Document of The World Bank

Report No: ICR0000850

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-33820 TF-23692)

ON A

SPECIFIC INVESTMENT LOAN

IN THE AMOUNT OF IDA CREDIT XDR 57.8 MILLION (US$ 88.9 MILLION EQUIVALENT)

AND

AUD 11.13 MILLION (US$ 10.35 MILLION EQUIVALENT)

TO THE

GOVERNMENT OF INDONESIA

FOR

A

SECOND WATER & SANITATION FOR LOW INCOME COMMUNITIES PROJECT

June 24, 2011 Human Development Sector Unit and Regional Water & Sanitation Group East Asia & The Pacific

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CURRENCY EQUIVALENTS

(Exchange Rate Effective June 24, 2011)

Currency Unit = Indonesian Rupiah Rp.1.00 = US$0.0001 US$ 1.00 = Rp.8,602

FISCAL YEAR

ABBREVIATIONS AND ACRONYMS

AusAID Australian Agency for International Development

BAPPEDA

Provincial and District Planning and Development Board (Badan Perencanaan dan Pembangunan Daerah)

BAPPENAS

National Planning and Development Board (Badan Perencanaan dan Pembangunan Nasional)

BPKP

Financial and Development Supervisory Board (Badan Pengawas Keuangan dan Pembangunan)

CAP Community Action Plan

CB Capacity Building

CF Community Facilitator

CFT Community Facilitator Team

CLTS Community Led Total Sanitation

CPMU Central Project Management Unit

CWSS Community Water Supply and Sanitation

DCT/TKK District Coordination Team (Tim Koordinasi Kabupaten)

DEPKES Ministry of Health

DikNas Ministry of Education (Departemen Pendidikan Nasional)

DinKes Local Government Health Office (Dinas Kesehatan)

DIPA Budget Warrant (Daftar Isian Pelaksanaan Anggaran)

DPMU District Project Management Unit

DPRD Regional parliament (Dewan Perwakilan Rakyat Daerah)

DTC District Technical Consultant

DTT/TTK District Technical Team (Tim Teknis Kabupaten)

FY Fiscal Year

GOI Government of Indonesia

HIS Health Impact Survey

IBRD International Bank for Reconstruction &Development

IDA International Development Agency

ICR Implementation Completion Report

IMR Infant Mortality Rate

IRR Internal Rate of Return

KAP Knowledge Attitude & Practices

Kabupaten District

KDP Kecamatan Development Program

Kecamatan Subdistrict

KPI Key Performance Indicator

IMIS Integrated Management Information System (sustainability monitoring)

MC Management Consultant

MIS Management Information System

MoF Ministry of Finance

MoH Ministry of Health

MONEV/M&E Monitoring & Evaluation

MONE Ministry of National Education

MPA Methodology for Participatory Assessments

MTR Midterm Review

NOL No Objection Letter

NTB Nusa Tenggara Barat (West Nusa Tenggara Province)

ODF Open Defecation Free

PAMSIMAS Third Water Supply and Sanitation for Low Income Communities

PCC Post Construction Census

PHAST Participatory Health and Sanitation Transformation

PMC Process Monitoring Consultant

PMR Project Management Report

PNPM

National Community Empowerment Program (Program Nasional Pemberdayaan Masyarakat)

POKJA AMPL

(National) Water Supply and Environmental Sanitation Working Group (Kelompok Kerja Air Minum dan Penyehatan Lingkungan).

PRA Participatory rural appraisal

PS Provincial Secretariat

PTL Project Team Leader

Q1, Q2, Q3, Q4 Financial Quarter (Q1, Jan – Mar; Q2, Apr – Jun; Q3, Jul – Sep; Q4, Oct – Dec)

SE Circular Letter (Surat Edaran)

SK Decree Letter (Surat Keputusan)

SOE Statement of Expenses

STBM Community Based Total Sanitation (Sanitasi Total Berbasis Masyarakat)

SUSENAS National Socio-Economic Survey (Survei Sosial Ekonomi Nasional)

TC Technical Consultant

TF Trust Fund

UPP Urban Poverty Project

VIT Village Implementation Team

WASPOLA Indonesia Water Supply and Sanitation Formulation and Action Planning

WSP-EAP Water & Sanitation Program for East Asia and the Pacific

WSS Water Supply & Sanitation

WSSLIC Water Supply and Sanitation for Low Income Communities

WSLIC II Second Water and Sanitation for Low Income Communities

Vice President: James W. Adams

Country Director: Stefan G. Koeberle

Sector Manager: Juan Pablo Uribe

Project Team Leader: Claudia Rokx

ICR Team Leader: Roberto Antonio F. Rosadia

ICR Primary Author: Martin Benedikt Albrecht

INDONESIA SECOND WATER & SANITATION FOR LOW INCOME COMMUNITIES

PROJECT CONTENTS

Data Sheet A. Basic Information iB. Key Dates iC. Ratings Summary iD. Sector and Theme Codes iiE. Bank Staff iiF. Results Framework Analysis iiiG. Ratings of Project Performance in ISRs vH. Restructuring (if any) vI. Disbursement Profile v

1. Project Context, Development Objectives and Design 11.1 Context at Appraisal 11.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) 21.4 Main Beneficiaries 31.5 Original Components (as approved) 31.6 Revised Components 31.7 Other significant changes 3

2. Key Factors Affecting Implementation and Outcomes 42.1 Project Preparation, Design and Quality at Entry 42.2 Implementation 62.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 102.4 Safeguard and Fiduciary Compliance 112.5 Post-completion Operation/Next Phase 12

3. Assessment of Outcomes 133.1 Relevance of Objectives, Design and Implementation 133.2 Achievement of Project Development Objectives 143.3 Efficiency 163.4 Justification of Overall Outcome Rating 173.5 Overarching Themes, Other Outcomes and Impacts 173.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 19

4. Assessment of Risk to Development Outcome 195. Assessment of Bank and Borrower Performance 20

5.1 Bank Performance 205.2 Borrower Performance 21

6. Lessons Learned 227. Comments on Issues Raised by Borrower/Implementing Agencies/Partners 24Annex 1. Project Costs and Financing 25Annex 2. Outputs by Component 26Annex 3. Economic and Financial Analysis 30Annex 4. Bank Lending and Implementation Support/Supervision Processes 36Annex 5. Detailed Tables Beneficiary Survey Results 38Annex 6. Stakeholder Workshop Report and Results 45Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR 46Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders 47Annex 9. List of Supporting Documents 49MAP No. 33420R2 50

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INDONESIA SECOND WATER & SANITATION FOR LOW INCOME COMMUNITIES PROJECT

Datasheet

A. Basic Information

Country: Indonesia Project Name: Second Water & Sanitation for Low

Income Communities Project

Project ID: P059477 L/C/TF Number(s): IDA-33820, TF-23692

ICR Date: 05/25/2011 ICR Type: Core ICR

Lending Instrument: SIL Borrower: REPUBLIC OF INDONESIA

Original Total

Commitment: XDR 57.8M Disbursed Amount: XDR 54.2M

Revised Amount: XDR 55.2M

Environmental Category: B

Implementing Agencies:

Ministry of Health Cofinanciers and Other External Partners:

Australian Agency for International Development (AusAID)

B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 08/09/1999 Effectiveness: 11/16/2000

Appraisal: 03/06/2000 Mid-term Review: 05/20/2005 05/20/2005

Approval: 06/15/2000 Closing: 06/30/2009 12/31/2010

C. Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Satisfactory

Risk to Development Outcome: Negligible to Low

Bank Performance: Satisfactory

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

Bank Ratings Borrower Ratings Quality at Entry: Highly Satisfactory Government: Satisfactory

Quality of Supervision: Satisfactory Implementing Agency/Agencies:

Highly Satisfactory

Overall Bank Performance:

Satisfactory Overall Borrower Performance:

Highly Satisfactory

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C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance

Indicators QAG Assessments (if

any) Rating

Potential Problem Project at

any time (Yes/No): Yes Quality at Entry (QEA): None

Problem Project at any time

(Yes/No): No

Quality of Supervision

(QSA): None

DO rating before

Closing/Inactive status: Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing)

Central government administration 1 1

General water, sanitation and flood protection sector 49 49

Health 31 31

Primary education 7 7

Sub-national government administration 12 12

Theme Code (as % of total Bank financing)

Decentralization 13 13

Health system performance 13 13

Other communicable diseases 24 24

Participation and civic engagement 25 25

Rural services and infrastructure 25 25

E. Bank Staff

Positions At ICR At Approval

Vice President: JamesW. Adams Jemal-ud-din Kassum

Country Director: Stefan G. Koeberle Mark Baird

Sector Manager: Juan Pablo Uribe Alan Ruby

Project Team Leader: Claudia Rokx Howard Nelch Barnum

ICR Team Leader: Roberto Antonio F. Rosadia

ICR Primary Author: Martin Benedikt Albrecht

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F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) The objectives of the project are to improve the health status, productivity, and quality of life of poor communities in under-served rural villages in the project provinces. This will be done by improving the health behavior and health services of the communities related to water borne diseases; providing safe, adequate, cost effective, and easily accessible water supply and sanitation services; and developing sustainability and effectiveness through community participation. Revised Project Development Objectives (as approved by original approving authority) There were no revisions made to the PDOs. (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target

Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Diarrhea disease index Value quantitative or Qualitative)

data from HIS baseline survey has been revisited

-20%

Date achieved 09/30/2003 12/30/2008

Comments (incl. % achievement)

Targeted impact on health could not be demonstrated because of methodological and practical problems of local health statistics study. However, the impact survey showed that a critical mass of good practices for all 3 key sets of behavior - safe sanitation, handwashing and water management in the home - has been achieved

Indicator 2 : Communities with access to clean water Value quantitative or Qualitative)

0 3.5 million people 5 million people

Date achieved 03/30/2000 12/30/2008 Comments (incl. % achievement)

The project reached about 5 million people, 43% more than predicted.

Indicator 3 : Adoption of good sanitation and hygiene practices

Value quantitative or Qualitative)

no baseline data

41% of all households, 33% of poor households

Date achieved 09/30/2003 12/31/2010 Comments (incl. % achievement)

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(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target

Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Number of community health and WSS Action Plans prepared Value (quantitative or Qualitative)

0 2000 villages 2294 villages

Date achieved 06/20/2000 12/30/2008 12/31/2010 Comments (incl. % achievement)

All plans implemented and carried out, 114.6%

Indicator 2 : % of completed WSS, functioning Value (quantitative or Qualitative)

0 2000 villages 2294 villages

Date achieved 06/30/2000 12/30/2008 12/31/2010 Comments (incl. % achievement)

114.6% accomplishment

Indicator 3 : School sanitation and hygiene programs functioning Value (quantitative or Qualitative)

0 2000 schools 5,923 schools

Date achieved 06/08/2000 12/30/2008 12/31/2010 Comments (incl. % achievement)

296.2% accomplishment

Indicator 4 : Households with improved clean water supply Value (quantitative or Qualitative)

27%(Before construction) 80% households 80%

Date achieved 02/22/2006 12/30/2008 12/31/2010 Comments (incl. % achievement)

For poor households, the percentage with improved clean water supply has increased from 17% to 78%

Indicator 5 : Households with improved sanitation services Value (quantitative or Qualitative)

23% (Before construction) 60% households 41% of households

Date achieved 02/22/2006 12/31/2008 12/31/2010

Comments (incl. % achievement)

For poor households, the percentage with improved sanitation services has increased from 12% to 33% Project effectiveness improved after the STBM approach was introduced, but there was not enough time left to achieve the target

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G. Ratings of Project Performance in ISRs

No. Date ISR Archived

DO IP Actual Disbursements

(USD millions) 1 06/27/2000 Highly Satisfactory Satisfactory 0.00 2 12/18/2000 Highly Satisfactory Satisfactory 0.00 3 04/17/2001 Highly Satisfactory Satisfactory 0.00 4 12/06/2001 Highly Satisfactory Satisfactory 5.00 5 06/23/2002 Highly Satisfactory Satisfactory 5.22 6 12/01/2002 Satisfactory Satisfactory 5.22 7 06/08/2003 Satisfactory Satisfactory 9.28 8 12/08/2003 Satisfactory Satisfactory 13.84 9 05/05/2004 Satisfactory Satisfactory 21.28 10 10/31/2004 Satisfactory Satisfactory 27.74 11 06/18/2005 Satisfactory Satisfactory 33.79 12 03/27/2006 Satisfactory Satisfactory 47.12 13 06/15/2006 Satisfactory Satisfactory 48.80 14 06/25/2007 Satisfactory Satisfactory 65.53 15 04/18/2008 Satisfactory Satisfactory 77.74 16 01/21/2009 Satisfactory Satisfactory 77.78 17 11/30/2009 Satisfactory Satisfactory 77.79 18 05/14/2010 Satisfactory Satisfactory 78.79

H. Restructuring (if any)

Not Applicable

I. Disbursement Profile

1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

Country Background At appraisal, Indonesia had been severely affected by the 1997/1998 Asian Financial and Economic Crisis, with particularly negative impacts on rural employment and deteriorating health indicators. In 1999/2000, the country was also undergoing a political transition and adopted a decentralized and demand-driven approach for the delivery of basic services, including in the rural water and infrastructure sectors. Indonesia had experienced successes with the World Bank and donor projects in the years before, and in the light of the 1997/1998 financial crisis, had the necessary preconditions to become the recipient of new loans. The 1997/98 crisis created the need for measures that would provide short-term employment for returning urban-workers in selected rural areas and maintain the flow of budget funds to social services and support for the poor. Yet it was projected that Indonesia would resume the path towards growth and development over the following five years, and attention in the longer term should be directed to equity needs and growth in community demand for higher quality social services. Therefore, the challenge at that time was to design policies, programs and projects that would meet the short term needs while maintaining progress towards the longer term development goals. Sector Background In terms of the water and health sectors in the late 1990s, there was an ongoing dialogue on the evolving national policy framework for rural water supply and sanitation, and on the need to address basic infectious and childhood diseases, especially water borne diseases. In spite of the health gains over the previous 20 years prior to project appraisal, a core of basic infectious, childhood, and pregnancy related disease problems remained priorities. The national infant mortality rate (IMR) was higher than expected for Indonesia's level of economic development at that time. There were many rural areas and regions where the priority disease profile included diarrhoea, intestinal worms, water related diseases (including malaria and dengue), macro and micro nutrient deficiencies in children and pregnant women, low quality of prenatal care and birth, and skin diseases. These are problems that are most efficiently met with preventive interventions and selected cost-effective treatment. The government of Indonesia had taken the lead in successfully addressing these concerns through the implementation of the first Water and Sanitation for Low Income Communities (WSSLIC) project which was implemented between June 1993 and November 1999. During this period, the Bank was an important financial and technical contributor to integrated water, sanitation and health programs in Indonesia (through both the Third Health [HPIII] and WSSLIC projects). Consequently, the aim of the second project, WSLIC II, was to continue to support this process of integration and the delivery of water, sanitation, and hygiene services to improve Indonesia’s health indicators

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through disease prevention. Important lessons learned from the first WSSLIC were taken into account in the design of the WSLIC II, most notably a reduced project complexity, direct fund channeling and independent project administration, and strong community participation.

