Another lesson that was not raised by the PCR is the issue of tariff and cost recovery. The project agreement specified that wastewater tariffs were to be reviewed annually and adjusted as needed to achieve the cost-recovery targets. A special loan administration mission fielded in September 2010, however, reported that the process of increasing tariffs had been postponed for over 4 years. The auditor also raised concerns that the tariff revenue being received was insufficient to maintain the operation as well as meet debt obligations. Tariffs were eventually raised on 1 August 2014, nearly 9 years later than planned. The lesson learned from this experience is the need during project preparation to ensure the full commitment of the government and the executing agency to implement potentially unpopular policies, and todevelop realistic implementation schedules for such policies.
Wuhan Wastewater and Stormwater Management Project