world bank documentdocuments.worldbank.org/curated/en/...schedule 2, section ii.a.1. the borrower,...
TRANSCRIPT
Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: PAD974
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED LOAN
IN THE AMOUNT OF US$45 MILLION
TO THE
REPUBLIC OF GUATEMALA
FOR AN
URBAN INFRASTRUCTURE AND VIOLENCE PREVENTION PROJECT
December 12, 2016
Social, Urban, Rural and Resilience Global Practice
Latin America and the Caribbean Region
This document has a restricted distribution and may be used by recipients only in the
performance of their official duties. Its contents may not otherwise be disclosed without World
Bank authorization.
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
ii
CURRENCY EQUIVALENTS
(Exchange Rate Effective November 30, 2016)
Currency Unit = Guatemalan Quetzales (GTQ)
GTQ 7.51 = US$1
FISCAL YEAR
January 1 – December 31
ABBREVIATIONS AND ACRONYMS
AECID Spanish Agency for International Cooperation (Agencia Española de
Cooperación Internacional para el Desarrollo)
CIV Ministry of Communications, Infrastructure and Housing (Ministerio de
Comunicaciones, Infraestructura y Vivienda)
COCODES Community Development Councils (Consejos Comunitarios de Desarrollo)
CODEDES Departmental Development Councils (Consejos Departamentales de Desarrollo)
COMUDES Municipal Development Councils (Consejos Municipales de Desarrollo)
EMG Environmental Management Guidelines
ESMF Environmental and Social Management Framework
FAP Fiduciary Action Plan
FM Financial Management
FSS Social Solidarity Fund (Fondo Social de Solidaridad)
GCMA Guatemala City Metropolitan Area
GDP Gross Domestic Product
GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit
GRS Grievance Redress Service
IBRD International Bank for Reconstruction and Development
LAC Latin America and the Caribbean
MARN Ministry of Environment and Natural Resources (Ministerio de Ambiente y
Recursos Naturales)
M&E Monitoring and Evaluation
MGCS Mancomunidad Gran Ciudad del Sur
MINGOB Interior Ministry (Ministerio de Gobernación)
NVCP National Violence and Crime Prevention Policy
OM Operations Manual
PDO Project Development Objective
PIU Project Implementation Unit
PPVICG Participatory Planning for Vulnerable and Indigenous Communities Guideline
RAP Resettlement Action Plan
RPF Resettlement Planning Framework
SEGEPLAN Secretariat for Planning and Programming of the Presidency (Secretaría de
Planificación y Planeación de la Presidencia)
SICOIN Integrated Accounting System (Sistema de Contabilidad Integrada)
US United States
USAID United States Agency for International Development
UNDP United Nations Development Programme
VMP Vice Ministry of Prevention
iii
Regional Vice President: Jorge Familiar
Country Director: J. Humberto Lopez
Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez
Practice Manager: Ming Zhang
Task Team Leader: Augustin Maria
iv
GUATEMALA
Urban Infrastructure and Violence Prevention Project (P143495)
TABLE OF CONTENTS
Page
I. STRATEGIC CONTEXT .................................................................................................1
A. Country Context ................................................................................................................. 1
B. Sectoral and Institutional Context ...................................................................................... 2
C. Higher Level Objectives to which the Project Contributes ............................................... 4
II. PROJECT DEVELOPMENT OBJECTIVE ..................................................................5
A. PDO.................................................................................................................................... 5
B. Project Beneficiaries .......................................................................................................... 5
C. PDO Level Results Indicators ............................................................................................ 5
III. PROJECT DESCRIPTION ..............................................................................................6
A. Project Components ........................................................................................................... 6
B. Project Financing ............................................................................................................... 9
C. Lessons Learned and Reflected in the Project Design ..................................................... 10
IV. IMPLEMENTATION .....................................................................................................10
A. Institutional and Implementation Arrangements ............................................................. 10
B. Results Monitoring and Evaluation ................................................................................. 11
C. Sustainability.................................................................................................................... 12
V. KEY RISKS ......................................................................................................................12
A. Overall Risk Rating and Explanation of Key Risks......................................................... 12
VI. APPRAISAL SUMMARY ..............................................................................................13
A. Economic and Financial Analysis .................................................................................... 13
B. Technical .......................................................................................................................... 14
C. Financial Management ..................................................................................................... 14
D. Procurement ..................................................................................................................... 14
E. Social (including Safeguards) .......................................................................................... 15
F. Environment (including Safeguards) ............................................................................... 16
v
Annex 1: Results Framework and Monitoring .........................................................................18
Annex 2: Detailed Project Description .......................................................................................21
Annex 3: Implementation Arrangements ..................................................................................29
Annex 4: Implementation Support Plan ....................................................................................46
Annex 5: Crime and Violence Prevention Context ...................................................................49
Annex 6: Economic Analysis .......................................................................................................55
Annex 7: Map of Proposed Project Areas .................................................................................61
vi
PAD DATA SHEET
Guatemala
Urban Infrastructure and Violence Prevention Project (P143495)
PROJECT APPRAISAL DOCUMENT
LATIN AMERICA AND CARIBBEAN
Social, Urban, Rural and Resilience Global Practice
Report No.: PAD974
Basic Information
Project ID EA Category Team Leader(s)
P143495 B - Partial Assessment Augustin Maria
Lending Instrument Fragile and/or Capacity Constraints [ ]
Investment Project Financing Financial Intermediaries [ ]
Series of Projects [ ]
Project Implementation Start Date Project Implementation End Date
30-Jul-2017 30-Jul-2023
Expected Effectiveness Date Expected Closing Date
30-Jul-2017 30-Jul-2023
Joint IFC
No
Practice
Manager/Manager
Senior Global Practice
Director Country Director Regional Vice President
Ming Zhang Ede Jorge Ijjasz-
Vasquez J. Humberto Lopez Jorge Familiar
Borrower: Republic of Guatemala
Project Financing Data(in US$, millions)
[ X ] Loan [ ] IDA
Grant
[ ] Guarantee
[ ] Credit [ ] Grant [ ] Other
Total Project Cost: 45.00 Total Bank Financing: 45.00
Financing Gap: 0.00
vii
Financing Source Amount
Borrower 0.00
International Bank for Reconstruction and
Development
45.00
Total 45.00
Expected Disbursements (in US$, millions)
Fiscal Year 2017 2018 2019 2020 2021 2022 2023
Annual 0.5 2 9 9.5 9.5 9.5 5
Cumulative 0.5 2.5 11.5 21 30.5 40 45
Institutional Data
Practice Area (Lead)
Social, Urban, Rural and Resilience Global Practice
Contributing Practice Areas
Cross Cutting Topics
[ ] Climate Change
[ X ] Fragile, Conflict & Violence
[ ] Gender
[ ] Jobs
[ ] Public Private Partnership
Sectors / Climate Change
Sector (Maximum 5 and total % must equal 100)
Major Sector Sector % Adaptation Co-
benefits %
Mitigation Co-
benefits %
Public Administration, Law, and
Justice
Sub-national
government
administration
100 10% 0%
Total 100
I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information
applicable to this Project.
Themes
Theme (Maximum 5 and total % must equal 100)
Major theme Theme %
Urban development Urban services and housing for
the poor
70
viii
Social dev/gender/inclusion Other social development 30
Total 100
Proposed Development Objective(s)
The Project Development Objective (PDO) is to increase access to basic urban infrastructure and services and
mitigate key risk factors of crime and violence in selected communities.
Components
Component Name Cost (US$, millions)
Integrated Package of Small-Scale Urban Infrastructure and
Violence Prevention Interventions
36.1
Technical Assistance for Capacity Building 4.3
Project Management, Monitoring and Evaluation 4.5
Systematic Operations Risk- Rating Tool (SORT)
Risk Category Rating
1. Political and Governance High
2. Macroeconomic Moderate
3. Sector Strategies and Policies Moderate
4. Technical Design of Project or Program Substantial
5. Institutional Capacity for Implementation and Sustainability High
6. Fiduciary Substantial
7. Environment and Social Substantial
8. Stakeholders Substantial
OVERALL Substantial
Compliance
Policy
Does the Project depart from the CAS in content or in other
significant respects?
Yes [ ] No [ X ]
Does the Project require any waivers of Bank policies? Yes [ ] No [ X ]
Have these been approved by Bank management? Yes [ ] No [ X ]
Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ]
Does the Project meet the Regional criteria for readiness for
implementation?
Yes [ X ] No [ ]
Safeguard Policies Triggered by the Project Yes No
Environmental Assessment OP/BP 4.01 X
Natural Habitats OP/BP 4.04 X
ix
Forests OP/BP 4.36 X
Pest Management OP 4.09 X
Physical Cultural Resources OP/BP 4.11 X
Indigenous Peoples OP/BP 4.10 X
Involuntary Resettlement OP/BP 4.12 X
Safety of Dams OP/BP 4.37 X
Projects on International Waterways OP/BP 7.50 X
Projects in Disputed Areas OP/BP 7.60 X
Legal Covenants
Name Recurrent Due Date Frequency
Project Implementation Unit No 3 months after
effectiveness
N/A
Description of Covenant
Schedule 2, Section I.A.1. The Borrower, through the CIV-FSS, shall: (a) establish, and thereafter operate and
maintain throughout Project implementation, a PIU; and (b) select and appoint, at least, a procurement
specialist and FM specialist for the PIU.
Subproject Agreements No Before the
implementatio
n of any
subproject in a
Selected
Community
within a
Participating
Municipality
N/A
Description of Covenant
Schedule 2, Section I.D.1. To facilitate the carrying out of each Subproject, and before the implementation of
any Subproject in a Selected Community within a Participating Municipality Borrower, through CIV-FSS,
shall enter into an agreement with said Participating Municipality and MGCS (the “Subproject Agreement”),
under terms and conditions approved by the Bank.
Technical Committee No No later than
one month
after the
Effective Date
N/A
Description of Covenant
Schedule 2, Section I.E.1. To facilitate the carrying out of the Project activities, no later than one (1) month
after the Effective Date, the Borrower, through the CIV-FSS, shall establish and thereafter maintain
throughout Project implementation, a technical committee (the “Technical Committee”) with functions and
responsibilities acceptable to the Bank, comprised of the PIU’s Project coordinator, and representatives of
MGCS and MINGOB, all under terms of reference acceptable to the Bank and set forth in the Operations
Manual.
x
Evaluation Committee No No later than 3
months after
the Effective
Date
N/A
Description of Covenant
Schedule 2, Section I.E.2. To facilitate the carrying out of the activities under Part 1(a) of the Project, no later
than three (3) months after the Effective Date, the Borrower, through the CIV-FSS, shall establish and
thereafter maintain throughout Project implementation, an evaluation committee (the “Evaluation
Committee”), with functions and responsibilities acceptable to the Bank, comprised by representatives from
the PIU, MGCS, MINGOB and each of the Participating Municipalities, all under terms of reference
acceptable to the Bank and set forth in the Operations Manual.
Operations Manual Yes N/A Throughout implementation
Description of Covenant
Schedule 2, Section I.F.1. The Borrower, through the CIV-FSS, shall carry out the Project in accordance with
a manual acceptable to the Bank (Operations Manual).
Anti-Corruption Yes N/A Throughout implementation
Description of Covenant
Schedule 2, Section I.G.1. The Borrower, through the CIV-FSS, shall carry out the Project in accordance with
the provisions of the Anti-Corruption Guidelines.
Safeguards Yes N/A Throughout implementation
Description of Covenant
Schedule 2, Section I.H.1. The Borrower, through the CIV-FSS, shall carry out the Project in accordance with
the EMF, RPF and IPPF.
Project reports Yes No later than
45 days after
the end of the
period (one
calendar
semester)
covered by
each report
Every calendar semester
Description of Covenant
Schedule 2, Section II.A.1. The Borrower, through the CIV-FSS, shall monitor and evaluate the progress of
the Project and prepare Project Reports in accordance with the provisions of Section 5.08 of the General
Conditions and on the basis of the Project indicators set forth in the Operations Manual.
Interim Unaudited Financial Reports Yes After the end
of each
calendar
semester, or
such later date
as the Bank
shall agree.
Every calendar semester
Description of Covenant
xi
Schedule 2, Section II.B.2. The Borrower, through the CIV-FSS, shall prepare and furnish to the Bank as part
of the Project Reports after the end of each calendar semester, or such later date as the Bank shall agree,
interim unaudited financial reports for the Project covering the pertinent semester, in form and substance
satisfactory to the Bank.
Audit of the Financial Statements Yes No later than 6
months after
the end of each
fiscal year of
the Borrower
Every fiscal year
Description of Covenant
Schedule 2, Section II.B.3. The Borrower, through the CIV-FSS, shall have the Financial Statements audited
and made publicly available in accordance with the provisions of Section 5.09 (b) of the General Conditions.
Each audit of the Financial Statements shall cover the period of one fiscal year of the Borrower, or any other
period acceptable to the Bank. The audited Financial Statements for each such period shall be furnished to the
Bank not later than six months after the end of such period.
Hiring of external auditors No No later than 6
months after
the Effective
Date
N/A
Description of Covenant
Schedule 2, Section V.a. No later than six (6) months after the Effective Date, submit evidence to the Bank’s
satisfaction of the selection and hiring of external auditors, under terms of reference and with qualification
and experience satisfactory to the Bank, and pursuant to the terms and conditions of this Agreement
Update of Procurement Plan No No later than 3
months after
the Effective
Date
N/A
Description of Covenant
Schedule 2, Section V.b. No later than three (3) months after the Effective Date, update the Procurement Plan
into any system recommended by the Bank to the Borrower.
Conditions
Source Of Fund Name Type
IBRD Inter Institutional Agreement Effectiveness
Description of Condition
The Inter Institutional Agreement has been duly executed by the parties thereto.
Source Of Fund Name Type
IBRD Inter Institutional Arrangement Effectiveness
Description of Condition
The Inter Institutional Arrangement has been duly executed by the parties thereto.
Team Composition
Bank Staff
xii
Name Role Title Specialization Unit
Augustin Maria Team Leader (ADM
Responsible)
Sr Urban
Spec.
Urban Development GSU10
Luis Miguel Triveno
Chan Jan
Team Member Urban
Developmen
t Specialist
Ana I. Aguilera Team Member Urban
Developmen
t Specialist
Urban Development GSU10
Gabriela Grinsteins Legal Counsel Counsel Legal LEGLE
Monica Lehnhoff Procurement Specialist
(ADM Responsible)
Procurement
Specialist
Procurement GGO04
Lourdes Consuelo
Linares Loza
Financial Management
Specialist
Sr Financial
Management
Specialist
Financial
Management
GGO22
Angelica Nunez del
Campo
Team Member Sr Urban
Spec.
Urban Development GSU10
Elena Segura Labadia Team Member Senior
Counsel
Counsel LEGLE
Marisa Garcia Lozano Team Member Consultant Urban Development GSU10
Jimena Garrote Counsel Senior
Counsel
Counsel LEGLE
Joan Helen Serra
Hoffman
Team Member Senior
Social
Developmen
t Specialist
GSU04
Marco Antonio
Zambrano Chavez
Safeguards Specialist Environment
al Specialist
Environmental
Safeguards
GEN04
Chloe Fevre Team Member Senior
Social
Developmen
t Specialist
Social Development GSU04
Margarita Puerto
Gomez
Team Member Social
Developmen
t Specialist
Crime and Violence
Prevention
GSU07
Maria Virginia
Hormazabal
Team Member Finance
Officer
Disbursements WFALN
Martin Henry Lenihan Safeguards Specialist Senior
Social
Developmen
t Specialist
Social Safeguards GSU04
Nancy Chaarani Meza Team Member Disaster Operations GSU10
xiii
Risk
Management
Specialist
Perla Rocio Calidonio
Aguilar
Team Member Consultant GSU04
Jessica Grisanti Team Member Consultant GSU10
Patricia M. Acevedo Team Member Program
Assistant
Team Assistant GSU10
Extended Team
Name Title Office Phone Location
Locations
Country First Administrative
Division
Location
Guatemala Guatemala Department Municipality of Mixco
Guatemala Guatemala Department Municipality of Amatitlán
Guatemala Guatemala Department Municipality of Villa Nueva
Guatemala Guatemala Department Municipality of San Miguel Petapa
Guatemala Guatemala Department Municipality of Santa Catarina Pinula
Guatemala Guatemala Department Municipality of Villa Canales
Consultants (Will be disclosed in the Monthly Operational Summary)
Consultants Required? Consultants will be required
1
I. STRATEGIC CONTEXT
A. Country Context
1. Guatemala, with the largest population in Central America, is a lower middle-
income country in the process of transitioning from a predominantly rural to a more
urban, services-oriented economy. In the aftermath of the 2009 global economic slowdown and
natural disasters in 2010 and 2011,1 Guatemala’s national economy has stabilized, with a modest
3.4 percent average growth rate between 2000 and 2015,2 slightly above the Latin American and
Caribbean (LAC) average of 3.2 percent. Factor accumulation (labor and capital) has been the
main driver of GDP growth, stemming primarily from a growing working-age population and
high labor force participation, rather than increases in labor productivity. Other factors impacting
the growth of the economy are the expansion in agricultural exports, a growing services sector
(particularly financial services), and high private consumption (accounting for over 80 percent of
GDP).
2. Despite improvements in macroeconomic stability over the past decade, Guatemala
remains one of the poorest countries in LAC and sustaining progress in poverty reduction
is an ongoing challenge. Using a US$4 per day poverty line, Guatemala’s poverty rate increased
from 53 percent in 2006 to 60 percent in 2014, while extreme poverty (using a US$2.5 per day
poverty line) rose from 33 percent to 37 percent. Moreover, shared prosperity was very
limited: for the 2000-2014 period, the poorest 40 percent experienced a decline in income. In
contrast to LAC, the size of Guatemala’s middle class shrunk from 13.2 percent to 9.4 percent
during those same years. Access to basic services remains modest and unequal, limiting the
universe of economic opportunities for the most vulnerable.
3. Poverty is increasingly an urban problem. While extreme poverty is most concentrated
in rural areas and among indigenous populations, more than 40 percent of Guatemala’s urbanites
live in slums. The concentration of extreme poor in urban areas increased from 7 percent in 2000
to 24 percent in 2014. Urbanites became a majority in Guatemala in 2012, a trend expected to
accelerate, as the country’s urbanization rate converges towards the regional average.3 Rural to
urban migration has been fed by the country’s more than three decade long civil war, natural
disasters, and the attraction of better labor opportunities and higher standards of living in urban
areas. As migrants have moved towards the Guatemala City Metropolitan Area (GCMA), they
have found few options in the formal housing sector and have instead built informal settlements
in the urban periphery, many of which lack basic public services and are poorly connected to
jobs and economic activities. Municipalities, which are responsible for providing basic public
services, such as water, sanitation, road management, and public safety, have strained to keep
pace with demand and struggled to create the conditions to generate economic prosperity. Given
1 Natural hazards in Guatemala during these years include: eruption of the Pacaya volcano (May 2010), Tropical
Storm Agatha (May 2010), a 5.8 magnitude earthquake (September 2011), and heavy floods (October 2011). 2 World Bank. 2016. Systematic Country Diagnostic: Guatemala, Closing Gaps to Generate a More Inclusive
Growth. 3 LAC has an average urbanization rate of 80 percent, but Central America’s rate is much lower at 56 percent in
2010, as reported in the United Nations report: The State of Latin American and Caribbean Cities 2012.
2
that Guatemala’s urban population is projected to grow rapidly,4 the number of poor people
living in these vulnerable, peripheral communities will inevitably grow as well.