The project was fully consistent with the then CAS by supporting further decentralization through increased autonomy and accountability, improving infrastructure services and public sector efficiency in remote rural areas, and enhancing equitable development. The project was also aligned with the government’s strategy by conforming to the strategic trend toward decentralized, demand responsive approaches, community participation, and streamlined funds channelling and project administration. Government policies and programs in the health and rural water and infrastructure sectors emphasized decentralization and demand responsiveness rather than a supply driven approach to the provision of services. Experience in Indonesia and globally has demonstrated that active involvement of communities in the planning and design of development activities, and their control over decision-making, leads to higher levels of demand responsiveness and hence to more sustainable water and sanitation systems. Women are essential contributors to community activities and programs related to water. The project conformed to these strategic directions and recognized the important role of women and emphasized their involvement.

1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved)

The objectives of the project are to improve the health status, productivity, and quality of life of poor communities in under-served rural villages in the project provinces. This will be done by improving the health behavior and health services of the communities related to water borne diseases; providing safe, adequate, cost effective, and easily accessible water supply and sanitation services; and developing sustainability and effectiveness through community participation. The key-indicators at approval were not changed. Baseline, target and end-line values are provided in section 3.2 and detailed in annex 2. These indicators included: the targeting of poor; community participation and capacity building; completed functioning water and sanitation systems; cost per WSS system and per capita served; knowledge and practice of good hygiene and health; reductions in disease rate. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification No changes were made in the PDO, but KPI targets and timeframe were revised to reflect an increased project scope (Schedule 5 of the Credit Agreement was amended in Credit Agreement Amendment No. 1). Changes in KPI were driven by an increase in the number of provinces resulting from the division of provinces, which increased the need for facilitators; monetary gains from exchange rates fluctuation also allowed an increase in the number of targeted villages.

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1.4 Main Beneficiaries

The main beneficiaries of the project were households in low income rural communities; the aim was to reach 2000 rural communities with a total population of 3.5million people who would gain access to more convenient, higher quality, and more accessible water supply and improved community sanitation services. The project’s recipient provinces and districts were determined by the Ministry of Health through a ranking system based on a scoring system made up of a composite of several indicators; poverty, water supply and sanitation coverage, water/sanitation-related disease prevalence, and presence of other water and sanitation focused projects.

1.5 Original Components (as approved)

Component 1: Community and local institutions capacity building (34.2 million) The aim of this component was to assist communities, through service contracts with local firms, NGOs or academic institutions, to organize effectively and also to obtain the technical capacity to plan, manage, and sustain water programs, sanitation and community health. This component was designed so that the participatory methods employed at the community level would be closely intertwined with hygiene and sanitation promotion. Component 2: Improving Health Behavior and Services (13.9 million) The objective of this component was to improve hygiene, health behavior and community management of health services related to water borne diseases. Two sub-components comprised a school health and hygiene program and a community health program. A core part of the component was the adaptation and implementation of PHAST to be used in communities and schools. Diarrhoea, skin diseases and worms in children were the special focus of the component. Component 3: Developing Water Infrastructure (53.2 million) The aim of this component was to provide communities with accessible, convenient, and clean water in adequate quantity in response to demands expressed by them. A demand responsive strategy was used, requiring community bidding for project participation and community co-financing (at least 4% in cash and 16% in kind). Communities will have direct control over sub-project financing through block grants, and control over sub-project design, providing a choice among a variety of appropriate technical options. A fourth component Project Management component was estimated to cost 5.4 million.

1.6 Revised Components

There were no components revised in this project.

1.7 Other significant changes

There were several changes made to the project design and timeline during the life of the project. These changes were mainly borne out of external circumstances triggered by developments in the international and national water and sanitation sector, lessons learned alongside project implementation or advantageous currency exchange rates. None

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of these changes required an actual increase of the initial project funds. Due to certain flexibility in the original design of WSLIC II, the project could react to these circumstances and adopt the following changes: A participatory monitoring and evaluation system that allowed the project to

particularly assess the extent of sustainability it was achieving. (see section 2.3 for further details)

The expansion of the project target areas from initially four to eight provinces, leading to a 15% increase in the number of target villages together with a substantial expansion in the number of community facilitators; changes to the village grant guidelines including an increase of the average allocation per village as well as the extension of the village grant implementation period; all these changes ultimately contributed to achieving 116% of the initial project target.

The introduction of the community-led total sanitation approach (CLTS) to the project, gradually replacing the initial concept of a revolving credit to village households that had turned out to be of limited success. Adapting and testing this sanitation approach within WSLIC II has substantially contributed to GoI’s decision to further develop the CLTS approach to a comprehensive community-based total sanitation (STBM) strategy that was subsequently adopted as a national program in 2008 (see section 2.2 for further details).

The development of comprehensive impact assessment studies including (a) a post construction census (PCC) of completed project villages, (b) a post project household survey, (c) an institutional impact study and (d) a health impact study. These studies complement the project success of reaching implementation beyond the initial project target and provide some wide-ranging findings not only concerning physical infrastructure, but also health and hygiene promotion, community management and finances and institutional arrangements.

The extension of the Credit Agreement Closing Date from 30 June 2009 to 31 December 2010. The main reason for the extension was (a) to support the implementation of STBM strategy, and (b) to provide an adequate timeframe to conduct various parts of the impact assessment studies. The extension did not require any additional funding but in fact included the cancellation of a portion of the Credit, which was a surplus despite additional activities.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

Rating: Satisfactory Quality at entry was satisfactory. The project was well grounded in the analysis of past and other similar projects and of both key sectoral and policy issues. Risks were well identified and risk-minimizing measures were adequately put in place. Especially robust and innovative was the community participatory process, which resulted in strong

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manifestation of client ownership for the project. The project design benefitted greatly from earlier experiences with the first WSSLIC project and in fact was designed as an improved follow-on. Focus was given to reduced project complexity. The first WSSLIC project was chronically hampered by its complex funds channelling, multi-agency administrative arrangements, and intensive requirements in procurement and administration due to separation of technical and non-technical contracts. WSLIC II implementation was designed to have only one line agency execution, the Ministry of Health, with direct funds channelling and a decentralized implementation plan. This feature not only improved the design, but was also in line with the new government decentralization policy. Project design included concepts of community participation, control, and willingness to pay. Following the lessons from the first WSSLIC project and other experiences much attention was given to community participation and innovative approaches were introduced. Informed choice: the design of WSLIC II included field-based technical assistance for communities to ensure they have access to the information they need to make informed choices. Willingness to pay (rooted in the idea of management of water and sanitation as an economic good): Projects supported by CARE Indonesia as well as the first WSSLIC demonstrated that even poor households and communities are willing and able to contribute to both the capital and maintenance costs of water and sanitation. Rural communities also demonstrated a willingness to support poorer members through cross-subsidies. The WSLIC II design included a minimum community contribution requirement (4% of capital costs in cash, 16% in kind) together with a grant ceiling rule based on the experience of the first WSSLIC. WSLIC II design ensured communities had control of decision making so that the services provided were the ones they actually needed and were willing to pay for. WSLIC II incorporated lessons from earlier projects by developing a funds channelling method that gives communities control for construction financing and selected health interventions. The WSLIC II design also ensured space for community capacity building so that all community groups could have an equitable voice in decision-making. The latter also helped assure sufficient financial and technical management to operate water and sanitation systems on a sustained basis. The Project identified and addressed through mitigating measures several critical risks, including the key risks pertaining to sustainability. During appraisal the risk that communities would not perform system maintenance, would not be able to replace depreciated equipment, or the community and health centers would not sustain the health component because of the indirect nature of some benefits and the variability of supplemental budget were highlighted. WSLIC II design addressed these concerns through the above-mentioned intensive support to community participation and project ownership, control over resources and attention to coordination with the health sector. See next section on how these measures played out during implementation.

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2.2 Implementation

Rating: Satisfactory Project implementation was shaped mainly by decisions taken in relation to national sector policy arrangements, project management arrangements, community empowerment, developments in the rural sanitation sector and original project features including a trust fund. Policy and sector management arrangements Flexibility and strong integration into government structures allowed the project to react well to policy changes in the national WSS sector. WSLIC II was planned and designed in a period shaped by significant transformation and progress in terms of the national sector policy. A key factor that contributed to the success of the project was its clearly defined PDO and KPIs, which at the same time allowed sufficient flexibility to adjust the project’s main approaches to ongoing changes in Indonesia’s dynamic water supply and sanitation sector. The National Policy for Community-based Water and Sanitation was a work in progress during the project preparation, and WSLIC II became the first major CWSS project to be implemented under this new policy, significantly contributing to operationalize the policy. Operationalization of the policy was achieved by setting up inter-agency technical working groups at local level. Together with the help of the AusAID funded Indonesian Water Supply and Sanitation Formulation and Action Planning facility (WASPOLA), technical working groups on WSS (POKJA) became a permanent institution both at national as well as local government level. These POJKAs not only served as newly established joint, multi-sectoral institutions to oversee the implementation of water supply and sanitation strategies, but also fostered ownership of the national policy at the local government level. WSLIC II contributed and benefitted from this development by successfully consolidating the national policy in the project provinces and districts by building the capacity of POKJAs. Ultimately, this became a key feature of the sustainability of the project’s investments and replicability of approaches. Beyond the technical working groups, several other institutions formed within the project supported a successful implementation. Village level management structures evolved, in consultation with relevant government agencies such as MOHA and other projects, like WSP’s Multi Village Pooling project (MVP) which was exploring and testing options for strengthening community management and service delivery. At the district level, these village management groups formed associations which have demonstrated success in many areas such as (a) advocates for community management groups in discussions with local government; (b) in the provision of technical assistance to resolve technical planning, design, operations and maintenance issues; (c) centralised procurement for key equipment items such as water meters; (d) financial management advice, for example on tariffs; and (e) in conflict resolution.

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Project management arrangements Apart from adjusting to ongoing policy developments, the design of the project management arrangements was key to successful implementation. Set up in the midst of the government’s decentralization efforts, WSLIC II needed to find its place within new emerging responsibilities, administrative authorities and institutional roles. To achieve this, MOH successfully established a project management structure at all levels of government. Overall responsibility for project implementation rested with the Project Steering Committee which comprised senior level representatives from associated ministries, chaired by BAPPENAS. The Central Project Management Unit (CPMU) in MOH provided technical guidance to sector agencies, monitored results and advocated for the project’s integration into local government investment programs. At the province level, Provincial Coordination Teams headed by BAPPEDA played a useful role in facilitating coordination between districts themselves as well as between districts and the CPMU. By delegating management responsibilities to Local Project Implementation Units (DPMU) within district health agencies, decision-making and transparency at the lowest appropriate level was increased. Similar to the POKJAs, project structures needed a mechanism of bringing national policies and decisions to the district level, building ownership and engagement. In the beginning, a complex organizational structure and centrally produced detailed guidelines caused some confusion about roles and decision-making processes. These guidelines created the perception that WSLIC II was more of a national rather than district owned program. Hence, strong emphasis was given to close interaction between central and district level. Through field visits, regular national and local coordination meetings and a joint annual review meeting, a strong district level ownership could be fostered. The local government engagement further depended substantially on the commitment of local government leadership (Bupati) as well as the heads of local health agencies. Project experience shows that a strong support from these persons enables DPMUs to function more effectively by guaranteeing the necessary policy and budget support and inter-sectoral coordination. Besides committed local leaders, it was critical to have well trained community facilitators to achieve sustainability of the project at the community level. These community facilitators are ultimately the project’s daily interface between the government and the community. Recruiting locally based new university graduates turned out to be a successful strategy as most of them were willing to live in the villages, work irregular hours and were less likely to be seen by the communities as ‘government representatives bringing a project’. This strategy further contributed to capacity building of these community facilitators who often were subsequently recruited as local public servants or by the private sector. There were, however, challenges as many of these new graduates lacked the experience to deal with a variety of issues beyond their job description, such as dealing with social change strategies, providing mentoring or having budget for travelling to villages.

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Community empowerment, poverty and gender The project’s participatory approach with a focus on gender and pro-poor issues was key in reaching the community. Through the emphasis on community ownership, contribution and management, the project received wide recognition for pursuing a strong participatory approach that was specifically enshrined in an explicit pro-poor and gender process. Village heads, for example, were required to gain broad community agreement prior to submitting an expression of interest to be involved in the project. Planning and design of WSS facilities was then undertaken by the communities themselves, supported by trained facilitators who helped them analyze their preferences for WSS options. Cost sharing ensured that the selected facilities were appropriate and affordable and direct channeling of funds to the villages promoted local control and ownership, which translated into a higher willingness to collect fees for O&M. Village implementation teams and post construction WSS management groups were set up to ensure sustainability beyond the project’s intervention. Challenges regarding this participatory approach arose due to processes that took too much time during the beginning of the project. The project’s gender-related performance was rated as moderate. Despite the fact that the project used several approaches to strengthen the participation of women and the poor, a study on gender equity conducted by the Bank found mixed performance for WSLIC II. The quota system ensured an average participation of 30% women in the village implementation teams, varying between 16% and 56%. However, heads/deputies of these teams were usually men, and the report also illustrated that technical, financial, procurement roles or construction supervision were occupied by men. To enhance women’s participation a number of approaches were used, such as separate women’s meetings, ensuring that the poor were informed about community meetings, or social mapping of the village to ensure transparent decision-making. Reaching women and the poor worked best through word of mouth while information boards were not very well noticed by the poor. Sanitation approaches Sanitation related activities showed greater success after some changes were made to the original approaches. Sanitation activities and associated health behavior change approaches in WSLIC II were generally less successful than the water supply activities, and only improved performance after some changes were made in a later stage of the project. The original design of a revolving fund system for household sanitation was changed to the community-led total sanitation (CLTS) approach, which had been newly developed and was trialed in some project communities before it was finally adopted project wide. The success of CLTS within the project also contributed substantially to the government’s decision to adopt their community-based total sanitation approach (STBM), an extended version of CLTS. The original sanitation revolving fund system was not working well in most project villages. The system comprised loans that were given to individual households for the

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purpose of constructing sanitation and hygiene facilities. The loans were given to the households by the villages from a block grant provided by the project in order to finance initial capital. Repayments by the households were then due over a relatively short timeframe. This system did not work well in many districts and villages for various reasons: Due to inadequate training of the community facilitators, the communities themselves

did not understand the revolving fund system very well. This resulted in limited interest of households to obtain a loan.

