared the district grant allocation guidelines, and completed the design of the MIS. Activity 3.3: Development of a Management Information System (MIS) for Tracking Lessons Learned from the Project: Rating: Moderately Satisfactory. A computerized MIS was developed and pre-tested and installed in all districts. The MIS has modules for community information; water supply sub-project preparation; sanitation sub-project information; contract administration; water fund collection; financial management; as well as modules for accessing water supply and sanitation coverage by community, ward, district, and region. The development of the MIS encountered delays. It is operational in 9 districts but with mixed results in its utilization. Two staff from each district were trained in the use of the system. However, due to delays in the development of the MIS, a back up system consisting of monitoring and reporting templates (spreadsheets) as well as annual and financial audit were resorted to most of the time by communities to report to districts and for DWST to report to MoW. Activity 3.4: Assistance to the Restructuring of RWSS Sector Institutions within MoW and the Building of the Capacity of Key Stakeholders (MoW, NGOs, consultants, contractors, suppliers of equipment and service providers). Rating: Satisfactory. This activity prepared the capacity building strategy and tools which were used in the implementation of the decentralized implementation model. Extensive capacity building activities and training events were organized at all levels and a significant number of training manual and tools were prepared. These were used in the course of the Project and are now being used to support the rolled out National RWSS Program. Private sector capacity was also promoted under this activity. The biggest contribution was the opportunity for private sector contractors and service providers to bid competitively for provision of works and services at the district level. To date, the Project has promoted the use of: 53 local small works contractors; 13 drilling companies; 10 mechanized pump suppliers and maintenance agents; 2 hand pump suppliers and maintenance agent; 4 consulting firms (TSPs); 540 sanitation artisans, and many NGOs (FSPs). The Project also provided training for some of the FSPs to improve their outreach approaches. Some firms also obtained supporting grants through a leasing arrangement under the Project to procure well sitting equipment and other construction accessories. Activity 3.5: Assistance to MoW for overall management of the Project. Rating: Satisfactory. The district implementation model became functional. Project Coordination Unit at MoW was dissolved, two years into the Project and project management streamlined/integrated into the activities of the restructured RWS division of the MoW. Activity has been merged into the implementation of the National RWSS Program.

3.3 Efficiency 3.3.1 Methodology. Post-construction evaluation of the economic benefits of RWSS investments were carried out using both quantitative and qualitative approaches. The details are outlined in Annex 3 and include the following:

1. Cost- Benefit analysis based on time saving obtained with the implementation of the schemes for each type of technology

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2. Cost –effectiveness relative to the design assumption for each type of technology utilized 3. Qualitative assessments of beneficiaries

3.3.2 Cost benefit-analysis. Economic analysis was conducted for the various alternatives on the basis of actual post construction data obtained from the districts. The approach used to estimate the Economic Internal Rate of Return (EIRR) and Net Present Value (NPV) is similar to the one used at appraisal, except that instead of seven options considered at appraisal, the options used in the analysis were three: gravitational water scheme; shallow borehole with handpump; and mechanized deep borehole with piped scheme.

• Reappraisal Results: All alternatives resulted in positive EIRR ranging from 16% for shallow wells with hand pumps, 18% for mechanized deep boreholes and 49% for the gravitational scheme;. The NPVs were all positive at 12% discount rate.

• Sensitivity analysis conducted: As at appraisal, sensitivity analysis conducted for the following scenarios: (a) a 10% increase in investment costs; (b) a 20% decrease in time savings; and (c) 30% decrease in price of vended water. The analysis shows that the options undertaken are all viable, providing rates of return ranging from 49% to 16% for the base case. In the sensitivity analyses, the shallow well rate of return is marginally below the 12% discount rate if the time savings are reduced by 20%, while the result is positive for the other scenarios.

3.3.2 Cost-effectiveness. The design assumptions for each type of technology utilized were tested on sub-projects in the 3 pilot districts as well as those in the 9 additional districts. The results show that on the average investment in US$ per cubic meter of water per hour was US$205,685 for bore holes, US$62,247 for shallow wells; and US$19,346 for gravitational scheme. 3.3.3 Qualitative assessment of beneficiaries. Annex 3 summarizes a range of perceived benefits expressed by beneficiaries in one of the villages - the benefits of water range from health, increased agricultural production, academic achievement, strengthening family, freedom, gender equality, socialization of children, healthy livestock, cleanliness, generosity, freedom from fear, and hope!

3.4 Justification of Overall Outcome. Rating: Satisfactory 3.4.1 Project Outcome Achieved. Overall, achievements of the project outcome are assessed as satisfactory. The project objective and design remained relevant. Sector issues included in the implementation model such as: decision making process, sub-project appraisal, cost sharing arrangement, financing mechanisms, district council contracting, incentive to deliver, private sector participation, linkage with water resource management, and crosscutting issues such as HIV/AIDS were addressed adequately during design and implementation and valuable lessons were learnt. 3.4.2 Scale Up Ensured. The implementation model piloted under the project helped to secure stakeholder agreement and endorsement of the National RWSS program and its subsequent commitment to financing (estimated at USD 390 million). The countrywide roll-out to the Project model since July 2007 is a testimony to the Project’s success. The scale up represents an important ingredient meeting the objective of GoT’s National Strategy for Growth and Poverty Reduction, i.e. to ensure sustainable access to improved RWSS services. Achievement of the Project Development Objective is therefore assessed as satisfactory.

3.5 Overarching Themes, Other Outcomes and Impacts

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3.5.1 Poverty Impacts, Gender Aspects, and Social Development .The impact of RWSS on poverty, gender and social development is assessed to be significant. The impact on poverty was not fully quantified, but a qualitative assessment backed by field observation indicates that significant time-saving in fetching water is being utilized in agricultural production or non-agricultural production or service activities. It has facilitated the emergence of new division of labor other than the traditional subsistence farming with potential future productivity gains. The gender impact is also positive since women and girls are often the ones who fetch water. Moreover, women have become the pillar of the WSS communities in their respective villages. School attendance among girls, was reported as having significantly increased. A total of 521,630 (against the MTR revised target of 550,000) people got access to water with substantial reduction in distance traveled as a result of the Project. The time to access water was also reduced significantly. The risks to women being exposed to rape or contracting HIV, or unplanned pregnancy, attacks by wild animals and snakes were reduced. Women have now more time to care for themselves and their children and children are not left alone in the home while their mothers go to fetch water. Sanitation services have improved and the risks of communicable diseases are reduced. Better homes are being built now that water is available. People have become more creative at using their saved time. Women’s participation in community affairs other than WSS committees has also increased. 3.5.2 Institutional Change/Strengthening. The Project has contributed significantly to strengthening institutional capacity at all levels of government through a series of reforms. MoW has been restructured to allow for decentralized delivery of services. Government water sector policy has been updated to allow for an enabling environment and appropriate incentives for the delivery of reliable, sustainable and affordable water supply and sanitation services. The role of GoT in the new Water Sector Policy has shifted from the “provision of RWSS services” to the “facilitation and financing of RWSS services”. The ownership of assets and the responsibility for deciding on RWSS rehabilitation/extension programs and the establishment of cost recovery arrangement have become district responsibilities; while management of day to day operations of the system has become the responsibility of community water user entity or the private sector. Incentives for sustainable RWSS operations have been put in place. Private sector participation in the rural water and sanitation services has been enhanced. The GoT has put in place a framework and an incentive environment for private sector participation. Local Governments can now design affordable and sustainable private sector participation activities. However, despite such progress, the process needs to be consolidated. The follow on Water Sector Development Program represents a great opportunity. 3.5.3 Other Unintended Outcomes and Impacts (positive or negative). None 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 3.6.1 Summary of Findings of Beneficiary Survey. Although the ICR is a Core ICR, as part of the learning process to position the extension/scale up of the program, a Beneficiary Survey was undertaken. Survey results suggest substantial benefits from successful sub-projects. The summary of findings is as follows: • A number of sub-projects cover large populations from targeted villages and sub-villages. The

quality of service is generally considered of a high quality by communities. The collection of community contributions varies substantially between districts – irrespective of the absolute size of required contributions, thus suggesting scope for extending best practice strategies from the most to the least effective districts.

• Capacity has been built in District Water Departments as well as in some communities. District Water Engineers (DWEs) and communities in general are able to solve technical problems as they occur. Average repair time varies from district to district, but problems are generally solved within a couple of weeks. Broken pumping equipment and sometimes pipes and valves, take a little longer. Three of

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the surveyed schemes had no functional water points. In all cases problems reflect issues in project implementation rather than post-construction maintenance and repair. To increase the quality of works, it might be beneficial to strengthen district capacity in contract management and quality control. The share of non-functional water points was high for shallow wells in Rufiji District, where problems of ground water salinity are common. Interviewees in two schemes plagued by repeated breakdowns and low quality of services indicated that the community was now unwilling to pay for water as well as repairs. It is possible that stronger assessment of community demand should have led to investment in deep wells under such difficult groundwater conditions, or perhaps, not being pursued if communities preferred resorting to traditional sources of water if challenged by higher water fees.

• In districts where large piped schemes operating “pay-as you fetch” payment system are prevalent, all schemes seem to be able to cover operating costs. Financial sustainability is low in flat rate schemes and shallow well facilities. Embezzlement of Village Water Funds is also a problem for collection of initial community contributions, as well as for revenue collected from the selling of water. The prevalence of these problems, and the negative impact they have on the sustainability of schemes, suggest that the DWSTs have an important role to play as a check on community leadership to raise financial sustainability.

• Mpwapwa District has pioneered the drafting and application of Village Water Fund By-Laws regulating the collection, keeping and use of Village Water Fund, which if extended to other districts would likely raise sustainability of established schemes. Innovation around private operation of schemes also from Mpwapwa District should be extended to other districts, as experiences show higher revenue generating capacity in these schemes.

Results from Mpwapwa District

• District Water and Sanitation Teams are in place, and Water and Sanitation Plans have been prepared based on community demand;

• 15 Village Water Schemes - mostly piped schemes - have been completed; • Coverage has increased from 45 to 74%, meaning that 90,000 additional people are now served with

improved water supply; • 67 out of 84 water accounts are kept with total deposits equaling almost Tsh 21.5 million; • 1,791 people have been sensitized on better hygiene education and sanitation behavioral change, 58 latrines

holes have been constructed, 2 school sanitation clubs have been established and 132 SanPlats have been sold – of which 117 have been installed;

• 7 contracts with Private Sector Operator’s have been signed; and 5 additional contracts are currently under processing.

3.6.2 Summary of Findings of Stakeholder Workshops. Discussions on the Project’s main achievements and the biggest challenges faced were informed by detailed presentations by District Water Engineers (DWEs). The main findings can be summarized as follows: • The Establishment of a Decentralized Project Implementation Model, including the successful

redefinition of the relationship between the MoW, Local Government Authorities (LGAs) and Communities was identified as one of the main achievements.

• Capacity building in Districts through the posting of Water Engineers and the establishment of District Water and Sanitation Teams (DWST) was identified as another main achievement.

• Community participation was emphasized as an important element in project implementation, as this has led to greater ownership of water facilities.

• Participants emphasized the visibly large impacts successful sub-projects are having on rural livelihoods in terms of lower water collection time and improved health.

• Participants at the workshop also made recommendations on the need for: proactive role of district engineers; strengthening post construction management of community water schemes; adopting the

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example of Mpwapwa district in water Fund management; and adoption of private sector for large rural water supply schemes.