4. Guatemala struggles with high levels of crime and violence, which impose a heavy
burden on the country’s development. These high levels are among the key constraints to
investments, productivity, and security of people and property. The economic cost of crime is
high, accounting for 7.7 percent of GDP in 2011,5 11.3 percent in 2013,
6 and 10 percent in
2014.7
5. Guatemala experienced a decrease in homicide rates from 2009–2011, despite a
marked increase in Central America’s Northern Triangle. Although there was a slight
increase in 2012 when the rate reached 39.9 per 100,000 people,8 the national murder rate
declined overall from 46.4 in 2009 to 29.5 per 100,000 people in 2015,9 a rate that remains above
the LAC average and three times as high as the world average. High robbery victimization,
increased incidence of sexually related crimes, kidnappings, and gender-based violence have also
contributed to the magnitude of the problem.10
In 2015, 615 claims of sexual assault were
reported to the police compared to 385 in 2008. In contrast, claims of victimization from
domestic violence reported to police decreased from 2,050 in 2008 to 1,861 in 2015.10
6. A disproportionate share of the victims, perpetrators, and populations at risk of
violence are concentrated in poor urban settlements.11
These precarious settlements lack
access to urban services and economic opportunities and are characterized by low community
cohesion and low social capital—factors that make them more vulnerable to various forms of
crime and violence. High residential instability (due to natural disasters, migration and violence
itself), family disintegration, and low interpersonal trust combine to weaken the capacity of these
communities to act collectively to improve their living conditions and manage internal conflicts.
B. Sectoral and Institutional Context
7. GCMA12
has the highest concentration of poor people per square kilometer. With a
population of 3.2 million or 21 percent of the country,13
GCMA concentrates 60 percent of the
4 The urban population is projected to increase from 8.1 million to 21.1 million by 2050. (United Nations . 2014 .
World Urbanization Prospects: The 2014 Revision) 5 World Bank. 2011. Crime and Violence in Central America: A Development Challenge.
6 Fundesa. 2014. El costo de contener la violencia en Guatemala.
7 Institute for Economics and Peace. 2015. Global Peace Index 2015: Measuring Peace, its Causes and its
Economic Value. Sydney: Institute for Economics and Peace. 8 https://www.wilsoncenter.org/sites/default/files/FINAL%20PDF_CARSI%20REPORT_0.pdf
9 United Nations Office on Drugs and Crime. 2013. “Global Study on Homicide. Trends, Context, Data.” Vienna:
United Nations Office on Drugs and Crime. 10
A 2011 Latin American Public Opinion Project victimization survey showed that Guatemala has overall
victimization rates (measuring crime without specifying its type) higher than the regional average. 11
About 50 percent of the country’s violent deaths are concentrated in 5 percent of municipalities, and homicide
rates are nearly three times greater in Guatemala City than the national average. 12
Because there is no official Government definition of the GCMA, GCMA is defined here as the Guatemala
Department, which comprises 17 municipalities, including Guatemala City and the Mancomunidad del Sur.
3
country’s industry and generates 60 percent of the national GDP, making it the strongest
economic region in Guatemala—but also home to the largest proportion of poor citizens. This
imbalance is common in many LAC capitals where rising urbanization has led to economic
prosperity within central districts, and high poverty levels and vulnerability in the outskirts.
GCMA’s growth has manifested horizontally without increases in density, resulting in the sprawl
and growth of peri-urban areas. Indeed, most of GCMA’s population growth is expected to occur
in the municipalities south of the City, which traditionally have had less technical and financial
capacities to plan for and respond to the increased demand for basic services.
8. Limited capacity for urban planning and management amongst municipalities along
the urban periphery has resulted in inequitable levels of access to public services and
increased vulnerability to crime. In 2010, the Secretariat for Planning and Programming of the
Presidency (Secretaría de Planificación y Planeación de la Presidencia, SEGEPLAN) estimated
that between 27,000–45,000 families in GCMA live in informal settlements, where improvised
housing is often built on steep slopes. These households have, on average, six family members,
low educational levels (less than middle school), and low participation by heads of household in
the labor market. Community and family instability due to displacement, migration, and
deprivation have eroded the social fabric and lowered their capacity to deal with external
stresses. Service coverage of these settlements varies: 34 percent of households have access to
water only through a community meter, and roughly 60 percent lack solid waste collection
services and therefore dispose trash in vacant lots, riverbeds, patios, and/or by burning.14
These
conditions—of accelerated urban growth, poverty, insufficient access to public services and low
community cohesion—have made these peri-urban poor communities more vulnerable to urban
violence. Over 39 percent of reported homicides15
between 2003 and 2013 occurred within
GCMA, which represents about 17 percent of the population.16
9. In late 2012, six municipalities south of GCMA formed the Mancomunidad Gran
Ciudad del Sur (MGCS) in a joint effort to address common urban management challenges
and improve the living conditions of the urban poor. Mancomunidades have traditionally
been formed to implement local economic development initiatives and/or infrastructure projects
with a supra-municipal scope. The MGCS municipalities of Mixco, Amatitlán, Villa Nueva, San
Miguel Petapa, Santa Catarina Pinula, and Villa Canales face similar challenges, including: (a)
high rates of population growth resulting in rapid formation of informal settlements; (b) low
coverage of basic services (sanitation coverage varies between 47 percent and 91 percent, and
only 35 percent of total waste is systematically collected); (c) high proportion of the population
in at-risk areas (steep slopes) and subject to natural disasters; (d) high levels of congestion on the
main roads connecting the neighborhoods to downtown Guatemala City; and (e) increased
13
Population estimates from the National Institute of Statistics based on 2002 Census.
http://www.ine.gob.gt/np/poblacion/ 14
In contrast, according to SEGEPLAN, 71 percent of the Department of Guatemala receives trash collection
services. 15
Data from the National Civil Policy 2012. 16
National Institute of Statistics in 2011.
4
criminal activity.17
These six municipalities comprised 48 percent of GCMA’s population in
2013.
10. Within these municipalities, pockets of informal communities exist that are
characterized by deep levels of poverty and high social and economic vulnerability. While
homicides remain the most common indicator of violence, other risk factors for violence are
prevalent in these municipalities. Examples of such risk factors include lack of social cohesion,
lack of opportunities to develop and apply skills, lack of recreational opportunities, deteriorated
or abandoned public spaces, and a perception of lack of state presence.
11. The Government has prioritized citizen security, violence prevention, and peaceful
co-existence over the last five years. In 2014, the Interior Ministry (Ministerio de Gobernación,
MINGOB) through the Vice Ministry of Prevention (VMP) launched the National Violence and
Crime Prevention (NVCP) Policy to address major risk factors of violence, such as youth
unemployment, domestic violence, single parent households, and child maltreatment. A
subsequent executive order established functions across line ministries for the operationalization
of the NVCP and is still active. In this context, local governments are instrumental actors in
planning and managing the policy at the territorial level, and coordinating with community
leaders and stakeholders through existing engagement mechanisms. Accordingly, the VMP sees
the operationalization of the NVCP Policy in the MGCS as an opportunity to pilot and validate
this community-based model for violence prevention. Piloting this in the largest metropolitan
area of Guatemala and documenting this operational learning will benefit the VMP in scaling up
the proposed intervention at the national level in the future.
C. Higher Level Objectives to which the Project Contributes
13. The proposed Project contributes to the World Bank’s defined goals to end extreme
poverty globally within a generation, and promote shared prosperity in the poorer
segments of society. The Project will be implemented in some of the country’s poorest, fast-
growing urban slums, directly benefiting populations in the bottom 40 percent. A sustainable
path toward ending extreme poverty and promoting shared prosperity in Guatemala will require
creating an inclusive society, with institutions and processes that empower local communities
and promote accountability. Relying on growth alone will not be enough: a range of actions from
policies to well-designed interventions will be essential to break the cycle of intergenerational
poverty.
14. The proposed Project seeks to respond to some of the critical development
challenges outlined in the Systematic Country Diagnostic for Guatemala18
, such as high
levels of crime and violence and growing urbanization. Rapid and unplanned urbanization
will put further pressure on the already strained public services, such as security, transportation,
17
For example, three of the six municipalities of the MGCS are among the top five municipalities within GCMA
with the highest homicide rates in 2012. From 2003 to 2012, Amatitlán had the highest murder rate within the
MGCS of 91.5 per 100,000 inhabitants, followed by Villa Canales (78.6) and Mixco (70.4). 18
World Bank, 2016, Guatemala - Closing gaps to generate more inclusive growth : systematic country diagnostic.
Systematic Country Diagnostic
5
water, sanitation, or waste treatment capabilities. Moreover, high levels of crime and violence
have emerged as a new threat to inclusive development as they limit opportunities for
individuals, decrease incentives for private investment and job creation, and undermine victims’
perception of state institutions. The Project is also aligned with the World Bank Group’s
Country Partnership Framework for Guatemala for FY2017-2020 (Report No. 103738-GT)
discussed by the Executive Directors on November 17, 2016, which seeks to foster social
inclusion, including by increasing access to basic services and infrastructure for the most
vulnerable, and address bottlenecks to growth, including by expanding infrastructure.
15. The proposed Project will be implemented in close coordination with other World
Bank Group-financed projects and complementary operations financed by development
partners. Implementation will also be coordinated with a US$1.2 million reimbursable technical
assistance for the preparation of basic infrastructure packages in selected communities to the
MGCS from the Inter-American Development Bank (IDB) and with key donors involved in
violence prevention, such as the United Nations Development Programme (UNDP), the United
States Agency for International Development (USAID), the German Agency for International
Cooperation (Deutsche Gesellschaft für Internationale Zusammenarbeit, GIZ), and the Spanish
Agency for International Cooperation (Agencia Española de Cooperación Internacional para el
Desarrollo, AECID).
II. PROJECT DEVELOPMENT OBJECTIVE (PDO)
A. PDO
16. The PDO is to increase access to basic urban infrastructure and services and
mitigate key risk factors of crime and violence in selected communities.
B. Project Beneficiaries
19. Direct beneficiaries include (a) residents of selected19
poor urban neighborhoods
with high levels of crime and violence and low levels of service provision; and (b) the six
participating municipalities of the MGCS. The proposed Project will indirectly benefit
national agencies tasked with addressing urban planning and crime and violence prevention, such
as SEGEPLAN and MINGOB. Beneficiary feedback during Project Implementation will be
collected, recorded and reported, including through the PDO level indicator on perception of
safety described below.
C. PDO Level Results Indicators
18. Achievement of the PDO will be measured through the following indicators:
People in urban areas provided with access to ‘improved sanitation’ under the Project
(number) (core indicator);
People in urban areas provided with access to ‘improved water sources’ under the Project
(number) (core indicator);
19
The selection process is outlined in Annex 2.
6
Direct Project beneficiaries of improved urban services in selected urban communities
(number), of which female (percentage); and
Increase in the perception of safety by the residents of selected urban communities
(percentage).
III. PROJECT DESCRIPTION
20. An overarching premise for the proposed Project is that social inclusion of poor and
vulnerable urban communities requires a multi-pronged strategy. First, the Project should
engage community residents through a well-crafted community mobilization process that builds
on the institutional foundations provided by the existing Community Development Councils
(Consejos Comunitarios de Desarrollo, COCODES).20
Second, the Project will contribute to the
improvement of basic living conditions in these communities through the provision of
infrastructure and services that: (a) satisfy basic needs (for example, for potable water, sanitation,
and paved roads); (b) enable provision of social and economic services to vulnerable groups (for
example, community centers); and/or (c) reduce risks for crime and violence and natural hazards
through safer and more resilient built environments. Third, the Project will provide social and
economic opportunities for individuals and families to reduce their vulnerability to crime and
violence, natural disasters, and poverty.
21. Given the lack of reliable baseline data on the general characteristics of the
communities within the MGCS, Component 1 will finance a data collection survey and
mapping exercise in Phase 1 to build a baseline of knowledge about the potentially eligible
communities. This data includes, for example, housing data, socio-demographic characteristics,
and crime and violence risk factors. This Phase will also finance one pilot integrated package in
each of the six municipalities, to enable the Project to gain experience in implementing an
integrated package of urban infrastructure and social services investments at the community
level. Phase 1 will be carried out during the first 18 months of the Project, and the World Bank
will perform a technical review the first six packages before their implementation. Drawing upon
analyses and lessons learned from the inception phase, the Project will then finance integrated
packages of urban and social services and implement them through a community mobilization
process.
A. Project Components
22. The proposed Project will finance three Components, to be implemented over six
years.
Component 1 – Integrated Package of Small-Scale Urban Infrastructure and Violence
Prevention Interventions (US$36.1 million):
20
Guatemala has a well-established structure for citizen participation in local government decision-making and
development planning: its system of Development Councils (COCODES) and Municipal Development Councils
(Consejos Municipales de Desarrollo, COMUDES).
7
23. This Component will finance the identification, preparation and execution of
integrated packages of small-scale infrastructure and crime and violence prevention
activities.21
This includes (a) carrying out of technical assistance, capacity building and
community mobilization activities to support the identification and preparation of subprojects in
selected communities; (b) carrying out of small-scale infrastructure investments and/or
prevention activities (Subprojects) in the territory of the urban or peri-urban (mixto) selected
communities.
24. Communities in which the integrated packages will be implemented will be
identified based on calls for proposals. This will start with the inception phase consisting in the
identification and design of the first six integrated packages mentioned in the previous section,
and continue into the main implementation phase, until all Component resources have been
allocated. The communities where the six sub-projects will be implemented during the inception
phase will be defined based on the prioritization criteria agreed between the Project
Implementation Unit (PIU) within the Social Solidarity Fund (Fondo Social de Solidaridad,
FSS), MGCS, MINGOB, and the World Bank. During the main implementation phase, the
Project will support a demand-driven approach whereby eligible communities will present
proposals for participation in the Project.
25. Eligible communities must: (a) be primarily urban or peri-urban with high
population density;22
(b) have a functioning COCODES; and (c) be located on either public
land, land demonstrably owned by that community, or land that is in the process of
becoming regularized. The Project will not fund investments on illegally occupied land that is
privately owned, or investments that fall under legal restrictions with respect to public
investment in the respective area.23
After a shortlist of eligible communities has been identified,
those eligible communities will be invited to present proposals through their respective
COCODES. Communities will benefit from information sessions on the preparation of these
proposals as well as for identification of their local infrastructure needs, the main drivers of risk
for crime and violence, and community priorities. Each community will prepare a proposal for
participation in the Project that should provide evidence of effective community organization and
a preliminary identification of needs.
26. Submitted proposals will be reviewed by an Evaluation Committee, including
representatives of the PIU, MGCS, MINGOB and the planning directors of the six
municipalities. Various rounds of proposal evaluation may take place over the course of the
Project. The composition of the Evaluation Committee and processes for selection of proposals
for financing are described in the Operations Manual (OM). In addition to the quantitative
criteria, the Evaluation Committee will conduct field assessments and focus interventions on
sub-neighborhoods where poverty, poor services, and high risk for crime and violence are
concentrated. Selection criteria will include, among others, total expected beneficiaries;
21
For a list of possible interventions, please see Annex 2. 22
To be defined on the basis of the survey results. 23
Specifically, the investments financed under the integrated packages will have to comply with applicable national
legislation regulating public investment in areas exposed to natural disasters such as Governmental Agreement 179-
2001, which identified high risk areas in the Amatitlàn, Villalobos and Michatoya basins.
8
percentage of the community without access to public services, including piped water, sanitation,
solid waste collection, public lighting, public recreation spaces and/or community centers; and
percentage of the community characterized by known risk factors for crime and violence, such as
single-parent households, unemployed dropout youths, homicide rate, and rate of physical
assaults.
27. Following the selection of proposals to be financed, a process of prioritization of
interventions will take place in each selected community. Under the guidance of the VMP of
MINGOB and with the participation of the MGCS and participating municipalities, the PIU will
coordinate the application of the Community-based Violence Prevention Methodology adapted
for the Project for the identification and prioritization of urban infrastructure and crime and
violence prevention interventions to be financed under each integrated package. Under this
Component, the Project will finance expenses related to the VMP’s support to the application of
this methodology in the selected communities, including: (a) providing guidance and training
tools for the application of the community-based model for violence prevention, including focus
groups and exploratory walks; (b) developing diagnostic and participatory planning tools to
identify violence prevention interventions to be included as part of the integrated packages; (c)
providing equipment and technical assistance to the VMP to enhance coordination with local
stakeholders; and (d) reproducing and disseminating educational and communications materials
related to the strategic pillars of the NCVP Policy, including the prevention of armed violence,
violence against women, children, and youth, and road violence and accidents.
28. Within each round, the works identified by the selected communities will be
packaged and procured through a small number of contracts to simplify implementation,
which will be carried out with community supervision and monitoring. Social and capacity
building interventions will be provided in coordination with the infrastructure works and other
agencies and/or ministries. Each package is expected to cost between US$1 million and US$1.2
million, including design and supervision.
29. Component 1 may also finance the acquisition of land and provision of
compensation as needed (including cash compensation and other assistance paid for involuntary
resettlement) related to the implementation of the relevant resettlement plans under the Project’s
Resettlement Policy Framework (RPF). The request to finance land expenditures and
resettlement compensation with Loan proceeds was approved by the World Bank in April 2014.
Component 2 – Technical Assistance for Capacity Building (US$4.3 million):
30. This Component seeks to strengthen the institutional capacity of MINGOB, CIV-
FSS, the MGCS, and participating municipalities (through MGCS). It will do so through:
Monitoring and evaluation (M&E), including a baseline survey, community mapping,
victimization surveys, and data collection. This Component will support the collection of
baseline, mid-term and completion, impact tracking and assessment data as well as an initial
baseline survey and community mapping for the Project. In addition, this Component will
support the implementation of a victimization and safety perception survey in a
representative sample of households in selected communities.
9
Technical assistance to strengthen transparency and community engagement. The Project
will finance support to the MGCS in the use of information and communication technology
systems to strengthen transparency and community engagement with respect to identification
of priority areas for investment and monitoring of Project implementation.
Support to strengthen municipal cadasters. Component 2 will also finance (i) an assessment
of participating municipalities’ respective cadaster systems; and (ii) design of a strategy
(including an estimated budget) for the strengthening of each of said cadaster systems.
Technical assistance on territorial planning, inter-municipal coordination, and service
delivery. The Project will finance support for the MGCS and participating municipalities to
(i) develop a territorial coordination strategy; (ii) identify and map communities located in
areas exposed to disaster risk, and develop risk mitigation strategies accordingly; and (iii)
carry out studies to explore options for strengthening municipal services in participating
municipalities, including solid waste collection within the MGCS.
Technical assistance and support for Crime and Violence Observatories. Finally, this
Component will finance a) provision of technical assistance to MINGOB to strengthen the
national crime and violence observatory, including developing a web-based system to collect
data; and carrying out capacity building activities for said national crime and violence
observatory’s staff to analyze and disseminate collected data; and b) provision of support to
MINGOB, MGCS and participating municipalities for the design and development of
municipal crime and violence observatories in each of the participating municipalities and an
inter-municipal crime and violence observatory within the MGCS.
Component 3 – Project Management, Monitoring and Evaluation (US$4.5 million):
31. Component 3 will provide support to the PIU for Project management, coordination
and evaluation activities through, inter alia: (a) carrying out project audits; (b) conducting
Project outreach activities; (c) carrying out mid-term and impact evaluation surveys in order to
evaluate the Project’s impacts; (d) providing technical support on procurement, safeguards and
financial management (FM) requirements, including the hiring of the PIU’s staff; and (e)
financing operating costs. The Government is expected to cover the costs of staffing for key
positions of the PIU. Finally, while data collection will be undertaken under Component 2, day-
to-day M&E activities will be financed by Component 3.