As the total allocation of funds was limited and managed by the village implementation team, it often resulted in very substantial loans being given to a limited number of not so poor households.

There was no medium term planning for sanitation required by project guidelines, which is why continued operation of the revolving fund system post construction was problematic or failed in a number of villages.

In 2005, some changes were made to the initial project guidelines, requiring a medium term plan to achieve 100% sanitation access, limiting the amount of fund allocation per household to IDR 200,000, and introducing a range of technologies as sanitation options to choose from. At the same time the CLTS approach proved to be a successful way of changing communities’ behavior of defecating in the open and creating demand for sanitation and hygiene facilities at household level. In close collaboration with the World Bank’s Water and Sanitation program, WSLIC II started field trials of CLTS in a number of villages from 2005, and finally adopted this approach project-wide. Compared to the revolving fund (and other conventional ways of improving access to sanitation in rural areas), several aspects were key for the success of the CLTS approach. CLTS focuses on changing people’s behavior related to sanitation and hygiene aspects

rather than constructing toilets. This creates an actual demand for toilets and increases the chance of people using latrines properly.

The community as a whole works towards achieving 100% open defecation free (ODF) status. Through peer pressure and addressing collective feelings of shame and disgust, this approach works better than addressing individual households.

No household subsidies, either in cash or in-kind are involved in the CLTS approach, leading communities to take over more ownership over their facilities.

Communities choose their preferred latrine option individually according to their preferences and affordability. Options range from very basic latrines constructed of locally available material to more sophisticated, innovative options.

The introduction of CLTS in the WSLIC II design happened in several stages, as additional socialization, training of government staff as well as community facilitators were needed to make the approach fully functional.

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Based on the positive results of the CLTS approach within WSLIC II, the GOI developed a new strategy of Community-based Total Sanitation (STBM) as national approach for improving access to sanitation in rural areas. STBM is based on CLTS but broadens the structure to five pillars: (1) ending open defecation, (2) hand washing with soap, (3) safe water management at household level, (4) safe wastewater management, and (5) safe solid waste management. By changing the sanitation approach from the revolving fund to the CLTS approach, the government demonstrated a strong commitment to finding and establishing a new way of improving sanitation in rural areas. However, the approach required the provision of consultant facilitators, and building capacity to support local governments. This was one of the reasons why it was finally decided to extend the implementation timeframe for the project from June 2009 to December 2010. Further lessons learned are described in section 6. AusAID Trust Fund Combining the loan with a more flexible trust fund turned out to be a flexible arrangement for adjusting implementation to arising needs. The AusAID trust fund of AUD 11,133 million was essential to the success of the project as it was used for technical assistance and capacity building to the CPMU or community facilitators. Being independent of government procedures and regulations, the trust fund provided certain flexibility to undertake activities, which might have been more difficult to realize in the given timeframe under a loan, for example, hiring an international specialist to prepare an impact assessment strategy and substantially overview its implementation. This was not outlined in the original PAD but contributed substantially to GOI’s knowledge for planning and implementation of future programs.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

The project monitoring system was very well developed, with monthly reporting and computerized analysis. A major component of the overall M&E design included three inter-related approaches of participatory monitoring, process monitoring, and sustainability monitoring. Communities monitored the progress of implementation through the village implementation teams, while the project management through the DPMUs and District Coordination and Technical Teams monitored the quality of implementation to identify emerging issues and bottlenecks that indicated flaws in processes and approaches. The participatory monitoring strategy was designed to collect data at different points in the project cycle and would enable project units to assess the extent to which the project was achieving sustainability. The data was obtained through observations, household visits and focus group discussions. The approach to community empowerment used in project implementation for assessment and planning became known as MPA PHAST, an amalgam of two separate approaches to community participation adapted to water and sanitation. In general terms the project was successful in developing, implementing and to a certain extent institutionalizing this approach. Some argue too much time and attention was spent on this aspect of the program which, as it was new, tended to dominate the initial years of implementation. Efforts did pay off as thousands of communities and hundreds of community facilitators have been trained and

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have used the approach successfully. Institutionalization was foreseen and with some adjustments in approach and reallocation of responsibilities was achieved. The strong monitoring system not only helped project management to keep a close watch over implementation, it also helped policy makers adopt new policies. The results from the implementation were so clear that changes to national policies were introduced and adopted. A good example of this adoption is the change in approach to sanitation at the village level, which shifted from use of revolving funds to the so-called Community Led Total Sanitation (CLTS) or STBM approach. STBM ensures the sustainability of the gains in community sanitation through an effective behavior change approach in its Open Defecation Free campaign. See section 2.2 for more details. The project included a world-class end-line rigorous impact evaluation, which is being disseminated widely. Despite an excellent monitoring system, the data by themselves were not sufficient to be used for impact evaluation; however, baseline and end line surveys were used to evaluate impact. A rigorous comprehensive impact survey was therefore included as well. The baseline survey was of lesser quality than expected and a mid-term survey was never undertaken. This created initial obstacles and need for additional studies at end line, but the end results were world-class thanks to the high level attention from the GoI and excellent choice of experts and survey firm. The results are already being used in international seminars and are helping convince other countries to adopt similar methods, especially to sanitation. Although the baseline survey was of a lower quality than the end line, the creative use of the monitoring data and the additional efforts made for the end line, ensured impact was measured and results can be attributed to the project activities.

2.4 Safeguard and Fiduciary Compliance

Environmental and Social Safeguards The project was rated Category B, triggering the following safeguards policies: 1. Environmental Assessment (OP 4.01, BP 4.01, GP 4.01) 2. Natural Habitats (OP 4.04, BP 4.04, GP 4.04) 3. Indigenous Peoples (OD 4.20)

As discussed in the PAD, there was no need for in-depth or large-scale environmental impact assessments or environmental management and monitoring plans due to the small and low-impact nature of the sub-projects. Instead net environmental benefits from the improved sanitation projects were expected. The project has instituted organizational structures through the Community Facilitation Teams that would address the environmental aspects of the project. During implementation no safeguard issues were triggered. During supervision, much attention was paid to the safeguard issues and when needed immediate follow up was given. For example, pointing out the need for more quality control of water where pumps were built close to fields that were fertilized. Supervisions also found potential contamination of water sources due to left out paint cans next to wells. Pointing out the dangers related helped raise awareness among villagers. No indigenous peoples were severely affected by project or the sub-projects.

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The project’s financial management performance is satisfactory. Despite some challenges early on in the project, the financial management overall is satisfactory. This is a result of (a) timely submission of the project financial monitoring reports and audit reports; (b) adequate internal controls at project level and also at community level in general; and (c) prompt response in resolving issues noted during supervision missions. The challenges during the initial implementation period were related to (a) delays in the approval of annual budget; and (b) delays in follow-up actions of long outstanding audit findings. The budget delays issues were resolved from 2008 onwards, when the budget documents were issued on time. The challenges related to follow up actions and audits were affected at the start by the very nature of a community approach. Follow-up actions of audit findings can be challenging when the community groups’ activities have been completed for some time.

Procurement encountered issues but overall satisfactory, especially in the last years of implementation. Particularly, the procurement of technical assistance and service contractors (consultants) were very significant in terms of management effort and together with budget issues they had a major impact on project implementation. Procurement performance from both the GOI and the Bank side varied significantly over the implementation period. In addition to the central level procurement of technical assistance and service contracts, there were about 2,300 contracts between the local government and participating communities.

2.5 Post-completion Operation/Next Phase

The GOI developed the Third Community Based Water Supply and Sanitation Program (PAMSIMAS), the official successor of WSLIC II , after the salient features of WSLIC II, basically utilizing the same approach but this time expanding coverage to urban sites and requiring replication in other sites that are funded with local budgets. Out of the eight WSLIC II provinces, PAMSIMAS is engaged in 5 (Sumatera Selatan, Sumatera Barat, Jawa Barat, Sulawesi Selatan and Sulawesi Barat). The experience in these 5 provinces is of great importance as PAMSIMAS rolls out in its 15 targeted provinces. Moreover, and a very strong sign of ownership over the project approach, several districts have allocated their own funds for starting projects utilizing the WSLIC II model in non-project communities in their respective catchment areas. In some provinces, the district level associations (HIPPAMS) have been organized under an umbrella organization to provide support for each other while in some districts, formal organizations like cooperatives had been established to provide sustained technical and logistical support to the village water committees. Sustainability of WSLIC II investments in infrastructure and behavior change have been issues of major attention throughout the implementation of the project. Supervision missions spent considerable time discussing sustainability at all levels and often found clear evidence of strong management and sustainable operation at the village level as well as an ongoing commitment to continue efforts in key behavior change areas, particularly eliminating open defecation. The emergence of non-government

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organizations (associations or cooperatives) at the district level served as vehicles for: (a) sharing experiences between communities; (b) providing political advocacy for village level organizations responsible for water supply and sanitation; and (c) providing a range of technical and capacity building services to community management organizations, were successful and widely shared among districts as good examples. Further studies such as the Post Construction Census and an Exit Strategy were set up in order to ensure sustainability of the project. The Post Construction Census (PCC) and the Capacity Building for Post Construction Sustainability (Exit Strategy) was designed to provide a realistic assessment of the status of the completed WSLIC II villages (water & sanitation coverage, functionality if water supply infrastructure, status of village management organization and their operations, participation of women and the poor in WS&S management, level of satisfaction of villagers), as a basis for district level planning for enhancing long term sustainability. The results of the 2010 PCC showed excellent results with a high level (>85%) of continued functionality of physical infrastructure and the continued functioning of village management organizations. The installation of sustainable tariff systems that allow full cost recovery has remained a big challenge. At the same time though, less than 50% of villages have implemented tariff systems that meet the minimum routine operation and maintenance costs and less than 10% that meet the project guideline requirements of providing for operation, maintenance and long-term asset replacement (depreciation). Levels of full and partial satisfaction by the community are often less than 50%. It is encouraging that the results also indicate substantial continued improvement in sanitation after the handover of assets to the community.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

Rating: Satisfactory Project Objective and Design Relevance: High The project’s development objective remains relevant to the GOI and the Bank. This is the case even as the project has gone through several CASs (FY 2001-2003 and FY 2004-2008) and CPS (FY 2009-2012). It continues to be an important contributor to the attainment of the MDGs on water and sanitation. The approach the project took is in line with the government’s program of community-based and community-driven initiatives to alleviate poverty and improve village conditions, and project results have been used to change government policies, evidence of high relevance. According to the Bank’s CAS for FY 2004-2008, the community-driven development portfolio performed satisfactorily in improving access to community level infrastructure and services. The WSLIC II experience is utilized by the GOI and the WB in their continuous development of the National Community Empowerment Program (PNPM).

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3.2 Achievement of Project Development Objectives

Rating: Satisfactory Considering overall progress and the performance indicators, the project has satisfactorily achieved its project development objective improving the health status, productivity and quality of life for poor community members in underserved rural areas. This was to be done by enabling the selected villages to improve their domestic water supply services, sanitation and hygiene in a sustainable manner and in such a way that safe water and individual household toilets near the homes would become accessible for all. The approach empowered village women and men to identify their problems and plan, implement and sustain village water services and sanitation and hygiene programs solutions with the help of participatory methods. Local schools were assisted to install water supplies, toilets and hand-washing facilities and promote good hygiene habits in school.

The project overachieved in terms of numbers of villages and beneficiaries reached. A total of 2,294 villages benefited from the program, amounting to 115% compared to the original project target of 2,000 villages. As such, the project reached a total of about 5 million beneficiaries, which represents a significant increase of 43% on the original beneficiary target of 3.5 million. At the end of the project period, WSLIC II had attained the following outputs (see Annex 2 for more details):

1. 2,294 villages provided minimally 80% of their population with improved water services (exceeding targets by 12%);

2. all villagers in these villages were trained to plan and implement their own sanitation program aiming at ending open defecation and achieving access to and use of safe and sanitary household toilets;

3. the project had built the institutional capacities of gender-balanced Village Water, Sanitation and Hygiene (WASH) committees to manage the water supplies, continue village sanitation and hygiene promotion and serve equitably the interests of all households, including the poor ones; and

4. some 6,164 village schools obtained varying combinations of a school water supply, toilets and hand washing facilities and hygiene promotion activities.

5. By the end of the project, 78% of poor households has access to clean water compared to 17% at the beginning of the project; and 33% of poor households has access to sanitation compared to 12% at the start of the project.