4. Assessment of Risk to Development Outcome. Rating: Moderate 4.1 The risk in achieving the development outcome of the Project is assessed as Moderate. GoT has already adopted the district implementation model and scaled it up across the country under the follow up Water Sector Development Program. Over the next 5 years, RWSS services will be expanded significantly in Tanzania. The lessons learned from the Project have, by and large, been incorporated in the scale up program. Some simplification has been made in the flow of funds by adopting a tested system of fiscal transfers to districts. This Local Government Capital Development Grant system was developed under the on-going parallel project - Local Government Support Project. Only districts that met the qualification criteria receive water and sanitation conditional grants. The scale up program is however massive. It represents one of the largest RWSS programs in Africa. It comes with some risks on capacity development for such a large operation as well as adequacy of the private sector to respond to community and district demands for goods and services. GoT has however mitigated these risks by adopting a two staged process (i) focus on “quick wins” involving rehabilitation of existing system, new systems that do not need elaborate technical assistance in the first two years; and (ii) to tackle complex systems that involve technical assistance in design and construction supervision after the first two years. This strategy will allow GoT to expand its capacity building activities country wide and also allow time to mobilize technical assistance to support districts.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance 5.1.1 Bank Performance in Ensuring Quality at Entry. Rating: Satisfactory. The Bank recognized the disappointing results from past investments in the water sector. The Bank started investing in the development of the conceptual framework as far back as 1996, some six years before the appraisal of the Project, through extensive dialogue with Government. The Bank team carried limited sector work and studies to ascertain the operating conditions in Tanzania, had extensive discussion with numerous stakeholders as well as drawing on experiences from similar operations in Ghana, Uganda and Kenya. The Bank also drew lessons from its global experience from the RWSS Thematic Group based in the Bank. Notwithstanding the extensive time and investment the Bank made in investigating the sector issues to be addressed and the strategic choices to be made, its first inclination was to opt for a limited “pilot” in 3 districts. However, as events shifted from a Learning and Innovation Loan (LIL) to medium size Specific Investment Loan (SIL), the Bank Team insisted on a two stage approach – to start with the first 3 districts before extension to the additional 9 districts. The Bank’s early involvement and effort ensured quality at entry and insistence on the two stage implementation approach of cautiously piloting the implementation in 3 districts before expanding to all 12 districts significantly contributed to the Project’s Satisfactory outcome. 5.1.2 Quality of Supervision. Rating: Satisfactory. Bank supervision team was cognizant of the fact that, close follow up and flexible adjustment was an important recipe for avoiding the failure of past approaches to water and sanitation service delivery. Being forewarned of the risks, efforts were made to ensure that the supervision team was composed of the right mix. The team conducted field inspections, provided guidance where needed on the spot and made debriefings to the districts on its findings and often suggested needed corrections. The team’s supervision reports were focused on measures to be taken to correct errors observed in the field and were made known to MoW for its follow up. After the Mid-

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Term Review, the supervision team recommended specific adjustment and the necessary capacity reinforcements. This follow-up action plan resulted in the satisfactory outcome reported. 5.1.3 Justification of Rating for Overall Bank Performance. Rating: Satisfactory. The Bank team maintained presence and engagement with the Borrower throughout the course of project implementation. The relocation of the Task Team Leader to the Country Office helped greatly in ensuring continuous supervision after the Mid-term Review. The Bank team maintained pro-activity in carrying out the corrective restructuring following the Mid-Term Review. Bank Management provided significant oversight and the resources to the Task team to ensure the progressive upgrade of the Project from “Unsatisfactory” status to “Satisfactory” status before Project closure. Supervision was significant, with full teams covering all themes and able to carry out thorough field visit and consultation with GoT officials at all levels. 5.2 Borrower Performance 5.2.1 Government Performance. Rating: Satisfactory. The main contribution of the government to the success of the Project design and implementation is the adoption of the new Water Sector Policy (2002), articulated in its Letter of Policy of Rural Water Supply and Sanitation. The policy provides new directions emphasizing: • A demand responsive approach whereby communities choose service levels based on their perceived

needs and abilities; • An upfront contribution to capital costs and the full financing of O&M costs by communities as

means to foster ownership of the project; and , • Implementation and management of the scheme by communities with assistance of the local

governments and the private sector.

The commitment to these and other principles outlined in the policy such as decentralization of RWSS services, incentives for sustainable RWSS operations, promotion of private sector participation all went a long way to create the necessary environment for the district implementation model. Despite many short-comings in operations such as delays in transfer of funds and delays encountered in placement of engineers in the districts, GoT remained committed to the Water Sector Policy. The commitment to the policy principles helped the recovery process after the Project was rated unsatisfactory. The launching of a successor program is a further testimony that the Government is intent to harvesting the best outcome from this operation. It is significant to note that the MoW implemented one of the largest rural WSS projects in the East African region without a dedicated Project Implementation Unit and is now using the lesson to initiate one of the largest RWSS program in the Africa Region. Overall compliance with covenants and agreements towards the achievement of the project, despite some short comings, has been supportive towards achieving the development objective. The borrower performance is therefore assessed as satisfactory. 5.2.2 Implementing Agency or Agencies Performance. Rating: Moderately Satisfactory. The implementation agencies faced a difficult learning curve in building the required capacity for discharging their responsibilities. Both the MoW and the districts have come a long way. They have acquired the necessary orientation and experience in program development which is currently being used in the scale up operation. Whilst much of the initial capacity problems have been addressed in the course of implementation, the implementing agencies still face many challenges to ensure O&M and sustainability. The progress made in registering satisfactory outcomes after the Mid-term Review needs to be maintained. Strong monitoring and evaluation from districts to MoW Water Sector Development Program will help improve the development outcome in the medium term.

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5.2.3 Justification of Rating for Overall Borrower Performance. Rating: Satisfactory Given the scale and complexity of the Project as well as initial capacity constraints, both the GoT and the implementing agencies at district level have made progressive improvements over the project implementation life.

6. Lessons Learned

6.1 Demand Responsive Projects in Decentralized Environment Need Time to Demonstrate Benefits and Space for Experimentation. By their very nature demand responsive projects rely on many unknowns. One cannot always predict community preferences and choices which are at the heart of ownerships and sustainability. Coupled with operating in a decentralized environment with weak institutions, project implementation require time for concluding extensive consultative process, working with communities to make rational choices and sometimes mobilizing the non-existent private sector to respond to community demands. Extensive capacity building in needed as well as the space for service providers to experiment and scale up what works. 6.2 Community Involvement in the Design, Implementation, Operation and Maintenance is a Key Factor to Sustainability. Community ownership that results from involvement has stopped vandalizing water schemes. It has contributed to the innovation of the “water rate” that works. Before the introduction of the participatory approach, where the Central government was the only agent involved in the provision of water, vandalizing of water schemes was common. Now with the change in the incentive system, communities are stakeholders and thus contribute to maintaining the assets for the benefit of the community. This project underscores that sustainability is a function of incentives. 6.3 Efforts to Raise Community Contributions as means of Ensuring “Ownership” and Commitment to Pay for Water must be Strengthened in Districts where Contribution Rates are Low. The challenges posed by collecting contributions from very poor communities were widely recognized. Such communities might need longer collection periods, and allowance for partial in-kind contributions. Persistence and strong information campaigns are needed where the perception of water as a “free good” remains strong. 6.4 Creative experimentation among beneficiaries is productive. The district implementation model has afforded opportunity for creativity among beneficiaries. The project design has allowed districts to experiment with different water rates. For example, Mpwapwa District has pioneered the drafting and application of Village Water Fund By-Laws regulating the collection, keeping and use of Village Water Fund, which if extended to other districts would be likely to raise sustainability of established schemes further. Innovation around private operation of schemes, also from Mpwapwa District, has the potential to be extended to other districts with higher revenue generating capacity. Successful experiences of local private operation of larger rural schemes suggest that more widespread use of this management model should be a “must” rather than an “option”. 6.5. Empowering District Water Engineers and District Water Sanitation Team in Decentralized Implementation is Necessary for Smooth Project Execution: Although the DWEs and DWSTs have authority that they could exercise, there are still signs that they shy away from playing their designated roles in accordance with the district implementation model. This could affect project outcome unless the power relationships between central government institutions and local government institutions are corrected in time. For example, in places where project implementation has resulted in low quality facilities, the contractual relationship among DWEs, consultants and contractors was sometimes blamed. DWEs, despite being responsible for hiring consultants, and signing off on consultants payments, often complained that contractors were unwilling to respond to their requests, and that they in turn felt disinclined to refuse to sign off on payments. This problem might be addressed through role rehearsal of

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their respective roles and through training in contract management and quality control, and probably may not necessitate structural changes. 6.6 Developing the local market for the construction industry and spare parts is key to decentralized implementation. Development of the local market is key to the efficient functioning of the private sector and for project sustainability of district level social service delivery activities. In the construction sector, proper packaging of construction activities could help to capture economies of scale and progressive development of the local construction industry, create the pool of skills and good practices. Availability of spare parts in the local market could help compress the time needed for repairs, lead to operational efficiency and is a key element of sustainability of the schemes that involve water pumps. 6.7 The Merging of FSP/TSP Functions should be seized as an Opportunity to achieve more accurate Identification of Community Demand. Having separate FSPs and TSPs who contact communities at different time, have the tendency for creating confusion in the selection of technology/ scheme type that balances the size of community contributions, water fees, scheme management options, and the likely quality of service. A combined FSP and TSP will help maintain focus in messages to the community. In any case, wider involvement of DWSTs and community extension workers is needed to ensure community engagement without diverting DWEs from their core tasks. Wider involvement of the DWST will also help mitigate the neglect of the role of the FSP in the case where the TSP and FSP roles are combined. Development of manuals for this purpose is suggested.

6.8 Post- Construction Support and Monitoring should be Strengthened and should include Financial Management as well as the Technical Support. Experiences from successful projects suggest the need for a “long-term” approach to community support, especially with regard to financial management. To ensure high quality of book-keeping, limit attempts to embezzle village water funds, the District Water Department must monitor revenue collection and expenditures. This type of post-construction support should extend to advice on the viability of fee collection methods. Experience at this point clearly suggests that flat rates are not sustainable. Technical support should span from maintenance advice to advice on repairs when necessary. The Development of Technical Operations and Financial Management Manuals were suggested.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies: (see Annex 7) (b) Co-financiers: N/A (c) Other partners and stakeholders: N/A

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Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent)

Components Appraisal Estimate (USD millions)

Actual/Latest Estimate (USD

millions)

Percentage of Appraisal

Establishment of District Implementation Model 1.20 2.01 167%

Construction of RWSS Schemes 21.30 21.78 102%Institutional Strengthening and Development of National RWSS Program

3.55 3.40 95%

PPF Refinancing 0.55 0.22 40%

Total Baseline Cost 26.60 27.41 103%Unallocated 1.10 0.00 Total Project Costs 27.70 27.41 99%Front-end fee PPF Total Financing Required 27.70 30.02 108%

(b) Financing

Source of Funds Type of Co-financing

Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)

Percentage of Appraisal

Borrower Yes 1.00 1.75 175%Beneficiaries Yes 0.70 0.90 129%International Development Association (IDA) Yes 26.00 28.50 109%

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Annex 2. Outputs by Component 1. Component 1: Establishment of the district implementation model (estimated at US$1.20 million; ICR US$2.01 million). Overall Rating: Satisfactory. All 12 districts have established a DWST. The three activities under this component were completed satisfactorily and contributed significantly to the achievement of the overall objective of the project. They supported the establishment of operational capacity of DWSTs to prepare district RWSS plans and appraise RWSS sub-projects proposed by the communities. The component laid the foundation for achieving a workable implementation model, albeit after some retooling. The quality of the capacity built at the local government level was assessed in the Beneficiary Assessment Survey. Activity 1.1: Support to the establishment and strengthening of operational capacity (equipment support and training) of DWSTs to prepare district RWSS plans and appraise RWSS sub-projects proposed by the communities. Rating: Satisfactory. 2. All 12 DWST are working with: i) Facilitation Services Providers (FSPs) for community support services and (ii) Technical Services Providers (TSPs) for design and construction supervision services. Communities now know where and who to go to for support. Since this is a new sector development strategy, some weaknesses exist in the areas of planning and in particular contract administration. DWSTs have to enhance their capabilities to be able to provide high quality post-construction management, monitoring and reporting. There may also be a need to combine FSPs and TSPs to be more effective. Activity 1.2: Support for the establishment of district RWSS Funds (a sector conditional grant system) to finance the construction of new RWSS schemes, the rehabilitation and expansion of existing systems and possibly other water related small scale infrastructure investment. Rating: Satisfactory. 3. All the 12 districts have established a RWSS Fund and have been receiving funds for each of the year’s programs. However, transfer of funds has been occasionally delayed. The DWSF Account allowed for transfers of resources from the Project Special Account for payments at the district level for goods, civil works and services. All consultancy services, sub-project costs and incremental operating expenses were met by the district through the account. The result of these transfers and the ensuing audits of these accounts provided lessons and the framework for the design of the fiscal transfers of water grants under the Local Government Capital Development Grants system as well as the WSDP. Community contributions to the investment programs have continued to increase but not at the desired levels. Information provided by the MoW shows that overall, community contributions amounted to 65% of the total amount expected under the project for all the 12 districts. The contributions range from 19% in Manyoni to 100% in the First Year Investment Program (FYIP) in the first 3 districts. The average contribution, excluding the 3 poor performing districts is about 74%. The level of contributions under the Second Year Investment Program (SYIP) in the first 3 districts is about 71%.