B. Project Financing
32. The proposed investment project financing would be financed by an IBRD loan in
the amount of US$45 million.
Table 1: Project Cost and Financing
Project Components Project Cost
(US$, millions)
IBRD
Financing
%
Financing
1. Integrated Package of Small-Scale Urban
Infrastructure and Crime and Violence Prevention
Interventions
36.1 36.1 100
2. Technical Assistance for Capacity Building 4.3 4.3 100
10
C. Lessons Learned and Reflected in the Project Design
33. The World Bank has a history of involvement in urban slum upgrading projects and
violence prevention. This Project’s design builds on prior research and lessons learned, which
have collectively demonstrated that a community’s quality of life can be improved through
integrating both infrastructure and community capital investments. Lessons include:
Extensive and continuous community participation. World Bank experience with
comparable urban upgrading programs in Jamaica, Brazil and Honduras points to the need
for extensive community participation in project preparation, implementation, and
monitoring as well as for the need to manage expectations related to project execution given
that community-driven projects tend to have slow initial implementation periods. Strong
community engagement has been found to enhance community readiness and post-project
sustainability and reduce the risks of violence in vulnerable groups. Guatemala has
established structures for community participation to facilitate identification of community
needs.
Transparent processes for determining community eligibility and selection. Eligibility
criteria and selection criteria are outlined in the OM and will be made widely available,
including through outreach by the MGCS. The original idea was to prescreen and/or
preselect communities to receive interventions using eligibility criteria to measure poverty
levels, access to services, and indicators of crime and violence. However, reliable
quantitative data about population characteristics, poverty, and access to services and crime
and violence is limited. Thus the Project will carry out a pre-implementation community
survey and mapping exercise to identify eligible communities based on agreed-upon
criteria.
Rigorous M&E. Given lack of data, the Project will conduct baseline, mid-term, and
completion assessments of selected and control communities to measure results. Strong
baseline data are critical for the eligibility and selection processes, as well as for overall
monitoring of progress. As such, the Project has been designed to dedicate the first 12–18
months to robust data collection.
Integrated and evidence-based approaches. Packages of interventions to simultaneously
address multiple risk factors of violence have shown positive results in violence reduction.
The adaptation and implementation of rigorously evaluated programs, along with other
promising and innovative approaches, can also yield significant positive results.
IV. IMPLEMENTATION
A. Institutional and Implementation Arrangements
34. The proposed Project will be implemented by the Ministry of Communications,
Infrastructure and Housing (Ministerio de Comunicaciones, Infraestructura y Vivienda,
CIV), through the FSS in close coordination with the MGCS and MINGOB. Through a PIU
3. Project Management, Monitoring and Evaluation 4.5 4.5 100
Total Costs 44. 9 44.9 100
Front end Fees 0.1 0.1 100
Total Financing Required 45.0 45.0 100
11
that will be established no later than three months after effectiveness, the FSS will be responsible
for all aspects of implementation, including procurement, disbursement, accounting and financial
reporting, safeguards, auditing, and M&E. A Technical Committee with representation from the
FSS, MGCS, and MINGOB will provide technical oversight and validate key decisions related to
the selection of communities and approval of integrated packages. The MGCS will coordinate
implementation with participating municipalities while MINGOB will provide technical support
for the participatory diagnostics. Details on the implementation arrangements are included in
Annex 3.
35. Although FSS does not have experience managing World Bank-financed projects, it
does have experience executing urban infrastructure improvement projects, including
those financed by multilateral organizations.24
The FSS was established in 2009 through
Governmental Decree (Acuerdo Gubernativo) 71-2009 as an executing agency within CIV to
undertake programs, projects and works under CIV’s mandate. The FSS will hire a technical PIU
team acceptable to the World Bank, which will include a PIU coordinator, an infrastructure and
environmental management coordinator, a M&E specialist, an environmental specialist, a social
specialist, a procurement specialist and a FM specialist, who will have signing authority
(“cuentadancia”) to facilitate timely implementation. Until the PIU is legally established, FSS
will designate four line staff with signing authority, who on a transition basis will be responsible
for initial technical and administrative processes to avoid delays in implementation. The FSS
may also make any necessary temporary appointments prior to Loan effectiveness.
36. While the PIU will be responsible for overall Project management, the MGCS,
MINGOB, and the six participating municipalities, will be the key implementation actors. Implementation of Component 1 will require close coordination between the above-mentioned
institutions to ensure that implementation is carried out in accordance with the OM. The role of
MINGOB is to provide technical support and guidance to the implementation of the Community-
based Violence Prevention Methodology in the selected communities. The MGCS will
coordinate (a) determination of eligibility through community eligibility and selection processes;
(b) formulation of proposals by the eligible communities; (c) prioritization of interventions; and
(d) implementation of the integrated packages. Coordination between MINGOB and the MGCS
will be facilitated by the recruitment of three liaison officers funded under Component 3 to be
located in the offices of MINGOB (one) and MGCS (two) and reporting to the relevant PIU
coordinators. The OM details the roles and responsibilities of the various actors.
B. Results Monitoring and Evaluation
37. The PIU will be responsible for M&E. The PIU will include an M&E specialist, who
will be responsible for consolidating all reports and providing information on implementation
progress, including qualitative and quantitative information on the execution of selected
interventions, procurement and contractual decisions, accounting and financial recording,
progress towards outcomes, safeguards management, outputs and monitoring of indicators, as
24
The FSS recently executed the Inter-American Development Bank-financed Program Against Urban Poverty
which supported improvements in urban infrastructure and delivery of social services in selected settlements in the
GCMA.
12
well as other operational and administrative matters. Component 2 will finance the initial data
collection and community mapping, as well as targeted M&E studies of selected indicators for
eligible communities at mid-term and completion. Component 2 will also support the
implementation of a victimization and safety perception survey in a representative sample of
households in eligible communities. Component 1 will finance community-level victimization
surveys in the selected urban communities (one at the beginning of the community mobilization
process, one at mid-term, and one at the end of the intervention in each community). The
Project’s results framework will be updated during implementation based on the baseline survey
and the outcome of the community-driven identification of interventions.
C. Sustainability
38. Project design focuses on establishing key building blocks to ensure sustainability.
These include building technical capacity of key partner institutions, such as the PIU, MGCS,
and MINGOB, through provision of technical training and support to the PIU and MGCS. The
integrated Crime and Violence Prevention Information System to be funded under Component 2
will establish information management systems and inter-governmental agency coordinating
mechanisms with respect to local data. Because low municipal fiscal capacity is a typical
challenge that urban upgrading programs face, Component 2 will provide support to
municipalities to identify opportunities to strengthen the completeness and reliability of their
respective cadasters to enable municipalities to improve local revenue collection and thereby
have more resources to pay for ongoing maintenance and operations. Lastly, working within the
existing COCODES structure and fostering citizen engagement, the Project is designed to
maximize community commitment and buy-in, increasing the probability that infrastructure
upgrades will be maintained over time. For example, when installing solid waste containers, the
Project will educate local communities about the need for community maintenance.
39. Climate change considerations. Vulnerability to disaster risk is one of the key
challenges of the poor urban neighborhoods that will benefit from the Project, and climate
change is increasing the Hazard risk related to extreme weather events such as floods and
landslides. Disaster risk reduction investments such as drainage and slope stabilization works are
part of the menu of investments that can be included in the integrated packages of small works
under Component 1. The specific content of each integrated package will be determined during
Project implementation, however, it is expected that the Project’s climate change adaptation co-
benefits related to the carrying out of drainage and slope stabilization investments in the selected
poor urban neighborhoods will represent 10% of the Project amount.
V. KEY RISKS
A. Overall Risk Rating and Explanation of Key Risks
40. The overall implementation risk is substantial due to the substantial fiduciary and
high Political and Governance and Institutional Capacity for Implementation Risks.
Successive Guatemalan administrations have been characterized by low levels of transparency,
accountability and participation, and persistent corruption cases, hindering the country’s
development. With respect to institutional and fiduciary risk, the FSS has no prior experience in
13
the execution of World Bank-financed Projects, and coordination with the MGCS and MINGOB
and other institutions may prove challenging. To mitigate this risk, the FSS has committed to
hire a technical PIU team acceptable to the World Bank and has agreed on a Fiduciary Action
Plan (FAP) to build operational capacity and mitigate fiduciary risks, including transparency-
related activities and complaints mechanisms. The World Bank will work closely with the PIU to
ensure that it builds robust fiduciary and safeguards management processes, and provide
technical assistance and training as needed. Moreover, the Project’s OM details the relationship,
roles and responsibilities of all actors as well as fiduciary processes.
41. Technical design, environmental and social and stakeholder risks are considered
Substantial. The Project is intervening in areas characterized by high levels of crime and
violence, low levels of social cohesion and organization, high levels of vulnerability to natural
disasters, and limited access to basic social services. Risks include intra and intercommunity
conflict over access to Project resources, and disruption of Project activities due to outbreaks of
crime and violence, or natural disasters. The Project also faces the challenge of lack of data about
communities within the MGCS and that specific communities that will receive the infrastructure
and crime and violence prevention interventions cannot be preselected before effectiveness.
Given that this is a new Project and the MGCS is a relatively new institution, there is also a risk
that communities become concerned about their inclusion/exclusion from participating in the
process of community selection for funding. The Project has been designed to mitigate technical
and stakeholder risks, with an emphasis on strengthening municipal capacity through the
activities proposed under Component 2, and the promotion of strong social engagement in the
identification and design of the community-based crime prevention strategies under Component
1.
VI. APPRAISAL SUMMARY
A. Economic and Financial Analysis
42. Given the demand-driven nature of the proposed Project, actual costs and numbers
of beneficiaries are not yet known, and therefore a precise economic rate of return could
not be estimated. Instead, two levels of analyses were conducted: a novel approach called
‘Robust Decision-Making’25
to estimate benefit-cost ratios for the proposed water and sanitation
investments under uncertainties about implementation; and, in parallel, an economic cost-benefit
analysis was calculated through hedonic pricing. Both confirmed that the proposed interventions
would have positive outcomes. A literature review of similar water and sanitation investments
confirmed that the net economic benefits of improved water and sanitation investments have
been validated as positive. This desk review cited a 2012 World Health Organization report26
that calculated that every dollar invested in improved sanitation yields an average US$5.5 return
globally. Further, through the ‘Robust Decision-Making’ methodology, the analysis used 100
25
Robust Decision-Making is an analytic framework that helps identify potential robust strategies, identify those
strategies’ vulnerabilities and evaluate trade-offs among them. It is typically used to aide decision-makers in policy
areas of "deep uncertainty" in which relationships among actions, consequences and probabilities are unknown. 26
World Health Organization, and UN Water. (2012). UN-Water Global Analysis and Assessment of Sanitation and
Drinking Water. The Challenge of Extending and Sustaining Services. Geneva
14
model simulations over 11 uncertain variables, and determined that such a proposed intervention
is economically sound as long as costs are less than US$2,000/household, suggesting that water
and sanitation investments envisaged in the proposed Project are robust.
43. An economic cost-benefit analysis was estimated through hedonic pricing, a
common method used in urban upgrading projects. This analysis estimated the economic
value of three types of small-scale infrastructure works, namely water, sanitation, and street
lighting. The analysis sought to estimate housing price increases resulting from these types of
investments and found the results to be positive (i.e. housing prices increase as a result of
investments). The analysis also confirmed that projects that address the perception of security
(for example, improved street lighting) improve the value of people’s properties, reflecting a
better quality of life. The analysis is presented in further details in Annex 6.
B. Technical
44. The proposed Project relies on approaches and methodologies appropriate for the
Guatemalan context and is based on best practices and lessons learned regarding urban
community upgrading and crime and violence prevention. Specifically, the design of the
Proposed Project benefitted from the experience of the Barrios de Verdad program in Bolivia
supported by the World Bank through the Bolivia Urban Infrastructure Project (P083979). In
addition, capacity building and technical assistance activities proposed under Component 2 have
been designed to directly support the implementation of the Project.
C. Financial Management
45. FSS will be responsible for Financial Management (FM) for the proposed Project.
FM tasks include budget formulation and monitoring, cash flow management, accounting,
financial reporting, internal controls and external audits. FSS will also be responsible for
implementing the governance and transparency aspects of the Project. To properly support FM
tasks, the PIU will include a qualified FM team that will coordinate with FSS’ Coordinación
Financiera and CIV’s Administrative and Financial Unit, as needed.
46. While FSS is the responsible implementing entity, Project implementation requires
the FSS to interact with the MGCS, the main technical counterpart, and MINGOB.
Moreover, although the FSS has the basic FM arrangements in place and extensive experience in
the implementation of infrastructure Projects, it is not familiar with World Bank requirements,
and its internal administrative and finance arrangements may become cumbersome. As a result, a
FAP was agreed upon to build the PIU’s operational capacity and mitigate fiduciary risks,
including transparency-related activities and complaints mechanisms. More details are included
in Annex 3.
D. Procurement
47. Procurement activities will be carried out by the PIU. An assessment of the PIU
found certain deficiencies in terms of weaknesses related to available procurement staff and
resources to deal with the large number of contracts required by the Project. Key issues and risks
15
include: (a) PIU implementation capacity given the expected high workload; (b) poor
coordination of activities between different institutions involved in the Project; (c) Contraloria’s
interventions before signature of contracts, which may cause bottlenecks; (d) local procurement
regulations that include practices that are not acceptable to the World Bank; and (e) high country
procurement risk.
48. A series of mitigation and corrective measures have been agreed upon. These
include: (a) recruitment of experienced procurement staff acceptable to the World Bank; (b)
recruitment of an international procurement specialist (full or part time, as needed) acceptable to
the World Bank, to coach and support the procurement staff of the PIU and contribute to quality
control; (c) implementation of the Project in accordance with an OM acceptable to the World
Bank; (d) carrying out of national open competitive procurement using bidding documents
agreed upon with the World Bank and included in the OM; and (e) use of Guatecompras, a
national contracting and procurement information system, in accordance with the OM and in
alignment with the World Bank’s Procurement Regulations for Borrowers under Investment
Project Financing (July 2016).
E. Social (including Safeguards)
49. The proposed Project is expected to have a beneficial social impact. Integrating basic
infrastructure investments with capacity building and violence prevention measures in poor
urban communities that are highly vulnerable to crime and natural disasters has the potential to
transform quality of life for all residents. The resulting benefits include improvements in citizen
security, connectivity and mobility, environment conditions, access to basic services and
recreational facilities, and economic opportunities. These impacts will be further enhanced
through use of citizen engagement and participation methodologies, the COCODES and the
Violence Prevention Commissions. The Results Framework includes an indicator on community
empowerment and the Project will explore the use of information and communication
technologies to support citizen engagement (for example to prioritize investments and collect
feedback on the quality of investments).
50. Gender-sensitive tools will be used during the participatory planning process to
ensure that the voices of both men and women influence Project selection. The Project will
support public awareness campaigns on gender equity issues, training to address gender
differentials in high rates of school drop-outs, and community-based training on gender-based
violence. Where feasible, results indicators have been disaggregated by gender.
51. The main adverse social impact anticipated is related to limited requirements for
resettlement, including the purchase or donation of land, associated with the construction
of public infrastructure in the selected neighborhoods. The zones of intervention are
characterized by densely populated informal settlements, with potentially structures occupying
the right of way to be used for linear infrastructure.
52. The proposed Project will support a range of integrated packages, some of which
may require minor resettlement impacts. Although integrated packages must take place on
16
public land, or land demonstrably owned by the community, the World Bank's Policy on
Involuntary Resettlement (OP/BP 4.12) is triggered given that implementation will take place in
densely populated settlements where residential structures may have encroached on public land
or the right of way. Therefore, an Environmental and Social Management Framework (ESMF)
was prepared by the Borrower and approved by the Bank, which includes the RPF,27
and was
consulted upon during a stakeholder workshop on April 30, 2014, attended by 150 people
representing the COCODES of the six municipalities and civil society. Because the specific
location of investments is not yet known, the ESMF also includes a Resettlement Policy
Framework, that was reviewed and re-disclosed on the Government’s (May 6, 2016) and the
World Bank’s (May 10, 2016) websites.
53. The Indigenous Peoples (OP/BP 4.10) policy is also triggered. Although the zones of
intervention are highly urbanized, there is one indigenous community in Mixco. Because the
exact location of investments is not yet known, the ESMF includes an Indigenous Peoples
Planning Framework (IPPF)28
, which was prepared by the Borrower, approved by the Bank,
disclosed and consulted upon during a stakeholder workshop on April 30, 2014. As part of the
ESMF, the IPPF was reviewed during appraisal and re-disclosed on the Government’s (May 6,
2016) and the World Bank’s (May 10, 2016) websites.
54. Public consultations were conducted on all the Project’s safeguards instruments29
with representatives of the six MCGS municipalities, and local civil society and
community-based organizations on April 30, 2014. Over 150 people participated in this
meeting. Minutes of stakeholder meetings, including measures proposed to address grievances,
are included as an Annex to the EMG. During the consultation workshop, participants asked
questions about the process of eligibility and selection of communities and sub-projects, as well
as the timing of implementation. No comments/questions that required changes in safeguards
documents were made.
F. Environment Safeguards
55. The proposed Project is classified as Category B in accordance with Environmental
Assessment Policy (OP/BP 4.01). Given the technical characteristics of the works proposed, the
communities’ urban location, and the magnitude of works, no significant environmental negative
impacts are foreseen. The proposed work are expected to have a positive environmental impact
through the improvement of basic services including water supply, sanitation, drainage, and road
paving. Limited adverse impacts can be expected from the construction and operation of the
proposed works. Among other activities, the Project will finance improvement or rehabilitation
of local roads, provision of potable water, drainage works, public street lighting, construction of
local recreational parks, school and community centers, and slope stabilization works. In the case
27
The Project’s RPF is the the Borrower’s Resettlement and Land Acquisition Guidelines (Guía de Reasentamiento
y Adquisiciones de Tierras). These Guidelines specify how the Project will comply with the World Bank’s Policy on
Involuntary Resettlement, and the steps to be taken to prepare site specific Resettlement Action Plans. 28
The Projects IPPF is the Borrower’s Participatory Planning for Vulnerable and Indigenous Communities
Guidelines (PPVICG) included in the ESMF. 29
Including the ESMF, and its three annexes : (i) Environmental Management Guidelines (EMF), Resettlement
Policy Framework (RPF), and Indigenous Peoples Planning Framework (IPPF).
17
of local roads, for example, rehabilitation, improvement, and maintenance activities will be
completed on existing roads and will not change the character of the roadways. Improvements to
potable water and drainage systems will be small-scale, and public lighting improvements are
expected to be made in existing right-of-ways with minimal impact to existing residences and
businesses. Because the specific location of investments is not yet known, the ESMF includes the
Environmental Management Guidelines (EMG). All integrated packages will require an
Environmental Management Plan or, in the case of integrated packages with low environmental
risk, the application of the Good Environmental and Social Practices Guidelines developed by
the Ministry of Environment and Natural Resources (Ministerio de Ambiente y Recursos
Naturales, MARN) and the International Union for Conservation of Nature. The EMG was
disclosed on April 30, 2014 both through a public consultation meeting and on the websites of
the MGCS municipalities, and was re-disclosed on the Government’s (May 6, 2016) and the
World Bank’s website on May 10, 2016.