Together, these outputs led to the following outcomes, which show statistical significance in comparisons between treatment (project) and non treatment villages (see for detailed data-tables annex 5): Water use A larger share of households in the project areas uses improved water supply sources. Although the outcome remains marginally below the international standards of

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75-80% use (at which point it will affect health outcomes) the project at end-line evaluation had an average of 74% in the dry and 77% in the wet season. There was a significantly greater shift to house water connections, including among the poor (36%), even though these connections were financed by the users themselves. This was not better in the project villages than in the control villages in spite of the project being pro-poor. There was a significant decrease in water collection distance, especially for the poor (43 meters). The impact was further significant for time- and energy savings for the poor (50%) and the better-off, with a stronger impact for the better-off because of the house connections. Sanitation Access to household sanitation is significantly better for both the poor and the better off in project areas. However, this is only the case after the project approach of the revolving sanitation fund first was adjusted to be more pro-poor focused in 2005, and after the CLTS approach was adopted in 2008. Most toilets (85%) were fully self-financed. The shift was significant for toilets with water seals, which prevent flies’ spread feces-related diseases. Significant net reported shift away from open defecation by project households for all members (adult women and men, girls and boys). Hand-washing behavior improved significantly with mothers, girls and boys reporting washing hands with soap after defecation and mothers, both poor and better-off, who reportedly did so now before handling food. The project had a significant greater impact on access to hygiene promotion (66%) on both poor and better-off mothers, but interestingly only on poor fathers. Sanitation in schools The project had a significant impact on the presence of sanitary school toilets (96%). And although more toilets are available for girls, only 15% of toilets were exclusively for girls, while almost one in three girls in age group 9-11 said to have started menstruation. A significant higher % of schools had hand washing stations (80% of project schools) but only 28% of the schoolchildren interviewed said they always had soap to wash hands. There was no significant impact on school water supply. Improved access to water and sanitation, improved use of water sources, more time to spend on other activities, such as active feeding of children, helping and encouraging children with homework etc, will have positive effects on health outcomes and quality of life. This is not easy to measure, but the impact evaluation team made extra efforts to look for impacts. Health impacts and quality of life Mothers in the project sample reported a significantly higher reduction in child diarrhea than mothers in the control group. Due to the problems in diagnosis, recording and interventions in the control group, as well as issues with the baseline data and lack of data at health facilities, no comparison between control and treatment could be conducted to confirm the findings statistically. Scale scoring of post- and pre-situations, however, showed significant impacts on workload reduction, water availability for drinking and cooking, hygiene and domestic productivity, and a reduction in poor sanitation and its related social problems such as privacy and safety for women. There

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were also significant positive impacts for reduced WASH-related tensions between the sexes over water collection. Poor women noted a significant difference in their knowledge about the local WASH management and who to contact when needed. Remaining areas for improvement as recognized by the project and communicated in the final aide memoires and evaluation reports include: 1. Continue emphasizing the need for better access to water in order to achieve the

international standards at which point health outcomes are positively affected;

2. Regarding sanitation, the same issue is noted, with average coverage levels (62%) still below the standard of 75% to 80% for a ‘critical mass’ to contribute to health, and still far from access for all. Also, the average reported use of toilets by the different household members was never above 60%, still too low for a critical mass.

3. Management of waste is an area of concern. For those who have direct latrine pits, mothers said they would either abandon filled-up toilets and face the investment costs for new ones, or practice unsanitary emptying and end-disposal, since no sanitary services are available from the private sector. Only one-third said they would bury the contents.

4. Hygiene promotion in schools had also not improved significantly and needs more attention.

3.3 Efficiency

Rating: Satisfactory An economic rate of return study of four programs applying the community empowerment approach, including WSLIC II, shows positive economic impact with significant improvement to community welfare and local economy activities. The EIRR calculation result for WSLIC II showed the average of EIRR discount rate value above 12% (between 12.33% to 87.40%, average of 32%). The main benefits calculated are; (i) time savings due to better access, and (ii) cost savings due to ease of transport. For EIRR calculation, time savings was converted into “labor time savings”, to look into time used in general to collect water previously. The benefit of the water and sanitation project for the people is considered very high. Prior to the project, villagers had to walk between 500 metres to 2.5 km and spent an estimated 15–90 minutes of their time to reach a water source. After the project, villagers only took about 2 to 5 minutes to better access to water installation, equal to 13-55 minutes of time savings.

A General Income Multiplier analysis was used to assess the broader macro-economy impact of the funds spent to build water sanitation installation. The analysis indicates on general money circulated within the village, by estimating disposable incomes and spending pattern of key groups within the community. General Income Multiplier is also used as economy activities indicator or value added such as direct cash income from WSLIC II, which stimulated and supported the village economy. The cash injected into the 35 WSLIC II villages generated additional values equivalent to

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Rp 911,022,771. When compared to the total value of all 35 projects (including the value of village contribution, or Swadaya) this amount is very significant. The recosting analysis to compare project expenses was performed for every village. It was undertaken with a reference to government standard unit cost and contractor fee by the local government in the same year of project. This method is considered the most accurate and objective way to compare the project expenses of WSLIC projects, had it been constructed by government. It should be noted that additional value from swadaya contribution (in a form of working labor) represented the very basic savings. In some cases (such as NTB and Belitung) the government had difficulties hiring contractors due to the remote location, materials were purchased at twice the market price, and different on-going design modifications made it difficult for contractors to compete with CDD model programs. Average cost per beneficiary amounted to the average sum of $11.98 per beneficiary. The average cost varied considerably between districts, though, ranging from $4.54 to $30.78. This calculation includes the community contribution (cash and in-kind) of 20%. The total cost also includes the cost of the CAP sanitation and capacity building activities (including health promotion), which are about 15% on average.

3.4 Justification of Overall Outcome Rating

Rating: Satisfactory The overall outcome rating is Satisfactory on the basis of high relevance, satisfactory achievement of PDOs and efficiency.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development The project design and implementation strategy included clear targeting criteria for a focus on poverty, both in terms of provinces and eligible district. Within districts, low-income communities were selected. The project focused on the poorest provinces, especially their rural areas. The beneficiary population included all households in low-income communities. The project design emphasized gender aspects by increasing gender equity through insurance of women participation in the decision making process and throughout implementation. Women are traditionally the ones that collect and handle water, carry most of the burden of caring for children (including when they are ill and suffering from diarrhea and other sanitation and water related diseases) and as a result, much of their time is taken away from other productive endeavors. Therefore, women’s participation in the decision making process in this area is crucial. During implementation, several approaches were used to strengthen participation of women and the poor including separate women’s meetings were deemed necessary and ensuring the poor were informed about community meetings (and in some cases providing transport to bring them to meeting venues). The project monitoring system indicated that on average, 26% of women participated in the village decision-making process. The variation between

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provinces is very high, ranging from only 4.5% participation of women in South Sumatra to 77% participation in South Sulawesi. In most provinces, about 40% of women participated. Social mapping of the village was done to ensure transparent decision making about the location of public water points to ensure the poor would benefit. There has been widespread recognition of the project’s participatory approach as fostering community ownership, contribution and management. The principle of beneficiary ownership was enshrined in an explicit pro-poor and gender process - MPA/PHAST - designed to promote community participation and management. This process emphasized that the needs of the leaders or decision-makers were not always the same as those of poor and marginalised groups. This principle was articulated in the project design and supporting materials and promoted to all stakeholders during the initial Road Shows while village heads were required to gain broad community agreement prior to writing an expression of interest to be involved in the project. Community ownership and participation was highly encouraged throughout the project. Communities planned and implemented WSS improvements of their choice supported by trained CFs who helped them to analyse their preferences for WSS options (including size and total investment cost, construction inputs and location) using Informed Choice Catalogues and to establish their management systems. Cost sharing encouraged appropriate and affordable water supply schemes and, together with direct funds channelling to the village, promoted local control and ownership that generated willingness to collect fees for operation and maintenance (O&M). Community contribution was also instrumental in demonstrating to the community its capacity to generate sufficient funds for O&M. Village implementation teams and post construction WSS management groups were also established in all villages (the latter was a condition of final tranche payment from the project). The Capacity Building (Exit Strategy) resulted in the establishment of WSS technical working groups (POKJA). These POKJAs have become a permanent organization to oversee all activities related to community based WS&S – not just for the WSLIC II project. An effective POKJA AMPL is a key mechanism to ensure the cooperation of all relevant agencies to respond to sector challenges including sustainability and continued development. One excellent example was found in Cirebon, which developed an exit strategy that includes a plan to build capacity of the Puskesmas Sanitarians to be able to act as the first line responders on water & sanitation in the villages. A budget of IDR 200 million for this activity has been included in the 2009 district budget. (b) Institutional Change/Strengthening Community empowerment approaches, as implemented by WSLIC II, have positive impact on community capability to further village development. The creation of the village water systems gave rise to the creation of village water and sanitation management units, as foreseen in the project design, which enabled the communities to actively operate and maintain the water and sanitation systems. These groups did not

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exist prior to the project and contributed to the overall improvement in village participation by number and gender of people involved. See under earlier sections for details on sustainability. Conducting ‘roadshows’ and providing skilled implementers to assist the communities facilitated project acceptance in the communities. There was a rapid initial increase in the number of participating LGUs during its early implementation phase. The number of participating villages continued to increase to the desired levels throughout the rest of the project’s lifespan. The requisite and additional trainings were implemented, albeit delayed at the onset and suffered delays caused by other reasons. The pride that the community water management committees had in their capacities to undertake their new roles and responsibilities could be attributed to the strong support that they had received from the project. Such confidence in their capabilities was manifested by their outright manifestation of being able to help other villages accomplish what they had in their own villages. This would not have come about if not for the huge impact that the project had in the communities. (c) Other Unintended Outcomes and Impacts (positive or negative) No unintended outcomes or impacts were observed.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

Quality of Life of community as program beneficiaries Results of the economic internal rate of return survey (EIRR) were positive for 34 out of 35 villages. The survey included a beneficiary assessment using a Quality of Life Indicator to identify tangible or intangible benefits accumulated after the infrastructure finished. The target groups interviewed included (i) the local village organizer team and the village head; (ii) the villagers actively involved in the projects and their wives; and (iii) the villagers active in economic productivity such as traders or successful farmers that could give information about current commodity prices, business tendencies and other village development issues. Results of interviews from 35 villages indicated that in 20 villages water sanitation projects were considered as “strongly felt” or very positive; in 14 villages, the projects were considered “felt” or positive and only in 1 village it’s considered “barely felt” or no effect. Details are included in the economic analysis in Annex 3.

4. Assessment of Risk to Development Outcome Rating: Negligible to Low The gains achieved by the project are very likely to be sustained beyond the life of the project. The PCC bears that fact in its report. The institutionalization of STBM as a nationwide approach to rural sanitation increases the possibility that the momentum will still be present beyond the villages’ interactions with government at all levels. The PAMSIMAS follow-on project is currently operating in at least half of the WSLIC II

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project sites. This would ensure continuity of the supervision of the project’s outputs and outcomes.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry Rating: Highly Satisfactory The Bank’s highly satisfactory performance during the design and entry of the project set the basis for the key success elements of the project. The Bank has demonstrated that it had properly identified the project together with GOI as a logical next step to the existing WSSLIC project. It facilitated the preparatory steps in the project’s development and appraised the project in its entirety ensuring that it would meet its development objective and planned outcomes. The Bank ensured that the project was highly relevant for the GOI and to the prevailing CAS. It further ensured that the technical, fiduciary and economic aspects of the project were well taken into consideration. It also ensured that the poverty and gender aspects of the project would be given emphasis and were attuned to the GOI’s priorities. (b) Quality of Supervision Rating: Satisfactory The Bank conducted regular supervision missions and produced the required aide memoires for each supervision mission. The aide memoires reflect the prevailing conditions at the time of the supervision mission and brought out issues that needed to be addressed in order to facilitate project implementation. Throughout these missions, the Bank kept in mind the project’s development objective and the necessary outputs and outcomes to be achieved. The Bank properly identified issues and resolved threats that would hamper project implementation and the attainment of its objectives. The Bank consistently emphasized its fiduciary role and oversight on the project and dealt with issues and threats expediently. The monitoring and supervision undertaken in the project was satisfactory. Findings in these supervision missions resulted in appropriate actions in most cases. All the critical changes in project management approach and guideline formulation were brought up in the supervision mission reports and acted upon accordingly by both the Bank and the GOI. The willingness of the project to take on new approaches (i.e. CLTS and STBM) that would address its limitations is laudable and has proven to be quite effective. The PCC and capacity building for PCC are two other activities that ensure the project’s outcomes’ sustainability. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory

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The Bank’s overall performance was Satisfactory due to its highly satisfactory performance on ensuring quality at entry and satisfactory performance on supervision.

5.2 Borrower Performance

(a) Government Performance Rating: Satisfactory Government performance was satisfactory. During preparation, the government was driving the process and open to changes based on lessons learned from earlier operations. The project was developed at the time that government was pursuing to expand its CDD approach and was pursuing its decentralization of services. The Government was keen on making this second project even more successful than the first and was engaged throughout implementation. Important decisions regarding implementing agency, flow of funds and disbursement were taken timely and with project objectives in mind. Full use by government of the project generated data contributed to the decision to try alternative methods of achieving the development objectives. Monitoring results were shared, discussed and used to make decision about changes and adaptations. The government utilized the project as a vehicle to try out new approaches in its bid to improve communities’ access to water and sanitation. This decision was the right one in the right direction as evidenced from the results of the monitoring and evaluation activities undertaken by the project. Throughout project implementation, high-level MOH staff was accessible, engaged and result-driven which caused the successful implementation. (b) Implementing Agency or Agencies Performance Rating: Highly satisfactory The decision of having one implementing agency instead of several, as promoted by the lessons learned from the first WSSLIC project, turned out to be a very correct decision, which explains in part the success of the project. The main implementing agency was the Ministry of Health through the Directorate General of Disease Control and Environmental Health. The CPMU was established within this office. This agency took the lead in the development and implementation of the project. During the life of the project, MOH was the driving force for all its activities. The CPMU established within the MOH had staffing problems at the start, delays in replacing vacated positions, changes in organizational structure, lack of adequate project knowledge of key people hired, which affected the initial pace of project implementation. Procedural processes like procurement/contracting of consultant firms/consultants also proved to be difficult at times. Some additional setbacks were: the hiring of firms with poor financial management performance and delayed payment of consultants for months. Despite these challenges, MOH managed to comply with all the project reporting and fiduciary requirements as well as project audit reports were always positive. During the second half of the project, the implementing agency under the MOH showed excellent capacity, swift action following monitoring results and undertook very regular field visits. From supervision missions it was clear that the district and province levels management units were very engaged and highly appreciated the central level engagement and support. An AusAID funded Trust Fund was instrumental in

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providing additional expertise in technical areas and management from which all levels of implementing agencies benefitted. (c) Justification of Rating for Overall Borrower Performance Rating: Highly Satisfactory Overall rating for borrower performance is highly satisfactory based on the above. The project received high-level political support throughout implementation. Much attention was given to have capable management structures in place without interruptions, especially during the second half of the project. There was excellent buy in and strong commitment from all stakeholders. To the MOH’s credit despite its initial difficulties, it did not shy away from trying to improve its performance by taking on new strategies that it felt would enhance achievement of its goals. Its strong push to test CLTS and eventually adopt STBM for its project sites demonstrates its commitment and readiness to achieve its objectives. This bold move coupled with a desire to be able to objectively determine its accomplishments through the implementation of several monitoring and evaluation tools, certainly paid off in the end.

