World Bank Document...Country Management Unit 6 Latin America and the Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 18009

IMPLEMENTATION COMPLETION REPORT

lBOLIVIA

MAJOR CITIES WATER AND SEWERAGE REHABILITATION PROJECT

(Credit 2187-BO)

June 12, 1998

Finance, Private Sector and Infrastructure DepartmentCountry Management Unit 6Latin America and the Caribbean Region

This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization.

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CURRENCY EQtJIVALENTSCurrency Unit = Boliviano (Bs.)

EXCHANGE RATE EFFECTIVE DECEMBER 31,1997US$1.00 = Bs5.34

Bs.1.00 = US$0.1873

WEIGHTS AND MEASURESMetric System

FISCAL YEARJanuary 1 to December 31

ABBREVIATIONS AND ACRONYMS

ANESAPA National Association of Water Supply and Sanitation Institutions (Asociaci6n Nacional de Empresasde Agua Potable y Alcantarillado)

IDB Inter-American Development BankCAF Andean Development Corporation (Corporaci6n Andina de Fomento)CONATA National Tariffs Board (Consejo Nacional de Tarifas)COTEAS Water Sector Coordination Committee (Comite Coordinador del Sector Agua Potable), Ministry of

Urban Affairs and HousingDINASBA National Directorate of Basic Sanitation (Direcci6n Nacional de Saneamiento Basico)EIA European Investment BankFIS Social Investment Fund (Fondo de Inversi6n Social)FNDR National Fund for Regional Development (Fondo Nacional de Desarrollo Regional)IDA International Development AssociationIFC International Finance CorporationKfW Kreditanstalt fur WiederaufbauMDA Ministry of Human Development (Ministerio de Desarrollo Humano)MPC Ministry of Planning and Coordination (Ministerio de Planeamiento y Coordinaci6n)MUA Ministry of Urban Affairs (Ministerio de Asuntos Urbanos)PPF Project Preparation FacilityPROFISE Institutional Strengthening Program (Programa de Fortalecimiento Institucional) (SEMAPA)PRORPAAL Program for Preinvestment Studies in Water and Basic Rural Sanitation Projects (Programa de

Estudios de Preinversi6n en Proyectos de Agua Potable y Saneamiento BAsico Rural)PROSABAR Basic Rural Sanitation Project (Proyecto de Saneamiento B$sico Rural)SAMAPA La Paz Municipal Water and Sewerage Services Company (Servicio Aut6nomo Municipal de Agua

Potable y Alcantarillado de la Paz)SAGUAPAC Santa Cruz Public Utilities Cooperative Limited (Cooperativa de Servicios Publicos Santa Cruz

Limitada)SAR Staff Appraisal ReportSEMAPA Cochabamba Municipal Water and Sewerage Services Company (Servicio Aut6nomo Municipal de

Agua Potable y Alcantarillado de Cochabamba)SIRESE ector Regulation System (Law No. 1600 of October 28, 1994) ($istema de Regulaci6n Sectorial)UNASBA Basic Sanitation Departmental Unit (Unidad Departamental de Saneamiento Basico)UNDP United Nations Development ProgrammeUV Neighborhood Unit (Santa Cruz de la Sierra) (Unidad Vecinal)WB World Bank

Vice President Shahid Javed BurkiCountry Management Director Isabel GuerreroSector Management Unit Director Danny M. LeipzigerTask Manager Mena4em Libhaber

FOR OFFICIAL USE ONLY

TABLE OF CONTENTS

Page No.PREFACE ...... ................................................................. i

EVALUATION SUMMARY ....................................................................... ii

PART I: PROJECT IMPLEMENTATION ASSESSMENT ....................................................................... 1

A. STATEMENT OF OBJECTIVES ........................................................................ 1B. ACHIEVEMENT OF OBJECTIVES ........................................................................ 5C. MAJOR FACTORS AFFECTING PROJECTP IMPLEMENTATION ................................... ....................... 28D. PROJECT SUSTAINABILLTY ....................................................................... 29E. IDAPERFORMANCE ....................................................................... 31F. BORROWER PERFORMANCE ....................................................................... 32G. ASSESSMENT OF OUTCOME ....................................................................... 33H. FUTURE OPERATIONS ....................................................................... 35I. LESSONS LEARNED ........................................................................ 35

PART I: STATISTICAL ANNEXES ....................................................................... 37

TABLE 1: SUMMARY OF ASSESSMENTS ....................................................................... 37TABLE 2: RELATED BANK LOANS/CREDITS ....................................................................... 38TABLE 3: PROJECT TIMETABLE ....................................................................... 40TABLE 4: CREDIT DISBURSEMENTS: CUMULATIVE ESTIMATED (SAR) AND ACTUAL ................ 41TABLE 5: KEY INDICATORS FOR PROJECT IMPLEMENTATION ........................................................ 43TABLE 6: KEY INDICATORS FOR PROJECT OPERATION ..................................................................... 44TABLE 7: STUDIES INCLUDED IN PROJECT ................................. ....................................... 45TABLE 8A: PROJECT COSTS ........................................................................ 47TABLE 8B: PROJECT FINANCING ....................................................................... 47TABLE 9: ECONOMIC RATE OF RETURN ....................................................................... 48TABLE 10: STATUS OF LEGAL COVENANTS ........................................................................ 49TABLE 10: STASTUS OF LEGAL COVENANTS (CONTINUATION) ........................................................ 50TABLE 11: COMPLIANCE WITH OPERATIONAL MANUAL STATEMENTS . . 51TABLE 12: BANK RESOURCES: STAFF INPUTS ........................................................................ 51TABLE 13: BANK RESOURCES: M SSIONS ....................................................................... 52

ANNEX 1 ................................................................................................................... 53ANNEX2 .............................................................................................................................. 54ANNEX3 ................................................................................................................... 64ANNEX 4A ........................................................................... ....................................... 66ANNEX 4B .......................................................................... ........................................ 71ANNEX SA ........................................................................... ....................................... 81ANNEX SB .................................................................................................................. 98ANNEX6A .................................................................................................................. 105ANNEX6B ................................................................................................................. 122ANNEX 7 .............................................................................................. ............................... 129

ANNEX8A ................................................................................................................. 147ANNEX 8B ................................................................................................................. 153

This document has a restricted distribultion and may be used by recipients only in theperforTnance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization.-=


BOLIVIA

MAJOR CrTIES WATER AND SEWERAGE REHABILITATION PROJECT

Credit 2187-BO

PREFACE

This is the Implementation Completion Report (ICR) for the Major Cities Water andSewerage Rehabilitation Project for which IDA Credit 2187-BO of SDR 25 million (US$35million equivalent) was approved on December 4, 1990. The Credit Agreement was signed onDecember 17, 1990 and became effective on September 17, 1991.

The Credit was closed on Decembier 31, 1997, 18 months after the original closing date(June 30, 1996). Final disbursement took place on May 6, 1998, at which time a balance of US$139,320.47 was canceled.

Cofinancing for the project was provided by: (a) the beneficiary water and seweragecompanies in three cities (La Paz, Cochabamba, and Santa Cruz de la Sierra); and (b) KfW ofGermany for sewerage in the city of El Alto de la Paz, through a grant of DM 23 million orUS$13.37 million equivalent.

This ICR was prepared by Mr. Menahem Libhaber (LCSFP) and Mr. Herbert Farrer(Consultant) of the Latin America and the Caribbean Region, and reviewed by Ms. SusanGoldmark (Sector Leader, LCSFP) and Mrs. Maria Victoria Lister (Quality Assurance SupportUnit, LCSFP).

Preparation of this ICR began during IDA's final supervision mission in December 1997.It is based on material in the project files. The Borrower and KfW contributed by working closelywith the team that prepared the ICR and by providing comments on the draft, which have beenincorporated into the final document. The Borrower's comments are included in Annexes 5 to 8.The sewerage project in the city of El Alto, financed by KfW, will be completed in the second halfof 1998. Annex 3 includes a note from the German agency explaining the reasons for the delay incompleting the works.

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BOLIVIA


Credit 2187-BO

EVALUJATION SUMMARY

Introduction

i. Bolivia, with a population of close to 7.4 million, 61% of which is urban, has madesignificant improvements in its water and sanitation sector in the past decade. Nevertheless, inspite of these improvements, the demand for water and sanitation services in the country is stillvery high and a lot remains to be done. Close to 76% of the urban population has now access topotable water and 32% has sewerage connections. Over 60% of the country's urban populationresides in the three main cities: La Paz, Santa Cruz de la Sierra and Cochabamba. Water supplycoverage reaches 84% of the population in the capital La Paz and 80% in Santa Cruz, while therespective figure for Cochabamba is 57%. Sewerage coverage in La Paz, Cochabamba and SantaCruz is 56%, 54%, and 33%, respectively. The water company of Santa Cruz, a cooperativeowned by its customers, demonstrated an excellent performance during project implementation.In La Paz a 30 year concession of the waiter and sewerage services has been awarded to a privateoperator. In Cochabamba, on the other hand, serious management operational problems continueto persist as a result of political intervention. Similar problems also prevail in most other cities inBolivia. It is expected that with the history of good performance of Santa Cruz and the recentimprovements in La Paz, the authorities will facilitate a transition from public utilities to otherforms of management that will address existing problems, steer the companies toward an effectiveand efficient management, and promote private investment, since this is the only way ofaddressing the country's serious water and sanitation problems. Since 1980, the Bank has madefour loans to Bolivia for water and sanitaition projects (including the present one), for a total ofUS$68.7 million. Part of the Municipal Development Project, Credit 2565-BO, is also being usedfor construction of water and sanitation works.

Statement of Project Objectives

ii. The main objectives of the project were to:

(a) Improve and expand water and sanitation services in the major cities of Bolivia(La Paz, Santa Cruz and Cochabamba), mainly by: (i) rehabilitating waterproduction facilities and increasing water distribution capacity in La Paz tobenefit a population of about 200,000 (13% of the metropolitan population in1995); (ii) constructing sewerage systems in the municipality of El Alto, tobenefit a population of about 200,000 (13% of the metropolitan population in

1995); (iii) installing water production and distribution facilities in areas currentlynot served in Santa Cruz, to benefit a population of about 300,000 (35% of thepopulation of Santa Cruz in 1995) and expanding sewerage systems to benefit apopulation of about 30,000; and (iv) rehabilitating and expanding waterproduction, transmission and distribution facilities in Cochabamba, to benefit atotal population of about 300,000 (50% of the population of Cochabamba in1995) with access to piped water and eliminating/reducing rationing;

(b) Improve the operational efficiency and management systems of the water utilitiesresponsible for services in the above cities;

(c) Introduce a framework of sector policies and the institutional arrangementsneeded to accelerate the development of the water supply and sanitation sectorcountrywide;

(d) Improve the institutional capabilities of central agencies for overseeing the watersector, mainly through the introduction of management systems; and

(e) Improve coordination between the Bolivian authorities and donors in preparingand financing sector-wide projects.

Achievement of Objectives

mii. The physical works in the three cities were completed satisfactorily. However, by theoriginal closing date (June 30, 1996) only SAGUAPAC, the water company of Santa Cruz, hadcompleted its works, while SAMAPA, the water company of La Paz and SEMAPA, the watercompany of Cochabamba, had barely initiated the implementation of their components, whichwere only completed after two extensions of closing dates (the first for one year and the secondfor six months). In La Paz, all of the original work program was completed by the new closingdate. In Cochabamba not all the works originally programmed were constructed, because ofphysical opposition by farmers to drilling of new wells which would deprive them of water forirrigation in favor of water supply to the urban sector. As a result, the increase achieved in thewater supply flow was only 35% of the flow increase initially envisaged and only 77% of theoriginal work program was carried out by closing date. At present there are no programs and nofunds to construct the rest of the works. In Santa Cruz, the works were completed ahead ofschedule with savings of 25% of the original budget. With IDA's authorization, the saved fundswere used to construct additional sewerage works in Santa Cruz and at closing date, 125% ofthe original work program for this city has been completed.

iv. The originally planned institutional strengthening programs for SAMAPA and SEMAPAachieved only modest results. The President of Bolivia decided to privatize both companies andIDA conditioned the extension of the closing date on the implementation of the privatizationprocesses during the extension period. The privatization of SAMAPA was completedsuccessfully and the concessionaire took over the responsibility for the provision of services inAugust 1997, but the privatization effort of SEMAPA failed because: (i) the Government was

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too late in implementing it; and (ii) the p:rivatization concept was coupled with the constructionof the Corani water supply project, to which the Municipality of Cochabamba was opposed. Theinstitutional strengthening program which was carried out in SAMAPA prior to the privatizationimproved the performance of the operations department but was unsuccessful in improving theadministration and the financial departments. A supervision mission which visited the privatizedcompany in November 1997 observed many organizational changes, better client service and, inparticular, improvements in implementation of the project works. It appears that efficiency hasalso improved. It is expected that, as a result of the privatization, the performance of thecompany wiDL continue to improve in all aspects. The privatization of the water and sewerageservices in La Paz is an impressive achievement that enabled attaining SAMAPA's institutionaldevelopment objectives. Prior to the privatization effort, an institutional strengthening program(PROFISE) was carried out in SEMAPA and achieved modest results. Unfortunately, theprogram is not sustainable because of the tumover in managers and senior administrative staffwhich occurred after the change of Government in August 1997, and the institutionaldevelopment objectives of the SEMAPA. component were not achieved. In Santa Cruz thepriority institution development programrs were successfuDly carried out.

v. The national program of improving the institutional capacity of the centralsector/Regional agencies, which was under the responsibility of Fondo Nacional de DesarrolloRegional (FNDR), the National Fund for Regional Development, was only partly accomplished.The development and implementation of a sectoral policy aimed at accelerating the developmentof the country's water supply and sanitation systems was not achieved under the project. Theimprovement of the institutional capabilities of central agencies for overseeing the water sectordid not materialize because the institutions and Ministries involved (MUA and MPC) weredissolved in the early years of project implementation, as a result of reorganization of theexecutive branch. Similarly, the national program for training in operation, maintenance andcommercial and financial management was not carried out; instead, each beneficiary companyused loan proceeds for training of its own staff. Nevertheless, the Government had established,under the SIRESE Act in 1994, the Water Superintendency to regulate the water supply andsanitation utilities in the country. It is currently preparing a water and sanitation Law toestablish the policy framework in the sector and define the responsibilities and the authority ofthe water regulator. Through the activities of FNDR, the coordination between the Bolivianauthorities and donors in preparing and financing sector-wide projects has improved and varioussector financing programs have been processed (an IDB sector loan and an IDA municipaldevelopment credit through which investments in the water sector are financed). Under thecredit, 99 water and sanitation systems were designed for rural areas as support for thePROSABAR (Rural Basic sanitation) project. This activity was not included in the originalprogram but was added later at the Government's request.

Major Factors Affecting Project Implementation

vi. The project was adversely affected by the following factors:

* Political intervention in the management of the companies in La Paz andCochabamba, in pursuit of interests that conflicted with the companies' obligation to

provide adequate services to the public; with the resulting lack of managementautonomy and high turnover of managers in these companies;

* The financial weakness of SEMAPA (Cochabamba) which could not provide thecounterpart funds on time and was finally bailed out through a Government loan;

* Weak technical capacity for project preparation and evaluation, particularly in the LaPaz and Cochabamba components, which resulted in retendering of works andcaused considerable delays. In the Cochabamba component, preparation of a masterplan prior to carrying out the emergency works significantly delayed theimplementation of these works;

* Difficulties in conforming to IDA's standard bidding documents delayed theprocurement processes by more than a year;

* Lack of experience by suppliers (representatives of foreign firms) in preparing bidsand honoring their contracts, which was, in some cases, the reason for retendering ofgoods;

* Weakness of the implementing units in La Paz and Cochabamba, whose staff lackedmanagement skills, experience and training. SEMAPA never had an independentimplementation unit and its planning unit, which was responsible for theimplementation of the project, was attending several other projects at the same time.

Project Sustainability

vii. In La Paz the concession of water and sewerage services to a private operator willpromote: (i) continuity in managerial and other key staff, and (ii) the implementation of suitableadministrative, commercial, financial, operating and maintenance practices, and make investmentfunds available, all of which are core elements for ensuring the sustainability of the enterprise andthe project.

viii. In Cochabamba since SEMAPA has not been privatized, project sustainability isdoubtful because of: (i) political intervention in managing the company and weak managerialcapacity; (ii) frequent turnover of managers and key personnel; (iii) lack of stability inadministrative, commercial and financial management, and operating and maintenance programs;and (iv) continuing financial weakness that will severely affect the company's operating andmaintenance performance and its debt repayment capacity. It is expected that the currentGovernment and the Water Superintendency will facilitate the transformation of SEMAPA into acompany capable of resolving these problems and of improving its performance. SEMAPA alsoneeds to urgently carry out a program to reduce Unaccounted for Water (UFW) to around 25%(from the current figure of 52%) and strengthen the programs introduced under PROFISE.Sources of water for urban use are scarce in Cochabamba and it will be necessary to carry out

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the following actions in order to increase the supply of water to the city: (i) develop a newsurface water source; and (ii) reform SEM[APA through the introduction of private sectorparticipation (PSP) aimed at improving its performance and promoting private investment. Thetwo activities should be carried out simultaneously since they are closely related, i.e., it will beimpossible to reformn SEMAPA unless sufficient water is available to satisfy the demand, and itwill be impossible to recover the cost of developing a new water source without carrying out thePSP reform which would transform SEMALPA into an efficient utility which would expand itssystems to permit meeting the demand. Siince the Municipality of Cochabamba and the NationalGovermment have adopted the strategy of constructing the Misicuni project as the new watersource for the city, and since this project is too costly to be supported by the urban consumers(see Annex 4), it is unlikely that SEMAPA will be privatized, unless the Government providesheavy subsidies to finance the Misicuni project, thus it is unlikely that significant improvement inthe company's performance will take place in the near future.

ix. In Santa Cruz, SAGUAPAC's sustainability is guaranteed by the stability, efficiency,and effectiveness demonstrated by this company over the seven years of project implementation.Nevertheless, the company has difficulties in obtaining loans from multilateral agencies andbilateral donors because of the Governmeint's approach that the company needs to attract privateinvestments. The ability of the company to expand its services in response to the growingdemand will depend on the success in attracting private investments or commercial loans.

X. As for the operation and maintenance of the installations and works constructed underthe project, it is expected that in Santa Cnrz and La Paz the works will be fully used to serve thepurposes they were built for since the water companies in those cities are efficient andresponsible. The installations and works constructed in Cochabamba will also be operated totheir full capacity because they are priority works in a city which suffers of severe water scarcity.They might, however, not function properly due to the shortage of funds for operation andmaintenance.

IDA Performance

xi Project identification, preparation, and appraisal were based on preliminary studies of theworks and not on final designs. This led to subsequent reformulations of the projects in La Pazand Cochabamba and to delays in implementation.

xii. The SAR adequately identified the rehabilitation and expansion requirements for thewater and sewerage systems and for institutional strengthening. IDA correctly identified themain risks of the project, which in fact maLterialized, and not all were mitigated. It also correctlyidentified the need to privatize the companies in La Paz and Cochabamba after finding out thatthe originally proposed institutional strengthening strategy was not effective.

xiii. Political intervention in La Paz anid Cochabamba was promptly detected by IDA andsolutions were proposed (privatization of SAMAPA and SEMAPA). IDA was constructive inconvincing the authorities to implement the proposed solutions and provided all the technical

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assistance necessary to carry out the privatization process. Success, however, was only partial,since SEMAPA was not privatized.

xiv. Four task managers were involved with the project from its inception to completion.During the period September 1991 to November 1994 procurement activities were delayed dueto slow response of 1DA in issuing no-objections to bidding processes. During the same period,supervision of the national component was also weak, but improved from November 1994 on,when IDA identified the problems and helped to resolve them. Intensive IDA's supervisionduring the final implementation period enabled to ensure the satisfactory completion of workswithin a reasonable period.

xv. IDA's recommendations for carrying out specific groundwater studies in Cochabambaand Santa Cruz and its insistence on having them carried out clarified the real capacity of theaquifers and identified the risks of their contamination. In spite of the partially successful resultsin the national component and in the Cochabamba component, considering the Bank activities inpreparation and supervision and the outcome of the project, overall, IDA's performance wassatisfactory.

Borrower Performance

xvi. In La Paz and Cochabamba significant delays were experienced in completing the worksand in implementing the institutional strengthening programs. The institutional weakness of thecompanies in the two cities, continued political intervention in their management, and turnover inkey staff led to delays in the implementation of the projects. Local political intervention alsocontributed to the failure of the effort to privatize the water company of Cochabamba. Incontrast, the private concessionaire of the La Paz water company was able to resolve problemsand speed up the completion of works.

xvii. The limited financial capacity of the Cochabamba water company delayed theimplementation of the project until it managed to obtain a Government loan to finance itscounterpart contribution. During project implementation, the company was not able to reducethe high level of UFW which reached a value of 52% at closing date. The construction of theWara Wara project was unsatisfactory. An incompetent contractor was hired and completed thework with a delay of 561 days rather than the 305 days agreed upon in the contract. Despite thedelay, SEMAPA refused to rescind the contract and insisted on completing the works with thesame contractor. This was, in fact, the reason for the delay in the completion of such animportant work which delayed the 100 V/s increase in the water supply flow to the city.

xviii. The water companies of La Paz and Cochabamba had difficulties in applying IDA'sstandard procurement documents. Neither IDA nor FNDR identified this problem in a timelyfashion and this led to delays in preparation and approval of the bidding documents.

xix. The Santa Cruz water company implemented the project efficiently and effectively. Itcompleted the works ahead of schedule and with significant savings, which were used to

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implement additional sewerage works. Its performance indicators rank it as one of the bestwater and sewerage companies in Latin Arnerica.

XX. FNDR, which was in charge of managtng the credit, complied satisfactorily with itsfinancial intermediation function. However, it was not always successful in providing timelysupport in the administrative aspects of tendering and implementation of contracts, andsometimes delayed disbursements to the beneficiary water companies. Through the activities ofFNDR, the coordination between the Bolivian Authorities and donor agencies in preparing andfinancing sector-wide projects has improved. The national program of improving theinstitutional capacity of the central sector agencies was only partly accomplished, mainly becausethe Mnistries involved (MAU and MPC) were dissolved in the early years of projectimplementation as a result of reorganization of the executive branch. The development andimplementation of a sectoral policy aimed at accelerating the development of the country's watersupply and sanitation systems, was not achieved under the project because of weakness of theagencies responsible for the sector.

Assessment of Outcome

xxi. The works in the three cities were completed satisfactorily, although with major delays inLa Paz and Cochabamba. In La Paz, 100%,-o of the works programmed under the project wereconstructed. In Cochabamba the works were redesigned and the originally expected increase inwater flow was reduced by 65% (from an expected value of 630 I/s to 220 Lls) because of thephysical opposition of farmers to drilling new deep wells. Consequently, only 77% of theprogrammed works were constructed. In Santa Cruz de la Sierra, additional sewerage workswere constructed using the funds saved in carrying out the original program, and so at theclosing date, 125% of the original work program has been completed.

xxii. SAMAPA, the water company of La Paz, was privatized under a 30-year concessioncontract. This represents a major institutional reform that will ensure the sustainability of thecity's water and sewerage services. In Cochabamba a broad institutional development program(PROFISE) was implemented but achieved only limited success. The failure to privatizeSEMAPA casts doubt on the sustainability of the water and sewerage services in the city.Moreover, the turnover of managers and senior staff after the change of Government in August1997 undermined the progress made in training, management and the PROFISE program.SAGUAPAC used the credit to address its priority needs in water supply but still needs toexpand its sewerage system.

xxmii. The objectives of improving the institutional capabilities of central agencies foroverseeing the water sector and of developing an institutional and policy framework to improvethe performance of the sector countrywide were not achieved, although a financial policy wasestablished by a supreme decree. The objective of improving coordination between the Bolivianauthorities and donors in preparing and financing sector-wide project was achieved through theexperience gained by FNDR and the improvement of its performance. In addition, 99 water andsewerage systems for rural communities were designed under the national component and theirimplementation could be financed under fiture rural development programs. Although the

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objectives of policy framework development and institutional capacity building of centralagencies were not achieved under the project, the Government established a WaterSuperintendency which is supposed to take over the regulatory role in the sector, with FNDRcontinuing to function as the financial support entity for the sector.

xxiv. The internal rate of return (IRR) for SAMAPA at closing date was 8.65% for thecombined water and sewerage project (compared to an expected value of 10% in the SAR). ForSAGUAPAC, the final IRR was 20.37% (compared to an expected value of 15% in the SAR).SEMAPA achieved an IRR value of only 0.58% (compared to an expected value of 15% in theSAR) since not all the project's benefits were achieved in terms of increased water flow and sinceit did not manage to reduce the UFW level, which reached 52% at closing date, compared to avalue of 30% envisaged in the SAR.

xxv. Although only partial success was achieved in the national component and in theSEMAPA component, the results of the SAMAPA and SAGUAPAC components wereextremely successful and impressive. In view of the highly satisfactory results in theSAGUAPAC and SAMAPA components, which outbalance the partial results obtained in theSEMAPA component, overall, the project is ranked as moderately satisfactory.

Future Operations

xxvi. In 1994 the Government established, under the SIRESE Act, the Water Superintendencyas the regulator of the water and sewerage utilities in charge of monitoring technical,administrative, commercial, and financial aspects, so as to guide the sector and ensureimplementation of institutional management policies. Although this reform is recent, it isexpected to improve the sector's performance over the medium term.

xxvii. Privatization of sector companies, which began with the long-term concession ofSAMAPA, is the route that other companies should follow. Support for these initiatives, whichwould help to improve the operational efficiency of the water companies, is an area of interestfor future IDA operations. IFC operations can be used to support the privatized companies.

xxviii A Regulatory Reform and Privatization TA under preparation will support theconversion of local water and sanitation utilities into efficient entities. This project will financetechnical assistance to: (i) assist the water Superintendency to establish performance indicatorsthat will be incorporated within each local water utility's concession contract; (ii) supervise theseentities to determine whether they comply with these obligations; and (iii) convert watercooperatives into corporations with private investment in order to comply with investment andoperational requirements.

Lessons Learned

xidx. It is preferable that the preparation and evaluation of projects be based on finalengineering designs. Preparation based on feasibility studies may lead to delays caused by theneed to redesign works and make subsequent adjustments in the scope of works, which maycause delays in achieving the expected benefits.

xxx. It is extremely difficult to develop and implement institutional strengthening programs ininefficient ailing public utilities that have no incentives to improve their performance and whichare subject to strong political control and complex administrative procedures. In such cases,rather than investing in institutional strengthening, the Bank should condition its loans oninvolving the private sector in the managenment and delivery of services. If Governments andBorrowers do not accept this approach, IDA should not participate in financing the respectiveprojects.

xxxi. Privatization depends entirely on the political will to carry out the process. It wassuccessful in La Paz because the Government and Mayor were committed to it, and it failed inCochabamba because of the objection of the local authorities.

xxxii. Frequently politicians take decisions that are contradictory to the recommendations oftechnical and financial studies, for reasons not related to the objective of benefiting the public,thereby jeopardizing the achievement of the goal of providing water and sewerage services to apopulation that does not receive these crucial services.

xxiii. High turnover of task managers does not foster sound supervision, does not supportimplementation efforts and should be avoided.

xxxiv. The project objectives were too ambitious and the project design was too complicated.It is preferable to design and implement simapler projects.


BOLIVIA


Credit 2187-BO

PART Ik PROJECT IMPL;EMENTATION ASSESSMENT

A. STATEMENT OF OBJECTIVES

The main objectives of the project were to:

(a) Improve and expand water amd sanitation services in the major cities of Bolivia(La Paz, Santa Cruz and Cochabamba), mainly by: (i) rehabilitating waterproduction facilities and increasing water distribution capacity in La Paz tobenefit a population of about 200,000 (13% of the metropolitan population in1995); (ii) constructing sewerage systems in the municipality of El Alto, tobenefit a population of about 200,000 (13% of the metropolitan population in1995); (iii) installing water production and distribution facilities in areas currentlynot served in Santa Cruz, to benefit a population of about 300,000 (35% of thepopulation of Santa Cruz in 1995) and expanding sewerage systems to benefit apopulation of about 30,000; and (iv) rehabilitating and expanding waterproduction, transmission and distribution facilities in Cochabamba, to benefit atotal population of about 300,000 (50% of the population of Cochabamba in1995) with access to piped water and eliminating/reducing rationing;

(b) Improve the operational efficiency and management systems of the water utilitiesresponsible for services in the above cities;

(c) Introduce a framework of sector policies and the institutional arrangements toaccelerate the development of the water supply and sanitation sectorcountrywide;

(d) Improve the institutional capabilities of central agencies for overseeing the watersector, mainly through the introduction of management systems; and

(e) Inprove coordination between the Bolivian authorities and donors in preparingand financing sector-wide projects.

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2. The project components were:

Part A: SAMAPA

1. Improvement and expansion of SAMAPA' s water supply systems including:

(a) Expansion of the Pampahasi water treatment plant to increase its capacity from 400 litersper second to 700 liters per second;

(b) Construction of a storage tank,

(c) Construction of a water transmission line from the Pampahasi water treatment plant tothe localities of Calacoto, Chasquipampa and Caiconi in southern La Paz; and

(d) Construction of water distribution infrastructure in an area of about 240 hectares.

2. Institutional strengthening of SAMAPA, including:

(a) Preparation of the final designs for the transmission lines and distribution infrastructurereferred to in paragraphs (b) and (c) above respectively;

(b) Advisory services to SAMAPA to strengthen its management systems, and training forSAMAPA staff in management, operation and maintenance, and commercial and financialadministration; and

(c) Acquisition and utilization of equipment and computer systems for improving itsoperational, commercial and financial management.

3. Rehabilitation of the El Alto sewerage system, including:

(a) Construction of sewerage systems, including connections, covering an area of about 300hectares in the municipality of El Alto; and

(b) Construction of a sewage treatment plant in El Alto.

Part B: SAGUAPAC

1. Expansion of SAGUAPAC's water and sewerage systems, including:

(a) Expansion of the water system in the northern part of the city of Santa Cruz de la Sierra,including drilling and equipment of two deep wells, construction of a storage tank andpumping station and installation of distribution infrastructure;

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(b) Expansion of the water system in the southern part of the city of Santa Cruz de la Sierra,including drilling and equipment of two deep wells, construction of a storage tank andpumping station and installation of distribution infrastructure;

(c) Expansion of the water system in the eastern part of the city of Santa Cruz de la Sierra,including drilling and equipment of one deep well, construction of a storage tank andpumping station and installation of distribution infrastructure;

(d) Rehabilitation of production and distribution facilities (including replacement of aboutone hundred kilometers of pipe);

(e) Rehabilitation of a sedimentation pond; and

(f) Construction of a sewerage system for about one hundred hectares under low-costtechnology.

2. Institutional strengthening of SAGUAPAC, including:

(a) Preparation of final designs under Part B. 1 of the project;

(b) Consulting services for SAGUAPAC to improve its management systems, and training ofSAGUAPAC's staff in management, operation and maintenance, and commercial andfinancial administration;

(c) Acquisition and utilization of equipment, including computer systems, for improving itsoperational, commercial and financial management; and

(d) Construction of an office building.

Part C: SEMAPA

1. Rehabilitation and expansion of SEMAPA's water supply system, including:

(a) Rehabilitation of the Wara Wara reservoir including construction of transmission mainand storage tank and installation of filters to increase water flow about 100 liters persecond;

(b) Rehabilitation of the Vinto well field including installation of a transmission main andconstruction of a treatment plant to increase water production capacity by about 100liters per second;

(c) Rehabilitation of the Chungara water systems, including construction of a transmissionmain and storage tank and installation of filters to achieve water production capacity ofabout 60 liters per second;

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(d) Rehabilitation of the Cala Cala water treatment plant to increase its capacity to about 400liters per second;

(e) Rehabilitation of the Coila Cofna pumping station;

(f) Expansion of distribution infrastructure throughout Cochabamba including theconstruction of two storage tanks and the installation of distribution systems, waterconnections and meters; and

(g) Construction and equipment of four deep wells and construction of 13 kilometers oftransmission main for a production capacity of about 200 liters per second.

2. Institutional strengthening of SEMAPA, including:

(a) Preparation of: (i) final designs for investments under Part C. 1 of the project; and (ii) awater supply master plan;

(b) Advisory services for SEMAPA to strengthen its management systems, and training forSEMAPA's staff in management, operation and maintenance, and commercial andfinancial administration; and

(c) Acquisition and utilization of equipment, including computer systems, for improving itsoperational, commercial and financial management.

Part D: Institutional development of the borrower's water supply and sanitation sector

1. Provision of technical assistance to prepare the following:

(a) Guidelines for the analysis of water supply and sanitation projects to be applied by MPC;

(b) A framework of tariff policies and a system of indicators for MUA to monitor theperformance of agencies operating in the urban subsector; and

(c) Operating manuals and models for institutional, technical, financial and economic analysisfor FNDR.

2. Acquisition and utilization of data processing equipment for MPC and MUA.

3. Training for the staff of FNDR, MPC and MUA and other agencies in urban and ruralareas operating in the borrower's water sector but not carrying out investments under thisproject, in management, operation and maintenance, and commercial and financialadministration.

4. Preparation of a study to define a framework for the sector's operations, including theidentification of potential investment priorities in the urban subsector.

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B. ACHI;EVEMENT OF OBJECTIVES

3. Project preparation. The project was placed on IDA's agenda in May 1983 when anIDA mission discussed sector requirements with the Bolivian Government. In that month, theGovernment requested a PPF advance to prepare a project for nine departmental capitals, whichwas authorized in August of the sarme yeaer under PPF-444-BO. The first identification missionin May 1987 proposed that the project be managed through COTEAS as the financialintermediary and ANESAPA as the technical coordinating unit, but it was found that both weretoo weak to undertake the functions considered for them. In October 1987 the project wasreduced to three cities (La Paz, Cochabamba and Santa Cruz) because of the high cost of theinitial project and the lack of capacity to imanage a large operation. It was decided that each citywould manage its own project and that a component would be included to prepare a subsequentproject for other departmental capitals. This did not materialize. In November 1987, themanager of SEMAPA was appointed as the Government representative and coordinator of thePPF. The estimated total cost of the project was US$35 million equivalent, and the financingplan was: (i) IDA participation - US$15 million; (ii) cofinancing from unidentified sources -US$12 million; and (iii) internal cash generation of the beneficiary companies - US$8 million.

4. It was decided that a consulting firm would prepare the studies and designs for the threecities, to be completed by October 31, 1988. The project was to be appraised in November1988 and presented to the Board in March 1990. Tenders for selection of the consulting firmwere issued twice. No contract was awarded under the first competition since the Bolivianauthorities and the company that was placed first could not reach an agreement. In October1988, IDA gave its no-objection to the second consulting contract which became effective inJanuary 1989, when the president of Bolivia signed a supreme decree approving it. The finalreport by the consulting firm was received in April 1990. The implementation, investment andfinancial plans for the three cities prepared by the firm were sent to IDA in July 1989.

5. In March 1989, FNDR was identified as the central agency which would assume the roleof preparing viable water and sewerage projects, particularly for large and medium-sized cities.It was agreed to include in the project a component for that purpose, denominated the nationalcomponent, and in October 1989, the Deputy Minister for Public Investments and IntemationalCooperation made FNDR responsible for channeling and administering the program's financialresources and for acting as the financial intermediary for investment projects in the sector.

6. The appraisal mission of October 1989 established the conditions for negotiating thecredit and for declaring it effective, which were:

* implementation of an increase in the tariffs charged by SAMAPA and SEMAPA,which took place in April 1990 when the companies raised tariffs by 29% and25% respectively.

* Renegotiation of SAMAPA's debt with the KfW, which was done in September1990 under the Ministry of Finance Resolutions 1198 and 1199, according towhich SAMAPA would pay the debt using its income from water services.

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* Issue of an official opinion from the Bolivian Attorney General stating thatCONATA is the sole authority with competence to set water and sewerage tariffs.This condition was complied with on April 2, 1990.

* Preparation of an operations manual by FNDR, which was completed in April1990.

* Establishment of a financial policy for the sector by the Government. A seminaron this topic, in which a IDA officer took part, was carried out from April 5 to 7,1990. In the second round of negotiations the document on financial policies wasdiscussed and IDA approved it. It was published as Supreme Decree 22627 onNovember 1, 1991.

7. The conditions for declaring the credit effective were: (i) approval of the financial policyframework for the sector; (ii) approval of the loan of KfW; and (iii) signing of subsidiaryagreements between the Government and FNDR and between FNDR and the borrowingcompanies.

8. In March 1990, IDA prepared the SAR, the MOP and the Credit Agreements. The firstround of negotiations was held in April 1990. IDA proposed to increase the loan to US$3 5million. It suggested that the credit be reformulated and included the additional condition thatBolivia would not continue with the Misicuni project in Cochabamba and would demonstrate toIDA's satisfaction that the project would be removed from the public investment program. Thecondition was complied with in September 1990 through a note from the Minister of Planningand Coordination.

9. Internally, IDA discussed its concern that only three cities (instead of the original nine)would be assisted and it was clarified that: (i) the IDB was preparing a project for secondarycities; (ii) the credit would include a component for the preparation of a new project; and (iii) theUNDP was preparing a project to assist rural areas with low-cost technology (none of theseplans materialized during the project implementation period).

10. In August 1990, IDA updated the SAR and Bolivia complied with the negotiatingconditions. The final negotiations were held in September 1990. IDA credit 2187-BO for theamount of SDR 25 million, equivalent to US$35 million, was approved on January 2, 1990(three years after the date initially planned) and the Credit Agreement was signed on December17, 1990. In June 1991, the Bolivian congress approved the credit, which became effective onSeptember 17, 1991 (10 months after it was signed).

11. PART A: SAMAPA, La Paz. The water supply project partially financed by IDA wasintended to expand the Pampahasi system by increasing the capacity of the existing plant from400 llsec to 700 I/sec, constructing a 11,550 meter high-pressure water transmission main, withdiameters varying from 12" to 30", and distribution systems covering an area of 240 hectares.KfW also participated in the water project, financing the replacement of equipment and spare

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parts for the three water treatment plants (El Alto, Achachicala, and Pampahasi). Expansion ofthe plant and the water main were fully completed, the constructed distribution systems serve anarea of only 125 ha, and the equipment and parts for the treatment plants were being procuredwhen the credit was closed.

12. The implementation of works lasteid two years and three months longer than planned (theSAR projected completion in September 1995 but it was not completed until December 31,1997) due to delays in preparing the detailed designs, difficulties in preparing the bidding andcontract documents, very slow contract negotiation procedures, slow decision making, confusionin the technical specifications for the high pressure materials, bureaucracy and politicalintervention in SAMAPA, and weakness of the equipment and materials suppliers (inability tomake suitable offers and to comply with thLe contracts) which made it necessary to re-bid part ofthe supply of equipment. On the original closing date (June 30, 1996), SAMAPA had barelybegun the implementation of works (it had only constructed minor works, principally a storagetank), which were only completed after two extensions for a period totaling six months.

13. Aguas de Illimani S.A, the concessionaire of the water and sewerage services in La Paz,took over the responsibility for the services in August 1997, and with assistance of an externalconsultant speeded up the execution of works by renegotiating contracts and schedules withsuppliers, resolving problems in the field, amd reducing the time taken to pay its bills.Consequently, it was possible to complete the works satisfactorily in March 1998.

14. The sewerage project financed by the KfW was intended to expand the system in thecity of El Alto, serving an area of 300 ha with 5,000 connections by the end of the project. Itincluded construction of trunk and secondary sewers and a treatment plant (stabilization ponds)to cover demand up to the year 2007, construction of an office building for El Alto,rehabilitation of existing workshops in the city, and purchase of equipment to operate andmaintain the sewerage system. As of the closing date of IDA credit (December 31, 1997), KfWwas expecting that its component would be completed in the second half of 1998 (see Annex 3).

15. Institutional strengthening program. The traditional institutional strengtheningprogram for SAMAPA, which was the original strategy adopted, achieved only modest results.SAMAPA's operational area improved but not its organizational structure, nor its financial orcommercial management. The President of Bolivia decided to privatize the company and IDAmade the extension of the closing date conditional on the privatization of SAMAPA. Theprivatization process was successfully completed as the water and sewerage services in La Pazwere transferred in August 1997 to the responsibility of a private operator under a 30-yearconcession. A supervision mission which visited the company in November 1997, four monthsafter the transfer of responsibility to the private sector, observed many changes in administrativeorganization, improved efficiency, better client service and, in particular, significantimprovements in the implementation of works. Privatization of water and sewerage services inLa Paz is an impressive achievement which permitted attaining SAMAPA's institutionaldevelopment objectives.

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16. The institutional strengthening activities for SAMAPA are presented in Table 1, whichalso provides information on the works carried out.

17. Part A-1 (a). Expansion of the Pampahasi treatment plant. This work was fuilycompleted. The project was prepared by the consultants who made the initial projectidentification for the three cities between October 1989 and October 1990. The works weretendered, the construction contract was signed on February 1994 and construction lasted fromApril 1994 to July 1995. Sand for the filters was contracted separately between January andMay 1995 and was laid between May and September 1995. The work was accepted in July1995, with a delay of 4.5 years in relation to the SAR estimate.

18. Part A-1 (b). Construction of a storage tank. A 2,500 rn3 storage tank for thePampahasi plant was constructed. The project was prepared by SAMAPA, and the work wastendered between October 1992 and March 1993 and built between April 1993 and March 1994.It was accepted in March 1994, with a delay of two years in relation to the SAR estimate.

19. Part A-1 (c). Transmission main from Pampahasi to Ovejuyo. The project wasprepared by a foreign consulting firm between March 1991 and February 1992, using Germanindustrial specifications (DIN). The materials (pipes) and construction were tendered separately.