56. The Physical Cultural Resources (OP/BP 4.11) policy is triggered because of the
potential impact on cultural resources during construction. The ESMF includes Chance Find
Procedures and measures to screen for and manage potential impacts on cultural heritage or
property that could be affected by neighborhood development plans.
G. World Bank Grievance Redress
57. Communities and individuals who believe that they are adversely affected by a
World Bank supported Project may submit complaints to existing Project-level grievance
redress mechanisms or the World Bank’s Grievance Redress Service (GRS). The GRS
ensures that complaints received are promptly reviewed in order to address Project-related
concerns. Project affected communities and individuals may submit their complaint to the World
Bank’s independent Inspection Panel which determines whether harm occurred, or could occur,
as a result of World Bank non-compliance with its policies and procedures. Complaints may be
submitted at any time after concerns have been brought directly to the World Bank's attention,
and World Bank Management has been given an opportunity to respond. For information on
how to submit complaints to the World Bank’s corporate GRS, please visit
http://www.worldbank.org/GRS. For information on how to submit complaints to the World
Bank Inspection Panel, please visit www.inspectionpanel.org.
18
Annex 1: Results Framework and Monitoring
GUATEMALA: Urban Infrastructure and Violence Prevention Project (P143495)
Results Framework
Project Development Objective (PDO): The PDO is to increase access to basic urban infrastructure and services and mitigate key risk factors of crime
and violence in selected communities.
PDO Level Indicators
Cumulative Target Values
Indicator Name Core Unit of
Measure Baseline YR1 YR2 YR3 YR4 YR5
End Target
(YR6) Frequency
Data Source/
Methodology
Responsibility
for Data
Collection
Description (indicator definition
etc.)
Number of people in
urban areas provided
with access to
Improved Sanitation
under the Project
Number 0 0 3240 9720 9720 12960 16200 Annually Project reports FSS/MGCS
Number of sanitation
connections financed by the
Project multiplied by the
average household size (4.5
persons) at the Department of
Guatemala City
Number of people in
urban areas provided
with access to
Improved Water
Sources under the
Project
Number
0
0
3240
6804
6804
9072
11340
Annually
Project reports
FSS/MGCS
Number of water connections
financed by the Project
multiplied by the average
household size (4.5 persons) at
the Department of Guatemala
City
Direct Project
beneficiaries of
improved urban
services in selected
urban
communities (of which
female)
Number
0
0
6480
(3240)
19440
(9720)
19440
(9720)
25920
(12960)
32400
(16200)
Annually
Project reports
FSS/ MGCS
Number of residents in selected
urban communities where the
integrated urban infrastructure
improvements have been
completed (disaggregated by
gender)
Increase in the
perception of safety by
residents of selected
urban communities
Percentage tbd - - -
+10%
variation
At the start and at
the end of each
community level
engagement
Community
Survey
MGCS/
MINGOB
Percentage of residents in
selected urban communities
who perceive improved levels
of safety
19
Intermediate Results Indicators
Indicator Name Core Unit of
Measure Baseline
Cumulative Target Values
Frequency
Data
Source/Metho
dology
Responsibility
for Data
Collection
Description (indicator
definition and so on)
YR1 YR2 YR3 YR4
YR5 End Target
(YR6)
Intermediate Results Indicators - Component 1
Number of additional
safe public spaces
constructed or
rehabilitated
Number 0 tbd tbd tbd tbd tbd tbd Annually Project reports FSS/ MGCS
Number of safe public spaces
constructed or rehabilitated
through the Project (including
schools, community centers,
parks, etc.) following the
Crime Prevention Through
Environmental Design
methodology
Length of additional
paved road surface
rehabilitated and
maintained
Km 0 tbd tbd tbd tbd tbd tbd Annually Project reports FSS/ MGCS
Kilometers of paved road
surface rehabilitated and
maintained through the
Project. Number of
beneficiaries will also be
estimated
Positive change in
attitude towards
gender-based violence
in selected urban
communities:
percentage of residents
showing lower
tolerance towards
gender-based violence
Percentage tbd +15%
At the start and at
the end of each
community level
engagement
Community
survey
MGCS /
MINGOB
Percentage of residents in
selected urban communities
showing lower tolerance
towards gender-based violence
Increased positive use
of free time: percentage
of young males and
females who report
being actively engaged
in community activities
Percentage tbd +15%
At the start and at
the end of each
community level
engagement
Community
survey
MGCS/
MINGOB
Percentage of young males
and females (ages 12-25) who
report being actively engaged
in community activities (as
opposed to being idle)
Number of parents,
teachers, and students
who participated in
school violence
prevention initiatives
Number 0 30 60 90 120 150 180 Annually
Project reports
School
registers
FSS/ MGCS
Number of parents, teachers,
and students who participated
in school violence prevention
initiatives
20
Indicator Name Core Unit of
Measure Baseline
Cumulative Target Values
Frequency
Data
Source/Metho
dology
Responsibility
for Data
Collection
Description (indicator
definition and so on)
YR1 YR2 YR3 YR4
YR5 End Target
(YR6)
Intermediate Results Indicators - Component 2
Functioning Violence
Observatory for the
MGCS
Violence
Observator
y
-
Agreem
ent of
the
MGCS
for
creation
of
Observa
tory
Violence
Observat
ory
creation
Preventi
on
strategy
underta
ken by
MGCS
based
on
Violenc
e
Observa
tory
Two
preventio
n
strategies
undertake
n by the
MGCS
based on
Crime
Observat
ory
Annually
Project reports
from the PIU /
Violence
Observatory
data
FSS/ MGCS
Violence Observatory for the
MGCS is created and
functioning, in coordination
with the Municipalities of the
MGCS
Functioning Crime and
Violence Observatory
at the municipal Level
Number 0 0 1 3 5 6 6 Annually Project reports
FSS/
MGCS
Violence Observatory for each
participating municipality is
created and functioning, in
coordination with the MGCS
and National Observatories
Number of MGCS
staff, municipal
officials and
community
representatives
trained
Number 0 60 120 135 150 150 150 Annually Project reports
FSS/
MGCS
MGCS staff, municipal
officials and community
representatives benefitting
from training/capacity
building. Information will be
disaggregated by gender
21
Annex 2: Detailed Project Description
GUATEMALA: Urban Infrastructure and Violence Prevention Project (P143495)
1. The proposed Project aims to support increased access to basic urban infrastructure
and services that will contribute to improvements in quality of life, and mitigation of risk
factors for crime and violence in precarious urban areas within the MGCS municipalities. The Project also intends to contribute to the technical and institutional capacity of MGCS
municipalities to engage their communities in participatory decision-making related to needed
community investments, engage in urban planning, and generate additional revenue from more
complete and current municipal cadasters.
2. Legally established in May 2012, the MGCS is an autonomous agency that includes
six municipalities in the south of the Department of Guatemala, namely the Municipalities of
Amatitlán, Mixco, San Miguel Petapa, Santa Catarina Pinula, Villa Canales and Villa Nueva. All
of these municipalities are located on the urban periphery, and serve as dormitory communities
for workers commuting into the capital city. The MGCS was created for the broad purpose of
creating efficiencies in implementing local economic development initiatives and/or
infrastructure projects with a supra-municipal scope. While the municipalities vary in population
from about 85,000 to 500,000 inhabitants, they share similar challenges of: (a) growing
population of informal settlements; (b) low coverage of basic services (sanitation coverage varies
between 47 percent and 91 percent, and only 35 percent of total waste is systematically
collected); (c) pockets of each municipalities living in at-risk areas (on steep slopes) prone to
natural disasters; (d) high levels of congestion on the main roads connecting the neighborhoods
to downtown Guatemala City; and (e) higher than average criminal activity.30
Table A.2.1. Municipalities of the MGCS
Municipality Number of
Communities
Population
(2010)
%
Populat
ion
Below
Poverty
Line
Area
(km2)
% of
Population
with Access to
Improved
sources of
Drinking
Water
% of
Population
with Access to
Improved
Sanitation
Systems
Homicide
Rates per
100,000
Inhabitants
(2013)
Amatitlán 50 105,738 18% 204 92.5 78.6 66
Mixco 701 474,421 9% 132 84.9 90.6 42
San Miguel Petapa 146 156,790 12% 30 91.1 85.8 37
Santa Catarina Pinula 59 85,290 13% 48 78.0 61.7 63
Villa Canales 92 139,449 23% 353 80.2 47.2 63
Villa Nueva 524 501,395 13% 114 82.0 81.7 55
TOTAL/Average 1572 1,463,083 15% 881 84.8% 74.3% 51
Sources: Diagnóstico Territorial: Región Central, SEGEPLAN (2012); MARN (2010)
3. Table A.2.1 provides a snapshot of the six MGCS municipalities, which together
comprise about 48 percent of the population of the GCMA. The aggregated numbers by
30
SEGEPLAN (Secretaría de Planificación y Planeación de la Presidencia). 2012. Diagnóstico Territorial Tomo 1:
Región Central – Una oportunidad para la competitividad y el desarrollo del país.
22
municipality obscure the existence of pockets of informal communities characterized by deep
levels of poverty and high social and economic vulnerability. Through the baseline mapping
survey to occur in the initial phase, this Project will identify and, once selected, focus resources
on these most vulnerable communities.
4. An overarching premise for the Project is that social inclusion of poor and
vulnerable urban communities requires a multi-pronged strategy. First, the Project should
engage community residents through a well-crafted community mobilization process that builds
on the institutional foundations provided by the existing COCODES. Second, the Project will
contribute to the improvement of basic living conditions in these communities through the
provision of infrastructure and services that: (a) satisfy basic needs (for example, for potable
water, sanitation, and paved roads); (b) enable provision of social and economic services to
vulnerable groups (for example, community centers); and/or (c) reduce risks for crime and
violence and natural hazards through safer and more resilient built environments. Third, the
Project will provide social and economic opportunities for individuals and families to reduce
their vulnerability to crime and violence, natural disasters, and poverty.
5. The proposed Project will be implemented in two phases, over a six-year period. An
initial or inception phase will focus on implementing a pilot integrated package in each
municipality and carrying out a comprehensive data gathering exercise that will enhance the
ability of the FSS and MGCS to carry out the Project. This phase is expected to be carried out
during the first 18 months. The second or main implementation phase will finance the additional
integrated packages through a demand-driven approach with significant community
participation, as described below.
6. Inception phase. Given the lack of reliable baseline data on the general characteristics of
the communities within the MGCS, the Project will finance a data collection survey and mapping
exercise to build a baseline of knowledge about the potentially eligible communities (for
example, housing data, sociodemographic characteristics, and crime and violence risk factors).
The survey and community mapping will build on the work of the recent Multi-donor Trust Fund
for Sustainable Urban Development, which financed the development of a Geographic
Information System cartography for the GCMA. This phase will also finance one pilot integrated
package in each municipality, to enable the Project to gain experience in implementing an
integrated package of urban infrastructure and social services investments at community level.
This phase will be carried out during the first 18 months of the Project, and the World Bank will
review the first six packages before their implementation.
7. Main implementation phase. Drawing upon analyses and lessons learned from the
inception phase, the Project will then finance integrated packages of urban and social services
defined and implemented through a community mobilization process. This has been the
trademark of successful initiatives such as the Urbanismo Social that transformed the most
violent and marginalized communities in Medellin, Colombia.
Project Components
Component 1 – Integrated Package of Small-Scale Urban Infrastructure and Violence
Prevention Interventions (US$36.1 million):
23
8. This Component will finance the identification, preparation and execution of
integrated packages of small-scale infrastructure and crime and violence prevention
activities. This includes (a) carrying out of technical assistance, capacity building and
community mobilization activities to support the identification and preparation of subprojects in
selected communities; (b) carrying out of small-scale infrastructure investments and/or
prevention activities (Subprojects) in the territory of the urban or peri-urban (mixto) selected
communities. Project funds will be distributed between participating municipalities as follows:
83 percent will be allocated equally to each municipality, 10 percent based on population, and 7
percent based on number of communities. The communities where the six integrated packages
will be implemented during the inception phase will be defined on the basis of prioritization
criteria agreed between the PIU within the FSS, MGCS, MINGOB, and agreeable to the World
Bank. During the main implementation phase, the Project will support a demand-driven
approach whereby eligible communities will present proposals for participation in the Project.
9. For communities to be eligible, they must meet certain criteria. These include that
they must: (a) be primarily urban or peri-urban with high population density; (b) have a
functioning COCODES; and (c) be located on either public land, land demonstrably owned by
that community, or land that is in the process of becoming regularized. The Project will not fund
investments on illegally occupied land that is privately owned.
10. After a shortlist of eligible communities has been identified, eligible communities
will participate in a community-driven diagnosis. Communities will be invited to participate
in a community-driven diagnosis to identify their local infrastructure needs, the main drivers of
risk for crime and violence, and priorities. The MGCS, in coordination with MINGOB and the
six municipalities, will support the respective COCODES through this process, and ensure that
each community’s plan is aligned with municipal and regional development programs.
11. Each community will prepare a proposal of an integrated package for financing. The proposal should provide evidence of effective community organization and preliminary
identification of needs (including in-kind contributions from the community). The menu of
possible interventions includes, among others:
a) widening, rehabilitation and paving of existing roads and pedestrian walks;
b) construction or rehabilitation of storm water drainage;
c) installation of water supply and sanitation household connections;
d) construction of primary waste water treatment. The Project will not finance treatment
plants;
e) installation of electricity connections and public lighting. The Project will seek
environmentally and financially sustainable solutions, and will pay particular attention to
spaces used by women where the risk of assault is high;
f) construction of small-scale stabilization walls in areas vulnerable to natural disasters;
24
g) rehabilitation (including reforestation) of public spaces and other physical improvements
to the community that enhance aesthetic appeal through the incorporation of Crime
Prevention through Environmental Design principles;31
h) construction of multi-purpose community centers (where programs for conflict mediation
and youth skills development, for example, could take place);
i) installation of containers for solid waste management;
j) beautification of selected communities through: (i) implementation of cleanup programs;
and (ii) strengthening of public awareness programs to improve cleanliness and
infrastructure maintenance of selected communities;
k) carrying out of public awareness and education campaigns to promote attitudes and
norms that foster peaceful coexistence, conflict resolution and gender equality;
l) conducting job preparation training aimed at improving job readiness skills, particularly
for youth;
m) carrying out of gender-sensitive training to address high rates of school dropouts, such as
after school and recreational activities, tutoring, and mentorships;
n) conducting after-school programs that combine mentoring, recreational, and cultural
activities (for example, youth leadership, music and art programs, skills development
courses, and tutoring services);
o) conducting capacity-building training in schools for the purpose of school violence
prevention, such as conflict resolution and mediation, and cleaning school public spaces;
p) training community-based networks on domestic violence prevention; and
q) training parents on parenting and effective communication, and teaching strategies for
consistent discipline for the purpose of preventing child abuse.
12. Primary waste water treatment will be eligible for financing under Component 1
subject to review and approval by the World Bank on a case-by-case basis. The World
Bank’s review will take into consideration the technical, topographic and financial specifications
of the integrated package as well as the population density and the demographic characteristics
of the communities. In particular, the World Bank will review the integrated packages to ensure
there is no risk of contamination of sources of drinking water, population densities do not exceed
the maximum recommended, and the integrated packages do not increase risks to natural
disasters. The Project will not finance sewerage treatment plants.
13. Submitted proposals will be reviewed by an Evaluation Committee, including
representatives of the PIU, MGCS, MINGOB and the six municipalities. As many as four
semi-annual rounds of proposal evaluation may take place over the course of the Project. The
composition of the Evaluation Committee and processes for selection and endorsement of
proposals for financing are described in the OM. In addition to quantitative criteria, the
Evaluation Committee will conduct field assessments and focus interventions on sub-
neighborhoods where poverty, poor services, and high risk for crime and violence are
concentrated. Selection criteria will include, inter alia, total expected beneficiaries; percentage of
the community without access to public services, including piped water, sanitation, solid waste
31
Crime Prevention through Environmental Design is a multi-disciplinary approach to deter criminal behavior
through environment design. The goal of this approach is to prevent crime by designing a physical environment that
positively influences human behavior.
25
collection, public lighting, public recreation spaces and/or community centers; and percentage of
the community characterized by known risk factors for crime and violence, such as single-parent
households, unemployed dropout youths, homicide rate, and rate of physical assaults.
14. Following the selection of proposals to be financed, a process of prioritization of
interventions will take place in each selected community. Under the guidance of the VMP of
MINGOB and with the participation of the MGCS and participating municipalities, the PIU will
coordinate the application of the Community-based Violence Prevention Methodology adapted
for the Project for the identification and prioritization of urban infrastructure and crime and
violence prevention interventions to be financed under each integrated package. Each
participating community will have to develop a crime and violence prevention plan that
identifies the main risks for violence as well as vulnerable groups. The Community Violence
Prevention Commissions and COCODES, based on local diagnoses elaborated in the plans, will
be able to identify and select from the Project’s menu of interventions the most appropriate
combination of activities to be implemented in their communities.
15. The use of information and communication technology tools will be explored to
enhance citizen engagement in the prioritization process. For example, a web-based system
of preference prioritization (pair-wise voting) may be customized to each of the selected
communities. To overcome the challenges associated with the digital divide, outreach activities
may be conducted using handheld devices to collect feedback from the population. As an option,
information and communication technology tools may also be used to collect feedback from
residents of selected areas on the quality of urban and social services delivered. This system
enables the simultaneous implementation of targeted surveys with direct beneficiaries (for
example, according to area, sector, gender), allowing for real-time data collection and analysis.
The analytical tools will enable the identification of emerging trends and problems, ultimately
allowing adjustments whenever appropriate.
16. Under this Component, the Project will finance expenses related to the VMP’s
support to the application of the Community-based Violence Prevention Methodology in
the selected communities. This includes: (a) providing guidance and training tools for the
application of the community-based model for violence prevention, including focus groups and
exploratory walks; (b) developing diagnostic and participatory planning tools to identify violence
prevention interventions to be included as part of the integrated packages; (c) providing
equipment and technical assistance to the VMP to enhance coordination with local stakeholders;
and (d) reproducing and disseminating educational and communications materials related to the
strategic pillars of the NVCP Policy, including the prevention of armed violence, violence
against women, children, and youth, and road violence and accidents.
17. The works identified by the selected communities will be packaged and procured
through a small number of contracts to simplify implementation, which will be carried out
with community supervision and monitoring. Social and capacity building interventions will
be provided in coordination with the infrastructure works and other agencies and/or ministries.
Each package is expected to cost between US$1 million and US$1.2 million, including design
and supervision.
26
18. Component 1 may also finance the acquisition of land and provision of
compensation as needed (including cash compensation and other assistance paid for involuntary
resettlement) related to the implementation of the relevant resettlement plans under the Project’s
RPF. The request to finance land expenditures and resettlement compensation with loan proceeds
of the Project was approved by the World Bank in April 2014.