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Table 2.1: Status of RWSS Community Contributions

District Expected Community Contribution (TShs)

Actual Community Contribution (Nov 07)

(TShs) Outstanding

Amounts (TShs)

Actual Contribution as % of expected

amount

FYIP

Kilosa 31,000,000.00 31,000,000.00 0.00 100.00%

Mpwapwa 48,996,458.00 48,996,458.00 0.00 100.00%

Rufiji 39,296,972.85 39,296,972.85 0.00 100.00%

Sub-total 119,293,430.85 119,293,430.85 0.00 100.00%

Handeni 78,578,642.00 18,639,250.00 59,939,392.00 23.72%

Igunga 80,000,000.00 70,257,525.00 9,742,475.00 87.82%

Iramba 71,116,080.00 42,413,916.25 28,702,163.75 59.64%

Kiteto 67,412,491.20 14,500,000.00 52,912,491.20 21.51%

Kondoa 32,530,000.00 28,086,749.45 4,443,250.55 86.34%

Kongwa 56,689,720.00 31,902,905.00 24,786,815.00 56.28%

Manyoni 65,500,000.00 12,505,000.00 52,995,000.00 19.09%

Morogoro R 73,800,603.00 49,598,503.04 24,202,099.96 67.21%

Singida 84,150,000.00 77,751,120.24 6,398,879.76 92.40%

Sub-total 609,777,536.20 345,654,968.98 264,122,567.22 56.69%

SYIP

Kilosa 22,400,000.00 18,400,000.00 4,000,000.00 82.14%

Mpwapwa 46,850,000.00 39,356,542.00 7,493,458.00 84.01%

Rufiji 33,344,672.63 15,372,470.84 17,972,201.79 46.10%

Sub-total 102,594,672.63 73,129,012.84 29,465,659.79 71.28%

OVERALL 831,665,639.68 538,077,412.67 293,588,227.01 65%

Activity 1.3: Assistance to communities in the proper management and operation of these systems through appropriate hygiene education as well as promoting HIV/AIDS mitigation and prevention activities. Rating: Satisfactory. 4. Sanitation and hygiene activities as well as HIV mitigation were initially incorporated in the work of the FSPs as part of mobilization of communities leading to the preparation of Facilities Management Plans (FMPs). However, the emerging FMPs and associated sub-projects did not provide adequate attention to sanitation activities. A deliberate effort has been made by MoW since the Mid-Term Review to address this subject, resulting in a satisfactory overall outcome.

• School Hygiene and Sanitation: construction of demonstration latrines and hand washing facilities; formulation and training for school and community health and sanitation clubs as part of hygiene and sanitation education. Implementation includes: a) School hygiene and sanitation activities

i) introduction of child-to-child approaches ii) formation of school sanitation clubs

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iii) training in needs assessment and training on the child-to-child approach iv) organizing competitions between sanitation clubs on improved hygiene and

sanitation behavior v) construction of demonstration latrines and hand washing facilities

b) Community hygiene and sanitation facilities i) raising awareness for better hygiene and sanitation behaviors ii) formation of community sanitation clubs iii) training in needs assessment, and training of artisans as well as formation of

sanitation clubs iv) construction of demonstration latrines at centers

• Household Sanitation Marketing: extensive training of fundis (artisans) in manufacturing and

installation of hygienic sanitation slabs (SanPlats). Project districts have already benefited from the trained fundis namely; Handeni, Igunga, Kilindi, Kondoa, Kongwa, Morogoro Rural, Mpwapwa, Mvomero. Furthermore, the MoW donated the training activities to the GoT’s observation of World Toilet Day. This was held in Ifunda, Iringa Rural (outside the project area) on Nov. 19, 2007. During the training, the activities included: a) Development of training package (training manuals, posters, and leaflets) b) Training of over 540 fundis from all 12 districts c) Production of over 3,000 SanPlats, over 1,200 installed (43%) d) Improved capacity of artisans e) 30 SanPlat production centers formed

Table 2.2: Sanitation Slabs Produced

District Artisans Trained Status Slabs Built Slabs Sold Slabs Installed 1. Handeni 37 Completed 110 85 35 2. Igunga 41 Completed 220 190 190 3. Iramba 36 Completed 145 96 85 4. Iringa R 23 Completed 260 66 13 5. Kilindi 33 Completed 155 43 11 6. Kilosa 30 Completed 164 105 91 7. Kiteto 37 Completed 136 65 42 8. Kondoa 40 Completed 405 301 301 9. Kongwa 35 Completed 184 121 81 10. Manyoni 36 Completed 126 37 37 11. Morogoro 40 Completed 176 86 28 12. Mpwapwa 35 Completed 173 132 114 13. Mvomero 37 Completed 199 80 36 14. Rufiji 35 Completed 173 62 36 15. Singida 40 Completed 203 146 108

Total 535 2,829 1,615 (57%) 1,208 (75%) 5. Since October 2007, the MoW has been transferring funds earmarked for sanitation to districts. Additionally, the MoW has allocated two staff members to community sanitation and hygiene. However, more support and work needs to be put into developing district-level sanitation and hygiene plans. There is also the need to integrate sanitation and hygiene into national planning and budgeting.

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6. Component 2: Construction of RWSS community sub-projects (estimated at US$21.30 million; ICR: US$ 21.78 million). Overall Rating: Satisfactory This component had four activities: Activity 2.1: Community sub-project. Rating: Satisfactory. By the project closing date, the demand-based district implementation model was validated and made operational in all 12 districts. 7. Water supply improved in 121 communities within the 12 project districts serving a total population of 521,629 people as compared to the initial target of 133 communities and 500,000 people (revised mid-term target);

• A total of 140 boreholes, of which 117 were successfully fitted with motorized pumps; • 154 shallow wells, of which 141 were successfully fitted with hand pumps. • 187 storage tanks against planned target of 213 storage tanks; • 734 km pipes laid against a planned target of 816 km; and • 72 cattle trough constructed against a planned target of 74 cattle troughs. The achievement of this component resulted in significant time saving for women and children who often spent long hours fetching water. This boosted school attendance and performance amongst the pupils.

Table 2.3: Completed Sub-Projects and Number of People Served (June 30, 2008)

District No. of

villages No. of sub-

villages

No. of completed schemes

Villages with On-going schemes

Water points to be developed

No. of completed

water points

Pop. To be served

Pop. Currently

Served Handeni 10 89 4 6 123 42 30,000 12,955 Igunga 14 111 14 NIL 287 287 70,050 71,250 Iramba 10 59 8 2 123 123 30,260 26,625 Kilosa 14 106 14 NIL 208 208 41,100 45,468 Kiteto 10 35 9 1 133 128 28,300 26,790 Kondoa 10 31 7 3 107 72 26,000 19,489 Kongwa 10 43 10 NIL 126 143 31,200 31,200 Manyoni 10 37 7 3 80 57 20,600 15,389 Morogoro R 10 61 10 NIL 202 202 50,000 51,230 Mpwapwa 15 89 15 Nil 218 218 53,100 54,146 Rufiji 15 60 15 NIL 170 221 55,330 62,278 Singida R 10 68 8 2 132 147 32,700 28,649 Sub-Total 138 790 121 17 1,909 1,848 468,640 445,469 Kondoa Town

505 505 33,500 34,560

Kongwa Town

38 46 17,800 17,900

Kiomboi Town

45 58 23,570 23,700

Igunga Town 15,520 NIL Total 2,497 2,457 559,030 521,629 Activity 2.2: Supply Chain-Hand Pump and Spare Parts Supply. Rating: Moderately Satisfactory 8. In October 2004, the Ministry signed 3 year contracts with two contractors (WEDECO and Harness Africa) for:

• Supply and stocking of hand pumps for shallow depth, medium depth and deep boreholes; • Establishment of district outlets for continuous stocking of spare parts; • Appointment of certified technicians for each district outlet for the construction of hand pump

platforms and installation of hand pumps, training of village handpump caretakers, provision of repair services and periodic inspections; and,

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• Construction of platforms, transportation and installation of handpumps and training of at least three village hand pump caretakers

9. The supply chain was designed to cover 3 Business Units:

• Business Unit 1 (covering Morogoro); central zonal depots have been established in Morogoro Municipality while district outlets have been established and agents identified in Kilosa, Morogoro (R), Handeni and Rufiji. Certified technicians have also been identified for each of the districts and 4 pump caretakers trained for water point management.

• Business Unit 2 (covering Dodoma); a central zonal depot has been established in Dodoma Municipality while district outlets have been established in Mpwapwa, Kongwa, Kiteto and Kondoa through identification of spare parts sales agents. Certified technicians have also been appointed and trained for each of the districts.

• Business Unit 3 (covering Singida); central zonal depot has been established in Singida while district outlets have been established in Igunga, Iramba, Manyoni and Singida. Certified technicians have also been appointed and trained for each of the districts.

10. Visits to the districts and villages showed some progress but the supply chain did not seem to be working optimally. Communities in some districts have received training and demonstrated adequate capacity for repairs. They also know where to go for more specialized support and purchase of spare parts. The progress report submitted by the MoW showed that there are a number of handpumps that have been supplied under the supply chain contract and were available for installation in communities with non-functioning hand pumps in the project districts. Activity 2.3: Supervision, Design and Construction Supervision. Rating: Satisfactory 11. Support in implementing community sub-projects was received from Facilitation Services Providers (FSPs) made up of district and regional NGOs, and Technical Services Providers (TSPs) comprising of national technical consultants. All beneficiary communities and sub-projects benefited from about 12 months of FSP support and extensive support from the TSPs. The FSPs took the communities through the initial health implications of water and sanitation provision to stimulate demand for improved services, support communities through the project cycle and assist communities prepare their Facilities and Management Plans (FMP). The FMPs became the focus of the sub-project design and implementation by the TSPs. Discussions with district leaders and communities during field visits confirmed that due to the delays in completion of sub-projects, particularly in the extended 9 districts, DWSTs could not institute adequate arrangements and structures for post-construction management in a number of communities. The delays encountered missed the opportunity to lay the foundation for post-construction O&M and management during the construction phase which is the most appropriate time. The situation was far better in the first 3 districts. Nevertheless, the results of the Beneficiary Assessment survey demonstrates that the situation is improving in many communities but there is the need for follow-up on the post-construction maintenance management. 12. In response to the demand-based approach of project design, communities had experimented with post-construction management with positive results in three areas. The Mpwapwa district innovation is exemplary. Their experimentation should be nurtured and emerging lessons and experiences should be widely disseminated to other districts and communities. The three areas are:

• Instituting charges for all the completed systems using different systems for charging. The most successful ones are those charging for water based on consumption using 20 litre containers (Jeri cans or buckets) with typical price levels of TSh10 or 20 and even 50 in a few villages. A number of villages have been charging a flat amount per household (TSh 500 in the case of Hembeti in

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Morogoro Rural district) and in one case, TSh300 per person per month (in Chanzuru in Mpwapwa). Experience to date has shown that flat rate charges have been difficult to administer and revenue collection has been poor in all cases. Some of the communities (in Mpwapwa and Kilosa) have introduced best practice in water fund management by preparing and submitting quarterly reports on revenues and expenses to the districts.

• Financial transparency. It is recommended that under the WSDP, DWSTs should provide communities with improved templates for financial reporting and in particular, to analyze and use the information submitted for purposes of assisting them to improve management.

• Private operators. This is in the form of using professional local private operators. This should be encouraged and lessons replicated in other districts.

Activity 2.4: Support to Innovation window program. Rating: Satisfactory 13. In November 2005, the MoW signed contracts with 10 consultants/service providers to implement 10 sub-projects under the Innovation Window (IW), which are collectively considered to be the applied research and development component of the Project. Progress to completion was reported to be 98%. The sub-projects focused on:

• sanitation and health; • information and communication technology; • management of water supply; and • productive use of water.