20. The pipes for the Pampahasi-Ovejuyo main were put to tender twice. In March 1993,SAMAPA requested IDA's no-objection to the bidding documents. IDA did not issue the no-objection, requesting that the documents be made to conform to its procurement requirements.The documents were adjusted and IDA gave its no-objection in September 1993, seven monthsafter the process had begun. The first bidding process was carried out between November 1993and March 1994 and was declared void with IDA's no-objection since just one offer wasreceived. The second bidding process took place between April 1994 and June 1995, and IDAgave its no-objection to the award in August 1994. On that date SAMAPA sought clarificationsfrom the procurement agency that was in charge of processing the bidding processes andrequested IDA to declare the process void because it lacked confidence in the capacity of thesupplier who had made the lowest responsive offer to comply with the contract, and wanted toinitiate a third bidding process. After a mission in November 1994, IDA answered that therewas no ground for declaring the process void and indicated that unless the contract wereawarded under its no-objection of August 1994, it would not be able to finance this projectcomponent. SAMAPA negotiated the contract, forwarded the record of negotiation to IDA, andreceived the final no-objection in May 1995. The contract was signed in June 1995, with adelivery period of 270 calendar days, to be supplied in several lots. This long period from awardto contract signing (April 1994 to June 1995) was a result of preparation of reports by theprocurement agency and lengthy intemal discussions by SAMAPA's board of directors (politicalintervention). The contract had to become effective once confirmation was received that a letterof credit in favor of the supplier had been opened. At that stage two problems that delayedeffectiveness came up. The first was that the winning bidder took three months to present

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Table 1: Works and Institutional Strengthening in La Paz(SAMAPA Component)

Description Expected Implementation Implementation Percentage of Executionas defined in the Credit Achieved as of Dec. 31, (%)

A2reement 19971. Improvement and expansion of the water system Ia. Expansion of the Pampahasi An additional 300 V/sec 300 V/sec 100%treatment plant (expansion from 400 1/sec to

700 I/sec).b. Construction of a storage tank 2500m3 2500m3 100%. Conveyance system from 2,583.90m of 30" 2,280.90 of 30" 100%100%

Pampahasi to the southern part of 4,509.90m of 24" 4,509.90m of 24" 100%the city (Calacoto, Chasquipampa, 651.50m of 20" 651.50m of 20" 100%Ovejuyo and Caiconi) 62.90m of 16" 62.90m of 16" 100%

3,744.20m of 12" 3,744.20m of 12" 100%11,549.90m =- Total 11,549.90m = Total 0%Branch to Caiconi Not constructed

d Distribution 240 ha 1 125 ha 52%2 Institutional strengtheninga Preparation of final designs for Complete the studies Studies completed 100%orks (b) and (c) above l

b Advisory services for Perform the consulting Consulting services 100%engthening management systems services providedd training in management, O&M,d commercial and financial

administrationc Purchase of equipment and Complete purchase Equipment not procured 0%mputers to improve financial,

perational, and commercialmanagement ______________________

3 Rehabilitation of the El Alto sewerage system a Construction of systems covering 300 ha 250 ha 83%00 ha, including residentialconnections 8,455 connections Under constructionConstruction of a treatment plant Complete the construction Under construction 50%Construction of an office building Complete the construction Construction completed 100%El Alto and rehabilitation oforkshops (Rumpel complex)Purchase of vehicles, equipment, Complete purchase Purchase completed 100%d tools for operation and

tenance of the El Alto seweragesystem _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

e Purchase of spare parts for Complete purchase Procurements under wa 50%xisting waterworks I_

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the performance bond that SAMAPA required before opening the letter of credit. When thebond was presented, the letter of credit was opened through a Bolivian bank that went bankrupt,and it was necessary to make new arrangements with another bank. The second problem wasthat the specifications given in the bidding documents were German industrial standards (DIN), afact that led to controversy regarding their equivalence with the United States' standards used bythe winning bidder. On IDA's recommendation, a consulting firm was hired from March to July1995 to determine whether the equivalence of the American standard was correct. The firmsubmitted in July 1995 a report regarding the pipes and in August 1995 a report regarding thevalves, confirming the equivalence of standards. The contract then became effective onDecember 20, 1995 (for a period ending on September 17, 1996) and the materials weresupplied in partial deliveries between April and September 1996. The last materials weredelivered in August 1997 after the concessionaire, Aguas de Illimani S.A., settled some pendingproblems with the supplier. Twenty-nine months elapsed between the call for bids and the timethe contract was signed.

21. The bidding process for installation of the water main Pampahasi - Ovejuyo took placebetween August and November 1995. IDA's no-objection to the contract was delayed until June1996 since it was impossible to complete the work before closing date, and an extension of theCredit Agreement (which expired on June 30, 1996) had to be negotiated before issuing the no-objection. The contract was signed in July 1996 with an implementation period of 270 calendardays. Another delay was caused by the need to redesign part of the layout. SAMAPA providedthe topographical information and the consulting firm hired to supervise the work produced thenew design between August 1996 and March 1997. In response to an inquiry by IDA, thesupervising firm issued an opinion that the steel sections of the pipe did not require cathodicprotection or anchors,. The work was completed in March 1998, with a delay of over four yearsin relation to the SAR estimate, and officially inaugurated in April 1998.

22. Part A-1 (d). Distribution. The design of the distribution system was prepared by thesame consultants who made the initial project identification for the three cities between October1989 and October 1990. The areas to be covered were redefined by SAMAPA between Apriland September 1997 since, because of the delays in project implementation, pipes had alreadybeen laid in the areas originally proposed, using other financing sources.

23. Two calls for bids were made for supply of pipes for the distribution networks. The firstcompetition, between August and December 1995, was declared void with IDA's no-objection,since two bids were received - one with legal problems and the other of very high prices. Thesecond bidding process took place between July 1996 and January 1997. As a result of theprocess three contracts were signed for the supply of: (i) ductile cast iron pipes and valves: (ii)PVC pipes and accessories; and (iii) pressure reducing valves. Deliveries were made betweenAugust and September 1997. A fourth contract for the supply of drainage chambers which hadbeen signed in March 1997 was not properly handled by SAMAPA, which was late in providingthe plans for manufacturing the chambers and allowed the performance bond to expire. Thecontract was reactivated by Aguas de Illimani S.A_ in August 1997 and the materials weredelivered in October 1997.

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24. The contract for installation of the distribution networks was tendered betweenSeptember 1996 and March 1997. The contract was signed in March 1997, and the order toproceed was only issued in August 1997 because the materials have not been delivered earlier.In that month, Aguas del Illimani negotiated a new implementation schedule with the contractor,to complete works by December 1997, four years behind the SAR estimated schedule.

25. Part A-2 (a). Preparation of the designs for Part A-1. These designs were preparedas originally planned, at the times indicated previously.

26. Part A-2 (b). Strengthening of SAMAPA's management systems and training inmanagement, operation and maintenanice, and commercial and financial administration.SAMAPA decided, with IDA's no-objection, to hire a consulting firm to develop and implementthe strengthening program, which consisted of defining an organizational and functionalstructure for the company (manual of functions, organization chart, internal regulations, staffingplan and general administrative procedures) and designing and implementing a cost accountingsystem and a program to reduce UFW. T]he bidding process began in February 1991 with arequest for IDA's no-objection but IDA returned the documents since they did not conform tostandards. It took 11 months to correct the documents and IDA finally gave its no-objection inDecember 1991. The bidding process lasted from February to August 1992 and the consultingservices were carried out from August 1992 to July 1993. By closing date, differences betweenSAMAPA and the consulting firm regarding the work in the administrative and financial areashad not been resolved. In a report dated February 1994, SAMAPA indicated that the manuals offunctions had not been provided. The proposed organizational structure was very similar to theexisting structure and was therefore of limrited benefit. The internal regulations were producedwith direct participation by company employees. The staffing table was not prepared. Todevelop general administrative procedures the company signed an additional contract with one ofthe firms that participated in the initial consortium, but the procedures designed were based onthe systems previously used and were not attuned to current legal requirements. Overall, thework produced in this area was unsatisfactory and of little use to SAMAPA. Furthermore, sincethe company was privatized on August 19,97, the institutional strengthening procedures designedunder the contract became practically useless, as the operator introduced its own procedures.The February 1994 report notes that the work of the consultants on UFW was satisfactory.They designed procedures for operational control, leakage control, and digitization of the watersystem. In March 1995 FNDR used credit proceeds to hire a consultant to advise and providetraining to the three companies on implementing programs of operations and maintenance.SAMAPA prepared a detailed action plan for operational control, bulk metering, domesticmetering, leakage control, and commercial control, which was annexed to the Aide Memoire ofthe November 1995 supervision mission and was carried out. From August to December 1995consulting services were hired to develop and implement a bulk metering program, which wascompleted satisfactorily in December 1997.

27. Part A-2 (b). Procurement of computer equipment. A PC was purchased for theleakage control unit as was originally planned.

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28. Part A-3 (a) and (c). Rehabilitation of the sewerage system in El Alto. Thiscomponent was financed under contract 9065319 for financial support and projectimplementation signed on June 20, 1991, by the Government of Bolivia and the KfW (a GermanGovernment grant), with a local contribution from SEMAPA. According to the informationprovided in the note from KfW (see Annex 3), works will be completed in the second half of1998. The project is three years behind the schedule established in the contract because ofdelays in: (i) signing the consulting services contract; (ii) the bidding process; and (iii) obtainingland for the Puchucollo treatment plant (stabilization ponds).

29. On August 1, 1997, the company Aguas del Illimani S.A. took over the responsibility forthe water and sewerage services for La Paz under a 30-year concession. During the supervisionmission of November 26 to December 5, 1997 many changes and improvements were observedin the company with respect to: (i) administrative organization; (ii) better customer service; and(iii) in particular, improved implementation of the project works. It appears that efficiency hasalso improved. The provision of water and sewerage services by the private sector under aconcession contract is an impressive achievement in Latin America, which will ensure thesustainability of the services for the next 30 years. As a result of this reform the institutionaldevelopment objectives of the La Paz component has been achieved.

30. At closing date, the works of the La Paz component were 94% completed, 97% of thecredit had been disbursed, and the remainder had been fully committed. The works werecompleted March 1998, and inaugurated on April 1998.

31. After completion of works, water coverage in La Paz reached 88% and seweragecoverage 55% (compared to the SAR estimates of 81% and 66% respectively). The target forwater was surpassed but the sewerage component, financed and supervised by the KfW, fellshort of the expected target.

32. The indicators achieved by December 1996 (audited values) were: working ratio of 0.43which coincides with the SAR's estimate for the end of the project; collection efficiency hasimproved to the excellent value of 110.6% (higher than 100% owing to collection of old debts);the number of employees per 1,000 water connections fell from 5.56 in 1994 to 4.43, which ismuch better than estimated in the SAR (7.86 by the end of the project); and the percentage ofpersonnel costs in relation to operating costs reached a high value of 65.5%. The UFW indexwas 25.65%, which is close to the SAR's target for the end of the project. These indicatorsmaintained similar values in July 1997, except for UFW, which increased to 32.73%. It isexpected that the company's performance will improve under private management and that theinvestments needed to expand the water and sewerage systems will be forthcoming. Because ofthe switchover to private management, it is difficult to present data for the second half of 1997.

33. In summary, the achievements in the La Paz component are: (i) completion of all theproject works, benefiting some 97,000 people (35,000 directly with new connections and 62,000indirectly by eliminating rationing); the water connection to the southern zone of La Paz throughthe Pampahasi-Ovejuyo pipeline will enable to provide water to additional 191,800 inhabitants infuture (with new production works) for a total of 289,000; and (ii) the concession represents a

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major reform in management of the water and sanitation sector in the city. The La Pazcomponent has been concluded satisfactorily, mainly due to the implementation of the reformand to the improved performance of the concessionaire which was able to complete the workswithin the term of the Credit Agreement. The completion of works would have been impossibleunder SAMAPA's previous management whose performance has been very weak during theseven years of project implementation.

34. PART B. SAGUAPAC, Santa Cruz. The water project, partially financed by IDA,was intended to expand three of the city's four water supply systems (north, southwest, andnortheast) by drilling production wells, building storage tanks and pumping stations, andinstalling distribution networks in each zone. These works were fully completed within theschedule agreed upon in the SAR.

35. The sewerage project, partially financed by IDA, was intended to expand the collectionsystem over 100 ha and rehabilitate existing stabilization ponds. With IDA approval, 25% ofadditional works were constructed, using funds saved due to SAGUAPAC's efficiency inimplementing the original program and by achieving lower construction costs. The additionalworks included sewerage networks and expansion of the stabilization ponds.

36. The institutional strengthening project was fully and successfully implemented andattained the objectives of improving management, operation and maintenance and commercialand financial administration, purchasing equipment for the commercial, operations andmaintenance areas, and constructing a newv office building. The works were identified in 1989 bythe consulting firm that prepared the initial project for the three cities, based on the 1982 citydevelopment master plan. The works and institutional strengthening activities included in theSAGUAPAC component are presented in Table 2.

37. Part B-1 (a), (b), (c) and (d). Expansion of the north, southwest, and northeastsystems. The works of these systems were fully constructed and eleven wells (six more than thefive originally planned) were drilled.

38. For the northern system, materials:, equipment and instruments were procured betweenJanuary 1993 and December 1996, and the following have been constructed: three wells(numbers 20, 24, and 25) with a test production of 200 Vs, a 5,000 rn3 storage tank, and apumping station with a capacity of 570 I/s, equipped with four pumps (one as backup), a IDA oftransformers, control panels, chlorination systems and alarms systems. The installation wereinaugurated in April 1997 and are operating satisfactorily.

39. For the southwestern system, materials, equipment, and instruments were procuredbetween January 1993 and March 1997 and the following have been constructed: seven wells(numbers 17, 17A, 22, 23, 27, NP1 and NP2) which were completed in March 1997 with testproduction of 488 Us, a 6,000 m3 storage tank and a pumping station with a capacity of 420 Us,equipped with four pumps (one as backup), a bank of transformers, control panels, chlorinationsystems, and alarm systems. The installations were inaugurated in June 1996 and are operatingsatisfactorily.

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Table 2: Works and Institutional Strengthening in Santa Cruz(SAGUAPAC component)

Description Expected Implementation as Implementation Percentage ofdefined in the Credit Achieved as of Execution

Agreement December 31, 19971. Rehabilitation and expansion of the water and sewerage systems .a. Expansion of the water system in the 2 deep wells 3 deep wells 150%northern part of Santa Cruz, including 1 storage tank of 4,000m3 1 storage tank, 5,000 m3 125%drilling and equipping two deep wells, 1 pumping station for 500 Ils 1 pumping station for 100%construction of a storage tank and a 570 Ilspumping station, and distribution networks 100 km of network and (see section c below) 100%

connections _b. Expansion of the water system in the 2 deep wells 7 deep wells 350%southwestern part of Santa Cruz, including 1 storage tank of 4,000m3 1 storage tank 6,000 m3 150%drilling and equipping two deep wells, 1 pumping station for 500 I/s 1 pumping station for 100%construction of a storage tank and a 420 Vlspumping station, and distribution networks 100 km of network and (see section c below) 100%

connectionsc. Expansion of the water system in the 1 deep well 1 deep well 100%northeastern part of Santa Cruz, including 1 storage tank of 4,000m3 1 storage tank 8,000 m3 200%drilling and equipping one deep well, 50 km of networks and 365,950 meters of 100%construction of a storage tank, and connections network purchaseddistribution infiastructure 247,228 meters of 100%

network installed with18,921 connections

d. Rehabilitation of production and 6 Wells 6 wells rehabilitated 10lodistribution systems including replacementof some 100 km of network 100 km of networks Networks installed (see 100%

section c above)e. Rehabilitation of stabilization ponds Complete the rehabilitation Rehabilitation completed 100%f. Expansion of stabilization ponds by 13.4 Not included in the original Ponds expanded by 13.4 100%ha program hag. Construction of sewerage systems to Construct networks for 100 ha Networks for 142 ha 142%serve 100 ha with low-cost technology constructed (64,946

meters of network with5,665 connections)

2. Institutional strengtheninga. Preparation of final designs for the Complete the designs Designs completed 100%investments in part B-1b. Consulting services to improve Complete the consulting Services completed 100%management systems and training in servicesmanagement, O&, commercial andadministrative areasc. Purchase and use of equipment Complete the purchase Purchase completed 100%including computer systems to improveoperating, commercial, and financialsysteMS d. Construction of an office building Complete the construction Construction completed 100%

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40. For the northeastern system, materials, equipment, and instruments were procuredbetween January 1993 and March 1995 and the following have been constructed: one well(number 21) with test production of 90 Vs, a 8,000 m3 storage tank and a pumping station with acapacity of 480 Vs, equipped with four pumps (one as backup), a bank of transformers, controlpanels, chlorination systems, and alarm systems.

41. Between January 1991 and June 1997, 365,950 meters of main and secondary pipe andmaterials for 41,800 connections were procured. A total of 247,228 m of pipe were installed,with 30,388 m in the principal network and 216,840 m in the secondary network. In addition,18,921 residential connections were instadled to benefit a population of about 272,000inhabitants.

42. Six wells (numbers 1, 6, 10, 11, 13, and 23) were rehabilitated between May 1993 andJune 1994. In addition, 44,795 domestic meters and 5,247 repair kits were purchased at thesame period.

43. Part B-1 (e) and (f). Rehabilita,tion of the northern stabilization ponds andconstruction of sewerage network to serve 100 ha with low-cost technology. BetweenNovember 1989 and March 1990 the four old ponds in the northern treatment plant wererehabilitated (cleaned) and between November 1995 and October 1997 new ponds covering 13.4ha were constructed. The expansion was not included in the original work program and wasfinanced with savings in the construction of the original program. Between September 1990 andJune 1994, 28,220 meters of sewers were installed with 2,480 connections, covering an area ofabout 42 ha. Between November 1995 and October 1997, credit proceeds were used to install36,729 meters of sewers with 3,185 connections over an area of 142 ha, benefiting 46,736inhabitants. Retroactive financing was used to build sewers for Neighborhood Unit 28 usingconventional technology. Between Nove:mber 1992 and June 1993, equipment was replaced andsewage pumping station E-1 at the entrance to the new ponds was rehabilitated.

44. Part B-2 (a) and (b). Institutional strengthening. The final designs of the worksincluded in part A were prepared by the company using its own resources. Bids were invitedbetween March 1991 and September 1993 for a consulting firm to carry out the component toimprove management systems and provide training in management, operation and maintenance,and commercial and financial administration. The process was declared void with IDA'sno-objection because of the high cost of the proposals. In December 1993 SAGUAPAC decidedto contract some smaller scale studies with credit funds and the following studies were carriedout between April 1994 and June 1997:

* Recovery of investment through accumulated contributions by the cooperative'smembers.

* Economic and financial diagnostic study which compared the cooperative to theSANEPAR company in Curitiba, Brazil. The study showed that SAGUAPAC isclose to achieving the Brazilian company's indicators.

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* Manual of functions and procedures, the preparation of which was completed.

* Groundwater management to determine the capacity of the aquifer that supplies thecity and the risk of its contamination. The actions recommended in this study havebeen included in the company's plan of operations.

* Control of leaks, which used a methodology for continuous analysis of the level ofleaks and their economic impact. Some of the recommendations of this study havebeen included in the company's plan of operations.

* Methodology for managing corrective and preventive maintenance of water andsewerage systems, including the use of the MAPRE software developed byCEPIS/OPS, which is being implemented in the company.

* Environmental audit of the water and sewerage systems.

45. Part B-2 (c). Procurement and use of equipment including computers to improveoperating, commercial and financial systems. From January to March 1991, SAGUAPACcaled for bids to supply a main frame computer, which was subsequently declared void withIDA's no-objection. After a second call, a contract was awarded in October 1992.SAGUAPAC procured equipment to strengthen its operations area between January 1992 andFebruary 1994, including a portable tow excavator, bulk meters, pumps, motors and sparecontrol panels, a truck-mounted crane and accessories, cleaning equipment for sewerage, leakdetector, metal detector, and video equipment for pipes.

46. Part B-2 (d). Construction of an office building. The construction of the buildingwas completed and the building was furnished between April 1995 and September 1997.

47. SAGUAPAC's performance was very satisfactory during the entire projectimplementation period. At closing date (December 31, 1997), all the original work program hadbeen completed as well as all the additional works constructed with the savings in theimplementation of the original program, for an increase of 25% over the SAR estimates.

48. At closing date water coverage reached 80% and sewerage coverage 34%. These valuesare close to the targets (78.5% for water and 39% for sewerage). The indicators for 1996(audited values) were: an UWF index of 24%, which is better than the SAR's target of 25%;the number of ernployees per 1,000 water connections fell from 8.5 at the start of the project to4.26, which is better than the target of 6.06 in the SAR; the working ratio was 0.76, a valuewhich was not yet up to the target of 0.64 but which improved steadily over previous years. Thepercentage of personnel costs in relation to operating costs was 59.78%; it also improvedsteadily during the project implementation period. Collection efficiency was high at 96%. The

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indicators had improved by September 1]997, with UFW at 23%, the number of employees per1,000 connections at 4.04, and the working ratio at 0.72.

49. In summary, 125% of the original works were constructed in the framework of the SantaCruz component. These works will benefit a population of 225,687 inhabitant with waterservices and 46,736 with sewerage services. All the goals of the institutional developmentprogram were achieved, and the project was concluded very satisfactorily. Nevertheless, the lowcoverage of sewerage causes public health problems, environmental pollution, and pollution ofthe aquifer which is the only water source of the city. The sustainability of the project willdepend on the access of the company to credits for investment to expand the sewerage system.

50. PART C. SEMAPA, Cochabamba. The water project partially financed by IDA wasoriginally intended to: (i) increase production by an additional 630 Vs; (ii) rehabilitate and expandthe Wara Wara system (reservoir, transmission main and treatment plant); (iii) develop the Vintosystem (a new system with four deep wells, transmission main and treatment plant); (iv)rehabilitate the Chungara system (improvements to the existing gallery); (v) expand the CalaCala system (expansion of the water treatment plant from 300 Vs to 400 Us); (vi) rehabilitate theCoila Cofia storage tank and pumping system; and (vii)expand the distribution systems includingconstruction of two storage tanks (Cala Cala and La Coronilla). The Wara Wara project wascompleted in full. The Vinto expansion was not implemented because: (i) of active physicalopposition by farmers to drilling new deep wells; and (ii) the credit amount was not sufficient tocover the cost of all the project works. The Chungara gallery was not rehabilitated because ofits low production which made the workc economically unfeasible. The Cala Cala treatment plantwas expanded as planned. As a result of the works implemented the water flow increased onlyby 220 Us (100 at Wara Wara, 100 at Cala Cala, and 20 by replacing equipment at the Vintowells), while in the SAR the estimate was an increase of 630 Us. The Cofia Cofia system wasrehabilitated and the pipes and tanks were constructed as planned. Overall, only 77% of theworks defined in the Credit Agreement were implemented. Consequently the expected benefitswere not achieved and the water shortage in the city is more severe than anticipated. In spite ofhaving implemented less works than programmed, all the funds allocated to the SEMAPAcomponent were used, resulting in cost overrun of about 25%. As of the original closing date(June 30, 1996), SEMAPA had barely started implementing works (only minor works of theWara Wara system were initiated prior to the original closing date). Works have only beencompleted after two extensions totaling 18 months. The works and institutional strengtheningactivities of the SEMAPA component are presented in Table 3.

51. The institutional strengthenin;g component. In the framework of this component,PROFISE (the institutional strengthening program) was designed and implemented, except forthe system leak detection and control. The activities under PROFISE aimed at improvingoperations, maintenance, commercial management, domestic metering and financialadministration were carried out. Water meters, computers, vehicles and equipment werepurchased. In spite of carrying out the ]PROFISE activities, the program has not achieved theexpected results and the company's performance did not improve. Moreover, after the change ofGovernment in August 1997, most of the managers and senior administrative staff of SEMAPAwere replaced. The consequences of this political intervention were: (i) loss of most of the

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training efforts undertaken under the project; (ii) loss of continuity in management; and (iii)further weakening of the company. During implementation IDA noted that the institutionalstrengthening program was not achieving the expected results and concluded that improvementin performance could only be achieved by involving the private sector in managing the water andsewerage services. The President of Bolivia decided to privatize SEMAPA and IDA conditionedthe extension of the closing date on carrying out a privatization process during the extensionperiod. The Government supported the privatization effort it failed because: (i) the Governmentwas too late in implementing it; and (ii) the privatization concept was coupled with theconstruction of the Corani water supply project, to which the Municipality of Cochabamba isopposing.

52. Part C-1 (a). Rehabilitation of the Wara Wara system. The project was prepared bythe consultants who was involved in project identification for the three cities, between October1989 and August 1992. It was fully executed and consisted of rehabilitating the Wara Waradam, the Khomerkhocha dam, the collecting channel to Wara Wara, the conveyance system fromthe dam to Aranjuez; and construction of a treatment plant with a capacity of 100 Uls, aregulating tank, and the final conveyance system. The work was tendered between January andAugust 1992 and was implemented between August 1992 and May 1995. It was supervised bythe consultant who prepared the project design, under an extension of the contract. Thecontractor selected had difficulty in implementing the work and after the original term of 305days had only built a small part. The contract was extended by 230 days and then by another100 days. By the end of the second extension (December 1994), only 60% of the works hadbeen completed. SEMAPA opposed to terminating the contract. With IDA's no-objection andin view of the urgency of concluding the work, SEMAPA hired a subcontractor who committedto complete it in 150 days, but required an extension of 81 days. The work was finallycompleted on May 1995, four years after the date estimated in the Credit Agreement.

53. Parts C-1 (b) and (d) to (g). Vinto, Cohia Cofia, Cala Cala, distribution, and tanks.Before preparing the water supply master plan, which was financed by a grant from the FrenchGovernment, and carried out from July to October 1988, a study of remote exploration of waterresources in Cochabamba was carried out between July 1989 and May 1990. The studyindicated that groundwater was available in the Cochabamba valley and could be feasibly tapped.The results of this study served as the basis for the master plan, i.e., for justifying the proposedworks for drilling of deep wells in the Vinto and Sipe Sipe zone. The works were defined underthe master plan prepared by a consulting firm as part of the project. The firm was six monthslate in presenting the final project documents, which were submitted in February 1995. Thebidding and contract documents for the supply of goods and construction of works wereprepared by the same consulting firm, assisted by a procurement specialist hired separately bySEMAPA. The works were organized into six separate lots for supplies and construction forwhich bids were invited between July and September 1995, with contracts scheduled forsignature in January 1996. The three bids for the supply and construction of the Vmto system,drilling and equipping of the wells, transmission pipes and the treatment plant were declared voidwith IDA's no-objection in May 1996 because of the physical opposition of farmers to drillingnew deep wells in the Vinto and Sipe Sipe zone and the high cost of the works compared

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Table 3: Works and Institutional Strengthening in Cochabamba(SEMALPA component)

Description Expected Implementation Inplementation Achieved as of Percentage ofas defined in the Credit Dec. 31, 1997 Execution

Agreement (%)

l1. Improvement and expansion of the water system

a. Rehabilitation of the Wara Wara reservoir, Rehabilitate the reservoir, Rehab completed 100%including transmission pipes, storage tank, and (2.25M m3)-;filters for about 100 I/s 6.6 km of trunsmission Work completed 100%

pipes; 100%100 l/s treatment plant Work completed

b. Rehabilitation of the Vinto wells, Complete works The wells were not rehabilitated, 5%installation of transmission pipes, construction the transmission pipes were notof a treatment plant for 100 I/s installed, and the treatment plant

was not built. However,equipment was replaced at four

I _______________________________ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ -existing w ells.

c. Rehabilitation of the Chungara infiltration Complete work Not executed 0%gallery, including transmission pipes, storagetank, and filters for about 60 1/s

d. Rehabilitation of the Cala Cala treatment Complete work Work completed 100%plant, increasing its capacity from 300 i/s to 400Vs

e. Rehabilitation of the Cofla Cofna pumping Complete work Work completed 100%station including covering the storage tank andrplacement of equipment

f Expansion of the distribution system, Istall 45,832 m of system 48,497 m installed 106%installation of house connections and Install 7,582 connections 7,582 connections installed 100%construction of two storage tanks. Build two tanks with total Tanks constructed

l___________________________ storage capacity of 9,400m3

g. Construction of four deep wells wit a Complete wAorks Not executed 0%capacity of 200 l/s and 13 km transmissionpipes.

2. Institutional strengthening

a. Preparation of: (i) final designs; (ii) water Complete designs and master Designs and master plan 100%maaster plan. plan completed

b. Hiring of Advisory services to strengthen Complete imnplementation Mostly completed except for the 80%administrative systems and train personnel in leak detection and control systemaanagement, O&M, and commercial and

financial administration (PROFISE program)

c. Purchase of equipment including computers Complete purchase Purchase completed 100%tD improve the operations, commercial andfinancial areas

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to the amount of credit resources available. In May 1996 IDA authorized new calls for bids witha reduced scope of supplies and works, under limited local bidding. The successful bidders wereselected in July 1996 and in August of that year IDA gave its no-objection to the contracts. Thethree bids for the supply and construction of the Cala Cala plant, tanks, and distribution systemwere conducted over the period from July to September 1995 and the contracts were preparedfor signature in January 1996. A consulting firm was hired to supervise the construction andrehabilitation works at Vinto and Cofia Cofia.. The no-objection to the call for bids was delayedbecause of SEMAPA's difficulty in providing the counterpart funds. IDA disbursed 100% of thepayments for the final Wara Wara subcontract under a repayment formula specially authorizedby IDA, since the Wara Wara system was an emergency work. To be able to provide thecounterpart funds for other works, SEMAPA contracted a US$ 7 million loan from the MisicuniCompany (which is basically a Government loan), out of which it used US$3.077 million as thecounterpart for IDA credit. The closing date was extended twice: in June 1996 for one year andin June 1997 for another six months. The completion of the Cala Cala treatment plant andstorage tank was delayed by five years and the completion of the distribution networks, by twoyears.

54. Part C-1 (c). Rehabilitation of the Chungara system. This work was not executedbecause the master plan demonstrated that it was very expensive for the amount of water thatthe rehabilitated project would produce. It execution might be reconsidered at a later date, if thewater scarcity crisis would worsen.

55. The Misicuni project. From the outset of the project preparation (May 1987), themanagement of SEMAPA, the authorities of Cochabamba and the Bolivian Government insistedthat IDA finance the Misicuni project works. A IDA mission which visited Bolivia duringFebruary 15 to 26, 1988, indicated that the estimated project cost of US$60 million for 1 m3 ofwater was six times higher than average annual investments in Bolivia in the water and sanitationsector and four times higher per cubic meter than projects that were already considered to beexpensive in Latin America. As a result, IDA conditioned the credit on the withdrawal of theMisicuni project from the public sector investment program. This condition was accepted by theGovernment on September 1990. The Misicuni project estimated cost was subsequently reducedto of US$46 million per I m3

-. IDA recommended that a feasibility study is conducted beforefurther considering the project.. During a visit of a Bolivian mission in IDA on March 1991, itwas agreed that credit 2187-BO funds would be used to finance the feasibility study of theMisicuni project. The study was completed in July 1992 and concluded that the cost of multiple-purpose project would be US$295 million and that such project would have a high impact on thecountry's public investments. IDA decided therefore, on April 1, 1993, not to authorize the useof IDA funds to finance the Misicuni project. In July 1997 the Government requested IDA'sopinion on the Misicuni project in comparison to the Corani project. IDA's response given inAugust 1997 (see Annex 4) suggests that, based on the information made available to it, theCorani project is more feasible from the economic and financial standpoints. In spite of thisopinion, the new Government which took office in August 1997, immediately rejected theCorani project and initiated the construction of the Misicuni tunnel, before having secured thefinancing of the entire Misicuni project. Currently, the Government is expecting to finance the

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Misicuni project under a BOT coupled with the privatization of SEMAPA. Both PSP processesare under preparation.

56. Part C-2 (a). Institutional strengthening, preparation of the water supply masterplan and of final designs for part C-1. The terms of reference and short list of consulting firmsfor the water supply master plan were prepared between October 1989 and May 1991, while thebidding and the preparation of the study took place between June 1991 and March 1993. Thefinal designs were prepared in two stages. The Wara Wara project was designed by theconsulting firm that carried out the initial project identification for the three cities, as anextension of its contract from October 1989 to August 1992. The other project works weredesigned by the consulting firm that had prepared the water supply master plan.. The workbegan in March 1993 and lasted for 14 months. The consultant required a six month extensionand completed the work in November 1994. The bidding and contract documents which werepart of the product, have been revised by a procurement specialist hired by SEMAPA. The finalversion was submitted in February 1995 and the study was accepted in March 1995.

57. Part C-2 (b). Consulting services for institutional strengthening. SEMAPA decidedto hire a consulting firm to design and implement an institutional strengthening programsimultaneously for all its areas of activity (the PROFISE program). Between April andDecember 1991 it prepared the terms of reference and the short list. The bidding took placebetween December 1991 and May 1992, and IDA gave its no-objection to the contract inNovember 1992. The contract became effective in January 1993 for 13 months, expiring inFebruary 1994. The consultant developed six modules which were fully implemented, with somesubsequent modifications to adapt them to conditions in the company. Development andimplementation are considered satisfactory, although implementation took two years longer thanoriginally planned since the company did not have the capacity to introduce all the modulessimultaneously. However, the PROFISE program did not obtain the expected results since it didnot improve the company's performance indicators, which are still far below SAR estimates. Thetumover in SEMAPA's managers and senior administrators as a result of the change ofGovermnent in August 1997 led to the loss of most of the benefits of the institutionalstrengthening program, the training efforts and continuity of management. The modules andlevels of implementation of the PROFISE program were the following:

* Module 1. Organization (new organizational structure, formalization of normativeprocedures, and communications) was fully implemented with some adjustments toadapt to conditions in the company.

* Module 2. Human resources (definition of policies, training programs, and jobsafety) was fully implemented.

* Module 3. Information technology (development of applied systems andinfrastructure) was designed and introduced in the commercial, administrative,financial, and technical (operations control) areas. The projects control module wasnot introduced.

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* Module 4: Operation and maintenance. The submodels for the technical cadaster,domestic metering, system maintenance and operations control were implemented.The submodel for bulk metering was developed under the French assistance program,which will finance its implementation. The submodel for electromechanicalmaintenance was not developed. However a course on maintenance was offered inSeptember 1995 and a start was made on using the software developed byCEPIS/OPS. The credit financed the design, construction, and equipping of a newmeter workshop between May 1994 and December 1997, purchase of 4,000 metersand 5,000 repair kits for meters in poor condition, rehabilitation of all existing casesand supports, and replacement of old meters with repaired ones. In August 1996, adetailed program for implementing PROFISE in the technical area was prepared withthe help of a foreign consultant and fully carried out.

* Module 5: Commercial (billing, marketing, collections through the banking system,meter reading, service disconnections and reconnections). The entire module wassuccessfully developed and implemented. The new users' cadastre was tendered fromDecember 1995 to July 1996 and was completed in November 1997.

* Module 6: Administrative and financial management (personnel, materials, fixedassets, accounting and integrated budget) was developed and fully implemented.

58. Part C-2 (c). Procurement of computers and equipment to improve the operating,commercial and financial systems. SEMAPA made suitable use of the allocation forequipment to support the institution-building program, purchasing and installing the necessarycomputer equipment for all the company's areas and acquiring vehicles and tools for itsmaintenance teams.

59. The Intent to Privatize SEMAPA. Although SEMAPA's board of directors agreed onMarch 19, 1996 to privatize the company, the process did not reach a successful end. Theprivatization was established as a condition for the first extension of the loan from June 30,1996, to June 30, 1997. For that purpose, a new section (3.09) was added to the creditagreement, and was accepted and signed by the Minister of Finance on May 24, 1996. In July1996 a consulting company hired by the Ministry of Capitalization performed the financial studyfor the privatization, and in April 1997 a memorandum of information on the concession of thewater and sewerage services in the city of Cochabamba and neighboring municipalities has beenprepared. The privatization was based on construction of the Corani project as the new watersupply source for Cochabamba and negotiations with the Corani company were held in parallelto the preparation of the concession. The bidding process for the concession of SEMAPAinitiated on May 1997 and offers were to be submitted by July 17, 1997. Despite IDA's effortsthrough Credits 2187-BO and 2134-BO, this bidding process was declared void by the SupremeCourt in response to a claim filed by the municipal authorities of Cochabamba, which objects tothe Corani project and prefers the Misicuni project. The claim was sustained by the court on the

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basis of a technicality which resulted from the Government's delay in processing theprivatization process.

60. On closing date the water coverage was 56% and sewerage coverage 52%. The Watercoverage is much lower than the target value of 80%, while sewerage service also falls short ofthe 56% target value. Some performance and financial indicators for 1996 (audited values) are:working ratio of 0.74, which represents an improvement over previous years but is stillconsiderably below the SAR's target (0.54 by the end of the project); collection efficiency fell to70%; the number of employees per thousand water connections dropped from 8.5 in 1994 to6.45 and was better than the SAR's target (8.37 by the end of the project); and the percentage ofpersonnel costs in relation to operating costs dropped from 59% in 1994 to 43.9%. There is stillno reduction in the rate of UTFW, which in 1996 rose to 54%, a high figure that indicates a lowoperating inefficiency. In August 1997 the indicator values were similar except for collectionefficiency, which dropped further to 61%, a low figure that demonstrates the company's financialinefficiency. This indicator has been losing ground in recent years, denoting a deterioration inthe company's performance. The percentage of personnel costs in relation to operating costs rosein 1997 to 48.9%.

61. In view of the performance and financial indicators of SEMAPA as presented above, it isevident that the project's institutional development objectives of the SEMAPA component werenot achieved. Unless: (i) SEMAPA is privatized in the near future; and (ii) a new affordablewater supply source is developed in parallel to the implementation of the privatization process,the quality of water and sewerage services will continue to deteriorate as a result of SEMAPA'sfinancial crisis. According to recent infornation provided to IDA, the Government intends toinitiate a new bidding process for the concession of SEMAPA, in combination with developingthe Misicuni project as the new water source for the city. The selection of the Misicuni projectas the water supply source puts in risk the success of the SEMAPA concession bidding process(see Annex 4 regarding IDA's position on, the new water source for Cochabamba).

62. In summary, all the works of the C'ochabamba component agreed upon during projectimplementation were completed. These works, represent, however, only 77% of the workprogram defined in the Credit Agreement. The implemented works benefit a population of53,074 inhabitant, which is far below the SAR estimate of 300,000. In addition, the institutionaldevelopment objects of SEMAPA were not fully achieved. The future sustainability of theprovision of water and sewerage services in Cochabamba will depend on the success inprivatizing SEMAPA.

63. PART D. NATIONAL COMPONENT (FNDR). The national component, totallyfinanced by IDA, was intended to strengthen FNDR in the development and application ofguidelines and manuals for institutional, technical, financial, and economic analysis of water andsanitation projects; support the Ministry of Urban Affairs (MAU) in establishing tariff policiesand a system of indicators to monitor the performance of the sector companies; provideassistance to the Ministry of Planning and Coordination (MPC) and the MAU in procuringcomputer equipment; and provide training in management, operation and maintenance, andcommercial and financial administration to: (i) FNDR; (ii) the two Ministries; and (iii) other

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urban and rural agencies which did not benefit from the Credit. The objectives were partiallyachieved. The national program of improving the institutional capacity of the centralsector/Regional agencies, which was under the responsibility of Fondo Nacional de DesarrolloRegional (FNDR), the National Fund for Regional Development, was only partly accomplished.The development and implementation of a sectoral policy aimed at accelerating the developmentof the country's water supply and sanitation systems was not achieved under the project. Theimprovement of the institutional capabilities of central agencies for overseeing the water sectordid not materialize because the institutions and Ministries involved (MUA and MPC) weredissolved in the early years of project implementation, as a result of reorganization of theexecutive branch. Similarly, the national program for training in operation, maintenance andcommercial and financial management was not carried out; instead, each beneficiary companyused loan proceeds for training of its own staff. Nevertheless, the Government had established,under the SIRESE Act in 1994, the Water Superintendency to regulate the water supply andsanitation utilities in the country. It is currently preparing a water and sanitation Law toestablish the policy framework in the sector and define the responsibilities and the authority ofthe water regulator. FNDR fulfilled its role as financial intermediary of the credit but did not: (i)monitor compliance with the schedule; (ii) act as program leader; and (iii) assist theinplementation of works. On various occasions it delayed disbursements. Through theactivities of FNDR, the coordination between the Bolivian authorities and donors in preparingand financing sector-wide projects has improved and various sector financing programs havebeen processed (an 1DB sector loan and an IDA municipal development credit through whichinvestments in the water sector are financed). Under the credit, 99 water and sanitation systemswere designed for rural areas as support for the PROSABAR (Rural Basic sanitation) project.This activity was not included in the original program but was added later at the Government'srequest. The institutional strengthening activities included in component D are presented inTable 4.

64. Part D-1 (a) and (c). Guidelines for the analysis of water and sanitation projectsand operating manuals for FNDR for institutional, technical, financial, and economicanalysis. The manuals for project analysis were prepared by FNDR consultants between March1995 and December 1996 under the IDB project PRODURSA 2: Regional Development andSanitation Program (IDB 777-OC/BO and 914-OC/BO). In 1989-1990 FNDR prepared anoperations manual and submitted it to IDA. Between July and December 1992, FNDR usedconsulting services to prepare standard bidding documents for works, goods, and services,procurement of computer equipment, and consulting services, and to develop internalprocedures to administer and supervise Credit 2187-BO. By May 1997, the National Secretariatof Popular Participation of the Ministry of Human Development (MDH) had established andpublished the following rules and regulations:

* Technical design standards for water systems* Technical design standards for sewerage systems* Standards for solid waste systems* Standards for sanitation systems construction materials* Technical regulations for designing water systems

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* Technical regulations for designing sewerage systems* Technical regulations for designing unmechanized treatment units for water and

sewage* Project presentation regulations* Model and regulations for management in water and sanitation

65. Part D-1 (b). Tariff policy framlework and system of indicators. In April 1989,MPC launched the Economic and Social Development Strategy for 1989-2000. The frameworkfor tariff policies was developed under an institutional agreement with the UNDP signed in April1993, with IDA's no-objection. It included a pilot program to detect potential areas forprivatization in SAMAPA as a complement to the decentralization studies already prepared bythe UNDP. Between April 1993 and April 1994, FNDR conducted a study revising the local,national, and regional financing by the agencies for the sector. As a condition for negotiating theCredit (in February 1990) IDA requested that a financial policy be established for the basicsanitation sector, which was published as Supreme Decree 22627 in October 1990. Article 1(Investment Recovery) of the decree establishes that: "All investments supported by funds fromthe national treasury or external financing for potable water and sewerage services shall have thefollowing main characteristics: (a) investments to establish, expand, and upgrade basic sanitationservices shall be recovered through tariff charges; and (b) the tariff structures for water andsewerage services shall prevent misuse of water and reflect the real cost of the services, in strictcompliance with the new tariff policies established in Resolution 120 of the Ministry of UrbanAffairs of February 20, 1990". Through consulting services financed from the Credit, SAMAPAdeveloped a model for establishing tariff; that could be used by other companies. FNDRdeveloped a system of indicators applicable to the companies that benefited from the Credit,concluding the work in May 1997. The system covers indicators, definitions, application, meansof comparison, and comments on the results. It is a suitable tool for monitoring businessmanagement and has been included in the companies' operating plans. In 1992 the Ministry ofPlanning and Coordination prepared a national development strategy which contains a chapteron basic sanitation, using German technical cooperation funds through the GTZ. With respect tothe institutional situation in the sector, the strategy document notes that: "Supreme Decree22965 promulgated in 1991 established the restructuring and distribution of the functions of thedifferent entities working in the sector in order to prevent duplication and render the country'ssanitation services more efficient. Coordination takes place on different levels and includesprojects for rural development, primary health care, sanitary education, and the use of waterresources from irrigation programs and electric power generation". Today the WaterSuperintendency is responsible for approving tariffs on the national level.

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Table 4: Institutional Development Activities Under the National Component(FNDR Component)

Description Expected Implementation Percentage of ExecutionImplementation as Achieved as of Dec.

defined in the 31, 1997 (%)Credit Agreement

1. Technical assistance in preparing the following: |

a. Preparation of Complete Prepared under an 100%guidelines for the preparation 1DB programanalysis of water andsanitation projects to beapplied by MPC

b. Development of a Complete Not prepared 0% ltariff policy framework preparationand a system ofindicators for MAU tomonitor theperformance ofoperators

c. Preparation of a Complete Prepared under an 100%Manual of Operations preparation IDB programfor FNDR and for theinstitutional, technical,financial, andeconomic analysis ofprojects

2. Purchase and use of data Complete procured only for Partialprocessing equipment by MPC procurement DINASBA of MDHand MUC

3. Training personnel of Provide training Not provided 0%FNDR, MPC, MUA and otherurban and rural agencies notparticipating in the Credit inmanagement, operation andmaintenance, and commercialand financial administration

4. Preparation of a study to Prepare the study Not prepared 0%define sector investment needsand priorities

5. Preparation of the Not included in the Prepared, in response 100%PROPRAAL component; design original program to the Government'sof 99 rural water and sanitation requestsystems for the PROSBARprogram

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66. Part D2. Procurement and use of data processing equipment for MPC and MUC.With Credit proceeds, FNDR purchased three PCs, a photocopying machine and a fax machine.It acquired a computers and printers for DINASBA and remodeled and furnished the office forthe PROSABAR project.

