document of the world bank · 2016. 7. 17. · date achieved 11/02/2004 12/31/2007 12/31/2007...

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Document of The World Bank Report No: ICR2038 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-48000) ON A LOAN IN THE AMOUNT OF US$100 MILLION TO THE RUSSIAN FEDERATION FOR A CADASTRE DEVELOPMENT PROJECT December 13, 2011 Sustainable Development Russia Country Unit Europe and Central Asia Region Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized

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Page 1: Document of The World Bank · 2016. 7. 17. · Date achieved 11/02/2004 12/31/2007 12/31/2007 Comments (incl. % achievement) Federal Law No. 221-FZ “On State Real Estate Cadastre”

Document of

The World Bank

Report No: ICR2038

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(IBRD-48000)

ON A

LOAN

IN THE AMOUNT OF US$100 MILLION

TO THE

RUSSIAN FEDERATION

FOR A

CADASTRE DEVELOPMENT PROJECT

December 13, 2011

Sustainable Development

Russia Country Unit

Europe and Central Asia Region

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2

CURRENCY EQUIVALENTS

(Exchange Rate Effective September 20, 2011)

Currency Unit = Russian Ruble

31.364 RUB = US$1

US$ 1.00 = 1.5715 SDR

FISCAL YEAR

January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AM Aide Memoire

BTI Bureau of Technical Inventory

CA Federal Agency for Cadastre of Immovable Property (Cadastre Agency)

CAS Country Assistance Strategy

CIS Commonwealth of Independent States

DO Development Objective

ECA Europe and Central Asia

ECSSD Environmentally and Socially Sustainable Development

FM Financial Management

IBRD International Bank for Reconstruction and Development

ICR Implementation Completion Report

ICT Information and Communications Technology

LARIS Land Reform Implementation Support Project

M&E Monitoring and Evaluations

MOED Ministry of Economic Development

MOF Ministry of Finance

MOJ Ministry of Justice

NGO Non-Government Organization

PAD Project Appraisal Document

PDO Project Development Objective

PIU Project Implementation Unit

RRS Rights Registration Service

RUB Russian Ruble

SOF Subject of Federation

US$ United States Dollar

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Vice President: Philipe Le Houerou

Country Director: Pedro Alba

Sector Manager: Benoit Blarel, Acting

ICR Team Leader: Malcolm Childress

ICR Author: Tony Lamb/Samantha De Martino

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4

RUSSIAN FEDERATION

CADASTRE DEVELOPMENT PROJECT

CONTENTS

Data Sheet

A. Basic Information ....................................................................................................... 5

B. Key Dates ................................................................................................................... 5

C. Ratings Summary ....................................................................................................... 5

D. Sector and Theme Codes ............................................................................................ 6

E. Bank Staff ................................................................................................................... 6

F. Results Framework Analysis ...................................................................................... 6

G. Ratings of Project Performance in ISRs .................................................................... 9

H. Restructuring (if any) ................................................................................................. 9

I. Disbursement Profile ................................................................................................ 10

1. Project Context, Development Objectives and Design ............................................. 11

2. Key Factors Affecting Implementation and Outcomes ............................................ 14

3. Assessment of Outcomes .......................................................................................... 20

4. Assessment of Risk to Development Outcome ……………………………….….. 25

5. Assessment of Bank and Borrower Performance ..................................................... 26

6. Lessons Learned........................................................................................................ 27

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners........... 29

Annex 1. Project Costs and Financing .......................................................................... 30

Annex 2. Outputs by Component.................................................................................. 31

Annex 3. Economic and Financial Analysis ................................................................. 40

Annex 4. Bank Lending and Implementation Support/Supervision Processes ............. 43

Annex 5. Beneficiary Survey Results ........................................................................... 45

Annex 6. Stakeholder Workshop Report and Results ................................................... 46

Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 47

Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 49

Annex 9. List of Supporting Documents ...................................................................... 50

Annex 10. Subjects of Federation in which Project was Implemented…………….... 51

MAP .............................................................................................................................. 52

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A. Basic Information

Country: Russian Federation Project Name: Cadastre Development

Project

Project ID: P078420 L/C/TF Number(s): IBRD-48000

ICR Date: 12/13/2011 ICR Type: Core ICR

Lending Instrument: SIL Borrower: RUSSIAN

FEDERATION

Original Total

Commitment: USD 100.00M Disbursed Amount: USD 99.57M

Revised Amount: USD 99.57M

Environmental Category: C

Implementing Agencies:

Federal Agency for Immovable Property Cadastre (to 02/28/2009)

Federal Service for State Registration, Cadastre and Cartography (from 03/01/2009)

Co financiers and Other External Partners:

B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 10/21/2002 Effectiveness: 12/21/2005 12/21/2005

Appraisal: 11/02/2004 Restructuring(s):

Approval: 07/05/2005 Mid-term Review: 11/30/2007 05/30/2008

Closing: 06/30/2010 06/30/2011

C. Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Satisfactory

Risk to Development Outcome: Low or Negligible

Bank Performance: Satisfactory

Borrower Performance: Satisfactory

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

Bank Ratings Borrower Ratings

Quality at Entry: Satisfactory Government: Satisfactory

Quality of Supervision: Satisfactory Implementing

Agency/Agencies: Satisfactory

Overall Bank

Performance: Satisfactory

Overall Borrower

Performance: 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): No

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 98 98

Housing finance 1 1

Law and justice 1 1

Theme Code (as % of total Bank financing)

Administrative and civil service reform 14 14

Land administration and management 29 29

Legal institutions for a market economy 14 14

Personal and property rights 29 29

Tax policy and administration 14 14

E. Bank Staff

Positions At ICR At Approval

Vice President: Philippe H. Le Houerou Philippe H. Le Houerou

Country Director: Pedro Alba Pedro Alba

Sector Manager: Benoit Paul Blarel Benoit Paul Blarel

Project Team Leader: Malcolm D. Childress Malcolm D. Childress

ICR Team Leader: Malcolm D. Childress

ICR Primary Author: Tony Lamb/Samantha De Martino

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) The Project development objective is to improve the information flow and rationalize

normative and operational procedures for the Unified State Cadastre of Immovable

Property so as to facilitate development of real property markets, improve the quality of

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7

services provided by the offices of the Cadastre Agency, and strengthen linkages with

other organizations.

Revised Project Development Objectives (as approved by original approving authority)

(a) PDO Indicator(s)

Indicator Baseline Value

Original Target

Values (from

approval

documents)

Formally

Revised

Target

Values

Actual Value

Achieved at

Completion or

Target Years

Indicator 1 : Reduction in the average time for completion of transactions in immovable

property.

Value

quantitative or

Qualitative)

4 months (80 business

days)

1 month (20

business days) 19.5 business days

Date achieved 12/31/2004 12/31/2009 06/30/2011

Comments

(incl. %

achievement)

Result slightly exceeded target (based on a 5 day business week).

Indicator 2 : Providing for market competition in provision of survey (technical inventory)

services.

Value

quantitative or

Qualitative)

0 regions All Regions All Regions

Date achieved 11/02/2004 12/31/2007 12/31/2007

Comments

(incl. %

achievement)

Federal Law No. 221-FZ “On State Real Estate Cadastre” dated July 24, 2007,

allowed market competition throughout the Russian Federation. In 2011, 264

survey firms were accredited to perform technical inventory.

Indicator 3 : Elimination of requirement for survey (technical inventory) for secondary

transactions in immovable property

Value

quantitative or

Qualitative)

Requirement in Place Eliminated Eliminated

Date achieved 11/02/2004 12/31/2006 12/31/2006

Comments

(incl. %

achievement)

Achieved in accordance with target following amendments to the law.

(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 : Reduction in the average time for processing new property surveys by the

Cadastre Agency.

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Value

(quantitative

or Qualitative)

2 months (8 weeks) 2 weeks 4 weeks

Date achieved 11/02/2004 12/31/2010 12/31/2008

Comments

(incl. %

achievement)

No decrease in processing time since 2008. Baseline value was reduced by 50%.

The law of the Russian Federation establishes a period of 20 working days.

Indicator 2 : Reduction in the number of steps requiring the client to interact with the Cadastre

Agency in connection with transactions in immovable property

Value

(quantitative

or Qualitative)

4 steps 2 steps 3 steps

Date achieved 11/02/2004 12/31/2006 12/31/2008

Comments

(incl. %

achievement)

The steps are as required by law (221-FZ). The requirement for technical

inventory for secondary transaction was eliminated. Submitting an application

for a transaction and obtaining results now can be done electronically or through

the post. This eliminated the requirement to visit the Cadastre Office. In addition,

the registration process is done at the same time without a separate visit to the

registration office as was done prior to the reform. No decrease in number of

steps since 2008.

Indicator 3 : Increased number of client applications processed per cadastral accounting staff

of the Cadastre Agency

Value

(quantitative

or Qualitative)

Average 2 per day Average 7 per day Average 5.5 per day

Date achieved 11/02/2004 12/31/2009 06/30/2011

Comments

(incl. %

achievement)

Since 2007, RosReestr figures indicate that staff processed 5 or more transactions

per business day on average. Target of processing 7 transactions per business day

not fully achieved. Average number of applications per day more than doubled

from baseline.

Indicator 4 : Increased number of information requests

Value

(quantitative

or Qualitative)

916,155

10 percent annual

growth during the

Project

1,463,974 requests.

60% growth

between 2007 and

2011

Date achieved 11/02/2004 06/30/2011 06/30/2011

Comments

(incl. %

achievement)

Figures are total for the country and show a 60 percent rise in the number of

applications based on figures between 2007 and 2011, thus exceeding target.

Indicator 5 : Average time client spends in cadastre office per visit

Value

(quantitative

or Qualitative)

120 minutes 20 minutes 48 minutes

Date achieved 11/02/2004 12/31/2009 06/30/2011

Comments

(incl. %

achievement)

Limited reduction from 120 minutes in 2004 to 48 minutes in 2011. While the

target of 20 minutes was not met, the time spent by clients was cut by more than

half the baseline value.

Indicator 6 : Test mass appraisal methodologies for property valuation

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Value

(quantitative

or Qualitative)

0 percent completed

100 percent of

properties subject

to taxation

100 percent of

properties in 5

pilots tested with

new valuation

system

Date achieved 11/02/2004 12/31/2009 06/30/2011

Comments

(incl. %

achievement)

All properties in the original 4 pilots were valued (Tver, Kemerovo, Kaluga and

Tatarstan). In addition, 5 million properties in Moscow City were valued by the

end of the Project. The Government financed pilot testing in 7 other regions

using its own funds. The plan is to complete the valuation in the country by

2013.

Indicator 7 : Increase client satisfaction with operation of the Cadastre office

Value

(quantitative

or Qualitative)

5.84 6.43 points

Date achieved 12/31/2007 06/30/2011

Comments

(incl. %

achievement)

Using CA/RosReestr satisfaction assessment method, there has been a 10 percent

increase in satisfaction levels between 2007 and 2011. Overall the improvements

over the years were moderate.