Component 2 – Technical Assistance for Capacity Building (US$4.3 million):
58. This Component seeks to strengthen the institutional capacity of MINGOB, CIV-
FSS, the MGCS, and participating municipalities. It will do so through:
a) M&E activities, including a baseline survey, community mapping, victimization surveys
and data collection. This Component will support the collection of baseline, mid-term and
completion, impact tracking and assessment data as well as an initial baseline survey and
community mapping for the Project. This exercise will be carried out early in Project
implementation (months 1-6) and to enable the MGCS to obtain the necessary information to
implement the Project effectively. In addition, this Component will support the
implementation of a victimization and safety perception survey in a representative sample of
households in selected communities. MINGOB will coordinate with the National Institute of
Statistics to apply tools developed for the national victimization survey in the MGCS and in
communities selected for the Project (one at the beginning and one at closing).
b) Technical assistance to strengthen transparency and community engagement. The Project
will finance support to the MGCS to build its capacity in the use of information and
communication technology tools to strengthen transparency of its activities and promote
robust community engagement with respect to the identification of priority areas for
investment and monitoring of Project implementation. Investing in this organizational
capacity will be useful beyond the scope of this Project, enabling the MGCS to replicate
lessons learned from this initiative in future community investments.
c) Support to strengthen municipal cadasters. In general, participating municipalities will bear
the responsibility for maintaining Project-funded investments after completion. However,
municipalities have limited operating budgets, as they are highly dependent on central
Government transfers and have low revenue collection capacity, largely because of
inadequate cadastral systems. In Guatemala, property tax revenue flows to municipalities,
who are wholly responsible for the administration and collection of this tax. Assuming that
the fiscal transfers upon which municipalities depend remain largely constant, an option for
municipalities to access additional resources will be through strengthening their respective
local cadasters for the purpose of increasing revenue collection and thereby, the amount of
resources available to maintain Project investments. To that end, the Project will support: (i)
an assessment of participating municipalities’ respective cadaster systems to identify gaps in
data collection and standardization; and (ii) design of a strategy (including an estimated
budget) for the strengthening of each of said cadaster systems. Improving the cadaster will
benefit participating municipalities with respect to revenue collection, land use planning
capacity, and thereby strengthen the Project’s capacity for fiscal sustainability. Currently, the
27
six municipalities vary with respect to existing capacity to leverage their cadasters.
Amatitlán, for example, does not have a functioning cadastral management system, satellite
imaging or orthophoto with which to manage the municipal cadaster; Villa Canales has a
system most recently updated with Geographic Information System data in 2006 that
captures only 50 percent of the municipality; and San Miguel Petapa’s cadaster data covers
only 30 percent of the municipality, and its land registry team uses spreadsheets in the
absence of available satellite and a more robust data management system. Even Mixco, one
of the larger and relatively more capable municipalities, reports that its cadastral database
currently reflects only 60 percent of properties. The Project will leverage lessons learned
from the World Bank-financed Land Administration II Adaptable Program Loan in
Guatemala (P087106, approved on December 14, 2006), which has been engaged in – among
other activities – building efficient, accessible cadastral services in targeted municipalities
(none of which are located within the MGCS).
d) Technical assistance on territorial planning, inter-municipal coordination, and service
delivery. The Project will finance support for the MGCS and participating municipalities to
(i) develop a territorial coordination strategy; (ii) identify and map communities located in
areas exposed to disaster risk, and develop risk mitigation strategies accordingly; and (iii)
carry out studies to explore options for strengthening municipal services in participating
municipalities, including solid waste collection within the MGCS. Building on
SEGEPLAN’s 2012 Territorial Diagnosis of the Central Region, the Project will provide
support to the MGCS and participating municipalities for the development of a Territorial
Coordination Strategy, including a suggested list of specific MGCS-level Projects that could
be undertaken. This activity will build on the recently completed work to develop an
integrated metropolitan cartography for the Department of Guatemala. The Project will also
explore options to improve service delivery, including solid waste collection within the
MGCS, which represents an important challenge but also a natural area for opportunity for a
supra-municipal body such as the MGCS.
e) Technical assistance and support for Crime and Violence Observatories. Finally, this
Component will finance a) provision of technical assistance to MINGOB to strengthen the
national crime and violence observatory, including: (i) developing a web-based system to
collect data; and (ii) carrying out capacity building activities for said national crime and
violence observatory’s staff to analyze and disseminate collected data; and b) provision of
support to MINGOB, MGCS and participating municipalities for the design and development
of municipal crime and violence observatories in each of the participating municipalities and
an inter-municipal crime and violence observatory within the MGCS. The Project will
support development of a “Crime and Violence Information System” to collect and store
basic information on specific types of crimes (i.e., homicides, domestic violence, and sexual
assaults)32
for the six MGCS municipalities. Data will be collected, validated, and analyzed
by relevant entities of each municipality (such as hospitals and local police) and then
aggregated into an integrated web-based system. This system will offer the capability of
generating reports and geo-referenced maps (for example, by type of incident), and will be
32
These categories were some of the most prevalent, according to the directors of the Citizen Security Commissions,
in the six municipalities.
28
coordinated with the National Violence Observatory supported by the VMP. Observatory
staff will be trained in data management, analysis and preparation of periodic reports. These
reports will be presented to local authorities to support the design and evaluation of
prevention and crime control interventions. In addition to the municipal level Crime and
Violence Observatories, the Project will support the development of an Inter-Municipal
Observatory within the MGCS, and the strengthening of the National Violence Observatory.
Component 3 – Project Management, Monitoring and Evaluation (US$4.5 million):
19. Component 3 will provide support to the PIU for Project management, coordination
and evaluation activities. It will do so through, inter alia: (a) carrying out project audits; (b)
conducting Project outreach activities; (c) carrying out mid-term and impact evaluation surveys
in order to evaluate the Project’s impacts; (d) providing technical support on procurement,
safeguards and financial management (FM) requirements, including the hiring of the PIU’s staff;
and (e) financing operating costs. The Government will cover the costs of staffing for the
following key positions of the PIU, including: the PIU coordinator, an infrastructure and
environmental management coordinator, a procurement specialist and a FM specialist. Finally,
while data collection will be undertaken under Component 2 as described above, day-to-day
M&E activities of the PIU will be financed by Component 3.
20. This Project will be implemented in close coordination with other complementary
development partner support. The PIU will coordinate implementation of the proposed Project
with IDB, currently implementing a complementary US$1.2 million technical assistance to the
MGCS supporting the design of infrastructure improvement interventions in selected
communities. The World Bank and the MGCS will also coordinate with key donors, such as the
UNDP, USAID, GIZ, and AECID, which all have ongoing activities on crime and violence
prevention. Specific areas for coordination include: (a) a UNDP program to improve information
systems on violence prevention, support and attention to victims of violence, and conflict
resolution mechanisms at the local level; (b) USAID activities targeting youth at risk, community
policing, and strengthening criminal justice institutions through citizen engagement; (c) a GIZ
initiative on youth employment; and (d) an AECID program to prevent violence against women.
29
Annex 3: Implementation Arrangements
GUATEMALA: Urban Infrastructure and Violence Prevention Project (P143495)
I. Overview of Implementation Arrangements
1. The Project will be implemented by the CIV, through the FSS. The FSS was
established in 2009 through Governmental Decree (Acuerdo Gubernativo) 71-2009 as an
executing agency within CIV to undertake programs, Projects and works under CIV’s mandate.
Overall, the FSS is a well-established entity with key technical and fiduciary staff and has in
place the necessary basic arrangements for the implementation of infrastructure projects,
including experience with other development agencies.
Figure A.3.1. Overview of Implementation Arrangements
Technical Committee
Project specific committee with representation from the FSS, MGCS and
MINGOB
Role: Technical oversight and validation of community selection process and
integrated packages
Implementing Agency
CIV through the FSS) supported by a dedicated PIU
Role: Project execution including procurement, disbursement, accounting and
financial reporting, safeguards, auditing, and M&E
Support received: Dedicated PIU financed under Component 3.
MINGOB
VMP
Role: Provide technical assistance
for the development of the
participatory diagnostics through
the implementation of the
ministry’s Community-based
Violence Prevention Methodology
Support received: Equipment and
incremental operations costs
under Component 1. TA under
Component 2. Dedicated liaison
officer financed under
Component 3.
MGCS
Role: Coordinate the Project implementation with the participating
municipalities
Support received: Incremental operations costs under Component 1. TA
under Component 2. Dedicated liaison officer financed under
Component 3.
Participating Municipalities
Six municipalities composing the MGCS
Role: Support community engagement in their respective eligible
communities. Operations and maintenance of the
Support received: Capacity building of eligible communities and
integrated packages in selected communities under Component 1. TA
under Component 2.
30
2. Given that FSS has no experience managing World Bank financing, it has
committed to hiring a technical PIU team acceptable to the World Bank and has agreed on
a FAP to build operational capacity. This is expected to help mitigate fiduciary risks, including
transparency related activities and complaints mechanisms. The World Bank will work closely
with the PIU to ensure that it builds robust fiduciary and safeguards management processes, and
provide technical assistance and training as needed.
3. The implementation of the Project will be undertaken in coordination with three
groups of institutions, which have different roles and responsibilities under the Project
(Figure A.3.1). The first group is the MGCS, which comprises the municipalities of Amatitlán,
Mixco, San Miguel Petapa, Santa Catarina Pinula, Villa Canales and Villa Nueva. Second
includes the municipalities that comprise the MGCS. Finally, the third is MINGOB, specifically
the Crime and Violence Prevention Unit of the VMP. The working relationships and roles and
responsibilities of the PIU within the FSS, CIV, MGCS, the six MGCS municipalities, as well as
the coordination with MINGOB are spelled out in detail in the Project’s OM.
4. The Ministry of Public Finance will sign the Project’s Loan Agreement with the
World Bank for the Project to be implemented by CIV through FSS. CIV-FSS will then
enter into a Subproject Agreement with the MGCS and the Participating Municipalities to ensure
their participation in the Project and their commitment to operate and maintain the investments
supported under the Project. In addition, CIV-FSS will enter into an Inter Institutional
Agreement with the MGCS and an Inter Institutional Arrangement with MINGOB, respectively,
to specify the roles and responsibilities of each institution in Project implementation. Both the
Inter Institutional Agreement and the Inter Institutional Arrangement will be duly executed by
the parties thereto prior to Loan effectiveness.
II. Organizational Structure and Roles and Responsibilities
5. CIV will establish a PIU within FSS for the day-to-day oversight of Project
implementation. Though a ministerial resolution, CIV will establish a PIU within the FSS no
later than three months after effectiveness, to be responsible for all aspects of implementation,
including procurement, disbursement, accounting and financial reporting, environmental and
social safeguards, auditing, and M&E, coordinating as needed with FSS’ line units. The PIU’s
organizational structure (Figure A.3.2) includes a PIU coordinator to oversee Project
implementation, including: (a) technical Project management (including design and execution of
the Project); (b) fiduciary aspects of the Project (including budgeting, financial management,
accounting and procurement); and (c) social and environmental management of the Project
(including community outreach and the implementation of safeguards instruments). Other key
PIU positions include an infrastructure and environmental management coordinator, a M&E
specialist, an environmental specialist, a social specialist, a procurement specialist and a FM
specialist. These positions will be selected under terms of reference included in the OM and
approved by the World Bank. The procurement and FM specialists are expected to be appointed
within three months of Loan effectiveness. The Government will cover the costs of staffing for
the key PIU positions outlined above, estimated at around US$2 million for the Project
implementation period. They will have signing authority (‘cuentadancia’) to facilitate timely
implementation. Until the PIU is legally established and key positions are hired, the FSS will
31
designate four line staff with signing authority, who on a transition basis, will be responsible for
initial technical and administrative processes to avoid delays in implementation. If necessary, the
FSS may also make any necessary temporary appointments prior to Loan effectiveness.
Figure A.3.2 Structure of the PIU within the FSS
6. While the PIU will be responsible for overall Project management, including
fiduciary aspects, the MGCS, MINGOB and the six participating municipalities will be the
key implementation actors as well as the beneficiaries of Project activities. Specifically, the
implementation of Component 1 will require close coordination between the above-mentioned
institutions to ensure that implementation is carried out in accordance with the OM. The MGCS,
MINGOB, and participating municipalities will be beneficiaries of technical assistance and
equipment under Component 2. The PIU and MGCS will also coordinate with the Crime and
Violence Prevention Unit of the VMP of MINGOB on the implementation of guiding principles
on community-based violence approaches in the identification, prioritization, implementation,
and oversight of violence prevention interventions supported by the Project. Coordination
between the PIU within the FSS and MGCS, MINGOB, and the Municipalities, and a clear
understanding of the roles of each institution, will be crucial to ensure sound implementation.
The Project’s OM clearly outlines the relationship, roles and responsibilities of all actors.
7. A high-level Technical Committee, with representatives of the FSS, MGCS, and
MINGOB, will be created within one month of effectiveness to oversee Project
32
implementation. The Technical Committee will include the PIU coordinator, the President
and/or Manager of the MGCS, as well as representation from the VMP of MINGOB, and will
meet quarterly to review and approve annual work plans and discuss strategic-level issues related
to the Project. The detailed description of the role of the Technical Committee is included in the
Project’s OM.
8. Implementation of Component 1 will be the responsibility of the PIU, in close
coordination with the MGCS, MINGOB and technical experts from the six municipalities,
to ensure the coherence of interventions with municipal development plans and crime and
violence prevention strategies. The PIU, in coordination with the MGCS and MINGOB, will
manage the competitive process of selection of proposals to be financed under this Component
(including outreach at the community level with COCODES, and clarifying neighborhood
eligibility criteria, among others). An Evaluation Committee will be created within three months
of effectiveness to select proposals for financing and will include representatives from the PIU
within FSS, MGCS, MINGOB and the six municipalities. Following the selection of proposals to
be financed under Component 1, a process of prioritization of activities will be undertaken by the
PIU, in coordination with the MGCS and MINGOB, as detailed in the Project’s OM. The PIU
will then procure services for the preparation of technical specifications and terms of reference
for the civil works. After agreement with the communities (through their COCODES) and the
relevant municipality on the detailed scope of works to be carried out, the PIU will prepare the
appropriate bidding documentation and carry out the procurement process, and contract out the
supervision of works. The PIU will also be responsible for managing environment and social
safeguards aspects of the Project, as well as Project reporting, and M&E. The PIU will also
coordinate aspects related to environmental legal compliance with the MARN to obtain
environmental permits (Autorización Ambiental) for Component 1 interventions, when required.
9. The Rural and Urban Council Law (2002) decentralizes the implementation of
regional and local development plans. This Law aims to facilitate citizen engagement in the
design and oversight of local development plans while also promoting the alignment of national
and sectoral policies at the territorial level. Under this Law, communities identify development
problems, set priorities, and propose actions through their COCODES. The COCODES, in turn,
share the information and advocate to the Municipal Development Councils (Consejos
Municipales de Desarrollo, COMUDES), which are, in turn, responsible for submitting
community action plans to the Departmental Development Commissions (Consejos
Departamentales de Desarrollo, CODEDES).
10. The VMP within MINGOB developed the Community Violence Prevention Model
(2012) to provide guiding principles to COCODES and COMUDES on crime and violence
prevention plans with a territorial perspective. This methodology further establishes the
creation of Violence Prevention Commissions within COCODES. The Project will use existing
community and municipal consultation mechanisms to prioritize integrated packages on crime
and violence prevention. Each participating community will develop a crime and violence
prevention plan consistent with the methodology that identifies the main risk factors for violence
and vulnerable groups. The COCODES, based on local diagnoses elaborated in the plans, will be
able to identify and select the most appropriate combination of activities to be implemented in
their communities from the Project’s menu of interventions outlined in the OM.
33
11. The PIU and MGCS will coordinate closely with the VMP and the Community
Violence Prevention Unit of MINGOB. This coordination is particularly necessary for the
implementation of the guiding principles on community-based violence model in the
identification, prioritization, implementation, and oversights of violence prevention interventions
supported by the Project.
Table A.3.1. Participation Framework under the Urban and Rural Development Law
Level Composition Responsibilities under the
Urban and Rural
Development Law
Crime and Violence
Prevention Responsibility
CODEDES Governor of the
Department
Mayors
Departmental Head
of SEGEPLAN
Representatives of
indigenous groups
in the department
Representatives of
women’s groups in
the department
Representatives of
other organizations
at the departmental
level
-Prioritize development needs,
problems and solutions at the
departmental level; formulate
policies, plans, programs and
development Projects in line
with municipal development
plans; present departmental
plans to the National and
Regional Council.
-Supervise implementation of
development Projects and take
corrective measures, if needed.
-Maintain record of MINGOB
maximum public pre-
investment and investment
budgets.
Design departmental
policies on violence
prevention and promote
municipal organization.
Promote inter-institutional
coordination of Projects at
the municipal level and
propose to the CODEDE the
needs in the area of citizen
security for the department.
Identify financing sources
for the implementation of
plans with the assistance of
the VMP.
COMUDES Mayors
Deputy-mayors
and council
members as
determined by the
municipal
corporation
Representatives of
the COCODES,
up to 20, as
designated by the
coordinators of the
COCODES
Representatives of
the public
institutions with a
local presence
Representatives of
selected civil
organizations
-Promote integrated municipal
development programs and
Projects for children,
adolescents, youth and women.
-Ensure that development
Projects/programs are
formulated on the basis of needs
prioritized by the COCODES.
-Provide follow up on the
implementation of Projects and
programs and propose
corrective measures, when
needed.
-Propose fund distribution for
public pre-investment and
investment on the basis of
resources available and on
COCODES needs.
Assess interventions on
violence prevention for
municipalities.
Facilitate inter-institutional
coordination as well as
inter-municipal synergy on
prevention activities.
Supervise and support
community participation,
through the identification of
needs at the community
level and inform the
CODEDE on needs
prioritized.
COCODE Community
Assembly,
comprised by
-Formulate development
policies and Projects, based on
prioritized needs by community
Identify potential prevention
interventions, based on
problems, needs and
34
residents
Coordinating
Entity
and proposed them to the
COMUDE.
-Follow up and evaluate the
implementation, effectiveness
and impact of development
policies and programs.
opportunities identified by
the community, so as to
foster social cohesion
among residents and
promote community
participation in municipal
commissions.
Comisiones
Comunitarias
de
Prevención
Community
residents
-Formulate community
preventions plans using the
Community Violence
Prevention Methodology of the
UPCV.
Formulate community
preventions plans using the
Community Violence
Prevention Methodology of
the UPCV.
III. Financial Management, Disbursement, and Procurement
Financial Management Arrangements
12. The FSS, through the PIU, will be responsible for FM for the proposed Project. FSS,
through the PIU, will be directly in charge of FM tasks, in coordination with the FSS’
Coordinación Financiera and CIV’s Administrative and Finance Unit, as needed. These tasks
include inter alia: (a) budget formulation and monitoring; (b) cash flow management (including
processing payments and submitting loan withdrawal applications to the World Bank); (c)
maintenance of accounting records (including the administration and maintenance of an
inventory of Project assets); (d) preparation of in-year and year-end financial reports; (e)
administration of underlying information systems; and (f) arranging for execution of external
audits. In addition, the FSS will be responsible for implementing the governance and
transparency aspects of the Project. To properly support FM tasks, the PIU will include a FM
specialist under terms of reference approved by the World Bank.
13. On the basis of a FM assessment carried out by the World Bank, the Project’s
overall FM risk was assessed as substantial. While FSS is the responsible implementing entity,
Project implementation requires the FSS to interact with the MGCS, the main technical
counterpart, and MINGOB. Moreover, although the FSS has the basic FM arrangements in place
and extensive experience in the implementation of infrastructure Projects, it is not familiar with
World Bank requirements, and its internal administrative and finance arrangements may become
cumbersome. However, key PIU positions will have signing authority (cuentadancia) which will
facilitate timely implementation.