6. Lessons Learned Experiences from previous projects have contributed to the successful project design of WSLIC II. During two years of extensive project preparation, which included hiring a local NGO with experience in community work, WSLIC II was designed by drawing on a range of lessons learned from its predecessors. The decision with the possibly highest impact on the successful implementation of the project was to keep the project responsibility with only one agency, the Ministry of Health. The experience stemmed from the first WSSLIC project, whose project design was set up in a decentralized way, but ultimately resulted in a focus on constructing infrastructure. Despite construction progressing well, it did not match perfectly with the original project objective of improving livelihood and health of people in a community-based way. Hence by attributing all implementation responsibility to MOH at national level, and district health offices at local level, the community-based character of WSLIC II with the objective of improving public health could be maintained and community participation turned out to be higher than during the first WSSLIC project. Setting up a reliable and comprehensive M&E system contributed significantly to government ownership of the project. Based on previous experiences, a comprehensive, participatory M&E system was created using the MPA-PHAST methodology: During engagement sessions with communities, health related indicators (such as water/sanitation coverage, diarrhea prevalence, etc.) would be discussed and consequently entered into the monitoring system by project staff. The data collected was highly appreciated by local governments who used it to create awareness for project related health issues, mobilize funds and allocate resources to the project. Despite the excellent results of the M&E system, it remains to be discussed whether the time and effort spent was needed altogether, or if a simpler system would have given similar results.

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Replication of the project’s approach by government, however, remains low and is still facing a number of challenges. LG have shown reluctance to adopt the project’s M&E system, despite its importance and recognition for it. Reasons for that are, amongst others, the project related focus of the M&E system, which favors more individual champions as drivers than building an actual M&E system within the government structures. Another reason for limited replication of the projects approach by LG can be attributed to the limited capability of governments’ administrative systems to channel funds directly to communities, as the project used to do it. Only one district, Pamekasan in East Java, has found a way of successfully replicating the project’s approach to more villages: The local government created a grant which allows them to transfer funds directly to the communities. This would have been possible in other local governments, too; the difference, however, was that in Pamekasan former WSLIC II facilitators were still available to explain the grant system to the communities and help them participate. It was crucial for the project’s efforts in sanitation to be able to adjust its methodology to new findings and philosophies in the international sanitation sector. Since the mid-2000s, there has been increasing evidence about the success of the CLTS approach in other large Asian countries. At the same time the project’s initial approach of financing access to sanitation facilities through a revolving fund showed only limited success. It was therefore decided to trial the CLTS approach in some project villages as first overall introduction of CLTS to Indonesia. The successful trial then lead to adopting the CLTS approach project-wide and subsequently assisting the national government in adopting an extended version of the approach (STBM) as national program to scale up access to sanitation in rural areas. The project’s sanitation goals were slightly altered by the introduction of the new approach, e.g. by now including ‘open defecation free’ status in villages before actual toilets were constructed. The aforementioned community-focused character of the project was an essential prerequisite for this new sanitation philosophy, which is now considered as one of the most successful approaches to improving access to rural sanitation and ultimately reaching the sanitation MDG. The establishment of district level associations proved to be a very valuable source of support for community organizations. Having community organizations manage their own water schemes imposed certain challenges in terms of procuring material, consultants, or conducting maintenance works. From the beginning, the project therefore stimulated the formation of district level associations as an extended arm of the local health department. These associations provided very valuable support to the communities by assisting with collective procurement and assistance to technical problems during construction and maintenance. Having this support available, many villages developed a strong own initiative to upgrade their systems and were also able to maintain these. E.g. from basic, gravity-fed systems to more complex piped systems, or initiating water meters for their piped systems. Having a trust fund available to complete the loan turned out to be one key factor to the flexibility and success of the project. While a loan demands quite rigid criteria to implement activities, trust fund money can be used in a more flexible way to serve needs

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as they arise. Within WSLIC II, the trust fund was used especially to strengthen capacity at all levels in technical and management areas. The trust fund further allowed the introduction of innovative approaches and helped greatly to introduce the new approaches to sanitation. It is without doubt the TF contributed to the overall success of the project. Government wide arrangements of community-based approaches is an important element of reaching projects goals related to soft targets such as behavior change. The project’s approach towards behavior change in hygiene and sanitation was based on a non-subsidy based system that relied on triggering the communities’ own demand rather than stimulating it through external subsidies. This approach usually has a good success rate, but can also be easily compromised by offering subsidies alongside. During project implementation, conflicts arose in some provinces between WSLIC II’s non-subsidy approach and other Bank financed projects such as PNPM (as well as some smaller NGOs' and some local government programs). The latter programs provide sanitation subsidies to households, which undermined the message of WSLIC II that stated subsidies are not necessary. This is issue was raised during the implementation phase and was discussed between all stakeholders.

One weakness of WSLIC II was the tariff structure based on purely social considerations. Adopted through participatory approaches, communities determined the level of their tariffs themselves, mainly basing it on purely social considerations. The project’s consultants assisted communities with this exercise, but many of them were also no trained economists, and were therefore not able to focus on economically sustainable tariffs. Another weakness was some of the language used throughout the project, starting already with the project’s name. Referring to ‘low-income communities’ in the project’s name, contributed to the people’s perception that the beneficiaries are in fact poor. Hence, they should therefore not be requested to contribute anything from their part. Further, the language used throughout essential community discussions also contributed to misunderstandings in some cases. Talking about prices of one cubic meter of water, for example, is a very abstract thing to understand for many people, if it is not made clear through concrete examples to relate to. It is therefore recommended to use units that are common within the community, given that community ownership is a key element of reaching the project’s objectives.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies - None. (b) Cofinanciers - None. (c) Other partners and stakeholders – None.

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Annex 1. Project Costs and Financing (a) Project Cost by Categories (in USD Million equivalent)

Category Budget (in 000, USD) Actual Expenditure

(SA+SBUN) IDA CREDIT 3382-1ND

Original Credit Agreement

Revised Credit Agreement

1. Goods

1,702.00 254.00 250,901.21

2. Village Grant

43,628.00 43,080.00 42,283,552.46

3. Service Delivery Contractors

26,420.00 34,143.00 34,157,751.04 4. Consultant Services 495.000 1,897.00 1,090,463.82 5. Project Management 495.000 1,729.00 1,746,241.44 6. Unallocated 4,660.000 0.00 0.00

Subtotal Credit

77,400.00 81,103.00 79,528,909.97 (b) Financing

Source of Funds Type of

Cofinancing

Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)

% of Appraisal

AUSTRALIA: Australian Agency for International Development

6.50 7.77 119.53%

Borrower 12.20 11.88 97.37% International Development Association (IDA)

77.40 81.10 104.78%

LOCAL: BENEFICIARIES 10.60 11.96 112.83%

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Annex 2. Outputs by Component The overall rating of project implementation is satisfactory bordering on highly satisfactory, as the project has reached more villages and substantially more beneficiaries than it foresaw at appraisal without increasing the funding sources. Overall village water supply and sanitation interventions were implemented in 2,294 villages reaching a total of 5 million beneficiaries. This represents a significant increase of about 15% on the original Credit Agreement target of 2,000 villages, and an increase

of 43% on the original beneficiary target of 3.5 million. Household access to clean water in project areas reached 80% for all households and 78% among poor households. Household access to sanitation was achieved for 41% for all households spread across all socio-economic groups and 33% among poor households.

Component 1: Community and local institutions

capacity building (34.2 million) The aim of this component was to assist communities, through service contracts with local firms, NGOs or academic institutions, to organize effectively and also to obtain the technical capacity to plan, manage, and sustain water programs, sanitation and community health. This component was designed so that the

participatory methods employed at the community level would be closely intertwined with hygiene and sanitation promotion. The following outputs were envisaged: (i) an increase in the capacity of TFM, TKM, and communities; (ii) training for districts staff, sub-districts and NGOs; (iii) technical support for the process at the district and sub-district government level; and (iv) technical support for district government.

Figure 1: Village implementation progress by province compared with original and revised targets

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

SumBar SumSel BaBel JaBar JaTim NTB SulSel/ SulBar

Project

Table 1: Target villages and final outcome

Province Districts Target Villages

Final Outcome

East Java 14 500 838 (+338)

NTB 6 300 458 (+158)

West Sumatra 4 300 317 (+17)

South Sumatra 4 260 250 (-10)

Babel 1 40 37 (-3)

West Java 3 300 227 (-73)

South Sulawesi 3 300 167 (-133)

West Sulawesi 2

Total 37 2,000 2,294 (+294)

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The results are satisfactory. The design of Component 1 emphasized the development and use of participatory approaches to be employed at the community level to assist them in making informed choices about the water, sanitation and health interventions to be funded by the project in their communities. This approach became known as MPA/PHAST. It envisaged an integrated or holistic approach to analysis and planning by the communities. This approach demands intensive training and facilitation. As a result of a strong focus on this approach in the early years of the project, thousands of communities are aware of MPA/PHAST and hundreds of facilitators are trained in its use. The preparation requirements were very substantial and the time required for the detailed development and documentation of community processes was underestimated and skilled trainers were in short supply. Although the MPA/PHAST approach initially was very ambitious, comprehensive and at times thought too ambitious, the project successfully managed to achieve its outputs. Successful facilitation at the district and village level led to the development of community action plans in all villages, very few drop outs, and most villages finalized the three tranches of block grant within the project period and achieved official hand-over status (table below).

Table 2: Number and % of original target villages that prepared village plans and completed implementation

Output/Outcome No of Villages % of original target

Community Action Plans prepared 2,315 116% Villages that received first tranche of block grant funds

2,298 115%

Villages that received the third and final tranche of block grant funds

2,285 114%

Villages that achieved post-construction status = hand-over to village committee

2,286 114%

Component 2: Improving Health Behavior and Services (13.9 million) The objective of this component was to improve hygiene, health behavior and community management of health services related to water borne diseases. Two sub-components comprised a school health and hygiene program and a community health program. A core part of the component was the adaptation and implementation of PHAST to be used in communities and schools. Diarrhoea, skin diseases and worms in children were the special focus of the component. The results are satisfactory. Throughout the project implementation, most attention was spent on the planning phase which included sanitation and behavior change but during implementation, most attention tended to be given to ensuring water supply first. As a result, only in the latter years of the project sanitation became more visible. This was also the result of an important shift in approach to behavior change for sanitation improvement, away from subsidies for individual household toilets to the now widely accepted CLTS – STBM approach.

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The school and other institutional sanitation facilities were funded from the village grant, however, for the household toilets constructed under the community sanitation component the toilets were funded in one of three ways: under the RF approach (a) some households received a loan which was to be repaid to the fund; while (b) others funded their own toilets directly using their own funds (swadaya). Under the CLTS approach (c) all households funded their own toilets although there was some cross funding/subsidy between households usually for the very poor, widows etc. After having undertaken the CLTS approach in all project districts between 2006 and 2009, the project adopted the more comprehensive STBM (Community Based Total Sanitation) approach (extending the CLTS approach by some further components). Triggering has been undertaken in 385 villages and 1,066 hamlets with already 371 hamlets (dusun) and 69 villages declared ‘Open Defecation Free’ to date. Further, strong local ownership and support for the STBM program can be noted in most of the districts. Moreover, field data generally indicates a continuously improving access to sanitation by the villages’ own efforts in the majority of the villages receiving village grants. This is a very important proof of ownership and a further step towards the sustainability of the project. Tables below show the outputs. Table 2: Number of WSLIC II facilities by category and type

Component 3: Developing Water Infrastructure (53.2 million) The aim of this component was to provide communities with accessible, convenient, and clean water in adequate quantity in response to demands expressed by them. A demand responsive strategy was used, requiring community bidding for project participation and community co-

Other institutional sanitation

Hand washing facilities

Toilets ToiletsRevolving

fundCLTS

Other (Self

funded & public toilets)

Total toilets

Beneficiaries (Person)

317 1,674 386 456 12,970 4,837 5,765 23,572 90,129

257 1,458 303 61 10,317 14,272 496 25,085 146,837

37 0 27 0 1,554 0 0 1,554 27,126

227 2,630 1,049 172 9,460 17,805 9,611 36,876 264,001

838 7,419 2,155 398 46,004 16,722 51,695 114,421 680,873

459 4,653 1,277 9 18,508 12,744 88 31,340 115,808

96 1,040 304 7 5,119 3,061 0 8,180 50,105

71 784 151 4 2,105 2,813 34 4,952 22,778

2,302 19,658 5,652 1,107 106,037 72,254 67,689 67,689 1,397,658

71 396 90 75 2,704 0 1,836 4,540 24,554

333 2,091 512 231 12,669 0 6,431 19,100 138,162

302 2,205 525 129 12,061 0 8,334 20,395 146,190

228 1,805 408 97 7,457 0 7,211 14,668 99,540

443 3,382 1,153 219 42,839 931 17,992 61,762 318,136

531 5,153 1,612 211 28,182 31,262 19,826 79,270 398,687

284 3,266 1,025 114 125 29,955 6,059 36,139 198,389

110 1,360 327 31 0 10,107 0 10,107 73,999

2,302 19,658 5,652 1,107 106,037 72,254 67,689 67,689 1,397,658Total

Fiscal Year 2003

Fiscal Year 2004

Fiscal Year 2005

Fiscal Year 2006

Fiscal Year 2007

Fiscal Year 2008

Community sanitationProvince/Fiscal Year

Nu

mb

er o

f V

illa

ges

Fiscal Year 2001

Fiscal Year 2002

West Sulawesi

South Sulawesi

Total

Number of WSLIC-2 facilities by category & type

School sanitation

West Sumatra

South Sumatra

Bangka Belitung

West Java

East Java

West Nusa Tenggara

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financing (at least 4% in cash and 16% in kind). Communities will have direct control over sub-project financing through block grants, and control over sub-project design, providing a choice among a variety of appropriate technical options. The results are highly satisfactory. The project target was to achieve improved access to water in 80% of participating villages. As shown in the below tables, household access to clean water in project areas reached 80% for all households and 78% among poor households. Table 3 shows the number and %-achieved target for villages that have functioning water supply facilities. Table 3: Number and % villages with functioning water supply systems

Output/Outcome No of Villages % of original target

Villages with functioning water supply facilities (excludes 6 villages awaiting PLN connection)

2,280 114%

Villages that completed all water supply and sanitation infrastructure and village level training/capacity building activities

2,286

114%

Table 4: Household Access to Clean Water and Sanitation, Before-After Construction by Social Class - Sustainability Monitoring System

Rich HH Middle HH Poor HH All HH Rich HH Middle HH Poor HH All HH Rich HH Middle HH Poor HH All HH

West Sumatera 48% 15% 13% 19% 89% 89% 93% 91% 41% 73% 79% 72%

South Sumatera 30% 11% 2% 8% 92% 93% 97% 95% 62% 82% 95% 87%

Bangka Belitung 43% 24% 13% 20% 51% 57% 72% 65% 8% 33% 59% 45%

West Java 72% 40% 22% 34% 95% 89% 86% 88% 24% 48% 64% 54%

East Java 55% 35% 17% 27% 85% 78% 73% 76% 31% 44% 56% 49%

West Nusa Tenggara 74% 48% 19% 31% 89% 76% 68% 72% 15% 28% 49% 41%

South & West Sulawesi 46% 28% 16% 22% 87% 87% 87% 87% 41% 59% 71% 65%

OVERALL 58% 35% 17% 27% 88% 81% 78% 80% 30% 47% 61% 53%

West Sumatera 42% 18% 3% 12% 60% 34% 34% 38% 18% 16% 32% 26%

South Sumatera 50% 18% 5% 15% 80% 36% 31% 40% 30% 18% 26% 24%

Bangka Belitung 45% 29% 13% 22% 70% 63% 77% 72% 25% 34% 64% 51%

West Java 65% 34% 16% 27% 86% 49% 33% 44% 21% 15% 17% 16%

East Java 63% 32% 14% 26% 71% 48% 37% 45% 8% 17% 23% 19%

West Nusa Tenggara 67% 35% 9% 20% 76% 46% 22% 32% 9% 11% 13% 12%

South & West Sulawesi 59% 32% 12% 22% 75% 52% 35% 43% 16% 21% 23% 21%

OVERALL 62% 31% 12% 23% 74% 46% 33% 41% 13% 16% 21% 18%

Water Supply

Sanitation

Household Access

ChangesBaselinePROVINCE

After Construction

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Annex 3. Economic and Financial Analysis (including assumptions in the analysis)

A study analyzing the economic impacts of WSLIC II, CERD, P2D and UPP (Urban Poverty Project) was undertaken to shed light on the economic rate of return (ERR) of the implemented interventions and compare results with the estimated ERR at appraisal. The analyses focused on: (a) calculating the EIRR of the project’s investment in roads & bridges, water supply and irrigation; (b) analyzing the macro economic impacts of benefits resulting from various infrastructure and activities designed to support development and village community empowerment; and (c) re-costing projects to inform future investments. The study analyzed 4 programs, only the relevant parts for the WSLIC II program are included in this summary.

The study objectives are as follows: (a) demonstrate the economic impacts of CDD-empowerment programs on group welfares; (b) demonstrate the efficiency of CDD approaches compared to other development mechanism carried out by Local Government through direct contractors; (c) show the contribution of the economic impacts of CDD programs to the higher program targets of poverty reduction; and (d) demonstrate the benefits of the CDD empowerment program as a learning program for communities to participate in development process.

To undertake the study, a number of sample villages were defined. A total of 120 villages for all programs: (i) 29 villages UPP, (ii) 36 villages P2D, (iii) 20 villages CER0; and (iv) 35 villages WSLIC II. Unfortunately the effects are difficult to disentangle for each program separately. They were selected for one study based on the CDD approach commonality.

Findings WSLIC II EIRR In WSLIC II project, funding allocated for the water sanitation comes in a range of 130 million rupiah to 250 million rupiah, which consisted of 104–167 million rupiah grant, 26–83 million rupiah in a form of local contribution (swadaya). The grant is from the Central Government, there are not necessarily to be returned by the district government, meaning it’s not a loan or debt term. EIRR analysis for water sanitation infrastructure in WSLIC II aimed to measure the benefit felt at the cost of the project. It is assumed that the average of project operational life is close to 10 years. The main benefit calculated are; (i) time savings due to better access, and (ii) cost savings due to ease of transport. For EIRR calculation, time savings was converted into “labor time savings”, to look into time used in general to pick-up water previously. Prior to the project, villagers had to walk between 500 metres to 2.5 km and spent an estimated 15–90 minutes of their time to reach a water source. This had significant negative impact towards local productivity, due to reduced local labor in the field, reduced time for woods and cattle gathering, and reduced school attendance for children or absenteeism. After the project, villagers only took about 2 to 5 minutes to access a water installation, equal to 13-55 minutes of time savings. This was especially true in villages which used pipe-systems to connect their houses to the newly built village public tap.

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Before this project, villagers didn’t have any expenses for water as they collected water from a source such as a spring or a river, however, after the water sanitation project, in general villagers have to pay between Rp.500 – Rp.15,000 for the maintenance of the infrastructure. This feature illustrates the embedded willingness to pay and to use water and sanitation services when available. The quality of life indicator which parallel with the EIRR analysis could be seen at this table 1 that shows general estimation of every district EIRR’s. Table 1: EIRR – 35 Projects in 8 District

Kabupaten(District) /Provinsi (Province) Project Number Average EIRR 1. Pasaman/Sumatera Barat 3 16.60% 2. Solok/Sumatera Barat 2 19.07% 3. Sijunjung/Sumatera Barat 1 12.93% 4. Dharmasraya/Sumatera Barat 1 12.33% 5. Muara Enim/Sumatera Selatan 3 47.03% 6. Belitung/Bangka-Belitung 4 17.55% 7. Bojonegoro/Jawa Timur 4 38.10% 8. Lamongan/Jawa Timur 4 54.20% 9. Probolinggo/Jawa Timur 4 17.90% 10. Ponorogo/Jawa Timur 5 19.04% 11. Lombok Timur/Nusa Tenggara Barat 4 87.40% Total Projects 35 32.40%

The EIRR calculation result showed the average of EIRR discount rate value above 12% (between 12.33% to 87.40%). This means the benefit of water sanitation project for the villagers are very high. There are 9 projects that reached EIRR above 50%, out of the 35 water sanitation project samples. Table 2 provides an explanation on the reason why these projects reached such high EIRR. Table 2: Project with EIRR result >50% Village Location EIRR Reasons for high EIRR Desa Sido Mulyo Kec. Gunung Megang Kab. Muara Enim

73.9% The well is located in a populated compound (transmigration from Java). Before the project, villagers took water for bathing and wash in belik (a small pond), about 100 metres from the village, walking distance about 12 minutes and more for queuing. Bathing only once per day. After the project, access to water is only 3 minutes. Majority of villagers work at palm-oil plantation (previously PIR labor), with relatively low income, before with the Perkebunan Inti Rakyat (± Rp.900,000.-).

Desa Tanjung Agung Kec. Semende Darat Ulu Kab. Muara Enim

51.2% The project location is in the middle of populated compound, in higher hills. Before WSLIC II, villager got water from siring (running water on the side of the road). If dry, they got water from the river for about 200 metres or 20 minutes walk. After the project, it only takes them about 3 minutes to get water.

Desa Kemlagigede Kec. Turi Kab. Lamongan

58.5%

The average of people’s income is quite high Rp. 758,000 rupiahs. Beneficiaries up to 344 HH = 1,789 lives, there are time savings and increase of water usage in an average of 35 litres/person/day to 65 litres/person/day. TKM performance is quite good.

Desa Pucakwangi 58.7% The average of people’s income is quite high Rp. 852,000 rupiahs.

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Village Location EIRR Reasons for high EIRR Kec. Babat Kab. Lamongan

Beneficiaries up to 292 HH = 1,460 lives, with water sanitation in front of their houses, there are increasing water usage from 31 litres/person/day to 56 litres/person/day. TKM performance is quite good.

Desa Gunungrejo Kec. Kedungpring Kab. Lamongan

59.4% The average of people’s income is high Rp. 852,000 rupiahs. Beneficiaries 292 HH = 1,460 lives, with the water sanitation nearby, the average of water usage which usually reached 31 litres/person/day rising to 56 litres/person/day. TKM performance is good.

Desa Aikmel Utara Kec. Aikmel Kab. Lombok Timur

118.3% Time difference of time spent for water after the project is very high about 140 minutes before project 150 minutes after project only 10 minutes. This is related to the location of water spring about 2.5 Kms from the village and 7 metres depth to get the water spring.

There are small amount of O&M expenses every month, Rp.180,000 for 3 people who’s not been paid regularly (if only there’s damage or water system inspection). The maintenance cost of Rp.150,000 (for sudden damage). There are small retribution every month, 1000/households, which is used to pay the person who work on O&M.

Desa Lendang Nangka Kec. Masbagik Kab. Lombok Timur

95.4% The project located inside the populated area, where the villagers used to get water from a spring about 1.5 kms or an estimation of 90 minutes walk. Now they could access them for 10 minutes. The water reserved in the tank located nearby the housing.

Other benefit from the project, the invention of local-brick production. This adds to the project income increasing benefit.

Desa Sukaraja Kec. Jerowaru Kab. Lombok Timur

76.3% The well is located inside the populated area. Before the project they took about 300 to 400 meter metres to the old well, taking up to 25 minutes of their time. After digging the well, they access it in only 10 minutes.

The villager’s income is improving, because they used the water from well to plant vegetables nearby their households.

Desa Tebaban Kec. Suralaga Kab. Lombok Timur

59.6% The project is located inside the populated area. Before the project, the water from the well is limited and quite far, about 20 minutes. After the project (90 digging well units), they could access it in 10 minutes.

Average of people’s income is quite high from the vegetables planting and spices (± Rp.900,000.-).

General Income Multiplier General Income Multiplier analysis was used to assess the broader macro-economy impact of the funds spent to build water sanitation installation. The analysis indicates on general money circulated within the village, by estimating disposable incomes and spending pattern of key groups within the community. General Income Multiplier is also used as economy activities indicator or value added such as direct cash income from WSLIC II, which could stimulated and moved the village economy. Table 3 shown the analysis average of money circulated calculated in every district.

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Table 3: General Income Multiplier – 35 Projects in 8 Kabupaten/Districts District/Province Projects

Number Average

Multiplier In Rps Project Cost

Total %

Pasaman/Sumatera Barat 3 1.28 147,799,653 598,491,222 25%Solok/Sumatera Barat 2 1.31 95,995,932 390,356,421 25%Sijunjung/Sumatera Barat 1 1.07 11,317,151 243,069,826 5%Dharmasraya/Sumatera Barat 1 1.049 7,615,326 243,816,227 3%Muara Enim/Sumatera Selatan 3 1.11 47,370,947 599,930,800 8%Belitung/Bangka-Belitung 4 1.23 124,512,300 718,853,740 18%Bojonegoro/Jawa Timur 4 1.15 107,604,339 799,993,949 13%Lamongan/Jawa Timur 4 1.19 123,984,622 794,367,526 16%Probolinggo/Jawa Timur 4 1.12 80,612,423 799,999,945 10%Ponorogo/Jawa Timur 5 1.14 118,833,508 999,444,896 12%Lombok Timur/ Nusa Tenggara Barat

4 1.07 45,376,571 844,273,976 6%

Projects 35 911,022,771 7,032,598,528 13% The cash injected into the 35 WSLIC II villages generated additional values equivalent to Rp.911,022,771. When compared to the total value of all 35 projects (including the value of village contribution, or Swadaya) this amount is very significant. It also showed that the worker rarely spent their money to buy food or households needs in local warung (store). This is shown by the multiplier value of 5% to 18%. In other words, most of the project cash had been spent outside the villages. Most of the income might be used outside village for house need and considered “leakage” in village economy. In community empowerment project, local materials for infrastructure such as sand, stones and woods should be collected from inside the village, but in reality it didn’t appear as so. Almost 80% of all materials needed for WSLIC II, such as cement, iron frame, pipe and pipe-fitting was only found in sub-district stores, or even materials store in district level. In Solok and Belitung District, local materials purchased with the project money were higher than other area. Cash equivalent value from multiplier compared to other expensed average on 25%. Project re-costing The recosting analysis was performed for every village with government standard unit cost and contractor fee by the local authority/ Pemerintah Daerah (Pemda) in the same year of project. This method is considered the most accurate and objective way to compare the project expenses of WSSLIC projects, if it had been constructed by government. It should be noted that additional value from swadaya contribution (in a form of working labor) represented the very basic savings. In some cases (such as NTB and Belitung) the government had difficulties on hiring contractors due to remote location, materials purchased that cost twice market price, different on-going design modification that makes contractor difficult to compete with CDD model programs (CDD).

