Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 15166

PROJECT COMPLETION REPORT

REPUBLIC OF SENEGAL

PUBLIC WORKS AND EMPLOYMENT PROJECT (AGETIP)(Cr. 2075-SE)

DECEMBER 7, 1995

Infrastructure Operations DivisionWestern Africa DepartmentAfrica Region

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

Currency Unit: CFA Franc (CFAF)US$1.00 = CFAF 316 (1989)US$ 1.00 = CFAF 5 10 (1994)

WEIGHTS AND MEASURES

Metric System

FISCAL YEAR

July I - June 30

ABBREVIATIONS AND ACRONYMS

AfDB African Development BankAFRICATIPE African Union of Public Works and Employment Executing AgenciesAGETIP Agence d'Execution de Travaux d'lnteret Public contre le Sous-Emploi

(Public Works and Employment Executing Agency)CIDA Canadian International Development AgencyCFD Caisse Fran,aise de Developpement

(French Development Fund)DCA Development Credit AgreementEC European CommunityERR Economic Rate of ReturnMOD Maitrise d'Ouvrage Delegu6e

(Delegated Contract Management)NGO Non Governmental OrganizationPPF Project Preparation FacilitySAL Structural Adjustment LoanSDR Special Drawing RightsSIF Social Infrastructure FundSME Small and Medium-sized EnterprisesWFP World Food Program

FOR OFFICIAL USE ONLYThe World Bank

Washington, D C 20433iU SA

Office of the Director-GeneralOperations Evaluation December 7, 1995

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report on Senegal-Public Works and Employment Project (Credit 2075-SE)

Attached is the Project Completion Report (PCR) for the Senegal Public Works and EmploymentProject (AGETIP; Credit 2075-SE, approved in FY90. in the amounLt of lJS$20 million) prepared by theAfrica Regional Office. The PCR includes Part 11. prepared by the Borrower.

The main objectives of the AGETIP project, according to the Staff Appi .isal Report (SAR).were: (a) to create substanltial new emplovment in urbani areas as rapidly as possible; (b) to improve.through the execution of works financed by the project. the individUal skills of workers and thecompetitiveness of firms engaged; (c) to demonstrate the feasibility of labor-intensive ptublic projectsand test new procedures to bid out small public works projects; arid (d) to produce results that areeconomically and socially useful. These objectives were to be achieved under the following conditions:(a) avoiding the need for increased civil service staff: (b) combining low cost and highi visibility; (c)supporting but not displacing other developmenit programs: and (d) using transparent yet expeditiousprocedures for subproject bidding. appraisal, contractinig anid disbursements.

Project objectives were achieved, withouLt increasinig the size of the civil service, at low cost andwith high visibility of results. Employmenit created was 8,718 person-years in contrast with 7,000person-years at appraisal. Subprojects ulidertakenii i urban areas, especially in Dakar and its environis.included constructioni of schools arid clinics. roadworks. canal drainage, and other environmenitalprojects. The economic rate of retuLrn for subprojects ranged between 9.9% (for environmenital projects)to 37.4% (for urban roadworks). The project had a very positive impact on the construction sector; onlocal skills; on the environimenlt arid on social services (health and education). The project design wasinnovative and the preparatory work relatinig to procedures for subcontracting and procurement werecritical to the project results. As a result of the encouraginig results of the project. a follow-Lip project(AGETIP 11), approved in FY92-, extended the coverage to new activiti-s arid areas withiln the country.The second project stressed that only commintiities that uLidertook mainteniance of their completed workswould be considered for future works. Moreover, the AGETIP coiicept has been applied in several othercoLintries (e.g.. Mali, Buirkinia Faso, The Gambia and Madagascar).

The outcome of the project is rated as highly satisfactory. The institutionial developmenit impactis rated as riiodest, since it is still confined to a simall segmnent of goverinment procedUres. Thesurstainability of the pro ject is rated as likely. The PCR is of higil quality.

A major lesson of this project is that proccdires for bidding,contiactinig and disbursinig striallpublic works projects can be made simpler and more tlexible thani those for larger projects withi goodresults. Moreover, the project's conicept arid approach have good replicability for other countries.

An audit is planined, togethier with AG[ T P 1i

Attachment

This document has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not otherwise be disclosed without World Bank authorization.

FOR OFFICIAL USE ONLY

REPUBLIC OF SENEGALPUBLIC WORKS AND EMPLOYMENT PROJECT (AGETIP)

(Cr. 2075-SE)PROJECT COMPLETION REPORT

Table of Contents

Preface. .................................................................Evaluation Summary .............................................................................. iii

PART I: PROJECT REVIEW FROM IDA'S PERSPECTIVE .................................... IA. Project Identity ................................................................. IB. Background ................................................................ 1C. Project Objectives ................................................................ 2D. Project Design and Organization ....................... .......................................... 2E. Project limplementation ................................................................ 4F. Project Results ................................................................. 5G. Project Sustainability ................................................................. 8H. IDA's Performance ................................................................ 91. Borrower's Performance ................................................................ 10J. Project Relationship ................................................................ IIK. Consulting Services .. 1......................................................... 11L. Project Documentation and Data ................................................................ 11

PART II: PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE ........ 12A. Lessons Learned ................................................................ 12B. Bank's Performance ................................................................ 13C. Government's Performan ce ................................................................ 14D. Project Relationship ................................................................ 14

PART III: STATISTICAL INFORMATION ................................................................ 16A. Related Bank Loans and Credits ................................................................ 16B. Project Timetable ................................................................ 17C. Credit Data ................................................................ 17D. Project Costs and Finanicing ................................................................ 1 8E. Project Implementation ................................................................ 19F. Project Results ................................................................ 19G. Compliance with DCA Covenants ................................................................ 25H. Use of IDA Resources ............ ....................................... . ........... 26

This document has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not otherwise be disclosed wiLhout World Bank authorization.

i

PROJECT COMPLETION REPORT

REPUBLIC OF SENEGAL

PUBLIC WORKS AND EMPLOYMENT PROJECT (AGETIP)(Cr. 2075-SE)

PREFACE

This is the Project Completion Report (PCR) for the Public Works and EmploymentProject (AGETIP) in the Republic of Senegal, for which Credit 2075-SE in the amount of SDR16.1 million was approved on December 14, 1989. The credit was closed on September 30,1993, 11 months behind schedule. The balance of SDR 10,853.85 was canceled as of March 8.1994.

The PCR was jointly prepared by the Infrastructure Operations Division of the WesternAfrica Department of the Africa Region (Preface, Evaluation Summary, Parts I and III), and theBorrower (Part II). Due to its length, only a portion of the Borrower's contribution has beenincluded as Part II. The report in its entirety is included as an annex.

Preparation of this PCR was started during the Bank's final supervision mission of theProject in May 1994 and is based, inter alia, on the Staff Appraisal Report. the DevelopmentCredit Agreement; supervision reports; correspondence between the Bank and the Borrower; andinternal Bank memoranda.

Jii

PROJECT COMPLETION REPORT

REPUBLIC OF SENEGAL

PUBLIC WORKS AND EMPLOYMENT PROJECT (AGETIP)(Cr. 2075-SE)

EVALUATION SUMMARY

1. Objectives. The project aimed to create 13,400 new temporary jobs (at an average costof US$2,100 in 1989 dollars or about 7,000 person-years of employmilent) in urban areas asrapidly as possible, to improve the skills of workers employed through public w4orks financed bythe project, to improve firms' capabilities and ability to offer sustained employment followhigthe project, to demonstrate the feasibility of labor-intensive projects and to test procedures thatwould enable the public sector to commission such projects, and to undertake economically andsocially useful public works subprojects. These objectives were to be fulfilled, moreover,without increasing the civil service, at the lowest possible cost and with high visibility. Effortsunder the project were to support rather than replace other development programs. Proceduresfor subproject bidding, appraisal. contracting, disbursements were to be expeditious and open toscrutiny. Quantitative objectives used to determine and justify project costs were arrived at bysurveying the local construction industry to determine the capacity of small firms and theirtraining needs. The project further ained to acheive a labor ratio (salaries as a percentage ol'thetotal cost of the subproject) of greater than 20%. a turn-around time for payables of less thani tendays, and a procurement process that required less than three months (Part 1, section C; Part Ill,section F- I).

2. Implementation Experience. This project is considered highly satisfactory in that itexceeded all its major objectives and achieved substantial development results. The project wasparticularly innovative in that the executing agency. private and not-for-profit, was managed by ageneral assembly drawn mostly from the private sector. Thle agency was also exempted frompublic sector salary schedules and procurement and disbursement procedures, which fieed itfrom government administrative control and allowed for more efficient manageimient. Finally theproject chose public works tasks that required a large work force, providing at least temporaryemployment opportunities and subsistence wages for unskilled workers. This project, therefore.temporarily alleviated some social distress caused first by structural adjustment (Part 1, para. 8)and later by the January 1994 devaluation of the CFA franc. The executing agency, AGETIP(Agence d'Execution de Travaux d'lnteret Public contre le Sous-Emploi), adhered closely to aprocedures manual drafted by the Borrower throughout the project (Part 1, para. 11). Duriigimplementation, however, the goverinment deposited its counterpart funds more slowly thanplanned, which resulted in an I l-month delay in project closing (Part 1, paras. 13. 3 1(c).Although the project fulfilled the government's objectives of creating immediate, short-termemployment, its activities may have had a displacement effect on the Credit Communalcomponent of the Municipal and Housing Development Project (Cr. 1884-SE), already underimplementation. In particular, the Credit Communal was to on-lend to support revenue-earniniglocal projects such as markets, which were different from the non-incoine producing projects

iv

financed under this project (Part 1, paras.14, 32). However, this should be discounted because inCote d' Ivoire, the local Credit Communal (FPCL) was also not entirely successful due to overallcountry fiscal situation, the negative resource transfer to the local governments, in spite of theinexistence of an Agetip-type organization.

3. Results. The project met its objectives and is judged highly satisfactory. Under theproject 416 subprojects were completed arid a total of 8,713 person-years of employment werecreated in urban areas. The average wage earned by workers in the project has been of CFAF38,724 which represents, for one month of employment, over 33 percent of average per capitaincome in Senegal estimated at CFAF 90,500. An on-site training program successfullyimproved the skills of project workers and the capacity of firms carrying out works under theproject (Part 1, paras. 20-2 1). The project demonstrated the feasibility of using transparent,streamlined procurement and management procedures to execute small public works quickly.The average turnaround time for payables was three days, the procurement process took 1.2months (as compared with six months the average turn-around for public works procurement).The project's procurement procedures also allowed local construction firms to bid for andreceive government contracts, which stimulated the local construction industry. Convinced ofAGETIP's efficacy, the government has expressed its desire to "AGETIP-ize" other activities(Part 1, para. 24). The subprojects undertaken were also economically and socially useful (Part 1,paras. 17-18), and had a net positive impact on the environment (Part I, para. 22). A studycarried out jointly by the Massachusetts Institute of Technology and IDA concluded thatdelegating responsibility for providing social services to the communities that use these servicescontributes to more efficient infrastructure provision, and has a higher chance of creating servicedelivery systems that work. This method, in fact, has brought about a statistically significantimprovement in the efficiency and effectiveness of publicly funded infrastructure projects (PartI, para. 26 and Part 111, section F).

4. Sustainability. With proper maintenance, works executed under the project should have alife span of 30 years or more. The question of their beinig properly maintained is problematic,however. The Second Public Works and Employment Project (Cr. 2369-SE), approved in May1992, contains a community participation component which is designed to disseminateinformation about the importance of maintaining completed public works. Beneficiaries who donot maintain works already executed on their behalf will not be considered for works in thefuture. Contractors and consultants whose technical and managerial capacity was increasedunder the project will also have a better chance of maintaining their businesses. AGETIP, thecurrent executing agency for the Second Public Employment Project, will also be executor forthe Community Nutrition Project (Cr. 2723-SE approved in May 1995). It is also executingother IDA-financed works under the Agricultural Research Project (Cr. 2107-SE), the SecondHuman Resources Development Project (Cr. 2473-SE), and the Municipal Housing andDevelopment Project (Cr. 1884-SE). As a private not-for-profit entity, AGETIP can opt tocontinue as an NGO, to be converted into a for-profit organization, or to split into smaller,competing AGETIPs in the future (Part 1, para. 28).

5. Findings and lessons learned The Second Public Works and Employment projectclosely resembles the first, successful project. It does include, however, such innovations as aprogram of pilot activities to test AGETIP procedures in the development and management ofmunicipal revenue-earning infrastructure and AGETIP-type mechanisms to support ruralinvestments. From the first project, it also became clear that social sector subprojects should be

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located on the basis of numerical indicators (such as population, number of current and potentialusers of social infrastructures, tax collection efficiency, etc.). The procedures manual indicateshow to use these indicators to rank subprojects by their need. An innovation in procurement wasthe introduction of a post-qualification bid which takes into account the remaining capacity incontract award in the evaluation of contractors' bids. It also provided explanations for bids 15 ormore percent lower than the reference price. These changes are now reflected in AGETIP'supdated procedures manual. Regarding the disbursement of counterpart funding, experience hasshown the government to be slow in disbursing these funds. A covenant requiring the deposit ofcounterpart funds before review of subproject batches was therefore included in theDevelopment Credit Agreement for the Second Public Works Project. It was also decided todesign the training for contractors under the PPF so that under the second project training wouldbe available as soon as the credit became effective. Building on lessons learned in the firstproject, the second project also includes a program to increase communiity participation in publicworks maintenance and the consideration of environmental impact in determining the eligibilityof subprojects. Another eligibility criterion was therefore added to AGETIP's proceduresmanual to the effect that subprojects that might have a negative impact on the environmelitwould not be considered for execution (Part 1. para. 31 (a)-(f)).

6. In addition, the project demonstrated the effectiveness of usilig a staged approach--starting small to test innovative project designs, adjusting project design to respond tounexpected problems, and only then expanding the project to cover a wider area or population.The staged approach allows for flexibility in the project design without large-scale disruptions inpublic works implementation. The project also showed how important it is to coordinate projectefforts with those already under way so that development projects do not compete with oneanother to the detriment of one of them (Part 1, para.32).

7. The Borrower learned that strong, centralized coordination is needed to avoidmisunderstandings among various actors in the public works sector and within the project. Adetailed annual work program and a procedures manual are therefore both indispensable forproject success. Using these tools, a motivated team can implement a project effectively andtransparently. A reliable computerized management system, furthermore, makes regularstandardized reporting available to all parties and greatly facilitates project supervision. Finally,delegated contract management is a powerful tool for ensuring the efficient and transparentexecution of small-scale public works (Part 1, para. 36).

REPUBLIC OF SENEGAL

PUBLIC WORKS AND EMPLOYMENT PROJECT (AGETIP)(Cr. 2075-SE)

PROJECT COMPLETION REPORT

PART 1: PROJECT REVIEW FROM1 IDA'S PERSPECTIVE

A. PROJECT IDENTITY

Project Name: Public Works and Employmiienit Project (AGETII')Credit No.: 2075-SECredit Amount: SDR 16.1 million (US$20 million equivalenit)RVP Unit Africa RegioniCountry: Republic of SenegalSector: UrbaniSubsector: Public Works

B. Background

8. When the project was identified in 1988, Senegal had been in the process of adjulstjg iseconomy for over six years, with a fourth Structural Adjustment Loan (SAL IV) uLiderpreparation. Unemployment was a very serious problem, particularly in Dakar. The situatiollwas being aggravated by a number of factors related to the SALs, such as a reduction in the civilservice and the streamlining of public enterprises. Two other trends were adversely affecting jobseekers: (a) the age structure of the population was such that 100,000 new entranits ilnto the jobmarket were appearing each year, anid (b) a similar number of migrants. driven out of rural areasby adverse climatic conditions and inadequate incomes, were arriving in Dakar each year to seekemployment.

9. Until the investmenit environment improved allowinig new investments to generatcadditional jobs, the unemployment problem, which public opinion considered an adverse elfectof adjustnent, was threatening the government's ability to sustain the process. In ordel toalleviate the social stress, the government was eager to complement its adjustmenit programi *withlabor-intensive public works projects which would have an immediate impact on employ-mentand would also contribute to Dakar's and other cities' efficiency and attractiveness for investors.The rationale behind such a program was that its results, althougIl perhaps temporary. Wouldoffset the increasing short-term unemployment problem and ease the transitioni to moresustainable employment creation. In addition, the project would extend the objectix es of themunicipal component of the Municipal and Housing Development Project (Cr. 1 884-SE), whichbecame effective in late 1988. It was in this context that the first Public Works and ERmploymlielitProject was conceived.

C. PROJECT OBJECTIVES

10. The objectives of the project were: (a) to create, at least temporarily, substantial newemployment in urban areas as rapidly as possible: (b) to improve, through execution of the woksfinanced by the project, the individual skills of the workers who would be employed, and thecorporate competitiveness of the firms which carried out works so as to develop their capacity torespond to increased opportunities for sustained employment after project completion; (c) todemonstrate the feasibility of labor-intensive projects and test the procedures that would enablethe public sector to commission such projects; and (d) to undertake sub-projects that wereeconomically and socially useful. In fulfilling these objectives, the following conditions were tobe fulfilled: (a) avoiding the need to increase the civil service; (b) combininig low cost and highvisibility; (c) supporting, but not replacing, other development programs; and (d) usingtransparent but expeditious and flexible procedures for sub-project bidding, appraisal,contracting and disbursements.

11. To achieve the above objectives, the project had three components: (a) a program ofpublic facility and infrastructure rehabilitation and maintenance in urban areas, to be carried outunder labor-intensive schemes by local contractors: (b) a package of services related to workorganization, management, and labor force training. offered on a voluntary basis to localcontractors awarded contracts under component (a); and (c) a supervision and monitoringcomponent in order to monitor closely the progress of the project and to prepare the transitiontoward locally supported employment of the target group.

12. The quantitative objectives used to determine the costs and justify the project werearrived at by surveying the local construction industry to determine the capacity of small firmsand their training needs. Other objectives included the creation of 13,400 new temporary jobs atan average cost of US$2,100 (1989 dollars) or about 7,000 person-years of temporaryemployment; a labor ratio (amount paid in salaries as a percentage of the total cost of the sub-project) of greater than 20%; a turnaround time for payables of less than ten days; and an entireprocurement process time of less than three months.

D. PROJECT DESIGN AND ORGANIZATION

13. The project's conceptual foundation was clear and was based on "delegated contractmanagement" (maitrise d'ouvrage deleguee). The purpose behind this was to remove thegovernment from project execution, while still maintaining its involvement in project planningand budgeting. The project worked as follows. Potential beneficiaries submitted proposals forsub-projects to the executing agency, AGETIP (Agence d'Execution de Travaux dI'nteret Publiccontre le Sous-Emnploi) which would determine the sub-project's eligibility for execution basedon precise criteria outlined in its procedures manual. If the sub-project was declared eligible,AGETIP would appraise it, and would enter into an agreement, known as a convention demaitrise d'ouvrage delguee, with the beneficiary, whereby the beneficiary transferred allpowers, rights and obligations pertaining to the execution of the sub-project to AGETIP for theduration of its execution. AGETIP carried out all the bidding procedures and awarded contractsfor the engineering and execution of the sub-projects. It supervised the works periodically, paidthe consulting engineers and contractors, and attended the handing-over of the works uponcompletion. AGETIP's roles and responsibilities throughout the entire process were finely

3

detailed in its procedures manual to which it adhered closely during project execution. Itsfunctions were clearly understood by all actors because AGETIP offered seminars to explain itsmandate and procedures to all the bidders it qualified.

14. The project was well prepared. After the Borrower prepared the procedures manual, theproject's concepts were tested by executing five pilot sub-projects financed under funds madeavailable by the Project Preparation Facility (PPF). At each stage, adjustments were made tocorrect problems before proceeding to the next. One lessons learned is that this staged approachensured that the project's design was tight prior to full-fledged implementation, and helpedensure its success (Part I, para. 32). Project preparation went smoothly with only one caveat.The consultant hired by the government to generate a list of eligible sub-projects for financingmade a wish list reflecting the desires of Non Governmental Organizations (NGOs) who wereled to believe that their proposed sub-projects would be financed automatically. When projectexecution commenced, they refused to accept the rigorous requirements to which they weresubject in order to obtain financing. This misunderstanding had repercussions on therelationship between AGETIP and the NGOs over the first three years, and it is only recently thatthe situation has improved (also see Part I, para. 38).

15. This project challenged some basic assumptions regarding the role of government andpublic services. Traditionally, the government's role was producing public services; this projectshowed that the government could successfully provide the same services by contracting themout to the private sector. The project was innovative in many respects. First of all, the creationof an executing agency, with a private legal status similar to that of an NGO, freed the projectfrom government controls which could have impeded its efficiency. The agency had its ownstatutes and by-laws, and was managed by a general assembly whose members were drawn fromthe private sector. Secondly, AGETIP was granted exemptions from government salaryschedules, and procurement and disbursement procedures. This enabled AGETIP to employ themore efficient procurement and disbursement procedures spelled out in its procedures manual,and to attract top-level professionals to staff the agency, both of which were absolutely crucial tothe project's successful implementation. Finally, highly labor-intensive sub-projects wereexecuted in order to provide employment opportunities and subsistence to unskilled workers,temporarily alleviating some of the social tension caused by the structural adjustment program.

16. The project's timing was appropriate. With the unemployment problem growing everworse, a project focusing on creating employment, especially among the most disadvantagedpopulations, was crucial to maintaining political and economic stability. The scope and scale ofthe project are also deemed appropriate. The public living in urban areas perceived theunemployment situation as critical, so targeting urban areas for an employment-generatingproject was logical. Through regular garbage collection, the clearing of drainage canals,rehabilitation of health centers and public sanitary centers (blocs sanitaires) and street-paving,the overall attractiveness of Dakar and other urban centers was nicely enhanced. With thesuccessful implementation of the first Public Works Project, the Second Public Works andEmployment Project (Cr. 2369-SE), approved in May 1992, has expanded the operation toinclude rural interventions.

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E. PROJECT IMPLEMENTATION

17. The project was declared effective on March 6, 1990 less than three months after Boardpresentationi. At first, it was limited in scope to urban areas and their outskirts. A phasedapproach was employed whereby iilplemenitation began with the primary cities and expanded tosecondary cities after the first year. The wait was prompted by the desire to be able to assess theproject's success and impact before movinig on. This process allowed AGETIP to determinewhat management components were effective and make modifications to ensure that theremainider of the sub-projects would be properly implemenited.

18. Project implementationi was greatly aided by close adherence to a procedures manualw hich contained procedures for: beneficiaries' submission of projects to AGETIP; preselectingand classifying consulting engineers and contractors: awarding contracts for goods and services,monlitoring and supervisilg works, disbursements: maniagilig the Agency's fulids; and reportingthe Agency's activities. Contract awarding and sub-project execution wele performed on atilmely basis. The entire procuremenit process took 1.2 months. When a sample was taken andanalyzed, the result demonistrated that 90% of the contracts were performed within the specifiedtime frames. Delavs were frequently due to the need for additional work or to a delay in thesupply of materials relating to exemption certificates.

19. Part 111, section E shows a number of indicators of how project implementationproceeded. It shows that the number of enterprises prequalified had risen from 356 ateffectiveness to a total of 1,030. and the number of consultinig engineers prequalified had risenfrom 85 at effectiveness to a total of 292. The number of sub-projects completed by November30. 1993 stood at 416. The iiumiber of man-days of employment created was over 1.9 million.The labor ratio, representing the total spent in salaries per sub-project divided by the overall totalcost of the sub-project, averaged out at 25.23%. This compares favorably with the SAR'sprediction of greater than 20%.

20. One critical variance between planied and actual implementation centered on thepayment of counterpart funds. The government deposited its counterpart funds much moreslowly than planned. IDA and AGETIP met with government officials on several occasions inorder to coordinate the deposit of these funds, but project execution was delayed by 11 monthsmainly due to this factor. This variance may have been avoided if the Development CreditAgreement (DCA) had included a covenant whereby IDA could retain the right to reftise toreview a new batch of sub-projects if counterpart funding was not up to date. This type ofcovenanit was included In the Second Project (Part 1, para. 31 (c)).

2I. Finally, the Public Works and Employment may have had a negative impact oil theexecution of the Municipal and Housing Development Project (MHDP), which provided creditthrough a Municipal Credit Fund for financing municipal income generating projects such asmarket rehabilitationi and constrLIction, on commercial terms, with an interest rate of 10.5%.Under the Public Works and Employment Project, on the other hand, beneficiaries were notrequiested to reimburse the cost of the social infrastructure works executed on their behalf. Thismay put the Public Works and Employment Project In iidirect competition with the Municipaland Housilig Developmelit Project. Naturally, the beneficiaries went to AGETIP which providedthe works free of charge rather than go to the Municipal and Housing Development Projectwlhere they had to borrow althougil for different purposes (social infrastructure verstis economic

j

infrastructure). The result is that the Municipal Credit Fund component of the Municipal andHousing Development Project has been disbursing much more slowly than foreseen at appraisal.Therefore, in the future, careful consideration of how proposed projects would effect ongoingones is warranted. This is particularly important considering that one of the conditions wlhiciwere to be fulfilled in pursuit of the project's objectives was that the Public Works andEmployment Project should support, not replace, other development programs (Part 1, para. 32).However, there has been a difference of opinion among tasks managers. The two projects weredealing with different objectives. AGETIP deals with social infrastructure that are noni-inicomegenerating while MHDP finances income generating projects. It is argued that the mayors.instead of going to the Credit Communal for financinig income generatinlg projects, preferied togo to AGETIP to obtain grants for social infrastructure. Although such correlationi is very hardto establish, the fact remains that the mixed disbursement record of MHDP calls into questionthe relationsihip of granlt financing versus loan financinig in the global urban setting. Projectsunder preparation will merge the "urban" and the "public works" approach under the fourtlurban project in Senegal, and in other Sahelian countries. AGETIP and the Association ofMayors have been collaborating with the Government in the planniniig of that project. However.considering the highly positive impact that AGETIP in Mali had onl the Second Urban Project inthat country, it is not possible to generalize and draw negative inferences on imipact of AGETIPprojects on urban projects. In addition, in the case of Cote d' Ivoire, the local Credit Commulial(FPCL) was also not entirely successful due to overall country fiscal situation, the negativeresource transfer to the local governments, in spite of the inexistence of an Agetip-typeorganization.

22. The project risks identified during appraisal arose from the possible inability of thegovernment to create stable jobs during project implementation, resulting in an extension of theproject beyond its initial period, a transfer of employment to the public sector, jeopardizingalready implemented public sector reforms; an loss of control of funds. Through the SecondProject, the network of contractors will be utilized, thus suppressing the risk of transferriigemployment to the public sector, at least temporarily. The loss of control of fulids wasminimized through close ex post monitoring throughiout implementation and a carefully thoLIgilt-out implementation plan.

F. Project Results

23. The project's results are considered highly satisfactory. As can be seen in Part Ill,section F-1, the project completed 416 sub-projects, with 74,928 temporary person-months ofnew jobs created. A total of 8,713 person-years of employment were created versus the 7,000estimated at appraisal. The average turnaround time for payables was three days. and the entireprocurement process took only 1.2 months. Some permanent employment was also created. Theaverage wage earned by workers in the project has been of CFAF 38,724 which represents, forone month of employment, over 33 percent of average per capita income in Senegal estimated atCFAF 90,500. A survey of 50 consulting firms and small contractors showed that they wereable to hire 1.3 more workers for a total of approximately 285 permanentjobs. The projectstraining program improved the skills of individuals and the capacity of the local constructioncontractors who executed sub-project. The feasibility of labor-intensive works was amplydemonstrated as were the procedures enabling the public sector to commission such projects.

6

The sub-projects undertaken were economically and socially useful as seen in the followiig twoparagraphs.

24. In terms of physical achievements, the project contributed to the renovation of221,820m2 and to the construction of 101,300m of simple buildings including schools anddispensaries, to the rehabilitation of 133km of urban roads and the paving of 523,500m2 of roads,to the rehabilitation of 65,000m of sidewalks, to the demolition of 15,000m2 of old buildings, tothe cleaning of 37,200 linear meters of drainage canals and the clearing of 122,000m2 of bushes,to the collection of 7,700m3 of sand, and to the filling of 18,000m3 of embankments.

25. The economic rate of return (ERR) was calculated for a sample of subprojectsrepresenting each category of works (sanitation, urban road work, development of green areas,building construction, sidewalk stabilization and storm drain clearing). The results show ERRsranging from a minimum of 9.9% for the development of green areas to a maximum of 37.39%for urban road works. More details are given in Part 111, section F-3.

26. The project had a strong impact on the growth of the building and constructionindustry. The project disbursed a total of almost CFAF 11 billion or US$43.9 million throughcontracts with Senegal's small and medium-sized enterprises (SMEs). As the bulk of the sub-projects (376 or 90%) were executed through contracts of less than CFAF 50 million(US$200,000), a large number of SMEs were able to participate in the project. The simplifiedbidding process also allowed them to access government-financed contracts, some for the firsttime, thus meeting the objective of breaking down barriers to markets. AGETIP's rapidturnaround time for payables (average three days) allowed the SMEs to flourish, since they nolonger needed a large amount of capital to be able to pay for supplies and pay their workersbefore receiving the transfer of funds themselves. AGETIP promoted and encouraged thecreation of 93 SMEs by guaranteeing half of their sales volume for small businesses and 75% formicro-enterprises. The proliferation of SMEs over the course of the project is indicated by thenumber of contractors prequalified by AGETIP: 356 at project effectiveness versus the 1,030prequalified at closing.

27. The project had a positive impact on human resource development. The trainingprovided to those consulting firms and contractors having been awarded contracts over thecourse of project execution contributed to human resource development by increasing theirtechnical and managerial capacity, thereby ensuring their survival. Courses offered included abusiness administration and financial management program for entrepreneurs and theiradministrative staff, as well as work organization programs for foremen, and technical training toimprove the basic skills of laborers. Ample evidence demonstrates their increased capacity. Atthe beginning of the project, 50% of the SMEs registered with AGETIP were classified ascategory "A", the smallest ones; by closing, that percentage had been reduced to 30%, with acorresponding increase in the percentage of category "B" and "C" enterprises. Another indicatoris that some SMEs were able to hook up with category "D" enterprises (the largest ones) toparticipate in joint venture international bidding. AGETIP also may be credited with havingestablished a network among contractors and consultants.

7

28. The business community very much appreciated the training courses as indicated bytheir attendance. As of May 3 1, 1994', 1,209 participants had benefited from the trainingprogram, including 102 for work organization; 853 for management; 239 for labor improvement;and 15 for training of trainers. The success of the program is also indicated by the increasedquality of the work being performed on job sites and by shorter project execution periods. Theonly shortcoming was that the training was not immediately available upon effectiveness. Thiswas rectified under the Second Project (Part 1, para. 31 (d)).

29. A study conducted in 1992 pointed out that the project responded to environmentalconcerns in three areas: (i) the clearing of ditches and drainage canals responded to the need forimmediate cleanliness in urban areas; (ii) the construction and rehabilitation of public health andeducational centers responded to the need for a healthier and better educated populace; and (iii)the improvements made to community infrastructures and tourist attractions improved thegeneral quality of life of urban dwellers2 . The report warned, though, that although the projectproduced positive environmental results, these results could be reversed if the works were notproperly maintained by the beneficiaries. As a result of the report's recommendations, AGETIPinvited the local press to cover environmental issues in their reports and organized workshops tomake the public aware of environmental problems. A community participation component wasincluded in the Second Project for this reason (Part 1, para. 31 (e)).

30. The project had a healthy impact on the social environment. It gave communitiesaccess to educational and health services by providing improved sanitation, drinking water,health stations, pharmacies, schools and recreational centers for youth. In addition, through the"food for work" project, 1. I million food rations were distributed to households in exchange forcommunity work. The Second Project includes a monitoring component whicih includes a studyto monitor unemployment levels in the areas and sectors covered by the project.

31. At the national level, AGETIP's success has led to the governmentes wanting to"AGETIPize" various other activities, as it recognizes the efficiency and effectiveness of thesystem. As seen in Part 111, Section F2-1, AGETIP has introduced competition into the processof providing public goods, leading to lower costs of project execution and, hence, the ability tocarry out more projects with the same budget than when the process in the hands of theGovernment which uses force account units to do the works. AGETIP has never been attackedin Senegal's free press, a remarkable achievement. All parties agree that it is the oneorganization that works. Recommendations have been made to the government to streamlineprocedures and increase accountability, but until these recommendations are implemented,various institutions have continued to seek AGETIP to implement part or all of their projects.

32. At the sub-regional level, the project is being replicated in a growing number ofcountries such as Niger, Burkina Faso, Mali, Mauritania, The Gambia and Chad, and has evenspread to southern and eastern Africa (for example Madagascar) and beyond. In addition, theAfrican Union of Public Works and Employment Executing Agencies, known as AFRICATIPE,serves as a forum for the agencies' directors to coordinate their work to improve efficiency, andserves as a tool for sub-regional integration and for promoting South-Soutil dialogue. Most

Figures are available only for the combined training programs of the first and second projects. from a questionnairecirculated in June 1994.

2 Etude de l'lmpact des Projets AGETIP sur l'Environnement. August/September 1993. p. 87.

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recently AFRICATIPE met with members of the Latin American Social Infrastructure Funds(SIFs) to discuss SIF experiences in: (i) delivering multi-sectoral services; (ii) covering rural aswell as urban zones; (iii) becoming a permanent instrument in public investment policy; and (iv)interfacing with the decentralization process in progress.

33. Finally, to confirm the project's high impact, a study, undertaken jointly by the Bank'sPolicy Research Department and the Massachusetts Institute of Technology, analyzed the projectand concluded the following about service delegation: (i) it has contributed to more efficientinfrastructure provision; (ii) it has a higher chance of achieving impact than other alternatives;(iii) it has brought a statistically significant improvement in the efficiency and effectiveness ofinfrastructure projects. These improvements are derived from free access of private firms toservice provision opportunities; increased competition among private sector firms; improvedquality of the final product as a result of more efficient supervision; a better assessment ofdemand for infrastructure; and an improved match between demand for infrastructure servicesand the private sector's suppliers3 .

G. PROJECT SUSTAINABILITY

34. Some aspects of this project are sustainable and can be built upon. The works performedunder the project, with proper maintenance, have a life span of over 30 years, although the roadwork will require rehabilitation every five years in addition to regular maintenance. AGETIPhas impressed upon the municipalities the importance of setting aside funds for maintenancework. Their commitment to this goal will determine the sustainability of the works executed.This issue is being addressed under the community participation sub-component. The nationaland local governments have expressed their desire to improve public services and to continue toutilize delegated contract management. The training received by contractors and consultants andthe skills learned by the laborers on the job will continue to serve them by opening up moreemployment opportunities, thereby ensuring their survival.

35. AGETIP is also executing works for other IDA-financed projects such as theAgricultural Research Project (Cr. 2107-SE) and the Second Human Resources DevelopmentProject (Cr. 2473-SE). AGETIP's future is uncertain since it has private legal status. It iscurrently serving as the executing agency for the Second Project, and will be the executingagency of the proposed community nutrition project slated for Board presentation in June, 1995.Below are three possible options open to the Agency: (a) it could continue as an NGO as it isnow; (b) it could be converted into a for-profit organization; and/or (c) it could split into smallerAGETIPs. It is recommended that AGETIP split into smaller competing units, some of whichcould become for-profit, while others would remain non-profit to maintain its focus on assistingthe disadvantaged.

36. There have several attempts to revise laws governing assigning and executinggovernment contracts without producing any notable changes. The obstacle facing thegovernment is finding a way to combine their dual needs of streamlining procedures while

3An Econometric Assessment of the Impact of Service Contracting on Infrastructure Provision: The Case of theAGETIPs of Africa, World Bank Research Project No. 678-64, 1994, pp.3-4.

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upholding government values in such areas as equitable treatment of co-contractors and ensuringa stake for the government.

H. IDA'S PERFORMANCE

37. IDA should be credited for thoroughly preparing the project. Preparation wasparticularly important, since the project incorporated several design features which had not beenattempted in the Sahel before. IDA worked closely with AGETIP and government to promote astrong working relationship with both parties. IDA's supervision missions were carried with duefrequency and with a variety of expertise (Part III, section H-2). Continuity was very strong,with one of the original appraisal members having seen the project through to the end. As ofFebruary 1995, 83.6 staff weeks had been spent on the project, of which I I weeks were spent inthe field (Part III, section H- I).

Lessons Learned from IDA's Perspective

38. The following lessons were identified during the course of project execution and havebeen taken into account in the design of the Second Project:

(a) For the appraisal of sub-projects' location, for social projects, numericalindicators such as population, number of current and potential users of socialinfrastructures, tax collection efficiency, etc., were used to rank sub-projectsin order to determine the effective need for the sub-project;

(b) In procurement, on the evaluation of the contractor's bids, a post-qualificationbid was introduced to take into account the remaining capacity of thecontractors in contract award as well as provide explanations for bids that are15% lower than the reference price and to have an additional guarantee. Thesechanges are reflected in AGETIP's updated procedures manual;

(c) Regarding the disbursement of counterpart funding, as experience hasshown that government has been slow in disbursing its counterpart funding, astrong covenant linking the review of sub-project batches to the disbursementof such funding has been included in the DCA of the Second Project;

(d) The training for contractors component should have been designed to start upearlier to enable participating contractors to have immediate access to training.For the Second Project, training for contractors was available when the creditbecame effective;

(e) A program to increase community participation should have been promotedto help ensure the maintenance, and therefore the sustainability of the works.This program has been included under the training and studies component ofthe Second Project; and

(f) The environmental impact of sub-projects was not taken into account in theeligibility criteria for sub-project appraisal and selection. To address this

l0

point, another eligibility criterion was added to AGETIP's updated proceduresmanual stating that sub-projects having a negative impact on the environmentare not considered for execution.

39. In addition two other lessons may be drawn. The first regards the importance of usinga staged approach when testing a project with an innovative design. The staged approachensured that the project's design was tight prior to full-fledged implementation. Second, giventhe problem of a lack of complementarity between this project and the Municipal and HousingDevelopment Project, in the future, very careful consideration of how proposed projectswould effect ongoing ones is warranted.

1. BORROWER'S PERFORMANCE

40. The Borrower's performance overall was satisfactory. Those involved in the projectmaintained a good working relationship with both AGETIP and IDA throughout. Thegovernment granted AGETIP exemptions from taxes and customs for the work, supplies andservices purchased to implement the sub-projects, and followed the procedures manual for thesubmission of sub-project proposals. There was no problem with government interference in theday-to-day affairs of the Agency. One weakness that had a negative impact on the timelyexecution of the project was the government's delays in depositing its counterpart fundingpayments into AGETIP' accounts.

41. AGETIP's performance was outstanding. The Agency's director participated in projectpreparation and attended negotiations. Over the course of the project, its management remaineddynamic, enthusiastic, committed and highly effective. It provided the strong centralizedcoordination necessary to avoid misunderstandings between the government, local NGOs andlocal communities. AGETIP unfailingly implemented IDA's recommendations prior to thesubsequent supervision mission. Activity reports and the various audit reports were submitted ina timely manner. The financial audits always contained "unqualified" opinions by the auditor.

42. AGETIP has become very popular with the government. The government has learnedthat delegated contract management can be successful for carrying out small public workscontracts. AGETIP's efficiency and openness have led to its being delegated the management ofcontracts for the construction of schools, health centers, and research centers financed throughother IDA projects such as the Agricultural Research Project (Cr. 2107-SE) and the SecondHuman Resources Development Project (Cr. 2473-SE). A proposed community nutrition projectwill also be executed by AGETIP, using a procedures manual designed for that purpose.AGETIP is also popular with the public. Many local associations have expressed their desire forAGETIP to continue and intensify its activities in light of the shortage of infrastructure in manycommunities.

43. Lessons learned from the Borrower's perspective include:

(a) It is important to have strong, centralized coordination to avoidmisunderstandings among the various actors involved in the project. One wayto involve all parties is to draft a detailed work program for implementationannually;

II

(b) The use of a highly detailed procedures manual is indispensable for projectsuccess. That, coupled with a motivated team, makes it possible to implementa project effectively and transparently;

(c) A reliable computerized management system makes regular reporting, in astandardized format, very easy and greatly facilitates project supervision; and

(d) Delegated contract management is a powerful tool for the efficient andtransparent execution of small scale public works.

J. PROJECT RELATIONSHIP

44. IDA, AGETIP and the government had a good working relationship throughout theproject's execution. The supervision missions and the project in general were well supported bythe government through their active contribution and easy accessibility. All aide-memoires werecosigned by IDA and AGETIP. Communication was effectively managed over the life of theproject through the various reports produced.

K. CONSULTING SERVICES

45. A large number of consultants were employed over the course of the project.Consultants were used as local contracting authorities to study the proposed sub-projects andprepare them for bidding. This original role was expanded during the project to include asupervision and monitoring component. International and local consultants were also used tocarry out impact studies, mid-term and final evaluations, financial, management and technicalaudits, evaluate training needs, train beneficiaries. All consultations were short-term and yieldedquality work with one exception. As mentioned earlier, the consultant hired by the governmentto generate a list of eligible sub-projects for financing made a wish list reflecting the desires ofNGOs, instead of producing a list of sub-projects which would be socially useful with anacceptable economic rate of return.

L. PROJECT DOCUMENTATION AND DATA

46. The project documents were key to the successful implementation of the project. Theyserved as the basis for the design and execution of the project. The procedures manual, annexedto the SAR, was relied on heavily and greatly facilitated AGETIP's success. The covenants inthe DCA were appropriate, but contained one weakness: it did not contain a provision that thegovernment must deposit counterpart funding into a special account before IDA would disburse.As stated above, this error was rectified in the DCA for the Second Project. The result was thatthe sub-projects to be financed from the government's contribution experienced delays inexecution. On the whole, the documents necessary for the drafting of the Project CompletionReport were readily available. AGETIP's computerized management system proved to be areliable source of data as well.

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PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE

1. NOTE: The Borrower submitted a Project Completion Report dated January 1994.Due to the report's length, a portion has been condensed and reproduced below. The report inits entirety is annexed to this report.

A. Lessons Learned

2. The beneficiaries were unanimous in acknowledging the efficiency of the Agency'sprocedures. The project served as an example and laid the foundation for transferring thesefunctions to an effective private sector. The project also succeeded in reducing the rigidity ofgovernment contracting procedures and substantially improved urban infrastructure, both inthe environmental and transportation sectors and in the health and education sectors.

3. All the contractors involved agreed on the efficiency of the project. Because of theprompt payments, they were no longer constrained by cumbersome government contractprocedures, and the barriers to entering that market, which worked to the detriment of smallenterprises, were broken down. The Agency awarded contracts equitably and transparently toa large number of small and medium-sized enterprises (SMEs), which were able to establishthemselves and gain expertise through practical experience. The Agency allowed them to formworking capital as a result of prompt payments --less than 10 days--and to purchase supplies,and create temporary and permanent jobs.

4. The Agency gave small individual firms and groupement d'interet economique (GIEs)an opportunity to win contracts. The objectives of equity and transparency were attained. Therequired labor ratios were observed and frequently exceeded, while at the same time SMEswere promoted and made more profitable. The businesses appreciated the speedy paymentprocedures and the "learning by doing" methods built into AGETIP's procedures. Once theAgency had achieved its objective of starting up a large number of businesses it developed thetraining program it needed in a later phase of the project. Training efforts should beintensified, since they would help improve the competitiveness and ensure the lasting operationof these enterprises.

5. Surveys of the people show that the target groups were reached. AGETIP work siteswere selected to benefit the most disadvantaged sectors, and the work provided a substantialrelief for those people. No matter how laborious the work, the supply was always greater thanthe demand. Moreover, some of these workers came from the construction industry and weretrained at a number of different AGETIP job sites, finally ending up as part of the network ofcontractors. As for local neighborhood associations, they tend to want to see AGETIPintensify its activities in view of the shortage of infrastructure in many communities.

6. From a technical standpoint, the projects already completed have had a real impact onthe quality of life and the environment, since they have focused on rehabilitation, the roadsystem, and social infrastructure in the health and education sectors. It is clear from acomparison with the cumbersome government contracting process that the Agency hasperformed successfully in terms of rapid disbursements and in terms of prices, which arealways below those charged by the government.

7 The project enables the municipalities:

'3

(a) to gain experience in selecting sub-projects, to be implemented on the basis ofeligibility criteria, preparing quality engineering designs, and awarding contracts onthe basis on bids, with the result of seeing a maximum number of socially andeconomically profitable sub-projects implemented transparently, at a reduced cost, andwith the required quality;

(b) to have an opportunity to gain experience in contractual management inperforming a public service, thereby making a positive contribution to current andfuture urban projects in Senegal,

(c) to gain credibility in the eyes of the local people, with regard to themunicipalities' ability to perform their public service mission.

It was recommended that in the future, the local people be more involved in selecting prioritysub-projects, so that the work performed would be more relevant to them and the urbaninfrastructures would be better maintained.

B. Bank's Performance

8. The Bank provided considerable support for the Public Works and EmploymentProject. Before the project started up, the Bank, together with the Borrower, organized twoconferences in Paris and Dakar to inform the donors active in Senegal and interest them incofinancing the program. As for the project Executing Agency, the Bank provided assistanceto it in managing the special account during two seminars held in Senegal. As for contractingand procurement procedures, the Bank helped the Agency improve its bidding documents andits criteria for awarding contracts. Between November 1988 and October 1993, the Bankconducted twelve missions. Ten of these were supervision missions, and of these, threemissions were made by a team of three persons. Two missions visited the Project to studyhow to compute rates of return and the net discounted value and to study the biddingdocuments for the sub-projects implemented by the various public works executing agencies.These missions lasted five days on average. Their objectives were to measure the progress ofthe project as it was being implemented and funds were being disbursed. The missions helpedimprove the Agency's performance and encouraged the borrowers to put up their cofinancing.These missions always told other lender about the positive achievements of the Agency, ad thishelped the reject obtain further cofinancing. Other Bank missions for ongoing projects orprojects under preparation, visited the Agency to learn about its operations, so that they couldincrease their own structures' effectiveness. Through discussions with persons involved in thevarious projects, municipalities, and the central government, the supervision missions wereable to set up working teams to make ongoing and future urban projects more effective. Thesemissions helped the Agency strengthen its management methods and above all to analyze andasses its contracting methods. They served as an opportunity to remind the Borrower to meetits commitment to providing counterpart funding and to explain the project results to otherdonors.

9. Lessons to be Drawn. A project properly appraised by the Borrower with the supportof the future management can be successfully implemented. Use of a procedures manual by anexperienced and motivated team made it possible to implement sub-projects transparently andeffectively. A reliable, computerized management system made it possible to report regularly

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on the project's activities, which in turn, made it possible to measure any risks or impedimentsto the project's development. In this connection, good communication between the Borrowerand the Bank, as reflected in the supervision reports, was conducive to this state of affairs. Awell audited project guarantees the security of the funds invested by the Bank to the profit ofthe Borrower and the success of its development program. All these factors helped make thePublic Works and Employment Project a success.

C. Government's Performance

10. The performance of the government of Senegal was generally satisfactory during thevarious stages of the project. The changes made in the government and its administrativestructures worked to the advantage of the project. The following points should be made:

(a) the government observed the provisions of the agreement signed with theAgency, and which was an integral part of the Development Credit Agreement.

(b) the government followed the instructions in the procedures manual forsubmitting and implementing sub-projects taken from the three-year priority investment planand financed by its counterpart funds.

(c) the government paid its share of the financing in full, which enabled theimplementation of 70 sub-projects generating 2,251 jobs, or an equivalent of 147,420 man-days at total wages of CFAF 298,141,964.

(d) the Agency was granted tax and customs exemptions for the work, supplies,and services received to implement the sub-projects and to purchase the supplies andequipment needed for the Agency's operations.

11. In this connection, to reduce further the time required to process these exemptions,since a certain sluggishness was noted in the government, the Agency decided to assign one ofits staff members exclusively to the job of monitoring exemptions on a daily basis (interfacingwith the tax and customs administration and transmitting exemption certificates to contractors).This measure provided relief from the temporary burden of these duties and taxes on the cashholdings of contractors and helped them meet their deadlines, since exemptions were grantedmore quickly.

12. Lessons to be Drawn. The central government (Ministries and government officesand agencies) and municipalities accepted the principle of maitrise d'ouvrage deleguee (MOD)or delegated contract management and signed agreements to this effect with the Agency. Inthis first phase, 137 agreements were signed, 86 of which were signed with the municipalities.The 48 municipalities involved demonstrated their interest in using private enterprises toperform public works and provide services, through the good offices of the Agency. Thismarks the beginning of contracting management of its activities to the private sector, to ensuregreater transparency and efficiency in providing public services.

D. Project Relationships

13. Bank supervision missions were always well supported by the Senegalese authorities,who were available at all times and contributed to the successful completion of the project.

15

this cooperation was evident from the start of the project to the end. Information wasexchanged effectively thanks to the periodic status reports sent out by the Agency, the Banksupervision reports, and the project audit reports. This ensured good communicationsthroughout the implementation of the project.

14. Beneficiaries. The beneficiaries are linked to the Agency by the MOD agreement.which had the following features:

(a) Beneficiaries turn over all their powers, rights, and obligations pertaining toproject management to the Agency. The Agency is, therefore, given full power to choose theprime contractors, select the contractors on the basis of competitive bidding, sign contracts,supervise the works, check and accept the work, and pay the co-contracting parties;

(b) The sub-project presented by the beneficiary is financed out of funds madeavailable to the Agency. This financing is added to the beneficiary's investment budget, butthe beneficiary is not required to pay it.

15. In these circumstances, beneficiaries were able to conduct important programs torehabilitate urban infrastructure, with the following advantages:

(a) The technical expertise of AGETIP in drawing up and executing publiccontracts in the construction sector; and

(b) financing granted by the project in the form of subsidies, which made up forthe deficit in the municipalities' investment capacity, enabled them to provide services andcarry out urban projects, involving sanitation, green areas, road paving, and building urbaninfrastructure among other things.

In addition, under the Agency's program to support training, it organized seminars for thesemunicipalities. These seminars were used to circulate the procedures manual to the municipaltechnical offices, and initiate them into a data processing management system to make theirservices more efficient.

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PART III: STATISTICAL INFORMATION

A. Related Bank Loans and Credits

Year ofLoan/Credit approval Purpose of Project Status Comments

1. Cr. 336-SE. Sites 1972 To support government Closed 12/81 Rated satisfactoryand Services Project withdrawal from direct housing

financing; to diversify housingsupply and concurrently broadendemand: to build institutionscapable of pursuing andreplicating such projects

2. Cr. 1458/SF-13- 1984 To gain insight into sector issues; Cr. 1458-SE Rated satisfactorySE. Urbain to improve the comprehensive closed 12/88;Managenment and management of Dakar SF-13-SERehabilitationi TA closed 12/89Project3. Cr. 1884-SE, 1988 To strengthen local governments, Under Closing date extendedMuLnicipal and to improve policy formulation, supervision by one year to[lousing service delivery, urban investment 3/31/96Developimienit and resource mobilization; toProject expand the economic impact and

efficiency of the housing sector by(i) removing financial andinstitutional constraints to theNational Housing Bank and (ii) byimproving the operation of theurban land market through theannual supply of a significantnumber of serviced and titledplots, while promotingprogressive privatization of thedelivery of housing

4. Cr. 2369-SE, 1992 To continue and decentralize tJnder ProjectSecond Public AGETIP activities in secondary supervision implementation hasWor ks and cities: to develop pilot activities to been hampered by aEmploviloenit Project test the feasibility of AGETIP's lack of counterpart

approach in other areas; to funding, but otherwiseorganize training for is proceeding well.municipalities and the small andmicro enterprises engaged inproject implementation; to makeAGETIP a sustainable agencycovering its operating costs on afee basis.

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B. Project Timetable

Item Date Planned Date ActualIdentification 07/88Preparation 06/88 - 02/89 06/88 - 02/89Pre-appraisal 11/88 11/88Appraisal 02/89 02/25-03/10/89Credit Negotiations 07/89 07/18 - 21/89Board 12/14/89Credit Signature 01 /23/90Credit Effectiveness 03/06/90Project Completion 06/30/92 08/30/93Credit Closing 10/31/92 09/30/93

C. Credit Data

1. Credit Disbursements

IDA FY and semester Disbursements (US$ million equivalent)Estimated cumulative Actual cumulative Actual % of estimated

1990, 1st semester 0 3.47 01990, 2nd semester 4.4 4.24 961991 1 8.5 8.13 961991 2 13.0 12.33 951992 1 18.0 15.68 871992 2 20.0 20.22 1011993 1 __20.22 1011993 2 22.09 110

Note: There was no cost overrun; this report does not include any disbursemenits established throughi balanceadjustment entries.

2. Credit Allocations (SDR million)

Category As stated in DCA At completioni1. Sub-projects under Part A of theproject:a. Work sub-projects 6.80 9.94b. Service sub-projects 4.50 1.54

2. Equipment for the executing 0.22 0.38agency3. Operating costs of the executing 1.40 2.46agency4. Consultants' services under Part 0.82 0.64B of the project5. Refunding of PPF 1.20 1.066. Unallocated 1.16 0.72TOTAL 16.10 16.09

Note: SDR 10,853.85 was canceled on March 8. 1994. Numbers may not add up due to rounding.

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D. Project Costs and Financing (US$ million)

1. Project Costs

Category Appraisal* Actual

Local Foreign Total Local Foreign TotalComponent (a) 24.43 3.65 29.92 22.20 5.75 27.36Labor-intensivecivil works(b): Services tocontractors 1.27 0.00 1.27 3.01 0.17 3.18(c): monitoring 0.32 0.25 0.57 0.47 - 0.47Executing agency 1.19 0.08 1.27 2.66 0.35 3.01operating costsPPF and 0.06 1.55 1.61 1.06 1.06executing agencycapital budgetPrice 0.21 0.29 0.50contingencies

TOTAL COST 27.48 5.82 33.30 27.24 6.27 33.51

Note: Numbers may not add up due to rounding.

* Estimates for the various components were arrived at by surveying the local construction industry to determinethe capacity of small firms and their training needs.

2. Project Financing

l___________ _ Appraisal ActualIDA 20.0 22.1Government of Senegal 5.0 5.0AfDB 8.3 8.3TOTAL 33.3 35.4

The results shown in this report are based on financing obtained from IDA, GOS and AfDB. The followingagencies funded sub-projects separately: CIDA. Japan, CFD, WFP, EC.

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E. Project Implementation

6-Feb-91 31-Mar-91 30-Sep-91 30-Jun-92 30-Sep-92 I1-Dec-92 31-Mar-93 30-Nov-93

No enterprises prequalified 356 396 680 796 Sso 912 1030

No maitresd'oe-vresprequalffied 85 110 160 190 233 267 292

No ofsubprojects completed 20 20 99 169 290 213 221 141

Person/day jobs created 29.815 237.384 414.270 461,200 525,129 547,308 1.93o) 99O

The number of jobs created includes those created by consulting firms and jobs at AGETIPitself.

F. Project Results

1. Direct Benefits

Indicator SAR ActualAverage daily wage (CFAF) 1700 1280Average duration of works (days) __29Average direct cost/job (US$) less than 4000 4236Turnaround time of payables (days) less than 10 3Procurement process (months) less than 3 1.2Person-years of temporary 7000 8713employment createdNo. of sub-projects executed __416

No. of contractors having won 231contractsLabor ratio greater than 20% 25.23%

The SAR estimated that the project would create a minimum of 7,000 person-years oftemporary employment, at a direct cost of $2,100 per person-year. The SAR calculated thisby taking into account that small and medium-sized firms would execute the contracts, and thatthese firms generally do not honor the minimum wage, instead paying CFAF 450 (small firms)and CFAF 1,300 (medium firms) as the average daily salary. The actual project generated8,713 person-years of employment (2,178,275 person-days/250 working days (due to the rainyseason the construction industry is active for about 250 days a year) or 74,928 temporary jobsof 29 days' duration, at a cost of $586 per job created. The actual project's average cost perperson-month of employment equaled $353 ($4,200 per person-year of employment). Theaverage daily wage paid equaled CFAF 1,280 (total wage CFAF 2,788,577,160/2,178,275person-days). This average daily wage is higher than the expected daily wage paid by smallfirms and is closer to the wage paid by medium firms.

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2-1. Other Benefits - Comparison between AGETI P's and the Central Government's Prices

The table below gives some information on prices paid by AGETIP compared to prices obtainedby the central government through local shopping. From this analysis, it appears that in thebuildinlg trade, AGETIP's prices are almost always less than those obtained by the government.These differences can be explained by (i) AGETIP's more flexible procedures. (ii) shorterturnaround times for payables and easier payment arrangements (Government's turnaround timefor payables often exceeded several months or a year); and (iii) the size of the businesses.AGETIP works primarily with SMEs which have low social costs and fixed costs, and whichlease equipment and hire employees on temporary contracts on the basis of the work they have toperform, which is not always the case for government co-contractors. This disparity in prices isless marked for large enterprises, such as road companies, for instance, which are outfitted tocompute costs and measure risks linked to their commitments.