14. The FSS has agreed to a FAP including procurement and FM measures to ensure
adequate FM capacity is in place for Project execution. The FAP includes measures related to
staffing, internal control procedures, accounting, financial reporting and transparency
mechanisms to strengthen capacity at the Project level and mitigate risks. With the
implementation of the FAP, the FSS will have the required capacity to carry out FM tasks. The
FAP includes the following FM risk mitigation measures:
(i) Hiring of trained staff who possess the experience and credentials required to ensure
responsible Project management;
35
(ii) Description, in detail, of FM and procurement related procedures and operational
responsibilities in the OM;
(iii) Inclusion of contract management mitigation measures in the OM;
(iv) Preparation of semi-annual interim FM reports linking physical progress and financial
execution;
(v) Hiring of external auditors acceptable to the World Bank within three months of Project
effectiveness with an expanded scope of work and interim internal control reports to be
available to the World Bank; and
(vi) Inclusion of a complaint mechanism based on social audit for integrated packages.
Programming and Budget
15. Overall, budget preparation will be carried out following local requirements. The
PIU will be in charge of preparing the Annual Operating Plan and budget, in close coordination
with the MGCS and MINGOB, which will then be approved by the Project’s Technical
Committee and incorporated into FSS’ and CIV’s annual budget. The approved Annual
Operating Plan and budget will become the basis for the preparation of the annual Procurement
Plan. For Project monitoring purposes, the budget composition (Estructura Programática) to be
included in Guatemala’s integrated accounting system (SICOIN) will use the Project’s
Component/category classification. The OM includes specific procedures for the preparation of
the annual Annual Operating Plan and budget, coordination mechanisms with the MGCS and
MINGOB, as well as internal mechanisms for approval, including related budget modifications.
Accounting and Financial Reporting
16. Accounting Policies and Procedures and information system. The accounting
regulatory framework for the Project has three components. These are: (a) Guatemala’s laws
on budget management applicable to the FSS; (b) the FSS’ institutional regulations and the
Project’s OM; and (c) budgetary and accounts classification to be used for Project accounting.
The financial activities of the Project (especially budget and budget execution) will be recorded
in SICOIN. Information recorded in SICOIN – classified by Project component and cost
category, as described above —will be used for the preparation of financial reports and
statements for the World Bank using Excel. The Government’s budgetary classification will be
used as a chart of accounts for accounting. Adequacy of procedures followed for the preparation
of financial reports will be closely reviewed by the World Bank, mainly to ensure the integrity
and reliability of financial information.
17. Processes and procedures. Overall, the FSS has well-established processes and
procedures, which will be used for the proposed Project. However, there is a need to ensure
timely and smooth interaction with the MGCS and MINGOB, and internally in the FSS, among
the PIU, the FSS’ line units (for example, Coordinación de Operaciones and Coordinación
Financiera), and CIV’s Administrative and Finance Unit. While there are clear roles and
responsibilities, the interaction among different units may become cumbersome, and lead to
excessive requirements of supporting documents, especially for payment processing. The FSS is
streamlining certain procedures, as reflected in the Project’s OM. These will need to be carefully
revised during the first year of Project implementation.
36
18. Financial Reports. On a semi-annual basis, the FSS will submit to the World Bank,
an unaudited interim financial report, as well as annual financial statements. These reports
will contain at least: (a) a statement of sources and uses of funds and cash balances; (b) a
statement of budget execution per activities (with expenditures classified by the major budgetary
accounts); and (c) a statement on physical progress linked with financial execution by integrated
package/work. The interim reports will be submitted not later than 45 days after the end of each
semester. On an annual basis, the FSS will prepare Project financial statements, including
cumulative figures of the interim financial reports. The financial statements will include
explanatory notes in accordance with national accounting standards as well as confirmation that
Loan funds were used in accordance with the intended purposes as specified in the Loan
Agreement. These financial statements, once audited, will be submitted to the World Bank not
later than six months after the end of the Government’s fiscal year (which follows the calendar
year). The supporting documentation of the semester and annual financial statements will be
maintained on FSS’ premises and made easily accessible to the World Bank implementation
support missions and to external auditors. Documentation should be maintained at least until
three years after Project closing or the submission of the last audit report, whichever is latest.
19. Flow of Funds. The FSS will open a segregated Designated Account, or Cuenta
Secundaria, under the Multilaterals’ Single Treasury Account system in the Ministry of
Public Finance in United States dollars, to be used exclusively for deposits and withdrawals
of Loan proceeds for eligible expenditures. Following the existing procedures for the
processing of payments, as expenditures arise, funds deposited in the Designated Account will be
withdrawn to a secondary tier operational account held at a Commercial Bank acceptable to the
World Bank from which payments will be made to suppliers. After Loan effectiveness and after
the Designated Account has been opened, the FSS will submit its first disbursement request to
the World Bank up to the established ceiling that will provide adequate financing for the next six
months of forecasted expenditures. For subsequent withdrawals, the FSS will submit the
disbursement request, along with the supporting documentation (Statements of Expenditures), as
established in the Disbursement Letter.
20. Loan proceeds will be withdrawn by the FSS using the advance method supported
by documentation showing that the Loan proceeds previously withdrawn have been used to
finance eligible expenditures. Supporting documentation will be in the form of Statement of
Expenditures. The use of special commitment procedures for the proposed Project will not be
needed. However, should the need arise during implementation, the World Bank will evaluate it
and if granted, agree to their use through an amendment to the Disbursement Letter. The Project
may also use reimbursement or direct payments.
21. The disbursement deadline date is four months after the closing date specified in the
Loan Agreement.
22. Table A.3.2. shows disbursement by Expenditure Category.
Table A.3.2. Disbursement by Expenditure Category
37
Category Amount of the Loan
Allocated
(expressed in US$)
% of Expenditures
to be Financed
(inclusive of taxes)
(1) Goods, works, non-consulting services, consulting
services, Training and Land Acquisition and
Compensation under Part 1 of the Project
36,120,000
100
(2) Goods, non-consulting services, consulting services
and Training under Part 2 of the Project
4,267,500 100
(3) Goods, non-consulting services, consulting services
(including Project audits), Training and Operating
Costs under Part 3 of the Project
4,500,000 100
(4) Front-end Fee 112,500 Amount payable
pursuant to Section
2.03 of the Loan
Agreement in
accordance with
Section 2.07 (b) of the
General Conditions
TOTAL AMOUNT 45,000,000
Audit Arrangements
23. Internal audit. The organizational structure of the FSS includes an Internal Audit
Unit. It is expected that in the course of its regular internal audit activities related to the
institutional budget, the internal auditors may include Project activities in their annual work
plans. Such audits performed by FSS’ Internal Audit Unit will be available to the World Bank
24. External audit. The annual Project financial statements prepared by FSS will be
audited following International Standards on Auditing by an independent firm and in
accordance with terms of reference, both acceptable to the World Bank. The audit opinion
covering Project financial statements will contain a reference to the eligibility of expenditures,
and will include physical inspection of works and according to World Bank policies will be
public. Audit terms of reference will include an interim semi-annual internal control memoranda
(“management letters”), including review of compliance of procurement processes with the OM
and World Bank procedures. The audit work described above will be financed with Loan
proceeds. External auditors shall be hired no later than three months after effectiveness. Each
audit engagement is expected to cover at least three years.
IV. Strengthening Contract Management
25. Despite improvements over previous decades in public FM and transparency,
challenges to sound expenditure management remain throughout the Project cycle. Based
on experience with infrastructure Projects, both in Guatemala and throughout the LAC region,
the World Bank team identified several areas of Project management and control that have been
historically weak in similar Projects: (a) contracting processes; (b) contract management; and (c)
ensuring transparency throughout the Project cycle. Actions within these three areas have been
incorporated into the design of the Project and are included in the OM.
38
V. Fiduciary Action Plan
26. The FAP is presented in Table A.3.3.
Table A.3.3. FAP Action Timing
Resp.
Entity
1. Appointment of qualified procurement specialist based on terms
of reference satisfactory to the World Bank
Within 3 months of
Project effectiveness FSS
2. Preparation of a Procurement Plan (for the first 18 months of
the Project) defining the procurement processes subject to prior
review.
Completed FSS
3. Update of the Procurement Plan and inclusion into relevant
systems
Within 1 month of Project
effectiveness FSS
4. Inclusion of contract management, procurement and FM
procedures and mitigation measures in the OM, including for
example, selection processes and committee composition; contract
formats for works, goods and services; tender participants
background information; and external audit terms of reference
Completed
FSS
5. Appointment of qualified FM specialist based on terms of
reference satisfactory to the World Bank
Within 3 months of
Project effectiveness FSS
6. Training for FSS staff on World Bank policies and OM
procedures to Completed
World
Bank
7. Contract external auditors, based on short list satisfactory to the
World Bank
Within 6 months of
Project effectiveness FSS
VI. Procurement Arrangements
27. Procurement for the proposed Project will be carried out by the PIU in close
coordination with the MGCS and MINGOB. Procurement will be carried out in accordance
with the provisions of the Loan Agreement, the World Bank’s Procurement Regulations for
Borrowers under Investment Project Financing (July 2016), and the OM.
28. A Project Procurement Strategy for Development was prepared by the Borrower
for the proposed Project. It describes how the procurement for this operation supports the
development objectives of the Project and delivers Value for Money under a risk-based
approach. It also provides adequate justification for the selection methods and thresholds in the
Procurement Plan. Open competitive procurement is the World Bank’s preferred procurement
approach, whenever possible, to maximize fairness of opportunity to bid, and approaching the
international market is appropriate for situations where the participation of foreign firms will
increase competition and may enhance the achievement of best Value for Money and fit for
purpose results.
29. Works to be financed under this Project are small-scale infrastructure. These
include refurbishments as well as minor works such as widening, rehabilitating and paving
existing roads, sidewalks, stairways, improving water drainage, installing water supply and
sanitation connections for households, building stabilization walls, and construction of multi-
purpose community centers, and recreational areas. Civil works will be financed under
39
Component 1 for which individual communities will compete for the use of funds based on
eligibility and selection criteria described in the OM. Open international competitive
procurement will be used, except for contracts estimated to cost below the equivalent of
US$5,000,000 which may be procured following national open competitive procurement.
Improvement of public lighting (utility services) may be justified as direct contracting with the
only provider available in the municipalities of this Project.
30. Goods to be financed under this Project include school materials for extra-
curricular activities and teaching, solid waste containers, vehicles, office and information
technology equipment, including computers, servers and software, among other. Open
international competitive procurement will be used, except for contracts estimated to cost below
the equivalent of US$500,000, which may be procured following national open competitive
procurement.
31. Non-consulting services to be financed under this Project include printing services,
media campaigns, data collection, and other services. Contracts estimated to cost below
US$500,000 will be procured following open national competitive procedures.
32. Bidding Documents are included in the OM. Open international competitive
procurement will be bid using the World Bank’s Standard Bidding Documents for Works and
Goods, and the World Bank Sample Bidding Document for the Procurement of Non-Consultant
Services. Procurement under national open competitive and request for quotation procedures will
be conducted using bidding documents agreed with the World Bank and included in the OM.
Request for quotation will only be permitted for contracts for goods and non-consultant services
estimated to cost below US$30,000 and for civil works below US$50,000.
33. Consulting Services to be financed under the Project are for supervision of works,
baseline studies, auditing, urban land planning, youth empowerment programs, technical
assistance, web-based development, and training, among other services. These services will
be rendered either by firms or by individuals, as indicated in the Procurement Plan. For contracts
with firms estimated to cost below $300,000, the short list may be composed entirely of national
consultants.
34. Operating costs refer to reasonable recurrent expenditures that would not have
been incurred by the implementing agency in the absence of the Project. The Project will
finance operating costs, such as office supplies, communication and advertising costs, computers
and equipment maintenance, and per diems for local and international staff, among other
operational expenses. The Project will also finance costs of training courses, travel and per diem
of trainers and trainees, and rental of facilities.
35. All procurement procedures are described in detail in the OM, published on the
FSS’s web page. The OM includes model bid evaluation reports and model reports for the
preparation of short lists.
36. Procurement activities will be carried out by the PIU, however, procurement risk is
rated Substantial. With respect to procurement, the PIU is in charge of consolidating
40
procurement plans, overseeing procurement processes and ensuring compliance with the
procurement and consultant regulations. An assessment of the PIU found certain deficiencies in
terms of weaknesses related to available procurement staff and resources to deal with the large
number of contracts required by the Project. Key issues and risks include: (a) PIU
implementation capacity given the expected high workload; (b) poor coordination of activities
between different institutions involved in the Project; (c) Contraloria’s interventions before
signature of contracts, which may cause bottlenecks; (d) local procurement regulations that
include practices that are not acceptable to the World Bank; and (e) high country procurement
risk. As such, the procurement risk for this Project is considered Substantial.
37. A series of mitigation and corrective measures have been agreed upon. These
include: (a) recruitment by FSS of at least two experienced procurement staff with terms of
reference and qualifications acceptable to the World Bank, to be responsible for the Project’s
procurement function; (b) recruitment by FSS of a full or part-time international procurement
specialist, as needed, with terms of reference and qualifications acceptable to the World Bank, to
coach and support the PIU’s procurement staff and contribute to quality control, especially for
high–cost contracts; (c) implementation of the Project in accordance with an OM acceptable to
the World Bank; (d) carrying out of national open competitive procurement and requests for
proposals using bidding documents agreed upon with the World Bank and included in the OM;
(e) use of Guatecompras, a national contracting and procurement information system, in
accordance with the OM and in alignment with the World Bank’s Procurement Regulations for
Borrowers under Investment Project Financing (July 2016); and (f) adoption of risk mitigation
measures in the Project Procurement Strategy Document (PPSD) based on the market analysis
carried out for the preparation of this document.
38. The Borrower has developed a Procurement Plan for the first 18 months of Project
implementation. It may be updated in agreement with the World Bank annually or as required to
reflect the actual Project implementation needs and improvements in institutional capacity. The
Procurement Plan will be published in the Systematic Tracking of Exchanges in Procurement
System within 30 days of Loan Effectiveness.
39. In addition to prior review supervision, annual supervision missions will be
conducted to carry out post reviews of 1:5 procurement actions.
Details of the Procurement Arrangements Involving International Competition
(i) Works, goods and non-consulting services
41
Table A.3.4. Contract Packages following Open International Competitive Procurement
for civil works, goods and non-consulting services
1 2 3 4 5 6 7
Contract
(Description)
Estimated
Cost (US$)
Procurement
Method P-Q
Domestic
Preferenc
e
(Yes/No)
Review
by Bank
(Prior/
Post)
Expected
Bid-
Opening
Date
Civil works 9,600,00
0
Open international
competitive
procurement
N Prior June 2017
Vehicles 642,000 Open international
competitive
procurement
N Prior May 2017
40. The following procurement processes for works, goods and non-consultant services
are subject to prior review by the World Bank:
All contracts estimated to cost above US$5,000,000 for works;
All contracts estimated to cost above US$500,000 for goods and non-consultant services;
The first national open competitive procurement and request for quotation process for
works, goods and non-consultant services regardless of the amount. All other contracts
will be subject to procurement post review unless otherwise identified in the Procurement
Plan;
Direct contracting processes estimated to cost US$50,000 for works, unless otherwise
identified in the Procurement Plan; and
Direct contracting processes estimated to cost US$10,000 for goods and non-consultant
services, unless otherwise identified in the Procurement Plan.
For all direct contracting processes that are prior review, the justification shall be submitted to
the World Bank jointly with the Procurement Plan, and the justification of the reasonableness of
price along with the draft contract will be subject to prior review.
(ii) Consulting services
Table A.3.5. Consulting Services with Short-list of International Firms 1 2 3 4 5 6
Ref. No.
Description of
Assignment
Estimated
Cost (US$)
Selection
Method
Review
by Bank
(Prior /
Post)
Expected
Proposals
Submission
Date
C-2017-
1 Base line 700,000 QCBS Prior
June 2017
C-2017-
2
Design and
planning of civil
works
240,000
480,000
240,000
240,000
QCBS Prior
2017
2018
2020
2021
C-2017-
3
Supervision of
civil works
360,000
720,000
360,000
360,000
QCBS Prior
June 2017
June 2018
June 2020
June 2021
42
C-2017-
4
Crime prevention
consultancy
1,200,000
2,400,000
1,200,000
1,200,000
QCBS Prior
June 2017
June 2018
June 2020
June 2021
C-2018-
1
National
communication
strategy
US$1.3
million QCBS Prior May 2018
41. The following consultant services processes are subject to prior review by the World
Bank:
All contracts with firms estimated to cost above US$200,000. All other contracts will be
subject to procurement post review unless otherwise identified in the Procurement Plan;
All contracts with firms estimated to cost below US$300,000, the short list may be
composed entirely of national consultants;
Selection of individual consultants estimated to cost above US$100,000. All other
contracts will be subject to procurement post review unless otherwise identified in the
Procurement Plan and/or considered strategic or high risk activities; and
For all direct contracting, activities below US$100,000 will not be subject to procurement
prior review. All activities foreseen as direct contracts shall be agreed and identified in
the Procurement Plan prior to implementation.
VII. Environmental and Social Safeguards
Safeguard Policy Issues
55. Because the specific locations of investments is not yet known, an ESMF was
prepared for the Project by FSS and MGCS, and approved by the Bank. The ESMF
includes the following guidelines: a) EMG; b)RPF; and c) PPVICG. The ESMF will ensure
social and environmental sustainability of the integrated packages as well as compliance with
applicable national laws and the World Bank’s safeguard policies. The EMG of the ESMF
includes, among others:
a) the legal and institutional framework related to the environmental and social context in
the different sectors that the Project will support;
b) the main potential environmental and social impacts of the provision of the integrated
package (access road, electrification, water supply and waste water systems, and others),
and general measures to minimize, mitigate, and/or compensate any negative impacts;
c) the environmental and social management process (including methodologies, tools, and
procedures) for the identification and execution of urban infrastructure Subprojects; and
d) the environmental and social management procedures that the PIU and, specifically, its
environmental and social specialists should take into account during the “Project cycle”
to ensure compliance with national laws to obtain the respective Environmental
Authorization from MARN, and the World Bank’s safeguards policies.
Safeguards Triggered
56. The Project is classified as Category B in accordance with Environmental
Assessment (OP/BP 4.01). Given the technical characteristics of the works proposed and their
43
magnitude, and the communities’ urban location, no significant environmental negative impacts
are foreseen. The Project is expected to bring great benefits to the quality of life of MGCS
residents. Among other activities, the Project will finance improvement or rehabilitation of local
roads, provision of potable water, drainage works, public street lighting, construction of local
recreational parks, school and community centers, and slope stabilization works. In the case of
local roads, for example, rehabilitation, improvement, and maintenance activities will be
completed on existing roads and will not change the character of the roadways. Improvements to
potable water and drainage systems will be small-scale, and public lighting improvements are
expected to be made in existing right-of-ways with minimal impact to existing residences and
businesses. All works require an environmental license or authorization to be issued by MARN;
however, MGCS and MARN agreed on simplified procedures for obtaining Environmental
Authorizations by package of investments (rather than for individual investments) to ensure
environmental legal compliance. Moreover, the first three integrated packages will require the
World Bank’s no-objection from the environmental and social point of view. Starting with the
fourth integrated package, the World Bank’s no-objection will be required only for integrated
packages classified as A or B according to the methodology established in the EMG. These
agreements are outlined in the EMG and the Project’s OM.
57. The Indigenous Peoples (OP/BP 4.10) policy is also triggered. Given that the exact
location of investments is not yet known, the Borrower prepared the PPVICG as part of the
ESMF. These Guidelines outline the steps to be taken at the community level in order to identify
and prepare Community Development Plans that can be funded by the Project.33
The PPVICG
also serve as an Indigenous Peoples Planning Framework (IPPF), and include recommendations
on how the process can be adapted in the case of indigenous communities, so that Community
Development Plans can serve as Indigenous Peoples Plans, and thus conform to the requirements
of the World Bank’s policy on Indigenous Peoples (OP/BP 4.10). The Community Development
Plans will be reviewed by the World Bank prior to approval of the integral packages for
communities, in order to assess their conformity with the Guidelines, and where necessary, the
World Bank Policy on Indigenous Peoples. The five main phases for participatory planning are
as follows:
a) Stakeholder mapping. This involves the identification of the relevant community
structures which will be responsible for preparing the Community Development Plans. In
the case of this Project, these structures will be the COCODES.
b) Capacity building of COCODES and Violence Prevention Commissions. In many
cases, the COCODES may not have the necessary skills or experience to engage in a
participatory planning process, may not have established dedicated Violence Prevention
Commissions, or may not yet have formally registered with a municipality. Therefore, it
will be important to provide training and advisory support to the COCODE members on
the participatory planning process, the role of the COCODES in the community
development process, and on leadership skills.
33
Community Development Plans are plans prepared at the community level that describe the Integrated Package of
Small-Scale Urban Infrastructure and Violence Prevention Interventions.
44
c) Community-based diagnostics. The community-based diagnostic phase involves
participatory research on community priorities, through group consultations with key
stakeholders at the community level.
d) Planning and implementation. Following the identification of community investment
and crime prevention priorities, technical experts from the municipalities and the PIU
will work with the COCODES to prepare specific integrated package proposals, which
can be integrated into packages for design and implementation, following selection.
e) M&E. The M&E phase will use the same tools of participatory research from the
diagnostic phase, but with an emphasis on identifying the results and impacts of the
integrated packages financed under the Project.
58. The process of preparing a Community Development Plan will be adapted for
indigenous communities. These adaptations include screening for indigenous people, consulting
traditional authorities, and collecting data on the socio-economic characteristics of indigenous
people at the diagnostic phase; mobilizing an indigenous peoples advisory council to the
COCODE at the community mobilization phase; adapting planned investments or prevention
activities to ensure they are culturally appropriate at the planning phase; and consulting with
traditional authorities and other indigenous stakeholders on the results of the integrated packages
at the M&E phase. The PPVICG also make provisions for the inclusion of women and young
people in the community decision-making process, as well as for the resolution of conflicts and
grievances that may arise during the process. The Project’s social specialist will be responsible
for ensuring that the community development teams of each municipality follow the
requirements of the PPVICG, and will work with these teams and the relevant community
organizations to prepare Indigenous Peoples Plans acceptable to the World Bank, if required.
The Project’s social specialist will also monitor the implementation of these plans, and will
provide regular reports to the World Bank on their execution.
59. The Project will support a range of integrated packages, some of which may require
minor resettlement impacts. Although these packages will have a small physical footprint,
there are communities where there may be significant encroachment on the right-of-way of
roads, sidewalks, and other public spaces that may be rehabilitated under the Project. In addition,
certain types of integrated packages, such as community centers, may require the purchase of
small amounts of land. Therefore, the World Bank policy on Involuntary Resettlement (OP/BP
4.12) applies, and the Government has prepared, consulted and disclosed the Resettlement Policy
Framework and RPF. These Guidelines specify the following implementation arrangements:
a) The respective municipality’s community development and public works departments
will: identify the properties and assets likely to be affected by the integrated package;
take an inventory of the assets likely to be affected; document the socio-economic
characteristics of the affected people; assess the replacement value of the assets affected
and associated costs; and notify and consult with the affected people on the likely impacts
and their rights under the RPF.
b) The PIU’s social specialist then evaluates the data provided by the municipality on the
resettlement impacts of the Project and verifies whether a resettlement plan is necessary,
whether it would be possible to redesign the integrated package to minimize resettlement
impacts.
45
c) The PIU’s social specialist works with the community development department of the
relevant municipality to prepare and disclose a Resettlement Action Plan (RAP) that
provides details on the assets affected, the characteristics of the households affected, as
well as compensation and other resettlement assistance to be provided.
d) The World Bank task’s team social development specialist reviews the RAP, and
provides guidance on how to ensure it conforms to the provisions of OP/BP 4.12.
e) Following revision after comments from the World Bank, the RAP is disclosed on the
Project website, in a location accessible to the Project’s affected people, and in the World
Bank’s website.
f) Once the RAP has been agreed and disclosed, and the necessary compensation and
assistance has been provided to the Project affected people,34
civil works can commence
on the affected properties.
g) The PIU’s social specialist, along with the community development departments of the
relevant municipality, will be responsible for monitoring and evaluating the
implementation of the RAP, and providing regular reports to the World Bank. The PIU’s
social specialist will also be responsible for ensuring the steps outlined in the grievance
redress process of the resettlement policy guidelines are followed in cases where affected
people are not satisfied with the compensation or assistance provided. This process
involves the use of independent mediators following an initial attempt to facilitate an
agreement by the community development team of the municipality. All grievances, and
their solution, should be recorded in a complaints log.
60. The Physical Cultural Resources (OP/BP 4.11) is triggered. This policy is triggered
because of the potential impact on cultural resources during construction, especially during
movement of material. The ESMF includes Chance Find Procedures as well as measures to
screen for and manage potential impacts on cultural heritage or property that could be affected
by neighborhood development plans.
61. Capacity to implement the ESMF is mixed. During Project preparation, the FSS and
MGCS had the support of the environmental specialists of the municipalities that are part of the
MGCS. However, for Project implementation, it will be necessary to hire a dedicated
Environmental specialist and a Social specialist in the PIU, to ensure compliance with the ESMF
and its guidelines and effective implementation. At the municipal level, implementation capacity
is mixed with larger municipalities, such as Villa Nueva and Mixco, having environmental
specialists, a large community development team, and a well-developed network of COCODES.
However, some of the smaller municipalities will not have access to sufficient staff, and it may
be necessary to use Project resources to hire consultants to assist these municipalities during
implementation. One issue that municipalities face is financing constraints to pay for
compensation for expropriation and associated resettlement costs. Therefore, it will be necessary
to use funds from the World Bank loan to cover these costs. Prior to Project implementation, a
training workshop for the PIU, the MGCS and the municipalities is planned, in order to build
capacity in the use and application of the safeguards instruments.
34
People affected by the Project through land acquisition or resettlement.
46
62. Public consultations were conducted on the ESMF including the RPF, EMG, and
IPPF annexed to the ESMF with representatives of the six MCGS municipalities, and local
civil society and community-based organizations on April 30, 2014. Over 150 people
participated in this meeting. Minutes of stakeholder meetings, including measures proposed to
address grievances, are included as an Annex to the EMG. During the consultation workshop,
participants asked questions about the process of eligibility and selection of communities and
sub-projects, as well as the timing of implementation. No comments/questions that required
changes in safeguards documents were made.
63. The ESMF, including the Resettlement Policy Framework, the RPF and IPPF, was
disclosed to the public on April 30, 2014 both through the public consultation meeting and
on the websites of the MGCS municipalities. Revised versions were subsequently disclosed on
May 6, 2016. The final versions were disclosed through the Government’s (May 6, 2016) and
the World Bank’s website on May 10, 2016.
VIII. Monitoring and Evaluation
64. The PIU within the FSS will be responsible for M&E of Project outcomes and
results. The PIU will include a M&E specialist, who will be responsible for consolidating all
reports and providing information in implementation progress and to the World Bank, including
qualitative and quantitative information on the execution of selected interventions, procurement
and contractual decisions, accounting and financial recording, progress towards outcomes,
safeguards management, outputs and monitoring of indicators, as well as other operational and
administrative matters. Component 2 will finance the initial data collection and community
mapping, as well as targeted M&E studies of selected indicators for eligible communities at mid-
term and completion. Component 2 will also finance the implementation of victimization and
safety perception survey in a representative sample of households in eligible communities.
Component 1 will finance community-level victimization surveys in the selected urban
communities (one at the beginning of the community mobilization process, one at mid-term, and
one at the end of the intervention in each community). Project indicators will leverage the
survey, as appropriate. The Project’s results framework will be updated during implementation
based on the baseline survey and the outcome of the community-driven identification of
interventions.
47
Annex 4: Implementation Support Plan
GUATEMALA: Urban Infrastructure and Violence Prevention Project (P143495)
Strategy and Approach for Implementation Support
1. The strategy for implementation support was developed based on the nature of the
proposed Project and its risk profile. This strategy aims to support the Government of
Guatemala in achieving the PDO. The Implementation Support focuses on risk mitigation
measures identified in the Systematic Operations Risk-rating Tool and standard World Bank
implementation support (including technical, institutional, environmental and social safeguards)
and fiduciary aspects (FM and procurement).
Implementation Support Plan
2. For the execution of the implementation support plan, the World Bank will provide
timely, efficient, and effective support to the implementing partners. The World Bank will
also conduct semiannual implementation support missions and field visits to follow up on Project
implementation. Detailed inputs from the World Bank are outlined below.
Strategic. Formal implementation support missions will meet with the PIU within FSS, and
with MGCS and MINGOB to: (a) review Project activities; (b) reconfirm strategic alignment
of the Project’s multi-sector aspects; and (c) ensure the necessary coordination across
respective stakeholders.
Technical. The first priority will be to support the completion of a survey and mapping of
the communities potentially eligible to receive Project investments. Next, focus will be on
supporting the PIU and MGCS in conducting an effective, transparent community selection
process. Subsequently, focus will turn to implementation of the civil works, crime and
violence prevention interventions, and institutional strengthening defined under Components
1 and 2. Regular field visits will serve to verify compliance with the Project’s OM and
encourage required adjustments to Project activities as needed, given results on the ground.
The World Bank may bring additional technical support if necessary, such as short-term
external technical experts. The World Bank will review technical inputs, including terms of
reference and bidding documents to ensure adequate technical specifications. In addition,
support on FM and procurement aspects will ensure proper preparation of requests for
proposals, bidding documents, and eventual evaluation of bids and proposals.
Safeguards. The World Bank worked with and advised the PIU and MGCS on the
preparation of, and consultation for, the social and environmental safeguards instruments for
the Project. This support will continue throughout Project implementation with regard to the
investments financed under the Project. The Project is required to fully implement the social
and environmental management plans/systems according to the World Bank safeguard
policies and in line with the Project’s OM. There will be multiple construction contracts and
associated works under Component 1 that require adequate supervision.
Fiduciary. The World Bank evaluated the PIU’s capacity and proposed a FAP, which was
agreed with the PIU to ensure adequate procurement and FM capacity is in place for Project
execution. It was also agreed that specific and timely targeted training will be provided by
the World Bank on FM and procurement aspects during the period prior to Project
48
effectiveness to ensure readiness for contracting of civil works once the Project is declared
effective. Continued support will be provided through technical support and field visits by
the World Bank during Project implementation. Implementation support site visits for the
Project’s financial and procurement management arrangements will be conducted semi-
annually and as needed in response to client needs.
Client relations. The World Bank Task Team Leader will: (a) coordinate World Bank
support to ensure consistent Project implementation, as specified in the Loan Agreement and
the Project’s OM; and (b) meet regularly with the PIU, MGCS, MINGOB and Ministry of
Public Finance representatives to monitor Project progress (including the mid-term review)
in achieving the PDO and address implementation roadblocks, as they may arise.
3. The main focus with regards to support to implementation during the first 12
months and thereafter is described in Table A.4.1.
Table A.4.1. Estimated Implementation Support Time Focus Skills Needed Resource
Estimate
(Staff
Weeks/Year)
First 12
months
Survey / mapping of communities Urban Economist 12
Procurement training, Procurement review of bidding
documents Procurement Specialist
3
Technical review of terms of reference, technical reports and
bidding documents Technical Specialists
4
FM training and implementation support FM Specialists 3
Social safeguards – implementation support and training Social Specialist 2
Environmental safeguards – implementation support and
training
Environmental
Specialist
2
Public safety enhancement – implementation support and
training
Crime and Violence
Specialist
4
Project management and Project implementation support
coordination Task Team Leader
10
After
month
13
Procurement review of bidding documents Procurement Specialist 2
Technical review of the terms of reference, technical reports
and bidding documents Technical Specialists
5
FM training and implementation support and training FM Specialists 2
Social safeguards – implementation support and training Social specialist 2
Environmental safeguards – implementation support and
training
Environmental
Specialist
2
Public Safety Enhancement – implementation support and
training
Crime and violence
Specialist
4
Project management and Project implementation support
coordination Task Team Leader
8
49
Annex 5: Crime and Violence Prevention Context
GUATEMALA: Urban Infrastructure and Violence Prevention Project (P143495)
Drivers and Dynamics of crime and violence
1. Guatemala struggles with high levels of crime and violence, which impose a heavy
burden on the country’s development, and are among the key constraints to investments,
productivity, and security of people and property. Guatemala saw a decrease in homicide
rates from 2009-2011, despite a marked increase in Central America’s Northern Triangle.
Although there was a slight increase in 2012 when the rate reached 39.9 per 100,000 people,35
the national murder rate has declined overall from 46.4 in 2009 to 29.5 in 2015.36,37
Still,
research shows that country rates are above the LAC average, and three times as high as the
world average.38
Figure A.5.1. Guatemala’s Homicide Rate per 100,000 Inhabitants 1996-2015
Source: National Civil Policy and National Institute of Statistics
2. High robbery victimization, increased incidence of sexually related crimes,
kidnappings, and violence-related injuries have also contributed to the magnitude of the
problem. In 2015, 615 claims of sexual assault were reported to the police compared to 385 in
2008. In contrast, claims of victimization from domestic violence reported to police decreased
35
https://www.wilsoncenter.org/sites/default/files/FINAL%20PDF_CARSI%20REPORT_0.pdf 36
United Nations Office on Drugs and Crime. 2013. Global Study on Homicide. Trends, Context, Data. Vienna:
United Nations Office on Drugs and Crime. 37
2016 Reporte Estadístico: Secretaria Técnica del Consejo Nacional de Seguridad 38
Research Triangle Institute. 2014. Factors Affecting Homicide Rates in Guatemala 2000–2013: A Study of the
Municipalities of Guatemala, Mixco, and Villa Nueva. Research Triangle Institute.
35.4 38.1
30.9
24.2 25.9
28.1 30.8
35.1 36.4
42 45.2
43.3 46 46.4
41.5 38.6
34.2 34 31.2
29.5
0
5
10
15
20
25
30
35
40
45
50
1990 1995 2000 2005 2010 2015 2020
Ho
mic
ide
Rat
es (
per
10
0,0
00
)
Year
50
from 2,050 in 2008 to 1,861 in 2015.39,40
Around 45.8 percent of Guatemalans identify security
as a main problem of the country.41
3. Young people, particularly young men, comprise the bulk of both perpetrators and
victims of violence. Since 2012, the homicide rate in Guatemala among youth has been more
than double the rate of the general population, about 74 murders per 100,000 young people.42
4. The fact that violence disproportionately affects men, however, should not diminish
the importance of preventing violence against women. The overlapping manifestations of
gender-based violence against women in Guatemala include domestic violence, rape, child
marriage, sexual harassment, and violence and discrimination against indigenous women.43
Statistical data on the magnitude of the problem of domestic violence is particularly elusive44
due
to limited recordkeeping and lack of reporting on the part of victims.45
5. Drug trafficking is one of the external drivers of violence in Guatemala. A 2011
Bank report on crime and violence in Central America shows that drug trafficking is the main
factor behind rising violence levels in the region, including Guatemala. Hotspot drug trafficking
areas tend to experience crime at rates more than 100 percent higher than non-hotspot areas.46
6. Although gang members are commonly assumed to be the main perpetrators of
violent crimes, little empirical evidence exists regarding their contribution to crime,
including drug trafficking.47
The Central American and Caribbean Commission of Police
39
Eguizabal et al., 2015. Crime and Violence in Central America’s Northern Triangle. Washington, DC: Wilson
Center. 40
Corporación Latino barómetro (2012). La Seguridad Ciudadana. El Problema Principal de América Latina.
Lima, Perú. 41
Corporación Latino barómetro (2011). Informe 2011. Santiago de Chile. 42
Data from the National Police Office, 2013. 43
According to the National Institute of Forensic Sciences, in the first half of 2013, 403 women suffered violent
deaths, an increase of 66 compared to the same period in 2012. The Inter-American Commission on Human Rights
describes an overlap between domestic violence and Guatemala’s epidemic rates of femicide. For every ten women
killed, three previously either reported violence or were granted restraining orders, and 24 percent died as a result of
domestic violence. 44
Inter‐American Commission on Human Rights, Access to Justice, supra note 3 at paragraph 188. 45
Advocates and the Human Rights Ombudsman report testimated 90 percent of domestic violence incidents in
Guatemala are unreported (Adriana Beltrán & Laurie Freeman, Washington Office on Latin America, Hidden in
Plain Sight, Violence Against Women in Mexico and Guatemala 6 2007) available at
http://www.wola.org/sites/default/files/downloadable/Central%20America/past/ViolenceAWomen.pdf; Center for
Gender & Refugee Studies, U.C. Hastings Coll. Of Law, Getting Away with Murder: Guatemala’s Failure to Protect
Women and Rodi Alvarado’s Quest for Safety 6 (2005). 46
World Bank. 2011. Crime and Violence in Central America: A Development Challenge. 47
The two major gangs in Central America, the Mara Salvatrucha (MS13) and 18th Street, have their roots in the
US, where nearly a million Central Americans fled during the civil conflict in the region during the 1980s. A small
percentage of those immigrants became involved with gangs, including the 18th Street, a primarily Mexican gang
established many years prior to the wave of Central American immigration. Later other immigrants formed MS13.
During the mid-1990s, many Central Americans, including some gang members, were deported to their countries of
birth, where some became involved in criminal activity and replicated the 18th Street and MS13 gang structures. In
response, governments implemented a variety of mano dura policies that emphasized repression and law
enforcement, and minimized prevention, rehabilitation and social reintegration of gang members.
51
Chiefs estimates that there are about 14,000 gang members affiliated with about 434 gangs in
Guatemala.48
However, available data is not conclusive regarding the overall contribution of
gangs to violent crimes in the country.
7. Crime and violence affect specific populations and specific geographic areas
disproportionately. About half of violent deaths in the country take place in only five percent of
the country’s municipalities. For instance, over 39 percent of national homicides49
between 2003
and 2015 were reported to have occurred within the metropolitan area of the Department of
Guatemala, which represents about 17 percent of the population.50
Other regions with the highest
homicides rates —such as Izabal, Chiquimula, El Petén, Zacapa, and Jutiapa—are located along
the borders with El Salvador, Honduras, Mexico, and Belize. While this is indicative of the likely
link between violence and transnational organized crime such as drug trafficking, currently there
are no studies that establish this causality.
8. Although drug trafficking is one of the external drivers of violence in the country,51
a combination of social, economic, and governance conditions have exacerbated and
amplified its impact. These conditions include socioeconomic factors such as social inequality
and a lack of social and economic opportunities. With a Gini coefficient for consumption of 0.39
in 2011, Guatemala ranks among the countries with the highest levels of income inequality in the
region.52
The country also has the second highest percentage of youth who are not studying or
working in Central America, estimated at 25 percent.53
In this regard, a lack of social and
economic opportunities for youth are among the key factors of violence in the country.