67. Part D-3. Training for FNDR, MIPC, MUA and other urban and rural agencies notparticipating in the Credit in management, in operation and maintenance and commercialand financial administration. In January 1990, ANESAPA sent IDA a profile for a nationalhuman resource training and development program in the water and sanitation sector in Bolivia.This program was not approved. Training; was mainly restricted to visits of personnel of theborrowing companies to Brazil to study general management, operation and maintenance andcommercial aspects that focused more on engineering than on service administration; studies inEnglish in the United States; participation in various seminars on private sector participation inwater utility management; and participation of employees of the borrowing companies indifferent international courses and congresses. Four formal training activities were carried out.The seminars contributed to the designs developed by DINASBA for rural water and sanitationsystems (PRORPAAL) and to establishing design standards. The following events were held:

* A seminar in January 1995 on innovative water treatment systems for small andmedium-sized cities given by Cinara of Cali, Colombia.

O A seminar on unconventional sewage treatment systems and the reuse of effluents inagriculture, given by foreign specialists.

* A formal course in September 1995 on the MAPRE software, given by CEPIS/OPS,to enable the beneficiary companies to use the software for their preventive andcorrective maintenance programs.

* A formal course in operation and maintenance of water and sewerage systems givenby a foreign consultant on behalf of FNDR to Bolivian sector companies.

68. Part D-4. Study to define sector investments including national priorities. Thiscomponent was not implemented. Instead, at the Government's request, a program was carriedout by DINASBA between December 1994 and June 1997 to design 99 systems (59 for waterand 40 for sewerage) known as PRORPAAL. The works, if implemented, would provide waterfor 60,144 people and sanitation services for 63,695 and will cost US$13.7 million.

69. In summary, management of the Credit proceeds for the national component underFNDR's control was satisfactory. However, FNDR did not assume a leadership role in thesector. Nonetheless, the Water Superintendency established in 1994 under the SIRESE Act isbeginning to assume that role.

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70. The consulting services to design the water and sewerage systems under the PRORPAALcomponent prepared by two consulting companies (Galindo which designed 46 projects andContegral which designed 54) were completed and the designs were received by DINASBA toits satisfaction.

71. All the funds in the national component (D) were disbursed prior to the credit closingdate (December 31, 1997).

C. MAJOR FACTORS AFFECTING PROJECT IMPLEMENTATION

72. Project implementation was negatively affected by a number of factors that can begrouped into the following categories:

(a) Political intervention in the water companies in La Paz and Cochabamba. Politicalintervention by the Mayors in their capacity as presidents of the boards of directors of thecompanies affected decisions relating to: (i) the award of contracts; (ii) timely application oftariffs; (iii) privatization of the companies; (iv) bureaucratic delays in carrying out thedecisions of the boards of directors; and (v) turnover in company managers and personnel.This situation applied to the companies of La Paz and Cochabamba during the seven years ofproject implementation, in contrast to the Santa Cruz Cooperative which did not experiencepolitical interference and implemented the project in a climate of managerial and personnelstability (the manager did not change during the project implementation period) and excellentrelations between management and the board of directors appointed by the cooperative'smembers. An example to the results of political intervention is the failure in privatizingSEMAPA (Cochabamba) due to the opposition of the local authorities who favoredconstruction of the Misicuni project, to the clear disadvantage of the residents of the citywho will, as a result, experience delays in: (i) gaining access to a much needed new watersource; and (ii) a reduction in water rationing. The political intervention resulted in lack ofautonomy in decision-making, which forced managers to obtain approval of administrativedecisions by the boards of directors, hampered timely decisions for project implementation.Also, since managers were political appointees of the Mayors, the turnover of managers inthe La Paz and Cochabamba companies was very high.

(b) Financial weakness of SEMAPA (Cochabamba). During the project implementationperiod (December 1990 to December 1997) SEMAPA was financially very weak, and wasnot able to provide the counterpart funds on time. One of IDA's conditions for extendingthe closing date was that SEMAPA obtains the required fund. On the basis of this condition,SEMAPA obtained Government funds through a loan from the Misicuni company.

(c) Weak technical base for project preparation and evaluation. Preparation of the projectand the SAR for La Paz and Cochabamba was based on preliminary engineering studies.After the detailed design it was necessary to readjust the scope of works to the availablefunds and this caused considerable delays. Also, SEMAPA decided to prepare the master

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plan for water supply before beginning the emergency works. This approach delayed theimplementation of the emergency works by three years.

(d) Difficulties with standard bidding documents. SEMAPA and SAMAPA had difficultiesin preparing the bidding documents and other administrative documents in conformity withIDA standards. This delayed the initiation of bidding processes by more than a year. Afterconsiderable delays in Cochabamba, IDA insisted that an expert be hired to help out inpreparing bidding documents and resolve the problems.

(e) Weakness of local suppliers (represenitatives of foreign manufacturers). The responseto the calls for bids, particularly by suppliers of goods, was deficient since local suppliers didnot have enough professional experience. This hampered the timely award of contracts and invarious cases made it necessary to resort to retendering. Suppliers were also late in thedelivery of goods because of their lack of experience.

(f) Weakness of the implementing units in La Paz and Cochabamba. The projectimplementing units, which were staffed with inexperienced and untrained personnel with veryweak managerial skills who had to consult the general managers of the companies regardingall their decisions, hampered expeditious project implementation. SEMAPA never had anindependent implementing unit and its planning unit which was responsible for projectimplementation, was handling several other projects at the same time.

D. PROJEICT SUSTAINABILITY

73. In La Paz, the concession of water and sewerage services to a private companyguarantees: (i) continuity in managerial and other key staff; (ii) implementation of suitableadministrative, commercial, financial, operating and maintenance practices; and (iii) theavailability of investment funds, all of which are core elements for ensuring the sustainability ofthe project and of the provision of services. The concessionaire, Aguas del Illimani S.A, will beable to make the investments required over the 30 years of the contract period and was in factnegotiating, before the closing date, new loans with multilateral institutions such as IFC, CAF,IDB, and EIB. The institutional reform in La Paz is an example that many Latin Americancompanies should follow.

74. In Cochabamba, since SEMAPA was not privatized, the project's sustainability is indoubt because: (i) intervention by local politicians in managing the company and the resultingweak management and administrative performance; (ii) frequent turnover of managers and keycompany personnel; (iii) lack of stability in administrative, commercial, financial and operatingand maintenance programs; and (iv) contirnuing financial weakness which will negatively affectthe companys operation and maintenance activities. Thus, project sustainability depends on thecommitment of local politicians and leaders, particularly the Municipality, to achieving continuityin company management and to addressing the problems of low coverage of services, waterrationing and high losses in the water system (water coverage of 56%, sewerage coverage of52% and UFW of 52% in August 1997). it is expected that the Government and the Water

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Superintendency will facilitate the privatization of SEMAPA, since this is the only way forresolving the water and sewerage problems of the city. The methodology should be:

* The adoption of an appropriate institutional structure that will shield the companyfrom political intervention;

* Support for achieving efficiency and effectiveness and monitoring of operational,commercial, administrative and financial performance and of the quality andcontinuity of water and sewerage services;

* Development of a new water supply source for the city at an affordable cost to theconsumers;

* Approval of periodic tariff increases to enable the company to finance its: (i)operating costs; (ii) maintenance costs; (iii) equipment renewal; (iv) investments toexpand coverage; (v) debt service; and (vi) adequate returns on its fixed investments.

75. Sustainability will also depend on continuously monitoring performance indicators and onthe efficient management of technical, commercial and financial aspects. It will depend inparticular on:

* Urgently implementing a program to reduce the percentage of UFW to about 25%(from the current figure of 52%);

* Continuing the implementation of the PROFISE program, with emphasis onintroducing the modules for operational control and maintenance, including hiringand training skilled staff.

* Introducing a program to improve finances through tariff adjustments and leakagecontrol, which is crucial if the company is to achieve and maintain adequate servicelevels.

76. The only way of achieving all of the above is to privatize SEMAPA.

77. In Santa Cruz SAGUAPAC's sustainability is guaranteed due to the stability, efficiency,and effectiveness demonstrated by the company over the seven years of project implementation.The company needs, however, to accelerate the implementation of the programs to expandsewerage coverage and to protect the Santa Cruz aquifer, which is the only water source inoperation. Similarly, It will have to improve and expand the sewage treatment system to complywith Bolivian standards for the discharge of treated wastes. One challenge for SAGUAPAC isto obtain financing for investment, mainly for expansion of sewerage networks.

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78. As for the operation and maintenance of the installations and works constructed underthe project, there is no doubt that in Santa Cruz and La Paz the works will be fully used to servethe purposes they were built for since the water companies in those cities are efficient andresponsible. The installations and works constructed in Cochabamba will also be operated totheir fill capacity because they are priority works in a city which suffers of severe water scarcity.They might, however, not function properly due to the shortage of funds for operation andmaintenance.

E. IDA PERFORMANCE

79. Project identification, preparation and appraisal were based on information existing in thecompanies and information provided by the consultants which were retained to prepare theproject for the three cities under PPF-444-]30. The preparation was based on preliminarystudies of the works and not on final designs. This led to delays and subsequent reformulation ofthe projects for La Paz and Cochabamba.

80. The SAR adequately identified the rehabilitation and expansion requirements for thewater and sewerage systems and for institutional strengthening. IDA subsequently identified theneed to privatize the companies in La Paz amd Cochabamba, and these objectives were includedin the amendment to the Credit Agreements which was signed before the first extension.

81. The project's main risks were identified in the SAR as follows: (i) the Government mightfail to effectively implement the policy and institutional framework to improve sectorperformance countrywide, which was partially mitigated with a financial policy established undera supreme decree, but no administrative policy was introduced to improve the management ofthe water companies; (ii) FNDR might fail to become an effective sector lead agency. FNDRfailed in fact to assume the leadership role, and today the Water Superintendency is taking overthat role; and (iii) delays in the timely application of tariff increases, which occurred in La Pazand Cochabamba and confirmed the risk pointed out in the SAR regarding Governmentweakness in applying the policies agreed upon.

82. Political intervention in La Paz and Cochabamba was promptly detected by IDA andsolutions were proposed (privatization of SAMAPA and SEMAPA). IDA was constructive inconvincing the authorities to implement the proposed solutions and provided all the technicalassistance necessary to carry out the privatization process. Success, however, was only partial,since SEMAPA was not privatized. Even so, the privatization of SAMAPA was a majorachievement in the Latin American context.

83. The companies encountered difficulties in using IDA's standard procurement documents.IDA did not identify this problem on time and this led to delays in the preparation and approvalof bidding documents.

Four task managers were involved with the project from its inception to completion. During theperiod September 1991 to November 1994 procurement activities were delayed due to slow

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response of IDA in issuing no-objections to bidding processes. During the same period,supervision of the national component was also weak, but improved from November 1994 on,when IDA identified the problems and helped to resolve them. Intensive IDA's supervisionduring the final implementation period enabled to ensure the satisfactory completion of workswithin a reasonable period.

84. Four task managers were involved with the project from its inception to completion, twoprior to signing the Credit Agreement and two during the implementation stage. IDA providedadequate advise to the Bolivian authorities during the identification and appraisal stage. Theconditions of negotiation were complied with by the Government. During the period September1991 to November 1994 procurement activities were delayed due to slow response of IDA inissuing no-objections to bidding processes. During the same period, also the supervision of thenational component was weak and the objectives of this component were not achieved, but thesituation improved from November 1994 on, when IDA identified the problems and helped toresolve them. Intensive IDA supervision during the final implementation period enabled toensure satisfactory completion of works within a reasonable time frame.

85. 1DA's recommendations for undertaking specific groundwater studies in Cochabambaand Santa Cruz and its insistence in their implementation helped to clarify the informationregarding the capacity of the aquifers and the risks of their contamination.

86. A total of 14 supervision missions were carried out over the seven years of the projectimplementation. The back to office reports and the aide-memoires permit tracing projectimplementation, the problems encountered, monitoring of the legal commitments, and the agreedplans of action. Overall, IDA's performance in project preparation and supervision wassatisfactory.

F. BORROWER PERFORMANCE

87. The institutional weakness of the companies in La Paz and Cochabamba, continuousintervention in their management by local politicians, and tumover in key staff led to delays inproject implementation. Political intervention was also the reason for the failure of the effort toprivatize the water company of Cochabamba. The private concessionaire of the water companyof La Paz, in contrast, was able to resolve the implementation problems, and proceed tocomplete the project works.

88. The limited financial capacity of the water company of Cochabamba delayed projectimplementation until it obtained a Government loan to finance its counterpart contribution.During the project, the company was unable to reduce the high UFW level (52% at closing date)or to improve collections (61% at closing date), which demonstrate its operational and financialinefficiency. The implementation of the Wara Wara project was not satisfactory. Anincompetent contractor was hired and completed the works after a delay of 561 days in relationto the period agreed upon in the contract (305 days), SEMAPA refused to rescind the contractand IDA had to accept this approach, which delayed by four years the completion of this

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important work, that could have increased much earlier the water supply flow to the city by 100I/s.

89. The Santa Cruz water company implemented the project efficiently and effectively,completed the works defined in the SAR ahead of schedule and with significant savings, andused the savings to construct additional sewerage works which were completed prior to theclosing date. In regard to institutional development, it used the Credit proceeds to make themost urgent improvements, which were adequately identified and prioritized. It made good useof IDA's recommendations and demonstrated a high sense of institutional responsibility. Itsperformance indicators rank it as one of the lbest water and sewerage companies in LatinAmerica.

90. FNDR, which was in charge of managing the credit, complied satisfactorily with itsfinancial intermediation function. However, it was not always successful in providing timelysupport in the administrative aspects of tendering and implementation of contracts, andsometimes delayed disbursements to the beneficiary water companies. Through the activities ofFNDR, the coordination between the Bolivian Authorities and donor agencies in preparing andfinancing sector-wide projects has improved. The national program of improving theinstitutional capacity of the central sector agencies was only partly accomplished, mainly becausethe Ministries involved (MAU and MPC) were dissolved in the early years of projectimplementation as a result of reorganization of the executive branch. The development andimplementation of a sectoral policy aimed at accelerating the development of the country's watersupply and sanitation systems, was not achieved under the project because of weakness of theagencies responsible for the sector.

G. ASSESSMENT OF OUTCOME

91. General assessment of project achievements The works of the SAMAPA andSAGUAPAC components were completed. SAGUAPAC has in fact completed 25% ofadditional works. SEMAPA, on the other hand has completed only 77% of its works. A majorinstitutional reform was carried out in the water sector in La Paz and will ensure thesustainability of water and sewerage service in that city. The institutional performance ofSAGUAPAC in Santa Cruz has been very satisfactory all along. The institutional developmentobjectives of SEMAPA in Cochabamba were, however, not achieved and the company's futuresustainability is uncertain and will depend on its successful transfer to the private sector. In viewof the highly satisfactory results achieved in the SAGUAPAC and SAMAPA components andthe partial achievements in the SEMAPA component, the project as a whole is ranked asmoderately satisfactory.

92. SAMAPA's institutional strengthening was achieved through privatization of thecompany under a 30-year concession which ensures the sustainability of the water and sewerageservices in La Paz. In SEMAPA a broad institutional development program (PROFISE) wasdesigned and implemented, covering the commercial, financial, information technology, andoperation and maintenance areas. It success has been limited. Since the company has not been

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privatized, the sustainability of water and sewerage services in Cochabamba is uncertain.Moreover, the turnover of managers and senior staff as a result of the change of Government inAugust 1997 led to the loss of the progress made in training, management improvement and theachievements of PROFISE. SAGUAPAC used the credit funds to address its priorityinstitutional development needs.

93. The objectives of improving the institutional capabilities of central agencies foroverseeing the water sector and of developing an institutional and policy framework to improvethe performance of the sector countrywide were not achieved, although a financial policy wasestablished by a supreme decree. The objective of improving coordination between the Bolivianauthorities and donors in preparing and financing sector-wide project was achieved through theexperience gained by FNDR and the improvement of its performance. In addition, 99 water andsewerage systems for rural communities were designed under the national component and theirimplementation could be financed under future rural development programs. Although theobjectives of policy framework development and institutional capacity building of centralagencies were not achieved under the project, the Government established a WaterSuperintendency which is supposed to take over the regulatory role in the sector, with FNDRcontinuing to function as the financial support entity for the sector.

94. The internal rate of return (IRR) for SAMAPA at closing date was 8.65% for thecombined water and sewerage project (compared to an expected value of 10% in the SAR).This value is lower than the SAR estimate because in the SAR it was assumed that US$7.6million would be contributed by the KfW to finance sewerage works in El Alto, while after thedetailed design it was found that cost of the sewerage works amounted to US$13.37 million,which is the grant amount awarded by KfW. The final number of sewerage connections in ElAlto is expected to be about 5,000 and not 8,455 as originally estimated. The IRR for the LaPaz water project alone is 34.97%. For the SAGUAPAC project, the IRR at closing date was20.37% (compared to an expected value of 15% in the SAR). The higher than expected value isa result of the construction of 25% additional sewerage works. For SEMAPA, the IRR atclosing date was 0.58% (compared to an expected value of 15% in the SAR). The reasons forthis disappointing result are: (i) not all the projects benefits were achieved in terms of increasedwater flow; and (ii) UFW was not reduced (reaching a value of 52% at the closing date,compared to an expected value of 3 0% in the SAR). SEMAPA will have to make a priorityeffort to reduce its water losses if it intends to improve service to the community and improve itsfinancial situation.

95. Although only partial success was achieved in the national component and in theSEMAPA component, the results of the SAMAPA and SAGUAPAC components wereextremely successful and impressive. In view of the highly satisfactory results in theSAGUAPAC and SAMAPA components, which outbalance the partial results obtained in theSEMAPA component, overall, the project is ranked as moderately satisfactory.

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H. FUITURE OPERATIONS

96. In 1994 the Government established, under the SIRESE Act, the Water Superintendencyas the regulator of the water and sewerage utilities in charge of monitoring technical,administrative, commercial, and financial aspects, so as to guide the sector and ensureimplementation of institutional management policies. Although this reform is recent, it isexpected to improve the sector's performance over the medium term.

97. Privatization of sector companies, which began with the long-term concession ofSAMAPA, is the route that other companies should follow. Support for these initiatives, whichwould help to improve the operational efficiency of the water companies, is an area of interestfor future IDA operations. IFC operations can be used to support the privatized companies.

98. A Regulatory Reform and Privatization TA under preparation will support the conversionof local water and sanitation utilities into efficient entities. This project will finance technicalassistance to: (i) assist the water Superintendency to establish performance indicators that will beincorporated within each local water utility's concession contract; (ii) supervise these entities todetermine whether they comply with these obligations; and (iii) convert water cooperatives intocorporations with private investment in order to comply with investment and operationalrequirements.

L LESSONS LEARNED

99. It is preferable that the preparatio,n and evaluation of projects be based on finalengineering designs. Preparation based on feasibility studies may lead to delays caused by theneed to redesign works and make subsequent adjustments in the scope of works, which maycause delays in achieving the expected benefits

100. It is extremely difficult to develop and implement institutional strengthening programs ininefficient ailing public utilities that have no incentives to improve their performance and whichare subject to strong political control and complex administrative procedures. In such cases,rather than investing in institutional strengthening, IDA should make its loans conditional oninvolving the private sector in the management and delivery of services. If Governments andBorrowers do not accept this approach, IDA should not participate in financing the respectiveprojects.

101. Privatization depends entirely on the political will to carry out the process. It wassuccessful in La Paz because the Government and Mayor were committed to it, and it failed inCochabamba because of the objection of the local authorities.

102. Frequently politicians take decisions that are contradictory to the recommendations oftechnical and financial studies, for reasons not related to the objective of benefiting the public,thereby jeopardizing the achievement of the goal of providing water and sewerage services to apopulation that does receive with these crucial services.

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103. High turnover of task managers does not foster sound supervision, does not supportimplementation efforts and should be avoided.

104. The project objectives were too ambitious and the project design was too complicated.It is preferable to design and implement simpler projects.

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PART I: STATISTICAL ANNEXES

TABLE 1: SUMMARY OF ASSESSMENTS

A. Achievement of objectives Substantiall Partial Nezligible Not aplicableMacro policies XSector policies XFinancial objectives X ___

Institutional development X .

Physical objectives X .Poverty reduction XGender issues XOther social objectives XEnviromnental objectives XPublic sector management _

Private sector development XOther (specify) XB. Project sustainability Likely Unlikely Uncertain

x__C. Bank performance Highly Satisfactory Deficient

satisfactDryIdentificacion X _

Preparation assistance X

Appraisal XSupervision x

D. Borrower performance Highly Satisfactory Moderately DeficientSatisfactory Satisfactory

DI: SAMAPA = = _ _= _=_

Preparation _ _ x

Implementation _ _ __X__ _ _ _ _ _ _ _ _ _ _ _ _ _

Covenant compliance _ X x

Operation (if applicable) X _ r _

D2: SAGUAPAC _ =

Preparation x

Implementation X _

Covenant compliance x _Operation (if applicable) X _

D3: SEMPA _

Preparation X

Implementation _ XCovenant compliance X

Operation (if applicable) X

D4: FNDRPreparation X

Implementation X Covenant compliance x

Operation (if applicable) _

E. Assessment of outcome Highby Moderately Unsatisfactory Highlysatisf actory Satisfactory Unsatisfactory

x

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TABLE 2: RELATED BANK LOANS/CREDITS

Loan/Credit title Purpose Yearof | StatusI I approval

Proceeding Operations

CR 948-BO: Water and Sewerage Rehabilitation and expansion of the 1979 Completedfor Santa Cruz de la Sierra Santa Cruz de la Sierra Water and 1986

Sewerage Systems

Cr 1324-BO: Water and 70 rural communities with 170.000 1976 CanceledSewerage for Urban and Rural peopleCommunitiesCr 1842-BO: La Paz Municipal The project aims at: (i) strengthening 1987 CompletedDevelopment Project the institutional, managerial and fiscal 1996

capacity of the city of La Paz; (ii)promoting municipal investment, theprovision of basic municipal services,and the maintenance of urbaninfrastructure; and (iii) alleviating theeffects of economic stabilization andadjustment on the population.

Cr 1977-BO: Economic This project aims to support 1998 CompletedManagement Strengthening institutional development and facilitate 1995Operations Project (EMSO) the sustained implementation and

consolidation of the Government'smedium term macro-economic reformprogram

Cr 2134-BO: Private Enterprise This credit is directed at strengthening 1990 ClosingDevelopment Project the private industrial sector, 6/30/98

broadening the client base and rangeof financial instruments available fromthe banking system, improving theeffectiveness of public and privateinstitutions providing services toindustry, minimizing bureacraticimpediments to industrialdevelopment, improving managerial,accounting andmarketing skills amongmanufacturers, and promoting

I entrepreneurial development.

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Loan/Credit title j Purpose | Year of | Status_ _ _ _ _ approval

Proceeding Operations

Cr. Cr. 2806-BO:Rural Water and Increasing coverage and sustainable 1996 Closingsanitation Project use of water and sanitation services in 12/31/00

rural communities and municipaliteisin Bolivia

Cr 2565-BO: Municipal Promoting efficient municipal 1994 ClosingDevelopment Project management in support of effective 12/31/99

decentralization; improving resourcemobilization and allocation ofmunicipal investment projects;alleviating urban poverty andencouraging balanced regionaldevelopment.

Cr 2647-BO: Regulatory Reform The project's objectives are to assist 1994 Closingand Capitalization Technical the Government in the planning, 6/30/98Assistance Program design and execution of its

capitalization program and to ensurethat the Government has at itsdisposal the varied and complexadvice needed for such a program.

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TABLE 3: PROJECT TIMETABLE

Steps in project cycle Date planned Date actual/latest estimate

Identification (Executive Project 23 Apr 87 11-Oct.-89Summary)Preparation 01-Mar.-88 04-Mar.-89Appraisal Nov.-88 07-Oct.-89Negotiations NA 30-Abr-90 and 24-Sep-90Letter of development policy (ifapplicable)

Board presentation 27-Mar.-90 04-Dic.-90Credit Signing 17-Dic.-90Effectiveness 18-Mar.-91 17-Sep.-91First tranche release (if applicable)__________

Mdterm review (if applicable) l

Second (and third) tranche releaseProject completion 31-Dec-96 31-Dec-97

Loan closing 30-Jun.-96 31-Dec-97NA: Not Available

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TABLE 4: CREDIT DISBURSEMENTS: CUMULATIVE ESTIMATED (SAR) ANDACTUAL

(USS Thousands)

Company/FY Total 89 90 911 92 93 94 95 96 97

SAMAPA _

SAR 6,795 1,061 1,383 2,909 1,402 40 -

Actual 6,558 - 240 271 198 - 419 4,457| 1,388

Cum. SAR (1) 1,061 2,444 5,353 6,755 6,795 6,795 6,795 6,795

Cum. Actual (2) _____ - - 240 511 709 709 1,128 5,585 6,973

(2) as % of (1) 10 10 10 10 17 82 103

SAGUAFAC

SAR 12,687 210 4,792 3,137 3,761 632 155 - -

Actual 12,706 - 160 977 4,258 2,790 1,835 1,814 1,433

Cum. SAR(1) _ - 210 5,002 8,139 11,900 12,532 12,687 12,687 12,687

Cum. Actual (2) T - - 160 1,138 5,395 8,185 10,020 11,834 13,277

(2)as of(1) - 3 14 45 65 79 93 105

SAMAPA

SAR 13,834 - 960 3,071 2,387 4,314 2,594 508 - -

Actual 13,616 - - 277 357 1,520 1,590 1,488 5,389 3,695

Cum. SAR(1) - 960 4,031 6,418 10,732 13,326 13,834 13,834 13,834

Cum. Actual (2) - - 277 634 2,154 3,743 5,231 10,620 14,315

(2)as%of(1) - 7 10 20 28 38 77 103

FNDR

SAR 1,3001 -_ I I _ _ _______

Actual 1,1581 - - - 22 2851 3521 163 191 145

Cum. Actual (2) T_r ___ 22 307J 6591 821 1,013 1,158

Total

SAR 34,616 - 2,231 9,246 8,433 9,477 3,266 663 - -

Actual 35,722 - - 677 1,627 6,261 4,731 3,904 11,851 6,671

Cum. SAR(1) - 2,231 11,477 19,935 29,733 33,396 34,243 34,459 34,616

Cum. Actual (2) - - 677 2,304, 8,565| 13,296| 17,201| 29,052| 35,722

(2)as%of(1) - 61 121 291 401 501 84L 103(1) Information based on SAR data(2) Information based on accounting data of FNDR

42-

DISBURSEMENT CHARTS

AWAPA Indp Vm& IAMAPM UA Trtabls SR y Rsal Aomub

91 91 93 94 95 ff ff n 9091929391 9X97

AS- ."

SAGUAPAC.luwenl6nmprog,nvulm (SAR)y Real SAOUA?AC: T4.W. SAR yX.W A..*I.d.

6,000

4,00 in K- 'I

9 91 92 93 94 95 96 97 3n 9n 949f 597

AM..Afiw

SEMAPA lnv*erl6nPnigmnda (SAR) y Real SI rA. T.Md. IAkR .dI A-..I*d

I 6,000 - I - - 1- --

t4,0°°PO SiA R1

*2,000 ~l

90 91 | 9 96 97

Alas 89 9.91 91 93 94 9) 95 97AS..

|NDR: lvena real | D A-.I.

4 200 _ ElM41 -9

J - R.a 4 0 .l. -R.

I ̂ so90 9 92 93 94 95 96 97 1

I.w~~~~A.4W~~ AA.

CraditO 2187-BO: imveulfn Total PIrograuda (SAR)y Real Cd^. ZI87: T4d- &ARy R.W AA..Id..

|Saup, SapmA Snspa y INDR)

10,00 Mm 18.9a]

90 91 92 93 94 95 96 97 I I A a

AAm A&-l l

43-

TABLE 5: KEY INDICATORS FOR PROJECT IMPLEMENTATION

Key implementation indicators Estimated SAR (1990) Actual (1997)in SAR/Presidents Report l l

5A: SAMAPAIncrement in water production and 200,000 additional inhabitants 97,000 additional inhabitantssupply in La Paz served in 1995 (increase of 300 served (with the additional 300

V/s in water supply) Vs), and inatsllation of acapacity to serve in the future191,800 additional inhabitants(through the increse ofconveyance capacity of 1,000I/s to the southern part of thecity), achieving a total benefitedpopulation of 289,000inhabitants

Increment in the sewerage service 200,000 additional inhabitants KfW indicates that works willin La Paz and El Alto served in 1995 be completed in the second half

of 1998 (see Annex 3)

5B: SAGUAPAC _Increment in water production and 300,000 additional inhabitants 272,000 additional inhabitantssupply in Santa Cruz served in 1995 served, with a production

increase of 840 I/s

Increment in the sewerage service 30,000 additional inhabitants 46,736 additional inhabitantsin Santa Cruz served in 1995 served with sewerage networks

and wastewater treatment inoxidation ponds

5C: SEMAPAIncrement in water production and 300,000 additional inhabitants 47,520 additional inhabitantssupply in Cochabamba servecd in 1995 served, with a production

increase of 220 1/s

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TABLE 6: KEY INDICATORS FOR PROJECT OPERATION

Key implementation indicators in Estimated SAR (1995) Actual (1997)SAR/Presidents Report l l

6A: SAMAPA(Non Audited Data)OperationsWater produced (M3 Thousands) 66,962,570 65,284,914Water sold ( M3 Thousands) 48,942,940 43,801,315Unaccounted for water (V.) 26.9 32.9Service Coverage Water (°ie) 80.7 84.0Sewerage Coverage (°/O) 65.6 56.0Metered water comections/water connections 85 98Employoes/1000 water connections 7.86 3.57FinancialAverage Water Tariff US$/m3 sold 0.371Working Ratio 0.431 0.696B: SAGUAPAC(Audited Data)

OperationsWater produced (M3 Thousands) 40,230,000 38,176,960Water sold (M3 Thousands) 30,172,500 30,672,662Unaccounted for water (%/6) 25.0 23.0Service Coverage Water (%) 78.5 80.0Sewerage Coverage (%/6) 39.0 33.0Metered water connections/water connections (%) 100 100Employees/1000 water connections 6.06 4.02FinancialAverage Water Tariff US$/m3 sold 1 0.1741 0.55Working Ratio j 0.641 0.726C: SEMAPA(Non Audited Data)

OperationsWater produced (M3 Thousands) 28,230,000 23,622,236Water sold ( M3 Thousands) 19,760,000 11,476,010Unaccounted for water (%) 30.0 52.0Service Coverage Water (o) 79.5 57.0Sewerage Coverage (%/-) 56.1 54.0Metered water connections/water connections (%/6) 80 64Employees/1000 water connections 8.37 6.49FinancialAverage Water Tariff US$/m3 sold 0.281 0.63Worldng Ratio 0.54 0.71

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TABLE 7: STUDIES INCLUDED IN PROJECT

Location/Study Purpose as defined at SAR Status Impact of studyOct 89/Jul 89: Project To prepare engintering project Completed Allowed to execute the project.preparation for the three cities. components, preliminary

designs and costs.SAMAPA, La Paz

Oct 89/Feb 92: Final designs: To prepare engineering final Completed. Very positive. Allowed thePampahasi water treatment designs, bidding documents works to be executed.plant expansion, conveyance and costs estimates.system to the south anddistributionAug 91/Jul 93: Institutional To strenghten organizational, Leakeage control Positive impact in leak detectionstrengthening commercial, financial and completed and and control. Negligible impact.

operations (leakeage control) implemented.areas. Other components

partiallycompleted.

1996: Private sector To prepare the PSP process in Completed. Very positive resulted in theparticipation La Paz. concession of SAMAPA (which

was awarded in mid 1997).1996: Tariff satudy To prepare financial projections Completed Allowed SAMAPA to propoese

and tariff study to be and Conata to approve the tariffsubmmited to Coinata. adjustment in 1996.

Dec 95: Operation and To introduce a methodology for Partially Positive impact in maintenanceMaintenance maintenance planning and implemented planning and control

control (electromechanicalequipment inwater treatment

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ p lan ts)_ _ _ _ _ _ _ _ _ _

SAGUAPAC: Santa Cmz de la SierraInstitutional Strengthening To strenghten organizational, Completed. Very positive impact.

commercial, financial andoperational areas.

Dec 95: Operations and To introduce a methodology for Not implemented No impactMaintenance maintenance planning and

controlJun 96: Management of Assess capacity and Recomendations Very positive impact inGroundwater Resources in contamination risks in the partially included updating the water master planSanta Cruz Santa Cruz aquifer in Operational in relation to capacity and

Plan contnination risk of theaquifer

Jun 96: Leakeage management Define a strategy to cope with Strategy included Very positive indirecting actionsunaccount for water in Operational on leak detection and leakeage

Plan controlJul 97: Environmental Auditing Assesing the environmental Mitigation Positive in updating andof Water and Sewerage Systems impact of existing installations measures included orientation of the sewerage

in Operational master planPlan

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Location/Study | Purpose as defined at SAR | Status m act of studySEMAPA: Cochabamba _ |Jul/Oct 88: Ground water To assess the quantity and Completed Positive, allowed to developassesment in Cochabamba quality of ground water in the ground water alternatives in the

Cochabamba Valley and master plan.extraction areas.

Mar 93/Mar 95: Water Supply To prepare medium and long Completed. Very positive as a tool toMaster Plan term development strategy, to implement services dircted to

identify projeCtS to satisfy satisfy demand.demand in both services and toprepare a long term investmentiplan.

Institutional Strengthening To strenghten organizational, Completed and Positive, but still SEMAPA'scommercial, financial and implemented performance indicators are notoperational areas. except leakeage satisfactory.

control.Dec 95: Operations and To introduce a methodology for Not implemented No impactMaintenance maintenance planning and

controlSep 96: Preliminary Assess capacity and Results were used Used as a planning tool forAssessment of Groundwater contamination risks in the to confirm ground aquifers exploitation.Resources in VaUe Alto and Cochabamba and Valle Alto water resourcesEvaluation of Previous Aquifers. The study provided and theirEstimates of the Groundwater clarification on capacity and contaminationin Valle de Cochabamba contaminations risks, in order risks.

to plan their utilization1996: Private sector To prepare the PSP process in Completed.. No impact since the process wasparticipation Cochabamba. suspended by the Mayor of

Cochabamba.

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TABLE 8A: PROJECT COSTS

Item Appraiisal Estimate (US$ Actual/Latest Estimate (US$)Million)

Local Foreign Total Local Foreign TotalCosts Costs Costs Costs

SAMAPA, La Paz 7.00' 7.40 14.40 17.04 12.747 29.78

Water 2.10C 4.70 6.80 5.82 6.10 11.92Sewerage (1) 4.90 2.70 7.60 11.22 6.64 17.86SAGUAPAC, Santa Cruz 4.70' 8.00 12.70 11.26 7.73 18.99SEMAPA, Cochabamba 5.10 8.60 13.70 12.88 7.55 20.43National Component 0.50 0.80 1.30 0.84 0.39 1.23Total Base Costs 17.30 24.80 42.10 42.02 28.31 70.43Physical Contingencies 1.70 2.50 4.20 0.00 0.00 0.00Price Contingencies 2.50 4.00 6.50 0.00 0.00 0.00Total Project Cost 21.50 31.30 52.80 42.02 28.41 70.43Taxes 3.40 0.00 3.40 0.00 0.00 0.00PPF (444-BO) 0.10 0.70 0.80 0.00 0.68 0.68Total Investment Cost 25.00 32.00 57.00. 42.02 29.09 71.11(1): The acual cost refers to the Grant Agreement signed between the Goverunent of Bolivia and KfW on June20, 1991.

TABLE 8B: PROJECT FINANCING

Item Aplpraisal Estimate ActuaULatest EstimateJJSS$ Million) S$ Million)

Local Foreign Total Local Foreign Total_ Costs Costs Costs Costs _ __

SAMAPA, La Paz 5.10 0.00 5.10 9.68 0.00 9.68SAGUAPAC, Santa Cruz 4.10C 0.00 4.10 5.87 0.00 5.87SEMAPA, Cochabamba 4.80 0.00 4.80 6.04 0.00 6.40FNDR 0.00 0.00 0.00 0.07 0.00 0.07KfW 4.40 3.60 8.00 6.73 6.64 13.37IDA 6.60 28.40 35.00 22.44 13.28 34.72

Total Project Cost 25.00 32.00 57.00 51.19 19.92 71.11!

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TABLE 9: ECONOMIC RATE OF RETURN

Institution ANC Average Actual Tariff IRR SAR IRR (Actual) Comments(%) (Dec 96) USSIm3 (%) Dec 96

SAMAPA 25.00 0.28 Not Calculated 34.97 Actual water project onlyin the SAR (without taking in account the

_______ ___________ sewerage project)25.00 0.28 10.00 8.65 l' Actual combined water and

sewerage projects

SAGUAPAC 24.00 0.40 15.00 20.37 Actual combined water andsewerage projects

SEMAPA 52.00 0.41 15.00 0.58 2' Actual water project

25.00 0.41 15.00 9.47 Considering future decrease inUnaccounted for Water (UFW)down to 24%.

25.00 0.53 15.00 14.25 Considering future decrease inUFW down to 25% and anincrease in water tariff of 300%.

1/ Althogh the IRR of the water project alone is very high, the IRR of the combined water andsewerage project did not reach the SAR value because: (i) the cost of the sewerage component,financed by KfW was highly underestimated in the SAR; and (ii) the number of sewerageconnections was over estimated in the SAR.

2/ The IRR resulted much lower than the SAR estimate because: (i) the expected increment of630 Ils of water supply to Cochabamba was not achieved as a result of the physical objection ofthe farmers to perforation of deep wells. The actual water supply increment achieved was only220 Vs; and (ii) the expected reduction in Unnacounted for Water was not achieved as well andthe UFW value at the credit closing date was 52%, compared to an expected value of 30%.

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TABLE 10: STATUS OF LEGAL COVENANTS

Agreement sction Coventm status Oimial Revised Desription of covent Co_mentsI Type fulillhnent Fulflllment

l_______ _____ ________ date dateCREDIT AG REEMENT (with the Gewrnent'

2.02 (b) 1 C Open Special Accot under theProjec

3.04 (a) 5 C Review amually project KfW does not take part in theimplementation satus with review.FNDR, the Executing AgenciesKfW, and IDA, and takeremedial actions as needed toimprove implementation.

3.05 (a) 5 C Continuous Cause Executing Agencies This requirement has been lifted(except SAGUAPAC) to use as of 1995, as a result of anprourement agent. amendment of the Bolivian law

.___________ __________ _ of proc er nent

3.06 (a) 5 C Decemiber Fumish to IDA plan of Related ("Misicuni') study has31, 1992 allocation of water raoure prvided recmmendations to

between agriculture and other the Bank, the capitaluses in the Cochabamba ares investments for the

reconmnended multipurpose damproject are outside the reach ofthe Government. A mediumterm solution involving groundwater is being explored.

3.06 (b) 5 CD January Commence implementation of See convert under 3.06 (a);1994 the above plan. French Government is providing

assistance to SEMAPAtoexplore ground water.

3.07 2 C Continuous Shall not commit capitalexpenditures for any waterprojed in excess ofUSSIOmillion in the areas ofLa Paz,Cochabamba and Santa Cruzwithout IDA approvaL

3.08 (a) 5 C December Fumish to IDA safacry31,1991 proposal for the reorganization

ofthe water supply sector basedon ongoing of studies

3.08 (b) 5 C June 3D, Commence implementation of1992 the reorgnization.

4.01 (a) 1 C May 30, Maintain Projed Account for& (b) each year expenditures under Part D ofthe

projed; arrange for independentauditing ofthe Special Accountand submit annual audit report.

4.01 (c) 1 C May30, Maintain records for aU SOEeach year accounts and provide separate

auditors' opinion for SOEL

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TABLE 10: STASTUS OF LEGAL COVENANTS (CONTINUATION)

PROJECT AGREEMENT (with SEMAPA, SAMAPA & SAGUAPAC)2.06 5 CP Furnish an Institutional SAGUAPAC complies,

Improvement plan and a SAMAPA and SEMAPA dofinancial plan (together with not. IDA mission of July5-year financial projections); 1995 prepared action plansand provide and implement for SAMAPA andaction plan to meet SEMAPA. On June 1996,performance targets as the GOB initiated thrnecessary. processes of privatizing

SAMAPA and SEMAPA.2.07 9 C May 31 and Feb Submit semi-annual project

28 each year progress report

4.01 1 C May 30 each year Maintain a project account;arrange for independentauditing of annual financialstatements, and SOEaccounts; and submit auditreports and separate opinionon SOEs.

4.02 2 CP October 1 each Shall not exceed the annual SAGUAPAC complied,year operating rations specified SEMAPA and SAMPA did

in the Credit Agreement and not.provide remedial actions asneeded.

4.03 2 C 12 months period Miaintain net Revenues atbasis least 1.3 times the debt

service requirements.

4.04 (a) 2 C During project Shall not undertake capital& (b) period expenditures exceeding

following amounts withoutIDA approval:US$2.0 million (SAMAPA)US$1.5 million (SEMAPA)US$1.5 million(SAGUAPAC)

4.04(c) 2 C Continuous Introduce an automatic tariff The "Dollarization" of theadjustment system (on a monthly tariffs has beenquarterly basis, in line with successfully applied; thisConsumer Price Index). needs to be supplemented by

additional increase to match________ _ __________ ___ _____ ____ _____ __________ _________ inflation.