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Price comparison between project without swadaya with project based on HPS shows savings of Rp.2,650,501,915,- (56.54%), meanwhile the project budget with swadaya compared to HPS budget shows savings of Rp. 1,006,816,180,- (16.71%). Consolidated table 4 and 5 showed cost savings amounts produced by the CDD approach. Table 4 and table 5 shows these facts: Table 4: Budget Comparison PROGRAM WSLIC II (Without Swadaya) - Project vs Pemda/government Districts/Province Projects

NumberProject Cost

(Without Swadaya)

Pemda Cost (HPS )

% Projects/Pemda

Pasaman/Sumatera Barat 3 494,730,161 67,232,281 34.81%Solok/Sumatera Barat 2 308,198,915 443,268,887 43.83%Sijunjung/Sumatera Barat 1 159,984,504 271,022,856 69.41%Dharmasraya/Sumatera Barat 1 159,991,200 381,960,627 138.74%Muara Enim/Sumatera Selatan 3 447,895,300 661,791,081 48.12%Belitung/Bangka-Belitung 4 575,082,992 791,043,300 37.35%Bojonegoro/Jawa Timur 4 640,020,683 896,445,514 40.07%Lamongan/Jawa Timur 4 571,944,618 926,607,853 61.99%Probolinggo/Jawa Timur 4 639,999,945 913,766,665 42.78%Ponorogo/Jawa Timur 5 799,505,917 1,099,389,366 37.51%Lombok Timur/Nusa Tenggara Barat 4 591,558,559 986,886,277 67.29%Total Proyek 35 5,388,912,793 8,039,414,708 58.15%

Table 5: Budget Comparison PROGRAM WSLIC II (With Swadaya) -- Project vs Pemda/government

District/Provinces NumberProjects

Project Cost ( With Swadaya)

Pemda Budget (HPS)

%s Projects/Pemda

Pasaman/Sumatera Barat 3 598,491,222 67,232,281 11.47% Solok/Sumatera Barat 2 390,356,421 443,268,887 13.59%

Sijunjung/Sumatera Barat 1 243,069,826 271,022,856 11.50%

Dharmasraya/Sumatera Barat 1 243,816,227 381,960,627 56.66% Muara Enim/Sumatera Selatan 3 599,930,800 661,791,081 10.31% Belitung/Bangka-Belitung 4 718,853,740 791,043,300 9.88% Bojonegoro/Jawa Timur 4 799,993,949 896,445,514 12.06% Lamongan/Jawa Timur 4 794,367,526 926,607,853 16.63% Probolinggo/Jawa Timur 4 799,999,945 913,766,665 14.22% Ponorogo/Jawa Timur 5 999,444,896 1,099,389,366 10.00% Lombok Timur/Nusa Tenggara Barat 4 844,273,976 986,886,277 17.50% Total Proyek 35 7,032,598,528 8,039,414,708 17.15%

Quality of Life of community as program beneficiaries Quality of Life Indicator is used to identify if tangible or intangible benefit existed once the infrastructure is in place. It is a simple indicator that illustrates the economy chain effect in every village where new infrastructure was built. The key factor is to select as accurately as possible the first benefit that occurred within the cause-effect chain. Once the first benefit is found in the indicator list. other benefits could arise as good progress of community quality of life in a village. Simple scoring system built was based on number came up into the project

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score with column such as “Ada/Present” and “Diharapkan/Expected” combine with Degree of Importance of a project which was combined in every indicator chosen for interviews. Based on this system a project that reached 76%-100% should be rank as “Impact Strongly Felt”. Rank between 51%-75% in a category of “Impact Felt”. between 26%-50% “Impact Barely Felt” and rank 0%-25% should be “Impact Hardly Felt”. Target groups needed to be interviewed: (i) The village Local Organizer Team/Tim Pelaksana Kegiatan and village-head; (ii) the villages actively involved in the projects and their wives; and(iii) villagers actively in economy productivity such as traders or successful farmer that could give info on current commodities price. business tendency and other village development issues. Result of the interviewed in 35 villages indicated that water sanitation projects existed in 20 villages was considered “strongly felt”. In 14 villages it is considered “felt” and only in 1 village it is considered “barely felt”. Table 6 shows the degree of importance felt by the community as impact of the projects in the village. Table 6: Impact felt due to WSLIC projects

Districts/Provinsi Number Villages

Strongly Felt

Felt Barely Felt Not Felt

Pasaman/Sumatera Barat 3 1 2 0 0Solok/Sumatera Barat 2 2 0 0 0Sijunjung/Sumatera Barat 1 1 0 0 0Dharmasraya/Sumatera Barat 1 1 0 0 0Muara Enim/Sumatera Selatan 3 2 1 0 0Belitung/Bangka-Belitung 4 0 4 0 0Bojonegoro/Jawa Timur 4 1 3 0 0Lamongan/Jawa Timur 4 3 1 0 0Probolinggo/Jawa Timur 4 3 0 1 0Ponorogo/Jawa Timur 5 3 2 0 0Lombok Timur/Nusa Tenggara Barat 4 3 1 0 0Total Proyek 35 20 14 1 0

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Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members

Names Responsibility/

Specialty Lending Howard Barnum Economist. Health Systems Richard Pollard Water & Sanitation Systems Nilanjana Mukherjee Participatory Development Rosario Aristorenas Costab. Project Processing Alfred Lambertus Community-Based Water and Sanitary Ratna I. Josodipoero Hygiene & Sanitation Promotion Rizal Rivai Procurement Novira Asra Financial Management Wijaya Wikrema Financial Management Yogana Prasta Disbursement Hilarion Bruneau Disbursement Anthony Toft Legal Counsel Scott Guggenheim Peer Reviewer Parameswaran Iyer Peer Reviewer Vijay Jagannathan Peer Reviewer Gillian Brown Peer Reviewer Vicente Paqueo Peer Reviewer

Supervision/ICR

Names Titles Unit Responsibility/

Specialty Russell Abrams Consultant ETWEA Task Team Leader Novira Kusdarti Asra Financial Management Specialist EAPCO Financial Management Chitrawati Buchori Consultant EASFP Gender Titie Hadiyati Consultant EASHD Monitoring Ratna I. Josodipoero Education Spec. ETWEA Participatory Development Alfred Lambertus Consultant ETWEA Sanitation Nilanjana Mukherjee Consultant ETWWP Sanitation Richard W. Pollard Sr. Water & Sanitation Spec. ECSSD Task Team Leader Vicente Paqueo Sector Coordinator EASHD Task Team Leader Yogana Prasta Operations Adviser EACIF Disbursement Arlan Rahman Consultant EASIS Disbursement Edhie Santosa Rahmat Consultant EASHD Sanitation Vivianti Rambe Environmental Spec. EASIS Safeguards Rizal H. Rivai Sr. Procurement Spec. EAPCO Procurement Vicente Paqueo Sector Coordinator EASHD Task Team Leader Claudia Rokx Lead Health Specialist EASHD Task Team Leader Imad Saleh Lead Procurement Spec. EAPCO Procurement Agus Sasmito E T Consultant EASHD Health Specialist Francisca Melia Setiawati Consultant EASIS Safeguards George Soraya Lead Municipal Engineer EASIS Infrastructure Andry Utama Thamrin Finance Analyst LOADM Disbursement Paulus Bagus Tjahjanto Procurement Spec. EAPCO Procurement Anita Kentjanawati Tuwo Procurement Spec. EAPCO Procurement Farida Zaituni Consultant EASIS Environment

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Martin Benedikt Albrecht Water & Sanitation Specialist TWIEA/WSP Water & Sanitation Systems Roberto Antonio F. Rosadia Health Specialist EASHH ICR TTL

(b) Staff Time and Cost

Stage of Project Cycle Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including travel

and consultant costs) Lending

FY99 0 25.87 FY00 82.42 336.81 FY01 3.51 9.21

Total: 85.93 371.89 Supervision/ICR

FY01 19.07 83.36 FY02 24.95 54.81 FY03 17.38 53.12 FY04 32.55 78.15 FY05 33.89 91.08 FY06 40.77 100.82 FY07 16.69 58.66 FY08 19.71 65.53 FY09 9.48 69.05 FY10 9.60 63.91 FY11 0.00 3.84

Total: 224.09 722.33

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Annex 5. Detailed Tables Beneficiary Survey Results Below are the detailed impact evaluation results Table 1 Impacts of WSLIC II on water use patterns and benefits in households

IMPACTS ON WATER USE CONDITIONS AND PRACTICES WSLIC II CONTROL1 Use of improved systems in the dry season now 74% 66% Poor 68% 58% Better-of 80% 74% Shift to improved sources significant? *** Significant for poor? *** Significant for better-off? ***

2 Use of improved systems in the wet season now 77% 69% Poor 72% 62% Better-of 82% 75% Shift to improved sources significant? *** Significant for poor? *** Significant for better-off? ***

3 Use of WSLIC system in dry season now 38% NA Piped gravity 48% NA Piped pumped 29% NA Non-piped 30% NA

4 Reasons for non-use improved water supply. by season Dry Rainy Distance still too far 25% 26% Facilities broken 11% Poor water quality 9% 11% Not enough water 14% 8% Too expensive 8%

5 Access to a house connection in project and control HHS now 46% 50% Poor 36% 38% Better-of 57% 61% Shift to house connections significant? (not specific by poverty) **

6 Decrease in distance for water collection. in meters in dry season 43 14 Net reduction in collection distance significant? ** Significant for poor? ** Significant for better-off? * Most significant improvement for pumped piped systems ***

7 Amount of water used in dry season now (liters/HH/day) 268 287 Poor 239 275 Better-off 301 297 Shift towards more water use by better-off significant? NA (no baseline data)

8 Amount sufficient for all needs in both seasons now 83% 83% Poor 81% 78% Better-off 85% 88% Shift to water sufficiency for domestic needs significant? *-*** Poor ** Better-off **-***

9 Time and energy savings for other work or education now 55% 54% Poor 50% 47% Better-off 60% 62% Shift in reduction of work- and energy load significant? *** Poor ** Better-off **

* significant

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Table 2 Project impacts on access to toilets and toilet loans ACCESS TO AND FINANCING OF IMPROVED SANITATION WSLIC II CONTROL

1 Toilet ownership now 62% 70% Poor 52% 60% Better-of 74% 79% Toilet ownership for poor at start 33% 46% Toilet ownership for better off at start 59% 67% Shift in ownership of toilets significant? (Only in Batch 2) *** Significant for poor? (Only in Batch 2) * Significant for better-off? (Only in Batch 2) *

2 Toilets with low potential risk of fly-transmitted fecal disease now 92% 86% Shift to toilet models with water seal significant? (for poor only) ** Observed presence of water in gooseneck / cover on latrine hole now 84% 83% Reported functional water seal / cover over latrine hole before 53% 56%

3 Proposed action when pits get full When pit full. replace toilet 62% 63% Empty pit and bury contents 4% 3% Empty but not bury 34% 34%

4 Who benefited from WSLIC II toilet loans? 14% 1% Significant difference in access to financing for poor? (Batch 2 only) ***

Table 3 Observed toilet hygiene and reported open defecation and toilet use

TOILET HYGIENE AND USE WSLIC II CONTROL1 Observed toilets with feces/fecal stains in pan. floor etc 12% 13% Reported stains in before situation 9% 12% After-before difference significant? * Toilets observed free from fecal stains now 88% 86%

2 Toilet brush for cleaning observed present 47% 39% Toilet brush for cleaning reported present before 17% 16% Shift to toilet brush significant? *** Significant for poor *** Significant for better-off ***

3 Reported practicing of open defecation now 92% 86% Adult females now 49% 54% Adult females before 36% 44% Adult males now 48% 53% Adult males before 36% 44% School-age girls now 61% 69% School-age girls before 44% 54% School-age boys now 62% 67% School-age boys before 41% 54%

4 Significant net shift from OD to toilet use ** Adult females poor households (only in Batch 2) ** Adult males in poor households * Adult females in better-off households ** Adult males in better-off households * School age girls in poor households not significant School age boys in poor households not significant School age girls in better-off households not significant School age boys in better-off households not significant

5 Reported use of neighbor/relative's household toilet Adult females. now 11% 13% Adult females before 7% 10% Adult males now 11% 12%

Adult males before 7% 10%6 Reported use of public toilet/wash. bath and toilet facility

Adult females. now 3% 3%

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TOILET HYGIENE AND USE WSLIC II CONTROL Adult females before 2% 2% Adult males now 3% 3% Adult males before 2% 2%

7 Disposal of infant's excreta in toilet 37% 42% In open sites (garbage. gutter. river. yard. field. wasteland) 56% 51% Not applicable (no infants) 7% 7%

8 Washing child's bottom after defecation with wet cloth or tissue 8% 8% With water 25% 24%

With water and soap 57% 59%* significant Table 4 Project impacts on personal hygiene: handwashing with soap PERSONAL HYGIENE: HANDWASHING WITH SOAP WSLIC II CONTROL

1 Mothers reportedly always wash hands with soap now 18% 17% Mothers reportedly always wash hands with soap before 16% 16% Sometimes with soap now 66% 61% Sometimes with soap before 64% 60% Significant reduction in better-off mothers washing with water only * Sons significantly more washing with soap in both groups *** Daughters ditto. especially in poor households ***

2 Mothers' reported HWWS after defecation. now 78% 75% Mothers' reported HWWS after defecation before 26% 23% Mothers significantly increased reported HWWS after defecation *** Children in project HHs sign. better progress in HWWS after defecation ** Especially greater progress of girls in project HHs **

3 Mothers reported HWWS before handling food. now 59% 58% Significant better progress by poor mothers in project households * Greatest significant difference for better-off mothers in Batch 1 ** and for poor mothers in Batch 2 **

4 Presence of water and soap for handwashing Observed in or near toilets now 34% 32% Reported in or near toilets earlier (recall) 26% 27% Observed in kitchens now 41% 42% Reported in kitchens earlier (recall) 45% 45% Shift in soap in toilet significant for project HHs in Batch 2 *

5 Relationship between correct knowledge and presence of soap Significant correlation of correct knowledge of mothers on HWWS after

defecation and observed soap in toilet***

Significant correlation of correct knowledge of mothers on HWWS after cleaning children's bottoms and observed soap in toilet

*

* significant

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Table 5 Drinking water management in the home DRINKING WATER MANAGEMENT IN THE HOME WSLIC II CONTROL

1 Treatment of drinking water Drinking water seen in home reportedly boiled first 80% 73% Recall of boiling drinking water before 85% 80% Significant shift in change of water boiling habits? Not significant

2 Reported habit of school age children to drink boiled water 83% 80% Batch 1 children 76% 71% Batch 2 children 97% 97% Significant difference in change of drinking boiled water? Not significant

3 Reported practice of other safe methods to treat drinking water 11% 20% Reported practice of other safe method to treat drinking water before 5% 12% Significantly less progress in other treatment methods in project *

4 Observed separate home storage of boiled drinking water 99% 99%5 Reported reasons for water treatment Children giving health given as reason for drinking boiled water 14% 15% Children in poor households 13% 16% Children in better-off households 16% 15% Mother's reported reason for boiling is to kill bacteria 78% 77% Mother's reported reason for boiling is to make water clean 30% 30% Mother's reported reason for boiling is better taste 5% 8% Significantly less "boiling for taste" and "don't know" in project **

6 Storage methods of drinking water Observed safe type of storage of drinking water now 92% 91% Reported safe type of storage of drinking water earlier 94% 94% Significant difference in change of drinking water storage methods? Not significant Reported regular cleaning of container with boiled drinking water now 84% 81% Reported regular cleaning of container with boiled drinking water 84% 83% Reported regular cleaning of container with unboiled DW now 71% 65% Reported regular cleaning of container with unboiled DW before 71% 69% Significantly better reported storage reservoir cleaning habits *-**