9. Structural inequalities between women and men are also risk factors driving
intimate partner and sexual violence.54
In the most recent national Reproductive Health
Survey (2008–2009) 24.5 percent of women between the ages of 15 to 49 reported experiencing
physical violence from their partners. Regarding sexual violence, 12.3 percent reported
experiencing it from a partner, and 4.8 percent reported experiencing it in the past 12 months.
10. The proliferation of firearms in Guatemala is another risk factor for violence. The
Geneva-based Small Arms Survey conducted in 2008 highlighted the significant correlation
between firearms and violent crime in the country.55
Firearms were overwhelmingly present in
all reported incidents. Of those participating in the survey, 31 percent said they owned some kind
of firearm and one-third said they owned handguns. A more important challenge appears to be
48
World Bank. 2011. Crime and Violence in Central America: A Development Challenge. 49
Data from the National Civil Policy, 2012. 50
According to Project Projections by the National Institute of Statistics in 2011. 51
Drug trafficking is the main factor behind rising violence levels in the region. Hotspot drug trafficking areas tend
to experience crime at rates more than 100 percent higher than non-hotspot areas. Crime and Violence in Central
America. A development Challenge, The World Bank, 2011. 52
World Bank. 2012. Guatemala - Country Partnership Strategy for the period FY2013-2016. 53
International Labor Organization 2013. Decent Work and Youth in Latin America, Policies for Action. 54
World Health Organization 2010.Preventing Intimate Partner and Sexual Violence Against Women. Taking
Action and Generating Evidence. Geneva. 55
Small Arms Survey y Centro de Recursos para el Análisis de Conflictos (2011). Guatemala en la Encrucijada.
Panorama de una Violencia Transformadora.
52
that in 2015, 8 out of 10 firearms seized in Guatemala were illegal and 9 out of 10 crimes were
being committed with illegal firearms.56
11. Crime and violence impose a heavy burden on the country’s development. The
economic cost of crime is high, accounting for 7.7 percent of GDP in 2011,57
11.3 percent of
GDP in 2013,58
and 10 percent of GDP in 2014.59
Of this, health care costs account for the
largest single share of the added financial burden for the country (4.3 percent of GDP). An
additional 1 percent is explained by the added financial burden on public security and
administration of justice, an additional 1.5 percent is spent on private security costs, and 0.8
percent goes to insurance payments for destroyed property. Beyond these direct costs, crime and
violence significantly affects the business investment climate, reducing incentives for firms to
invest productively, create jobs, and expand. The amount of private sector investments is
affected by resources being diverted towards crime prevention activities instead of towards
productive, growth-enhancing investments. Indeed, according to World Bank Enterprise
Surveys, crime in Guatemala is among the top five constraints to productivity and growth
identified by Central American firms.
Sectoral and Institutional Response at the National Level
12. The importance of crime and violence prevention has led to national efforts on the
policy and program levels. The constitution recognizes the protection of citizens as the central
axis for peace and security. In addition, the peace agreements signed in 1996 also highlight
active and continuous citizen engagement as key elements of security and development.
13. The Government of Guatemala has prioritized a focus on citizen security, violence
prevention, and peaceful co-existence over the last five years. In 2014, the MINGOB through
the VMP launched the NVCP Policy to address major risk factors of violence, such as youth
unemployment, domestic violence, single parent households, and child maltreatment. A
subsequent executive order established functions across line ministries for the operationalization
of the NVCP and is still active.
14. On the programmatic side, initiatives such as Municipio Seguro and Barrio Seguro60
were launched during the second half of 2012 in order to support community-based
approaches to violence prevention. In addition, a number of joint actions and task forces
between MINGOB, the prosecutor’s office, and the judiciary are being implemented in about 30
municipalities to address illegal activities such as homicides, kidnappings, and extortion, among
others.
56
Eguizabal et al. 2015. Crime and Violence in Central America’s Northern Triangle. Wilson Center. 57
World Bank. 2011. Crime and Violence in Central America: A Development Challenge. 58
Fundesa. (2014). El costo de contener la violencia en Guatemala. 59
Institute for Economics and Peace. 2015. Global Peace Index 2015: Measuring Peace, its Causes and its Economic
Value. Sydney: Institute for Economics and Peace. 60
The Barrio Seguro is a program of social interventions for disadvantaged and unsafe neighborhoods coordinated
by MINGOB and implemented in coordination with selected communities.
53
15. Although national-level efforts aimed at addressing crime and violence, such as the
National Prevention Policy, have been undertaken, institutional limitations represent an
obstacle to their effective implementation. For example, the lack of timely and reliable
information on crime and violence limits the analysis of the drivers and dynamics of crime that
could inform the formulation of better prevention interventions.
Crime and Violence in the MGCS
16. Four of the six municipalities of the MGCS61
ranked among the top five municipalities,
out of 17, in the Department of Guatemala with the highest homicide rates in 2015. As in the rest
of the country, violence in the Mancomunidad disproportionally affects youth. Over 57 percent
of homicides that occurred in the Mancomunidad between January and June 2013 had as victim
young men and women between the ages of 15 and 29.
Figure A.5.2. Average Homicide Rates of the Guatemala Department per Municipality,
2014-2015
Source: National Civil Policy and National Institute of Statistics.
17. During the last decade, in both Villa Nueva and Santa Catarina Pinula, crimes
against property have registered the highest number of victims. These include both robberies
and extortion, with the latter more prevalent in municipalities with a higher presence of gangs
such as Mixco and Villa Nueva. Further in-depth analysis is needed to better understand the
dynamics and trends of crime and violence at local levels.
18. The participatory development process established in the Rural and Urban
Development Councils Law (2002) decentralizes the implementation of regional and local
development plans, including crime and violence prevention activities. The participatory
61
The MGCS in the metropolitan area of Guatemala City, includes municipalities of Mixco, Amatitlán, Villa Nueva,
San Miguel Petapa, Santa Catarina Pinula and Villa Canales.
40.38 43.02 48.64
75.53
61.27
29.76
54.48
44.95
58.22 58.26
70.29
27.52
0
10
20
30
40
50
60
70
80
Villa Nueva Mixco VillaCanales
SantaCatarina
Pinula
Amatitlan San MiguelPetapaR
ate
of
Vio
len
t D
eath
s (p
er 1
00
,00
0)
Municipality
2015
2014
54
mechanism introduced by the Rural and Urban Development Councils Law aims to facilitate
citizens’ inputs in local development plans while also facilitating the alignment of national and
sectoral policies.
19. Under this decentralized mechanism, citizen security commissions have been
established at the municipal level. These commissions have, as their main objective, the
participatory design and coordination of local violence prevention plans. Communities identify
problems related to crime and violence, set priorities, and propose actions under the COCODES
to COMUDES. COMUDES, through their respective municipal citizen security commissions,
are responsible for coordinating violence and crime prevention interventions, supervising and
supporting community engagement, and submitting action plans to CODEDES based on inputs
provided by the community.
20. Municipalities within the MGCS have developed programs and invested municipal
resources to address crime and violence. These include citizen security commissions,
municipal offices for women, and local violence prevention programs. However, central
Government support to local governments for crime and violence prevention activities has been
uneven, and as a result, the capacity of localities varies with respect to crime control measures.
21. One of the key challenges faced by the MGCS in addressing crime and violence is
the absence of disaggregated data that would allow for accurate, timely, and action-
oriented analysis of risk factors for violence. The lack of institutional resources and capacity
to collect and analyze data is also a structural problem that affects the formulation and evaluation
of effective and targeted violence prevention policies. Similarly, the creation of standards for
such analysis is important to allow for the collection and comparison of information at the
department and national levels.
55
Annex 6: Economic Analysis
GUATEMALA: Urban Infrastructure and Violence Prevention Project (P143495)
1. Given the demand-driven nature of the Project, and that actual costs and numbers
of beneficiaries are not known at this stage, a precise Economic Rate of Return could not
be estimated. Instead, two levels of analyses were conducted. The ‘Robust Decision-Making’
method estimated benefit-cost ratios for the proposed water and sanitation investments and an
economic cost-benefit analysis was calculated through hedonic pricing. Both confirmed that the
proposed interventions are expected to be positive.
2. This economic analysis focuses on water and sanitation investments. They are
integral to meeting Millennium Development Goals and may be the most expensive component
of the Project’s investment portfolio.
Explanation of Benefits and Costs of Water and Sanitation Investments
3. The economic value of improved water and sanitation investments has been widely
established in the literature (WHO 2012; Haller et al. 2007; Prüss-Üstün et al. 2008; Hutton
and Haller 2004). The World Health Organization, for example, has demonstrated that the net
economic benefits of improved water and sanitation interventions are strongly positive (WHO
2012; Hutton and Haller 2004). Benefits include avoided cases of disease, health care costs, and
avoided time spent to access water and sanitation facilities. Its most recent analysis of
interventions around the world finds that investments needed to meet the Millennium
Development Goals in water and sanitation would have benefit-cost ratios ranging from 2.8 in
Sub-Saharan Africa to 8.0 in East Asia. It further argues that, globally, every dollar invested in
improved sanitation yields a US$5.5 return (WHO 2012).
4. Communication with stakeholders and results of a household survey suggest that
many underserved people in the MGCS principally receive water from private truck
service and have latrines or share toilets. Project interventions seek to provide these citizens
with piped water and sewerage connections. It is anticipated that connected private sewerage
offers several benefits over latrines or shared toilets. The benefits include the following:
Improvements in health, particularly reductions in diarrheal and other disease associated with
poor sanitation;
Potential time savings for those who would otherwise use shared facilities;
Local environmental benefits from improved sanitation;
Security and safety from being able to use in-house facilities; and
Intangible gains such as greater privacy.
5. The benefits from piped water rather than water delivered by trucks include the
following:
56
Substantial cost savings for beneficiaries, given that water from private trucks is much more
expensive than water from municipal connections;
Potential time savings from having water piped into homes rather than waiting to fill cisterns
from trucks; and
Improved reliability of water service, given that private companies may not provide reliable
service.
6. The benefits from these investments are similar but not the same as those studied in
the literature. For instance, piped water is not expected to confer the health benefits often
described in the literature, because the quality of water delivered by the municipalities is not
expected to be of higher quality than water provided by private trucks. The key costs of these
interventions include (i) initial capital costs of building the water and sewage infrastructure; and
(ii) ongoing operations and maintenance of the system.
Summary of Economic Analysis Results
7. Several Project characteristics make it challenging to estimate its economic impact.
These include:
The Project is demand-driven: decision-makers and potential beneficiaries will influence
which specific interventions and neighborhoods are chosen after the Project is approved;
Many social benefits are diverse, indirect, and therefore difficult to quantify; and
Little data is available on costs of interventions.
8. All of the benefits that households are expected to receive from these interventions
cannot be quantified. Instead, the analysis quantifies the subset listed in Table A.6.1, for which
the literature offers well-developed methodologies. However, there are significant data gaps and
uncertainties in quantifying these costs and benefits. The analysis treats the 11 parameters listed
in
9.
10.
11. Table A.6.2 in the economic model as uncertain and generates a Monte-Carlo-like sample
of 100 cases across them. Because the Project is demand-driven, the scale of interventions is not
yet known. Measures such as the net present value would be misleading. Instead the analysis
used the benefit-cost ratio to measure the economic performance, because it is independent of
Project scale and because it is widely used in the literature on economic analysis of water and
sanitation projects.
Table A.6.1. Summary of Costs and Benefits assessed in the Economic Analysis Benefits of sewerage connections Productivity gains from avoided illness and mortality
Productivity gains from added convenience
Avoided public and private healthcare expenditures
Benefits of piped water Cost savings to beneficiaries
Productivity gains from added convenience
Costs of water and sewerage
Interventions Initial capital costs
Annual operations and maintenance
57
Table A.6.2. Parameters Treated as Deeply Uncertain in the Economic Model
Parameter Description (Minimum,
Maximum)
Hea
lth
Ris
k
Cases of diarrheal illness
per capita per year
These parameters determine the baseline health
impacts of poor sanitation, and the reduction in
morbidity and mortality provided by the
intervention. Health impacts have both a direct
economic impact and a productivity impact
measured by the value of time. They are uncertain,
with different sources offering significantly
different values. A wide range is used for each
parameter.
(0.1, 1.5)
Deaths per 1000 people per
year from poor sanitation
(0.001, 1)
Health risk reduction from
intervention
(0.1, 0.3)
Tim
e V
alu
e
Time saved per capita per
day (hours)
These parameters determine the direct time savings
from Project interventions and how the time saved
is valued, as a percent of GDP per capita per day.
These are uncertain because there is little data on
time savings from water and sanitation in the
MGCS,62
and there are many ways of valuing time.
The assumed time value of infants and seniors is 0.
(0, 0.75)
Value of time - children (7.5%,
22.5%)
Value of time - adults (15%, 45%)
Inte
rven
tion
Cost
s
Cost of intervention per
household (US$)
These parameters define the key cost and lifetime
time characteristics of the intervention. Because the
intervention is demand driven, and because there is
little data on similar interventions, these parameters
are treated as uncertain.
(100, 1500)
Annual operations and
maintenance cost as
percent of initial
intervention cost
(2.5%, 10%)
Years to construct
intervention
(2, 5)
Lifetime of intervention
(years)
(20, 60)
Oth
er Discount rate The discount rate is uncertain: it is a political
choice over which there is often little consensus.
(4%, 12%)
12. Figure A.6.1 shows a histogram of the benefit-cost ratio in 100 model simulations in
which each of the eleven uncertainties are varied simultaneously. Of the 100 simulations
over the plausible range of values, 98 have a benefit-cost ratio of at least 1, 81 have a benefit-
cost ratio of at least 1.5, and 66 have a benefit-cost ratio of at least 2. This analysis suggests that
the intervention is economically sound under nearly all assumptions about the uncertain
parameters. Moreover, the analysis may understate the actual benefit-cost ratio, given that the
economic model does not include all types of benefits. This does not suggest that the probability
of realizing a benefit-cost ratio of 1 is 98 percent (or that the probability of a benefit-cost ratio of
62
Although some time savings is expected from in-home water and sanitation, the household survey offers little data
on time spent filling water, which may reflect missing data, blank responses, or that in practice little or no time is
spent filling water. The survey does not ask about time spent on sanitation activities.
58
1.5 or 2 is 81 percent and 66 percent, respectively). The analysis assigns no probability
distribution to the range of uncertain parameters. Such a range would not be defensible given the
data gaps and uncertainties faced. Instead, it demonstrates that the intervention is economically
robust, achieving high gains no matter what the assumption about the future is.
Figure A.6.1. Histogram of the Benefit-Cost Ratio of 100 Latin Hypercube Simulations
Key Drivers and Vulnerabilities of Economic Performance
13. A closer analysis of the benefits reveals that the key drivers of benefits are the
timesaving from more convenient water and sanitation (on average, 39 percent of total
benefits) and households’ reduced expenses on water (on average, 52 percent of total
benefits).
14.
15. Figure A.6.2 shows a boxplot of this metric over the full 100 simulated cases. This
suggests that during implementation, decision-makers should give added consideration to
neighborhoods for which convenience and water-expense benefits are expected to be significant.
Figure A.6.2. Boxplot of Percent of Total Benefits Derived from Added Convenience (left)
and Cost Savings (right)
Benefit-Cost Ratio
Fre
quen
cy (
out
of
10
0 s
imula
tio
ns)
59
16. The analysis also assessed the cost threshold at which the Project no longer meets
economic performance targets. A second simulation was conducted, this time increasing the
potential range of costs to US$3,000 per household, much higher cost than any estimate in the
literature or provided by the MGCS stakeholders. A data mining analysis of these 100
simulations reveals that the cost-benefit ratio of Projects was at least 1 as long as the initial cost
of the intervention was below US$2,000 per household. This threshold serves as a useful
benchmark during implementation – decision-makers should seek to keep costs below US$2,000
per household and give added consideration to neighborhoods where the intervention can be
implemented below this threshold. Equally importantly, the analysis reveals that other uncertain
parameters – for example, related to health outcomes, discount rates, value of time – are much
less important in distinguishing between when the water and sanitation interventions meet or fail
to meet economic performance targets. The economic vulnerabilities and strengths of the
proposed water and sanitation interventions can be understood without knowing the values of
these parameters. This helps to focus attention on the parameters that matter for decision-
making: the convenience benefits, cost benefits, and initial implementation costs. These
parameters also help identify some of the characteristics that decision-makers should consider
when selecting neighborhoods and designing the proposed interventions.
17. In sum, the analysis shows that:
the water and sanitation interventions are robust – having a cost-benefit ratio of at least 1
under nearly all plausible assumptions about deeply uncertain parameters;
the convenience benefits from sanitation and the water expense savings from municipal piped
water make up the large majority of total benefits; and
the water and sanitation interventions must cost less than US$2,000 per household – a
threshold well above the costs documented in the literature – in order to have a cost-benefit
ratio of at least 1.
Convenience Benefits Water Expense Benefits
Per
cent
of
To
tal
Ben
efit
s
60
15. In addition to the analysis presented above, a rigorous economic cost-benefit
analysis was calculated thorough hedonic pricing, a common method used in urban
upgrading projects. It reveals the estimated marginal benefits, per house, for each of each
goods or services improved by the Project. Ideally, hedonic pricing models use an updated
cadaster to produce reliable results. While efforts were made to obtain reliable data of sufficient
granularity, only the 2010 Household Survey provided reliable and detailed data. The survey
collects data on property attributes, access and quality of public services, and household
expenditures, including rent (paid or estimated, if property is owned). The costs and beneficiaries
were obtained from two actual contracts for executed works that contained the required
information and were also similar to interventions likely to be financed by the Project: a water
and sanitation project in Villa Nueva benefitting 409 households, and the replacement of 3,887
street lamps in Villa Canales, relating it to increased sense of safety.
16. The hedonic pricing model revealed that having a water connection, waste collected,
an own toilet and perception of security all had a positive effect on the value of a property.
The net present value of the water intervention in a ten-year horizon was positive and estimated
at GTQ 22,817 equivalent to over US$2,900, while that of the street lighting project was also a
positive GTQ.7,984, or US$1,025. Depending on the interventions ultimately financed by the
Project, it is expected to increase water coverage and water quality, reducing out-of-pocket
expenditures for households while also translating into more valuable properties. Safety is a huge
concern in the area, and projects that address the perception of security will also improve the
value of people’s properties, reflecting a better quality of life.
17. Sensitivity and risk analyses were performed. The first proved robust even after
changing several variables at the same time. The risk analysis was performed in collaboration
with the office of the Chief Economist of Sustainable Development Network. It proved that the
intervention is economically sound under nearly all assumptions. Moreover, the analysis may
understate the actual benefit-cost ratio, given that the economic model does not include all types
of benefits.
18. The World Bank’s added value is threefold, providing the MGCS and the country
with: (a) an integrated approach in urban upgrading interventions; (b) improved public
institutions and processes that can be replicated by other Mancomunidades; and (c) competitive
funding. These investments will accrue benefits over a long period of time and will not crowd
out the private sector, hence the importance of a long-term partner to advocate for, and finance,
their provision. The rationale for public involvement stems from the inherent nature of water and
sanitation and security as public goods. As such, regular market structures and incentives do not
apply, and it is necessary for the public sector to provide these services, or complement the
private sector where these services are already present. Even in the case of water provision,
where coverage is high and the private sector’s presence is strong, their service is considerably
more expensive, and of the same quality. In addition, it is only the public utility that provides
sanitation services, likewise with street lighting. Public health and safety concerns thus justify
public sector involvement.
61
Annex 7: Map of Proposed Project Areas
GUATEMALA: Urban Infrastructure and Violence Prevention Project (P143495)