Status Legend:C - Complied withCD - Compliance after DelayNC - Not complied withSOON - Compliance Expected in Reasonably Short TineCP - Complied with PartiallyNYD - Not YetDue

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TABLE 11: COMPLIANCE WITL: OPERATIONAL MANUAL STATEMENTS

No significant lack of compliance with applicable Bank Operational Statement (OD or OP/BP)

TABLE 12: BANK ]RESOURCES: STAFF INPUTS

Stage of Project Cycle Planned Revised Actual

Weeks US$ (1) Weeks US$ (1) Weeks US$

Through Appraisal 20 20 37,500.00

Appraisal/Board 2 2 3,750.00

Board/Effectiveness 0 0

Supervision 27 27 70,950.00

Completion 9,000.00

TOTAL 49 49 (2) 121,200.00

(1) Information not available(2) Excluding time for preparation of the ICR

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TABLE 13: BANK RESOURCES: MISSIONS

Stage of Month Number Days Specialized Performance rating Types ofproject year of persons In staff skills problems

field representedImplementation Development

status impactThrough May.-87 2 10 SE/FA - -

appraisalISep.-87 2 10 SE/FA - -Feb.-88 2 10 SE/FA - -

Abr.-89 2 10 SE/FA - -

Sep.-89 2 10 SE/FA - -

Appraisal Apr 90 1 10 FAthroughBoardapproval .Board 158approvalthrougheffectivenessSupervision Sep.-91 1 19 SE 1 1 CLC, PM

Mar.-92 1 19 SE 1 1 CLC, PMJul.-92 1 12 FA 1 1 CLCNov.-92 1 12 SE 2 1 CLC, PMJul.-93 1 15 SE 2 1 PMFeb.-94 2 6 E/FA PMNov.-94 1 10 SE 3 PM/AFMar.-95 1 10 LY CLCJul.-95 1 10 SE 3 PM/AFNov.-95 2 10 SE/EN 3 PMFeb.-96 1 5 SE PM

Oct.-96 1 12 SE 2 PM/AF/CLC

Apr 97 1 7 SE PMJul.-97 2 11 SE P

Supervision Dic 97 2 10 SEand ICR _TOTAL 315

SE = Sanitary Engineer AF = Availability of FundsEN Engineer PM = Project Manager PerformanceC = Consultant CLC = Compliance Legal CovenantsFA = Financial Analyst P = PrivatizationLY = Lawyer

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Annex ITarifas promedio de agua y p6rdidas

Year Volume Volume % Water Sewerage Total Average Exchan Average Averageproduced billed Losses Billed Billed Billed water ge Rate wster tarif water

(m3) (m3) (Bs) (Bs) (Bs) and 30 US$/m3 andsewerage June sewerage

tariff. Bs/USS tariff._______ _______ ______ ______ ~~~~~Bs/mn3 __ _ _ US$/m3

SAMAPA

1990 3.15

1991 48,639,946 37,703,304 22.48 30,286,240 9,014,139 39,300,378 1.04 3.75 0.21 0.28

1992 48,338,977 36,843,881 23.78 32,678,584 10,651,316 43,329,900 1.18 4.10 0.22 0.29

1993 45,223,720 39,471,703 12.72 34,388,036 14,229,288 48,617,324 1.23 4.48 0.19 0.27

1994 52,896,967 39,480,980 25.36 39,667,780 16,849,443 56,517,223 1.43 4.70 0.21 0.30

1995 57,743,383 44,804,556 22.41 42,683,093 18,151,839 60,83.4,932 1.36 4.94 0.19 0.27

1996 62,503,407 47,198,144 24.49 47,370,866 20,169,418 67,540,284 1.43 5.07 0.20 0.28

SAGUAPAC

1990 3.15

1991 3.75

1992 28,070,000 20,910,000 25.51 16,758,950 8,197,250 24,956,200 1.19 4.10 0.20 0.29

1993 31,091,000 22,731,000 26.89 20,395,130 9,786,250 30,181,380 1.33 4.48 0.20 0.30

1994 35,141,000 25,258,000 28.12 26,877,720 12,926,750 39,804,470 1.58 4.70 0.23 0.34

1995 36,540,000 27,021,000 26.05 29,585,750 13,970,680 43,556,430 1.61 4.94 0.22 0.33

1996 138,107,000 28,958,000 24.01 39,793,220 119,164,270 58,957,490 2.04 5.07 0.27 0.40

SEMAPA -

1990 14,058,450 9,262,230 34.12 5,509,500 2,374,200 7,883,7001 0.85 3.151 0.19 0.27

1991 16,430,240 10,553,980 35.76 7,328,900 3,172,000 10,500,900 0.99 3.75 0.19 0.27

1992 14,175,190 9,134,400 35.56 8,729,500 3,660,000 12,389,500 1.36 4.10 0.23 0.33

1993 16,746,960 9,687,850 42.15 10,428,000 4,457,700 14,885,700 1.54 4.48 0.24 0.34

1994 16,385,000 9,294,970 43.27 13,907,710 5,796,090 19,703,800 2.12 4.701 0.32 0.45

1995 19,459,750 10,248,920 47.33 15,306,350 6,786,090 22,092,440 2.16 4.94 0.30 0.44

1996 20,601,150 9,889,720 51.99 20,423,666 8,975,370 29,399,036 2.97 5.07 0.41 0.59

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Annex 2Ayuda Memoria de supervisi6n e ICR

Misi6n de Supervisi6n y ICR al Cr6dito 2187-BO, Proyecto de Rehabilitacion deAgua Potable y Alcantarillado en las Ciudades Mayores

(del 26 de noviembre al 5 de diciembre de 1997)

Ayuda Memoria

Introducci6n

1. Una misi6n del AIF conformada por el Sr. Menahem Libhaber, Ingeniero, oficial delproyecto, Sr. Herbert Farrer, consultor y Sr. Alberto Nogales de la misi6n residente del Banco enBolivia visit6 Bolivia durante los dias 26 de noviembre al 5 de diciembre de 1997, con el fin deevaluar el avance en las actividades del Credito 2187-BO y de iniciar la preparaci6n del informede cumplimiento de implementaci6n del proyecto, ICR. La misi6n fue acompafiada por el Dr.Vicente Aguilar, coordinador del proyecto por parte de FNDR (Fondo Nacional de DesarrolloRegional), por la Sefiora Moira Rollano, especialista en el area financiera y por el Sr. Juan CarlosRuiz, analista financiero, ambos del FNDR. La misi6n se reuni6 con el Ministro de Vivienda yServicios Basicos, con la Vice-Ministro de Inversi6n y Privatizaci6n, con la Alcaldesa de La Paz,con el Alcalde de Cochabamba, con la Directora de Financiamiento Externo del Ministerio deHacienda, con el Superintendente de Aguas, y con las gerencias del FNDR, de Aguas del IllimaniS .A. (Oa empresa de agua y alcantarillado de La Paz), de SEMAPA (la empresa de agua yalcantarillado de Cochabamba) y de SAGUAPAC (la empresa de agua y alcantarillado de SantaCruz). La misi6n agradece a todas las personas entrevistadas y a todas las instituciones visitadasla hospitalidad y la cooperaci6n brindadas. Esta ayuda memoria resume los principales hallazgosde la visita y los acuerdos alcanzados con las autoridades de las instituciones citadas.

SAMAPA (La Paz)

2. Desde el I de Agosto de 1997 la empresa Aguas del Illimani S.A-, asumi6 la concesion delos servicios de agua potable y alcantarillado de la Ciudad de La Paz, a trav6s de un contrato deconcesi6n de 30 afios. La Misi6n observ6 muchos cambios positivos en la empresa en: (i)organizacion administrativa; (ii) aumento de eficiencia; (iii) mejoramiento de atenci6n al publico; y(iv) especialmente en la ejecuci6n de las obras del proyecto. La Mision considera que laincorporaci6n del sector privado en la prestaci6n de los servicios de agua potable y alcantarillado,a traves de un contrato de gesti6n e inversi6n, es un logro impresionante a nivel latinoamericano,el cual garantizari la sostenibilidad de los servicios para los pr6ximos treinta aflos. Esta reformarepresenta un desarrollo institucional con el cual se logran los objetivos de mejoramientoinstitucional en el componente de La Paz.

3. El avance en la ejecucion de las obras del componente de La Paz alcanza actualmente unvalor de 94%, y el porcentaje de los desembolsos de este componente alcanza un valor de 97%.Asimismo, todos los demas fondos del credito ya estin comprometidos. Durante la misi6n se

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actualiz6 el programa de ejecuci6n de las obras del componente de La Paz, el cual se presenta enel Anexo 1. Segun este cronograma la ejecuci6n de las obras del proyecto concluira el 15 defebrero de 1998 y se inaugurarin el 15 de marzo de 1998.

4. Al terminar las obras del proyecto, la cobertura del servicio de agua alcanza 88% y la delservicio de alcantarillado alcanza 55% (comparado con 80.76% en agua potable y 65.64% paraalcantarillado en el SAR para la finalizaci6n del proyecto). En agua potable la meta fue superadapero en alcantarillado sanitario qued6 por debajo. A continuacion se presentan varios indicadoresde desempefno y financieros alcanzados por SAMAPA durante el afno 1996 y parte de 1997. Losindicadores alcanzados a diciembre de 1997 (valores auditados) son los siguientes: la razon detrabajo alcanz6 un valor de 0.43, que coincide con la estimaci6n del SAR para la finalizacion delproyecto; la eficiencia de cobro ha subido y alcanz6 un valor excelente de 110.6%; el niumero deempleados por mil conexiones de agua baj6 de 5.56 en 1994 a un valor de 4.43, alcanzado unvalor mucho mejor a los objetivos del SAR (7.86 para la finalizaci6n del proyecto), y el porcentajede los costos de personal en relaci6n a los costos operacionales se encuentra en 65.4% lo cual esun valor elevado. El indice de agua no conatabilizada, ANC, alcanz6 un valor de 25.65%, que seencuentra alrededor de los objetivos del SAR para la finalizaci6n del proyecto. Para julio de 1997estos indicadores se mantienen en forma siimilar, salvo el ANC que subi6 a 32.73%. La misi6nespera que bajo la administraci6n privada ise mejore el desempefno de la empresa y se obtengan lasinversiones necesarias para extender los sistemas de acueducto y alcantarillado.

5. En resumen, los logros del componente de La Paz son: (i) conclusion de todas las obrasdel proyecto, beneficiando a una poblaci6n directa de 35.000 personas e indirecta de 289.000,para un total de 324.000; y (ii) a trav6s de la concesi6n se llev6 a cabo una reforma muyimportante en el manejo del sector agua y saneamiento en La Paz. La mision considera que elcomponente de La Paz fue concluido en forma muy satisfactoria. No obstante, el 6xito se debe ala implementaci6n de la reforma y al buen desempefno de la empresa concesionaria, que logr6concluir las obras dentro del plazo del Acuierdo de Credito, lo que no hubiera sido posible lograrde ninguna manera con la anterior administraci6n de SAMAPA, cuyo desempefno fue muy debildurante los siete afnos que administr6 el proyecto.

SEMAPA (Cochabamba)

6. Las fuentes de abastecimiento de agua para uso urbano de Cochabamba son escasas. Pararesolver el problema de abastecimiento urbano para Cochabamba, seri necesario encarar lassiguientes acciones: (i) desarrollar una nueva fuente de abastecimiento superficial; y (ii) ilevar acabo una transformaci6n institucional de SEMAPA a traves de la participacion del sector privado(PSP) para mejorar su desempeflo y fomenitar la inversi6n privada. Ambas actividades deben serefectuadas en forma simultanea, es decir que no sera suficiente ejecutar solo una de estasactividades, ya que las mismas se encuentran intimamente interrelacionadas. No existiri laposibilidad de reformar SEMAPA sin asegurar la disponibilidad del recurso agua, como por otrolado no sera posible encarar un costoso proyecto de desarrollo de una nueva fuente, sin asegurarla expansi6n de las redes y de esta manera satisfacer la demanda del recurso.

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7. El Gobierno anterior intent6 lievar a cabo la privatizaci6n de SEMAPA en forma similar ala de SAMAPA. El proceso de licitaci6n para la concesi6n, cuyas ofertas se esperaba recibir el 17de julio de 1997, fue interrumpido por un recurso legal planteado por la Alcaldia de Cochabamba,aceptado por la Corte Suprema. En agosto de 1997 el nuevo Gobierno tom6 posesi6n y comoresultado, la mayoria del personal de gerencia y de la administraci6n superior de SEMAPA fuereemplazado como consecuencia de una muy fuerte ingerencia politica, con lo que se perdi6 lacapacitaci6n provista por el proyecto y la continuidad gerencial debilitando aun mas la empresa.Ademas, teniendo en cuenta los indicadores que se presentan en el parrafo 10 adelante, no sepuede afirmar que se lograron los objetivos de desarrollo institucional del proyecto. La Misi6nconsidera que si no se lleva a cabo en el futuro cercano la privatizaci6n de SEMAPAsimultaneamente con el desarrollo de la nueva fuente, los servicios de agua potable y dealcantarillado sanitario desmejoraran como resultado del deterioro financiero de SEMAPA. Deacuerdo con la informaci6n suministrada a la misi6n por los funcionarios entrevistados, elGobierno pretende iniciar en breve la preparaci6n de un nuevo proceso de concesi6n deSEMAPA.

8. De acuerdo con la informaci6n suministrada y lo comprobado en las visitas de campo, lasobras del componente de SEMAPA convenidas durante la ejecuci6n del proyecto, se concluiranen su totalidad el 15 de diciembre de 1997. Se debe anotar que las obras concluidas nocorresponden al total del proyecto original. Las obras de perforaci6n de pozos profundos enVinto, aducciones y planta de tratamiento, no se ejecutaron por oposici6n de los agricultores a laperforaci6n de pozos; y la rehabilitaci6n de la Galeria de Chungara no se llev6 a cabo por la bajarentabilidad econ6mica de este componente que rendiria un caudal bajo. Como resultado de loanterior, en acuerdo con el Banco, el caudal a incrementar por el proyecto baj6 de 640 litros porsegundo a uinicamente 220 litros por segundo, reduciendose a un 35% de lo programado en elAcuerdo de Credito. Asimismo las obras realizadas corresponden a un 77% de lo inicialmenteprogramado en el Acuerdo de Credito.

9. El porcentaje de los desembolsos del componente de SEMAPA alcanza un valor de 95%.Los demas fondos del proyecto ya estan comprometidos y seran desembolsados antes de la fechade cierre (31 de diciembre de 1997).

10. Desde julio de 1995, SEMAPA ha iniciado una serie de actividades destinadas a ejecutarel plan de acci6n acordado con la misi6n de julio de 1995, y a implementar el programa defortalecimiento institucional (PROFISE) desarrollado en el marco del proyecto. Al terminar lasobras del proyecto, la cobertura del servicio de agua alcanza 56% y la del servicio dealcantarillado alcanza 52%, siendo la de agua potable aun mucho menor que la meta del proyecto(79.55% en agua potable y 56.15% para alcantarillado en el SAR para la finalizaci6n delproyecto). A continuacion se presentan varios indicadores de desempeflo y financierosalcanzados durante el afio 1996 y parte de 1997. Los indicadores alcanzados en 1996 con valoresauditados son los siguientes: la raz6n de trabajo alcanz6 un valor de 0.74, lo que representa unmejoramiento con relacion a los valores de aflos anteriores pero esta todavia bastante lejos paraalcanzar los objetivos del SAR (0.54 para la finalizaci6n del proyecto). La eficiencia de cobrobaj6 a 70%. El numero de empleados por mil conexiones de agua baj6 de 8.5 en 1994 a un valorde 6.45 y ha alcanzado un valor mejor a los objetivos del SAR (8.37 para la finalizaci6n del

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proyecto). El porcentaje de los costos de personal con relaci6n a los costos operacionales baj6 de59% en 1994, a un valor de 43.9%. No se ha detectado todavia una reduccion del indice de aguano contabilizada, que en 1996 se incremento a un valor de 54%, lo que representa un valorelevado que demuestra la ineficiencia operacional de la empresa. Para agosto de 1997 estosvalores se mantienen en forma similar salvo la eficiencia de cobro que disminuyo a 61%, lo querepresenta un valor muy bajo y demuestra la ineficiencia financiera de la empresa. Ademas, esteindicador ha venido bajando durante los ulltimos anios, lo que implica un deterioro en eldesempeflo de la empresa. Ademas el porcentaje de los costos de personal con relaci6n a loscostos operacionales aument6 a 48.9%. La misi6n considera que solo a traves de participaci6n delsector privado en la gesti6n se puede alcanzar un mejoramiento sostenible en el desempenlo de laempresa.

11. En resumen, en el componente de Cochabamba se logr6 la conclusi6n de todas las obrasacordadas durante la ejecuci6n del proyecto, beneficiando a una poblaci6n de 53,074 personas, loque representa un valor muy por debajo (le lo estimado en el SAR de 300,000 habitantes para laterminaci6n del proyecto. Ademis no se puede afirmar que se lograron los objetivos dedesarrollo institucional de SEMAPA y la sostenibilidad futura de la empresa dependera de laculminaci6n exitosa del proceso de concesi6n.

SAGUAPAC (Santa Cruz)

12. El desempefio de SAGUAPAC fuie muy satisfactorio a lo largo de la ejecuci6n delproyecto. A la fecha se ha ejecutado el 100% de las obras del proyecto originalmente defmido, ademasse ejecut6 el 100% de las obras adicionales, que representan un incremento de obras de 25%.Asimismo, se alcanz6 un porcentaje de desembolsos de 96% y el resto esta comprometido y enproceso de desembolso.

13. Al terminar las obras del proyecto, la cobertura del servicio de agua alcanza 79.85% y ladel servicio de alcantarillado alcanza 33.85%, los cuales son cercanos a las metas del proyecto(78.5% en agua potable y 39% para alcaitarillado en el SAR para la finalizaci6n del proyecto). Acontinuaci6n se presentan varios indicadores de desempefio y financieros alcanzados durante elafho 1996 y parte de 1997. Los indicadores alcanzados en 1996 con valores auditados son lossiguientes: el indice de agua no contabilizada (ANC) fue de 24%, lo cual es mejor que la meta de25% del SAR. El nuimero de empleados por mil conexiones de agua baj6 de un valor de 8.5 alinicio del proyecto, a un valor de 4.26, lo cual es mejor que la meta de 6.06 del SAR para el finaldel proyecto. La raz6n de trabajo alcanzo un valor de 0.76, lo cual todavia no alcanza la meta de0.64 pero fue mejorando continuamente con relaci6n a los valores de los afnos anteriores. Elporcentaje de los costos de personal con relaci6n a los costos operacionales alcanz6 un valor de59.78% y fue mejorando continuamente durante la ejecuci6n del proyecto y la eficiencia de cobroalcanz6 un valor alto de 96%. Para septiembre de 1997 estos indicadores han mejorado: el ANCes de 23%, el numero de empleados por jmil conexiones es de 4.04 y la raz6n de trabajo es de0.72.

14. En resumen, en el componente de Santa Cruz se logr6 la conclusion de todas las obrasacordadas durante la ejecuci6n del proyecto (125% de las obras originales), que beneficiaran a

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una poblaci6n de 225,687 personas en agua potable y a una poblacion de 46,736 personas enalcantarillado sanitario. Asimismo se alcanzaron todos los logros del programa de desarrolloinstitucional, concluyendo el proyecto en forma muy satisfactoria. No obstante, la baja coberturade alcantarillado sanitario genera problemas de salud publica, contaminaci6n ambiental ycontaminaci6n del acuifero que sirve como unica fuente de abastecimiento de agua potable. Por lotanto la sostenibilidad del proyecto depende de la accesibilidad de la empresa a fondos parainversi6n en ampliaci6n del sistema de alcantarillado sanitario.

FiNDR (Coimponente D)

15. Ya se ha desembolsado el 98% de los fondos del componente D y el resto estacomprometido.

16. El trabajo de diseflo de los sistemas de abastecimiento de agua y alcantarillado bajo elcomponente PRORPAAL, preparado por dos empresas consultoras (Galindo, encargada dedisefnar 46 proyectos y Contegral, encargada de diseflar 54 proyectos), ya fue concluido y losdiseinios recibidos a satisfacci6n por DINASBA.

17. El manejo de los recursos del credito fue satisfactorio. Por otra parte no se logr6 que el FNDRasurniera el liderazgo del sector, sin embargo a traves de otros mecanismos la Superintendencia deAguas, creada en 1994 como resultado de la ley SIRESE, esta logrando este liderazgo.

Evaluaci6n General del Estado del Proyecto

18. En terminos practicos, se logr6 completar las obras de los componentes de SAMAPA ySAGUAPAC. Asimismo se completaron las obras convenidas del componente de SEMAPA, las cualesrepresentan solo el 77% de las obras definidas en el Acuerdo de Credito. Ademas, se llev6 a cabo unareforna institucional inportante en el sector de agua en La Paz, lo que asegura la sostenibilidad de losservicios de agua y alcantarillado en esta ciudad. El desempefno institucional de SAGUAPAC en SantaCruz es tambien muy satisfactorio. No obstante, en el componente de Cochabamba no se puedeafirmar que se lograron los objetivos de desarrollo institucional de SEMAPA y la sostenibilidadfutura de la empresa dependeri de la culninaci6n exitosa del proceso de concesion que elGobiemo pretende llevar a cabo. Como resultado de lo anterior, la misi6n considera que teniendoen cuenta los resultados altamente satisfactorios en los componentes de SAMAPA y SAGUAPACy los logros parciales en las obras del componente de SEMAPA, en conjunto se logr6 terminar elproyecto en forma satisfactoria.

Preparaci6n del Informe de Cumplimiento del Proyecto

19. Durante las reuniones con las tres empresas (Aguas de llimnani S.A., SEMAPAySAGUAPAC) y con el FNDR, la misi6n explic6 a cada una los procedimientos de la preparaci6n delinforme de cumpliniento de la implementaci6n del proyecto y el cronograma respectivo. Asi mismo, laniision dej6 en cada empresa un documento de Terminos de Referencia para su contribuci6n a lapreparaci6n del ICR y para la elaboraci6n de los planes operacionales correspondientes, lo cual seadjunta como Apendice 1. Durante la misi6n, los miembros de la misma recopilaron la mayoria de la

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infonmaci6n necesaria para la elaboraci6n del ICR y recibieron la plena cooperacion de las cuatroempresas. La misi6n indic6 que al inicio de febrero de 1998 se espera enviar a cada empresa unborrador del ICR y que se espera recibir, antes del fin de febrero, los comentarios y la opini6n escritade cada una sobre el ICR, junto con el matenal adicional definido en el Apendice 1. Los representantesde las cuatro ernpresas ofrecieron elaborar er la fornma solicitada su contnbuci6n al ICR y secomprometieron a suministrar la misma en la fecha convenida.

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Por el Banco Mundial Por FNDR

Menahem Libhaber Sergio Arenas M., GerenteOficial del Proyecto General

Por AGUAS DEL ILLIMANI S.A.

Alain Carbonel, GerenteGeneral

Por SEMAPA

Arturo Coca S., GerenteGeneral

Por SAGUAPAC

Carlos Medrano, GerenteGeneral

Santa Cruz de la Sierra, Bolivia, 5 de diciembre de 1997.

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Apendix 1, Annex 2

TERMINOS DE REFERENCIA PARA LA CONTRIBUCION DE LAS EMPRESASBENEFICIARIAS DEL CREDrTO 21l87 A LA ELABORACI6N DEL INFORME DECUMPLIMlENTO DE LA IMPLENMENTACION (ICR) DEL PROYECTO Y PLAN

PARA LA FASE DE OPERACION

Asociaci6n Internacional de Desarrollo - Credito No. 2187-BO

Antecedentes

Las condiciones generales aplicables al crdiito establecen en la Seccion 9.06: Registros eInformes, el requerimiento de que las empresas beneficiarias del credito, presenten a laAsociaci6n, en un periodo no mayor de seis meses despues de la Fecha de Cierre (31 de diciembrepara el Credito 2187-BO), u otra si asi se conviniere, un informe con el contenido y alcance que laAsociaci6n razonablemente solicite, sobre la ejecuci6n y operaci6n inicial del Proyecto, sus costosy beneficios derivados o a ser derivados del proyecto, el desempefno del prestatario y de laAsociacion sobre sus obligaciones respectivas bajo los contratos del credito.

Asimismo cada empresa debe preparar simulltaneamente con el Informe de Cierre, un Plan para laFase de Operaci6n, incluyendo indicadores que le permitan monitorear las operaciones.

Estos terminos de referencia resumen el contenido y alcance del informe de cierre de proyecto ydel plan operacional que debe ser preparado por las empresas Saguapac, Semapa, Samapa yFNDR.

Informe de Cumplimiento de la Tmplementaci6n del Proyecto

El informe de cierre de proyecto debera contener, sin estar limitado a ello, los aspectos siguientes:

* Objetivos iniciales y grado de cumplimiento de estos objetivos: fisicos, financieros,institucionales, sociales, etc.

* Grado de cumplimiento de los cronogramas iniciales del proyecto y factores quemayormente afectaron la implementaci6n del proyecto: gubemamentales,institucionales, de la Asociaci6n.

* Sostenibilidad del proyecto en sus aspectos fisicos (operaci6n y mantenimiento);institucionales (continuidad); impacto social.

* Performance de la Asociaci6n en las fases del proyecto: identificaci6n, asistencia en lapreparaci6n, evaluaci6n y supervisi6n.

* Performance del prestatario en las etapas anteriormente indicadas.

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* Evaluaci6n de los resultados: alcance de objetivos y sostenibilidad de los logros.

* Operaciones futuras que daran continuidad al proceso, maximizaci6n de los beneficiosdel proyecto, indicadores para monitorear y evaluar futuras operaciones.

* Opini6n sobre los consultores y contratistas del proyecto.

* Lecciones claves aprendidas en el proceso de implementaci6n del proyecto.

* Costos iniciales y finales de os componentes del proyecto.

* Anexos

* Proyecciones financieras en formato LCPWS, 90/97 real y 98/2005proyectado.

* Hoja de indicadores (SAR paginas 79/80/81 segun corresponda para cadaempresa), real para los afnos 90/97.

• Descripci6n del Plan de Inversiones 98/2005.

Plan para la Fase de Operaci6n

Conjuntamente con el Informe de Cierre del Proyecto la Asociaci6n requiere de un Plan para laFase de Operaci6n del Proyecto encaminado a conservar las obras y a maximizar los beneficiosdel proyecto, el cual debera contener:

- Un plan de operaci6n y de mantenimiento encaminado a la conservacion y explotaci6nadecuados de las obras del proyecto, mecanismos de financiamiento para su ejecuci6n,monitoreo y control, indicando las acciones a tomar que fueren necesarias para lasostenibilidad del programa.

* Un plan de acciones a seguir derivadas de la ejecuci6n del proyecto de ordeninstitucional, tecnico, comercial, administrativo, legal, etc., seg4n corresponda.

* Un conjunto de indicadores que permitan monitorear los planes arriba indicados con lametodologia de calculo y los valores actuales, dentro de los cuales se incluiran los quese han venido manejando a lo largo de la implementaci6n del proyecto.

Fecha de Entrega de los Documentos por las E:mpresas

El Banco espera enviar a cada empresa el borrador del ICR al inicio de febrero de 1998 y esperarecibir, antes del fin de febrero de 1998, los comentarios y la opini6n escrita de cada empresa sobre elICR, junto con el material adicional definido en estos Terninos de Referencia. El documento final

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preparado por cada empresa no deberi tener mis de diez (10) paginas tamafio carta, mas losanexos.

Documentos Adicionales a prepara por el FNDR

* Indicadores incluidos en el documento preparado en mayo 97 por el Lic. Juan CarlosRuiz y remitido al consultor Ing. Herbert Farrer, incluyendo ademas todos losindicadores del SAR paginas 79/80/81 para cada empresa.

* Opinion sobre la ejecuci6n del credito: de su propia gesti6n; de la gesti6n del Banco,lecciones aprendidas.

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Annex 3The Contribution of KfW to the ICR

Telefax directo de la I gj KrgditanstaltDivision Paises Andinos KiWff fiur Wiederaufbau

.f~9) 74~1-3SO5 Posifach 11 11 41,Sq) 7411-3605 Bo0045 franxruf am main

officer in cenrge. Mr. WeridtichSeptember 29, 1997 ourtro.: rcyr

eAtenrion: 2580date: September 29, 1997

The world BankLA3EUAtt. Menahem Libhaber

Washington, D.C. USA

Lib. German Financial cooperation with BoliviaSewerage El Alto project - 90 65 319

Dear Sirs:

Regarding your intention to prepare the Implementation Completion Report (ICR), we have toinform you that the project "Sewerage El Alto" - co-financed with a donation of DM23.000.000from the German official cooperation budget - is currently about three years behind schedule(compared to the schedule established at time of appraisal). The infrastructure will not be finishedbefore the second half of 1998. This is due to various delays:

* delayed signing of the contract for consultant services;

* delayed public tenders, caused among other things by the requirement to invoiceprocurement agents in the process;

* delayed start of works for the waist water treatment plant Puchucollo due to legalproblems with the purchase of the real estate.

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With the project still in plain implementation, we think the preparation of a implementationcompletion report would be premature. Thus, we are not able to give you the requiredperformance judgments with respect to the achievement of project objectives, implementationrecord and sustainability of operation and maintenance.

Additionally, any judgments on these issues would lack a safe basis, since just some weeks agothe new implementation agency Aguas del Illimani S.A. has taken responsibility for the rest ofimplementation of the project as well as for operation and maintenance. Donors may first want togain some experience with the new institution.

A KfW mission traveling to Bolivia for a progress control of the Sewerage El Alto project(among other projects to visit), will have the first contact with Aguas del Illimani S.A. in La Pazon October 1st, 1997. We will provide you with information about the main results of thismission. Since our mission is in Bolivia now, we would like to ask for your understanding thatKfW will not join the world Bank mission scheduled for early December. However, we areinterested in knowing the results of your mission.

Yours faithfullu,KREDITANSTALT FUR WIEDERAUFBAU

Braun Dr. Strangrmannr

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Annex 4A

IDA's Position Regarding the Improvement of Water Supply to Cochabamba

Executive Summary

Introduction

1. Water resources in the Cochabamba region are scarce. In addition, the performance ofSEMAPA, the water and sewerage company of Cochabamba, has not been satisfactory and itdoes not have access to the financial resources required to ensure the investments needed for thewater sector. Consequently, only 60% of the city's population is connected to the water supplynetwork and receives a non-continuous supply of about four hours a day. Groundwater ispumped for urban and agricultural supply at a higher rate than the natural recharge. This resultsin an unsustainable situation which requires the urgent development of a new surface water supplysource.

2. The previous Government decided to resolve the water problem of Cochabamba by: (a)selecting the Corani project as the new water supply source; and (b) incorporating the privatesector in the provision of the water and sewerage services in the city through a concession ofSEMAPA. The SEMAPA concession process has been prepared with the assistance of the Bank,based on the assumption that Corani will be the water supply source. In parallel, the water supplycontract was negotiated with the Corani company, a privately owned company which is ready toconstruct the project with private funding and recover the investment through a 30 years contractof water sale to the SEMAPA concessionaire. The bidding process for the SEMAPA concessionwas initiated, but has been derailed by the Mayor of Cochabamba, who filed against the process apetition which was accepted by the Supreme Court. The Mayor and other local organizationsobject to the Corani project and support another water supply alternative, the Misicuni project.They have no objection, however, to the concept of the concession of SEMAPA.

3. In order to be able to achieve progress in resolving the water sector crisis in Cochabamba,a decision regarding the appropriate new water supply source (Corani or Misicuni) has to betaken. To our best knowledge, a comparison between these two project has not been carried outby independent competent consultants. An IDA mission which visited Cochabamba during July8-9, 1997, has concluded, on the basis of the information submitted to it, that the Corani Projectis the better alternative for water supply to Cochabamba. This documents sets out the rationalebehind that conclusion.

The Available Information about the Corani and Misicuni Projects

Corani

4. The estimated investment in the first phase of the Corani project, for supply of up to 4m3/s, is US$ 70 million. Most of the investment is required for construction of a 20 km. tunnel

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(with a capacity of 10 m3/s). The Coranri reservoir has been constructed 30 years ago as part of ahydroelectric power project, and can serve also for the purpose of water supply to Cochabamnba.The Corani company, a privately owned power company, is willing to construct the project withprivate funding, without any public invesitment or subsidy. A 30 years water sale contractsupported by adequate guaranties has already been negotiated. The price of water for urban uses,supplied by Corani to satisfy a demand curve defined by SEMAPA, is 0.216 US$/m3 for the firstfour years of supply and 0.235 US$/m3 thereafter. The price of water for irrigation is 0.08US$/m3. There is no obligation on part of SEMAPA to buy water for irrigation and the purchaseof water for irrigation or lack of it has no bearing on the price of water for urban use. Theavailable flow of water for irrigation is the difference between 4 m3/s and flow consumed forurban uses. The bidding documents for the concession of SEMAPA, with Corani as the watersupply source, are available and ready for re-initiation of the bidding process.

Misicuni

5. Two sets of economic and financiial data are available in regard to the Misicuni project: (i)data prepared by the Misicuni company, a public company responsible for design andimplementation of the project; and (ii) data derived from an unsolicited proposal of a privatecompany, the consortium ASTALDI-ICE, to construct the project. We consider that theASTALDI-ICE proposal represents a more realistic approach to the implementation of theMisicuni project and therefore have used the data provided in this proposal as representative ofthe Misicuni project. It should, however, be emphasized that the final conclusion of thecomparison between the two project would not be different, had the data provided by theMisicuni company been used for the comTLparison.

6. For construction of the first phase of the Misicuni project, for supply of 3.9 m3/s under aBOT contract for a period of 40 years, ASTALDI-ICE requires a public subsidy of between US $75 -85 million (the proposal specifies a sum of US$ 70 to 80 million, without cost of land andrights of way, which we estimate in an additional US$ 5 million) and comnmits to invest anadditional amount of US$ 100 million of its own resources. The total estimated investment in theMisicuni project amounts therefore to somewhere between US$ 175 and 185 million. Accordingto the proposal, the price of water for urban uses, supplied to satisfy a demand curve defined bySEMAPA, will be 0.25 US$/m3 and the price of water for irrigation will be between 0.08-1.0US$/m3. It requires that all the water not consumed for urban use will be consumed forirrigation. If the farmers will not purchase the water available for irrigation, the price of water forurban supply will increase so as to ensure that the revenues of ASTALDI-ICE reach theforecasted value.

Comparison of the Corani and Misicuni Projects

7. Economic aspects: The supporters of the Misicuni project justify their support toimplement a higher investment project by claiming that it also has higher benefits. We considerthat the benefits of both projects are equivalent. According to the information provided to us,both projects have a potential to supply equivalent amounts of water. Once a certain amount ofwater is conveyed to the Cochabamba valley, the benefits which can be generated from it are

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independent of its origin, i.e., 4 m3/s of water from Corani can generate the same benefits as 4m3/s of water from Misicuni. Also, if in the future, the consumption will be higher than 4 m3/s,each of the projects has the potential to supply the additional amount required. For the purposeof comparison we also assume that the

operation and maintenance costs of both projects are similar (although in fact we estimate that theO&M cost of the Misicuni project will be higher). Considering the above, the favorable projectfrom an economic point of view is the lower investment project, which is clearly the Coraniproject which requires an investment of US$ 70 million, while Misicuni requires an investment ofabout US$ 185 million.

8. Financial aspects: According to the Corani proposal, the entire Corani project will befinanced by the private sector, while according to the ASTALDI-ICE proposal, a public sectorsubsidy of about US$ 85 million is required for the Misicuni project. Although US$ 32 million ofpublic funds have been earmarked for investment in the Misicuni project, the rest of the subsidyhas not yet been secured and it is doubtful that the Government would be able to provide therequired subsidy funds, so the entire financing plan of the Misicuni project is stili quite shaky.Moreover, even with such a high level of subsidy, the price of the Misicuni water is still higherthan that of the Corani water. The Corani project is therefore clearly favorable also from thefinancial standpoint.

9. Implementation period: The Corani company is ready to commit to implement theproject and supply the water within 3.25 years. This commitment is supported by a US$ 10million guarantee and penalties of US$ 20,000 for each day of delay. The bidding process for theSEMAPA concession, which forms part of the package, can be initiated immediately andcompleted within 2-3 months. The implementation period of the Misicuni project is a source ofcontroversy. Previously retained consulting firms estimated the implementation period as 5 years.ASTALDI-ICE proposes to construct the project within 3.5 years. We consider that thisproposal is overly optimistic and that when having to sign a contract supported by guarantees andpenalties for delays, the ASALDI-ICE proposed construction period will be more than 3.5 years.But even considering a construction period of 3,5 years, an additional period of about two yearswill be necessary to prepare the BOT process for the Misicuni project and for the SEMAPAconcession process based on the Misicuni project (the preparation of both processes has not yetstarted). So in the best case scenario, the Misicuni implementation period is 5.5 years, whileaccording to a realistic scenario, a period of 7 years would be required before the Misicuni watercould be conveyed to Cochabamba. Considering the water crisis in Cochabamba, the advantageof Corani is significant, since it will be difficult to keep people without additional water foranother 7 years, and on the other hand, the continuation of overdrawing of groundwater for sucha long period will result in dwindling of the existing resources.

10. Flexibility: The willingness of the agricultural sector to pay the high price required forirrigation water is yet unknown. The financial scheme of the Corani project does not include saleof water for irrigation. If there will be no demand of water for irrigation at the proposed price,this water can be used for generation of energy in the Corani and Santa Isabel hydropower plants.On the other hand, the financial scheme of the Misicuni project is based on sale of water for

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irrigation at a price of 0.08-0.1 US$/m3 and if the agricultural sector will not be willing to paythat price, the price of water for the urban sector will be increased. In this respect Corani is amore flexible project.

11. Risks: The level of risk associated with Misicuni is much higher than that of Corani. TheCorani contract has been negotiated and is ready for signature with supporting guarantees. Thefinancial package of the SEMAPA concession based on Corani as the supply source was found tobe viable and six companies have bought the bidding documents and demonstrated interest in thedeal. The Misicuni deal has not yet been prepared, the financing plan does not exist, it dependson a high subsidy which has not yet been secured, the construction and cost overruns risks arehigher for a project of US$ 185 million than for a project of US$ 70 million, and the entireMisicuni deal has not yet been put to the test of the private sector. There is a risk that after twoyears of preparation, the potential concessionaires of SEMAPA will find the Misicuni project tobe too risky. In addition, because of its dependency on sale of water for irrigation and theuncertainty regarding the willingness of the farmers to pay the high price of 0.08-0.1 US$/m3 forirrigation water, the Misicuni project presents the risk of increased price of water for the urbansector.

12. Environmental Aspects: Since thLe Corani reservoir has already been constructed 30years ago, the potential negative environmental impact of the Corani project is much smaller thanthat of the Misicuni project, under which a big reservoir still has to be constructed and rivers needto be diverted from their natural course.

Conclusion and Recommendations

13. Considering the numerous advantages of the Corani project, IDA considers that it is thefavorable project for supply of water to the Cochabamba region. The Corani project can generatethe same benefits as the Misicuni project, while requiring a much lower investment. It can betotally financed by the private sector and does not require any subsidies, produces water at alower price, is more flexible, the risk level associated with it is lower, its potential negativeenvironmental impact is lower and it can supply water within 3.25 years, in comparison to aperiod of 7 years required by the Misicuni project (if a financing plan for Misicuni, including thesubsidy, is secured and everything goes well).

14. The existing opportunity for constructing the Corani project with private funding will onlybe available for a short time, since the Corani company will not wait much longer and will investelsewhere the funds earmarked for the Cochabamba project. In our opinion, this opportunityshould not be missed. Even if the local auathorities consider that the Misicuni project is favorable(although we fail to see why), they must admit that Corani also represents an adequate solutionfor resolving the water crisis of Cochabamba, and sometimes it is necessary to settle for thesecond best option.

15. In addition, IDA recommends to use the funds available in the account "Water forCochabamba"', for the amount of US$ 32 million, either for extending the water supply and

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sewerage networks in the city, with the resulting effect of reduction in the water tariff for urbanconsumers, or for the development of irrigation systems in the region.

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Annex 4B

La posicion del Banco Mundial sobre la alternativa mis viable para el abastecimiento deagua para la ciudad de Cochabamba (Documento principal)

kgosto - 1997

INTRODUCCION

1. Durante una inision del Banco Mundial en Bolivia, efectuada durante los dias 8 y 9 dejulio de 1997, para participar en el seminaiio "Agua para Cochabamba", la Sra. IsabelleGirardot-Berg, Representante del Banco en Bolivia, aclar6, durante una conferencia de prensacelebrada el 9 de julio de 1997, que, en base a la informaci6n disponible hasta ese momento, lainstitucion que ella representa consideraba que el proyecto Corani constitula la soluci6n masviable para el abastecimiento de agua para Cochabamba.

2. El presente documento explica los motivos por los que el Banco considera que el proyectoCorani se presenta como la soluci6n mas viable para el abastecimiento de agua para Cochabamba.Se debe destacar que esta posici6n del Banco esta basada en la informaci6n disponible al

momento de generar este documento, funclamentalmente la informaci6n presentada a la misi6n delBanco Mundial por los responsables de ambos proyectos, durante el desarrollo del referidoseminario.

LA PROBLEMATICA DEL ABASTECIMIENTO DE AGUA A COCHABAMBA

3. Las fuentes de abastecimiento de agua para uso urbano de Cochabamba son escasas. Alrespecto existen solo tres fuentes potenciales que se podrian utilizar, las que corresponden a lasfbentes superficiales de Misicuni y Corani por un lado, y las fuentes subterrineas del Valle deCochabamba por otro. La situaci6n actual de sobre explotaci6n del acuifero, tal cual lo sefnaladoen el informe del consultor Dr. Abraham M4ercado, hace que dicha alternativa no sea sostenible,siendo necesario desarrollar urgentemente alguna de las dos alternativas para abastecimiento deagua superficial a la ciudad de Cochabamba y eventualmente a sus areas circundantes, compuestaspor un conjunto de municipalidades adyacentes a la misma.

4. Por otra parte, la empresa SEMAPA no dispone de los fondos necesarios para invertir enuna fuerte expansi6n de las redes de sumilnistro de agua potable y de alcantarillado asi como en lasinstalaciones adicionales necesarias. Como consecuencia, solo alrededor del 60% de la poblaci6nde la ciudad esta conectada a la red de aguia potable, recibiendo en muchos casos un serviciodiscontinuo y de deficiente calidad.

5. El Banco entiende que, adicionalmente a los problemas de escasez de agua potable paraabastecimiento urbano principalmente para consumo humano, la regi6n de Cochabamba necesitade agua para riego con el objeto de mantener y expandir su area cultivada, la que, de otra manera,se veria irremediablemente reducida en un futuro mediato. Sin embargo, el Banco considera que

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el problema de escasez de agua potable para uso humano debe ser resuelto con prioridad,en relaci6n con la escasez de agua para uso agricola. Para resolver el problema deabastecimiento urbano, sera necesario encarar las siguientes acciones: (i) desarrollar una de lasnuevas fuentes de abastecimiento superficial; y (ii) modificar la estructura institucional deSEMAPA para mejorar su desempen'o y fomentar la inversion privada. Ambas actividades debenser efectuadas en forma simultanea, es decir que no seri suficiente ejecutar solo una de estasactividades, ya que las mismas se encuentran intimamente interrelacionadas. No existiri laposibilidad de reestructurar SEMAPA sin asegurar la disponibilidad del recurso agua, como porotro lado no sera posible encarar un costoso proyecto de desarrollo de una nueva fuente, sinasegurar la expansion de las redes y de esta manera la demanda necesaria del recurso. En lo quese refiere a la actividad (ii), existe consenso en sentido que se debe incorporar al sector privado enla provisi6n de los servicios de agua y alcantarillado a traves de un modelo de concesi6n. Enrelacion a la actividad (i), el desarrollo de una nueva fuente, no existe consenso sobre el tema,sino mas bien una vieja disputa entre los partidarios de los dos proyectos, Corani y Misicuni.Siendo que ambas actividades estan intimamente relacionadas, no se puede firmar un contratopara la concesi6n de SEMAPA antes de que se determine la nueva fuente de abastecimientode agua, ya que cualquier empresa privada interesada en participar en la licitaci6n de la concesi6nde SEMAPA, que ademas debe comprometerse a abastecer el area concesionada con agua ensuficiente cantidad y calidad por un periodo de 30 anios, debe saber, antes de poder preparar supropuesta, cual es la fuente en cuesti6n, el precio que debera pagar para el agua cruda de lamisma fuente y el dia a partir del cual el agua estara disponible, con el objeto de estimar suscostos y plan de inversiones.

6. Para poder avanzar con el programa global de abastecimiento de agua para Cochabamba,es necesario tomar la decisi6n lo antes posible, sobre la fuente de agua superficial a utilizarse: elproyecto Corani o el proyecto Misicuni. Esta decisi6n establecera las condiciones del contrato deconcesion y la tarifa de agua en Cochabamba. De acuerdo con la informaci6n disponiblepresentada a la misi6n durante el seminario "Agua para Cochabamba", no existe informaci6nsobre una comparaci6n de ambos proyectos llevada a cabo por consultores independientes.

LA INFORMACI6N DISPONIBLE SOBRE EL PROYECTO CORANI

7. La administraci6n del Presidente Sanchez de Lozada tom6 la decisi6n de ejecutar en laprimera etapa el proyecto Corani, dejando abierta la posibilidad de implementar el proyectoMsicuni en un futuro mediato, si la demanda futura de agua en el Valle de Cochabamba asi lodeterminase. Durante los uiltimos dos afios el Gobierno negoci6 con la empresa Corani elcontrato de suministro de agua y se lleg6 a un acuerdo sobre un borrador de contrato que deberiaser firmado entre la empresa Corani y el adjudicatario de la concesi6n de SEMAPA. En paralelose prepar6 el proceso de concesi6n de SEMAPA, incluyendo el desarrollo del modelo financieroque incorpora el proyecto Corani como la futura fuente de agua de suministro, y la preparaci6n delos pliegos de la licitaci6n. Se inici6 el proceso de la licitaci6n pero no se logr6 concluirlo, ya quedicho proceso fue anulado por la Corte Suprema como resultado de un recurso presentado por laAlcaldia de Cochabamba.