7 Methods for drawing drinking water from storage vessel Drawing drinking water from storage vessel by pouring or ladle now 94% 96% Drawing drinking water from storage vessel by pouring or ladle earlier 97% 98% Significant difference in change of drinking water drawing methods? Not significant

*) Solar disinfection. chlorination. ceramic filter

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Table 6 Project impacts on hygiene promotion in villages HYGIENE PROMOTION WSLIC II CONTROL

1 Access to hygiene promotion now for anyone in HH? 66% 61% Mothers 58% 53% Fathers 24% 20% Schoolboys 10% 11% Schoolgirls 12% 11% Poor mothers in project households significantly better access * Better-off mothers in project households significantly better access *** Poor fathers in project households significantly better access *** Better-off fathers in project households no significantly better access not significant

2 Hygiene promotion methods used as reported by mothers small group lecture 34% 32% large group lecture 22% 19% individual/home counseling 15% 12% participatory methods 0.7% 0.4%

3 Satisfaction with hygiene promotion Mothers who said they were satisfied with hygiene promotion now 73% 72% Mothers who said they were satisfied with hygiene promotion earlier 60% 59% Net increase in satisfaction hygiene promotion Not significant

4 Reasons for being more satisfied now can be practiced (but in Batch 2 only 36% say so) 48% 46% is interesting 23% 21% method is good 28% 32% Sign. negative difference in experienced attractiveness of methods *

5 Improvements wanted: adjust to my needs 72% 59% more interesting methods 10% 13% more promotion materials 6% 8% more time spent on hygiene promotion 5% 9% Significantly greater need for better adjusted hygiene promotion? ***

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Table 7 Project impacts on WASH in village schools IMPROVEMENTS IN VILLAGE SCHOOLS WSLIC II CONTROL

1 Reported protected water supply in school now 87% 82% Observed protected water supply in school now *) 73% 75% Reported protected water supply in school before 62% 71%

2 Reported presence of water seal toilets in school 94% 97% Reported presence of pit latrines with slab in school 2% 0.3% Reported presence of pit latrines without slab in school 0.5% 0.3% No latrine for school children 2% 3% Significant increase in presence water-seal toilets in project village

schools ***

3 Observed presence of separate toilets for girls in school 15% 16% School-reported presence of separate toilets for girls in school before 5% 13% Significant increase in separate toilets for girls in project village schools

(Batch 1) ***

4 Facilities for handwashing Observed presence of handwashing station 80% 68% Reported presence earlier (reported by the school) 28% 54% Observed presence of soap now 20.3 11.1 Reported presence of soap before NA**) NA Significant increase in handwashing stations in village project schools? *** Significant increase in soap for handwashing in village project schools? NA

5 Satisfaction of schoolchildren aged 9-11 with school water supply Water available at all times according to boys and girls 65% 63% Students satisfied with the toilet situation in school 62% 60% School toilets can be used. but are soiled 31% 31% School toilets are often locked 8% 7% Too few latrines 3% 4% Net changes in students’ satisfaction about school toilets Not significant

7 % of menstruating girls in sample 32% 31% Menstruating girls in schools satisfied with comfort and security 88% 44% School situation for menstruating girls has improved 43% NA Significant net change in project supported schools? NA

8 Students satisfied with handwashing situation in school 60% 56% Can always wash with water and soap 8% 20% Can sometimes wash with water and soap 28% 7% Can only wash with water 27% 28% Significant net change in project supported schools? Not significant

9 No hygiene promotion given in school 1% 0% Given regularly but no promotion of good practice 26% 24% Given regularly and promotion of good practice 30% 13% Significant net change in project supported schools? Not significant

cant net change towards more participatory methods? Not significant *) Not all interviewed children went to the observed schools **) No recall data in PCC from which the school data come.

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Table 8 Project impacts on water quality in improved water sources and indicative homes IMPACTS ON WATER QUALITY AS TESTED WSLIC II CONTROL

1 % water sources meeting 9 chemical standards of DEPKES (Batch1 only)

87% 88%

2 % water sources meeting 5 physical standards of DEPKES (Batch1 only)

82% 82%

3 % water sources meeting bacteriological standards in 2010. coli forms

40%

No tests

% water sources meeting bacteriological standards in 2010. e-coli 21% % water sources meeting bacteriological standards in 2003. coli forms 47% % water sources meeting bacteriological standards in 2003. e-coli 20%

4 % Bacteriological standards met in household samples. 2010. coli forms

17% 33%

% Bacteriological standards met in household samples. 2010. e-coli 29% 46% % Bacteriological standards met under good water management in home.

coli forms 24% 45%

% Bacteriological standards met under good water management in home. coli forms

36% 46%

% Bacteriological standards met under poor water management in home. coli forms

45% 19%

% Bacteriological standards met under poor water management in home. coli forms

19% 36%

Negative significant difference between project and control households ***-* 5 Experience of household of good physical quality. rainy season. now 87% 88% Experience of household of good physical quality. rainy season. before *) 84% 86% Significant difference in progress experienced physical quality *-*** Experiences for color & taste better in better-off than poor households **

*) In dry season now good 93% vs. 74%. good before (recall) 90% vs. 93%. More significant improvements in project area

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Annex 6. Stakeholder Workshop Report and Results NA

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Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR Counterpart comments received from WSLIC II CPMU. Ministry of Health related to the project. A Borrower’s implementation report is being finalized and a draft has been shared. 1. The government has developed a MDG National Action Plan (NAP) including MDG 7c. All provinces and local governments are preparing a local MDGs Action Plan (RAD) as part of the sustainability strategy; 2. The Ministry of Health has set promotion and prevention policy as priority in the health development strategy. As reflection of the policy, fund is being channeled as Health Operational Support (BOK) through Health Centers in order to support the five prevention promotion activities, including environmental health, which is used to trigger STBM throughout the village; 3. The government has adopted CLTS as a national approach through its STBM Program (CLTS was tested in WSLIC II activities); 4. The government has adopted the WSLIC II approach / concept in a variety of similar programs. such as NICE. CWSHP. MCC, including the Ministry of Health budgeted programs related to the development of water and sanitation; 5. WSP support in providing technical assistance to the Government has been very influential to the success of WSLIC II, including the support for WSLIC II sustainability in East Java through TSSM; 6. The adoption of the WSLIC II approach is occurring both in WSLIC II and non-WSLIC II provinces and local governments like Sumenep, Sumedang, Bangka Districts; and provinces like Lampung. NTB and Riau. These governments are allocating budget for WSS activities adopting / replicating WSLIC II; 7. Increasing the capacity of NGOs in WSLIC II activities; Many NGOs who are currently engaged in WSS programs understood WSS community strengthening approaches including CLTS / STBM, which is a great support to the government in accelerating the program; 8. HWWS PPP development with the support of WSP as a form of collaboration among multi-parties in the program's sustainability.

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Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders Comments from AUSAID We have no comments on the structure of the report but have some minor editing suggestions in the documents. Overall. AusAID concur with the findings from the ICR mission. We would like to comment particularly on the aspects that were observed during the ICR mission and previous supervision missions, where AusAID’s representatives were involved. These aspects includes the outputs and outcomes relating to increased community and local institution capacity to plan, manage and sustain water programs, sanitation and community health, improved hygiene practice, provision of accessible, convenient and clean water in adequate quantity for the low income communities. In the WSLIC II locations visited during ICR and previous supervision missions, we have seen evidence of sustainable operations of the water supply facility at village level, good management of the water facilities by the village level water management unit and strong commitment from the communities to continue promoting better hygiene practice and achieve open-defecation free status. Functionality of the water systems is high and pro-poor targeting is effective with poor households benefit most from program. Emergence of associations or cooperatives with support from district governments indicated that the water management units are evolving to address increased demand for water supply service which is a good sign of sustainability. Project stakeholders demonstrated understanding of the mechanism and there is good collaboration between project stakeholders at different levels. In most locations visited, there is strong leadership from district health agencies to continue the effort to accelerate and achieve health quality objectives after the project finishes. More broadly on the program itself, we would like to note that the collaboration between the World Bank, Australia and the Government of Indonesia in the implementation of WSLIC II has been effective. Each part has taken up their respective role effectively and there has been good communication between the Bank and AusAID in the implementation of the program. Project management unit at both central and sub-national levels are responsive in dealing with problems and issues that hinder the achievement of project objectives. An area that we would like to suggest for consideration going forward is for the Government of Indonesia to invest in making the effort in sharing the lessons learned and experience gained from WSLIC II implementation to the water and sanitation stakeholders in Indonesia. The lesson learned for example about successful CLTS implementation and sustainability of water management unit at village level are important aspects that are worth to share and could help to

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improve effectiveness of other community-based water and sanitation program either funded by Government of Indonesia or by other donors. WSLIC II now have abundant data collected from the post-construction survey and impact studies. It would be useful if findings of the impact studies can be presented in a much concise format, using simple language that is accessible to the broader stakeholders/general public that have interest in water and sanitation issues.

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Annex 9. List of Supporting Documents Country Assistance Strategy Government of Indonesia. Ministry of Health. Directorate General for Communicable Disease Control and Environmental Health (2005) Mid Term Review of the Second Water and Sanitation for Low Income Communities – Final Report (SAGRIC International: Jakarta) Secretariat PEL –BAPPENAS Economic Impact Analysis Study – Final Report Kar. K. And Bongartz. P. (2006) Update on Some Recent Developments in Community-Led Total Sanitation (Institute for Development Studies: Brighton. Sussex) The World Bank (2000) Development Credit Agreement for Second Water and Sanitation for Low Income Communities Project between Republic of Indonesia and International Development Association: Credit Number 3382 IND. dated June 22. 2000 The World Bank (2000) Implementation Completion Report on a Loan in the Amount of US$80 million to the Republic of Indonesia for the Water Supply and Sanitation for Low Income Communities Project The World Bank (2000) Project Appraisal Document on a Proposed IDA Credit in the Amount of SDR 57.8 Million (US$77.4 Million equivalent) to the Republic of Indonesia for the Second for the Water Supply and Sanitation for Low Income Communities Project Sijbesma. C. (2010) Impact Evaluation of Water Supply and Sanitation for Low Income Communities Project: End of assignment Report. IRC International Water and Sanitation Centre: The Hague SurveyMETER (2010) WSLIC II: Post-implementation Household Survey and Impact Asssessment in West Sumatera. South Sumatera. East Java. West Java. West Sulawesi. South Sulawesi and West NusaTenggara (Jakarta October 31. 2010) Sijbesma. C.. Sikoki. B.. Suriastini. W.. and Ponsonby. M.. (2011) The Future of Water. Sanitation and Hygiene: Innovation. Adaptation and Engagement in a Changing World: Methodological lessons and findings from an impact evaluation of a WASH project in Indonesia” Presented at the 35th WEDC International Conference. Loughborough. UK. 2011

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MAP No. 33420R2

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GU

INEA

A U S T R A L I AA U S T R A L I A

THAILANDTHAILAND

MYANMARMYANMAR

19

21

22

26

29

20

23

25

24

2827

30

32

31

33

12

11

13

1415

8

67

3

54

2

1

16

17 18

10

9

Balikpapan

Parepare

Baubau

Tarakan

Raba

Ende

Waingapu

Pematangsiantar

Sorong

Merauke

Timika

FakfakAmahai

Palu

Ambon

Gorontalo

Jambi

Medan

Kupang

Padang

Manado

Mataram

Bandung

Kendari

Denpasar

Surabaya

Semarang

Bengkulu

Jayapura

Palembang

SamarindaPontianak

Pekanbaru

Yogyakarta

Banda Aceh

Bandjarmasin

PalangkarayaPangkalpinang

Makassar

Ternate

Bandar Lampung

Serang

Manokwari

Mamuju

Tanjungpinang

JAKARTA

PAPU

AN

EW G

UIN

EA

A U S T R A L I A

SINGAPORE

VIETNAM

THAILAND

MYANMAR

TIMOR-LESTE

BRUNEI

PHILIPPINES

MA L A Y

SI

A

CelebesSea

Java Sea BandaSea

Arafura Sea

SuluSea

PACIFIC OCEAN

I N D I A N O C E A N

PAPUA

AruIs.

KaiIs.

TanimbarIs.

Halmahera

Biak

Yapen

Morotai

Misool

Waigeo

Peleng Obi

Muna

Ceram

Buru

SULAWESI Sula Is.

Timor

FloresAlor

WetarMoa

Babar

Sumba

SumbawaLombokJAWA

NatunaBesar

Belitung

Madura

SUMATERABangka

Lingga

Nias

Siberut

Enggano

Simeulue

TalaudIs.

Bali

KALIMANTAN

Men t a w

a i I s .

Puncak Jaya(5030 m)

0°

5°

5°

10°

10°

15°

0°

5°

10°

15°

15°

10°

95° 100° 105°

115° 120° 125°

95° 100° 105° 110° 115° 120° 125°

130° 135° 140°

135° 140°

INDONESIA

NANGGROE ACEH DARUSSALAMSUMATERA UTARARIAUSUMATERA BARATJAMBIBENGKULUSUMATERA SELATANLAMPUNGBANGKA-BELITUNGBANTEND.K.I. JAKARTA

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1011

PROVINCES:

1213141516171819202122

JAWA BARATJAWA TENGAHD.I. YOGYAKARTAJAWA TIMURBALINUSA TENGGARA BARATNUSA TENGGARA TIMURRIAU KEPULAUANKALIMANTAN BARATKALIMANTAN TENGAHKALIMANTAN SELATAN

KALIMANTAN TIMURSULAWESI UTARAGORONTALOSULAWESI TENGAHSULAWESI BARATSULAWESI SELATANSULAWESI TENGGARAMALUKU UTARAMALUKUPAPUA BARATPAPUA

2324252627282930313233

0 200

0 100 200 300 400 Miles

400 Kilometers

IBRD 33420R2

AU

GU

ST 2008

INDONESIASELECTED CITIES AND TOWNS

PROVINCE CAPITALS

NATIONAL CAPITAL

RIVERS

MAIN ROADS

RAILROADS

PROVINCE BOUNDARIES

INTERNATIONAL BOUNDARIES

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endo r s emen t o r a c c e p t a n c e o f s u c h boundaries.