14. Although the selected offers were apparently the best at the time of selection, some of the sub-projects lack innovativeness. Furthermore, ownership and information dissemination of the results of any innovations as originally planned, needs to be accordingly addressed by MoW upon completion of the sub-projects. 15. Component 3: Institutional Strengthening and Development of the National RWSS Program (estimated at US$3.55 million). Overall Rating: Satisfactory

Activity 3.1: The support to stakeholder consultative process on the strategy for scaling up towards a National RWSS Program. Rating: Satisfactory. 16. The Technical Advisory Committee comprising multi-sector and multi-disciplinary stakeholders had been active during the life of the project. The Project was formally launched with a stakeholder workshop on October 15, 2002 in Dar es Salaam. About 10 TAC meetings were conducted during the life of the Project. The TAC meetings stopped after the Water Sector Working Group (WSWG) and the Thematic Groups of the WSDP were established within the sector dialogue mechanism. Activity 3.2: Technical Assistance- Preparation of the National RWSS Program. Rating: Satisfactory 17. The Project Management Support (PMS) consultants, mobilized in May 2003, assisted GoT to:

• carry out a demand assessment for the National RWSS Program, • prepare a technical report establishing the capital and O&M costs and investment forecasts; • prepare a training and capacity building strategy which is the basis for the ongoing CAPSTART, • carry out the annual technical audit for the first and second years of project implementation as

well as to prepare the MTR report, • prepare the draft National RWSS Program document which was used as the Rural WSS

component of WSDP. This is being implemented nation-wide and attracted multi-donor investment of $390 million;

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• prepare the district grant allocation guidelines; • review and update implementation tools such as the Project Operational Manual (POM) and the

District Operational Manual (DOM); and • prepare the initial design of the MIS for the implementation of the National RWSS Program. An

addendum was effected on the PMS contract to support MoW in the finalization of Urban WSS and WRM component of the Water Sector Support Program and to prepare the harmonized document for WSDP.

Activity 3.3: Development of a MIS for tracking lessons learned from the proposed Project. Rating: Satisfactory 18. About 50 different training and capacity building events were organized under the Project. Some were stand alone events and others integrated into the activities of the FSP (for communities), TSP (for DWST) and specific events under the PMS contract. Manuals and training materials on all aspects and all levels of project implementation were developed. Numerous study reports and relevant documents for the preparation of the National RWSS Program were also prepared under this Project. The training programs/workshops conducted under the RWSSP focused on capacity building of MoW staff, district staff, DWSTs, communities, local artisans, and in some cases private sector and NGOs. Start up orientation/training (CAPSTART) was carried out for all DWST in all districts in the country ahead of the National RWSS Program. Activities were also initiated to support selected private sector firms and companies in the form of support grants for leasing of equipment. Activity 3.4: Assistance to the restructuring of RWSS sector institutions within MoW and the building of the capacity of key stakeholders (MoW, NGOs, consultants, contractors, suppliers of equipment and service providers). Rating: Satisfactory 19. All provision of goods, civil works and services were provided to the Project by private sector providers. To date the Project has promoted the use of:

• 53 local small works contractors; • 13 drilling companies; • 10 mechanized pump suppliers and maintenance agents; • 2 Handpumps suppliers and maintenance agents; • 4 consulting firms (TSPs); • 540 sanitation artisans; and • Large number of NGOs and Facilitation Services Providers (FSPs).

20. The Project provided training for some of the FSPs to improve their outreach approaches. Some firms also obtained support grants through a leasing arrangement under the project to procure needed well sitting equipment and other construction accessories. The biggest contribution is the opportunity to bid competitively for provision of services at the district level. Activity 3.5: Assistance to MoW for overall management of the Project. Rating: Satisfactory 21. Project Coordination Unit at MoW was dissolved and Project management streamlined/integrated into the activities of the restructured Rural Water Supply Division of the Ministry of Water. This activity is completely merged into the implementation of the National RWSS Program.

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Annex 3. Economic and Financial Analysis 3.1 Objective The benefit of the Project would be (a) the improvement of the WSS service to about 550,000 people, living in 121 rural and small towns of less than 15, 000 in the 12 project districts; and (b) the development of an enabling environment for launching a RWSS Program nation wide. Women and children living in rural communities that spend long hours fetching water of doubtful quality would be the primary beneficiaries of the Project. The objective of this post-construction economic evaluation is to demonstrate if the implementation model put into operation has facilitated the realization of the expected economic benefits. 3.2 Benefits and Cost Evaluation 3.2.1 Approach The pre-investment cost-benefit analyses were made under the following set of assumptions: the increased quantity of water supplied under a sub-project can be divided into two parts: one part replaces the previous sources and quantity of water used, and the other part is net increase in water consumption. In this context, benefit of the first part is equal to the savings of economic costs of consumers who no longer use the former water sources. Benefit of the second part is equal to the area below the demand curve between the with-project and without-project of each consumer. In the post-construction evaluation, the same assumptions used in pre-investment, i.e. current water use equivalent from all sources is replaced by water use from improved sources provided under the sub-project. Although water production for the current population has exceeded 10 litres per capita per day, the potential additional consumption has not been valued separately as was the case at appraisal. This would lead to underestimation of the benefit from the provision of the improved sources. The project is expected to help generate health benefits by reducing incidence of diarrhoea and dysentery. However, the expected health benefits have also not been included in the post-investment estimates as was the case in the pre-investment analysis. Some of the benefits resulted from replacing expensive vending water with cheaper water from the sub-project. Again, since the majority of the benefits accrue from reduction in the time spent in collecting water from sources such as streams, rivers and wells, this is also not factored in the estimate. The time saved is valued at 30% of the unskilled minimum wage to allow for differences between the minimum wage and unofficial rates prevalent. It is also assumed, as was the case of pre-investment that, only 70 percent of the time saved can actually be spent in the commercially productive uses. Thus, part of the time savings are valued in money terms. 3.2.2 Summary of benefits and costs The analysis was based on the field data collected during project implementation in all the project districts. The analyses undertaken suggest that the benefits from the savings are large and sufficient to validate the investment made to improve water supply. Specifically, Economic Internal Rate of Return (EIRR) and Net Present Value (NPV) calculated for the three technological options are as follows.

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Table 3.1: Summary of Results of Cost-Benefit Analysis

EIRR NPV (Tshs) EIRR NPV (Tshs) EIRR NPV (Tshs) 1. Mechanized deep boreholes with/without piped schemes

18% 3,476,034,741 20% 4,406,874,301 13% 6,649,984,048

2. Shallow boreholes with hand pumps

16% 2,038,549,908 19% 2,969,389,468 12% -155,702,462.07

3. Gravitational Scheme 49% 4,617,741,76.8 55% 478,848,192.1 29% 197,896,289 3.2.3 Sensitivity Analysis

Sensitivity analysis was carried out for the following scenarios: a) 10% increase in the investment cost; (b) 20% decrease in the time savings. The analysis shows that the options undertaken are all viable, providing rates of return range from 49% to 16% for the base case. In the sensitivity analyses, the shallow wells rate of return is marginally below the 12% discount rate, if the time savings are reduced by 20%, while the result is positive for the other scenarios. 3.2.4 Validation of the community evaluation model. To ensure equity, the following rules were instituted by MoW to control excessive community demand: (a) a capital cost cap equivalent to US$40 per capita for all sub-project; (b) a community contribution of at least 5%; and district contribution of 5% of the capital cost of the sub-project; and (c) full financing of O&M by the community. In retrospect and on the aggregate, these guidelines proved to be valid, although there were significant variations in investment costs per technological option and across project districts. 3.3. Cost -effectiveness analysis A set of cost-effectiveness indicators is shown in Table 3.2 for the three technological options: for deep well pumping scheme, gravity scheme and handpump scheme. The investment per person served and the investment per metric cube of water produced shows significant variation between districts and between the technological options considered. For example, Handeni district has nearly six times the average cost for bore holes. Deep wells have both the highest investment per person served and highest investment cost per cubic water produced. More people get their water supply everyday via deep wells than the other two options.

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Table 3.2: Cost-effectiveness of RWSSP - Technological Options

District Number Cost-effectiveness

Actual Capacity: M3/hr

Actual Investments

Population served

Investment (US$/ person served)

Investment (US$/m3/hr)

Deep Well - Pumping Scheme Cost-effectiveness Kilosa 10 11 97.5 778,807,544 45,468 17,129 7,987,770 Mpwapwa 11 14 68.635 827,583,044 32,013 25,851 12,057,741 Rufiji 10 11 97.5 954,279,283 46,558 25,851 9,787,480 Handeni 6 2 12.5 845,750,000 12,055 70,158 67,660,000 Iramba 17 15 174.5 1,684,003,446 26,626 63,247 9,650,450 Igunga 19 12 196.6 1,568,640,910 61,250 25,610 7,978,845 Kiteto 10 10 78.9 1,857,113,453 26,790 69,321 23,537,560 Kongwa 14 11 254.862 1,713,332,997 74,000 23,153 6,722,591 Kondoa 12 7 91.3 639,375,035 19,489 32,807 7,003,012 Manyoni 15 9 98 1,487,757,275 15,389 96,677 15,181,197 Morogoro 9 7 110 746,384,040 23,084 32,333 6,785,309 Singida 28 33 78.1 1,597,726,333 28,649 55,769 20,457,443 Sub-total 161 142 1358.397 14,700,753,360 411,371 35,736 10,822,133 Gravity Scheme Cost-effectiveness Mpwapa 9 9 350 1312825693 22133 59,315 3,750,931 Handeni 2 2 120 176735452 5968 29,614 1,472,795 Kongwa 1 1 135 211699383 6000 35,283 1,568,144 Morogoro 6 6 375 1184866685 28146 42,097 3,159,644 Sub-total 18 18 980 2,886,127,213 62,247 46,366 2,945,028 Hand Pump Scheme Cost–effectiveness Kilosa 39 35 32.375 85150000 10200 8,348 2,630,116 Rufiji 59 57 52.73 37310000 15720 2,373 707,567 Igunga 37 37 33.3 96200000 10,000 9,620 2,888,889 Morogoro 9 9 8.1 50990000 2775 18,375 6,295,062 Sub-total 144 138 126.505 269650000 38695 6,969 2,131,536 Overall Project Cost-effectiveness Total 323 298 2,465 17,856,530,573 512,313 34,855 7,244,317

Boreholes 16,300,764 901.8444387 40 815038.2 205685.5 Gravity 11,760,000 245.4189807 189 588000 62,247

Hand Pump 1518060 177.6280252 39 75903 19347.5

Total 29,578,824 603.6930533 58 1478941.2

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3.4 Qualitative assessments of the benefits of the rural water supply On May 27, 2004, a meeting was called to assess the beneficiaries’ views of a water supply project in Sazima, a village in Mpwapwa district. Sazima village is about one-and a half-hour travel on a rough road from the district capital. Previously, villagers used to draw water from a private well 10km from the village (average round trip of 6 hours). Now they have access to an improved water system within the village. Their lively account as captured from their narration below bears testimony to the positive outcomes of the water project.

Life in Sazima Village, Mpwapwa (population 2900) after 27/05/04 Water is Health! It is to be free from dysentery, skin disease, trachoma; Water is beauty, love! It is to be enabled to see the hidden real beauty of your loved ones. Water is increased agriculture production! It is to have more time to prepare the soil, to cultivate, to harvest; It is to increase income per capita from TSh.40,000 to TSh.75,000-100.000 Water is academic achievement! It is achieved from zero to 56% to 60% pass rate in grade school Water is strengthening the family! It is fighting rape, the birth of unloved child and preventing HIV! Water is freedom! It is to be able to engage in commerce and other non-agricultural services; Water is gender equality! It is increasing the school participation rate of girls: from 20:80 to 50:50 Water is socialization of children! It is no more leaving child in the house alone for hours in a stretch to fetch water! Water is living in nice homes! It is being able to construct better homes! Water is having healthy livestock! It is diversifying income sources Water is cleanliness! It is having a bath more frequently! Water is generosity! It is being able to not turn down thirsty man a drink Water is freedom from fear! It is escaping the danger of harm of the environment while trying to fetch water Water is above all hope! It is ensuring the next generation and building a bright future for all!

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Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team Members

Names Title Unit Responsibility/ Specialty

Lending G. Tschannerl Sr. Municipal Engineer AFTU1 Sector Work

Rafiki Hirji Water Resource Management Specialist ETWWA Water Resources

J. Gadek Sanitary Engineer AFTU1 Sanitation Keta Ruiz Economist AFTU1 Sector Work M.Mujwahuzi Water Supply Specialist Consultant Sector Work W. van den Wall Bake Rural Infrastructure Specialist Consultant Sector Work Alain Locussol Sanitary Engineer AFTU1 TTL Francis Ato Brown Water Engineer AFTU1 Co-TTL Supervision/ICR Devendra Bajgain Operations Officer AFTU1 Safeguards Wambui G. Gichuri Sr. Water & Sanitation Specialist ETWWP Economist Muthoni W. Kaniaru Sr. Counsel LEGAF Legal England Rogasian Maasamba Program Assistant AFCE1 Operational Support Donald Paul Mneney Procurement Specialist AFTPC Procurement Donald Herrings Mphande Sr. Financial Management Specialist EAPCO Fin. Management

David Mayala Mulongo Urban Specialist AFTU1 Local Government Interface

Kaposo Boniface Mwambuli Consultant ETWAF Sanitation Vedasto Rwechungura Program Officer AFTPS Operational Support Mercy Mataro Sabai Sr. Financial Management Specialist AFTFM Fin. Management Pascal Tegwa Sr. Procurement Specialist AFTPC Procurement Kameel Virjee Financial Specialist ETWAF Rural Finance Issue

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(b) Staff Time and Cost Staff Time and Cost (Bank Budget Only)

Stage of Project Cycle No. of staff weeks USD Thousands (including

travel and consultant costs) Lending

FY97 52.83 FY98 91.83 FY99 41.80 FY00 0.00 FY01 23 76.84 FY02 40 143.45 FY03 0.25 FY04 0.00 FY05 0.00 FY06 0.00 FY07 0.00 FY08 0.00

Total: 63 407.00 Supervision/ICR

FY97 0.00 FY98 0.00 FY99 0.00 FY00 0.00 FY01 0.00 FY02 0.00 FY03 19 72.00 FY04 32 92.22 FY05 31 129.22 FY06 22 104.30 FY07 21 88.55 FY08 1 18.57

Total: 126 504.86

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Annex 5. Beneficiary Assessment/Service Delivery Survey Summary Report 1. Introduction The objective of this study was to review the quality of services delivered by RWSSP sub-projects. Given the importance attributed to community demand and participation in sub-project identification and implementation on quality of service eventually delivered, the survey examined the sub-projects from the beginning of the project cycle. Much emphasis in project design has been on strengthening District Water Departments and their supporting role in the development of community water schemes. The survey therefore analyzed the relationship between communities and District Water Departments in order to assess the extent to which either one supports successful establishment of sustainable and high quality water services. The methodology used for this study was a mix of quantitative and qualitative survey instruments. In each district detailed questionnaires were administered to districts to assess the capacity in the District Water Departments for planning, budgeting and implementation of water and sanitation projects, as well as for providing support to village operations and maintenance activities. Four study sites were selected in each district - with the exception of Mpwapwa District where two additional sites were visited to gain insights from experiences with private operation of community schemes. The total sample size was 26 study sites. The sites were randomly selected, but the survey team was instructed to replace uncompleted schemes with completed ones – if necessary and possible. At each site, a review of the financial, technical and institutional arrangements was undertaken through semi-structured key informant interviews with facility management. Key informants included members of Village Water Committees (VWCs), the pump attendant or another person with supervisory and technical responsibilities. Where relevant, private operators were interviewed using semi-structured interviews (1 questionnaire/data collection template was administered to a group of key informants). Focus group discussions with community members were conducted to assess the quality of service provided and benefits achieved. These were conducted separately for men and women. 2. Built Capacity Interviewed VWCs and Personnel at the District Water Department all acknowledged tangible increases in district capacity as a consequence of the RWSSP. In comparison with the situation before the RWSSP, the presence of Water Engineers in all districts represents an important change. In addition, a large number of other Technical Staff have joined the District Water Departments. Many interviewed DWEs reported being in touch with VWCs over mobile phone when problems occur, which was confirmed in community interviews. However, a few schemes remain outside the mobile network and some DWEs further pointed out the challenges associated with ongoing monitoring of schemes spanning large distances accessible only via low quality roads. All sampled districts now have assigned DWEs, but in one case, the District Water Engineer is still undertaking part time study in Dar es Salaam to obtain a Master’s Degree. In another case, the Engineer was posted to the district in the middle of project implementation thus compromising quality control during the early phase of implementation.

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Table 5.1: Availability of Different Types of Staff at the District Level

Water Engineer

Years in position

Previous Position

Senior Technician Technician

Kilosa 1 3 months DWE 4 15 Manyoni 1 1 Year* DWE 1 11 Morogoro 1 6 months DWE 1 12

Mvomero 1 5 months DWE 1 7 Mpwapwa 1 5 Year DWE 1 11 Rufiji 2 3 Months DWE 1 12

Singida 1 1 Year and 7* Years

DWE (one from school) 1 7

*A DWE is undertaking studies at the University to obtain Masters’ Degrees in Engineering. 3. Project Implementation 3.1 Delays in project implementation. Project implementation time increased over time as the Project moved from the 3 pilot districts to all 12 districts. Time delays were attributed to an overly long and drawn out procurement process. Complaints were also made about the lack of surveying skills in some districts (difficulty in identifying ground water sources), and the difficulty of collecting community contributions. Some mentioned the unfortunate effects of having to start civil works before a source had been identified. 3.2 Community Contributions. As a pre-requisite for sub-project construction, communities were required to pay 5 percent of investment costs. This requirement was instituted as a mechanism to assess community demand for water, their ability and willingness to pay for water and by extension the future sustainability of schemes. Two out of the sampled six districts have been successful in meeting this requirement, collecting close to 100% of required contributions. The reason most frequently given for falling short of this in other districts was been a high level of poverty in sub-project communities. However, when comparing the ratio of required and actual payments within districts no pattern emerges between the absolute size of required contributions and communities’ ability to meet them. Large variation in average collection rates between districts furthermore suggest that the strategies applied and perseverance of DWEs in managing community contributions played at least a partial role in explaining differences across districts. In one district that had been particularly successful in ensuring community contributions, the DWE suggested that poorer communities need more flexible conditions and longer collection times. In addition, DWSTs must visit relatively deprived communities more frequently and take seasonal hardships such as drought into consideration when setting up collection schedule.

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Table 5.2: Community Contributions

Avr Required Contribution

Avr Actual Contribution

% Contributed

Kilosa Deep well (1) 1,515,000 1,515,000 100% Shallow wells (3) 2,498,000 819,333 33% Mvomero/ Morogoro Gravity schemes (4) 6,005,000 3,373,110 56% Mpwapwa Gravity scheme (1) 4,700,000 3,400,000 72% Deep well (5) 3,830,400 3,530,400 92% Rufiji Deep well (1) 8,600,000 1,670,000 19% Shallow wells (3) 1,498,000 686,721 46% Singida Deep wells (4) 8,889,603 5,656,285 64% TOTAL 5,156,285 3,045,625 59% Data based on collection from all schemes regardless of whether they are functional as long as they are completed – a total of 22 schemes. Note: Data includes contributions for all schemes regardless of whether they are completed or not.

3.3 Facilitation Service Providers. Communities generally complain that the presence of Facilitation Service Providers (FSPs) was too brief (less than one day) to be effective in convincing people to contribute. Incidences of embezzlement of collected community contributions by community leaders were reported in many communities. This eroded contributions and morale in such communities. 3.4 The Relationship between DWEs, Contractors and Communities. In places where project implementation has resulted in low quality facilities, the contractual relationship among DWEs, consultants, and contractors was sometimes blamed. As discussed above, DWEs often complained that contractors were unwilling to respond to their requests, and that they were not able to refuse to sign off on payment. This problem might be solved through training in contract management and quality control, and probably does not necessitate structural changes. When asked, VWCs seemed uninterested in assuming responsibility for procurement - an option the project design opened up for. However, in places where construction activities resulted in low quality facilities, lack of community involvement led to strong feelings of disempowerment, thus eroding any sense of ownership previously established. It might therefore be advisable that communities’ supervisory role is strengthened. In addition, this might lower the workload placed on District Water Departments if direct reporting mechanisms are established. 4. Sustainability 4.1 Technical Sustainability. Both interviewed DWEs and VWCs attested that the responsiveness of DWEs was quite high when confronted with technical problems. In a number of districts (Morogoro/Mvomero, Mpwapwa and Kilosa), problems were solved within a couple of weeks or less. Village technicians and DWSTs are acknowledged as solving problems in these districts swiftly when they occur. When pumping equipment like valves and water points failed, the problems sometimes take longer to rectify. Three (Macadam in Kilos, Jabirus Makati in Radii, and Mamba in Morongo – all piped schemes) of the surveyed 22 completed schemes had no functional water points at the time of the survey. This was attributed to insufficient water sources or low pumping capacity thus reflecting problems in project implementation rather than post-construction management. The share of non-functional water

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points was high for shallow wells in Radii District. Interviewees in two schemes complained of repeated breakdowns, and that they felt disinclined to keep paying for repairs.

Table 5.3: District and VWC Responsiveness to Technical Problems

District Number of DPs % Functioning DPs

Av. Response Time - Solved Problems

Kilosa (3 Shallow wells) 19 74 3 Months Mvomero/ Morogoro (3 Gravity schemes ) 98 73 3 Weeks Mpwapwa 1 Gravity schemes 6 100 2 Days 5 Deep wells 23 65 2 Days Rufiji (3 Shallow wells) 21 38 2 Months Singida (4 Deep wells) 30 50 3 Months The sample consisted of 19 functioning schemes. The 4 schemes in Manyoni were excluded as they were unfinished. Finished, but schemes with no functional distribution points include: Jaribu Mpakani (Rufiji); Makalama (Kilosa), and Mtamba (Morogoro). Inadequate water sources are blamed in all – in addition, poor quality pump is blamed in Jaribu Mpakani.

4.2 Financial Sustainability In two districts, all surveyed facilities were operating flat rate payment schemes (Kilosa and Mvomero/ Morogoro). Few seem to be following sustainable book-keeping practices. Only 40 % of schemes were in possession of revenue and expenditure data. Comparing operating costs across the sampled schemes, only 29% flat rate schemes are covering operating costs. Shallow wells in general (“flat rate” and “pay-as-you-fetch” schemes) appear to be struggling to cover operating costs – only 14% of the surveyed schemes manage to cover cost. However, piped schemes with “pay-as-you-fetch payment structures – regardless of whether they are based on diesel, electricity pumps or gravity systems – generally are able to cover operating costs (78% of sampled schemes). Only two schemes in the entire sample were judged capable of covering full maintenance costs (both under private operation).

Figure 5.1: Book-keeping Practices by Payment Structure and Scheme Type

0%10%20%

30%40%50%60%70%

80%90%

100%

Flat rateschemes

ʺPay‐as‐you‐goʺ

Shallowwells

Deep wells Gravityschemes

Revenue andexpenditure data

Revenue data only

No revenue data

The sample consisted of 19 functioning schemes. There were 6 flat-rate schemes, 13 “pay-as-you-fetch schemes”. The survey contained 6 shallow wells, 4 gravity schemes and 9 deep wells. Finished, but schemes with no functional distribution points include: Jaribu Mpakani (Rufiji); Makalama (Kilosa), and Mtamba (Morogoro).

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Problems associated with poor financial management and embezzlement of funds were reported as prevalent in all districts where revenue is being collected, and frustration over such incidences seems to be an important cause of low revenue collection.

BOX 1: By-Laws Guiding Financial Management of Schemes from Mpwapwa District Irrespective of whether a scheme is managed by a Village Water Committee or a Private Operator, Distribution Point Attendants and the Treasury must make and note meter readings, and verify the amount of money collected. In schemes operated by Village Water Committees, it is the Treasurer who is responsible for banking revenues. In schemes operated by private contractors this is done by the contractor, according to the terms and conditions stipulated in their contract. Contracts entered by private contractors also stipulate that contractors must provide monthly reports to the Village Water Committee which submits these to Village Governments. Village Governments disclose reports at Village Meetings. Village Water Committees are similarly obliged to hold monthly meetings. In cases where misappropriation of funds have taken place, the District Water Engineer has the power to take the case to the District Council to be deliberated on by Councilors before it is decided upon whether legal action should be taken. Before being allowed to withdraw money from their bank account, the Village Water Committee are obliged to hold a meeting and prepare minutes which are sent to the District Water Engineer for approval. Bank transaction copies as well as procurement receipts must be sent to the District Water Engineer’s office and a copy filed. Funds are ring- fenced. District Water Engineer can reject expenses that are unrelated to the scheme in question.

Table 5.4: Financial Sustainability of Schemes

Schemes covering Operating Costs

Schemes covering Maintenance Costs District (Number of

Schemes in Parentheses) Payment Structure Name Percent Name Percent

Kilosa (3 Shallow wells) Flat rate Mbande 33% None 0% Mvomero/ Morogoro (3 Gravity schemes) Flat Rate Kuroki 33% None 0% Mpwapwa (1 Gravity Scheme) Per bucket Mazae 100% No 0%

(5 Deep wells) Per bucket Chiseyu, Sazima, Mtera 60%

Chiseyu, Sazima, Mtera 60%

Rufiji ( 3 Shallow wells) Per bucket None 0% None 0%

Singida (4 Deep wells) Per bucket

Matumbo, Ghata, Mughanga, and Mwaru 100% None 0%

The sample consisted of 19 functioning schemes. Finished, but schemes with no functional distribution points include: Jabirus Makati (Radii); Macadam (Kilos), and Mamba (Morongo).There were 7 flat-rate schemes and 13 “pay-as-you-fetch schemes”. The survey contained 6 shallow wells, 5 gravity schemes and 9 deep wells.