ITEM UNIT AGETIP PRICE GOVERNMENT PRICE % DIFFERENCE

BUILDING TRADES

Foundation trenches m3 850 1,303 35

Clean concrete m3 17,000 26,168 35

Reinforced concrete: m3 80,000 113,753 30foundation

Reinforced concrete- m3 80,000 113,753 30lowcr footings l

Reinforced concrete- m3 80,000 113,753 30upper footings

Concrete superstructure m3 80,000 113,753 30

Block work: 15 m2 2,500 4,090 39

Block work: 10 m2 2,000 3,061 35

Rendering m2 800 1,267 37

Supplies and parts: 70 x u 30,000 37,260 19210 flush doors

Supplies and parts: 80 x u 30,000 38,880 23210 flush doors

White-wash m2 300 367 19

Acrylic wall paint m2 600 849 31

Ceiling paint m2 1,000 1,260 21

Paint for woodwork m2 1,300 2,372 45

Supplies and parts: non- u 4,500 4,860 7opening windows

21

Supplies and parts: MI u 3,500 6,450 46non-opening windows

Supplies and parts: built- u 1.000 1,555 36in switches

Supplies and parts: 120 u 8,500 10.968 22light strip

Supplies and parts: 60 u 7,500 10,291 27light strip

Supplies and parts: u 35.000 78,930 56complete wash basin

Supplies and parts: u 50,000 77,436 3|

kitchen sink with 1 tub &2 faucets

ROAD WORK

Laterite sub-base course m3 6,000 4,500 -33

Laterite base course m3 13,018 11,604 1 -1234.880 2

T2 curbs ml 4,990 4,324 -15

STAGD 5 bis curbs ml 5,860 6,535 II

Permeation m2 285 272 -s

Dense, 4cm thick coated m2 2,460 3,500 30stone

Storable coated stone T 49,500 52,800 6

(1) True or natural laterite(2) Laterite reinforced with 3% cement (in weight)

* 1988-93 (CFAF)

22

2-2. Other benefits - AGETIP's Disbursement Profile vs. Africa Urban Profile

100

90

80

70

60arters -rom A lAGETIP*~~~~~~~ 50 -~~~~~~~~~~~~~Af ri ca Urban

:j40

30

20

10

01 2 3 4 5 6 7 8 9 10 11 1213 14 1516

Quarters from Approval

3. Economic Impact

Sub-project type Estimated ERRSanitation work (example of 16.6% - 21.5%Manguiline Canal)Periodic maintenance of 31.75% to 37.39%urban roads (Fann Bel-Aircorniche)Road improvements 18.88% - 21.72%(Guediawaye Blvd.)Development of green areas 9.9% - 20.85%(Goree esplanade)Rehabilitation of buildings 14.72% - 19.40%(Nabil Choucaire MedicalCenter).Building construction 16.93% - 19.52%

These six sub-projects represent the six different categories of works performed under theproject. For assumptions, see pages 64-67 of the Borrower's contribution.

23

Cost-Benefit Ratios

Some social parameters are difficult to quantify, but the impact of the project on the incomesof people can be used:

Total Cost Wages distributed Labor ratioSub-project (CFAF) (CFAF) (%)

Construction of 46 120,395,442 32,458,215 27classrooms in theDiourbel region

Improvements to 179,811,959 44,821,973 25Guediawaye BlvdImprovements to 188,156,535 46,675,430 25Fann Bel-Air rocadeImprovements to East 8,546,616 2,300,200 27Dakar cornicheRehab. operating 86,300,108 25,644,775 30room of A. LeDantec Hospital

The improved balance of payments as a result of using local materials is another parameterthat would be interesting to consider. Other quantitative factors that are difficult to quantifyinclude: (a) improvement of living conditions and the environment; (b) social satisfaction ofthe beneficiaries; (c) contribution to structural transformation of the economy; and (d)contribution to social sectors and human resources (education, medical care).

4. Financial Impa=t

N.A.

24

5. Studies

Study Purpose Status Impact of StudyS Study of the To determine the Completed in The average economic rateeconomic rate of economic rate of January 1992 of return of sub-projectsreturn of sub- return of a sample of executed under the projectprojects sub-projects was over 12%.Environmental To determine the Completed in Impact of sub-projects onImpact studv impact of sub-project September 1993 the environment was

execution on the positive, but couldenvironment and make potentially be negative ifrecommendationis for works not properlyfuture projects maintained. Information

campaign under-taken tosensitize urban populationto importance of main-taining works

TIechnical (i) To verify that the Completed in The report made 12| verification of sub- procedures and January 1992 recommendations which

projects mechanisms used to were subsequentlysupervise work sites implemented by AGETIP'swere being followed; technical director, among(ii) to verify that these which were: (a) anyworks were of change made in theadequate quality and engineering plans duringwere economical; (iii) the course of projectto make execution should figure inrecommendations on the final plan on file; (b)how to improve the road rehab. projects shouldsystem for supervising always take into accountwork sites. drainage problems; (c)

locally produced materialssholid be tested forquality; (d) the technicaldirector should attend allwork hand-overs.

25

G. Compliance with DCA Covenants

Section of DCA Description of Covenant Deadline Status3.01 (a) Commitment to objectives met3.01 (b)(i) Compliance with terms of met

the Convention andprovisions for transfer ofCredit proceeds

3.01 (b)(ii) Due diligence met3.01 (b)(iii) Procedures manual met

satisfactory to IDA3.01 (b)(iv) Agency directors positions met

filled with staffsatisfactory to IDA

3.01 (b)(v) Agency and Borrower to metinform IDA of problems

3.01 (b)(vi) Provision of monthly before the 15th of each metactivity reports month

3.01 (b)(vii) Sample sub-project metcontract alwayssatisfactory to IDA

3.01 (b)(viii) Sample beneficiary metcontract alwayssatisfactory to IDA

3.01 (b)(ix) Submission to IDA of new October 15, 1990 metbatch of sub-projectsestimated at US$7.5 M

3.01 (c) Borrower not to amend, metwaive, abrogate theConvention without IDAagreement

3.01 (d)(i) Executing agency to 6/30/91 - completion of execution of sub-projectsexecute new sub-project Ist batch of sub-projects somewhat delayed due toaggregating the equivalent delays in receivingof US$5 million before 6/30/92 - completion of counterpart fundinig6/30/92, of which $2.5 2nd batch of sub-projectsmillion to be completed by6/30/91

3.01 (d)(ii) Counterpart funding met but with delays whichcaused a delay in projectclosing by 11 mIaothis

3.02 Procurement to be carried metout in accordance withDCA

3.03 Mid-term review 1/31/91 Mid-term took place inFebruary/March 1991

4.01 (a) Maintain records and metaccounts

4.01 (b) Have records and accounts semi-annually slight delays in receipt otaudited, and provide IDA audits, but audits alwayswith audit reports had unqualified opiliioIl

4.01 (c) For expenditures made on semi-annually slight delays in receipt ofbasis of SOEs, maintain audits, but audits alwaysaccounts and provide IDA had unqualified opillionwith semiannual auditreports I

26

H. Use of IDA Resources

1. Staff Inputs (in staff weeks)

FY Preparation Appraisal Negotiations SPN PCR Total

89 18.6 13.0 31.6

90 12.1 6.3 18.4

91 8.7 8.7

92 9.7 I 9.7

93 8.5 0.5 9

94 0.2 4.2 4.4

95 1.8 1.8

Total 18.6 13.0 12.1 33.4 6.5 83.6

2. Mission Data

Stage of Specialization Performance Dates ofProject Cycle Month/Year No. persons Days in field represented Ratings reportsIdentification 06/88 3 7 E, EA, FA n.a. 07/20/88Preparation 11/88 3 8 E, FA n.a. 12/08/88Appraisal 02/89 5 14 C, E, EA, n.a. 03/14/89

FA, LSupervision 1 01/90 2 11 E, FA 1. 1, 1, 1, 1 03/15/90Supervision 2 07/90 2 8 E, EA 1, 2, 1, 2, 1 08/29/90Supervision 3 11/90 2 8 E, EA 1, 1. 2, 1, 1 02/06/91Supervision 4 04/91 3 4 E, EA, FA 1, 2, 2, 1, 1 06/06/91Supervision 5 10/91 4 9 E, EA. L, S 1, 2, 2, 1 ,1 11/20/91Supervision 6 07/92 2 5 E, EA 1. 2. 2, 1. 2 09/09/92Supervisioni 7 10/92 3 5 DC, E, FA 1, , 1. 1 ,1 11/24/92Supervision 8 02/93 2 10 E, EA 1, 1, 1, 1, 1 03/11/93Supervision 9 04/93 2 5 E. EA 1, I, 1, 1, 1 07/02/93Supervision 10/93 4 5 E, EA,L. S 1. 1 1. 1, 1 11!30/93I 0/PCR I I I I_I

Specializations representedC ConsultaiitDC Division CliietE. EconiomistEA Enitineer AdvisorFA -- Fittaticial AnialystL -- t Lawvcr

S :o=ioioClolo5

fPci ror tndic Ratiegs (in respective orderiPito ,ci Developn1icn t)hOjectivesiinpunictneation ProgressConiplialice with Legal CovenantsPtoiect Mianaoemient PertorimiaticeA a ilahilitv (it Funds

.4

r i --I. - i E-