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8. La inversi6n estimada en el proyecto Corani es de US$ 70 millones y la empresa Corani secompromete entregar hasta 4 m3/s de agua en el valle de SACABA (en Molino Blanco). Seestima que la inversi6n adicional requerida para conducir el agua desde Molino Blanco a CalaCala en el valle central asciende a US$ 17.7 millones, la cual no correria por cuenta de la empresaCorani, sino que constituiria una obligaci6n del futuro concesionario de SEMAPA. La capacidadde conducci6n de agua en el tCnel Corani es de 10 m3/s, no obstante el compromiso en elcontracto es de abastecer solo hasta 4 m3/s. Potencialmente, el proyecto Corani podria abastecer6 m3/s y ain mis, pero para efectuarlo se requeririan inversiones adicionales para aumentar lacaptacion desde otras cuencas aledanias y asi aumentar el suministro de agua al embalse Corani.

9. En el Cuadro 1 se presentan los caudales para abastecimiento urbano que se estima quedebe comprar el concesionario y el precio fijado para la compra de dicha agua.

Cuadro 1: Caudales de Agua para Abastecimiento Urbano Suministrados por el ProyectoCorani y Precios Promedios de Agua para este Tipo de Abastecimiento

Afio Caudal Precio Promedio* m3/s) (US$/m3)

2001 1].154 0.2162002 1].266 0.2162003 1].384 0.2162004 1.508 0.2162005 L.640 0.2352006 l.687 0.2352007 1.811 0.2352008 :1.950 0.2352009 2.000 0.235

2010-2027 :2.000 0.235

10. El retorno de toda la inversi6n del proyecto Corani para el inversionista privado estabasado en la venta de los caudales y los precios presentados en el Cuadro 1. La empresa estadispuesta a suministrar en cada momento un caudal mayor, hasta un maximo de 4 m3/s. Loscaudales incrementales (por encima de los caudales presentados en el Cuadro 1) pueden serutilizados para riego. Para este tipo de usc, la empresa Corani cobrari el costo de oportunidad dela utilizaci6n de esa agua para generaci6n ele energia en las centrales de Santa Isabel y Corani, locual se traduciria en un precio cercano a los 0.08 US$/m3.

11. Se debe destacar que el contrato de Corani obliga al concesionario comprar los caudalespresentados en el Cuadro 1 y pagar los precios alli indicados. No obstante, el contrato deCorani no obliga comprar agua para riego. El concesionario puede elegir comprar aguapara riego por un precio de 0.08 US$/mn3, pero si no utiliza dicha opci6n no debera pagarninguna suma de dinero para agua de riiego, manteni6ndose inalterado el precio de ventade agua para consumo urbano. El concesionario tamnpoco tendra ninguna obligaci6n de

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comprar agua para abastecimiento de la poblaci6n por encima de los caudales indicados en elCuadro 1.

12. La empresa Corani se compromete a completar las obras en 39 meses, de los cuales 6meses son necesarios para ilevar a cabo la licitaci6n y 33 meses es el tiempo de ejecuci6n de lasobras. La empresa esta dispuesta a presentar una garantia de cumplimiento de US$ 10 millones ypagar una multa de US$ 20,000 por cada dia de atraso en el cumplimiento de la obra. Asi mnismo,la empresa Corani esti dispuesta a firmar el contrato con el concesionario de SEMAPA en formainmediata, e iniciar el suministro de agua a fines del afio 2000.

LA INFORMACI6N DISPONIBLE SOBRE EL PROYECTO MISICUNI

Informaci6n Suministrada por la Gerencia de la Empresa Misicuni

13. Por muchos anlos el proyecto Misicuni fiue considerado como la unica altemativa para elabastecimiento de agua para Cochabamba. Se han erogado mas de US$ 12 millones en estudiosrelacionados a este proyecto pero hasta la fecha el proyecto no fue ejecutado. La gerencia de laempresa Misicuni inform6 a la misi6n que se puede ejecutar el proyecto en etapas, de acuerdo conlo presentado en el Cuadro 2.

Cuadro 2: Etapas de Ejecucion y Costos del Proyecto Misicuni

EtaDa Caudalde Costo Estimado Costo EstimadoProducci6n sin Sistemas de con Sistemas de

(m3/s) Abastecimiento Abastecimientopara Riego para Riego

(US$ millones) (US$ millones)

Misicuni I (solo agua) 3.9 132 159Misicuni I (con 80 MW energia) 3.9 204 226Misicuni II 5.6 - -Misicuni HI (con 120 MW 6.6 292 339energia)

14. Se present6 a la mision algunos de los resultados del analisis financiero del proyectoMisicuni I solo agua, segun los cuales el precio de agua para abastecimniento urbano varia entre0.235 y 0.287 US$/zn3, de acuerdo con los supuestos establecidos sobre la financiaci6n delproyecto. Para obtener el retorno establecido en el analisis financiero y mantener los precios delagua para consumo urbano, el proyecto debe vender toda el agua que produce (3.9 m3/s) deforma que el agua no consumida para abastecimiento urbano debe ser consumida para riego, a unprecio de venta de 0.08 US$/m3. En el caso de que no exista dicha demanda para riego, elprecio del agua para abastecimiento urbano debera necesariamente aumentar con el objetode mantener el equilibrio financiero del proyecto. Esto iutimo representa de por si unadiferencia imnportante entre los dos proyectos en cuesti6n, ya que como se recordara, el proyecto

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Corani es mas flexible al no requerir la venta de toda el agua producida para mantener suequilibrio financiero.

15. Todas las altemativas de financiaci6n presentadas, tienen un componente de subsidio muyimportante. Ademas, los supuestos financieros adoptados en todas las alternativas parecendemasiado optimistas para las condiciones comerciales imperantes en los mercados de capital enla actualidad. De suponerse condiciones mas restrictivas y cercanas a la realidad de los mercados,seria necesario incrementar el costo del agua por encima de los valores estimados por la gerenciade la empresa Misicuni. En este contexto, el nivel de la preparacion del analisis financiero delproyecto Misicuni es solamente preliminar, -n entras que el precio real del agua dependera de laoferta del mercado, despues de haber solicitado al sector privado presentar propuestascompetitivas para la financiaci6n del proyecto.

16. Segun la informaci6n suministrada por la gerencia de la empresa Misicuni, el tiempoestimado de la ejecuci6n de las obras del proyecto Misicuni I es de 5 afos. En la informaci6nentregada por la empresa Misicuni no se detalla si este tiempo incluye los periodos de licitaci6n delos diferentes componentes.

Informaci6n Suministrada por el Conscorcio ASTALDI-ICE

17. El consorcio ASTALDI-ICE present6 en fecha 6 de abril de 1997 una propuesta, encaricter de iniciativa propia, para financiar y ejecutar el proyecto Misicuni I bajo la modalidad deBOT. Considerarnos que esta propuesta representa un enfoque mas real que el enfoquepresentado por la gerencia de la empresa Misicuni y por lo tanto se presentan a continuaci6n lascondiciones de esta propuesta.

18. En esta propuesta el consorcio solicita recibir un subsidio de entre US$ 70 y 80 millones yse compromete a invertir US$ 100 millones adicionales, siempre y cuando se le adjudique todo elproyecto en forma de BOT por un periodo de 40 afios. El punto de la entrega de agua es MolleMolle, en el valle central, y para la entrega del agua en Cala Cala se requiere un monto adicionalde US$ 10 millones para ejecutar obras de conducci6n. La propuesta no incluye adquisici6n deterrenos y servidumbres, las cuales deben ser entregadas al Consorcio sin costo, lo que equivale aun subsidio adicional estimado en US$ 5 mnillones. De esta forma, el monto total del subsidiosolicitado esta entre US$ 85 y 95 millones. Durante el periodo del BOT el consorcio cobrari lossiguientes precios para el agua suministrada:

* para un consumo urbano de hasta 2 m3/s - 0.2 US$/m3

* para un caudal incremental de 1 m3/s utilizado para riego - 0.18 US$/m3

* para un caudal incremental adicional de 0.9 m3/s utilizado para riego - 0.16 US$/m3

19. En un documento presentado a la misi6n el 8 de julio de 1997, el representante delconsorcio explica que, como resultado de la solicitud de la empresa Misicuni que consider6 que elprecio propuesto de venta del agua para riego era demasiado alto, el consorcio modific6 los

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precios de venta explicitados en su propuesta original y propone los siguientes precios de ventadel agua:

* para un consumo urbano de hasta 2 m3/s - 0.25 US$/m3

* para un caudal incremental de 1.9 m3/s utilizado para riego - 0.08 o 0. 1 US$/m3

20. El plazo propuesto para la ejecuci6n del proyecto Misicuni I es de 3.5 afios.

21. La oferta del consorcio no esta respaldada por garantias y multas por atrasos, por lo tanto,no incluye los efectos financieros de los mismos.

COMPARACION DE LOS PROYECTOS CORANI Y MISICUNI

Comparaci6on Econ6mica

22. El supuesto basico de los partidarios del proyecto Misicuni parajustificar dicho proyecto,a pesar de que requiere una inversi6n mucho mayor, es que el mismo constituye un proyectoregional con beneficios econ6micos y sociales para toda la region, que son dificiles de cuantificar,pero ciertamente positivos en lo referente a la degradacion del medio ambiente, las condiciones devida de la poblaci6n, el mantenimiento de la poblaci6n en sus lugares de origen y la reactivaci6nde toda la economia regional, fundamentalmente aquella relacionada con la producci6n primaria ysu industrializacion. Se menciona al respecto que el proyecto Corani solo puede abastecer el aguanecesaria para consumo humano, mientras que el proyecto Misicuni responderia mejor a lasnecesidades de Cochabamba ya que podria abastecer tanto con agua potable como con agua parariego a la regi6n. Consideramos que este supuesto es equivocado. De acuerdo con lainformaci6n suministrada a la misi6n, el potencial de suministro de agua de ambosproyectos es equivalente. Asimismo, consideramos que los beneficios que se puede generardel agua proveniente del proyecto Corani son equivalentes a los que se puede generar delagua proveniente del proyecto Misicuni. Es verdad que el punto de entrega del proyectoMisicuni se encuentra en el valle central mientras que el punto de entrega del proyecto Corani esen el valle de Sacaba, pero en el momento que el proyecto Corani inicie el suministro de agua paraconsumo urbano, se liberarian todas las fuentes actuales de SEMAPA, por un caudal de alrededorde 1 m3/s, el que quedaria disponible para riego en el valle central. Ademas, en caso denecesitarse mayores volumenes de agua para riego en el valle central, se podria utilizar para estefin aguas servidas tratadas, en cantidades que en el futuro podrian alcanzar unos 1.5 m3/s. En elcaso de que la demanda de agua para riego sea aun mayor, se podra utilizar tecnologias de riegomas eficientes, o traer mas agua del valle de Sacaba, con origen del proyecto Corani.

23. Es importante destacar que la misi6n considera que un suministro de 4 m3/s de agua a laregi6n de Cochabamba, ya sea su origen Corani o Misicuni, puede resolver el problema de aguapara riego sin necesidad de incrementar este caudal. Con las fuentes existentes de SEMAPA, elcaudal total disponible alcanzari 5 m3/s, del cual un ma'xmo de 2 m3/s se utilizara para consumourbano, dejando 3 m3/s para riego. Se puede reutilizar para riego un caudal de 1.5 m3/s de aguasnegras tratadas, lo que resultaria en un caudal total disponible para riego de alrededor de 4.5

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m3/s. Utilizando tecnologias de riego eficiente y teniendo en cuenta otros proyectos de riego quese estan desarrollando en la regi6n (no relacionados a Corani o Misicuni), estimamos que ladisponibilidad de agua para riego sera suficiente para satisfacer la demanda que podria surgir, sinla necesidad de incrementar el suministro de agua de la nueva fuente por encima de 4 m3/s.

24. Teniendo en cuenta que los beneficios de ambos proyectos son equivalentes y suponiendoque los costos de operacion y mantenimiento de ambos proyectos son similares (a pesar queestimamos que estos costos seran considerablemente mayores en el proyecto Misicuni), elproyecto favorable desde el punto de viista econ6mico es el proyecto de menor costo deinversi6n. Considerando los costos de inversi6n para la entrega de agua en Cala Cala, se tiene losiguiente: (i) la inversi6n en el proyecto Corani asciende a US$ 87.7 millones; (ii) la inversi6n enel proyecto Misicuni I seguin la gerencia de la empresa Misicuni esta estimada en US$ 147millones (incluyendo la conducci6n a CaleL Cala y la compra de terrenos y servidumbres); y (iii) lainversi6n en el proyecto Misicuni I seguin la propuesta de ASTALDI-ICE esta estimada entre US$185 y 195 millones. Estos datos demuest:ran que desde el punto de vista econ6mico, elproyecto Corani es mucho mas favorable, ya que para obtener los mismos beneficios senecesita invertir en el proyecto Misicunii I por lo menos un monto 2.1 a 2.2 veces mayor delo que se necesita invertir en el proyecto Corani (las cifras de 2.1-2.2 estan basadas en laestimaci6n de ASTALDI-ICE, la que parece mas ajustada a la realidad).

25. El valor presente de los ingresos de la empresa Corani por la venta de 4 m3/s de agua(parte para consumo urbano y parte para riego) durante los primeros 30 anlos del funcionaniientodel proyecto Corani asciende a US$ 162.9 millones, segun se infiere de los datos entregados porla empresa Corani y los analisis lievados a cabo con hip6tesis propias. Por otra parte, el valorpresente de los ingresos del consorcio ASTALDI-ICE por la venta de 4 m3/s de agua originadosen ei proyecto Misicuni I (parte para consumo urbano y parte para riego, en distribuci6n identicaa la del proyecto Corani) durante los prim,eros 30 afios del funcionamiento del proyecto Misicuni Iasciende a US$ 172.9 millones. Ademas, el consorcio solicita un subsidio de US$ 85 a 95millones en el inicio del proyecto, lo cual aumenta sus ingresos a US$ 257.9 (suponiendo que elsubsidio sera solo de US$ 85 millones). I)e esta manera, para obtener cantidades de agua ybeneficios similares, la sociedad pagara por el agua proveniente del proyecto Corani US$ 162.9millones, mientras que para el agua prove.niente del proyecto Misicuni la sociedad pagara US$257.9 millones. Esta comparaci6n demuestra en otra forma la ventaja econ6mica del proyectoCorani.

Comparaci6n Financiera

26. Desde el punto de vista financiero la propuesta de la empresa Corani es mucho mas s6liday respaldada por garantias adecuadas. El analisis financiero preparado por la gerencia de laempresa Misicuni no parece confiable, puesto que esta basado en supuestos de financiaciondemasiado optimistas, ademas de no considerar ninguna condici6n de reparo para el cr6ditoitaliano. La propuesta de ASTALDI-ICE es sin duda mis confiable que las estimaciones de lagerencia de la empresa Misicuni, sin embargo, es menos confiable que la propuesta de Corani, yaque no esta respaldada por garantias.

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27. Segun la propuesta de la empresa Corani, todo el proyecto Corani seri financiadopor el sector privado. Por otra parte la propuesta de ASTALDI-ICE requiere un subsidiode entre US$ 85 y 95 millones para construir el proyecto Misicuni I, mientras que el resto dela inversi6n sera financiada por el sector privado. El proyecto Corani tiene entonces una ventajaconsiderable en relacion al proyecto Misicuni, el cual depende de un gran subsidio que todavia noesta disponible y que, a nuestro juicio, el Gobierno tendra dificultades de financiar . Ademas,consideramos que el monto del subsidio necesario puede aumentar una vez que se solicite unapropuesta firme para el proyecto Misicuni, respaldada por garantias adecuadas.

28. Aun con el supuesto de que Cochabamba recibira un subsidio (regalo del Gobierno) deUS$ 85 millones, el pueblo de Cochabamba tendra que pagar por el agua de Misicuni durante losprimeros 30 afios un monto de US$ 172.9 millones (en terminos de valor presente), o sea unmonto mayor que el que pagaria por la misma cantidad de agua proveniente del proyecto Corani(US$ 162.9 millones). Esto se traduce en un precio mayor del agua para uso urbano provenientedel proyecto Misicuni, que asciende a 0.25 US$/m3, en comparaci6n a un precio de 0.216 a 0.235US$/m3 de agua para uso urbano proveniente del proyecto Corani. Las estimaciones sobre elvalor presente se han realizado considerando un 12% de costo de oportunidad del capital.

Comparaci6n de los Tiempos de Ejecuci6n

29. La empresa Corani se compromete a ejecutar las obras en un plazo de 39 meses (3.25aflos), de los cuales, los primeros seis meses son necesarios para encarar el proceso de licitacionesy los 33 meses restantes para la ejecuci6n de las obras. El compromiso esta respaldado porgarantias y por multas por atrasos, lo que otorga confiabilidad a la propuesta y a la determinacionde cumplir con los tiempos estipulados. Por otra parte, el proyecto no representa un grado decomplejidad elevado en cuanto a su construcci6n, lo que despeja incertidumbres sobreimportantes retrasos en la finalizaci6n del mismo. En cuanto al proyecto Misicuni I, la gerencia dela empresa Misicuni estima que el periodo de ejecuci6n del proyecto seria de 5 afnos, sinespecificar si este periodo incluye el tiempo necesario para preparar los documentos licitatorios yllevar a cabo dicho proceso. En estudios anteriores sobre el proyecto Misicuni, el tiempoestimado para la ejecuci6n del mismo es mayor de 5 afnos. El consorcio ASTALDI-ICE proponeejecutar el proyecto Misicuni I en 3.5 anos, pero su propuesta, presentada como una propuestaprehminar, no esta respaldada con garantias y multas por atrasos. Por otra parte, la construcci6ndel proyecto Misicuni es mas compleja que la del proyecto Corani (puesto que la inversion en esteproyecto es mucho mayor) lo que implica que los riesgos relacionados con posibles atrasos en losplazos de finalizaci6n del proyecto son mayores. Consideramos que un plazo de ejecuci6n de 5afios es mas realista para el proyecto Misicuni I.

30. En el caso del proyecto Misicuni, ademias del periodo de ejecuci6n, se requiere tiempopara la preparaci6n de los Terminos de Referencia (TOR) y los pliegos de licitacion para el BOT,asi como la ejecuci6n de la licitaci6n, la adjudicaci6n del contrato y su negociaci6n y firma.Asimismo, se requiere preparar la concesi6n de SEMAPA con base en el suministro de agua atrav6s de Misicuni, los TOR para la concesi6n, los pliegos de licitaci6n, la ejecuci6n de lalicitaci6n, la adjudicaci6n del contrato y su negociaci6n y firna. Se estima que todos estosprocedimientos duraran entre 1 a 2 aflos. En este sentido, el proyecto Misicuni se encuentra

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atrasado de 1 a 2 afios con relaci6n al proyecto Corani, o sea, en el caso de Corani se puedefirmar el contrato en los proximos 4 meses, mientras que en el caso de Misicuni, solo dentro de 1a 2 aflos (con el riesgo de que quizas este paso no pueda concretarse nunca por no resultarsuficientemente atractivo para el sector privado).

31. En resumen, se podria disponer, con un gran nivel de confiabilidad, del aguaproveniente del proyecto Corani dentro de 3.25 afnos, mientras que el agua del proyectoMisicuni estaria disponible dentro de un plazo de 4.5 aios (en la estimaci6n mas optimista)a 7 afios (en la estimaci6n real), con un alto nivel de riesgo. Esta diferencia en el tiempo en elcual cada proyecto puede asegurar el suninistro de agua tiene una gran importancia dentro delcontexto de la aguda crisis de agua potable en Cochabamba, de modo que el proyecto Coranitiene una gran ventaja desde el punto de vista del periodo de ejecucion.

Comparaci6n de la Flexibilidad

32. De acuerdo con nuestro conocimi'ento, el sector agricola en Cochabamba no estadispuesto todavia a pagar un precio real por el agua para riego y se requiere tiempo para eldesarrollo del mercado consumidor. El modelo financiero del proyecto Corani esta basadounicamente en el abastecimiento de agua para consumo urbano, de modo que si no hubiese unademanda de agua para riego, no se suministraria agua para este uso sino que se utilizaria el aguapara generaci6n de energia en las centrales Santa Isabel y Corani, sin afectar la ecuaci6n financieradel proyecto. Por otra parte, el proyecto Misicuni I esta basado en el abastecimiento de aguatanto para uso urbano como para riego, y tiene que hacerlo obligatoriamente, tanto desde el puntode vista ingenieril como financiero. Es decir que, incluso si el sector agricola no estuviesedispuesto a pagar por el agua de riego, habria que suministrar la cantidad planeada para riego(puesto que no habria otra manera de vaciar el embalse Misicuni) y aumentar la tarifa para elabastecimiento urbano, con el fin de mantener el equilibrio financiero del proyecto. Por lo tanto,el proyecto Misicuni es menos flexible y presenta el riesgo de imponer al sector urbano unatarifa mayor de la programada.

Comparaci6n de los Riesgos

33. El nivel del riesgo asociado con c1 proyecto Misicuni es mucho mayor al riesgo delproyecto Corani. El paquete del proyecto Corani mas la concesi6n de SEMAPA ya esta listo,requiriendo solo ajustes menores, de manera que la transacci6n completa se podria realizar en eltranscurso de los proximos cuatro meses. El paquete del proyecto Misicuni todavia no esta listo ypara lievarlo al mismo grado de avance que el proyecto Corani se necesita preparar ambasoperaciones (el BOT de Misicuni y la concesi6n de SEMAPA), o sea los modelos financieros, losTOR's y las licitaciones, asi como asegurar la disponibilidad de un subsidio gubernamental, conun gran riesgo de fracasar en conseguirio. Ademas, existe el riesgo que despues de 1 a 2 aflos dela preparaci6n de las licitaciones, el sector privado no este dispuesto a enfrentar los riesgosasociados con el proyecto Misicuni (disponibilidad del subsidio, riesgos de atrasos, sector agricolaque no esta dispuesto a pagar para agua de riego y riesgos de construcci6n). De esta forma existeel riesgo de que despues de 1 a 2 aflos la regi6n continue sin contar con la necesaria nueva fuentede agua, ya que la empresa Corani no mantendra su oferta en vigencia por tanto tiempo, sino que

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podria invertir los fondos actualmente disponibles para el proyecto Corani en proyectosalternativos en otras regiones. Ademas, aun en caso de que el proyecto Misicuni sea ejecutado, sepresenta el riesgo de imponer al sector urbano una tarifa mayor de la programada, si no sematerializan las proyecciones sobre la disposici6n del sector agricola a pagar por el agua de riego.

Comparacion del Impacto Ambiental

34. El componente de mayor impacto ambiental en un proyecto multiple de este tipo es elembalse de almacenamiento de agua. El embalse del proyecto Corani ya esta construido y seencuentra en operaci6n desde hace 30 anios, por lo que el impacto ambiental negativo delproyecto Corani seria minimo. Por el contrario, el embalse del proyecto Misicuni aun no estaconstruido, asi que el riesgo ambiental asociado con este proyecto puede ser mayor.

CONCLUSIONES Y RECOMENDACIONES

35. En base a las numerosas ventajas del proyccto Corani, el Banco Mundial considera queeste proyecto es el mas favorable para resolver el problema de abastecimiento de agua para laregi6n de Cochabamba. El proyecto Corani generaria, con una menor inversi6n, beneficiosequivalentes a los que puede generar el proyecto Misicuni I, ademas: (i) puede ser financiadototalmente con capital privado sin necesidad de subsidios; (ii) suministraria agua por un preciomenor; (iii) es mas flexible; (iv) puede asegurar el suministro de agua dentro de 3.25 afios (untiempo mucho menor que el proyecto Misicuni) y, (iv) el nivel de los riesgos asociados con esteproyccto es menor que el nivel de los riesgos del proyecto Misicuni.

36. Actualmente existe una oportunidad unica para firmar el contrato de Corani, pero estaoportunidad estara vigente solo por un tiempo limitado. La empresa Corani ha estado esperandopor mis de dos afilos para firmar el contrato y si decidiera invertir los fondos actualmentedisponibles en otros proyectos, la regi6n de Cochabamba perdera la oportunidad de concretar elanhelado deseo de suministrar a sus habitantes agua en cantidad y calidad adecuados.

37. El Banco recomienda firmar inmediatamente el paquete de la concesi6n de SEMAPA conel proyecto Corani como fuente de abastecimiento de agua. Las autoridades regionales deCochabamba deberian aprovechar la oportunidad existente de ejecutar el proyecto Corani antes deque 6sta se diluya para siempre. El Banco Mundial sostiene que el proyecto Corani resuelve elproblema de agua en la regi6n, es mis conveniente y constituye una opci6n realizable.

38. Asimismo, el Banco Mundial tambien recomienda invertir los aproximadamente US$ 32millones disponibles en la cuenta de "Agua para Cochabamba", en la ampliacion de las redes deagua y alcantarillado en la ciudad, lo que permitiria una reduccion de la tarifa de agua para usourbano, o el desarrollo de los sistemas de riego en la regi6n.

39. Finalmente y en forma complementaria el Banco Mundial considera necesario aclarar quela ejecuci6n del proyecto Corani, inviabilizaria el proyecto Misicuni puesto que la demanda tantode agua potable como de riego estaria pnncipalmente atendida por el proyecto Corani, dejandopracticamente sin mercado al proyecto Misicuni.

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Annex 5A

Project Reviewv from the Borrower's PerspectiveThe Opinion of Aguas del Illimani, La Paz

(In Spanish)

Aguas del Illimani

La Paz, marzo 19 de 1998EJF/afm. GG - 235

SefloresBANCO MUNDIAL1818 H. STREET N.W.WASHINGTON DC 20433E.E.U.U.

ATN. Ing. Menahem LibahaberTASK MANAGER

REF. INFORME DE CUMIPLIMIENTO DE LA IMPLEMENTACIONCREDITO AIF 2187-BO.

De nuestra consideraci6n:

En atenci6n a su nota, nos permitimnos hacer llegar la documentaci6n adjunta:

* Desempehio del Banco.* Informe de Cumplimiento del l'royecto.* Manual de Operacion y Mantenimiento de la Tuberia Pampahasi - Ovejuyo.

Con relacion al contenido del Bonrador de Informe de Cumplimiento puesto a nuestroconocimiento, al no tener ningun comentario, damos nuestra conformidad.

Con este motivo, saludo a ustedes mnuy atentamente.

GEREIT PL NIFICAESTRATEGICA

AGUAS DEL ILLIMANI S.A.

Adj. Lo citado.

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PROYECTO AGUA POTABLE LA PAZCREDITO 2187-BO

PRESTATARIO REPUBLICA DE BOLIVIAEJECUCION AGUAS DEL ILLIMANI S.A.

DESEMPENO DEL BANCO

En relaci6n a este tema debemos sefialar que el programa de La Paz, cont6 con el apoyoadecuado de los Funcionarios del Banco para la culminaci6n del Proyecto.

Como experiencia corresponde manifestar que seria deseable para futuros proyectossimplificar los documentos estandar del Banco para adquisici6n de bienes y servicios, asicomo su compatibilizaci6n con las regulaciones sobre el tema en los paises.

CUMPLIMIENTO Y DESARROLLO DEL PROYECTO

L ANTECEDENTES.

En fecha 17 de diciembre de 1990, el Servicio Aut6nomo Municipal de AguaPotable y Alcantarillado (SAMAPA), suscribi6 el Acuerdo de Credito N° 2187 -BO con la Asociaci6n Intemacional de Fomento (AIF), como resultado delConvenio de Credito firmado en la misma fecha por la Repuiblica de Bolivia.

Segun lo establece el Articulo VI, secci6n 6.01 inciso b) del Convenio de Credito deDesarrollo N° 2187-BO en fecha 2 de agosto de 1991 SAMAPA suscribi6 elConvenio Subsidiario de prestamo con el Fondo Nacional de Desarrollo Regional(FNDR), como agente financiero de gobiemo.

Segun lo estipula la Clausula Sexta del Convenio Subsidiario de Prestamo, laestructura de financiamiento considera 6 categorias, las cuales deberan ser cubiertoscon fondos del Credito N° 2187-BO por la AIF y con el aporte propio de SAMAPA.

En fecha 20 de junio de 1991, el Gobiemo de Bolivia firm6 con el KfW el contratode aporte financiero y de ejecuci6n "Del Sistema Alcantarillado de El Alto La Paz"niumero 9065319 de un aporte no reembolsable por DM 23.000.000 (Veintitrks

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Millones 00/100 de Marcos Alemanes), cumpliendo de esta manera el Considerando(B) del Convenio de Credito de Desarrollo para financiar la parte A3 del proyecto aser ejecutado por SAMAPA.

II. DESCRIPCION.

Segurn el Anexo 2 del Convenio de Credito, la parte "A" corresponde a SAMAPAque tiene como componentes principales a los siguientes:

1. Mejoramiento y expansion die los sistemas de agua potable que incluye:

a. Ampliaci6n de la Planta dLe Tratamiento de Pampahasi, para incrementar sucapacidad de 400 I/seg. a 705 I/seg.

b. Construcci6n de un tanque de almacenamiento en Ho.Ao. para un volumende 2.500 m3.

c. Instalaci6n de tuberias dLe conexi6n desde la Planta de Tratamiento dePampahasi hasta Calacoto - Alto Ovejuyo (altura Chasquipampa).

d. Redes de distribuci6n de agua potable para zonas de expansi6n en 125 Has.

2. Fortalecimiento Institucionail de SAMAPA que incluye:

a. Disefio final para las tuberias de conexi6n y la infraestructura para las redesde distribuci6n parrafos b, c, y d. del numeral 1.

b. Fortalecimiento Institucional de SAMAPA, que incluye control de perdidas,estructura organizacional y contabilidad de costos.

c. Adquisici6n de utilizaci6n de equipos y sistemas de computaci6n paramejorar los sistemas de operaci6n, administraci6n, comercial y financiera.

3. Rehabilitaci6n del sistema de alcantarillado de El Alto que incluye:

a. Instalaci6n de redes de alcantarillado incluyendo conexiones, a un dreaaproximadamente 300 Has. en la ciudad de El Alto.

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b. Construcci6n de una planta de tratamiento de aguas servidas en El Alto.

III. EJECUCION DEL PROYECTO.

III.1 Componente "A" AGUA POTABLE.

A.2 y A.3 Tuberia de Conexi6n Pampahasi - Calacoto - Alto Ovejuyo.

A.2.1 v A.3.1 Suministro de Materiales.

De acuerdo a Contrato AJ/0.1.0/021/95, la provisi6n y suministro demateriales esta a cargo de la firma MARIENCO SRL. El detalle de losantecedentes se muestra a continuaci6n:

Resoluci6n de Directorio 004/95 del 12-01-95Inicio Actividades 15-01-96Plazo segun Contrato 10 mesesFecha Conclusi6n s/Contrato 15-09-96Ampliaci6n de Plazo 30 dias calendarioFecha Conclusi6n 15-10-96Boletas de GarantiaCumplimiento de Contrato Banco BBA N° 00775/96 $us.

994.927.oo15-09-96

Monto del Contrato $us. 4.974.636.67

t COMENTARIO. La falta de experiencia de MARIENCO en el manejode este tipo de materiales ocasion6 importantes retrasos en la Obra.

A.2.2. Instalaci6n de la Tuberia Pampahasi - Calacoto Alto Ovejuvo.

De acuerdo a Contrato firmado N° AJ/0. 1.0/044/96, la responsabilidad de laejecuci6n de las obras del Proyecto esta a cargo de la Empresa ConstructoraTAURO SRL. El detalle de los antecedentes se muestra a continuaci6n:

Resoluci6n de Directorio 071/96 de fecha 17-11-95Inicio Actividades 09-09-96Plazo segun Contrato 9 meses - 270 dias calendario

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Fecha Conclusi6n s/Contrato 05-06-97Fecha Recepci6n Definitiva 05-06-98 despues de 12 mesesBoletas de GarantiaCumplimiento de Contrato 10% Banco BISA N° 006066-01 01

$us. 65.113.4604-08-97

Buen Uso de Anticipo 20% Banco BISA N° 006066-0101$us. 130.226.92128-04-97

Buena Ejecuci6n 10% Banco BISA No 006066-0101$us.65.113.46005-09-98

Monto del Contrato $us. 651.234.58

Orden de proceder

La orden de proceder fue emitida por la Supervisi6n en fecha 09-09-96 pesea no contar con todo el mnaterial necesario en almacenes, en raz6n a que deacuerdo a los terminos ccintractuales se establece que el plazo de ejecuci6nentra en vigencia a partir (le la entrega del anticipo, monto que fue canceladopor SAMAPA en fecha 05-09-96.

Equipo, Personal y Maquinaria Empleado por la Empresa Constructora

Los equipos, Personal y imaquinaria empleados por la Empresa Contratistaen la ejecuci6n de los trabajos realizados, guardan relaci6n con lo ofertadoen la propuesta presentada y adjudicada.

> COMENTARIO. El desempefio de la Constructora fue adecuado y elretraso se debi6 principalmente al Proveedor.

A.6 Redes de Distribuci6n Sistema Pampahasi

6.1 Contrato N0 AJ/008/97 Suministro de Materiales paraCimaras de Desa!iie.

Proveedor IRCE LTDA.

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Firma Contrato 28 Enero 97Inicio 13 Marzo 97 Apertura Carta de CreditoPlazo 105 dias calendarioVencimiento 28 Junio 97Garantia N° 041357 del Banco BNBMonto del Contrato $us. 43.630.67

> COMENTARIO. El Proveedor cumpli6 su Contrato conretraso.

6.2 Contrato N° AJ/096/97 Suministro de Materiales paraCamaras de Desaguie y Va41vulas Reductoras de Presi6n.

Proveedor MARKETING BOLIVIA S.R.L.Firma Contrato 29 Enero 97Inicio 14 Abril 97Plazo 150 dias calendarioVencimiento 10 Septiembre 97Garantia N° 7209 del Banco de la Uni6n, vence

10 Octubre 97, Cumplimiento deContrato

Ampliaciones No se han dadoMonto del Contrato $us. 303.908.21

> COMENTARIO. Este fue el unico Contrato de Provisi6nque no tuvo dificultades.

6.3 Contrato NO AJ/094197 Suministro de Tuberias y Accesoriosde PVC y Viilvulas de Compuerta.

Proveedor MARIENCO SRL.Inicio 14 Abril 97Plazo 120 dias calendarioVencimiento 11 Agosto 97Garantia No 007188 del Banco de la Uni6n SA.Ampliaci6n de plazo No se han dadoMonto del Contrato $us. 210.544.96

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COMENTARIO. En este Contrato AGUAS DELILLIMANI S.A. rechaz6 los Accesorios de PVC, porque nosatisfaciant la calidad requerida.

6.4 Contrato NO AJ/095/96 Tuberia y Accesorios de HierroFundido Duictil

Proveedor MARIENCO SRL.Inicio 14 Abril 97Plazo 120 dias calendarioVencimiento 11 Agosto 97Garantia N0 006574 del Banco de la Uni6n SA.Ampliaciones de Plazo No se han dadoMonto del Contrato $us. 194.331.96

6.5 Contrato NO AJ/012/97 Construcci6n de las Redes deDistribuci6n.

Proveedor Consorcio CICSA-ASBUN SRL.Firma Contrato 21 Marzo 97Inicio 13 Agosto 97Plazo 180 dias calendarioVencimiento 13 Febrero 97Garantia LP-BG-1-97-23968 Banco Santa Cruz

LP-BG-1-97-24607 Banco Santa CruzMonto del Co0ntrato $us. 413.402.33Ejecuci6n Se emiti6 la orden de proceder a partir

del 13 Agosto 97.

> COMENTARIO. El rendimiento del Consorcio essumamente bajo y se realizan esfuerzos para evitar que seocasione im retraso considerable.

III.2 Componente "B" MEJORAMIENTO INSTITUCIONAL

B.1.2 y B.1.3 Sistema de Costos y estructura organizacional

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El Contrato tuvo una reconducci6n en los meses de Enero a Junio por partede SAMAPA, desarrollando el Sistema Computarizado de Costos.

> COMENTARIO. Por diferentes circunstancias este componente no dioel resultado esperado.

III.3 Componente "C" CONSULTORIA

C.2 Supervisi6n de la Construcci6n.

De acuerdo a contrato firmado N° AJ/0.1.0/045/96, SAMAPA contrat6 losservicios del Consorcio Hazen and Sawyer - CAEM, para la supervisi6n delProyecto "Tendido de Tuberia Pampahasi - Ovejuyo", bajo las siguientescondiciones y caracteristicas:

Resoluci6n de Directorio 084/96 del 28-12-95Inicio Actividades 05-09-96Plazo segun Contrato 10 mesesCumplimiento de Contrato Banco Nacional de Bolivia N° 34814

$us. 34.767.60 al 27-06-97Monto del Contrato $us. 347.676.oo

Las actividades desarrolladas por la Supervisi6n a la fecha indicada fueronlas siguientes:

Replanteo de Obras de generalSupervisi6n de obras civiles y tendido tub. FFD Zona Chasquipampa AltoOvejuyo.Supervisi6n obras civiles y tendido tub. de acero 24" y 20" Zona Alto Irpavi,Calacoto, AchumaniExamenes de soldadura a personal especializado.Procedimiento de soldaduraEstudio de modificaci6n de trazo de la tuberia en el sector Pampahasi-Irpavi.Verificaci6n del material recibido.

> COMENTARIO. La Supervisi6n tuvo dificultades en definir si latuberia requeria o no anclajes, lo que demor6 la toma de decisiones eneste tema.

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Control de Soldadura.

De acuerdo a los Terminos de Referencia y Pliego de Licitaci6n N° 01/95-BM, se establece que SAMAPA, contratara los servicios de una Instituci6nDescentralizada para la realizaci6n del Control Radiografico de lasSoldaduras.

En este sentido SAMAP'A, firm6 un Convenio Interinstitucional con elInstituto de Investigaciones Fisicas (IIF) de la Universidad Mayor de SanAndr6s, para el control radiografico de las soldaduras en fecha 11-11-96. Elalcance de trabajo a realizarse bajo este convenio, es el siguiente:

- Control de cien por ciento de la longitud total de las juntas soldadas enlas tuberias mediante :rayos X..

* El IIF es responsable de la interpretaci6n y conclusiones respectivasconcemientes a la aceptaci6n o rechazo de las soldaduras.

La estructura fmanciera del Convenio es la siguiente:

Control Radiografico de Soldadura $us. 99.844.ooExamenes a Soldadores $us. 1 OO.oo /personaCapacitaci6n Personal de SAMAPA $us. 500.oo

La evaluaci6n de examenes al personal especialista en soldadura de laEmpresa Constructora y control radiografico de todo el tendido de la tuberiade acero, se cumpli6 satisfactoriamente.

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PLAN FASE DE OPERACION

PROYECTO PAMPAHASI - OVEJUYO

1.- ANTECEDENTES

La empresa Aguas del Illimani con fmanciamiento del Banco mundial y participaci6n de la firmaMARIENCO como proveedor, el consorcio de consultoria Hazen and Sawyer-CAEM Ltda. comosupervisor del proyecto y la Empresa TAURO como constructor, se hallan en la etapa final del tendido detuberias de conexi6n, desde la planta de tratamiento de Pampahasi hasta la zona sur de la ciudad enOvejuyo.

El area en la que estan siendo tendidas las tuberias de conexi6n, esta situada en el radio urbano de laciudad de La Paz y consiste en el tendido de tuberia de acero y FFD de diferentes diametros.

En general el sistema tiene los siguientes componentes:

Tuberia de conexi6n Pampahasi - Calacoto, con una longitud aproximada de 7,742.30 ml. de tuberia deacero, soldada uni6n tope a tope en diametros nominales de 30", 24" y 20".

Tuberia de conexi6n Calacoto - Alto Ovejuyo, con una longitud aproximada de 1,606.30 ml. de tuberia deacero, soldada tope a tope, mediante el uso de CCB's (manguitos de conexi6n), de DN 12.75" y 1,516.90ml. de tuberia de FFD K9 en DN de 300 mm.

Interconexi6n con la red existente en los ramales Z-31, Z-40 y Z-41 en una longitud de 739.40 ml. detuberia de acero en DN 16" y 12.75".

Elementos hidromecdnicos como ser: Estaci6n de seguridad, estaciones reductoras de presi6n, cAmaras deentrada y purga de aire, camaras de desagiue y valvulas compuerta.

Obras complementarias, como ser: Camaras de Ho.Ao. para estaciones y valvulas, cruce de rios, gavionesy anclajes.

2.- IMPORTANCIA DE LA OPERACION Y MANTENIMIENTO.

Si bien el sistema puede estar adecuadamente diseflado y construido, el momento de la entrega de obra,comienza la vida uitil del proyecto y por lo tanto la fase mas delicada que es el poner en marcha el sistemay lo que es mas importante el operarlo y mantenerlo.

Se distingue claramente que la fase de operaci6n y mantenimiento, constituye una tarea importante en laconservaci6n del sistema y por lo tanto un deficiente manejo, implicaria una disminucion de la vida util dela obra.

3.- TRANSFERENCIA DE LA NUEVA INFRAESTRUCTURA

De acuerdo a la programaci6n de obras, la linea de aducci6n Pampahasi-Ovejuyo, debera estar concluidohasta mediados del mes de Abril de 1998. Una vez recibidas las obras y concluido el proyecto, el sistemasera transferido al Dpto. de operaciones, dependiente de la Gerencia Regional La Paz, quienes a partir deese momento deberan hacerse cargo de la operaci6n y mantenimiento de las nuevas obras.

4.- MAGNITUD DE LA NUEVA INFRAESTRUCTURA

La nueva infraestructura se compone de lo siguiente:

* 10,088.00 metros lineales de tub. de acero en DN 30", 24", 20", 16" y 12.75"

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* 1,516.90 metros lineales de tub. de FFD D)N 300 mm.* Una estaci6n de Seguridad.* Cuatro estaciones reductoras de presi6n* 16 camaras para valvulas de entrada y purga de aire.* 15 camaras para valvulas de desagile.* 28 valvulas compuerta.* Obras complementarias.

5.- MANTENIMIENTO

El proceso de mantenimiento de un sistema de agua potable, es un conjunto de actividades tendientes arestituir las condiciones originales de funcionamiento y a prever cualquier deterioro futuro.

En un programa de mantenimiento se deberan considerar dos ambitos:

* Reparaci6n de dafios* Prevenci6n.

Tanto el mantenimiento referido a la reparaci6n de dafios como a la prevenci6n, juegan un rol importanteen el adecuado funcionamiento del sistema y el tiempo de vida uitil.

5.1.- Reparaci6n de dafios.

La reparaci6n de dafios esta dirigida a actuar en el momento en que se presente algun deterioro en uncomponente del sistema

Causas:

Los dafios en el sistema se pueden originar por fallas en la operaci6n del sistema, por debilidad delmaterial en un determinado punto o por accidentes extemos que destruyan algun elemento.

Las fallas en la fase de operaci6n pueden evitarse en la medida en que los operadores puedan cumpliradecuadamente con las recomendaciones provistas por los fabricantes de los equipos. Cuando unafalla de operaci6n ha sido localizada y existe dafio en algfu componente, se debera realizar unaevaluaci6n, indicando de fonna inmediata la magnitud y celeridad con la que debe actuarse en lareparaci6n de este dafio.