In Mpwapwa District the introduction of by-laws regulating the collection, keeping and use of Village Water Funds suggests that problems of financial mismanagement can be curbed through district monitoring efforts. Comparison of privately operated and VWC schemes in Mpwapwa District suggest that the former is able to generate higher revenues, and thus be more sustainable in the longer run. However, given the low capacity of the private sector in many districts, the initiation of such arrangements are likely to require substantial support from districts to set-up.

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Table 5.5: Comparison of Private and VWC operated schemes in Mpwapwa

Village Name Revenue Operations Costs

Operator’s Fee

Surplus after Operations

Maintenance

Surplus after Maintenance

Operated by private operators Berege (Deep well -Diesel) 286,000 365,500 - -79,500 195,833.33 -275,333.33 Chiseyu (Deep well –Electricity) 741,000 297,000 191,490 252,510 50,000.00 202,510.00 Saia (Deep well - Diesel) 403,300 138,000 107,367 157,933 125,000.00 32,933.00 Community operated schemes Chaldea (Deep well – Diesel) 69,000 145,000 -76,000 137,500.00 -213,500.00 Maze (Gravity scheme) 72,000 10,000 62,000 195,833.33 -133,833.33 Matera (Diesel) 270,000 90,000 180,000 404,166.67 -224,166.67 Private operator’s fee is calculated as a 39% share of revenue minus diesel/electricity costs. Maintenance costs are calculated by assuming 2-5% original investment costs annually should be set aside for maintenance. The survey team asked about revenues during rainy and dry seasons. When calculating average monthly revenues 2 dry seasons were assumed.

5. Perceived Benefits and Quality of Services Significant impact on rural livelihood is evident from functional and well-managed schemes. When asked to prioritize the main benefits from the RWSSP, time saving and productivity increases are mentioned in 12 out of 17 communities. Time saving in hours-per-day varied from 1 and 4 hours. Interviews in some villages interestingly suggested that the availability of piped water had stimulated demand and construction of brick houses, eventually leading to a demand for private connections. It is noticeable that constructed schemes cover large populations. It is also noticeable that a large number of schemes are perceived as delivering high quality services in terms of taste, smell and color.

Table 5.6: Perceived Benefits and Quality of Services

Percent of Schemes where Quality of Service is Acceptable in Terms of:

Collection Time Before in hours per day

Reduction in hrs per day Taste Smell Color

Population (Neighboring villages in parentheses)

Kilosa (3 Shallow wells ) 5 1 100% 100% 100% 9,229 Mvomero/ Morogoro (3 Gravity schemes) 4.3 2.7 100% 100% 100%

13,499 (3226)

Rufiji (3 shallow wells) 7.33 4.33 33% 100% 67%

4,049 (2212)

Singida (3 Deep wells) 1.75 0.75 100% 100% 100% 13,705 Mpwapwa Gravity schemes) 6 4 100% 100% 100% 3,029 Deep well 2.25 1.25 100% 100% 100% 17,699 Finished, but schemes with no functional water points include: Jabirus Makati (Rufiji); and Mkalama (Kilosa).

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6. Conclusion Survey results suggest substantial benefits from successful sub-projects. A large number of sample and actual sub-projects cover large populations from targeted villages and sub-villages. The quality of service is generally considered of high quality by communities. The collection of community contributions varies substantially between districts – irrespective of the absolute size of required contributions, thus suggesting scope for extending best practice strategies from the most to the least effective districts. Survey results suggest that capacity has been built in District Water Departments as well as in some communities. DWSTs and communities in general are able to solve technical problems as they occur. Average repair time varies from district to district, but smaller problems are generally solved within a couple of weeks. Broken pumping equipment, and sometimes pipes and valves often take a little longer. Three of the surveyed schemes had no functional distribution points. In all cases, problems reflected flaws in project implementation rather than post-construction maintenance and repair. To increase the quality of works, it might be beneficial to strengthen district capacity in contract management and quality control. The share of non-functional water points was high for shallow wells in Rufiji District, where problems of ground water salinity are common. Interviewees in two schemes plagued by repeated breakdowns and low quality of services confessed that the community was now unwilling to pay for water as well as repairs. It is possible that stronger assessment of community demand should have led to investment in deep wells under such difficult groundwater conditions, or perhaps not being pursued if communities preferred resorting to traditional sources of water if challenged by higher water fees. In districts where large piped schemes operating “pay-as you fetch” payment structures are prevalent, all schemes seem able to cover operating costs. Financial sustainability is low in flat rate schemes and shallow well facilities – a payment system that would be advisable to abandon. Embezzlement of Village Water Funds is a widespread problem for collection of initial community contributions, as well as for revenue collected from the water sales. The prevalence of these problems, and the negative impact they have on the sustainability of schemes, suggest that the DWSTs have an important role to play as a check on community leadership to raise financial sustainability. Mpwapwa District has pioneered the drafting and application of Village Water Fund By-Laws regulating the collection, keeping and use of Village Water Fund, which if extended to other districts would be likely to raise sustainability of established schemes further. Innovation around private operation of schemes also from Mpwapwa District should also be extended to other districts as experiences show higher revenue generating capacity in these schemes.

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Annex 6. Stakeholder Workshop Report and Results

“What was learned from RWSSP implementation?”

Stakeholder Workshop

29th of May 2008, Morogoro

1. The Ministry of Water organized a workshop on “The Accomplishments, Challenges Faced and Lessons Learned from the Implementation of the Rural Water Supply and Sanitation Project” in connection with the World Bank’s Final Supervision Mission from May 19 to June 4, 2008 and in preparation for project closure on the 30th of June 2008. 2. The event brought together approximately 75 participants from the Project districts; Water Technical Advisers from the 5 Regional Secretariats; the Ministry of Water; and the World Bank Supervision Mission. Districts were represented by District Water Engineers (DWEs), District Executive Directors, District Planning Officers and District Health Officers. The Workshop was opened by Assistant Director for Community Water and Sanitation, Eng. Mziray, on behalf of the Director, Eng. Mukumwa.

3. The first part of the workshop had two different objectives: First, to map out action points for the completion of outstanding project activities before RWSSP closure. Secondly, to discuss and summarize main achievements, challenges faced, and lessons learned within the context of the ongoing implementation of the Water and Sanitation Development Program (WSDP). The workshop adopted the following Actions Points for Successful RWSSP Closure:

• Completion of as many Sub-Project Activities as possible before June 21st • Compilation of Outstanding Payments; • Preparation of Action Plan for Spill-Over Activities/Sub-Projects to be completed under the

Water Supply Development Program by beginning FY08/09 • Submission of Final District Completion Report; • Operationalization of MIS (Village Folder System) in all Districts; • Installation of constructed sunguru slabs (SanPlat); • Preparation of Strategy for Post –Construction Management of Schemes.

4. Discussions on RWSSP’s main achievements and the largest challenges faced were portrayed by detailed presentations by DWEs. The establishment of a Decentralized Project Implementation Model, including the successful redefinition of the relationship between the MoW, Local Government Authorities (LGAs) and communities was identified as one of the main achievements. Capacity building in Districts through the posting of Water Engineers and the establishment of District Water and Sanitation Teams (DWSTs) was identified as another main achievement. Community participation was emphasized as an important element in project implementation, as this has led to greater ownership of water facilities. Last, but not least, participants emphasized the visibly large impact successful sub-projects are having on Rural Livelihoods in terms of lower water collection time and improved health.

5. Deliberations on the main challenges faced in project implementation centered on supervision and procurement issues. The relationship between District Water Departments, Service Providers (FSPs and TSPs), and Communities was the subject of much discussion. Many argued that the District Water

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Department must adopt a more proactive role in supervising and providing quality control of Consultants and Contractors in the future. The need to structure contracts so that civil works never precede completion of drilling was also emphasized. Dissatisfaction with delays caused by the process of obtaining “No Objections” from the World Bank, leading to cost-escalation was expressed by many. The process of obtaining approvals of contract variations similarly was also singled out as an unfortunate cause of delays.

6. The second part of the workshop covered findings from a Service Delivery Survey, commissioned by the Water and Sanitation Program-Africa, and implemented in six districts during March and April 2008. The Survey provided insights from communities about their role in project identification and implementation; the quality of services received; as well as an assessment of the financial and technical sustainability of established water schemes. Information was obtained through interviews with personnel at District Water Departments, Facility Management and Community Members. The findings were discussed in working groups.

7. Summarizing deliberations from the first and second parts of the workshop the following recommendations were reached:

• Efforts to Raise Community Contributions as means of Ensuring “Ownership” and

Commitment to Pay for Water must be strengthened in Districts where Contribution Rates are Low. The challenges posed by collecting contributions from very poor communities were widely recognized. Such communities might need longer collection periods, and allowance for partial in-kind contributions. Persistence and strong information campaigns are needed where the perception of water as a “free good” remains strong.

• The Merging of FSP/TSP Functions should be seized as an Opportunity to achieve more

accurate Identification of Community Demand, that is, selection of technology/ scheme type that balances the size of community contributions, water fees, scheme management options, and the likely quality of service. Wider involvement of DWSTs and community extension workers should be, at this point in time, to facilitate stronger community engagement without diverting DWEs from their core tasks. Wider involvement of DWST will also serve as check that the merging of functions doesn’t lead to a neglect of the FSP role. Development of manuals for this purpose was suggested.

• During the Construction phase, District Water Engineers must play a Proactive Role in

Quality Control and Refrain from “Assuming that the Consultant is Always Right”. Training in technical design and contract management should be provided to districts where the capacity for these functions is low. It was suggested that Districts are enabled to pay consultants on a performance basis.

• Post- Construction Support and Monitoring should be Strengthened and include Financial

Management as well as the Technical Support. Experiences from successful projects suggest the need for a “long-term” approach to community support, especially with regards to financial management. To ensure high quality of book-keeping and limit attempts to embezzle village water funds, the District Water Department must monitor revenue collection and expenditures. This type of post-construction support should extend to advice on the viability of fee collection methods. Experience at this point clearly suggests that flat rates are not sustainable. Technical support should span from maintenance advice to advice on repairs when necessary. The Development of Technical Operations and Financial Management Manuals were suggested.

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• Good Experiences in Mpwapwa District in regulating the use of Village Water Funds

through “Water Fund By-Laws” should be replicated as a means of controlling abuse. The key elements include requirements of regular deposits of revenues, granting the DWE authority over Village Fund withdrawals, as well as regular village meetings and disclosure of accounts. Detailing legal recourse in case of abuse may also be important.

• Successful Experiences of Private Operation of Larger Schemes suggest that more

widespread use of this Management Model should be a “must” rather than an “option”. However, low private sector capacity in many places means that a gradual approach is likely to be necessary and should entail substantial supervision and support when the private operators are engaged.