G. Ratings of Project Performance in ISRs

No. Date ISR

Archived DO IP

Actual

Disbursements

(USD millions)

1 06/01/2006 Satisfactory Satisfactory 0.50

2 07/11/2006 Satisfactory Satisfactory 0.67

3 01/23/2007 Satisfactory Satisfactory 30.32

4 08/14/2007 Satisfactory Satisfactory 32.90

5 04/19/2008 Satisfactory Satisfactory 77.54

6 10/14/2008 Satisfactory Satisfactory 85.17

7 01/23/2009 Satisfactory Satisfactory 86.72

8 06/29/2009 Satisfactory Satisfactory 88.75

9 10/15/2009 Satisfactory Satisfactory 92.15

10 01/24/2010 Satisfactory Satisfactory 94.37

11 11/06/2010 Satisfactory Satisfactory 95.87

12 06/26/2011 Satisfactory Satisfactory 97.07

H. Restructuring (if any)

Not Applicable

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I. Disbursement Profile

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1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

Despite fundamental changes to the economy and nature of property rights in the Russian

Federation during the 1990s and early 2000s, the manner in which real property was

administered remained little changed. Responsibility for land, buildings and rights to real

property were spread across three organizations. There were inadequate linkages between

the organizations, numerous requirements to transact with real property, and poor access

to information. The property market was operating inefficiently, investment was

frustrated, and property was rarely used as security for loans. Consequently, the

contributions of the country’s real property resources to economic growth and social

stability, as well as government revenue, were falling well short of their potential.

The Government, World Bank and donors had begun to support improvements in the real

property administration sector from the early 1990s, through projects such as the Bank-

financed Land Reform Implementation Support (LARIS) Project, which ran from 1995 to

2003. In 2004, the Government initiated a new program of legislative and administrative

reform to improve efficiency, and approved an investment program to establish an

automated, unified record of real property that would improve use of property, improve

market efficiency, and stimulate real property related investment (the Federal Targeted

Program 2006-2011). The Cadastre Development Project (the Project) was to contribute

to these moves to improve real property administration, providing support to the Federal

Targeted Program, and building on the achievements of the LARIS Project. Initially, the

Project idea was to support both Cadastre and registration service improvements because

the ultimate objective of the Bank-Russian Federation cooperation was to support the

integration of these services so as to improve efficiency and effectiveness and to simplify

procedures for the clients. Cadastre services were the responsibility of the Cadastre

Agency (CA), while the registration services were the responsibility of the Rights

Registration Services (RRS). At the time, the Government was not ready to take the

administratively charged decision to merge these agencies. The Bank team preparing the

Project spent considerable effort in devising the implementation arrangements that could

ensure complete cooperation and coordination between these two large agencies while at

the same time aiming to unify them at least through information technology linkages.

This attempt took a considerable length of time. The CA was ready to move on with the

Project, while the RRS continued to consider the legal and operational ramifications.

Under the circumstances and in order to capture the momentum of high commitment on

the CA part as supported by the Government, the Bank agreed to split the initial idea of a

single project into two: The Cadastre Development Project and the Registration Project

(Loan 4826-RU). The two agencies were integrated during Project implementation, a

process that took about one year to complete.

The Project addressed one of three priority areas of the 2002 Country Assistance Strategy

(CAS) – strengthening public sector management – through enhancing accountability and

information flows, improving efficiency and quality of public service delivery, and

improving fiscal management. The Project also assisted with another CAS priority area –

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improving the business environment and enhancing competition – particularly through

the protection of property rights and greater access to information. The Project was

consistent with the emerging country partnership strategy, addressing two of the four

pillars, namely improving the efficiency of government programs and expenditure as well

as supporting regional development.

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

The objective of the Project was to improve the information flow and rationalize

normative and operational procedures for the Unified State Cadastre of Immovable

Property so as to facilitate development of real property markets, improve the quality of

services provided by the offices of the Cadastre Agency, and strengthen linkages with

other related organizations. Key outcome indicators linked to the PDO were:

Reduction in the average time for completion of transactions with real property

(from four months to one month).

Elimination of the requirement for survey (technical inventory) for secondary

transactions in real property.

Market competition in the provision of survey (technical inventory) services.

Key intermediate outcome indicators for the PDO were:

Reduction in the average time for recording new property surveys by the CA.

Increased number of client applications processed per staff of the CA.

Reduction in the number of steps requiring the client to interact with the CA in

connection with real property transactions.

Reduced average time for providing service to clients visiting the CA offices.

Application of mass appraisal methodologies for property taxation developed

under the Project.

Increased number of information requests to, and greater client satisfaction with

the CA offices.

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

and reasons/justification

N/A

1.4 Main Beneficiaries

While the PAD did not specify the targeted population, it is clear from the context that

this group consisted of all those who held rights to real property and those who would

like to acquire such rights; those wanting to make use of information relating to real

property, including real estate professionals and investors, municipalities and higher

levels of government that use real property information or levy taxes on real property.

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1.5 Original Components (as approved)

The Project included four components: (1) Institutional Development of the Real Estate

Cadastre; (2) Cadastre System Interrelations; (3) Real Estate Taxation Development; and

(4) Project Monitoring and Management.

(1) The Institutional Development of the Real Estate Cadastre component included

legislative and regulatory reform, training, and business system analysis. Reform to the

laws and regulations were to improve the legal framework for making transactions with

real property, with a particular focus on simplifying procedures and removing hurdles to

making transactions. The systems within the CA offices were also to be improved, as was

the structure and operation of the CA. The component aimed to improve the quality of

services to clients, both private and professional, particularly in regard to the provision of

information. Finally, the professional skills of CA staff were to be improved through

training. Under this component, the process of making a transaction was to be made

simpler and quicker for staff and clients.

(2) The Cadastre System Interrelations component was to provide improved information

linkages within the cadastre system and with outside users. This was to be achieved

through the development of an information technology and communications systems,

plus the provision of hardware in selected CA offices across the country, which was to

account for the bulk of Project funds (almost 80 per cent). The subsystem was to improve

information provision and exchange, to improve applications for the CA’s clients, and to

increase archive security through improved archiving and records management functions.

Training in the new subsystem was also to be provided. Similarly, an application was to

be developed for information exchange between the CA offices and the Rights

Registration Service (RRS), within the Ministry of Justice (MOJ), which was responsible

for registration of rights over real property. These systems were to improve the efficiency

of property transactions and information provision, and increase the security of records.

(3) The Real Estate Taxation Development component was to develop improved mass

appraisal methodologies for land and real estate for use by municipal governments, which

would provide an important source of revenue for municipalities. The component was to

establish systems for mass appraisal and monitoring market values, thereby permitting

the introduction of reliable and transparent valuation systems and procedures to support

broad-based and equitable property taxation. Testing was to be conducted in four pilot

areas.

(4) The Project Monitoring and Management component covered both management of

the Project, supported by a Project Implementation Unit (PIU) within the Federal Center

Project Finance, and the monitoring of results in accordance with the indicators specified

in the PAD. Independent surveys of client satisfaction were to be conducted.

1.6 Revised Components

N/A

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1.7 Other significant changes

In 2004, during project preparation, the Government had formally merged two

organizations responsible for real property administration – the Federal Land Cadastre

Service and Bureau of Technical Inventory (BTI) – to form the CA, under the Ministry of

Economic Development and Trade. In December 2008, the Government initiated the

implementation of unifying the key agencies associated with real property by formally

merging the CA with the RRS and the Cartography and Geodesy Agency. The resulting

organization was known as the Federal Service for Registration, Cadastre and

Cartography Services (RosReestr) under the Ministry of Economic Development

(MOED). The merger was fully in line with the Project’s PDO to improve information

flows and rationalized operations. The immediate impact of the change was the

imposition of significant additional duties on management and staff of RosReestr. The

decision entailed some delays as RosReestr management was formed and started to

implement the Government’s decision, which affected some 6,000 offices and 46,000

staff. Nevertheless, the merger was in line with best-recommended practices and along

the lines of improved operations. The Government’s decision is one of the most

important institutional changes, supported by the Bank, which contributed significantly to

the institutional development, improved efficiencies and customer service orientation of

RosReestr.

The original Project Closing date of June 2010 was extended to June 2011 to allow for

the changes that occurred due to the merger to take effect. The merger of the Cadastre

and registration agencies required the restructuring and extension of the legal framework

and software development contracts that were essential to the project and that needed to

reflect the important legal and operational changes of the merger.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

Project preparation was based on a sizeable body of information and experience. The

LARIS Project, which was successfully completed in 2003, had provided not just

infrastructure, mapping data and training to support real property administration but also

valuable understanding of the needs and capacity of land administrators and the public.

Four project preparation studies were undertaken, including (a) a Review of the Current

Registration System; (b) a Review of existing Information Technology and Strategy for

Future ICT Development; (c) a Review of the legal framework; and (d) a social

assessment. The results of these studies were reflected in project design.

Several of the Bank team members had long and substantial experience in land

administration projects, including the LARIS Project, in the Russian Federation and in

neighbouring countries. The lessons learned from the project preparation studies and

similar projects in the region resulted in the design of a targeted set of activities that were

expected to deliver the PDO. Based on the knowledge and understanding of projects of

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this kind and conditions in the Russian Federation, the team focused on two critical risks,

the institutional and capacity risks, and formulated practical mitigation measures based

on one or more Project activities. At the same time, the team avoided the risk of waiting

for desired, but substantive, institutional change as a condition for the Project; i.e. the

merging of Cadastre and Registration services under one agency. While the Bank and the

Government took the risk of going ahead with the Cadastre Project (which was in a better

readiness stage), they continued the dialogue during implementation on institutional

reform. Other risks were to be addressed through systematic change to the manner in

which the CA operated or through close supervision. At least one risk – relating to land

allocation and urban planning legislation outside the Project’s ambit – was realistically

assessed as being beyond the scope of the Project or the CA to address unilaterally.

The project design was relatively standard for cadastre projects, having drawn on more

than ten years of experience in cadastre reform in the region. The PDO was of a standard

nature for countries moving from command to market economies. The components, too,

were relatively standard for this type of project, and the implementation arrangements

were straightforward, with responsibility resting with one agency that had a proven

record. Based on lessons learnt from the LARIS Project and preparation studies, the

project design focused on improving laws and operations, and supplying the necessary

equipment. In doing so, it was to support and promote reforms that would raise the

system to higher levels of security, efficiency, service and sophistication.

The Government had been actively engaged in the reform and development of real

property administration and market development for more than a decade, including

through the LARIS Project. The Government had adopted a clear program for legislative

and administrative change in 2004 that was consistent with best practice. A variety of

laws had been enacted and administrative reforms put in place. User groups were

consulted during preparation and the findings of the project preparation studies were

incorporated in the design. As indicated earlier, the Project initially covered support for

both the cadastre and registration services. Government commitment was high to

continue the engagement and dialogue with the Bank on land management issues. The

CA, being the more technical agency, was ready for Project implementation, while the

RRS had several legal and procedural issues to clarify before their final engagement in a

project. The complexity of integrating the two agencies only through the Project and

without a Government decision led the Government and the Bank to agree to split the

initial project idea and proceed with the support for the improvements in cadastre

services which were in an advanced stage of preparation, while the issues delaying

decisions on the registration services (then under the Ministry of Justice) were being

resolved. The CA officials were experienced and knowledgeable. Once the Project had

been approved by the Bank’s Board, the Government and the CA moved quickly to begin

implementation. Due to thorough preparation, the CA had a clear idea of its needs, and

once funds became available they were promptly disbursed.