Otra causa en la aparici6n de dafios en el sistema, puede presentarse por la debilidad de la estructuradel material empleado en la fabricaci6n o ensamblaje de las piezas. La causa es dificil de verificar, yaque la ruptura o el deterioro aparece generalmente de forma brusca. Las fallas de fabricaci6n sondificiles de identificar en la puesta en marcha del sistema , puesto que por lo general estas recien semanifiestan despues de un tiempo de funcionamiento. En el caso de la tuberia de aducci6n, delpresente proyecto, se efectuaron pruebas de testeo en fabrica, como tambien pruebas hidraulicas ensitio, para verificar las condiciones de flncionamiento extremas tanto a nivel estructural de la tuberiacomo a nivel de las juntas realizadas.

* Reparaci6n de los dafios:

Una de las caracteristicas de la aparici6n de dafios, es que se producen en forma inesperada, por locual es dificil crear un programa de reparaci6n de dafios.

Una vez aparecido el deterioro, se debera actuar con la mayor celeridad para reparar el dafno y una delas condiciones fundamentales para encontrar la soluci6n, es de disponer para cada caso de losmedios necesarios para cumplir dicha tarea.

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5.2.- Mantenimiento Preventivo.

La reparaci6n de danlos no debe ser el objetivo final del programa de mantenimiento, es decir no se debeesperar que el dafno ocurra, es posible realizar un mantenimiento preventivo antes de la aparici6n dealgun dafio.

Fases del mantenimiento preventivo.

Las fases a seguir en el programa de mantenimiento preventivo son:

* Clasificaci6n de los componentes del sistema.* Inventariaci6n de cada componente del sistema* Programa de mantenimiento por componente.* Personal y equipo requerido.

Clasificaci6n de los componentes del sistema:

Los componentes a considerarse son los siguientes:

Elementos hidromecanicos* Estaci6n de seguridad* VClavulas compuerta* Valvulas de entrada y purga de aire* Valvulas de desaguie* Estaciones reductoras de presi6n

* Tuberias* Tuberia de acero y accesorios* Tuberia de FFD y accesorios

* Obras complementarias* Camaras Ho.Ao. para elementos hidromecanicos* Cruce rios - Encamisado Ho.Ao. tuberia* Protecci6n taludes - gaviones - canales de drenaje* Bloques de anclaje

Inventariaci6n del sistema:

Este item se refiere a una inventariaci6n tecnica, que comprende el registro de cada una de lasinstalaciones del sistema de acuerdo a su clasificaci6n. Se deberi crear una ficha que contenga toda lainformaci6n necesaria.

Programa de mantenimiento por componente:

* Estaci6n de Seguridad.

Esta prevista su instalaci6n en caso de una rotura de la tuberia. Las valvulas de la estaci6n deseguridad tendran que cerrarse automaticamente a objeto de evitar dafios personales, a bienes asicomo perdidas de agua. Su funcionamiento es hidraulico - mecanico.

La instalaci6n hidromecanica esta compuesta de los siguientes elementos:

* M6dulo hidraulico independiente - dispositivo de cierre automatico y/o manual.* Valvula mariposa de cierre automatico movida a palanca.

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* Dispositivo antivacio entrada y purga de aire automatico y manual* Valvula compuerta.* Interruptor de flujo.

Mantenimiento:

* M6dulo hidraulico indepenciente

Control periodico de:

* Man6metro baja y alta presi6n.* Posici6n del selector de operaci6n de cierre, automatico -manual.* Nivel liquido hidraulico* Control piloto de presi6n* Filtraciones en valvulas de alivio de alta y baja presi6n.

Mantenimiento anual (o cuandlo se requiera):

* Drenar la humedad acumulada en el dep6sito del liquido hidraulico- Verificar la limpieza o reemplazar el filtro.- Verificar la presi6n de las v:dlvulas de alivio y ajustar a sus valores establecidos- Si es posible verificar la operaci6n y calibraci6n del control piloto de presi6n y de la

valvula solenoide.- Llenar el dep6sito de liquido hidraulico hasta su nivel maximo, con liquido compatible.- Las valvulas Mariposa, no requieren mantenimiento o lubricaci6n regular

Viilvulas Comnuerta:

Las valvulas de compuerta, operaclas manualmente son los dispositivos mas simples en elsistema, no requeriendo instrucciones particulares para la operacion, como tampoco, para sumantenimiento. Si bien las valvulas pueden proporcionar afios de funcionamiento libres demantenimiento, hay ocasiones en que la reparaci6n de las valvulas es necesaria.

Se considera de utilidad tomar en cuenta algunas recomendacciones, en atenci6n a asegurar quela operaci6n sea efectuada en la mejor forma posible.

Controles Peri6dicos

* Durante la prueba de presi6n clel sistema, se recomienda que el torque en los elementosroscados debe ser verificado, para asegurar que las cargas en las juntas sea el adecuado.

* Detener cualquier filtraci6n visible de las empaquetaduras de la caja del vastago, ajustandolos pemos del buje de la valvula. La filtraci6n debe ser detenida lo mas pronto posible paraprevenir el deterioro de las piezas de la valvula.

* Si se observa alguna filtraci6n entre el cuerpo y el bonete de la valvula ajustar las tuercas enforma gradual y cruzada.

* Si despiues de esta operaci6n, la filtraci6n continua, es necesario reemplazar laempaquetadura.

* Lubricar los vastagos y tuercas cle los vastagos periodicamente, usando grasa de alta calidadbien gradada.

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* Preservar la identificaci6n de todas las valvulas. La numeraci6n es usada para identificar lavalvula. Estos niumeros, son de utilidad cuando se requiere reemplazar piezas.

* No desarmar ninguna valvula, a no ser que se requiera reparar un danio. La gran mayoria delas valvulas nunca requieren un mantenimiento que contemple el desarmado total, durante lavida util del producto, si el mismo esta adecuadamente instalado, operado y mantenido.

Valvulas de Entrada v Pur2a de Aire:

Estas valvulas son instaladas para la ventilaci6n automatica de las tuberias de conexi6n. Liberanuna gran cantidad de aire durante el llenado de la tuberia y permiten tambidn, que una cantidadreingrese a la tuberia para romper el vacio y elimninar cualquier peligro o colapso.

Los elementos principales de esta purga de aire son:

* Valvula de globo• Valvula de admision y escape de aire* VAlvula de compuerta

Controles Peri6dicos:

En todas las valvulas, detener cualquier posibilidad de filtraciones a travez de lasempaquetaduras de las juntas bridadas, ajustando las tuercas de los pemos en formacruzada. Si no se logra detener las filtraciones se debe cambiar las empaquetaduras.

La vAlvula de globo puede ser completamente desarmada en campo, para reemplazarasientos o para una completa revisi6n, sin la necesidad de herramientas especiales.

- Viilvula de desague:

Ubicadas en los puntos bajos de las tuberias de conexi6n y aguas arriba de las valvulas de cierre.

Su elemento principal es la valvula de globo.

Su mantenimiento es similar al indicado para las valvulas de purga de aire.

* Estaciones reductoras de presi6n.

Las estaciones reductoras de presi6n son instaladas, con el fin de reducir las altas presiones querigen en el ramal principal de la tuberia de conexi6n y sus ramales a presiones adecuadas para lasredes de distribuci6n. Seran instaladas en los extremos finales de los ramales de la tuberia.

Una estaci6n de reducci6n de presi6n esta compuesta de uno o dos ramales, cada uno con susinstalaciones respectivas.

En el sistema de Pampahasi - Ovejuyo seran instaladas cuatro (4) estaciones reductoras depresi6n:

* Reductora R-201 (Ramal Z-3 1)* Reductora R-79 (Ramal Z-41)* Reductora R-78 (Ramal Z-40)* Reductora R-77 (Ramal Z-40)

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Los componentes de cada estaci6n reductora de presi6n son:

* Valvula reductora de presion.* Valvula de cierre (globo)* Actuador hidraulico* Valvulas compuerta (cinco pzas.)* Valvula de alivio* Recolector de suciedad* Sistema parada de emergencia

El mantenimiento de los diferentes elementos hidromecanicos de las reductoras de presi6n,practicamente esta dada en los pArrafos precedentes. Sin embargo, enumeramos los mismos pararelacionarlos con las instalacciones anotadas:'

Controles Peri6dicos

* VAlvula reductora de presion

Los controles que se deben efectuar en estas valvulas, se refieren particularmente a losdanios de los mecanismos de la valvula por cavitacci6n. Es por ello que, un control adecuadode caudales y presiones a los que ha sido diseflada la tuberia de conexi6n evitari que seacelere o retrase el danio por cavitaci6n de estas valvulas.

* Las demas valvulas que componen una estaci6n reductora de presi6n y el sistema de paradade emergencia, deben controlarse de la misma manera que lo explicado en parrafosanteriores.

* Recolector de suciedad

Drenar peri6dicamente el recipiente de recolecci6n de suciedad

De cualquier manera, tratandose de varios elementos bridados, es imprescindible evitarfiltraciones de las juntas, mediante el ajuste de las tuercas de los pemos en forma cruzada.

Tuberias

Rutinariamente ( por ejem. cada dos semanas) los operadores deberan recorrer la traza de latuberia de Acero y FFD, comprobando su buen funcionamiento y verificar si hay indicios defugas en algun punto de las tuberias.

En el caso de la tuberia de acero, se debera verificar el revestimiento interior a intervalos decinco afnos, en lo posible, inpeccionando en forma interna toda la tuberia. mediante personal conequipo adecuado y/o con el empleo de videocamras.

Los tramos que presenten defectos o deterioro agudo deberan ser reparados o repuestos.

* Accesorios

Todos los accesorios o piezas especiales instaladas en camaras deberan ser inspeccionadasperi6dicamente y comprobar su estado. Bianualmente se debera reforzar sus revestimientoexteriores mediante el pintado y/o revestidos con materiales aprobados por la AWWA

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* Obras Complementarias

Camaras H°A°

El mantenimiento referido a estas estructuras, deberi efectuarse peri6dicamente. Alcomprobarse algun dailo tanto intemo como externo, se deberi seguir lo establecido en elCodigo Boliviano de HIA° en lo que ha reparaciones se refiere.

* Otras Obras

La inspecci6n peri6dica de las obras complementarias, en especial aquellas de protecci6n a lastuberias, se hace imprescindible, a efectos de prever cualquier colapso en la tuberia, dada laspresiones con la que se disefio el sistema.

Se debe tener cuidado especial en los cruces de rios realizando una inspecci6n anual a dichossectores, antes de la epoca de lluvias, a efectos de tomar las medidas correctivas o mejorasnecesanias en encamisados de H°A° y gaviones de protecci6n.

Por otra parte en sectores de pendiente pronunciada se debe verificar si los gaviones deprotecci6n tepes y canaletas de drenaje estan en condiciones 6ptimas, antes de enfrentar la dpocade lluvias.

- Personal v Eouipo

El personal para la operaci6n y mantenimiento de las instalaciones sera entrenado durante laetapa de puesta en operaci6n y funcionamiento de la tuberia y como resultado de esta actividad,se estableceran las necesidades de equipos y herranmnientas, asi como la complementaci6n delpresente manual

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ANEXO

FICHA DE INVENTARIO DIE INSTALACIONES Y EQUIPOS

CODIGO

......................

1. COMPONENTE DEL SISTEMA:

2. PARTE DEL COMPONENTE:

3. NOMBRE DEL EQUIPO:

4. FECHA DE INSTALACION:

5. NUMERO DE IDENTIFICACI6N:

6. DATOS DEL FABRICANTE:

Nombre del Fabricante:

Direcci6n:

........................................

7. DISPONIBILIDAD DE INFORMACION DEL FABRICANTE

Manual de montaje si ......... no ...no.Manual de operaci6n si ......... no .......noManual de mantenimiento si ......... no.........

8. PLACA DE IDENTIFICACI6N Y OTROS DATOS TECNICOS:

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Annex 5BProject Review from the Borrower's Perspective

The Opinion of Aguas del illimani, La Paz(In English)

La PazMarch 19, 1998

EJF/afm GG-235

World Bank1818 H Street N.W.Washington D.C., 20433

Attention: Mr. Menahem LibhaberTask Manager

Subject: Implementation Completion Report, IDA Credit 2187-BO

Dear Sir:

We are attaching the following documents in reply to your note:

* Bank performanceProject completion reportOperating and maintenance manual for the Pampahasi-Ovejuyo line

We accept the draft Implementation Completion Report and have no comments to make on it.

Yours sincerely,

Eddy Jaen FuentesStrategic Planning ManagerAguas del Illimani S.A.

Attachments

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LA PAZ POTABLE WATER PROJECTCREDIT 2187-BO

BORROWER: REPUBLIC OF BOLIVIAIMPLEMENTING AGENCY: AGUAS DEL ILLIMANI S.A.

BANK PERFORMANCE

The La Paz program received adequate support from Bank staff for its completion.

For future projects, it would be desirable to simplify the Bank's standard procurement documents,making them compatible with regulations on this subject in the borrowing countries.

TEHE PROJECT

L BACKGROUND

On December 17, 1990, the Servicio Aut6nomo Municipal de Agua Potable y Alcantarillado(SAMAPA) signed Credit Agreement 21'37-BO with the International Development Association(IDA) pursuant to the Credit Agreement signed on the same day by the Republic of Bolivia.

As established in Article VI, Section 6.01 subsection (b) of the Development Credit Agreement2187-BO, a Subsidiary Agreement was signed on August 2, 1991, by SAMAPA and the NationalRegional Development Fund (FNDR) as the government's financial agent.

As stipulated in clause six of the Subsidiary Agreement, the structure of the financing included sixcategories to be covered with proceeds fi-om IDA Credit 2187-BO and SAMAPA contributions.

On June 20, 1991, the Government of Bolivia and KfW signed contract 9065319 fornonreirnbursable financing of DM 23 million for the El Alto La Paz sewerage system, therebycomplying with clause B of the Development Credit Agreement to finance part A.3 of the projectto be carried out by SAMAPA.

IL DESCRIPTION

According to Annex 3 of the Credit Agreement, part A contained the following main componentsfor SAMAPA:

1. Improvement and expansion of the potable water systems, including:

(a) Expansion of the Pampahasi water treatment plant to increase its capacity from 400 I/s to705 uls;

(b) Construction of a 2,500 m 3 storage tank;

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(c) Installation of pipelines connecting the Pampahasi water treatment plant to Calacoto-AltoOvejuyo (at Chasquipampa); and

(d) Construction of potable water distribution systems in an expansion area of about 125hectares.

2. Institutional strengthening of SAMAPA, including:

(a) Preparation of the final designs for the pipelines and distribution infrastructure referred toin paragraphs (b), (c) and (d) above; -

(b) Institutional strengthening for SAMAPA, including loss control, organizational structureand cost accounting; and

(c) Acquisition and utilization of equipment and computer systems to improve its operational,commercial and financial management.

3. Rehabilitation of the El Alto sewerage system, including:

(a) Installation of sewerage systems, including connections, covering an area of about 300hectares in the municipality of El Alto; and

(b) Construction of a sewage treatment plant in El Alto.

MlL PROJECT IMPLEMENTATION

3.1 Component A: Potable Water

A.2 and A.3. Pampahasi-Calacoto-Alto Ovejuyo pipeline

A.2.1 and A.3.1 Supply of materials

Under contract AJ/0. 1.0/021/95, the firm Marienco S.R.L. was to supply the materials, asfollows:

Board of Directors decision: 004/95 of January 12, 1995Start of activities: January 15, 1996Contract term: 10 monthsContractual date of completion: September 15, 1996Extension: 30 calendar daysDate of completion: October 15, 1996Contract performance guarantee: Bank BBA 00775/96 for US$ 994,927, September 15, 1996Amount of contract: US$4,974,636.67

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Comment: Marienco's lack of experience in handling materials of this kind led to major delays inthe work.A.2.2. Installation of the PamWahasi-Calacoto-Alto Ovejuyo pipelines

Under contract AJ/0. 1.0/044/96, the construction company Tauro S.R.L. was responsible forperforming the work, as follows:

Board of Directors decision: 071/96 of November 17, 1995Start of activities: September 9, 1996Contract term: 9 months (270 calendar days)Contractual date of completion: June 5, 1997Date of final acceptance June 5, 1998 (12 months late)Guarantees:

Contract compliance: 10%". Bank BISA 006066-0101 for US$65,113.46, August4, 1997

Advance paymnent: 20%. Bank BISA 006066-0101 for US$130,226.92, April28, 1997

Good performance: 10%. Bank BISA 006066-0101 for US$65,113.46,September 5, 1998

Amount of contract: US$651,234.58

Order to proceed. The order to proceecd was issued by the supervisor on September 9, 1996,despite the fact that not all the materials were on hand, since the contract stipulated that theexecution period would begin on the date of the advance payment, which was made by SAMAPAon September 5, 1996.

Equipment, personnel and machinery used by the construction company. The contractor'sequipment, personnel and machinery were as offered in its contract.

Comment. The construction company's performance was adequate and the delays were mainlydue to the supplier.

A.6. Pampahasi distribution svstem

6.1 Contract AJ/008/97 for the supply of materials for the drainage chambers

Supplier: IRCE Ltda.Contract signed: January 28, 1997Starting date: March 13, 1997. Opening of letter of creditTerm: 105 calendar daysDue date: June 28, 1997Guarantee Bank BNB No. 041357Amount: US$43,630.67

Comment: The supplier was late in conapleting the contract.

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6.2 Contract AJ/096/97. Supply of materials for the drainage chambers and pressurereducing valves

Supplier: Marketing Bolivia S.R.L.Contract signed: January 29, 1997Starting date: April 14, 1997Term: 150 calendar daysDue date: September 10, 1997Guarantee: Banco de la Union No. 7209, expiry October 10, 1997, contract

performedExtensions: NoneAmount: US$303,908.21

Comment. This was the only contract for supplies that did not encounter difficulties.

6.3 Contract AJ/094/97. Supply of PVC pipes and accessories and gate valves

Supplier: Marienco S.R.L.Starting date: April 14, 1997Term: 120 calendar daysDue date: August 11, 1997Guarantee: Banco de la Union No. 007188Extensions: NoneAmount: US$210,544.96

Comment. Aguas del Illimani S.A. rejected the PVC accessories since they did not meet qualitystandards.

6.4 Contract AJ/095/96. Ductile cast iron pipes and accessories

Supplier: Marienco S.R.L.Starting date: April 14, 1997Term: 120 calendar daysDue date: August 11, 1997Guarantee: Banco de la Union No. 006574Extensions: NoneAmount: US$194,331.96

6.5 Contract AJ/012/97. Construction of distribution systems

Supplier: Consortium CICSA-ASBUN S.R.L.Contract signed: March 21, 1997Starting date: August 13, 1997Term: 180 calendar days

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Due date: February 13, 1997Guarantees: Banco Santa Cruz LP-BG-1-97-23968

Banco Santa Cnrz LP-BG-1-97-24607Amount: US$413,402.33Implementation: The order to proceed was issued for August 13, 1997

Comment. The consortium's performance is very poor and efforts are being made to preventmajor delays.

3.2 Component B: Institutional Strengthening

B.1.2 and B.1.3. Cost system and orgamizational structure

The contract was renewed from January to June by SAMAPA to develop a computerized costsystem.

Comment. For various reasons this component did not produce the expected results.

3.3 Component C. Consulting Serviices

C.2. Construction supervision

Under contract AJ/0. 1.0/045/96, SAMAPA contracted the services of the Hazen and Sawyer -CAEM Consortium to supervise the contract to lay the pipeline between Pampahasi and Ovejuyo,under the following terms and conditions:

Board of Directors decision: 084/96 of December 28, 1995Start of activities: September 5, 1996Contract term: 10 monthsPerformance guarantee: BNB No. 34814 for US$34,767.60 to June 27, 1997Amount: US$347,676

The supervisory activities carried out were:

General review of the worksSupervision of the civil works and laying FFD pipe in the Chasquipampa-Alto Ovejuyo zoneSupervision of the civil works and laying the 24" and 20" steel pipe, Alto Irpavi, Calacoto,Achumani zoneWelding tests by specialistsWelding proceduresStudy to modify the layout of the pipeline in the Pampahasi-Irpavi sectorInspection of the materials received

Comment. The supervising firm had difficulties in determining whether the pipe required anchorswhich led to delays in decisions.

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Welding Control

The terms of reference and bidding documents No. 01/95-BM established that SAMAPA wouldhire the services of a decentralized agency to perform x-ray inspections of the welding.

On November 11, 1996, SAMAPA signed an inter-institutional agreement with the PhysicalResearch Institute (IHF) of San Andres University to x-ray the welding. The scope of the workunder the agreement is:

X-ray inspection of 100% of the welded jointsThe HF is responsible for interpreting the x-rays and determining whether the weldingshould be accepted.

The agreement's financing structure is:

X-rays of the welding: US$99,844Tests of welders: US$100/personTraining for SAMAPA staff: US$500

The evaluation of the tests administered to the construction company's welders and the x-rayexamination of the entire steel pipeline were performed satisfactorily.

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Annex 6AProject Review fron the Borrower's Perspective

The Opinion of SAGUAPAC, Santa Cruz(In Spanish)

COOPERATIVA DE SERVICIOS PUBLICOS SANTA CRUZ LTDA.

SAGUAPACSANTA CRUZ -BOLIVIA

Santa Cruz 19 de Marzo de 1998Of. GG. 906/98 AF/GPS

Se.-or:Ing. Menahem LibhaberDIVISION DE MEDIO AMBIENTE Y DESARROLLO URBANODEPARTAMENTO III - OFICINA, REGIONALPARA AMERICA LATINA Y EL CARIBE - INTBAFRADLA31NTHE WORLD BANK - 1818 H Street, N.W.Washinaton, D.C. 20433U.S.A.

Ref. INFORME DE CUMIPLBIIENTO DEL PROYECTOCREDITO 21871BO - A.I.F.

De nuestra consideraci6n:

Acusarnos recibo de su atento oficio mediante el cual nos envia el Informe deCumplimiento de la Implementaci6n (ICR) del Credito 2187,BO. Nos complace desobremanera las opiniones vertidas por el Banco Mundial, sobre el desempenio deSAGUAPAC durante el periodo de ejecuci6n del Credito 2187/30.

Adjunto al presente oficio, enviarnos a ustedes la opinion de SAGUAPAC sobre laimplementaci6n del Proyecto y -el plan para la fase de operaci6n. El Informe deProgreso final y las Proyecciones financieras con los datos financieros definitivosprevia conciliaci6n con el FNDR, seran remitidas a ustedes a la brevedad posible.

A tiempo de agradecerle por s valiosa colaboraci6n durante el desarrollo del Credito,saludamos a usted muy atenta ente,

lng. Carlos NMedrano VGERE7jrE G{;EIRAL

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COOPERATIVA DE SERVICIOS PUBLICOS "SANTA CRUZ" LTDA.SAGUAPAC

SANTA CRUZ - BOLIVIA

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INFORME DE CUMPLIMIENTO DE LA IMPLEMENTACION DEL PROYECTO

COOPERATIVA DE SERVICIOS PUBLICOS "SANTA CRUZ" LTDA.(',AGUAPAC)

ANTECEDENTES

En fecha 17 de diciembre de 1990, la Cooperativa de Servicios Publicos "Santa Cruz" Ltda.(SAGUAPAC), suscribi6 el Convenio de Credito de Fomento 2187/BO con la Asociaci6nIntemacional de Fomento (AIF), como resultado del Convenio de Credito firmado en lamisma fecha por la Republica de Bolivia.

De acuerdo a lo establecido en el articulo VI, secci6n 6.01, inciso b), del Convenio deCredito de Fomento; En fecha 2 de agosto de 1991, fue suscrito el Convenio Subsidiario dePrestamo entre el Fondo Nacional de Desarrollo Regional (FNDR) como agente financierodel Gobiemo y la Cooperativa de Servicios Publicos "Santa Cruz" Ltda. (SAGUAPAC). Lapuesta en marcha del Convenio fue a partir del 17 de Septiembre de 1991.

Segun lo definido en la clausula sexta del Convenio Subsidiario de Prestamo y considerandola programaci6n inicial, la estructura de financiamiento consideraba 6 categorias, las cualesdeberian ser cubiertas con fondos del credito por AIF y con el aporte propio de SAGUAPAC,totalizando los siguientes montos:

ESTRUCTURA DE FINANCIAMIENTO

CATEGORIAS A.LF SAGUAPAC TOTAL

1. OBRASCIV.ES 3.547.000) 2.365.000 5.912.000

2. EQUIPOS Y 6039.000IATERIALES 6.039.000

3. CONSIJLTORIAS 772.0(0) 772.000

4. REPAGCOPPF-444 158.000) 158.000

5. INIPUF.ST0S 1.294.000 1.294.000

6. NO ASIGNAIX) 2.366.009 531.000 2.897.000

-O T A I. E S 12.882.000 4. 190 .000 17.072.000

Tipo de cambio DEG x $US. =1,39

Debido a la variaci6n del tipo de cambio del DEG con relaci6n al d6lar, se originaronincrementos en las cantidades en d6lares asignadas a las diferentes Categorias.

Durante la Misi6n del Banco Mundial que visit6 Bolivia del 18 al 26 de julio de 1995, seautoriz6 reprogramar los fondos disponibles e invertir en obras complementarias de

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Alcantarillado Sanitario (colectores secundarios) y ampliaci6n de las lagunas de oxidaci6n.

De acuerdo con lo mencionado, en fecha 23 de Noviembre de 1995 se procedi6 a la firma delConvenio Modificatorio al Convenio Subsidiario 2187/B0, resultando la siguiente estructurade financiainiento:

ESTRUCTURA DE FINANCIAMIENTO

CATEGORIAS A.I.F. SAGUAPAC TOTAL

I ()HRAS CIVILES 5.606.104,W0 3.777.402.67 9.443.506.67

MA2ERIALES 7.798.348,40 13.205,62 7.811.554,02

3. CONS1LTORIAS 193.840,40 193.840,40

4. REPA0O PPF-444 160.143,78 13.120.00 173.263,78

5 IRMUSTOS 1.635.490,21 1.635.490,21

T 0 lTA 1. E S 13.818.436.58 5.439.218,50 19.257.655,08

- Tipo de cambio DEG x $US. = 1,49 10

11. OBJETIVOS DEL PROYECTO

En el Anexo N° 2, Parte B, del Convenio de Credito suscrito entre el Gobiemo de Bolivia yla A.I.F. se describen los objetivos del Proyecto como sigue:

I. Expansi6n de los sistemas de agua potable y alcantarillado de SAGUAPAC, incluyendo:

a) Expansi6n del sistema de agua en el area Norte de la ciudad de Santa Cruz de Sierra,incluyendo perforaci6n y equipo de dos pozos profundos e instalaci6n de infraestructurade distribuci6n

b) Expansi6n del sistema de agua en el area Sur de la ciudad de Santa Cruz de la Sierra,incluyendo perforaci6n y equipo de dos pozos profundos e instalaci6n de infraestructurade distribuci6n.

c) Expansi6n del sistema de agua en el area Este de la ciudad de Santa Cruz de la Sierra,incluyendo perforaci6n y equipo de un pozo profundo e instalaci6n de infraestructura dedistribuci6n.

d) Rehabilitaci6n de instalaciones de producci6n y distribuci6n (incluyendo la reposici6n de100 km. de tuberia)

e) Rehabilitaci6n de las lagunas de tratamiento

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f) Construcci6n de una red piloto de alcantarillado con tecnologia de bajo costo.

2. El fortalecimiento institucional de SAGUAPAC contemplado en este proyecto se detalla acontinuaci6n:

a) Preparaci6n de los disefios finales para las inversiones de la parte C. I del proyecto

b) Servicios de consultoria para mejorar sus sistemas de gesti6n, y entrenar al personal deSAGUAPAC en gerenciamiento, operaci6n y mantenimiento, y administraci6n comercialy financiera.

c) Adquisici6n y utilizaci6n de equipo, incluyendo sistemas de computaci6n, para elmejoramiento de su manejo operacional, comercial y financiero.

d) Construcci6n del edificio para oficinas

III. EJECUCION DEL PROYECTO

Los objetivos del proyecto fueron alcanzados en su totalidad, cubriendo las expectativas en un 100%de los trabajos planificados. Se ejecutaron obras adicionales a las previstas inicialmente quepermitieron mejorar y ampliar los servicios de los sistemas de agua potable y alcantarilladosanitario de las zonas Norte, Sudoeste y Noreste de la ciudad de Santa Cruz:

Sistema Norte.- Dentro del periodo previsto en el Credito 2187/B0, se ejecutaron tres pozos deproducci6n de agua, denominados No. 20, 24 y 25 con profundidad de 336m, 315m y 186mrespectivamente y una capacidad de producci6n inicial de 220 I/s, una Estaci6n de Bombeo concapacidad de 570 1/s y un tanque de almiacenamiento de 5.000m3; asimismo se adquirieron losmateriales y equipos necesarios para la ejecuci6n de las obras mencionadas. En esta zona seejecut6 un pozo adicional a lo previsto, optimizando los recursos hidricos disponibles y lascaracteristicas hidrogeol6gicas de subsuelo de nuestra ciudad.

Sistema Sudoeste.- En esta zona y durante el periodo previsto, se ejecutaron siete pozos deproducci6n de agua potable denominados 17, 17A, 22, 23, 27, NPI y NP2 con profundidad de294m, 80m, 320m, 327m, 204m, 308m y 320m respectivamente, con capacidad de producci6nen la fase de prueba de 488 I/s, una Estaci6n de Bombeo con capacidad de 4201/s y un tanque dealmacenamiento de 6.000m3 Los materiales requeridos para la ejecuci6n de las obras, como serbombas, motores, tableros de control, transformadores etc. fueron adquiridos oportunamentedentro de los plazos establecidos en los contratos. En el anexo 3 se muestra el estado de loscontratos. En este sistema, se ejecutaron 5 pozos adicionales a los previstos en el plan inicial,optimizando los recursos hidricos y financieros disponibles.

Sistema Noreste.- Para este sistema se construy6 un pozo No. 21 de 318m de profundidad concapacidad de producci6n de 90 I/s, un tanque de almacenamiento para 3800m3 y la interconexi6n

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de pozo. Se compraron materiales y equipos para implementar los trabajos mencionadosantenormente.

Red de Distribuci6n.- Este componente comprende la compra 303.950 m de tuberiasecundaria (diametros entre 75mm y 200mm), y 62.000 m de tuberia principal (diametrossuperiores a 200mm.), haciendo un total de 365.950 m de tuberia para la red de agua potable.

Durante el periodo de ejecuci6n, con recursos del Credito se instalaron 242.498 m de tuberiasecundaria y 19.835m, de tuberia principal, sumando un total de 262.243m de tuberia instalada,para habilitar 21.772 conexiones domiciliarias. Con recursos de SAGUAPAC para las obras ymateriales del Credito se instalaron 61.452 m de tuberia secundaria y 42.165 m. de tuberiaprincipal, para beneficiar a una poblaci6n de 225.900 personas.

La construcci6n de tres tanques de almacenamiento y las respectivas estaciones de bombeomencionada anteriormente, permiten asegurar una distribuci6n y presi6n mas uniforme en lossistemas de agua potable.

Materiales para conexiones.- Durante el periodo de ejecuci6n del proyecto se adquirieron44.795 medidores domiciliarios y 7.947 kitts para reparaci6n y materiales para conexiones.

Mantenimiento de pozos.- Se rehabilitaron los pozo* I I y 13. para recuperar un caudal deproducci6n de 154 I/s 1 t

Alcantarillado Sanitario. Se ejecutaron obras de ampliaci6n en la red de alcantarilladosanitario en las Unidades Vecinales (UV) 28, 23, ,26, 31, 33, 15(parcial), 32, 35(parcial), 39 y62, sumando un total de 78.182.m, permitiendo la incorporaci6n de 5.665 conexionesdomiciliarias que benefician a 46.736 personas. La UV-28 fue ejecutada con financiamientoretroactivo.

Lagunas de estabilizaci6n.- Las lagunas antiguas de estabilizaci6n de la zona norte fueronsometidas a un proceso de limpieza de 54.000 m3 de desechos s6lidos, durante el periodonoviembre/89 a marzo/90; el financiamiento de esta obra fue de caracter retroactivo. Durante elperiodo noviembre/95 a diciembre/97 se realizaron obras de ampliaci6n de 13,4 Has. en laslagunas de estabilizaci6n, trabajos que no estaban contemplados en el proyecto inicial y quefueron financiadas con el remanente financiero del Credito.

Estaci6n de Bombeo El.- Se compraron equipos que fueron usados en la rehabilitaci6n de laestaci6n de Bombeo EIde aguas servidas, con capacidad de bombeo de 381 I/s.

Mejoramiento Institucional.- SAGUAPAC realiz6 los estudios de mejoramiento institucionalmediante consultores independientes con contratos menores, conforme al siguiente detalle:* Estudio de Recuperaci6n de Inversiones* Estudio de diagn6stico econ6mico - financiero, comparativamente con otras empresas de

agua

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* Estudios de Manuales de Funciones y Procedimientos* Mejoramiento de operaci6n y mantenimiento de redes y agua no contabilizada (ANC)* Manejo de recursos de aguas subterraneas* Control de fugas en la red de agua

Construcci6n del Edificio.- Se construy6 el edificio administrativo de SAGUAPAC, equipado contodo el mobiliario necesario para el buen flincionamiento del mismo.

IV GRADO DE CUMPLIMIENTO

Los objetivos planteados en el proyecto fueron concluidos dentro de los plazos establecidos, serealizaron trabajos adicionales a los planificados inicialmente que representan un 25%. El FNDR nodesembols6 el total del monto en dWlares estadounidenses que estipula el Convenio Modificatorio alConvenio Subsidiario 2187/BO. En el periodo diciembre/91 hasta diciembre/97 se enviaron alFNDR 52 solicitudes de Reembolsos (ver anexo 2), de las cuales hasta la 50 fueron atendidas en un100% y la solicitud No. 51 parcialmente, sumando un total 13.295.637,44, en el monto mencionadose incluye la suma de $us 46.296,55 en fase de pago por parte, del FNDR. La solicitud No. 52 no fueatendida por el FNDR aduciendo la falta de fondos en marco del Credito, debido a la variaci6n delDEG con relaci6n al D61ar.

V SOSTENIBILIDAD DEL PROYECTO

SAGUAPAC a traves de su estructura administrativa financiera, garantiza la sostenibilidad delProyecto, incluyendo en sus presupuestos anuales los recursos necesarios para operar y mantener lasobras ejecutadas, dando de esta manera continuidad a los servicios que presta en la dotaci6n de aguapotable y servicio de alcantarillado sanitario.

VI PERFORMANCE DE LA ASOCIACION

A lo largo de la ejecuci6n del Proyecto el desempeio de la Asociaci6n fue muy positivo ydeterminante para el logro de los objetivos. El exito alcanzado se debe fundamentalmente al buendesempenio de los representantes del Banco Mundial, que supieron decidir de manera agil y oportunaa los requerimientos de SAGUAPAC. Durante el periodo enero/92 a diciembrel 96 se realizaron 46licitaciones, las cuales obtuvieron la debida no objeci6n de parte del Banco Mundial, ademas de 3licitaciones que fueron reconocidas por el Banco con caracter retroactivo.

Las misiones de supervisi6n y evaluaci6n del Banco Mundial, que visitaron SAGUAPAC en variasoportunidades para evaluar el avance del Credito 2187/BO, fueron muy positivas y agiles, definiendocon eficiencia y responsabilidad las situaciones que merecian su definici6n. Las sugerenciasplanteadas por los personeros del Banco, fueron asimiladas por nuestra Cooperativa, situaci6n quefue determinante para el exito del Proyecto.

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VII. PERFORMANCE DEL PRESTATARIO

Durante la ejecuci6n del Proyecto SAGUAPAC se propuso realizar las obras contempladas en elplan de inversiones en el tiempo mas corto posible, buscando la economia y eficiencia sin descuidarla calidad en la ejecuci6n de los trabajos, situaci6n que origin6 una mayor cantidad de obras(25%)dentro del plan establecido. Durante el proceso de solicitudes de reembolso se presentaron algunosatrasos por parte del FNDR, situaciones que fueron corregidas sin causar retraso en el desarrollo delProyecto.

VIII. EVALUACION DE LOS RESULTADOS

Evaluacion de los resultados.- Los objetivos del Proyecto fueron alcanzados. Se adicionaron alsistema de agua potable 225.900 personas, el numero de conexiones habilitadas es de 21.772 locual origina un incremento de la poblaci6n atendida en la ciudad de Santa Cruz, incidiendo en elaumento de la cobertura de 65% en 1992 a 80% en 1996, Al sistema de alcantarillado sanitario seincorporaron 5.665 conexiones que benefician a 46.736 personas, aumentando la cobertura de 26%en la gesti6n 1992 al 32% en 1996. En ambos sistemas el total de personas beneficiadasdirectamente con el proyecto es de 272.636 personas, lo cual influye directamente en elmejoramiento de las condiciones de vida de la poblaci6n, salud y medio ambiente.

Referente a los objetivos institucionales, se contrat6 asistencia tecnica en el area administrativa yconsultores en las areas tecnicas de operaci6n y mantenimiento, estudios que vinieron a potenciar lagesti6n de la empresa; se adquirieron equipos de computaci6n que garantiza un procesamientocontinuo de la informaci6n y se compraron equipos para mejorar la operaci6n y mantenimiento delos sistemas de agua y alcantarillado.

IX. OPINION DE CONSULTORES Y CONTRATISTAS

En forma general el cumplimiento de los contratistas en la ejecuci6n de obras fue satisfactorio, salvoen algunas circunstancias, se presentaron atrasos debido a las situaciones climatol6gicas. Referente alas empresas que realizaron provisi6n de bienes, estos lo hicieron a entera satisfacci6n deSAGUAPAC. Los consultores contratados desempefiaron las tareas asignadas de manera eficiente ypuntual.

X. LECCIONES APRENDIDAS

Finalmente, las lecciones aprendidas en el desarrollo del Credito, que a pesar de la falta de recursosasignados en la reprogramaci6n de los fondos del Credito, las obras fueron concluidas con recursospropios. El FNDR no cumpli6 su compromiso en desembolsar la totalidad de los montosreprogramados conforme lo establece Convenio Modificatorio al Convenio Subsidiario 2187/30 defecha 23 de Noviembre de 1995, debido a la variacibn del DEG con relaci6n al d6lar.

-1 13-

XI. COSTOS DEL PROYECTO

El costo total del proyecto es de $us. 19.151.290 para la ejecuci6n de obras civiles, compra deequipos y materiales, consultorias, y repago del PPF-444. El monto total del Credito 21 87/B0 es de13.295.637 y el aporte local de SAGUAPAC de $us. 5.855.653. En el Anexo 1 se presentan losmontos de inversi6n por Categoria y en el Anexo 3 se presentan los costos por componentes deinversi6n.

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COOPERATIVA DE SERVICIOS PUBLICOS "SANTA CRUZ" LTDA.

SANA G ]LT P AOLVC

_ Dv

\ 9

SANTA CRUZ - BOLIVIA

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PLAN DE OPERACION Y MANTENIMIENTO

El Plan de operaci6n y mantenimiento esta orienteado a dar mayor eficiencia a los sistemas de aguapotable y alcantarillado sanitario, para garantizar el funcionamiento y continuidad de estos servicios.Ante la importancia de contar con un plan para las obras ejecutadas con fondos provenientes delCredito 2187/B0, este se estructur6 en base a lo siguiente:

a).- Agua Potable

En este rubro las obras contempladas para el Plan de Operaci6n y Mantenimiento, se refieren apozos de producci6n de agua, estaciones de bombeo y tanques de almacenamiento, redes dedistribuci6n principales y secundarias.

En base al software de mantenimiento preventivo MAPRE, se lleva un control y registro hist6rico detodo el equipamiento como ser motores, boimbas, equipos de. medici6n y control, etc., a las cualesoportunamente se los revisa y mantiene en suIs partes mecanicas, electricas, lubricaci6n, etc.

Se cuenta tambien en stock con las principalles piezas de recambio determinadas por nuestra propiaexpenencia que permite ante una emergenciaL agilizar la soluci6n de los problemas.

Se realiza tambien peri6dicamente el mantenimiento de los servicios generales de las instalaciones,de las estaciones de bombeo, pozos, etc., evitando de esa manera su deterioro.

Cada dos anos se hace la limpieza y rehabilitaci6n de los pozos para restituir los parametrosoriginales de disefio.

En la red de agua se estan siguiendo las recomendaciones del estudio sobre manejo y control defugas y perdidas (BABE), como ser disminuci6n de presiones en las horas de menor consumo ysectorizaci6n de la red mediante colocaci6n de valvulas a fin de permitir un mej or manejo de lasfugas en el sistema

Los indicadores que manejamos son en el caso de los pozos, el caudal, niveles estaticos y dinamicosy los ensayos de calidad del agua fisico-quimicos y bacteriol6gicos.

En las estaciones de bombeo, se registran los valores de presi6n y calidad del agua en los tanques dealmacenamiento. El analisis de estos valores nos permite detectar cualquier desviaci6noportunamente para tomar las acciones correctivas correspondientes.

1

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b).- Alcantarillado Sanitario

En este sistema estan conprendidas las redes principales y secundarias, lagunas de tratamiento yestaciones de bombeo.

En las redes de alcantarillado se realizan inspecciones peri6dicas de las camaras y colectores paramonitorear niveles de sedimentaci6n, infiltraci6n o presencia de cuerpos extrafios para luegoproceder con la limpieza de los mismos, sobre la base de un programa sectorizado de la ciudad.SAGUAPAC cuenta para estos trabajos con personal de muchos afios de experiencia, como asitambien con equipos. Se tiene un cami6n de limpieza cistema Jet, y un equipo de video para lainspecci6n de tuberia, aunque este equipo debe ser reforzado en el futuro.

En las plantas de tratamiento se mantienen los equipos y las instalaciones de las estaciones debombeo, los caminos de acceso a las lagunas, los diques contra la acci6n de roedores, la arborizaci6ncircundante, etc.

Se monitorean los valores de reduccion del DBO, coliformes y se controla tambien la sedimentaci6nde las lagunas para programar su limpieza. El analisis de estos datos nos permite ver la eficienciacon que trabajan las plantas, y encuadramos dentro de los valores normativos.