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Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR

Final Evaluation Report of Rural Water and Sanitation Project 1.1 Introduction In 2002 the GoT received a credit of USD 26.0 million from the International Development Association (IDA towards the cost of implementation of the Rural Water Supply and Sanitation Project (RWSSP). Implementation of the project started in 3 districts of Rufiji, Kilosa, and Mpwapwa as pilot districts. The experience gained in the implementation of the project led to an expansion of districts from 3 to 12 in 2003 (later in 2004 became 14 as a result of split of 2 districts). The increased 9 districts are Morogoro Rural/Mvomero, Handeni / Kilindi, Kiteto, Kondoa, Igunga, Singida Rural, Manyoni, Kongwa, and Iramba. In the year 2003, while the 9 districts were implementing the project on the first year, the initial 3 districts which were on pilot were implementing the second year investment programme. The project became effective on June 2002 and was formally launched on October 2002 in Dar es Salaam. The project has therefore been under implementation for about six years. Assessment of Development Objective, Design, Implementation and operational experience 2.1 Assessment of Project Objectives 2.1.1 The development objective of the Rural Water Supply and Sanitation Project is to ensure access to improved and sustained water and sanitation services in rural communities in Tanzania. 2.1.2 The project objective is clear and practical. It is in line with the National Water Policy (NAWAPO) and the rural water supply objective which involves (i) to provide adequate, affordable water supply services to the rural population, (ii) to define roles and responsibilities of various stakeholders, (iii) to emphasize on communities paying for part of the capital costs, and full cost recovery for operation and maintenance of services as opposed to the previous concept of cost sharing, (iv) to depart from the traditional supply-driven to demand-responsive approach in service provision, (v) to manage water supplies at the lowest appropriate level as opposed to the centralized command control approach, (iv) to promote participation of the private sector in the delivery of goods and services, (vii) to improve health through integration of water supply, sanitation and hygiene education. The development objective is also accomplished with the preparation of Rural Water Supply and Sanitation Program. 2.1.3 The RWSSP, by providing reliable access to safe water and sanitation services in the 12 districts, has reduced time used by the communities to fetch water from long distance and give them enough time to concentrate in productive activities, thus contributing to economic growth. Also the sanitation and hygiene promotion has improved the health of the communities and saved money and time used to treat water-borne diseases. The prime beneficiaries of the project are women and children who typically spend long hours to fetch water of doubtful quality. The RWSSP has improved the school attendance for children tremendously and the women are able to utilize the time wasted in fetching water in other activities to improve their economical status. This is evidenced in the remarkable impact the project has had on the economic development and poverty alleviation in the 12 project districts. 2.1.4 For the period of implementation, there was no revision of the project objective set in the PAD. However, due to some delays in project implementation the closing date of the project was extended twice; the first extension was from June 30, 2006 to December 31, 2007 and the second one was from December 31, 2007 to June 30, 2008. Also, in 2006 the name of the Borrower implementing agency was

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changed from Ministry of Water and Livestock Development (MoWLD) to Ministry of Water (MoW) and in 2008 to Ministry of Water and Irrigation (MoWI). 2.2 Assessment of Project Design 2.2.1 Overall, the implementation arrangement put in place was satisfactory. The design of the project was correctly based on the Government’s desire to fulfill its development objectives and policies directed towards economic growth and poverty reduction by increasing the rural water supply and sanitation services coverage to 12 project districts 2.2.2 The project design was also in line with the IDA objectives of reducing poverty and improving the health condition of vulnerable groups in rural settlements. 2.2.3 Also the project design fulfilled the government decentralization policy under local government reform by building the capacity at the district level and community level for planning, implementing and managing RWSS schemes and enhancing NGOs and the private sector participation in the water projects. 2.3 Assessment of Project Implementation 2.3.1 Under the RWSSP, involvement of the communities (with the assistance of the Facilitation Service Providers - FSPs) in decision making on water source options that correspond to their preference and willingness to pay and formulate sub project proposals and management plans, was highly taken into consideration during implementation. 2.3.2 The communities prepared water supply sub-projects, submitted them to local government authorities, had them appraised by the District Water and Sanitation Teams (DWSTs) and approved for financing. 2.3.3 Cost sharing method was used where the communities organized themselves to raise 5 percent of the capital costs of the infrastructure and full cost for operation and maintenance. Local government authorities contributed 5 percent of the counterpart funding. 2.3.4 The project funds were channeled directly to the project district councils by the Ministry and audited by the auditors quarterly. This financing mechanism has built the capacity of the district accountants and helps the service providers to get their payments in time. 2.3.5 Implementation of the project design, supervision, drilling of water wells, and construction of water facilities was carried out with full participation of the private sector (Consultants, contractors, suppliers etc.). There was knowledge transfer from all sides; the Private sector, Communities and District councils, thus building capacity for sustaining the investments. 2.3.6 Key performance indicators were used to monitor physical progress of the project and performance in operational, financial and institutional matters. Quarterly reports were prepared by the FSPs and Technical Service Providers (TSPs) and reviewed by the DWSTs. Relevant findings in the quarterly reports were carried over for further improvement of the project implementation. 2.3.7 Capacity building was implemented concurrently with the implementation of the project. This led to substantial improvement of capacity of the DWSTs and communities in the areas of financial, technical, operation and maintenance and feedback systems; thus creating an enabling environment for sustainability of the infrastructure.

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2.3.8 The issue of the project’s linkage with water resources management was addressed during implementation. Designs provided water for livestock which has improved people’s health by avoiding sharing domestic water sources with livestock. Education of communities on the need for preservation of water sources will impact the sustainability of water sources. 2.4 Assessment of operation experience 2.4.1 This project was the first of its kind in rural areas, involving a whole range of actors - NGOs, Consultants, Drillers, Contractors and Suppliers in facilitation services, consultancy services, drilling works and construction of water facilities. This provided a good experience for all stakeholders. 2.4.2 The involvement of communities in all stages of implementation has resulted in greater awareness of their water facilities. Communities have changed the perceptions that water projects are properties of the Government. Now operate and maintain their projects successfully. 2.4.3 Some of the communities contracted private operators to operate and maintain their water schemes. Experience shows that the private operators perform better in revenue collection compared to water committees. For example, private operators in the Berege, Sazima and Chiseyu districts collect enough monthly revenue from these communities to reasonably cover operation and maintenance costs. 2.4.4 Communities collecting revenue using the flat rate system paid on a monthly basis show that the revenue collected is not enough to sustain O&M costs. Paying per buckets of water filled has chalked greater success. 2.4.5 During implementation, the Ministry transferred the project funds to the respective districts for expenditure for the project activities. Experience shows that the speed of the district accountant to make replenishment was not satisfactory; this resulted in late payments to implementers. 2.4.6 At the beginning, project funds sent to the districts did not indicate the exact amount to be used for sanitation and hygiene and this resulted in low progress on sanitation. The situation was later rectified and a specified amount for sanitation was sent to districts. This step improved implementation of sanitation activities accordingly. 2.4.7 A handpump supply chain that includes private retail outlets has being established to supply and distribute spare parts. This is a new experience where the communities can get pumps and spares in the district outlets without going to regional headquarters or Dar es Salaam as it was in the past. 2.4.8 Ten sub-projects on Innovation Window (IW) were implemented under RWSSP. Experience has shown that some of the sub-projects lack innovativeness. In future, IW sub-projects with innovative ideas should be selected. 3.1 Project components The project had three main components. The highlights of achievements are as follows; 3.1.1 DWSTs successfully established in 12 districts. Their implementation has assisted the communities to form structures which will enable them to run and maintain their sub-projects in a sustainable manner. DWSTs are still required to provide knowledge in an effective way for communities on managing, monitoring and reporting.

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3.1.2 District Water and Sanitation Funds (DWSFs) have been established in all 12 project districts. Community contribution for the first year investment program for the first 3 pilot districts is 100% and 65% in the second year. In the additional 9 districts, contribution ranged from 19% to 92%. The communities of Kiteto and Manyoni districts exhibited very low response in contributing. One of the causes was that they didn’t get the FSP to facilitate the communities on the awareness on contribution of capital investment cost of their sub-projects. For this case the DWST in the respective districts are required to take additional steps to create awareness among these communities, otherwise sustainability of the projects will be questionable. 3.1.3 A total of 138 villages’ sub-projects and 4 small towns had been identified and appraised. About 121 sub projects and 3 small towns’ water projects for Kondoa, Kiomboi, and Kongwa have been built. The major causes of delays in the completion of 18 sub-projects were drilling of unsuccessful boreholes in some of the districts and inadequate capacity of the contractors. These projects will be carried over and implemented through the WSDP. 3.1.4 2,457 out of 2,497 water points have been built. Some 559,030 people were targeted to be served with clean and safe water after completion of the project. By June, 2008 about 521,630 (93% of the targeted population) people will have access to improved and sustainable water. Some of the projects are not operating due to late installation of electricity to run the pumps. In other areas, the contractors are in final stages of completing the remaining construction works. It is expected that by 30th June 2008 all built sub projects will be operational. 3.1.5 The sanitation sub-component has achieved its target satisfactorily. The target was to promote hygiene, sanitation, and HIV/AIDS mitigation and prevention. A total of 147 communities were educated on sanitation and hygiene, 540 artisans trained on production and installation of SanPlat and about 3,690 SanPlat produced. Accordingly, a total of 220 demonstration latrines were built in schools and in community centers. 3. 2 Investment in community based water supply and sanitation sub-projects 3.2.1 Conditional grants are being allocated to water supply and sanitation projects proposed by communities themselves for drilled wells, boreholes with hand pumps, piped systems using pumped water from boreholes or gravity-fed water from springs and rivers, lakes etc. The DWSTs employed local NGOs and firms as facilitation service providers (FSPs) and consultant engineers as technical service providers (TSPs) for carrying-out feasibility studies, design and construction supervision. A handpump supply chain center that includes private retail outlet is being established to distribute hand pumps and spare parts for hand pumps. 3.3 Institutional strengthening and development at the National level 3.3.1 This component included (a) the support to stakeholder consultative process on the strategy for scaling up towards a National RWSS Program; (b) technical assistance to the National RWSS program; (c) the development of a Management Information System (MIS) for tracking lessons learned from the proposed project; (d) assistance to the restructuring of RWSS sector institutions within MoW; and (e) building the capacity of key stakeholders (MoW, NGOs, consultants, contractors, supplier of equipment and service providers). 3.3.2 The RWSSP was launched by holding a stakeholders workshop on 15th October 2002 in Dar es Salaam. A Technical Advisory Committee (TAC) comprised of multi-sector disciplinary stakeholders was formed and has been active during the life of the project. The committee’s functions were streamlined

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into the Water Sector Working Group (WSWG) and the Thematic Groups of the WSDP. The NRWSSP is already endorsed by the WSWG and its implementation started. 3.3.3 The Project Management Support (PMS) consultant, Co-water International, Inc., of Canada won the tender to assist the government to: (a) carry out a demand assessment for the NRWSSP, (b) prepare a technical report establishing the capital and O&M costs and investment forecasts; (c) prepare a training and capacity building strategy on which the on-going CAPSTART is based, (d) carry out the annual technical audit for the first and second years of project implementation as well as to prepare the MTR report, (e) prepare the draft NRWSSP document which was used as the Rural WSS component of the National Water Sector Development Program; (f) prepare the district grant allocation guidelines; (g) review and update implementation tools such as the POM and the DOM, and, (h) prepare the initial design of the MIS for the implementation of the NRWSSP. An addendum was effected on the PMS contract to support MoW in the finalization of Urban WSS and WRM component of the Water Sector Support Program and to prepare the harmonized document for the Water and Sanitation Development Program. 3.3.4 Installation of MIS is complete at the Ministry of Water’s head office and in all 12 districts. Two people in each of the districts have been trained. The systems in 9 districts out 12 are operational. Systems in 3 districts are not operating due to defective computers. This has affected the data collection in the districts. 3.3.5 RWS department of the Ministry of Water was mainstreamed and integration of project activities into the RWSD was done as required in the PAD. The assistant directors (O&M, construction and design) are now responsible for driving various aspects for the projects under the leadership of the Director of Community Water Supply. 3.3.6 Several training and capacity building activities have been performed during the project period. Training manuals and materials have been developed and distributed to all levels. Start up orientation/training (CAPSTART) has been carried out for all DWST in all districts in the country ahead of the National RWSS Program. Activities were initiated to support selected private sector firms and companies in the form of support grants for leasing of equipment. These activities did not go far enough and there is need for enhancement ahead of the implementation of the National RWSS Program. Key areas will include boosting up drilling capacity, FSP orientation for community planning and management of schemes.

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4. Assessment of the outcome of the operations against the agreed objectives

Output from Each Component

Output Indicators

Achievements

1. Demand – based district implementation model validated

1.1 Fully staffed DWST and DWSP completed in 12 project districts 1.2 Audit and certified DWSFs operational in 12 project districts 1.3 Preparation and implementation of HIV/AIDS mitigation plans in 12 project districts

1.1.1 DWST established in 12 districts. All districts have employed at least one qualified engineer. 1.2.1 District Water and Sanitation Funds (DWSFs) have been established in all project districts. All sub-projects established water committees and opened account of water funds which will be used for O&M. 1.3.1 Communities in project districts are aware of HIV/AIDS mitigation. More people are taking precautions since the implementation of HIV/AIDS mitigation plans.