The Project was to be implemented in 45 per cent of the country (by administrative

region), covering 40 out of 89 Subjects of the Federation (SOFs) in which there were

approximately 1000 municipal CA offices (out of 2300 nationally). For a list of the

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regions, see Annex 10. The main reason for the restricted application of the Project was

the limited financing available: only US$100 million was available for the Project. The

valuation activity was also planned in four pilot areas. In this case, the limitation arose

from the fact that the project was assisting with design and testing rather than rolling out

the valuation system, which is currently being planned and which will be a task of major

proportions – covering more than 65 million properties and therefore one of the largest

property valuation exercises undertaken in modern times. It should also be noted that the

Project’s funds represented only a small part of the funding for the Federal Targeted

Program – for example, in 2007, the Program’s budget was in the order of US$250

million and US$170 million in 2011. The Government’s Federal Targeted Program

covered the other areas not covered with Bank funding.

Overall, project design was satisfactory. The preparation team tailored a standard,

successful model for improving real property administration and market development to

the local conditions. In doing so, the team drew on the long experience and informed

understanding of conditions in the Russian Federation, the capacity of administrators and

the needs of the public. Similarly, the Government team applied their professional skills

and knowledge to the design process to produce an ambitious but realistic project design

that accorded with Government strategy.

2.2 Implementation

The CA had a clear idea of what it needed; there had been thorough preparation, and the

Project was designed to meet the CA’s need and its capacity to deliver. Implementation

began promptly after loan effectiveness on December 21, 2005. A PIU was formed,

equipment acquired and installed, training conducted, and results began to emerge. Loan

disbursement figures confirm this: by January 2007, over US$30 million had been

disbursed, rising to over US$77 million by April 2008, that is, 28 months after

effectiveness.

Project implementation was generally without difficulties. Except as noted below, there

were no factors either outside or within the Government’s control that adversely affected

implementation. The nature of the largest component 2 - standardized equipment and

software – coupled with software development and installation and supervision by the

CA specialized information technology arm – facilitated quick disbursements once

agreement on the technical specifications and procurement processes were agreed. This

is despite a delay in the procurement process of the software development activity due to

the Bank’s questioning of the CA’s specialized agency (Zemlya) undertaking this

function. Ultimately, utilizing CA’s specialized IT agency ensured continuity, saved

funds and improved and maintained the capacity of developing and building on the

specialized land management IT systems. Government policies and commitment

remained steady, most of the necessary legislation was adopted, contractors performed

well, and major technical difficulties were rare. Although there were changes of

individuals in management and staff, those changes did not disrupt implementation.

Bank implementation support teams provided guidance as needed, but in general, the CA

and then RosReestr had the vision, capacity and determination to implement the Project.

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The main area in which the CA and RosReestr required and received advice was modern

practices of land administration; advice from implementation support missions and study

tours proved to be highly valuable and fed into the design and implementation of land

administration activities.

There was no formal restructuring or other major changes to the Project. The Loan

Agreement (4800-RU) was amended (August 25, 2005) to reallocate funds from

Category 3 (Training) to Category 2 (Consultant Services and Audit). The Loan closing

date was extended to allow for ongoing contracts to be completed. The Government’s

decision of May 2008 (effective December 2008) to merge the CA with the RRS to form

RosReestr caused some delays in project implementation – mainly to accommodate the

restructuring of some related ongoing contracts such as for the legal framework and

software development. The Government moved quickly to appoint new management

personnel to continue the reform process. Management’s attention focused on the task of

bringing together some 6,000 offices and 46,000 staff, building a new management

structure, and dealing with strategic and administrative issues associated with a merger.

The legal ambit of the new organization, RosReestr, had expanded and thus the legal

framework had to be reviewed. This meant the Project work on developing legislation

was delayed while the new situation was assessed. Other Project sponsored design work,

particularly software design, also had to be revised to accommodate the changes. At the

same time, the bulk of Project funds had been disbursed and the equipment acquired,

installed and made operational. The impact of the reorganization was felt in deterioration

of some of the indicators reflecting the delays, the need for staff and management to deal

with the new environment, and new procedures to accommodate the merger, not to

mention the onset of the financial crisis. The Bank was supportive during this period; the

mid-term review mission of May 2008 noted that a delay was to be expected, but that the

new structure would provide an important opportunity to integrate Cadastre and

registration functions, something that the Bank had been advocating for many years and

which was consistent with international best practice. On the December 2008 mission, the

Bank team focused on advising how Project activities could assist in the integration

program. Budgetary restrictions arising from the 2008-9 financial crisis limited spending

on training, particularly study tours, but this had no sizeable impact on implementation

because the bulk of training had already been undertaken. Finally, the merger of the

three agencies (Cadastre, Registration and Cartography) into RosReestr was a step in the

right direction and well worth the delays and changes in the critical contracts (legal and

software development) to arrive at an optimal and timely solution.

2.3 Monitoring and Evaluation Design, Implementation and Utilization

Design: The PAD contains a set of clearly expressed monitoring indicators that focus on

more efficient services. Most of the indicators provide a quantifiable basis for assessing

progress in meeting the PDO. The results framework in Annex 3 to the PAD provides a

set of clear, specific indicators covering activities under each component, and the PAD

clearly envisages how the data would be collected, primarily through the CA’s internal

reporting system. As a check, a minimum of three contracts to monitor results and to

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survey users were to be issued to verify the CA’s quantitative reports and provide

feedback on qualitative aspects of services.

Implementation: Initially, the CA did not follow the PAD’s result framework, noting that

there were various shortcomings with the approach (which were communicated to the

Bank team). Instead, the CA developed its own approach, which involved questionnaires

for clients covering satisfaction with time, quality of service, convenience of service and

level of awareness. The CA did not report on all matters covered in the results framework

in the early stages. However, during the mid-term review mission of May 2008, the Bank

team insisted that in addition to its own indicators, the CA needed to report on the Annex

3 indicators as part of the obligations under the loan agreement. Following that mission,

the CA began reporting on the Annex 3 indicators.

While some of the data came from the CA’s existing internal monitoring system, which

had been in place for many years, other indicators were new and specific to the Project,

such as the data for valuation methodology development and testing under component 3.

Additionally, data on client satisfaction was collected through three out-sourced client

surveys conducted in 2007, 2008 and 2009, with a follow up study in 2010 funded by

RosReestr. Around 5,000 respondents were questioned on quantitative and qualitative

aspects of the services of CA offices, and the results were comprehensively reported.

It is important to note that some indicators deteriorated or did not reach targets due to the

impact of the merger on one hand, but also as a reflection of the on the ground

developments in the real estate market as the financial and housing crisis was unravelling

worldwide (e.g. number of requests for information declined after 2008). Additionally,

the indicators do not adequately reflect the ease and speedier means of making

applications or requesting information through electronic means. For example, the client

was required to obtain documents and move them from one service to another, while now

this is done electronically and often without the need to physically visit offices.

As to sustainability, the Project is built on the CA’s reporting system, which remains in

place and continues to provide statistics. To this extent, there is no doubt as to its

sustainability. Client surveys of the type sponsored by the Project, too, will continue into

the near future under the Bank-sponsored Registration Project, which is being

implemented by RosReestr. By the Project’s end, there was greater acceptance of the

client survey approach to monitoring, and there appears to have been some cultural

change within RosReestr.

2.4 Safeguard and Fiduciary Compliance

The Project did not involve safeguard policies. The Project financed the purchase of

equipment, hardware and software as well as studies, and therefore there was no direct

impact on safeguards. The Project did not finance any cadastre measurements or

registration which is done on a selective sporadic basis in Russia. There was a small

amount of proposed office repair, which was rated at category C for Environmental

Assessment.

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The financial management (FM), disbursement and procurement staff within the PIU

performed capably and all audits had a clear opinion. The FM system recorded all

transactions and balances, and it permitted clear and concise reports to be promptly

issued. Internal controls and audits further ensured the accuracy of records. No fiduciary

issues were raised, and questions raised during site visits were corrected satisfactorily

(e.g. tracking inventories). The FM and procurement functions were rated as satisfactory

throughout the Project.

2.5 Post-completion Operation/Next Phase

The outcomes of the Project have been incorporated in RosReestr’s day-to-day

operations. The improvements to the legal framework, data processing and storage,

communications, and information exchange are now part of the RosReestr system

including in the Subjects of the Federation (SOFs) not included under the Project. The

centralization of services and processes is due to be finalized at the end of 2012. The

Government increased emphasis on continually improving data quality and services in all

SOFs as well as continuing to improve the legal framework by studying international best

practices. The valuation procedures and software developed and tested under the

Project will be used in other SOFs. RosReestr has its own experienced staff to improve

operations and services. It continues to do so under the Federal Targeted Program

including a second phase starting in 2013 onwards, which is currently being developed by

the Government. RosReestr is an energetic, modern and forward-looking organization

with the capacity to sustain and build on the Project’s achievements to continue its

program for improving land administration. Thanks in part to the Project study tours, it

has become a more outward client focused organization, with a better understanding of its

clients’ needs and desire to meet those needs, including through provision of information.

A move to a self-financing status would give it greater financial autonomy and possibly

avoid some of the restrictions on financing imposed by the Federal Government, such as

restrictions on training budgets.

Performance indicators by which the Project can continue to be monitored and evaluated

in the coming years are along the lines of those in Annex 3 to the PAD – reduced time

and steps in the registration process, better information exchange and access, increased

client satisfaction, access to more and better information for clients, and higher staff

productivity. The CA monitoring system continues in place, and the Registration Project

requires client service surveys to be conducted. The Registration Project shares or has

similar indicators to those of the Cadastre Development Project. Additionally, the success

of component 3 on valuation methodology will facilitate the introduction of a modern

property taxation system, planned by the Government to begin in 2013. Applying

international valuation standards and using mass valuation improves the reliability of the

valuation system, and the appropriateness of the values it produces, and its ease of

operation and acceptance when it is introduced across the country

Follow up by the Bank is in place through the Registration Project. The activities under

that project were originally planned to be combined with those under the Cadastre

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Development Project. Activities under the Registration Project, which is due to run to

May 2014, are building on the outcomes of the Cadastre Development Project and should

result in further operational improvements of the kind already achieved. Specifically, the

Registration Project seeks to provide clients with greater and better information, improve

client satisfaction, reduce the time for registration, and improve staff skills and

productivity. These are very similar to the indicators under the Cadastre Development

Project, and they reflect the fact that the two projects were prepared together and deal

with similar services. Now that RosReestr is responsible for both cadastre and rights

registration work, and staff have wider responsibilities, the Registration Project should

support the reform momentum and sustainability of the results already achieved. The

extent to which this is the case can be monitored over the next three years of the

Registration Project and in a follow up evaluation two to three years after the Registration

Project has closed.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

Improving land administration through a reliable and efficient Cadastre system has been a

high priority for the Government throughout implementation and remains so at

completion. The Country Partnership Strategy for 2007-2009, which was extended to

2011, is built on four pillars – sustaining rapid growth, improving public sector

management and performance, improving the delivery of social and communal services,

and enhancing Russia’s global role. The Project has provided firm support for sustained

economic growth through improved information flows, greater certainty and consistency

of processes and outcomes, and improved transparency and efficiency of the land

administration system. Opening the market for technical inventories to the private sector

and removing the obligation to obtain a technical inventory for secondary transactions

(sale, mortgages, etc.) removed restraints on market operation and efficiency.

The Project promoted public sector management and performance through improvements

to operations, resources, training and management. The Project has even contributed to

improving the delivery of social and communal services by providing more reliable and

accessible property data that governments need when planning and delivering services in

the physical setting. Further, the system for property valuation, which is linked to tax

collection, should provide a basis for collecting taxes that fund local government

services. Thus, the Project’s objectives had high overall relevance throughout.

In retrospect, the positive outcomes verify the relevance of the design and

implementation of the Project despite initial questions regarding splitting the initial idea

of having the Project address both Cadastre and registration services. The Project was

then timely in terms of responding to the CA commitment and to the Government’s

desire to continue dialogue and improvements to the sector despite internal

inconsistencies that needed time to be resolved on Russia’s own terms. The team’s

support, based on ongoing experience in Europe and Central Asia region (ECA), for the

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Government’s insistence to have CA’s specialized IT arm to continue to take the lead in

developing and updating software paid back handsomely in time and funds as well as in

supporting and enhancing the capacity of the very important IT function in land

management and the CA.

3.2 Achievement of Project Development Objectives

The PDO was to improve the information flow and to rationalize the normative and

operational procedures for the cadastre system. In doing so, the Project was to:

Facilitate the development of real property markets;

Improve the quality of services provided by CA offices; and

Strengthen linkages with other related organizations, including rights registration

offices, tax authorities and municipalities.

The Project focused on the improvement of the quality of services through the review and

rationalization of existing procedures. In the process, unnecessary and sometimes costly

steps were removed (e.g., the requirement for a survey for secondary transactions was

eliminated). The average time clients spent to obtain cadastre information, to obtain a

cadastral survey or to complete a transaction in immovable property was reduced by

almost half in all cases. This was accomplished through the cadastre offices acting as one

stop shops, eliminating the need for clients to coordinate between offices (previously

with BTIs) and providing clear information and queuing services in the offices. The

CA’s IT strategy aimed to integrate the cadastre (and now registration) offices vertically

across all SOFs as well as to integrate horizontally cadastre and registration with other

government offices such as municipalities and taxation offices. This was accomplished

in legislative procedures as well as the IT system, and further strengthened with the

integration of the services in one agency. Further work is expected to continue for the

proposed National Spatial Data Infrastructure to provide data access to society at large.

With regard to the development of real estate market, it is difficult to directly attribute the

impact of the Project on real property markets given the many other factors that impact

such a market as the recent financial crisis has shown. Nevertheless, the Project

facilitated this development by simplifying procedures and improving transparency and

accuracy. The Project was timely in responding to pent up demand for property

transactions (sales, leases, inheritances) and provided the means for implementing these

transactions in a more secure and trusted modern system. More than half of one million

information requests were processed in 2011 above the figure for 2007 and reflect the

increased demand for the services of the CA in response to developments in the property

market.

The Project was also to achieve seven intermediate outcomes. Some of these objectives

were fully achieved or surpassed, while others were partially achieved since they did not

meet the targeted level. The Project managed to significantly improve the information

flow through analysis, software design and development, acquisition of software and

hardware, and implementation and accompanying training. Time for processing new

property surveys was reduced from 2 months to 1 month, but did not reach the target of

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two weeks. The requirement to obtain a cadastral survey for secondary transactions was

costly, cumbersome and unnecessary. This step was removed, but was not sufficient to

reach the target of removing 2 out of the 4 steps. The target of increasing productivity of

staff was not met, staff numbers increased in some years, and the learning curve for the

new system was sometimes blamed for the decreased productivity in these years. Targets

fully met include the property valuation pilot; in the area of developing and testing

valuation software, the Project far exceeded original expectations by including Moscow

city in the pilots, which resulted in another five million properties being valued, and by

funding an extensive socio-economic study on property taxation. Overall, by 2011, a

modern, centralized system for acquiring and disseminating cadastre data existed in all

SOFs supported by the Project and in most of the remaining SOFs. The normative and

operational procedures were reviewed, (re)designed and implemented. A clearer, more

comprehensive legal framework and more sophisticated operational procedures had been

created, which made processes more predictable, certain and transparent.

3.3 Efficiency

The economic analysis of the project outcomes follows the approach adopted in the PAD,

where time savings were calculated for (a) processing transactions; (b) visits to Cadastre

offices. Additionally, monetary savings from eliminating the survey requirement in

secondary transactions were also calculated. Other benefits due to faster access to more

reliable data by investors, real estate professionals and other government agencies are

more difficult to quantify. While the PAD did not calculate an ERR or net present value

(NPV), this analysis shows that the Project resulted in an NPV of US$132 million during

the life of the Project. If the Project benefits continue for 15 more years, NPV would be

US$692 million assuming a discount rate of 10%, and an ERR of 24% is achieved.

(Annex 3).

During the life of the Project (2006-2011), approximately 122 million transactions of

various types were recorded in Russia, and the Project covered about 45% of CA offices.

However, some benefits of the Project (streamlined procedures, regulatory changes,

software development) accrue to all the CA offices. It is difficult to attribute the increase

in transactions processed solely to the Project’s success because property markets are

influenced by many other important variables in the economy that cannot be isolated.

However, we can attribute the savings in specific efficiencies due to Project activities as

well as savings to the client due to elimination of the technical inventory for secondary

transactions requirement.

In terms of increased efficiency, the PAD notes that savings in transaction times, fewer

visits to the Cadastre Agency (CA) offices, improved efficiency of staff members and

shorter times spent by clients at the CA offices would be expected outcomes of the

project activities. The Project results validate and exceed the PAD assumptions: the

reduction in the average time for processing new property surveys by the Cadastre

Agency decreased from 1 month in 2007 to 20 working days in 2011. The average time

for completion of transactions in immovable property reduced from 35 days and 29 days

in 2007 to 19.6 days and 19.4 days for individuals and legal entities, respectively. There

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was reduction of 9 minutes in the average time a client spends in the Cadastre Agency per

visit from 57 minutes in 2007 to 48 minutes in 2011; a reduction of 36.8%. Compared to

2004 data when the client spent an average 120 minute each visit, there was a 63.8%

reduction in time spent at the CA. The average wage rate of $810 per month was used to

monetize these savings (July 2011 Rostat/Russian Economic Report).

The requirement for a technical inventory for secondary transactions, which was the stage

eliminated, amounted to large savings for members of the public. Costs for technical

inventory increased from USD 20-50 at the time of appraisal to a reported USD 160 for a

building and USD 270 for land (in the Moscow area). Using a conservative estimate of

USD 50, and assuming that only five percent of those transactions are related to

secondary transactions, then a minimum of USD 67.5 million were saved in 2011 alone

from the elimination of the technical inventory requirement. Multiplied across the life of

the Project, the figure rises to nearly USD 340 million saved during the life of the project

arising from the elimination of technical inventory.

There are other benefits associated with improved access to cadastral information that are

more difficult to quantify, including the savings by other public and private users of

cadastral data who now have faster access to more reliable data for important investment

or policy making decisions as a result of Project activities. The number of information

requests increased 60% from 916,155 per year in 2007 to 1,463,974 per year in 2011.

Investments in Cadastre and registration systems improve access to finance and other

investments in the housing market for example. RosReestr introduced online access to

certain information, which was facilitated through Project sponsored software, hardware

and communication systems. Since the introduction of this on-line access in mid 2010,

daily requests have risen to 6,000 and continue to grow rapidly. The Project has laid the

foundations for further expansion in formation and access to spatial data for

improvements in urban and spatial planning as well as other e-services. The government

has recently allowed financial institutions to accept electronic documents, and it is

expected that notaries in Russia will soon follow suit in line with the modernizing trend

of reliance of e-documents and transactions throughout Central and Eastern Europe. It is

also expected that removing services from local offices to the central Oblast level office

has diminished opportunities for corruption.

3.4 Justification of Overall Outcome Rating

Rating: Satisfactory

The development rationale for the Project remained highly relevant throughout

implementation and continues to be relevant under the proposed 2012-2016 Country

Partnership Strategy (CPS). The CPS includes continued support to the Government’s

efforts to improve management of public finances, investment climate and innovation as

well governance through higher transparency, accountability and improved service

standards – themes that are also inherent in the Project.

The Project succeeded in delivering the activities planned, and in some cases did more

than was planned, particularly in terms of valuation pilot work. The Project assisted to

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put in place legal and operational frameworks, supplied state of the art hardware and

software, introduced measures to improve clients’ experiences and perceptions of the CA

offices, and raised the professional skills and knowledge of many staff. As a result,

greater efficiencies were introduced to the operation of the property market, information

flowed more easily and quickly, and services were improved. Further, the Project’s

outward focus on linkages with other agencies facilitated the merger of the CA and

Rights Registration Services (RRS) in 2008. The Project helped to create a launching pad

for RosReestr to move to a modern Cadastre system, comparable to those found in

Europe. And component 3 has created a reliable and effective foundation for a market

based property tax.

However, there were some shortcomings in achieving some indicators, largely due to the

disruption caused by the merger. There are largely no shortcomings in the Project’s

achievement of its objective, in its efficiency, or in its relevance. The Project managed to

achieve these results and outcomes for what is, in a country of the size of the Russian

Federation, a relatively small sum. This investment has ensured large current and future

savings, and it has delivered the infrastructure for delivering sizeable future fiscal gains.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

The Project did not specifically target these social objectives. However, given the very

high levels of private ownership of dwellings in the Russian Federation (over 70%), the

Project’s many positive outcomes have flowed across the nation. Overall, the Project

contributed to facilitating the development of the real property market by providing

security of ownership and making it easier to transact property. In addition to improving

the climate for investment, the system will facilitate citizens’ access to the liquidity

through their properties, and use this liquidity for other more productive needs.

(b) Institutional Change/Strengthening

The provision of the new information technology and communication systems facilitated

the Government’s centralization program, which has changed the nature of how

RosReestr does business, and created an environment of reform and greater possibilities.

The move to centralized processing has raised standards nationally and made RosReestr a

more robust organization. The new subsystem has permitted innovative managers and

staff to develop new or better services in addition to those envisaged under the Project,

such as the online services introduced in 2010.

A further factor in terms of institutional change has been the development of a greater

client service focus. In addition to Project funded reforms, RosReestr has sought to

improve clients’ experience through renovated client areas, more respectful attitude to

clients, better information and more services. These changes have also improved working

conditions for staff, as clients are more informed and better able to ask for specific advice,

thus encouraging a more cooperative approach. Further, it appears that the Project’s client

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surveys of 2007, 2008 and 2009 may have reinforced this cultural change, and it is

encouraging to see that RosReestr used its own funds for the 2011 survey and plans to

continue with such surveys. Overall, management and staff see clients in a more

receptive and accommodating light.

A major factor-giving rise to the improvements and changes of attitude has been the

foreign study tours in which managers and staff were exposed to new ways of operating

and serving clients. Building on an open and receptive attitude to international experience,

the exposure to foreign systems challenged old ways of doing business while opening

new horizons, particularly in newly developing areas such as national spatial data

infrastructure. Participants became aware of positive trends in Europe and elsewhere.

Also, the tours and conference attendance has assisted the Russian Federation in

becoming more integrated in the international land administration community.

(c) Other Unintended Outcomes and Impacts (positive or negative)

The merger and integration of the Cadastre, Registration and Cartography services was

not planned in the Project due to the difficulty of influencing through the Project a

decision with complex political-economic background. Nevertheless, discussions on the

structure of land related services with the Bank, as well as through training and visits,

continued during implementation. The Government’s decision to integrate the services

had a major positive outcome that strengthened the PDO. Among the benefits cited by

the Government and experts of a unified Cadastre agency are: (a) establishment and

reference to one data set, one data source, and a one stop shop for customers therefore

avoiding duplication of efforts or contradiction in data; (b) a standardized and integrated

ICT architecture where new modules and services could be added more easily; (c)

integrated maintenance and upgrading with lower costs leading to a system that is easier

to run and update; and (d) integrated facilities (buildings, equipment) with lower capital

and operational costs. On the other hand, it is noted that with a unified agency, more

attention is needed to ensure checks and balances are in place when the administrative

and legal duties are also integrated.

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

There was no beneficiary survey or workshop at the end of the Project.

4. Assessment of Risk to Development Outcome

Rating: Negligible to low

The Project achievements of improving information flows, clarifying the regulatory

environment and improving operations are fully integrated into RosReestr and its

operations. They have assisted RosReestr to achieve the outcomes of the Federal

Targeted Program, particularly in relation to centralization. The integration of Project

achievements into RosReestr’s operations follows directly from the nature of the Project

– it was an integral, although small, part of the agency’s activities and operations. The

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Project was located within a larger program in an administrative unit that was working

towards the same type of outcomes as those envisaged in the Project. Given the

Government’s strategy for land administration and RosReestr’s mandate to implement

that strategy, it is hard to imagine changes that could be detrimental to the ultimate

achievements of the Project’s development outcome, other than the Government

abandoning altogether its plans for a modern, efficient land administration system that

facilitated market activity. The chance of such a departure from current policy is

negligible. Increase in property prices, an expanding mortgage market, advances in

technology and greater integration both in Europe and the global economy will only

support the current path that the Government and the Project have pursued.

The only potential risk relates to the need to replace and update equipment and systems,

which are almost fully utilized now. This risk has been recognized by RosReestr and

provision for funding is included in RosReestr’s budget. Thus, overall, the risk to the

development outcome appears to be low.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry: Satisfactory

As noted previously, the Bank team was well experienced and knowledgeable, and

applied a successful model to local conditions. The team worked closely with equally

knowledgeable counterparts to tailor Project activities to meet the PDO. There were

economies of scale in developing the Project as several team members were involved in

the LARIS project.

Perhaps the only criticism would be that preparation was expensive and time consuming:

almost US$500,000 was spent on preparation (according to the PAD) and there were

eight missions from identification to pre-appraisal, although the missions were joint

missions with the LARIS project.

(b) Quality of Supervision: Satisfactory Bank supervision missions visited on a regular basis. They generally provided

appropriate and well-targeted supervision, advice and observations. Issues requiring Bank

attention, including the merger and critical procurement items, were attended to. In

dealing with the merger, the Bank team was constructive and accommodating, and

facilitated the extension. The Bank team closely monitored the fiduciary aspects of the

Project through semi-annual reviews.

Greater attention and follow up actions were needed to ensure meeting the indicator

targets in Annex 3 to the PAD. Several reforms were delayed in 2008/2009 and greater

pressure from the Bank team could have helped re-focus RosReestr on meeting those

targets.

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(c) Justification of Rating for Overall Bank Performance: Satisfactory The Bank’s performance was adequate to the tasks and facilitated the success of the

Project.

5.2 Borrower Performance

(a) Government Performance: Satisfactory The Government provided firm and prompt support to the Project. As the Project

supported the Government’s own strategy, there was a strong commitment through the

design and implementation phases. Regulatory changes were adopted relatively quickly.

While the Government’s decision to merge the CA and RRS caused some delays and

revisions to established procedures, administrative changes of this kind are not

uncommon elsewhere in the land administration sector. Ultimately, the Government’s

decision to integrate these services was in line with best practice yielding substantial

long-term benefits. The Government continues to support and cooperate well with the

Bank under the Registration Project.

(b) Implementing Agency or Agencies Performance: Satisfactory The activities under the Project were well designed and implemented by the CA and then

RosReestr. The CA established thematic groups for each of the areas addressed by the

Project. The thematic groups consisted of members knowledgeable of the subject and

were responsible for drafting terms of references for studies and supervising the quality

of the consultant work to ensure they are responsive to the Government’s needs and

vision for land administration in Russia. As noted, the agency had the vision, capacity

and determination to implement the Project, and cooperated with the Bank to ensure that

the Bank’s requirements were addressed. The PIU included sufficient number of qualified

procurement specialists. There were no major violations of procurement rules found

during post review missions. Goods and services were delivered on time, and related

payments were effected fully and on time. The Project was rated as satisfactory over the

entire period.

(c) Justification of Rating for Overall Borrower Performance: Satisfactory The Government, the CA, and RosReestr performed well in designing and implementing

the Project. This is partly due to the close alignment between the Project’s PDO and the

Government’s strategy to create a modern land administration system. The design and

implementation of the Project relied on the specific expertise in RosReestr that dealt with

the subjects through the thematic groups. These groups also provided the commitment

and continuity throughout the Project preparation and implementation. The majority of

the Project indicators were met due to reforms introduced either by the Government or

agency, and the individuals involved in the Project were enthusiastic and very capable.

While changes in personnel and the integration created some disruption in capacity and

focus, the agency returned to the tasks of implementation relatively quickly.

6. Lessons Learned

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Government Commitment, Strategy and Institutional Change. The Bank team adapted a

tried and tested successful model of land administration projects to the realities of the

Russian Federation. In this case, the Bank trusted the commitment of the CA and the

Government’s support for the land administration strategy, and agreed not to wait for

further reform on the structures of the responsible agencies (i.e. integration of land

administration services as a condition for the Project). The Bank therefore agreed to split

the original idea of the project to address both the Cadastre and registration services, and

went ahead with the Cadastre Development Project, which was ready for implementation.

The Registration Project was delayed, approved in 2006 and became effective in 2008.

The Bank agreed that Russia needed time to sort out the restructuring but needed not

delay the start up of implementation of the strategy. In this case, rushing significant

institutional change in a country as complex as Russia would have caused major delays.

Discussions on the best model for the agency continued during implementation, and more

importantly through training and study visits while other internal discussions were taking

place. Where the commitment for the strategy on the part of the Government is clear,

such an approach would yield better and timely results.

Single vs. Separate Land Administration. The Russian Federation selected the single

agency model for land administration. This is an approach that was recommended by the

team based on its experience in the ECA. The study visits provided the government

counterparts with practical experiences and exposures to the different types of agencies

and helped them to make their decisions.

IT and Software Development. In high capacity countries such as Russia, the Bank team

was correct in supporting the Government’s strategy on implementation of the IT strategy.

This is particularly clear when the Bank agreed during preparation that the CA’s existing

specialized IT department should continue to be responsible for the development,

upgrading and installation of the software. The team’s experience in other countries led

to this support. This approach was responsible for savings in time and funds as well as

sustained and improved technical capacities in the CA. The alternative of introducing an

outside software developer firm would have required more time to study and understand

the existing system and would not have likely led to the increased capacities and

understanding of the system, not to mention the longer time needed for an outsider to be

recruited. The Bank should make clear the conditions of utilizing existing IT

departments to avoid delays during implementation due to Bank procurement rules that

favor competition.

Bank-Russia dialogue. The majority of the loan funds were provided for hardware and

software purchase and installation. The amount of the loan was only a small portion of

the Government’s targeted program for land administration. The strategy and direction

of the Project were already selected by the CA and the government. The Bank’s role was

to provide advice, dialogue and a menu of alternative approaches to be studied and

selected by the Government. The experience of the Project indicates that Government

counterparts are more interested in the intellectual support, training, exchange of

experiences and implementation discipline through clear guidelines and monitoring, as

provided by the Bank’s project, than in the funds that the Bank can provide. This is

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becoming more evident in the overall Bank’s relationship with Russia and other countries

in the ECA region, where fee based services and knowledge exchange are becoming as

important as lending in the country programs.

Bank flexibility on Closing Dates. The team’s support for the merger and the consequent

Bank agreement to extend the loan closing date to accommodate the merger and the

adjustments needed of the legal and software development contracts was the right

approach that was highly appreciated by the Government. At the end, and despite delays

and lack of complete clarity, the Bank remained a partner in the advice and in the

Government’s correct decision to merge the related services for the long-term benefit of

RosReestr and its clients.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies The Borrower decided not to provide any comments.

(b) Cofinanciers

(c) Other partners and stakeholders (e.g. NGOs/private sector/civil society)

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Annex 1. Project Costs and Financing

(a) Project Cost by Component (in US$ Million equivalent)

Components Appraisal Estimate

(US$ millions) Loan Funds

Actual/Latest

Estimate

(US$ millions) *

Percentage of

Appraisal

I. Institutional Development of the

Real Estate Cadastre 8.178 6.137 75

II. Cadastre System Interrelations 102.696 98.268 96

III. Real Estate Taxation

Development 13.506 14.121 105

III. Project Management and

Monitoring 4.590 4.612 100

Total Baseline Cost 128.970 123.138 95

Front End Fee 0.500 0.500 100

Total Project Costs 129.470 123.639 96

Total Financing Required 129.470 123.638 96

* As of November 2011

(b) Financing

Source of Funds Type of

Cofinancing

Appraisal

Estimate (US$ millions)

Actual/Latest

Estimate (US$ millions)

Percentage

of

Appraisal

Borrower Joint 29.47 24.063 82

International Bank for Reconstruction

and Development Joint 100.00 99.575 99.6

Total 129.47 123.638 96

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Annex 2. Outputs by Component

Component 1. Institutional Development of the Real Estate Cadastre.

This component consisted of four sub-components:

1A. Improvement to the Legislative and Regulatory Framework

The objective of this sub-component was to establish a regulatory framework more

conducive to the operation of real property markets, through development of a set of draft

laws, amendments to laws, regulations and manuals that would facilitate efficient and

secure market operations.

The output of this sub-component was a lengthy set of draft regulatory materials. These

were developed under the CA’s, then RosReestr’s, thematic group on Development of

Regulatory and Legal Framework. The work was assisted by external consultants, over a

23 month period from March 2008. Work was suspended during the period of the merger

with the RRS to assess the new organization’s needs, and thus work was finalized in the

second half of 2010. The contract was primarily aimed at developing implementing

regulations, as the key law regulating this field – the Federal Law “On the State

Immovable Property Cadastre” (No. 221-FZ) – had been adopted in July 2007. This law,

which was implemented by January 1, 2010, required many regulations, and the Project

funded the drafting of some 24 draft regulatory documents to meet this need.

The draft regulatory documents were submitted through RosReestr to the MOED, which

is the body responsible for legislative activity in this area. Three of the draft documents

were divided into separate documents by the MOED, so that ultimately there were 29

documents. Of these, 22 were in the form of orders of the MOED, four were resolutions

of the government, one was a draft law and two were ultimately not required. By July

2011, 16 of the orders and government resolutions had been adopted, with the remainder

still being considered by the MOED.

The adoption of these regulatory documents has resulted in greater clarity and certainty in

the law regarding the details and implementation matters under Federal Law No. 221-FZ

in the areas of:

surveying and measuring properties, establishing boundaries;

preparation of plans and related documents;

the format of information produced by RosReestr;

rules on submission of electronic applications; and

the transfer of data into the real estate cadastre.

In addition to the contract to draft regulatory documents, the CA and RosReestr have

pursued improvements to the legal framework over the Project period through the

thematic working group responsible for legislation. Key amongst these was the Federal

Law No. 221-FZ, which established the broad legal framework for the cadastre, and also

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included provisions for licensing surveyors, greater automation and e-services.

Legislative advances were also made in areas such as the elimination of the requirement

for a technical inventory for secondary transactions, as noted above.

The overall outcome for this sub-component is firstly, greater clarity and certainty as to

the rules and requirements for using and operating the cadastre and registration system.

This assists in delivering uniform services and ensuring predictable results for clients.

Further, removal of some restrictions (such as on private surveyors) and obligations (such

as the requirement for technical inventory) have freed up the market. Thus, sub-

component 1 has delivered positive outcomes in terms of transparency, security and

market efficiency.

1B. Transformation of the Land Cadastre to the Real Estate Cadastre

This sub-component consisted of two parts – (a) re-engineering of existing software to

improve links between CA offices and other institutions at the local, regional and federal

levels, resulting in detailed terms of reference for the development of the main cadastre

communication system; and (b) development of a strategy and business plan for

implementing the new information and telecommunications systems.

Work on part (a) – improving links between the CA and other local, regional and federal

institutions - was undertaken in 2007-2008 to diagnose, review and make proposals for

changes to the procedures and software. The consultants prepared a set of proposals

covering organizational and regulatory matters, software, hardware and training. Results

of this sub-component were incorporated into the software development and

implementation work under component 2, particularly 2B (see below). As part of this

contract, a comprehensive training needs assessment was also undertaken, as the

proposed system would result in significant changes in the organizational structure,

functionality and skill required at all levels of the organization. The assessment was to

inform the CA of the changes required and to assist in identifying staff with the skills for

re-assignment, as well as provide the basis for future training courses. Although not

designed for this purpose, the assessment became useful in managing the 2008 merger of

the CA and RRS.

Work under (b) – development of strategy and business plan for the IT systems – resulted

in the adaptation of Government Decision of September 13, 2005 No. 560 on adoption of

sub-programs on immovable cadastre system (2006-2015) and within the Federal

Targeted Program on the creation of automated system for the land cadastre and the

immovable cadastre (2002-2008) to the new requirements of the merger of the cadastre

and registration services. The final outcome after the merger was a new ICT strategy

approved by MoED (No. 534/December 18, 2009) in the “Concept of Creation of an

Integrated Federal System of State Registration of Real Property Rights and State Real

Property Cadastre. The IT strategy is continually monitored and adapted to new

developments and needs of IT in the cadastre and registration services.

1C. Development of Services for Clients and Authorities

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This sub-component sought to improve the quality of services delivered to clients through

the provision of information in the CA offices, particularly through improved client

services areas with notice boards and pamphlets and also through a series of publications.

By May 2008, improving clients’ conditions had progressed well using the CA’s own

funds. Every office visited by the mid-term review missions and subsequent supervision

missions achieved good standards for client reception facilities, provision of information,

organized reception procedures (including ticketing systems) and work flow procedures

that would minimize opportunities for corrupt practice. Other innovations related to the

renovations included the use of queue ticketing machines, provision of desks and seating,

provision of cash machines and banking services, and standardized signage. As this

activity was undertaken using government funds, no Project funds were required. To the

extent that there was information produced for the public, this too was provided under the

budgets of the CA and RosReestr.

The main activity under this sub-component was the development of a strategy for

providing client services. Under a contract dated September 2007, the consultants

developed a “Strategy for Enhancing Quality and Growth”, which covered improving

services for clients, internal processes, finances and staff knowledge and skills. Specific

proposals were presented to achieve improvements in each of these areas covering:

reorganization of processes for serving clients;

information structures and content for different categories of clients;

dissemination of information for different categories of clients;

changes to the legislative framework;

management and organizational change; and

establishing benchmarks for service.

Many of the consultant’s recommendations were accepted and incorporated in the new

software system.

1D. Improvement of Professional Skills of the Real Estate Cadastre Staff

The aim of the sub-component was to upgrade the knowledge of the CA staff, including

in relation to new activities and new software envisaged under the Project, and thus

provide better and more efficient services.

The outputs were as follows:

over 2008-2009, 1872 specialists of the CA were trained under the main training

contract in eight courses covering legal matters relating to cadastre and

registration, technical matters, corporate ethics and client service, software

operation and valuation;

from 2008 to 2010, 331 specialists were trained under other smaller, separate

contracts;

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from 2006 to 2009, 297 specialist received training by means of 23 international

study tours, conferences and seminars. The study tours are discussed further

below.

Thus, a total of 2,500 people were trained under the Project. The number would have

been slightly higher but the MOF suspended all study tours from 2010 onwards as part of

cost saving measures. Training sponsored by the Project complemented training provided

by the CA and RosReestr under their budgets, so the above numbers indicate only a part

of the training supplied to staff.

The Project sponsored the creation of eight technical training courses for specialists of

the CA. Training courses were conducted face-to-face in four regional training centers

across the country which had been established under the LARIS Project. The Project

supplied not only the training courses and associated materials, but also supplied

computers and other equipment (projectors, electronic whiteboards) for 11 training

centers. Participants’ responses to the questionnaires issued after each course were rated

to be highly positive.

The Project funded the creation of a distance learning system. By the end of 2008, an

extensive set of training materials had been made available on the RosReestr intranet, and

training of trainers was completed. The topics covered law, cadastre operations, valuation,

planning, archiving and preparation of reports. A comprehensive training needs

assessment was undertaken to address current skills and knowledge, and to identify future

training needs.

Study tours, conferences and training courses took participants to Australia, Austria, Italy,

Lithuania, Netherlands, Spain, Sweden, UK and USA. Topics included:

structure, function and information content of overseas property cadastre systems;

comparative analysis of existing systems and technologies;

analysis of various overseas real estate appraisal systems taxation, cadastral

appraisal of land activity; the institution of tax appraisal;

international systems of legislations regulating land cadastre maintenance and

land law; legislative regulation of relations between central and local government

authorities in the area;

modern technologies of mass training; remote training; electronic textbooks and

computer training programs;

international experience in cadastral information automated systems; maintaining

E-archives; protection of information;

providing client information and services;

modern technologies for forming and developing professional competency with

the staff of cadastre bodies; and

project management, financial management and procurement.

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The participants were required to provide a report of their findings and each hosting

organization was required to provide detailed information. As a result, a large body of

information and experience has been collected and is available on the RosReestr intranet.

The outcome of the training activity has been an increase in the knowledge and

understanding of not only the Russian system but international systems, particularly

European systems. A large body of material serves as a resource for future needs, and the

distance training system will provide low cost training opportunities for regional staff for

many years. Most importantly, training has equipped staff to operate the new software

and communications systems, which have greatly improved the flow of information.

Training has helped to improve uniformity and predictability of services and results, and

a knowledge base has been created for future development of the system along the lines

of international best practice.

Component 2. Cadastre System Interrelations

There were two sub-components under component 2, as follows:

2A. Development of the Information and Communication Subsystem

This sub-component was allocated the bulk of Project funds, although it represented only

a small supplement to the CA’s own budget. The objective of the sub-component was to

develop several applications for information exchange between offices and to acquire the

communications infrastructure, hardware and software licenses necessary to implement

the improved system, and also to provide shelving for paper archives. The aim was to

deliver rapid and efficient access to cadastre information from any part of the country, as

part of the program of centralizing CA operations, thus facilitating market operation and

property tax implementation.

Under the centralizing program, all CA services for a SOF (oblast/republic/city/etc.) were

to be performed at one location in that SOF, with the local rayon level offices providing

front office services (lodgment, collection, archiving). All processing was to be

performed at the SOF center, with applications being received and results being

dispatched electronically to local offices. This system is now largely in place across the

country.

The primary outcome of this sub-component was, as described in the PAD, the

development of software and the acquisition of hardware and software licenses. Software

was developed to improve the automated information system of the real estate cadastre

and the document management system under relatively small contracts. Equipment and

licenses were covered by six of contracts to a value of approximately US$80 million. The

equipment and software were installed in the 40 regions under the Project at the CA

regional center, the Land Chamber and the rayon level offices (the number of which

varies from region to region). The Project funded over 500 servers, 5,300 monitors,

17,200 IP phones as well as printers, plotters, scanners and communications equipment.

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As a result of activities under the sub-component, RosReestr was able to implement the

program for centralizing operations in all the SOFs covered by the Project. As envisaged,

Project activities have greatly improved information flow and communications, and the

program for centralizing services for each SOF has improved quality of service,

consistency and predictability of outcomes, which are factors in increasing transparency,

security and market efficiency. Citizens can now obtain cadastral information for

properties in any part of the country from their local office. The transfer of operations

from local offices has also removed some opportunities for petty corruption.

Shelving was acquired for only one office. As the Registration Project, which came under

RosReestr’s jurisdiction in 2008, has a substantial focus on archives and their

management, paper archiving is being addressed using funds from that project.

2B. Information Exchange with Systems for Registration of Rights

Sub-component 2B sought to develop an application to link the MOJ’s RRS with the

CA’s cadastral system, introducing remote access to information and thus making the

operation of the two agencies and the real property market more efficient.

The primary activity under this sub-component was to be the development of software

linking the two systems. With the merger of the CA and RRS in 2008, the organization

circumstances changed, but the need to link the two systems had not altered – in fact, it

became more urgent and important. Under one main contract, an automated system for

linking the CA and RRS was developed over four stages. The contractor developed and

tested the software, and conducted training in its use.

The work under this sub-component has laid the foundation for the full operational

merger of the cadastre services and rights registration services. As noted above, a

combined cadastre and rights registration authority is consistent with best practice; this is

primarily due to increased efficiency and greater alignment between the records of a

property’s identity and rights associated with it, particularly in paper based or transitional

systems.

Component 3. Real Estate Taxation Development

This component sought to facilitate the introduction of a value based tax on real property,

thus providing revenue to local government, through introduction of (a) a system of mass

appraisal of property; and (b) a market monitoring system to benchmark property

appraisals. The appraisal system was to be tested in four pilot areas during the course of

the Project. The Government financed the introduction and testing of the valuation

program in 7other areas of the country, and rolling out the systems nationally is planned

to be completed by 2013 and prior to the introduction of the property tax law.

The results of component 3 were:

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development of software for computer assisted mass appraisal (CAMA), based on

an internationally acceptable methodology, which included training for staff in the

use of that software (there was no hardware component to this contract);

development and implementation of software for a market monitoring system;

testing the CAMA system in four pilot areas (Tver, Kemerovo, Kaluga, and

Tatarstan) as well as in Moscow, based on property details provided from BTI

records to produce property values;

training of staff from 140 administrative units in the valuation system;

a socio-economic study of the impact of a new national property tax, which was

not in the original Project design; and

advice from supervision missions on implementing the system across the country

in 2013 in accordance with government plans.

Due to the importance of Moscow City, it was agreed that it would be added to the pilot

sites in 2010 using reallocated Project funds. By mid 2011, some four million properties

had been valued in the regional pilot areas and five million in Moscow City.

The socio-economic study in each of the areas tested was an important additional element

that should help policy makers determine how property taxes will be introduced,

particularly in terms of how the burden will fall. The study is being considered by the

MOF, which has the responsibility to draft the property tax law and set the range of tax

rates. Implementation will be conducted at the regional and municipal level.

Component 4 Project Monitoring and Management

The PAD stated that the CA was to manage the Project and be assisted by a PIU. Project

monitoring was the responsibility of the CA, which already collected some of the

indicators listed in Annex 3 to the PAD. External contracts were to be let for independent

assessments of results.

At commencement, the deputy chief of the Cadastre Agency was appointed as project

director, overseeing a Project coordination unit of five staff within the larger Cadastre

System Design Department (responsible for developing the program to implement the

Federal Targeted Program). Six working groups were also covering various thematic

areas: Development of Regulative and Legal Framework, Organization and Management,

Personnel Development and Training, Cadastre Client Services, Cadastre Infrastructure

Development, Real Property Objects Valuation. There were staffing and management

changes throughout the period of the Project, but as the mid-term review of May 2008

noted, this structure had continued to work efficiently, and changes in personnel were

generally smooth.

The management structure remained consistent to a large part during the implementation

of the Project as follows:

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At the ministerial level, responsibility for the Project rested with three ministries over the

period 2005-2011:

Ministry of Economic Development and Trade (to September 2007); and

Ministry of Economic Development (from 2008 onwards).

For a short period of about 2 months during 2008, the CA was reporting to the Ministry

of Justice. The impact of these changes in ministries appears to have been limited, as the

Project was subordinate to the CA and RosReestr at all times.

The main event in terms of project management was the merger of the CA and RRS to

form RosReesstr. This resulted in a period of interruption while the new organization was

brought together. There were, therefore, some delays in progress (as noted above where

relevant). Otherwise, project management continued without any real interruption, and to

the credit of the RosReestr, the Project coordination unit and the PIU, project activities

were able to recommence and regain pace once the institutional issues began to be

resolved.

The PIU was formed soon after loan effectiveness in December 2005 and was fully

established with two procurement specialists by May 2006. The PIU worked closely with

the CA and RosReestr to manage, implement and report on the various Project initiatives.

FCPF PIU Project Thematic Groups

Тематические группы Проекта

Project Director

Проекта

MinFin of Russia

RosReestr

IWG

Ministry for Economic

Development of Russia

Evaluation Committee Projects and Targeted Programs Department

Heads of the CA Territorial

Bodies

Development

of the

normative

legal base

Technical

support for the

cadastre

infrastructure

Real estate

objects

evaluation

Human

resources

development

and training

Organization

and

management

Rendering

services to the

cadastre

clients

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The PIU provided regular and detailed reports on progress throughout the Project, with a

focus on procurement and financial management. As noted in the AM of the May 2008

supervision mission, “procurements, financial management and disbursements are

progressing without problems … All financial management reports and audits are

produced on time and payments to contractors and consultants are disbursed without

delay.” The rapid disbursement rate confirms this assessment – it could only have been

achieved with good project management.

Reporting on matters outside procurement and financial management was the

responsibility of the Project coordination unit. As noted in the main body of this report, in

May 2008, the supervision mission made a variety of recommendations to expand the

reports to cover project outcomes based on the results framework of the PAD and

compare the results to baseline figures (see Annex 1 of AM of May 2008). By late 2008,

the reports were complying with these recommendations, and the reports offer a fuller

picture of the Project’s progress. Reports were prepared twice a year.

One contract was let to conduct surveys. Three surveys in 2007, 2008 and 2009 focused

on client experiences, with a supplementary survey funded by RosReestr in 2011 also

considering client experiences plus development of the property market. Other contracts

were let for annual audits and internal monitoring software.

The outcome of good project management was a relatively smooth operation throughout

the project period. A discussion on monitoring and evaluation has been included in the

main body of this report, so will not be repeated here.

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Annex 3. Economic and Financial Analysis

The Economic Analysis of the project outcomes follows the approach adopted in the

PAD. Specifically, this analysis includes efficiency benefits as received by the Cadastre

Agency through reduction in staff time processing applications; and economic benefits

received by the clients of RosReestr through reduction in time spent at the Cadastre

Agency. Benefits also include monetary benefits derived from the elimination of the

technical survey requirement for secondary transactions. There are other benefits that are

more difficult to quantify such as the benefits of increased access to cadastral information.

Benefits are estimated for offices where the Project was implemented (i.e. 45% of all

offices). However, some savings and benefits that arise from project interventions

including legislative reforms (eliminated unnecessary steps in the cadastre process) and

improved information and communication systems accrue to all offices. Benefits accrue

to the general public, the legal and financial sectors, and the government.

Improved efficiencies (time savings)

During the life of the Project (2006-2011), approximately 122 million transactions of

various types were recorded in Russia. It is difficult to attribute the increase in

transactions processed solely to the Project’s activities because the property markets are

influenced by many other important variables in the economy that cannot be isolated.

However, we can attribute the savings in specific efficiencies due to Project activities as

well as savings to the client due to elimination of the technical inventory for secondary

transactions requirement.

In terms of increased efficiency of undertaking transactions, the PAD notes that major

savings in reduced transaction times, fewer visits to the Cadastre Agency (CA) offices,

improved efficiency of staff members and shorter times spent by clients at the CA offices

would be expected outcomes of the project activities. The Project results validate and

exceed the PAD assumptions: the reduction in the average time for processing new

property surveys by the Cadastre Agency decreased from 1 month in 2007 to 20 working

days in 2011. The average time for completion of transactions in immovable property

reduced from 35 days and 29 days in 2007 to 19.6 days and 19.4 days, (for individuals

and legal entities, respectively) respectively.

One of the Project’s main aims was to increase efficiency of the offices at the Cadastre

Center. Each worker is now processing 95 more transactions per year than before; in

2007 the processing efficiency at the Cadastre Agency was 1,322.7 transactions per

worker in 2007 and in 2011 it was 1,417.8 transactions per worker. However, in some

years, staff efficiency dropped for two reasons: (a) increases in staff hired at RosReestr;

and (b) the impact of large organizational changes and introducing new operational and

regulatory changes (learning curve). Compared to 2007 data, staff efficiency increased

by 7% by the end of the Project.

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There was reduction of 9 minutes in the average time a client spends in the Cadastre

Agency per visit from 57 minutes in 2007 to 48 minutes in 2011. Therefore, compared to

2007 data there was a 36.8% reduction in time spent at the CA. Compared to 2004 data

when the client spent an average 120 minute each visit, there was a 63.8% reduction in

time spent at the CA. For all the above time savings, the analysis applies the average

wage rate of $810 per month to monetize these savings, (July 2011 Rostat/Russian

Economic Report).

Savings due to elimination of survey requirement

The requirement for a technical inventory for secondary transactions, which was

eliminated as recommended by the Project, amounted to large savings for members of the

public. Costs for technical inventory increased from USD20-50 at the time of appraisal to

a reported USD160 for a building and USD270 for land (in the Moscow area). Using a

conservative estimate of US50, and assuming that only five percent of those transactions

are related to secondary transactions, then a minimum of USD67.5 million were saved in

2011 alone from the elimination of the technical inventory requirement. Multiplied across

the life of the Project, the figure rises to nearly USD340 million saved during the life of

the project arising from the elimination of technical inventory.

There are other benefits associated with improved access to cadastral information that are

more difficult to quantify, including the savings by other public and private users of

cadastral data who now have faster access to more reliable data for important investment

or policy making decisions as a result of Project activities. The number of information

requests increased 60% from 916,155 per year in 2007 to 1,463,974 per year in 2011. It

is well known that investments in cadastre and registration systems improve access to

finance and other investments in the housing market for example. RosReestr introduced

online access to certain information, which was facilitated through Project sponsored

software, hardware and communication systems. Since the introduction of this on-line

access in mid 2010, daily requests have risen to 6,000 and continue to grow rapidly. The

Project has laid the foundations for further expansion in formation and access to spatial

data for improvements in urban and spatial planning as well as other e-services. The

government has recently allowed financial institutions to accept electronic documents,

and it is expected that notaries will soon follow suit in line with the modernizing trend of

reliance of e-documents and transactions throughout Eastern Europe.

Based on the above approach, the economic benefits far exceed the costs. The calculated

economic rate of return was calculated at 24%, and the net present value of the benefits

realized over a 15-year period is over 692 million USD, assuming a 10% discount rate.

The NPV of the Project during its life exceed 130 million USD. While this analysis is

stylized and simplified, (it is impossible to account for all relevant factors) it is useful as

an estimate on the magnitude of achieved results.

Part B. Fiscal Impact

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The work under the Bank-financed Project included pilot testing for market based

property valuation methodology and regulation. Implementation of the new tax changes

was not included as part of the Project, and the amendments to the law on real property

taxation remains with Parliament. The immediate intention of the government is for the

law to be revenue-neutral. Benefits of improved efficiency and equity in the tax system

may be realized in the future based in part upon the Project's work.