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COOPERATIVA DE SERVICIOS PUBLICOS "SANTA CRUZ" LTDA.SAGUAPAC

SANTA ICRUZ - BOLIVIA

PROYECTO : "REHABIUTACION DE ALCANTARILLADO Y AGUA POTABLE EN CIUDADES PRINCIPALES

ENTIDAD FINANCIERA : AIF No 2187-BOAGENTE FINANCIERO : FONDO NACIONAL DE DESARROLLLO REGIONAL (FNDR)EMPRESA EJECUTORA : COOPERATIVA DE SERVICIOS PUBLICOS SANTA CRUZ LTDA (SAGUAPAC)

CIUDAD : SANTA CRUZ DE LA SIERRA

CONTROL DE EJECUCION POR CATEGORIAS

(EN DOLARES AMERICANOS)ANEXO I

PROGRAMADO EJECUTADOCATEGORIAS _ ACUMULADO

AIF PROPIO T oTAL

AIF PROPIO TOTAL MONTO % MONTO % MONTO %

1. OBRAS CIVILE5 ____4__ ri Ari 1461 4,pROIOTTA7_

2. EQUIPOS Y MATERIALES -. r!r .i I a -3 .-KK.1 _!1___,__ 1313. coNsuLroRlA - nfil-, I-l-ll-! I trl r.9 Wl 14 r!a-}4-r i too) I-- I. !-G 179~~~~~~~~30% 4 JO ---- 1 -1311

3. CONSULTORIA ._4 _ . 17.

4. REPAGO ADELANTO (PPF.444) i i i(I I -IF I '. ,4 , 101 V 1I 11 0"_ I

5. IMPUESTOS __ __ _. .!. -hi R 1l 10 I .,-f 1339

6. NO ASIGNADO K -_tI__ _

TOTAL | ii 4. p-' I 10 140St _ X 41

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PROYECTO :REHAMW TACION DE ALCANTARILLADO Y AGUA POTABLE EN CIUDADES PRINCIPALESENTIDAD FINANCIERA AiF No 2187-BOAGENTE flNANCIERO FONDO NACIONAL DE DESARROLLO REGIONAL (FNDR)EMPRESA EJECUTORA COOPERATIVA DE SERVICIOS PUBUCOS SANTA CRUZ LTDA (SAGUAPAC)CIUDAD SANTA CRUZ DE LA SIERRA

CONTROL DE DESEMBOLSOS POR CATEGORIAS

(EN DOUARES AMERICANOS) AEXO 2Bb XI 0 0 A. 1. 183.000 _7.728A A.AU1UAA

|SOLICITUDES DE INVERSION ES POR C/ATEGORIAS _ MONTO5 I NVERMSIN POR CATGRAS MONTOS ILDESEMBOLSOS 1. OBFRAS 2z EOUIPOS Y 3. CONSULTORIA 4 FIEPAGO DE 1.OBRAS 2. EOUIPOS Y 3. CONSULTORA 4, REPAGO 5. IMPUESiTO-S DE

|UERIC FECHA CFVtLES UATERIALES PPF/444 DESEMBOLOS CIVILES MATEPIALES PPF/444 DESEMBOLSOS1 II71t7/3 51.80,M1a.i1SW00.1 0,w001 1332 40B.81899 418.0U75 _ 1.73.74 348.082,U 5.400.32 82.55,78 4386.041,942 1 89e 72.191.96 71.462.20 7.022.0S 1850.S7124 85.353.S7 738724 10.44KO I3.24,923 101/13193 24B.742,1S 17.27325 402_ 2S.83,41 225.83W 38.77,36 2448039,954 031/083 12e.935,15 128.935.15 0.00 I5 t47/93 t1 274231,63 700.298.W0 1t5.440,01 117.331,50 672.514,51 2502J7 4 465.987.05 264 5.917805 144.8811 184846OS,7 * 19/93 9S.072,17 _ 9S.072,17 9.W1,e9 9.SS1,e9a 021/093 8 B3.101. 1BB011.W2 17.729.12 17.729,129 *1 -7107/93 51 8.950,18S 51 S.95,1 S 0,0017 06 /06/04 4411 .523.7 7 4171.5230 6.574.20 4B.57421 10593 116.621603 ,O 186.3216,30 5i.344,21 51.34211 12 /018193 215.91923 197.7183.B9 _1211 94 33,18 2 20.07163 24,031.69 44.103,3213 17/09 12.35.15 12.935,15 149.941.52 749.841,5214 17/11/93 Bt 2.91 0.5S = _ B1.010.56 S7.545,BO S7.5 45,SO15 25i0V94 1696222.B5 95.802807 286.86852 154.311.16 23 1.3111651S 012/1OV4 101.1382 _ 101.S1382 13 4.0SO.3 131 090,36-17 O0DO194 42Za14.03 318.121 23.317024 39.087,18 5.475.42 448552.421a *17/0094 14 5831S3 2 1746.3,31 47 514.3170355 117f.4581,37129 1726/94 215.644 1B.718.30 114.810.00 _ 407.982.94 4.756.45 10S1410.58 252.1685.820 20709/94 3.9410.12,0 31.40 411.5 68.1832.53 0247.41 89.7S4S 92.3927,921 20/09/*4 235.5n7S _8 235.5n7.7B 3.813,92 S 3.S19,4S 67.433,4122 *2910994- 31.9S5.73 55.902.90 _ 7.8S9,53 21 .311,1 S 21 .311 ,18

24 22/1°2/94 1a.845JIS 119.94125,1 2OSZ99704' 95.897.18 95.B97.1S25 22/1V294 70.135.82 27&I 9S,54 _ 345.332,3S 46.757.21 70.712,51 11 7.459.7227 27/01/95 974403BO0 331.M.40 L _ 4315402.20 864289,21 47.107,4S 113.3B5.6

28 16/03295 36.SZ52 36872.52 245B1 ,88 24.581,8829 05/06/95 55.21 7 7.4840 8.081.04 71.664,20 38.7353 2.474 55 39210330 22/06/95 17e.838.49 12.253,95 4983,80 193886,24 117.758,80 2.577,25 120.336,2431 W0/008 149.962502 170.799,57 7.512.93 328.274,52 99.9748S9 25.044 91 125.019,SO32 05/095 1It7.441,4f1_ 197.44141 4B93,44 47203,0B 52.09S5233 23/10/95 151 .25,13 S.953803 232.578,18 101,B3.42 12.096,43 113.1798B34 01/12/S5 108.205.09 29.791,20 137.99S629 72.136,73 4.451,58 70.5862935 27/12/95 88.e07.53 40.236,02 9.801,05 11S.B4,80 40.458,35 1.S1425 48.372,eO3e 1 s5 Iss 2m7sDB27 B277.5027 1 85, W50 185.008s037 1 s/01 tss 45.D30344 45.303.44 30.20Z30 20 20 036 07/03/06 217.505,91 3.740,70 221.255,61 145.003,93 560,30 145.564,2339 20/05/96 500.37,e2 5.e24,ss 315.462,17 206.f55841 840.45 207.3S6,9640 OB107lss 159910o.ss9_ 159.10O9 10895 0720 106.807,3041 16/7/0s 15180067 5.795,94 374468D0 104.83.51 101011 8.350,65 107.4177842 16/1010 433.887,07 3.749,70 18375,0 _ 456.011,77 288.2584 3.422.24 292.6S.2843 1411106 139.SB5,02 3.748.70 143.834,72 25,88 s56.36 83.91 8,844 130/96 17.4,50 40,24656 237251 08 121,51,3 8.013,0 137.3501945 13/03/96 77.83775 7.870 5.80 51.89160046 52/04/97 99.481,75 50.132.84 146.614,28 60.321J18 7,481,07 73.812,2347 17/0S07 88.388,96 140.004,08 £60073 235.092,75 5w.wt5,64 18 548,10 7O.14D,744B 30/07/07 105.70261 102.702Zs1 ss.46s40 88. 4049 25/08/97 e.soe.28 80.510,15 148.416,44 45.937,52 12030.25 57.567.77

50 27/02t/0 2s40uw00 2_4.04,w Om 0,o

51 27/ 200.084,32 15 ,25ss_ _ 215.313,W0 185,150,58 2.20,03 167.430,6152 P.ndiwo. ~~~~~~~~~~~~~~~~~~ ~ ~~~~~1325.012333 13.080,37 2.026839 147.130,55

| P . _ _ 36034295 7 78.74,33 1 84164,97 540232.27

|TOTALES 5.192.068230 7.832.732,z3 110.692,53 160.143,a7 13.265.637,44 4.011.524,16 S .922, 20.41t6,61 13.1 20.00 1.717.660,25 5.850.853,03

* 3JLICLIHJO No.5, deserboisado parcialrente Sus 61'.376,20* SGLICITUOSF No. 6 y ' en dos pagos parcialp- de Sus 21H.009.2 g$js 39,989.50t SOLICITtJO Nc. 9 oalizadas en dos desembolsos de $us. 318.950.18 .i Sus. 200.0001* SOLIClftJD No. 10 realizadas en dos paqos de Sn 26.1523.77 eni fecha 23D''93 y $Sus. I50.000 en lecha 58.93* SOLICITUO No. 18 desembolso en dos pagos Nus it.03.,0o en fecha 7,08.9 t 1 1.2.'9,30 en9r erha 20,09,94* SOLICITUD No. ?2 en dos pagos $us 31.966,73 el 29 09 9t u Sus 55.9102,90 el 19, 105iC

SOLICITUO No. t9 en dos paqos, el 25,9,97 t8.906.28 Ca,. I l 27.2,98 5 80.510, 15 0a'.(PV 501 ICITUD No. Sl paqo pJrCIal, PI 27.2,98 SuS. 169.016,45 u saldo pendiente dc Sus. 46.296,55

PNOYECTO :'*EHAIF&ff*cfoN DE ALCANrANNIA00 V AWA POTAOLE EN CAIDADRS PRINCIPALES'OMAD PWNICIPA AP ft $107-50AOWMM PWAW-ift FONDO NACHMAL DE OESAIDIOLUO REGIONAL (FNOR)EAPRUA EXCUrOMA COOPMATWA Of BERVICtOS PUSLICOI BANrA CRUZ LTDA (SAOUAPAC)CIIJOAO :SAKTACRUZONLASIMA

CONTROL OE EJECUC#ON DE UCtrACIONES V CONFOIATOS ANEXO 3

PAGINA I DE 2CON'".1, uno" xm Sul

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The Opinion of SAGUAPAC, Santa Cruz(In English)

COOPERATIVA DE SERVICIOS PUBLICOS SANTA CRUZ LTDA.

SAGUAPACSanta Cruz, Bolivia

Santa CruzMarch 19, 1998

Note No. GG.906/98 AF/GPS

Mr. Menahem LibhaberEnvironment and Urban Development DivisionDepartment HI, Regional Office for Latin America and the CaribbeanINTBAFRAD LA31NThe World Bank1818 H Street, N.W.Washington, D.C. 20433

Subject: Implementation Completion Report. IDA Credit 2187-BO

Dear Sir:

We have received your note forwarding the Implementation Completion Report for Credit2187-BO. We are very pleased with the World Bank's opinion of SAGUAPAC's performanceduring implementation of Credit 2187-BO.

We are attaching SAGUAPAC's opinion on project implementation and the plan for the operatingstage. We will send the final progress report and financial projections, including final financialdata after conciliation with FNDR, as soon as possible.

Thank you for your valuable cooperation during the project.

Yours sincerely

Carlos Medrano V.General Manager

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IMPLEMENTATION COMPLETION REPORTCREDIT 2187-BO

COOPERATIVA DE SERVIICIOS PUBLICOS SANTA CRUZ LTDA.SAGUAPAC

L BACKGROUND

On December 17, 1990, the Cooperativa de Servicios Publicos "Santa Cruz" Ltda. (SAGUAPAC)signed Development Credit Agreement 21'37-BO with the International Development Association(IDA) pursuant to the Credit Agreement siigned on the same day by the Republic of Bolivia.

As established in Article VI, Section 6.01 subsection (b) of the Development Credit Agreement, aSubsidiary Agreement was signed on August 2, 1991, by the National Regional DevelopmentFund (FNDR) as the government's financial agent and Cooperativa de Servicios Publicos "SantaCruz" Ltda. (SAGUAPAC). The agreement became effective on September 17, 1991.

As stipulated in clause six of the Subsidiary Agreement and based on the initial programming, thestructure of the financing included six categories to be covered with proceeds from IDA creditand SAGUAPAC contributions, as follows:

Financ:ing Structure

Category IDA SAGUAAC Total

1. Civil works 3,547,000 2,365,000 5,912,000

2. Equipment and materials 6,039,000 6,039,000

3. Consultancies 772,000 772,000

4. Repayment of PPF-444 158,000 158,000

5. Taxes 1,294,000 1,294,000

6. Unallocated 2,366,000 531,000 2,897,000

Total 12,882,000 4,190,000 17,072,000

* Exchange rate SDR x US$ = 1.39

Owing to changes in the SDR-US$ exchange rate, the amounts in dollars assigned to the differentcategories increased.

During the Bank Mission that visited Bolivia from July 18 to 26, 1995, authorization was given toreallocate the available funds and invest in supplementary sewerage works (secondary sewers) andexpansion of the stabilization ponds.

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An agreement amending the Subsidiary Agreement 2187-BO was signed on November 23, 1995,which provided for the following financing structure:

Financing Structure

Category IDA SAGUAPAC Total

1. Civil works 5,666,104.00 3,777,402.67 9,443,506.6

2. Equipment and materials 7,798,348.40 13,205.62 7,8F11W,.02

3. Consultancies j 193,840.40 1 193,840.40

4. Repayment PPF-444 160,143.78 13,120.00 173,263.78

Total 13,818,436.58 | 5,439,218.50 19,257,655.08* Exchange rate SDRxUS$ 1.4910

IL PROJECT OBJECTIVES

Annex 2, Part B, of the Credit Agreement between the Government of Bolivia and IDA describesthe project objectives as follows:

1. Expansion of SAGUAPAC's water and sewerage systems, including:

(a) Expansion of the water system in the northern part of the city of Santa Cruz de la Sierra,including drilling and equipping of two deep wells and installation of distributioninfrastructure;

(b) Expansion of the water system in the southern part of the city of Santa Cruz de la Sierra,including drilling and equipping of two deep wells and installation of distributioninfrastructure;

(c) Expansion of the water system in the eastern part of the city of Santa Cruz de la Sierra,including drilling and equipping of one deep well and installation of distributioninfrastructure;

(d) Rehabilitation of production and distribution facilities (including replacement of onehundred kilometers of pipe);

(e) Rehabilitation of the sedimentation ponds; and

(f) Construction of a pilot sewerage system using low-cost technology.

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2. Institutional strengthening of SAGIJAPAC, including:

(a) Preparation of final designs under Part C. 1 of the project;

(b) Consulting services for SAGUAPAC to improve its management systems, and training ofSAGUAPAC's staff in management, operation and maintenance, and commercial andfinancial administration;

(c) Acquisition and utilization of equipiment, including computer systems, for improving itsoperational, commercial and financial management; and

(d) Construction of an office building.

m1 PROJECT IMPLEMENTATION

The project's objectives were fully achieved, meeting 100 percent of expectations for the workplanned. Additional works to those initially planned were built which improved and expandedpotable water and sewerage services in the northern, southwestern, and northeastern parts of thecity of Santa Cruz.

Northern system. Three water wells (numbers 20, 24 and 25 at depths of 336 m, 315 m, and186 m, respectively, with an initial production capacity of 220 I/s), a 570 Vs pumping station, anda 5,000 m3 storage tank were built within the period envisaged in Credit 2187-BO. Materials andequipment were also procured to carry out the works. An additional well was built in this zone,optinizing water resources and the hydrogeological characteristics of the city's subsoil.

Southwestern system. Six potable water wells (numbers 17, 17A, 22, 23, 27, NP1 and NP2 atdepths of 294 zn, 80 zn, 320 in, 327 m. 204 mn, 308 m and 320 in, respectively, with a productioncapacity in the test phase of 488 Vs), a 420 Vs pumping station, and a 6,000 m3 storage tanks werebuilt within the period envisaged. The materials needed for the works, such as pumps, motors,control panels and transformers, were acquired within the periods established in the contracts.Annex 3 shows the status of the contracts. In this system, five additional wells were built,optimizing water and financial resources.

Northeastern system. Well number 21 (318 m deep, with a production capacity of 90 Vs), a3,800 m3 storage tank, and a well interconnection were built for this system. Materials andequipment were purchased for the works.

Distribution system. This component included the purchase of 303,950 m of secondary pipe(diameters from 75 mm to 200 mm), and 62,000 m of main pipe (diameters over 200 mm) for atotal of 365,950 m of potable water pipe.

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Proceeds from the credit were used to install 242,498 m of secondary pipe and 19,835 m of mainpipe, for a total of 262,243 m to serve 21,772 house connections. SAGUAPAC counterpartfunds for works and materials were used to install 61,452 m of secondary pipe and 42,165 m ofmain pipe, benefiting 225,900 people.

Construction of the three storage tanks and pumping stations mentioned above ensure moreuniform distribution and pressure in the potable water systems.

Materials for connections. During the project, 44,795 house meters, 7,947 repair kits andmaterials for connections were procured.

Well maintenance. Wells 11 and 13 were rehabilitated to obtain a production flow of 154 Vs.

Sanitary sewers. Works were built to expand the sewerage system in neighborhood units 28, 23,26, 31, 33, 15 (partial), 32, 35 (partial), 39 and 62, for a total of 78,182 m, with 5,665 houseconnections, to the benefit of 46,736 people. Neighborhood unit 28 was built with retroactivefinancing.

Stabilization ponds. The old stabilization ponds in the northern zone were cleaned, removing54,000 m3 of solid waste between November 1989 and March 1990. The work was done withretroactive financing. From November 1995 to December 1997, the stabilization ponds wereexpanded by 13.4 ha. The work was not included in the original project and was financed withthe surplus from the credit.

Pumping station E1. Equipment was purchased to rehabilitate wastewater pumping station E-1, with a capacity of 381 Vs.

Institutional improvement. SAGUAPAC conducted institutional strengthening studies usingindependent consultants under small contracts, as follows:

* Investment recovery study* Economic and financial diagnostic study based on a comparison with other water

companies* Studies on manuals of functions and procedures* Improvement in the operation and maintenance of systems and Unaccounted for Water* Management of groundwater resources* Control of leaks in the water system

Construction of an office building. SAGUAPAC's office building was constructed and fullyfurnished.

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IV. COMPLIANCE

The project objectives were attained within the deadlines and 25 percent of additional work wasdone. FNDR did not disburse the total in Jnited States dollars stipulated in the amendment toSubsidiary Agreement 2187-BO. From December 1991 to December 1997, 52 reimbursementrequests were sent to FNDR (see Annex 2), 50 of which were fully covered and one partiallycovered, for a total of US$13,295,637.44. This total includes US$46,296.55 which FNDR iscurrently processing. Request number 52 was not covered by FNDR because the variation in theSDR-US$ exchange rate for SDRs meant that no Credit funds were available.

V. PROJECT SUSTAINABILITY

SAGUAPAC's administrative and financial structure ensures sustainability of the project. It hasincluded the funds needed to operate and maintain the works in its annual budgets, therebyproviding continuity for its potable water and sanitary sewerage services.

VL IDA PERFORMANCE

During the project, IDA's strong performance was a detenrining factor in achieving theobjectives. The project's success was largely due to the assistance provided by Bank staff; whoresponded flexibly and expeditiously to SAGUAPAC's requirements. Forty-six bidding processeswere held between January 1992 and December 1996, which received the Bank's nonobjection.Three other bids were recognized retroactively by the Bank.

The Bank's supervision and evaluation missions to SAGUAPAC to monitor progress in Credit2187-BO were very positive and responsivre and dealt with the different situations efficiently andcompetently. The suggestions made by Bamk staff were acted on by SAGUAPAC, which wasessential for the success of the project.

VIL BORROWER PERFORMANCE

During the project, SAGUAPAC aimed to carry out the works included in the investment plan asquickly as possible, seeking economy and efficiency without neglecting quality. The result was alarger quantity of works than originally planned (25%). FNDR was responsible for delays inprocessing the reimbursement requests but the situation was corrected without holding up theproject.

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VIHL ASSESSMENT OF OUTCOME

The project's objectives were achieved. Access to the potable water system was extended to anadditional 225,900 people and 21,772 house connections were made, which contributed to anincrease in service coverage in Santa Cruz from 65% in 1992 to 80% in 1996. Sewerage serviceswere expanded through 5,665 connections which benefited 46,736 people, with coverageincreasing from 26% in 1992 to 32% in 1996. Under the two systems, 272,636 people benefiteddirectly from the project which improved the standard of living, health situation, and theenvironment.

As for the institutional objectives, technical assistance was contracted in the administrative areaand consulting services were hired in the technical operations and maintenance areas. The studiesimproved company management. Computer equipment was procured for continuous dataprocessing and equipment was purchased to improve the operation and maintenance of the waterand sewerage systems.

IV. PERFORMANCE OF CONSULTANTS AND CONTRACTORS

In general, the contractors performed satisfactorily, although there were some delays owing toweather conditions. The suppliers performed to SAGUAPAC's full satisfaction. The consultantsperformed their tasks efficiently and expeditiously.

X. LESSONS LEARNED

Although resources were insufficient when the credit proceeds were reallocated, SAGUAPACconcluded the works with its own resources. FNDR did not comply with its commitment todisburse all the reallocated funds as established in the amending agreement to SubsidiaryAgreement 2187-BO of November 23, 1995, owing to the variation in the SDR exchange rate.

XL PROJECT COST

The project cost a total of US$19,151,290 for the civil works, equipment and materials,consultancies, and repayment of PPF-444. Credit 2187-BO totaled US$13,295,637 andSAGUAPAC contributed US$5,855,635. Annex 1 presents investments by category and Annex 3shows the costs for the different investment components.

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Annex 7Project Review from the Borrower's Perspective

The Opinion of SEMAPA, Cochabamba(Ia Spanish)

SERVICIO DE AGUA POTABLE Y ALCANIrTLADE COCHABAMBA

,,, .~, *' ..,!t

24 de abrl de 1.998*DDG.100/DPLUGCAR334/98

SehorJames WolfensohnPRESIDENTE BANCO MUNDIALWashington D.C.

De mi consideracion:

Asunto:ENVIO COPIA DE NOTA DDG.1000/DPL.CAR-331/98

Para su conocimiento, adjunto remito a Ud. copia del informe enviado al Sr. MenahemLibhaber referente al Cumplimienrto de Rehabilitaci6n de Agua Potable yAlcantarillado Sanitario en Ciudades Mayores (Credito IDA-21 87/BO).

Con este motivo, saludamos a Ud. atentamente.

Ing. Arturo Coca SelemeGERENTE GENERAL SEMAPA

ACS/hscAdj.: Lo indicadoc.c.: Arch.

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SERVICIO DE AGUA POTABLE Y ALCANTARILLADO DE COCHABAMBA

23 de abril de 1.998DDG.1000/DPL.CAR-331/98

SenoresBANCO MUNDIALWashington D. C.

Atn.: Sr. Menahem LibhaberTASK MANAGER

De mi consideraci6n:

Asunto: INFORME DE CUMPLIMIENTO DE REHABILITACION DE AGUA POTABLE YALCANTARILLADO SANITARIO EN CIUDADES MAYORES (CREDITO IDA-2187/BO)

Conforme a vuestra solicitud de fecha 17 de febrero de 1.998 remitida a SEMAPA, tenemos a bien emitirnuestra opini6n y efectuar algunas observaciones al Informe presentado por su persona, referente alCUMPLIMIENTO DE LA IMPLEMENTACION (ICR) DEL CREDITO 2187-BO correspondiente a la ciudad deCochabamba, de acuerdo a puntos espec(ficos que nos ha parecido necesario aclarar. Asi mismo se haceconocer el Plan para la Fase de Operaci6n solicitada.

I.- DEFINICI6N DE LOS OBJETIVOS

Los objetivos iniciales previstos para la ejecuci6n de la rehabilitaci6n del-Sistema de Agua Potable para laciudad de Cochabamba, con recursos provenientes del cr6dito IDA-2187/BO y contraparte de SEMAPA,incluyeron los siguientes componentes:

1.1 Rehabilitaci6n y Expansi6n del Sistema de Agua Potable:

a) Rehabilitaci6n del campo de pozos de Vinto, instalaci6n de la tuberia de impulsi6n y construcci6n deuna planta de tratamiento con una capacidad de 100 I/s.

b) Rehabilitaci6n del embalse de Wara Wara, construcci6n de la tuberfa de aducci6n, tanque dealmacenamiento e instalaci6n de filtros para un caudal de 100 /s.

c) Rehabilitaci6n de la Galerfa fiitrante de Chungara, incluyendo tuberia de impuisi6n, tanque dealmacenamiento y filtros para una producci6n de 60 I/s.

d) Rehabilitaci6n de la planta de tratamiento de Cala Cala e incremento de su capacidad, de 235 a 400I/s.

e) Rehabilitaci6n de la Estaci6n Elevadora de Conia Cona, incluyendo el colocado de la cubierta altanque antiguo y sustituci6n de equipos de bombeo y tableros de control.

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f) Ampliaci6n de la red de distribuci6n incluyendo conexiones domiciliarias con medidores yconstrucci6n de dos (2) tanques de almacenamiento.

g) Construcci6n y equipamiento de 4 pozos profundos, incluyendo 13 Km., de tuberfa de impulsi6n paraun caudal de 200 Vs.

1.2 Fortalecimiento Institucional

a) Preparaci6n de i) disenos finales ii) Plan maestro de agua potable.

b) Programa PROFISE que incluye los servicios de asesoria para fortalecer los sistemas deadministraci6n y capacitaci6n del personal de SEMAPA, en Gerencia, Operaci6n y Mantenimiento,Administraci6n Comercial y Financiera..

c) Adquisici6n de equipos de computaci6n para mejorar las dreas de operaci6n, comercial y financiera.

2.- LOGRO DE LOS OBJETIVOS

A la conclusi6n de la fecha final establecida para el cierre del proyecto, consideramos que una buena partede los objetivos previstos no fueron logrados por una mala administraci6n de la gesti6n anterior aseptiembre de 1.997, al respecto nos permitimos a continuaci6n analizar uno a uno los proyectos realizadoscon fondos del Credito 2187-BO.

i) Objetivos Ffsicos

Los objetivos relativos a ampliaci6n de redes, mejoramiento y ampliaci6n de las plantas de tratamiento,ampliaci6n de tanques de almacenamiento, mejoramiento de sistemas de bombeo, refacci6n y ampliaci6nde la fuente superficial de Wara Wara, se curnplieron pero con atrasos significativos.

Los objetivos relativos a otras fuentes de abastecimiento como ser pozos profundos de las zonas de Vinto ySipe Sipe, no fueron cumplidos como se esperaba por problemas politicos generados debido a la fuerteoposici6n de parte de los municipios del \talle Bajo y la poca o ninguna negociaci6n con los directosinteresados. Consideramos que de haber obrado de manera adecuada se debia perforar los pozos eimplementar el total de las obras programadas.

a) En efecto, la postergaci6n de las obras programadas de los pozos profundos de Vinto, planta detratamiento de dichas aguas, construcci6n de los conductos de las mismas, se debe a conflictos socio-politicos y a la ausencia de recursos legales, para un aprovechamiento de las aguas subterraneas dedicha regi6n.

El incumplimiento en la ampliaci6n de dichas fuentes en el periodo del proyecto afecta sensiblemente ala efectividad del mismo, puesto que el aumento en la cobertura no es seguido por [a cantidad de aguasuficiente para responder a la misma.

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La no obtenci6n de un caudal adicional previsto de 630 I/s., afecta seriamente la obtenci6n de resultadospositivos que benefician al proyecto. El mayor caudal adicional a obtener provenla de la perforaci6n depozos, en Vinto, lo que no fue posible por la soberbia con que la anterior administraci6n quiso imponer ala fuerza estas obras.

A esta situaci6n se suma el hecho de que los 2 pozos profundos perforados por LAYNE con recursosnacionales en el Paso y Tiquipaya, no fueron con resultados satisfactorios. En el pozo de El Paso se haperforado un pozo que solo capta acufferos profundos cuya recarga es dudosa, por los analisisgeofisicos realizados en la zona y los distintos informes en contra elaborados por la Sociedad deIngenieros (SIB), por el Convenio Boliviano Aleman de Aguas Subterraneas (CABAS) y por el ServicioNacional de Geologia y Minerfa - SERGEOMWN, que recomiendan claramente la perforaci6n de pozoscon profundidades no mayores a 200 m.

A pesar de todas las advertencias, SEMAPA perfora el pozo de El paso, a un costo de 1.477.000 US$.logrando a la fecha producir un caudal de 40 I/s. en lugar de 120 I/s. originalmente esperados. Esnecesario hacer notar que este caudal de 40 I/s. se obtiene en varios pozos de El Paso, llegando inclusoa 50 I/s con una inversi6n mucho menor a un pozo profundo, raz6n por la que no se justifica haberrealizado inversiones tan onerosas.

No podemos dejar de mencionar que en el pozo de El Paso, la empresa LAYNE coloc6 el chupador de labomba a la misma altura del primer filtro, hecho que bajo ninguna circunstancia es admitida por normaalguna, lo que ha ocasionado danos en la estructura del pozo.

El pozo Tiquipaya perforado por LAYNE a un costo de 1.007.000.- US$., fue abandonado por eiContratista sin haber realizado la prueba de bombeo y menos entregado oficialmente a SEMAPA, seespera obtener de este pozo, luego de una inversi6n adicional, un caudal no mayor a 20 I/s.

Como pueden notar estos 2 pozos que juntos debian aportar 240 I/s., apenas incrementaran el caudal en60 I/s. que representa el 25% del caudal previsto.

Es necesario hacer notar que estos 4 pozos profundos debian ser perforados en Vinto, pero losresultados son los mismos debido a que los estudios incluyen los mismos acufferos profundos, cuyosresultados son desastrosos.

b) Como es de vuestro conocimiento, el proyecto Wara Wara tue ejecutado con enormes dificultades queocasionaron danos econ6micos a nuestra entidad antes que una correcta terminaci6n de la obra, unaparte de los canales de abastecimiento a la presa no fueron revestidos; la tuberfa de aducci6n a la plantade Aranjuez no cumple con las exigencias requeridas para las condiciones de operaci6n, debido a que elrecubrimiento interior bituminoso de la misma se esta desprendiendo continuamente y ello ocasionaproblemas de taponamiento en las valvulas reductoras de presi6n y consecuentemente una sobre presi6nen la linea que ya ha causado varias roturas de esta tuberia, con las l6gicas consecuencias de paralizarel sistema para reparar los danos ocasionados.

c) Se anul6 ia implementaci6n de la galerfa Chungara, que fue incluida inicialmente entre las obras quedebian ser ejecutadas, por razones totalmente ajenas. La concepci6n original de dicho proyecto debiapermitir captar 60 Vs. adicionales, caudal que no se halla disponible.

Calfe Kapec Yupgnqui No. 2336 Cesilla 1647 Tel6fonos 90751 - 90756 Fax. (591) (42) 90752 Cochabamba - Bolivia

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d) La rehabilitaci6n de la planta de tratamiento es una de las pocas obras ejecutadas sin problemas,excepto por las demoras que ha sufrido por las llegadas tardias de los materiales requeridos deimportaci6n. Esta Planta se halla en operaci6n y su capacidad sera ocupada al maximo.

e) La rehabilitaci6n de la Estaci6n Elevadora de Cona Cona en relaci6n a la sustituci6n de los equipos debombeo y tableros, tiene deficiencias debido a que se adjudic6 a ROGHUR LTDA. el tablero y aEQUITEC BOLIVIANA S.R.L. Ia bomba, y por esta causa el conjunto bomba - tablero no es el masadecuado, porque ROGHUR LTDA. entreg6 un tablero de 200 HP y EQUITEC BOLIVIANA S.R.L. entreg6un motor de 250 HP, lo que esta causando muchos inconvenientes de tipo operacional que se estansuperando con mucha dificultad y que todavia a estas alturas nos encontramos en espera de lafabricaci6n de dispositivos para los tableros que permitan resolver de manera definitiva estos detalles.

f) La ampliaci6n de la red no se salva de la falta de experiencia del personal de Planificaci6n de la gesti6nanterior, asi, no comprendemos como fue posible obligar a los Contratistas ejecutar las obras en la mitaddel tiempo propuesto cuando sabfan muy bien que no se disponfa de los materiales que debia entregarBarbara, sobre todo accesorios y valvulas que son imprescindibles para estas instalaciones.

Esta situaci6n ha provocado que en lugar de una instalaci6n contfnua de las redes, se instale solotuberfas sin accesorios y una vez llegados los mismos a la obra, el contratista se vea obligado a fabricarniples en cantidad y con ello se demore la ejecuci6n y se incremente el costo de la obra, al final estaquedando un exagerado numero de accesorios sin uso y ello tiene un costo ocioso para la obra que nosera recuperado.

Asf mismo, no concebimos como se puede ampliar redes para abarcar mas areas de servicio cuando nose ha logrado incrementar el caudal de agua disponible en las fuentes, en este caso se hace notorio el nocontar con 630 Is. que se prometieron al comienzo del proyecto, que en este momento hacen muchafalta en las redes, aspecto que ocasiona serios problemas sociales y hace que los ingresos de SEMAPAse vean perjudicados por la falta de agua disponible para su distribuci6n, a traves de dichas redesnuevas, financiadas con fondos del credito.

La construcci6n de los tanques de la planta de Cala Cala y Coronilla permitiran a SEMAPA almacenarmayor volumen de agua y mejorar la distribuci6n, pero mientras no se incremente el caudal requerido,no sera ninguna soluci6n, porque actualmionte se hallan permanentemente vacfos por falta de aguadisponible para su almacenamiento.

Consideramos que una inversi6n mas acertada hubiera constituido el mejoramiento del sistemaEscalerani (por ejemplo el revestimiento del canal de cuencas vecinas de Escalerani - La Cumbre), comotambien el control de perdidas fisicas en la red y en otros sistemas de aducci6n.

g) La construcci6n y equipamiento de 4 pozos profundos, incluyendo 13 Km. de tuberfa de impulsi6n no sehizo realidad y se qued6 en proyecto. Este sistema nuevo debia permitir un incremento de 200 I/s. lo quetampoco ha sucedido, raz6n por ia cual se puede establecer claramente que este componente delproyecto fue un fracaso total.

Como puede observarse, cada uno de los componentes del proyecto en general, no han significado unaporte real para el mejoramiento del servicio a la poblaci6n, sobre todo considerando que no se haincrementado para nada el caudal requerido. A falta de este incremento la implementaci6n del proyecto

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en su conjunto se puede decir que fue un fracaso, excepto pequenos componentes que lo salvan de serun total fracaso.

En relaci6n a la segunda parte de este componente como es el Fortalecimiento Institucional, podemosmencionar lo siguiente:

a) La preparaci6n y diserno final del plan maestro, tiene deficiencias, pues hemos comprobado que porrazones que se encuentran fuera del aspecto tecnico, la administraci6n anterior de SEMAPA ha reducidodristicamente la demanda per-capita, lo que origina un caudal proyectado fuera de lo real . Nocomprendemos como es posible que al no poder resolver la captaci6n de nuevas fuentes deabastecimiento, se limiten a disminuir la demanda por habitante/dra y se quiera forzar a que lapoblacion no consuma el ano 2015 mas de 147 IlHabld(a, cuando estos valores no se ajustan a larealidad ni siquiera actual, consideramos que

forzar datos para justificar algo no es la manera responsable de llevar adelante un proyecto de magnitudque debe resolver los problemas de la poblaci6n y no a la inversa.

b) El programa PROFISE que ha demandado una inversi6n mayor a un mill6n de d6lares, no ha logradoresolver temas de importancia para SEMAPA. Consideramos que la situaci6n anterior al PROFISE seha mantenido hasta el cambio de administraci6n debido a que dicho fortalecimiento no se ha visto encifras. Actualmente SEMAPA, ha mejorado su administraci6n, prueba de ello es que en un corto tiempose han incrementado sus ingresos lo que ha permitido cumplir obligaciones por mas de 2 millones ded6lares con el Banco Mundial, BID, gobierno Frances y FNDR.

Para lograr buenos resultados, SEMAPA ha incrementado sus fuentes de producci6n de agua con uncaudal de producci6n inmediato, cuyo resumen es:

* Pozos el cercado (nuevos) 13 I/s.* Pozo El Paso (nuevos) 35 Is.* Pozo Profundo El Paso 40 I/s.

- Incremento inmediato 88 vs.

Por otra parte, actualmente se esta ejecutando el contrato con el protocolo Frances que permitiradisponer en los pr6ximos 6 meses de 240 Is. adicionales.

Con otros proyectos similares se pretende ilegar a explotar lo siguiente:

* Incremento inmediato 88 /s.* Pozos protocolo Francia 240 I/s.* Contrato Sinergia 45 /s.* Proyecto Titiri 130 I/s.* Recuperaci6n pozos Vinto 40 I/s.* Otros Dozos Cercado 40 I/s.

Incremento inmediato 543 I/s.

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d) La rehabilitaci6n de la planta de tratamiento es una de las pocas obras ejecutadas sin problemas,excepto por las demoras que ha sufrido por las llegadas tardfas de los materiales requeridos deimportaci6n. Esta Planta se halla en operaci6n y su capacidad sera ocupada al maximo.

e) La rehabilitaci6n de la Estaci6n Elevadora de Cona Cona en relaci6n a la sustituci6n de los equipos debombeo y tableros, tiene deficiencias debido a que se adjudic6 a ROGHUR LTDA. el tablero y aEQUITEC BOLIVIANA S.R.L. Ia bomba, y por esta causa el conjunto bomba - tablero no es el masadecuado, porque ROGHUR LTDA. entreg6 un tablero de 200 HP y EQUITEC BOLIVIANA S.R.L. entreg6un motor de 250 HP, lo que esta causando muchos inconvenientes de tipo operacional que se estansuperando con mucha dificultad y que tc,davfa a estas alturas nos encontramos en espera de lafabricaci6n de dispositivos para los tableros que permitan resolver de manera definitiva estos detalles.

f) La ampliaci6n de la red no se salva de la falta de experiencia del personal de Planificaci6n de la gesti6nanterior, asi, no comprendemos como fue posible obligar a los Contratistas ejecutar las obras en la mitaddel tiempo propuesto cuando sabian muy bien que no se disponta de los materiales que debfa entregarBarbara, sobre todo accesorios y valvulas que son imprescindibles para estas instalaciones.

Esta situaci6n ha provocado que en lugar de una instalaci6n continua de las redes, se instale solotuberfas sin accesorios y una vez llegados los mismos a la obra, el contratista se vea obligado a fabricarniples en cantidad y con ello se demore ia ejecuci6n y se incremente el costo de la obra, al final estaquedando un exagerado numero de accesorios sin uso y ello tiene un costo ocioso para la obra que nosera recuperado.

Ast mismo, no concebimos como se puede ampliar redes para abarcar mas areas de servicio cuando nose ha logrado incrementar el caudal de agua disponible en las fuentes, en este caso se hace notorio el nocontar con 630 Is-. que se prometieron al comienzo del proyecto, que en este momento hacen muchafalta en las redes, aspecto que ocasiona serios problemas sociales y hace que los ingresos de SEMAPAse vean perjudicados por la falta de agua disponible para su distribuci6n, a traves de dichas redesnuevas, financiadas con fondos del cr6dito.

La construccion de los tanques de la planta de Cala Cala y Coronilla permitiran a SEMAPA almacenarmayor volumen de agua y mejorar la distribuci6n, pero mientras no se incremente el caudal requerido,no sera ninguna soluci6n, porque actualrnente se hallan permanentemente vacfos por falta de aguadisponible para su almacenamiento.

Consideramos que una inversi6n mas acertada hubiera constituido el mejoramiento del sistemaEscalerani (por ejemplo el revestimiento de l canal de cuencas vecinas de Escalerani - La Cumbre), comotambien el control de perdidas ffsicas en la red y en otros sistemas de aducci6n.

g) La construccion y equipamiento de 4 pozos profundos, incluyendo 13 Km. de tuberia de impulsi6n no sehizo realidad y se qued6 en proyecto. Este sistema nuevo debta permitir un incremento de 200 I/s. Io quetampoco ha sucedido, raz6n por la cual se puede establecer claramente que este componente delproyecto fue un fracaso total.

Como puede observarse, cada uno de los componentes del proyecto en general, no han significado unaporte real para el mejoramiento del servicio a Ia poblaci6n, sobre todo considerando que no se haincrementado para nada el caudal requeridio. A falta de este incremento la implementaci6n del proyecto

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en su conjunto se puede decir que fue un fracaso, excepto pequenos componentes que lo salvan de serun total fracaso.

En relaci6n a la segunda parte de este componente como es el Fortalecimiento Institucional, podemosmencionar lo siguiente:

a) La preparaci6n y diseno final del plan maestro, tiene deficiencias, pues hemos comprobado que porrazones que se encuentran fuera del aspecto tecnico, la administraci6n anterior de SEMAPA ha reducidodrasticamente la demanda per-capita, lo que origina un caudal proyectado fuera de lo real . Nocomprendemos como es posible que al no poder resolver la captacion de nuevas fuentes deabastecimiento, se limiten a disminuir la demanda por habitante/dfa y se quiera forzar a que lapoblaci6n no consuma el ano 2015 mas de 147 I/Hab/d[a, cuando estos valores no se ajustan a larealidad ni siquiera actual, consideramos que

forzar datos para justificar algo no es la manera responsable de llevar adelante un proyecto de magnitudque debe resolver los problemas de la poblaci6n y no a la inversa.

b) El programa PROFISE que ha demandado una inversi6n mayor a un mill6n de d6lares, no ha logradoresolver temas de importancia para SEMAPA. Consideramos que la situaci6n anterior al PROFISE seha mantenido hasta el cambio de administraci6n debido a que dicho fortalecimiento no se ha visto encifras. Actualmente SEMAPA, ha mejorado su administraci6n, prueba de ello es que en un corto tiempose han incrementado sus ingresos lo que ha permitido cumplir obligaciones por mas de 2 millones ded6lares con el Banco Mundial, BID, gobierno Frances y FNDR.

Para lograr buenos resultados, SEMAPA ha incrementado sus fuentes de producci6n de agua con uncaudal de producci6n inmediato, cuyo resumen es:

* Pozos el cercado (nuevos) 13 I/s.* Pozo El Paso (nuevos) 35 I/s.* Pozo Profundo El Paso 40 I/s.

Incremento inmediato 88 Vs.

Por otra parte, actualmente se esta ejecutando el contrato con el protocolo Frances que permitiradisponer en los pr6ximos 6 meses de 240 Vs. adicionales.

Con otros proyectos similares se pretende Ilegar a explotar lo siguiente:

* Incremento inmediato 88 I/s.* Pozos protocolo Francia 240 I/s.* Contrato Sinergfa 45 Vs.* Proyecto Titiri 130 I/s.* Recuperaci6n pozos Vinto 40 I/s.* Otros pozos Cercado 40 I/s.

Incremento inmediato 543 Vs.

Calle Kapac Yupgnqui No. 2336 Casilla 1647 Tel6fonos 90751 -90756 Fax. (591) (42) 90752 Cochabomba - Bolivia

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Consideramos que estas acciones que ya se hallan en ejecuci6n con recursos propios de SEMAPA,resolveran los problemas inmediatos de Cochabamba, aspecto que estuvo descuidado por la anterioradministraci6n, raz6n por la cual esperamos disponer de todas estas aguas en un plazo no mayor a los 8mese3.

Ademas de estas fuentes, SEMAPA se encuentra empenada en llevar adelante nuevas alternativas, loque redundara en beneficio directo para las obras realizadas con el pr6stamo 2187 y permitira a nuestraentidad mejorar sus ingresos y disminuir la morosidad heredada de la administraci6n pasada, cuyosrecursos haran posible enfrentar en mejores condiciones las necesidades de la poblaci6n.

La escasez de agua obliga a SEMAPA a un racionamiento en las horas de servicio, mas agudo que elpracticado anteriormente y que se ha acentuado por el fen6meno climatol6gico del Nino, el cual hacastigado a Cochabamba este ultimo ano, con una sequia considerada como una de las mas agudas enlos Ciltimos 50 ahos. En efecto, los embalses de Escalerani y Wara Wara este aino han sufrido la recargamas baja registrada en su historia, hallandose actualmente vac[os y sin reservas que permitan aSEMAPA otorgar un servicio minimo a ia poblaci6n.

c) La adquisici6n de los equipos de computacion permiti6 en alguna medida mejorar el sistema, pero no losingresos debido a la fuerte corrupci6n que existfa en dicha Direcci6n Comercial. Actualmente se haadquirido un nuevo lote de computadoras y programas de Oltima generaci6n, ello permitira mejorar aunmas los ingresos actuales.

ii) Objetivos financieros

Estos objetivos seran dificilmente alcanzados mientras las fuentes de agua sean insuficientes y mientras lamicro-medici6n domiciliaria no sea implementetda para toda la poblaci6n, ambos programas seran hechosrealidad en los pr6ximos meses y se tiene como meta resolver esta situaci6n. Inicialmente se ha licitado lacompra de 500 medidores de 1" lo que permitira un control permanente a los clientes con mayor consumo,sobre todo comerciales e industriales.