2. Construction of RWSS schemes

2.1 250 community identified sub-projects appraised 2.2 250 RWSS sub-projects financed from DWSF and constructed in eligible communities 2.3 At least 27 of service providers; (e.g. 1 NGO and 1 design and construction supervision consultant per district and 3 zonal hand pump suppliers and maintenance agents 2.4 All sub-projects have undergone environmental screening 2.5 About 30 innovative sub-projects commissioned

2.1.1 A total of 138 villages’ sub-projects and 4 small towns identified and appraised by communities. 2.2.1 138 RWSS sub-projects were financed from DWSF and constructed in eligible communities 2.3.1 About 74 service providers were engaged in 12 districts in various activities. 4 consultants for design and construction supervision, 4 contractors for constructing water facilities, 13 drillers for drilling deep wells/shallow wells, 4 NGOs for facilitation services. 3 zonal hand pump suppliers and maintenance agents established in Morogoro. 2.4.1 Environmental screening was performed for all sub projects during scoping study. Over 90% of sub-projects have undergone environmental screening during post construction. 2.5.1 10 innovative sub-projects were appraised by the Ministry. All sub-projects completed and commissioned.

3. Institutional Strengthening and Development of National RWSS program development

3.1 RWSS component of National Water Policy updated adopted by all stakeholders and widely disseminated 3.2 Coordinated strategy for multi-donor financing of National RWSS Program developed and endorsed by all stakeholders

3.1.1 The RWSS component of National Water Policy updated and disseminated to all stakeholders. 3.2.1 The RWSSP was launched by holding stakeholders workshop on 15th October 2002 in Dar es Salaam. The Technical Advisory Committee (TAC) comprised of multi - sector disciplinary stakeholders was formed and has been active during the life of the project. This committee’s

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Output from Each Component

Output Indicators

Achievements

3.3 50% of DWST in TASAF Phase 1 district trained on the DOM 3.4 All new sector projects formulated along MoW policy principles and implementation Guidelines 3.5 RWSD restructured to fit sector mandate 3.6 MIS operational in 12 Project Districts and MoW

functions were streamlined into the Water Sector Working Group (WSWG) and the Thematic Groups of the WSDP. The NRWSSP is already endorsed by the WSWG and its implementation started. 3.3.1 Several training and capacity building activities have been performed during the project period. Training manuals and materials have been developed and distributed to all levels. Start up orientation/training (CAPSTART) has been carried out for all DWST in all districts in the country (including DWST in TASAF) ahead of the National RWSS Program. 3.4.1 Project was formulated along NAWAPO principles, manuals and guidelines prepared and disseminated to all levels. 3.5.1 RWS department of the Ministry of Water was mainstreamed and integration of project activities into the RWSD was done as required in the PAD. The assistant directors (O&M, construction and design) are now responsible for driving various aspects for the projects under the leadership of the Director of Community Water Supply. 3.6.1 Installation of MIS is complete at Ministry of Water head office and in all 12 districts. Two people have been trained in each district and the system is operational in 9 out 12 districts. Systems in 3 districts are not operating due to defective computers. This has affected the data collection in the districts

5. Main Factors Affecting Implementation and Outcomes 5.1 Factors outside the Control of Borrower 5.1.1 The majority of the supplies required for the construction and rehabilitation of water facilities are not manufactured in the country and the contractors and suppliers had to import from outside the country. Pumps, water meters and some of the pipes are not manufactured in Tanzania. The process of procuring these materials from other countries takes a long time. For example when a supplier ordered the pumps it took about 3 months for the manufacturer to produce the required amount of pumps. The beneficiaries found this process too long. This delay seriously affected project implementation.

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5.1.2 The low capacity of some contractors in terms of equipment, staff and finances to execute the work according to schedule in the contract affected the timely implementation of some of the projects. 5.1.3 Other communities opted for borehole as their source of supply but during drilling the boreholes were found to be dry. The consultant had to re-survey to find an alternative source which would provide water to the community. Time taken to resurvey and drill another borehole delayed the implementation of the project. 5.1.4 During the rainy season some of the rural roads were impassable so it was difficult for the contractors to continue with the construction and drilling works. The rainy season lasts for about three months in a year resulting in delays of some of the sub-projects. 5.1.5 Private sector participation in construction of water facilities has recently been introduced in Tanzania. Earlier on these works were performed by government staff. Because of this reason, some of the contractors lack experience in bidding for the water projects. Some bid very low, so were unable to complete the works as per time schedule and this affected timely implementation. On other sub-projects, the contractors absconded from the site after finding out the cost of the actual work to be done was way above their bid price. These resulted in terminating some of the contractors and others were deployed. All these processes affected the completion period of the projects. 6. Sustainability 6.1 Community involvement in the planning, design, implementation and operation and maintenance of their sub-projects is a key to sustainability. 6.2 Having water communities with water funds and opening bank accounts for all the constructed sub-projects is an indication that they will operate and manage their projects. The funds will be used for operation and maintenance in case of any breakdown. 6.3 Two to three caretakers from each sub-project were trained to assist communities in performing regular maintenance by servicing of engines and pumps as per required schedule. Breakdowns are attended to on time because the caretakers are available in the village. 6.4 Women are the worst victims if the sub-projects are not functioning so involvement of women as members of Water Committees will make the sub-projects sustainable. 7. World Bank Performance 7.1 Lending 7.1.1 Preparation of the project involved 14 Bank staff specialists with different disciplines which facilitated the preparation, negotiations and finally the Bank approval of the project on 21st March 2002. The advice from comprehensive mix of the staff helped the project to start as it was planned. 7.2 Supervision 7.2.1 The performance of Bank staff during supervision is rated highly satisfactory. During implementation there were ten regular supervision missions, the last one before this assessment was in May 2008. All the supervision missions included Bank staff with a reasonable mix of skills. The missions gave a lot of support and advice to the implementing agency, as well as promoting and enforcing more

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effective implementation. Reasonable attention was given to key staff of the implementing agency to discuss implementation challenges in sufficient detail. The satisfactory overall outcome of the project can be partly attributed to the capacity of the team to transfer knowledge to Government and District council staff. Aide Memoires left behind by the team, have been detailed, clear and useful to the Borrower in following up progress on the project. 7.3 Country Bank Office Staff 7.3.1 Throughout the implementation there was enormous support from the country Bank staff. For all issues requiring prior review, the Bank reacted in time and if assistance was required they did not hesitate to cooperate with the Borrower. The task manager responded punctually and effectively to request for “No Objection” throughout the duration of the project. The team always visited some of the project districts and used the opportunity to advise DWSTs, consultants and contractors which hastened the implementation of the sub-projects. 7.4 Overall Bank Performance 7.4.1 Based on the above evaluation, the Banks overall performance is rated as satisfactory. 8. Borrowers Performance 8.1 The Borrower views its performance highly successful, being the first pilot project on RWSS of its kind where the National Water Policy principles for rural water supply and development were tested and satisfactorily achieved. 8.2 The Government demonstrated a high level of commitment during preparation of the project and gave full support to the World Bank staff who were involved in the preparation. Bank team was provided with all relevant documents required by them. 8.3 The project did not experience the counterpart funds constraints as the Government always made the required funds available and on time thus, meeting its obligation as per the Project Development Credit Agreement. 9. Lessons learned 9.1 The following lessons have been learnt in the course of implementation of the project: 9.1.1 Involvement of communities at all stages of implementation of the project (planning, design, construction and post construction) has strengthened the sense of ownership. Communities understood that it is their responsibility to operate and maintain water projects for sustainability. The traditional thinking that water projects are property of the government has been altered. For some of the communities’ willingness to pay for water is no more an issue. 9.1.2 Gender balance in Water Committees is a remarkable success for operating and managing water funds. As the major beneficiaries of improved water services, women must be adequately represented in water users’ organizations. In many cases, it has been shown that people trust their female representatives more than their male representatives. It is often women who are chosen to take charge of money collected from consumers.

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9.1.3 Quality of the consultancy services and construction works depend to a large extent on the keenness of the procuring entity of the district to procure quality consultants, contractors and suppliers. Quality service providers completed their tasks as per required schedule. 9.1.4 Supervision of the consultant depends on an alert DWST. For the districts in which their DWSTs were active the implementation of the sub-projects were implemented as per design and with high quality. However, the DWSTs are required to be trained on contract management in order to be smart during implementation of various contracts. 9.1.5 Implementation of RWSSP required communities to contribute 5% of the cost of their sub-project in cash. This target has been difficult to achieve by some of the communities whose sub-project (such as piped scheme) was expensive. Furthermore, contribution in kind was not taken into consideration. Therefore, in the future there is a need to determine community contributions by considering technology options and in kind contributions. 9.1.6 Confirmation of water sources has to take place before design of water supply scheme. This will limit the probability of making Variation Orders to signed contracts. 9.1.7 Hydrogeological and geophysical investigation of water sources has to be given more emphasis in order to reduce the number of dry boreholes. 9.1.8 Implementation of some of the sub-projects did not follow a proper sequence of activities. Since drilling and civil works contracts were signed at the same time, it resulted into some areas having civil works completed without confirmation on water sources. 9.1.9 A single contracting of technical services and facilitation services to one consultant would minimize confusion to the communities. Different consultants used in facilitation and technical services may interpret the project concept differently to the community.

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Annex 8. Comments of Co-financiers and Other Partners/Stakeholders Not Applicable.

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Annex 9. List of Supporting Documents Project Appraisal Document- Rural Water Supply and sanitation Project, February 21, 2002 Associated Project Document Prepared by MoW (2002)

• Project Implementation Plan • Draft Project Operational Manual • Financial Management Assessment • Procurement Assessment • Project Information Document • Draft Project Concept Note • Draft Project Operational Manual (MoW, 2001) • Initial RWSS District Assessment Report (MMK Consult, 1999) • Supply Chain Study (SKAT, 1999) • Social Assessment Study (Binamungu, 2001) • Environmental Assessment study (Ako, 2001) • Draft Training Strategy Report (Ross Kidd, 2000) • District Operational Manual (Ross Kidd, 2001) • DWSTs Trainer’s Guide (Ross Kidd, 2001) • Financial Management Manual (Fumbuka, 2001) • Data Collection and Economic Analysis (Kulindwa, 2001) • Draft Preliminary Institutional Assessment Report (Kiragu, 2001) • First Year Investment Program for Mpwapwa, Kilosa and Rufiji (Don Consult/Netwas, 2001) • MoW Water Supply and Waste Disposal Design Manual (MoW, 1997) • Draft Rural Water Policy (Mujwahusi, 1999) • District Profiles (RWSD) • Selection of additional Project Districts Report (RWSD, 2001) • Experiences for RWSS Projects in Tanzania • MWLD Annual Reports (1996, 1997, 1998)

National Rural Water Supply and Sanitation Program (MoW, 2005)

• Social Impact Analysis of the NRWSSP • RWSSP MIS Implementation Plan and Budget • Thematic Paper – Management Information System (MIS • Technical, Social and MIS Audit of the RWSSP • Mid-Term Technical Assessment of the RWSSP

Project Appraisal Document, Water Sector Support Project, (2007) National Water Policy, (GoT 2002) National Water Sector Development Strategy (GoT, 2007 Project Aide Memoires Beneficiary Assessment/Service Delivery Survey Report, June 2008 Stakeholder Workshop Report and Results, June 2008 Tanzania - Country Assistance Strategy

TABORATABORA

MANYONIMANYONI

IRAMBAIRAMBA

SINGIDASINGIDA KONDOAKONDOA

DODOMADODOMA

MPW

APW

A

MPW

APW

A

RUFIJIRUFIJI

KILOSAKILOSA MO

ROG

ORO

MO

ROG

ORO

HANDENIHANDENI

KITETOKITETO

DODOMADODOMA

SINGIDASINGIDA

TABORATABORA

ARUSHAARUSHA

COASTCOAST

MO

ROG

ORO

MO

ROG

ORO

TANGATANGA

TABORA

MANYONI

IRAMBA

SINGIDA KONDOA

DODOMA

MPW

APW

A

RUFIJI

KILOSA MO

ROG

ORO

HANDENI

KITETO

DODOMA

SINGIDA

TABORA

ARUSHA

COAST

MO

ROG

ORO

TANGA

LINDI

RUVUMA

IRINGA

MWANZA

MARA

KILIMANJARO

KAGERA

RUKWA

KIGOMASHINYANGA

MBEYA

MTWARA

DEM. REP.OF

CONGO

JAN

UA

RY 2002

IBRD 31621

TANZANIA

RURAL WATER SUPPLY ANDSANITATION PROJECT

INITIAL PROJECT REGIONS

PROJECT DISTRICTS

MAIN ROADS

RAILROADS

RIVERS

REGION CAPITALS

NATIONAL CAPITAL

REGION BOUNDARIES

INTERNATIONAL BOUNDARIES

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

30˚32˚ 34˚ 36˚ 38˚ 40˚

34˚ 36˚ 38˚ 40˚

2˚

4˚

6˚

8˚

10˚

2˚

4˚

6˚

8˚

10˚

TANZANIA