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Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/

Specialty

Lending

Edward C. Cook Sr Land Administration Specialist ECSSD Team leader

Gavin P. Adlington Consultant Land administration

Maria L. Amelina Social Development Specialist SDV Social development

Vera A. Matusevich Operations Officer ECSSD Operations

Alexander Roukavichnikov Procurement Specialist ECSPS Procurement

Alexander Balakov Procurement Specialist ECSPS Procurement

Galina S. Kuznetsova Financial Management Specialist ECSPS Financial

management

Ekaterina Arsenyeva Financial Management Specialist ECSPS Financial

management

Lynn Holstein Lead Land Administration

Specialist ECSSD Land administration

Juan Navas-Sabater ICT Specialist CITPO ICT

Jonathon Krull Consultant Business systems

Nikolai Soubbotin Lawyer LEGEN Law

Joseph Goldberg Sector Manager ECSSD

Supervision/ICR

Samir M. Suleymanov Sr Operations Officer SECVP Team leader

Gavin P. Adlington Lead Land Administration

Specialist ECSSD3 Land administration

Maria L. Amelina Sr Social Development Specialist SDV Social development

Alexander Balakov Procurement Specialist ECSO2 Procurement

Anna-Maria Bogdanova Operations Analyst ECCU1 Operations

Mikhail Bunchuk Consultant IT

Svetlana Valeryevna Hoersch Operations Analyst ECSSD Operations

Svetlana Kleymenova Team Assistant ECCU1 Operations

Jonathan F. Krull Consultant Business systems

Galina S. Kuznetsova Sr Financial Management Specialist ECSO3 Financial

management

Aziz Mamatov Financial Management Specialist ECSOQ Financial

management

Vera A. Matusevich Operations Officer ECSS3 Operations

Paul Munro-Faure Consultant Valuation

Juan Navas-Sabater Lead ICT Policy Specialist TWICT ICT

Alexander Rukavishnikov Procurement Specialist ECSO2 Procurement

Wael Zakout Lead Operations Officer ECSS6 Team leader

Rumyana Tonchovska Consultant IT

Maha Armaly Sr. Urban Finance Specialist ECSS6 Team leader

Neil Pullar Consultant IT

Simon Keith Consultant Valuation

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Robin Waters Consultant Cadastre/NSDI

Irek Smolewski Procurement Specialist ECS02 Procurement/IT

Sedat Bakici Consultant Cadastre/NSDI

Peter Creuzer Consultant Cadastre

Anna Georgieva Country Sector Coordinator ECSSD Country

coordination

Malcolm Childress Sr. Land Administration Specialist ECSS3 Team leader

Anthony Lamb Consultant Land registration

law/ICR

Samantha Ashley De Martino Junior Professional Associate ECSS3 ICR

(b) Staff Time and Cost

Stage of Project Cycle

Staff Time and Cost (Bank Budget Only)

No. of staff weeks US$ Thousands (including

travel and consultant costs)

Lending

FY03 151.36

FY04 161.73

FY05 214.20

FY06 0.02

FY07 0.00

FY08 0.00

Total: 527.31

Supervision/ICR

FY03 00.00

FY04 0.00

FY05 0.00

FY06 102.85

FY07 129.01

FY08 116.59

FY09 133.07

FY10 69.24

FY11 79.20

FY12 (Budget) 36.0 0

Total: 665.96

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Annex 5. Beneficiary Survey Results (if any)

N/A

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Annex 6. Stakeholder Workshop Report and Results (if any)

N/A

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

During the review of the final draft ICR (December 2012), RosReestr provided the

following comments which were incorporated in the final ICR.

1. Intermediate Outcome Indicator 1: Reduction in average time for processing new

property surveys by Cadastre Agency: Current indicator is 4 weeks down from 8

weeks did not meet target of 2 weeks. The law of the Russian Federation

stipulates 20 days (i.e. 4 weeks) and therefore the reduction of 50% of the time is

substantial. In addition 20 days allow for a comprehensive review of survey

documents and better decision making particularly during time of transition to

ensure quality. Time costs were reduced without loss of service quality.

2. Intermediate Outcome Indicator 2: Reduction in number of steps requiring the

client to interact with the Cadastre Agency in connection with the transactions in

immovable property. The current indicator is 3 steps vs. 4 steps at the beginning

of the Project, while the target is 2 steps. It is important to note that the procedure

is set by law, and therefore cannot be changed by RosReestr. It is important to

note however that these steps and procedures are now done in electronic form and

do not require visits or physical exchange of documents, thus saving client and

staff considerable time.

3. Clarification on staff productivity?

4. It was clarified that in addition to the 5 pilot property valuations financed by the

Bank loan, valuation in 7 additional regions were completed and financed by the

Government as originally planned.

5. It is clarified that linkages are established with 50 federal agencies (e.g. Ministry

of Economic Development, Tax authorities, Ministry of Internal Affairs, Ministry

of Communications and transportation – among others) that utilize data from

RosReestr. At the same time RosReestr has immediate access to necessary data

from 14 federal agencies in order to complete and verify responses and

applications related to real estate cadastre. RosReestr also clarified that the

private sector (real estate agencies, developers, commercial banks and notaries, as

well as private citizens) have immediate access to cadastral and legal property

data through RosReestr’s portal.

6. RosReestr noted that 99% of equipment procurement was done through ICB.

RosReestr was pleased with the procedure because it gave clear rules. Russian

firms or local representative of large multinational firms won the majority of the

contracts indicating the existence of a competitive market within Russia for IT

equipment.

7. RosReestr noted that the valuation component will facilitate the understanding

and potential introduction of a modern value based property tax system. However

the final introduction of the system is not the responsibility of RosReestr and was

not part of the Project.

8. Regarding Project Costs.

a. Due to the LA amendment of August 25, 2005 (loan No. 4800-RU) in part

pertaining to reallocation of USD 1.095 million from Category 3 Training to

Category 2 Consultant services, including audit (letter of the RF Ministry of

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Finance of January 13, 2010 No. 01-PD-64/02), the overall amount of the

Institutional Development of the Real Estate Cadastre Component is USD 6.251

million (instead of the previous amount of USD 7.346 million). Besides, because of

the above reallocation of funds, the total amount of the Real Estate Taxation

Development Component increased by USD 1.095 million and reached USD

11.765 million (instead of the previous amount of USD 10.670 million).

b. Given information provided in Para 1 and the fact that disbursements under the

Institutional Development Component amounted to USD 5.208 million, the

disbursement percentage makes 83.3% rather than 100%. Besides, disbursements

under the Real Estate Taxation Development Component amounted to USD 11.117

million, which makes 94.5% of the target.

c. Disbursement under the Cadastre System Interrelations (Cadastre Interaction

Systems) amounted to USD 79.490 million, which makes 101.3% of the initial

target.

d. Disbursements under the Project Management and Monitoring Component

amounted to USD 3.760 million, which makes 99.8% of the initial target.

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Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders

N/A

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Annex 9. List of Supporting Documents

Project Appraisal Document, Russian Federation, Cadastre Development Project, April

14, 2005 Report No 32100 – RU

Loan Agreement, Amendment to Loan Agreement

A Study of the Current Registration System for Real Rights and Properties, July, 2003

Review of the Existing Information Technology Used by Offices, Suitable Analysis and

Elaboration of a Strategy and Plans for Future ICT Development, 2003

Social Survey, 2003

Report on the Legal Framework, September 2003

Report on Business Access to Land, September 2005

Federal Targeted Program: Creation of System of a Cadastre of Real Estate, (2006-2011)

Final Report on the Cadastre Development Project (Borrower’s ICR), 2011

Aide Memoires, ISRs for the Project

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Annex 10. Subjects of Federation in which Project was Implemented

The final list of the 40 pilot Subjects of the Russian Federation to participate in the

Project as outlined in the Cadastre Agency Order of 27.09.2006 № П/0183 provided are:

1-st stage: The Republic of Tatarstan, the Nizhny Novgorod Region, the Moscow Region,

the Samara Region, the Kemerovo Region, the Tver Region, the Rostov Region, Moscow,

the Kaluga Region, the Republic of Bashkortostan, the Kaliningrad Region.

2-st stage: Republic Mordovia, Republic Udmurtia, Chuvash Republic, Krasnodar kray,

Krasnoyarsk kray, Primorskiy kray, Stavropol kray, Khabarovsk kray, Archangelsk

Oblast, Belgorod Oblast, Bryansk Oblast, Vladimir Oblast, Volgograd Oblast, Voronezh

Oblast, Irkutsk Oblast, Kirovskaya Oblast, Kursk Oblast, Lipetsk Oblast, Murmansk

Oblast, Novgorod Oblast, Novosibirsk Oblast, Perm Oblast, Saratov Oblast,

Sverdlovskaya Oblast, Tula Oblast, Tyumen Oblast, Ulyanovsk Oblast, Chelyabinsk

Oblast, Yaroslavl Oblast.

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Petropavlovsk-Petropavlovsk-KamchatskiyKamchatskiy

MagadanMagadan

OkhotskOkhotsk

AnadyrAnadyr

KhabarovskKhabarovsk

Yuzhno-Yuzhno-SakhalinskSakhalinsk

VladivostokVladivostok

BirobidzhanBirobidzhanBlagoveshchenskBlagoveshchensk

YakutskYakutsk

AginskoyeAginskoyeUlan UdeUlan Ude

Ust' OrdynskiyUst' Ordynskiy

IrkutskIrkutskKyzylKyzyl

AbakanAbakan

KrasnoyarskKrasnoyarsk

Gorno-Gorno-AltayskAltaysk

NovokuznetskNovokuznetsk

KemerovoKemerovo

TomskTomsk

BarnaulBarnaul

NovosibirskNovosibirsk

OmskOmsk

KurganKurgan

TyumenTyumen

YekaterinburgYekaterinburg

ChelyabinskChelyabinsk

UfaUfa

Khanty-Khanty-MansiyskMansiysk

SalekhardSalekhard

VorkutaVorkuta

Nar'yan MarNar'yan Mar

MurmanskMurmansk

Arkhangel'skArkhangel'skPetrozavodskPetrozavodsk

KareliaKarelia

NovgorodNovgorodPskovPskov

KaliningradKaliningrad

ChitaChita

Perm'Perm'

SyktyvkarSyktyvkar

KotlasKotlas

OrenburgOrenburg

SamaraSamaraKrasnodarKrasnodarMaykopMaykop

CherkesskCherkessk

VladikavkazVladikavkaz

MakhachkalaMakhachkalaGroznyyGroznyy

NazranNazranNal'chikNal'chik AstrakhanAstrakhan

ElistaElistaStavropolStavropol

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VolgogradVolgograd

BelgorodBelgorod

VoronezhVoronezh

SaratovSaratov

Ul'yanovskUl'yanovskPenzaPenza

TambovTambovSaranskSaransk

LipetskLipetskKurskKursk

OrelOrel

BryanskBryansk

St. PetersburgSt. Petersburg

TulaTula

KalugaKaluga

SmolenskSmolensk TverTver

RyazanRyazan

VologdaVologda

YaroslavlYaroslavlKostromaKostroma

IvanovoIvanovoVladimirVladimir

Nizhny NovgorodNizhny Novgorod

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Cheboksary Yoshkar-OlaKirov

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K A Z A K H S TA N

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C H I N A

M O N G O L I A

UKRAINE

BELARUS

SWEDEN

NORWAY

FINLAND

POLAND

UNITED STATES OF AMERICA

D.P.R.OF

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Gora El'brus(5,633 m)

70°N 80°N 80°N

130°E120°E110°E100°E90°E

50°N

40°N

30°N

60°N

RUSSIANFEDERATION

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

0 200 400

0 200 400 600 Miles

600 Kilometers

IBRD 33470R2

MAY 2009

RUSSIANFEDERATION

OBLAST CENTERS

FEDERAL CITIES

NATIONAL CAPITAL

RIVERS

MAIN ROADS

RAILROADS

OBLAST, KRAI, REPUBLIC, AUTONOMOUSOBLAST, OR AUTONOMOUS OKRUGBOUNDARIES

INTERNATIONAL BOUNDARIES