No obstante la actual gesti6n de SEMAPA, ha iniciado una campana de recuperaci6n de ia mora dejada porla gesti6n precedente y un trabajo efectivo de cortes en los casos de clientes que no cumplen con el pago delservicio, dentro los 30 dias posteriores al vencimiento, lo que ha permitido que desde el mes de octubrepasado se incrementen las recaudaciones diarias respecto a los montos recaudados por la gesti6n anterior.

iii) Objetivos institucionales

Se ha confiado a la consultora brasileoa ENCIIBRA ei estudio del fortalecimiento institucional de SEMAPA(Proyecto PROFISE) cuyo costo de contratc fue muy elevado ( $us 1.000.000.oo) siendo financiadoparcialmente por el Banco Mundial. Los manuales de operaci6n elaborados por dicha empresa, aunquetienen muchos aspectos positivos, no responden en gran parte a las necesidades de SEMAPA y son unacopia de simples manuales usados en paises con otra realidad econ6mica y social, totalmente distinta anuestra entidad.

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El manejo institucional de SEMAPA sera modificado por el operador privado que aplicara alternativasacordes a su estructura empresarial, por lo tanto consideramos que fue inutil invertir sumas de dinero tanimportantes, si se tenia proyectada la concesi6n de SEMAPA al sector privado hecho que sucedera comomaximo en agosto de la presente gesti6n.

iv) Objetivos sociales

Estos objetivos no podran ser alcanzados sino se ampl(an las fuentes de agua. Ampliar la cobertura no essuficiente sin fortalecer las fuentes de abastecimiento de agua. Actualmente se estan ejecutando proyectospara ampliar fuentes y redes secundarias de distribuci6n en zonas donde no existfa aun el servicio. Estasampliaciones son posibles de ejecutar con la participaci6n de los vecinos que aportan con un 80% de lainversi6n directa y SEMAPA aporta el 20% restante, ademas de la Supervisi6n de las obras.

Consideramos que se obtendra un mejoramiento sustancial cuando entre en servicio el proyecto Misicuni, elcual resolvera la escasez de agua por mas de 30 a-nos y cuya puesta en servicio esta prevista para el aho2001.

3.- FACTORES PRINCIPALES QUE AFECTARON LA IMPLEMENTACION DEL PROYECTO

Creemos en la racionalidad de sus comentarios, cuando menciona que la implementaci6n del proyecto sevi6 afectada negativamente por varios factores, es decir:

* La injerencia polftica en la empresa, lo que ocasion6 la inestabilidad y autonomfa gerencial.

* Debilidad financiera.

* Base tecnica d6bil en la preparaci6n y evaluaci6n del proyecto.

* Dificultades con la implementaci6n de los documentos estandares del Banco (lo que signific6 elatraso en las publicaciones de licitaci6n, falta de experiencia de los proveedores, en la proporci6nde ofertas).

* Debilidad de las unidades ejecutoras que contaron con personal de escasa capacitaci6n y en unagran mayoria sin experiencia.

Pero tambien estamos conscientes que todos estos factores negativos han sido producto del descuido en elcumplimiento de funciones de los anteriores ejecutivos y funcionarios de la empresa, que ademas de contarcon las limitaciones propias de la empresa, no realizaron un trabajo responsable capaz de asumir unproyecto de tat magnitud.

Las demoras en el cumplimiento de los cronogramas iniciales del proyecto se relacionan a factores externos,entre los que se destacan los problemas sociales-antes mencionados, al postergarse hasta la fecha laampliaci6n de fuentes, que afectan sensiblemente al proyecto.

Ademas influy6 sensiblemente en el cumplimiento de los cronogramas iniciales la falta de financiamientopara la contraparte local, la misma que tuvo que ser resuelta con un prestamo sin intereses de 7 millones deUS$ otorgado por la empresa Misicuni, la cual tenia previsto recuperar dicho monto en un futuro inmediato

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mediante la venta de agua, lo que no sucedi6, pues la anterior gesti6n de SEMAPA no fue consecuente conla implementaci6n del proyecto Misicuni, que tenia el prop6sito de resolver en un plazo mediato laproblematica del agua de Cochabamba.

Asimismo, se encontraron durante la ejecuci6n de obras, imprevistos en la construcci6n, que demoraron laconclusi6n de las mismas, pues muchos elernentos susceptibles de litigio con las empresas, no fuerondebidamente evaluados por la anterior gesti6n de SEMAPA, antes de la firma de los contratos con lasempresas (deficiencias en la evaluaci6n de la calidad de los suelos, atrasos en la importaci6n de materiales,por falta de experiencia de quienes lievaron adelante la implementaci6n de los proyectos, etc.).

Ademas la anterior gesti6n impuso a los contratistas la disminuci6n de los plazos propuestos para cadacontrato a la mitad del tiempo originalmente previsto, con el fin de obtener exitos politicos (eleccionesnacionales de 1997); sin haber previsto que los materiales no iban a estar fabricados en la mitad de dichotiempo, puesto que ninguna fabrica en el mundlo, para una cantidad tan importante de materiales requeridospodia lograr abastecer los mismos bajo condiciones tan limitadas de tiempo, lo que demuestra una vez masla total falta de experiencia de los ejecutivos anteriores y que las obras de este tipo no se hacen porcapricho, sino bajo una programaci6n coordinada en el suministro de los materiales y la instalaci6n de losmismos. En realidad los proyectos fueron concluidos en los plazos inicialmente previstos en las propuestasde los contratistas.

Todos estos elementos ocasionaron sobre-costos importantes, que tuvieron que ser soportados porSEMAPA, puesto que la AIF no acept6 compartir estos gastos adicionales.

4.- SOSTENIBILIDAD DEL PROYECTO

La sostenibilidad del proyecto en el plazo inmediato esta garantizada con la implementaci6n de nuevosproyectos de captaci6n de aguas subterraneas (construcci6n de 4 pozos semi-profundos con el creditofrances), con la explotaci6n de las aguas del rfo Titiri, con la reducci6n de p6rdidas con el proyecto deSinergia (entubamiento de la cafda de las aguas de Escalerani) y con la explotaci6n de aguas subterraneasen el Cercado que ya ha sido iniciada con la perforaci6n de dos pozos que ingresaron en servicio en dfaspasados, a esto se ahade el desarrollo adicional y habilitaci6n del pozo profundo que fue abandonado por laanterior gesti6n. El caudal estimado de todas estas fuentes superan los 540 I/s, que responderan a lademanda actual de la poblaci6n.

En el mediano y largo plazo, la sostenibilida,d del proyecto sera garantizada por la implementaci6n delproyecto Misicuni, el cual fue reiniciado a principios del mes de marzo de 1998 y se espera este concluido amediados del ano 2001.

La concesi6n de SEMAPA a manos privadas, prevista para mediados de 1998, garantizara la sostenibilidadde todos estos proyectos en lo que se refiere a mantenimiento y servicio.

Es de notar que el proyecto de la zona Sudeste, abandonado por la anterior gesti6n, tue concluido en sudiseno final en noviembre pasado, tramitando actualmente nuestra gesti6n la pronta aprobaci6n por partedel BID, cuya implementaci6n permitira realizar una inversi6n adicional de 25 millones de US$ para laconstrucci6n de las redes de agua y alcantarillado, que daran servicio a 100.000 habitantes de los barriosmas pobres de nuestra ciudad.

;

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5.- DESEMPENO DEL BANCO

Ignoramos cual fue la performance de la AIF en la etapa de ejecuci6n del proyecto, consideramos que lamisma se refleja por los resultados obtenidos a la conclusi6n del proyecto.

6.- DESEMPENO DE LOS PRESTATARIOS

La anterior gesti6n de SEMAPA no prest6 la celeridad que requeria la implementaron del proyecto. Si bienes cierto que se tropez6 con problemas de tipo legal y social que impidieron que las fuentes previstas para elmejoramiento del abastecimiento de agua (pozos de Vinto) no puedan ser viabilizadas, ia gesti6n anteriormostr6 inexperiencia en la planificaci6n y en las decisiones oportunas que deberfa adoptar. Comoconsecuencia, las obras no fueron concluidas segun el cronograma previsto, ocasionando sobre-costosonerosos a la economra de SEMAPA.

Pero mas aun, se constata que la planificaci6n del proyecto fue llena de improvisaciones y los resultadosobtenidos no son los inicialmente esperados, puesto que:

* No se incrementaron las fuentes de producci6n de agua pero si se increment6 la capacidad dealmacenamiento y las redes (incremento de ia cobertura), quedando actualmente las tuberias vacrasgran parte del dfa, ocasionando un gran descontento en la poblaci6n usuaria de SEMAPA y restandocredibilidad a la entidad, to que se refleja claramente en el incremento de la morosidad.

° Se ampli6 la capacidad de la planta de tratamiento, sin que exista la garant[a de contar con los 400 I/sprovenientes de las presas de La Cumbre, pues no se ampliaron ni mejQraron los canales de aducci6ndesde cuencas vecina,scomo Escalerani - La Cumbre -Tolapujro - Saloneo y Planta de Tratamiento.

Estos principales componentes del proyecto que a pesar de ser identificados oportunamente por el PlanMaestro no fueron realizados en forma adecuada, influiran sensiblemente en la sostenibilidad del mismo

Es importante notar que gran parte de las deficiencias provenientes por el menor volumen de agua generadopor el proyecto se estan superando con recursos propios de SEMAPA y con fondos provenientes delProtocolo Franco-Boliviano.

7.- EVALUACI6N DE LOS RESULTADOS

Al momento, la sostenibilidad de los logros esta garantizada por la implementaci6n de proyectos alternativosorientados a aumentar ia capacidad de producci6n. Dichos proyectos se llevan a cabo con recursos propiosy provenientes del Protocolo Franco-Boliviano, y permitiran reemplazar medianamente la escasez de lasfuentes de agua superficial, los mismos que se ejecutan en la gesti6n 1998, de acuerdo al siguiente plan:

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S -bn,-kpDe ri cion.. Caudal Fn EstadoFanciamient

6 Nuevos, pozos El Paso 6 x 40 = 240 I/s En construcci6n Gb. Francia2 pozos Cercado 2 x 6.5 = 13 I/s En operaci6n Recursos propiosProyecto Titiri 130 I/s En construcci6n Emp. MisicuniRecuperaci6n agua Tolapujro 45 I/s En construcci6n Empresa privadaentubamiento y generacion energiaelectrica, empresa SINERGIA S.A.2 Pozos Vinto rehabilitaci6n 2 x 20 = 40 I/s En ejecuci6n Recursos propiosPozo semiprofundo zona El Paso ( 1 x 35 = 35 Vs En construcci6n Recursos propioszona el Paso il)Pozo profundo H= 400 m. 40 Vs En servicio Recursos propiosTOTAL CAUDAL ADICIONAL 543 I/s

Las nuevas fuentes sumadas a las construidas con el proyecto Wara Wara 70 Ifs, la Galeria de Chungara20 I/s (no mejorada) y los pozos actualmente en explotaci6n (450 Ifs) totalizan 1.083 Ils, lo que garantizala sostenibilidad del proyecto de manera inmecliata.

En el largo y mediano plazo, Ia fuente de Misicuni ofrecera la garantia de sostenibilidad por mas de 30 anos.

7.1 Operaciones futuras que daran continuidad al proceso, maximizaci6n de los beneficios,indicadores para monitores y evaluaci6n de operaciones futuras.

Se ha instalado en las fuentes de producci6n un sistema de telemetrfa (con fondos del ProtocoloFranco-Boliviano), el mismo que ha ingresado en operaci6n. Este programa contribuira a ladeterminaci6n diaria y oportuna de la eficiencia en las aducciones y proporcionara los datos parala elaboraci6n de los balances hidricos, tanto en los subsistemas de producci6n, como en los dedistribuci6n a la red, los cuales asociados con el programa de micromedici6n permitirAn determinar:peri6dicamente el fndice de agua no contabilizada (ANC), la identificaci6n de factores de perdidas,la formulaci6n y aplicaci6n de progranas de reducci6n de ANC de mayor significaci6n.

La maximizaci6n de los beneficios se! lograra con la ampliaci6n de las redes secundarias de aguapotable (diametros de 75 y 100 mm en material de PVC), con recursos propios y participaci6ncomunitaria, programas que estan en plena realizaci6n.

Como acciones complementarias se senalan los programas educativos y de difusi6n del usoeficiente del agua, el pago oportuno cie las tarifas y el propio desarrollo de la empresa.

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7.2 Opini6n sobre consultores y contratistas

El criterio de SEMAPA sobre los consultores y los contratistas se resume en:

Consultores

CGL - Aceptable, recomendable para otros proyectosBRGM - Aceptable, recomendable para otros proyectosENCIBRA - Malo, no recomendable para proyectos especialesICSAICLAURE PEREIRA - Aceptable, recomendable para otros proyectos.

Proveedores:

BARBARA - Aceptable, recomendable para otros proyectos.ROGHUR - Deficiente, no recomendableEQUITEC - Deficiente. no recomendable

Contratistas:

OLMEDO - Aceptable, recomendable para otros proyectos.CBI - IST - Aceptable, recomendable para otros proyectos.ALFA - Aceptable, recomendable para otros proyectos.CONCORT - Malo, no recomendable para contratos con financiamiento

externo.

7.3 Lecciones aprendidas

Los proyectos deben basarse en lo posible en disenios finales, con clara definici6n de los alcances paraasegurar los plazos de ejecuci6n y costos finales de inversi6n.

Los programas de desarrollo institucional son lentos pero progresivos y sostenidos.

Los alcances del programa deben abarcar a las otras partes del sistema como ser fuentes, redessecundarias y conexiones para lograr los beneficios programados en los plazos.

7.4. Fortalecimiento institucional

El Fortalecimiento Institucional actualizado, se halla en su fase de implementaci6n, ejecutando las siguientesacciones:

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EI programa de control de fugas para reducir el ANC ha comprendido la identificaci6n, priorizaci6n yejecuci6n de actividades de mayor impacto como ser la sustituci6n en un 81.15 % de los medidores enservicio, la limpieza y rehabilitaci6n de 6.012 cajas de medidor.

Con el programa de instalaci6n de macromedidores, el macromedidor ultras6nico portatil y la telemetrfa ensu primera fase, estamos en condiciones de establecer los balances hidraulicos en la producci6n ydistribuci6n, para identificaci6n y priorizaci6n de programas de reducci6n de ANC.

Las acciones complementarias de reducci6n de ANC se orientan al control operacional, reducci6n detiempos de intervenci6n, sistemas de evaluaci6n y control de mantenimiento.

La expansi6n de la red secundaria, la misma que hasta la fecha se ha efectuado con esfuerzo propio y delvecindario organizado, en un total de 11.000 m, incluido el medidor para 650 conexiones y estan enejecuci6n 50.000 m de red en diametros de 7'5 y 100 mm. para 3.000 nuevas conexiones domiciliarias.

El desarrollo institucional de la empresa ha alcanzado 6,56 funcionarios por 1000 conexiones.

Se han organizado a traves de contratistas particulares, las tareas de construcci6n de nuevas conexiones deagua potable y alcantarillado lo que significa rnenor tiempo de atenci6n a las solicitudes.

La construcci6n de la red secundaria y conexiones domiciliarias, complementando la red principal construidade FgFg, con material de PVC en diametros menores como 100, 75 mm y eventualmente de 50 mm,superando dificultades financieras al no haber alcanzado el credito para este ftem, se ha logrado con elprograma de capacitaci6n comunitaria en 25 barrios para su participaci6n en la construcci6n.

La negativa de la poblaci6n de Vinto y zonas aledanas para la construcci6n de los pozos de ampliacion defuentes, ha permitido identificar el marco regulatorio sobre el recurso agua (solicitud de concesi6n a la,Superintendencia de aguas), que permita la iclentificaci6n, priorizaci6n de usos en forma eficiente en toda laregi6n, sin considerar limites jurisdicciones de municipios y cantones.

7.5 Consideraciones generales del inforrne con relaci6n a PROFISE

Cursa en el informe, que en la ciudad de Cochabamba se desarroll6 e implemento el PROGRAMADE MEJORAMIENTO INSTITUCIONAL DE SEMAPA (PROFISE) y de acuerdo al mismo suefectividad no serfa sostenible por los cambios frecuentes en la gerencia y personal de altaadministraci6n. Sin embargo, es necesario mencionar que cuando se habla de SOSTENIBILIDADdel programa esta no depende necesariamente de las personas, sino del proceso mismo,funciones y de la estructura de la organizacion.

La inestabilidad en los programas de administraci6n, manejo comercial, gesti6n financiera,:operaci6n y mantenimiento que se indica en el informe, no es evidente, por lo menos durante lanueva administraci6n que inici6 sus funciones en septiembre de 1997.

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Sin embargo, el sistema administrativo en que se basa SEMAPA no es precisamente el masadecuado, toda vez que se cuenta con varios niveles directivos, gerenciales, jefes, etc., y quedebido a la organizaci6n y atribuciones, se tiene una recarga considerable de funciones, situaci6nque no es tomada en cuenta por el Gobierno de Bolivia, por ejemplo para reformular la politicasalarial existente, lo que dificulta mejorar la administraci6n de SEMAPA como empresa municipaldescentralizada de derecho publico.

En este entendido creemos que (PROFISE) es un programa que no ha logrado adecuarsetotaimente al sistema administrativo con que cuenta SEMAPA.

La debilidad financiera de la empresa se debe a que no existe presupuesto estatal asignado alprograma (PROFISE) que se elabor6 con un costo de $us 1.000.000.oo (UN MILL6N 00/100DOLARES AMERICANOS) aproximadamente, lo que significa un gasto que debilita aun mas laeconomfa de SEMAPA como nos manifiesta en su informe.

8. PLAN PARA LA FASE DE OPERACI6N

Esta contenido en los Planes Operativos Anuales y se orientan a la conservacidn de las obras yexplotaci6n de las fuentes a lo largo del aiio. Su financiamiento esta contemplado en el presupuesto defuncionamiento de la empresa y esta a cargo del Departamento de Operaci6n de la Gerencia T6cnica

Es necesario mencionar que la fase de operaci6n del sistema construido con recursos del credito 2187/BO,se halla adecuando al sistema existente de SEMAPA, sobre todo en lo que se refiere a las redes dedistribuci6n y fuentes, con objeto de superar las perdidas de agua en cada uno de los componentes y conello mejorar los ingresos de SEMAPA.

Un resumen de las actividades programadas que se hallan en actual ejecuci6n, se puede apreciar en elsiguiente cuadro, cuyos indicadores proporcionan elementos que nos permitan mejorar las condiciones deoperaci6n actuales, logrando una mayor eficiencia en el servicio al usuario.

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i -t5-Descdri 16n:i r ACTIVIDAD i:.. - Indicado5 anenmiento.'

1. Rehabilitaci6n y expansi6n del sistema de agua potablea. Wara Wara Valvulas compuertas Limpieza de canales m3 almacenado

b. Pozos de Vinto Bombas, control, sistemas Mantenimiento pozos, equipos de Rendimientode medici6n del pozo y bombeo tableros el6ctricos y Del campoproducci6n mantenimiento de la aducci6n. >95% I/s; m3

Kw H/m3.md. Planta de T. Agua Se cuenta con manual de Se cuenta con manual y Eficiencia de laCala Cala operaci6n y mantenimien- cronograma de actividades planta

to y laboratorio 0 0 coly

e) E. E. Cona Cona Se cuenta con manual de Mantenimiento bombas, valvulas, Eficiencia 95 %OP. y Mtto equipos, medici6n control Consumo

E. E./m3

f) Red de agua Reparaci6n fugas 3600 / a.conexiones Cambio de conexiones 600/ a

Renovaci6n red 1200 / aCambio de medidor 240 /aMantenimiento de medidor 500/aComplementaci6n de redes y nuevas conexiones 20000 m

1500 ConexAgua no conta- Plan de sustituci6n de medidores de 1 ½2 ", 2" 300 Pz

bilizada Instalaci6n medidores 2000 Pz.Conformaci6n de comite interno de ANC, con objetivos, ANC<=35%mecanismos y resultados, contenidos en el plan operativo

2. Fortalecimiento institucional _

a) Proyectos red Diseno de redes secundarias segun plan maestro 100 ha.b) PROFISE Aplicaci6n de manuales, evaluaci6n, seguimiento, Indices de

capacitaci6n. eficienciac) Equipos de Completar con los equipos, actualizaci6n en paquetes, aplicaci6n, Equiposcomputaci6n difusion de indicadores Informes

fndices

9.- SITUACION ACTUAL

* Del informe remitido tambi6n se colige, que en la ciudad de Cochabamba solo se logr6 ejecutar el77% del programa original de las obras, entre otros debido a que hasta el momento aun no se llev6a cabo la privatizaci6n de SEMAPA.

En este sentido manifestamos a usted, que la privatizaci6n de la empresa o mas concretamente elproceso de concesi6n de la misma, esta en marcha y se tiene proyectado concluirlo hasta fines delmes de agosto del presente ano.

Es imprescindible que se conozca que al presente, ya no existe interferencia ni injerencia politica yla debilidad gerencial es parte del pasado.

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al_ ASERVICIO DE AGUA POTABLE Y ALCANTARILLADO DE COCHABAMBA

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Es correcto afirmar que hubieron cambios de personal jerarquico en la empresa debido a lainjerencia polrtica, pero tambien debe tenerse en cuenta que se prescindi6 de los servicios de esepersonal por razones de irresponsabilidad y corrupci6n, situaci6n que ya no era factible mantener.

El personal ejecutivo que ingres6 a ocupar la direcci6n de las diferentes areas de SEMAPA, cuentacon experiencia profesional e idoneidad necesaria para enfrentar las circunstancias dificiles en quese encontr6 la empresa y por esta raz6n por lo menos de momento no existen mas cambios en lagerencia y personal clave de la empresa, lo que beneficia a la estabilidad de Jos programasadministrativos

Con relaci6n al manejo comercial de SEMAPA, se ha logrado superar recaudaciones promedio del100%, a partir del mes de septiembre de 1997 recuperando paulatinamente la mora que dejaron losanteriores responsables del area comercial.

El impacto de la capacidad de pago al cr6dito ha sido elocuente, como ejemplo podemosmencionar que en septiembre de 1997 se cumplia la 2Q cuota de pago a] Banco Mundial (FNDR), enese momento efectivamente las reservas econ6micas no alcanzaban ni para pagar los intereses deesa cuota, sin embargo la nueva administraci6n cumpli6 a plenitud el 30 de septiembre de 1997, lacuota que correspondfa a esa fecha.

Ponemos en su conocimiento que para el pago de ta tercera cuota que se cumpli6 el 31 de marzodel presente aho, hemos visitado a ejecutivos del (FNDR), para gestionar el pago inclusive poranticipado de una parte de la cuota, pero no pudimos lograr ese objetivo por razones internas del(FNDR), nuestra obligaci6n ha sido cubierta oportunamente en lo que se refiere al plazo del 31 demarzo para la tercera cuota.

A la fecha, existe un fortalecimiento financiero importante, gracias al trabajo esforzado y constantede los actuales ejecutivos que estan conscientes de la necesidad urgente de otorgar en concesi6n aSEMAPA para llevar a cabo la transformaci6n institucional a traves de la participaci6n e inversi6nprivada.

Con este motivo, saludamos a Uds. atentamente. /

Ing. Arturo Coca SelemeGERENTE GENERAL SEMAPA

ACS/hscc.c.: Presidente Banco Mundial Washington

Banco Mundial La Paz - BoliviaFondo Nacional de Desarrollo RegionalArch.

Calle Kapac Yupgnqui No. 2336 Casilla 1647 Tel6fonos 90751 - 90756 Fax. (591) (42) 90752 Cochabamba - Bolivia

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Annex 8AProject Review from the Borrower's Perspective

The Opiniion of FNDR(In Spanish)

1ZgL1 FONDO NACIONAL DE DESARROLLO REGIONA 1- FNDR

La Paz, 9 de abnil de 1998GG-SA 1421 .CAR/98

SefiorPaul IsemanrDirecwr Departamenw IIIFinanzas, Seor Privado e lnfraescucairaOfidna Regional para America Ladna y El Caribe181 8H. StreeL N. W.Washington D.C 20433U. S. A.

Ref.: Convenio de Crdito AIF 2187-BO Bo1vhiaProyecro de Rehablltiad6n de Agua Potable yAlcntarillado Sanitardo en Ciudades Mayores

AL: Dr. Menahem LibhaberOfidal de Proyecto

De nuesra considerad6n:

En atendon a su solldicd, adjunto a U presente el Anexo 8 que consttuye la Oplni6n delFondo Nadonal de Desarrollo Regonal como internedlarlo finandero del Convenio deCr4dlto ANF 21 98-BO para su incorpona6n al Inforne de Cumpliln-enco de laImplementad6n (ICR) del cr6dito antes mencionado.

Se adjunca a la presente el (itimo informe sobre el segulmiento a los indicadores deeficlencda de las empreas SAMAPA, SAGUAPAC y SEMAPA asi como un detalleacalazado de los desembolsos.

Con este motivo, saludo a usted atentamente,

ofw A

Di.,o'

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LOGRO DE OBJETIVOS

Li OBJETIVOS PRINCIPAIES

La informaci6n recopilad al cierre de cada uno de los componentes del Proyecto periteconcluir que los objetivos programados han sido logrados pricticamente en su totalidad,pudiendo concluirse que la ejecuci6n del mismo ha sido sarisfactoria. Las diferenciaspresentadas en alguno de los componentes no son significativas con relaci6n a la totalidad-del programa y, en su caso, pueden deberse a problemas del dimensionamiento original.

12 OBJETIVOS ESPECIlCOS POR COMPONENIE

A. SAMAPA

A la fecha se han cumplido con todos los objetivos7 >iicamente alguno se encuentrapendiente por renasos en la ejecuci6n de las obras; sin embargo, el objetivo como talsera logrado adecuadamente en los proximos meses- Asimismo, los indicadoresoperativos han logrado niveles satisfactorios con relaci6n a los programados.F:inalente, el proceso de privarizaci6n de la empresa ha concluido sauisfactoriamente.

B. SEMAPA

En general el logro de los objetivos puede considerarse como satisfactorio, ain cuadono se han alcanzado las metas programads en su totalidad. Situacion que supondrd,necesaramete, un esfuerzo adicional de la empresa para lograrlos a futuro,p.rincipalnem en cuanlo a los indicadores operativos y de fortalecimiento mstitucional.Por otra parte, el proceso de privatiain de la empresa se encuentra en ejecuci6n,ajiustndose a la situaci6n y prioridades actuales.

C. SAGUAPAC

Los objetivos han sido logrados en su totalidad, debiendo destacarse que los resultadoslogrados en muchos de ellos han sido superiores a los programados originalmete. Losindicadores de desempe&io operativo son tambi6n satisfactorios, requiriendose de muypocos ajustes para lograr los acordados.

D. COMPONENTE NACIONAL (FNDR)

Igualmente, se han logrado en forma satisfactoria la mayor parte de los objetivos globalessefialados en el progranma, quedando alguno de los especificos sin cumplir por loscambios en el sector, operados en el periodo de ejecuci6n. Sin embargo, debe aclararseque estos fueron alcanzdos paraletamente mediante otros programas similares. Encuanto al FNDR, este cumpli6 crii su funci6n de intermediario financiero, denuto laslimitaciones sefialadas por el Acuerdo de Proyecto y el Convenio Subsidiario y las leyesnacionales, apoyando, por otra parte, significativamente, al ordenamiento del sector y asu propia capacitaci6n como organismo financiador del sector-

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2. FACTORES PRINCIPALES QUE AFECTARON LA MEPNTACION DELPROYECTO

Dentro los factores que influyeron negativamente en la implementaci6n del proyecto yque retMasaron su ejecucion, a criterio del FNDR, se pueden mencionar los siguientes:

a) La formulaci6n incompleta de los proyectos en el PPF-44-B07 que oblig6 aincorporar el diseho fnal como parte de la ejecuci6n del proyecto, aspecto que,desde el inicio supuso que Las obras serian rerrasadas. Mas aun, considerando quelos procesos de comatacin de estudios de consultorfia son largos y sujetos amuchas etapas.

b) Los procesos de licitaci6n de obras, provisi6n de materiales y contraraci6ri deconsultorias se vieron remsados, en primer lugar, por la falta de un acuerdoprevio en los modelos de pliegos de licitaci6n e invitaci6n y capacitaci6n de losejecutores al respecto, y en segundo lugar, por demoras en las no objeciones.

c) A.simismo, la ausencia de ua anilisis instiucional mas profiido de los ejecutoresde los proyoctos en cuanto a su capacidad fiinnciera y operairva, supuso demoraspor la no disponibilidad oportuna de aporte local y de la existencia de una unidadejecutora que sirviese comC) organismo tcnico permanente.

d) El proceso de privatizaci6n de SAMAPA Y SEMAPA, condici6n para laampliaci6n de la vigencia del Convenlio de Cr6dito, no cont6 con acuerdo previoconcertado con las empresas, sino mis bien fiue una imposici6n, aspecto que,podfa preverse, originarfa reacciones negativas a un proceso toimente nuevo enel paIs, sitci6n que se presen6 en los hechos en el caso de SEMAPA.

e) Es tambi6n relevante el hecho de la deficiente oferta de bienes y serviclos en elpais, que origin6 retrasos en la contrataci6n de obras, provisi6n de bienes y aunde consuitoria, lo que se reflej6 en retrasos en la ejecuci6n de obras, estudios yde provisi6n de bienes no de acuerdo a las normas.

3. SOSTENIBILDAD DEL PROYECTO

De acuerdo a los resultados logrados, la sostenibilidad del proyecto esti asegurada en lamayor parte de sus componentes, especialmente en cuanro a las empresas SAGUAPACy SAMAPA, del FNDR como entidad fmanciera, de la entidad normativa (hoyViceministerio de Servicios Bisicos) y del ente regulador del sector, Superintendenciade Aguas. En cuanto a SEMAPA, se hace aun neces-ario realizar acciones de apoyoinsutucional continuando con el proceso de privatizaci6n que ya ha sido iniciado y quecuenta con todo el respaldo del gobierno central, gobierno municipal y do la exnpresa,con miras a superar los dos aspectos findamentales: institucional y de fuenme de provisi6nde agaa, a corto plazo

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4. DESEMPIE:NO DEL BANCO

a) El Banco ha estado presente en las eEapas de idenrificaci6n, preparaci6n,supervisi6n y evaluaci6z del proyeco, mediante la presencia de cuatro oficialesde proyecto; por lo Manto, su participacifn ha sido importante en la ejecuci6n delmismo. Es mis, su participacion estuvo presente desde la ejecuci6n del PPF1444-BO-

b) Los ajustes presenados durae la ejecucion del proyecto han sido acompanadosde cerca por el Banco, mediante sus oficiales de credito cuyo nivel deparicipaci6u ha sido diferente, es asi que se han tenido etaps en las cuales noha sido muy aciva, mientras que en oias ha sido importante para reencauzar yacelerar la ejecuci6n del proyecto pero, asi tambi6n, se han presentado situacionesen Ias cuales esta ha ido mSs alli de su campo especifico de acci6om

c) Dentro de a1gunos ajustes relevantes que se han presenmado en las coadicionesgenerales del proyecto, se tiene el de la privatizaci6n de las empresas SAMAPAy SEMAPA, la cual no foe fruto de un acuerdo conceIado entre pates y nocont6 con un an:fliis legal mis profindo en cada caso, situaci6n que provocoreaccionaes confrari, mas que al objetivo pretendido, al proceso que se prerendiaIlevar adlela. Prueba de ello es que al presente la privadzoci6n de SEMAPAcontin6a y cuenta con todo el apoyo necesario. Asiraismo, en cuanto al remaMisicuni, el Banco present un recomendaci6n, correspondiendo cualquierdecision al respecto al gobierio y a la empresa interesada, considerando que loimportante es lograr la soluci6n defwitiva al problema.

d) El rol del Banco ha sido en general el adecuado y ha permicido ejecutar elproyecto dentro los objetrvos seAalados, se han presentado problemas menores encuanto a desembolsos y conciliaci6n de cuentas y gastos para su mejorseguinmieo financiero.

5. DESENMPEO DE LOS PRESTATARIOS

5.1 Empresas Ejectoras

La participaci6n de los prestatarios ha sido diferente, destacr.udose SAGUAPACcomo la empresa.mas eficiente durante la ejecuci6n del proyecto, lo que explicael logro de todos los objetivos e mcluso por encima de los programados en elSAR. SEMAPA ha sido la empresa que ha tenido las mayores dificultades, sobretodo en el componene de obras al tener que encarar, primeramente, el planmaestro pam justificar los proyectos que fueron identificados y formulados no adisefho final. A la fecha del cierre del proyecto, la mayor pare de los problemaashan sido superdos en todas las empresas.

Las causas de los desfses en la ejecuci6n han sido ya comentdos lineas arribaen cuanto a los factores que afectaron la implementaci6n del proyecto.

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5.2 FNDR

El FNDR fue incorporado al proyccto en la emapa de negociaci6n del crdditocomo el agente fmaiciero de la Republica de Bolivia, encomendkndole, ademas,la supervisi6n general del proyecto. Aspectos que consideramos fueron cumrplidosa cabalidad en raz6n de las const=aes visitas e informes generados deseguimiento, prestando en algunas situaciones su asesoramiento tecnico.

En cuanto ad rol asignado a la entidad dentro del sector saneamiento basico, estedebe ser entendido en el contexto insitucional del FNDR, el que fue creado porel Gobierno Nacional como entidad finciera ejecutora de la politica dedisciplina y optimizaci6n faciera de la inversi6n, y no en el sentido deconverrirse en una entidad normativa, supervisora o reguladora del sector.

Como entidad financiera, el PNDR ha consolidado su posici6n de lider en elsector saneamiento basico, iniciada con la dicraci6n del Decreto SupremoNo.22627 de 24 de octubre de 1990 que le sefala como agencia financierasectorial, ratificada por el D.S. No. 22925 de 1° de noviembre de 1991 deReordenamiento del Sector Sanoamiento B§sico, al haber recibido laresponsabilidad por parte de la Repiblica de a4minisrrar v2xios programasfianciados por el Banco Mudial, BID, JICA y otros, que consideran comosector elegible do flnanciamieuto al de sanenmiento basico, habiendo fmanciadoa la fecha cerca de $us 200.0 millones en proyectos del sector.

6. EVALUACION DE RESULTADOS

Los resutados logrados con el proyecto, adn considerando que algunos objetivos (losmenos) no han sido akauzados a pIeninud, pueden considerarse altamente satisfatoriospues se ha llegado a un nazxnero importante de beneficiarios, las obras haa sidonayormentle completadas, el lortalecimiento institucional ha demosao logros

iMportantes en los indicadores de desempeiio y se ha demostrado que el sector pnvados£ tiene irateres de participar toriando a su cargo la operaci6n y auin el riesgo de lainversi6n en proyectos de saneamiento basico.

Paralelamente el sector ha ido reordenindose a partir del D.S. 22925, al defuiirse lasencidades normativas, operadoras y fincieras y su rol en el sector. Asimismo, se hacreado la Superintendencia de Aguas responsable de la supervisi6n y cumplimiento denormas y procedimientos, concluyAmdose que a la fecha el marco legal para elmejoramierito del secEor ha sido establecido plenamente.

El PNDR, por otra parte, ha ida iorTaleciendose institucionalmente con la contratacionde personal Calificado en el sectrT, asi como, en la elaboraci6n de guias de elaboraci6nde proyectos y metodologias de evaluaci6n.

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7. LECCIONES APRENDIDAS

Es criterio del FNDR, que denEro de las experiencias presentadas en la ejecuci6n delproyecto deben rescatarse las siguientes: i) Todo futuro proyecto especIfico, como elevaluado, debe basarse necsaramente en estudios a disefno fmal, los cuales debenincorporar un anilisis financiero, instimucional y legal muy deallado, a objeto de noencontrar problemas de liquidez en el aporre local, poca capacidad ejecutora y legalesque impidan su ejecuci6n; ii) Efectuar un plan de ejecuci6n del proyecto que defina yestablezca claramente los procedimientos, 7mos, roles institucionales de todos lospartipantes; y iii) Que en los ajustes a rezlizar de proyectos en ejecuci6n, estos est6nplenamente acordados con los ejecutores o presmatarios, asimismo, se consideren loscambios esmrturales que se van presentando en cl pais, ya sca en el sector o en sectoresafmes que lo afectei.

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The Opinion of FNDR(In English)

ACHEVEMENT OF OBJECTIVES

1.1 MAIN OBJECTIVES

The information available at the close of each of the project's components indicates thatthe planned objectives have been achieved almost completely and that implementation hasbeen satisfactory. The differences presented in some of the components are not significantwhen compared with the program as a whole and may be due to initial problems of scale.

1.2 SPECFIEC OBJECTIVES OF EACH COMPONENT

A. SAMAPA

To date all the objectives have been achieved, although there have been some delays in theworks. However, they will be conapleted to satisfaction in the coming months. Theoperating indicators have also attained adequate levels in relation to the benchmarks.Last, the process of privatizing the company has been concluded successfully.

B. SEMAPA

In general, the objectives have been satisfactorily achieved although not all the targetswere met. The company will have to make an additional effort to attain them in future,particularly with respect to operating indicators and institutional strengthening. Thecompany is being privatized, reflecting current circumstances and priorities.

C. SAGUAPAC

The objectives have been fully achieved and many of the results have been better thanoriginally planned. The operating performance indicators are also satisfactory and veryfew adjustments will be required.

D. NATIONAL COMPONENT (FNDR)

Most of the program's general objectives have been achieved, although some specificobjectives are yet to be complied with owing to changes that occurred in the sector duringproject implementation. However; it should be noted that some objective were achievedin parallel under similar programs. FNDR is complying with its function as financialintermediary, within the limits set forth in the Loan and Subsidiary Agreements and

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national legislation. FNDR is providing considerable support for sector management andfor its own training as sector financing agency.

2. MAIN FACTORS AFFECTING PROJECT IMPLEMENTATION

The factors that have had an adverse effect on the project and delayed its implementation, in theopinion of FNDR, are:

(a) Incomplete project formulation under PPF-44-BO made it necessary to include the finaldesigns as part of the project under consideration here, which condemned the works todelay from the outset. The delay was also compounded by the length and complication ofthe procedures for contracting consulting services.

(b) The bidding for works, materials and consulting contracts was delayed owing, on the onehand, to the absence of prior agreement regarding models for the bid invitations anddocuments and training for the implementing agencies in bid procedures and, on the other,to delays in the issue of non-objections.

(c) The absence of a more detailed institutional analysis of the financial and operating capacityof the implementing agencies led to delays in the timely provision of the local counterpartand the establishment of an implementing unit to act as a permanent technical body.

(d) The process of privatizing SAMAPA and SEMAPA, which was a condition for extendingthe Loan Agreement, was not assented to in advance by the companies but was imposed,and it could have been anticipated that this would cause an adverse reaction to acompletely new process in the country, which indeed happened in SEMAPA.

(e) Another relevant factor was the deficient supply of goods and services in the country,which led to delays in contracting the works, obtaining supplies, and even in hiringconsulting services, as reflected in delays in the works and studies and in supplies thatwere not up to standard.

3. PROJECT SUSTAINABILITY

Based on the results, most of the project components will be sustainable, particularly with respectto SAGUAPAC and SAMAPA, FNDR as the financial intermediary, the regulatory agency (nowthe Deputy Ministry of Basic Services) and the sector regulatory agency, the WaterSuperintendency. As for SEMAPA, institutional support is still necessary to continue theprivatization process which has been initiated and has the support of the central and municipalgovernments and the company. The process is intended to address two fundamental problems:institutional weakness and the short-term supply of water.

4. BANK PERFORMANCE

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(a) The Bank was involved in project identification, preparation, supervision, and evaluationthrough the presence of four praject officers. Its participation has been continuous sincePPF-444-BO.

(b) The adjustments made during the project were closely monitored by the Bank through itsloan officers, although the level of participation varied. There were stages in which theBank was not very active and others in which it made major efforts to adjust andaccelerate the project. Howevei; situations arose that were outside its specific field ofaction.

(c) The main adjustments to the general project conditions included privatization ofSAMAPA and SEMAPA, which was not based on a mutual agreement by the parties oron an in-depth legal analysis in each case. This led to opposition, not so much to theobjective as to the process. This is clear from the fact that SEMAPA's privatization iscontinuing, with all the necessary support. With regard to Misicuni, the Bank made arecommendation, although the government and the company must make their owndecision, since the main thing is to find a permanent solution to the problem.

(d) -Overall, the Bank has played an adequate role and the project has been implementedwithin the stated objectives. Minor problems arose with regard to disbursements andconciliation of accounts and costs in financial monitoring.

5. BORROWER PERFORMANCE

5.1 Implementing Agencies

The borrowers performed dissimilarly. SAGUAPAC stood out as the most efficientcompany during the project, as witnessed by the fact that it not only achieved butsurpassed the objectives programmed in the SAR. SEMAPA had the greatest difficulties,particularly in the works component, since it had to draw up a master plan to justify theprojects that had been identified and formulated but had not been carried to the finaldesign stage. When the project closed, all the companies had surmounted most of theproblems.

The reasons for the delays in implementation have been mentioned above with respect tothe factors that affected project implementation.

5.2 FNDR

FNDR was included in the project in the loan negotiation stage as the financial agent ofthe Republic of Bolivia, and was also made responsible for general project supervision. Itcomplied fully with its mandate as attested to by continued visits and follow-up reports,and on some occasions it provided technical advice.

FNDR's role in the basic sanitation sector should be viewed within its institutional context.It was established by the national government as the financial entity responsible for

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financial discipline and optimization of investments and was not intended to be asupervisory or regulatory body in the sector.

As a financial entity, FNDR has consolidated its position as leader in the basic sanitationsector, initiated under Supreme Decree 22627 of October 24, 1990, which designates it asthe sector's financial agency. This was confirmed under Supreme Decree 22925 ofNovember 1, 1991, on reorganization of the basic sanitation sector, which gave itresponsibility for administering programs financed by the World Bank, IDB, JCIA, andother agencies, which considered basic sanitation eligible for financing, to the tune of closeto US$200 million to date.

6. ASSESSMENT OF OUTCOME

The results of the project can be considered highly satisfactory (despite the few targets that havenot been fully achieved), since the project has benefitted a significant number of people, the workshave largely been completed, institutional strengthening has made major strides in improvingperformance indicators, and it has been demonstrated that the private sector is interested in takingover operation of the sector and is even willing to assume the risk of investing in basic sanitationprojects.

The sector has been reorganized pursuant to Supreme Decree 22925, defining the regulatory,operating and financial entities and their role in the sector. The Office of the Superintendent ofWater has been created to oversee compliance with standards and procedures. The legalframework for improving the sector has been fully established.

FNDR has been strengthened institutionally by hiring qualified staff and is now more proficient inpreparing guidelines for project preparation and evaluation.

7. LESSONS LEARNED

FNDR has the following comments to make regarding the project: (i) all specific future projects,such as the project under consideration here, should necessarily be based on final designs, whichshould include a very detailed financial, institutional and legal analysis to prevent problems ofliquidity in the local contribution and weak implementation and legal capacity that could impedeexecution; (ii) a project implementation plan should be drawn up that clearly establishesprocedures, mechanisms and institutional roles for all participants; and (iii) adjustments in projectsin progress should be made in full agreement with the implementing agencies and borrowers, andshould consider the structural changes under way in the country, in the sector and in relatedsectors.

MAR SECTION

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Documents

World Bank Document...Country Management Unit 6 Latin America and the Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance